H.B. 58

1

SEVERANCE TAX AMENDMENTS
2 2008 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: John Dougall
5 Senate Sponsor: ____________
6
7 LONG TITLE
8 Committee Note:
9 The Revenue and Taxation Interim Committee recommended this bill.
10 The Utah Tax Review Commission recommended this bill.
11 Membership: 6 legislators 10 non-legislators
12 Legislative Vote: 6 voting for 0 voting against 0 absent
13 General Description:
14 This bill provides for the disposition of certain revenues from severance taxes.
15 Highlighted Provisions:
16 This bill:
17 . provides that certain severance tax revenues that exceed a base amount are
18 deposited into the permanent state trust fund or Severance Tax Holding Account;
19 . provides that the Division of Finance increase or decrease the base amount for
20 inflation;
21 . defines terms; and
22 . makes technical changes.
23 Monies Appropriated in this Bill:
24 None
25 Other Special Clauses:
26 This bill takes effect on July 1, 2008.
27 Utah Code Sections Affected:

28 AMENDS:
29 59-5-115, as last amended by Laws of Utah 1996, Chapter 135
30 59-5-215, as enacted by Laws of Utah 1988, Chapter 4
31 63-97a-102, as enacted by Laws of Utah 2007, Chapter 384
32 63-97a-201, as enacted by Laws of Utah 2007, Chapter 384
33 63-97a-202, as enacted by Laws of Utah 2007, Chapter 384
34 ENACTS:
35 63-97a-103, Utah Code Annotated 1953
36 63-97a-301, Utah Code Annotated 1953
37
38 Be it enacted by the Legislature of the state of Utah:
39 Section 1. Section 59-5-115 is amended to read:
40 59-5-115. Disposition of taxes collected -- Credit to General Fund.
41 All taxes imposed and collected under Section 59-5-102 shall be paid to the
42 commission, [and] promptly remitted to the state treasurer, and except those taxes otherwise
43 allocated under Section 59-5-116 , [or] 59-5-119 , or 63-97a-301 , credited to the General Fund.
44 Section 2. Section 59-5-215 is amended to read:
45 59-5-215. Disposition of taxes collected -- Credit to General Fund.
46 All taxes imposed and collected under Section 59-5-202 shall be paid to the
47 commission, [and] promptly remitted to the state treasurer, [to be] and except those taxes
48 otherwise allocated under Section 63-97a-301 , credited to the General Fund.
49 Section 3. Section 63-97a-102 is amended to read:
50 63-97a-102. Definitions.
51 As used in this chapter:
52 (1) "Infrastructure and Economic Diversification Investment Account" means the
53 Infrastructure and Economic Diversification Investment Account created in Section
54 63-97a-201 .
55 (2) "Mining base amount" means:
56 (a) $6,000,000 for fiscal year 2008-09; and
57 (b) for each fiscal year beginning on or after July 1, 2009, the amount determined by
58 the Division of Finance as described in Section 63-97a-103 .

59 (3) "Oil and gas base amount" means:
60 (a) $35,000,000 for fiscal year 2008-09; and
61 (b) for each year beginning on or after July 1, 2009, the amount determined by the
62 Division of Finance as described in Section 63-97a-103 .
63 [(2)] (4) "Permanent state trust fund" means the permanent state trust fund created
64 under Utah Constitution Article XXII, Section 4.
65 [(3)] (5) "Severance Tax Holding Account" means the Severance Tax Holding Account
66 created in Section 63-97a-202 .
67 Section 4. Section 63-97a-103 is enacted to read:
68 63-97a-103. Base amount calculation using the consumer price index.
69 (1) For purposes of this section, "consumer price index" means the Consumer Price
70 Index for All Urban Consumers as published by the Bureau of Labor Statistics of the United
71 States Department of Labor.
72 (2) For each fiscal year beginning on or after July 1, 2009, the Division of Finance
73 shall increase or decrease the base amounts described in Subsections 63-97a-102 (2) and (3) by
74 a percentage equal to the percentage difference between the average consumer price index for
75 the preceding fiscal year and the average consumer price index for fiscal year 2007-08.
76 (3) For purposes of Subsection (2), the Division of Finance shall calculate the average
77 consumer price index for a fiscal year by averaging the consumer price index increase or
78 decrease for each of the 12 months in a fiscal year.
79 Section 5. Section 63-97a-201 is amended to read:
80 63-97a-201. Creation of Infrastructure and Economic Diversification Investment
81 Account.
82 (1) (a) There is created a restricted account within the General Fund known as the
83 "Infrastructure and Economic Diversification Investment Account."
84 (b) The Infrastructure and Economic Diversification Investment Account shall consist
85 of:
86 (i) all monies credited to the account under Section [ 63-97a-202 ] 63-97a-301 ;
87 (ii) appropriations from the Legislature;
88 (iii) grants from private foundations; and
89 (iv) interest and investment earnings on account monies.

