Michigan lawmakers work on diesel tax tweak

| 12/14/2009

In the days following a Michigan Senate panel’s vote to have truck drivers traveling through the state pay a few cents more per gallon at the pump, a lot of truckers have been left scratching their heads about a quirk in the bill.

As approved by the Senate Transportation Committee, the proposed diesel tax increase in Michigan would primarily apply to interstate trucking operations while intrastate truckers would not be affected.

Sponsored by Sen. Jud Gilbert, R-Algonac, the bill would increase the motor carrier fuel tax by 4 cents per gallon to 19 cents – the same as the gas tax. The motor fuel tax would stay at 15 cents per gallon.

The motor carrier fuel tax is applied to truck drivers licensed under the International Fuel Tax Agreement. Only interstate motor carriers are subject to the motor carrier fuel tax.

Since the committee vote to forward the bill – SB862 – to the full Senate, truck drivers have questioned why the state would leave anyone out of the proposed increase. They also want to know how the state would decipher who does and doesn’t owe the higher tax. In addition, there is a question about the bill’s constitutionality.

Gabe Basso, Gilbert’s legislative director, said lawmakers are working to eliminate the concerns and to make sure everyone putting diesel into their tanks is paying 4 cents more to help fund bridge repairs.

“Gilbert’s bill cannot be enacted on its own. There’s a constitutional issue. If we were to apply this tax only to interstate carriers, and not intrastate carriers, we’d have a commerce clause violation,” Basso told Land Line.

Basso said that Gilbert’s bill amounts to one piece of the puzzle in increasing the diesel tax. A House version, which would cover intrastate operations, is in the works, he said.

“If in fact a 4-cent increase is enacted, it will be across the board,” Basso said.

It is uncertain if the diesel tax increase will emerge from the statehouse.

Senate Majority Leader Mike Bishop, R-Rochester, has indicated he doesn’t believe the time is right to increase the tax. In addition, he recognizes that the $36 million expected to come from a diesel tax increase is not going to solve the transportation funding crisis.

If the legislation somehow emerges from the Senate it would still need to pass muster in the Democrat-led House. But Gov. Jennifer Granholm has made it clear that she is in favor of the tax increase, saying “we should get it done now.”

To view other legislative activities of interest for Michigan in 2009, click here.

– By Keith Goble, state legislative editor

Editor’s Note: Please share your thoughts with us about the legislation included in this story. Comments may be sent to statelegislativedesk@ooida.com.