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House Study Bill 594 - IntroducedA Bill ForAn Act 1relating to renewable fuels, including ethanol
2blended gasoline and biodiesel blended fuel used to power
3internal combustion engines, by providing for compliance
4requirements and promotional initiatives that relate to
5establishing classifications and standards for renewable
6fuels, advertising and selling renewable fuels, storing
7and dispensing renewable fuels, using state motor vehicles
8powered by renewable fuels, and taxes, tax credits, and tax
9refunds relating to renewable fuels; providing penalties and
10making penalties applicable; and including effective date
11and retroactive applicability provisions.
12BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2COMPLIANCE REQUIREMENTS — STANDARDS
3AND CLASSIFICATIONS FOR GASOLINE — MOTOR FUEL STORAGE
4AND DISPENSING INFRASTRUCTURE
5part a
6E-15 ACCESS STANDARD
7 Section 1. NEW SECTION. 214A.31 E-15 access standard —
8establishment.
9In order to ensure consumer access to gasoline containing
10fifteen percent ethanol by volume, an E-15 access standard is
11established in accordance with 2013 Iowa Acts, ch.127, §1,
12section 159A.1, and this subchapter.
13 Sec. 2. NEW SECTION. 214A.32 E-15 access standard — retail
14dealer compliance.
151. Except as provided in sections 214A.33 through 214A.35,
16a retail dealer owning or operating a retail motor fuel site
17shall comply with the E-15 access standard as provided in this
18section.
192. In order to comply with the E-15 access standard, a
20retail dealer must advertise for sale and sell E-15 gasoline
21from a minimum number of qualifying motor fuel dispensers
22located at the retail dealer’s retail motor fuel site. A
23qualifying motor fuel dispenser must be capable of dispensing
24gasoline at all times that it is in operation.
25a. Except as provided in paragraph “b”, a retail dealer
26shall comply with a general E-15 access standard by dispensing
27E-15 gasoline from the following:
28(1) One qualified motor fuel dispenser, if there is only one
29qualified motor fuel dispenser.
30(2) At least fifty percent of all qualified motor fuel
31dispensers, if there are more than one qualified motor fuel
32dispenser.
33b. (1) A retail dealer complies with an alternative E-15
34access standard if all of the following apply:
35(a) On and after January 1, 2023, the retail dealer does not
-1-1install, replace, or convert a motor fuel storage tank.
2(b) On and after January 1, 2026, the retail dealer
3advertises for sale and sells E-15 gasoline from at least one
4qualifying motor fuel dispenser.
5(2) A retail dealer who no longer complies with the
6alternative E-15 access standard as provided in subparagraph
7(1) shall immediately comply with the general E-15 access
8standard as provided in paragraph “a”.
9c. The E-15 access standard does not prohibit a retail
10dealer owning or operating a retail motor fuel site from
11advertising for sale and selling motor fuel from any number of
12nonqualifying motor fuel dispensers. A nonqualifying motor
13fuel dispenser is limited to any of the following:
14(1) A dispenser that exclusively dispenses any of the
15following:
16(a) Aviation fuel.
17(b) Diesel fuel.
18(c) Kerosene.
19(2) A dispenser that is part of a tank vehicle as defined
20in section 321.1 that is not used to dispense gasoline on the
21premises of the retail motor fuel site.
223. a. A retail dealer is not in violation of this section
23during any period of noncompliance with the E-15 access
24standard caused by an excusable event. An excusable event is
25limited to any of the following:
26(1) The maintenance, repair, or reconditioning of motor
27fuel storage and dispensing infrastructure.
28(2) The installation, expansion, replacement, or conversion
29of motor fuel storage and dispensing infrastructure.
30b. The department may require that a retail dealer
31notify the department that an excusable event as described
32in paragraph “a” is planned to occur, is occurring, or has
33occurred. The department may inspect the applicable retail
34motor fuel site to determine whether the noncompliance is
35caused by an excusable event.
-2- 14. a. This section shall be implemented on January 1, 2023.
2b. This subsection is repealed January 2, 2023.
3 Sec. 3. NEW SECTION. 214A.33 Suspension of E-15 access
4standard by order issued by governor.
51. The governor may issue or renew an executive order that
6temporarily suspends the requirement in section 214A.32 that a
7retail dealer comply with the E-15 access standard at a retail
8motor fuel site owned or operated by the retail dealer.
92. The E-15 access standard suspension order as described in
10subsection 1 must be supported by the governor’s determination
11that any of the following apply:
12a. There is an inadequate supply of E-15 gasoline.
13b. The market price of E-15 gasoline may cause consumers to
14suffer economic hardship.
15c. Existing motor fuel storage and dispensing infrastructure
16is not capable of storing and dispensing E-15 gasoline.
173. The governor may issue or renew an executive order under
18this section on a statewide or regional basis.
194. The E-15 access standard suspension order shall take
20effect on its date of publication in the Iowa administrative
21bulletin, unless the order specifies a later date. The order
22shall expire one year from its effective date unless a shorter
23period is stated in the order. The early expiration of the
24order may also occur based on circumstances described in the
25order.
265. a. This section shall be implemented on January 1, 2023.
27b. This subsection is repealed January 2, 2023.
28 Sec. 4. NEW SECTION. 214A.34 Waiver of E-15 access
29standard by order issued by secretary of agriculture — E-15
30unavailability.
311. The secretary of agriculture may issue an administrative
32order that temporarily waives the requirement in section
33214A.32 that a retail dealer comply with the E-15 access
34standard at a retail motor fuel site owned or operated by the
35retail dealer based on E-15 gasoline availability.
-3- 12. A retail dealer may apply for an E-15 unavailability
2waiver order as described in subsection 1 by submitting an
3application to the department in a manner and according to
4procedures required by the department.
5a. The application must be supported by credible evidence
6that the retail dealer has not been able to reasonably obtain
7E-15 gasoline to be advertised for sale and sold at the retail
8dealer’s retail motor fuel site.
9b. The retail dealer must sign the application which shall
10include a statement that the retail dealer swears and affirms
11that all information in the application completed by the retail
12dealer is true and correct.
133. The department shall publish a copy of the E-15
14unavailability waiver order on the department’s internet site
15within ten days after the order’s issuance.
164. The E-15 unavailability waiver order shall take effect
17on its date of publication on the department’s internet site,
18unless the order specifies a later date. The order shall
19expire six months from its effective date unless a shorter
20period is stated in the order. The early expiration of the
21order may also occur based on circumstances described in the
22order.
235. a. This section shall be implemented on January 1, 2023.
24b. This subsection is repealed January 2, 2023.
25 Sec. 5. NEW SECTION. 214A.35 Waiver of E-15 access standard
26by order issued by secretary of agriculture — E-15 incompatible
27infrastructure.
281. The secretary of agriculture may issue an administrative
29order that temporarily waives the requirement in section
30214A.32 that a retail dealer comply with the E-15 access
31standard at a retail motor fuel site owned or operated by the
32retail dealer based on the incompatibility of the motor fuel
33storage and dispensing infrastructure to store and dispense
34E-15 gasoline.
352. A retail dealer may apply for an E-15 incompatible
-4-1infrastructure waiver order as described in subsection 1 by
2submitting an application to the department in a manner and
3according to procedures required by the department.
4a. The application must be supported by credible evidence
5that the retail dealer is unable to comply with the E-15
6access standard because the motor fuel storage and dispensing
7infrastructure located at the retail motor fuel site is not
8compatible with the use of E-15 gasoline and that the retail
9dealer is eligible for a class 1 or class 2 waiver as provided
10in this section.
11b. The application must provide information required to
12be completed by the retail dealer, which must include an
13inventory and description of motor fuel storage and dispensing
14infrastructure located at the retail motor fuel site.
15c. The department may require a retail dealer to attach any
16supporting documentation to the application, which may include
17an inspection report completed by a person certified by the
18department as a professional retail motor fuel site installer.
19The certified professional retail motor fuel site installer
20may be a licensed engineer or other person who the department
21determines is qualified by education, testing, or experience to
22oversee a project involving the installation, replacement, or
23conversion of motor fuel storage and dispensing infrastructure,
24and who is able to provide a reliable estimate of the project’s
25costs.
26d. The department shall review and evaluate an application
27to determine whether it is supported by credible evidence
28sufficient for the secretary to issue an order granting a
29waiver under this section. The department shall approve or
30disapprove a completed application within one hundred twenty
31days following the date that the application was delivered to
32the department for filing.
33e. The retail dealer must sign the application which shall
34include a statement that the retail dealer swears and affirms
35that all information in the application completed by the retail
-5-1dealer is true and correct. If a certified professional retail
2motor fuel site installer completes an inspection report to
3support an application, the installer shall sign a statement
4that the installer swears and affirms that all information in
5the inspection report completed by the installer is true and
6correct.
7f. The department may inspect the premises of a retail
8motor fuel site during normal business hours to administer and
9enforce the provisions of this section.
10g. The department of agriculture and land stewardship
11may cooperate with the department of natural resources and
12the state fire marshal in administering and enforcing the
13provisions of this section.
143. The department shall publish a copy of the E-15
15incompatible infrastructure waiver order on the department’s
16internet site within ten days after the order’s issuance. The
17order shall take effect on its date of publication, unless the
18order specifies a later date.
194. a. The secretary of agriculture shall terminate the
20E-15 incompatible infrastructure waiver order if a terminable
21event has occurred. A terminable event is limited to any of
22the following:
23(1) The failure of a retail dealer to be licensed as
24required under section 214.2 to use a commercial weighing and
25measuring device when dispensing gasoline.
26(2) The cessation of the retail dealer’s business of
27advertising for sale or selling gasoline at the retail motor
28fuel site.
29(3) The installation, replacement, or conversion of a motor
30fuel storage tank located at the retail motor fuel site.
31b. The department may require that a retail dealer
32notify the department that a terminable event as described
33in paragraph “a” is planned to occur, is occurring, or has
34occurred.
355. a. The secretary of agriculture may issue an E-15
-6-1incompatible infrastructure class 1 waiver order. If the
2department determines an inspection of the retail motor
3fuel site is necessary, it may either conduct the inspection
4or accept an inspection report completed by a certified
5professional retail motor fuel site installer.
6b. The order must be supported by credible evidence that
7all motor fuel storage tanks used to store gasoline that are
8located at the retail motor fuel site fall within any of the
9following categories:
10(1) Each motor fuel storage tank not constructed of
11fiberglass was installed during or prior to 1985.
12(2) Each motor fuel storage tank constructed of fiberglass
13was installed during or prior to the following years:
14(a) For a double-wall fiberglass underground motor fuel
15storage tank, 1991.
16(b) For a single-wall fiberglass underground motor fuel
17storage tank, 1996.
186. The secretary of agriculture may issue an E-15
19incompatible infrastructure class 2 waiver order which shall
20be based on an inspection of the retail motor fuel site. The
21department may either conduct the inspection and complete an
22inspection report or file and review a completed inspection
23report submitted by a certified professional retail motor fuel
24site installer.
25a. The inspection report must include all of the following:
26(1) A completed checklist of items adopted as part of a form
27used by the department to confirm that the motor fuel storage
28and dispensing infrastructure located at the retail motor fuel
29site is not compatible with E-15 gasoline.
30(2) The total estimated cost of improving the retail
31motor fuel site to comply with the E-15 access standard by
32installing, replacing, or converting the motor fuel storage
33and dispensing infrastructure located at the retail motor fuel
34site.
35b. (1) The department shall determine whether to issue an
-7-1E-15 incompatible infrastructure class 2 waiver order based
2on an eligibility assessment which shall calculate all of the
3following:
4(a) The total estimated cost of improvement which equals the
5total estimated cost of improving the retail motor fuel site to
6comply with the E-15 access standard based on the department’s
7analysis of the inspection report described in paragraph “a”.
8The total estimated cost of improvement shall only include
9costs used to calculate the amount of financial incentives
10that may be awarded by the renewable fuel infrastructure
11board to a retail dealer participating in the renewable fuel
12infrastructure program for retail motor fuel sites as provided
13in section 159A.14.
14(b) The E-15 infrastructure base amount which equals the
15maximum cost necessary to be incurred by the retail dealer
16in order to receive the total amount of standard financial
17incentives that could be awarded to the retail dealer under the
18renewable fuel infrastructure program for retail motor fuel
19sites as provided in section 159A.14 in order to comply with
20the E-15 access standard. The department’s calculation shall
21not include any of the following:
22(i) The amount of any prior financial incentives awarded
23to the retail dealer under the renewable fuel infrastructure
24program for retail motor fuel sites.
25(ii) Whether the retail dealer is applying for or may be
26awarded any future financial incentives under the renewable
27fuel infrastructure program for retail motor fuel sites.
28(2) A retail dealer is only eligible to be issued an
29E-15 incompatible infrastructure class 2 waiver order if
30the department determines that the total estimated cost of
31improvement as described in subparagraph (1), subparagraph
32division (a), exceeds the E-15 infrastructure base amount as
33described in subparagraph (1), subparagraph division (b).
347. a. This section shall be implemented on January 1, 2023.
35b. This subsection is repealed January 2, 2023.
-8- 18. This section is repealed January 1, 2041.
2 Sec. 6. NEW SECTION. 214A.36 Disciplinary action.
31. The department may refuse to issue or renew and may
4suspend or revoke a license issued to a retail dealer pursuant
5to section 214.2 for not complying with the E-15 access
6standard as provided in section 214A.32, including rules
7adopted by the department pursuant to section 214A.1A to
8administer or enforce that section.
92. a. This section shall be implemented on January 1, 2023.
10b. This subsection is repealed January 2, 2023.
11 Sec. 7. ISSUANCE OF ORDERS SUSPENDING OR WAIVING E-15 ACCESS
12STANDARD.
131. The governor may issue an E-15 access standard suspension
14order as provided in section 214A.33, as enacted in this part
15of this division of this Act, prior to January 1, 2023, if the
16governor determines it is necessary to issue the order prior
17to that date.
182. The secretary of agriculture may issue an E-15
19unavailability waiver order as provided in section 214A.34, as
20enacted in this part of this division of this Act, prior to
21January 1, 2023, if the secretary determines it is necessary to
22issue the order prior to that date.
233. The secretary of agriculture may issue an E-15
24incompatible infrastructure waiver order as provided in section
25214A.35, as enacted in this part of this division of this Act,
26prior to January 1, 2023, if the secretary determines it is
27necessary to issue the order prior to that date.
28 Sec. 8. ADOPTION OF RULES IMPLEMENTING E-15 ACCESS STANDARD
29AND E-15 INCOMPATIBLE INFRASTRUCTURE WAIVER ORDER.
301. The department of agriculture and land stewardship
31shall adopt rules pursuant to chapter 17A prior to January 1,
322023, as necessary to administer and enforce the E-15 access
33standard, as provided in section 214A.32, as enacted in this
34part of this division of this Act.
352. The department of agriculture and land stewardship shall
-9-1adopt rules pursuant to chapter 17A prior to January 1, 2023,
2as necessary to administer and enforce an E-15 incompatible
3infrastructure waiver order, as provided in section 214A.35, as
4enacted in this part of this division of this Act.
5PART B
6RELATED RENEWABLE FUELS AND INFRASTRUCTURE PROVISIONS
7 Sec. 9. Section 159A.6, subsection 1, paragraph c, Code
82022, is amended by striking the paragraph.
9 Sec. 10. Section 214.1, Code 2022, is amended by adding the
10following new subsections:
11 NEW SUBSECTION. 1A. “Department” means the department of
12agriculture and land stewardship.
13 NEW SUBSECTION. 1B. “E-15 gasoline” or “E-15” means the
14same as defined in section 214A.1.
15 NEW SUBSECTION. 3A. “Motor fuel dispenser” or “dispenser”
16means equipment that is the part of motor fuel storage
17and dispensing infrastructure that includes mechanical or
18electrical systems that operate a motor fuel pump dispensing
19motor fuel from a motor fuel storage tank to the end point of
20the equipment’s nozzle.
21 NEW SUBSECTION. 4A. a. “Motor fuel storage and dispensing
22infrastructure” or “infrastructure” means equipment used to do
23any of the following:
24(1) Store and dispense motor fuel.
25(2) Store, blend, and dispense motor fuel.
26b. “Motor fuel storage and dispensing infrastructure” or
27“infrastructure” includes but is not limited to a motor fuel
28storage tank, motor fuel pump or motor fuel blender pump, motor
29fuel dispenser, and associated pipes, hoses, nozzles, tubes,
30lines, fittings, valves, filters, seals, and covers.
31 Sec. 11. Section 214.1, subsections 3, 4, and 5, Code 2022,
32are amended to read as follows:
333. “Motor fuel blender pump” or “blender pump” means a motor
34fuel meter pump that measures and dispenses a type of motor
35fuel that is blended from to formulate two or more different
-10-1types classifications of that motor fuels and which may
2dispense more than one type of blended motor fuel.
34. “Motor fuel pump” means the part of motor fuel storage
4and dispensing infrastructure that is a meter or similar
5commercial weighing and measuring device used to measure and
6dispense motor fuel originating from a motor fuel storage tank,
7on a retail basis.
85. “Motor fuel storage tank” or “storage tank” means the part
9of motor fuel storage and dispensing infrastructure that is an
10aboveground or belowground container that is constituting a
11fixture used to store an accumulation of motor fuel.
12 Sec. 12. Section 214.9, Code 2022, is amended to read as
13follows:
14214.9 Self-service motor fuel pumps dispensers.
15A self-service motor fuel dispenser operating a motor fuel
16 pump located at a retail motor fuel site may be equipped with
17an automatic latch-open device on the fuel dispensing hose
18nozzle only if the nozzle valve is the automatic closing type.
19 Sec. 13. NEW SECTION. 214.12 Inspections of motor fuel
20dispensers — E-15 access standard.
211. In conducting an inspection under section 214.11, an
22inspector for the department shall determine if a retail dealer
23is advertising for sale and selling E-15 gasoline at a retail
24motor fuel site in compliance with the E-15 access standard as
25provided in section 214A.32.
262. a. This section shall be implemented on January 1, 2023.
27b. This subsection is repealed January 2, 2023.
28 Sec. 14. Section 214A.1, Code 2022, is amended by adding the
29following new subsections:
30 NEW SUBSECTION. 2A. “B-20 biodiesel fuel” or “B-20” means
31a classification of biodiesel blended fuel formulated with a
32percentage of twenty percent by volume of biodiesel, if the
33formulation meets the standards provided in section 214A.2.
34 NEW SUBSECTION. 12A. “E-15 gasoline” or “E-15” means a
35classification of ethanol blended gasoline formulated with a
-11-1percentage of fifteen percent by volume of ethanol, if the
2formulation meets the standards provided in section 214A.2.
3 NEW SUBSECTION. 18A. “Motor fuel dispenser” or “dispenser”
4means the same as defined in section 214.1.
5 NEW SUBSECTION. 19A. “Motor fuel storage and dispensing
6infrastructure” or “infrastructure” means the same as defined
7in section 214.1.
8 Sec. 15. NEW SECTION. 214A.1A Rules.
9The department shall adopt rules necessary to administer and
10enforce this chapter in conjunction with chapter 214.
11 Sec. 16. Section 214A.2, subsection 1, Code 2022, is amended
12to read as follows:
131. The department shall adopt rules pursuant to chapter
1417A for carrying out this chapter. The rules may include but
15are not limited to specifications section 214A.1A relating
16to standards and classifications for types of motor fuel,
17including but not limited to gasoline and diesel fuel. The
18rules shall provide standards and classifications for a
19 renewable fuel such as ethanol blended gasoline, biobutanol
20blended gasoline, biodiesel, biodiesel blended fuel, and
21motor renewable fuel components such as an a biofuel or other
22 oxygenate. In the interest of uniformity, the department shall
23adopt by reference other specifications standards relating to
24tests and standards specifications for types of motor fuel,
25including renewable fuel and motor fuel components, established
26by the United States environmental protection agency and
27A.S.T.M. international.
28 Sec. 17. Section 214A.2, subsection 4, paragraph b, Code
292022, is amended by adding the following new subparagraph:
30 NEW SUBPARAGRAPH. (5) (a) Biodiesel blended fuel
31classified as higher than B-20 must conform to standards
32adopted by the department.
33(b) The rules adopted by the department of agriculture
34and land stewardship establishing standards for biodiesel
35blended fuel classified as higher than B-20 shall take effect
-12-1not earlier than sixty days after the date of filing in
2accordance with section 17A.5, subsection 2, paragraph “a”. The
3department of agriculture and land stewardship shall notify
4the legislative services agency, the governor, the department
5of natural resources, and the department of revenue of the
6effective date of the rules at least thirty days prior to the
7effective date of the rules.
8 Sec. 18. Section 214A.3, subsection 2, paragraph b,
9subparagraph (1), Code 2022, is amended by striking the
10subparagraph and inserting in lieu thereof the following:
11(1) A person shall not knowingly falsely advertise ethanol
12blended gasoline by using an inaccurate classification as
13provided in section 214A.2.
14 Sec. 19. Section 214A.3, subsection 2, paragraph b,
15subparagraphs (2) and (3), Code 2022, are amended to read as
16follows:
17(2) A person shall not knowingly falsely advertise
18biobutanol blended gasoline by using an inaccurate designation
19 classification as provided in section 214A.2.
20(3) A person shall not knowingly falsely advertise
21biodiesel blended fuel by using an inaccurate designation
22 classification as provided in section 214A.2.
23 Sec. 20. Section 214A.8, Code 2022, is amended to read as
24follows:
25214A.8 Prohibition.
26A dealer shall not knowingly sell motor fuel or biofuel
27in the state that fails to meet applicable standards and
28classifications as provided in section 214A.2.
29 Sec. 21. Section 214A.11, subsection 2, Code 2022, is
30amended by adding the following new paragraphs:
31 NEW PARAGRAPH. c. (1) A retail dealer who submits an
32application for an E-15 unavailability waiver order under
33section 214A.34 that includes information that is not true and
34correct commits perjury as provided in section 720.2.
35(2) (a) This paragraph “c” shall be implemented on January
-13-11, 2023.
2(b) This subparagraph is repealed January 2, 2023.
3 NEW PARAGRAPH. d. (1) A retail dealer who submits an
4application for an E-15 incompatible infrastructure waiver
5order under section 214A.35 that is not true and correct
6commits perjury as provided in section 720.2.
7(2) A certified professional retail motor fuel site
8installer who submits an inspection report as part of an
9application for an E-15 incompatible infrastructure waiver
10order under section 214A.35 that is not true and correct
11commits perjury under section 720.2.
12(3) (a) This paragraph “d” shall be implemented on January
131, 2023.
14(b) This subparagraph is repealed on January 2, 2023.
15 Sec. 22. Section 214A.20, Code 2022, is amended to read as
16follows:
17214A.20 Limitation on liability.
181. A retail dealer or other marketer, pipeline company,
19refiner, terminal operator, or terminal owner is not liable for
20damages caused by the use of incompatible motor fuel dispensed
21from a motor fuel dispenser located at the retail dealer’s
22retail motor fuel site, if all of the following apply:
23a. The incompatible motor fuel complies with the
24specifications standards for a that type and classification of
25motor fuel as provided in section 214A.2.
26b. The incompatible motor fuel is selected by the end use
27 consumer of the motor fuel.
28c. The incompatible motor fuel is dispensed from a motor
29fuel pump dispenser that correctly labels the type and
30classification of fuel dispensed from a motor fuel storage
31tank.
322. For purposes of this section subsection 1, a motor fuel
33is incompatible with a motor according to the manufacturer of
34the motor.
