Senate File 2418 - Introduced SENATE FILE 2418 BY COMMITTEE ON APPROPRIATIONS (SUCCESSOR TO SSB 3187) A BILL FOR An Act relating to renewable fuel infrastructure, including by 1 providing for a financing program, and including effective 2 date provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 6315SV (3) 90 da/ns
S.F. 2418 Section 1. Section 159A.14, subsection 1, paragraph 1 a, subparagraph (1), Code 2024, is amended by striking the 2 subparagraph and inserting in lieu thereof the following: 3 (1) (a) Except as provided in this subparagraph, the 4 ethanol infrastructure shall have the capacity to store and 5 dispense E-85 gasoline. 6 (b) (i) If the ethanol infrastructure is not used to store 7 and dispense E-85 gasoline, it must have the capacity to store 8 and dispense ethanol blended gasoline classified as E-15 or 9 higher. 10 (ii) This subparagraph division is repealed January 1, 11 2026. 12 (c) (i) If the ethanol infrastructure is not used to store 13 and dispense E-85 gasoline, it must have the capacity to store 14 and dispense ethanol blended gasoline classified as E-40 or 15 higher. 16 (ii) This subparagraph division shall be implemented 17 beginning January 1, 2026. 18 (iii) This subparagraph division is repealed July 1, 2030. 19 (d) The ethanol infrastructure may store, blend, and 20 dispense ethanol or ethanol blended gasoline from a motor 21 fuel blender pump. The ethanol infrastructure must at least 22 include a motor fuel blender pump that dispenses different 23 classifications of ethanol blended gasoline, if it allows E-85 24 gasoline to be dispensed at all times that the blender pump is 25 operating. 26 Sec. 2. Section 455G.30, Code 2024, is amended by adding the 27 following new subsections: 28 NEW SUBSECTION . 4A. “Dispenser breakaway” means the part 29 of gasoline storage and dispensing infrastructure that acts to 30 immediately stop the flow of motor fuel from its storage system 31 to its dispenser in the event that its dispensing hose or 32 associated hanging infrastructure becomes detached, including 33 when a vehicle pulls away from the dispenser while its nozzle 34 is attached to the vehicle. 35 -1- LSB 6315SV (3) 90 da/ns 1/ 7
S.F. 2418 NEW SUBSECTION . 4B. “E-85 gasoline” means the same as 1 defined in section 214A.1. 2 NEW SUBSECTION . 8. “Shear valve” means the part of gasoline 3 storage and dispensing infrastructure that acts to immediately 4 stop the flow of motor fuel from its storage system to its 5 dispenser in the event of an emergency hazard, including but 6 not limited to a vehicle impacting the dispenser or a fire. 7 Sec. 3. Section 455G.31, subsection 2, Code 2024, is amended 8 to read as follows: 9 2. Subject to section 455G.32 , a retail dealer may use 10 gasoline storage and dispensing infrastructure to store and 11 dispense ethanol blended gasoline classified as E-9 or higher 12 if the department under this subchapter , or the director of the 13 department of inspections, appeals, and licensing under chapter 14 101 , determines that the gasoline infrastructure is compatible 15 with the classification of ethanol blended gasoline being used. 16 Sec. 4. Section 455G.32, Code 2024, is amended to read as 17 follows: 18 455G.32 E-85 gasoline Ethanol blended gasoline —— compatible 19 infrastructure —— compliance requirement. 20 1. A retail dealer shall not install, replace, or convert 21 gasoline storage and dispensing infrastructure used to store 22 and dispense ethanol blended gasoline classified as E-15 or 23 higher, unless the installed, replaced, or converted gasoline 24 infrastructure , that includes all parts prior to the point 25 where the dispenser breakaway ends, is capable of storing 26 and dispensing ethanol blended gasoline classified as E-85 27 gasoline . 28 2. a. Notwithstanding subsection 1, a retail dealer 29 may install, replace, or convert any part of the gasoline 30 infrastructure beginning at a point where the shear valve ends 31 and continuing until the point where the dispenser breakaway 32 ends that is incompatible with E-85 gasoline. However, that 33 part of the gasoline infrastructure must be compatible with the 34 following: 35 -2- LSB 6315SV (3) 90 da/ns 2/ 7
