HOUSE BILL No. 4235

 

February 8, 2005, Introduced by Reps. Nitz, Vander Veen, Kathleen Law, Mayes, Ball, Pearce and Kahn and referred to the Committee on Agriculture.

 

     A bill to amend 1984 PA 44, entitled

 

"Motor fuels quality act,"

 

by amending sections 2, 3, and 5 (MCL 290.642, 290.643, and

 

290.645), section 2 as amended by 1993 PA 236 and sections 3 and 5

 

as amended by 2002 PA 13.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 2. As used in this act:

 

     (a) "Additive" means any substance in gasoline other than

 

gasoline but does not include approved blending components, other

 

than lead, sodium, and phosphate components, introduced at

 

refineries or terminals as octane or product quality enhancers in

 

quantities of less than 1% of volume.

 

     (b) "American society for testing and materials" means an


 

international nonprofit scientific and educational society devoted

 

to the promotion of knowledge of the materials of engineering and

 

the standardization of specification and methods of testing.

 

     (c) "Antiknock index" or "AKI" means an index number arrived

 

at by adding the motor octane number and the research octane

 

number, then dividing by 2.

 

     (d) "Biodiesel" means a fuel composed of mono-alkyl esters of

 

long chain fatty acids derived from vegetable oils or animal fats,

 

and, in accordance with standards specified by the American society

 

for testing and materials, designated B100, and meeting the

 

requirements of D-6751, as approved by the department.

 

     (e)   (d)  "Blender" means a person who as an individual or

 

through his or her agent adds an oxygenate to a gasoline.

 

     (f)   (e)  "Bulk purchaser-end user" means a person who is an

 

ultimate consumer of gasoline and receives delivery of gasoline

 

into a storage tank of at least 550-gallon capacity substantially

 

under his or her control.

 

     (g)   (f)  "CARB" means the California air resources board.

 

     (h)   (g)  "Delivery vessel" means a tank truck, tank equipped

 

trailer, or a similar vessel used for the delivery of gasoline to a

 

dispensing facility.

 

     (i)   (h)  "Department" means the department of agriculture.

 

     (j) "Diesel fuel" means any liquid other than gasoline that is

 

capable of use as a fuel or a component of a fuel in a motor

 

vehicle that is propelled by a diesel-powered engine or in a

 

diesel-powered train.

 

     (k)   (i)  "Director" means the director of the department of


 

agriculture or his or her authorized representative.

 

     (l (j)  "Dispensing facility" means a site used for vehicle

 

gasoline refueling that is located in an area of this state that

 

has been designated as ozone nonattainment and classified as

 

moderate, serious, severe, or extreme by the E.P.A. pursuant to 40  

 

C.F.R.  CFR section 81.323, November 6, 1991. Dispensing facility

 

does not include a facility used exclusively for the refueling of

 

aircraft, watercraft, or vehicles that are designed for

 

agricultural purposes and used exclusively in agricultural

 

operations.

 

     (m)   (k)  "Dispensing unit" means a device designed for the

 

delivery of gasoline in which 1 nozzle equates to 1 dispensing

 

unit.

 

     (n)   (l)  "Distributor" means a person who purchases,

 

transports, or stores or causes the transportation or storage of

 

gasoline at any point between a gasoline refinery and a retail

 

outlet or bulk purchaser-end user facility.

 

     (o)   (m)  "E.P.A." means the United States environmental

 

protection agency.

 

     (p)   (n)  "Gasoline" means any fuel sold in this state that

 

is suitable for use in spark-ignition internal combustion engines,

 

and commonly or commercially known or sold as gasoline.

 

     (q)   (o)  "Leak" means liquid or vapor loss from the gasoline

 

dispensing system or stage I or stage II vapor-recovery system as

 

determined by visual inspection or functional testing.

 

     (r)   (p)  "Modification" means any change, removal, or

 

addition, other than an identical replacement, of any component


 

contained within a stage I or stage II vapor-recovery system. The

 

resultant modification must constitute an approved vapor-recovery

 

system.

 

     (s)   (q)  "Motor octane number" or "MON" means a knock

 

characteristic of gasoline determined by use of standard procedures

 

on a motor engine.

 

     (t)   (r)  "Operator" means a person who owns, leases,

 

operates, manages, supervises, or controls, directly or indirectly,

 

a gasoline-dispensing facility.

 

     (u)   (s)  "Oxygenate" means an oxygen-containing, ashless,

 

organic compound, such as alcohol or ether, that may be used as

 

fuel or fuel supplement.

 

     (v)   (t)  "Person" means an individual, sole proprietorship,

 

partnership, corporation, association, or other legal entity.

