Senate File 464 - Reprinted
SENATE FILE
BY COMMITTEE ON WAYS AND MEANS
(SUCCESSOR TO SSB 1313)
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to motor fuel, by providing for a biodiesel
2 quality standard for energy security and sustainability,
3 ethanol blended gasoline and biodiesel blended fuel
4 designations and tax credits, penalties, and effective dates.
5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
6 SF 464
7 da/rj/jh/26
PAG LIN
1 1 DIVISION I
1 2 BIODIESEL FUEL STANDARD
1 3 Section 1. FINDINGS AND PURPOSE OF THE ACT == SUSTAINABLE
1 4 BIODIESEL INITIATIVE.
1 5 1. The general assembly finds and declares that access to
1 6 affordable energy has become essential to the functioning of
1 7 modern economies. However, the uneven distribution of energy
1 8 supplies among countries and the critical need for energy has
1 9 created significant vulnerabilities to this nation. Threats
1 10 to national energy security include the political instability
1 11 of several energy producing countries, the manipulation of
1 12 energy supplies, the competition over energy sources, and
1 13 attacks upon energy supply infrastructure.
1 14 2. The purpose of this Act is to accomplish the vital
1 15 goals of promoting sustainable biodiesel that will demonstrate
1 16 environmental stewardship across its life cycle by maximizing
1 17 a net energy balance, minimizing negative impacts on natural
1 18 ecosystems, both globally and locally, and adding value to
1 19 Iowa commodities; creating wealth; and enhancing the entire
1 20 community of energy stakeholders.
1 21 Sec. 2. Section 15G.201A, Code 2009, is amended to read as
1 22 follows:
1 23 15G.201A CLASSIFICATION DESIGNATION OF RENEWABLE FUEL.
1 24 For purposes of this division subchapter, ethanol blended
1 25 fuel and biodiesel fuel shall be classified designated in the
1 26 same manner as provided in section 214A.2.
1 27 Sec. 3. Section 15G.202, subsection 2, unnumbered
1 28 paragraph 1, Code 2009, is amended to read as follows:
1 29 The infrastructure board shall be composed of eleven
1 30 members who shall be appointed by the governor as follows:
1 31 Sec. 4. Section 15G.202, subsection 2, paragraph c,
1 32 unnumbered paragraph 1, Code 2009, is amended to read as
1 33 follows:
1 34 Nine Multiple persons based on nominations made by the
1 35 titular heads of all of the following:
2 1 Sec. 5. Section 15G.202, subsection 2, paragraph c,
2 2 subparagraph (4), Code 2009, is amended by striking the
2 3 subparagraph.
2 4 Sec. 6. Section 15G.202, subsection 8, Code 2009, is
2 5 amended to read as follows:
2 6 8. Six A majority of members of the infrastructure board
2 7 constitute a quorum and the affirmative vote of a majority of
2 8 the members present is necessary for any substantive action to
2 9 be taken by the infrastructure board. The majority shall not
2 10 include any member who has a conflict of interest and a
2 11 statement by a member that the member has a conflict of
2 12 interest is conclusive for this purpose. A vacancy in the
2 13 membership does not impair the duties of the infrastructure
2 14 board.
2 15 Sec. 7. Section 15G.203, subsection 1, paragraph a,
2 16 subparagraph (1), subparagraph division (b), Code 2009, is
2 17 amended to read as follows:
2 18 (b) Store, blend, Blend and dispense motor fuel from a
2 19 motor fuel blender pump, as required in this subparagraph
2 20 subdivision division. The ethanol infrastructure must provide
2 21 for the storage of ethanol or ethanol blended gasoline, or for
2 22 blending ethanol with gasoline. The ethanol infrastructure
2 23 must at least include a motor fuel blender pump which
2 24 dispenses different classifications designations of ethanol
2 25 blended gasoline and allows E=85 gasoline to be dispensed at
2 26 all times that the blender pump is operating.
2 27 Sec. 8. Section 15G.203, subsection 1, paragraph a,
2 28 subparagraph (2), Code 2009, is amended to read as follows:
2 29 (2) Biodiesel infrastructure shall be designed and used
2 30 exclusively to do any of the following:
2 31 (a) Store and dispense biodiesel or biodiesel blended fuel
2 32 designated as B=6 or higher.
2 33 (b) Blend or dispense biodiesel fuel from a motor fuel
2 34 blender pump which dispenses different designations of
2 35 biodiesel fuel and allows biodiesel fuel designated B=6 or
3 1 higher to be dispensed at all times that the blender pump is
3 2 operating.
