Federal Aviation Administration Extension Act of 2010

Floor Speech

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Ms. COLLINS. Madam President, on Monday, the Senate took an important step toward extending critical tax relief for all Americans by approving cloture on the Reid-McConnell amendment, by an overwhelming vote. This bipartisan vote is encouraging and demonstrates that Members of this body can work together, with the President, to do what is reasonable and right to address the economic challenges our Nation continues to face.

As with any compromise, however, the bill is not perfect, and I would like to note for the record several--although not all--of the items I believe should have been handled differently.

First, I am concerned about the failure to include an extension of the production tax credit for existing open-loop biomass facilities. This credit is critical for preserving renewable energy and forestry jobs in Maine and across the United States, and an extension of this credit was included in previous tax proposals. According to the American Forest & Paper Association and the Biomass Power Association, since the start of 2008, at least 35 paper mills have permanently closed and more than 75 other facilities have experienced market-related downtime. In the biomass sector this year, six facilities have closed, three in Maine and three in California, and more are under the threat of closure.

The bill would be improved by extending the tax credit period for existing open-loop biomass facilities, as called for by Senator Bill Nelson's amendment, which I have cosponsored. This amendment would allow these facilities to remain competitive with other forms of renewable energy, saving jobs that are seriously at risk.

Second, I am concerned that the decision by the drafters to strike language added to the Tax Code by the American Recovery and Reinvestment Act could lead to unnecessary confusion regarding certain wood stoves.

For example, the bill strikes language that I sought in ARRA to clarify how the thermal efficiency of residential wood and wood-pellet stoves should be measured for purposes of the tax credit in section 25C. That tax credit was created by the Emergency Economic Stabilization Act of 2008, which did not specify a methodology for determining thermal efficiency. The IRS has issued guidance directing that the ``lower heating value'' methodology should be used, which is consistent with industry practices and with our intent to ensure that the credit is available for efficient and clean-burning wood and wood-pellet stoves.

Removing the reference to the ``lower heating value'' from the code serves little purpose. Certainly, however, it does not mean that this commonsense methodology is precluded, nor does it require the IRS to revisit its methodology. I hope that my comments today will help avoid confusion about the use of the ``lower heating value'' methodology with respect to this tax credit.

Finally, I am disappointed that the bill does not hold the line on a tax credit for corn-based ethanol and some other special interest provisions. The corn-based ethanol tax break is extraordinarily expensive, costing some $6 billion in subsidies from taxpayers annually according to the Congressional Budget Office. Over recent years we have also seen food and feed prices rise as crops have been diverted to first generation biofuel production. In addition, corn-based ethanol mandates present an environmental concern as they could result in energy efficiency losses and increased emissions of air pollutants, because mechanical failures can jeopardize the effectiveness of emission control devices and systems installed on engines.

Of course, a bill without these flaws would have been preferable, but with the economy still weak, and with unemployment persisting at nearly 10 percent nationally, now is not the time to be raising taxes, and this bill averts one of the largest tax increases in history. America needs jobs--not higher taxes.

In September, I first urged my colleagues and the administration to come together around this 2-year compromise that will get us through the recession and send a strong signal to the business community to invest and create jobs. I am pleased that the Senate has acted to give families some confidence and business owners some certainty.

I encourage my colleagues in the Congress and the President to use this 2-year period to undertake comprehensive tax reform to make our system fairer, simpler, and more progrowth.

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