Treasury Secretary on Grassley Co-authored Biodiesel Tax Credit Reform: "Sounds Like a Good Plan"

Press Release

Sen. Chuck Grassley today received support from Treasury Secretary Steven Mnuchin for a Grassley co-authored reform of the biodiesel tax credit. The bipartisan bill, the American Renewable Fuel and Job Creation Act of 2017, extends this important clean-fuel incentive for three years and reforms the incentive by transferring the credit from the blenders to the producers of biofuels. The switch ensures that the tax credit incentivizes domestic production and taxpayers aren't subsidizing imported fuel.

In response to a question from Grassley at a Finance Committee hearing on the Fiscal Year 2018 budget, Mnuchin said, "Sounds like a good plan and we look forward to working with you on the details of that."

A transcript follows below.

Finance Committee Hearing Transcript Excerpt
Thursday, May 25, 2017

GRASSLEY: Secretary Mnuchin, mine is more of a rifle type questions that I have, not so general. I'd like to bring your attention to a proposal that I've introduced with Senator Cantwell that is very much aligned with the president's America First agenda, the America Renewable Fuel and Job Creation Act is what's called; would convert the current biodiesel blenders credit to a producers credit. The switch ensures that the tax credit incentivizes domestic production and taxpayers aren't subsidizing imported fuel like we're doing now.

With biofuel imports nearly doubling from 510 million gallons to almost one billion gallons in 2016, this change is critical to ensure the credit is supporting the domestic industry rather than subsidizing foreign imports that often already receive favorable treatment from their home country.

So, it's not really a question, but for you to understand that from Argentina we're getting all this biofuel and the taxpayers of the United States are subsidizing that import just like we're -- we're attempting to incentivize domestic production. And so, we want to change it so that we
don't subsidize that import and I'd like to hear if you kind of -- I'd like to hear you say you agree with me.

MNUCHIN: Sounds like a good plan and we look forward to working with you on the details of that.

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