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HF 4328

as introduced - 92nd Legislature (2021 - 2022) Posted on 03/17/2022 02:20pm

KEY: stricken = removed, old language.
underscored = added, new language.

Bill Text Versions

Engrossments
Introduction Posted on 03/17/2022

Current Version - as introduced

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A bill for an act
relating to commerce; establishing a liquid fuel modernization fee and
reimbursement program; appropriating money; amending Minnesota Statutes 2020,
section 296A.15, by adding a subdivision; proposing coding for new law in
Minnesota Statutes, chapter 239.

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

Section 1.

new text begin [239.787] LIQUID FUEL MODERNIZATION FEE; REIMBURSEMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Aboveground storage tank system" means the system of components required to
safely store liquid fuel aboveground and make it available to (1) purchase by a consumer,
or (2) load onto a fuel transport vehicle. Aboveground storage tank system includes but is
not limited to tanks, vent tubes, tank monitors, piping, pumps, containment, meters, loading
racks, dispensers, hoses, and pump handles which are primarily located aboveground.
new text end

new text begin (c) "Account" means the liquid fuel modernization account established in subdivision
2.
new text end

new text begin (d) "Board" means the Liquid Fuel Modernization Board required under subdivision 12.
new text end

new text begin (e) "Bulk plant" means a liquid fuel storage facility with no more than 250,000 gallons
of combined aboveground and underground storage capacity.
new text end

new text begin (f) "Controlled group" has the meaning given in section 1563(a) of the Internal Revenue
Code.
new text end

new text begin (g) "Eligible entity" means a person, including a controlled group, that installs eligible
fuel infrastructure at a new or existing retail fueling site or bulk plant owned or operated
by the person.
new text end

new text begin (h) "Eligible fuel infrastructure" means:
new text end

new text begin (1) all aboveground storage tank system components that are compatible with higher
biofuel blends, and essential parts and materials that directly support the components; and
new text end

new text begin (2) all underground storage tank system components that are compatible with higher
biofuel blends, and essential parts and materials that directly support the components.
new text end

new text begin (i) "Financial assistance" means federal, state, local, and private grants, forgivable loans,
and insurance proceeds that support the installation of eligible fuel infrastructure.
new text end

new text begin (j) "Higher biofuel blends" means (1) blends of gasoline and ethanol containing more
than ten percent ethanol by volume, and (2) blends of diesel and biodiesel containing more
than 20 percent biodiesel by volume.
new text end

new text begin (k) "Liquid fuel" means petroleum products.
new text end

new text begin (l) "Petroleum products" means the products identified in section 296A.01, subdivision
42, and blends of diesel and biodiesel containing between 21 and 100 percent biodiesel.
new text end

new text begin (m) "Retail fueling site" means a convenience store, service station, or other facility that
offers liquid fuel for sale to consumers.
new text end

new text begin (n) "Underground storage tank system" means the system of components required to
safely store liquid fuel underground and make it available to (1) purchase by a consumer,
or (2) load onto a fuel transport vehicle. Underground storage tank system includes but is
not limited to spill buckets, drop tubes, tanks, vent tubes, tank monitors, piping, submersible
pumps, containment, meters, dispensers, hoses, and pump handles which are located above
or below ground.
new text end

new text begin Subd. 2. new text end

new text begin Account; revenue sources; appropriation. new text end

new text begin (a) A liquid fuel modernization
account is established in the special revenue fund. Revenue from the following sources must
be deposited in the state treasury and credited to the account:
new text end

new text begin (1) the proceeds of the fee imposed under subdivision 4;
new text end

new text begin (2) interest attributable to investment of money in the account;
new text end

new text begin (3) money received by the commissioner in the form of gifts, grants other than federal
grants, reimbursements, or appropriations from any source intended to be used for the
purposes of this section; and
new text end

new text begin (4) money recovered by the state under this section, including administrative expenses,
civil penalties, and money paid under an agreement, stipulation, or settlement.
new text end

new text begin (b) Money in the account is appropriated to the commissioner to award and administer
reimbursements under subdivision 5.
new text end

new text begin Subd. 3. new text end

new text begin Imposing fee. new text end

new text begin The commissioner must notify the commissioner of revenue if
the unencumbered balance of the account falls below $25,000,000 and, within 90 days after
the date notice is received, the commissioner of revenue must impose the fee required under
subdivision 4 on the use of a tank for six calendar months, with payment to be submitted
with each monthly distributor tax return.
new text end

