Thune, Johnson Introduce Tax Credit for Ethanol Producers

Thune, Johnson Introduce Tax Credit for Ethanol Producers

March 11th, 2005 - Washington, D.C. - U.S. Senators John Thune (R-SD) and Tim Johnson (D-SD) have introduced legislation today to encourage ethanol production. The bill would change the definition of a small ethanol production facility by raising the cap on annual production from 30 million gallons per year to 60 million gallons per year. Six of South Dakota's ten ethanol facilities would stand to benefit by increasing the cap to the tax credit from 30 million gallons to 60 million gallons. Senators Jim Talent (R-MO) and Blanche Lincoln (D-AR) also join in introduction.

"One of every three rows of corn planted in South Dakota is dedicated to ethanol production. Renewable fuels need to be part of our national energy policy." said Senator Johnson. "We continue to send money abroad for oil and gasoline, while we could be supporting local farmers and refiners of ethanol and biodiesel. Encouraging investment in alternative forms of clean-burning energy, like ethanol and biodiesel, is good for the environment, good for national security and energy independence, and good for job creation and rural America."

"With South Dakotans paying record prices for gasoline, promoting ethanol is more important than ever. This legislation will encourage ethanol production and help grow our economy," Senator Thune said. "Ethanol reduces our dependence on foreign sources of oil and is an important weapon in the War on Terror. By investing in South Dakota's ethanol producers, we will strengthen our energy security and create new jobs."

The Small Ethanol Producer Tax Credit is targeted toward small ethanol production facilities; the size of ethanol plants that are most likely to be producer owned and operated. The legislation would provide for a ten-cent-per-gallon tax credit on the first 15 million gallons of ethanol produced annually. The credit is capped at $1.5 million annually. The following is a list of South Dakota plants that would be able to take advantage of the increased production cap:

http://thune.senate.gov/index.cfm?FuseAction=PressReleases.Detail&PressRelease_id=48&Month=3&Year=2005