H.B. 362

1

MOTOR FUEL TAX - OFF-HIGHWAY
2 VEHICLE REFUND AMENDMENTS
3 2008 GENERAL SESSION
4 STATE OF UTAH
5 Chief Sponsor: Ben C. Ferry
6 Senate Sponsor: Dennis E. Stowell
7
8 LONG TITLE
9 General Description:
10 This bill modifies the Motor and Special Fuel Tax Act by amending provisions relating
11 to the off-highway vehicle refund.
12 Highlighted Provisions:
13 This bill:
14 . repeals the cap on the percentage of motor fuel tax revenue that is deposited as a
15 refund into the Off-highway Vehicle Account;
16 . repeals the July 1, 2010 sunset of the refund into the Off-highway Vehicle Account;
17 and
18 . makes technical changes.
19 Monies Appropriated in this Bill:
20 None
21 Other Special Clauses:
22 This bill takes effect July 1, 2008.
23 Utah Code Sections Affected:
24 AMENDS:
25 59-13-201, as last amended by Laws of Utah 2004, Chapter 237
26
27 Be it enacted by the Legislature of the state of Utah:

28 Section 1. Section 59-13-201 is amended to read:
29 59-13-201. Rate -- Tax basis -- Exemptions -- Revenue deposited in the
30 Transportation Fund -- Restricted account for boating uses -- Refunds -- Reduction of tax
31 in limited circumstances.
32 (1) (a) Subject to the provisions of this section, a tax is imposed at the rate of 24-1/2
33 cents per gallon upon all motor fuel that is sold, used, or received for sale or used in this state.
34 (b) In lieu of the tax imposed under Subsection (1)(a) and subject to the provisions of
35 this section, a tax is imposed at the rate of 3/19 of the rate imposed under Subsection (1)(a),
36 rounded up to the nearest penny, upon all motor fuels that meet the definition of clean fuel in
37 Section 59-13-102 and are sold, used, or received for sale or use in this state.
38 (2) Any increase or decrease in tax rate applies to motor fuel that is imported to the
39 state or sold at refineries in the state on or after the effective date of the rate change.
40 (3) (a) No motor fuel tax is imposed upon:
41 (i) motor fuel that is brought into and sold in this state in original packages as purely
42 interstate commerce sales;
43 (ii) motor fuel that is exported from this state if proof of actual exportation on forms
44 prescribed by the commission is made within 180 days after exportation;
45 (iii) motor fuel or components of motor fuel that is sold and used in this state and
46 distilled from coal, oil shale, rock asphalt, bituminous sand, or solid hydrocarbons located in
47 this state; or
48 (iv) motor fuel that is sold to the United States government, this state, or the political
49 subdivisions of this state.
50 (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
51 commission shall make rules governing the procedures for administering the tax exemption
52 provided under Subsection (3)(a)(iv).
53 (4) The commission may either collect no tax on motor fuel exported from the state or,
54 upon application, refund the tax paid.
55 (5) (a) All revenue received by the commission under this part shall be deposited daily
56 with the state treasurer and credited to the Transportation Fund.
57 (b) An appropriation from the Transportation Fund shall be made to the commission to
58 cover expenses incurred in the administration and enforcement of this part and the collection of

59 the motor fuel tax.
60 (6) (a) The commission shall determine what amount of motor fuel tax revenue is
61 received from the sale or use of motor fuel used in motorboats registered under the provisions
62 of the State Boating Act, and this amount shall be deposited in a restricted revenue account in
63 the General Fund of the state.
64 (b) The funds from this account shall be used for the construction, improvement,
65 operation, and maintenance of state-owned boating facilities and for the payment of the costs
66 and expenses of the Division of Parks and Recreation in administering and enforcing the State
67 Boating Act.
68 (7) (a) The United States government or any of its instrumentalities, this state, or a
69 political subdivision of this state that has purchased motor fuel from a licensed distributor or
70 from a retail dealer of motor fuel and has paid the tax on the motor fuel as provided in this
71 section is entitled to a refund of the tax and may file with the commission for a quarterly
72 refund.
73 (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
74 commission shall make rules governing the application and refund provided for in Subsection
75 (7)(a).
76 (8) (a) The commission shall refund annually into the Off-Highway Vehicle Account in
77 the General Fund an amount equal to [the lesser of the following: (i)] .5% of the motor fuel tax
78 revenues collected under this section[; or].
79 [(ii) $1,050,000.]
80 (b) This amount shall be used as provided in Section 41-22-19 .
81 [(c) This Subsection (8) sunsets on July 1, 2010.]
82 (9) (a) Beginning on April 1, 2001, a tax imposed under this section on motor fuel that
83 is sold, used, or received for sale or use in this state is reduced to the extent provided in
84 Subsection (9)(b) if:
85 (i) a tax imposed on the basis of the sale, use, or receipt for sale or use of the motor
86 fuel is paid to the Navajo Nation;
87 (ii) the tax described in Subsection (9)(a)(i) is imposed without regard to whether or
88 not the person required to pay the tax is an enrolled member of the Navajo Nation; and
89 (iii) the commission and the Navajo Nation execute and maintain an agreement as

