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Montana Administrative Register Notice 18-129 No. 20   10/28/2010    
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BEFORE THE DEPARTMENT OF TRANSPORTATION

OF THE STATE OF MONTANA

 

In the matter of the amendment of ARM 18.9.111, 18.9.401, 18.9.402, 18.9.403, 18.9.501, 18.9.601, 18.9.602, 18.9.603, 18.9.605, 18.9.606, 18.9.608, and 18.9.704 pertaining to gasohol and alcohol blended fuel

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NOTICE OF PROPOSED AMENDMENT

 

NO PUBLIC HEARING CONTEMPLATED

 

TO:  All Concerned Persons

 

1.  On November 29, 2010, the Department of Transportation proposes to amend the above-stated rules.

 

2.  The Department of Transportation will make reasonable accommodations for persons with disabilities who wish to participate in this rulemaking process or need an alternative accessible format of this notice.  If you require an accommodation, contact Department of Transportation no later than 5:00 p.m. on November 19, 2010, to advise us of the nature of the accommodation that you need.  Please contact Robert A. Turner, Department of Transportation, P. O. Box 201001, Helena, Montana, 59620; telephone (406) 444-7672; fax (406) 444-6032; TTY (406) 444-7696; or e-mail boturner@mt.gov.

 

3.  The rules as proposed to be amended provide as follows, new matter underlined, deleted matter interlined:

 

            18.9.111  GASOHOL ETHANOL-BLENDED GASOLINE BLENDERS 

            (1)  Pursuant to 15-70-201, MCA, a person who blends alcohol ethanol with gasoline to produce gasohol ethanol-blended gasoline is a "distributor" if no tax has been paid on the alcohol ethanol or gasoline blended to produce gasohol ethanol-blended gasoline.  As a distributor, the gasohol ethanol-blended gasoline blender is responsible for paying the tax on all the alcohol ethanol and gasoline which has not been taxed and which is used to produce gasohol ethanol-blended gasoline.  If the person qualifies as a distributor solely on the basis of blending alcohol ethanol and gasoline, the person is a distributor only with respect to the alcohol ethanol and gasoline used to produce gasohol ethanol-blended gasoline.

            (2)  The blending of alcohol ethanol with gasoline to produce gasohol ethanol-blended gasoline does not make the gasohol ethanol-blended gasoline blender a distributor for the purpose of the payment of the tax due on gasoline not blended with alcohol ethanol to produce gasohol ethanol-blended gasoline.  If the gasohol ethanol-blended gasoline blender receives gasoline upon which no tax has been paid and not used to produce gasohol ethanol-blended gasoline, the blender must qualify as and meet all the requirements to be either a distributor under 15-70-201, MCA, or a "wholesale distributor" under 15-70-201, MCA, and pay the tax.  Sections 15-70-201 and 15-70-301, MCA, are the requirements for being a distributor or wholesale distributor on a basis other than being a gasohol ethanol-blended gasoline blender.  Only if the gasohol ethanol-blended gasoline blender qualifies under these other requirements can that blender purchase gasoline without tax for resale as gasoline.

            (3)  The gasohol ethanol-blended gasoline blender must comply with all the laws and rules which apply to distributors. 

 

AUTH: 15-70-104, MCA

IMP: 15-70-201, 15-70-204, 15-70-301, MCA

 

            18.9.401  TREATMENT OF GASOHOL ETHANOL-BLENDED GASOLINE  

            (1)  For the purposes of Title 15, chapter 70, reference to gasoline includes, gasohol ethanol-blended gasoline (regardless of where produced and how produced). Gasoline and gasohol ethanol-blended gasoline are taxed at the rate specified in 15-70-204, MCA.

            (2) remains the same.

 

AUTH: 15-70-104, MCA

IMP: 15-70-201, 15-70-204 , MCA

 

            18.9.402  AGRICULTURAL PRODUCTS  (1)  As used in the definition of gasohol ethanol-blended gasoline (15‑70‑201, MCA), the term "agricultural products" includes timber.

 

AUTH:  15‑70‑104, MCA

IMP:  15‑70‑201, MCA

 

            18.9.403  ETHANOL CONTENT  (1)  A product consisting of 100% anhydrous ethanol is not considered to be gasohol ethanol-blended gasoline.

 

AUTH: 15‑70‑104, MCA

IMP:  15‑70‑201, MCA

 

            18.9.501  ALCOHOL ETHANOL DISTRIBUTORS  (1)  It is the responsibility of the alcohol ethanol distributor, including anyone who imports alcohol ethanol, to collect and remit to the Department of Transportation the tax that is due on the alcohol ethanol pursuant to 15‑70-204(3), MCA.