S.F. 2418 (1) (a) Ethanol blended gasoline classified as E-15 or 1 higher. 2 (b) This subparagraph is repealed January 1, 2026. 3 (2) (a) Ethanol blended gasoline classified as E-40 or 4 higher. 5 (b) This subparagraph shall be implemented beginning 6 January 1, 2026. 7 b. This subsection is repealed July 1, 2030. 8 2. 3. The gasoline infrastructure must be all of the 9 following: 10 a. Listed as compatible for use with ethanol blended 11 gasoline classified for that part of the gasoline 12 infrastructure as E-85 provided in subsection 1 by an 13 independent testing laboratory or as approved by the 14 manufacturer. 15 b. Approved by the department or state fire marshal the 16 director of the department of inspections, appeals, and 17 licensing subject to conditions determined necessary by the 18 department or state fire marshal the director of the department 19 of inspections, appeals, and licensing . The department 20 or state fire marshal the director of the department of 21 inspections, appeals, and licensing may waive the requirement 22 in paragraph “a” upon satisfaction that a substitute 23 requirement serves the same purpose. 24 Sec. 5. Section 455G.33, subsection 2, paragraph b, Code 25 2024, is amended to read as follows: 26 b. Approved by the department , or director of the department 27 of inspections, appeals, and licensing under chapter 101, 28 subject to conditions determined necessary by the department 29 or director of the department of inspections, appeals, and 30 licensing. The department or director of the department of 31 inspections, appeals, and licensing may waive the requirement 32 in paragraph “a” upon satisfaction that a substitute 33 requirement serves the same purpose. 34 Sec. 6. APPLICATIONS FOR FINANCIAL INCENTIVES. This 35 -3- LSB 6315SV (3) 90 da/ns 3/ 7
S.F. 2418 Act does not require the renewable fuel infrastructure board 1 established in section 159A.13 to reconsider or reapprove a 2 decision made prior to the effective date of this Act for 3 an award of financial incentives under the renewable fuel 4 infrastructure program for retail motor fuel sites established 5 in section 159A.14. 6 Sec. 7. EFFECTIVE DATE. This Act, being deemed of immediate 7 importance, takes effect upon enactment. 8 EXPLANATION 9 The inclusion of this explanation does not constitute agreement with 10 the explanation’s substance by the members of the general assembly. 11 BACKGROUND —— GENERAL. This bill provides for the use 12 of infrastructure used to store and dispense ethanol blended 13 gasoline owned by a retail dealer of motor fuel (retail 14 dealer) who sells gasoline on a retail basis from a permanent 15 geographic location referred to as a retail motor fuel site 16 (retail site) (Code section 214A.1). 17 BACKGROUND —— TERMINOLOGY. Ethanol blended gasoline refers 18 to a formulation of gasoline blended with ethyl alcohol that 19 meets fuel standards adopted by the department of agriculture 20 and land stewardship (DALS) (Code sections 214A.1 and 214A.2) 21 in accordance with ASTM international specifications and the 22 federal Clean Air Act Amendments of 1990 (42 U.S.C. §7661) 23 administered by the United States environmental protection 24 agency (EPA). Classifications of ethanol blended gasoline 25 are generally determined by the volume percent of ethanol 26 and designated as E-xx where “xx” stands in for the volume 27 percent of ethanol. There are three principal types of ethanol 28 blended gasoline referred to commonly as E-10 formulated with 29 9 or 10 percent ethanol by volume, E-15 formulated with 15 30 percent ethanol by volume, and the highest classification E-85 31 formulated with between 68 to 83 percent ethanol by volume 32 (Code section 214A.1). Generally, the use of E-15 during 33 summer months is allowed only by waiver issued by the EPA. 34 BACKGROUND —— E-15 ACCESS STANDARD. Beginning July 1, 2023, 35 -4- LSB 6315SV (3) 90 da/ns 4/ 7
