SECOND REGULAR SESSION

HOUSE BILL NO. 2184

97TH GENERAL ASSEMBLY

INTRODUCED BY REPRESENTATIVE KORMAN.

5806H.01I D. ADAM CRUMBLISS, Chief Clerk

AN ACT

To repeal sections 135.710, 142.800, 142.803, and 142.869, RSMo, and to enact in lieu thereof four new sections relating to alternative fuels, with penalty provisions.

Be it enacted by the General Assembly of the state of Missouri, as follows:

Section A. Sections 135.710, 142.800, 142.803, and 142.869, RSMo, are repealed and four new sections enacted in lieu thereof, to be known as sections 135.710, 142.800, 142.803, and 142.869, to read as follows:

135.710. 1. As used in this section, the following terms mean:

(1) "Alternative fuels", any motor fuel at least seventy percent of the volume of which consists of one or more of the following:

(a) Ethanol;

(b) Natural gas;

(d) Liquified natural gas;

(e) Liquified petroleum gas, LPG, LP gas, propane, or autogas;

(f) Any mixture of biodiesel and diesel fuel, without regard to any use of kerosene;

(g) Hydrogen;

(2) "Department", the department of [natural resources] economic development;

(3) "Eligible applicant", a business entity that is the owner of a qualified alternative fuel vehicle refueling property;

(4) "Qualified alternative fuel vehicle refueling property", property in this state owned by an eligible applicant and used for storing alternative fuels and for dispensing such alternative fuels into fuel tanks of motor vehicles owned by such eligible applicant or private citizens which, if constructed after August 28, 2008, was constructed with at least fifty-one percent of the costs being paid to qualified Missouri contractors for the:

(a) Fabrication of premanufactured equipment or process piping used in the construction of such facility;

(b) Construction of such facility; and

(c) General maintenance of such facility during the time period in which such facility receives any tax credit under this section.

If no qualified Missouri contractor is located within seventy-five miles of the property, the requirement that fifty-one percent of the costs shall be paid to qualified Missouri contractors shall not apply;

(5) "Qualified Missouri contractor", a contractor whose principal place of business is located in Missouri and has been located in Missouri for a period of not less than five years.

2. For all tax years beginning on or after January 1, 2009, but before January 1, 2012, any eligible applicant who installs and operates a qualified alternative fuel vehicle refueling property shall be allowed a credit against the tax otherwise due under chapter 143, excluding withholding tax imposed by sections 143.191 to 143.265, or due under chapter 147 or chapter 148 for any tax year in which the applicant is constructing the refueling property. The credit allowed in this section per eligible applicant shall not exceed the lesser of twenty thousand dollars or twenty percent of the total costs directly associated with the purchase and installation of any alternative fuel storage and dispensing equipment on any qualified alternative fuel vehicle refueling property, which shall not include the following:

(1) Costs associated with the purchase of land upon which to place a qualified alternative fuel vehicle refueling property;

(2) Costs associated with the purchase of an existing qualified alternative fuel vehicle refueling property; or

(3) Costs for the construction or purchase of any structure.

3. Tax credits allowed by this section shall be claimed by the eligible applicant at the time such applicant files a return for the tax year in which the storage and dispensing facilities were placed in service at a qualified alternative fuel vehicle refueling property, and shall be applied against the income tax liability imposed by chapter 143, chapter 147, or chapter 148 after all other credits provided by law have been applied. The cumulative amount of tax credits which may be claimed by eligible applicants claiming all credits authorized in this section shall not exceed the following amounts:

(1) In taxable year 2009, three million dollars;

(2) In taxable year 2010, two million dollars; and

(3) In taxable year 2011, one million dollars.

4. If the amount of the tax credit exceeds the eligible applicant's tax liability, the difference shall not be refundable. Any amount of credit that an eligible applicant is prohibited by this section from claiming in a taxable year may be carried forward to any of such applicant's two subsequent taxable years. Tax credits allowed under this section may be assigned, transferred, sold, or otherwise conveyed.

