SF 2494

as introduced - 93rd Legislature (2023 - 2024) Posted on 03/03/2023 10:48am

A bill for an act
relating to transportation; motor fuels; abolishing motor fuel taxes; making
conforming changes; transferring money; appropriating money; amending
Minnesota Statutes 2022, sections 84.794, subdivision 1; 84.803, subdivision 1;
84.83, subdivision 2; 84.927, subdivision 1; 86B.706, subdivisions 2, 3; 89.70;
89.72; 115C.08, subdivision 3; 296A.03, subdivision 2; 296A.04, subdivisions 1,
3; 296A.05, subdivision 1; 296A.06, subdivision 2; 296A.061; 296A.12; 296A.15;
296A.21; 296A.22, subdivisions 1, 2, 3, 6, 7, 9; 296A.23, subdivisions 2, 8;
296A.24, subdivision 1; 297A.68, subdivision 19; repealing Minnesota Statutes
2022, sections 296A.01, subdivision 36; 296A.07; 296A.08; 296A.083; 296A.09;
296A.10; 296A.11; 296A.13; 296A.14; 296A.16; 296A.17; 296A.18; 296A.22,
subdivision 4; 296A.23, subdivisions 3, 4, 6; 296A.26; 609B.450.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

MOTOR FUEL TAXES ABOLISHED

Section 1.

Minnesota Statutes 2022, section 296A.03, subdivision 2, is amended to read:

Subd. 2.

Qualifications.

(a) A distributor's license shall be issued to any responsible
person who applies and qualifies as a distributor.

(b) Upon application to the commissioner, the commissioner must issue a distributor's
license to any person who:

(1) receives petroleum products in this state for bulk storage and subsequent distribution
by tank truck;

(2) produces, manufactures, or refines petroleum products in this state;

(3) imports petroleum products into this state via boat, barge, or pipeline for storage and
subsequent delivery at or further transportation from boat, barge, or pipeline terminals in
this state; or

(4) holds a license and performs a function under the deleted text begin motor fuel tax deleted text end law of an adjoining
state equivalent to that of a distributor under this chapter, who desires to ship or deliver
petroleum products from that state to persons in this state not licensed as distributors in this
state and who agrees to assume with respect to all petroleum products so shipped or delivered
the liabilities of a distributor receiving petroleum products in this state; provided, however,
that any such license shall be issued only for the purpose of permitting such person to receive
in this state the petroleum products so shipped or delivered. Except as herein provided, all
persons licensed as distributors under this clause shall have the same rights and privileges
and be subject to the same duties, requirements, and penalties as other licensed distributors.

(c) The commissioner shall not issue or renew a license to a person otherwise eligible
under this subdivision if the person:

deleted text begin (1) has unpaid tax due under this chapter;
deleted text end

deleted text begin (2) deleted text end new text begin (1) new text end has unfiled deleted text begin tax returns or deleted text end reports due under this chapter;

deleted text begin (3) deleted text end new text begin (2) new text end has had a license issued pursuant to this chapter revoked within the last five years;
or

deleted text begin (4) deleted text end new text begin (3) new text end has had an equivalent license issued by another state or Canadian province revoked
within the last five years for failure to pay a tax or file a tax return or report.

Sec. 2.

Minnesota Statutes 2022, section 296A.04, subdivision 1, is amended to read:

Subdivision 1.

Application and fee.

No person, except a licensed distributor, shall
engage in the business of selling or delivering special fuel deleted text begin , upon which no tax has been
imposed, deleted text end as a special fuel dealer without having applied for and secured from the
commissioner a special fuel dealer's license. The application shall be made in a form and
manner prescribed by the commissioner and shall be accompanied by the payment of a $25
license fee. A special fuel dealer's license shall be issued to any responsible person qualifying
as a special fuel dealer who makes proper application. The license shall be displayed in a
conspicuous manner in the place of business and shall expire annually on November 30.

Sec. 3.

Minnesota Statutes 2022, section 296A.04, subdivision 3, is amended to read:

Subd. 3.

Sales ticket.

A sales ticket shall be issued for each delivery of special fuel to
a special fuel dealer or bulk purchaser. A sales ticket shall also be issued for each delivery
into the supply tank of an aircraft or a licensed motor vehicle, if so requested by the
purchaser. The person who delivers the special fuel shall issue the sales ticket and shall
show on the ticket the name and address of the purchaser, date of sale, number of gallons,
price per gallon, deleted text begin amount of tax, deleted text end and total amount of sale.

Sec. 4.

Minnesota Statutes 2022, section 296A.05, subdivision 1, is amended to read:

Subdivision 1.

Application and fee.

No person shall receive special fuel deleted text begin , upon which
no tax has been imposed, deleted text end as a bulk purchaser without having applied for and secured from
the commissioner a bulk purchaser's license. The application shall be made in a form and
manner prescribed by the commissioner and shall be accompanied by the payment of a $25
license fee. A bulk purchaser's license shall be issued to any responsible person qualifying
as a bulk purchaser who makes proper application. The license shall be displayed in a
conspicuous manner in the place of business and shall expire annually on November 30.

Sec. 5.

Minnesota Statutes 2022, section 296A.06, subdivision 2, is amended to read:

Subd. 2.

Suspension of license.

(a) Notwithstanding subdivision 1, the license of a
distributor, special fuel dealer, or bulk purchaser that has not filed a deleted text begin tax return or deleted text end report or
paid a delinquent deleted text begin tax or deleted text end fee within five days after notice and demand by the commissioner
is suspended. The suspension remains in effect until the demanded deleted text begin tax return or deleted text end report has
been filed and the deleted text begin tax and deleted text end fees deleted text begin shown on that return or report deleted text end have been paid. If the
commissioner determines that the failure to file or failure to pay is due to reasonable cause,
then a license must not be suspended, or if suspended, must be reinstated.

(b) A licensee whose license is suspended under this subdivision may request a contested
case hearing under chapter 14. Any such hearing must be held within 20 days of the issuance
of the notice and demand issued under paragraph (a), unless the parties agree to a later
hearing date. The administrative law judge's report must be issued within 20 days after the
close of the hearing record, unless the parties agree to a later report issuance date. The
commissioner must issue a final decision within 30 days after receipt of the report of the
administrative law judge and subsequent exceptions and argument under section 14.61. The
suspension imposed under paragraph (a) remains in effect during any contested case hearing
process requested pursuant to this paragraph.

Sec. 6.

Minnesota Statutes 2022, section 296A.061, is amended to read:

296A.061 CANCELLATION deleted text begin OR NONRENEWAL deleted text end OF LICENSES.

The commissioner may cancel a license deleted text begin or not renew a license deleted text end if deleted text begin one of the following
conditions occurs:
deleted text end

deleted text begin (1) the license holder has not filed a petroleum tax return or report for at least one year;
deleted text end

deleted text begin (2) the license holder has not reported any petroleum tax liability on the license holder's
returns or reports for at least one year; or
deleted text end

deleted text begin (3) deleted text end the license holder requests cancellation of the license.

Sec. 7.

Minnesota Statutes 2022, section 296A.12, is amended to read:

296A.12 GASOLINE deleted text begin AND deleted text end new text begin OR new text end SPECIAL FUEL TAX deleted text begin IN LIEU OF OTHER TAXES deleted text end new text begin
PROHIBITED new text end .

Gasoline and special fuel excise taxes shall new text begin not new text end be deleted text begin in lieu of all other taxes deleted text end imposed upon
the business of selling or dealing in gasoline or special fuel deleted text begin , whether imposed deleted text end by the state
or by any of its political subdivisions deleted text begin , but are in addition to all ad valorem taxes now imposed
by law deleted text end . Nothing in this chapter is construed as prohibiting the governing body of any city
of this state from licensing and regulating such business where its authority is conferred by
state law or city charter.

Sec. 8.

