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S.B. 213

             1     

TAXATION OF TELEPHONE CORPORATIONS

             2     
2001 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Sponsor: Curtis S. Bramble

             5      This act modifies the Revenue and Taxation Code to address the definition of telephone
             6      corporations for purposes of sales and use taxes. This act takes effect on July 1, 2001.
             7      This act affects sections of Utah Code Annotated 1953 as follows:
             8      AMENDS:
             9          59-12-102 (Effective 07/01/01), as last amended by Chapter 253, Laws of Utah 2000
             10          59-12-103 (Effective 07/01/01), as last amended by Chapters 147, 253 and 325, Laws of
             11      Utah 2000
             12      Be it enacted by the Legislature of the state of Utah:
             13          Section 1. Section 59-12-102 (Effective 07/01/01) is amended to read:
             14           59-12-102 (Effective 07/01/01). Definitions.
             15          As used in this chapter:
             16          (1) (a) "Admission or user fees" includes season passes.
             17          (b) "Admission or user fees" does not include annual membership dues to private
             18      organizations.
             19          (2) "Area agency on aging" is as defined in Section 62A-3-101 .
             20          (3) "Authorized carrier" means:
             21          (a) in the case of vehicles operated over public highways, the holder of credentials
             22      indicating that the vehicle is or will be operated pursuant to both the International Registration
             23      Plan (IRP) and the International Fuel Tax Agreement (IFTA);
             24          (b) in the case of aircraft, the holder of a Federal Aviation Administration (FAA) operating
             25      certificate or air carrier's operating certificate; or
             26          (c) in the case of locomotives, freight cars, railroad work equipment, or other rolling stock,
             27      the holder of a certificate issued by the United States Interstate Commerce Commission.


             28          (4) (a) For purposes of Subsection 59-12-104 (43), "coin-operated amusement device"
             29      means:
             30          (i) a coin-operated amusement, skill, or ride device;
             31          (ii) that is not controlled through vendor-assisted, over-the-counter, sales of tokens; and
             32          (iii) includes a music machine, pinball machine, billiard machine, video game machine,
             33      arcade machine, and a mechanical or electronic skill game or ride.
             34          (b) For purposes of Subsection 59-12-104 (43), "coin-operated amusement device" does
             35      not mean a coin-operated amusement device possessing a coinage mechanism that:
             36          (i) accepts and registers multiple denominations of coins; and
             37          (ii) allows the vendor to collect the sales and use tax at the time an amusement device is
             38      activated and operated by a person inserting coins into the device.
             39          (5) "Commercial use" means the use of gas, electricity, heat, coal, fuel oil, or other fuels
             40      that does not constitute industrial use under Subsection (13) or residential use under Subsection
             41      (21).
             42          (6) (a) "Common carrier" means a person engaged in or transacting the business of
             43      transporting passengers, freight, merchandise, or other property for hire within this state.
             44          (b) (i) "Common carrier" does not include a person who, at the time the person is traveling
             45      to or from that person's place of employment, transports a passenger to or from the passenger's
             46      place of employment.
             47          (ii) For purposes of Subsection (6)(b)(i), in accordance with Title 63, Chapter 46a, Utah
             48      Administrative Rulemaking Act, the commission may make rules defining what constitutes a
             49      person's place of employment.
             50          (7) "Component part" includes:
             51          (a) poultry, dairy, and other livestock feed, and their components;
             52          (b) baling ties and twine used in the baling of hay and straw;
             53          (c) fuel used for providing temperature control of orchards and commercial greenhouses
             54      doing a majority of their business in wholesale sales, and for providing power for off-highway type
             55      farm machinery; and
             56          (d) feed, seeds, and seedlings.
             57          (8) "Construction materials" means any tangible personal property that will be converted
             58      into real property.


