Fill and Sign the Workload Reassignment Request Form Stephen F Austin State Sfasu

90711.0300 FIRST ENGROSSMENT Fifty-sixth Legislative Assembly of North Dakota ENGROSSED HOUSE BILL NO. 1462 Introduced by Representatives Timm, Dorso 1 A BILL for an Act to create and enact sections 57-43.1-02.2, 57-43.1-12.1, 57-43.2-03.1, 2 57-43.2-04.4, 57-43.2-38, 57-43.3-02.2, 57-43.3-09, 57-43.3-14, 57-43.3-18, 57-43.3-28, and 3 chapter 57-43.4 of the North Dakota Century Code, relating to collection by the supplier of 4 motor vehicle, special fuels, aviation fuels, and alternative fuels taxes, taxation of inventories, 5 administration, enforcement, and penalties; to amend and reenact sections 57-43.1-02, 6 57-43.1-14, 57-43.1-16, 57-43.1-24, 57-43.1-26, 57-43.2-01, 57-43.2-02, 57-43.2-03, 7 57-43.2-04.1, 57-43.2-05, 57-43.2-07, 57-43.2-11, 57-43.2-21, and 57-43.3-02 of the North 8 Dakota Century Code, relating to collection by suppliers of motor vehicle, special fuels, aviation 9 fuels, and alternative fuels taxes, taxation of inventories, administration, enforcement, and 10 penalties; to repeal sections 57-43.1-27 and 57-43.3-24 of the North Dakota Century Code, 11 relating to motor vehicle fuels tax imposition and credit for losses and aviation fuel taxes 12 collection allowances; and to provide an effective date. 13 BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA: SECTION 1. AMENDMENT. Section 57-43.1-02 of the 1997 Supplement to the North 14 15 Dakota Century Code is amended and reenacted as follows: 57-43.1-02. (Effective through December 31, 1999) Tax imposed on motor vehicle 16 17 18 fuels. 1. liters] is imposed on all motor vehicle fuel sold or used in this state. 19 20 Except as otherwise provided in this section, a tax of twenty cents per gallon [3.79 2. The dealer A supplier shall collect remit the tax imposed by this section from the 21 on motor vehicle fuel used, on the wholesale distribution of motor vehicle fuel to a 22 distributor or retailer, and on direct sales of motor vehicle fuel to a consumer on all 23 sales. For a supplier who is also a distributor or retailer, the motor vehicle fuel 24 must be considered sold and the tax imposed when the fuel is removed from a Page No. 1 90711.0300 Fifty-sixth Legislative Assembly 1 terminal by the supplier. A distributor who is an importer shall remit the tax 2 imposed by this section on motor vehicle fuel imported into the state. 3 3. Sales of fuel in the original package may be made to a licensed dealer, and the 4 dealer may collect the tax imposed by this chapter, but on sales in the original 5 package to persons other than licensed dealers, the dealer is liable for the tax. 6 The tax imposed by this section does not apply on a sale by a supplier to another 7 supplier, or on an export by a licensed exporter. 8 4. A supplier required to remit the tax imposed by this section shall pass the tax on to 9 the distributor, retailer, or consumer. A distributor shall pass the tax on to a retailer 10 or consumer. A retailer shall pass the tax on to a consumer. 11 5. The person required to remit the tax imposed by this section shall pay the tax to 12 the commissioner by the twenty-fifth day of the calendar month after the month 13 during which the motor vehicle fuel was acquired, sold, or used by the person. 14 When the twenty-fifth day of the calendar month falls on a Saturday, Sunday, or 15 legal holiday, the due date is the first working day after the Saturday, Sunday, or 16 legal holiday. When payment is made by mail, the payment is timely if the 17 envelope containing the payment is postmarked by the United States postal 18 service or other postal carrier service before midnight of the due date. 19 6. A licensed distributor may delay the payment of the tax required to be paid to a 20 supplier until one day prior to the date the tax is due and payable by the supplier. 21 To be timely, a distributor's tax payment must be available to the supplier for 22 deposit on or before the date the distributor's tax payment is due. The licensed 23 distributor may make the payment to a supplier by electronic funds transfer or by 24 mail. 25 7. The commissioner shall pay over all of the moneys received during each calendar month to the state treasurer. 26 27 (Effective after December 31, 1999) Tax imposed on motor vehicle fuels. 28 1. [3.79 liters] is imposed on all motor vehicle fuel sold or used in this state. 29 30 31 Except as otherwise provided in this section, a tax of seventeen cents per gallon 2. The dealer A supplier shall collect remit the tax imposed by this section from the on motor vehicle fuel used, on the wholesale distribution of motor vehicle fuel to a Page No. 2 90711.0300 Fifty-sixth Legislative Assembly 1 distributor or retailer, and on direct sales of motor vehicle fuel to a consumer on all 2 sales. For a supplier who is also a distributor or retailer, the motor vehicle fuel 3 must be considered sold and the tax imposed when the fuel is removed from a 4 terminal by the supplier. A distributor who is an importer shall remit the tax 5 imposed by this section on motor vehicle fuel imported into the state. 6 3. Sales of fuel in the original package may be made to a licensed dealer, and the 7 dealer may collect the tax imposed by this chapter, but on sales in the original 8 package to persons other than licensed dealers, the dealer is liable for the tax. 9 The tax imposed by this section does not apply on a sale by a supplier to another 10 supplier or on an export by a licensed exporter. 11 4. A supplier required to remit the tax imposed by this section shall pass the tax on to 12 the distributor, retailer, or consumer. A distributor shall pass the tax on to a retailer 13 or consumer. A retailer shall pass the tax on to a consumer. 14 5. The person required to remit the tax imposed by this section shall pay the tax to 15 the commissioner by the twenty-fifth day of the calendar month after the month 16 during which the motor vehicle fuel was acquired, sold, or used by the person. 17 When the twenty-fifth day of the calendar month falls on a Saturday, Sunday, or 18 legal holiday, the due date is the first working day after the Saturday, Sunday, or 19 legal holiday. When payment is made by mail, the payment is timely if the 20 envelope containing the payment is postmarked by the United States postal 21 service or other postal carrier service before midnight of the due date. 22 6. A licensed distributor may delay the payment of the tax required to be paid to a 23 supplier until one day prior to the date the tax is due and payable by the supplier. 24 To be timely, a distributor's tax payment must be available to the supplier for 25 deposit on or before the date the distributor's tax payment is due. The licensed 26 distributor may make the payment to a supplier by electronic funds transfer or by 27 mail. 28 29 30 31 7. The commissioner shall pay over all of the moneys received during each calendar month to the state treasurer. SECTION 2. Section 57-43.1-02.2 of the North Dakota Century Code is created and enacted as follows: Page No. 3 90711.0300 Fifty-sixth Legislative Assembly 1 57-43.1-02.2. Inventory tax. A person who has title to or possession of tax-free motor 2 vehicle fuel as of the close of the business day preceding the effective date of this Act, is 3 subject to the tax imposed by this chapter on the tax-free motor vehicle fuel in inventory. The 4 tax on the inventory is due and payable to the commissioner on or before the twenty-fifth day of 5 February succeeding the effective date of this Act. The tax on inventories does not apply to a 6 supplier's motor vehicle fuel in a terminal. 