Minnesota, Arizona sign new biofuel legislation into law

By Erin Voegele | May 10, 2012

Minnesota and Arizona have recently passed new laws related to biofuels. In Minnesota, the 2012 Omnibus Agriculture Policy bill extends exceptions to the state’s biodiesel mandate for three more years, and also extends and expands the state’s E20 mandate for two years. The two new Arizona laws help insure algae cultivation is treated the same as other agricultural operations under state law.

The Minnesota legislation, titled the 2012 Omnibus Agriculture Policy bill, was signed into law by Gov. Mark Dayton the first week of May. Regarding biodiesel, the measure extends existing exemptions for specific industries from the state’s biodiesel fuel mandate and creates a new exemption for Coast Guard ships. Certain ships inspected by the Coast Guard are also exempt, including freight, steam, tank and towing vessels and Great Lakes barges. Some examples of existing exempt industries include locomotives, motors located at a power plant regulated by the Nuclear Regulatory Commission, off-road logging equipment and machinery, and off-road taconite and copper mining equipment and machinery.

The law also extends the existing biodiesel fuel mandate exception for No. 1 diesel sold, or offered for sale, during cold-weather months through March 31, 2015. As part of the extension, the state Agriculture Commissioner, Commerce Commissioner and Biodiesel Fuel Task Force are directed to continue to study the need for the exception and make reports that evaluate the need for the exemption and include the Agricultural Commissioner’s recommendations regarding further continuance of the exemption.

In addition to extending the E20 mandate through Aug. 30, 2015, the law also opens up the possibility of increasing the use of next-generation biofuels. The NextGen Energy Board is directed to generate a report by February 2013 that includes an analysis of next-generation biofuels that could be blended with gasoline or other energy sources. Specifically, the report is to analyze research on next-generation biofuels blends and information on federal approvals and approvals needed, and the status of federal approval for next-generation biofuels. The report will be used to make policy recommendations for updating the state’s biofuel mandates to reflect current industry practices.

Alternatively, the two Arizona laws widen tax definitions of agricultural real property in the state to include lands devoted to algaculture. This means algae cultivation operations can enjoy the same lower property tax rates that apply to farming businesses. The second bill adds the growth and harvest of algae to the definition of agricultural state trust lands, thereby allowing the Arizona State Land Department to issue agricultural leases for algaculture operations.

Algae Biosciences Inc. has spoken out in support of the measures, noting that the new laws could potentially lead to additional investment capital, well-paying jobs, a larger tax base and sustainable use of agricultural lands within the state.

“It’s great to see such timely legislation that makes so much sense, and fits so well for this state—because of our nonarable land, flat land, the abundance of waste water and brine water, and 360 days of sunshine a year,” said Mark Edwards, AlgaeBio’s vice president of corporate development and marketing. “Arizona has an opportunity to lead, globally, because a lot of other jurisdictions, other countries, will follow this example.”


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