House File 2735 - Introduced
HOUSE FILE
BY COMMITTEE ON AGRICULTURE
(SUCCESSOR TO HSB 587)
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to the formulation of motor fuel, by providing
2 for renewable fuel including ethanol blended fuel and
3 biodiesel blended fuel, providing incentives for
4 infrastructure used to store and dispense renewable fuel,
5 providing for income tax credits and excise taxes, providing
6 for penalties, and providing effective and applicability
7 dates, including retroactive applicability.
8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
9 TLSB 5701HV 81
10 da/je/5
PAG LIN
1 1 DIVISION I
1 2 ESTABLISHMENT OF RENEWABLE FUEL STANDARDS
1 3 Section 1. PETROLEUM REPLACEMENT GOAL. It is the goal of
1 4 this state that by January 1, 2025, ethanol and biodiesel will
1 5 replace twenty=five percent of all petroleum used in the
1 6 formulation of motor fuel.
1 7 Sec. 2. Section 214A.1, Code 2005, is amended by adding
1 8 the following new subsections:
1 9 NEW SUBSECTION. 0A. "Advertise" means to present a
1 10 commercial message in any medium, including but not limited to
1 11 print, radio, television, sign, display, label, tag, or
1 12 articulation.
1 13 NEW SUBSECTION. 1A. "Biodiesel" means a renewable fuel
1 14 comprised of mono=alkyl esters of long=chain fatty acids
1 15 derived from vegetable oils or animal fats, which meets the
1 16 standards provided in section 214A.2.
1 17 NEW SUBSECTION. 1B. "Biodiesel blended fuel" means a
1 18 blend of biodiesel with petroleum=based diesel fuel which
1 19 meets the standards, including separately the standard for its
1 20 biodiesel constituent, provided in section 214A.2.
1 21 NEW SUBSECTION. 1C. "Committee" means the renewable fuels
1 22 and coproducts advisory committee established pursuant to
1 23 section 159A.4.
1 24 NEW SUBSECTION. 1D. "Dealer" means a wholesale dealer or
1 25 retail dealer.
1 26 NEW SUBSECTION. 1E. "Diesel fuel" means any liquid, other
1 27 than gasoline, which is suitable for use as a fuel in a
1 28 diesel=powered highway vehicle or a diesel=powered train.
1 29 Diesel fuel includes a liquid product prepared, advertised,
1 30 offered for sale, or sold for use as, or commonly and
1 31 commercially used as, motor fuel for use in an internal
1 32 combustion engine and ignited by pressure without the presence
1 33 of an electric spark. Diesel fuel must meet the standards
1 34 provided in section 214A.2.
1 35 NEW SUBSECTION. 1F. "E=85 gasoline" means ethanol blended
2 1 gasoline formulated with a minimum percentage of between
2 2 seventy and eighty=five percent by volume of ethanol, if the
2 3 formulation meets the standards provided in section 214A.2.
2 4 NEW SUBSECTION. 1G. "Ethanol" means ethyl alcohol that is
2 5 to be blended with gasoline if it meets the standards provided
2 6 in section 214A.2.
2 7 NEW SUBSECTION. 1H. "Ethanol blended gasoline" means a
2 8 formulation of gasoline which is a liquid petroleum product
2 9 blended with ethanol, if the formulation meets the standards
2 10 provided in section 214A.2.
2 11 NEW SUBSECTION. 1I. "Gasoline" means any liquid product
2 12 prepared, advertised, offered for sale or sold for use as, or
2 13 commonly and commercially used as, motor fuel for use in a
2 14 spark=ignition, internal combustion engine, and which meets
2 15 the specifications provided in section 214A.2.
2 16 NEW SUBSECTION. 2A. "Motor fuel pump" means the same as
2 17 defined in section 214.1.
2 18 NEW SUBSECTION. 5A. "Renewable fuel" means a combustible
2 19 liquid derived from grain starch, oilseed, animal fat, or
2 20 other biomass; or produced from a biogas source, including any
2 21 nonfossilized decaying organic matter which is capable of
2 22 powering machinery, including but not limited to an engine or
2 23 power plant. Renewable fuel includes but is not limited to
2 24 ethanol blended gasoline, biodiesel, or biodiesel blended fuel
2 25 meeting the standards provided in section 214A.2.
2 26 NEW SUBSECTION. 5B. "Renewable fuel producer" means a
2 27 person engaged in the production of any of the following:
2 28 a. Ethanol for use as a distillate in ethanol blended
2 29 gasoline.
2 30 b. Biodiesel for use as a motor fuel or as a distillate in
2 31 biodiesel blended fuel.
2 32 Sec. 3. Section 214A.1, subsection 2, Code 2005, is
2 33 amended to read as follows:
2 34 2. "Motor vehicle fuel" means a substance or combination
2 35 of substances which is intended to be or is capable of being
3 1 used for the purpose of propelling or running by combustion
3 2 any of operating an internal combustion engine, including but
3 3 not limited to a motor vehicle, and is kept for sale or sold
3 4 for that purpose. The products commonly known as kerosene and
3 5 distillate or petroleum products of lower gravity (Baume
3 6 scale), when not used to propel a motor vehicle or for
3 7 compounding or combining with a motor vehicle fuel, are exempt
3 8 from this chapter except as provided in section 214A.2A.
3 9 Sec. 4. Section 214A.1, subsections 6 and 8, Code 2005,
3 10 are amended by striking the subsections and inserting in lieu
3 11 thereof the following:
3 12 6. "Retail dealer" means a person engaged in the business
3 13 of storing and dispensing motor fuel from a motor fuel pump
3 14 for sale on a retail basis.
3 15 8. "Wholesale dealer" means a person, other than a retail
3 16 dealer, who operates a place of business where motor fuel is
3 17 stored and dispensed for sale in this state, including a
3 18 permanent or mobile location.
3 19 Sec. 5. Section 214A.2, subsection 1, Code 2005, is
3 20 amended to read as follows:
3 21 1. The secretary department shall adopt rules pursuant to
3 22 chapter 17A for carrying out this chapter. The rules may
3 23 include, but are not limited to, specifications relating to
3 24 motor fuel or oxygenate octane enhancers, including but not
3 25 limited to renewable fuel such as ethanol blended gasoline,
3 26 biodiesel, biodiesel blended fuel, and motor fuel components
3 27 such as an oxygenate. In the interest of uniformity, the
3 28 secretary department shall adopt by reference or otherwise
3 29 other specifications relating to tests and standards for motor
3 30 fuel or oxygenate octane enhancers including renewable fuel
3 31 and motor fuel components, established by the United States
3 32 environmental protection agency or A.S.T.M. (American society
3 33 for testing and materials) international, unless the secretary
3 34 determines those specifications are inconsistent with this
3 35 chapter or are not appropriate to the conditions which exist
4 1 in this state. In adopting standards for a renewable fuel,
4 2 the department shall consult with the committee.
4 3 Sec. 6. Section 214A.2, Code 2005, is amended by adding
4 4 the following new subsection:
4 5 NEW SUBSECTION. 2A. a. For motor fuel advertised for
4 6 sale or sold as gasoline by a dealer, the motor fuel must meet
4 7 registration requirements for that type of motor fuel and its
4 8 additives established by the United States environmental
4 9 protection agency including as provided under 42 U.S.C. }
4 10 7545.
4 11 b. If the motor fuel is advertised for sale or sold as
4 12 ethanol blended gasoline, the motor fuel must comply with
4 13 departmental standards which shall comply with specifications
4 14 for ethanol blended gasoline adopted by A.S.T.M.
4 15 international. For ethanol blended gasoline all of the
4 16 following shall apply:
4 17 (1) Ethanol must be agriculturally derived, having at
4 18 least one hundred ninety proof, be denatured as required by
4 19 federal law including 27 C.F.R., pts. 20 and 21, and conform
4 20 to A.S.T.M. international specification D 4806=95b.
4 21 (2) For ethanol blended gasoline other than E=85 gasoline,
4 22 at least ten percent of the gasoline by volume must be
4 23 ethanol.
4 24 (3) For E=85 gasoline all of the following must apply:
4 25 (a) From the first day of April until the last day of
4 26 October, at least eighty=five percent of the gasoline by
4 27 volume must be ethanol.
4 28 (b) From the first day of November until the last day of
4 29 March, at least seventy percent of the gasoline by volume must
4 30 be ethanol.
4 31 (4) In calculating the percentage of ethanol required for
4 32 the formulation of ethanol blended gasoline, a percentage of a
4 33 denaturant or contaminants permitted in the ethanol blended
4 34 gasoline may be excluded as provided by rules adopted by the
4 35 department.
5 1 Sec. 7. Section 214A.2, subsection 3, Code 2005, is
5 2 amended by striking the subsection and inserting in lieu
5 3 thereof the following:
5 4 3. a. For motor fuel advertised for sale or sold as
5 5 biodiesel or biodiesel blended fuel by a dealer, the motor
5 6 fuel must meet registration requirements for that type of
5 7 motor fuel and its additives established by the United States
5 8 environmental protection agency including as provided under 42
5 9 U.S.C. } 7545.
5 10 b. The motor fuel must comply with departmental standards
5 11 which shall comply with specifications adopted by A.S.T.M.
5 12 international for biodiesel or biodiesel blended fuel.
5 13 (1) Biodiesel must conform to A.S.T.M. international
5 14 specification D 6751.
5 15 (2) At least one percent of biodiesel blended fuel by
5 16 volume must be biodiesel.
5 17 (3) The biodiesel may be blended with diesel fuel whose
5 18 sulfur, aromatic, lubricity, and cetane levels are outside
5 19 A.S.T.M. international specification D 975 Grades 1=D, 2=D,
5 20 and low sulfur 1=D and 2=D, provided that the finished
5 21 biodiesel blended fuel meets its applicable A.S.T.M.
5 22 international specifications for these properties.
5 23 Sec. 8. Section 214A.2A, Code 2005, is amended to read as
5 24 follows:
5 25 214A.2A KEROSENE LABELING.
5 26 1. Fuel which is sold or is kept, offered, or exposed for
5 27 sale as kerosene shall be labeled as kerosene. The label
5 28 shall include the word "kerosene" and a designation as either
5 29 "K1" or "K2", and shall indicate that the kerosene is in
5 30 compliance with the standard specification adopted by the
5 31 A.S.T.M. in international specification D=3699 (1982).
5 32 2. A product commonly known as kerosene and a distillate
5 33 or a petroleum product of lower gravity (Baume scale), when
5 34 not used to propel a motor vehicle or for compounding or
5 35 combining with a motor fuel, are exempt from this chapter
6 1 except as provided in this section.
6 2 Sec. 9. Section 214A.3, Code 2005, is amended by striking
6 3 the section and inserting in lieu thereof the following:
6 4 214A.3 ADVERTISING.
6 5 1. For all motor fuel, a person shall not knowingly do any
6 6 of the following:
6 7 a. Advertise the sale of any motor fuel which does not
6 8 meet the standards provided in section 214A.2.
6 9 b. Falsely advertise the quality or kind of any motor fuel
6 10 or a component of motor fuel.
6 11 c. Add a coloring matter to the motor fuel which misleads
6 12 a person who is purchasing the motor fuel about the quality of
6 13 the motor fuel.
6 14 2. For a renewable fuel, all of the following applies:
6 15 a. A person shall not knowingly falsely advertise that a
6 16 motor fuel is a renewable fuel or is not a renewable fuel.
6 17 b. (1) Ethanol blended gasoline sold by a dealer shall be
6 18 designated E=xx where "xx" is the volume percent of ethanol in
6 19 the ethanol blended gasoline. A person shall not knowingly
6 20 falsely advertise ethanol blended gasoline by using an
6 21 inaccurate designation in violation of this subparagraph.
6 22 (2) Biodiesel blended fuel shall be designated B=xx where
6 23 "xx" is the volume percent of biodiesel in the biodiesel
6 24 blended fuel. A person shall not knowingly falsely advertise
6 25 biodiesel blended fuel by using an inaccurate designation in
6 26 violation of this subparagraph.
6 27 Sec. 10. Section 214A.8, Code 2005, is amended to read as
6 28 follows:
6 29 214A.8 PROHIBITION.
6 30 A retail or wholesale dealer defined in this chapter shall
6 31 not knowingly sell any motor vehicle fuel or an oxygenate
6 32 octane enhancer in the state that fails to meet applicable
6 33 standards and specifications set out in this chapter as
6 34 provided in section 214A.2.
6 35 Sec. 11. Section 214A.11, Code 2005, is amended to read as
7 1 follows:
7 2 214A.11 VIOLATIONS PENALTY.
7 3 Any A person violating the provisions who knowingly
7 4 violates a provision of this chapter shall be is guilty of a
7 5 simple serious misdemeanor.
7 6 DIVISION II
7 7 RENEWABLE FUEL INFRASTRUCTURE
7 8 Sec. 12. Section 323A.1, Code 2005, is amended by adding
7 9 the following new subsections:
7 10 NEW SUBSECTION. 0A. "E=85 gasoline" means the same as
7 11 defined in section 214A.1.
7 12 NEW SUBSECTION. 0B. "Ethanol blended gasoline" means the
7 13 same as defined in section 214A.1.
7 14 Sec. 13. Section 323A.1, subsection 4, Code 2005, is
7 15 amended to read as follows:
7 16 4. "Motor fuel" means gasoline or diesel fuel the same as
7 17 motor fuel as defined in section 214A.1, which is of a type
7 18 distributed for use as a fuel in self=propelled vehicles
7 19 designed primarily for use on public streets, roads, and
7 20 highways.