35 Sec. 23. REPEAL. Section 214A.16, Code 2022, is repealed.
-14-1PART C
2CODE ORGANIZATION
3 Sec. 24. DIRECTIONS TO THE CODE EDITOR — TRANSFERS.
41. The Code editor is directed to make the following
5transfers:
6a. Section 214A.3, as amended in this division of this Act,
7to section 214A.21.
8b. Section 214A.7 to section 214A.22.
9c. Section 214A.8, as amended in this division of this Act,
10to section 214A.23.
11d. Section 214A.19 to section 214A.24.
12e. Section 214A.20, as amended in this division of this Act,
13to section 214A.25.
142. The Code editor shall correct internal references in the
15Code and in any enacted legislation as necessary due to the
16enactment of this section.
17 Sec. 25. DIRECTIONS TO THE CODE EDITOR — SUBCHAPTERS. The
18Code editor is directed to divide the provisions of chapter
19214A, as amended, enacted, or transferred in this division of
20this Act, into subchapters as follows:
211. Subchapter I, including sections 214A.1 through 214A.20.
222. Subchapter II, including sections 214A.21 through
23214A.30.
243. Subchapter III, including sections 214A.31 through
25214A.36.
26DIVISION II
27COMPLIANCE REQUIREMENTS — RENEWABLE FUEL infrastructure
28PART A
29principAL provisions
30 Sec. 26. NEW SECTION. 455G.2A Standards and classifications
31of motor fuel.
32For purposes of this chapter, motor fuel must meet the
33standards and classifications as provided in section 214A.2.
34 Sec. 27. NEW SECTION. 455G.30 Definitions.
35As used in this subchapter, unless the context otherwise
-15-1requires:
21. “Biodiesel blended fuel” means the same as defined in
3section 214A.1
42. “Department” means the department of natural resources.
53. “Diesel fuel” means the same as defined in section
6214A.1.
74. “Diesel fuel storage and dispensing infrastructure” or
8“diesel infrastructure” means motor fuel storage and dispensing
9infrastructure as defined in section 214.1 used to store and
10dispense diesel fuel, including biodiesel blended diesel fuel,
11at a retail motor fuel site as defined in section 214A.1.
125. “Ethanol blended gasoline” means the same as defined in
13section 214A.1.
146. “Gasoline storage and dispensing infrastructure”
15or “gasoline infrastructure” means motor fuel storage and
16dispensing infrastructure as defined in section 214.1 used
17to store and dispense gasoline, including ethanol blended
18gasoline, at a retail motor fuel site as defined in section
19214A.1.
207. “Retail dealer” means the same as defined in section
21214A.1.
22 Sec. 28. Section 455G.31, subsections 1 and 3, Code 2022,
23are amended by striking the subsections.
24 Sec. 29. Section 455G.31, subsection 2, Code 2022, is
25amended to read as follows:
262. A Subject to section 455G.32, a retail dealer may
27use gasoline storage and dispensing infrastructure to store
28and dispense ethanol blended gasoline classified as E-9
29 E-10 or higher if the department of natural resources under
30this subchapter or the state fire marshal under chapter 101
31determines that it the gasoline infrastructure is compatible
32with the classification of ethanol blended gasoline being used.
33 Sec. 30. NEW SECTION. 455G.32 E-85 gasoline compatible
34infrastructure — compliance requirement.
351. A retail dealer shall not install, replace, or convert
-16-1gasoline storage and dispensing infrastructure unless the
2installed, replaced, or converted gasoline infrastructure is
3capable of storing and dispensing ethanol blended gasoline
4classified as E-85.
52. The infrastructure must be all of the following:
6a. Listed as compatible for use with ethanol blended
7gasoline classified as E-85 by an independent testing
8laboratory or as approved by the manufacturer.
9b. Approved by the department or state fire marshal subject
10to conditions determined necessary by the department or state
11fire marshal. The department or state fire marshal may waive
12the requirement in paragraph “a” upon satisfaction that a
13substitute requirement serves the same purpose.
14 Sec. 31. NEW SECTION. 455G.33 B-20 diesel fuel compatible
15infrastructure — compliance requirement.
161. A retail dealer shall not install, replace, or convert
17diesel fuel storage and dispensing infrastructure unless the
18installed, replaced, or converted diesel fuel infrastructure
19is capable of storing and dispensing biodiesel blended fuel
20classified as B-20 or higher.
212. The infrastructure must be all of the following:
22a. Listed as compatible for use with biodiesel blended
23fuel classified as B-20 or higher by an independent testing
24laboratory or as approved by the manufacturer.
25b. Approved by the department or state fire marshal subject
26to conditions determined necessary by the department or state
27fire marshal. The department or state fire marshal may waive
28the requirement in paragraph “a” upon satisfaction that a
29substitute requirement serves the same purpose.
30 Sec. 32. EFFECTIVE DATE. This part of this division of this
31Act takes effect January 1, 2023.
32PART B
33IMPLEMENTATION
34 Sec. 33. ADMINISTRATIVE RULES. The department of natural
35resources and the state fire marshal may adopt rules under
-17-1chapter 17A prior to the effective date of part A of this
2division of this Act, which rules shall take effect January 1,
32023.
4DIVISION III
5COMPLIANCE REQUIREMENTS — Qualified RENEWABLE FUEL USE BY
6STATE MOTOR VEHICLES
7 Sec. 34. NEW SECTION. 8A.360 Special definitions.
8As used in this part, unless the context otherwise requires:
91. “Biodiesel blended fuel” means the same as defined in
10section 214A.1.
112. “Biofuel” means the same as defined in section 214A.1.
123. “Determination period” means any twelve-month period
13beginning January 1 and ending December 31.
144. “Ethanol blended gasoline” means the same as defined in
15section 214A.1.
165. “Qualified renewable fuel” means ethanol blended
17gasoline or biodiesel blended fuel that meets the standards
18and classifications for that type of motor fuel as provided in
19section 214A.2.
20 Sec. 35. NEW SECTION. 8A.360A Classification of qualified
21renewable fuels.
22For purposes of this part, a qualified renewable fuel must
23meet the same standards and classifications as provided in
24section 214A.2.
25 Sec. 36. Section 8A.362, subsection 3, paragraph b, Code
262022, is amended by striking the paragraph and inserting in
27lieu thereof the following:
28b. The director shall provide for the purchase and operation
29of motor vehicles using qualified renewable fuels and for the
30purchase of qualified renewable fuels used to operate those
31motor vehicles as provided in section 8A.368.
32 Sec. 37. NEW SECTION. 8A.368 Motor vehicle purchases —
33qualified renewable fuels.
341. A motor vehicle operating using an internal combustion
35engine powered by gasoline or diesel fuel as described in
-18-1section 8A.362 shall use the highest possible classification of
2a qualified renewable fuel if all of the following apply:
3a. The manufacturer of the motor vehicle or the United
4States environmental protection agency expressly states that
5the classification of a qualified renewable fuel is compatible
6with the motor vehicle’s normal operation.
7b. That classification of a qualified renewable fuel is
8commercially available in the region where the motor vehicle
9is being operated.
10c. No emergency situation exists that requires the immediate
11use of a motor fuel regardless of whether it has been blended
12with a biofuel.
132. If the highest possible classification of a qualified
14renewable fuel is available to power an engine used to operate
15a motor vehicle as provided in subsection 1, a state-issued
16credit card shall not be used to purchase motor fuel other than
17that classification of a qualified renewable fuel.
183. A motor vehicle subject to this section shall be affixed
19with a brightly colored, highly visible renewable fuel sticker.
20The qualified renewable fuel sticker shall be designed by
21the department of agriculture and land stewardship to notify
22the traveling public that the motor vehicle is operating
23using an internal combustion engine powered by the highest
24possible classification of that qualified renewable fuel. The
25department of administrative services shall distribute the
26stickers to state agencies maintaining a state motor pool.
27However, a qualified renewable fuel sticker is not required to
28be affixed to an unmarked motor vehicle used for purposes of
29providing law enforcement or security.
304. As part of the department’s competitive bidding
31procedure for the purchase of a motor vehicle operating using
32an internal combustion engine powered by diesel fuel, the
33director shall require a bidder to certify that the motor
34vehicle’s manufacturer expressly states that the engine is
35capable of being powered by biodiesel blended fuel classified
-19-1as B-20 or higher.
2 Sec. 38. NEW SECTION. 8A.369 Motor vehicle purchases —
3qualified renewable fuels — reports.
41. The department shall compile information regarding the
5department’s compliance with section 8A.368 during the previous
6determination period. The information shall include all of the
7following:
8a. Of the motor vehicles used to routinely travel on the
9state’s highways that operate using internal combustion engines
10powered by gasoline, all of the following:
11(1) The total number of such motor vehicles according to
12model year.
13(2) The total number of such motor vehicles according
14to model year that are capable of operating using internal
15combustion engines powered by ethanol blended gasoline
16classified as E-15 and E-85 according to the express warranty
17of the motor vehicle’s manufacturer.
18(3) The total number of gallons of ethanol blended gasoline
19classified as E-15, and the total number of gallons of ethanol
20blended gasoline classified as E-85, purchased during the
21preceding determination period, to the extent such information
22may be practically obtained.
23b. Of the motor vehicles used to routinely travel on the
24state’s highways that operate using internal combustion engines
25powered by diesel fuel, all of the following:
26(1) The total number of such motor vehicles according to
27model year.
28(2) The total number of such motor vehicles according
29to model year that are capable of operating using internal
30combustion engines powered by biodiesel blended fuel classified
31as B-20 or higher according to the express warranty of the
32motor vehicle’s manufacturer.
33(3) The total number of gallons of biodiesel blended fuel
34classified as B-20 or higher purchased during the preceding
35determination period, to the extent such information may be
-20-1practically obtained.
22. The department of administrative services shall
3prepare a state fleet qualified renewable fuels compliance
4report which shall consolidate information compiled by the
5department under subsection 1 together with information
6compiled by the commission for the blind pursuant to section
7216B.3, institutions governed by the state board of regents
8pursuant to section 262.25A, the department of transportation
9pursuant to section 307.21, and the department of corrections
10pursuant to section 904.312A. The department of administrative
11services shall submit the state fleet qualified renewable fuels
12compliance report to the governor and general assembly not
13later than March 1 of each year.
14 Sec. 39. Section 216B.3, subsection 16, paragraph a, Code
152022, is amended by striking the paragraph and inserting in
16lieu thereof the following:
17a. Provide for the purchase of qualified renewable fuels
18to power internal combustion engines that are used to operate
19motor vehicles and for the purchase of motor vehicles operating
20using engines powered by qualified renewable fuels in the
21same manner required for the director of the department of
22administrative services pursuant to section 8A.368. The
23commission shall compile information regarding compliance
24with the provisions of this paragraph in the same manner as
25the department of administrative services pursuant to section
268A.369. The commission shall cooperate with the department
27of administrative services in preparing the annual state
28fleet qualified renewable fuels compliance report regarding
29compliance with this paragraph as provided in section 8A.369.
30 Sec. 40. Section 262.25A, subsection 2, Code 2022, is
31amended by striking the subsection and inserting in lieu
32thereof the following:
332. An institution shall provide for the purchase of
34qualified renewable fuels to power internal combustion engines
35that are used to operate motor vehicles and for the purchase
-21-1of motor vehicles operating using engines powered by qualified
2renewable fuels in the same manner required for the director of
3the department of administrative services pursuant to section
48A.368. An institution shall compile information regarding
5compliance with the provisions of this subsection in the same
6manner as the department of administrative services pursuant
7to section 8A.369. The state board of regents shall cooperate
8with the department of administrative services in preparing
9the annual state fleet qualified renewable fuels compliance
10report regarding compliance with this subsection as provided
11in section 8A.369.
12 Sec. 41. Section 307.21, subsection 4, Code 2022, is amended
13by striking the subsection and inserting in lieu thereof the
14following:
154. The administrator shall provide for the purchase
16of qualified renewable fuels to power internal combustion
17engines that are used to operate motor vehicles and for the
18purchase of motor vehicles operating using engines powered
19by qualified renewable fuels in the same manner required for
20the director of the department of administrative services
21pursuant to section 8A.368. The department of transportation
22shall compile information regarding compliance with the
23provisions of this subsection in the same manner as the
24department of administrative services pursuant to section
258A.369. The department of transportation shall cooperate
26with the department of administrative services in preparing
27the annual state fleet qualified renewable fuels compliance
28report regarding compliance with this subsection as provided
29in section 8A.369.
30 Sec. 42. Section 904.312A, subsection 1, Code 2022, is
31amended by striking the subsection and inserting in lieu
32thereof the following:
331. The department of corrections shall provide for the
34purchase of qualified renewable fuels to power internal
35combustion engines that are used to operate motor vehicles and
-22-1for the purchase of motor vehicles operating using engines
2powered by qualified renewable fuels in the same manner
3required for the director of the department of administrative
4services pursuant to section 8A.368. The department of
5corrections 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.369. The department of corrections shall cooperate with
9the department of administrative services in preparing the
10annual state fleet qualified renewable fuels compliance report
11regarding compliance with this subsection as provided in
12section 8A.369.
13 Sec. 43. STATE FLEET QUALIFIED RENEWABLE FUELS COMPLIANCE
14REPORT. The department of administrative services shall submit
15its first state fleet qualified renewable fuels compliance
16report as required pursuant to section 8A.369, as enacted in
17this division of this Act, not later than July 1, 2023.
18DIVISION IV
19RENEWABLE FUEL STANDARDS AND
20CLASSIFICATIONS — PROMOTIONAL INITIATIVES APPLIED
21TO INCOME TAXES
22PART A
23E-85 GASOLINE PROMOTION TAX CREDIT
24 Sec. 44. Section 422.11O, subsection 2, paragraph b, Code
252022, is amended to read as follows:
26b. The tax credit shall apply to E-85 gasoline that meets
27the standards for that classification as provided in section
28214A.2.
29 Sec. 45. Section 422.11O, subsection 5, Code 2022, is
30amended to read as follows:
315. a. A retail dealer is eligible to claim an E-85 gasoline
32promotion tax credit as provided in this section even though
33the retail dealer claims an E-15 plus gasoline promotion tax
34credit pursuant to section 422.11Y for the same tax year.
35b. This subsection is repealed January 1, 2026.
-23-1 Sec. 46. Section 422.11O, subsection 8, Code 2022, is
2amended to read as follows:
38. This section is repealed on January 1, 2025 2028.
4 Sec. 47. Section 422.33, subsection 11B, paragraph c, Code
52022, is amended to read as follows:
6c. This subsection is repealed on January 1, 2025 2028.
7 Sec. 48. 2006 Iowa Acts, chapter 1142, section 49,
8subsection 3, as amended by 2011 Iowa Acts, chapter 113,
9section 20, and 2016 Iowa Acts, chapter 1106, section 6, is
10amended to read as follows:
113. For a retail dealer who may claim an E-85 gasoline
12promotion tax credit under section 422.11O or 422.33,
13subsection 11B, as enacted in this Act and amended in
14subsequent Acts, in calendar year 2024 2027 and whose tax
15year ends prior to December 31, 2024 2027, the retail dealer
16may continue to claim the tax credit in the retail dealer’s
17following tax year. In that case, the tax credit shall be
18calculated in the same manner as provided in section 422.11O
19or 422.33, subsection 11B, as enacted in this Act and amended
20in subsequent Acts, for the remaining period beginning on the
21first day of the retail dealer’s new tax year until December
2231, 2024 2027. For that remaining period, the tax credit shall
23be calculated in the same manner as a retail dealer whose tax
24year began on the previous January 1 and who is calculating the
25tax credit on December 31, 2024 2027.
26PART B
27BIODIESEL BLENDED FUEL TAX CREDIT
28 Sec. 49. Section 422.11P, subsection 3, paragraph b, Code
292022, is amended to read as follows:
30b. The tax credit shall apply to biodiesel blended fuel
31classified as provided in this section, if the classification
32meets the standards provided in section 214A.2. In ensuring
33that biodiesel blended fuel meets the classification
34requirements of this section, the department shall take
35into account reasonable variances due to testing and other
-24-1limitations. The department shall adopt rules to provide that
2where a blending error occurs and an insufficient amount of
3biodiesel has inadvertently been blended with petroleum-based
4diesel fuel so that the mixture fails to qualify as B-11 or
5higher a one percent tolerance applies when classifying the
6biodiesel blended fuel.
7 Sec. 50. Section 422.11P, subsection 4, Code 2022, is
8amended by striking the subsection and inserting in lieu
9thereof the following:
104. A retail dealer whose tax year is on a calendar
11year basis shall calculate the amount of the tax credit by
12multiplying a designated rate by the retail dealer’s total
13biodiesel blended fuel gallonage as provided in section 452A.31
14which qualifies under this subsection.
15a. In order to qualify for the tax credit, the biodiesel
16blended fuel must be classified as B-11 or higher as provided
17in paragraph “b”.
18b. The designated rate is determined as follows:
19(1) For biodiesel blended fuel classified as B-11 or higher
20but not as high as B-20, the designated rate is five cents.
21(2) For biodiesel blended fuel classified as B-20 or higher
22but not as high as B-30, the designated rate is seven cents.
23However, a classification higher than B-20 does not qualify
24for a tax credit under this subparagraph unless standards for
25that classification have been established by the department of
26agriculture and land stewardship pursuant to section 214A.2.
27(3) For biodiesel blended fuel classified as B-30 or
28higher, the designated rate is ten cents. A classification of
29B-30 or higher does not qualify for a tax credit under this
30subparagraph unless standards for that classification have
31been established by the department of agriculture and land
32stewardship pursuant to section 214A.2.
33 Sec. 51. Section 422.11P, subsection 8, Code 2022, is
34amended to read as follows:
358. This section is repealed January 1, 2025 2028.
-25-1 Sec. 52. Section 422.33, subsection 11C, paragraph c, Code
22022, is amended to read as follows:
3c. This subsection is repealed on January 1, 2025 2028.
4 Sec. 53. 2011 Iowa Acts, chapter 113, section 31, as amended
5by 2016 Iowa Acts, chapter 1106, section 10, is amended to read
6as follows:
7SEC. 31. TAX CREDIT AVAILABILITY. For a retail dealer
8who may claim a biodiesel blended fuel promotion tax credit
9under section 422.11P or 422.33, subsection 11C, as amended
10in this Act and amended in subsequent Acts, in calendar year
112024 2027, and whose tax year ends prior to December 31, 2024
12 2027, the retail dealer may continue to claim the tax credit in
13the retail dealer’s following tax year. In that case, the tax
14credit shall be calculated in the same manner as provided in
15section 422.11P or 422.33, subsection 11C, as amended in this
16Act and amended in subsequent Acts, for the remaining period
17beginning on the first day of the retail dealer’s new tax year
18until December 31, 2024 2027. For that remaining period, the
19tax credit shall be calculated in the same manner as a retail
20dealer whose tax year began on the previous January 1 and who
21is calculating the tax credit on December 31, 2024 2027.
22 Sec. 54. EFFECTIVE DATE. This part of this division of this
23Act takes effect January 1, 2023.
24PART C
25E-15 PLUS GASOLINE PROMOTION TAX CREDIT
26 Sec. 55. Section 422.11Y, subsection 4, Code 2022, is
27amended by striking the subsection and inserting in lieu
28thereof the following:
294. A retail dealer whose tax year is on a calendar
30year basis shall calculate the amount of the tax credit by
31multiplying a designated rate by the retail dealer’s total
32ethanol blended gasoline gallonage as provided in section
33452A.31 which qualifies under this subsection.
34a. In order to qualify for the tax credit, the ethanol
35blended gasoline must be classified as E-15 or higher but must
-26-1not be E-85 gasoline.
2b. The designated rate of the tax credit is nine cents.
3 Sec. 56. Section 422.11Y, subsection 9, Code 2022, is
4amended to read as follows:
59. This section is repealed on January 1, 2025 2026.
6 Sec. 57. Section 422.33, subsection 11D, paragraph c, Code
72022, is amended to read as follows:
8c. This subsection is repealed on January 1, 2025 2026.
9 Sec. 58. 2011 Iowa Acts, chapter 113, section 37, as amended
10by 2016 Iowa Acts, chapter 1106, section 3, is amended to read
11as follows:
12SEC. 37. TAX CREDIT AVAILABILITY. For a retail dealer who
13may claim an E-15 plus gasoline promotion tax credit under
14section 422.11Y or 422.33, subsection 11D, as enacted in this
15Act and amended in subsequent Acts, in calendar year 2024
16 2025, and whose tax year ends prior to December 31, 2024 2025,
17the retail dealer may continue to claim the tax credit in the
18retail dealer’s following tax year. In that case, the tax
19credit shall be calculated in the same manner as provided in
20section 422.11Y or 422.33, subsection 11D, as enacted in this
21Act and amended in subsequent Acts, for the remaining period
22beginning on the first day of the retail dealer’s new tax year
23until December 31, 2024 2025. For that remaining period, the
24tax credit shall be calculated in the same manner as a retail
25dealer whose tax year began on the previous January 1 and who
26is calculating the tax credit on December 31, 2024 2025.
27 Sec. 59. EFFECTIVE DATE. This part of this division of this
28Act takes effect January 1, 2023.
29PART D
30ADMINISTRATION
31 Sec. 60. ADMINISTRATIVE RULES. The department of revenue
32may adopt rules under chapter 17A prior to the effective date
33of parts B and C of this division of this Act, which rules shall
34take effect January 1, 2023.
35DIVISION V
-27-1RENEWABLE FUEL STANDARDS
2AND CLASSIFICATIONS — PROMOTIONAL INITIATIVES APPLIED
3TO EXCISE TAX ON ETHANOL BLENDED GASOLINE AND BIODIESEL BLENDED
4FUEL
5PART A
6REPORTING REQUIREMENTS
7 Sec. 61. Section 452A.2, Code 2022, is amended by adding the
8following new subsection:
9 NEW SUBSECTION. 37A. “Renewable fuel” means the same as
10defined in section 214A.1.
11 Sec. 62. NEW SECTION. 452A.2A Standards and classifications
12of fuel.
13For purposes of this chapter, motor fuel, including
14a renewable fuel, must meet the same standards and
15classifications as provided in section 214A.2.
16 Sec. 63. Section 452A.31, subsection 2, paragraph a,
17subparagraph (1), subparagraph division (c), Code 2022, is
18amended to read as follows:
19(c) The total E-15 plus gasoline gallonage which is the
20total number of gallons of ethanol blended gasoline classified
21as E-15 or higher, including E-85 gasoline.
22 Sec. 64. Section 452A.31, subsection 2, paragraph a,
23subparagraph (1), Code 2022, is amended by adding the following
24new subparagraph division:
25 NEW SUBPARAGRAPH DIVISION. (d) The total E-15 gasoline
26gallonage which is the total number of gallons of ethanol
27blended gasoline classified as E-15.
28 Sec. 65. Section 452A.31, subsection 3, paragraph a, Code
292022, is amended to read as follows:
30a. A retail dealer’s total diesel fuel gallonage is the
31total number of gallons of diesel fuel which the retail dealer
32sells and dispenses from all motor fuel pumps operated by
33the retail dealer in this state during a twelve-month period
34beginning January 1 and ending December 31. The retail
35dealer’s total diesel fuel gallonage is divided into the
-28-1following classifications:
2(1) The total biodiesel blended fuel gallonage which is
3the retail dealer’s total number of gallons of biodiesel
4blended fuel. and which includes all of the following
5subclassifications:
6(a) The total B-5 plus gallonage which is the total number
7of gallons of biodiesel blended fuel classified as B-5 or
8higher up to but not including B-11.
