1.1                          A bill for an act 
  1.2             relating to agriculture; modifying provisions relating 
  1.3             to ethanol and other motor fuels; requiring reports; 
  1.4             appropriating money; amending Minnesota Statutes 2004, 
  1.5             sections 41A.09, subdivisions 2a, 3a; 116D.04, 
  1.6             subdivision 2a; 239.791, subdivision 1, by adding a 
  1.7             subdivision; proposing coding for new law in Minnesota 
  1.8             Statutes, chapters 16C; 239. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  [16C.137] [MINIMIZING ENERGY USE; RENEWABLE 
  1.11  FUELS.] 
  1.12     Subdivision 1.  [LEGISLATIVE FINDINGS.] The legislature 
  1.13  finds that increased use of agricultural renewable fuels such as 
  1.14  ethanol, biodiesel, and hydrogen made from agricultural products 
  1.15  will reduce Minnesota's dependence on imported oil and help 
  1.16  protect our environment while providing enormous benefit to 
  1.17  Minnesota's rural communities and agricultural economy.  
  1.18  Furthermore, Minnesota has a unique economic advantage in the 
  1.19  ability to produce clean, renewable, domestic fuels and 
  1.20  Minnesota leads the nation in the production and use of ethanol 
  1.21  and biodiesel.  State agencies need to be urged, once again, to 
  1.22  use cleaner fuels like ethanol, biodiesel, and hydrogen in state 
  1.23  vehicles and to purchase vehicles capable of being powered by 
  1.24  these cleaner fuels as required by section 16C.135. 
  1.25     Subd. 2.  [GOALS AND ACTIONS.] (a) Using 2005 as a 
  1.26  baseline, the state of Minnesota shall reduce the use of 
  1.27  gasoline by on-road vehicles owned by state departments by 25 
  2.1   percent by 2010 and 50 percent by 2015 and reduce the use of 
  2.2   petroleum-based diesel fuel in diesel-fueled vehicles by ten 
  2.3   percent by 2010 and 25 percent by 2015. 
  2.4      (b) To meet the goals established in paragraph (a), each 
  2.5   state department will, whenever legally, technically, and 
  2.6   economically feasible, subject to the specific needs of the 
  2.7   department and responsible management of agency finances: 
  2.8      (1) ensure that at least 75 percent of purchases of new 
  2.9   on-road vehicles, excluding emergency and law enforcement 
  2.10  vehicles: 
  2.11     (i) use "cleaner fuels" as that term is defined in section 
  2.12  16C.135, subdivision 1, clauses (1), (3), and (4); or 
  2.13     (ii) have fuel efficiency ratings that exceed 30 miles per 
  2.14  gallon for city usage or 35 miles per gallon for highway usage, 
  2.15  including but not limited to hybrid electric cars and 
  2.16  hydrogen-powered vehicles; 
  2.17     (2) increase its use of renewable transportation fuels, 
  2.18  including ethanol, biodiesel, and hydrogen, from agricultural 
  2.19  products; and 
  2.20     (3) increase its use of Web-based Internet applications and 
  2.21  other electronic information technologies to enhance the access 
  2.22  to and delivery of government information and services to the 
  2.23  public, and reduce the reliance on the department's fleet for 
  2.24  the delivery of the information and services. 
  2.25     Subd. 3.  [SMARTFLEET COMMITTEE.] (a) The commissioner of 
  2.26  administration, or the commissioner's designee, shall chair a 
  2.27  SmartFleet Committee consisting of representatives designated by 
  2.28  the commissioners of the Pollution Control Agency, the 
  2.29  Departments of Agriculture, Transportation, and Commerce, and 
  2.30  other state departments that wish to participate.  To ensure 
  2.31  effective and efficient state participation, the SmartFleet 
  2.32  Committee must assist state departments in implementing the 
  2.33  requirements of this section, including providing information, 
  2.34  guidance, sample policies and procedures, and technical and 
  2.35  planning assistance. 