7 21 Sec. 14. Section 323A.2, subsection 1, paragraph a, Code
7 22 2005, is amended to read as follows:
7 23 a. At least forty=eight hours prior to entering into an
7 24 agreement to purchase motor fuel from another source, the
7 25 franchisee has requested delivery of motor fuel from the
7 26 franchisor and the requested motor fuel has not been delivered
7 27 and the franchisor has given the franchisee notice that the
7 28 franchisor is unable to provide the requested motor fuel, or
7 29 prior to entering into an agreement the franchisor has stated
7 30 to the franchisee that the requested motor fuel will not be
7 31 delivered. The request to the franchisor for delivery shall
7 32 be for a type of fuel normally provided by the franchisor to
7 33 the franchisee and for a quantity of fuel not exceeding the
7 34 average amount sold by the franchisee in one week, based upon
7 35 average weekly sales in the three months preceding the
8 1 request, except that this provision shall not restrict a
8 2 franchisee from purchasing ethanol blended gasoline from a
8 3 source other than the franchisor or limit the quantity to be
8 4 purchased when the franchisor does not normally supply the
8 5 franchisee with ethanol blended gasoline. A franchisee may
8 6 also purchase E=85 gasoline as provided in section 323A.2A.
8 7 Sec. 15. NEW SECTION. 323A.2A PURCHASE OF E=85 GASOLINE
8 8 FROM OTHER SOURCE.
8 9 1. a. When on and after the effective date of this
8 10 section of this Act, a franchise is entered into or renewed,
8 11 the franchisor shall provide for the delivery of volumes of E=
8 12 85 gasoline at times demanded by the franchisee or shall allow
8 13 the franchisee to purchase those volumes of E=85 gasoline at
8 14 those times from another source.
8 15 b. If a franchise is in effect on the effective date of
8 16 this section of this Act and does not have an expiration date,
8 17 the franchisor shall provide for the delivery of volumes of E=
8 18 85 gasoline at times demanded by the franchisee or shall allow
8 19 the franchisee to purchase those volumes of E=85 gasoline at
8 20 those times from another source.
8 21 2. If the franchisee sells E=85 gasoline delivered from a
8 22 source other than the franchisor, the franchisee shall
8 23 prominently post a sign disclosing this fact to the public on
8 24 each motor fuel pump used for dispensing the E=85 gasoline.
8 25 The size of the sign shall not be less than eight inches by
8 26 ten inches and the letters on the sign shall be at least three
8 27 inches in height.
8 28 3. A franchisee who sells E=85 gasoline delivered from a
8 29 source other than the franchisor shall also fully indemnify
8 30 the franchisor against any claims asserted by a user on which
8 31 the claimant prevails and in which the court determines that
8 32 E=85 gasoline not acquired from the franchisor was the
8 33 proximate cause of the injury.
8 34 4. a. A purchase of E=85 gasoline in accordance with this
8 35 section is not good cause for the termination of a franchise.
9 1 b. A term of a franchise that is inconsistent with this
9 2 section is void and unenforceable.
9 3 Sec. 16. Section 455G.2, Code Supplement 2005, is amended
9 4 by adding the following new subsections:
9 5 NEW SUBSECTION. 3A. "Biodiesel" and "biodiesel blended
9 6 fuel" mean the same as defined in section 214A.1.
9 7 NEW SUBSECTION. 8A. "Department" means the department of
9 8 natural resources created in section 455A.2.
9 9 NEW SUBSECTION. 10A. "E=85 gasoline", "gasoline", "motor
9 10 fuel", "motor fuel pump", "retail dealer", and "service
9 11 station" mean the same as defined in section 214A.1.
9 12 NEW SUBSECTION. 13A. "Infrastructure board" means the
9 13 renewable fuel infrastructure board as created in section
9 14 455G.33.
9 15 NEW SUBSECTION. 13B. "Infrastructure fund" means the
9 16 renewable fuel infrastructure fund as created in section
9 17 455G.32.
9 18 NEW SUBSECTION. 15A. "Motor fuel storage and dispensing
9 19 infrastructure" or "infrastructure" means a tank and motor
9 20 fuel pumps necessary to keep and dispense motor fuel at a
9 21 service station, including but not limited to all associated
9 22 equipment, dispensers, pumps, pipes, hoses, tubes, lines,
9 23 fittings, valves, filters, seals, and covers.
9 24 NEW SUBSECTION. 21A. "Terminal" means a storage and
9 25 distribution facility for motor fuel or a blend stock such as
9 26 ethanol or biodiesel that is supplied to a motor vehicle,
9 27 pipeline, or a marine vessel and from which the motor fuel or
9 28 blend stock may be removed at a rack. "Terminal" does not
9 29 include any of the following:
9 30 a. A service station.
9 31 b. A facility at which motor fuel or special fuel, or
9 32 blend stocks are used in the manufacture of products other
9 33 than motor fuel and from which no motor fuel or special fuel
9 34 is removed.
9 35 NEW SUBSECTION. 21B. "Terminal operator" means a person
10 1 who has responsibility for, or physical control over, the
10 2 operation of a terminal, including by ownership, contractual
10 3 agreement, or appointment.
10 4 SUBCHAPTER III
10 5 RENEWABLE FUEL INFRASTRUCTURE
10 6 Sec. 17. NEW SECTION. 455G.31 E=85 GASOLINE STORAGE AND
10 7 DISPENSING INFRASTRUCTURE.
10 8 1. As used in this section, "gasoline storage and
10 9 dispensing infrastructure" means any storage tank located
10 10 below ground or above ground and any associated equipment
10 11 including but not limited to a pipe, hose, connection, fitting
10 12 seal, or pump, which is used to store, measure, and dispense
10 13 gasoline by a retail dealer as defined in section 214A.1.
10 14 2. A retail dealer may use gasoline storage and dispensing
10 15 infrastructure to store and dispense E=85 gasoline, if all of
10 16 the following apply:
10 17 a. For gasoline storage and dispensing infrastructure
10 18 other than the dispenser, the department must determine that
10 19 it is compatible with E=85 gasoline.
10 20 b. For a dispenser, the manufacturer must state all of the
10 21 following:
10 22 (1) That the equipment is, in the opinion of the
10 23 manufacturer, not incompatible with E=85 gasoline.
10 24 (2) The manufacturer has initiated the process of applying
10 25 to an independent testing laboratory for listing of the
10 26 equipment for use in dispensing E=85 gasoline.
10 27 A manufacturer's statement must include a written
10 28 statement, with reference to a particular type and model of
10 29 equipment, signed by a responsible official on behalf of the
10 30 manufacturer, provided either to the retail dealer using the
10 31 gasoline storage and dispensing infrastructure or to the
10 32 department of natural resources or the department of public
10 33 safety. If the written statement is provided to a retail
10 34 dealer, the statement shall be retained in the files on the
10 35 premises of the retail dealer and shall be available to
11 1 personnel of the department of natural resources or the
11 2 department of public safety upon request.
11 3 3. This section is repealed July 1, 2009.
11 4 Sec. 18. NEW SECTION. 455G.32 RENEWABLE FUEL
11 5 INFRASTRUCTURE FUND.
11 6 1. A renewable fuel infrastructure fund is created in the
11 7 state treasury under the control of the department. The fund
11 8 is separate from the general fund of the state.
11 9 2. Moneys in the renewable fuel infrastructure fund are
11 10 appropriated to the department exclusively to support the
11 11 renewable fuel infrastructure programs as provided in sections
11 12 455G.34 and 455G.35. Moneys in the fund shall be allocated
11 13 equitably between supporting infrastructure relating to the
11 14 storage and dispensing of E=85 gasoline and supporting
11 15 infrastructure relating to the storage and dispensing of
11 16 biodiesel or biodiesel blended fuel.
11 17 a. Of the unobligated and unencumbered balance in the fund
11 18 on July 1 of a fiscal year and moneys appropriated to the fund
11 19 for that fiscal year, not more than one percent of that amount
11 20 shall be used to pay any administrative expenses necessary to
11 21 administer the program.
11 22 b. Moneys in the fund shall not be transferred, used,
11 23 obligated, appropriated, or otherwise encumbered except as
11 24 necessary to administer the program.
11 25 3. a. Payments of interest, repayments of moneys loaned,
11 26 and the recaptures of moneys awarded pursuant to the program
11 27 shall be deposited in the renewable fuel infrastructure fund.
11 28 b. Notwithstanding section 8.33, any unexpended balance in
11 29 the fund at the end of the fiscal year shall be retained in
11 30 the fund.
11 31 c. Notwithstanding section 12C.7, subsection 2, interest,
11 32 earnings on investments, or time deposits of the moneys in the
11 33 fund shall be credited to the fund.
11 34 Sec. 19. NEW SECTION. 455G.33 RENEWABLE FUEL
11 35 INFRASTRUCTURE BOARD.
12 1 A renewable fuel infrastructure board is established within
12 2 the department.
12 3 1. The department shall provide the infrastructure board
12 4 with necessary facilities, items, and clerical support. The
12 5 department shall perform administrative functions necessary
12 6 for the management of the infrastructure board, the renewable
12 7 fuel infrastructure fund created in section 455G.32, and the
12 8 renewable fuel infrastructure programs as provided in sections
12 9 455G.34 and 455G.35, all under the direction of the
12 10 infrastructure board.
12 11 2. The infrastructure board shall be composed of nine
12 12 members who shall be appointed by the governor as follows:
12 13 a. One person representing insurers who is knowledgeable
12 14 about issues relating to underground storage tanks.
12 15 b. Eight persons based on nominations made by the titular
12 16 heads of all of the following:
12 17 (1) The agribusiness association of Iowa.
12 18 (2) The Iowa corn growers association.
12 19 (3) The Iowa farm bureau federation.
12 20 (4) The Iowa motor truck association.
12 21 (5) The Iowa soybean association.
12 22 (6) The petroleum marketers and convenience stores of
12 23 Iowa.
12 24 (7) The Iowa petroleum equipment contractors association.
12 25 (8) The Iowa renewable fuels association.
12 26 3. Appointments of voting members to the infrastructure
12 27 board are subject to the requirements of sections 69.16 and
12 28 69.16A. In addition, the appointments shall be geographically
12 29 balanced. The governor's appointees shall be confirmed by the
12 30 senate, pursuant to section 2.32.
12 31 4. The members of the infrastructure board shall serve
12 32 five=year terms beginning and ending as provided in section
12 33 69.19. However, the governor shall appoint initial members to
12 34 serve for less than five years to ensure members serve
12 35 staggered terms. A member is eligible for reappointment. A
13 1 vacancy on the board shall be filled for the unexpired portion
13 2 of the regular term in the same manner as regular appointments
13 3 are made.
13 4 5. The infrastructure board shall elect a chairperson from
13 5 among its members each year on a rotating basis as provided by
13 6 the infrastructure board. The infrastructure board shall meet
13 7 on a regular basis and at the call of the chairperson or upon
13 8 the written request to the chairperson of five or more
13 9 members.
13 10 6. Members of the infrastructure board are not entitled to
13 11 receive compensation but shall receive reimbursement of
13 12 expenses from the department as provided in section 7E.6.
13 13 7. Five members of the infrastructure board constitute a
13 14 quorum and the affirmative vote of a majority of the members
13 15 present is necessary for any substantive action to be taken by
13 16 the infrastructure board. The majority shall not include any
13 17 member who has a conflict of interest and a statement by a
13 18 member that the member has a conflict of interest is
13 19 conclusive for this purpose. A vacancy in the membership does
13 20 not impair the duties of the infrastructure board.
13 21 Sec. 20. NEW SECTION. 455G.34 RENEWABLE FUEL
13 22 INFRASTRUCTURE PROGRAM FOR SERVICE STATIONS.
13 23 A renewable fuel infrastructure program is established in
13 24 the department under the direction of the renewable fuel
13 25 infrastructure board created pursuant to section 455G.33.
13 26 1. The purpose of the program is to improve a service
13 27 station by installing, replacing, or converting motor fuel
13 28 storage and dispensing infrastructure. The infrastructure
13 29 must be designed and shall be used exclusively to store and
13 30 dispense E=85 gasoline, biodiesel, or biodiesel blended fuel
13 31 on the premises of service stations operated by retail
13 32 dealers.
13 33 2. The department shall award financial incentives to a
13 34 person participating in the program as directed by the
13 35 infrastructure board. The infrastructure board shall approve
14 1 the cost=share agreements executed by the department and
14 2 persons that the infrastructure board determines are eligible
14 3 as provided in this section, according to terms and conditions
14 4 required by the infrastructure board. The infrastructure
14 5 board shall determine the amount of the financial incentives
14 6 to be awarded to a person participating in the program. In
14 7 order to be eligible to participate in the program all of the
14 8 following must apply:
14 9 a. The person must be an owner or operator of the service
14 10 station.
14 11 b. The person must apply to the department in a manner and
14 12 according to procedures required by the infrastructure board.
14 13 The application must contain all information required by the
14 14 infrastructure board and shall at least include all of the
14 15 following:
14 16 (1) The name of the person and the address of the service
14 17 station to be improved.
14 18 (2) A detailed description of the infrastructure to be
14 19 installed, replaced, or converted, including but not limited
14 20 to the model number of each installed, replaced, or converted
14 21 motor fuel storage tank if available.
