Representative Stephen G. Handy proposes the following substitute bill:


1     
MUNICIPAL ENERGY TAX RATE AMENDMENTS

2     
2016 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Stephen G. Handy

5     
Senate Sponsor: ____________

6     

7     LONG TITLE
8     General Description:
9          This bill amends the municipal energy sales and use tax rates.
10     Highlighted Provisions:
11          This bill:
12          ▸     adds definitions;
13          ▸     amends the municipal energy sales and use tax rates; and
14          ▸     makes technical and conforming changes.
15     Money Appropriated in this Bill:
16          None
17     Other Special Clauses:
18          None
19     Utah Code Sections Affected:
20     AMENDS:
21          10-1-203, as last amended by Laws of Utah 2014, Chapter 189
22          10-1-304, as last amended by Laws of Utah 2012, Chapter 410
23          10-1-305, as last amended by Laws of Utah 1998, Chapter 180
24          10-1-307, as last amended by Laws of Utah 2011, Chapter 309
25          63H-1-204, as enacted by Laws of Utah 2013, Chapter 362
26     

27     Be it enacted by the Legislature of the state of Utah:
28          Section 1. Section 10-1-203 is amended to read:
29          10-1-203. License fees and taxes -- Application information to be transmitted to
30     the county assessor.
31          (1) As used in this section:
32          (a) "Business" means any enterprise carried on for the purpose of gain or economic
33     profit, except that the acts of employees rendering services to employers are not included in
34     this definition.
35          (b) "Telecommunications provider" is as defined in Section 10-1-402.
36          (c) "Telecommunications tax or fee" is as defined in Section 10-1-402.
37          (2) Except as provided in Subsections (3) through (5), the legislative body of a
38     municipality may license for the purpose of regulation and revenue any business within the
39     limits of the municipality and may regulate that business by ordinance.
40          (3) (a) The legislative body of a municipality may raise revenue by levying and
41     collecting a municipal energy sales or use tax as provided in Part 3, Municipal Energy Sales
42     and Use Tax Act, except a municipality may not levy or collect a franchise tax or fee on an
43     energy supplier other than the municipal energy sales and use tax provided in Part 3, Municipal
44     Energy Sales and Use Tax Act.
45          (b) (i) Subsection (3)(a) does not affect the validity of a franchise agreement as defined
46     in Subsection 10-1-303(6), that is in effect on July 1, 1997, or a future franchise.
47          (ii) A franchise agreement as defined in Subsection 10-1-303(6) in effect on January 1,
48     1997, or a future franchise shall remain in full force and effect.
49          (c) A municipality that collects a contractual franchise fee pursuant to a franchise
50     agreement as defined in Subsection 10-1-303(6) with an energy supplier that is in effect on July
51     1, 1997, may continue to collect that fee as provided in Subsection 10-1-310(2).
52          (d) (i) Subject to the requirements of Subsection (3)(d)(ii), a franchise agreement as
53     defined in Subsection 10-1-303(6) between a municipality and an energy supplier may contain
54     a provision that:
55          (A) requires the energy supplier by agreement to pay a contractual franchise fee that is
56     otherwise prohibited under Part 3, Municipal Energy Sales and Use Tax Act; and
57          (B) imposes the contractual franchise fee on or after the day on which Part 3,
58     Municipal Energy Sales and Use Tax Act is:
59          (I) repealed, invalidated, or the [maximum allowable rate] rates provided in Section
60     10-1-305 [is] are reduced; and
61          (II) is not superseded by a law imposing a substantially equivalent tax.
62          (ii) A municipality may not charge a contractual franchise fee under the provisions
63     permitted by Subsection (3)(b)(i) unless the municipality charges an equal contractual franchise
64     fee or a tax on all energy suppliers.
