S.B. 253 Enrolled

SALES TAX REDUCTION, FUEL TAXES, AND
REPEAL OF ENVIRONMENTAL
SURCHARGE ON PETROLEUM
1997 GENERAL SESSION
STATE OF UTAH
Sponsor: LeRay McAllister
AN ACT RELATING TO REVENUE AND TAXATION; INCREASING VARIOUS FUEL TAX
RATES; REDUCING THE STATE SALES AND USE TAX RATE; REPEALING THE
ENVIRONMENTAL SURCHARGE ON PETROLEUM; MAKING TECHNICAL
CHANGES; PROVIDING AN EFFECTIVE DATE; AND PROVIDING A
COORDINATION CLAUSE.
This act affects sections of Utah Code Annotated 1953 as follows:
AMENDS:
19-6-409, as last amended by Chapter 297, Laws of Utah 1994
19-6-411, as last amended by Chapter 162, Laws of Utah 1996
59-12-103, as last amended by Chapters 82, 126, 186, 320, 338, 341 and 342, Laws of
Utah 1996
59-13-201, as last amended by Chapter 78, Laws of Utah 1995
59-13-301, as last amended by Chapter 79, Laws of Utah 1994
59-13-304, as last amended by Chapters 79 and 113, Laws of Utah 1994
REPEALS:
19-6-410, as last amended by Chapter 1, Laws of Utah 1993, Second Special Session
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 19-6-409 is amended to read:
19-6-409. Petroleum Storage Tank Fund created -- Source of revenues.
(1) (a) There is created an expendable trust fund entitled the Petroleum Storage Tank Fund.
(b) The sole sources of revenues for the fund are:
(i) petroleum storage tank fees under Section 19-6-411;
(ii) underground storage tank installation company permit fees under Section 19-6-411;

and
[(iii) the environmental surcharge assessed under Section 19-6-410; and]
[(iv)] (iii) costs recovered under this part.
(c) Interest earned on fund monies shall be deposited into the fund.
(2) Fund monies may be used to pay:
(a) costs as provided in this part; and
(b) for the administration of the fund [and the environmental surcharge].
(3) Costs for the administration of the fund [and the environmental surcharge] shall be
appropriated by the Legislature.
(4) The executive secretary may expend monies from the fund for:
(a) legal and claims adjusting costs incurred by the state in connection with claims,
judgments, awards, or settlements for bodily injury or property damage to third parties;
(b) costs incurred by the state risk manager in determining the actuarial soundness of the
fund; and
(c) other costs as provided in this part.
(5) Money in the Petroleum Storage Tank Fund in excess of $18,000,000 may be
appropriated by the Legislature to either or both of the following:
(a) the loan fund for purposes stated in Section 19-6-405.3; or
(b) the department to be applied to the costs of investigation, abatement, and corrective
action regarding releases not covered by the fund and not on the national priority list as defined in
Section 19-6-302.
(6) The board shall:
(a) establish by rule criteria for determining priorities for taking action or expending money
under Subsection (5)(b); and
(b) give due emphasis to releases that present a threat to public health or the environment.
(c) All funds appropriated to the department under Subsections (3) and (5)(b) that are not
expended or committed at the end of the fiscal year lapse into the Underground Storage Tank
Account.

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Section 2. Section 19-6-411 is amended to read:
19-6-411. Petroleum storage tank fee.
(1) In addition to the underground storage tank registration fee paid in Section 19-6-408, the
owner or operator of a petroleum storage tank shall also pay an annual petroleum storage tank fee
to the department for each facility as follows:
(a) on and after July 1, 1990, through June 30, 1993, an annual fee of:
(i) $250 for each tank:
(A) located at a facility engaged in petroleum production, refining, or marketing; or
(B) with an annual monthly throughput of more than 10,000 gallons; and
(ii) $125 for each tank:
(A) not located at a facility engaged in petroleum production, refining, or marketing; and
(B) with an annual monthly throughput of 10,000 gallons or less;
(b) on and after July 1, 1993, through June 30, 1994, an annual fee of:
(i) $150 for each tank:
(A) located at a facility engaged in petroleum production, refining, or marketing; or
(B) with an average monthly throughput of more than 10,000 gallons; and
(ii) $75 for each tank:
(A) not located at a facility engaged in petroleum production, refining, or marketing; and
(B) with an average monthly throughput of 10,000 gallons or less; and
(c) on and after July 1, 1994, an annual fee of:
(i) $50 for each tank in a facility with an annual facility throughput rate of 400,000 gallons
or less;
(ii) $150 for each tank in a facility with an annual facility throughput rate of more than
400,000 gallons; and
(iii) $150 for each tank in a facility regarding which:
(A) the facility's throughput rate is not reported to the department within 30 days after the
date this throughput information is requested by the department; or
(B) the owner or operator elects to pay the fee under this subsection, rather than report under

