Minnesota Incentives and Laws

Last Updated July 2008

Minnesota is the home of the Twin Cities Clean Cities Coalition (http://www.cleanairchoice.org/cities/tc.cfm). Coordinator contact information is listed in the Points of Contact section.

State Incentives

E85 Fueling Infrastructure Grants

Grants administered by the Minnesota E85 Team are available to service stations installing equipment or converting existing equipment for dispensing E85 fuel to flexible fuel vehicles. Cost eligibility and grant amounts vary according to grant sponsorship.

Point of Contact

Lisa Thurstin
Clean Cities Coordinator
Twin Cities Clean Cities Coalition
Phone (651) 223-9568
Fax (651) 281-0242
lisa.thurstin@alamn.org
http://www.cleanairchoice.org/cities/tc.cfm

Ethanol Production Incentive

Through June 30, 2010, an ethanol production incentive of $0.20 per gallon of ethanol produced is available to qualified facilities that began production before June 30, 2000. Annual payments are limited to $3 million to any one producer. (Reference Minnesota Statutes 41A.09)

Point of Contact

Ralph Groschen
Senior Marketing Specialist
Minnesota Department of Agriculture
Phone (651) 201-6223
Fax (651) 201-6114
ralph.groschen@state.mn.us

Idle Reduction Technology Loan Program

The Minnesota Pollution Control Agency's Small Business Environmental Improvement Loan Program provides low-interest loans to qualified small businesses to finance environmental projects such as capital equipment upgrades that meet or exceed environmental regulations, including idle reduction technologies.

Point of Contact

Mike Nelson
Small Business Ombudsman
Minnesota Pollution Control Agency
Phone (651) 297-8615
michael.nelson@pca.state.mn.us
http://www.pca.state.mn.us/programs/sbomb_loan.html

State Laws and Regulations

Biodiesel Blend Mandate

All diesel fuel sold or offered for sale in the state for use in internal combustion engines must contain at least 2% biodiesel fuel by volume. Beginning May 1, 2009, all diesel fuel must contain at least 5% biodiesel; 10% biodiesel by May 1, 2012; and 20% biodiesel by May 1, 2015. The minimum content levels are effective during the months of April, May, June, July, August, September, and October only. However, the commissioners of agriculture and commerce, the Pollution Control Agency, in consultation with the Biodiesel Task Force and other technical experts, may allow the specified biodiesel blend level to be effective year round if determined that an ASTM specification or equivalent federal standard exists for the specified biodiesel blend level that adequately addresses technical issues associated with Minnesota's cold weather and publish a notice in the State Register to that effect. (Reference Senate File 3683, 2008, and Minnesota Statutes 239.77 and 239.75)

Medium-Speed Electric Vehicle Access to Roadway

A medium-speed electric vehicle is defined as an electrically powered four-wheeled motor vehicle capable of achieving a speed of at least 25 miles per hours (mph) but not more than 35 mph on a paved, level surface and, except with respect to maximum speed, otherwise meets or exceeds regulations in Title 49 of the Code of Federal Regulations, section 571.500. A medium-speed electric vehicle may not be operated on a roadway with a speed limit greater than 35 mph, except to make a direct crossing of that roadway. A road authority, including the commissioner of transportation, may prohibit or further restrict the operation of medium-speed electric vehicles on any street or highway under the road authority's jurisdiction. (Reference House File 3800, 2008)

Idle Reduction Weight Exemption

In order to promote the reduction of fuel use and emissions due to engine idling, the maximum gross vehicle weight and axle weight limits for any motor vehicle equipped with idle reduction technology must be increased by the weight of the idle reduction equipment, not to exceed 400 pounds. The vehicle operator must provide documentation that the vehicle is equipped with idle reduction equipment. (Reference House File 3486, 2008, and Minnesota Statutes 169.824)

Regional Biofuels Promotion Plan

Minnesota has joined Indiana, Iowa, Kansas, Michigan, Ohio, South Dakota, and Wisconsin in adopting the Energy Security and Climate Stewardship Platform Plan (Platform) (PDF 2 MB), which establishes shared goals for the Midwest region, including increased biofuels production and use. Specifically, the Platform sets the following goals:

• Produce commercially available cellulosic ethanol and other low-carbon fuels in the region by 2012;
• Increase E85 availability at retail fueling stations in the region to 15% of stations by 2015, 20% by 2020, and 33% of all fueling stations in the region by 2025;
• Reduce the amount of fossil fuel that is used in the production of biofuels by 50% by 2025;
• By 2025, at least 50% of all transportation fuels consumed by the Midwest will be from regionally produced biofuels and other low-carbon transportation fuels.

The Platform also establishes a regional biofuels corridor program. The program directs state transportation, agriculture, and regulatory officials to develop a system of coordinated signage across the region for biofuels and advanced transportation fuels and to collaborate to create regional E85 corridors. The program requires standardized fuel product coding at fueling stations as well as increased education for retailers about converting existing fueling infrastructure to dispense E85. The state transportation, agriculture, and regulatory officials were required to report their corridor implementation plans to the Midwest Governors Association by April 1, 2008.

