SB-1196, As Passed Senate, June 10, 2008

SUBSTITUTE FOR

SENATE BILL NO. 1196

(As amended, June 10, 2008)

     A bill to amend 2007 PA 36, entitled

"Michigan business tax act,"

(MCL 208.1101 to 208.1601) by adding section 430.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 430. (1) 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 <<the following:

     (a) For the 2008 tax year only, 30% of the cost incurred during the tax year and the immediately preceding 2 tax years to convert existing fuel delivery systems to provide E85 fuel and to create new fuel delivery systems designed to provide E85 fuel.

     (b) For the 2009 tax year and each tax year after 2009,>> 30% of the

cost <<incurred during the tax year>> to convert existing fuel delivery

systems to provide E85 fuel

and to create new fuel delivery systems designed to provide E85

fuel.

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

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

fuel delivery systems to provide E85 fuel or to create new fuel

delivery systems designed to provide E85 fuel for which the

Senate Bill No. 1196 as amended June 10, 2008

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. <<For the 2008 tax year only, a taxpayer

that 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, during the 2006 or 2007 tax year shall not include any costs incurred during those tax years to convert or create fuel delivery systems to provide E85 fuel.>>

     (3) 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 Michigan strategic fund 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

created new fuel delivery systems designed to provide E85 fuel, 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 and to create new fuel delivery systems

designed to provide E85 fuel 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 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.

     (6) As used in this section:

     (a) "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.

     (b) "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.