Iowa-2013-HF597-Introduced

H.F. 597 Section 1. Section 214A.1, Code 2013, is amended by adding 1 the following new subsections: 2 NEW SUBSECTION . 8A. “Distributor” means the same as defined 3 in section 452A.2. 4 NEW SUBSECTION . 23A. “Supplier” means the same as defined 5 in section 452A.2. 6 Sec. 2. Section 214A.20, subsection 1, unnumbered paragraph 7 1, Code 2013, is amended to read as follows: 8 A supplier, distributor, or retail dealer is not liable for 9 damages caused by the use of incompatible motor fuel dispensed 10 at the retail dealer’s retail motor fuel site, if all of the 11 following applies: 12 Sec. 3. Section 452A.2, Code 2013, is amended by adding the 13 following new subsections: 14 NEW SUBSECTION . 9A. “Diesel fuel” or “diesel” means diesel 15 fuel as defined in section 214A.1. 16 NEW SUBSECTION . 28A. “Nonrefiner biofuel manufacturer” 17 means an entity that produces, manufactures, or refines biofuel 18 and does not directly or through a related entity refine, 19 blend, import, or produce gasoline or diesel fuel as a motor 20 fuel. 21 Sec. 4. NEW SECTION . 452A.6A Right of distributors and 22 dealers to blend gasoline or diesel fuel using a biofuel. 23 1. a. A dealer or distributor may blend gasoline or 24 diesel fuel using the appropriate biofuel or sell unblended or 25 blended gasoline or diesel fuel on any premises in this state 26 notwithstanding any contrary agreement pursuant to which a 27 terminal operator, terminal owner, or supplier is a party and 28 the distributor or dealer is the other party. 29 b. Paragraph “a” does not apply to the extent that the use 30 of the premises is restricted by federal, state, or local law. 31 2. A terminal operator, terminal owner, or supplier who in 32 the ordinary course of business sells or transports gasoline 33 or diesel fuel which is unblended or blended with a biofuel 34 shall not refuse to sell or transport any unblended gasoline 35 -1- LSB 2132HV (3) 85 da/nh 1/ 4

H.F. 597 or unblended diesel fuel to a distributor or dealer based on 1 the distributor’s or dealer’s intent to blend the gasoline or 2 diesel fuel with a biofuel. 3 3. A terminal operator, terminal owner, or supplier shall 4 not prevent or inhibit a distributor or dealer from being a 5 blender or from qualifying for any federal or state tax credit 6 offered to blenders. 7 4. This section shall not be construed to do any of the 8 following: 9 a. Prohibit a distributor or dealer from purchasing, 10 selling, or transporting gasoline or diesel fuel that has not 11 been blended with a biofuel. 12 b. Affect the blender’s license requirements under section 13 452A.6. 14 c. Prohibit a dealer or distributor from leaving a terminal 15 with unblended gasoline or unblended diesel fuel. 16 d. Require a nonrefiner biofuel manufacturer to offer or 17 sell unblended gasoline or unblended diesel fuel. 18 5. A terminal operator, terminal owner, or supplier who 19 violates this section is subject to a civil penalty of not 20 more than ten thousand dollars per violation. Each day that a 21 violation continues is deemed a separate offense. 22 Sec. 5. VALIDITY OF AGREEMENTS. 23 1. Section 452A.6A, as enacted in this Act, does not apply 24 to a written agreement executed prior to the effective date 25 of this Act between a dealer or distributor and a terminal 26 operator, terminal owner, or supplier. 27 2. Section 452A.6A, as enacted in this Act, does apply to 28 a written agreement executed on or after the effective date 29 of this Act between a dealer or distributor and a terminal 30 operator, terminal owner, or supplier, or any other kind of 31 agreement made by those parties on or after the effective date 32 of this Act. Any term or condition in such agreement which is 33 contrary to the provisions of section 452A.6A, as enacted in 34 this Act, shall be null and void. 35 -2- LSB 2132HV (3) 85 da/nh 2/ 4

H.F. 597 EXPLANATION 1 GENERAL. This bill provides for the distribution and sale of 2 motor fuel by terminals, suppliers, distributors, and retail 3 dealers. Motor fuel (e.g., gasoline) and special fuel (e.g., 4 diesel fuel) move into this state via a pipeline or marine 5 vessel to a terminal where in turn the fuel is withdrawn by a 6 supplier and then purchased and transported by a distributor 7 and ultimately a dealer who sells the fuel at retail. 8 LIABILITY PROTECTION. In 2011, the general assembly 9 enacted SF 531, which provided that a retail dealer is not 10 liable for damages caused by the use of incompatible motor 11 fuel dispensed at the retail dealer’s motor fuel site under 12 certain conditions. The incompatible motor fuel must comply 13 with the specifications for that type of motor fuel, it must 14 be selected by a person other than the retail dealer, and it 15 must be dispensed from a motor fuel pump that correctly labels 16 the type of fuel dispensed (Code section 214A.20). This bill 17 extends such protection against liability to suppliers and 18 distributors. 19 RESTRICTIONS UPON SALE AND DISTRIBUTION OF BLENDED AND 20 UNBLENDED MOTOR FUEL. Gasoline may be blended with alcohol 21 (ethanol) and diesel fuel may be blended with soybean oil 22 (biodiesel) at a nonterminal location by a person referred to 23 as a blender. Both ethanol and biodiesel are referred to as 24 biofuel (Code sections 214A.1 and 452A.2). The bill provides 25 that a dealer or distributor may blend gasoline or diesel fuel 26 using the appropriate biofuel or sell unblended or blended 27 gasoline or diesel fuel on any premises in this state so long 28 as the premises is not restricted by federal, state, or local 29 law. The bill provides that a terminal operator, terminal 30 owner, or supplier who in the ordinary course of business sells 31 or transports gasoline or diesel fuel which is unblended or 32 blended with a biofuel cannot refuse to sell or transport any 33 unblended gasoline or unblended diesel fuel to a distributor 34 or dealer based on the distributor’s or dealer’s intent to 35 -3- LSB 2132HV (3) 85 da/nh 3/ 4

H.F. 597 blend the gasoline or diesel fuel with a biofuel. A terminal 1 operator, terminal owner, or supplier also cannot prevent a 2 distributor or dealer from being a blender or from qualifying 3 for any federal or state tax credit offered to blenders. 4 The bill provides that its provisions do not prohibit a 5 distributor or dealer from purchasing, selling, or transporting 6 gasoline or diesel fuel that has not been blended with a 7 biofuel; affect the blender’s license requirements, prohibit a 8 dealer or distributor from leaving a terminal with unblended 9 gasoline or unblended diesel fuel; or require a nonrefiner 10 biofuel manufacturer to offer or sell unblended gasoline or 11 unblended diesel fuel. The requirements also do not apply to a 12 written agreement executed prior to the effective date of the 13 bill. 14 A terminal operator, terminal owner, or supplier who 15 violates the bill’s restrictions is subject to a civil penalty 16 of not more than $10,000 per violation, and each day that a 17 violation continues is deemed a separate offense. 18 -4- LSB 2132HV (3) 85 da/nh 4/ 4