new text begin Subd. 4. new text end

new text begin Liquid fuel modernization fee. new text end

new text begin (a) Beginning July 1, 2022, until June 30,
2032, a liquid fuel modernization fee is imposed on the use of tanks that contain petroleum
products. On products other than gasoline, the fee must be paid in the manner provided in
section 296A.15 by the first licensed distributor receiving the product in Minnesota, as
defined in section 296A.01. When the product is gasoline, the distributor responsible for
paying the gasoline tax is also responsible for paying the liquid fuel modernization fee.
new text end

new text begin (b) The commissioner of revenue must impose the fee at a rate of $13 per 1,000 gallons
of petroleum products, rounded to the nearest 1,000 gallons.
new text end

new text begin (c) A distributor who fails to pay the fee imposed under this subdivision is subject to
the penalties provided in section 296A.22.
new text end

new text begin Subd. 5. new text end

new text begin Reimbursement program. new text end

new text begin (a) The commissioner, in consultation with the
board, must implement a liquid fuel modernization reimbursement program and reimburse
eligible entities. Applicants for reimbursement must apply to the commissioner in the form
required by the commissioner.
new text end

new text begin (b) Reimbursements are equal to 65 percent of total reasonable equipment and labor
costs incurred by an eligible entity to acquire and install eligible fuel infrastructure, but
must not exceed $800,000 per eligible entity each year. If an eligible entity also receives
financial assistance from another source, the commissioner must decrease the reimbursement
amount under this paragraph if necessary so that total financial assistance from all sources
does not exceed 100 percent of total reasonable equipment and labor costs. The commissioner
must determine reasonable costs for purposes of this section.
new text end

new text begin (c) Applications for reimbursement must be submitted no later than one year after the
date the work is performed and must be accompanied by:
new text end

new text begin (1) an invoice that demonstrates to the commissioner's satisfaction that all invoiced costs
were incurred after July 1, 2022, and paid in full by the applicant; and
new text end

new text begin (2) an affidavit certifying that:
new text end

new text begin (i) all equipment and labor costs submitted for reimbursement were incurred to purchase
or install eligible fuel infrastructure;
new text end

new text begin (ii) no contractor has advanced funds to the applicant; and
new text end

new text begin (iii) the applicant must use the eligible fuel infrastructure to offer higher biofuel blends
for sale at the retail fueling site or to store higher biofuel blends at the bulk plant.
new text end

new text begin (d) The commissioner must consider a complete initial application within 60 days of the
date the initial application is submitted, and must consider a complete supplemental
application within 120 days of the date the supplemental application is submitted. The
commissioner must notify the applicant in writing if additional time is necessary to review
the initial or supplemental application.
new text end

new text begin Subd. 6. new text end

new text begin Duty to provide information. new text end

new text begin (a) A person who submits an application to the
commissioner for reimbursement, or who has issued invoices or other demands for payment
which are the basis of an application, must (1) furnish to the commissioner copies of any
financial records which the commissioner requests and that are relevant to determining the
validity of the costs listed in the application, or (2) make the financial records reasonably
available to the commissioner to inspect and audit. The commissioner may obtain access
to information required to be made available under this section as provided in paragraph
(b).
new text end

new text begin (b) The commissioner or any member, employee, or agent of the agency authorized by
the commissioner, may, upon presentation of official agency credentials, take any of the
following actions:
new text end

new text begin (1) examine and copy books, papers, records, memoranda, or data of a person who has
a duty to provide information to the commissioner under paragraph (a); and
new text end

new text begin (2) enter upon public or private property to take action authorized by this subdivision,
including to obtain information from a person who has a duty to provide the information
under paragraph (a), to conduct surveys and investigations, and to take corrective action.
new text end

new text begin Subd. 7. new text end

new text begin Appealing reimbursement determination. new text end

new text begin (a) An applicant for reimbursement
may appeal to the board a reimbursement determination made by the commissioner under
this section by submitting a written notice setting forth the specific basis for the appeal. The
commissioner must send written notification of the commissioner's reimbursement
determination by first class United States mail to the applicant for reimbursement at the
applicant's last known address. The applicant for reimbursement must file with the board
written notice of an appeal of a reimbursement determination made by the commissioner
within 60 days of the date that the commissioner sends written notice to the applicant of
the reimbursement determination. The board must consider the appeal within 90 days of
receipt of the written notice of appeal by the applicant for reimbursement. The written notice
must set forth the specific basis for the appeal.
new text end

new text begin (b) An applicant for reimbursement may appeal a reimbursement determination of the
board as a contested case under chapter 14. An applicant for reimbursement must provide
written notification to the board of a request for a contested case, setting forth the specific
basis for the appeal, within 30 days of the date that the board makes a reimbursement
determination. An appeal of the board's reimbursement determination may be made only
by the applicant. The commissioner must make the final decision in a contested case
requested by an applicant.
new text end