S.F. 2418 a retail dealer is required to comply with an E-15 access 1 standard that requires a retail dealer to advertise for sale 2 and sell E-15 from a minimum number of qualifying gasoline 3 dispensers, commonly described as pumps, located at the retail 4 dealer’s retail site (Code chapter 214A, subchapter III). 5 There are two access standards. In order to comply with the 6 general E-15 access standard, the retail dealer must dispense 7 E-15 from one qualifying gasoline dispenser if there is only 8 one such dispenser located at the retail site or from at least 9 50 percent of all qualifying dispensers if there is more than 10 one such dispenser located at the retail site. In order to 11 comply with the alternative E-15 access standard, the retail 12 dealer cannot install, replace, or convert a gasoline storage 13 tank at the retail site on or after July 1, 2023, and the retail 14 dealer must advertise for sale and sell E-15 from at least one 15 qualifying dispenser on and after January 1, 2026. Once the 16 retail dealer no longer complies with the alternative E-15 17 access standard (e.g., by installing a new tank), the retail 18 dealer must comply with the general E-15 access standard. An 19 exemption exists for small retail motor fuel sites in operation 20 prior to January 1, 2023 (Code section 214A.36). 21 BACKGROUND —— INFRASTRUCTURE PROGRAM FOR RETAIL MOTOR FUEL 22 SITES. Under the renewable fuel infrastructure program for 23 retail motor fuel sites (financing program), an eligible retail 24 dealer may be awarded moneys on a cost-share basis by the 25 renewable fuel infrastructure board (RFIB) and DALS to assist 26 in improving the retail dealer’s retail site by installing, 27 replacing, or converting infrastructure (new infrastructure) to 28 be used to store, blend, or dispense ethanol blended gasoline 29 in compliance with the general E-15 access standard (Code 30 section 159A.14). Thus, the financing program could be used 31 to upgrade infrastructure that had been used to store and 32 dispense E-0 or E-10. However, the new infrastructure must 33 have the capacity of storing and dispensing either E-85 only or 34 a variety of classifications ranging from E-15 to E-85 as part 35 -5- LSB 6315SV (3) 90 da/ns 5/ 7
S.F. 2418 of a blender pump system. 1 BACKGROUND —— NEW INSTALLATION OF GASOLINE INFRASTRUCTURE. 2 Generally, the department of natural resources regulates 3 infrastructure used to store and pump motor fuel stored in 4 underground tanks, including ethanol blended gasoline, located 5 at a retail site. The department of inspections, appeals, and 6 licensing regulates infrastructure used to store motor fuel in 7 aboveground tanks and aboveground equipment used to dispense 8 motor fuel. A retail dealer at such a retail site who uses 9 infrastructure compatible with E-15 must install, replace, or 10 convert that infrastructure with new infrastructure that is 11 compatible with E-85 (Code section 455G.32). 12 BILL’S PROVISIONS —— INFRASTRUCTURE PROGRAM FOR RETAIL 13 MOTOR FUEL SITES. The bill provides a transition period for 14 infrastructure supported by an award of cost-share moneys 15 under the financing program. Until January 1, 2026, the new 16 infrastructure must be compatible with E-15; from January 17 1, 2026, until July 1, 2030, the new infrastructure must be 18 compatible with ethanol blended gasoline classified as E-40; 19 and on and after July 1, 2030, the new infrastructure must be 20 compatible with E-85. The bill’s provisions do not affect 21 decisions regarding financing by the RFIB made prior to the 22 bill’s effective date. 23 BILL’S PROVISIONS —— NEW INSTALLATION OF GASOLINE 24 INFRASTRUCTURE. The bill recognizes a dispenser breakaway 25 which is that part of the infrastructure that acts to 26 immediately stop the flow of motor fuel from its storage system 27 to its dispenser in the event that its dispensing hose or 28 associated hanging infrastructure becomes detached. The bill 29 provides that the E-85 compatibility requirement exists for 30 all parts of the infrastructure prior to the point where the 31 dispenser breakaway ends. Otherwise, a similar transition 32 period exists to the other parts of the infrastructure except 33 for that part extending from the shear valve through to the 34 dispenser breakaway. Until January 1, 2026, those parts must 35 -6- LSB 6315SV (3) 90 da/ns 6/ 7
S.F. 2418 be compatible with E-15; from January 1, 2026, until July 1, 1 2030, those parts must be compatible with E-40; and on and 2 after July 1, 2030, those parts must be compatible with E-85. 3 BILL’S PROVISIONS —— EFFECTIVE DATE. The bill takes effect 4 upon enactment. 5 -7- LSB 6315SV (3) 90 da/ns 7/ 7