SF4263

Purpose

This bill would create a new program to financially encourage gas stations in Minnesota to sell ethanol-blended fuels. Starting January 1, 2028, the commissioner of agriculture would run a biofuel sales volume incentive program that pays stations for selling eligible biofuel blends during the previous year.

Main Provisions

• Establishment and administration

  • The commissioner of agriculture must establish and administer the biofuel sales volume incentive program.
  • The program is designed to reward retail gasoline stations for sales of eligible biofuel blends.

• Eligible biofuel blend

  • An eligible biofuel blend is a blend of gasoline and ethanol with 11% to 15% denatured ethanol by volume.

• Incentive payments

  • Payments are five cents per gallon of eligible biofuel blend sold at an eligible retail gasoline station.
  • Funds paid per station are capped at $50,000 per year.

• Eligibility for stations

  • Station must be located in Minnesota.
  • Station must not be a fleet operator.
  • Station must be selling an eligible biofuel blend at the time of application.
  • Station must not have sold an eligible biofuel blend before January 1, 2028.
  • Station must submit required monthly reports.
  • Station must not have received money under the AGRI Biofuels Infrastructure Grant Program.

• Application requirements

  • Stations must apply using the form prescribed by the commissioner.
  • Applications must include the total volume of eligible biofuel blend sold in the calendar year, two copies of fuel sales records, and any other information required by the commissioner.

• Verification

  • Reported sales volumes must be verified against fuel sales reports submitted to the Department of Commerce.

• Payments

  • Payments are made on a first-come, first-served basis, subject to the available funding.

• Rulemaking

  • The commissioner may adopt rules to implement the program.

• Funding and appropriation

  • A one-time appropriation of $5,000,000 from the general fund in fiscal year 2027 to administer the program.
  • The appropriation is available until June 30, 2032.

• Effective date

  • The program and related provisions apply beginning January 1, 2028.

Signficant Changes to Existing Law

• Creates a new program: Adds a new section (41A.115) to Minnesota statutes to establish the biofuel sales volume incentive program.
• New funding mechanism: Provides a one-time $5 million general fund appropriation in FY 2027 to support the program, available through 2032.
• Eligibility constraints: Sets specific eligibility criteria for stations (not a fleet operator, no prior sale before 2028, etc.) that narrows which stations can participate.
• Verification links to other agencies: Requires cross-checking with the Department of Commerce fuel sales data (per 239.791, subdivision 8).

Practical Effect

• The state would financially reward Minnesota gas stations that sell higher-ethanol blends (11–15%) by paying a small per-gallon incentive, potentially encouraging more stations to offer and report on these blends.
• Participation is limited to stations meeting several criteria and starting only from 2028 onward, with a capped annual payment per station.

Relevant Terms - biofuel sales volume incentive program - commissioner of agriculture - eligible biofuel blend - ethanol - denatured ethanol - retail gasoline station - five cents per gallon - $50,000 per year cap - Minnesota - fleet operator - monthly reports - AGRI Biofuels Infrastructure Grant Program - Department of Commerce - Minnesota Statutes section 41A.115 - 239.791 subdivision 8 - first-come, first-served - rulemaking - appropriation - general fund - FY 2027 - January 1, 2028 - June 30, 2032