An Act To Reform Maine's Motor Fuel Tax Laws
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 36 MRSA §2903, sub-§1, as amended by PL 2001, c. 688, §1, is further amended to read:
1. Excise tax imposed. An excise tax is imposed on internal combustion engine fuel used or sold within this State, including sales to the State or a political subdivision of the State, at the rate of 22¢ 21¢ per gallon, except that the rate is 3.4¢ per gallon on internal combustion engine fuel, as defined in section 2902, bought or used for the purpose of propelling jet or turbojet engine aircraft. The tax rate provided by this section is subject to annual inflation adjustment pursuant to section 3321 except with respect to the tax imposed upon fuel bought or used for the purpose of propelling jet or turbojet engine aircraft.
Sec. 2. 36 MRSA §2903, sub-§1-D is enacted to read:
1-D. Price-based component. Beginning in 2010, and each calendar year thereafter, the State Tax Assessor shall calculate a price-based component that must be added to the excise tax imposed pursuant to subsection 1, as determined according to this subsection. A. The tax imposed pursuant to subsection 1 must be subtracted from the average per gallon retail price of regular gasoline for New England for the immediately preceding calendar year as published by the United States Department of Energy, Energy Information Administration. The result is multiplied by 5% and rounded to the nearest 1/10 of a cent.
B. Except for the initial determination of the price-based component in 2010, the change in the price-based component may not increase the total excise tax imposed pursuant to this section by more than 10% per year.
C. The price-based component must be added to the excise tax imposed pursuant to subsection 1 and becomes effective on the July 1st immediately following the calculation.
Sec. 3. 36 MRSA §2903, sub-§6, as reallocated by RR 2007, c. 2, §21, is amended to read:
6. Deposit to trust fund. Beginning July 1, 2009 and ending June 30, 2010, the Treasurer of State shall deposit monthly into the TransCap Trust Fund established in Title 30-A, section 6006-G 7.5% of the excise tax after the distribution of taxes pursuant to section 2903-D imposed under subsection 1. Beginning July 1, 2010, the Treasurer of State shall deposit monthly into the TransCap Trust Fund, after the distribution of taxes pursuant to section 2903-D imposed under subsection 1: A. Seven and one-half percent of the excise tax imposed under subsection 1;
B. The first 8¢ per gallon of excise tax imposed under subsection 1-D; and
C. Seventy percent of the excise tax in excess of 8¢ per gallon imposed under subsection 1-D.
Sec. 4. 36 MRSA §3203, sub-§1-B, as enacted by PL 2007, c. 650, §2, is amended to read:
1-B. Generally; rates beginning July 1, 2008 and ending June 30, 2010. Except as provided in section 3204-A, beginning July 1, 2008 and ending June 30, 2010, an excise tax is levied and imposed on all suppliers of distillates sold, on all retailers of low-energy fuel sold and on all users of special fuel used in this State for each gallon of distillate at the rates provided in this subsection. Tax rates for each gallon of low-energy fuel are based on the British Thermal Unit, referred to in this subsection as "BTU," energy content for each fuel as based on gasoline gallon equivalents or the comparable measure for distillates. The gasoline gallon equivalent is the amount of alternative fuel that equals the BTU energy content of one gallon of gasoline. In the case of distillates, the tax rate provided by this section is subject to annual inflation adjustment pursuant to section 3321. For purposes of this subsection, "base rate" means the rate in effect for gasoline or diesel on July 1st of each year as indexed under section 3321.A.
This paragraph establishes the applicable BTU values and tax rates based on gasoline gallon equivalents.
| Fuel type based on gasoline |
BTU content per gallon or gasoline gallon equivalent |
Tax rate formula (BTU value fuel/BTU value gasoline) x base rate gasoline |
| Gasoline |
115,000 |
100% x base rate |
| Propane |
84,500 |
73% x base rate |
| Compressed Natural Gas (CNG) |
115,000 |
100% x base rate |
| Methanol |
56,800 |
49% x base rate |
| Ethanol |
76,000 |
66% x base rate |
| Hydrogen |
115,000 |
100% x base rate |
| Hydrogen Compressed Natural Gas |
115,000 |
100% x base rate |
B.