65          (4) (a) Subject to Subsection (4)(b), beginning July 1, 2004, the legislative body of a
66     municipality may raise revenue by levying and providing for the collection of a municipal
67     telecommunications license tax as provided in Part 4, Municipal Telecommunications License
68     Tax Act.
69          (b) A municipality may not levy or collect a telecommunications tax or fee on a
70     telecommunications provider except as provided in Part 4, Municipal Telecommunications
71     License Tax Act.
72          (5) (a) (i) The legislative body of a municipality may by ordinance raise revenue by
73     levying and collecting a license fee or tax on:
74          (A) a parking service business in an amount that is less than or equal to:
75          (I) $1 per vehicle that parks at the parking service business; or
76          (II) 2% of the gross receipts of the parking service business;
77          (B) a public assembly or other related facility in an amount that is less than or equal to
78     $5 per ticket purchased from the public assembly or other related facility; and
79          (C) subject to the limitations of Subsections (5)(c) and (d):
80          (I) a business that causes disproportionate costs of municipal services; or
81          (II) a purchaser from a business for which the municipality provides an enhanced level
82     of municipal services.
83          (ii) Nothing in this Subsection (5)(a) may be construed to authorize a municipality to
84     levy or collect a license fee or tax on a public assembly or other related facility owned and
85     operated by another political subdivision other than a community development and renewal
86     agency without the written consent of the other political subdivision.
87          (b) As used in this Subsection (5):
88          (i) "Municipal services" includes:
89          (A) public utilities; and
90          (B) services for:
91          (I) police;
92          (II) fire;
93          (III) storm water runoff;
94          (IV) traffic control;
95          (V) parking;
96          (VI) transportation;
97          (VII) beautification; or
98          (VIII) snow removal.
99          (ii) "Parking service business" means a business:
100          (A) that primarily provides off-street parking services for a public facility that is
101     wholly or partially funded by public money;
102          (B) that provides parking for one or more vehicles; and
103          (C) that charges a fee for parking.
104          (iii) "Public assembly or other related facility" means an assembly facility that:
105          (A) is wholly or partially funded by public money;
106          (B) is operated by a business; and
107          (C) requires a person attending an event at the assembly facility to purchase a ticket.
108          (c) (i) Before the legislative body of a municipality imposes a license fee on a business
109     that causes disproportionate costs of municipal services under Subsection (5)(a)(i)(C)(I), the
110     legislative body of the municipality shall adopt an ordinance defining for purposes of the tax
111     under Subsection (5)(a)(i)(C)(I):
112          (A) the costs that constitute disproportionate costs; and
113          (B) the amounts that are reasonably related to the costs of the municipal services
114     provided by the municipality.
115          (ii) The amount of a fee under Subsection (5)(a)(i)(C)(I) shall be reasonably related to
116     the costs of the municipal services provided by the municipality.
117          (d) (i) Before the legislative body of a municipality imposes a license fee on a
118     purchaser from a business for which it provides an enhanced level of municipal services under
119     Subsection (5)(a)(i)(C)(II), the legislative body of the municipality shall adopt an ordinance
120     defining for purposes of the fee under Subsection (5)(a)(i)(C)(II):
121          (A) the level of municipal services that constitutes the basic level of municipal services
122     in the municipality; and
123          (B) the amounts that are reasonably related to the costs of providing an enhanced level
124     of municipal services in the municipality.
125          (ii) The amount of a fee under Subsection (5)(a)(i)(C)(II) shall be reasonably related to
126     the costs of providing an enhanced level of the municipal services.
127          (6) All license fees and taxes shall be uniform in respect to the class upon which they
128     are imposed.
129          (7) The municipality shall transmit the information from each approved business
130     license application to the county assessor within 60 days following the approval of the
131     application.
132          (8) If challenged in court, an ordinance enacted by a municipality before January 1,
133     1994, imposing a business license fee on rental dwellings under this section shall be upheld
134     unless the business license fee is found to impose an unreasonable burden on the fee payer.
