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Second Substitute S.B. 132

Senator Lyle W. Hillyard proposes to substitute the following bill:




Sponsor: Lyle W. Hillyard

             10      This act affects sections of Utah Code Annotated 1953 as follows:
             11      AMENDS:
             12          59-13-102, as last amended by Chapter 271, Laws of Utah 1997
             13          59-13-401, as enacted by Chapter 6, Laws of Utah 1987
             14          59-13-402, as enacted by Chapters 6 and 187, Laws of Utah 1987
             15          59-13-403, as last amended by Chapter 145, Laws of Utah 1989
             16      Be it enacted by the Legislature of the state of Utah:
             17          Section 1. Section 59-13-102 is amended to read:
             18           59-13-102. Definitions.
             19          As used in this chapter:
             20          (1) "Aviation fuel" means fuel that is sold at airports and used exclusively for the operation
             21      of aircraft.
             22          (2) "Clean fuel" means:
             23          (a) the following special fuels:
             24          (i) propane;
             25          (ii) compressed natural gas; or

             26          (iii) electricity; or
             27          (b) any motor or special fuel that meets the clean fuel vehicle standards in the federal clean
             28      Air Act Amendments of 1990, Title II.
             29          (3) "Commission" means the State Tax Commission.
             30          (4) (a) "Diesel fuel" means any liquid that is commonly or commercially known, offered
             31      for sale, or used as a fuel in diesel engines.
             32          (b) "Diesel fuel" includes any combustible liquid, by whatever name the liquid may be
             33      known or sold, when the liquid is used in an internal combustion engine for the generation of
             34      power to operate a motor vehicle licensed to operate on the highway, except fuel that is subject to
             35      the tax imposed in Part 2, Motor Fuel, and Part 4, Aviation Fuel, of this chapter.
             36          (5) "Distributor" means any person in this state who:
             37          (a) imports or causes to be imported motor fuel for use, distribution, or sale, whether at
             38      retail or wholesale;
             39          (b) produces, refines, manufactures, or compounds motor fuel in this state for use,
             40      distribution, or sale in this state; [or]
             41          (c) is engaged in the business of purchasing motor fuel for resale in wholesale quantities
             42      to retail dealers of motor fuel and who accounts for his own motor fuel tax liability[.]; or
             43          (d) for purposes of Part 4, Aviation Fuel, only, makes retail sales of aviation fuel to:
             44          (i) federally certificated air carriers; and
             45          (ii) other persons.
             46          (6) "Dyed diesel fuel" means diesel fuel that is dyed in accordance with 26 U.S.C. Sec.
             47      4082 or United States Environmental Protection Agency or Internal Revenue Service regulations
             48      and that is considered destined for nontaxable off-highway use.
             49          (7) "Exchange agreement" means an agreement between licensed suppliers where one is
             50      a position holder in a terminal who agrees to deliver taxable special fuel to the other supplier or
             51      the other supplier's customer at the loading rack of the terminal where the delivering supplier holds
             52      an inventory position.
             53          (8) "Federally certificated air carrier" means a person who holds a certificate issued by the
             54      Federal Aviation Administration authorizing the person to conduct an all-cargo operation or
             55      scheduled operation, as defined in 14 C.F.R. Sec. 119.3.
             56          [(8)] (9) "Fuels" means any gas, liquid, solid, mixture, or other energy source which is

