June 17, 2015, Introduced by Reps. McCready, Poleski, Callton, Muxlow and Yonker and referred to the Committee on Transportation and Infrastructure.
A bill to amend 2000 PA 403, entitled
"Motor fuel tax act,"
by amending sections 2, 3, 6, and 8 (MCL 207.1002, 207.1003,
207.1006, and 207.1008), section 2 as amended by 2002 PA 668,
section 3 as amended by 2006 PA 277, and section 8 as amended by
2006 PA 268.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 2. As used in this act:
(a) "Alcohol" means fuel grade ethanol or a mixture of fuel
grade ethanol and another product.
(b) "Blendstock" means and includes any petroleum product
component of motor fuel, such as naphtha, reformate, or toluene; or
any oxygenate that can be blended for use in a motor fuel.
(c) "Blended motor fuel" means a mixture of motor fuel and
another liquid, other than a de minimis amount of a product
including, but not limited to, carburetor detergent or oxidation
inhibitor, that can be used as motor fuel in a motor vehicle.
(d) "Blender" means and includes any person who produces
blended motor fuel outside of the bulk transfer/terminal system.
(e) "Blends" or "blending" means the mixing of 1 or more
petroleum products, with or without another product, regardless of
the original character of the product blended, if the product
obtained by the blending is capable of use in the generation of
power for the propulsion of a motor vehicle, an airplane, or a
marine vessel. Blending does not include mixing that occurs in the
process of refining by the original refiner of crude petroleum or
the blending of products known as lubricating oil in the production
of lubricating oils and greases.
(f) "Bulk end user" means a person who receives into the
person's own storage facilities by transport truck or tank wagon
motor fuel for the person's own consumption.
(g) "Bulk plant" means a motor fuel storage and distribution
facility that is not a terminal and from which motor fuel may be
withdrawn by a tank wagon, a transport truck, or a marine vessel.
(h) "Bulk transfer" means a transfer of motor fuel from 1
location to another by pipeline tender or marine delivery within
the bulk transfer/terminal system, including, but not limited to,
all of the following transfers:
(i) A marine vessel movement of motor fuel from a refinery or
terminal to a terminal.
(ii) Pipeline movements of motor fuel from a refinery or
terminal to a terminal.
(iii) Book transfers of motor fuel within a terminal between
licensed suppliers before completion of removal across the terminal
rack.
(iv) Two-party exchanges between licensed suppliers.
(i) "Bulk transfer/terminal system" means the motor fuel
distribution system consisting of refineries, pipelines, marine
vessels, and terminals. Motor fuel in a refinery, pipeline,
terminal, or a marine vessel transporting motor fuel to a refinery
or terminal is in the bulk transfer/terminal system. Motor fuel in
a fuel storage facility including, but not limited to, a bulk plant
that is not part of a refinery or terminal, in the fuel supply tank
of any engine or motor vehicle, in a marine vessel transporting
motor fuel to a fuel storage facility that is not in the bulk
transfer/terminal system, or in any tank car, rail car, trailer,
truck, or other equipment suitable for ground transportation is not
in the bulk transfer/terminal system.
(j) "Carrier" means an operator of a pipeline or marine vessel
engaged in the business of transporting motor fuel above the
terminal rack.
(k) "Commercial motor vehicle" means a motor vehicle licensed
under the motor carrier fuel tax act, 1980 PA 119, MCL 207.211 to
207.234.
(l) "Consumer price index" means the United States consumer
price index for all urban consumers as defined and reported by the
United States Department of Labor, Bureau of Labor Statistics.
(m) (l) "Dead
storage" is the amount of motor fuel that cannot
be pumped out of a motor fuel storage tank because the motor fuel
is below the mouth of the tank's draw pipe. The amount of motor
fuel in dead storage is 200 gallons for a tank with a capacity of
less than 10,000 gallons and 400 gallons for a tank with a capacity
of 10,000 gallons or more.
(n) (m)
"Denaturants" means and
includes gasoline, natural
gasoline, gasoline components, or toxic or noxious materials added
to fuel grade ethanol to make it unsuitable for beverage use but
not unsuitable for automotive use.
