HB-5878, As Passed Senate, December 10, 2008

SUBSTITUTE FOR

HOUSE BILL NO. 5878

     A bill to amend 2007 PA 36, entitled

"Michigan business tax act,"

(MCL 208.1101 to 208.1601) by adding section 460.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 460. (1) For tax years that begin after December 31, 2008

and end before January 1, 2012, subject to the limitations provided

under this section, a taxpayer that is an owner of a service

station may claim a credit against the tax imposed by this act

equal to 30% of the cost incurred during the tax year to convert

existing fuel delivery systems to provide E85 fuel or qualified

biodiesel blends and to create new fuel delivery systems designed

to provide E85 fuel or qualified biodiesel blends, not to exceed

$20,000.00 per tax year per taxpayer.

     (2) In determining the amount of the credit under subsection

House Bill No. 5878 (H-2) as amended December 3, 2008

(1), a taxpayer shall not include any costs to convert existing

fuel delivery systems to provide E85 fuel or qualified biodiesel

blends or to create new fuel delivery systems designed to provide

E85 fuel or qualified biodiesel blends for which the taxpayer

received a grant under the service station matching grant program

created under section 78 of the Michigan strategic fund act, 1984

PA 270, MCL 125.2078.

     (3) The total amount of all credits allowed under this section

shall not exceed $1,000,000.00 per calendar year. If the credit

allowed under this section exceeds the liability of the taxpayer

for the tax year, that portion of the credit that exceeds the tax

liability shall not be refunded.

     (4) A taxpayer shall not claim a credit under this section

unless the [ENERGY OFFICE ] has issued a certificate to the

taxpayer. The taxpayer shall attach the certificate to the annual

return filed under this act on which the credit under this section

is claimed. The certificate required by this subsection shall state

all of the following:

     (a) The taxpayer is the owner of a service station and has

converted existing fuel delivery systems to provide E85 fuel or

qualified biodiesel blends or created new fuel delivery systems

designed to provide E85 fuel or qualified biodiesel blends, or

both, during the tax year for which this credit is sought.

     (b) The amount of the costs incurred by the taxpayer during

the designated tax year to convert existing fuel delivery systems

to provide E85 fuel or qualified biodiesel blends and to create new

fuel delivery systems designed to provide E85 fuel or qualified

biodiesel blends and the amount of any grant awarded during the

designated tax year to the taxpayer based on the same costs.

     (c) The taxpayer's federal employer identification number or

the Michigan department of treasury number assigned to the

taxpayer.

     (5) A taxpayer that claims a credit under this section and

subsequently stops using the fuel delivery systems to provide E85

fuel or qualified biodiesel blends or within 3 years of receiving

this credit may, as determined by the Michigan strategic fund, have

its credit reduced or terminated or have a percentage of the credit

amount previously claimed under this section added back to the tax

liability of the taxpayer in the year that the taxpayer stops using

the fuel delivery systems to provide E85 fuel or qualified

biodiesel blends.

     (6) As used in this section:

     (a) "Biodiesel" means a fuel composed of monoalkyl esters of

long chain fatty acids derived from vegetable oils or animal fats,

and, in accordance with standards specified by the American society

for testing and materials, designated B100, and meeting the

requirements of D-6751, as approved by the department of

agriculture.

     (b) "Biodiesel blend" means a fuel composed of a blend of

biodiesel fuel with petroleum-based diesel fuel, suitable for use

as a fuel in a compression-ignition internal combustion diesel

engine.

     (c) "E85 fuel" means a fuel blend containing between 70% and

85% denatured fuel ethanol and gasoline suitable for use in a

spark-ignition engine and that meets American society for testing

and materials D-5798 specifications.

     (d) "Michigan strategic fund" means the Michigan strategic

fund as described in the Michigan strategic fund act, 1984 PA 270,

MCL 125.2001 to 125.2094.

     (e) "Qualified biodiesel blends" means any biodiesel blend

that is blended on site utilizing on-demand bio-blending equipment

that is installed after the effective date of the amendatory act

that added this section.