Senate File 294 - Introduced
SENATE FILE
BY KIBBIE, KREIMAN, SCHOENJAHN,
OLIVE, McCOY, BEALL, QUIRMBACH,
HANCOCK, SCHMITZ, WARNSTADT,
STEWART, RAGAN, FRAISE, BARTZ,
BOLKCOM, DOTZLER, JOCHUM,
DEARDEN, HORN, DVORSKY,
SODDERS, APPEL, HOUSER, HOGG,
DANIELSON, BLACK, HECKROTH,
WILHELM, SENG, COURTNEY,
and RIELLY
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act providing for motor fuel containing biodiesel, providing
2 for tax credits, making penalties applicable, and including
3 effective date and applicability provisions.
4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
5 TLSB 2135XS 83
6 da/rj/14
PAG LIN
1 1 DIVISION I
1 2 BIODIESEL FUEL STANDARD
1 3 Section 1. Section 214A.2, subsection 4, paragraph b,
1 4 subparagraph (2), Code 2009, is amended by striking the
1 5 subparagraph.
1 6 Sec. 2. NEW SECTION. 214A.2C STANDARD FOR DIESEL FUEL ==
1 7 BIODIESEL REQUIRED.
1 8 1. A retail dealer shall not advertise for sale or sell
1 9 diesel fuel in this state, unless it is biodiesel fuel.
1 10 2. a. Subsection 1 does not apply to any of the
1 11 following:
1 12 (1) Motors located at an electric generating plant
1 13 regulated by the nuclear regulatory commission. This
1 14 exception shall no longer apply thirty days after the nuclear
1 15 regulatory commission approves the use of biodiesel fuel in
1 16 motors at electric generating plants.
1 17 (2) Railroad locomotives.
1 18 (3) Off=road logging equipment and machinery.
1 19 (4) Vehicles and equipment used exclusively on an aircraft
1 20 landing field.
1 21 b. This subsection is repealed on July 1, 2012.
1 22 Sec. 3. NEW SECTION. 214A.2D STANDARD FOR DIESEL FUEL ==
1 23 BIODIESEL DESIGNATIONS.
1 24 1. A retail dealer shall not advertise or sell biodiesel
1 25 blended fuel unless it is designated B=5 or higher as
1 26 specified in section 214A.2.
1 27 2. The biodiesel blended fuel designation provided in
1 28 subsection 1 shall increase in two threshold periods as
1 29 follows:
1 30 a. For the first threshold period, beginning on July 1,
1 31 2012, and ending June 30, 2015, the biodiesel blended fuel
1 32 must be designated B=10 or higher as specified in section
1 33 214A.2.
1 34 b. For the second threshold period, beginning on July 1,
1 35 2015, the biodiesel blended fuel must be designated B=20 or
2 1 higher as specified in section 214A.2.
2 2 3. a. Notwithstanding subsection 2, a retail dealer is
2 3 not required to advertise for sale or sell biodiesel blended
2 4 fuel designated as higher than B=5 during the cold weather
2 5 months beginning November 1 and ending March 31.
2 6 b. The department may issue a cold weather suspension
2 7 order that suspends the application of paragraph "a" during
2 8 some or all of a threshold period and establish one or more
2 9 temporary biodiesel blended fuel designations applicable for
2 10 the period so long as a biodiesel blended fuel designation is
2 11 not less than B=5 and not more than the biodiesel blended fuel
2 12 designation that would otherwise apply during the threshold
2 13 period. The cold weather suspension order shall be published
2 14 in the Iowa administrative bulletin and take effect as
2 15 provided by the department. Prior to issuing the order, the
2 16 department shall consult with the committee.
2 17 4. a. The department may issue a threshold suspension
2 18 order suspending the application of a biodiesel designation
2 19 during a threshold period as provided in subsection 2, if the
2 20 department determines that any of the following apply:
2 21 (1) Less than five percent of the biodiesel blended fuel
2 22 expected to be sold in this state during the applicable
2 23 threshold period will be produced from a nontraditional
2 24 feedstock which is a biological resource other than an
2 25 agricultural resource traditionally grown or raised in the
2 26 state, including but not limited to algae cultivated for
2 27 biofuels production, waste oils, and tallow.
2 28 (2) No specification established by the United States
2 29 environmental protection agency or A.S.T.M. international
2 30 applies to the biodiesel designation required during the
2 31 applicable threshold period.
2 32 b. The threshold suspension order shall apply during some
2 33 or all of a threshold period and may establish one or more
2 34 temporary biodiesel blended fuel designations applicable for
2 35 the period of suspension so long as the temporary biodiesel
3 1 blended fuel designation is not less than B=5 and not more
3 2 than the biodiesel blended fuel designation that would
3 3 otherwise apply during the threshold period. The threshold
3 4 suspension order shall be published in the Iowa administrative
3 5 bulletin and take effect as provided by the department. Prior
3 6 to issuing the threshold suspension order, the department
3 7 shall consult with the committee.
