DES MOINES — A state tax break for companies that use agricultural byproduct to make renewable chemicals is headed to the governor’s desk for final approval.
Lawmakers in the Iowa House on Monday gave almost unanimous approval to the Senate’s tweaks to the renewable chemical production tax credit. They sent the legislation to the governor, who made the program a top priority for this year’s legislative session.
“Gov. Branstad was very pleased to see the overwhelming bipartisan support in the House and Senate for a new biochemical tax program that will build on our state’s leadership in renewable energy,” said the governor’s spokesman, Ben Hammes, in an emailed statement. “Iowa is already the nation’s leader in renewable energy. As he outlined in his Condition of the State address, Gov. Branstad believes this biochemical tax program will go even further to continue spurring economic growth all over Iowa, creating more high-quality jobs and attracting investments in renewable chemical manufacturing and advanced biorefining.”
The tax credit provides up to $10 million in tax relief to businesses that create renewable chemicals with agricultural byproduct such as feed stalk.
The program does not cost the state extra dollars, Branstad said. It will operate within the existing $170 million aggregate tax credit cap.
Supporters of the renewable chemical tax credit tout its potential to spur existing businesses and the creation of new ones.
“We as a state are uniquely situated to take advantage of (the bill’s) provisions,” said Rep. Mary Hanusa, R-Council Bluffs. “Iowa will be at the forefront of this venture.”
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According to the Cultivation Corridor, a collection of public and private partners in Iowa working to expand the state’s biochemical and biofuel footprint, the national market for renewable chemicals is more than $250 billion annually and will create more than 50,000 jobs by 2020.
Gas tax reports
Also en route to the governor is legislation that would require county engineers to record and report how revenue from the state’s gas tax is being spent on bridge repair projects.
The state last year raised its fuel tax 10 cents per gallon to create more revenue for road and bridge repair and construction projects.
Iowa is required to detail how gas tax revenue is spent; cities and counties are not.
Supporters say the legislation would show how taxpayer funds are being spent on bridge repairs, which is a need noted by supporters of last year’s gas tax increase.