A joint effort of
highway groups and farm organizations helped achieve an historic victory
for renewable fuels in 2004 with the passage of the American Jobs Creation
Act.
This important tax
bill created the Volumetric Ethanol Excise Tax Credit (VEETC), which
ensures that Highway Trust Fund (HTF) revenues are not adversely affected
by ethanol use. VEETC also makes ethanol blending flexible for petroleum
companies and more accessible for growing markets such as E85, E diesel
and fuel cells.
VEETC also strengthens
the nation’s commitment to biofuels. The act extends the ethanol
tax incentive at 51 cents per gallon through December 31, 2010. It also
creates a new tax incentive for biodiesel and improves the small ethanol
producer tax credit to allow a farmer cooperative to pass the credit
along to its farmer owners.
VEETC is expected
to generate more than $3 billion per year in additional HTF revenue,
improving the ability of the federal government and states to improve
transportation infrastructure.
KEY ISSUES