3 8 5. The department may issue a threshold suspension order
3 9 suspending the application of a biodiesel designation for a
3 10 motor under the control of the nuclear regulatory commission
3 11 during a threshold period, if the nuclear regulatory
3 12 commission has not approved the use of the biodiesel
3 13 designation required during that threshold period. The
3 14 threshold suspension order shall be published in the Iowa
3 15 administrative bulletin and take effect as provided by the
3 16 department. Prior to issuing the threshold suspension order,
3 17 the department shall consult with the committee.
3 18 6. The governor may by executive order adjust the
3 19 biodiesel blended fuel designation as provided in this
3 20 section, if the governor determines that there exists a major
3 21 disparity between the price of biodiesel blended fuel and
3 22 diesel fuel, there is a significant shortage of biodiesel fuel
3 23 supplies in this state, or a systemic market change will cause
3 24 material economic hardship to retail dealers who advertise and
3 25 sell biodiesel blended fuel in this state which can be
3 26 alleviated by adjusting the biodiesel blended fuel. The
3 27 adjusted biodiesel blended fuel designation shall not be less
3 28 than B=5 and not more than the biodiesel blended fuel
3 29 designation that would otherwise apply during the applicable
3 30 threshold period. The executive order shall provide for the
3 31 termination of the adjusted biodiesel blended fuel designation
3 32 by a date certain. After the executive order's termination,
3 33 the biodiesel blended fuel designation shall be restored to
3 34 the amount required for the applicable threshold period.
3 35 Sec. 4. EMERGENCY RULES. The department of agriculture
4 1 and land stewardship shall adopt emergency rules under section
4 2 17A.4, subsection 3, and section 17A.5, subsection 2,
4 3 paragraph "b", to implement the provisions of sections 214A.2C
4 4 and 214A.2D, as enacted in this Act, and the rules shall be
4 5 effective July 1, 2009. Any rules adopted in accordance with
4 6 this section shall also be published as a notice of intended
4 7 action as provided in section 17A.4.
4 8 Sec. 5. EFFECTIVE DATE. This division of this Act takes
4 9 effect on July 1, 2009, except for the provisions authorizing
4 10 the department of agriculture and land stewardship to adopt
4 11 emergency rules and to publish a notice of intended action to
4 12 implement the provisions of sections 214A.2C and 214A.2D, as
4 13 enacted in this Act, which, being deemed of immediate
4 14 importance, take effect upon enactment.
4 15 DIVISION II
4 16 BIODIESEL FUEL LABELING
4 17 Sec. 6. Section 214A.2, subsection 5, Code 2009, is
4 18 amended to read as follows:
4 19 5. Ethanol blended gasoline shall be designated E=xx where
4 20 "xx" is the volume percent of ethanol in the ethanol blended
4 21 gasoline and biodiesel blended fuel shall be designated B=xx
4 22 where "xx" is the volume percent of biodiesel.
4 23 Sec. 7. Section 214A.16, subsection 1, Code 2009, is
4 24 amended to read as follows:
4 25 1. a. If motor fuel containing a renewable fuel ethanol
4 26 blended gasoline is sold from a motor fuel pump, the pump
4 27 shall have affixed a decal identifying the name of the
4 28 renewable fuel ethanol blended gasoline. The decal shall be
4 29 different based on the type of renewable fuel dispensed. If
4 30 the motor fuel pump dispenses ethanol blended gasoline
4 31 classified as higher than standard ethanol blended gasoline
4 32 pursuant to section 214A.2, the decal shall contain the
4 33 following notice: "FOR FLEXIBLE FUEL VEHICLES ONLY".
4 34 b. If biodiesel fuel is sold from a motor fuel pump, the
4 35 pump shall have affixed a decal identifying the biodiesel fuel
5 1 as provided in 16 C.F.R. pt. 306.
5 2 DIVISION III
5 3 BIODIESEL BLENDED FUEL TAX CREDIT
5 4 Sec. 8. Section 422.33, subsection 11C, Code 2009, is
5 5 amended by striking the subsection.
5 6 Sec. 9. 2006 Iowa Acts, chapter 1142, section 49,
5 7 subsection 5, is amended by striking the subsection.
5 8 Sec. 10. Section 422.11P, Code 2009, is repealed.
5 9 Sec. 11. APPLICABILITY. The sections of this division of
5 10 this Act striking section 422.33, subsection 11C, striking
5 11 2006 Iowa Acts, chapter 49, subsection 5, and repealing
5 12 422.11P, apply to a taxpayer claiming a biodiesel tax credit
5 13 for sales of biodiesel blended fuel sold or dispensed on or
5 14 after the effective date of this division of this Act.
