SB 86: "An Act relating to a refined fuel surcharge; relating to the motor fuel tax; relating to a qualified dealer license; and providing for an effective date."
00 SENATE BILL NO. 86 01 "An Act relating to a refined fuel surcharge; relating to the motor fuel tax; relating to a 02 qualified dealer license; and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 43.05.230(g) is amended to read: 05 (g) The information contained in a license issued by the commissioner of 06 revenue or the commissioner of commerce, community, and economic development 07 under AS 43.40, AS 43.50, AS 43.60, AS 43.65, AS 43.70, and AS 43.75 is public 08 information. 09 * Sec. 2. AS 43.40 is amended by adding new sections to read: 10 Sec. 43.40.005. Refined fuel surcharge levied. (a) Every dealer or user of 11 refined fuels shall pay a surcharge of $.008 a gallon on refined fuel sold, transferred, 12 or used in the state. 13 (b) The following refined fuels are exempt from the surcharge imposed under 14 this section:
01 (1) fuel sold to a federal government agency for official use; 02 (2) fuel refined and used outside the United States; 03 (3) liquefied petroleum gas; 04 (4) fuel sold for use in jet propulsion aircraft operating in flights 05 (A) to foreign countries; or 06 (B) that continue from foreign countries; 07 (5) fuel sold or transferred between qualified dealers. 08 Sec. 43.40.007. Use of revenue derived from the refined fuel surcharge. 09 The legislature may appropriate the annual estimated balance of the surcharge levied 10 under AS 43.40.005 to the oil and hazardous substance release prevention account of 11 the oil and hazardous substance release prevention and response fund established in 12 AS 46.08.010. Nothing in this section creates a dedicated fund. 13 * Sec. 3. AS 43.40.010(a) is amended to read: 14 (a) In addition to the surcharge levied under AS 43.40.005, there [THERE] 15 is levied a tax of eight cents a gallon on all motor fuel sold or otherwise transferred 16 within the state, except that 17 (1) the tax on aviation gasoline is four and seven-tenths cents a gallon; 18 (2) the tax on motor fuel used in and on watercraft of all descriptions is 19 five cents a gallon; 20 (3) the tax on all aviation fuel other than gasoline is three and two- 21 tenths cents a gallon; and 22 (4) the tax rate on motor fuel that is blended with alcohol is the same 23 tax rate a gallon as other motor fuel; however, 24 (A) in an area and during the months in which fuel containing 25 alcohol is required to be sold, transferred, or used in an effort to attain air 26 quality standards for carbon monoxide as required by federal or state law or 27 regulation, the tax rate on motor fuel that is blended with alcohol is six cents a 28 gallon less than the tax on other motor fuel not described in (1) - (3) of this 29 subsection; 30 (B) notwithstanding (A) of this paragraph, through June 30, 31 2004, the tax on motor fuel sold or otherwise transferred within the state is
01 eight cents a gallon less than the tax on other motor fuel not described in (1) - 02 (3) of this subsection if the motor fuel 03 (i) is at least 10 percent alcohol by volume, has been 04 produced from the processing of lignocellulose derived from wood, and 05 was produced in a facility that processes lignocellulose from wood, but 06 this reduction in the rate of tax applies to motor fuel sold or transferred 07 that contains alcohol that was produced only during the first five years 08 of the facility's processing of lignocellulose from wood; or 09 (ii) is at least 10 percent alcohol by volume, has been 10 produced from the processing of waste seafood, and was produced in a 11 facility that processes alcohol from waste seafood, but this reduction in 12 the rate of tax applies to motor fuel sold or transferred that contains 13 alcohol that was produced only during the first five years of the 14 facility's processing of alcohol from waste seafood. 15 * Sec. 4. AS 43.40.010(b) is amended to read: 16 (b) In addition to the surcharge levied under AS 43.40.005, there 17 [THERE] is levied a tax of eight cents a gallon on all motor fuel consumed by a user, 18 except that 19 (1) the tax on aviation gasoline consumed is four and seven-tenths 20 cents a gallon; 21 (2) the tax on motor fuel used in and on watercraft of all descriptions is 22 five cents a gallon; 23 (3) the tax on all aviation fuel other than gasoline is three and two- 24 tenths cents a gallon; and 25 (4) the tax rate on motor fuel that is blended with alcohol is the same 26 tax rate a gallon as other motor fuel; however, 27 (A) in an area and during the months in which fuel containing 28 alcohol is required to be sold, transferred, or used in an effort to attain air 29 quality standards for carbon monoxide as required by federal or state law or 30 regulation, the tax rate on motor fuel that is blended with alcohol is six cents a 31 gallon less than the tax on other motor fuel not described in (1) - (3) of this