Minnesota Statutes 2022, section 296A.15, is amended to read:

296A.15 deleted text begin PAYMENT OF TAX deleted text end new text begin REPORTS REQUIRED new text end .

Subdivision 1.

Monthly gasoline report; shrinkage allowance.

(a) deleted text begin Except as provided
in paragraph (e), deleted text end On or before the 23rd day of each month, every person deleted text begin who is required to
pay a gasoline tax shall deleted text end new text begin engaged in buying and selling petroleum products or combustible
gases regulated under this chapter must new text end file with the commissioner a report, in the form and
manner prescribed by the commissioner, showing the number of gallons of petroleum
products received by the reporter during the preceding calendar month, and other information
the commissioner may require. A written report is deemed to have been filed as required
in this subdivision if postmarked on or before the 23rd day of the month deleted text begin in which the tax
is payable deleted text end .

(b) The number of gallons of gasoline must be reported in United States standard liquid
gallons, 231 cubic inches, except that the commissioner may upon written application and
for cause shown permit the distributor to report the number of gallons of gasoline as corrected
to a temperature of 60-degrees Fahrenheit. If the application is granted, all gasoline covered
in the application and allowed by the commissioner must continue to be reported by the
distributor on the adjusted basis for a period of one year from the date of the granting of
the application. The number of gallons of petroleum products other than gasoline must be
reported as originally invoiced. Each report must show separately the number of gallons of
aviation gasoline received by the reporter during each calendar month and the number of
gallons of gasoline sold to a dealer of aviation gasoline during each calendar month.

deleted text begin (c) Each report must also include the amount of gasoline tax on gasoline received by
the reporter during the preceding month. In computing the tax a deduction of 2.5 percent
of the quantity of gasoline received by a distributor shall be made for evaporation and loss.
At the time of reporting, the reporter shall submit satisfactory evidence that one-third of the
2.5 percent deduction has been credited or paid to dealers on quantities sold to them.
deleted text end

deleted text begin (d) Each report shall contain a confession of judgment for the amount of the tax shown
due to the extent not timely paid.
deleted text end

deleted text begin (e) Under certain circumstances and with the approval of the commissioner, taxpayers
may be allowed to file reports annually.
deleted text end

Subd. 2.

Petroleum tank release cleanup fee.

Persons required to pay a petroleum tank
release cleanup fee under section 115C.08, subdivision 3, must file a report with the
commissioner of revenue. Each report must include the amount of fees due on petroleum
products. Reports must be filed in the form and manner prescribed by the commissioner. A
written report is considered filed as required if postmarked on or before the 23rd day of the
month in which the fee is payable.

Subd. 3.

Monthly special fuel report; shrinkage allowance.

On or before the 23rd day
of each month, distributors, special fuel dealers, and bulk purchasers shall file a report in
the form and manner prescribed by the commissioner. Reports shall contain information as
follows:

(a) Distributors of undyed diesel fuel and undyed kerosene must file a deleted text begin monthly tax return deleted text end new text begin
report new text end with the commissioner listing all purchases or receipts of undyed diesel fuel and
undyed kerosene. deleted text begin Distributors may be allowed to take a credit or credits under section
296A.16, subdivision 1.
deleted text end

(b) Distributors and dealers of special fuel other than undyed diesel fuel or undyed
kerosene shall report the total number of gallons delivered to them during the preceding
calendar month deleted text begin and shall pay the special fuel excise tax due to the commissioner deleted text end . The
invoice must show the true and correct name and address of the purchaser, and the purchaser's
signature. The report shall contain other information as the commissioner may require.

(c) Distributors and dealers of special fuel other than undyed diesel fuel or undyed
kerosene must deleted text begin pay the special fuel excise tax on all special fuel delivered or sold into the
supply tank of an aircraft or licensed motor vehicle and shall deleted text end file a report with the
commissioner. The report shall show the total number of gallons delivered or sold into the
supply tank of an aircraft or licensed motor vehicle during the preceding calendar month
deleted text begin and the special fuel excise tax due shall be paid to the commissioner. Any person delivering
special fuel on which the excise tax has not previously been paid into the supply tank of an
aircraft or a licensed motor vehicle shall report such delivery and shall pay or collect and
pay to the commissioner the excise tax on the special fuel so delivered deleted text end .

(d) Distributors and special fuel dealers may, subject to the approval of the commissioner,
elect to deleted text begin pay to the commissioner the special fuel excise tax deleted text end new text begin report new text end on all special fuel delivered
or sold into the supply tank of an aircraft or licensed motor vehicle. Under this option, an
invoice must be issued at the time of each delivery showing the name and address of the
purchaser, date of sale, number of gallons, price per gallon, and total amount of sale. A
separate sales ticket book shall be maintained for special fuel sales. deleted text begin The tax is also imposed
on all special fuel held in storage on the effective date of this election.
deleted text end

(e) Bulk purchasers shall report deleted text begin and pay the special fuel excise tax deleted text end on all special fuel,
including alternative fuels, except undyed diesel fuel or undyed kerosene purchased by them
for storage during the preceding calendar month. deleted text begin In such cases as the commissioner may
permit, credit for the excise tax due or previously paid on special fuel not used in aircraft
or licensed motor vehicles may be allowed in computing tax liability. deleted text end The report shall
contain other information as the commissioner may require.

deleted text begin (f) In computing the special fuel excise tax due, a deduction of one percent of the quantity
of special fuel on which tax is due shall be made for evaporation and loss.
deleted text end

deleted text begin (g) Each report shall contain a confession of judgment for the amount of the tax shown
due to the extent not timely paid.
deleted text end

Subd. 4.

Failure to use or sell for intended purpose; report required.

(a) Any person
who buys aviation gasoline, including from a dealer of aviation gasoline, or special fuel for
aircraft use deleted text begin , and who has paid the excise taxes due directly or indirectly through the amount
of the tax being included in the price, or otherwise, deleted text end and uses said gasoline or special fuel
in motor vehicles or knowingly sells it to any person for use in motor vehicles shall, on or
before the 23rd day of the month following that in which such gasoline or special fuel was
so used or sold, report the fact of the use or sale to the commissioner in the form and manner
prescribed by the commissioner.

(b) Any person who buys gasoline and deleted text begin who has paid the motor vehicle gasoline excise
tax directly or indirectly through the amount of the tax being included in the price of the
gasoline, or otherwise, who knowingly deleted text end sells such gasoline to any person to be used for the
purpose of producing or generating power for propelling aircraft, or who receives, stores,
or withdraws from storage gasoline to be used for that purpose, shall, on or before the 23rd
day of the month following that in which such gasoline was so sold, stored, or withdrawn
from storage, report the fact of the sale, storage, or withdrawal from storage to the
commissioner in the form and manner prescribed by the commissioner.

deleted text begin Subd. 5. deleted text end

deleted text begin On-farm bulk storage of gasoline or special fuel; ethanol for personal
use. deleted text end

deleted text begin Notwithstanding the provisions of this chapter, a farmer who uses gasoline or any
special fuel on which a tax has not been paid shall report and pay the tax on all gasoline or
special fuel delivered into the supply tank of a licensed motor vehicle during the preceding
calendar year. The tax must be reported and paid in the form and manner prescribed by the
commissioner together with any refund claim filed by the taxpayer under section 296A.16.
If no refund claim is filed, the tax must be reported and paid annually by March 15 or more
frequently, as the commissioner may prescribe. Any producer qualifying under this
subdivision is exempt from the licensing requirements in section 296A.03, subdivision 1.
deleted text end

Subd. 6.

Inspection fee.

Persons required to pay an inspection fee under section 239.101
must file a report with the commissioner of revenue. Each report must include the amount
of inspection fees due on petroleum products. Reports must be filed in the form and manner
prescribed by the commissioner. A written report is considered filed as required if postmarked
on or before the 23rd day of the month in which the fee is payable.

deleted text begin Subd. 7. deleted text end

deleted text begin Electronic payment required. deleted text end

deleted text begin All remittances must be made by electronic
means.
deleted text end

Subd. 8.

