HSB 717 (LSB 6221HC (9) 83)

HOUSE FILE _____

BY  (PROPOSED COMMITTEE ON ENVIRONMENTAL PROTECTION BILL BY CHAIRPERSON OLSON)

A BILL FOR

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

    Section 1.  FINDINGS AND PURPOSE OF THE ACT —— SUSTAINABLE BIODIESEL INITIATIVE.
   1.  The general assembly finds and declares that access to affordable energy has become essential to the functioning of modern economies. However, the uneven distribution of energy supplies among countries and the critical need for energy has created significant vulnerabilities to this nation. Threats to national energy security include the political instability of several energy producing countries, the manipulation of energy supplies, the competition over energy sources, and attacks upon energy supply infrastructure.
   2.  The purpose of this Act is to accomplish the vital goals of promoting sustainable biodiesel that will demonstrate environmental stewardship across its life cycle by maximizing a net energy balance, minimizing negative impacts on natural ecosystems, both globally and locally, and adding value to Iowa commodities; creating wealth; and enhancing the entire community of energy stakeholders.
    Sec. 2.  Section 15G.201A, Code Supplement 2009, is amended to read as follows:
   15G.201A  Classification Designation of renewable fuel.

   For purposes of this subchapter, ethanol blended fuel and biodiesel fuel shall be classified designated in the same manner as provided in section 214A.2.
    Sec. 3.  Section 15G.202, subsection 2, unnumbered paragraph 1, Code 2009, is amended to read as follows:

   The infrastructure board shall be composed of eleven members who shall be appointed by the governor as follows:
    Sec. 4.  Section 15G.202, subsection 2, paragraph c, unnumbered paragraph 1, Code 2009, is amended to read as follows:

   Nine persons Persons based on nominations made by the titular heads of all of the following:
    Sec. 5.  Section 15G.202, subsection 2, paragraph c, subparagraph (4), Code 2009, is amended by striking the subparagraph.
    Sec. 6.  Section 15G.202, subsection 8, Code 2009, is amended to read as follows:
   8.  Six A majority of members of the infrastructure board constitute a quorum and the affirmative vote of a majority of the members present is necessary for any substantive action to be taken by the infrastructure board. The majority shall not include any member who has a conflict of interest and a statement by a member that the member has a conflict of interest is conclusive for this purpose. A vacancy in the membership does not impair the duties of the infrastructure board.
    Sec. 7.  Section 15G.203, subsection 1, paragraph a, subparagraph (1), subparagraph division (b), Code Supplement 2009, is amended to read as follows:
   (b)  Store, blend, Blend and dispense motor fuel from a motor fuel blender pump, as required in this subparagraph division. The ethanol infrastructure must provide for the storage of ethanol or ethanol blended gasoline, or for blending ethanol with gasoline. The ethanol infrastructure must at least include a motor fuel blender pump which dispenses different classifications designations of ethanol blended gasoline and allows E-85 gasoline to be dispensed at all times that the blender pump is operating.
    Sec. 8.  Section 15G.203, subsection 1, paragraph a, subparagraph (2), Code Supplement 2009, is amended to read as follows:
   (2)  Biodiesel infrastructure shall be designed and used exclusively to do any of the following:
   (a)  Store and dispense biodiesel or biodiesel blended fuel designated B-6 or higher.
   (b)  Blend or dispense biodiesel fuel from a motor fuel blender pump which dispenses different designations of biodiesel fuel designated B-6 or higher to be dispensed at all times that the blender pump is operating.
    Sec. 9.  Section 15G.204, subsection 3, paragraph a, subparagraph (1), Code 2009, is amended to read as follows:
   (1)  For improvements to store, blend, or dispense biodiesel fuel from B-2 B-5 or higher but not as high as B-99, fifty percent of the actual cost of making the improvements or fifty thousand dollars, whichever is less.
    Sec. 10.  Section 214A.2, subsection 4, paragraph b, subparagraph (2), Code Supplement 2009, is amended by striking the subparagraph.
    Sec. 11.  NEW SECTION.  214A.2C  Standard for diesel fuel —— biodiesel required.
  A retail dealer shall not advertise for sale or sell diesel fuel in this state, unless it is biodiesel fuel designated as B-5 or higher as specified in section 214A.2.
    Sec. 12.  NEW SECTION.  214A.2D  Standard for diesel fuel —— exceptions.
   1.  Section 214A.2C does not apply to diesel fuel used to power any of the following:
   a.  (1) A motor located at an electric generating plant regulated by the United States nuclear regulatory commission.
   (2)  This paragraph “a” is repealed thirty days after the United States nuclear regulatory commission approves the use of biodiesel fuel designated as B-5 or higher in motors located at electric generating plants that it regulates.
   b.  A railroad locomotive.
   c.  A vehicle used primarily on the grounds of a public airport.
   d.  A motor used to temporarily generate power due to peak demand for electricity or a disruption in the delivery of electricity or natural gas until the delivery of the electricity or natural gas may be resumed.
   2.  Section 214A.2C does not apply during a period that the governor issues a biodiesel suspension order.
   a.  The biodiesel suspension order must include a determination by the governor that any of the following exists:
   (1)  A lack of infrastructure in this state necessary to support the retail sale of biodiesel fuel designated as B-5 or higher.
   (2)  A significant shortage of biodiesel fuel designated as B-5 or higher in this state available for retail sale in this state.
   (3)  A systemic market change in the supplies or prices of biodiesel fuel designated B-5 or higher causing a material economic hardship to the state.
   b.  The biodiesel suspension order may reduce the biodiesel fuel designation otherwise required by section 214A.2C during the period of the suspension. The biodiesel suspension order may apply to the entire state or to specific counties named in the biodiesel suspension order.
   c.  The biodiesel suspension order shall take effect on the date of the order’s publication in the Iowa administrative bulletin unless the biodiesel suspension order specifies a later date. The biodiesel suspension order shall terminate on a date certain as specified in the biodiesel suspension order.
    Sec. 13.  EXISTING INVENTORIES OF DIESEL FUEL.
   1.  a.  Notwithstanding section 214A.2C, diesel fuel inventories, stored at a retail motor fuel site as defined in section 214A.1, existing on the effective date of this Act, may continue to be sold and dispensed.
   b.  Paragraph “a” shall not apply once all diesel fuel inventories existing at a retail motor fuel site as defined in section 214A.1, on the effective date of this Act, have been sold or dispensed.
   2.  Nothing in this section authorizes a retail dealer to acquire diesel fuel other than biodiesel fuel designated B-5 or higher as provided in section 214A.2 on or after the effective date of this Act.
    Sec. 14.  RULES.  The department of agriculture and land stewardship shall adopt rules to implement the provisions of sections 214A.2C and 214A.2D, as enacted in this Act, and the rules shall be effective January 1, 2012.
    Sec. 15.  EFFECTIVE DATES.  The following provision or provisions of this Act take effect as follows:
   1.  Except as provided in subsection 2, this Act takes effect January 1, 2012.
   2.  The amendments in this Act to sections 15G.201A and 15G.202, take effect July 1, 2010.
   3.  The section of this Act requiring the department of agriculture and land stewardship to adopt rules to implement sections 214A.2C and 214A.2D as enacted in this Act, takes effect July 1, 2010.
EXPLANATION
   GENERAL. This bill amends provisions relating to the promotion and use of renewable fuel, and particularly biodiesel fuel, derived from vegetable oils or animal fats that meet standards adopted by the department of agriculture and land stewardship (Code section 214A.2).
   RENEWABLE FUEL INFRASTRUCTURE BOARD. The bill eliminates a person representing the Iowa motor truck association as a member of the renewable fuel infrastructure board. The board, created within the department of economic development, is responsible for promoting renewable fuels by awarding financial incentives for the installation of infrastructure at retail motor fuel sites (Code section 15G.203) and biodiesel terminal facilities (Code section 15G.204).
   BIODIESEL FUEL STANDARD. This bill applies to the retail sale of diesel fuel as regulated by the department of agriculture and land stewardship under Code chapter 214A. Biodiesel fuel is designated by “B-xx” where “xx” is the volume percent of biodiesel by volume (Code section 214A.2). Currently, all biodiesel fuel must be at least B-1 (Code section 214A.2). The bill increases that designation to B-5, and prohibits a retail dealer from advertising for sale or selling diesel fuel unless it is biodiesel fuel. It also provides for a number of exceptions, including for motors located at an electric generating plant regulated by the nuclear regulatory commission, locomotives, vehicles primarily used on the grounds of a public airport, and a motor used to temporarily generate power due to a disruption in the supply of electricity or natural gas. The bill provides that the governor may issue a suspension order to adjust the biodiesel blended fuel designation under any of three circumstances: (1) a lack of infrastructure necessary to support its retail sale, (2) a significant shortage of biodiesel fuel supplies in this state, or (3) a systemic market change causing material economic hardship to the state. The suspension order may apply to all or part of the state. 
   RULEMAKING. The bill requires the department of agriculture and land stewardship to adopt rules in order to implement the biodiesel fuel requirements.
   EFFECTIVE DATE. Generally, the bill takes effect on January 1, 2012, except for provisions relating to the membership of the renewable fuel infrastructure board and departmental authorization to adopt rules required to implement the bill, which take effect on July 1, 2010.