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Subsection (1)(c)(i) or (ii).
(2) (a) As a condition of permitting, each underground storage tank installation company
shall pay to the department the following fees to be deposited in the fund:
(i) an annual fee of:
(A) $2,000 per underground storage tank installation company if the installation company
has installed 15 or fewer underground storage tanks within the 12 months preceding the fee due date;
or
(B) $4,000 per underground storage tank installation company if the installation company
has installed 16 or more underground storage tanks within the 12 months preceding the fee due date;
and
(ii) $200 for each underground storage tank installed in the state, to be paid prior to
completion of installation.
(b) The board shall make rules specifying which portions of an underground storage tank
installation shall be subject to the permitting fees when less than a full underground storage tank
system is installed.
(3) (a) Fees under Subsections (1) and (2)(a)(i) are due on or before July 1 annually.
(b) If the department does not receive the fee on or before July 1 or before the installation
under Subsection (2)(a)(ii) is completed, the department shall impose a late penalty of $60 per
facility or per installation company.
(c) The fee and the late penalty accrue interest at 12% per annum.
(4) (a) If the fee, late penalty, and all accrued interest due under Subsection (3)(a) are not
received by the department within 60 days after July 1, the issued certificate of compliance or
underground storage tank installation company permit, and eligibility to receive payments for claims
against the fund lapse on the 61st day after July 1.
(b) If the fee, late penalty, and all accrued interest due under Subsection (2)(a)(ii) are not
received by the department within 60 days after the underground storage tank installation is
completed, the issued underground storage tank installation company permit and eligibility to
receive payments for claims against the fund lapse on the 61st day after the tank installation is

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completed.
(c) The executive secretary may not reissue the certificate of compliance or underground
storage tank installation company permit until the fee, late penalty, and all accrued interest are
received by the department.
(5) If the state risk manager determines the fees established in Subsections (1) and (2) [and
the environmental surcharge established in Section 19-6-410] are insufficient to maintain the fund
on an actuarially sound basis, he shall petition the Legislature to increase the petroleum storage tank
and underground storage tank installation company permit fees to a level that will sustain the fund
on an actuarially sound basis.
(6) The provisions of this subsection take precedence over all other provisions of this
section:
(a) when a petroleum storage tank is initially registered with the executive secretary, the
department shall assess and collect a petroleum storage tank fee of $250 from the owner or operator
for that fiscal year; and
(b) the department may not assess any other petroleum storage tank fee from the owner or
operator for that fiscal year.
(7) The executive secretary may waive all or part of the fees required for a petroleum storage
tank under this section if no fuel has been dispensed from the tank on or after July 1, 1991.
(8) (a) Each petroleum storage tank or underground storage tank, for which payment of fees
has been made and other requirements have been met to qualify for a certificate of compliance under
this part, shall be issued a form of identification, as determined by the board under Subsection (8)(b).
(b) The board shall make rules providing for the identification, through a tag or other readily
identifiable method, of petroleum storage tanks or underground storage tanks under Subsection (8)(a)
that qualify for a certificate of compliance under this part.
Section 3. Section 59-12-103 is amended to read:
59-12-103. Sales and use tax base -- Rate.
(1) There is levied a tax on the purchaser for the amount paid or charged for the following:
(a) retail sales of tangible personal property made within the state;