             59          (9) (a) "Fundraising sales" means sales:
             60          (i) (A) made by a public or private elementary or secondary school; or
             61          (B) made by a public or private elementary or secondary school student, grades
             62      kindergarten through 12;
             63          (ii) that are for the purpose of raising funds for the school to purchase equipment,
             64      materials, or provide transportation; and
             65          (iii) that are part of an officially sanctioned school activity.
             66          (b) For purposes of Subsection (9)(a)(iii), "officially sanctioned school activity" means a
             67      school activity:
             68          (i) that is conducted in accordance with a formal policy adopted by the school or school
             69      district governing the authorization and supervision of fundraising activities;
             70          (ii) that does not directly or indirectly compensate an individual teacher or other
             71      educational personnel by direct payment, commissions, or payment in kind; and
             72          (iii) the net or gross revenues from which are deposited in a dedicated account controlled
             73      by the school or school district.
             74          (10) (a) "Hearing aid" means:
             75          (i) an instrument or device having an electronic component that is designed to:
             76          (A) (I) improve impaired human hearing; or
             77          (II) correct impaired human hearing; and
             78          (B) (I) be worn in the human ear; or
             79          (II) affixed behind the human ear;
             80          (ii) an instrument or device that is surgically implanted into the cochlea; or
             81          (iii) a telephone amplifying device.
             82          (b) "Hearing aid" does not include:
             83          (i) except as provided in Subsection (10)(a)(i)(B) or (10)(a)(ii), an instrument or device
             84      having an electronic component that is designed to be worn on the body;
             85          (ii) except as provided in Subsection (10)(a)(iii), an assistive listening device or system
             86      designed to be used by one individual, including:
             87          (A) a personal amplifying system;
             88          (B) a personal FM system;
             89          (C) a television listening system; or


             90          (D) a device or system similar to a device or system described in Subsections
             91      (10)(b)(ii)(A) through (C); or
             92          (iii) an assistive listening device or system designed to be used by more than one
             93      individual, including:
             94          (A) a device or system installed in:
             95          (I) an auditorium;
             96          (II) a church;
             97          (III) a conference room;
             98          (IV) a synagogue; or
             99          (V) a theater; or
             100          (B) a device or system similar to a device or system described in Subsections
             101      (10)(b)(iii)(A)(I) through (V).
             102          (11) (a) "Hearing aid accessory" means a hearing aid:
             103          (i) component;
             104          (ii) attachment; or
             105          (iii) accessory.
             106          (b) "Hearing aid accessory" includes:
             107          (i) a hearing aid neck loop;
             108          (ii) a hearing aid cord;
             109          (iii) a hearing aid ear mold;
             110          (iv) hearing aid tubing;
             111          (v) a hearing aid ear hook; or
             112          (vi) a hearing aid remote control.
             113          (c) "Hearing aid accessory" does not include:
             114          (i) a component, attachment, or accessory designed to be used only with an:
             115          (A) instrument or device described in Subsection (10)(b)(i); or
             116          (B) assistive listening device or system described in Subsection (10)(b)(ii) or (iii); or
             117          (ii) a hearing aid battery.
             118          (12) (a) "Home medical equipment and supplies" means equipment and supplies that:
             119          (i) a licensed physician prescribes or authorizes in writing as necessary for the treatment
             120      of a medical illness or injury or as necessary to mitigate an impairment resulting from illness or


             121      injury;
             122          (ii) are used exclusively by the person for whom they are prescribed to serve a medical
             123      purpose; and
             124          (iii) are listed as eligible for payment under Title 18 of the federal Social Security Act or
             125      under the state plan for medical assistance under Title 19 of the federal Social Security Act.
             126          (b) "Home medical equipment and supplies" does not include:
             127          (i) equipment and supplies purchased by, for, or on behalf of any health care facility, as
             128      defined in Subsection (12)(c), doctor, nurse, or other health care provider for use in their
             129      professional practice;
             130          (ii) eyeglasses, contact lenses, or equipment to correct impaired vision; or
             131          (iii) hearing aids or hearing aid accessories.
             132          (c) For purposes of Subsection (12)(b)(i), "health care facility" includes:
             133          (i) a clinic;
             134          (ii) a doctor's office; and
             135          (iii) a health care facility as defined in Section 26-21-2 .
             136          (13) "Industrial use" means the use of natural gas, electricity, heat, coal, fuel oil, or other
             137      fuels in:
             138          (a) mining or extraction of minerals;
             139          (b) agricultural operations to produce an agricultural product up to the time of harvest or
             140      placing the agricultural product into a storage facility, including:
             141          (i) commercial greenhouses;
             142          (ii) irrigation pumps;
             143          (iii) farm machinery;
             144          (iv) implements of husbandry as defined in Subsection 41-1a-102 (23) that are not
             145      registered under Title 41, Chapter 1a, Part 2, Registration; and
             146          (v) other farming activities; and
             147          (c) manufacturing tangible personal property at an establishment described in SIC Codes
             148      2000 to 3999 of the 1987 Standard Industrial Classification Manual of the federal Executive Office
             149      of the President, Office of Management and Budget.
             150          (14) "Manufactured home" means any manufactured home or mobile home as defined in
             151      Title 58, Chapter 56, Utah Uniform Building Standards Act.


