HB-5508, As Passed Senate, March 22, 2006

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 5508

     A bill to amend 1984 PA 44, entitled

"Motor fuels quality act,"

by amending the title and sections 2, 3, 5, 9b, 9d, 9g, 9h, 9i, 9j,

10b, 10c, and 10d (MCL 290.642, 290.643, 290.645, 290.649b,

290.649d, 290.649g, 290.649h, 290.649i, 290.649j, 290.650b,

290.650c, and 290.650d), the title and section 2 as amended and

sections 9b, 9d, 9g, 9h, 9j, and 10c as added by 1993 PA 236,

sections 3, 5, and 10b as amended by 2002 PA 13, section 9i as

amended by 2004 PA 278, and section 10d as added by 1993 PA 231,

and by adding sections 9k and 9l; and to repeal acts and parts of

acts.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

TITLE

     An act to provide purity and quality standards for motor

fuels; to regulate the transfer, sale, dispensing, or offering

motor fuels for sale; to provide for an inspection and testing

program; to provide for the powers and duties of certain state

agencies; to prescribe certain powers of the governor; to provide

for the licensing of certain persons engaged in the transfer, sale,

dispensing, or offering of motor fuels for sale; to regulate stage

I  and stage II vapor-recovery systems at certain facilities; to

provide for fees; to make appropriations; and to provide remedies

and prescribe fines and penalties.

     Sec. 2. As used in this act:

     (a) "Additive" means any substance in gasoline other than

gasoline but does not include approved blending components, other

than lead, sodium, and phosphate components, introduced at

refineries or terminals as octane or product quality enhancers in

quantities of less than 1% of volume.

     (b) "American society for testing and materials" means an

international nonprofit scientific and educational society devoted

to the promotion of knowledge of the materials of engineering and

the standardization of specification and methods of testing.

     (c) "Antiknock index" or "AKI" means an index number arrived

at by adding the motor octane number and the research octane

number, then dividing by 2.

     (d) "Blender" means a person who as an individual or through

his or her agent adds an oxygenate to a gasoline.

     (e) "Bulk purchaser-end user" means a person who is an

ultimate consumer of gasoline and receives delivery of gasoline

into a storage tank of at least 550-gallon capacity substantially

under his or her control.

     (f) "CARB" means the California air resources board.

     (g) "Delivery vessel" means a tank truck, tank equipped

trailer, or a similar vessel used for the delivery of gasoline to a

dispensing facility.

     (h) "Department" means the department of agriculture.

     (i) "Director" means the director of the department of

agriculture or his or her authorized representative.

     (j) "Dispensing facility" means a site used for  vehicle  

gasoline refueling.  that is located in an area of this state that

has been designated as ozone nonattainment and classified as

moderate, serious, severe, or extreme by the E.P.A. pursuant to 40

C.F.R. section 81.323, November 6, 1991. Dispensing facility does

not include a facility used exclusively for the refueling of

aircraft, watercraft, or vehicles that are designed for

agricultural purposes and used exclusively in agricultural

operations.

     (k) "Dispensing unit" means a device designed for the delivery

of gasoline in which 1 nozzle equates to 1 dispensing unit.

     (l) "Distributor" means a person who purchases, transports, or

stores or causes the transportation or storage of gasoline at any

point between a gasoline refinery and a retail outlet or bulk

purchaser-end user facility.

     (m) "E.P.A." means the United States environmental protection

agency.

     (n) "Gasoline" means any fuel sold in this state that is

suitable for use in spark-ignition internal combustion engines, and

commonly or commercially known or sold as gasoline.

     (o) "Leak" means liquid or vapor loss from the gasoline

dispensing system or stage I  or stage II vapor-recovery system as

determined by visual inspection or functional testing.

     (p) "Modification" means any change, removal, or addition,

other than an identical replacement, of any component contained

within a stage I  or stage II vapor-recovery system. The resultant

modification must constitute an approved vapor-recovery system.

     (q) "Motor octane number" or "MON" means a knock

characteristic of gasoline determined by use of standard procedures

on a motor engine.

     (r) "Operator" means a person who owns, leases, operates,

manages, supervises, or controls, directly or indirectly, a

gasoline-dispensing facility.

     (s) "Oxygenate" means an oxygen-containing, ashless, organic

compound, such as alcohol or ether, that may be used as fuel or

fuel supplement.

     (t) "Person" means an individual, sole proprietorship,

partnership, corporation, association, or other legal entity.

     (u) "Refiner" means a person who owns, leases, operates,

controls, or supervises a refinery.

     (v) "Refinery" means a plant at which gasoline is produced.

