Print Friendly HOUSE BILL NO. 14 – Motor fuels tax, biodiesel
HOUSE BILL NO. 14
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H0014...............................................by REVENUE AND TAXATION
MOTOR FUELS - TAXATION - BIODIESEL - Amends existing law relating to the
motor fuels tax to provide a definition for "biodiesel and biodiesel
blends"; and to include biodiesel and biodiesel blends in products subject
to the petroleum transfer fee.
01/16 House intro - 1st rdg - to printing
01/17 Rpt prt - to Rev/Tax
01/24 Rpt out - ref'd to Transp
02/05 Rpt out - rec d/p - to 2nd rdg
02/06 2nd rdg - to 3rd rdg
02/07 3rd rdg - PASSED - 68-0-2
AYES -- Anderson, Andrus, Barrett, Bayer, Bedke, Bell, Bilbao, Black,
Block, Bock, Boe, Bolz, Brackett, Bradford, Chadderdon, Chavez, Chew,
Clark, Collins, Durst, Edmunson, Eskridge, Hagedorn, Hart, Harwood,
Henbest, Henderson, Jaquet, Killen, King, Kren, Labrador, Lake,
LeFavour, Loertscher, Luker, Marriott, Mathews, McGeachin, Mortimer,
Moyle, Nonini, Pasley-Stuart, Patrick, Pence, Raybould, Ring, Ringo,
Roberts, Ruchti, Rusche, Sayler, Schaefer, Shepherd(2), Shepherd(8),
Shirley, Shively, Smith(30), Smith(24), Snodgrass, Stevenson, Thayn,
Trail, Vander Woude, Wills, Wood(27), Wood(35), Mr. Speaker
NAYS -- None
Absent and excused -- Crane, Nielsen
Floor Sponsor - Smith(24)
Title apvd - to Senate
02/08 Senate intro - 1st rdg - to Loc Gov
02/14 Rpt out - rec d/p - to 2nd rdg
02/15 2nd rdg - to 3rd rdg
02/20 3rd rdg - PASSED - 35-0-0
AYES -- Andreason, Bair, Bastian, Bilyeu, Broadsword, Burkett,
Cameron, Coiner, Corder, Darrington, Davis, Fulcher, Gannon, Geddes,
Goedde, Hammond, Heinrich, Hill, Jorgenson, Kelly, Keough, Langhorst,
Little, Lodge, Malepeai, McGee, McKague, McKenzie, Pearce,
Richardson, Schroeder, Siddoway, Stegner, Stennett, Werk
NAYS -- None
Absent and excused -- None
Floor Sponsor - Siddoway
Title apvd - to House
02/21 To enrol
02/22 Rpt enrol - Sp signed
02/23 Pres signed
02/26 To Governor
03/02 Governor signed
Session Law Chapter 37
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-ninth Legislature First Regular Session - 2007
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 14
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO MOTOR FUELS TAXES; AMENDING SECTION 63-2401, IDAHO CODE, TO REVISE
3 THE DEFINITION OF "BIODIESEL," TO PROVIDE A DEFINITION OF "BIODIESEL
4 BLEND" AND TO MAKE TECHNICAL CORRECTIONS; AMENDING SECTION 63-2407, IDAHO
5 CODE, TO CLARIFY THE DEDUCTION FOR BIODIESEL AND BIODIESEL BLENDS; AND
6 AMENDING SECTION 41-4903, IDAHO CODE, TO INCLUDE BIODIESEL AND BIODIESEL
7 BLENDS IN PRODUCTS SUBJECT TO THE PETROLEUM TRANSFER FEE.
8 Be It Enacted by the Legislature of the State of Idaho:
9 SECTION 1. That Section 63-2401, Idaho Code, be, and the same is hereby
10 amended to read as follows:
11 63-2401. DEFINITIONS. In this chapter:
12 (1) "Aircraft engine fuel" means:
13 (a) Aviation gasoline, defined as any mixture of volatile hydrocarbons
14 used in aircraft reciprocating engines; and
15 (b) Jet fuel, defined as any mixture of volatile hydrocarbons used in
16 aircraft turbojet and turboprop engines.
