SECOND REGULAR SESSION

SENATE COMMITTEE SUBSTITUTE FOR

HOUSE COMMITTEE SUBSTITUTE FOR

HOUSE BILL NO. 1137

93RD GENERAL ASSEMBLY

Reported from the Committee on Commerce, Energy and the Environment, May 5, 2006, with recommendation that the Senate Committee Substitute do pass.

TERRY L. SPIELER, Secretary.

3328S.03C

AN ACT

To repeal sections 144.030 and 144.062, RSMo, and to enact in lieu thereof twelve new sections relating to motor fuels.

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

Section A. Sections 144.030 and 144.062, RSMo, are repealed and twelve new sections enacted in lieu thereof, to be known as sections 144.030, 144.062, 640.800, 640.803, 640.806, 640.809, 640.812, 640.815, 640.818, 640.821, 640.824, and 640.827, to read as follows:

144.030. 1. There is hereby specifically exempted from the provisions of sections 144.010 to 144.525 and from the computation of the tax levied, assessed or payable pursuant to sections 144.010 to 144.525 such retail sales as may be made in commerce between this state and any other state of the United States, or between this state and any foreign country, and any retail sale which the state of Missouri is prohibited from taxing pursuant to the Constitution or laws of the United States of America, and such retail sales of tangible personal property which the general assembly of the state of Missouri is prohibited from taxing or further taxing by the constitution of this state.

2. There are also specifically exempted from the provisions of the local sales tax law as defined in section 32.085, RSMo, section 238.235, RSMo, and sections 144.010 to 144.525 and 144.600 to 144.761 and from the computation of the tax levied, assessed or payable pursuant to the local sales tax law as defined in section 32.085, RSMo, section 238.235, RSMo, and sections 144.010 to 144.525 and 144.600 to 144.745:

(1) Motor fuel or special fuel subject to an excise tax of this state, unless all or part of such excise tax is refunded pursuant to section 142.824, RSMo; or upon the sale at retail of fuel to be consumed in manufacturing or creating gas, power, steam, electrical current or in furnishing water to be sold ultimately at retail; or feed for livestock or poultry; or grain to be converted into foodstuffs which are to be sold ultimately in processed form at retail; or seed, limestone or fertilizer which is to be used for seeding, liming or fertilizing crops which when harvested will be sold at retail or will be fed to livestock or poultry to be sold ultimately in processed form at retail; economic poisons registered pursuant to the provisions of the Missouri pesticide registration law (sections 281.220 to 281.310, RSMo) which are to be used in connection with the growth or production of crops, fruit trees or orchards applied before, during, or after planting, the crop of which when harvested will be sold at retail or will be converted into foodstuffs which are to be sold ultimately in processed form at retail;

(2) Materials, manufactured goods, machinery and parts which when used in manufacturing, processing, compounding, mining, producing or fabricating become a component part or ingredient of the new personal property resulting from such manufacturing, processing, compounding, mining, producing or fabricating and which new personal property is intended to be sold ultimately for final use or consumption; and materials, including without limitation, gases and manufactured goods, including without limitation, slagging materials and firebrick, which are ultimately consumed in the manufacturing process by blending, reacting or interacting with or by becoming, in whole or in part, component parts or ingredients of steel products intended to be sold ultimately for final use or consumption;

(3) Materials, replacement parts and equipment purchased for use directly upon, and for the repair and maintenance or manufacture of, motor vehicles, watercraft, railroad rolling stock or aircraft engaged as common carriers of persons or property;

(4) Replacement machinery, equipment, and parts and the materials and supplies solely required for the installation or construction of such replacement machinery, equipment, and parts, used directly in manufacturing, mining, fabricating or producing a product which is intended to be sold ultimately for final use or consumption; and machinery and equipment, and the materials and supplies required solely for the operation, installation or construction of such machinery and equipment, purchased and used to establish new, or to replace or expand existing, material recovery processing plants in this state. For the purposes of this subdivision, a "material recovery processing plant" means a facility that has as its primary purpose the recovery of materials into a useable product or a different form which is used in producing a new product and shall include a facility or equipment which are used exclusively for the collection of recovered materials for delivery to a material recovery processing plant but shall not include motor vehicles used on highways. For purposes of this section, the terms "motor vehicle" and "highway" shall have the same meaning pursuant to section 301.010, RSMo. Material recovery is not the reuse of materials within a manufacturing process or the use of a product previously recovered. The material recovery processing plant shall qualify under the provisions of this section regardless of ownership of the material being recovered;

