S.B. 76 Enrolled

REVISIONS TO ROYALTY ON BRINE
SHRIMP
2004 GENERAL SESSION
STATE OF UTAH
Sponsor: Thomas V. Hatch

LONG TITLE
General Description:
This bill modifies the Brine Shrimp Royalty Act.
Highlighted Provisions:
This bill:
. provides definitions;
. provides that a brine shrimp royalty of $550,000 is due each taxable year;
. provides a calculation to determine the annual brine shrimp royalty rate;
. establishes procedures and requirements for assessing the brine shrimp royalty each
year;
. grants rulemaking authority to the Utah State Tax Commission;
. changes the date that the brine shrimp royalty is due;
. requires the Revenue and Taxation Interim Committee to review the annual brine
shrimp royalty amount at least once every five years; and
. makes technical changes.
Monies Appropriated in this Bill:
None
Other Special Clauses:
This bill provides an immediate effective date.
This bill provides for retrospective operation.
Utah Code Sections Affected:
AMENDS:
59-23-3, as enacted by Chapter 179, Laws of Utah 1997

59-23-4, as last amended by Chapter 21, Laws of Utah 1999
59-23-5, as enacted by Chapter 179, Laws of Utah 1997

Be it enacted by the Legislature of the state of Utah:
Section 1. Section 59-23-3 is amended to read:
59-23-3. Definitions.
As used in this chapter:
(1) "Brine shrimp eggs" means dormant, early stage brine shrimp embryos encapsulated as
cysts that are harvested from the waters of the state.
(2) "Taxable year" means a one-year period beginning on February 1 and ending on
January 31 of the following year.
Section 2. Section 59-23-4 is amended to read:
59-23-4. Brine shrimp royalty -- Royalty rate -- Commission prepare billing
statement -- Deposit of revenue.
(1) (a) [There is levied] Except as provided in Subsection (1)(b) and subject to the other
provisions of this section, for taxable years beginning on or after February 1, 2004, there is
imposed a brine shrimp royalty of [.035 of the value] $550,000 each taxable year for the harvest
of unprocessed brine shrimp eggs.
[(2) (a) The commission shall annually determine the value of unprocessed brine shrimp
eggs in accordance with a valuation methodology established by the commission in rule.]
[(b) Each person who harvests brine shrimp eggs shall file, in a form prescribed by the
commission, a sworn statement with the commission by August 1 of each year. The statement
shall set out in detail any information required by the commission.]
(b) If no unprocessed brine shrimp eggs are harvested during a taxable year, a brine
shrimp royalty is not imposed under Subsection (1)(a).
(2) (a) (i) A person that harvests unprocessed brine shrimp eggs shall pay a proportional
amount of the annual brine shrimp royalty imposed under Subsection (1) based on the total
volume of unprocessed brine shrimp eggs harvested by all persons harvesting brine shrimp eggs

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during that taxable year.
(ii) The commission shall determine the royalty rate for a taxable year by dividing the total
annual royalty amount under Subsection (1) by the total gross volume of unprocessed brine
shrimp eggs harvested during that taxable year.
(iii) The royalty amount due from a person for a taxable year is the annual royalty rate
calculated under Subsection (2)(a)(ii) multiplied by the gross volume of unprocessed brine shrimp
eggs harvested by that person for that taxable year.
(b) A person that harvests unprocessed brine shrimp eggs shall report to the Department
of Natural Resources the total gross volume of unprocessed brine shrimp eggs harvested by that
person for that taxable year on or before the February 15 immediately following the last day of
that taxable year.
(c) The Department of Natural Resources shall provide the following information to the
commission on or before the March 1 immediately following the last day of a taxable year:
(i) the total gross volume of unprocessed brine shrimp eggs harvested for that taxable
year; and
(ii) for each person that harvested brine shrimp eggs for that taxable year:
(A) the gross volume of unprocessed brine shrimp eggs harvested by that person for that
taxable year; and
(B) a current billing address for that person; and
(iii) any additional information required by the commission.
(d) (i) The commission shall prepare and mail a billing statement to each person that
harvested unprocessed brine shrimp eggs by the March 30 immediately following the last day of a
taxable year.
(ii) The billing statement under Subsection (2)(d)(i) shall specify:
(A) the gross volume of unprocessed brine shrimp eggs harvested by that person for that
taxable year;
(B) the amount of brine shrimp royalty that the person owes; and
(C) the date that the brine shrimp royalty payment is due as provided in Section 59-23-5 .

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(e) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
commission may make rules prescribing the information required under Subsection (2)(c)(iii).
(3) All revenue generated by the brine shrimp royalty shall be deposited in the Species
Protection Account created in Section 63-34-14 .
(4) Beginning with the 2004 interim, the Revenue and Taxation Interim Committee:
(a) shall review the annual brine shrimp royalty amount imposed under this section one or
more times every five years;
(b) shall determine on or before the November interim meeting of the year in which the
Revenue and Taxation Interim Committee reviews the annual brine shrimp royalty amount
imposed under this section whether the royalty amount should be:
(i) continued;
(ii) modified; or
(iii) repealed; and
(c) may review any other issue related to the brine shrimp royalty imposed under this part
as determined by the Revenue and Taxation Interim Committee.
Section 3. Section 59-23-5 is amended to read:
59-23-5. Payment of the brine shrimp royalty.
(1) The brine shrimp royalty shall be paid to the commission by the person who harvests
the unprocessed brine shrimp eggs [to the commission].
(2) The payment shall be accompanied by [the form prescribed] the billing statement
prepared by the commission in accordance with Section 59-23-4 .
(3) The royalty is due [March 31 for the harvest season just ended] on the April 30
immediately following the last day of the taxable year.
Section 4. Effective date.
If approved by two-thirds of all the members elected to each house, this bill takes effect
upon approval by the governor, or the day following the constitutional time limit of Utah
Constitution Article VII, Section 8, without the governor's signature, or in the case of a veto, the
date of veto override.

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Section 5. Retrospective operation.
This bill has retrospective operation for the taxable year beginning on February 1, 2004.

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