House Bill No. 86

Introduced By hibbard

By Request of the Department of Transportation



A Bill for an Act entitled: "An Act generally revising the gasoline and special fuel tax laws; providing for a refundable credit against a taxpayer's personal or corporate income tax; eliminating the need for special storage facilities for gasoline; simplifying the application for a refund of the gasoline or special fuel license tax; eliminating the license for selling gasoline or special fuel on which a refund may be obtained; amending sections 15-70-201, 15-70-221, 15-70-222, 15-70-223, 15-70-225, 15-70-226, 15-70-301, 15-70-356, 15-70-361, 15-70-362, 15-70-364, 15-70-365, and 75-11-314, MCA; repealing sections 15-70-203 and 15-70-342, MCA; and providing an applicability date."



Be it enacted by the Legislature of the State of Montana:



NEW SECTION. Section 1.  Credit for fuel tax refund. There is a refundable credit against the taxes otherwise due under 15-30-103 allowable to a person for the tax paid on gasoline or special fuel that is used off the public highways and streets for agricultural use. The credit cannot exceed the tax paid on the gallons of gasoline or special fuel calculated using the standard deduction amount. The credit must be computed in accordance with the provisions of Title 15, chapter 70.



NEW SECTION. Section 2.  Credit for fuel tax refund. There is a refundable credit against the taxes otherwise due under 15-31-101 allowable to a person for the tax paid on gasoline or special fuel that is used off the public highways and streets for agricultural use. The credit cannot exceed the tax paid on the gallons of gasoline or special fuel calculated using the standard deduction amount. The credit must be computed in accordance with the provisions of Title 15, chapter 70.



Section 3.  Section 15-70-201, MCA, is amended to read:

"15-70-201.   Definitions. As used in this part, unless the context requires otherwise, the following definitions apply:

(1)  "Agricultural use" means use of gasoline by a person whose major endeavor and primary source of earned gross income is from the business of farming or ranching through a sole proprietorship, a partnership, a limited liability company, a limited liability partnership, or a corporation. A primary source of income means that at least 66 2/3% of a person's gross income is derived from agricultural use. The ratio is determined by dividing gross income by the person's total federal gross income, excluding losses.

(2)  "Aviation dealer" means any person in this state engaged in the business of selling aviation fuel, either from a wholesale or retail outlet, on which the license tax has been paid to a licensed distributor as provided in this section.

(3)  "Aviation fuel" means gasoline or any other liquid fuel by whatever name the liquid fuel may be known or sold, compounded for use in and sold for use in aircraft, including but not limited to any and all gasoline or liquid fuel meeting or exceeding the minimum specifications prescribed by the United States for use by its military forces in aircraft.

(4)  "Bulk delivery" means placing gasoline in storage or containers. The term does not mean gasoline delivered into the supply tank of a motor vehicle.

(5)  (a) Gasoline refined, produced, manufactured, or compounded in this state and placed in tanks, gasoline transferred from a refinery or pipeline terminal in this state and placed in tanks, or gasoline imported into this state and placed in storage at refineries or pipeline terminals is considered to be "distributed", for the purpose of this part, at the time that the gasoline is withdrawn from the tanks, refinery, or terminal storage for sale or use in this state or for the transportation to destinations in this state other than by pipeline to another refinery or pipeline terminal in this state. When withdrawn from the tanks, refinery, or terminal, the gasoline may be distributed only by a person who is the holder of a valid distributor's license.

(b)  Gasoline imported into this state, other than that gasoline placed in storage at refineries or pipeline terminals, is considered to be "distributed" after it has arrived in and is brought to rest in this state.

(6)  "Distributor" means:

(a)  any a person who engages in the business in this state of producing, refining, manufacturing, or compounding gasoline for sale, use, or distribution;

(b)  any a person who imports gasoline for sale, use, or distribution;

(c)  any a person who engages in the wholesale distribution of gasoline in this state and chooses to become licensed to assume the Montana state gasoline tax liability;

(d)  any an exporter as defined in subsection (8);

(e)  any a dealer licensed as of January 1, 1969, except a dealer at an established airport;

(f)  any a person in Montana who blends alcohol with gasoline.

