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Ethanol tax credit still has a chance in Congress
Iowa Secretary of Agriculture Bill Northey and Growth Energy CEO Tom Buis told reporters and members of the ethanol industry Wednesday that they believe Congress is likely to renew the ethanol tax credit before it expires at the end of this year.
Speaking at the Farm Progress show near Boone, Iowa, Buis said he thinks it will be difficult for Congress to ignore other high profile tax issues, including the 2001 Bush Administration tax cuts and an extension of exemptions from the Alternative Minimum Tax for the middle class, which affects some 20 million people.
Buis told Agriculture.com that the House Ways and Means Committee already has tax legislation prepared that would extend the ethanol tax cut, known as the Volumetric Ethanol Excise Tax Credit, or VEETC. But it cuts 20% off the current 45 cent-a-gallon credit, which goes to blenders of ethanol and gasoline.
"We've been worried about the VEETC when we started following what happened to the biodiesel industry this winter," said Buis, whose ethanol trade group includes 65 ethanol plants.
Biodiesel's $1-a-gallon tax credit expired last year and each time it came up for a vote after the start of 2010, it got less support in the Senate, Buis said.
Several Iowa biodiesel plants are insolvent or bankrupt as a result.
"I think it's a travesty what's happened in the biodiesel industry," Ag Secretary Northey said.
Buis said that ethanol's import tariff, which also expires at the end of 2010, is likely to be renewed.
"I see no appetite in Congress from anyone for getting rid of the tariff," Buis said. "Replacing foreign oil with foreign ethanol does not make this country any more secure."