SSB 1179 (LSB 1311XL (15) 89)

SENATE/HOUSE FILE _____

BY  (PROPOSED GOVERNOR BILL)

A BILL FOR

An Act relating to renewable fuel used to power motor vehicles, including by providing for standards and restrictions, infrastructure, tax credits, and requirements for state agencies operating motor vehicles powered by renewable fuel, making appropriations, providing penalties, making penalties applicable, and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

DIVISION I
MOTOR FUEL
PART A
STANDARDS

    Section 1.  Section 214A.1, Code 2021, is amended by adding the following new subsections:
   NEW SUBSECTION.  11A.  “Dispensing unit” means the equipment connected to a motor fuel pump located at a retail motor fuel site, if the equipment includes a nozzle to control the flow of motor fuel discharged from the motor fuel storage tank to an end point including the fuel supply tank of a motor vehicle.
   NEW SUBSECTION.  19A.  “Motor fuel storage and dispensing infrastructure” or “infrastructure” means a motor fuel storage tank, motor fuel pump, and a dispensing unit necessary to keep and dispense motor fuel at a retail motor fuel site, including but not limited to all associated equipment, dispensing units, dispensers, pumps, pipes, hoses, tubes, lines, fittings, valves, filters, seals, and covers.
   NEW SUBSECTION.  26A.  “Restricted use diesel fuel” means diesel fuel that meets the standards of section 214A.2 and is subject to restrictions based on classifications provided in section 214A.32.
   NEW SUBSECTION.  26B.  “Restricted use gasoline” means gasoline that meets the standards of section 214A.2 and is subject to restrictions based on classifications provided in section 214A.31.
   NEW SUBSECTION.  30A.  “Standard diesel fuel” means biodiesel blended fuel that meets the standards of section 214A.2 and is classified as provided in section 214A.32.
   NEW SUBSECTION.  30B.  “Standard gasoline” means ethanol blended gasoline that meets the standards of section 214A.2 and is classified as provided in section 214A.31.
    Sec. 2.  Section 214A.1, subsection 16, Code 2021, is amended to read as follows:
   16.  “Gasoline” means any liquid product prepared, advertised, offered for sale, or sold for use as, or commonly and commercially used as, motor fuel for use in a spark-ignition, internal combustion engine, and which if it meets the specifications standards provided in section 214A.2.
    Sec. 3.  Section 214A.1, subsection 30, Code 2021, is amended by striking the subsection.
    Sec. 4.  NEW SECTION.  214A.1A  Disciplinary action.
   The department may refuse to issue or renew and may suspend or revoke a license issued to a retail dealer pursuant to section 214.2 for any violation of this chapter, including rules adopted by the department pursuant to section 214A.2.
    Sec. 5.  Section 214A.2, subsection 3, paragraph b, Code 2021, is amended by striking the paragraph and inserting in lieu thereof the following:
   b.  If the motor fuel is advertised for sale or sold as ethanol or ethanol blended gasoline, the motor fuel must comply with departmental standards which shall meet all of the following requirements:
   (1)  (a)  Ethanol must be a fuel grade agriculturally derived ethyl alcohol and must meet the requirements of 27 C.F.R. pts. 20 and 21 and A.S.T.M. international specification D4806 for blending with gasoline for use as automotive spark-ignition engine fuel, or a successor A.S.T.M. international specification, as established by rules adopted by the department.
   (b)  Ethanol shall be classified as E-100.
   (c)  Gasoline containing no ethanol or trace amounts of ethanol shall be classified as E-0.
   (2)  Gasoline blended with ethanol must meet requirements based in part or in whole on A.S.T.M. international specification D4814, or a successor A.S.T.M. international specification, as established by rules adopted by the department.
   (3)  Except as otherwise provided in this subparagraph, ethanol blended gasoline shall be classified as E-xx where “xx” is the volume percent of ethanol in the ethanol blended gasoline. However, all of the following shall apply:
   (a)  Ethanol blended gasoline with a percentage of at least nine but not more than ten percent by volume of ethanol shall be classified as E-10.
   (b)  Ethanol blended gasoline with a percentage of fifteen percent by volume of ethanol shall be classified as E-15.
   (c)  Ethanol blended gasoline with a percentage of at least seventy but not more than eighty-five percent by volume of ethanol shall be classified as E-85. E-85 gasoline must meet A.S.T.M. international specification D5798, or a successor A.S.T.M. international specification, as established by rules adopted by the department.
   (4)  In ensuring that ethanol blended gasoline meets the classification requirements of this section, the department shall take into account reasonable variations due to testing and other limitations.
   (5)  Ethanol blended gasoline classified as higher than E-20, other than E-85, must conform to A.S.T.M. international specifications adopted by the department.
    Sec. 6.  Section 214A.2, subsection 3, paragraph c, Code 2021, is amended by adding the following new subparagraph:
   NEW SUBPARAGRAPH.  (3)  (a)  Biobutanol blended gasoline shall be classified as Bu-xx where “xx” is the volume percent of biobutanol in the biobutanol blended gasoline.
   (b)  In ensuring that biobutanol blended gasoline meets the classification requirements of this section, the department shall take into account reasonable variations due to testing and other limitations.
    Sec. 7.  Section 214A.2, subsection 4, paragraph b, subparagraph (1), Code 2021, is amended by adding the following new subparagraph divisions:
   NEW SUBPARAGRAPH DIVISION.  (a)  Biodiesel shall be classified as B-100.
   NEW SUBPARAGRAPH DIVISION.  (b)  Diesel fuel containing no biodiesel or trace amounts of biodiesel shall be classified as B-0.
    Sec. 8.  Section 214A.2, subsection 4, paragraph b, Code 2021, is amended by adding the following new subparagraph:
   NEW SUBPARAGRAPH.  (04)  (a)  Biodiesel blended fuel shall be classified B-xx where “xx” is the volume percent of biodiesel in the biodiesel blended fuel.
   (b)  In ensuring that biodiesel blended fuel meets the classification requirements of this section, the department shall take into account reasonable variations due to testing and other limitations.
    Sec. 9.  Section 214A.2, subsection 4, paragraph b, subparagraph (4), Code 2021, is amended to read as follows:
   (4)  Biodiesel blended fuel classified as B-6 or higher but not higher than up to and including B-20 must conform to A.S.T.M. international specification D7467, or a successor A.S.T.M. international specification, as established by rules adopted by the department.
