Governor Branstad just signed one of the most consequential pieces of economic development legislation in our state in years.
By Brent Willett, CEcD, Executive Director, Cultivation Corridor
The Biorenewable Chemical Tax Credit Program bill has become one of the first economic development programs aimed specifically at the emerging biochemical industry to be codified into law anywhere in the world. It authorizes up to $10 million annually in tax credits for ten years to support the growth of the biorenewable chemical industry in Iowa. The program, to be administered by the Iowa Economic Development Authority, creates an eligible credit of $0.05/pound for production of qualifying renewable chemicals in a given year.
State revenue officials estimate that thanks to this new tool, within ten years, six new companies will produce 600 million pounds of renewable chemicals supported by $30 million in tax credits, and that 25 existing companies supported by $62.5 million in tax credits will produce eligible renewable chemicals totaling more than 1.25 billion pounds.
A tax credit of up to $10 million per year for ten years has been authorized to support the growth of the biorenewable chemical industry in Iowa.
A January report commissioned by the Corridor and supported by the Iowa Biotechnology Association said Iowa could take a chunk of the nation’s $250 billion chemical market with greener replacements, but that a state tax incentive was needed to help build the new industry. The report was written by three leading Iowa State University professors.
Learn how Iowa is positioning itself as the premier global destination for investment, talent and research in the biochemicals industry by visiting cultivationcorridor.org/biochem.
An unprecedented coalition of supporters helped carry this proposal through the legislature to the governor’s desk. Of particular mention is the work of the Iowa Biotechnology Association, the Ames Chamber of Commerce, the Greater Des Moines Partnership and numerous other groups that helped to move the legislation through both legislative chambers.
IEDA Director Debi Durham — whom three years ago translated a vision into actionable legislation that would allow Iowa to be a leader in the emerging biochemical industry — deserves special recognition and appreciation for her aggressive pursuit of new ways for our state to compete in the global economy. Senator Rita Hart [D-Clinton] and Representative Mary Ann Hanusa [R- Council Bluffs] were the bill’s champions in their respective chambers and were tremendously effective. Finally, thanks go out to every member of the Iowa General Assembly and to Governor Branstad for making this legislation a reality.
With a new tool in hand, the work begins for economic developers and communities across Iowa to translate opportunity into jobs. We at the Cultivation Corridor are excited to roll up our sleeves and get to work with them.