 

     (w)   (u)  "Refiner" means a person who owns, leases,

 

operates, controls, or supervises a refinery.

 

     (x)   (v)  "Refinery" means a plant at which gasoline or

 

diesel fuel is produced.

 

     (y)   (w)  "Research octane number" or "RON" means a knock

 

characteristic of gasoline determined by use of standard procedures

 

on a research engine.

 

     (z)   (x)  "Retail dealer" means a person who owns, leases,

 

operates, controls, or supervises a retail outlet.

 

     (aa)   (y)  "Retail outlet" means an establishment at which

 

gasoline is sold or offered for sale to the public.

 

     (bb)   (z)  "Rule" means a rule promulgated pursuant to the

 

administrative procedures act of 1969,  Act No. 306 of the Public


 

Acts of 1969, being sections 24.201 to 24.328 of the Michigan

 

Compiled Laws  1969 PA 306, MCL 24.201 to 24.328.

 

     (cc)   (aa)  "Stage I vapor-recovery system" means a vapor

 

tight collection system that is approved by the department and is

 

designed to capture the gasoline vapors displaced during delivery

 

into a stationary storage tank and to return not less than 90% of

 

the displaced vapors to the delivery vessel.

 

     (dd)   (bb)  "Stage II vapor-recovery system" means a

 

gasoline-dispensing system approved by the department that prevents

 

95% or more of the volatile organic compounds from being emitted

 

during gasoline refueling.

 

     Sec. 3. (1) The director shall establish standards pursuant to

 

this act to ensure the purity and quality of gasoline and diesel

 

fuel sold or offered for sale in this state.

 

     (2) The director shall establish standards for the amount and

 

type of additives allowed to be included in gasoline and diesel

 

fuel.

 

     (3) The director shall establish standards for the grading of

 

gasoline, including, but not limited to, subregular with a minimum

 

85 AKI, regular with a minimum 87 AKI and a minimum 82 MON,

 

midgrade 88 with a minimum 88 AKI and a minimum 82 MON, midgrade 89

 

with a minimum 89 AKI and a minimum 83 MON, premium with a minimum

 

90 AKI, premium 91 with a minimum 91 AKI, premium 92 with a minimum

 

92 AKI, premium 93 with a minimum 93 AKI, and premium 94 with a

 

minimum 94 AKI.

 

     (4) The director shall establish standards for Reid vapor

 

pressure as specified by the American society for testing and


 

materials, except as otherwise required to conform to federal or

 

state law. The director shall establish the Reid vapor pressure as

 

9.0 pounds per square inch (psi) for retail outlets during the

 

period beginning June 1 through September 15 of each year, except

 

for dispensing facilities where the director shall establish the

 

Reid vapor pressure as 7.8 psi in the year 1996 and thereafter. As

 

used in this subsection and section 10d, "Reid vapor pressure"

 

means the vapor pressure of gasoline or gasoline oxygenate blend as

 

determined by ASTM test method D323, standard test method for vapor

 

pressure of petroleum products (Reid method) or test method D4953,

 

standard test method for vapor pressure of gasoline and gasoline

 

oxygenate blends (dry method).

 

     (5) In establishing additive and grading standards the

 

director shall adopt the latest standards for gasoline established

 

by the American society for testing and materials and shall adopt

 

the latest standards for gasoline established by federal law or

 

regulation. The standards established by the director shall not

 

prohibit a gasoline blend that is permitted by a valid waiver

 

granted by the United States environmental protection agency

 

pursuant to the fuel or fuel additive waiver in section 211(f)(4)

 

of part A of title II of the clean air act,  chapter 360, 81 Stat.

 

502,  42  U.S.C.  USC 7545, and the ethanol waiver of 1.0 psi in

 

section 211(h)(4) of part A of title II of the clean air act,  

 

chapter 360, 81 Stat. 502,  42  U.S.C.  USC 7545, if the gasoline

 

blend meets all of the conditions set forth in the waiver.

 

Beginning June 1, 2003, the director shall not permit the use of

 

the additive methyl tertiary butyl ether (MTBE) in this state. The


 

director, in consultation with the department of environmental

 

quality, shall determine if the additive is likely to cause harmful

 

effects on the environment or public health within the state. By

 

June 1, 2002, the director, in consultation with the director of

 

the department of environmental quality, shall review the status of

 

the use of MTBE in this state. The review shall include the

 

following:

 

     (a) The amount of the additive methyl tertiary butyl ether

 

(MTBE) currently in use in gasoline in this state.

 

     (b) An estimate of the amount of MTBE that is imported in

 

gasoline transported into this state from other states or

 

countries.