new text begin Subd. 8. new text end

new text begin Returning reimbursement. new text end

new text begin (a) The commissioner may demand the complete
or partial return of any reimbursement made under this section if the applicant for
reimbursement (1) misrepresents or omits a fact relevant to a determination made by the
commissioner under this section, or (2) has entered an agreement to settle or compromise
any portion of the reimbursed costs. If the applicant has entered an agreement to settle or
compromise any portion of the reimbursed costs, the amount returned must be prorated in
proportion to the amount of the settlement or compromise.
new text end

new text begin (b) If a reimbursement under this section is not returned upon demand of the
commissioner, the commissioner may recover the reimbursement, with administrative and
legal expenses, in a civil action in a district court brought by the attorney general against
the applicant. If the commissioner's demand for return of the reimbursement is based on
willful actions of the applicant, the applicant must also forfeit and pay to the state a civil
penalty, in an amount to be determined by the court, of not more than the full amount of
the reimbursement.
new text end

new text begin Subd. 9. new text end

new text begin Fraud. new text end

new text begin (a) If a person, with intent to defraud, issues an invoice or other demand
for payment with knowledge that the invoice or other demand is false in whole or in part,
and with knowledge that the invoice or other demand is being submitted to the board for
reimbursement:
new text end

new text begin (1) that person is considered to have presented a false claim to a public body under
section 609.465; and
new text end

new text begin (2) the commissioner may demand that the person return any money received as a result
of a reimbursement made on the basis of the false invoice or other demand for payment.
new text end

new text begin (b) If the money is not returned upon demand by the commissioner, the commissioner
may recover the money, with administrative and legal expenses, in a civil action in district
court brought by the attorney general against the person. The person must also forfeit and
pay to the state a civil penalty, in an amount to be determined by the court, of not more than
the full amount of the money received by the person on the basis of the false invoice or
other demand for payment.
new text end

new text begin Subd. 10. new text end

new text begin Kickbacks. new text end

new text begin A consultant or contractor, as a condition of performing services,
must not agree to pay or forgive the nonreimbursable portion of an application for
reimbursement submitted under this section. An applicant must not accept forgiveness or
demand payment from a consultant or contractor for the nonreimbursable portion of an
application for reimbursement submitted under this section.
new text end

new text begin Subd. 11. new text end

new text begin Obligation limited; insufficient funds. new text end

new text begin (a) The state's obligation to make
reimbursement under this section is limited to the amount available. Notwithstanding any
other provision in this section, there is no general fund obligation to make a reimbursement
if there is not sufficient money in the account.
new text end

new text begin (b) The commissioner must not approve an application for reimbursement if there is
insufficient money available in the account to pay the reimbursement.
new text end

new text begin Subd. 12. new text end

new text begin Board. new text end

new text begin (a) The commissioner must convene a Liquid Fuel Modernization
Board. The board consists of:
new text end

new text begin (1) the commissioner of commerce or the commissioner's designee;
new text end

new text begin (2) the commissioner of agriculture or the commissioner's designee;
new text end

new text begin (3) the commissioner of the Pollution Control Agency or the commissioner's designee;
new text end

new text begin (4) a Minnesota fuel equipment and service industry representative, appointed by the
governor; and
new text end

new text begin (5) a Minnesota petroleum industry representative, appointed by the governor.
new text end

new text begin (b) The board member appointed under paragraph (a), clause (5), shall serve as chair of
the board.
new text end

new text begin (c) The filling of positions, vacancies, membership terms, payment of compensation
and expenses, and removal of members are governed by section 15.0575.
new text end

new text begin (d) The board's duties are to advise the commissioner regarding the liquid fuel
modernization fee and reimbursement program and to consider appeals under subdivision
7.
new text end

new text begin Subd. 13. new text end

new text begin Rules. new text end

new text begin The commissioner may adopt rules necessary to implement this section.
new text end

new text begin Subd. 14. new text end

new text begin Expiration. new text end

new text begin This section expires June 30, 2033.
new text end

Sec. 2.

Minnesota Statutes 2020, section 296A.15, is amended by adding a subdivision to
read:


new text begin Subd. 2a. new text end

new text begin Liquid fuel modernization fee. new text end

new text begin (a) A person required to pay a liquid fuel
modernization fee under section 239.787, subdivision 3, must file a report with the
commissioner of revenue. Each report must include the amount of fees due on petroleum
products. Reports must be filed in the form and manner prescribed by the commissioner. A
written report is considered filed as required if postmarked on or before the 23rd day of the
month in which the fee is payable.
new text end

new text begin (b) This subdivision expires June 30, 2032.
new text end