Electronically filed deleted text begin return or deleted text end report; signature.

The commissioner may
require that deleted text begin returns or deleted text end reports be filed electronically. For purposes of this chapter, the name
of the deleted text begin taxpayer deleted text end new text begin reporter new text end , the name of the deleted text begin taxpayer's deleted text end new text begin reporter's new text end authorized agent, or the
deleted text begin taxpayer's deleted text end new text begin reporter's new text end identification number constitutes a signature when transmitted as part
of the information on deleted text begin returns or deleted text end reports filed by electronic means by the deleted text begin taxpayer deleted text end new text begin reporter new text end
or at the deleted text begin taxpayer's deleted text end new text begin reporter's new text end direction. "Electronic means" includes, but is not limited to,
the use of a touch-tone telephone to transmit deleted text begin return or deleted text end report information in a manner
prescribed by the commissioner.

Sec. 9.

Minnesota Statutes 2022, section 296A.21, is amended to read:

296A.21 STATUTE OF LIMITATIONS.

Subdivision 1.

General rules.

(a) The commissioner shall make determinations,
corrections, assessments, and refunds with respect to taxes new text begin imposed before the effective
date of this section new text end and fees under this chapter, including interest, additions to taxes, and
assessable penalties. Except as otherwise provided in this section, the amount of taxes
assessable must be assessed within 3-1/2 years after the date the return is filed. For purposes
of this section, a tax return filed before the last day prescribed by law for filing is considered
to be filed on the last day.

(b) A claim for a refund of an overpayment of state tax new text begin imposed before the effective
date of this section new text end or fees must be filed within 3-1/2 years from the date prescribed for
filing the return, plus any extension of time granted for filing the return, but only if filed
within the extended time; or the claim must be filed within one year from the date of an
order assessing tax or fees, or from the date of a return filed by the commissioner, upon
payment in full of the tax, fees, penalties, and interest shown on the order or return, whichever
period expires later.

Subd. 2.

Collection.

No action shall be brought for the collection of delinquent taxes
new text begin imposed before the effective date of this section new text end and fees under section 270C.61 unless
commenced within five years after the date of assessment of the taxes and fees.

Subd. 3.

False or fraudulent report.

In the case of a false or fraudulent report with
intent to evade taxes or fees or of a failure to file a report, the taxes new text begin imposed before the
effective date of this section new text end or fees may be assessed at any time, and a proceeding in court
for their collection must be begun within five years after the assessment.

Subd. 4.

Time limit for certain refunds.

Notwithstanding subdivision 1, paragraph (b),
no refund under new text begin Minnesota Statutes 2022, new text end section 296A.16, subdivision 2, shall be made
unless the claim for refund and invoice are filed with the commissioner within one year
from the date of purchase.

Subd. 5.

Suspension of time; bankruptcy.

The period of time during which a tax
new text begin imposed before the effective date of this section new text end or fee must be assessed under this chapter
or collection proceedings commenced under subdivision 2 or 3 is suspended during the
period from the date of filing of a petition in bankruptcy until 30 days after the commissioner
of revenue receives notice that the bankruptcy proceedings have been closed or dismissed
or the automatic stay has been terminated or has expired. The suspension of the statute of
limitations under this subdivision applies to the person against whom the petition in
bankruptcy is filed and all other persons who may also be wholly or partially liable for the
tax under this chapter new text begin imposed before the effective date of this section new text end .

Sec. 10.

Minnesota Statutes 2022, section 296A.22, subdivision 1, is amended to read:

Subdivision 1.

Penalty for failure to pay tax, general rule.

Upon the failure of any
person to pay any tax new text begin imposed before the effective date of this section new text end or fee when due, a
penalty of one percent per day for the first ten days of delinquency shall accrue, and thereafter
the tax, fees, and penalty shall bear interest at the rate specified in section 270C.40 until
paid.

Sec. 11.

Minnesota Statutes 2022, section 296A.22, subdivision 2, is amended to read:

Subd. 2.

Collection authority.

Upon such a failure to pay any tax new text begin imposed before the
effective date of this section new text end or fees within the time provided by this chapter, all taxes and
fees deleted text begin imposed by this chapter deleted text end shall become immediately due and payable, and may be
collected as provided in chapter 270C.

Sec. 12.

Minnesota Statutes 2022, section 296A.22, subdivision 3, is amended to read:

Subd. 3.

Operating without license.

If any person operates as a distributor, special fuel
dealer, bulk purchaser, or motor carrier without first securing the license required under
this chapter, any tax new text begin imposed before the effective date of this section new text end or fee imposed by this
chapter shall become immediately due and payable. A penalty of 25 percent is imposed
upon the tax and fee due. The tax and fees shall bear interest at the rate specified in section
270C.40. The penalty imposed in this subdivision shall bear interest from the date provided
in section 270C.40, subdivision 3, to the date of payment of the penalty.

Sec. 13.

Minnesota Statutes 2022, section 296A.22, subdivision 6, is amended to read:

Subd. 6.

Sale prohibited under certain conditions.

No petroleum product shall be
unloaded or sold by any person or distributor whose tax new text begin imposed before the effective date
of this section new text end and fees are the basis for collection action under subdivision 2.

Sec. 14.

Minnesota Statutes 2022, section 296A.22, subdivision 7, is amended to read:

Subd. 7.

Payment of penalties.

The penalties imposed by this section are collected and
paid in the same manner as deleted text begin taxes deleted text end new text begin fees new text end .

Sec. 15.

Minnesota Statutes 2022, section 296A.22, subdivision 9, is amended to read:

Subd. 9.

Abatement of penalty.

(a) The commissioner may by written order abate any
penalty imposed under this section, if in the commissioner's opinion there is reasonable
cause to do so.

(b) A request for abatement of penalty must be filed with the commissioner within 60
days of the notice date of the penalty. For purposes of this section, "notice date" means the
notice date designated by the commissioner on the order or other notice that a penalty has
been imposed.

(c) If the commissioner issues an order denying a request for abatement of penalty, the
deleted text begin taxpayer deleted text end new text begin requester new text end may file an administrative appeal as provided in section 270C.35 or
appeal to Tax Court as provided in section 271.06. If the commissioner does not issue an
order on the abatement request within 60 days from the date the request is received, the
deleted text begin taxpayer deleted text end new text begin requester new text end may appeal to Tax Court as provided in section 271.06.

Sec. 16.

Minnesota Statutes 2022, section 296A.23, subdivision 2, is amended to read:

Subd. 2.

Willful evasion.

A person who willfully attempts in any manner to evade or
defeat any tax imposed by this chapter new text begin before the effective date of this section new text end , including deleted text begin , deleted text end
but not limited to deleted text begin , deleted text end making and subscribing any false statement in any report, record, claim,
or sales ticket required by this chapter; or making a false claim for a refund under new text begin Minnesota
Statutes 2022, new text end section 296A.16, subdivision 2, is guilty of a felony.

Sec. 17.

Minnesota Statutes 2022, section 296A.23, subdivision 8, is amended to read:

Subd. 8.

Certain blending of gasoline deleted text begin prohibited deleted text end new text begin permitted new text end .

deleted text begin The blending of gasoline
on which the tax has been paid or the liability accrued, with any substance on which the tax
has not been paid or the liability thereafter accrued, is prohibited.
deleted text end

deleted text begin This section does not preclude deleted text end The addition of any of the various inhibitors deleted text begin which deleted text end new text begin that new text end
in total do not exceed one-half of one percent by volume of the product treated deleted text begin , nor deleted text end new text begin is
permitted. new text end The addition to fuel for two-cycle gasoline engines of a lubricant not exceeding
five percent by volume deleted text begin or deleted text end new text begin of new text end the product treated deleted text begin ; nor does this subdivision preclude the
addition of deleted text end new text begin is permitted. new text end Fuel oil new text begin added new text end to gasoline for the purpose of generating power for
the propulsion of farm tractors new text begin is permitted new text end .

