Infrastructure grant program for ethanol-gasoline blends proposed

A state grant program would help gas station owners install tanks and pumps used to store and dispense ethanol-gasoline blends under a bill heard March 13 by the Revenue Committee.

LB585, introduced by Sen. Curt Friesen of Henderson, would create a cost-share grant program administered by the Nebraska Energy Office meant to improve retail motor fuel sites by installing, replacing or converting infrastructure used to store, blend or dispense gasoline-ethanol blends.

An owner or operator of a retail motor fuel site would be eligible to apply for the grants, which could be used only for infrastructure projects designed and used to store and dispense E-15 or E-85 gasoline or a blend of ethanol and gasoline from a pump designed to blend those fuels.

Friesen said the bill is meant to increase the number of locations across the state where blended fuels with higher ethanol content, such as E-15, E-30 and E-85, can be purchased. He said those blends currently are not widely available in Nebraska.

“Increasing access to E-15, E-30 and E-85 in Nebraska is hugely important because renewable fuels have been a great thing for Nebraska and higher blends of ethanol is … key to continuing growth of the industry,” he said.

A grant could not exceed the lesser of 50 percent of the estimated cost of the improvement or $30,000 for a three-year cost-share agreement. A grant could not exceed the lesser of 70 percent of the estimated cost of the improvement or $50,000 for a five-year agreement.

The office could provide up to $1 million in grants annually from 2020 to 2024.

Friesen said the bill also would repeal a sales and use tax exemption for bullion and currency. The additional tax revenue could be used to fund the grant program, he said.

Steve Ebke of the Nebraska Corn Growers Association testified in support of LB585. He said a similar public-private partnership helped build Nebraska’s ethanol industry, which he said creates jobs, increases the state’s tax base and brings investment to rural areas. Ebke said the proposed grant program would benefit Nebraska consumers by making ethanol blends available at more pumps.

“E-15-capable infrastructure has not expanded at the pace necessary to give all Nebraska consumers a choice of this fuel,” he said. “LB585 will accelerate the availability of E-15 and higher ethanol blends at the retail fuel locations.”

Dawn Caldwell, director of government relations at the Aurora Cooperative, also testified in support, saying the cooperative offers ethanol-blended gasoline at several of its fueling stations to support local corn growers.

Caldwell said sales have “gone through the roof” since the cooperative installed an ethanol blender pump—which allows consumers to select the blend of ethanol they wish to buy—at its St. Paul location.

“We believe a state grant program that can incent other retailers to do the same would make these products available to more Nebraska consumers as well as those who are traveling through our state,” she said.

Deb Evans-Olson of Lincoln Coin and Bullion testified in opposition to the bill’s proposed repeal of the state sales tax exemption on bullion and currency. Evans-Olson said she and her husband advocated for the exemption when it was proposed in 2014 because they believed it would allow their business to compete with others in neighboring states that had adopted similar exemptions.

“[The exemption] did allow us to stay in business and remain competitive,” she said.

Joe Kohout testified in opposition to LB585 on behalf of the American Petroleum Institute, saying the marketplace is not ready for E-15. He cited a AAA report that found E-15 could damage the engines of some older vehicles, and he said some auto manufacturers caution owners against using fuel blends with more than 10 percent ethanol.

The committee took no immediate action on the bill.