LRB-1001/3
MDK:wlj&jlg:ch
1999 - 2000 LEGISLATURE
October 14, 1999 - Introduced by Representatives Hahn, Freese, Ott, Gronemus,
Ainsworth, Owens, Gunderson, Albers, Huebsch, Brandemuehl, Meyer,
Goetsch, Klusman, Musser, Seratti and Black, cosponsored by Senators
Baumgart, Rude, Drzewiecki and Schultz. Referred to Committee on
Agriculture.
AB537,1,3
1An Act to create 16.957 and 20.505 (1) (dm) of the statutes;
relating to: the
2creation of an ethanol production incentive program and making an
3appropriation.
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, denatured and subsequently blended with
gasoline. Also, 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 amount shown in the appropriation schedule for incentive
payments in a fiscal year, among three-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, $500,000. In addition, incentive payments may not be made for
any ethanol production facility more than five years after a payment was first made
for ethanol produced at that facility. Also, 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.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB537, s. 1
1Section
1. 16.957 of the statutes is created to read:
AB537,2,3
216.957 Ethanol production incentive program. (1) Definitions. In this
3section:
AB537,2,54
(a) "Computation period" means a period of 3 consecutive months ending on
5March 31, June 30, September 30 or December 31.
AB537,2,146
(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.
AB537,3,2
1(2) Creation. There is created an ethanol production incentive program to be
2funded under s. 20.505 (1) (dm) and administered by the department.
AB537,3,11
3(3) Certification of production facilities. No ethanol producer may
4participate in the ethanol incentive program, unless the production facility is
5certified by the department under this subsection. In order to have a production
6facility certified, the ethanol producer must submit an application and a test claim
7for the computation period immediately preceding the computation period in which
8the initial claim for an incentive payment is made. A test claim shall provide the
9same information as is required for a claim for payment under sub. (4). The
10department may not certify a production facility under this subsection unless the
11production facility is located in this state.
AB537,3,18
12(4) Submission of claims. In order to receive payments under the ethanol
13incentive program, an ethanol producer shall submit a claim to the department
14under this subsection. The claim shall include the name of the producer, the location
15of the production facility, the computation period for which the claim is submitted,
16the number of gallons of ethanol produced during the computation period that
17qualify for incentive payments under sub. (5), the form of organization of the
18producer and any other information which may be specified by the department.
AB537,3,21
19(5) Qualified ethanol production. In order for an ethanol producer to qualify
20for incentive payments for ethanol production under this section, the ethanol
21produced by that producer shall meet all of the following criteria:
AB537,3,2322
(a) The ethanol shall have been produced by a facility the construction of which
23was begun on or after the effective date of this paragraph .... [revisor inserts date].
AB537,3,2524
(b) The ethanol shall be fermented, distilled and dehydrated in a production
25facility certified under sub. (3).
AB537,4,2
1(c) The ethanol shall be at least 99% pure, denatured and subsequently blended
2with gasoline.
AB537,4,5
3(6) Calculation of incentive payments. Subject to sub. (7), incentive payments
4to ethanol producers for the production of ethanol that qualifies under sub. (5) shall
5be calculated as follows:
AB537,4,86
(a) In each fiscal year, the department shall allocate the amount shown in the
7schedule for the appropriation under s. 20.505 (1) (dm) for that fiscal year equally
8among the computation periods for that fiscal year.
AB537,4,199
(b) The department shall pay to each ethanol producer submitting a claim
10under sub. (4) an incentive payment of 20 cents for each gallon of ethanol that is
11produced during the computation period and that qualifies for incentive payments
12under sub. (5), if sufficient funds have been allocated to that computation period to
13pay all of these claims. If the funds allocated to the computation period are
14insufficient to pay each ethanol producer an incentive payment of 20 cents for each
15gallon of ethanol that is produced during the computation period and that qualifies
16for incentive payments under sub. (5), the department shall distribute the available
17funds to the ethanol producers that submitted claims in proportion to the number of
18gallons of ethanol produced by each of the ethanol producers during the computation
19period that qualify for incentive payments under sub. (5).
AB537,4,2120
(c) Any funds remaining after the application of par. (b) shall be used to increase
21the total amount allocated for the next computation period in that fiscal year, if any.
AB537,4,23
22(7) Limitations on incentive payments. Notwithstanding any other provision
23in this section:
AB537,5,3
1(a) The incentive payment paid to an ethanol producer, together with incentive
2payments paid to any person controlling, controlled by or under common control with
3the ethanol producer, may not exceed any of the following:
AB537,5,54
1. In any computation period, 20% of the funds available for incentive
5payments for that computation period.
AB537,5,66
2. In any fiscal year, $500,000.
AB537,5,117
(b) No incentive payments may be made to an ethanol producer for ethanol
8produced at an ethanol production facility certified under sub. (3) for a computation
9period that begins at least 5 years after the computation period for which the ethanol
10producer first received an incentive payment under this section for ethanol produced
11at that ethanol production facility.
AB537,5,19
12(8) Payment and verification of incentive payments. The department shall
13approve a claim submitted under sub. (4) and shall make the incentive payment
14calculated under sub. (6) within 30 days after receiving the claim, unless the
15department notifies the producer otherwise. The department shall verify the
16accuracy of the claims submitted by a producer. The department may require that
17the producer submit regular, unqualified opinions based on audits performed by an
18accountant certified under ch. 442 before paying any claim made under this section
19for incentive payments.
AB537,5,22
20(9) Sunset. The department may not make any incentive payment under sub.
21(8) unless the department receives, before June 30, 2003, an application under sub.
22(3) for certification of a production facility.
AB537, s. 2
23Section
2. 20.005 (3) (schedule) of the statutes: at the appropriate place, insert
24the following amounts for the purposes indicated:
-
See PDF for table 
AB537, s. 3
1Section
3. 20.505 (1) (dm) of the statutes is created to read:
AB537,6,42
20.505
(1) (dm)
Ethanol production incentive program. Biennially, the
3amounts in the schedule for making incentive payments under the ethanol
4production incentive program under s. 16.957.
AB537,6,76
(1)
This act takes effect on the 2nd day after publication of the 1999-2001
7biennial budget act, or on the day after publication, whichever is later.
