SecondSB038_H_ENE.001 RegularNOT SessionAMENDED Seventy-secondHOUSE GeneralCOMMITTEE Assembly STATE OF COLORADOREFERENCE ENGROSSEDREPORT This_______________________________ VersionMay Includes28, All2020 AmendmentsChair Adoptedof onCommittee SecondDate ReadingCommittee inon theEnergy House& ofEnvironment Introduction. LLS NO.

20-0339.01After Jenniferconsideration Bermanon x3286the SENATEmerits, BILLthe 20-038Committee SENATErecommends SPONSORSHIPthe Fenberg,following: Winter HOUSE SPONSORSHIP Jaquez Lewis, Senate Committees House Committees Transportation & Energy A BILL FOR AN ACT C ONCERNING THE ESTABLISHMENT OF A STATEWIDE STANDARD FOR THE SALE OF BIODIESEL -BLENDED DIESEL FUEL IN C OLORADO .

BillSB20-038 Summarybe (Note:postponed indefinitely.

This** summary*** applies** to*** this** bill*SB038_H_ENE.001* as introduced and does notreflectanyamendmentsthatmaybesubsequentlyadopted.Ifthisbill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov/.) EnergyLegislationReviewInterimStudyCommittee.Thebill requires that all diesel fuel sold or offered for sale in Colorado between June 1 and September 15 of each year, commencing June 1, 2021, be blendedwithandcontainatleast5%biodieselandthatalldieselfuelsold g orofferedforsalein Colorado between June 1 and September15of each d 0 year,commencingJune1,2023,beblendedwithandcontainatleast10% e 0 T R , A 2 3 Shading denotes HOUSE amendment.

Double underlining denotes SENATE amendment.

E d a Capital letters or bold & italic numbers indicate new material to be added to existing statute.

Dashes through the words indicate deletions from existing statute.

e J A biodiesel.

The air quality control commission, in consultation with the director of the division of oilandpublicsafetyin the department of labor andemployment,shallpromulgaterulesregardingtheblendingstandard, including rules to establish a waiver process and to require labeling of biodiesel-blended fuel to reflect the percentage of biodiesel included in the blended fuel.

Be it enacted by the General Assembly of the State of Colorado:

3 SECTION 1.

In Colorado Revised Statutes, add 8-20-236 as follows:

8-20-236.

Nonattainmentareabiodiesel-blendedfuelstandard -exemption-definitions-rules.(1)(a) ECEPTASPROVIDEDBYRULES PROMULGATED PURSUANT TO SUBSECTION (1)(bOF THIS SECTIO:

(I) OORAFTER JUNE 1,2021,ALLDIESELFUELSOLDOROFFERED FORSALEINANONATTAINMENTAREAFROM JUNE 1THROUGH SEPTEMBER 15 MUST BE BLENDED WITH AND CONTAIN AT LEAST FIVE PERCENT BIODIESEL(B5);AND (II) OORAFTER UNE 1,2023,ALLDIESELFUELSOLDOROFFERED FORSALEINANONATTAINMENTAREAFROM JUNE 1THROUGH SEPTEMBER 15 MUST BE BLENDED WITH AND CONTAIN AT LEAST TEN PERCENT BIODIESEL(B10).

(b) THE DIRECTOR:

(I) SALL PROMULGATE RULES TO :

(A) ESTABLISH A WAIVER PROCESS BY WHICH A DISTRIBUTOR OR RETAILER OF DIESEL FUEL OR A REFINER OR TERMINAL OPERATOR IN C OLORADO MAY SEEK A TEMPORARY WAIVER FROM THE REQUIREMENTS SET FORTH IN SUBSECTION (1)(a)OF THIS SECTION FOR GOOD CAUSE SHOWN , SUCH AS DEMONSTRATING AN EXTREME DISRUPTION OR -2- 038 LIMITATION IN THE SUPPLY OF BIODIESEL OR EXTREME WEATHER CONDITIONS;AND (B) FOR A BILL OF LADING ,REQUIRE THE LABELING OF BIODIESEL-BLENDED FUEL TO REFLECT THE PERCENTAGE OF BIODIESEL INCLUDEDINTHEBLENDEDFUELWHENTHEBLENDISEQUALTOORABOVE FIVE PERCENT BIODIESE(B5);AND (II) MAY PROMULGATE ADDITIONAL RULES TO IMPLEMENT THIS SECTION AS THE DIRECTOR DEEMS NECESSARY ,WHICH RULES MAY INCLUDE:

(A) REQUIREMENTSFORFUELDISPENSERLABELINGFORTHESALE OF BIODIESE-BLENDED FUELS;AND (B) REQUIREMENTS THAT REFINERS AND TERMINAL OPERATORS WITH LOCATIONS IN A NONATTAINMENT AREA OFFER CLEAR DIESE(B0) AND THAT BIODIESEL PRODUCERS WITH POSITIONS AT REFINERIES AND TERMINALSOFFERBIODIESELBLENDSTOCK (B100)FORTHEPURPOSESOF ENSURING SUPPLY SECURITY AND ENHANCING FEDERALLY LICENSED BLENDERS ' ABILITY TO MEET THE REQUIREMENTS SET FORTH IN SUBSECTION (1)(aOF THIS SECTIO.