(o) (n)
"Department" means the bureau
of revenue within the
department of treasury or its designee.
(p) (o)
"Destination state" means
the a state, Canadian
province or territory, or foreign country to which motor fuel is
directed for export.
(q) (p)
"Diesel fuel" means any
liquid other than gasoline
that is capable of use as a fuel or a component of a fuel in a
motor vehicle that is propelled by a diesel-powered engine or in a
diesel-powered train. Diesel fuel includes number 1 and number 2
fuel oils, kerosene, dyed diesel fuel, and mineral spirits. Diesel
fuel also includes any blendstock or additive that is sold for
blending with diesel fuel, any liquid prepared, advertised, offered
for sale, sold for use as, or used in the generation of power for
the propulsion of a diesel-powered engine, airplane, or marine
vessel. An additive or blendstock is presumed to be sold for
blending unless a certification is obtained for federal purposes
that the substance is for a use other than blending for diesel
fuel. Diesel fuel does not include an excluded liquid.
(r) (q)
"Dyed diesel fuel" means
diesel fuel that is dyed in
accordance with internal revenue service rules or pursuant to any
other internal revenue service requirements, including any
invisible marker requirements.
(s) (r)
"Eligible purchaser"
means a person who has been
authorized
by the department under section 75 to make the an
election under section 74.
(t) (s)
"Excluded liquid" means
that term as defined in 26
C.F.R.
CFR 48.4081-1.
(u) (t)
"Export" means to obtain
motor fuel in this state for
sale or other distribution outside of this state. Motor fuel
delivered outside of this state by or for the seller constitutes an
export by the seller and motor fuel delivered outside of this state
by or for the purchaser constitutes an export by the purchaser.
(v) (u)
"Exporter" means a person
who exports motor fuel.
Sec. 3. As used in this act:
(a) "Fuel feedstock user" means a person who receives motor
fuel for the person's own use in the manufacture or production of
any substance other than motor fuel.
(b) "Fuel grade ethanol" means the American society for
testing
and materials standard in effect on the effective date of
this
act April 1, 2001 as the D-4806 specification for denatured
fuel grade ethanol for blending with gasoline.
(c) "Fuel transportation vehicle" means a vehicle designed or
used to transport motor fuel on the public roads or highways. Fuel
transportation vehicle includes, but is not limited to, a transport
truck and a tank wagon. Fuel transportation vehicle does not
include a vehicle transporting a nurse tank or limited volume
auxiliary-mounted supply tank used for fueling an implement of
husbandry.
(d) "Gallon" means a unit of liquid measure as customarily
used in the United States containing 231 cubic inches, or 4 quarts,
or its metric equivalent expressed in liters. Where the term gallon
appears in this act, the term liters is interchangeable so long as
the equivalence of a gallon and 3.785 liters is preserved. A
quantity required to be furnished under this act may be specified
in liters when authorized by the department.
(e) "Gasohol" means a blended motor fuel composed of gasoline
and fuel grade ethanol.
(f)
"Gasoline" means and includes gasoline, alcohol, gasohol,
casing head or natural gasoline, benzol, benzine, naphtha, and any
blendstock additive, or other product including methanol that is
sold for blending with gasoline or for use on the road other than
products typically sold in containers of less than 5 gallons.
Gasoline also includes a liquid prepared, advertised, offered for
sale, sold for use as, or used in the generation of power for the
propulsion of a motor vehicle, airplane, or marine vessel,
including a product obtained by blending together any 1 or more
products of petroleum, with or without another product, and
regardless of the original character of the petroleum products
blended, if the product obtained by the blending is capable of use
in the generation of power for the propulsion of a motor vehicle,
airplane, or marine vessel. The blending of all of the above named
products, regardless of their name or characteristics, shall
conclusively be presumed to have been done to produce motor fuel,
unless the product obtained by the blending is entirely incapable
of use as motor fuel. Gasoline also includes transmix. Gasoline
does not include diesel fuel or leaded racing fuel. An additive or
blendstock is presumed to be sold for blending unless a
certification is obtained for federal purposes that the substance
is for a use other than blending for gasoline.
