ARTICLE 22 SUBSTITUTE A

Relating To Fuel Use Reporting Law

SECTION 1. Sections 31-36.1-1, 31-36.1-2, 31-36.1-3, 31-36.1-4, 31-36.1-5, 31-36.1-6, 31-36.1-7, 31-36.1-8, 31-36.1-10, 31-36.1-11, 31-36.1-12, 31-36.1-13, 31-36.1-14, 31-36.1-15, 31-36.1-16, 31-36.1-17 and 31-36.1-18 of the General Laws in Chapter 31-36.1 entitled "FUEL USE REPORTING LAW" are hereby amended to read as follows:

31-36.1-1. Statement of purpose. -- The purpose of this chapter is to assure the payment of tax on fuel consumed by motor carriers in propelling qualified motor vehicles on the public highways in Rhode Island.

31-36.1-2. Definitions. -- Terms used in this chapter shall be construed to have the meanings provided for in section 31-36-1 and as follows:

(1) "Administrator" means the tax administrator.

(2) "Bond" means:

(i) A bond duly executed by a motor carrier as principal with a corporate surety qualified under the provisions of the laws of this state, which bond shall be payable to this state, conditioned upon the basic performance of all requirements of this chapter, including the payment of all taxes, penalties and other obligations of the motor carrier arising out of this tax; or

(ii) A deposit with the state treasury by the motor carrier under any terms and conditions that the administrator may prescribe, in like amount of lawful money of the United States or bonds, or other obligations of the United States, this state, or any county of this state, of an actual market value not less than the amount so fixed by the administrator.

(3) "Jurisdiction" means a state of the United States of America, the District of Columbia, a province or territory of Canada, or a state of the United Mexican States.

(4) "Motor carrier" means every person, association of persons, firm, or corporation, or any other legal entity, wherever resident or located, who operates or causes to be operated covered qualified motor vehicles on the public highways of this state.

(3) (i) (5) "Covered Qualified motor vehicles" means a motor vehicle that is used, designed or maintained for transportation of persons or property and that:

(A) Has Having two axles and a gross vehicle weight or registered gross vehicle weight exceeding twenty-six thousand pounds (26,000 lbs.) or 11,797 kilograms; or

(B) Has Having three (3) or more axles regardless of weight; or

(C) Is used in combination and the combined gross vehicle weight or registered gross vehicle weight, when the weight of such combination exceeds twenty-six thousand pounds (26,000 lbs.) or 11,797 kilograms gross vehicle or registered gross vehicle weight. Qualified motor vehicle does not include recreational vehicles.

(ii) "Covered motor vehicle" does not include a recreation vehicle that is used exclusively for personal pleasure, and not used in connection with any trade or business, by an individual.

(6) "Recreational vehicle" means vehicles such as motor homes, pickup trucks with attached campers, and buses when used exclusively for personal pleasure by an individual. In order to qualify as a recreational vehicle, the vehicle shall not be used in connection with any business endeavor.

(5) (7) "Use" means the consumption by a motor carrier of fuels in the propulsion of covered qualified motor vehicles over the highways of this state unless the fuel consumed is specifically excluded by law from the tax.

31-36.1-3. Motor carrier license and identification -- Temporary licenses. -- (a) Each carrier operating a qualified motor vehicle in two (2) or more jurisdictions shall apply to the administrator for a motor carrier fuel use license upon forms approved by the administrator and shall upon application, pay a license fee of ten dollars ($10.00). The license shall remain in effect until surrendered or revoked under the provisions of section 31-36.1-4. The tax administrator shall, in addition, provide identification devices in the quantity requested to each licensed motor carrier. One such device must be displayed on the left side exterior portion of each side of the cab of each covered qualified motor vehicle. The fee for each such identification device shall be ten dollars ($10.00) per qualified motor vehicle. Identification devices shall be issued each year by the administrator and shall be displayed on or before April March 1 provided, that this requirement shall only be enforced ninety (90) days following the availability of the identification devices in the office of the administrator.

(b) The administrator may refuse to issue a license if the application for it:

(1) Is filed by a motor carrier whose license at any time theretofore has been revoked by the administrator.

(2) Contains any misrepresentation, misstatement, or omission of material information required by the application.

(3) Is filed by some other motor carrier as a subterfuge of the real motor carrier in interest whose license or registration previously has been revoked for cause by the administrator.

(4) Is filed by any motor carrier who is delinquent in the payment of any fee, tax, penalty, or other amount due the administrator for its account.

