First Substitute S.B. 76

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Senate 3^rd Reading Amendments 2-5-2004 rd/sch

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Senate Committee Amendments 1-30-2004 rd/sch This document includes Senate Committee Amendments incorporated into the bill on Fri, Jan 30, 2004 at 11:06 AM by rday. --> This document includes Senate 3^rd Reading Floor Amendments incorporated into the bill on Thu, Feb 5, 2004 at 10:52 AM by rday. --> Senator Thomas V. Hatch proposes the following substitute bill:

1 REVISIONS TO ROYALTY ON BRINE
2 SHRIMP
3 2004 GENERAL SESSION
4 STATE OF UTAH
5 Sponsor: Thomas V. Hatch
6
7 LONG TITLE
8 General Description:
9 This bill modifies the Brine Shrimp Royalty Act.
10 Highlighted Provisions:
11 This bill:
12 . provides definitions;
13 . provides that a brine shrimp royalty of $550,000 is due each taxable year;
14 . provides a calculation to determine the annual brine shrimp royalty rate;
15 . establishes procedures and requirements for assessing the brine shrimp royalty each
16 year;
17 . grants rulemaking authority to the Utah State Tax Commission S [ and the Department
18 of Natural Resources ] s ;
19 . changes the date that the brine shrimp royalty is due; S [ and ]
19a .REQUIRES THE REVENUE AND TAXATION INTERIM COMMITTEE TO REVIEW THE ANNUAL BRINE
19b SHRIMP ROYALTY AMOUNT AT LEAST ONCE EVERY FIVE YEARS; AND s
20 . makes technical changes.
21 Monies Appropriated in this Bill:
22 None
23 Other Special Clauses:
24 This bill provides an immediate effective date.
25 This bill provides for retrospective operation.

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Utah Code Sections Affected:
27 AMENDS:
28 59-23-3, as enacted by Chapter 179, Laws of Utah 1997
29 59-23-4, as last amended by Chapter 21, Laws of Utah 1999
30 59-23-5, as enacted by Chapter 179, Laws of Utah 1997
31
32 Be it enacted by the Legislature of the state of Utah:
33 Section 1. Section 59-23-3 is amended to read:
34 59-23-3. Definitions.
35 As used in this chapter:
36 (1) "Brine shrimp eggs" means dormant, early stage brine shrimp embryos
37 encapsulated as cysts that are harvested from the waters of the state.
38 (2) "Taxable year" means a one-year period beginning on February 1 and ending on
39 January 31 of the following year.
40 S [ (3) "Unprocessed brine shrimp eggs" means:
41 (i) brine shrimp eggs and other organic matter that are removed from the surface or
42 near the surface of water and reduced to possession on a boat, barge, or other vessel; or
43 (ii) brine shrimp eggs and other organic or inorganic matter that are removed from the
44 surface of a beach and reduced to possession in a sack, vehicle, or other vessel. ] s
45 Section 2. Section 59-23-4 is amended to read:
46 59-23-4. Brine shrimp royalty -- Royalty rate -- Commission prepare billing
47 statement -- Deposit of revenue.
48 (1) (a) [There is levied] Except as provided in Subsection (1)(b) and subject to the
49 other provisions of this section, for taxable years beginning on or after February 1, 2004, there
50 is imposed a brine shrimp royalty of [.035 of the value] $550,000 each taxable year for the
51 harvest of unprocessed brine shrimp eggs.
52 [(2) (a) The commission shall annually determine the value of unprocessed brine
53 shrimp eggs in accordance with a valuation methodology established by the commission in
54 rule.]
55 [(b) Each person who harvests brine shrimp eggs shall file, in a form prescribed by the
56 commission, a sworn statement with the commission by August 1 of each year. The statement

