June 18, 2015, Introduced by Senator SCHMIDT and referred to the Committee on Commerce.
A bill to amend 1945 PA 327, entitled
"Aeronautics code of the state of Michigan,"
by amending section 203 (MCL 259.203), as amended by 2008 PA 25.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec.
203. (1) There is hereby imposed a privilege A tax at the
rate
of 3 cents per gallon 2% of the average wholesale price is
imposed
on all each gallon of aviation jet fuel,
aviation gasoline,
and fuel sold or used in producing or generating power for
propelling aircraft using the aeronautical facilities on the lands
and
waters of this state. The tax shall must be collected and
remitted in the same manner and method and at the same time as
prescribed by law for the collection of the gasoline tax imposed on
all gasoline used in producing or generating power for propelling
motor
vehicles used upon on the public highways of this state under
the
motor fuel tax act, 2000 PA 403, MCL 207.1001 to 207.1170. A
refund
of 1-1/2 cents per gallon shall be made to airline operators
who
show proof within 6 months after purchase that they are
operating
interstate on scheduled operations.
(2) If a person required to register with the department of
treasury under section 94 of the motor fuel tax act, 2000 PA 403,
MCL
207.1094, is not registered, the person shall not purchase pay
tax under subsection (1) on aviation jet fuel, aviation gasoline,
or
fuel under this act at the rate
imposed by subsection (1), but
shall pay the applicable rate imposed on motor fuel by section 8 of
the motor fuel tax act, 2000 PA 403, MCL 207.1008.
(3) The tax otherwise imposed under subsection (1) is not
imposed on aviation fuel if the purchaser has certified in writing
to the seller that the aviation fuel is being purchased solely for
the purpose of formulating leaded racing fuel as that term is
defined in section 4 of the motor fuel tax act, 2000 PA 403, MCL
207.1004.
Aviation fuel qualifying under this subsection shall must
be identified on shipping papers and invoices as "aviation fuel
exempt for LRF".
(4) The department shall determine the tax rate per gallon on
aviation jet fuel, aviation gasoline, and fuel under subsection (1)
on a quarterly basis. Except as otherwise provided in subsection
(5), the rate must be equal to the product of the average wholesale
price per gallon of aviation jet fuel, aviation gasoline, or fuel
and 2%, rounded up to the nearest 1/10 of 1 cent. The tax rate
determined under this subsection applies for the 3-month period
beginning on the first day of the month following the month in
which the rate is determined. For purposes of determining the tax
rate under this subsection, the average wholesale price per gallon
of fuel is the same as the average wholesale price per gallon of
aviation gasoline. The average wholesale price adjustment for each
quarterly period may not increase or decrease by more than 1% of
the average wholesale price for the previous period. The department
shall publish notice of the rate determined under this subsection
no later than the tenth day of the month preceding the month in
which the rate is effective. The department shall determine the
wholesale price of aviation jet fuel, aviation gasoline, and fuel
based on available wholesale or resale pricing data that best
reflect or approximate Michigan rack prices for these fuel types,
as reported by the United States Energy Information Administration,
the Oil Price Information Service, or any other similar source for
such pricing data, whether publicly available or available only by
subscription.
(5) The rate determined by the department under this section
must not at any time be below 6 cents per gallon of aviation jet
fuel, aviation gasoline, or fuel.
(6) A determination by the department of the rate, wholesale
price, or average wholesale price under this section is presumed to
be correct and will not be set aside unless an administrative
tribunal or court of competent jurisdiction finds the department's
determination to be clearly erroneous.
(7) By January 1, 2016 and every 10 years after 2016, the
department shall complete a study to determine the cost of the
changes made to this section by the amendatory act that added this
subsection and shall forward a copy of the study to the members of
the senate and house committees that consider aviation fuel tax
legislation.
(8) As used in this section:
(a) "Aviation gasoline" means fuel that is designed for use in
the operation of aircraft other than jet or turbo-prop aircraft and
that is sold or used for that purpose.
(b) "Aviation jet fuel" means fuel that is designed for use in
the operation of jet or turbo-prop aircraft and that is sold or
used for that purpose.
(c) "Average wholesale price" means the average wholesale
price per gallon of aviation jet fuel, aviation gasoline, or fuel
as determined by the department based on a 12-month rolling average
of the wholesale price. For purposes of this subdivision, the 12-
month rolling average period ends on the last day of the month that
is 3 months before the month in which the rate is determined by the
department under subsection (4).
(d) "Department" means the department of treasury.
(e) "Wholesale price" means the price per gallon of aviation
jet fuel, aviation gasoline, or fuel charged by a licensed supplier
to a purchaser at the time of removal from a terminal across the
rack, as determined by the department. Wholesale price does not
include the tax imposed by this act, federal excise tax imposed
under section 4081 of the internal revenue code of 1986, 26 USC
4081, any other federal tax on fuel, or an environmental regulatory
protection fee imposed under section 21508 of the natural resources
and environmental protection act, 1994 PA 451, MCL 324.21508.
(f) "Rack" means a mechanism for delivering or removing
aviation jet fuel, aviation gasoline, or fuel from a terminal.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.
Enacting section 2. This amendatory act does not take effect
unless Senate Bill No.____ or House Bill No.____ (request no.
03139'15) of the 98th Legislature is enacted into law.