New Michigan law targets fuel stations that cheat customers

| 5/9/2006

Concerns about whether drivers in Michigan are getting what they pay for at the fuel pump spurred Gov. Jennifer Granholm to sign a bill into law on May 2 that will bring hefty fines on fuel stations that overcharge customers. The effort won unanimous support in the Legislature.

The new law, previously HB4502, was introduced in 2005 before the rash of hurricanes that hit the Gulf Coast. However, fuel prices that approached $3 per gallon in the state following the storms caused many drivers to question whether they were getting what they paid for. This year’s return of nearly $3 per gallon fuel helped push the bill toward passage.

Supporters said the new law is intended to target station owners who purposely cheat the public with inaccurate pumps.

“I wanted to make sure this legislation strongly targeted those stations that are intentionally defrauding the public,” Rep. Richard Ball, R-Bennington Township, said in a written statement. “We understand that occasionally pumps malfunction or a mistake is made, but those stations that are adjusting their pumps at the expense of the customers should be severely punished.”

Rep. Fran Amos, R-Waterford, said the new law will offer customers an added layer of protection.

“Since there is no way for a customer to actually see how much (fuel) they are getting or test the grade themselves, it is important they can trust the station to give them what they are paying for,” Amos said in a written statement. “As with any public trust, those that purposely abuse it should be strongly penalized.”

Existing Michigan rules limit the fines for first-offense quantity violations to between $50 and $1,000.

In addition to other penalties, the new law will make station owners who intentionally short customers pay a civil fine of $5,000 for a first offense. A second offense will cost stations $10,000, and a third offense will carry a $25,000 fine.

The new law gives the Michigan Department of Agriculture authority to shut down a station’s pumps until the problem is corrected. The department will be required to annually inspect stations with three or more intentional violations.

Consumers in Michigan who believe they’ve been bilked at the pump should call the state’s Department of Agriculture hotline at 1-800-MDA-FUEL (1-800-632-3835).

Granholm also said at the bill-signing ceremony that she supports another bill that would exempt the sale of gasoline and diesel fuel from sales taxes, if the governor issues an executive order exempting those sales.

Currently, the federal government imposes an excise tax of 18.4 cents per gallon of gasoline and 24.4 cents per gallon of diesel, and the state imposes an excise tax of 19 cents per gallon of gasoline and 15 cents per gallon of diesel. The general sales tax of 6 percent is imposed on sales of gasoline and diesel; the sales tax is imposed on the price including the federal motor fuel taxes but excluding the state motor fuel taxes.

The bill – HB4204 – unanimously passed the House last September. It has since been in the Senate Government Operations Committee.