In an effort to boost the use of Illinois grown corn and soybeans as renewable energy sources, Illinois Governor Rod Blagojevich signed legislation that extends the state sales tax exemption on ethanol, creates a new tax credit for biodiesel fuels and sets up a new grant program to encourage construction of renewable fuel production and research and development facilities.Decatur, Illinois – June 20, 2003, [SolarAccess.com] “These fuels – made from corn and soybeans grown right here in the state’s heartland – are a renewable resource and, unlike oil, it’s something we don’t need to import,” Blagojevich said. “If we want biofuels to really take hold, farmers, factory owners and investors need to have confidence that biofuels aren’t just a fad that will pass when oil prices drop.” The Governor signed a bill that established the Illinois Renewable Fuels Development Program to provide up to US$15 million a year in grants for financial assistance for the construction, modification, alteration or retrofitting of plants in Illinois that have a production capacity of at least 30 million gallons of renewable fuel per year. Each plant is expected to generate about 40 full-time jobs and nearly 700 in the region. At present there are five ethanol plants operating in the state with a combined annual capacity of 766 million gallons and a dozen other production facilities being planned. More than 300 million bushels of Illinois corn are used annually to process ethanol. With the expected increased demand for corn-based fuel, Blagojevich said the state is positioning itself to maintain its competitive edge in the market through the new grant program. “We don’t want to grow more corn for ethanol here only to send it to other states for processing – costing Illinois jobs,” Blagojevich said. The governor noted that the future of ethanol appears bright with the federal government currently considering a standard that gasoline contains at least 10 percent ethanol. Ethanol now makes up only one percent of fuel sold at gas stations and the new federal requirement could increase ethanol demand four-fold in the next few years. “Illinois’ legislation is a model for how states can stimulate their economies by opening doors for greater biodiesel use and production,” said National Biodiesel Board Executive Director Joe Jobe. Jobe also stressed that pending federal legislation, particularly a tax incentive for biodiesel, is still key to growth of the biodiesel industry. For each new ethanol plant created by the new legislation – House Bill 46 – the Department of Commerce and Economic Opportunity estimates that local corn prices would increase by 5 to 10 cents per bushel and provide an average 13 percent annual return to farmers who invest in an ethanol plant. Given Illinois’ annual production of 450 million bushels of soybeans, the legislation will boost the state’s economy by more than US$22.5 million. Funding for the grant program is to be realized by changing the sales tax exemption on ethanol from 70 percent to 80 percent of the state’s 6.25 percent sales tax. At the same time, the governor’s action on Senate Bill 46 – extends the sales tax exemption for ethanol, which was set to expire July 1, to 2013, and expands the exemption for the first time to biodiesel fuels. “By securing the tax break on ethanol and biofuel purchases for the next 10 years, we are sending a message to farmers and business that biofuel is here to stay – so start investing in it,” Blagojevich said. The governor also signed Senate Bill 1212 to clarify and expand the projects covered by the state’s Prevailing Wage Act. Under the new legislation, the definition of public works projects covered by the act is changed to projects constructed for public use, which would include ethanol plants. The act is a long-standing labor law that protects tax dollars by ensuring that public works projects are constructed using properly trained workers and protects the workers by marking sure they are adequately compensated for their labor.