House File 859 - IntroducedA Bill ForAn Act 1relating to renewable fuel used to power motor vehicles,
2including by providing for standards and restrictions,
3infrastructure, tax credits, and requirements for state
4agencies operating motor vehicles powered by renewable
5fuel, providing penalties, making penalties applicable, and
6including effective date provisions.
7BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2motor fuel
3part a
4standards AND CLASSIFICATIONS
5   Section 1.  Section 214A.1, Code 2021, is amended by adding
6the following new subsections:
7   NEW SUBSECTION.  8A.  “Clear diesel fuel” means diesel fuel
8that is not dyed under section 452A.3, subsection 3, paragraph
9“b”, and that is regularly sold to members of the general
10public by retail dealers to power motor vehicles subject
11to registration under chapter 321 to operate on the public
12highways.
13   NEW SUBSECTION.  11A.  “Dispensing unit” means equipment that
14is part of motor fuel storage and dispensing infrastructure, if
15the equipment includes a nozzle to control the flow of motor
16fuel discharged from the motor fuel storage tank to an end
17point including the fuel supply tank of a motor vehicle.
18   NEW SUBSECTION.  19A.  “Motor fuel storage and dispensing
19infrastructure”
or “infrastructure” means a motor fuel storage
20tank, motor fuel pump, and a dispensing unit necessary to store
21and dispense, or store, blend, and dispense, motor fuel at
22a retail motor fuel site, including but not limited to all
23associated equipment, dispensing units, dispensers, pumps,
24pipes, hoses, tubes, lines, fittings, valves, filters, seals,
25and covers.
26   NEW SUBSECTION.  29A.  “Small retail dealer” means a retail
27dealer engaged in the business of storing and dispensing motor
28fuel from a motor fuel pump for sale on a retail basis at fewer
29than ten permanent retail motor fuel sites.
30   NEW SUBSECTION.  29B.  “Special use diesel fuel” means clear
31diesel fuel subject to restrictions based on a designated
32classification as provided in section 214A.34.
33   NEW SUBSECTION.  29C.  a.  “Special use gasoline” means
34unleaded gasoline that is subject to restrictions based on a
35designated classification as provided in sections 214A.31 and
-1-1214A.32.
   2b.  “Special use gasoline” does not include aviation gasoline
3or racing fuel as those terms are defined in section 452A.2.
4   NEW SUBSECTION.  30A.  “Standard use diesel fuel” means clear
5diesel fuel that includes a required blend of biodiesel based
6on a designated classification as provided in section 214A.34.
7   NEW SUBSECTION.  30B.  a.  “Standard use gasoline” means
8unleaded gasoline that includes a required blend of ethanol
9based on a designated classification as provided in sections
10214A.31 and 214A.32.
   11b.  “Standard use gasoline” does not include aviation
12gasoline or racing fuel as those terms are defined in section
13452A.2.
14   Sec. 2.  Section 214A.1, subsections 11 and 16, Code 2021,
15are amended to read as follows:
   1611.  a.  “Diesel fuel” means any liquid, other than gasoline,
17which is suitable for use as a type of motor fuel for use in
18a diesel fuel powered engine, including but not limited to a
19motor vehicle, equipment as defined in section 322F.1, or a
20train railroad locomotive, and which meets the standards and
21classifications provided in section 214A.2
.
   22b.  Diesel fuel “Diesel fuel” includes a liquid product
23prepared, advertised, offered for sale, or sold for use as,
24or commonly and commercially used as, motor fuel for use in
25an internal combustion engine and ignited by pressure without
26the presence of an electric spark. Diesel fuel must meet the
27standards provided in section 214A.2.

   2816.  “Gasoline” means any liquid product prepared,
29advertised, offered for sale, or sold for use as, or commonly
30and commercially used as, a type of motor fuel for use in a
31spark-ignition, internal combustion engine, and which meets
32the specifications standards and classifications provided in
33section 214A.2.
34   Sec. 3.  Section 214A.1, subsection 30, Code 2021, is amended
35by striking the subsection.
-2-
1   Sec. 4.  NEW SECTION.  214A.1A  Rules.
   2The department shall adopt rules necessary or desirable to
3administer and enforce this chapter in conjunction with chapter
4214.
5   Sec. 5.  Section 214A.2, subsections 1 and 2, Code 2021, are
6amended to read as follows:
   71.  The department shall adopt rules pursuant to chapter
817A for carrying out this chapter. The rules may include but
9are not limited to specifications
 section 214A.1A relating
10to standards and classifications for types of motor fuel,
11including but not limited to gasoline and diesel fuel.
12The rules shall provide standards and classifications for

13 renewable fuel such as ethanol blended gasoline, biobutanol
14blended gasoline, biodiesel, biodiesel blended fuel, and
15motor fuel components such as a biofuel or an oxygenate. In
16the interest of uniformity, the department shall adopt by
17reference other specifications standards relating to tests and
18standards specifications for types of motor fuel, including
19renewable fuel and motor fuel components, established by the
20United States environmental protection agency and A.S.T.M.
21international.
   222.  Octane number An octane rating assigned to gasoline
23 shall conform to the average of values obtained from the
24A.S.T.M. international D2699 research method and the A.S.T.M.
25international D2700 motor method.
   26a.  Octane number for For regular grade unleaded gasoline
27shall follow the specifications of A.S.T.M. international but,
28the octane rating
shall be not be less than eighty-seven and
29not more than ninety
.
   30b.  Octane number for For premium grade unleaded gasoline
31shall follow the specifications of A.S.T.M. international but,
32the octane rating
shall not be not less than ninety ninety-one.
33   Sec. 6.  Section 214A.2, subsection 3, paragraph b, Code
342021, is amended by striking the paragraph and inserting in
35lieu thereof the following:
-3-   1b.  If the motor fuel is advertised for sale or sold as
2ethanol or ethanol blended gasoline, the motor fuel must meet
3departmental standards and classifications based on all of the
4following requirements:
   5(1)  (a)  Ethanol must be a fuel grade agriculturally
6derived ethyl alcohol and must meet the requirements of
727 C.F.R.pts.19 through 21 and A.S.T.M. international
8specification D4806 for blending with gasoline for use as
9automotive spark-ignition engine fuel, or a successor A.S.T.M.
10international specification, as established by rules adopted
11by the department.
   12(b)  Ethanol shall be classified as E-100.
   13(c)  Gasoline containing no ethanol or trace amounts of
14ethanol shall be classified as E-0.
   15(2)  Gasoline blended with ethanol must meet requirements
16based in part or in whole on A.S.T.M. international
17specification D4814, or a successor A.S.T.M. international
18specification, as established by rules adopted by the
19department.
   20(3)  For any classification of ethanol blended gasoline, at
21least nine percent by volume must be ethanol.
   22(4)  For ethanol blended gasoline classified as E-10 or
23higher, the state grants a waiver of one pound per square inch
24from the A.S.T.M. international specification D4814 Reid vapor
25pressure requirement.
   26(5)  Except as otherwise provided in this subparagraph,
27ethanol blended gasoline shall be classified as E-xx where
28“xx” is the volume percent of ethanol in the ethanol blended
29gasoline. However, all of the following shall apply:
   30(a)  Ethanol blended gasoline with a percentage of at least
31nine but not more than ten percent by volume of ethanol shall
32be classified as E-10.
   33(b)  Ethanol blended gasoline with a percentage of fifteen
34percent by volume of ethanol shall be classified as E-15.
   35(c)  Ethanol blended gasoline with a percentage of at least
-4-1seventy but not more than eighty-five percent by volume of
2ethanol shall be classified as E-85. E-85 gasoline must meet
3A.S.T.M. international specification D5798, or a successor
4A.S.T.M. international specification, as established by rules
5adopted by the department.
   6(6)  Ethanol blended gasoline classified as higher than
7E-15, other than E-85, must conform to standards adopted by the
8department.
   9(7)  In ensuring that ethanol blended gasoline meets the
10classification requirements of this section, the department
11shall take into account up to a two percent variation in the
12volume percent of ethanol in ethanol blended gasoline due to
13testing and other limitations as determined by the department.
14   Sec. 7.  Section 214A.2, subsection 3, paragraph c, Code
152021, is amended by adding the following new subparagraph:
16   NEW SUBPARAGRAPH.  (3)  (a)  Biobutanol blended gasoline
17shall be classified as Bu-xx where “xx” is the volume percent
18of biobutanol in the biobutanol blended gasoline.
   19(b)  In ensuring that biobutanol blended gasoline meets the
20classification requirements of this section, the department
21shall take into account up to a two percent variation in the
22volume percent of biobutanol in biobutanol blended gasoline
23due to testing and other limitations as determined by the
24department.
25   Sec. 8.  Section 214A.2, subsection 4, paragraph b,
26subparagraph (1), Code 2021, is amended by adding the following
27new subparagraph divisions:
28   NEW SUBPARAGRAPH DIVISION.  (a)  Biodiesel shall be
29classified as B-100.
30   NEW SUBPARAGRAPH DIVISION.  (b)  Diesel fuel containing no
31biodiesel or trace amounts of biodiesel shall be classified as
32B-0.
33   Sec. 9.  Section 214A.2, subsection 4, paragraph b, Code
342021, is amended by adding the following new subparagraph:
35   NEW SUBPARAGRAPH.  (04)  (a)  Biodiesel blended fuel shall be
-5-1classified B-xx where “xx” is the volume percent of biodiesel
2in the biodiesel blended fuel.
