ANNOUNCEMENT 16 Apr 2010In April 2010, the government of the United States of America announced a change in the required local inputs to serve domestic customers.
NUMBER OF INTERVENTIONS
See the hyperlinked materials in the description of the measure.
On April 16, 2010 the Rural Business-Cooperative Service of the U.S. Department of Agriculture published a proposed rule in the Federal Register to implement a program to subsidize the production of biofuels in the United States. The subsidies would be available only to biorefineries with at least 51 percent U.S. ownership. This program was initially authorized by Congress in the 2008 Farm Bill, but neither that law nor a predecessor program established any such citizenship requirements for owners.
At issue is a program that was authorized under section 9005 of the Food, Energy, and Conservation Act of 2008. One provision within section 9001 of that law amended the 2002 Farm Bill to provide for "payments to eligible producers to support and ensure an expanding production of advanced biofuels." The eligibility requirements laid out in the law stated that "payments under this section to eligible producers 'shall be' based on" various factors, including "other appropriate factors, as determined by the Secretary 'of Agriculture'." The restriction of payments to U.S.-owned facilities appears to have been made in exercise of that discretionary authority. The underlying statute makes no mention of such a limitation, nor was there any such requirement in the previous biodiesel subsidy program. Thr proposed rule nevertheless provides in section 4288.110(a) that an eligible producer "must meet one of the following citizenship requirements:
"(1) If the applicant is an individual, the applicant must be a citizen or national of the United States (U.S.), the Republic of Palau, the Federated States of Micronesia, the Republic of the Marshall Islands, or American Samoa, or must reside in the U.S. after legal admittance for permanent residence.
"(2) If the applicant is an entity other than an individual, the applicant must be at least 51 percent owned by persons who are either citizens or nationals of the United States (U.S.), the Republic of Palau, the Federated States of Micronesia, the Republic of the Marshall Islands, or American Samoa, or legally admitted permanent residents residing in the U.S. This paragraph is not applicable if the entity is owned solely by members of an immediate family. In such instance, if at least one of the immediate family members is a citizen or national, as defined in paragraph (b)(2)(i) of this section, then the entity is eligible.
"(3) If the applicant is a subsidiary, the parent entity or the entities that have an ownership in that applicant must also be at least 51 percent owned by persons who are either citizens or nationals of the United States (U.S), the Republic of Palau, the Federated States of Micronesia, the Republic of the Marshall Islands, or American Samoa, or legally admitted permanent residents residing in the U.S."
The ownership requirement is, as of this writing, only a proposal and not a final rule. In the Federal Register notice the Rural Business-Cooperative Service requested that written comments on the proposed rule be submitted by May 17, 2010. One of the questions that the agency asked commenters to address is the following:
"4. Should the program allow entities that do not meet the proposedcitizenship requirements (Sec.4288.110(a)) of at least 51 percent domestic ownership to participate, including those entities owned entirely by immediate family members where only one of the family members meets the citizenship requirements? Please be sure to provide rationale for your position."