             152          (15) For purposes of Subsection 59-12-104 (14), "manufacturing facility" means:
             153          (a) an establishment described in SIC Codes 2000 to 3999 of the 1987 Standard Industrial
             154      Classification Manual of the federal Executive Office of the President, Office of Management and
             155      Budget; or
             156          (b) a scrap recycler if:
             157          (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process one
             158      or more of the following items into prepared grades of processed materials for use in new products:
             159          (A) iron;
             160          (B) steel;
             161          (C) nonferrous metal;
             162          (D) paper;
             163          (E) glass;
             164          (F) plastic;
             165          (G) textile; or
             166          (H) rubber; and
             167          (ii) the new products under Subsection (15)(b)(i) would otherwise be made with
             168      nonrecycled materials.
             169          (16) (a) "Medicine" means:
             170          (i) insulin, syringes, and any medicine prescribed for the treatment of human ailments by
             171      a person authorized to prescribe treatments and dispensed on prescription filled by a registered
             172      pharmacist, or supplied to patients by a physician, surgeon, or podiatric physician;
             173          (ii) any medicine dispensed to patients in a county or other licensed hospital if prescribed
             174      for that patient and dispensed by a registered pharmacist or administered under the direction of a
             175      physician; and
             176          (iii) any oxygen or stoma supplies prescribed by a physician or administered under the
             177      direction of a physician or paramedic.
             178          (b) "Medicine" does not include:
             179          (i) any auditory, prosthetic, ophthalmic, or ocular device or appliance; or
             180          (ii) any alcoholic beverage.
             181          (17) "Olympic merchandise" means tangible personal property bearing an Olympic
             182      designation, emblem, insignia, mark, logo, service mark, symbol, terminology, trademark, or other


             183      copyrighted or protected material, including:
             184          (a) one or more of the following terms:
             185          (i) "Olympic";
             186          (ii) "Olympiad"; or
             187          (iii) "Citius Altius Fortius";
             188          (b) the symbol of the International Olympic Committee, consisting of five interlocking
             189      rings;
             190          (c) the emblem of the International Olympic Committee Corporation;
             191          (d) a United States Olympic Committee designation, emblem, insignia, mark, logo, service
             192      mark, symbol, terminology, trademark, or other copyrighted or protected material;
             193          (e) any emblem of the Olympic Winter Games of 2002 that is officially designated by the
             194      Salt Lake Organizing Committee of the Olympic Winter Games of 2002; or
             195          (f) the mascot of the Olympic Winter Games of 2002.
             196          (18) (a) "Other fuels" means products that burn independently to produce heat or energy.
             197          (b) "Other fuels" includes oxygen when it is used in the manufacturing of tangible personal
             198      property.
             199          (19) "Person" includes any individual, firm, partnership, joint venture, association,
             200      corporation, estate, trust, business trust, receiver, syndicate, this state, any county, city,
             201      municipality, district, or other local governmental entity of the state, or any group or combination
             202      acting as a unit.
             203          (20) "Purchase price" means the amount paid or charged for tangible personal property or
             204      any other taxable transaction under Subsection 59-12-103 (1), excluding only cash discounts taken
             205      or any excise tax imposed on the purchase price by the federal government.
             206          (21) "Residential use" means the use in or around a home, apartment building, sleeping
             207      quarters, and similar facilities or accommodations.
             208          (22) (a) "Retail sale" means any sale within the state of tangible personal property or any
             209      other taxable transaction under Subsection 59-12-103 (1), other than resale of such property, item,
             210      or service by a retailer or wholesaler to a user or consumer.
             211          (b) "Retail sale" includes sales by any farmer or other agricultural producer of poultry,
             212      eggs, or dairy products to consumers if the sales have an average monthly sales value of $125 or
             213      more.