    Sec. 10.  Section 214A.2, subsection 4, paragraph b, Code 2021, is amended by adding the following new subparagraph:
   NEW SUBPARAGRAPH.  (5)  Biodiesel blended fuel classified as higher than B-20 must conform to A.S.T.M. international specifications adopted by the department.
    Sec. 11.  Section 214A.2, subsection 5, Code 2021, is amended by striking the subsection.
    Sec. 12.  Section 214A.3, subsection 2, Code 2021, is amended to read as follows:
   2.  For a renewable fuel, all of the following apply:
   a.  A person shall not knowingly falsely advertise that a motor fuel for sale is a renewable fuel or is not a renewable fuel.
   b.  (1)  Ethanol blended A person shall not knowingly falsely advertise that gasoline sold by a dealer shall be designated according to its classification as provided in section 214A.2 for sale is or is not restricted use gasoline. However, a person advertising E-9 or E-10 gasoline may only designate it as ethanol blended gasoline. A person advertising ethanol blended gasoline formulated with a percentage of between seventy and eighty-five percent by volume of ethanol shall designate it as E-85. A person shall not knowingly falsely advertise ethanol blended gasoline for sale by using an inaccurate designation in violation of this subparagraph classification as provided in section 214A.2.
   (2)  A person shall not knowingly falsely advertise biobutanol blended gasoline for sale by using an inaccurate designation classification as provided in section 214A.2.
   (3)  A person shall not knowingly falsely advertise biodiesel that diesel fuel for sale is or is not restricted use diesel fuel. A person shall not knowingly falsely advertise restricted use biodiesel fuel for sale by using an inaccurate designation classification as provided in section 214A.2.
    Sec. 13.  Section 214A.16, subsection 1, Code 2021, is amended to read as follows:
   1.  a.  If ethanol blended a retail dealer advertises for sale or sells restricted use gasoline is sold from a motor fuel pump dispensing unit, the motor fuel pump dispensing unit shall have affixed a decal identifying the ethanol blended gasoline is restricted use gasoline.
   b.  If the motor fuel pump dispenses a retail dealer advertises for sale or sells ethanol blended gasoline classified as E-11 to E-15 for use in gasoline-powered vehicles not required to be flexible fuel vehicles from a dispensing unit, the motor fuel pump dispensing unit shall have affixed a decal as prescribed by the United States environmental protection agency, including as provided in 40 C.F.R. pt. 80.
   c.  If the motor fuel pump dispenses a retail dealer advertises for sale or sells ethanol blended gasoline classified as higher than standard ethanol blended gasoline pursuant to section 214A.2 E-85 from a dispensing unit, the dispensing unit shall have affixed a decal shall contain language that identifies the ethanol blended gasoline is for use in flexible fuel vehicles as prescribed by the United States environmental protection agency.
   d.  If a retail dealer advertises for sale or sells biobutanol blended gasoline is sold from a motor fuel pump dispensing unit, the motor fuel pump dispensing unit shall have affixed a decal identifying the biobutanol blended gasoline.
   e.  If a retail dealer advertises for sale or sells biodiesel blended fuel is sold from a motor fuel pump dispensing unit, the motor fuel pump dispensing unit shall have affixed a decal identifying the biodiesel blended fuel as provided in 16 C.F.R. pt. 306.
   f.  If a retail dealer advertises for sale or sells restricted use diesel fuel from a dispensing unit, the dispensing unit shall have affixed a decal identifying the diesel fuel as restricted use diesel fuel.
    Sec. 14.  NEW SECTION.  214A.31  Renewable fuel requirements —— standard gasoline and restricted use gasoline.
   1.  a.  A retail dealer may advertise for sale or sell standard gasoline classified as E-10 or higher as provided in section 214A.2 from any number of dispensing units located at a retail motor fuel site.
   b.  Except as provided in subsection 3, a retail dealer shall not advertise for sale or sell restricted use gasoline classified as E-0 from more than one dispensing unit located at a retail motor fuel site.
   c.  This subsection is repealed January 1, 2025.
   2.  a.  A retail dealer may advertise for sale or sell standard gasoline classified as E-15 or higher as provided in section 214A.2 from any number of dispensing units located at a retail motor fuel site.
   b.  On and after January 1, 2025, except as provided in subsection 3, a retail dealer shall not advertise for sale or sell restricted use gasoline classified as E-0 or ethanol blended gasoline classified as E-10 and up to but not including E-15 from more than one dispensing unit located at a retail motor fuel site.
   3.  A retail dealer may advertise for sale or sell restricted use gasoline from one or more dispensing units located at a restricted retail motor fuel site. For purposes of this section, a restricted retail motor fuel site is limited to any of the following:
   a.  An airport as defined in section 328.1.
   b.  A facility primarily used to support motor vehicles that are not registered for highway use, including but not limited to a location dedicated to motor vehicle racing.
   c.  A marina that provides a secured mooring or dry dock storage for watercraft as defined in section 462A.2.
   d.  A location that is primarily used to store or sell any of the following:
   (1)  Motor vehicles manufactured before 1985.
   (2)  All-terrain vehicles or motorcycles, as those terms are defined in section 321.1, or snowmobiles as defined in section 321G.1.
    Sec. 15.  NEW SECTION.  214A.32  Renewable fuel requirements —— standard diesel fuel and restricted use diesel fuel.
   1.  a.  A retail dealer may advertise for sale or sell standard diesel fuel classified as B-20 or higher from any number of dispensing units located at a retail motor fuel site.
   b.  Except as otherwise provided in this section, a retail dealer shall not advertise for sale or sell restricted use diesel fuel which is diesel fuel classified as B-0 or biodiesel blended fuel classified as B-1 and up to but not including B-20, from more than one dispensing unit located at a retail motor fuel site.
   2.  a.  A retail dealer may advertise for sale or sell restricted use diesel fuel which is biodiesel blended fuel classified as B-5 or higher from more than one dispensing unit located at a retail motor fuel site for each annual period beginning October 1 and ending April 14.
   b.  (1)  A retail dealer may advertise for sale or sell restricted use diesel fuel which is biodiesel blended fuel classified as B-11 or higher from more than one dispensing unit located at a retail motor fuel site during any of the following periods:
   (a)  From the effective date of this division of this Act until September 30, 2021.
