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H.B. 59





Sponsor: Brent H. Goodfellow

             5      This act modifies Revenue and Taxation by eliminating the $850,000 limitation on the
             6      allocation of motor fuel tax revenues to the Off-Highway Vehicle Account. This act
             7      leaves in place the .5% limitation for allocations to that account. This act takes effect on
             8      July 1, 2003.
             9      This act affects sections of Utah Code Annotated 1953 as follows:
             10      AMENDS:
             11          59-13-201, as last amended by Chapter 232, Laws of Utah 2001
             12      Be it enacted by the Legislature of the state of Utah:
             13          Section 1. Section 59-13-201 is amended to read:
             14           59-13-201. Rate -- Tax basis -- Exemptions -- Revenue deposited in the
             15      Transportation Fund -- Restricted account for boating uses -- Refunds -- Reduction of tax
             16      in limited circumstances.
             17          (1) (a) A tax is imposed at the rate of 24-1/2 cents per gallon upon all motor fuel that is
             18      sold, used, or received for sale or used in this state.
             19          (b) A tax is imposed at the rate of 3/19 of the rate imposed under Subsection (1)(a),
             20      rounded up to the nearest penny, upon all motor fuels that meet the definition of clean fuel in
             21      Section 59-13-102 and are sold, used, or received for sale or use in this state.
             22          (2) Any increase or decrease in tax rate applies to motor fuel that is imported to the
             23      state or sold at refineries in the state on or after the effective date of the rate change.
             24          (3) (a) No tax is imposed upon:
             25          (i) motor fuel that is brought into and sold in this state in original packages as purely
             26      interstate commerce sales;
             27          (ii) motor fuel that is exported from this state if proof of actual exportation on forms

             28      prescribed by the commission is made within 180 days after exportation;
             29          (iii) motor fuel or components of motor fuel that is sold and used in this state and
             30      distilled from coal, oil shale, rock asphalt, bituminous sand, or solid hydrocarbons located in
             31      this state; or
             32          (iv) motor fuel that is sold to the United States government, this state, or the political
             33      subdivisions of this state where sale and delivery is made in quantities of 750 gallons or more.
             34          (b) For purposes of this Subsection (3), the state and its political subdivisions may
             35      make collective purchases for purposes of meeting the 750 gallon requirement, and the state
             36      and political subdivisions may provide for this purchase in any manner approved by the
             37      commission.
             38          (4) The commission may either collect no tax on motor fuel exported from the state or,
             39      upon application, refund the tax paid.
             40          (5) (a) All revenue received by the commission under this part shall be deposited daily
             41      with the state treasurer and credited to the Transportation Fund.
             42          (b) An appropriation from the Transportation Fund shall be made to the commission to
             43      cover expenses incurred in the administration and enforcement of this part and the collection of
             44      the motor fuel tax.
             45          (6) (a) The commission shall determine what amount of motor fuel tax revenue is
             46      received from the sale or use of motor fuel used in motorboats registered under the provisions
             47      of the State Boating Act, and this amount shall be deposited in a restricted revenue account in
             48      the General Fund of the state.
             49          (b) The funds from this account shall be used for the construction, improvement,
             50      operation, and maintenance of state-owned boating facilities and for the payment of the costs
             51      and expenses of the Division of Parks and Recreation in administering and enforcing the State
             52      Boating Act.
             53          (7) (a) The United States government or any of its instrumentalities, this state, or a
             54      political subdivision of this state that has purchased motor fuel from a licensed distributor or
             55      from a retail dealer of motor fuel and has paid the tax on the motor fuel as provided in this
             56      section is entitled to a refund of the tax and may file with the commission for a quarterly
             57      refund.
             58          (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the

