Senate Study Bill 3084 - Introduced SENATE/HOUSE FILE _____ BY (PROPOSED GOVERNOR BILL) A BILL FOR An Act relating to renewable fuels, including ethanol 1 blended gasoline and biodiesel blended fuel used to power 2 internal combustion engines, by providing for compliance 3 requirements and promotional initiatives that relate to 4 establishing classifications and standards for renewable 5 fuels, advertising and selling renewable fuels, storing 6 and dispensing renewable fuels, using state motor vehicles 7 powered by renewable fuels, and taxes, tax credits, and tax 8 refunds relating to renewable fuels; providing penalties and 9 making penalties applicable; and including effective date 10 and retroactive applicability provisions. 11 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 12 TLSB 5021XL (24) 89 da/ns
S.F. _____ H.F. _____ DIVISION I 1 COMPLIANCE REQUIREMENTS —— STANDARDS 2 AND CLASSIFICATIONS FOR GASOLINE —— MOTOR FUEL STORAGE 3 AND DISPENSING INFRASTRUCTURE 4 PART A 5 E-15 ACCESS STANDARD 6 Section 1. NEW SECTION . 214A.31 E-15 access standard —— 7 establishment. 8 In order to ensure consumer access to gasoline containing 9 fifteen percent ethanol by volume, an E-15 access standard is 10 established in accordance with 2013 Iowa Acts, ch. 127, §1, 11 section 159A.1, and this subchapter. 12 Sec. 2. NEW SECTION . 214A.32 E-15 access standard —— retail 13 dealer compliance. 14 1. Except as provided in sections 214A.33 through 214A.35, 15 a retail dealer owning or operating a retail motor fuel site 16 shall comply with the E-15 access standard as provided in this 17 section. 18 2. In order to comply with the E-15 access standard, a 19 retail dealer must advertise for sale and sell E-15 gasoline 20 from a minimum number of qualifying motor fuel dispensers 21 located at the retail dealer’s retail motor fuel site. A 22 qualifying motor fuel dispenser must be capable of dispensing 23 gasoline at all times that it is in operation. 24 a. Except as provided in paragraph “b” , a retail dealer 25 shall comply with a general E-15 access standard by dispensing 26 E-15 gasoline from the following: 27 (1) One qualified motor fuel dispenser, if there is only one 28 qualified motor fuel dispenser. 29 (2) At least fifty percent of all qualified motor fuel 30 dispensers, if there are more than one qualified motor fuel 31 dispenser. 32 b. (1) A retail dealer complies with an alternative E-15 33 access standard if all of the following apply: 34 (a) On and after January 1, 2023, the retail dealer does not 35 -1- LSB 5021XL (24) 89 da/ns 1/ 55
S.F. _____ H.F. _____ install, replace, or convert a motor fuel storage tank. 1 (b) On and after January 1, 2026, the retail dealer 2 advertises for sale and sells E-15 gasoline from at least one 3 qualifying motor fuel dispenser. 4 (2) A retail dealer who no longer complies with the 5 alternative E-15 access standard as provided in subparagraph 6 (1) shall immediately comply with the general E-15 access 7 standard as provided in paragraph “a” . 8 c. The E-15 access standard does not prohibit a retail 9 dealer owning or operating a retail motor fuel site from 10 advertising for sale and selling motor fuel from any number of 11 nonqualifying motor fuel dispensers. A nonqualifying motor 12 fuel dispenser is limited to any of the following: 13 (1) A dispenser that exclusively dispenses any of the 14 following: 15 (a) Aviation fuel. 16 (b) Diesel fuel. 17 (c) Kerosene. 18 (2) A dispenser that is part of a tank vehicle as defined 19 in section 321.1 that is not used to dispense gasoline on the 20 premises of the retail motor fuel site. 21 3. a. A retail dealer is not in violation of this section 22 during any period of noncompliance with the E-15 access 23 standard caused by an excusable event. An excusable event is 24 limited to any of the following: 25 (1) The maintenance, repair, or reconditioning of motor 26 fuel storage and dispensing infrastructure. 27 (2) The installation, expansion, replacement, or conversion 28 of motor fuel storage and dispensing infrastructure. 29 b. The department may require that a retail dealer 30 notify the department that an excusable event as described 31 in paragraph “a” is planned to occur, is occurring, or has 32 occurred. The department may inspect the applicable retail 33 motor fuel site to determine whether the noncompliance is 34 caused by an excusable event. 35 -2- LSB 5021XL (24) 89 da/ns 2/ 55
S.F. _____ H.F. _____ 4. a. This section shall be implemented on January 1, 2023. 1 b. This subsection is repealed January 2, 2023. 2 Sec. 3. NEW SECTION . 214A.33 Suspension of E-15 access 3 standard by order issued by governor. 4 1. The governor may issue or renew an executive order that 5 temporarily suspends the requirement in section 214A.32 that a 6 retail dealer comply with the E-15 access standard at a retail 7 motor fuel site owned or operated by the retail dealer. 8 2. The E-15 access standard suspension order as described in 9 subsection 1 must be supported by the governor’s determination 10 that any of the following apply: 11 a. There is an inadequate supply of E-15 gasoline. 12 b. The market price of E-15 gasoline may cause consumers to 13 suffer economic hardship. 14 c. Existing motor fuel storage and dispensing infrastructure 15 is not capable of storing and dispensing E-15 gasoline. 16 3. The governor may issue or renew an executive order under 17 this section on a statewide or regional basis. 18 4. The E-15 access standard suspension order shall take 19 effect on its date of publication in the Iowa administrative 20 bulletin, unless the order specifies a later date. The order 21 shall expire one year from its effective date unless a shorter 22 period is stated in the order. The early expiration of the 23 order may also occur based on circumstances described in the 24 order. 25 5. a. This section shall be implemented on January 1, 2023. 26 b. This subsection is repealed January 2, 2023. 27 Sec. 4. NEW SECTION . 214A.34 Waiver of E-15 access 28 standard by order issued by secretary of agriculture —— E-15 29 unavailability. 30 1. The secretary of agriculture may issue an administrative 31 order that temporarily waives the requirement in section 32 214A.32 that a retail dealer comply with the E-15 access 33 standard at a retail motor fuel site owned or operated by the 34 retail dealer based on E-15 gasoline availability. 35 -3- LSB 5021XL (24) 89 da/ns 3/ 55
S.F. _____ H.F. _____ 2. A retail dealer may apply for an E-15 unavailability 1 waiver order as described in subsection 1 by submitting an 2 application to the department in a manner and according to 3 procedures required by the department. 4 a. The application must be supported by credible evidence 5 that the retail dealer has not been able to reasonably obtain 6 E-15 gasoline to be advertised for sale and sold at the retail 7 dealer’s retail motor fuel site. 8 b. The retail dealer must sign the application which shall 9 include a statement that the retail dealer swears and affirms 10 that all information in the application completed by the retail 11 dealer is true and correct. 12 3. The department shall publish a copy of the E-15 13 unavailability waiver order on the department’s internet site 14 within ten days after the order’s issuance. 15 4. The E-15 unavailability waiver order shall take effect 16 on its date of publication on the department’s internet site, 17 unless the order specifies a later date. The order shall 18 expire six months from its effective date unless a shorter 19 period is stated in the order. The early expiration of the 20 order may also occur based on circumstances described in the 21 order. 22 5. a. This section shall be implemented on January 1, 2023. 23 b. This subsection is repealed January 2, 2023. 24 Sec. 5. NEW SECTION . 214A.35 Waiver of E-15 access standard 25 by order issued by secretary of agriculture —— E-15 incompatible 26 infrastructure. 27 1. The secretary of agriculture may issue an administrative 28 order that temporarily waives the requirement in section 29 214A.32 that a retail dealer comply with the E-15 access 30 standard at a retail motor fuel site owned or operated by the 31 retail dealer based on the incompatibility of the motor fuel 32 storage and dispensing infrastructure to store and dispense 33 E-15 gasoline. 34 2. A retail dealer may apply for an E-15 incompatible 35 -4- LSB 5021XL (24) 89 da/ns 4/ 55
S.F. _____ H.F. _____ infrastructure waiver order as described in subsection 1 by 1 submitting an application to the department in a manner and 2 according to procedures required by the department. 3 a. The application must be supported by credible evidence 4 that the retail dealer is unable to comply with the E-15 5 access standard because the motor fuel storage and dispensing 6 infrastructure located at the retail motor fuel site is not 7 compatible with the use of E-15 gasoline and that the retail 8 dealer is eligible for a class 1 or class 2 waiver as provided 9 in this section. 10 b. The application must provide information required to 11 be completed by the retail dealer, which must include an 12 inventory and description of motor fuel storage and dispensing 13 infrastructure located at the retail motor fuel site. 14 c. The department may require a retail dealer to attach any 15 supporting documentation to the application, which may include 16 an inspection report completed by a person certified by the 17 department as a professional retail motor fuel site installer. 18 The certified professional retail motor fuel site installer 19 may be a licensed engineer or other person who the department 20 determines is qualified by education, testing, or experience to 21 oversee a project involving the installation, replacement, or 22 conversion of motor fuel storage and dispensing infrastructure, 23 and who is able to provide a reliable estimate of the project’s 24 costs. 25 d. The department shall review and evaluate an application 26 to determine whether it is supported by credible evidence 27 sufficient for the secretary to issue an order granting a 28 waiver under this section. The department shall approve or 29 disapprove a completed application within one hundred twenty 30 days following the date that the application was delivered to 31 the department for filing. 32 e. The retail dealer must sign the application which shall 33 include a statement that the retail dealer swears and affirms 34 that all information in the application completed by the retail 35 -5- LSB 5021XL (24) 89 da/ns 5/ 55
S.F. _____ H.F. _____ dealer is true and correct. If a certified professional retail 1 motor fuel site installer completes an inspection report to 2 support an application, the installer shall sign a statement 3 that the installer swears and affirms that all information in 4 the inspection report completed by the installer is true and 5 correct. 6 f. The department may inspect the premises of a retail 7 motor fuel site during normal business hours to administer and 8 enforce the provisions of this section. 9 g. The department of agriculture and land stewardship 10 may cooperate with the department of natural resources and 11 the state fire marshal in administering and enforcing the 12 provisions of this section. 13 3. The department shall publish a copy of the E-15 14 incompatible infrastructure waiver order on the department’s 15 internet site within ten days after the order’s issuance. The 16 order shall take effect on its date of publication, unless the 17 order specifies a later date. 18 4. a. The secretary of agriculture shall terminate the 19 E-15 incompatible infrastructure waiver order if a terminable 20 event has occurred. A terminable event is limited to any of 21 the following: 22 (1) The failure of a retail dealer to be licensed as 23 required under section 214.2 to use a commercial weighing and 24 measuring device when dispensing gasoline. 25 (2) The cessation of the retail dealer’s business of 26 advertising for sale or selling gasoline at the retail motor 27 fuel site. 28 (3) The installation, replacement, or conversion of a motor 29 fuel storage tank located at the retail motor fuel site. 30 b. The department may require that a retail dealer 31 notify the department that a terminable event as described 32 in paragraph “a” is planned to occur, is occurring, or has 33 occurred. 34 5. a. The secretary of agriculture may issue an E-15 35 -6- LSB 5021XL (24) 89 da/ns 6/ 55