   3(b)  In ensuring that biodiesel blended fuel meets the
4classification requirements of this section, the department
5shall take into account up to a two percent variation in the
6volume percent of biodiesel in biodiesel blended fuel due to
7testing and other limitations as determined by the department.
8   Sec. 10.  Section 214A.2, subsection 4, paragraph b,
9subparagraph (4), Code 2021, is amended to read as follows:
   10(4)  Biodiesel blended fuel classified as B-6 or higher
11but not higher than up to and including B-20 must conform to
12A.S.T.M. international specification D7467, or a successor
13A.S.T.M. international specification, as established by rules
14adopted by the department.
15   Sec. 11.  Section 214A.2, subsection 4, paragraph b, Code
162021, is amended by adding the following new subparagraph:
17   NEW SUBPARAGRAPH.  (5)  (a)  Biodiesel blended fuel
18classified as higher than B-20 must conform to standards
19adopted by the department.
   20(b)  The rules adopted by the department of agriculture and
21land stewardship establishing standards for biodiesel blended
22fuel classified as higher than B-20 shall take effect not
23earlier than sixty days after the date for filing as provided
24in section 17A.5, subsection 2, paragraph “b”, subparagraph
25(1), subparagraph division (a). The department of agriculture
26and land stewardship shall notify the legislative services
27agency and the department of revenue of the effective date of
28rules at least thirty days prior to the effective date of the
29rules.
30   Sec. 12.  Section 214A.2, subsection 5, Code 2021, is amended
31by striking the subsection.
32   Sec. 13.  Section 214A.3, subsection 2, Code 2021, is amended
33to read as follows:
   342.  For a renewable fuel, all of the following apply:
   35a.  A person shall not knowingly falsely advertise that a
-6-1motor fuel for sale is a renewable fuel or is not a renewable
2fuel.
   3b.  (1)  Ethanol blended A person shall not knowingly falsely
4advertise that
gasoline sold by a dealer shall be designated
5according to its classification as provided in section 214A.2
6for sale is or is not standard use gasoline or special use
7gasoline
. However, a person advertising E-9 or E-10 gasoline
8may only designate it as ethanol blended gasoline. A person
9advertising ethanol blended gasoline formulated with a
10percentage of between seventy and eighty-five percent by
11volume of ethanol shall designate it as E-85.
A person shall
12not knowingly falsely advertise ethanol blended standard
13use
gasoline or special use gasoline for sale by using an
14inaccurate designation in violation of this subparagraph
15
 classification as provided in section 214A.2.
   16(2)  A person shall not knowingly falsely advertise
17biobutanol blended gasoline for sale by using an inaccurate
18designation classification as provided in section 214A.2.
   19(3)  A person shall not knowingly falsely advertise
20biodiesel that diesel fuel for sale is or is not standard use
21diesel fuel or special use diesel fuel. A person shall not
22knowingly falsely advertise standard use diesel fuel or special
23use diesel fuel for sale
by using an inaccurate designation
24
 classification as provided in section 214A.2.
25   Sec. 14.  Section 214A.11, Code 2021, is amended by adding
26the following new subsections:
27   NEW SUBSECTION.  3.  The department may refuse to issue or
28renew and may suspend or revoke a license issued to a retail
29dealer pursuant to section 214.2 for any violation of this
30chapter, including rules adopted by the department pursuant to
31section 214A.2.
32   NEW SUBSECTION.  4.  A retail dealer who advertises the sale
33of motor fuel at a retail motor fuel site shall not be subject
34to a criminal or civil penalty or an administrative action
35suspending or revoking a license as provided in this section,
-7-1if a person fails to dispense the classification of ethanol
2blended gasoline or biodiesel blended fuel otherwise required
3in subchapter IV and the retail dealer complies with the other
4applicable requirements of that subchapter.
5   Sec. 15.  NEW SECTION.  214A.31  Special use gasoline
6classified as E-0 — restrictions.
   7A retail dealer shall not knowingly advertise for sale or
8knowingly sell special use gasoline classified as E-0 as
9provided in section 214A.2, unless the gasoline is premium
10grade unleaded gasoline as provided in that section.
11   Sec. 16.  NEW SECTION.  214A.32  Special use gasoline
12classified as E-10 — restrictions — future implementation.
   131.  A retail dealer shall not knowingly advertise for sale
14special use gasoline classified as E-10 or higher up to but not
15including E-15, as provided in section 214A.2.
   162.  Notwithstanding subsection 1, a retail dealer may
17advertise for sale special use gasoline classified as E-10 or
18higher to power an engine that operates any of the following:
   19a.  A 2000 or older model year motor vehicle.
   20b.  A motorcycle as defined in section 321.1.
   21c.  An all-terrain vehicle as defined in section 321.1.
   22d.  A snowmobile as defined in section 321G.1.
   23e.  A vehicle serviced by a marina, dock, or airport.
   24f.  A vehicle principally designed for use off a public
25highway.
   26g.  Machinery or equipment not primarily designed to
27transport a person or property.
   283.  a.  This section shall be implemented on January 1, 2028.
   29b.  This subsection is repealed January 2, 2028.
30   Sec. 17.  NEW SECTION.  214A.33  Standard use gasoline
31classified as E-15 or higher — future implementation.
   321.  A retail dealer shall not knowingly advertise for sale
33or knowingly sell gasoline from more than two dispensing units
34located at a retail motor fuel site, unless the retail dealer
35advertises for sale standard use gasoline classified as E-15
-8-1or higher from at least one of the dispensing units located at
2that retail motor fuel site.
   32.  a.  This section shall be implemented on January 1, 2028.
   4b.  This subsection is repealed January 2, 2028.
5   Sec. 18.  NEW SECTION.  214A.34  Standard use diesel fuel —
6restrictions.
   71.  For the period of each year beginning April 1 and ending
8October 31, a retail dealer shall not knowingly advertise for
9sale clear diesel fuel other than standard use diesel fuel
10classified as B-11 or higher as provided in section 214A.2.
   112.  Notwithstanding subsection 1, a retail dealer may
12advertise for sale special use diesel fuel classified as B-0 or
13higher to power an engine that operates any of the following:
   14a.  A vehicle serviced by a marina, dock, or airport.
   15b.  A vehicle principally designed for use off a public
16highway.
   17c.  Machinery or equipment not primarily designed to
18transport a person or property.
   193.  This section does not apply to diesel fuel used to power
20aircraft, railroad locomotives, vessels of the United States
21coast guard, or vessels subject to inspection under 46 U.S.C.
22§3301.
23   Sec. 19.  NEW SECTION.  214A.35  Labeling of dispensing units
24— federal law.
   25A retail dealer advertising the sale of motor fuel shall
26affix a label to each dispensing unit used to discharge a motor
27fuel as required by federal law, including by the United States
28federal trade commission as provided in 16 C.F.R. §306.12, and
29the United States environmental protection agency as provided
30in 40 C.F.R. pt.80, including §80.570 and 80.1501.
31   Sec. 20.  NEW SECTION.  214A.36  Labeling of dispensing units
32— state law — future implementation.
   331.  A retail dealer restricted from advertising the sale of
34special use gasoline as provided in section 214A.31 shall affix
35a clearly visible decal to each dispensing unit discharging
-9-1such gasoline. The decal shall identify the gasoline as
2special use gasoline.
   32.  a.  A retail dealer restricted from advertising the
4sale of special use gasoline as provided in section 214A.32
5shall affix a clearly visible decal to each dispensing unit
6discharging such gasoline. The decal shall identify the
7gasoline as special use gasoline and list the types of engines
8that may be powered by using that gasoline as provided in
9section 214A.32, subsection 2.
   10b.  (1)  This subsection shall be implemented on January 1,
112028.
   12(2)  This paragraph “b” is repealed January 2, 2028.
   133.  A retail dealer advertising the sale of biobutanol
14blended gasoline from a dispensing unit shall affix to the
15dispensing unit a decal identifying the gasoline as biobutanol
16blended gasoline.
   174.  A retail dealer restricted from advertising the sale
18of special use diesel fuel as provided in section 214A.34
19shall affix a clearly visible decal to each dispensing unit
20discharging such diesel fuel. The decal shall identify the
21diesel fuel as special use diesel fuel and list the types
22of engines that may be powered by using that diesel fuel as
23provided in section 214A.34, subsection 2.
   245.  The design and location of a decal required in this
25section shall be prescribed by rules adopted by the department.
26A decal identifying a renewable fuel shall be consistent with
27standards adopted pursuant to section 159A.6. The department
28may approve an application to place a decal in a special
29location on a dispensing unit or use a decal with special
30lettering or colors, if the decal appears clear and conspicuous
31to the consumer. The application shall be submitted in writing
32pursuant to procedures adopted by the department.
33   Sec. 21.  NEW SECTION.  214A.41  Waiver of renewable fuel
34requirements.
   351.  The governor may issue or renew an executive order or the
-10-1secretary of agriculture may issue or renew an administrative
2order temporarily waiving a requirement that a retail dealer
3comply with a provision in part 1 of this subchapter.
   42.  The order may allow the retail dealer to advertise
5for sale special use gasoline classified as E-0 as regular
6grade unleaded gasoline as provided in section 214A.2,
7notwithstanding section 214A.31.
