HB-4615, As Passed Senate, July 1, 2015

 

 

 

 

 

 

 

 

 

 

 

SENATE SUBSTITUTE FOR

 

HOUSE BILL NO. 4615

 

 

 

 

 

 

 

 

 

 

 

     A bill to amend 2000 PA 403, entitled

 

"Motor fuel tax act,"

 

by amending sections 2, 3, 8, 22, 40, 45, 53, 63, 122, 143, 151,

 

152, 153, 154, and 155 (MCL 207.1002, 207.1003, 207.1008, 207.1022,

 

207.1040, 207.1045, 207.1053, 207.1063, 207.1122, 207.1143,

 

207.1151, 207.1152, 207.1153, 207.1154, and 207.1155), sections 2

 

and 122 as amended by 2002 PA 668, section 3 as amended by 2006 PA

 

277, and section 8 as amended by 2006 PA 268; and to repeal acts

 

and parts of acts.

 

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withdrawn by a tank wagon, a transport truck, or a marine vessel.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

 

as a qualified commercial motor vehicle under the motor carrier

 

fuel tax act, 1980 PA 119, MCL 207.211 to 207.234, or a motor

 

vehicle licensed under an international fuel tax agreement under

 

section 2a of the motor carrier fuel tax act, 1980 PA 119, MCL

 

207.212a.

 

     (l) "Consumer price index" means 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 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 October 1 through September 30 periods that are

 

immediately preceding the effective date of the rate prescribed

 

under section 8(1)(c), converted to decimals. If the annual

 

percentage change is negative, then the inflation rate is zero.

 

     (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. 8. (1) Subject Except as otherwise provided in this act

 

and 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), as

 

follows:

 

     (i) Through September 30, 2015, 19 cents per gallon on

 

gasoline.

 

     (ii) Beginning October 1, 2015 and through December 31, 2015,

 

23 cents per gallon on gasoline.

 

     (iii) Beginning January 1, 2016 and through December 31, 2016,

 

27 cents per gallon on gasoline.

 

     (iv) Beginning January 1, 2017 and through December 31, 2032,

 

34 cents per gallon on gasoline.

 

     (v) Beginning January 1, 2033 and through December 31, 2033,

 

19 cents per gallon on gasoline.

 

     (vi) Beginning January 1, 2034, zero cents per gallon on

 

gasoline.

 

     (b) Except as otherwise provided in subdivision (d), 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.

 

     (b) Except as otherwise provided in subdivision (c), as

 

follows:

 

     (i) Through September 30, 2015, 15 cents per gallon on diesel

 

fuel.

 

     (ii) Beginning October 1, 2015 and through December 31, 2015,

 

21 cents per gallon on diesel fuel.

 

     (iii) Beginning January 1, 2016 and through December 31, 2016,

 

27 cents per gallon on diesel fuel.

 

     (iv) Beginning January 1, 2017 and through December 31, 2032,

 

34 cents per gallon on diesel fuel.

 

     (v) Beginning January 1, 2033 and through December 31, 2033,

 

19 cents per gallon on diesel fuel.

 

     (vi) Beginning January 1, 2034, zero cents per gallon on

 

diesel fuel.

 

     (c) Beginning with the rate effective on January 1, 2018 and

 

January 1 of each year thereafter through December 31, 2032, the

 

department shall determine a cents-per-gallon rate on motor fuel

 

that shall be derived by multiplying the cents per gallon rate in

 

effect during the immediately preceding calendar year by 1 plus the

 

lesser of 0.05 or the inflation rate and rounding up the product to

 

the nearest 1/10 of a cent.

 

     (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 a facility in this state that produce produces motor

 

fuel and distribute distributes the fuel from a rack for purposes

 

of this act are is a terminal, and shall obtain a terminal operator

 

license, and shall comply with all terminal operator reporting

 

requirements under this act. All A position holders holder in these

 

facilities a facility 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.

 

     (8) Beginning with the rate in effect on January 1, 2018 and

 

January 1 of each year thereafter, the department shall publish

 

notice of the tax rate under this section not later than 30 days

 

before the effective date of the rate.