5. An alternative fuel vehicle refueling property, for which an eligible applicant receives tax credits under this section, which ceases to sell alternative fuel shall cause the forfeiture of such eligible applicant's tax credits provided under this section for the taxable year in which the alternative fuel vehicle refueling property ceased to sell alternative fuel and for future taxable years with no recapture of tax credits obtained by an eligible applicant with respect to such applicant's tax years which ended before the sale of alternative fuel ceased.

6. The director of revenue shall establish the procedure by which the tax credits in this section may be claimed, and shall establish a procedure by which the cumulative amount of tax credits is apportioned equally among all eligible applicants claiming the credit. To the maximum extent possible, the director of revenue shall establish the procedure described in this subsection in such a manner as to ensure that eligible applicants can claim all the tax credits possible up to the cumulative amount of tax credits available for the taxable year. No eligible applicant claiming a tax credit under this section shall be liable for any interest or penalty for filing a tax return after the date fixed for filing such return as a result of the apportionment procedure under this subsection.

7. Any eligible applicant desiring to claim a tax credit under this section shall submit the appropriate application for such credit with the department. The application for a tax credit under this section shall include any information required by the department. The department shall review the applications and certify to the department of revenue each eligible applicant that qualifies for the tax credit.

8. The department and the department of revenue may promulgate rules to implement the provisions of this section. Any rule or portion of a rule, as that term is defined in section 536.010, that is created under the authority delegated in this section shall become effective only if it complies with and is subject to all of the provisions of chapter 536 and, if applicable, section 536.028. This section and chapter 536 are nonseverable and if any of the powers vested with the general assembly pursuant to chapter 536 to review, to delay the effective date, or to disapprove and annul a rule are subsequently held unconstitutional, then the grant of rulemaking authority and any rule proposed or adopted after August 28, 2008, shall be invalid and void.

9. Pursuant to section 23.253 of the Missouri sunset act:

(1) The provisions of the new program authorized under this section shall automatically sunset six years after August 28, [2008] 2014, unless reauthorized by an act of the general assembly; and

(2) If such program is reauthorized, the program authorized under this section shall automatically sunset twelve years after the effective date of the reauthorization of this section; and

(3) This section shall terminate on December thirty-first of the calendar year immediately following the calendar year in which the program authorized under this section is sunset.

142.800. As used in this chapter, the following words, terms and phrases have the meanings given:

(1) "Agricultural purposes", clearing, terracing or otherwise preparing the ground on a farm; preparing soil for planting and fertilizing, cultivating, raising and harvesting crops; raising and feeding livestock and poultry; building fences; pumping water for any and all uses on the farm, including irrigation; building roads upon any farm by the owner or person farming the same; operating milking machines; sawing wood for use on a farm; producing electricity for use on a farm; movement of tractors, farm implements and nonlicensed equipment from one field to another;

(2) "Alternative fuel", electricity, liquefied petroleum gas (LPG or LP gas), hydrogen, autogas, liquefied natural gas (LNG), compressed natural gas (CNG) product, or a combination of liquefied petroleum gas and a compressed natural gas or electricity product used in an internal combustion engine or motor to propel any form of vehicle, machine, or mechanical contrivance. It includes all forms of fuel commonly or commercially known or sold as butane, propane, or compressed natural gas;

(3) "Aviation fuel", any motor fuel specifically compounded for use in reciprocating aircraft engines;

(4) "Blend stock", any petroleum product component of motor fuel, such as naphtha, reformat, toluene or kerosene, that can be blended for use in a motor fuel without further processing. The term includes those petroleum products presently defined by the Internal Revenue Service in regulations pursuant to 26 U.S.C., Sections 4081 and 4082, as amended. However, the term does not include any substance that:

(a) Will be ultimately used for consumer nonmotor fuel use; and

(b) Is sold or removed in drum quantities (fifty-five gallons) or less at the time of the removal or sale;