Biodiesel Definition

Biodiesel is defined as a renewable, biodegradable, mono alkyl ester combustible liquid fuel that is derived from agricultural plant oils or animal fats and meets ASTM specification D6751-07 and is produced by a person or organization certified by the BQ-9000 National Biodiesel Accreditation Program. (Reference Senate File 3683, 2008, and Minnesota Statutes 239.761 and 296A.01)

Ethanol Blend Mandate

All gasoline sold or offered for sale in the state must contain at least 10% ethanol by volume (E10). Effective August 30, 2013, all gasoline sold or offered for sale in the state must contain at least 20% ethanol by volume (E20), unless ethanol has already replaced 20% of all motor vehicle fuel sold in the state by December 31, 2010, or federal approval has not been granted for the use of E20. Certain exemptions apply. (Reference Minnesota Statutes 239.791)

Alternative Fuel Use Requirement

State agencies are required to take all reasonable actions necessary to strengthen the infrastructure for increasing the availability and use of E85 and biodiesel throughout the state. Employees using state vehicles are expected to use E85 fuel when operating flexible fuel vehicles, whenever E85 is reasonably available. The state's SmartFleet Committee is directed to develop a plan to facilitate the use of E85 and biodiesel in state vehicles, including actively pursuing the establishment of additional E85 fueling facilities at public retail outlets throughout the state. (Reference Executive Order 06-03, 2006)

Hydrogen Energy Plan

The Minnesota Department of Administration is required to identify opportunities for demonstrating the use of hydrogen fuel cells within state-owned facilities, vehicle fleets, and operations. The Department of Administration is required to purchase and demonstrate hydrogen, fuel cells, and related technologies in ways that strategically contribute to realizing Minnesota's hydrogen economy goals. Additionally, the state Department of Commerce (DOC) is expected to report to the legislature every two years with a list of proposed pilot projects that contribute to realizing these goals, including those demonstrating technologies such as hybrid-electric, off-road, and fleet vehicles operating on hydrogen or fuels blended with hydrogen.

The DOC is authorized to accept federal funds, expend funds, and participate in projects to design, develop, and construct multi-fuel hydrogen fueling stations that eventually link urban centers along key trade corridors across the jurisdictions of Manitoba, the Dakotas, Minnesota, Iowa, and Wisconsin. These energy stations should accommodate a wide variety of vehicle technologies and fueling platforms, including hybrid, flexible fuel, and fuel cell vehicles. They may offer, but not be limited to, gasoline, diesel, ethanol (E85), biodiesel, and hydrogen, and may simultaneously test the integration of on-site combined heat and power technologies with the existing energy infrastructure.

The state's public research and higher education institutions are encouraged to collaborate to establish a regional energy research and education partnership for the production of renewable energy and products, including hydrogen, fuel cells, and related technologies. The Board of Trustees of the Minnesota State Colleges and Universities is encouraged to develop a fuel cell curriculum pilot program.

(Reference Minnesota Statutes 216B.811 to 216B.815)

Plug-In Hybrid Electric Vehicle (PHEV) and Neighborhood Electric Vehicle (NEV) Initiatives

All solicitation documents that include the purchase of passenger automobiles issued under the jurisdiction of the Minnesota Department of Administration after June 30, 2006, must assert the intention of the state to begin purchasing PHEVs and NEVs as soon as they become commercially available. The PHEVs and NEVs must first meet the state's performance specifications and be priced no more than 10% above the price for comparable gasoline-powered vehicles.

A PHEV is defined as a vehicle containing an internal combustion engine that also allows power to be delivered to the drive wheels by a battery-powered electric motor and that meets applicable federal motor vehicle safety standards. When connected to the electrical grid via an electrical outlet the vehicle must be able to recharge its battery. The vehicle must have the ability to travel at least 20 miles, powered substantially by electricity.

(Reference House File 3718, 2006)

Biodiesel Task Force

To help reach the state's eight million gallon biodiesel production capacity goal and ensure a smooth introduction of biodiesel into the marketplace, a Biodiesel Task Force was established in March 2003 to help promote and educate possible biodiesel developers, marketers, consumers, and manufacturers. The 10-member task force advises the Minnesota Department of Agriculture on methods to increase production and use of biodiesel in Minnesota. The task force also promotes and educates potential biodiesel developers, marketers, consumers, and manufacturers about biodiesel.

