1997 - 1998 LEGISLATURE
February 24, 1997 - Introduced by Representatives Hahn, Freese, Harsdorf,
Ainsworth, Boyle, Owens, Musser, Schafer, Seratti
and Zukowski,
cosponsored by Senator Zien. Referred to Committee on Rural Affairs.
AB134,1,2 1An Act to create 16.957 and 20.505 (1) (dm) of the statutes; relating to: the
2creation of an ethanol production incentive program.
Analysis by the Legislative Reference Bureau
This bill establishes an ethanol production incentive program to be
administered by the department of administration (DOA). Under the program,
ethanol producers may receive incentive payments for qualifying ethanol
production. In order to qualify for incentive payments, the ethanol must be produced
by a facility that was constructed on or after the effective date of the bill. In addition,
the ethanol must be at least 99% pure, be denatured and be subsequently blended
with gasoline. Finally, the ethanol must be fermented, distilled and dehydrated in
a certified production facility. In order to become certified, the production facility
must be located in this state and must file an application and a test claim with DOA.
In calculating the amount of an incentive payment to an ethanol producer, DOA
is required to allocate the lesser of $1,000,000 or the amount appropriated for
incentive payments in a fiscal year, among 3-month computation periods. If
sufficient funds are allocated to a computation period, DOA is required to pay
ethanol producers incentive payments of 20 cents for each gallon of qualifying
ethanol produced during the computation period. If the funds allocated to that
computation period are insufficient, the available funds are prorated among ethanol
producers on the basis of the number of gallons of qualifying ethanol produced during
that computation period. Any funds allocated to a computation period that are not
needed to make incentive payments to ethanol producers are used to increase the
total amount allocated for the next computation period in that fiscal year, if any.

The bill imposes certain limitations on the amount of incentive payments that
may be received under the program. The amount of the ethanol production incentive
payments paid to any ethanol producer, together with any ethanol production
incentive payments made to any person controlling, controlled by or under common
control with the ethanol producer, may not exceed, in any computation period, 20%
of the amount available for incentive payments during the computation period, or,
in any fiscal year, $300,000. DOA may require a producer to submit unqualified
opinions based on audits performed by an accountant before paying any claim for
incentive payments under the program. In addition, incentive payments may not be
made for any ethanol production facility more than 5 years after a payment was
made for ethanol produced at that facility.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB134, s. 1 1Section 1. 16.957 of the statutes is created to read:
AB134,2,3 216.957 Ethanol production incentive program. (1) Definitions. In this
3section:
AB134,2,54 (a) "Computation period" means a period of 3 consecutive months ending on
5March 31, June 30, September 30 or December 31.
AB134,2,146 (b) "Control" means possess, directly or indirectly, the power to direct or cause
7the direction of the management and policies of a person, whether that power is
8exercised through one or more intermediary entities, or alone, or in conjunction with,
9or by an agreement with, another person, and whether that power is established
10through majority ownership, minority ownership, voting of securities, common
11directors, common officers, common stockholders, voting trusts, holding trusts or
12affiliated companies or by contract or other direct or indirect means. "Control"
13includes owning, holding or controlling, directly or indirectly, at least 5% of the
14voting power in the election of directors of a corporation or association.
AB134,2,16 15(2) Creation. There is created an ethanol production incentive program to be
16funded under s. 20.505 (1) (dm) and administered by the department.
AB134,3,9
1(3) Certification of production facilities. No ethanol producer may
2participate in the ethanol incentive program, unless the production facility is
3certified by the department under this subsection. In order to have a production
4facility certified, the ethanol producer must submit an application and a test claim
5for the computation period immediately preceding the computation period in which
6the initial claim for an incentive payment is made. A test claim shall provide the
7same information as is required for a claim for payment under sub. (4). The
8department may not certify a production facility under this subsection unless the
9production facility is located in this state.
