Administrative Rules of the State of Montana

BEFORE THE DEPARTMENT OF TRANSPORTATION

OF THE STATE OF MONTANA

In the matter of the adoption of New Rules I through V; transfer and amendment of ARM 18.9.101, 18.9.102, 18.9.103, 18.9.104, 18.9.105, 18.9.108, 18.9.109, 18.9.111, 18.9.116, 18.9.117, 18.9.118, 18.9.201, 18.9.202, 18.9.203, 18.9.204, 18.9.205, 18.9.302, 18.9.303, 18.9.306, 18.9.311, 18.9.312, 18.9.321, 18.9.326, 18.9.401, 18.9.403, 18.9.501, 18.9.703, 18.9.705, 18.10.103, 18.10.104, 18.10.105, 18.10.108, 18.10.110, 18.10.111, 18.10.112, 18.10.121, 18.10.124, 18.10.125, 18.10.313, 18.10.314, 18.10.324, 18.10.406, 18.10.407, 18.11.102, 18.11.103, 18.11.104; 18.11.105, 18.11.106; transfer of ARM 18.9.603, 18.9.605, 18.9.606, 18.9.607, 18.9.608, 18.9.701, 18.10.106, 18.10.503, 18.10.504, 18.10.505, 18.10.506, 18.10.507; and repeal of ARM 18.9.112, 18.9.325, 18.9.402, 18.9.601, 18.9.602, 18.9.704, 18.10.107, 18.10.201, 18.10.202, 18.10.301, 18.10.302, 18.10.321,18.10.322,18.10.323,18.10.404, and 18.11.101 pertaining to Motor Fuels Tax

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NOTICE OF PROPOSED ADOPTION, TRANSFER AND AMENDMENT, TRANSFER, AND REPEAL

NO PUBLIC HEARING CONTEMPLATED

TO: All Concerned Persons

1. On September 5, 2016, the Department of Transportation proposes to adopt, transfer and amend, transfer, and repeal 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 August 26, 2016, to advise us of the nature of the accommodation that you need. Please contact Tracy Halubka, Department of Transportation, Motor Fuels Section, P.O. Box 201001, Helena, Montana, 59620-1001; telephone (406) 444-0806; fax (406) 444-5411; TTY Service (406) 444-7696 or (800) 335-7592; or e-mail [email protected].

3. GENERAL STATEMENT OF REASONABLE NECESSITY The 2015 Legislature enacted Chapter 220, Laws of 2015 (House Bill 99), an act generally revising the administration of gasoline and special fuel taxes; and combining the gasoline tax and special fuel tax into one part of law. The bill combined previously separate chapters on basic gasoline license tax and special fuel users tax to more accurately reflect their common tax methods and update tax collection methods now being done through the International Fuel Tax Agreement (IFTA) processes. The bill became effective October 1, 2015.

The department is adopting New Rules I through V and amending other existing rules to conform to the new legislative changes and implement the bill on gasoline and special fuel taxes.

Additional changes include replacing out-of-date terminology for current language and processes, repealing unnecessary or redundant rules, and amending rules and catchphrases for accuracy, consistency, simplicity, better organization, and ease of use for the reader. A transfer table is included to show the new organization of the rules, to better organize existing and new rules in a more logical sequence. Authority and implementation citations are being amended to accurately reflect all statutes implemented through the rules, provide the complete source of the department's rulemaking authority, and delete references to repealed statutes. Where additional specific bases for a proposed action exist, the department will identify those reasons immediately following that rule.

4. The rules as proposed to be adopted provide as follows:

NEW RULE I DEFINITIONS The following definitions apply in this chapter:

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

(2) "Automobile" is a self-propelled passenger vehicle that usually has four wheels and an internal combustion engine and is not a pick-up truck or truck. This vehicle is commonly referred to as a car or automobile.

(3) "Bulk storage" means a container or tank holding any fuels for storage, other than the supply tank of a motor vehicle or any internal combustion engine or motor fuel placed in storage at refineries or pipeline terminals.

(4) "Combination" is a motor vehicle used, designed, or maintained for transportation of persons or property and has two or more axles whose gross weight exceeds 46,000 pounds or a combination of vehicles whose combined licensed weight exceeds 46,000 pounds.

(5) "Consecutive twelve months" means state fiscal year, July 1 through June 30.

(6) "Department" means the Department of Transportation.

(7) "Division" means the administration division, Department of Transportation.

(8) "EDI" means Electronic Data Interchange.

(9) "EFT" means Electronic Funds Transfer.

(10) "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.

(11) "Gross earned agricultural or farm income" means all taxable income and wages, before expenses, a person or business receives from: cultivating, operating, or managing a farm for gain or profit, either as owner or tenant; operating a livestock, dairy, poultry, fish, fur-bearing animals, or horticultural commodities business; operating a feed yard for the fattening of cattle; operating a fruit or truck farm; operating an agricultural commodities business; operating a plantation, ranch, range, nursery or orchard; and sale of crop shares if the person materially participates in producing the crop.

(12) "Gross earned income" means all taxable income and wages, before expenses, a person or business earns from: services, sale of goods, working for someone, or working in a business the person owns or operates. Examples of gross earned income generally include but are not limited to: wages, salaries, tips, and other taxable employee pay; union strike benefits; long-term disability benefits received prior to minimum retirement age; earnings from self-employment if the person owns or operates their own business; and gross income received as a statutory employee. Examples of gross income that are not considered earned include: passive income, such as interest, dividends, and capital gains; retirement income; social security; unemployment benefits; alimony; and child support.

(13) "Pick-up truck" is a vehicle licensed under a flat gross vehicle weight (GVW) fee and has a manufacturer's rated capacity of 1/4 ton, 1/2 ton, 3/4 ton, or one ton. This vehicle, regardless of how it is registered and plated, is also commonly known as a pick-up truck, van, or sport utility vehicle.

(14) "Point specified" for purposes of the starting point of the temporary special fuel agricultural permit means the point where the person first crosses the border into Montana.

(15) "Radius" for purposes of measuring the area of the temporary special fuel agricultural permit is measured in air miles.

(16) "Seizure list" means a list containing the names of companies appearing on the warning list that have been issued a notice to appear for improperly importing fuel.

(17) "Taxpayer" means "Person" as described in 15-70-401(18), MCA.

(18) "Truck" is a vehicle licensed under graduating gross vehicle weight (GVW) fees and has a manufacturer's rated capacity exceeding one ton, but not exceeding 46,000 pounds.

(19) "Warning list" means a list established and maintained by the department indicating that a warning notice has been issued to a transporter for improperly importing fuel.

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

AUTH: 15-70-104, 15-70-115, 15-70-522, MCA

IMP: 15-70-403, 15-70-419, 15-70-426, 15-70-430,15-70-455, 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

REASON: The proposed new rule is necessary to combine six existing definitional rules scattered throughout three different ARM chapters into one rule which will apply throughout the entire new Motor Fuels chapter. Three new definitions are also being added at (8), (9), and (17) to define terms used as part of the new electronic filing and payment process.

NEW RULE II DEPARTMENT DETERMINATION OF COST EFFECTIVENESS FOR ACCOUNT WRITE-OFF (1) The department may write-off any tax, penalty, or interest, when the department determines it is no longer cost effective to attempt further collection. The reason for the write-off must be documented in either the system notes or the hard file.

