HOUSE BILL NO. 5570
A bill to amend 2000 PA 403, entitled
"Motor fuel tax act,"
by amending sections 2, 3, and 8 (MCL 207.1002, 207.1003, and 207.1008), as amended by 2015 PA 176.
the people of the state of michigan enact:
(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 that 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plant" means a motor fuel storage and distribution facility that is not a terminal and from which motor fuel may be withdrawn by a tank wagon, a transport truck, or a marine vessel.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.
(l) (m) "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.
(m) (n) "Denaturants" means 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.
(n) (o) "Department" means the department of treasury or its designee.
(o) (p) "Destination state" means a state, Canadian province or territory, or foreign country to which motor fuel is directed for export.
(p) (q) "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.
(q) (r) "Dyed diesel fuel" means diesel fuel that is dyed in accordance with internal revenue service Internal Revenue Service rules or pursuant to any other internal revenue service Internal Revenue Service requirements, including any invisible marker requirements.
(r) (s) "Eligible purchaser" means a person who has been authorized by the department under section 75 to make an election under section 74.
(s) (t) "Excluded liquid" means that term as defined in 26 CFR 48.4081-1.
(t) (u) "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.
(u) (v) "Exporter" means a person who exports motor fuel.
(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 standard in effect on 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 if 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 if authorized by the department.
(e) "Gasohol" means a blended motor fuel composed of gasoline and fuel grade ethanol.
(f) "Gasoline" means 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 in this subdivision, regardless of their name or characteristics, shall is 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) "Implement of husbandry" means a farm tractor, a vehicle designed to be drawn or pulled by a farm tractor or animal, a vehicle that directly harvests farm products, 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) "Import" means to bring motor fuel into this state by motor vehicle, marine vessel, pipeline, or any other means. 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 outside of this state by or for the purchaser constitutes an import by the purchaser.
(j) "Importer" means a person who imports motor fuel into this state.
(k) "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.
(l) (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.
(m) (n) "Invoiced gallons" means the number of gallons actually billed on an invoice.
Sec. 8. (1) 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), For gasoline, as follows:
(i) Through December 31, 2016, 19 cents per gallon on gasoline.
(ii) Beginning January 1, 2017, 26.3 cents per gallon on gasoline.
(b) Except as otherwise provided in subdivision (c), For diesel fuel, as follows:
(i) Through December 31, 2016, 15 cents per gallon on diesel fuel.
(ii) Beginning January 1, 2017, 26.3 cents per gallon on diesel fuel.
(c) Beginning with the rate effective on January 1, 2022 and January 1 of each year thereafter, 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 is 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 must 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 must be measured annually and shall apply applies 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 must identify the blended product and the correct fuel product code. The motor fuel tax rate for each product shall must be listed separately on each invoice. Licensees shall report the correct fuel product code for the blended product as required by the department. When If fuel is blended below the terminal rack, new bills of lading and invoices shall must be generated and submitted to the department upon on request. All bills of lading and invoices shall must meet the requirements provided under of this act.
(7) Notwithstanding any other provision of this act, a facility in this state that produces motor fuel and distributes the fuel from a rack for purposes of this act is a terminal, shall obtain a terminal operator license, and shall comply with all terminal operator reporting requirements under this act. A position holder in a facility shall be licensed as a supplier and shall comply with all supplier requirements under this act.
(8) Beginning with the rate in effect on January 1, 2022 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.