(g) "Gross gallons" means the total measured product,
exclusive of any temperature or pressure adjustments,
considerations, or deductions, in gallons.
(h)
"Heating oil" means a motor fuel including dyed diesel
fuel
that is burned in a boiler, furnace, or stove for heating,
agricultural,
or industrial processing purposes.
(h) (i)
"Implement of husbandry"
means and includes a farm
tractor, a vehicle designed to be drawn or pulled by a farm tractor
or
animal, a vehicle that directly harvests farm products, and or a
vehicle that directly applies fertilizer, spray, or seeds to a farm
field. Implement of husbandry does not include a motor vehicle
licensed for use on the public roads or highways of this state.
(i) (j)
"Import" means to bring
motor fuel into this state by
motor vehicle, marine vessel, pipeline, or any other means.
However,
import Import does not include bringing motor fuel into
this state in the fuel supply tank of a motor vehicle if the motor
fuel is used to power that motor vehicle. Motor fuel delivered into
this state from outside of this state by or for the seller
constitutes an import by the seller, and motor fuel delivered into
this
state from out outside of this state by or for the purchaser
constitutes an import by the purchaser.
(j) (k)
"Importer" means a person
who imports motor fuel into
this state.
(k) (l) "Import
verification number" means the number assigned
by the department to an individual delivery of motor fuel by a
transport truck, tank wagon, marine vessel, or rail car in response
to a request for a number from an importer or transporter carrying
motor fuel into this state for the account of an importer.
(l) "Inflation rate" means the annual percentage change in the
consumer price index, as determined by the department comparing the
2 most recent July 1 through June 30 periods that are immediately
preceding the effective date of the rate prescribed under section
8(1)(d), converted to decimals. If the annual percentage change is
negative, then the inflation rate is 0.
(m) "In this state" means the area within the borders of this
state, including all territories within the borders owned by, held
in trust by, or added to the United States of America.
(n) "Invoiced gallons" means the number of gallons actually
billed on an invoice.
Sec. 6. As used in this act:
(a) "Tank wagon" means a straight truck having 1 or more
compartments other than the fuel supply tank designed or used to
carry motor fuel.
(b) "Tank wagon operator-importer" means a person who operates
a tank wagon and imports motor fuel into this state from another
state.
(c) "Tax" means a tax, interest, or penalty levied under this
act.
(d) "Terminal" means a motor fuel storage and distribution
facility that meets all of the following requirements:
(i) Is registered as a qualified terminal by the internal
revenue service.
(ii) Is supplied by pipeline or marine vessel.
(iii) Has a rack from which motor fuel may be removed.
(e) "Terminal operator" means a person who owns, operates, or
otherwise controls a terminal.
(f) "Transmix" means the mixed product that results from the
buffer or interface of 2 different products in a pipeline shipment,
or a mixture of 2 different products within a refinery or terminal
that results in an off-grade mixture.
(g) "Transport truck" means a semitrailer combination rig
designed or used for the purpose of transporting motor fuel over
the public roads or highways.
(h) "Transporter" means an operator of a railroad or rail car,
tank wagon, transport truck, or other fuel transportation vehicle
engaged in the business of transporting motor fuel below the
terminal rack.
(i) "Two-party exchange" means a transaction in which motor
fuel is transferred from 1 licensed supplier or licensed permissive
supplier to another licensed supplier or licensed permissive
supplier where all of the following occur:
(i) The transaction includes a transfer from the person who
holds the original inventory position for motor fuel in the
terminal as reflected in the records of the terminal operator.
(ii) The exchange transaction is completed before removal
across the rack from the terminal by the receiving licensed
supplier or licensed permissive supplier.
(iii) The terminal operator in its books and records treats
the receiving exchange party as the supplier that removes the
product across a terminal rack for purposes of reporting the
transaction to the department.
(j) "Ultimate vendor" means the person who sells motor fuel to
the end user of the fuel.