            (2) remains the same.

 

AUTH:  15‑70‑104, MCA

IMP:  15‑70‑512, 15‑70‑523, MCA

 

            18.9.601  INTENT  (1)  The following rules are intended to implement the Alcohol Ethanol Tax Incentive and Administration Act, Title 15, chapter 70, part 5, MCA, and are designed to facilitate the efficient payment of the alcohol ethanol tax incentive while insuring against fraud, waste, and abuse under the act.

            (2) remains the same.

 

AUTH:  15‑70‑104, MCA

IMP:  Title 15, chapter 70, part 5 15-70-501, 15-70-502, 15-70-503, 15-70-511, 15-70-512, 15-70-513, 15-70-514, 15-70-521, 15-70-522, 15-70-523, 15-70-527, MCA

 

            18.9.602  DEFINITIONS  (1)  remains the same.

            (2)  The following definitions also apply:

            (a)  "Act" means the "Alcohol Ethanol Tax Incentive and Administration Act," Title 15, chapter 70, part 5, MCA.

            (b) (d)  "Alcohol Ethanol" means anhydrous ethanol produced in Montana from Montana agricultural products, including Montana wood or wood products, or from non‑Montana agricultural products when Montana products are not available.

            (c) and (d) remain the same but are renumbered (b) and (c).

            (e)  "Written plan" means a detailed proposed business plan providing information that allows the department to estimate the alcohol ethanol incentive tax reservation of funds.

 

AUTH:  15‑70-104, 15‑70‑522, MCA

IMP:  Title 15, chapter 70, part 5 15-70-501, 15-70-502, 15-70-503, 15-70-511, 15-70-512, 15-70-513, 15-70-514, 15-70-521, 15-70-522, 15-70-523, 15-70-527, MCA

 

            18.9.603  PROCESSING OF THE TAX INCENTIVE PAYMENT  (1)  The alcohol ethanol distributor shall make one application, on forms available from the administration division, for the payment of the tax incentive to the division not later than the 25th day of the calendar month following the month or months during which the alcohol ethanol was sold and delivered to the gasohol ethanol-blended gasoline dealer or alcohol ethanol purchaser.  The alcohol ethanol distributor may not submit more than one application during a month. If alcohol ethanol is omitted from one month's application, it may be applied for in the application for a subsequent month.

            (2)  The application must be accompanied by the original or a copy of the production records and invoices for all the alcohol ethanol for which the alcohol ethanol distributor is applying for the tax incentive payment.

            (3)  The application must contain:

            (a)  the name of the alcohol ethanol distributor;

            (b)  the license number of the alcohol ethanol distributor;

            (c)  the total number of gallons of alcohol ethanol manufactured, exported, or imported by the distributor during the preceding calendar month;

            (d)  the name of each gasohol ethanol-blended gasoline dealer to whom the alcohol ethanol was sold;

            (e)  the gasoline distributor license number of the gasohol ethanol-blended gasoline dealer;

            (f)  the number of gallons of alcohol ethanol sold to each dealer or purchaser; and

            (g)  the date and the place the alcohol ethanol was blended with gasoline to produce gasohol ethanol-blended gasoline.

            (4)  If the application includes alcohol ethanol which was exported from Montana prior to being blended with gasoline to produce gasohol ethanol-blended gasoline, the application must be accompanied by a certificate of blending from the alcohol ethanol purchaser on a form which is furnished by the division.  The certificate must be completed and signed by the out‑of‑state alcohol ethanol purchaser and must include:

            (a)  the license number or numbers, if any, of the purchaser in the state or states where the gasohol ethanol-blended gasoline was distributed;

            (b)  the address and telephone number of the alcohol ethanol purchaser;

            (c)  the number of gallons of gasohol ethanol-blended gasoline which were produced by the purchaser from the alcohol ethanol which was produced in Montana;

            (d)  the statement that the alcohol ethanol was blended with gasoline at a ratio of at least one gallon of alcohol ethanol to nine gallons of gasoline; and

            (e)  the name, license number, and address of the person who actually blended the alcohol ethanol with gasoline and the number of gallons of gasohol ethanol-blended gasoline which was produced if he is not the alcohol ethanol purchaser.

            (5)  remains the same.

            (6)  If the information on the alcohol ethanol tax incentive payment application by the alcohol ethanol distributor does not match the information on the gasoline distributor's report or other information supplied to the division, the division will withhold payment of the alcohol ethanol tax incentive until such time as the division can determine the accuracy of the alcohol ethanol tax incentive application.