 

     (9) A determination by the department of the consumer price

 

index, the inflation rate, or the tax rate under this section is

 

presumed correct and shall not be set aside unless an

 

administrative tribunal or a court of competent jurisdiction finds

 

the department's determination to be clearly erroneous.

 

     (10) No later than October 1, 2015, the state transportation

 

department shall form a special internal task force specifically

 

named the 50 year roads task force. The purpose of the task force

 

shall be to create a comprehensive public report that includes all

 

of the following:

 

     (a) Evaluates road materials and construction methods that,

 

when implemented, could allow the state transportation department

 

to build high-quality roads in this state that last longer than

 

those typically constructed by the state transportation department,

 

with a goal of roads lasting at least 50 years, higher quality

 

roads, and reduced maintenance costs.

 

     (b) Focuses on materials and processes that may cost more in

 

initial up-front spending but that still produce life-cycle

 

construction and maintenance savings. The state transportation

 

department shall strive to achieve a reduction of at least 50% in

 

its net present value 50-year life cycle costs as compared to the

 

commensurate net present value 50-year life cycle costs for road

 

construction and maintenance costs from 2015, in a manner that

 

results in no state roads being rated in poor condition and has no

 

net degradation from overall 2015 level pavement surface evaluation

 

and rating (PASER) scores within the plan's first 10 years.

 

     (c) Focuses on longer-term time frames that seek to maximize

 

value to the taxpayers of this state on a total cost basis,

 

regardless of funding or financing considerations.

 

     (11) Not later than December 1, 2015, the state transportation

 

department shall finalize and make public the report described in

 

subsection (10). The task force shall present that report at a

 

public hearing before a joint committee hearing of the standing

 

committees of the senate and house of representatives with primary

 

responsibility for transportation issues called by the chairs.

 

     (12) Not later than July 1, 2016, the task force shall update

 

the report described in subsection (10) to provide suggested

 

boilerplate language which coincides with how the state

 

transportation department will execute the plan and attempt to

 

achieve the targets described in subsection (10). The plan shall

 

include sufficient detail to allow the legislature to monitor and

 

track progress, estimate how long it is expected to take to achieve

 

targets, and project what the inflation adjusted reduction in

 

annual spending will be once fully implemented as compared to the

 

costs associated with 2015.

 

     Sec. 22. (1) The tax imposed on gasoline shall be in lieu of

 

all other taxes imposed or to be imposed upon the sale or use of

 

gasoline by the this state or any political subdivision of this

 

state except for the taxes imposed by the general sales tax act,

 

1933 PA 167, MCL 205.51 to 205.78, and the use tax act, 1937 PA 94,

 

MCL 205.91 to 205.111.

 

     (2) The tax imposed on diesel fuel and alternative fuel shall

 

be imposed in lieu of all other taxes imposed or to be imposed upon

 

the sale or use of diesel fuel or alternative fuel by the this

 

state or a political subdivision of the this state, except the

 

taxes imposed by the general sales tax act, 1933 PA 167, MCL 205.51

 

to 205.78, the use tax act, 1937 PA 94, MCL 205.91 to 205.111, and

 

the motor carrier fuel tax act, 1980 PA 119, MCL 207.211 to

 

207.234. The exception for taxes imposed by the general sales tax

 

act, 1933 PA 167, MCL 205.51 to 205.78, and the use tax act, 1937

 

PA 94, shall MCL 205.91 to 205.111, does not apply to diesel fuel

 

used in passenger vehicles of a capacity of 10 or more operated for

 

hire under a certificate issued by the state transportation

 

department. As used in this subsection, "alternative fuel" means

 

that term as defined in section 151.

 

     Sec. 40. (1) A person may seek a refund for tax paid under

 

this act on motor fuel or alternative fuel that is 1 or more of the

 

following:

 

     (a) Accidentally contaminated by dye or another contaminant,

 

including but not limited to gasoline that is mixed with diesel

 

fuel, if the resulting product cannot be used to operate a motor

 

vehicle on the public roads or highways without violating this act

 

or other state or federal law.

 

     (b) Accidentally lost or destroyed as a direct result of a

 

sudden and unexpected casualty loss.

