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S.B. 60

This document includes Senate 2nd Reading Floor Amendments incorporated into the bill on Tue, Feb 25, 2014 at 3:30 PM by cmillar. -->              1     

FUEL EXCISE TAX AMENDMENTS

             2     
2014 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: John L. Valentine

             5     
House Sponsor: Johnny Anderson

             6     

             7      LONG TITLE
             8      General Description:
             9          This bill modifies the Motor and Special Fuel Tax Act by amending provisions relating
             10      to motor and special fuel tax rates.
             11      Highlighted Provisions:
             12          This bill:
             13          .    reduces the cents per gallon tax rate that is imposed on motor fuels and special
             14      fuels;
             15          .    imposes a percentage tax per gallon on motor fuel and special fuel based on the
             16      previous calendar year statewide average rack price of a gallon of regular unleaded
             17      motor fuel;
             18          .    establishes procedures for the State Tax Commission to determine the previous
             19      calendar year statewide average rack price of a gallon of regular unleaded motor
             20      fuel;
             21          .    provides that the adjusted fuel tax rate shall take effect on July 1 of each year; and
             22          .    makes technical corrections.
             23      Money Appropriated in this Bill:
             24          None
             25      Other Special Clauses:
             26          This bill takes effect on January 1, 2015.
             27      Utah Code Sections Affected:



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             28
     AMENDS:
             29          59-13-102, as last amended by Laws of Utah 2012, Chapter 369
             30          59-13-201, as last amended by Laws of Utah 2010, Chapter 308
             31          59-13-301, as last amended by Laws of Utah 2011, Chapter 259
             32     

             33      Be it enacted by the Legislature of the state of Utah:
             34          Section 1. Section 59-13-102 is amended to read:
             35           59-13-102. Definitions.
             36          As used in this chapter:
             37          (1) "Aviation fuel" means fuel that is sold at airports and used exclusively for the
             38      operation of aircraft.
             39          (2) "Clean fuel" means:
             40          (a) the following special fuels:
             41          (i) propane;
             42          (ii) compressed natural gas;
             43          (iii) liquified natural gas; or
             44          (iv) electricity; or
             45          (b) any motor or special fuel that meets the clean fuel vehicle standards in the federal
             46      Clean Air Act Amendments of 1990, Title II.
             47          (3) "Commission" means the State Tax Commission.
             48          (4) (a) "Diesel fuel" means any liquid that is commonly or commercially known,
             49      offered for sale, or used as a fuel in diesel engines.
             50          (b) "Diesel fuel" includes any combustible liquid, by whatever name the liquid may be
             51      known or sold, when the liquid is used in an internal combustion engine for the generation of
             52      power to operate a motor vehicle licensed to operate on the highway, except fuel that is subject
             53      to the tax imposed in Part 2, Motor Fuel, and Part 4, Aviation Fuel, of this chapter.
             54          (5) "Distributor" means any person in this state who:
             55          (a) imports or causes to be imported motor fuel for use, distribution, or sale, whether at
             56      retail or wholesale;
             57          (b) produces, refines, manufactures, or compounds motor fuel in this state for use,
             58      distribution, or sale in this state;