             214          (c) "Retail sale" does not include, and no additional sales or use tax shall be assessed
             215      against, those transactions where a purchaser of tangible personal property pays applicable sales
             216      or use taxes on its initial nonexempt purchases of property and then enters into a sale-leaseback
             217      transaction by which title to such property is transferred by the purchaser-lessee to a lessor for
             218      consideration, provided:
             219          (i) the transaction is intended as a form of financing for the property to the
             220      purchaser-lessee; and
             221          (ii) pursuant to generally accepted accounting principles, the purchaser-lessee is required
             222      to capitalize the subject property for financial reporting purposes, and account for the lease
             223      payments as payments made under a financing arrangement.
             224          (23) (a) "Retailer" means any person engaged in a regularly organized retail business in
             225      tangible personal property or any other taxable transaction under Subsection 59-12-103 (1), and
             226      who is selling to the user or consumer and not for resale.
             227          (b) "Retailer" includes commission merchants, auctioneers, and any person regularly
             228      engaged in the business of selling to users or consumers within the state.
             229          (c) "Retailer" does not include farmers, gardeners, stockmen, poultrymen, or other growers
             230      or agricultural producers producing and doing business on their own premises, except those who
             231      are regularly engaged in the business of buying or selling for a profit.
             232          (d) For purposes of this chapter the commission may regard as retailers the following if
             233      they determine it is necessary for the efficient administration of this chapter: salesmen,
             234      representatives, peddlers, or canvassers as the agents of the dealers, distributors, supervisors, or
             235      employers under whom they operate or from whom they obtain the tangible personal property sold
             236      by them, irrespective of whether they are making sales on their own behalf or on behalf of these
             237      dealers, distributors, supervisors, or employers, except that:
             238          (i) a printer's facility with which a retailer has contracted for printing shall not be
             239      considered to be a salesman, representative, peddler, canvasser, or agent of the retailer; and
             240          (ii) the ownership of property that is located at the premises of a printer's facility with
             241      which the retailer has contracted for printing and that consists of the final printed product, property
             242      that becomes a part of the final printed product, or copy from which the printed product is
             243      produced, shall not result in the retailer being deemed to have or maintain an office, distribution
             244      house, sales house, warehouse, service enterprise, or other place of business, or to maintain a stock


             245      of goods, within this state.
             246          (24) "Sale" means any transfer of title, exchange, or barter, conditional or otherwise, in any
             247      manner, of tangible personal property or any other taxable transaction under Subsection
             248      59-12-103 (1), for consideration. It includes:
             249          (a) installment and credit sales;
             250          (b) any closed transaction constituting a sale;
             251          (c) any sale of electrical energy, gas, services, or entertainment taxable under this chapter;
             252          (d) any transaction if the possession of property is transferred but the seller retains the title
             253      as security for the payment of the price; and
             254          (e) any transaction under which right to possession, operation, or use of any article of
             255      tangible personal property is granted under a lease or contract and the transfer of possession would
             256      be taxable if an outright sale were made.
             257          (25) (a) "Sales relating to schools" means sales by a public school district or public or
             258      private elementary or secondary school, grades kindergarten through 12, that are directly related
             259      to the school's or school district's educational functions or activities and include:
             260          (i) the sale of textbooks, textbook fees, laboratory fees, laboratory supplies, and safety
             261      equipment;
             262          (ii) the sale of clothing that:
             263          (A) a student is specifically required to wear as a condition of participation in a
             264      school-related event or activity; and
             265          (B) is not readily adaptable to general or continued usage to the extent that it takes the
             266      place of ordinary clothing;
             267          (iii) sales of food if the net or gross revenues generated by the food sales are deposited into
             268      a school district fund or school fund dedicated to school meals; and
             269          (iv) transportation charges for official school activities.
             270          (b) "Sales relating to schools" does not include:
             271          (i) gate receipts;
             272          (ii) special event admission fees;
             273          (iii) bookstore sales of items that are not educational materials or supplies; and
             274          (iv) except as provided in Subsection (25)(a)(ii), clothing.
             275          (26) "Senior citizen center" means a facility having the primary purpose of providing