  2.36     (b) The SmartFleet Committee must evaluate the goals and 
  3.1   directives established in this section by December 2006 and 
  3.2   periodically thereafter.  The committee must make 
  3.3   recommendations to the governor and appropriate committees of 
  3.4   the legislature on February 1 of each year for new or adjusted 
  3.5   goals and directives, in light of the progress the state has 
  3.6   made implementing this section, and of the availability of new 
  3.7   or improved technologies. 
  3.8      (c) For the systematic and efficient monitoring of progress 
  3.9   in implementing this section by the SmartFleet Committee, the 
  3.10  Department of Administration shall implement a fleet reporting 
  3.11  and information management system.  Each department will use 
  3.12  this management system to demonstrate its progress in complying 
  3.13  with this section. 
  3.14     Subd. 4.  [EXCLUSION.] Petroleum-based diesel fuel used in 
  3.15  a vehicle that a department has retrofit to use ultra low sulfur 
  3.16  diesel fuel and to add additional emissions control technologies 
  3.17  is excluded when evaluating progress toward the reduction goals 
  3.18  established in subdivision 2.  This exclusion applies only to 
  3.19  vehicles purchased before the model year in which the federal 
  3.20  Environmental Protection Agency's new clean diesel emission 
  3.21  reduction rules take effect. 
  3.22     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
  3.23  following final enactment. 
  3.24     Sec. 2.  Minnesota Statutes 2004, section 41A.09, 
  3.25  subdivision 2a, is amended to read: 
  3.26     Subd. 2a.  [DEFINITIONS.] For the purposes of this section, 
  3.27  the terms defined in this subdivision have the meanings given 
  3.28  them. 
  3.29     (a) "Ethanol" means fermentation ethyl alcohol derived from 
  3.30  agricultural products, including potatoes, cereal grains, cheese 
  3.31  whey, and sugar beets; forest products; or other renewable 
  3.32  resources, including residue and waste generated from the 
  3.33  production, processing, and marketing of agricultural products, 
  3.34  forest products, and other renewable resources, that: 
  3.35     (1) meets all of the specifications in ASTM specification 
  3.36  D4806-01; and 
  4.1      (2) is denatured as specified in Code of Federal 
  4.2   Regulations, title 27, parts 20 and 21. 
  4.3      (b) "Ethanol plant" means a plant at which ethanol is 
  4.4   produced. 
  4.5      (c) "Commissioner" means the commissioner of agriculture. 
  4.6      (d) "E85 fuel handling and dispensing equipment" means 
  4.7   capital investments made primarily for the receipt, storage, 
  4.8   handling, pumping, and delivery of E85 petroleum products as 
  4.9   defined in section 296A.01, subdivision 19. 
  4.10     Sec. 3.  Minnesota Statutes 2004, section 41A.09, 
  4.11  subdivision 3a, is amended to read: 
  4.12     Subd. 3a.  [ETHANOL PRODUCER PAYMENTS.] (a) The 
  4.13  commissioner shall make cash payments to producers of ethanol 
  4.14  located in the state that have begun production by June 30, 2000.