             57      generally used in an engine or motor for the generation of power, including aviation fuel, clean
             58      fuel, diesel fuel, motor fuel, and special fuel.
             59          [(9)] (10) "Highway" means every way or place, of whatever nature, generally open to the
             60      use of the public for the purpose of vehicular travel notwithstanding that the way or place may be
             61      temporarily closed for the purpose of construction, maintenance, or repair.
             62          [(10)] (11) "Motor fuel" means fuel that is commonly or commercially known or sold as
             63      gasoline or gasohol and is used for any purpose, but does not include aviation fuel.
             64          [(11)] (12) "Motor fuels received" means:
             65          (a) motor fuels that have been loaded at the refinery or other place into tank cars, placed
             66      in any tank at the refinery from which any withdrawals are made directly into tank trucks, tank
             67      wagons, or other types of transportation equipment, containers, or facilities other than tank cars,
             68      or placed in any tank at the refinery from which any sales, uses, or deliveries not involving
             69      transportation are made directly; or
             70          (b) motor fuels that have been imported by any person into the state from any other state
             71      or territory by tank car, tank truck, pipeline, or any other conveyance at the time when, and the
             72      place where, the interstate transportation of the motor fuel is completed within the state by the
             73      person who at the time of the delivery is the owner of the motor fuel.
             74          [(12)] (13) (a) "Qualified motor vehicle" means a special fuel-powered motor vehicle used,
             75      designed, or maintained for transportation of persons or property which:
             76          (i) has a gross vehicle weight or registered gross vehicle weight exceeding 26,000 pounds;
             77          (ii) has three or more axles regardless of weight; or
             78          (iii) is used in a combination of vehicles when the weight of the combination of vehicles
             79      exceeds 26,000 pounds gross vehicle weight.
             80          (b) "Qualified motor vehicle" does not include a recreational vehicle not used in
             81      connection with any business activity.
             82          [(13)] (14) "Rack," as used in Part 3, means a deck, platform, or open bay which consists
             83      of a series of metered pipes and hoses for the delivery or removal of diesel fuel from a refinery or
             84      terminal into a motor vehicle, rail car, or vessel.
             85          [(14)] (15) "Removal," as used in Part 3, means the physical transfer of diesel fuel from
             86      a production, manufacturing, terminal, or refinery facility and includes use of diesel fuel. Removal
             87      does not include:

             88          (a) loss by evaporation or destruction; or
             89          (b) transfers between refineries, racks, or terminals.
             90          [(15)] (16) (a) "Special fuel" means any fuel regardless of name or character that:
             91          (i) is usable as fuel to operate or propel a motor vehicle upon the public highways of the
             92      state; and
             93          (ii) is not taxed under the category of aviation or motor fuel.
             94          (b) Special fuel includes [those]:
             95          (i) fuels that are not conveniently measurable on a gallonage basis[.]; and
             96          [(b)] (ii) ["Special fuel" includes] diesel fuel.
             97          [(16)] (17) "Supplier," as used in Part 3, means a person who:
             98          (a) imports or acquires immediately upon importation into this state diesel fuel from within
             99      or without a state, territory, or possession of the United States or the District of Columbia;
             100          (b) produces, manufactures, refines, or blends diesel fuel in this state;
             101          (c) otherwise acquires for distribution or sale in this state, diesel fuel with respect to which
             102      there has been no previous taxable sale or use; or
             103          (d) is in a two party exchange where the receiving party is deemed to be the supplier.
             104          [(17)] (18) "Terminal," as used in Part 3, means a facility for the storage of diesel fuel
             105      which is supplied by a motor vehicle, pipeline, or vessel and from which diesel fuel is removed
             106      for distribution at a rack.
             107          [(18)] (19) "Two party exchange" means a transaction in which special fuel is transferred
             108      between licensed suppliers pursuant to an exchange agreement.
             109          [(19)] (20) "Undyed diesel fuel" means diesel fuel that is not subject to the dyeing
             110      requirements in accordance with 26 U.S.C. Sec. 4082 or United States Environmental Protection
             111      Agency or Internal Revenue Service regulations.
             112          [(20)] (21) "Use," as used in Part 3, means the consumption of special fuel for the
             113      operation or propulsion of a motor vehicle upon the public highways of the state and includes the
             114      reception of special fuel into the fuel supply tank of a motor vehicle.
             115          [(21)] (22) "User," as used in Part 3, means any person who uses special fuel within this
             116      state in an engine or motor for the generation of power to operate or propel a motor vehicle upon
             117      the public highways of the state.
             118          Section 2. Section 59-13-401 is amended to read:

             119           59-13-401. Aviation fuel tax -- Rate.
             120          (1) A tax is imposed [at the rate] upon aviation fuel at the rates provided in this section.
             121          (2) Except as provided by Subsection (3) the tax on aviation fuel shall be:
             122          (a) beginning July 1, 1999, six cents per gallon;
             123          (b) beginning July 1, 2000, eight cents per gallon; and
             124          (c) beginning July 1, 2001, nine cents per gallon.
             125          (3) Aviation fuel purchased for use by a federally certificated air carrier is subject to a tax
             126      of four cents per gallon [upon all aviation fuel].
             127          Section 3. Section 59-13-402 is amended to read:
             128           59-13-402. Revenue from taxes deposited with treasurer -- Credit to Aeronautics
             129      Restricted Account -- Purposes for which funds may be used -- Allocation of funds -- Reports
             130      -- Returns required.
             131          (1) (a) All revenue received by the commission under this part shall be deposited daily
             132      with the state treasurer who shall credit all of the revenue collected to the Transportation Fund.
             133          (b) An appropriation from the Transportation Fund shall be made to the commission to
             134      cover expenses incurred in the administration and enforcement of this part and the collection of
             135      the aviation fuel tax.
             136          (c) Refunds to which taxpayers are entitled under this part shall be paid from the
             137      Transportation Fund.
             138          (2) The state treasurer shall place an amount equal to the total amount received from the
             139      sale or use of aviation fuel in the Transportation Fund's Restricted Revenue Account for
             140      aeronautical operations of the Department of Transportation for:
             141          (a) the construction, improvement, operation, and maintenance of publicly used airports
             142      in this state;
             143          (b) the promotion of aeronautics in this state; and
             144          (c) the payment of the costs and expenses of the Department of Transportation in
             145      administering this part or other law conferring upon it the duty of regulating and supervising
             146      aeronautics in this state.
             147          [(3) Seventy-five percent of the aviation fuel tax collected on fuel sold at each airport
             148      shall be paid to that airport for its use under Subsection (2). All amounts collected on fuel sold
             149      at airports owned and operated by cities of the first class shall be paid to the city treasurer on the

             150      first day of each month and used for airport use at the discretion of the governing authority of the
             151      city.]
             152          [(4) The remaining 25% shall be expended as the aeronautical operations of the
             153      Department of Transportation may determine under Subsection (2). ]
             154          (3) The tax imposed on each gallon of aviation fuel under Section 59-13-401 shall be
             155      allocated to the airport where the aviation fuel was sold and to aeronautical operations of the
             156      Department of Transportation as follows:
             157                                      Total    Allocation to    Allocation to
             158                                      Tax    Airport    Aeronautical
             159                                                  Operations
             160      Tax on Each Gallon of Aviation Fuel Purchased
             161          for Use by a Federally Certificated Air Carrier    $.04        $.03        $.01
             162      Tax on Each Gallon of Aviation Fuel Purchased
             163          for Use by a Person Other than a
             164          Federally Certificated Air Carrier
             165          beginning July 1, 1999                $.06        $.02        $.04
             166          beginning July 1, 2000                $.08        $.01        $.07
             167          beginning July 1, 2001                $.09        $.00        $.09
             168          (a) The allocation to the publicly used airport may be used at the discretion of the airport's
             169      governing authority for the purposes specified in Subsection (2)(a).
             170          (b) Upon appropriation by the Legislature, the allocation to aeronautical operations of the
             171      Department of Transportation shall be used as provided in Subsection (2).
             172          [(5) ] (4) (a) The commission shall require reports and returns from distributors, retail
             173      dealers, and users in order to enable the commission and the Department of Transportation to
             174      allocate the revenue to be credited to the Transportation Fund's Restricted Revenue Account for
             175      the aeronautical [operation] operations of that department and the separate accounts of individual
             176      airports. [Any]
             177          (b) (i) Except as provided by Subsection (4)(b)(ii), any unexpended amount remaining in
             178      the account of any publicly used airport on the first day of January, April, July, and October shall
             179      be paid to the authority operating the airport [and used to defray operating expenses of the airport].
             180          (ii) Aviation fuel tax allocated to any airport owned and operated by a city of the first class

             181      shall be paid to the city treasurer on the first day of each month.
             182          (c) The state treasurer shall place [the remainder] aviation fuel tax collected on fuel sold
             183      at places other than publicly used airports in the Transportation Fund's Restricted Revenue
             184      Account for the aeronautical operations of the Department of Transportation.
             185          Section 4. Section 59-13-403 is amended to read:
             186           59-13-403. Administration and penalties -- Bond requirements.
             187          (1) All administrative and penalty provisions of Part 2, Motor Fuel, apply to the
             188      administration of Part 4, Aviation Fuel.
             189          (2) (a) Notwithstanding Subsection (1) and Subsection 59-13-203 (3), [the bond
             190      requirement for aviation fuel distributors whose tax liability averages $500 or less per month
             191      during the preceding six months is $2,000.] and except as provided in Subsection (2)(b), the bond
             192      may not be less than $2,000.
             193          (b) A distributor is not required to furnish a bond if the distributor:
             194          (i) meets the definition of distributor under Subsection 59-13-102 (5)(d); and
             195          (ii) has an average tax liability of $500 or less per month.
             196          Section 5. Effective date.
             197          This act takes effect on July 1, 1999.

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