9(2) (b) The total B-11 plus gallonage which is the total
10number of gallons of biodiesel blended fuel classified as B-11
11or higher up to but not including B-20.
12(c) The total B-20 plus gallonage which is the total number
13of gallons of biodiesel blended fuel classified as B-20 or
14higher up to but not including B-30.
15(d) The total B-30 plus gallonage which is the total number
16of gallons of biodiesel blended fuel classified as B-30 or
17higher.
18(3) (2) The total nonblended diesel fuel gallonage which
19is the total number of gallons of diesel fuel which is not
20biodiesel or biodiesel blended fuel.
21 Sec. 66. Section 452A.31, subsection 4, paragraph a,
22subparagraph (1), subparagraph division (c), Code 2022, is
23amended to read as follows:
24(c) The aggregate E-15 plus gasoline gallonage which is the
25aggregate total number of gallons of ethanol blended gasoline
26classified as E-15 or higher, including E-85 gasoline.
27 Sec. 67. Section 452A.31, subsection 4, paragraph a,
28subparagraph (1), Code 2022, is amended by adding the following
29new subparagraph division:
30 NEW SUBPARAGRAPH DIVISION. (d) The aggregate E-15 gasoline
31gallonage which is the aggregate total number of gallons of
32ethanol blended gasoline classified as E-15.
33 Sec. 68. Section 452A.31, subsection 5, paragraph a, Code
342022, is amended to read as follows:
35a. The aggregate diesel fuel gallonage is the total number
-29-1of gallons of diesel fuel which all retail dealers sell and
2dispense from all motor fuel pumps operated by the retail
3dealers in this state during a twelve-month period beginning
4January 1 and ending December 31. The aggregate diesel fuel
5gallonage is divided into the following classifications:
6(1) The aggregate biodiesel blended fuel gallonage
7which is the aggregate total number of gallons of biodiesel
8blended fuel. and which includes all of the following
9subclassifications:
10(2) (a) The aggregate B-11 B-5 plus gallonage which is the
11aggregate total number of gallons of biodiesel blended fuel
12classified as B-5 or higher up to but not including B-11 or
13higher.
14(b) The aggregate B-11 plus gallonage which is the aggregate
15total number of gallons of biodiesel blended fuel classified as
16B-11 or higher up to but not including B-20.
17(c) The aggregate B-20 plus gallonage which is the aggregate
18total number of gallons of biodiesel blended fuel classified as
19B-20 or higher up to but not including B-30.
20(d) The aggregate B-30 plus gallonage which is the aggregate
21total number of gallons of biodiesel blended fuel classified
22as B-30 or higher.
23(3) (2) The aggregate nonblended diesel fuel gallonage
24which is the aggregate total number of gallons of diesel fuel
25which is not biodiesel or biodiesel blended fuel.
26 Sec. 69. Section 452A.33, subsection 1, paragraph a,
27unnumbered paragraph 1, Code 2022, is amended to read as
28follows:
29Each retail dealer shall report its total motor fuel
30 gasoline and diesel fuel gallonage for a determination period
31as follows:
32 Sec. 70. Section 452A.33, subsection 1, paragraph b,
33subparagraphs (1) and (2), Code 2022, are amended to read as
34follows:
35(1) The information submitted on a company-wide basis shall
-30-1include the total motor gasoline and diesel fuel gallonage,
2including for each classification and subclassification, sold
3and dispensed by the retail dealer as provided in paragraph “a”
4for all retail motor fuel sites from which the retail dealer
5sells and dispenses motor fuel gasoline or diesel fuel.
6(2) The information submitted on a site-by-site basis shall
7include the total motor gasoline and diesel fuel gallonage,
8including for each classification and subclassification, sold
9and dispensed by the retail dealer as provided in paragraph
10“a” separately for each retail motor fuel site from which the
11retail dealer sells and dispenses motor gasoline or diesel
12 fuel.
13 Sec. 71. Section 452A.33, subsection 1, paragraph c, Code
142022, is amended to read as follows:
15c. The retail dealer shall prepare and submit file the
16report with the department in a manner and according to
17procedures required by the department in compliance with
18section 452A.61. However, the department may require that the
19retail dealer file the report with the department by electronic
20transmission. The department may require that a retail
21dealers report to dealer file the report with the department
22on an annual, quarterly, or monthly basis. The department,
23upon application by a retail dealer, may grant a reasonable
24extension of time to file the report. A retail dealer who
25fails to file the report as required in this section or who
26fails to maintain records required to file the report shall be
27subject to a civil penalty of not more than one hundred dollars
28per occurrence which shall be deposited in the general fund of
29the state.
30 Sec. 72. Section 452A.33, subsection 2, paragraph c, Code
312022, is amended to read as follows:
32c. The report shall not provide information regarding motor
33fuel or gasoline, diesel fuel, or a biofuel which is sold and
34dispensed by an individual retail dealer or at a particular
35retail motor fuel site. The report shall not include a trade
-31-1secret protected as a confidential record pursuant to section
222.7.
3 Sec. 73. EMERGENCY RULES. The department of revenue may
4adopt emergency rules under section 17A.4, subsection 3, and
5section 17A.5, subsection 2, paragraph “b”, to implement the
6provisions of sections 452A.31 and 452A.33 as amended by
7this part of this division of this Act. Any rules adopted
8in accordance with this section shall also be published as a
9notice of intended action as provided in section 17A.4.
10 Sec. 74. EFFECTIVE DATE. This part of this division of this
11Act, being deemed of immediate importance, takes effect upon
12enactment.
13 Sec. 75. RETROACTIVE APPLICABILITY. This part of this
14division of this Act applies retroactively to January 1, 2022.
15PART B
16EXCISE TAX IMPOSED ON GASOLINE AND DIESEL FUEL
17 Sec. 76. Section 452A.3, subsection 1, paragraph b,
18unnumbered paragraph 1, Code 2022, is amended to read as
19follows:
20On and after July 1, 2026 2030, an excise tax of thirty
21cents is imposed on each gallon of ethanol blended gasoline
22classified as E-15 or higher. Before July 1, 2026 2030, the
23rate of the excise tax on ethanol blended gasoline classified
24as E-15 or higher shall be based on the number of gallons of
25ethanol blended gasoline classified as E-15 or higher that are
26distributed in this state as expressed as a percentage of the
27number of gallons of motor fuel distributed in this state,
28which is referred to as the distribution percentage. For
29purposes of this paragraph “b”, only ethanol blended gasoline
30and nonblended gasoline, not including aviation gasoline, shall
31be used in determining the percentage basis for the excise
32tax. The department shall determine the percentage basis
33for each determination period beginning January 1 and ending
34December 31 based on data information from the reports filed
35 submitted to the department for filing pursuant to section
-32-1452A.33. The rate for the excise tax shall apply for the
2period beginning July 1 and ending June 30 following the end of
3the determination period. Before July 1, 2026 2030, the rate
4of the excise tax on each gallon of ethanol blended gasoline
5classified as E-15 or higher shall be as follows:
6 Sec. 77. Section 452A.3, subsection 3, paragraph a,
7subparagraph (1), Code 2022, is amended to read as follows:
8(1) Except as otherwise provided in this section and in
9this subchapter, the rate of the excise tax on each gallon of
10special fuel for diesel engines of motor vehicles used for any
11purpose for the privilege of operating motor vehicles in this
12state, other than biodiesel blended fuel classified as B-11
13 B-20 or higher, is thirty-two and five-tenths cents per gallon.
14 Sec. 78. Section 452A.3, subsection 3, paragraph a,
15subparagraph (2), unnumbered paragraph 1, Code 2022, is amended
16to read as follows:
17Except as otherwise provided in this section and in this
18subchapter, this subparagraph shall apply to the excise tax
19imposed on each gallon of biodiesel blended fuel classified
20as B-11 B-20 or higher used for any purpose for the privilege
21of operating motor vehicles in this state. On and after July
221, 2026 2030, the rate of the excise tax on each gallon of
23biodiesel blended fuel classified as B-11 B-20 or higher is
24thirty-two and five-tenths cents. Before July 1, 2026 2030,
25the rate of the excise tax on each gallon of biodiesel blended
26fuel classified as B-20 or higher shall be based on the number
27of gallons of biodiesel blended fuel classified as B-11 B-20
28 or higher that are distributed in this state as expressed as a
29percentage of the number of gallons of special fuel for diesel
30engines of motor vehicles distributed in this state, which is
31referred to as the distribution percentage. The department
32shall determine the percentage basis for each determination
33period beginning January 1 and ending December 31 based on data
34 information from the reports filed submitted to the department
35for filing pursuant to section 452A.33. The rate of the excise
-33-1tax shall apply for the period beginning July 1 and ending June
230 following the end of the determination period. Before July
31, 2026 2030, the rate of the excise tax on each gallon of
4biodiesel blended fuel classified as B-11 B-20 or higher shall
5be as follows:
6 Sec. 79. EFFECTIVE DATE. This part of this division of this
7Act takes effect July 1, 2024.
8PART C
9DEDUCTION OF EXCISE TAX IMPOSED ON BIOFUEL
10USED IN BLENDING WITH GASOLINE AND DIESEL FUEL
11 Sec. 80. Section 452A.8, subsection 2, paragraph a, Code
122022, is amended by adding the following new subparagraph:
13 NEW SUBPARAGRAPH. (3) (a) The gallonage of gasoline or
14diesel fuel withdrawn from a terminal by a licensee to be
15blended with a biofuel after it is withdrawn from the terminal
16to the extent the tax rate on the gasoline or diesel fuel
17exceeds the tax rate which would be due on the ethanol blended
18gasoline or biodiesel blended fuel pursuant to section 452A.3.
19(b) This subparagraph is repealed July 1, 2030.
20DIVISION VI
21RENEWABLE FUEL STANDARDS AND CLASSIFICATIONS — PROMOTIONAL
22INITIATIVES APPLIED TO SALES AND USE TAX — REFUND PAID TO
23BIODIESEL PRODUCERS
24PART A
25PRINCIPAL PROVISIONS
26 Sec. 81. Section 423.4, subsection 9, Code 2022, is amended
27to read as follows:
289. A person who qualifies as a biodiesel producer as
29provided in this subsection may apply to the director for a
30refund of the amount of the sales or use tax imposed and paid
31upon purchases made by the person.
32a. The person must be engaged in the manufacturing
33of biodiesel who has registered with the United States
34environmental protection agency as a manufacturer according to
35the requirements in 40 C.F.R. §79.4. The biodiesel must be for
-34-1use in biodiesel blended fuel in conformance with the standards
2and classifications in section 214A.2. The person must comply
3with the requirements of this subsection and rules adopted by
4the department pursuant to this subsection.
5b. The amount of the refund shall be calculated by
6multiplying a designated rate by the total number of gallons
7of biodiesel produced by the biodiesel producer in this state
8during each quarter of a calendar year. The designated rate
9shall be two four cents.
10c. A biodiesel producer shall not be eligible to receive
11a refund under this subsection on more than twenty-five
12million gallons of biodiesel produced each calendar year by
13the biodiesel producer at each facility where the biodiesel
14producer manufactures biodiesel.
15d. A person shall obtain a refund by completing forms
16furnished by the department and filed by the person on a
17quarterly basis as required by the department. The department
18shall refund the amount claimed by the person after subtracting
19any amount owing from the sales or use taxes imposed and paid
20upon purchases made by the person.
21e. This subsection is repealed on January 1, 2025 2028.
22 Sec. 82. EFFECTIVE DATE. This part of this division of this
23Act takes effect January 1, 2023.
24PART B
25IMPLEMENTATION
26 Sec. 83. ADMINISTRATIVE RULES. The department of revenue
27may adopt rules under chapter 17A prior to the effective date
28of part A of this division of this Act, which rules shall take
29effect January 1, 2023.
30DIVISION VII
31PROMOTIONAL INITIATIVES — RENEWABLE FUEL INFRASTRUCTURE
32 Sec. 84. Section 159A.11, subsection 6, Code 2022, is
33amended by striking the subsection and inserting in lieu
34thereof the following:
356. “Motor fuel storage and dispensing infrastructure” or
-35-1“infrastructure” means the same as defined in section 214.1.
2 Sec. 85. Section 159A.11, Code 2022, is amended by adding
3the following new subsection:
4 NEW SUBSECTION. 6A. “Motor fuel storage tank” means the
5same as defined in section 214.1.
6 Sec. 86. Section 159A.11, subsection 10, Code 2022, is
7amended by striking the subsection.
8 Sec. 87. Section 159A.12, Code 2022, is amended to read as
9follows:
10159A.12 Classification Standards and classifications of motor
11fuel and renewable fuel.
12For purposes of this subchapter, ethanol blended fuel and
13biodiesel motor fuel shall be classified in the same manner,
14including a renewable fuel, must meet the same standards and
15classifications as provided in section 214A.2.
16 Sec. 88. Section 159A.13, subsection 6, Code 2022, is
17amended by striking the subsection.
18 Sec. 89. Section 159A.14, subsections 1 and 2, Code 2022,
19are amended to read as follows:
201. The purpose of the program is to improve retail
21motor fuel sites by installing, replacing, or converting
22infrastructure to be used to store, blend, or dispense
23renewable fuel. The infrastructure shall be ethanol
24infrastructure or biodiesel infrastructure.
25a. (1) Ethanol infrastructure shall be designed and used
26exclusively have the capacity to do any of the following:
27(a) Store and dispense E-15 gasoline. At least for the
28period beginning on September 16 and ending on May 31 of each
29year, the ethanol infrastructure must be used to store and
30dispense E-15 gasoline as a registered fuel recognized by the
31United States environmental protection agency.
32(b) Store and dispense E-85 gasoline.
33(c) (b) Store, blend, and dispense motor fuel ethanol or
34ethanol blended gasoline from a motor fuel blender pump. The
35ethanol infrastructure must be used for the storage of ethanol
-36-1or ethanol blended gasoline, or for blending ethanol with
2gasoline. The ethanol infrastructure must at least include
3a motor fuel blender pump which that dispenses different
4classifications of ethanol blended gasoline and allows E-15
5gasoline and E-85 gasoline to be dispensed at all times that
6the blender pump is operating.
7(2) Biodiesel infrastructure shall be designed and used
8exclusively have the capacity to do any of the following:
9(a) Store and dispense biodiesel or biodiesel blended fuel
10classified as B-20 or higher.
11(b) Blend or Store, blend, and dispense biodiesel fuel
12from a motor fuel blender pump. The biodiesel infrastructure
13must at least include a motor fuel blender pump that dispenses
14different classifications of biodiesel blended fuel and allows
15biodiesel blended fuel classified as B-5 or higher to be
16dispensed at all times that the blender pump is operating.
17b. The infrastructure must be part of the premises of
18a retail motor fuel site operated by a retail dealer. The
19infrastructure shall not include a tank vehicle.
202. a. A person may apply to the department to receive
21financial incentives on a cost-share basis according to
22procedures required by the department. The department shall
23accept a timely received application to improve a retail
24motor fuel site as provided in this section and forward the
25applications that application to the underground storage tank
26fund infrastructure board, as required by that the board, for
27evaluation and recommendation. The underground storage tank
28fund board may rank the applications with comments and shall
29forward them to the infrastructure board for its approval or
30disapproval.
31b. The application shall allow the department to determine
32whether the person is a retail dealer assigned special status.
33The department shall assign the person special status if
34the person does not comply with the E-15 access standard
35as provided in section 214A.32 only because the person is
-37-1ineligible to be issued an E-15 incompatible infrastructure
2class 2 waiver order for that retail motor fuel site as
3provided in section 214A.35, subsection 6.
4c. The infrastructure board may establish a system to
5rank applications for approval. In ranking applications, the
6infrastructure board may provide special priority to any of the
7following:
8(1) A retail motor fuel site that has been constructed and
9is operating.
10(2) (a) A retail motor fuel site owned or operated by a
11person who the department assigns special status as provided
12in paragraph “b”.
13(b) (i) This subparagraph shall be implemented on January
141, 2023.
15(ii) This subparagraph division is repealed January 2,
162023.
17d. The department shall award financial incentives on a
18cost-share basis to an eligible person whose application was
19approved by the infrastructure board.
20 Sec. 90. Section 159A.14, subsection 3, unnumbered
21paragraph 1, Code 2022, is amended to read as follows:
22The infrastructure board shall approve cost-share
23agreements executed by the department and persons that the
24infrastructure board determines are eligible as provided in
25this section, according to terms and conditions required by the
26infrastructure board. The infrastructure board shall determine
27the amount of the financial incentives to be awarded to a
28person participating in the program. The determination may be
29based on applications prioritized for approval as described in
30subsection 2. In order to be eligible to participate in the
31program, all of the following must apply:
32 Sec. 91. Section 159A.14, subsection 5, Code 2022, is
33amended to read as follows:
345. An award of financial incentives to a participating
35person shall be on a cost-share basis in the form of a grant.
-38-1To participate in the program, an eligible person must execute
2a cost-share agreement with the department as approved by
3the infrastructure board in which the person contributes a
4percentage of the total costs related to improving the retail
5motor fuel site.
6a. A cost-share agreement shall be for a three-year period
7or a five-year period.
8b. (1) For the term of an agreement to improve a retail
9motor fuel site by installing, replacing, or converting ethanol
10infrastructure, the participating person must use the ethanol
11infrastructure to store and dispense, or store, blend, and
12dispense, ethanol blended gasoline classified as E-15 or
13higher.
14(2) For the term of an agreement to improve a motor
15fuel site by installing, replacing, or converting biodiesel
16infrastructure, the participating person must use the biodiesel
17infrastructure to store and dispense, or store, blend, and
18dispense, biodiesel blended fuel classified as B-5 or higher.
19However, at least for the period beginning April 1 and ending
20October 31 of each year, the participating person must use
21the biodiesel infrastructure to store and dispense, or store,
22blend, and dispense, biodiesel blended fuel classified as B-11
23or higher.
24c. A cost-share agreement shall include provisions for
25standard financial incentives or standard financial incentives
26and supplemental financial incentives as provided in this
27subsection. The infrastructure board may approve multiple
28improvements to the same retail motor fuel site for the full
29amount available for both ethanol infrastructure and biodiesel
30infrastructure so long as the improvements for ethanol
31infrastructure and for biodiesel infrastructure are made under
32separate cost-share agreements.
33a. d. (1) Except as provided in paragraph “b” “e”,
34a participating person may be awarded standard financial
35incentives to make improvements to a retail motor fuel site.
-39-1The standard financial incentives awarded to a participating
2person shall not exceed the following:
3(a) For a three-year cost-share agreement, fifty percent of
4the actual cost of making the improvement or thirty thousand
5dollars, whichever is less.
6(b) For a five-year cost-share agreement, seventy percent
7of the actual cost of making the improvement or fifty thousand
8dollars, whichever is less.
9(2) (a) The infrastructure board may approve multiple
10awards of standard financial incentives to make improvements to
11a the retail motor fuel site so long as the total amount of the
12awards for ethanol infrastructure or biodiesel infrastructure
13does not exceed the limitations provided in subparagraph (1).
14(b) If the department determines that a participating
15person is assigned special status because the participating
16person is ineligible to be issued an E-15 incompatible
17infrastructure class 2 waiver order for the retail motor fuel
18site as provided in subsection 2, the infrastructure board may
19approve one or multiple awards of standard financial incentives
20to make improvements to that retail motor fuel site subject to
21all of the following:
22(i) The total amount of awards shall not be reduced by
23the amount of any standard financial incentives awarded to
24improve the retail motor fuel site before the department’s
25determination, notwithstanding subparagraph division (a).
26(ii) The total amount of awards for ethanol infrastructure
27or biodiesel infrastructure shall not exceed the limitations
28provided in subparagraph (1).
29b. e. In addition to any standard financial incentives
30awarded to a participating person under paragraph “a” “d”, the
31participating person may be awarded supplemental financial
32incentives to make improvements to a retail motor fuel site to
33do any of the following:
34(1) Upgrade or replace a dispenser which is part of
35gasoline storage and dispensing infrastructure used to store
-40-1and dispense E-85 gasoline as provided in section 455G.31.
2The participating person is only eligible to be awarded the
3supplemental financial incentives if the person installed the
4dispenser not later than sixty days after July 27, 2011. The
5supplemental financial incentives awarded to the participating
6person shall not exceed seventy-five percent of the actual cost
7of making the improvement or thirty thousand dollars, whichever
8is less.
9(2) To improve additional retail motor fuel sites owned or
10operated by a participating person within a twelve-month period
11as provided in the cost-share agreement. The supplemental
12financial incentives shall be used for the installation
13of an additional motor fuel storage tank and associated
14infrastructure at each such retail motor fuel site. A
15participating person may be awarded supplemental financial
16incentives under this subparagraph paragraph and standard
17financial incentives under paragraph “a” “d” to improve the
18same retail motor fuel site. The supplemental financial
19incentives awarded to the participating person shall not
20exceed twenty-four thousand dollars. The participating person
21shall be awarded the supplemental financial incentives on a
22cumulative basis according to the schedule provided in this
23subparagraph paragraph, which shall not exceed the following:
24(a) (1) For the second retail motor fuel site, six thousand
25dollars.
26(b) (2) For the third retail motor fuel site, six thousand
27dollars.
28(c) (3) For the fourth retail motor fuel site, six thousand
29dollars.
30(d) (4) For the fifth retail motor fuel site, six thousand
31dollars.
32 Sec. 92. Section 159A.15, subsection 1, Code 2022, is
33amended to read as follows:
341. A person may apply to the department to receive financial
35incentives on a cost-share basis. The department shall forward
-41-1the applications to the underground storage tank fund board as
2required by that board for evaluation and recommendation. The
3underground storage tank fund board may rank the applications
4with comments and shall forward them to the infrastructure
5board for approval or disapproval. The department shall award
6financial incentives on a cost-share basis to an eligible
7person whose application was approved by the infrastructure
8board.
9 Sec. 93. Section 159A.16, subsection 3, Code 2022, is
10amended to read as follows:
113. Moneys in the renewable fuel infrastructure fund are
12appropriated to the department exclusively to support and
13market the renewable fuel infrastructure programs as provided
14in sections 159A.14 and 159A.15, and as allocated in financial
15incentives by the renewable fuel infrastructure board created
16in section 159A.13. Up to fifty
17a. For each fiscal year, not more than one million
18two hundred fifty thousand dollars shall be allocated to
19support 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.
23b. For each fiscal year, not more than one hundredthousand
24dollars shall be allocated each fiscal year to the department
25to support the administration of the programs. The
26c. For each fiscal year, thedepartment may use up to
27one and one-half percent of the program funds to market the
28programs. Otherwise the moneys shall not be transferred, used,
29obligated, appropriated, or otherwise encumbered except to
30allocate as financial incentives under the programs.
31EXPLANATION
32The inclusion of this explanation does not constitute agreement with
33the explanation’s substance by the members of the general assembly.
34OVERVIEW. This bill provides a number of mechanisms to
35promote the use of renewable fuels used to power internal
-42-1combustion engines that operate motor vehicles (e.g., both
2conventional and flex-fuel). The bill provides for both
3compliance requirements regulating the storage and dispensing
4of renewable fuel, and promotional measures (specifically
5financial and tax incentives) to increase the availability and
6opportunity for consumers to select a renewable fuel.
7OVERVIEW — TYPES AND CLASSIFICATIONS OF RENEWABLE FUELS.