  4.15  For the purpose of this subdivision, an entity that holds a 
  4.16  controlling interest in more than one ethanol plant is 
  4.17  considered a single producer.  The amount of the payment for 
  4.18  each producer's annual production, except as provided in 
  4.19  paragraph (c), is 20 cents per gallon for each gallon of ethanol 
  4.20  produced on or before June 30, 2000, or ten years after the 
  4.21  start of production, whichever is later.  Annually, within 90 
  4.22  days of the end of its fiscal year, an ethanol producer 
  4.23  receiving payments under this subdivision must file a disclosure 
  4.24  statement on a form provided by the commissioner.  The initial 
  4.25  disclosure statement must include a summary description of the 
  4.26  organization of the business structure of the claimant, a 
  4.27  listing of the percentages of ownership by any person or other 
  4.28  entity with an ownership interest of five percent or greater, 
  4.29  and a copy of its annual audited financial statements, including 
  4.30  the auditor's report and footnotes.  The disclosure statement 
  4.31  must include information demonstrating what percentage of the 
  4.32  entity receiving payments under this section is owned by farmers 
  4.33  or other entities eligible to farm or own agricultural land in 
  4.34  Minnesota under the provisions of section 500.24.  Subsequent 
  4.35  annual reports must reflect noncumulative changes in ownership 
  4.36  of ten percent or more of the entity.  The report need not 
  5.1   disclose the identity of the persons or entities eligible to 
  5.2   farm or own agricultural land with ownership interests, 
  5.3   individuals residing within 30 miles of the plant, or of any 
  5.4   other entity with less than ten percent ownership interest, but 
  5.5   the claimant must retain information within its files confirming 
  5.6   the accuracy of the data provided.  This data must be made 
  5.7   available to the commissioner upon request.  Not later than the 
  5.8   15th day of February in each year the commissioner shall deliver 
  5.9   to the chairs of the standing committees of the senate and the 
  5.10  house of representatives that deal with agricultural policy and 
  5.11  agricultural finance issues an annual report summarizing 
  5.12  aggregated data from plants receiving payments under this 
  5.13  section during the preceding calendar year.  Audited financial 
  5.14  statements and notes and disclosure statements submitted to the 
  5.15  commissioner are nonpublic data under section 13.02, subdivision 
  5.16  9.  Notwithstanding the provisions of chapter 13 relating to 
  5.17  nonpublic data, summaries of the submitted audited financial 
  5.18  reports and notes and disclosure statements will be contained in 
  5.19  the report to the committee chairs and will be public data.  
  5.20     (b) No payments shall be made for ethanol production that 
  5.21  occurs after June 30, 2010.  
  5.22     (c) If the level of production at an ethanol plant 
  5.23  increases due to an increase in the production capacity of the 
  5.24  plant, the payment under paragraph (a) applies to the additional 
  5.25  increment of production until ten years after the increased 
  5.26  production began.  Once a plant's production capacity reaches 
  5.27  15,000,000 gallons per year, no additional increment will 
  5.28  qualify for the payment. 
  5.29     (d) Total payments under paragraphs (a) and (c) to a 
  5.30  producer in a fiscal year may not exceed $3,000,000. 
  5.31     (e) By the last day of October, January, April, and July, 
  5.32  each producer shall file a claim for payment for ethanol 
  5.33  production during the preceding three calendar months.  A 
  5.34  producer that files a claim under this subdivision shall include 
  5.35  a statement of the producer's total ethanol production in 
  5.36  Minnesota during the quarter covered by the claim.  For each 
  6.1   claim and statement of total ethanol production filed under this 
  6.2   subdivision, the volume of ethanol production must be examined 
  6.3   by an independent certified public accountant in accordance with 
  6.4   standards established by the American Institute of Certified 
  6.5   Public Accountants. 
  6.6      (f) Payments shall be made November 15, February 15, May 
  6.7   15, and August 15.  A separate payment shall be made for each 
  6.8   claim filed.  Except as provided in paragraph (g), the total 
  6.9   quarterly payment to a producer under this paragraph may not 
  6.10  exceed $750,000.  
  6.11     (g) Notwithstanding the quarterly payment limits of 
  6.12  paragraph (f), the commissioner shall make an additional payment 
  6.13  in the fourth quarter of each fiscal year to ethanol producers 
  6.14  for the lesser of:  (1) 20 cents per gallon of production in the 
  6.15  fourth quarter of the year that is greater than 3,750,000 
  6.16  gallons; or (2) the total amount of payments lost during the 
  6.17  first three quarters of the fiscal year due to plant outages, 
  6.18  repair, or major maintenance.  Total payments to an ethanol 
  6.19  producer in a fiscal year, including any payment under this 
  6.20  paragraph, must not exceed the total amount the producer is 
  6.21  eligible to receive based on the producer's approved production 
  6.22  capacity.  The provisions of this paragraph apply only to 
  6.23  production losses that occur in quarters beginning after 
  6.24  December 31, 1999. 
  6.25     (h) The commissioner shall reimburse ethanol producers for 
  6.26  any deficiency in payments during earlier quarters if the 
  6.27  deficiency occurred because of unallotment or because 
  6.28  appropriated money was insufficient to make timely payments in 
  6.29  the full amount provided in paragraph (a).  Notwithstanding the 
  6.30  quarterly or annual payment limitations in this subdivision, the 
  6.31  commissioner shall begin making payments for earlier 
  6.32  deficiencies in each fiscal year that appropriations for ethanol 
  6.33  payments exceed the amount required to make eligible scheduled 
  6.34  payments.  Payments for earlier deficiencies must continue until 
  6.35  the deficiencies for each producer are paid in full. 
