Bill Text: MI SB0341 | 2015-2016 | 98th Legislature | Introduced

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Bill Title: Transportation; motor fuel tax; tax levy on alternative fuel used in vehicles; provide for, and make other revisions. Amends secs. 22, 40, 53, 63, 151, 152, 153, 154 & 155 of 2000 PA 403 (MCL 207.1022 et seq.).

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2015-05-19 - Referred To Committee On Transportation [SB0341 Detail]

Download: Michigan-2015-SB0341-Introduced.html

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SENATE BILL No. 341

 

 

May 19, 2015, Introduced by Senator SHIRKEY and referred to the Committee on Transportation.

 

 

 

     A bill to amend 2000 PA 403, entitled

 

"Motor fuel tax act,"

 

by amending sections 22, 40, 53, 63, 151, 152, 153, 154, and 155

 

(MCL 207.1022, 207.1040, 207.1053, 207.1063, 207.1151, 207.1152,

 

207.1153, 207.1154, and 207.1155).

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 22. (1) The tax imposed on gasoline shall be in lieu of

 

all other taxes imposed or to be imposed upon the sale or use of

 

gasoline by the this state or any political subdivision of this

 

state except for the taxes imposed by the general sales tax act,

 

1933 PA 167, MCL 205.51 to 205.78, and the use tax act, 1937 PA 94,

 

MCL 205.91 to 205.111.

 

     (2) The tax imposed on diesel fuel and alternative fuel shall

 

be imposed in lieu of all other taxes imposed or to be imposed upon

 

the sale or use of diesel fuel by the this state or a political

subdivision of the this state, except the taxes imposed by the

 

general sales tax act, 1933 PA 167, MCL 205.51 to 205.78, the use

 

tax act, 1937 PA 94, MCL 205.91 to 205.111, and the motor carrier

 

fuel tax act, 1980 PA 119, MCL 207.211 to 207.234. The exception

 

for taxes imposed by the general sales tax act, 1933 PA 167, MCL

 

205.51 to 205.78, and the use tax act, 1937 PA 94, shall MCL 205.91

 

to 205.111, does not apply to diesel fuel used in passenger

 

vehicles of a capacity of 10 or more operated for hire under a

 

certificate issued by the state transportation department. As used

 

in this subsection, "alternative fuel" means that term as defined

 

in section 151.

 

     Sec. 40. (1) A person may seek a refund for tax paid under

 

this act on motor fuel or alternative fuel that is 1 or more of the

 

following:

 

     (a) Accidentally contaminated by dye or another contaminant,

 

including but not limited to gasoline that is mixed with diesel

 

fuel, if the resulting product cannot be used to operate a motor

 

vehicle on the public roads or highways without violating this act

 

or other state or federal law.

 

     (b) Accidentally lost or destroyed as a direct result of a

 

sudden and unexpected casualty loss.

 

     (2) This The refund described in subsection (1) does not apply

 

if the person seeking the refund has been reimbursed for the cost

 

of the tax by any person, including, but not limited to, an

 

insurance company, for the loss or contamination. If a person

 

seeking a refund under this section is reimbursed for any amount,

 

that person shall demonstrate to the department that the amount

reimbursed does not include tax paid under this act on the motor

 

fuel or alternative fuel in order to be eligible for the refund.

 

     Sec. 53. (1) A person shall not engage in a business activity

 

in this state where a license is required by this act unless the

 

person is licensed under this act.

 

     (2) A person required to be licensed under this act shall

 

apply for a license on a form or in a format prescribed by the

 

department.

 

     (3) An application for a license under this act may contain

 

any information the department may reasonably require to administer

 

this act including the applicant's federal identification number.

 

     (4) The following persons currently licensed on the effective

 

date of this act April 1, 2001 are not required to obtain a new

 

license under this act and shall be considered licensed under this

 

act:

 

     (a) A person licensed in this state as a supplier on the

 

effective date of this act April 1, 2001 shall be considered

 

licensed as a supplier under this act but only if the person is a

 

terminal operator or a position holder in a terminal on the

 

effective date of this act.April 1, 2001.