Sec. 18.

Minnesota Statutes 2022, section 296A.24, subdivision 1, is amended to read:

Subdivision 1.

Seizure.

The commissioner or authorized agents may seize gasoline or
special fuel being transported for delivery in violation of section 296A.03, subdivision 1,
and any vehicle or other method of conveyance used for transporting the gasoline or special
fuel. deleted text begin Any untaxed motor vehicle fuel that is received by a person other than a licensee is
subject to seizure along with the vehicle or other means of transportation used to transport
the motor vehicle fuel. deleted text end Any motor vehicle fuel, along with the transporting vehicle, brought
into the state of Minnesota by a transporter for use, distribution, storage, or sale that is not
supported by a manifest, bill of lading, or invoice, reflecting the licensed distributor
responsible for the deleted text begin tax and/or deleted text end fees is subject to seizure by the Minnesota Department of
Revenue. Property seized under this subdivision is subject to forfeiture as provided in
subdivision 2.

Sec. 19. new text begin TRANSFERS.
new text end

new text begin The commissioner of management and budget must transfer $911,485,000 in fiscal year
2024 and $905,105,000 in fiscal year 2025 from the general fund to the highway user tax
distribution fund. The base for this transfer is $898,769,000 in fiscal year 2026 and
$892,478,000 in fiscal year 2027.
new text end

Sec. 20. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2022, sections 296A.01, subdivision 36; 296A.07; 296A.08;
296A.083; 296A.09; 296A.10; 296A.11; 296A.13; 296A.14; 296A.16; 296A.17; 296A.18;
296A.22, subdivision 4; 296A.23, subdivisions 3, 4, and 6; 296A.26; and 609B.450, new text end new text begin are
repealed.
new text end

ARTICLE 2

CONFORMING AMENDMENTS

Section 1.

Minnesota Statutes 2022, section 84.794, subdivision 1, is amended to read:

Subdivision 1.

Registration revenue.

Fees from the registration of off-highway
motorcycles deleted text begin and the unrefunded gasoline tax attributable to off-highway motorcycle use
under section 296A.18 deleted text end must be deposited in the state treasury and credited to the off-highway
motorcycle account in the natural resources fund.

Sec. 2.

Minnesota Statutes 2022, section 84.803, subdivision 1, is amended to read:

Subdivision 1.

Registration revenue.

Fees from the registration of off-road vehicles
deleted text begin and unrefunded gasoline tax attributable to off-road vehicle use under section 296A.18 deleted text end must
be deposited in the state treasury and credited to the off-road vehicle account in the natural
resources fund.

Sec. 3.

Minnesota Statutes 2022, section 84.83, subdivision 2, is amended to read:

Subd. 2.

Money deposited in account.

Fees from the registration of snowmobiles and
from the issuance of snowmobile state trail stickers deleted text begin and the unrefunded gasoline tax
attributable to snowmobile use pursuant to section 296A.18 shall deleted text end new text begin must new text end be deposited in the
state treasury and credited to the snowmobile trails and enforcement account.

Sec. 4.

Minnesota Statutes 2022, section 84.927, subdivision 1, is amended to read:

Subdivision 1.

Registration revenue.

Fees from the registration of all-terrain vehicles
and deleted text begin the unrefunded gasoline tax attributable to all-terrain vehicle use under section 296A.18,
as well as deleted text end the net proceeds from the sale of all-terrain vehicles forfeited pursuant to section
169A.63, deleted text begin shall deleted text end new text begin must new text end be deposited in the state treasury and credited to the all-terrain vehicle
account in the natural resources fund.

Sec. 5.

Minnesota Statutes 2022, section 86B.706, subdivision 2, is amended to read:

Subd. 2.

Money deposited in account.

The following shall be deposited in the state
treasury and credited to the water recreation account:

(1) fees from titling and licensing of watercraft under this chapter;

(2) fines, installment payments, and forfeited bail according to section 86B.705,
subdivision 2;

(3) mooring fees and receipts from the sale of marine gas at state-operated or state-assisted
small craft harbors and mooring facilities according to section 86A.21; new text begin and
new text end

deleted text begin (4) the unrefunded gasoline tax attributable to watercraft use under section 296A.18;
and
deleted text end

deleted text begin (5) deleted text end new text begin (4) new text end fees for permits issued to control or harvest aquatic plants other than wild rice
under section 103G.615, subdivision 2.

Sec. 6.

Minnesota Statutes 2022, section 86B.706, subdivision 3, is amended to read:

Subd. 3.

Purposes.

The money in the account may be expended only as appropriated
by law for the following purposes:

(1) deleted text begin as directed under section 296A.18, subdivision 2, deleted text end for acquisition, development,
maintenance, and rehabilitation of public water access and boating facilities on public waters;
lake and river improvements; and boat and water safety;

(2) from the fees collected at state-operated or state-assisted small craft harbors and
mooring facilities from daily and seasonal moorings and the sale of marine gas, for
maintenance, operation, replacement, and expansion of these facilities and for the debt
service on state bonds sold to finance these facilities;

(3) for administration and enforcement of this chapter as it pertains to titling and licensing
of watercraft and use and safe operation of watercraft; grants for county-sponsored and
administered boat and water safety programs; and state boat and water safety efforts;

(4) for management of aquatic invasive species and the implementation of chapter 84D
as it pertains to aquatic invasive species, including control, public awareness, law
enforcement, assessment and monitoring, management planning, and research; and

(5) for management of aquatic plants and the implementation of section 103G.615 as it
pertains to aquatic plants, including plant removal permitting, control, public awareness,
law enforcement, assessment and monitoring, management planning, and research.

Sec. 7.

Minnesota Statutes 2022, section 89.70, is amended to read:

89.70 STATE FOREST ROAD ACCOUNT.

There is created in the state treasury a state forest road account in the special revenue
fund deleted text begin , consisting of money credited under section 296A.18, subdivision 7 deleted text end . Money in the
state forest road account is appropriated to the commissioner and remains available until
expended for:

(1) acquisition, development, maintenance, and administration of state forest roads under
the jurisdiction of the commissioner of natural resources; and

(2) the commissioner's share of the cost of cooperative maintenance agreements made
with other providers of forest roads.

Sec. 8.

Minnesota Statutes 2022, section 89.72, is amended to read:

89.72 COUNTY FOREST ACCESS ROAD ACCOUNT.

There is created in the state treasury a county forest access road account in the special
revenue fund deleted text begin , consisting of money credited under section 296A.18, subdivision 7 deleted text end . Money
in the county forest access road account is appropriated to the commissioner for distribution
to counties managing forest lands administered through a county land department under the
jurisdiction of a land commissioner appointed under section 282.13. The payments must be
made by July 15 and January 15 of each year through the commissioner and in proportion
to each county's ownership of commercial forest lands, for purposes of constructing,
reconstructing, acquiring, and maintaining county management access roads, including the
acquisition of rights-of-way or easements as may be needed.

Sec. 9.

Minnesota Statutes 2022, section 115C.08, subdivision 3, is amended to read:

Subd. 3.

Petroleum tank release cleanup fee.

A petroleum tank release cleanup fee is
imposed on the use of tanks that contain petroleum products defined in section 296A.01.
On products other than gasoline, the fee must be paid in the manner provided in section
296A.15 by the first licensed distributor receiving the product in Minnesota, as defined in
section 296A.01. When the product is gasoline, the distributor responsible for payment of
the gasoline tax new text begin imposed before the effective date of this section new text end is also responsible for
payment of the petroleum tank cleanup fee. The fee must be imposed as required under
subdivision 2, at a rate of $20 per 1,000 gallons of petroleum products, rounded to the
nearest 1,000 gallons. A distributor who fails to pay the fee imposed under this section is
subject to the penalties provided in section 296A.22.