5 15 EXPLANATION
5 16 DIVISION I == BIODIESEL FUEL STANDARD. This bill applies
5 17 to the retail sale of diesel fuel as regulated by the
5 18 department of agriculture and land stewardship under Code
5 19 chapter 214A, and specifically biodiesel fuel derived from
5 20 vegetable oils or animal fats that meet departmental standards
5 21 (Code section 214A.2). Biodiesel fuel is designated by "B=xx"
5 22 where "xx" is the volume percent of biodiesel by volume.
5 23 Currently, all biodiesel fuel must be at least B=1 (Code
5 24 section 214A.2).
5 25 A retail dealer is prohibited from advertising for the sale
5 26 or selling diesel fuel unless it is biodiesel fuel. The bill
5 27 provides for a number of exceptions, including for motors
5 28 located at an electric generating plant regulated by the
5 29 nuclear regulatory commission, locomotives, off=road logging
5 30 equipment and machinery, and vehicles and equipment used
5 31 exclusively on an aircraft landing field.
5 32 Under the bill, the lowest designation of biodiesel blended
5 33 fuel that can be marketed is B=5. The bill provides for two
5 34 threshold periods which require that an increasing percentage
5 35 of biodiesel be included in the biodiesel blended fuel. The
6 1 first threshold period, beginning on July 1, 2012, and ending
6 2 June 30, 2015, requires that biodiesel blended fuel must be
6 3 B=10 or higher and the second threshold period beginning on
6 4 July 1, 2015, requires that biodiesel blended fuel be B=20 or
6 5 higher.
6 6 The bill also provides a number of exceptions. First, a
6 7 retail dealer is not required to market biodiesel blended fuel
6 8 designated as higher than B=5 during the cold weather months
6 9 beginning November 1 and ending March 31, unless the
6 10 department issues a cold weather suspension order for some or
6 11 all of those months. The cold weather suspension order may
6 12 establish a temporary biodiesel designation for the period of
6 13 the suspension. Secondly, the department may issue a
6 14 temporary order suspending a threshold period under two
6 15 conditions: (1) less than 5 percent of the biodiesel blended
6 16 fuel expected to be sold in this state during the applicable
6 17 threshold period will be produced from a nontraditional
6 18 feedstock, or (2) no specification established by the United
6 19 States environmental protection agency or A.S.T.M.
6 20 international applies to the biodiesel designation. The
6 21 department may issue a threshold suspension order that applies
6 22 during some or all of a threshold period and may establish one
6 23 or more temporary biodiesel fuel designations applicable for
6 24 the period. The bill also provides that the department may
6 25 suspend the biodiesel fuel standard for motors under the
6 26 control of the nuclear regulatory commission.
6 27 The bill also provides that the governor may by executive
6 28 order adjust the biodiesel blended fuel designation under any
6 29 of three circumstances: (1) a major disparity exists between
6 30 the price of biodiesel blended fuel and diesel fuel; (2) there
6 31 is a significant shortage of biodiesel fuel supplies in this
6 32 state; or (3) a systemic market change will cause material
6 33 economic hardship to retail dealers. The governor must
6 34 establish an adjusted biodiesel blended fuel designation
6 35 during the applicable threshold period.
7 1 EMERGENCY RULEMAKING AND EFFECTIVE DATE. The bill
7 2 authorizes the department of agriculture and land stewardship
7 3 to adopt rules by emergency and by notice of intended action
7 4 in order to implement the biodiesel fuel requirements. The
7 5 provision takes effect upon enactment.
7 6 DIVISION II == BIODIESEL FUEL LABELING. The bill provides
7 7 that a retail dealer who sells biodiesel fuel must affix a
7 8 decal to the motor fuel pump identifying the biodiesel fuel
7 9 when it contains a certain percentage of biodiesel as provided
7 10 by federal law, and specifically the federal trade commission.
7 11 The bill eliminates a state requirement that provides for the
7 12 general labeling of biodiesel fuel sold at motor fuel pumps
7 13 that contain any biodiesel.
7 14 DIVISION III == BIODIESEL BLENDED FUEL TAX CREDIT. The
7 15 bill eliminates provisions for a biodiesel blended fuel tax
7 16 credit available to a retail dealer of biodiesel blended fuel.
7 17 APPLICABLE PENALTIES. A person who violates a provision of
7 18 Code chapter 214A is guilty of a serious misdemeanor with each
7 19 day of a continuing violation consisting of a separate
7 20 offense. The state may also proceed against a person who
7 21 violates the Code chapter by bringing a civil enforcement
7 22 action as a contested case proceeding under Code chapter 17A
7 23 in lieu of a prosecution. A serious misdemeanor is punishable
7 24 by confinement for no more than one year and a fine of at
7 25 least $315 but not more than $1,875. The civil penalty shall
7 26 be for at least $100 but not more than one $1,000 for each
7 27 violation.
7 28 LSB 2135XS 83
7 29 da/rj/14.3