Bill Summary – FastDemocracy

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68th Legislature 2023                                                                                               HB 823.1
                                                 HOUSE BILL NO. 823
                                              INTRODUCED BY D. LOGE
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  A BILL FOR AN ACT ENTITLED: “AN ACT REVISING ALTERNATIVE FUEL TAX LAWS; PROVIDING FOR
  AN ALTERNATIVE FUEL DEALERS LICENSE; PROVIDING FOR A TAX ON HYDROGEN FUEL AND
  OTHER ALTERNATIVE FUELS EQUAL TO THE GASOLINE GALLON EQUIVALENCY; PROVIDING
  DEFINITIONS; AMENDING SECTIONS 15-70-123, 15-70-124, 15-70-701, 15-70-702, 15-70-703, 15-70-704,
  15-70-705, 15-70-706, 15-70-707, 15-70-711, 15-70-712, 15-70-713, 15-70-714, 15-70-715, 15-70-716, 15-70-
  717, AND 15-70-718, MCA; AND PROVIDING EFFECTIVE DATES.”
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  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
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           Section 1. Section 15-70-123, MCA, is amended to read:
           "15-70-123. Report by unlicensed petroleum fuel dealer -- definition -- penalty. (1) The
  department of transportation may require a petroleum fuel dealer who is not licensed by the department under
  Title 15, chapter 70, to file, within 30 days of the end of a quarter, on a form prescribed by the department a
  report of the amount of fuel received and sold during the quarter. The report must also contain other information
  as required by the department.
           (2)     As used in this section, "petroleum fuel dealer" means a dealer who:
           (a)     is directly or indirectly engaged in delivering, transporting, or distributing gasoline, aviation
  gasoline, special fuel, liquefied petroleum gas (LPG), or compressed natural gas (CNG) or alternative fuel in
  this state; or
           (b)     offers or advertises to sell, refine, manufacture, or store gasoline, aviation gasoline, special
  fuel, liquefied petroleum gas (LPG), or compressed natural gas (CNG) or alternative fuel in this state.
           (3)     A petroleum fuel dealer who fails to file the report required by subsection (1) shall be fined $50
  for the first offense, $75 for the second offense, and $100 for the third and each subsequent offense."
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           Section 2. Section 15-70-124, MCA, is amended to read:
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68th Legislature 2023                                                                                              HB 823.1
          "15-70-124. Agreements with other governmental entities relating to collection of certain fuel
  taxes. (1) The department of transportation may enter into agreements relating to the administration and
  taxation of gasoline, special fuels, and liquefied petroleum gas alternative fuels with state agencies of this state
  and other states, agencies of the federal government, and agencies of foreign governments and provinces.
          (2)      The agreements may cover audits, exchange of information, licensure of sellers and users,
  distribution, and other matters that the department considers necessary for the administration of the taxation of
  gasoline, special fuels, and liquefied petroleum gas alternative fuels. In an agreement, the department may not
  delegate powers to another governmental entity that involve levying fines, forfeitures, or penalties or that allow
  the other governmental entity to revoke or otherwise impair a license or permit issued by the department."
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          Section 3. Section 15-70-701, MCA, is amended to read:
          "15-70-701. Definitions. As used in this part, the following definitions apply:
          (1)      (a) "Alternative fuel" means a gas, liquid, or other fuel that, with or without adjustment or
  manipulation such as adjustment or manipulation of pressure or temperature, is capable of being used for the
  generation of power to propel a motor vehicle. The term includes but is not limited to compressed natural gas,
  liquefied natural gas, liquefied petroleum gas, hydrogen, or hydrogen compressed natural gas, such as
  hythane.
          (b)      The term does not include motor fuel, leaded racing fuel, or an excluded liquid.
          (2)      "Alternative fuel dealer" means a person that is licensed or required to be licensed under 15-
  70-702 that delivers alternative fuel into the fuel supply tank or tanks of a motor vehicle.
          (1)(3)   "Bond" means:
          (a)      a bond executed by a compressed natural gas dealer or a liquefied petroleum gas an
  alternative fuel dealer as principal with a corporate surety qualified under the laws of Montana, payable to the
  state of Montana, conditioned upon on performance of all requirements of this part, including the payment of all
  taxes, penalties, and other obligations of the compressed natural gas dealer or the liquefied petroleum gas
  alternative fuel dealer arising out of this part; or
          (b)      a deposit with the department by the compressed natural gas dealer or the liquefied petroleum
  gas alternative fuel dealer, under terms and conditions that the department may prescribe, of certificates of
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68th Legislature 2023                                                                                           HB 823.1
  deposit or irrevocable letters of credit issued by a bank and insured by the federal deposit insurance
  corporation.
