Volume 157, No. 36 covering the 1st Session of the 112th Congress (2011 - 2012) was published by the Congressional Record.
The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.
“ETHANOL SUBSIDIES AND TARIFFS” mentioning the Environmental Protection Agency was published in the Senate section on pages S1543-S1544 on March 10, 2011.
The publication is reproduced in full below:
ETHANOL SUBSIDIES AND TARIFFS
Mrs. FEINSTEIN. Mr. President, I have introduced legislation, with my colleague Senator Webb, to repeal corn ethanol subsidies and reduce ethanol tariffs.
This legislation has two major provisions.
First, it repeals the 45 cent per gallon corn ethanol blender subsidies--26 U.S.C. 6426(b) and 26 U.S.C. 40(h)--as of July 1, 2011, eliminating the corn ethanol subsidy six months early and saving approximately $3 billion for American taxpayers.
The bill would not affect the credit for noncorn, second generation
``advanced biofuels'' through 2011.
Second, the bill would lower the tariff on imported ethanol to the per gallon level of ethanol subsidies, to reestablish parity between the subsidy and the offsetting tariffs.
This removes the real trade barrier on imported ethanol, but also prevents foreign producers from benefitting from U.S. subsidies.
This legislation is necessary because the 54 cent-per-gallon tariff on ethanol imports and the 45 cent-per-gallon corn ethanol subsidy are fiscally irresponsible and environmentally unwise.
And their recent, 1-year extension in December 2010 made our country more dependent on foreign oil.
Subsidizing blending ethanol into gasoline is fiscally indefensible.
If the current subsidy were to exist through 2014 as the industry has proposed, the Federal Treasury would pay oil companies at least $31 billion to use 69 billion gallons of corn ethanol that the Federal Renewable Fuels Standard already requires them to use under the Clean Air Act.
We cannot afford to pay industry for following the law.
According to this month's Government Accountability Office report on
``Opportunities to Reduce Potential Duplication in Government Programs, Save Tax Dollars, and Enhance Revenue'':
The ethanol tax credit and the renewable fuel standard can be duplicative in stimulating domestic production and use of ethanol, and can result in substantial loss of revenue to the Treasury.
GAO found that the ethanol tax credit, which will cost about $5.7 billion in 2011, is largely unneeded to ensure demand for domestic ethanol production.
The agency recommends that Congress reconsider the necessity of the tax credit, given the effectiveness of the renewable fuel standard, which is administered by EPA.
This legislation would simply implement the GAO's recommendation by repealing this wasteful subsidy 6 months early.
In addition, this legislation would address the tariffs on ethanol that make our country more dependent on foreign oil.
The combined tariffs on ethanol are 11 to 15 cents per gallon higher than the ethanol subsidy it supposedly offsets, and this lack of parity puts imported ethanol at a competitive disadvantage against imported oil.
This discourages imports of low carbon biofuel from Brazil, India, Australia, and other sugar producing countries, and it leads to more oil and gasoline imports from OPEC countries that enter the United States tariff-free.
Reducing the ethanol tariff will diversify our fuel supply, replace oil imports from OPEC countries with low carbon biofuel from our allies, and expand our trade relationships with democratic states.
The data overwhelmingly demonstrate that the costs of the current corn ethanol subsidy and tariff far outweigh the benefits.
The Center for Agricultural and Rural Development at Iowa State University recently estimated that a 1-year extension of the ethanol subsidy and tariff would lead to only 427 additional direct domestic jobs at a cost of almost $6 billion, or roughly $14 million of taxpayer money per job.
According to a July 2010 study by the Congressional Budget Office, ethanol tax credits cost taxpayers $1.78 for each gallon of gasoline consumption reduced, and $750 for each metric ton of carbon dioxide equivalent emissions reduced.
The ethanol subsidy and the ethanol tariffs also threaten our environment.
They support and protect significantly more corn production in the Mississippi River watershed, which experts believe is a primary cause of a ``dead zone'' in the Gulf of Mexico.
The current ethanol subsidy lacks any requirement that the subsidized fuel lead to a reduction in greenhouse gas pollution.
And the tariff on ethanol imports also prevents greater use of imported ethanol made from sugarcane.
Both the U.S. Environmental Protection Agency and the California Air Resources Board agree that putting sugarcane ethanol in our current cars and trucks results in the least greenhouse gas pollution, of all widely available options.
In contrast, the legislation I am introducing would--for the first time--limit subsidies only to ``advanced biofuels'' that reduce pollution at least 50 percent and are produced from noncorn biomass, such as cellulose, switchgrass, or algae.
And it would level the playing field for low carbon biofuel imports, which must compete against dirty oil from OPEC.
Historically our government has helped a product compete in one of three ways: subsidize it, protect it from competition, or require its use.
To my knowledge, corn ethanol is the only product receiving all three forms of support from the U.S. government at this time.
By eliminating ethanol subsidies and trade barriers, this legislation would produce a smaller budget deficit; a healthier Gulf of Mexico ecosystem; less global warming pollution; and reduced dependence on imported oil.
I look forward to working with my colleagues to advance responsible energy tax policies that reduce pollution, create jobs, and improve our international relationships.
Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.
There being no objection, the material was ordered to be printed in the Record, as follows:
S. 530
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. ETHANOL ELIGIBLE FOR BLENDER INCOME TAX AND FUEL
EXCISE TAX CREDITS.
(a) Income Tax Credit.--Section 40(h) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
``(4) Ethanol eligible for credit.--In the case of any sale or use for any period after June 30, 2011, this subsection shall apply only to ethanol which qualifies as an advanced biofuel (as defined in section 211(o)(1)(B) of the Clean Air Act (42 U.S.C. 7545(o)(1)(B))).''.
(b) Excise Tax Credit.--Section 6426(b) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
``(7) Ethanol eligible for credit.--In the case of any sale, use, or removal for any period after June 30, 2011, no credit shall be determined under this subsection with respect to an alcohol fuel mixture in which any of the alcohol consists of ethanol unless the ethanol qualifies as an advanced biofuel (as defined in section 211(o)(1)(B) of the Clean Air Act (42 U.S.C. 7545(o)(1)(B))).''.
(c) Effective Date.--The amendments made by this section shall apply to any sale, use, or removal for any period after June 30, 2011.
SEC. 2. ETHANOL TARIFF-TAX PARITY.
Not later than 30 days after the date of the enactment of this Act, and semiannually thereafter, the President shall reduce the temporary duty imposed on ethanol under subheading 9901.00.50 of the Harmonized Tariff Schedule of the United States by an amount equal to the reduction in any Federal income or excise tax credit under section 40(h), 6426(b), or 6427(e)(1) of the Internal Revenue Code of 1986 and take any other action necessary to ensure that the combined temporary duty imposed on ethanol under such subheading 9901.00.50 and any other duty imposed under the Harmonized Tariff Schedule of the United States is equal to, or lower than, any Federal income or excise tax credit applicable to ethanol under the Internal Revenue Code of 1986.
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