An Act To Facilitate the State's Existing Commitment to the Production of Liquid Biofuels
Maine Legislature, Session 124, LD 0389
Committee: Utilities and Energy
Sponsors: BUTTERFIELD, BRYANT, BERRY
Amends: 10 MRSA §997-A, 10 MRSA §1023, 10 MRSA §1026-A, 10 MRSA §1454, 36 MRSA §5291

FIRST REGULAR SESSIuI~-2009 
Legislative Document 
No. 389 
H.P.296 
House of Representatives, February 5, 2009 
An Act To Facilitate the State's Existing Commitment to the 
Production of Liquid Biofuels 
Reference to the Committee on Utilities and Energy suggested and ordered printed. 
Presented by Representative BUTTERFIELD of Bangor. 
Cosponsored by Senator BRYANT of Oxford and 
Representative: BERRY of Bowdoinham. 
Printt!d 011 rccyck'd pi:lpcr 
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MILLICENT M. MacFARLAND 
Clerk 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 10 MRSA §997-A, as amended by PL 2007, c. 395, §§5 and 6, is repealed. 
Sec. 2. 10 MRSA §1023: ... K, as amended by PL 2003, c. 537, §§25 and 26 and 
affected by §53, is further amended to read: 
§1023-K. Clean Fuel Vehicle Fund 
1. Established. The Clean Fuel Vehicle Fund, referred to in this section as the 
"fund," is established under the jurisdiction of the authority with oversight from the 
Governor's Office of Energy Independence and Security within the Executive Department 
to support production, distribution and consumption of clean fuels and biofuels. 
I-A. Definitions. As used in this section, ·unless the context otherwise indicates, the 
following terms have the following meanings. 
A. "Clean fuel" means all products or energy sources used to propel motor vehicles, 
as· defined in Title 29-A. section 101, other than conventional gasoline, diesel or 
reformulated gasoline, that, when compared to conventional gasoline, diesel or 
reformulated gasoline, result in lower emissions of oxides of nitrogen, volatile 
organic compounds, carbon monoxide or particulates or any combination of these. 
"Clean fuel" includes,. but is nbt linrited to,·compressed natural gas; liquefied natural 
gas; liquefied petroleum gas; hydrogen; hythane, which is a combination of 
compressed natural gas and hydrogen; dynamic flywheels; solar energy; alcohol fuels 
containing not less than 85% alcohol by volume; and electricity. 
B. "Biofuel" means any liquid or gas used to propel motor vehicles, as dermed in 
Title 29-A. section 101, if the liquid or gas is produced by a pulp and paper facility in 
existence on October 1, 2009. 
2. Sources of money. The following money must be paid into the fund: 
A. All money appropriated for inclusion in the fund; 
B. Subject to any pledge, contract or other obligation, all interest, dividends or other 
pecuniary gains from investment of money from the fund; 
C. Subject to any pledge, contract or other obligation, any money that the authority 
receives in repayment of advances from the fund; 
D. Any sums designated for deposit into the fund from any source, public or private, 
including, but not limited to, grants, air pollution penalties arui., bond issues and 
voluntary contributions through income tax forms or vehicle registration; and 
E. 
Any other money available to the authority and directed by the authority to be 
paid into the fund. 
3. AIJIJlieatian af fund. The fund may be applied to carry out any power of the 
authority under or in cOlmection with section 1026 A, subsection 1, paragraph A, 
subparngraph (1), division (c), including, but not limited to, the pledge or transfer and 
deposit of money in the fund as secumv fer and the aDDlication of the fund to Dav 
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principal, interest and other amounts due on insured loans. The fund may be used for 
direct loans to finance all or part of any clean fuel vehicle proj ect '.vhen the authority 
determines that: 
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A. The applicant demonstrates a reasonable likelihood that the applicant 'NiH be able 
to repay the loan; 
B. The applicant demonstrates a reasonable likelihood that the applicant viill not be 
able to obtain the funds necessary to undertake all or any part of the proj ect from any 
other source, including a loan insured under section 1026 A. subsection 1. paragraph 
A, subparagraph (1), division (c); 
C. The project is technologically feasible; and 
D. The project vAll contribute to a reduction of or more efficient use of fossil fuels. 
The authority shall adopt rules for detennining eligibility, proj ect feasibility, tenns, 
conditions and security for loans under this section. Rules adopted pursuant to this 
section are routine tech.'1:ical rules under Title 5, chapter 375, subchapter 2 A. Money in 
the fund not currently needed to meet the obligations of the authority as provided in this 
section may be invested in such a manner as pennitted by law. 
