1.1                          A bill for an act 
  1.2             relating to agriculture; providing grants and 
  1.3             incentives to motor fuel outlets that install pumps 
  1.4             and equipment to dispense cleaner fuel; providing 
  1.5             five-year tax exemption for E85 fuel; appropriating 
  1.6             money; amending Minnesota Statutes 2000, sections 
  1.7             296A.07, subdivision 3; 297A.68, by adding a 
  1.8             subdivision; proposing coding for new law in Minnesota 
  1.9             Statutes, chapter 41A. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  [41A.10] [CLEAN FUEL DEVELOPMENT GRANT 
  1.12  PROGRAM.] 
  1.13     The commissioner of agriculture shall establish a program 
  1.14  to encourage motor fuel outlets to install tanks, pumps, and 
  1.15  other necessary equipment to dispense clean fuel.  For purposes 
  1.16  of this section, "clean fuel" includes only CNG, E85, LNG, and 
  1.17  propane, as those terms are defined in section 296A.01; B20, 
  1.18  consisting of 20 percent biodiesel; and, E-Diesel/Oxy-Diesel.  
  1.19  The program must provide for use of funds appropriated for the 
  1.20  purpose as 50-percent-matching grants for motor fuel service 
  1.21  station outlets, not to exceed (1) $25,000 per site for an 
  1.22  outlet that installs new equipment for dispensing clean fuel, 
  1.23  including costs of any new sign materials relating to the clean 
  1.24  fuel, and (2) $2,500 per site for an outlet that converts 
  1.25  existing petroleum-dispensing equipment to equipment for 
  1.26  dispensing clean fuel.  The state's share may be no more than 
  1.27  half the cost of installing the equipment and must be matched by 
  2.1   funds from private industry or other organizations or persons 
  2.2   interested in promoting clean fuel. 
  2.3      Sec. 2.  Minnesota Statutes 2000, section 296A.07, 
  2.4   subdivision 3, is amended to read: 
  2.5      Subd. 3.  [RATE OF TAX.] The gasoline excise tax is imposed 
  2.6   at the following rates: 
  2.7      (1) before July 1, 2001, and after June 30, 2006, E85 is 
  2.8   taxed at the rate of 14.2 cents per gallon; 
  2.9      (2) M85 is taxed at the rate of 11.4 cents per gallon; and 
  2.10     (3) all other gasoline is taxed at the rate of 20 cents per 
  2.11  gallon. 
  2.12     Sec. 3.  Minnesota Statutes 2000, section 297A.68, is 
  2.13  amended by adding a subdivision to read:  
  2.14     Subd. 35.  [EQUIPMENT AND MATERIALS FOR DISPENSING CLEAN 
  2.15  FUEL.] Clean fuel dispensing equipment and materials purchased 
  2.16  for dispensing clean fuel into motor vehicles at a motor fuel 
  2.17  outlet, are exempt.  "Clean fuel" has the meaning given it in 
  2.18  section 41A.10.  "Equipment and materials" includes tanks, 
  2.19  pumps, related sign materials, and other necessary equipment or 
  2.20  materials. 
  2.21     Sec. 4.  [APPROPRIATIONS AND TRANSFERS.] 
  2.22     (a) $500,000 for the fiscal year ending June 30, 2002, and 
  2.23  $500,000 for the fiscal year ending June 30, 2003, are 
  2.24  appropriated from the general fund to the commissioner of 
  2.25  agriculture for purposes of section 1, to be available through 
  2.26  June 30, 2003.  In addition to the purposes stated in section 1, 
  2.27  the commissioner may spend a portion of this appropriation to 
  2.28  buy mass media broadcasts, solicit public service announcements, 
  2.29  and use consumer direct marketing to promote the use of clean 
  2.30  fuel and to inform the public of the advantages, benefits, and 
  2.31  requirements of this act.  
  2.32     (b) $220,000 for the fiscal year ending June 30, 2002, and 
  2.33  $500,000 for the fiscal year ending June 30, 2003, are 
  2.34  appropriated from the general fund and transferred to the 
  2.35  highway user tax distribution fund.  These appropriations and 
  2.36  transfers are intended to reimburse the highway user tax 
  3.1   distribution fund for the loss of tax proceeds under section 2 
  3.2   for fiscal years 2002 and 2003.