 

     (b) A wholesale distributor who on the effective date of this

 

act April 1, 2001 possesses a valid exemption certificate issued

 

under former section 12 of 1927 PA 150 shall be considered licensed

 

as a fuel vendor under this act.

 

     (c) A person licensed in this state as an exporter on the

 

effective date of this act April 1, 2001 shall be considered

 

licensed as an exporter under this act.

     (d) A person licensed in this state as a liquid fuel hauler on

 

the effective date of this act April 1, 2001 shall be considered

 

licensed as a transporter under this act.

 

     (e) A person licensed in this state as a retail dealer of

 

diesel motor fuel on the effective date of this act April 1, 2001

 

shall be considered licensed as a retail diesel dealer under this

 

act.

 

     (5) A person considered licensed under subsection (4) is

 

subject to all of the provisions of this act except those requiring

 

an application for a new license.

 

     (6) Except as otherwise provided in this act, a person who is

 

engaged in more than 1 business activity for which a license is

 

required under this act shall be licensed for each business

 

activity.

 

     (7) A person who is licensed as a supplier is not required to

 

obtain a separate license for any other business activity for which

 

a license is required under this act except as a retail diesel

 

dealer or as an LPG alternative fuel dealer or alternative fuel

 

commercial user under sections 151 to 155.

 

     (8) A person licensed in this state as an LPG dealer on the

 

effective date of this act shall be considered licensed as an LPG

 

dealer under this act.

 

     (8) (9) A person who negligently violates this section is

 

subject to a civil penalty of $1,000.00.

 

     (9) (10) A person who knowingly violates or knowingly aids and

 

abets another to violate this section is guilty of a felony.

 

     Sec. 63. (1) If an application and the accompanying bond or

cash deposit, if any, are approved, the department shall issue a

 

license to the applicant.

 

     (2) A licensee shall retain a copy of its license at each of

 

its business locations unless the department waives this

 

requirement.

 

     (3) A licensee is not required to renew a license and a

 

license is valid unless and until it is suspended, canceled, or

 

revoked for cause by the department, or discontinued by the

 

licensee. However, the department may require a licensee to update

 

the information required under section 53 or 153.

 

     (4) The department shall maintain a list containing the name

 

and address of each person licensed under this act. The department

 

may post the list on the department's website. The department shall

 

regularly update the list in order to reflect the current status of

 

a licensee.

 

     Sec. 151. As used in this section and sections 152 to 155:

 

     (a) "Alternative fuel" means a gas, liquid, or other fuel

 

that, with or without adjustment or manipulation such as adjustment

 

or manipulation of pressure or temperature, is capable of being

 

used for the generation of power to propel a motor vehicle,

 

including, but not limited to, natural gas, compressed natural gas,

 

liquefied natural gas, liquefied petroleum gas, hydrogen, hydrogen

 

compressed natural gas, or hythane. Alternative fuel does not

 

include motor fuel, electricity, leaded racing fuel, or an excluded

 

liquid.

 

     (b) "Alternative fuel dealer" means a person that is licensed

 

under section 153 to use alternative fuel and is in the business of

selling at retail alternative fuel that is to be used to propel a

 

motor vehicle.

 

     (c) "Alternative fuel commercial user" means a commercial or

 

other business enterprise or entity that is a consumer or end user

 

of alternative fuel to propel a motor vehicle on the public roads

 

and highways of this state. Alternative fuel commercial user does

 

not include a person licensed as an alternative fuel dealer under

 

section 153.

 

     (d) "Alternative fuel filling station" means a machine or

 

other device located within this state that is supplied with

 

alternative fuel and that is designed or used for placing or

 

delivering alternative fuel into the fuel supply tank of a motor

 

vehicle. As used in this subdivision, "located within this state"

 

includes, but is not limited to, all of the following locations:

 

     (i) An alternative fuel dealer's place of business.

 

     (ii) A commercial or industrial establishment or facility.

 

     (iii) A residence or residential property.

 

     (iv) A landfill licensed or required to be licensed under part

 

115 of the natural resources and environmental protection act, 1994

 

PA 451, MCL 324.11501 to 324.11554.

