MISSISSIPPI LEGISLATURE
2010 Regular Session
To: Agriculture
By: Representative Ward
AN ACT TO REQUIRE SUPPLIERS OF GASOLINE TO TERMINALS, REFINERS AND PROCESSORS WITHIN THIS STATE TO OFFER UNBLENDED GASOLINE FOR SALE TO DISTRIBUTORS AND RETAILERS SUITABLE FOR SUBSEQUENT BLENDING BY THE PURCHASING DISTRIBUTOR OR RETAILER; TO EXEMPT TERMINALS ONLY OFFERING FOR SALE FEDERAL REFORMULATED GASOLINES FROM UNBLENDED GASOLINE REQUIREMENTS; TO REQUIRE EACH TERMINAL LOCATION EXCEPT THOSE GRANTED AN EXEMPTION BY THIS ACT TO MAINTAIN A STORAGE OF UNBLENDED GASOLINE TO BE OFFERED FOR SALE TO LOCAL DISTRIBUTORS AND RETAILERS; TO AUTHORIZE ELIGIBILITY FOR THE FEDERAL VOLUMETRIC ETHANOL EXCISE TAX CREDIT TO DISTRIBUTORS AND RETAILERS BLENDING UNBLENDED GASOLINE WITH A FUEL ALCOHOL BEFORE THE FINAL POINT OF SALE TO CONSUMERS; TO PROVIDE THAT CONTRACTS FOR THE SALE OF GASOLINE ENTERED INTO ON OR BEFORE JULY 1, 2010, SHALL BE EXEMPT FROM THE REQUIREMENTS OF THIS ACT; TO CREATE A SPECIAL COMMITTEE FOR THE PURPOSE OF STUDYING THE NEED AND ECONOMIC IMPACT OF OFFERING UNBLENDED GASOLINE FOR SALE TO DISTRIBUTORS OR RETAILERS IN THE STATE OF MISSISSIPPI; TO AMEND SECTIONS 27-55-5 AND 27-55-527, MISSISSIPPI CODE OF 1972, IN CONFORMITY WITH THE PROVISIONS OF THIS ACT; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. (1) A supplier importing gasoline to any terminal within this state for bulk storage, or to any refiner or processor within this state for the purpose of being refined or further processed, shall offer for sale to any distributor or retailer unblended gasoline that is suitable for subsequent blending with fuel alcohol by the purchasing distributor or retailer.
(2) Terminals that only offer for sale federal reformulated gasolines, in cooperation with position holders and suppliers, shall not be required to offer for sale unblended gasoline.
(3) Each terminal location within this state, except those terminals provided an exemption under subsection (2) of this section, shall be required to maintain a storage of unblended gasoline to be offered for sale to local distributors and retailers. The local distributors and retailers shall be allowed to blend the unblended gasoline with fuel alcohol at each distribution center or retail location before the final point of sale to consumers.
SECTION 2. Any person in business as a distributor or retailer of gasoline who offers for sale gasoline of the type authorized under Section 1 of this act and blended with fuel alcohol at their local distribution center or retail location before the final point of sale to consumers, shall be eligible for the Volumetric Ethanol Excise Tax Credit (VEETC) authorized under 26 USC Section 40.
SECTION 3. The provisions of Sections 1 and 2 of this act shall apply to any contracts pertaining to the sale of gasoline that are executed after July 1, 2010, but shall not impair the obligations of any contract executed, modified, amended or renewed on or before July 1, 2010.
SECTION 4. (1) There is created a special committee for the purpose of studying the need for offering unblended gasoline for sale to distributors or retailers in the State of Mississippi, and for the purpose of studying the economic impact of the availability and sale of unblended gasoline and to make recommendations regarding its operations. The committee shall be composed of the following fourteen (14) members:
(a) The Chairmen of the Senate and House Agriculture Committees, who shall serve as cochairmen;
(b) The State Tax Commissioner, or his or her designee;
(c) Three (3) members of the House of Representatives, to be appointed by the Speaker of the House;
(d) Three (3) members of the Senate, to be appointed by the Lieutenant Governor;
(e) Three (3) local distributors, one (1) from each Supreme Court District, to be selected by the Chairmen of the Senate and House Agriculture Committees; and
(f) Two (2) major suppliers or distributors of gasoline or oil which import petroleum products to terminals, refiners and processors within the state.
