HF 2987

3rd Engrossment - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to motor fuels; modifying definition of biodiesel; increasing minimum
biodiesel content; creating tiered biodiesel content goal; requiring notice,
a proposal, and recommendations to the legislature; appropriating money;
amending Minnesota Statutes 2006, section 239.77, as amended; Minnesota
Statutes 2007 Supplement, section 296A.01, subdivision 8a.

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

Section 1.

Minnesota Statutes 2006, section 239.77, as amended by Laws 2007, chapter
62, sections 3 and 4, is amended to read:

239.77 BIODIESEL CONTENT MANDATE.

Subdivision 1.

Biodiesel fuel.

"Biodiesel fuel" means a renewable, biodegradable,
mono alkyl ester combustible liquid fuel that is derived from agricultural or other
plant oils or animal fats and; that meets American Society For Testing and Materials
specification D6751-07 for Biodiesel Fuel (B100) Blend Stock for Distillate Fuels;
and that is manufactured by a person certified by the BQ-9000 National Biodiesel
Accreditation Program.

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 2.0 percent 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, 2015	20 percent

The minimum content levels in clauses (3) and (4) are effective during the months of
April, May, June, July, August, September, and October 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 is equal to at least 50 percent of anticipated demand at the next minimum
content level; and

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

(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 this subdivision 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 any applicable per-gallon federal tax credit
is 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
this subdivision. The biodiesel mandate must not be adjusted to less than five percent.

Subd. 3.

Exceptions.

(a) The minimum content requirement requirements of
subdivision 2 does 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; and

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

(4) off-road logging equipment and machinery; and

(5) vehicles and equipment used exclusively on an aircraft landing field.

(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.

(c) This subdivision expires May 1, 2012.

Subd. 4.

Disclosure.

A refinery or terminal shall provide, at the time diesel fuel
is sold or transferred from the refinery or terminal, a bill of lading or shipping manifest
to the person who receives the fuel. For biodiesel-blended products, the bill of lading or
shipping manifest must disclose biodiesel content, stating volume percentage, gallons of
biodiesel per gallons of petroleum diesel base-stock, or an ASTM "Bxx" designation
where "xx" denotes the volume percent biodiesel included in the blended product. This
subdivision does not apply to sales or transfers of biodiesel blend stock between refineries,
between terminals, or between a refinery and a terminal.

Subd. 5.

Annual Report.

Beginning in 2009, the commissioner of agriculture
shall report by January 15 of each year to the chairs and ranking minority members of
the legislative committees and divisions with jurisdiction over agriculture policy and
finance regarding the implementation of the minimum content requirements in subdivision
2, including information about the price and supply of biodiesel fuel. The report must
include any written comments received from members of the biodiesel fuel task force
by January 1 of that year.

Sec. 2.

Minnesota Statutes 2007 Supplement, section 296A.01, subdivision 8a, is
amended to read:

Subd. 8a.

Biodiesel fuel.

"Biodiesel fuel" means a renewable, biodegradable, mono
alkyl ester combustible liquid fuel derived from agricultural plant oils or animal fats
and that meets American Society for Testing and Materials specification D6751-07 for
Biodiesel Fuel (B100) Blend Stock for Distillate Fuels has the meaning given in section
239.77, subdivision 1.

Sec. 3. PROPOSAL; PETROLEUM INSPECTION FEE REVENUE.

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

Sec. 4. BIO-BASED DIESEL ALTERNATIVES.

(a) By January 1, 2011, the commissioners of agriculture, commerce, and pollution
control shall jointly review the technology, economics, and operational characteristics
associated with bio-based diesel alternatives and shall make recommendations concerning
their use in Minnesota to the governor and the chairs of the house of representatives and
senate committees with jurisdiction over agriculture and energy finance.

(b) For the purposes of this section, "bio-based diesel alternatives" means
alternatives to petroleum diesel fuel that are warrantied for use in a standard diesel engine
without modification and derived from a biological resource.

Sec. 5. TECHNICAL COLD WEATHER ISSUES.

The commissioners of agriculture and commerce shall convene technical
stakeholders who are experts in cold weather biodiesel and petroleum diesel issues to
consider and make recommendations regarding improvements in the production, blending,
handling, and distribution of biodiesel blends to further ensure the performance of these
fuels in cold weather. The commissioners shall issue a report on these issues by January
15, 2009, to the chairs of the house of representatives and senate committees with
jurisdiction over agriculture and commerce policy and finance.