(k) "Wholesale price" means the 12-month average price per
gallon of gasoline over the period from January 2014 through
December 2014 charged by a licensed supplier, as determined by the
department. Wholesale price does not include the tax imposed by
this act, prepaid sales tax under section 6a of the general sales
tax act, 1933 PA 167, MCL 205.56a, federal excise tax under section
4081 of the internal revenue code, 26 USC 4081, any other federal
tax upon motor fuel, or an environmental protection regulatory fee
imposed under section 21508 of the natural resources and
environmental protection act, 1994 PA 451, MCL 324.21508.
(l) (k)
"Wholesaler" means a
person who acquires motor fuel
from a supplier or from another wholesaler for subsequent sale and
distribution at wholesale by a fuel transportation vehicle, rail
car, or other motor vehicle.
Sec. 8. (1) Subject to the exemptions provided for in this
act, tax is imposed on motor fuel imported into or sold, delivered,
or used in this state at the following rates:
(a)
Except as otherwise provided in subdivision (c), Through
September 30, 2015, 19 cents per gallon on gasoline.
(b)
Except as otherwise provided in subdivision (d), Through
September 30, 2015, 15 cents per gallon on diesel fuel.
(c)
Subject to subsections (10) and (11), 12 cents per gallon
on
gasoline that is at least 70% ethanol. Under this subdivision,
blenders
of ethanol and gasoline outside of the bulk transfer
terminal
system shall obtain a blender's license and are subject to
the
blender reporting requirements under this act. A licensed
supplier
who blends ethanol and gasoline shall also obtain a
blender's
license.
(d)
Subject to subsections (10) and (11), 12 cents per gallon
on
diesel fuel that contains at least 5% biodiesel. Under this
subdivision,
blenders of biodiesel and diesel fuel outside of the
bulk
transfer terminal system are required to obtain a blender's
license
and are subject to the blender reporting requirements under
this
act. A licensed supplier who blends biodiesel and diesel fuel
shall
also obtain a blender's license.
(c) Except as otherwise provided in subdivisions (d) and (e),
beginning October 1, 2015, a cents-per-gallon rate on motor fuel
calculated as 8.9% of the wholesale price.
(d) Except as otherwise provided in subdivision (e), beginning
with the effective rate on October 1, 2016 and October 1 of each
year thereafter, the department shall determine a cents-per-gallon
rate on motor fuel that shall be calculated by multiplying the
cents-per-gallon rate in effect during the immediately preceding
fiscal year by 1 plus the inflation rate, and rounding up the
product to the nearest cent.
(e) Beginning October 1, 2015, the cents-per-gallon rate on
motor fuel imposed under this subsection shall not exceed 30 cents
per gallon or be less than 23 cents per gallon, as determined by
the department.
(2) Tax shall not be imposed under this section on motor fuel
that is in the bulk transfer/terminal system.
(3) The collection, payment, and remittance of the tax imposed
by this section shall be accomplished in the manner and at the time
provided for in this act.
(4) Tax is also imposed at the rate described in subsection
(1) on net gallons of motor fuel, including transmix, lost or
unaccounted for, at each terminal in this state. The tax shall be
measured annually and shall apply to the net gallons of motor fuel
lost or unaccounted for that are in excess of 1/2 of 1% of all net
gallons of fuel removed from the terminal across the rack or in
bulk.
(5) It is the intent of this act:
(a) To require persons who operate a motor vehicle on the
public roads or highways of this state to pay for the privilege of
using those roads or highways.
(b) To impose on suppliers a requirement to collect and remit
the tax imposed by this act at the time of removal of motor fuel
unless otherwise specifically provided in this act.
(c) To allow persons who pay the tax imposed by this act and
who use the fuel for a nontaxable purpose to seek a refund or claim
a deduction as provided in this act.
(d) That the tax imposed by this act be collected and paid at
those times, in the manner, and by those persons specified in this
act.
(6) Bills of lading and invoices shall identify the blended
product and the correct fuel product code. The motor fuel tax rate
for each product shall be listed separately on each invoice.