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(b) amount paid to common carriers or to telephone or telegraph corporations, whether the
corporations are municipally or privately owned, for:
(i) all transportation;
(ii) intrastate telephone service; or
(iii) telegraph service;
(c) gas, electricity, heat, coal, fuel oil, or other fuels sold for commercial use;
(d) gas, electricity, heat, coal, fuel oil, or other fuels sold for residential use;
(e) meals sold;
(f) (i) admission or user fees for theaters, movies, operas, museums, planetariums, shows
of any type or nature, exhibitions, concerts, carnivals, amusement parks, amusement rides, circuses,
menageries, fairs, races, contests, sporting events, dances, boxing and wrestling matches, closed
circuit television broadcasts, billiard or pool parlors, bowling lanes, golf and miniature golf, golf
driving ranges, batting cages, skating rinks, ski lifts, ski runs, ski trails, snowmobile trails, tennis
courts, swimming pools, water slides, river runs, jeep tours, boat tours, scenic cruises, horseback
rides, sports activities, or any other amusement, entertainment, recreation, exhibition, cultural, or
athletic activity;
(ii) the tax imposed on admission or user fees in Subsection (1)(f)(i) does not affect an
entity's sales tax exempt status under Section 59-12-104.1;
(g) services for repairs or renovations of tangible personal property or services to install
tangible personal property in connection with other tangible personal property;
(h) except as provided in Subsection 59-12-104(8), cleaning or washing of tangible personal
property;
(i) tourist home, hotel, motel, or trailer court accommodations and services for less than 30
consecutive days;
(j) laundry and dry cleaning services;
(k) leases and rentals of tangible personal property if the property situs is in this state, if the
lessee took possession in this state, or if the property is stored, used, or otherwise consumed in this
state; and

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(l) tangible personal property stored, used, or consumed in this state.
(2) Except for Subsection (1)(d), the rates of the tax levied under Subsection (1) shall be:
(a) 5% through June 30, 1994; [and]
(b) 4.875% [from and after] beginning on July 1, 1994[.] through June 30, 1997; and
(c) 4.75% beginning on July 1, 1997.
(3) The rates of the tax levied under Subsection (1)(d) shall be 2% from and after January
1, 1990.
(4) (a) From January 1, 1990, through December 31, 1999, there shall be deposited in an
Olympics special revenue fund or funds as determined by the Division of Finance under Section
51-5-4, for the use of the Utah Sports Authority created under Title 63A, Chapter 7, Utah Sports
Authority Act:
(i) the amount of sales and use tax generated by a 1/64% tax rate on the taxable items and
services under Subsection (1);
(ii) the amount of revenue generated by a 1/64% tax rate under Section 59-12-204 on the
taxable items and services under Subsection (1); and
(iii) interest earned on the amounts under Subsections (4)(a)(i) and (ii).
(b) These funds shall be used:
(i) by the Utah Sports Authority as follows:
(A) to the extent funds are available, to transfer directly to a debt service fund or to
otherwise reimburse to the state any amount expended on debt service or any other cost of any bonds
issued by the state to construct any public sports facility as defined in Section 63A-7-103;
(B) to pay for the actual and necessary operating, administrative, legal, and other expenses
of the Utah Sports Authority, but not including protocol expenses for seeking and obtaining the right
to host the Winter Olympic Games; and
(C) the Utah Sports Authority may not expend, loan, or pledge in the aggregate more than
$59,000,000 of sales and use tax deposited into the Olympics special revenue fund under Subsection
(4)(a) unless the Legislature appropriates additional funds from the Olympics special revenue fund
to the Utah Sports Authority; or