01 subsection; 02 (B) notwithstanding (A) of this paragraph, through June 30, 03 2004, the tax on motor fuel consumed by a user within the state is eight cents a 04 gallon less than the tax on other motor fuel not described in (1) - (3) of this 05 subsection if the motor fuel 06 (i) is at least 10 percent alcohol by volume, has been 07 produced from the processing of lignocellulose derived from wood, and 08 was produced in a facility that processes lignocellulose from wood, but 09 this reduction in the rate of tax applies to motor fuel consumed by a 10 user that contains alcohol that was produced only during the first five 11 years of the facility's processing of lignocellulose from wood; or 12 (ii) is at least 10 percent alcohol by volume, has been 13 produced from the processing of waste seafood, and was produced in a 14 facility that processes alcohol from waste seafood, but this reduction in 15 the rate of tax applies to motor fuel consumed by a user that contains 16 alcohol that was produced only during the first five years of the 17 facility's processing of alcohol from waste seafood. 18 * Sec. 5. AS 43.40.010(e) is amended to read: 19 (e) Sixty percent of the proceeds of the revenue from the motor fuel taxes on 20 aviation fuel, excluding the amount determined to have been spent by the state in its 21 collection, shall be refunded to a municipality owning and operating or leasing and 22 operating an airport in the proportion that the revenue was collected at the municipal 23 airport. All other proceeds of the motor fuel taxes on aviation fuel shall be paid into a 24 special aviation fuel tax account in the state general fund. The legislature may 25 appropriate funds from this account for aviation facilities. 26 * Sec. 6. AS 43.40 is amended by adding a new section to read: 27 Sec. 43.40.013. Collection of the refined fuel surcharge and the motor fuel 28 tax. Every dealer who sells or otherwise transfers refined or motor fuel in the state 29 shall collect the tax at the time of sale, and remit the total tax collected during each 30 calendar month of each year to the department by the last day of each succeeding 31 month. Every user shall likewise remit the tax accrued on motor fuel actually used by
01 the user during each month. If the monthly tax return is timely filed, one percent of the 02 total monthly tax due, limited to a maximum of $100, may be deducted and retained to 03 cover the expense of accounting and filing the monthly tax return. At the time the 04 remittance is made, each dealer or user shall submit a statement to the department 05 showing all fuel that the dealer or user has distributed or used during the month. 06 * Sec. 7. AS 43.40.015(c) is amended to read: 07 (c) A certificate of use obtained under this section must be renewed annually 08 for exemptions listed under AS 43.40.100(2). 09 * Sec. 8. AS 43.40.015(d) is amended to read: 10 (d) A certificate of use is not required under this section 11 (1) for fuel exempted under AS 43.40.100(2)(C) or (J); and 12 (2) for fuel exempted under AS 43.40.100(2)(I) other than fuel sold or 13 transferred under this exemption to a person who is engaged in construction or mining 14 activity. 15 * Sec. 9. AS 43.40.030 is amended to read: 16 Sec. 43.40.030. Refund of the motor fuel tax for nonhighway use. (a) 17 Except as specified in AS 43.40.010(j), a person who uses motor fuel to operate an 18 internal combustion engine is entitled to a motor fuel tax refund of six cents a gallon 19 if 20 (1) the tax on the motor fuel has been paid; 21 (2) the motor fuel is not aviation fuel, or motor fuel used in or on 22 watercraft; and 23 (3) the internal combustion engine is not used in or in conjunction with 24 a motor vehicle licensed to be operated on public ways. 25 (b) The entire amount of the motor fuel tax levied by this chapter shall be 26 refunded to the purchaser on that part of the motor fuel used in a foreign country on 27 which the tax has been paid when the fuel is sold and delivered in the state for non- 28 highway use in a foreign country. 29 (c) The department shall establish the necessary regulations and prescribe the 30 appropriate forms to prove that, for purposes of the motor fuel tax, the motor fuel is 31 taken to and used in foreign countries.
