[Congressional Record Volume 162, Number 113 (Wednesday, July 13, 2016)]
[Senate]
[Page S5085]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRASSLEY (for himself, Ms. Cantwell, Mr. Roberts, Ms. 
        Heitkamp, Mr. Thune, Mr. Whitehouse, Mr. Kirk, Mr. Heinrich, 
        Mrs. Ernst, Mr. Donnelly, Mr. Blunt, Ms. Hirono, Mr. Franken, 
        Mrs. Murray, and Ms. Klobuchar):
  S. 3188. A bill to amend the Internal Revenue Code of 1986 to modify 
the incentives for biodiesel; to the Committee on Finance.
  Mr. GRASSLEY. Mr. President, I have long been a champion of domestic 
biofuel production, including ethanol, biodiesel and cellulosic fuels. 
Domestic biodiesel production supports tens of thousands of jobs. 
Replacing traditional diesel with biodiesel reduces emissions and 
creates cleaner air. Homegrown biodiesel improves our energy security 
by diversifying our transportation fuels and reducing our dependence on 
foreign oil. Biodiesel itself is a very diverse fuel. It can be 
produced from a wide array of resources such as recycled cooking oil, 
soybean and other plant oils, and animal fats.
  I am proud of the success of the American biodiesel industry, and I 
am glad to be introducing today the Biodiesel Tax Incentive Reform and 
Extension Act of 2016, which will ensure the continued success. I 
appreciate Senator Cantwell's leadership in joining this effort. I also 
appreciate the support of Senators Roberts, Heitkamp, Thune, 
Whitehouse, Kirk, Heinrich, Ernst, Donnelly, Blunt, Hirono, Franken and 
Murray. This bill will modify the biodiesel fuel blenders credit to a 
domestic production credit, and extend the credit through 2019.
  Congress created the biodiesel tax incentive in 2005 when I was 
Chairman of the Senate Finance Committee. As a result of this 
incentive, and the Renewable Fuel Standard, biodiesel is providing 
significant benefits to the nation.
  Senator Cantwell and I have been advocating since 2009 to modify the 
current incentive. We have proposed making the credit available for the 
domestic production of biodiesel, rather than a mixture credit 
available to the blender of the fuel.
  The bill we are introducing today is similar to an amendment that I 
offered with Senator Cantwell during consideration of the tax extenders 
package in the Senate Finance Committee in July of last year. Our 
biodiesel reform amendment passed unanimously by voice vote.
  Converting to a producer credit improves the incentive in many ways. 
The blenders credit can be difficult to administer, because the 
blending of the fuel can occur at many different stages of the fuel 
distribution. This can make it difficult to ensure that only fuel that 
qualifies for the credit claims the incentive. It has been susceptible 
to abuse because of this.
  A credit for domestic production will also ensure that we are 
incentivizing the domestic industry, rather than subsidizing imported 
biofuels. It is projected that imports from Argentina, Indonesia, 
Singapore, the European Union, South Korea and others could exceed 1.8 
billion gallons over 2016 and 2017.
  We should not provide a U.S. taxpayer benefit to imported biofuels. 
By restricting the credit to domestic production, we'll also save 
taxpayer money. The amendment adopted in the Finance Committee was 
estimated by the Joint Committee on Taxation to reduce the cost of the 
extension by $90 million.
  Importantly, modifying the credit will have little to no impact on 
the consumer. Much of the credit will continue to be passed on to the 
blender and ultimately, the consumer. Additionally, the U.S. biodiesel 
industry is currently operating at approximately 55 percent of 
capacity. The domestic biodiesel industry has the capacity and access 
to affordable feedstocks to meet the demand of U.S. consumers.
  The current biodiesel credit expires at the end of this year. It is 
my hope that when the Senate considers legislation to extend expiring 
tax provisions, that the Biodiesel Tax Incentive Reform and Extension 
Act of 2016, will be included. I strongly encourage the leadership of 
the House and Senate to include these biodiesel reform policies that 
were adopted in the Senate Finance Committee unanimously last year.
  This modification will ensure that the credit is doing what Congress 
intended--incentivizing investment in domestic biodiesel production. 
Surely we can agree that we should not be providing a U.S. taxpayer 
subsidy to already heavily subsidized foreign biodiesel imports.
  I therefore urge my colleagues to support the production of American 
biodiesel and this common-sense, cost reduction reform.
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