 

     (2) This The refund described in subsection (1) does not apply

 

if the person seeking the refund has been reimbursed for the cost

 

of the tax by any person, including, but not limited to, an

 

insurance company, for the loss or contamination. If a person

 

seeking a refund under this section is reimbursed for any amount,

 

that person shall demonstrate to the department that the amount

 

reimbursed does not include tax paid under this act on the motor

 

fuel or alternative fuel in order to be eligible for the refund.

 

     Sec. 45. (1) An end user operating a motor vehicle with a

 

common fuel supply tank from which motor fuel or alternative fuel

 

is used both to propel the vehicle and to operate attached

 

equipment may seek a refund for tax paid under this act on diesel

 

motor fuel or alternative fuel consumed from that fuel supply tank

 

in the amount of 15% of the tax paid.

 

     (2) Notwithstanding subsection (1), an end user operating a

 

motor vehicle with a common fuel supply tank from which diesel

 

motor fuel or alternative fuel is used both to propel the vehicle

 

and to operate attached equipment may seek a refund for tax paid

 

under this act on diesel motor fuel or alternative fuel consumed

 

from that fuel supply tank in an amount that is more than 15% of

 

the tax paid if the operator provides evidence to the department

 

that a refund or deduction of more than 15% is justified. The

 

department shall determine the evidence that is necessary under

 

this section to justify a refund of more than 15% of the tax paid.

 

     (3) A refund provided under this section only applies to a

 

motor vehicle that is used by the end user exclusively for business

 

or other commercial purposes and does not apply to an automobile

 

whether or not it is used by the end user for business or other

 

commercial purposes.

 

     (4) If the department determined before the effective date of

 

this section April 1, 2001 that a class of motor vehicles with

 

attached equipment was eligible for a motor fuel refund in an

 

amount different than 15% of the tax paid, that percentage shall

 

apply applies to those motor vehicles on and after the effective

 

date of this section April 1, 2001 unless, following notice and

 

hearing, a later determination under subsection (2) is made.

 

     (5) As used in this section: , "attached equipment"

 

     (a) "Alternative fuel" means that term as defined in section

 

151.

 

     (b) "Attached equipment" means equipment used by the end user

 

in the regular course of his or her business that is powered by

 

diesel motor fuel or alternative fuel from the common fuel supply

 

tank. Attached equipment includes, but is not limited to, certain

 

pumping, spraying, seeding, spreading, shredding, lifting,

 

winching, dumping, cleaning, mixing, processing, and refrigeration

 

equipment. Attached equipment does not include a heater, air

 

conditioner, radio, or any other equipment that is used in the cab

 

of the motor vehicle and does not include any other equipment that

 

the department reasonably determines does not meet this definition.

 

     Sec. 53. (1) A person shall not engage in a business activity

 

in this state where a license is required by this act unless the

 

person is licensed under this act.

 

     (2) A person required to be licensed under this act shall

 

apply for a license on a form or in a format prescribed by the

 

department.

 

     (3) An application for a license under this act may contain

 

any information the department may reasonably require to administer

 

this act including the applicant's federal identification number.

 

     (4) The following persons currently licensed on the effective

 

date of this act April 1, 2001 are not required to obtain a new

 

license under this act and shall be considered licensed under this

 

act:

 

     (a) A person licensed in this state as a supplier on the

 

effective date of this act April 1, 2001 shall be considered

 

licensed as a supplier under this act but only if the person is a

 

terminal operator or a position holder in a terminal on the

 

effective date of this act.April 1, 2001.

 

     (b) A wholesale distributor who on the effective date of this

 

act April 1, 2001 possesses a valid exemption certificate issued

 

under former section 12 of 1927 PA 150 shall be considered licensed

 

as a fuel vendor under this act.

 

     (c) A person licensed in this state as an exporter on the

 

effective date of this act April 1, 2001 shall be considered

 

licensed as an exporter under this act.

 

     (d) A person licensed in this state as a liquid fuel hauler on

 

the effective date of this act April 1, 2001 shall be considered

 

licensed as a transporter under this act.

 

     (e) A person licensed in this state as a retail dealer of

 

diesel motor fuel on the effective date of this act April 1, 2001

 

shall be considered licensed as a retail diesel dealer under this

 

act.