(2) The department's decision to write-off collection of accounts is based on the following:

(a) the department's inability to locate delinquent taxpayers to properly provide notification of assessments or the taxpayer's right to a hearing;

(b) the department's inability to reduce the assessment to a judgment lien by filing a warrant for distraint within a reasonable time;

(c) the anticipated cost of collection significantly exceeds the projected amount of recovery in accordance with existing department collection policies;

(d) the time period for collection provided by law has expired; or

(e) the taxpayer is deceased and the department is unable to locate either an estate or pending probate, or any property or other assets vested in the taxpayer's name.

(3) Unpaid tax obligations are not forgiven and are still payable after the department writes off the obligation and discontinues collection efforts. The department will not actively incur further expense to attempt collection on these obligations, but may resume active collection of an account if:

(a) the time period for collection of the assessment or a filed warrant for distraint has not expired; and

(b) the department receives information which significantly changes the original basis for write-off.

(4) The financial condition of a delinquent taxpayer is not considered for write-off of an obligation unless one or more of the elements set forth in (2) is present, or unless a properly completed closing agreement has been authorized.

(5) Upon the final decision of a United States bankruptcy court, barring further collection of a debt, the department shall write off the obligation and permanently discontinue collection of any tax, penalty, or interest.

AUTH: 15-70-105, MCA

IMP: 15-70-105, MCA

REASON: The proposed new rule is necessary to establish the circumstances under which it is no longer cost-effective to pursue collection of tax, penalty, or interest.

NEW RULE III COORDINATION OF TAX RETURN WITH PAYMENT OF TAX BY EFT (1) To ensure proper receipt and credit of tax return and payment of tax, the department shall assign a unique license number to each taxpayer account based upon the taxpayer identification number provided to the department by the taxpayer. Both the tax return and payment are credited to the specific account identified within the department's electronic file, on receipt.

AUTH: 15-70-115, MCA

IMP: 15-70-115, MCA

REASON: The proposed new rule is necessary to coordinate the filing of tax returns with the payment of taxes by electronic funds transfer and to ensure proper receipt of information and credit of payment.

NEW RULE IV ELECTRONIC FILING STANDARDS AND METHODS

(1) The department shall adopt the Federation of Tax Administrators (FTA), Motor Fuels Tax Section; Uniformity Project standards to receive electronic funds transfer messages, and electronic data interchange which allows receipt of filed tax returns and other required information for taxpayers licensed under 15-70-402, MCA. A copy of the FTA Uniformity Project standards may be obtained at www.taxadmin.org/uniformity-project.

(2) The department shall adopt Motor Fuel Licensing/Reporting Guidelines and post a copy on the department's web page. The department shall provide each taxpayer with instruction to find the guidelines. The department shall notify each licensed taxpayer of any changes prior to implementation of those changes.

(3) A taxpayer may file the required 15-70-410, MCA, monthly statement by EDI, by manually entering detailed schedule information on the department's motor fuel system's web pages, or on paper forms prescribed by the department, for a taxpayer who qualifies under these administrative rules.

(4) The department may contract with a vendor to provide an electronic filing option to taxpayers licensed under the International Fuel Tax Agreement (IFTA) pursuant to 15-70-121, MCA. The department shall provide IFTA Reporting Guidelines to a taxpayer upon licensing and shall notify a licensed taxpayer of any changes prior to implementation of these changes.

AUTH: 15-70-115, MCA

IMP: 15-70-115, MCA

NEW RULE V ELECTRONIC FUNDS TRANSFER (1) A taxpayer licensed under 15-70-402, MCA, may pay electronically by either Automated Clearing House (ACH) credit or ACH debit, and may change methods with no restriction by the department. A taxpayer must provide the department reasonable time to initiate ACH debit by providing accurate banking information at least five days prior to the payment due date as prescribed in 15-70-113, MCA.

(2) A taxpayer licensed under 15-70-121, MCA, may pay electronically through the State of Montana contracted electronic payment process, by any method(s) offered by the contractor.

(3) An electronic funds transfer message must include the company name, account number, and tax period(s) being paid to ensure proper receipt and credit of the payment.

AUTH: 15-70-115, MCA

IMP: 15-70-115, MCA

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

18.9.101 (18.15.201) DETERMINATION OF WHEN GASOLINE, SPECIAL FUEL, OR AVIATION FUEL DISTRIBUTED (1) through (4) remain the same.

AUTH: 15-70-104, MCA

IMP: ~~15-70-201, 15-70-204, 15-70-301, 15-70-321~~ 15-70-401, 15-70-403, MCA

18.9.102 (18.15.202) DISTRIBUTOR'S BOND (1) and (2) remain the same.

AUTH: 15-70-104, MCA

IMP: ~~15-70-202, 15-70-204, 15-70-341~~ 15-70-402, MCA

18.9.103 (18.15.203) DISTRIBUTOR'S STATEMENTS (1) Every distributor must file a monthly distributor's license tax report, on a form furnished by the department within the time prescribed by ~~15-70-205 and/or 15-70-344~~ 15-70-410, MCA. Supporting detail schedules on forms furnished by the department must accompany the distributor's license tax report, with all letters of explanation of credit deduction and the payment of the license tax due.

(2) remains the same.

(3) A licensed distributor who is subject to ~~15-70-205 and/or 15-70-344~~ 15-70-410, MCA, must file electronically in a format prescribed by the department. Licensed distributors who report a combination of 99,999 gallons or less of gasoline and/or special fuel within a year may choose to file electronically or on paper forms prescribed by the department.

(4) remains the same.

(5) The distributor must use the bill of lading number generated by the originating terminal to report each load of fuel.

AUTH: 15-70-104, 15-70-115, MCA

IMP: 15-70-112, 15-70-113, 15-70-114, 15-70-115, ~~15-70-205, 15-70-344~~ 15-70-410, MCA

REASON: The proposed amendment is necessary to clarify a consistent method of reporting each load of fuel.

18.9.104 (18.15.204) DISTRIBUTOR'S RECORDS (1) remains the same.

(2) Every refinery and terminal in the state must submit to the department monthly a copy of each bill of lading issued at the time of withdrawal, or the terminal operator report, upon request. The department may waive the hard copy in lieu of electronic filing format.

AUTH: 15-70-104, 15-70-115, MCA

IMP: 15-70-112, 15-70-113, 15-70-114, 15-70-115, ~~15-70-206, 15-70-345~~ 15-70-411, MCA

REASON: The proposed amendment is necessary to verify that all fuel claimed as exempt from tax based on terminal transfer matches the federal terminal operator report.

18.9.105 (18.15.205) DISTRIBUTOR'S INVOICE (1) and (2) remain the same.

AUTH: 15-70-104, MCA

IMP: ~~15-70-206, 15-70-207, 15-70-345, 15-70-348~~ 15-70-411,15-70-412, MCA

18.9.108 (18.15.210) WHOLESALE DISTRIBUTOR (1) and (1)(a) remain the same.

(b) elects to become licensed under ~~15-70-201 and 15-70-301~~ 15-70-401, MCA, to assume the Montana state gasoline, special fuel, or aviation fuel tax liability and the other obligations of a "distributor" pursuant to Title 15, chapter 70, part~~s 2 and 3~~ 4, MCA, and these rules.

(2) and (3) remain the same.

AUTH: 15-70-104, MCA

IMP: ~~15-70-201, 15-70-301~~ 15-70-401, MCA

18.9.109 (18.15.211) WHOLESALE DISTRIBUTOR'S OBLIGATIONS (1) remains the same.