90 (2) (a) The Infrastructure and Economic Diversification Investment Account shall earn
91 interest.
92 (b) All interest earned on monies in the Infrastructure and Economic Diversification
93 Investment Account shall be deposited into the Infrastructure and Economic Diversification
94 Investment Account.
95 (3) The Legislature may appropriate monies from the Infrastructure and Economic
96 Diversification Investment Account for infrastructure and economic diversification investment
97 projects.
98 Section 6. Section 63-97a-202 is amended to read:
99 63-97a-202. Creation of Severance Tax Holding Account -- Distribution of funds
100 in the account.
101 (1) (a) There is created a restricted account within the General Fund known as the
102 "Severance Tax Holding Account."
103 (b) The Severance Tax Holding Account shall consist of:
104 (i) appropriations from the Legislature;
105 (ii) grants from private foundations; [and]
106 (iii) interest and investment earnings on Severance Tax Holding Account monies[.];
107 and
108 (iv) all monies credited to the Severance Tax Holding Account under Section
109 63-97a-301 .
110 (2) (a) The Severance Tax Holding Account shall earn interest.
111 (b) All interest earned on monies in the Severance Tax Holding Account shall be
112 deposited into the Severance Tax Holding Account.
113 (3) If authorized by law the Division of Finance shall deposit all of the monies in the
114 Severance Tax Holding Account as of June 30, 2009, into the permanent state trust fund.
115 [(4) The state treasurer shall invest and separately account for the earnings on funds
116 that are deposited into the permanent state trust fund under this section.]
117 [(5) (a) In accordance with Utah Constitution Article XXII, Section 4, the interest and
118 dividends earned annually on revenue from severance taxes that are deposited into the
119 permanent state trust fund shall be deposited in the General Fund.]
120 [(b) Interest and dividends earned on revenue from severance taxes that are deposited

121 in the General Fund pursuant to Subsection (5)(a) shall be credited to the Infrastructure and
122 Economic Diversification Investment Account created in Section 63-97a-201 .]
123 Section 7. Section 63-97a-301 is enacted to read:
124 63-97a-301. Crediting of certain severance tax revenues to the permanent state
125 trust fund and the Severance Tax Holding Account.
126 (1) (a) After making the distributions of oil and gas severance tax revenues as required
127 under Sections 59-5-116 and 59-5-119 , the Division of Finance shall make the distributions
128 required under Subsections (2) through (7).
129 (b) For purposes of this section, revenue collected from severance taxes on oil and gas
130 imposed under Title 59, Chapter 5, Severance Tax on Oil, Gas, and Mining, does not include
131 revenue that is distributed under Section 59-5-116 or 59-5-119 .
132 (2) (a) Beginning on July 1, 2008 and ending on December 31, 2008, the Division of
133 Finance shall credit to the Severance Tax Holding Account all revenue from severance taxes on
134 oil and gas imposed under Title 59, Chapter 5, Severance Tax on Oil, Gas, and Mining,
135 collected during that time period that exceed the oil and gas base amount.
136 (b) Beginning on January 1, 2009 and ending on June 30, 2009, if authorized by law,
137 the Division of Finance shall credit to the permanent state trust fund an amount equal to the
138 difference between:
139 (i) all revenue from severance taxes on oil and gas imposed under Title 59, Chapter 5,
140 Severance Tax on Oil, Gas, and Mining, collected in fiscal year 2008-09 that exceed the oil and
141 gas base amount; and
142 (ii) the amount of revenue credited to the Severance Tax Holding Account under
143 Subsection (2)(a).
144 (3) Beginning on July 1, 2009, if authorized by law, the Division of Finance shall
145 credit to the permanent state trust fund all revenue collected in a fiscal year from severance
146 taxes on oil and gas imposed under Title 59, Chapter 5, Severance Tax on Oil, Gas, and
147 Mining, that exceed the oil and gas base amount.
148 (4) (a) Beginning on July 1, 2008 and ending on December 31, 2008, the Division of
149 Finance shall credit to the Severance Tax Holding Account all revenue from severance taxes on
150 mining imposed under Title 59, Chapter 5, Severance Tax on Oil, Gas, and Mining, collected
151 during that time period that exceed the mining base amount.

152 (b) Beginning on January 1, 2009 and ending on June 30, 2009, if authorized by law,
153 the Division of Finance shall credit to the permanent state trust fund an amount equal to the
154 difference between:
155 (i) all revenue from severance taxes on mining imposed under Title 59, Chapter 5,
156 Severance Tax on Oil, Gas, and Mining, collected in fiscal year 2008-09 that exceed the
157 mining base amount; and
158 (ii) the amount of revenue credited to the Severance Tax Holding Account under
159 Subsection (4)(a).
160 (5) Beginning on July 1, 2009, if authorized by law, the Division of Finance shall
161 credit to the permanent state trust fund all revenue collected in a fiscal year from severance
162 taxes on mining imposed under Title 59, Chapter 5, Severance Tax on Oil, Gas, and Mining,
163 that exceed the mining base amount.
164 (6) The state treasurer shall invest and separately account for the earnings on funds that
165 are deposited into the permanent state trust fund under this section.
166 (7) (a) In accordance with Utah Constitution Article XXII, Section 4, the interest and
167 dividends earned annually on revenue from severance taxes that are deposited into the
168 permanent state trust fund shall be deposited in the General Fund.
169 (b) Interest and dividends earned on revenue from severance taxes that are deposited in
170 the General Fund pursuant to Subsection (7)(a) shall be credited to the Infrastructure and
171 Economic Diversification Investment Account created in Section 63-97a-201 .
172 Section 8. Effective date.
173 This bill takes effect on July 1, 2008.




Legislative Review Note
as of 11-15-07 7:53 AM

Office of Legislative Research and General Counsel