CHAPTER 170

FORMERLY

HOUSE BILL NO. 320

AN ACT TO AMEND TITLE 30 OF THE DELAWARE CODE RELATING TO TAXATION ON THE DISTRIBUTION AND USE OF PUBLIC UTILITIES.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE (three-fifths of all members elected to each house thereof concurring therein):

Section 1. Amend § 5501, Title 30, Delaware Code, by designating all of existing paragraph "(1)" of said section as paragraph (1)(a) and by adding to said paragraph a new paragraph (1)(b) to read as follows:

"(b) Gas is a public utility whether distributed to a consumer or user within this State by a distributor, either directly or through an intermediary, or delivered by a transmission company."

Section 2. Amend § 5501(3), Title 30, Delaware Code, by striking said paragraph in its entirety and substituting in lieu thereof a new paragraph (3) to read as follows:

"(3) 'Distributor' includes any company, corporation, municipality, partnership, firm, association, cooperative or any person or group of persons which supplies any public utility for sale to ultimate consumers or users within this State, whether, in the case of gas, the gas is supplied through a distributor's own or a transmission company's facilities."

Section 3. Amend § 5501, Title 30, Delaware Code, by inserting after the word "user" as it appears in paragraph (ii) of said section the following phrase: "for any heat, light or power use."

Section 4. Amend § 5501, Title 30, Delaware Code, by adding to said section new paragraphs (5) and (6) to read as follows:

"(5) 'Gas' for purposes of this chapter means natural gas which is further defined as a naturally occurring gaseous mixture of hydrocarbons and non-hydrocarbons, the principal constituent of the gaseous mixture being methane.

(6) 'Transmission company' includes any company, corporation, municipality, partnership, firm, association, cooperative or any person or group of persons owning, leasing or controlling property or fixtures to property within this State used for the transmission, transportation or distribution of gas."

Section 5. Amend § 5502(b), Title 30, Delaware Code, by striking paragraph ( I) of said subsection in its entirety and substituting in lieu thereat' new paragraph (1) to read as follows:

"(1) Except as provided in subsection (a) or paragraphs (2), (3), or (4), a tax is imposed upon any distributor of public utilities, which tax shall be at the rate of 4.25% of the gross receipts or tariff charges received by the distributor for such public utilities."

Section 6. Amend § 5502(b), Title 30, Delaware Code, by re-designating paragraph (3) as paragraph (4) of said subsection and by adding to said subsection a new paragraph (3) to read as follows:

"(3) Notwithstanding paragraphs (I) or (2) of this subsection, whenever: (i) gas is delivered within this State by a transmission company from a person who is not a distributor within this State and such person does not report and remit the tax on such gas; and (ii) a tax would have been imposed under this section had the delivery been made by a distributor, then the tax imposed by this section shall he upon the use of the gas and shall be paid by the consumer or user and shall be at the same rate applied to the amount paid for the gas as if the tax had been computed under paragraph (1) or (2). Transmission companies shall, in a manner to be prescribed by the Director of Revenue, inform persons to whom they deliver gas of the tax on the use of gas. The Director of Revenue may require information returns from transmission companies to include, without limitation, identification of the persons to which gas is delivered and the dates and quantities delivered. The Director of Revenue shall maintain the confidentiality of prices assessed or paid for gas."

Section 7. Amend § 5503(b), Title 30, Delaware Code, by striking said subsection in its entirety and substituting in lieu thereof the following:

"(b) The tax imposed by § 5502(b) of this title shall be paid only once and shall be considered imposed upon, in the case of deliveries of gas described in § 5502(b)(3), the ultimate consumer or user for the use of such gas. In all other cases, the tax shall be imposed on the tax shall be imposed on the distributor and is not to be construed as a tax upon the consumer or user."

Section 8. Amend § 5504(a), Title 30, Delaware Code, by striking the word "The" at the beginning of said subsection and substituting in lieu thereof the following phrase:

"In the case of the distribution of public utilities as described in § 5502(a) and (b)(1), (2), or (4) of this title, the".

Section 9. Amend § 5504, Title 30, Delaware Code, by adding to said section a new subsection (c) to read as follows:

"(e) In the case of deliveries of gas as described in § 5502(b)(3) the taxes due under this chapter shall be paid within twenty days after the end of the calendar month in which the user first receives a statement from the seller of the utility setting forth the amount charged for such gas."

Section 10. Amend § 5506, Title 30, Delaware Code, by adding to said section subsections (h) and (i) to read as follows:

"(h) The gross receipts or tariff charges received by a person who furnishes gas or electricity to another person who purchases said gas or electricity for resale shall be exempt from the tax imposed by this chapter.

(i) The gross receipts or tariff charges received by a person who furnishes gas for use by a distributor in the generation of electricity for distribution and sale and the receipt and consumption of such gas shall be exempt from the tax imposed by this chapter."

Section 11. Amend § 5502(b), Title 30, Delaware Code, by striking the word "electricity" as it appears in paragraph (2) of said subsection and substituting in lieu thereof the phrase "electricity and gas".

Section 12. Amend § 5501, Title 30, Delaware Code, by striking the phrase "As used in this chapter" as it appears at the beginning of said section and substituting in lieu thereof the phrase "For purposes of this chapter only".

Section 13. It is declared to be the legislative intent that, if any section, subsection, sentence, clause or provision of this Act is held to be invalid, the remainder of the Act shall also be held invalid.

Section 14. This Act shall be effective for utility services and commodities delivered or distributed after December 31, 1997.

Approved July 9, 1997