States address ethanol legislation

By | April 14, 2009
Three U.S. states moved ethanol legislation recently.

South Dakota Gov. Mike Rounds signed into law Senate Bill 21, which contained ethanol tax legislation. The bill is aimed at streamlining the way ethanol and ethanol-blended fuels are taxed within the state. Under prior regulations, standard gasoline, midlevel blends containing between 10 percent and 75 percent ethanol, and E85 containing more than 75 percent ethanol were taxed at the respective rates of 22, 20 and 10 cents per gallon. Under this system of taxation, applicable taxes may have been collected at both the wholesale and retail levels. SB 21 simplifies the taxation procedure for fuel stations selling midlevel blends by ensuring all taxes are paid on the wholesale level. The new law requires that standard gasoline be taxed at the same 22 cents per gallon, while denatured ethanol is now taxed at 8 cents per gallon. The two fuels can then be blended at any
level without incurring additional tax.

Lawmakers in Idaho's House of Representatives passed a bill that would eliminate the current 10 percent (2.5-cent-per-gallon) tax exemption on ethanol- and biodiesel-blended fuels. The legislation was part of Idaho Gov. C. L. "Butch" Otter's measures aimed at boosting funding for roadwork.

In Minnesota, lawmakers are considering two bills aimed at repealing the state's ethanol producer payment program, also known as the ethanol subsidy program, and the state's minimum ethanol content requirement, more commonly known as the state's renewable fuels standard. A third bill pending in the Minnesota legislature would repeal only the ethanol producer payment program.