February 23, 2006, Introduced by Senators BROWN, GILBERT, PATTERSON, CROPSEY, BISHOP, JELINEK, BIRKHOLZ, TOY, KUIPERS, SIKKEMA, HAMMERSTROM, GARCIA, CASSIS, VAN WOERKOM, JOHNSON, OLSHOVE, LELAND, SCHAUER, CHERRY and THOMAS and referred to the Committee on Technology and Energy.
A bill to amend 1984 PA 44, entitled
"Motor fuels quality act,"
by amending sections 2, 3, 4a, 5, 6, and 7 (MCL 290.642, 290.643,
290.644a, 290.645, 290.646, and 290.647), sections 2 and 7 as
amended by 1993 PA 236, sections 3 and 5 as amended by 2002 PA 13,
section 4a as amended by 2002 PA 425, and section 6 as amended by
2004 PA 278.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 2. As used in this act:
(a) "Additive" means any substance in gasoline other than
gasoline but does not include approved blending components, other
than lead, sodium, and phosphate components, introduced at
refineries or terminals as octane or product quality enhancers in
quantities of less than 1% of volume.
(b) "American society for testing and materials" means an
international nonprofit scientific and educational society devoted
to the promotion of knowledge of the materials of engineering and
the standardization of specification and methods of testing.
(c) "Antiknock index" or "AKI" means an index number arrived
at by adding the motor octane number and the research octane
number, then dividing by 2.
(d) "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.
(e) "Biodiesel blend" means a fuel comprised of a blend of
biodiesel fuel with petroleum-based diesel fuel, suitable for use
as a fuel in a compression-ignition internal combustion diesel
engine.
(f) (d)
"Blender" means a person
who as an individual or
through his or her agent adds an oxygenate to a gasoline.
(g) (e)
"Bulk purchaser-end
user" means a person who is an
ultimate consumer of gasoline and receives delivery of gasoline
into a storage tank of at least 550-gallon capacity substantially
under his or her control.
(h) (f)
"CARB" means the California
air resources board.
(i) (g)
"Delivery vessel" means
a tank truck, tank equipped
trailer, or a similar vessel used for the delivery of gasoline to a
dispensing facility.
(j) (h)
"Department" means the
department of agriculture.
(k) "Diesel fuel" means any liquid other than gasoline that is
suitable for use as a fuel or a component of a fuel in a
compression-ignition internal combustion diesel engine.
(l) (i)
"Director" means the
director of the department of
agriculture or his or her authorized representative.
(m) (j)
"Dispensing facility"
means a site used for vehicle
gasoline refueling that is located in an area of this state that
has been designated as ozone nonattainment and classified as
moderate,
serious, severe, or extreme by the E.P.A. pursuant to 40
C.F.R.
CFR section 81.323, November 6, 1991.
Dispensing facility
does not include a facility used exclusively for the refueling of
aircraft, watercraft, or vehicles that are designed for
agricultural purposes and used exclusively in agricultural
operations.
(n) (k)
"Dispensing unit" means
a device designed for the
delivery of gasoline in which 1 nozzle equates to 1 dispensing
unit.
(o) (l) "Distributor"
means a person who purchases,
transports, or stores or causes the transportation or storage of
gasoline at any point between a gasoline refinery and a retail
outlet or bulk purchaser-end user facility.
(p) (m)
"E.P.A." means the United States
environmental
protection agency.
(q) (n)
"Gasoline" means any
fuel sold in this state that
is
a volatile mixture of liquid
hydrocarbons generally containing
small amount of additives suitable for use in spark-ignition
internal combustion engines, and commonly or commercially known or
sold as gasoline.
(r) "Hydrogen fuel" means a substance containing the chemical
formula H2 that exists as a colorless, odorless, and highly
flammable gas except at low cryogenic temperatures or when highly
compressed that is gaseous or liquefied and suitable for use in a
fuel cell or hydrogen fuel vehicle.
(s) (o)
"Leak" means liquid or
vapor loss from the gasoline
dispensing system or stage I or stage II vapor-recovery system as
determined by visual inspection or functional testing.
(t) (p)
"Modification" means any
change, removal, or
addition, other than an identical replacement, of any component
contained within a stage I or stage II vapor-recovery system. The
resultant modification must constitute an approved vapor-recovery
system.
(u) (q)
"Motor octane number" or
"MON" means a knock
characteristic of gasoline determined by use of standard procedures
on a motor engine.
(v) (r)
"Operator" means a person
who owns, leases,
operates, manages, supervises, or controls, directly or indirectly,
a gasoline-dispensing facility.