14 22 (3) A statement describing how the service station is to
14 23 be improved, the total estimated cost of the planned
14 24 improvement, and the date when the infrastructure will be
14 25 first used to store and dispense the renewable fuel.
14 26 (4) A statement certifying that the infrastructure shall
14 27 not be used to store or dispense motor fuel other than E=85
14 28 gasoline, biodiesel, or biodiesel blended fuel, unless granted
14 29 a waiver by the infrastructure board pursuant to this section.
14 30 3. A service station which is improved using financial
14 31 incentives must comply with federal and state standards
14 32 governing new or upgraded motor fuel storage tanks used to
14 33 store and dispense the renewable fuel. A site classified as a
14 34 no further action site pursuant to a certificate issued by the
14 35 department under section 455B.474 shall retain its
15 1 classification following modifications necessary to store and
15 2 dispense the renewable fuel and the owner or operator shall
15 3 not be required to perform a new site assessment unless the
15 4 site causes a clear, present, and impending danger to the
15 5 public health or the environment.
15 6 4. a. For the period beginning July 1, 2006, and ending
15 7 June 30, 2009, the department upon direction of the
15 8 infrastructure board shall distribute financial incentives to
15 9 improve service stations located within each of the six
15 10 geographic regions described in section 173.4A.
15 11 b. The infrastructure board shall not approve a cost=
15 12 share agreement which awards financial incentives to install,
15 13 replace, or convert infrastructure associated with more than
15 14 one motor fuel storage tank or motor fuel pump located at the
15 15 same service station.
15 16 5. An award of financial incentives to a participating
15 17 person shall be in the form of an interest=free loan.
15 18 a. In order to participate in the program an eligible
15 19 person must execute a cost=share agreement with the department
15 20 as approved by the infrastructure board in which the person
15 21 contributes a percentage of the total costs related to
15 22 improving the service station. The financial incentives
15 23 awarded to the participating person shall not exceed thirty
15 24 percent of the estimated cost of making the improvements or
15 25 thirty percent of the actual cost of making the improvements,
15 26 whichever is less.
15 27 b. The infrastructure board shall not approve an award of
15 28 more than thirty thousand dollars to improve a service
15 29 station. The infrastructure board may approve multiple awards
15 30 to make improvements to a service station so long as the total
15 31 amount of the awards in all years is not more than thirty
15 32 thousand dollars.
15 33 c. A participating person shall not use the infrastructure
15 34 to store or dispense motor fuel other than E=85 gasoline,
15 35 biodiesel, or biodiesel blended fuel unless one of the
16 1 following applies:
16 2 (1) The participating person is granted a waiver by the
16 3 infrastructure board. The participating person shall store or
16 4 dispense the motor fuel according to the terms and conditions
16 5 of the waiver.
16 6 (2) The infrastructure fund is immediately repaid the
16 7 total amount of moneys awarded to the participating person
16 8 together with a monetary penalty equal to twenty=five percent
16 9 of that awarded amount.
16 10 d. A participating person who acts in violation of an
16 11 agreement executed with the department pursuant to this
16 12 section is subject to a civil penalty of not more than one
16 13 thousand dollars a day for each day of the violation. The
16 14 civil penalty shall be deposited into the general fund of the
16 15 state.
16 16 Sec. 21. NEW SECTION. 455G.35 RENEWABLE FUEL
16 17 INFRASTRUCTURE PROGRAM FOR BIODIESEL TERMINAL FACILITIES.
16 18 The department, under the direction of the renewable fuel
16 19 infrastructure board created in section 455G.33, and in
16 20 cooperation with the Iowa comprehensive petroleum underground
16 21 storage tank fund board, shall establish and administer a
16 22 renewable fuel infrastructure program for terminal facilities
16 23 that store and dispense biodiesel or biodiesel blended fuel.
16 24 The infrastructure must be designed and shall be used
16 25 exclusively to store and distribute biodiesel or biodiesel
16 26 blended fuel. The department as directed by the
16 27 infrastructure board shall provide a cost=share program for
16 28 financial incentives.
16 29 1. To all extent practicable, the program shall be
16 30 administered in consultation with the department of economic
16 31 development when that department administers its cost=share
16 32 program pursuant to section 15.401.
16 33 2. The department of natural resources shall award
16 34 financial incentives to a terminal operator participating in
16 35 the program as directed by the infrastructure board. In order
17 1 to be eligible to participate in the program, the terminal
17 2 operator must apply to the department in a manner and
17 3 according to procedures required by the infrastructure board.
17 4 The application must contain information required by the
17 5 infrastructure board and shall at least include all of the
17 6 following:
17 7 a. The name of the terminal operator and the address of
17 8 the terminal to be improved.
17 9 b. A detailed description of the infrastructure to be
17 10 installed, replaced, or converted.
17 11 c. A statement describing how the terminal is to be
17 12 improved, the total estimated cost of the planned improvement,
17 13 and the date when the infrastructure will be first used to
17 14 store and distribute biodiesel or biodiesel blended fuel.
17 15 d. A statement certifying that the infrastructure shall
17 16 not be used to store or dispense motor fuel other than
17 17 biodiesel or biodiesel blended fuel, unless granted a waiver
17 18 by the infrastructure board pursuant to this section.
17 19 3. The department's award of financial incentives to a
17 20 participating terminal operator shall be in the form of an
17 21 interest=free loan. In order to participate in the program,
17 22 an eligible terminal operator must execute a cost=share
17 23 agreement with the department in which the terminal operator
17 24 contributes a percentage of the total costs related to
17 25 improving the terminal. The financial incentives awarded to
17 26 the participating terminal operator shall not exceed the
17 27 estimated cost of making the improvements or the actual cost
17 28 of making the improvements, whichever is less.
17 29 4. A participating terminal operator shall not use the
17 30 infrastructure to store or dispense motor fuel other than
17 31 biodiesel or biodiesel blended fuel, unless one of the
17 32 following applies:
17 33 a. The participating terminal operator is granted a waiver
17 34 by the infrastructure board. The participating terminal
17 35 operator shall store or dispense the motor fuel according to
18 1 the terms and conditions of the waiver.
18 2 b. The infrastructure fund is immediately repaid the total
18 3 amount of moneys awarded to the participating terminal
18 4 operator together with a monetary penalty equal to twenty=five
18 5 percent of that awarded amount.
18 6 c. A participating terminal operator who acts in violation
18 7 of an agreement executed with the department pursuant to this
18 8 section is subject to a civil penalty of not more than one
18 9 thousand dollars a day for each day of the violation. The
18 10 civil penalty shall be deposited into the general fund of the
18 11 state.
18 12 Sec. 22. EFFECTIVE DATE.
18 13 1. The sections of this Act amending sections 323A.1 and
18 14 323A.2, being deemed of immediate importance, take effect upon
18 15 enactment.
18 16 2. Section 323A.2A, as enacted in this Act, being deemed
18 17 of immediate importance, takes effect upon enactment.
18 18 DIVISION III
18 19 RENEWABLE FUEL INCOME TAX CREDIT PROVISIONS
18 20 Sec. 23. Section 422.11C, subsection 1, paragraphs a
18 21 through g, Code 2005, are amended by striking the paragraphs
18 22 and inserting in lieu thereof the following:
18 23 a. "E=85 gasoline", "ethanol blended gasoline",
18 24 "gasoline", and "retail dealer" mean the same as defined in
18 25 section 214A.1.
18 26 b. "Motor fuel pump" means the same as motor vehicle fuel
18 27 pump as defined in section 214.1.
18 28 c. "Sell" means to sell on a retail basis.
18 29 d. "Service station" means each geographic location in
18 30 this state where a retail dealer sells and dispenses motor
18 31 fuel on a retail basis.
18 32 e. "Tax credit" means the designated ethanol blended
18 33 gasoline tax credit as provided in this section.
18 34 Sec. 24. Section 422.11C, subsection 2, paragraph b, Code
18 35 2005, is amended to read as follows:
19 1 b. The taxpayer operates at least one service station at
19 2 which more than sixty percent of the total gallons of gasoline
19 3 sold and dispensed through one or more metered motor fuel
19 4 pumps by the taxpayer in the tax year is ethanol blended
19 5 gasoline.
19 6 Sec. 25. Section 422.11C, subsection 3, Code 2005, is
19 7 amended to read as follows:
19 8 3. The tax credit shall be calculated separately for each
19 9 service station site operated by the taxpayer. The amount of
19 10 the tax credit for each eligible service station is two and
19 11 one=half cents multiplied by the total number of gallons of
19 12 ethanol blended gasoline sold and dispensed through all
19 13 metered motor fuel pumps located at that service station
19 14 during the tax year in excess of sixty percent of all gasoline
19 15 sold and dispensed through metered motor fuel pumps at that
19 16 service station during the tax year.
19 17 3A. A taxpayer is not eligible to claim a designated
19 18 ethanol blended gasoline tax credit as provided in this
19 19 section, if the taxpayer claims any of the following:
19 20 a. An ethanol promotion tax credit as provided in section
19 21 422.11N or 422.33.
19 22 b. An E=85 gasoline promotion tax credit as provided in
19 23 section 422.11O or 422.33 for the same gallons of ethanol
19 24 blended gasoline.
19 25 Sec. 26. Section 422.11C, Code 2005, is amended by adding
19 26 the following new subsection:
19 27 NEW SUBSECTION. 6. This section is repealed on January 1,
19 28 2007.
19 29 Sec. 27. NEW SECTION. 422.11N ETHANOL PROMOTION TAX
19 30 CREDIT.
19 31 1. As used in this section, unless the context otherwise
19 32 requires:
19 33 a. "E=85 gasoline", "ethanol", "gasoline", "motor fuel
19 34 pump", and "retail dealer" mean the same as defined in section
19 35 214A.1.
20 1 b. "Sell" means to sell on a retail basis.
20 2 c. "Tax credit" means the ethanol promotion tax credit as
20 3 provided in this section.
20 4 2. The taxes imposed under this division, less the credits
20 5 allowed under sections 422.12 and 422.12B, shall be reduced by
20 6 an ethanol promotion tax credit for each tax year that the
20 7 taxpayer is eligible to claim the tax credit under this
20 8 section. In order to be eligible, all of the following must
20 9 apply:
20 10 a. The taxpayer is a retail dealer who sells and dispenses
20 11 E=85 gasoline through a motor fuel pump in the tax year in
20 12 which the tax credit is claimed.
20 13 b. The retail dealer complies with requirements of the
20 14 department to administer this section.
20 15 3. In order to receive the tax credit, the retail dealer
20 16 must calculate all of the following:
20 17 a. The retail dealer's total gasoline gallonage as
20 18 provided in section 452A.31.
20 19 b. The retail dealer's total ethanol gallonage as provided
20 20 in section 452A.31. The retail dealer may calculate the
20 21 ethanol gallonage based on the schedule provided in section
20 22 452A.32.
20 23 4. The tax credit is calculated by multiplying five cents
20 24 by the retail dealer's total ethanol gallonage as provided in
20 25 section 452A.31 as follows:
20 26 a. For each calendar year beginning during the period
20 27 commencing January 1, 2006, and ending December 31, 2010, the
20 28 tax credit shall be five cents multiplied by the retail
20 29 dealer's total ethanol gallonage.
20 30 b. For each calendar year beginning during the period
20 31 commencing January 1, 2011, and ending December 31, 2025, the
20 32 tax credit shall be calculated as follows:
20 33 (1) Take the retail dealer's total ethanol gallonage which
20 34 is the minuend.
20 35 (2) Multiply the retail dealer's total gasoline gallonage
21 1 by a deductible percentage and round off the resulting product
21 2 to the nearest whole number to obtain the subtrahend. For
21 3 calendar year 2011, the deductible percentage is one percent.
21 4 For each subsequent calendar year, the deductible percentage
21 5 shall keep increasing by one percent.
21 6 (3) Subtract the subtrahend from the minuend to obtain the
21 7 retail dealer's resulting qualifying ethanol gallonage.
21 8 (4) Multiply the retail dealer's resulting qualifying
21 9 ethanol gallonage by five cents.
21 10 c. If a retail dealer's tax year ends prior to December 31
21 11 of a calendar year, the retail dealer may continue to claim
21 12 the tax credit in the retail dealer's following tax year. In
21 13 that case, the tax credit shall be five cents multiplied by
21 14 the retail dealer's total ethanol gallonage for the period
21 15 beginning on the first day of the retail dealer's new tax year
21 16 until December 31. For that period, the tax credit shall be
21 17 calculated in the same manner as a retail dealer whose tax
21 18 year began on the previous January 1 and who is calculating
21 19 the tax credit on that same December 31.
21 20 5. a. A retail dealer is eligible to claim an ethanol
21 21 promotion tax credit as provided in this section even though
21 22 the retail dealer claims an E=85 gasoline promotion tax credit
21 23 pursuant to section 422.11O for the same tax year and for the
21 24 same ethanol gallonage.
21 25 b. A retail dealer is not eligible to claim an ethanol
21 26 promotion tax credit as provided in this section if the retail
21 27 dealer claims a designated ethanol blended gasoline tax credit
21 28 as provided in section 422.11C.
21 29 6. Any credit in excess of the taxpayer's tax liability
21 30 shall be refunded. In lieu of claiming a refund, the taxpayer
21 31 may elect to have the overpayment shown on the taxpayer's
21 32 final, completed return credited to the tax liability for the
21 33 following tax year.
