Biodiesel Tax Incentive Legislations (S. 355/H.R. 1279) Should be Passed!

04/07/2003

• On April 2, 2003, The Senate Finance Committee approved S. 355 which would provide a one-cent reduction in the diesel fuel excise tax for each percentage of biodiesel blended with petroleum diesel up to 20 percent. Similar legislation H.R. 1279 has been referred to the Committee on Ways and Means, and in addition to the Committee on Agriculture in the House.
• Please ask your Senators and Representative to support tax incentive for Biodiesel to increase America's energy security, offer cleaner air and help rural economy!

What is Biodiesel?
Natural, renewable resources such as vegetable oils and recycled restaurant greases can be chemically transformed into clean-burning biodiesel fuels. As its name implies, biodiesel is like diesel fuel except that it's organically produced. It's also safe for the environment, biodegradable, and produces significantly less air pollution than diesel fuel. It even smells better than diesel fuel - it smells like French fries, donuts, or barbecue. A 2002 Environmental Protection Agency (EPA) report of biodiesel emissions confirms substantial reduction of unburned hydrocarbons, carbon monoxide, and particulate matter compared to emissions from petroleum diesel. Because it is produced domestically, increased biodiesel use would also contribute to the economy and national energy security.

What would S.355/H.R. 1279 do?
The legislations would provide a one-cent reduction in the diesel fuel excise tax for each percentage of biodiesel blended with petroleum diesel up to 20 percent without reducing revenues to the Federal Highway Trust Fund.

Why is the tax incentive for Biodiesel helpful for rural economy?
The goal of the tax incentive is to increase consumption of biodiesel, a clean-burning fuel produced primarily from soybean oil, which will help support higher prices paid to farmers for their soybeans. The tax incentive will help diversify our ag-based economy and accelerate the research, development and investment necessary to spur production of green energy sources using raw farm commodities.

Related legislations

• EPACT Reform (S. 356, H.R. 316) -to remove the 50 percent limit on alternative fuel credits earned with biodiesel under the Energy Policy Act (EPACT) of 1992. This applies to federal, state and public utility fleets.
• CMAQ (H.R. 318) -to allow biodiesel use under the congestion mitigation and air quality (CMAQ) improvement program.
• Renewable Fuel Standard (S. 385) -to create a nationwide standard that would more than double the use of renewable fuels over the next 10 years. Biodiesel is an eligible fuel to meet the goal.

The National Grange's policy on biodiesel is summarized in our policy book:

• The National Grange supports making the necessary hardware to adapt vehicles to alternative fuels, such as ethanol and biodiesel, available to the public as the appropriate technology comes of age.
• The National Grange supports new requirements for all auto manufacturers that receive federal funding to develop vehicles under the Partnership for a New Generation of Vehicles Program to be compatible with biodiesel derived from domestically produced agricultural feed stocks, such as soybean oil and corn oil.
• The National Grange supports legislation to enact tax incentives to manufacturers of blended fuels to expand and develop more refineries for the use of farm commodities.

Action Plan --- Please contact your Senators and House Representative to urge them to cosponsor S. 355 and H.R. 1279. If you want to find your Senators and House Representative contact information, please click the following.

Senators
House Representative

Also, please contact the leaders in the Committee on Ways and Means and the Committee on Agriculture in the House and express your support for S. 355 and H.R. 1279.

If you have any questions or comments please contact Legislative Research Analyst Chil-Sook Hwang by fax: 202-347-1091 or by phone: 1-888-4GRANGE, ext 109. Thank you for your grassroots participation in the National Grange Legislative program.

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