             276      services to the aged as defined in Section 62A-3-101 .
             277          (27) "State" means the state of Utah, its departments, and agencies.
             278          (28) "Storage" means any keeping or retention of tangible personal property or any other
             279      taxable transaction under Subsection 59-12-103 (1), in this state for any purpose except sale in the
             280      regular course of business.
             281          (29) (a) "Tangible personal property" means:
             282          (i) all goods, wares, merchandise, produce, and commodities;
             283          (ii) all tangible or corporeal things and substances which are dealt in or capable of being
             284      possessed or exchanged;
             285          (iii) water in bottles, tanks, or other containers; and
             286          (iv) all other physically existing articles or things, including property severed from real
             287      estate.
             288          (b) "Tangible personal property" does not include:
             289          (i) real estate or any interest or improvements in real estate;
             290          (ii) bank accounts, stocks, bonds, mortgages, notes, and other evidence of debt;
             291          (iii) insurance certificates or policies;
             292          (iv) personal or governmental licenses;
             293          (v) water in pipes, conduits, ditches, or reservoirs;
             294          (vi) currency and coinage constituting legal tender of the United States or of a foreign
             295      nation; and
             296          (vii) all gold, silver, or platinum ingots, bars, medallions, or decorative coins, not
             297      constituting legal tender of any nation, with a gold, silver, or platinum content of not less than
             298      80%.
             299          (30) (a) "Telephone corporation" means a corporation that:
             300          (i) owns, controls, operates, or manages a telephone service; and
             301          (ii) engages in an activity described in Subsection (30)(a)(i) for the shared use with or
             302      resale to any person of the telephone service.
             303          (b) A corporation described in Subsection (30)(a) is a telephone corporation whether or
             304      not the Public Service Commission of Utah regulates:
             305          (i) the corporation; or
             306          (ii) the telephone service that the corporation owns, controls, operates, or manages.


             307          (c) For purposes of Subsection (30)(a), in accordance with Title 63, Chapter 46a, Utah
             308      Administrative Rulemaking Act, the commission shall define "telephone service."
             309          [(30)] (31) (a) "Use" means the exercise of any right or power over tangible personal
             310      property under Subsection 59-12-103 (1), incident to the ownership or the leasing of that property,
             311      item, or service.
             312          (b) "Use" does not include the sale, display, demonstration, or trial of that property in the
             313      regular course of business and held for resale.
             314          [(31)] (32) "Vehicle" means any aircraft, as defined in Section 72-10-102 ; any vehicle, as
             315      defined in Section 41-1a-102 ; any off-highway vehicle, as defined in Section 41-22-2 ; and any
             316      vessel, as defined in Section 41-1a-102 ; that is required to be titled, registered, or both. "Vehicle"
             317      for purposes of Subsection 59-12-104 (36) only, also includes any locomotive, freight car, railroad
             318      work equipment, or other railroad rolling stock.
             319          [(32)] (33) "Vehicle dealer" means a person engaged in the business of buying, selling, or
             320      exchanging vehicles as defined in Subsection [(31)] (32).
             321          [(33)] (34) (a) "Vendor" means any person receiving any payment or consideration upon
             322      a sale of tangible personal property or any other taxable transaction under Subsection
             323      59-12-103 (1), or to whom the payment or consideration is payable.
             324          (b) "Vendor" does not mean a printer's facility described in Subsection (23)(d).
             325          Section 2. Section 59-12-103 (Effective 07/01/01) is amended to read:
             326           59-12-103 (Effective 07/01/01). Sales and use tax base -- Rate -- Use of sales and use
             327      tax revenues.
             328          (1) A tax is imposed on the purchaser as provided in this part for amounts paid or charged
             329      for the following transactions:
             330          (a) retail sales of tangible personal property made within the state;
             331          (b) amounts paid to common carriers or to telephone corporations or telegraph
             332      corporations, whether the corporations are municipally or privately owned, for:
             333          (i) all transportation;
             334          (ii) intrastate telephone service; or
             335          (iii) telegraph service;
             336          (c) sales of the following for commercial use:
             337          (i) gas;