            (7)  The report may include an application for refund of the basic gasoline license tax on gasoline which was used to denature alcohol ethanol.  The application for refund shall include:

            (a)  the gallons of anhydrous alcohol ethanol which were denatured by the alcohol ethanol distributors;

            (b)  and (c) remain the same.

            (8)  Original bills of lading, or invoices, or copies shall be attached to each report which contains an application for refund of the basic gasoline license tax on gasoline which was used to denature alcohol ethanol.

 

AUTH:  15‑70‑104, 15‑70‑522, MCA

IMP:  15‑70‑522, MCA

 

            18.9.605  OFFSETS  (1)  The division shall offset against any alcohol ethanol tax incentive payments which are due under the act:

            (a)  any overpayment or unauthorized payment made on prior alcohol ethanol tax incentive applications; and

            (b)  any finally assessed tax due from the alcohol ethanol distributor under Title 15, MCA.

 

AUTH:  15‑70‑104, MCA

IMP:  15‑70‑523, MCA

 

            18.9.606  QUARTERLY REPORTS  (1)  The department may require quarterly reports from the applicant during the 18‑month grace period to ensure alcohol ethanol implementation is on schedule.

 

AUTH:  15‑70‑104, 15‑70‑522, MCA

IMP:  15‑70‑512, 15-70-522, MCA

 

            18.9.608  USE OF MONTANA PRODUCTS  (1)  The payment of the alcohol ethanol tax incentive will be based solely on the percentage of Montana products, including Montana wood or wood products, that are used in the production of anhydrous ethanol. 

 

AUTH: 15-70-522, MCA

IMP: 15-70-522, MCA

 

            18.9.704  DEFINITIONS  (1)  remains the same.

            (2)  "Gasohol Ethanol-blended gasoline" means a fuel blend containing at least 10% alcohol ethanol, with the balance being gasoline and other additives.  Gasohol Ethanol-blended gasoline is also known as "E-10". 

            (3)  and (4)  remain the same.

 

AUTH:  15-70-104, MCA

IMP:  15-70-201, 15-70-204, 15-70-301, 15-70-311, 15-70-321, MCA

 

REASON:  The proposed changes are necessary because the 2007 Legislature changed "alcohol" to "ethanol" and gasohol" to "ethanol-blended" gasoline.  The changes in these rules are to comply with Ch. 100 of the 2007 Legislature, codified in Title 15, Chapter 70, Part 5.  The proposed amendments will also codify in ARM 18.9.606 that the 18-month grace period was deleted from statute in 2007.

 

4.  Concerned persons may submit their data, views, or arguments concerning the proposed actions in writing to: Robert A. Turner, Department of Transportation, P. O. Box 201001, Helena, Montana, 59620; telephone (406) 444-7672; fax (406) 444-6032; or e-mail boturner@mt.gov, and must be received no later than 5:00 p.m., November 26, 2010.

 

5.  If persons who are directly affected by the proposed actions wish to express their data, views, or arguments orally or in writing at a public hearing, they must make written request for a hearing and submit this request along with any written comments to Robert A. Turner at the above address no later than 5:00 p.m., November 26, 2010.

 

6.  If the agency receives requests for a public hearing on the proposed action from either 10 percent or 25, whichever is less, of the persons directly affected by the proposed action; from the appropriate administrative rule review committee of the Legislature; from a governmental subdivision or agency; or from an association having not less than 25 members who will be directly affected, a hearing will be held at a later date.  Notice of the hearing will be published in the Montana Administrative Register.  Ten percent of those directly affected has been determined to be 14 persons based on 140 motor fuel distributors licensed with the department.

 

7.  The department maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency.  Persons who wish to have their name added to the list shall make a written request that includes the name, e-mail, and mailing address of the person to receive notices and specifies for which program the person wishes to receive notices.  Notices will be sent by e-mail unless a mailing preference is noted in the request.  Such written request may be mailed or delivered to the contact person in 4 above or may be made by completing a request form at any rules hearing held by the department.

 

8.  An electronic copy of this proposal notice is available through the Secretary of State's web site at http://sos.mt.gov/ARM/Register.  The Secretary of State strives to make the electronic copy of this notice conform to the official version of the notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the notice and the electronic version of the notice, only the official printed text will be considered.  In addition, although the Secretary of State works to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems.

 

9.  The bill sponsor contact requirements of 2-4-302, MCA, apply and have been fulfilled.  The primary bill sponsor was contacted by U.S. mail on 6/23/10.

 

 

/s/  Carol Grell Morris                                    /s/  Jim Lynch                        

Carol Grell Morris                                          Jim Lynch

Rule Reviewer                                               Director

                                                                        Department of Transportation

           

Certified to the Secretary of State October 18, 2010.

 

 

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