Governor Terry Branstad held a public budget hearing in his statehouse office late Wednesday afternoon and representatives of two different groups were there to tout a tax credit Branstad proposed last January. The biochemical tax break would be aimed at companies that turn the byproducts of ethanol and biodiesel production into some other product.
Mike St. Clair is a lobbyist for the Iowa Biotechnology Association.
“It presents a great opportunity for Iowa in a number of areas to create not only jobs, but real, brick-and-mortar production facilities,” says Mike St. Clair, a lobbyist for the Iowa Biotechnology Association.
The proposal calls for the state to set aside 10-million dollars a year for the next 10 years for the tax credit. Sinclair says his group will release an academic study in January to show the economic impact of the proposed tax credit.
“As you look at the map of where potential production could happen, it gets outside of the usual suspects of Des Moines And Cedar Rapids and into some smaller communities in the state,” St. Clair says, “so we think it’s wonderful from that perspective.”
John Stineman is the executive director of the Iowa Chamber Alliance, representing the state’s 16 largest chambers of commerce. He’s touting the tax break, too.
“A tax credit that we’re fiercely advocating for,…so that Iowa can differentiate itself among other bio-producing states and build on the 35 year legacy of value-added agriculture that’s taken place in Iowa,” Stineman said. “We view that as a transformational opportunity.”
If the legislature approved the move, the tax credit would be available on a first-come, first-served basis. Companies that have been in business for less than five years would be eligible for a $1 million tax credit. More established companies that produce a new biochemical product would be eligible for a half a million dollar credit. Dried distiller’s grain is a byproduct when ethanol is made from corn and that’s already being sold. Ethanol and biodiesel plants in Iowa would have to come up with new products to be eligible for the tax credit.