SB204C-BIODIESEL FUEL
Summary of the House Committee Version of the Bill

HCS SS#2 SCS SB 204 -- BIODIESEL FUEL

SPONSOR:  Stouffer (Hobbs)

COMMITTEE ACTION:  Voted "do pass" by the Special Committee on
Agri-Business by a vote of 7 to 0.

This substitute changes the laws regarding biodiesel and
biodiesel-blended fuel.  In its main provisions, the substitute:

(1)  Removes the instate origination criteria and allows the
Missouri qualified biodiesel producer incentive grants to be
calculated based on the amount of biodiesel produced from
agricultural products originating in any state provided the
qualified biodiesel production facility is at least 51% Missouri
producer owned.  Currently, the incentive grants are calculated
based on the estimated number of gallons of biodiesel produced
from agricultural products originating in Missouri;

(2)  Requires that all diesel fuel sold at retail in Missouri
after April 1, 2010, be a biodiesel-blended fuel.  If the
acquisition of biodiesel-blended fuel is more expensive than
conventional diesel fuel, the distributor is not required to
acquire biodiesel-blended fuel; and neither this nor the sale of
conventional diesel fuel at retail will be considered a violation
of the fuel standard;

(3)  Exempts diesel fuel used by railroads and nuclear power
generation facilities from the requirements of the fuel standard.
The Director of the Department of Agriculture may exempt
additional fuel uses from the requirements of the fuel standard;
and the Governor may, by executive order, waive any of the
fuel-ethanol or biodiesel requirements of the substitute;

(4)  Requires fuel terminals in Missouri that sell conventional
diesel fuel to sell biodiesel-blended fuel that contains 5%
biodiesel by volume, but it will not be considered a violation
for a terminal to sell biodiesel-blended fuel that contains more
than 5% biodiesel by volume if the sale complies with certain
notification requirements;

(5)  Requires the department to develop standards for cold
temperature operability properties of biodiesel and to enforce
the standards beginning January 1, 2010;

(6)  Specifies that any producer of biodiesel that does not meet
the quality standard as established by the department may be
assessed a civil penalty of up to $10,000 per violation and be
issued a cease and desist order; and

(7)  Requires 20% biodiesel-blended fuel (B-20) to be used by the
Department of Transportation when the cost of acquiring the
biodiesel-blended fuel is equal to or less than the cost of
acquiring conventional diesel fuel.  Currently, B-20 is required
to be used by the department when the cost difference between
B-20 and conventional diesel fuel is not more than 25 cents.

FISCAL NOTE:  No impact on state funds in FY 2008, FY 2009, and
FY 2010.

PROPONENTS:  Supporters say that the biodiesel fuel standard is
good for the environment, consumers, and Missouri's economy.  The
bill addresses fuel quality, engine warranty specifications, and
exempts certain entities from the fuel specification requirement.
The bill allows immediate action to be taken by the Governor in
the event of unforeseen problems with Missouri ethanol-blended
gasoline and biodiesel-blended fuel.

Testifying for the bill were Senator Stouffer; Missouri Soybean
Association; Greg Sharp; Department of Agriculture; Missouri Farm
Bureau; and Missouri Corn Growers Association.

OPPONENTS:  Those who oppose the bill say that they oppose the
mandate in general and that the use of biodiesel-blended fuel
should be market driven.  They were also concerned that fuel
quality may be compromised by non-terminal "splash blending" and
that terminals will be restricted to selling 5% biodiesel-blended
fuel while distributors could sell any percentage
biodiesel-blended fuel.

Testifying against the bill were Bruce Hine, Magellan Midstream
Partners; and American Petroleum Institute.

OTHERS:  Others testifying on the bill say they support a
national fuel standard but oppose a fuel mandate.  Ford Motor
Company will not honor warranties on their diesel motors if the
fuel standard exceeds 5% and suggests strict labeling for higher
biodiesel blends.  The commingling problem (biodiesel-blended
fuel followed by non-blended diesel delivered to the retailer)
could be fixed if the price triggers were removed.

Testifying on the bill was Missouri Petroleum Marketers and
Convenience Store Association.

Copyright (c) Missouri House of Representatives


Missouri House of Representatives
94th General Assembly, 1st Regular Session
Last Updated July 25, 2007 at 11:21 am