     (w) "Research octane number" or "RON" means a knock

characteristic of gasoline determined by use of standard procedures

on a research engine.

     (x) "Retail dealer" means a person who owns, leases, operates,

controls, or supervises a retail outlet.

     (y) "Retail outlet" means an establishment at which gasoline

is sold or offered for sale to the public.

     (z) "Rule" means a rule promulgated pursuant to the

administrative procedures act of 1969,  Act No. 306 of the Public

Acts of 1969, being sections 24.201 to 24.328 of the Michigan

Compiled Laws  1969 PA 306, MCL 24.201 to 24.328.

     (aa) "Stage I vapor-recovery system" means a vapor tight

collection system that is approved by the department and is

designed to capture the gasoline vapors displaced during delivery

into a stationary storage tank and to return not less than 90% of

the displaced vapors to the delivery vessel.

     (bb) "Stage II vapor-recovery system" means a gasoline-

dispensing system approved by the department that prevents 95% or

more of the volatile organic compounds from being emitted during

gasoline refueling.

     Sec. 3. (1) The director shall establish standards pursuant to

this act to ensure the purity and quality of gasoline sold or

offered for sale in this state.

     (2) The director shall establish standards for the amount and

type of additives allowed to be included in gasoline.

     (3) The director shall establish standards for the grading of

gasoline, including, but not limited to, subregular with a minimum

85 AKI, regular with a minimum 87 AKI and a minimum 82 MON,

midgrade 88 with a minimum 88 AKI and a minimum 82 MON, midgrade 89

with a minimum 89 AKI and a minimum 83 MON, premium with a minimum

90 AKI, premium 91 with a minimum 91 AKI, premium 92 with a minimum

92 AKI, premium 93 with a minimum 93 AKI, and premium 94 with a

minimum 94 AKI.

     (4) The director shall establish standards for  Reid  vapor

pressure as specified by the American society for testing and

materials, except as otherwise required to conform to federal or

state law.  The  Notwithstanding anything to the contrary in

section 10d, the director shall establish the  Reid  vapor pressure

as 9.0 pounds per square inch (psi) for retail outlets during the

period beginning June 1 through September 15 of each year, except

for dispensing facilities in counties where the director  shall

establish  establishes the  Reid  vapor pressure as 7.0 psi or 7.8

psi in the year  1996  2007 and thereafter. As used in this

subsection and section 10d  act,  "Reid  "vapor pressure" means the

vapor pressure of gasoline or gasoline oxygenate blend as

determined by ASTM test method  D323, standard test method for

vapor pressure of petroleum products (Reid method) or test method

D4953, standard test method for vapor pressure of gasoline and

gasoline oxygenate blends (dry method) D6378 or D5191 or an ASTM

method approved by the department.

     (5) In establishing additive and grading standards the

director shall adopt the latest standards for gasoline established

by the American society for testing and materials and shall adopt

the latest standards for gasoline established by federal law or

regulation. The standards established by the director shall not

prohibit a gasoline blend that is permitted by a valid waiver

granted by the United States environmental protection agency

pursuant to the fuel or fuel additive waiver in section 211(f)(4)

of part A of title II of the clean air act, chapter 360, 81 Stat.

502, 42  U.S.C.  USC 7545, and the ethanol waiver of 1.0 psi in

section 211(h)(4) of part A of title II of the clean air act,

chapter 360, 81 Stat. 502, 42  U.S.C.  USC 7545, if the gasoline

blend meets all of the conditions set forth in the waiver.

Beginning June 1, 2003, the director shall not permit the use of

the additive methyl tertiary butyl ether (MTBE) in this state.  The

director, in consultation with the department of environmental

quality, shall determine if the additive is likely to cause harmful

effects on the environment or public health within the state. By

June 1, 2002, the director, in consultation with the director of

the department of environmental quality, shall review the status of

the use of MTBE in this state. The review shall include the

following:

     (a) The amount of the additive methyl tertiary butyl ether

(MTBE) currently in use in gasoline in this state.

     (b) An estimate of the amount of MTBE that is imported in

gasoline transported into this state from other states or

countries.

     (c) Recommendations as to whether the June 1, 2003 prohibition

can be achieved and, if not, determine a more feasible date.

     (d) Any other information considered appropriate.

     (6) Standards established pursuant to this section shall be by

rules promulgated pursuant to the administrative procedures act of

1969, 1969 PA 306, MCL 24.201 to 24.328.

     Sec. 5. (1) Except as provided by federal law or regulation,

in the manufacture of gasoline at any refinery in this state, a

refiner shall not manufacture gasoline at a refinery in this state

unless the gasoline meets the requirements in  section  sections 3

and 10d. Except as provided by federal law or regulation, a blender

shall not blend gasoline unless the finished blend meets the

requirements in  section  sections 3 and 10d.