3 3 Sec. 9. Section 15G.204, subsection 3, paragraph a,
3 4 subparagraph (1), Code 2009, is amended to read as follows:
3 5 (1) For improvements to store, blend, or dispense
3 6 biodiesel fuel from B=2 B=5 or higher but not as high as B=99,
3 7 fifty percent of the actual cost of making the improvements or
3 8 fifty thousand dollars, whichever is less.
3 9 Sec. 10. Section 214A.2, subsection 4, paragraph b,
3 10 subparagraph (2), Code 2009, is amended by striking the
3 11 subparagraph.
3 12 Sec. 11. NEW SECTION. 214A.2C STANDARD FOR DIESEL FUEL
3 13 == BIODIESEL REQUIRED.
3 14 1. A retail dealer shall not advertise for sale or sell
3 15 diesel fuel in this state, unless it is biodiesel fuel
3 16 designated as B=5 or higher as specified in section 214A.2.
3 17 2. Subsection 1 does not apply to diesel fuel used to
3 18 power any of the following:
3 19 a. (1) A motor located at an electric generating plant
3 20 regulated by the United States nuclear regulatory commission.
3 21 (2) This paragraph "a" is repealed thirty days after the
3 22 United States nuclear regulatory commission approves the use
3 23 of biodiesel fuel designated as B=5 or higher in motors
3 24 located at electric generating plants that it regulates.
3 25 b. A railroad locomotive.
3 26 c. A vehicle used primarily on the grounds of a public
3 27 airport.
3 28 d. A motor used to temporarily generate power due to peak
3 29 demand for electricity or a disruption in the delivery of
3 30 electricity or natural gas until the delivery of the
3 31 electricity or natural gas may be resumed.
3 32 3. Subsection 1 does not apply during a period that the
3 33 governor issues a biodiesel suspension order.
3 34 a. The biodiesel suspension order must include a
3 35 determination by the governor that any of the following
4 1 exists:
4 2 (1) A lack of infrastructure in this state necessary to
4 3 support the retail sale of biodiesel fuel designated as B=5.
4 4 (2) A significant shortage of biodiesel fuel designated as
4 5 B=5 in this state available for retail sale in this state.
4 6 (3) A systemic market change in the supplies or prices of
4 7 biodiesel fuel designated B=5 will cause a material economic
4 8 hardship to the state.
4 9 b. The biodiesel suspension order may reduce the biodiesel
4 10 fuel designation provided in subsection 1 during the period of
4 11 the suspension. The biodiesel suspension order may apply to
4 12 the entire state or to specific counties named in the
4 13 biodiesel suspension order.
4 14 c. The biodiesel suspension order shall take effect when
4 15 published in the Iowa administrative bulletin unless the
4 16 biodiesel suspension order specifies a later date. The
4 17 biodiesel suspension order shall terminate on a date certain
4 18 as specified in the biodiesel suspension order.
4 19 Sec. 12. EXISTING INVENTORIES OF DIESEL FUEL.
4 20 1. a. Notwithstanding section 214A.2C, diesel fuel
4 21 inventories, stored at a retail motor fuel site as defined in
4 22 section 214A.1, existing on the effective date of this
4 23 division of this Act, may continue to be sold and dispensed.
4 24 b. Paragraph "a" shall not apply once all diesel fuel
4 25 inventories existing at a retail motor fuel site as defined in
4 26 section 214A.1, on the effective date of this division of this
4 27 Act, have been sold or dispensed.
4 28 2. Nothing in this section authorizes a retail dealer to
4 29 acquire diesel fuel other than biodiesel fuel designated B=5
4 30 or higher as provided in section 214A.2 on or after the
4 31 effective date of this division of this Act.
4 32 Sec. 13. EMERGENCY RULES. The department of agriculture
4 33 and land stewardship shall adopt emergency rules under section
4 34 17A.4, subsection 3, and section 17A.5, subsection 2,
4 35 paragraph "b", to implement the provisions of section 214A.2C,
5 1 as enacted in this Act, and the rules shall be effective
5 2 September 1, 2009. Any rules adopted in accordance with this
5 3 section shall also be published as a notice of intended action
5 4 as provided in section 17A.4.
