Volume 155, No. 198 covering the 1st Session of the 111th Congress (2009 - 2010) 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.
“BIODIESEL TAX CREDIT” mentioning the Environmental Protection Agency was published in the Senate section on pages S13783-S13784 on Dec. 22, 2009.
The publication is reproduced in full below:
BIODIESEL TAX CREDIT
Mr. GRASSLEY. Mr. President, the biodiesel tax credit will expire on December 31, 2009. I am speaking today to set the record straight about why the biodiesel tax credit will not be extended before the end of the year.
Some have suggested that Republicans are to blame for not getting the biodiesel tax credit extended before the end of the year. This is simply inaccurate.
The bottom line is that the Senate Democratic leadership decided they were going to attach the tax extender package to a controversial estate tax bill in an attempt to get moderate Democrats and Republicans to vote for an estate tax bill that does not provide sufficient estate tax relief.
If the Senate Democratic leadership had not chosen to hold the tax extender package hostage in an attempt to force moderate Democrats and Republicans to vote for an estate tax bill that lacks support, the tax extender package would have easily passed separately.
The tax extenders bill could have passed as a stand-alone bill easily at any time during this whole year. In fact, the Senate Democratic leadership could simply bring up a noncontroversial version of the tax extenders bill and pass it by unanimous consent like we have done in the past. We wouldn't even need to be talking about the tax extenders package in relation to the Department of Defense funding bill.
However, because the Senate Democratic leadership failed to act on the tax extenders package this entire year, one of the only legislative vehicles left to pass the tax extenders package was the Department of Defense funding bill.
Instead of just adding to the Defense bill a noncontroversial tax extenders package that both Republicans and Democrats could agree on, the Senate Democratic leadership instead decided that they would also try to attach the controversial estate tax bill and a controversial increase in the debt limit.
They could have instead just included a noncontroversial tax extenders package with the Defense bill, and it would have easily passed. Again, they did not do this because they wanted to use the tax extenders package as leverage to get moderate Democrats and Republicans to vote for an estate tax bill that lacks support.
It is also worth noting that there are 60 Senators that caucus with the Democrats, so they can pass anything if they vote together. It rings hollow to place the blame on Republicans for failing to enact the tax extenders package before the end of the year when the Democrats hold a supermajority of 60 Senators, an overwhelming majority in the House, and the Presidency.
The House, waiting until the last month of the year, finally passed a tax extenders bill. However, the House usually passes an extenders bill prior to the last month of the year.
For example, in 2008 the House passed a tax extenders bill on September 26, 2008, and in 2007 the House passed a tax extenders bill on November 9, 2007. This year, the House passed an extenders bill that they knew the Senate would not accept. And then they left town for the year. This is called a dump and run.
The House dumped a tax extenders bill that they knew the Senate would not agree to, and left town before the Senate could have any chance to negotiate a tax extenders bill that both the House and Senate could agree to.
The House also had a choice to make regarding whether they wanted to pass a tax extenders bill this year by simply attaching a noncontroversial version of the tax extenders bill, which both the House and Senate could agree on, to the House Department of Defense bill, without attaching either the controversial estate tax bill or the increase of the debt limit on the Defense bill. However, the House chose not to do so.
Therefore, this should set the record straight. The Democratic leadership in the House and the Senate, and not Republicans, are responsible for the failure to pass a tax extenders bill before the end of this year.
This failure has very serious consequences to the U.S. biodiesel industry, which will grind to a halt as of January 1, 2010. I remind my colleagues of the economic challenges faced by this industry. In 2008, the biodiesel industry supported more than 52,000 green jobs.
Because of the downturn in the economy, the biodiesel industry has already lost 29,000 green jobs in 2009. The industry is poised to lose another 23,000 jobs if nothing is done on the tax incentive or regulatory delays at the Environmental Protection Agency.
So where are these jobs? Some might think they are all in the Midwest, but they are not. These green jobs are in 44 of the 50 States. I would like to list the 13 largest biodiesel-producing States in the country.
There are 24 facilities in Texas. There are 15 facilities in Iowa. There are 6 facilities in Illinois and 6 in Missouri. There are 4 facilities in Washington. Ohio has 11 facilities. There are 5 facilities in Indiana. There are 3 facilities each in Mississippi and South Carolina. There are 7 facilities in Pennsylvania and 4 in Arkansas. New Jersey has 2 facilities. There is 1 facility in North Dakota.
Only 6 of the 50 States do not have some biodiesel production. They are Alaska, Delaware, Maine, New Hampshire, Vermont, and Wyoming. The other 44 States have some biodiesel presence.
So workers in 44 States will be negatively affected by the inaction of this Congress to extend the tax credit.
You don't have to take my word for it. On November 25, I received a letter from the Iowa Renewable Fuels Association.
The letter outlined the economic and job ramifications of allowing the tax credit to expire, even if it is a short-term expiration. I would like to read directly from that letter.
It states in part:
Simply put, if the biodiesel tax incentive is allowed to expire--even for a brief period of time--the Iowa biodiesel industry will cease production and many plants will likely not reopen under current ownership.
