HB-5751, As Passed House, March 16, 2006

SUBSTITUTE FOR

HOUSE BILL NO. 5751

     A bill to amend 2000 PA 403, entitled

"Motor fuel tax act,"

by amending section 8 (MCL 207.1008), as amended by 2002 PA 668.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     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) Nineteen cents per gallon on gasoline.

     (b) Fifteen cents per gallon on diesel fuel.

     (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)(a) or (b) 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) Notwithstanding anything in this act to the contrary, a

person who imports into this state or withdraws diesel fuel that

contains at least 5% biodiesel or gasoline that is at least 70%

ethanol from a rack is a supplier for purposes of this act and is

required to obtain a license under this act. The requirement of

this subsection that a person obtain a supplier license is separate

from the supplier license qualification requirements of the other

sections of this act. However, a person licensed under this

subsection shall comply with all supplier duties and reporting

requirements in this act. Facilities that manufacture motor fuel

under this section and disburse the motor fuel from a rack qualify

as a terminal and shall obtain a terminal operator license and

comply with all responsibilities and reporting requirements

applicable to terminal operators under this act.

     (7) A licensed supplier may claim a deduction on its supplier

return for tax paid under this act for diesel fuel that contains at

least 5% biodiesel if the person is a supplier of biodiesel or

gasoline that is at least 70% ethanol. The deduction shall only be

claimed by the licensed supplier withdrawing the fuel from the rack

or importing the fuel as indicated by the bill of lading for loads

with a destination in this state other than a terminal. The

deduction for biodiesel is 3 cents per gallon. The deduction for

gasoline that contains at least 70% ethanol is 7 cents per gallon.

     (8) Beginning on the effective date of the amendatory act that

added this subsection, the state treasurer shall at a minimum

annually 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 refund rates pursuant to subsection (7) and

biodiesel fuel pursuant to subsection (7). Subsection (7) is no

longer effective the earlier of 10 years after the effective date

of the amendatory act that added this subsection or the date that

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. The legislature shall appropriate the

amount determined as the rate differential by the state treasurer

annually within 60 days of the certification to the Michigan

transportation fund created in 1951 PA 51, MCL 247.651 to 247.675.

Subsection (7) is no longer effective if the legislature does not

annually appropriate the amount determined as the rate differential

by the state treasurer within 60 days of the certification required

under this subsection.

     (9) As used in this section:

     (a) "Biodiesel" means that term as defined in section 2 of the

motor fuels quality act, 1984 PA 44, MCL 290.642.

     (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 does not take effect

unless House Bill No. 5755 of the 93rd Legislature is enacted into

law.