  6.36     (i) If, in any calendar year beginning after December 31, 
  7.1   2007, the appropriation for value-added agricultural products 
  7.2   under this section is in excess of the amount required to make 
  7.3   scheduled ethanol producer payments and deficiency payments for 
  7.4   payments delayed because of unallotment or because appropriated 
  7.5   funds in earlier fiscal years were insufficient, the 
  7.6   commissioner may make grants in amounts not exceeding $15,000 
  7.7   per grant to distributors and retailers of motor fuels as 
  7.8   defined in section 296A.01, subdivision 33, for up to 50 percent 
  7.9   of the cost incurred for the installation of E85 fuel handling 
  7.10  or dispensing equipment. 
  7.11     (j) For fiscal year 2008 and thereafter, $20,500,000 is 
  7.12  annually appropriated from the general fund to the commissioner 
  7.13  of agriculture for purposes of ethanol producer payments and 
  7.14  grants to petroleum distributors and retailers for the 
  7.15  installation of E85 fuel handling and dispensing equipment. 
  7.16     Sec. 4.  Minnesota Statutes 2004, section 116D.04, 
  7.17  subdivision 2a, is amended to read: 
  7.18     Subd. 2a.  [WHEN PREPARED.] Where there is potential for 
  7.19  significant environmental effects resulting from any major 
  7.20  governmental action, the action shall be preceded by a detailed 
  7.21  environmental impact statement prepared by the responsible 
  7.22  governmental unit.  The environmental impact statement shall be 
  7.23  an analytical rather than an encyclopedic document which 
  7.24  describes the proposed action in detail, analyzes its 
  7.25  significant environmental impacts, discusses appropriate 
  7.26  alternatives to the proposed action and their impacts, and 
  7.27  explores methods by which adverse environmental impacts of an 
  7.28  action could be mitigated.  The environmental impact statement 
  7.29  shall also analyze those economic, employment and sociological 
  7.30  effects that cannot be avoided should the action be 
  7.31  implemented.  To ensure its use in the decision-making process, 
  7.32  the environmental impact statement shall be prepared as early as 
  7.33  practical in the formulation of an action.  No mandatory 
  7.34  environmental impact statement may be required for an ethanol 
  7.35  plant, as defined in section 41A.09, subdivision 2a, paragraph 
  7.36  (b), that produces less than 125,000,000 gallons of ethanol 
  8.1   annually and is located outside of the seven-county metropolitan 
  8.2   area, except that an environmental impact statement is mandatory 
  8.3   for an ethanol plant that is fueled by a coal-fired boiler and 
  8.4   that has a permit application pending before the Pollution 
  8.5   Control Agency on April 1, 2005. 
  8.6      (a) The board shall by rule establish categories of actions 
  8.7   for which environmental impact statements and for which 
  8.8   environmental assessment worksheets shall be prepared as well as 
  8.9   categories of actions for which no environmental review is 
  8.10  required under this section.  
  8.11     (b) The responsible governmental unit shall promptly 
  8.12  publish notice of the completion of an environmental assessment 
  8.13  worksheet in a manner to be determined by the board and shall 
  8.14  provide copies of the environmental assessment worksheet to the 
  8.15  board and its member agencies.  Comments on the need for an 
  8.16  environmental impact statement may be submitted to the 
  8.17  responsible governmental unit during a 30 day period following 
  8.18  publication of the notice that an environmental assessment 
  8.19  worksheet has been completed.  The responsible governmental 
  8.20  unit's decision on the need for an environmental impact 
  8.21  statement shall be based on the environmental assessment 
  8.22  worksheet and the comments received during the comment period, 
  8.23  and shall be made within 15 days after the close of the comment 
  8.24  period.  The board's chair may extend the 15 day period by not 
  8.25  more than 15 additional days upon the request of the responsible 
  8.26  governmental unit.  