AUTH: 15-70-104, MCA

IMP: ~~15-70-201, 15-70-202, 15-70-301, 15-70-341~~ 15-70-401, 15-70-402, MCA

18.9.111 (18.15.217) ETHANOL-BLENDED GASOLINE BLENDERS (1) Pursuant to ~~15-70-201~~ 15-70-401, MCA, a person who blends ethanol with gasoline to produce ethanol-blended gasoline is a "distributor" if no tax has been paid on the ethanol or gasoline blended to produce ethanol-blended gasoline. As a distributor, the ethanol-blended gasoline blender is responsible for paying the tax on all the ethanol and gasoline which has not been taxed and which is used to produce ethanol-blended gasoline. If the person qualifies as a distributor solely on the basis of blending ethanol and gasoline, the person is a distributor only with respect to the ethanol and gasoline used to produce ethanol-blended gasoline.

(2) The blending of ethanol with gasoline to produce ethanol-blended gasoline does not make the ethanol-blended gasoline blender a distributor for the purpose of the payment of the tax due on gasoline not blended with ethanol to produce ethanol-blended gasoline. If the ethanol-blended gasoline blender receives gasoline upon which no tax has been paid and not used to produce ethanol-blended gasoline, the blender must qualify as and meet all the requirements to be either a distributor under ~~15-70-201~~ 15-70-401, MCA, or a "wholesale distributor" under ~~15-70-201~~ 15-70-401, 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 ethanol-blended gasoline blender. Only if the ethanol-blended gasoline blender qualifies under these other requirements can that blender purchase gasoline without tax for resale as gasoline.

(3) remains the same.

AUTH: 15-70-104, MCA

IMP: ~~15-70-201, 15-70-204, 15-70-301~~ 15-70-401, MCA

REASON: The proposed amendment is necessary to update statutory references and delete references to repealed statutes.

18.9.116 (18.15.225) INCIDENCE OF THE FUEL TAX (1) remains the same.

AUTH: ~~This rule is advisory only, but may be a correct interpretation of the law,~~ 15-70-104, MCA

IMP: ~~15-70-202, 15-70-341~~ 15-70-402, MCA

18.9.117 (18.15.226) DISTRIBUTOR - SUPPORTING DOCUMENTATION FOR BAD DEBT CREDIT (1) remains the same.

AUTH: 15-70-104, MCA

IMP: ~~15-70-221, 15-70-225, 15-70-328, 15-70-364~~ 15-70-425, 15-70-432, MCA

18.9.118 (18.15.227) PREPAYMENT OF MOTOR FUEL TAXES (1) remains the same.

AUTH: 15-70-104, MCA

IMP: ~~15-70-210, 15-70-352~~ 15-70-417, MCA

18.9.201 (18.15.301) INTRASTATE FUEL DELIVERIES (1) remains the same.

AUTH: 15-70-104, MCA

IMP: ~~15-70-204, 15-70-343~~ 15-70-403, MCA

18.9.202 (18.15.302) EXPORT DELIVERIES (1) through (3) remain the same.

AUTH: 15-70-104, 75-11-319, MCA

IMP: ~~15-70-204, 15-70-221 15-70-356~~ 15-70-403, 15-70-425, MCA

18.9.203 (18.15.303) IMPORT DELIVERIES (1) and (2) remain the same.

AUTH: 15-70-104, MCA

IMP: ~~15-70-204, 15-70-321~~ 15-70-403, MCA

18.9.204 (18.15.304) BLENDING STOCKS (1) Distributors may transfer casinghead or catalytic blending stocks to other licensed distributors without the payment of tax; provided these products will be used for blending purposes only and the blended product will be distributed as either gasoline or special fuel.

AUTH: 15-70-104, MCA

IMP: 15-70-201, 15-70-204, 15-70-301, 15-70-321, 15-70-401, 15-70-403, MCA

REASON: The proposed amendment is necessary to include blending stock used for either special fuel or gasoline in this rule.

18.9.205 (18.15.305) EXEMPTION - U.S. AND OTHER STATES (1) Licensed distributors making sales of gasoline, special fuel, or aviation fuel, to the United States government or a state entity FOB rack for use by the purchaser out of the state of Montana must report the sale as a credit to the amount of gasoline, special fuel, or aviation fuel distributed on the distributor's monthly statement as an export required by ~~15-70-205 and 15-70-344~~ 15-70-410, MCA.

AUTH: 15-70-104, MCA

IMP: ~~15-70-204, 15-70-205, 15-70-321, 15-70-344~~ 15-70-403, 15-70-410 MCA

18.9.302 (18.15.401) SELLER'S INVOICE (1) Any person, ~~other than a licensed distributor,~~ who sells and delivers gasoline or special fuel to a purchaser on which a refund may be claimed, must issue an original invoice at the time of delivery~~, showing the number of gallons delivered. Each invoice issued must be an original invoice~~. Only one original invoice may be issued for each delivery. If all information is not provided on the original invoice at the time of delivery, the applicant may provide a copy of the corresponding billing statement with the original invoice that supports the missing information. ~~In addition to these requirements, each~~ Each invoice and accompanying billing statement collectively must contain or show the following:

(a) remains the same.

(b) name or account number of purchaser;

AUTH: ~~5-70-104~~ 15-70-104, MCA

IMP: ~~15-70-206~~, ~~15-70-207~~, ~~15-70-222~~, ~~15-70-345~~, ~~15-70-348~~ ~~15-70-361~~ 15-70-411, 15-70-412, 15-70-426, MCA

REASON: The proposed amendment is necessary to include licensed distributors who sell fuel on which a refund may be claimed. In addition, the proposed amendments allow the department to verify that all fuel claimed for tax refund is supported with accurate documentation without penalizing taxpayers.

18.9.303 (18.15.402) FILING INVOICES (1) remains the same.

AUTH: 15-70-104, MCA

IMP: ~~15-70-222, 15-70-361~~ 15-70-426, MCA

18.9.306 (18.15.408) REFUND PERCENTAGES FOR PTO OR AUXILIARY ENGINES (1) remains the same.

(2) The following percentages are allowed for the refund of gasoline or special fuel used in operating a PTO or auxiliary engines when the above records are maintained. The amounts are specified as a percentage of the total taxable fuel used by the vehicle. Work performed in accordance with ~~15-70-321~~ 15-70-403(6) or (7), MCA, is not eligible for a refund. The percentages are:

Water and oil well drilling rigs 80%

Cement mixing/concrete pumping trucks 30%

Sanitation/garbage trucks/septic pumpers 30%

Sewer cleaning/jet vactor 30%

Super suckers 30%

Fire trucks 30%

Mobile cranes 30%

Line truck with digger/aerial lift 25%

Refrigeration trucks 25%

Sweeper trucks (must be motor vehicle) 25%

Self loaders/boom truck (i.e., logging trucks) 20%

Truck with hydraulic winch 20%

Wrecker 20%

Semi‑wrecker 20%

Service truck with jack hammer/drill/crane 20%

Oil and water well service trucks 20%

Bulk feed truck 20%

Dump trailer trucks 20%

Dump trucks 20%

Hot asphalt distribution truck 20%

Leaf truck 20%

Pneumatic tank truck 20%

Salt spreader on dump truck 20%

Seeder truck 20%

Snow plow 20%

Spray truck 20%

Tank transport 20%

Tank trucks 20%

Car carrier with hydraulic winch 10%

Carpet cleaning van 10%

All others, including auxiliary engines 7.5%

under 15 horsepower

AUTH: 15-70-104, MCA

IMP: ~~15-70-222~~, ~~15-70-361~~ 15-70-426, MCA

18.9.311 (18.15.409) LOST OR DESTROYED GASOLINE, SPECIAL FUEL, OR AVIATION FUEL (1) The department ~~of transportation~~ reserves the right to demand from a person claiming a refund under the provisions of ~~15-70-221 through 15-70-226, and 15-70-356 through 15-70-365~~ 15-70-425, 15-70-426, 15-70-432, or 15-70-434, MCA, that positive proof be submitted of the exact amount of the loss and facts indicating the gasoline, special fuel, or aviation fuel was never used on the highway or in the air. In offering this proof, the following procedures apply ~~must be strictly adhered to by the person claiming the refund~~:

(a) through (2) remain the same.