(7)  "Export" means to transport out of Montana, by any means other than in the fuel supply tank of a motor vehicle, gasoline received from a refinery or pipeline terminal within Montana.

(8)  "Exporter" means any person who transports, other than in the fuel supply tank of a motor vehicle, gasoline received from a refinery or pipeline terminal in Montana to a destination outside Montana for sale, use, or consumption beyond the boundaries of this state.

(9)  (a) "Gasoline" includes:

(i) all products commonly or commercially known or sold as gasolines, including casinghead gasoline, natural gasoline, aviation fuel, and all flammable liquids composed of a mixture of selected hydrocarbons expressly manufactured and blended for the purpose of effectively and efficiently operating internal combustion engines; and

(ii) any other type of additive when the additive is mixed or blended into gasoline, regardless of the additive's classifications or uses.

(b)  Gasoline does not include special fuels as defined in 15-70-301.

(10) "Import" means to receive into any person's possession or custody first after its arrival and coming to rest at a destination within the state of any gasoline shipped or transported into this state from a point of origin outside of this state other than in the fuel supply tank of a motor vehicle.

(11) "Importer" means a person who transports or arranges for the transportation of gasoline into Montana for sale, use, or distribution in this state.

(12) "Motor vehicle" means all vehicles operated or propelled upon the public highways or streets of this state in whole or in part by the combustion of gasoline.

(13) "Person" means any person, firm, association, joint-stock company, syndicate, or corporation.

(14) "Use" means the operation of motor vehicles upon the public roads or highways of the state or of any political subdivision of the state."



Section 4.  Section 15-70-221, MCA, is amended to read:

"15-70-221.   (Temporary) Refund or credit authorized. (1) A person who purchases and uses any gasoline on which the Montana gasoline license tax has been paid for denaturing alcohol to be used in gasohol, for operating or propelling stationary gasoline engines or tractors used off the public highways and streets, or for any commercial use other than propelling vehicles upon any of the public highways or streets of this state is allowed a refund of the amount of tax paid directly or indirectly on the gasoline. The refund may not exceed the tax paid or to be paid to the state or the allowable agricultural standard deduction refund of the tax paid on the gallons of gasoline used, whichever is less. An agricultural standard deduction refund is allowed only against taxes imposed under Title 15, chapter 30 or 31. Except as provided in subsection (5) or (6), a refund is not allowed for the tax per gallon upon aviation fuel allocated to the department of transportation by 67-1-301.

(2)  A distributor who pays the gasoline license tax to this state erroneously is allowed a credit or refund of the amount of tax paid.

(3)  (a) A distributor is entitled to a credit for the tax paid to the department on those sales of gasoline with a tax liability of $200 or greater for which the distributor has not received consideration from or on behalf of the purchaser and for which the distributor has not forgiven any liability. The distributor may not have declared the accounts of the purchaser worthless more than once during a 3-year period, and the distributor must have claimed those accounts as bad debts for federal income tax purposes.

(b)  If a credit has been granted under this subsection (3), any amount collected on the accounts that were declared worthless must be reported to the department and the tax due must be prorated on the collected amount and must be paid to the department.

(c)  The department may require a distributor to submit periodic reports listing accounts that are delinquent for 90 days or more.

(4)  A person who purchases and exports for sale, use, or consumption outside Montana gasoline on which the Montana gasoline tax has been paid is entitled to a credit or refund of the amount of tax paid unless the person is not licensed and is not paying the tax to the state that the fuel is destined for. The credit or refund will must be made upon completion of the information reports required under 15-70-209 and presentation to the department of proof of delivery outside Montana as it may by rule require.

(5)  A scheduled passenger air carrier certified under 14 CFR, part 121 or 135, may claim a refund of 2 cents on each gallon of aviation fuel purchased by the carrier on which the Montana gasoline license tax has been paid.