 

     (c) Recommendations as to whether the June 1, 2003 prohibition

 

can be achieved and, if not, determine a more feasible date.

 

     (d) Any other information considered appropriate.

 

     (6) The director shall establish standards pursuant to this

 

act to ensure the purity and quality of diesel fuel sold or offered

 

for sale in this state. Beginning June 30, 2006, the director shall

 

determine the annual capacity for the production of biodiesel fuel

 

in this state and, within 30 days of making the determination,

 

shall publish the annual capacity for the production of biodiesel

 

fuel in this state. Beginning January 1, 2007, within 30 days of

 

the publication that the annual capacity for the production of

 

biodiesel fuel in this state is greater than 12,000,000 gallons,

 

standards for diesel fuel sold or offered for sale in this state

 

shall include a requirement that the composition of diesel fuel

 

sold in this state include at least 2% biodiesel. This minimum


 

content requirement does not apply to diesel fuel sold for use in

 

railroad locomotives or to diesel fuel sold for use in off-road

 

taconite and copper mining equipment and machinery.

 

     (7)   (6)  Standards established pursuant to this section

 

shall be by rules promulgated pursuant to the administrative

 

procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.

 

     Sec. 5. (1) Except as provided by federal law or regulation,

 

in the manufacture of gasoline or diesel fuel at any refinery in

 

this state, a refiner shall not manufacture gasoline or diesel fuel

 

at a refinery in this state unless the gasoline or diesel fuel

 

meets the requirements in section 3. Except as provided by federal

 

law or regulation, a blender shall not blend gasoline unless the

 

finished blend meets the requirements in section 3.

 

     (2) Except as provided by federal law or regulation, a

 

distributor shall not sell or transfer to any distributor, retail

 

dealer, or bulk purchaser-end user any gasoline or diesel fuel

 

unless that gasoline or diesel fuel meets the requirements in

 

section 3.

 

     (3) A carrier or an employee or agent of a carrier, whether

 

operating under contract or tariff, shall not cause gasoline or

 

diesel fuel tendered to the carrier for shipment or transfer to

 

another carrier, distributor, or retail dealer to fail to comply,

 

at the time of delivery, with the requirements in section 3.

 

     (4) A person shall not knowingly sell, dispense, or offer for

 

sale gasoline or diesel fuel unless that gasoline or diesel fuel

 

meets the requirements in section 3.

 

     (5) A refiner or distributor shall not transfer, sell,


 

dispense, or offer gasoline for sale in this state to a distributor

 

unless the refiner or distributor indicates on each bill, invoice,

 

or other instrument evidencing a delivery of gasoline, the name of

 

the wholesale distributor who received delivery of the gasoline.

 

     (6) A distributor or refiner shall not transfer, sell,

 

dispense, or offer gasoline for sale in this state to a retail

 

dealer unless the distributor indicates on each bill, invoice, or

 

other instrument evidencing a delivery of gasoline, the name and

 

license number issued pursuant to this act, of the retail dealer

 

who received delivery of the gasoline.

 

     (7) A bill, invoice, or other instrument evidencing a delivery

 

of gasoline issued by a refiner or distributor for deliveries of

 

gasoline to purchasers who are not required to hold a license

 

issued pursuant to the motor fuel tax act, 2000 PA 403, MCL

 

207.1001 to 207.1170, or this act shall clearly indicate the name

 

and address and other information necessary to identify the

 

purchaser of the gasoline.

 

     (8) A bill, invoice, or other instrument evidencing a delivery

 

of gasoline required by subsection (5), (6), or (7) shall include a

 

guarantee that the gasoline delivered meets the requirements in

 

section 3 and shall indicate the concentration range of alcohol in

 

the gasoline, except for alcohols or ethers that have a molecular

 

weight greater than ethanol and are not mixed with methanol or

 

ethanol, or both, and shall indicate the possible presence, without

 

regard to concentration range, of any alcohols or ethers that have

 

a molecular weight greater than ethanol and are not mixed with

 

methanol or ethanol, or both.


 

     (9) A refiner, distributor, bulk purchaser-end user, or retail

 

dealer shall not transfer, sell, dispense, or offer gasoline for

 

sale unless that gasoline is visibly free of undissolved water,

 

sediments, and other suspended matter and is clear and bright at an

 

ambient temperature or 70 degrees Fahrenheit, whichever is greater.

 

     (10) A person who violates this section or rules promulgated

 

under this section is liable for a civil fine not to exceed

 

$10,000.00 for each day of the continuance of the violation. A

 

civil fine ordered pursuant to this section shall be submitted to

 

the state treasurer for deposit in the gasoline inspection and

 

testing fund created by section 8.