AUTH: 15-70-104, 75-11-319, MCA

IMP: ~~15-70-222, 15-70-361~~ 15-70-425, 15-70-426, 15-70-432, 15-70-434, MCA

REASON: The proposed rule amendment is necessary to delete references to repealed statutes and clarify rule language for ease of use.

18.9.312 (18.15.410) GASOLINE, SPECIAL FUEL, OR AVIATION FUEL LOST FROM STORAGE (1) and (2) remain the same.

AUTH: 15-70-104, 75-11-319, MCA

IMP: ~~15-70-222~~, ~~15-70-361~~ 15-70-425, 15-70-426, 15-70-432, 15-70-434, MCA

18.9.321 (18.15.411) PROCESSING CLAIMS FOR REFUNDS ~~(1) Upon receipt of an application for refund of fuel tax, the department of transportation has 120 working days after receiving the claim to approve or reject it.~~

~~(2) After approval of the claim, the department will process the refund.~~

~~(3)~~(1) ~~After rejection of the claim~~ If any claim or any part of a claim is rejected, the department may, after investigation, require the claimant to file an amended statement before action is taken. If the taxpayer submits an amended claim, the claim is reasonable, and the taxpayer has furnished substantial proof, the department in its discretion may accept the amended claim.

(4) remains the same but is renumbered (2).

AUTH: 15-70-104, MCA

IMP: ~~15-70-225, 15-70-226, 15-70-364, 15-70-365~~ 15-70-432, 15-70-434, MCA

REASON: The update is needed to remove duplicate language present in 15-70-434, MCA, and to clarify the method of amended claims.

18.9.326 (18.15.412) AGRICULTURAL USE FUEL TAX REFUND (1) and (2) remain the same.

(3) To determine an applicant's eligibility for fuel tax refund under ~~15-70-223 and 15-70-362,~~ 15-70-430, MCA, the ratio between the gross earned agricultural or farm income to the total gross earned income must be determined as follows:

(a) through (4) remain the same.

AUTH: 15-70-104, MCA

IMP: ~~15-70-223, 15-70-362~~ 15-70-430, MCA

18.9.401 (18.15.218) TREATMENT OF ETHANOL-BLENDED GASOLINE

(1) For the purposes of Title 15, chapter 70, MCA, reference to gasoline includes ethanol-blended gasoline (regardless of where produced and how produced). Gasoline and ethanol-blended gasoline are taxed at the rate specified in ~~15-70-204~~ 15-70-403, MCA.

~~(2) This rule, as amended, is effective for taxable periods beginning on and after July 1, 1983.~~

AUTH: 15-70-104, MCA

IMP: ~~15-70-201, 15-70-204~~ 15-70-401, 15-70-403, MCA

18.9.403 (18.15.219) ETHANOL CONTENT (1) remains the same.

AUTH: 15-70-104, MCA

IMP: ~~15-70-201~~ 15-70-401, MCA

18.9.501 (18.15.701) ETHANOL DISTRIBUTORS (1) It is the responsibility of the ethanol distributor, including anyone who imports ethanol, to collect and remit to the ~~Department of Transportation~~ department the tax that is due on the ethanol pursuant to ~~15-70-204~~ 15-70-403, MCA.

~~(2) This rule is effective for taxable periods beginning on and after July 1, 1983.~~

AUTH: 15-70-104, MCA

IMP: 15-70-512, 15-70-523, MCA

18.9.703 (18.15.103) ~~PRORATION OF INTEREST AND~~ PAYMENT APPLICATION (1) ~~Interest charged on delinquent gasoline, special fuel, compressed natural gas and liquefied petroleum gases taxes is 12% a year or 1% a month.~~ Partial payments for a customer's tax liability, including credits, apply as directed by the customer as to account type, period, or otherwise.

(2) ~~Interest will be calculated daily using the rate arrived at by dividing 12% interest per year by 365 days.~~ If customer direction is not provided, the payment is applied in full to the oldest period first in the following order:

(a) first to tax (dollar for dollar until satisfied);

(b) second to interest (if due); and

~~(3) All payments for delinquent accounts, including credits, are first credited to tax, then any remaining excess credited to interest and then to penalty.~~

AUTH: 15-70-104, MCA

IMP: ~~15-70-210, 15-70-352, 15-70-353,~~ 15-70-417, 15-70-418, MCA

REASON: The rate of interest charged for each fuel tax type is already specified in law. The proposed rule is needed to authorize the customer to direct how the customer's fuel tax partial payment is applied if desired.

18.9.705 (18.15.111) LATE FILE AND PAY PENALTIES WHEN FILING ELECTRONICALLY (1) An electronic payment is considered late and is subject to the penalties under ~~15-70-210 and 15-70-352~~ 15-70-121 and 15-70-417, MCA, when it is not received by the state's designated depository by 11:59 p.m. on the day that it is due as required under 15-70-113, MCA.

(2) If an electronic payment is initiated by the ~~Department of Transportation~~ department and it arrives late through no fault of the ~~licensed distributor~~ licensee, and there were sufficient funds to cover the ~~licensed distributor's~~ licensee's motor fuel tax liability, no penalty or interest shall be assessed.

(3) A motor fuel tax return that is submitted electronically to the ~~Department of Transportation~~ department is considered late if it is not received by 11:59 p.m. on the day it is due as required under ~~15-70-205 and 15-70-344~~ 15-70-121 and 15-70-410, MCA.

(4) When an electronic payment is received late or when a payment that is initiated by the department does not have sufficient funds in the account, interest is charged from the ~~26th of the month~~ first day after the payment due date.

AUTH: 15-70-104, 15-70-115, MCA

IMP: 15-70-113, 15-70-114, 15-70-115, ~~15-70-205, 15-70-210, 15-70-330, 15-70-334,~~ 15-70-410, 15-70-417, MCA

REASON: The proposed amendments are necessary to expand rule to include IFTA carriers.

18.10.103 (18.15.118) DETERMINATION OF PUBLIC ROADS AND HIGHWAYS (1) Streets, roads, highways, alleys, county roads, county gravel roads, forest service roads (except forest service development roads) and their related structures are accepted as public roads as defined in ~~15-70-301~~ 15-70-401, MCA. A public road may be under new construction, reconstruction, relocation, or repair, even though it is not recognized as part of the maintained highway system.

AUTH: 15-70-104, MCA

IMP: ~~15-70-301~~ 15-70-401, MCA

18.10.104 (18.15.119) LIABILITY FOR USE ON GOVERNMENT MAINTAINED ROADS (1) remains the same.

AUTH: 15-70-104, MCA

IMP: ~~15-70-301~~ 15-70-401, MCA

18.10.105 (18.15.120) WHAT CONSTITUTES SPECIAL FUEL (1) ~~Fuel taxable under the Special Fuel Tax Act includes~~ Special fuel as defined in 15-70-401, MCA, includes diesel fuel, stove oils, heating oils, burner fuels, kerosene, or any other combination of hydrocarbon fuels used for the operation of motor vehicles, except fuels subject to the gasoline license tax or to the license tax on vehicles operated by liquefied petroleum gas or compressed natural gas.