(5) Machinery and equipment, and parts and the materials and supplies solely required for the installation or construction of such machinery and equipment, purchased and used to establish new or to expand existing manufacturing, mining or fabricating plants in the state if such machinery and equipment is used directly in manufacturing, mining or fabricating a product which is intended to be sold ultimately for final use or consumption;

(6) Tangible personal property which is used exclusively in the manufacturing, processing, modification or assembling of products sold to the United States government or to any agency of the United States government;

(7) Animals or poultry used for breeding or feeding purposes;

(8) Newsprint, ink, computers, photosensitive paper and film, toner, printing plates and other machinery, equipment, replacement parts and supplies used in producing newspapers published for dissemination of news to the general public;

(9) The rentals of films, records or any type of sound or picture transcriptions for public commercial display;

(10) Pumping machinery and equipment used to propel products delivered by pipelines engaged as common carriers;

(11) Railroad rolling stock for use in transporting persons or property in interstate commerce and motor vehicles licensed for a gross weight of twenty-four thousand pounds or more or trailers used by common carriers, as defined in section 390.020, RSMo, solely in the transportation of persons or property in interstate commerce;

(12) Electrical energy used in the actual primary manufacture, processing, compounding, mining or producing of a product, or electrical energy used in the actual secondary processing or fabricating of the product, or a material recovery processing plant as defined in subdivision (4) of this subsection, in facilities owned or leased by the taxpayer, if the total cost of electrical energy so used exceeds ten percent of the total cost of production, either primary or secondary, exclusive of the cost of electrical energy so used or if the raw materials used in such processing contain at least twenty-five percent recovered materials as defined in section 260.200, RSMo. For purposes of this subdivision, "processing" means any mode of treatment, act or series of acts performed upon materials to transform and reduce them to a different state or thing, including treatment necessary to maintain or preserve such processing by the producer at the production facility;

(13) Anodes which are used or consumed in manufacturing, processing, compounding, mining, producing or fabricating and which have a useful life of less than one year;

(14) Machinery, equipment, appliances and devices purchased or leased and used solely for the purpose of preventing, abating or monitoring air pollution, and materials and supplies solely required for the installation, construction or reconstruction of such machinery, equipment, appliances and devices, and so certified as such by the director of the department of natural resources, except that any action by the director pursuant to this subdivision may be appealed to the air conservation commission which may uphold or reverse such action;

(15) Machinery, equipment, appliances and devices purchased or leased and used solely for the purpose of preventing, abating or monitoring water pollution, and materials and supplies solely required for the installation, construction or reconstruction of such machinery, equipment, appliances and devices, and so certified as such by the director of the department of natural resources, except that any action by the director pursuant to this subdivision may be appealed to the Missouri clean water commission which may uphold or reverse such action;

(16) Tangible personal property purchased by a rural water district;

(17) All amounts paid or charged for admission or participation or other fees paid by or other charges to individuals in or for any place of amusement, entertainment or recreation, games or athletic events, including museums, fairs, zoos and planetariums, owned or operated by a municipality or other political subdivision where all the proceeds derived therefrom benefit the municipality or other political subdivision and do not inure to any private person, firm, or corporation;

(18) All sales of insulin and prosthetic or orthopedic devices as defined on January 1, 1980, by the federal Medicare program pursuant to Title XVIII of the Social Security Act of 1965, including the items specified in Section 1862(a)(12) of that act, and also specifically including hearing aids and hearing aid supplies and all sales of drugs which may be legally dispensed by a licensed pharmacist only upon a lawful prescription of a practitioner licensed to administer those items, including samples and materials used to manufacture samples which may be dispensed by a practitioner authorized to dispense such samples and all sales of medical oxygen, home respiratory equipment and accessories, hospital beds and accessories and ambulatory aids, all sales of manual and powered wheelchairs, stairway lifts, Braille writers, electronic Braille equipment and, if purchased by or on behalf of a person with one or more physical or mental disabilities to enable them to function more independently, all sales of scooters, reading machines, electronic print enlargers and magnifiers, electronic alternative and augmentative communication devices, and items used solely to modify motor vehicles to permit the use of such motor vehicles by individuals with disabilities or sales of over-the-counter or nonprescription drugs to individuals with disabilities;

