Senate Bill No. 87 - Motor Fuel Tax Summary

• Modifies Michigan's motor fuel tax to implement a variable tax rate equal to 10.6% of the average wholesale price of unleaded regular gasoline, rounded up to the nearest 1/10 of 1 cent, with a rate ceiling of 50 cents per gallon and a rate floor of 37 cents per gallon, beginning the second calendar quarter after the effective date.

• Establishes initial tax rate of 37 cents per gallon effective on the bill's effective date, with annual rate adjustments limited to changes of no more than 1 cent per gallon year-over-year during the first 12 months, then allowing unlimited adjustments thereafter while respecting the rate floor and ceiling.

• Adds definitions for "applicable percentage" (10.6%), "average wholesale price," "rate ceiling," and "rate floor" to the motor fuel tax act and modifies existing definitions related to motor fuel taxation and supplier requirements.

• Implements a supplemental excise tax on motor fuel if the federal government reduces or discontinues the federal excise tax under Internal Revenue Code section 4081, with the state tax rate equal to the amount of federal tax reduction.

• Repeals eight sections of the existing motor fuel tax act and ties the bill's effectiveness to the enactment of Senate Bill No. 88 and one additional bill of the 97th Legislature.