7 8 9 SECTION 3. Section 57-43.1-12.1 of the North Dakota Century Code is created and enacted as follows: 57-43.1-12.1. Credit for taxes paid on worthless accounts and refunds. Except in 10 the case of sales to bonded distributors, taxes paid on motor vehicle fuel represented by 11 accounts found to be worthless and actually charged off for income tax purposes may be taken 12 by a supplier as a credit against subsequent taxes due provided the accounts charged off 13 included the cost of the fuel as well as the taxes due. If in any case the credit, or any part of it, 14 cannot be utilized by the supplier because of a discontinuance of a business or for other valid 15 reason, the amount may be refunded. If the worthless account is charged off by a distributor or 16 a retailer, the distributor or retailer may file a claim with the commissioner for a refund of the 17 noncollectible taxes. If the worthless account is subsequently collected, the amount of the tax 18 collected must be remitted to the commissioner. 19 In the case of supplier sales to bonded distributors, if the distributor fails to pay the 20 supplier the tax on or before the date the supplier must remit it to the commissioner, the 21 supplier may receive a credit for such nonpayment on a subsequent month's tax return. To 22 receive such credit, the supplier shall notify the commissioner no later than ten working days 23 after the due date of the distributor's failure to timely pay. This notification must include such 24 information as the commissioner requires. The commissioner shall issue the supplier written 25 confirmation that the credit is approved. 26 If the commissioner is notified that a distributor has failed to pay the supplier by the date 27 the tax is due, the commissioner may revoke the distributor's license. In addition, the 28 commissioner may pursue payment from the distributor's bonding company to satisfy the 29 liability. If the commissioner revokes the distributor's license, the commissioner shall advise the 30 supplier, and so advised, the supplier is no longer afforded the protection under this section. If 31 a distributor's license is reinstated, the commissioner shall notify the supplier. Page No. 4 90711.0300 Fifty-sixth Legislative Assembly 1 2 SECTION 4. AMENDMENT. Section 57-43.1-14 of the North Dakota Century Code is amended and reenacted as follows: 3 57-43.1-14. Form and contents of application for dealer's license - Fee - Bond or 4 other security letter of credit required. As a condition precedent to the issuance of a single 5 or multiple license, a supplier, distributor, or importer shall furnish a surety bond, a cash bond, 6 or an approved letter of credit as security to guarantee the payment of the motor vehicle fuel 7 tax liabilities imposed by this chapter. A refiner, a terminal operator, a distributor who is not an 8 importer, or an exporter who is not also licensed as a supplier, is exempt from this requirement. 9 1. To procure a license as a dealer in motor vehicle fuel, an applicant shall file with 10 the commissioner an application upon a form prescribed and furnished by the 11 commissioner. Such application must contain: The surety bond, cash bond, or 12 letter of credit must be in an amount prescribed by the commissioner but not less 13 than one thousand dollars. 14 a. The name under which the applicant intends to transact business. 15 b. If a partnership, the name and address of each of the several persons constituting the firm. 16 17 c. the names of the directors and corporate officers. 18 19 If a domestic corporation, the corporate name, the date of incorporation, and d. If a foreign corporation, the corporate name, the state where and the time 20 when incorporated, the name of the resident agent, the location of each place 21 of business, and the date on which the business was established. 22 e. date of formation, and the names of the governors and managers. 23 24 If a domestic limited liability company, the limited liability company name, the f. If a foreign limited liability company, the limited liability company name, the 25 state where and the time when formed, the name of the resident agent, the 26 location of each place of business, and the date on which the business was 27 established. 28 g. Any other information the commissioner may require. The application must 29 be signed and verified by the owner of the business, if an individual, 30 partnership, or unincorporated association, by any authorized officer, if a 31 corporation, and by any authorized manager, if a limited liability company. Page No. 5 90711.0300 Fifty-sixth Legislative Assembly 1 2. At the time of applying for a license, the applicant shall pay to the commissioner as 2 a license fee the sum of twenty dollars. This fee must be paid into the state 3 treasury and credited to the general fund. The surety bond, cash bond, or letter of 4 credit is subject to approval by the commissioner. 5 3. As a condition precedent to the issuance of a license, a dealer shall furnish a bond 6 in an amount set by the commissioner, but not less than one thousand dollars, 7 guaranteeing the payment of the motor vehicle fuel tax collected by the dealer. 8 The bond is subject to approval by the commissioner and must be in effect for at 9 least three years. After a dealer has had a valid license for three or more years, 10 the commissioner may review the records of the dealer and waive the bond 11 requirement. The bond requirement may be reinstated at the discretion of the 12 commissioner. After a single or multiple license has been in effect for five or more 13 years, the commissioner may review the person's records and may waive the 14 requirement for a security. The requirement for a security may be reinstated at the 15 discretion of the commissioner. 16 4. In lieu of a bond, securities, including letters of credit, approved by the 17 commissioner in such amounts as the commissioner may prescribe, may be 18 deposited with the commissioner, which securities shall be kept in the custody of 19 the commissioner and may be sold by the commissioner at public or private sale, 20 without notice to the depositor, if it becomes necessary to recover any tax, 21 penalties, or interest due. All moneys deposited as security with the commissioner 22 under the provisions of this subsection must be paid by the commissioner to the 23 state treasurer and credited by the treasurer into a special fund to be known as the 24 "motor vehicle fuel tax security trust fund". If any tax, penalty, or interest imposed 25 by this chapter is not paid when due, the commissioner shall certify that 26 information to the director of the office of management and budget who shall 27 transmit the money to the commissioner who shall apply the money deposited by 28 the person or so much of the deposit as is necessary to satisfy the tax, penalty, 29 and interest due. The commissioner, when in the commissioner's judgment it is no 30 longer necessary to require the deposit to be maintained by the depositor, shall 31 certify that information to the director of the office of management and budget who Page No. 6 90711.0300 Fifty-sixth Legislative Assembly 1 shall pay the unused money to the depositor. A surety bond or letter of credit 2 provided as security must be kept in the custody of the commissioner and may be 3 used by the commissioner, without notice to the principal, if it becomes necessary 4 to cover the motor vehicle fuel tax, penalties, and interest due. 5 5. Money deposited with the commissioner as a cash bond must be made in the form 6 of a cashier's check or bank money order payable to the commissioner. The 7 money received must be paid by the commissioner to the state treasurer and 8 credited by the treasurer to a special fund known as the motor fuel tax security 9 trust fund. The money deposited may be used by the commissioner, without 10 notice to the depositor, if it becomes necessary to cover tax, penalties, and interest 11 due. If the money deposited is used to cover unpaid liabilities, the commissioner 12 shall certify the information to the director of the office of management and budget. 