II 

110TH CONGRESS 

2D SESSION S. 3080 

To ensure parity between the temporary duty imposed on ethanol and tax 

credits provided on ethanol. 

IN THE SENATE OF THE UNITED STATES 

JUNE 4, 2008 

Mrs. FEINSTEIN (for herself, Mr. GREGG, Ms. CANTWELL, Mr. ALLARD, and 

Ms. COLLINS) introduced the following bill; which was read twice and referred to the Committee on Finance 

A BILL 

To ensure parity between the temporary duty imposed on 

ethanol and tax credits provided on ethanol. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Imported Ethanol Par5 ity Act’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 

8 (1) On May 6, 2006, the Chairman of the Fi9 nance Committee of the Senate stated on the Senate 

10 floor that, ‘‘the United States tariff on ethanol operVerDate Aug 31 2005 21:41 Jun 05, 2008 Jkt 069200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S3080.IS S3080

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1 ates as an offset to an excise tax credit that applies 

2 to both domestically produced and imported eth3 anol.’’. 

4 (2) On May 9, 2006, the Renewable Fuels As5 sociation stated: ‘‘the secondary tariff exists as an 

6 offset to the tax incentive gasoline refiners receive 

7 for every gallon of ethanol they blend, regardless of 

8 the ethanol’s origin.’’. In May 2008, the Renewable 

9 Fuels Association’s Executive Director asserted that 

10 ‘‘The tariff is there not so much to protect the in11 dustry but the United States taxpayer.’’. 

12 (3) In a letter to Congress dated June 20, 

13 2007, the American Coalition for Ethanol, the 

14 American Farm Bureau Federation, the National 

15 Corn Growers Association, the National Council of 

16 Farmer Cooperatives, the National Sorghum Pro17 ducers, and the Renewable Fuels Association stated 

18 that the ‘‘(blender) tax credit is available to refiners 

19 regardless of whether the ethanol blended is im20 ported or domestic. To prevent United States tax21 payers from subsidizing foreign ethanol companies, 

22 Congress passed an offset to the tax credit that for23 eign companies pay in the form of a tariff.’’. 

24 (4) The Food, Conservation, and Energy Act of 

25 2008, as contained in the Conference Report to acVerDate Aug 31 2005 21:41 Jun 05, 2008 Jkt 069200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3080.IS S3080

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1 company H.R. 2419 in the 110th Congress, proposes 

2 to decrease the excise tax credit for blending ethanol 

3 from $0.51 to $0.45 per gallon, but extend the 

4 $0.54 per gallon temporary duty on imported eth5 anol, increasing the competitive disadvantage of eth6 anol imports in the United States marketplace. The 

7 legislation would transform a tariff designed to off8 set a domestic subsidy into a real import barrier of 

9 at least $0.09 per gallon. 

10 (5) The State of California is adopting a Low 

11 Carbon Fuels Standard that requires a reduction in 

12 the lifecycle greenhouse gas emissions from trans13 portation fuels, and the Energy Independence and 

14 Security Act of 2007 requires the United States to 

15 use increasing quantities of ‘‘advanced biofuels’’ that 

16 have lifecycle greenhouse gas emissions that are at 

17 least 50 percent less than lifecycle greenhouse gas 

18 emissions from gasoline. 

19 (6) The lifecycle greenhouse gas emissions of 

20 ethanol vary depending on production methods and 

21 feedstocks. These differences will impact the degree 

22 to which ethanol may be used to meet ‘‘low-carbon’’ 

23 fuel requirements under California law and the En24 ergy Independence and Security Act of 2007. 


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1 (7) Sugar cane ethanol plants use biomass from 

2 sugar stalks as process energy, resulting in less fos3 sil fuel input compared to current corn-to-ethanol 

4 processes. 

5 (8) The 2007 California Energy Commission 

6 Report, entitled ‘‘Full Fuel Cycle Assessment: Well7 to-Wheels Energy Inputs, Emissions, and Water Im8 pacts’’, concluded that the direct lifecycle greenhouse 

9 gas emissions of imported sugar based ethanol are 

10 68 percent lower than gasoline, while the direct 

11 lifecycle greenhouse gas emissions of corn based eth12 anol from the Midwest are 15 to 28 percent lower 

13 than gasoline. 

14 (9) The cost to ship ethanol by sea from foreign 

15 production areas to California is competitive with 

16 the cost to ship ethanol by rail from the American 

17 Midwest, according to ethanol producers and import18 ers. 

19 (10) Ethanol production will vary from region 

20 to region each year based on crop performance, and 

21 a global biofuels marketplace would permit mutually 

22 beneficial trade between producing regions capable 

23 of stabilizing both fuel and food prices. 

24 (11) In March 2007, the United States and 

25 Brazil entered into a strategic alliance to cooperate 


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1 on advanced research for biofuels, develop biofuel 

2 technology, and expand the production and use of 

3 biofuels throughout the Western Hemisphere, espe4 cially in the Caribbean and Central America. 

5 (12) On March 9, 2007, President Bush stated 

6 ‘‘it’s in the interest of the United States that there 

7 be a prosperous neighborhood. And one way to help 

8 spread prosperity in Central America is for them to 

9 become energy producers.’’. 

10 (13) According to a February 2008 study by 

11 the Massachusetts Institute of Technology, titled 

12 ‘‘Biomass to Ethanol: Potential Production and En13 vironmental Impacts’’, the current ethanol distribu14 tion system in the United States is not capable of 

15 efficiently supplying ethanol to the East Coast mar16 kets. 

17 SEC. 3. ETHANOL TAX PARITY. 

18 Not later than 30 days after the date of the enact19 ment of this Act, and semiannually thereafter, the Presi20 dent shall reduce the temporary duty imposed on ethanol 

21 under subheading 9901.00.50 of the Harmonized Tariff 

22 Schedule of the United States by an amount equal to the 

23 reduction in any Federal income or excise tax credit under 

24 section 40(h), 6426(b), or 6427(e)(1) of the Internal Rev25 enue Code of 1986 and take any other action necessary 


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1 to ensure that the temporary duty imposed on ethanol 

2 under such subheading 9901.00.50 is equal to, or lower 

3 than, any Federal income or excise tax credit applicable 

4 to ethanol under the Internal Revenue Code of 1986. 

Æ 


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