This paragraph establishes the applicable BTU values and tax rates based on distillate gallon equivalents.
| Fuel type based on diesel |
BTU content per gallon or gallon equivalent |
Tax rate formula (BTU value fuel/BTU value diesel) x base rate diesel
|
| Diesel |
128,400 |
100% x base rate |
| Liquified Natural Gas (LNG) |
73,500 |
57% x base rate |
| Biodiesel |
118,300 |
92% x base rate |
C.
The conversion factors established in this paragraph must be used in converting to gasoline gallon equivalents.
(1) For compressed natural gas, BTUs per 100 standard cubic feet is 93,000, and there are 123.66 standard cubic feet per gasoline gallon equivalent.
(2) For hydrogen, BTUs per 100 standard cubic feet is 27,000, and there are 425.93 standard cubic feet per gasoline gallon equivalent.
(3) For hydrogen compressed natural gas, BTUs per 100 standard cubic feet is 79,800, and there are 144.11 standard cubic feet per gasoline gallon equivalent.
Sec. 5. 36 MRSA §3203, sub-§1-C is enacted to read:
1-C. Generally; rates beginning July 1, 2010. Except as provided in section 3204-A, beginning July 1, 2010, an excise tax is levied and imposed on all suppliers of distillates sold, on all retailers of low-energy fuel sold and on all users of special fuel used in this State for each gallon of distillate at the rate of 21¢ per gallon plus a price-based component as provided in subsection 1-D. Tax rates for each gallon of low-energy fuel are based on the British Thermal Unit, referred to in this subsection as "BTU," energy content for each fuel as based on gasoline gallon equivalents or the comparable measure for distillates. The gasoline gallon equivalent is the amount of alternative fuel that equals the BTU energy content of one gallon of gasoline. For purposes of this subsection, "base rate" means the excise tax imposed pursuant to this subsection, including the price-based component specified in subsection 1-D, in effect on July 1st of each year. A.
This paragraph establishes the applicable BTU values and tax rates based on gasoline gallon equivalents.
| Fuel type based on gasoline |
BTU content per gallon or gasoline gallon equivalent |
Tax rate formula (BTU value fuel/BTU value gasoline) x base rate gasoline |
| Gasoline |
115,000 |
100% x base rate |
| Propane |
84,500 |
73% x base rate |
| Compressed Natural Gas (CNG) |
115,000 |
100% x base rate |
| Methanol |
56,800 |
49% x base rate |
| Ethanol |
76,000 |
66% x base rate |
| Hydrogen |
115,000 |
100% x base rate |
| Hydrogen Compressed Natural Gas |
115,000 |
100% x base rate |
B.
This paragraph establishes the applicable BTU values and tax rates based on distillate gallon equivalents.
| Fuel type based on diesel |
BTU content per gallon or gallon equivalent |
Tax rate formula (BTU value fuel/BTU value diesel) x base rate diesel |
| Diesel |
128,400 |
100% x base rate |
| Liquified Natural Gas (LNG) |
73,500 |
57% x base rate |
| Biodiesel |
118,300 |
92% x base rate |
C.
The conversion factors established in this paragraph must be used in converting to gasoline gallon equivalents.
(1) For compressed natural gas, BTUs per 100 standard cubic feet is 93,000, and there are 123.66 standard cubic feet per gasoline gallon equivalent.
(2) For hydrogen, BTUs per 100 standard cubic feet is 27,000, and there are 425.93 standard cubic feet per gasoline gallon equivalent.
(3) For hydrogen compressed natural gas, BTUs per 100 standard cubic feet is 79,800, and there are 144.11 standard cubic feet per gasoline gallon equivalent.
