Bill Text: IA HF451 | 2011-2012 | 84th General Assembly | Introduced

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Bill Title: A bill for an act relating to motor fuel, including ethanol blended gasoline and biodiesel or biodiesel blended motor fuel, by providing for regulation and taxes. (Formerly HSB 113)

Spectrum: Committee Bill

Status: (Introduced - Dead) 2011-12-31 - END OF 2011 ACTIONS [HF451 Detail]

Download: Iowa-2011-HF451-Introduced.html

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House File 451 - Introduced
HOUSE FILE 451
BY COMMITTEE ON AGRICULTURE
(SUCCESSOR TO HSB 113)
A BILL FOR
An Act relating to motor fuel, including ethanol blended
gasoline and biodiesel or biodiesel blended motor fuel, by
providing for regulation and taxes.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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DIVISION I
REGULATION OF MOTOR FUEL
Section 1. Section 214A.1, Code 2011, is amended by adding
the following new subsections:
NEW SUBSECTION . 11A. “Flexible fuel vehicle” means a motor
vehicle which is powered by an engine capable of operating
using E-85 gasoline.
NEW SUBSECTION . 16A. “Nonblended gasoline” means gasoline
other than ethanol blended gasoline.
Sec. 2. Section 214A.2, subsection 4, paragraph b, Code
2011, is amended by adding the following new subparagraph:
NEW SUBPARAGRAPH . (4) Biodiesel blended fuel classified as
from B-6 through B-20 must conform to A.S.T.M. international
specification D7467 or a successor A.S.T.M. international
specification as established by rules adopted by the
department.
Sec. 3. Section 214A.16, subsection 1, Code 2011, is amended
by striking the subsection and inserting in lieu thereof the
following:
1. A motor fuel pump shall be affixed with a decal
identifying the motor fuel that it dispenses, as required in
this subsection.
a. If the motor fuel is gasoline, the following shall apply:
(1) For gasoline not blended with ethanol, the decal shall
identify it as nonblended gasoline.
(2) For gasoline classified as higher than standard ethanol
blended gasoline pursuant to section 214A.2, the decal shall
identify it as being for use in flexible fuel vehicles only.
b. If the motor fuel is biodiesel fuel, the decal shall
identify the biodiesel fuel as provided in 16 C.F.R. pt. 306.
Sec. 4. Section 422.11N, subsection 1, paragraph a, Code
2011, is amended to read as follows:
a. “E-85 gasoline” , “ethanol” , “ethanol blended gasoline” ,
“gasoline” , “flexible fuel vehicle” , and “retail dealer” mean the
same as defined in section 214A.1 .
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Sec. 5. Section 422.11N, subsection 1, paragraph b, Code
2011, is amended by striking the paragraph.
Sec. 6. Section 452A.2, subsection 18, Code 2011, is amended
to read as follows:
18. “Flexible fuel vehicle” means a motor vehicle as defined
in section 321M.1 which is powered by an engine capable of
operating using E-85 gasoline the same as defined in section
214A.1 .
DIVISION II
TAXES IMPOSED UPON BIODIESEL FUEL
Sec. 7. Section 452A.2, Code 2011, is amended by adding the
following new subsection:
NEW SUBSECTION . 9A. “Diesel fuel” means the same as defined
in section 214A.1.
Sec. 8. Section 452A.2, subsection 29, Code 2011, is amended
to read as follows:
29. “Nonterminal storage facility” means a facility where
motor fuel or special fuel, other than liquefied petroleum
gas, is stored that is not supplied by a pipeline or a marine
vessel. “Nonterminal storage facility” includes a facility that
manufactures products such as ethanol as defined in section
214A.1 , biofuel, blend stocks, or additives which may be used
as motor fuel or special fuel, other than liquefied petroleum
gas, for operating motor vehicles or aircraft.
Sec. 9. Section 452A.3, subsection 3, Code 2011, is amended
to read as follows:
3. a. For the privilege of operating motor vehicles or
aircraft in this state, there is imposed an excise tax on the
use of special fuel in a motor vehicle or aircraft.
(1) The tax rate on special fuel for diesel engines of motor
vehicles is twenty-two and one-half cents per gallon. The tax
rate on biodiesel for diesel engines of motor vehicles shall
be determined on a volume basis with the gross metered gallons
adjusted to sixty degrees Fahrenheit.
(2) The rate of tax on special fuel for aircraft is three
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cents per gallon.
(3) On all other special fuel, unless otherwise specified in
this section , the per gallon rate is the same as the motor fuel
tax.
b. Indelible dye meeting United States environmental
protection agency and internal revenue service regulations
must be added to special fuel before or upon withdrawal at a
terminal or refinery rack for that special fuel to be exempt
from tax and the dyed special fuel may be used only for an
exempt purpose.
Sec. 10. Section 452A.17, subsection 1, paragraph a, Code
2011, is amended by adding the following new subparagraph:
NEW SUBPARAGRAPH . (11) Diesel fuel used by a nonterminal
storage facility to blend with biodiesel to produce biodiesel
blended fuel, if the biodiesel blended fuel is distributed
to a blender licensed pursuant to section 452A.6 who is also
required to pay the excise tax on the same diesel fuel.
Sec. 11. Section 452A.86, Code 2011, is amended to read as
follows:
452A.86 Method of determining gallonage.
1. The exclusive method of determining gallonage of
any purchases or sales of motor fuel, undyed special fuel,
compressed natural gas, or liquefied petroleum gas as defined
in this chapter and distillate fuels shall be on a gross volume
basis. A temperature-adjusted or other method shall not be
used, except as it applies to biodiesel, liquefied petroleum
gas , and or the sale or exchange of petroleum products between
petroleum refiners. All invoices, bills of lading, or other
records of sale or purchase and all returns or records required
to be made, kept, and maintained by a supplier, restrictive
supplier, importer, exporter, blender, or compressed natural