8 The term “motor fuel” is sometimes used to describe both
9gasoline and diesel fuel (Code chapter 214A) but is also
10used to describe only gasoline, while the term “special
11fuel” is used to describe diesel fuel (Code chapter 452A).
12The term “renewable fuel” is used to describe gasoline or
13diesel fuel when blended with a percentage of its biofuel
14component (biofuel). For gasoline, the biofuel, referred to
15as ethanol, is denatured grain (corn) alcohol. For diesel
16fuel, the biofuel, referred to as biodiesel, is derived from
17processed animal fat or plant (soybean) oil. Renewable fuel
18is based on the percentage of biofuel present in a volume
19(gallon) of gasoline or diesel fuel (Code section 214A.2).
20The biofuel’s percentage is designated by its classification.
21Ethanol is abbreviated as “E” and biodiesel is abbreviated as
22“B”. The term “xx” is a variable which represents the biofuel
23percentage present by volume. Typically, a statute establishes
24a classification threshold meaning that a renewable fuel
25must have a minimum biofuel percentage. For ethanol blended
26gasoline, the most widely recognized classification thresholds
27are E-10, E-15, and E-85; and for biodiesel blended fuel, the
28most widely recognized threshold classifications are B-5, B-11,
29and B-20. For E-85, the biofuel percentage ranges from 70
30percent to 85 percent.
31OVERVIEW — STATE AGENCIES REGULATING AND PROMOTING
32RENEWABLE FUELS. State agencies responsible for administering
33and enforcing regulations and awarding promotional incentives
34include the department of agriculture and land stewardship
35(DALS), the department of natural resources (DNR), the state
-43-1fire marshal (SFM), the department of revenue (DOR), and the
2department of administrative services (DAS) together with
3various agencies that operate the state’s motor vehicle fleet.
4OVERVIEW — REGULATION OF MOTOR FUEL (DALS). DALS is
5responsible for setting standards for motor fuel (defined to
6include gasoline and diesel fuel), including renewable fuel and
7its biofuel components. Generally, the regulations are based
8on voluntary global specifications adopted and published by a
9widely recognized private association, A.S.T.M. international
10(Code section 214A.2). DALS regulates the advertising of motor
11fuel to ensure that it complies with applicable standards and
12classifications (Code sections 214A.2 and 214A.3). A retail
13dealer must notify a consumer at the pump that the motor fuel
14being dispensed is a renewable fuel. Specifically, a sticker
15must be placed on the motor fuel dispenser (dispenser) used to
16discharge the renewable fuel (Code section 214A.16). DALS also
17regulates the licensure of retail dealers and the inspection
18of meters used to measure the discharge of motor fuel pumped
19from a motor fuel storage tank (storage tank) to a dispenser
20at either a fixed location such as a service station or a
21mobile location such as a tank wagon (Code chapters 214 and 215
22regulating weights and measures). The term motor fuel pump
23(pump), including a motor fuel blender pump, is often used
24colloquially to describe the meter which is equipment sealed
25from tampering and used to record and display the volume of
26motor fuel dispensed and to calculate the purchase price. A
27retail dealer is licensed by DALS to operate a metered motor
28fuel pump used to dispense motor fuel (Code section 214.2).
29Generally, a person who violates a regulation relating
30to a motor fuel standard is guilty of a serious misdemeanor
31punishable by confinement for no more than one year and a fine
32of at least $430 but not more than $2,560 with each day that
33a continuing violation occurs considered a separate offense
34(Code section 214A.11(1)). Alternatively, DALS may proceed
35against the person by initiating an administrative (contested
-44-1case) proceeding in which the applicable civil penalty ranges
2from $100 to $1,000 per violation (Code section 214A.11(2)).
3A retail dealer who violates standards for the operation of a
4metered pump (e.g., tampering) is subject to administrative
5action, including having a metered pump placed out of service
6(Code section 215.4).
7OVERVIEW — REGULATION OF MOTOR FUEL INFRASTRUCTURE (DNR
8AND SFM). Generally, DNR is required to regulate underground
9infrastructure, including a storage tank used to hold gasoline
10or diesel fuel, including associated renewable fuels, in a
11manner that prevents water pollution (Code chapter 455G). The
12SFM regulates the storage, transportation, handling, or use
13of flammable or combustible liquids including an aboveground
14storage tank holding gasoline or diesel fuel and associated
15renewable fuels (Code chapter 101).
16OVERVIEW — STATE VEHICLE USE OF RENEWABLE FUELS (DAS
17AND VARIOUS STATE ENTITIES). DAS and other state entities
18maintaining the state motor vehicle fleet must operate
19those motor vehicles using a renewable fuel which must be
20either ethanol blended gasoline or biodiesel blended fuel,
21if commercially available. State agencies subject to the
22requirement include DAS (Code chapter 8A), the commission for
23the blind (Code chapter 216B), the state board of regents (Code
24chapter 262), the department of transportation (Code chapter
25307), and the department of corrections (Code chapter 904).
26OVERVIEW — RENEWABLE FUEL PROMOTION — INCOME TAX CREDIT
27PROGRAMS (DOR). DOR administers three renewable fuel income
28tax credit programs, including the E-85 gasoline promotion
29tax credit (Code sections 422.11O and 422.33(11B)), the E-15
30plus gasoline promotion tax credit (Code sections 422.11Y
31and 422.33(11D)), and the biodiesel blended fuel tax credit
32(Code sections 422.11P and 422.33(11C)). For each tax
33credit program, the amount of the tax credit is calculated by
34multiplying the number of gallons of a renewable fuel that
35meets a threshold classification sold at the retail site or
-45-1on a companywide basis and reported to DOR during the prior
2determination period by a designated rate. For the E-85
3gasoline promotion tax credit, the designated rate is 16 cents.
4For the biodiesel blended fuel tax credit, the designated rate
5is 3.5 cents for B-5 or higher but not as high as B-11 and 5
6cents for B-11 or higher. For the E-15 plus gasoline promotion
7tax credit, the designated rate depends upon the time of the
8year. For the first period beginning January 1 and ending May
931, it is 3 cents, for the second period beginning June 1 and
10ending September 15, it is 10 cents, and for the third period
11beginning September 16 and ending December 31, it returns to 3
12cents. All three tax rates expire on January 1, 2025.
13OVERVIEW — RENEWABLE FUEL PROMOTION — EXCISE TAXES
14(DOR). DOR compiles information from reports submitted by
15retail dealers regarding the total gallonages of gasoline and
16diesel fuel sold to consumers during the prior calendar year
17(determination period). The information includes sales of
18renewable fuels according to classification (Code sections
19452A.31 and 452A.33). The information compiled by a retail
20dealer is used as the basis for calculating a promotional
21income tax credit claimed by the retail dealer. The aggregated
22information is used by DOR to calculate the amount of
23promotional incentives awarded in the form of reduced excise
24taxes imposed on certain renewable fuel sold in this state
25(Code chapter 452A). Specifically, DOR calculates the excise
26tax for ethanol blended gasoline classified as E-15 or higher
27and for biodiesel fuel classified as B-11 or higher for each
2812-month period beginning July 1 and ending June 30 (coinciding
29with the state fiscal year) (Code section 452A.3).
30OVERVIEW — RENEWABLE FUEL PROMOTION — DEDUCTION OF EXCISE
31TAX FOR LICENSED RENEWABLE FUEL BLENDERS (DOR). The excise
32tax is imposed on gasoline and undyed (“clear”) diesel fuel
33when it is “withdrawn from a terminal”, meaning the physical
34movement from a storage and distribution facility (removed from
35the rack) or the shipment of ethanol from its manufacturer to
-46-1a nonterminal location (701 IAC 67.1). A person who produces
2a renewable fuel by combining gasoline or diesel fuel with
3its biofuel component at a nonterminal location must obtain
4a blender’s license (Code section 452A.6). The licensed
5blender may be liable for the amount of any underpayment of the
6excise tax due or may be entitled to receive a refund for any
7overpayment of the excise tax due, depending on the amount of
8the tax paid on the biofuel and whether the renewable fuel to
9be sold meets the threshold classification for ethanol blended
10gasoline (E-15) or biodiesel blended fuel (B-11) (Code section
11452A.8 and 701 IAC 68.4).
12OVERVIEW — RENEWABLE FUEL SALES AND USE TAX PROMOTION —
13BIODIESEL PRODUCERS. A producer of biodiesel registered with
14the EPA (40 C.F.R. §79.4) who manufactures biodiesel meeting
15DALS standards (Code section 214A.2) is entitled to claim a
16refund of sales and use taxes paid (Code section 423.4(9)).
17The amount of the refund is 2 cents multiplied by the total
18number of gallons of biodiesel during each quarter of the year.
19However, a producer is not entitled to claim a refund during
20a calendar year on any gallon in excess of 25 million gallons
21produced at a facility. The refund expires on January 1, 2025.
22OVERVIEW — PROMOTION OF RENEWABLE FUEL AT RETAIL SITES
23(DALS). DALS promotes renewable fuels by administering
24the renewable fuel infrastructure program for retail motor
25fuel sites (infrastructure program) in cooperation with
26the renewable fuel infrastructure board (Code chapter 159A,
27subchapter III). Under the infrastructure program, DALS enters
28into an agreement with a retail dealer to improve a retail
29site by installing, replacing, or converting infrastructure,
30including storage tanks, pumps, dispensers, and associated
31equipment (e.g., fittings and pipes). Specifically, financial
32incentives are awarded on a cost-share basis to store a biofuel
33classified as E-100 or B-100, or to store and dispense a
34renewable fuel having a threshold classification of E-15 or
35B-1 (Code section 159A.14). The award of financial incentives
-47-1is based on either a three-year agreement with the state’s
2incurred cost share limited to 50 percent of the actual
3costs incurred or $30,000, whichever is less, or a five-year
4agreement with the state cost share limited to 70 percent of
5the actual costs incurred or $50,000, whichever is less. A
6participating person may receive multiple awards to improve the
7same retail site so long as the total amount of awards does not
8exceed the percentage or dollar amount limit. A retail dealer
9who acts in violation of an agreement is subject to a civil
10penalty of up to $1,000 per day (Code section 159A.14(7)).
11The infrastructure program is supported by the renewable
12fuel infrastructure fund (infrastructure fund) (Code section
13159A.16).
14BILL IN SUMMARY — REQUIREMENTS — COMPLIANCE WITH THE
15E-15 ACCESS STANDARD (DALS). The bill creates an E-15 access
16standard (new Code section 214A.31) beginning January 1,
172023. In order to comply with the E-15 access standard, a
18retail dealer must advertise and sell E-15 gasoline from a
19minimum number of qualifying dispensers (i.e., a dispenser
20that dispenses gasoline) located at the retail dealer’s retail
21site. The number of qualified dispensers required depends on
22whether the retail dealer installed, replaced, or converted a
23gasoline storage tank on or after that date. If so, a general
24form of compliance applies and the retail dealer must dispense
25E-15 gasoline from at least 50 percent of all qualified
26gasoline dispensers located at the retail site. If the retail
27site has only one qualified dispenser, that dispenser must
28dispense E-15 gasoline. An alternative form of compliance
29applies if the retail dealer has not installed, replaced,
30or converted a gasoline storage tank on or after that date.
31Under the alternative form of compliance, the retail dealer
32is not required to dispense E-15 gasoline from any qualified
33dispenser until January 1, 2026. On and after that date, two
34conditions must be met: (1) the retail dealer still cannot
35install, replace, or convert a gasoline storage tank, and (2)
-48-1the retail dealer must advertise and sell E-15 gasoline from
2one qualified dispenser located at the retail motor fuel site.
3If the retail dealer fails to meet any of the two conditions
4under the alternative form of compliance, the retail dealer is
5subject to the general form of compliance and must immediately
6advertise and sell E-15 gasoline from the minimum number (one
7or 50 percent) of the qualified dispensers at the retail site.
8BILL IN SUMMARY — REQUIREMENTS — COMPLIANCE WITH
9E-15 ACCESS STANDARD — SUSPENSION AND WAIVERS. The bill
10exempts certain unqualified dispensers from the E-15 access
11standard, including those dispensers that exclusively dispense
12aviation gasoline, diesel fuel, or kerosene (new Code section
13214A.32). It also exempts dispensers that are part of a tank
14vehicle dispensing motor fuel off-site. A special exemption
15applies when the retail dealer cannot meet the E-15 access
16standard because of maintenance, repair, or reconditioning of
17infrastructure or the installation, expansion, replacement,
18or conversion of infrastructure. The governor may issue an
19executive order that suspends compliance by all retail dealers
20doing business in the state or a geographic segment of the
21state (new Code section 214A.33). The governor’s suspension
22order must be supported by credible evidence that market forces
23or existing infrastructure prevents compliance. The secretary
24of agriculture may issue either of two administrative orders
25that waive compliance by a retail dealer on a site-by-site
26basis. The E-15 unavailability waiver order must be based on
27credible evidence that a retail dealer has not been able to
28reasonably obtain E-15 gasoline (new Code section 214A.34).
29The E-15 incompatible infrastructure waiver order must be
30based on credible evidence that the motor fuel storage and
31dispensing infrastructure located at the retail motor fuel
32site is not compatible with the use of E-15 gasoline. The
33secretary of agriculture may issue either a class 1 or class
342 E-15 incompatible infrastructure waiver order (new Code
35section 214A.35). A class 1 waiver order is based on the age
-49-1of all motor fuel tanks dispensing gasoline, and specifically
2the date of installation and the construction materials used
3(specifically fiberglass). A class 2 waiver order is based on
4an evaluation of the motor fuel site to determine if the motor
5fuel storage and dispensing infrastructure is not compatible
6with E-15 gasoline. The evaluation must be completed by
7DALS or a certified professional retail motor fuel site
8installer (installer) certified by DALS. In addition, the
9total estimated cost of the improvement must exceed the E-15
10infrastructure base amount which equals the maximum amount of
11financial incentives that the retail dealer could be awarded
12under the renewable fuel infrastructure program for retail
13dealers (amended Code section 159A.14). The secretary must
14terminate a class 1 or class 2 waiver order based on the
15occurrence of any number of specified events, including the
16failure of the retail dealer to be licensed under weights
17and measures regulations governing motor fuel pumps (Code
18section 214.2); the cessation of the retail dealer’s business;
19or the installation, replacement, or conversion of a motor
20fuel storage tank. A retail dealer or installer who falsely
21completes an application for a class 1 or class 2 waiver
22order commits perjury and is subject to a class “D” felony
23(punishable by confinement for no more than five years and a
24fine of at least $1,025 but not more than $10,245).
25BILL IN SUMMARY — REQUIREMENTS — RETAIL MOTOR FUEL SITE
26INSPECTIONS AND REGULATION OF RETAIL DEALER ADVERTISING (DALS).
27 The bill provides that when conducting an inspection of metered
28pumps located at a retail site to determine compliance with
29weights and measures regulations, DALS is also required to
30determine compliance with the E-15 access standard (amended
31Code section 214.12). A retail dealer is prohibited from
32falsely advertising for sale gasoline or diesel fuel, including
33by advertising a false classification (amended Code section
34214A.3). The bill eliminates a provision requiring that a
35decal be placed on a dispenser notifying consumers that motor
-50-1fuel being dispensed is a renewable fuel (amended Code section
2159A.6 and repealed Code section 214A.16). The bill does not
3affect federal labeling requirements, including by the United
4States environmental protection agency under the Clean Air Act
5Amendments of 1990 (42 U.S.C. §7545 and 40 C.F.R. pt.1090) or
6by the United States department of energy and the United States
7federal trade commission (15 U.S.C. §2801 et seq., 42 U.S.C.
8§17021, 16 C.F.R. pt.306, and 40 C.F.R. §80.1501(a)).
9BILL IN SUMMARY — REQUIREMENTS — RETAIL DEALER
10DISCIPLINARY ACTION AND ENFORCEMENT (DALS). The bill provides
11that a retail dealer who violates the E-15 access standard
12is subject to a disciplinary action which may result in the
13suspension or revocation of the retail dealer’s license issued
14under weights and measures regulations (new Code section
15214A.36).
16BILL IN DETAIL — REQUIREMENTS — NEW INSTALLATION OF
17GASOLINE AND BIODIESEL INFRASTRUCTURE AT RETAIL DEALER SITES
18(DNR AND SFM). The bill provides that new infrastructure
19required to be installed to store and dispense E-85 gasoline
20or B-20 biodiesel fuel must be (1) listed with an independent
21testing laboratory (e.g., underwriters laboratories) or
22approved by the manufacturer and (2) approved by DNR or the
23SFM, unless such approval is waived based on compliance with a
24substitute requirement (new Code sections 455G.32 and 455G.33,
25which are similar to amended Code section 455G.31 excusing the
26storage of ethanol blended gasoline classified as higher than
27E-9, which the bill increases to E-10).
28BILL IN SUMMARY — REGULATION OF MOTOR VEHICLES POWERED BY
29QUALIFIED RENEWABLE FUELS AND PURCHASE OF QUALIFIED RENEWABLE
30FUELS BY STATE GOVERNMENT ENTITIES. The bill provides that DAS
31and other state entities administering the state government
32fleet must provide that state motor vehicles operating using
33engines powered by gasoline or diesel fuel must use the
34highest classification of qualified renewable fuel available.
35A qualified renewable fuel is limited to ethanol blended
-51-1gasoline or biodiesel blended fuel. Certain limitations
2apply: (1) the qualified renewable fuel must be warranted
3by the motor vehicle’s manufacturer, (2) that classification
4of qualified renewable fuel must be available, and (3) an
5emergency situation must not exist. In addition, DAS and the
6other state entities must revise their bidding procedures as
7necessary to account for the purchase of motor vehicles that
8operate using engines powered by biodiesel blended fuel having
9a threshold classification of B-20 (new Code section 8A.368).
10DAS, in cooperation with the other entities, is required to
11prepare an annual report to be submitted to the governor and
12general assembly providing information regarding the number
13of state motor vehicles using engines powered using motor
14fuel, including gasoline and diesel fuel, the number of those
15motor vehicles capable of being powered using ethanol blended
16gasoline meeting a threshold classification of E-15 and E-85 or
17biodiesel blended fuel meeting a threshold classification of
18B-20, and the number of gallons of qualified renewable fuels
19purchased (new Code section 8A.369 and amended Code sections
20216B.3, 262.25A, 307.21, and 904.312A).
21BILL IN SUMMARY — PROMOTION — TAX CREDITS. The bill
22extends the period before promotional tax credits expire. For
23the E-85 gasoline promotion tax credit, the extended date is
24January 1, 2028 (amended Code sections 422.11O and 422.33
25(11B)); for the biodiesel blended fuel tax credit, the extended
26date is January 1, 2028 (amended Code sections 422.11P and
27422.33(11C)); and for the E-15 plus gasoline tax credit,
28the extended date is January 1, 2026 (amended Code sections
29422.11Y and 422.33(11D)). The bill changes the threshold
30classifications and designated rates for two of the tax credits
31beginning January 1, 2023. This includes the biodiesel blended
32fuel tax credit (5 cents for B-11, 7 cents for B-20, 10 cents
33for B-30) and the E-15 plus gasoline promotion tax credit (a
34flat 9 cents). The new rates for the biodiesel blended fuel
35tax credit for part of the second step of the threshold (higher
-52-1than B-20 but not as high as B-30) and the third full step of
2the threshold (B-30 and higher) take effect after standards for
3those classifications are established by DALS.
4BILL IN SUMMARY — PROMOTION — RETAIL DEALER REPORTING
5OF GALLONAGES OF GASOLINE AND DIESEL FUEL (DOR). Beginning
6January 1, 2022, a retail dealer must include additional
7information regarding subclassifications of ethanol blended
8gasoline gallonages and biodiesel blended fuel gallonages for
9each reported determination period submitted to DOR to allow a
10retail dealer to calculate a promotional tax credit and DOR to
11calculate the promotional excise tax imposed on ethanol blended
12gasoline and biodiesel blended fuel. The bill provides that
13DOR may require reports by retail dealers to be submitted by
14electronic transmission and that DOR may grant an extension
15to a retail dealer to submit a report. Otherwise, a retail
16dealer who does not submit a timely report is subject to a
17$100 civil penalty. The bill extends the expiration of the
18promotional excise tax rates for both ethanol blended gasoline
19and biodiesel blended fuel to July 1, 2030. It also increases
20the threshold classification for biodiesel blended fuel to B-20
21beginning July 1, 2024.
22BILL IN SUMMARY — PROMOTION — EXCISE TAX PAID BY LICENSED
23BLENDERS SUBJECT TO DEDUCTION IN LIEU OF REFUND (DOR). The
24bill provides that a licensed blender is no longer required
25to apply for a refund for an overpayment amount. Instead,
26the gallonage of gasoline or diesel fuel withdrawn from a
27terminal by a supplier for purchase by a licensed blender is
28subject to a deduction on ethanol blended gasoline or biodiesel
29blended gasoline after it is blended to meet its classification
30threshold (amended Code section 452.8). This provision is
31repealed July 1, 2030.
32BILL IN SUMMARY — PROMOTION — SALES AND USE TAXES PAID BY
33BIODIESEL PRODUCER SUBJECT TO PROMOTIONAL REFUND (DOR). The
34bill provides that beginning January 1, 2023, the amount of
35the refund of sales and use taxes entitled to be claimed by
-53-1a biodiesel producer is increased to 4 cents per gallon per
2quarter of each calendar year up to the 25 million gallonage
3limit (amended Code section 423.4).
4BILL IN SUMMARY — PROMOTION — FINANCING RETAIL SITE
5INFRASTRUCTURE (DALS). The bill provides that the underground
6storage tank fund board is no longer involved in evaluating
7applications submitted under the renewable fuel infrastructure
8program (amended Code section 159A.14) and the renewable fuel
9infrastructure program for biodiesel terminal facilities
10(amended Code section 159A.15). The infrastructure board may
11establish a system to rank applications to participate in the
12infrastructure program for approval. In ranking applications,
13the infrastructure board may provide special priority to
14a retail motor fuel site that has been constructed and is
15operating. It may also provide special priority to a retail
16dealer who was not eligible to receive an E-15 incompatible
17infrastructure class 2 waiver because the total estimated cost
18of improvement does not exceed the E-15 improvement base amount
19(assigned special status). An award of financial incentives
20must be based on a five-year agreement with the state’s cost
21share limited to 70 percent or $50,000, whichever is less.
22However, in the case of a special status retail dealer who DALS
23determines is ineligible to be issued an E-15 incompatible
24infrastructure class 2 waiver order, the limits for financing
25an improvement to the retail dealer’s retail site are subject
26to the 70 percent or $50,000 regardless of whether the
27infrastructure board awarded financing to improve that retail
28site prior to the determination. A retail dealer installing,
29replacing, or converting ethanol infrastructure must agree
30to advertise and sell ethanol blended gasoline classified at
31an E-15 threshold for all 12 months of the year rather than
32seasonally. A retail dealer by installing, replacing, or
33converting biodiesel infrastructure must agree to advertise for
34sale and sell biodiesel blended fuel at a B-5 threshold rather
35than a B-1 threshold for all 12 months of the year with one
-54-1exception. The threshold is increased to B-11 from April 1 to
2October 31. In addition, the bill provides that during any
3fiscal year, of the moneys appropriated to the infrastructure
4fund (amended Code section 159A.16), not more than $1.25
5million may be allocated to support biodiesel infrastructure
6under the renewable fuel infrastructure program for retail
7motor fuel sites. The bill does not limit the amount that
8may be allocated to support the renewable fuel infrastructure
9program for biodiesel terminal facilities.
