S.B. 254

1

USE OF MOTOR FUEL TAX
2 1997 GENERAL SESSION
3 STATE OF UTAH
4 Sponsor: Leonard M. Blackham
5 AN ACT RELATING TO REVENUE AND TAXATION; REPEALING THE
6 ENVIRONMENTAL SURCHARGE ON PETROLEUM; AMENDING CERTAIN FUEL TAX
7 PROVISIONS; MAKING TECHNICAL CHANGES; AND PROVIDING AN EFFECTIVE
8 DATE.
9 This act affects sections of Utah Code Annotated 1953 as follows:
10 AMENDS:
11 19-6-409, as last amended by Chapter 297, Laws of Utah 1994
12 19-6-411, as last amended by Chapter 162, Laws of Utah 1996
13 59-13-201, as last amended by Chapter 78, Laws of Utah 1995
14 59-13-301, as last amended by Chapter 79, Laws of Utah 1994
15 59-13-304, as last amended by Chapters 79 and 113, Laws of Utah 1994
16 REPEALS:
17 19-6-410, as last amended by Chapter 1, Laws of Utah 1993, Second Special Session
18 Be it enacted by the Legislature of the state of Utah:
19 Section 1. Section 19-6-409 is amended to read:
20 19-6-409. Petroleum Storage Tank Fund created -- Source of revenues.
21 (1) (a) There is created an expendable trust fund entitled the Petroleum Storage Tank Fund.
22 (b) The sole sources of revenues for the fund are:
23 (i) petroleum storage tank fees under Section 19-6-411;
24 (ii) underground storage tank installation company permit fees under Section 19-6-411;
25 and
26 [(iii) the environmental surcharge assessed under Section 19-6-410; and]
27 [(iv)] (iii) costs recovered under this part.

1 (c) Interest earned on fund monies shall be deposited into the fund.
2 (2) Fund monies may be used to pay:
3 (a) costs as provided in this part; and
4 (b) for the administration of the fund [and the environmental surcharge].
5 (3) Costs for the administration of the fund [and the environmental surcharge] shall be
6 appropriated by the Legislature.
7 (4) The executive secretary may expend monies from the fund for:
8 (a) legal and claims adjusting costs incurred by the state in connection with claims,
9 judgments, awards, or settlements for bodily injury or property damage to third parties;
10 (b) costs incurred by the state risk manager in determining the actuarial soundness of the
11 fund; and
12 (c) other costs as provided in this part.
13 (5) Money in the Petroleum Storage Tank Fund in excess of $18,000,000 may be
14 appropriated by the Legislature to either or both of the following:
15 (a) the loan fund for purposes stated in Section 19-6-405.3; or
16 (b) the department to be applied to the costs of investigation, abatement, and corrective
17 action regarding releases not covered by the fund and not on the national priority list as defined
18 in Section 19-6-302.
19 (6) The board shall:
20 (a) establish by rule criteria for determining priorities for taking action or expending
21 money under Subsection (5)(b); and
22 (b) give due emphasis to releases that present a threat to public health or the environment.
23 (c) All funds appropriated to the department under Subsections (3) and (5)(b) that are not
24 expended or committed at the end of the fiscal year lapse into the Underground Storage Tank
25 Account.
26 Section 2. Section 19-6-411 is amended to read:
27 19-6-411. Petroleum storage tank fee.
28 (1) In addition to the underground storage tank registration fee paid in Section 19-6-408,
29 the owner or operator of a petroleum storage tank shall also pay an annual petroleum storage tank
30 fee to the department for each facility as follows:
31 (a) on and after July 1, 1990, through June 30, 1993, an annual fee of:

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1 (i) $250 for each tank:
2 (A) located at a facility engaged in petroleum production, refining, or marketing; or
3 (B) with an annual monthly throughput of more than 10,000 gallons; and
4 (ii) $125 for each tank:
5 (A) not located at a facility engaged in petroleum production, refining, or marketing; and
6 (B) with an annual monthly throughput of 10,000 gallons or less;
7 (b) on and after July 1, 1993, through June 30, 1994, an annual fee of:
8 (i) $150 for each tank:
9 (A) located at a facility engaged in petroleum production, refining, or marketing; or
10 (B) with an average monthly throughput of more than 10,000 gallons; and
11 (ii) $75 for each tank:
12 (A) not located at a facility engaged in petroleum production, refining, or marketing; and
13 (B) with an average monthly throughput of 10,000 gallons or less; and
14 (c) on and after July 1, 1994, an annual fee of:
15 (i) $50 for each tank in a facility with an annual facility throughput rate of 400,000 gallons
16 or less;
17 (ii) $150 for each tank in a facility with an annual facility throughput rate of more than
18 400,000 gallons; and
19 (iii) $150 for each tank in a facility regarding which:
20 (A) the facility's throughput rate is not reported to the department within 30 days after the
21 date this throughput information is requested by the department; or
22 (B) the owner or operator elects to pay the fee under this subsection, rather than report
23 under Subsection (1)(c)(i) or (ii).
24 (2) (a) As a condition of permitting, each underground storage tank installation company
25 shall pay to the department the following fees to be deposited in the fund:
26 (i) an annual fee of:
27 (A) $2,000 per underground storage tank installation company if the installation company
28 has installed 15 or fewer underground storage tanks within the 12 months preceding the fee due
29 date; or
30 (B) $4,000 per underground storage tank installation company if the installation company
31 has installed 16 or more underground storage tanks within the 12 months preceding the fee due

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1 date; and
2 (ii) $200 for each underground storage tank installed in the state, to be paid prior to
3 completion of installation.
4 (b) The board shall make rules specifying which portions of an underground storage tank
5 installation shall be subject to the permitting fees when less than a full underground storage tank
6 system is installed.
7 (3) (a) Fees under Subsections (1) and (2)(a)(i) are due on or before July 1 annually.
8 (b) If the department does not receive the fee on or before July 1 or before the installation
9 under Subsection (2)(a)(ii) is completed, the department shall impose a late penalty of $60 per
10 facility or per installation company.
11 (c) The fee and the late penalty accrue interest at 12% per annum.
12 (4) (a) If the fee, late penalty, and all accrued interest due under Subsection (3)(a) are not
13 received by the department within 60 days after July 1, the issued certificate of compliance or
14 underground storage tank installation company permit, and eligibility to receive payments for
15 claims against the fund lapse on the 61st day after July 1.
16 (b) If the fee, late penalty, and all accrued interest due under Subsection (2)(a)(ii) are not
17 received by the department within 60 days after the underground storage tank installation is
18 completed, the issued underground storage tank installation company permit and eligibility to
19 receive payments for claims against the fund lapse on the 61st day after the tank installation is
20 completed.
21 (c) The executive secretary may not reissue the certificate of compliance or underground
22 storage tank installation company permit until the fee, late penalty, and all accrued interest are
23 received by the department.
24 (5) If the state risk manager determines the fees established in Subsections (1) and (2) [and
25 the environmental surcharge established in Section 19-6-410] are insufficient to maintain the fund
26 on an actuarially sound basis, he shall petition the Legislature to increase the petroleum storage
27 tank and underground storage tank installation company permit fees to a level that will sustain the
28 fund on an actuarially sound basis.
29 (6) The provisions of this subsection take precedence over all other provisions of this
30 section:
31 (a) when a petroleum storage tank is initially registered with the executive secretary, the

