November 13, 2001
The Honorable Max Baucus, Chairman
The
Honorable Chuck Grassley, Ranking Member
Committee on Finance
U.S.
Senate
219 Dirksen Building
Washington, D.C. 20510
Dear Senator Baucus and Senator Grassley:
On
behalf of the Coalition, I ask that you consider including a small ethanol
producer credit as you consider the economic stimulus package currently
under consideration.
The small ethanol producer credit is currently included as Section 11
of S. 312. This provision is intended to make farmer-owned cooperatives
eligible for an important incentive that other small ethanol producers are
currently able to claim. The credit was created as an incentive for
farmers who invested in small ethanol production facilities. At present,
this credit works as a disincentive to farmers organized as a cooperative.
The addition of the small ethanol producer credit for farmer cooperatives
will make available an incentive that is important to the nation’s ethanol
plant development efforts, especially in rural areas of our states.
In many parts of the country, farmers are attempting to add value to
crops by producing ethanol from corn and other agricultural products. The
small producer credit serves as an important incentive provided the
farmer-owners have not structured the venture as a cooperative. The
language included in Section 11 of S. 312 would allow farmer-owned
cooperatives to claim the credit for which other small producers are
currently eligible. If included in the economic stimulus package, this
provision will be a timely incentive for farmer cooperatives that are
facing significant economic challenges.
The effect of this provision will be a direct tax credit to the
farmer-owners of ethanol processing cooperatives. This incentive will also
serve to make farmer-owned projects more competitive and economically
attractive to the financial community during the project financing stage.
The addition of farmer-owned ethanol cooperative incentives will help to
stimulate the economy of areas in which the plants are located, and the
new production will increase domestic ethanol production capacity. This
combination of value-added agri-processing and production of renewable
ethanol from domestic resources will serve to strengthen the economic
stimulus package and will allow farmer cooperatives to participate in the
growth of the ethanol industry.
I respectfully urge you to include Section 11 of S. 312 in the economic
stimulus package. On behalf of the Coalition, I appreciate your support
for this important provision.
