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"Biofuels are good for our
cars, good for the environment and good for America," Blagojevich
said at a bill signing ceremony on the farm of Rick and Sharon White
of rural Macon County. "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. 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."
To that end, the governor
signed a bill that established the Illinois Renewable Fuels
Development Program to provide up to $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.
There currently are five
ethanol plants operating in the state, with a combined annual
capacity of 766 million gallons -- the most of any state -- and a
dozen other production facilities are being planned. More than 300
million bushels of Illinois corn are used annually to process
ethanol.
The governor noted that the
future of ethanol appears bright, with the federal government
currently considering a standard that gasoline would contain at
least 10 percent ethanol. Ethanol now makes up only 1 percent of
fuel sold at gas stations, and the new federal requirement could
increase ethanol demand fourfold in the next few years.
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," he said.
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 five to 10 cents per bushel and provide an average
13 percent annual return to farmers who invest in an ethanol plant.
Each plant is expected to generate about 40 full-time jobs and
nearly 700 in the region.
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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 ethanol sales tax
exemption -- 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 making sure they are
adequately compensated for their labor.
House Bill 46 was sponsored by
state Rep. Dan Reitz, D-Steeleville, and state Sen. John Sullivan,
D-Rushville; Senate Bill 46 was sponsored by Rep. Reitz and state
Sen. Larry Walsh, D-Elwood; and Senate Bill 1212 was sponsored by
Sen. Walsh and state Rep. Mary Kay O'Brien, D-Watseka.
"I'd
like to thank the bills' sponsors for their commitment to the future
of ethanol in Illinois and the benefits it brings us," Blagojevich
said. "Sen. Sullivan, Sen. Walsh, Rep. Reitz, Rep. O'Brien and many
other legislators deserve to share in the credit for what we're
accomplishing today."
[News
release]
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