Indiana Lands Ethanol Plant
Rush Renewable Energy, LLC announced on December 19 that it will construct a new ethanol production facility in Rushville. The company estimates its investment in the plant at $82 million and will hire 36 people to operate it. The plant will have an annual capacity of 60 million gallons of ethanol that is produced from 20 million bushels of corn grown by Indiana farmers.
The city, which is located about 60 miles southeast of Indianapolis, teamed up with the state of Indiana to provide an economic development package that influenced the company's decision to locate in Rushville. In January 2006 the city has begun annexing the land slated for the facility in order to rezone it for industrial development and issuing construction permits.
Rushville is supporting the project through $7.3 million in tax increment financing that provide infrastructure improvements to make the site more attractive to industry. Tax increment financing is an economic development mechanism that local governments use to attract industry to areas that are usually considered to be blighted. Under this mechanism, the city freezes the assessment for local property taxes at a predetermined level based on the value of the property before construction of the plant and supporting infrastructure begins. The city then borrows money by issuing municipal bonds to build infrastructure to support the new facility, including, for example, roads and lighting, etc. Once the facility is built, the property assessment is raised in increments over time, which, in turn, raises property taxes in increments as the facility begins to make money. The city then uses incremental income to pay off the bonds. The state gives municipalities the power to use tax increment financing and usually reviews these and other economic development mechanisms to make sure taxpayers are receiving value for use of tax dollars.
The Indiana Economic Development Corporation (IDEC) also provided incentives for locating this plant in Rushville. These include IDEC tax credits worth $500,000 over 10 years and potential tax credits worth an additional $2.5 million over 9 years under the Hoosier Business Investment program. Read more about the story on the Ethanol Marketplace Web site.
Source: January 3 edition of Renewable Energy Access.