   83.  a.  The order may allow the retail dealer to advertise
9for sale special use gasoline classified as E-10 or higher
10from any number of dispensing units at the retail dealer’s
11retail motor fuel site without any restriction, notwithstanding
12section 214A.32 or 214A.33.
   13b.  (1)  This subsection shall be implemented on January 1,
142028.
   15(2)  This paragraph “b” is repealed January 2, 2028.
   164.  The order may allow the retail dealer to advertise
17for sale special use diesel fuel classified as B-0 or higher
18without any restriction otherwise provided in section 214A.34.
   195.  The order must be supported by credible evidence that
20the retail dealer has not been able to reasonably obtain the
21required grade or classification of standard use gasoline or
22standard use diesel fuel at the retail dealer’s retail motor
23fuel site.
   246.  An order may apply to more than one retail motor fuel
25site, if each such retail motor fuel site is listed in the
26order.
   277.  The department shall publish a copy of the order on the
28department’s internet site within ten days after its issuance.
   298.  The order shall expire six months from the date of its
30issuance, unless a shorter period is stated in the order.
31The early expiration of the order may also occur based on
32circumstances described in the order.
33   Sec. 22.  NEW SECTION.  214A.42  Suspension of renewable fuel
34requirements.
   351.  The governor may issue or renew an executive order that
-11-1temporarily suspends a requirement that retail dealers comply
2with a provision in part 1 of this subchapter on either a
3statewide basis or in a geographic region of the state.
   42.  The order may allow retail dealers to advertise for
5sale special use gasoline classified as E-0 as regular
6grade unleaded gasoline as provided in section 214A.2,
7notwithstanding section 214A.31.
   83.  a.  The order may allow retail dealers to advertise
9for sale special use gasoline classified as E-10 or higher to
10customers from any number of dispensing units at retail motor
11fuel sites without restriction, notwithstanding section 214A.32
12or 214A.33.
   13b.  (1)  This subsection shall be implemented on January 1,
142028.
   15(2)  This paragraph “b” is repealed January 2, 2028.
   164.  The order may allow retail dealers to advertise for sale
17special use diesel fuel classified as B-0 or higher without the
18restrictions otherwise provided in section 214A.34, subsection
192.
   205.  The order must be based on the governor’s determination
21that any of the following apply:
   22a.  There is not adequate infrastructure to store and
23dispense the required standard use gasoline or standard use
24diesel fuel at retail motor fuel sites in this state or the
25region of this state described in the order.
   26b.  It is not commercially feasible to obtain the standard
27use gasoline or standard use diesel fuel to be advertised for
28sale or sold at retail motor fuel sites in this state or the
29region of this state described in the order.
   306.  The order shall take effect on its date of publication in
31the Iowa administrative bulletin, unless the order specifies
32a later date. The order shall expire one year from the date
33of its publication unless a shorter period is stated in the
34order. The early expiration of the order may also occur based
35on circumstances described in the order.
-12-
1   Sec. 23.  NEW SECTION.  214A.43  Extension of special use
2gasoline requirements — future implementation.
   31.  As used in this section, “department” means the
4department of natural resources.
   52.  The director of the department may issue an
6administrative order granting a small retail dealer an extended
7period of compliance to meet the requirements of section
8214A.32 or 214A.33.
   93.  A small retail dealer must apply for an extended period
10of compliance by submitting a form to the department in a
11manner and according to procedures required by the department.
   124.  The department may grant an extended period of compliance
13to a small retail dealer for each retail motor fuel site
14identified in the application, if the department determines all
15of the following:
   16a.  The small retail dealer cannot comply with section
17214A.32 or 214A.33 because the retail motor fuel site’s
18existing underground motor fuel storage and dispensing
19infrastructure is incompatible with standard use gasoline
20classified as E-15 or higher.
   21b.  The small retail dealer would suffer significant
22financial hardship, measured on the basis of income to expense
23ratio, if the small retail dealer improved a retail motor fuel
24site to store and dispense standard use gasoline classified
25as E-15 or higher by installing, replacing, or converting
26infrastructure.
   27c.  The department of agriculture and land stewardship
28submits a statement to the department of natural resources
29certifying the small retail dealer’s proposed financing of
30ethanol infrastructure at the retail motor fuel site. The
31statement shall at least include all of the following:
   32(1)  The small retail dealer has applied to participate in
33the renewable fuel infrastructure program for retail motor
34fuel sites as provided in section 159A.14 to improve the
35retail motor fuel site by installing, replacing, or converting
-13-1infrastructure to be used to store, dispense, or blend and
2dispense ethanol blended gasoline.
   3(2)  The small retail dealer is eligible to participate in
4the program as described in subparagraph (1), regardless of
5whether the small retail dealer’s application is approved.
   6(3)  If the small retail dealer’s application is approved,
7the retail motor fuel site has not yet been improved as
8provided in subparagraph (1), using moneys awarded to the
9participating person according to the terms of a cost-share
10agreement as provided in section 159A.14.
   115.  The order shall take effect on its date of publication in
12the Iowa administrative bulletin, unless the order specifies
13a later date. The order shall expire five years from the date
14of its publication unless a shorter period is stated in the
15order. The early expiration of the order may also occur based
16on circumstances described in the order.
   176.  The director of the department may issue an order
18granting a retail dealer any number of subsequent extended
19periods of compliance, if all of the following apply:
   20a.  The prior order granting the retail dealer an extended
21period of compliance is expiring or has expired.
   22b.  The department grants the extended period of compliance
23in the same manner as it would approve a new application.
   247.  a.  This section shall be implemented on January 1, 2028.
   25b.  This subsection is repealed January 2, 2028.
26   Sec. 24.  RULE-MAKING — EXTENSION OF SPECIAL USE GASOLINE
27REQUIREMENTS.
  The department of natural resources shall adopt
28rules pursuant to chapter 17A as necessary to allow retail
29dealers to apply for an extended period of compliance and for
30the department to receive and consider such applications as
31provided in section 214A.43, prior to January 1, 2028.
32   Sec. 25.  REPEAL.  Section 214A.16, Code 2021, is repealed.
33PART B
34miscellaneous changes
35   Sec. 26.  Section 159A.6, subsection 1, paragraph c, Code
-14-12021, is amended to read as follows:
   2c.  Develop standards for decals required pursuant to
3section 214A.16 214A.36, which shall be designed to promote
4the advantages of using renewable fuels. The standards may be
5incorporated within a model decal adopted by the office.
6   Sec. 27.  NEW SECTION.  214.2A  Disciplinary action.
   7The department may refuse to issue or renew and may suspend
8or revoke a license issued to a retail dealer pursuant to
9section 214.2 for a violation of this chapter, or chapter 214A,
10including rules adopted by the department pursuant to section
11214A.1A.
12PART C
13code organization
14   Sec. 28.  CODE EDITOR DIRECTIVE.
   151.  The Code editor is directed to make the following
16transfers:
   17a.  Section 214A.7 to section 214A.2D.
   18b.  Section 214A.8 to section 214A.2E.
   19c.  Section 214A.13 to section 214A.2F.
   202.  The Code editor shall correct internal references in the
21Code and in any enacted legislation as necessary due to the
22enactment of this section.
23   Sec. 29.  DIRECTIONS TO THE CODE EDITOR.  The Code editor
24is directed to divide Code chapter 214A as amended by this
25division of this Act into subchapters and subchapter parts as
26follows:
   271.  Subchapter I, including sections 214A.1 and 214A.1A.
   282.  Subchapter II, including sections 214A.2 through
29214A.2F.
   303.  Subchapter III, including sections 214A.3 through
31214A.30.
   324.  Subchapter IV, subdivided into part 1, including
33sections 214A.31 through 214A.40; and part 2, including
34sections 214A.41 through 214A.43.
35PART D
-15-1effective dates
2   Sec. 30.  EFFECTIVE DATE.
   31.  Except as provided in subsection 2, this division of this
4Act takes effect October 1, 2021.
   52.  The section of this division of this Act enacting section
6214A.1A takes effect upon enactment. However, rules adopted by
7the department of agriculture and land stewardship pursuant to
8that section shall not take effect prior to October 1, 2021.
   93.  The section of this division of this Act requiring the
10department of natural resources to adopt rules as necessary
11to allow retail dealers to apply for an extended period of
12compliance pursuant to section 214A.43 and for the department
13to consider those applications takes effect upon enactment.
14However, the department is not required to adopt such rules
15until January 1, 2027.
16DIVISION II
17RENEWABLE FUEL INFRASTRUCTURE
18PART A
19FINANCIAL INCENTIVES FOR RETAIL MOTOR FUEL SITES
20   Sec. 31.  Section 159A.11, subsection 1, Code 2021, is
21amended to read as follows:
   221.  “Biodiesel”, “biodiesel blended fuel”, “biodiesel
23fuel”
, “E-85 gasoline”, “ethanol”, “ethanol blended gasoline”,
24“gasoline”, “motor fuel”, “retail dealer”, and “retail motor fuel
25site”
, and “small retail dealer” mean the same as defined in
26section 214A.1.
27   Sec. 32.  Section 159A.12, Code 2021, is amended to read as
28follows:
   29159A.12  Classification Classifications of renewable types of
30motor
fuel — gasoline and diesel fuel.
   31For purposes of this subchapter, all of the following apply
32to types of motor fuel:

   331.   Gasoline,ethanol, and ethanol blended fuel and
34biodiesel fuel
 gasoline shall be classified in the same manner
35as provided in section 214A.2.
