By Swinford H.B. No. 788 77R1353 QS-D A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to value-added processing of agricultural goods into fuel 1-3 ethanol and biodiesel and the fuel ethanol and biodiesel incentive 1-4 program. 1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-6 SECTION 1. Title 2, Agriculture Code, is amended by adding 1-7 Chapter 16 to read as follows: 1-8 CHAPTER 16. FUEL ETHANOL AND BIODIESEL PRODUCTION 1-9 Sec. 16.001. DEFINITIONS. In this chapter: 1-10 (1) "Account" means the fuel ethanol and biodiesel 1-11 production account. 1-12 (2) "ASTM" means the American Society for Testing and 1-13 Materials. 1-14 (3) "Biodiesel" means a monoalkyl ester that: 1-15 (A) is derived from vegetable oils, rendered 1-16 animal fats, or renewable lipids or a combination of those 1-17 ingredients; and 1-18 (B) meets the requirements of ASTM PS 121, the 1-19 provisional specification for biodiesel. 1-20 (4) "Fuel ethanol" means ethyl alcohol that: 1-21 (A) has a purity of at least 99 percent, 1-22 exclusive of added denaturants; 1-23 (B) has been denatured in conformity with a 1-24 method approved by the Bureau of Alcohol, Tobacco and Firearms of 2-1 the United States Department of the Treasury; 2-2 (C) meets the requirements of ASTM D4806, the 2-3 standard specification for ethanol used as a motor fuel; and 2-4 (D) is produced exclusively from agricultural 2-5 products or by-products or municipal solid waste. 2-6 (5) "Producer" means a person who operates a fuel 2-7 ethanol or biodiesel plant in this state. 2-8 Sec. 16.002. FUEL ETHANOL AND BIODIESEL GRANTS. (a) The 2-9 department shall make grants to producers as an incentive for the 2-10 development of the fuel ethanol and biodiesel industry and 2-11 agricultural production in this state. 2-12 (b) A producer is entitled to receive from the fund 20 cents 2-13 for each gallon of fuel ethanol or biodiesel produced in each 2-14 registered plant operated by the producer until the 10th 2-15 anniversary of the date production from the plant begins. 2-16 (c) The department by rule shall provide for the 2-17 distribution of grant funds under this chapter to producers. The 2-18 department shall make grants not less often than quarterly. 2-19 Sec. 16.003. FUEL ETHANOL AND BIODIESEL PRODUCTION ACCOUNT. 2-20 (a) The fuel ethanol and biodiesel production account is an 2-21 account in the general revenue fund that may be appropriated only 2-22 to the department for the purposes of this chapter, including the 2-23 making of grants under this chapter. 2-24 (b) The account is composed of money transferred to the 2-25 account at the direction of the legislature. 2-26 Sec. 16.004. PLANT REGISTRATION. (a) To be eligible for a 2-27 grant for fuel ethanol or biodiesel produced in a plant, a producer 3-1 must apply to the department for the registration of the plant. A 3-2 producer may apply for the registration of more than one plant. 3-3 (b) An application for the registration of a plant must show 3-4 to the satisfaction of the department that: 3-5 (1) the plant is capable of producing fuel ethanol or 3-6 biodiesel; 3-7 (2) the producer has made a substantial investment of 3-8 resources in this state in connection with the plant; and 3-9 (3) the plant constitutes a permanent fixture in this 3-10 state. 3-11 (c) The department shall register each plant that qualifies 3-12 under this section. 3-13 Sec. 16.005. REPORTS. (a) On or before the fifth day of 3-14 each month, a producer shall report to the department on: 3-15 (1) the number of gallons of fuel ethanol or biodiesel 3-16 produced at each registered plant operated by the producer during 3-17 the preceding month; 3-18 (2) the number of gallons of fuel ethanol or biodiesel 3-19 imported into this state by the producer during the preceding 3-20 month; 3-21 (3) the number of gallons of fuel ethanol or biodiesel 3-22 sold or blended with motor fuels by the producer during the 3-23 preceding month; and 3-24 (4) the total value of agricultural products consumed 3-25 in each registered plant operated by the producer during the 3-26 preceding month. 3-27 (b) A producer who fails to file a report as required by 4-1 this section is ineligible to receive a grant for the period for 4-2 which the report is not filed. 4-3 Sec. 16.006. MAXIMUM GRANT. For each fiscal year beginning 4-4 on or after September 1, 2004, a producer may not receive grants 4-5 for more than 30 million gallons of fuel ethanol or biodiesel 4-6 produced at any one registered plant. 4-7 SECTION 2. This Act takes effect immediately if it receives 4-8 a vote of two-thirds of all the members elected to each house, as 4-9 provided by Section 39, Article III, Texas Constitution. If this 4-10 Act does not receive the vote necessary for immediate effect, this 4-11 Act takes effect September 1, 2001.