BEFORE THE DEPARTMENT OF TRANSPORTATION

OF THE STATE OF MONTANA

 

In the matter of the amendment of ARM 18.15.101, 18.15.102, 18.15.119, 18.15.127, 18.15.128, 18.15.401, 18.15.408, 18.15.409, 18.15.602, 18.15.603, 18.15.612, 18.15.802, and 18.15.804 and the repeal of ARM 18.15.120 and 18.15.604 pertaining to Motor Fuels tax

) ) ) ) ) ) ) )

NOTICE OF PROPOSED AMENDMENT AND REPEAL   NO PUBLIC HEARING CONTEMPLATED

 

TO: All Concerned Persons

 

1. On November 9, 2020, the Department of Transportation proposes to amend 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 the Department of Transportation no later than 5:00 p.m. on October 30, 2020, to advise us of the nature of the accommodation that you need. Please contact Tracy Halubka, Department of Transportation, Fiscal Operations, P.O. Box 201001, Helena, Montana, 59620-1001; telephone (406) 444-0806; fax (406) 444-5411; TTY Service (800) 335-7592 or through the Montana Relay Service at 711; or e-mail [email protected].

 

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

 

18.15.101 DEFINITIONS The following definitions apply in this chapter:

(1) through (3) remain the same.

(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 26,000 pounds or a combination of vehicles whose combined licensed weight exceeds 46,000 26,000 pounds.

(5) through (9) remain the same.

(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) through (18) remain the same but are renumbered (10) through (17).

(18)  "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.

(19) through (22) remain the same.

 

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 amendment to (4) is necessary to make the rule consistent with the threshold weight for the definition of a combination vehicle established in 61-10-154(2)(c), MCA. The proposed amendment deleting (10) is necessary because ethanol is already defined in 15-70-401(9), MCA. The proposed amendment to (16) moves the definition of special fuel into the general definitions rule, ARM 18.15.101, for ease of use in finding definitions of terms used throughout the administrative rules.

 

18.15.102 WAIVER OF MOTOR FUEL PENALTIES TAX INTEREST NOT WAIVED (1) The department may waive the motor fuel late file and late pay penalties for gasoline, aviation fuel and special fuel if there is "good or reasonable cause." Good or reasonable cause means any late filing and late payment of a motor fuel tax for any of the following reasons:

(a) inability to file and pay because of an act of God, a natural disaster, or emergency declared by the governor or the president of the United States;

(b) inability to file and pay because of seizure of property by a foreign government or a court of law;

(c) inability to file and pay because the distributor's assets are impounded or frozen because of bank failure;

(d) inability to file and pay because of a serious medical emergency of the taxpayer; or

(e) first time late filing offense within a three year period of timely filings.

(2) The failure to file and pay the motor fuel taxes for the foregoing reasons are the only ones that will be accepted as good or reasonable cause that result in a waiver of the statutory penalties.

(3) The department has the discretion to waive the late pay penalty on an amended or adjusted return if it is determined that the underpayment was not within the control of the distributor.

(4) The administrator may delegate the authority to waive penalties to an employee within the department.

            (5) remains the same but is renumbered (1).

 

AUTH: 15-70-104, MCA

IMP: 15-70-417, MCA

 

REASON:  The proposed rule amendment is necessary because the criteria for waiving motor fuel penalties is already established in statute at 15-70-417, MCA.

 

18.15.119 LIABILITY FOR USE ON GOVERNMENT MAINTAINED ROADS

            (1) Special Gasoline and special fuel, as referred to in Title 15, chapter 70, MCA, must be taxed when consumed in the operation of a motor vehicle upon public roads or the rights-of-way of which are owned by the state, county, municipality, or other governmental agency regardless of who performs the maintenance thereon.

 

AUTH:  15-70-104, MCA

IMP: 15-70-401, MCA

 

REASON:  The proposed rule amendment is necessary because gasoline and special fuel have the same taxation point and this amendment recognizes that gasoline and special fuels are treated equally with regards to the tax liability imposed for use upon public roads.

 

            18.15.127 NOTIFICATION OF SEIZURE OF FUEL (1) remains the same.

(2) The department shall provide the Any transporter, consignor, and/or consignee a blank form with which to claim with a claim to interest or title to the seized fuel and/or must make a written request for a hearing. Parties may use the form to claim interest or title to the fuel, and must request any desired hearing within 30 calendar days after the date of seizure. Claims received and postmarked after 30 days are automatically denied.

 

AUTH: 15-70-104, MCA

IMP: 15-70-419, MCA

 

REASON:  The proposed rule amendment is necessary because the department will accept any written request, including an electronic submission, for a hearing without the need to complete a specific form.

 

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 five working days of the receipt of the claim or request. All proper parties shall be notified of the hearing date in writing, by certified mail, within two working days of the hearing date.

(2) and (3) remain the same.

 

AUTH:  15-70-104, MCA

IMP: 15-70-419, MCA

 

REASON:  The proposed rule amendment is necessary to allow the department to provide for electronic written notice of hearings.