13 The office of management and budget shall transmit the money to the 14 commissioner who shall apply as much of the money deposited by the person as is 15 necessary to satisfy the liabilities. When in the commissioner's judgment it is no 16 longer necessary to require the deposit to be maintained, the commissioner shall 17 certify the information to the director of the office of management and budget who 18 shall pay the unused money to the depositor. 19 20 21 SECTION 5. AMENDMENT. Section 57-43.1-16 of the 1997 Supplement to the North Dakota Century Code is amended and reenacted as follows: 57-43.1-16. Report Monthly report by dealer to commissioner refiner, supplier, 22 importer, or exporter required. Each dealer in motor vehicle fuel who engages in the sale or 23 use of motor vehicle fuel in this state shall render to the commissioner, not later than the 24 twenty-fifth day of each calendar month, on the form prescribed, prepared, and furnished by the 25 commissioner, a statement of the number of gallons [liters] of motor vehicle fuel sold, used, 26 received, and delivered by that dealer during the preceding calendar month. If the 27 commissioner deems it necessary to ensure the payment of the tax imposed by this chapter, 28 the commissioner may require returns and payment of the tax to be made for periods other 29 than monthly periods. If the dealer is a domestic corporation, the statement must be signed by 30 the president or secretary, and if a foreign corporation, by the resident general agent, attorney 31 in fact, or by a chief accountant or officer. If the dealer is a domestic limited liability company, Page No. 7 90711.0300 Fifty-sixth Legislative Assembly 1 the statement must be signed by the president or treasurer, and if a foreign limited liability 2 company, by the resident agent, president, or treasurer. If the dealer is a firm, or an 3 association of individuals, the statement must be made by the managing agent or owner. 4 1. A refiner, supplier, importer, or exporter shall file a monthly report with the 5 commissioner no later than the twenty-fifth day of each calendar month covering 6 motor vehicle fuel acquired, sold, and used during the preceding calendar month. 7 When the twenty-fifth day of the calendar month falls on a Saturday, Sunday, or 8 legal holiday, the due date is the first working day after the Saturday, Sunday, or 9 legal holiday. When the report is filed by mail, the report is timely if the envelope 10 containing the report is postmarked by the United States postal service or other 11 postal carrier service before midnight of the due date. 12 2. The report to the commissioner must be on a form prescribed and furnished by the 13 commissioner. The commissioner may require that all or part of the report be 14 submitted in an electronic format approved by the commissioner, provided the 15 person required to file the report is able to use an electronic format. The report 16 must contain the information as required by the commissioner including: 17 a. A detailed schedule of gallons of motor vehicle fuel refined, purchased, imported, and exported. 18 b. 19 A detailed schedule of gallons of motor vehicle fuel sold to a person eligible to purchase the motor vehicle fuel without the tax imposed by this chapter. 20 c. 21 A detailed schedule of gallons of motor vehicle fuel sold tax-paid for resale, including a list of persons who purchased the motor vehicle fuel for resale. 22 d. 23 The total number of gallons of motor vehicle fuel sold and used subject to the tax imposed by this chapter. 24 e. 25 The number of gallons of motor vehicle fuel sold tax-exempt to a qualified consumer. 26 f. 27 The number of gallons of motor vehicle fuel in inventory at the beginning of 28 the calendar month, the number of gallons in inventory at the close of the 29 calendar month, and any gains or losses experienced. 30 31 3. The report must be signed by the taxpayer to be valid and must contain a written declaration that it is made and subscribed under penalties of perjury. Page No. 8 90711.0300 Fifty-sixth Legislative Assembly 1 4. The tax commissioner may prescribe alternative methods for signing, subscribing, 2 or verifying a return filed by electronic means, including telecommunications, that 3 shall have the same validity and consequence as the actual signature and written 4 declaration for a paper return. The report must contain a statement of the 5 quantities of motor vehicle fuel sold, used, received, and delivered within this state 6 from the dealer's place of business. If any motor vehicle fuel has been sold and 7 delivered by the dealer to customers in the original package, whether in tank car, 8 barrel, or other package, and in the form and condition in which the same was 9 imported, the statement must show the amount of motor vehicle fuel so sold and 10 delivered, and the names and addresses of the persons to whom it was sold and 11 delivered. 12 13 14 SECTION 6. AMENDMENT. Section 57-43.1-24 of the North Dakota Century Code is amended and reenacted as follows: 57-43.1-24. Deduction of cost of collecting Tax credit allowance. On making 15 payments to the commissioner as provided in this chapter, the dealer shall deduct two percent 16 from the amount of tax due to cover the cost of collecting the tax and transmitting it to the 17 commissioner. A supplier shall deduct two and seven-tenths percent from the amount of tax 18 due and payable as a credit to cover the cost of collecting the tax and to cover shrinkage and 19 evaporation losses due to temperature adjustments. The supplier shall pass two and 20 five-tenths percent of the credit allowance on to the distributor or retailer. The supplier shall 21 report the credit allowance on the monthly tax report and shall retain records verifying that the 22 credit was passed on to a distributor. The tax credit allowance does not apply to additional tax 23 assessed during an audit. 24 25 26 SECTION 7. AMENDMENT. Section 57-43.1-26 of the North Dakota Century Code is amended and reenacted as follows: 57-43.1-26. Inventory gains - Losses - Deductions allowed to dealer - Remedies. 27 Each dealer of motor vehicle fuel may deduct the actual shrinkage of the total gallonage of 28 motor fuel received during each calendar month from the statement submitted as required in 29 section 57-43.1-16, but the allowance may not exceed one percent of the total received during 30 that month. For purposes of this chapter, it is presumed that all motor vehicle fuel received by 31 each dealer above this one percent allowance, except that gallonage shown as inventory at the Page No. 9 90711.0300 Fifty-sixth Legislative Assembly 1 end of each calendar month, and other allowances provided in this chapter, has been sold, 2 delivered, or used and the dealer is liable for the amount of the motor vehicle fuel tax on each 3 gallon [liter] of motor vehicle fuel not accounted for. For purposes of this chapter, motor vehicle 4 fuel refined at a refinery in this state and placed in storage at the refinery, and motor vehicle 5 fuel brought into the state by pipeline and placed in storage at a pipeline terminal, is not 6 deemed received until it is withdrawn from the refinery or terminal storage for sale or use in this 7 state, or for shipment or delivery to destinations in this state. 8 1. A supplier, distributor, or retailer shall take a physical inventory reading of all motor 9 vehicle fuel located in a terminal, underground tank, aboveground tank, railcar, 10 storage tank of a tank truck, and the storage tank of a bulk delivery truck on a 11 regular basis. The physical inventory reading must include motor vehicle fuel 12 stored in a barrel, drum, or other receptacle. 13 2. imposed under section 57-43.1-02 on all motor vehicle fuel not accounted for. 14 15 Except as otherwise provided in this chapter, a supplier is liable for the tax 3. When sold or used by a supplier, distributor, or retailer, a gain in motor vehicle fuel 16 inventories is subject to the tax imposed by this chapter in the same manner as 17 motor vehicle fuel purchased, imported, or otherwise acquired. 