 

     (5) A person considered licensed under subsection (4) is

 

subject to all of the provisions of this act except those requiring

 

an application for a new license.

 

     (6) Except as otherwise provided in this act, a person who is

 

engaged in more than 1 business activity for which a license is

 

required under this act shall be licensed for each business

 

activity.

 

     (7) A person who is licensed as a supplier is not required to

 

obtain a separate license for any other business activity for which

 

a license is required under this act except as a retail diesel

 

dealer or as an LPG alternative fuel dealer or alternative fuel

 

commercial user under sections 151 to 155.

 

     (8) A person licensed in this state as an LPG dealer on the

 

effective date of this act shall be considered licensed as an LPG

 

dealer under this act.

 

     (8) (9) A person who negligently violates this section is

 

subject to a civil penalty of $1,000.00.

 

     (9) (10) A person who knowingly violates or knowingly aids and

 

abets another to violate this section is guilty of a felony.

 

     Sec. 63. (1) If an application and the accompanying bond or

 

cash deposit, if any, are approved, the department shall issue a

 

license to the applicant.

 

     (2) A licensee shall retain a copy of its license at each of

 

its business locations unless the department waives this

 

requirement.

 

     (3) A licensee is not required to renew a license and a

 

license is valid unless and until it is suspended, canceled, or

 

revoked for cause by the department, or discontinued by the

 

licensee. However, the department may require a licensee to update

 

the information required under section 53 or 153.

 

     (4) The department shall maintain a list containing the name

 

and address of each person licensed under this act. The department

 

may post the list on the department's website. The department shall

 

regularly update the list in order to reflect the current status of

 

a licensee.

 

     Sec. 122. (1) A person shall not operate or maintain a motor

 

vehicle on the public roads or highways of this state with dyed

 

diesel fuel in the vehicle's fuel supply tank.

 

     (2) This section does not apply to dyed diesel fuel used in

 

any of the following:

 

     (a) A motor vehicle owned and operated or leased and operated

 

by the federal or state government or a political subdivision of

 

this state.

 

     (b) A motor vehicle used exclusively by the American red

 

cross.

 

     (c) An implement of husbandry.

 

     (d) A passenger vehicle that has a capacity of 10 or more and

 

that operates over regularly traveled routes expressly provided for

 

in 1 or more of the following that applies to the passenger

 

vehicle:

 

     (i) A certificate of authority issued by the state

 

transportation department.

 

     (ii) A municipal franchise.

 

     (iii) A municipal license.

 

     (iv) A municipal permit.

 

     (v) A municipal agreement.

 

     (vi) A municipal grant.

 

     (3) An owner, operator, or driver of a vehicle who uses dyed

 

diesel fuel on the public roads or highways of this state is

 

subject to a civil penalty of $200.00 $1,000.00 for each of the

 

first 2 violations within a 12-month period. For a third violation

 

within a 12-month period, and violation, and a civil penalty of

 

$5,000.00 for each subsequent violation. thereafter, the person is

 

subject to a civil penalty of $5,000.00. An owner, operator, or

 

driver of a motor vehicle who knowingly violates the prohibition

 

against the sale or use of dyed diesel fuel upon the public roads

 

or highways of this state is subject to a civil penalty equal to

 

that imposed by section 6714 of the internal revenue code.

 

     Sec. 143. (1) Except as otherwise provided in subsection (2)

 

or in section 142, all sums of money received and collected under

 

this act, except for license fees, and after the payment of the

 

necessary expenses incurred in the enforcement of this act, are

 

appropriated to and shall be deposited in the state treasury to the

 

credit of the Michigan transportation fund created in section 10 of

 

1951 PA 51, MCL 247.660.

 

     (2) The amount of money received and collected attributable to

 

taxes imposed under section 8(1) in excess of 27 cents per gallon

 

on gasoline, excluding any adjustment described in section 8(1)(c),

 

and in excess of 27 cents per gallon on diesel fuel, excluding any

 

adjustment described in section 8(1)(c), shall be deposited into

 

the state treasury to the credit of the 50-year roads lock box fund

 

created in subsection (3).

