HB-5754, As Passed House, March 16, 2006

SUBSTITUTE FOR

HOUSE BILL NO. 5754

     A bill to amend 1984 PA 270, entitled

"Michigan strategic fund act,"

(MCL 125.2001 to 125.2094) by adding section 78.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 78. (1) The fund shall create and administer a service

station matching grant program to provide incentives to owners and

operators of service stations to convert existing fuel delivery

systems and to create new fuel delivery systems designed to provide

E85 fuel.

     (2) The service station matching grant program shall provide

for all the following:

     (a) That a grant shall not exceed 50% of the costs to convert

an existing fuel delivery system to provide E85 fuel or biodiesel

blend, not to exceed $2,000.00 per facility.

     (b) That a grant shall not exceed 50% of the new construction

costs to create a fuel delivery system to provide E85 fuel or

biodiesel blend, not to exceed $15,000.00 per facility for E85 fuel

and $5,000.00 per facility for biodiesel blend.

     (c) A contractual provision requiring the grant recipient to

repay a portion of the grant if the grant recipient stops using the

fuel delivery system to provide E85 fuel or biodiesel blend within

3 years of receiving the grant, as determined by the fund. The

portion of the grant to be repaid shall be calculated by

multiplying the amount of the grant by a fraction, the numerator of

which is the number of days that the fuel delivery system was not

used to provide E85 fuel or biodiesel blend during that 3-year

period and the denominator of which is 1,095.

     (3) The fund shall create and administer a bulk plant matching

grant program to provide incentives to owners and operators of bulk

plants to convert existing fuel delivery systems and to create new

fuel delivery systems designed to provide biodiesel blends.

     (4) The bulk plant matching grant program shall provide for

all the following:

     (a) That a grant shall not exceed 50% of the costs to convert

an existing fuel delivery system to provide biodiesel blend, not to

exceed $2,000.00 per facility.

     (b) That a grant shall not exceed 50% of the new construction

costs to create a fuel delivery system to provide biodiesel blend,

not to exceed $15,000.00 per facility.

     (c) A contractual provision requiring the grant recipient to

repay a portion of the grant if the grant recipient stops using the

fuel delivery system to provide biodiesel blend within 3 years of

receiving the grant, as determined by the fund. The portion of the

grant to be repaid shall be calculated by multiplying the amount of

the grant by a fraction, the numerator of which is the number of

days that the fuel delivery system was not used to provide

biodiesel blend during that 3-year period and the denominator of

which is 1,095.

     (5) The fund shall initially fund the service station matching

grant program and the bulk plant matching grant program with a

combined amount not to exceed $500,000.00 in the 2006-2007 fiscal

year.

     (6) As used in this section:

     (a) "Biodiesel" means a fuel composed of mono-alkyl esters of

long chain fatty acids derived from vegetable oils or animal fats,

and, in accordance with standards specified by the American society

for testing and materials, designated B100, and meeting the

requirements of D-6751, as approved by the department of

agriculture.

     (b) "Biodiesel blend" means a fuel comprised of a blend of

biodiesel fuel with petroleum-based diesel fuel, suitable for use

as a fuel in a compression-ignition internal combustion diesel

engine.

     (c) "Bulk plant" means that term as defined in section 2 of

the motor fuel tax act, 2000 PA 403, MCL 207.1002.

     (d) "E85 fuel" means a fuel blend containing between 70% and

85% denatured fuel ethanol and gasoline suitable for use in a

spark-ignition engine and that meets American society for testing

and materials D-5798 specifications.