State tax credits will soon be available to Iowa companies that make new products from what’s left over after ethanol and biodiesel are made from “biomass” like corn and soybeans.
Governor Terry Branstad supports the concept and the Iowa House gave it final legislative approval Monday afternoon.
“This bill incentivizes new start-up companies in Iowa and other ventures to take the biomass feedstocks currently produced in Iowa and manufacture these new building block chemicals,” says Representative Mary Ann Hanusa, a Republican from Council Bluffs.
Bill backers envision companies developing new products from the starches, sugars and oils that are the left-overs of biofuel production.
“The federal Department of Energy has identified approximately 30 chemicals which provide that greatest market potential,” Hanusa says.
The bill is “made to order” for Iowa, according to Hanusa, because the state leads the country in biofuel production.
“This bill will create new opportunities for research and development and has the potential for creating new businesses and new product lines,” Hanusa says. “…This legislation will open new horizons in industry, economic development and education across Iowa.”
Companies that develop new products from biofuel production left-overs will apply to the Iowa Economic Development Authority for the tax credits. The bill calls for a $10 million limit or cap on these tax credits each year. The $10 million will come from the Economic Development Authority’s already existing $170 million account for a series of refundable state tax credits.