 

18.15.401 SELLER'S INVOICE (1) Any person, 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. 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.  Each invoice and accompanying billing statement collectively must contain or show the following:

(a) through (2) remain the same.

 

AUTH: 15-70-104, MCA

IMP: 15-70-411, 15-70-412, 15-70-426, MCA

 

REASON:  The proposed amendment is necessary to allow for the submission of electronic invoices.  The proposed amendment will therefore delete the requirement that applicants must submit "original" paper invoices.

 

            18.15.408 REFUND PERCENTAGES FOR PTO OR AUXILIARY ENGINES

            (1) A person who purchases and uses any gasoline or special fuel on which the Montana gasoline or special fuel tax has been paid for the operation of a power‑take off unit (PTO), or auxiliary engines fueled from the same supply tank as the vehicle, may obtain a refund of the fuel tax. The applicant must maintain the following records:

            (a) The original sales receipts and bulk fuel invoices must have a preprinted number, the seller's name and address, date, number of gallons, type of fuel, price per gallon, the purchaser's name and address, and one of the following:

            (i) dollar amount of tax;

            (ii) rate of tax;

            (iii) a notation that Montana tax is included in the price;

            (b) If bulk fuel is used, the customer must keep dispersal records that indicate the date of disbursement, number of gallons withdrawn and the vehicle in which the fuel was delivered. An original invoice for bulk storage must be submitted with the refund application.

            (c) Each user shall maintain mileage records to support the mileage reported traveled, both on public roads and off public roads.

(2) remains the same but is renumbered (1).

 

AUTH: 15-70-104, MCA

IMP: 15-70-426, MCA

 

REASON:  The proposed amendment is necessary to eliminate unnecessary language that is a duplication of 15-70-426, MCA.

 

18.15.409 LOST OR DESTROYED GASOLINE, SPECIAL FUEL, OR AVIATION FUEL (1) remains the same.

(a)  The claim for refund must accompany the original invoice covering the purchase of gasoline, special fuel, or aviation fuel.

(b) through (2) remain the same.

 

AUTH: 15-70-104, 75-11-319, MCA

IMP: 15-70-425, 15-70-426, 15-70-432, 15-70-434, MCA

 

REASON:  The proposed amendment is necessary to allow for the submission of electronic invoices by deleting the requirement that applicants must submit "original" paper invoices.

 

18.15.602  QUARTERLY REPORTS - TAX PAYMENT-REVOCATION 

(1) Every special fuel user licensed under the International Fuel Tax Agreement (IFTA) pursuant to 15-70-121, MCA, must file with the department, 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 and applicable tax payments are due on or before the last day of the month following the close of a calendar quarter. Reports must accompany a payment to the department for the total amount due.

(2)  Every special fuel user licensed under IFTA, must submit the quarterly tax report regardless of the fuel usage.  Failure to file the quarterly tax report or to pay the applicable tax due in the time prescribed in the IFTA Agreement is considered (1) is sufficient cause for revocation of the IFTA license. The department shall revoke the IFTA license if the required tax report or tax payment is not submitted to the department within 60 calendar days of the due date. An IFTA license revoked in error will be reinstated. 

(3)  The department may revoke or deny the renewal of an IFTA license for a period of one year when it determines the licensee has failed to file a tax return or pay the tax due according to the due dates established in (1), more than three times within a three year period.  A late filing and payment for the same quarterly filing period constitutes one non-compliance event.

(4)  An IFTA license revoked in error will be reinstated.

 

AUTH: 15-70-104, MCA

IMP:  15-70-121, MCA

 

REASON: The proposed amendment is necessary to clarify the events and time period of a revocation of the IFTA license, as well as the department's criteria for IFTA license revocation. The proposed amendment will provide IFTA licensees information on potential noncompliance events and the potential penalty which may be imposed.

 

            18.15.603  IFTA LICENSE BOND REQUIREMENT (1) The department may require IFTA licensees, or others as determined by the department, who fail to timely file a fuel tax return(s) and or timely pay fuel tax liability must to post a bond equivalent to twice the licensee's estimated quarterly tax liability, but not less than $500. The bond may be a surety, a certificate of deposit, or cash.

            (2) A The department may require a licensee must to post a bond for non-compliance events including:

            (a) three late quarterly filings in a three-year period; or

            (b) non-payment or late payment of the tax liability of an IFTA quarterly tax return two or more times in a four-quarter period; or.

      (c) the license was previously revoked and the licensee has requested reinstatement of the license.

            (3) The bond dollar amount is increased by $500 for each additional non-compliance infraction.  A new bond may be required for each non-compliance infraction.

(4) The bond requirement will be is removed and the bond released after three years if the licensee has timely complied with all applicable statutes and rules for those three years.

(5) remains the same.

(6) Failure to post a required bond within 14 30 days of issuance of an IFTA bond requirement notice may result in revocation of the IFTA license.