(5) "Blended fuel", a mixture composed of motor fuel and another liquid including blend stock, other than a de minimis amount of a product such as carburetor detergent or oxidation inhibitor, that can be used as a fuel in a highway vehicle. This term includes but is not limited to gasohol, ethanol, methanol, fuel grade alcohol, diesel fuel enhancers and resulting blends;

(6) "Blender", any person that produces blended motor fuel outside the bulk transfer/terminal system;

(7) "Blending", the mixing of one or more petroleum products, with or without another product, regardless of the original character of the product blended, if the product obtained by the blending is capable of use or otherwise sold for use in the generation of power for the propulsion of a motor vehicle, an airplane, or a motorboat. The term does not include the blending that occurs in the process of refining by the original refiner of crude petroleum or the blending of products known as lubricating oil and greases;

(8) "Bulk plant", a bulk motor fuel storage and distribution facility that is not a terminal within the bulk transfer system and from which motor fuel may be removed by truck;

(9) "Bulk transfer", any transfer of motor fuel from one location to another by pipeline tender or marine delivery within the bulk transfer/terminal system;

(10) "Bulk transfer/terminal system", the motor fuel distribution system consisting of refineries, pipelines, vessels, and terminals. Motor fuel in a refinery, pipeline, boat, barge or terminal is in the bulk transfer/terminal system. Motor fuel in the fuel supply tank of any engine, or in any tank car, rail car, trailer, truck, or other equipment suitable for ground transportation is not in the bulk transfer/terminal system;

(11) "Consumer", the user of the motor fuel;

(12) "Delivery", the placing of motor fuel or any liquid into the fuel tank of a motor vehicle or bulk storage facility;

(13) "Department", the department of revenue;

(14) "Destination state", the state, territory, or foreign country to which motor fuel is directed for delivery into a storage facility, a receptacle, a container, or a type of transportation equipment for the purpose of resale or use;

(15) "Diesel fuel", any liquid that is commonly or commercially known or sold as a fuel that is suitable for use in a diesel-powered highway vehicle. A liquid meets this requirement if, without further processing or blending, the liquid has practical and commercial fitness for use in the propulsion engine of a diesel-powered highway vehicle. "Diesel fuel" does not include jet fuel sold to a buyer who is registered with the Internal Revenue Service to purchase jet fuel and remit taxes on its sale or use to the Internal Revenue Service. "Diesel fuel" does not include biodiesel commonly referred to as B100 and defined in ASTM D6751, B99, or B99.9 until such biodiesel is blended with other diesel fuel or sold for highway use;

(16) "Diesel-powered highway vehicle", a motor vehicle operated on a highway that is propelled by a diesel-powered engine;

(17) "Director", the director of revenue;

(18) "Distributor", a person who either produces, refines, blends, compounds or manufactures motor fuel, imports motor fuel into a state or exports motor fuel out of a state, or who is engaged in distribution of motor fuel;

(19) "Dyed fuel", diesel fuel or kerosene that is required to be dyed pursuant to United States Environmental Protection Agency rules or is dyed pursuant to Internal Revenue Service rules or pursuant to any other requirements subsequently set by the United States Environmental Protection Agency or Internal Revenue Service including any invisible marker requirements;

(20) "Eligible purchaser", a distributor who has been authorized by the director to purchase motor fuel on a tax-deferred basis;

(21) "Export", to obtain motor fuel in this state for sale or other distribution outside of this state. In applying this definition, motor fuel delivered out of state by or for the seller constitutes an export by the seller, and motor fuel delivered out of state by or for the purchaser constitutes an export by the purchaser;

(22) "Exporter", any person, other than a supplier, who purchases motor fuel in this state for the purpose of transporting or delivering the fuel outside of this state;

(23) "Farm tractor", all tractor-type, motorized farm implements and equipment but shall not include motor vehicles of the truck-type, pickup truck-type, automobiles, and other motor vehicles required to be registered and licensed each year pursuant to the provisions of the motor vehicle license and registration laws of this state;