 

     (3) The 50-year roads lock box fund is created within the

 

state treasury. The state treasurer may receive money or other

 

assets from any source for deposit into the 50-year roads lock box

 

fund. The state treasurer shall direct the investment of the 50-

 

year roads lock box fund. The state treasurer shall credit to the

 

50-year roads lock box fund interest and earnings from fund

 

investments. Money in the 50-year roads lock box fund at the close

 

of the fiscal year shall remain in the 50-year roads lock box fund

 

and shall not lapse to the general fund. The department of treasury

 

shall be the administrator of the fund for auditing purposes. The

 

department of treasury shall expend money from the fund only after

 

each house of the legislature approves a 1-time concurrent

 

resolution on a record roll call vote to release money in the 50-

 

year roads lock box fund. Once released by the 1-time concurrent

 

resolution, money in the 50-year roads lock box fund, upon

 

appropriation, shall only be used for the specific higher quality,

 

longer life cycle road construction described in the comprehensive

 

public report created in section 8(10) and (12).

 

     Sec. 151. As used in this section and sections 152 to 155:

 

     (a) "Alternative fuel" means a gas, liquid, or other fuel

 

that, with or without adjustment or manipulation such as adjustment

 

or manipulation of pressure or temperature, is capable of being

 

used for the generation of power to propel a motor vehicle,

 

including, but not limited to, natural gas, compressed natural gas,

 

liquefied natural gas, liquefied petroleum gas, hydrogen, hydrogen

 

compressed natural gas, or hythane. Alternative fuel does not

 

include motor fuel, electricity, leaded racing fuel, or an excluded

 

liquid.

 

     (b) "Alternative fuel commercial user" means a commercial or

 

other business enterprise or entity that is a consumer or end user

 

of alternative fuel to propel a motor vehicle on the public roads

 

and highways of this state. Alternative fuel commercial user does

 

not include a person licensed as an alternative fuel dealer under

 

section 153.

 

     (c) "Alternative fuel dealer" means a person that is licensed

 

or required to be licensed under section 153, that is in the

 

business of selling at retail alternative fuel, and that uses

 

alternative fuel as described in subdivision (j).

 

     (d) "Alternative fuel filling station" means a machine or

 

other device located within this state that is supplied with

 

alternative fuel and that is designed or used for placing or

 

delivering alternative fuel into the fuel supply tank of a motor

 

vehicle. As used in this subdivision, "located within this state"

 

includes, but is not limited to, all of the following locations:

 

     (i) An alternative fuel dealer's place of business.

 

     (ii) A commercial or industrial establishment or facility.

 

     (iii) A residence or residential property.

 

     (iv) A landfill licensed or required to be licensed under part

 

115 of the natural resources and environmental protection act, 1994

 

PA 451, MCL 324.11501 to 324.11554.

 

     (e) "British thermal unit" or "BTU" means the amount of heat

 

required to raise the temperature of 1 pound of water 1 degree

 

Fahrenheit.

 

     (f) "Compressed natural gas" means a mixture of hydrocarbon

 

gases and vapors that consists primarily of methane in gaseous form

 

that has been compressed for use as a fuel to propel a motor

 

vehicle.

 

     (g) "Gallon equivalent" means 1 of the following or its metric

 

equivalent:

 

     (i) For compressed natural gas, 5.660 pounds or 126.67 cubic

 

feet at 60 degrees Fahrenheit and 1 atmosphere of pressure.

 

     (ii) For hydrogen, the volume or weight that is equal to

 

128,450 BTUs. For purposes of this subdivision, there are 27,000

 

BTUs per 100 standard cubic feet, and 480.11 standard cubic feet

 

per gallon equivalent.

 

     (iii) For hydrogen compressed natural gas, the volume or

 

weight that is equal to 128,450 BTUs. For purposes of this

 

subdivision, there are 79,800 BTUs per 100 standard cubic feet, and

 

162.44 standard cubic feet per gallon equivalent.

 

     (iv) For liquefied natural gas, 6.060 pounds.

 

     (h) "Liquefied natural gas" means methane or natural gas in

 

the form of a cryogenic or refrigerated liquid that is suitable for

 

use or used as fuel to propel a motor vehicle.