17 (2) "Biodiesel" means any fuel or mixture of fuels that is :
18 (a) Dderived in whole or in part from agricultural products or animal
19 fats or the wastes of such products ; and is
20 (b) Ssuitable for use as fuel in diesel engines.
21 (3) "Biodiesel blend" means any fuel produced by blending biodiesel with
22 petroleum-based diesel to produce a fuel suitable for use in diesel engines.
23 (4) "Bond" means:
24 (a) A surety bond, in an amount required by this chapter, duly executed
25 by a surety company licensed and authorized to do business in this state
26 conditioned upon faithful performance of all requirements of this chapter,
27 including the payment of all taxes, penalties and other obligations aris-
28 ing out of the provisions of this chapter; or
29 (b) A deposit with the commission by any person required to be licensed
30 pursuant to this chapter under terms and conditions as the commission may
31 prescribe, of a like amount of lawful money of the United States or bonds
32 or other obligations of the United States, the state of Idaho, or any
33 county of the state; or
34 (c) An irrevocable letter of credit issued to the commission by a bank
35 doing business in this state payable to the state upon failure of the per-
36 son on whose behalf it is issued to remit any payment due under the provi-
37 sions of this chapter.
38 ( 45) "Commercial motor boat" means any boat, equipped with a motor, which
39 is wholly or partly used in a profit-making enterprise or in an enterprise
40 conducted with the intent of making a profit.
41 ( 56) "Commission" means the state tax commission of the state of Idaho.
42 ( 67) "Distributor" means any person who receives motor fuel in this
43 state, and includes a special fuels dealer. Any person who sells or receives
1 gaseous fuels will not be considered a distributor unless the gaseous fuel is
2 delivered into the fuel supply tank or tanks of a motor vehicle not then owned
3 or controlled by him.
4 ( 78) "Dyed fuel" means diesel fuel that is dyed pursuant to requirements
5 of the internal revenue service, or the environmental protection agency.
6 ( 89) "Exported" means delivered by truck or rail across the boundaries of
7 this state by or for the seller or purchaser from a place of origin in this
9 ( 910) "Gasohol" means gasoline blended with ten percent (10%) or more of
10 anhydrous ethanol.
11 (1 01) "Gasoline" means any mixture of volatile hydrocarbons suitable as a
12 fuel for the propulsion of motor vehicles or motor boats. "Gasoline" also
13 means aircraft engine fuels when used for the operation or propulsion of motor
14 vehicles or motor boats and includes gasohol, but does not include special
16 (1 12) "Highways" means every place of whatever nature open to the use of
17 the public as a matter of right for the purpose of vehicular travel which is
18 maintained by the state of Idaho or an agency or taxing subdivision or unit
19 thereof or the federal government or an agency or instrumentality thereof.
20 Provided, however, if the cost of maintaining a roadway is primarily borne by
21 a special fuels user who operates motor vehicles on that roadway pursuant to a
22 written contract during any period of time that a special fuels tax liability
23 accrues to the user, such a roadway shall not be considered a "highway" for
24 any purpose related to calculating that user's special fuels' tax liability or
26 (1 23) "Idling" means the period of time greater than twenty-five hun-
27 dredths (.25) of an hour when a motor vehicle is stationary with the engine
28 operating at less than one thousand two hundred (1,200) revolutions per minute
29 (RPM), without the power take-off (PTO) unit engaged, with the transmission in
30 the neutral or park position, and with the parking brake set.
31 (1 34) "Imported" means delivered by truck or rail across the boundaries of
32 this state by or for the seller or purchaser from a place of origin outside
33 this state.
34 (1 45) "International fuel tax agreement" and "IFTA" mean the international
35 fuel tax agreement required by the intermodal surface transportation effi-
36 ciency act of 1991, Public Law 102-240, 105 Stat. 1914, and referred to in
37 title 49, U.S.C., section 31701, including subsequent amendments to that
39 (1 56) "Jurisdiction" means a state of the United States, the District of
40 Columbia, a province or territory of Canada, or a state, territory or agency
41 of Mexico in the event that the state, territory or agency participates in the
42 international fuel tax agreement.
43 (1 67) "Licensed distributor" means any distributor who has obtained a
44 license under the provisions of section 63-2427A, Idaho Code.