-16-
   12.  Diesel fuel, biodiesel fuel, and biodiesel blended fuel
2shall be classified in the same manner as provided in section
3214A.2.
4   Sec. 33.  Section 159A.13, subsection 6, Code 2021, is
5amended by striking the subsection.
6   Sec. 34.  Section 159A.14, subsections 1 and 2, Code 2021,
7are amended to read as follows:
   81.  The purpose of the program is to improve retail
9motor fuel sites by installing, replacing, or converting
10infrastructure to be used to store, blend, or and dispense, or
11store, blend, and dispense,
renewable fuel. The infrastructure
12shall be ethanol infrastructure or biodiesel infrastructure.

   13a.  (1)  Ethanol infrastructure shall be designed and used
14exclusively
 have the capacity to do any of the following:
   15(a)    (1)  Store and dispense E-15 gasoline ethanol classified
16as E-100 or store ethanol blended gasoline classified as E-85
17or higher
. At least for the period beginning on September 16
18and ending on May 31 of each year, the ethanol infrastructure
19must be used to store and dispense E-15 gasoline as a
20registered fuel recognized by the United States environmental
21protection agency.

   22(b)    (2)  Store and dispense Dispense ethanol blended
23gasoline classified as
E-85 gasoline or higher.
   24(c)    (3)  Store, ethanol classified as E-100 or store
25ethanol blended gasoline classified as E-85 or higher to
blend,
26 and dispense motor fuel ethanol or ethanol blended gasoline
27classified as E-85 or higher
from a motor fuel blender pump.
28The ethanol infrastructure must be used for the storage of
29ethanol or ethanol blended gasoline, or for blending ethanol
30with gasoline.
The ethanol infrastructure must at least
31include a motor fuel blender pump which dispenses different
32classifications of ethanol blended gasoline and allows E-85
33gasoline to be dispensed at all times that the blender pump is
34operating.
  35(2)   b.   (1)  Biodiesel infrastructure shall be designed and
-17-1used exclusively
 have the capacity to do any of the following:
   2(a)  Store and dispense biodiesel or biodiesel blended fuel
 3classified as B-20 or higher.
   4(b)  Blend or Store biodiesel classified as B-100 or
5store biodiesel blended fuel classified as B-20 or higher,
6to blend and
dispense biodiesel blended fuel classified as
7B-20 or higher
from a motor fuel blender pump. The biodiesel
8infrastructure must at least include a motor fuel blender pump
9which dispenses different classifications of biodiesel blended
10fuel and allows B-20 to be dispensed at all times that the
11blender pump is operating.

   12(2)  This paragraph “b” is repealed July 1, 2024.
   13b.    c.  The infrastructure must be part of the premises of
14a retail motor fuel site operated by a retail dealer. The
15infrastructure shall not include a tank vehicle.
   162.  A person may apply to the department to participate in
17the program to
receive financial incentives on a cost-share
18basis
 as provided in this section. The department shall
19forward the applications to the underground storage tank
20fund board as required by that board for evaluation and
21recommendation. The underground storage tank fund board may
22rank the applications with comments and shall forward them

23 to the infrastructure board for approval or disapproval.
 24The department shall establish a deadline for submitting
25applications by persons seeking to participate in the program.
26The infrastructure board shall approve all applications to
27improve existing retail motor fuel sites before approving
28applications to improve any retail motor fuel site planned to
29be constructed or expanded or in any stage of construction
30or expansion. The infrastructure board shall then provide
31a priority in approving applications submitted by eligible
32persons who are small retail dealers. Upon request of the
33department of natural resources, the department of agriculture
34and land stewardship shall submit a statement to the department
35of natural resources certifying a small retail dealer’s
-18-1proposed financing of ethanol infrastructure as provided
2in section 214A.43.
The department shall award financial
3incentives on a cost-share basis to an eligible person whose
4application was approved by the infrastructure board.
5   Sec. 35.  Section 159A.14, subsection 5, Code 2021, is
6amended to read as follows:
   75.  An award of financial incentives to a participating
8person shall be on a cost-share basis in the form of a grant.
9To participate in the program, an eligible person must execute
10a cost-share agreement with the department as approved by
11the infrastructure board in which the person contributes
12a percentage of the total costs related to improving the
13retail motor fuel site. A cost-share agreement shall be for
14a three-year period or a five-year period.
A cost-share
15agreement shall include provisions for standard financial
16incentives or standard financial incentives and supplemental
17financial incentives as provided in this subsection. The
18infrastructure board may approve multiple improvements to the
19same retail motor fuel site for the full amount available for
20both ethanol infrastructure and biodiesel infrastructure so
21long as the improvements for ethanol infrastructure and for
22biodiesel infrastructure are made under separate cost-share
23agreements.

   24a.  (1)  Except as provided in paragraph “b”, a A
25 participating person may be awarded standard financial
26incentives to make improvements to a retail motor fuel site by
27installing, replacing, or converting ethanol infrastructure as
28provided in this section
.
   29(1)  The standard financial incentives awarded to a
30participating person shall not exceed the following:
   31(a)  For a three-year cost-share agreement, fifty percent of
32the actual cost of making the improvement or thirty thousand
33dollars, whichever is less.
   34(b)  For be awarded toparticipating person pursuant to a
35 five-year cost-share agreement, not to exceed seventy percent
-19-1of the actual cost of making the improvement or fifty thousand
2dollars, whichever is less.
   3(2)  As part of the cost-share agreement, the participating
4person must agree that for the period of the agreement the
5ethanol infrastructure shall be used to store and dispense
6ethanol or ethanol blended gasoline classified as E-15 or
7higher or store, blend, and dispense ethanol or ethanol blended
8gasoline classified as E-15 or higher.
   9(2)    (3)  The infrastructure board may approve multiple
10awards of standard financial incentives to make improvements
11to a retail motor fuel site so long as the total amount of the
12awards for ethanol infrastructure or biodiesel infrastructure
13 does not exceed the limitations provided in subparagraph (1).
   14b. A participating person may be awarded standard financial
15incentives to improve a retail motor fuel site by installing,
16replacing, or converting biodiesel infrastructure as provided
17in this section.
   18(1)  The standard financial incentives shall be awarded to
19a participating person pursuant to a three-year cost-share
20agreement not to exceed fifty percent of the actual cost of
21making the improvement or thirty thousand dollars, whichever
22is less.
   23(2)  As part of the cost-share agreement, the participating
24person must agree that for the period of the agreement the
25biodiesel infrastructure shall be used to store and dispense
26biodiesel or biodiesel blended fuel classified as B-20 or
27higher, or store, blend, and dispense biodiesel or biodiesel
28blended fuel classified as B-20 or higher, from April 1 to
29October 31 and biodiesel blended fuel classified as B-5 or
30higher from November 1 to March 31.
   31(3)  This paragraph “b” is repealed July 1, 2024.
   32c.  (1)  The infrastructure board may approve multiple
33improvements to the same retail motor fuel site for the full
34amount available for both ethanol infrastructure and biodiesel
35infrastructure so long as the improvements for ethanol
-20-1infrastructure and for biodiesel infrastructure are made under
2separate cost-share agreements.
   3(2)  This paragraph “c” is repealed July 1, 2024.
  4d.  In addition to any standard financial incentives awarded
5to a participating person under paragraph “a” this subsection,
6the participating person may be awarded supplemental financial
7incentives to make improvements to a retail motor fuel site to
8do any of the following:
   9(1)  Upgrade or replace a dispenser which is part of
10gasoline storage and dispensing infrastructure used to store
11and dispense E-85 gasoline as provided in section 455G.31.
12The participating person is only eligible to be awarded the
13supplemental financial incentives if the person installed the
14dispenser not later than sixty days after July 27, 2011. The
15supplemental financial incentives awarded to the participating
16person shall not exceed seventy-five percent of the actual cost
17of making the improvement or thirty thousand dollars, whichever
18is less.
   19(2)  To improve additional retail motor fuel sites owned or
20operated by a participating person within a twelve-month period
21as provided in the cost-share agreement. The supplemental
22financial incentives shall be used for the installation of an
23additional tank and associated infrastructure at each such
24retail motor fuel site. A participating person may be awarded
25supplemental financial incentives under this subparagraph
26
 paragraph and standard financial incentives under paragraph
27“a”
 this subsection to improve the same motor fuel site. The
28supplemental financial incentives awarded to the participating
29person shall not exceed twenty-four thousand dollars. The
30participating person shall be awarded the supplemental
31financial incentives on a cumulative basis according to the
32schedule provided in this subparagraph paragraph, which shall
33not exceed the following:
   34(a)    (1)  For the second retail motor fuel site, six thousand
35dollars.
-21-
   1(b)    (2)  For the third retail motor fuel site, six thousand
2dollars.
   3(c)    (3)  For the fourth retail motor fuel site, six thousand
4dollars.
   5(d)    (4)  For the fifth retail motor fuel site, six thousand
6dollars.
7   Sec. 36.  Section 159A.16, subsection 3, Code 2021, is
8amended to read as follows:
   93.  Moneys in the renewable fuel infrastructure fund are
10appropriated to the department exclusively to support and
11market the renewable fuel infrastructure programs as provided
12in sections 159A.14 and 159A.15, and as allocated in financial
13incentives by the renewable fuel infrastructure board created
14in section 159A.13.
