Bill Text: IA HF2441 | 2013-2014 | 85th General Assembly | Introduced

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Bill Title: A bill for an act concerning the excise tax on compressed natural gas and liquefied natural gas used as special fuel. (Formerly HF 2149)

Spectrum: Committee Bill

Status: (Introduced - Dead) 2014-03-18 - Withdrawn. H.J. 530. [HF2441 Detail]

Download: Iowa-2013-HF2441-Introduced.html

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House File 2441 - Introduced
HOUSE FILE 2441
BY COMMITTEE ON WAYS AND MEANS
(SUCCESSOR TO HF 2149)
A BILL FOR
An Act concerning the excise tax on compressed natural gas and
liquefied natural gas used as special fuel.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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Section 1. Section 452A.2, Code 2014, is amended by adding
the following new subsection:
NEW SUBSECTION . 20A. a. “Gallon” , with respect to
compressed natural gas, means a gasoline gallon equivalent. A
gasoline gallon equivalent of compressed natural gas is five
and sixty-six hundredths pounds or one hundred twenty-six
and sixty-seven hundredths cubic feet measured at a base
temperature of 60 degrees Fahrenheit and a pressure of fourteen
and seventy-three hundredths pounds per square inch absolute.
b. “Gallon” , with respect to liquefied natural gas, means
a diesel gallon equivalent. A diesel gallon equivalent of
liquefied natural gas is six and six hundredths pounds.
Sec. 2. Section 452A.2, subsections 24 and 25, Code 2014,
are amended to read as follows:
24. “Licensed compressed natural gas , liquefied natural
gas, and liquefied petroleum gas dealer” means a person in the
business of handling untaxed compressed natural gas , liquefied
natural gas, or liquefied petroleum gas who delivers any part
of the fuel into a fuel supply tank of any motor vehicle.
25. “Licensed compressed natural gas , liquefied natural gas,
and liquefied petroleum gas user” means a person licensed by
the department who dispenses compressed natural gas , liquefied
natural gas, or liquefied petroleum gas, upon which the special
fuel tax has not been previously paid, for highway use from
fuel sources owned and controlled by the person into the fuel
supply tank of a motor vehicle, or commercial vehicle owned or
controlled by the person.
Sec. 3. Section 452A.3, subsection 4, Code 2014, is amended
to read as follows:
4. For compressed natural gas used as a special fuel, the
rate of tax that is equivalent to the motor fuel tax shall
be sixteen cents per hundred cubic feet adjusted to a base
temperature of sixty degrees Fahrenheit and a pressure of
fourteen and seventy-three hundredths pounds per square inch
absolute is twenty-one cents per gallon .
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Sec. 4. Section 452A.3, Code 2014, is amended by adding the
following new subsection:
NEW SUBSECTION . 4A. For liquefied natural gas used as a
special fuel, the rate of tax is twenty-two and one-half cents
per gallon.
Sec. 5. Section 452A.4, subsection 1, paragraph d, Code
2014, is amended to read as follows:
d. A dealer’s or user’s license shall be required for
each separate place of business or location where compressed
natural gas , liquefied natural gas, or liquefied petroleum gas
is delivered or placed into the fuel supply tank of a motor
vehicle.
Sec. 6. Section 452A.8, subsection 2, paragraph e, Code
2014, is amended to read as follows:
e. (1) For purposes of this paragraph “e” , “dealer” or
“user” means a licensed compressed natural gas, liquefied
natural gas, and liquefied petroleum gas dealer or user and
“fuel” means compressed natural gas, liquefied natural gas, or
liquefied petroleum gas.
(2) The tax for compressed natural gas , liquefied natural
gas, and liquefied petroleum gas delivered by a licensed
compressed natural gas or liquefied petroleum gas dealer for
use in this state shall attach at the time of the delivery and
shall be collected by the dealer from the consumer and paid
to the department as provided in this chapter . The tax, with
respect to compressed natural gas , liquefied natural gas, and
liquefied petroleum gas acquired by a consumer in any manner
other than by delivery by a licensed compressed natural gas
or liquefied petroleum gas dealer into a fuel supply tank of
a motor vehicle, attaches at the time of the use of the fuel
and shall be paid over to the department by the consumer as
provided in this chapter .
(2) (3) The department shall adopt rules governing the
dispensing of compressed natural gas , liquefied natural gas,
and liquefied petroleum gas by licensed dealers and licensed
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users. The director may require by rule that reports and
returns be filed by electronic transmission. For purposes
of this paragraph “e” , “dealer” and “user” mean a licensed
compressed natural gas or liquefied petroleum gas dealer or
user and “fuel” means compressed natural gas or liquefied
petroleum gas. The department shall require that all pumps
located at dealer locations and user locations through which