45 (1 78) "Motor fuel" means gasoline, special fuels, aircraft engine fuels or
46 any other fuels suitable for the operation or propulsion of motor vehicles,
47 motor boats or aircraft.
48 (1 89) "Motor vehicle" means every self-propelled vehicle designed for
49 operation, or required to be licensed for operation, upon a highway.
50 ( 1920) "Person" means any individual, firm, fiduciary, copartnership,
51 association, limited liability company, corporation, governmental instrumen-
52 tality including the state and all of its agencies and political subdivisions,
53 or any other group or combination acting as a unit, and the plural as well as
54 the singular number, unless the intent to give a more limited meaning is dis-
55 closed by the context. Whenever used in any clause prescribing and imposing a
1 fine or imprisonment, or both, the term "person" as applied to an association
2 means the partners or members, and as applied to corporations, the officers.
3 (2 01) "Recreational vehicle" means a snowmobile as defined in section
4 67-7101, Idaho Code; a motor driven cycle or motorcycle as defined in section
5 49-114, Idaho Code; any recreational vehicle as defined in section 49-119,
6 Idaho Code; and an all-terrain vehicle as defined in section 67-7101, Idaho
8 (2 12) "Retail dealer" means any person engaged in the retail sale of motor
9 fuels to the public or for use in the state.
10 (2 23) "Special fuels" means:
11 (a) All fuel suitable as fuel for diesel engines;
12 (b) A compressed or liquified gas obtained as a byproduct in petroleum
13 refining or natural gasoline manufacture, such as butane, isobutane, pro-
14 pane, propylene, butylenes, and their mixtures; and
15 (c) Natural gas, either liquid or gas, and hydrogen, used for the genera-
16 tion of power for the operation or propulsion of motor vehicles.
17 (2 34) "Special fuels dealer" means "distributor" under subsection (6) of
18 this section.
19 (2 45) "Special fuels user" means any person who uses or consumes special
20 fuels for the operation or propulsion of motor vehicles owned or controlled by
21 him upon the highways of this state.
22 (2 56) "Use" means either:
23 (a) The receipt, delivery or placing of fuels by a licensed distributor
24 or a special fuels dealer into the fuel supply tank or tanks of any motor
25 vehicle not owned or controlled by him while the vehicle is within this
26 state; or
27 (b) The consumption of fuels in the operation or propulsion of a motor
28 vehicle on the highways of this state.
29 SECTION 2. That Section 63-2407, Idaho Code, be, and the same is hereby
30 amended to read as follows:
31 63-2407. DEDUCTIONS AUTHORIZED. Each licensed distributor shall deduct
32 from his monthly report:
33 (1) Motor fuel exported from this state other than in the supply tanks of
34 motor vehicles, motor boats or aircraft when supported by a shipping document,
35 an invoice signed by the purchaser, or other proper documents approved by the
36 commission but only if:
37 (a) The purchaser is not a licensed distributor and the seller can estab-
38 lish that any tax due in the jurisdiction to which the motor fuel is
39 destined is paid; or
40 (b) The purchaser is a licensed distributor in the jurisdiction to which
41 the motor fuel is destined.
42 (2) Motor fuel returned to a licensed distributor's refinery or pipeline
43 terminal storage when supported by proper documents approved by the commis-
45 (3) Motor fuel lost or destroyed by fire, lightning, flood, tornado,
46 windstorm, explosion, or other accidental casualty, after presenting to the
47 commission satisfactory proof of loss.