S.F. _____ H.F. _____ incompatible infrastructure class 1 waiver order. If the 1 department determines an inspection of the retail motor 2 fuel site is necessary, it may either conduct the inspection 3 or accept an inspection report completed by a certified 4 professional retail motor fuel site installer. 5 b. The order must be supported by credible evidence that 6 all motor fuel storage tanks used to store gasoline that are 7 located at the retail motor fuel site fall within any of the 8 following categories: 9 (1) Each motor fuel storage tank not constructed of 10 fiberglass was installed during or prior to 1985. 11 (2) Each motor fuel storage tank constructed of fiberglass 12 was installed during or prior to the following years: 13 (a) For a double-wall fiberglass underground motor fuel 14 storage tank, 1991. 15 (b) For a single-wall fiberglass underground motor fuel 16 storage tank, 1996. 17 6. The secretary of agriculture may issue an E-15 18 incompatible infrastructure class 2 waiver order which shall 19 be based on an inspection of the retail motor fuel site. The 20 department may either conduct the inspection and complete an 21 inspection report or file and review a completed inspection 22 report submitted by a certified professional retail motor fuel 23 site installer. 24 a. The inspection report must include all of the following: 25 (1) A completed checklist of items adopted as part of a form 26 used by the department to confirm that the motor fuel storage 27 and dispensing infrastructure located at the retail motor fuel 28 site is not compatible with E-15 gasoline. 29 (2) The total estimated cost of improving the retail 30 motor fuel site to comply with the E-15 access standard by 31 installing, replacing, or converting the motor fuel storage 32 and dispensing infrastructure located at the retail motor fuel 33 site. 34 b. (1) The department shall determine whether to issue an 35 -7- LSB 5021XL (24) 89 da/ns 7/ 55
S.F. _____ H.F. _____ E-15 incompatible infrastructure class 2 waiver order based 1 on an eligibility assessment which shall calculate all of the 2 following: 3 (a) The total estimated cost of improvement which equals the 4 total estimated cost of improving the retail motor fuel site to 5 comply with the E-15 access standard based on the department’s 6 analysis of the inspection report described in paragraph “a” . 7 The total estimated cost of improvement shall only include 8 costs used to calculate the amount of financial incentives 9 that may be awarded by the renewable fuel infrastructure 10 board to a retail dealer participating in the renewable fuel 11 infrastructure program for retail motor fuel sites as provided 12 in section 159A.14. 13 (b) The E-15 infrastructure base amount which equals the 14 maximum cost necessary to be incurred by the retail dealer 15 in order to receive the total amount of standard financial 16 incentives that could be awarded to the retail dealer under the 17 renewable fuel infrastructure program for retail motor fuel 18 sites as provided in section 159A.14 in order to comply with 19 the E-15 access standard. The department’s calculation shall 20 not include any of the following: 21 (i) The amount of any prior financial incentives awarded 22 to the retail dealer under the renewable fuel infrastructure 23 program for retail motor fuel sites. 24 (ii) Whether the retail dealer is applying for or may be 25 awarded any future financial incentives under the renewable 26 fuel infrastructure program for retail motor fuel sites. 27 (2) A retail dealer is only eligible to be issued an 28 E-15 incompatible infrastructure class 2 waiver order if 29 the department determines that the total estimated cost of 30 improvement as described in subparagraph (1), subparagraph 31 division (a), exceeds the E-15 infrastructure base amount as 32 described in subparagraph (1), subparagraph division (b). 33 7. a. This section shall be implemented on January 1, 2023. 34 b. This subsection is repealed January 2, 2023. 35 -8- LSB 5021XL (24) 89 da/ns 8/ 55
S.F. _____ H.F. _____ 8. This section is repealed January 1, 2041. 1 Sec. 6. NEW SECTION . 214A.36 Disciplinary action. 2 1. The department may refuse to issue or renew and may 3 suspend or revoke a license issued to a retail dealer pursuant 4 to section 214.2 for not complying with the E-15 access 5 standard as provided in section 214A.32, including rules 6 adopted by the department pursuant to section 214A.1A to 7 administer or enforce that section. 8 2. a. This section shall be implemented on January 1, 2023. 9 b. This subsection is repealed January 2, 2023. 10 Sec. 7. ISSUANCE OF ORDERS SUSPENDING OR WAIVING E-15 ACCESS 11 STANDARD. 12 1. The governor may issue an E-15 access standard suspension 13 order as provided in section 214A.33, as enacted in this part 14 of this division of this Act, prior to January 1, 2023, if the 15 governor determines it is necessary to issue the order prior 16 to that date. 17 2. The secretary of agriculture may issue an E-15 18 unavailability waiver order as provided in section 214A.34, as 19 enacted in this part of this division of this Act, prior to 20 January 1, 2023, if the secretary determines it is necessary to 21 issue the order prior to that date. 22 3. The secretary of agriculture may issue an E-15 23 incompatible infrastructure waiver order as provided in section 24 214A.35, as enacted in this part of this division of this Act, 25 prior to January 1, 2023, if the secretary determines it is 26 necessary to issue the order prior to that date. 27 Sec. 8. ADOPTION OF RULES IMPLEMENTING E-15 ACCESS STANDARD 28 AND E-15 INCOMPATIBLE INFRASTRUCTURE WAIVER ORDER. 29 1. The department of agriculture and land stewardship 30 shall adopt rules pursuant to chapter 17A prior to January 1, 31 2023, as necessary to administer and enforce the E-15 access 32 standard, as provided in section 214A.32, as enacted in this 33 part of this division of this Act. 34 2. The department of agriculture and land stewardship shall 35 -9- LSB 5021XL (24) 89 da/ns 9/ 55
S.F. _____ H.F. _____ adopt rules pursuant to chapter 17A prior to January 1, 2023, 1 as necessary to administer and enforce an E-15 incompatible 2 infrastructure waiver order, as provided in section 214A.35, as 3 enacted in this part of this division of this Act. 4 PART B 5 RELATED RENEWABLE FUELS AND INFRASTRUCTURE PROVISIONS 6 Sec. 9. Section 159A.6, subsection 1, paragraph c, Code 7 2022, is amended by striking the paragraph. 8 Sec. 10. Section 214.1, Code 2022, is amended by adding the 9 following new subsections: 10 NEW SUBSECTION . 1A. “Department” means the department of 11 agriculture and land stewardship. 12 NEW SUBSECTION . 1B. “E-15 gasoline” or “E-15” means the 13 same as defined in section 214A.1. 14 NEW SUBSECTION . 3A. “Motor fuel dispenser” or “dispenser” 15 means equipment that is the part of motor fuel storage 16 and dispensing infrastructure that includes mechanical or 17 electrical systems that operate a motor fuel pump dispensing 18 motor fuel from a motor fuel storage tank to the end point of 19 the equipment’s nozzle. 20 NEW SUBSECTION . 4A. a. “Motor fuel storage and dispensing 21 infrastructure” or “infrastructure” means equipment used to do 22 any of the following: 23 (1) Store and dispense motor fuel. 24 (2) Store, blend, and dispense motor fuel. 25 b. “Motor fuel storage and dispensing infrastructure” or 26 “infrastructure” includes but is not limited to a motor fuel 27 storage tank, motor fuel pump or motor fuel blender pump, motor 28 fuel dispenser, and associated pipes, hoses, nozzles, tubes, 29 lines, fittings, valves, filters, seals, and covers. 30 Sec. 11. Section 214.1, subsections 3, 4, and 5, Code 2022, 31 are amended to read as follows: 32 3. “Motor fuel blender pump” or “blender pump” means a motor 33 fuel meter pump that measures and dispenses a type of motor 34 fuel that is blended from to formulate two or more different 35 -10- LSB 5021XL (24) 89 da/ns 10/ 55
S.F. _____ H.F. _____ types classifications of that motor fuels and which may 1 dispense more than one type of blended motor fuel. 2 4. “Motor fuel pump” means the part of motor fuel storage 3 and dispensing infrastructure that is a meter or similar 4 commercial weighing and measuring device used to measure and 5 dispense motor fuel originating from a motor fuel storage tank, 6 on a retail basis. 7 5. “Motor fuel storage tank” or “storage tank” means the part 8 of motor fuel storage and dispensing infrastructure that is an 9 aboveground or belowground container that is constituting a 10 fixture used to store an accumulation of motor fuel. 11 Sec. 12. Section 214.9, Code 2022, is amended to read as 12 follows: 13 214.9 Self-service motor fuel pumps dispensers . 14 A self-service motor fuel dispenser operating a motor fuel 15 pump located at a retail motor fuel site may be equipped with 16 an automatic latch-open device on the fuel dispensing hose 17 nozzle only if the nozzle valve is the automatic closing type. 18 Sec. 13. NEW SECTION . 214.12 Inspections of motor fuel 19 dispensers —— E-15 access standard. 20 1. In conducting an inspection under section 214.11, an 21 inspector for the department shall determine if a retail dealer 22 is advertising for sale and selling E-15 gasoline at a retail 23 motor fuel site in compliance with the E-15 access standard as 24 provided in section 214A.32. 25 2. a. This section shall be implemented on January 1, 2023. 26 b. This subsection is repealed January 2, 2023. 27 Sec. 14. Section 214A.1, Code 2022, is amended by adding the 28 following new subsections: 29 NEW SUBSECTION . 2A. “B-20 biodiesel fuel” or “B-20” means 30 a classification of biodiesel blended fuel formulated with a 31 percentage of twenty percent by volume of biodiesel, if the 32 formulation meets the standards provided in section 214A.2. 33 NEW SUBSECTION . 12A. “E-15 gasoline” or “E-15” means a 34 classification of ethanol blended gasoline formulated with a 35 -11- LSB 5021XL (24) 89 da/ns 11/ 55
S.F. _____ H.F. _____ percentage of fifteen percent by volume of ethanol, if the 1 formulation meets the standards provided in section 214A.2. 2 NEW SUBSECTION . 18A. “Motor fuel dispenser” or “dispenser” 3 means the same as defined in section 214.1. 4 NEW SUBSECTION . 19A. “Motor fuel storage and dispensing 5 infrastructure” or “infrastructure” means the same as defined 6 in section 214.1. 7 Sec. 15. NEW SECTION . 214A.1A Rules. 8 The department shall adopt rules necessary to administer and 9 enforce this chapter in conjunction with chapter 214. 10 Sec. 16. Section 214A.2, subsection 1, Code 2022, is amended 11 to read as follows: 12 1. The department shall adopt rules pursuant to chapter 13 17A for carrying out this chapter . The rules may include but 14 are not limited to specifications section 214A.1A relating 15 to standards and classifications for types of motor fuel, 16 including but not limited to gasoline and diesel fuel. The 17 rules shall provide standards and classifications for a 18 renewable fuel such as ethanol blended gasoline, biobutanol 19 blended gasoline, biodiesel, biodiesel blended fuel, and 20 motor renewable fuel components such as an a biofuel or other 21 oxygenate. In the interest of uniformity, the department shall 22 adopt by reference other specifications standards relating to 23 tests and standards specifications for types of motor fuel, 24 including renewable fuel and motor fuel components, established 25 by the United States environmental protection agency and 26 A.S.T.M. international. 27 Sec. 17. Section 214A.2, subsection 4, paragraph b, Code 28 2022, is amended by adding the following new subparagraph: 29 NEW SUBPARAGRAPH . (5) (a) Biodiesel blended fuel 30 classified as higher than B-20 must conform to standards 31 adopted by the department. 32 (b) The rules adopted by the department of agriculture 33 and land stewardship establishing standards for biodiesel 34 blended fuel classified as higher than B-20 shall take effect 35 -12- LSB 5021XL (24) 89 da/ns 12/ 55
S.F. _____ H.F. _____ not earlier than sixty days after the date of filing in 1 accordance with section 17A.5, subsection 2, paragraph “a” . The 2 department of agriculture and land stewardship shall notify 3 the legislative services agency, the governor, the department 4 of natural resources, and the department of revenue of the 5 effective date of the rules at least thirty days prior to the 6 effective date of the rules. 7 Sec. 18. Section 214A.3, subsection 2, paragraph b, 8 subparagraph (1), Code 2022, is amended by striking the 9 subparagraph and inserting in lieu thereof the following: 10 (1) A person shall not knowingly falsely advertise ethanol 11 blended gasoline by using an inaccurate classification as 12 provided in section 214A.2. 13 Sec. 19. Section 214A.3, subsection 2, paragraph b, 14 subparagraphs (2) and (3), Code 2022, are amended to read as 15 follows: 16 (2) A person shall not knowingly falsely advertise 17 biobutanol blended gasoline by using an inaccurate designation 18 classification as provided in section 214A.2 . 19 (3) A person shall not knowingly falsely advertise 20 biodiesel blended fuel by using an inaccurate designation 21 classification as provided in section 214A.2 . 22 Sec. 20. Section 214A.8, Code 2022, is amended to read as 23 follows: 24 214A.8 Prohibition. 25 A dealer shall not knowingly sell motor fuel or biofuel 26 in the state that fails to meet applicable standards and 27 classifications as provided in section 214A.2 . 28 Sec. 21. Section 214A.11, subsection 2, Code 2022, is 29 amended by adding the following new paragraphs: 30 NEW PARAGRAPH . c. (1) A retail dealer who submits an 31 application for an E-15 unavailability waiver order under 32 section 214A.34 that includes information that is not true and 33 correct commits perjury as provided in section 720.2. 34 (2) (a) This paragraph “c” shall be implemented on January 35 -13- LSB 5021XL (24) 89 da/ns 13/ 55
