Biofuel Incentive, Grant Bills Work Through Idaho Legislature

By Carlson, Brad

Two proposals in the Idaho Legislature aim to provide an incentive to develop biofuel infrastructure.

* House Bill 177 offers a 6 percent income tax credit for capital investments in biofuel infrastructure. Retail fuel dealers or fuel distributors would be able to recapture the credit over five years. The program would expire at the end of 2011.

* House Bill 150 would create a fund for matching grants to Idaho retail fuel dealers who invest in qualified biofuel infrastructure projects. The 50/50 matching grant program would expire July 1, 2012.

Rep. George Eskridge, R-Dover, was floor sponsor of both bills.

“For ethanol right now, we don’t have any real incentives for it to get into the retail distribution system,” he said.

Getting ethanol into the retail fuel distribution system is difficult – and a significant investment – because it requires either separate facilities or thorough cleaning of existing facilities, he said.

Idaho’s existing 3 percent investment tax credit, which can be recaptured over a period up to 14 years, hasn’t been enough to spark ample investment in biofuels infrastructure, Eskridge said.

Sen. Curt McKenzie, R-Boise, co-sponsored both bills.

A stepped-up tax incentive for biofuels development would help Idaho add to fuel capacity that’s now limited in that most fuel comes from a pipeline originating in Utah, he said. A legislative interim committee on energy placed importance on alternative fuels, he said.

House Bill 177 has broader support than a 2006 proposal to require all retailers to pump fuel containing 10 percent ethanol, McKenzie said. The ’06 measure – which some in the petroleum industry opposed as a mandate – passed in the Senate but failed in the House, he said.

House Bill 177 on Feb. 27 passed in the House 68-0. The Senate on March 9 held a second reading. McKenzie said he expected a third reading and final vote in the Senate late last week.

The bill’s Statement of Purpose and Fiscal Impact says the impact on the General Fund is estimated at $30,000 in fiscal 2008. The maximum estimated impact is $30,000 over five years, the statement said.

House Bill 150 would create a Rural Idaho Economic Development Biofuels Infrastructure Matching Grant Fund. The House on Feb. 28 passed it 69-1. The Senate held a second reading March 9.

Here are the amounts to be requested for the matching grant fund, according to the bill’s Statement of Purpose and Fiscal Impact: $690,000 for fiscal 2008, and $1.61 million each year from fiscal 2009 to fiscal 2012.

(Copyright 2007 Dolan Media Newswires)

(c) 2007 Idaho Business Review, The. Provided by ProQuest Information and Learning. All rights Reserved.