           (2)(4)   "Compressed natural gas" means a product that is used as a fuel and that contains carbon or
  hydrogen, or both, and is compressed to greater than 24 pounds per square inch absolute base pressure and
  up to 3,600 pounds per square inch absolute base pressure when sold for use in motor vehicles operated on
  the public roads and highways of this state.
           (3)   "Compressed natural gas dealer" or "dealer" means a person who delivers any part of
  compressed natural gas into the fuel supply tank or tanks of a motor vehicle.
           (4)(5)   "Department" means the department of transportation.
           (6)      "Hydrogen fuel" means fuel that produces electricity by combining hydrogen and oxygen
  atoms.
           (5)(7)   "Liquefied petroleum gas" means any petroleum product that is sold for use in motor vehicles
  and that is composed predominantly of any of the following hydrocarbons or mixtures of hydrocarbons:
           (a)      propane;
           (b)      propylene;
           (c)      butane, including normal butane or isobutane; or
           (d)      butylene.
           (6)   "Liquefied petroleum gas dealer" or "dealer" means a person who delivers any part of liquefied
  petroleum gas into the fuel supply tank or tanks of a motor vehicle.
           (7)(8)   "Motor vehicle" means any vehicle that is self-propelled by compressed natural gas or by
  liquefied petroleum gas alternative fuel and that is driven upon on the public roads and highways of this state.
           (8)(9)   (a) "Person" means a person, firm, association, joint-stock company, syndicate, partnership, or
  corporation.
           (b)      When used in any clause prescribing and imposing a fine or imprisonment, or both, as applied
  to a firm, association, syndicate, or partnership, person means the partners or members of a firm, association,
  syndicate, or partnership. As applied to a joint-stock company or corporation, the term means the officers of the
  joint-stock company or corporation.
           (9)(10) "Public roads and highways of this state" means all streets, roads, highways, and related
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68th Legislature 2023                                                                                             HB 823.1
  structures that are:
          (a)      built and maintained with appropriated funds of the United States, the state of Montana, or any
  political subdivision of the state;
          (b)      dedicated to public use;
          (c)      acquired by eminent domain, as provided in Title 60, chapter 4, or Title 70, chapter 30; or
          (d)      acquired by adverse use by the public, with jurisdiction having been assumed by the state or
  any political subdivision of the state."
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          Section 4. Section 15-70-702, MCA, is amended to read:
          "15-70-702. Compressed natural gas dealer's or liquefied petroleum gas Alternative fuel
  dealer's license. A person may not act as a compressed natural gas dealer or as a liquefied petroleum gas an
  alternative fuel dealer in this state unless the person holds a valid compressed natural gas dealer's license or a
  valid liquefied petroleum gas alternative fuel dealer's license issued by the department."
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          Section 5. Section 15-70-703, MCA, is amended to read:
          "15-70-703. Application for license. An application for a compressed natural gas dealer's license or
  a liquefied petroleum gas an alternative fuel dealer's license must be filed on a form prescribed by the
  department. The application must contain information that the department considers necessary."
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          Section 6. Section 15-70-704, MCA, is amended to read:
          "15-70-704. Bonding, release of surety, and additional bond. (1) Except as provided in this
  section, a compressed natural gas dealer's license or a liquefied petroleum gas an alternative fuel dealer's
  license may not be issued to a person and may not be continued in force unless the person has furnished a
  bond, in a form prescribed by the department, to secure the dealer's compliance with this part and has paid all
  taxes, interest, and penalties due under this part. The department shall waive the bond requirement of a
  compressed natural gas dealer or a liquefied petroleum gas an alternative fuel dealer who is not subject to the
  provisions of subsection (2)(a) or (2)(b).
          (2)      The total amount of the bond or bonds required must be equivalent to twice the compressed
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68th Legislature 2023                                                                                            HB 823.1
  natural gas dealer's or the liquefied petroleum gas alternative fuel dealer's estimated quarterly tax payments but
  may not be less than $1,000 for any compressed natural gas dealer or liquefied petroleum gas alternative fuel
  dealer who:
          (a)      requests a compressed natural gas dealer's or a liquefied petroleum gas an alternative fuel
  dealer's license to be reissued after the license was canceled for cause; or
          (b)      fails to file timely reports and pay the tax due as required by 15-70-714.
          (3)      A surety on a bond furnished as provided in this section must be released and discharged from
  any liability to the state accruing on the bond after 30 days from the date when the surety has provided to the
  department a written request to be released and discharged. However, this provision may not operate to
  relieve, release, or discharge the surety from any liability already accrued or that accrues before the expiration
  of the 30-day period. Upon On receiving a release request, the department shall promptly notify the
  compressed natural gas dealer or the liquefied petroleum gas alternative fuel dealer who furnished the bond,
  and unless the dealer, on or before the expiration of the 30-day period, files a new bond in accordance with the
  requirements of this section or makes a deposit in lieu of a bond as described in 15-70-701(1)(b) 15-70-
  701(3)(b), the department shall cancel the dealer's license.