Sec. 10.

Minnesota Statutes 2022, section 297A.68, subdivision 19, is amended to read:

Subd. 19.

Petroleum products.

deleted text begin The following deleted text end Petroleum products new text begin regulated under
chapter 296A new text end are exempt deleted text begin : deleted text end new text begin .
new text end

deleted text begin (1) products upon which a tax has been imposed and paid under chapter 296A, and for
which no refund has been or will be allowed because the buyer used the fuel for nonhighway
use;
deleted text end

deleted text begin (2) products that are used in the improvement of agricultural land by constructing,
maintaining, and repairing drainage ditches, tile drainage systems, grass waterways, water
impoundment, and other erosion control structures;
deleted text end

deleted text begin (3) products purchased by a transit system receiving financial assistance under section
174.24, 256B.0625, subdivision 17, or 473.384;
deleted text end

deleted text begin (4) products purchased by an ambulance service licensed under chapter 144E;
deleted text end

deleted text begin (5) products used in a passenger snowmobile, as defined in section 296A.01, subdivision
39, for off-highway business use as part of the operations of a resort as provided under
section 296A.16, subdivision 2, clause (2);
deleted text end

deleted text begin (6) products purchased by a state or a political subdivision of a state for use in motor
vehicles exempt from registration under section 168.012, subdivision 1, paragraph (b);
deleted text end

deleted text begin (7) products purchased by providers of transportation to recipients of medical assistance
home and community-based services waivers enrolled in day programs, including adult day
care, family adult day care, day treatment and habilitation, prevocational services, and
structured day services;
deleted text end

deleted text begin (8) products used in a motor vehicle used exclusively as a mobile medical unit for the
provision of medical or dental services by a federally qualified health center, as defined
under title 19 of the federal Social Security Act, as amended by section 4161 of the Omnibus
Budget Reconciliation Act of 1990; or
deleted text end

deleted text begin (9) special fuel used for one of the following purposes:
deleted text end

deleted text begin (i) to power a refrigeration unit mounted on a licensed motor vehicle, provided that the
unit has an engine separate from the one used to propel the vehicle and the fuel is used
exclusively for the unit;
deleted text end

deleted text begin (ii) to power an unlicensed motor vehicle that is used solely or primarily to move
semitrailers within a cargo yard, warehouse facility, or intermodal facility; or
deleted text end

deleted text begin (iii) to operate a power take-off unit or auxiliary engine in or on a licensed motor vehicle,
whether or not the unit or engine is fueled from the same or a different fuel tank as that
from which the motor vehicle is fueled.
deleted text end

APPENDIX

Repealed Minnesota Statutes: 23-04038

296A.01 DEFINITIONS.

Subd. 36.

Motor vehicle gasoline excise tax.

"Motor vehicle gasoline excise tax" means the tax imposed on gasoline used in producing and generating power for propelling motor vehicles used on the public highways of this state.

296A.07 GASOLINE TAX.

Subdivision 1.

Tax imposed.

There is imposed an excise tax on gasoline, gasoline blended with ethanol, and agricultural alcohol gasoline used in producing and generating power for propelling motor vehicles used on the public highways of this state. The tax is imposed on the first licensed distributor who received the product in Minnesota. For purposes of this section, gasoline is defined in section 296A.01, subdivisions 8b, 10, 18, 20, 23, 24, 25, 32, and 34. The tax is payable at the time and in the form and manner prescribed by the commissioner. The tax is payable at the rates specified in subdivision 3, subject to the exceptions and reductions specified in section 296A.17.

Subd. 2.

Tax imposed for marine use.

Subject to the provisions of section 296A.16, subdivision 2, there is imposed an excise tax, at the same rate per gallon as the gasoline excise tax, on all marine gasoline received, sold, stored, or withdrawn from storage in this state. This tax is payable at the times, in the manner, and by persons specified in this chapter.

Subd. 3.

Rate of tax.

The gasoline excise tax is imposed at the following rates:

(1) E85 is taxed at the rate of 17.75 cents per gallon;

(2) M85 is taxed at the rate of 14.25 cents per gallon; and

(3) all other gasoline is taxed at the rate of 25 cents per gallon.

Subd. 4.

Exemptions.

The provisions of subdivision 1 do not apply to gasoline or denatured ethanol purchased by:

(1) a transit system or transit provider receiving financial assistance or reimbursement under section 174.24, 256B.0625, subdivision 17, or 473.384;

(2) providers of transportation to recipients of medical assistance home and community-based services waivers enrolled in day programs, including adult day care, family adult day care, day treatment and habilitation, prevocational services, and structured day services;

(3) an ambulance service licensed under chapter 144E;

(4) providers of medical or dental services by a federally qualified health center, as defined under title 19 of the Social Security Act, as amended by Section 4161 of the Omnibus Budget Reconciliation Act of 1990, with a motor vehicle used exclusively as a mobile medical unit;

(5) a licensed distributor to be delivered to a terminal for use in blending; or

(6) a dealer of aviation gasoline, but only to the extent that the gasoline is intended to be dispensed directly into the fuel tank of an aircraft.

296A.08 SPECIAL FUEL TAX.

Subdivision 1.

Tax imposed.

(a) There is imposed an excise tax on all special fuel at the rates specified in subdivision 2. For purposes of this section, "owner or operator" means the operation of licensed motor vehicles, whether loaded or empty, whether for compensation or not for compensation, and whether owned by or leased to the motor carrier who operates them or causes them to be operated.

(b) For undyed diesel fuel and undyed kerosene, the tax is imposed on the first licensed distributor who received the product in Minnesota.

(c) For dyed fuel being used illegally in a licensed motor vehicle, the tax is imposed on the owner or operator of the motor vehicle.

(d) For dyed fuel used in a motor vehicle but subject to a federal exemption, although no federal tax may be imposed, the owner or operator of the vehicle is liable for the state tax.

(e) For other fuels, including jet fuel, propane, and compressed natural gas, the tax is imposed on the distributor, special fuel dealer, or bulk purchaser.

(f) Any person delivering special fuel on which the excise tax has not previously been paid, into the supply tank of an aircraft or a licensed motor vehicle shall report such delivery and shall pay, or collect and pay the excise tax on the special fuel so delivered to the commissioner.

Subd. 2.

Rate of tax.

The special fuel excise tax is imposed at the following rates:

(a) Liquefied petroleum gas or propane is taxed at the rate of 18.75 cents per gallon.

(b) Liquefied natural gas is taxed at the rate of 15 cents per gallon.

(c) Compressed natural gas is taxed at the rate of $1.974 per thousand cubic feet; or 25 cents per gasoline equivalent. For purposes of this paragraph, "gasoline equivalent," as defined by the National Conference on Weights and Measures, is 5.66 pounds of natural gas or 126.67 cubic feet.

(d) All other special fuel is taxed at the same rate as the gasoline excise tax as specified in section 296A.07, subdivision 2. The tax is payable in the form and manner prescribed by the commissioner.

Subd. 3.

Exemptions.

The provisions of subdivisions 1 and 2 do not apply to special fuel or alternative fuels purchased by:

(1) a transit system or transit provider receiving financial assistance or reimbursement under section 174.24, 256B.0625, subdivision 17, or 473.384;

(2) providers of transportation to recipients of medical assistance home and community-based services waivers enrolled in day programs, including adult day care, family adult day care, day treatment and habilitation, prevocational services, and structured day services;

(3) an ambulance service licensed under chapter 144E;

(4) providers of medical or dental services by a federally qualified health center, as defined under title 19 of the Social Security Act, as amended by Section 4161 of the Omnibus Budget Reconciliation Act of 1990, with a motor vehicle used exclusively as a mobile medical unit; or

(5) a licensed distributor to be delivered to a terminal for use in blending.

Subd. 4.

Tax imposed on use.