 

     (i) (a) "Liquefied petroleum gas" means gases derived from

 

petroleum or natural gases which that are in the gaseous state at

 

normal atmospheric temperature and pressure, but which that may be

 

maintained in the liquid state at normal atmospheric temperature by

 

suitable pressure. Liquefied petroleum gas includes those products

 

predominately composed of propane, propylene, butylene, butane, and

 

similar products. Liquefied petroleum gas does not include

 

compressed natural gas, liquefied natural gas, hydrogen, or

 

hythane.

 

     (b) "LPG dealer" means a person who is licensed under this

 

chapter to use liquefied petroleum gas.

 

     (j) (c) "Use", "used", or "uses" means any of the following:

 

     (i) Selling or delivering liquefied petroleum gas alternative

 

fuel not otherwise subject to tax under this act, either by placing

 

it into a permanently attached fuel supply tank of a motor vehicle,

 

or exchanging or replacing of the fuel supply tank of a motor

 

vehicle.

 

     (ii) Delivery of liquefied petroleum gas alternative fuel into

 

storage, devoted exclusively to the storage of liquefied petroleum

 

gas alternative fuel to be consumed in motor vehicles on the public

 

roads or highways of this state.

 

     (iii) Withdrawing liquefied petroleum gas alternative fuel

 

from the cargo tank of a truck, trailer or semi-trailer for the

 

operation of a motor vehicle upon the public roads and highways of

 

this state, whether used in vapor or liquid form.

 

     (iv) Placing or delivering alternative fuel into the fuel

 

supply tank of a motor vehicle by or through the operation of an

 

alternative fuel filling station, exchanging or replacing an

 

alternative fuel supply tank of a motor vehicle with another

 

alternative fuel supply tank of a motor vehicle filled with

 

alternative fuel, or by any other means not involving the delivery,

 

receipt, or purchase of alternative fuel from an alternative fuel

 

dealer or any other means not otherwise described in subparagraphs

 

(i) to (iii).

 

     Sec. 152. (1) A Except as otherwise provided in this section

 

and sections 154 and 155, a tax at a the rate of 15 cents per

 

gallon equal to the tax on motor fuel is imposed upon all liquefied

 

petroleum gas alternative fuel used in this state. The Except as

 

provided in section 154 or 155, the tax shall be paid at the times

 

and in the manner specified in this section. The tax on liquefied

 

petroleum gas alternative fuel sold or delivered either by placing

 

it into a permanently attached fuel supply tank on a motor vehicle,

 

or by exchanging or replacing the fuel supply tank of a motor

 

vehicle, shall be collected by the LPG alternative fuel dealer from

 

the purchaser, consumer, or end user and paid over quarterly

 

monthly to the department as provided in this act. Liquefied

 

petroleum gas Alternative fuel delivered in this state into the

 

storage facility of any person when the exclusive purpose of the

 

storage facility is for resale or use in a motor vehicle on the

 

public roads or highways of this state, shall, upon delivery to

 

storage facility, be subject to tax. An LPG alternative fuel dealer

 

shall, upon delivery of the liquefied petroleum gas, alternative

 

fuel, collect and remit the tax to the department as provided in

 

this act. A person shall not operate a motor vehicle on the public

 

roads or highways of this state from the cargo containers of a

 

truck, trailer, or semitrailer with liquefied petroleum gas

 

alternative fuel in vapor or liquid form, as applicable, except

 

when the alternative fuel in the liquid or vapor phase is withdrawn

 

from the cargo container for use in motor vehicles through a

 

permanently installed and approved metering device. The tax on

 

liquefied petroleum gas alternative fuel withdrawn from a cargo

 

container through a permanently installed and approved metering

 

device shall apply in accordance with measured gallons or gallon

 

equivalents, if applicable, as reflected by meter reading, and

 

shall be paid quarterly monthly by the LPG alternative fuel dealer

 

to the department as provided in this act.

 

     (2) The rate of tax on the following alternative fuels shall

 

be equal to the tax on motor fuel per gallon equivalent or

 

fractional part thereof rounded to the nearest 1/10 of 1 gallon:

 

     (a) Compressed natural gas.