liquefied petroleum gas can be dispensed shall be metered,
inspected, tested for accuracy, and sealed and licensed by
the state department of agriculture and land stewardship, and
that fuel delivered into the fuel supply tank of any motor
vehicle shall be dispensed only through tested metered pumps
and may be sold without temperature correction or corrected to
a temperature of sixty 60 degrees. If the metered gallonage
is to be temperature-corrected, only a temperature-compensated
meter shall be used. Natural gas used as fuel shall be
delivered into compressing equipment through sealed meters
certified for accuracy by the department of agriculture and
land stewardship.
(3) (4) (a) All gallonage which is not for highway use,
dispensed through metered pumps as licensed under this section
on which fuel tax is not collected, must be substantiated by
exemption certificates as provided by the department or by
valid exemption certificates provided by the dealers, signed by
the purchaser, and retained by the dealer. A “valid exemption
certificate provided by a dealer” is an exemption certificate
which is in the form prescribed by the director to assist a
dealer to properly account for fuel dispensed for which tax is
not collected and which is complete and correct according to
the requirements of the director.
(b) For the privilege of purchasing liquefied petroleum
gas, dispensed through licensed metered pumps, on a basis
exempt from the tax, the purchaser shall sign exemption
certificates for the gallonage claimed which is not for highway
use.
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(c) The department shall disallow all sales of gallonage
which is not for highway use unless proof is established by the
certificate. Exemption certificates shall be retained by the
dealer for a period of three years.
(4) (5) (a) For the purpose of determining the amount
of liability for fuel tax, each dealer and each user shall
file with the department not later than the last day of the
month following the month in which this division becomes
effective and not later than the last day of each calendar
month thereafter a monthly tax return certified under penalties
for false certification. The return shall show, with reference
to each location at which fuel is delivered or placed by the
dealer or user into a fuel supply tank of any motor vehicle
during the next preceding calendar month, information as
required by the department.
(b) The amount of tax due shall be computed by multiplying
the appropriate tax rate per gallon by the number of gallons
of fuel delivered or placed by the dealer or user into supply
tanks of motor vehicles.
(c) The return shall be accompanied by remittance in the
amount of the tax due for the month in which the fuel was placed
into the supply tanks of motor vehicles.
Sec. 7. Section 452A.60, unnumbered paragraph 1, Code 2014,
is amended to read as follows:
The department of revenue or the state department of
transportation shall prescribe and furnish all forms, as
applicable, upon which reports, returns, and applications shall
be made and claims for refund presented under this chapter
and may prescribe forms of record to be kept by suppliers,
restrictive suppliers, importers, exporters, blenders, common
carriers, contract carriers, licensed compressed natural gas ,
liquefied natural gas, and liquefied petroleum gas dealers
and users, terminal operators, nonterminal storage facility
operations, and interstate commercial motor vehicle operators.
Sec. 8. Section 452A.62, subsection 1, paragraph a,
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subparagraph (2), Code 2014, is amended to read as follows:
(2) A licensed compressed natural gas , liquefied natural
gas, or liquefied petroleum gas dealer, user, or person
supplying compressed natural gas or liquefied petroleum gas to
a licensed compressed natural gas , liquefied natural gas, or
liquefied petroleum gas dealer or user.
Sec. 9. Section 452A.62, subsection 1, paragraph b, Code
2014, is amended to read as follows:
b. To examine the records, books, papers, receipts, and
invoices of any distributor, supplier, restrictive supplier,
importer, blender, exporter, terminal operator, nonterminal
storage facility, licensed compressed natural gas , liquefied
natural gas, or liquefied petroleum gas dealer or user, or any
other person who possesses fuel upon which the tax has not been
paid to determine financial responsibility for the payment of
the taxes imposed by this chapter .
Sec. 10. Section 452A.74, subsection 1, paragraphs e and g,
Code 2014, are amended to read as follows:
e. For any person to act as a supplier, restrictive
supplier, importer, exporter, blender, or compressed natural
gas , liquefied natural gas, or liquefied petroleum gas dealer
or user without the required license.
g. For any licensed compressed natural gas , liquefied
natural gas, or liquefied petroleum gas dealer or user to
dispense compressed natural gas , liquefied natural gas, or
liquefied petroleum gas into the fuel supply tank of any motor
