1.1 	A bill for an act
1.2 	relating to motor fuels; modifying definition of biodiesel; increasing minimum 
1.3 	biodiesel content; creating tiered biodiesel content goal; requiring notice, 
1.4 	a proposal, and recommendations to the legislature; appropriating money;
1.5 	amending Minnesota Statutes 2006, section 239.77, as amended; Minnesota 
1.6 	Statutes 2007 Supplement, section 296A.01, subdivision 8a.
1.7 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.8 	Section 1. Minnesota Statutes 2006, section 239.77, as amended by Laws 2007, chapter 
1.9 	62, sections 3 and 4, is amended to read:
1.10 	239.77 BIODIESEL CONTENT MANDATE.
1.11 		Subdivision 1.Biodiesel fuel. "Biodiesel fuel" means a renewable, biodegradable, 
1.12 	mono alkyl ester combustible liquid fuel that is derived from agricultural and other 
1.13 	plant oils or animal fats and; that meets American Society For Testing and Materials 
1.14 	specification D6751-07 for Biodiesel Fuel (B100) Blend Stock for Distillate Fuels; 
1.15 	and that is manufactured by a person certified by the BQ-9000 National Biodiesel 
1.16 	Accreditation Program.
1.17 		Subd. 2.Minimum content. (a) Except as otherwise provided in this section, all 
1.18 	diesel fuel sold or offered for sale in Minnesota for use in internal combustion engines 
1.19 	must contain at least 2.0 percent the stated percentage of biodiesel fuel oil by volume.
1.20 	on and after the following dates:

1.21	(1)
	September 29, 2005
	2 percent
	
1.22	(2)
	May 1, 2009
	5 percent
	
1.23	(3)
	May 1, 2012
	10 percent
	
1.24	(4)
	May 1, 2015
	20 percent
	
2.1 	The minimum content levels in clauses (3) and (4) are effective during the months of 
2.2 	April, May, June, July, August, September, and October only. The minimum content for 
2.3 	the remainder of the year is five percent. However, if the commissioners of agriculture, 
2.4 	commerce, and pollution control determine, after consultation with the biodiesel task 
2.5 	force and other technical experts, that an American Society for Testing and Materials 
2.6 	specification or equivalent federal standard exists for the specified biodiesel blend level in 
2.7 	those clauses that adequately addresses technical issues associated with Minnesota's cold 
2.8 	weather and publish a notice in the State Register to that effect, the commissioners may 
2.9 	allow the specified biodiesel blend level in those clauses to be effective year-round.
2.10 	(b) The minimum content levels in paragraph (a), clauses (3) and (4), become 
2.11 	effective on the date specified only if the commissioners of agriculture, commerce, 
2.12 	and pollution control publish notice in the State Register and provide written notice to 
2.13 	the chairs of the house of representatives and senate committees with jurisdiction over 
2.14 	agriculture, commerce, and transportation policy and finance, at least 270 days prior to the 
2.15 	date of each scheduled increase, that all of the following conditions have been met and the 
2.16 	state is prepared to move to the next scheduled minimum content level:
2.17 	(1) an American Society for Testing and Materials specification or equivalent federal 
2.18 	standard exists for the next minimum diesel-biodiesel blend;
2.19 	(2) a sufficient supply of biodiesel is available and the amount of biodiesel produced 
2.20 	in this state is equal to at least 50 percent of anticipated demand at the next minimum 
2.21 	content level; and
2.22 	(3) adequate blending infrastructure and regulatory protocol are in place in order to 
2.23 	promote biodiesel quality and avoid any potential economic disruption.
2.24 	(c) The commissioners of agriculture, commerce, and pollution control must consult 
2.25 	with the biodiesel task force when assessing and certifying conditions in paragraph (b), 
2.26 	and in general must seek the guidance of the biodiesel task force regarding biodiesel 
2.27 	labeling, enforcement, and other related issues.
2.28 	(d) During a period of biodiesel fuel shortage or a problem with biodiesel quality 
2.29 	that negatively affects the availability of biodiesel fuel, the commissioner of commerce 
2.30 	may temporarily suspend the minimum content requirement in subdivision 2 until there 
2.31 	is sufficient biodiesel fuel, as defined in subdivision 1, available to fulfill the minimum 
2.32 	content requirement.
2.33 	(e) By February 1, 2012, and periodically thereafter, the commissioner of commerce 
2.34 	shall determine the wholesale diesel price at various pipeline and refinery terminals in 
2.35 	the region, and the biodiesel price determined after the $1 per gallon federal credit is 
2.36 	subtracted at biodiesel plants in the region. The commissioner shall report wholesale price 
3.1 	differences to the governor who, after consultation with the commissioners of commerce 
3.2 	and agriculture, may by executive order adjust the biodiesel mandate if a price disparity 
3.3 	reported by the commissioner will cause economic hardship to retailers of diesel fuel 
3.4 	in this state. Any adjustment must be for a specified period of time, after which the 
3.5 	percentage of biodiesel fuel to be blended into diesel fuel returns to the amount required in 
3.6 	subdivision 2. The biodiesel mandate must not be adjusted to less than five percent.
3.7 		Subd. 3.Exceptions. (a) The minimum content requirement requirements of 
3.8 	subdivision 2 does do not apply to fuel used in the following equipment:
3.9 	(1) motors located at an electric generating plant regulated by the Nuclear 
3.10 	Regulatory Commission;
3.11 	(2) railroad locomotives; and
3.12 	(3) off-road taconite and copper mining equipment and machinery.
3.13 	(b) The exemption in paragraph (a), clause (1), expires 30 days after the Nuclear 
3.14 	Regulatory Commission has approved the use of biodiesel fuel in motors at electric 
3.15 	generating plants under its regulation.
3.16 		Subd. 4.Disclosure. A refinery or terminal shall provide, at the time diesel fuel 
3.17 	is sold or transferred from the refinery or terminal, a bill of lading or shipping manifest 
3.18 	to the person who receives the fuel. For biodiesel-blended products, the bill of lading or 
3.19 	shipping manifest must disclose biodiesel content, stating volume percentage, gallons of 
3.20 	biodiesel per gallons of petroleum diesel base-stock, or an ASTM "Bxx" designation 
3.21 	where "xx" denotes the volume percent biodiesel included in the blended product. This 
3.22 	subdivision does not apply to sales or transfers of biodiesel blend stock between refineries, 
3.23 	between terminals, or between a refinery and a terminal.

