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H.B. 436

             1     

MUNICIPAL ENERGY SALES AND USE TAX

             2     
REVISIONS

             3     
2007 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Gregory H. Hughes

             6     
Senate Sponsor: ____________

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill modifies a provision relating to the municipal energy sales and use tax.
             11      Highlighted Provisions:
             12          This bill:
             13          .    requires a reduction in the amount of the natural gas portion of the municipal energy
             14      sales and use tax in December 2008 after adjusting for growth;
             15          .    provides definitions; and
             16          .    makes technical changes.
             17      Monies Appropriated in this Bill:
             18          None
             19      Other Special Clauses:
             20          None
             21      Utah Code Sections Affected:
             22      AMENDS:
             23          10-1-307, as last amended by Chapters 253 and 352, Laws of Utah 2006
             24     
             25      Be it enacted by the Legislature of the state of Utah:
             26          Section 1. Section 10-1-307 is amended to read:
             27           10-1-307. Collection of taxes by commission -- Distribution of revenues -- Charge



             28      for services -- Collection of taxes by municipality.
             29          (1) Except for the direct payment provisions provided in Subsection (3), the
             30      commission shall collect, enforce, and administer the municipal energy sales and use tax from
             31      energy suppliers according to the procedures established in Title 59, Chapter 12, Part 1, Tax
             32      Collection, except for Section 59-12-107.1 .
             33          (2) (a) Except as provided in Subsections 10-1-203 (3)(d), 10-1-305 (5), and
             34      10-1-310 (2) and subject to Subsection (6), the commission shall pay a municipality the
             35      difference between:
             36          (i) the entire amount collected by the commission from the municipal energy sales and
             37      use tax authorized by this part based on:
             38          (A) the point of sale of the taxable energy if a taxable sale occurs in a municipality that
             39      imposes a municipal energy sales and use tax as provided in this part; or
             40          (B) the point of use of the taxable energy if the use occurs in a municipality that
             41      imposes a municipal energy sales and use tax as provided in this part; and
             42          (ii) the administration fee charged in accordance with Subsection (2)(c).
             43          (b) In accordance with Subsection (2)(a), the commission shall transfer to the
             44      municipality monthly by electronic transfer the revenues generated by the municipal energy
             45      sales and use tax levied by the municipality and collected by the commission.
             46          (c) (i) The commission shall charge a municipality imposing a municipal energy sales
             47      and use tax a fee for administering the tax at the percentage provided in Section 59-12-206 ,
             48      except that the commission may not charge a fee for taxes collected by a municipality under
             49      Subsection (3).
             50          (ii) The fee charged under Subsection (2)(c)(i) shall be:
             51          (A) deposited in the Sales and Use Tax Administrative Fees Account; and
             52          (B) used for sales tax administration as provided in Subsection 59-12-206 (2).
             53          (3) An energy supplier shall pay the municipal energy sales and use tax revenues it
             54      collects from its customers under this part directly to each municipality in which the energy
             55      supplier has sales of taxable energy if:
             56          (a) the municipality is the energy supplier; or
             57          (b) (i) the energy supplier estimates that the municipal energy sales and use tax
             58      collected annually by the energy supplier from its Utah customers equals $1,000,000 or more;


             59      and
             60          (ii) the energy supplier collects the tax imposed by this part.
             61          (4) An energy supplier paying a tax under this part directly to a municipality may retain
             62      the percentage of the tax authorized under Subsection 59-12-108 (2) for the energy supplier's
             63      costs of collecting and remitting the tax.
             64          (5) An energy supplier paying the tax under this part directly to a municipality shall file
             65      an information return with the commission, at least annually, on a form prescribed by the
             66      commission.
             67          (6) (a) As used in this Subsection (6):
             68          (i) "2005 base amount" means, for a municipality that imposes a municipal energy
             69      sales and use tax, the natural gas portion of municipal energy sales and use tax proceeds paid to
             70      the municipality for fiscal year 2005.
             71          (ii) "2006 base amount" means, for a municipality that imposes a municipal energy
             72      sales and use tax, the natural gas portion of municipal energy sales and use tax proceeds paid to
             73      the municipality for fiscal year 2006, reduced by the 2006 rebate amount.
             74          (iii) "2006 growth estimate" means the three-year average of the United States Census
             75      Bureau's population estimate for a municipality for calendar years 2004, 2005, and 2006.
             76          (iv) "2006 growth percentage" means:
             77          (A) 14%, for a municipality whose 2006 growth estimate is equal to or greater than
             78      10%;
             79          (B) 12%, for a municipality whose 2006 growth estimate is 5% or greater but less than
             80      10%; and
             81          (C) 10%, for a municipality whose 2006 growth estimate is less than 5%.
             82          [(iii)] (v) "2006 rebate amount" means, for a municipality that imposes a municipal
             83      energy sales and use tax, the difference between:
             84          (A) the natural gas portion of municipal energy sales and use tax proceeds paid to the
             85      municipality for fiscal year 2006; and
             86          (B) the 2005 base amount, plus:
             87          (I) 10% of the 2005 base amount; and
             88          (II) the natural gas portion of municipal energy sales and use tax proceeds paid to the
             89      municipality for fiscal year 2006 attributable to an increase in the rate of the municipal energy


