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H.B. 309 Enrolled

             1     

MUNICIPAL ENERGY SALES AND USE TAX

             2     
AMENDMENTS

             3     
2006 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Gregory H. Hughes

             6     
Senate Sponsor: Sheldon L. Killpack

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill modifies provisions of the Municipal Energy Sales and Use Tax Act.
             11      Highlighted Provisions:
             12          This bill:
             13          .    enacts definitions;
             14          .    enacts provisions relating to a reduction in the municipal energy sales and use tax
             15      on the sale or use of natural gas;
             16          .    requires a reduction in the amount of the natural gas portion of the municipal energy
             17      sales and use tax revenues paid to municipalities in December 2006 and December
             18      2007 in an amount equal to the amount by which sales tax revenues exceed the
             19      amount of the previous year's revenues plus 10%;
             20          .    requires gas suppliers to reduce the municipal energy sales and use tax rate in
             21      December 2006 and December 2007 to offset the reduction in the natural gas
             22      portion of the municipal energy sales and use tax revenues to municipalities; and
             23          .    enacts provisions related to the process for accomplishing those reductions.
             24      Monies Appropriated in this Bill:
             25          None
             26      Other Special Clauses:
             27          None
             28      Utah Code Sections Affected:
             29      AMENDS:


             30          10-1-307, as last amended by Chapter 255, Laws of Utah 2004
             31     
             32      Be it enacted by the Legislature of the state of Utah:
             33          Section 1. Section 10-1-307 is amended to read:
             34           10-1-307. Collection of taxes by commission -- Distribution of revenues -- Charge
             35      for services -- Collection of taxes by municipality.
             36          (1) Except for the direct payment provisions provided in Subsection (3), the
             37      commission shall collect, enforce, and administer the municipal energy sales and use tax from
             38      energy suppliers according to the procedures established in Title 59, Chapter 12, Part 1, Tax
             39      Collection, except for Sections 59-12-107.1 through 59-12-107.3 .
             40          (2) (a) Except as provided in Subsections 10-1-203 (3)(d), 10-1-305 (5), and
             41      10-1-310 (2) and subject to Subsection (6), the commission shall pay a municipality the
             42      difference between:
             43          (i) the entire amount collected by the commission from the municipal energy sales and
             44      use tax authorized by this part based on:
             45          (A) the point of sale of the taxable energy if a taxable sale occurs in a municipality that
             46      imposes a municipal energy sales and use tax as provided in this part; or
             47          (B) the point of use of the taxable energy if the use occurs in a municipality that
             48      imposes a municipal energy sales and use tax as provided in this part; and
             49          (ii) the administration fee charged in accordance with Subsection (2)(c).
             50          (b) In accordance with Subsection (2)(a), the commission shall transfer to the
             51      municipality monthly by electronic transfer the revenues generated by the municipal energy
             52      sales and use tax levied by the municipality and collected by the commission.
             53          (c) (i) The commission shall charge a municipality imposing a municipal energy sales
             54      and use tax a fee for administering the tax at the percentage provided in Section 59-12-206 ,
             55      except that the commission may not charge a fee for taxes collected by a municipality under
             56      Subsection (3).
             57          (ii) The fee charged under Subsection (2)(c)(i) shall be:


             58          (A) deposited in the Sales and Use Tax Administrative Fees Account; and
             59          (B) used for sales tax administration as provided in Subsection 59-12-206 (2).
             60          (3) An energy supplier shall pay the municipal energy sales and use tax revenues it
             61      collects from its customers under this part directly to each municipality in which the energy
             62      supplier has sales of taxable energy if:
             63          (a) the municipality is the energy supplier; or
             64          (b) (i) the energy supplier estimates that the municipal energy sales and use tax
             65      collected annually by the energy supplier from its Utah customers equals $1,000,000 or more;
             66      and
             67          (ii) the energy supplier collects the tax imposed by this part.
             68          (4) An energy supplier paying a tax under this part directly to a municipality may retain
             69      the percentage of the tax authorized under Subsection 59-12-108 (2) for the energy supplier's
             70      costs of collecting and remitting the tax.
             71          (5) An energy supplier paying the tax under this part directly to a municipality shall file
             72      an information return with the commission, at least annually, on a form prescribed by the
             73      commission.
             74          (6) (a) As used in this Subsection (6):
             75          (i) "2005 base amount" means, for a municipality that imposes a municipal energy
             76      sales and use tax, the natural gas portion of municipal energy sales and use tax proceeds paid to
             77      the municipality for fiscal year 2005.
             78          (ii) "2006 base amount" means, for a municipality that imposes a municipal energy
             79      sales and use tax, the natural gas portion of municipal energy sales and use tax proceeds paid to
             80      the municipality for fiscal year 2006, reduced by the 2006 rebate amount.
             81          (iii) "2006 rebate amount" means, for a municipality that imposes a municipal energy
             82      sales and use tax, the difference between:
             83          (A) the natural gas portion of municipal energy sales and use tax proceeds paid to the
             84      municipality for fiscal year 2006; and
             85          (B) the 2005 base amount, plus:


             86          (I) 10% of the 2005 base amount; and
             87          (II) the natural gas portion of municipal energy sales and use tax proceeds paid to the
             88      municipality for fiscal year 2006 attributable to an increase in the rate of the municipal energy
             89      sales and use tax implemented by the municipality during fiscal year 2006.
             90          (iv) "2007 rebate amount" means, for a municipality that imposes a municipal energy
             91      sales and use tax, the difference between:
             92          (A) the natural gas portion of municipal energy sales and use tax proceeds paid to the
             93      municipality for fiscal year 2007; and
             94          (B) the 2006 base amount, plus:
             95          (I) 10% of the 2006 base amount; and
             96          (II) the natural gas portion of municipal energy sales and use tax proceeds paid to the
             97      municipality for fiscal year 2007 attributable to an increase in the rate of the municipal energy
             98      sales and use tax implemented by the municipality during fiscal year 2007.
             99          (v) "Fiscal year 2005" means the period beginning July 1, 2004 and ending June 30,
             100      2005.
             101          (vi) "Fiscal year 2006" means the period beginning July 1, 2005 and ending June 30,
             102      2006.
             103          (vii) "Fiscal year 2007" means the period beginning July 1, 2006 and ending June 30,
             104      2007.
             105          (viii) "Gas supplier" means an energy supplier that supplies natural gas.
             106          (ix) "Natural gas portion" means the amount of municipal energy sales and use tax
             107      proceeds attributable to sales and uses of natural gas.
             108          (b) (i) In December 2006, each gas supplier shall reduce the natural gas portion of
             109      municipal energy sales and use gas proceeds to be paid to a municipality by the 2006 rebate
             110      amount.
             111          (ii) If the 2006 rebate amount exceeds the amount of the natural gas portion of
             112      municipal energy sales and use tax proceeds for December 2006, the gas supplier shall reduce
             113      the natural gas portion of municipal energy sales and use tax proceeds to be paid to a


             114      municipality each month thereafter until the 2006 rebate amount is exhausted.
             115          (iii) For December 2006 and for each month thereafter that the gas supplier is required
             116      under Subsection (6)(b)(ii) to reduce the natural gas portion of municipal energy sales and use
             117      tax proceeds to be paid to a municipality:
             118          (A) each municipality imposing a municipal energy sales and use tax shall provide the
             119      gas supplier with the amount by which its municipal energy sales and use tax rate applicable to
             120      the sales and uses of natural gas would need to be reduced in order to reduce the natural gas
             121      portion of municipal energy sales and use tax proceeds by the same amount as the reduction to
             122      the municipality; and
             123          (B) each gas supplier shall reduce the municipal energy sales and use tax rate
             124      applicable to sales and uses of natural gas by the amount of the tax rate reduction provided by
             125      the municipality.
             126          (c) (i) In December 2007, each gas supplier shall reduce the natural gas portion of
             127      municipal energy sales and use tax proceeds to be paid to a municipality by the 2007 rebate
             128      amount.
             129          (ii) If the 2007 rebate amount exceeds the amount of the natural gas portion of
             130      municipal energy sales and use tax proceeds for December 2007, the gas supplier shall reduce
             131      the natural gas portion of municipal energy sales and use tax proceeds to be paid to a
             132      municipality each month thereafter until the 2007 rebate amount is exhausted.
             133          (iii) For December 2007 and for each month thereafter that the gas supplier is required
             134      under Subsection (6)(c)(ii) to reduce the natural gas portion of municipal energy sales and use
             135      tax proceeds to be paid to a municipality:
             136          (A) each municipality imposing a municipal energy sales and use tax shall provide the
             137      gas supplier with the amount by which its municipal energy sales and use tax rate applicable to
             138      the sales and uses of natural gas would need to be reduced in order to reduce the natural gas
             139      portion of municipal energy sales and use tax proceeds by the same amount as the reduction to
             140      the municipality; and
             141          (B) each gas supplier shall reduce the municipal energy sales and use tax rate


             142      applicable to sales and uses of natural gas by the amount of the tax rate reduction provided by
             143      the municipality.
             144          (d) Nothing in this Subsection (6) may be construed to require a reduction under
             145      Subsection (6)(b) or (c) if the rebate amount is zero or negative.


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