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Senate Study Bill 1148

SENATE FILE BY (PROPOSED COMMITTEE ON AGRICULTURE BILL BY CHAIRPERSON SENG) A BILL FOR 1 An Act relating to the promotion of biodiesel fuel, by 2 providing for tax credits to retail dealers and payments to 3 biodiesel producers, making an appropriation, providing a 4 penalty and including effective date provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: TLSB 1834XC (5) 84 da/rj PAG LIN 1 1 DIVISION I 1 2 BIODIESEL BLENDED FUEL TAX CREDIT 1 3 Section 1. Section 422.11P, Code 2011, is amended by adding 1 4 the following new subsection: 1 5 NEW SUBSECTION. 1A. For purposes of this section, biodiesel 1 6 fuel shall be classified in the same manner as provided in 1 7 section 214A.2. 1 8 Sec. 2. Section 422.11P, subsection 2, paragraph a, 1 9 subparagraph (2), Code 2011, is amended by striking the 1 10 subparagraph. 1 11 Sec. 3. Section 422.11P, subsection 2, paragraph b, Code 1 12 2011, is amended to read as follows: 1 13 b. The tax credit shall apply to biodiesel blended fuel 1 14 formulated with a minimum percentage of two percent by volume 1 15 of biodiesel classified as B=5 or higher, if the formulation 1 16 biodiesel blended fuel meets the standards provided in 1 17 requirements for that classification as provided in section 1 18 214A.2. 1 19 Sec. 4. Section 422.11P, subsection 3, Code 2011, is amended 1 20 to read as follows: 1 21 3.a. The tax credit shall be calculated separately for 1 22 each retail motor fuel site operated by the retail dealer. 1 23 b. The amount of the tax credit is three cents a designated 1 24 amount multiplied by the total number of gallons of biodiesel 1 25 blended fuel sold and dispensed by the retail dealer through 1 26 all motor fuel pumps located at a retail motor fuel site 1 27 operated by the retail dealer during the retail dealer's tax 1 28 year. The designated amount is as follows: 1 29 a. For biodiesel blended fuel classified as B=5 or higher 1 30 but not higher than B=9, two cents. 1 31 b. For biodiesel blended fuel classified as B=10 or higher 1 32 but not higher than B=99, four cents. 1 33 Sec. 5. Section 422.11P, subsection 6, Code 2011, is amended 1 34 to read as follows: 1 35 6. This section is repealed January 1, 2012 2015. 2 1 Sec. 6. Section 422.33, subsection 11C, paragraph c, Code 2 2 2011, is amended by striking the paragraph. 2 3 Sec. 7. Section 422.33, subsection 11C, paragraph d, Code 2 4 2011, is amended to read as follows: 2 5 d. This subsection is repealed on January 1, 2012 2015. 2 6 Sec. 8. FUTURE APPLICABILITY DATE. Section 422.11P and 2 7 section 422.33, as amended by this Act, shall apply to tax 2 8 years beginning on or after January 1, 2012. 2 9 Sec. 9. TAX CREDIT AVAILABILITY UNDER PRIOR LAW. A retail 2 10 dealer who could claim a biodiesel blended fuel tax credit 2 11 under section 422.11P or 422.33, subsection 11C, as that 2 12 section or subsection exists on June 30, 2011, may continue 2 13 to claim the tax credit for biodiesel blended fuel sold and 2 14 dispensed by the retail dealer until December 31, 2011, as 2 15 provided in that section or subsection. 2 16 Sec. 10. 2006 Iowa Acts, chapter 1142, section 49, 2 17 subsection 5, is amended to read as follows: 2 18 5. For This subsection applies to a retail dealer who 2 19 may claim a biodiesel blended fuel tax credit under section 2 20 422.11P or 422.33, subsection 11C, as enacted in this Act or 2 21 as subsequently amended, in calendar year 2011 2014 and whose 2 22 tax year ends prior to December 31, 2011, the 2014. The retail 2 23 dealer may continue to claim the tax credit in the retail 2 24 dealer's following tax year. In that case, the tax credit 2 25 shall be calculated in the same manner as provided in section 2 26 422.11P or 422.33, subsection 11C, as enacted in this Act 2 27 that section or subsection exists on December 31, 2014, for 2 28 the remaining period beginning on the first day of the retail 2 29 dealer's new tax year until December 31, 2011 2014. For that 2 30 remaining period, the tax credit shall be calculated in the 2 31 same manner as a retail dealer whose tax year began on the 2 32 previous January 1 and who is calculating the tax credit on 2 33 December 31, 2011 2014. 2 34 Sec. 11. EFFECTIVE DATE. This division of this Act takes 2 35 effect January 1, 2012. 3 1 DIVISION II 3 2 BIODIESEL PRODUCTION PAYMENT 3 3 Sec. 12. Section 422.7, Code 2011, is amended by adding the 3 4 following new subsection: 3 5 NEW SUBSECTION. 54. Subtract, to the extent included, the 3 6 amount of any biodiesel production payment provided pursuant 3 7 to section 422.132. 3 8 Sec. 13. Section 422.35, Code 2011, is amended by adding the 3 9 following new subsection: 3 10 NEW SUBSECTION. 25. Subtract, to the extent included, the 3 11 amount of any biodiesel production payment provided pursuant 3 12 to section 422.132. 3 13 Sec. 14. NEW SECTION. 422.131 Definitions. 