(19) All sales made by or to religious and charitable organizations and institutions in their religious, charitable or educational functions and activities and all sales made by or to all elementary and secondary schools operated at public expense in their educational functions and activities;

(20) All sales of aircraft to common carriers for storage or for use in interstate commerce and all sales made by or to not-for-profit civic, social, service or fraternal organizations, including fraternal organizations which have been declared tax-exempt organizations pursuant to Section 501(c)(8) or (10) of the 1986 Internal Revenue Code, as amended, in their civic or charitable functions and activities and all sales made to eleemosynary and penal institutions and industries of the state, and all sales made to any private not-for-profit institution of higher education not otherwise excluded pursuant to subdivision (19) of this subsection or any institution of higher education supported by public funds, and all sales made to a state relief agency in the exercise of relief functions and activities;

(21) All ticket sales made by benevolent, scientific and educational associations which are formed to foster, encourage, and promote progress and improvement in the science of agriculture and in the raising and breeding of animals, and by nonprofit summer theater organizations if such organizations are exempt from federal tax pursuant to the provisions of the Internal Revenue Code and all admission charges and entry fees to the Missouri state fair or any fair conducted by a county agricultural and mechanical society organized and operated pursuant to sections 262.290 to 262.530, RSMo;

(22) All sales made to any private not-for-profit elementary or secondary school, all sales of feed additives, medications or vaccines administered to livestock or poultry in the production of food or fiber, all sales of pesticides used in the production of crops, livestock or poultry for food or fiber, all sales of bedding used in the production of livestock or poultry for food or fiber, all sales of propane or natural gas, electricity or diesel fuel used exclusively for drying agricultural crops, natural gas used in the primary manufacture or processing of fuel ethanol as defined in section 142.028, RSMo, natural gas, propane, and electricity used by an eligible new generation cooperative or an eligible new generation processing entity as defined in section 348.432, RSMo, and all sales of farm machinery and equipment, other than airplanes, motor vehicles and trailers. As used in this subdivision, the term "feed additives" means tangible personal property which, when mixed with feed for livestock or poultry, is to be used in the feeding of livestock or poultry. As used in this subdivision, the term "pesticides" includes adjuvants such as crop oils, surfactants, wetting agents and other assorted pesticide carriers used to improve or enhance the effect of a pesticide and the foam used to mark the application of pesticides and herbicides for the production of crops, livestock or poultry. As used in this subdivision, the term "farm machinery and equipment" means new or used farm tractors and such other new or used farm machinery and equipment and repair or replacement parts thereon, and supplies and lubricants used exclusively, solely, and directly for producing crops, raising and feeding livestock, fish, poultry, pheasants, chukar, quail, or for producing milk for ultimate sale at retail, including field drain tile, and [one-half of each purchaser's] the purchase of [diesel] motor fuel, as defined in section 142.800, RSMo, therefor which is:

(a) Used exclusively for agricultural purposes;

(b) Used on land owned or leased for the purpose of producing farm products; and

(c) Used directly in producing farm products to be sold ultimately in processed form or otherwise at retail or in producing farm products to be fed to livestock or poultry to be sold ultimately in processed form at retail;

(23) Except as otherwise provided in section 144.032, all sales of metered water service, electricity, electrical current, natural, artificial or propane gas, wood, coal or home heating oil for domestic use and in any city not within a county, all sales of metered or unmetered water service for domestic use;

(a) "Domestic use" means that portion of metered water service, electricity, electrical current, natural, artificial or propane gas, wood, coal or home heating oil, and in any city not within a county, metered or unmetered water service, which an individual occupant of a residential premises uses for nonbusiness, noncommercial or nonindustrial purposes. Utility service through a single or master meter for residential apartments or condominiums, including service for common areas and facilities and vacant units, shall be deemed to be for domestic use. Each seller shall establish and maintain a system whereby individual purchases are determined as exempt or nonexempt;