(2) Members of the committee who are not legislators shall not receive any compensation or per diem, but may receive travel reimbursement provided under Section 25-3-41. Legislative members of the committee shall receive per diem, travel or other expenses, if authorized by the Management Committees of the Senate and the House of Representatives, from the contingent expense funds of their respective houses in the same amounts as provided for committee meetings when the Legislature is not in session; provided that no per diem or expense for attending meetings of the committee shall be paid while the Legislature is in session.
(3) Upon submitting its recommendations to the Legislature, the committee shall be dissolved.
SECTION 5. Section 27-55-5, Mississippi Code of 1972, is amended as follows:
27-55-5. The words, terms and phrases as used in this article shall have the following meanings unless the context requires otherwise:
(a) "Gasoline" means:
(i) All products commonly or commercially known or sold as gasoline (excluding casinghead and absorption or natural gasoline) regardless of their classification or uses; and
(ii) Any liquid prepared, advertised, offered for sale or sold for use as or commonly and commercially used as a fuel in internal combustion engines, which when subjected to distillation in accordance with the standard method of test for distillation of gasoline, naphtha, kerosene and similar petroleum products (American Society for Testing Materials Designation D-86) shows not less than ten percent (10%) distilled (recovered) below two hundred sixty (260) degrees Fahrenheit and not less than ninety-five percent (95%) distilled (recovered) below four hundred sixty-four (464) degrees Fahrenheit.
The term "gasoline" shall include "aviation gasoline."
The term "gasoline" shall not include:
(i) Liquefied gases which would not exist as liquid at a temperature of sixty (60) degrees Fahrenheit and at a pressure of fourteen and seven-tenths (14.7) pounds per square inch absolute;
(ii) Commercial solvents or naphthas or raw petroleum products or petrochemicals intermediates when used as or sold for use in production or manufacture of plastics, detergents, synthetic rubber, herbicides or other chemicals or products which are not prepared, advertised, offered for sale or sold for use or suitable for use as fuel for generating power in internal combustion engines;
(iii) Racing gasoline.
(b) "Aviation gasoline" means gasoline refined or manufactured, according to the specifications for aviation gasoline set forth in ASTM D-910, for exclusive use in reciprocating aviation engines.
(c) "Person" means any individual, firm, copartnership, joint venture, association, corporation, estate, trust or any other group or combination acting as a unit, and the plural as well as the singular number unless the intention to give a more limited meaning is disclosed by the context.
(d) "Distributor of gasoline" means:
(i) Any person importing gasoline into this state;
(ii) Any person receiving, purchasing, acquiring, using, storing or selling any gasoline in this state on which the gasoline excise tax imposed by this article has not been paid;
(iii) Refiners, blenders, marine terminal operators or pipeline terminal operators; and
(iv) Any person licensed to sell gasoline in another state or jurisdiction who is authorized by that state or jurisdiction to collect the gasoline excise tax imposed by this article.
(e) "Highway" means every way or place, of whatever nature including public roads, toll roads, streets and alleys of this state generally open to the use of the public or to be opened or reopened to the use of the public for the purpose of vehicular travel, and notwithstanding that the same may be temporarily closed for the purpose of construction, reconstruction, maintenance or repair. The confines of a highway shall include the entire width and length of the right-of-way.
(f) "Refiner" means every person who manufactures finished petroleum products from crude oil, unfinished oils, natural gas liquids, other hydrocarbons, or alcohol.
(g) "Bonded distributor of gasoline" means any person holding a valid gasoline distributor's permit issued by the department.
(h) "For agricultural or maritime purposes" means gasoline used:
(i) In operating farm tractors or other farm equipment used exclusively in plowing, planting or harvesting farm products, or in operating boats, and no part of which is used in any motor vehicle or equipment driven or operated upon the public roads, streets or highways of this state; and
(ii) As a fuel in a farm tractor using the highways solely in hauling or transporting farm products of the soil from the farm to a gin or market where the title to such products is still in the producer, or in transporting fertilizer or feed to the farm, where the title to such products is still in the user.