18 4. The commissioner may allow a tax credit to a supplier and a tax refund to a 19 distributor or retailer for actual inventory losses due to a casualty loss, based on 20 proof of the loss as required by the commissioner. 21 22 23 SECTION 8. AMENDMENT. Section 57-43.2-01 of the 1997 Supplement to the North Dakota Century Code is amended and reenacted as follows: 57-43.2-01. Definitions. As used in this chapter, unless the context otherwise 24 requires: 25 1. "Agricultural purpose" means the science, art, and business of farming. It includes 26 raising crops, ranching, beekeeping, tree nurseries, agricultural units of colleges 27 and universities, custom combining, manure spreading, and stack moving 28 operations. Fuel used for an agricultural purpose includes fuel used in a vehicle, 29 engine, or machine, movable or immovable, operated in whole or in part by internal 30 combustion. It does not include fuel used to operate a licensed motor vehicle. 31 2. "Commissioner" means the state tax commissioner. Page No. 10 90711.0300 Fifty-sixth Legislative Assembly 1 3. "Consumer" means a user of special fuel including any person purchasing special 2 fuel in this state for use in a licensed motor vehicle; any person importing special 3 fuel into this state or purchasing special fuel in this state for use as heating fuel, or 4 for an agricultural, industrial, or railroad purpose; or any person purchasing special 5 fuel in this state for use in recreational or any other types of motor vehicles. It 6 does not include a dealer or a retailer importing or purchasing special fuel for 7 resale. 8 4. "Dealer" means any special fuel dealer, special fuel wholesaler, or wholesale dealer of liquefied petroleum gas. 9 10 5. "Director" means the director of the department of transportation. 11 6. "Dyed special fuel" means special fuel to which an indelible dye meeting United 12 States environmental protection agency and internal revenue service regulations 13 has been added before or upon withdrawal at a terminal or refinery rack. 14 7. "Heating fuel use" means use of special fuel to heat homes, private and public 15 office buildings, or private and public commercial buildings or use of special fuel in 16 stoves or burners or for any other heating purposes. 17 7. 8. "Highway purpose" means any use of special fuel in any motor vehicle in any 18 phase of construction, reconstruction, repair, or maintenance of public roads or 19 highways, but does not include that special fuel used for heating of oils, gravel, 20 bituminous mixture, or in any equipment used in the preparation of any materials to 21 be used on any type of road or highway surfacing. 22 8. 9. "Importer for use" means any person importing fuel into this state in the fuel supply 23 tank or tanks of any motor vehicle or combination of vehicles used, designed, or 24 maintained for transportation of persons or property; and having two axles and a 25 gross weight exceeding twenty-six thousand pounds [1179.3401 kilograms]; or 26 having three or more axles regardless of weight; is used in combination when the 27 weight of such combination exceeds twenty-six thousand pounds [1179.3401 28 kilograms] gross vehicle weight. In the case of motor vehicles that are leased or 29 rented, the importer for use means the lessee or renter unless the commissioner 30 has designated the lessor, renter, or some other person as the importer for use. 31 9. 10. "Industrial purpose" means: Page No. 11 90711.0300 Fifty-sixth Legislative Assembly 1 a. A manufacturing, warehousing, or loading dock operation; 2 b. Construction; 3 c. Sand and gravel processing; 4 d. Well drilling, well testing, or well servicing; 5 e. Maintenance of business premises, golf courses, or cemeteries; 6 f. A commercial or contract painting operation; 7 g. Electrical services; 8 h. A refrigeration unit on a truck; 9 i. A power take-off unit; and 10 j. Other similar business activity. 11 Fuel used for an industrial purpose includes fuel used in a vehicle, engine, or 12 machine, movable or immovable, operated in whole or in part by internal 13 combustion. It does not include heating fuel, fuel used for an agricultural purpose, 14 fuel used for a railroad purpose, or fuel used to operate a licensed motor vehicle. 15 10. 16 17 "Kerosene" means a light flammable hydrocarbon fuel or solvent which, for special fuel purposes, is used as heating fuel. 11. "Licensed motor vehicle" means any motor vehicle licensed for operation upon 18 public roads or highways, but does not include a vehicle with a permanently 19 mounted manure spreader or stack moving unit. 20 12. "Motor vehicle" means a vehicle, engine, or machine, movable or immovable, 21 operated in whole or in part by internal combustion using one or more of the 22 special fuels defined in this chapter but does not include aircraft. 23 13. "Person" means every natural person, fiduciary, association, corporation, or limited 24 liability company. Whenever used in any cause prescribing and imposing a fine or 25 imprisonment, or both, the term "person" as applied to an association means and 26 includes the partners or members thereof, as applied to corporations, the officers 27 thereof, and as applied to limited liability companies, the managers thereof. 28 14. "Public road or highway" means every way or place generally open to the use of 29 the public as a matter of right, for the purpose of motor vehicle travel, 30 notwithstanding that it may be temporarily closed or subject to restricted travel due 31 to construction, reconstruction, repair, or maintenance. Page No. 12 90711.0300 Fifty-sixth Legislative Assembly 1 15. "Railroad purpose" means the operation of railroad locomotives and the 2 construction, reconstruction, repair, and maintenance of railroads. Fuel used for a 3 railroad purpose includes fuel used to operate a railroad locomotive, and fuel used 4 in a motor vehicle for purposes of construction, reconstruction, repair, and 5 maintenance of railroads. It does not include fuel used in a licensed motor vehicle. 6 16. "Sale" means the transfer of title or possession, exchange, or barter, conditional or 7 otherwise, in any manner or by any means, for a consideration, of special fuels 8 between special fuel dealers or between a special fuel dealer and a retailer or a 9 consumer. 10 17. "Special fuel" means all combustible gases and liquids suitable for the generation 11 of power for propulsion of motor vehicles and includes compressed natural gas 12 kerosene, all gases and liquids which meet the specifications as determined by the 13 state department of health pursuant to the provisions of section 19-10-10, as well 14 as all liquids determined by the state department of health to be heating oil 15 pursuant to the provisions of section 19-10-10, except that it does not include 16 either motor vehicle fuels as defined in section 57-43.1-01, aviation fuels as 17 defined in section 57-43.3-01, alternative fuels as defined in section 57-43.4-01, or 18 antifreeze as defined by section 19-16.1-02. 19 18. 