The Honorable Tom Daschle
Majority Leader
United States Senate
Washington, D.C. 20510
The Honorable Trent Lott
Minority Leader
United States Senate
Washington, D.C. 20510
The Honorable Max Baucus
Chairman
Committee on Finance
United States Senate
219 Dirksen Building
Washington, D.C. 20510
The Honorable Chuck Grassley
Ranking Member
Committee on Finance
United States Senate
219 Dirksen Building
Washington, D.C. 20510
Dear Senator Daschle, Senator Lott, Senator Baucus, and Senator
Grassley:
On behalf of the Governors’ Ethanol Coalition, we are writing to
express our support for a provision contained in the Energy Tax
Incentives Act of 2002. This special provision will ensure that taxes
collected on ethanol-blended fuels are deposited in the Highway Trust Fund
instead of the general fund for deficit reduction.
Currently, 2.5 cents a gallon of the excise tax collected on ethanol
blended fuel is sent to the general fund for deficit reduction rather than
the Highway Trust Fund. As such, the current policy effectively penalizes
states for promoting greater ethanol use in the form of reduced revenues
for highway projects. Redirecting the 2.5 cents to the Highway Trust Fund
will provide an additional $400 million for state highway projects. In
fact, in 1995, Congress redirected the 2.5 cent a gallon deficit reduction
excise tax to the Highway Trust Fund for all fuels except ethanol.
Congress has long recognized the significant economic, environmental
and energy security benefits ethanol provides. A sound highway program and
a sound energy policy that promotes domestic, renewable fuels like ethanol
should not be mutually exclusive. Redirecting the 2.5 cents is a simple
and appropriate resolution to this issue.
We respectfully urge you to support correction of this oversight during
consideration of energy legislation.