The finding may be made by the administrator after granting the applicant a hearing of which the applicant shall be given ten (10) days notice in writing, and in which the applicant shall have the right to appear in person or by counsel and present testimony.

(c) Temporary license. - Upon application to the administrator and payment of a fee of ten dollars ($10.00), an unlicensed motor carrier may obtain a temporary license which will authorize one covered qualified motor vehicle to be operated on the highways of this state, for a period not to exceed ten (10) days, without compliance with the fees imposed at in this section, the tax imposed at in section 31-36.1-5, and the bond required at in section 31-36.1-6.

(d) The administrator may adopt rules and regulations specifying the conditions under which temporary licenses will be issued and providing for their issuance.

31-36.1-4. Motor carrier license and identification revocation. -- The administrator may revoke the license and identification devices of a motor carrier which refuses or neglects to comply with any provision of this chapter or any regulation pursuant to this chapter. Before revoking the license and identification devices, the administrator shall send notice by registered or certified mail to the licensee at his or her address of record ordering the licensee to appear in the office of the administrator on a date not less than ten (10) days after mailing the notice, and show cause why the licensee's license and identification devices should not be revoked.

31-36.1-5. Imposition of tax. -- There is levied and imposed upon motor carriers a tax at the rate specified in section 31-36-7, including the additional excise tax provision in it, on the use of fuel for the propulsion of covered qualified motor vehicles on the public highways within this state. The tax, with respect to fuel purchased instate, shall be paid at the time of purchase as provided in chapter 36 of this title. The tax, with respect to fuel purchased outside this state shall be paid when the quarterly reports returns required in section 31-36.1-11 are filed with the administrator.

31-36.1-6. Bond requirement. -- (a) The license required by section 31-36.1-3 shall not be issued until the applicant has filed with the administrator a surety bond on which the applicant shall be the principal obligor and the state be the obligee. The bond shall be in the sum of approximately two (2) times the highest quarterly fuel tax estimated by the administrator, but not exceeding ten thousand dollars ($10,000). The bond shall be conditioned upon the motor carrier faithfully complying with the provisions of this chapter, and the prompt filing of true reports and payments by the motor carrier of all fuel taxes and fees due under this chapter, together with all penalties and interest on it. The administrator may accept cash or other obligations as defined in section 31-36.1-2(2) in lieu of security.

(b) If the liability upon a bond filed by a motor carrier with the administrator becomes discharged or reduced, whether by judgment rendered, payment made, or otherwise, the administrator may require the motor carrier to file a new bond, with satisfactory sureties, in the same amount, and upon failure to do so, the administrator shall immediately revoke the license of that motor carrier.

(c) If a motor carrier fails or refuses to furnish additional bond as required by the administrator within thirty (30) days after written notice mailed to this address of record in the office of the administrator, its license shall immediately be revoked.

(d) Notwithstanding provisions to the contrary, the tax administrator, pursuant to rules and regulations adopted by the tax administrator, in his or her discretion, may waive the bond requirements set forth in this section. require a motor carrier to post a bond. Such bond shall be consistent with the provisions of the International Fuel Tax Agreement.

31-36.1-7. Discharge of surety. -- Any surety on a bond furnished by a motor carrier shall be discharged from any liability to the state accruing on the bond after expiration of sixty (60) days from the date which the surety shall have filed with the administrator a written request to be released and discharged, but not from liability already accrued before the expiration of the sixty (60) day period. The administrator, upon receipt of the request, shall promptly notify the motor carrier who furnished the bond in question. Unless the motor carrier, prior to the expiration of the sixty (60) day period, files a new bond satisfactory to the administrator, the administrator shall immediately revoke the motor carrier's license and identification devices.

31-36.1-8. Records. -- (a) Each motor carrier shall make available in this state and retain for a period of not less than three (3) four (4) years, any records that may be prescribed and in the manner required by the administrator or the International Fuel Tax Agreement, as are reasonably necessary to substantiate the quarterly reports returns required by section 31-36.1-11. The administrator or the administrator's agents may examine the books, papers, records, and equipment of any motor carrier during normal business hours in order to determine whether the special motor fuel taxes due under this chapter are properly reported and paid. If the records required by this section are not maintained instate, the motor carrier shall either produce the records at a point instate for audit purposes, or provide transportation and reasonable substance for an auditor to audit the records at that point where the records are maintained by the motor carrier.

(b) Each sale of fuel shall be recorded upon a pre-printed serial numbered invoice. A sales invoice shall contain the following information:

(1) The name and address of the seller;

(2) The name of the purchasing motor carrier;

(3) The date of the sale or delivery; and

(4) The number of gallons of fuel purchased, the price per gallon, the amount of fuel tax collected, and the total amount of the sale.