48 (4) The number of gallons which would be equal to one percent (1%) of the
49 total number of gallons received during the reporting period, less the total
50 number of gallons deducted under subsections (1) through (3) of this section,
51 which credit is granted to the licensed distributor to reimburse him for the
52 expense incurred on behalf of the state of Idaho in collecting and remitting
53 motor fuel tax moneys, maintaining necessary records for the state, preparing
1 necessary reports and remittances in compliance with this chapter, and for
2 loss from evaporation, handling, spillage and shrinkage, except losses caused
3 by casualty as provided in subsection (3) of this section. The licensed dis-
4 tributor may, in addition to the above, deduct the number of gallons equal to
5 one percent (1%) of the total number of gallons received during the preceding
6 calendar month, less the total number of gallons deducted under subsections
7 (1) through (3) of this section, to cover shrinkage, evaporation, spillage and
8 handling losses of a retail dealer. The latter deductions are to be allowed
9 only upon filing with the commission satisfactory evidence as may be pre-
10 scribed by it indicating the credit allowance has been made in favor of the
11 retail dealer or paid to him. The evidence shall be submitted together with
12 the report wherein this portion of the deduction is claimed. A licensed dis-
13 tributor who sells and delivers motor fuel directly to the consumer and not
14 for resale shall, with respect to those sales, be deemed a retail dealer for
15 the purposes of this section.
16 (5) Motor fuel sold to the Idaho national guard for use in aircraft and
17 in vehicles used off public highways provided, however, such deduction is sup-
18 ported by an exemption certificate signed by an authorized officer of the
19 Idaho national guard.
20 (6) For sales made on or after July 1, 1995, taxes previously paid on
21 gallons represented by accounts found to be worthless and actually charged-off
22 for income tax purposes may be credited upon a subsequent payment of the tax
23 provided in this chapter or, if no such tax is due, refunded. If such accounts
24 are thereafter collected, the tax per gallon shall be paid based upon the
25 amount actually received divided by the price per gallon of the original sale
26 multiplied by the appropriate tax rate.
27 (7) In the case of motor fuel received during the reporting period and
28 included in the report that is:
29 (a) Gasohol, deduct the number of gallons of denatured anhydrous ethanol
30 contained in the gasohol imported or blended during the reporting period
31 and that would be taxable in the report but for the deduction allowed by
32 this subsection.
33 (b) Biodiesel, in whole or in part, deduct the number of gallons of agri-
34 cultural products or animal fats or the wastes of such products contained
35 in the fuel that are sold during the month to which the report relates to
36 any person other than a licensed distributor.
37 (c) A biodiesel blend, deduct the number of gallons of biodiesel con-
38 tained in the biodiesel blend imported, blended or received from a
39 licensed distributor who is a biodiesel producer during the month to which
40 the report relates. In the case of a licensed distributor who is a
41 biodiesel producer, the deduction is only available when the producer
42 sells its biodiesel blends to a person who is not a motor fuel distributor
43 licensed in this state.
44 (d) The deduction provided in this subsection shall not exceed ten per-
45 cent (10%) of (i) the volume of gasohol reported on the report or (ii) the
46 special fuel which is or contains biodiesel.
47 (e) The deduction allowed by paragraphs (b) and (c) of this subsection is
48 only available for motor fuel otherwise subject to tax under this chapter.
49 SECTION 3. That Section 41-4903, Idaho Code, be, and the same is hereby
50 amended to read as follows:
51 41-4903. DEFINITIONS. For the purposes of this chapter:
52 (1) "Aboveground storage tank" means any one (1) or a combination of
53 tanks, including pipes connected thereto, that is used to contain an accumula-
1 tion of petroleum or petroleum products, and the volume of which, including
2 the volume of pipes connected thereto, is less than ten percent (10%) beneath
3 the surface of the ground. This term does not include a heating tank, farm
4 tank or residential tank or any tank with a capacity of one hundred ten (110)
5 gallons or less.
6 (2) "Accidental release" means any sudden or nonsudden release of petro-
7 leum from a storage tank that results in a need for corrective action or com-
8 pensation for bodily injury or property damage neither expected nor intended
9 by the tank owner or operator.
10 (3) "Administrator" means the state insurance fund or any person employed
11 by the board of trustees to replace the state insurance fund, employed by the
12 board to administer the Idaho petroleum clean water trust fund.
13 (4) "Application fee" means the amount paid or payable by an owner or
14 operator applying for a contract of insurance with the trust fund to offset
15 the costs of issuing contracts of insurance and other costs of administering
16 this fund.
17 (5) "Board" means the board of trustees appointed by the governor.
18 (6) "Bodily injury" means any bodily injury, sickness, disease or death
19 sustained by any person and caused by an occurrence defined in subsection (19)
20 of this section.