AB134,3,16 10(4) Submission of claims. In order to receive payments under the ethanol
11incentive program, an ethanol producer shall submit a claim to the department
12under this subsection. The claim shall include the name of the producer, the location
13of the production facility, the computation period for which the claim is submitted,
14the number of gallons of ethanol produced during the computation period that
15qualify for incentive payments under sub. (5), the form of organization of the
16producer and any other information which may be specified by the department.
AB134,3,19 17(5) Qualified ethanol production. In order for an ethanol producer to qualify
18for incentive payments for ethanol production under this section, the ethanol
19produced by that producer shall meet all of the following criteria:
AB134,3,2120 (a) The ethanol shall have been produced by a facility the construction of which
21was begun on or after the effective date of this paragraph .... [revisor inserts date].
AB134,3,2322 (b) The ethanol shall be fermented, distilled and dehydrated in a production
23facility certified under sub. (3).
AB134,3,2524 (c) The ethanol shall be at least 99% pure, be denatured and be subsequently
25blended with gasoline.
AB134,4,3
1(6) Calculation of incentive payments. Subject to sub. (7), incentive payments
2to ethanol producers for the production of ethanol that qualifies under sub. (5) shall
3be calculated as follows:
AB134,4,64 (a) In each fiscal year, the department shall allocate the lesser of $1,000,000
5or the amount appropriated under s. 20.505 (1) (dm) for that fiscal year, equally
6among the computation periods for that fiscal year.
AB134,4,177 (b) The department shall pay to each ethanol producer submitting a claim
8under sub. (4) an incentive payment of 20 cents for each gallon of ethanol that is
9produced during the computation period and that qualifies for incentive payments
10under sub. (5), if sufficient funds have been allocated to that computation period to
11pay all of these claims. If the funds allocated to the computation period are
12insufficient to pay each ethanol producer an incentive payment of 20 cents for each
13gallon of ethanol that is produced during the computation period and that qualifies
14for incentive payments under sub. (5), the department shall distribute the available
15funds to the ethanol producers that submitted claims in proportion to the number of
16gallons of ethanol produced by each of the ethanol producers during the computation
17period that qualify for incentive payments under sub. (5).
AB134,4,1918 (c) Any funds remaining after the application of par. (b) shall be used to increase
19the total amount allocated for the next computation period in that fiscal year, if any.
AB134,4,21 20(7) Limitations on incentive payments. Notwithstanding any other provision
21in this section:
AB134,4,2422 (a) The incentive payment paid to an ethanol producer, together with incentive
23payments paid to any person controlling, controlled by or under common control with
24the ethanol producer, may not exceed any of the following:
AB134,5,2
11. In any computation period, 20% of the funds available for incentive
2payments for that computation period.
AB134,5,33 2. In any fiscal year, $300,000.
AB134,5,84 (b) No incentive payments may be made to an ethanol producer for ethanol
5produced at an ethanol production facility certified under sub. (3) for a computation
6period that begins at least 5 years after the computation period for which the ethanol
7producer first received an incentive payment under this section for ethanol produced
8at that ethanol production facility.
AB134,5,16 9(8) Payment and verification of incentive payments. The department shall
10approve a claim submitted under sub. (4) and shall make the incentive payment
11calculated under sub. (6) within 30 days after receiving the claim, unless the
12department notifies the producer otherwise. The department shall verify the
13accuracy of the claims submitted by a producer. The department may require that
14the producer submit regular, unqualified opinions based on audits performed by an
15accountant certified under ch. 442 before paying any claim made under this section
16for incentive payments.
AB134, s. 2 17Section 2. 20.005 (3) (schedule) of the statutes: at the appropriate place, insert
18the following amounts for the purposes indicated: - See PDF for table PDF
AB134, s. 3 19Section 3. 20.505 (1) (dm) of the statutes is created to read:
AB134,6,3
120.505 (1) (dm) Ethanol production incentive program. The amounts in the
2schedule for making incentive payments under the ethanol production incentive
3program under s. 16.957.
AB134, s. 4 4Section 4. Effective date.
AB134,6,65 (1) This act takes effect on July 1, 1997, or on the 2nd day after publication of
6the 1997-98 biennial budget act, whichever is later.
AB134,6,77 (End)
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