3 14 As used in this division, unless the context otherwise 3 15 requires: 3 16 1. "Biodiesel" and "biodiesel blended fuel" means the same 3 17 as defined in section 214A.1. 3 18 2. "Biodiesel producer" means a person engaged in the 3 19 manufacturing of biodiesel who has registered with the United 3 20 States environmental protection agency as a manufacturer 3 21 according to the requirements in 40 C.F.R. { 79.4. 3 22 Sec. 15. NEW SECTION. 422.132 Biodiesel production payment. 3 23 1. A biodiesel producer may receive a biodiesel production 3 24 payment by doing all of the following: 3 25 a. Producing biodiesel for use in biodiesel blended fuel. 3 26 b. Complying with the requirements of this section and rules 3 27 adopted by the department pursuant to this section. 3 28 2. The amount of the biodiesel production payment shall be 3 29 calculated by multiplying a designated rate by the total number 3 30 of gallons of biodiesel produced by the biodiesel producer 3 31 in this state during each quarter of a calendar year. The 3 32 designated rate shall be as follows: 3 33 a. For the calendar year 2012, three cents. 3 34 b. For the calendar year 2013, three cents. 3 35 c. For the calendar year 2014, two cents. 4 1 3. To receive a biodiesel production payment, the biodiesel 4 2 producer must file a claim for each quarterly period of a 4 3 calendar year as required by rules adopted by the department 4 4 and on forms prescribed by the department. The claim must be 4 5 filed on or before the last day of the month following the 4 6 close of the quarterly period. 4 7 4. There is appropriated from moneys in the general fund of 4 8 the state, which are not otherwise obligated or encumbered, an 4 9 amount sufficient to provide biodiesel production payments to 4 10 biodiesel producers as provided in this section. 4 11 Sec. 16. NEW SECTION. 422.133 Penalty. 4 12 A person fraudulently claiming a payment in excess of the 4 13 entitled amount of a biodiesel production payment is guilty of 4 14 a serious misdemeanor. 4 15 Sec. 17. NEW SECTION. 422.134 Repeal. 4 16 This division is repealed on January 1, 2015. 4 17 Sec. 18. DIRECTIONS TO CODE EDITOR. The Code editor shall 4 18 codify sections 422.131 and 422.132 as a new division in 4 19 chapter 422. 4 20 Sec. 19. EFFECTIVE DATE. This division of this Act is 4 21 effective on January 1, 2012. 4 22 EXPLANATION 4 23 GENERAL. This bill provides for the promotion of biodiesel 4 24 used in the manufacture of motor fuel which is a blend of 4 25 diesel fuel and biodiesel (biodiesel blended fuel). Biodiesel 4 26 fuel is designated B=xx where "xx" is the volume percent of 4 27 biodiesel (Code section 214A.2). For example, all biodiesel 4 28 blended fuel must be classified as B=1 or higher, meaning at 4 29 least 1 percent of biodiesel blended fuel by volume must be 4 30 biodiesel. The provisions of the bill are administered by the 4 31 department of revenue. 4 32 The bill includes two divisions. First, the bill amends 4 33 current provisions which establish a biodiesel blended fuel 4 34 tax credit for retail dealers, and second, the bill provides 4 35 payments to biodiesel producers. 5 1 DIVISION I ==== BIODIESEL BLENDED FUEL TAX CREDIT. Under 5 2 current law a retail dealer who sells and dispenses diesel fuel 5 3 from a motor fuel pump is eligible for a biodiesel blended fuel 5 4 tax credit. The tax credit is multiplied by taking a constant 5 5 rate of 3 cents multiplied by the number of gallons of B=2 or 5 6 higher sold and dispensed. The tax credit is due to expire on 5 7 January 1, 2012. 5 8 The bill eliminates an eligibility requirement specifying 5 9 that the retail dealer of diesel fuel must sell and dispense 5 10 50 percent or more biodiesel blended fuel during the tax year. 5 11 It increases the minimum biodiesel classification from B=2 to 5 12 B=5. The amount of the tax credit is changed depending upon 5 13 the classification. The designated rate for B=5 to B=9 is 2 5 14 cents and the designated rate for B=10 to B=99 is 4 cents. The 5 15 tax credit's expiration date is extended to January 1, 2015. 5 16 DIVISION II ==== BIODIESEL PRODUCTION PAYMENT. The bill 5 17 creates a program to pay biodiesel producers for production. 5 18 The amount of the payment is calculated by multiplying a 5 19 designated rate by the total number of gallons of biodiesel 5 20 produced during each quarter of a calendar year, beginning 5 21 in calendar year 2012 and ending in calendar year 2014. The 5 22 bill appropriates moneys from the general fund of the state to 5 23 finance the payments. The program terminates on January 1, 5 24 2015. A person fraudulently claiming a payment in excess of 5 25 the entitled amount of a biodiesel production payment is guilty 5 26 of a serious misdemeanor. A serious misdemeanor is punishable 5 27 by confinement for no more than one year and a fine of at least 5 28 $315 but not more than $1,875. LSB 1834XC (5) 84 da/rj
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