SENATE FILE 164

BY  KIBBIE and HOUSER

A BILL FOR

An Act relating to motor fuel by providing for a biodiesel quality standard and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  Section 214A.2, subsection 4, paragraph b, subparagraph (2), Code 2011, is amended by striking the subparagraph.
   Sec. 2.  NEW SECTION.  214A.2C  Standard for diesel fuel —— biodiesel required.
   1.  A retail dealer shall not advertise for sale or sell diesel fuel in this state, unless it is biodiesel fuel designated as B-5 or higher as specified in section 214A.2.
   2.  Subsection 1 does not apply to diesel fuel used to power any of the following:
   a.  (1) A motor located at an electric generating plant regulated by the United States nuclear regulatory commission.
   (2)  This paragraph“a” is repealed thirty days after the United States nuclear regulatory commission approves the use of biodiesel fuel designated as B-5 or higher in motors located at electric generating plants that it regulates.
   b.  A railroad locomotive.
   c.  A vehicle used primarily on the grounds of a public airport.
   d.  A motor used to temporarily generate power due to peak demand for electricity or a disruption in the delivery of electricity or natural gas until the delivery of the electricity or natural gas may be resumed.
   3.  Subsection 1 does not apply during a period that the governor issues a biodiesel suspension order.
   a.  The biodiesel suspension order must include a determination by the governor that any of the following exists:
   (1)  A lack of infrastructure in this state necessary to support the retail sale of biodiesel fuel designated as B-5.
   (2)  A significant shortage of biodiesel fuel designated as B-5 in this state available for retail sale in this state.
   (3)  A systemic market change in the supplies or prices of biodiesel fuel designated B-5 will cause a material economic hardship to the state.
   b.  The biodiesel suspension order may reduce the biodiesel fuel designation provided in subsection 1 during the period of the suspension. The biodiesel suspension order may apply to the entire state or to specific counties named in the biodiesel suspension order.
   c.  The biodiesel suspension order shall take effect when published in the Iowa administrative bulletin unless the biodiesel suspension order specifies a later date. The biodiesel suspension order shall terminate on a date certain as specified in the biodiesel suspension order.
   Sec. 3.  EXISTING INVENTORIES OF DIESEL FUEL.
   1.
  a.  Notwithstanding section 214A.2C, diesel fuel inventories, stored at a retail motor fuel site as defined in section 214A.1, existing on the effective date of this Act, may continue to be sold and dispensed.
   b.  Paragraph “a” shall not apply once all diesel fuel inventories existing at a retail motor fuel site as defined in section 214A.1, on the effective date of this Act, have been sold or dispensed.
   2.  Nothing in this section authorizes a retail dealer to acquire diesel fuel other than biodiesel fuel designated B-5 or higher as provided in section 214A.2 on or after the effective date of this Act.
   Sec. 4.  RULES.  The department of agriculture and land stewardship shall adopt rules, to be effective September 1, 2012, as necessary to implement this Act.
   Sec. 5.  EFFECTIVE DATE.  This Act takes effect September 1, 2012, except for the provisions authorizing the department of agriculture and land stewardship to adopt rules required to implement the provisions of section 214A.2C, as enacted in this Act.
EXPLANATION
   This bill applies to the retail sale of biodiesel blended fuel as regulated by the department of agriculture and land stewardship under Code chapter 214A.
   The bill prohibits a retail dealer from advertising the sale or selling of diesel fuel unless it is biodiesel fuel and requires that all diesel fuel contain a minimum of 5 rather than 1 percent biodiesel. The bill provides for a number of exceptions, including for motors located at an electric generating plant regulated by the nuclear regulatory commission, locomotives, vehicles used primarily on the grounds of a public airport, and motors used to temporarily generate electricity.
   The bill allows the governor to issue a biodiesel suspension order based on a determination that there is not sufficient infrastructure in the state, there is a shortage of biodiesel fuel, or the standard will cause a material economic hardship to the state.
   The bill allows a retail dealer to sell remaining inventories of diesel fuel.
   The bill takes effect September 1, 2012, except for the provision requiring the department of agriculture and land stewardship to adopt rules which would take effect July 1.
   A person who violates a provision of Code chapter 214A is guilty of a serious misdemeanor with each day of a continuing violation consisting of a separate offense. The state may also proceed against a person who violates the Code chapter by bringing a civil enforcement action as a contested case proceeding under Code chapter 17A in lieu of a prosecution. A serious misdemeanor is punishable by confinement for no more than one year and a fine of at least $315 but not more than $1,875. The civil penalty shall be for at least $100 but not more than one $1,000 for each violation.