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Pomeroy, Hulshof Introduce Legislation to Make Renewable Fuel Tax Credits Permanent

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Location: Washington, DC


Pomeroy, Hulshof Introduce Legislation to Make Renewable Fuel Tax Credits Permanent

Congressmen Earl Pomeroy (D-ND) and Kenny Hulshof (R-MO), introduced the Renewable Fuels and Energy Independence Promotion Act today as the first bill for both members in the new 110th Congress. This legislation will make permanent the biodiesel and ethanol tax incentive and the small agri-biodiesel producer and small ethanol producer credits, creating a permanent foundation for the industries as they continue to grow.

"We must reduce our dependence on foreign oil," stated Hulshof. "Domestically-produced renewable fuels play an integral role in promoting energy independence. If renewable fuels are to displace significant amounts of petroleum as fuel, we must take bold, aggressive steps to achieve this end. History has shown us that the tax incentive works and a long-term commitment to federal policy that supports renewable fuels will help provide stability, promote growth, and lessen our dependence on foreign oil."

"We must do everything we can to encourage the production of renewable fuels as our nation strives for energy independence. Making this tax credit for ethanol and biodiesel permanent is a critical component of that effort," Congressman Pomeroy said. "North Dakota has seen first-hand the positive impact these tax credits can have in growing the ethanol and biodiesel industries, and this bill ensures those same benefits will continue to be available."

"We commend Representatives Pomeroy and Hulshof for quick action to support the biodiesel industry that is so important to soybean growers," said American Soybean Association President Rick Ostlie, a soybean grower from Northwood, North Dakota. "This legislation will help support the price of our soybeans by creating long-term demand for biodiesel made from soybean oil. In turn, it will allow soybean growers to make America more energy secure through biodiesel production."

"If the U.S. is to finally break its addiction to foreign oil, it is critical that federal programs promoting domestic renewable fuels like ethanol and biodiesel be sustained," said RFA President Bob Dinneen. "History is littered with efforts to stimulate renewable energy development that fell victim to inconsistent federal and public support. This bill establishes the firm foundation that will allow the remarkable growth in ethanol and biodiesel that ensures future generations have a cleaner environment, a stronger economy, and a more stable energy future."

The National Biodiesel Board, which played a key role in getting the original incentive passed and extended, praised the Representatives. "Introducing this legislation is a positive message to policymakers, the biodiesel industry and all Americans that biodiesel has an important role to play in U.S. energy policy," said NBB Chief Executive Officer Joe Jobe. "A permanent tax incentive gives confidence for continued biodiesel industry growth. Biodiesel allows Americans to use less petroleum, boost the U.S. economy and improve air quality."

In addition to soybeans, biodiesel in North Dakota will be made from canola. The tax credits are aimed at making ethanol and biodiesel a greater alternative to traditional fuel and have played a significant role in stimulating the growth of both the ethanol and biodiesel industries in recent years. The ethanol tax credit provides a 51 cents per gallon general business income tax credit. Foreign produced ethanol has a tariff of 54 cents per gallon imposed on it therefore ensuring that foreign ethanol does not receive an unfair advantage over domestic production. This will make this tariff permanent. The biodiesel tax credit was modeled after the ethanol tax credit, and provides a 50 cents per gallon tax credit for biodiesel made from recycled oils and $1.00 per gallon credit for agri-biodiesel. Agri-biodiesel is derived from virgin oils such as corn, soybeans, sunflower, canola, and flaxseeds.

The small agri-biodiesel producer and small ethanol producer credits provide producers an income tax credit of 10 cents per gallon produced up to 15 million for facilities with an annual production capacity that does not exceed 60 million gallons.

The biodiesel tax credit is set to expire at the end of 2008 and the ethanol tax credit is set to expire at the end of 2010.

Congressman Earl Pomeroy is in his eighth term as the at-large representative for North Dakota; Congressman Kenny Hulshof is in his sixth term representing Missouri's Ninth District.

http://hulshof.house.gov/news.aspx?A=326

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