20 21 "Special fuel dealer" means any person in the business of handling special fuel who delivers or sells any special fuel to a special fuel user. 19. "Special fuel wholesaler" means any person who produces, refines, manufactures, 22 blends, or compounds special fuel, or who imports or exports special fuel, other 23 than in the fuel supply tank of a motor vehicle, for distribution to a special fuel 24 dealer for sale and use. 25 20. "Wholesale dealer of liquefied petroleum gas" means any person who delivers or 26 sells that fuel known as liquefied petroleum gas, commonly called "propane" or 27 "butane", to any retail dealer, or user of liquefied petroleum gas. 28 29 30 SECTION 9. AMENDMENT. Section 57-43.2-02 of the 1997 Supplement to the North Dakota Century Code is amended and reenacted as follows: 57-43.2-02. (Effective through December 31, 1999) Tax imposed. Page No. 13 90711.0300 Fifty-sixth Legislative Assembly 1 1. Except as otherwise provided in this chapter, an excise tax of twenty cents per 2 gallon [3.79 liters] is imposed on the sale or delivery of all special fuel to any 3 consumer sold or used in this state. For the purpose of determining the tax upon 4 compressed natural gas under this section, one hundred twenty cubic feet [3.40 5 cubic meters] of compressed natural gas is equal to one gallon [3.79 liters] of other 6 special fuel. 7 2. The dealer A supplier shall remit the tax imposed by this section on all sales to 8 consumers special fuel used, on the wholesale distribution of special fuel to a 9 distributor or retailer, and on direct sales of special fuel to a consumer. For a 10 supplier who is also a distributor or retailer, the special fuel must be considered 11 sold and the tax imposed when the fuel is removed from a terminal by the supplier. 12 A distributor who is an importer shall remit the tax imposed by this section on 13 special fuel imported into the state. 14 3. The dealer may make sales of special fuel to another dealer free of the tax 15 imposed by this chapter. The tax imposed by this section does not apply on sales 16 by a supplier to another supplier or on an export by a licensed exporter. 17 4. A supplier required to remit the tax imposed by this section shall pass the tax on to 18 the distributor, retailer, or consumer. A distributor shall pass the tax on to a retailer 19 or consumer. A retailer shall pass the tax on to a consumer. 20 5. The person required to remit the tax imposed by this section shall pay the tax to 21 the commissioner by the twenty-fifth day of the calendar month after the month 22 during which the special fuel was acquired, sold, or used by the person. When the 23 twenty-fifth day of the calendar month falls on a Saturday, Sunday, or legal 24 holiday, the due date is the first working day after the Saturday, Sunday, or legal 25 holiday. When payment is made by mail, the payment is timely if the envelope 26 containing the payment is postmarked by the United States postal service or other 27 postal carrier service before midnight of the due date. 28 6. A licensed distributor may delay the payment of the tax required to be paid to a 29 supplier until one day prior to the date the tax is due and payable by the supplier. 30 To be timely, a distributor's tax payment must be available to the supplier for 31 deposit on or before the date the distributor's tax payment is due. The licensed Page No. 14 90711.0300 Fifty-sixth Legislative Assembly 1 distributor may make the payment to a supplier by electronic funds transfer or by 2 mail. 3 7. The commissioner shall pay over all of the moneys received during each calendar month to the state treasurer. 4 5 (Effective after December 31, 1999) Tax imposed. 6 1. Except as otherwise provided in this chapter, an excise tax of seventeen cents per 7 gallon [3.79 liters] is imposed on the sale or delivery of all special fuel to any 8 consumer sold or used in this state. For the purpose of determining the tax upon 9 compressed natural gas under this section, one hundred twenty cubic feet [3.40 10 cubic meters] of compressed natural gas is equal to one gallon [3.79 liters] of other 11 special fuel. 12 2. The dealer A supplier shall remit the tax imposed by this section on all sales to 13 consumers special fuel used, on the wholesale distribution of special fuel to a 14 distributor or retailer, and on direct sales of special fuel to a consumer. For a 15 supplier who is also a distributor or retailer, the special fuel must be considered 16 sold and the tax imposed when the fuel is removed from a terminal by the supplier. 17 A distributor who is an importer shall remit the tax imposed by this section on 18 special fuel imported into the state. 19 3. The dealer may make sales of special fuel to another dealer free of the tax 20 imposed by this chapter. The tax imposed by this section does not apply on sales 21 by a supplier to another supplier, or on an export by a licensed exporter. 22 4. A supplier required to remit the tax imposed by this section shall pass the tax on to 23 the distributor, retailer, or consumer. A distributor shall pass the tax on to a retailer 24 or consumer. A retailer shall pass the tax on to a consumer. 25 5. The person required to remit the tax imposed by this section shall pay the tax to 26 the commissioner by the twenty-fifth day of the calendar month after the month 27 during which the special fuel was acquired, sold, or used by the person. When the 28 twenty-fifth day of the calendar month falls on a Saturday, Sunday, or legal 29 holiday, the due date is the first working day after the Saturday, Sunday, or legal 30 holiday. When payment is made by mail, the payment is timely if the envelope Page No. 15 90711.0300 Fifty-sixth Legislative Assembly 1 containing the payment is postmarked by the United States postal service or other 2 postal carrier service before midnight of the due date. 3 6. A licensed distributor may delay the payment of the tax required to be paid to a 4 supplier until one day prior to the date the tax is due and payable by the supplier. 5 To be timely, a distributor's tax payment must be available to the supplier for 6 deposit on or before the date the distributor's tax payment is due. The licensed 7 distributor may make the payment to a supplier by electronic funds transfer or by 8 mail. 9 7. month to the state treasurer. 10 11 12 The commissioner shall pay over all of the moneys received during each calendar SECTION 10. AMENDMENT. Section 57-43.2-03 of the 1997 Supplement to the North Dakota Century Code is amended and reenacted as follows: 13 57-43.2-03. Special excise tax levied. 14 1. Except as otherwise provided in this chapter, a special excise tax of two percent 15 one and two-tenths cents per gallon [3.79 liters] is imposed on all sales of special 16 fuels, which are exempted from the tax imposed under section 57-43.2-02. For a 17 supplier who is also a distributor or retailer, the special fuel subject to tax under 18 this section must be considered sold and the tax imposed when the fuel is 19 removed from a terminal by the supplier. 20 2. 21 22 The special excise tax applies to all special fuels taxed under section 57-43.2-02 for which taxes are later refunded to any consumer. 3. A consumer importing special fuel into this state, for a purpose for which the 23 special fuel is taxable under this section, is liable for the tax. The commissioner 24 shall collect the tax from the consumer importing the fuel. 25 4. If any fuel subject to tax by this section was subject to tax in any other state or its 26 political subdivisions, the tax in this section applies but at a rate measured by the 27 difference between the rate imposed in this section and the rate imposed by the 28 other state or its political subdivisions. If the tax imposed by the other state or its 29 political subdivisions is the same or greater than the tax imposed by this section, 30 no tax is due. Page No. 16 90711.0300 Fifty-sixth Legislative Assembly 1 5. An invoice, sales ticket, or other sales document issued or created covering a sale 2 taxable under this section must identify the consumer to whom the sale was made, 3 specify the purpose for which the special fuel was sold, and specify whether the 4 fuel was dyed for tax exemption purposes. 5 6. supplier or on an export by a licensed exporter. 6 7 The tax imposed by this section does not apply on sales by a supplier to another 7. The dealer A supplier shall remit the tax imposed by this section on all sales to a 8 and shall pass the tax on to the distributor, retailer, or consumer. A distributor 9 shall pass the tax on to a retailer or consumer. A retailer shall pass the tax on to a 10 consumer. 