   15a.  (1)  For each fiscal year of the period beginning July 1,
162021, and ending June 30, 2024, not more than one million two
17hundred fifty thousand dollars shall be allocated to support
18all of the following:
   19(a)  The renewable fuel infrastructure program for retail
20motor fuel sites as provided in section 159A.14 to finance
21the installation, replacement, or conversion of biodiesel
22infrastructure as provided in that section.
   23(b)  The renewable fuel infrastructure program for biodiesel
24terminal facilities as provided in section 159A.15.
   25(2)  This paragraph “a” is repealed July 1, 2024.
   26b.  Up to fifty For the fiscal year beginning July 1, 2021,
27and for each fiscal year thereafter, not more than one hundred

28 thousand dollars shall be allocated each fiscal year to the
29department to support the administration of the programs.
   30c.  The For the fiscal year beginning July 1, 2021, and
31for each fiscal year thereafter, the
department may use up to
32one and one-half percent of the program funds to market the
33programs. Otherwise the moneys shall not be transferred, used,
34obligated, appropriated, or otherwise encumbered except to
35allocate as financial incentives under the programs.
-22-
1   Sec. 37.  RENEWABLE FUEL INFRASTRUCTURE AGREEMENTS.  The
2department of agriculture and land stewardship shall continue
3to administer any outstanding cost-share agreement executed
4prior to July 1, 2024, in which a participating person
5was awarded a grant to improve a retail motor fuel site by
6installing, replacing, or converting infrastructure to be used
7to store and dispense biodiesel blended fuel or blend and
8dispense biodiesel blended fuel as provided in section 159A.14,
9as amended by this Act.
10PART B
11REQUIREMENTS FOR STORAGE AND DISPENSING INFRASTRUCTURE
12   Sec. 38.  Section 323.4A, subsection 2, paragraphs a and b,
13Code 2021, are amended to read as follows:
   14a.  Installing, converting, or operating a storage tank
15or a dispenser located on the distributor’s or dealer’s
16business premises for use in storing or dispensing renewable
17fuel. However, this paragraph does not apply to a dealer or
18distributor whose business premises are leased from the other
19party furnishing the renewable fuel.

   20b.  Using a dispenser to dispense ethanol blended gasoline,
21including gasoline with a specified blend or a range of blends
22under chapter 214A, if the dispenser is approved as required by
23the state fire marshal for dispensing the specified blend or
24range of blends, including as provided in section 455G.31.
25   Sec. 39.  NEW SECTION.  455G.32  Definitions.
   26As used in this subchapter unless the context otherwise
27requires:
   281.  “Department” means the department of natural resources.
   292.  “Ethanol blended gasoline” means the same as defined in
30section 214A.1.
   313.  “Gasoline fuel storage and dispensing infrastructure” or
32“infrastructure” means a motor fuel storage tank located above
33ground or below ground, motor fuel pump, and a dispensing unit
34necessary to store and dispense gasoline at a retail motor fuel
35site as defined in section 214A.1, including but not limited to
-23-1all associated equipment, dispensing units, dispensers, pumps,
2pipes, hoses, tubes, lines, fittings, valves, filters, seals,
3and covers.
   44.  “Retail dealer” means the same as defined in section
5214A.1.
6   Sec. 40.  NEW SECTION.  455G.33  Restrictions.
   71.  A retail dealer shall not install, replace, or convert
8gasoline fuel storage and dispensing infrastructure unless the
9installed, replaced, or converted infrastructure is capable of
10storing and dispensing ethanol blended gasoline classified as
11E-85 or higher.
   122.  The infrastructure must be all of the following:
   13a.  Listed as compatible for use with ethanol blended
14gasoline classified as E-85 or higher by an independent testing
15laboratory or as approved by the manufacturer.
   16b.  Approved by the department or state fire marshal subject
17to conditions determined necessary by the department or state
18fire marshal. The department or state fire marshal may waive
19the requirement in paragraph “a” upon satisfaction that a
20substitute requirement serves the same purpose.
21   Sec. 41.  REPEAL.  Section 455G.31, Code 2021, is repealed.
22   Sec. 42.  EFFECTIVE DATE.  This part of this division of this
23Act takes effect October 1, 2021.
24DIVISION III
25TAXATION
26PART A
27INCOME TAX
28   Sec. 43.  Section 422.11O, subsection 8, Code 2021, is
29amended to read as follows:
   308.  This section is repealed on January 1, 2025 2028.
31   Sec. 44.  Section 422.11P, subsection 4, Code 2021, is
32amended to read as follows:
   334.  For a retail dealer whose tax year is on a calendar year
34basis, the retail dealer shall calculate the amount of the tax
35credit by multiplying a designated rate by the retail dealer’s
-24-1total biodiesel blended fuel gallonage as provided in section
2452A.31 which qualifies under this subsection.
   3a.  In order to qualify for the tax credit, the biodiesel
4blended fuel must be classified as B-5 B-11 or higher as
5provided in paragraph “b” this subsection.
   6b.   Beginning January 1, 2018 2022, the designated rate is
7determined as follows:
   8(1)  For biodiesel blended fuel classified as B-5 or higher
9but not as high as B-11, the designated rate is three and
10one-half cents.
   11(2)  For biodiesel blended fuel classified as B-11 or higher,
12the designated rate is five and one-half cents.
   13(1)  (a)  During the period beginning January 1 and ending
14March 31, and during the period beginning November 1 and ending
15December 31, for biodiesel blended fuel classified as B-11 or
16higher up to but not including B-20, the designated rate is
17four cents.
   18(b)  During the period beginning January 1 and ending
19December 31, for biodiesel blended fuel classified as B-20 or
20higher up to but not including B-30, the designated rate is six
21cents.
   22(c)  During the period beginning January 1 and ending
23December 31, for biodiesel blended fuel classified as B-30 or
24higher, the designated rate is ten cents.
   25(2)  A retail dealer is eligible to claim a tax credit
26for a biodiesel blended fuel classified as higher than B-20
27under subparagraph (1), subparagraph subdivision (b) or (c),
28for each tax year beginning January 1 immediately following
29the effective date of rules adopted by the department of
30agriculture and land stewardship establishing standards for
31that classification as provided in sections 214A.2.
32   Sec. 45.  Section 422.11P, subsection 8, Code 2021, is
33amended to read as follows:
   348.  This section is repealed January 1, 2025 2028.
35   Sec. 46.  Section 422.11Y, subsection 4, paragraph b, Code
-25-12021, is amended to read as follows:
   2b.  The Beginning January 1, 2022, the designated rate of the
3tax credit for the following three periods within each calendar
4year
is as follows:
   5(1)  For the first period beginning January 1 and ending May
631, three
 four cents.
   7(2)  For the second period beginning June 1 and ending
8September 15, ten cents.
   9(3)  For the third period beginning September 16 and ending
10December 31, three cents.
11   Sec. 47.  Section 422.11Y, subsection 9, Code 2021, is
12amended to read as follows:
   139.  This section is repealed on January 1, 2025 2028.
14   Sec. 48.  Section 422.33, subsection 11B, paragraph c, Code
152021, is amended to read as follows:
   16c.  This subsection is repealed on January 1, 2025 2028.
17   Sec. 49.  Section 422.33, subsection 11C, paragraph c, Code
182021, is amended to read as follows:
   19c.  This subsection is repealed on January 1, 2025 2028.
20   Sec. 50.  Section 422.33, subsection 11D, paragraph c, Code
212021, is amended to read as follows:
   22c.  This subsection is repealed on January 1, 2025 2028.
23   Sec. 51.  2006 Iowa Acts, chapter 1142, section 49,
24subsection 3, as amended by 2011 Iowa Acts, chapter 113,
25section 20, and 2016 Iowa Acts, chapter 1106, section 6, is
26amended to read as follows:
   273.  For a retail dealer who may claim an E-85 gasoline
28promotion tax credit under section 422.11O or 422.33,
29subsection 11B, as enacted in this Act and amended in
30subsequent Acts, in calendar year 2024 2027 and whose tax
31year ends prior to December 31, 2024 2027, the retail dealer
32may continue to claim the tax credit in the retail dealer’s
33following tax year. In that case, the tax credit shall be
34calculated in the same manner as provided in section 422.11O
35or 422.33, subsection 11B, as enacted in this Act and amended
-26-1in subsequent Acts, for the remaining period beginning on the
2first day of the retail dealer’s new tax year until December
331, 2024 2027. For that remaining period, the tax credit shall
4be calculated in the same manner as a retail dealer whose tax
5year began on the previous January 1 and who is calculating the
6tax credit on December 31, 2024 2027.
7   Sec. 52.  2011 Iowa Acts, chapter 113, section 31, as amended
8by 2016 Iowa Acts, chapter 1106, section 10, is amended to read
9as follows:
   10SEC. 31.  TAX CREDIT AVAILABILITY.  For a retail dealer
11who may claim a biodiesel blended fuel promotion tax credit
12under section 422.11P or 422.33, subsection 11C, as amended
13in this Act and amended in subsequent Acts, in calendar year
142024 2027, and whose tax year ends prior to December 31, 2024
15
 2027, the retail dealer may continue to claim the tax credit in
16the retail dealer’s following tax year. In that case, the tax
17credit shall be calculated in the same manner as provided in
18section 422.11P or 422.33, subsection 11C, as amended in this
19Act and amended in subsequent Acts, for the remaining period
20beginning on the first day of the retail dealer’s new tax year
21until December 31, 2024 2027. For that remaining period, the
22tax credit shall be calculated in the same manner as a retail
23dealer whose tax year began on the previous January 1 and who
24is calculating the tax credit on December 31, 2024 2027.