     (2) Except as provided by federal law or regulation, a

distributor shall not sell or transfer to any distributor, retail

dealer, or bulk purchaser-end user any gasoline unless that

gasoline meets the requirements in  section  sections 3 and 10d.

     (3) A carrier or an employee or agent of a carrier, whether

operating under contract or tariff, shall not cause gasoline

tendered to the carrier for shipment or transfer to another

carrier, distributor, or retail dealer to fail to comply, at the

time of delivery, with the requirements in  section  sections 3 and

10d.

     (4) A person shall not knowingly sell, dispense, or offer for

sale gasoline unless that gasoline meets the requirements in

section  sections 3 and 10d.

     (5) A refiner or distributor shall not transfer, sell,

dispense, or offer gasoline for sale in this state to a distributor

unless the refiner or distributor indicates on each bill, invoice,

or other instrument evidencing a delivery of gasoline, the name of

the wholesale distributor who received delivery of the gasoline.

     (6) A distributor or refiner shall not transfer, sell,

dispense, or offer gasoline for sale in this state to a retail

dealer unless the distributor indicates on each bill, invoice, or

other instrument evidencing a delivery of gasoline, the name and

license number issued pursuant to this act, of the retail dealer

who received delivery of the gasoline.

     (7) A bill, invoice, or other instrument evidencing a delivery

of gasoline issued by a refiner or distributor for deliveries of

gasoline to purchasers who are not required to hold a license

issued pursuant to the motor fuel tax act, 2000 PA 403, MCL

207.1001 to 207.1170, or this act shall clearly indicate the name

and address and other information necessary to identify the

purchaser of the gasoline.

     (8) A bill, invoice, or other instrument evidencing a delivery

of gasoline required by subsection (5), (6), or (7) shall include a

guarantee that the gasoline delivered meets the requirements in

section  sections 3 and 10d and shall indicate the concentration

range of alcohol in the gasoline, except for alcohols or ethers

that have a molecular weight greater than ethanol and are not mixed

with methanol or ethanol, or both, and shall indicate the possible

presence, without regard to concentration range, of any alcohols or

ethers that have a molecular weight greater than ethanol and are

not mixed with methanol or ethanol, or both.

     (9) A refiner, distributor, bulk purchaser-end user, or retail

dealer shall not transfer, sell, dispense, or offer gasoline for

sale unless that gasoline is visibly free of undissolved water,

sediments, and other suspended matter and is clear and bright at an

ambient temperature or 70 degrees Fahrenheit, whichever is greater.

     (10) A person who violates this section or rules promulgated

under this section is liable for a civil fine not to exceed

$10,000.00 for each day of the continuance of the violation. A

civil fine ordered pursuant to this section shall be submitted to

the state treasurer for deposit in the gasoline inspection and

testing fund created by section 8.

     Sec. 9b. (1) Except as otherwise provided for in this section,

the following dispensing facilities are exempt from the

requirements of sections 9a to 9f, 9i, and 9j:

     (a) A  a dispensing facility that never dispenses 10,000

gallons (37,850 liters) or more of gasoline per month on average in

any 12-month period, beginning with the 12 months preceding the

effective date of this section  or the period from November 15,

1990 to November 15, 1992  is exempt from the requirements of

sections 9a to 9d, 9i, and 9j. If the dispensing facility is

inactive for any period during the 12-month averaging period, the

average shall be calculated based upon the months of actual

operation. The exemption described in this  subdivision  subsection

does not apply to a dispensing facility that dispenses 10,000 or

more gallons of gasoline per month on average in any 12-month

period and such a facility is subject to sections 9a to 9f, 9i, and

9j and continues to be subject to these sections even if the

facility's gasoline throughput later falls below the exemption

threshold.

     (b) A dispensing facility owned by an independent small

business marketer of gasoline that has sales of less than 50,000

gallons per month on an average in any 12-month period, beginning

with the effective date of this section, and has 7 or less

dispensing units is exempt only from the requirements of this act

pertaining to the stage II vapor recovery system. For the purposes

of this subdivision, an independent small business marketer of

gasoline is a person engaged in the marketing of gasoline who,

without the exemption provided for in this subdivision, would be

required to pay for procurement and installation of vapor recovery

equipment under this act but does not include a person who is any

of the following:

     (i) A refiner.

     (ii) A person who controls, is controlled by, or is under

common control with, a refiner.

     (iii) A person who is otherwise directly or indirectly

affiliated with a refiner or with a person who controls, is

controlled by, or is under a common control with a refiner, unless

the sole affiliation is by means of a supply contract or an

agreement or contract strictly applying to the use as a trademark,

trade name, service mark, or other identifying symbol or name owned

by the refiner or any such person.

