UNAPPROVED DRAFT BILL -- Subject to Change Without Notice!
BILL NO.
INTRODUCED BY
(Primary Sponsor)BY REQUEST OF THE DEPARTMENT OF TRANSPORTATION
A BILL FOR AN ACT ENTITLED: "AN ACT GENERALLY REVISING THE GASOLINE TAX AND SPECIAL FUEL TAX REFUND PROCESS FOR AGRICULTURAL AND OFF-ROAD USE; ELIMINATING THE PROVISION ALLOWING A SELLER'S SIGNED STATEMENT TO BE EVIDENCE OF KEYLOCK OR CARDTROL GASOLINE PURCHASES FOR REFUND PURPOSES; EXTENDING FROM 14 MONTHS TO 36 MONTHS AFTER THE PURCHASE OF FUEL THE TIME PERIOD THAT A MOTOR FUEL REFUND APPLICATION CAN BE FILED; RECONCILING DISCREPANCIES BETWEEN GASOLINE TAX AND SPECIAL FUEL TAX PROVISIONS AND DEFINITIONS; AND AMENDING SECTIONS 7-14-301, 7-14-302, 15-70-201, 15-70-221, 15-70-222, 15-70-223, 15-70-224, 15-70-225, 15-70-231, 15-70-301, 15-70-302, 15-70-311, 15-70-321, 15-70-324, 15-70-326, 15-70-328, 15-70-330, 15-70-341, 15-70-343, 15-70-356, 15-70-361, 15-70-362, 15-70-363, 15-70-364, AND 61-8-110, MCA."
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Section 7-14-301, MCA, is amended to read:
"7-14-301. Local option motor fuel excise tax authorized. (1) A motor fuel excise tax may be imposed within a county:
(a) by the people of the county by initiative; or
(b) by the board of county commissioners by adoption of a resolution and referral to the people.
(2) The motor fuel excise tax must be imposed in increments of 1 cent per gallon and may not exceed 2 cents per
gallon. The tax must be imposed upon gasoline sold to the ultimate consumer within the county for use in motor
vehicles operated upon public highways, streets, and on public roads.
(3) The initiative or referendum must specify that the tax is to be collected by the department of transportation.
(4) The motor fuel excise tax may not be assessed sooner than 90 days from the date of passage of the initiative or referendum.
(5) Each distributor shall render a monthly statement to the department of transportation of all gasoline distributed during the preceding calendar month in the county in which it is sold to the ultimate consumer and other information that the department requires in order to administer the motor fuel excise tax.
(6) The information, recordkeeping, and examination of records provisions of Title 15, chapter 70, apply to this part.
(7) The department of transportation shall establish procedures to provide a refund to a person who has paid the
tax but who can substantiate that the motor fuel was purchased for a use other than on public highways, streets, and
roads off-road use.
(8) In this part, the terms "distributor", "gasoline", "motor vehicle", "off-road", "person", "public roads", and "use" have the meanings ascribed to them in 15-70-201."
Section 2. Section 7-14-302, MCA, is amended to read:
"7-14-302. Use of local motor fuel excise tax revenue. (1) A county or municipality receiving revenue from the
tax authorized by 7-14-301 shall use the revenue derived only for the construction, reconstruction, maintenance, and
repair of public streets and roads.
(2) A county shall contract with the department for reimbursement of the actual costs of collection. One percent of the motor fuel excise tax revenue collected in a county is to be reimbursed to the distributor for the cost of compliance with this part."
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, which includes off-road vehicle use for raising and producing stock
and agricultural commodities.
(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.
(5) "Bulk delivery invoice" means an invoice issued to a claimant for the purchase of fuel in storage.
(6) "Bulk storage" means a container, except for the supply tank of a motor vehicle or any combustible engine, that holds any fuel for storage.
(7) "Cardtrol" or "keylock" means a unique device intended to allow access to a fuel dealer's unattended pump or dispensing unit for the purpose of delivery of fuel to an authorized user of the unique device.
(8) "Department" means the department of transportation.
(9) (a) "Distributed" means, at the time that gasoline 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) gasoline refined, produced, manufactured, or compounded in this state and placed in storage tanks in this state;
(ii) gasoline transferred from a refinery or pipeline terminal in this state and placed in tanks at the refinery or terminal; or
(iii) gasoline 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 gasoline may be distributed only by a person who is the holder of a valid distributor's license.
(c) Gasoline imported into this state, other than that gasoline 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.
(6)(10) "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)(11) "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)(12) "Exporter" means any a 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 outside Montana.
(13) "Farming or ranching" means earning a living producing livestock, dairy products, poultry, fruit, or vegetables or nursery, horticultural, or agricultural commodities.