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shall set out in detail any information required by the commission.]
58 (b) If no unprocessed brine shrimp eggs are harvested during a taxable year, a brine
59 shrimp royalty is not imposed under Subsection (1)(a).
60 (2) (a) (i) A person that harvests unprocessed brine shrimp eggs shall pay a
61 proportional amount of the annual brine shrimp royalty imposed under Subsection (1) based on
62 the total volume of unprocessed brine shrimp eggs harvested by all persons harvesting brine
63 shrimp eggs during that taxable year.
64 (ii) The commission shall determine the royalty rate for a taxable year by dividing the
65 total annual royalty amount under Subsection (1) by the total gross volume of unprocessed
66 brine shrimp eggs harvested during that taxable year.
67 (iii) The royalty amount due from a person for a taxable year is the annual royalty rate
68 calculated under Subsection (2)(a)(ii) multiplied by the gross volume of unprocessed brine
69 shrimp eggs harvested by that person for that taxable year.
70 (b) A person that harvests unprocessed brine shrimp eggs shall report to the
71 Department of Natural Resources the total gross volume of unprocessed brine shrimp eggs
72 harvested by that person for that taxable year on or before the February 15 immediately
73 following the last day of that taxable year.
74 (c) The Department of Natural Resources shall provide the following information to
75 the commission on or before the March 1 immediately following the last day of a taxable year:
76 (i) the total gross volume of unprocessed brine shrimp eggs harvested for that taxable
77 year; and
78 (ii) for each person that harvested brine shrimp eggs for that taxable year:
79 (A) the gross volume of unprocessed brine shrimp eggs harvested by that person for
80 that taxable year; and
81 (B) a current billing address for that person; and
82 (iii) any additional information required by the commission.
83 S [ (d) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
84 Department of Natural Resources may make rules to establish standards for determining the
85 total gross volume of unprocessed brine shrimp eggs harvested by each person.
86 (e) ] (d) s (i) The commission shall prepare and mail a billing statement to each person that
87 harvested unprocessed brine shrimp eggs by the March 30 immediately following the last day

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of a taxable year.
89 (ii) The billing statement under Subsection (2) S [ (e) ] (d) s (i) shall specify:
90 (A) the gross volume of unprocessed brine shrimp eggs harvested by that person for
91 that taxable year;
92 (B) the amount of brine shrimp royalty that the person owes; and
93 (C) the date that the brine shrimp royalty payment is due as provided in Section
94 59-23-5 .
95 (e) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
96 commission may make rules prescribing the information required under Subsection (2)(c)(iii).
97 (3) All revenue generated by the brine shrimp royalty shall be deposited in the Species
98 Protection Account created in Section 63-34-14 .
98a S (4) BEGINNING WITH THE 2004 INTERIM, THE REVENUE AND TAXATION INTERIM
98b COMMITTEE:
98c (a) SHALL REVIEW THE ANNUAL BRINE SHRIMP ROYALTY AMOUNT IMPOSED UNDER THIS
98d SECTION ONE OR MORE TIMES EVERY FIVE YEARS;
98e (b) SHALL DETERMINE ON OR BEFORE THE NOVEMBER INTERIM MEETING OF THE YEAR IN
98f WHICH THE REVENUE AND TAXATION INTERIM COMMITTEE REVIEWS THE ANNUAL BRINE SHRIMP
98g ROYALTY AMOUNT IMPOSED UNDER THIS SECTION WHETHER THE ROYALTY AMOUNT SHOULD
98h BE:
98i (i) CONTINUED;
98j (ii) MODIFIED; OR
98k (iii) REPEALED; AND
98l (c) MAY REVIEW ANY OTHER ISSUE RELATED TO THE BRINE SHRIMP ROYALTY IMPOSED
98m UNDER THIS PART AS DETERMINED BY THE REVENUE AND TAXATION INTERIM COMMITTEE. s
99 Section 3. Section 59-23-5 is amended to read:
100 59-23-5. Payment of the brine shrimp royalty.
101 (1) The brine shrimp royalty shall be paid to the commission by the person who
102 harvests the unprocessed brine shrimp eggs [to the commission].
103 (2) The payment shall be accompanied by [the form prescribed] the billing statement
104 prepared by the commission in accordance with Section 59-23-4 .
105 (3) The royalty is due [March 31 for the harvest season just ended] on the April 30
106 immediately following the last day of the taxable year.
107 Section 4. Effective date.
108 If approved by two-thirds of all the members elected to each house, this bill takes effect

109 upon approval by the governor, or the day following the constitutional time limit of Utah
110 Constitution Article VII, Section 8, without the governor's signature, or in the case of a veto,

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the date of veto override.
112 Section 5. Retrospective operation.
113 This bill has retrospective operation for the taxable year beginning on February 1, 2004.