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         (c) is engaged in the business of purchasing motor fuel for resale in wholesale
             60      quantities to retail dealers of motor fuel and who accounts for his own motor fuel tax liability;
             61      or
             62          (d) for purposes of Part 4, Aviation Fuel, only, makes retail sales of aviation fuel to:
             63          (i) federally certificated air carriers; and
             64          (ii) other persons.
             65          (6) "Dyed diesel fuel" means diesel fuel that is dyed in accordance with 26 U.S.C. Sec.
             66      4082 or United States Environmental Protection Agency or Internal Revenue Service
             67      regulations and that is considered destined for nontaxable off-highway use.
             68          (7) "Exchange agreement" means an agreement between licensed suppliers where one
             69      is a position holder in a terminal who agrees to deliver taxable special fuel to the other supplier
             70      or the other supplier's customer at the loading rack of the terminal where the delivering supplier
             71      holds an inventory position.
             72          (8) "Federally certificated air carrier" means a person who holds a certificate issued by
             73      the Federal Aviation Administration authorizing the person to conduct an all-cargo operation or
             74      scheduled operation, as defined in 14 C.F.R. Sec. 110.2.
             75          (9) "Fuels" means any gas, liquid, solid, mixture, or other energy source which is
             76      generally used in an engine or motor for the generation of power, including aviation fuel, clean
             77      fuel, diesel fuel, motor fuel, and special fuel.
             78          (10) "Highway" means every way or place, of whatever nature, generally open to the
             79      use of the public for the purpose of vehicular travel notwithstanding that the way or place may
             80      be temporarily closed for the purpose of construction, maintenance, or repair.
             81          (11) "Motor fuel" means fuel that is commonly or commercially known or sold as
             82      gasoline or gasohol and is used for any purpose, but does not include aviation fuel.
             83          (12) "Motor fuels received" means:
             84          (a) motor fuels that have been loaded at the refinery or other place into tank cars,
             85      placed in any tank at the refinery from which any withdrawals are made directly into tank
             86      trucks, tank wagons, or other types of transportation equipment, containers, or facilities other
             87      than tank cars, or placed in any tank at the refinery from which any sales, uses, or deliveries not
             88      involving transportation are made directly; or
             89          (b) motor fuels that have been imported by any person into the state from any other



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     state or territory by tank car, tank truck, pipeline, or any other conveyance at the time when,
             91      and the place where, the interstate transportation of the motor fuel is completed within the state
             92      by the person who at the time of the delivery is the owner of the motor fuel.
             93          (13) "Oil pricing service" means an organization that:
             94          (a) publishes wholesale petroleum prices within the United States;
             95          (b) publishes at least 25,000 rack prices on a daily basis; and
             96          (c) receives daily gasoline and diesel prices from at least 100,000 retail outlets in the
             97      United States and Canada.
             98          [(13)] (14) (a) "Qualified motor vehicle" means a special fuel-powered motor vehicle
             99      used, designed, or maintained for transportation of persons or property which:
             100          (i) has a gross vehicle weight or registered gross vehicle weight exceeding 26,000
             101      pounds;
             102          (ii) has three or more axles regardless of weight; or
             103          (iii) is used in a combination of vehicles when the weight of the combination of
             104      vehicles exceeds 26,000 pounds gross vehicle weight.
             105          (b) "Qualified motor vehicle" does not include a recreational vehicle not used in
             106      connection with any business activity.
             107          [(14)] (15) "Rack," as used in Part 3, Special Fuel, means a deck, platform, or open bay
             108      which consists of a series of metered pipes and hoses for the delivery or removal of diesel fuel
             109      from a refinery or terminal into a motor vehicle, rail car, or vessel.
             110          [(15)] (16) "Removal," as used in Part 3, Special Fuel, means the physical transfer of
             111      diesel fuel from a production, manufacturing, terminal, or refinery facility and includes use of
             112      diesel fuel. Removal does not include:
             113          (a) loss by evaporation or destruction; or
             114          (b) transfers between refineries, racks, or terminals.
             115          [(16)] (17) (a) "Special fuel" means any fuel regardless of name or character that:
             116          (i) is usable as fuel to operate or propel a motor vehicle upon the public highways of
             117      the state; and
             118          (ii) is not taxed under the category of aviation or motor fuel.
             119          (b) Special fuel includes:
             120          (i) fuels that are not conveniently measurable on a gallonage basis; and