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(ii) to pay salary, benefits, or administrative costs associated with the State Olympic
Coordinator under Subsection 63A-10-103(3), except that the salary, benefits, or administrative costs
may not be paid from the sales and tax revenues generated by municipalities or counties and
deposited under Subsection (4)(a)(ii).
(c) A payment of salary, benefits, or administrative costs under Subsection 63A-10-103(3)
is not considered an expenditure of the Utah Sports Authority.
(d) If the Legislature appropriates additional funds under Subsection (4)(b)(i)(C), the
authority may not expend, loan, pledge, or enter into any agreement to expend, loan, or pledge the
appropriated funds unless the authority:
(i) contracts in writing for the full reimbursement of the monies to the Olympics special
revenue fund by a public sports entity or other person benefitting from the expenditure; and
(ii) obtains a security interest that secures payment or performance of the obligation to
reimburse.
(e) A contract or agreement entered into in violation of Subsection (4)(d) is void.
(f) Any monies in the Olympics special revenue fund or funds as of October 1, 2002, shall
be dispersed as follows:
(i) 50% shall be deposited into the General Fund; and
(ii) 50% to counties, cities, or towns in proportion to the sales and use taxes generated by
the county, city, or town and deposited under Subsection (4)(a)(ii).
(5) (a) From July 1, 1997, the annual amount of sales and use tax generated by a 1/8% tax
rate on the taxable items and services under Subsection (1) shall be used as follows:
(i) 50% shall be used for water and wastewater projects as provided in Subsections (5)(b)
through (f); and
(ii) 50% shall be used for transportation projects as provided in Subsections (5)(g) through
(h).
(b) Five hundred thousand dollars each year shall be transferred to the Agriculture Resource
Development Fund created in Section 4-18-6.
(c) Fifty percent of the remaining amount generated by 50% of the 1/8% tax rate shall be

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transferred to the Water Resources Conservation and Development Fund created in Section 73-10-24
for use by the Division of Water Resources. In addition to the uses allowed of the fund under
Section 73-10-24, the fund may also be used to:
(i) provide a portion of the local cost share, not to exceed in any fiscal year 50% of the funds
made available to the Division of Water Resources under this section, of potential project features
of the Central Utah Project;
(ii) conduct hydrologic and geotechnical investigations by the Department of Natural
Resources in a cooperative effort with other state, federal, or local entities, for the purpose of
quantifying surface and ground water resources and describing the hydrologic systems of an area in
sufficient detail so as to enable local and state resource managers to plan for and accommodate
growth in water use without jeopardizing the resource;
(iii) fund state required dam safety improvements; and
(iv) protect the state's interest in interstate water compact allocations, including the hiring
of technical and legal staff.
(d) Twenty-five percent of the remaining amount generated by 50% of the 1/8% tax rate
shall be transferred to the Utah Wastewater Loan Program subaccount created in Section 73-10c-5
for use by the Water Quality Board to fund wastewater projects as defined in Section 73-10b-2.
(e) Twenty-five percent of the remaining amount generated by 50% of the 1/8% tax rate shall
be transferred to the Drinking Water Loan Program subaccount created in Section 73-10c-5 for use
by the Division of Drinking Water to:
(i) provide for the installation and repair of collection, treatment, storage, and distribution
facilities for any public water system, as defined in Section 19-4-102;
(ii) develop underground sources of water, including springs and wells; and
(iii) develop surface water sources.
(f) Notwithstanding Subsections (5)(b), (c), (d), and (e), $100,000 of the remaining amount
generated by 50% of the 1/8% tax rate each year shall be transferred as dedicated credits to the
Division of Water Rights to cover the costs incurred in hiring legal and other technical staff for the
adjudication of water rights. Any remaining balance at the end of each fiscal year shall lapse back

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to the contributing funds on a prorated basis.
(g) Fifty percent of the 1/8% tax rate shall be transferred to the Class B and Class C Roads
Account to be expended as provided in Title 27, Chapter 12, Article 11, except as provided in
Subsection (5)(h).
(h) (i) If HB 53, "Transportation Corridor Preservation," passes in the 1996 General Session,
$500,000 each year shall be transferred to the Transportation Corridor Preservation Revolving Loan
Fund, and if HB 121, "State Park Access Roads," passes in the 1996 General Session, from July 1,
1997, through June 30, 2006, $500,000 shall be transferred to the Department of Transportation for
the State Park Access Highways Improvement Program. The remaining amount generated by 50%
of the 1/8% tax rate shall be transferred to the Class B and Class C Roads Account.
(ii) At least 50% of the money transferred to the Transportation Corridor Preservation
Revolving Loan Fund under Subsection (5)(h)(i) shall be used to fund loan applications made by the
Department of Transportation at the request of local governments.
Section 4. Section 59-13-201 is amended to read:
59-13-201. Rate -- Tax basis -- Exemptions -- Revenue deposited in the Transportation
Fund -- Restricted account for boating uses -- Refunds.
(1) (a) [A] (i) Beginning on May 5, 1997, through June 30, 1997, a tax is imposed at the rate
of [19] 19 1/2 cents per gallon upon all motor fuel that is sold, used, or received for sale or use in
this state. [If any change is made in this tax amount, the tax on fuel under Subsection (1)(b),
Subsection 59-13-301(1)(a), and the fee for a special fuel tax exemption certificate under Subsection
59-13-304(2)(a) are increased or decreased by the same percentage of change as is made to the tax
under this Subsection (1)(a).]
(ii) Beginning on July 1, 1997, a tax is imposed at the rate of 24 1/2 cents per gallon upon
all motor fuel that is sold, used, or received for sale or used in this state.
(b) A tax is imposed at the rate of [3 cents per gallon] 3/19 of the rate imposed under
Subsection (1)(a), rounded up to the nearest penny, upon all motor fuels that meet the definition of
clean fuel in Section 59-13-102 and are sold, used, or received for sale or use in this state. [If any
change is made to the motor fuel tax under Subsection (1)(a), the tax under this Subsection (1)(b)

