1998 Legislation
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HOUSE BILL NO. 686 – Natural gas cooperative assn, tax

HOUSE BILL NO. 686

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Daily Data Tracking History



H0686...............................................by REVENUE AND TAXATION
NATURAL GAS COOPERATIVE ASSOCIATION - Amends and adds to existing law
relating to taxation of natural gas cooperative associations, to provide
definitions, to provide a reference to annual gross electrical earnings, to
provide for a tax levy on annual gross natural gas earnings, to provide a
reference to electrical associations, to provide for filing an operator's
statement and for allotment and apportionment of tax due from natural gas
associations, to provide for notification by the county treasurer to each
natural gas cooperative of taxes owed, to provide that taxes due and
payable are liens on the electrical or natural gas association owing the
tax and to provide that nonoperating property of a natural gas association
shall be assessed by the county assessor.

02/13    House intro - 1st rdg - to printing
02/16    Rpt prt - to Rev/Tax
02/20    Rpt out - rec d/p - to 2nd rdg
02/23    2nd rdg - to 3rd rdg
02/26    3rd rdg - PASSED - 66-0-4
      AYES -- Alltus, Barraclough, Barrett, Bell, Bieter, Bivens,
      Black(15), Black(23), Boe, Bruneel, Callister, Campbell, Clark, Crow,
      Cuddy, Deal, Ellsworth, Field(13), Field(20), Gagner, Geddes, Gould,
      Hadley, Hansen, Henbest, Hornbeck, Jaquet, Jones(9), Jones(22),
      Jones(20), Judd, Kellogg, Kempton, Kendell, Kjellander, Kunz, Lake,
      Linford, Loertscher, Mader, Marley, McKague, Meyer, Miller,
      Mortensen, Newcomb, Pischner, Pomeroy, Reynolds, Richman, Ridinger,
      Robison, Sali, Schaefer, Stevenson, Stoicheff, Stone, Stubbs, Taylor,
      Tilman, Tippets, Trail, Watson, Wheeler, Zimmermann, Mr Speaker
      NAYS -- None
      Absent and excused -- Chase, Crane, Denney, Wood
    Floor Sponsor - Campbell
    Title apvd - to Senate
02/27    Senate intro - 1st rdg - to Loc Gov
03/05    Rpt out - rec d/p - to 2nd rdg
03/06    2nd rdg - to 3rd rdg
03/16    3rd rdg - PASSED - 33-0-2
      AYES--Andreason, Boatright, Branch, Bunderson, Burtenshaw, Cameron,
      Crow, Danielson, Darrington, Deide, Dunklin, Frasure, Geddes, Hansen,
      Hawkins, Ingram, Keough, King, Lee, McLaughlin, Noh, Parry,
      Richardson, Riggs, Risch, Sandy, Schroeder, Sorensen, Stennett,
      Sweeney, Thorne, Wheeler, Whitworth
      NAYS--None
      Absent and excused--Ipsen, Twiggs
    Floor Sponsors - Keough, Hawkins
    Title apvd - to House
03/17    To enrol
03/17    Rpt enrol - Sp signed
03/18    Pres signed - to Governor
03/20    Governor signed
         Session Law Chapter 132
         Effective: 01/01/99

Bill Text


H0686


                                                                        
 ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
Fifty-fourth Legislature                 Second Regular Session - 1998
                                                                        

                             IN THE HOUSE OF REPRESENTATIVES

                                    HOUSE BILL NO. 686

                            BY REVENUE AND TAXATION COMMITTEE

 1                                        AN ACT
 2    RELATING TO TAXATION OF NATURAL GAS COOPERATIVE ASSOCIATIONS; AMENDING SECTION
 3        63-3501, IDAHO CODE, TO ADD DEFINITIONS AND TO MAKE  A  TECHNICAL  CORREC-
 4        TION;  AMENDING  SECTION  63-3502,  IDAHO  CODE, TO PROVIDE A REFERENCE TO
 5        ANNUAL GROSS ELECTRICAL EARNINGS  AND  TO  MAKE  A  TECHNICAL  CORRECTION;
 6        AMENDING  CHAPTER  35, TITLE 63, IDAHO CODE, BY THE ADDITION OF A NEW SEC-
 7        TION 63-3502A, IDAHO CODE, TO PROVIDE FOR A TAX LEVY ON ANNUAL GROSS NATU-
 8        RAL GAS EARNINGS; AMENDING SECTION 63-3503, IDAHO CODE, TO PROVIDE A  REF-
 9        ERENCE  TO  ELECTRICAL  ASSOCIATIONS; AMENDING CHAPTER 35, TITLE 63, IDAHO
10        CODE, BY THE ADDITION OF A NEW SECTION 63-3503A, IDAHO  CODE,  TO  PROVIDE
11        FOR  FILING AN OPERATOR'S STATEMENT AND FOR ALLOTMENT AND APPORTIONMENT OF
12        TAX DUE FROM NATURAL GAS ASSOCIATIONS BY THE STATE TAX COMMISSION;  AMEND-
13        ING SECTION 63-3504, IDAHO CODE, TO PROVIDE FOR NOTIFICATION BY THE COUNTY
14        TREASURER  TO EACH NATURAL GAS COOPERATIVE OF TAXES OWED AND TO MAKE TECH-
15        NICAL CORRECTIONS; AMENDING SECTION 63-3505, IDAHO CODE, TO  PROVIDE  THAT
16        TAXES  DUE AND PAYABLE ARE LIENS ON THE ELECTRICAL OR NATURAL GAS ASSOCIA-
17        TION OWING THE TAX; AMENDING SECTION 63-3506, IDAHO CODE, TO PROVIDE  THAT
18        NONOPERATING  PROPERTY  OF  A NATURAL GAS ASSOCIATION SHALL BE ASSESSED BY
19        THE COUNTY ASSESSOR; AND TO PROVIDE AN EFFECTIVE DATE.

