11-13-302 - Payment of fee in lieu of ad valorem property tax by certain energy suppliers -- Method of calculating -- Collection -- Extent of tax lien.
11-13-302. Payment of fee in lieu of ad valorem property tax by certain energysuppliers -- Method of calculating -- Collection -- Extent of tax lien.
(1) (a) Each project entity created under this chapter that owns a project and that sells anycapacity, service, or other benefit from it to an energy supplier or suppliers whose tangibleproperty is not exempted by Utah Constitution Article XIII, Section 3, from the payment of advalorem property tax, shall pay an annual fee in lieu of ad valorem property tax as provided inthis section to each taxing jurisdiction within which the project or any part of it is located.
(b) For purposes of this section, "annual fee" means the annual fee described inSubsection (1)(a) that is in lieu of ad valorem property tax.
(c) The requirement to pay an annual fee shall commence:
(i) with respect to each taxing jurisdiction that is a candidate receiving the benefit ofimpact alleviation payments under contracts or determination orders provided for in Sections11-13-305 and 11-13-306, with the fiscal year of the candidate following the fiscal year of thecandidate in which the date of commercial operation of the last generating unit, other than anygenerating unit providing additional project capacity, of the project occurs, or, in the case of anyfacilities providing additional project capacity, with the fiscal year of the candidate following thefiscal year of the candidate in which the date of commercial operation of the generating unitproviding the additional project capacity occurs; and
(ii) with respect to any taxing jurisdiction other than a taxing jurisdiction described inSubsection (1)(c)(i), with the fiscal year of the taxing jurisdiction in which construction of theproject commences, or, in the case of facilities providing additional project capacity, with thefiscal year of the taxing jurisdiction in which construction of those facilities commences.
(d) The requirement to pay an annual fee shall continue for the period of the useful life ofthe project or facilities.
(2) (a) The annual fees due a school district shall be as provided in Subsection (2)(b)because the ad valorem property tax imposed by a school district and authorized by theLegislature under Section 53A-17a-135 represents both:
(i) a levy mandated by the state for the state minimum school program under Section53A-17a-135; and
(ii) local levies for capital outlay, maintenance, transportation, and other purposes underSections 11-2-7, 53A-16-107, 53A-16-110, 53A-17a-126, 53A-17a-127, 53A-17a-133,53A-17a-134, 53A-17a-143, and 53A-17a-145.
(b) The annual fees due a school district shall be as follows:
(i) the project entity shall pay to the school district an annual fee for the state minimumschool program at the rate imposed by the school district and authorized by the Legislature underSubsection 53A-17a-135(1); and
(ii) for all other local property tax levies authorized to be imposed by a school district,the project entity shall pay to the school district either:
(A) an annual fee; or
(B) impact alleviation payments under contracts or determination orders provided for inSections 11-13-305 and 11-13-306.
(3) (a) An annual fee due a taxing jurisdiction for a particular year shall be calculated bymultiplying the tax rate or rates of the jurisdiction for that year by the product obtained bymultiplying the fee base or value determined in accordance with Subsection (4) for that year ofthe portion of the project located within the jurisdiction by the percentage of the project which is
used to produce the capacity, service, or other benefit sold to the energy supplier or suppliers.
(b) As used in this section, "tax rate," when applied in respect to a school district,includes any assessment to be made by the school district under Subsection (2) or Section63M-5-302.
(c) There is to be credited against the annual fee due a taxing jurisdiction for each year,an amount equal to the debt service, if any, payable in that year by the project entity on bonds,the proceeds of which were used to provide public facilities and services for impact alleviation inthe taxing jurisdiction in accordance with Sections 11-13-305 and 11-13-306.
(d) The tax rate for the taxing jurisdiction for that year shall be computed so as to:
(i) take into account the fee base or value of the percentage of the project located withinthe taxing jurisdiction determined in accordance with Subsection (4) used to produce thecapacity, service, or other benefit sold to the supplier or suppliers; and
(ii) reflect any credit to be given in that year.
