ARIZONA STATE SENATE RESEARCH STAFF TO: MEMBERS OF THE SENATE NATURAL RESOURCES COMMITTEE DATE: March 24, 2025 SUBJECT: Strike everything amendment to H.B. 2300, relating to fuel Purpose Adds gasoline fuel reformulation options for all gasoline sold or offered for sale for use in motor vehicles in a county with a population of 1,200,000 or more people and in Area A. Allows any person to petition the Associate Director of the Plant Services Division of the Arizona Department of Agriculture (Associate Director) to request a waiver from the statutorily prescribed standards for motor fuel or the federal standards established by the U.S. Environmental Protection Agency (EPA) Clean Air Act. Background Fuel sold in Arizona must meet minimum standards prescribed by statute and by Arizona Department of Agriculture Weights and Measures Division (Division) rule. All gasoline produced and shipped to or within Arizona and all gasoline sold or offered for sale for use in motor vehicles in a county with a population of 1,200,000 or more people and any portion of a county contained in Area A (Area A) or the portion of Pinal County that is west of range 11 east, excluding the portion within Area A (Area C), must comply with one of two outlined fuel reformulation options, subject to a waiver by the EPA to comply with the federal Clean Air Act. All gasoline in Area A or Area C must also meet the statutory maximum vapor pressure requirements, which vary based on the time of year (A.R.S. §§ 3-3433 and 3-3493). Gasoline that is supplied or sold for fueling motor vehicles cannot contain a total of more than 0.10 percent oxygen by weight collectively from certain oxygenates listed in statute. Laws 2017, Chapter 295 removed the prohibition on the use of iso-butanol in gasoline used for fueling motor vehicles, upon approval by the EPA (A.R.S. § 3-3491). There is no anticipated fiscal impact to the state General Fund associated with this legislation. Provisions 1. Adds, to the fuel reformulation options for all gasoline sold or offered for sale for use in motor vehicles in a county with a population of 1,200,000 or more people and in Area A, a: a) gasoline that meets standards for Federal Phase II reformulated gasoline, in effect on December 4, 2020, that meets all the maximum vapor pressure requirements and, for the period beginning November 1 through March 31 of each year, meets the minimum oxygen content or percentage requirements; b) gasoline that meets standards for California Phase 3 reformulated gasoline, including alternative formulations allowed by the predictive model, as adopted by the California Air Resources Board, in effect on February 16, 2024, and, for the period beginning November 1 through March 31 of each year, meets the prescribed requirements; SAWYER BESSLER LEGISLATIVE RESEARCH ANALYST NATURAL RESOURCES COMMITTEE Telephone: (602) 926-3171 STRIKER MEMO H.B. 2300 Page 2 c) gasoline that meets standards for federal conventional gasoline that also meets the maximum vapor pressure requirements, and, for the period beginning November 1 through March 31 of each year, meets the prescribed minimum oxygen content or percentage requirements; and d) gasoline or gasoline blend that meets any of the prescribed standards or is approved for use by the EPA. 2. Adds additional standards for all gasoline produced and shipped to or within Arizona and sold or offered for sale for use in motor vehicles in a county with a population of 1,200,000 or more people and in Area A for the period beginning May 31 through September 30 of each year, including a: a) gasoline that meets standards for California Phase 3 reformulated gasoline, including alternative formulations allowed by the predictive model, as adopted by the California Air Resources Board, in effect on February 16, 2014; b) gasoline that meets standards for Federal Phase II Reformulated Gasoline, in effect on December 4, 2020; and c) gasoline or gasoline blend that meets any of the prescribed standards or is approved for use by the EPA. 3. Removes the petition for any registered supplier or oxygenate blender to request to the Associate Director a waiver from statutorily prescribed standards for motor fuel. 4. Removes the petition for any registered supplier or oxygenate blender to request to the Associate Director that all registered suppliers or oxygenate blenders be allowed to supply gasoline in Area C that does not meet statutorily prescribed standards for motor fuel if the petitioner demonstrates that a shortage in the supply of gasoline meeting the statutorily prescribed standards for motor fuel is imminent. 