3-B. 
Application of fund. 
The fund may be used in accordance with this 
subsection. 
A. The fund may be applied to carry out any power of the authority under or in 
connection with section 1026-A, subsection 1, paragraph A, subparagraph (1 ), 
division (c), including, but not limited to, the pledge or transfer and deposit of money 
in the fund as security for and the application of the fund to pay principal, interest and 
other amounts due on insured loans. 
B. The fund may be used for direct loans to finance all or part of any clean fuel or 
biofuel vehicle project when the authority determines that: 
(1) The applicant demonstrates a reasonable likelihood that the applicant will be 
able to repay the loan; 
(2) The project is teclmologically feasible; and 
(3) The project will contribute to a reduction of or more efficient use of fossil 
fuels. 
C. The fund may be used for grants to support biofuel and clean fuel production, 
distribution and consumption. The authority, in consultation with the Governor's, 
Office of Energy Independence and Security within the Executive Department, shall 
establish a fonnula and method for the awarding of grants under this paragraph. 
The authority, in consultation with the Governor's Office of Energy Independence and 
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Security within the Executive Department, shall adopt rules for determining eligibility, 
project feasibility, tenns, conditions and security for loans under this section. 
Rules 
adopted pursuant to this subsection are routine technical rules under Title 5, chapter 375, 
subchapter 2-A. 
. 
4. Accounts within fund. The authority may divide the fund into separate accounts 
as it determines necessary or convenient for carrying out this section, including, but not 
limited to, accounts reserved for direct loan funds, accounts reserved for grants and 
accounts segmented to support production, distribution and supply of clean fuels and 
biofuels. 
5. Revolving fund. The fund is a nonlapsing, revolving fund. The fund must be 
continuously applied by the authority to carry out this section and section 1026-A, 
subsection 1, paragraph A, subparagraph (1), division (c). 
Sec. 3. 10 MRSA §1026-A, sub-§1, ~A, as amended by PL 2003, c. 537, §30 
and affected by §53, is further amended to read: 
A. 
Loan insurance may not exceed: 
(1) 
One hundred percent of the principal amount of the loan made to any 
borrower including related entities for any of the following types of loans or 
projects: 
(a) Loans to veterans and wartime veterans, except that the authority may 
not at any time have, in the aggregate amount of the principal and interest 
outstanding, loan insurance obligations pursuant to this division exceeding 
$5,000,000; 
(b) Underground and aboveground oil storage facility projects and projects 
to install equipment related to the improvement of air quality pursuant to 
requirements for gasoline service station vapor control and petroleum liquids 
transfer vapor recovery, except that the authority may not at any time have, in 
the aggregate amount of the principal and interest outstanding, loan insurance 
obligations pursuant to this division exceeding $5,000,000; 
(c) Clean fuel vehicle projects and biofuel vehicle projects, except that the 
authority may not at any time have, in the aggregate amount of the principal 
and interest outstanding, loan insurance obligations pursuant to this division 
exceeding $5,000,000; 
(d) Waste oil disposal site clean-up projects, except that the authority may 
not at any time have, in the aggregate amount of the principal and interest 
outstanding, loan insurance obligations pursuant to this division exceeding 
$1,000,000; or 
(e) The Plymouth waste oil remedial study, except that the authority may 
not at any time have, in the aggregate amount of the principal and interest 
outstanding, loan insurance obligations pursuant to this division exceeding 
$1,000,000; and 
(2) Ninety percent of the principal amount of the loan made to any borrower, 
including related entities for any other manufacturing enterprise, industrial 
enterprise, recreational enterprise, fishing enterprise, agricultural enterprise, 
natural resource enterprise or any other eligible business enterprise; 
Sec. 4. 10 MRSA §1454, sub-§l-A is enacted to read: 
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I-A. Dealer's right to deal with alternative motor fuel suppliers other than the 
franchisor. A retail dealer's right to deal with suppliers of alternative motor fuel other 
than the distributor pursuant to a franchise agreement is governed by this subsection. 
A. For purposes of this subsection, "alternative motor fuel" means a blend of 85% 
ethanol and 15% gasoline; a blend of at least 2% methyl ester, commonly referred to 
as biodiesel, and diesel motor fuel; motor fuel composed primarily of methane, stored 
in either a gaseous or liquid state and suitable for use and consumption in the engine 
of a motor vehicle; or hydrogen. 