(14) "Forest development road" has the same meaning as provided in 61-8-110.
(9)(15) (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.
(16) "Gross income", for fuel tax purposes, means the applicant's federal gross income as defined in 26 U.S.C. 61.
(10)(17) "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)(18) "Importer" means a person who transports or arranges for the transportation of gasoline into Montana for
sale, use, or distribution in this state.
(12)(19) "Improperly imported fuel" means aviation fuel or gasoline fuel as defined in subsections (3) and (9) 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)(20) "Motor vehicle" means all vehicles operated or propelled upon the public highways or streets on public
roads of this state or off-road in whole or in part by the combustion of gasoline.
(21) "Off-road" means on private property or a forest development road.
(14)(22) "Person" means any a person, firm, association, trust, estate, partnership, limited liability company,
joint-stock company, syndicate, or corporation. Whenever the term is used in relation to prescribing and imposing a
fine or imprisonment, or both, as applied to a firm, association, trust, estate, limited liability company, syndicate, or
partnership, it includes the partners or members and, as applied to joint-stock companies and corporations, the officers.
(23) "Public roads" 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 with jurisdiction having been assumed by the state or any political subdivision of the state.
(24) "Supply tank" means a tank holding fuel that permanently or intermittently supplies a motor-powered vehicle.
(15)(25) "Use" means the operation of motor vehicles upon the public roads or highways on public roads of the
state or of any political subdivision of the state or off-road."
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 off-road, or for any
commercial use other than propelling operating vehicles upon any of the public highways or streets on public roads 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 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 or state 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 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
off-road, or for any commercial use other than propelling operating vehicles upon any of the public highways or streets
on public roads 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 or state 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 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 off-road 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 off-road 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 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) When no highway public road 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 off-road 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 off-road if the person has maintained the following records:
(a) the total number of miles traveled on and off public roads and off-road by each licensed vehicle;
(b) total gallons of gasoline used in each vehicle;
(c) purchase bulk delivery invoices supporting all gasoline handled through bulk storage, as well as all fuels invoices
for fuel purchased at service stations or received from all other fuel sources; and
(d) dispersal records from bulk storage.
(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 6. 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 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 off-road 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)(2) If any invoice or evidence is either lost or destroyed, the a purchaser may support his a claim for refund by
submitting an affidavit relating the circumstances of such the loss or destruction and by producing such any other
evidence as may be that is required by the department of transportation.
(4)(3) An applicant whose use does not qualify as agricultural use may not estimate and must shall maintain records
as required by 15-70-222."
Section 7. Section 15-70-224, MCA, is amended to read:
"15-70-224. Determination of highway public road use. Highway Public road use for each vehicle is determined
by dividing the average miles per gallon rate into the number of miles traveled on public roads."
Section 8. 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
refund is must be a signed statement, on a form furnished by the department of transportation. Except for a claim for a
credit of taxes paid on unpaid accounts, the form must be accompanied 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 or state 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 36 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."
Section 9. Section 15-70-231, MCA, is amended to read:
"15-70-231. Unlawful use of aviation fuel. It is unlawful for any person to A person may not use aviation fuel or
to sell aviation fuel for use in any motorized vehicle operated upon the public highways or streets on public roads of
this state. Violation of this section is a misdemeanor subject to the penalties provided in 15-70-232."
Section 10. 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, which includes
off-road vehicle use for raising and producing livestock and agricultural commodities.
(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) "Bulk delivery invoice" means an invoice issued to a claimant for the purchase of fuel in storage.
(5) "Bulk storage" means a container, except for the supply tank of a motor vehicle or any combustible engine, that holds any fuel for storage.
(4)(6) "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.
(5)(7) "Department" means the department of transportation.
(6)(8) (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)(9) "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)(10) "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)(11) "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) "Farming or ranching" means earning a living producing livestock, dairy products, poultry, fruit, or vegetables or nursery, horticultural, or agricultural commodities.
(13) "Forest development road" has the same meaning as provided in 61-8-110.
(14) "Gross income", for fuel tax purposes, means the applicant's federal gross income as defined in 26 U.S.C. 61.
(10)(15) "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)(16) "Importer" means a person who transports or arranges for the transportation of special fuel into Montana
for sale, use, or distribution.
(12)(17) "Improperly imported fuel" means special fuel as defined in subsection (16) 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.
(13)(18) "Motor vehicle" means all vehicles that are operated upon the public highways or streets on public roads of
this state or off-road and that are operated in whole or in part by the combustion of special fuel.
(19) "Off-road" means on private property or a forest development road.
