FILE — Gas station

(The Center Square) – Beginning next year, Iowa gas stations that install, replace or convert gas storage tanks must advertise for and sell E15 gasoline, and, additionally, gas station infrastructure must accommodate B-20 biodiesel under a bill Gov. Kim Reynolds announced Tuesday she’ll sign.

The House and the Senate passed HF 2128 with 81-13 and 42-3 votes, respectively.

Gas stations are exempt if they open before January 2023, sold no more than 300,000 gallons of gas on average, annually, from 2020 through 2020, and if they do not replace their storage tanks, according to the latest fiscal note on the bill. Motor fuel dispensers that exclusively dispense aviation fuel, diesel or kerosene are exempt.

Waivers are available for gas stations whose motor fuel storage tanks are older than 1996 (Class 1 Waiver) or if the costs to install the infrastructure to be able to sell E-15 are higher than what the dealer would pay to receive standard financial incentives through the Renewable Fuel Infrastructure Program.

Gas stations subject to the mandate are eligible for three tiers of grants:

1. Owners of no more than 10 motor fuel sites in Iowa that have never sold E15 and sold no more than a mean 140,000 gallons of gas annually (from 2020 through 2022) qualify for 90.0% of costs or $63,900.

2. Owners of no more than 10 motor fuel sites in Iowa that have never sold E15 and sold between 140,000 and 450,000 gallons of gas annually (from 2020 through 2022) qualify for the lesser of 75.0% of qualified costs or $53,250.

3. All other gas station owners can apply for 75% of qualified costs or $50,000.

The governor of Iowa would be able to temporarily suspend the requirement of access to E-15 through an executive order if there is an inadequate supply, consumers are at risk of economic hardship due to market prices of E15 or existing motor fuel storage and dispensing infrastructure can’t store and dispense E15.

The Department of Agriculture and Land Stewardship can refuse to issue or renew a commercial weighing and measuring device for a gas station if the dealer doesn’t comply with the law, a Feb. 7 fiscal note said. Perjuring on applying for a waiver is a class D felony, punishable by up to 5 years in confinement and a fine of at least $1,025, up to $10,245.

Mark Maxwell lobbied against the bill on behalf of A.B.A.T.E. of Iowa and Iowa Motorcycle Dealers Association. He told The Center Square in a phone interview Tuesday that the groups oppose legislative mandates since they interfere with a free market system.

“The fuel is out there,” he said. “If people want to use it, they can use it. We believe that this [bill] takes away people’s choices.”

About 17% of Iowa gas stations that reported sales to the state last year sold E15 in 2021, according to an Iowa Department of Revenue report, Des Moines Register reported. E15 and higher ethanol blends sales were about 6.1% of sales that year.

"The Iowa legislature’s decision to prop up E15 provides a look at the future of the ethanol industry – an industry dependent on subsidies and mandates,” Food and Water Watch Senior Iowa Organizer Emma Schmit told The Center Square in an emailed statement Tuesday. “Ethanol was originally introduced as a bridge fuel, a bridge that will inevitably end. This legislation only extends the bridge.”

Schmit said legislators should be turning their attention to supporting their constituents who are pushing for a ban on eminent domain for carbon pipelines.

Not all vehicles take E15 gasoline. Many automotive manufacturers use yellow gas caps for flexible fuel vehicles or specify fuel types that can be used in vehicles in the manual or the manufacturer’s website, according to Fueleconomy.gov.