An Act To Reform Maine's Motor Fuel Tax Laws

Sec. 1. 36 MRSA §2903, sub-§1, as amended by PL 2001, c. 688, §1, is further amended to read:

Sec. 2. 36 MRSA §2903, sub-§1-D is enacted to read:

Sec. 3. 36 MRSA §2903, sub-§6, as reallocated by RR 2007, c. 2, §21, is amended to read:

Sec. 4. 36 MRSA §3203, sub-§1-B, as enacted by PL 2007, c. 650, §2, is amended to read:

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 |

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 |

(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:

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 |

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 |

(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:

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:

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.