[Congressional Record Volume 147, Number 68 (Thursday, May 17, 2001)]
[Senate]
[Page S5121]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mrs. CARNAHAN:
  S. 907. A bill to amend the Internal Revenue Code of 1986 to 
encourage the use of ethanol and the adoption of other forms of value-
added agriculture, and for other purposes; to the Committee on Finance.
  Mrs. CARNAHAN. Mr. President, things are happening fast in the value-
added agriculture industry, and I'm pleased that Missouri is leading 
the way in establishing innovative, value-added enterprises that will 
help our farm economy prosper.
  By encouraging new economic opportunities that add value to crops, we 
can help improve the economic stability of our family farms.
  While value-added agriculture can take many forms, a prime example is 
ethanol production. Increased ethanol production is not only exciting 
because it can be farmer-owned and farmer-driven, but because it will 
create a cleaner-burning fuel that stands to improve air quality.
  Ethanol production has become increasingly important as cities across 
the nation strive to fight smog and meet federal clean air standards. 
Hundreds of Missouri gas stations in the St. Louis area have begun 
dispensing reformulated gasoline, a move that will help boost demand 
for ethanol. With ethanol we also have greater energy security because 
we are replacing oil imports with domestic sources of renewable energy.
  Additional ethanol production will help provide a consistent demand 
for corn, which should help to improve corn prices and put more money 
in growers' pockets. Now more than five percent of our domestic corn 
production, or 550 million bushels of corn, is used every year to 
produce ethanol. That's especially important in times such as these 
when our farmers are facing critically low commodity prices.
  Today, I am introducing the Investment in Value-Added Agriculture 
that will build on the success of programs enacted during the Carnahan 
administration to encourage ethanol use and other forms of value-added 
agriculture. My legislation updates existing federal law affecting 
ethanol and uses Missouri law as a model for federal legislation to 
encourage investments in ethanol and other value-added agribusiness.
  My proposal consists of three components.
  First, it would extend the ethanol motor fuel excise tax. Currently, 
this exemption is due to expire in 2007. My legislation would extend 
the exemption through 2015.
  Second, the legislation would expand eligibility of the federal 
producer tax credit to farmer-owned cooperatives. It would also 
increase the production capacity limit to allow plants producing up to 
60 million gallons of ethanol receive the credit.
  Third, the legislation would encourage private investment in new-
generation cooperatives by creating a 50 percent tax credit on 
investments in these enterprises. New-generation cooperatives are 
producer owned entities designed to add a step to the production 
process that adds value to crops.
  With this legislation I want to continue to help farmers in Missouri 
and to also help farmers throughout the United States by bringing 
proven Missouri programs to the federal level. During my husband's 
gubernatorial administration, Missouri made great strides to encourage 
ethanol production and value-added agriculture.
  To encourage ethanol production in the state, Governor Carnahan 
provided the initial funding for the Missouri Qualified Fuel Ethanol 
Producer Incentive Fund. Under the incentive fund, Missouri ethanol 
producers are eligible for a maximum annual grant of $3.125 million for 
5 years.
  Two farmer-owned ethanol plants are now operating in Missouri. Both 
plants utilized funds from this incentive fund.
  In 1997, Missouri established a value-added grant and loan programs 
to help farmers process and add value to their raw commodities and earn 
more profit on their products. As of last year this program awarded 
more than $1.6 million in grants.
  In addition, the Value-Added Loan Guarantee Program has issued loan 
guarantees for more than $1.7 million. This program offers commercial 
lenders added security on agricultural development loans for projects 
that add value to Missouri farm products.
  One of Governor Carnahan's top priorities was the creation of an 
Agriculture Innovation Center. This Center, run out of the Missouri 
Department of Agriculture, serves as a one-stop shop for Missouri 
producers seeking help to implement creative ideas for raising, 
processing and marketing agricultural products.
  It is my sincere hope that this legislation will help encourage 
adoption and investment in value-added agriculture. Value-added 
agriculture holds the promise of invigorating the rural landscape and 
keeping jobs and income in local communities.
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