S.F. _____ H.F. _____ 1, 2023. 1 (b) This subparagraph is repealed January 2, 2023. 2 NEW PARAGRAPH . d. (1) A retail dealer who submits an 3 application for an E-15 incompatible infrastructure waiver 4 order under section 214A.35 that is not true and correct 5 commits perjury as provided in section 720.2. 6 (2) A certified professional retail motor fuel site 7 installer who submits an inspection report as part of an 8 application for an E-15 incompatible infrastructure waiver 9 order under section 214A.35 that is not true and correct 10 commits perjury under section 720.2. 11 (3) (a) This paragraph “d” shall be implemented on January 12 1, 2023. 13 (b) This subparagraph is repealed on January 2, 2023. 14 Sec. 22. Section 214A.20, Code 2022, is amended to read as 15 follows: 16 214A.20 Limitation on liability. 17 1. A retail dealer or other marketer, pipeline company, 18 refiner, terminal operator, or terminal owner is not liable for 19 damages caused by the use of incompatible motor fuel dispensed 20 from a motor fuel dispenser located at the retail dealer’s 21 retail motor fuel site, if all of the following apply: 22 a. The incompatible motor fuel complies with the 23 specifications standards for a that type and classification of 24 motor fuel as provided in section 214A.2 . 25 b. The incompatible motor fuel is selected by the end use 26 consumer of the motor fuel. 27 c. The incompatible motor fuel is dispensed from a motor 28 fuel pump dispenser that correctly labels the type and 29 classification of fuel dispensed from a motor fuel storage 30 tank . 31 2. For purposes of this section subsection 1 , a motor fuel 32 is incompatible with a motor according to the manufacturer of 33 the motor. 34 Sec. 23. REPEAL. Section 214A.16, Code 2022, is repealed. 35 -14- LSB 5021XL (24) 89 da/ns 14/ 55
S.F. _____ H.F. _____ PART C 1 CODE ORGANIZATION 2 Sec. 24. DIRECTIONS TO THE CODE EDITOR —— TRANSFERS. 3 1. The Code editor is directed to make the following 4 transfers: 5 a. Section 214A.3, as amended in this division of this Act, 6 to section 214A.21. 7 b. Section 214A.7 to section 214A.22. 8 c. Section 214A.8, as amended in this division of this Act, 9 to section 214A.23. 10 d. Section 214A.19 to section 214A.24. 11 e. Section 214A.20, as amended in this division of this Act, 12 to section 214A.25. 13 2. The Code editor shall correct internal references in the 14 Code and in any enacted legislation as necessary due to the 15 enactment of this section. 16 Sec. 25. DIRECTIONS TO THE CODE EDITOR —— SUBCHAPTERS. The 17 Code editor is directed to divide the provisions of chapter 18 214A, as amended, enacted, or transferred in this division of 19 this Act, into subchapters as follows: 20 1. Subchapter I, including sections 214A.1 through 214A.20. 21 2. Subchapter II, including sections 214A.21 through 22 214A.30. 23 3. Subchapter III, including sections 214A.31 through 24 214A.36. 25 DIVISION II 26 COMPLIANCE REQUIREMENTS —— RENEWABLE FUEL INFRASTRUCTURE 27 PART A 28 PRINCIPAL PROVISIONS 29 Sec. 26. NEW SECTION . 455G.2A Standards and classifications 30 of motor fuel. 31 For purposes of this chapter, motor fuel must meet the 32 standards and classifications as provided in section 214A.2. 33 Sec. 27. NEW SECTION . 455G.30 Definitions. 34 As used in this subchapter, unless the context otherwise 35 -15- LSB 5021XL (24) 89 da/ns 15/ 55
S.F. _____ H.F. _____ requires: 1 1. “Biodiesel blended fuel” means the same as defined in 2 section 214A.1 3 2. “Department” means the department of natural resources. 4 3. “Diesel fuel” means the same as defined in section 5 214A.1. 6 4. “Diesel fuel storage and dispensing infrastructure” or 7 “diesel infrastructure” means motor fuel storage and dispensing 8 infrastructure as defined in section 214.1 used to store and 9 dispense diesel fuel, including biodiesel blended diesel fuel, 10 at a retail motor fuel site as defined in section 214A.1. 11 5. “Ethanol blended gasoline” means the same as defined in 12 section 214A.1. 13 6. “Gasoline storage and dispensing infrastructure” 14 or “gasoline infrastructure” means motor fuel storage and 15 dispensing infrastructure as defined in section 214.1 used 16 to store and dispense gasoline, including ethanol blended 17 gasoline, at a retail motor fuel site as defined in section 18 214A.1. 19 7. “Retail dealer” means the same as defined in section 20 214A.1. 21 Sec. 28. Section 455G.31, subsections 1 and 3, Code 2022, 22 are amended by striking the subsections. 23 Sec. 29. Section 455G.31, subsection 2, Code 2022, is 24 amended to read as follows: 25 2. A Subject to section 455G.32, a retail dealer may 26 use gasoline storage and dispensing infrastructure to store 27 and dispense ethanol blended gasoline classified as E-9 28 E-10 or higher if the department of natural resources under 29 this subchapter or the state fire marshal under chapter 101 30 determines that it the gasoline infrastructure is compatible 31 with the classification of ethanol blended gasoline being used. 32 Sec. 30. NEW SECTION . 455G.32 E-85 gasoline compatible 33 infrastructure —— compliance requirement. 34 1. A retail dealer shall not install, replace, or convert 35 -16- LSB 5021XL (24) 89 da/ns 16/ 55
S.F. _____ H.F. _____ gasoline storage and dispensing infrastructure unless the 1 installed, replaced, or converted gasoline infrastructure is 2 capable of storing and dispensing ethanol blended gasoline 3 classified as E-85. 4 2. The infrastructure must be all of the following: 5 a. Listed as compatible for use with ethanol blended 6 gasoline classified as E-85 by an independent testing 7 laboratory or as approved by the manufacturer. 8 b. Approved by the department or state fire marshal subject 9 to conditions determined necessary by the department or state 10 fire marshal. The department or state fire marshal may waive 11 the requirement in paragraph “a” upon satisfaction that a 12 substitute requirement serves the same purpose. 13 Sec. 31. NEW SECTION . 455G.33 B-20 diesel fuel compatible 14 infrastructure —— compliance requirement. 15 1. A retail dealer shall not install, replace, or convert 16 diesel fuel storage and dispensing infrastructure unless the 17 installed, replaced, or converted diesel fuel infrastructure 18 is capable of storing and dispensing biodiesel blended fuel 19 classified as B-20 or higher. 20 2. The infrastructure must be all of the following: 21 a. Listed as compatible for use with biodiesel blended 22 fuel classified as B-20 or higher by an independent testing 23 laboratory or as approved by the manufacturer. 24 b. Approved by the department or state fire marshal subject 25 to conditions determined necessary by the department or state 26 fire marshal. The department or state fire marshal may waive 27 the requirement in paragraph “a” upon satisfaction that a 28 substitute requirement serves the same purpose. 29 Sec. 32. EFFECTIVE DATE. This part of this division of this 30 Act takes effect January 1, 2023. 31 PART B 32 IMPLEMENTATION 33 Sec. 33. ADMINISTRATIVE RULES. The department of natural 34 resources and the state fire marshal may adopt rules under 35 -17- LSB 5021XL (24) 89 da/ns 17/ 55
S.F. _____ H.F. _____ chapter 17A prior to the effective date of part A of this 1 division of this Act, which rules shall take effect January 1, 2 2023. 3 DIVISION III 4 COMPLIANCE REQUIREMENTS —— QUALIFIED RENEWABLE FUEL USE BY 5 STATE MOTOR VEHICLES 6 Sec. 34. NEW SECTION . 8A.360 Special definitions. 7 As used in this part, unless the context otherwise requires: 8 1. “Biodiesel blended fuel” means the same as defined in 9 section 214A.1. 10 2. “Biofuel” means the same as defined in section 214A.1. 11 3. “Determination period” means any twelve-month period 12 beginning January 1 and ending December 31. 13 4. “Ethanol blended gasoline” means the same as defined in 14 section 214A.1. 15 5. “Qualified renewable fuel” means ethanol blended 16 gasoline or biodiesel blended fuel that meets the standards 17 and classifications for that type of motor fuel as provided in 18 section 214A.2. 19 Sec. 35. NEW SECTION . 8A.360A Classification of qualified 20 renewable fuels. 21 For purposes of this part, a qualified renewable fuel must 22 meet the same standards and classifications as provided in 23 section 214A.2. 24 Sec. 36. Section 8A.362, subsection 3, paragraph b, Code 25 2022, is amended by striking the paragraph and inserting in 26 lieu thereof the following: 27 b. The director shall provide for the purchase and operation 28 of motor vehicles using qualified renewable fuels and for the 29 purchase of qualified renewable fuels used to operate those 30 motor vehicles as provided in section 8A.368. 31 Sec. 37. NEW SECTION . 8A.368 Motor vehicle purchases —— 32 qualified renewable fuels. 33 1. A motor vehicle operating using an internal combustion 34 engine powered by gasoline or diesel fuel as described in 35 -18- LSB 5021XL (24) 89 da/ns 18/ 55
S.F. _____ H.F. _____ section 8A.362 shall use the highest possible classification of 1 a qualified renewable fuel if all of the following apply: 2 a. The manufacturer of the motor vehicle or the United 3 States environmental protection agency expressly states that 4 the classification of a qualified renewable fuel is compatible 5 with the motor vehicle’s normal operation. 6 b. That classification of a qualified renewable fuel is 7 commercially available in the region where the motor vehicle 8 is being operated. 9 c. No emergency situation exists that requires the immediate 10 use of a motor fuel regardless of whether it has been blended 11 with a biofuel. 12 2. If the highest possible classification of a qualified 13 renewable fuel is available to power an engine used to operate 14 a motor vehicle as provided in subsection 1, a state-issued 15 credit card shall not be used to purchase motor fuel other than 16 that classification of a qualified renewable fuel. 17 3. A motor vehicle subject to this section shall be affixed 18 with a brightly colored, highly visible renewable fuel sticker. 19 The qualified renewable fuel sticker shall be designed by 20 the department of agriculture and land stewardship to notify 21 the traveling public that the motor vehicle is operating 22 using an internal combustion engine powered by the highest 23 possible classification of that qualified renewable fuel. The 24 department of administrative services shall distribute the 25 stickers to state agencies maintaining a state motor pool. 26 However, a qualified renewable fuel sticker is not required to 27 be affixed to an unmarked motor vehicle used for purposes of 28 providing law enforcement or security. 29 4. As part of the department’s competitive bidding 30 procedure for the purchase of a motor vehicle operating using 31 an internal combustion engine powered by diesel fuel, the 32 director shall require a bidder to certify that the motor 33 vehicle’s manufacturer expressly states that the engine is 34 capable of being powered by biodiesel blended fuel classified 35 -19- LSB 5021XL (24) 89 da/ns 19/ 55
S.F. _____ H.F. _____ as B-20 or higher. 1 Sec. 38. NEW SECTION . 8A.369 Motor vehicle purchases —— 2 qualified renewable fuels —— reports. 3 1. The department shall compile information regarding the 4 department’s compliance with section 8A.368 during the previous 5 determination period. The information shall include all of the 6 following: 7 a. Of the motor vehicles used to routinely travel on the 8 state’s highways that operate using internal combustion engines 9 powered by gasoline, all of the following: 10 (1) The total number of such motor vehicles according to 11 model year. 12 (2) The total number of such motor vehicles according 13 to model year that are capable of operating using internal 14 combustion engines powered by ethanol blended gasoline 15 classified as E-15 and E-85 according to the express warranty 16 of the motor vehicle’s manufacturer. 17 (3) The total number of gallons of ethanol blended gasoline 18 classified as E-15, and the total number of gallons of ethanol 19 blended gasoline classified as E-85, purchased during the 20 preceding determination period, to the extent such information 21 may be practically obtained. 22 b. Of the motor vehicles used to routinely travel on the 23 state’s highways that operate using internal combustion engines 24 powered by diesel fuel, all of the following: 25 (1) The total number of such motor vehicles according to 26 model year. 27 (2) The total number of such motor vehicles according 28 to model year that are capable of operating using internal 29 combustion engines powered by biodiesel blended fuel classified 30 as B-20 or higher according to the express warranty of the 31 motor vehicle’s manufacturer. 32 (3) The total number of gallons of biodiesel blended fuel 33 classified as B-20 or higher purchased during the preceding 34 determination period, to the extent such information may be 35 -20- LSB 5021XL (24) 89 da/ns 20/ 55
