February 11,2002

Grassley Initiatives Help to Make Energy Package Environmentally Friendly

WASHINGTON -- The chairman’s mark of an energy tax incentives bill includes numerouspieces of environmentally responsible alternative energy legislation that Sen. Chuck Grassley,ranking member of the Committee on Finance, has championed for years.

“It makes sense to use the tax code to develop alternative energy,” Grassley said. “Cuttingtaxes is an effective way to encourage positive, environmentally conscious ways to produceelectricity. I’m glad to work with Chairman Baucus to put together a good, green energy package.”Today Finance Committee Chairman Max Baucus released his chairman’s mark of an energytax incentives bill. The full committee is scheduled to consider the package on Wednesday.Grassley tax priorities in the chairman’s mark include:

< Wind energy. The chairman’s mark includes Grassley’s pending legislation, the BipartisanRenewable, Efficient Energy with Zero Effluent (BREEZE) Act (S. 530), to extend theproduction tax credit for energy generated by wind for five years. The tax credit expired Jan.1. Grassley authored the Wind Energy Incentives Act of 1993, which established the firsteverwind energy production tax credit.

< Biomass. The chairman’s mark includes Grassley’s bill, the Growing Renewable Energy forEmerging Needs (GREEN) Act (S. 756), which extends the tax credit for the production ofbiomass, which Grassley authored and which became law in 1992, and expands thedefinition of biomass to include saw dust, tree trimmings, agricultural byproducts anduntreated construction debris. Also included is the extension of the tax credit for theproduction of electricity from poultry waste.

< Small ethanol producer credit. The chairman’s mark expands the definition of an eligiblesmall ethanol producers so small cooperative producers of ethanol will receive the same taxbenefits as large companies. It also clarifies that the tax credit can flow through to thepatrons of the cooperatives. Grassley’s legislation, the Tax Empowerment and Relief forFarmers and Fishermen Act (TERFF) (S. 312), includes these provisions.

Grassley has a long history of promoting ethanol as a clean-burning, renewable, domesticallyproduced energy source. He scored a major victory for the Midwest when he not onlyblocked anti-ethanol efforts, but also countered by orchestrating congressional approval toextend the ethanol excise tax exemption to 2007.

< Fuel taxes. The chairman’s mark moves a portion of the taxes from gasohol – gasolineblended with ethanol – into the Highway Trust Fund to ensure that fuel taxes are used forhighways, not unrelated government programs. Grassley and Baucus agreed on this issueafter an energy hearing last July.

< Energy-efficient appliances. The chairman’s mark includes legislation Grassley originallyauthored and co-sponsored in this Congress, the Resource Efficient Appliance Incentives Act(S. 686), to encourage the manufacture and use of super energy-efficient washing machinesand refrigerators with a tax credit for the production of those appliances.

< Swine and bovine waste. The chairman’s mark includes Grassley’s legislation, theProviding Opportunities With Effluent Renewables (POWER) Act of 2001 (S. 1219), whichprovides new opportunities for energy production and increased farm income by creating aproduction tax credit for electricity generated from swine and bovine waste.