During a Senate Finance Committee field hearing at Heartland Cooperatives entitled, “Rural Economy, Renewable Energy & the Role of Our Cooperatives,” Renewable Fuels Association (RFA) President Bob Dinneen urged Congress to include important tax modifications in the final energy bill to provide a boost for farmer-owned ethanol plants and to address concerns regarding the Highway Trust Fund.Dallas Center, Iowa – September 5, 2003 [SolarAccess.com] “The importance of ethanol as an alternative fuel to the nation’s economy has never been greater, and its value promises to grow even larger,” said Dinneen. “Oil prices are again playing havoc with the American economy. The U.S. economy is facing the most significant period of sluggish growth in more than a decade and high oil prices are a major contributor to the current economic slowdown.” Created by the Highway Revenue Act of 1956, the Highway Trust Fund (HTF) was originally designed primarily to ensure a dependable source of financing for the National System of Interstate and Defense Highways and also as the source of funding for the remainder of the Federal-aid Highway Program. In the original Highway Revenue Act of 1956, the crediting of user taxes to the HTF was set to expire at the end of fiscal year 1972, but since then, legislation has been passed to extend the imposition of the taxes and their transfer to the HTF through September 30, 2005. Like other federal trust funds, the HTF is a financing mechanism established by law to account for tax receipts that are collected by the federal government and are dedicated or “earmarked” for expenditure on special purposes. “With 45 percent growth in the last three years, one of the only economic sectors that is currently posting gains in the economy is the ethanol sector,” said Dinneen. “If Congress adopts the proposals discussed today, the growth in the ethanol industry and the benefits to rural America will continue.” Dinneen urged Congress to work with, Senator Chuck Grassley (R-Iowa), who chaired the field hearing, and Finance Committee Ranking Member Senator Max Baucus (D-Montana) to pass “the Volumetric Ethanol Excise Tax Credit (VEETC) Act of 2003” (S. 1548); together with modifications to improve “the Small Ethanol Producer Tax Credit,” as contained in H.R. 6, “the Senate’s Energy Policy Act of 2003.” Dinneen also urged adoption of the modifications to the farmer cooperative “dividend allocation rule,” as proposed by Senator Grassley, which would allow farmer cooperatives to more easily access equity capital. The VEETC improves the flexibility of the existing ethanol excise tax credit while eliminating any impact on the Highway Trust Fund due to the use of ethanol-blended fuels. The changes to the small producer credit will allow farmer cooperatives to fully participate in the program and updates the definition of a small producer to include ethanol plants producing up to 60 million gallons per year.