HF 2687 (LSB 6315HV (2) 90)

HOUSE FILE 2687

BY  COMMITTEE ON APPROPRIATIONS

(SUCCESSOR TO HSB 742)

(COMPANION TO SF 2418 BY COMMITTEE ON APPROPRIATIONS)

A BILL FOR

An Act relating to renewable fuel infrastructure, including by providing for a financing program, and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 159A.14, subsection 1, paragraph a, subparagraph (1), Code 2024, is amended by striking the subparagraph and inserting in lieu thereof the following:
   (1)  (a)  Except as provided in this subparagraph, the ethanol infrastructure shall have the capacity to store and dispense E-85 gasoline.
   (b)  (i)  If the ethanol infrastructure is not used to store and dispense E-85 gasoline, it must have the capacity to store and dispense ethanol blended gasoline classified as E-15 or higher.
   (ii)  This subparagraph division is repealed January 1, 2026.
   (c)  (i)  If the ethanol infrastructure is not used to store and dispense E-85 gasoline, it must have the capacity to store and dispense ethanol blended gasoline classified as E-40 or higher.
   (ii)  This subparagraph division shall be implemented beginning January 1, 2026.
   (iii)  This subparagraph division is repealed July 1, 2030.
   (d)  The ethanol infrastructure may store, blend, and dispense ethanol or ethanol blended gasoline from a motor fuel blender pump. The ethanol infrastructure must at least include a motor fuel blender pump that dispenses different classifications of ethanol blended gasoline, if it allows E-85 gasoline to be dispensed at all times that the blender pump is operating.
    Sec. 2.  Section 455G.30, Code 2024, is amended by adding the following new subsections:
   NEW SUBSECTION.  4A.  “Dispenser breakaway” means the part of gasoline storage and dispensing infrastructure that acts to immediately stop the flow of motor fuel from its storage system to its dispenser in the event that its dispensing hose or associated hanging infrastructure becomes detached, including when a vehicle pulls away from the dispenser while its nozzle is attached to the vehicle.
   NEW SUBSECTION.  4B.  “E-85 gasoline” means the same as defined in section 214A.1.
   NEW SUBSECTION.  8.  “Shear valve” means the part of gasoline storage and dispensing infrastructure that acts to immediately stop the flow of motor fuel from its storage system to its dispenser in the event of an emergency hazard, including but not limited to a vehicle impacting the dispenser or a fire.
    Sec. 3.  Section 455G.31, subsection 2, Code 2024, is amended to read as follows:
   2.  Subject to section 455G.32, a retail dealer may use gasoline storage and dispensing infrastructure to store and dispense ethanol blended gasoline classified as E-9 or higher if the department under this subchapter, or the director of the department of inspections, appeals, and licensing under chapter 101, determines that the gasoline infrastructure is compatible with the classification of ethanol blended gasoline being used.
    Sec. 4.  Section 455G.32, Code 2024, is amended to read as follows:
   455G.32  E-85 gasoline Ethanol blended gasoline —— compatible infrastructure —— compliance requirement.
   1.  A retail dealer shall not install, replace, or convert gasoline storage and dispensing infrastructure used to store and dispense ethanol blended gasoline classified as E-15 or higher, unless the installed, replaced, or converted gasoline infrastructure, that includes all parts prior to the point where the dispenser breakaway ends, is capable of storing and dispensing ethanol blended gasoline classified as E-85 gasoline.
   2.  a.  Notwithstanding subsection 1, a retail dealer may install, replace, or convert any part of the gasoline infrastructure beginning at a point where the shear valve ends and continuing until the point where the dispenser breakaway ends that is incompatible with E-85 gasoline. However, that part of the gasoline infrastructure must be compatible with the following:
   (1)  (a)  Ethanol blended gasoline classified as E-15 or higher.
   (b)  This subparagraph is repealed January 1, 2026.
   (2)  (a)  Ethanol blended gasoline classified as E-40 or higher.
   (b)  This subparagraph shall be implemented beginning January 1, 2026.
   b.  This subsection is repealed July 1, 2030.
   2.  3.  The gasoline infrastructure must be all of the following:
   a.  Listed as compatible for use with ethanol blended gasoline classified for that part of the gasoline infrastructure as E-85 provided in subsection 1 by an independent testing laboratory or as approved by the manufacturer.
   b.  Approved by the department or state fire marshal the director of the department of inspections, appeals, and licensing subject to conditions determined necessary by the department or state fire marshal the director of the department of inspections, appeals, and licensing. The department or state fire marshal the director of the department of inspections, appeals, and licensing may waive the requirement in paragraph “a” upon satisfaction that a substitute requirement serves the same purpose.
    Sec. 5.  Section 455G.33, subsection 2, paragraph b, Code 2024, is amended to read as follows:
   b.  Approved by the department, or director of the department of inspections, appeals, and licensing under chapter 101, subject to conditions determined necessary by the department or director of the department of inspections, appeals, and licensing. The department or director of the department of inspections, appeals, and licensing may waive the requirement in paragraph “a” upon satisfaction that a substitute requirement serves the same purpose.
    Sec. 6.  APPLICATIONS FOR FINANCIAL INCENTIVES.  This Act does not require the renewable fuel infrastructure board established in section 159A.13 to reconsider or reapprove a decision made prior to the effective date of this Act for an award of financial incentives under the renewable fuel infrastructure program for retail motor fuel sites established in section 159A.14.