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is increased or decreased by the same percentage of change, rounded up to the next penny.]
(2) Any increase or decrease in tax rate applies to motor fuel that is imported to the state or
sold at refineries in the state on or after the effective date of the rate change.
(3) (a) No tax is imposed upon:
(i) motor fuel that is brought into and sold in this state in original packages as purely
interstate commerce sales;
(ii) motor fuel that is exported from this state if proof of actual exportation on forms
prescribed by the commission is made within 180 days after exportation;
(iii) motor fuel or components of motor fuel that is sold and used in this state and distilled
from coal, oil shale, rock asphalt, bituminous sand, or solid hydrocarbons located in this state; or
(iv) motor fuel that is sold to the United States government, this state, or the political
subdivisions of this state where sale and delivery is made in quantities of 750 gallons or more.
(b) For purposes of this subsection, the state and its political subdivisions may make
collective purchases for purposes of meeting the 750 gallon requirement, and the state and political
subdivisions may provide for this purchase in any manner approved by the commission.
(4) The commission may either collect no tax on motor fuel exported from the state or, upon
application, refund the tax paid.
(5) (a) All revenue received by the commission under this part shall be deposited daily with
the state treasurer and credited to the Transportation Fund.
[(b) The revenue received from the five cent per gallon increase effective April 1, 1987, shall
be used for the repair of highways, roads, and streets.]
[(c)] (b) An appropriation from the Transportation Fund shall be made to the commission
to cover expenses incurred in the administration and enforcement of this part and the collection of
the motor fuel tax.
(6) (a) The commission shall determine what amount of motor fuel tax revenue is received
from the sale or use of motor fuel used in motorboats registered under the provisions of the State
Boating Act, and this amount shall be deposited in a restricted revenue account in the General Fund
of the state.

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(b) The funds from this account shall be used for the construction, improvement, operation,
and maintenance of state-owned boating facilities and for the payment of the costs and expenses of
the Division of Parks and Recreation in administering and enforcing the State Boating Act.
(7) (a) The United States government or any of its instrumentalities, this state, or a political
subdivision of this state that has purchased motor fuel from a licensed distributor or from a retail
dealer of motor fuel and has paid the tax on the motor fuel as provided in this section is entitled to
a refund of the tax and may file with the commission for a quarterly refund.
(b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
commission shall make rules governing the application and refund provided for in Subsection (7)(a).
(8) (a) The commission shall refund annually into the Off-Highway Vehicle Account in the
General Fund an amount equal to the lesser of the following:
(i) .5% of the motor fuel tax revenues collected under this section; or
(ii) $600,000.
(b) This amount shall be used as provided in Section 41-22-19.
(c) Subsection (8) sunsets on July 1, 2010.
Section 5. Section 59-13-301 is amended to read:
59-13-301. Tax basis -- Rate -- Exemptions -- Revenue deposited with treasurer and
credited to Transportation Fund.
(1) [(a)] A tax is imposed at the same rate [of 19 cents per gallon] imposed under Subsection
59-13-201(1)(a) on the sale or use of special fuel other than clean [special] fuel, which is exempt
upon the purchase of an exemption certificate under Section 59-13-304.
[(b) If any change is made in the motor fuel tax rate under Subsection 59-13-201(1)(a), the
tax rate under Subsection (1)(a) of this section is increased or decreased by the same percentage of
change.]
(2) No tax is imposed upon special fuel which:
(a) is sold or used for any purpose other than to operate or propel a motor vehicle upon the
public highways of the state, but this exemption applies only in those cases where the purchasers or
the users of special fuel establish to the satisfaction of the commission that the special fuel was used

