Nebraska producers discuss ethanol incentive funding

August 1, 2002

Ethanol production is growing so fast it may outpace a state tax break program designed to spur the industry.

There is enough funding available under the Nebraska Ethanol Development Act is for two-and-a-half new plants, according to the state's lawmakers.

However, 21 proposed ethanol projects have applied for the incentives with the state Department of Revenue. Not all those plants will be built but even if four qualify for the incentive program, it could be out of money in three years.

The program provides supplemental income to new plants during their first eight years of operation. It includes an 18 cent-per-gallon production incentive on plants that produce at least 100,000 gallons annually and are running by June 30, 2004.

State lawmakers met this month with representatives from nine ethanol plants to discuss ideas to increase funding for the program. Suggestions reportedly included asking for money from the corn and sorghum checkoffs or asking the state for more money. Producers also discussed the possibility of a distilled grains tax or a fertilizer tax. A deferred incentive program for new plants was another option on the table.

Gary Kuester, vice president and founding member of Husker Ag Processing, predicted about six or seven plants would meet the state's 2004 operational deadline and be on track to receive the incentives.

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