2007 Montana Legislature

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SENATE BILL NO. 530

INTRODUCED BY J. BRUEGGEMAN

 

A BILL FOR AN ACT ENTITLED: "AN ACT REVISING SPECIAL FUEL TAX LAWS; DEFINING "BIODIESEL PRODUCER"; PROVIDING THAT A BIODIESEL PRODUCER OF LESS THAN 400 GALLONS OF BIODIESEL IN EACH QUARTER OF A CALENDAR YEAR IS EXEMPT FROM THE SPECIAL FUELS TAX; AMENDING SECTIONS 15-70-301 AND 15-70-304, MCA; AND PROVIDING A DELAYED EFFECTIVE DATE."

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:

 

     Section 1.  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 who earns income while engaging in the business of farming or ranching and who files farm or income reports for tax purposes as required by the United States internal revenue service.

     (2)  (a) "Biodiesel" means a fuel produced from monoalkyl esters of long-chain fatty acids derived from vegetable oils, renewable lipids, animal fats, or any combination of those ingredients. The fuel must meet the requirements of ASTM D6751, also known as the Standard Specification for Biodiesel Fuel (B100) Blend Stock for Distillate Fuels, as adopted by the American society for testing and materials.

     (b)  Biodiesel is also known as "B-100".

     (3)  "Biodiesel blend" means a blend of biodiesel and petroleum diesel fuel that is at least 2% biodiesel.

     (4) "Biodiesel producer" means an entity that makes biodiesel for use in motor vehicles by separating fat from vegetable oil through a chemical transesterification process.

     (4)(5)  "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.

     (5)(6) (a) "Bulk delivery" means placing special fuel not intended for resale in storage or containers.

     (b) The term does not mean special fuel delivered into the supply tank of a motor vehicle.

     (6)(7)  "Cardtrol" or "keylock" means a 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.

     (7)(8)  "Department" means the department of transportation.

     (8)(9)  (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.

     (9)(10) (a) "Distributor" means:

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

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

     (c)(iii)  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)(iv)  an exporter.

     (b) The term does not include a biodiesel producer that makes less than 400 gallons of biodiesel per quarter of a calendar year for personal use or an unlimited amount of biodiesel for off-road use.

     (10)(11) "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.

     (11)(12) "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.

     (12)(13) "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.

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

     (14)(15) "Improperly imported fuel" means special fuel that is:

     (a)  consigned to a Montana destination and imported into the state without the distributor first having obtained a Montana special fuel distributor license as required in 15-70-341; or

     (b)  delivered, possessed, sold, or transferred in the state in any manner not authorized under Title 15, chapter 70.

     (15)(16) "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.

     (16)(17) "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.

     (17)(18) "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, as provided in Title 60, chapter 4, or Title 70, chapter 30; or

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

     (18)(19) "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 biodiesel and additives of all types when the additive is mixed or blended into special fuel, regardless of the additive's classifications or uses.

     (19)(20) "Special fuel dealer" means:

     (a)  a 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)  a 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)  a person who provides a 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.

     (20)(21) (a) "Special fuel user" means a person 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.

     (b)  The term does not include the U.S. government, a state, a county, an incorporated city or town, or a school district of this state, or a biodiesel producer subject to [section 3].

     (21)(22) "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 2.  Section 15-70-304, MCA, is amended to read:

     "15-70-304.  Bonding, release of surety, and additional bond. (1) Except as provided in this section, a special fuel user's permit may not be issued to a person or continued in force unless the person has furnished a bond, as defined in 15-70-301 and in a form as the department may require, to secure its compliance with this part and the payment of any taxes, interest, and penalties due and to become due under this part. The department shall waive the bond requirement of a special fuel user not subject to the provisions of subsection (2)(a) or (2)(b).

     (2)  The total amount of the bond or bonds required of a special fuel user must be equivalent to twice the special fuel user's estimated quarterly tax payments as provided in this part, determined as the department considers proper. However, the total amount of the bond or bonds may not be less than:

     (a)  $5,000 for a special fuel user awarded a contract in accordance with 15-70-321; and

     (b)  $500 for any other special fuel user who:

     (i)  requests a special fuel user's permit to be reissued after being canceled for cause; or

     (ii) fails to file timely reports and pay tax due as required by 15-70-325 and 15-70-327.

     (3)  A surety on a bond furnished by a special fuel user, as provided in this section, must be released and discharged from any liability to the state accruing on the bond after the expiration of 30 days from the date when the surety has lodged with the department a written request to be released and discharged, but this provision may not operate to relieve, release, or discharge the surety from any liability already accrued or that accrues before the expiration of the 30-day period. The department shall, promptly upon receiving a release request, notify the special fuel user who furnished the bond, and unless the special fuel user, on or before the expiration of the 30-day period, files a new bond in accordance with the requirements of this section or makes a deposit in lieu of a bond as provided in 15-70-301(4)(5), the department shall cancel the special fuel user's permit.

     (4)  The department may require a special fuel user to give a new or additional surety bond or to deposit additional securities of the character specified in 15-70-301(4)(5) if, in its opinion, the security of the surety bond previously filed by the special fuel user or the market value of the properties deposited as security by the special fuel user becomes impaired or inadequate. Upon failure of the special fuel user to give a new additional surety bond or to deposit additional securities within 30 days after being requested to do so by the department, the department shall cancel the permit."

 

     NEW SECTION.  Section 3.  Biodiesel production for personal and off-road use. (1) A biodiesel producer that produces less than 400 gallons of biodiesel per quarter in a calendar year for personal use is not required to pay the special fuel tax provided for in 15-70-321 or the petroleum storage tank cleanup fee provided for in 75-11-314.

     (2) A biodiesel producer that produces an unlimited amount of biodiesel for off-road use is not required to pay the special fuel tax provided for in 15-70-321 or the petroleum storage tank cleanup fee provided for in 75-11-314.

 

     NEW SECTION.  Section 4.  Effective date. [This act] is effective January 1, 2008.

- END -

 


Latest Version of SB 530 (SB0530.01)
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