25   Sec. 53.  2011 Iowa Acts, chapter 113, section 37, as amended
26by 2016 Iowa Acts, chapter 1106, section 3, is amended to read
27as follows:
   28SEC. 37.  TAX CREDIT AVAILABILITY.  For a retail dealer who
29may claim an E-15 plus gasoline promotion tax credit under
30section 422.11Y or 422.33, subsection 11D, as enacted in this
31Act and amended in subsequent Acts, in calendar year 2024
32
 2027, and whose tax year ends prior to December 31, 2024 2027,
33the retail dealer may continue to claim the tax credit in the
34retail dealer’s following tax year. In that case, the tax
35credit shall be calculated in the same manner as provided in
-27-1section 422.11Y or 422.33, subsection 11D, as enacted in this
2Act and amended in subsequent Acts, for the remaining period
3beginning on the first day of the retail dealer’s new tax year
4until December 31, 2024 2027. For that remaining period, the
5tax credit shall be calculated in the same manner as a retail
6dealer whose tax year began on the previous January 1 and who
7is calculating the tax credit on December 31, 2024 2027.
8PART B
9MOTOR FUEL TAX
10   Sec. 54.  NEW SECTION.  452A.2A  Classification of types of
11motor fuel — gasoline and diesel fuel.
   12For purposes of this subchapter, all of the following apply
13to types of motor fuel:
   141.  Gasoline, ethanol, and ethanol blended gasoline shall be
15classified in the same manner as provided in section 214A.2.
   162.  Diesel fuel, biodiesel fuel, and biodiesel blended fuel
17shall be classified in the same manner as provided in section
18214A.2.
19   Sec. 55.  Section 452A.8, subsection 2, paragraph a, Code
202021, is amended by adding the following new subparagraph:
21   NEW SUBPARAGRAPH.  (3)  The gallonage of gasoline or diesel
22fuel withdrawn from a terminal by a licensee to be blended
23with a biofuel after it is withdrawn from the terminal to the
24extent the tax rate on the gasoline or diesel fuel exceeds the
25tax rate which would be due on the ethanol blended gasoline or
26biodiesel blended fuel.
27   Sec. 56.  Section 452A.12, subsection 2, Code 2021, is
28amended to read as follows:
   292.  A person while transporting motor fuel or undyed special
30fuel from a refinery or marine or pipeline terminal in this
31state or from a point outside this state over the highways
32of this state in service other than that under subsection
331 shall carry in the vehicle a loading invoice showing the
34name and address of the seller or consignor, the date and
35place of loading, and the kind and quantity of motor fuel or
-28-1special fuel loaded, together with invoices showing the kind
2and quantity of each delivery and the name and address of each
3purchaser or consignee. An invoice carried pursuant to this
4subsection for ethanol blended gasoline or biodiesel blended
5fuel shall state its designation classification as provided in
6section 214A.2.
7   Sec. 57.  Section 452A.31, subsection 2, paragraph a,
8subparagraph (1), unnumbered paragraph 1, Code 2021, is amended
9to read as follows:
   10The total ethanol blended gasoline gallonage which is
11the retail dealer’s total number of gallons of ethanol
12blended gasoline and which includes all of the following
13subclassifications classifications:
14   Sec. 58.  Section 452A.31, subsection 2, paragraph a,
15subparagraph (1), subparagraph division (c), Code 2021, is
16amended to read as follows:
   17(c)  The total E-15 gasoline gallonage which is the total
18number of gallons of ethanol blended gasoline classified as
19E-15 or higher, up to but not including E-85 gasoline.
20   Sec. 59.  Section 452A.31, subsection 2, paragraph a,
21subparagraph (2), Code 2021, is amended to read as follows:
   22(2)  The total nonblended gasoline gallonage which is
23the total number of gallons of nonblended ethanol gasoline
 24classified as E-0.
25   Sec. 60.  Section 452A.31, subsection 3, paragraph a,
26subparagraphs (2) and (3), Code 2021, are amended to read as
27follows:
   28(2)  The total B-11 gallonage which is the total number of
29gallons of biodiesel blended fuel classified as B-11 or higher
 30up to but not including B-20.
   31(3)  The total nonblended diesel fuel gallonage which is the
32total number of gallons of diesel fuel which is not biodiesel
33or biodiesel blended fuel
 classified as B-0.
34   Sec. 61.  Section 452A.31, subsection 3, paragraph a, Code
352021, is amended by adding the following new subparagraphs:
-29-1   NEW SUBPARAGRAPH.  (03)  The total B-20 gallonage which
2is the total number of gallons of biodiesel blended fuel
3classified as B-20 or higher up to but not including B-30.
4   NEW SUBPARAGRAPH.  (003)  The total B-30 gallonage which
5is the total number of gallons of biodiesel blended fuel
6classified as B-30 or higher.
7   Sec. 62.  Section 452A.31, subsection 4, paragraph a,
8subparagraph (1), unnumbered paragraph 1, Code 2021, is amended
9to read as follows:
   10The aggregate ethanol blended gasoline gallonage
11which is the aggregate total number of gallons of ethanol
12blended gasoline and which includes all of the following
13subclassifications classifications:
14   Sec. 63.  Section 452A.31, subsection 4, paragraph a,
15subparagraph (1), subparagraph division (c), Code 2021, is
16amended to read as follows:
   17(c)  The aggregate E-15 gasoline gallonage which is the
18aggregate total number of gallons of ethanol blended gasoline
19classified as E-15 or higher, up to but not including E-85
20gasoline.
21   Sec. 64.  Section 452A.31, subsection 4, paragraph a,
22subparagraph (2), Code 2021, is amended to read as follows:
   23(2)  The aggregate nonblended gasoline gallonage, which is
24the aggregate number of gallons of nonblended ethanol gasoline
 25classified as E-0.
26   Sec. 65.  Section 452A.31, subsection 5, paragraph a,
27subparagraphs (2) and (3), Code 2021, are amended to read as
28follows:
   29(2)  The aggregate B-11 gallonage which is the aggregate
30total number of gallons of biodiesel blended fuel classified as
31B-11 or higher up to but not including B-20.
   32(3)  The aggregate nonblended diesel fuel gallonage which
33is the aggregate number of gallons of diesel fuel which is not
34biodiesel or biodiesel blended fuel
 classified as B-0.
35   Sec. 66.  Section 452A.31, subsection 5, paragraph a, Code
-30-12021, is amended by adding the following new subparagraphs:
2   NEW SUBPARAGRAPH.  (03)  The aggregate B-20 gallonage which
3is the aggregate total number of gallons of biodiesel blended
4fuel classified as B-20 or higher up to but not including B-30.
5   NEW SUBPARAGRAPH.  (003)  The aggregate B-30 gallonage which
6is the aggregate total number of gallons of biodiesel blended
7fuel classified as B-30 or higher.
8   Sec. 67.  Section 452A.33, subsection 1, paragraph a, Code
92021, is amended to read as follows:
   10a.  Each retail dealer shall file a report with the
11department stating
its total motor fuel gallonage for and its
12total gallonage for each type of motor fuel, including gasoline
13and diesel fuel, during
a determination period as follows:
   14(1)  Its total gasoline gallonage and its total
15ethanol gallonage, including for each classification and
16subclassification
as provided in section 452A.31.
   17(2)  Its total diesel fuel gallonage and its total
18biodiesel gallonage, including for each classification and
19subclassification
as provided in section 452A.31.
20   Sec. 68.  Section 452A.33, subsection 1, paragraph b,
21subparagraphs (1) and (2), Code 2021, are amended to read as
22follows:
   23(1)  The information submitted on a company-wide basis shall
24include the total motor fuel gallonage, including for each type
25and
classification and subclassification, sold and dispensed
26by the retail dealer as provided in paragraph “a” for all
27retail motor fuel sites from which the retail dealer sells and
28dispenses motor fuel.
   29(2)  The information submitted on a site-by-site basis shall
30include the total motor fuel gallonage, including for each type
31and
classification and subclassification, sold and dispensed by
32the retail dealer as provided in paragraph “a” separately for
33each retail motor fuel site from which the retail dealer sells
34and dispenses motor fuel.
35   Sec. 69.  Section 452A.33, subsection 1, paragraph c, Code
-31-12021, is amended to read as follows:
   2c.  The retail dealer shall prepare and submit file the
3report with the department in a manner and according to
4procedures required by the department in compliance with
5section 452A.61
However, the department may require that the
6retail dealer file the report with the department by electronic
7transmission.
The department may require that a retail
8dealers report to dealer file the report with the department
9on an annual, quarterly, or monthly basis. The department,
10upon application by a retail dealer, may grant a reasonable
11extension of time to file the report. A retail dealer who
12fails to file the report as required in this section or who
13fails to maintain records required to file the report shall be
14subject to a civil penalty of not more than one hundred dollars
15per occurrence which shall be deposited in the general fund of
16the state.

17PART C
18EFFECTIVE DATE
19   Sec. 70.  EFFECTIVE DATE.  This division of this Act takes
20effect January 1, 2022.
