S.B. 239

1

SEVERANCE TAX REVISIONS
2 2012 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Curtis S. Bramble
5 House Sponsor: ____________
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 takes effect on July 1, 2012.
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, 2021, 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) The Division of Finance shall credit to the permanent state trust fund all revenue
49 collected in a fiscal year from a tax imposed under Title 59, Chapter 5, Severance Tax on Oil,
50 Gas, and Mining, that:
51 (a) for fiscal year 2012-13, exceeds $76,720,000;
52 (b) for fiscal year 2013-14, exceeds $68,200,000;
53 (c) for fiscal year 2014-15, exceeds $59,700,000;
54 (d) for fiscal year 2015-16, exceeds $51,100,000;
55 (e) for fiscal year 2016-17, exceeds $42,600,000;
56 (f) for fiscal year 2017-18, exceeds $34,100,000;
57 (g) for fiscal year 2018-19, exceeds $25,600,000;
58 (h) for fiscal year 2019-20, exceeds $17,000,000; and

59 (i) for fiscal year 2020-21, exceeds $8,500,000.
60 (3) Beginning on July 1, 2021, after making the distributions of oil and gas severance
61 tax revenues as required under Sections 59-5-116 and 59-5-119 , the Division of Finance shall
62 deposit revenue collected from a tax imposed under Title 59, Chapter 5, Severance Tax on Oil,
63 Gas, and Mining, into the permanent state trust fund.
64 [(b)] (4) For purposes of this section, revenue collected from [severance taxes on oil
65 and gas] a tax imposed under Title 59, Chapter 5, Severance Tax on Oil, Gas, and Mining, does
66 not include revenue that is distributed under Section 59-5-116 or 59-5-119 .
67 [(2) (a) Beginning with fiscal year 2008-09 and ending with fiscal year 2010-11, if
68 authorized by law, the Division of Finance shall credit to the permanent state trust fund all
69 revenue collected in a fiscal year from severance taxes on oil and gas imposed under Title 59,
70 Chapter 5, Severance Tax on Oil, Gas, and Mining, that exceed $71,000,000.]
71 [(b) Beginning with fiscal year 2011-12, if authorized by law, the Division of Finance
72 shall credit to the permanent state trust fund all revenue collected in a fiscal year from
73 severance taxes on oil and gas imposed under Title 59, Chapter 5, Severance Tax on Oil, Gas,
74 and Mining, that exceed $77,000,000.]
75 [(3) Beginning with fiscal year 2008-09, if authorized by law, the Division of Finance
76 shall credit to the permanent state trust fund all revenue collected in a fiscal year from
77 severance taxes on mining imposed under Title 59, Chapter 5, Severance Tax on Oil, Gas, and
78 Mining, that exceed $27,600,000.]
79 [(4)] (5) The state treasurer shall invest and separately account for the earnings on
80 funds that are deposited into the permanent state trust fund under this section.
81 [(5)] (6) (a) In accordance with Utah Constitution Article XXII, Section 4, the interest
82 and dividends earned annually on revenue from severance taxes that are deposited into the
83 permanent state trust fund shall be deposited in the General Fund.
84 (b) Interest and dividends earned on revenue from severance taxes that are deposited in
85 the General Fund pursuant to Subsection [(5)] (6)(a) shall be credited to the Infrastructure and
86 Economic Diversification Investment Account created in Section 51-9-303 .
87 Section 3. Section 59-5-115 is amended to read:
88 59-5-115. Disposition of taxes collected -- Credit to permanent state trust fund.
89 [All taxes ] (1) Beginning on July 1, 2012, and ending on June 30, 2021, except as