S.F. _____ H.F. _____ practically obtained. 1 2. The department of administrative services shall 2 prepare a state fleet qualified renewable fuels compliance 3 report which shall consolidate information compiled by the 4 department under subsection 1 together with information 5 compiled by the commission for the blind pursuant to section 6 216B.3, institutions governed by the state board of regents 7 pursuant to section 262.25A, the department of transportation 8 pursuant to section 307.21, and the department of corrections 9 pursuant to section 904.312A. The department of administrative 10 services shall submit the state fleet qualified renewable fuels 11 compliance report to the governor and general assembly not 12 later than March 1 of each year. 13 Sec. 39. Section 216B.3, subsection 16, paragraph a, Code 14 2022, is amended by striking the paragraph and inserting in 15 lieu thereof the following: 16 a. Provide for the purchase of qualified renewable fuels 17 to power internal combustion engines that are used to operate 18 motor vehicles and for the purchase of motor vehicles operating 19 using engines powered by qualified renewable fuels in the 20 same manner required for the director of the department of 21 administrative services pursuant to section 8A.368. The 22 commission shall compile information regarding compliance 23 with the provisions of this paragraph in the same manner as 24 the department of administrative services pursuant to section 25 8A.369. The commission shall cooperate with the department 26 of administrative services in preparing the annual state 27 fleet qualified renewable fuels compliance report regarding 28 compliance with this paragraph as provided in section 8A.369. 29 Sec. 40. Section 262.25A, subsection 2, Code 2022, is 30 amended by striking the subsection and inserting in lieu 31 thereof the following: 32 2. An institution shall provide for the purchase of 33 qualified renewable fuels to power internal combustion engines 34 that are used to operate motor vehicles and for the purchase 35 -21- LSB 5021XL (24) 89 da/ns 21/ 55
S.F. _____ H.F. _____ of motor vehicles operating using engines powered by qualified 1 renewable fuels in the same manner required for the director of 2 the department of administrative services pursuant to section 3 8A.368. An institution shall compile information regarding 4 compliance with the provisions of this subsection in the same 5 manner as the department of administrative services pursuant 6 to section 8A.369. The state board of regents shall cooperate 7 with the department of administrative services in preparing 8 the annual state fleet qualified renewable fuels compliance 9 report regarding compliance with this subsection as provided 10 in section 8A.369. 11 Sec. 41. Section 307.21, subsection 4, Code 2022, is amended 12 by striking the subsection and inserting in lieu thereof the 13 following: 14 4. The administrator shall provide for the purchase 15 of qualified renewable fuels to power internal combustion 16 engines that are used to operate motor vehicles and for the 17 purchase of motor vehicles operating using engines powered 18 by qualified renewable fuels in the same manner required for 19 the director of the department of administrative services 20 pursuant to section 8A.368. The department of transportation 21 shall compile information regarding compliance with the 22 provisions of this subsection in the same manner as the 23 department of administrative services pursuant to section 24 8A.369. The department of transportation shall cooperate 25 with the department of administrative services in preparing 26 the annual state fleet qualified renewable fuels compliance 27 report regarding compliance with this subsection as provided 28 in section 8A.369. 29 Sec. 42. Section 904.312A, subsection 1, Code 2022, is 30 amended by striking the subsection and inserting in lieu 31 thereof the following: 32 1. The department of corrections shall provide for the 33 purchase of qualified renewable fuels to power internal 34 combustion engines that are used to operate motor vehicles and 35 -22- LSB 5021XL (24) 89 da/ns 22/ 55
S.F. _____ H.F. _____ for the purchase of motor vehicles operating using engines 1 powered by qualified renewable fuels in the same manner 2 required for the director of the department of administrative 3 services pursuant to section 8A.368. The department of 4 corrections shall compile information regarding compliance 5 with the provisions of this subsection in the same manner as 6 the department of administrative services pursuant to section 7 8A.369. The department of corrections shall cooperate with 8 the department of administrative services in preparing the 9 annual state fleet qualified renewable fuels compliance report 10 regarding compliance with this subsection as provided in 11 section 8A.369. 12 Sec. 43. STATE FLEET QUALIFIED RENEWABLE FUELS COMPLIANCE 13 REPORT. The department of administrative services shall submit 14 its first state fleet qualified renewable fuels compliance 15 report as required pursuant to section 8A.369, as enacted in 16 this division of this Act, not later than July 1, 2023. 17 DIVISION IV 18 RENEWABLE FUEL STANDARDS AND 19 CLASSIFICATIONS —— PROMOTIONAL INITIATIVES APPLIED 20 TO INCOME TAXES 21 PART A 22 E-85 GASOLINE PROMOTION TAX CREDIT 23 Sec. 44. Section 422.11O, subsection 2, paragraph b, Code 24 2022, is amended to read as follows: 25 b. The tax credit shall apply to E-85 gasoline that meets 26 the standards for that classification as provided in section 27 214A.2 . 28 Sec. 45. Section 422.11O, subsection 5, Code 2022, is 29 amended to read as follows: 30 5. a. A retail dealer is eligible to claim an E-85 gasoline 31 promotion tax credit as provided in this section even though 32 the retail dealer claims an E-15 plus gasoline promotion tax 33 credit pursuant to section 422.11Y for the same tax year. 34 b. This subsection is repealed January 1, 2026. 35 -23- LSB 5021XL (24) 89 da/ns 23/ 55
S.F. _____ H.F. _____ Sec. 46. Section 422.11O, subsection 8, Code 2022, is 1 amended to read as follows: 2 8. This section is repealed on January 1, 2025 2028 . 3 Sec. 47. Section 422.33, subsection 11B, paragraph c, Code 4 2022, is amended to read as follows: 5 c. This subsection is repealed on January 1, 2025 2028 . 6 Sec. 48. 2006 Iowa Acts, chapter 1142, section 49, 7 subsection 3, as amended by 2011 Iowa Acts, chapter 113, 8 section 20, and 2016 Iowa Acts, chapter 1106, section 6, is 9 amended to read as follows: 10 3. For a retail dealer who may claim an E-85 gasoline 11 promotion tax credit under section 422.11O or 422.33, 12 subsection 11B , as enacted in this Act and amended in 13 subsequent Acts, in calendar year 2024 2027 and whose tax 14 year ends prior to December 31, 2024 2027 , the retail dealer 15 may continue to claim the tax credit in the retail dealer’s 16 following tax year. In that case, the tax credit shall be 17 calculated in the same manner as provided in section 422.11O 18 or 422.33, subsection 11B , as enacted in this Act and amended 19 in subsequent Acts, for the remaining period beginning on the 20 first day of the retail dealer’s new tax year until December 21 31, 2024 2027 . For that remaining period, the tax credit shall 22 be calculated in the same manner as a retail dealer whose tax 23 year began on the previous January 1 and who is calculating the 24 tax credit on December 31, 2024 2027 . 25 PART B 26 BIODIESEL BLENDED FUEL TAX CREDIT 27 Sec. 49. Section 422.11P, subsection 3, paragraph b, Code 28 2022, is amended to read as follows: 29 b. The tax credit shall apply to biodiesel blended fuel 30 classified as provided in this section , if the classification 31 meets the standards provided in section 214A.2 . In ensuring 32 that biodiesel blended fuel meets the classification 33 requirements of this section , the department shall take 34 into account reasonable variances due to testing and other 35 -24- LSB 5021XL (24) 89 da/ns 24/ 55
S.F. _____ H.F. _____ limitations. The department shall adopt rules to provide that 1 where a blending error occurs and an insufficient amount of 2 biodiesel has inadvertently been blended with petroleum-based 3 diesel fuel so that the mixture fails to qualify as B-11 or 4 higher a one percent tolerance applies when classifying the 5 biodiesel blended fuel. 6 Sec. 50. Section 422.11P, subsection 4, Code 2022, is 7 amended by striking the subsection and inserting in lieu 8 thereof the following: 9 4. A retail dealer whose tax year is on a calendar 10 year basis shall calculate the amount of the tax credit by 11 multiplying a designated rate by the retail dealer’s total 12 biodiesel blended fuel gallonage as provided in section 452A.31 13 which qualifies under this subsection. 14 a. In order to qualify for the tax credit, the biodiesel 15 blended fuel must be classified as B-11 or higher as provided 16 in paragraph “b” . 17 b. The designated rate is determined as follows: 18 (1) For biodiesel blended fuel classified as B-11 or higher 19 but not as high as B-20, the designated rate is five cents. 20 (2) For biodiesel blended fuel classified as B-20 or higher 21 but not as high as B-30, the designated rate is seven cents. 22 However, a classification higher than B-20 does not qualify 23 for a tax credit under this subparagraph unless standards for 24 that classification have been established by the department of 25 agriculture and land stewardship pursuant to section 214A.2. 26 (3) For biodiesel blended fuel classified as B-30 or 27 higher, the designated rate is ten cents. A classification of 28 B-30 or higher does not qualify for a tax credit under this 29 subparagraph unless standards for that classification have 30 been established by the department of agriculture and land 31 stewardship pursuant to section 214A.2. 32 Sec. 51. Section 422.11P, subsection 8, Code 2022, is 33 amended to read as follows: 34 8. This section is repealed January 1, 2025 2028 . 35 -25- LSB 5021XL (24) 89 da/ns 25/ 55
S.F. _____ H.F. _____ Sec. 52. Section 422.33, subsection 11C, paragraph c, Code 1 2022, is amended to read as follows: 2 c. This subsection is repealed on January 1, 2025 2028 . 3 Sec. 53. 2011 Iowa Acts, chapter 113, section 31, as amended 4 by 2016 Iowa Acts, chapter 1106, section 10, is amended to read 5 as follows: 6 SEC. 31. TAX CREDIT AVAILABILITY. For a retail dealer 7 who may claim a biodiesel blended fuel promotion tax credit 8 under section 422.11P or 422.33, subsection 11C , as amended 9 in this Act and amended in subsequent Acts, in calendar year 10 2024 2027 , and whose tax year ends prior to December 31, 2024 11 2027 , the retail dealer may continue to claim the tax credit in 12 the retail dealer’s following tax year. In that case, the tax 13 credit shall be calculated in the same manner as provided in 14 section 422.11P or 422.33, subsection 11C , as amended in this 15 Act and amended in subsequent Acts, for the remaining period 16 beginning on the first day of the retail dealer’s new tax year 17 until December 31, 2024 2027 . For that remaining period, the 18 tax credit shall be calculated in the same manner as a retail 19 dealer whose tax year began on the previous January 1 and who 20 is calculating the tax credit on December 31, 2024 2027 . 21 Sec. 54. EFFECTIVE DATE. This part of this division of this 22 Act takes effect January 1, 2023. 23 PART C 24 E-15 PLUS GASOLINE PROMOTION TAX CREDIT 25 Sec. 55. Section 422.11Y, subsection 4, Code 2022, is 26 amended by striking the subsection and inserting in lieu 27 thereof the following: 28 4. A retail dealer whose tax year is on a calendar 29 year basis shall calculate the amount of the tax credit by 30 multiplying a designated rate by the retail dealer’s total 31 ethanol blended gasoline gallonage as provided in section 32 452A.31 which qualifies under this subsection. 33 a. In order to qualify for the tax credit, the ethanol 34 blended gasoline must be classified as E-15 or higher but must 35 -26- LSB 5021XL (24) 89 da/ns 26/ 55