(6)  A Montana refinery or distributor who sells JP-4 or JP-8 jet fuel to the federal defense fuel supply center is entitled to a credit or refund of 2 cents a gallon for each gallon that is sold to the supply center and on which the gasoline license tax has been paid. (Terminates on occurrence of contingency--sec. 17, Ch. 642, L. 1993.)

15-70-221.   (Effective on occurrence of contingency) Refund or credit authorized. (1) A person who purchases and uses any gasoline on which the Montana gasoline license tax has been paid for denaturing alcohol to be used in gasohol, for operating or propelling stationary gasoline engines or tractors used off the public highways and streets, or for any commercial use other than propelling vehicles upon any of the public highways or streets of this state is allowed a refund of the amount of tax paid directly or indirectly on the gasoline. The refund may not exceed the tax paid or to be paid to the state or the allowable agricultural standard deduction refund of the tax paid on the gallons of gasoline used, whichever is less. An agricultural standard deduction refund is allowed only against taxes imposed under Title 15, chapter 30 or 31. Except as provided in subsection (5) or (6), a refund is not allowed for the tax per gallon upon aviation fuel allocated to the department of transportation by 67-1-301.

(2)  A distributor who pays the gasoline license tax to this state erroneously is allowed a credit or refund of the amount of tax so paid.

(3)  (a) A distributor is entitled to a credit for the tax paid to the department on those sales of gasoline with a tax liability of $200 or greater for which the distributor has not received consideration from or on behalf of the purchaser and for which the distributor has not forgiven any liability. The distributor may not have declared the accounts of the purchaser worthless more than once during a 3-year period, and the distributor must have claimed those accounts as bad debts for federal income tax purposes.

(b)  If a credit has been granted under this subsection (3), any amount collected on the accounts that were declared worthless must be reported to the department and the tax due must be prorated on the collected amount and must be paid to the department.

(c)  The department may require a distributor to submit periodic reports listing accounts that are delinquent for 90 days or more.

(4)  A person who purchases and exports for sale, use, or consumption outside Montana gasoline on which the Montana gasoline tax has been paid is entitled to a credit or refund of the amount of tax paid unless the person is not licensed and is not paying the tax to the state that the fuel is destined for. The credit or refund will must be made upon completion of the information reports required under 15-70-209 and presentation to the department of proof of delivery outside Montana as it may by rule require.

(5)  A scheduled passenger air carrier certified under 14 CFR, part 121 or 135, may claim a refund of 1 cent on each gallon of aviation fuel purchased by the carrier on which the Montana gasoline license tax has been paid.

(6)  A Montana refinery or distributor who sells JP-4 or JP-8 jet fuel to the federal defense fuel supply center is entitled to a credit or refund of 1 cent a gallon for each gallon that is sold to the supply center and on which the gasoline license tax has been paid."



Section 5.  Section 15-70-222, MCA, is amended to read:

"15-70-222.   Required records. (1) Gasoline purchased and delivered into bulk storage for use in motor vehicles on public roads and for nonhighway use must be fully accounted for by detailed withdrawal records to accurately show the manner in which the gasoline was used. Gasoline on hand, determined by actual measurement, must be deducted from a claim and must be reported as an opening inventory on the next claim.

(2)  Special storage facilities used for certain periods must be identified and explained. If special storage is used entirely for off-highway purposes and is not used in licensed vehicles, no records will be required other than purchase invoices showing the delivery into special storage.

(3)(2)  Service stations, bulk dealers, and marinas must shall prepare a separate and complete invoice for each withdrawal of gasoline for their own use upon which a refund is to be claimed.

(4)(3)  When no highway use of gasoline is deducted from the claim, the applicant shall substantiate purchases of gasoline and miles traveled for licensed motor vehicles upon request of the department of transportation or the department of revenue.

