Bill proposes more state cash for ethanol producers
11:06 PM 12/04/03
Tom Sheehan State government reporter

Financial incentives to Wisconsin ethanol producers would increase from a pot of $1.9 million a year split among all producers to as much as $7 million total for each producer over the first eight years of production, under a bill introduced Thursday. <

The change would stabilize payments and make Wisconsin more competitive with other Midwestern states that have ethanol producers, said Kurt Simatic, an aide to Rep. Stephen Freese, R-Dodgeville, who introduced the bill. Sen. Sheila Harsdorf, R-River Falls, is the chief sponsor of the bill in the Senate. <

Three ethanol producers now split $1.9 million in payments from tribal gambling revenue, Simatic said. Without a change in state laws, the amount available to each producer will decrease as additional plants come on line, he said. Freese's bill would shift the source of those payments from tribal gambling to general taxes, which would ensure money is available to make all qualifying payments. <

Payments under the bill would range from $1.25 million for each producer during the first and second years of production to $500,000 in the seventh and eighth years, a Legislative Reference Bureau analysis of the bill shows. Current payments are based on 20 cents per gallon for up to 15 million gallons of the corn-derived fuel in the first year. <

Incentives are needed because ethanol plants are expensive to launch, and the current incentive structure isn't stable enough to help producers secure financing, Simatic said. <

Republican legislators had proposed increasing the amount of incentives available to $4 million a year during the 2003-05 state budget process, but Gov. Jim Doyle used his veto pen to reduce the amount back to its previous level. <

Freese's bill is scheduled for a public hearing before the Assembly Agriculture Committee at 10 a.m., Dec. 12 in Room 417 North of the state Capitol. The committee will hold a hearing at the same time on Assembly Bill 675, which would remove a requirement that automotive fuel containing ethanol be labeled as such.