          (4)      The department may require a compressed natural gas dealer or a liquefied petroleum gas an
  alternative fuel dealer to give a new or additional surety bond or to deposit additional securities pursuant to 15-
  70-701(1)(b) 15-70-701(3)(b) if the department determines that the security of the surety bond previously filed
  by the dealer or the market value of the property deposited as security by the dealer is impaired or inadequate.
  If the compressed natural gas dealer or the liquefied petroleum gas alternative fuel dealer fails to give an
  additional surety bond or to deposit additional securities within 30 days after being requested to do so by the
  department, the department shall cancel the dealer's license."
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          Section 7. Section 15-70-705, MCA, is amended to read:
          "15-70-705. Issuance of license -- grounds for refusal -- hearing. (1) Except as provided in
  subsection (2), upon on receipt of the application and bond in proper form, the department shall issue to the
  applicant a license to act as a compressed natural gas dealer or as a liquefied petroleum gas an alternative fuel
  dealer. A license is valid until suspended, revoked for cause, or otherwise canceled.
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68th Legislature 2023                                                                                              HB 823.1
           (2)     The department may refuse to issue a compressed natural gas dealer's license or a liquefied
  petroleum gas an alternative fuel dealer's license to any person:
           (a)     who formerly held a license that, prior to the time of filing the application, has been revoked for
  cause;
           (b)     who is not the real party in interest, and the license of the real party in interest has been
  revoked for cause prior to the time of filing the application; or
           (c)     upon on other sufficient cause being shown.
           (3)     Before refusing to issue a license, the department shall grant the applicant a hearing and shall
  provide the dealer with at least 10 days' written notice of the time and place of hearing.
           (4)     A compressed natural gas dealer's license or a liquefied petroleum gas An alternative fuel
  dealer's license is not transferable."
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           Section 8. Section 15-70-706, MCA, is amended to read:
           "15-70-706. Revocation of license -- notice. (1) The department may revoke the license of any
  compressed natural gas dealer or liquefied petroleum gas alternative fuel dealer for reasonable cause. Before
  revoking a license, the department shall notify the licensee of the department's intent to revoke the license. The
  notice must be made by certified mail addressed to the licensee's last-known address shown in the files of the
  department. The notice must include a statement that the licensee has the right to appear before the
  department at a time specified in the notice and to show cause, if any, why the license should not be revoked.
  The time specified by the department may not be more than 30 days or less than 10 days from the date of the
  notice. At any time prior to and during the hearing, the department may in the exercise of reasonable discretion
  suspend the license.
           (2)     Upon On revocation of a license, the licensee shall immediately surrender the license to the
  department for cancellation."
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           Section 9. Section 15-70-707, MCA, is amended to read:
           "15-70-707. Cancellation of license upon on surrender. The department shall cancel a license to
  act as a compressed natural gas dealer or as a liquefied petroleum gas an alternative fuel dealer immediately
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68th Legislature 2023                                                                                              HB 823.1
  upon on surrender of the license by the licensee."
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             Section 10. Section 15-70-711, MCA, is amended to read:
             "15-70-711. Tax on compressed natural gas, hydrogen fuel, -- tax on liquefied petroleum gas,
  and alternative fuels. (1) Each compressed natural gas An alternative fuel dealer shall collect the tax on
  compressed natural gas from the user at the time that the compressed natural gas is placed into the supply
  tank of a motor vehicle.
             (2)     (a) The total tax due on compressed natural gas is computed according to the formula provided
  in subsection (2)(b).
             (b)     T = (R/V) x TV, where:
             (i)     T is the total tax due;
             (ii)    R is 7 cents;
             (iii)   V is 120 cubic feet of compressed natural gas at 14.73 pounds per square inch absolute base
  pressure; and
             (iv)    TV is the total volume of compressed natural gas placed into the supply tank of a motor
  vehicle.
             (3)     The compressed natural gas alternative fuel dealer shall pay the tax to the department as
  provided in 15-70-714.
             (4)     Each liquefied petroleum gas An alternative fuel dealer shall collect the tax on liquefied
  petroleum gas from the user at the time that the liquefied petroleum gas is placed into the supply tank of a
  motor vehicle.
             (5)     (a) The total tax due on liquefied petroleum gas is computed according to the formula provided
  in subsection (5)(b).
             (b)     T = (C/G) x TG, where:
             (i)     T is the total tax due;
             (ii)    C is 5.18 cents;
             (iii)   G is 1 gallon of liquefied petroleum gas; and
             (iv)    TG is the total gallons of liquefied petroleum gas placed into the supply tank of a motor vehicle.