NCPA - National Center for Policy Analysis

Farm Lobby Squeezes Goodies Into Energy Bill

March 6, 2002

Although the nation's energy policy is supposed to be aimed at reducing America's reliance on foreign oil, the Senate energy bill pays homage to farm interests with tax breaks for some rather far-out projects.

  • Among the tax provisions are credits to reward southern Iowa farmers who sell prairie grass from their idle land to a local power plant.
  • They also include incentives for using cattle and pig waste to generate electricity.
  • And the nation's 930 rural electric cooperatives would reap two energy tax credits -- even though they don't pay federal taxes.

The bill's drafters had to get creative in the case of the co-ops. The legislation would allow them to obtain credits they could sell, trade or assign to any taxpayer -- or apply it as a prepayment to certain loans.

"It's only fair to provide equal incentives to all sectors of the industry," contends Kirk Johnson, a lobbyist for the National Rural Electric Cooperative Association.

Source: Shailagh Murray, "Senate Serves Energy Pork, Helping Farmers Find Energy in Manure," Wall Street Journal, March 6, 2002.


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