01 (d) If a person obtains motor fuel on which the motor fuel tax levied by this 02 chapter has been paid and the motor fuel is exempt from the motor fuel tax, the 03 person is entitled to a refund of the motor fuel tax paid. 04 * Sec. 10. AS 43.40.035(a) is amended to read: 05 (a) A person who resells fuel on which a surcharge under AS 43.40.005 or 06 the tax under AS 43.40.010(a) or (b) was previously paid is entitled to a credit or 07 refund of the (1) motor fuel tax if [(1)] the resold fuel is not motor fuel and the 08 requirements of AS 43.40.015 have been fulfilled; or (2) the amount of surcharge or 09 tax previously paid exceeds the surcharge or tax due on the resale. The amount of the 10 credit or refund under this section is equal to the amount of the surcharge or tax 11 previously paid on the resold fuel less the amount of the surcharge or tax prescribed 12 by AS 43.40.005 or 43.40.010(a) or (b), respectively [AS 43.40.010(a) OR (b)]. 13 * Sec. 11. AS 43.40.035(c) is amended to read: 14 (c) For motor fuel sold to federal, state, and local government agencies for 15 official use and purchased with a government credit card, the credit card issuer may 16 apply for a refund of any motor fuel tax assessed on the purchase if the tax is not 17 billed by the credit card issuer to the government agency making the purchase. For 18 refined fuel sold to federal agencies for official use and purchased with a 19 government credit card, the credit card issuer may apply for a refund of any 20 refined fuel surcharge assessed on the purchase if the surcharge is not billed by 21 the credit card issuer to the government agency making the purchase. 22 * Sec. 12. AS 43.40.050(b) is amended to read: 23 (b) A claim for refund under AS 43.40.030 or 43.40.035 shall be filed within 24 one year after [FROM] the date of the purchase of the refined or motor fuel as 25 indicated on the invoice, and failure to file within the one-year period is a waiver of 26 the right to the refund. A claim is considered to be filed when the claim is mailed or 27 personally presented to an office of the department. 28 * Sec. 13. AS 43.40.060 is amended to read: 29 Sec. 43.40.060. Separate invoices. The department may require the issuance 30 of separate invoices for refined or motor fuel sold, distributed, or transferred when 31 the invoices will be the basis for a refund claim.
01 * Sec. 14. AS 43.40.070 is amended to read: 02 Sec. 43.40.070. Refund warrants. Upon approval of a refund claim of the 03 motor fuel tax by the department, a disbursement shall be made from the highway 04 fuel tax account in the general fund in favor of the applicant in the amount of the 05 claim. 06 * Sec. 15. AS 43.40.070 is amended by adding a new subsection to read: 07 (b) Upon approval of a refund claim of the refined fuel surcharge by the 08 department, a disbursement shall be made from the oil and hazardous substance 09 release prevention account of the oil and hazardous substance release prevention and 10 response fund established in AS 46.08.010 in favor of the applicant in the amount of 11 the claim. 12 * Sec. 16. AS 43.40.080(a) is amended to read: 13 (a) To determine the validity of a claim for refund, the department may 14 examine the books and records of the claimant and the books and records of a 15 distributor of the refined or motor fuel. The department may cancel the refund 16 [PERMIT] of a [THE] claimant relying on [UPON] a fraudulent invoice [FOR A 17 PERIOD OF NOT MORE THAN ONE YEAR]. 18 * Sec. 17. AS 43.40.085 is amended to read: 19 Sec. 43.40.085. Preservation of books and records. Dealers and users shall 20 preserve for three years all books and records pertaining to sales, transfers, and uses of 21 refined or motor fuel that are subject to a surcharge or tax [TAXED] under this 22 chapter. 23 * Sec. 18. AS 43.40.092(a) is amended to read: 24 (a) The provisions of this section apply to disallow the exemption from the 25 motor fuel tax for motor fuel sold for use by a dealer or used by a user in jet 26 propulsion aircraft operating in flights that continue from foreign countries if, for 27 motor fuel produced by a refiner, 28 (1) the refiner determines, on or after July 1, 1997, that the refiner will 29 expand capacity or expand the refinery to produce more residual fuel oil used in 30 watercraft; 31 (2) on or after the July 1, 1997, the refiner has voluntarily committed
01 by agreement entered into with the commissioner that, if the refiner expands its oil 02 refining capacity in order to produce additional supplies of fuel for use in jet 03 propulsion aircraft that qualify for the tax exemption, when the refiner expands 04 capacity, the refiner will 05 (A) use the refiner's best efforts to advertise for, recruit, and 06 employ in the construction activities associated with expanding refinery 07 capacity resident workers who have experience in the specific fields in which 08 they are hired to work; 09 (B) contract with licensed Alaska firms to prepare materials 10 that are used in construction activities and to provide services in conjunction 11 with activities associated with expanded refinery capacity and, in contracting 12 with those firms, to encourage the refiner's contractors to employ and, when 13 necessary, train state residents; and 14 (C) enter into contracts with Alaska-licensed vendors, 15 contractors, and suppliers for the provision of supplies and services used in 16 conjunction with activities associated with expanding refinery capacity; and 17 (3) the commissioner determines that a dealer or user claiming the 18 exemption for motor fuel acquired from a refiner who has entered into an agreement 19 described in (2) of this subsection acquired the motor fuel for which the exemption is 20 claimed from a refiner who has not complied with the requirements of the agreement 21 in completing expansion of its oil refining capacity under the agreement described in 22 (1) of this subsection. 