Print Friendly HOUSE BILL NO. 692 – Fuel tax deductn, renewable fuel
HOUSE BILL NO. 692
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H0692...............................................by REVENUE AND TAXATION
RENEWABLE FUEL STANDARD - FUEL TAX - Amends existing law to provide that on
and after adoption of a renewable fuel standard by statute and
implementation of that standard, the deduction from the fuels tax shall
apply to those fuels not specifically included in the renewable fuel
02/16 House intro - 1st rdg - to printing
02/17 Rpt prt - to Transp
02/23 Rpt out - rec d/p - to 2nd rdg
02/24 2nd rdg - to 3rd rdg
03/01 3rd rdg - PASSED - 70-0-0
AYES -- Anderson, Andrus, Barraclough, Barrett, Bastian, Bayer,
Bedke, Bell, Bilbao, Black, Block, Boe, Bolz, Brackett, Bradford,
Cannon, Chadderdon, Clark, Collins, Crow, Deal, Denney, Edmunson,
Ellsworth, Eskridge, Field(18), Field(23), Garrett, Hart, Harwood,
Henbest, Henderson, Jaquet, Kemp, Lake, LeFavour, Loertscher,
Martinez, Mathews, McGeachin, McKague, Miller, Mitchell, Moyle,
Nielsen, Nonini, Pasley-Stuart, Pence, Raybould, Ring, Ringo,
Roberts, Rusche, Rydalch, Sali(Sali), Sayler, Schaefer, Shepherd(2),
Shepherd(8), Shirley, Skippen, Smith(30), Smith(24), Smylie,
Snodgrass, Stevenson, Trail, Wills, Wood, Mr. Speaker
NAYS -- None
Absent and excused -- None
Floor Sponsor - Wood
Title apvd - to Senate
03/02 Senate intro - 1st rdg - to Transp
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-eighth Legislature Second Regular Session - 2006
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 692
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO MOTOR FUEL TAXES AND FEES; AMENDING SECTION 63-2407, IDAHO CODE,
3 TO PROVIDE THAT ON AND AFTER ADOPTION OF A RENEWABLE FUEL STANDARD BY
4 STATUTE AND IMPLEMENTATION OF THAT STANDARD, THE DEDUCTION FROM THE FUELS
5 TAX SHALL APPLY TO THOSE FUELS NOT SPECIFICALLY INCLUDED IN THE RENEWABLE
6 FUEL STANDARD; AND AMENDING SECTION 41-4903, IDAHO CODE, TO FURTHER DEFINE
7 "PETROLEUM" OR "PETROLEUM PRODUCTS."
8 Be It Enacted by the Legislature of the State of Idaho:
9 SECTION 1. That Section 63-2407, Idaho Code, be, and the same is hereby
10 amended to read as follows:
11 63-2407. DEDUCTIONS AUTHORIZED. Each licensed distributor shall deduct
12 from his monthly report:
13 (1) Motor fuel exported from this state other than in the supply tanks of
14 motor vehicles, motor boats or aircraft when supported by a shipping document,
15 an invoice signed by the purchaser, or other proper documents approved by the
16 commission but only if:
17 (a) The purchaser is not a licensed distributor and the seller can estab-
18 lish that any tax due in the jurisdiction to which the motor fuel is
19 destined is paid; or
20 (b) The purchaser is a licensed distributor in the jurisdiction to which
21 the motor fuel is destined.
22 (2) Motor fuel returned to a licensed distributor's refinery or pipeline
23 terminal storage when supported by proper documents approved by the commis-
25 (3) Motor fuel lost or destroyed by fire, lightning, flood, tornado,
26 windstorm, explosion, or other accidental casualty, after presenting to the
27 commission satisfactory proof of loss.