 

     (b) Hydrogen.

 

     (c) Hydrogen compressed natural gas.

 

     (d) Liquefied natural gas.

 

     (3) The tax imposed under this section does not apply to an

 

alternative fuel commercial user described in section 154(2) until

 

January 1, 2016.

 

     (4) The tax imposed under this section does not apply to a

 

person described in section 154(3) until January 1, 2017.

 

     Sec. 153. (1) A person shall not act as an LPG alternative

 

fuel dealer or an alternative fuel commercial user unless the

 

person is licensed under this act.

 

     (2) To obtain a license as an alternative fuel dealer or an

 

alternative fuel commercial user, an applicant shall file with the

 

department an application upon a form or in a format prescribed by

 

the department. The application shall include the name and address

 

of the applicant and of each place of business to be operated by

 

the applicant at which liquefied petroleum gas alternative fuel

 

will be used and other information the department may reasonably

 

require.

 

     (3) At the time of applying for the license, an applicant for

 

an alternative fuel dealer license shall pay to the department a

 

license fee of $50.00.$500.00.

 

     (4) At the time of applying for the license, an applicant for

 

an alternative fuel commercial user license shall pay to the

 

department a license fee of $50.00.

 

     (5) (4) An applicant for an LPG dealer a license or a licensee

 

under this section is subject to the general licensing and bonding

 

requirements of this act.

 

     (5) A person licensed in this state as an LPG dealer on the

 

effective date of this act shall be considered licensed as an LPG

 

dealer under this act.

 

     Sec. 154. (1) For the purpose of determining the amount of tax

 

payable to the department, an LPG alternative fuel dealer shall, on

 

or before the twentieth day of each calendar month, following the

 

close of the reporting calendar quarter, file with the department

 

on a form or in a format prescribed by the department a report

 

which shall include that includes the number of gallons or gallon

 

equivalents, if applicable, of liquefied petroleum gas alternative

 

fuel used by the LPG alternative fuel dealer during the preceding

 

calendar quarter, month, together with any other information the

 

department may require. An LPG alternative fuel dealer at the time

 

of filing the report shall pay to the department at the time of

 

filing the report the full amount of the tax owed.

 

     (2) Beginning on January 1, 2016, for the purpose of

 

determining the amount of tax owed to the department, an

 

alternative fuel commercial user that uses alternative fuel as

 

described in section 151(j) upon which the tax imposed under

 

section 152 has not been collected by or paid to an alternative

 

fuel dealer shall, on or before the twentieth day of each month,

 

file with the department a report that includes the number of

 

gallons or gallon equivalents, if applicable, of the alternative

 

fuel described in this subsection that was used or consumed by the

 

alternative fuel commercial user during the preceding calendar

 

month, together with any other information the department requires.

 

An alternative fuel commercial user shall pay the full amount of

 

the tax due to the department at the time of filing the required

 

report.

 

     (3) Beginning on January 1, 2017, for the purpose of

 

determining the amount of tax owed to the department, a person that

 

is not an alternative fuel dealer or an alternative fuel commercial

 

user shall pay the tax imposed under section 152 on alternative

 

fuel placed into a motor vehicle fuel supply tank from an

 

alternative fuel filling station for which the tax has not been

 

collected by or paid to an alternative fuel dealer, and shall file

 

with the department on or before the twentieth day following the

 

end of each quarter a form that indicates the number of gallons or

 

gallon equivalents, if applicable, used or consumed by that person

 

during the preceding calendar quarter. A person described in this

 

subsection shall pay to the department the full amount of the tax

 

due at the time of filing the required form.

 

     (4) Except as otherwise provided in this section, a person

 

that uses alternative fuel for a taxable purpose and does not pay

 

the tax imposed under this section shall pay to the department the

 

tax imposed under section 152, along with any applicable penalties

 

or interest, at the time and in the manner prescribed by the

 

department.

 

     Sec. 155. (1) Each of the following persons is entitled to a

 

refund of the tax on liquefied petroleum gas imposed by this act:

 

     (1) (a) A person consuming liquefied petroleum gas alternative

 

fuel for any purpose other than the operation of to operate a motor

 

vehicle on the public roads or highways of this state may seek a

 

refund of the tax on alternative fuel imposed by this act,

 

including a refund as provided in section 45, if that person has

 

already paid the tax imposed under section 152 on that alternative

 

fuel.