 

     (e) "British thermal unit" or "BTU" means the amount of heat

 

required to raise the temperature of 1 pound of water 1 degree

 

Fahrenheit.

 

     (f) "Compressed natural gas" means a mixture of hydrocarbon

 

gases and vapors that consists primarily of methane in gaseous form

 

that has been compressed for use as a fuel to propel a motor

 

vehicle.

     (g) "Diesel base rate" means the rate per gallon on diesel

 

fuel in effect for the applicable period under section 8(1)(b).

 

     (h) "Diesel gallon equivalent" means 6.060 pounds of liquefied

 

natural gas or its metric equivalent.

 

     (i) "Gasoline base rate" means the rate per gallon on gasoline

 

in effect for the applicable period under section 8(1)(a).

 

     (j) "Gasoline gallon equivalent" means 1 of the following or

 

its metric equivalent:

 

     (i) For compressed natural gas, 5.660 pounds or 126.67 cubic

 

feet measured at a base temperature of 60 degrees Fahrenheit and a

 

pressure of 14.7 pounds per square inch absolute.

 

     (ii) For hydrogen, the volume or weight that is equal to

 

114,100 BTUs. For purposes of this subdivision, there are 27,000

 

BTUs per 100 standard cubic feet, and 425.93 standard cubic feet

 

per gasoline gallon equivalent.

 

     (iii) For hydrogen compressed natural gas, the volume or

 

weight that is equal to 114,100 BTUs. For purposes of this

 

subdivision, there are 79,800 BTUs per 100 standard cubic feet, and

 

144.11 standard cubic feet per gasoline gallon equivalent.

 

     (k) "Liquefied natural gas" means methane or natural gas in

 

the form of a cryogenic or refrigerated liquid that is suitable for

 

use or used as fuel to propel a motor vehicle.

 

     (l) (a) "Liquefied petroleum gas" means gases derived from

 

petroleum or natural gases which that are in the gaseous state at

 

normal atmospheric temperature and pressure, but which that may be

 

maintained in the liquid state at normal atmospheric temperature by

 

suitable pressure. Liquefied petroleum gas includes those products

predominately composed of propane, propylene, butylene, butane, and

 

similar products. Liquefied petroleum gas does not include

 

compressed natural gas, liquefied natural gas, hydrogen, or

 

hythane.

 

     (b) "LPG dealer" means a person who is licensed under this

 

chapter to use liquefied petroleum gas.

 

     (m) (c) "Use", "used", or "uses" means any of the following:

 

     (i) Selling or delivering liquefied petroleum gas alternative

 

fuel not otherwise subject to tax under this act, either by placing

 

it into a permanently attached fuel supply tank of a motor vehicle,

 

or exchanging or replacing of the fuel supply tank of a motor

 

vehicle.

 

     (ii) Delivery of liquefied petroleum gas alternative fuel into

 

storage, devoted exclusively to the storage of liquefied petroleum

 

gas alternative fuel to be consumed in motor vehicles on the public

 

roads or highways of this state.

 

     (iii) Withdrawing liquefied petroleum gas alternative fuel

 

from the cargo tank of a truck, trailer or semi-trailer for the

 

operation of a motor vehicle upon the public roads and highways of

 

this state, whether used in vapor or liquid form.

 

     (iv) Placing or delivering alternative fuel into the fuel

 

supply tank of a motor vehicle by or through the operation of an

 

alternative fuel filling station or by any other means not

 

involving the delivery, receipt, or purchase of alternative fuel

 

from an alternative fuel dealer or any other means not otherwise

 

described in subparagraphs (i) to (iii).

 

     Sec. 152. (1) A Except as otherwise provided in subsection (2)

and section 154, a tax at a the rate of 15 cents per gallon equal

 

to the diesel base rate is imposed upon all liquefied petroleum gas

 

alternative fuel used in this state. The tax shall be paid at the

 

times and in the manner specified in this section or section 154 or

 

155, as applicable. The tax on liquefied petroleum gas alternative

 

fuel sold or delivered either by placing it into a permanently

 

attached fuel supply tank on a motor vehicle, or by exchanging or

 

replacing the fuel supply tank of a motor vehicle, shall be

 

collected by the LPG alternative fuel dealer from the purchaser,

 

consumer, or end user and paid over quarterly monthly to the

 

department as provided in this act. Liquefied petroleum gas

 

