ETHANOL INFRASTRUCTURE INCENTIVE PROGRAM 31:02
1 ARTICLE 31:02
ETHANOL INFRASTRUCTURE INCENTIVE PROGRAM
Chapter
31:02:01 Ethanol Infrastructure Incentive Program.
CHAPTER 31:02:01
ETHANOL INFRASTRUCTURE INCENTIVE PROGRAM
Section
31:02:01:01 Definitions.
31:02:01:02 Eligible projects.
31:02:01:03 Other eligibility criteria.
31:02:01:04 Grant conditions.
31:02:01:05 Allocation of grant funds among classes of projects.
31:02:01:06 Application form.
31:02:01:07 Criteria for grant awards.
31:02:01:08 Default.
31:02:01:09 Remedies.
31:02:01:10 Access and reporting.
ETHANOL INFRASTRUCTURE INCENTIVE PROGRAM 31:02
2
31:02:01:01. Definitions. Terms used in this chapter mean:
(1) “E15,” an Ethanol blend containing between ten and one-half percent and fifteen percent
Ethanol;
(12) "Ethanol," a blended ethyl alcohol produced by fermentation from biological materials
such as sugars, starches, and cellulosic feedstocks;
(23) "Ethanol blend," a blended motor fuel containing ethyl alcohol of at least ninety-nine
percent purity, typically derived from agricultural products, and which is blended exclusively with
a product commonly or commercially known or sold as gasoline;
(34) "Ethanol blender pump," a mechanism provided by a motor fuel retail dealer for the
dispensing at retail as defined in § 10-47B-3 of ethanol blend so that the end user may choose a
particular grade of ethanol to gasoline to be dispensed;
(45) "Ethanol infrastructure incentive program," the grant program created by SDCL 10-47B-
164.1 and the E15 fuel tax refund program created by SDCL 10-47B-192 and administered under
this chapter;
(56) "Flex fuel vehicle," a motor vehicle designed to burn either gasoline or a blend of
gasoline and up to eighty-five percent ethanol; and
ETHANOL INFRASTRUCTURE INCENTIVE PROGRAM 31:02
3 (67) "GOED," the Governor's Office of Economic Development.;
(8) “Licensed marketer,” a person, licensed by the Department of Revenue, who sells or
distributes E15 to the end user within this state and who has demonstrated compliance with
alternative fuel compatibility requirements with the Department of Agriculture and Natural
Resources.
Source: 38 SDR 115, effective January 9, 2012.
General Authority: SDCL 10-47B-164.1, 10-47B-164.2., 10-47B-192.
Law Implemented: SDCL 10-47B-164.1, 10-47B-192.
ETHANOL INFRASTRUCTURE INCENTIVE PROGRAM 31:02
4 31:02:01:02. Eligible projectsactivities. The following classes of projects activities are
eligible to apply for grants or payment from the ethanol infrastructure incentive program:
(1) Class 1 -- Motor fuel retail dealer projects for the purchase and installation of ethanol
blender pumps installed on or after September 15, 2011, or the modification of existing ethanol
blender pumps to comply with the standards set out in this chapter and associated piping and storage
systems;
(2) Class 2 -- Projects to encourage the purchase of flex fuel vehicles in this state;
(3) Class 3 -- Projects to encourage the increased use of ethanol in this state, including
marketing or the dissemination of informational materials in this state; and
(4) Class 4 -- Projects to facilitate or encourage the installation of infrastructure for the
distribution of ethanol.; and
(5) Class 5 -- Motor fuel tax refunds to Licensed marketers for calendar years 2025-2029,
calculated from the number of gallons of E15 dispensed through motor fuel pumps located on their
retail premises in this state during the preceding calendar year.
Source: 38 SDR 115, effective January 9, 2012.
General Authority: SDCL 10-47B-164.1, 10-47B-164.2, 10-47B-192.
Law Implemented: SDCL 10-47B-164.1, 10-47B-192.