S.F. _____ H.F. _____ not be E-85 gasoline. 1 b. The designated rate of the tax credit is nine cents. 2 Sec. 56. Section 422.11Y, subsection 9, Code 2022, is 3 amended to read as follows: 4 9. This section is repealed on January 1, 2025 2026 . 5 Sec. 57. Section 422.33, subsection 11D, paragraph c, Code 6 2022, is amended to read as follows: 7 c. This subsection is repealed on January 1, 2025 2026 . 8 Sec. 58. 2011 Iowa Acts, chapter 113, section 37, as amended 9 by 2016 Iowa Acts, chapter 1106, section 3, is amended to read 10 as follows: 11 SEC. 37. TAX CREDIT AVAILABILITY. For a retail dealer who 12 may claim an E-15 plus gasoline promotion tax credit under 13 section 422.11Y or 422.33, subsection 11D , as enacted in this 14 Act and amended in subsequent Acts, in calendar year 2024 15 2025 , and whose tax year ends prior to December 31, 2024 2025 , 16 the retail dealer may continue to claim the tax credit in the 17 retail dealer’s following tax year. In that case, the tax 18 credit shall be calculated in the same manner as provided in 19 section 422.11Y or 422.33, subsection 11D , as enacted in this 20 Act and amended in subsequent Acts, for the remaining period 21 beginning on the first day of the retail dealer’s new tax year 22 until December 31, 2024 2025 . For that remaining period, the 23 tax credit shall be calculated in the same manner as a retail 24 dealer whose tax year began on the previous January 1 and who 25 is calculating the tax credit on December 31, 2024 2025 . 26 Sec. 59. EFFECTIVE DATE. This part of this division of this 27 Act takes effect January 1, 2023. 28 PART D 29 ADMINISTRATION 30 Sec. 60. ADMINISTRATIVE RULES. The department of revenue 31 may adopt rules under chapter 17A prior to the effective date 32 of parts B and C of this division of this Act, which rules shall 33 take effect January 1, 2023. 34 DIVISION V 35 -27- LSB 5021XL (24) 89 da/ns 27/ 55
S.F. _____ H.F. _____ RENEWABLE FUEL STANDARDS 1 AND CLASSIFICATIONS —— PROMOTIONAL INITIATIVES APPLIED 2 TO EXCISE TAX ON ETHANOL BLENDED GASOLINE AND BIODIESEL BLENDED 3 FUEL 4 PART A 5 REPORTING REQUIREMENTS 6 Sec. 61. Section 452A.2, Code 2022, is amended by adding the 7 following new subsection: 8 NEW SUBSECTION . 37A. “Renewable fuel” means the same as 9 defined in section 214A.1. 10 Sec. 62. NEW SECTION . 452A.2A Standards and classifications 11 of fuel. 12 For purposes of this chapter, motor fuel, including 13 a renewable fuel, must meet the same standards and 14 classifications as provided in section 214A.2. 15 Sec. 63. Section 452A.31, subsection 2, paragraph a, 16 subparagraph (1), subparagraph division (c), Code 2022, is 17 amended to read as follows: 18 (c) The total E-15 plus gasoline gallonage which is the 19 total number of gallons of ethanol blended gasoline classified 20 as E-15 or higher, including E-85 gasoline. 21 Sec. 64. Section 452A.31, subsection 2, paragraph a, 22 subparagraph (1), Code 2022, is amended by adding the following 23 new subparagraph division: 24 NEW SUBPARAGRAPH DIVISION . (d) The total E-15 gasoline 25 gallonage which is the total number of gallons of ethanol 26 blended gasoline classified as E-15. 27 Sec. 65. Section 452A.31, subsection 3, paragraph a, Code 28 2022, is amended to read as follows: 29 a. A retail dealer’s total diesel fuel gallonage is the 30 total number of gallons of diesel fuel which the retail dealer 31 sells and dispenses from all motor fuel pumps operated by 32 the retail dealer in this state during a twelve-month period 33 beginning January 1 and ending December 31. The retail 34 dealer’s total diesel fuel gallonage is divided into the 35 -28- LSB 5021XL (24) 89 da/ns 28/ 55
S.F. _____ H.F. _____ following classifications: 1 (1) The total biodiesel blended fuel gallonage which is 2 the retail dealer’s total number of gallons of biodiesel 3 blended fuel . and which includes all of the following 4 subclassifications: 5 (a) The total B-5 plus gallonage which is the total number 6 of gallons of biodiesel blended fuel classified as B-5 or 7 higher up to but not including B-11. 8 (2) (b) The total B-11 plus gallonage which is the total 9 number of gallons of biodiesel blended fuel classified as B-11 10 or higher up to but not including B-20 . 11 (c) The total B-20 plus gallonage which is the total number 12 of gallons of biodiesel blended fuel classified as B-20 or 13 higher up to but not including B-30. 14 (d) The total B-30 plus gallonage which is the total number 15 of gallons of biodiesel blended fuel classified as B-30 or 16 higher. 17 (3) (2) The total nonblended diesel fuel gallonage which 18 is the total number of gallons of diesel fuel which is not 19 biodiesel or biodiesel blended fuel. 20 Sec. 66. Section 452A.31, subsection 4, paragraph a, 21 subparagraph (1), subparagraph division (c), Code 2022, is 22 amended to read as follows: 23 (c) The aggregate E-15 plus gasoline gallonage which is the 24 aggregate total number of gallons of ethanol blended gasoline 25 classified as E-15 or higher, including E-85 gasoline. 26 Sec. 67. Section 452A.31, subsection 4, paragraph a, 27 subparagraph (1), Code 2022, is amended by adding the following 28 new subparagraph division: 29 NEW SUBPARAGRAPH DIVISION . (d) The aggregate E-15 gasoline 30 gallonage which is the aggregate total number of gallons of 31 ethanol blended gasoline classified as E-15. 32 Sec. 68. Section 452A.31, subsection 5, paragraph a, Code 33 2022, is amended to read as follows: 34 a. The aggregate diesel fuel gallonage is the total number 35 -29- LSB 5021XL (24) 89 da/ns 29/ 55
S.F. _____ H.F. _____ of gallons of diesel fuel which all retail dealers sell and 1 dispense from all motor fuel pumps operated by the retail 2 dealers in this state during a twelve-month period beginning 3 January 1 and ending December 31. The aggregate diesel fuel 4 gallonage is divided into the following classifications: 5 (1) The aggregate biodiesel blended fuel gallonage 6 which is the aggregate total number of gallons of biodiesel 7 blended fuel . and which includes all of the following 8 subclassifications: 9 (2) (a) The aggregate B-11 B-5 plus gallonage which is the 10 aggregate total number of gallons of biodiesel blended fuel 11 classified as B-5 or higher up to but not including B-11 or 12 higher . 13 (b) The aggregate B-11 plus gallonage which is the aggregate 14 total number of gallons of biodiesel blended fuel classified as 15 B-11 or higher up to but not including B-20. 16 (c) The aggregate B-20 plus gallonage which is the aggregate 17 total number of gallons of biodiesel blended fuel classified as 18 B-20 or higher up to but not including B-30. 19 (d) The aggregate B-30 plus gallonage which is the aggregate 20 total number of gallons of biodiesel blended fuel classified 21 as B-30 or higher. 22 (3) (2) The aggregate nonblended diesel fuel gallonage 23 which is the aggregate total number of gallons of diesel fuel 24 which is not biodiesel or biodiesel blended fuel. 25 Sec. 69. Section 452A.33, subsection 1, paragraph a, 26 unnumbered paragraph 1, Code 2022, is amended to read as 27 follows: 28 Each retail dealer shall report its total motor fuel 29 gasoline and diesel fuel gallonage for a determination period 30 as follows: 31 Sec. 70. Section 452A.33, subsection 1, paragraph b, 32 subparagraphs (1) and (2), Code 2022, are amended to read as 33 follows: 34 (1) The information submitted on a company-wide basis shall 35 -30- LSB 5021XL (24) 89 da/ns 30/ 55
S.F. _____ H.F. _____ include the total motor gasoline and diesel fuel gallonage, 1 including for each classification and subclassification, sold 2 and dispensed by the retail dealer as provided in paragraph “a” 3 for all retail motor fuel sites from which the retail dealer 4 sells and dispenses motor fuel gasoline or diesel fuel . 5 (2) The information submitted on a site-by-site basis shall 6 include the total motor gasoline and diesel fuel gallonage, 7 including for each classification and subclassification, sold 8 and dispensed by the retail dealer as provided in paragraph 9 “a” separately for each retail motor fuel site from which the 10 retail dealer sells and dispenses motor gasoline or diesel 11 fuel. 12 Sec. 71. Section 452A.33, subsection 1, paragraph c, Code 13 2022, is amended to read as follows: 14 c. The retail dealer shall prepare and submit file the 15 report with the department in a manner and according to 16 procedures required by the department in compliance with 17 section 452A.61 . However, the department may require that the 18 retail dealer file the report with the department by electronic 19 transmission. The department may require that a retail 20 dealers report to dealer file the report with the department 21 on an annual, quarterly, or monthly basis. The department, 22 upon application by a retail dealer, may grant a reasonable 23 extension of time to file the report. A retail dealer who 24 fails to file the report as required in this section or who 25 fails to maintain records required to file the report shall be 26 subject to a civil penalty of not more than one hundred dollars 27 per occurrence which shall be deposited in the general fund of 28 the state. 29 Sec. 72. Section 452A.33, subsection 2, paragraph c, Code 30 2022, is amended to read as follows: 31 c. The report shall not provide information regarding motor 32 fuel or gasoline, diesel fuel, or a biofuel which is sold and 33 dispensed by an individual retail dealer or at a particular 34 retail motor fuel site. The report shall not include a trade 35 -31- LSB 5021XL (24) 89 da/ns 31/ 55
S.F. _____ H.F. _____ secret protected as a confidential record pursuant to section 1 22.7 . 2 Sec. 73. EMERGENCY RULES. The department of revenue may 3 adopt emergency rules under section 17A.4, subsection 3, and 4 section 17A.5, subsection 2, paragraph “b”, to implement the 5 provisions of sections 452A.31 and 452A.33 as amended by 6 this part of this division of this Act. Any rules adopted 7 in accordance with this section shall also be published as a 8 notice of intended action as provided in section 17A.4. 9 Sec. 74. EFFECTIVE DATE. This part of this division of this 10 Act, being deemed of immediate importance, takes effect upon 11 enactment. 12 Sec. 75. RETROACTIVE APPLICABILITY. This part of this 13 division of this Act applies retroactively to January 1, 2022. 14 PART B 15 EXCISE TAX IMPOSED ON GASOLINE AND DIESEL FUEL 16 Sec. 76. Section 452A.3, subsection 1, paragraph b, 17 unnumbered paragraph 1, Code 2022, is amended to read as 18 follows: 19 On and after July 1, 2026 2030 , an excise tax of thirty 20 cents is imposed on each gallon of ethanol blended gasoline 21 classified as E-15 or higher. Before July 1, 2026 2030 , the 22 rate of the excise tax on ethanol blended gasoline classified 23 as E-15 or higher shall be based on the number of gallons of 24 ethanol blended gasoline classified as E-15 or higher that are 25 distributed in this state as expressed as a percentage of the 26 number of gallons of motor fuel distributed in this state, 27 which is referred to as the distribution percentage. For 28 purposes of this paragraph “b” , only ethanol blended gasoline 29 and nonblended gasoline, not including aviation gasoline, shall 30 be used in determining the percentage basis for the excise 31 tax. The department shall determine the percentage basis 32 for each determination period beginning January 1 and ending 33 December 31 based on data information from the reports filed 34 submitted to the department for filing pursuant to section 35 -32- LSB 5021XL (24) 89 da/ns 32/ 55
S.F. _____ H.F. _____ 452A.33 . The rate for the excise tax shall apply for the 1 period beginning July 1 and ending June 30 following the end of 2 the determination period. Before July 1, 2026 2030 , the rate 3 of the excise tax on each gallon of ethanol blended gasoline 4 classified as E-15 or higher shall be as follows: 5 Sec. 77. Section 452A.3, subsection 3, paragraph a, 6 subparagraph (1), Code 2022, is amended to read as follows: 7 (1) Except as otherwise provided in this section and in 8 this subchapter , the rate of the excise tax on each gallon of 9 special fuel for diesel engines of motor vehicles used for any 10 purpose for the privilege of operating motor vehicles in this 11 state, other than biodiesel blended fuel classified as B-11 12 B-20 or higher, is thirty-two and five-tenths cents per gallon. 13 Sec. 78. Section 452A.3, subsection 3, paragraph a, 14 subparagraph (2), unnumbered paragraph 1, Code 2022, is amended 15 to read as follows: 16 Except as otherwise provided in this section and in this 17 subchapter , this subparagraph shall apply to the excise tax 18 imposed on each gallon of biodiesel blended fuel classified 19 as B-11 B-20 or higher used for any purpose for the privilege 20 of operating motor vehicles in this state. On and after July 21 1, 2026 2030 , the rate of the excise tax on each gallon of 22 biodiesel blended fuel classified as B-11 B-20 or higher is 23 thirty-two and five-tenths cents. Before July 1, 2026 2030 , 24 the rate of the excise tax on each gallon of biodiesel blended 25 fuel classified as B-20 or higher shall be based on the number 26 of gallons of biodiesel blended fuel classified as B-11 B-20 27 or higher that are distributed in this state as expressed as a 28 percentage of the number of gallons of special fuel for diesel 29 engines of motor vehicles distributed in this state, which is 30 referred to as the distribution percentage. The department 31 shall determine the percentage basis for each determination 32 period beginning January 1 and ending December 31 based on data 33 information from the reports filed submitted to the department 34 for filing pursuant to section 452A.33 . The rate of the excise 35 -33- LSB 5021XL (24) 89 da/ns 33/ 55