135          Section 2. Section 10-1-304 is amended to read:
136          10-1-304. Municipality and military installation development authority may levy
137     tax -- Rate -- Imposition or repeal of tax -- Tax rate change -- Effective date -- Notice
138     requirements -- Exemptions.
139          (1) As used in this section:
140          (a) "Annexation" means an annexation to a municipality under Chapter 2, Part 4,
141     Annexation.
142          (b) "Annexing area" means an area that is annexed into a municipality.
143          (c) "Consumer price index" means the Consumer Price Index for All Urban Consumers
144     as published by the Bureau of Labor Statistics of the United States Department of Labor.
145          (d) "Large user rate" means a rate described in Subsection (3)(a)(ii), (iii), or (iv).
146          (e) "Single point of delivery" means the point at which a utility's transmission facilities
147     are connected to a wire or apparatus owned by an end-use customer to enable that customer to
148     receive electrical service from the utility.
149          (f) "Single site" means properties or facilities:
150          (i) that use natural gas delivered through one or more gas meters located on contiguous
151     property within a single municipality; and
152          (ii) owned, leased, or operated by a single customer or the customer's affiliates or
153     tenants.
154          (g) "Transportation tariff" means a schedule or tariff that applies when a utility delivers
155     natural gas owned by a taxpayer, or purchased by a taxpayer on the open market, to the
156     taxpayer's facility for consumption.
157          [(1)] (2) (a) Except as provided in Subsections [(4) and (5)] (6) and (7), a municipality
158     may levy a municipal energy sales and use tax on the sale or use of taxable energy within the
159     municipality:
160          (i) by ordinance as provided in Section 10-1-305; and
161          (ii) of up to [6% of the delivered value of the taxable energy] the rate established in
162     Subsection (3).
163          (b) Subject to Section 63H-1-203, the military installation development authority
164     created in Section 63H-1-201 may levy a municipal energy sales and use tax under this part
165     within a project area described in a project area plan adopted by the authority under Title 63H,
166     Chapter 1, Military Installation Development Authority Act, as though the authority were a
167     municipality.
168          (3) (a) Except as provided in Subsection (3)(c), the tax imposed under Subsection (2)
169     may not exceed the following rates:
170          (i) (A) before the first day of the first billing period that begins on or after January 1,
171     2017, 6% of the delivered value of taxable energy for a taxpayer; and
172          (B) on or after the first day of the first billing period that begins on or after January 1,
173     2017, 6% of the delivered value of taxable energy for a taxpayer other than a taxpayer
174     described in Subsection (3)(a)(ii), (iii), or (iv);
175          (ii) beginning on the first day of the first billing period that begins on or after January
176     1, 2017, $0.2111 per MMBtu of natural gas consumed within the municipality by a taxpayer
177     that is annually determined on January 1 to have consumed an average of 500 or more MMBtu
178     of natural gas per month at any single site within the municipality during the previous calendar
179     year, if the taxpayer received more than half of the natural gas consumed under a transportation
180     tariff; or
181          (iii) beginning on the first day of the first billing period that begins on or after January
182     1, 2017, $0.0037 per kWh of electricity consumed within the municipality by a taxpayer that is
183     annually determined on January 1 to have received electric service at a voltage level of 42,000
184     or more volts at any single point of delivery within the municipality during the previous
185     calendar year; or
186          (iv) beginning on the first day of the first billing period that begins on or after January
187     1, 2017, $0.0045 per kWh of electricity consumed within the municipality by a taxpayer that is:
188          (A) not a taxpayer described in Subsection (3)(a)(iii); and
189          (B) annually determined on January 1 to have registered a peak load of 1,000 kWh or
190     more at any single point of delivery within the municipality more than once in the preceding 18
191     months.