(24) "Fuel grade alcohol", a methanol or ethanol with a proof of not less than one hundred ninety degrees (determined without regard to denaturants) and products derived from such alcohol for blending with motor fuel;

(25) "Fuel transportation vehicle", any vehicle designed for highway use which is also designed or used to transport motor fuels and includes transport trucks and tank wagons;

(26) "Gasoline", all products commonly or commercially known or sold as gasoline that are suitable for use as a motor fuel. Gasoline does not include products that have an American Society for Testing and Materials (ASTM) octane number of less than seventy-five as determined by the motor method;

(27) "Gross gallons", the total measured motor fuel, exclusive of any temperature or pressure adjustments, in U.S. gallons;

(28) "Heating oil", a motor fuel that is burned in a boiler, furnace, or stove for heating or industrial processing purposes;

(29) "Import", to bring motor fuel into this state by any means of conveyance other than in the fuel supply tank of a motor vehicle. In applying this definition, motor fuel delivered into this state from out-of-state by or for the seller constitutes an import by the seller, and motor fuel delivered into this state from out-of-state by or for the purchaser constitutes an import by the purchaser;

(30) "Import verification number", the number assigned by the director with respect to a single transport truck delivery into this state from another state upon request for an assigned number by an importer or the transporter carrying motor fuel into this state for the account of an importer;

(31) "Importer" includes any person who is the importer of record, pursuant to federal customs law, with respect to motor fuel. If the importer of record is acting as an agent, the person for whom the agent is acting is the importer. If there is no importer of record of motor fuel entered into this state, the owner of the motor fuel at the time it is brought into this state is the importer;

(32) "Interstate motor fuel user", any person who operates a motor fuel-powered motor vehicle with a licensed gross weight exceeding twenty-six thousand pounds that travels from this state into another state or from another state into this state;

(33) "Invoiced gallons", the gallons actually billed on an invoice for payment to a supplier which shall be either gross or net gallons on the original manifest or bill of lading;

(34) "K-1 kerosene", a petroleum product having an A.P.I. gravity of not less than forty degrees, at a temperature of sixty degrees Fahrenheit and a minimum flash point of one hundred degrees Fahrenheit with a sulfur content not exceeding four one-hundredths percent by weight;

(35) "Kerosene", the petroleum fraction containing hydrocarbons that are slightly heavier than those found in gasoline and naphtha, with a boiling range of one hundred forty-nine to three hundred degrees Celsius;

(36) "Liquid", any substance that is liquid in excess of sixty degrees Fahrenheit and at a pressure of fourteen and seven-tenths pounds per square inch absolute;

(37) "Motor fuel", gasoline, diesel fuel, kerosene and blended fuel;

(38) "Motor vehicle", any automobile, truck, truck-tractor or any motor bus or self-propelled vehicle not exclusively operated or driven upon fixed rails or tracks. The term does not include:

(a) Farm tractors or machinery including tractors and machinery designed for off-road use but capable of movement on roads at low speeds, or

(b) A vehicle solely operated on rails;

(39) "Net gallons", the motor fuel, measured in U.S. gallons, when corrected to a temperature of sixty degrees Fahrenheit and a pressure of fourteen and seven-tenths pounds per square inch absolute (psi);

(40) "Permissive supplier", an out-of-state supplier that elects, but is not required, to have a supplier's license pursuant to this chapter;

(41) "Person", natural persons, individuals, partnerships, firms, associations, corporations, estates, trustees, business trusts, syndicates, this state, any county, city, municipality, school district or other political subdivision of the state, federally recognized Indian tribe, or any corporation or combination acting as a unit or any receiver appointed by any state or federal court;

(42) "Position holder", the person who holds the inventory position in motor fuel in a terminal, as reflected on the records of the terminal operator. A person holds the inventory position in motor fuel when that person has a contract with the terminal operator for the use of storage facilities and terminating services for motor fuel at the terminal. The term includes a terminal operator who owns motor fuel in the terminal;

(43) "Propel", the operation of a motor vehicle, whether it is in motion or at rest;

