[Congressional Record Volume 141, Number 158 (Thursday, October 12, 1995)]
[Extensions of Remarks]
[Page E1937]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    EXTEND THE ETHANOL TAX INCENTIVE

                                 ______


                         HON. RICHARD J. DURBIN

                              of illinois

                    in the house of representatives

                       Thursday, October 12, 1995

  Mr. DURBIN. Mr. Speaker, today I am introducing legislation to extend 
the excise tax incentive for ethanol use to the year 2002.
  This legislation is necessary for two reasons. First, the Ways and 
Means Committee's recent attempt to kill this important program has 
created uncertainty about the ethanol tax incentive. The resulting 
investor hesitation could undermine the growth of this important 
renewable fuel program.
  Second, farmers are being asked to swallow billions of dollars of 
farm program spending cuts through the year 2002. The ethanol tax 
incentive provides an important alternative market for their products, 
but it is set to expire in the year 2000. Farmers should be given a 
commitment that the ethanol program will also last a full 7 years.
  Ethanol is important to the rural economy. A recent analysis by 
economists at the University of Illinois at Urbana-Champaign found 
that, because ethanol demand strengthens commodity prices, ethanol use 
adds more than $2.6 billion per year in market revenues to U.S. 
farmers. The General Accounting Office estimates that the value to the 
U.S. Treasury of ethanol use is as much as $6.3 billion over 5 years.
  Ethanol strengthens the economy, improves the environment, and 
decreases our dependence on foreign oil. Moreover, the ethanol tax 
incentive more than pays for itself. Ethanol production will provide 
taxpayers a net savings of almost $4 billion over the next 5 years, 
according to a recent study. The direct cost of the incentive will be 
more than offset by additional income tax revenues and reduced farm 
program costs. The Federal Government gains $1.30 for each gallon of 
ethanol sold in America--more than double the 54-cent-per-gallon cost 
of the incentive.
  Clearly, ethanol is not a favorite of many of the big oil companies. 
But just as clearly, ethanol use is good for America. Each gallon of 
ethanol production capacity not built due to uncertainty about 
ethanol's tax status represents a loss of revenue to the U.S. Treasury 
as well as to our Nation's farmers. If investors are scared away 
because of legislative attacks on ethanol, the taxpayer loses.
  That is why I am introducing legislation to reaffirm and extend our 
national commitment to domestic, agriculture-based, renewable fuel 
program. We need to give this important sector of our economy the 
stability that will allow it to keep expanding. We need a solid, 7-year 
commitment to help ensure that the demand for home-grown ethanol 
continues.
  I am pleased to announce that this is a bipartisan measure that 
includes Mr. Leach, Mr. Lightfoot, and Mr. Poshard as original 
cosponsors. I urge my colleagues to join me in cosponsoring this 
legislation to send a signal that Congress will keep its commitment to 
renewable alcohol fuels.

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