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First Substitute H.B. 210

Representative Merlynn T. Newbold proposes the following substitute bill:


             1     
SEVERANCE TAX AMENDMENTS

             2     
2012 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Jim Nielson

             5     
Senate Sponsor: Lyle W. Hillyard

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill amends provisions related to severance taxes to address the deposit of certain
             10      severance tax revenue into the General Fund and the permanent state trust fund.
             11      Highlighted Provisions:
             12          This bill:
             13          .    provides that certain severance tax revenue be deposited into the General Fund and
             14      the permanent state trust fund; and
             15          .    makes technical and conforming changes.
             16      Money Appropriated in this Bill:
             17          None
             18      Other Special Clauses:
             19          This bill provides an effective date.
             20      Utah Code Sections Affected:
             21      AMENDS:
             22          9-10-108, as last amended by Laws of Utah 2011, Chapter 303
             23          51-9-305, as last amended by Laws of Utah 2011, Chapter 239
             24          59-5-115, as last amended by Laws of Utah 2008, Chapter 141
             25          59-5-116, as last amended by Laws of Utah 2010, Chapter 28


             26          59-5-119, as last amended by Laws of Utah 2007, Chapter 104
             27          59-5-215, as last amended by Laws of Utah 2008, Chapter 141
             28     
             29      Be it enacted by the Legislature of the state of Utah:
             30          Section 1. Section 9-10-108 is amended to read:
             31           9-10-108. Deposits into fund.
             32          (1) [All money received] Money required to be deposited into the Uintah Basin
             33      Revitalization Fund under Section 59-5-116 shall be deposited [in] into the Uintah Basin
             34      Revitalization Fund [provided that no] if a business or activity fee or tax based on gross
             35      receipts has not been imposed by a county or the Tribe on oil and gas activities.
             36          (2) (a) Nothing in this section prohibits a county from imposing a charge described in
             37      Subsection (1) with respect to any gathering, transmission, or local distribution pipeline in
             38      which the county owns an interest.
             39          (b) Nothing in this section prohibits the Tribe from imposing a charge described in
             40      Subsection (1) with respect to any gathering, transmission, or local distribution pipeline in
             41      which the Tribe owns an interest.
             42          Section 2. Section 51-9-305 is amended to read:
             43           51-9-305. Deposit of certain severance tax revenues.
             44          (1) (a) [After] Beginning on July 1, 2012, and ending on June 30, 2016, after making
             45      the distributions of oil and gas severance tax revenues as required under Sections 59-5-116 and
             46      59-5-119 , the Division of Finance shall make the distributions required under [Subsections]
             47      Subsection (2) [through (5)].
             48          (2) If authorized by law, the Division of Finance shall credit to the permanent state
             49      trust fund all revenue collected in a fiscal year from a tax imposed under Title 59, Chapter 5,
             50      Severance Tax on Oil, Gas, and Mining, that:
             51          (a) for fiscal year 2012-13, exceeds $76,720,000;
             52          (b) for fiscal year 2013-14, exceeds $57,540,000;
             53          (c) for fiscal year 2014-15, exceeds $38,360,000; and
             54          (d) for fiscal year 2015-16, exceeds $19,180,000.
             55          (3) Beginning on July 1, 2016, after making the distributions of oil and gas severance
             56      tax revenues as required under Sections 59-5-116 and 59-5-119 , the Division of Finance shall


             57      deposit revenue collected from a tax imposed under Title 59, Chapter 5, Severance Tax on Oil,
             58      Gas, and Mining, into the permanent state trust fund.
             59          [(b)] (4) For purposes of this section, revenue collected from [severance taxes on oil
             60      and gas] a tax imposed under Title 59, Chapter 5, Severance Tax on Oil, Gas, and Mining, does
             61      not include revenue that is distributed under Section 59-5-116 or 59-5-119 .
             62          [(2) (a) Beginning with fiscal year 2008-09 and ending with fiscal year 2010-11, if
             63      authorized by law, the Division of Finance shall credit to the permanent state trust fund all
             64      revenue collected in a fiscal year from severance taxes on oil and gas imposed under Title 59,
             65      Chapter 5, Severance Tax on Oil, Gas, and Mining, that exceed $71,000,000.]
             66          [(b) Beginning with fiscal year 2011-12, if authorized by law, the Division of Finance
             67      shall credit to the permanent state trust fund all revenue collected in a fiscal year from
             68      severance taxes on oil and gas imposed under Title 59, Chapter 5, Severance Tax on Oil, Gas,
             69      and Mining, that exceed $77,000,000.]
             70          [(3) Beginning with fiscal year 2008-09, if authorized by law, the Division of Finance
             71      shall credit to the permanent state trust fund all revenue collected in a fiscal year from
             72      severance taxes on mining imposed under Title 59, Chapter 5, Severance Tax on Oil, Gas, and
             73      Mining, that exceed $27,600,000.]
             74          [(4)] (5) The state treasurer shall invest and separately account for the earnings on
             75      funds that are deposited into the permanent state trust fund under this section.
             76          [(5)] (6) (a) In accordance with Utah Constitution Article XXII, Section 4, the interest
             77      and dividends earned annually on revenue from severance taxes that are deposited into the
             78      permanent state trust fund shall be deposited in the General Fund.
             79          (b) Interest and dividends earned on revenue from severance taxes that are deposited in
             80      the General Fund pursuant to Subsection [(5)] (6)(a) shall be credited to the Infrastructure and
             81      Economic Diversification Investment Account created in Section 51-9-303 .
             82          Section 3. Section 59-5-115 is amended to read:
             83           59-5-115. Disposition of taxes collected -- Credit to permanent state trust fund.
             84          [All taxes ] (1) Beginning on July 1, 2012, and ending on June 30, 2016, except as
             85      provided in Section 51-9-305 , 59-5-116 , or 59-5-119 , a tax imposed and collected under
             86      Section 59-5-102 shall be paid to the commission, promptly remitted to the state treasurer, and
             87      [except those taxes otherwise allocated under Section 51-9-305 , 59-5-116 , or 59-5-119 ,]


