2004 House Bill 6074 (Retain motor fuel "regulatory fee" )

Public Act 390 of 2004

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Introduced by Rep. Marc Shulman on July 6, 2004, to eliminate the sunset on the collection of a 7/8ths cent-per-gallon "regulatory fee" imposed on the sale of petroleum products that is intended to be used for the cleanup of underground fuel storage tanks. Under current law, when the tanks are all cleaned up the fee would no longer be imposed. The bill would allow existing money in the underground fuel tank cleanup fund that is not needed to pay off the cleanup program's debt to be used for general environmental enforcement and regulatory actions, thereby supplementing general fund money in the budget, and avoiding more spending cuts.
- Referred to the House Appropriations Committee on July 6, 2004.
  - Reported in the House on July 14, 2004, without amendment and with the recommendation that the bill pass.
- Substitute offered by Rep. Mike Pumford on July 14, 2004, to extend the tax for an additional two years, rather than indefinately, and use $50 million in the underground tank cleanup fund to avoid making spending cuts in the 2005 budget. The bill would use the remaining $120 million in the fund to pay off the Michigan Underground Storage Tank Financial Assurance (MUSTFA) program's remaining debt. The substitute passed in the House by voice vote on July 14, 2004.
- Amendment offered by Rep. Mike Pumford on July 14, 2004, to only extend collection of the "fee" until Sept. 30, 2006. The amendment passed in the House by voice vote on July 14, 2004.
- Amendment offered by Rep. Mike Pumford on July 14, 2004, to transfer money not needed to pay off the underground fuel tank cleanup program's debt to a state cleanup and redevelopment fund, which can be appropriated by the legislature for general environmental enforcement and regulatory actions, not just underground fuel tank cleanup. The amendment passed in the House by voice vote on July 14, 2004.
Passed in the House (87 to 13) on July 14, 2004, to extend for an additional two years the 7/8ths cent-per-gallon fuel "regulatory fee" (tax) levied for the cleanup of underground fuel tanks, and use $50 million in the underground tank cleanup fund to avoid making spending cuts in the 2005 budget. Under current law, the tax would have ended on Sept. 30, 2004. Extending it will increase the tax paid by motorists by approximately $30 million a year. A new commission will advise what to do with that money. Note: A pending lawsuit against the state contends that the authority to levy this tax was eliminated once there was enough money to pay off the underground tank cleanup program's debt. [Vote Details and Comments]
Received in the Senate on August 4, 2004.
- Referred to the Senate Appropriations Committee on August 4, 2004.
  - Reported in the Senate on September 23, 2004, with the recommendation that the substitute (S-5) be adopted and that the bill then pass.
- Substitute offered in the Senate on September 28, 2004, to replace the previous version of the bill with one that extends the tax or fee until December 31, 2010. The substitute passed in the Senate by voice vote on September 28, 2004.
Passed in the Senate (32 to 5) on September 29, 2004, to extend until 2011 the 7/8ths cent-per-gallon fuel sale "regulatory fee" (tax) levied for the cleanup of underground fuel tanks, and use $43 million in the underground tank cleanup fund to avoid making spending cuts in the 2005 budget. Under current law, the tax would have ended on Sept. 30, 2004, and extending it will increase the tax paid by motorists by approximately $30 million a year. A new council will recommend fuel-related cleanups and other uses for the money, including existing fuel industry regulatory programs now funded by the general fund. The MUSTFA law requires the tax to be used for underground tank cleanup, and a pending lawsuit contends the tax should have been eliminated once there was enough money to pay off MUSTFA's debt. [Vote Details and Comments]
Received in the House on September 29, 2004, to concur with the Senate-passed version of the bill, which extends the tax for another six years, rather than another two years. Passed in the House (74 to 31) on September 29, 2004. [Vote Details and Comments]
Signed by Gov. Jennifer Granholm on October 12, 2004.

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Comments

Introduced by Rep. Marc Shulman on July 6, 2004. Passed in the House (87 to 13) on July 14, 2004. New Comment

1) Motor fuel regulatory fee [by Anonymous Citizen on November 6, 2004]
A new twist to the old hide and switch game. Rob the public insted of cutting services. When will our representative have the guts to cut services that money is not available to support. You have taken 30 million out of consumer spending and reduced the chance of an economic recovery. Great job.
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2) Another Tax Increase [by Mike Hignite on November 5, 2004]
Thanks for raising my taxes yet again.

