[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 3080 Introduced in Senate (IS)]
110th CONGRESS
2d Session
S. 3080
To ensure parity between the temporary duty imposed on ethanol and tax
credits provided on ethanol.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 4, 2008
Mrs. Feinstein (for herself, Mr. Gregg, Ms. Cantwell, Mr. Allard, and
Ms. Collins) introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To ensure parity between the temporary duty imposed on ethanol and tax
credits provided on ethanol.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Imported Ethanol Parity Act''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) On May 6, 2006, the Chairman of the Finance Committee
of the Senate stated on the Senate floor that, ``the United
States tariff on ethanol operates as an offset to an excise tax
credit that applies to both domestically produced and imported
ethanol.''.
(2) On May 9, 2006, the Renewable Fuels Association stated:
``the secondary tariff exists as an offset to the tax incentive
gasoline refiners receive for every gallon of ethanol they
blend, regardless of the ethanol's origin.''. In May 2008, the
Renewable Fuels Association's Executive Director asserted that
``The tariff is there not so much to protect the industry but
the United States taxpayer.''.
(3) In a letter to Congress dated June 20, 2007, the
American Coalition for Ethanol, the American Farm Bureau
Federation, the National Corn Growers Association, the National
Council of Farmer Cooperatives, the National Sorghum Producers,
and the Renewable Fuels Association stated that the ``(blender)
tax credit is available to refiners regardless of whether the
ethanol blended is imported or domestic. To prevent United
States taxpayers from subsidizing foreign ethanol companies,
Congress passed an offset to the tax credit that foreign
companies pay in the form of a tariff.''.
(4) The Food, Conservation, and Energy Act of 2008, as
contained in the Conference Report to accompany H.R. 2419 in
the 110th Congress, proposes to decrease the excise tax credit
for blending ethanol from $0.51 to $0.45 per gallon, but extend
the $0.54 per gallon temporary duty on imported ethanol,
increasing the competitive disadvantage of ethanol imports in
the United States marketplace. The legislation would transform
a tariff designed to offset a domestic subsidy into a real
import barrier of at least $0.09 per gallon.
(5) The State of California is adopting a Low Carbon Fuels
Standard that requires a reduction in the lifecycle greenhouse
gas emissions from transportation fuels, and the Energy
Independence and Security Act of 2007 requires the United
States to use increasing quantities of ``advanced biofuels''
that have lifecycle greenhouse gas emissions that are at least
50 percent less than lifecycle greenhouse gas emissions from
gasoline.
(6) The lifecycle greenhouse gas emissions of ethanol vary
depending on production methods and feedstocks. These
differences will impact the degree to which ethanol may be used
to meet ``low-carbon'' fuel requirements under California law
and the Energy Independence and Security Act of 2007.
(7) Sugar cane ethanol plants use biomass from sugar stalks
as process energy, resulting in less fossil fuel input compared
to current corn-to-ethanol processes.
(8) The 2007 California Energy Commission Report, entitled
``Full Fuel Cycle Assessment: Well-to-Wheels Energy Inputs,
Emissions, and Water Impacts'', concluded that the direct
lifecycle greenhouse gas emissions of imported sugar based
ethanol are 68 percent lower than gasoline, while the direct
lifecycle greenhouse gas emissions of corn based ethanol from
the Midwest are 15 to 28 percent lower than gasoline.
(9) The cost to ship ethanol by sea from foreign production
areas to California is competitive with the cost to ship
ethanol by rail from the American Midwest, according to ethanol
producers and importers.
(10) Ethanol production will vary from region to region
each year based on crop performance, and a global biofuels
marketplace would permit mutually beneficial trade between
producing regions capable of stabilizing both fuel and food
prices.
(11) In March 2007, the United States and Brazil entered
into a strategic alliance to cooperate on advanced research for
biofuels, develop biofuel technology, and expand the production
and use of biofuels throughout the Western Hemisphere,
especially in the Caribbean and Central America.
(12) On March 9, 2007, President Bush stated ``it's in the
interest of the United States that there be a prosperous
neighborhood. And one way to help spread prosperity in Central
America is for them to become energy producers.''.
(13) According to a February 2008 study by the
Massachusetts Institute of Technology, titled ``Biomass to
Ethanol: Potential Production and Environmental Impacts'', the
current ethanol distribution system in the United States is not
capable of efficiently supplying ethanol to the East Coast
markets.
SEC. 3. ETHANOL TAX PARITY.
Not later than 30 days after the date of the enactment of this Act,
and semiannually thereafter, the President shall reduce the temporary
duty imposed on ethanol under subheading 9901.00.50 of the Harmonized
Tariff Schedule of the United States by an amount equal to the
reduction in any Federal income or excise tax credit under section
40(h), 6426(b), or 6427(e)(1) of the Internal Revenue Code of 1986 and
take any other action necessary to ensure that the temporary duty
imposed on ethanol under such subheading 9901.00.50 is equal to, or
lower than, any Federal income or excise tax credit applicable to
ethanol under the Internal Revenue Code of 1986.
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