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1outlaw

VEETC

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I do not know if this will fly- but it is running up the flagpole;

 

http://www.biofuelsbusiness.com/news/enews_stories.asp?ArticleID=111209

 

U.S. senators reach agreement to end VEETC, tariff

 

(Biofuelsbusiness.com, July 07, 2011)

by Biofuels Business Staff   

 

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WASHINGTON, D.C., U.S. — Three U.S. senators announced on July 7 that they have reached an agreement to repeal the Volumetric Ethanol Excise Tax Credit (VEETC) and ethanol import tariff by the end of July.

 

U.S. Sen. Dianne Feinstein announced the agreement with Sens. Amy Klobuchar and John Thune. The senators said the agreement will reduce the federal deficit by $1.33 billion, while investing $668 million in new technologies to reduce U.S. dependence on oil.

 

Along with the repeals, the agreement extends the cellulosic biofuel production tax credit for three years, extends the alternative fueling infrastructure tax credit for three years and extends the small producer tax credit for one year at a reduced rate.

 

While the agreement isn’t the perfect compromise, said Renewable Fuels Association President and Chief Executive Officer (CEO) Bob Dinneen, it demonstrates the willingness of American ethanol producers and advocates to do their part to address budget concerns.

 

"Walking away from investments made in America’s ethanol industry cold turkey would jeopardize the future of biofuel production in America, including stifling the progress of advanced and cellulosic ethanol technologies," Dinneen said. "A particularly important part of this agreement is the commitment to continue the evolution of the industry to new technologies and new feedstocks for cellulosic ethanol. We are pleased the agreement recognizes the importance of cellulosic ethanol by committing $305 million to this effort. However, we are concerned that capping cellulosic ethanol development sends the wrong signal and we will continue to work with the Congress and the Obama Administration to address this anomaly in as this process continues."

 

Under the agreement, outlined in a letter to Majority Leader Harry Reid and Minority Leader Mitch McConnell:

 

• The 45¢-per-gallon VEETC will be repealed on July 31.

 

• The 54¢-per-gallon tariff on ethanol imports will also expire on July 31.

 

• The $1.01-per-gallon tax credit for cellulosic biofuels production, which was to expire at the end of 2012, will be extended for three years to the end of 2015. It will be capped at 50 million gallons in 2013, 100 million gallons in 2014 and 155 million gallons in 2015. Unused gallons will roll to the next year, and it includes a depreciation allowance for cellulosic plants and expands the definition of cellulosic biofuels to include fuels from algae.

 

• The alternative fueling infrastructure tax credit, which was to expire at the end of this year, will be extended three years to the end of 2014. The investment tax credit will be reduced from 305 to 20%, effective Jan. 1, 2012. It covers technology neutral investments in electricity charging stations, blender pumps or natural gas fueling stations. The Joint Committee on Taxation estimates that half of qualifying investments will be in non-ethanol infrastructure.

 

• The Small Producer Tax Credit, which was to expire at the end of this year, will be extended one year to the end of 2012. The per gallon credit will be reduced from 10¢ to 7¢.

 

Leaders of the RFA and the ethanol industry also praised the work of the senators.

 

Chuck Woodside, CEO of farmer-owned KAAPA Ethanol in Minden, Nebraska, U.S., and chairman of the RFA said, "Answering America’s most challenging questions will take this kind of bipartisan, roll up your shirt sleeves approach that is too often lacking in Washington. While it is clear this agreement does not encompass everything proposed by Sens. Klobuchar and Thune in their bill (the Ethanol Tax Reform and Deficit Reduction Act), their tireless effort to find a path forward is a testament to their commitment to American ethanol production and is greatly appreciated by advocates of renewable fuels. America’s ethanol industry is ready to move beyond the Kabuki dance of Beltway politicking and get on with the business of growing and diversifying the industry through new technologies and greater market access."

 

Mike Jerke, general manager of farmer-owned Chippewa Valley Ethanol Company in Benson, Minnesota, U.S., and chairman of the Renewable Fuels Foundation said, "Sen. Klobuchar’s commitment to continuing the growth and evolution of American ethanol production is unparalleled. Together, Sens. Klobuchar and Thune are showing the kind of leadership needed to end American addiction to imported oil. Minnesota’s ethanol producers look forward to continuing our work with strong and forward-looking leaders like Sens. Klobuchar and Thune to realizing the full potential of domestic ethanol production and use from all sources."

 

 

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Pretty much as expected considering the all the discussions the past few months..

 

 

Slows e10 rapid growth IMO (should relieve pressure on corn prices)

 

 

3 years on blender infrastructure credits should mean faster development (so as to take advantage of those credits before they are eliminated as well)

 

 

the credit caps on cellulose ..umm man that's one that doesn't sit right but if this passes ..hopefully able to revisits that in a  year or two in a stronger economy

 

 

Phil  off hand do you know if they are going to present this as a stand alone bill or try and attach it to  a larger bill?