If the biodiesel tax incentive expires, biodiesel blends will be priced out of the marketplace and our customers--the oil companies--will stop purchasing biodiesel. In reality, we already cannot book any first quarter sales for next year.
No retroactive action on the tax credit sometime next year will undo the harm caused by the lost sales and shuttered plants over the holidays.
Quite frankly, the biodiesel industry is facing shutdowns that would certainly lead to a much longer--and unpaid--Christmas break than anticipated for the hundreds of workers at Iowa biodiesel plants.
But there are long-term impacts potentially even more far-reaching. After more than a year of mainly breakeven or negative margins, most of Iowa's biodiesel plants simply do not have the cash reserves to withstand even a two or three month shutdown.
So, even if the biodiesel blenders' tax credit is retroactively enacted, several of Iowa's biodiesel plants are unlikely to reopen under the current local-ownership. Please do not let the Iowa-owned biodiesel industry disappear on your watch.
I would ask unanimous consent that the entire letter from the Iowa Renewable Fuels Association to which I referred be printed in the Record.
The dire situation reflected in this letter applies to all 173 biodiesel plants around the country. The expiration of this tax credit on December 31, 2009, will affect all 23,000 workers in this green energy sector.
It is unfortunate that we have to be faced with the loss of 23,000 green jobs because of inaction on the extension of the biodiesel tax credit. I hope this explanation makes clear who is responsible for this terrible situation.
There being no objection, the material was ordered to be printed in the Record, as follows:
Iowa Renewable Fuels Association,
November 25, 2009.Hon. Charles E. Grassley,Hart Senate Office Building,Washington, DC.
Dear Senator Grassley: First, thank you for taking the time to meet with Iowa Renewable Fuels Association members on November 17, 2009. At that meeting, we discussed the absolute necessity of extending the biodiesel blenders' tax credit prior to the end of this year. With this letter, we want to reinforce the economic and job ramifications of allowing the tax credit to expire--even for a couple of months.
As a longtime supporter of Iowa biodiesel, you know that the biodiesel tax incentive, which allows blenders to claim a
$1 excise tax credit for each gallon of biodiesel blended with diesel, is set to expire on December 31, 2009. Simply put, if the biodiesel tax incentive is allowed to expire--even for a brief period of time--the Iowa biodiesel industry will cease production and many plants will likely not reopen under current ownership.
With the tax credit, biodiesel blends are very competitive in today's marketplace. However, if the biodiesel tax incentive expires, biodiesel blends will be priced out of the marketplace and our customers--the oil companies--will stop purchasing biodiesel. In reality, we already cannot book any first quarter sales for next year. Therefore, biodiesel plants are unable to purchase feedstocks for the beginning of 2010 because there is no guarantee that a market for biodiesel will exist come January 1, 2010. As a result, many plants will likely begin to stop operations in mid-December.
No ``retroactive'' action on the tax credit sometime next year will undo the harm caused by the lost sales and shuttered plants over the holidays. Quite frankly, the biodiesel industry is facing shutdowns that would certainly lead to a much longer--and unpaid--Christmas break than anticipated for the hundreds of workers at Iowa biodiesel plants.
That is a prospect that any industry hopes to avoid. But there are long-term impacts potentially even more far-reaching. While 2009 has been a rough economic year for many industries, the biodiesel industry has been hit harder than most. In fact, of Iowa's fifteen biodiesel refineries, only nine are currently operating--and most of those at a severely reduced capacity. After more than a year of mainly breakeven or negative margins, most of Iowa's biodiesel plants simply do not have the cash reserves to withstand even a two or three month shutdown.
So even if the biodiesel blenders' tax credit is retroactively enacted, several of Iowa's biodiesel plants are unlikely to reopen under the current local-ownership. In fact, if recent history from the ethanol industry is any indication, Big Oil companies may swoop in, buy the closed plants for pennies on the dollar and then reopen them as part of their multi-national, vertically-integrated business plan. While this would be better than having the doors of these plants closed for good, keeping these plants in the hands of Iowa investors provides the most benefits to the local communities.
During our meeting, there was discussion of using a tax extenders package or estate tax bill as a vehicle to extend the biodiesel tax credit this year. That type of decision is best left to you--we just know the extension needs to happen this year. We have also increasingly heard of the need for a
``jobs bill'' this year in response to U.S. unemployment surpassing ten percent. We urge you to consider the extension of the tax credit as part of any ``jobs bill'' that Congress may consider. After all, extending the tax credit--something most people believe will happen ``eventually''--is an easy way to maintain hundreds of jobs in Iowa and thousands around the country. Failure to extend the biodiesel tax credit will undoubtedly add to the jobless rolls.
We thank you for your support of the Iowa biodiesel industry, and we encourage you to do all you can to ensure that the biodiesel tax incentive is extended as soon as possible. We are not trying to be alarmist. Rather, we want you to have a clear picture of the prospects facing the Iowa biodiesel industry as the tax credit expiration comes closer each day. Please do not let the Iowa-owned biodiesel industry disappear on your watch.
Sincerely,
Monte Shaw,Executive Director.
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