20    Be It Enacted by the Legislature of the State of Idaho:

21        SECTION 1.  That Section 63-3501, Idaho Code, be, and the same  is  hereby
22    amended to read as follows:

23        63-3501.  DEFINITIONS. For the purposes of this act:
24        (a)  The  term  "cooperative  electrical association" means any nonprofit,
25    cooperative association organized  and  maintained  by  its  members,  whether
26    incorporated  or unincorporated, for the purpose of transmitting, distributing
27    or delivering electric power to its members.
28        (b)   The term "cooperative natural gas association" means  any  non-
29    profit  cooperative  association  organized  and  maintained  by  its members,
30    whether incorporated or unincorporated, for the purpose of transmitting,  dis-
31    tributing or delivering natural gas to its members.
32        (c)   The term "cost of power" means the cost of power purchases and
33    generation  included in reports to, and in accordance with applicable require-
34    ments of, the rural electrification administration, United  States  department
35    of  agriculture,  by  cooperative  electrical associations which are borrowers
36    from the rural electrification administration, and for cooperative  electrical
37    associations  which  are not borrowers from the rural electrification adminis-
38    tration, such costs which could have been included by such  cooperative  elec-
39    trical  associations  using  equivalent reporting and accounting requirements.
40    The state tax commission shall prescribe necessary rules and  regulations  for
41    the purpose of providing a uniform method of reporting cost of power purchases
42    and  generation  by  cooperative  electrical associations, consistent with the
43    reporting and accounting requirements of the rural electrification administra-


                                          2

 1    tion.
 2         (d)  The term "cost of gas" means the cost of natural gas  purchased
 3    by  cooperative  natural gas associations from wholesale or other suppliers of
 4    natural gas for delivery to members of the cooperative  natural  gas  associa-
 5    tion. 
 6        (  c    e )  The term "gross  electrical 
 7    earnings" means the gross receipts of  a  cooperative  electrical  association
 8    from the distribution, delivery and sale of electric power within the state of
 9    Idaho,  but  shall not include any earnings or receipts from the distribution,
10    delivery or sale of electric power consumed in pumping water for irrigation or
11    drainage purposes within the state of Idaho, upon the land  of  such  consumer
12    and  for  the  use  and  benefit  of his own land, and where such consumer has
13    received from the association a refund, rebate, or credit of  three  and  one-
14    half  per cent   percent  (3 1/2%) of the cost to him of
15    the electric power so used and consumed.
16          (f)  The term "gross natural gas earnings" means the gross receipts
17    of a cooperative natural gas association from the distribution,  delivery  and
18    sale of natural gas within the state of Idaho. 
19        (  d    g )  The term "operating property" means and
20    includes all real estate, fixtures or  personal  property  owned,  controlled,
21    operated or managed by such  electrical or natural gas  association
22    in  connection  with  or to facilitate the generation, transmission, distribu-
23    tion, delivery, or measuring of electric power  or  natural  gas  ,
24    and  all  conduits,  ducts, or other devices, materials, apparatus or property
25    for containing, holding or carrying conductors used or  to  be  used  for  the
26    transmission,  distribution  and  delivery of electric power  and natural
27    gas , including construction tools, materials and supplies.
28        ( e  h )  The term "nonoperating property" means all
29    other property, real or personal, owned, controlled or managed by  such  
30    electrical or natural gas  association.
31        (  f   i )  The term "taxing unit" shall include the
32    separate taxing districts of the county as well as the county itself.
33        ( g  j )  The term "tax levy" means  the  total  tax
34    levies fixed by each taxing district, as defined herein, in the year next pre-
35    ceding.
36        (  h  k )  The term "WPPSS 4 and 5 costs" means, for
37    a cooperative electrical association which is a participant under the Washing-
38    ton public power supply system nuclear projects numbers 4 and 5  participants'
39    agreement, dated July 14, 1976, all of its costs in connection with Washington
40    public power supply system nuclear projects numbers 4 and 5.
41        (  i    l )  The term "weighted wire mileage factor"
42    means a figure which is arrived at by multiplying the tax levy of each  taxing
43    unit  by  the  number  of wire miles of transmission and distribution lines of
44    such cooperative electrical association situated in such taxing unit.
45         (m)  The term "gas line mileage factor"  means  a  figure  which  is
46    arrived  at  by  multiplying the tax levy of each taxing unit by the number of
47    miles of natural gas transmission and distribution lines of  such  cooperative
48    natural gas association situated in such taxing unit. 