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         (ii) diesel fuel.
             122          [(17)] (18) "Supplier," as used in Part 3, Special Fuel, means a person who:
             123          (a) imports or acquires immediately upon importation into this state diesel fuel from
             124      within or without a state, territory, or possession of the United States or the District of
             125      Columbia;
             126          (b) produces, manufactures, refines, or blends diesel fuel in this state;
             127          (c) otherwise acquires for distribution or sale in this state, diesel fuel with respect to
             128      which there has been no previous taxable sale or use; or
             129          (d) is in a two party exchange where the receiving party is deemed to be the supplier.
             130          [(18)] (19) "Terminal," as used in Part 3, Special Fuel, means a facility for the storage
             131      of diesel fuel which is supplied by a motor vehicle, pipeline, or vessel and from which diesel
             132      fuel is removed for distribution at a rack.
             133          [(19)] (20) "Two party exchange" means a transaction in which special fuel is
             134      transferred between licensed suppliers pursuant to an exchange agreement.
             135          [(20)] (21) "Undyed diesel fuel" means diesel fuel that is not subject to the dyeing
             136      requirements in accordance with 26 U.S.C. Sec. 4082 or United States Environmental
             137      Protection Agency or Internal Revenue Service regulations.
             138          [(21)] (22) "Use," as used in Part 3, Special Fuel, means the consumption of special
             139      fuel for the operation or propulsion of a motor vehicle upon the public highways of the state
             140      and includes the reception of special fuel into the fuel supply tank of a motor vehicle.
             141          [(22)] (23) "User," as used in Part 3, Special Fuel, means any person who uses special
             142      fuel within this state in an engine or motor for the generation of power to operate or propel a
             143      motor vehicle upon the public highways of the state.
             144          [(23)] (24) "Ute tribal member" means an enrolled member of the Ute tribe.
             145          [(24)] (25) "Ute tribe" means the Ute Indian Tribe of the Uintah and Ouray
             146      Reservation.
             147          [(25)] (26) "Ute trust land" means the lands:
             148          (a) of the Uintah and Ouray Reservation that are held in trust by the United States for
             149      the benefit of:
             150          (i) the Ute tribe;
             151          (ii) an individual; or



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         (iii) a group of individuals; or
             153          (b) specified as trust land by agreement between the governor and the Ute tribe meeting
             154      the requirements of Subsections 59-13-201.5 (3) and 59-13-301.5 (3).
             155          Section 2. Section 59-13-201 is amended to read:
             156           59-13-201. Rate -- Tax basis -- Exemptions -- Revenue deposited into the
             157      Transportation Fund -- Restricted account for boating uses -- Refunds -- Reduction of tax
             158      in limited circumstances.
             159          (1) (a) Subject to the provisions of this section, a tax is imposed [at the rate of 24-1/2
             160      cents per gallon] upon all motor fuel that is sold, used, or received for sale or used in this
             161      state[.] at the rate of:
             162          (i) until June 30, 2015, 24-1/2 cents per gallon; and
             163          (ii) beginning on July 1, 2015, 14 cents per gallon.
             164          (b) (i) Beginning on July 1, 2015, and in addition to the rate imposed under Subsection
             165      (1)(a), a tax is imposed at the rate of 3.69% of the statewide average rack price of a gallon of
             166      motor fuel per gallon upon all motor fuel that is sold, used, or received for sale or used in this
             167      state.
             168          (ii) Subject to the requirement under Subsection (1)(b)(iii), the statewide average rack
             169      price of a gallon of motor fuel under Subsection (1)(b)(i) shall be determined by calculating the
             170      previous calendar year statewide average rack price of a gallon of regular unleaded motor fuel,
             171      excluding federal and state excise taxes, for the 12 months ending on the preceding December
             172      31 as published by an oil pricing service.
             173          (iii) The statewide average rack price of a gallon of motor fuel determined under
             174      Subsection (1)(b)(ii) may not be less than $2.84 per gallon.
             175          (iv) The commission shall annually:
             176          (A) determine the statewide average rack price of a gallon of motor fuel in accordance
             177      with Subsection (1)(b)(ii); S. [ and ] .S
             178          (B) adjust the fuel tax imposed under Subsection (1)(b)(i), rounded to the nearest
             179      one-tenth of a cent, based on the determination under Subsection (1)(b)(ii) S. ; and
             179a          (C) post or otherwise make public the adjusted fuel tax rate as determined in
             179b      Subsection (1)(b)(iv)(B) no later than 60 days prior to the annual effective date under
             179c      Subsection (1)(b)(v) .S .
             180          (v) The fuel tax rate imposed under this Subsection (1)(b) and adjusted as required
             181      under Subsection (1)(b)(iv) shall take effect on July 1 of each year.
             182          [(b)] (c) In lieu of the [tax] taxes imposed under [Subsection] Subsections (1)(a) and