5 5 Sec. 14. EFFECTIVE DATE. This division of this Act takes
5 6 effect on September 1, 2009, except for the provisions
5 7 authorizing the department of agriculture and land stewardship
5 8 to adopt emergency rules and to publish a notice of intended
5 9 action to implement the provisions of section 214A.2C, as
5 10 enacted in this Act, which, being deemed of immediate
5 11 importance, take effect upon enactment.
5 12 DIVISION II
5 13 BIOFUEL DESIGNATIONS AND LABELING == PENALTY
5 14 Sec. 15. Section 214A.2, subsection 5, Code 2009, is
5 15 amended to read as follows:
5 16 5. Ethanol blended gasoline shall be designated E=xx where
5 17 "xx" is the volume percent of ethanol in the ethanol blended
5 18 gasoline and biodiesel fuel shall be designated B=xx where
5 19 "xx" is the volume percent of biodiesel.
5 20 Sec. 16. Section 214A.3, subsection 2, paragraph b,
5 21 subparagraph (2), Code 2009, is amended to read as follows:
5 22 (2) Biodiesel fuel shall be designated according to its
5 23 classification as provided in section 214A.2. A person shall
5 24 not knowingly falsely advertise biodiesel blended fuel by
5 25 using an inaccurate designation in violation of this
5 26 subparagraph as provided in section 214A.2.
5 27 Sec. 17. Section 214A.5, Code 2009, is amended to read as
5 28 follows:
5 29 214A.5 SALES SLIP ON DEMAND DOCUMENTATION.
5 30 1. A wholesale dealer or retail dealer shall, when making
5 31 a sale of motor fuel, give to a purchaser upon demand a sales
5 32 slip.
5 33 2. A wholesale dealer selling ethanol blended gasoline or
5 34 biodiesel blended fuel to a purchaser shall provide the
5 35 purchaser with a statement indicating its designation as
6 1 provided in section 214A.2. The statement may be on the sales
6 2 slip provided in this section or a similar document, including
6 3 but not limited to a bill of lading or invoice.
6 4 Sec. 18. Section 214A.11, subsection 1, Code 2009, is
6 5 amended to read as follows:
6 6 1. Except as provided in subsection 2, a person who
6 7 violates a provision of this chapter is guilty of a serious
6 8 simple misdemeanor. Each day that a continuing violation
6 9 occurs shall be considered a separate offense.
6 10 Sec. 19. Section 214A.16, subsection 1, Code 2009, is
6 11 amended to read as follows:
6 12 1. a. If motor fuel containing a renewable fuel ethanol
6 13 blended gasoline is sold from a motor fuel pump, the motor
6 14 fuel pump shall have affixed a decal identifying the name of
6 15 the renewable fuel ethanol blended gasoline. The decal shall
6 16 be different based on the type of renewable fuel dispensed.
6 17 If the motor fuel pump dispenses ethanol blended gasoline
6 18 classified as higher than standard ethanol blended gasoline
6 19 pursuant to section 214A.2, the decal shall contain the
6 20 following notice: "FOR FLEXIBLE FUEL VEHICLES ONLY".
6 21 b. If biodiesel fuel is sold from a motor fuel pump, the
6 22 motor fuel pump shall have affixed a decal identifying the
6 23 biodiesel fuel as provided in 16 C.F.R. pt. 306.
6 24 Sec. 20. Section 452A.12, subsection 2, Code 2009, is
6 25 amended to read as follows:
6 26 2. A person while transporting motor fuel or undyed
6 27 special fuel from a refinery or marine or pipeline terminal in
6 28 this state or from a point outside this state over the
6 29 highways of this state in service other than that under
6 30 subsection 1 shall carry in the vehicle a loading invoice
6 31 showing the name and address of the seller or consignor, the
6 32 date and place of loading, and the kind and quantity of motor
6 33 fuel or special fuel loaded, together with invoices showing
6 34 the kind and quantity of each delivery and the name and
6 35 address of each purchaser or consignee. An invoice carried
7 1 pursuant to this subsection for ethanol blended gasoline or
7 2 biodiesel blended fuel shall state its designation as provided
7 3 in section 214A.2.
7 4 DIVISION III
7 5 BIOFUEL TAX CREDITS == REPORTING
7 6 Sec. 21. Section 422.11N, subsection 4, paragraph a, Code
7 7 2009, is amended to read as follows:
7 8 a. The retail dealer's adjusted biofuel distribution
7 9 percentage which is the sum of the retail dealer's total
7 10 ethanol gallonage plus the retail dealer's total biodiesel
7 11 gallonage expressed as a percentage of the retail dealer's
7 12 total gasoline gallonage, calculated pursuant to section
7 13 452A.31, subsection 3A, in the retail dealer's applicable
7 14 determination period.
