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PRIOR PRINTER'S NO. 3174
PRINTER'S NO. 3276
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2233
Session of
2020
INTRODUCED BY GREINER, HILL-EVANS, ROTHMAN, NEILSON, DUNBAR,
RYAN, PICKETT, SAINATO, JAMES, FEE, LONGIETTI, HICKERNELL,
MENTZER, ZIMMERMAN, GALLOWAY, ROEBUCK, HERSHEY, CONKLIN,
CIRESI AND GILLEN, JANUARY 17, 2020
AS REPORTED FROM COMMITTEE ON FINANCE, HOUSE OF REPRESENTATIVES,
AS AMENDED, FEBRUARY 5, 2020
AN ACT
Amending Title 75 (Vehicles) of the Pennsylvania Consolidated
Statutes, in liquid fuels and fuels tax, further providing
for definitions, providing for exempt entity use, sale and
delivery POLITICAL SUBDIVISION AND VOLUNTEER SERVICE USE of
tax-free motor fuels and further providing for examination of
records and equipment.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 9002 of Title 75 of the Pennsylvania
Consolidated Statutes is amended by adding definitions to read:
§ 9002. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
* * *
"Motor fuels." Liquid fuels or fuels. This term does not
include alternative fuels.
* * *
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"Political subdivision." A county, city, borough,
incorporated town, township, school district, vocational school
district and county institution district.
"Registered distributor." A distributor that holds a valid
liquid fuels or fuels tax permit issued by the department.
* * *
"Tax-free motor fuels." Motor fuels upon which the oil
company franchise tax has not been imposed.
"Volunteer service." A volunteer fire company, volunteer
ambulance service or volunteer rescue squad.
Section 2. Title 75 is amended by adding a section to read:
§ 9004.1. Exempt entity use, sale and delivery of tax-free
motor fuels.
(a) Limitations.--An exempt entity:
(1) May not be a distributor.
(2) May use tax-free motor fuels only for its own
official business purposes.
(3) May not sell or deliver tax-free motor fuels to any
other person or exempt entity except to political
subdivisions as provided under subsection (c).
(4) May purchase and take delivery of tax-free motor
fuels only from a registered distributor except for volunteer
services as provided under subsection (c).
(5) Shall cooperate with the department during an
investigation or audit related to the use, sale or delivery
of tax-free motor fuels provided for in this chapter.
(b) Penalties.--An exempt entity that improperly uses, sells
or delivers tax-free motor fuels shall:
(1) Pay to the Commonwealth the tax imposed by section
9004(b) (relating to imposition of tax, exemptions and
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deductions).
(2) Pay an additional penalty equal to 100% of the tax
imposed by section 9004(b).
(3) Become subject to any other penalties, summary
offenses or misdemeanors that may be imposed upon
distributors who violate the provisions of this chapter.
(c) Conditions on sales or deliveries to volunteer
services.--A political subdivision may sell or deliver tax-free
motor fuels to a volunteer service if:
(1) The political subdivision's bulk storage tank from
which the volunteer service removes tax-free motor fuels
contains only tax-free motor fuels that are either owned
exclusively by the political subdivision or owned by both the
political subdivision and one or more volunteer services
pursuant to a valid commingling agreement as provided for in
subsection (d).
(2) The volunteer service provides services to the
political subdivision and the residents of the political
subdivision.
(3) The volunteer service takes delivery of the motor
fuel directly from a bulk storage tank owned by the political
subdivision.
(4) The withdrawal of tax-free motor fuels from the
political subdivision's bulk storage tank by a volunteer
service is considered a nontaxable use of the fuel by the
political subdivision and the fuel is placed directly into
the vehicle propulsion tank of a vehicle owned and operated
by the volunteer service.
(5) Prior to the volunteer service's withdrawal of tax-
free motor fuels from the political subdivision's bulk
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storage tank, the volunteer service and political subdivision
enters into a written agreement that contains:
(i) Controls and security procedures for the removal
of tax-free motor fuels from the bulk storage tank by the
volunteer service.