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     (b) and subject to the provisions of this section, a tax is imposed at the rate of 3/19 of the [rate]
             184      rates imposed under [Subsection] Subsections (1)(a) and (b), rounded up to the nearest penny,
             185      upon all motor fuels that meet the definition of clean fuel in Section 59-13-102 and are sold,
             186      used, or received for sale or use in this state.
             187          (2) Any increase or decrease in tax rate applies to motor fuel that is imported to the
             188      state or sold at refineries in the state on or after the effective date of the rate change.
             189          (3) (a) No motor fuel tax is imposed upon:
             190          (i) motor fuel that is brought into and sold in this state in original packages as purely
             191      interstate commerce sales;
             192          (ii) motor fuel that is exported from this state if proof of actual exportation on forms
             193      prescribed by the commission is made within 180 days after exportation;
             194          (iii) motor fuel or components of motor fuel that is sold and used in this state and
             195      distilled from coal, oil shale, rock asphalt, bituminous sand, or solid hydrocarbons located in
             196      this state; or
             197          (iv) motor fuel that is sold to the United States government, this state, or the political
             198      subdivisions of this state.
             199          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             200      commission shall make rules governing the procedures for administering the tax exemption
             201      provided under Subsection (3)(a)(iv).
             202          (4) The commission may either collect no tax on motor fuel exported from the state or,
             203      upon application, refund the tax paid.
             204          (5) (a) All revenue received by the commission under this part shall be deposited daily
             205      with the state treasurer and credited to the Transportation Fund.
             206          (b) An appropriation from the Transportation Fund shall be made to the commission to
             207      cover expenses incurred in the administration and enforcement of this part and the collection of
             208      the motor fuel tax.
             209          (6) (a) The commission shall determine what amount of motor fuel tax revenue is
             210      received from the sale or use of motor fuel used in motorboats registered under the provisions
             211      of the State Boating Act, and this amount shall be deposited in a restricted revenue account in
             212      the General Fund of the state.
             213          (b) The funds from this account shall be used for the construction, improvement,



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     operation, and maintenance of state-owned boating facilities and for the payment of the costs
             215      and expenses of the Division of Parks and Recreation in administering and enforcing the State
             216      Boating Act.
             217          (7) (a) The United States government or any of its instrumentalities, this state, or a
             218      political subdivision of this state that has purchased motor fuel from a licensed distributor or
             219      from a retail dealer of motor fuel and has paid the tax on the motor fuel as provided in this
             220      section is entitled to a refund of the tax and may file with the commission for a quarterly
             221      refund.
             222          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             223      commission shall make rules governing the application and refund provided for in Subsection
             224      (7)(a).
             225          (8) (a) The commission shall refund annually into the Off-Highway Vehicle Account in
             226      the General Fund an amount equal to the lesser of the following:
             227          (i) .5% of the motor fuel tax revenues collected under this section; or
             228          (ii) $1,050,000.
             229          (b) This amount shall be used as provided in Section 41-22-19 .
             230          (9) (a) Beginning on April 1, 2001, a tax imposed under this section on motor fuel that
             231      is sold, used, or received for sale or use in this state is reduced to the extent provided in
             232      Subsection (9)(b) if:
             233          (i) a tax imposed on the basis of the sale, use, or receipt for sale or use of the motor
             234      fuel is paid to the Navajo Nation;
             235          (ii) the tax described in Subsection (9)(a)(i) is imposed without regard to whether or
             236      not the person required to pay the tax is an enrolled member of the Navajo Nation; and
             237          (iii) the commission and the Navajo Nation execute and maintain an agreement as
             238      provided in this Subsection (9) for the administration of the reduction of tax.
             239          (b) (i) If but for Subsection (9)(a) the motor fuel is subject to a tax imposed by this
             240      section:
             241          (A) the state shall be paid the difference described in Subsection (9)(b)(ii) if that
             242      difference is greater than $0; and
             243          (B) a person may not require the state to provide a refund, a credit, or similar tax relief
             244      if the difference described in Subsection (9)(b)(ii) is less than or equal to $0.



