[Congressional Record Volume 163, Number 71 (Wednesday, April 26, 2017)]
[Senate]
[Pages S2554-S2555]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRASSLEY (for himself, Ms. Cantwell, Mr. Roberts, Ms. 
        Hirono, Mr. Blunt, Mr. Whitehouse, Mrs. Ernst, Ms. Heitkamp, 
        Mr. Thune, Mr. Udall, Mr. Heinrich, Mrs. Shaheen, Ms. 
        Klobuchar, Mr. Franken, Mr. Donnelly, and Mrs. Murray):
  S. 944. A bill to amend the Internal Revenue Code of 1986 to reform 
and extend the incentives for biodiesel; to the Committee on Finance.

[[Page S2555]]

  

  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 American Renewable Fuel and Job 
Creation Act of 2017, which will ensure the continued success. I 
appreciate Senator Cantwell's leadership in joining this effort. I also 
appreciate the support of Senators Roberts, Hirono, Blunt, Whitehouse, 
Ernst, Heitkamp, Thune, Udall, Heinrich, Shaheen, Klobuchar, Franken, 
Donnelly, and Murray. This bill will modify the biodiesel fuel 
blender's credit to a domestic production credit starting this year and 
extend the credit through 2020.
  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 the mixture credit be 
modified to a producer credit since 2009. 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 and associated American jobs, 
rather than subsidizing imported biofuels. A credit for domestic 
production will also ensure that we are incentivizing the domestic 
industry and associated American jobs, rather than subsidizing imported 
biofuels. Since 2014, we have seen imports increase from 510 million 
gallons to about 1 billion gallons in 2016, and already in the first 
quarter of 2017 imports are 10 percent higher than they were last year 
at this time.
  We should not provide a U.S. taxpayer benefit to imported biofuels. 
By restricting the credit to domestic production, we will also save 
taxpayer money. The nonpartisan Joint Committee on Taxation estimated a 
similar amendment adopted in the Finance Committee in 2015 would have 
reduced the cost of the extension by $90 million for 2016 alone.
  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 65 percent of 
capacity, which does not even account for idled capacity. The fact is, 
the domestic biodiesel industry has the capacity and access to 
affordable feedstocks to meet the demand of U.S. consumers.
  The current biodiesel credit expired at the end of 2016. Adoption of 
the American Renewable Fuel and Job Creation Act of 2017 should be 
strongly considered as part of tax reform efforts currently underway. 
Absent tax reform, Congress should include it as part of any tax 
legislation extending expired tax provisions.
  Modifying the current blenders credit to a producers credit will 
ensure that the credit is doing what Congress intended--incentivizing 
investment in domestic biodiesel production and promoting American 
jobs. 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 commonsense, cost reduction reform.
                                 ______