28 (4) The number of gallons which would be equal to one percent (1%) of the
29 total number of gallons received during the reporting period, less the total
30 number of gallons deducted under subsections (1) through (3) of this section,
31 which credit is granted to the licensed distributor to reimburse him for the
32 expense incurred on behalf of the state of Idaho in collecting and remitting
33 motor fuel tax moneys, maintaining necessary records for the state, preparing
34 necessary reports and remittances in compliance with this chapter, and for
35 loss from evaporation, handling, spillage and shrinkage, except losses caused
36 by casualty as provided in subsection (3) of this section. The licensed dis-
37 tributor may, in addition to the above, deduct the number of gallons equal to
38 one percent (1%) of the total number of gallons received during the preceding
39 calendar month, less the total number of gallons deducted under subsections
40 (1) through (3) of this section, to cover shrinkage, evaporation, spillage and
41 handling losses of a retail dealer. The latter deductions are to be allowed
42 only upon filing with the commission satisfactory evidence as may be pre-
43 scribed by it indicating the credit allowance has been made in favor of the
1 retail dealer or paid to him. The evidence shall be submitted together with
2 the report wherein this portion of the deduction is claimed. A licensed dis-
3 tributor who sells and delivers motor fuel directly to the consumer and not
4 for resale shall, with respect to those sales, be deemed a retail dealer for
5 the purposes of this section.
6 (5) Motor fuel sold to the Idaho national guard for use in aircraft and
7 in vehicles used off public highways provided, however, such deduction is sup-
8 ported by an exemption certificate signed by an authorized officer of the
9 Idaho national guard.
10 (6) For sales made on or after July 1, 1995, taxes previously paid on
11 gallons represented by accounts found to be worthless and actually charged-off
12 for income tax purposes may be credited upon a subsequent payment of the tax
13 provided in this chapter or, if no such tax is due, refunded. If such accounts
14 are thereafter collected, the tax per gallon shall be paid based upon the
15 amount actually received divided by the price per gallon of the original sale
16 multiplied by the appropriate tax rate.
17 (7) In the case of motor fuel received during the reporting period and
18 included in the report that is:
19 (a) Gasohol, deduct the number of gallons of denatured anhydrous ethanol
20 contained in the gasohol.
21 (b) Biodiesel, in whole or in part, deduct the number of gallons of agri-
22 cultural products or animal fats or the wastes of such products contained
23 in the fuel.
24 The deduction provided in this subsection shall not exceed ten percent (10%)
25 of (i) the volume of gasohol reported on the report or (ii) the special fuel
26 which is or contains biodiesel. On and after adoption of a renewable fuel
27 standard by statute and implementation of that standard, the deduction pro-
28 vided in this subsection shall only apply to those fuels not specifically
29 included in the renewable fuel standard.
30 SECTION 2. That Section 41-4903, Idaho Code, be, and the same is hereby
31 amended to read as follows:
32 41-4903. DEFINITIONS. For the purposes of this chapter:
33 (1) "Aboveground storage tank" means any one (1) or a combination of
34 tanks, including pipes connected thereto, that is used to contain an accumula-
35 tion of petroleum or petroleum products, and the volume of which, including
36 the volume of pipes connected thereto, is less than ten percent (10%) beneath
37 the surface of the ground. This term does not include a heating tank, farm
38 tank or residential tank or any tank with a capacity of one hundred ten (110)
39 gallons or less.
40 (2) "Accidental release" means any sudden or nonsudden release of petro-
41 leum from a storage tank that results in a need for corrective action or com-
42 pensation for bodily injury or property damage neither expected nor intended
43 by the tank owner or operator.
44 (3) "Administrator" means the state insurance fund or any person employed
45 by the board of trustees to replace the state insurance fund, employed by the
46 board to administer the Idaho petroleum clean water trust fund.
47 (4) "Application fee" means the amount paid or payable by an owner or
48 operator applying for a contract of insurance with the trust fund to offset
49 the costs of issuing contracts of insurance and other costs of administering
50 this fund.
51 (5) "Board" means the board of trustees appointed by the governor.
52 (6) "Bodily injury" means any bodily injury, sickness, disease or death
53 sustained by any person and caused by an occurrence defined in subsection (19)
1 of this section.
2 (7) "Contamination" means the presence of petroleum or petroleum products
3 in surface or subsurface soil, surface water, or ground water.
4 (8) "Commission" means the state tax commission of the state of Idaho.