   (b)  From April 15, 2022, until September 30, 2022.
   (c)  From April 15, 2023, until September 30, 2023.
   (2)  This paragraph “b” is repealed October 1, 2023.
   3.  A retail dealer may advertise for sale or sell restricted use diesel fuel from one or more dispensing units located at a restricted retail motor fuel site. For purposes of this section, a restricted retail motor fuel site is limited to any of the following:
   a.  An airport as defined in section 328.1.
   b.  An electric generating plant regulated by the United States nuclear regulatory commission.
   c.  A facility storing and serving railroad locomotives.
    Sec. 16.  NEW SECTION.  214A.33  Renewable fuel —— restricted use gasoline or restricted use diesel fuel waiver.
   1.  The governor may issue or renew an executive order or the secretary of agriculture may issue or renew an administrative order temporarily waiving a requirement that a retail dealer comply with section 214A.31 or 214A.32.
   2.  The order shall allow the retail dealer to advertise for sale and sell restricted use gasoline or restricted use diesel fuel from any number of dispensing units at the retail dealer’s retail motor fuel site. However, the retail dealer shall not advertise for sale or sell restricted use gasoline or restricted use diesel fuel unless the fuel complies with all of the following:
   a.  For gasoline, it must be ethanol blended gasoline classified as E-10 or higher.
   b.  For diesel fuel, on and after April 15, 2024, during any part of the period beginning April 15 and ending September 30, it must be biodiesel blended fuel classified as B-11 or higher.
   3.  The order must be supported by credible evidence that the retail dealer has not been able to reasonably obtain the required classification of renewable fuel to offer for sale or sell at the retail dealer’s retail motor fuel site.
   4.  An order shall not apply to more than one retail motor fuel site.
   5.  The department shall publish a copy of the order on the department’s internet site within ten days after its issuance.
   6.  The order shall expire six months from the date of its issuance, unless a shorter period is stated in the order.
    Sec. 17.  NEW SECTION.  214A.34  Renewable fuel —— restricted use gasoline or diesel fuel suspension.
   1.  The governor may issue or renew an executive order suspending a requirement that a retail dealer comply with section 214A.31 or 214A.32 statewide or in a geographic region of the state.
   2.  The executive order shall allow retail dealers to advertise for sale and sell restricted use gasoline or restricted use diesel fuel from any number of dispensing units at retail motor fuel sites covered by the executive order. However, a retail dealer shall not advertise for sale or sell restricted use gasoline or restricted use diesel fuel unless the fuel complies with all of the following:
   a.  For gasoline, it must be ethanol blended gasoline classified as E-10 or higher.
   b.  For diesel fuel, on and after April 15, 2024, during any part of the period beginning April 15 and ending September 30, it must be biodiesel blended fuel classified as B-11 or higher.
   3.  The executive order must be based on the governor’s determination that it is not commercially feasible for the retail dealers to obtain the required classification of renewable fuel to offer for sale or sell at retail motor fuel sites in this state or the region described in the executive order.
   4.  The executive order shall take effect on its date of publication in the Iowa administrative bulletin, unless the order specifies a later date. The order shall expire six months from the date of its publication unless a shorter period is stated in the order.

PART B
WEIGHTS AND MEASURES
    Sec. 18.  NEW SECTION.  214.2A  Disciplinary action.
   The department may refuse to issue or renew and may suspend or revoke a license issued to a retail dealer pursuant to section 214.2 for a violation of this chapter, or chapter 214A, including rules adopted by the department pursuant to section 214A.2.

PART C
EFFECTIVE DATE
    Sec. 19.  EFFECTIVE DATE.  This division of this Act, being deemed of immediate importance, takes effect upon enactment.
DIVISION II
INFRASTRUCTURE

PART A
FINANCIAL INCENTIVES FOR RETAIL MOTOR FUEL SITES
    Sec. 20.  Section 159A.12, Code 2021, is amended to read as follows:
   159A.12  Classification Classifications of renewable motor fuel.
   For purposes of this subchapter, all of the following apply:
   1.  Gasoline, ethanol, and ethanol blended fuel and biodiesel fuel gasoline shall be classified in the same manner as provided in section 214A.2.
   2.  Diesel fuel, biodiesel fuel, and biodiesel blended fuel shall be classified in the same manner as provided in section 214A.2.
    Sec. 21.  Section 159A.14, subsection 1, Code 2021, is amended to read as follows:
   1.  The purpose of the program is to improve retail motor fuel sites by installing, replacing, or converting infrastructure to be used to store, blend, or dispense, or blend and dispense renewable fuel. The infrastructure shall be ethanol infrastructure or biodiesel infrastructure.
   a.  (1)  Ethanol infrastructure shall be designed and used exclusively to do any of the following:
   (a)  (1)  Store and dispense E-15 gasoline ethanol classified as E-100 or store ethanol blended gasoline classified as E-85 or higher. At least for the period beginning on September 16 and ending on May 31 of each year, the ethanol infrastructure must be used to store and dispense E-15 gasoline as a registered fuel recognized by the United States environmental protection agency.
   (b)  (2)  Store and dispense ethanol blended gasoline classified as E-85 gasoline or higher.
   (c)  (3)  Store, ethanol classified as E-100 or store ethanol blended gasoline classified as E-85 or higher to blend, and dispense motor fuel ethanol or ethanol blended gasoline classified as E-85 or higher from a motor fuel blender pump. The ethanol infrastructure must be used 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 of ethanol blended gasoline and allows E-85 gasoline to be dispensed at all times that the blender pump is operating.
   (2)  b.  (1)  Biodiesel infrastructure shall be designed and used exclusively to do any of the following:
   (a)  Store biodiesel classified as B-100 or store biodiesel blended fuel classified as B-20 or higher.
   (a)  (b)  Store and dispense biodiesel or biodiesel blended fuel classified as B-20 or higher.
   (b)  (c)  Blend or Store biodiesel classified as B-100 or store biodiesel blended fuel classified as B-20 or higher, to blend and dispense biodiesel blended fuel classified as B-20 or higher from a motor fuel blender pump.  The biodiesel infrastructure must at least include a motor fuel blender pump which dispenses different classifications of biodiesel blended fuel and allows B-20 to be dispensed at all times that the blender pump is operating.