 

 

 

 

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I do not know :-\

 

 

According to the NYT it has to come from the House..

 

 

In a letter sent today to their leaders, Feinstein, Thune and Klobuchar called for action on their plan this month in order to wring maximum savings out of the ethanol overhaul.

 

"If Congress fails to enact this proposal before it adjourns for August recess, the substantial levels of deficit reduction and investment achieved by this compromise will no longer be possible, and we cannot commit our support after that point," the trio wrote. "Therefore, we ask for your assistance in moving this agreement through Congress before we adjourn."

 

But without a House-side buy-in to the deal, its prospects of becoming law -- either as part of a larger measure to raise the $14.3 trillion debt ceiling or as a stand-alone bill -- are slim. Tax legislation must originate in the House by statute, and spokesmen for Majority Leader Eric Cantor (R-Va.) as well as the Ways and Means Committee did not respond to requests for comment on the Senate pact in time for publication.

 

Ahead of today's White House sit-down, Cantor signaled an openness to ending specific tax subsidies in a debt-cutting package so long as offsetting tax cuts were added elsewhere. That stance is unlikely to fly with Democrats who view new revenue as an essential component of any final deal, and even some Republicans have left the door open to backing ethanol subsidy reform on its merits.

 

"I don't know" if ethanol benefits are in the mix for a debt deal, Senate Minority Whip Jon Kyl (R-Ariz.) told reporters yesterday. "But I've always said with regard to ethanol, that's a matter of bad tax policy that I'm willing to do away with no matter what the tax implications of it are."

 

Klobuchar said today that she saw the ethanol accord as a template for a similar tax-benefit compromise with oil and gas companies.

 

"This is rather unprecedented in the middle of the year," she told reporters. "If oil would do the same, then we would have a lot of money on the debt."

 

 

Really like Klobuchar she should be leading the National Debt Negotiations..pretty much common sense approach on everything she takes on

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Mike Jerke, general manager of farmer-owned Chippewa Valley Ethanol Company in Benson, Minnesota, U.S., and chairman of the Renewable Fuels Foundation said, "Sen. Klobuchar’s commitment to continuing the growth and evolution of American ethanol production is unparalleled.

I still remember showing him a picture of 1outlaw's blender pump when he was down at Galva Iowa. We were on a bus trip to lobby at the capital in Des Moines back in 2007 or 8. When he saw the picture, he said " that's a great idea" and a board member from the ethanol plant I'm in could only tell him "but it's illegal, but it's illegal". Thank goodness some people could see the light.

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A Little more from Senator Klobachars website

 

 

"“ACE thanks both Senators John Thune and Amy Klobuchar for their support and leadership in negotiating this compromise, which represents the art of the possible given the fiscal mood in Congress,”said Brian Jennings, Executive Vice President of the American Coalition for Ethanol. “We are pleased with the three-year blender pump tax credit and will work with marketers to try and take full advantage of these increased incentives to convert to blender pumps. ACE is also grateful that the Small Ethanol Producer Tax Credit, which is crucial for many of our independent and farmer-owned members, was extended for one year as well as key cellulosic biofuel provisions. ACE will work with Senators Thune and Klobuchar to support enactment of this legislation by the end of July.”

 

 

 

 

 

Additional details of the compromise agreed to by Thune, Klobuchar, and Feinstein include:

 

Deficit Reduction

 

Immediately allocate $1.3 billion toward deficit reduction.

 

Blender Pump and Alternative Fueling Infrastructure Tax Credit

 

Extends the existing alternative fuel station tax credit to include blender pumps and extend the credit through 2014 by using 2011 funding only; modify the tax credit to allow for ethanol blends between E15 and E85; and clarify that entire cost of dual-use blender pumps qualify for the credit rather than the incremental cost.

 

A taxpayer may take a 20 percent tax credit for the installation of alternative fuel infrastructure, up to $30,000, including E85 (85 percent ethanol and 15 percent gasoline) infrastructure. This credit is currently scheduled to expire on December 31, 2011. Other fuels that are eligible for the credit include electric charging stations and natural gas refueling stations.

 

Small Producer Ethanol Credit

 

Extend through 2012 the small producer ethanol credit by using 2011 funding only. This credit is currently scheduled to expire December 31, 2011. The small ethanol producer credit is valued at 7 cents per gallon of ethanol produced. The credit may be claimed on the first 15 million gallons of ethanol produced by a small producer in a given year. It applies to any ethanol producer with production capacity below 60 million gallons per year.

 

Credit for Production of Cellulosic Biofuels and Special Depreciation Allowance for Cellulosic Biofuels Plants

 

Modify and extend through 2015 the existing $1.01 per gallon tax credit for cellulosic biofuels that would otherwise expire on December 31, 2012. This is done by using 2011 funding only.

 

Includes a depreciation allowance for cellulosic plants, and the definition of cellulosic biofuels will include fuels made from algae.

 

 

 

 

 

 

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