(5)(4)  Any person who operates a licensed motor vehicle on and off the public roads for commercial purposes may claim a refund of the state license tax on the gasoline used to operate the vehicle on roads or property in private ownership if the person has maintained the following records:

(a)  the total number of miles traveled on and off public roads by each licensed vehicle;

(b)  the total gallons of gasoline used in each vehicle;

(c)  purchase invoices supporting all gasoline handled through bulk storage, as well as all fuels purchased at service stations or received from other sources.

(6)(5)  An exporter or any other person who transports gasoline out of Montana for sale, use, or consumption outside of Montana shall maintain detailed and contemporaneous records of withdrawal, transportation, ownership, and delivery of the gasoline to destinations outside of Montana as required by the department of transportation."



Section 6.  Section 15-70-223, MCA, is amended to read:

"15-70-223.   Estimate Standard deduction allowed for agricultural use -- seller's signed statement acceptable on keylock or cardtrol purchases. (1) An applicant whose use qualifies as agricultural use may apply for a refund of 60% of the applicable tax on the gallons of gasoline as indicated by bulk delivery invoices or by evidence of keylock or cardtrol purchases as an estimate of off-roadway use. To ensure that the applicant's use qualifies as agricultural use, the department of transportation may request from the department of revenue information on the ratio of the applicant's gross farm income to total gross income, provided that if the department of transportation gives notice to the applicant.

(2)  For purposes of application verification for requesting a refund under subsection (1), the department shall accept, as evidence of keylock or cardtrol purchases, a statement of the sale of gasoline with applicable tax that identifies the seller and the purchaser and that is signed by a licensed distributor or a person licensed under 15-70-203 from whom the gasoline was purchased.

(3)  If any invoice or evidence is either lost or destroyed, the purchaser may support his the purchaser's claim for refund by submitting an affidavit relating the circumstances of such the loss or destruction and by producing such other evidence as may be required by the department of transportation.

(4)  An applicant whose use does not qualify as agricultural use may not estimate and must maintain records as required by 15-70-222."



Section 7.  Section 15-70-225, MCA, is amended to read:

"15-70-225.   Application for refund or credit -- filing -- correction by department. (1) The application for a refund of the gasoline license tax is a signed statement, on a form furnished by the department of transportation. The application for an agricultural standard deduction refund of the gasoline license tax is a signed statement on a form furnished by the department of revenue. Except for a claim for a credit of for taxes paid on unpaid accounts or for an agricultural standard deduction refund, the form must may be accompanied verified by the original bulk delivery invoice or invoices issued to the claimant at the time of each purchase and delivery, showing the total amount of gasoline purchased or aviation fuel purchased by a certified scheduled passenger air carrier, the total amount of gasoline or aviation fuel on which a refund is claimed, and the amount of the tax claimed for refund.

(2)  A claim for a credit for taxes paid on accounts for which the distributor did not receive compensation must be accompanied by documents or copies of documents showing that the accounts were worthless and claimed as bad debts on the distributor's federal income tax return. Any further information pertaining to a claim must be furnished as required by the department.

(3)  A bulk delivery invoice issued by a dealer for a sale that does not qualify as a bulk delivery under 15-70-201 is not valid for refund purposes.

(4)  All applications for refunds must be filed with the department within 14 months after the date on which the gasoline or aviation fuel was purchased as shown by invoices or after the date on which the tax was erroneously paid. A distributor may file a claim for refund of taxes erroneously paid or for a credit for taxes paid by the distributor on unpaid accounts within 3 years after the date of payment.

(5)  If the department finds that the statement contains errors that are not fraudulently inserted, it may correct the statement and approve it as corrected or the department may require the claimant to file an amended statement.

(6) An application for the agricultural standard deduction refund of the gasoline license tax must be filed with the department of revenue on the tax return under Title 15, chapter 30 or 31. The department of revenue may require records to verify the requested refund."



Section 8.  Section 15-70-226, MCA, is amended to read:

"15-70-226.   Approval or rejection of claim. (1) The Except for the agricultural standard deduction refund, the department has 120 working days after receiving the claim to approve or reject it. If approved, the department of transportation shall issue a credit in lieu of refund for the amount of the claim if the claimant is a distributor. For all other persons, a warrant must be drawn upon the state treasurer for the amount of the claim.

