A bill to create a $5 million tax credit to advance the development of the biofuel industry in Minnesota is gaining traction at the state Legislature.

Newer technologies allow the use of plants like native prairie grasses or alfalfa for conversion ethanol.

The so-called advanced biofuel tax credit was initially opposed by environmentalists because the most common ingredient, corn, can be very polluting.

"It's a summer annual that is in the summer actively soaking up water and fertilizers, but in the spring or in the fall the land is basically bare, and that's when we get the heavy pollution," said Steve Morse, executive director of the Minnesota Environmental Partnership.

But environmentalists were won over by a compromise that requires that any new biofuel plants with state support include at least 50 percent perennials like alfalfa in the biofuel feedstock within five years. Morse said perennials lead to less runoff and pollution than corn production.

"Perennials are plants that grow year-round," Morse said. "If you drive out in the countryside on a day like today, you're already seeing alfalfa field and other types of perennials starting to green up because they're functioning on the landscape, so what that means is you're dramatically decreasing the pollution loading on those lands."

Under the bill, farmers who shift over from corn production to perennials will also be eligible for state support through the Board of Water and Soil Resources.

Morse said the new policies would help Minnesota meet a federal mandate to increase biofuel production.

The bill has been approved by committees in both the House and Senate. If it's signed into law, the tax credit will be available on July 1.