Minnesota Incentives and Laws

Last Updated July 2009

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

State Incentives

Biodiesel Fueling Infrastructure Grants

Funding is currently available to assist retailers with the installation and conversion of equipment to dispense biodiesel blends between 10% and 20%. Funding is based on costs associated with installation of new equipment or upgrading current equipment. Project estimates must be provided with the application form. Funding is limited and not guaranteed.

Point of Contact

Emily Nelson
Coordinator
American Lung Association of Minnesota
Phone (651) 227-8014
Fax (651) 281-0242
emily.nelson@lungmn.org
http://www.cleanairchoice.org/cities

E85 Fueling Infrastructure Grants

Funding is currently available to assist public fuel retailers with the installation or conversion of equipment to dispense E85 and intermediate ethanol blends. A station may be eligible for 75% of project costs, up to a maximum of $15,000, if program guidelines are met. Applications are required, and funding is limited and not guaranteed.

Point of Contact

Emily Nelson
Coordinator
American Lung Association of Minnesota
Phone (651) 227-8014
Fax (651) 281-0242
emily.nelson@lungmn.org
http://www.cleanairchoice.org/cities

Renewable Energy and Technology Grants

The University of Minnesota's Initiative for Renewable Energy and the Environment offers grants to promote statewide economic development; sustainable, healthy and diverse ecosystems; and national energy security through development of bio-based and other renewable resources and processes. Eligible projects include those focused on environmentally sound production of energy, including hydrogen, from a renewable energy source such as biomass and agricultural crops; development of energy conservation and efficient energy utilization technologies; energy storage technologies; and analysis of policy options to facilitate adoption of technologies that use or produce low-carbon renewable energy. (Reference Senate File 550, 2009, and Minnesota Statutes 116C.779)

Ethanol Production Incentive

Through June 30, 2010, an ethanol production incentive of $0.20 per gallon of ethanol produced may be earned by 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) 575-2122
michael.nelson@pca.state.mn.us
http://www.pca.state.mn.us/programs/sbomb_loan.html

State Laws and Regulations

Electric Vehicle (EV) and Plug-In Hybrid Electric Vehicle (PHEV) Transportation Analysis

The Commissioner of the Minnesota Department of Transportation is required to conduct a study, in collaboration with other state agencies and stakeholders, to evaluate the current and long-range needs of the state's transportation system, and investigate possible strategies to meet these needs. The study must include the following: 1) identification of options for maintenance and improvement of the state's transportation system, specifically regarding the effects of potential increases in vehicle fuel economy, availability of alternative modes of transportation, and extreme fuel price volatility on future transportation revenues; 2) identification of financial options with particular consideration of environmental impacts such as air and water quality, and greenhouse gas emissions; and 3) evaluation of the impact of the use of EVs and PHEVs on the current funding mechanisms for the state's roadways and an analysis of methods to mitigate the impact. The results of the study are due to the legislature by November 1, 2009. (Reference House File 1250, 2009, and Minnesota Laws 2008, Chapter 287, Article 1, Section 118)

Clean Energy Collaborative

The Governor's Clean Energy Technology Collaborative (Collaborative) was created for experts to discuss issues that impact the development of new clean energy technologies that utilize Minnesota expertise, Minnesota resources, and benefit Minnesota by reducing greenhouse gas (GHG) emissions. The Collaborative provides the Governor with advice and recommendations on matters relating to advances in technology and research in order to achieve Minnesota's long-term clean energy goals, including reducing GHG emissions by 80% by 2050 and generating 25% of Minnesota energy from renewable energy resources by the year 2025. (Reference Executive Order 08-04, 2008)

Biodiesel Blend Mandate

Diesel fuel sold or offered for sale in the state for use in internal combustion engines must contain at least 5% biodiesel (B5) fuel by volume. Beginning May 1, 2012, diesel fuel must contain at least 10% biodiesel, and must contain 20% biodiesel by May 1, 2015. Diesel fuel sold during the months of April, May, June, July, August, September, and October are required to contain more than B5 and revert back to B5 for the following five consecutive months. However, the commissioners of agriculture and commerce and 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. Additional exceptions may apply. (Reference Minnesota Statutes 239.77)

Idle Reduction Weight Exemption

In order to promote the reduction of fuel use and emissions, the maximum gross vehicle weight and axle weight limits for any motor vehicle equipped with idle reduction or emissions-reduction technologies must be increased by the weight of the equipment, not to exceed 400 pounds. The vehicle operator must provide documentation that the vehicle was installed with qualified equipment. (Reference Senate File 1876, 2009, 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. Download Adobe Reader. 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.