     (iv) A person who receives less than 50% of his or her annual

income from refining or marketing gasoline.

     (2) A person who claims an exemption under subsection (1)(b)

shall provide to the director articles of incorporation, leasee

agreements, supply contracts, or other adequate documentation to

support the person's eligibility for the exemption. For the purpose

of subsection (1)(b), "refiner" does not include a refiner whose

total refinery capacity, including the refinery capacity of any

person who controls, is controlled by, or is under common control

with the refiner, does not exceed 65,000 barrels per day. For

purposes of this subsection and subsection (1)(b), "control" of a

corporation means ownership of more than 50% of its stock.

(2)  (3) A dispensing facility that claims or intends to

claim exempt status under subsection  (1)(a)  (1) and which has

2,000 or more gallons stationary gasoline storage capacity

beginning in 1994 shall submit an annual report to the department

by March 1 of each year for gasoline dispensed during the preceding

year. These throughput records shall contain the quantity of

gasoline dispensed at the facility during each month of operation

for the preceding calendar year and shall list any period of time

the facility was not operational during the preceding calendar

year. The director shall review and verify the accuracy of the

documents before making final determination on eligibility for

exemption.

     (4) A gasoline dispensing facility exempt under subsection

(1)(b) shall maintain records of the gasoline dispensed that will

allow the gasoline throughput for each calendar month to be

continuously determined. These records shall be maintained for 3

years and shall be submitted to the director within 30 days after a

request.

(3)  (5) If a dispensing facility's gasoline throughput for

any calendar month ever exceeds the applicability threshold, the

operator shall notify the department within 30 days.

     Sec. 9d. (1)  An operator shall not transfer, permit the

transfer of, or provide equipment for the transfer of gasoline from

a stationary storage tank at a dispensing facility into a motor

vehicle fuel tank unless an approved stage II vapor-recovery system

has been installed and is properly used during the transfer. The

system shall use coaxial hoses at the dispensers, and shall not

contain any components, such as remote vapor check valves in

balance-type systems that would significantly impede the

performance of the functional tests required in section 9f.

     (2) The operator of a dispensing facility shall demonstrate

proper stage II vapor-recovery system function by the vapor-

recovery system compliance tests as required in section 9f.

     (3) The operator shall maintain the stage I  and stage II  

vapor-recovery systems in proper operating condition as specified

by the manufacturer and free of defects that could impair the

effectiveness of the system. Any component identified as defective,

but which does not substantially impair the effectiveness of the

system, may remain in operation but shall be repaired or replaced

within 15 days after identification.  Upon identification of any

substantial defect, the operator shall immediately tag "out-of-

order" all dispensing equipment for which stage II vapor recovery

has been impaired. Tagged equipment shall be rendered inoperable

and the tag or tags shall not be removed until the defective

equipment has been repaired, replaced, or adjusted, as necessary.

(2)  (4) The stage I  and stage II vapor-recovery systems

and gasoline-dispensing equipment shall be maintained to have no

leaks.

(3)  (5) The operator shall conduct equipment inspections at

least weekly to determine if the stage  II  I vapor-recovery system

is operating in accordance with this act and rules promulgated

under this act.  The inspection shall include all of the following:

     (a) A visual inspection of motor vehicle refueling to ensure

that the flow shutoff mechanisms are working properly.

     (b) An inspection of all boots, hoses, facecones, and

faceplates for tears or rips.

     (c) A visual inspection of all dispensing equipment for any

gasoline leaks.

     (d) An inspection of all gasoline delivery nozzles for

tightness, bends, and crimps that may impede vapor recovery.

     (6) A notice of the benefits and explanation of operation of a

stage II vapor-recovery system shall be conspicuously posted in a

manner specified by the department in accordance with section

9h(1)(d).

(4)  (7) A person shall not repair, modify, or permit the

repair or modification of the stage I  or stage II vapor-recovery

system or its components so that they are different from their

approved configuration; or tamper with, or permit tampering with,

the system in a manner that would impair the operation or

effectiveness of the system.

     (8) The operator shall recertify the function of the stage II

vapor-recovery system at least every 5 years or upon major system

replacement or modification, whichever comes first. Recertification

requires a leak test and all other functional tests required by the

department.

     (9) The operator shall ensure that at least 1 employee of the

dispensing facility possesses a valid training certificate on the

operation and maintenance of the stage II vapor-recovery system and

on the vapor-recovery program and its requirements, as specified in

section 9e. If the dispensing facility employee who completed the

training course leaves the employment of the dispensing facility,

at least 1 other employee of the dispensing facility shall

successfully complete a training course within 90 days after the

departure of the previously trained employee. If a dispensing

facility changes the type of stage II vapor-recovery system used by

the facility, new training or retraining of an employee under this

subsection shall be completed before the start-up of the new vapor-

recovery system.