192          (b) Beginning on the first day of the first billing period that begins on or after January
193     1, 2017, unless the municipality enacts or repeals a tax or changes the rate of a tax imposed
194     under this part, the rate of the municipal energy sales and use tax imposed on the sale or use of
195     taxable energy shall be as follows:
196          (i) for a taxpayer other than a taxpayer described in Subsection (3)(a)(ii), (iii), or (iv),
197     the rate imposed by the municipality on December 31, 2016; and
198          (ii) for a taxpayer described in Subsection (3)(a)(ii), (iii), or (iv), a rate calculated by:
199          (A) dividing the rate imposed by the municipality on December 31, 2016, by 6%; and
200          (B) multiplying the figure calculated in Subsection (3)(b)(ii)(A) by the applicable
201     maximum large user rate described in Subsection (3)(a)(ii), (iii), or (iv).
202          (c) (i) On March 1 of each calendar year, the commission shall adjust the maximum
203     large user rates described in Subsections (3)(a)(ii), (iii), and (iv) by adding to the rates the
204     lesser of:
205          (A) the amount calculated by multiplying the maximum large user rate for the previous
206     year by the percentage change during the previous calendar year in the consumer price index;
207     or
208          (B) the amount calculated by multiplying the maximum large user rate for the previous
209     year by 2%.
210          (ii) The large user rate as adjusted by Subsection (3)(c)(i) may not exceed 110% of the
211     maximum large user rate specified in Subsection (3)(a)(ii), (iii), or (iv) before an adjustment
212     under this Subsection (3)(c).
213          [(2)] (4) A municipal energy sales and use tax imposed under this part may be in
214     addition to any sales and use tax imposed by the municipality under Title 59, Chapter 12, Sales
215     and Use Tax Act.
216          [(3) (a) For purposes of this Subsection (3):]
217          [(i) "Annexation" means an annexation to a municipality under Chapter 2, Part 4,
218     Annexation.]
219          [(ii) "Annexing area" means an area that is annexed into a municipality.]
220          [(b)] (5) (a) (i) If, on or after May 1, 2000, a [city or town] municipality enacts or
221     repeals a tax or changes the rate of a tax under this part, the enactment, repeal, or change shall
222     take effect[: (A)] on the first day of a calendar quarter[; and (B)] that begins after a 90-day
223     period beginning on the date the commission receives notice meeting the requirements of
224     Subsection [(3)(b)] (5)(a)(ii) [from the municipality].
225          (ii) The notice described in Subsection [(3)(b)] (5)(a)(i)[(B)] shall state:
226          (A) that the [city or town] municipality will enact or repeal a tax or change the rate of a
227     tax under this part;
228          (B) the statutory authority for the tax described in Subsection [(3)(b)] (5)(a)(ii)(A);
229          (C) the effective date of the tax described in Subsection [(3)(b)] (5)(a)(ii)(A); and
230          (D) if [the city or town] a municipality enacts the tax or changes the rate of the tax
231     described in Subsection [(3)(b)] (5)(a)(ii)(A), the new rate of the tax.
232          [(c)] (b) (i) If, for an annexation that occurs on or after May 1, 2000, the annexation
233     will result in a change in the rate of a tax under this part for an annexing area, the change shall
234     take effect[: (A)] on the first day of a calendar quarter[; and (B)] that begins after a 90-day
235     period beginning on the date the commission receives notice meeting the requirements of
236     Subsection [(3)(c)] (5)(b)(ii) from the municipality that annexes the annexing area.
237          (ii) The notice described in Subsection [(3)(c)] (5)(b)(i)[(B)] shall state:
238          (A) that the annexation described in Subsection [(3)(c)] (5)(b)(i) will result in a change
239     in the rate of a tax under this part for the annexing area;
240          (B) the statutory authority for the tax described in Subsection [(3)(c)] (5)(b)(ii)(A);
241          (C) the effective date of the tax described in Subsection [(3)(c)] (5)(b)(ii)(A); and
242          (D) the new rate of the tax described in Subsection [(3)(c)] (5)(b)(ii)(A).
