I 111th CONGRESS 1st Session H. R. 3187 IN THE HOUSE OF REPRESENTATIVES July 13, 2009 Mr. Crowley (for himself, Mrs. Bono Mack, Mr. Moran of Virginia, Mr. Thompson of California, Mr. Shadegg, Mrs. Myrick, Mr. Goodlatte, Mr. Stark, Mr. Radanovich, Mr. Matheson, Mr. Maffei, and Mr. Meeks of New York) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To reduce and eliminate the tax credit for alcohol fuel mixtures and the tariff on imported ethanol.

1.

Short title

This Act may be cited as the Affordable Food and Fuel for America Act.

2.

Findings

Congress finds the following: (1)The Volumetric Excise Tax Credit was created to encourage gasoline refiners to blend domestically produced corn ethanol into the Nation’s gasoline supplies. (2)The 54-cent temporary tariff on imported ethanol was created to encourage the development of a domestic grain ethanol industry. (3)Domestic corn ethanol production has increased five-fold since 2000 to more than 9,000,000,000 gallons of corn ethanol produced at more than 150 facilities. (4)Domestic corn ethanol production will soon exceed 12,000,000,000 gallons, diverting at least one-third of the Nation’s corn supply from food and feed to fuel. (5)Federal ethanol mandates require gasoline refiners to blend 15,000,000,000 gallons of ethanol into gasoline supplies by 2015. (6)The United States is now the world’s largest producer of ethanol and our domestic corn ethanol industry is no longer in need of tax subsidies or tariffs. (7)In combination, the rapid growth of the corn ethanol industry and Federal ethanol mandates has made the tax credit for corn ethanol and tariff obsolete. (8)Scarce Federal resources should be dedicated to the development of new and emerging sources of renewable energy, including biomass fuels that meet environmental goals.

3.

Reduction of income tax credit for alcohol used as a fuel

(a)

In general

The table in section 40(h)(2) of the Internal Revenue Code of 1986 is amended by striking the last row and inserting the following new rows: 200928 cents22 cents 201021 cents16 cents 201116 cents12 cents 201211 cents9 cents 20137 cents6 cents 201400. (b)

Conforming Amendments

(1)

Extension of credit

Section 40(e)(1) of such Code is amended— (A)by striking 2010 in subparagraph (A) and inserting 2013,, and (B)by striking 2011 in subparagraph (B) and inserting 2014. (2)

Repeal of delayed reduction

Section 40(h) of such Code is amended by striking paragraph (3). (c)

Effective date

The amendments made by this section shall apply to alcohol produced, and sold or used, in taxable years beginning after the date of the enactment of this Act.

4.

Reduction of excise tax credit for alcohol fuel mixtures

(a)

In general

Section 6426(b)(2)(A) of the Internal Revenue Code of 1986 is amended by striking and at the end of clause (i), by striking clause (ii), and by inserting after clause (i) the following new clauses: (ii)in the case of calendar year 2009, 28 cents, (iii)in the case of calendar year 2010, 21 cents, (iv)in the case of calendar year 2011, 16 cents, (v)in the case of calendar year 2012, 11 cents, (vi)in the case of calendar year 2013, 7 cents, and (vii)in the case of calendar year 2014 and thereafter, zero cents. . (b)

Conforming amendments

(1)Section 6426(b) of such Code is amended— (A)by striking subparagraph (C) of paragraph (2), and (B)by striking paragraph (6). (2)Section 6427(e)(5)(A) of such Code is amended by striking 2010 and inserting 2013. (c)

Effective date

The amendments made by this section shall apply to fuel sold or used after the date of the enactment of this Act.

5.

Reduction and elimination of tariffs on ethanol

(a)

Reduction of temporary tariff duty on imported ethanol

(1)

Calendar year 2009

(A)

In general

Heading 9901.00.50 of Subchapter 1 of Chapter 99 of the Harmonized Tariff Schedule of the United States is amended by striking 14.27¢ each place it appears and inserting 8¢. (B)

Applicability

The amendment made by subparagraph (A) shall apply to goods entered, or withdrawn from warehouse for consumption, on or after January 1, 2009, and before January 1, 2010. (C)

Retroactive application

Notwithstanding section 514 of the Tariff Act of 1930 (19 U.S.C. 1514) or any other provision of law, upon proper request filed with the Bureau of Customs and Border Protection before the 90th day after the date of the enactment of this Act, any entry, or withdrawal from warehouse for consumption, of any good— (i)that was made on or after January 1, 2009 and before the date of the enactment of this Act; and (ii)with respect to which there would have been a lower rate of duty if the amendment made by this subsection applied to such entry, or withdrawal, shall be liquidated or reliquidated as if such amendment applied to such entry or withdrawal. (2)

