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January 22, 2004

Senators debate benefit of ethanol plants

By RACHAEL SERAVALLI / DN Senior Writer

STATE LEGISLATURE
Senators continued into a second day of debate Wednesday on a bill that would ensure more funding for an ethanol subsidy program.

In its original form, the bill would have increased the excise tax on corn from a half-cent to one cent per bushel of corn and per hundredweight of sorghum grain.

Most senators who spoke on the bill and its amendments expressed support for the program, which began in 1992 and is expected to run out of funds by December.

The program encourages Nebraskans to build ethanol plants by providing $20 million to $30 million dollars in tax credits during the first several years of the plant's life. Processing the fuel is considered by many to be a key component of revitalizing rural economies in the state.

Some senators, however, expressed concern that the program was gouging the state's coffers and that Nebraskans were not benefiting from the program as much as they could.

Sen. Pat Bourne of Omaha introduced an amendment that would require public notification that a plant was to be built so Nebraska companies also could bid on ethanol plant projects. The amendment also would require a Nebraska contractor to be hired if it makes a bid comparable to an out-of-state contractor.

While many senators agreed with the premise of the amendment, some, including Sen. Ed Schrock of Elm Creek and Sen. Tom Baker of Trenton, worried it would encourage lawsuits or force a prospective plant builder to choose an unqualified contractor.

"There's a lot more involved than just the low bid," Baker said.

Bourne assured them the language of the amendment would not hold a builder to unreasonable restrictions when choosing a contractor. The amendment passed 32-0.

Sen. Ernie Chambers of Omaha was alone in his opposition to the bill. Despite some senators repeatedly touting the economic advantages of the plants, Chambers continued to speak against the bill because of what he called a lack of proof that they benefit the communities where the plants are located or the state as a whole.

The Bourne amendment also rescinded the excise tax increase in favor of a separate bill introduced this session by Baker that will address the program's funding mechanism.

Instead of the half-cent tax increase on corn and sorghum, the bill would apply the tax burden more broadly, Baker said. They will include one-fourth of a cent increase on corn and sorghum, three-tenths of a cent per gallon of gasoline and one-tenth of a cent per gallon of all other fuels.

"The grain producers were footing nearly all the bill," Baker said. "But since it benefits the whole state, we thought we should spread the responsibility a little more evenly."

The bill advanced to select file with a 37-0 vote.

Just enough time remained after the vote to touch on a bill, introduced by Sen. Adrian Smith of Gering, which would ban the use of human embryos for reproduction or research in Nebraska.

Sen. Kermit Brashear of Omaha introduced an amendment that would make it a class IV felony to knowingly be involved in any aspect of human embryo research or reproduction.

Sen. Joel Johnson of Kearney encouraged the other members to not decide the issue rashly.

"We need an ongoing debate in this country," Johnson said.

At noon, the senators adjourned and spent the rest of the day in committee hearings.

 

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