B. A franchise agreement may not: 
(1) Prohibit a retail dealer from purchasing or selling alternative motor fuel from 
a person or firm other than the distributor; 
(2) Limit the quantity of alternative motor fuel to be purchased from a person or 
firm other than the distributor; or 
(3) Directly or indirectly discourage a retail dealer from purchasing or selling 
alternative motor fuel from a person or firm other than the distributor. 
C. A provision of a franchise agreement that violates this subsection is void as it 
pertains to a particular alternative motor fuel if the distributor does not supply or 
offer to supply to the retail dealer that alternative motor fuel. 
Nothing in this 
paragraph grants to a retail dealer any rights, authority or obligation with respect to 
the permissible uses of the premises or facilities owned, leased or controlled by a 
distributor pursuant to the terms of the franchise agreement. 
D. A distributor, or an officer, agent or employee of a distributor, who threatens, 
harasses, coerces or attempts to coerce a retail dealer for the purpose of compelling 
that dealer to refrain from purchasing or selling alternative motor fuel from a person 
or firm other than the distributor commits a civil violation for which a fine of not 
more than $1,000 may be adjudged. 
Sec. 5. 29-A MRS A §527 is enacted to read: 
§527. Clean Fuel Vehicle Fund voluntary contribution 
In addition to the regular motor vehicle registration fee prescribed by law for the 
particular class of vehicle registered, a person may contribute to the Clean Fuel Vehicle 
Fund established in Title 10, section 1023-K. The Secretary of State shall determine 
annually the total amount contributed pursuant to this section. Prior to the beginning of 
the next year, the Secretary of State shall report the amount contributed pursuant to this 
section to the Treasurer of State, who shall forward that amount to the Clean Fuel Vehicle 
Fund. 
Sec. 6. 36 MRSA §5291 is enacted to read: 
§5291. Clean Fuel Vehicle Fund voluntary checkoff 
1. Clean :Fuel Vehicle Fund. When filing a return, a taxpayer entitled to a refund 
under this Part may designate that a portion of that refund be paid into the Clean Fuel 
Vehicle Fund established in Title 10, section 1023-K. A taxpayer who is not entitled to a 
refund under this Part may contribute to the Clean Fuel Vehicle Fund by including with 
that taxpayer's return sufficient funds to make the contribution. The contribution may not 
be less than $1. Each individual income tax return form must contain a designation in 
substantially the following form: "Clean Fuel Vehicle Fund: () $1, () $5, () $10, () $25 
or ( ) Other $ .... " 
2. Contributions credited to Clean Fuel Vehicle Fund. The State Tax Assessor 
shall determine annually the total amount contributed pursuant to subsection 1. Prior to 
the beginning of the next year, the State Tax Assessor shall deduct the cost, up to $2,000 
0 
annually, of administering the Clean Fuel Vehicle Fund checkoff and report the 
remainder to the Treasurer of State, who shall forward that amount to the Clean Fuel 
Vehicle Fund. 
Sec. 7. Biofuels sustaimnbility study. 
1. Study. The Governor's Office of Energy Independence and Security within the 
Executive Department, in consultation with the Executive Department, State Planning 
Office, the Department of Environmental Protection and the Department of Conservation, 
shall study and make recommendations regarding policies to encourage the sustainability 
ofbiofuels. 
2. Report. The Governor's Office of Energy Independence and Security within the 
Executive Department shall submit a report with its findings and policy recommendations 
to the Legislature no later than January 15, 2010. The report must address, but is not 
limited to: 
A. The benefits and detriments of restricting state support tosustainability-certified 
biofuels; 
B. A review of biofuels sustainability programs and related policies in the European 
Union and other states and other countries, including, but not limited to, California's 
low-carbon fuel standard; 
C. A review of research related to sustainability certification of biofuels and their 
feedstocks, including, but not limited to, forest feedstocks; and 
D. Policy options for sustainability measures for biofuels based on, but not limited 
to, land use practices, particularly sustainable forestry, and life cycle greenhouse gas 
emissions. 
SUMMARY 
This bill eliminates the Agriculturally Derived Fuel Fund and amends the Clean Fuel 
Vehicle Fund to include biofuel projects. The bill also prohibits franchise agreements 
that infringe on a retail dealer's ability to deal with suppliers of alternative motor fuel 
other than the franchisor. 
The bill also directs the Governor's Office of Energy 
Independence and Security within the Executive Department, in consultation with the 
Executive Department, State Planning Office, the Department of Environmental 
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Protection and the Department of Conservation, to study and make recommendations to 
the Legislature regarding policies to encourage the sustainability ofbiofuels.