The Iowa Corn Growers Association sent out a press release last week saying ICGA applauds the Domestic Energy Promotion Act of 2011 introduced by U.S. Senator Chuck Grassley (R-IA). The legislation would reform existing federal ethanol tax incentives. The bill is set to reform and extend a number of biofuels tax incentives, including the blender's credit and the alternative fuel refueling property credit. Iowa Senator Tom Harkin has signed on in support of the bill.
The bill contains the following pieces:
1) A modified Volumetric Ethanol Excise Tax Credit (VEETC) through December 31, 2016. It also provides for a fixed rate for two years followed by a variable rate for three years after which the credit terminates. The bill also extends the small producer tax credit for the same time period.
2) Extension of the alternative fuel vehicle refueling property credit through December 31, 2016. However, this is amended so that a qualified ethanol blend which is not less than 20% ethanol by volume and not more than 85% ethanol by volume is treated as a clean-burning fuel.
3) Extension through December 31, 2016 of the ethanol tariff. The tariff on ethanol imported into the U.S. would be reduced to 20 cents for 2012 and 15 cents for 2013 through 2016.
"Iowa Corn supports reforming ethanol tax policy. We are excited to see encouraging movement on a bill that is positive for American consumers and farmers," says Dean Taylor, a farmer from Prairie City and current president of the Iowa Corn Growers Association. "Ethanol was created to help with energy security and our nation's fuel supply. Now is a critical time to make sure our nation has home-grown, alternative fuel sources that are environmentally friendly and renewable."
Groups Welcome Bill Transforming Current Ethanol Tax Policy
Corn and ethanol groups welcomed this legislation, introduced on May 4, which seeks to transform the U.S.'s current ethanol policy. The National Corn Growers Association (NCGA), the American Coalition for Ethanol (ACE), Growth Energy and the Renewable Fuels Association (RFA) last week praised the legislation offered by a bipartisan group of senators, led by Iowa Senator Chuck Grassley, to responsibly transition and transform current ethanol tax policy.
This legislation would reduce the current blender's credit, also known as VEETC, for a two-year period before transitioning to a tax credit that would adjust based on the price of oil, notes Grassley. Importantly, this legislation would also improve upon current tax credits for the installation of blender pumps and ethanol fueling infrastructure. Additionally, the bill would extend tax credits for small ethanol producers as well as for advanced and cellulosic ethanol.
Original cosponsors of the Domestic Energy Promotion Act of 2011 include: Senator Kent Conrad (D-ND), Senator Mike Johanns (R-NE), Senator Amy Klobuchar (D-MN), Senator Al Franken (D-MN), Senator Tim Johnson (D-SD), Senator Tom Harkin (D-IA), and Senator Ben Nelson (D-NE).
The corn grower and ethanol groups issued the following statement:
"The leadership of Senator Grassley and this distinguished bipartisan group of co-sponsors has been and remains instrumental in allowing America's ethanol industry to grow and evolve. At a time of near-record gas prices and continued volatility in world oil markets, America's growing production and reliance of domestic ethanol sources is creating jobs, keeping gasoline prices down, and reducing this nation's appetite for imported oil. The Domestic Energy Promotion Act of 2011 would ensure we don't abandon ethanol production, which is an increasingly vital American industry, but rather we smartly and responsibly foster its continued growth and evolution."
"This legislation rightfully recognizes federal budget constraints by reforming the ethanol tax credit and significantly reducing its cost. Additionally, this bill would improve current tax credits for the installation of blender pumps offering higher level ethanol blends and provide Americans more choice when they fill up. Critically, this legislation would also ensure progress made to commercialize advanced ethanol technologies using new feedstocks such as grasses and municipal solid waste is accelerated. We thank these senators for their leadership in introducing this bill and look forward to working with them through the legislative process that ultimately ends with the President's signature."
According to a recent report from Iowa State University's Center for Ag and Rural Development and the University of Wisconsin, the growth in production and use of ethanol kept American gas prices $0.89 lower than it otherwise would have been in 2010. Such downward pressure on the gasoline market saved the average American family more than $800 last year alone. From 2000-2010, ethanol kept gasoline prices $0.25 cents lower on average than they otherwise would have been, resulting in nearly $35 billion in avoided cost at the pump for American consumers.
About the National Corn Growers Association: Founded in 1957, NCGA represents 35,000 dues-paying corn farmers nationwide and the interests of more than 300,000 growers who contribute through corn checkoff programs in their states. NCGA and its 48 affiliated state associations and checkoff organizations work together to create and increase opportunities for their members and their industry. For more information, visit www.ncga.com.
About Growth Energy: Growth Energy is a group committed to the promise of agriculture and growing America's economy through cleaner, greener energy. Growth Energy members recognize America needs a new ethanol approach. Through smart policy reform and a proactive grassroots campaign, Growth Energy promotes reducing greenhouse gas emissions, expanding the use of ethanol in gasoline, decreasing our dependence on foreign oil, and creating American jobs at home. More information can be found at GrowthEnergy.org.
About the American Coalition for Ethanol: The American Coalition for Ethanol or ACE is the grassroots voice of the U.S. ethanol industry, a national advocacy association for the ethanol industry with nearly 1,500 members nationwide, including farmers, ethanol producers, commodity organizations, businesses supplying goods and services to the ethanol industry, rural electric cooperatives, and individuals supportive of increased production and use of ethanol. For more information about ethanol or ACE, visit www.ethanol.org or call (605) 334-3381.
About the Renewable Fuels Association: The RFA is the national trade association for the U.S. ethanol industry. Since 1981, the RFA serves as the voice of the ethanol industry, providing advocacy, authoritative analysis, and important industry data to its members, Congress, federal and state government agencies, strategic partners, the media and other opinion-leader audiences.