AUTH: 15-70-104, MCA

IMP: ~~15-70-301~~ 15-70-401, MCA

REASON: The proposed change is requested to accommodate the repeal of the Special Fuel Tax Act and apply the clarification of special fuel to the Gasoline and Special Fuel Tax Act.

18.10.108 (18.15.501) ESTIMATE OF DIESEL POWERED VEHICLES SUPPLY TANKS (1) through (4) remain the same.

AUTH: 15-70-104, 61-10-155, MCA

IMP: ~~15-70-321, 15-70-330~~ 15-70-403, 15-70-411, 61-10-141, MCA

18.10.110 (18.15.502) OFF-HIGHWAY VEHICLE/EQUIPMENT (1) through (4) remain the same.

AUTH: 15-70-104, ~~15-70-330~~,15-70-441, MCA

IMP: ~~15-70-330~~ 15-70-441, MCA

18.10.111 (18.15.503) DYED SPECIAL FUEL ALLOWANCE (1) remains the same.

AUTH: 15-70-104, ~~15-70-330~~,15-70-441, MCA

IMP: ~~15-70-301, 15-70-330~~ 15-70-401, 15-70-441, MCA

18.10.112 (18.15.504) DYED SPECIAL FUEL (1) The department has adopted the following provisions relating to dye color and concentration requirements for tax-exempt diesel fuel, excluding buses and governmental vehicles.

(a) remains the same.

(b) The special fuel will satisfy the federal dyeing requirement if it contains the dye solvent red 164 at a concentration spectrally equivalent to 3.9 pounds per thousand barrels of the solid dye standard solvent red 26 or contains any dye of a type and in a concentration that has been approved by the commissioner of internal revenue service. The presence of dye at a concentration of 2.0 milligrams per liter (mg/l), or greater is considered to be in violation of ~~15-70-330~~ 15-70-441, MCA.

(2) Dyed special fuel can be purchased tax free in Montana and Canada, but it is illegal to use it on the public roads, regardless of where it was purchased, except for the movement of off‑road vehicles traveling from one location to another as indicated in ~~ARM 18.10.110~~ these administrative rules and any vehicles described in ~~ARM 18.10.111~~ these administrative rules.

(3) Motor carrier services division officers making a routine stop of a commercial vehicle or visiting a road construction project site may take a fuel sample from bulk tanks and supply tanks of vehicles, equipment and other internal combustion engines. The sample may be analyzed for dye concentration by a laboratory selected by the Montana Department of Transportation. The department will allow a grace period of ten days from the date of a dyed fuel inspection that resulted in a violation to remove the presence of dye from a vehicle before a subsequent violation may be issued. After the grace period, the operator of the vehicle may be cited for violation of 15-70-441, MCA.

(4) remains the same.

(5) Contractors may not store ~~and/or~~ or use ~~dyed~~ non-taxed diesel in equipment, motor vehicles, and stationary engines used upon public roads ~~and/or~~ or within ~~MDT~~ any public road project limits as defined in ~~15-70-321~~ 15-70-403, MCA, unless the fuel has been declared to the department. Contractors in violation of this section are subject to penalties upon conviction as defined in ~~15-70-330~~ 15-70-443, MCA, and may be suspended for up to 6 six months from participating in future ~~MDT~~ department contracts.

(6) and (7) remain the same.

AUTH: 15-70-104, ~~15-70-330~~ 15-70-441, 60-2-201, MCA

IMP: ~~15-70-321, 15-70-330~~ 15-70-443, 60-2-111, MCA

REASON: The proposed amendments are necessary to establish a grace period allowing a vehicle owner time to clean out the fuel tanks of a vehicle after a violation has been issued.

18.10.121 (18.15.602) QUARTERLY REPORTS - TAX PAYMENT (1) Every special fuel user ~~who is subject to 15-70-302~~ licensed under the International Fuel Tax Agreement (IFTA) pursuant to 15-70-121, MCA, must file with the department ~~of transportation~~, on forms prescribed by the department, a report showing the amount of fuel used during the calendar quarter. Calendar quarters end on the last day of March, June, September, and December. The reports are due on or before the last day of the month following the close of a calendar quarter. Reports ~~shall~~ must accompany a payment to the department ~~of transportation~~ for the total amount due.

(2) Every special fuel user ~~who is subject to 15-70-302, MCA,~~ licensed under IFTA, must submit the quarterly tax report regardless of the fuel usage. Failure to file the quarterly tax report in the time prescribed in ~~15-70-325, MCA,~~ the IFTA Agreement is considered sufficient cause for revocation of the ~~special fuel user's permit~~ IFTA license. The department shall revoke the IFTA license if the required tax report is not submitted to the department within 60 calendar days of the due date. An IFTA license revoked in error will be reinstated.

AUTH: 15-70-104, MCA

IMP: 15-70-121, ~~15-70-306, 15-70-325, 15-70-327,~~ MCA

REASON: The proposed amendment is necessary to clarify the filing requirements and to make the rule apply specifically to IFTA carriers.

18.10.124 (18.15.603) IFTA LICENSE BOND REQUIREMENT (1) through (2)(b) remain the same.

(c) the license was previously revoked~~, but has been reinstated~~ and the licensee has requested reinstatement of the license.

(3) and (4) remain the same.

(5) The department may waive the bond requirement if it is determined that the late filing or the nonpayment was not in the control of the licensee.

AUTH: 15-70-104, MCA

IMP: 15-70-121 ~~and 15-70-304~~, MCA

REASON: The proposed amendments are necessary to clarify the rule for the licensee who has been revoked but wants to reinstate the license, and also to provide the department discretion when noncompliance was out of the control of the licensee.

18.10.125 (18.15.604) IFTA REINSTATEMENT FEE (1) remains the same.

AUTH: 15-70-104, MCA

IMP: 15-70-121 ~~15-70-305~~, MCA

18.10.313 (18.15.610) TERMINATION OF ~~A SPECIAL FUEL USER'S PERMIT~~ AN IFTA LICENSE (1) Upon ceasing operations in Montana, each special fuel user ~~subject to 15-70-302, MCA~~ licensed under IFTA, shall:

(a) Submit a final return with the original ~~vehicle permit~~ license;

(b) remains the same.

(2) Any attempt to use a canceled ~~permit~~ license is considered a violation of ~~15-70-302~~ 15-70-121, MCA, and subjects the violator to the penalty provisions of 15-70-458, MCA.

(3) When the user's ~~permit~~ IFTA license is revoked for noncompliance, the ~~permit~~ license ~~shall~~ must be surrendered and returned with reports through the date of the revocation. Any attempt to use a revoked ~~permit~~ license is considered a violation of ~~15-70-302~~ 15-70-121, MCA, and subject to the penalty provisions of ~~15-70-314~~ 15-70-458, MCA.

(4) An invalid ~~permit~~ IFTA license list is maintained by the department and is distributed to all motor carrier services officers in Montana. An ~~permit~~ IFTA license on the invalid list or a reproduction of such a ~~permit~~ license is subject to confiscation by enforcement officers, and a citation may be issued.

AUTH: 15-70-104, MCA

IMP: 15-70-121 ~~15-70-306~~, MCA

REASON: The proposed amendments are necessary to clarify filing requirements and to make the rule apply specifically to IFTA carriers.

