NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.

The LFC is only preparing FIRs on bills referred to the Senate Finance Committee, the Senate Ways and Means Committee, the House Appropriations and Finance Committee and the House Taxation and Revenue Committee. The chief clerks are responsible for preparing and issuing all other bill analyses.

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(Parenthesis ( ) Indicate Revenue Decreases)

Duplicates/Conflicts with/Companion to/Relates to

SOURCES OF INFORMATION

Taxation and Revenue Department (TRD)

State Highway and Transportation Department (SHTD)

SUMMARY

Synopsis of Bill

House Bill 789 makes several changes to the Gasoline Tax Act, The Petroleum Products Load Fee Act, and the Special Fuels Act.

• It replaces the current definition of when gasoline is "received" (and thus taxable). The proposed definition would have gasoline being received when it is (a) loaded into transportation equipment at a refinery or pipeline in the state, (b) when imported to the state or (c) when it leaves an Indian reservation or pueblo grant and the gasoline tax has not been paid.



• It adds a requirement that gasoline distributors must file information returns with the taxation and revenue department. Current law only mentions wholesalers. It also allows for a $100 penalty against wholesalers and distributors who fail to make a timely report to the department.



• It applies a new definition for when gasoline is received to special fuels. The provisions for special fuels also make them taxable when they are leave an Indian reservation or pueblo and the tax has not been paid.



• It deletes the special fuel excise deduction for bulk storage permit holders. And it provides a refund of bulk storage permit fees paid for with respect to any period after the effective date of the act for which the permit would have been valid.



• The bill would become effective on July 1, 1999.




FISCAL IMPLICATIONS





The estimates shown in the table for FY 2000 are based on the fiscal impact report provided by the Taxation and Revenue Department. The State Highway and Transportation Department also furnished similar estimates. According to Taxation and Revenue the increased revenue would come from both retail sales becoming taxable and closing the "loophole" for wholesale activity. The highway department analysis would suggest that they expect the revenue to result from regaining wholesale gallons that are escaping tax. The estimate shown for future years is the same as for FY 2000. TRD notes that future impacts could be larger due to growth in Indian gasoline sales over time (particularly wholesale activity).





ADMINISTRATIVE IMPLICATIONS





TRD reports that the bill would have a positive impact on their compliance and processing administration.





BT/gm