We have a lot of one thing in this state: corn.
With Iowa’s plentiful supply of corn, ADM has expanded to become the nation’s second largest biomass producer. Cedar Rapids and many cities in the Corridor, have a key role in this equation as a center for bioprocessing.
ADM, DuPont, Diamond V and several local plants have significant bioprocessing facilities. Many of these companies are looking to partner with other innovators to produce high-value renewable biochemicals. State government should also be a partner in this effort.
A renewable biochemical tax credit under consideration by the General Assembly would create incentives for that kind of beneficial growth here in Cedar Rapids, and throughout Iowa. In order for Iowa to continue to offer an attractive business climate that stimulates job growth, the State Legislature should embrace this tax credit incentive.
According to a recent white paper released by the Iowa Biotechnology Association and the Cultivation Corridor, and written by Dr. Dermot Hayes of Iowa State University, these incentives make good economic policy. Iowa businesses have shown how government can be a catalyst for this kind of growth; consider how Iowa invested in homegrown ethanol. State incentives to develop the ethanol industry yielded dividends; in fact, the Hayes paper shows that the incentives were repaid within one to two years. Now, Iowa is a global leader in the production of ethanol.
Given the economic implications at stake and the fierce global competition to attract and retain high-wage jobs, we cannot take these successes for granted. SF 350 and HF 656, introduced in last year’s legislative session, were designed to provide for a tax credit on the production of biochemicals in Iowa that would be extended to manufacturers for up to five years. Sen. Rita Hart (D-Wheatland) and Rep. Mary Ann Hanusa (R-Council Bluffs) will lead this legislation again this session, and the assembly should support those efforts.
A typical commercial-scale facility incentivized through this tax credit will employ 50 to 100 workers. These workers will be highly skilled and well paid. Industries that require specialized workers often benefit from economics of agglomeration. Workers are attracted to areas where they have a choice of companies and companies are attracted to areas where they have a choice of workers.
The Cedar Rapids area has aligned itself, with previous help from the state, to become a global leader in bioprocessing. The City of Cedar Rapids recently invested in continued growth by hiring a liaison with Iowa State University. ADM was part of the selection process to do that. By making the investments necessary to grow this sector with this legislation for a modest budget-neutral tax credit, the state can further help our community and our state continue to grow and create great jobs.
ARTICLE CONTINUES BELOW ADVERTISEMENT
• Eric Fasnacht is Plant Manager of the ADM Cedar Rapids facility.; Liz Mathis is a state senator (D-Robins). Comments: Liz.Mathis@legis.iowa.gov