(44) "Public highway", every road, toll road, highway, street, way or place generally open to the use of the public as a matter of right for the purposes of vehicular travel, including streets and alleys of any town or city notwithstanding that the same may be temporarily closed for construction, reconstruction, maintenance or repair;

(45) "Qualified terminal", a terminal which has been assigned a terminal control number ("tcn") by the Internal Revenue Service;

(46) "Rack", a mechanism for delivering motor fuel from a refinery or terminal into a railroad tank car, a transport truck or other means of bulk transfer outside of the bulk transfer/terminal system;

(47) "Refiner", any person that owns, operates, or otherwise controls a refinery;

(48) "Refinery", a facility used to produce motor fuel from crude oil, unfinished oils, natural gas liquids, or other hydrocarbons and from which motor fuel may be removed by pipeline, by boat or barge, or at a rack;

(49) "Removal", any physical transfer of motor fuel from a terminal, manufacturing plant, customs custody, pipeline, boat or barge, refinery or any facility that stores motor fuel;

(50) "Retailer", a person that engages in the business of selling or dispensing to the consumer within this state;

(51) "Supplier", a person that is:

(a) Registered or required to be registered pursuant to 26 U.S.C., Section 4101, for transactions in motor fuels in the bulk transfer/terminal distribution system; and

(b) One or more of the following:

a. The position holder in a terminal or refinery in this state;

b. Imports motor fuel into this state from a foreign country;

c. Acquires motor fuel from a terminal or refinery in this state from a position holder pursuant to either a two-party exchange or a qualified buy-sell arrangement which is treated as an exchange and appears on the records of the terminal operator; or

d. The position holder in a terminal or refinery outside this state with respect to motor fuel which that person imports into this state. A terminal operator shall not be considered a supplier based solely on the fact that the terminal operator handles motor fuel consigned to it within a terminal. "Supplier" also means a person that produces fuel grade alcohol or alcohol-derivative substances in this state, produces fuel grade alcohol or alcohol-derivative substances for import to this state into a terminal, or acquires upon import by truck, rail car or barge into a terminal, fuel grade alcohol or alcohol-derivative substances. "Supplier" includes a permissive supplier unless specifically provided otherwise;

(52) "Tank wagon", a straight truck having multiple compartments designed or used to carry motor fuel;

(53) "Terminal", a bulk storage and distribution facility which includes:

(a) For the purposes of motor fuel, is a qualified terminal;

(b) For the purposes of fuel grade alcohol, is supplied by truck, rail car, boat, barge or pipeline and the products are removed at a rack;

(54) "Terminal bulk transfers" include but are not limited to the following:

(a) Boat or barge movement of motor fuel from a refinery or terminal to a terminal;

(b) Pipeline movements of motor fuel from a refinery or terminal to a terminal;

(d) Two-party exchanges or buy-sell supply arrangements within a terminal between licensed suppliers;

(55) "Terminal operator", any person that owns, operates, or otherwise controls a terminal. A terminal operator may own the motor fuel that is transferred through or stored in the terminal;

(56) "Transmix", the buffer or interface between two different products in a pipeline shipment, or a mix of two different products within a refinery or terminal that results in an off-grade mixture;

(57) "Transport truck", a semitrailer combination rig designed or used to transport motor fuel over the highways;

(58) "Transporter", any operator of a pipeline, barge, railroad or transport truck engaged in the business of transporting motor fuels;

(59) "Two-party exchange", a transaction in which the motor fuel is transferred from one licensed supplier or licensed permissive supplier to another licensed supplier or licensed permissive supplier and:

(a) Which transaction includes a transfer from the person that holds the original inventory position for motor fuel in the terminal as reflected on the records of the terminal operator; and

(b) The exchange transaction is simultaneous with removal from the terminal by the receiving exchange partner. However, in any event, the terminal operator in its books and records treats the receiving exchange party as the supplier which removes the product across a terminal rack for purposes of reporting such events to this state;

(60) "Ultimate vendor", a person that sells motor fuel to the consumer;

(61) "Undyed diesel fuel", diesel fuel that is not subject to the United States Environmental Protection Agency dyeing requirements, or has not been dyed in accordance with Internal Revenue Service fuel dyeing provisions; and

(62) "Vehicle fuel tank", any receptacle on a motor vehicle from which fuel is supplied for the propulsion of the motor vehicle.