21 34 7. An individual may claim the tax credit allowed a
21 35 partnership, limited liability company, S corporation, estate,
22 1 or trust electing to have the income taxed directly to the
22 2 individual. The amount claimed by the individual shall be
22 3 based upon the pro rata share of the individual's earnings of
22 4 a partnership, limited liability company, S corporation,
22 5 estate, or trust.
22 6 8. This section is repealed on January 1, 2026.
22 7 Sec. 28. NEW SECTION. 422.11O E=85 GASOLINE PROMOTION
22 8 TAX CREDIT.
22 9 1. As used in this section, unless the context otherwise
22 10 requires:
22 11 a. "E=85 gasoline", "ethanol", "gasoline", "motor fuel
22 12 pump", and "retail dealer" mean the same as defined in section
22 13 214A.1.
22 14 b. "Sell" means to sell on a retail basis.
22 15 c. "Tax credit" means the E=85 gasoline promotion tax
22 16 credit as provided in this section.
22 17 2. The taxes imposed under this division, less the credits
22 18 allowed under sections 422.12 and 422.12B, shall be reduced by
22 19 an E=85 gasoline promotion tax credit for each tax year that
22 20 the taxpayer is eligible to claim under this subsection. In
22 21 order to be eligible, all of the following must apply:
22 22 a. The taxpayer is a retail dealer who sells and dispenses
22 23 E=85 gasoline through a motor fuel pump in the tax year in
22 24 which the tax credit is claimed.
22 25 b. The retail dealer complies with requirements of the
22 26 department to administer this section.
22 27 3. The amount of the tax credit for a retail dealer is
22 28 calculated by multiplying a designated rate by the retail
22 29 dealer's total E=85 gasoline gallonage as provided in sections
22 30 452A.31 and 452A.32. The designated rate is as follows:
22 31 a. For calendar year 2006 or calendar year 2007, twenty=
22 32 five cents.
22 33 b. For calendar year 2008 or calendar year 2009, twenty
22 34 cents.
22 35 c. For calendar year 2010, ten cents.
23 1 d. For calendar year 2011, nine cents.
23 2 e. For calendar year 2012, eight cents.
23 3 f. For calendar year 2013, seven cents.
23 4 g. For calendar year 2014, six cents.
23 5 h. For calendar year 2015, five cents.
23 6 i. For calendar year 2016, four cents.
23 7 j. For calendar year 2017, three cents.
23 8 k. For calendar year 2018, two cents.
23 9 l. For calendar year 2019, one cent.
23 10 4. If a retail dealer's tax year ends prior to December 31
23 11 of a calendar year, the retail dealer may continue to claim
23 12 the tax credit in the retail dealer's following tax year. In
23 13 that case, the tax credit shall be the designated rate
23 14 multiplied by the retail dealer's total E=85 gasoline
23 15 gallonage for the remaining period beginning on the first day
23 16 of the retail dealer's new tax year until the next December
23 17 31. For that remaining period, the tax credit shall be
23 18 calculated in the same manner as a retail dealer whose tax
23 19 year began on the previous January 1 and who is calculating
23 20 the tax credit on that same December 31.
23 21 5. a. A retail dealer is eligible to claim an E=85
23 22 gasoline promotion tax credit as provided in this section even
23 23 though the retail dealer claims an ethanol promotion tax
23 24 credit pursuant to section 422.11N for the same tax year for
23 25 the same ethanol gallonage.
23 26 b. A taxpayer is not eligible to claim an E=85 gasoline
23 27 tax credit as provided in this section, if the taxpayer claims
23 28 a designated ethanol blended gasoline tax credit as provided
23 29 in section 422.11C.
23 30 6. Any credit in excess of the taxpayer's tax liability
23 31 shall be refunded. In lieu of claiming a refund, the taxpayer
23 32 may elect to have the overpayment shown on the taxpayer's
23 33 final, completed return credited to the tax liability for the
23 34 following tax year.
23 35 7. An individual may claim the tax credit allowed a
24 1 partnership, limited liability company, S corporation, estate,
24 2 or trust electing to have the income taxed directly to the
24 3 individual. The amount claimed by the individual shall be
24 4 based upon the pro rata share of the individual's earnings of
24 5 a partnership, limited liability company, S corporation,
24 6 estate, or trust.
24 7 8. This section is repealed on January 1, 2020.
24 8 Sec. 29. NEW SECTION. 422.11P BIODIESEL BLENDED FUEL TAX
24 9 CREDIT.
24 10 1. As used in this section, unless the context otherwise
24 11 requires:
24 12 a. "Biodiesel blended fuel", "diesel fuel", and "retail
24 13 dealer" mean the same as defined in section 214A.1.
24 14 b. "Motor fuel pump" means the same as defined in section
24 15 214.1.
24 16 c. "Sell" means to sell on a retail basis.
24 17 d. "Tax credit" means a biodiesel blended fuel tax credit
24 18 as provided in this section.
24 19 2. The taxes imposed under this division, less the credits
24 20 allowed under sections 422.12 and 422.12B, shall be reduced by
24 21 the amount of the biodiesel blended fuel tax credit for each
24 22 tax year that the taxpayer is eligible to claim a tax credit
24 23 under this subsection.
24 24 a. In order to be eligible, all of the following must
24 25 apply:
24 26 (1) The taxpayer is a retail dealer who sells and
24 27 dispenses biodiesel blended fuel through a motor fuel pump in
24 28 the tax year in which the tax credit is claimed.
24 29 (2) Of the total gallons of diesel fuel that the taxpayer
24 30 sells and dispenses through all motor fuel pumps during the
24 31 taxpayer's tax year, fifty percent or more is biodiesel
24 32 blended fuel which meets the requirements of this section.
24 33 (3) The taxpayer complies with requirements of the
24 34 department established to administer this section.
24 35 b. The tax credit shall apply to biodiesel blended fuel
25 1 formulated with a minimum percentage of two percent by volume
25 2 of biodiesel, if the formulation meets the standards provided
25 3 in section 214A.2.
25 4 3. The amount of the tax credit is three cents multiplied
25 5 by the total number of gallons of biodiesel blended fuel sold
25 6 and dispensed by the taxpayer through all motor fuel pumps
25 7 operated by the taxpayer during the taxpayer's tax year.
25 8 4. Any credit in excess of the taxpayer's tax liability
25 9 shall be refunded. In lieu of claiming a refund, the taxpayer
25 10 may elect to have the overpayment shown on the taxpayer's
25 11 final, completed return credited to the tax liability for the
25 12 following tax year.
25 13 5. An individual may claim the tax credit allowed a
25 14 partnership, limited liability company, S corporation, estate,
25 15 or trust electing to have the income taxed directly to the
25 16 individual. The amount claimed by the individual shall be
25 17 based upon the pro rata share of the individual's earnings of
25 18 the partnership, limited liability company, S corporation,
25 19 estate, or trust.
25 20 6. This section is repealed January 1, 2012.
25 21 Sec. 30. Section 422.33, subsection 11, paragraph a,
25 22 subparagraph (1), Code Supplement 2005, is amended to read as
25 23 follows:
25 24 (1) "Ethanol "E=85 gasoline", "ethanol blended gasoline",
25 25 "gasoline", "metered pump", "motor fuel pump", "retail
25 26 dealer", "sell", and "service station" mean the same as
25 27 defined in section 422.11C.
25 28 Sec. 31. Section 422.33, subsection 11, paragraph b,
25 29 subparagraph (2), Code Supplement 2005, is amended to read as
25 30 follows:
25 31 (2) The taxpayer operates at least one service station at
25 32 which more than sixty percent of the total gallons of gasoline
25 33 sold and dispensed through one or more metered motor fuel
25 34 pumps by the taxpayer is ethanol blended gasoline.
25 35 Sec. 32. Section 422.33, subsection 11, paragraph c, Code
26 1 Supplement 2005, is amended to read as follows:
26 2 c. (1) The tax credit shall be calculated separately for
26 3 each service station site operated by the taxpayer.
26 4 (2) The amount of the tax credit for each eligible service
26 5 station is two and one=half cents multiplied by the total
26 6 number of gallons of ethanol blended gasoline sold and
26 7 dispensed through all metered motor fuel pumps located at that
26 8 service station during the tax year in excess of sixty percent
26 9 of all gasoline sold and dispensed through metered motor fuel
26 10 pumps at that service station during the tax year.
26 11 (3) A taxpayer is not eligible to claim a designated
26 12 ethanol blended gasoline tax credit as provided in this
26 13 subsection, if the taxpayer claims any of the following:
26 14 (a) An ethanol promotion tax credit as provided in section
26 15 422.11N or this section.
26 16 (b) An E=85 promotion tax credit as provided in section
26 17 422.11O or this section for the same gallons of ethanol
26 18 blended gasoline.
26 19 Sec. 33. Section 422.33, subsection 11, Code Supplement
26 20 2005, is amended by adding the following new paragraph:
26 21 NEW PARAGRAPH. e. This subsection is repealed on January
26 22 1, 2007.
26 23 Sec. 34. Section 422.33, Code Supplement 2005, is amended
26 24 by adding the following new subsections:
26 25 NEW SUBSECTION. 11A. The taxes imposed under this
26 26 division shall be reduced by an ethanol promotion tax credit
26 27 for each tax year that the taxpayer is eligible to claim the
26 28 tax credit under this subsection.
26 29 a. The taxpayer shall claim the tax credit in the same
26 30 manner as provided in section 422.11N. The taxpayer may claim
26 31 the tax credit according to the same requirements, for the
26 32 same amount, and calculated in the same manner, as provided
26 33 for the ethanol promotion tax credit pursuant to section
26 34 422.11N.
26 35 b. Any ethanol promotion tax credit which is in excess of
27 1 the taxpayer's tax liability shall be refunded or may be shown
27 2 on the taxpayer's final, completed return credited to the tax
27 3 liability for the following tax year in the same manner as
27 4 provided in section 422.11N.
27 5 c. This subsection is repealed on January 1, 2026.
27 6 NEW SUBSECTION. 11B. The taxes imposed under this
27 7 division shall be reduced by an E=85 gasoline promotion tax
27 8 credit for each tax year that the taxpayer is eligible to
27 9 claim the tax credit under this subsection.
27 10 a. The taxpayer shall claim the tax credit in the same
27 11 manner as provided in section 422.11O. The taxpayer may claim
27 12 the tax credit according to the same requirements, for the
27 13 same amount, and calculated in the same manner, as provided
27 14 for the E=85 gasoline promotion tax credit pursuant to section
27 15 422.11O.
27 16 b. Any E=85 gasoline promotion tax credit which is in
27 17 excess of the taxpayer's tax liability shall be refunded or
27 18 may be shown on the taxpayer's final, completed return
27 19 credited to the tax liability for the following tax year in
27 20 the same manner as provided in section 422.11O.
27 21 c. This subsection is repealed on January 1, 2020.
27 22 Sec. 35. Section 422.33, Code Supplement 2005, is amended
27 23 by adding the following new subsection:
27 24 NEW SUBSECTION. 11C. The taxes imposed under this
27 25 division shall be reduced by a biodiesel blended fuel tax
27 26 credit for each tax year that the taxpayer is eligible to
27 27 claim the tax credit under this subsection.
27 28 a. The taxpayer may claim the biodiesel blended fuel tax
27 29 credit according to the same requirements, for the same
27 30 amount, and calculated in the same manner, as provided for the
27 31 biodiesel blended fuel tax credit pursuant to section 422.11P.
27 32 b. Any biodiesel blended fuel tax credit which is in
27 33 excess of the taxpayer's tax liability shall be refunded or
27 34 may be shown on the taxpayer's final, completed return
27 35 credited to the tax liability for the following tax year in
28 1 the same manner as provided in section 422.11P.
28 2 c. This subsection is repealed on January 1, 2012.
28 3 Sec. 36. RETROACTIVE APPLICABILITY DATE. Sections
28 4 422.11N, 422,11O, and 422.11P, as enacted in this Act, and
28 5 section 422.33, subsections 11A, 11B, and 11C, as enacted in
28 6 this Act, apply retroactively to tax years beginning on or
28 7 after January 1, 2006.
28 8 Sec. 37. TAX CREDIT AVAILABILITY.
28 9 1. For a retail dealer who may claim a designated ethanol
28 10 blended gasoline tax credit under section 422.11C or 422.33,
28 11 subsection 11, as amended by this Act, in calendar year 2006
28 12 and whose tax year ends prior to December 31, 2006, the
28 13 taxpayer may continue to claim the tax credit in the retail
28 14 dealer's following tax year. In that case, the tax credit
28 15 shall be calculated in the same manner as provided in section
28 16 422.11C or 422.33, subsection 11, as amended by this Act, for
28 17 the remaining period beginning on the first day of the retail
28 18 dealer's new tax year until December 31, 2006. For that
28 19 remaining period, the tax credit shall be calculated in the
28 20 same manner as a retail dealer whose tax year began on the
28 21 previous January 1 and who is calculating the tax credit on
28 22 December 31, 2006.
28 23 2. For a retail dealer who may claim an ethanol promotion
28 24 tax credit under section 422.11N or 422.33, subsection 11A, as
28 25 enacted in this Act, in calendar year 2025 and whose tax year
28 26 ends prior to December 31, 2025, the taxpayer may continue to
28 27 claim the tax credit in the retail dealer's following tax
28 28 year. In that case, the tax credit shall be calculated in the
28 29 same manner as provided in section 422.11N or 422.33,
28 30 subsection 11A, as enacted in this Act, for the remaining
28 31 period beginning on the first day of the retail dealer's new
28 32 tax year until December 31, 2025. For that remaining period,
28 33 the tax credit shall be calculated in the same manner as a
28 34 retail dealer whose tax year began on the previous January 1
28 35 and who is calculating the tax credit on December 31, 2025.