 

     (b) The federal government, state government, or a political

 

subdivision of this state consuming liquefied petroleum gas in a

 

motor vehicle owned and operated or leased and operated by the

 

federal government, state government, or political subdivision of

 

this state.

 

     (c) A person consuming liquefied petroleum gas in the

 

operation of a passenger vehicle of a capacity of 5 or more under a

 

municipal franchise, license, permit, agreement, or grant, upon

 

which gas the tax imposed by this section has been paid.

 

     (2) To obtain a refund under this section, a person shall file

 

a claim with the department within 18 months after the date of

 

purchase, as shown on the invoice and shall comply with the

 

requirements set forth in section 48.

 

     (3) A claim for refund under this section shall be on a form

 

or in a format prescribed by the department and shall have attached

 

the original invoice that was provided to the purchaser.

 

     (4) An alternative fuel is exempt from the tax imposed by this

 

act and the tax imposed by this act shall not be collected by an

 

alternative fuel dealer if any of the following apply:

 

     (a) The alternative fuel is sold directly by an alternative

 

fuel dealer to the federal government, the state government, or a

 

political subdivision of this state for use in a motor vehicle

 

owned and operated or leased and operated by the federal

 

government, state government, or political subdivision of this

 

state.

 

     (b) The alternative fuel is sold directly by an alternative

 

fuel dealer to a nonprofit, private, parochial, or denominational

 

school, college, or university and is used in a school bus owned

 

and operated or leased and operated by the educational institution

 

that is used in the transportation of students to and from the

 

institution or to and from school functions authorized by the

 

administration of the institution.

 

     (c) The alternative fuel is imported into this state in the

 

fuel supply tank of a motor vehicle used solely for noncommercial

 

purposes, if the aggregate capacity of the motor vehicle's fuel

 

supply tank does not exceed 30 gallons or the equivalent of 30

 

gallons.

 

     (5) Both of the following are exempt from the tax on

 

alternative fuel imposed by this act:

 

     (a) The federal government, state government, or a political

 

subdivision of this state consuming alternative fuel in a motor

 

vehicle owned and operated or leased and operated by the federal

 

government, state government, or a political subdivision of this

 

state.

 

     (b) A nonprofit, private, parochial, or denominational school,

 

college, or university consuming alternative fuel in a school bus

 

owned and operated or leased and operated by the institution when

 

the alternative fuel is consumed by the school bus while

 

transporting students to and from the institution or to and from

 

school functions authorized by the administration of the

 

institution.

 

     (6) (4) A person who that sells liquefied petroleum gas

 

alternative fuel shall provide the purchaser with an invoice or

 

receipt showing the amount expressed in gallons or gallon

 

equivalents, as applicable, of gas alternative fuel purchased, the

 

date of purchase, and the amount of tax paid.

 

     (7) An alternative fuel dealer that sells alternative fuel at

 

retail shall clearly list in plain view of the customer the price

 

of the alternative fuel in gallon equivalents, as applicable, on

 

the alternative fuel filling station and any other markings or

 

information required by law.

 

     (8) Except as otherwise provided in this section, a person

 

that uses or consumes alternative fuel for a taxable purpose and

 

does not pay the tax imposed under section 154 is liable for the

 

payment of that tax and shall pay to the department the tax imposed

 

under section 152 and any applicable penalties or interest, at the

 

time and in the manner prescribed by the department.

 

     Enacting section 1. Section 38 of the motor fuel tax act, 2000

 

PA 403, MCL 207.1038, is repealed.

 

     Enacting section 2. This amendatory act takes effect October

 

1, 2015.

 

     Enacting section 3. This amendatory act does not take effect

 

unless all of the following bills of the 98th Legislature are

 

enacted into law:

 

     (a) Senate Bill No. 414.

 

     (b) House Bill No. 4612.

 

     (c) House Bill No. 4613.

 

     (d) House Bill No. 4614.

 

     (e) House Bill No. 4616.