HF 3203

1st Engrossment - 88th Legislature (2013 - 2014) Posted on 03/27/2014 03:27pm

A bill for an act
relating to energy; biodiesel fuel; modifying minimum biodiesel fuel content
requirements; exempting certain diesel generators from the requirement to use
biodiesel fuel; amending Minnesota Statutes 2012, section 239.77, subdivisions
2, 3, by adding a subdivision.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2012, section 239.77, subdivision 2, is amended to read:

Subd. 2.

Minimum content.

(a) Except as otherwise provided in this section, all
diesel fuel sold or offered for sale in Minnesota for use in internal combustion engines
must contain at least the stated percentage of biodiesel fuel oil by volume on and after
the following dates:

(1)	September 29, 2005	2 percent
(2)	May 1, 2009	5 percent
(3)	May 1, 2012	10 percent
(4)	May 1, deleted text begin 2015 deleted text end new text begin 2018 new text end	20 percent

The minimum content levels in clauses (3) and (4) are effective during the months of
April, May, June, July, August, new text begin and new text end September deleted text begin , and October deleted text end only. The minimum content
for the remainder of the year is five percent. However, if the commissioners of agriculture,
commerce, and pollution control determine, after consultation with the biodiesel task
force and other technical experts, that an American Society for Testing and Materials
specification or equivalent federal standard exists for the specified biodiesel blend level in
those clauses that adequately addresses technical issues associated with Minnesota's cold
weather and publish a notice in the State Register to that effect, the commissioners may
allow the specified biodiesel blend level in those clauses to be effective year-round.

(b) The minimum content levels in paragraph (a), clauses (3) and (4), become
effective on the date specified only if the commissioners of agriculture, commerce,
and pollution control publish notice in the State Register and provide written notice to
the chairs of the house of representatives and senate committees with jurisdiction over
agriculture, commerce, and transportation policy and finance, at least 270 days prior to the
date of each scheduled increase, that all of the following conditions have been met and the
state is prepared to move to the next scheduled minimum content level:

(1) an American Society for Testing and Materials specification or equivalent federal
standard exists for the next minimum diesel-biodiesel blend;

(2) a sufficient supply of biodiesel is available and the amount of biodiesel produced
in this state from feedstock with at least 75 percent that is produced in the United States
and Canada is equal to at least 50 percent of anticipated demand at the next minimum
content level;

(3) adequate blending infrastructure and regulatory protocol are in place in order to
promote biodiesel quality and avoid any potential economic disruption; and

(4) at least five percent of the amount of biodiesel necessary for that minimum
content level will be produced from a biological resource other than an agricultural
resource traditionally grown or raised in the state, including, but not limited to, algae
cultivated for biofuels production, waste oils, and tallow.

The condition in clause (2) may be waived if the commissioner finds that, due to
weather-related conditions, the necessary feed stock is unavailable.

The condition in clause (4) may be waived if the commissioners find that the use of
these nontraditional feedstocks would be uneconomic under market conditions existing at
the time notice is given under this paragraph.

(c) The commissioners of agriculture, commerce, and pollution control must consult
with the biodiesel task force when assessing and certifying conditions in paragraph (b),
and in general must seek the guidance of the biodiesel task force regarding biodiesel
labeling, enforcement, and other related issues.

(d) During a period of biodiesel fuel shortage or a problem with biodiesel quality
that negatively affects the availability of biodiesel fuel, the commissioner of commerce
may temporarily suspend the minimum content requirement in subdivision 2 until there
is sufficient biodiesel fuel, as defined in subdivision 1, available to fulfill the minimum
content requirement.

(e) By February 1, 2012, and periodically thereafter, the commissioner of commerce
shall determine the wholesale diesel price at various pipeline and refinery terminals in the
region, and the biodiesel price determined after credits and incentives are subtracted at
biodiesel plants in the region. The commissioner shall report wholesale price differences to
the governor who, after consultation with the commissioners of commerce and agriculture,
may by executive order adjust the biodiesel mandate if a price disparity reported by the
commissioner will cause economic hardship to retailers of diesel fuel in this state. Any
adjustment must be for a specified period of time, after which the percentage of biodiesel
fuel to be blended into diesel fuel returns to the amount required in subdivision 2. The
biodiesel mandate must not be adjusted to less than five percent.

Sec. 2.

Minnesota Statutes 2012, section 239.77, subdivision 3, is amended to read:

Subd. 3.

deleted text begin Exceptions deleted text end new text begin Exempt equipment new text end .

(a) The minimum content requirements
of subdivision 2 do not apply to fuel used in the following equipment:

(1) motors located at an electric generating plant regulated by the Nuclear
Regulatory Commission;

(2) railroad locomotives;

(3) off-road taconite and copper mining equipment and machinery;

(4) off-road logging equipment and machinery; deleted text begin and
deleted text end

(5) vessels of the United States Coast Guard and vessels subject to inspection under
United States Code, title 46, section 3301, subsection (1), (9), (10), (13), or (15) new text begin ; and
new text end

new text begin (6) generators tested and validated by an entity that designs and manufactures the
generators for use in jurisdictions where biodiesel use is not required new text end .

(b) The exemption in paragraph (a), clause (1), expires 30 days after the Nuclear
Regulatory Commission has approved the use of biodiesel fuel in motors at electric
generating plants under its regulation.

deleted text begin (c) The minimum content requirements of subdivision 2 do not apply to Number 1
diesel fuel sold or offered for sale during the months of October, November, December,
January, February, and March.
deleted text end

deleted text begin (d) This subdivision expires May 1, 2015.
deleted text end

Sec. 3.

Minnesota Statutes 2012, section 239.77, is amended by adding a subdivision
to read:

new text begin Subd. 3a. new text end

new text begin Number 1 diesel fuel exempt. new text end

new text begin (a) The minimum content requirements of
subdivision 2 do not apply to Number 1 diesel fuel.
new text end

new text begin (b) This subdivision expires May 1, 2020.
new text end