(w) (s)
"Oxygenate" means an
oxygen-containing, ashless,
organic compound, such as alcohol or ether, that may be used as
fuel or fuel supplement.
(x) (t)
"Person" means an
individual, sole proprietorship,
partnership, corporation, association, or other legal entity.
(y) (u)
"Refiner" means a person
who owns, leases, operates,
controls, or supervises a refinery.
(z) (v)
"Refinery" means a plant
at which gasoline or diesel
fuel is produced.
(aa) (w)
"Research octane number"
or "RON" means a knock
characteristic of gasoline determined by use of standard procedures
on a research engine.
(bb) (x)
"Retail dealer" means a
person who owns, leases,
operates, controls, or supervises a retail outlet.
(cc) (y)
"Retail outlet" means an
establishment at which
gasoline is sold or offered for sale to the public.
(dd) (z)
"Rule" means a rule
promulgated pursuant to the
administrative
procedures act of 1969, Act No. 306 of the Public
Acts
of 1969, being sections 24.201 to 24.328 of the Michigan
Compiled
Laws 1969 PA 306, MCL 24.201 to 24.328.
(ee) (aa)
"Stage I vapor-recovery
system" means a vapor
tight collection system that is approved by the department and is
designed to capture the gasoline vapors displaced during delivery
into a stationary storage tank and to return not less than 90% of
the displaced vapors to the delivery vessel.
(ff) (bb)
"Stage II vapor-recovery
system" means a gasoline-
dispensing system approved by the department that prevents 95% or
more of the volatile organic compounds from being emitted during
gasoline refueling.
Sec. 3. (1) The director shall establish standards pursuant to
this act to ensure the purity and quality of gasoline and diesel
fuel sold or offered for sale in this state.
(2) The director shall establish standards for the amount and
type of additives allowed to be included in gasoline and diesel
fuel.
(3) The director shall establish standards for the grading of
gasoline, including, but not limited to, subregular with a minimum
85 AKI, regular with a minimum 87 AKI and a minimum 82 MON,
midgrade 88 with a minimum 88 AKI and a minimum 82 MON, midgrade 89
with a minimum 89 AKI and a minimum 83 MON, premium with a minimum
90 AKI, premium 91 with a minimum 91 AKI, premium 92 with a minimum
92 AKI, premium 93 with a minimum 93 AKI, and premium 94 with a
minimum 94 AKI.
(4) The director shall establish standards for Reid vapor
pressure as specified by the American society for testing and
materials, except as otherwise required to conform to federal or
state law. The director shall establish the Reid vapor pressure as
9.0 pounds per square inch (psi) for retail outlets during the
period beginning June 1 through September 15 of each year, except
for dispensing facilities where the director shall establish the
Reid vapor pressure as 7.8 psi in the year 1996 and thereafter. As
used in this subsection and section 10d, "Reid vapor pressure"
means the vapor pressure of gasoline or gasoline oxygenate blend as
determined by ASTM test method D323, standard test method for vapor
pressure of petroleum products (Reid method) or test method D4953,
standard test method for vapor pressure of gasoline and gasoline
oxygenate blends (dry method).
(5) In establishing additive and grading standards the
director shall adopt the latest standards for gasoline established
by the American society for testing and materials and shall adopt
the latest standards for gasoline established by federal law or
regulation. The standards established by the director shall not
prohibit a gasoline blend that is permitted by a valid waiver
granted by the United States environmental protection agency
pursuant to the fuel or fuel additive waiver in section 211(f)(4)
of
part A of title II of the clean air act, chapter 360, 81 Stat.
502,
42 U.S.C. USC
7545, and the ethanol waiver of 1.0 psi in
section
211(h)(4) of part A of title II of the clean air act,
chapter
360, 81 Stat. 502, 42 U.S.C. USC
7545, if the gasoline
blend meets all of the conditions set forth in the waiver.
Beginning June 1, 2003, the director shall not permit the use of
the
additive methyl tertiary butyl ether (MTBE) in this state. The
director,
in consultation with the department of environmental
quality,
shall determine if the additive is likely to cause harmful
effects
on the environment or public health within the state. By
June 1, 2002, the director, in consultation with the director of
the
department of environmental quality, shall review the status of
the
use of MTBE in this state. The review shall include the
following:
(a)
The amount of the additive methyl tertiary butyl ether
(MTBE)
currently in use in gasoline in this state.
(b)
An estimate of the amount of MTBE that is imported in
gasoline
transported into this state from other states or
countries.
(c)
Recommendations as to whether the June 1, 2003 prohibition
can
be achieved and, if not, determine a more feasible date.
(d)
Any other information considered appropriate.