             338          (ii) electricity;
             339          (iii) heat;
             340          (iv) coal;
             341          (v) fuel oil; or
             342          (vi) other fuels;
             343          (d) sales of the following for residential use:
             344          (i) gas;
             345          (ii) electricity;
             346          (iii) heat;
             347          (iv) coal;
             348          (v) fuel oil; or
             349          (vi) other fuels;
             350          (e) sales of meals;
             351          (f) amounts paid or charged as admission or user fees for theaters, movies, operas,
             352      museums, planetariums, shows of any type or nature, exhibitions, concerts, carnivals, amusement
             353      parks, amusement rides, circuses, menageries, fairs, races, contests, sporting events, dances,
             354      boxing matches, wrestling matches, closed circuit television broadcasts, billiard parlors, pool
             355      parlors, bowling lanes, golf, miniature golf, golf driving ranges, batting cages, skating rinks, ski
             356      lifts, ski runs, ski trails, snowmobile trails, tennis courts, swimming pools, water slides, river runs,
             357      jeep tours, boat tours, scenic cruises, horseback rides, sports activities, or any other amusement,
             358      entertainment, recreation, exhibition, cultural, or athletic activity;
             359          (g) amounts paid or charged for services:
             360          (i) for repairs or renovations of tangible personal property; or
             361          (ii) to install tangible personal property in connection with other tangible personal
             362      property;
             363          (h) except as provided in Subsection 59-12-104 (7), amounts paid or charged for cleaning
             364      or washing of tangible personal property;
             365          (i) amounts paid or charged for tourist home, hotel, motel, or trailer court accommodations
             366      and services for less than 30 consecutive days;
             367          (j) amounts paid or charged for laundry or dry cleaning services;
             368          (k) amounts paid or charged for leases or rentals of tangible personal property if:


             369          (i) the tangible personal property's situs is in this state;
             370          (ii) the lessee took possession of the tangible personal property in this state; or
             371          (iii) within this state the tangible personal property is:
             372          (A) stored;
             373          (B) used; or
             374          (C) otherwise consumed;
             375          (l) amounts paid or charged for tangible personal property if within this state the tangible
             376      personal property is:
             377          (i) stored;
             378          (ii) used; or
             379          (iii) consumed; and
             380          (m) amounts paid or charged for prepaid telephone calling cards.
             381          (2) (a) Except as provided in Subsections (2)(b) and (c), beginning on July 1, 2001, a state
             382      tax and a local tax is imposed on a transaction described in Subsection (1) equal to the sum of:
             383          (i) a state tax imposed on the transaction at a rate of 4.75%; and
             384          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
             385      transaction under this chapter other than this part.
             386          (b) Notwithstanding Subsection (2)(a), beginning on July 1, 2001, a state tax and a local
             387      tax is imposed on a transaction described in Subsection (1)(d) equal to the sum of:
             388          (i) a state tax imposed on the transaction at a rate of 2%; and
             389          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
             390      transaction under this chapter other than this part.
             391          (c) Notwithstanding Subsections (2)(a) and (b), beginning on July 1, 2001, if a vendor
             392      collects a tax under Subsection 59-12-107 (1)(b) on a transaction described in Subsection (1), a
             393      state tax and a local tax is imposed on the transaction equal to the sum of:
             394          (i) a state tax imposed on the transaction at a rate of:
             395          (A) 4.75% for a transaction other than a transaction described in Subsection (1)(d); or
             396          (B) 2% for a transaction described in Subsection (1)(d); and
             397          (ii) except as provided in Subsection (2)(d), a local tax imposed on the transaction at a rate
             398      equal to the sum of the following tax rates:
             399          (A) the lowest tax rate imposed by a county, city, or town under Section 59-12-204 , but


             400      only if all of the counties, cities, and towns in the state impose the tax under Section 59-12-204 ;
             401          (B) the lowest tax rate imposed by a county, city, or town under Section 59-12-205 , but
             402      only if all of the counties, cities, and towns in the state impose the tax under Section 59-12-205 ;
             403      and
             404          (C) the tax rate authorized by Section 59-12-1102 , but only if all of the counties in the
             405      state impose the tax under Section 59-12-1102 .
             406          (d) Tax rates authorized under the following do not apply to Subsection (2)(c)(ii):
             407          (i) Subsection (2)(a)(i);
             408          (ii) Subsection (2)(b)(i);
             409          (iii) Subsection (2)(c)(i);
             410          (iv) Section 59-12-301 ;
             411          (v) Section 59-12-352 ;
             412          (vi) Section 59-12-353 ;
             413          (vii) Section 59-12-401 ;
             414          (viii) Section 59-12-402 ;
             415          (ix) Section 59-12-501 ;
             416          (x) Section 59-12-502 ;
             417          (xi) Section 59-12-603 ;
             418          (xii) Section 59-12-703 ;
             419          (xiii) Section 59-12-802 ;
             420          (xiv) Section 59-12-804 ;
             421          (xv) Section 59-12-1001 ;
             422          (xvi) Section 59-12-1201 ; or
             423          (xvii) Section 59-12-1302 .
             424          (3) (a) Except as provided in Subsections (4) through (9), the state taxes described in
             425      Subsections (2)(a)(i), (2)(b)(i), and (2)(c)(i) shall be deposited into the General Fund.
             426          (b) The local taxes described in Subsections (2)(a)(ii) and (2)(b)(ii) shall be distributed to
             427      a county, city, or town as provided in this chapter.
             428          (c) (i) Notwithstanding any provision of this chapter, each county, city, or town in the state
             429      shall receive the county's, city's, or town's proportionate share of the revenues generated by the
             430      local tax described in Subsection (2)(c)(ii) as provided in Subsection (3)(c)(ii).