(2)  If the department or the department of revenue determines that any claim has been fraudulently presented or is supported by invoice or invoices fraudulently made or altered or that any statement in the claim or affidavit is willfully false and made for the purpose of misleading, the either department shall reject the claim in full. If a claim is rejected, the either department may suspend the claimant's right to a refund for a period not to exceed 1 year."



Section 9.  Section 15-70-301, MCA, is amended to read:

"15-70-301.   Definitions. As used in this part, the following definitions apply:

(1)  "Agricultural use" means use of special fuel by a person whose major endeavor is the business of farming or ranching and whose primary source of earned gross income is from the business of farming or ranching through a sole proprietorship, a partnership, a limited liability company, a limited liability partnership, or a corporation. A primary source of income means that at least 66 2/3% of a person's gross income is derived from agricultural use. The ratio is determined by dividing gross income by the person's total federal gross income, excluding losses.

(2)  "Bond" means:

(a)  a bond executed by a special fuel user as principal with a corporate surety qualified under the laws of Montana, payable to the state of Montana, and conditioned upon faithful performance of all requirements of this part, including the payment of all taxes, penalties, and other obligations of the special fuel user arising out of this part; or

(b)  a deposit with the department by the special fuel user, under terms and conditions that the department may prescribe, of certificates of deposit or irrevocable letters of credit issued by a bank and insured by the federal deposit insurance corporation.

(3)  "Bulk delivery" means placing special fuel not intended for resale in storage or containers. The term does not mean special fuel delivered into the supply tank of a motor vehicle.

(4)  "Cardtrol" or "keylock" means any unique device intended to allow access to a special fuel dealer's unattended pump or dispensing unit for the purpose of delivery of special fuel to an authorized user of the unique device.

(5)  "Department" means the department of transportation.

(6)  (a) "Distributed" means, at the time that special fuel is withdrawn, the withdrawal from a storage tank, a refinery, or a terminal storage in this state for sale or use in this state or for the transportation other than by pipeline to another refinery in this state or a pipeline terminal in this state of the following:

(i)  special fuel refined, produced, manufactured, or compounded in this state and placed in storage tanks in this state;

(ii) special fuel transferred from a refinery or pipeline terminal in this state and placed in tanks at the refinery or terminal; or

(iii) special fuel imported into this state and placed in storage at a refinery or pipeline terminal.

(b)  When withdrawn from the storage tanks, refinery, or terminal, the special fuel may be distributed only by a person who is the holder of a valid distributor's license.

(c)  Special fuel imported into this state, other than that special fuel placed in storage at a refinery or pipeline terminal, is considered to be distributed after it has arrived in and is brought to rest in this state.

(7)  "Distributor" means:

(a)  a person who engages in the business in this state of producing, refining, manufacturing, or compounding special fuel for sale, use, or distribution;

(b)  an importer who imports special fuel for sale, use, or distribution;

(c)  a person who engages in the wholesale distribution of special fuel in this state and chooses to become licensed to assume the Montana state special fuel tax liability; and

(d)  an exporter.

(8)  "Export" means to transport out of Montana, by any means other than in the fuel supply tank of a motor vehicle, special fuel received from a refinery or pipeline terminal within Montana.

(9)  "Exporter" means a person who transports, other than in the fuel supply tank of a motor vehicle, special fuel received from a refinery or pipeline terminal in Montana to a destination outside Montana for sale, use, or consumption outside Montana.

(10) "Import" means to first receive special fuel into possession or custody after its arrival and coming to rest at a destination within the state or to first receive any special fuel shipped or transported into this state from a point of origin outside this state other than in the fuel supply tank of a motor vehicle.

(11) "Importer" means a person who transports or arranges for the transportation of special fuel into Montana for sale, use, or distribution.

(12) "Motor vehicle" means all vehicles that are operated upon the public highways or streets of this state and that are operated in whole or in part by the combustion of special fuel.

