North Dakota
Biofuels Loan Program
Effective August 1, 2007, the Biofuels Partnership in Assisting Community Expansion (PACE) Loan Program will provide a 5% interest buy down to the following: biodiesel and ethanol production facilities; livestock operations feeding byproducts of a biodiesel or ethanol facility; biofuels retailers for refueling infrastructure installation; and grain handling facilities which provide condominium storage of grain used in biofuels production. Qualified ethanol and biodiesel production facilities must be located in North Dakota and ownership must consist of agricultural producers holding at least 10% of the ownership interest in the facility or residents of the state owning at least 50% of the facility. A biodiesel production facility must produce biodegradable, combustible, liquid fuel that is derived from vegetable oil or animal fat and is suitable for blending with diesel fuel for use in internal combustion diesel engines. An ethanol production facility must produce agriculturally-derived denatured ethanol that is suitable for blending with a petroleum product for use in internal combustion engines. A recipient of Biofuels PACE loans is not eligible for regular PACE loans. (Reference Senate Bill 2180, 2007, and North Dakota Century Code 6-09.17-02 through 6-09.17-04)
Point of Contact
Bob Humann
Senior Vice President of Lending
Bank of North Dakota
Phone (701) 328-5703 or (800) 472-2166 x5703
bhumann@nd.gov
http://www.banknd.com/ls/ls_commercial5.jsp
Ethanol Production Incentive
The ethanol production incentive program provides funds for an incentive of $0.40 per gallon for ethanol produced and sold in North Dakota. An ethanol plant that was operational before July 1, 1995, with a production capacity of less than 15 million gallons is eligible for up to $900,000 in production incentives during the 2005-07 biennium. An ethanol plant that was operational before July 1, 1995, and produced at least 15 million gallons in the previous fiscal year may receive up to $450,000 in production incentives during the 2005-07 biennium. The cumulative state ethanol payment amount received by any single ethanol production facility may not exceed $10,000,000. (Reference North Dakota Century Code 4-14.1-07.1)
Quarterly Ethanol Production Incentive
The North Dakota Division of Community Services' Office of Renewable Energy and Energy Efficiency will provide a quarterly production incentive to each eligible facility based on a) the average North Dakota price per bushel of corn received by farmers during the quarter, and b) the average North Dakota rack price per gallon of ethanol during the quarter. The cumulative state ethanol payment amount received by any single ethanol production facility may not exceed $10,000,000. (Reference North Dakota Century Code 4-14.1-08 and 4-14.1-10)
Regional Biofuels Corridor
North Dakota has joined Indiana, Iowa, Kansas, Michigan, Minnesota, Nebraska, South Dakota, and Wisconsin in adopting a cooperative initiative under the the Energy Security and Climate Stewardship Platform Plan (Platform) (PDF 2 MB). The Platform establishes a regional biofuels corridor program and directs state transportation, agriculture, and regulatory officials to develop a system of coordinated signage across the Midwest 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 are required to report their corridor implementation plans to the Midwest Governors Association by April 1, 2008.
Alternative Fuel Labeling Requirement
Effective August 1, 2007, alternative fuels must be labeled at the retail dispensing unit with the price, name, and main components of the alternative fuel or alternative fuel blend. The labeling must follow established labeling specifications for petroleum-based fuels. A producer of alternative fuels may provide a label promoting the benefits of the alternative fuel if the label meets the requirements specified. Alternative fuel is defined as a fuel used in an engine or vehicle other than a petroleum-based fuel. (Reference House Bill 1121, 2007, and North Dakota Century Code 19-10-03.3)
Biodiesel and E85 Definitions
E85 is defined as a blend of agriculturally derived denatured ethanol and gasoline or natural gasoline that typically contains 85% ethanol by volume, but at minimum must contain 60% ethanol by volume and, if produced for use as motor fuel, must comply with American Society for Testing and Materials (ASTM) specification D 5798-96. Biodiesel (B100) is defined as a fuel comprised of mono alkyl esters of long chain fatty acids derived from vegetable oil or animal fats that meets ASTM specification D 6751. (Reference Senate Bill 2087, 2007, and North Dakota Century Code 57-43.1-01 and 57-43.2.01)
Biofuels Research and Promotion
The North Dakota Board of Education is encouraged to establish biomass energy centers at institutions to conduct research and provide education and technical assistance related to biomass production, harvesting, transportation, and conversion. Once established, biomass energy centers will work to identify and evaluate incentives for cellulosic ethanol production and biomass energy through the state legislature or at the federal level. (Reference Senate Bill 2288, 2007)
Alternative Fuel Promotion
Recognizing that biofuels such as ethanol and biodiesel will be an important part of the state's energy economy and advanced research in biofuels production from biomass will be critical to the long-term viability of biofuels, the North Dakota Legislature supports the goal that 25% of the nation's energy consumption will come from renewable sources by the year 2025. Additionally, the Legislature supports the North Dakota energy corridor initiative to increase funding for research development and commercialization of hydrogen fuel cells and biofuels produced from biomass for long-term viability. (Reference House Concurrent Resolution 3020, 2007)
Ethanol Blend Tax Rate Reduction
A state excise tax of $0.23 per gallon is imposed on all special fuels sold or used in the state, including compressed natural gas and liquefied petroleum gas. The sale of ethanol blended gasoline fuel containing 85% ethanol (E85) is exempt from the $0.23 per gallon tax, and is instead subject to a reduced tax of $0.01 per gallon on all E85 fuel sold or used in the state. (Reference North Dakota Century Code 57-43.1-02 and 57-43.2-02)
