ICGA Urging Farmers To Call Branstad

ICGA Urging Farmers To Call Branstad

Iowa Corn Growers Association is asking members to call Governor Terry Branstad's office to urge him to sign a biofuels bill that was passed May 4 by the Iowa Legislature. The bill has a number of provisions and incentives supporting increased use of ethanol and biodiesel in the state.

The Iowa Corn Growers Association is pleased that a strongly supported biofuels bill passed the Iowa Legislature on May 4, 2011. The bill, known as Senate File 531, passed the Iowa Senate on Monday May 2 by a vote of 48 to 1. On May 4, the Iowa House passed Senate File 531, without amendment, by a vote of 81 to 13, with 6 absent. ICGA members in their policy process for 2011 ranked ethanol and biofuels as a legislative priority. The biofuels bill now heads to the desk of Iowa Governor Terry Branstad, who has to sign it for it to become law.

"While the governor has been very supportive of biofuels, he has not indicated if he will sign this bill," says Mindy Larson Poldberg, director of government relations for ICGA. "Given the current tight state budget situation, ICGA is asking members to contact Governor Branstad to urge him to sign this important piece of legislation."

The Governor can be contacted via a webform located here, or by telephone at 515.281.5211. Here's an updated summary with details of the final bill:

May 4, 2011:  Bill description for SF 531 (final as passed)

Iowa RFS schedule: SF 531 improves the Iowa Renewable Fuels Standard incentives by increasing the amount of incentive given to a retail station for meeting the Iowa RFS. The bill maintains the schedule as established in 2006, but provides additional incentives to retailers who meet the schedule: For 2012 and beyond the amounts would be 8/6/4 cents for achieving various levels. For 2011, the incentives would be 8/6/2.5 cents.

For reference, the current Iowa RFS law (as passed in 2006) provides that if a retailer meets the schedule, they receive 6.5 cents per gallon. If they are within 2% of the goal, they receive 4.5 cents, and within 4% get 2.5 cents. The Iowa RFS schedule under current law is as follows: 10% for 2009 (the period ending 12/31/09, same 12/31 date for all of the following references); 11% for 2010; 12% for 2011; 13% for 2012; 14% for 2013; 15% for 2014; 17% for 2015; 19% for 2016; 21% for 2017; 23% for 2018; and 25% for 2019 and years thereafter.

E85 incentive: The bill extends the E-85 Promotion Credit at a stable level of 16 cents until December 31, 2017. If action is not taken, the amount of the E85 tax credit would have dropped from 20 cents to 10 cents this year, and quickly phase down to zero. The 16 cents begins on 1/1/12.

E15 incentive: The bill creates a new promotion tax credit for each gallon of E15 sold, regardless of the retail station's status in meeting the ethanol promotion (schedule). The bill provides an additional 3 cents for blends between E-15 and E-69. Beginning 1/1/2015, the incentive is reduced to 2 cents. The E15 tax credit begins on 12/31/2017. The bill begins this provision on 7/1/11.

Biodiesel retail tax credit: The bill eliminates the 50% requirement for biodiesel tax credit eligibility, and provides 4.5 cents per gallon on B5 blends.

Biodiesel production plant incentive: This provision provides 3 cents per gallon in 2012, 2.5 cents per gallon in 2013, and 2 cents per gallon in 2014. This is a three year program, and would end after 2014. The credit would be limited to the first 25 million gallons of production per plant, per calendar year.

Infrastructure: The bill provides for $3 million per year for infrastructure such as blender pumps, E85, or biodiesel. The funds are redirected to the Renewable Fuels Infrastructure Program (RFIP) prior to being deposited into the Underground Storage Tank (UST) fund.

Site by site/company wide: The bill allows retailers to calculate both the RFS schedule calculation and their individual tax credits on a site-by-site or a company wide basis. This would leave the option for the retail station for method of calculation.

Liability protection: The bill allows retailer stations with liability protection from consumer lawsuits for misfueling, so long as the retail station has provided the proper and legal labeling.

"ICGA is asking members to contact Governor Branstad to urge him to sign this important piece of legislation," says Poldberg. "We know he has supported biofuels in the past, but the governor and key legislative leaders are now in very serious negotiations to try to balance a very tight state budget. Farmers need to call his office and remind the governor how important renewable fuels are to helping keep our state's economy strong in generating jobs for Iowans and in generating income for agriculture and in generating tax revenue for the state."

ICGA is a membership organization, lobbying on agricultural issues on behalf of its 6,500 farmer members. "Ethanol legislation is one of the top issues as decided through our association's grassroots policy process. It's one of our priority issues at the state level and at the federal level," notes Poldberg. "On Wednesday, ICGA also applauded federal biofuels legislation as proposed by Iowa Senator Charles Grassley and supported by Iowa Senator Tom Harkin."

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