Governors' Ethanol Coalition

The Honorable Chuck Grassley
Chairman
Senate Finance Committee
135 Hart Senate Office Building
Washington, DC 20510-1501

The Honorable Max Baucus
Ranking Member
Senate Finance Committee
511 Hart Senate Office Building
Washington, DC 20510

Dear Senators Grassley and Baucus:

On behalf of the twenty-nine Governors who are members of the Governors' Ethanol Coalition, we strongly support your efforts to 1) Revamp the Ethanol Excise Tax Exemption by creating a new volumetric ethanol excise tax credit; 2) Restore 2.5 cents in excise tax to the Highway Trust Fund; and 3) Fix the Small Ethanol Producer Tax Credit so farmer owned cooperative ethanol plants can participate in the Small Ethanol Producer Tax Credit Program as originally intended.

The Governors' Ethanol Coalition has always supported the federal tax incentive for ethanol fuel realizing its critical importance in growing the ethanol industry, reducing our dependence on oil, improving our rural economies and cleaning our air.

We have also been very concerned when some states are penalized in the allocation of Highway Trust Funds as we work to increase ethanol utilization.

As you know, these Highway Trust Funds are critical to the development and maintenance of our highway transportation systems. A strong national ethanol program and adequate funds for highway transportation should not be mutually exclusive. Your legislation, "Energy Tax Incentive Act of 2003," as passed by the Senate Finance Committee by 18 - 2, completely resolves this previous dilemma.

Please let us know how the Governors' Ethanol Coalition can help with the passage of this very important change in the tax law. Both the expansion of our nation's ethanol industry and the protection of our highway trust funds are of the highest priority to member states.
Thank you for your strong support and innovative ideas in addressing these complicated problems in the existing tax law.

Sincerely,

John Hoeven, Chairman
Governor of North Dakota


Rod Blagojevich, Vice Chairman
Governor of Illinois