18.10.314 (18.15.611) CONFISCATION OF CERTAIN ~~PERMIT~~ LICENSE COPIES (1) A reproduced copy of an ~~special fuel user's permit~~ IFTA license that is not clear and legible is invalid and is subject to confiscation by motor carrier services division personnel, and authorized employees of the department. The person from whom the ~~permit~~ license is confiscated may operate the vehicle by obtaining a clear and legible copy of the ~~permit~~ license or by purchasing a temporary trip permit pursuant to ~~15-70-311~~ 15-70-455, MCA.

(2) Confiscation of a reproduced copy of a ~~fuel user's permit or~~ Montana IFTA license under this rule does not affect the validity of the original ~~permit~~ license issued by the department.

AUTH: 15-70-104, MCA

IMP: ~~15-70-302, 15-70-311~~ 15-70-121, 15-70-455, MCA

REASON: The proposed amendments are necessary to clarify filing requirements, and to make the rule apply specifically to IFTA carriers.

18.10.324 (18.15.612) FAILURE TO MAINTAIN RECORDS (1) ~~The Department of Transportation~~ ~~considers the failure~~ Failure of a special fuel user~~, who is subject to 15-70-302, MCA,~~ licensed under IFTA to retain records as specified in ~~15-70-323, MCA,~~ the IFTA Agreement to shall constitute reasonable cause for ~~the~~ revocation of the IFTA License ~~special fuel user's permit under the provisions of 15-70-306, MCA~~. Records ~~to be kept~~ must include special fuel purchase invoices, bills of lading, and trip records.

(2) ~~The Department of Transportation will, in the event~~ If a special fuel user, ~~who is subject to 15-70-302, MCA~~ licensed under IFTA, fails to retain the required records, the department shall estimate the miles traveled, special fuel purchases, and average miles per gallon to determine the special fuel permit holder's tax liability. ~~These~~ The estimates ~~will be~~ are based~~, whenever possible,~~ on records for a portion of the operations of the special fuel user's vehicles consuming special fuels or other available information indicating fuel usage by the vehicles for which reports are being made. ~~In those cases where~~ Where the records are not adequate to verify the average miles per gallon (ampg) reported, and the average cannot be estimated, an ampg specified in (4) will be used.

(3) If, within 30 days of the date the department issues an assessment based on the ampg, the special fuel user ~~who is subject to 15-70-302, MCA,~~ licensed under IFTA provides the department with adequate records to verify or estimate special fuel usage for the user's vehicles, the department ~~will~~ may review the records and adjust the assessment ~~to the extent necessary~~.

(4) ~~The Department of Transportation will, in~~ In the event a special fuel user fails to retain the required records for fuel used in internal combustion engines to produce materials used on taxable projects, the department shall use the industry standard or other available information for special fuel usage by the internal combustion engines to calculate the formula for which reports are being made. In the event no industry standards are available, the following ampg standards will be used:

(a) through (5)(c) remain the same.

AUTH: 15-70-104, MCA

IMP: 15-70-121, ~~15-70-306, 15-70-323~~ 15-70-403, MCA

REASON: The proposed amendments are necessary to clarify the department's determination of highway use specifically for IFTA licensees when no records are available.

18.10.406 (18.15.418) CARDTROL COMPLIANCE AND ADMINISTRATION (1) A special fuel seller is responsible for payment of the tax on dyed special fuel dispensed through a cardtrol, keylock, or similar device from an unattended pump or dispensing unit if the seller knows the fuel is sold to a customer who places the fuel directly into the supply tank of a vehicle not defined as or considered an off-road vehicle as ~~in ARM 18.10.110~~ defined in these administrative rules.

AUTH: 15-70-104, MCA

IMP: ~~15-70-321~~ 15-70-441, MCA

18.10.407 (18.15.419) STATEMENT FOR KEYLOCK CARDTROL REPORTING (1) Any seller who sells gasoline or special fuel to a purchaser through a keylock or cardtrol on which a refund may be claimed in accordance with ~~15-70-223 and 15-70-362~~ 15-70-430, MCA, shall provide the purchaser with a statement of fuel purchased. The statement may be prepared as frequently as deemed necessary, but one statement must be issued at least every 30 days. To support the accuracy of the statement, the seller shall list or attach a list supporting all information used in the statement.

AUTH: 15-70-104, MCA

IMP: ~~15-70-223~~ ~~and~~ ~~15-70-362~~ 15-70-430, MCA

18.11.102 (18.15.126) SEIZING IMPROPERLY IMPORTED FUELS (1) If an MCS officer determines that ~~neither~~ the transporter, consignor, ~~nor~~ or consignee is not a licensed fuel distributor in the state of Montana, and ~~any one of~~ the transporters, consignors, or consignees is listed on the warning list ~~defined above~~, the MCS officer shall issue a notice to appear to the transporter, consignor, ~~and~~ or consignee for violation of ~~15-70-233 or 15-70-357~~ 15-70-402, MCA, for improperly importing fuel. Upon conviction, the company's name must be placed on the seizure list.

(2) through (2)(b) remain the same.

(d) Area captain, Motor Carrier Services Division~~; or~~

~~(e) Manager, FTMA unit~~.

(3) Upon obtaining approval to seize a load of fuel, an MCS officer shall escort the load to a licensed fuel distributor in the state of Montana that is under contract with the department to receive and purchase seized fuel. The seized fuel must be escorted to the nearest licensed bulk distributor that indicates it can accept the entire load of fuel into bulk storage within 12 hours from the time approval to seize the load of fuel is received by the seizing officer the nearest location designated by the department official authorizing seizure.

(4) and (4)(a) remain the same.

(b) Request that a towing company tow the entire tanker to the towing company's location to be impounded at the towing company's lot by the MCS officer. ~~In this case the transport company shall pay any towing and impoundment charges.~~

AUTH: 15-70-104, MCA

IMP: ~~15-70-233, 15-70-357~~ 15-70-419, MCA

REASON: The proposed amendments are necessary to clarify which department officials have authority to seize improperly imported fuel, and to better follow intent of statute.

18.11.103 (18.15.127) NOTIFICATION OF SEIZURE OF FUEL (1) and (2) remain the same.

AUTH: 15-70-104, MCA

IMP: ~~15-70-233~~, ~~15-70-357~~ 15-70-419, MCA

18.11.104 (18.15.128) CONDUCT OF HEARING FOR CLAIM OR TITLE TO SEIZED FUEL (1) Upon receipt of a timely filed claim or request for hearing, the department shall schedule a hearing at department headquarters in Helena, Montana, or to be held by telephone, within 5 five working days of the receipt of the claim or request. ~~The hearing may be scheduled by telephone, but all interested~~ All proper parties shall be notified of the hearing date in writing, by certified mail, within 2 two working days ~~from the~~ of the hearing date ~~the meeting was scheduled~~.

(2) The hearing ~~shall be~~ is conducted by a hearing examiner designated by the department's chief of staff who shall serve as the hearings officer. If the chief of staff is unable to serve as the hearings officer, he shall select as an alternate a division administrator from within the department who was not involved in the decision to seize the fuel in question. The hearing may include representation by the department's legal unit and FTMA unit for the purpose of legal and technical consultation only.

~~(3) The hearing~~ ~~may include all parties claiming interest or title to the seized fuel and their legal representatives.~~

~~(4) Upon the conclusion of the hearing, the hearings officer shall determine that either:~~

(a) The parties claiming interest or title to the fuel shall forfeit title and interest in the fuel and the department shall deposit the proceeds from the sale of the fuel into the general fund of the state of Montana within 5 working days less tax, penalty, transportation cost and administrative costs; or

(b) The department shall reimburse those claiming interest or title in the fuel the wholesale price of the fuel on the day it was seized, less tax and penalty owed to the state of Montana, within 10 working days from the date of final determination by the department.