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 D6751-08 and is produced by a person or organization certified by the BQ-9000 National Biodiesel Accreditation Program. A biodiesel blend is a blend of diesel fuel and biodiesel fuel between 6% and 20% for on-road and off-road diesel vehicle use. Biodiesel blends must comply with ASTM specification D7467-08. Biodiesel produced from palm oil is not considered biodiesel fuel, unless the palm oil is waste oil and grease collected from within the U.S. or Canada. (Reference Senate File 543, 2009 and Minnesota Statutes 239.761, 239.77 and 296A.01)

Ethanol Blend Mandate

All gasoline sold or offered for sale in Minnesota must contain at least 10% ethanol by volume (E10), or the maximum percent of denatured ethanol by volume authorized in a waiver granted by the U.S. Environmental Protection Agency. Gasoline-ethanol blends must comply with ASTM specification D4814-08b. Effective August 30, 2013, all gasoline sold or offered for sale in the state must contain at least 20% ethanol by volume (E20), unless, by December 31, 2010, ethanol has already replaced 20% of all motor vehicle fuel sold in the state or federal approval has not been granted for the use of E20. Certain exemptions apply. (Reference Senate File 743, 2009, House File 1122, 2009, and Minnesota Statutes 239.761 and 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)

Electric Vehicle (EV) 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 EVs, plug-in hybrid electric vehicles (PHEVs), and neighborhood electric vehicles (NEVs) as soon as they become commercially available. The vehicles must first meet the state's performance specifications and be priced no more than 10% above the price for comparable gasoline-powered vehicles.

An EV is defined as a motor vehicle that is able to be powered by an electric motor drawing current from rechargeable storage batteries, fuel cells, or other portable sources of electrical current, and meets or exceeds applicable requirements in Title 49 of the Code of Federal Regulations, section 571, and future regulations.

A PHEV is defined as an EV containing an internal combustion engine that also allows power to be delivered to the drive wheels by a battery-powered electric motor. 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 1250, 2009, Minnesota Laws) 2006, Chapter 245, and Minnesota Statutes 169.011

Neighborhood Electric Vehicle (NEV) Access to Roadways

A NEV is defined as an electric vehicle that has four wheels and is capable of achieving speeds of at least 20 miles per hours (mph), but not more than 25 mph, on a paved level surface. A 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. A 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 169.011 and 169.224)

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 speeds 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 Minnesota Statutes 169.011 and 169.224)

Electric Vehicle (EV) Infrastructure

EV infrastructure installed in Minnesota must enable the following without requiring significant upgrades of the EV infrastructure: 1) utilization of the EV infrastructure by any make, model, or type of EV; 2) compliance with state safety standards and standards set by the Society of Automotive Engineers; and 3) capability for bidirectional charging once electrical utilities achieve a cost-effective ability to draw electricity from EVs connected to the utility grid. (Reference House File 1250, 2009, and Minnesota Statutes 325F)

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 15-member task force advises the Minnesota Department of Agriculture on methods to increase production and use of biodiesel in Minnesota.

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

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)

Alternative Fuel Tax

The Minnesota Department of Revenue imposes an excise tax 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 the pump a rate of $0.1924 per gallon, liquefied petroleum gas is taxed at $0.20325 per gallon, liquefied natural gas is taxed at $0.1626 per gallon, and compressed natural gas is taxed at the rate of $0.2357 per hundred cubic feet. Gasoline is taxed at the rate of $0.271 per gallon. (Reference Minnesota Statutes 296A.07 and 296A.08)

Idle Reduction Regulation - Minneapolis

Vehicles are not permitted to idle for more than three consecutive minutes in any one-hour period. However, vehicles designed to operate on highways that load and unload may not idle for a period greater than 30 minutes in any one-hour period while loading or unloading at a location under the control of the owner or operator; these vehicles may not idle for more than five minutes in any one-hour period while not loading or unloading. Exemptions related to factors including traffic, passenger comfort, and emergency vehicles apply. (Reference Minneapolis Code of Ordinances Title 3, Sections 58.30, 58.40)

Utilities/Private Incentives

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

Points of Contact:

NAME/EMAIL/TITLE	AGENCY	PHONE/FAX
Lisa Thurstin Clean Cities Coordinator	Twin Cities Clean Cities Coalition	Phone:(651) 223-9568 Fax:(651) 281-0242
Brad Beauchamp Project Manager	U.S. Department of Energy, National Energy Technology Laboratory	Phone:(412) 386-7322 Fax:
Emily Nelson Coordinator	American Lung Association of Minnesota	Phone:(651) 227-8014 Fax:(651) 281-0242
Ralph Groschen Senior Marketing Specialist	Minnesota Department of Agriculture	Phone:(651) 201-6223 Fax:(651) 201-6114
Bob Ellingsworth Fleet Manager	Minnesota Department of Transportation	Phone:(651) 336-5704 Fax:(651) 366-5727
Tim Morse Director, Fleet and Surplus Services	Minnesota Department of Administration	Phone:(651) 201-2511 Fax:(651) 296 3991
Mike Nelson Small Business Ombudsman	Minnesota Pollution Control Agency	Phone:(651) 575-2122 Fax:
Scott Benson Transportation Specialist, Great Lakes Region	U.S. General Services Administration	Phone:(312) 886-8682 Fax:(312) 353-0989