     Sec. 9g. (1) An operator shall maintain accurate records of

all of the following at the dispensing facility location:

     (a) All current licenses and permits required to operate the

dispensing facility.

     (b) Current proof of attendance and completion of the training

specified in section 9d(9).

(b)  (c) The location, including the contact person's name,

address, and telephone number, of the records required under this

act which are not maintained at the dispensing facility location.

     (2) An operator shall maintain accurate stage I vapor-recovery

or gasoline-dispensing equipment maintenance records  of both of

the following  on forms approved by the department for 3 years.  :

     (a) Installation and compliance testing results required under

section 9f.

     (b) Maintenance records on forms approved by the department.

     (3) The records required by subsection (2) shall be maintained

for 1 year at the dispensing facility location. After this time

these records may be maintained at another business location.

     (4) Records required under this act and maintained at the

dispensing facility location shall be made available to the

director upon request during normal business hours. If records

required under this section are not maintained at the dispensing

facility location, the records shall be provided to the director

within 72 hours of a request.

     Sec. 9h. (1) To implement this section and sections 9a to 9g,

the director shall do all of the following:

     (a) Develop and conduct training for department inspectors to

provide knowledge and proficiency on  all  stage I vapor-recovery

program requirements and procedures.

     (b) Prepare information on the purposes and benefits of stage

I vapor-recovery controls and distribute this information to

regulated facilities.

     (c) Prepare for the general public information on the benefits

and purpose of the stage II vapor-recovery program and the proper

use of the equipment.

     (d) The director shall design a uniform means of providing the

notice required by section 9d(6). The notice shall be designed in

such a manner that the consumer can readily understand the benefits

and operation of a stage II vapor-recovery system.

(c)  (e) Conduct a minimum of 1 compliance inspection per

year per dispensing facility, with mandatory reinspection of

dispensing facilities that are found to be in violation of this act

or rules promulgated under this act. A compliance inspection

consists of the inspection of the records required in section 9g  ,

inspection of facility equipment as required in section 9c, and

functional testing  inspection of the equipment.

(d)  (f) Monitor the compliance of the regulated facilities

with this act through data collection, including applications and

required documents.

(e)  (g) Investigate complaints and initiate and conduct

other investigations on possible violations of this act.

     (2) If the director finds a defect in a stage I  or stage II

vapor-recovery system, the director shall reject or condemn and

mark the equipment as "rejected" or "condemned". Equipment that is

rejected or condemned and ordered corrected or disposed of shall

remain under the control of the director until suitable repair or

disposition has been made under this section. The operator of the

rejected or condemned equipment shall cause it to be made correct

within the specified time period authorized by the director, or may

dispose of the equipment in a manner specified by the director.

Equipment that has been rejected or condemned and ordered corrected

or disposed of may be confiscated and may be destroyed by the

director if not corrected as required by, or if disposed of

contrary to the requirements of, this section.

     (3) If necessary for the enforcement of this act or rules

promulgated under this act, the director may do all of the

following:

     (a) Issue stop-use orders, hold orders, or removal orders for

stage I  or stage II vapor-recovery and gasoline-dispensing

equipment. A person shall not use, remove from the premises

specified, or fail to remove from the premises specified any stage

I  or stage II vapor-recovery or gasoline-dispensing equipment

contrary to any order issued pursuant to this section.

     (b) Seize for use as evidence without formal warrant, any

incorrect or unapproved stage I  or stage II vapor-recovery system

or dispensing equipment found to be used or exposed for use in

violation of this act or rules promulgated under this act.

     (4) With respect to enforcement of this act, the director has

the power of a peace officer.

     (5) The director may petition a court of competent

jurisdiction for a temporary restraining order or permanent

injunction restraining a person from violating this act or a rule

promulgated under this act.

     Sec. 9i. (1) A dispensing facility in the county of Wayne,

Oakland, Macomb, Washtenaw, Livingston, Monroe, or St. Clair

constructed after November 15, 1990 shall obtain a dispensing

permit. The fee for a dispensing permit is $25.00 for each year or

portion of a year.

     (2) Before a dispensing permit is issued, a dispensing

facility shall install an approved stage I  and, if required, stage

II vapor-recovery system and, in addition to the fee for the

dispensing permit, shall pay a registration fee for each dispensing

unit located at the dispensing facility. A permit shall not be

issued or renewed until all fees and administrative fines issued

under section 10a are paid. A hearing shall not be required before

the refusal to issue or renew a permit under this subsection.