    Sec. 7.  EFFECTIVE DATE.  This Act, being deemed of immediate importance, takes effect upon enactment.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   BACKGROUND —— GENERAL. This bill provides for the use of infrastructure used to store and dispense ethanol blended gasoline owned by a retail dealer of motor fuel (retail dealer) who sells gasoline on a retail basis from a permanent geographic location referred to as a retail motor fuel site (retail site) (Code section 214A.1).
   BACKGROUND —— TERMINOLOGY. Ethanol blended gasoline refers to a formulation of gasoline blended with ethyl alcohol that meets fuel standards adopted by the department of agriculture and land stewardship (DALS) (Code sections 214A.1 and 214A.2) in accordance with ASTM international specifications and the federal Clean Air Act Amendments of 1990 (42 U.S.C. §7661) administered by the United States environmental protection agency (EPA). Classifications of ethanol blended gasoline are generally determined by the volume percent of ethanol and designated as E-xx where “xx” stands in for the volume percent of ethanol. There are three principal types of ethanol blended gasoline referred to commonly as E-10 formulated with 9 or 10 percent ethanol by volume, E-15 formulated with 15 percent ethanol by volume, and the highest classification E-85 formulated with between 68 to 83 percent ethanol by volume (Code section 214A.1). Generally, the use of E-15 during summer months is allowed only by waiver issued by the EPA.
   BACKGROUND —— E-15 ACCESS STANDARD. Beginning July 1, 2023, a retail dealer is required to comply with an E-15 access standard that requires a retail dealer to advertise for sale and sell E-15 from a minimum number of qualifying gasoline dispensers, commonly described as pumps, located at the retail dealer’s retail site (Code chapter 214A, subchapter III).  There are two access standards. In order to comply with the general E-15 access standard, the retail dealer must dispense E-15 from one qualifying gasoline dispenser if there is only one such dispenser located at the retail site or from at least 50 percent of all qualifying dispensers if there is more than one such dispenser located at the retail site. In order to comply with the alternative E-15 access standard, the retail dealer cannot install, replace, or convert a gasoline storage tank at the retail site on or after July 1, 2023, and the retail dealer must advertise for sale and sell E-15 from at least one qualifying dispenser on and after January 1, 2026. Once the retail dealer no longer complies with the alternative E-15 access standard (e.g., by installing a new tank), the retail dealer must comply with the general E-15 access standard. An exemption exists for small retail motor fuel sites in operation prior to January 1, 2023 (Code section 214A.36).
   BACKGROUND —— INFRASTRUCTURE PROGRAM FOR RETAIL MOTOR FUEL SITES. Under the renewable fuel infrastructure program for retail motor fuel sites (financing program), an eligible retail dealer may be awarded moneys on a cost-share basis by the renewable fuel infrastructure board (RFIB) and DALS to assist in improving the retail dealer’s retail site by installing, replacing, or converting infrastructure (new infrastructure) to be used to store, blend, or dispense ethanol blended gasoline in compliance with the general E-15 access standard (Code section 159A.14). Thus, the financing program could be used to upgrade infrastructure that had been used to store and dispense E-0 or E-10. However, the new infrastructure must have the capacity of storing and dispensing either E-85 only or a variety of classifications ranging from E-15 to E-85 as part of a blender pump system.
   BACKGROUND —— NEW INSTALLATION OF GASOLINE INFRASTRUCTURE.  Generally, the department of natural resources regulates infrastructure used to store and pump motor fuel stored in underground tanks, including ethanol blended gasoline, located at a retail site. The department of inspections, appeals, and licensing regulates infrastructure used to store motor fuel in aboveground tanks and aboveground equipment used to dispense motor fuel. A retail dealer at such a retail site who uses infrastructure compatible with E-15 must install, replace, or convert that infrastructure with new infrastructure that is compatible with E-85 (Code section 455G.32).
   BILL’S PROVISIONS —— INFRASTRUCTURE PROGRAM FOR RETAIL MOTOR FUEL SITES. The bill provides a transition period for infrastructure supported by an award of cost-share moneys under the financing program. Until January 1, 2026, the new infrastructure must be compatible with E-15; from January 1, 2026, until July 1, 2030, the new infrastructure must be compatible with ethanol blended gasoline classified as E-40; and on and after July 1, 2030, the new infrastructure must be compatible with E-85. The bill’s provisions do not affect decisions regarding financing by the RFIB made prior to the bill’s effective date.
   BILL’S PROVISIONS —— NEW INSTALLATION OF GASOLINE INFRASTRUCTURE. The bill recognizes a dispenser breakaway which is that part of the infrastructure that acts to immediately stop the flow of motor fuel from its storage system to its dispenser in the event that its dispensing hose or associated hanging infrastructure becomes detached. The bill provides that the E-85 compatibility requirement exists for all parts of the infrastructure prior to the point where the dispenser breakaway ends. Otherwise, a similar transition period exists to the other parts of the infrastructure except for that part extending from the shear valve through to the dispenser breakaway. Until January 1, 2026, those parts must be compatible with E-15; from January 1, 2026, until July 1, 2030, those parts must be compatible with E-40; and on and after July 1, 2030, those parts must be compatible with E-85.
   BILL’S PROVISIONS —— EFFECTIVE DATE. The bill takes effect upon enactment.