1 CHAPTER 31:02:01
ETHANOL INFRASTRUCTURE INCENTIVE PROGRAM
Section
31:02:01:01 Definitions.
31:02:01:02 Eligible projects activities.
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.
31:02:01:07.01 Fuel tax refund -- Administration -- Payment.
31:02:01:08 Default.
31:02:01:09 Remedies.
31:02:01:10 Access and reporting.
31:02:01:11 Appeal of denied fuel tax refund application.
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;
(1)(2) "Ethanol," a blended ethyl alcohol produced by fermentation from biological materials
such as sugars, starches, and cellulosic feedstocks;
(2)(3) "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 as defined in SDCL § 10-47B-
3(10);
(3)(4) "Ethanol blender pump," a mechanism provided by a motor fuel retail dealer for the
dispensing at retail of ethanol blend, as defined in § SDCL 10-47B-3 of ethanol blend, so that the
end user may choose a particular grade of ethanol to gasoline blend to be dispensed;
(5) "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;
(5) "Flex fuel vehicle," a motor vehicle designed to burn either gasoline or a blend of gasoline
and up to eighty-five percent ethanol; and
(6) "GOED," the Governor's Office of Economic Development; and
3
(7) “Licensed marketer,” a person, licensed by the Department of Revenue pursuant to
chapter 10-47B, who qualifies for a fuel tax refund under SDCL 10-47B-192.
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.
4 31:02:01:02. Eligible projects activities. The following classes of projects activities are
eligible to apply may qualify for grants a grant 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 to 2029,
inclusive, calculated from the number of gallons of E15 dispensed through motor fuel pumps located
on the marketers' retail premises in this state during the preceding calendar year.
For purposes of this section, "flex fuel vehicle," means a motor vehicle designed to burn either
gasoline or a blend of gasoline and up to eighty-five percent ethanol.
Source: 38 SDR 115, effective January 9, 2012.
General Authority: SDCL 10-47B-164.1, 10-47B-164.2, 10-47B-192.
5 Law Implemented: SDCL 10-47B-164.1, 10-47B-192.
6 31:02:01:03. Other eligibility criteria. In addition to the criteria set out provided in
§ 31:02:01:01, a proposed project an applicant seeking a grant from the ethanol infrastructure
incentive program for an activity described in subdivisions 31:02:01:02(1) to (4), inclusive, must
meet the following criteria:
(1) The project shall must be physically located in this state or directed toward end users in
this state;
(2) The project shall must demonstrate a likelihood that it will increase of increasing the use
of ethanol in this state or increase increasing consumer knowledge of ethanol;
(3) If applicable, the project shall must utilize existing technologies proven to be reliable;
(4) The project shall must 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 may 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 must 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 with blends of ten percent ethanol,
fifteen percent ethanol or more, and twenty-five percent ethanol or more;
7 (c) The ethanol blender pump shall be of a type must be compatible with related
infrastructure, including storage and piping systems; and
(d) The ethanol blender pump shall must 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.
8 31:02:01:04. Grant conditions. A grant made for an activity described in subdivisions
31:02:01:02(1) to (4), inclusive, shall must 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 must be paid on a reimbursement basis upon satisfactory completion of the
project. The grant recipient shall 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 must comply with all applicable building and
housing codes and standards.
(4) Unless a written extension is granted by GOED, the project shall must be completed within
one hundred eighty days of notice of grant approval;
(5) The grant application and application for reimbursement shall must be signed under oath;
9 (6) Any project that involves the installation of ethanol blender pumps, including successor
owners, shall must 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 must 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.
10 31:02:01:05. Allocation of grant funds among classes of projects. Moneys deposited in
the ethanol infrastructure incentive fund on or after July 1, 2024, may only be used for payment of
the motor fuel tax refunds provided in subdivision 31:02:01:02(5). GOED may continue to allocate
grant funds moneys deposited in the fund prior to July 1, 2024, among the all classes of projects
described in § 31:02:01:02 until the moneys are expended. GOED may designate periods of time
during which it accepts applications for grants from one or more class of projects classes of activities
described in subdivisions 31:02:01:02(1) to (4), inclusive, but must accept applications for the motor
fuel tax refund provided in subdivision 31:02:01:02(5) only as provided in SDCL 10-47B-192.
GOED shall publically publicly announce that it is accepting applications for grants or payments
and the class or classes of projects which activities that may be eligible for funding. GOED may not
accept applications that are not filed within outside the designated application time period or
applications 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.
11 31:02:01:06. Application form. A grant An ethanol infrastructure incentive program funding
application shall must be submitted on forms provided by GOED and shall include contain 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;
(6) For motor fuel tax refund applicants, the actual number of E15 gallons sold and dispensed
by motor fuel pumps at each location on the application. The application may not include 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; and
12 (7) 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 the additional information as necessary for it to determine eligibility and to make
an award a funding decision.
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.
13 31:02:01:07. Criteria for grant awards. A portion of the grants to be awarded under this
chapter, for activities described in subdivisions 31:02:01:02(1) to (4), inclusive, may be awarded on
a first-come basis. Any grant not awarded on a first-come basis shall must 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 moneys available and
what percentage, if any, will are to 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.
14 31:02:01:07.01. Fuel tax refund -- Administration -- Payment. GOED shall pay motor fuel
tax refunds described in subdivision 31:02:01:02(5) as follows:
(1) GOED shall make a final determination of refund eligibility and amount within ninety
days of receiving the completed application;
(2) Subject to subdivision (3) of this section, the refund amount for an eligible licensed
marketer is as provided in SDCL 10-47B-192; and
(3) If moneys allocated from the ethanol infrastructure incentive fund for motor fuel tax
refunds are insufficient to pay the full refund amount to all licensed marketers for the preceding
calendar year, GOED must prorate each licensed marketer's refund and pay the refund as a
percentage of the overall allocation. This percentage is 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.
Source:
General Authority: SDCL 10-47B-192.
Law Implemented: SDCL 10-47B-192.
15 31:02:01:08. 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 an activity described in subdivisions 31:02:01:02(1) through (4),
inclusive, is used for any purpose other than reimbursement for eligible project costs;
(3) The grantee for an activity described in subdivisions 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 an activity 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.
16 31:02:01:09. Remedies. If there is a default pursuant to the provisions of § 31:02:01:08, 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; or
(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), the amount sought to be repaid as 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.
17 31:02:01:10. Access and reporting. A grantee or recipient of a fuel tax refund payment shall
grant GOED reasonable access to the grantee's or recipient's facilities and records for the purpose of
determining compliance with the terms of the grant or payment and of this chapter. A grantee for an
activity described in subdivisions 31:02:01:02(1) to (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 GOED having 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.
18 31:02:01:11. Appeal of denied fuel tax refund application. A licensed marketer may appeal
a denial of an application for a motor fuel tax refund using the contested case procedures set forth
in SDCL chapter 1-26. The appeal commences when the licensed marketer informs the GOED
commissioner of the appeal in writing within ten business days of receiving the denial from GOED.
Source:
General Authority: SDCL 10-47B-192.
Law Implemented: SDCL 10-47B-192.