If it is determined by the commissioner from an examination of any records pertaining to the operation of any licensed motor vehicle which uses special fuel, that the special fuel tax on the special fuel used in this state has not been paid to this state, or to any other state if purchased in such other state, there is hereby imposed an excise tax at the same rate per gallon as the gasoline tax, on all such special fuel. All assessments of tax made under this subdivision shall be paid by the user to the commissioner upon demand. For purposes of this subdivision, "special fuel" means any fuel other than gasoline used in a licensed motor vehicle in this state.

Subd. 5.

Intended use.

All special fuel except that used for aviation fuel shall be deemed to be intended for use in a licensed motor vehicle in this state at the time of sale or delivery.

Subd. 6.

Liability for failure to keep adequate records.

If adequate records are not kept, or if the sales are not adequately accounted for, then all sales of combustible gases and liquid petroleum products, except gasoline, are deemed to be sales of special fuel. In such cases, there is imposed an excise tax of the same rate per gallon as the gasoline excise tax on all such products, and the vendor is liable for the tax.

296A.083 DEBT SERVICE SURCHARGE.

Subdivision 1.

Definitions.

For purposes of this section, the following terms have the meanings given them:

(1) "debt service" means the amount of principal and interest in each fiscal year attributable to the trunk highway bonds authorized in Laws 2008, chapter 152, article 2; and

(2) "surcharge" means the rate imposed under this section on gasoline taxed under section 296A.07, subdivision 3, clause (3), and includes a proportional rate for each type of fuel taxed under sections 296A.07, subdivision 3, clauses (1) and (2), and 296A.08, subdivision 2.

Subd. 2.

Debt service forecast.

On April 1 each year, the commissioner of management and budget shall report to the commissioner of revenue on trunk highway debt service. The report must include the annual amount of revenue from the surcharge previously deposited in the trunk highway fund, and a forecast of the total and annual amounts necessary to pay the remaining debt service.

Subd. 3.

Surcharge rate.

(a) By July 16, 2008, and each April 1 thereafter, the commissioner of revenue shall calculate and publish a surcharge as provided in paragraphs (b) and (c). The surcharge is imposed from August 1, 2008, through June 30, 2009, and each new surcharge thereafter is imposed the following July 1 through June 30.

(b) For fiscal years 2009 through 2012, the commissioner shall set the surcharge as specified in the following surcharge rate schedule.

Surcharge Rate Schedule
	Fiscal Year	Rate (in cents per gallon)
	2009	0.5
	2010	2.1
	2011	2.5
	2012	3.0

(c) For fiscal year 2013 and thereafter, the commissioner shall set the surcharge at the lesser of (1) 3.5 cents, or (2) an amount calculated so that the total proceeds from the surcharge deposited in the trunk highway fund from fiscal year 2009 to the upcoming fiscal year equals the total amount of debt service from fiscal years 2009 to 2039, and the surcharge is rounded to the nearest 0.1 cent.

Subd. 4.

Apportionment.

The surcharge under this section is subject to the apportionment provisions of section 296A.18.

296A.09 AVIATION TAX.

Subdivision 1.

Gasoline tax imposed.

Subject to any refunds or credits there is imposed an excise tax, at the rate of five cents per gallon on all aviation gasoline received, sold, stored, or withdrawn from storage in this state. Aviation gasoline is defined in section 296A.01, subdivision 7.

Subd. 2.

Jet fuel and special fuel tax imposed.

There is imposed an excise tax of 15 cents per gallon on all jet fuel or special fuel received, sold, stored, or withdrawn from storage in this state, for use as substitutes for aviation gasoline and not otherwise taxed as gasoline. Jet fuel is defined in section 296A.01, subdivision 8.

Subd. 3.

Exception to tax for aviation use.

The provisions of subdivisions 1 and 2 do not apply to aviation gasoline or special fuel purchased and placed in the fuel tanks of an aircraft outside the state, even though the gasoline may be consumed within this state.

Subd. 4.

Manner of payment.

These taxes are payable in the form and manner prescribed by the commissioner.

Subd. 5.

Tax not on consumption.

The taxes imposed by subdivisions 1 and 2 are expressly declared not to be a tax upon consumption of aviation gasoline or special fuel by an aircraft.

Subd. 6.

Exemptions.

The provisions of subdivisions 1 and 2 do not apply to aviation gasoline or jet fuel purchased by an ambulance service licensed under chapter 144E.

296A.10 LIABILITY FOR UNPAID TAX.

Subdivision 1.

Unreported fuel.

It is the duty of every distributor, dealer, and person who sells or uses gasoline manufactured, produced, received, or stored by the distributor, dealer, or person, and of every person using gasoline in motor vehicles or special fuel in licensed motor vehicles to know whether the tax has been paid on the fuel. If the tax has not been reported or if the tax has not been paid, it is that person's duty to report to the commissioner the quantity of the gasoline or special fuel sold or used and to pay the tax as provided in this chapter. All provisions of this chapter relating to the calculation, collections, and payment of the tax shall be applicable to any such person, dealer, or distributor.

Subd. 2.

Unreported aviation gasoline.

The provisions of subdivision 1 do not apply to aviation gasoline. It is the duty of every distributor, dealer, and person who receives, sells, stores, or withdraws from storage in this state aviation gasoline manufactured, produced, received, or stored by the distributor, dealer, or person to know whether the tax has been paid on the aviation gasoline. If the fuel has not been reported, or if the tax has not been paid to the commissioner, it is that person's duty to report to the commissioner the quantity of such gasoline so received, sold, stored, or withdrawn from storage. That person is also liable for the payment of the tax. All provisions of this chapter relating to the calculation, collections, and payment of the tax apply to any such person, dealer, or distributor.

296A.11 SELLER MAY COLLECT TAX.

A person who directly or indirectly pays a gasoline or special fuel tax as provided in this chapter and who does not in fact use the gasoline or special fuel in motor vehicles in this state or receive, store, or withdraw it from storage to be used personally for the purpose of producing or generating power for propelling aircraft, but sells or otherwise disposes of the same, except as provided in section 296A.16, subdivision 3, is hereby authorized to collect, from the person to whom the gasoline or special fuel is so sold or disposed of, the tax so paid, and is hereby required, upon request, to make, sign, and deliver to such person an invoice of such sale or disposition. The sums collected must be held as a special fund in trust for the state of Minnesota.

296A.13 PERSONAL LIABILITY FOR TAX.

Liability for payment of taxes under this chapter includes a responsible person or entity described in the personal liability provisions of section 270C.56.

296A.14 TAX AS PERSONAL DEBT OF FIDUCIARY.

The tax imposed by this chapter, and interest and penalties, is a personal debt of the taxpayer from the time the liability arises, regardless of when the time for discharging the liability by payment occurs. The debt is, in the case of any fiduciary, that of the individual in the individual's official or fiduciary capacity only, unless the individual has voluntarily distributed the assets held in that capacity without reserving sufficient assets to pay the tax, interest, and penalties, in which event the individual is personally liable for the deficiency.

296A.16 REFUND OR CREDIT.

Subdivision 1.

Credit or refund of gasoline or special fuel tax paid.

The commissioner shall allow the distributor credit or refund of the tax paid on gasoline and special fuel:

(1) exported or sold for export from the state, other than in the supply tank of a motor vehicle or of an aircraft;

(2) sold to the United States government to be used exclusively in performing its governmental functions and activities or to any "cost plus a fixed fee" contractor employed by the United States government on any national defense project;

(3) if the fuel is placed in a tank used exclusively for residential heating;

(4) destroyed by accident while in the possession of the distributor;

(5) in error;

(6) in the case of gasoline only, sold for storage in an on-farm bulk storage tank, if the tax was not collected on the sale; and

(7) in such other cases as the commissioner may permit, consistent with the provisions of this chapter and other laws relating to the gasoline and special fuel excise taxes.

Subd. 2.

Fuel used in other vehicle; claim for refund.