(b) Regulated utility sellers shall determine whether individual purchases are exempt or nonexempt based upon the seller's utility service rate classifications as contained in tariffs on file with and approved by the Missouri public service commission. Sales and purchases made pursuant to the rate classification "residential" and sales to and purchases made by or on behalf of the occupants of residential apartments or condominiums through a single or master meter, including service for common areas and facilities and vacant units, shall be considered as sales made for domestic use and such sales shall be exempt from sales tax. Sellers shall charge sales tax upon the entire amount of purchases classified as nondomestic use. The seller's utility service rate classification and the provision of service thereunder shall be conclusive as to whether or not the utility must charge sales tax;

(c) Each person making domestic use purchases of services or property and who uses any portion of the services or property so purchased for a nondomestic use shall, by the fifteenth day of the fourth month following the year of purchase, and without assessment, notice or demand, file a return and pay sales tax on that portion of nondomestic purchases. Each person making nondomestic purchases of services or property and who uses any portion of the services or property so purchased for domestic use, and each person making domestic purchases on behalf of occupants of residential apartments or condominiums through a single or master meter, including service for common areas and facilities and vacant units, under a nonresidential utility service rate classification may, between the first day of the first month and the fifteenth day of the fourth month following the year of purchase, apply for credit or refund to the director of revenue and the director shall give credit or make refund for taxes paid on the domestic use portion of the purchase. The person making such purchases on behalf of occupants of residential apartments or condominiums shall have standing to apply to the director of revenue for such credit or refund;

(24) All sales of handicraft items made by the seller or the seller's spouse if the seller or the seller's spouse is at least sixty-five years of age, and if the total gross proceeds from such sales do not constitute a majority of the annual gross income of the seller;

(25) Excise taxes, collected on sales at retail, imposed by Sections 4041, 4061, 4071, 4081, 4091, 4161, 4181, 4251, 4261 and 4271 of Title 26, United States Code. The director of revenue shall promulgate rules pursuant to chapter 536, RSMo, to eliminate all state and local sales taxes on such excise taxes;

(26) Sales of fuel consumed or used in the operation of ships, barges, or waterborne vessels which are used primarily in or for the transportation of property or cargo, or the conveyance of persons for hire, on navigable rivers bordering on or located in part in this state, if such fuel is delivered by the seller to the purchaser's barge, ship, or waterborne vessel while it is afloat upon such river;

(27) All sales made to an interstate compact agency created pursuant to sections 70.370 to 70.441, RSMo, or sections 238.010 to 238.100, RSMo, in the exercise of the functions and activities of such agency as provided pursuant to the compact;

(28) Computers, computer software and computer security systems purchased for use by architectural or engineering firms headquartered in this state. For the purposes of this subdivision, "headquartered in this state" means the office for the administrative management of at least four integrated facilities operated by the taxpayer is located in the state of Missouri;

(29) All livestock sales when either the seller is engaged in the growing, producing or feeding of such livestock, or the seller is engaged in the business of buying and selling, bartering or leasing of such livestock;

(30) All sales of barges which are to be used primarily in the transportation of property or cargo on interstate waterways;

(31) Electrical energy or gas, whether natural, artificial or propane, water, or other utilities which are ultimately consumed in connection with the manufacturing of cellular glass products or in any material recovery processing plant as defined in subdivision (4) of subsection 2 of this section;

(32) Notwithstanding other provisions of law to the contrary, all sales of pesticides or herbicides used in the production of crops, aquaculture, livestock or poultry;

(33) Tangible personal property purchased for use or consumption directly or exclusively in the research and development of prescription pharmaceuticals consumed by humans or animals;

(34) All sales of grain bins for storage of grain for resale;

(35) All sales of feed which are developed for and used in the feeding of pets owned by a commercial breeder when such sales are made to a commercial breeder, as defined in section 273.325, RSMo, and licensed pursuant to sections 273.325 to 273.357, RSMo;

(36) All purchases by a contractor on behalf of an entity located in another state, provided that the entity is authorized to issue a certificate of exemption for purchases to a contractor under the provisions of that state's laws. For purposes of this subdivision, the term "certificate of exemption" shall mean any document evidencing that the entity is exempt from sales and use taxes on purchases pursuant to the laws of the state in which the entity is located. Any contractor making purchases on behalf of such entity shall maintain a copy of the entity's exemption certificate as evidence of the exemption. If the exemption certificate issued by the exempt entity to the contractor is later determined by the director of revenue to be invalid for any reason and the contractor has accepted the certificate in good faith, neither the contractor or the exempt entity shall be liable for the payment of any taxes, interest and penalty due as the result of use of the invalid exemption certificate. Materials shall be exempt from all state and local sales and use taxes when purchased by a contractor for the purpose of fabricating tangible personal property which is used in fulfilling a contract for the purpose of constructing, repairing or remodeling facilities for the following:

(a) An exempt entity located in this state, if the entity is one of those entities able to issue project exemption certificates in accordance with the provisions of section 144.062; or

(b) An exempt entity located outside the state if the exempt entity is authorized to issue an exemption certificate to contractors in accordance with the provisions of that state's law and the applicable provisions of this section;

(37) Tangible personal property purchased for use or consumption directly or exclusively in research or experimentation activities performed by life science companies and so certified as such by the director of the department of economic development or the director's designees; except that, the total amount of exemptions certified pursuant to this section shall not exceed one million three hundred thousand dollars in state and local taxes per fiscal year. For purposes of this subdivision, the term "life science companies" means companies whose primary research activities are in agriculture, pharmaceuticals, biomedical or food ingredients, and whose North American Industry Classification System (NAICS) Codes fall under industry 541710 (biotech research or development laboratories), 621511 (medical laboratories) or 541940 (veterinary services). The exemption provided by this subdivision shall expire on June 30, 2003;

(38) All sales or other transfers of tangible personal property to a lessor who leases the property under a lease of one year or longer executed or in effect at the time of the sale or other transfer to an interstate compact agency created pursuant to sections 70.370 to 70.441, RSMo, or sections 238.010 to 238.100, RSMo; and

(39) Sales of tickets to any collegiate athletic championship event that is held in a facility owned or operated by a governmental authority or commission, a quasi-governmental agency, a state university or college or by the state or any political subdivision thereof, including a municipality, and that is played on a neutral site and may reasonably be played at a site located outside the state of Missouri. For purposes of this subdivision, "neutral site" means any site that is not located on the campus of a conference member institution participating in the event.

144.062. 1. With respect to exempt sales at retail of tangible personal property and materials for the purpose of constructing, repairing or remodeling facilities for: (1) a county, other political subdivision or instrumentality thereof exempt from taxation under subdivision (10) of section 39 of article III of the Constitution of Missouri; or (2) an organization sales to which are exempt from taxation under the provisions of subdivision (19) of subsection 2 of section 144.030; or (3) any institution of higher education supported by public funds or any private not-for-profit institution of higher education, exempt from taxation under subdivision (20) of subsection 2 of section 144.030; or (4) any private not-for-profit elementary or secondary school exempt from taxation under subdivision (22) of subsection 2 of section 144.030; or (5) after June 30, 2007: (a) the department of transportation; or (b) the state highways and transportation commission, hereinafter collectively referred to as exempt entities, such exemptions shall be allowed for such purchases if the purchases are related to the entities' exempt functions and activities. In addition, the sales shall not be rendered nonexempt nor shall any material supplier or contractor be obligated to pay, collect or remit sales tax with respect to such purchases made by or on behalf of an exempt entity due to such purchases being billed to or paid for by a contractor or the exempt entity contracting with any entity to render any services in relation to such purchases, including but not limited to selection of materials, ordering, pickup, delivery, approval on delivery, taking of delivery, transportation, storage, assumption of risk of loss to materials or providing warranties on materials as specified by contract, use of materials or other purchases for construction of the building or other facility, providing labor, management services, administrative services, design or technical services or advice to the exempt entity, whether or not the contractor or other entity exercises dominion or control in any other manner over the materials in conjunction with services or labor provided to the exempt entity.

2. When any exempt entity contracts for the purpose of constructing, repairing or remodeling facilities, and purchases of tangible personal property and materials to be incorporated into or consumed in the construction of the project are to be made on a tax-exempt basis, such entity shall furnish to the contractor an exemption certificate authorizing such purchases for the construction, repair or remodeling project. The form and content of such project exemption certificate shall be approved by the director of revenue. The project exemption certificate shall include but not be limited to:

(1) The exempt entity's name, address, Missouri tax identification number and signature of authorized representative;

(2) The project location, description, and unique identification number;

(3) The date the contract is entered into, which is the earliest date materials may be purchased for the project on a tax-exempt basis;

(4) The estimated project completion date; and

(5) The certificate expiration date.