90 provided in this Subsection (9) for the administration of the reduction of tax.
91 (b) (i) If but for Subsection (9)(a) the motor fuel is subject to a tax imposed by this
92 section:
93 (A) the state shall be paid the difference described in Subsection (9)(b)(ii) if that
94 difference is greater than $0; and
95 (B) a person may not require the state to provide a refund, a credit, or similar tax relief
96 if the difference described in Subsection (9)(b)(ii) is less than or equal to $0.
97 (ii) The difference described in Subsection (9)(b)(i) is equal to the difference between:
98 (A) the amount of tax imposed on the motor fuel by this section; less
99 (B) the tax imposed and collected by the Navajo Nation on the motor fuel.
100 (c) For purposes of Subsections (9)(a) and (b), the tax paid to the Navajo Nation under
101 a tax imposed by the Navajo Nation on the basis of the sale, use, or receipt for sale or use of
102 motor fuel does not include any interest or penalties a taxpayer may be required to pay to the
103 Navajo Nation.
104 (d) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
105 commission shall make rules governing the procedures for administering the reduction of tax
106 provided under this Subsection (9).
107 (e) The agreement required under Subsection (9)(a):
108 (i) may not:
109 (A) authorize the state to impose a tax in addition to a tax imposed under this chapter;
110 (B) provide a reduction of taxes greater than or different from the reduction described
111 in this Subsection (9); or
112 (C) affect the power of the state to establish rates of taxation;
113 (ii) shall:
114 (A) be in writing;
115 (B) be signed by:
116 (I) the chair of the commission or the chair's designee; and
117 (II) a person designated by the Navajo Nation that may bind the Navajo Nation;
118 (C) be conditioned on obtaining any approval required by federal law;
119 (D) state the effective date of the agreement; and
120 (E) state any accommodation the Navajo Nation makes related to the construction and

121 maintenance of state highways and other infrastructure within the Utah portion of the Navajo
122 Nation; and
123 (iii) may:
124 (A) notwithstanding Section 59-1-403 , authorize the commission to disclose to the
125 Navajo Nation information that is:
126 (I) contained in a document filed with the commission; and
127 (II) related to the tax imposed under this section;
128 (B) provide for maintaining records by the commission or the Navajo Nation; or
129 (C) provide for inspections or audits of distributors, carriers, or retailers located or
130 doing business within the Utah portion of the Navajo Nation.
131 (f) (i) If, on or after April 1, 2001, the Navajo Nation changes the tax rate of a tax
132 imposed on motor fuel, any change in the reduction of taxes under this Subsection (9) as a
133 result of the change in the tax rate is not effective until the first day of the calendar quarter after
134 a 60-day period beginning on the date the commission receives notice:
135 (A) from the Navajo Nation; and
136 (B) meeting the requirements of Subsection (9)(f)(ii).
137 (ii) The notice described in Subsection (9)(f)(i) shall state:
138 (A) that the Navajo Nation has changed or will change the tax rate of a tax imposed on
139 motor fuel;
140 (B) the effective date of the rate change of the tax described in Subsection (9)(f)(ii)(A);
141 and
142 (C) the new rate of the tax described in Subsection (9)(f)(ii)(A).
143 (g) If the agreement required by Subsection (9)(a) terminates, a reduction of tax is not
144 permitted under this Subsection (9) beginning on the first day of the calendar quarter after a
145 30-day period beginning on the day the agreement terminates.
146 (h) If there is a conflict between this Subsection (9) and the agreement required by
147 Subsection (9)(a), this Subsection (9) governs.
148 Section 2. Effective date.
149 This bill takes effect July 1, 2008.

Legislative Review Note
as of 1-22-08 11:40 AM

Office of Legislative Research and General Counsel