29 1 3. For a retail dealer who may claim an E=85 gasoline
29 2 promotion tax credit under section 422.11O or 422.33,
29 3 subsection 11B, as enacted in this Act, in calendar year 2019
29 4 and whose tax year ends prior to December 31, 2019, the
29 5 taxpayer may continue to claim the tax credit in the retail
29 6 dealer's following tax year. In that case, the tax credit
29 7 shall be calculated in the same manner as provided in section
29 8 422.11O or 422.33, subsection 11B, as enacted in this Act, for
29 9 the remaining period beginning on the first day of the retail
29 10 dealer's new tax year until December 31, 2019. For that
29 11 remaining period, the tax credit shall be calculated in the
29 12 same manner as a retail dealer whose tax year began on the
29 13 previous January 1 and who is calculating the tax credit on
29 14 December 31, 2019.
29 15 4. For a retail dealer who may claim a biodiesel blended
29 16 fuel tax credit under section 422.11P or 422.33, subsection
29 17 11C, as enacted in this Act, in calendar year 2011 and whose
29 18 tax year ends prior to December 31, 2011, the taxpayer may
29 19 continue to claim the tax credit in the retail dealer's
29 20 following tax year. In that case, the tax credit shall be
29 21 calculated in the same manner as provided in section 422.11P
29 22 or 422.33, subsection 11C, as enacted in this Act, for the
29 23 remaining period beginning on the first day of the retail
29 24 dealer's new tax year until December 31, 2011. For that
29 25 remaining period, the tax credit shall be calculated in the
29 26 same manner as a retail dealer whose tax year began on the
29 27 previous January 1 and who is calculating the tax credit on
29 28 December 31, 2011.
29 29 DIVISION IV
29 30 PETROLEUM REPLACEMENT INITIATIVE
29 31 Sec. 38. Section 452A.2, Code Supplement 2005, is amended
29 32 by adding the following new subsections:
29 33 NEW SUBSECTION. 9A. "E=85 gasoline" means the same as
29 34 defined in section 214A.1.
29 35 NEW SUBSECTION. 13A. "Gasoline" means the same as defined
30 1 in section 214A.1.
30 2 NEW SUBSECTION. 19A. "Motor fuel pump" means the same as
30 3 defined in section 214.1.
30 4 NEW SUBSECTION. 20A. "Nonethanol blended gasoline" means
30 5 gasoline other than ethanol blended gasoline.
30 6 NEW SUBSECTION. 24A. "Retail dealer" means the same as
30 7 defined in section 214A.1.
30 8 Sec. 39. Section 452A.2, subsection 11, Code Supplement
30 9 2005, is amended to read as follows:
30 10 11. "Ethanol blended gasoline" means motor fuel containing
30 11 at least ten percent alcohol distilled from cereal grains the
30 12 same as defined in section 214A.1.
30 13 Sec. 40. Section 452A.2, subsection 19, unnumbered
30 14 paragraph 1, Code Supplement 2005, is amended to read as
30 15 follows:
30 16 "Motor fuel" means both motor fuel as defined in section
30 17 214A.1 and includes all of the following:
30 18 Sec. 41. Section 452A.3, subsection 1A, Code 2005, is
30 19 amended by striking the subsection and inserting in lieu
30 20 thereof the following:
30 21 1A. Except as otherwise provided in this section and in
30 22 this division, after June 30, 2007, this subsection shall
30 23 apply to the excise tax imposed on each gallon of gasoline
30 24 used for any purpose for the privilege of operating motor
30 25 vehicles in this state. The amount of the excise tax is the
30 26 applicable rate multiplied by each gallon of ethanol blended
30 27 gasoline and nonethanol blended gasoline.
30 28 a. The applicable rate is the base rate of twenty cents
30 29 for ethanol blended gasoline and nonethanol blended gasoline.
30 30 b. By March 1, following each key determination period as
30 31 provided in section 452A.31, the department shall determine
30 32 whether the ethanol percentage threshold has been met as
30 33 provided in section 452A.34.
30 34 (1) If the ethanol threshold percentage has been met, the
30 35 applicable rate of the excise tax is the base rate as provided
31 1 in paragraph "a".
31 2 (2) If the ethanol threshold percentage has not been met,
31 3 the applicable rate of the excise tax is a special rate.
31 4 (a) The special rate is calculated as follows:
31 5 (i) Multiply the ethanol threshold disparity factor for
31 6 that key determination period as provided in section 452A.34
31 7 by two cents to obtain the resulting product.
31 8 (ii) Add the resulting product to the base rate as if the
31 9 ethanol percentage threshold had been met as provided in
31 10 paragraph "a" to obtain the resulting sum which is the special
31 11 rate.
31 12 (b) The special rate shall be effective as follows:
31 13 (i) If the ethanol threshold percentage has not been met
31 14 during the first key determination period, the special rate is
31 15 effective beginning on July 1, 2010, and ending on June 30,
31 16 2015.
31 17 (ii) If the ethanol threshold percentage has not been met
31 18 during the second key determination period, the special rate
31 19 is effective beginning on July 1, 2015, and ending on June 30,
31 20 2020.
31 21 (iii) If the ethanol threshold percentage has not been met
31 22 during the third key determination period, the special rate is
31 23 effective beginning on July 1, 2020, and ending on June 30,
31 24 2025.
31 25 (iv) If the ethanol threshold percentage has not been met
31 26 during the fourth key determination period, the special rate
31 27 is effective on and after July 1, 2025.
31 28 Sec. 42. NEW SECTION. 452A.31 SPECIAL TERMS.
31 29 For purposes of this division, all of the following shall
31 30 apply:
31 31 1. a. A determination period is any twelve=month period
31 32 beginning on January 1 and ending on December 31.
31 33 b. A key determination period and key determination date
31 34 are as follows:
31 35 (1) For the first key determination period, the period
32 1 beginning January 1 and ending December 31, 2009, and for the
32 2 first key determination date, March 1, 2010.
32 3 (2) For the second key determination period, the period
32 4 beginning January 1 and ending December 31, 2014, and for the
32 5 second key determination date, March 1, 2015.
32 6 (3) For the third key determination period, the period
32 7 beginning January 1 and ending December 31, 2019, and for the
32 8 third key determination date, March 1, 2020.
32 9 (4) For the fourth key determination period, the period
32 10 beginning January 1 and ending December 31, 2024, and for the
32 11 fourth key determination date, March 1, 2025.
32 12 2. a. A retail dealer's total gasoline gallonage is the
32 13 total number of gallons of gasoline, which the retail dealer
32 14 sells and dispenses from all motor fuel pumps located at all
32 15 service stations operated by the retail dealer in this state
32 16 during a twelve=month period beginning January 1 and ending
32 17 December 31. The retail dealer's total gasoline gallonage is
32 18 divided into the following classifications:
32 19 (1) The total ethanol blended gasoline gallonage which is
32 20 the retail dealer's total number of gallons of ethanol blended
32 21 gasoline and which includes all of the following
32 22 subclassifications:
32 23 (a) The total E=xx gasoline gallonage which is the total
32 24 number of gallons of ethanol blended gasoline other than E=85
32 25 gasoline.
32 26 (b) The total E=85 gasoline gallonage which is the total
32 27 number of gallons of E=85 gasoline.
32 28 (2) The total nonblended gasoline gallonage which is the
32 29 total number of gallons of nonblended ethanol gasoline.
32 30 b. A retail dealer's total ethanol gallonage is the total
32 31 number of gallons of ethanol which is a component of ethanol
32 32 blended gasoline which the retail dealer sells and dispenses
32 33 from motor fuel pumps as provided in paragraph "a" during a
32 34 twelve=month period beginning January 1 and ending December
32 35 31.
33 1 3. a. The aggregate gasoline gallonage is the total
33 2 number of gallons of gasoline, which all retail dealers sell
33 3 and dispense from all motor fuel pumps located at all service
33 4 stations operated by the retail dealers in this state during a
33 5 twelve=month period beginning January 1 and ending December
33 6 31. The aggregate total gasoline gallonage is divided into
33 7 the following classifications:
33 8 (1) The aggregate ethanol blended gasoline gallonage which
33 9 is the aggregate total number of gallons of ethanol blended
33 10 gasoline and which includes all of the following
33 11 subclassifications:
33 12 (a) The aggregate E=xx gasoline gallonage which is the
33 13 aggregate total number of gallons of ethanol blended gasoline
33 14 other than E=85 gasoline.
33 15 (b) The aggregate E=85 gasoline gallonage which is the
33 16 aggregate total number of gallons of E=85 gasoline.
33 17 (2) The aggregate total nonblended gasoline gallonage,
33 18 which is the aggregate total number of gallons of nonblended
33 19 ethanol gasoline.
33 20 b. The aggregate ethanol gallonage is the total number of
33 21 gallons of ethanol which is a component of ethanol blended
33 22 gasoline which all retail dealers sell and dispense from motor
33 23 fuel pumps as provided in paragraph "a" during a twelve=month
33 24 period beginning January 1 and ending December 31.
33 25 4. a. The aggregate ethanol distribution percentage is
33 26 the aggregate ethanol gallonage as expressed as a percentage
33 27 of the aggregate gasoline gallonage calculated for a twelve=
33 28 month period beginning January 1 and ending December 31.
33 29 b. The aggregate per gallon distribution percentage which
33 30 is the aggregate ethanol blended gasoline gallonage expressed
33 31 as a percentage of the aggregate gasoline gallonage.
33 32 5. a. The ethanol threshold percentage is the aggregate
33 33 ethanol distribution percentage required to be met during a
33 34 key determination period as provided in section 452A.34.
33 35 b. The ethanol threshold percentage disparity is a
34 1 positive percentage difference obtained by taking the minuend
34 2 which is the aggregate ethanol distribution percentage and
34 3 subtracting from it the subtrahend which is the ethanol
34 4 threshold percentage, as calculated for a key determination
34 5 period as provided in section 452A.34.
34 6 c. The ethanol threshold disparity factor is the ethanol
34 7 threshold percentage disparity expressed as a positive number
34 8 rounded to the nearest tenth of a whole number.
34 9 Sec. 43. NEW SECTION. 452A.32 SCHEDULE FOR AVERAGING
34 10 ETHANOL CONTENT IN E=85 GASOLINE.
34 11 The department shall establish a schedule listing the
34 12 average amount of ethanol contained in E=85 gasoline as
34 13 defined in section 214A.1, for use by a retail dealer in
34 14 calculating the retail dealer's total ethanol gallonage, as
34 15 provided in section 452A.31. In establishing the schedule,
34 16 the department shall assume that a retail dealer begins
34 17 selling and dispensing E=85 gasoline from a motor fuel pump on
34 18 the first day of a month and ceases selling and distributing
34 19 E=85 gasoline on the last day of a month.
34 20 Sec. 44. NEW SECTION. 452A.33 REPORTING REQUIREMENTS.
34 21 1. Each retail dealer shall report its total gasoline
34 22 gallonage and its total ethanol gallonage for a determination
34 23 period, including for each classification and
34 24 subclassification as provided in section 452A.31 in a manner
34 25 and according to procedures required by the department. The
34 26 department may require that retail dealers report to the
34 27 department on an annual, quarterly, or monthly basis.
34 28 2. On or before February 1 the department shall deliver a
34 29 report to the governor and the legislative services agency.
34 30 The report shall compile information reported by retail
34 31 dealers to the department as provided in this section and
34 32 shall at least include all of the following:
34 33 a. The aggregate gasoline gallonage for the previous
34 34 determination period, including for all classifications and
34 35 subclassifications as provided in section 452A.31.
35 1 b. The aggregate ethanol distribution percentage for the
35 2 previous determination period.
35 3 c. The projected aggregate gasoline gallonage, the
35 4 aggregate ethanol gallonage, and the projected aggregate
35 5 ethanol distribution percentage, for each future key
35 6 determination period as provided in section 452A.34.
35 7 d. The ethanol threshold percentage required for the next
35 8 key determination period as provided in section 452A.34 and
35 9 any projected ethanol threshold percentage disparity,
35 10 including the amount of additional ethanol required to be sold
35 11 and dispensed from all motor fuel pumps located at all service
35 12 stations in this state in order to meet the next ethanol
35 13 threshold percentage.
35 14 Sec. 45. NEW SECTION. 452A.34 ETHANOL THRESHOLD
35 15 PERCENTAGES.
35 16 1. The department shall determine whether an ethanol
35 17 threshold percentage has been met on the following key
35 18 determination dates:
35 19 a. On March 1, 2010, the department must determine that
35 20 the aggregate distribution percentage was at least ten percent
35 21 in order to meet the first ethanol threshold percentage for
35 22 the key determination period beginning on January 1, 2009, and
35 23 ending December 31, 2009.
35 24 b. On March 1, 2015, the department must determine that
35 25 the aggregate distribution percentage was at least fifteen
35 26 percent in order to meet the second ethanol threshold
35 27 percentage for the key determination period beginning on
35 28 January 1, 2014, and ending December 31, 2014.
35 29 c. On March 1, 2020, the department must determine that
35 30 the aggregate distribution percentage was at least twenty
35 31 percent in order to meet the third ethanol threshold
35 32 percentage for the key determination period beginning on
35 33 January 1, 2019, and ending December 31, 2019.