7 15 Sec. 22. Section 422.11N, subsection 4, paragraph c, Code
7 16 2009, is amended to read as follows:
7 17 c. The retail dealer's biofuel threshold percentage
7 18 disparity which is a positive percentage difference obtained
7 19 by taking the minuend which is the retail dealer's biofuel
7 20 threshold percentage and subtracting from it the subtrahend
7 21 which is the retail dealer's adjusted biofuel distribution
7 22 percentage, in the retail dealer's applicable determination
7 23 period.
7 24 Sec. 23. Section 422.11P, subsections 1 through 3, Code
7 25 2009, are amended to read as follows:
7 26 1. As used in this section, unless the context otherwise
7 27 requires:
7 28 a. "Biodiesel blended fuel", "diesel fuel", and "retail
7 29 dealer" mean the same as defined in section 214A.1.
7 30 b. "Motor fuel pump" means the same as defined in section
7 31 214.1.
7 32 c. "Sell" means to sell on a retail basis.
7 33 d. "Tax credit" means a biodiesel blended fuel promotion
7 34 tax credit as provided in this section.
7 35 2. The taxes imposed under this division, less the credits
8 1 allowed under section 422.12, shall be reduced by the amount
8 2 of the biodiesel blended fuel promotion tax credit for each
8 3 tax year that the taxpayer is eligible to claim a tax credit
8 4 under this subsection.
8 5 a. In order to be eligible, all of the following must
8 6 apply:
8 7 (1) The taxpayer is a retail dealer who sells and
8 8 dispenses biodiesel blended fuel through a motor fuel pump
8 9 located at a motor fuel site operated by the retail dealer in
8 10 this state in the tax year in which the tax credit is claimed.
8 11 (2) Of the total gallons of diesel fuel that the retail
8 12 dealer sells and dispenses through all motor fuel pumps
8 13 located at a motor fuel site operated by the retail dealer
8 14 during the retail dealer's tax year, fifty percent or more is
8 15 biodiesel blended fuel which meets the requirements of this
8 16 section.
8 17 (3) The retail dealer complies with requirements of the
8 18 department established to administer this section.
8 19 b. The tax credit shall apply to biodiesel blended fuel
8 20 formulated with a minimum percentage of two percent by volume
8 21 of biodiesel, if the formulation meets the standards provided
8 22 in section 214A.2 must meet the standards for biodiesel fuel
8 23 provided in section 214A.2.
8 24 3. a. The tax credit shall be calculated separately for
8 25 each retail motor fuel site operated by the retail dealer.
8 26 b. The amount of the tax credit is three cents multiplied
8 27 by the total number of gallons of biodiesel blended fuel
8 28 designated as B=10 or higher as provided in section 214A.2
8 29 sold and dispensed by the retail dealer through all motor fuel
8 30 pumps located at a retail motor fuel site operated by the
8 31 retail dealer in this state during the retail dealer's tax
8 32 year.
8 33 Sec. 24. Section 422.33, subsection 11C, Code 2009, is
8 34 amended to read as follows:
8 35 11C. The taxes imposed under this division shall be
9 1 reduced by a biodiesel blended fuel promotion tax credit for
9 2 each tax year that the taxpayer is eligible to claim the tax
9 3 credit under this subsection.
9 4 a. The taxpayer may claim the biodiesel blended fuel
9 5 promotion tax credit according to the same requirements, for
9 6 the same amount, and calculated in the same manner, as
9 7 provided for the biodiesel blended fuel promotion tax credit
9 8 pursuant to section 422.11P.
9 9 b. Any biodiesel blended fuel promotion tax credit which
9 10 is in excess of the taxpayer's tax liability shall be refunded
9 11 or may be shown on the taxpayer's final, completed return
9 12 credited to the tax liability for the following tax year in
9 13 the same manner as provided in section 422.11P.
9 14 c. The tax credit shall be calculated separately for each
9 15 retail motor fuel site operated by the taxpayer in the same
9 16 manner as provided in section 422.11P.
9 17 d. This subsection is repealed on January 1, 2012.