(6) The director shall establish standards pursuant to this
act to ensure the purity and quality of diesel fuel sold or offered
for sale in this state.
(7) Any firm offering hydrogen fuel for sale in this state
shall first register with and obtain approval from the department.
Registration shall include a complete list of the fuel
specifications the product is to meet and the sites where the
product is offered for sale to the general public.
(8) (6)
Standards established pursuant to
this section shall
be by rules promulgated pursuant to the administrative procedures
act of 1969, 1969 PA 306, MCL 24.201 to 24.328.
Sec. 4a. (1) A storage tank at a retail outlet shall be
periodically tested by the retail dealer to insure that the tank
does not have water or water-alcohol at the bottom of that tank in
an amount greater than 2 inches. If there is more than 2 inches of
water or water-alcohol at the bottom of the storage tank, gasoline,
diesel fuel, biodiesel, or biodiesel blend shall not be sold to a
consumer from that tank until the water or water-alcohol level is
reduced to a level of less than 2 inches.
(2) Adequate testing supplies, as determined by the
department, shall be maintained at the retail outlet and shall also
be made available to the department to determine the water or
water-alcohol level in the storage tank.
Sec. 5. (1) Except as provided by federal law or regulation,
in the manufacture of gasoline, diesel fuel, or hydrogen fuel at
any refinery in this state, a refiner shall not manufacture
gasoline, diesel fuel, or hydrogen fuel at a refinery in this state
unless the gasoline, diesel fuel, or hydrogen fuel meets the
requirements in section 3. Except as provided by federal law or
regulation, a blender shall not blend gasoline unless the finished
blend meets the requirements in section 3.
(2) Except as provided by federal law or regulation, a
distributor shall not sell or transfer to any distributor, retail
dealer, or bulk purchaser-end user any gasoline, diesel fuel,
biodiesel, biodiesel blend, or hydrogen fuel unless that gasoline,
diesel fuel, biodiesel, biodiesel blend, or hydrogen fuel meets the
requirements in section 3 and is suitable for its intended purpose.
(3) A carrier or an employee or agent of a carrier, whether
operating under contract or tariff, shall not cause gasoline,
diesel fuel, biodiesel, biodiesel blend, or hydrogen fuel tendered
to the carrier for shipment or transfer to another carrier,
distributor, or retail dealer to fail to comply, at the time of
delivery, with the requirements in section 3.
(4) A person shall not knowingly sell, dispense, or offer for
sale gasoline, diesel fuel, biodiesel, biodiesel blend, or hydrogen
fuel unless that gasoline, diesel fuel, biodiesel, biodiesel blend,
or hydrogen fuel meets the requirements in section 3.
(5) A refiner or distributor shall not transfer, sell,
dispense, or offer gasoline, diesel fuel, biodiesel, biodiesel
blend, or hydrogen fuel for sale in this state to a distributor
unless the refiner or distributor indicates on each bill, invoice,
or other instrument evidencing a delivery of gasoline, the name of
the wholesale distributor who received delivery of the gasoline,
diesel fuel, biodiesel, biodiesel blend, or hydrogen fuel.
(6) A distributor or refiner shall not transfer, sell,
dispense, or offer gasoline, diesel fuel, biodiesel, biodiesel
blend, or hydrogen fuel for sale in this state to a retail dealer
unless
the distributor indicates on each bill, invoice, or
other
instrument
evidencing a delivery of gasoline, the name and license
number
issued retail dealer has a
valid retail gasoline outlet
license
pursuant to this act. ,
of the retail dealer who received
delivery
of the gasoline.
(7) A bill, invoice, or other instrument evidencing a delivery
of gasoline diesel fuel, biodiesel, biodiesel blend, or hydrogen
fuel issued by a refiner or distributor for deliveries of gasoline
to purchasers who are not required to hold a license issued
pursuant to the motor fuel tax act, 2000 PA 403, MCL 207.1001 to
207.1170, or this act shall clearly indicate the name and address
and other information necessary to identify the purchaser of the
gasoline, diesel fuel, biodiesel, biodiesel blend, or hydrogen
fuel.
(8) A bill, invoice, or other instrument evidencing a delivery
of gasoline required by subsection (5), (6), or (7) shall include a
guarantee that the gasoline delivered meets the requirements in
section 3 and shall indicate the concentration range of alcohol in
the gasoline, except for alcohols or ethers that have a molecular
weight greater than ethanol and are not mixed with methanol or
ethanol, or both, and shall indicate the possible presence, without
regard to concentration range, of any alcohols or ethers that have
a molecular weight greater than ethanol and are not mixed with
methanol or ethanol, or both.