             431          (ii) The commission shall determine a county's, city's, or town's proportionate share of the
             432      revenues under Subsection (3)(c)(i) by:
             433          (A) dividing the population of the county, city, or town by the total population of the state;
             434      and
             435          (B) multiplying the percentage determined under Subsection (3)(c)(ii)(A) by the total
             436      amount of revenues generated by the local tax under Subsection (2)(c)(ii) for all counties, cities,
             437      and towns.
             438          (iii) (A) Except as provided in Subsection (3)(c)(iii)(B), population figures for purposes
             439      of this section shall be derived from the most recent official census or census estimate of the
             440      United States Census Bureau.
             441          (B) Notwithstanding Subsection (3)(c)(iii)(A), if a needed population estimate is not
             442      available from the United States Census Bureau, population figures shall be derived from the
             443      estimate from the Utah Population Estimates Committee created by executive order of the
             444      governor.
             445          (C) For purposes of this section, the population of a county may only include the
             446      population of the unincorporated areas of the county.
             447          (4) (a)Notwithstanding Subsection (3)(a), there shall be deposited in an Olympics special
             448      revenue fund or funds as determined by the Division of Finance under Section 51-5-4 , for the use
             449      of the Utah Sports Authority created under Title 63A, Chapter 7, Utah Sports Authority Act:
             450          (i) from January 1, 1990, through December 31, 1999, the amount of sales and use tax
             451      generated by a 1/64% tax rate on the taxable transactions under Subsection (1);
             452          (ii) from January 1, 1990, through June 30, 1999, the amount of revenue generated by a
             453      1/64% tax rate under Section 59-12-204 or Section 59-12-205 on the taxable transactions under
             454      Subsection (1); and
             455          (iii) interest earned on the amounts under Subsections (4)(a)(i) and (ii).
             456          (b) These funds shall be used:
             457          (i) by the Utah Sports Authority as follows:
             458          (A) to the extent funds are available, to transfer directly to a debt service fund or to
             459      otherwise reimburse to the state any amount expended on debt service or any other cost of any
             460      bonds issued by the state to construct any public sports facility as defined in Section 63A-7-103 ;
             461          (B) to pay for the actual and necessary operating, administrative, legal, and other expenses


             462      of the Utah Sports Authority, but not including protocol expenses for seeking and obtaining the
             463      right to host the Winter Olympic Games;
             464          (C) as otherwise appropriated by the Legislature; and
             465          (D) unless the Legislature appropriates additional funds from the Olympics Special
             466      Revenue Fund to the Utah Sports Authority, the Utah Sports Authority may not expend, loan, or
             467      pledge in the aggregate more than:
             468          (I) $59,000,000 of sales and use tax deposited into the Olympics Special Revenue Fund
             469      under Subsection (4)(a);
             470          (II) the interest earned on the amount described in Subsection (4)(b)(i)(D)(I); and
             471          (III) the revenues deposited into the Olympics Special Revenue Fund that are not sales and
             472      use taxes deposited under Subsection (4)(a) or interest on the sales and use taxes;
             473          (ii) to pay salary, benefits, or administrative costs associated with the State Olympic
             474      Officer under Subsection 63A-10-103 (3), except that the salary, benefits, or administrative costs
             475      may not be paid from the sales and use tax revenues generated by municipalities or counties and
             476      deposited under Subsection (4)(a)(ii).
             477          (c) A payment of salary, benefits, or administrative costs under Subsection 63A-10-103 (3)
             478      is not considered an expenditure of the Utah Sports Authority.
             479          (d) If the Legislature appropriates additional funds under Subsection (4)(b)(i)(D), the
             480      authority may not expend, loan, pledge, or enter into any agreement to expend, loan, or pledge the
             481      appropriated funds unless the authority:
             482          (i) contracts in writing for the full reimbursement of the monies to the Olympics Special
             483      Revenue Fund by a public sports entity or other person benefitting from the expenditure; and
             484          (ii) obtains a security interest that secures payment or performance of the obligation to
             485      reimburse.
             486          (e) A contract or agreement entered into in violation of Subsection (4)(d) is void.
             487          (5) (a) Notwithstanding Subsection (3)(a), beginning on July 1, 2001, the amount of sales
             488      and use tax generated annually by a 1/16% tax rate on the taxable transactions under Subsection
             489      (1) shall be used as provided in Subsections (5)(b) through (g).
             490          (b) (i) Beginning on July 1, 2001, $2,300,000 each year shall be transferred as dedicated
             491      credits to the Department of Natural Resources to:
             492          (A) implement the measures described in Subsections 63-34-14 (4)(a) through (d) to protect