  8.27     (c) An environmental assessment worksheet shall also be 
  8.28  prepared for a proposed action whenever material evidence 
  8.29  accompanying a petition by not less than 25 individuals, 
  8.30  submitted before the proposed project has received final 
  8.31  approval by the appropriate governmental units, demonstrates 
  8.32  that, because of the nature or location of a proposed action, 
  8.33  there may be potential for significant environmental effects.  
  8.34  Petitions requesting the preparation of an environmental 
  8.35  assessment worksheet shall be submitted to the board.  The chair 
  8.36  of the board shall determine the appropriate responsible 
  9.1   governmental unit and forward the petition to it.  A decision on 
  9.2   the need for an environmental assessment worksheet shall be made 
  9.3   by the responsible governmental unit within 15 days after the 
  9.4   petition is received by the responsible governmental unit.  The 
  9.5   board's chair may extend the 15 day period by not more than 15 
  9.6   additional days upon request of the responsible governmental 
  9.7   unit.  
  9.8      (d) Except in an environmentally sensitive location where 
  9.9   Minnesota Rules, part 4410.4300, subpart 29, item B, applies, 
  9.10  the proposed action is exempt from environmental review under 
  9.11  this chapter and rules of the board, if: 
  9.12     (1) the proposed action is: 
  9.13     (i) an animal feedlot facility with a capacity of less than 
  9.14  1,000 animal units; or 
  9.15     (ii) an expansion of an existing animal feedlot facility 
  9.16  with a total cumulative capacity of less than 1,000 animal 
  9.17  units; 
  9.18     (2) the application for the animal feedlot facility 
  9.19  includes a written commitment by the proposer to design, 
  9.20  construct, and operate the facility in full compliance with 
  9.21  Pollution Control Agency feedlot rules; and 
  9.22     (3) the county board holds a public meeting for citizen 
  9.23  input at least ten business days prior to the Pollution Control 
  9.24  Agency or county issuing a feedlot permit for the animal feedlot 
  9.25  facility unless another public meeting for citizen input has 
  9.26  been held with regard to the feedlot facility to be permitted.  
  9.27  The exemption in this paragraph is in addition to other 
  9.28  exemptions provided under other law and rules of the board. 
  9.29     (e) The board may, prior to final approval of a proposed 
  9.30  project, require preparation of an environmental assessment 
  9.31  worksheet by a responsible governmental unit selected by the 
  9.32  board for any action where environmental review under this 
  9.33  section has not been specifically provided for by rule or 
  9.34  otherwise initiated.  
  9.35     (f) An early and open process shall be utilized to limit 
  9.36  the scope of the environmental impact statement to a discussion 
 10.1   of those impacts, which, because of the nature or location of 
 10.2   the project, have the potential for significant environmental 
 10.3   effects.  The same process shall be utilized to determine the 
 10.4   form, content and level of detail of the statement as well as 
 10.5   the alternatives which are appropriate for consideration in the 
 10.6   statement.  In addition, the permits which will be required for 
 10.7   the proposed action shall be identified during the scoping 
 10.8   process.  Further, the process shall identify those permits for 
 10.9   which information will be developed concurrently with the 
 10.10  environmental impact statement.  The board shall provide in its 
 10.11  rules for the expeditious completion of the scoping process.  
 10.12  The determinations reached in the process shall be incorporated 
 10.13  into the order requiring the preparation of an environmental 
 10.14  impact statement.  
 10.15     (g) Whenever practical, information needed by a 
 10.16  governmental unit for making final decisions on permits or other 
 10.17  actions required for a proposed project shall be developed in 
 10.18  conjunction with the preparation of an environmental impact 
 10.19  statement.  
 10.20     (h) An environmental impact statement shall be prepared and 
 10.21  its adequacy determined within 280 days after notice of its 
 10.22  preparation unless the time is extended by consent of the 
 10.23  parties or by the governor for good cause.  The responsible 
 10.24  governmental unit shall determine the adequacy of an 
 10.25  environmental impact statement, unless within 60 days after 
 10.26  notice is published that an environmental impact statement will 
 10.27  be prepared, the board chooses to determine the adequacy of an 
 10.28  environmental impact statement.  If an environmental impact 
 10.29  statement is found to be inadequate, the responsible 
 10.30  governmental unit shall have 60 days to prepare an adequate 
 10.31  environmental impact statement.  
