Earlier this week, California Governor Jerry Brown signed AB 523 by Republican Assemblyman David G. Valadao into law. AB 523 modifies the existing California Ethanol Producer Incentive Program (CEPIP) to ensure that any funding provided for the program beyond its existing expiration of July 1, 2013, cannot be used for corn ethanol projects.

A previous version of the bill, introduced last year by Valadao, would have repealed CEPIP and made corn ethanol projects ineligible for any state funding. That version of the bill was defeated by the state assembly’s transportation committee.

Valadao, who is a dairyman himself, is running for Congress. Click here to read Progressive Dairyman's previous article about the race.

Currently, CEPIP provides an incentive of 25 cents per gallon of ethanol produced to all eligible California ethanol producers during months when the ethanol crush spread is less than 55 cents per gallon.

When the crush spread is greater than $1 per gallon, however, producers are required to pay back the incentive at a rate of 20 cents per gallon of ethanol produced.


CEPIP went into effect in January 2011.

—From Ethanol Producer Magazine