5 (9) "Corrective action" means those actions as are reasonably necessary
6 to satisfy applicable federal and state standards in the event of a release
7 into the environment from a petroleum storage tank. Corrective action includes
8 initial corrective action response or actions consistent with a remedial
9 action to clean up contaminated soil and ground water or address residual
10 effects after initial corrective action is taken, as well as actions necessary
11 to monitor, assess and evaluate a release. Corrective action also includes the
12 cost of removing a tank which is releasing or has been releasing petroleum
13 products and the release cannot be corrected without removing the tank; but
14 corrective action does not include the cost of replacing this tank with
15 another tank.
16 (10) "Department" means the department of insurance of the state of Idaho.
17 (11) "Director" means the director of the department of insurance.
18 (12) "Farm tank" means any tank with a capacity of more than one hundred
19 ten (110) gallons but less than one thousand one hundred (1,100) gallons situ-
20 ated above ground or underground which is used for storing motor fuel for non-
21 commercial purposes and which is located on a tract of land devoted to the
22 production of crops or raising animals, including fish, and associated resi-
23 dences and improvements. A farm tank must be located on the farm property.
24 "Farm" includes fish hatcheries, rangeland and nurseries with growing opera-
26 (13) "Free product" means petroleum or petroleum products in the
27 nonaqueous phase, (e.g., liquid not dissolved in water).
28 (14) "Fund" or "trust fund" means the Idaho petroleum clean water trust
30 (15) "Heating tank" means any tank with a capacity of more than one hun-
31 dred ten (110) gallons situated above ground or underground which is used for
32 storing heating oil for consumptive use on the premises where stored.
33 (16) "Legal defense costs" means any expense that an owner or operator or
34 the trust fund incurs in defending against claims or actions brought by the
35 federal environmental protection agency or a state agency to require correc-
36 tive action or to recover the costs of corrective action; or by or on behalf
37 of a third party for bodily injury or property damage caused by a release.
38 (17) "Licensed distributor" means any distributor who has obtained a
39 license under the provisions of section 63-2427A, Idaho Code. If a person sub-
40 ject to the fee imposed by section 41-4909(7), Idaho Code, is not required to
41 obtain a distributor's license under the provisions of chapter 24, title 63,
42 Idaho Code, such person shall apply to the commission for a limited license
43 for the purpose of complying with the requirements of this chapter. Such a
44 limited license shall not be valid for any other purpose. No bond shall be
45 required for a limited license. A holder of a limited license is a "licensed
46 distributor" for the purposes of filing reports, paying fees and other actions
47 necessary to the proper administration and enforcement of this chapter.
48 (18) "Noncommercial purposes" means not for resale, with respect to motor
50 (19) "Occurrence" means an accident, including continuous or repeated
51 exposure to conditions, which resulted in a release into the environment of
52 petroleum products from a petroleum storage tank.
53 (20) "Operator" means any person in control, or having responsibility for,
54 the daily operations of a petroleum storage tank.
55 (21) "Owner" means the owner of a petroleum storage tank, except that
1 "owner" does not include any person who, without participation in the manage-
2 ment of a petroleum storage tank, holds indicia of ownership primarily to pro-
3 tect the owner's security interest in the tank.
4 (22) "Person" means any corporation, association, partnership, one (1) or
5 more individuals, or any governmental unit, or agency thereof, other than fed-
6 eral or state agencies.
7 (23) "Petroleum" and/or "petroleum products" mean crude oil, or any frac-
8 tion thereof, which is liquid at standard conditions of temperature and pres-
9 sure (i.e., at sixty (60) degrees fahrenheit and fourteen and seven-tenths
10 (14.7) pounds per square inch absolute). The term includes motor gasoline,
11 gasohol, ethanol or ethanol blends, or alcohol or other alcohol blended fuels,
12 diesel fuel, heating oil and aviation fuel.
13 (24) "Property damage" means injury or destruction to tangible property
14 caused by an occurrence.
15 (25) "Release" means any spilling, leaking, emitting, discharging, escap-
16 ing, leaching, or disposing from a petroleum storage tank into ground water,
17 surface water, or surface or subsurface soils.