23 * Sec. 19. AS 43.40 is amended by adding a new section to read: 24 Sec. 43.40.094. Qualified dealer license. (a) A dealer is eligible for a qualified 25 dealer license if the dealer sells at least 50 percent of fuel acquired to unrelated 26 persons for any combination of the following purposes: 27 (1) resale; 28 (2) use in heating private or commercial buildings or facilities; 29 (3) use in jet propulsion aircraft; 30 (4) motor fuel. 31 (b) A person applying for a qualified dealer license must use a form or format
01 prescribed by the department. At the time of application, the applicant must provide an 02 estimate of the average number of gallons of fuel subject to surcharge or tax each 03 month during a calendar year, and state the estimated amount of surcharge and tax on 04 those gallons. A license issued under this section is not transferable. 05 (c) The department may not issue or renew a qualified dealer license if 06 (1) the department finds that the applicant or qualified dealer has 07 withheld information required in the application or that the information submitted in 08 the application is false or misleading; 09 (2) the applicant, or a responsible person of a business organization 10 that is applying for the license, has been convicted within the last 10 years, in this state 11 or in any other taxing jurisdiction, of crimes involving a fuel surcharge or tax; 12 (3) the qualified dealer fails to comply with a requirement of this 13 chapter; 14 (4) the qualified dealer has failed to pay in full the surcharge, taxes, 15 interest, and penalties levied under AS 43.05 or this chapter. 16 (d) The department may 17 (1) issue only one qualified dealer license to each person; 18 (2) put additional limitations on the applicant or holder of a qualified 19 dealer license. 20 (e) A license issued under this section expires on June 30 following the date of 21 issue. Before a license issued under this section expires, the licensee may apply to 22 renew the license, on a form or in a format prescribed by the department, for one year 23 after the expiration date of the license. 24 (f) If the department determines a qualified dealer license may not be issued or 25 renewed under this section, the department shall mail or electronically deliver a notice 26 of license denial or nonrenewal to the person whose license was denied or not 27 renewed. The person may appeal a notice of license denial or nonrenewal not later 28 than 10 days after the date the notice was mailed or electronically delivered. 29 (g) The department may, at the time an applicant applies for a qualified dealer 30 license, require the applicant to file a bond or other security with the department in an 31 amount equal to twice the estimated surcharge and tax due to the department in one
01 month, or $5,000, whichever is greater. 02 (h) The department may adopt regulations to implement this section, including 03 regulations relating to the revocation of a license. 04 * Sec. 20. AS 43.40.100(1) is amended to read: 05 (1) "dealer" means a person who sells or otherwise transfers in this 06 state refined or motor fuel upon which the surcharge or tax [TAXES] imposed by 07 this chapter has [HAVE] not been paid; 08 * Sec. 21. AS 43.40.100(3) is amended to read: 09 (3) "qualified dealer" means a person who (A) refines, (B) imports, (C) 10 manufactures, (D) produces, (E) compounds, or (F) wholesales refined or motor fuel 11 [, WHO SATISFIES CRITERIA FOR QUALIFIED DEALERS ESTABLISHED BY 12 THE DEPARTMENT BY REGULATION, AND WHO OBTAINS A QUALIFIED 13 DEALER'S LICENSE FROM THE DEPARTMENT]; 14 * Sec. 22. AS 43.40.100(4) is amended to read: 15 (4) "user" means a person consuming or using refined or motor fuel, 16 who 17 (A) purchases the fuel out of the state and ships it into the state 18 for personal use in the state; 19 (B) manufactures the fuel in the state; or 20 (C) purchases or receives fuel in the state that is not subject to 21 the surcharge or tax under this chapter [TAXED] at the time of purchase or 22 receipt or is subject to a surcharge or tax [TAXED AT A RATE] that is less 23 than the rate prescribed by AS 43.40.005 or 43.40.010 [AS 43.40.010]. 24 * Sec. 23. AS 43.40.100 is amended by adding a new paragraph to read: 25 (5) "refined fuel" means fuel produced from oil that is used in an 26 engine, machine, or contrivance that creates heat, energy, or power. 27 * Sec. 24. AS 43.40.010(c) is repealed. 28 * Sec. 25. The uncodified law of the State of Alaska is amended by adding a new section to 29 read: 30 QUALIFIED DEALER LICENSE; REGULATIONS. To the extent current 31 regulations are consistent with this Act, the regulations previously adopted by the Department
01 of Revenue relating to qualified dealers and qualified dealer licenses under AS 43.40.100 02 shall apply to qualified dealers and qualified dealer licenses until the regulations are amended 03 to be consistent with this Act. 04 * Sec. 26. This Act takes effect July 1, 2015.