SENATE BILL NO. 311
INTRODUCED BY A. MOHL
A BILL FOR AN ACT ENTITLED: "AN ACT LIMITING THE ELIGIBILITY FOR GASOLINE TAX REFUNDS AND
CREDITS TO APPLICANTS WHO ARE ENGAGED IN THE BUSINESS OF FARMING OR, RANCHING, MINING,
OR OPERATING A RAILROAD; INCLUDING THE HARVESTING AND TRANSPORT OF TIMBER IN THE
DEFINITION OF "FARMING OR RANCHING" "FARMING" FOR THE PURPOSES OF GASOLINE TAX REFUNDS;
SUBMITTING TO THE ELECTORATE THE GASOLINE TAX REFUND LIMITATION; AMENDING SECTIONS
15-70-201, 15-70-221, 15-70-222, AND 15-70-223, MCA; PROVIDING A CONTINGENT VOIDNESS PROVISION;
AND PROVIDING AN EFFECTIVE DATE."
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. 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 income is from the business of farming or ranching.
(2) "Aviation dealer" means a 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or pipeline terminals is considered to be "distributed", for the purpose of this part, at the time the gasoline is withdrawn from the tanks, refinery, or terminal storage for sale or use in this state or for the transportation to destinations in this state other than by pipeline to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 When withdrawn from the tanks, refinery, or terminal, the gasoline may be distributed only by a person who is the holder of a valid distributor's license.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) a person who engages in the business in this state of producing, refining, manufacturing, or compounding gasoline for sale, use, or distribution;
(b) a person who imports gasoline for sale, use, or distribution;
(c) 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) an exporter as defined in subsection (8);
(e) a dealer licensed as of January 1, 1969, except a dealer at an established airport; or
(f) 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) "Farming or ranching" "FARMING" means earning a living producing livestock, dairy products,
poultry, fruit, or vegetables or nursery, horticultural, or agricultural commodities. For the purposes of
this part only, as it relates to fuel tax refunds, the phrase TERM also means earning a living through
harvesting timber and transporting harvested timber.
(9)(10) (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)(11) "Import" means to receive into a person's possession or custody first after its arrival and coming
to rest at destination within the state of 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)(12) "Importer" means a person who transports or arranges for the transportation of gasoline into
Montana for sale, use, or distribution in this state.
(12)(13) "Improperly imported fuel" means aviation or gasoline fuel as defined in subsections (3) and (9)
(10) that:
(a) is consigned to a Montana destination and imported into the state without the distributor first having obtained a Montana gasoline distributor license as required in 15-70-202; or
(b) is delivered, possessed, sold, or transferred in the state in any manner not authorized under Title 15, chapter 70.
(13)(14) "Motor vehicle" means all vehicles operated or propelled upon the public roads and highways or
streets of this state in whole or in part by the combustion of gasoline.
(14)(15) "Person" means any person, firm, association, joint-stock company, syndicate, or corporation.
(15)(16) "Use" means the operation of motor vehicles upon the public roads or and highways of the this
state or of any political subdivision of the state."
Section 2. Section 15-70-221, MCA, is amended to read:
"15-70-221. (Temporary) Refund or credit authorized for farming or, ranching, MINING, OR
OPERATING RAILROAD. (1) A person engaged in the business of farming or, ranching, MINING, OR
OPERATING A RAILROAD 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 roads and highways and streets of this state, or for any
commercial use other than propelling vehicles upon any of the public highways or streets of this state
operating other farming or, ranching, MINING, OR RAILROAD equipment off the public roads and highways
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. Except as provided in subsection (5) or (6) (6)
OR (7), 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 PERSON WHO PAYS A GASOLINE LICENSE TAX ON A PURCHASE OF GASOLINE THAT IS USED FOR HEATING FUEL IS ENTITLED TO A REFUND OF THE AMOUNT OF TAX PAID.
(3)(4) (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) (4), 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)(5) 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 the fuel is destined for. The credit or
refund will 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)(6) 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)(7) 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 for farming or,
ranching, MINING, OR OPERATING RAILROAD. (1) A person engaged in the business of farming or,
ranching, MINING, OR OPERATING A RAILROAD 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 roads and highways and streets of this state, or for any commercial use other
than propelling vehicles upon any of the public highways or streets of this state operating other farming or, ranching,
MINING, OR RAILROAD equipment off the public roads and highways 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. 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 the fuel is destined for. The credit or refund will 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 3. 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) Service stations, bulk dealers, and marinas must prepare a separate and complete invoice for each withdrawal of gasoline for their own use upon which a refund is to be claimed.
(4) 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.
(5) Any A person who operates a licensed motor vehicle on and off the public roads and highways of this state for
commercial the purposes of harvesting timber and transporting harvested timber may claim a refund of the state license tax
on the gasoline used to operate the vehicle on roads or property in private ownership off the public roads and highways of
this state if the person has maintained the following records:
(a) the total number of miles traveled on and off the public roads and highways of this state by each licensed vehicle;
(b) 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) 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 4. Section 15-70-223, MCA, is amended to read:
"15-70-223. Estimate allowed for agricultural use -- seller's signed statement acceptable on keylock or cardtrol
purchases. (1) An Except as provided in 15-70-222(5), 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 the department of transportation gives notice to the applicant.
(2) For purposes of application for 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 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 claim for refund by submitting an affidavit relating the circumstances of such 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 is not eligible for a refund under this part."
NEW SECTION. Section 5. Submission to electorate. This act shall be submitted to the qualified electors of Montana at the tax election to be held in 1999 by printing on the ballot the full title of this act and the following:
SHALL THE GASOLINE TAX BE INCREASED ANNUALLY BY RESTRICTING REFUNDS FOR OFF-ROAD USE
TO PERSONS ENGAGED IN THE CONSTRUCTION BUSINESS OF FARMING OR RANCHING?
[] FOR limiting ELIMINATING gasoline tax refunds to persons engaged in the CONSTRUCTION business of farming
or ranching.
[] AGAINST limiting ELIMINATING gasoline tax refunds to persons engaged in the CONSTRUCTION business of
farming or ranching.
NEW SECTION. Section 6. Contingent voidness. If Constitutional Initiative No. 75, enacting Article VIII, section 17, of the Montana constitution, is declared invalid, then sections 5 and 7(1) are void.
NEW SECTION. Section 7. Effective date. (1) If approved by the electorate, this act is effective July 1, 1999.
(2) If the contingency provided for in section 6 occurs, then this act is effective July 1, 1999.
- END -
Latest Version of SB 311 (SB0311.02)
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