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S.B. 129

             1     

BRINE SHRIMP ROYALTY ACT AMENDMENTS

             2     
2005 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Sponsor: Thomas V. Hatch

             5     
             6      LONG TITLE
             7      General Description:
             8          This bill changes the amount of the brine shrimp royalty described in the Brine Shrimp
             9      Royalty Act.
             10      Highlighted Provisions:
             11          This bill:
             12          .    defines terms;
             13          .    beginning on February 1, 2004, and ending on January 31, 2006, imposes for each
             14      tax year a brine shrimp royalty of the lesser of:
             15              .    3.75 cents multiplied by the total pounds of unprocessed brine shrimp eggs that
             16      are harvested in the state during the tax year; or
             17              .    $550,000;
             18          .    beginning on February 1, 2006, imposes for each tax year a brine shrimp royalty of
             19      3.75 cents multiplied by the total pounds of unprocessed brine shrimp eggs that are
             20      harvested in the state during the tax year;
             21          .    describes the royalty amount due from each person that harvests unprocessed brine
             22      shrimp eggs in the state; and
             23          .    makes technical changes.
             24      Monies Appropriated in this Bill:
             25          None
             26      Other Special Clauses:
             27          This bill provides an immediate effective date.


             28          This bill provides retrospective operation.
             29      Utah Code Sections Affected:
             30      AMENDS:
             31          59-23-3, as last amended by Chapter 232, Laws of Utah 2004
             32          59-23-4, as last amended by Chapter 232, Laws of Utah 2004
             33          59-23-5, as last amended by Chapter 232, Laws of Utah 2004
             34     
             35      Be it enacted by the Legislature of the state of Utah:
             36          Section 1. Section 59-23-3 is amended to read:
             37           59-23-3. Definitions.
             38          As used in this chapter:
             39          (1) "Alternate royalty rate" means $550,000 divided by the gross volume of
             40      unprocessed brine shrimp eggs harvested in the state during the tax year.
             41          [(1)] (2) "Brine shrimp eggs" means dormant, early stage brine shrimp embryos
             42      encapsulated as cysts that are harvested from the waters of the state.
             43          [(2)] (3) "[Taxable] Tax year" means a one-year period beginning on February 1 and
             44      ending on January 31 of the following year.
             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) Except as provided in Subsection (1)(b) and subject to the other provisions of
             49      this section, for taxable years beginning on or after February 1, 2004, there is imposed a brine
             50      shrimp royalty of $550,000 each taxable year for the harvest of unprocessed brine shrimp
             51      eggs.]
             52          [(b) If no unprocessed brine shrimp eggs are harvested during a taxable year, a brine
             53      shrimp royalty is not imposed under Subsection (1)(a).]
             54          [(2) (a) (i) A person that harvests unprocessed brine shrimp eggs shall pay a
             55      proportional amount of the annual brine shrimp royalty imposed under Subsection (1) based on
             56      the total volume of unprocessed brine shrimp eggs harvested by all persons harvesting brine
             57      shrimp eggs during that taxable year.]
             58          [(ii) The commission shall determine the royalty rate for a taxable year by dividing the


