NCGA
Hails Extension of the Corn-based Ethanol Incentive (3-19-04)
In
a move hailed by the National Corn Growers Association (NCGA),
the House Ways and Means Committee voted Wednesday to extend
an ethanol
tax incentive through 2010, three years longer than called for by
the Senate’s pending highway bill.
Revenues generated by the measure will offset tax cuts in a corporate
tax bill. The bill is likely to be attached to the Foreign Sales
Corporation and Extraterritorial Investment Act pending in the House.
“Corn growers should be encouraged by the committee’s
actions yesterday,” said Jon Doggett, NCGA vice president,
public policy. “NCGA members and many of the representatives
in the House committee have campaigned tirelessly to persuade Ways
and Means Committee Chairman Bill Thomas (R-Calif.) to include this
tax credit. We applaud their hard work. This action sends a clear
message that our policymakers are dedicated to cleaner fuels and
national energy security.”
The biodiesel tax incentive was not included in the bill passed
March 17, but NCGA is optimistic all renewable fuel incentives will
be passed in the near future through other legislative vehicles,
Doggett said.
The incentive,
known as the Volumetric Ethanol Excise Tax Credit (VEETC), ensures
renewable fuels users pay the full excise tax amount into
the Highway Trust Fund (HTF). With the modified method of federal
excise tax collection on ethanol-blended fuels, VEETC is expected
to generate more than $2 billion per year in additional HTF revenues.
“While VEETC causes ethanol to pay more into the HTF, we will
have the full 52-cent-per-gallon credit, which will be taken as a
credit on the federal tax,” Doggett said, adding VEETC allows
more flexibility for refiners. “VEETC allows refiners to not
be limited to the 5.7, 7.7, and 10 percent blend levels dictated
by the Clean Air Act, thus opening the door for other ethanol fuels
such as E85 and E-Diesel.”
To view the full text of the bill, click here.