Such certificate is renewable for a given project at the option of the exempt entity, only for the purpose of revising the certificate expiration date as necessary to complete the project.

3. The contractor shall furnish the certificate prescribed in subsection 2 of this section to all subcontractors, and any contractor purchasing materials shall present such certificate to all material suppliers as authorization to purchase, on behalf of the exempt entity, all tangible personal property and materials to be incorporated into or consumed in the construction of that project and no other on a tax-exempt basis. Such suppliers shall execute to the purchasing contractor invoices bearing the name of the exempt entity and the project identification number. Nothing in this section shall be deemed to exempt the purchase of any construction machinery, equipment or tools used in constructing, repairing or remodeling facilities for the exempt entity. All invoices for all personal property and materials purchased under a project exemption certificate shall be retained by the purchasing contractor for a period of five years and shall be subject to audit by the director of revenue.

4. Any excess resalable tangible personal property or materials which were purchased for the project by a contractor under a project exemption certificate but which were not incorporated into or consumed in the construction of the project shall either be returned to the supplier for credit or the appropriate sales or use tax on such excess property or materials shall be reported on a return and paid by such contractor not later than the due date of the contractor's Missouri sales or use tax return following the month in which it was determined that the materials were not to be used in the project.

5. No contractor or material supplier shall, upon audit, be required to pay tax on tangible personal property and materials incorporated into or consumed in the construction of the project, due to the failure of the exempt entity to revise the certificate expiration date as necessary to complete any work required by the contract. If it is determined that tax is owed on such property and materials due to the failure of the exempt entity to revise such certificate expiration date, the exempt entity shall be liable for the tax owed.

6. If an entity issues exemption certificates for the purchase of tangible personal property and materials which are incorporated into or consumed in the construction of its project and such entity is found not to have had the authority granted by this section to issue such exemption certificates, then such entity shall be liable for the tax owed on such personal property and materials. In addition, if an entity which does have the authority granted by this section to issue exemption certificates issues such certificates for the purchase of tangible personal property and materials which are incorporated into or consumed in the construction of a project, or part of a project, which is found not to be related to such entity's exempt functions and activities, then such entity shall be liable for the tax owed on such personal property and materials.

640.800. As used in sections 640.800 to 640.824 the following terms shall mean:

(1) "Alternative fuel", any of the following:

(a) Biodiesel used separately or in mixtures of twenty percent known as B-20 or up to B-100;

(b) Electric;

(d) Fuels derived from biological materials such as ethanol, biodiesel, or other recognized additives;

(e) Hydrogen;

(f) Natural gas either as compressed natural or liquefied natural gas;

(g) Propane liquefied petroleum gas;

(2) "Alternative fuel infrastructure project", fueling stations or sites, fueling tanks and trucks, charging stations, and other equipment used to fuel alternative fuel vehicles or produce alternative fuels;

(3) "Alternative fuel vehicle", a vehicle that has been developed for, and is intended to be operated using one or more alternative fuel;

(4) "Alternative fuel provider", a person or organization that produces or sells alternative fuel;

(5) "Bi-fuel vehicle", an alternative fuel vehicle capable of running on either an alternative fuel or gasoline;

(6) "Board", the clean American fuel board created under section 640.803;

(7) "Conventional vehicle", a vehicle running only on gasoline, reformulated gasoline, or diesel fuel;

(8) "Dedicated vehicle", an alternative fuel vehicle that can only be operated using an alternative fuel;

(9) "Department", the department of natural resources;

(10) "Director", the director of the department of natural resources;

(11) "Dual-fuel vehicle", an alternative fuel vehicle capable of running on an alternative fuel and either gasoline or diesel during some portion of its operations;

(12) "Flex-fuel vehicle" an alternative fuel vehicle capable of operating on gasoline fuel with an alternative fuel in various combinations;

(13) "Fund", the alternative fuel vehicle revolving fund created under section 640.812;

(14) "Hybrid vehicle", a vehicle that is powered by an electric motor and an engine combusting an alternative fuel, gasoline, or diesel fuel;

(15) "Incremental cost" or "differential cost", the difference in price between an alternative fuel vehicle and a conventional vehicle of the same make and model as provided by the original equipment manufacturer or the difference in price between conventional fuels such as gasoline and diesel or an alternative fuel;

(16) "Person", an individual, a business, a corporation, unit of municipal or county government, but does not mean any unit of the federal government.