     (3) A dispensing permit expires annually on November 30 unless

renewed before December 1 of each year or unless suspended, denied,

or revoked by the department. Application for a dispensing permit

shall be made on a form furnished by the department. The completed

form shall contain the information requested by the department and

shall be accompanied by the fees specified.

     (4) The director may suspend, deny, or revoke a dispensing

permit issued pursuant to this act for failure to pay the fee

required by subsection (1) or (2) or for failure to comply with the

requirements of sections 9a to 10c.

     (5) A fee shall be charged to the operator of stage I  and

stage II vapor-recovery or gasoline-dispensing equipment for its

inspection if any of the following occur:

     (a) The inspection is a reinspection of equipment that has

already been tested and found to contain a substantial defect.  as

defined under section 9c.

     (b) The inspection is performed at the request of the

operator.

     (6) The department shall establish the fees and expenses for

special services, including the fee for an operator requested

inspection or reinspection, for registrations, for training

courses, and for accreditation of a trainer, to provide that each

fee is sufficient to cover the cost of an operator requested

inspection, reinspection, registration, training, or trainer

accreditation, respectively, and that the aggregate of all fees

collected is sufficient to pay for all salaries and other expenses

connected with the activity. The department shall review and adjust

the fees at the end of each year and have all fees approved by the

director before they are adopted. Fees collected under this section

shall be deposited in the gasoline inspection and testing fund and

reserved for conducting the vapor-recovery program.

     (7) Subject to subsection (2) and beginning on the effective

date of the amendatory act that added this subsection, the

department shall issue an initial or renewal permit not later than

120 days after the applicant files a completed application. If the

application is considered incomplete by the department, the

department shall notify the applicant in writing or make

notification electronically available within 40 days after receipt

of the incomplete application, describing the deficiency and

requesting the additional information. The 120-day period is tolled

upon notification by the department of a deficiency until the date

all of the information requested during the 40-day period is

received by the department. The determination of the completeness

of an application does not operate as an approval of the

application for the permit and does not confer eligibility of an

applicant determined otherwise ineligible for issuance of a permit.

Requests for new or additional information by the department that

fall outside the initial 40-day period do not toll the 120-day

period.

     (8) If the department does not issue or deny a permit within

120 days after the receipt of a completed application, the

department shall return the permit fee and shall reduce the permit

fee for the applicant's next renewal application, if any, by 15%.

The failure to issue a permit within the time required under this

subsection does not allow the department to otherwise delay the

processing of the application, and that application, upon

completion, shall be placed in sequence with other completed

applications received at that same time. The department shall not

discriminate against an applicant in the processing of an

application based on the fact that the application fee was refunded

or discounted under this subsection.

     (9) Beginning October 1, 2005, the director of the department

shall submit a report by December 1 of each year to the standing

committees and appropriations subcommittees of the senate and house

of representatives concerned with motor fuel quality issues. The

director shall include all of the following information in the

report concerning the preceding fiscal year:

     (a) The number of initial and renewal applications the

department received and completed within the 120-day time period

described in subsection (7).

     (b) The number of applications denied.

     (c) The number of applications not issued within the 120-day

period and the amount of money returned to permittees under

subsection (8).

     (10) As used in this section, "completed application" means an

application complete on its face and submitted with any applicable

permitting fees as well as any other information, records,

approval, security, or similar item required by law or rule from a

local unit of government, a federal agency, or a private entity but

not from another department or agency of the state of Michigan.

     Sec. 9j. (1) A person shall not deliver gasoline or permit the

delivery of gasoline to a dispensing facility that lacks a stage I

vapor-recovery system.

     (2) Prior to delivery of gasoline to a dispensing facility, a

delivery vessel shall be certified by the department of  natural

resources  environmental quality as vapor tight by meeting the

requirements of R 336.1627 of the Michigan  Administrative Code

administrative code.

     (3) A person shall not deliver gasoline or permit the delivery

of gasoline to a dispensing facility unless the stage I vapor-

recovery system is employed during delivery and the dispensing

facility storage tank is equipped with a permanent submerged fill

pipe.

     (4) A stage I vapor-recovery system shall include a properly

functioning interlocking system or procedure that ensures that the

vapor-tight collection line is connected before any gasoline is

loaded, or shall include an equivalent system approved by the

department.

     (5) A stage I vapor-recovery system shall have a poppetted

drybreak on the vapor return or an equivalent system approved by

the department.

     (6) All open vent pipes for a stage I  or stage II vapor-

recovery system that are on stationary tanks at dispensing

facilities shall be equipped with pressure-vacuum relief valves in

a system approved by the department.