142.803. 1. A tax is levied and imposed on all motor fuel used or consumed in this state as follows:

(1) Motor fuel, seventeen cents per gallon;

(2) Alternative fuels, not subject to the decal fees as provided in section 142.869, with a power potential equivalent of motor fuel. In the event alternative fuel, which is not commonly sold or measured by the gallon, is used in motor vehicles on the highways of this state, the director is authorized to assess and collect a tax upon such alternative fuel measured by the nearest power potential equivalent to that of one gallon of regular grade gasoline. The determination by the director of the power potential equivalent of such alternative fuel shall be prima facie correct;

(3) Aviation fuel used in propelling aircraft with reciprocating engines, nine cents per gallon as levied and imposed by section 155.080 to be collected as required under this chapter. 2. All taxes, surcharges and fees are imposed upon the ultimate consumer, but are to be precollected as described in this chapter, for the facility and convenience of the consumer. The levy and assessment on other persons as specified in this chapter shall be as agents of this state for the precollection of the tax.

3. Notwithstanding the provisions of subsection 1 of section 142.869, beginning January 1, 2015, there shall be a tax levied and imposed on natural gas, compressed natural gas, and liquefied natural gas used in motor vehicles in the state in the following amount:

(1) On or after January 1, 2015, three cents per equivalent gallon of gasoline or diesel;

(2) On or after January 1, 2019, six cents per equivalent gallon of gasoline or diesel;

(3) On or after January 1, 2024, the greater of:

(a) Nine cents per equivalent gallon of gasoline or diesel; or

(b) Three percent of the average cost of alternative fuel per equivalent gallon of gasoline or diesel for the state for the preceding year before any tax is imposed on such fuel.

All proceeds from the taxes imposed and collected under this subsection shall be credited to the state highways and transportation department fund created in section 226.200.

4. The conversion of natural gas, compressed natural gas, or liquefied natural gas to a gasoline or diesel equivalent shall meet a federal standard or agreement. In the absence of such standard or agreement, the conversion shall be as follows:

(1) A gasoline gallon equivalent of compressed natural gas shall be equal to one hundred twenty-six and sixty-seven-hundredths cubic feet of compressed natural gas, measured at fourteen and seven-tenths pounds per square inch and at a temperature of sixty degrees Fahrenheit;

(2) A diesel gallon equivalent of liquefied natural gas shall be equal to six and six-hundredths pounds of liquefied natural gas.

5. Nothing in this section shall prevent or limit taxation applied by chapter 144 or local or federal taxes. If no tax is applied by chapter 144, the rates of taxation shall be two times the rates provided in this section.

6. If a natural gas, compressed natural gas, liquefied natural gas, propane, or other alternative fuel connection is used for fueling motor vehicles and for another use, such as heating, the tax imposed by this section shall apply to the entire amount of natural gas, compressed natural gas, liquefied natural gas, propane, or other alternative fuel used unless an approved, separate metering and accounting system is in place.