-55-da/ns
2blended gasoline and biodiesel blended fuel used to power
3internal combustion engines, by providing for compliance
4requirements and promotional initiatives that relate to
5establishing classifications and standards for renewable
6fuels, advertising and selling renewable fuels, storing
7and dispensing renewable fuels, using state motor vehicles
8powered by renewable fuels, and taxes, tax credits, and tax
9refunds relating to renewable fuels; providing penalties and
10making penalties applicable; and including effective date
11and retroactive applicability provisions.
12BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2COMPLIANCE REQUIREMENTS — STANDARDS
3AND CLASSIFICATIONS FOR GASOLINE — MOTOR FUEL STORAGE
4AND DISPENSING INFRASTRUCTURE
5part a
6E-15 ACCESS STANDARD
7 Section 1. NEW SECTION. 214A.31 E-15 access standard —
8establishment.
9In order to ensure consumer access to gasoline containing
10fifteen percent ethanol by volume, an E-15 access standard is
11established in accordance with 2013 Iowa Acts, ch.127, §1,
12section 159A.1, and this subchapter.
13 Sec. 2. NEW SECTION. 214A.32 E-15 access standard — retail
14dealer compliance.
151. Except as provided in sections 214A.33 through 214A.35,
16a retail dealer owning or operating a retail motor fuel site
17shall comply with the E-15 access standard as provided in this
18section.
192. In order to comply with the E-15 access standard, a
20retail dealer must advertise for sale and sell E-15 gasoline
21from a minimum number of qualifying motor fuel dispensers
22located at the retail dealer’s retail motor fuel site. A
23qualifying motor fuel dispenser must be capable of dispensing
24gasoline at all times that it is in operation.
25a. Except as provided in paragraph “b”, a retail dealer
26shall comply with a general E-15 access standard by dispensing
27E-15 gasoline from the following:
28(1) One qualified motor fuel dispenser, if there is only one
29qualified motor fuel dispenser.
30(2) At least fifty percent of all qualified motor fuel
31dispensers, if there are more than one qualified motor fuel
32dispenser.
33b. (1) A retail dealer complies with an alternative E-15
34access standard if all of the following apply:
35(a) On and after January 1, 2023, the retail dealer does not
-1-1install, replace, or convert a motor fuel storage tank.
2(b) On and after January 1, 2026, the retail dealer
3advertises for sale and sells E-15 gasoline from at least one
4qualifying motor fuel dispenser.
5(2) A retail dealer who no longer complies with the
6alternative E-15 access standard as provided in subparagraph
7(1) shall immediately comply with the general E-15 access
8standard as provided in paragraph “a”.
9c. The E-15 access standard does not prohibit a retail
10dealer owning or operating a retail motor fuel site from
11advertising for sale and selling motor fuel from any number of
12nonqualifying motor fuel dispensers. A nonqualifying motor
13fuel dispenser is limited to any of the following:
14(1) A dispenser that exclusively dispenses any of the
15following:
16(a) Aviation fuel.
17(b) Diesel fuel.
18(c) Kerosene.
19(2) A dispenser that is part of a tank vehicle as defined
20in section 321.1 that is not used to dispense gasoline on the
21premises of the retail motor fuel site.
223. a. A retail dealer is not in violation of this section
23during any period of noncompliance with the E-15 access
24standard caused by an excusable event. An excusable event is
25limited to any of the following:
26(1) The maintenance, repair, or reconditioning of motor
27fuel storage and dispensing infrastructure.
28(2) The installation, expansion, replacement, or conversion
29of motor fuel storage and dispensing infrastructure.
30b. The department may require that a retail dealer
31notify the department that an excusable event as described
32in paragraph “a” is planned to occur, is occurring, or has
33occurred. The department may inspect the applicable retail
34motor fuel site to determine whether the noncompliance is
35caused by an excusable event.
-2- 14. a. This section shall be implemented on January 1, 2023.
2b. This subsection is repealed January 2, 2023.
3 Sec. 3. NEW SECTION. 214A.33 Suspension of E-15 access
4standard by order issued by governor.
51. The governor may issue or renew an executive order that
6temporarily suspends the requirement in section 214A.32 that a
7retail dealer comply with the E-15 access standard at a retail
8motor fuel site owned or operated by the retail dealer.
92. The E-15 access standard suspension order as described in
10subsection 1 must be supported by the governor’s determination
11that any of the following apply:
12a. There is an inadequate supply of E-15 gasoline.
13b. The market price of E-15 gasoline may cause consumers to
14suffer economic hardship.
15c. Existing motor fuel storage and dispensing infrastructure
16is not capable of storing and dispensing E-15 gasoline.
173. The governor may issue or renew an executive order under
18this section on a statewide or regional basis.
194. The E-15 access standard suspension order shall take
20effect on its date of publication in the Iowa administrative
21bulletin, unless the order specifies a later date. The order
22shall expire one year from its effective date unless a shorter
23period is stated in the order. The early expiration of the
24order may also occur based on circumstances described in the
25order.
265. a. This section shall be implemented on January 1, 2023.
27b. This subsection is repealed January 2, 2023.
28 Sec. 4. NEW SECTION. 214A.34 Waiver of E-15 access
29standard by order issued by secretary of agriculture — E-15
30unavailability.
311. The secretary of agriculture may issue an administrative
32order that temporarily waives the requirement in section
33214A.32 that a retail dealer comply with the E-15 access
34standard at a retail motor fuel site owned or operated by the
35retail dealer based on E-15 gasoline availability.
-3- 12. A retail dealer may apply for an E-15 unavailability
2waiver order as described in subsection 1 by submitting an
3application to the department in a manner and according to
4procedures required by the department.
5a. The application must be supported by credible evidence
6that the retail dealer has not been able to reasonably obtain
7E-15 gasoline to be advertised for sale and sold at the retail
8dealer’s retail motor fuel site.
9b. The retail dealer must sign the application which shall
10include a statement that the retail dealer swears and affirms
11that all information in the application completed by the retail
12dealer is true and correct.
133. The department shall publish a copy of the E-15
14unavailability waiver order on the department’s internet site
15within ten days after the order’s issuance.
164. The E-15 unavailability waiver order shall take effect
17on its date of publication on the department’s internet site,
18unless the order specifies a later date. The order shall
19expire six months from its effective date unless a shorter
20period is stated in the order. The early expiration of the
21order may also occur based on circumstances described in the
22order.
235. a. This section shall be implemented on January 1, 2023.
24b. This subsection is repealed January 2, 2023.
25 Sec. 5. NEW SECTION. 214A.35 Waiver of E-15 access standard
26by order issued by secretary of agriculture — E-15 incompatible
27infrastructure.
281. The secretary of agriculture may issue an administrative
29order that temporarily waives the requirement in section
30214A.32 that a retail dealer comply with the E-15 access
31standard at a retail motor fuel site owned or operated by the
32retail dealer based on the incompatibility of the motor fuel
33storage and dispensing infrastructure to store and dispense
34E-15 gasoline.
352. A retail dealer may apply for an E-15 incompatible
-4-1infrastructure waiver order as described in subsection 1 by
2submitting an application to the department in a manner and
3according to procedures required by the department.
4a. The application must be supported by credible evidence
5that the retail dealer is unable to comply with the E-15
6access standard because the motor fuel storage and dispensing
7infrastructure located at the retail motor fuel site is not
8compatible with the use of E-15 gasoline and that the retail
9dealer is eligible for a class 1 or class 2 waiver as provided
10in this section.
11b. The application must provide information required to
12be completed by the retail dealer, which must include an
13inventory and description of motor fuel storage and dispensing
14infrastructure located at the retail motor fuel site.
15c. The department may require a retail dealer to attach any
16supporting documentation to the application, which may include
17an inspection report completed by a person certified by the
18department as a professional retail motor fuel site installer.
19The certified professional retail motor fuel site installer
20may be a licensed engineer or other person who the department
21determines is qualified by education, testing, or experience to
22oversee a project involving the installation, replacement, or
23conversion of motor fuel storage and dispensing infrastructure,
24and who is able to provide a reliable estimate of the project’s
25costs.
26d. The department shall review and evaluate an application
27to determine whether it is supported by credible evidence
28sufficient for the secretary to issue an order granting a
29waiver under this section. The department shall approve or
30disapprove a completed application within one hundred twenty
31days following the date that the application was delivered to
32the department for filing.
33e. The retail dealer must sign the application which shall
34include a statement that the retail dealer swears and affirms
35that all information in the application completed by the retail
-5-1dealer is true and correct. If a certified professional retail
2motor fuel site installer completes an inspection report to
3support an application, the installer shall sign a statement
4that the installer swears and affirms that all information in
5the inspection report completed by the installer is true and
6correct.
7f. The department may inspect the premises of a retail
8motor fuel site during normal business hours to administer and
9enforce the provisions of this section.
10g. The department of agriculture and land stewardship
11may cooperate with the department of natural resources and
12the state fire marshal in administering and enforcing the
13provisions of this section.
143. The department shall publish a copy of the E-15
15incompatible infrastructure waiver order on the department’s
16internet site within ten days after the order’s issuance. The
17order shall take effect on its date of publication, unless the
18order specifies a later date.
194. a. The secretary of agriculture shall terminate the
20E-15 incompatible infrastructure waiver order if a terminable
21event has occurred. A terminable event is limited to any of
22the following:
23(1) The failure of a retail dealer to be licensed as
24required under section 214.2 to use a commercial weighing and
25measuring device when dispensing gasoline.
26(2) The cessation of the retail dealer’s business of
27advertising for sale or selling gasoline at the retail motor
28fuel site.
29(3) The installation, replacement, or conversion of a motor
30fuel storage tank located at the retail motor fuel site.
31b. The department may require that a retail dealer
32notify the department that a terminable event as described
33in paragraph “a” is planned to occur, is occurring, or has
34occurred.
355. a. The secretary of agriculture may issue an E-15
-6-1incompatible infrastructure class 1 waiver order. If the
2department determines an inspection of the retail motor
3fuel site is necessary, it may either conduct the inspection
4or accept an inspection report completed by a certified
5professional retail motor fuel site installer.
6b. The order must be supported by credible evidence that
7all motor fuel storage tanks used to store gasoline that are
8located at the retail motor fuel site fall within any of the
9following categories:
10(1) Each motor fuel storage tank not constructed of
11fiberglass was installed during or prior to 1985.
12(2) Each motor fuel storage tank constructed of fiberglass
13was installed during or prior to the following years:
14(a) For a double-wall fiberglass underground motor fuel
15storage tank, 1991.
16(b) For a single-wall fiberglass underground motor fuel
17storage tank, 1996.
186. The secretary of agriculture may issue an E-15
19incompatible infrastructure class 2 waiver order which shall
20be based on an inspection of the retail motor fuel site. The
21department may either conduct the inspection and complete an
22inspection report or file and review a completed inspection
23report submitted by a certified professional retail motor fuel
24site installer.
25a. The inspection report must include all of the following:
26(1) A completed checklist of items adopted as part of a form
27used by the department to confirm that the motor fuel storage
28and dispensing infrastructure located at the retail motor fuel
29site is not compatible with E-15 gasoline.
30(2) The total estimated cost of improving the retail
31motor fuel site to comply with the E-15 access standard by
32installing, replacing, or converting the motor fuel storage
33and dispensing infrastructure located at the retail motor fuel
34site.
35b. (1) The department shall determine whether to issue an
-7-1E-15 incompatible infrastructure class 2 waiver order based
2on an eligibility assessment which shall calculate all of the
3following:
4(a) The total estimated cost of improvement which equals the
5total estimated cost of improving the retail motor fuel site to
6comply with the E-15 access standard based on the department’s
7analysis of the inspection report described in paragraph “a”.
8The total estimated cost of improvement shall only include
9costs used to calculate the amount of financial incentives
10that may be awarded by the renewable fuel infrastructure
11board to a retail dealer participating in the renewable fuel
12infrastructure program for retail motor fuel sites as provided
13in section 159A.14.
14(b) The E-15 infrastructure base amount which equals the
15maximum cost necessary to be incurred by the retail dealer
16in order to receive the total amount of standard financial
17incentives that could be awarded to the retail dealer under the
18renewable fuel infrastructure program for retail motor fuel
19sites as provided in section 159A.14 in order to comply with
20the E-15 access standard. The department’s calculation shall
21not include any of the following:
22(i) The amount of any prior financial incentives awarded
23to the retail dealer under the renewable fuel infrastructure
24program for retail motor fuel sites.
25(ii) Whether the retail dealer is applying for or may be
26awarded any future financial incentives under the renewable
27fuel infrastructure program for retail motor fuel sites.
28(2) A retail dealer is only eligible to be issued an
29E-15 incompatible infrastructure class 2 waiver order if
30the department determines that the total estimated cost of
31improvement as described in subparagraph (1), subparagraph
32division (a), exceeds the E-15 infrastructure base amount as
33described in subparagraph (1), subparagraph division (b).
347. a. This section shall be implemented on January 1, 2023.
35b. This subsection is repealed January 2, 2023.
-8- 18. This section is repealed January 1, 2041.
2 Sec. 6. NEW SECTION. 214A.36 Disciplinary action.
31. The department may refuse to issue or renew and may
4suspend or revoke a license issued to a retail dealer pursuant
5to section 214.2 for not complying with the E-15 access
6standard as provided in section 214A.32, including rules
7adopted by the department pursuant to section 214A.1A to
8administer or enforce that section.
92. a. This section shall be implemented on January 1, 2023.
10b. This subsection is repealed January 2, 2023.
11 Sec. 7. ISSUANCE OF ORDERS SUSPENDING OR WAIVING E-15 ACCESS
12STANDARD.
131. The governor may issue an E-15 access standard suspension
14order as provided in section 214A.33, as enacted in this part
15of this division of this Act, prior to January 1, 2023, if the
16governor determines it is necessary to issue the order prior
17to that date.
182. The secretary of agriculture may issue an E-15
19unavailability waiver order as provided in section 214A.34, as
20enacted in this part of this division of this Act, prior to
21January 1, 2023, if the secretary determines it is necessary to
22issue the order prior to that date.
233. The secretary of agriculture may issue an E-15
24incompatible infrastructure waiver order as provided in section
25214A.35, as enacted in this part of this division of this Act,
26prior to January 1, 2023, if the secretary determines it is
27necessary to issue the order prior to that date.
28 Sec. 8. ADOPTION OF RULES IMPLEMENTING E-15 ACCESS STANDARD
29AND E-15 INCOMPATIBLE INFRASTRUCTURE WAIVER ORDER.
301. The department of agriculture and land stewardship
31shall adopt rules pursuant to chapter 17A prior to January 1,
322023, as necessary to administer and enforce the E-15 access
33standard, as provided in section 214A.32, as enacted in this
34part of this division of this Act.
352. The department of agriculture and land stewardship shall
-9-1adopt rules pursuant to chapter 17A prior to January 1, 2023,
2as necessary to administer and enforce an E-15 incompatible
3infrastructure waiver order, as provided in section 214A.35, as
4enacted in this part of this division of this Act.
5PART B
6RELATED RENEWABLE FUELS AND INFRASTRUCTURE PROVISIONS
7 Sec. 9. Section 159A.6, subsection 1, paragraph c, Code
82022, is amended by striking the paragraph.
9 Sec. 10. Section 214.1, Code 2022, is amended by adding the
10following new subsections:
11 NEW SUBSECTION. 1A. “Department” means the department of
12agriculture and land stewardship.
13 NEW SUBSECTION. 1B. “E-15 gasoline” or “E-15” means the
14same as defined in section 214A.1.
15 NEW SUBSECTION. 3A. “Motor fuel dispenser” or “dispenser”
16means equipment that is the part of motor fuel storage
17and dispensing infrastructure that includes mechanical or
18electrical systems that operate a motor fuel pump dispensing
19motor fuel from a motor fuel storage tank to the end point of
20the equipment’s nozzle.
21 NEW SUBSECTION. 4A. a. “Motor fuel storage and dispensing
22infrastructure” or “infrastructure” means equipment used to do
23any of the following:
24(1) Store and dispense motor fuel.
25(2) Store, blend, and dispense motor fuel.
26b. “Motor fuel storage and dispensing infrastructure” or
27“infrastructure” includes but is not limited to a motor fuel
28storage tank, motor fuel pump or motor fuel blender pump, motor
29fuel dispenser, and associated pipes, hoses, nozzles, tubes,
30lines, fittings, valves, filters, seals, and covers.
31 Sec. 11. Section 214.1, subsections 3, 4, and 5, Code 2022,
32are amended to read as follows:
333. “Motor fuel blender pump” or “blender pump” means a motor
34fuel meter pump that measures and dispenses a type of motor
35fuel that is blended from to formulate two or more different
-10-1types classifications of that motor fuels and which may
2dispense more than one type of blended motor fuel.
34. “Motor fuel pump” means the part of motor fuel storage
4and dispensing infrastructure that is a meter or similar
5commercial weighing and measuring device used to measure and
6dispense motor fuel originating from a motor fuel storage tank,
7on a retail basis.
85. “Motor fuel storage tank” or “storage tank” means the part
9of motor fuel storage and dispensing infrastructure that is an
10aboveground or belowground container that is constituting a
11fixture used to store an accumulation of motor fuel.
12 Sec. 12. Section 214.9, Code 2022, is amended to read as
13follows:
14214.9 Self-service motor fuel pumps dispensers.
15A self-service motor fuel dispenser operating a motor fuel
16 pump located at a retail motor fuel site may be equipped with
17an automatic latch-open device on the fuel dispensing hose
18nozzle only if the nozzle valve is the automatic closing type.
19 Sec. 13. NEW SECTION. 214.12 Inspections of motor fuel
20dispensers — E-15 access standard.
211. In conducting an inspection under section 214.11, an
22inspector for the department shall determine if a retail dealer
23is advertising for sale and selling E-15 gasoline at a retail
24motor fuel site in compliance with the E-15 access standard as
25provided in section 214A.32.
262. a. This section shall be implemented on January 1, 2023.
27b. This subsection is repealed January 2, 2023.
28 Sec. 14. Section 214A.1, Code 2022, is amended by adding the
29following new subsections:
30 NEW SUBSECTION. 2A. “B-20 biodiesel fuel” or “B-20” means
31a classification of biodiesel blended fuel formulated with a
32percentage of twenty percent by volume of biodiesel, if the
33formulation meets the standards provided in section 214A.2.
34 NEW SUBSECTION. 12A. “E-15 gasoline” or “E-15” means a
35classification of ethanol blended gasoline formulated with a
-11-1percentage of fifteen percent by volume of ethanol, if the
2formulation meets the standards provided in section 214A.2.
3 NEW SUBSECTION. 18A. “Motor fuel dispenser” or “dispenser”
4means the same as defined in section 214.1.
5 NEW SUBSECTION. 19A. “Motor fuel storage and dispensing
6infrastructure” or “infrastructure” means the same as defined
7in section 214.1.
8 Sec. 15. NEW SECTION. 214A.1A Rules.
9The department shall adopt rules necessary to administer and
10enforce this chapter in conjunction with chapter 214.
11 Sec. 16. Section 214A.2, subsection 1, Code 2022, is amended
12to read as follows:
131. The department shall adopt rules pursuant to chapter
1417A for carrying out this chapter. The rules may include but
15are not limited to specifications section 214A.1A relating
16to standards and classifications for types of motor fuel,
17including but not limited to gasoline and diesel fuel. The
18rules shall provide standards and classifications for a
19 renewable fuel such as ethanol blended gasoline, biobutanol
20blended gasoline, biodiesel, biodiesel blended fuel, and
21motor renewable fuel components such as an a biofuel or other
22 oxygenate. In the interest of uniformity, the department shall
23adopt by reference other specifications standards relating to
24tests and standards specifications for types of motor fuel,
25including renewable fuel and motor fuel components, established
26by the United States environmental protection agency and
27A.S.T.M. international.
28 Sec. 17. Section 214A.2, subsection 4, paragraph b, Code
292022, is amended by adding the following new subparagraph:
30 NEW SUBPARAGRAPH. (5) (a) Biodiesel blended fuel
31classified as higher than B-20 must conform to standards
32adopted by the department.
33(b) The rules adopted by the department of agriculture
34and land stewardship establishing standards for biodiesel
35blended fuel classified as higher than B-20 shall take effect
-12-1not earlier than sixty days after the date of filing in
2accordance with section 17A.5, subsection 2, paragraph “a”. The
3department of agriculture and land stewardship shall notify
4the legislative services agency, the governor, the department
5of natural resources, and the department of revenue of the
6effective date of the rules at least thirty days prior to the
7effective date of the rules.
8 Sec. 18. Section 214A.3, subsection 2, paragraph b,
9subparagraph (1), Code 2022, is amended by striking the
10subparagraph and inserting in lieu thereof the following:
11(1) A person shall not knowingly falsely advertise ethanol
12blended gasoline by using an inaccurate classification as
13provided in section 214A.2.
14 Sec. 19. Section 214A.3, subsection 2, paragraph b,
15subparagraphs (2) and (3), Code 2022, are amended to read as
16follows:
17(2) A person shall not knowingly falsely advertise
18biobutanol blended gasoline by using an inaccurate designation
19 classification as provided in section 214A.2.
20(3) A person shall not knowingly falsely advertise
21biodiesel blended fuel by using an inaccurate designation
22 classification as provided in section 214A.2.
23 Sec. 20. Section 214A.8, Code 2022, is amended to read as
24follows:
25214A.8 Prohibition.
26A dealer shall not knowingly sell motor fuel or biofuel
27in the state that fails to meet applicable standards and
28classifications as provided in section 214A.2.
29 Sec. 21. Section 214A.11, subsection 2, Code 2022, is
30amended by adding the following new paragraphs:
31 NEW PARAGRAPH. c. (1) A retail dealer who submits an
32application for an E-15 unavailability waiver order under
33section 214A.34 that includes information that is not true and
34correct commits perjury as provided in section 720.2.
35(2) (a) This paragraph “c” shall be implemented on January
-13-11, 2023.
2(b) This subparagraph is repealed January 2, 2023.
3 NEW PARAGRAPH. d. (1) A retail dealer who submits an
4application for an E-15 incompatible infrastructure waiver
5order under section 214A.35 that is not true and correct
6commits perjury as provided in section 720.2.
7(2) A certified professional retail motor fuel site
8installer who submits an inspection report as part of an
9application for an E-15 incompatible infrastructure waiver
10order under section 214A.35 that is not true and correct
11commits perjury under section 720.2.
12(3) (a) This paragraph “d” shall be implemented on January
131, 2023.
14(b) This subparagraph is repealed on January 2, 2023.
15 Sec. 22. Section 214A.20, Code 2022, is amended to read as
16follows:
17214A.20 Limitation on liability.
181. A retail dealer or other marketer, pipeline company,
19refiner, terminal operator, or terminal owner is not liable for
20damages caused by the use of incompatible motor fuel dispensed
21from a motor fuel dispenser located at the retail dealer’s
22retail motor fuel site, if all of the following apply:
23a. The incompatible motor fuel complies with the
24specifications standards for a that type and classification of
25motor fuel as provided in section 214A.2.
26b. The incompatible motor fuel is selected by the end use
27 consumer of the motor fuel.
28c. The incompatible motor fuel is dispensed from a motor
29fuel pump dispenser that correctly labels the type and
30classification of fuel dispensed from a motor fuel storage
31tank.
322. For purposes of this section subsection 1, a motor fuel
33is incompatible with a motor according to the manufacturer of
34the motor.