Sec. 6. 36 MRSA §3203, sub-§1-D is enacted to read:
1-D. Price-based component. Beginning in 2010, and each calendar year thereafter, the State Tax Assessor shall calculate a price-based component that must be added to the excise tax imposed pursuant to subsection 1-C, as determined according to this subsection. A. The tax imposed pursuant to subsection 1-C must be subtracted from the average per gallon retail price of diesel fuel for New England for the immediately preceding calendar year as published by the United States Department of Energy, Energy Information Administration. The result is multiplied by 5% and rounded to the nearest 1/10 of a cent.
B. Except for the initial determination of the price-based component in 2010, the change in the price-based component may not increase the total excise tax imposed pursuant to this section by more than 10% per year.
C. The price-based component must be added to the excise tax imposed pursuant to subsection 1-C and becomes effective on the July 1st immediately following the calculation.
Sec. 7. 36 MRSA §3203, sub-§4, as amended by PL 2007, c. 538, Pt. L, §2, is repealed and the following enacted in its place:
4. Highway Fund. All taxes and fines collected under this chapter must be credited to the Highway Fund, except that: A. Beginning July 1, 2009 and ending June 30, 2010, the Treasurer of State shall deposit monthly into the TransCap Trust Fund established in Title 30-A, section 6006-G 7.5% of the excise tax imposed under subsection 1-B; and
B. Beginning July 1, 2010, the Treasurer of State shall deposit monthly into the TransCap Trust Fund 7.5% of the excise tax imposed under subsection 1-B plus the first 8¢ per gallon of the excise tax imposed pursuant to subsection 1-D and 70% of the excise tax in excess of 8¢ per gallon of the excise tax imposed pursuant to subsection 1-D.
Sec. 8. 36 MRSA §3208, first ¶, as amended by PL 2007, c. 438, §78, is further amended to read:
Every user subject to the tax imposed by section 3203 is entitled to a credit on the tax, equivalent to the then current rate of taxation per gallon imposed by section 3203 as adjusted pursuant to section 3321, on all special fuel purchased by that user from a supplier or retailer licensed in accordance with section 3204 upon which the tax imposed by section 3203 has been paid. Evidence of the payment of that tax, in a form required by or satisfactory to the State Tax Assessor, must be furnished by each user claiming the credit. When the amount of the credit to which any user is entitled for any quarter exceeds the amount of the tax for which that user is liable for the same quarter, the excess may be allowed as a credit on the tax for which that user would be otherwise liable for another quarter or quarters. Upon application to the assessor, the excess may be refunded if the applicant has paid to another state or province under a lawful requirement of that jurisdiction a tax similar in effect to the tax imposed by section 3203 on the use or consumption of that fuel outside the State, at the same rate per gallon that tax was paid in this State, but in no case to exceed the then current rate per gallon of the tax imposed by section 3203 as adjusted pursuant to section 3321. Upon receipt of the application the assessor, if satisfied after investigation that a refund is justified, shall so certify to the State Controller. The refund must be paid out of the Highway Fund. This credit lapses at the end of the last quarter of the year following that in which the credit arose.
Sec. 9. 36 MRSA c. 465, as amended, is repealed.
summary
This bill restructures the excise tax imposed on motor fuels by:
1. Reducing the motor fuel excise tax imposed on gasoline from the current inflation adjusted rate of 28.4¢ per gallon to 21¢ per gallon and on diesel fuel from the current inflation adjusted rate of 29.6¢ per gallon to 21¢ per gallon;
2. Creating a price-based excise tax component to be added to the excise tax on gasoline and diesel fuel. The new component is determined annually beginning in 2010 and is based on the average retail price of gasoline or diesel fuel for New England for the previous year. The maximum increase in the overall excise tax is limited to 10% annually, except for the first year of implementation;
3. Repealing the annual indexing of motor fuels to the rate of inflation; and
4. Transferring 8¢ per gallon and 70% of the amount in excess of 8¢ of the price-based excise tax component to the TransCap Trust Fund.