3.24 	Sec. 2. Minnesota Statutes 2007 Supplement, section 296A.01, subdivision 8a, is 
3.25 	amended to read:
3.26 		Subd. 8a.Biodiesel fuel. "Biodiesel fuel" means a renewable, biodegradable, mono 
3.27 	alkyl ester combustible liquid fuel derived from agricultural plant oils or animal fats 
3.28 	and that meets American Society for Testing and Materials specification D6751-07 for 
3.29 	Biodiesel Fuel (B100) Blend Stock for Distillate Fuels has the meaning given in section 
3.30 	239.77, subdivision 1.

3.31 	Sec. 3. PROPOSAL; PETROLEUM INSPECTION FEE REVENUE.
 3.32 	The commissioners of finance, commerce, and pollution control must develop and 
3.33 	submit to the legislature as part of their next biennial budget request a proposal for 
3.34 	eliminating, to the extent feasible, redundant fuel inspections and dedicating all revenue 
4.1 	from the petroleum inspection fee levied on petroleum products under Minnesota Statutes, 
4.2 	section 239.101, subdivision 3, to the Weights and Measures Division of the Department 
4.3 	of Commerce. All additional funding appropriated to the Weights and Measures Division 
4.4 	under this proposal must be used for increased and enhanced fuel quality assurance 
4.5 	enforcement activities and equipment and for educational activities focused on the 
4.6 	handling, distribution, and use of biodiesel fuel.

4.7 	Sec. 4. BIO-BASED DIESEL ALTERNATIVES.
 4.8 	(a) By January 1, 2011, the commissioners of agriculture, commerce, and pollution 
4.9 	control shall jointly review the technology, economics, and operational characteristics 
4.10 	associated with bio-based diesel alternatives and shall make recommendations concerning 
4.11 	their use in Minnesota to the governor and the chairs of the house of representatives and 
4.12 	senate committees with jurisdiction over agriculture and energy finance.
4.13 	(b) For the purposes of this section, "bio-based diesel alternatives" means 
4.14 	alternatives to petroleum diesel fuel that are warrantied for use in a standard diesel engine 
4.15 	without modification and derived from a biological resource.

4.16 	Sec. 5. APPROPRIATION.
 4.17 	$1,000,000 is appropriated in fiscal year 2009 from the general fund to the 
4.18 	commissioner of agriculture. $500,000 is for cold-weather biodiesel blending 
4.19 	infrastructure grants to fuel terminals that serve Minnesota. $500,000 must be used to 
4.20 	support the algae-to-biofuels research project at the University of Minnesota and the 
4.21 	Metropolitan Council.