gas or liquefied petroleum gas dealer or user shall be made,
kept, and maintained on the gross volume basis.
2. For purposes of this section , “distillate fuels” means
any fuel oil, gas oil, topped crude oil, or other petroleum
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oils derived by refining or processing crude oil or unfinished
oils which have a boiling range at atmospheric pressure which
falls completely or in part between five hundred fifty and
twelve hundred degrees Fahrenheit.
DIVISION III
INCOME TAX CREDITS FOR RETAIL DEALERS OF RENEWABLE FUEL
Sec. 12. Section 422.11N, subsection 3, Code 2011, is
amended by adding the following new paragraph:
NEW PARAGRAPH . c. The department has received the retail
dealer’s motor fuel gallonage report for the immediately prior
determination period beginning January 1 and ending December
31, as required in section 452A.33. The report must have been
received by the department on or before the report’s due date.
If the retail dealer submits the report on a quarterly or
monthly basis as provided in that section, the department must
have received all such reports by the same due date.
Sec. 13. Section 422.11O, subsection 2, Code 2011, is
amended by adding the following new paragraph:
NEW PARAGRAPH . c. The department has received the retail
dealer’s motor fuel gallonage report for the immediately prior
determination period beginning January 1 and ending December
31, as required in section 452A.33. The report must have been
received by the department on or before the report’s due date.
If the retail dealer submits the report on a quarterly or
monthly basis as provided in that section, the department must
have received all such reports by the same due date.
Sec. 14. Section 422.11P, subsection 2, paragraph a, Code
2011, is amended by adding the following new subparagraph:
NEW SUBPARAGRAPH . (4) The department has received the
retail dealer’s motor fuel gallonage report for the immediately
prior determination period beginning January 1 and ending
December 31, as required in section 452A.33. The report
must have been received by the department on or before the
report’s due date. If the retail dealer submits the report on
a quarterly or monthly basis as provided in that section, the
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department must have received all such reports by the same due
date.
Sec. 15. Section 452A.33, subsection 1, paragraph a,
unnumbered paragraph 1, Code 2011, is amended to read as
follows:
Each retail dealer shall submit a motor fuel gallonage
report , detailing its total motor fuel gallonage for a
determination period as follows:
EXPLANATION
GENERAL. This bill amends provisions in a number of Code
chapters relating to motor fuel sold in this state, including
motor fuel that contains a percentage of a biofuel (biodiesel
or ethanol).
REGULATION OF MOTOR FUEL. The bill amends several
provisions in Code chapter 214A, which regulates the sale
of motor fuel by the department of agriculture and land
stewardship (DALS). The bill establishes a standard for
biodiesel blended fuel based on A.S.T.M. international
specifications. It also rewrites a provision that requires
that a motor fuel pump be affixed with a decal (label)
informing the traveling public whether it is dispensing a motor
fuel containing ethanol or biodiesel. It retains the label
requirement for a motor fuel pump dispensing E-85 gasoline
for flexible fuel vehicles or biodiesel blended fuel for
diesel-powered motor vehicles, removes a provision requiring a
label for a motor fuel pump dispensing other types of ethanol
blended fuel (standard ethanol blended gasoline), and requires
a label for a motor fuel pump dispensing gasoline without an
ethanol component (nonblended gasoline).
EXCISE TAXES IMPOSED UPON BIODIESEL FUEL. The bill amends
provisions in Code chapter 452A, which relate to an excise
tax imposed upon biodiesel fuel. Generally, an excise tax is
imposed on each gallon of motor fuel, including biodiesel fuel
(Code section 452A.3) based on a gross volume basis without
adjustment (Code section 452A.86). The bill does not directly
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change the excise tax imposed on biodiesel fuel, but changes
how the gallonage is calculated at the meter, by requiring that
the excise tax be assessed after adjusting the biodiesel’s
temperature to 60 degrees Fahrenheit.
The bill also provides for a refund of excise taxes paid
on diesel fuel by nonterminal storage facilities. A person
who manufactures a biofuel, including ethanol or biodiesel for
distribution, is classified as a nonterminal storage facility
(Code section 452A.2). A nonterminal storage facility is
required to pay an excise tax on diesel fuel used in producing
biodiesel blended fuel. The bill provides that the nonterminal
storage facility is entitled to a refund of the excise tax paid
on diesel fuel if the biodiesel blended fuel is distributed
to a licensed blender (Code section 452A.6) who must pay the
excise tax on that same diesel fuel.
INCOME TAX CREDITS FOR RETAIL DEALERS OF MOTOR FUEL WHICH
CONTAINS ETHANOL OR BIODIESEL. Code chapter 422 establishes a
tax credit for the promotion of ethanol blended gasoline (Code
sections 422.11N and 422.33(11A)), E-85 gasoline (Code sections
422.11O and 422.33(11B)), and biodiesel blended motor fuel
(Code sections 422.11P and 422.33(11C)). The bill provides
that in order for a retail dealer to claim a tax credit, it must
comply with an existing statute that requires a retail dealer
to submit a motor fuel gallonage report (Code section 452A.33)
for its latest determination period (calendar year). The
report includes the retail dealer’s total gasoline gallonage,
ethanol gallonage, ethanol blended gasoline gallonage, E-85
gasoline gallonage, diesel gallonage, and biodiesel gallonage
for each motor fuel site or other permanent or temporary
location owned or operated by the retail dealer.
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