11 8. The person required to remit the tax imposed by this section shall pay the tax to 12 the commissioner by the twenty-fifth day of the calendar month after the month 13 during which the special fuel was acquired, sold, or used by the person. When the 14 twenty-fifth day of the calendar month falls on a Saturday, Sunday, or legal 15 holiday, the due date is the first working day after the Saturday, Sunday, or legal 16 holiday. When payment is made by mail, the payment is timely if the envelope 17 containing the payment is postmarked by the United States postal service or other 18 postal carrier service before midnight of the due date. A licensed distributor may 19 delay the payment of the tax required to be paid to the supplier until one day prior 20 to the date the tax is due and payable by the supplier. 21 9. A licensed distributor may delay the payment of the tax required to be paid to a 22 supplier until one day prior to the date the tax is due and payable by the supplier. 23 To be timely, a distributor's tax payment must be available to the supplier for 24 deposit on or before the date the distributor's tax payment is due. The licensed 25 distributor may make the payment to a supplier by electronic funds transfer or by 26 mail. 27 28 29 30 10. The commissioner shall pay over all of the moneys received during each calendar month to the state treasurer. SECTION 11. Section 57-43.2-03.1 of the North Dakota Century Code is created and enacted as follows: Page No. 17 90711.0300 Fifty-sixth Legislative Assembly 1 57-43.2-03.1. Inventory tax. A person who has title to or possession of tax-free 2 special fuel as of the close of the business day preceding the effective date of this Act, is 3 subject to the tax imposed by this chapter on the tax-free special fuel in inventory. The tax on 4 the inventory is due and payable to the commissioner on or before the twenty-fifth day of 5 February succeeding the effective date of this Act. The tax on inventories does not apply to a 6 supplier's special fuel in a terminal. 7 8 SECTION 12. AMENDMENT. Section 57-43.2-04.1 of the North Dakota Century Code is amended and reenacted as follows: 9 57-43.2-04.1. Deduction of cost of collecting and remitting Tax credit allowance. 10 On making payments to the commissioner as provided in this chapter, the dealer shall deduct 11 one percent from the amount of tax due, up to a maximum of three hundred dollars per month, 12 to cover the cost of collecting the tax and remitting it to the commissioner. A supplier shall 13 deduct seven-tenths percent from the amount of tax due and payable as a credit to cover the 14 cost of collecting the tax and to cover shrinkage and evaporation losses due to temperature 15 adjustments. The supplier shall pass five-tenths percent of the credit allowance on to the 16 distributor or retailer. The supplier shall report the credit allowance on the monthly tax report 17 and shall retain records verifying that the credit was passed on to a distributor. The tax credit 18 allowance does not apply to additional tax assessed during an audit. 19 20 21 SECTION 13. Section 57-43.2-04.4 of the North Dakota Century Code is created and enacted as follows: 57-43.2-04.4. Credit for taxes paid on worthless accounts and refunds. Except in 22 the case of sales to bonded distributors, taxes paid on special fuels represented by accounts 23 found to be worthless, and actually charged off for income tax purposes, may be taken by a 24 supplier as a credit against subsequent taxes due provided the accounts charged off included 25 the cost of the fuel as well as the taxes due. If in any case the credit, or any part of it, cannot 26 be utilized by the supplier because of a discontinuance of a business or for other valid reason, 27 the amount may be refunded. If the worthless account is charged off by a distributor or a 28 retailer, the distributor or retailer may file a claim with the commissioner for a refund of the 29 noncollectible taxes. If the worthless account is subsequently collected, the tax must be 30 remitted on the amount collected. Page No. 18 90711.0300 Fifty-sixth Legislative Assembly 1 In the case of supplier sales to bonded distributors, if the distributor fails to pay the 2 supplier the tax on or before the date the supplier must remit it to the commissioner, the 3 supplier may receive a credit for such nonpayment on a subsequent month's tax return. To 4 receive such credit, the supplier shall notify the commissioner no later than ten working days 5 after the due date of the distributor's failure to timely pay. This notification must include such 6 information as the commissioner requires. The commissioner shall issue the supplier written 7 confirmation that the credit is approved. 8 If the commissioner is notified that a distributor has failed to pay the supplier by the date 9 the tax is due, the commissioner may revoke the distributor's license. In addition, the 10 commissioner may pursue payment from the distributor's bonding company to satisfy the 11 liability. If the commissioner revokes the distributor's license, the commissioner shall advise the 12 supplier, and so advised, the supplier is no longer afforded the protection under this section. If 13 a distributor's license is reinstated, the commissioner shall notify the supplier. 14 15 16 SECTION 14. AMENDMENT. Section 57-43.2-05 of the North Dakota Century Code is amended and reenacted as follows: 57-43.2-05. Special fuel wholesaler's or dealer's license required Refiner, 17 supplier, distributor, importer, exporter, and terminal operator required to secure license 18 - License fees. No person may act as a special fuel wholesaler or dealer in this state unless 19 that person is a holder of an uncanceled special fuel wholesaler's or dealer's license issued by 20 the commissioner. Application for a special fuel wholesaler's or dealer's license must be made 21 to the commissioner. The application must be filed upon a form prepared and furnished by the 22 commissioner and must contain such information as the commissioner requires. 23 1. A person may not engage in business in this state as a refiner, supplier, distributor, 24 importer, exporter, or terminal operator of special fuel unless that person holds an 25 unrevoked license issued by the commissioner. 26 2. The person shall file an application for a license with the commissioner providing 27 such information as required by the commissioner, on a form or in a format as 28 required by the commissioner. The information must include: 29 a. The name under which the person intends to transact business in this state. Page No. 19 90711.0300 Fifty-sixth Legislative Assembly b. 1 The physical location of each place of business to be covered by the license 2 and the mailing address of the location to which forms and correspondence 3 are to be directed. c. 4 If a partnership, the name and address of each of the persons constituting the partnership. 5 d. 6 If a domestic corporation, the corporate name, the date of incorporation, and the names and addresses of the directors and corporate officers. 7 e. 8 If a foreign corporation, the corporate name, the state and the date of 9 incorporation, the name and address of the resident agent, the location of 10 each place of business, and the date on which the business was established. f. 11 If a domestic limited liability company, the limited liability company name, the 12 date of formation, and the names and addresses of the governors and 13 managers. g. 14 If a foreign limited liability company, the limited liability company name, the 15 state and the date of formation, the name and address of the resident agent, 16 the location of each place of business, and the date on which the business 17 was established. 18 h. 19 The application must be signed by the taxpayer to be valid and must contain a 20 written declaration that it is made and subscribed under penalties of perjury. For 21 an individual, partnership, or unincorporated association, the application must be 22 signed by the owner. For a corporation, the application must be signed by an 23 authorized officer. For a limited liability company, the application must be signed 24 by an authorized manager. 