Licensees shall report the correct fuel product code for the
blended product as required by the department. When fuel is blended
below the terminal rack, new bills of lading and invoices shall be
generated and submitted to the department upon request. All bills
of lading and invoices shall meet the requirements provided under
this act.
(7) Notwithstanding any other provision of this act, all
facilities in this state that produce motor fuel and distribute the
fuel from a rack for purposes of this act are a terminal and shall
obtain a terminal operator license and shall comply with all
terminal operator reporting requirements under this act. All
position holders in these facilities shall be licensed as a
supplier and shall comply with all supplier requirements under this
act.
(8)
If the tax on gasoline that contains at least 70% ethanol
or
diesel fuel that contains at least 5% biodiesel held in storage
outside
of the bulk transfer/terminal system on the effective date
of
the amendatory act that added this subsection has previously
been
paid at the rates imposed by subsection (1)(a) and (b), the
person
who paid the tax may claim a refund for the difference
between
the rates imposed by subsection (1)(a) and (b) and the
rates
imposed by subsection (1)(c) and (d). All of the following
shall
apply to a refund claimed under this subsection:
(a)
The refund shall be claimed on a form prescribed by the
department.
(b)
The refund shall apply only to:
(i) Previously taxed gasoline containing at least 70%
ethanol
or
diesel fuel containing at least 5% biodiesel in excess of 3,000
gallons
held in storage by an end user.
(ii) Previously taxed gasoline containing at least 70%
ethanol
or
diesel fuel containing at least 5% biodiesel held for sale that
is
in excess of dead storage.
(9)
A refund request shall be filed within 60 days after the
last
day of the month in which the amendatory act that added this
subsection
took effect. A taxpayer shall provide documentation that
the
department requires in order to verify the request for refund.
A
person who may claim a refund under subsection (8) shall do all
of
the following to claim the refund:
(a)
Not later than 12 a.m. on the effective date of the
amendatory
act that added this subsection, take an inventory of
gasoline
containing at least 70% ethanol or undyed diesel fuel
containing
at least 5% biodiesel.
(b)
Deduct 3,000 gallons if the person claiming the refund is
an
end user.
(c)
Deduct the number of gallons in dead storage if the
gasoline
containing at least 70% ethanol or the undyed diesel fuel
containing
at least 5% biodiesel is held for subsequent sale.
(10)
Beginning on the effective date of the amendatory act
that
added this subsection, the state treasurer shall annually
determine,
for the 12-month period ending May 1 and for any
additional
times that the treasurer may determine, the difference
between
the amount of motor fuel tax collected and the amount of
motor
fuel tax that would have been collected but for the
differential
rates on gasoline pursuant to subsection (1)(c) and
biodiesel
pursuant to subsection (1)(d). Subsection (1)(c) and (d)
is
no longer effective the earlier of 10 years after the effective
date
of the amendatory act that added this subsection or the first
day
of the first month that is not less than 90 days after the
state
treasurer certifies that the total cumulative rate
differential
from the effective date of this amendatory act is
greater
than $2,500,000.00.
(11)
The legislature shall annually appropriate to the
Michigan
transportation fund created in 1951 PA 51, MCL 247.651 to
247.675,
the amount determined as the rate differential certified
by
the state treasurer for the 12-month period ending on May 1 of
the
calendar year in which the fiscal year begins. Subsection
(1)(c)
and (d) shall not be effective beginning January of any
fiscal
year for which the appropriation required under this
subsection
has not been made by the first day of the fiscal year.
(12)
As used in this section:
(a)
"Biodiesel" means a fuel composed of mono-alkyl esters of
long
chain fatty acids derived from vegetable oils or animal fats
and,
in accordance with standards specified by the American society
for
testing and materials, designated B100 and meeting the
requirements
of D-6751, as approved by the department of
agriculture.
(b)
"Ethanol" means denatured fuel ethanol that is suitable
for
use in a spark-ignition engine when mixed with gasoline so long
as
the mixture meets the American society for testing and materials
D-5798
specifications.
Enacting section 1. This amendatory act takes effect October
1, 2015.