SF 481 – Biofuels sales requirements, tax credits, and infrastructure grants
SF 481 is the Governor’s biofuels proposal. It has four main components:
- Establishing requirements for fuel retailers to offer biofuels for sale and restrictions on the sale of non-biofuel blended fuels.
- Appropriating $5 million annually for the Renewable Fuels Infrastructure Grant Program administered by the Renewable Fuels Infrastructure Board.
- Adjusting existing biofuels tax credit programs to encourage the sale of higher biofuel blends by retailers.
- Requiring the use of the highest appropriate blend of biofuels for vehicles owned and operated by state agencies.
Division I – Motor Fuel standards
- The bill establishes new definitions for motor fuels sold by retailers. Motor fuels that contain no biofuels or trace amounts of biofuels are now defined as “restricted use” diesel fuel or gasoline. “Standard” biodiesel or gasoline are biofuel-blended fuels that meet the minimum biofuel-blending standards set out under the bill.
- The bill establishes standards for ethanol-blended gasoline, biobutanol-blended gasoline and biodiesel fuel. This includes ASTM specifications that the fuels must adhere to.
- The bill sets out labeling requirements for motor-fuel pump dispensers. “Restricted-use” diesel or gasoline must be labeled if offered for sale by a retailer. The bill also requires labeling for pumps that dispense E-15, E-85, biobutanol-blended gasoline and biodiesel-blended fuel.
- The bill prohibits a retailer from dispensing “restricted use” gasoline from more than one dispensing unit at a retail site. The retailer may offer “standard” (ethanol-blended) fuels from any number of dispensing units at the retailer. This also applies for standard and restricted-use diesel fuel sold at a retail site.
- Prior to January 1, 2025, E-10 (minimum of 10% ethanol) blended fuel may be sold as standard gasoline. On or after January 1, 2025, standard gasoline is defined as E-15 or higher blended fuel.
- Retailers may sell restricted-use gasoline from one or more dispensing units at a restricted motor-fuel site, including:
- a facility where non-highway motor vehicles are primarily used (racetracks).
- a marina for mooring or dry dock storage of watercraft.
- a location that primarily sells or stores motor vehicles manufactured before 1985 or all-terrain vehicles (ATVs), motorcycles or snowmobiles.
- B-20 (20% biodiesel-blended fuel) or higher may be sold as standard diesel fuel. There is a “winter” exception to this requirement, when B-5 or higher may be sold as standard diesel fuel. The bill also allows for the sale of B-11 or higher biodiesel during non-winter periods prior to October 1, 2023.
- Retailers may sell restricted-use diesel from one or more dispensing units at a restricted motor-fuel site, including:
- an electric-generating plant regulated by the United State Nuclear Regulatory Commission.
- a facility storing or serving railroad locomotives.
- The Governor can issue waivers for restricted-use gasoline or diesel fuel to be provided at more than one dispensing unit at a retail site. However, the retailer must sell either E-10 and higher gasoline after January 1, 2025. The retailer must sell B-11 or higher biodiesel fuel under this waiver. This does not impact the “winter” biodiesel standard.
- The Governor can issue statewide or regional waivers for the E-15 or B-20 standards based on a finding that it is not commercially feasible for retailers to obtain the required classification of renewable fuel.
- The bill also grants the Department of Agriculture (IDALS) the authority to suspend, revoke or not renew the license of a motor-fuel retail dealer for not following the requirements of the bill.
Division II – Motor fuel infrastructure
The bill makes changes to the existing financial incentives program for motor-fuel infrastructure under the Renewable Fuels Infrastructure Board (RFIB).
- The incentives will be targeted to dispensing E-85 or higher and storing E-100 or E-85 blended fuel.
- Biodiesel infrastructure grants would be for storage of B-20 blended biodiesel or B-100, as well as dispensing or blending B-20 blended biodiesel or higher. Biodiesel infrastructure must include at least a blender pump that allows for different classifications of biodiesel and allows B-20 to be dispensed at all times before July 1, 2024. The participating person must agree to sell B-20 or higher during the non-winter portion of the year as part of the agreement.