18 (26) "Residential tank" means any tank with a capacity of more than one
19 hundred ten (110) gallons but less than one thousand one hundred (1,100) gal-
20 lons situated above ground or underground which is used for storing motor fuel
21 for noncommercial purposes and which is located on property used primarily for
22 dwelling purposes.
23 (27) "Site" means a single parcel of property where petroleum or petroleum
24 products are stored in a petroleum storage tank and includes all contiguous
25 land, structures, other appurtenances, surface water, ground water, surface
26 and subsurface soil, and subsurface strata within and beneath the property
28 (28) "State" means the state of Idaho or any office, department, agency,
29 authority, commission, board, institution, hospital, college, university or
30 other instrumentality thereof.
31 (29) "Tank" means a stationary device designed to contain an accumulation
32 of petroleum or petroleum products and constructed of nonearthen materials
33 (e.g., concrete, steel, plastic) that provide structural support.
34 (30) "Trustees" means the trustees of the Idaho petroleum clean water
35 trust fund, who are appointed by the governor pursuant to this chapter.
36 (31) "Underground storage tank" means any one (1) or combination of tanks,
37 including underground pipes connected thereto, that is used to contain an
38 accumulation of petroleum or petroleum products, and the volume of which,
39 including the volume of underground pipes connected thereto, is ten percent
40 (10%) or more beneath the surface of the ground. This term does not include
42 (a) Farm or residential tank of one thousand one hundred (1,100) gallons
43 or less capacity used for storing motor fuel for noncommercial purposes;
44 (b) Tank used solely for storing heating oil for consumptive use on the
45 premises where stored;
46 (c) Septic tank;
47 (d) Pipeline facility including gathering lines regulated under:
48 (i) The natural gas pipeline safety act of 1968 (49 U.S.C. app.
49 1671, et seq.); or
50 (ii) The hazardous liquid pipeline safety act of 1979 (49 U.S.C.
51 app. 2001, et seq.); or
52 (iii) State laws comparable to the provisions of the law referred to
53 in paragraph (d)(i) or (d)(ii) of this subsection as an intrastate
54 pipeline facility;
55 (e) Surface impoundment, pit, pond or lagoon;
1 (f) Storm water or wastewater collection system;
2 (g) Flow-through process tank;
3 (h) Liquid trap or associated gathering lines directly related to oil or
4 gas production and gathering operations;
5 (i) Storage tank situated in an underground area (such as a basement,
6 cellar, mineworking, drift, shaft, or tunnel) if the storage tank is situ-
7 ated upon or above the surface of the floor;
8 (j) Tanks with a capacity of one hundred ten (110) gallons or less.
9 The term "underground storage tank" does not include any pipes connected to
10 any tank which is described in paragraphs (a) through (i) of this definition.
11 (32) "Underground storage tank regulations" means regulations for petro-
12 leum storage tanks promulgated by the United States environmental protection
13 agency (EPA) pursuant to subtitle I of the solid waste disposal act, as
14 amended by the resource conservation and recovery act, regulations promulgated
15 by the state of Idaho as part of a state program for underground storage tank
16 regulation under subtitle I, or other regulations affecting underground stor-
17 age tank operations and management, including the international fire code
18 adopted by the state of Idaho.
STATEMENT OF PURPOSE
The purposes of this legislation are to remove the existing
state fuel tax deduction for ethanol blended fuel once a
renewable fuel standard is implemented and to change a
definition of petroleum products for the underground storage
tank fund to include ethanol and ethanol blends so the
underground storage tank fund is not inadvertently under-
There is no fiscal impact to the general fund of the state
of Idaho. Once a renewable fuel standard is implemented,
there will be an increase in state fuel tax revenues of
$750,000 per year.
Name: Russ Hendricks
Senator Stan Williams
Senator Curt McKenzie
Senator John McGee
Senator David Langhorst
Rep. JoAn Wood
Rep. Ann Rydalch
Rep. Stan Bastian
Rep. Ken Roberts
Rep. Elaine Smith
STATEMENT OF PURPOSE/FISCAL NOTE H 692