25 3. Any other information the commissioner may require. An applicant for a single or multiple license as a refiner, supplier, distributor, 26 importer, exporter, or terminal operator shall pay to the commissioner a license fee 27 of twenty dollars. The license fee must be paid at the time the application is made. 28 SECTION 15. AMENDMENT. Section 57-43.2-07 of the North Dakota Century Code is 29 30 31 amended and reenacted as follows: 57-43.2-07. Special fuel wholesaler's or dealer's bond Bond or letter of credit. As a condition precedent to the issuance of a single or multiple license, a supplier, distributor, or Page No. 20 90711.0300 Fifty-sixth Legislative Assembly 1 importer shall furnish a surety bond, a cash bond, or an approved letter of credit as security to 2 guarantee the payment of the special fuel tax liabilities imposed by this chapter. A refiner, a 3 terminal operator, a distributor who is not an importer, or an exporter who is not also licensed 4 as a supplier, is exempt from this requirement. 5 1. As a condition precedent to the issuance of a license, a wholesaler or dealer shall 6 furnish a bond in an amount set by the commissioner, but not less than five 7 hundred dollars, guaranteeing the payment of the special fuels tax collected by the 8 wholesaler or dealer. The bond is subject to approval by the commissioner and 9 must be in effect for at least three years. After a wholesaler or dealer has had a 10 valid license for three or more years, the commissioner may review the 11 wholesaler's or dealer's records and waive the bond requirement. The bond 12 requirement may be reinstated at the discretion of the commissioner. The surety 13 bond, cash bond, or letter of credit must be in an amount prescribed by the 14 commissioner but not less than one thousand dollars. 15 2. In lieu of a bond, securities, including letters of credit, approved by the 16 commissioner in such amounts as the commissioner prescribes, may be deposited 17 with the commissioner, which securities must be kept in the custody of the 18 commissioner and may be sold at public or private sale, without notice to the 19 depositor, if it becomes necessary in order to recover any tax, penalties, or interest 20 due. The commissioner shall pay all moneys deposited as security with the 21 commissioner under the provisions of this subsection to the state treasurer who 22 shall credit them into a special fund to be known as the "special fuels tax security 23 trust fund". If any tax, penalty, or interest imposed by this chapter is not paid when 24 due, by the person depositing moneys with the tax commissioner as security for 25 the payment of tax, penalty, or interest imposed by this chapter, the commissioner 26 shall certify that information to the director of the office of management and 27 budget. The office of management and budget shall transmit the money to the 28 commissioner who shall apply as much of the money deposited by the person as is 29 necessary to satisfy the tax, penalty, and interest due. When in the 30 commissioner's judgment it is no longer necessary to require the deposit to be 31 maintained by the person, the commissioner shall certify that information to the Page No. 21 90711.0300 Fifty-sixth Legislative Assembly 1 director of the office of management and budget who shall pay the unused money 2 to the person. The surety bond, cash bond, or letter of credit is subject to approval 3 by the commissioner. 4 3. After a single or multiple license has been in effect for five or more years, the 5 commissioner may review the person's records and may waive the requirement for 6 a security. The requirement for a security may be reinstated at the discretion of 7 the commissioner. 8 4. A surety bond or letter of credit provided as security must be kept in the custody of 9 the commissioner and may be used by the commissioner, without notice to the 10 principal, if it becomes necessary to cover tax, penalties, and interest due. 11 5. Money deposited with the commissioner as a cash bond must be made in the form 12 of a cashier's check or bank money order payable to the tax commissioner. The 13 money received must be paid by the commissioner to the state treasurer and 14 credited by the treasurer into a special fund to be known as the motor fuel tax 15 security trust fund. The money deposited may be used by the commissioner, 16 without notice to the depositor, if it becomes necessary to cover tax, penalties, and 17 interest due. If the money deposited is to be used to cover unpaid liabilities, the 18 commissioner shall certify the information to the director of the office of 19 management and budget. The office of management and budget shall transmit the 20 money to the commissioner who shall apply as much of the money deposited by 21 the person as is necessary to satisfy the liabilities. When in the commissioner's 22 judgment it is no longer necessary to require the deposit to be maintained, the 23 commissioner shall certify the information to the director of the office of 24 management and budget who shall pay the unused money to the depositor. 25 26 27 28 29 SECTION 16. AMENDMENT. Section 57-43.2-11 of the North Dakota Century Code is amended and reenacted as follows: 57-43.2-11. Records and returns - Penalties and interest - Powers of commissioner Report by refiner, supplier, importer, or exporter required. 1. A special fuel dealer shall keep such records and make such monthly returns and 30 payments of the tax to the commissioner, in the manner, at the time, and pursuant 31 to similar procedures as are provided in sections 57-43.2-10 and 57-43.2-12. The Page No. 22 90711.0300 Fifty-sixth Legislative Assembly 1 commissioner may require returns and payments of the tax to be made for other 2 than monthly periods. A refiner, supplier, importer, or exporter shall file a monthly 3 report with the commissioner no later than the twenty-fifth day of each calendar 4 month covering special fuel acquired, sold, and used during the preceding 5 calendar month. When the twenty-fifth day of the calendar month falls on a 6 Saturday, Sunday, or legal holiday, the due date is the first working day after the 7 Saturday, Sunday, or legal holiday. When the report is filed by mail, the report is 8 timely if the envelope containing the report is postmarked by the United States 9 postal service or other postal carrier service before midnight of the due date. 10 2. For failure or refusal to keep such records, file returns, and make payments of the 11 tax to the commissioner as provided in this chapter, a special fuel dealer is subject 12 to the penalties and interest as provided in this chapter. The report to the 13 commissioner must be on a form prescribed and furnished by the commissioner. 14 The commissioner may require that all or part of the report be submitted in an 15 electronic format approved by the commissioner, provided the person is able to 16 use an electronic format. The report must contain such information as required by 17 the commissioner including: 18 a. exported. 19 20 b. c. d. e. The number of gallons of special fuel sold tax-exempt to a qualified consumer. 27 28 The total number of gallons of special fuel sold and used subject to tax imposed by this chapter. 25 26 A detailed schedule of special fuel sold tax-paid to a person for resale, including a list of persons who purchased the special fuel for resale. 23 24 A detailed schedule of special fuel sold to a person eligible to purchase the special fuel without the tax imposed by this chapter. 