(5) The department shall provide written notice of the determination of the hearings officer to those persons claiming interest or title to the seized fuel within 2 working days after the date of the hearing.

(3) The hearing must be conducted, a determination as to interest or title to the fuel made, and disposition of the seized fuel completed under 15-70-419, MCA.

AUTH: 15-70-104, MCA

IMP: ~~15-70-233, 15-70-357~~ 15-70-419, MCA

REASON: The proposed amendments are necessary to set forth the process for conducting a hearing for fuel seized by a peace officer is consistent with 15-70-419, MCA. The rule may not unnecessarily repeat statutory language.

18.11.105 (18.15.129) DETERMINATION OF WHOLESALE PRICE OF FUEL (1) through (3) remain the same.

AUTH: 15-70-104, MCA

IMP: ~~15-70-233, 15-70-357~~ 15-70-419, MCA

18.11.106 (18.15.130) CONTRACTING FOR PURCHASE OF SEIZED FUEL

(1) and (2) remain the same.

AUTH: 15-70-104, MCA

IMP: ~~15-70-233, 15-70-357~~ 15-70-419, MCA

6. The department proposes to transfer the following rules:

OLD	NEW
18.9.603	18.15.702	AUTH: 15-70-104, 15-70-522, MCA; IMP: 15-70-522, MCA
18.9.605	18.15.703	AUTH: 15-70-104, MCA; IMP: 15-70-523, MCA
18.9.606	18.15.710	AUTH: 15-70-104, 15-70-522, MCA; IMP: 15-70-512, 15-70-522, MCA
18.9.607	18.15.711	AUTH: 15-70-104, 15-70-522, MCA; IMP: 15-70-511, 15-70-522, MCA
18.9.608	18.15.712	AUTH: 15-70-522, MCA; IMP: 15-70-522, MCA
18.9.701	18.15.102	AUTH: 15-70-104, MCA; IMP: 15-70-210, 15-70-352, MCA
18.10.106	18.15.601	AUTH: 15-70-104, 15-70-121, MCA; IMP: 15-70-121, MCA
18.10.503	18.15.801	AUTH: 15-70-104, MCA; IMP: 15-70-702, 15-70-703, 15-70-705, 15-70-706, 15-70-713, MCA
18.10.504	18.15.802	AUTH: 15-70-104, MCA; IMP: 15-70-706, 15-70-713, 15-70-714, MCA
18.10.505	18.15.803	AUTH: 15-70-104, MCA; IMP: 15-70-712, 15-70-713, MCA
18.10.506	18.15.804	AUTH: 15-70-104, MCA; IMP: 15-70-712, 15-70-713, MCA
18.10.507	18.15.805	AUTH: 15-70-104, MCA; IMP: 15-70-704, MCA

7. The department proposes to repeal the following rules:

18.9.112 DEFINITIONS

AUTH: 15-70-104, 15-70-522, MCA

IMP: 15-70-201, 15-70-205, 15-70-301, 15-70-344, MCA

REASON: The rule is proposed for repeal because all relevant definitions have been moved to New Rule I, to consolidate numerous definitional rules into one rule for better organization and ease of use.

18.9.325 DEFINITIONS

AUTH: 15-70-104, MCA

IMP: 15-70-223, 15-70-362, MCA

18.9.402 AGRICULTURAL PRODUCTS

AUTH: 15-70-104, MCA

IMP: 15-70-201, MCA

REASON: The rule is proposed for repeal because a 1985 legislative amendment inserted "including Montana wood or wood products" to 15-70-522, MCA, making the rule unnecessary.

18.9.601 INTENT

AUTH: 15-70-104, MCA

IMP: 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

REASON: The rule is proposed for repeal because it contains archaic language and is obsolete.

18.9.602 DEFINITIONS

AUTH: 15-70-104, 15-70-522, MCA

IMP: 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

18.9.704 DEFINITIONS

AUTH: 15-70-104, MCA

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

18.10.107 DEFINITIONS

AUTH: 15-70-104, MCA

IMP: 15-70-321, MCA

18.10.201 CERTAIN FEDERALLY OWNED ROADS

AUTH: 15-70-104, MCA

IMP: 15-70-301, 15-70-321, MCA

REASON: The rule is proposed for repeal because there is no law to support this rule. All roads dedicated to public use are taxable under 15-70-401, MCA, the definition of public road.

18.10.202 OFF-ROAD USAGE

AUTH: 15-70-104, MCA

IMP: 15-70-121, 15-70-301, 15-70-302, 15-70-321, 15-70-323, MCA

REASON: The rule is proposed for repeal because it is unnecessary with 15-70-425, MCA, in place covering refund or credit authorized. Passage of SB116 in 2013 and HB99 in 2015 have made this rule obsolete.

18.10.301 PERMIT REQUIRED

AUTH: 15-70-104, MCA

IMP: 15-70-121, 15-70-302, 15-70-303, MCA

REASON: The rule is proposed for repeal because SB116 of the 2013 Legislative Session repealed the requirement of a Montana resident user of special fuel to obtain a permit.

18.10.302 PERMIT DETAILS

AUTH: 15-70-104, MCA

IMP: 15-70-121, 15-70-302, 15-70-303, MCA

REASON: The rule is proposed for repeal because duration of license is covered in IFTA, R600. Definitions of short and long term leases and terms are defined in IFTA R500, making the rule unnecessary.

18.10.321 REQUIRED RECORDS – AUDITS

AUTH: 15-70-104, MCA

IMP: 15-70-121, 15-70-323, 15-70-324, MCA

REASON: The rule is proposed for repeal because 15-70-323, MCA, was repealed upon passage of SB116 in the 2013 Legislative Session. HB 99 in the 2015 Legislative Session enacted 15-70-415, MCA, which allows the department to examine the books, papers, records, and equipment of any special fuel user or any person dealing in, transporting, or storing special fuel. IFTA carriers are required to keep records and the statute of limitations is defined in the IFTA Agreement. This rule duplicates the laws already in place.

18.10.322 RECORDS WHEN BULK STORAGE INVOLVED

AUTH: 15-70-104, MCA

IMP: 15-70-121, 15-70-302, 15-70-323, MCA

REASON: The rule is proposed for repeal because requirement for IFTA recordkeeping of bulk fuel is covered in IFTA P570, making the rule unnecessary.

18.10.323 TRIP AND FUEL CONSUMPTION RECORDS

AUTH: 15-70-104, MCA

IMP: 15-70-121, 15-70-302, 15-70-323, MCA

REASON: The rule is proposed for repeal because requirement for Trip and Fuel Consumption Records is covered in IFTA P540, making the rule unnecessary.

18.10.404 SELLER INVOICES

AUTH: 15-70-104, MCA

IMP: 15-70-121, 15-70-306, 15-70-323, MCA

REASON: The rule is proposed for repeal because this rule duplicates proposed amendments to ARM 18.9.302. In addition, the requirement for fuel records for IFTA carriers is covered in IFTA P560, making the rule unnecessary.