   (2)  This paragraph “b” is repealed July 1, 2024.
   b.  c.  The infrastructure must be part of the premises of a retail motor fuel site operated by a retail dealer. The infrastructure shall not include a tank vehicle.
    Sec. 22.  Section 159A.14, subsection 5, Code 2021, is amended to read as follows:
   5.  An award of financial incentives to a participating person shall be on a cost-share basis in the form of a grant. To participate in the program, an eligible person must execute a cost-share agreement with the department as approved by the infrastructure board in which the person contributes a percentage of the total costs related to improving the retail motor fuel site. A cost-share agreement shall be for a three-year period or a five-year period. A cost-share agreement shall include provisions for standard financial incentives or standard financial incentives and supplemental financial incentives as provided in this subsection. The infrastructure board may approve multiple improvements to the same retail motor fuel site for the full amount available for both ethanol infrastructure and biodiesel infrastructure so long as the improvements for ethanol infrastructure and for biodiesel infrastructure are made under separate cost-share agreements.
   a.  (1)  Except as provided in paragraph “b”, a A participating person may be awarded standard financial incentives to make improvements to improve a retail motor fuel site by installing, replacing, or converting infrastructure to store ethanol classified as E-100, to store and dispense ethanol blended gasoline classified as E-85 or higher, or to blend and dispense ethanol blended gasoline classified as E-85 or higher.  A cost-share agreement shall be for a three-year or a five-year period. The standard financial incentives awarded to a participating person shall not exceed the following:
   (a)  For a three-year cost-share agreement, fifty percent of the actual cost of making the improvement or thirty thousand dollars, whichever is less.
   (b)  For a five-year cost-share agreement, seventy percent of the actual cost of making the improvement or fifty thousand dollars, whichever is less.
   (2)  The infrastructure board may approve multiple awards of standard financial incentives to make improvements to a retail motor fuel site so long as the total amount of the awards for ethanol infrastructure or biodiesel infrastructure does not exceed the limitations provided in subparagraph (1).
   b.  A participating person may be awarded standard financial incentives to improve a retail motor fuel site by installing, replacing, or converting infrastructure to store biodiesel classified as B-100, store and dispense biodiesel blended fuel classified as B-20 or higher, or to blend and dispense biodiesel blended fuel classified as B-20 or higher.
   (1)  The standard financial incentives shall be awarded to a participating person pursuant to a three-year cost-share agreement not to exceed fifty percent of the actual cost of making the improvement or thirty thousand dollars, whichever is less.
   (2)  As part of the agreement, the participating person must agree to sell biodiesel blended fuel classified as B-20 or higher from April 15 to September 30 during each year that the agreement is in effect.
   (3)  This paragraph “b” is repealed July 1, 2024.
   c.  In addition to any standard financial incentives awarded to a participating person under paragraph “a” this subsection, the participating person may be awarded supplemental financial incentives to make improvements to a retail motor fuel site to do any of the following:
   (1)  Upgrade or replace a dispenser which is part of gasoline storage and dispensing infrastructure used to store and dispense E-85 gasoline as provided in section 455G.31. The participating person is only eligible to be awarded the supplemental financial incentives if the person installed the dispenser not later than sixty days after July 27, 2011. The supplemental financial incentives awarded to the participating person shall not exceed seventy-five percent of the actual cost of making the improvement or thirty thousand dollars, whichever is less.
   (2)  To improve additional retail motor fuel sites owned or operated by a participating person within a twelve-month period as provided in the cost-share agreement. The supplemental financial incentives shall be used for the installation of an additional tank and associated infrastructure at each such retail motor fuel site. A participating person may be awarded supplemental financial incentives under this subparagraph and standard financial incentives under paragraph “a” to improve the same motor fuel site. The supplemental financial incentives awarded to the participating person shall not exceed twenty-four thousand dollars. The participating person shall be awarded the supplemental financial incentives on a cumulative basis according to the schedule provided in this subparagraph paragraph, which shall not exceed the following:
   (a)  (1)  For the second retail motor fuel site, six thousand dollars.
   (b)  (2)  For the third retail motor fuel site, six thousand dollars.
   (c)  (3)  For the fourth retail motor fuel site, six thousand dollars.
   (d)  (4)  For the fifth retail motor fuel site, six thousand dollars.
    Sec. 23.  Section 159A.16, subsection 3, Code 2021, is amended to read as follows:
   3.  Moneys in the renewable fuel infrastructure fund are appropriated to the department exclusively to support and market the renewable fuel infrastructure programs as provided in sections 159A.14 and 159A.15, and as allocated in financial incentives by the renewable fuel infrastructure board created in section 159A.13.
   a.  (1)  For each fiscal year of the period beginning July 1, 2021, and ending June 30, 2024, not more than one million two hundred fifty thousand dollars shall be allocated to support the renewable fuel infrastructure program for retail motor fuel sites as provided in section 159A.14. The moneys shall be used exclusively to finance the installation, replacement, or conversion of infrastructure to be used to store biodiesel, or store and dispense biodiesel blended fuel, or blend and dispense biodiesel blended fuel as provided in that section.
   (2)  This paragraph “a” is repealed July 1, 2024.
   b.  Up to For the fiscal year beginning July 1, 2021, and for each fiscal year thereafter, not more than fifty thousand dollars shall be allocated each fiscal year to the department to support the administration of the programs.
   c.  The For the fiscal year beginning July 1, 2021, and for each fiscal year thereafter, the department may use up to one and one-half percent of the program funds to market the programs. Otherwise the moneys shall not be transferred, used, obligated, appropriated, or otherwise encumbered except to allocate as financial incentives under the programs.
    Sec. 24.  NEW SECTION.  159A.17  Appropriation.
   For the fiscal year beginning July 1, 2021, and ending June 30, 2022, and for each fiscal year thereafter, there is appropriated from the general fund of the state to the renewable fuel infrastructure fund created in section 159A.16 five million dollars.
    Sec. 25.  RENEWABLE FUEL INFRASTRUCTURE AGREEMENTS.  The department of agriculture and land stewardship shall continue to administer any outstanding cost-share agreement executed prior to July 1, 2024, in which a participating person was awarded a grant to improve a retail motor fuel site by installing, replacing, or converting infrastructure to be used to store and dispense biodiesel blended fuel or blend and dispense biodiesel blended fuel as provided in section 159A.14, as amended by this Act.