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         (ii) The difference described in Subsection (9)(b)(i) is equal to the difference between:
             246          (A) the amount of tax imposed on the motor fuel by this section; less
             247          (B) the tax imposed and collected by the Navajo Nation on the motor fuel.
             248          (c) For purposes of Subsections (9)(a) and (b), the tax paid to the Navajo Nation under
             249      a tax imposed by the Navajo Nation on the basis of the sale, use, or receipt for sale or use of
             250      motor fuel does not include any interest or penalties a taxpayer may be required to pay to the
             251      Navajo Nation.
             252          (d) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             253      commission shall make rules governing the procedures for administering the reduction of tax
             254      provided under this Subsection (9).
             255          (e) The agreement required under Subsection (9)(a):
             256          (i) may not:
             257          (A) authorize the state to impose a tax in addition to a tax imposed under this chapter;
             258          (B) provide a reduction of taxes greater than or different from the reduction described
             259      in this Subsection (9); or
             260          (C) affect the power of the state to establish rates of taxation;
             261          (ii) shall:
             262          (A) be in writing;
             263          (B) be signed by:
             264          (I) the chair of the commission or the chair's designee; and
             265          (II) a person designated by the Navajo Nation that may bind the Navajo Nation;
             266          (C) be conditioned on obtaining any approval required by federal law;
             267          (D) state the effective date of the agreement; and
             268          (E) state any accommodation the Navajo Nation makes related to the construction and
             269      maintenance of state highways and other infrastructure within the Utah portion of the Navajo
             270      Nation; and
             271          (iii) may:
             272          (A) notwithstanding Section 59-1-403 , authorize the commission to disclose to the
             273      Navajo Nation information that is:
             274          (I) contained in a document filed with the commission; and
             275          (II) related to the tax imposed under this section;



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         (B) provide for maintaining records by the commission or the Navajo Nation; or
             277          (C) provide for inspections or audits of distributors, carriers, or retailers located or
             278      doing business within the Utah portion of the Navajo Nation.
             279          (f) (i) If, on or after April 1, 2001, the Navajo Nation changes the tax rate of a tax
             280      imposed on motor fuel, any change in the reduction of taxes under this Subsection (9) as a
             281      result of the change in the tax rate is not effective until the first day of the calendar quarter after
             282      a 60-day period beginning on the date the commission receives notice:
             283          (A) from the Navajo Nation; and
             284          (B) meeting the requirements of Subsection (9)(f)(ii).
             285          (ii) The notice described in Subsection (9)(f)(i) shall state:
             286          (A) that the Navajo Nation has changed or will change the tax rate of a tax imposed on
             287      motor fuel;
             288          (B) the effective date of the rate change of the tax described in Subsection (9)(f)(ii)(A);
             289      and
             290          (C) the new rate of the tax described in Subsection (9)(f)(ii)(A).
             291          (g) If the agreement required by Subsection (9)(a) terminates, a reduction of tax is not
             292      permitted under this Subsection (9) beginning on the first day of the calendar quarter after a
             293      30-day period beginning on the day the agreement terminates.
             294          (h) If there is a conflict between this Subsection (9) and the agreement required by
             295      Subsection (9)(a), this Subsection (9) governs.
             296          Section 3. Section 59-13-301 is amended to read:
             297           59-13-301. Tax basis -- Rate -- Exemptions -- Revenue deposited with treasurer
             298      and credited to Transportation Fund -- Reduction of tax in limited circumstances.
             299          (1) (a) Except as provided in Subsections (2), (3), (11), and (12) and Section
             300      59-13-304 , a tax is imposed at the same [rate] rates imposed under [Subsection] Subsections
             301      59-13-201 (1)(a) and (b) on the:
             302          (i) removal of undyed diesel fuel from any refinery;
             303          (ii) removal of undyed diesel fuel from any terminal;
             304          (iii) entry into the state of any undyed diesel fuel for consumption, use, sale, or
             305      warehousing;
             306          (iv) sale of undyed diesel fuel to any person who is not registered as a supplier under