21 (7) "Contamination" means the presence of petroleum or petroleum products
22 in surface or subsurface soil, surface water, or ground water.
23 (8) "Commission" means the state tax commission of the state of Idaho.
24 (9) "Corrective action" means those actions as are reasonably necessary
25 to satisfy applicable federal and state standards in the event of a release
26 into the environment from a petroleum storage tank. Corrective action includes
27 initial corrective action response or actions consistent with a remedial
28 action to clean up contaminated soil and ground water or address residual
29 effects after initial corrective action is taken, as well as actions necessary
30 to monitor, assess and evaluate a release. Corrective action also includes the
31 cost of removing a tank which is releasing or has been releasing petroleum
32 products and the release cannot be corrected without removing the tank; but
33 corrective action does not include the cost of replacing this tank with
34 another tank.
35 (10) "Department" means the department of insurance of the state of Idaho.
36 (11) "Director" means the director of the department of insurance.
37 (12) "Farm tank" means any tank with a capacity of more than one hundred
38 ten (110) gallons but less than one thousand one hundred (1,100) gallons situ-
39 ated above ground or underground which is used for storing motor fuel for non-
40 commercial purposes and which is located on a tract of land devoted to the
41 production of crops or raising animals, including fish, and associated resi-
42 dences and improvements. A farm tank must be located on the farm property.
43 "Farm" includes fish hatcheries, rangeland and nurseries with growing opera-
45 (13) "Free product" means petroleum or petroleum products in the
46 nonaqueous phase, (e.g., liquid not dissolved in water).
47 (14) "Fund" or "trust fund" means the Idaho petroleum clean water trust
49 (15) "Heating tank" means any tank with a capacity of more than one hun-
50 dred ten (110) gallons situated above ground or underground which is used for
51 storing heating oil for consumptive use on the premises where stored.
52 (16) "Legal defense costs" means any expense that an owner or operator or
53 the trust fund incurs in defending against claims or actions brought by the
54 federal environmental protection agency or a state agency to require correc-
55 tive action or to recover the costs of corrective action; or by or on behalf
1 of a third party for bodily injury or property damage caused by a release.
2 (17) "Licensed distributor" means any distributor who has obtained a
3 license under the provisions of section 63-2427A, Idaho Code. If a person
4 subject to the fee imposed by section 41-4909(7), Idaho Code, is not required
5 to obtain a distributor's license under the provisions of chapter 24, title
6 63, Idaho Code, such person shall apply to the commission for a limited
7 license for the purpose of complying with the requirements of this chapter.
8 Such a limited license shall not be valid for any other purpose. No bond shall
9 be required for a limited license. A holder of a limited license is a
10 "licensed distributor" for the purposes of filing reports, paying fees and
11 other actions necessary to the proper administration and enforcement of this
13 (18) "Noncommercial purposes" means not for resale, with respect to motor
15 (19) "Occurrence" means an accident, including continuous or repeated
16 exposure to conditions, which resulted in a release into the environment of
17 petroleum products from a petroleum storage tank.
18 (20) "Operator" means any person in control, or having responsibility for,
19 the daily operations of a petroleum storage tank.
20 (21) "Owner" means the owner of a petroleum storage tank, except that
21 "owner" does not include any person who, without participation in the manage-
22 ment of a petroleum storage tank, holds indicia of ownership primarily to pro-
23 tect the owner's security interest in the tank.
24 (22) "Person" means any corporation, association, partnership, one (1) or
25 more individuals, or any governmental unit, or agency thereof, other than fed-
26 eral or state agencies.
27 (23) "Petroleum" and/or "petroleum products" mean crude oil, or any frac-
28 tion thereof, which is liquid at standard conditions of temperature and pres-
29 sure (i.e., at sixty (60) degrees fahrenheit and fourteen and seven-tenths
30 (14.7) pounds per square inch absolute). The term includes motor gasoline,
31 gasohol, other alcohol blended fuels, diesel fuel, heating oil and aviation
32 fuel. Biodiesel and biodiesel blends as those terms are defined in section
33 63-2401, Idaho Code, are also petroleum or petroleum products.
34 (24) "Property damage" means injury or destruction to tangible property
35 caused by an occurrence.