(14)(20) "Person" includes any a person, firm, association, trust, estate, partnership, limited liability company,
joint-stock company, syndicate, partnership, or corporation. Whenever the term is used in any clause relation to
prescribing and imposing a fine or imprisonment, or both, as applied to a firm, association, trust, estate, limited liability
company, syndicate, or partnership, it includes the partners or members and, as applied to joint-stock companies and
corporations, the officers.
(15)(21) "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, with jurisdiction having been assumed by the state or any political
subdivision of the state.
(16)(22) "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 on public roads within the
state of Montana or off-road. 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.
(17)(23) "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.
(18)(24) "Special fuel user" means a person other than the U.S. government, a state, or a county, incorporated city
or town, or 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 on public roads of this state or off-road.
(25) "Supply tank" means a tank holding special fuel that permanently or intermittently supplies a motor-powered vehicle.
(19)(26) "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 public roads of this state or off-road."
Section 11. Section 15-70-302, MCA, is amended to read:
"15-70-302. Special fuel user's permits required -- exceptions. (1) (a) A special fuel user shall obtain a special fuel user's permit annually from the department, prior to the use of special fuel:
(i) for the operation of a motor vehicle or vehicles in this state in excess of 26,000 pounds gross vehicle weight or registered gross vehicle weight used in an interstate operation;
(ii) by a special fuel user awarded a contract in accordance with 15-70-321; or
(iii) in a vehicle permitted pursuant to an agreement adopted pursuant to 15-70-121.
(b) Except as provided in subsection (3), a special fuel user shall at all times display the original or a reproduced
copy of the permit in each special fuel vehicle operated by the special fuel user upon the on public roads and highways.
The permit or copy must be exhibited for inspection on request of any motor carrier services division employee, a
Montana highway patrol officer, an authorized employee of the department, or any other law enforcement officer. The
special fuel user is responsible for reproducing clear and legible copies of the permit.
(2) Any An out-of-state user who operates a special fuel vehicle solely for recreation or for religious, charitable,
educational, or other eleemosynary purposes shall secure a special fuel user's courtesy vehicle permit. The permit is not
transferable and is valid for 90 days. Permits must be issued at no cost to the user by the department, scale house
personnel, and gross vehicle weight patrol crews. The department may require a user who has fuel capacity in excess of
30 gallons to file a report and pay the tax on fuel used in Montana on which the tax has not been paid.
(3) A special fuel user need not display the original or reproduced copy of the special fuel user's permit, as required by subsection (1), if the special fuel user is registered and licensed pursuant to the International Fuel Tax Agreement, as authorized by 15-70-121, and the vehicle displays a license or decal issued pursuant to the agreement."
Section 12. Section 15-70-311, MCA, is amended to read:
"15-70-311. Special fuel user's temporary trip permits -- nonresident agricultural harvesting equipment
special fuel permit. (1) Any A person operating who operates a special fuel-powered vehicle over 26,000 pounds
gross vehicle weight or registered gross vehicle weight upon the on public roads and highways of this state who fails or
neglects to carry in the vehicle a valid special fuel vehicle permit, as provided by 15-70-302, is required to purchase a
special fuel user's temporary trip permit. The permits must be issued by motor carrier services division employees,
Montana highway patrol officers, and other enforcing agents that the department may prescribe by order or rule.
(2) Any A nonresident upon entering the state with agricultural harvesting equipment that is over 26,000 pounds
gross vehicle weight or registered gross vehicle weight and that is powered by special fuel and operating upon the on
public roads and highways of this state who fails or neglects to carry in or on equipment a valid special fuel vehicle
permit, as provided by 15-70-302, is required to purchase a nonresident agricultural harvesting equipment special fuel
permit. The permit must be issued by motor carrier services division employees, Montana highway patrol officers, and
other enforcing agents that the department may prescribe by order or rule."
Section 13. Section 15-70-321, MCA, is amended to read:
"15-70-321. Tax on special fuel and volatile liquids. (1) The department shall, under the provisions of rules issued by it, collect or cause to be collected from the owners or operators of motor vehicles a tax, as provided in subsection (2):
(a) for each gallon of undyed special fuel or other volatile liquid, except liquid petroleum gas, of less than 46
degrees A.P.I. (American petroleum institute) gravity test when actually sold or used to produce motor power to
operate motor vehicles upon the on public roads and highways of this state;
(b) for each gallon of special fuel or other volatile liquid, except liquid petroleum gas, of less than 46 degrees A.P.I.