21DIVISION IV
22RENEWABLE FUEL USE BY STATE MOTOR VEHICLES
23   Sec. 71.  Section 8A.362, subsection 3, paragraph b, Code
242021, is amended by striking the paragraph and inserting in
25lieu thereof the following:
   26b.  The director shall provide for the purchase and operation
27of motor vehicle fuel and motor vehicles in the manner provided
28in section 8A.362A.
29   Sec. 72.  NEW SECTION.  8A.362A  Definitions and
30classifications.
   311.  As used in section 8A.362B and 8A.362C, unless the
32context otherwise requires:
   33a.  “Biodiesel blended fuel” means the same as defined in
34section 214A.1.
   35b.  “Biofuel” means the same as defined in section 214A.1.
-32-
   1c.  “Determination period” means any twelve-month period
2beginning January 1 and ending December 31.
   3d.  “Ethanol blended gasoline” means the same as defined in
4section 214A.1.
   5e.  “Renewable fuel” means ethanol blended gasoline or
6biodiesel blended fuel that meets the standards for that type
7of motor fuel as provided in section 214A.2.
   82.  For purposes of sections 8A.362B and 8A.362C, a renewable
9fuel shall be classified in the same manner as provided in
10section 214A.2.
11   Sec. 73.  NEW SECTION.  8A.362B  Motor vehicle purchases —
12renewable fuels.
   131.  A gasoline-powered motor vehicle, or a diesel-powered
14motor vehicle, operating under section 8A.362, shall be powered
15using the highest possible classification of renewable fuel if
16all of the following apply:
   17a.  The manufacturer of the motor vehicle or the United
18States environmental protection agency expressly states that
19the classification of renewable fuel is compatible with the
20motor vehicle’s normal operation.
   21b.  That classification of renewable fuel is commercially
22available in the region where the motor vehicle is being
23operated.
   24c.  No emergency situation exists that requires the immediate
25use of a motor fuel regardless of whether it has been blended
26with a biofuel.
   272.  If the highest possible classification of renewable
28fuel is able to be used to power a motor vehicle as provided
29in subsection 1, a state-issued credit card shall not be
30used to purchase motor fuel other than the highest possible
31classification of motor fuel.
   323.  A motor vehicle subject to this section shall be
33affixed with a brightly colored, highly visible sticker which
34notifies the traveling public that the motor vehicle is powered
35using the highest possible classification of renewable fuel.
-33-1However, the sticker is not required to be affixed to an
2unmarked vehicle used for purposes of providing law enforcement
3or security.
   44.  As part of the department’s competitive bidding
5procedure for the purchase of a diesel-powered motor vehicle,
6the director shall require that a bidder certify that the
7motor vehicle’s manufacturer expressly states that the motor
8vehicle is capable of being powered using biodiesel blended
9fuel classified as B-20 or higher.
10   Sec. 74.  NEW SECTION.  8A.362C  Motor vehicle purchases —
11renewable fuels — reports.
   121.  The department shall compile information regarding
13the department’s compliance with section 8A.362B during the
14previous determination period. The information shall include
15all of the following:
   16a.  Of the motor vehicles used to routinely travel on the
17state’s highways that are powered using gasoline, all of the
18following:
   19(1)  The total number of such motor vehicles according to
20model year.
   21(2)  The total number of such motor vehicles according to
22model year that are capable of being powered using ethanol
23blended gasoline classified as E-15 and E-85 according to the
24express warranty of the motor vehicle’s manufacturer.
   25(3)  The total number of gallons of ethanol blended gasoline
26classified as E-15, and the total number of gallons of ethanol
27blended gasoline classified as E-85, purchased during the
28preceding determination period, to the extent such information
29may be practically obtained.
   30b.  Of the motor vehicles used to routinely travel on the
31state’s highways that are powered using diesel fuel, all of the
32following:
   33(1)  The total number of such motor vehicles according to
34model year.
   35(2)  The total number of such motor vehicles according to
-34-1model year that are capable of being powered using biodiesel
2blended fuel classified as B-20 according to the express
3warranty of the motor vehicle’s manufacturer.
   4(3)  The total number of gallons of biodiesel blended fuel
5classified as B-20 purchased during the preceding determination
6period, to the extent such information may be practically
7obtained.
   82.  The department of administrative services shall
9prepare a state fleet renewable fuels compliance report which
10shall consolidate information compiled by the department
11under subsection 1 together with information compiled by
12the commission for the blind pursuant to section 216B.3,
13institutions governed by the state board of regents pursuant to
14section 262.25A, the department of transportation pursuant to
15section 307.21, and the department of corrections pursuant to
16section 904.312A. The department of administrative services
17shall submit the state fleet renewable fuels compliance report
18to the governor and general assembly not later than March 1 of
19each year.
20   Sec. 75.  Section 216B.3, subsection 16, paragraph a, Code
212021, is amended by striking the paragraph and inserting in
22lieu thereof the following:
   23a.  Provide for the purchase and operation of motor vehicles
24powered by renewable fuel in the same manner required for the
25director of the department of administrative services pursuant
26to section 8A.362B. The commission shall compile information
27regarding compliance with the provisions of this paragraph in
28the same manner as the department of administrative services
29pursuant to section 8A.362C. The commission shall cooperate
30with the department of administrative services in preparing the
31annual state fleet renewable fuels compliance report regarding
32compliance with this paragraph as provided in section 8A.362C.
33   Sec. 76.  Section 262.25A, subsection 2, Code 2021, is
34amended by striking the subsection and inserting in lieu
35thereof the following:
-35-   12.  An institution shall provide for the purchase and
2operation of motor vehicles powered by renewable fuel in
3the same manner required for the director of the department
4of administrative services pursuant to section 8A.362B. An
5institution shall compile information regarding compliance
6with the provisions of this subsection in the same manner as
7the department of administrative services pursuant to section
88A.362C. The state board of regents shall cooperate with
9the department of administrative services in preparing the
10annual state fleet renewable fuels compliance report regarding
11compliance with this subsection as provided in section 8A.362C.
12   Sec. 77.  Section 307.21, subsection 4, Code 2021, is amended
13by striking the subsection and inserting in lieu thereof the
14following:
   154.  The administrator shall provide for the purchase and
16operation of motor vehicles powered by renewable fuel in
17the same manner required for the director of the department
18of administrative services pursuant to section 8A.362B.
19 The department of transportation shall compile information
20regarding compliance with the provisions of this subsection in
21the same manner as the department of administrative services
22pursuant to section 8A.362C. The department of transportation
23shall cooperate with the department of administrative services
24in preparing the annual state fleet renewable fuels compliance
25report regarding compliance with this subsection as provided
26in section 8A.362C.
27   Sec. 78.  Section 904.312A, subsection 1, Code 2021, is
28amended by striking the subsection and inserting in lieu
29thereof the following:
   301.  The department of corrections shall provide for the
31purchase and operation of motor vehicles powered by renewable
32fuel in the same manner required for the director of the
33department of administrative services pursuant to section
348A.362B. The department of corrections shall compile
35information regarding compliance with the provisions of
-36-1this subsection in the same manner as the department of
2administrative services pursuant to section 8A.362C. The
3department of corrections shall cooperate with the department
4of administrative services in preparing the annual state fleet
5renewable fuels compliance report regarding compliance with
6this subsection as provided in section 8A.362C.
7EXPLANATION
8The inclusion of this explanation does not constitute agreement with
9the explanation’s substance by the members of the general assembly.
   10GENERAL. This bill provides for motor fuel and specifically
11renewable fuel used to power motor vehicles, including by
12providing for standards and restrictions, infrastructure, tax
13credits, and requirements for state agencies.
   14MOTOR FUEL STANDARDS AND CLASSIFICATIONS. The bill
15provides for the regulation of motor fuel advertised for
16sale or sold to the public by a retail dealer at a retail
17motor fuel site (retail site). Motor fuel regulations are
18administered and enforced by the department of agriculture
19and land stewardship (DALS) (Code chapter 214A). The bill
20provides for two types of motor fuel, including gasoline and
21clear (undyed) diesel fuel and their respective components.
22This includes a renewable fuel which contains a biofuel. For
23gasoline, the biofuel is alcohol (ethanol) and for diesel fuel,
24the biofuel is a form of plant oil or animal fat (biofuel)
25(amended Code section 214A.1). The amount of a biofuel
26contained as part of either type of motor fuel is classified
27by percentage. Ethanol blended gasoline is classified as
28either E-xx (e.g., E-10 equaling between 9 and 10 percent
29ethanol by volume or E-85 equaling between 70 and 85 percent
30ethanol) and biodiesel blended diesel fuel is classified as
31B-xx (e.g., B-5 equaling five percent biodiesel by volume)
32(see amended Code section 214A.2). The bill distinguishes
33between standard use gasoline and special use gasoline as well
34as standard use diesel fuel and special use diesel fuel based
35on a designated classification or range of classifications. A
-37-1motor fuel designated as special use does not meet a minimum
2classification while a motor fuel designated as standard use
3does meet that classification.
   4PROHIBITIONS. A retail dealer is prohibited from
5advertising for sale or selling special use gasoline which is
6nonblended gasoline classified as E-0 unless it is premium
7grade gasoline with an octane grade of 91 or higher (amended
8Code section 214A.2 and new Code section 214A.31). Beginning
9January 1, 2028, a retail dealer is prohibited from advertising
10for sale special use gasoline classified as E-10 or higher up
11to but not including E-15 except if used to power certain types
12of engines (new Code section 214A.32). On and after January
131, 2028, a retail dealer is prohibited from advertising for
14sale or selling gasoline from more than two dispensing units
15at a retail site, unless the retail dealer advertises for sale
16standard use gasoline classified as E-15 or higher from at
17least one of those dispensing units (new Code section 214A.33).