49        SECTION  2.  That  Section 63-3502, Idaho Code, be, and the same is hereby
50    amended to read as follows:

51        63-3502.  LEVY OF TAX ON ANNUAL GROSS   ELECTRICAL    EARNINGS.
52    There shall be levied against every cooperative electrical association in this
53    state  a  tax of three and one-half  per cent   percent 


                                          3

 1    (3 1/2%) of its annual gross earnings, after first reducing such  gross  earn-
 2    ings by its cost of power and WPPSS 4 and 5 costs in such sum as the amount of
 3    its  gross earnings bear to its gross receipts from the distribution, delivery
 4    and sale of electric power within the state of Idaho. This  tax  shall  be  in
 5    lieu  of all other taxes on the operating property of such association for the
 6    tax year next preceding the filing of the statement hereinafter provided  for,
 7    and which shall be paid in the manner and at the time prescribed herein.

 8        SECTION  3.  That  Chapter  35,  Title 63, Idaho Code, be, and the same is
 9    hereby amended by the addition thereto of a  NEW SECTION  ,  to  be
10    known and designated as Section 63-3502A, Idaho Code, and to read as follows:

11        63-3502A.  LEVY  OF  TAX ON ANNUAL GROSS NATURAL GAS EARNINGS. There shall
12    be levied against every cooperative natural gas association in  this  state  a
13    tax  of  three  and  one-half  percent (3 1/2 %) of its annual gross earnings,
14    after first reducing such gross earnings by its cost of natural gas.  This tax
15    shall be in lieu of all other taxes on the operating property of such associa-
16    tion of the tax year next preceding the filing of  the  statement  hereinafter
17    provided for, and which shall be paid in the manner and at the time prescribed
18    herein.

19        SECTION  4.  That  Section 63-3503, Idaho Code, be, and the same is hereby
20    amended to read as follows:

21        63-3503.  FILING OPERATORS' STATEMENT -- ALLOTMENT  AND  APPORTIONMENT  OF
22    TAX    DUE  FROM  ELECTRICAL ASSOCIATIONS  BY STATE TAX COMMISSION.
23    Every cooperative electrical association in this state  shall  file  with  the
24    state  tax  commission of the state of Idaho the operators' statement provided
25    for in section 63-404, Idaho Code, and shall include thereon  a  statement  of
26    the  amount  of  its gross earnings for the calendar year next preceding. Upon
27    examining and verifying said statement the state tax commission shall  compute
28    the  amount  of the tax measured by the gross earnings and shall allot to each
29    county in which the operating property of such  association  is  situate  that
30    proportion  of the total tax of such association shown to be due as the number
31    of wire miles of transmission and distribution lines of such association situ-
32    ate in such county bears to the total wire miles of transmission and distribu-
33    tion lines of such association. The state tax commission shall then, for  each
34    county,  apportion  the tax so allotted to the county among the several taxing
35    units thereof within which any operating property of such association is situ-
36    ate, by apportioning to each such taxing unit that proportion of  the  tax  so
37    allotted  to the county as the weighted wire mileage factor for each such tax-
38    ing unit bears to the total of the weighted wire mileage factors of  all  such
39    taxing  units  in  the county, and shall immediately notify the state superin-
40    tendent of public instruction and the county treasurer of such  allotment  and
41    apportionment and the amounts thereof.