(American petroleum institute) gravity test when actually sold or used in motor vehicles, motorized equipment, and the
internal combustion of any engines, including stationary engines, used in connection with any work performed under
any contracts pertaining to the construction, reconstruction, or improvement of any highway or street public roads and
their appurtenances awarded by any public agencies, including federal, state, county, municipal, or other political
subdivisions; and
(c) for each gallon of dyed special fuel delivered into the fuel supply tank of a diesel-powered highway vehicle,
regardless of weight, operating upon the on public roads and highways of this state.
(2) The tax imposed in subsection (1) is 27 3/4 cents per gallon."
Section 14. Section 15-70-324, MCA, is amended to read:
"15-70-324. Examination of records -- enforcement of part. (1) The department shall enforce the provisions of this part.
(2) The department or its authorized representative may examine the books, papers, records, and equipment of any special fuel user or any person dealing in, transporting, or storing special fuel as defined in this part and may investigate the character of the disposition that any person makes of special fuel in order to ascertain and determine whether all excise taxes due are being properly reported and paid. If the books, papers, records, and equipment are not maintained in this state at the time of demand, they must be furnished at the direction of the department for review either in the offices of the department or at the business location of the taxpayer and must be, if requested by the department, accompanied by the special fuel user.
(3) For the purpose of enforcing the provisions of this part, the fact that a special fuel user has placed or received
special fuel into storage or dispensing equipment designed to fuel motor vehicles is prima facie evidence that all of the
special fuel has been delivered by the special fuel user into the fuel supply tanks of motor vehicles and consumed in the
operation of motor vehicles upon the highways on public roads unless the contrary is established by satisfactory
evidence.
(4) The department may establish vehicle inspection sites and may stop, detain, and inspect vehicles. A person who purposely or knowingly refuses to permit an inspection authorized by this section is guilty of a misdemeanor punishable by a fine not to exceed $500 upon conviction for the first offense, not to exceed $1,000 upon conviction for the second offense, and not to exceed $2,000 for each subsequent conviction. Each refusal is a separate offense.
(5) The department shall, upon request from officials to whom are entrusted the enforcement of the special fuel tax law of any other state, the District of Columbia, the United States, its territories and possessions, or the provinces of Canada, forward to the officials any information that it may have relative to the receipt, storage, delivery, sale, use, or other disposition of special fuel by any special fuel user, provided the other state or states furnish like information to this state."
Section 15. Section 15-70-326, MCA, is amended to read:
"15-70-326. Computation. The tax imposed by this part must be computed, with respect to special fuel for which
the tax has not been paid in this state and that has been consumed by the purchaser as a special fuel user, by multiplying
the tax rate per gallon provided in this part by the number of gallons of special fuel consumed by the special fuel user in
the operation of motor vehicles on the highways of this state public roads."
Section 16. Section 15-70-328, MCA, is amended to read:
"15-70-328. Credits. A licensed special fuel user who has paid a special fuel tax either directly or to the vendor from whom it was purchased must receive credit in the amount of:
(1) the tax paid on special fuel exported for use outside of this state or for any off-road use off the public roads and
highways of this state; or
(2) overpayment of special fuel taxes not due to the state."
Section 17. Section 15-70-330, MCA, is amended to read:
"15-70-330. Special fuel penalties. (1) In the case of a special fuel user who refuses or fails to file a return
required by this part within the time prescribed by 15-70-103 and 15-70-325, there is imposed a penalty of $25 or a
sum equal to 10% of the tax due, whichever is greater, together with interest at the rate of 1% on the tax due for each
calendar month or fraction of a month during which the refusal or failure continues. However, if any a special fuel user
establishes to the satisfaction of the department that the failure to file a return within the time prescribed was due to
reasonable cause, the department shall waive the penalty provided by this section.
(2) Whenever a special fuel user files a return but fails to pay in whole or in part the tax due under this part, interest at the rate of 1% per month or fraction of a month from the date on which the tax was due to the date of payment in full must be added to the amount due and unpaid.
(3) (a) A special fuel user may not use dyed special fuel to operate a motor vehicle upon the on public roads and
highways of this state unless the fuel is subject to taxation under 15-70-321(1)(b) or the use is permitted pursuant to
rules adopted under subsection (3)(b). The purposeful or knowing use of dyed special fuel in a motor vehicle operating
upon the on public roads and highways of this state in violation of this subsection is a misdemeanor punishable by a fine
not to exceed $500 upon conviction for the first offense, not to exceed $1,000 upon conviction for the second offense,
and not to exceed $2,000 for each subsequent conviction. Each use is a separate offense.
(b) The department shall adopt and enforce reasonable rules for the movement of off-highway off-road vehicles
traveling from one location to another on public highways, public roads, or streets when using dyed fuel or nontaxed
fuel.
