Gov. Jennifer Granholm has added her signature to a handful
of efforts in Michigan to promote renewable fuels. Currently, only four pumps
dispense the fuels in the state.
The legislation is intended to help spur growth in Michigan’s agriculture industry and promote and encourage use of E85, a fuel blend that is
85 percent ethanol, and biodiesel, which contains at least 5 percent diesel
fuel derived from crops.
“Making renewable fuels available at more locations around
the state will promote these cheaper energy sources such as ethanol and
biodiesel,” Sen. Jud Gilbert, R-Algonac, said in a written statement.
One of the new laws will lower the state tax on each gallon
of biodiesel fuel from 15 cents per gallon to 12 cents. The new law, previously
SB1074, also lowers ethanol-blended fuel to 12 cents, down from the 19 cents
figured into a gallon of regular gas.
An annual determination of the difference between the amount
of revenue collected under the new law and the amount that would have been
collected under existing tax provisions is required. In addition, the
Legislature is required to appropriate the amount of the differences to the
Michigan Transportation Fund.
Another bill signed into law, SB1075, requires the Michigan
Department of Management and Budget, by Jan. 1, 2007, to install pumps and
related equipment to supply fuel to the state-owned vehicle fleet with
alternative fuels – such as E85 and biodiesel.
A separate effort signed into law requires distributors and
retail dealers of diesel and alternative fuels to obtain a license for each
Previously SB1079, the new law also amends the Motor Fuels
Quality Act to extend to diesel and specified alternative fuels regulations
concerning the quality, storage, manufacture, delivery, and sale of fuel.
Another new law, previously HB5752, will expand to 10 the
number of the state’s renaissance zones – areas targeted for economic
development – to cover the manufacturing of alternative fuels.
A renaissance zone could only be created with the consent of
the appropriate city, village, or township, or a combination, and the county in
which the facility is located. The zones would be designated by the State Administrative
Board on the recommendation of the Michigan Strategic Fund Board.
One other bill signed into law gives fueling stations grant
money to cover the cost of adding ethanol and biodiesel pumps in the state.
The new law sets up matching grant programs to provide
owners and operators of service stations and bulk plants with up to 50 percent
of the cost for creating fuel delivery systems capable of providing E85 fuel
and biodiesel blends.
Grants to service station owners and operators for E85 or biodiesel
facilities will be capped at $3,000 for the costs of converting an existing
system into an E85 or biodiesel system. Grants to construct new E85 systems
will be capped at $12,000 while new biodiesel systems will be capped at $4,000.
Grants to bulk plants for biodiesel facilities would be
capped at $2,000 for the cost of converting an existing system into a biodiesel
system, and $15,000 for the constructing a new biodiesel system. A “bulk plant” is defined as a motor fuel storage and distribution facility that is not a
terminal and from which motor fuel may be withdrawn by a tank wagon, a
transport truck, or a marine vessel.
The new law, previously HB5754, also requires the MSF to
provide up to $500,000 in fiscal year 2006-2007 for the grant programs.