S.F. _____ H.F. _____ tax shall apply for the period beginning July 1 and ending June 1 30 following the end of the determination period. Before July 2 1, 2026 2030 , the rate of the excise tax on each gallon of 3 biodiesel blended fuel classified as B-11 B-20 or higher shall 4 be as follows: 5 Sec. 79. EFFECTIVE DATE. This part of this division of this 6 Act takes effect July 1, 2024. 7 PART C 8 DEDUCTION OF EXCISE TAX IMPOSED ON BIOFUEL 9 USED IN BLENDING WITH GASOLINE AND DIESEL FUEL 10 Sec. 80. Section 452A.8, subsection 2, paragraph a, Code 11 2022, is amended by adding the following new subparagraph: 12 NEW SUBPARAGRAPH . (3) (a) The gallonage of gasoline or 13 diesel fuel withdrawn from a terminal by a licensee to be 14 blended with a biofuel after it is withdrawn from the terminal 15 to the extent the tax rate on the gasoline or diesel fuel 16 exceeds the tax rate which would be due on the ethanol blended 17 gasoline or biodiesel blended fuel pursuant to section 452A.3. 18 (b) This subparagraph is repealed July 1, 2030. 19 DIVISION VI 20 RENEWABLE FUEL STANDARDS AND CLASSIFICATIONS —— PROMOTIONAL 21 INITIATIVES APPLIED TO SALES AND USE TAX —— REFUND PAID TO 22 BIODIESEL PRODUCERS 23 PART A 24 PRINCIPAL PROVISIONS 25 Sec. 81. Section 423.4, subsection 9, Code 2022, is amended 26 to read as follows: 27 9. A person who qualifies as a biodiesel producer as 28 provided in this subsection may apply to the director for a 29 refund of the amount of the sales or use tax imposed and paid 30 upon purchases made by the person. 31 a. The person must be engaged in the manufacturing 32 of biodiesel who has registered with the United States 33 environmental protection agency as a manufacturer according to 34 the requirements in 40 C.F.R. §79.4 . The biodiesel must be for 35 -34- LSB 5021XL (24) 89 da/ns 34/ 55
S.F. _____ H.F. _____ use in biodiesel blended fuel in conformance with the standards 1 and classifications in section 214A.2 . The person must comply 2 with the requirements of this subsection and rules adopted by 3 the department pursuant to this subsection . 4 b. The amount of the refund shall be calculated by 5 multiplying a designated rate by the total number of gallons 6 of biodiesel produced by the biodiesel producer in this state 7 during each quarter of a calendar year. The designated rate 8 shall be two four cents. 9 c. A biodiesel producer shall not be eligible to receive 10 a refund under this subsection on more than twenty-five 11 million gallons of biodiesel produced each calendar year by 12 the biodiesel producer at each facility where the biodiesel 13 producer manufactures biodiesel. 14 d. A person shall obtain a refund by completing forms 15 furnished by the department and filed by the person on a 16 quarterly basis as required by the department. The department 17 shall refund the amount claimed by the person after subtracting 18 any amount owing from the sales or use taxes imposed and paid 19 upon purchases made by the person. 20 e. This subsection is repealed on January 1, 2025 2028 . 21 Sec. 82. EFFECTIVE DATE. This part of this division of this 22 Act takes effect January 1, 2023. 23 PART B 24 IMPLEMENTATION 25 Sec. 83. ADMINISTRATIVE RULES. The department of revenue 26 may adopt rules under chapter 17A prior to the effective date 27 of part A of this division of this Act, which rules shall take 28 effect January 1, 2023. 29 DIVISION VII 30 PROMOTIONAL INITIATIVES —— RENEWABLE FUEL INFRASTRUCTURE 31 Sec. 84. Section 159A.11, subsection 6, Code 2022, is 32 amended by striking the subsection and inserting in lieu 33 thereof the following: 34 6. “Motor fuel storage and dispensing infrastructure” or 35 -35- LSB 5021XL (24) 89 da/ns 35/ 55
S.F. _____ H.F. _____ “infrastructure” means the same as defined in section 214.1. 1 Sec. 85. Section 159A.11, Code 2022, is amended by adding 2 the following new subsection: 3 NEW SUBSECTION . 6A. “Motor fuel storage tank” means the 4 same as defined in section 214.1. 5 Sec. 86. Section 159A.11, subsection 10, Code 2022, is 6 amended by striking the subsection. 7 Sec. 87. Section 159A.12, Code 2022, is amended to read as 8 follows: 9 159A.12 Classification Standards and classifications of motor 10 fuel and renewable fuel. 11 For purposes of this subchapter , ethanol blended fuel and 12 biodiesel motor fuel shall be classified in the same manner , 13 including a renewable fuel, must meet the same standards and 14 classifications as provided in section 214A.2 . 15 Sec. 88. Section 159A.13, subsection 6, Code 2022, is 16 amended by striking the subsection. 17 Sec. 89. Section 159A.14, subsections 1 and 2, Code 2022, 18 are amended to read as follows: 19 1. The purpose of the program is to improve retail 20 motor fuel sites by installing, replacing, or converting 21 infrastructure to be used to store, blend, or dispense 22 renewable fuel. The infrastructure shall be ethanol 23 infrastructure or biodiesel infrastructure. 24 a. (1) Ethanol infrastructure shall be designed and used 25 exclusively have the capacity to do any of the following: 26 (a) Store and dispense E-15 gasoline. At least for the 27 period beginning on September 16 and ending on May 31 of each 28 year, the ethanol infrastructure must be used to store and 29 dispense E-15 gasoline as a registered fuel recognized by the 30 United States environmental protection agency. 31 (b) Store and dispense E-85 gasoline. 32 (c) (b) Store, blend, and dispense motor fuel ethanol or 33 ethanol blended gasoline from a motor fuel blender pump. The 34 ethanol infrastructure must be used for the storage of ethanol 35 -36- LSB 5021XL (24) 89 da/ns 36/ 55
S.F. _____ H.F. _____ or ethanol blended gasoline, or for blending ethanol with 1 gasoline. The ethanol infrastructure must at least include 2 a motor fuel blender pump which that dispenses different 3 classifications of ethanol blended gasoline and allows E-15 4 gasoline and E-85 gasoline to be dispensed at all times that 5 the blender pump is operating. 6 (2) Biodiesel infrastructure shall be designed and used 7 exclusively have the capacity to do any of the following: 8 (a) Store and dispense biodiesel or biodiesel blended fuel 9 classified as B-20 or higher . 10 (b) Blend or Store, blend, and dispense biodiesel fuel 11 from a motor fuel blender pump. The biodiesel infrastructure 12 must at least include a motor fuel blender pump that dispenses 13 different classifications of biodiesel blended fuel and allows 14 biodiesel blended fuel classified as B-5 or higher to be 15 dispensed at all times that the blender pump is operating. 16 b. The infrastructure must be part of the premises of 17 a retail motor fuel site operated by a retail dealer. The 18 infrastructure shall not include a tank vehicle. 19 2. a. A person may apply to the department to receive 20 financial incentives on a cost-share basis according to 21 procedures required by the department . The department shall 22 accept a timely received application to improve a retail 23 motor fuel site as provided in this section and forward the 24 applications that application to the underground storage tank 25 fund infrastructure board , as required by that the board , for 26 evaluation and recommendation. The underground storage tank 27 fund board may rank the applications with comments and shall 28 forward them to the infrastructure board for its approval or 29 disapproval. 30 b. The application shall allow the department to determine 31 whether the person is a retail dealer assigned special status. 32 The department shall assign the person special status if 33 the person does not comply with the E-15 access standard 34 as provided in section 214A.32 only because the person is 35 -37- LSB 5021XL (24) 89 da/ns 37/ 55
S.F. _____ H.F. _____ ineligible to be issued an E-15 incompatible infrastructure 1 class 2 waiver order for that retail motor fuel site as 2 provided in section 214A.35, subsection 6. 3 c. The infrastructure board may establish a system to 4 rank applications for approval. In ranking applications, the 5 infrastructure board may provide special priority to any of the 6 following: 7 (1) A retail motor fuel site that has been constructed and 8 is operating. 9 (2) (a) A retail motor fuel site owned or operated by a 10 person who the department assigns special status as provided 11 in paragraph “b” . 12 (b) (i) This subparagraph shall be implemented on January 13 1, 2023. 14 (ii) This subparagraph division is repealed January 2, 15 2023. 16 d. The department shall award financial incentives on a 17 cost-share basis to an eligible person whose application was 18 approved by the infrastructure board. 19 Sec. 90. Section 159A.14, subsection 3, unnumbered 20 paragraph 1, Code 2022, is amended to read as follows: 21 The infrastructure board shall approve cost-share 22 agreements executed by the department and persons that the 23 infrastructure board determines are eligible as provided in 24 this section , according to terms and conditions required by the 25 infrastructure board. The infrastructure board shall determine 26 the amount of the financial incentives to be awarded to a 27 person participating in the program. The determination may be 28 based on applications prioritized for approval as described in 29 subsection 2. In order to be eligible to participate in the 30 program , all of the following must apply: 31 Sec. 91. Section 159A.14, subsection 5, Code 2022, is 32 amended to read as follows: 33 5. An award of financial incentives to a participating 34 person shall be on a cost-share basis in the form of a grant. 35 -38- LSB 5021XL (24) 89 da/ns 38/ 55
S.F. _____ H.F. _____ To participate in the program, an eligible person must execute 1 a cost-share agreement with the department as approved by 2 the infrastructure board in which the person contributes a 3 percentage of the total costs related to improving the retail 4 motor fuel site. 5 a. A cost-share agreement shall be for a three-year period 6 or a five-year period. 7 b. (1) For the term of an agreement to improve a retail 8 motor fuel site by installing, replacing, or converting ethanol 9 infrastructure, the participating person must use the ethanol 10 infrastructure to store and dispense, or store, blend, and 11 dispense, ethanol blended gasoline classified as E-15 or 12 higher. 13 (2) For the term of an agreement to improve a motor 14 fuel site by installing, replacing, or converting biodiesel 15 infrastructure, the participating person must use the biodiesel 16 infrastructure to store and dispense, or store, blend, and 17 dispense, biodiesel blended fuel classified as B-5 or higher. 18 However, at least for the period beginning April 1 and ending 19 October 31 of each year, the participating person must use 20 the biodiesel infrastructure to store and dispense, or store, 21 blend, and dispense, biodiesel blended fuel classified as B-11 22 or higher. 23 c. A cost-share agreement shall include provisions for 24 standard financial incentives or standard financial incentives 25 and supplemental financial incentives as provided in this 26 subsection . The infrastructure board may approve multiple 27 improvements to the same retail motor fuel site for the full 28 amount available for both ethanol infrastructure and biodiesel 29 infrastructure so long as the improvements for ethanol 30 infrastructure and for biodiesel infrastructure are made under 31 separate cost-share agreements. 32 a. d. (1) Except as provided in paragraph “b” “e” , 33 a participating person may be awarded standard financial 34 incentives to make improvements to a retail motor fuel site. 35 -39- LSB 5021XL (24) 89 da/ns 39/ 55
