The Iowa House has passed a bill that would raise the state tax on gas that does not contain ethanol if Iowa does not reach the goal of having ethanol account for 25 percent of the fuel sold in Iowa by 2025. Representative Steve Olson, a Republican from DeWitt, says it’s an accountability measure to try to drive demand for corn-based ethanol.
“My personal opinion is this is a penalty…we will never had to worry about…because we will reach these (ethanol use) goals,” Olson says. The House voted 53 to 44 to keep that two-cent-per-gallon tax “penalty” in the bill.
Representative Joe Hutter, a Republican from Bettendorf, ridiculed the idea, suggesting the next step would be to raise the state tax on wine that wasn’t made with Iowa grapes. “I am not in favor of any tax increases,” Hutter says. Despite the spat over the tax issue, the bill was widely praised as an important step in building demand for ethanol.
The House voted to set aside two-million dollars in each of the next nine years for state grants for stations that install new tanks that will dispense E-85, the 85-percent ethanol blend.
Representative Mike Reasoner, a Democrat from Creston who is a former gas station owner, says increasing the use of “renewable” fuels like corn-based ethanol and soy-based biodiesel will reduce our dependence on foreign oil. “Why not try to help the farm economy…to help our farmers?” Reasoner asks. “This is an opportunity that this bill presents.”
Representative David Tjepkes, a Republican from Gowrie, says ethanol and soydiesel are helping push the prices of corn and soybeans higher. “I think it’s built a sense of enthusiasm and hope in our agricultural economy,” Tjepkes says. Representative Dolores Mertz, a Democrat from Ottosen, agreed. “By passing this bill, we will show the corn growers and the soybean growers in our state that we support them and the commodities that they raise,” Mertz says.
The bill now goes to the Senate, and the key senator working on the legislation says he’s not inclined to penalize consumers with that escalating state tax on non-ethanol-blended fuels.