PART B
REQUIREMENTS FOR STORAGE AND DISPENSING INFRASTRUCTURE
    Sec. 26.  Section 323.4A, subsection 2, paragraphs a and b, Code 2021, are amended to read as follows:
   a.  Installing, converting, or operating a storage tank or a dispenser located on the distributor’s or dealer’s business premises for use in storing or dispensing renewable fuel. However, this paragraph does not apply to a dealer or distributor whose business premises are leased from the other party furnishing the renewable fuel.
   b.  Using a dispenser to dispense ethanol blended gasoline, including gasoline with a specified blend or a range of blends under chapter 214A, if the dispenser is approved as required by the state fire marshal for dispensing the specified blend or range of blends, including as provided in section 455G.31.
    Sec. 27.  NEW SECTION.  455G.32  Definitions.
   As used in this subchapter unless the context otherwise requires:
   1.  “Motor fuel” means the same as defined in section 214A.1.
   2.  “Motor fuel storage and dispensing infrastructure” means the same as defined in section 214A.1. 
   3.  “Retail dealer” means the same as defined in section 214A.1.
    Sec. 28.  NEW SECTION.  455G.33  Classifications.
   For purposes of this subchapter, motor fuel shall be classified in the same manner as provided in section 214A.2.
    Sec. 29.  NEW SECTION.  455G.34  Restrictions.
   1.  A retail dealer shall not install, replace, or convert motor fuel storage and dispensing infrastructure unless the installed, replaced, or converted infrastructure is capable of storing and dispensing ethanol blended gasoline classified as E-85 or higher.
   2.  The infrastructure must be all of the following:
   a.  Listed as compatible for use with ethanol blended gasoline classified as E-85 or higher by either an independent testing laboratory approved by the manufacturer or by underwriters laboratories.
   b.  Approved by the state fire marshal subject to conditions determined necessary by the state fire marshal. The state fire marshal may waive the requirement in paragraph “a” upon satisfaction that a substitute requirement serves the same purpose.
    Sec. 30.  REPEAL.  Section 455G.31, Code 2021, is repealed.

PART C
EFFECTIVE DATE
    Sec. 31.  EFFECTIVE DATE.  This division of this Act, being deemed of immediate importance, takes effect upon enactment.

DIVISION III
TAXATION
    Sec. 32.  Section 422.11O, subsection 8, Code 2021, is amended to read as follows:
   8.  This section is repealed on January 1, 2025 2029.
    Sec. 33.  Section 422.11P, subsection 4, Code 2021, is amended to read as follows:
   4.  For a retail dealer whose tax year is on a calendar year basis, the retail dealer shall calculate the amount of the tax credit by multiplying a designated rate by the retail dealer’s total biodiesel blended fuel gallonage as provided in section 452A.31 which qualifies under this subsection.
   a.  In order to qualify for the tax credit, the biodiesel blended fuel must be classified as B-5 B-11 or higher as provided in paragraph “b” this subsection.
   b.  (1)  Beginning January 1, 2018 2022, the designated rate is determined as follows: 
   (1)  For biodiesel blended fuel classified as B-5 or higher but not as high as B-11, the designated rate is three and one-half cents.
   (2)  For biodiesel blended fuel classified as B-11 or higher, the designated rate is five and one-half cents.
   (a)  During the period beginning January 1 and ending April 14 for biodiesel blended fuel classified as B-11 or higher, the designated rate is four cents.
   (b)  During the period beginning April 15 and ending September 30 for biodiesel blended fuel classified as B-20 or higher, the designated rate is six cents.
   (c)  During the period beginning October 1 and ending December 30 for biodiesel blended fuel classified as B-11 or higher, the designated rate is four cents.
   (2)  This paragraph “b” is repealed January 1, 2024.
   c.  Beginning January 1, 2024, the designated rate is determined as follows:
   (1)  During the period beginning January 1 and ending April 14 for biodiesel blended fuel classified as B-11 or higher, the designated rate is four cents.
   (2)  During the period beginning April 15 and ending September 30 for biodiesel blended fuel classified as B-30 or higher, the designated rate is ten cents.
   (3)  During the period beginning October 1 and ending December 30 for biodiesel blended fuel classified as B-11 or higher, the designated rate is four cents.
    Sec. 34.  Section 422.11P, subsection 8, Code 2021, is amended to read as follows:
   8.  This section is repealed January 1, 2025 2029.
    Sec. 35.  Section 422.11Y, subsection 4, paragraph b, Code 2021, is amended to read as follows:
   b.  The Beginning January 1, 2022, the designated rate of the tax credit for the following three periods within each calendar year is as follows:
   (1)  For the first period beginning January 1 and ending May 31, three cents.
   (2)  For the second period beginning June 1 and ending September 15, ten cents.
   (3)  For the third period beginning September 16 and ending December 31, three cents.
    Sec. 36.  Section 422.11Y, subsection 9, Code 2021, is amended to read as follows:
   9.  This section is repealed on January 1, 2025 2029.
    Sec. 37.  Section 422.33, subsection 11B, paragraph c, Code 2021, is amended to read as follows:
   c.  This subsection is repealed on January 1, 2025 2029.
    Sec. 38.  Section 422.33, subsection 11C, paragraph c, Code 2021, is amended to read as follows:
   c.  This subsection is repealed on January 1, 2025 2029.
    Sec. 39.  Section 422.33, subsection 11D, paragraph c, Code 2021, is amended to read as follows:
   c.  This subsection is repealed on January 1, 2025 2029.
    Sec. 40.  Section 452A.12, subsection 2, Code 2021, is amended to read as follows:
   2.  A person while transporting motor fuel or undyed special fuel from a refinery or marine or pipeline terminal in this state or from a point outside this state over the highways of this state in service other than that under subsection 1 shall carry in the vehicle a loading invoice showing the name and address of the seller or consignor, the date and place of loading, and the kind and quantity of motor fuel or special fuel loaded, together with invoices showing the kind and quantity of each delivery and the name and address of each purchaser or consignee. An invoice carried pursuant to this subsection for ethanol blended gasoline or biodiesel blended fuel shall state its designation classification as provided in section 214A.2.
    Sec. 41.  Section 452A.31, subsection 3, paragraph a, subparagraph (2), Code 2021, is amended to read as follows:
   (2)  (a)  The total B-11 gallonage which is the total number of gallons of biodiesel blended fuel classified as B-11 or higher up to but not including B-20.