142.869. 1. The tax imposed by this chapter shall not apply to passenger motor vehicles, buses as defined in section 301.010, or commercial motor vehicles registered in this state which are powered by alternative fuel, and for which a valid decal has been acquired as provided in this section. The owners or operators of such motor vehicles shall, in lieu of the tax imposed by section 142.803, pay an annual alternative fuel decal fee as follows: seventy-five dollars on each passenger motor vehicle, school bus as defined in section 301.010, and commercial motor vehicle with a licensed gross vehicle weight of eighteen thousand pounds or less; one hundred dollars on each motor vehicle with a licensed gross weight in excess of eighteen thousand pounds but not more than thirty-six thousand pounds used for farm or farming transportation operations and registered with a license plate designated with the letter "F"; one hundred fifty dollars on each motor vehicle with a licensed gross vehicle weight in excess of eighteen thousand pounds but less than or equal to thirty-six thousand pounds, and each passenger-carrying motor vehicle subject to the registration fee provided in sections 301.059, 301.061 and 301.063; two hundred fifty dollars on each motor vehicle with a licensed gross weight in excess of thirty-six thousand pounds used for farm or farming transportation operations and registered with a license plate designated with the letter "F"; and one thousand dollars on each motor vehicle with a licensed gross vehicle weight in excess of thirty-six thousand pounds. Notwithstanding provisions of this section to the contrary, motor vehicles licensed as historic under section 301.131 which are powered by alternative fuel shall be exempt from both the tax imposed by this chapter and the alternative fuel decal requirements of this section.

2. Except interstate fuel users and vehicles licensed under a reciprocity agreement as defined in section 142.617, the tax imposed by section 142.803 shall not apply to motor vehicles registered outside this state which are powered by alternative fuel other than compressed natural gas and liquified natural gas, and for which a valid temporary alternative fuel decal has been acquired as provided in this section. The owners or operators of such motor vehicles shall, in lieu of the tax imposed by section 142.803, pay a temporary alternative fuel decal fee of eight dollars on each such vehicle. Such decals shall be valid for a period of fifteen days from the date of issuance and shall be attached to the lower right-hand corner of the front windshield on the motor vehicle for which it was issued. Such decal and fee shall not be transferable. All proceeds from such decal fees shall be deposited as specified in section 142.345. Alternative fuel dealers selling such decals in accordance with rules and regulations prescribed by the director shall be allowed to retain fifty cents for each decal fee timely remitted to the director. 3. The director shall annually, on or before January thirty-first of each year, collect or cause to be collected from owners or operators of the motor vehicles specified in subsection 1 of this section the annual decal fee. Applications for such decals shall be supplied by the department of revenue. In the case of a motor vehicle which is not in operation by January thirty-first of any year, a decal may be purchased for a fractional period of such year, and the amount of the decal fee shall be reduced by one-twelfth for each complete month which shall have elapsed since the beginning of such year.

4. Upon the payment of the fee required by subsection 1 of this section, the director shall issue a decal, which shall be valid for the current calendar year and shall be attached to the lower right-hand corner of the front windshield on the motor vehicle for which it was issued.

5. The decal fee paid pursuant to subsection 1 of this section for each motor vehicle shall be transferable upon a change of ownership of the motor vehicle and, if the LP gas or natural gas equipment is removed from a motor vehicle upon a change of ownership and is reinstalled in another motor vehicle, upon such reinstallation. Such transfers shall be accomplished in accordance with rules and regulations promulgated by the director.

6. It shall be unlawful for any person to operate a motor vehicle required to have an alternative fuel decal upon the highways of this state without a valid decal.

7. No person shall cause to be put, or put, LP gas [or natural gas] into the fuel supply receptacle of a motor vehicle required to have an alternative fuel decal unless the motor vehicle has a valid decal attached to it. Sales of fuel placed in the supply receptacle of a motor vehicle displaying such decal shall be recorded upon an invoice, which invoice shall include the decal number, the motor vehicle license number and the number of gallons placed in such supply receptacle.

8. Any person violating any provision of this section is guilty of an infraction and shall, upon conviction thereof, be fined five hundred dollars.

9. Motor vehicles displaying a valid alternative fuel decal are exempt from the licensing and reporting requirements of this chapter.

10. The alternative fuel decal fees provided in subsection 1 of this section for motor vehicles powered by natural gas, compressed natural gas, or liquefied natural gas shall be reduced by one-third on each of the following dates:

(1) January 1, 2015;

(2) January 1, 2019; and

(3) January 1, 2024, when such decal fee shall be eliminated for vehicles powered by natural gas, compressed natural gas, or liquefied natural gas.

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