- The bill reserves $1.25 million per year in the Renewable Fuel Infrastructure Fund for biodiesel infrastructure projects through July 1, 2024.
The bill also requires that new motor-fuel storage and dispensing infrastructure equipment installed after the enactment of the bill be capable of storing or dispensing E-85 or higher blended gasoline.
Division III – Tax credits and motor fuel taxes
This division extends and modifies existing tax credit incentives for motor fuel retailers. These include:
- E-85 promotion tax credit – The bill extends the existing tax credit by four years, to January 1, 2029. This tax credit is equal to 16-cents-per-gallon of E-85 blended fuel sold.
- Biodiesel-blended fuel tax credit – The bill extends the tax credit by four years, to January 1, 2029, but also modifies the tax credit to apply to higher biodiesel blends.
- Current structure: B-5 blended biodiesel receives a 3.5-cent-per-gallon tax credit. B-11 receives a 5.5-cent-per-gallon tax credit.
- Proposed structure: Before January 1, 2024, B-11 blended biodiesel would receive a 4-cent-per-gallon tax credit during the winter. B-20 blended biodiesel would receive a 6-cent-per-gallon tax credit during the remainder of the year. Beginning January 1, 2024, the B-11 tax credit for winter would remain at 4 cents per gallon. However, the biodiesel-blended fuel tax credit for non-winter would be for B-30 blended biodiesel at 10 cents per gallon.
- E-15 plus promotion tax credit – The bill extends the existing tax credit by four years, to January 1, 2029 and removes the special “summer” period that provided a 10-cent-per-gallon tax credit for E-15 blended gasoline. The tax credit would remain at 3 cents per gallon year-round.
- All credits are extended and modified for corporate income taxes and individual income taxes.
- The bill adjusts the calculation of the adjustment to the motor fuel tax differential for biodiesel to include calculations for higher biodiesel blends.
Division IV – Renewable fuel use by state motor vehicles
This division of the bill eliminates current law that requires all vehicles owned and operated by a state agency to use only biofuel-blended motor fuel. The bill proposes requiring motor fuel used to power a state vehicle to be the highest blended classification available that vehicle is warranted for, outside of an emergency situation. State entities are also required to revise their bidding procedures to account for the purchase of vehicles powered by biodiesel-blended fuel B-20 or higher.
The bill also requires an annual report by the Department of Administrative Services (DAS) to the Governor and Legislature regarding state vehicles powered by motor fuel by fuel type and gallons of renewable fuel purchased. [3/3: 12-1 (No: Dickey)]
SF 503 – Firefighters responding to an emergency
SF 503 allows a driver with firefighter or emergency medical service plates to reasonably exceed the speed limit when responding to a fire alarm or emergency call. The driver must have received emergency vehicle operations training and make use of a blue light. It does not relieve the driver from the duty to drive with regard for the safety of others and does not protect them from reckless disregard for the safety of others. It requires the court to dismiss and expunge any citation issued when the driver complied with the bill and presents to the court a signed statement from the applicable fire chief with details about the driver’s operation of the vehicle while responding. [3/3: short form]
SSB 1220 – Regulation of highway advertising devices
SSB 1220 amends Iowa’s billboard control laws to avoid any content-based discrimination. A recent Supreme Court case determined that government’s application of different standards for different types of signs based on the content of the sign is an infringement on the First Amendment right to free speech. Failure to comply could result in a loss of $53 million in federal funding. Signs will either be regulated or not regulated, depending upon whether they fit the definition of “advertising devices.” This definition captures all signs that exist in exchange for any type of compensation, monetary or otherwise (defined as “remuneration”). [3/3: short form]
SSB 1230 – Excessive weights for hauling milk products
SSB 1230 allows the Iowa Department of Transportation to issue annual permits to vehicles transporting fluid milk products to exceed current weight limits, but not to exceed 20,000 pounds per axle and not to exceed a gross weight of 90,000 pounds. The bill creates an annual fee of $400 for fluid milk haulers and creates penalties from $12 to $2,200, plus 10-cents per pound in excess of the 20,000-pound weight limit. [3/3: party line]