35 Sec. 23. REPEAL. Section 214A.16, Code 2022, is repealed.
-14-1PART C
2CODE ORGANIZATION
3 Sec. 24. DIRECTIONS TO THE CODE EDITOR — TRANSFERS.
41. The Code editor is directed to make the following
5transfers:
6a. Section 214A.3, as amended in this division of this Act,
7to section 214A.21.
8b. Section 214A.7 to section 214A.22.
9c. Section 214A.8, as amended in this division of this Act,
10to section 214A.23.
11d. Section 214A.19 to section 214A.24.
12e. Section 214A.20, as amended in this division of this Act,
13to section 214A.25.
142. The Code editor shall correct internal references in the
15Code and in any enacted legislation as necessary due to the
16enactment of this section.
17 Sec. 25. DIRECTIONS TO THE CODE EDITOR — SUBCHAPTERS. The
18Code editor is directed to divide the provisions of chapter
19214A, as amended, enacted, or transferred in this division of
20this Act, into subchapters as follows:
211. Subchapter I, including sections 214A.1 through 214A.20.
222. Subchapter II, including sections 214A.21 through
23214A.30.
243. Subchapter III, including sections 214A.31 through
25214A.36.
26DIVISION II
27COMPLIANCE REQUIREMENTS — RENEWABLE FUEL infrastructure
28PART A
29principAL provisions
30 Sec. 26. NEW SECTION. 455G.2A Standards and classifications
31of motor fuel.
32For purposes of this chapter, motor fuel must meet the
33standards and classifications as provided in section 214A.2.
34 Sec. 27. NEW SECTION. 455G.30 Definitions.
35As used in this subchapter, unless the context otherwise
-15-1requires:
21. “Biodiesel blended fuel” means the same as defined in
3section 214A.1
42. “Department” means the department of natural resources.
53. “Diesel fuel” means the same as defined in section
6214A.1.
74. “Diesel fuel storage and dispensing infrastructure” or
8“diesel infrastructure” means motor fuel storage and dispensing
9infrastructure as defined in section 214.1 used to store and
10dispense diesel fuel, including biodiesel blended diesel fuel,
11at a retail motor fuel site as defined in section 214A.1.
125. “Ethanol blended gasoline” means the same as defined in
13section 214A.1.
146. “Gasoline storage and dispensing infrastructure”
15or “gasoline infrastructure” means motor fuel storage and
16dispensing infrastructure as defined in section 214.1 used
17to store and dispense gasoline, including ethanol blended
18gasoline, at a retail motor fuel site as defined in section
19214A.1.
207. “Retail dealer” means the same as defined in section
21214A.1.
22 Sec. 28. Section 455G.31, subsections 1 and 3, Code 2022,
23are amended by striking the subsections.
24 Sec. 29. Section 455G.31, subsection 2, Code 2022, is
25amended to read as follows:
262. A Subject to section 455G.32, a retail dealer may
27use gasoline storage and dispensing infrastructure to store
28and dispense ethanol blended gasoline classified as E-9
29 E-10 or higher if the department of natural resources under
30this subchapter or the state fire marshal under chapter 101
31determines that it the gasoline infrastructure is compatible
32with the classification of ethanol blended gasoline being used.
33 Sec. 30. NEW SECTION. 455G.32 E-85 gasoline compatible
34infrastructure — compliance requirement.
351. A retail dealer shall not install, replace, or convert
-16-1gasoline storage and dispensing infrastructure unless the
2installed, replaced, or converted gasoline infrastructure is
3capable of storing and dispensing ethanol blended gasoline
4classified as E-85.
52. The infrastructure must be all of the following:
6a. Listed as compatible for use with ethanol blended
7gasoline classified as E-85 by an independent testing
8laboratory or as approved by the manufacturer.
9b. Approved by the department or state fire marshal subject
10to conditions determined necessary by the department or state
11fire marshal. The department or state fire marshal may waive
12the requirement in paragraph “a” upon satisfaction that a
13substitute requirement serves the same purpose.
14 Sec. 31. NEW SECTION. 455G.33 B-20 diesel fuel compatible
15infrastructure — compliance requirement.
161. A retail dealer shall not install, replace, or convert
17diesel fuel storage and dispensing infrastructure unless the
18installed, replaced, or converted diesel fuel infrastructure
19is capable of storing and dispensing biodiesel blended fuel
20classified as B-20 or higher.
212. The infrastructure must be all of the following:
22a. Listed as compatible for use with biodiesel blended
23fuel classified as B-20 or higher by an independent testing
24laboratory or as approved by the manufacturer.
25b. Approved by the department or state fire marshal subject
26to conditions determined necessary by the department or state
27fire marshal. The department or state fire marshal may waive
28the requirement in paragraph “a” upon satisfaction that a
29substitute requirement serves the same purpose.
30 Sec. 32. EFFECTIVE DATE. This part of this division of this
31Act takes effect January 1, 2023.
32PART B
33IMPLEMENTATION
34 Sec. 33. ADMINISTRATIVE RULES. The department of natural
35resources and the state fire marshal may adopt rules under
-17-1chapter 17A prior to the effective date of part A of this
2division of this Act, which rules shall take effect January 1,
32023.
4DIVISION III
5COMPLIANCE REQUIREMENTS — Qualified RENEWABLE FUEL USE BY
6STATE MOTOR VEHICLES
7 Sec. 34. NEW SECTION. 8A.360 Special definitions.
8As used in this part, unless the context otherwise requires:
91. “Biodiesel blended fuel” means the same as defined in
10section 214A.1.
112. “Biofuel” means the same as defined in section 214A.1.
123. “Determination period” means any twelve-month period
13beginning January 1 and ending December 31.
144. “Ethanol blended gasoline” means the same as defined in
15section 214A.1.
165. “Qualified renewable fuel” means ethanol blended
17gasoline or biodiesel blended fuel that meets the standards
18and classifications for that type of motor fuel as provided in
19section 214A.2.
20 Sec. 35. NEW SECTION. 8A.360A Classification of qualified
21renewable fuels.
22For purposes of this part, a qualified renewable fuel must
23meet the same standards and classifications as provided in
24section 214A.2.
25 Sec. 36. Section 8A.362, subsection 3, paragraph b, Code
262022, is amended by striking the paragraph and inserting in
27lieu thereof the following:
28b. The director shall provide for the purchase and operation
29of motor vehicles using qualified renewable fuels and for the
30purchase of qualified renewable fuels used to operate those
31motor vehicles as provided in section 8A.368.
32 Sec. 37. NEW SECTION. 8A.368 Motor vehicle purchases —
33qualified renewable fuels.
341. A motor vehicle operating using an internal combustion
35engine powered by gasoline or diesel fuel as described in
-18-1section 8A.362 shall use the highest possible classification of
2a qualified renewable fuel if all of the following apply:
3a. The manufacturer of the motor vehicle or the United
4States environmental protection agency expressly states that
5the classification of a qualified renewable fuel is compatible
6with the motor vehicle’s normal operation.
7b. That classification of a qualified renewable fuel is
8commercially available in the region where the motor vehicle
9is being operated.
10c. No emergency situation exists that requires the immediate
11use of a motor fuel regardless of whether it has been blended
12with a biofuel.
132. If the highest possible classification of a qualified
14renewable fuel is available to power an engine used to operate
15a motor vehicle as provided in subsection 1, a state-issued
16credit card shall not be used to purchase motor fuel other than
17that classification of a qualified renewable fuel.
183. A motor vehicle subject to this section shall be affixed
19with a brightly colored, highly visible renewable fuel sticker.
20The qualified renewable fuel sticker shall be designed by
21the department of agriculture and land stewardship to notify
22the traveling public that the motor vehicle is operating
23using an internal combustion engine powered by the highest
24possible classification of that qualified renewable fuel. The
25department of administrative services shall distribute the
26stickers to state agencies maintaining a state motor pool.
27However, a qualified renewable fuel sticker is not required to
28be affixed to an unmarked motor vehicle used for purposes of
29providing law enforcement or security.
304. As part of the department’s competitive bidding
31procedure for the purchase of a motor vehicle operating using
32an internal combustion engine powered by diesel fuel, the
33director shall require a bidder to certify that the motor
34vehicle’s manufacturer expressly states that the engine is
35capable of being powered by biodiesel blended fuel classified
-19-1as B-20 or higher.
2 Sec. 38. NEW SECTION. 8A.369 Motor vehicle purchases —
3qualified renewable fuels — reports.
41. The department shall compile information regarding the
5department’s compliance with section 8A.368 during the previous
6determination period. The information shall include all of the
7following:
8a. Of the motor vehicles used to routinely travel on the
9state’s highways that operate using internal combustion engines
10powered by gasoline, all of the following:
11(1) The total number of such motor vehicles according to
12model year.
13(2) The total number of such motor vehicles according
14to model year that are capable of operating using internal
15combustion engines powered by ethanol blended gasoline
16classified as E-15 and E-85 according to the express warranty
17of the motor vehicle’s manufacturer.
18(3) The total number of gallons of ethanol blended gasoline
19classified as E-15, and the total number of gallons of ethanol
20blended gasoline classified as E-85, purchased during the
21preceding determination period, to the extent such information
22may be practically obtained.
23b. Of the motor vehicles used to routinely travel on the
24state’s highways that operate using internal combustion engines
25powered by diesel fuel, all of the following:
26(1) The total number of such motor vehicles according to
27model year.
28(2) The total number of such motor vehicles according
29to model year that are capable of operating using internal
30combustion engines powered by biodiesel blended fuel classified
31as B-20 or higher according to the express warranty of the
32motor vehicle’s manufacturer.
33(3) The total number of gallons of biodiesel blended fuel
34classified as B-20 or higher purchased during the preceding
35determination period, to the extent such information may be
-20-1practically obtained.
22. The department of administrative services shall
3prepare a state fleet qualified renewable fuels compliance
4report which shall consolidate information compiled by the
5department under subsection 1 together with information
6compiled by the commission for the blind pursuant to section
7216B.3, institutions governed by the state board of regents
8pursuant to section 262.25A, the department of transportation
9pursuant to section 307.21, and the department of corrections
10pursuant to section 904.312A. The department of administrative
11services shall submit the state fleet qualified renewable fuels
12compliance report to the governor and general assembly not
13later than March 1 of each year.
14 Sec. 39. Section 216B.3, subsection 16, paragraph a, Code
152022, is amended by striking the paragraph and inserting in
16lieu thereof the following:
17a. Provide for the purchase of qualified renewable fuels
18to power internal combustion engines that are used to operate
19motor vehicles and for the purchase of motor vehicles operating
20using engines powered by qualified renewable fuels in the
21same manner required for the director of the department of
22administrative services pursuant to section 8A.368. The
23commission shall compile information regarding compliance
24with the provisions of this paragraph in the same manner as
25the department of administrative services pursuant to section
268A.369. The commission shall cooperate with the department
27of administrative services in preparing the annual state
28fleet qualified renewable fuels compliance report regarding
29compliance with this paragraph as provided in section 8A.369.
30 Sec. 40. Section 262.25A, subsection 2, Code 2022, is
31amended by striking the subsection and inserting in lieu
32thereof the following:
332. An institution shall provide for the purchase of
34qualified renewable fuels to power internal combustion engines
35that are used to operate motor vehicles and for the purchase
-21-1of motor vehicles operating using engines powered by qualified
2renewable fuels in the same manner required for the director of
3the department of administrative services pursuant to section
48A.368. An institution shall compile information regarding
5compliance with the provisions of this subsection in the same
6manner as the department of administrative services pursuant
7to section 8A.369. The state board of regents shall cooperate
8with the department of administrative services in preparing
9the annual state fleet qualified renewable fuels compliance
10report regarding compliance with this subsection as provided
11in section 8A.369.
12 Sec. 41. Section 307.21, subsection 4, Code 2022, is amended
13by striking the subsection and inserting in lieu thereof the
14following:
154. The administrator shall provide for the purchase
16of qualified renewable fuels to power internal combustion
17engines that are used to operate motor vehicles and for the
18purchase of motor vehicles operating using engines powered
19by qualified renewable fuels in the same manner required for
20the director of the department of administrative services
21pursuant to section 8A.368. The department of transportation
22shall compile information regarding compliance with the
23provisions of this subsection in the same manner as the
24department of administrative services pursuant to section
258A.369. The department of transportation shall cooperate
26with the department of administrative services in preparing
27the annual state fleet qualified renewable fuels compliance
28report regarding compliance with this subsection as provided
29in section 8A.369.
30 Sec. 42. Section 904.312A, subsection 1, Code 2022, is
31amended by striking the subsection and inserting in lieu
32thereof the following:
331. The department of corrections shall provide for the
34purchase of qualified renewable fuels to power internal
35combustion engines that are used to operate motor vehicles and
-22-1for the purchase of motor vehicles operating using engines
2powered by qualified renewable fuels in the same manner
3required for the director of the department of administrative
4services pursuant to section 8A.368. The department of
5corrections 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.369. The department of corrections shall cooperate with
9the department of administrative services in preparing the
10annual state fleet qualified renewable fuels compliance report
11regarding compliance with this subsection as provided in
12section 8A.369.
13 Sec. 43. STATE FLEET QUALIFIED RENEWABLE FUELS COMPLIANCE
14REPORT. The department of administrative services shall submit
15its first state fleet qualified renewable fuels compliance
16report as required pursuant to section 8A.369, as enacted in
17this division of this Act, not later than July 1, 2023.
18DIVISION IV
19RENEWABLE FUEL STANDARDS AND
20CLASSIFICATIONS — PROMOTIONAL INITIATIVES APPLIED
21TO INCOME TAXES
22PART A
23E-85 GASOLINE PROMOTION TAX CREDIT
24 Sec. 44. Section 422.11O, subsection 2, paragraph b, Code
252022, is amended to read as follows:
26b. The tax credit shall apply to E-85 gasoline that meets
27the standards for that classification as provided in section
28214A.2.
29 Sec. 45. Section 422.11O, subsection 5, Code 2022, is
30amended to read as follows:
315. a. A retail dealer is eligible to claim an E-85 gasoline
32promotion tax credit as provided in this section even though
33the retail dealer claims an E-15 plus gasoline promotion tax
34credit pursuant to section 422.11Y for the same tax year.
35b. This subsection is repealed January 1, 2026.
-23-1 Sec. 46. Section 422.11O, subsection 8, Code 2022, is
2amended to read as follows:
38. This section is repealed on January 1, 2025 2028.
4 Sec. 47. Section 422.33, subsection 11B, paragraph c, Code
52022, is amended to read as follows:
6c. This subsection is repealed on January 1, 2025 2028.
7 Sec. 48. 2006 Iowa Acts, chapter 1142, section 49,
8subsection 3, as amended by 2011 Iowa Acts, chapter 113,
9section 20, and 2016 Iowa Acts, chapter 1106, section 6, is
10amended to read as follows:
113. For a retail dealer who may claim an E-85 gasoline
12promotion tax credit under section 422.11O or 422.33,
13subsection 11B, as enacted in this Act and amended in
14subsequent Acts, in calendar year 2024 2027 and whose tax
15year ends prior to December 31, 2024 2027, the retail dealer
16may continue to claim the tax credit in the retail dealer’s
17following tax year. In that case, the tax credit shall be
18calculated in the same manner as provided in section 422.11O
19or 422.33, subsection 11B, as enacted in this Act and amended
20in subsequent Acts, for the remaining period beginning on the
21first day of the retail dealer’s new tax year until December
2231, 2024 2027. For that remaining period, the tax credit shall
23be calculated in the same manner as a retail dealer whose tax
24year began on the previous January 1 and who is calculating the
25tax credit on December 31, 2024 2027.
26PART B
27BIODIESEL BLENDED FUEL TAX CREDIT
28 Sec. 49. Section 422.11P, subsection 3, paragraph b, Code
292022, is amended to read as follows:
30b. The tax credit shall apply to biodiesel blended fuel
31classified as provided in this section, if the classification
32meets the standards provided in section 214A.2. In ensuring
33that biodiesel blended fuel meets the classification
34requirements of this section, the department shall take
35into account reasonable variances due to testing and other
-24-1limitations. The department shall adopt rules to provide that
2where a blending error occurs and an insufficient amount of
3biodiesel has inadvertently been blended with petroleum-based
4diesel fuel so that the mixture fails to qualify as B-11 or
5higher a one percent tolerance applies when classifying the
6biodiesel blended fuel.
7 Sec. 50. Section 422.11P, subsection 4, Code 2022, is
8amended by striking the subsection and inserting in lieu
9thereof the following:
104. A retail dealer whose tax year is on a calendar
11year basis shall calculate the amount of the tax credit by
12multiplying a designated rate by the retail dealer’s total
13biodiesel blended fuel gallonage as provided in section 452A.31
14which qualifies under this subsection.
15a. In order to qualify for the tax credit, the biodiesel
16blended fuel must be classified as B-11 or higher as provided
17in paragraph “b”.
18b. The designated rate is determined as follows:
19(1) For biodiesel blended fuel classified as B-11 or higher
20but not as high as B-20, the designated rate is five cents.
21(2) For biodiesel blended fuel classified as B-20 or higher
22but not as high as B-30, the designated rate is seven cents.
23However, a classification higher than B-20 does not qualify
24for a tax credit under this subparagraph unless standards for
25that classification have been established by the department of
26agriculture and land stewardship pursuant to section 214A.2.
27(3) For biodiesel blended fuel classified as B-30 or
28higher, the designated rate is ten cents. A classification of
29B-30 or higher does not qualify for a tax credit under this
30subparagraph unless standards for that classification have
31been established by the department of agriculture and land
32stewardship pursuant to section 214A.2.
33 Sec. 51. Section 422.11P, subsection 8, Code 2022, is
34amended to read as follows:
358. This section is repealed January 1, 2025 2028.
-25-1 Sec. 52. Section 422.33, subsection 11C, paragraph c, Code
22022, is amended to read as follows:
3c. This subsection is repealed on January 1, 2025 2028.
4 Sec. 53. 2011 Iowa Acts, chapter 113, section 31, as amended
5by 2016 Iowa Acts, chapter 1106, section 10, is amended to read
6as follows:
7SEC. 31. TAX CREDIT AVAILABILITY. For a retail dealer
8who may claim a biodiesel blended fuel promotion tax credit
9under section 422.11P or 422.33, subsection 11C, as amended
10in this Act and amended in subsequent Acts, in calendar year
112024 2027, and whose tax year ends prior to December 31, 2024
12 2027, the retail dealer may continue to claim the tax credit in
13the retail dealer’s following tax year. In that case, the tax
14credit shall be calculated in the same manner as provided in
15section 422.11P or 422.33, subsection 11C, as amended in this
16Act and amended in subsequent Acts, for the remaining period
17beginning on the first day of the retail dealer’s new tax year
18until December 31, 2024 2027. For that remaining period, the
19tax credit shall be calculated in the same manner as a retail
20dealer whose tax year began on the previous January 1 and who
21is calculating the tax credit on December 31, 2024 2027.
22 Sec. 54. EFFECTIVE DATE. This part of this division of this
23Act takes effect January 1, 2023.
24PART C
25E-15 PLUS GASOLINE PROMOTION TAX CREDIT
26 Sec. 55. Section 422.11Y, subsection 4, Code 2022, is
27amended by striking the subsection and inserting in lieu
28thereof the following:
294. A retail dealer whose tax year is on a calendar
30year basis shall calculate the amount of the tax credit by
31multiplying a designated rate by the retail dealer’s total
32ethanol blended gasoline gallonage as provided in section
33452A.31 which qualifies under this subsection.
34a. In order to qualify for the tax credit, the ethanol
35blended gasoline must be classified as E-15 or higher but must
-26-1not be E-85 gasoline.
2b. The designated rate of the tax credit is nine cents.
3 Sec. 56. Section 422.11Y, subsection 9, Code 2022, is
4amended to read as follows:
59. This section is repealed on January 1, 2025 2026.
6 Sec. 57. Section 422.33, subsection 11D, paragraph c, Code
72022, is amended to read as follows:
8c. This subsection is repealed on January 1, 2025 2026.
9 Sec. 58. 2011 Iowa Acts, chapter 113, section 37, as amended
10by 2016 Iowa Acts, chapter 1106, section 3, is amended to read
11as follows:
12SEC. 37. TAX CREDIT AVAILABILITY. For a retail dealer who
13may claim an E-15 plus gasoline promotion tax credit under
14section 422.11Y or 422.33, subsection 11D, as enacted in this
15Act and amended in subsequent Acts, in calendar year 2024
16 2025, and whose tax year ends prior to December 31, 2024 2025,
17the retail dealer may continue to claim the tax credit in the
18retail dealer’s following tax year. In that case, the tax
19credit shall be calculated in the same manner as provided in
20section 422.11Y or 422.33, subsection 11D, as enacted in this
21Act and amended in subsequent Acts, for the remaining period
22beginning on the first day of the retail dealer’s new tax year
23until December 31, 2024 2025. For that remaining period, the
24tax credit shall be calculated in the same manner as a retail
25dealer whose tax year began on the previous January 1 and who
26is calculating the tax credit on December 31, 2024 2025.
27 Sec. 59. EFFECTIVE DATE. This part of this division of this
28Act takes effect January 1, 2023.
29PART D
30ADMINISTRATION
31 Sec. 60. ADMINISTRATIVE RULES. The department of revenue
32may adopt rules under chapter 17A prior to the effective date
33of parts B and C of this division of this Act, which rules shall
34take effect January 1, 2023.
35DIVISION V
-27-1RENEWABLE FUEL STANDARDS
2AND CLASSIFICATIONS — PROMOTIONAL INITIATIVES APPLIED
3TO EXCISE TAX ON ETHANOL BLENDED GASOLINE AND BIODIESEL BLENDED
4FUEL
5PART A
6REPORTING REQUIREMENTS
7 Sec. 61. Section 452A.2, Code 2022, is amended by adding the
8following new subsection:
9 NEW SUBSECTION. 37A. “Renewable fuel” means the same as
10defined in section 214A.1.
11 Sec. 62. NEW SECTION. 452A.2A Standards and classifications
12of fuel.
13For purposes of this chapter, motor fuel, including
14a renewable fuel, must meet the same standards and
15classifications as provided in section 214A.2.
16 Sec. 63. Section 452A.31, subsection 2, paragraph a,
17subparagraph (1), subparagraph division (c), Code 2022, is
18amended to read as follows:
19(c) The total E-15 plus gasoline gallonage which is the
20total number of gallons of ethanol blended gasoline classified
21as E-15 or higher, including E-85 gasoline.
22 Sec. 64. Section 452A.31, subsection 2, paragraph a,
23subparagraph (1), Code 2022, is amended by adding the following
24new subparagraph division:
25 NEW SUBPARAGRAPH DIVISION. (d) The total E-15 gasoline
26gallonage which is the total number of gallons of ethanol
27blended gasoline classified as E-15.
28 Sec. 65. Section 452A.31, subsection 3, paragraph a, Code
292022, is amended to read as follows:
30a. A retail dealer’s total diesel fuel gallonage is the
31total number of gallons of diesel fuel which the retail dealer
32sells and dispenses from all motor fuel pumps operated by
33the retail dealer in this state during a twelve-month period
34beginning January 1 and ending December 31. The retail
35dealer’s total diesel fuel gallonage is divided into the
-28-1following classifications:
2(1) The total biodiesel blended fuel gallonage which is
3the retail dealer’s total number of gallons of biodiesel
4blended fuel. and which includes all of the following
5subclassifications:
6(a) The total B-5 plus gallonage which is the total number
7of gallons of biodiesel blended fuel classified as B-5 or
8higher up to but not including B-11.