243          [(4)] (6) (a) Subject to Subsection [(4)] (6)(b), a sale or use of electricity within a
244     municipality is exempt from the tax authorized by this section if the sale or use is made under a
245     tariff adopted by the Public Service Commission of Utah only for purchase of electricity
246     produced from a new source of alternative energy, as defined in Section 59-12-102, as
247     designated in the tariff by the Public Service Commission of Utah.
248          (b) The exemption under Subsection [(4)] (6)(a) applies to the portion of the tariff rate
249     a customer pays under the tariff described in Subsection [(4)] (6)(a) that exceeds the tariff rate
250     under the tariff described in Subsection [(4)] (6)(a) that the customer would have paid absent
251     the tariff.
252          [(5)] (7) (a) A municipality may not levy a municipal energy sales and use tax within
253     any portion of the municipality that is within a project area described in a project area plan
254     adopted by the military installation development authority under Title 63H, Chapter 1, Military
255     Installation Development Authority Act.
256          (b) Subsection [(5)] (7)(a) does not apply to the military installation development
257     authority's levy of a municipal energy sales and use tax.
258          (8) (a) On or before the November 2021 interim meeting, the Revenue and Taxation
259     Interim Committee shall:
260          (i) study the tax rates imposed by this section;
261          (ii) receive a report from the commission on any enactment, repeal, or change in rate
262     for which a municipality provided a notice;
263          (iii) recommend whether legislation should be drafted to modify any provision of this
264     section; and
265          (iv) prepare any legislation that the Revenue and Taxation Interim Committee
266     recommends in accordance with Subsection (8)(a)(iii).
267          (b) The Revenue and Taxation Interim Committee shall complete the study described
268     in Subsection (8)(a) at least every five years.
269          Section 3. Section 10-1-305 is amended to read:
270          10-1-305. Municipal energy sales and use tax ordinance provisions.
271          Each municipal energy sales and use tax ordinance [under] described in Subsection
272     10-1-304[(1)](2) shall include:
273          (1) a provision imposing a tax on every sale or use of taxable energy made within a
274     municipality at a rate determined by the municipality that is up to [6% of the delivered value of
275     the taxable energy] the rates established in Section 10-1-304;
276          (2) provisions substantially the same as those required by Title 59, Chapter 12, Part 1,
277     Tax Collection, as they relate to sales and use tax, except that:
278          (a) in accordance with Section 10-1-304, the tax shall be calculated on the consumer's
279     delivered value or consumption of the taxable energy [to the consumer];
280          (b) an exemption is not allowed from a tax imposed under this part for the sale or use
281     of taxable energy that is exempt from the state sales and use tax under Title 59, Chapter 12,
282     Part 1, Tax Collection, except that the municipality shall include in its ordinance an exemption
283     for:
284          (i) the sales and use of aviation fuel, motor fuel, or special fuel subject to taxation
285     under Title 59, Chapter 13, Motor and Special Fuel Tax Act;
286          (ii) the sales and use of taxable energy that the municipality is prohibited from taxing
287     under federal law or the Constitution of the United States or the Utah Constitution;
288          (iii) the sales and use of taxable energy purchased or stored in the state for resale;
289          (iv) the sales or use of taxable energy to a person if the primary use is for use in
290     compounding or producing taxable energy or a fuel subject to taxation under Title 59, Chapter
291     13, Motor and Special Fuel Tax Act;
292          (v) taxable energy brought into the state by a nonresident for the nonresident's own
293     personal use or enjoyment while within the state, except taxable energy purchased for use in
294     the state by a nonresident living or working in the state at the time of purchase;
295          (vi) the sales or use of taxable energy for any purpose other than use as a fuel or
296     energy; and
297          (vii) the sale of taxable energy for use outside a municipality imposing a municipality
298     energy sales and use tax;
299          (c) the ordinance may provide for an exemption from the municipal energy sales and
300     use tax under this part for customers who, as of July 1, 1997, were being supplied electrical
301     energy by a supplier other than the municipality if:
302          (i) the municipality is a generator of electrical energy for customers within its borders;
303     and
304          (ii) the municipality is unable to generate electrical energy for the customer;
305          (d) the name of the municipality as the taxing agency shall be substituted for that of the
306     state when necessary for purposes of this part; and
307          (e) an additional license to collect the tax is not required if one has been issued under
308     Section 59-12-106;
309          (3) a provision that, on or before the effective date of the ordinance, the municipality
310     shall enter into a contract with the commission to have the commission perform all functions
311     related to the administration or operation of the ordinance, except that a municipality may
312     collect the municipal energy sales and use tax directly as provided in Subsection 10-1-307(3);
313          (4) a provision that:
314          (a) except as provided under Subsection (4)(b), the sale, storage, use, or other
315     consumption of taxable energy is exempt from the tax due under the ordinance if [the delivered
316     value of] the taxable energy has been subject to a municipal energy sales or use tax under an
317     ordinance enacted in accordance with this part by another municipality in this state; and
318          (b) the municipality shall be paid the difference between the tax paid to another
319     municipality as described in this section and the tax that would otherwise be due under the
320     ordinance if the tax due under the ordinance exceeds the tax paid to another municipality; and
321          (5) a provision providing a credit against the tax in the amount of a contractual
322     franchise fee paid if:
323          (a) an energy supplier pays a contractual franchise fee to a municipality pursuant to a
324     franchise agreement in effect on July 1, 1997;
325          (b) the contractual franchise fee is passed through by the energy supplier to a taxpayer
326     as a separately itemized charge; and
327          (c) the energy supplier has accepted the franchise; and
328          (6) a provision providing that the ordinance adopts by reference any amendments to the
329     provisions of Title 59, Chapter 12, Part 1, Tax Collection, that relate to levying or collecting a
330     municipal energy sales and use tax.
331          Section 4. Section 10-1-307 is amended to read:
332          10-1-307. Administration, collection, and enforcement of taxes by commission --
333     Distribution of revenues -- Administrative charge -- Collection of taxes by municipality.
334          (1) (a) Subject to Subsection (1)(b) and except as provided in Subsection (3), the
335     commission shall administer, collect, and enforce the municipal energy sales and use tax from
336     energy suppliers according to the procedures established in:
337          (i) Title 59, Chapter 1, General Taxation Policies; and
338          (ii) Title 59, Chapter 12, Part 1, Tax Collection, except for Sections 59-12-107.1 and
339     59-12-123.
340          (b) If an energy supplier pays a municipal energy sales and use tax to the commission,
341     the energy supplier shall pay the municipal energy sales and use tax to the commission:
342          (i) monthly on or before the last day of the month immediately following the last day of
343     the previous month if:
344          (A) the energy supplier is required to file a sales and use tax return with the
345     commission monthly under Section 59-12-108; or
346          (B) the energy supplier is not required to file a sales and use tax return under Title 59,
347     Chapter 12, Sales and Use Tax Act; or
348          (ii) quarterly on or before the last day of the month immediately following the last day
349     of the previous quarter if the energy supplier is required to file a sales and use tax return with
350     the commission quarterly under Section 59-12-108.
351          (2) (a) Except as provided in Subsections 10-1-203(3)(d), 10-1-305(5), and
352     10-1-310(2) [and subject to Subsection (6)], the commission shall pay a municipality the
353     difference between:
354          (i) the entire amount collected by the commission from the municipal energy sales and
355     use tax authorized by this part based on:
356          (A) the point of sale of the taxable energy if a taxable sale occurs in a municipality that
357     imposes a municipal energy sales and use tax as provided in this part; or
358          (B) the point of use of the taxable energy if the use occurs in a municipality that
359     imposes a municipal energy sales and use tax as provided in this part; and
360          (ii) the administrative charge described in Subsection (2)(c).
