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Farm groups tout GREEN Jobs Act to extend credit

By CELESTE BAUMGARTNER
Ohio Correspondent

WASHINGTON, D.C. — The National Corn Growers Assoc. (NCGA) and the American Farm Bureau Federation (AFBF) both applauded the GROW Renewable Energy from Ethanol Naturally (GREEN) Jobs Act of 2010 (S. 3231).

This legislation, introduced by Sens. Charles Grassley (R-Iowa) and Kent Conrad (D-N.D.), is a companion to H.R. 4940, the Renewable Fuels Investment Act introduced by Reps. Earl Pomeroy (D-N.D.) and John Shimkus (R-Ill.) in March.

This bill would extend the Volumetric Ethanol Excise Tax Credit and the Small Ethanol Producers Tax Credit for five years through 2015 – both provisions were set to expire at the end of 2010. In addition, the bill extends the Cellulosic Ethanol Production Tax Credit for three years through 2015, and the secondary tariff on ethanol that offsets the benefit received by imported ethanol.
“If we don’t do something this year we will see those expire and that could prove to be detrimental to the ethanol industry as well as corn growers.” said Jessica Johnson Bennett, director of public policy for NCGA. “For corn growers there could be potentially a decrease in corn prices of up to eight percent, which would have a large impact on our grower members.”

AFBF supports renewable fuels and tax credits are one of the primary ways that Congress has to encourage the production of renewable fuels, said Pat Wolff, AFBF tax specialist.

These bills would keep the tax incentives on the books for five more years, Wolff said. Typically Congress has added extenders year by year. Asking for a five year extension is outside of normal congressional behavior.

A long-term extension is important because companies – the people who produce and process renewable fuels – are unwilling to make the capital investments they need without the assurance that the tax credit will be available for multiple years, she said.

“At the end of 2009, the biodiesel tax incentives expired,” Wolff said. “Both the House and Senate passed a one-year extension of the biodiesel tax incentive, but it hasn’t cleared the conference and been signed into law yet. As a result biodiesel plants all across the country are starting to shut down.”

Congress hasn’t written a permanent tax law for quite a while; recent tax laws have been temporary provisions that are important for agriculture yet they keep expiring or are in danger of expiring. The tax incentives for all the renewable energies – diesel, biodiesel, cellulosic ethanol, wind energy – those also have expiration dates, Wolff said.

“They’re all temporary,” Wolff said. “Whether they expire at the end of this year or the next year they all have this challenge of trying to build a new industry with uncertainty in the tax code, and it just delays what everybody thinks we should be doing – creating a domestic energy source that is green and helps reduce our imports of oil. Congress needs to enact long-term provisions to speed along the development of renewable fuels.”

There is a lot of emphasis in Washington these days on job creation, Wolff said. These provisions are job provisions. With Congress so focused on the need to create jobs, this is a good way to do it.

“The Renewable Fuels Assoc. says that in 2009 ethanol helped support nearly 400 thousand jobs in all sectors of the economy,” Wolff said. “This all creates markets for agricultural products and helps boost the price, but farmers aren’t the only ones that benefit from the expansion of renewable fuels.”

5/5/2010