 

AUTH: 15-70-104, MCA

IMP: 15-70-121, MCA

 

REASON:  The proposed amendment is necessary to clarify the department's ability to require a bond from an IFTA licensee in appropriate circumstances as determined by the non-filing or nonpayment situation. The proposed amendment will also increase the time for a licensee to post the bond from 14 to 30 days to allow sufficient time before IFTA license revocation may occur.

 

18.15.612 FAILURE TO MAINTAIN RECORDS (1) Failure of a special fuel user licensed under IFTA to retain records as specified in the IFTA Agreement shall constitute reasonable cause for revocation of the IFTA License. Records must include special fuel purchase invoices, bills of lading, and trip records.

(2) If a special fuel user, 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. The estimates are based 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. 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 licensed under IFTA provides the department with adequate records to verify or estimate special fuel usage for the user's vehicles, the department may review the records and adjust the assessment.

(4) and (5) remain the same but are renumbered (1) and (2).

 

AUTH:  15-70-104, MCA

IMP: 15-70-121, 15-70-403, MCA

 

REASON:  The proposed rule amendment is necessary to remove duplicate language established by the IFTA Agreement itself, as the Agreement's record keeping requirements are already applicable to all IFTA licensees. The proposed amendment will retain special fuel user's record retention requirements outside the IFTA Agreement in the remaining sections.

 

            18.15.802 QUARTERLY TAX RETURNS (1) Every CNG or LPG dealer must file a tax return with the department on or before the last day of the month following the close of the calendar quarter to which it relates on forms supplied by the department. The CNG return must account for all fuel received, sold, distributed, and used, and must include the amount of fuel tax collected during the calendar quarter, together with any other information the department may require. The LPG tax return must account for the total taxable gallons of fuel sold, the amount of fuel tax collected during the calendar quarter, together with any other information the department may require. The tax returns must accompany a tax remittance, if any, payable to the Department of Transportation for the amount of tax due.

            (2) through (4) remain the same but are renumbered (1) through (3).

 

AUTH: 15-70-104, MCA

IMP: 15-70-706, 15-70-713, 15-70-714, MCA

 

REASON:  The proposed amendment is necessary to eliminate unnecessary language that is a duplication of 15-70-714, MCA.

 

18.15.804 DEALER INVOICES (1) An original invoice must be issued at the time of each fuel disbursement into the supply tank of a motor vehicle. Each invoice must include a consecutive number, the date of sale, and total number of gallons sold.

(2) A cardtrol and keylock statement with the date of sale and total number of gallons sold will be accepted as an original invoice.

 

AUTH:  15-70-104, MCA

IMP:  15-70-712, 15-70-713, MCA

 

REASON:  The proposed amendment is necessary to allow for the submission of electronic invoices by deleting the requirement that applicants must submit "original" paper invoices. The proposed amendment will also delete reference to cardtrol and keylock statements because cardtrol and keylock are not available as methods of purchase for CNG or LPG, and this rule only applies to those alternative fuels as part of Subchapter 8, Alternative Fuels.

 

4. The following rules are proposed to be repealed:

 

18.15.120 WHAT CONSTITUTES SPECIAL FUEL

 

AUTH: 15-70-104, MCA

IMP: 15-70-401, MCA

 

REASON:  The repeal of ARM 18.15.120 is necessary because the definition of "special fuel" is proposed to be moved to ARM 18.15.101, for ease of use in finding definitions of terms used throughout the administrative rules.

 

18.15.604 IFTA REINSTATEMENT FEE

 

AUTH:  15-70-104, MCA

IMP: 15-70-121, MCA

 

REASON: The repeal of ARM 18.15.604 is necessary because the IFTA reinstatement fee of $100 is not an effective deterrence and is not cost-effective for the department to collect.

            The department estimates the proposed repeal of the reinstatement fee will decrease the department's revenue in the cumulative amount of approximately $3,000 based on a FY 2019 collection amount of $3,600 and a FY 2020 collection amount of $2,300. The proposed repeal of the reinstatement fee will affect 1,536 license holders.

 

5. Concerned persons may submit their data, views, or arguments concerning the proposed action in writing to: Tracy Halubka, Department of Transportation, Fiscal Operations, P.O. Box 201001, Helena, Montana, 59620-1001; telephone (406) 444-0806; fax (406) 444-5411; TTY Service (800) 335-7592 or the Montana Relay Service at 711; or e-mail [email protected], and must be received no later than 5:00 p.m., November 6, 2020.

 

6. 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., November 6, 2020.

 

7. 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 763 persons based on 7,638 active USDOT accounts based in Montana.

 

8. 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 5 above or may be made by completing a request form at any rules hearing held by the department.

 

9. An electronic copy of this proposal notice is available on the Department of Transportation website at www.mdt.mt.gov.

 

10. The bill sponsor contact requirements of 2-4-302, MCA, do not apply.

 

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

 

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

 

 

 

/s/ Valerie A. Balukas                                 /s/ Michael T. Tooley                     

Valerie A. Balukas                                      Michael T. Tooley

Alternate Rule Reviewer                             Director Department of Transportation

 

Certified to the Secretary of State September 29, 2020.