(13) "Person" includes any person, firm, association, joint-stock company, syndicate, partnership, or corporation. Whenever the term is used in any clause prescribing and imposing a fine or imprisonment, or both, as applied to a firm, association, syndicate, or partnership, it includes the partners or members and, as applied to joint-stock companies and corporations, the officers.

(14) "Public roads and highways of this state" means all streets, roads, highways, and related structures:

(a)  built and maintained with appropriated funds of the United States, the state of Montana, or any political subdivision of the state;

(b)  dedicated to public use;

(c)  acquired by eminent domain; or

(d)  acquired by adverse use by the public, jurisdiction having been assumed by the state or any political subdivision of the state.

(15) "Special fuel" means those combustible gases and liquids commonly referred to as diesel fuel or any other volatile liquid of less than 46 degrees A.P.I. (American petroleum institute) gravity test, except liquid petroleum gas, when actually sold for use in motor vehicles operating upon the public roads and highways within the state of Montana. The term special fuel includes all other types of additives when the additive is mixed or blended into special fuel, regardless of the additive's classifications or uses.

(16) "Special fuel dealer" means:

(a)  any person in the business of handling special fuel who delivers any part of the fuel into the fuel supply tank or tanks of a motor vehicle not then owned or controlled by the person;

(b)  any person who sells special fuel at a location unattended by the dealer through an unattended pump by use of a cardtrol, keylock, or similar device; or

(c)  any person who provides any facility, with or without attended services, from which more than one special fuel user obtains special fuel for use in the fuel supply tank of a motor vehicle not then controlled by the dealer.

(17) "Special fuel user" means any person other than the U.S. government, a state, or a county, an incorporated city or town, or a school district of this state who consumes in this state special fuel for the operation of motor vehicles owned or controlled by the person upon the highways of this state.

(18) "Use", when the term relates to a special fuel user, means the consumption by a special fuel user of special fuels in the operation of a motor vehicle on the highways of this state."



Section 10.  Section 15-70-356, MCA, is amended to read:

"15-70-356.   Refund or credit authorized. (1) A person who purchases and uses any special fuel on which the Montana special fuel license tax has been paid for operating stationary special fuel engines, tractors used off the public highways and streets, or for any commercial use other than operating vehicles upon any of the public highways or streets of this state is allowed a refund of the amount of tax paid directly or indirectly on the special fuel so used. The refund may not exceed the tax paid or to be paid to the state or the allowable agricultural standard deduction refund of the tax paid on the gallons of special fuel used, whichever is less. An agricultural standard deduction refund is allowed only against the taxes imposed under Title 15, chapter 30 or 31.

(2)  (a)  The United States government, the state of Montana, any other state, or any county, incorporated city, town, or school district of this state is entitled to a refund of the taxes paid on special fuel regardless of the use of the special fuel.

(b)  (i) A nonpublic school may use dyed special fuel in buses that are owned by the nonpublic school if the buses are used for the transportation of pupils solely for nonsectarian school-related purposes.

(ii) For the purposes of this subsection (2)(b), nonpublic schools are those schools that have been accredited pursuant to 20-7-102.

(3)  A distributor who pays the special fuel license tax to this state erroneously is allowed a credit or refund of the amount of tax paid.

(4)  (a)  A distributor is entitled to a credit for the tax paid to the department on those sales of special fuel with a tax liability of $200 or greater for which the distributor has not received consideration from or on behalf of the purchaser and for which the distributor has not forgiven any liability. The distributor shall may not have declared the accounts of the purchaser worthless not more than once during a 3-year period and must have claimed those accounts as bad debts for federal income tax purposes.

(b)  If a credit has been granted under subsection (4)(a), any amount collected on the accounts declared worthless must be reported to the department and the tax due must be prorated on the collected amount and must be paid to the department.

(c)  The department may require a distributor to submit periodic reports listing accounts that are delinquent for 90 days or more.

