1.1 	A bill for an act
1.2 	relating to agriculture; increasing minimum ethanol
1.3 	content required for gasoline sold in the state;
1.4 	establishing a petroleum replacement goal; requiring
1.5 	studies and reports; amending Minnesota Statutes 2004,
1.6 	section 239.791, subdivision 1, by adding a
1.7 	subdivision; proposing coding for new law in Minnesota
1.8 	Statutes, chapter 239.
1.9 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.10 	Section 1. Minnesota Statutes 2004, section 239.791,
1.11 	subdivision 1, is amended to read:
1.12 		Subdivision 1.Minimum ethanol content required.  (a)
1.13 	Except as provided in subdivisions 10 to 14, a person
1.14 	responsible for the product shall ensure that all gasoline sold
1.15 	or offered for sale in Minnesota must contain at least 10.0
1.16 	percent denatured ethanol by volume.
1.17 	(b) For purposes of enforcing the minimum ethanol
1.18 	requirement of paragraph (a), a gasoline/ethanol blend will be
1.19 	construed to be in compliance if the ethanol content, exclusive
1.20 	of denaturants and permitted contaminants, comprises not less
1.21 	than 9.2 percent by volume and not more than 10.0 percent by
1.22 	volume of the blend as determined by an appropriate United
1.23 	States Environmental Protection Agency or American Society of
1.24 	Testing Materials standard method of analysis of alcohol/ether
1.25 	content in motor fuels.
1.26 	(c) The provisions of this subdivision are suspended during
1.27 	any period of time that subdivision 1a, paragraph (a), is in
2.1 	effect.

2.2 	Sec. 2. Minnesota Statutes 2004, section 239.791, is
2.3 	amended by adding a subdivision to read:
2.4 		Subd. 1a.Minimum ethanol content required. (a) Except
2.5 	as provided in subdivisions 10 to 14, on August 30, 2013, and
2.6 	thereafter, a person responsible for the product shall ensure
2.7 	that all gasoline sold or offered for sale in Minnesota must
2.8 	contain at least 20 percent denatured ethanol by volume.
2.9 	(b) For purposes of enforcing the minimum ethanol
2.10 	requirement of paragraph (a), a gasoline/ethanol blend will be
2.11 	construed to be in compliance if the ethanol content, exclusive
2.12 	of denaturants and permitted contaminants, comprises not less
2.13 	than 18.4 percent by volume and not more than 20 percent by
2.14 	volume of the blend as determined by an appropriate United
2.15 	States Environmental Protection Agency or American Society of
2.16 	Testing Materials standard method of analysis of alcohol content
2.17 	in motor fuels.
2.18 	(c) No motor fuel shall be deemed to be a defective product
2.19 	by virtue of the fact that the motor fuel is formulated or
2.20 	blended pursuant to the requirements of paragraph (a) under any
2.21 	theory of liability except for simple or willful negligence or
2.22 	fraud.  This paragraph does not preclude an action for
2.23 	negligent, fraudulent, or willful acts.  This paragraph does not
2.24 	affect a person whose liability arises under chapter 115, water
2.25 	pollution control; 115A, waste management; 115B, environmental
2.26 	response and liability; 115C, leaking underground storage tanks;
2.27 	or 299J, pipeline safety; under public nuisance law for damage
2.28 	to the environment or the public health; under any other
2.29 	environmental or public health law; or under any environmental
2.30 	or public health ordinance or program of a municipality as
2.31 	defined in section 466.01.
2.32 	(d) This subdivision expires on December 31, 2010, if by
2.33 	that date:
2.34 	(1) the commissioner of agriculture certifies and publishes
2.35 	the certification in the State Register that at least 20 percent
2.36 	of the volume of gasoline sold in the state is denatured
3.1 	ethanol; or 
3.2 	(2) federal approval has not been granted for the use of
3.3 	E20 as gasoline.  The United States Environmental Protection
3.4 	Agency's failure to act on an application shall not be deemed
3.5 	approval of the use of E20, or a waiver under section 211(f)(4)
3.6 	of the Clean Air Act, United States Code, title 42, section
3.7 	7545, subsection (f), paragraph (4).