Calendar year 2010

(A)

In general

Such heading is amended by striking 14.8¢ each place it appears and inserting 6¢. (B)

Applicability

The amendment made by subparagraph (A) shall apply to goods entered, or withdrawn from warehouse for consumption, on or after January 1, 2010, and before January 1, 2011. (3)

Calendar year 2011

(A)

In general

Such heading is amended by striking 11.1¢ each place it appears and inserting 4¢. (B)

Applicability

The amendment made by subparagraph (A) shall apply to goods entered, or withdrawn from warehouse for consumption, on or after January 1, 2011, and before January 1, 2012. (4)

Calendar year 2012

(A)

In general

Such heading is amended by striking 8.5¢ each place it appears and inserting 3¢. (B)

Applicability

The amendment made by subparagraph (A) shall apply to goods entered, or withdrawn from warehouse for consumption, on or after January 1, 2012, and before January 1, 2013. (5)

Calendar year 2013

(A)

In general

Such heading is amended by striking 5.8¢ each place it appears and inserting 2¢. (B)

Applicability

The amendment made by subparagraph (A) shall apply to goods entered, or withdrawn from warehouse for consumption, on or after January 1, 2013, and before January 1, 2014. (b)

Duty-free treatment beginning in 2014

(1)

Addition of alternative fuels subchapter

Chapter 98 of the Harmonized Tariff Schedule is amended by adding at the end the following new subchapter: Subchapter XXIIIAlternative Fuels Heading/SubheadingArticle Description Rates of Duty 1 2 GeneralSpecial 9823.01.01Ethyl alcohol (provided for in subheadings 2207.10.60 and 2207.20) or any mixture containing such ethyl alcohol (provided for in heading 2710 or 3824) if such ethyl alcohol or mixture is to be used as a fuel or in producing a mixture of gasoline and alcohol, a mixture of a special fuel and alcohol, or any other mixture to be used as fuel (including motor fuel provided for in subheading 2710.11.15, 2710.19.15 or 2710.19.21), or is suitable for any such usesFreeFree20% . (2)

Conforming amendments

Subchapter I of chapter 99 of the Harmonized Tariff Schedule is amended— (A)by striking heading 9901.00.50; and (B)by striking U.S. notes 2 and 3. (3)

Effective date

The amendments made by this subsection shall apply with respect to goods entered, or withdrawn from warehouse for consumption, on or after January 1, 2014.

6.

Sense of Congress

(a)

Findings

Congress finds that— (1)the organization Feeding America formerly known as America’s Second Harvest, issued the results of a national study on hunger and poverty in America and found that for 1 in 8 Americans hunger is a reality, that the numbers of hungry Americans is on the rise, and 37.3 million people lived in poverty, including over 7.6 million families, 3.6 million seniors, and over 13.3 million children under the age of 18; (2)the Department of Agriculture, Economic Research Service, found that an estimated 35.5 million Americans are food insecure, meaning their access to enough food is limited by a lack of money and other resources; (3)the Center for Budget and Policy Priorities reports that the current downturn is likely to cause significant increases both in the number of Americans who are poor and the number living in deep poverty, with incomes below half of the poverty line. Because this recession is likely to be deep and the government safety net for very poor families who lack jobs has weakened significantly in recent years, increases in deep poverty in this recession are likely to be severe; (4)World Hunger Year (WHY), a non-profit organization which operates a national hunger hotline with funding from the Department of Agriculture, has experienced a significant increase in calls for food assistance or information about where to find food, shelter, child-care, or job-finding assistance; and (5)the production of cellulosic and advanced biofuels in the United States will assist the Nation in becoming less vulnerable to foreign supplies of oil, will create a significant number of jobs, and could achieve significant reductions in the generation of greenhouse gas emissions as determined by several recent studies. (b)

Sense of Congress

It is the sense of Congress that the savings achieved under this Act should be used to combat hunger in the United States and to develop domestic supplies of cellulosic and advanced biofuels by being used to— (1)increase the assistance provided for Federal nutrition programs administered by the Secretary of Agriculture, including school nutrition programs; (2)provide assistance to non-profit organizations dedicated to responding to the needs of low-income families in the United States; and (3)provide loan guarantees or grants to companies ready to construct cellulosic and advanced biofuel processing facilities in the United States.