 10.32     Sec. 5.  Minnesota Statutes 2004, section 239.791, 
 10.33  subdivision 1, is amended to read: 
 10.34     Subdivision 1.  [MINIMUM ETHANOL CONTENT REQUIRED.] (a) 
 10.35  Except as provided in subdivisions 10 to 14, a person 
 10.36  responsible for the product shall ensure that all gasoline sold 
 11.1   or offered for sale in Minnesota must contain at least 10.0 
 11.2   percent denatured ethanol by volume. 
 11.3      (b) For purposes of enforcing the minimum ethanol 
 11.4   requirement of paragraph (a), a gasoline/ethanol blend will be 
 11.5   construed to be in compliance if the ethanol content, exclusive 
 11.6   of denaturants and permitted contaminants, comprises not less 
 11.7   than 9.2 percent by volume and not more than 10.0 percent by 
 11.8   volume of the blend as determined by an appropriate United 
 11.9   States Environmental Protection Agency or American Society of 
 11.10  Testing Materials standard method of analysis of alcohol/ether 
 11.11  content in motor fuels. 
 11.12     (c) This subdivision expires on the effective date of 
 11.13  section 6. 
 11.14     Sec. 6.  Minnesota Statutes 2004, section 239.791, is 
 11.15  amended by adding a subdivision to read: 
 11.16     Subd. 1a.  [MINIMUM ETHANOL CONTENT REQUIRED.] (a) Except 
 11.17  as provided in subdivisions 10 to 14, a person responsible for 
 11.18  the product shall ensure that all gasoline sold or offered for 
 11.19  sale in Minnesota must contain at least 20 percent denatured 
 11.20  ethanol by volume. 
 11.21     (b) For purposes of enforcing the minimum ethanol 
 11.22  requirement of paragraph (a), a gasoline/ethanol blend will be 
 11.23  construed to be in compliance if the ethanol content, exclusive 
 11.24  of denaturants and permitted contaminants, comprises not less 
 11.25  than 18.4 percent by volume and not more than 20 percent by 
 11.26  volume of the blend as determined by an appropriate United 
 11.27  States Environmental Protection Agency or American Society of 
 11.28  Testing Materials standard method of analysis of alcohol content 
 11.29  in motor fuels. 
 11.30     (c) No motor fuel shall be deemed to be a defective product 
 11.31  by virtue of the fact that the motor fuel is formulated or 
 11.32  blended pursuant to the requirements of paragraph (a) under any 
 11.33  theory of liability except for negligence.  This paragraph does 
 11.34  not preclude an action for negligent acts.  This paragraph does 
 11.35  not affect a person whose liability arises under chapter 115, 
 11.36  water pollution control; 115A, waste management; 115B, 
 12.1   environmental response and liability; 115C, leaking underground 
 12.2   storage tanks; or 299J, pipeline safety; under public nuisance 
 12.3   law for damage to the environment or the public health; under 
 12.4   any other environmental or public health law; or under any 
 12.5   environmental or public health ordinance or program of a 
 12.6   municipality as defined in section 466.01. 
 12.7      (d) This subdivision is effective ten years following 
 12.8   express action on the application by the United States 
 12.9   Environmental Protection Agency required by this subdivision, or 
 12.10  60 days after the governor publishes notice in the State 
 12.11  Register that at least 60 percent of new model motor vehicles 
 12.12  offered for sale in Minnesota are warrantied for fuel with 20 
 12.13  percent ethanol by volume, whichever occurs first. 
 12.14     (e) Except as provided in paragraph (f), this subdivision 
 12.15  expires on December 31, 2010, if by that date the commissioner 
 12.16  of agriculture certifies and publishes the certification in the 
 12.17  State Register that at least 20 percent of the volume of 
 12.18  gasoline sold in the state is denatured ethanol.  