ETHANOL INFRASTRUCTURE INCENTIVE PROGRAM 31:02
5 31:02:01:03. Other eligibility criteria. In addition to the criteria set out in § 31:02:01:01, a
proposed project seeking a grant from the ethanol infrastructure incentive program for a project
described in subsections 31:02:01:02(1) through (4), inclusive, must meet the following criteria:
(1) The project shall be physically located in this state or directed toward end users in this
state;
(2) The project shall demonstrate a likelihood that it will increase the use of ethanol in this
state or increase consumer knowledge of ethanol;
(3) If applicable, the project shall utilize existing technologies proven to be reliable;
(4) The project shall meet state air, water quality, and other environmental protection
standards; and
(5) For projects involving the installation of ethanol blender pumps:
(a) The ethanol blender pump shall be of a type that does not allow for an end user to
receive an ethanol blend percentage other than that designated by the end user;
(b) The ethanol blender pump shall provide all of the following types of ethanol blends for
the end user:
(i) A blend of ten percent ethanol;
(ii) A blend of fifteen percent ethanol or more; and
(ii) A blend of twenty-five percent or more ethanol;
(c) The ethanol blender pump shall be of a type compatible with related infrastructure,
including storage and piping systems; and
ETHANOL INFRASTRUCTURE INCENTIVE PROGRAM 31:02
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(d) The ethanol blender pump shall comply with all applicable alternative fuel, biofuel,
and flexible fuel requirements established by law.
Source: 38 SDR 115, effective January 9, 2012.
General Authority: SDCL 10-47B-164.1, 10-47B-164.2.
Law Implemented: SDCL 10-47B-164.1.
ETHANOL INFRASTRUCTURE INCENTIVE PROGRAM 31:02
7 31:02:01:04. Grant conditions. A grant made for a project described in subsections
31:02:01:02(1) through (4), inclusive, shall be in an amount determined by GOED and made subject
to the following terms:
(1) The amount of the grant may not exceed the actual cost of the project as proposed in the
application;
(2) A grant shall be paid on a reimbursement basis upon satisfactory completion of the project.
The grant recipient shall must submit a U.S. Internal Revenue Service Form W-9 and as applicable
to the project, ethanol blender pump specification, certification that installation meets Department
of Agriculture and Natural Resources standards, copies of all invoices for the project, proof of
payment of all project costs, lien releases from vendors and installers, and other documentation
reasonably required by GOED to establish that the project has been satisfactorily completed in
compliance with the provisions of this chapter;
(3) All work paid for with grant proceeds shall comply with all applicable building and
housing codes and standards.
(4) Unless a written extension is granted by GOED, the project shall be completed within one
hundred eighty days of notice of grant approval;
(5) The grant application and application for reimbursement shall be signed under oath;
ETHANOL INFRASTRUCTURE INCENTIVE PROGRAM 31:02
8 (6) Any project that involves the installation of ethanol blender pumps, including successor
owners, shall continue to sell ethanol blends in excess of fifteen percent ethanol for a minimum of
twenty-four months after project completion; and
(7) Any existing pump to be replaced shall be removed and disposed of in compliance with
applicable federal and state environmental protection laws.
Source: 38 SDR 115, effective January 9, 2012; SL 2021, ch 1, §§ 8, 19, effective April 19,
2021.
General Authority: SDCL 10-47B-164.1, 10-47B-164.2.
Law Implemented: SDCL 10-47B-164.1.
ETHANOL INFRASTRUCTURE INCENTIVE PROGRAM 31:02
9 31:02:01:05. Allocation of grant funds among classes of projects. Beginning July 1, 2024,
all funds deposited in the ethanol infrastructure incentive fund shall be allocated solely for payment
of the motor fuel tax refunds described in subsection 31:02:01:02(5). GOED may continue to
allocate any grant funds deposited in the ethanol infrastructure incentive fund prior to July 1, 2024,
among allthe classes of projects described in § 31:02:01:02 until such funds are expended. GOED
may designate periods of time during which it accepts applications for grants from one or more class
of projects but must designate an annual thirty day application period for the motor fuel tax refund
described in subsection 31:02:01:02(5) beginning on January 1, 2026. GOED shall
publicallypublicly announce that it is accepting applications for grants or payments and the class or
classes of projects activities which may be eligible for funding. GOED may not accept applications
that are not filed within outside the designated application time period or that relate to a class of
projects activities for which applications are not being accepted.