42        SECTION  5.  That  Chapter  35,  Title 63, Idaho Code, be, and the same is
43    hereby amended by the addition thereto of a  NEW SECTION  ,  to  be
44    known and designated as Section 63-3503A, Idaho Code, and to read as follows:

45        63-3503A.  FILING  OPERATORS'  STATEMENT -- ALLOTMENT AND APPORTIONMENT OF
46    TAX DUE FROM NATURAL GAS ASSOCIATIONS BY STATE TAX COMMISSION. Every  coopera-
47    tive  natural gas association in this state shall file with the state tax com-
48    mission of the state of Idaho the operators' statement provided for in section
49    63-404, Idaho Code, and shall include thereon a statement of the amount of its


                                          4

 1    gross earnings for the calendar year next preceding. Upon examining and  veri-
 2    fying  said statement the state tax commission shall compute the amount of the
 3    tax measured by the gross earnings and shall allot to each county in which the
 4    operating property of such association is situate that proportion of the total
 5    tax of such association shown to be due as the number of  gas  line  miles  of
 6    transmission and distribution lines of such association situate in such county
 7    bears  to  the total wire miles of transmission and distribution lines of such
 8    association. The state tax commission shall then, for each  county,  apportion
 9    the  tax  so  allotted  to  the  county among the several taxing units thereof
10    within which any operating property of such association is situate, by  appor-
11    tioning to each such taxing unit that proportion of the tax so allotted to the
12    county  as  the gas line mileage factor for each such taxing unit bears to the
13    total of the gas line mileage factors of all such taxing units in the  county,
14    and  shall  immediately  notify the state superintendent of public instruction
15    and the county treasurer of such allotment and apportionment and  the  amounts
16    thereof.

17        SECTION  6.  That  Section 63-3504, Idaho Code, be, and the same is hereby
18    amended to read as follows:

19        63-3504.  COLLECTION BY COUNTY TREASURER -- PENALTY AND  INTEREST  IMPOSED
20    WHEN  DELINQUENT. Upon receipt of the notification of the allotment and appor-
21    tionment of such taxes by the state tax commission by  the  county  treasurer,
22    said  county  treasurer  shall,  not later than June 15th of each year, notify
23    each cooperative electrical association  and each natural gas cooperative
24     of the amount of taxes owed,  and  the  apportionment  thereof  to  the
25    county and to the several taxing districts in the county and such tax shall be
26    due  and  payable  not  later  than  July  1,  following and, upon the payment
27    thereof, the county treasurer shall pay  over  to  each  taxing  district  its
28    apportionment  as  herein  determined.  Any  such taxes not paid by July 1, as
29    aforesaid, shall become delinquent and a penalty of five  per cent 
30     percent  (5%) thereof shall be imposed, together with interest  at
31    the rate of one  per cent   percent  (1%) per month from
32    July 1 until paid.

33        SECTION  7.  That  Section 63-3505, Idaho Code, be, and the same is hereby
34    amended to read as follows:

35        63-3505.  TAXES A LIEN ON PROPERTY OF ASSOCIATION UNTIL  PAID.  All  taxes
36    due  and payable under this act shall be a lien on all property, real and per-
37    sonal, of the  electrical or natural gas    association  owing  the
38    same, as of June 15th of each year and shall be discharged only by the payment
39    thereof.  In  any  action to enforce payment of any delinquent taxes due under
40    this act, the county prosecuting such action shall be entitled to  a  judgment
41    for the reasonable costs of prosecuting such action, as well as for the delin-
42    quent taxes, penalty and interest.

43        SECTION  8.  That  Section 63-3506, Idaho Code, be, and the same is hereby
44    amended to read as follows:

45        63-3506.  ASSESSMENT   OF   NONOPERATING   PROPERTY   BY   ASSESSOR.   The
46    nonoperating property of any  cooperative  electrical    or  natural  gas
47      association  shall  be  assessed  by the county assessor of the county
48    wherein such property is situate, and taxes levied against the same shall be a
49    lien, and shall be due and payable, in the same manner as are any other  taxes


                                          5

 1    on property.

 2        SECTION  9.  This act shall be in full force and effect on and after Janu-
 3    ary 1, 1999.

Statement of Purpose / Fiscal Impact


    





                          STATEMENT OF PURPOSE
                                RS 07974
                                    
    
    This proposed legislation would add a new Section, 63-3503A, 
    Filing operators' statement -- allotment and apportionment of tax 
    due from Natural Gas Associations by State Commission. The State 
    Tax Commission shall compute the amount of the tax measured by the 
    gross earnings and shall allot to each county in which the 
    operating property of such association are situated that 
    proportion of the total tax of such association shown to be due as 
    the number of gas line miles of transmission and distribution 
    lines. It also makes technical corrections to 63-3502 I.C.
    
                               FISCAL NOTE
    
    Based on 3.5% gross revenue, taxes distributed by the State
    
    Tax Commission to counties in-lieu of property taxes.
    
    Distributed as follows:
    
    1999 $21,134
    2000 $38,764
    2001 $52,174
    2002 $56,329
    
    CONTACT: Rep. John Campbell
             208-332-1000
    
    STATEMENT OF PURPOSE/ FISCAL NOTE
    
    686