 12.19     (f) This subdivision expires on December 31, 2008, if by 
 12.20  that date the United States Environmental Protection Agency has 
 12.21  not acted on an application submitted under United States Code, 
 12.22  title 42, section 7545(f)(4), by issuing an express 
 12.23  determination that E20 gasoline: 
 12.24     (1) will not cause or contribute to the failure of any 
 12.25  emission control device or system on vehicles, engines, fuel 
 12.26  tanks, or off-road equipment to achieve compliance with the 
 12.27  standards to which those vehicles, components, or equipment were 
 12.28  certified under federal law over the useful life of the 
 12.29  vehicles, components, or equipment; 
 12.30     (2) will not cause vehicle emissions and toxic emission to 
 12.31  increase; 
 12.32     (3) will not cause or contribute to a degradation of 
 12.33  vehicle, engine, fuel tank, or off-road equipment performance; 
 12.34     (4) is compatible with the materials used in in-use 
 12.35  vehicles, engines, fuel tanks, or off-road equipment and with 
 12.36  materials reasonably anticipated to be used in vehicles, 
 13.1   engines, fuel tanks, or off-road equipment sold in the future; 
 13.2   and 
 13.3      (5) will not require vehicle or off-road engine or 
 13.4   equipment manufacturers to produce or distribute for Minnesota 
 13.5   special products with unique features or special fuel 
 13.6   calibrations that differ from products sold in other states. 
 13.7      For purposes of this subdivision, the United States 
 13.8   Environmental Protection Agency's failure to act on an 
 13.9   application shall not be deemed a waiver under section 211(f)(4) 
 13.10  of the Clean Air Act, United States Code, title 42, section 
 13.11  7545, subsection (f), paragraph (4). 
 13.12     (g) The minimum percentage of denatured ethanol that must 
 13.13  be contained in gasoline sold or offered for sale in Minnesota 
 13.14  under paragraph (a) is ten percent effective 90 days after the 
 13.15  effective date of any federal law relating to (1) the federal 
 13.16  excise tax rate on gasoline-ethanol blends, or (2) the deposit 
 13.17  of revenues from the federal excise tax on gasoline-ethanol 
 13.18  blends, that in the determination of the commissioner of 
 13.19  transportation will result in a loss of federal transportation 
 13.20  funds to Minnesota that is directly attributable to requiring a 
 13.21  minimum of 20 percent denatured ethanol in gasoline sold or 
 13.22  offered for sale in Minnesota. 
 13.23     (h) Not later than December 31, 2005, the governor shall 
 13.24  petition the United States Consumer Product Safety Commission to 
 13.25  solicit information from national experts and stakeholders and 
 13.26  issue an advisory opinion under Code of Federal Regulations, 
 13.27  title 16, section 1000.7, as to whether E20 gasoline, when used 
 13.28  in existing motorcycles, outboard engines, snowmobiles, lawn and 
 13.29  garden products, and other consumer equipment powered by small 
 13.30  spark ignited engines, is likely to create a "substantial 
 13.31  product hazard" or an "unreasonable risk of injury" such as fuel 
 13.32  leaks, increased engine temperature, the gumming and sticking of 
 13.33  throttles, governors or ignition shut-off switches, or the 
 13.34  unintended engagement of cutting blades.  This subdivision 
 13.35  expires on December 31, 2010, unless by that date, the United 
 13.36  States Consumer Product Safety Commission has issued an advisory 
 14.1   opinion that the use of E20 fuels will not increase the risk of 
 14.2   hazards to consumers operating existing off-road consumer 
 14.3   products. 
 14.4      Sec. 7.  [239.7911] [PETROLEUM REPLACEMENT PROMOTION.] 
 14.5      Subdivision 1.  [PETROLEUM REPLACEMENT GOAL.] The petroleum 
 14.6   replacement goal of the state of Minnesota is that at least 20 
 14.7   percent of the liquid fuel sold in the state is derived from 
 14.8   renewable sources by December 31, 2015, subject to the 
 14.9   provisions of section 239.791, subdivision 1a, paragraph (g). 