(ii) Recordkeeping compliance provisions similar to
this chapter's provisions that apply to distributors.
(d) Exempt entity use of commingled tax-free motor fuels.--
An exempt entity may withdraw tax-free motor fuels from a bulk
storage tank containing only commingled tax-free motor fuels if:
(1) The bulk storage tank is located on property owned
by one of the exempt entities that owns tax-free motor fuels
placed into the tank and the exempt entity owning the
property is the owner of the bulk storage tank.
(2) Each exempt entity commingling tax-free motor fuels
in the bulk storage tank contracts separately with a
distributor for purchase and delivery of tax-free motor fuels
placed into the tank.
(3) Each exempt entity owning tax-free motor fuels in
the bulk storage tank enters into an agreement with the
exempt entity that owns the bulk storage tank and the
agreement includes provisions pertaining to:
(i) Purchase from distributors of tax-free motor
fuels placed into the bulk storage tank.
(ii) Method of delivery of tax-free motor fuels into
the bulk storage tank.
(iii) Storage of tax-free motor fuels in the bulk
storage tank.
(iv) Removal of tax-free motor fuels from the bulk
storage tank.
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(v) Compliance with all of the recordkeeping
requirements for liquid fuels and fuels as provided in
this chapter.
(vi) Acknowledgment of joint and several liability
for loss, misuse or undocumented withdrawals of tax-free
motor fuels from the bulk storage tank.
(4) The exempt entity does not withdraw from the bulk
storage tank any amount of commingled tax-free motor fuels
for which the exempt entity has not previously paid a
distributor to deliver into the tank.
(5) Tax-paid motor fuels are not placed into a bulk
storage tank containing commingled fuels.
(6) Only exempt entities may own tax-free motor fuels
placed into or removed from the bulk storage tank containing
commingled tax-free motor fuels.
(7) All of the recordkeeping compliance provisions of
this chapter are satisfied by each entity owning commingled
tax-free motor fuels in the bulk storage tank.
(e) Distributors not liable.--A registered distributor
holding a permit that sold or delivered tax-free motor fuels to
an exempt entity under this section shall not be responsible for
the tax imposed by this chapter if:
(1) the purchaser subsequently sells or delivers the
tax-free motor fuels to another entity; or
(2) the purchaser subsequently uses the motor fuels for
a taxable purpose.
SECTION 1. TITLE 75 OF THE PENNSYLVANIA CONSOLIDATED
STATUTES IS AMENDED BY ADDING A SECTION TO READ:
§ 9004.1. POLITICAL SUBDIVISION AND VOLUNTEER SERVICE USE OF
TAX-FREE MOTOR FUELS.
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(A) LIMITATIONS.--AN EXEMPT ENTITY:
(1) MAY NOT BE A DISTRIBUTOR.
(2) MAY USE TAX-FREE MOTOR FUELS ONLY FOR ITS OWN
OFFICIAL BUSINESS PURPOSES.
(3) MAY NOT SELL OR DELIVER TAX-FREE MOTOR FUELS TO ANY
OTHER PERSON OR EXEMPT ENTITY.
(4) MAY PURCHASE AND TAKE DELIVERY OF TAX-FREE MOTOR
FUELS ONLY FROM A DISTRIBUTOR.
(5) SHALL COOPERATE WITH THE DEPARTMENT DURING AN
INVESTIGATION OR AUDIT RELATED TO THE USE, SALE OR DELIVERY
OF TAX-FREE MOTOR FUELS PROVIDED FOR IN THIS CHAPTER.
(B) PENALTY.--AN EXEMPT ENTITY THAT IMPROPERLY USES, SELLS
OR DELIVERS TAX-FREE MOTOR FUELS SHALL:
(1) PAY THE TAX IMPOSED UNDER SECTION 9004(B) (RELATING
TO IMPOSITION OF TAX, EXEMPTIONS AND DEDUCTIONS).
(2) PAY AN ADDITIONAL PENALTY EQUAL TO 100% OF THE TAX
IMPOSED UNDER SECTION 9004(B).