(5)  A person who purchases and exports for sale, use, or consumption outside Montana any special fuel on which the Montana special fuel tax has been paid is entitled to a credit or refund of the amount of tax paid unless the person is not licensed and is not paying the tax to the state where fuel is destined. Upon completion of the reports required under 15-70-351, the department shall authorize the credit or refund."



Section 11.  Section 15-70-361, MCA, is amended to read:

"15-70-361.   Required records. (1) Except as provided in subsection (5), special fuel purchased and delivered into bulk storage for use in motor vehicles on public roads and nonhighway use must be fully accounted for by detailed withdrawal records to accurately show the manner in which it was used. Special fuel on hand, determined by actual measurement, must be deducted from a claim and must be reported as an opening inventory on the next claim.

(2)  Service stations, bulk dealers, and marinas shall prepare a separate and complete invoice for each withdrawal of special fuel for which a refund is to be claimed.

(3)  When a highway use of special fuel is not deducted from the claim, the applicant shall substantiate purchases of special fuel and miles traveled for licensed motor vehicles upon request of the department of transportation or the department of revenue.

(4)  Any person who operates a licensed motor vehicle on and off the public roads for commercial purposes may claim refund of the state license tax on the special fuel used to operate the vehicle on roads or property in private ownership if the person has maintained the following records:

(a)  the total number of miles traveled on and off public roads by each licensed vehicle;

(b)  the total number of gallons of special fuel used in each vehicle; and

(c)  purchase invoices supporting all special fuel handled through bulk storage.

(5)  The United States government, the state of Montana, any other state, or any county, incorporated city, town, or school district of this state is not required to keep dispersal records in order to claim a refund of special fuel taxes.

(6)  An exporter or any other person who transports special fuel out of Montana for sale, use, or consumption outside Montana shall maintain detailed and current records of withdrawal, transportation, ownership, and delivery of the special fuel to destinations outside Montana as required by the department."



Section 12.  Section 15-70-362, MCA, is amended to read:

"15-70-362.   Estimate Standard deduction allowed for agricultural use -- seller's signed statement acceptable on keylock or cardtrol purchases. (1) An applicant whose use qualifies as agricultural use may apply for a refund of 60% of the applicable tax on the gallons of special fuel as indicated by bulk delivery invoices or by evidence of keylock or cardtrol purchases as an estimate of off-roadway use.

(2)  If any invoice or evidence is either lost or destroyed, the purchaser may support the purchaser's claim for refund by submitting an affidavit relating the circumstances of the loss or destruction and by producing other evidence as may be required by the department of transportation.

(3)  An applicant whose use does not qualify as agricultural use may not estimate and shall maintain records as required by 15-70-361."



Section 13.  Section 15-70-364, MCA, is amended to read:

"15-70-364.   Application for refund or credit -- filing -- correction by department. (1) The application for a refund of the special fuel license tax must be is a signed statement on a form furnished by the department. The application for an agricultural standard deduction refund of the special fuel license tax is a signed statement on a form furnished by the department of revenue. Except for a claim for a credit for taxes paid on unpaid accounts, an agricultural standard deduction refund, or taxes paid by the United States government, the state of Montana, any other state, or any county, incorporated city, town, or school district of this state, the form must may be accompanied verified by the original bulk delivery invoice or invoices issued to the claimant at the time of each purchase and delivery and must show the total amount of special fuel purchased, the total amount of special fuel on which a refund is claimed, and the amount of the tax claimed for refund. A claim for a credit for taxes paid on accounts for which the distributor did not receive compensation must be accompanied by documents or copies of documents showing that the accounts were worthless and claimed as bad debts on the distributor's federal income tax return. Any further information pertaining to a claim must be furnished as required by the department.

(2)  A bulk delivery invoice issued by a dealer for a sale that does not qualify as a bulk delivery, as defined in 15-70-301, is not valid for refund purposes.