(9) A refiner, distributor, bulk purchaser-end user, or retail
dealer shall not transfer, sell, dispense, or offer gasoline,
diesel fuel, biodiesel, or biodiesel blend for sale unless that
gasoline, diesel fuel, biodiesel, or biodiesel blend is visibly
free of undissolved water, sediments, and other suspended matter
and the gasoline is clear and bright at an ambient temperature or
70 degrees Fahrenheit, whichever is greater.
(10) A person who violates this section or rules promulgated
under this section is liable for a civil fine not to exceed
$10,000.00 for each day of the continuance of the violation. A
civil fine ordered pursuant to this section shall be submitted to
the state treasurer for deposit in the gasoline inspection and
testing fund created by section 8.
Sec. 6. (1) Before a distributor or retail dealer engages in
transferring, selling, dispensing, or offering for sale gasoline,
diesel fuel, biodiesel, biodiesel blend, or hydrogen fuel in this
state, the distributor or retail dealer shall obtain a license from
the department for each retail outlet operated by that person. In
administering the licensing under this section, the department may
attempt to coordinate the licensing with the licensing applicable
to gasoline administered by the department of treasury pursuant to
the motor fuel tax act, 2000 PA 403, MCL 207.1001 to 207.1170, and
the general sales tax act, 1933 PA 167, MCL 205.51 to 205.78.
(2) A license expires annually on November 30 unless renewed
before December 1 of each year or unless suspended, denied, or
revoked by the department.
(3) The fee for a license is $15.00 for each year or portion
of a year through July 31, 2002, $50.00 for each year or portion of
a year through July 31, 2003, $75.00 for each year or portion of a
year through July 31, 2004, and $100.00 beginning August 1, 2004
and each year or portion of a year thereafter. A license shall not
be issued or renewed until the fee and any administrative fines
issued under section 10a have been paid. A hearing is not required
before the refusal to issue or renew a license under this
subsection. Fees collected shall be deposited in the gasoline
inspection and testing fund.
(4) An application for a license shall be made to the
department upon a form furnished by the department. The completed
form shall contain the information requested by the department and
shall be accompanied by the fee specified in subsection (3).
(5) The director may suspend, deny, or revoke a license issued
pursuant to this act for failure to comply with the requirements
provided for in section 3, for failure to provide notice as
provided in section 4, for violating section 31 of the weights and
measures act of 1964, 1964 PA 283, MCL 290.631, if that violation
occurs at any of the licensee's retail outlets and involves the
transferring, selling, dispensing, or the offering for sale of
gasoline in this state, or for otherwise failing to comply with
this act or a rule promulgated under this act or an order issued
under this act.
(6) This section does not apply until June 29, 1985.
(7) If a person licensed under this act is convicted of a
willful violation under section 31 of the weights and measures act
of 1964, 1964 PA 283, MCL 290.631, any license issued pursuant to
this act shall be revoked for 2 years.
(8) A suspension, revocation, or denial of a license of a
person who is an individual shall result in the suspension,
revocation, or denial of any other license held or applied for by
that individual under this act. The license of a corporation,
partnership, or other association shall be suspended when a license
or license application of a partner, trustee, director, or officer,
member, or a person exercising control of the corporation,
partnership, or other association is suspended, revoked, or denied.
The suspension shall remain in force until the director determines
that the disability created by the suspension, revocation, or
denial has been removed.
(9) Except as otherwise provided in subsection (3), beginning
on the
effective date of the amendatory act that added this
subsection
July 23, 2004, the
department shall issue an initial or
renewal license not later than 120 days after the applicant files a
completed application. If the application is considered incomplete
by the department, the department shall notify the applicant in
writing or make notification electronically available within 40
days after receipt of the incomplete application, describing the
deficiency and requesting the additional information. The 120-day
period is tolled upon notification by the department of a
deficiency until the date all of the information requested during
the 40-day period is received by the department. Requests for new
or additional information by the department that fall outside the
40-day period do not toll the 120-day period. The determination of
the completeness of an application does not operate as an approval
of the application for the license and does not confer eligibility
of an applicant determined otherwise ineligible for issuance of a
license.
(10) If the department does not issue or deny a license within
120 days after the receipt of a completed application, the
department shall return the license fee and shall reduce the
license fee for the applicant's next renewal application, if any,
by 15%. The failure to issue a license within the time required
under this subsection does not allow the department to otherwise
delay the processing of the application, and that application, upon
completion, shall be placed in sequence with other completed
applications received at that same time. The department shall not
discriminate against an applicant in the processing of an
application based on the fact that the application fee was refunded
or discounted under this subsection.
