SB-1074, As Passed Senate, April 20, 2006
SUBSTITUTE FOR
SENATE BILL NO. 1074
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
Except as otherwise provided
in subdivision
(c), 19 cents per gallon on gasoline.
(b) Fifteen
Except as otherwise provided
in subdivision (d),
15 cents per gallon on diesel fuel.
(c) Subject to subsections (8) and (9), 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 (8) and (9), 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.
(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) (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) Beginning on the effective date of the amendatory act that
added this subsection, the department of treasury shall, at a
minimum, determine and report to the legislature on April 1 of each
calendar year 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 fuel pursuant to subsection (1)(d).
Subsection (1)(c) and (d) shall not be effective 10 years after the
effective date of the amendatory act that added this subsection or
at the beginning of the fourth month following the date that the
department of treasury certifies that the total cumulative rate
differential, calculated from the effective date of the amendatory
act that added this subsection, is greater than $2,500,000.00,
whichever occurs first.
(9) The legislature shall annually appropriate the amount
determined as the rate differential by the department of treasury
to the Michigan transportation fund created in 1951 PA 51, MCL
247.651 to 247.675. If the legislature does not annually
appropriate the amount determined as the rate differential by the
department of treasury, subsection (1)(c) and (d) shall not be
effective at the beginning of the first calendar year after the
fiscal year in which the annual appropriation required under this
section is not made.
(10) 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.
(11) 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.
(12) 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 (11) and
biodiesel fuel pursuant to subsection (11). Subsection (11) 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 (11) 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.
(13) 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.
Enacting section 2. This amendatory act takes effect on the
first day of the month immediately succeeding the month in which
this amendatory act was signed by the governor and filed with the
secretary of state.