Any person who buys and uses gasoline for a qualifying purpose other than use in motor vehicles, snowmobiles except as provided in clause (2), or motorboats, or special fuel for a qualifying purpose other than use in licensed motor vehicles, and who paid the tax directly or indirectly through the amount of the tax being included in the price of the gasoline or special fuel, or otherwise, shall be reimbursed and repaid the amount of the tax paid upon filing with the commissioner a claim for refund in the form and manner prescribed by the commissioner, and containing the information the commissioner shall require. By signing any such claim which is false or fraudulent, the applicant shall be subject to the penalties provided in this chapter for knowingly making a false claim. The claim shall set forth the total amount of the gasoline so purchased and used by the applicant other than in motor vehicles, or special fuel purchased and used by the applicant other than in licensed motor vehicles, and shall state when and for what purpose it was used. When a claim contains an error in computation or preparation, the commissioner is authorized to adjust the claim in accordance with the evidence shown on the claim or other information available to the commissioner. The commissioner, on being satisfied that the claimant is entitled to the payments, shall approve the claim and transmit it to the commissioner of management and budget. The words "gasoline" or "special fuel" as used in this subdivision do not include aviation gasoline or special fuel for aircraft. Gasoline or special fuel bought and used for a "qualifying purpose" means:

(1) Gasoline or special fuel used in carrying on a trade or business, used on a farm situated in Minnesota, and used for a farming purpose. "Farm" and "farming purpose" have the meanings given them in section 6420(c)(2), (3), and (4) of the Internal Revenue Code as defined in section 289A.02, subdivision 7.

(2) Gasoline or special fuel used for off-highway business use.

(i) "Off-highway business use" means any use off the public highway by a person in that person's trade, business, or activity for the production of income.

(ii) Off-highway business use includes use of a passenger snowmobile off the public highways as part of the operations of a resort as defined in section 157.15, subdivision 11; and use of gasoline or special fuel to operate a power takeoff unit on a vehicle, but not including fuel consumed during idling time.

(iii) Off-highway business use does not include use as a fuel in a motor vehicle which, at the time of use, is registered or is required to be registered for highway use under the laws of any state or foreign country; or use of a licensed motor vehicle fuel tank in lieu of a separate storage tank for storing fuel to be used for a qualifying purpose, as defined in this section. Fuel purchased to be used for a qualifying purpose cannot be placed in the fuel tank of a licensed motor vehicle and must be stored in a separate supply tank.

(3) Gasoline or special fuel placed in the fuel tanks of new motor vehicles, manufactured in Minnesota, and shipped by interstate carrier to destinations in other states or foreign countries.

Subd. 3.

Destruction by accident; refund to dealer.

Notwithstanding the provisions of subdivision 1, the commissioner shall allow a dealer a refund of:

(1) the tax paid by the distributor on gasoline, undyed diesel fuel, or undyed kerosene destroyed by accident while in the possession of the dealer; or

(2) the tax paid by a distributor or special fuels dealer on other special fuels destroyed by accident while in the possession of the dealer.

Subd. 4.

Refrigerator units; refunds.

Notwithstanding the provisions of subdivision 1, the commissioner shall allow a special fuel dealer a refund of the tax paid on fuel sold directly into a supply tank of a refrigeration unit with a separate engine and used exclusively by that refrigeration unit. A claim for refund may be filed as provided in this section.

Subd. 4a.

Undyed kerosene; refunds.

Notwithstanding subdivision 1, the commissioner shall allow a refund of the tax paid on undyed kerosene used exclusively for a purpose other than as fuel for a motor vehicle using the streets and highways. To obtain a refund, the person making the sale to an end user must meet the Internal Revenue Service requirements for sales from a blocked pump. A claim for a refund may be filed as provided in this section.

Subd. 4b.

Racing gasoline; refunds.

Notwithstanding subdivision 1, the commissioner shall allow a licensed distributor a refund of the tax paid on leaded gasoline of 110 octane or more that does not meet ASTM specification D4814 for gasoline and that is sold in bulk for use in nonregistered motor vehicles. A claim for a refund may be filed as provided for in this section.

Subd. 5.

Qualifying service station credit.

Notwithstanding any other provision of law to the contrary, the tax imposed on gasoline, undyed diesel fuel, or undyed kerosene delivered to a qualified service station may not exceed, or must be reduced to, a rate not more than three cents per gallon above the state tax rate imposed on such products sold by a service station in a contiguous state located within the distance indicated in this subdivision. A distributor shall be allowed a credit or refund for the amount of reduction computed in accordance with this subdivision. For purposes of this subdivision, a "qualifying service station" means a service station located within 7.5 miles, measured by the shortest route by public road, from a service station selling like product in the contiguous state.

Subd. 7.

Civil penalty for filing false claim.

A person who violates section 296A.23, subdivision 1, shall forfeit the full amount of the claim. In addition, a person who is convicted under section 296A.23 for filing a false statement or claim shall, in addition to any criminal penalties imposed, be prohibited from filing with the commissioner any claim for refund upon gasoline purchased within six months after such conviction.

Subd. 8.

Appropriation.

There is appropriated to the persons entitled to refund or credit under this section, from the fund or account in the state treasury to which the money was credited, an amount sufficient to make the credit or refund.

296A.17 AVIATION REFUND.

Subdivision 1.

Aviation refund requirements.

Any person claiming to be entitled to any refund or credit provided for in subdivision 3 shall receive the refund or credit upon filing with the commissioner a claim in such form and manner prescribed by the commissioner. The claim shall set forth, among other things, the total number of gallons of aviation gasoline or special fuel for aircraft use upon which the claimant has directly or indirectly paid the excise tax provided for in this chapter, during the calendar year, which has been received, stored, or withdrawn from storage by the claimant in this state and not sold or otherwise disposed of to others. All claims for refunds under this subdivision shall be made on or before April 30 following the end of the calendar year for which the refund is claimed.

Subd. 2.

Claim for refund; aviation tax.

(a) Any person who buys aviation gasoline or special fuel for aircraft use and who has paid the excise taxes directly or indirectly through the amount of the tax being included in the price, or otherwise, who does not use it in motor vehicles or receive, sell, store, or withdraw it from storage for the purpose of producing or generating power for propelling aircraft, shall be reimbursed and repaid the amount of the tax paid upon filing with the commissioner a claim in the form and manner prescribed by the commissioner. The claim shall state the total amount of the aviation gasoline or special fuel for aircraft use purchased and used by the applicant, and shall state when and for what purpose it was used. On being satisfied that the claimant is entitled to payment, the commissioner shall approve the claim and transmit it to the commissioner of management and budget. The postmark on the envelope in which a written claim is mailed determines the date of filing.

(b) If a claim contains an error in preparation in computation or preparation, the commissioner is authorized to adjust the claim in accordance with the evidence shown on the claim or other information available to the commissioner.

(c) An applicant who files a claim that is false or fraudulent, is subject to the penalties provided in section 296A.23 for knowingly and willfully making a false claim.

Subd. 3.

Refund on graduated basis.

Any person who has directly or indirectly paid the excise tax on aviation gasoline or special fuel for aircraft use provided for by this chapter and has either paid the airflight property tax under section 270.072 or is an aerial applicator with a category B, general aerial license, under section 18B.33, shall, as to all such aviation gasoline and special fuel received, stored, or withdrawn from storage by the person in this state in any calendar year and not sold or otherwise disposed of to others, or intended for sale or other disposition to others, on which such tax has been so paid, be entitled to the following graduated reductions in such tax for that calendar year, to be obtained by means of the following refunds:

(1) on each gallon of aviation gasoline or special fuel up to 50,000 gallons, all but five cents per gallon;

(2) on each gallon of aviation gasoline or special fuel above 50,000 gallons and not more than 150,000 gallons, all but two cents per gallon;

(3) on each gallon of aviation gasoline or special fuel above 150,000 gallons and not more than 200,000 gallons, all but one cent per gallon;

(4) on each gallon of aviation gasoline or special fuel above 200,000, all but one-half cent per gallon.

