Substitute for HB 2012 by Committee on Agriculture and Natural Resources - Establishing the ethanol grant program fund and transferring an amount of not to exceed $5,000,000 from the state general fund to the ethanol grant program fund each July 1 beginning in 2026.
The enactment of HB 2012 is expected to have notable implications for Kansas state tax law by introducing new credits that specifically target renewable fuel producers and retailers. The outline of a maximum total tax credit issuance of $5,000,000 per tax year suggests that while the initiative is significant, it remains limited in scale. The option for retail dealers and distributors to carry forward unused credits for up to five taxable years enhances its attractiveness, offering them greater flexibility in tax planning and benefits utilization.
House Bill 2012 introduces a significant financial incentive aimed at promoting the sale and distribution of higher ethanol blends in motor vehicle fuels. Specifically, the bill allows for a tax credit over the taxable years from 2026 to 2031 at a rate of $0.05 per gallon sold by retail dealers or distributors. This tax credit is designed to apply specifically to blends containing between 15% and 85% ethanol, thereby encouraging the use of renewable energy sources in fuel consumption. By incentivizing higher ethanol content, the bill aims to support state efforts towards cleaner energy and reduce reliance on fossil fuels.
Although the bill currently does not highlight any substantial contention within the legislative discussions or voting history, debates likely center around the allocation of tax credits and their impact on revenue. Supporters may argue that the bill could stimulate economic activity and promote agricultural interests through elevated demand for ethanol production. However, opponents might express concerns about the fiscal implications on state budgets and whether it effectively addresses environmental goals versus merely providing financial incentives without meaningful oversight.