Alternative fuel delivered in this state into the storage facility

 

of any person when the exclusive purpose of the storage facility is

 

for resale or use in a motor vehicle on the public roads or

 

highways of this state, shall, upon delivery to storage facility,

 

be subject to tax. An LPG alternative fuel dealer shall, upon

 

delivery of the liquefied petroleum gas, alternative fuel, collect

 

and remit the tax to the department as provided in this act. A

 

person shall not operate a motor vehicle on the public roads or

 

highways of this state from the cargo containers of a truck,

 

trailer, or semitrailer with liquefied petroleum gas alternative

 

fuel in vapor or liquid form, as applicable, except when the

 

alternative fuel in the liquid or vapor phase is withdrawn from the

 

cargo container for use in motor vehicles through a permanently

 

installed and approved metering device. The tax on liquefied

 

petroleum gas alternative fuel withdrawn from a cargo container

 

through a permanently installed and approved metering device shall

apply in accordance with measured gallons or gallon equivalents, if

 

applicable, as reflected by meter reading, and shall be paid

 

quarterly monthly by the LPG alternative fuel dealer to the

 

department as provided in this act.

 

     (2) The rate of tax on the following alternative fuels shall

 

be as follows:

 

     (a) For liquefied natural gas, the diesel base rate per diesel

 

gallon equivalent or fractional part thereof rounded to the nearest

 

1/10 of 1 gallon.

 

     (b) For compressed natural gas, hydrogen, or hydrogen

 

compressed natural gas, the gasoline base rate per gasoline gallon

 

equivalent or fractional part thereof rounded to the nearest 1/10

 

of 1 gallon.

 

     Sec. 153. (1) A person shall not act as an LPG alternative

 

fuel dealer or an alternative fuel commercial user unless the

 

person is licensed under this act.

 

     (2) To obtain a license as an alternative fuel dealer or an

 

alternative fuel commercial user, an applicant shall file with the

 

department an application upon a form or in a format prescribed by

 

the department. The application shall include the name and address

 

of the applicant and of each place of business to be operated by

 

the applicant at which liquefied petroleum gas alternative fuel

 

will be used and other information the department may reasonably

 

require.

 

     (3) At the time of applying for the license, an applicant for

 

an alternative fuel dealer license shall pay to the department a

 

license fee of $50.00.$500.00.

     (4) At the time of applying for the license, an applicant for

 

an alternative fuel commercial user license shall pay to the

 

department a license fee of $50.00.

 

     (5) (4) An applicant for an LPG dealer a license or a licensee

 

under this section is subject to the general licensing and bonding

 

requirements of this act.

 

     (5) A person licensed in this state as an LPG dealer on the

 

effective date of this act shall be considered licensed as an LPG

 

dealer under this act.

 

     Sec. 154. (1) For the purpose of determining the amount of tax

 

payable to the department, an LPG alternative fuel dealer shall, on

 

or before the twentieth day of each calendar month, following the

 

close of the reporting calendar quarter, file with the department

 

on a form or in a format prescribed by the department a report

 

which shall include that includes the number of gallons or gallon

 

equivalents, if applicable, of liquefied petroleum gas alternative

 

fuel used by the LPG alternative fuel dealer during the preceding

 

calendar quarter, month, together with any other information the

 

department may require. An LPG alternative fuel dealer at the time

 

of filing the report shall pay to the department at the time of

 

filing the report the full amount of the tax owed.

 

     (2) Beginning on July 1, 2016, for the purpose of determining

 

the amount of tax owed to the department, an alternative fuel

 

commercial user that uses alternative fuel as described in section

 

151(m) upon which the tax imposed under section 152 has not been

 

collected by or paid to an alternative fuel dealer or public

 

utility shall, on or before the twentieth day of each month, file

with the department a report that includes the number of gallons or

 

gallon equivalents, if applicable, of the alternative fuel

 

described in this subsection that was used or consumed by the

 

alternative fuel commercial user during the preceding month,

 

together with any other information the department requires. An

 

alternative fuel commercial user shall pay the full amount of the

 

tax due to the department at the time of filing the required

 

report.