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for purposes other than to operate a motor vehicle upon the public highways of the state;
(b) is sold to the United States government or any of its instrumentalities or to this state or
any of its political subdivisions; or
(c) is sold and delivered into a motor vehicle for which the owner or operator possesses an
unexpired special fuel tax exemption certificate issued to that owner or operator by the commission
as provided in Section 59-13-304 for vehicles powered by certain special fuels.
(3) The special fuel tax shall be paid by the user-dealer where the special fuel is sold within
the state and delivered directly into the fuel supply tank of a motor vehicle unless a current special
fuel exemption certificate has been issued for the motor vehicle under Section 59-13-304.
(4) (a) The special fuel tax shall be paid by every user who is required by Sections
59-13-303 and 59-13-305 to obtain a special fuel permit and file special fuel tax reports.
(b) The user shall receive a refund for special fuel taxes paid to the user-dealer on purchases
made which are delivered into vehicles and for which special fuel tax liability is reported.
(5) (a) All revenue received by the commission from taxes and license fees under this part
shall be deposited daily with the state treasurer and credited to the Transportation Fund.
[(b) The revenue received from the five cent per gallon increase effective April 1, 1987, shall
be used for the repair of highways, roads, and streets.]
[(c)] (b) An appropriation from the Transportation Fund shall be made to the commission
to cover expenses incurred in the administration and enforcement of this part and the collection of
the special fuel tax.
Section 6. Section 59-13-304 is amended to read:
59-13-304. Exemptions from special fuel tax -- Certificate required -- Fees for
certificates -- Inspection of vehicles.
(1) (a) A user of special fuel who owns a vehicle powered by a clean fuel as defined under
Section 59-13-102, may receive an exemption from the special fuel tax imposed under Section
59-13-301.
(b) The commission determines if a user shall receive this exemption.
(c) A user who receives this exemption shall annually purchase from the commission a

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special fuel tax exemption certificate for each vehicle owned that is described under Subsection
(1)(a).
(d) Special fuel tax exemption certificates are provided to encourage the use of clean fuels
to reduce air pollution.
(2) (a) The fee for a special fuel tax exemption certificate is:
(i) [$70] 70/.19 of the tax per gallon imposed under Subsection 59-13-201(1)(a), rounded
up to the nearest dollar, for qualified motor vehicles as defined under Section 59-13-102; and
(ii) [$36] 36/.19 of the tax per gallon imposed under Subsection 59-13-201(1)(a), rounded
up to the nearest dollar, for other vehicles.
[(b) When any increase or decrease is made in the motor fuel tax under Subsection
59-13-201(1)(a), that same percentage of increase or decrease applies to the fee for a certificate under
Subsection (2)(a), rounded to the nearest dollar.]
[(c)] (b) The commission may require each vehicle to be inspected for safe operation before
issuing the exemption certificate.
[(d)] (c) Each vehicle shall be equipped with an approved and properly installed carburetion
system if it is powered by a fuel that is gaseous at standard atmospheric conditions.
Section 7. Repealer.
This act repeals:
Section 19-6-410, Environmental surcharge on petroleum.
Section 8. Effective date.
This act takes effect on July 1, 1997, except that the amendments to Sections 19-6-409,
19-6-411, and 59-13-201 and the repeal of Section 19-6-410 take effect on May 5, 1997.
Section 9. Coordination clause.
If this bill and H.B. 117, Underground Storage Tank Funding, both pass, it is the intent of
the Legislature that the amendments to Sections 19-6-409 and 19-6-411 in H.B. 117 supersede the
amendments to Sections 19-6-409 and 19-6-411 in this bill.

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