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1 department shall assess and collect a petroleum storage tank fee of $250 from the owner or
2 operator for that fiscal year; and
3 (b) the department may not assess any other petroleum storage tank fee from the owner
4 or operator for that fiscal year.
5 (7) The executive secretary may waive all or part of the fees required for a petroleum
6 storage tank under this section if no fuel has been dispensed from the tank on or after July 1, 1991.
7 (8) (a) Each petroleum storage tank or underground storage tank, for which payment of
8 fees has been made and other requirements have been met to qualify for a certificate of compliance
9 under this part, shall be issued a form of identification, as determined by the board under
10 Subsection (8)(b).
11 (b) The board shall make rules providing for the identification, through a tag or other
12 readily identifiable method, of petroleum storage tanks or underground storage tanks under
13 Subsection (8)(a) that qualify for a certificate of compliance under this part.
14 Section 3. Section 59-13-201 is amended to read:
15 59-13-201. Rate -- Tax basis -- Exemptions -- Revenue deposited in the
16 Transportation Fund -- 1987 increase used for repairs only -- Restricted account for boating
17 uses -- Refunds.
18 (1) (a) A tax is imposed at the rate of [19] 19 1/2 cents per gallon upon all motor fuel that
19 is sold, used, or received for sale or use in this state. [If any change is made in this tax amount,
20 the tax on fuel under Subsection (1)(b), Subsection 59-13-301(1)(a), and the fee for a special fuel
21 tax exemption certificate under Subsection 59-13-304(2)(a) are increased or decreased by the same
22 percentage of change as is made to the tax under this Subsection (1)(a).]
23 (b) A tax is imposed at the rate of [3 cents per gallon] 3/19 of the rate imposed under
24 Subsection (1)(a), rounded up to the nearest penny, upon all motor fuels that meet the definition
25 of clean fuel in Section 59-13-102 and are sold, used, or received for sale or use in this state. [If
26 any change is made to the motor fuel tax under Subsection (1)(a), the tax under this Subsection
27 (1)(b) is increased or decreased by the same percentage of change, rounded up to the next penny.]
28 (2) Any increase or decrease in tax rate applies to motor fuel that is imported to the state
29 or sold at refineries in the state on or after the effective date of the rate change.
30 (3) (a) No tax is imposed upon:
31 (i) motor fuel that is brought into and sold in this state in original packages as purely

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1 interstate commerce sales;
2 (ii) motor fuel that is exported from this state if proof of actual exportation on forms
3 prescribed by the commission is made within 180 days after exportation;
4 (iii) motor fuel or components of motor fuel that is sold and used in this state and distilled
5 from coal, oil shale, rock asphalt, bituminous sand, or solid hydrocarbons located in this state; or
6 (iv) motor fuel that is sold to the United States government, this state, or the political
7 subdivisions of this state where sale and delivery is made in quantities of 750 gallons or more.
8 (b) For purposes of this subsection, the state and its political subdivisions may make
9 collective purchases for purposes of meeting the 750 gallon requirement, and the state and political
10 subdivisions may provide for this purchase in any manner approved by the commission.
11 (4) The commission may either collect no tax on motor fuel exported from the state or,
12 upon application, refund the tax paid.
13 (5) (a) All revenue received by the commission under this part shall be deposited daily
14 with the state treasurer and credited to the Transportation Fund.
15 [(b) The revenue received from the five cent per gallon increase effective April 1, 1987,
16 shall be used for the repair of highways, roads, and streets.]
17 [(c)] (b) An appropriation from the Transportation Fund shall be made to the commission
18 to cover expenses incurred in the administration and enforcement of this part and the collection
19 of the motor fuel tax.
20 (6) (a) The commission shall determine what amount of motor fuel tax revenue is received
21 from the sale or use of motor fuel used in motorboats registered under the provisions of the State
22 Boating Act, and this amount shall be deposited in a restricted revenue account in the General
23 Fund of the state.
24 (b) The funds from this account shall be used for the construction, improvement,
25 operation, and maintenance of state-owned boating facilities and for the payment of the costs and
26 expenses of the Division of Parks and Recreation in administering and enforcing the State Boating
27 Act.
28 (7) (a) The United States government or any of its instrumentalities, this state, or a
29 political subdivision of this state that has purchased motor fuel from a licensed distributor or from
30 a retail dealer of motor fuel and has paid the tax on the motor fuel as provided in this section is
31 entitled to a refund of the tax and may file with the commission for a quarterly refund.