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     this part unless the tax has been collected under this section;
             308          (v) any untaxed special fuel blended with undyed diesel fuel; or
             309          (vi) use of untaxed special fuel other than propane or electricity.
             310          (b) The tax imposed under this section shall only be imposed once upon any special
             311      fuel.
             312          (2) (a) No special fuel tax is imposed or collected upon dyed diesel fuel which:
             313          (i) is sold or used for any purpose other than to operate or propel a motor vehicle upon
             314      the public highways of the state, but this exemption applies only in those cases where the
             315      purchasers or the users of special fuel establish to the satisfaction of the commission that the
             316      special fuel was used for purposes other than to operate a motor vehicle upon the public
             317      highways of the state; or
             318          (ii) is sold to this state or any of its political subdivisions.
             319          (b) No special fuel tax is imposed on undyed diesel fuel or clean fuel that is:
             320          (i) sold to the United States government or any of its instrumentalities or to this state or
             321      any of its political subdivisions;
             322          (ii) exported from this state if proof of actual exportation on forms prescribed by the
             323      commission is made within 180 days after exportation;
             324          (iii) used in a vehicle off-highway;
             325          (iv) used to operate a power take-off unit of a vehicle;
             326          (v) used for off-highway agricultural uses;
             327          (vi) used in a separately fueled engine on a vehicle that does not propel the vehicle
             328      upon the highways of the state; or
             329          (vii) used in machinery and equipment not registered and not required to be registered
             330      for highway use.
             331          (3) No tax is imposed or collected on special fuel if it is:
             332          (a) (i) purchased for business use in machinery and equipment not registered and not
             333      required to be registered for highway use; and
             334          (ii) used pursuant to the conditions of a state implementation plan approved under Title
             335      19, Chapter 2, Air Conservation Act; or
             336          (b) propane or electricity.
             337          (4) Upon request of a buyer meeting the requirements under Subsection (3), the



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             338
     Division of Air Quality shall issue an exemption certificate that may be shown to a seller.
             339          (5) The special fuel tax shall be paid by the supplier.
             340          (6) (a) The special fuel tax shall be paid by every user who is required by Sections
             341      59-13-303 and 59-13-305 to obtain a special fuel user permit and file special fuel tax reports.
             342          (b) The user shall receive a refundable credit for special fuel taxes paid on purchases
             343      which are delivered into vehicles and for which special fuel tax liability is reported.
             344          (7) (a) Except as provided under Subsections (7)(b) and (c), all revenue received by the
             345      commission from taxes and license fees under this part shall be deposited daily with the state
             346      treasurer and credited to the Transportation Fund.
             347          (b) An appropriation from the Transportation Fund shall be made to the commission to
             348      cover expenses incurred in the administration and enforcement of this part and the collection of
             349      the special fuel tax.
             350          (c) Five dollars of each special fuel user trip permit fee paid under Section 59-13-303
             351      may be used by the commission as a dedicated credit to cover the costs of electronic
             352      credentialing as provided in Section 41-1a-303 .
             353          (8) The commission may either collect no tax on special fuel exported from the state
             354      or, upon application, refund the tax paid.
             355          (9) (a) The United States government or any of its instrumentalities, this state, or a
             356      political subdivision of this state that has purchased special fuel from a supplier or from a retail
             357      dealer of special fuel and has paid the tax on the special fuel as provided in this section is
             358      entitled to a refund of the tax and may file with the commission for a quarterly refund in a
             359      manner prescribed by the commission.
             360          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             361      commission shall make rules governing the application and refund provided for in Subsection
             362      (9)(a).
             363          (10) (a) The purchaser shall pay the tax on diesel fuel or clean fuel purchased for uses
             364      under Subsections (2)(b)(i), (iii), (iv), (v), (vi), and (vii) and apply for a refund for the tax paid
             365      as provided in Subsection (9) and this Subsection (10).
             366          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             367      commission shall make rules governing the application and refund for off-highway and
             368      nonhighway uses provided under Subsections (2)(b)(iii), (iv), (vi), and (vii).