   (b)  The total B-20 gallonage which is the total number of gallons of biodiesel blended fuel classified as B-20 or higher up to but not including B-30.
   (c)  The total B-30 gallonage which is the total number of gallons of biodiesel blended fuel classified as B-30 or higher up to and including B-99.
    Sec. 42.  2006 Iowa Acts, chapter 1142, section 49, subsection 3, as amended by 2011 Iowa Acts, chapter 113, section 20, and 2016 Iowa Acts, chapter 1106, section 6, is amended to read as follows:
   3.  For a retail dealer who may claim an E-85 gasoline promotion tax credit under section 422.11O or 422.33, subsection 11B, as enacted in this Act and amended in subsequent Acts, in calendar year 2024 2028 and whose tax year ends prior to December 31, 2024 2028, the retail dealer may continue to claim the tax credit in the retail dealer’s following tax year. In that case, the tax credit shall be calculated in the same manner as provided in section 422.11O or 422.33, subsection 11B, as enacted in this Act and amended in subsequent Acts, for the remaining period beginning on the first day of the retail dealer’s new tax year until December 31, 2024 2028. For that remaining period, the tax credit shall be calculated in the same manner as a retail dealer whose tax year began on the previous January 1 and who is calculating the tax credit on December 31, 2024 2028.
    Sec. 43.  2011 Iowa Acts, chapter 113, section 31, as amended by 2016 Iowa Acts, chapter 1106, section 10, is amended to read as follows:
   SEC. 31.  TAX CREDIT AVAILABILITY.  For a retail dealer who may claim a biodiesel blended fuel promotion tax credit under section 422.11P or 422.33, subsection 11C, as amended in this Act and amended in subsequent Acts, in calendar year 2024 2028, and whose tax year ends prior to December 31, 2024 2028, the retail dealer may continue to claim the tax credit in the retail dealer’s following tax year. In that case, the tax credit shall be calculated in the same manner as provided in section 422.11P or 422.33, subsection 11C, as amended in this Act and amended in subsequent Acts, for the remaining period beginning on the first day of the retail dealer’s new tax year until December 31, 2024 2028. For that remaining period, the tax credit shall be calculated in the same manner as a retail dealer whose tax year began on the previous January 1 and who is calculating the tax credit on December 31, 2024 2028.
    Sec. 44.  2011 Iowa Acts, chapter 113, section 37, as amended by 2016 Iowa Acts, chapter 1106, section 3, is amended to read as follows:
   SEC. 37.  TAX CREDIT AVAILABILITY.  For a retail dealer who may claim an E-15 plus gasoline promotion tax credit under section 422.11Y or 422.33, subsection 11D, as enacted in this Act and amended in subsequent Acts, in calendar year 2024 2028, and whose tax year ends prior to December 31, 2024 2028, the retail dealer may continue to claim the tax credit in the retail dealer’s following tax year. In that case, the tax credit shall be calculated in the same manner as provided in section 422.11Y or 422.33, subsection 11D, as enacted in this Act and amended in subsequent Acts, for the remaining period beginning on the first day of the retail dealer’s new tax year until December 31, 2024 2028. For that remaining period, the tax credit shall be calculated in the same manner as a retail dealer whose tax year began on the previous January 1 and who is calculating the tax credit on December 31, 2024 2028.
    Sec. 45.  EFFECTIVE DATE.  This division of this Act takes effect January 1, 2022.
DIVISION IV
RENEWABLE FUEL USE BY STATE MOTOR VEHICLES

    Sec. 46.  Section 8A.362, subsection 3, paragraph b, Code 2021, is amended by striking the paragraph and inserting in lieu thereof the following:
   b.  The director shall provide for the purchase and operation of motor vehicle fuel and motor vehicles in the manner provided in section 8A.362A.
    Sec. 47.  NEW SECTION.  8A.362A  Definitions and classifications.
   1.  As used in section 8A.362B and 8A.362C, unless the context otherwise requires:
   a.  “Biodiesel blended fuel” means the same as defined in section 214A.1.
   b.  “Biofuel” means the same as defined in section 214A.1.
   c.  “Determination period” means any twelve-month period beginning January 1 and ending December 31.
   d.  “Ethanol blended gasoline” means the same as defined in section 214A.1.
   e.  “Renewable fuel” means ethanol blended gasoline or biodiesel blended gasoline that meets the standards for that type of motor fuel as provided in section 214A.2.
   2.  For purposes of sections 8A.362B and 8A.362C, a renewable fuel shall be classified in the same manner as provided in section 214A.2.
    Sec. 48.  NEW SECTION.  8A.362B  Motor vehicle purchases —— renewable fuels.
   1.  A gasoline-powered motor vehicle, or a diesel-powered motor vehicle, operating under section 8A.362, shall be powered using the highest classification of renewable fuel if all of the following apply:
   a.  The manufacturer of the motor vehicle expressly warrants that the classification of renewable fuel is compatible with the motor vehicle’s normal operation.
   b.  That classification of renewable fuel is commercially available in the region where the motor vehicle is being operated.
   c.  No emergency situation exists that requires the immediate use of a motor fuel regardless of whether it has been blended with a biofuel.
   2.  If the highest classification of renewable fuel is able to be used to power a motor vehicle as provided in subsection 1, a state-issued credit card shall not be used to purchase motor fuel other than the highest classification of motor fuel.
   3.  A motor vehicle subject to this section shall be affixed with a brightly colored, highly visible sticker which notifies the traveling public that the motor vehicle is powered using the highest classification of renewable fuel. However, the sticker is not required to be affixed to an unmarked vehicle used for purposes of providing law enforcement or security.
   4.  As part of the department’s competitive bidding procedure for the purchase of a diesel-powered motor vehicle, the director shall require that a bidder certify that the motor vehicle’s manufacturer expressly warrants that the motor vehicle is capable of being powered using biodiesel blended fuel classified as B-20 or higher.
    Sec. 49.  NEW SECTION.  8A.362C  Motor vehicle purchases —— renewable fuels —— reports.
   1.  The department shall compile information regarding the department’s compliance with section 8A.362B during the previous determination period. The information shall include all of the following:
   a.  Of the motor vehicles used to routinely travel on the state’s highways that are powered using gasoline, all of the following:
   (1)  The total number of such motor vehicles according to model year of manufacture.