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1 (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
2 commission shall make rules governing the application and refund provided for in Subsection (a).
3 (8) (a) The commission shall refund annually into the Off-Highway Vehicle Account in
4 the General Fund an amount equal to the lesser of the following:
5 (i) .5% of the motor fuel tax revenues collected under this section; or
6 (ii) $600,000.
7 (b) This amount shall be used as provided in Section 41-22-19.
8 (c) Subsection (8) sunsets on July 1, 2010.
9 Section 4. Section 59-13-301 is amended to read:
10 59-13-301. Tax basis -- Rate -- Exemptions -- Revenue deposited with treasurer and
11 credited to Transportation Fund.
12 (1) [(a)] A tax is imposed at the same rate [of 19 cents per gallon] imposed under
13 Subsection 59-13-201(1)(a) on the sale or use of special fuel other than clean [special] fuel, which
14 is exempt upon the purchase of an exemption certificate under Section 59-13-304.
15 [(b) If any change is made in the motor fuel tax rate under Subsection 59-13-201(1)(a), the
16 tax rate under Subsection (1)(a) of this section is increased or decreased by the same percentage
17 of change.]
18 (2) No tax is imposed upon special fuel which:
19 (a) is sold or used for any purpose other than to operate or propel a motor vehicle upon the
20 public highways of the state, but this exemption applies only in those cases where the purchasers
21 or the users of special fuel establish to the satisfaction of the commission that the special fuel was
22 used for purposes other than to operate a motor vehicle upon the public highways of the state;
23 (b) is sold to the United States government or any of its instrumentalities or to this state
24 or any of its political subdivisions; or
25 (c) is sold and delivered into a motor vehicle for which the owner or operator possesses
26 an unexpired special fuel tax exemption certificate issued to that owner or operator by the
27 commission as provided in Section 59-13-304 for vehicles powered by certain special fuels.
28 (3) The special fuel tax shall be paid by the user-dealer where the special fuel is sold
29 within the state and delivered directly into the fuel supply tank of a motor vehicle unless a current
30 special fuel exemption certificate has been issued for the motor vehicle under Section 59-13-304.
31 (4) (a) The special fuel tax shall be paid by every user who is required by Sections

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1 59-13-303 and 59-13-305 to obtain a special fuel permit and file special fuel tax reports.
2 (b) The user shall receive a refund for special fuel taxes paid to the user-dealer on
3 purchases made which are delivered into vehicles and for which special fuel tax liability is
4 reported.
5 (5) (a) All revenue received by the commission from taxes and license fees under this part
6 shall be deposited daily with the state treasurer and credited to the Transportation Fund.
7 [(b) The revenue received from the five cent per gallon increase effective April 1, 1987,
8 shall be used for the repair of highways, roads, and streets.]
9 [(c)] (b) An appropriation from the Transportation Fund shall be made to the commission
10 to cover expenses incurred in the administration and enforcement of this part and the collection
11 of the special fuel tax.
12 Section 5. Section 59-13-304 is amended to read:
13 59-13-304. Exemptions from special fuel tax -- Certificate required -- Fees for
14 certificates -- Inspection of vehicles.
15 (1) (a) A user of special fuel who owns a vehicle powered by a clean fuel as defined under
16 Section 59-13-102, may receive an exemption from the special fuel tax imposed under Section
17 59-13-301.
18 (b) The commission determines if a user shall receive this exemption.
19 (c) A user who receives this exemption shall annually purchase from the commission a
20 special fuel tax exemption certificate for each vehicle owned that is described under Subsection
21 (a).
22 (d) Special fuel tax exemption certificates are provided to encourage the use of clean fuels
23 to reduce air pollution.
24 (2) (a) The fee for a special fuel tax exemption certificate is:
25 (i) [$70] 70/.19 of the tax per gallon imposed under Subsection 59-13-201(1)(a), rounded
26 up to the nearest dollar, for qualified motor vehicles as defined under Section 59-13-102; and
27 (ii) [$36] 36/.19 of the tax per gallon imposed under Subsection 59-13-201(1)(a), rounded
28 up to the nearest dollar, for other vehicles.
29 [(b) When any increase or decrease is made in the motor fuel tax under Subsection
30 59-13-201(1)(a), that same percentage of increase or decrease applies to the fee for a certificate
31 under Subsection (2)(a), rounded to the nearest dollar.]

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1 [(c)] (b) The commission may require each vehicle to be inspected for safe operation
2 before issuing the exemption certificate.
3 [(d)] (c) Each vehicle shall be equipped with an approved and properly installed
4 carburetion system if it is powered by a fuel that is gaseous at standard atmospheric conditions.
5 Section 6. Repealer.
6 This act repeals:
7 Section 19-6-410, Environmental surcharge on petroleum.
8 Section 7. Effective date.
9 This act takes effect on May 5, 1997.




Legislative Review Note
as of 3-3-97 5:01 PM

A limited legal review of this bill raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel

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