An Act To Improve the Method of Taxing Natural Gas for Highway Use
Maine Legislature, Session 123, LD 0531
Committee Amendment CA_A_H653 (House)
Amends: 36 MRSA §3203

COMMITTEE AMENDMENT" A" to H.P. 409, L.D. 531, Bill, "An Act To 
Improve the Method of Taxing Natural Gas for Highway Use" 
Amend the bill by striking out everything after the enacting clause and inserting the 
following: 
'Sec. 1. 36 MRSA §3203, sub-§l, as amended by PL 2001, c. 688, §5, is further 
amended to read: 
1. Generally. Except as provided in section 3204-A, before July 1, 2008 an excise 
tax is levied and imposed on all suppliers of distillates sold, on all retailers of low-energy 
fuel sold and on all users of special fuel used in this State for each gallon of distillate at 
the rate of 23¢ per gallon and for each gallon of low-energy fuel based on the British 
Thermal Unit, referred to in this subsection as "BTU," energy content for each fuel as 
compared to gasoline. In the case of distillates, the tax rate provided by this section is 
subject to annual inflation adjustment pursuant to section 3321. Applicable BTU values 
are as follows. 
Fuel type 
Gasoline 
Methanol (M85) 
Ethanol (E85) 
Propane 
Compressed 
Natural Gas 
BTU content per 
Formula (BTU 
Tax rate 
gallon 
value fuel/BTU 
value gasoline) 
x tax rate 
115,000 
65,530 
81,850 
84,500 
100,000 (BTU 
per 100 standard 
cubic feet) 
gasoline 
100% x 22¢ 
57% x 22¢ 
71% x 22¢ 
73% x 22¢ 
87% x 22¢ 
22¢ per gallon 
as authorized in 
section 2903 
12.5¢ per gallon 
15.6¢ per gallon 
16¢ per gallon 
9. 1 ¢ per 1 00 
standard cubic 
feet 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT" A 
.. to H.P. 409, L.D. 531 
Sec. 2. 36 MRSA §3203, sub-§l-B is enacted to read: 
I-B. Generally; rates beginning July 1,2008. Except as provided in section 3204-
A, beginning July 1, 2008 an excise tax is levied and imposed on all suppliers of 
distillates sold, on all retailers of low-energy fuel sold and on all users of special fuel 
used in this State for each gallon of distillate at the rates provided in this subsection. Tax 
rates for each gallon of low-energy fuel are based on the British Thermal Unit, referred to 
in this subsection as "BTU," energy content for each fuel as based on gasoline gallon 
equivalents or the comparable measure for distillates. The gasoline gallon equivalent is 
the amount of alternative fuel that equals the BTU energy content of one gallon of 
gasoline. In the case of distillates, the tax rate provided by this section is subject to 
annual inflation adjustment pursuant to section 3321. For purposes of this subsection, 
"base rate" means the rate in effect for gasoline or diesel on July 1 st of each year as 
indexed under section 3321. 
A. This paragraph establishes the applicable BTU values and tax rates based on 
gasoline gallon equivalents. 
Fuel type based on 
BTU content per gallon or 
Tax rate formula (BTU 
gasoline 
gasoline gallon equivalent 
value fuel/BTU value 
Gasoline 
Propane 
Compressed Natural Gas 
(CNG) 
Methanol 
Ethanol 
Hydrogen 
Hydrogen Compressed 
Natural Gas 
gasoline) x base rate 
gasoline 
115,000 
00% x base rate 
84,500 
% x base rate 
115,000 
00% x base rate 
56,800 
49% x base rate 
76,000 
66% x base rate 
115,000 
00% x base rate 
115,000 
00% x base rate 
B. This paragraph establishes the applicable BTU values and tax rates based on 
distillate gallon equivalents. 
Fuel type based on diesel 
Diesel 
Liquified Natural Gas 
(LNG) 
Biodiesel 
BTU content per gallon or 
Tax rate formula (BTU 
gallon equivalent 
value fuel/BTU value 
diesel) x base rate diesel 
128,400 
100% x base rate 
73,500 
57% x base rate 
118,300 
92% x base rate 
COMMITTEE AMENDMENT 
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1 
COMMITTEE AMENDMENT" A 
"to H.P. 409, L.D. 531 
C. The conversion factors established in this paragraph must be used in converting to 
gasoline gallon equivalents. 
(1) For compressed natural gas, BTUs per 100 standard cubic feet is 93,000, and 
there are 123.66 standard cubic feet per gasoline gallon equivalent. 
(2) For hydrogen, BTUs per 100 standard cubic feet is 27,000, and there are 
425.93 standard cubic feet per gasoline gallon equivalent. 
(3) For hydrogen compressed natural gas, BTUs per 100 standard cubic feet is 
79,800, and there are 144.11 standard cubic feet per gasoline gallon equivalent. 
Sec. 3. 36 MRS A §3321, sub-§l, as enacted by PL 2001, c. 688, §8, is amended 
to read: 
1. Generally. Beginning in 2003, and each calendar year thereafter, the excise tax 
imposed upon internal combustion engine fuel pursuant to section 2903, subsection 1 and 
the excise tax imposed upon distillates pursuant to section 3203, sHbseetion subsections 1 
and I-B are subject to an annual rate of adjustment pursuant to this section. On or about 
February 15th of each year, the State Tax Assessor shall calculate the adjusted rates by 
multiplying the rates in effect on the calculation date by an inflation index as computed in 
subsection 2. The adjusted rates must then be rounded to the nearest III 0 of a cent and 
become effective on the first day of July immediately following the calculation. The 
assessor shall publish the annually adjusted fuel tax rates and shall provide all necessary 
forms and reports to suppliers, distributors and retail dealers. 
Sec. 4. Transition. For taxes imposed during the fiscal year beginning July 1, 
2008, the State Tax Assessor is authorized to calculate tax rates under the Maine Revised 
Statutes, Title 36, section 3203, subsection 1-B in a manner that most closely reflects the 
relative British Thermal Unit values between the fuel types listed in that subsection based 
on the tax rates for gasoline and diesel on July 1, 2008. 
This section applies 
retroactively. ' 
SUMMARY 
This amendment changes the formulas for calculation of fuel tax rates on alternative 
fuels to reflect the energy content of the alternative fuel relative to the conventional 
petroleum fuels being displaced. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 01/03/08 frac 
Net Cost (Savings) 
General Fund 
Highway Fund 
Revenue 
General Fund 
Highway Fund 
LD 531 
LR 1228(02) 
An Act To Improve the Method of Taxing Natural Gas for Highway Use 
Fiscal Note for Bill as Amended by Committee Amendment" A" 
Committee: Taxation 
Fiscal Note Required: Yes 
Fiscal Note 
2007-08 
$0 
$0 
2008-09 
$7 
$20,875 
Projections 
2009-10 
$7 
$22,962 
Other Special Revenue Funds 
$0 
$0 
$0 
($7) 
($20,875) 
($118) 
($7) 
($22,962) 
($130) 
Fiscal Detail and Notes 
Projections 
2010-11 
$8 
$25,259 
($8) 
($25,259) 
($144) 
The Highway Fund revenue loss associated with changes in the fuel tax rate for alternative fuels is $20,875 in fiscal 
year 2008-09. The General Fund revenue loss is $7 in fiscl year 2008-09. 
LR 1228(02) - Fiscal Note - Page I of I