Washington, D.C.—Demonstrating dedication to Iowa’s rural economy, Rep. Steve King (IA-05) today filed his first legislation of the 109th Congress. The bill would give more small ethanol producers in our nation a tax credit and expand the tax credit to biodiesel producers.

By federal law, small ethanol producers that produce under 30 million gallons per year are eligible for a ten-cent-per-gallon tax credit up to 15 million gallons of production annually. In the 108th Congress, a provision introduced by King and passed into law as part of the American Jobs Creation Act in October 2004, extended the small ethanol producer tax credit to members of ethanol cooperatives.

Under the original law, the small ethanol producers that could take advantage of the tax credit are limited to those that produce under 30 million gallons. The bill introduced today would expand the number of ethanol producers that can take the tax credit to those that produce up to 60 million gallons annually. The credit is capped at $1.5 million per year per producer.

“We need to add value as close to the corn stalk and soybean stubble as many times as we can,” said King. “Adding value to the commodities we have producing for years will strengthen our rural economy, and the wealth flows from our farms to our town and cities.”

Most new ethanol plants in the Midwest are poised to produce at least 40 million gallons of ethanol a year. The bill modernizes the tax credit by changing the definition of small ethanol producer to 60 million gallons annually.

In addition, today’s legislation expands the tax credit to biodiesel producers.

“Extending the tax credit to biodiesel producers boosts biodiesel production. This advances our rural economies and our nation’s energy security,” added King.

Western Iowa lays claim to six operating ethanol plants, four ethanol plants under development, two operating biodiesel plants and one under development. King sits on the U.S. House Committee on Agriculture.