(4) The operator of the vehicle is liable for the tax imposed in 15-70-321. If the operator refuses or fails to pay the tax, in whole or in part, the seller of the special fuel is jointly and severally liable for the tax imposed under 15-70-321 and for the penalties described in this section if the seller knows or has reason to know that the fuel will be used for a taxable purpose."
Section 18. Section 15-70-341, MCA, is amended to read:
"15-70-341. License, fee, and security of special fuel distributors. (1) (a) All A special fuel distributors
distributor, including importers an importer and exporters an exporter as defined in 15-70-301, prior to the
commencement of doing business, shall file:
(i) an application for a license with the department, on forms prescribed and furnished by the department, setting
forth providing the information that may be requested by the department; and
(ii) security with the department in an amount to be determined by the department.
(b) The required amount of security may not exceed twice the estimated amount of special fuel taxes the distributor will pay to this state each month.
(c) Upon approval of the application, the department shall issue to the distributor a nonassignable license that continues in force until surrendered or revoked.
(2) A person who engages in the wholesale distribution of special fuel in this state exercising the option under
15-70-301(7)(c) 15-70-301(9)(c) and not already licensed under 15-70-202 shall pay an annual license fee of $200.
(3) If the distributor's license is surrendered or revoked, the distributor shall pay a reissuance fee of $100.
(4) Failure to obtain a special fuel distributor license as required in this section subjects the distributor to the provisions of 15-70-357 allowing for the seizure, confiscation, and possible forfeiture of the fuel.
(5) As used in this section, "security" means:
(a) a bond executed by a distributor 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 and penalties; or
(b) (i) a deposit made by the distributor with the department, under the conditions that the department may prescribe; or
(ii) certificates of deposit or irrevocable letters of credit issued by a bank and insured by the federal deposit insurance corporation."
Section 19. Section 15-70-343, MCA, is amended to read:
"15-70-343. Special fuel license tax -- rate. (1) Each distributor shall pay to the department of transportation a license tax for the privilege of engaging in and carrying on business in this state. The license tax is in the amount imposed under 15-70-321 for each gallon of special fuel that is distributed by the distributor within the state and upon which the special fuel license tax has not been paid by any other distributor.
(2) Special fuel may not be included in the measure of the distributor's license tax if it is:
(a) dyed at a refinery or terminal for off-highway off-road use; or
(b) sold for export, unless the distributor is not licensed and is not paying the tax to the state where the fuel is destined."
Section 20. 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, off-road or for any commercial use other than operating vehicles upon any of the public highways
or streets on public roads 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.
(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 the distributor must have claimed those
accounts as bad debts for federal or state 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 21. 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 off-road 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 no public road 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.
(4) Any A person who operates a licensed motor vehicle on and off the public roads and off-road 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 off-road if the person has maintained the following records:
(a) the total number of miles traveled on and off public roads and off-road by each licensed vehicle;
(b) the total number of gallons of special fuel used in each vehicle; and
(c) purchase bulk delivery invoices supporting all special fuel handled through bulk storage; and
(d) dispersal records from 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 22. Section 15-70-362, MCA, is amended to read:
"15-70-362. Estimate 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 off-road use.
(2) If any invoice or evidence is either lost or destroyed, the a 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 23. Section 15-70-363, MCA, is amended to read:
"15-70-363. Determination of highway public road use. Highway Public road use for each vehicle is determined
by dividing the rate of the average miles per gallon into the number of miles traveled on public roads."
Section 24. 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 must be a signed statement on a form furnished by the department. Except for a claim for a credit for taxes paid on unpaid accounts 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 be accompanied 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 or state 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 36 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."
Section 25. Section 61-8-110, MCA, is amended to read:
"61-8-110. Forest development road, special service road defined. (1) For the purpose of 15-70-201,
15-70-301, 61-8-111, and 61-8-112, a "forest development road" is defined as a road located on national forest lands
or on a right-of-way acquired by the United States and. A forest development road is built and maintained exclusively
by the United States forest service and is used for the protection, administration, and utilization of the national forests
and other lands administered by the United States forest service; and a.
(2) A "special service road" is defined as a forest development road or segment thereof, the right-of-way for which
is controlled by the United States and which of a forest development road that:
(a) is not a part of the highway system of the state or of a county or other public road authority of this state,; and
(b) is designated by the forest service, pursuant to the regulations of the secretary of the United States department of agriculture, as a special service road for the purpose of controlling and regulating its use to accomplish the purposes of the secretary of agriculture's regulations applicable to the administration of the forest development transport system."
- END -
Latest Version of LC 139 (LC0139.01)
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