Source: 38 SDR 115, effective January 9, 2012.
General Authority: SDCL 10-47B-164.1, 10-47B-164.2, 10-47B-192.
Law Implemented: SDCL 10-47B-164.1, 10-47B-192.
ETHANOL INFRASTRUCTURE INCENTIVE PROGRAM 31:02
10 31:02:01:06. Application form. A grant An ethanol infrastructure incentive program funding
application shall be submitted on forms provided by GOED and shall include the following:
(1) The name, complete mailing address, and county of the applicant;
(2) The name, title, address, telephone number, and email address of a designated contact
person for the applicant;
(3) The amount of the grant or motor fuel tax refund requested;
(4) A summary description of the project, including its estimated cost, or, for motor fuel tax
refund applications, the total number of gallons of E15 dispensed by the applicant during the
preceding calendar year, broken down by retail location if the applicant has multiple locations; and
(5) The estimated date of completion of the project, or, in the case of a motor fuel tax refund
application, the time period during the previous calendar year in which E15 was available at each
location.; and
(6) For motor fuel tax refund applicants, evidence the applicant complies with alternative fuel
compatibility requirements with the Department of Agriculture and Natural Resources.
No GOED may not consider incomplete or inaccurate applications may be considered. GOED
may request such additional information as necessary for it to determine eligibility and to make an
award a funding decision.
ETHANOL INFRASTRUCTURE INCENTIVE PROGRAM 31:02
11 Source: 38 SDR 115, effective January 9, 2012.
General Authority: SDCL 10-47B-164.1, 10-47B-164.2, 10-47B-192.
Law Implemented: SDCL 10-47B-164.1, 10-47B-192.
ETHANOL INFRASTRUCTURE INCENTIVE PROGRAM 31:02
12 31:02:01:07. Criteria for grant awards. A portion of the grants for activities described in
subsections 31:02:01:02(1) through (4), inclusive, and to be awarded under this chapter may be
awarded on a first-come basis. Any grant not awarded on a first-come basis shall be awarded based
upon a reasonable projection of additional ethanol blend to be sold as a result of the project and other
projected benefits to the ethanol industry in this state. At the time GOED announces that it will
entertain grant applications, GOED shall announce the amount of grant funds available and what
percentage, if any, will be awarded on a first-come basis.
Source: 38 SDR 115, effective January 9, 2012.
General Authority: SDCL 10-47B-164.1, 10-47B-164.2.
Law Implemented: SDCL 10-47B-164.1.
ETHANOL INFRASTRUCTURE INCENTIVE PROGRAM 31:02
13 31:02:01:08. Criteria for fuel tax refunds. The following requirements apply to the
administration and payment of motor fuel tax refunds described in subsection 31:02:01:02(5):
(1) GOED shall make final determinations of all refund eligibility and amounts within ninety
days of receiving the first motor fuel tax refund request each calendar year;
(2) Subject to subsection 31:02:01:08(3), the refund amount for an eligible Licensed marketer
is five cents multiplied by the total number of gallons of E15 sold and dispensed by the Licensed
marketer during the preceding calendar year;
(3) If funding allocated from the ethanol infrastructure incentive fund for motor fuel tax
refunds is insufficient to pay the full refund amount to all Licensed marketers for the preceding
calendar year, GOED shall prorate each Licensed marketer’s refund and pay the refund as a
percentage of the overall allocation. This percentage is be equal to the Licensed marketer’s number
of gallons of E15 sold and dispensed divided by the total number of gallons of E15 sold and
dispensed by all Licensed marketers eligible for a motor fuel tax refund;
(4) A Licensed marketer shall report the actual number of E15 gallons sold and dispensed by
motor fuel pumps at each location on its application. The application may not report a number of
E15 gallons for a location, or in the aggregate, that is based on percentage calculations applied to an
amount of bulk gasoline or ethanol sold or delivered at a location during the preceding calendar year.
