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FOR
IMMEDIATE RELEASE
NCGA Says Proposal Will Fix the Highway Trust Fund
Joins 30-plus organizations in letter to Grassley, Baucus
April
1,
2003
Contact: Tracy Grondine, NCGA, (202) 628-7001
WASHINGTON (April
1, 2003)— The National Corn Growers Association (NCGA) yesterday
joined over 30 transportation and agriculture organizations in a letter
of support for bipartisan alternative fuels and highway language offered
by Senate Finance Committee Chairman Charles Grassley (R-Iowa) and Committee
Ranking Member Max Baucus (D-Mont.).
The legislation,
which will be included in the chairman’s “mark” Tuesday
in the finance committee, will resolve the penalty to the Highway Trust
Fund (HTF) associated with the use of ethanol-blended gasoline, by replacing
the existing excise tax exemption that reduces payments to the HTF with
a new “Volumetric Ethanol Excise Tax Credit” (VEETC) that
is funded through general revenues.
“Since federal motor fuel taxes are a primary source of funding
for highway programs, there has understandably been an issue with the
revenue impact of ethanol-blended fuels on the HTF,” said NCGA
Vice President of Public Policy Jon Doggett. “NCGA understands
concerns about retaining this tax incentive, as it may divert funds
from the HTF. NCGA supports full funding of the HTF and is committed
to resolving this matter.”
Under the current
gasoline excise tax, 18.4 cents is paid into the General Fund (GF) for
gasoline and 13.2 cents is paid into the GF for ethanol. Refiners and
gasoline marketers using 10 percent ethanol blends receive a 5.2-cents-per-gallon
reduction from the tax paid on straight gasoline.
According to the
Grassley-Baucus proposal, refiners and marketers would claim the VEETC
on the same Form 720 filed quarterly when they remit their excise taxes,
so the relative value to blenders would be the same. Without impacting
the HTF, the language adds approximately $1.4 billion annually for highway
construction. The provision also eliminates the current 2.5-cent diversion
to deficit reduction from ethanol blended fuels, thus adding an additional
$600 million to the HTF.
“Essentially
this proposal would fix the HTF while further promoting the use of renewable
fuels,” concluded Doggett. “It also unites a broad constituency
group who in the past has not seen eye to eye on many issues.”
To read a full text
of the letter and signatories, visit www.ncga.com
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The National Corn
Growers Association mission is to create and increase opportunities
for corn growers in a changing world and to enhance corn's profitability
and usage. NCGA represents more than 32,000 members, 25 affiliated state
corn grower organizations and hundreds of thousands of growers who contribute
to state checkoff programs.
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