   (2)  The total number of such motor vehicles according to model year of manufacture that are capable of being powered using ethanol blended gasoline classified as E-15 and E-85 according to the express warranty of the motor vehicle’s manufacturer.
   (3)  The total number of gallons of ethanol blended gasoline classified as E-15, and the total number of gallons of ethanol blended gasoline classified as E-85, purchased during the preceding determination period, to the extent such information may be practically obtained.
   b.  Of the motor vehicles used to routinely travel on the state’s highways that are powered using diesel fuel, all of the following:
   (1)  The total number of such motor vehicles according to model year of manufacture.
   (2)  The total number of such motor vehicles according to model year of manufacture that are capable of being powered using biodiesel blended fuel classified as B-20 according to the express warranty of the motor vehicle’s manufacturer.
   (3)  The total number of gallons of biodiesel blended fuel classified as B-20 purchased during the preceding determination period, to the extent such information may be practically obtained.
   2.  The department of administrative services shall prepare a state fleet renewable fuels compliance report which shall consolidate information compiled by the department under subsection 1 together with information compiled by the commission for the blind pursuant to section 216B.3, institutions governed by the state board of regents pursuant to section 262.25A, the department of transportation pursuant to section 307.21, and the department of corrections pursuant to section 904.312A. The department of administrative services shall submit the state fleet renewable fuels compliance report to the governor and general assembly not later than March 1 of each year.
    Sec. 50.  Section 216B.3, subsection 16, paragraph a, Code 2021, is amended by striking the paragraph and inserting in lieu thereof the following:
   a.  Provide for the purchase and operation of motor vehicles powered by renewable fuel in the same manner required for the director of the department of administrative services pursuant to section 8A.362B. The commission shall compile information regarding compliance with the provisions of this paragraph in the same manner as the department of administrative services pursuant to section 8A.362C. The commission shall cooperate with the department of administrative services in preparing the annual state fleet renewable fuels compliance report regarding compliance with this paragraph as provided in section 8A.362C.
    Sec. 51.  Section 262.25A, subsection 2, Code 2021, is amended by striking the subsection and inserting in lieu thereof the following:
   2.  An institution shall provide for the purchase and operation of motor vehicles powered by renewable fuel in the same manner required for the director of the department of administrative services pursuant to section 8A.362B. An institution shall compile information regarding compliance with the provisions of this subsection in the same manner as the department of administrative services pursuant to section 8A.362C. The state board of regents shall cooperate with the department of administrative services in preparing the annual state fleet renewable fuels compliance report regarding compliance with this paragraph as provided in section 8A.362C.
    Sec. 52.  Section 307.21, subsection 4, Code 2021, is amended by striking the subsection and inserting in lieu thereof the following:
   4.  The administrator shall provide for the purchase and operation of motor vehicles powered by renewable fuel in the same manner required for the director of the department of administrative services pursuant to section 8A.362B.  The department of transportation shall compile information regarding compliance with the provisions of this subsection in the same manner as the department of administrative services pursuant to section 8A.362C. The department of transportation shall cooperate with the department of administrative services in preparing the annual state fleet renewable fuels compliance report regarding compliance with this subsection as provided in section 8A.362C.
    Sec. 53.  Section 904.312A, subsection 1, Code 2021, is amended by striking the subsection and inserting in lieu thereof the following:
   1.  The department of corrections shall provide for the purchase and operation of motor vehicles powered by renewable fuel in the same manner required for the director of the department of administrative services pursuant to section 8A.362B. The department of corrections shall compile information regarding compliance with the provisions of this subsection in the same manner as the department of administrative services pursuant to section 8A.362C. The department of corrections shall cooperate with the department of administrative services in preparing the annual state fleet renewable fuels compliance report regarding compliance with this subsection as provided in section 8A.362C.
    Sec. 54.  EFFECTIVE DATE.  This division of this Act, being deemed of immediate importance, takes effect upon enactment.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   GENERAL. This bill provides for the regulation of motor fuel, which provisions are administered and enforced by the department of agriculture and land stewardship (DALS) (Code chapter 214A). This includes two types of motor fuel, including gasoline, specifically ethanol blended gasoline beginning with an ethanol percentage of between 9 and 10 percent per volume (E-10) and diesel fuel, specifically biodiesel blended fuel beginning with a minimum biodiesel percentage of 1 percent (B-1). The bill limits retail dealers (dealers) operating motor fuel sites (sites) from advertising for sale or selling certain types of motor fuel designated as restricted use. It revises certain advertising and notice provisions, including the use of decals affixed to motor fuel pumps.
   The bill amends other Code chapters providing for motor fuel infrastructure such as motor fuel storage tanks, including programs to assist dealers installing, converting, or replacing infrastructure, which provisions are also administered by DALS (Code chapter 159A), and the regulation of infrastructure used to store and dispense ethanol blended gasoline regulated by the state fire marshal and the department of natural resources (Code chapter 455G). It also amends tax credits which provide incentives for consumers to purchase renewable fuel from dealers (Code chapters 422 and 452A). Finally, it requires the use of higher classifications of renewable fuel powering motor vehicles in the state fleet (Code chapters 8A, 216B, 262, 307, and 904).
   RESTRICTED USE GASOLINE. The bill designates nonblended gasoline (E-0) as restricted use gasoline (amended Code section 214A.1 and new Code section 214A.31). It also designates ethanol blended gasoline classified as E-10 or higher up to but not including E-15 as restricted use gasoline on and after January 1, 2025. The bill does recognize two types of exceptions. A single dispensing unit may be reserved at a site to dispense restricted use gasoline. A restricted site may be used to dispense restricted use gasoline from any number of dispensing units. Such sites include an airport, a facility servicing motor vehicles engaged in racing, a marina, or a location used to store or sell older model motor vehicles, all-terrain vehicles, motorcycles, or snowmobiles.