21 22 A detailed schedule of special fuel refined, purchased, imported, and f. The number of gallons of special fuel in inventory at the beginning of the 29 calendar month and the number of gallons in inventory at the close of the 30 calendar month and any gains or losses experienced. Page No. 23 90711.0300 Fifty-sixth Legislative Assembly 1 3. The commissioner, for good cause shown, may waive the penalty for failure to pay 2 the tax due or for failure or refusal to file a return within the time required by this 3 chapter or grant a reasonable extension of time for filing such a return. The 4 commissioner may revoke the license of any special fuel dealer under the 5 conditions and after notice as provided in section 57-43.2-09; assess deficiencies 6 in the tax; determine the tax when returns are not filed as required by this chapter; 7 and permit credit for or authorize refund of erroneously or illegally collected taxes, 8 penalties, or interest imposed by this chapter from undistributed funds received 9 under this chapter, all in the manner and to the same extent as provided in 10 sections 57-43.2-15, 57-43.2-16, 57-43.2-17, and 57-43.2-20. The report must be 11 signed by the taxpayer to be valid and must contain a written declaration that it is 12 made and subscribed under penalties of perjury. The commissioner may prescribe 13 alternative methods for signing, subscribing, or verifying a report filed by electronic 14 means, including telecommunications, that shall have the same validity and 15 consequence as the actual signature and written declaration for a paper return. 16 4. The commissioner shall enforce the provisions of this chapter and may prescribe, 17 adopt, and enforce reasonable rules relating to the administration and enforcement 18 of this chapter, and may examine the records of special fuel wholesalers or dealers 19 and special fuel users and make such investigations as are deemed necessary in 20 the administration and enforcement of this chapter. 21 5. The commissioner shall audit the returns and make necessary assessments 22 pursuant to the procedures and limitations provided for in section 57-43.2-14. 23 SECTION 17. AMENDMENT. Section 57-43.2-21 of the North Dakota Century Code is 24 amended and reenacted as follows: 25 57-43.2-21. Inventory gains - Losses - Deductions allowed to dealer - Remedies. 26 1. Each dealer of special fuel other than liquefied petroleum gas is allowed to deduct 27 the actual shrinkage of the total gallonage of special fuel received during each 28 calendar month from the statement submitted as required in section 57-43.2-12, 29 but such allowance may not exceed one percent of the total received during the 30 month. Each wholesale dealer of liquefied petroleum gas may deduct the actual 31 shrinkage of the total gallonage received during each calendar month from the Page No. 24 90711.0300 Fifty-sixth Legislative Assembly 1 statement submitted as required in section 57-43.2-12, but this allowance may not 2 exceed two percent of the total received during the month. A supplier, distributor, 3 or retailer shall take a physical inventory reading of all special fuel located in a 4 terminal, underground tank, aboveground tank, railcar, storage tank of a tank truck, 5 and the storage tank of a bulk delivery truck on a regular basis. The physical 6 inventory reading must include special fuel stored in a barrel, drum, or other 7 receptacle. 8 2. Except as otherwise provided in this chapter, a supplier is liable for the tax 9 imposed under section 57-43.2-02 on all special fuel not dyed for federal tax 10 exemption purposes and not accounted for. The supplier is liable for the tax 11 imposed under section 57-43.2-03 on special fuel dyed for federal tax exemption 12 purposes and not accounted for. 13 3. For the purposes of this chapter, it is presumed that all special fuel received by 14 each dealer over and above the one percent allowance, or the two percent 15 allowance for liquefied petroleum gas, not otherwise accounted for, but not that 16 gallonage shown as inventory at the end of every calendar month, and other 17 allowances provided in this chapter, has been sold, delivered, or used. The dealer 18 is liable for the amount of the special fuel tax on each gallon [3.79 liters] of special 19 fuel not accounted for. For purposes of this chapter, special fuel refined at a 20 refinery in this state and placed in storage at the refinery, and special fuel brought 21 into the state by pipeline and placed in storage at a pipeline terminal, is not 22 deemed received until it is withdrawn from the refinery or terminal storage for sale 23 or use in this state, or for shipment or delivery to destinations in this state. When 24 sold or used by a supplier, distributor, or retailer, a gain in special fuel inventories 25 is subject to the tax imposed by this chapter in the same manner as special fuel 26 purchased, imported, or otherwise acquired. 27 4. The commissioner may allow a tax credit to a supplier and a tax refund to a 28 distributor or retailer for actual inventory losses due to casualty loss subject to the 29 discretion of the commissioner and based on proof of the loss as required by the 30 commissioner. Page No. 25 90711.0300 Fifty-sixth Legislative Assembly 1 2 SECTION 18. Section 57-43.2-38 of the North Dakota Century Code is created and enacted as follows: 3 57-43.2-38. Dyed special fuel - Penalties - Inspections. 4 1. Special fuel dyed for federal motor fuel tax exemption purposes is subject to the 5 tax imposed by section 57-43.2-03 and, unless otherwise provided in this section, 6 may not be used in the fuel supply tank of a licensed motor vehicle. The owner or 7 operator of a licensed motor vehicle found to contain dyed special fuel in the fuel 8 supply tank of that vehicle is subject to the tax imposed by section 57-43.2-02 to 9 be determined based on the capacity of the fuel supply tank of the licensed vehicle 10 involved and is subject to civil penalties as follows: 11 a. A one hundred dollar fine for the first violation. 12 b. A five hundred dollar fine for a second violation occurring within three years of a previous violation. 13 c. 14 two previous violations. 15 d. 16 A five thousand dollar fine for the fourth and subsequent violations occurring within three years of three or more previous violations. 17 18 A one thousand dollar fine for a third violation occurring within three years of 2. Special fuel found in the fuel supply tank of a licensed motor vehicle shall be 19 considered dyed if the fuel contains traces of the dye in an amount sufficient to be 20 found in violation of federal laws and rules. 21 3. For purposes of enforcing the provisions of this section, the highway patrol, by 22 agreement with the commissioner, may: 23 a. Stop, detain, and inspect a licensed motor vehicle and withdraw a sample of 24 fuel from the fuel supply tank of the vehicle in a manner and in a quantity 25 sufficient to determine whether the fuel is a special fuel and to determine the 26 dye content of the fuel. 27 b. Physically inspect, examine, or otherwise search any tank, reservoir, or other 28 container that can or may be used for the production, storage, or 29 transportation of any type of fuel for coloration, markers, and shipping papers. Page No. 26 90711.0300 Fifty-sixth Legislative Assembly 1 Any attempt by a person to prevent, stop, or delay an inspection of fuel or shipping 2 papers by the highway patrol is subject to a civil penalty of not more than one 3 thousand dollars per occurrence. 4 4. the person receiving a citation has the right to a hearing. 5 6 The highway patrol may issue a citation covering any violation of this section, and 5. This section does not apply to: a. 7 A person who purchased dyed special fuel in another state or Canadian 8 province and imported that fuel into the state in the supply tank of a licensed 9 motor vehicle provided the state or Canadian province where the fuel was 10 purchased does not prohibit its use in that vehicle. b. 11 A state or local government using dyed special fuel in licensed vehicles for 12 purposes of construction, reconstruction, repair, or maintenance of public 13 roads or highways. 14 15 SECTION 19. AMENDMENT. Section 57-43.3-02 of the North Dakota Century Code is amend