9 18 Sec. 25. Section 452A.31, subsection 3, paragraph b, Code
9 19 2009, is amended to read as follows:
9 20 b. A retail dealer's total biodiesel gallonage is the
9 21 total number of gallons of biodiesel which may or may not be a
9 22 component of biodiesel blended fuel, and which the retail
9 23 dealer sells and dispenses from motor fuel pumps as provided
9 24 in paragraph "a" during a twelve=month period beginning
9 25 January 1 and ending December 31. The retail dealer's total
9 26 biodiesel gallonage is divided into the following
9 27 classifications:
9 28 (1) The total standard biodiesel gallonage which is the
9 29 total biodiesel gallonage that is a component of biodiesel
9 30 blended fuel designated B=5 or less.
9 31 (2) The total above standard biodiesel gallonage which is
9 32 the total biodiesel gallonage that is any of the following:
9 33 (a) A component of biodiesel blended fuel designated B=6
9 34 or higher.
9 35 (b) B=100.
10 1 Sec. 26. Section 452A.31, Code 2009, is amended by adding
10 2 the following new subsection:
10 3 NEW SUBSECTION. 3A. a. The retail dealer's biofuel
10 4 distribution percentage which is the sum of the retail
10 5 dealer's total ethanol gallonage plus the retail dealer's
10 6 total biodiesel gallonage expressed as a percentage of the
10 7 retail dealer's total gasoline gallonage during a twelve=month
10 8 period beginning January 1 and ending December 31.
10 9 b. The retail dealer's adjusted biofuel distribution
10 10 percentage which is the sum of the retail dealer's total
10 11 ethanol gallonage plus the retail dealer's total above
10 12 standard biodiesel gallonage expressed as a percentage of the
10 13 retail dealer's total gasoline gallonage during a twelve=month
10 14 period beginning January 1 and ending December 31.
10 15 Sec. 27. TAX CREDIT APPLICABILITY.
10 16 1. A taxpayer who is a retail dealer selling or dispensing
10 17 ethanol blended gasoline prior to the effective date of this
10 18 division of this Act may claim the ethanol promotion tax
10 19 credit on ethanol blended gasoline by calculating the retail
10 20 dealer's biofuel distribution percentage pursuant to section
10 21 422.11N and section 422.33, subsection 11A, Code 2009. The
10 22 taxpayer selling or dispensing ethanol blended gasoline on or
10 23 after the effective date of this division of this Act shall
10 24 only claim the tax credit by calculating the retail dealer's
10 25 adjusted biofuel distribution percentage pursuant to section
10 26 422.11N and section 422.33, subsection 11A, as provided in
10 27 this division of this Act.
10 28 2. A taxpayer who is a retail dealer selling or dispensing
10 29 biodiesel blended fuel prior to the effective date of this
10 30 division of this Act may claim the biodiesel blended fuel tax
10 31 credit on biodiesel blended fuel formulated with a minimum
10 32 percentage of two percent by volume of biodiesel pursuant to
10 33 section 422.11P and section 422.33, subsection 11C, Code 2009.
10 34 The taxpayer selling or dispensing biodiesel blended fuel on
10 35 or after the effective date of this division of this Act shall
11 1 only claim the tax credit as a biodiesel fuel promotion tax
11 2 credit pursuant to section 422.11P and section 422.33,
11 3 subsection 11C, as provided in this division of this Act.
11 4 Sec. 28. 2006 Iowa Acts, chapter 1142, section 49,
11 5 subsection 5, is amended to read as follows:
11 6 5. For a retail dealer who may claim a biodiesel blended
11 7 fuel promotion tax credit under section 422.11P or 422.33,
11 8 subsection 11C, as enacted in this Act 2006 Iowa Acts, chapter
11 9 1142, sections 41 and 47, and amended in this 2009 Iowa Act,
11 10 in calendar year 2011 and whose tax year ends prior to
11 11 December 31, 2011, the retail dealer may continue to claim the
11 12 tax credit in the retail dealer's following tax year. In that
11 13 case, the tax credit shall be calculated in the same manner as
11 14 provided in section 422.11P or 422.33, subsection 11C, as
11 15 enacted in this Act 2006 Iowa Acts, chapter 1142, sections 41
11 16 and 47, and amended in this 2009 Iowa Act, for the remaining
11 17 period beginning on the first day of the retail dealer's new
11 18 tax year until December 31, 2011. For that remaining period,
11 19 the tax credit shall be calculated in the same manner as a
11 20 retail dealer whose tax year began on the previous January 1
11 21 and who is calculating the tax credit on December 31, 2011.
11 22 Sec. 29. EFFECTIVE DATE. This division of this Act takes
11 23 effect September 1, 2009.
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