(3) BE SUBJECT TO ANY OTHER PENALTY, SUMMARY OFFENSE OR
MISDEMEANOR THAT MAY BE IMPOSED UPON DISTRIBUTORS WHO VIOLATE
THE PROVISIONS OF THIS CHAPTER.
(C) EXEMPT ENTITY USE OF COMMINGLED TAX-FREE MOTOR FUELS.--
AN EXEMPT ENTITY MAY WITHDRAW TAX-FREE MOTOR FUELS FROM A BULK
STORAGE TANK CONTAINING ONLY COMMINGLED TAX-FREE MOTOR FUELS IF
THE FOLLOWING APPLY:
(1) THE BULK STORAGE TANK IS LOCATED ON PROPERTY OWNED
BY ONE OF THE EXEMPT ENTITIES THAT OWNS TAX-FREE MOTOR FUELS
PLACED INTO THE TANK AND THE EXEMPT ENTITY OWNING THE
PROPERTY IS THE OWNER OF THE BULK STORAGE TANK.
(2) EACH EXEMPT ENTITY COMMINGLING TAX-FREE MOTOR FUELS
IN THE BULK STORAGE TANK CONTRACTS SEPARATELY WITH A
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DISTRIBUTOR FOR PURCHASE AND DELIVERY OF TAX-FREE MOTOR FUELS
PLACED INTO THE TANK.
(3) EACH EXEMPT ENTITY OWNING TAX-FREE MOTOR FUELS IN
THE BULK STORAGE TANK ENTERS INTO AN AGREEMENT WITH THE
EXEMPT ENTITY THAT OWNS THE BULK STORAGE TANK AND THE
AGREEMENT INCLUDES PROVISIONS PERTAINING TO:
(I) PURCHASE FROM DISTRIBUTORS OF TAX-FREE MOTOR
FUELS PLACED INTO THE BULK STORAGE TANK;
(II) METHOD OF DELIVERY OF TAX-FREE MOTOR FUELS INTO
THE BULK STORAGE TANK;
(III) CONTROLS AND SECURITY PROCEDURES FOR THE
REMOVAL OF TAX-FREE MOTOR FUELS FROM THE BULK STORAGE
TANK BY THE VOLUNTEER SERVICE;
(IV) STORAGE OF TAX-FREE MOTOR FUELS IN THE BULK
STORAGE TANK;
(V) REMOVAL OF TAX-FREE MOTOR FUELS FROM THE BULK
STORAGE TANK;
(VI) COMPLIANCE WITH ALL OF THE RECORDKEEPING
REQUIREMENTS FOR LIQUID FUELS AND FUELS AS PROVIDED UNDER
THIS CHAPTER; AND
(VII) ACKNOWLEDGMENT OF JOINT AND SEVERAL LIABILITY
FOR LOSS, MISUSE OR UNDOCUMENTED WITHDRAWALS OF TAX-FREE
MOTOR FUELS FROM THE BULK STORAGE TANK.
(4) THE EXEMPT ENTITY DOES NOT WITHDRAW FROM THE BULK
STORAGE TANK ANY AMOUNT OF COMMINGLED TAX-FREE MOTOR FUELS
FOR WHICH THE EXEMPT ENTITY HAS NOT PREVIOUSLY PAID A
DISTRIBUTOR TO DELIVER INTO THE TANK, EXCEPT AS PROVIDED FOR
VOLUNTEER SERVICES UNDER SUBSECTION (D).
(5) TAX-PAID MOTOR FUELS ARE NOT PLACED INTO A BULK
STORAGE TANK CONTAINING COMMINGLED TAX-FREE MOTOR FUELS.
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(6) ONLY EXEMPT ENTITIES MAY OWN TAX-FREE MOTOR FUELS
PLACED INTO OR REMOVED FROM THE BULK STORAGE TANK CONTAINING
COMMINGLED TAX-FREE MOTOR FUELS.
(7) ALL OF THE RECORDKEEPING COMPLIANCE PROVISIONS OF
THIS CHAPTER ARE SATISFIED BY EACH ENTITY OWNING COMMINGLED
TAX-FREE MOTOR FUELS IN THE BULK STORAGE TANK.