90 provided in Section 51-9-305 , 59-5-116 , or 59-5-119 , a tax imposed and collected under
91 Section 59-5-102 shall be paid to the commission, promptly remitted to the state treasurer, and
92 [except those taxes otherwise allocated under Section 51-9-305 , 59-5-116 , or 59-5-119 ,]
93 credited to the General Fund.
94 (2) Beginning on July 1, 2021, except as provided in Section 59-5-116 or 59-5-119 and
95 in accordance with Section 51-9-305 , a tax imposed and collected under Section 59-5-102 shall
96 be paid to the commission, promptly remitted to the state treasurer, and credited to the
97 permanent state trust fund.
98 Section 4. Section 59-5-116 is amended to read:
99 59-5-116. Disposition of certain taxes collected on Ute Indian land.
100 (1) Except as provided in Subsection (2), there shall be deposited into the Uintah Basin
101 Revitalization Fund established in Section 9-10-102 :
102 (a) for taxes imposed under this part, 33% of the taxes collected on oil, gas, or other
103 hydrocarbon substances produced from a well:
104 (i) for which production began on or before June 30, 1995; and
105 (ii) attributable to interests:
106 (A) held in trust by the United States for the Tribe and its members; or
107 (B) on lands identified in Pub. L. No. 440, 62 Stat. 72 (1948);
108 (b) for taxes imposed under this part, 80% of taxes collected on oil, gas, or other
109 hydrocarbon substances produced from a well:
110 (i) for which production began on or after July 1, 1995; and
111 (ii) attributable to interests:
112 (A) held in trust by the United States for the Tribe and its members; or
113 (B) on lands identified in Pub. L. No. 440, 62 Stat. 72 (1948); and
114 (c) for taxes imposed under this part, 80% of taxes collected on oil, gas, or other
115 hydrocarbon substances produced from a well:
116 (i) for which production began on or after January 1, 2001; and
117 (ii) attributable to interests on lands conveyed to the tribe under the Ute-Moab Land
118 Restoration Act, Pub. L. No. 106-398, Sec. 3303.
119 (2) (a) The maximum amount deposited in the Uintah Basin Revitalization Fund may
120 not exceed:

121 (i) $3,000,000 in fiscal year 2005-06;
122 (ii) $5,000,000 in fiscal year 2006-07;
123 (iii) $6,000,000 in fiscal years 2007-08 and 2008-09; and
124 (iv) for fiscal years beginning with fiscal year 2009-10, the amount determined by the
125 commission as described in Subsection (2)(b).
126 (b) (i) The commission shall increase or decrease the dollar amount described in
127 Subsection (2)(a)(iii) by a percentage equal to the percentage difference between the consumer
128 price index for the preceding calendar year and the consumer price index for calendar year
129 2008; and
130 (ii) after making an increase or decrease under Subsection (2)(b)(i), round the dollar
131 amount to the nearest whole dollar.
132 (c) For purposes of this Subsection (2), "consumer price index" is as described in
133 Section 1(f)(4), Internal Revenue Code, and defined in Section (1)(f)(5), Internal Revenue
134 Code.
135 (d) Any amounts in excess of the maximum described in Subsection (2)(a) shall be
136 deposited [into the General Fund] as provided in Sections 51-9-305 and 59-5-115 .
137 Section 5. Section 59-5-119 is amended to read:
138 59-5-119. Disposition of certain taxes collected on Navajo Nation land located in
139 Utah.
140 (1) Except as provided in Subsection (2), there shall be deposited into the Navajo
141 Revitalization Fund established in Section 9-11-104 for taxes imposed under this part
142 beginning on July 1, 1997:
143 (a) 33% of the taxes collected on oil, gas, or other hydrocarbon substances produced
144 from a well:
145 (i) for which production began on or before June 30, 1996; and
146 (ii) attributable to interests in Utah held in trust by the United States for the Navajo
147 Nation and its members; and
148 (b) 80% of the taxes collected on oil, gas, or other hydrocarbon substances produced
149 from a well:
150 (i) for which production began on or after July 1, 1996; and
151 (ii) attributable to interests in Utah held in trust by the United States for the Navajo

152 Nation and its members.
153 (2) (a) The maximum amount deposited in the Navajo Revitalization Fund may not
154 exceed:
155 (i) $2,000,000 in fiscal year 2006-07; and
156 (ii) $3,000,000 for fiscal years beginning with fiscal year 2007-08.
157 (b) Any amounts in excess of the maximum described in Subsection (2)(a) shall be
158 deposited [into the General Fund] as provided in Sections 51-9-305 and 59-5-115 .
159 Section 6. Section 59-5-215 is amended to read:
160 59-5-215. Disposition of taxes collected -- Credit to permanent state trust fund.
161 [All taxes] (1) Beginning on July 1, 2012, and ending on June 30, 2021, except as
162 provided in Section 51-9-305 , a tax imposed and collected under Section 59-5-202 shall be
163 paid to the commission, promptly remitted to the state treasurer, and [except those taxes
164 otherwise allocated under Section 51-9-305 ,] credited to the General Fund.
165 (2) Beginning on July 1, 2021, in accordance with Section 51-9-305 , a tax imposed and
166 collected under Section 59-5-202 shall be paid to the commission, promptly remitted to the
167 state treasurer, and credited to the permanent state trust fund.
168 Section 7. Effective date.
169 This bill takes effect on July 1, 2012.




Legislative Review Note
as of 2-14-12 5:28 PM

Office of Legislative Research and General Counsel