   RESTRICTED USE DIESEL FUEL. The bill designates nonblended diesel (B-0) as restricted use diesel fuel (amended Code section 214A.2 and new Code section 214A.32) and designates biodiesel blended fuel classified as B-1 or higher up to but not including B-20 as restricted use diesel fuel subject to certain exceptions. One dispensing unit may be reserved at a site to dispense restricted use diesel fuel. Any number of dispensing units at a site may dispense biodiesel blended fuel classified as B-5 or higher annually between October 1 and ending April 14. Until September 30, 2023, any number of dispensing units at a site may dispense biodiesel blended fuel classified as B-11 or higher annually between April 15 and September 30. A restricted site may be used to dispense restricted use diesel fuel from any number of dispensing units. Such sites include an airport, an electric generating plant, and a facility storing and serving railroad locomotives.
   ADVERTISING AND NOTICE PROVISIONS. The bill requires that when advertising motor fuel for sale, a dealer must designate its restricted status (amended Code section 214A.3). It eliminates a provision that requires that a decal be placed on a motor fuel pump that notifies the traveling public that gasoline is blended with ethanol. It provides that a decal must identify motor fuel as restricted (amended Code section 214A.16).
   WAIVER AND SUSPENSION. The bill authorizes the governor or secretary of agriculture to issue an order temporarily waiving a requirement that a retail dealer comply with the restricted use requirements if there is credible evidence that the retail dealer has not been able to reasonably obtain the required classification of renewable fuel (new Code section 214A.33). The governor may issue an order suspending compliance for all retail dealers in the state or a geographic segment of the state if the governor determines it is not commercially feasible for the retail dealers to obtain the required classification (new Code section 214A.34).
   PENALTY. A person who violates a provision of Code chapter 214A is guilty of a serious misdemeanor (Code section 214A.11). A serious misdemeanor is punishable by confinement for no more than one year and a fine of at least $430 but not more than $2,560. Alternatively, the state may initiate an alternative civil proceeding against the person for at least $100 but not more than $1,000 for each violation.
   INFRASTRUCTURE. The bill revises the renewable fuel infrastructure program for retail motor fuel sites (program) by eliminating a requirement that moneys used to support improvements be used to store and dispense E-15. The infrastructure must be capable of storing and dispensing ethanol blended gasoline classified as E-85 or higher (amended Code section 159A.14). The bill eliminates a requirement that moneys used to support improvements be used to store and dispense biodiesel of any classification and replaces it with a requirement that the improvements be used to store and dispense biodiesel blended fuel classified as B-20 or higher (amended Code section 159A.14). The bill provides that the financial incentives for biodiesel improvements must be awarded pursuant to a three-year cost-share agreement not to exceed 50 percent of the cost of the improvement or $30,000, whichever is less. In addition, the retail dealer must agree to advertise for sale and sell biodiesel blended fuel classified as B-20 or higher from April 15 to September 30. The bill eliminates that part of the program which finances biodiesel improvements on July 1, 2024.
   The bill provides that for the fiscal years of the period beginning July 1, 2021, and ending June 30, 2024, $1.25 million is allocated from the Iowa renewable fuel infrastructure fund to support that part of the program financing infrastructure used to store and dispense or blend and dispense biodiesel blended fuel (amended Code section 159A.16). For each fiscal year beginning July 1, 2021, and thereafter, the bill appropriates $5 million from the state general fund (new Code section 159A.17) to the renewable fuel infrastructure fund to support the entire program as well as the renewable fuel infrastructure program for biodiesel terminal facilities (Code section 159A.15).
   The bill provides that a retail dealer is prohibited from installing, replacing, or converting motor fuel storage and dispensing infrastructure, unless it is capable of storing and dispensing ethanol blended gasoline classified as E-85 or higher (new Code section 455G.32). The bill provides that the infrastructure must be listed as compatible with E-85 by a testing laboratory and must be approved by the state fire marshal.
   TAX CREDITS. The bill extends the expiration date of three renewable fuel tax programs from January 1, 2025, to January 1, 2029, including: (1) the E-85 gasoline promotion tax credit (amended Code sections 422.11O and 422.33(11B)), (2) the biodiesel blended fuel tax credit (Code sections 422.11P and 422.33(11C)), and (3) the E-15 plus gasoline promotion tax credit (amended Code sections 422.11Y and 422.33(11D)). In each case, the tax credit is calculated by taking the number of gallons of renewable fuel sold multiplied by a designated rate (rate). The rate may differ depending upon the time of year the type of renewable fuel is sold or upon its classification. For the biodiesel blended fuel tax credit, the bill replaces a system allocating two different rates based on both (1) the time of year sold and (2) its classification. During the first period beginning January 1 and ending April 14, and the third period beginning October 1 and ending December 31, the rate is 4 cents for biodiesel blended fuel classified as B-11 or higher. For the second period beginning April 15 and ending September 30, the rate is 6 cents for biodiesel blended fuel classified as B-20 or higher, until January 1, 2024. On and after that date, the rate for the second period is 10 cents for biodiesel blended fuel classified as B-30 or higher.
   USE OF RENEWABLE FUEL BY THE STATE MOTOR VEHICLE FLEET.  Current law requires state and local governments to power motor vehicles using any classification of renewable fuel (E-10 or B-1). A state-issued credit card cannot be used to purchase motor fuel other than renewable fuel unless it is not commercially available or there is an emergency. The motor vehicle being powered by motor fuel must be affixed with a sticker that notifies the traveling public that the motor vehicle is powered using renewable fuel. The bill provides that a motor vehicle which is part of the state government fleet must be powered using the highest classification of renewable fuel available so long as (1) it is warranted by the motor vehicle’s manufacturer, (2) that classification is available, and (3) an emergency situation does not exist. The bill also requires a state entity to revise its bidding procedures as necessary to account for the purchase of motor vehicles powered by biodiesel blended fuel classified as B-20 or higher. The state entities involved include the department of administrative services (new Code sections 8A.362A, 8A.362B, and 8A.362C), the commission for the blind (amended Code section 216B.3), institutions governed by the board of regents (amended Code section 262.25A), the department of transportation (amended Code section 307.21), and the department of corrections (amended Code section 904.312A).
   Finally, the bill requires the department of administrative services, in cooperation with the other entities operating motor vehicles, to prepare an annual report to be submitted to the governor and general assembly providing information regarding the number of state motor vehicles powered using motor fuel, including gasoline and diesel fuel, the number of those motor vehicles capable of being powered using E-15 and E-85 or B-20, and the number of gallons of renewable fuel purchased.
   EFFECTIVE DATES. The bill takes effect upon enactment other than the tax credit provisions which take effect January 1, 2022.