     (7) A dispensing facility regulated under this act is not

subject to R 336.1606 or R 336.1703, or both, of the Michigan

Administrative Code  administrative code. This subsection does not

apply to a delivery vessel which shall continue to be subject to

the rules listed in this subsection.

     Sec. 9k. If the governor declares an emergency under the

emergency management act, 1976 PA 390, MCL 30.401 to 30.421, or

1982 PA 191, MCL 10.81 to 10.89, the governor may exercise his or

her discretion to grant a temporary variance suspending the low

vapor pressure fuel provisions of this act or rules promulgated

under this act if the governor concludes it is necessary to avoid

disruptions in fuel supply. Fuel manufactured, sold, distributed,

offered for sale or distribution, dispensed, offered for supply,

stored, or transported under the variance shall be deemed compliant

with the low vapor pressure fuel requirements of this act. The fine

described in section 9l does not apply to a variance described in

this section. The variance shall be granted only for the minimum

period necessary. The allowable vapor pressure under the variance

shall be the minimum the governor considers necessary and in no

event shall the variance allow the refiner, distributor, or

terminal to operate with a vapor pressure of greater than 9.0 psi.

     Sec. 9l. (1) A gasoline refiner, distributor, or terminal may

petition the department for a temporary variance from the vapor

pressure standards established by the director or in this act. In

order to receive a variance, the refiner, distributor, or terminal

shall demonstrate that fuel necessary to meet the current standard

cannot be supplied and that the refiner, distributor, or terminal

has taken and will continue to take all reasonable steps to

minimize the vapor pressure of fuel during the period the variance

is in effect. If the department finds that the reason fuel that

would allow the refiner, distributor, or terminal to meet the

standard is not available is beyond the control of the refiner,

distributor, or terminal and that compliance with the vapor

pressure standard would result in fuel shortages that cannot

House Bill No. 5508 as amended March 21, 2006

otherwise be made up, the department may grant the variance. The

variance shall be granted only for the minimum period necessary and

in no event shall the department grant a variance for longer than

20 days. The allowable vapor pressure under the variance shall be

the minimum the department considers necessary and in no event

shall allow the refiner, distributor, or terminal to operate with a

vapor pressure of greater than 9.0 psi.

     (2) A fine of 10 cents per gallon of fuel sold or released for

sale during the variance period shall be collected by the

department for every variance granted. After 2006, the amount of

the fine shall be the amount charged in 2006 annually adjusted by

the same percentage increase or decrease as the increase or

decrease in the Detroit consumer price index. The department shall

collect the fines on forms generated by the department and shall

establish a payment schedule for payment of fines. Fines collected

under this section shall be deposited in the <<gasoline inspection and

testing fund established in section 8>> and shall be appropriated

annually by the legislature for air

quality mitigation projects in the geographic area covered by the

applicable state implementation plan requirement for low vapor

pressure fuel.

     Sec. 10b. (1) A person who individually, or by the action of

his or her agent or employee, or as the agent or employee of

another, performs any of the following is guilty of a misdemeanor

punishable by imprisonment for not more than 90 days  ,  or a fine

of not less than $1,000.00 or more than $2,000.00, or both:

     (a) Renders less effective or inoperable any part of a stage I

or stage II vapor-recovery system.

     (b) Makes a false statement, representation, or certification

on an application, report, plan, label, or other document that is

required to be maintained under this act or rules promulgated under

this act.

     (c) Fails to disclose to the department any knowledge or

information relating to or observation of any modification of a

stage I  or stage II vapor-recovery system which makes the system

less effective or inoperable, or falsification of records required

to be maintained under this act or rules promulgated under this

act.

     (d) Removes a tag, seal, or mark placed on a dispensing device

by the director.

     (e) Violates this act or a rule promulgated under this act for

which a specific penalty is not prescribed.

     (2) A person who individually, or by the action of his or her

agent or employee, or as the agent or employee of another, performs

any of the following acts is guilty of a misdemeanor punishable by

imprisonment for not more than 90 days  ,  or a fine of not less

than $2,000.00 or more than $10,000.00, or both:

     (a) Violates a prohibited act listed in this section within 24

months after another violation of this section that results in a

conviction.

     (b) Impersonates in any way the director or any department

inspector.

     (3) A person who individually, or by the action of his or her

agent or employee, or as the agent or employee of another, performs

any of the following acts is guilty of a felony punishable by

imprisonment for not more than 2 years  ,  or a fine of not less

than $10,000.00 or more than $15,000.00, or both:

     (a) Intentionally commits a prohibited act under this section.