35 34 d. On March 1, 2025, the department must determine that
35 35 the aggregate distribution percentage was at least twenty=five
36 1 percent in order to meet the fourth ethanol threshold
36 2 percentage for the key determination period beginning on
36 3 January 1, 2024, and ending December 31, 2024.
36 4 2. If on a key determination date, an ethanol threshold
36 5 percentage has not been met, the department shall calculate
36 6 the ethanol threshold percentage disparity and the resulting
36 7 ethanol threshold disparity factor as provided in section
36 8 452A.31 which shall be used to determine the special rate of
36 9 the excise tax imposed on each gallon of nonethanol blended
36 10 gasoline as provided in section 452A.3.
36 11 DIVISION IV
36 12 COORDINATING PROVISIONS == GOVERNMENT VEHICLES
36 13 Sec. 46. Section 8A.362, subsection 3, Code 2005, is
36 14 amended to read as follows:
36 15 3. a. The director shall provide for a record system for
36 16 the keeping of records of the total number of miles state=
36 17 owned motor vehicles are driven and the per=mile cost of
36 18 operation of each motor vehicle. Every state officer or
36 19 employee shall keep a record book to be furnished by the
36 20 director in which the officer or employee shall enter all
36 21 purchases of gasoline, lubricating oil, grease, and other
36 22 incidental expense in the operation of the motor vehicle
36 23 assigned to the officer or employee, giving the quantity and
36 24 price of each purchase, including the cost and nature of all
36 25 repairs on the motor vehicle. Each operator of a state=owned
36 26 motor vehicle shall promptly prepare a report at the end of
36 27 each month on forms furnished by the director and forwarded to
36 28 the director, giving the information the director may request
36 29 in the report. Each month the director shall compile the
36 30 costs and mileage of state=owned motor vehicles from the
36 31 reports and keep a cost history for each motor vehicle and the
36 32 costs shall be reduced to a cost=per=mile basis for each motor
36 33 vehicle. The director shall call to the attention of an
36 34 elected official or the head of any state agency to which a
36 35 motor vehicle has been assigned any evidence of the
37 1 mishandling or misuse of a state=owned motor vehicle which is
37 2 called to the director's attention.
37 3 b. A motor vehicle operated under this subsection shall
37 4 not operate on gasoline other than ethanol blended gasoline
37 5 blended with at least ten percent ethanol as defined in
37 6 section 214A.1, unless under emergency circumstances. A
37 7 state=issued credit card used to purchase gasoline shall not
37 8 be valid to purchase gasoline other than ethanol blended
37 9 gasoline blended with at least ten percent ethanol, if
37 10 commercially available. The motor vehicle shall also be
37 11 affixed with a brightly visible sticker which notifies the
37 12 traveling public that the motor vehicle is being operated on
37 13 ethanol blended gasoline blended with ethanol. However, the
37 14 sticker is not required to be affixed to an unmarked vehicle
37 15 used for purposes of providing law enforcement or security.
37 16 Sec. 47. Section 8A.362, subsection 5, paragraph a,
37 17 subparagraphs (1) and (2), Code 2005, are amended to read as
37 18 follows:
37 19 (1) A fuel blended with not more than fifteen percent E=85
37 20 gasoline and at least eighty=five percent ethanol as defined
37 21 in section 214A.1.
37 22 (2) A B=20 biodiesel blended fuel which is a mixture of
37 23 diesel fuel and processed soybean oil as defined in section
37 24 214A.1. At least twenty percent of the mixed fuel by volume
37 25 must be processed soybean oil.
37 26 Sec. 48. Section 216B.3, subsection 16, paragraph a, Code
37 27 2005, is amended to read as follows:
37 28 a. A motor vehicle purchased by the commission shall not
37 29 operate on gasoline other than ethanol blended gasoline
37 30 blended with at least ten percent ethanol. A state issued
37 31 credit card used to purchase gasoline shall not be valid to
37 32 purchase gasoline other than ethanol blended gasoline blended
37 33 with at least ten percent ethanol. The motor vehicle shall
37 34 also be affixed with a brightly visible sticker which notifies
37 35 the traveling public that the motor vehicle is being operated
38 1 on ethanol blended gasoline blended with ethanol. However,
38 2 the sticker is not required to be affixed to an unmarked
38 3 vehicle used for purposes of providing law enforcement or
38 4 security.
38 5 Sec. 49. Section 216B.3, subsection 16, paragraph b,
38 6 subparagraph (1), subparagraph subdivisions (a) and (b), Code
38 7 2005, are amended to read as follows:
38 8 (a) A fuel blended with not more than fifteen percent E=85
38 9 gasoline and at least eighty=five percent ethanol as defined
38 10 in section 214A.1.
38 11 (b) A B=20 biodiesel blended fuel which is a mixture of
38 12 diesel fuel and processed soybean oil as defined in section
38 13 214A.1. At least twenty percent of the mixed fuel by volume
38 14 must be processed soybean oil.
38 15 Sec. 50. Section 260C.19A, subsection 1, Code 2005, is
38 16 amended to read as follows:
38 17 1. A motor vehicle purchased by or used under the
38 18 direction of the board of directors to provide services to a
38 19 merged area shall not operate on gasoline other than ethanol
38 20 blended gasoline blended with at least ten percent ethanol as
38 21 defined in section 214A.1. The motor vehicle shall also be
38 22 affixed with a brightly visible sticker which notifies the
38 23 traveling public that the motor vehicle is being operated on
38 24 ethanol blended gasoline blended with ethanol. However, the
38 25 sticker is not required to be affixed to an unmarked vehicle
38 26 used for purposes of providing law enforcement or security.
38 27 Sec. 51. Section 260C.19A, subsection 2, paragraph a,
38 28 subparagraphs (1) and (2), Code 2005, are amended to read as
38 29 follows:
38 30 (1) A fuel blended with not more than fifteen percent E=85
38 31 gasoline and at least eighty=five percent ethanol as defined
38 32 in section 214A.1.
38 33 (2) A B=20 biodiesel blended fuel which is a mixture of
38 34 diesel fuel and processed soybean oil as defined in section
38 35 214A.1. At least twenty percent of the mixed fuel by volume
39 1 must be processed soybean oil.
39 2 Sec. 52. Section 262.25A, subsection 2, Code 2005, is
39 3 amended to read as follows:
39 4 2. A motor vehicle purchased by the institutions shall not
39 5 operate on gasoline other than gasoline blended with at least
39 6 ten percent ethanol. A state=issued credit card used to
39 7 purchase gasoline shall not be valid to purchase gasoline
39 8 other than ethanol blended gasoline blended with at least ten
39 9 percent ethanol as defined in section 214A.1. The motor
39 10 vehicle shall also be affixed with a brightly visible sticker
39 11 which notifies the traveling public that the motor vehicle is
39 12 being operated on ethanol blended gasoline blended with
39 13 ethanol. However, the sticker is not required to be affixed
39 14 to an unmarked vehicle used for purposes of providing law
39 15 enforcement or security.
39 16 Sec. 53. Section 262.25A, subsection 3, paragraph a,
39 17 subparagraphs (1) and (2), Code 2005, are amended to read as
39 18 follows:
39 19 (1) A fuel blended with not more than fifteen percent E=85
39 20 gasoline and at least eighty=five percent ethanol as defined
39 21 in section 214A.1.
39 22 (2) A B=20 biodiesel blended fuel which is a mixture of
39 23 processed soybean oil and diesel fuel as defined in section
39 24 214A.1. At least twenty percent of the fuel by volume must be
39 25 processed soybean oil.
39 26 Sec. 54. Section 279.34, Code 2005, is amended to read as
39 27 follows:
39 28 279.34 MOTOR VEHICLES REQUIRED TO OPERATE ON ETHANOL=
39 29 BLENDED ETHANOL BLENDED GASOLINE.
39 30 A motor vehicle purchased by or used under the direction of
39 31 the board of directors to provide services to a school
39 32 corporation shall not, on or after January 1, 1993, operate on
39 33 gasoline other than ethanol blended gasoline blended with at
39 34 least ten percent ethanol. The motor vehicle shall also be
39 35 affixed with a brightly visible sticker which notifies the
40 1 traveling public that the motor vehicle is being operated on
40 2 ethanol blended gasoline blended with ethanol. However, the
40 3 sticker is not required to be affixed to an unmarked vehicle
40 4 used for purposes of providing law enforcement or security.
40 5 Sec. 55. Section 307.21, subsection 4, paragraph d, Code
40 6 2005, is amended to read as follows:
40 7 d. A motor vehicle purchased by the administrator shall
40 8 not operate on gasoline other than ethanol blended gasoline
40 9 blended with at least ten percent ethanol as defined in
40 10 section 214A.1. A state=issued credit card used to purchase
40 11 gasoline shall not be valid to purchase gasoline other than
40 12 ethanol blended gasoline blended with at least ten percent
40 13 ethanol. The motor vehicle shall also be affixed with a
40 14 brightly visible sticker which notifies the traveling public
40 15 that the motor vehicle is being operated on ethanol blended
40 16 gasoline blended with ethanol. However, the sticker is not
40 17 required to be affixed to an unmarked vehicle used for
40 18 purposes of providing law enforcement or security.
40 19 Sec. 56. Section 307.21, subsection 5, paragraph a,
40 20 subparagraphs (1) and (2), Code 2005, are amended to read as
40 21 follows:
40 22 (1) A fuel blended with not more than fifteen percent E=85
40 23 gasoline and at least eighty=five percent ethanol as defined
40 24 in section 214A.1.
40 25 (2) A B=20 biodiesel blended fuel which is a mixture of
40 26 processed soybean oil and diesel fuel as defined in section
40 27 214A.1. At least twenty percent of the fuel by volume must be
40 28 processed soybean oil.
40 29 Sec. 57. Section 331.908, Code 2005, is amended to read as
40 30 follows:
40 31 331.908 MOTOR VEHICLES REQUIRED TO OPERATE ON ETHANOL=
40 32 BLENDED ETHANOL BLENDED GASOLINE.
40 33 A motor vehicle purchased or used by a county to provide
40 34 county services shall not, on or after January 1, 1993,
40 35 operate on gasoline other than ethanol blended gasoline
41 1 blended with at least ten percent ethanol as defined in
41 2 section 214A.1. The motor vehicle shall also be affixed with
41 3 a brightly visible sticker which notifies the traveling public
41 4 that the motor vehicle is being operated on ethanol blended
41 5 gasoline blended with ethanol. However, the sticker is not
41 6 required to be affixed to an unmarked vehicle used for
41 7 purposes of providing law enforcement or security.
41 8 Sec. 58. Section 364.20, Code 2005, is amended to read as
41 9 follows:
41 10 364.20 MOTOR VEHICLES REQUIRED TO OPERATE ON ETHANOL=
41 11 BLENDED ETHANOL BLENDED GASOLINE.
41 12 A motor vehicle purchased or used by a city to provide city
41 13 services shall not, on or after January 1, 1993, operate on
41 14 gasoline other than ethanol blended gasoline blended with at
41 15 least ten percent ethanol as defined in section 214A.1. The
41 16 motor vehicle shall also be affixed with a brightly visible
41 17 sticker which notifies the traveling public that the motor
41 18 vehicle is being operated on ethanol blended gasoline blended
41 19 with ethanol. However, the sticker is not required to be
41 20 affixed to an unmarked vehicle used for purposes of providing
41 21 law enforcement or security.
41 22 Sec. 59. Section 904.312A, subsection 1, Code 2005, is
41 23 amended to read as follows:
41 24 1. A motor vehicle purchased by the department shall not
41 25 operate on gasoline other than ethanol blended gasoline
41 26 blended with at least ten percent ethanol as defined in
41 27 section 214A.1. A state=issued credit card used to purchase
41 28 gasoline shall not be valid to purchase gasoline other than
41 29 ethanol blended gasoline blended with at least ten percent
41 30 ethanol. The motor vehicle shall also be affixed with a
41 31 brightly visible sticker which notifies the traveling public
41 32 that the motor vehicle is being operated on ethanol blended
41 33 gasoline blended with ethanol. However, the sticker is not
41 34 required to be affixed to an unmarked vehicle used for
41 35 purposes of providing law enforcement or security.
42 1 Sec. 60. Section 904.312A, subsection 2, paragraph a,
42 2 subparagraphs (1) and (2), Code 2005, are amended to read as
42 3 follows:
42 4 (1) A fuel blended with not more than fifteen percent E=85
42 5 gasoline and at least eighty=five percent ethanol as defined
42 6 in section 214A.1.
42 7 (2) A B=20 biodiesel blended fuel which is a mixture of
42 8 diesel fuel and processed soybean oil as defined in section
42 9 214A.1. At least twenty percent of the mixed fuel by volume
42 10 must be processed soybean oil.
42 11 DIVISION V
42 12 COORDINATING PROVISIONS == MISCELLANEOUS
42 13 Sec. 61. Section 15.401, Code Supplement 2005, is amended
42 14 to read as follows:
42 15 15.401 E=85 BLENDED GASOLINE RENEWABLE FUELS.
42 16 1. As used in this section, unless the context otherwise
42 17 requires, "biodiesel", "biodiesel blended fuel", "E=85
42 18 gasoline" and "service station" mean the same as defined in
42 19 section 214A.1.