             59      commission shall make rules governing the application and refund provided for in Subsection
             60      (7)(a).
             61          (8) (a) The commission shall refund annually into the Off-Highway Vehicle Account in
             62      the General Fund [an amount equal to the lesser of the following: (i)] .5% of the motor fuel tax
             63      revenues collected under this section[; or (ii) $850,000].
             64          (b) This amount shall be used as provided in Section 41-22-19 .
             65          (c) This Subsection (8) sunsets on July 1, 2010.
             66          (9) (a) Beginning on April 1, 2001, a tax imposed under this section on motor fuel that
             67      is sold, used, or received for sale or use in this state is reduced to the extent provided in
             68      Subsection (9)(b) if:
             69          (i) a tax imposed on the basis of the sale, use, or receipt for sale or use of the motor
             70      fuel is paid to the Navajo Nation;
             71          (ii) the tax described in Subsection (9)(a)(i) is imposed without regard to whether or
             72      not the person required to pay the tax is an enrolled member of the Navajo Nation; and
             73          (iii) the commission and the Navajo Nation execute and maintain an agreement as
             74      provided in this Subsection (9) for the administration of the reduction of tax.
             75          (b) (i) If but for Subsection (9)(a) the motor fuel is subject to a tax imposed by this
             76      section:
             77          (A) the state shall be paid the difference described in Subsection (9)(b)(ii) if that
             78      difference is greater than $0; and
             79          (B) a person may not require the state to provide a refund, a credit, or similar tax relief
             80      if the difference described in Subsection (9)(b)(ii) is less than or equal to $0.
             81          (ii) The difference described in Subsection (9)(b)(i) is equal to the difference between:
             82          (A) the amount of tax imposed on the motor fuel by this section; less
             83          (B) the tax imposed and collected by the Navajo Nation on the motor fuel.
             84          (c) For purposes of Subsections (9)(a) and (b), the tax paid to the Navajo Nation under
             85      a tax imposed by the Navajo Nation on the basis of the sale, use, or receipt for sale or use of
             86      motor fuel does not include any interest or penalties a taxpayer may be required to pay to the
             87      Navajo Nation.
             88          (d) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             89      commission shall make rules governing the procedures for administering the reduction of tax

             90      provided under this Subsection (9).
             91          (e) The agreement required under Subsection (9)(a):
             92          (i) may not:
             93          (A) authorize the state to impose a tax in addition to a tax imposed under this chapter;
             94          (B) provide a reduction of taxes greater than or different from the reduction described
             95      in this Subsection (9); or
             96          (C) affect the power of the state to establish rates of taxation;
             97          (ii) shall:
             98          (A) be in writing;
             99          (B) be signed by:
             100          (I) the chair of the commission or the chair's designee; and
             101          (II) a person designated by the Navajo Nation that may bind the Navajo Nation;
             102          (C) be conditioned on obtaining any approval required by federal law;
             103          (D) state the effective date of the agreement; and
             104          (E) state any accommodation the Navajo Nation makes related to the construction and
             105      maintenance of state highways and other infrastructure within the Utah portion of the Navajo
             106      Nation; and
             107          (iii) may:
             108          (A) notwithstanding Section 59-1-403 , authorize the commission to disclose to the
             109      Navajo Nation information that is:
             110          (I) contained in a document filed with the commission; and
             111          (II) related to the tax imposed under this section;
             112          (B) provide for maintaining records by the commission or the Navajo Nation; or
             113          (C) provide for inspections or audits of distributors, carriers, or retailers located or
             114      doing business within the Utah portion of the Navajo Nation.
             115          (f) (i) If, on or after April 1, 2001, the Navajo Nation changes the tax rate of a tax
             116      imposed on motor fuel, any change in the reduction of taxes under this Subsection (9) as a
             117      result of the change in the tax rate is not effective until the first day of the calendar quarter after
             118      a 60-day period beginning on the date the commission receives notice:
             119          (A) from the Navajo Nation; and
             120          (B) meeting the requirements of Subsection (9)(f)(ii).

             121          (ii) The notice described in Subsection (9)(f)(i) shall state:
             122          (A) that the Navajo Nation has changed or will change the tax rate of a tax imposed on
             123      motor fuel;
             124          (B) the effective date of the rate change of the tax described in Subsection (9)(f)(ii)(A);
             125      and
             126          (C) the new rate of the tax described in Subsection (9)(f)(ii)(A).
             127          (g) If the agreement required by Subsection (9)(a) terminates, a reduction of tax is not
             128      permitted under this Subsection (9) beginning on the first day of the calender quarter after a
             129      30-day period beginning on the day the agreement terminates.
             130          (h) If there is a conflict between this Subsection (9) and the agreement required by
             131      Subsection (9)(a), this Subsection (9) governs.
             132          Section 2. Effective date.
             133          This act takes effect on July 1, 2003.

Legislative Review Note
    as of 12-6-02 4:24 PM

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

Office of Legislative Research and General Counsel

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