I hope you citizens are paying attention. Almost everytime the legi-crats have a short-term, temporary tax for some new crisis, it gets extended. They figure that we are used to it, and we might as well keep it going rather than make any kind of a hard decision.
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3) House rips off motorists with unconstitutional tax [by Anonymous Citizen on July 16, 2004]
Of the $1.90 or so that Michigan drivers are paying for each gallon of gas or Diesel fuel these days, 7/8 of a cent is a "regulatory fee" that repays the bonds sold to finance the grossly-mismanaged underground storage-tank cleanup program of the late 1980's. (Unscrupulous contractors bilked the state of much of this money.) Enough money to cover that debt has now been collected, so under the law the 7/8-cent tax should have come off in 2003 or 2004.

Petroleum wholesalers have filed suit to stop paying the tax, and want a refund of $60 million or so that may have been illegally collected. Of course, all that money was actually paid by Michigan motorists, farmers, contractors, and homeowners, who won't see a dime of the refund, if it is made.

In the current bill, the House proposes to continue the underground-tank tax at least through 2006, while abolishing the pollution-cleanup program for fuel tanks. The bill creates a 9-person committee to recoemmend how to spend the $120 million that will be collected in the next two years, presumably on remediating contaminated fuel-tank sites. But this is just window dressing: the legislature is not required to spend the money on anything having to do with underground tanks. Rather, the tax is clearly to balance the Fiscal 2005 budget.

Because the overwhelming majority of petroleum products subject to the 7/8-cent tax are fuel for highway use, this bill violates the intent, if not the exact letter, of Article IX, Sec. 9 of the state Constitution, which restricts motor fuel taxes to road construction and public transit, excepting only "regulatory fees."

House Speaker Rick Johnson has told the Republican caucus that this tax is being extended explicitly to balance the General Fund budget. I hope the court is reminded of this when the constitutionality of this tax is challenged.

If this bill passes, it will be the third unconstitutional raid by this legislature on motorists' road-use fees. (The first two were the $2.25 surtax on license plates that is going to the State Police, and the $10 "late fee" on plate renewals that is going to the General Fund.) If motorists do not start objecting to these rip-offs, state officials will continue to stretch the definition of "regulatory fee" until large portions of the DEQ and State Police budgets are being charged to motorists.

When your state representative asks for your vote this summer, ask him why he thinks you should pay to balance the budget every time you fill your tank or buy heating fuel.
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4) gas tax should be for roads [by Anonymous Citizen on July 9, 2004]
Time to re-write part 213 and 215. No more gas tax except for roads
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5) absolutely terrible [by Anonymous Citizen on July 8, 2004]
At a Spring 2004 conference, one of the main suits at the MDEQ was licking his chops at the $60 Million this tax generates a year and thought it would go a long way to help the DEQ budget. There is one problem, that not what it was meant for. The MDEQ suit finally found a newby to listen. Notice it is not anyone in the environment committee. hopefully they will be wise of these tactics and turn it down in committee
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6) mdeq [by Anonymous Citizen on May 10, 2008]
Mdeq wastes alot of cash on nothing.
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7) Nice try. [by Anonymous Citizen on July 8, 2004]
Sounds like a backdoor attempt to locate another "new" source of revenue for the spendaholics in Lansing.

There's a damn good reason why sunset provisions are included in bills such as these. The "learned" representative is obviously ignorant of this simple fact.

This should die in committee.
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8) worse idea ever [by Anonymous Citizen on July 8, 2004]
MUSTFA is over and so should the tax. MUSTFA was for an "insurance policy" for the state USTs owners. The state mishandled and the fund went broke screwing many tank owners. No to this bill, don't take our taxes
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Received in the Senate on August 4, 2004. Passed in the Senate (32 to 5) on September 29, 2004. New Comment

1) Thanks for tax increase [by Mike Hignite on November 5, 2004]
I appreciate you raising my taxes again. I was afraid I'd have to decide how to spend my money all by myself.
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Received in the House on September 29, 2004. Passed in the House (74 to 31) on September 29, 2004. New Comment

1) Thanks for trying [by Mike Hignite on November 5, 2004]
Joe Hune, thanks for voting against raising my taxes in the final bill. I guess I didn't make a mistake voting for you this time.

As for the rest of you plunderers, your mother was a hamster and your father smelled of elderberries. Go away or I will taunt you a second time.
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