1.1                          A bill for an act 
  1.2             relating to motor fuels; requiring that diesel fuel 
  1.3             sold in the state contain a minimum of five percent 
  1.4             biodiesel fuel oil by volume; requiring a study; 
  1.5             appropriating money; proposing coding for new law in 
  1.6             Minnesota Statutes, chapter 239. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  [239.77] [BIODIESEL CONTENT MANDATE.] 
  1.9      Subdivision 1.  [BIODIESEL FUEL OIL DESCRIBED.] "Biodiesel 
  1.10  fuel oil" means a biodegradable, combustible liquid fuel derived 
  1.11  from vegetable oils that meets ASTM specification PS 121-99 and 
  1.12  is suitable for blending with diesel fuel oil for use in 
  1.13  internal combustion diesel engines. 
  1.14     Subd. 2.  [MINIMUM CONTENT, EFFECTIVE DATE.] (a) Not later 
  1.15  than July 1, 2002, or 180 days after the commissioner of 
  1.16  agriculture publishes notice in the State Register that the 
  1.17  installed capacity in Minnesota for the production of biodiesel 
  1.18  fuel oil meets or exceeds 1.0 percent of the quantity of diesel 
  1.19  fuel sold in the state during the previous calendar year, 
  1.20  whichever date is later, all diesel fuel sold or offered for 
  1.21  sale in Minnesota for use in internal combustion engines must 
  1.22  contain at least 2.0 percent biodiesel fuel oil by volume. 
  1.23     (b) Not later than July 1, 2006, or 180 days after the 
  1.24  commissioner of agriculture publishes notice in the State 
  1.25  Register that Minnesota farmer-owned capacity in Minnesota for 
  1.26  the production of biodiesel fuel oil meets or exceeds 2.5 
  2.1   percent of the quantity of diesel fuel sold in the state during 
  2.2   the previous calendar year, whichever date is later, all diesel 
  2.3   fuel sold or offered for sale in Minnesota for use in internal 
  2.4   combustion engines must contain at least 5.0 percent biodiesel 
  2.5   fuel oil by volume.  For purposes of this paragraph, "Minnesota 
  2.6   farmer-owned" means that 51 percent or more of the financial and 
  2.7   capital investment and control in the processing enterprise are 
  2.8   farmers, as defined in section 500.24, subdivision 2, paragraph 
  2.9   (n), residing in Minnesota. 
  2.10     Sec. 2.  [COMMISSIONER OF TRANSPORTATION; STUDY.] 
  2.11     The commissioner of transportation, in consultation with 
  2.12  the commissioners of agriculture and revenue, shall study the 
  2.13  feasibility and desirability of providing a credit for special 
  2.14  fuel excise tax paid on biodiesel, with the credit to be based 
  2.15  on increased costs incurred by the taxpayer as a result of 
  2.16  biodiesel use.  The study must cover the effects of such a 
  2.17  credit on state fuel tax revenues, Minnesota agriculture, and 
  2.18  special fuel consumers.  The commissioner shall report to the 
  2.19  governor and legislature by January 15, 2002, on the results of 
  2.20  the study. 
  2.21     Sec. 3.  [APPROPRIATION.] 
  2.22     $....... is appropriated from the general fund to the 
  2.23  commissioner of transportation for fiscal year 2002 for the 
  2.24  costs of the study required under section 2.