     (b) Violates a prohibited act listed in this section within 24

months after 2 previous violations of this section that result in

convictions.

     (4) If a violation of this section results in a conviction,

the court shall assess against the defendant the costs of the

department's investigation, and these costs shall be paid to the

state treasury and deposited in the gasoline inspection and testing

fund to be used for the enforcement of this act.

     Sec. 10c.  (1) The director may suspend the requirements of

sections 9a through 9g, 9i, and 9j for any area of the state that

is formally redesignated by the E.P.A. as an attainment area for

ozone in accordance with the requirements of the E.P.A. and section

107(d)(3)(D) of part A of title I of the clean air act, chapter

360, 84 Stat. 1678, 42 U.S.C. 7407, if the redesignation by the

E.P.A. identifies the stage II vapor control program as unnecessary

to maintain the national ambient air quality standards for ozone in

the affected area. However, the director retains the authority to

implement the stage II vapor control program as a contingency

measure in any such formally redesignated area consistent with the

redesignation request as approved by the E.P.A. and the

requirements of the clean air act.

     (2) Any area of the state that is formally redesignated by the

E.P.A. as an attainment area for ozone in accordance with the

requirements of the E.P.A. and section 107(d)(3)(D) of part A of

title I of the clean air act, chapter 360, 84 Stat. 1678, 42 U.S.C.

7407, and has demonstrated maintenance of the standards without the

stage I vapor control program is exempt from the requirements of

sections 9a to 9f, 9i, and 9j. However, the  The director retains

the authority to implement the stage I vapor control program  as a

contingency measure in any such formally redesignated area

consistent with the redesignation request as approved by the E.P.A.

and the requirements of the clean air act  in areas where it is

determined necessary to attain or maintain national ambient air

quality standards.

     (3) The director shall suspend the requirements of this act

pertaining to the stage II vapor control program contained in

sections 9a to 9g and section 9i when the E.P.A. promulgates final

onboard vehicle vapor control rules pursuant to section 202(a)(6)

of part A of title II of the clean air act, chapter 360, 79 Stat.

992, 42 U.S.C. 7521. However, the director retains the authority to

implement the stage II vapor control program as a contingency

measure in the maintenance plan for an area formally redesignated

by the E.P.A. as an attainment area for ozone if an actual

violation of the ozone standard is observed in that area. In

addition, the director may only implement the contingency measure

regarding the stage II vapor control program in 1 or more of the

following counties:

     (a) Macomb county.

     (b) Oakland county.

     (c) Washtenaw county.

     (d) Wayne county.

     (e) Kent county.

     (f) Muskegon county.

     (g) Ottawa county.

     (4) Except as otherwise provided in subsection (3), for all of

the counties listed in subsection (3), if the ozone nonattainment

area is redesignated by the E.P.A. as an attainment area, the

director shall not implement the stage II vapor control program in

that area as provided for in section 9a to 9g and 9i.

     Sec. 10d.  Any area of the state that is formally redesignated

by the E.P.A. as an attainment area for ozone in accordance with

the requirements of the E.P.A. and Section 107(d)(3)(D) of Part A

of title I of the clean air act, chapter 360, 84 Stat. 1678, 42

U.S.C. 7407, and has demonstrated maintenance of the standards

without the Reid vapor pressure requirement of 7.8 psi for

dispensing facilities during the period beginning June 1 through

September 15 of each year is exempt from that requirement of

sections 9a to 9g, 9i, and 9j. However, the  Beginning June 1

through September 15 of 2007 and for that period of time each

subsequent year, the vapor pressure standard shall be 7.0 psi for

dispensing facilities in Wayne, Oakland, Macomb, Washtenaw,

Livingston, Monroe, St. Clair, and Lenawee counties. The director

retains the authority to implement the  Reid  vapor pressure 7.0

psi requirement or 7.8 psi requirement  for dispensing facilities

as a contingency measure in any such formally redesignated area

consistent with the redesignation request as approved by the E.P.A.

and the requirements of the clean air act  in areas where it is

determined necessary to attain or maintain national ambient air

quality standards. If an area of the state that is required to use

a low vapor pressure fuel of 7.8 psi or 7.0 psi has been

redesignated by the United States environmental protection agency

as in attainment of national ambient air quality standards, and the

Michigan department of environmental quality has demonstrated that

maintenance of the national ambient air quality standards can be

achieved without the use of low vapor pressure fuel, the director

may, with the approval of the United States environmental

protection agency, terminate the low vapor pressure fuel

requirement for that area.

     Enacting section 1. Sections 9c, 9e, and 9f of the motor fuels

quality act, 1984 PA 44, MCL 290.649c, 290.649e, and 290.649f, are

repealed.