(D) CONDITIONS ON USE OF MOTOR FUELS TRANSFERRED TO
VOLUNTEER SERVICES FROM POLITICAL SUBDIVISIONS.--A VOLUNTEER
SERVICE MAY USE TAX-FREE MOTOR FUELS TRANSFERRED TO THE
VOLUNTEER SERVICE FROM A POLITICAL SUBDIVISION IF THE FOLLOWING
APPLY:
(1) THE POLITICAL SUBDIVISION'S BULK STORAGE TANK FROM
WHICH THE VOLUNTEER SERVICE REMOVES TAX-FREE MOTOR FUELS
CONTAINS ONLY TAX-FREE MOTOR FUELS THAT ARE EITHER OWNED
EXCLUSIVELY BY THE POLITICAL SUBDIVISION OR OWNED BY BOTH THE
POLITICAL SUBDIVISION AND ONE OR MORE VOLUNTEER SERVICES
PURSUANT TO A VALID COMMINGLING AGREEMENT AS PROVIDED FOR
UNDER SUBSECTION (C)(3).
(2) THE VOLUNTEER SERVICE PROVIDES SERVICES TO THE
POLITICAL SUBDIVISION AND THE RESIDENTS OF THE POLITICAL
SUBDIVISION.
(3) THE VOLUNTEER SERVICE TAKES DELIVERY OF THE MOTOR
FUEL DIRECTLY FROM A BULK STORAGE TANK OWNED BY THE POLITICAL
SUBDIVISION.
(4) TAX-FREE MOTOR FUELS WITHDRAWN FROM THE POLITICAL
SUBDIVISION'S BULK STORAGE TANK BY A VOLUNTEER SERVICE MUST
BE PLACED DIRECTLY INTO THE VEHICLE PROPULSION TANK OF A
VEHICLE OWNED AND OPERATED BY THE VOLUNTEER SERVICE.
(E) DEFINITIONS.--THE FOLLOWING WORDS AND PHRASES WHEN USED
IN THIS SECTION SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS
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SUBSECTION UNLESS THE CONTEXT CLEARLY INDICATES OTHERWISE:
"EXEMPT ENTITY." A POLITICAL SUBDIVISION OR VOLUNTEER
SERVICE IN ACCORDANCE WITH SECTION 9004(E).
"MOTOR FUELS." LIQUID FUELS OR FUELS. THE TERM DOES NOT
INCLUDE ALTERNATIVE FUELS.
"POLITICAL SUBDIVISION." A COUNTY, CITY, BOROUGH,
INCORPORATED TOWN, TOWNSHIP, SCHOOL DISTRICT, VOCATIONAL SCHOOL
DISTRICT OR COUNTY INSTITUTION DISTRICT.
"TAX-FREE MOTOR FUELS." MOTOR FUELS UPON WHICH THE OIL
COMPANY FRANCHISE TAX UNDER 9004(B) HAS NOT BEEN IMPOSED.
"VOLUNTEER SERVICE." A VOLUNTEER FIRE COMPANY, VOLUNTEER
AMBULANCE SERVICE OR VOLUNTEER RESCUE SQUAD.
Section 3 2. Section 9008 of Title 75 is amended by adding
subsections to read:
§ 9008. Examination of records and equipment.
* * *
(c) Consumer protection.--Notwithstanding subsection (a) or
(b) or section 731 of the act of April 9, 1929 (P.L.343,
No.176), known as The Fiscal Code, incorrect liquid fuel, fuel
or alternative fuel composition information, including octane
values, discovered by the department upon examination of storage
tank contents or related records may be disclosed to an
appropriate enforcement authority for investigation.
(d) Public safety.-- Notwithstanding subsection (a) or (b) or
section 731 of The Fiscal Code, any suspected violation that
could pose a threat to public safety discovered by the
department during an examination authorized by this section may
be disclosed to an appropriate enforcement authority for
investigation.
Section 4 3. This act shall take effect immediately.
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