(i) "For industrial purposes" means gasoline used in engines or motors of stationary or portable type for the purpose of operating machinery used for manufacturing or used for industrial purposes, and no part of which machinery is driven or operated upon the public roads, streets or highways of this state.
(j) "For domestic purposes" means gasoline used for any other purpose than agricultural, maritime, industrial or manufacturing, and no part of which is used for operating motor vehicles or motor-propelled machines of any description along the public roads, streets, alleys or highways (as defined in this article) of this state.
(k) "For nonhighway purposes" means gasoline used for any other purpose than agricultural, maritime, industrial, manufacturing or domestic purposes, and no part of which is used for operating motor vehicles or motor-propelled machines of any description along the public roads, streets, alleys or highways (as defined in this article) of this state.
(l) "For aviation purposes" means gasoline used for the operation of aircraft.
(m) "Refund gasoline" means gasoline used or to be used for agricultural, maritime, industrial, manufacturing, domestic or nonhighway purposes only, as these terms are defined in this article.
(n) "Commission" or "department" means the Department of Revenue, acting either directly or through its duly authorized officers, agents or employees.
(o) "United States government" means and includes all purchasing officers of the Armed Forces of the United States and the United States Property and Fiscal Officer for the State of Mississippi or any other state appointed pursuant to Section 708, Title 32, United States Code, when purchasing gasoline with federal funds for the account of and use by a component of the Armed Forces as herein defined.
(p) "Armed Forces" means and includes all components of the Armed Forces of the United States including the Army National Guard, the Army National Guard of the United States, the Air National Guard and the Air National Guard of the United States, as those terms are defined in Section 101, Title 10, United States Code, and any other reserve component of the Armed Forces of the United States enumerated in Section 261, Title 10, United States Code.
(q) "Blend stock" means ethanol, methanol or any other products blended with gasoline to produce motor fuel.
(r) "Blender" means any person other than a refiner who blends blend stock with gasoline or who sells or distributes blend stock for the purpose of being blended with gasoline.
(s) "Racing gasoline" means gasoline manufactured exclusively for use in racing and gasoline containing lead, or having an octane rating of 105 or higher that is not suitable for use on the highways.
(t) "Fuel alcohol" means alcohol, methanol or fuel grade ethanol.
(u) "Position holder" means any person holding an inventory position in motor fuel in a terminal, as reflected on the records of the terminal operator. A person holds the inventory position in motor fuel when that person has a contract with the terminal operator for the use of storage facilities and services for fuel at the terminal. The term "position holder" includes any terminal operator who owns fuel in the terminal.
(v) "Retailer" means any person maintaining storage facilities for motor fuel and who sells the fuel at retail or dispenses the fuel at a retail location.
(w) "Supplier" means:
(i) Any position holder or any person receiving motor fuel under a two-party exchange;
(ii) A fuel alcohol provider;
(iii) A biodiesel provider; or
(iv)_ A refiner.
(x) "Terminal" means any motor fuel storage and distribution facility that has been assigned a terminal control number by the Internal Revenue Service, is supplied by pipeline, railcar, truck or marine vessel and from which motor fuel may be removed at a rack.
SECTION 6. Section 27-55-527, Mississippi Code of 1972, is amended as follows:
27-55-527. (1) There shall not be included in the measure of the tax levied in this article any special fuel:
(a) Sold or delivered by a bonded distributor of special fuel to a second bonded distributor of special fuel within this state, but nothing in this exclusion shall exempt the second bonded distributor of special fuel from paying the tax unless the second bonded distributor of special fuel sells or delivers said special fuel to a third bonded distributor of special fuel, in which event the third bonded distributor of special fuel shall be liable for the tax.
(b) Sold to the United States government for use of the Armed Forces only, and delivered in quantities of not less than four thousand (4,000) gallons.
(c) Delivered to a bonded warehouse for storage within this state for the United States Department of Interior.