18.11.101 DEFINITIONS

AUTH: 15-70-104, MCA

IMP: 15-70-233, 15-70-357, MCA

8. The department proposes to reorganize the above-stated rules as follows:

OLD NEW

Chapter 15 MOTOR FUELS TAX

Subchapter 1 Administration

NEW RULE I 18.15.101 DEFINITIONS

18.9.701 18.15.102 WAIVER OF MOTOR FUEL PENALTIES

18.9.703 18.15.103 PAYMENT APPLICATION

NEW RULE III 18.15.108 COORDINATION OF TAX RETURN

WITH PAYMENT OF TAX BY EFT

NEW RULE IV 18.15.109 ELECTRONIC FILING STANDARDS

AND METHODS

NEW RULE V 18.15.110 ELECTRONIC FUNDS TRANSFER

18.9.705 18.15.111 LATE FILE AND PAY PENALTIES

WHEN FILING ELECTRONICALLY

NEW RULE II 18.15.117 DEPARTMENT DETERMINATION FOR

COST EFFECTIVENESS AND

SUBSEQUENT ACCOUNT WRITE-OFF

18.10.103 18.15.118 DETERMINATION OF PUBLIC ROADS

AND HIGHWAYS

18.10.104 18.15.119 LIABILITY FOR USE ON GOVERNMENT

MAINTAINED ROADS

18.10.105 18.15.120 WHAT CONSTITUTES SPECIAL FUEL

18.11.102 18.15.126 SEIZING IMPROPERLY IMPORTED

FUEL

18.11.103 18.15.127 NOTIFICATION OF SEIZURE OF FUEL

18.11.104 18.15.128 CONDUCT OF HEARING FOR CLAIM

OR TITLE TO SEIZED FUEL

18.11.105 18.15.129 DETERMINATION OF WHOLESALE

PRICE OF FUEL

18.11.106 18.15.130 CONTRACTING FOR PURCHASE OF

SEIZED FUEL

Subchapter 2 Distributor's License Tax

18.9.101 18.15.201 DETERMINATION OF WHEN GASOLINE,

SPECIAL FUEL, OR AVIATION FUEL

DISTRIBUTED

18.9.102 18.15.202 DISTRIBUTOR'S BOND

18.9.103 18.15.203 DISTRIBUTOR'S STATEMENTS

18.9.104 18.15.204 DISTRIBUTOR'S RECORDS

18.9.105 18.15.205 DISTRIBUTOR'S INVOICE

18.9.108 18.15.210 WHOLESALE DISTRIBUTOR

18.9.109 18.15.211 WHOLESALE DISTRIBUTOR'S

OBLIGATIONS

18.9.111 18.15.217 ETHANOL-BLENDED GASOLINE

BLENDERS

18.9.401 18.15.218 TREATMENT OF ETHANOL-BLENDED

GASOLINE

18.9.403 18.15.219 ETHANOL CONTENT

18.9.116 18.15.225 INCIDENCE OF THE FUEL TAX

18.9.117 18.15.226 DISTRIBUTOR-SUPPORTING

DOCUMENTATION FOR BAD DEBT

CREDIT

18.9.118 18.15.227 PREPAYMENT OF MOTOR FUEL TAXES

Subchapter 3 Exemptions from Distributor's License Tax

18.9.201 18.15.301 INTRASTATE FUEL DELIVERIES

18.9.202 18.15.302 EXPORT DELIVERIES

18.9.203 18.15.303 IMPORT DELIVERIES

18.9.204 18.15.304 BLENDING STOCKS

18.9.205 18.15.305 EXEMPTION – U.S. AND OTHER STATES

Subchapter 4 Refunds of Gasoline and Special Fuel Tax

18.9.302 18.15.401 SELLER'S INVOICE

18.9.303 18.15.402 FILING INVOICES

18.9.306 18.15.408 REFUND PERCENTAGES FOR PTO OR

AUXILIARY ENGINES

18.9.311 18.15.409 LOST OR DESTROYED GASOLINE,

SPECIAL FUEL OR AVIATION FUEL

18.9.312 18.15.410 GASOLINE, SPECIAL FUEL OR AVIATON

FUEL LOST FROM STORAGE

18.9.321 18.15.411 PROCESSING CLAIMS FOR REFUND

18.9.326 18.15.412 AGRICULTURAL USE FUEL TAX

REFUND

18.10.406 18.15.418 CARDTROL COMPLIANCE AND

ADMINISTRATION

18.10.407 18.15.419 STATEMENT FOR KEYLOCK CARDTROL

REPORTING

Subchapter 5 Dyed Fuel

18.10.108 18.15.501 ESTIMATE OF DIESEL POWERED

VEHICLES SUPPLY TANKS

18.10.110 18.15.502 OFF-HIGHWAY VEHICLE/EQUIPMENT

18.10.111 18.15.503 DYED SPECIAL FUEL ALLOWANCE

18.10.112 18.15.504 DYED SPECIAL FUEL

Subchapter 6 International Fuel Tax Agreement

18.10.106 18.15.601 IFTA AGREEMENT

18.10.121 18.15.602 QUARTERLY REPORTS – TAX PAYMENT

18.10.124 18.15.603 IFTA LICENSE BOND REQUIREMENT

18.10.125 18.15.604 IFTA REINSTATEMENT FEE

18.10.313 18.15.610 TERMINATION OF AN IFTA LICENSE

18.10.314 18.15.611 CONFISCATION OF CERTAIN LICENSE

COPIES

18.10.324 18.15.612 FAILURE TO MAINTAIN RECORDS

Subchapter 7 Ethanol Tax Incentive

18.9.501 18.15.701 ETHANOL DISTRIBUTORS

18.9.603 18.15.702 PROCESSING OF THE TAX INCENTIVE

PAYMENT

18.9.605 18.15.703 OFFSETS

18.9.606 18.15.710 QUARTERLY REPORTS

18.9.607 18.15.711 CANCELLATION OR DENIAL OF

LICENSE

18.9.608 18.15.712 USE OF MONTANA PRODUCTS

Subchapter 8 Alternative Fuels

18.10.503 18.15.801 CNG AND LPG DEALER LICENSE

18.10.504 18.15.802 QUARTERLY TAX RETURNS

18.10.505 18.15.803 DEALER RECORDS – AUDIT

18.10.506 18.15.804 DEALER INVOICES

18.10.507 18.15.805 CNG OR LPG DEALER'S BOND

9. Concerned persons may submit their data, views, or arguments concerning the proposed actions in writing to: Tracy Halubka, Department of Transportation, P.O. Box 201001, Helena, Montana, 59620-1001; telephone (406) 444-0806; fax (406) 444-5411; or e-mail [email protected], and must be received no later than 5:00 p.m., September 2, 2016.

10. 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 Tracy Halubka at the above address no later than 5:00 p.m., September 2, 2016.

11. 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 593 persons based on 135 licensed fuel tax distributors, 1795 licensed IFTA carriers, and 4000 recipients of motor fuel tax refund in Montana in FY 2016.

12. 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 9 above or may be made by completing a request form at any rules hearing held by the department.

13. 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.

14. The bill sponsor contact requirements of 2-4-302, MCA, apply and have been fulfilled. The primary bill sponsors were contacted by U.S. mail on June 10, 2016.

15. With regard to the requirements of 2-4-111, MCA, the department has determined that the adoption, transfer, amendment, and repeal of the above-referenced rules will not significantly and directly impact small businesses.

16. With regard to the requirements of 2-15-142, MCA, the department has determined that the adoption, transfer, amendment, and repeal of the above-referenced rules will not have direct tribal implications.

/s/ Carol Grell Morris /s/ Michael T. Tooley

Carol Grell Morris Michael T. Tooley

Rule Reviewer Director

Department of Transportation

Certified to the Secretary of State July 25, 2016.