42 20 2. The department shall provide a cost=share program for
42 21 financial incentives for the installation or conversion of
42 22 infrastructure used by service stations to do all of the
42 23 following:
42 24 a. sell Sell and dispense E=85 blended gasoline and for
42 25 the installation or conversion of.
42 26 b. Install or convert infrastructure required to establish
42 27 on=site and off=site terminal facilities that store biodiesel
42 28 or biodiesel blended fuel for distribution to service
42 29 stations.
42 30 3. The department shall provide for an addition of at
42 31 least thirty new or converted E=85 gasoline retail outlets and
42 32 four new or converted on=site or off=site terminal facilities
42 33 with a maximum expenditure of three hundred twenty=five
42 34 thousand dollars per year for the fiscal period beginning July
42 35 1, 2005, and ending June 30, 2008. The department may provide
43 1 for the marketing of these products in conjunction with this
43 2 infrastructure program.
43 3 Sec. 62. Section 159A.2, Code 2005, is amended by adding
43 4 the following new subsections:
43 5 NEW SUBSECTION. 0A. "Biodiesel" and "biodiesel blended
43 6 fuel" mean the same as defined in section 214A.1.
43 7 NEW SUBSECTION. 3A. "Department" means the department of
43 8 agriculture and land stewardship.
43 9 NEW SUBSECTION. 3B. "Ethanol blended gasoline" means the
43 10 same as defined in section 214A.1.
43 11 Sec. 63. Section 159A.2, subsection 6, Code 2005, is
43 12 amended by striking the subsection and inserting in lieu
43 13 thereof the following:
43 14 6. "Renewable fuel" means the same as defined in section
43 15 214A.1.
43 16 Sec. 64. Section 159A.2, subsection 8, Code 2005, is
43 17 amended by striking the subsection.
43 18 Sec. 65. Section 159A.3, subsection 3, Code 2005, is
43 19 amended to read as follows:
43 20 3. a. A chief purpose of the office is to further the
43 21 production and consumption of ethanol fuel blended gasoline in
43 22 this state. The office shall be the primary state agency
43 23 charged with the responsibility to promote public consumption
43 24 of ethanol fuel blended gasoline.
43 25 b. The office shall promote the production and consumption
43 26 of soydiesel fuel biodiesel and biodiesel blended fuel in this
43 27 state.
43 28 Sec. 66. Section 214A.19, subsection 1, unnumbered
43 29 paragraph 1, Code 2005, is amended to read as follows:
43 30 The department of natural resources, conditioned upon the
43 31 availability of funds, is authorized to award demonstration
43 32 grants to persons who purchase vehicles which operate on
43 33 alternative fuels, including but not limited to, high blend
43 34 ethanol E=85 gasoline, biodiesel, compressed natural gas,
43 35 electricity, solar energy, or hydrogen. A grant shall be for
44 1 the purpose of conducting research connected with the fuel or
44 2 the vehicle, and not for the purchase of the vehicle itself,
44 3 except that the money may be used for the purchase of the
44 4 vehicle if all of the following conditions are satisfied:
44 5 Sec. 67. Section 307.20, Code 2005, is amended to read as
44 6 follows:
44 7 307.20 BIODIESEL AND BIODIESEL BLENDED FUEL REVOLVING
44 8 FUND.
44 9 1. A biodiesel and biodiesel blended fuel revolving fund
44 10 is created in the state treasury. The biodiesel and biodiesel
44 11 blended fuel revolving fund shall be administered by the
44 12 department and shall consist of moneys received from the sale
44 13 of EPAct credits banked by the department on April 19, 2001,
44 14 moneys appropriated by the general assembly, and any other
44 15 moneys obtained or accepted by the department for deposit in
44 16 the fund. Moneys in the fund are appropriated to and shall be
44 17 used by the department for the purchase of biodiesel and
44 18 biodiesel blended fuel for use in department vehicles. The
44 19 department shall submit an annual report not later than
44 20 January 31 to the members of the general assembly and the
44 21 legislative services agency, of the expenditures made from the
44 22 fund during the preceding fiscal year. Section 8.33 does not
44 23 apply to any moneys in the fund and, notwithstanding section
44 24 12C.7, subsection 2, earnings or interest on moneys deposited
44 25 in the fund shall be credited to the fund.
44 26 2. A department departmental motor vehicle operating on
44 27 using biodiesel or biodiesel blended fuel shall be affixed
44 28 with a brightly visible sticker that notifies the traveling
44 29 public that the motor vehicle uses biodiesel blended fuel.
44 30 3. For purposes of this section the following definitions
44 31 apply:
44 32 a. "Biodiesel "Biodiesel" and "biodiesel blended fuel"
44 33 means soydiesel fuel mean the same as defined in section
44 34 159A.2 214A.1.
44 35 b. "EPAct credit" means a credit issued pursuant to the
45 1 federal Energy Policy Act (EPAct), 42 U.S.C. } 13201 et seq.
45 2 Sec. 68. Section 452A.2, subsection 2, Code Supplement
45 3 2005, is amended by striking the subsection and inserting in
45 4 lieu thereof the following:
45 5 2. "Biodiesel" and "biodiesel blended fuel" mean the same
45 6 as defined in section 214A.1.
45 7 Sec. 69. Section 452A.2, subsection 3, Code Supplement
45 8 2005, is amended to read as follows:
45 9 3. "Blender" means a person who owns and blends alcohol
45 10 ethanol with gasoline to produce ethanol blended gasoline and
45 11 blends the product at a nonterminal location. The blender
45 12 person is not restricted to blending alcohol ethanol with
45 13 gasoline. Products blended with gasoline other than grain
45 14 alcohol ethanol are taxed as gasoline. "Blender" also means a
45 15 person blending two or more special fuel products at a
45 16 nonterminal location where the tax has not been paid on all of
45 17 the products blended. This blend is taxed as a special fuel.
45 18 Sec. 70. Section 452A.2, Code Supplement 2005, is amended
45 19 by adding the following new subsection:
45 20 NEW SUBSECTION. 9A. "E=85 gasoline" means the same as
45 21 defined in section 214A.1.
45 22 Sec. 71. Section 452A.2, subsection 11, Code Supplement
45 23 2005, is amended to read as follows:
45 24 11. "Ethanol blended gasoline" means motor fuel containing
45 25 at least ten percent alcohol distilled from cereal grains the
45 26 same as defined in section 214A.1.
45 27 Sec. 72. Section 452A.2, subsection 19, unnumbered
45 28 paragraph 1, Code Supplement 2005, is amended to read as
45 29 follows:
45 30 "Motor fuel" means both motor fuel as defined in section
45 31 214A.1 and includes all of the following:
45 32 Sec. 73. Section 452A.2, subsection 21, Code Supplement
45 33 2005, is amended to read as follows:
45 34 21. "Nonterminal storage facility" means a facility where
45 35 motor fuel or special fuel, other than liquefied petroleum
46 1 gas, is stored that is not supplied by a pipeline or a marine
46 2 vessel. "Nonterminal storage facility" includes a facility
46 3 that manufactures products such as alcohol ethanol as defined
46 4 in section 214A.1, biofuel, blend stocks, or additives which
46 5 may be used as motor fuel or special fuel, other than
46 6 liquefied petroleum gas, for operating motor vehicles or
46 7 aircraft.
46 8 Sec. 74. Section 452A.3, subsection 1B, Code Supplement
46 9 2005, is amended to read as follows:
46 10 1B. An excise tax of seventeen cents is imposed on each
46 11 gallon of E=85 gasoline, which contains at least eighty=five
46 12 percent denatured alcohol by volume from the first day of
46 13 April until the last day of October or seventy percent
46 14 denatured alcohol from the first day of November until the
46 15 last day of March, used for the privilege of operating motor
46 16 vehicles in this state as defined in section 214A.1, subject
46 17 to the determination provided in subsection 1C.
46 18 Sec. 75. Section 452A.6, Code 2005, is amended to read as
46 19 follows:
46 20 452A.6 ETHANOL BLENDED GASOLINE AND OTHER PRODUCTS ==
46 21 BLENDER'S LICENSE.
46 22 1. a. A person other than a supplier, restrictive
46 23 supplier, or importer licensed under this division, who blends
46 24 gasoline with alcohol distilled from cereal grains so that the
46 25 blend contains at least ten percent alcohol distilled from
46 26 cereal grains ethanol as defined in section 214A.1 in order to
46 27 formulate ethanol blended gasoline, shall obtain a blender's
46 28 license.
46 29 b. A person who blends two or more special fuel products
46 30 or sells one hundred percent biofuel shall obtain a blender's
46 31 license.
46 32 2. The A blender's license shall be obtained by following
46 33 the procedure under section 452A.4 and the blender's license
46 34 is subject to the same restrictions as contained in that
46 35 section.
47 1 3. A blender required to obtain a license pursuant to this
47 2 section shall maintain records as required by section 452A.10
47 3 as to motor fuel, alcohol ethanol, ethanol blended gasoline,
47 4 and special fuels.
47 5 DIVISION VI
47 6 CHANGE OF TERMS
47 7 Sec. 76. CHANGE OF TERMS.
47 8 1. Sections 8A.362, 101.21, 159A.4, 214.1, 214.11, 214A.1,
47 9 214A.2, 214A.4, 214A.5, 214A.7, 214A.8, 214A.9, 214A.10,
47 10 214A.16, 214A.17, 214A.18, 306C.11, 312.1, 321.56, 423.14,
47 11 452A.63, 452A.66, and 452A.78, Code 2005, and section 321.40,
47 12 Code Supplement 2005, are amended by striking from the
47 13 provisions the words "motor vehicle fuel" and inserting the
47 14 following: "motor fuel".
47 15 2. Sections 214.1, 214.3, 214.9, 214.11, and 214A.16, Code
47 16 2005, are amended by striking the words "motor vehicle fuel
47 17 pump" or "motor vehicle fuel pumps" and inserting the
47 18 following: "motor fuel pump" or "motor fuel pumps".
47 19 3. Sections 159A.3 and 214A.17, Code 2005, are amended by
47 20 striking from the provisions the words "oxygenate octane
47 21 enhancers" and inserting the following: "oxygenates".
47 22 4. Sections 214A.1, 214A.4, 214A.5, 214A.7, 214A.8, and
47 23 214A.10, Code 2005, are amended by striking from the
47 24 provisions the words "oxygenate octane enhancer" and inserting
47 25 the following: "oxygenate".
47 26 EXPLANATION
47 27 BACKGROUND. The general assembly has enacted a number of
47 28 Acts which have promoted the production and consumption of
47 29 ethanol blended gasoline.
47 30 In 1991, the general assembly enacted S.F. 545 (1991 Iowa
47 31 Acts, ch. 254), which requires that state and local government
47 32 vehicles operate using ethanol blended gasoline and provides
47 33 that a state=issued credit card can only be used to purchase
47 34 ethanol blended gasoline. The provisions state that ethanol
47 35 blended gasoline must contain at least 10 percent ethanol.
48 1 In 1994, the general assembly enacted H.F. 2337 (1994 Iowa
48 2 Acts, chapter 1119), which requires that of all new passenger
48 3 vehicles and light pickup trucks purchased by the department
48 4 of administrative services, other state agencies, and
48 5 community colleges, a minimum of 10 percent of those motor
48 6 vehicles must be equipped with engines which utilize
48 7 alternative fuels (referred to as alternative methods of
48 8 propulsion), including a flexible fuel (E=85 gasoline or
48 9 biodiesel blended gasoline). The alternative fuel
48 10 requirements do not apply to motor vehicles purchased and
48 11 directly used for law enforcement or purchased and used for
48 12 off=road maintenance work or to pull loaded trailers.
48 13 In 2001, the general assembly enacted H.F. 716 (2001 Iowa
48 14 Acts, ch. 123), which created a tax credit for retail dealers
48 15 of gasoline who sell ethanol blended gasoline (containing at
48 16 least 10 percent alcohol). The tax credit applies to both
48 17 taxpayers filing as individuals under Code section 422.11C and
48 18 businesses under Code section 422.33. Specifically, the Act
48 19 provided a tax credit for a retail dealer who operates at
48 20 least one service station at which more than 60 percent of the
48 21 total gallons of gasoline sold by the retail dealer is ethanol
48 22 blended gasoline.
48 23 The Act also amended provisions in Code section 452A.3 that
48 24 provide for an excise tax on each gallon of motor fuel sold in
48 25 the state. Under the Act, until June 30, 2007, the rates for
48 26 unblended and blended motor fuel are adjusted each year based
48 27 on the number of gallons of ethanol blended gasoline that are
48 28 distributed in this state as expressed as a percentage of the
48 29 total number of gallons of motor fuel distributed in this
48 30 state.
48 31 In 2005, the general assembly enacted H.F. 868 (2005 Iowa
48 32 Acts, ch. 150) imposing a special rate of 17 cents on each
48 33 gallon of E=85 gasoline (a blend containing a minimum of
48 34 between 75 and 85 percent alcohol depending on the season) if
48 35 certain conditions were met. The Act requires the department
49 1 of revenue to compare the amount of moneys actually collected
49 2 using the special 17 cents rate with the amount of moneys that
49 3 would have been collected if the adjusted rate applied. If
49 4 the difference is equal to or greater than $25,000, the tax
49 5 rate beginning the next year is at the adjusted rate.
49 6 DIVISION I == ESTABLISHMENT OF RENEWABLE FUEL STANDARDS.