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             369
         (c) A refund of tax paid under this part on diesel fuel used for nonhighway agricultural
             370      uses shall be made in accordance with the tax return procedures under Section 59-13-202 .
             371          (11) (a) Beginning on April 1, 2001, a tax imposed under this section on special fuel is
             372      reduced to the extent provided in Subsection (11)(b) if:
             373          (i) the Navajo Nation imposes a tax on the special fuel;
             374          (ii) the tax described in Subsection (11)(a)(i) is imposed without regard to whether the
             375      person required to pay the tax is an enrolled member of the Navajo Nation; and
             376          (iii) the commission and the Navajo Nation execute and maintain an agreement as
             377      provided in this Subsection (11) for the administration of the reduction of tax.
             378          (b) (i) If but for Subsection (11)(a) the special fuel is subject to a tax imposed by this
             379      section:
             380          (A) the state shall be paid the difference described in Subsection (11)(b)(ii) if that
             381      difference is greater than $0; and
             382          (B) a person may not require the state to provide a refund, a credit, or similar tax relief
             383      if the difference described in Subsection (11)(b)(ii) is less than or equal to $0.
             384          (ii) The difference described in Subsection (11)(b)(i) is equal to the difference
             385      between:
             386          (A) the amount of tax imposed on the special fuel by this section; less
             387          (B) the tax imposed and collected by the Navajo Nation on the special fuel.
             388          (c) For purposes of Subsections (11)(a) and (b), the tax paid to the Navajo Nation on
             389      the special fuel does not include any interest or penalties a taxpayer may be required to pay to
             390      the Navajo Nation.
             391          (d) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             392      commission shall make rules governing the procedures for administering the reduction of tax
             393      provided under this Subsection (11).
             394          (e) The agreement required under Subsection (11)(a):
             395          (i) may not:
             396          (A) authorize the state to impose a tax in addition to a tax imposed under this chapter;
             397          (B) provide a reduction of taxes greater than or different from the reduction described
             398      in this Subsection (11); or
             399          (C) affect the power of the state to establish rates of taxation;



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             400
         (ii) shall:
             401          (A) be in writing;
             402          (B) be signed by:
             403          (I) the chair of the commission or the chair's designee; and
             404          (II) a person designated by the Navajo Nation that may bind the Navajo Nation;
             405          (C) be conditioned on obtaining any approval required by federal law;
             406          (D) state the effective date of the agreement; and
             407          (E) state any accommodation the Navajo Nation makes related to the construction and
             408      maintenance of state highways and other infrastructure within the Utah portion of the Navajo
             409      Nation; and
             410          (iii) may:
             411          (A) notwithstanding Section 59-1-403 , authorize the commission to disclose to the
             412      Navajo Nation information that is:
             413          (I) contained in a document filed with the commission; and
             414          (II) related to the tax imposed under this section;
             415          (B) provide for maintaining records by the commission or the Navajo Nation; or
             416          (C) provide for inspections or audits of suppliers, distributors, carriers, or retailers
             417      located or doing business within the Utah portion of the Navajo Nation.
             418          (f) (i) If, on or after April 1, 2001, the Navajo Nation changes the tax rate of a tax
             419      imposed on special fuel, any change in the amount of the reduction of taxes under this
             420      Subsection (11) as a result of the change in the tax rate is not effective until the first day of the
             421      calendar quarter after a 60-day period beginning on the date the commission receives notice:
             422          (A) from the Navajo Nation; and
             423          (B) meeting the requirements of Subsection (11)(f)(ii).
             424          (ii) The notice described in Subsection (11)(f)(i) shall state:
             425          (A) that the Navajo Nation has changed or will change the tax rate of a tax imposed on
             426      special fuel;
             427          (B) the effective date of the rate change of the tax described in Subsection
             428      (11)(f)(ii)(A); and
             429          (C) the new rate of the tax described in Subsection (11)(f)(ii)(A).
             430          (g) If the agreement required by Subsection (11)(a) terminates, a reduction of tax is not



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             431
     permitted under this Subsection (11) beginning on the first day of the calendar quarter after a
             432      30-day period beginning on the day the agreement terminates.
             433          (h) If there is a conflict between this Subsection (11) and the agreement required by
             434      Subsection (11)(a), this Subsection (11) governs.
             435          (12) (a) Beginning on January 1, 2009, a tax imposed under this section on compressed
             436      natural gas is imposed at a reduced rate of 8-1/2 cents per gasoline gallon equivalent to be
             437      increased [or decreased] proportionately with any increase [or decrease] in the rate in
             438      Subsection 59-13-201 (1)(a).
             439          (b) Beginning on July 1, 2011, a tax imposed under this section on liquified natural gas
             440      is imposed at a reduced rate of 8-1/2 cents per gasoline gallon equivalent to be increased [or
             441      decreased] proportionately with any increase [or decrease] in the rate in Subsection
             442      59-13-201(1)(a).
             443          Section 4. Effective date.
             444          This bill takes effect on January 1, 2015.





Legislative Review Note
    as of 2-7-14 2:46 PM


Office of Legislative Research and General Counsel


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