36 (25) "Release" means any spilling, leaking, emitting, discharging, escap-
37 ing, leaching, or disposing from a petroleum storage tank into ground water,
38 surface water, or surface or subsurface soils.
39 (26) "Residential tank" means any tank with a capacity of more than one
40 hundred ten (110) gallons but less than one thousand one hundred (1,100) gal-
41 lons situated above ground or underground which is used for storing motor fuel
42 for noncommercial purposes and which is located on property used primarily for
43 dwelling purposes.
44 (27) "Site" means a single parcel of property where petroleum or petroleum
45 products are stored in a petroleum storage tank and includes all contiguous
46 land, structures, other appurtenances, surface water, ground water, surface
47 and subsurface soil, and subsurface strata within and beneath the property
49 (28) "State" means the state of Idaho or any office, department, agency,
50 authority, commission, board, institution, hospital, college, university or
51 other instrumentality thereof.
52 (29) "Tank" means a stationary device designed to contain an accumulation
53 of petroleum or petroleum products and constructed of nonearthen materials
54 (e.g., concrete, steel, plastic) that provide structural support.
55 (30) "Trustees" means the trustees of the Idaho petroleum clean water
1 trust fund, who are appointed by the governor pursuant to this chapter.
2 (31) "Underground storage tank" means any one (1) or combination of tanks,
3 including underground pipes connected thereto, that is used to contain an
4 accumulation of petroleum or petroleum products, and the volume of which,
5 including the volume of underground pipes connected thereto, is ten percent
6 (10%) or more beneath the surface of the ground. This term does not include
8 (a) Farm or residential tank of one thousand one hundred (1,100) gallons
9 or less capacity used for storing motor fuel for noncommercial purposes;
10 (b) Tank used solely for storing heating oil for consumptive use on the
11 premises where stored;
12 (c) Septic tank;
13 (d) Pipeline facility including gathering lines regulated under:
14 (i) The natural gas pipeline safety act of 1968 (49 U.S.C. app.
15 1671, et seq.); or
16 (ii) The hazardous liquid pipeline safety act of 1979 (49 U.S.C.
17 app. 2001, et seq.); or
18 (iii) State laws comparable to the provisions of the law referred to
19 in paragraph (d)(i) or (d)(ii) of this subsection as an intrastate
20 pipeline facility;
21 (e) Surface impoundment, pit, pond or lagoon;
22 (f) Storm water or wastewater collection system;
23 (g) Flow-through process tank;
24 (h) Liquid trap or associated gathering lines directly related to oil or
25 gas production and gathering operations;
26 (i) Storage tank situated in an underground area (such as a basement,
27 cellar, mineworking, drift, shaft, or tunnel) if the storage tank is situ-
28 ated upon or above the surface of the floor;
29 (j) Tanks with a capacity of one hundred ten (110) gallons or less.
30 The term "underground storage tank" does not include any pipes connected to
31 any tank which is described in paragraphs (a) through (i) of this definition.
32 (32) "Underground storage tank regulations" means regulations for petro-
33 leum storage tanks promulgated by the United States environmental protection
34 agency (EPA) pursuant to subtitle I of the solid waste disposal act, as
35 amended by the resource conservation and recovery act, regulations promulgated
36 by the state of Idaho as part of a state program for underground storage tank
37 regulation under subtitle I, or other regulations affecting underground stor-
38 age tank operations and management, including the international fire code
39 adopted by the state of Idaho.
REVISION REVISION REVISION REVISION REVISION REVISION
STATEMENT OF PURPOSE
This bill updates the definitions in the laws about the
motor fuels trax and to the Idaho petroleum clean water fee
(which is currently suspended) in regard to biodiesel and
biodiesel blends. It clarifies that "biodiesel" is derived in
whole or in part from agricultural products or animal fats or the
wastes of such products. A "Biodiesel blend" is fuel produced by
blending biodiesel with petroleum-based diesel to produce a fuel
suitable fo ruse in diesel engines. These proposed definitions
also reflect industry use. The current law conflates these two
different products and therefore creates some confusion.
Name: Dan John/Ted Spangler
Agencey: State Tax Commission
STATEMENT OF PURPOSE/FISCAL NOTE H 14