South Dakota Sentate Rejects Biodiesel Incentive

3 March 2005

AP. The South Dakota Senate rejected a plan to cut the state tax on biodiesel fuel made from soybeans.

Senators voted 19-14 to kill the measure, even though supporters said the bill was needed to help boost the fledgling industry that is seeking to build plants to make fuel out of soybeans.

SB214 would have reduced the 22-cent-a-gallon tax on biodiesel-blend fuels to 20 cents until 2010.

A Senate committee earlier had rejected a similar bill. The House last week revived the proposed fuel-tax cut and sent it to the Senate, but senators on Tuesday once again refused to accept the idea.

The state’s Transportation Department opposed the measure based on the forecast loss of $2 million in revenue for the state highway fund. This, in turn, would have led to the loss of $8 million in matching federal funds.