 14.10     Subd. 2.  [PROMOTION OF RENEWABLE LIQUID FUELS.] (a) The 
 14.11  commissioner of agriculture, in consultation with the 
 14.12  commissioners of commerce and the Pollution Control Agency, 
 14.13  shall identify and implement activities necessary for the 
 14.14  widespread use of renewable liquid fuels in the state.  
 14.15  Beginning November 1, 2005, and continuing through 2015, the 
 14.16  commissioners, or their designees, shall work with 
 14.17  representatives from the renewable fuels industry, petroleum 
 14.18  retailers, refiners, automakers, small engine manufacturers, and 
 14.19  other interested groups, to develop annual recommendations for 
 14.20  administrative and legislative action. 
 14.21     (b) The activities of the commissioners under this 
 14.22  subdivision shall include, but not be limited to: 
 14.23     (1) developing recommendations for incentives for retailers 
 14.24  to install equipment necessary for dispensing renewable liquid 
 14.25  fuels to the public; 
 14.26     (2) obtaining federal approval for the use of E20 as 
 14.27  gasoline; 
 14.28     (3) developing recommendations for ensuring that motor 
 14.29  vehicles and small engine equipment have access to an adequate 
 14.30  supply of fuel; 
 14.31     (4) working with the owners and operators of large 
 14.32  corporate automotive fleets in the state to increase their use 
 14.33  of renewable fuels; and 
 14.34     (5) working to maintain an affordable retail price for 
 14.35  liquid fuels. 
 14.36     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 15.1   following final enactment. 
 15.2      Sec. 8.  [REPORT ON E20 FUEL.] 
 15.3      The commissioner of agriculture, in consultation with the 
 15.4   commissioners of employment and economic development and the 
 15.5   Pollution Control Agency, shall review the information and data 
 15.6   collected in the evaluation of any federal waiver request for 
 15.7   the use of E20 fuel in Minnesota.  The commissioner shall use 
 15.8   existing budgetary and staff resources in conducting the 
 15.9   review.  The review must include: 
 15.10     (1) issues involving the use of E20 fuel if such fuel is 
 15.11  mandated in Minnesota; 
 15.12     (2) effects of E20 on development of Minnesota's ethanol 
 15.13  industry; and 
 15.14     (3) effects of E20 on Minnesota consumers. 
 15.15     The commissioner shall present an initial report to the 
 15.16  legislative committees having jurisdiction over agriculture and 
 15.17  environment policy and finance on the findings of the review to 
 15.18  the legislature by January 15, 2009, and present an updated 
 15.19  report to those committees on January 15, 2011. 
 15.20     Sec. 9.  [STATE VEHICLE FLEET FUEL REPORTS.] 
 15.21     Subdivision 1.  [REPORTS TO DEPARTMENT OF 
 15.22  ADMINISTRATION.] Each state agency, as defined in Minnesota 
 15.23  Statutes, section 16D.02, subdivision 7, must report annually to 
 15.24  the Department of Administration, in a manner and at a time 
 15.25  prescribed by the commissioner of administration, for the 12 
 15.26  months preceding the date of the report: 
 15.27     (1) the number of motor vehicles purchased or leased by the 
 15.28  agency and the number that are capable of being propelled by 
 15.29  cleaner fuels as defined in Minnesota Statutes, section 16C.135, 
 15.30  subdivision 1; and 
 15.31     (2) total volume of fuel purchased for vehicles owned or 
 15.32  leased by the agency and the total volume of each fuel that is a 
 15.33  cleaner fuel. 
 15.34     Subd. 2.  [REPORT TO LEGISLATURE.] The commissioner of 
 15.35  administration shall report on January 15, 2007, and each 
 15.36  January 15 thereafter, on total purchases and leases of motor 
 16.1   vehicles by all state agencies and the number of such vehicles 
 16.2   that are capable of being propelled by cleaner fuels, and total 
 16.3   volume of fuel purchased by all state agencies and the total 
 16.4   volume of cleaner fuels.  The report must be made to the chairs 
 16.5   of legislative committees having jurisdiction over government 
 16.6   operations, state government finance, environmental policy and 
 16.7   finance, natural resources policy and finance, and 
 16.8   transportation policy and finance.