3.8 	Sec. 3. [239.7911] PETROLEUM REPLACEMENT PROMOTION.
3.9 		Subdivision 1.Petroleum replacement goal. The petroleum
3.10 	replacement goal of the state of Minnesota is that at least 20
3.11 	percent of the liquid fuel sold in the state is derived from
3.12 	renewable sources by December 31, 2015.
3.13 		Subd. 2.Promotion of renewable liquid fuels. (a) The
3.14 	commissioner of agriculture, in consultation with the
3.15 	commissioners of commerce and the Pollution Control Agency,
3.16 	shall identify and implement activities necessary for the
3.17 	widespread use of renewable liquid fuels in the state.
3.18 	Beginning November 1, 2005, and continuing through 2015, the
3.19 	commissioners, or their designees, shall work with
3.20 	representatives from the renewable fuels industry, petroleum
3.21 	retailers, refiners, automakers, small engine manufacturers, and
3.22 	other interested groups, to develop annual recommendations for
3.23 	administrative and legislative action.
3.24 	(b) The activities of the commissioners under this
3.25 	subdivision shall include, but not be limited to:
3.26 	(1) developing recommendations for incentives for retailers
3.27 	to install equipment necessary for dispensing renewable liquid
3.28 	fuels to the public;
3.29 	(2) obtaining federal approval for the use of E20 as
3.30 	gasoline;
3.31 	(3) developing recommendations for ensuring that motor
3.32 	vehicles and small engine equipment have access to an adequate
3.33 	supply of fuel;
3.34 	(4) working with the owners and operators of large
3.35 	corporate automotive fleets in the state to increase their use
3.36 	of renewable fuels; and 
4.1 	(5) working to maintain an affordable retail price for
4.2 	liquid fuels.
4.3 	
EFFECTIVE DATE. This section is effective the day
4.4 	following final enactment.

4.5 	Sec. 4. REPORT ON E20 FUEL.
 4.6 	The commissioner of agriculture, in consultation with the
4.7 	commissioners of employment and economic development and the
4.8 	Pollution Control Agency, shall review the information and data
4.9 	collected in the evaluation of any federal waiver request for
4.10 	the use of E20 fuel in Minnesota.  The commissioner shall use
4.11 	existing budgetary and staff resources in conducting the
4.12 	review.  The review must include:
4.13 	(1) issues involving the use of E20 fuel if such fuel is
4.14 	mandated in Minnesota;
4.15 	(2) effects of E20 on development of Minnesota's ethanol
4.16 	industry; and 
4.17 	(3) effects of E20 on Minnesota consumers.
4.18 	The commissioner shall present an initial report to the
4.19 	legislative committees having jurisdiction over agriculture and
4.20 	environment policy and finance on the findings of the review to
4.21 	the legislature by January 15, 2009, and present an updated
4.22 	report to those committees on January 15, 2011.

4.23 	Sec. 5. SMALL ENGINE REPORT.
 4.24 	The commissioner of commerce, in consultation with the
4.25 	commissioner of agriculture, shall:
4.26 	(1) solicit information from national experts and
4.27 	stakeholders, which may include the United States Consumer
4.28 	Product Safety Commission, and review scientific studies on the
4.29 	use of E20 gasoline in motorcycles, outboard engines,
4.30 	snowmobiles, lawn and garden products, and other consumer
4.31 	equipment powered by small spark-ignited engines;
4.32 	(2) inventory and assess the availability of gasoline not
4.33 	blended with ethanol throughout the state for exempt uses under
4.34 	Minnesota Statutes, section 239.791, subdivisions 10 to 14, and
4.35 	make recommendations for addressing those areas in which the
4.36 	commissioner finds unblended gasoline is not readily available
5.1 	to consumers;
5.2 	(3) develop recommendations for notifying consumers as to
5.3 	the availability of gasoline not blended with ethanol in the
5.4 	state, and the appropriate use of gasoline blended with ethanol
5.5 	in small spark-ignited engines found in motorcycles, outboard
5.6 	engines, snowmobiles, and lawn and garden products; and 
5.7 	(4) by January 15, 2008, report to the agriculture and
5.8 	environmental policy committees of the house of representatives
5.9 	and senate on information and activities required under clauses
5.10 	(1) to (3).