(c) The sale invoice shall, upon payment by the purchaser, constitute a receipt for the amount of special fuels tax collected by the seller. A copy of the invoice shall be retained by the purchaser for not less than three (3) years. It shall be the responsibility of the seller to supply proper receipts in accordance with this section.

31-36.1-10. Calculation of amount of fuel used in state. -- The amount of fuel used in the operations of any motor carrier on highways within this state, shall be the proportion of the total amount of the fuel used in its entire operations within and without this state, as the total number of miles traveled on highways within this state bears to the total number of miles traveled within and without this state.

31-36.1-11. Report requirements. – Return requirements. -- (a) Every motor carrier subject to the tax imposed by this chapter shall on or before the last day of April, July, October, and January of every year make to the administrator any reports returns of its operations during the quarter ending the last day of the preceding month that the administrator may require and any other reports from time to time that the administrator may deem necessary.

(b) The administrator by regulation may exempt from the quarterly reporting requirements of this section those motor carriers operating solely within Rhode Island, and require in that instance an annual affidavit, if in its discretion the enforcement of this chapter would not be adversely affected by the regulation.

(c) The administrator is authorized to exempt from the quarterly reporting requirements of this section, and require in those instances an annual affidavit of motor carriers licensed in this state who perform substantially all of their travel in this state provided the administrator is assured that a sufficient amount of fuel is purchased in this state which is commensurate with the motor carrier's operations on highways within this state.

(d) The administrator is authorized to exempt from the quarterly reporting requirements of this section those motor carriers whose total tax in a quarter is less than fifty dollars ($50.00).

31-36.1-12. Inspection of books and records by administrator -- Agreements with other jurisdictions for cooperative audits. -- (a) The tax administrator and the administrator's authorized agents and representatives may, at any reasonable time, inspect the books and records of any motor carrier subject to the tax imposed by this chapter. The administrator may enter into agreements with the appropriate authorities of other jurisdictions having statutes similar to this chapter for the cooperative audit of motor carrier reports and returns.

(b) In performing the audit or part of it, the officers and employees of the other jurisdiction or jurisdictions shall be deemed authorized agents of this state for that purpose, and the audits or parts of it shall have the same effect as similar audits or parts of them made by the department division of taxation.

31-36.1-13. Computation of tax by administrator. -- (a) If the administrator is not satisfied with any report or return of a motor carrier subject to the tax imposed by this chapter, or with the amount of the tax to be paid by the motor carrier, the administrator may compute and assess the amount of the tax on the basis of facts contained in the report and return or on the basis of any other information available to the administrator. One or more deficiency assessments may be made with respect to any return for the tax imposed by this chapter.

(b) The amount of the deficiency assessment, exclusive of penalties, shall bear interest at the annual rate provided by section 44-1-7, as amended, from the last day of the month succeeding the quarterly period for which the amount of any portion of it should have been returned until the date of payment.

(c) If any part of the deficiency for which a deficiency assessment is made is due to negligence or intentional disregard of the provisions of this chapter, a penalty of ten percent (10%) of the amount of the deficiency assessment shall be added to it. If any part of the deficiency for which a deficiency assessment is made is due to fraud or intent to evade the provisions of this chapter, a penalty of twenty-five percent (25%) fifty percent (50%) of the amount of the deficiency assessment shall be added to it.

(d) The administrator shall give written notice to any motor carrier of the deficiency assessment. If the notice is served by mail, it shall be addressed to the motor carrier at the address appearing in the records of the department division of taxation. Except in the case of fraud, intent to evade the provisions of this chapter, or failure to submit a return, the notice of a deficiency assessment shall be mailed within three (3) years after the last day of the month following the quarterly period for which the amount is assessed or within three (3) years after the return for the period is filed, whichever is later.

(e) If, prior to the expiration of the time prescribed in subsection (d) of this section for the mailing of the notice of a deficiency assessment, the taxpayer has consented in writing to the mailing of notice after that time, the notice may be mailed at any time prior to the expiration of the period agreed upon for the mailing. The period agreed upon may be extended by subsequent agreements in writing made before the expiration of the period.

31-36.1-14. Average consumption. -- In the absence of adequate records or other evidence satisfactory to the administrator, showing the number of miles operated by a motor carrier's covered qualified motor vehicles per gallon of motor fuel, the motor vehicle shall be deemed to have consumed one gallon of motor fuel for each five (5) four (4) miles operated, as prescribed by the International Fuel Tax Agreement.

