[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.
                                 <all>