S.F. _____ H.F. _____ The standard financial incentives awarded to a participating 1 person shall not exceed the following: 2 (a) For a three-year cost-share agreement, fifty percent of 3 the actual cost of making the improvement or thirty thousand 4 dollars, whichever is less. 5 (b) For a five-year cost-share agreement, seventy percent 6 of the actual cost of making the improvement or fifty thousand 7 dollars, whichever is less. 8 (2) (a) The infrastructure board may approve multiple 9 awards of standard financial incentives to make improvements to 10 a the retail motor fuel site so long as the total amount of the 11 awards for ethanol infrastructure or biodiesel infrastructure 12 does not exceed the limitations provided in subparagraph (1). 13 (b) If the department determines that a participating 14 person is assigned special status because the participating 15 person is ineligible to be issued an E-15 incompatible 16 infrastructure class 2 waiver order for the retail motor fuel 17 site as provided in subsection 2, the infrastructure board may 18 approve one or multiple awards of standard financial incentives 19 to make improvements to that retail motor fuel site subject to 20 all of the following: 21 (i) The total amount of awards shall not be reduced by 22 the amount of any standard financial incentives awarded to 23 improve the retail motor fuel site before the department’s 24 determination, notwithstanding subparagraph division (a). 25 (ii) The total amount of awards for ethanol infrastructure 26 or biodiesel infrastructure shall not exceed the limitations 27 provided in subparagraph (1). 28 b. e. In addition to any standard financial incentives 29 awarded to a participating person under paragraph “a” “d” , the 30 participating person may be awarded supplemental financial 31 incentives to make improvements to a retail motor fuel site to 32 do any of the following: 33 (1) Upgrade or replace a dispenser which is part of 34 gasoline storage and dispensing infrastructure used to store 35 -40- LSB 5021XL (24) 89 da/ns 40/ 55
S.F. _____ H.F. _____ and dispense E-85 gasoline as provided in section 455G.31 . 1 The participating person is only eligible to be awarded the 2 supplemental financial incentives if the person installed the 3 dispenser not later than sixty days after July 27, 2011. The 4 supplemental financial incentives awarded to the participating 5 person shall not exceed seventy-five percent of the actual cost 6 of making the improvement or thirty thousand dollars, whichever 7 is less. 8 (2) To improve additional retail motor fuel sites owned or 9 operated by a participating person within a twelve-month period 10 as provided in the cost-share agreement. The supplemental 11 financial incentives shall be used for the installation 12 of an additional motor fuel storage tank and associated 13 infrastructure at each such retail motor fuel site. A 14 participating person may be awarded supplemental financial 15 incentives under this subparagraph paragraph and standard 16 financial incentives under paragraph “a” “d” to improve the 17 same retail motor fuel site. The supplemental financial 18 incentives awarded to the participating person shall not 19 exceed twenty-four thousand dollars. The participating person 20 shall be awarded the supplemental financial incentives on a 21 cumulative basis according to the schedule provided in this 22 subparagraph paragraph , which shall not exceed the following: 23 (a) (1) For the second retail motor fuel site, six thousand 24 dollars. 25 (b) (2) For the third retail motor fuel site, six thousand 26 dollars. 27 (c) (3) For the fourth retail motor fuel site, six thousand 28 dollars. 29 (d) (4) For the fifth retail motor fuel site, six thousand 30 dollars. 31 Sec. 92. Section 159A.15, subsection 1, Code 2022, is 32 amended to read as follows: 33 1. A person may apply to the department to receive financial 34 incentives on a cost-share basis. The department shall forward 35 -41- LSB 5021XL (24) 89 da/ns 41/ 55
S.F. _____ H.F. _____ the applications to the underground storage tank fund board as 1 required by that board for evaluation and recommendation. The 2 underground storage tank fund board may rank the applications 3 with comments and shall forward them to the infrastructure 4 board for approval or disapproval. The department shall award 5 financial incentives on a cost-share basis to an eligible 6 person whose application was approved by the infrastructure 7 board. 8 Sec. 93. Section 159A.16, subsection 3, Code 2022, is 9 amended to read as follows: 10 3. Moneys in the renewable fuel infrastructure fund are 11 appropriated to the department exclusively to support and 12 market the renewable fuel infrastructure programs as provided 13 in sections 159A.14 and 159A.15 , and as allocated in financial 14 incentives by the renewable fuel infrastructure board created 15 in section 159A.13 . Up to fifty 16 a. For each fiscal year, not more than one million 17 two hundred fifty thousand dollars shall be allocated to 18 support the renewable fuel infrastructure program for retail 19 motor fuel sites as provided in section 159A.14 to finance 20 the installation, replacement, or conversion of biodiesel 21 infrastructure as provided in that section. 22 b. For each fiscal year, not more than one hundred thousand 23 dollars shall be allocated each fiscal year to the department 24 to support the administration of the programs. The 25 c. For each fiscal year, the department may use up to 26 one and one-half percent of the program funds to market the 27 programs. Otherwise the moneys shall not be transferred, used, 28 obligated, appropriated, or otherwise encumbered except to 29 allocate as financial incentives under the programs. 30 EXPLANATION 31 The inclusion of this explanation does not constitute agreement with 32 the explanation’s substance by the members of the general assembly. 33 OVERVIEW. This bill provides a number of mechanisms to 34 promote the use of renewable fuels used to power internal 35 -42- LSB 5021XL (24) 89 da/ns 42/ 55
S.F. _____ H.F. _____ combustion engines that operate motor vehicles (e.g., both 1 conventional and flex-fuel). The bill provides for both 2 compliance requirements regulating the storage and dispensing 3 of renewable fuel, and promotional measures (specifically 4 financial and tax incentives) to increase the availability and 5 opportunity for consumers to select a renewable fuel. 6 OVERVIEW —— TYPES AND CLASSIFICATIONS OF RENEWABLE FUELS. 7 The term “motor fuel” is sometimes used to describe both 8 gasoline and diesel fuel (Code chapter 214A) but is also 9 used to describe only gasoline, while the term “special 10 fuel” is used to describe diesel fuel (Code chapter 452A). 11 The term “renewable fuel” is used to describe gasoline or 12 diesel fuel when blended with a percentage of its biofuel 13 component (biofuel). For gasoline, the biofuel, referred to 14 as ethanol, is denatured grain (corn) alcohol. For diesel 15 fuel, the biofuel, referred to as biodiesel, is derived from 16 processed animal fat or plant (soybean) oil. Renewable fuel 17 is based on the percentage of biofuel present in a volume 18 (gallon) of gasoline or diesel fuel (Code section 214A.2). 19 The biofuel’s percentage is designated by its classification. 20 Ethanol is abbreviated as “E” and biodiesel is abbreviated as 21 “B”. The term “xx” is a variable which represents the biofuel 22 percentage present by volume. Typically, a statute establishes 23 a classification threshold meaning that a renewable fuel 24 must have a minimum biofuel percentage. For ethanol blended 25 gasoline, the most widely recognized classification thresholds 26 are E-10, E-15, and E-85; and for biodiesel blended fuel, the 27 most widely recognized threshold classifications are B-5, B-11, 28 and B-20. For E-85, the biofuel percentage ranges from 70 29 percent to 85 percent. 30 OVERVIEW —— STATE AGENCIES REGULATING AND PROMOTING 31 RENEWABLE FUELS. State agencies responsible for administering 32 and enforcing regulations and awarding promotional incentives 33 include the department of agriculture and land stewardship 34 (DALS), the department of natural resources (DNR), the state 35 -43- LSB 5021XL (24) 89 da/ns 43/ 55
S.F. _____ H.F. _____ fire marshal (SFM), the department of revenue (DOR), and the 1 department of administrative services (DAS) together with 2 various agencies that operate the state’s motor vehicle fleet. 3 OVERVIEW —— REGULATION OF MOTOR FUEL (DALS). DALS is 4 responsible for setting standards for motor fuel (defined to 5 include gasoline and diesel fuel), including renewable fuel and 6 its biofuel components. Generally, the regulations are based 7 on voluntary global specifications adopted and published by a 8 widely recognized private association, A.S.T.M. international 9 (Code section 214A.2). DALS regulates the advertising of motor 10 fuel to ensure that it complies with applicable standards and 11 classifications (Code sections 214A.2 and 214A.3). A retail 12 dealer must notify a consumer at the pump that the motor fuel 13 being dispensed is a renewable fuel. Specifically, a sticker 14 must be placed on the motor fuel dispenser (dispenser) used to 15 discharge the renewable fuel (Code section 214A.16). DALS also 16 regulates the licensure of retail dealers and the inspection 17 of meters used to measure the discharge of motor fuel pumped 18 from a motor fuel storage tank (storage tank) to a dispenser 19 at either a fixed location such as a service station or a 20 mobile location such as a tank wagon (Code chapters 214 and 215 21 regulating weights and measures). The term motor fuel pump 22 (pump), including a motor fuel blender pump, is often used 23 colloquially to describe the meter which is equipment sealed 24 from tampering and used to record and display the volume of 25 motor fuel dispensed and to calculate the purchase price. A 26 retail dealer is licensed by DALS to operate a metered motor 27 fuel pump used to dispense motor fuel (Code section 214.2). 28 Generally, a person who violates a regulation relating 29 to a motor fuel standard is guilty of a serious misdemeanor 30 punishable by confinement for no more than one year and a fine 31 of at least $430 but not more than $2,560 with each day that 32 a continuing violation occurs considered a separate offense 33 (Code section 214A.11(1)). Alternatively, DALS may proceed 34 against the person by initiating an administrative (contested 35 -44- LSB 5021XL (24) 89 da/ns 44/ 55
S.F. _____ H.F. _____ case) proceeding in which the applicable civil penalty ranges 1 from $100 to $1,000 per violation (Code section 214A.11(2)). 2 A retail dealer who violates standards for the operation of a 3 metered pump (e.g., tampering) is subject to administrative 4 action, including having a metered pump placed out of service 5 (Code section 215.4). 6 OVERVIEW —— REGULATION OF MOTOR FUEL INFRASTRUCTURE (DNR 7 AND SFM). Generally, DNR is required to regulate underground 8 infrastructure, including a storage tank used to hold gasoline 9 or diesel fuel, including associated renewable fuels, in a 10 manner that prevents water pollution (Code chapter 455G). The 11 SFM regulates the storage, transportation, handling, or use 12 of flammable or combustible liquids including an aboveground 13 storage tank holding gasoline or diesel fuel and associated 14 renewable fuels (Code chapter 101). 15 OVERVIEW —— STATE VEHICLE USE OF RENEWABLE FUELS (DAS 16 AND VARIOUS STATE ENTITIES). DAS and other state entities 17 maintaining the state motor vehicle fleet must operate 18 those motor vehicles using a renewable fuel which must be 19 either ethanol blended gasoline or biodiesel blended fuel, 20 if commercially available. State agencies subject to the 21 requirement include DAS (Code chapter 8A), the commission for 22 the blind (Code chapter 216B), the state board of regents (Code 23 chapter 262), the department of transportation (Code chapter 24 307), and the department of corrections (Code chapter 904). 25 OVERVIEW —— RENEWABLE FUEL PROMOTION —— INCOME TAX CREDIT 26 PROGRAMS (DOR). DOR administers three renewable fuel income 27 tax credit programs, including the E-85 gasoline promotion 28 tax credit (Code sections 422.11O and 422.33(11B)), the E-15 29 plus gasoline promotion tax credit (Code sections 422.11Y 30 and 422.33(11D)), and the biodiesel blended fuel tax credit 31 (Code sections 422.11P and 422.33(11C)). For each tax 32 credit program, the amount of the tax credit is calculated by 33 multiplying the number of gallons of a renewable fuel that 34 meets a threshold classification sold at the retail site or 35 -45- LSB 5021XL (24) 89 da/ns 45/ 55