             88      credited to the General Fund.
             89          (2) Beginning on July 1, 2016, except as provided in Section 59-5-116 or 59-5-119 and
             90      in accordance with Section 51-9-305 , a tax imposed and collected under Section 59-5-102 shall
             91      be paid to the commission, promptly remitted to the state treasurer, and credited to the
             92      permanent state trust fund.
             93          Section 4. Section 59-5-116 is amended to read:
             94           59-5-116. Disposition of certain taxes collected on Ute Indian land.
             95          (1) Except as provided in Subsection (2), there shall be deposited into the Uintah Basin
             96      Revitalization Fund established in Section 9-10-102 :
             97          (a) for taxes imposed under this part, 33% of the taxes collected on oil, gas, or other
             98      hydrocarbon substances produced from a well:
             99          (i) for which production began on or before June 30, 1995; and
             100          (ii) attributable to interests:
             101          (A) held in trust by the United States for the Tribe and its members; or
             102          (B) on lands identified in Pub. L. No. 440, 62 Stat. 72 (1948);
             103          (b) for taxes imposed under this part, 80% of taxes collected on oil, gas, or other
             104      hydrocarbon substances produced from a well:
             105          (i) for which production began on or after July 1, 1995; and
             106          (ii) attributable to interests:
             107          (A) held in trust by the United States for the Tribe and its members; or
             108          (B) on lands identified in Pub. L. No. 440, 62 Stat. 72 (1948); and
             109          (c) for taxes imposed under this part, 80% of taxes collected on oil, gas, or other
             110      hydrocarbon substances produced from a well:
             111          (i) for which production began on or after January 1, 2001; and
             112          (ii) attributable to interests on lands conveyed to the tribe under the Ute-Moab Land
             113      Restoration Act, Pub. L. No. 106-398, Sec. 3303.
             114          (2) (a) The maximum amount deposited in the Uintah Basin Revitalization Fund may
             115      not exceed:
             116          (i) $3,000,000 in fiscal year 2005-06;
             117          (ii) $5,000,000 in fiscal year 2006-07;
             118          (iii) $6,000,000 in fiscal years 2007-08 and 2008-09; and


             119          (iv) for fiscal years beginning with fiscal year 2009-10, the amount determined by the
             120      commission as described in Subsection (2)(b).
             121          (b) (i) The commission shall increase or decrease the dollar amount described in
             122      Subsection (2)(a)(iii) by a percentage equal to the percentage difference between the consumer
             123      price index for the preceding calendar year and the consumer price index for calendar year
             124      2008; and
             125          (ii) after making an increase or decrease under Subsection (2)(b)(i), round the dollar
             126      amount to the nearest whole dollar.
             127          (c) For purposes of this Subsection (2), "consumer price index" is as described in
             128      Section 1(f)(4), Internal Revenue Code, and defined in Section (1)(f)(5), Internal Revenue
             129      Code.
             130          (d) Any amounts in excess of the maximum described in Subsection (2)(a) shall be
             131      deposited [into the General Fund] as provided in Sections 51-9-305 and 59-5-115 .
             132          Section 5. Section 59-5-119 is amended to read:
             133           59-5-119. Disposition of certain taxes collected on Navajo Nation Land located in
             134      Utah.
             135          (1) Except as provided in Subsection (2), there shall be deposited into the Navajo
             136      Revitalization Fund established in Section 9-11-104 for taxes imposed under this part
             137      beginning on July 1, 1997:
             138          (a) 33% of the taxes collected on oil, gas, or other hydrocarbon substances produced
             139      from a well:
             140          (i) for which production began on or before June 30, 1996; and
             141          (ii) attributable to interests in Utah held in trust by the United States for the Navajo
             142      Nation and its members; and
             143          (b) 80% of the taxes collected on oil, gas, or other hydrocarbon substances produced
             144      from a well:
             145          (i) for which production began on or after July 1, 1996; and
             146          (ii) attributable to interests in Utah held in trust by the United States for the Navajo
             147      Nation and its members.
             148          (2) (a) The maximum amount deposited in the Navajo Revitalization Fund may not
             149      exceed:


             150          (i) $2,000,000 in fiscal year 2006-07; and
             151          (ii) $3,000,000 for fiscal years beginning with fiscal year 2007-08.
             152          (b) Any amounts in excess of the maximum described in Subsection (2)(a) shall be
             153      deposited [into the General Fund] as provided in Sections 51-9-305 and 59-5-115 .
             154          Section 6. Section 59-5-215 is amended to read:
             155           59-5-215. Disposition of taxes collected -- Credit to permanent state trust fund.
             156          [All taxes] (1) Beginning on July 1, 2012, and ending on June 30, 2016, except as
             157      provided in Section 51-9-305 , a tax imposed and collected under Section 59-5-202 shall be
             158      paid to the commission, promptly remitted to the state treasurer, and [except those taxes
             159      otherwise allocated under Section 51-9-305 ,] credited to the General Fund.
             160          (2) Beginning on July 1, 2016, in accordance with Section 51-9-305 , a tax imposed and
             161      collected under Section 59-5-202 shall be paid to the commission, promptly remitted to the
             162      state treasurer, and credited to the permanent state trust fund.
             163          Section 7. Effective date.
             164          This bill takes effect on July 1, 2012.


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