Source:
General Authority: SDCL 10-47B-192.
Law Implemented: SDCL 10-47B-192.
ETHANOL INFRASTRUCTURE INCENTIVE PROGRAM 31:02
14 31:02:01:0831:02:01:09. Default. Any of the following constitutes a default upon the terms
of an ethanol infrastructure incentive program grant or payment:
(1) Any part of a grant an application is shown to be materially false or misleading;
(2) Any part of the grant for a project described in subsections 31:02:01:02(1) through (4),
inclusive, is used for any purpose other than reimbursement for eligible project costs;
(3) The grantee for a project described in subsections 31:02:01:02(1) through (4), inclusive,
fails to commence or complete the project within the time allowed by this chapter;
(4) For projects involving the installation of ethanol blender pumps, the grantee fails to
continue to sell ethanol blends in excess of fifteen percent ethanol for a minimum of twenty-four
months after project completion; or
(5) Repeated failure by the grantee to provide access to facilities or documents or to provide
the reports and other information required by this chapter.
Source: 38 SDR 115, effective January 9, 2012.
General Authority: SDCL 10-47B-164.1, 10-47B-164.2, 10-47B-192.
Law Implemented: SDCL 10-47B-164.1, 10-47B-192.
ETHANOL INFRASTRUCTURE INCENTIVE PROGRAM 31:02
15 31:02:01:0931:02:01:10. Remedies. If there is a default pursuant to the provisions of
§ 31:02:01:0831:02:01:09, the grantee or recipient of a fuel tax refund payment shall repay the full
amount of the grant or payment to GOED within thirty days of a written demand from GOED. GOED
may retain counsel and commence a civil action to recover any grant funds that a grantee or recipient
of a fuel tax refund payment is required to repay. GOED may forgive a default under this chapter if
any of the following conditions are met:
(1) There are fuel shortages that make compliance impractical;
(2) There are changes in fuel market conditions that make compliance impractical;
(3) There are changes in state or federal regulations that make compliance impractical.
For any grant involving the installation of ethanol blender pumps and a default pursuant to the
provisions of subdivision 31:02:01:08(4) 31:02:01:09(4), the amount sought to be repaidas
repayment may be prorated based upon the number of months less than twenty-four that ethanol
blends were sold.
Source: 38 SDR 115, effective January 9, 2012.
General Authority: SDCL 10-47B-164.1, 10-47B-164.2, 10-47B-192.
Law Implemented: SDCL 10-47B-164.1, 10-47B-192.
ETHANOL INFRASTRUCTURE INCENTIVE PROGRAM 31:02
16 31:02:01:1031:02:01:11. Access and reporting. A grantee or recipient of a fuel tax refund
payment shall grant GOED reasonable access to the grantee's their facilities and records for the
purpose of determining compliance with the terms of the grant or payment and of this chapter. A
grantee for a project described in subsections 31:02:01:02(1) through (4), inclusive, shall provide a
written project report to GOED at least annually on forms provided by GOED. GOED may require
more frequent reports in the event of a late or an incomplete report or a reasonable cause to believe
a default has occurred.
Source: 38 SDR 115, effective January 9, 2012.
General Authority: SDCL 10-47B-164.1, 10-47B-164.2, 10-47B-192.
Law Implemented: SDCL 10-47B-164.1, 10-47B-192.
ETHANOL INFRASTRUCTURE INCENTIVE PROGRAM 31:02
17 31:02:01:12. Appeal of denied fuel tax refund application. A Licensed marketer may
appeal GOED’s denial of an application for a motor fuel tax refund using the procedures set forth in
the South Dakota Administrative Procedures Act (SDCL ch. 1-26). A Licensed marketer may
commence an appeal by informing the GOED commissioner in writing within ten business days of
receiving a denial from GOED.
Source:
General Authority: SDCL 10-47B-192.
Law Implemented: SDCL 10-47B-192.