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PAG LIN 1 1 Section 1. Section 452A.2, Code 1997, is amended by adding 1 2 the following new subsections: 1 3 NEW SUBSECTION. 0A. "Alternative fuel" means biodiesel, 1 4 compressed natural gas, E85, liquefied natural gas, liquefied 1 5 petroleum gas, or M85. 1 6 NEW SUBSECTION. 1A. "Biodiesel" means a renewable 1 7 substitute for diesel fuel made from either plant oils or 1 8 animal fats, including soydiesel, the energy content of which 1 9 is approximately one hundred twenty-six thousand British 1 10 thermal units per gallon. 1 11 NEW SUBSECTION. 3A. "Compressed natural gas" means 1 12 natural gas, primarily methane, condensed under high pressure 1 13 and stored in specially designed storage tanks at between two 1 14 thousand and three thousand six hundred pounds per square 1 15 inch, the energy content of which is approximately one 1 16 thousand British thermal units per cubic foot. 1 17 NEW SUBSECTION. 7A. "E85" means a petroleum product that 1 18 is a blend of agriculturally derived denatured ethanol 1 19 distilled from cereal grains and gasoline that contains at 1 20 least eighty-five percent ethanol by volume, the energy 1 21 content of which is approximately eighty-two thousand British 1 22 thermal units per gallon. 1 23 NEW SUBSECTION. 16A. "Liquefied natural gas" means 1 24 natural gas, primarily methane, which has been condensed 1 25 through a cryogenic cooling process and is stored in specially 1 26 pressurized and insulated storage tanks, the energy content of 1 27 which is approximately sixty-nine thousand British thermal 1 28 units per gallon. 1 29 NEW SUBSECTION. 16B. "Liquefied petroleum gas" means a 1 30 product made of short hydrocarbon chains and containing 1 31 primarily propane and butane that is stored in special tanks 1 32 at moderate pressure, the energy content of which is 1 33 approximately eighty-six thousand British thermal units per 1 34 gallon. 1 35 NEW SUBSECTION. 16C. "M85" means a petroleum product that 2 1 is a liquid fuel blend of methanol and gasoline that contains 2 2 at least eighty-five percent methanol by volume, the energy 2 3 content of which is approximately sixty-five thousand British 2 4 thermal units per gallon. 2 5 Sec. 2. Section 452A.2, subsection 9, Code 1997, is 2 6 amended to read as follows: 2 7 9. "Ethanol blended gasoline" means motor fuel containing 2 8 at least ten percent, but less than eighty-five percent, 2 9 alcohol by volume, which is distilled from cereal grains. 2 10 Sec. 3. Section 452A.2, subsection 21, Code 1997, is 2 11 amended to read as follows: 2 12 21. "Special fuel" means fuel oils and all combustible 2 13 gases and liquids suitable for the generation of power for 2 14 propulsion of motor vehicles or turbine-powered aircraft, 2 15 including alternative fuel andincludesany other substance 2 16 used for that purpose, except that it does not include motor 2 17 fuel. Kerosene shall not be considered to be a special fuel, 2 18 unless blended with other special fuels for use in a motor 2 19 vehicle with a diesel engine. 2 20 Sec. 4. Section 452A.3, subsection 4, Code 1997, is 2 21 amended by striking the subsection and inserting in lieu 2 22 thereof the following: 2 23 4. For the privilege of operating motor vehicles in this 2 24 state, an excise tax, based upon the relative energy content 2 25 of the alternative fuel, is imposed upon the use of 2 26 alternative fuels. The tax rate for alternative fuels is as 2 27 follows: 2 28 a. Biodiesel is taxed at the rate of seventeen and one- 2 29 half cents per gallon. 2 30 b. Compressed natural gas is taxed at the rate of fourteen 2 31 cents per hundred cubic feet adjusted to a base temperature of 2 32 fourteen and seventy-three-hundredths pounds per square inch 2 33 absolute. 2 34 c. E85 is taxed at the rate of eleven and four-tenths 2 35 cents per gallon. 3 1 d. Liquefied natural gas is taxed at the rate of nine and 3 2 six-tenths cents per gallon. 3 3 e. Liquefied petroleum gas is taxed at the rate of twelve 3 4 cents per gallon. 3 5 f. M85 is taxed at the rate of nine cents per gallon. 3 6 EXPLANATION 3 7 This bill provides for a separate rate of excise tax for 3 8 the use of alternative fuels. Alternative fuel is defined in 3 9 the bill as biodiesel, compressed natural gas, E85, liquefied 3 10 natural gas, liquefied petroleum gas, or M85. 3 11 The excise tax is based upon the relative energy content of 3 12 the alternative fuel compared to motor fuel or special fuel. 3 13 The tax rates are 17 1/2 cents per gallon for biodiesel; 14 3 14 cents per 100 cubic feet for compressed natural gas; 11 4/10 3 15 cents per gallon for E85; 9 6/10 cents per gallon for 3 16 liquefied natural gas; 12 cents per gallon for liquefied 3 17 petroleum gas; and 9 cents per gallon for M85. 3 18 Currently motor fuel and special fuel is taxed at the rate 3 19 of 20 cents per gallon; motor fuel containing at least 10 3 20 percent alcohol distilled from cereal grains is taxed at the 3 21 rate of 19 cents per gallon; special fuel for diesel engines 3 22 of motor vehicles is taxed at the rate of 22 1/2 cents per 3 23 gallon; special fuel for aircraft is taxed at the rate of 3 24 three cents per gallon; and compressed natural gas used as 3 25 special fuel is taxed at the rate of 16 cents per hundred 3 26 cubic feet. 3 27 LSB 1245HC 77 3 28 mk/jw/5
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