640.803. There is hereby established the "The Clean American Fuel Board". The board shall consist of eight members. The governor shall appoint seven members to the board, one member from the ethanol industry, one member from the natural gas industry, one member from the liquefied petroleum gas industry, one member from the biodiesel industry, one member from the fuel marketer/retailer industry, one member from the Kansas City Regional Clean City Coalition and one from the St. Louis Clean City Coalition. The director shall be an ex officio member of the board as well as its chairperson.

640.806. Members of the board shall not be compensated for their services, but they shall be reimbursed for actual and necessary expenses incurred in the performance of their duties. The members of the board shall elect one member as vice chairperson, such member shall serve as chairperson in the absence of the director. Each member appointed by the governor shall serve for a term of two years and may be reappointed by the governor for an additional term of two years. The department of natural resources shall provide staff to the board and aid it in the performance of its duties.

640.809. The specific duties of the board shall include, but not be limited to, the following:

(1) Establishing and administering policies determined in consultation with other state agencies, including the departments of transportation, environment, and natural resources as well as interested organizations and businesses to comply with environmental and energy regulations of the United States Department of Energy and the Environmental Protection Agency;

(2) Preparing a report, including, but not limited to, a calculation of fuel cost differential rebates and designation of certified conversion and original equipment manufacturer technologies. Such report shall be prepared by January 1, 2007, and updated every year thereafter. Such report shall be made available to the governor, the general assembly, the department of natural resources, and the department of transportation;

(3) Preparing a report on the number of alternative fuel vehicles registered in Missouri and of the expenditure of funds under sections 640.800 to 640.824. Such report shall be prepared by January 1, 2007, and updated every year thereafter. Such report shall be made available to the governor, the general assembly, the department of natural resources, and the department of transportation;

(4) Establishing a procedure for persons to apply for grants from the fund under sections 640.815, and selecting persons who shall receive such grants;

(5) Establishing a procedure, consistent with the requirements under section 640.821, for persons to apply for rebates from the fund under section 640.818, and selecting persons who shall receive such rebates.

640.812. 1. There is hereby created in the state treasury the "Alternative Fuel Vehicle Revolving Fund", which shall consist of moneys appropriated to the fund by the general assembly, and any other moneys donated to or accepted by the board. The state treasurer shall be custodian of the fund and may approve disbursements from the fund in accordance with sections 30.170 and 30.180, RSMo. Upon appropriation, money in the fund shall be used solely for the administration of sections 640.800 to 640.824.

2. Notwithstanding the provisions of section 33.080, RSMo, to the contrary, any moneys remaining in the fund at the end of the biennium shall not revert to the credit of the general revenue fund.

3. The state treasurer shall invest moneys in the fund in the same manner as other funds are invested. Any interest and moneys earned on such investments shall be credited to the fund.

640.815. 1. A person may be eligible for a grant from the fund in an amount of up to twenty-five percent of the cost of an alternative fuel vehicle infrastructure project that is selected by the board. Such grant shall not exceed one hundred thousand dollars per project.

2. A person may be eligible for a grant from the fund in an amount of up to twenty-five percent of the total cost of installing a public access American fuels infrastructure project. Such grant shall not exceed one hundred thousand dollars per project, and no person shall receive more than two hundred thousand annually.

3. Any funds not used by a grantee under this section shall be returned to the treasurer and deposited into the fund.

4. To qualify for a grant under this section, the infrastructure shall be accessible to the public or serve vehicles used by the public, or for the public benefit by reducing harmful air emissions. Priority shall be given to projects serving ten or more vehicles in counties at risk for nonattainment penalties under federal Environmental Protection Agency regulations.

5. Up to ten percent of the grants from the fund may be used for education awareness and outreach activities such as the "Clean Cities", Missouri Green Fleets.

640.818. 1. A person who has purchased an alternative fuel vehicle weighing less that eight thousand five hundred pounds gross weight, either from an original equipment manufacturer dealer or that has been retrofitted with a kit certified by the board may be eligible for up to eighteen thousand dollars in rebates, in a year, to be made from the fund. Such rebates shall be:

(1) Up to eighty percent of the incremental cost for an original equipment manufacturer dedicated vehicle, with a maximum of three thousand dollars per vehicle;

(2) Up to eighty percent of the incremental cost for an original equipment manufacturer bi-fuel vehicle, with a maximum of two thousand dollars per vehicle;

(3) Up to ten percent of the incremental cost for a hybrid vehicle, with a maximum of five hundred dollars per vehicle;

(4) Up to ten percent of the total purchase price for all other dedicated alternative fuel vehicles and hybrid vehicles that have no comparable conventional model on which to base incremental cost calculations, with a maximum of one thousand dollars per vehicle.