18A retail dealer is prohibited from advertising for sale clear
19diesel fuel during the period beginning April 1 and ending
20October 31 of each year, unless it is classified as B-11 or
21higher, which is also subject to certain exceptions (e.g., an
22engine used to power an off-road vehicle) (new Code section
23214A.34).
   24The bill prohibits the false advertising of a motor fuel,
25including by designating a false classification (amended Code
26section 214A.3). It requires the labeling of motor fuel pumps
27(dispensing units) which must state whether the motor fuel
28being dispensed is a special use gasoline or special use diesel
29fuel and indicate what types of engines may be powered using
30that type and classification of motor fuel. It eliminates a
31provision that requires that a decal be placed on a dispensing
32unit notifying the traveling public that gasoline is blended
33with ethanol (repealed Code section 214A.16 and new Code
34sections 214A.35 and 214A.36).
   35ORDER FOR A WAIVER, SUSPENSION, OR EXTENSION. The bill
-38-1authorizes the governor or secretary of agriculture to issue
2an order temporarily waiving a requirement that a retail
3dealer comply with the special use requirements if there is
4credible evidence that the retail dealer has not been able to
5reasonably obtain the required classification of renewable fuel
6(new Code section 214A.41). The governor may issue an order
7suspending compliance for all retail dealers in the state or
8a geographic segment of the state if the governor determines
9there is inadequate infrastructure to store or dispense
10standard use gasoline or standard use diesel fuel or it is not
11commercially feasible for the retail dealers to obtain the
12required classification (new Code section 214A.42). Beginning
13January 1, 2028, the department of natural resources (DNR) may
14issue an order extending the period that a small retail dealer
15operating fewer than 10 retail sites must comply with the E-15
16standard use gasoline requirement based on the incompatibility
17of the infrastructure (new Code section 214A.43).
   18APPLICABLE PENALTIES AND DISCIPLINARY ACTION. A person
19who violates a provision of Code chapter 214A is guilty of
20a serious misdemeanor (Code section 214A.11). A serious
21misdemeanor is punishable by confinement for no more than one
22year and a fine of at least $430 but not more than $2,560.
23Alternatively, the state may initiate a civil proceeding
24against the person for at least $100 but not more than $1,000
25for each violation. The bill also provides that a retail
26dealer’s license issued under Code chapter 214 regulating
27weights and measures may be suspended or revoked (new Code
28section 214.2A and amended Code section 214A.11).
   29RENEWABLE FUEL INFRASTRUCTURE — FINANCING PROGRAM. The
30bill provides for the storage, blending, and dispensing of
31types of motor fuel containing a biofuel. This includes two
32programs administered by DALS providing state financing in
33the form of an award of cost-share moneys under an agreement
34executed by DALS and a participating person who is either a
35retail dealer (amended Code section 159A.14) or a biodiesel
-39-1terminal facility (Code section 159A.15). For a retail
2dealer, the program supports the installation, replacement, or
3conversion of renewable fuel compatible infrastructure at a
4retail site (amended Code section 159A.14). The moneys must
5be used to support improvements used to store biofuel, store
6and dispense a renewable fuel, or store, blend, and dispense
7a renewable fuel. The bill provides the infrastructure must
8be capable of storing and dispensing E-85 or higher or B-20
9or higher and the infrastructure must be used to store and
10dispense E-15 or to store and dispense B-20 from April 1 to
11October 31 and B-5 from November 1 to March 31. A preference is
12provided to improve existing retail sites and to small retail
13dealers. The financial incentives for biodiesel improvements
14must be awarded pursuant to a three-year cost-share agreement
15not to exceed 50 percent of the cost of the improvement or
16$30,000, whichever is less. The bill provides for how moneys
17in the renewable fuel infrastructure fund are allocated to
18support either the program for retail dealers or biodiesel
19terminal facilities (amended Code section 159A.15). The
20provisions awarding financial assistance to retail dealers to
21support biodiesel infrastructure at retail sites are eliminated
22on July 1, 2024.
   23ETHANOL INFRASTRUCTURE — REQUIREMENTS. The bill
24establishes requirements for the installation, replacement, or
25conversion of gasoline storage and dispensing infrastructure
26at retail sites. Such infrastructure must be compatible with
27E-85 in compliance with standards required by an independent
28testing laboratory or the manufacturer, and either the DNR or
29the state fire marshal (repealed Code section 455G.31 and new
30Code sections 455G.32 and 455G.33).
   31INCOME TAX CREDITS. The bill extends the expiration date
32of three renewable fuel tax programs from January 1, 2025, to
33January 1, 2028, including: (1) the E-85 gasoline promotion
34tax credit (amended Code sections 422.11O and 422.33(11B)), (2)
35the biodiesel blended fuel tax credit (Code sections 422.11P
-40-1and 422.33(11C)), and (3) the E-15 plus gasoline promotion tax
2credit (amended Code sections 422.11Y and 422.33(11D)). The
3provisions are administered and enforced by the department of
4revenue (DOR). In each case, the tax credit is calculated by
5taking the number of gallons of renewable fuel sold multiplied
6by a designated rate (rate). The rate may differ depending
7upon the time of year or its classification. Under the bill,
8for biodiesel blended fuel classified as B-11 or higher up to
9but not including B-20 during the period beginning January 1
10and ending March 31 and during the period beginning November
111 and ending December 31, the rate is 4 cents. During the
12period beginning January 1 and ending December 31, for
13biodiesel blended fuel classified as B-20 or higher up to but
14not including B-30, the rate is 6 cents. During the period
15beginning January 1 and ending December 31, for biodiesel
16blended fuel classified as B-30 or higher, the rate is 10
17cents. For ethanol blended gasoline classified as E-15 or
18higher up to but not including E-85, the rate is 4 cents.
   19MOTOR FUEL TAXES. The bill amends provisions determining
20the tax liability of a supplier or importer of motor fuel
21(amended Code section 452A.8). The bill provides a deduction
22to the extent the tax rate on gallonage withdrawn for purposes
23of blending with biofuel exceeds the rate which would be due on
24the ethanol blended gasoline or biodiesel blended fuel.
   25REPORTING REQUIREMENTS. The bill amends provisions
26requiring retail dealers to report to DOR the total number
27of gallons of motor fuel sold and dispensed at sites during
28each year, including the types and classifications of motor
29fuel (amended Code sections 452A.31 and 452A.32). Based on
30information in those reports, DOR prepares a report compiling
31that information on an aggregate basis. The bill makes changes
32in terminology and requires that the information include the
33total and aggregate number of gallons of biodiesel blended
34fuel classified as B-20 or higher up to but not including B-30
35and biodiesel blended fuel classified as B-30 or higher. The
-41-1bill provides procedures for filing a retail dealer report and
2subjects a retail dealer who fails to file a report to a civil
3penalty of not more than $100.
   4USE OF RENEWABLE FUEL BY THE STATE MOTOR VEHICLE FLEET.
5 Current law requires state and local governments to power
6motor vehicles using any classification of renewable fuel
7(E-10 or B-1). A state-issued credit card cannot be used
8to purchase motor fuel other than renewable fuel unless it
9is not commercially available or there is an emergency. The
10motor vehicle being powered by motor fuel must be affixed with
11a sticker that notifies the traveling public that the motor
12vehicle is powered using renewable fuel. The bill provides
13that a motor vehicle which is part of the state government
14fleet must be powered using the highest classification of
15renewable fuel available so long as (1) it is warranted by
16the motor vehicle’s manufacturer, (2) that classification is
17available, and (3) an emergency situation does not exist.
18The bill also requires a state entity to revise its bidding
19procedures as necessary to account for the purchase of motor
20vehicles powered by biodiesel blended fuel classified as
21B-20 or higher. The state entities involved include the
22department of administrative services (new Code sections
238A.362A, 8A.362B, and 8A.362C), the commission for the blind
24(amended Code section 216B.3), institutions governed by the
25board of regents (amended Code section 262.25A), the department
26of transportation (amended Code section 307.21), and the
27department of corrections (amended Code section 904.312A).
   28The bill requires the department of administrative services,
29in cooperation with the other entities operating motor
30vehicles, to prepare an annual report to be submitted to the
31governor and general assembly providing information regarding
32the number of state motor vehicles powered using motor fuel,
33including gasoline and diesel fuel, the number of those motor
34vehicles capable of being powered using E-15 and E-85 or B-20,
35and the number of gallons of renewable fuel purchased.
-42-
   1EFFECTIVE DATES. The provisions of the bill relating
2to motor fuel standards and classifications and associated
3prohibitions generally take effect October 1, 2021. However,
4provisions relating to rulemaking by DALS and DNR take effect
5upon enactment. The provisions relating to renewable fuel
6infrastructure take effect July 1, 2021. The provisions
7relating to gasoline fuel storage and dispensing infrastructure
8take effect October 1, 2021. The provisions relating to tax
9credits and motor fuel taxes take effect January 1, 2022.
10The provisions relating to renewable fuel use by state motor
11vehicles take effect July 1, 2021.
-43-
da/ns