S.F. _____ H.F. _____ on a companywide basis and reported to DOR during the prior 1 determination period by a designated rate. For the E-85 2 gasoline promotion tax credit, the designated rate is 16 cents. 3 For the biodiesel blended fuel tax credit, the designated rate 4 is 3.5 cents for B-5 or higher but not as high as B-11 and 5 5 cents for B-11 or higher. For the E-15 plus gasoline promotion 6 tax credit, the designated rate depends upon the time of the 7 year. For the first period beginning January 1 and ending May 8 31, it is 3 cents, for the second period beginning June 1 and 9 ending September 15, it is 10 cents, and for the third period 10 beginning September 16 and ending December 31, it returns to 3 11 cents. All three tax rates expire on January 1, 2025. 12 OVERVIEW —— RENEWABLE FUEL PROMOTION —— EXCISE TAXES 13 (DOR). DOR compiles information from reports submitted by 14 retail dealers regarding the total gallonages of gasoline and 15 diesel fuel sold to consumers during the prior calendar year 16 (determination period). The information includes sales of 17 renewable fuels according to classification (Code sections 18 452A.31 and 452A.33). The information compiled by a retail 19 dealer is used as the basis for calculating a promotional 20 income tax credit claimed by the retail dealer. The aggregated 21 information is used by DOR to calculate the amount of 22 promotional incentives awarded in the form of reduced excise 23 taxes imposed on certain renewable fuel sold in this state 24 (Code chapter 452A). Specifically, DOR calculates the excise 25 tax for ethanol blended gasoline classified as E-15 or higher 26 and for biodiesel fuel classified as B-11 or higher for each 27 12-month period beginning July 1 and ending June 30 (coinciding 28 with the state fiscal year) (Code section 452A.3). 29 OVERVIEW —— RENEWABLE FUEL PROMOTION —— DEDUCTION OF EXCISE 30 TAX FOR LICENSED RENEWABLE FUEL BLENDERS (DOR). The excise 31 tax is imposed on gasoline and undyed (“clear”) diesel fuel 32 when it is “withdrawn from a terminal”, meaning the physical 33 movement from a storage and distribution facility (removed from 34 the rack) or the shipment of ethanol from its manufacturer to 35 -46- LSB 5021XL (24) 89 da/ns 46/ 55
S.F. _____ H.F. _____ a nonterminal location (701 IAC 67.1). A person who produces 1 a renewable fuel by combining gasoline or diesel fuel with 2 its biofuel component at a nonterminal location must obtain 3 a blender’s license (Code section 452A.6). The licensed 4 blender may be liable for the amount of any underpayment of the 5 excise tax due or may be entitled to receive a refund for any 6 overpayment of the excise tax due, depending on the amount of 7 the tax paid on the biofuel and whether the renewable fuel to 8 be sold meets the threshold classification for ethanol blended 9 gasoline (E-15) or biodiesel blended fuel (B-11) (Code section 10 452A.8 and 701 IAC 68.4). 11 OVERVIEW —— RENEWABLE FUEL SALES AND USE TAX PROMOTION —— 12 BIODIESEL PRODUCERS. A producer of biodiesel registered with 13 the EPA (40 C.F.R. §79.4) who manufactures biodiesel meeting 14 DALS standards (Code section 214A.2) is entitled to claim a 15 refund of sales and use taxes paid (Code section 423.4(9)). 16 The amount of the refund is 2 cents multiplied by the total 17 number of gallons of biodiesel during each quarter of the year. 18 However, a producer is not entitled to claim a refund during 19 a calendar year on any gallon in excess of 25 million gallons 20 produced at a facility. The refund expires on January 1, 2025. 21 OVERVIEW —— PROMOTION OF RENEWABLE FUEL AT RETAIL SITES 22 (DALS). DALS promotes renewable fuels by administering 23 the renewable fuel infrastructure program for retail motor 24 fuel sites (infrastructure program) in cooperation with 25 the renewable fuel infrastructure board (Code chapter 159A, 26 subchapter III). Under the infrastructure program, DALS enters 27 into an agreement with a retail dealer to improve a retail 28 site by installing, replacing, or converting infrastructure, 29 including storage tanks, pumps, dispensers, and associated 30 equipment (e.g., fittings and pipes). Specifically, financial 31 incentives are awarded on a cost-share basis to store a biofuel 32 classified as E-100 or B-100, or to store and dispense a 33 renewable fuel having a threshold classification of E-15 or 34 B-1 (Code section 159A.14). The award of financial incentives 35 -47- LSB 5021XL (24) 89 da/ns 47/ 55
S.F. _____ H.F. _____ is based on either a three-year agreement with the state’s 1 incurred cost share limited to 50 percent of the actual 2 costs incurred or $30,000, whichever is less, or a five-year 3 agreement with the state cost share limited to 70 percent of 4 the actual costs incurred or $50,000, whichever is less. A 5 participating person may receive multiple awards to improve the 6 same retail site so long as the total amount of awards does not 7 exceed the percentage or dollar amount limit. A retail dealer 8 who acts in violation of an agreement is subject to a civil 9 penalty of up to $1,000 per day (Code section 159A.14(7)). 10 The infrastructure program is supported by the renewable 11 fuel infrastructure fund (infrastructure fund) (Code section 12 159A.16). 13 BILL IN SUMMARY —— REQUIREMENTS —— COMPLIANCE WITH THE 14 E-15 ACCESS STANDARD (DALS). The bill creates an E-15 access 15 standard (new Code section 214A.31) beginning January 1, 16 2023. In order to comply with the E-15 access standard, a 17 retail dealer must advertise and sell E-15 gasoline from a 18 minimum number of qualifying dispensers (i.e., a dispenser 19 that dispenses gasoline) located at the retail dealer’s retail 20 site. The number of qualified dispensers required depends on 21 whether the retail dealer installed, replaced, or converted a 22 gasoline storage tank on or after that date. If so, a general 23 form of compliance applies and the retail dealer must dispense 24 E-15 gasoline from at least 50 percent of all qualified 25 gasoline dispensers located at the retail site. If the retail 26 site has only one qualified dispenser, that dispenser must 27 dispense E-15 gasoline. An alternative form of compliance 28 applies if the retail dealer has not installed, replaced, 29 or converted a gasoline storage tank on or after that date. 30 Under the alternative form of compliance, the retail dealer 31 is not required to dispense E-15 gasoline from any qualified 32 dispenser until January 1, 2026. On and after that date, two 33 conditions must be met: (1) the retail dealer still cannot 34 install, replace, or convert a gasoline storage tank, and (2) 35 -48- LSB 5021XL (24) 89 da/ns 48/ 55
S.F. _____ H.F. _____ the retail dealer must advertise and sell E-15 gasoline from 1 one qualified dispenser located at the retail motor fuel site. 2 If the retail dealer fails to meet any of the two conditions 3 under the alternative form of compliance, the retail dealer is 4 subject to the general form of compliance and must immediately 5 advertise and sell E-15 gasoline from the minimum number (one 6 or 50 percent) of the qualified dispensers at the retail site. 7 BILL IN SUMMARY —— REQUIREMENTS —— COMPLIANCE WITH 8 E-15 ACCESS STANDARD —— SUSPENSION AND WAIVERS. The bill 9 exempts certain unqualified dispensers from the E-15 access 10 standard, including those dispensers that exclusively dispense 11 aviation gasoline, diesel fuel, or kerosene (new Code section 12 214A.32). It also exempts dispensers that are part of a tank 13 vehicle dispensing motor fuel off-site. A special exemption 14 applies when the retail dealer cannot meet the E-15 access 15 standard because of maintenance, repair, or reconditioning of 16 infrastructure or the installation, expansion, replacement, 17 or conversion of infrastructure. The governor may issue an 18 executive order that suspends compliance by all retail dealers 19 doing business in the state or a geographic segment of the 20 state (new Code section 214A.33). The governor’s suspension 21 order must be supported by credible evidence that market forces 22 or existing infrastructure prevents compliance. The secretary 23 of agriculture may issue either of two administrative orders 24 that waive compliance by a retail dealer on a site-by-site 25 basis. The E-15 unavailability waiver order must be based on 26 credible evidence that a retail dealer has not been able to 27 reasonably obtain E-15 gasoline (new Code section 214A.34). 28 The E-15 incompatible infrastructure waiver order must be 29 based on credible evidence that the motor fuel storage and 30 dispensing infrastructure located at the retail motor fuel 31 site is not compatible with the use of E-15 gasoline. The 32 secretary of agriculture may issue either a class 1 or class 33 2 E-15 incompatible infrastructure waiver order (new Code 34 section 214A.35). A class 1 waiver order is based on the age 35 -49- LSB 5021XL (24) 89 da/ns 49/ 55
S.F. _____ H.F. _____ of all motor fuel tanks dispensing gasoline, and specifically 1 the date of installation and the construction materials used 2 (specifically fiberglass). A class 2 waiver order is based on 3 an evaluation of the motor fuel site to determine if the motor 4 fuel storage and dispensing infrastructure is not compatible 5 with E-15 gasoline. The evaluation must be completed by 6 DALS or a certified professional retail motor fuel site 7 installer (installer) certified by DALS. In addition, the 8 total estimated cost of the improvement must exceed the E-15 9 infrastructure base amount which equals the maximum amount of 10 financial incentives that the retail dealer could be awarded 11 under the renewable fuel infrastructure program for retail 12 dealers (amended Code section 159A.14). The secretary must 13 terminate a class 1 or class 2 waiver order based on the 14 occurrence of any number of specified events, including the 15 failure of the retail dealer to be licensed under weights 16 and measures regulations governing motor fuel pumps (Code 17 section 214.2); the cessation of the retail dealer’s business; 18 or the installation, replacement, or conversion of a motor 19 fuel storage tank. A retail dealer or installer who falsely 20 completes an application for a class 1 or class 2 waiver 21 order commits perjury and is subject to a class “D” felony 22 (punishable by confinement for no more than five years and a 23 fine of at least $1,025 but not more than $10,245). 24 BILL IN SUMMARY —— REQUIREMENTS —— RETAIL MOTOR FUEL SITE 25 INSPECTIONS AND REGULATION OF RETAIL DEALER ADVERTISING (DALS). 26 The bill provides that when conducting an inspection of metered 27 pumps located at a retail site to determine compliance with 28 weights and measures regulations, DALS is also required to 29 determine compliance with the E-15 access standard (amended 30 Code section 214.12). A retail dealer is prohibited from 31 falsely advertising for sale gasoline or diesel fuel, including 32 by advertising a false classification (amended Code section 33 214A.3). The bill eliminates a provision requiring that a 34 decal be placed on a dispenser notifying consumers that motor 35 -50- LSB 5021XL (24) 89 da/ns 50/ 55
S.F. _____ H.F. _____ fuel being dispensed is a renewable fuel (amended Code section 1 159A.6 and repealed Code section 214A.16). The bill does not 2 affect federal labeling requirements, including by the United 3 States environmental protection agency under the Clean Air Act 4 Amendments of 1990 (42 U.S.C. §7545 and 40 C.F.R. pt. 1090) or 5 by the United States department of energy and the United States 6 federal trade commission (15 U.S.C. §2801 et seq., 42 U.S.C. 7 §17021, 16 C.F.R. pt. 306, and 40 C.F.R. §80.1501(a)). 8 BILL IN SUMMARY —— REQUIREMENTS —— RETAIL DEALER 9 DISCIPLINARY ACTION AND ENFORCEMENT (DALS). The bill provides 10 that a retail dealer who violates the E-15 access standard 11 is subject to a disciplinary action which may result in the 12 suspension or revocation of the retail dealer’s license issued 13 under weights and measures regulations (new Code section 14 214A.36). 15 BILL IN DETAIL —— REQUIREMENTS —— NEW INSTALLATION OF 16 GASOLINE AND BIODIESEL INFRASTRUCTURE AT RETAIL DEALER SITES 17 (DNR AND SFM). The bill provides that new infrastructure 18 required to be installed to store and dispense E-85 gasoline 19 or B-20 biodiesel fuel must be (1) listed with an independent 20 testing laboratory (e.g., underwriters laboratories) or 21 approved by the manufacturer and (2) approved by DNR or the 22 SFM, unless such approval is waived based on compliance with a 23 substitute requirement (new Code sections 455G.32 and 455G.33, 24 which are similar to amended Code section 455G.31 excusing the 25 storage of ethanol blended gasoline classified as higher than 26 E-9, which the bill increases to E-10). 27 BILL IN SUMMARY —— REGULATION OF MOTOR VEHICLES POWERED BY 28 QUALIFIED RENEWABLE FUELS AND PURCHASE OF QUALIFIED RENEWABLE 29 FUELS BY STATE GOVERNMENT ENTITIES. The bill provides that DAS 30 and other state entities administering the state government 31 fleet must provide that state motor vehicles operating using 32 engines powered by gasoline or diesel fuel must use the 33 highest classification of qualified renewable fuel available. 34 A qualified renewable fuel is limited to ethanol blended 35 -51- LSB 5021XL (24) 89 da/ns 51/ 55
S.F. _____ H.F. _____ gasoline or biodiesel blended fuel. Certain limitations 1 apply: (1) the qualified renewable fuel must be warranted 2 by the motor vehicle’s manufacturer, (2) that classification 3 of qualified renewable