49 7 GOAL. This division establishes a goal that by January 1,
49 8 2025, ethanol and biodiesel is to replace 25 percent of all
49 9 petroleum used in the formulation of motor fuel.
49 10 MOTOR FUEL STANDARDS. The division amends Code chapter
49 11 214A, which provides authority to the department of
49 12 agriculture and land stewardship to regulate motor fuel. It
49 13 provides for a number of definitions that apply to provisions
49 14 in Code chapter 214A and other Code chapters by reference.
49 15 The definitions include those for "biodiesel", "biodiesel
49 16 blended fuel", "dealer", "diesel fuel", "E=85 gasoline",
49 17 "ethanol", "ethanol blended gasoline", "gasoline", and
49 18 "renewable fuel". The division moves substantive language
49 19 referring to kerosene from the definitional section to a
49 20 section that specifically regulates kerosene.
49 21 The division authorizes the department to establish
49 22 standards for motor fuel. The division provides that the
49 23 department is required to adopt rules relating to renewable
49 24 fuel such as ethanol blended gasoline, biodiesel, and
49 25 biodiesel blended fuel and motor fuel components such as an
49 26 oxygenate. The division requires that ethanol blended
49 27 gasoline contain a blend of at least 10 percent ethanol. E=85
49 28 gasoline must contain a minimum seasonal blend of between 70
49 29 and 85 percent or more ethanol. Biodiesel fuel must contain
49 30 at least 1 percent biodiesel.
49 31 The department of agriculture and land stewardship must
49 32 adopt by reference other specifications relating to tests and
49 33 standards for renewable fuel and motor fuel components
49 34 established by the United States environmental protection
49 35 agency or A.S.T.M. (American society for testing and
50 1 materials) international. In adopting standards for a
50 2 renewable fuel, the department of agriculture and land
50 3 stewardship must consult with the renewable fuels and
50 4 coproducts advisory committee (See Code chapter 159A).
50 5 FALSE ADVERTISING. The division rewrites provisions which
50 6 regulate false advertising of motor fuel to prohibit a person
50 7 from knowingly advertising the sale of any motor fuel that
50 8 does not meet standards adopted by the department of
50 9 agriculture and land stewardship. The division prohibits a
50 10 person from knowingly falsely advertising that motor fuel is a
50 11 renewable fuel or is not a renewable fuel, or falsely
50 12 advertising that ethanol blended gasoline or biodiesel blended
50 13 fuel does or does not contain the appropriate percentage blend
50 14 (referred to as "E=xx" or "B=xx").
50 15 PENALTY. The division provides that the penalty for any
50 16 violation of the Code chapter is increased from a simple
50 17 misdemeanor to a serious misdemeanor. A simple misdemeanor is
50 18 punishable by confinement for no more than 30 days or a fine
50 19 of at least $50 but not more than $500, or by both. A serious
50 20 misdemeanor is punishable by confinement for no more than one
50 21 year and a fine of at least $250 but not more than $1,500.
50 22 DIVISION II == RENEWABLE FUEL INFRASTRUCTURE. This
50 23 division establishes a renewable fuel infrastructure
50 24 initiative. It specifically provides for motor fuel storage
50 25 and dispensing infrastructure, which includes tanks and motor
50 26 fuel pumps necessary to keep and dispense motor fuel.
50 27 FRANCHISES. The division amends provisions included in
50 28 Code chapter 323A affecting franchises of motor fuel. A
50 29 franchise is a contract between persons who sell and who
50 30 purchase for resale motor fuel, including refiners,
50 31 distributors, and retailers. The division provides that when
50 32 a contract is entered into or renewed, it must provide for the
50 33 delivery of volumes of E=85 gasoline at times demanded by the
50 34 franchisee or it must allow the franchisee to purchase those
50 35 volumes of E=85 gasoline at those times from another source.
51 1 However, if the contract does not have an expiration date, and
51 2 the franchisor cannot provide for the delivery of E=85
51 3 gasoline, the franchisee may immediately obtain the E=85
51 4 gasoline from another source, without regard to the contract.
51 5 The division provides that if the franchisee obtains the E=85
51 6 gasoline from another source, the franchisee must provide
51 7 notice to the public of its source. The franchisee must fully
51 8 indemnify the franchisor against any claims for liability
51 9 arising out of the use of the E=85 gasoline which was
51 10 delivered by another source. These provisions are effective
51 11 upon enactment.
51 12 INFRASTRUCTURE USED TO STORE AND DISPENSE E=85 GASOLINE.
51 13 The division provides that a retail dealer may use gasoline
51 14 infrastructure to store and dispense E=85 gasoline, if the
51 15 department of natural resources determines that the
51 16 infrastructure is compatible with the E=85 gasoline. For a
51 17 dispenser, the division requires that a manufacturer state
51 18 that it is not incompatible with E=85 gasoline and that the
51 19 manufacturer has initiated the process of applying to an
51 20 independent testing laboratory for listing of the equipment
51 21 for use in dispensing the E=85 gasoline. These provisions are
51 22 repealed on July 1, 2009.
51 23 RENEWABLE FUEL INFRASTRUCTURE PROGRAMS. The division
51 24 establishes a renewable fuel infrastructure fund. The fund is
51 25 under the control of the department of natural resources to be
51 26 used for the two renewable fuel infrastructure programs. The
51 27 moneys are to be allocated equitably between supporting
51 28 infrastructure relating to the storage and dispensing of E=85
51 29 gasoline at service stations and biodiesel at terminals. One
51 30 percent of the funds may be used for departmental
51 31 administration. The fund and programs are controlled by a
51 32 renewable fuel infrastructure board which includes members
51 33 representing agricultural producers, petroleum marketers,
51 34 contractors, insurers, and the renewable fuels industry. The
51 35 purpose of the renewable fuel infrastructure program for
52 1 service stations is to provide cost=share financial assistance
52 2 to service stations installing, replacing, or converting motor
52 3 fuel storage and dispensing infrastructure designed and used
52 4 exclusively for E=85 gasoline, biodiesel, or biodiesel blended
52 5 fuel. The purpose of the renewable fuel infrastructure
52 6 program for biodiesel terminal facilities is to provide cost=
52 7 share financial assistance to support infrastructure designed
52 8 and used exclusively to store and distribute biodiesel or
52 9 biodiesel blended fuel.
52 10 DIVISION III == RENEWABLE FUEL INCOME TAX CREDIT
52 11 PROVISIONS. This division provides tax credits under Code
52 12 chapter 422, which applies to taxpayers filing as individuals
52 13 or businesses.
52 14 DESIGNATED ETHANOL BLENDED GASOLINE TAX CREDIT. The
52 15 division amends designated ethanol tax credit provisions in
52 16 Code chapter 422 to provide that a retail dealer who sells E=
52 17 85 gasoline is eligible to receive a tax credit. The division
52 18 provides that a retail dealer cannot claim this tax credit if
52 19 the retail dealer claims an ethanol promotion tax credit as
52 20 provided in this division. The retail dealer also cannot
52 21 claim the tax credit on the same gallons of ethanol that is
52 22 claimed under an E=85 gasoline promotion tax credit as
52 23 provided in the division. This tax credit is repealed on
52 24 January 1, 2007.
52 25 ETHANOL PROMOTION TAX CREDIT. The division creates an
52 26 ethanol promotion tax credit for retail dealers. In order to
52 27 receive this tax credit, the retailer must calculate the total
52 28 gasoline gallonage and the total ethanol gallonage for a
52 29 determination period (calendar year). The tax credit is 5
52 30 cents multiplied by the gallon of ethanol sold. The total
52 31 gallons of ethanol eligible for the ethanol promotion tax
52 32 credit is reduced according to a formula based on a schedule
52 33 starting in 2011. After that, only eligible gallons of
52 34 ethanol are subject to the tax credit. This is determined by
52 35 multiplying the total gasoline sold by a deductible
53 1 percentage, and the resulting product is subtracted from the
53 2 total gallons of ethanol sold by the retail dealer. For the
53 3 year 2011, the deductible percentage is 1 percent. Each year
53 4 after that the deductible percentage increases until 2025,
53 5 when it is 15 percent. The division provides that the
53 6 retailer may claim this tax credit and the E=85 promotion tax
53 7 credit as provided in the division. This tax credit is
53 8 eliminated on January 1, 2026.
53 9 E=85 PROMOTION TAX CREDIT. The division establishes an E=
53 10 85 gasoline promotion tax credit. A retail dealer who sells
53 11 E=85 gasoline is eligible for the tax credit. The tax credit
53 12 begins at 25 cents per gallon of E=85 gasoline sold in
53 13 calendar years 2006 and 2007. After that the rate of the
53 14 amount of the tax credit decreases by year until 2019 when it
53 15 is 1 cent per gallon of E=85 gasoline. The tax credit is
53 16 repealed on January 1, 2020.
53 17 BIODIESEL BLENDED FUEL TAX CREDIT. The division
53 18 establishes a biodiesel blended fuel tax credit. In this
53 19 case, the bioldiesel blended fuel must include at least 2
53 20 percent biodiesel, even though a 1 percent blend satisfies
53 21 standards adopted by the department of agriculture and land
53 22 stewardship under Code chapter 214A. A retail dealer who
53 23 sells diesel fuel is eligible for this new tax credit if the
53 24 retail dealer sells 50 percent or more biodiesel blended fuel.
53 25 The tax credit is 3 cents for the total number of gallons of
53 26 biodiesel blended fuel sold by the retailer. This tax credit
53 27 is repealed on January 1, 2012.
53 28 RETROACTIVE APPLICABILITY. The division provides for the
53 29 applicability of the retail tax credit provisions, including
53 30 by providing that the tax credits apply retroactively
53 31 beginning on and after January 1, 2006.
53 32 DIVISION IV == PETROLEUM REPLACEMENT INITIATIVE. This
53 33 division amends provisions in Code chapter 452A providing for
53 34 the excise tax on motor fuel. The division amends Code
53 35 section 214A.2 which currently provides that after June 30,
54 1 2007, the excise tax for both ethanol and nonethanol is 20
54 2 cents per gallon.
54 3 KEY DETERMINATION PERIODS. The division provides that by
54 4 March 1 after each key determination period, the department of
54 5 revenue must determine whether an ethanol percentage threshold
54 6 has been met. The thresholds are as follows: (1) the
54 7 aggregate distribution must be at least 10 percent ethanol for
54 8 the key determination period beginning January 1, 2009, and
54 9 ending December 31, 2009; (2) the aggregate distribution must
54 10 be at least 15 percent ethanol for the key determination
54 11 period beginning January 1, 2014, and ending December 31,
54 12 2014; (3) the aggregate distribution must be at least 20
54 13 percent ethanol for the key determination period beginning
54 14 January 1, 2019, and ending December 31, 2019; and (4) the
54 15 aggregate distribution must be at least 25 percent ethanol for
54 16 the key determination period beginning January 1, 2024, and
54 17 ending December 31, 2024.
54 18 EXCISE TAXES. According to the division, if an ethanol
54 19 threshold has been met, the excise tax is 20 cents per gallon
54 20 for both ethanol and nonethanol for the next five years. If
54 21 an ethanol threshold has not been met, then starting July 1 of
54 22 the following year the excise tax on nonethanol is increased
54 23 to a special rate for the next five years. The special rate
54 24 is determined by using a formula which multiplies 2 cents by
54 25 an ethanol threshold disparity factor. The factor is
54 26 determined by calculating the difference between the aggregate
54 27 gallons of ethanol sold and the number of aggregate gallons of
54 28 ethanol which were required to be sold to meet the threshold
54 29 during a key determination period.
54 30 REPORTING. The division requires that each retailer report
54 31 its total gasoline gallonage and its total ethanol gallonage
54 32 to the department of revenue by February 1 of each year. The
54 33 department must deliver a report to the governor and the
54 34 legislative services agency including the aggregate gasoline
54 35 gallonage for the previous determination period, the aggregate
55 1 ethanol distribution percentage for the previous determination
55 2 period, the projected aggregate gasoline gallonage, the
55 3 aggregate ethanol gallonage, and the projected ethanol
55 4 threshold percentage disparity for each future key
55 5 determination period.
55 6 DIVISION IV == COORDINATING PROVISIONS == GOVERNMENT
55 7 VEHICLES. This division amends the provisions that require
55 8 state and local government vehicles to operate using ethanol
55 9 blended gasoline. It also amends similar provisions which
55 10 require state agencies to purchase flexible fuel vehicles.
55 11 The division standardizes the language and refers to common
55 12 definitions as created in the division amending Code section
55 13 214A.1 and related standards created in the division amending
55 14 Code section 214A.2.
55 15 DIVISION V == COORDINATING PROVISIONS == MISCELLANEOUS. A
55 16 number of provisions in the Code refer to alcohol or ethanol
55 17 blended gasoline, including E=85 gasoline, and soydiesel or
55 18 biofuel. This division standardizes the language and refers
55 19 to common definitions as created in the division amending Code
55 20 section 214A.1 and related standards created in the division
55 21 amending Code section 214A.2.
55 22 DIVISION VI == CHANGE IN TERMS. This division amends a
55 23 number of provisions by changing the term "oxygenate octane
55 24 enhancer" to "oxygenate", "motor vehicle fuel" to "motor
55 25 fuel", and "motor vehicle fuel pump" to "motor fuel pump" for
55 26 purposes of consistency in chapters throughout the Code, but
55 27 in particular in Code chapters 214A and 452A.
55 28 LSB 5701HV 81
55 29 da:rj/je/5.1