vehicle without collecting the fuel tax.
Sec. 11. Section 452A.74, subsection 2, Code 2014, is
amended to read as follows:
2. Any delivery of compressed natural gas , liquefied
natural gas, or liquefied petroleum gas to a compressed natural
gas , liquefied natural gas, or liquefied petroleum gas dealer
or user for the purpose of evading the state tax on compressed
natural gas , liquefied natural gas, or liquefied petroleum
gas, into facilities other than those licensed above knowing
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that the fuel will be used for highway use shall constitute
a violation of this section . Any compressed natural gas ,
liquefied natural gas, or liquefied petroleum gas dealer or
user for purposes of evading the state tax on compressed
natural gas , liquefied natural gas, or liquefied petroleum
gas, who allows a distributor to place compressed natural gas ,
liquefied natural gas, or liquefied petroleum gas for highway
use in facilities other than those licensed above, shall also
be deemed in violation of this section .
Sec. 12. Section 452A.85, subsection 1, Code 2014, is
amended to read as follows:
1. Persons having title to motor fuel, ethanol blended
gasoline, undyed special fuel, compressed natural gas,
liquefied natural gas, or liquefied petroleum gas in storage
and held for sale on the effective date of an increase in
the excise tax rate imposed on motor fuel, ethanol blended
gasoline, undyed special fuel, compressed natural gas,
liquefied natural gas, or liquefied petroleum gas under this
chapter shall be subject to an inventory tax based upon the
gallonage in storage as of the close of the business day
preceding the effective date of the increased excise tax rate
of motor fuel, ethanol blended gasoline, undyed special fuel,
compressed natural gas, liquefied natural gas, or liquefied
petroleum gas which will be subject to the increased excise tax
rate.
Sec. 13. Section 452A.86, Code 2014, is amended to read as
follows:
452A.86 Method of determining gallonage.
The exclusive method of determining gallonage of any
purchases or sales of motor fuel, undyed special fuel,
compressed natural gas, or liquefied petroleum gas as defined
in this chapter and distillate fuels shall be on a gross volume
basis , except for compressed natural gas and liquefied natural
gas . The exclusive method of determining gallonage of any
purchases or sales of compressed natural gas is the gasoline
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gallon equivalent, as defined in section 452A.2, subsection
20A. The exclusive method of determining gallonage of any
purchase or sale of liquefied natural gas is the diesel gallon
equivalent, as defined in section 452A.2, subsection 20A.
A temperature-adjusted or other method shall not be used,
except as it applies to liquefied petroleum gas and the sale
or exchange of petroleum products between petroleum refiners.
All invoices, bills of lading, or other records of sale or
purchase and all returns or records required to be made, kept,
and maintained by a supplier, restrictive supplier, importer,
exporter, blender, or compressed natural gas , liquefied natural
gas, or liquefied petroleum gas dealer or user shall be made,
kept, and maintained on the gross volume basis. For purposes
of this section , “distillate fuels” means any fuel oil, gas oil,
topped crude oil, or other petroleum oils derived by refining
or processing crude oil or unfinished oils which have a boiling
range at atmospheric pressure which falls completely or in part
between five hundred fifty 550 and twelve hundred 1,200 degrees
Fahrenheit.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
This bill revises the method of calculating the excise tax
on compressed natural gas (CNG) used as a special fuel and
establishes an excise tax on liquefied natural gas (LNG) used
as a special fuel.
For CNG, the rate of tax is 21 cents per gallon. The bill
provides that the term “gallon”, with respect to CNG, means a
gasoline gallon equivalent, which is 5.66 hundredths pounds or
126.67 cubic feet measured at a base temperature of 60 degrees
Fahrenheit and a pressure of 14.73 pounds per square inch
absolute. (Under current law, the rate of the tax is based on
cubic feet rather than pounds: 16 cents per 100 cubic feet
adjusted to a base temperature of 60 degrees Fahrenheit and a
pressure of 14.73 pounds per square inch absolute.) The bill
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provides that the exclusive method of determining gallonage of
any purchase or sales of CNG is the gasoline gallon equivalent.
For LNG, the rate of tax is 22.5 cents per gallon, and the
term “gallon”, with respect to LNG, means a diesel gallon
equivalent, which is 6.06 pounds of LNG. The bill provides
that the exclusive method of determining gallonage of any
purchase or sales of LNG is the diesel gallon equivalent.
The bill makes conforming changes to various Code sections
to include LNG in current provisions relating to the collection
of the excise tax on special fuel.
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