(d) Exported to a destination beyond the borders of this state by a bonded distributor of special fuel when the tax on the special fuel has been paid or on which the tax liability imposed by this article has accrued against such bonded distributor.
(e) Imported by, or sold to, any refiner or processor in this state for the purpose of being refined or further processed.
(f) Sold or delivered to any person within this state to be used as a herbicide or as a solvent for insecticides, wood preservatives and like products, or when so used in a commercial process that they become a component part of any manufactured product or where used as a processing agent in the treatment of raw material in manufacturing any product.
(g) Sold or delivered to be used for test purposes at any regularly established testing laboratory in this state.
(h) Sold to be consumed as fuel by any boat, vessel, ship, towboat or dredgeboat, or sold to the holder of a Marine Dealers Permit for resale or distribution as fuel for a boat, vessel, ship, towboat or dredgeboat.
(i) Sold as bunker oil or sold to be used for the generation of heat in a firebox or furnace.
(j) Sold or delivered to be used for the purpose of generating electricity.
(k) Sold for use as fuel in a railroad locomotive when subject to the tax levied by Section 27-59-301 et seq.
(l) Sold or delivered in bond, or sold or delivered, to any person within a foreign-trade zone within this state and sold, used, consumed, distributed, stored or withdrawn from storage and used to propel aircraft on an international flight including any interim stops within the United States so long as the origin or ultimate destination of the aircraft is outside the United States and District of Columbia. As used in this paragraph, "foreign-trade zone" means a foreign-trade zone operated and maintained by a public or private corporation under the provisions of Sections 59-3-31 through 59-3-37.
(m) Sold or delivered to any person to be used as fuel alcohol for purposes authorized under Sections 1 and 2 of this act.
(2) The exemptions set forth in paragraphs (f), (h), (i) and (j) of subsection (1) of this section shall not apply to special fuel used in performing contracts for construction, reconstruction, maintenance or repairs, where those contracts are entered into with the State of Mississippi, any political subdivision of the State of Mississippi, or any department, agency or institution of the State of Mississippi or any political subdivision thereof.
(3) Evidence of exempt transactions provided in this section and the subsections thereof shall consist of copies of invoices, documents or any other evidence that may be required by the commission.
(4) Any person other than a bonded distributor of special fuel who has delivered or sold special fuel on which the tax has been paid by him to the vendor may, if the special fuel is subject to exemption under this article, assign his claim for exemption to any bonded distributor of special fuel in this state. The bonded distributor to whom the claim for exemption is assigned may deduct the amount of the tax exemption from his next special fuel report, provided the distributor furnishes evidence satisfactory to the commission that the claim for exemption is valid.
(5) (a) When special fuel is withdrawn from the storage tank of a refiner, processor, marine or pipeline terminal operator and the tax is paid on that special fuel and it or any part thereof cannot be delivered to a purchaser, the refiner, processor, marine or pipeline terminal operator may deduct the tax on all or that portion of the special fuel not delivered to a purchaser from its next special fuel distributor's tax report, if the refiner, processor, marine or pipeline terminal operator submits with the distributor's tax report, the following:
(i) A written report setting forth the reasons why the delivery could not be made;
(ii) Proof or evidence satisfactory to the commission that the tax in question had theretofore been paid to the commission; and
(iii) Proof or evidence satisfactory to the commission that the nondelivered special fuel was actually returned to the refinery, processor, marine or pipeline terminal from which it was taken for the purpose of delivering it to a purchaser.
(b) Immediately upon ascertainment by the refiner, processor, marine or pipeline terminal operator that the special fuel cannot be delivered, he or it shall immediately notify the commission of this fact and before moving his or its truck or other means of transporting the special fuel from the intended point of delivery. If the commission desires to inspect the truck or other means of conveyance, the refiner, processor, marine or pipeline terminal operator shall arrange for the inspection at that point or at any other point that may be designated by the commission.
(6) In order to claim exemptions provided for under this article, the distributor of special fuel must file claims therefor within three (3) years from the date of sale or delivery; otherwise, claims for those exemptions shall be disallowed.
SECTION 7. This act shall take effect and be in force from and after July 1, 2010.