(3)  All applications for refunds must be filed with the department within 14 months after the date on which the special fuel was purchased as shown by invoices or after the date on which the tax was erroneously paid. A distributor may file a claim for refund of taxes erroneously paid or for a credit for taxes paid by the distributor on unpaid accounts within 3 years after the date of payment.

(4)  If the department finds that the statement contains errors that are not fraudulently inserted, it may correct the statement and approve it as corrected or the department may require the claimant to file an amended statement.

(5) An application for the agricultural standard deduction refund of the special fuel license tax must be filed with the department of revenue on the tax return under Title 15, chapter 30 or 31. The department of revenue may require records to verify the requested refund."



Section 14.  Section 15-70-365, MCA, is amended to read:

"15-70-365.   Approval or rejection of claim. (1) The Except for the agricultural standard deduction refund, the department of transportation has 120 working days after receiving the claim to approve or reject it. If approved, the department shall issue a credit in lieu of refund for the amount of the claim if the claimant is a distributor;. Refunds for all other persons, a warrant must be paid by a warrant drawn upon the state treasurer for the amount of the claim.

(2)  If the department or the department of revenue determines that any claim has been fraudulently presented or is supported by invoice or invoices fraudulently made or altered or that any statement in the claim or affidavit is willfully false and made for the purpose of misleading, the either department shall reject the claim in full. If a claim is rejected, the either department may suspend the claimant's right to a refund for a period not to exceed 1 year."



Section 15.  Section 75-11-314, MCA, is amended to read:

"75-11-314.   Petroleum storage tank cleanup fee -- collection -- penalties -- warrant for distraint -- statute of limitations. (1) Except as provided in subsection (4), each distributor shall pay to the department of transportation a petroleum storage tank cleanup fee for each gallon of gasoline, aviation gasoline, special fuel, or heating oil distributed by the distributor within the state and upon which the fee has not been paid by any other distributor. The fee must equal:

(a)  1 cent for each gallon of gasoline distributed from July 1, 1989, through June 30, 1991;

(b)  0.75 cent for each gallon of gasoline distributed after July 1, 1991;

(c)(b)  0.75 cent for each gallon of aviation gasoline distributed after July 1, 1993;

(d)(c)  0.75 cent for each gallon of special fuel distributed after July 1, 1993; and

(e)(d)  0.75 cent for each gallon of heating oil distributed after July 1, 1993.

(2)  Gasoline, aviation gasoline, special fuel, and heating oil exported or sold for export out of the state must be included in the measure of a distributor's fee.

(3)  Alcohol that is blended with gasoline to be sold as gasohol is subject to the fee provided in subsection (1).

(4)  A fee may not be imposed or collected beginning on the first day of the first month in the first calendar quarter after the unobligated balance in the fund equals or exceeds $8 million. Whenever the unobligated fund balance, less claims anticipated for board approval within the next 90 days, is less than $4 million, the department of transportation shall, within 30 days, notify distributors by mail that the fee is reinstated beginning on the first day of the first month that begins no less than 30 days after the date of the notice. Once reinstated, the fee must be imposed and collected until the unobligated fund balance again equals or exceeds $8 million.

(5)  The department of transportation shall collect the fee in the same manner as the basic gasoline license tax under Title 15, chapter 70, part 2. The provisions of 15-70-103, 15-70-111, 15-70-202, 15-70-205, 15-70-206, 15-70-208 through 15-70-212, 15-70-221(2), and 15-70-232 apply to the fee. The provisions of 15-70-203, 15-70-204, 15-70-207, 15-70-221(1), and 15-70-222 through 15-70-224 do not apply to the fee."



NEW SECTION. Section 16.  Repealer. Sections 15-70-203 and 15-70-342, MCA, are repealed.



NEW SECTION. Section 17.  Codification instruction. [Sections 1 and 2] are intended to be codified as an integral part of Title 15, chapter 70, and the provisions of Title 15, chapter 70, apply to [sections 1 and 2].



NEW SECTION. Section 18.  Applicability. [This act] applies to refunds of tax paid on gasoline and special fuel purchased after December 31, 1997.

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