 

     (3) Beginning on January 1, 2017, for the purpose of

 

determining the amount of tax owed to the department, a person that

 

is not an alternative fuel dealer or an alternative fuel commercial

 

user shall pay the tax imposed under section 152 on alternative

 

fuel placed into a motor vehicle fuel supply tank from an

 

alternative fuel filling station for which the tax has not been

 

collected by or paid to an alternative fuel dealer or a public

 

utility, and shall file with the department a form that indicates

 

the number of gallons or gallon equivalents, if applicable, used or

 

consumed by that person during the preceding quarter. A person

 

described in this subsection shall pay to the department the full

 

amount of the tax due at the time of filing the required form.

 

     (4) Except as otherwise provided in this section, a person

 

that uses alternative fuel for a taxable purpose and does not pay

 

the tax imposed under this section shall pay to the department the

 

tax imposed under section 152, along with any applicable penalties

 

or interest.

 

     Sec. 155. (1) Each of the following persons is entitled to a

 

refund of the tax on liquefied petroleum gas imposed by this act:

     (1) (a) A person consuming liquefied petroleum gas alternative

 

fuel for any purpose other than the operation of to propel a motor

 

vehicle on the public roads or highways of this state may seek a

 

refund of the tax on alternative fuel imposed by this act, if that

 

person has already paid the tax imposed under section 152 on that

 

alternative fuel.

 

     (b) The federal government, state government, or a political

 

subdivision of this state consuming liquefied petroleum gas in a

 

motor vehicle owned and operated or leased and operated by the

 

federal government, state government, or political subdivision of

 

this state.

 

     (c) A person consuming liquefied petroleum gas in the

 

operation of a passenger vehicle of a capacity of 5 or more under a

 

municipal franchise, license, permit, agreement, or grant, upon

 

which gas the tax imposed by this section has been paid.

 

     (2) To obtain a refund under this section, a person shall file

 

a claim with the department within 18 months after the date of

 

purchase, as shown on the invoice and shall comply with the

 

requirements set forth in section 48.

 

     (3) A claim for refund under this section shall be on a form

 

or in a format prescribed by the department and shall have attached

 

the original invoice that was provided to the purchaser.

 

     (4) An alternative fuel is exempt from the tax imposed by this

 

act and the tax imposed by this act shall not be collected by an

 

alternative fuel dealer if 1 of the following applies:

 

     (a) The alternative fuel is sold directly by an alternative

 

fuel dealer to the federal government, the state government, or a

political subdivision of this state for use in a motor vehicle

 

owned and operated or leased and operated by the federal

 

government, state government, or political subdivision of this

 

state.

 

     (b) The alternative fuel is sold directly by an alternative

 

fuel dealer to a nonprofit, private, parochial, or denominational

 

school, college, or university and is used in a school bus owned

 

and operated or leased and operated by the educational institution

 

that is used in the transportation of students to and from the

 

institution or to and from school functions authorized by the

 

administration of the institution. For alternative fuel sold for

 

mixed use purposes, only that portion of alternative fuel used for

 

school buses qualifies for the exemption under this subdivision.

 

     (5) (4) A person who that sells liquefied petroleum gas

 

alternative fuel shall provide the purchaser with an invoice or

 

receipt showing the amount expressed in gallons or gallon

 

equivalents, as applicable, of gas alternative fuel purchased, the

 

date of purchase, and the amount of tax paid.

 

     (6) An alternative fuel dealer that sells alternative fuel at

 

retail shall clearly list in plain view of the customer the price

 

of the alternative fuel in diesel gallon equivalents or gasoline

 

gallon equivalents, as applicable, on the alternative fuel filling

 

station and any other markings or information required by law.

 

     (7) Except as otherwise provided in this section, a person

 

that uses or consumes alternative fuel for a taxable purpose and

 

does not pay the tax imposed under section 154 is liable for the

 

payment of that tax and shall pay to the department the tax imposed

under section 152 and any applicable penalties or interest.

 

     Enacting section 1. This amendatory act takes effect 90 days

 

after the date it is enacted into law.