9(2) (b) The total B-11 plus gallonage which is the total
10number of gallons of biodiesel blended fuel classified as B-11
11or higher up to but not including B-20.
12(c) The total B-20 plus gallonage which is the total number
13of gallons of biodiesel blended fuel classified as B-20 or
14higher up to but not including B-30.
15(d) The total B-30 plus gallonage which is the total number
16of gallons of biodiesel blended fuel classified as B-30 or
17higher.
18(3) (2) The total nonblended diesel fuel gallonage which
19is the total number of gallons of diesel fuel which is not
20biodiesel or biodiesel blended fuel.
21 Sec. 66. Section 452A.31, subsection 4, paragraph a,
22subparagraph (1), subparagraph division (c), Code 2022, is
23amended to read as follows:
24(c) The aggregate E-15 plus gasoline gallonage which is the
25aggregate total number of gallons of ethanol blended gasoline
26classified as E-15 or higher, including E-85 gasoline.
27 Sec. 67. Section 452A.31, subsection 4, paragraph a,
28subparagraph (1), Code 2022, is amended by adding the following
29new subparagraph division:
30 NEW SUBPARAGRAPH DIVISION. (d) The aggregate E-15 gasoline
31gallonage which is the aggregate total number of gallons of
32ethanol blended gasoline classified as E-15.
33 Sec. 68. Section 452A.31, subsection 5, paragraph a, Code
342022, is amended to read as follows:
35a. The aggregate diesel fuel gallonage is the total number
-29-1of gallons of diesel fuel which all retail dealers sell and
2dispense from all motor fuel pumps operated by the retail
3dealers in this state during a twelve-month period beginning
4January 1 and ending December 31. The aggregate diesel fuel
5gallonage is divided into the following classifications:
6(1) The aggregate biodiesel blended fuel gallonage
7which is the aggregate total number of gallons of biodiesel
8blended fuel. and which includes all of the following
9subclassifications:
10(2) (a) The aggregate B-11 B-5 plus gallonage which is the
11aggregate total number of gallons of biodiesel blended fuel
12classified as B-5 or higher up to but not including B-11 or
13higher.
14(b) The aggregate B-11 plus gallonage which is the aggregate
15total number of gallons of biodiesel blended fuel classified as
16B-11 or higher up to but not including B-20.
17(c) The aggregate B-20 plus gallonage which is the aggregate
18total number of gallons of biodiesel blended fuel classified as
19B-20 or higher up to but not including B-30.
20(d) The aggregate B-30 plus gallonage which is the aggregate
21total number of gallons of biodiesel blended fuel classified
22as B-30 or higher.
23(3) (2) The aggregate nonblended diesel fuel gallonage
24which is the aggregate total number of gallons of diesel fuel
25which is not biodiesel or biodiesel blended fuel.
26 Sec. 69. Section 452A.33, subsection 1, paragraph a,
27unnumbered paragraph 1, Code 2022, is amended to read as
28follows:
29Each retail dealer shall report its total motor fuel
30 gasoline and diesel fuel gallonage for a determination period
31as follows:
32 Sec. 70. Section 452A.33, subsection 1, paragraph b,
33subparagraphs (1) and (2), Code 2022, are amended to read as
34follows:
35(1) The information submitted on a company-wide basis shall
-30-1include the total motor gasoline and diesel fuel gallonage,
2including for each classification and subclassification, sold
3and dispensed by the retail dealer as provided in paragraph “a”
4for all retail motor fuel sites from which the retail dealer
5sells and dispenses motor fuel gasoline or diesel fuel.
6(2) The information submitted on a site-by-site basis shall
7include the total motor gasoline and diesel fuel gallonage,
8including for each classification and subclassification, sold
9and dispensed by the retail dealer as provided in paragraph
10“a” separately for each retail motor fuel site from which the
11retail dealer sells and dispenses motor gasoline or diesel
12 fuel.
13 Sec. 71. Section 452A.33, subsection 1, paragraph c, Code
142022, is amended to read as follows:
15c. The retail dealer shall prepare and submit file the
16report with the department in a manner and according to
17procedures required by the department in compliance with
18section 452A.61. However, the department may require that the
19retail dealer file the report with the department by electronic
20transmission. The department may require that a retail
21dealers report to dealer file the report with the department
22on an annual, quarterly, or monthly basis. The department,
23upon application by a retail dealer, may grant a reasonable
24extension of time to file the report. A retail dealer who
25fails to file the report as required in this section or who
26fails to maintain records required to file the report shall be
27subject to a civil penalty of not more than one hundred dollars
28per occurrence which shall be deposited in the general fund of
29the state.
30 Sec. 72. Section 452A.33, subsection 2, paragraph c, Code
312022, is amended to read as follows:
32c. The report shall not provide information regarding motor
33fuel or gasoline, diesel fuel, or a biofuel which is sold and
34dispensed by an individual retail dealer or at a particular
35retail motor fuel site. The report shall not include a trade
-31-1secret protected as a confidential record pursuant to section
222.7.
3 Sec. 73. EMERGENCY RULES. The department of revenue may
4adopt emergency rules under section 17A.4, subsection 3, and
5section 17A.5, subsection 2, paragraph “b”, to implement the
6provisions of sections 452A.31 and 452A.33 as amended by
7this part of this division of this Act. Any rules adopted
8in accordance with this section shall also be published as a
9notice of intended action as provided in section 17A.4.
10 Sec. 74. EFFECTIVE DATE. This part of this division of this
11Act, being deemed of immediate importance, takes effect upon
12enactment.
13 Sec. 75. RETROACTIVE APPLICABILITY. This part of this
14division of this Act applies retroactively to January 1, 2022.
15PART B
16EXCISE TAX IMPOSED ON GASOLINE AND DIESEL FUEL
17 Sec. 76. Section 452A.3, subsection 1, paragraph b,
18unnumbered paragraph 1, Code 2022, is amended to read as
19follows:
20On and after July 1, 2026 2030, an excise tax of thirty
21cents is imposed on each gallon of ethanol blended gasoline
22classified as E-15 or higher. Before July 1, 2026 2030, the
23rate of the excise tax on ethanol blended gasoline classified
24as E-15 or higher shall be based on the number of gallons of
25ethanol blended gasoline classified as E-15 or higher that are
26distributed in this state as expressed as a percentage of the
27number of gallons of motor fuel distributed in this state,
28which is referred to as the distribution percentage. For
29purposes of this paragraph “b”, only ethanol blended gasoline
30and nonblended gasoline, not including aviation gasoline, shall
31be used in determining the percentage basis for the excise
32tax. The department shall determine the percentage basis
33for each determination period beginning January 1 and ending
34December 31 based on data information from the reports filed
35 submitted to the department for filing pursuant to section
-32-1452A.33. The rate for the excise tax shall apply for the
2period beginning July 1 and ending June 30 following the end of
3the determination period. Before July 1, 2026 2030, the rate
4of the excise tax on each gallon of ethanol blended gasoline
5classified as E-15 or higher shall be as follows:
6 Sec. 77. Section 452A.3, subsection 3, paragraph a,
7subparagraph (1), Code 2022, is amended to read as follows:
8(1) Except as otherwise provided in this section and in
9this subchapter, the rate of the excise tax on each gallon of
10special fuel for diesel engines of motor vehicles used for any
11purpose for the privilege of operating motor vehicles in this
12state, other than biodiesel blended fuel classified as B-11
13 B-20 or higher, is thirty-two and five-tenths cents per gallon.
14 Sec. 78. Section 452A.3, subsection 3, paragraph a,
15subparagraph (2), unnumbered paragraph 1, Code 2022, is amended
16to read as follows:
17Except as otherwise provided in this section and in this
18subchapter, this subparagraph shall apply to the excise tax
19imposed on each gallon of biodiesel blended fuel classified
20as B-11 B-20 or higher used for any purpose for the privilege
21of operating motor vehicles in this state. On and after July
221, 2026 2030, the rate of the excise tax on each gallon of
23biodiesel blended fuel classified as B-11 B-20 or higher is
24thirty-two and five-tenths cents. Before July 1, 2026 2030,
25the rate of the excise tax on each gallon of biodiesel blended
26fuel classified as B-20 or higher shall be based on the number
27of gallons of biodiesel blended fuel classified as B-11 B-20
28 or higher that are distributed in this state as expressed as a
29percentage of the number of gallons of special fuel for diesel
30engines of motor vehicles distributed in this state, which is
31referred to as the distribution percentage. The department
32shall determine the percentage basis for each determination
33period beginning January 1 and ending December 31 based on data
34 information from the reports filed submitted to the department
35for filing pursuant to section 452A.33. The rate of the excise
-33-1tax shall apply for the period beginning July 1 and ending June
230 following the end of the determination period. Before July
31, 2026 2030, the rate of the excise tax on each gallon of
4biodiesel blended fuel classified as B-11 B-20 or higher shall
5be as follows:
6 Sec. 79. EFFECTIVE DATE. This part of this division of this
7Act takes effect July 1, 2024.
8PART C
9DEDUCTION OF EXCISE TAX IMPOSED ON BIOFUEL
10USED IN BLENDING WITH GASOLINE AND DIESEL FUEL
11 Sec. 80. Section 452A.8, subsection 2, paragraph a, Code
122022, is amended by adding the following new subparagraph:
13 NEW SUBPARAGRAPH. (3) (a) The gallonage of gasoline or
14diesel fuel withdrawn from a terminal by a licensee to be
15blended with a biofuel after it is withdrawn from the terminal
16to the extent the tax rate on the gasoline or diesel fuel
17exceeds the tax rate which would be due on the ethanol blended
18gasoline or biodiesel blended fuel pursuant to section 452A.3.
19(b) This subparagraph is repealed July 1, 2030.
20DIVISION VI
21RENEWABLE FUEL STANDARDS AND CLASSIFICATIONS — PROMOTIONAL
22INITIATIVES APPLIED TO SALES AND USE TAX — REFUND PAID TO
23BIODIESEL PRODUCERS
24PART A
25PRINCIPAL PROVISIONS
26 Sec. 81. Section 423.4, subsection 9, Code 2022, is amended
27to read as follows:
289. A person who qualifies as a biodiesel producer as
29provided in this subsection may apply to the director for a
30refund of the amount of the sales or use tax imposed and paid
31upon purchases made by the person.
32a. The person must be engaged in the manufacturing
33of biodiesel who has registered with the United States
34environmental protection agency as a manufacturer according to
35the requirements in 40 C.F.R. §79.4. The biodiesel must be for
-34-1use in biodiesel blended fuel in conformance with the standards
2and classifications in section 214A.2. The person must comply
3with the requirements of this subsection and rules adopted by
4the department pursuant to this subsection.
5b. The amount of the refund shall be calculated by
6multiplying a designated rate by the total number of gallons
7of biodiesel produced by the biodiesel producer in this state
8during each quarter of a calendar year. The designated rate
9shall be two four cents.
10c. A biodiesel producer shall not be eligible to receive
11a refund under this subsection on more than twenty-five
12million gallons of biodiesel produced each calendar year by
13the biodiesel producer at each facility where the biodiesel
14producer manufactures biodiesel.
15d. A person shall obtain a refund by completing forms
16furnished by the department and filed by the person on a
17quarterly basis as required by the department. The department
18shall refund the amount claimed by the person after subtracting
19any amount owing from the sales or use taxes imposed and paid
20upon purchases made by the person.
21e. This subsection is repealed on January 1, 2025 2028.
22 Sec. 82. EFFECTIVE DATE. This part of this division of this
23Act takes effect January 1, 2023.
24PART B
25IMPLEMENTATION
26 Sec. 83. ADMINISTRATIVE RULES. The department of revenue
27may adopt rules under chapter 17A prior to the effective date
28of part A of this division of this Act, which rules shall take
29effect January 1, 2023.
30DIVISION VII
31PROMOTIONAL INITIATIVES — RENEWABLE FUEL INFRASTRUCTURE
32 Sec. 84. Section 159A.11, subsection 6, Code 2022, is
33amended by striking the subsection and inserting in lieu
34thereof the following:
356. “Motor fuel storage and dispensing infrastructure” or
-35-1“infrastructure” means the same as defined in section 214.1.
2 Sec. 85. Section 159A.11, Code 2022, is amended by adding
3the following new subsection:
4 NEW SUBSECTION. 6A. “Motor fuel storage tank” means the
5same as defined in section 214.1.
6 Sec. 86. Section 159A.11, subsection 10, Code 2022, is
7amended by striking the subsection.
8 Sec. 87. Section 159A.12, Code 2022, is amended to read as
9follows:
10159A.12 Classification Standards and classifications of motor
11fuel and renewable fuel.
12For purposes of this subchapter, ethanol blended fuel and
13biodiesel motor fuel shall be classified in the same manner,
14including a renewable fuel, must meet the same standards and
15classifications as provided in section 214A.2.
16 Sec. 88. Section 159A.13, subsection 6, Code 2022, is
17amended by striking the subsection.
18 Sec. 89. Section 159A.14, subsections 1 and 2, Code 2022,
19are amended to read as follows:
201. The purpose of the program is to improve retail
21motor fuel sites by installing, replacing, or converting
22infrastructure to be used to store, blend, or dispense
23renewable fuel. The infrastructure shall be ethanol
24infrastructure or biodiesel infrastructure.
25a. (1) Ethanol infrastructure shall be designed and used
26exclusively have the capacity to do any of the following:
27(a) Store and dispense E-15 gasoline. At least for the
28period beginning on September 16 and ending on May 31 of each
29year, the ethanol infrastructure must be used to store and
30dispense E-15 gasoline as a registered fuel recognized by the
31United States environmental protection agency.
32(b) Store and dispense E-85 gasoline.
33(c) (b) Store, blend, and dispense motor fuel ethanol or
34ethanol blended gasoline from a motor fuel blender pump. The
35ethanol infrastructure must be used for the storage of ethanol
-36-1or ethanol blended gasoline, or for blending ethanol with
2gasoline. The ethanol infrastructure must at least include
3a motor fuel blender pump which that dispenses different
4classifications of ethanol blended gasoline and allows E-15
5gasoline and E-85 gasoline to be dispensed at all times that
6the blender pump is operating.
7(2) Biodiesel infrastructure shall be designed and used
8exclusively have the capacity to do any of the following:
9(a) Store and dispense biodiesel or biodiesel blended fuel
10classified as B-20 or higher.
11(b) Blend or Store, blend, and dispense biodiesel fuel
12from a motor fuel blender pump. The biodiesel infrastructure
13must at least include a motor fuel blender pump that dispenses
14different classifications of biodiesel blended fuel and allows
15biodiesel blended fuel classified as B-5 or higher to be
16dispensed at all times that the blender pump is operating.
17b. The infrastructure must be part of the premises of
18a retail motor fuel site operated by a retail dealer. The
19infrastructure shall not include a tank vehicle.
202. a. A person may apply to the department to receive
21financial incentives on a cost-share basis according to
22procedures required by the department. The department shall
23accept a timely received application to improve a retail
24motor fuel site as provided in this section and forward the
25applications that application to the underground storage tank
26fund infrastructure board, as required by that the board, for
27evaluation and recommendation. The underground storage tank
28fund board may rank the applications with comments and shall
29forward them to the infrastructure board for its approval or
30disapproval.
31b. The application shall allow the department to determine
32whether the person is a retail dealer assigned special status.
33The department shall assign the person special status if
34the person does not comply with the E-15 access standard
35as provided in section 214A.32 only because the person is
-37-1ineligible to be issued an E-15 incompatible infrastructure
2class 2 waiver order for that retail motor fuel site as
3provided in section 214A.35, subsection 6.
4c. The infrastructure board may establish a system to
5rank applications for approval. In ranking applications, the
6infrastructure board may provide special priority to any of the
7following:
8(1) A retail motor fuel site that has been constructed and
9is operating.
10(2) (a) A retail motor fuel site owned or operated by a
11person who the department assigns special status as provided
12in paragraph “b”.
13(b) (i) This subparagraph shall be implemented on January
141, 2023.
15(ii) This subparagraph division is repealed January 2,
162023.
17d. The department shall award financial incentives on a
18cost-share basis to an eligible person whose application was
19approved by the infrastructure board.
20 Sec. 90. Section 159A.14, subsection 3, unnumbered
21paragraph 1, Code 2022, is amended to read as follows:
22The infrastructure board shall approve cost-share
23agreements executed by the department and persons that the
24infrastructure board determines are eligible as provided in
25this section, according to terms and conditions required by the
26infrastructure board. The infrastructure board shall determine
27the amount of the financial incentives to be awarded to a
28person participating in the program. The determination may be
29based on applications prioritized for approval as described in
30subsection 2. In order to be eligible to participate in the
31program, all of the following must apply:
32 Sec. 91. Section 159A.14, subsection 5, Code 2022, is
33amended to read as follows:
345. An award of financial incentives to a participating
35person shall be on a cost-share basis in the form of a grant.
-38-1To participate in the program, an eligible person must execute
2a cost-share agreement with the department as approved by
3the infrastructure board in which the person contributes a
4percentage of the total costs related to improving the retail
5motor fuel site.
6a. A cost-share agreement shall be for a three-year period
7or a five-year period.
8b. (1) For the term of an agreement to improve a retail
9motor fuel site by installing, replacing, or converting ethanol
10infrastructure, the participating person must use the ethanol
11infrastructure to store and dispense, or store, blend, and
12dispense, ethanol blended gasoline classified as E-15 or
13higher.
14(2) For the term of an agreement to improve a motor
15fuel site by installing, replacing, or converting biodiesel
16infrastructure, the participating person must use the biodiesel
17infrastructure to store and dispense, or store, blend, and
18dispense, biodiesel blended fuel classified as B-5 or higher.
19However, at least for the period beginning April 1 and ending
20October 31 of each year, the participating person must use
21the biodiesel infrastructure to store and dispense, or store,
22blend, and dispense, biodiesel blended fuel classified as B-11
23or higher.
24c. A cost-share agreement shall include provisions for
25standard financial incentives or standard financial incentives
26and supplemental financial incentives as provided in this
27subsection. The infrastructure board may approve multiple
28improvements to the same retail motor fuel site for the full
29amount available for both ethanol infrastructure and biodiesel
30infrastructure so long as the improvements for ethanol
31infrastructure and for biodiesel infrastructure are made under
32separate cost-share agreements.
33a. d. (1) Except as provided in paragraph “b” “e”,
34a participating person may be awarded standard financial
35incentives to make improvements to a retail motor fuel site.
-39-1The standard financial incentives awarded to a participating
2person shall not exceed the following:
3(a) For a three-year cost-share agreement, fifty percent of
4the actual cost of making the improvement or thirty thousand
5dollars, whichever is less.
6(b) For a five-year cost-share agreement, seventy percent
7of the actual cost of making the improvement or fifty thousand
8dollars, whichever is less.
9(2) (a) The infrastructure board may approve multiple
10awards of standard financial incentives to make improvements to
11a the retail motor fuel site so long as the total amount of the
12awards for ethanol infrastructure or biodiesel infrastructure
13does not exceed the limitations provided in subparagraph (1).
14(b) If the department determines that a participating
15person is assigned special status because the participating
16person is ineligible to be issued an E-15 incompatible
17infrastructure class 2 waiver order for the retail motor fuel
18site as provided in subsection 2, the infrastructure board may
19approve one or multiple awards of standard financial incentives
20to make improvements to that retail motor fuel site subject to
21all of the following:
22(i) The total amount of awards shall not be reduced by
23the amount of any standard financial incentives awarded to
24improve the retail motor fuel site before the department’s
25determination, notwithstanding subparagraph division (a).
26(ii) The total amount of awards for ethanol infrastructure
27or biodiesel infrastructure shall not exceed the limitations
28provided in subparagraph (1).
29b. e. In addition to any standard financial incentives
30awarded to a participating person under paragraph “a” “d”, the
31participating person may be awarded supplemental financial
32incentives to make improvements to a retail motor fuel site to
33do any of the following:
34(1) Upgrade or replace a dispenser which is part of
35gasoline storage and dispensing infrastructure used to store
-40-1and dispense E-85 gasoline as provided in section 455G.31.
2The participating person is only eligible to be awarded the
3supplemental financial incentives if the person installed the
4dispenser not later than sixty days after July 27, 2011. The
5supplemental financial incentives awarded to the participating
6person shall not exceed seventy-five percent of the actual cost
7of making the improvement or thirty thousand dollars, whichever
8is less.
9(2) To improve additional retail motor fuel sites owned or
10operated by a participating person within a twelve-month period
11as provided in the cost-share agreement. The supplemental
12financial incentives shall be used for the installation
13of an additional motor fuel storage tank and associated
14infrastructure at each such retail motor fuel site. A
15participating person may be awarded supplemental financial
16incentives under this subparagraph paragraph and standard
17financial incentives under paragraph “a” “d” to improve the
18same retail motor fuel site. The supplemental financial
19incentives awarded to the participating person shall not
20exceed twenty-four thousand dollars. The participating person
21shall be awarded the supplemental financial incentives on a
22cumulative basis according to the schedule provided in this
23subparagraph paragraph, which shall not exceed the following:
24(a) (1) For the second retail motor fuel site, six thousand
25dollars.
26(b) (2) For the third retail motor fuel site, six thousand
27dollars.
28(c) (3) For the fourth retail motor fuel site, six thousand
29dollars.
30(d) (4) For the fifth retail motor fuel site, six thousand
31dollars.
32 Sec. 92. Section 159A.15, subsection 1, Code 2022, is
33amended to read as follows:
341. A person may apply to the department to receive financial
35incentives on a cost-share basis. The department shall forward
-41-1the applications to the underground storage tank fund board as
2required by that board for evaluation and recommendation. The
3underground storage tank fund board may rank the applications
4with comments and shall forward them to the infrastructure
5board for approval or disapproval. The department shall award
6financial incentives on a cost-share basis to an eligible
7person whose application was approved by the infrastructure
8board.
9 Sec. 93. Section 159A.16, subsection 3, Code 2022, is
10amended to read as follows:
113. Moneys in the renewable fuel infrastructure fund are
12appropriated to the department exclusively to support and
13market the renewable fuel infrastructure programs as provided
14in sections 159A.14 and 159A.15, and as allocated in financial
15incentives by the renewable fuel infrastructure board created
16in section 159A.13. Up to fifty
17a. For each fiscal year, not more than one million
18two hundred fifty thousand dollars shall be allocated to
19support 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.
23b. For each fiscal year, not more than one hundredthousand
24dollars shall be allocated each fiscal year to the department
25to support the administration of the programs. The
26c. For each fiscal year, thedepartment may use up to
27one and one-half percent of the program funds to market the
28programs. Otherwise the moneys shall not be transferred, used,
29obligated, appropriated, or otherwise encumbered except to
30allocate as financial incentives under the programs.
31EXPLANATION
32The inclusion of this explanation does not constitute agreement with
33the explanation’s substance by the members of the general assembly.
34OVERVIEW. This bill provides a number of mechanisms to
35promote the use of renewable fuels used to power internal
-42-1combustion engines that operate motor vehicles (e.g., both
2conventional and flex-fuel). The bill provides for both
3compliance requirements regulating the storage and dispensing
4of renewable fuel, and promotional measures (specifically
5financial and tax incentives) to increase the availability and
6opportunity for consumers to select a renewable fuel.
7OVERVIEW — TYPES AND CLASSIFICATIONS OF RENEWABLE FUELS.
