Congress Adopted Food, Conservation, and Energy Act, Awaits Veto From the President

WASHINGTON, D.C., On May 15, 2008 the Senate adopted the conference report (Conf. Rpt. 110-627) for the Food, Conservation, and Energy Act of 2008 (H.R. 2419) by a vote of 81 to 15. The House adopted the conference report yesterday on a veto proof margin of 318 to106. Final passage of this conference report has been a long time coming. This $289 billion bill (over 5 years) provides funds for commodity, rural development, nutrition (close to 2/3 of the bill), conservation, and energy programs. After much debate and controversy, an additional $10 billion was included, with nutrition receiving the majority of the funds.

These programs will be beneficial for rural and urban communities and because of this both chambers of the Congress overwhelmingly passed the bill with strong bi-partisan support. Unfortunately, the President has indicated he will veto the bill. Given the large margins in both the Senate and House, it appears the Congress will be able to override his veto. At the same time the conference report was adopted the Congress also passed a short extension to the original 2002 farm bill which is due to expire tomorrow, May 16. This was a procedural necessity given the President’s veto threat and the possible need to override that veto.

The farm bill includes $1 billion in funds for renewable energy programs and new feedstock production for bioenergy. This bill reauthorizes several programs, including the 2002 Farm Bill’s energy title. Programs include grants and loan guarantees for rural communities and farmers to install renewable energy and energy efficiency systems; feedstock diversification and production; and biomass research and development (see chart on below). Several other important energy programs were also included in other titles of the bill.

Furthermore, this bill includes energy trade and tax provisions. The long-awaited Cellulosic Biofuel Credit for $1.01 per gallon is available through December 31, 2012 and will help move the country towards diversified feedstocks and more sustainable biofuels. The bill also includes a reduction in the 51 cent Volumetric Ethanol Excise Tax Credit (VEETC) to 45 cents. The bill also extends the secondary ethanol tariff for two years, through 2010. The secondary ethanol tariff of 54 cents is not reduced. Unfortunately, the biodiesel tax credit was not included in the bill.