(c) THE BIODIESEL BLENDING REQUIREMENTS SET FORTH IN SUBSECTION (1)(aOF THIS SECTION DO NOT APPLY TO DIESEL FUEL USED IN LOCOMOTIVES OR OF-ROAD MINING EQUIPMENT .

(2)(a) TEDEPARTMENT ,THEAIRQUALITYCONTROLCOMMISSION CREATEDINSECTION 25-7-104,ANDTHE C OLORADOOFFICEOFECONOMIC DEVELOPMENTCREATEDINSECTION 24-48.5-10AREEACHENCOURAGED TO RESEARCH POTENTIAL GRANT PROGRAM IMPLEMENTATION AND INCENTIVES TO PROMOTE THE PRODUCTION OF BIODIES-BLENDED FUEL IN THE STAT.

-3- 038 (b) THEREGIONALAIRQUALITYCOUNCIL ,INCOORDINATIONWITH THE DEPARTMENT OF TRANSPORTATION ,IS ENCOURAGED TO CONSIDER UTILIZINGEXISTINGANDFUTUREFEDERALRESOURCESTOREPLACEDIESEL TRUCKS AND COMMERCIAL VEHICLES MANUFACTURED BEFORE 2010 IFIT FINDS THAT SUCH REPLACEMENT WOULD RESULT IN A SIGNIFICANT REDUCTION IN EMISSIONSOFVOLATILE ORGANIC COMPOUNDS ,NITROGEN OXIDE,AND OTHER POLLUTANTS IN THE NONATTAINMENT AREA .

(c) HEDEPARTMENT ,INCONSULTATIONWITHTHEREGIONALAIR QUALITY COUNCIL,SHALL ANALYZE AND ASSESS THE AVAILABLE SUPPLY OF BIODIESEL ICOLORADO BEFORE UNE 1, 2023.

(3) AS USED IN THIS SECTI,UNLESS THE CONTEXT OTHERWISE REQUIRES:

(a) (I) "BODIESEL"MEANS FUEL COMPOSED OF MONO -ALKYL ESTERS OF LONG-CHAIN FATTY ACIDS DERIVED FROM PLANT OR ANIMAL MATTER THAT MEETS THE MOST CURRENT SPECIFICATIONS FOR ASTM D6751, WHICH IS THE"STANDARD SPECIFICATION FOB IODIESELFUEL B LEND STOCK (B100)FOR M IDDLE DISTILLATEFUELS ", ASTM D975, WHICH IS THE "STANDARD SPECIFICATION FOR DIESEL FUEL OIL, B IODIESELB LEND (B0-B5)",AND ASTM D7467, WHICH IS THE "STANDARD SPECIFICATIONFORDIESELFUEL OIL,BIODIESELBLEND (B6 TO B20)".

(II) BODIESEL PRODUCED FROM PALM OIL IS NOT BIODIESEL FOR PURPOSES OF THIS SECTION UNLESS THE PALM OIL IS CONTAINED WITHIN WASTE OIL AND GREASE COLLECTED WITHIN THEUNITED STATES.

(III) RENEWABLE DIESEL IS BIODIESEL FOR PURPOSES OF THIS SECTION.

(b) "DIRECTOR"MEANSTHEDIRECTOROFTHEDIVISIONOFOILAND -4- 038 PUBLIC SAFETY CREATED IN SECTIO8-20-101.

(c) "N ONATTAINMENT AREA " MEANS AN AREA OF THE STATE DESIGNATED BY THE U NITED STATES ENVIRONMENTAL PROTECTION AGENCY AS NOT MEETING THE NATIONAL AMBIENT AIR QUALITY STANDARDS .

(d) "RENEWABLE DIESEL "HAS THE MEANING SET FORTH IN 26 U.S.C.SEC.

40A (f).

SECTION 2.

In Colorado Revised Statutes, 8-20.5-103, amend (3) introductory portion and (3)(g);

and add (3)(h) as follows:

8-20.5-103.

Petroleumstorage tank fund - petroleumcleanup and redevelopment fund - creation - rules - repeal.

(3) The moneys MONEY in the petroleum storage tank fund areIS continuously appropriated to the division of oil and public safety;

except that moneys MONEY for the purposes specified in paragraphs (b), (f), and (g) SUBSECTIONS (3)(b),(3)(AND (3)(g)ofthissubsection(SECTION are subject to annual appropriation by the general assembly.

The fund shall be used for:

(g) Administrative costs necessaryfor the implementation of this articleanARTICLE20.5,section8-20-206.ANDSECTION 8-20-236;AND (h) FUEL QUALITY TESTIN.