             90      sales and use tax implemented by the municipality during fiscal year 2006.
             91          (vi) "2007 base amount" means, for a municipality that imposes a municipal energy
             92      sales and use tax, the natural gas portion of municipal energy sales and use tax proceeds paid to
             93      the municipality for fiscal year 2007, reduced by the 2007 rebate amount.
             94          [(iv)] (vii) "2007 rebate amount" means, for a municipality that imposes a municipal
             95      energy sales and use tax, the difference between:
             96          (A) the natural gas portion of municipal energy sales and use tax proceeds paid to the
             97      municipality for fiscal year 2007; and
             98          (B) the 2006 base amount, plus:
             99          (I) 10% of the 2006 base amount; and
             100          (II) the natural gas portion of municipal energy sales and use tax proceeds paid to the
             101      municipality for fiscal year 2007 attributable to an increase in the rate of the municipal energy
             102      sales and use tax implemented by the municipality during fiscal year 2007.
             103          (viii) "2008 rebate amount" means, for a municipality that imposes a municipal energy
             104      sales and use tax, the difference between:
             105          (A) the natural gas portion of municipal energy sales and use tax proceeds paid to the
             106      municipality for fiscal year 2008; and
             107          (B) the 2007 base amount, plus:
             108          (I) a percentage of the 2007 base amount equal to the 2006 growth percentage; and
             109          (II) the natural gas portion of municipal energy sales and use tax proceeds paid to the
             110      municipality for fiscal year 2008 attributable to an increase in the rate of the municipal energy
             111      sales and use tax implemented by the municipality during fiscal year 2008.
             112          [(v)] (ix) "Fiscal year 2005" means the period beginning July 1, 2004 and ending June
             113      30, 2005.
             114          [(vi)] (x) "Fiscal year 2006" means the period beginning July 1, 2005 and ending June
             115      30, 2006.
             116          [(vii)] (xi) "Fiscal year 2007" means the period beginning July 1, 2006 and ending June
             117      30, 2007.
             118          [(viii)] (xii) "Gas supplier" means an energy supplier that supplies natural gas.
             119          [(ix)] (xiii) "Natural gas portion" means the amount of municipal energy sales and use
             120      tax proceeds attributable to sales and uses of natural gas.


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


             152      portion of municipal energy sales and use tax proceeds by the same amount as the reduction to
             153      the municipality; and
             154          (B) each gas supplier shall reduce the municipal energy sales and use tax rate
             155      applicable to sales and uses of natural gas by the amount of the tax rate reduction provided by
             156      the municipality.
             157          (d) (i) In December 2008, each gas supplier shall reduce the natural gas portion of
             158      municipal energy sales and use tax proceeds to be paid to a municipality by the 2008 rebate
             159      amount.
             160          (ii) If the 2008 rebate amount exceeds the amount of the natural gas portion of
             161      municipal energy sales and use tax proceeds for December 2008, the gas supplier shall reduce
             162      the natural gas portion of municipal energy sales and use tax proceeds to be paid to a
             163      municipality each month thereafter until the 2008 rebate amount is exhausted.
             164          (iii) For December 2008 and for each month thereafter that the gas supplier is required
             165      under Subsection (6)(d)(ii) to reduce the natural gas portion of municipal energy sales and use
             166      tax proceeds to be paid to a municipality:
             167          (A) each municipality imposing a municipal energy sales and use tax shall provide the
             168      gas supplier with the amount by which its municipal energy sales and use tax rate applicable to
             169      the sales and uses of natural gas would need to be reduced in order to reduce the natural gas
             170      portion of municipal energy sales and use tax proceeds by the same amount as the reduction to
             171      the municipality; and
             172          (B) each gas supplier shall reduce the municipal energy sales and use tax rate
             173      applicable to sales and uses of natural gas by the amount of the tax rate reduction provided by
             174      the municipality.
             175          [(d)] (e) Nothing in this Subsection (6) may be construed to require a reduction under
             176      Subsection (6)(b) [or], (c), or (d) if the rebate amount is zero or negative.




Legislative Review Note
    as of 2-15-07 11:29 AM


Office of Legislative Research and General Counsel


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