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Ethanol Production Incentive

Qualified ethanol producers are eligible for a production incentive payable from the Kansas Qualified Agricultural Ethyl Alcohol Producer Fund. An ethanol producer may collect $0.035 for each gallon sold to an alcohol blender that is in excess of the producer's base sales, up to 15,000,000 gallons, provided the producer was in production before July 1, 2001, and increases production capacity by 5,000,000 gallons over the producer's base sales. The same credit applies to a producer who began production on or after July 1, 2001, and before July 1, 2012, and who has sold at least 5,000,000 gallons to an alcohol blender. A producer who begins production of cellulosic ethanol on or after July 1, 2012, and who sells at least 5,000,000 gallons to a blender may receive $0.035 for each gallon sold, up to 15,000,000 gallons. Grain-based ethanol producers are not eligible for the cellulosic ethanol incentive. Producers must file for the incentive on a quarterly basis through the Kansas Department of Revenue. A producer may not collect the incentive for more than seven years. (Reference House Bill 2122, 2011, and Kansas Statutes 79-34,163)