(4) (a) Except as otherwise provided in this section, the annual fees required by thissection shall be paid, collected, and distributed to the taxing jurisdiction as if:
(i) the annual fees were ad valorem property taxes; and
(ii) the project were assessed at the same rate and upon the same measure of value astaxable property in the state.
(b) (i) Notwithstanding Subsection (4)(a), for purposes of an annual fee required by thissection, the fee base of a project may be determined in accordance with an agreement among:
(A) the project entity; and
(B) any county that:
(I) is due an annual fee from the project entity; and
(II) agrees to have the fee base of the project determined in accordance with theagreement described in this Subsection (4).
(ii) The agreement described in Subsection (4)(b)(i):
(A) shall specify each year for which the fee base determined by the agreement shall beused for purposes of an annual fee; and
(B) may not modify any provision of this chapter except the method by which the feebase of a project is determined for purposes of an annual fee.
(iii) For purposes of an annual fee imposed by a taxing jurisdiction within a countydescribed in Subsection (4)(b)(i)(B), the fee base determined by the agreement described inSubsection (4)(b)(i) shall be used for purposes of an annual fee imposed by that taxingjurisdiction.
(iv) (A) If there is not agreement as to the fee base of a portion of a project for any year,for purposes of an annual fee, the State Tax Commission shall determine the value of that portionof the project for which there is not an agreement:
(I) for that year; and
(II) using the same measure of value as is used for taxable property in the state.
(B) The valuation required by Subsection (4)(b)(iv)(A) shall be made by the State TaxCommission in accordance with rules made by the State Tax Commission.
(c) Payments of the annual fees shall be made from:
(i) the proceeds of bonds issued for the project; and
(ii) revenues derived by the project entity from the project.
(d) (i) The contracts of the project entity with the purchasers of the capacity, service, or
other benefits of the project whose tangible property is not exempted by Utah ConstitutionArticle XIII, Section 3, from the payment of ad valorem property tax shall require eachpurchaser, whether or not located in the state, to pay, to the extent not otherwise provided for, itsshare, determined in accordance with the terms of the contract, of these fees.
(ii) It is the responsibility of the project entity to enforce the obligations of thepurchasers.
(5) (a) The responsibility of the project entity to make payment of the annual fees islimited to the extent that there is legally available to the project entity, from bond proceeds orrevenues, money to make these payments, and the obligation to make payments of the annualfees is not otherwise a general obligation or liability of the project entity.
(b) No tax lien may attach upon any property or money of the project entity by virtue ofany failure to pay all or any part of an annual fee.
(c) The project entity or any purchaser may contest the validity of an annual fee to thesame extent as if the payment was a payment of the ad valorem property tax itself.
(d) The payments of an annual fee shall be reduced to the extent that any contest issuccessful.
(6) (a) The annual fee described in Subsection (1):
(i) shall be paid by a public agency that:
(A) is not a project entity; and
(B) owns an interest in a facility providing additional project capacity if the interest isotherwise exempt from taxation pursuant to Utah Constitution, Article XIII, Section 3; and
(ii) for a public agency described in Subsection (6)(a)(i), shall be calculated inaccordance with Subsection (6)(b).
(b) The annual fee required under Subsection (6)(a) shall be an amount equal to the taxrate or rates of the applicable taxing jurisdiction multiplied by the product of the following:
(i) the fee base or value of the facility providing additional project capacity locatedwithin the jurisdiction;
(ii) the percentage of the ownership interest of the public agency in the facility; and
(iii) the portion, expressed as a percentage, of the public agency's ownership interest thatis attributable to the capacity, service, or other benefit from the facility that is sold by the publicagency to an energy supplier or suppliers whose tangible property is not exempted by UtahConstitution, Article XIII, Section 3, from the payment of ad valorem property tax.
(c) A public agency paying the annual fee pursuant to Subsection (6)(a) shall have theobligations, credits, rights, and protections set forth in Subsections (1) through (5) with respect toits ownership interest as though it were a project entity.
Amended by Chapter 236, 2008 General Session
Amended by Chapter 382, 2008 General Session