             59      total annual royalty amount under Subsection (1) by the total gross volume of unprocessed
             60      brine shrimp eggs harvested during that taxable year.]
             61          [(iii) The royalty amount due from a person for a taxable year is the annual royalty rate
             62      calculated under Subsection (2)(a)(ii) multiplied by the gross volume of unprocessed brine
             63      shrimp eggs harvested by that person for that taxable year.]
             64          (1) (a) Beginning on February 1, 2004, and ending on January 31, 2006, there is
             65      imposed for each tax year a brine shrimp royalty of the lesser of:
             66          (i) 3.75 cents multiplied by the total pounds of unprocessed brine shrimp eggs that are
             67      harvested in the state during the tax year; or
             68          (ii) $550,000.
             69          (b) Beginning on February 1, 2006, there is imposed for each tax year a brine shrimp
             70      royalty of 3.75 cents multiplied by the pounds of unprocessed brine shrimp eggs that are
             71      harvested in the state during the tax year.
             72          (2) Beginning on February 1, 2004, and ending on January 31, 2006, the royalty
             73      amount due from a person for each tax year is:
             74          (a) if the brine shrimp royalty for the tax year is as described in Subsection (1)(a)(i),
             75      the gross volume of unprocessed brine shrimp eggs harvested in the state by that person during
             76      that tax year multiplied by 3.75 cents; or
             77          (b) if the brine shrimp royalty for the tax year is $550,000, the gross volume of
             78      unprocessed brine shrimp eggs harvested in the state by that person for that tax year multiplied
             79      by the alternate royalty rate.
             80          (3) Beginning on February 1, 2006, the royalty amount due from a person for a tax year
             81      is the gross volume of unprocessed brine shrimp eggs harvested in the state by that person
             82      during that tax year multiplied by 3.75 cents.
             83          [(b)] (4) (a) A person that harvests unprocessed brine shrimp eggs shall report to the
             84      Department of Natural Resources the total gross volume of unprocessed brine shrimp eggs
             85      harvested by that person for that [taxable] tax year on or before the February 15 immediately
             86      following the last day of that [taxable] tax year.
             87          [(c)] (b) The Department of Natural Resources shall provide the following information
             88      to the commission on or before the March 1 immediately following the last day of a [taxable]
             89      tax year:


             90          (i) the total gross volume of unprocessed brine shrimp eggs harvested for that [taxable]
             91      tax year; and
             92          (ii) for each person that harvested brine shrimp eggs for that [taxable] tax year:
             93          (A) the gross volume of unprocessed brine shrimp eggs harvested by that person for
             94      that [taxable] tax year; and
             95          (B) a current billing address for that person; and
             96          (iii) any additional information required by the commission.
             97          [(d)] (c) (i) The commission shall prepare and mail a billing statement to each person
             98      that harvested unprocessed brine shrimp eggs by the March 30 immediately following the last
             99      day of a [taxable] tax year.
             100          (ii) The billing statement under Subsection [(2)(d)] (4)(c)(i) shall specify:
             101          (A) the gross volume of unprocessed brine shrimp eggs harvested by that person for
             102      that [taxable] tax year;
             103          (B) the amount of brine shrimp royalty that the person owes; and
             104          (C) the date that the brine shrimp royalty payment is due as provided in Section
             105      59-23-5 .
             106          [(e)] (d) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking
             107      Act, the commission may make rules prescribing the information required under Subsection
             108      [(2)(c)] (4)(b)(iii).
             109          [(3)] (5) All revenue generated by the brine shrimp royalty shall be deposited in the
             110      Species Protection Account created in Section 63-34-14 .
             111          [(4)] (6) Beginning with the 2004 interim, the Revenue and Taxation Interim
             112      Committee:
             113          (a) shall review the annual brine shrimp royalty amount imposed under this section one
             114      or more times every five years;
             115          (b) shall determine on or before the November interim meeting of the year in which the
             116      Revenue and Taxation Interim Committee reviews the annual brine shrimp royalty amount
             117      imposed under this section whether the royalty amount should be:
             118          (i) continued;
             119          (ii) modified; or
             120          (iii) repealed; and


             121          (c) may review any other issue related to the brine shrimp royalty imposed under this
             122      part as determined by the Revenue and Taxation Interim Committee.
             123          Section 3. Section 59-23-5 is amended to read:
             124           59-23-5. Payment of the brine shrimp royalty.
             125          (1) The brine shrimp royalty shall be paid to the commission by the person who
             126      harvests the unprocessed brine shrimp eggs.
             127          (2) The payment shall be accompanied by the billing statement prepared by the
             128      commission in accordance with Section 59-23-4 .
             129          (3) The royalty is due on the April 30 immediately following the last day of the
             130      [taxable] tax year.
             131          Section 4. Effective date.
             132          If approved by two-thirds of all the members elected to each house, this bill takes effect
             133      upon approval by the governor, or the day following the constitutional time limit of Utah
             134      Constitution Article VII, Section 8, without the governor's signature, or in the case of a veto,
             135      the date of veto override.
             136          Section 5. Retrospective operation.
             137          This bill has retrospective operation to February 1, 2004.




Legislative Review Note
    as of 1-20-05 6:47 AM


Based on a limited legal review, this legislation has not been determined to have a high
probability of being held unconstitutional.

Office of Legislative Research and General Counsel


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