5. Allows any person to petition the Associate Director to request a waiver from the statutorily prescribed standards for motor fuel or the federal standards established by the EPA Clean Air Act. 6. Requires the outlined petition to: a) identify the specific supply conditions that will result in a shortage of motor fuel to meet the applicable standard; b) identify the geographic area and motor fuel standards for which the potential shortage exists; c) identify the alternative motor fuel formulations that will be sold in lieu of the motor fuel that meets the applicable standards; and d) specify the time period that the motor fuel waiver is requested, which may not exceed 20 days. 7. Requires the Associate Director, in consultation with the Director of the Arizona Department of Environmental Quality (ADEQ) and the EPA, within seven days after the receipt of an outlined petition, to: a) evaluate the petition; STRIKER MEMO H.B. 2300 Page 3 b) issue a written decision determining whether the petition includes the required information and meets the relevant criteria prescribed in the Clean Air Act; and c) transmit a copy of the Associate Director's written decision to the petitioner, the Director of ADEQ, the President of the Senate and the Speaker of the House of Representatives (House). 8. Requires the Director of ADEQ, on behalf of the Governor, to submit a motor fuel waiver request to the EPA if the Associate Director issues a written decision determining that the petition meets outlined criteria and the Clean Air Act within 24 hours of transmittal to the Director of ADEQ. 9. Requires any decision issued by the EPA to waive the applicable federal standards, and any decision issued by the Associate Director to waive the applicable state standards, that result from the submission of a motor fuel waiver request to be applied equally to all regulated persons to which the standards apply. 10. Allows the Director of ADEQ, in consultation with the Associate Director, to submit a written request to the EPA to extend the motor fuel waiver if the petitioner demonstrates, and the Associate Director verifies, that the conditions in the petition have continued. 11. Prohibits the reauthorization of a motor fuel waiver from exceeding 20 days. 12. Allows a petition for a motor fuel waiver to be submitted for motor fuel properties that are not regulated by the EPA. 13. Requires the Associate Director, not later than seven days after the receipt of a petition for a motor fuel waiver, to evaluate the petition and, after consultation with and concurrence by the Director of ADEQ, issue a written decision determining whether the petition includes the required information and meets the criteria of the Clean Air Act and whether to issue a waiver to waive the applicable state motor fuel requirements. 14. Requires the Associate Director, if any person submits a petition for a motor fuel waiver, to provide written notice that the petition was submitted within two business days of receipt of the petition to the President of the Senate and the Speaker of the House. 15. Exempts, from the statutorily prescribed requirements relating to public records for the purpose of the outlined written notice, the following: a) all communication regarding a petition between the President of the Senate or the President's agent and any other person; b) all communication regarding a petition between the Speaker of the House or the Speaker's agent and any other person; and c) all notices the Associate Director provides to the President of the Senate, the Speaker of the House or to their respective agents. 16. Requires the Associate Director to post on the Arizona Department of Agriculture's (AZDA) website a list of all approved gasoline formulations by area in this state. STRIKER MEMO H.B. 2300 Page 4 17. Requires the Associate Director to update the list as the EPA approves or denies new gasoline formulations. 18. Requires the Associate Director to post separately on the AZDA's website: a) a map that includes all currently approved gasoline formulations by area in this state; and b) a map of Area A, Area B and Area C. 19. Requires the Director of ADEQ to notify the Director of the Arizona Legislative Council in writing by October 1, 2028: a) of the date on which the outlined conditions relating to the conditional enactment were met; or b) that neither condition was met. 20. Conditions the enactment of the outlined rules relating to Area A and Area C fuel reformulations on if by July 1, 2028, the EPA approves the proposed modifications to the gasoline fuel formulation requirements as part of the state implementation plan for air quality. 21. Defines Clean Air Act. 22. Makes technical and conforming changes. 23. Becomes effective on the general effective date or later, subject to the provisions of the conditional enactment.