An Act To Eliminate the Annual Indexing of Fuel Tax Rates
Maine Legislature, Session 125, LD 0383
Committee: Taxation
Sponsors: CEBRA, THOMAS, COLLINS
Amends: 36 MRSA §3203, 36 MRSA §3208

Legislative Document 
No. 383 
H.P. 309 
House of Representatives, February 8, 2011 
An Act To Eliminate the Annual Indexing of Fuel Tax Rates 
(EMERGENCY) 
Reference to the Committee on Taxation suggested and ordered printed. 
HEATHER J.R. PRIEST 
Clerk 
Presented by Representative CEBRA of Naples. 
Cosponsored by Senator THOMAS of Somerset and 
Senator: COLLINS of York. 
Emergency preamble. Whereas, acts and resolves of the Legislature do not 
become effective until 90 days after adjournment unless enacted as emergencies; and 
Whereas, indexing of the motor fuel tax rate will occur July 1, 2011 unless this bill 
takes effect before that date; and 
Whereas, in the judgment of the Legislature, these facts create an emergency within 
the meaning of the Constitution of Maine and require the following legislation as 
immediately necessary for the preservation of the public peace, health and safety; now, 
therefore, 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  36 MRSA §3203, sub-§1-B, as amended by PL 2009, c. 413, Pt. W, §2 
and affected by §6, is further amended to read: 
1-B.  Generally; rates.  Except as provided in section 3204-A, beginning July 1, 
2008 and ending June 30, 2009, 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 29.6¢ per gallon.  Beginning 
July 1, 2009, 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 30.7¢ per gallon.  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 1st of each year as indexed under section 3321.  A biodiesel 
blend containing less than 90% biodiesel fuel is subject to the rate of tax imposed on 
diesel. 
A.  This paragraph establishes the applicable BTU values and tax rates based on 
gasoline gallon equivalents. 
Fuel type based on gasoline BTU content per gallon or 
gasoline gallon equivalent 
Tax rate formula (BTU 
value fuel/BTU value 
gasoline) x base rate 
gasoline 
Gasoline 
115,000 
100% x base rate 
Propane 
84,500 
73% x base rate 
Compressed Natural Gas 
(CNG) 
115,000 
100% x base rate 
Methanol 
56,800 
49% x base rate 
Ethanol 
76,000 
66% x base rate 
Hydrogen 
115,000 
100% x base rate 
B.  This paragraph establishes the applicable BTU values and tax rates based on 
distillate gallon equivalents. 
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. 2.  36 MRSA §3208, first ¶, as amended by PL 2007, c. 438, §78, is further 
amended to read: 
Every user subject to the tax imposed by section 3203 is entitled to a credit on the 
tax, equivalent to the then current rate of taxation per gallon imposed by section 3203 as 
adjusted pursuant to section 3321, on all special fuel purchased by that user from a 
supplier or retailer licensed in accordance with section 3204 upon which the tax imposed 
by section 3203 has been paid.  Evidence of the payment of that tax, in a form required by 
or satisfactory to the State Tax Assessor, must be furnished by each user claiming the 
credit.  When the amount of the credit to which any user is entitled for any quarter 
exceeds the amount of the tax for which that user is liable for the same quarter, the excess 
may be allowed as a credit on the tax for which that user would be otherwise liable for 
another quarter or quarters.  Upon application to the assessor, the excess may be refunded 
if the applicant has paid to another state or province under a lawful requirement of that 
jurisdiction a tax similar in effect to the tax imposed by section 3203 on the use or 
consumption of that fuel outside the State, at the same rate per gallon that tax was paid in 
this State, but in no case to exceed the then current rate per gallon of the tax imposed by 
section 3203 as adjusted pursuant to section 3321. Upon receipt of the application the 
assessor, if satisfied after investigation that a refund is justified, shall so certify to the 
State Controller.  The refund must be paid out of the Highway Fund.  This credit lapses at 
the end of the last quarter of the year following that in which the credit arose. 
Hydrogen Compressed 
Natural Gas 
115,000 
100% x base rate 
Fuel type based on diesel 
BTU content per gallon or 
gallon equivalent 
Tax rate formula (BTU 
value fuel/BTU value 
diesel) x base rate diesel 
Diesel 
128,400 
100% x base rate 
Liquified Liquefied Natural 
Gas (LNG) 
73,500 
57% x base rate 
Biodiesel 
118,300 
92% x base rate 
Sec. 3.  36 MRSA c. 465, as amended, is repealed. 
Emergency clause.  In view of the emergency cited in the preamble, this 
legislation takes effect when approved. 
SUMMARY 
This bill repeals the annual indexing of motor fuel tax rates and deletes cross-
references.