Ethanol Production Incentive

North Dakota's ethanol production incentive program is administered by the Agricultural Product Utilization Division in the Department of Commerce.

The program is funded by the legislature on a biennium cycle and funding for the incentive amount for the period July 1, 2003, to June 30, 2005 is $0.40 per gallon. After June 30, 2005, the incentive amounts will be calculated based on the price per bushel of corn and the price per gallon of ethanol.

The program was changed substantially by SB 2222 of the 2003 legislative session. For existing ethanol plants, the incentive amount is $0.40 per gallon. An ethanol plant in operation before July 1, 1995, with production capacity of fewer than 15 million gallons of ethanol, may receive up to $600,000 per fiscal year. An ethanol plant that was in operation before July 1, 1995, and which produced 15 million or more gallons in the previous fiscal year, is eligible to receive up to $300,000 in production incentives per fiscal year. For new ethanol plants, the incentive amount is calculated based on the price per bushel of corn and the price per gallon of ethanol. Eligible facilities are defined as ethanol production plants constructed in North Dakota after July 31, 2003. For incentive amounts calculated based on the price per bushel of corn and the price per gallon of ethanol, the Agricultural Product Utilization Commission may not distribute more than $1,600,000 annually in total payments. An eligible facility may not receive payments under the program that exceed a total of $10,000,000. Change of ownership of an eligible facility does not affect the $10,000,000 cumulative total allowed.