E15 requirement moving again in Iowa Legislature, may be sent to governor soon

DES MOINES — Most Iowa gas stations would be required to sell the higher E15 blend of ethanol under legislation that soon could be headed to Gov. Kim Reynolds, who made the proposal to lawmakers.

The Iowa Senate’s tax policy committee Monday approved Reynolds’ proposal after making some changes, including the addition of another way for small gas stations to receive an exemption from the proposed requirements and financial assistance for potential equipment upgrades.

Lawmakers may debate and pass the bill out of both chambers Tuesday, which would send it to Reynolds’ desk for her signature.

If the proposal is passed into law, all Iowa gas stations with at least two pumps would be required to make the corn-based E15 ethanol blend available for sale on at least one pump. E15 is a higher ethanol blend than E10, currently the most prominent ethanol blend sold at gas stations.

The proposal contains ways for some stations, especially smaller stations, to apply for an exemption from the requirement or for financial assistance for any upgrades the station may need to make to sell E15.

Molly Severn, Reynolds’ liaison to the Iowa Legislature, during Monday’s committee hearing called the legislation “the result of significant compromise from everyone on the rural supply chain,” including gas stations, biofuels producers and corn farmers.

Sen. Waylon Brown, a Republican from Osage who spoke for the bill during Monday’s hearing, said Senate Republicans’ newly added exemption — which would apply to stations that sell fewer than 300,000 gallons of gas annually — would be available to about a third of retail locations, mostly small stations, that make up roughly 6 percent of fuel sales in the state.

Sen. Dan Dawson, a Republican from Council Bluffs who chairs the Senate tax policy committee, said his goal was to help smaller stations that may not have the ability to invest in significant infrastructure upgrades.

“We’re really trying to help out these small retailers here in the state, knowing that these support a lot of our rural communities,” Dawson said. “We definitely want to change the cost share in that program a little bit to help out the small retailers.”

Sen. Joe Bolkcom, a Democrat from Iowa City, was the lone voice of opposition to the proposal, saying he opposes the idea of state government mandating a product be sold by Iowa businesses.

Sen. Pam Jochum, a Democrat from Dubuque, shared a similar concern, but ultimately expressed her hesitant support for the bill.

“I still believe that it is the price at the pump that dictates what consumers will purchase,” Jochum said. “I will hold my nose and vote for this very reluctantly, and primarily because I have in my community a biodiesel plant. … Nonetheless I have some sincere reservations about what we are doing here.”

The proposal, House File 2128, is a priority for Reynolds — who made a similar but more prescriptive proposal last year that didn’t gain enough traction in the Legislature — and one of the few remaining pieces of legislation keeping state lawmakers from concluding their work for the 2022 legislative session.

The bill also contains tax credits to support ethanol and other biofuels.

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