2. A person who has purchased an alternative fuel vehicle weighing more than eight thousand five hundred pounds gross weight, either through an original equipment manufacturer or that has been retrofitted with a kit certified by the board, may be eligible for the following rebates from the fund:

(1) Up to fifty percent of the incremental cost for a dedicated vehicle, with a maximum of ten thousand dollars per vehicle;

(2) Up to fifty percent of the incremental cost for a bi-fuel, flex-fuel, or hybrid vehicle, with a maximum of ten thousand dollars per vehicle;

(3) Up to ten percent of the total purchase price for all other dedicated alternative fuel vehicles and hybrid vehicles designated as eligible by the administering agency that have no comparable conventional model on which to base incremental cost calculations, with a maximum of ten thousand per vehicle.

3. A person who leases for at least three years an alternative fuel vehicle shall be eligible for the rebate in subsections 1 and 2 of this section in the same manner as those persons who purchase an alternative fuel vehicle.

4. A person may be eligible for a yearly rebate, to be made from the fund, in the amount equal to ten percent of the person's cost of alternative fuel with a maximum of five thousand dollars a year. To be eligible for such rebate, fuel shall be purchased from a Missouri fuel provider.

640.821. 1. An application for a rebate under subsection 1 or 2 of section 640.818 shall be made upon a form furnished by the department. Such form shall include:

(1) Evidence of the ownership and license registration of the alternative fuel vehicle;

(2) A signed statement that the evidence of ownership and license registration and all other representations in the application are made under oath or affirmation and are true and correct to the best knowledge and belief of the person applying, subject to the penalties of making a false affidavit or declaration;

(3) Any other information the board deems necessary to determine eligibility for rebate under subsection 1 or 2 of section 640.818.

2. An application for a rebate under subsection 3 of section 640.818 shall be made upon a form furnished by the department. Such form shall include:

(1) Evidence that the person applying for the rebate is the lessee of the alternative fuel vehicle;

(2) A signed statement that the evidence of lessee status and all other representations in the application are made under oath or affirmation and are true and correct to the best knowledge and belief of the person applying, subject to the penalties of making a false affidavit or declaration;

(3) Any other information the board deems necessary to determine eligibility for rebate under subsection 3 of section 640.818.

3. An application for a rebate under subsection 4 of section 640.818 shall be made upon a form furnished by the department. Such form shall include:

(1) Evidence of the person's purchase of alternative fuel, including copies of or original fuel receipts;

(2) A signed statement that the evidence of purchase of alternative fuel and all other representations in the application are made under oath or affirmation and are true and correct to the best knowledge and belief of the person applying, subject to the penalties of making a false affidavit or declaration;

(3) Any other information the board deems necessary to determine eligibility for rebate under subsection 4 of section 640.818.

640.824. 1. The department shall promulgate rules necessary for the administration of sections 640.800 to 640.824 and necessary to aid the board in its functions under sections 640.800 to 640.824.

2. Any rule or portion of a rule, as that term is defined in section 536.010, RSMo, 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, RSMo, and, if applicable, section 536.028, RSMo. This section and chapter 536, RSMo, are nonseverable and if any of the powers vested with the general assembly pursuant to chapter 536, RSMo, 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, 2006, shall be invalid and void.

640.827. Pursuant to section 23.253, RSMo, of the Missouri Sunset Act:

(1) The provisions of the new program authorized under sections 640.800 to 640.824 shall automatically sunset six years after the effective date of sections 640.800 to 640.824 unless reauthorized by an act of the general assembly; and

(2) If such program is reauthorized, the program authorized under sections 640.800 to 640.824 shall automatically sunset twelve years after the effective date of the reauthorization of sections 640.800 to 640.824; and

(3) This section shall terminate on September first of the calendar year immediately following the calendar year in which the program authorized under sections 640.800 to 640.824 is sunset.

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