361          (b) In accordance with Subsection (2)(a), the commission shall transfer to the
362     municipality monthly by electronic transfer the revenues generated by the municipal energy
363     sales and use tax levied by the municipality and collected by the commission.
364          (c) (i) Subject to Subsection (2)(c)(ii), the commission shall retain and deposit an
365     administrative charge in accordance with Section 59-1-306 from revenues the commission
366     collects from a municipal energy sales and use tax under this part.
367          (ii) The commission may not retain or deposit an administrative charge from revenues
368     a municipality collects under Subsection (3) from a tax under this part.
369          (3) An energy supplier shall pay the municipal energy sales and use tax revenues it
370     collects from its customers under this part directly to each municipality in which the energy
371     supplier has sales of taxable energy if:
372          (a) the municipality is the energy supplier; or
373          (b) (i) the energy supplier estimates that the municipal energy sales and use tax
374     collected annually by the energy supplier from its Utah customers equals $1,000,000 or more;
375     and
376          (ii) the energy supplier collects the tax imposed by this part.
377          (4) An energy supplier paying a tax under this part directly to a municipality may retain
378     the percentage of the tax authorized under Subsection 59-12-108(2) for the energy supplier's
379     costs of collecting and remitting the tax.
380          (5) An energy supplier paying the tax under this part directly to a municipality shall file
381     an information return with the commission, at least annually, on a form prescribed by the
382     commission.
383          [(6) (a) As used in this Subsection (6):]
384          [(i) "2005 base amount" means, for a municipality that imposes a municipal energy
385     sales and use tax, the natural gas portion of municipal energy sales and use tax proceeds paid to
386     the municipality for fiscal year 2005.]
387          [(ii) "2006 base amount" means, for a municipality that imposes a municipal energy
388     sales and use tax, the natural gas portion of municipal energy sales and use tax proceeds paid to
389     the municipality for fiscal year 2006, reduced by the 2006 rebate amount.]
390          [(iii) "2006 rebate amount" means, for a municipality that imposes a municipal energy
391     sales and use tax, the difference between:]
392          [(A) the natural gas portion of municipal energy sales and use tax proceeds paid to the
393     municipality for fiscal year 2006; and]
394          [(B) the 2005 base amount, plus:]
395          [(I) 10% of the 2005 base amount; and]
396          [(II) the natural gas portion of municipal energy sales and use tax proceeds paid to the
397     municipality for fiscal year 2006 attributable to an increase in the rate of the municipal energy
398     sales and use tax implemented by the municipality during fiscal year 2006.]
399          [(iv) "2007 rebate amount" means, for a municipality that imposes a municipal energy
400     sales and use tax, the difference between:]
401          [(A) the natural gas portion of municipal energy sales and use tax proceeds paid to the
402     municipality for fiscal year 2007; and]
403          [(B) the 2006 base amount, plus:]
404          [(I) 10% of the 2006 base amount; and]
405          [(II) the natural gas portion of municipal energy sales and use tax proceeds paid to the
406     municipality for fiscal year 2007 attributable to an increase in the rate of the municipal energy
407     sales and use tax implemented by the municipality during fiscal year 2007.]
408          [(v) "Fiscal year 2005" means the period beginning July 1, 2004 and ending June 30,
409     2005.]
410          [(vi) "Fiscal year 2006" means the period beginning July 1, 2005 and ending June 30,
411     2006.]
412          [(vii) "Fiscal year 2007" means the period beginning July 1, 2006 and ending June 30,
413     2007.]
414          [(viii) "Gas supplier" means an energy supplier that supplies natural gas.]
415          [(ix) "Natural gas portion" means the amount of municipal energy sales and use tax
416     proceeds attributable to sales and uses of natural gas.]