(11) Beginning October 1, 2005, the director of the department
shall submit a report by December 1 of each year to the standing
committees and appropriations subcommittees of the senate and house
of representatives concerned with motor fuel quality issues. The
director shall include all of the following information in the
report concerning the preceding fiscal year:
(a) The number of initial and renewal applications the
department received and completed within the 120-day time period
described in subsection (9).
(b) The number of applications denied.
(c) The number of applications not issued within the 120-day
period and the amount of money returned to licensees and
registrants under subsection (10).
(12) Before a blender engages in the transferring, selling,
dispensing, or offering for sale blended gasoline in this state,
the blender shall register the finished product with the department
and provide to the department test results as the department
considers necessary. If the product does not comply with the
requirements of section 3, the blender shall provide the department
with a written list of the business names and addresses to whom the
blended product is sold.
(13) As used in this section, "completed application" means an
application complete on its face and submitted with any applicable
licensing fees as well as any other information, records, approval,
security, or similar item required by law or rule from a local unit
of government, a federal agency, or a private entity but not from
another department or agency of the state of Michigan.
Sec. 7. (1) The director shall establish a gasoline
inspection, investigation, and testing program. The purpose of the
inspection, investigation, and testing program is to determine
whether gasoline transferred, sold, dispensed, or offered for sale
in this state meets the requirements provided in this act, to
sample, to investigate allegations of fraud, to inspect and
investigate
violations of the weights and measures act, of 1964,
Act
No. 283 of the Public Acts of 1964, being sections 290.601 to
290.634
of the Michigan Compiled Laws 1964 PA 283, MCL 290.601 to
290.634, and whether notice required by section 4 is provided. The
program shall provide for a regular system of monitoring gasoline
sold or offered for sale in this state. The department shall
implement the inspection, investigation, and testing program as
provided in subsection (8). The expenses of operating the program
shall be paid from money in the gasoline inspection and testing
fund created in section 8.
(2) As part of the inspection and testing program the director
shall maintain a 24-hour toll free consumer hot line to receive
consumer complaints regarding vapor-recovery systems and the purity
and quality of gasoline sold or offered for sale in this state.
(3) If the director has reason to believe a violation of
section 5 or rules promulgated under section 5 has occurred, the
director may require a refiner, distributor, storage facility,
blender, bulk purchaser-end user, or retail dealer to provide to
the department the original documents pertaining to the receipt,
transfer, delivery, storage, or sale of gasoline, diesel fuel,
biodiesel, biodiesel blend, or hydrogen fuel and to allow the
original documents to remain in the possession of the department.
If original documents remain in the possession of the department
and the documents are necessary for conducting business, the
department shall provide copies of the documents to the refiner,
distributor, blender, bulk purchaser-end user, or retail dealer
upon request. A refiner, distributor, bulk purchaser-end user,
blender, or retail dealer shall preserve information regarding the
receipt, transfer, delivery, storage, or sale of gasoline,
including loading tickets, bills of lading, drop tickets, meter
tickets, invoices, sales reports, and billings, for 3 years. A
retail outlet shall retain on its premises the original drop
tickets, bills of lading, and invoices for 1 month before transfer
to
another location. unless the storage location is easily
accessible
from the retail outlet and the original records are
delivered
to the retail outlet for receipt by the department within
24
hours after a written request for the records has been given to
the
retail outlet.
(4) The director, upon presentation of appropriate
credentials, may do all of the following:
(a) Enter upon or through any retail outlet, bulk purchaser-
end user facility, dispensing facility, or the premises or property
of any refiner or distributor.
(b) Make inspections, take samples, and conduct tests during
any hours the business is operating.
(c) Examine records during normal business hours to determine
compliance with this act.
(5) In addition to the powers provided in this act, the
director has all the powers to enforce this act that the director
has
under the weights and measures act,
of 1964, Act No. 283 of
the
Public Acts of 1964, being sections 290.601 to 290.634 of the
Michigan Compiled Laws 1964 PA 283, MCL 290.601 to 290.634.
(6) The director may transmit any information obtained
pursuant to the inspection and testing program to any other agency
of this state if the information will assist the other agency to
carry out any of the agency's regulatory functions or
responsibilities related to the transfer, sale, dispensing, or
offering of gasoline for sale in this state.
(7) The director may promulgate rules for the purpose of
implementing and enforcing this act.
(8) The department shall implement the inspection and testing
program provided in subsection (1) as follows:
(a) Inspection and testing for standards regarding lead,
alcohol, free water, and sediments within 90 days after the
effective date of this act.
(b) Inspection and testing for any other standards by March
29, 1987.