Economic development panel ponders $18 million boost for bioincentive program

Claims on Minnesota’s Bioincentive Program have outpaced available funding, prompting lawmakers to consider an infusion of cash to close the gap.

A proposal that would allocate $18 million to the program designed to encourage commercial-scale production of advanced biofuels, renewable chemicals, and biomass thermal energy was laid over Thursday by the House Workforce, Labor, and Economic Development Finance and Policy Committee.

As amended, HF3217 aims to ensure the Legislature fulfills its commitment made to businesses that invested their resources based on the incentive program, said Rep. Ron Kresha (R–Little Falls), the bill sponsor.  

He argued that companies participating in the program have met production and reporting requirements and now await reimbursement payments the state has not fully funded. “Are we going to go forward with dangling a carrot and then pulling it back too soon?”

Under the program, businesses may claim per-unit reimbursements for eligible production. Industry representatives describe it as a low-risk, high-reward program that benefits the state’s economy and environment.

Advanced biofuels, for example, are defined as producing greenhouse gas emissions that are at least 50 percent less than petroleum-based fuels. Renewable chemicals are defined as plastic produced by biomass.

But demand for incentive payments has exceeded the funding for the program by $14.5 million from Fiscal Year 2017 through the first quarter of Fiscal Year 2026.

Money would come from the Minnesota Forward Fund. The Legislature appropriated $390 million to the fund, including $240 million intended for matching opportunities under the federal CHIPS and Science Act.

Rep. Dave Pinto (DFL–St. Paul) said demand exceeds funds available for many state programs. “It seems clear a certain amount of money is obligated, and when we run out, we run out.”