417          [(b) (i) In December 2006, each gas supplier shall reduce the natural gas portion of
418     municipal energy sales and use gas proceeds to be paid to a municipality by the 2006 rebate
419     amount.]
420          [(ii) If the 2006 rebate amount exceeds the amount of the natural gas portion of
421     municipal energy sales and use tax proceeds for December 2006, the gas supplier shall reduce
422     the natural gas portion of municipal energy sales and use tax proceeds to be paid to a
423     municipality each month thereafter until the 2006 rebate amount is exhausted.]
424          [(iii) For December 2006 and for each month thereafter that the gas supplier is required
425     under Subsection (6)(b)(ii) to reduce the natural gas portion of municipal energy sales and use
426     tax proceeds to be paid to a municipality:]
427          [(A) each municipality imposing a municipal energy sales and use tax shall provide the
428     gas supplier with the amount by which its municipal energy sales and use tax rate applicable to
429     the sales and uses of natural gas would need to be reduced in order to reduce the natural gas
430     portion of municipal energy sales and use tax proceeds by the same amount as the reduction to
431     the municipality; and]
432          [(B) each gas supplier shall reduce the municipal energy sales and use tax rate
433     applicable to sales and uses of natural gas by the amount of the tax rate reduction provided by
434     the municipality.]
435          [(c) (i) In December 2007, each gas supplier shall reduce the natural gas portion of
436     municipal energy sales and use tax proceeds to be paid to a municipality by the 2007 rebate
437     amount.]
438          [(ii) If the 2007 rebate amount exceeds the amount of the natural gas portion of
439     municipal energy sales and use tax proceeds for December 2007, the gas supplier shall reduce
440     the natural gas portion of municipal energy sales and use tax proceeds to be paid to a
441     municipality each month thereafter until the 2007 rebate amount is exhausted.]
442          [(iii) For December 2007 and for each month thereafter that the gas supplier is required
443     under Subsection (6)(c)(ii) to reduce the natural gas portion of municipal energy sales and use
444     tax proceeds to be paid to a municipality:]
445          [(A) each municipality imposing a municipal energy sales and use tax shall provide the
446     gas supplier with the amount by which its municipal energy sales and use tax rate applicable to
447     the sales and uses of natural gas would need to be reduced in order to reduce the natural gas
448     portion of municipal energy sales and use tax proceeds by the same amount as the reduction to
449     the municipality; and]
450          [(B) each gas supplier shall reduce the municipal energy sales and use tax rate
451     applicable to sales and uses of natural gas by the amount of the tax rate reduction provided by
452     the municipality.]
453          [(d) Nothing in this Subsection (6) may be construed to require a reduction under
454     Subsection (6)(b) or (c) if the rebate amount is zero or negative.]
455          Section 5. Section 63H-1-204 is amended to read:
456          63H-1-204. MIDA energy tax.
457          (1) By ordinance, an authority board may levy a MIDA energy tax, within a project
458     area, on an energy supplier as defined in Section 10-1-303.
459          (2) The maximum rate of the MIDA energy tax is 6% of the delivered value as defined
460     in Section 10-1-303, except that delivered value does not include the amount of a tax paid
461     under this section.
462          (3) (a) An energy supplier may recover an amount equal to the MIDA energy tax from
463     its customers, if the energy supplier includes the amount as a separate billing line item.
464          (b) The MIDA energy tax levied under this section is in addition to the rate approved
465     by the Public Service Commission and charged to the customer.
466          (4) If the authority has levied a municipal energy tax in the project area, the MIDA
467     energy tax paid by a customer is reduced by any municipal energy tax paid by that customer on
468     the same [delivered value] taxable energy.
469          (5) (a) The MIDA energy tax is payable by the energy supplier to MIDA on a monthly
470     basis as described by the ordinance levying the tax.
471          (b) The ordinance shall allow the energy supplier to retain 1% of the tax remittance
472     each month to offset the energy supplier's costs of collecting and remitting the tax.