31-36.1-15. Credit on tax -- Refund. -- (a) Every motor carrier shall be entitled to a credit on the tax equivalent to the rate per gallon of the tax in effect under chapter 36 of this title, including the additional excise tax provision in it, on all motor fuel purchased by the carrier within this state for use in its operations without this state and upon which motor fuel the tax imposed by the laws of this state has been paid by the carrier. Evidence of the payment of the tax in any form that may be required by, or is satisfactory to, the state tax administrator, shall, be furnished by the carrier claiming the credit allowed in this chapter.

(b) When the amount of the credit provided in this chapter, to which any motor carrier is entitled for any quarter exceeds the amount of the tax for which the carrier is liable for the same quarter, the excess may, under the regulations of the tax administrator and the International Fuel Tax Agreement be allowed as a credit on the tax for which the carrier would be otherwise liable for any of the four (4) eight (8) succeeding quarters.

(c) Whenever any motor carrier has incurred liability to another state in any quarter for a tax, similar in effect to the tax provided in this chapter, on the use or consumption in the state, during the quarter, of motor fuel purchased in Rhode Island, the carrier may file, within one year from the due date for the quarter, an application verified and presented, in accordance with regulations promulgated by the tax administrator and supported by any evidence that may be satisfactory to the tax administrator, for a refund of the excess to the extent of the payment to the other state, but in no case to exceed the rate per gallon of the Rhode Island motor fuel tax which is currently in effect. The licensee shall receive, on request, a cash refund of any accumulated credits. All requests for refunds of credit balances must be filed in writing.

31-36.1-16. Reciprocity. -- (a) The provisions of this chapter shall not apply to covered motor vehicles bearing the registration plates of any other state which does not impose a tax, license, or fee, upon covered motor vehicles bearing valid registration plates of this state. The administrator is authorized to make reciprocal agreements with the proper officials of any other state imposing any such tax, license, or fee, providing for the reduction or relief from the tax imposed by this chapter upon covered motor vehicles bearing valid registration plates of the other state, in exchange for the reduction or relief from the tax, license, or fee imposed by the other state upon covered motor vehicles bearing valid registration plates of this state.

(b) The tax administrator may enter the International Fuel Tax Agreement or other cooperative compacts or agreements with other states or jurisdictions to permit base state or base jurisdiction licensing of persons using motor fuel in this state. Those agreements may provide for the cooperation and assistance among member states in the administration and collection of motor fuel tax, including, but not limited to, exchanges of information, auditing and assessing of interstate carriers and suppliers, and any other activities necessary to further uniformity.

31-36.1-17. Penalties. -- (a) Any motor carrier failing to secure or display upon demand the license or identification device required in section 31-36.1-3, or under the International Fuel Tax Agreement shall be guilty of a civil violation and subject to a fine not exceeding: (1) seventy-five dollars ($75) for the first offense and (2) not exceeding one hundred dollars ($100) for subsequent offenses. Any motor carrier willfully violating any other provisions of this chapter shall be deemed guilty of a civil violation and subject to a fine not exceeding one hundred dollars ($100) for the first offense and not exceeding five hundred dollars ($500) for subsequent offenses.

(b) Filing of a false statement to obtain credit or refund. Any person who willfully and knowingly makes a false statement orally, in writing, or in the form of a receipt for the sale of motor fuel, for the purpose of obtaining, attempting to obtain, or to assist any other person, partnership, or corporation to obtain or attempt to obtain a credit or refund or reduction of liability for taxes under this chapter, shall be fined not less than five thousand dollars ($5,000) nor more than ten thousand dollars ($10,000), or be imprisoned not more than one year, or both.

(c) Failure to file report return or pay tax. - When any motor carrier fails to file a report return within the time prescribed by this chapter for the filing of it or fails to pay the amount of taxes due when they are payable, a penalty of ten percent (10%) or ten dollars ($10.00) fifty dollars ($50.00), whichever is greater, shall be added to the amount of the tax due, and the penalty shall immediately accrue, and the tax shall bear interest at the annual rate provided by section 44-1-7, as amended, until the tax is paid. The tax administrator may waive all or part of the penalties provided in this chapter when it is proved to the tax administrator's satisfaction that the failure to file the report return or pay the taxes on time was due to reasonable cause.

31-36.1-18. Disposition of proceeds. -- All money collected under the provisions of this chapter shall be used in accordance with the provisions of section 31-36-20. deposited as general revenues.

SECTION 2. This article shall take effect on June 30, 2006.