Subd. 4.

Aviation gasoline tax refund claim; civil penalty.

If any distributor or other person, with intent to unlawfully secure any refund provided for in subdivision 3, shall knowingly file a false or fraudulent claim, there is imposed upon the person a penalty in an amount equal to 50 percent of the amount of the refund unlawfully secured, in addition to that amount. The penalty imposed by this subdivision shall be collected as part of the tax.

Subd. 5.

Appropriation.

There is appropriated to the persons entitled to refund under this section, from the fund or account in the state treasury to which the money was credited, an amount sufficient to make the credit or refund. All money in excess of the amount the commissioner certifies is reasonably required for the refunds must be transferred by the commissioner of management and budget to the state airports fund.

296A.18 APPORTIONMENT OF TAX; DEPOSIT OF PROCEEDS.

Subdivision 1.

Intent; gasoline use.

All gasoline received in this state and all gasoline produced in or brought into this state except aviation gasoline and marine gasoline shall be determined to be intended for use in motor vehicles in this state.

Subd. 2.

Motorboat.

Approximately 1-1/2 percent of all gasoline received in this state and 1-1/2 percent of all gasoline produced or brought into this state, except gasoline used for aviation purposes, is being used as fuel for the operation of motorboats on the waters of this state and of the total revenue derived from the imposition of the gasoline fuel tax for uses other than for aviation purposes, 1-1/2 percent of the revenue is the amount of tax on fuel used in motorboats operated on the waters of this state. The amount of unrefunded tax paid on gasoline used for motor boat purposes as computed in this chapter shall be paid into the state treasury and credited to a water recreation account in the special revenue fund for acquisition, development, maintenance, and rehabilitation of sites for public access and boating facilities on public waters; lake and river improvement; and boat and water safety.

Subd. 3.

Snowmobile.

Approximately one percent of all gasoline received in and produced or brought into this state, except gasoline used for aviation purposes, is being used as fuel for the operation of snowmobiles in this state, and of the total revenue derived from the imposition of the gasoline fuel tax for uses other than for aviation purposes, one percent of such revenues is the amount of tax on fuel used in snowmobiles operated in this state.

Subd. 4.

All-terrain vehicle.

Approximately 0.27 of one percent of all gasoline received in or produced or brought into this state, except gasoline used for aviation purposes, is being used for the operation of all-terrain vehicles in this state, and of the total revenue derived from the imposition of the gasoline fuel tax, 0.27 of one percent is the amount of tax on fuel used in all-terrain vehicles operated in this state.

Subd. 5.

Off-highway motorcycles.

Approximately 0.046 of one percent of all gasoline received or produced in or brought into this state, except gasoline used for aviation purposes, is being used for the operation of off-highway motorcycles in this state, and of the total revenue derived from the imposition of the gasoline fuel tax for uses other than for aviation purposes, 0.046 of one percent is the amount of tax on fuel used in off-highway motorcycles operated in this state.

Subd. 6.

Off-road vehicle.

Approximately 0.164 of one percent of all gasoline received or produced in or brought into this state, except gasoline used for aviation purposes, is being used for the off-road operation of off-road vehicles, as defined in section 84.797, in this state, and of the total revenue derived from the imposition of the gasoline fuel tax for uses other than aviation purposes, 0.164 of one percent is the amount of tax on fuel used for off-road operation of off-road vehicles in this state.

Subd. 6a.

Computation of nonhighway use amounts.

The nonhighway use amounts determined in subdivisions 2 to 6 must be transferred from the highway user tax distribution fund to the accounts as provided for in sections 84.794, 84.803, 84.83, 84.927, and 86B.706. These amounts, together with interest and penalties for delinquency in payment, paid or collected pursuant to the provisions of this chapter, must be computed for each six-month period ending June 30 and December 31 and must be transferred on November 1 and April 1 following each six-month period.

Subd. 7.

Forest road.

Approximately 0.116 percent of the total annual unrefunded revenue from the gasoline fuel tax on all gasoline and special fuel received in, produced, or brought into this state, except gasoline and special fuel used for aviation purposes, is derived from the operation of motor vehicles on state forest roads and county forest access roads. This revenue, together with interest and penalties for delinquency in payment, paid or collected pursuant to the provisions of this chapter, is appropriated from the highway user tax distribution fund and must be transferred and credited in equal installments on July 1 and January 1 to the state forest road account established in section 89.70. Of this amount, 0.0605 percent is annually derived from motor vehicles operated on state forest roads and 0.0555 percent is annually derived from motor vehicles operated on county forest access roads in this state. An amount equal to 0.0555 percent of the unrefunded revenue must be annually transferred to counties for the management and maintenance of county forest roads.

Subd. 8.

Airports.

The revenues derived from the excise taxes on aviation gasoline and on special fuel received, sold, stored, or withdrawn from storage as substitutes for aviation gasoline, shall be paid into the state treasury and credited to the state airports fund. There is hereby appropriated such sums as are needed to carry out the provisions of this subdivision.

296A.22 NONPAYMENT OF TAX; CIVIL PENALTIES.

Subd. 4.

Unlawful use of dyed fuel.

(a) If any dyed fuel is sold or held for sale by a person for any use which the person knows or has reason to know is not a nontaxable use of the fuel; or if any dyed fuel is held for use or used in a licensed motor vehicle or for any other use by a person for a use other than a nontaxable use and the person knew, or had reason to know, that the fuel was so dyed; or if a person willfully alters, or attempts to alter, the strength or composition of any dye or marking in any dyed fuel, then the person shall pay a penalty in addition to the tax, if any.

(b) Except as provided in paragraph (c), the amount of penalty under paragraph (a) for each act is the greater of $1,000, or $10 for each gallon of dyed fuel involved.

(c) With regard to a multiple violation under paragraph (a), the penalty shall be applied by increasing the amount in paragraph (b) by the product of (1) such amount, and (2) the number of prior penalties, if any, imposed by this section on the person, or a related person, or any predecessor of the person or related person.

(d) If a penalty is imposed under this subdivision on a business entity, each officer, employee, or agent of the entity who willfully participated in any act giving rise to the penalty is jointly and severally liable with the entity for the penalty.

296A.23 CRIMINAL PENALTIES.

Subd. 3.

Operation of vehicle without payment of tax.

A person who operates, or causes to be operated, a licensed motor vehicle on the public highways of this state on special fuel on which the excise tax provided by this chapter has not been paid, or the liability assumed by another person licensed under this chapter, is guilty of a misdemeanor.

Subd. 4.

Use of untaxed fuel in motor vehicle.

A person who uses gasoline, which has been delivered into an on-farm bulk storage tank, and on which no tax has been paid as provided in section 296A.15, subdivision 5, and who uses this gasoline for propelling a motor vehicle on the public highways of this state is guilty of a misdemeanor.

Subd. 6.

Fiduciary relationship established.

A person other than the commissioner who is authorized to collect excise taxes on behalf of the state of Minnesota, establishes a fiduciary relationship, and whoever violates that relationship is guilty of a violation of this chapter, and of section 609.54, and may be punished accordingly.

296A.26 JUDICIAL REVIEW; APPEAL TO TAX COURT.

In lieu of an administrative appeal under section 270C.35, any person aggrieved by an order of the commissioner fixing a tax, penalty, or interest under this chapter may, within 60 days from the notice date of the order, appeal to the Tax Court in the manner provided under section 271.06. For purposes of this section, "notice date" means the notice date designated by the commissioner on the order fixing a tax, penalty, or interest.

609B.450 GASOLINE AND SPECIAL FUEL TAX REFUND SANCTIONS.

Under sections 296A.16 and 296A.23, a person who makes a false claim for a fuel tax refund is guilty of a felony and, if convicted, shall be prohibited from filing for a refund upon gasoline purchased within six months after the conviction.