Point of Contact

Ralph Groschen
Senior Marketing Specialist
Minnesota Department of Agriculture
Phone (651) 201-6223
Fax (651) 201-6114
ralph.groschen@state.mn.us

Alternative Fuel Use and Alternative Fuel Vehicle (AFV) Acquisition Requirements

State agencies are required to use alternative fuels, including B20-B100 biodiesel blends, compressed or liquefied natural gas, E70-E100 ethanol blends, hydrogen, or liquefied petroleum gas, to operate state motor vehicles if the clean fuels are reasonably available at comparable costs to conventional fuels and are compatible with the intended use of the motor vehicle. Additionally, state agencies are required to purchase alternative fuel vehicles, which include those capable of being powered by the fuels listed above or motor vehicles powered by electricity or by a combination of electricity and liquid fuel, if such a motor vehicle is reasonably available at comparable costs to other vehicles and if the vehicle is capable of carrying out the purpose for which it is purchased. (Reference Minnesota Statutes 16C.135)

State Agency Energy Plan and Vehicle Acquisition Priorities

Using 2005 as a baseline, the state is required to achieve a 25% and 50% reduction in gasoline used to operate state agency owned on-road vehicles by 2010 and 2015, respectively. Additionally, the state is required to achieve a 10% and 25% reduction in the use of petroleum-based diesel fuel for state owned on-road vehicles by 2010 and 2015, respectively. To meet these goals, each state agency will, whenever legally, technically, and economically feasible, ensure that at least 75% of all new on-road vehicles purchased operate on alternative fuels, including B20-B100 biodiesel blends, compressed or liquefied natural gas, E70-E100 ethanol blends, hydrogen, or liquefied petroleum gas. Alternatively, each state agency must ensure that at least 75% of purchases of new on-road vehicles have fuel economy ratings that exceed 30 miles per gallon (mpg) for city usage or 35 mpg for highway usage, including but not limited to hybrid electric and hydrogen vehicles. (Reference Executive Order 04-10, 2004, and Minnesota Statutes 16C.137)

State Agency Emissions Reduction Requirement

Each state department must seek to reduce air pollution by implementing two or more of the actions outlined in Executive Order 04-08 whenever legally, technically, and economically feasible, subject to the specific needs of the department and responsible management of agency finances. The actions include the purchase or lease of the most fuel-efficient and least polluting vehicles that meet the operational needs of the state department, and fueling state-operated vehicles with the cleanest fuel available. (Reference Executive Order 04-08, 2004)

Alternative Fuel Tax

An excise tax is imposed on the first licensed distributor who receives E85 fuel products in the state and on distributors, special fuel dealers, or bulk purchasers of other alternative fuels. E85 is taxed at a rate of $0.142 per gallon, liquefied petroleum gas is taxed at $0.15 per gallon, liquefied natural gas is taxed at $0.12 per gallon, and compressed natural gas is taxed at the rate of $1.739 per thousand cubic feet or $0.20 per gasoline gallon equivalent. Gasoline is taxed at the rate of $0.20 per gallon. (Reference Minnesota Statutes 296A.07 and 296A.08)

Neighborhood Electric Vehicle (NEV) Access to Roadways

A neighborhood electric vehicle (NEV) is defined as an electric vehicle that has four wheels and is capable of achieving a speed of at least 20 miles per hours (mph) but not more than 25 mph on a paved level surface. An NEV must be titled according to state law and may be operated on public streets and highways if it meets all equipment and vehicle safety requirements in Title 49 of the Code of Federal Regulations, section 571.500, and successor requirements. An NEV may not operate on roadways with a speed limit greater than 35 miles per hour, except to make a direct crossing of that roadway. A road authority, including the commissioner of transportation, may prohibit or further restrict the operation of NEVs on any street or highway under the road authority's jurisdiction. (Reference Minnesota Statutes 169.01 and 169.224)

Idle Reduction Regulation - Minneapolis

Vehicles may not idle in residential areas between 10 pm and 6 am, with the exception of emergency or law enforcement vehicles as well as permitted construction equipment. Violators are subject to a fine of up to a $700. (Reference Minneapolis Code of Ordinances Title 15, Chapter 389.100(7) and (8))

Utilities/Private Incentives

There are currently no known utility or private incentives offered in Minnesota.

Points of Contact:

NAME/EMAIL	AGENCY	TITLE	PHONE/FAX
Lisa Thurstin lisa.thurstin@alamn.org	Twin Cities Clean Cities Coalition	Clean Cities Coordinator	Phone: (651) 223-9568 Fax: (651) 281-0242
Kay Kelly kay.kelly@go.doe.gov	U.S. Department of Energy, Golden Office	Project Manager	Phone: (303) 275-6037 Fax:
Tim Morse tim.morse@state.mn.us	Minnesota Department of Administration	Director, Fleet and Surplus Services	Phone: (651) 201-2511 Fax: (651) 296 3991
John Scharffbillig john.scharffbillig@dot.state.mn.us	Minnesota Department of Transportation	Fleet Manager	Phone: (651) 336-5757 Fax: (651) 336-5727
Ralph Groschen ralph.groschen@state.mn.us	Minnesota Department of Agriculture	Senior Marketing Specialist	Phone: (651) 201-6223 Fax: (651) 201-6114
Mike Nelson michael.nelson@pca.state.mn.us	Minnesota Pollution Control Agency	Small Business Ombudsman	Phone: (651) 297-8615 Fax:
Scott Benson scott.benson@gsa.gov	U.S. General Services Administration	Transportation Specialist, Great Lakes Region	Phone: (312) 886-8682 Fax: (312) 353-0989