8 The term “motor fuel” is sometimes used to describe both
9gasoline and diesel fuel (Code chapter 214A) but is also
10used to describe only gasoline, while the term “special
11fuel” is used to describe diesel fuel (Code chapter 452A).
12The term “renewable fuel” is used to describe gasoline or
13diesel fuel when blended with a percentage of its biofuel
14component (biofuel). For gasoline, the biofuel, referred to
15as ethanol, is denatured grain (corn) alcohol. For diesel
16fuel, the biofuel, referred to as biodiesel, is derived from
17processed animal fat or plant (soybean) oil. Renewable fuel
18is based on the percentage of biofuel present in a volume
19(gallon) of gasoline or diesel fuel (Code section 214A.2).
20The biofuel’s percentage is designated by its classification.
21Ethanol is abbreviated as “E” and biodiesel is abbreviated as
22“B”. The term “xx” is a variable which represents the biofuel
23percentage present by volume. Typically, a statute establishes
24a classification threshold meaning that a renewable fuel
25must have a minimum biofuel percentage. For ethanol blended
26gasoline, the most widely recognized classification thresholds
27are E-10, E-15, and E-85; and for biodiesel blended fuel, the
28most widely recognized threshold classifications are B-5, B-11,
29and B-20. For E-85, the biofuel percentage ranges from 70
30percent to 85 percent.
31OVERVIEW — STATE AGENCIES REGULATING AND PROMOTING
32RENEWABLE FUELS. State agencies responsible for administering
33and enforcing regulations and awarding promotional incentives
34include the department of agriculture and land stewardship
35(DALS), the department of natural resources (DNR), the state
-43-1fire marshal (SFM), the department of revenue (DOR), and the
2department of administrative services (DAS) together with
3various agencies that operate the state’s motor vehicle fleet.
4OVERVIEW — REGULATION OF MOTOR FUEL (DALS). DALS is
5responsible for setting standards for motor fuel (defined to
6include gasoline and diesel fuel), including renewable fuel and
7its biofuel components. Generally, the regulations are based
8on voluntary global specifications adopted and published by a
9widely recognized private association, A.S.T.M. international
10(Code section 214A.2). DALS regulates the advertising of motor
11fuel to ensure that it complies with applicable standards and
12classifications (Code sections 214A.2 and 214A.3). A retail
13dealer must notify a consumer at the pump that the motor fuel
14being dispensed is a renewable fuel. Specifically, a sticker
15must be placed on the motor fuel dispenser (dispenser) used to
16discharge the renewable fuel (Code section 214A.16). DALS also
17regulates the licensure of retail dealers and the inspection
18of meters used to measure the discharge of motor fuel pumped
19from a motor fuel storage tank (storage tank) to a dispenser
20at either a fixed location such as a service station or a
21mobile location such as a tank wagon (Code chapters 214 and 215
22regulating weights and measures). The term motor fuel pump
23(pump), including a motor fuel blender pump, is often used
24colloquially to describe the meter which is equipment sealed
25from tampering and used to record and display the volume of
26motor fuel dispensed and to calculate the purchase price. A
27retail dealer is licensed by DALS to operate a metered motor
28fuel pump used to dispense motor fuel (Code section 214.2).
29Generally, a person who violates a regulation relating
30to a motor fuel standard is guilty of a serious misdemeanor
31punishable by confinement for no more than one year and a fine
32of at least $430 but not more than $2,560 with each day that
33a continuing violation occurs considered a separate offense
34(Code section 214A.11(1)). Alternatively, DALS may proceed
35against the person by initiating an administrative (contested
-44-1case) proceeding in which the applicable civil penalty ranges
2from $100 to $1,000 per violation (Code section 214A.11(2)).
3A retail dealer who violates standards for the operation of a
4metered pump (e.g., tampering) is subject to administrative
5action, including having a metered pump placed out of service
6(Code section 215.4).
7OVERVIEW — REGULATION OF MOTOR FUEL INFRASTRUCTURE (DNR
8AND SFM). Generally, DNR is required to regulate underground
9infrastructure, including a storage tank used to hold gasoline
10or diesel fuel, including associated renewable fuels, in a
11manner that prevents water pollution (Code chapter 455G). The
12SFM regulates the storage, transportation, handling, or use
13of flammable or combustible liquids including an aboveground
14storage tank holding gasoline or diesel fuel and associated
15renewable fuels (Code chapter 101).
16OVERVIEW — STATE VEHICLE USE OF RENEWABLE FUELS (DAS
17AND VARIOUS STATE ENTITIES). DAS and other state entities
18maintaining the state motor vehicle fleet must operate
19those motor vehicles using a renewable fuel which must be
20either ethanol blended gasoline or biodiesel blended fuel,
21if commercially available. State agencies subject to the
22requirement include DAS (Code chapter 8A), the commission for
23the blind (Code chapter 216B), the state board of regents (Code
24chapter 262), the department of transportation (Code chapter
25307), and the department of corrections (Code chapter 904).
26OVERVIEW — RENEWABLE FUEL PROMOTION — INCOME TAX CREDIT
27PROGRAMS (DOR). DOR administers three renewable fuel income
28tax credit programs, including the E-85 gasoline promotion
29tax credit (Code sections 422.11O and 422.33(11B)), the E-15
30plus gasoline promotion tax credit (Code sections 422.11Y
31and 422.33(11D)), and the biodiesel blended fuel tax credit
32(Code sections 422.11P and 422.33(11C)). For each tax
33credit program, the amount of the tax credit is calculated by
34multiplying the number of gallons of a renewable fuel that
35meets a threshold classification sold at the retail site or
-45-1on a companywide basis and reported to DOR during the prior
2determination period by a designated rate. For the E-85
3gasoline promotion tax credit, the designated rate is 16 cents.
4For the biodiesel blended fuel tax credit, the designated rate
5is 3.5 cents for B-5 or higher but not as high as B-11 and 5
6cents for B-11 or higher. For the E-15 plus gasoline promotion
7tax credit, the designated rate depends upon the time of the
8year. For the first period beginning January 1 and ending May
931, it is 3 cents, for the second period beginning June 1 and
10ending September 15, it is 10 cents, and for the third period
11beginning September 16 and ending December 31, it returns to 3
12cents. All three tax rates expire on January 1, 2025.
13OVERVIEW — RENEWABLE FUEL PROMOTION — EXCISE TAXES
14(DOR). DOR compiles information from reports submitted by
15retail dealers regarding the total gallonages of gasoline and
16diesel fuel sold to consumers during the prior calendar year
17(determination period). The information includes sales of
18renewable fuels according to classification (Code sections
19452A.31 and 452A.33). The information compiled by a retail
20dealer is used as the basis for calculating a promotional
21income tax credit claimed by the retail dealer. The aggregated
22information is used by DOR to calculate the amount of
23promotional incentives awarded in the form of reduced excise
24taxes imposed on certain renewable fuel sold in this state
25(Code chapter 452A). Specifically, DOR calculates the excise
26tax for ethanol blended gasoline classified as E-15 or higher
27and for biodiesel fuel classified as B-11 or higher for each
2812-month period beginning July 1 and ending June 30 (coinciding
29with the state fiscal year) (Code section 452A.3).
30OVERVIEW — RENEWABLE FUEL PROMOTION — DEDUCTION OF EXCISE
31TAX FOR LICENSED RENEWABLE FUEL BLENDERS (DOR). The excise
32tax is imposed on gasoline and undyed (“clear”) diesel fuel
33when it is “withdrawn from a terminal”, meaning the physical
34movement from a storage and distribution facility (removed from
35the rack) or the shipment of ethanol from its manufacturer to
-46-1a nonterminal location (701 IAC 67.1). A person who produces
2a renewable fuel by combining gasoline or diesel fuel with
3its biofuel component at a nonterminal location must obtain
4a blender’s license (Code section 452A.6). The licensed
5blender may be liable for the amount of any underpayment of the
6excise tax due or may be entitled to receive a refund for any
7overpayment of the excise tax due, depending on the amount of
8the tax paid on the biofuel and whether the renewable fuel to
9be sold meets the threshold classification for ethanol blended
10gasoline (E-15) or biodiesel blended fuel (B-11) (Code section
11452A.8 and 701 IAC 68.4).
12OVERVIEW — RENEWABLE FUEL SALES AND USE TAX PROMOTION —
13BIODIESEL PRODUCERS. A producer of biodiesel registered with
14the EPA (40 C.F.R. §79.4) who manufactures biodiesel meeting
15DALS standards (Code section 214A.2) is entitled to claim a
16refund of sales and use taxes paid (Code section 423.4(9)).
17The amount of the refund is 2 cents multiplied by the total
18number of gallons of biodiesel during each quarter of the year.
19However, a producer is not entitled to claim a refund during
20a calendar year on any gallon in excess of 25 million gallons
21produced at a facility. The refund expires on January 1, 2025.
22OVERVIEW — PROMOTION OF RENEWABLE FUEL AT RETAIL SITES
23(DALS). DALS promotes renewable fuels by administering
24the renewable fuel infrastructure program for retail motor
25fuel sites (infrastructure program) in cooperation with
26the renewable fuel infrastructure board (Code chapter 159A,
27subchapter III). Under the infrastructure program, DALS enters
28into an agreement with a retail dealer to improve a retail
29site by installing, replacing, or converting infrastructure,
30including storage tanks, pumps, dispensers, and associated
31equipment (e.g., fittings and pipes). Specifically, financial
32incentives are awarded on a cost-share basis to store a biofuel
33classified as E-100 or B-100, or to store and dispense a
34renewable fuel having a threshold classification of E-15 or
35B-1 (Code section 159A.14). The award of financial incentives
-47-1is based on either a three-year agreement with the state’s
2incurred cost share limited to 50 percent of the actual
3costs incurred or $30,000, whichever is less, or a five-year
4agreement with the state cost share limited to 70 percent of
5the actual costs incurred or $50,000, whichever is less. A
6participating person may receive multiple awards to improve the
7same retail site so long as the total amount of awards does not
8exceed the percentage or dollar amount limit. A retail dealer
9who acts in violation of an agreement is subject to a civil
10penalty of up to $1,000 per day (Code section 159A.14(7)).
11The infrastructure program is supported by the renewable
12fuel infrastructure fund (infrastructure fund) (Code section
13159A.16).
14BILL IN SUMMARY — REQUIREMENTS — COMPLIANCE WITH THE
15E-15 ACCESS STANDARD (DALS). The bill creates an E-15 access
16standard (new Code section 214A.31) beginning January 1,
172023. In order to comply with the E-15 access standard, a
18retail dealer must advertise and sell E-15 gasoline from a
19minimum number of qualifying dispensers (i.e., a dispenser
20that dispenses gasoline) located at the retail dealer’s retail
21site. The number of qualified dispensers required depends on
22whether the retail dealer installed, replaced, or converted a
23gasoline storage tank on or after that date. If so, a general
24form of compliance applies and the retail dealer must dispense
25E-15 gasoline from at least 50 percent of all qualified
26gasoline dispensers located at the retail site. If the retail
27site has only one qualified dispenser, that dispenser must
28dispense E-15 gasoline. An alternative form of compliance
29applies if the retail dealer has not installed, replaced,
30or converted a gasoline storage tank on or after that date.
31Under the alternative form of compliance, the retail dealer
32is not required to dispense E-15 gasoline from any qualified
33dispenser until January 1, 2026. On and after that date, two
34conditions must be met: (1) the retail dealer still cannot
35install, replace, or convert a gasoline storage tank, and (2)
-48-1the retail dealer must advertise and sell E-15 gasoline from
2one qualified dispenser located at the retail motor fuel site.
3If the retail dealer fails to meet any of the two conditions
4under the alternative form of compliance, the retail dealer is
5subject to the general form of compliance and must immediately
6advertise and sell E-15 gasoline from the minimum number (one
7or 50 percent) of the qualified dispensers at the retail site.
8BILL IN SUMMARY — REQUIREMENTS — COMPLIANCE WITH
9E-15 ACCESS STANDARD — SUSPENSION AND WAIVERS. The bill
10exempts certain unqualified dispensers from the E-15 access
11standard, including those dispensers that exclusively dispense
12aviation gasoline, diesel fuel, or kerosene (new Code section
13214A.32). It also exempts dispensers that are part of a tank
14vehicle dispensing motor fuel off-site. A special exemption
15applies when the retail dealer cannot meet the E-15 access
16standard because of maintenance, repair, or reconditioning of
17infrastructure or the installation, expansion, replacement,
18or conversion of infrastructure. The governor may issue an
19executive order that suspends compliance by all retail dealers
20doing business in the state or a geographic segment of the
21state (new Code section 214A.33). The governor’s suspension
22order must be supported by credible evidence that market forces
23or existing infrastructure prevents compliance. The secretary
24of agriculture may issue either of two administrative orders
25that waive compliance by a retail dealer on a site-by-site
26basis. The E-15 unavailability waiver order must be based on
27credible evidence that a retail dealer has not been able to
28reasonably obtain E-15 gasoline (new Code section 214A.34).
29The E-15 incompatible infrastructure waiver order must be
30based on credible evidence that the motor fuel storage and
31dispensing infrastructure located at the retail motor fuel
32site is not compatible with the use of E-15 gasoline. The
33secretary of agriculture may issue either a class 1 or class
342 E-15 incompatible infrastructure waiver order (new Code
35section 214A.35). A class 1 waiver order is based on the age
-49-1of all motor fuel tanks dispensing gasoline, and specifically
2the date of installation and the construction materials used
3(specifically fiberglass). A class 2 waiver order is based on
4an evaluation of the motor fuel site to determine if the motor
5fuel storage and dispensing infrastructure is not compatible
6with E-15 gasoline. The evaluation must be completed by
7DALS or a certified professional retail motor fuel site
8installer (installer) certified by DALS. In addition, the
9total estimated cost of the improvement must exceed the E-15
10infrastructure base amount which equals the maximum amount of
11financial incentives that the retail dealer could be awarded
12under the renewable fuel infrastructure program for retail
13dealers (amended Code section 159A.14). The secretary must
14terminate a class 1 or class 2 waiver order based on the
15occurrence of any number of specified events, including the
16failure of the retail dealer to be licensed under weights
17and measures regulations governing motor fuel pumps (Code
18section 214.2); the cessation of the retail dealer’s business;
19or the installation, replacement, or conversion of a motor
20fuel storage tank. A retail dealer or installer who falsely
21completes an application for a class 1 or class 2 waiver
22order commits perjury and is subject to a class “D” felony
23(punishable by confinement for no more than five years and a
24fine of at least $1,025 but not more than $10,245).
25BILL IN SUMMARY — REQUIREMENTS — RETAIL MOTOR FUEL SITE
26INSPECTIONS AND REGULATION OF RETAIL DEALER ADVERTISING (DALS).
27 The bill provides that when conducting an inspection of metered
28pumps located at a retail site to determine compliance with
29weights and measures regulations, DALS is also required to
30determine compliance with the E-15 access standard (amended
31Code section 214.12). A retail dealer is prohibited from
32falsely advertising for sale gasoline or diesel fuel, including
33by advertising a false classification (amended Code section
34214A.3). The bill eliminates a provision requiring that a
35decal be placed on a dispenser notifying consumers that motor
-50-1fuel being dispensed is a renewable fuel (amended Code section
2159A.6 and repealed Code section 214A.16). The bill does not
3affect federal labeling requirements, including by the United
4States environmental protection agency under the Clean Air Act
5Amendments of 1990 (42 U.S.C. §7545 and 40 C.F.R. pt.1090) or
6by the United States department of energy and the United States
7federal trade commission (15 U.S.C. §2801 et seq., 42 U.S.C.
8§17021, 16 C.F.R. pt.306, and 40 C.F.R. §80.1501(a)).
9BILL IN SUMMARY — REQUIREMENTS — RETAIL DEALER
10DISCIPLINARY ACTION AND ENFORCEMENT (DALS). The bill provides
11that a retail dealer who violates the E-15 access standard
12is subject to a disciplinary action which may result in the
13suspension or revocation of the retail dealer’s license issued
14under weights and measures regulations (new Code section
15214A.36).
16BILL IN DETAIL — REQUIREMENTS — NEW INSTALLATION OF
17GASOLINE AND BIODIESEL INFRASTRUCTURE AT RETAIL DEALER SITES
18(DNR AND SFM). The bill provides that new infrastructure
19required to be installed to store and dispense E-85 gasoline
20or B-20 biodiesel fuel must be (1) listed with an independent
21testing laboratory (e.g., underwriters laboratories) or
22approved by the manufacturer and (2) approved by DNR or the
23SFM, unless such approval is waived based on compliance with a
24substitute requirement (new Code sections 455G.32 and 455G.33,
25which are similar to amended Code section 455G.31 excusing the
26storage of ethanol blended gasoline classified as higher than
27E-9, which the bill increases to E-10).
28BILL IN SUMMARY — REGULATION OF MOTOR VEHICLES POWERED BY
29QUALIFIED RENEWABLE FUELS AND PURCHASE OF QUALIFIED RENEWABLE
30FUELS BY STATE GOVERNMENT ENTITIES. The bill provides that DAS
31and other state entities administering the state government
32fleet must provide that state motor vehicles operating using
33engines powered by gasoline or diesel fuel must use the
34highest classification of qualified renewable fuel available.
35A qualified renewable fuel is limited to ethanol blended
-51-1gasoline or biodiesel blended fuel. Certain limitations
2apply: (1) the qualified renewable fuel must be warranted
3by the motor vehicle’s manufacturer, (2) that classification
4of qualified renewable fuel must be available, and (3) an
5emergency situation must not exist. In addition, DAS and the
6other state entities must revise their bidding procedures as
7necessary to account for the purchase of motor vehicles that
8operate using engines powered by biodiesel blended fuel having
9a threshold classification of B-20 (new Code section 8A.368).
10DAS, in cooperation with the other entities, is required to
11prepare an annual report to be submitted to the governor and
12general assembly providing information regarding the number
13of state motor vehicles using engines powered using motor
14fuel, including gasoline and diesel fuel, the number of those
15motor vehicles capable of being powered using ethanol blended
16gasoline meeting a threshold classification of E-15 and E-85 or
17biodiesel blended fuel meeting a threshold classification of
18B-20, and the number of gallons of qualified renewable fuels
19purchased (new Code section 8A.369 and amended Code sections
20216B.3, 262.25A, 307.21, and 904.312A).
21BILL IN SUMMARY — PROMOTION — TAX CREDITS. The bill
22extends the period before promotional tax credits expire. For
23the E-85 gasoline promotion tax credit, the extended date is
24January 1, 2028 (amended Code sections 422.11O and 422.33
25(11B)); for the biodiesel blended fuel tax credit, the extended
26date is January 1, 2028 (amended Code sections 422.11P and
27422.33(11C)); and for the E-15 plus gasoline tax credit,
28the extended date is January 1, 2026 (amended Code sections
29422.11Y and 422.33(11D)). The bill changes the threshold
30classifications and designated rates for two of the tax credits
31beginning January 1, 2023. This includes the biodiesel blended
32fuel tax credit (5 cents for B-11, 7 cents for B-20, 10 cents
33for B-30) and the E-15 plus gasoline promotion tax credit (a
34flat 9 cents). The new rates for the biodiesel blended fuel
35tax credit for part of the second step of the threshold (higher
-52-1than B-20 but not as high as B-30) and the third full step of
2the threshold (B-30 and higher) take effect after standards for
3those classifications are established by DALS.
4BILL IN SUMMARY — PROMOTION — RETAIL DEALER REPORTING
5OF GALLONAGES OF GASOLINE AND DIESEL FUEL (DOR). Beginning
6January 1, 2022, a retail dealer must include additional
7information regarding subclassifications of ethanol blended
8gasoline gallonages and biodiesel blended fuel gallonages for
9each reported determination period submitted to DOR to allow a
10retail dealer to calculate a promotional tax credit and DOR to
11calculate the promotional excise tax imposed on ethanol blended
12gasoline and biodiesel blended fuel. The bill provides that
13DOR may require reports by retail dealers to be submitted by
14electronic transmission and that DOR may grant an extension
15to a retail dealer to submit a report. Otherwise, a retail
16dealer who does not submit a timely report is subject to a
17$100 civil penalty. The bill extends the expiration of the
18promotional excise tax rates for both ethanol blended gasoline
19and biodiesel blended fuel to July 1, 2030. It also increases
20the threshold classification for biodiesel blended fuel to B-20
21beginning July 1, 2024.
22BILL IN SUMMARY — PROMOTION — EXCISE TAX PAID BY LICENSED
23BLENDERS SUBJECT TO DEDUCTION IN LIEU OF REFUND (DOR). The
24bill provides that a licensed blender is no longer required
25to apply for a refund for an overpayment amount. Instead,
26the gallonage of gasoline or diesel fuel withdrawn from a
27terminal by a supplier for purchase by a licensed blender is
28subject to a deduction on ethanol blended gasoline or biodiesel
29blended gasoline after it is blended to meet its classification
30threshold (amended Code section 452.8). This provision is
31repealed July 1, 2030.
32BILL IN SUMMARY — PROMOTION — SALES AND USE TAXES PAID BY
33BIODIESEL PRODUCER SUBJECT TO PROMOTIONAL REFUND (DOR). The
34bill provides that beginning January 1, 2023, the amount of
35the refund of sales and use taxes entitled to be claimed by
-53-1a biodiesel producer is increased to 4 cents per gallon per
2quarter of each calendar year up to the 25 million gallonage
3limit (amended Code section 423.4).
4BILL IN SUMMARY — PROMOTION — FINANCING RETAIL SITE
5INFRASTRUCTURE (DALS). The bill provides that the underground
6storage tank fund board is no longer involved in evaluating
7applications submitted under the renewable fuel infrastructure
8program (amended Code section 159A.14) and the renewable fuel
9infrastructure program for biodiesel terminal facilities
10(amended Code section 159A.15). The infrastructure board may
11establish a system to rank applications to participate in the
12infrastructure program for approval. In ranking applications,
13the infrastructure board may provide special priority to
14a retail motor fuel site that has been constructed and is
15operating. It may also provide special priority to a retail
16dealer who was not eligible to receive an E-15 incompatible
17infrastructure class 2 waiver because the total estimated cost
18of improvement does not exceed the E-15 improvement base amount
19(assigned special status). An award of financial incentives
20must be based on a five-year agreement with the state’s cost
21share limited to 70 percent or $50,000, whichever is less.
22However, in the case of a special status retail dealer who DALS
23determines is ineligible to be issued an E-15 incompatible
24infrastructure class 2 waiver order, the limits for financing
25an improvement to the retail dealer’s retail site are subject
26to the 70 percent or $50,000 regardless of whether the
27infrastructure board awarded financing to improve that retail
28site prior to the determination. A retail dealer installing,
29replacing, or converting ethanol infrastructure must agree
30to advertise and sell ethanol blended gasoline classified at
31an E-15 threshold for all 12 months of the year rather than
32seasonally. A retail dealer by installing, replacing, or
33converting biodiesel infrastructure must agree to advertise for
34sale and sell biodiesel blended fuel at a B-5 threshold rather
35than a B-1 threshold for all 12 months of the year with one
-54-1exception. The threshold is increased to B-11 from April 1 to
2October 31. In addition, the bill provides that during any
3fiscal year, of the moneys appropriated to the infrastructure
4fund (amended Code section 159A.16), not more than $1.25
5million may be allocated to support biodiesel infrastructure
6under the renewable fuel infrastructure program for retail
7motor fuel sites. The bill does not limit the amount that
8may be allocated to support the renewable fuel infrastructure
9program for biodiesel terminal facilities.
-55-da/ns