             493      sensitive plant and animal species; or
             494          (B) award grants, up to the amount authorized by the Legislature in an appropriations act,
             495      to political subdivisions of the state to implement the measures described in Subsections
             496      63-34-14 (4)(a) through (d) to protect sensitive plant and animal species.
             497          (ii) Money transferred to the Department of Natural Resources under Subsection (5)(b)(i)
             498      may not be used to assist the United States Fish and Wildlife Service or any other person to list or
             499      attempt to have listed a species as threatened or endangered under the Endangered Species Act of
             500      1973, 16 U.S.C. Sec. 1531 et seq.
             501          (iii) At the end of each fiscal year:
             502          (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
             503      Conservation and Development Fund created in Section 73-10-24 ;
             504          (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
             505      Program subaccount created in Section 73-10c-5 ; and
             506          (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
             507      Program subaccount created in Section 73-10c-5 .
             508          (c) Five hundred thousand dollars each year shall be deposited in the Agriculture Resource
             509      Development Fund created in Section 4-18-6 .
             510          (d) (i) One hundred thousand dollars each year shall be transferred as dedicated credits to
             511      the Division of Water Rights to cover the costs incurred in hiring legal and technical staff for the
             512      adjudication of water rights.
             513          (ii) At the end of each fiscal year:
             514          (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
             515      Conservation and Development Fund created in Section 73-10-24 ;
             516          (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
             517      Program subaccount created in Section 73-10c-5 ; and
             518          (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
             519      Program subaccount created in Section 73-10c-5 .
             520          (e) Fifty percent of the remaining amount generated by the 1/16% tax rate shall be
             521      deposited in the Water Resources Conservation and Development Fund created in Section
             522      73-10-24 for use by the Division of Water Resources. In addition to the uses allowed of the fund
             523      under Section 73-10-24 , the fund may also be used to:


             524          (i) provide a portion of the local cost share, not to exceed in any fiscal year 50% of the
             525      funds made available to the Division of Water Resources under this section, of potential project
             526      features of the Central Utah Project;
             527          (ii) conduct hydrologic and geotechnical investigations by the Department of Natural
             528      Resources in a cooperative effort with other state, federal, or local entities, for the purpose of
             529      quantifying surface and ground water resources and describing the hydrologic systems of an area
             530      in sufficient detail so as to enable local and state resource managers to plan for and accommodate
             531      growth in water use without jeopardizing the resource;
             532          (iii) fund state required dam safety improvements; and
             533          (iv) protect the state's interest in interstate water compact allocations, including the hiring
             534      of technical and legal staff.
             535          (f) Twenty-five percent of the remaining amount generated by the 1/16% tax rate shall be
             536      deposited in the Utah Wastewater Loan Program subaccount created in Section 73-10c-5 for use
             537      by the Water Quality Board to fund wastewater projects as defined in Section 73-10b-2 .
             538          (g) Twenty-five percent of the remaining amount generated by the 1/16% tax rate shall be
             539      deposited in the Drinking Water Loan Program subaccount created in Section 73-10c-5 for use by
             540      the Division of Drinking Water to:
             541          (i) provide for the installation and repair of collection, treatment, storage, and distribution
             542      facilities for any public water system, as defined in Section 19-4-102 ;
             543          (ii) develop underground sources of water, including springs and wells; and
             544          (iii) develop surface water sources.
             545          (6) (a) Notwithstanding Subsection (3)(a), beginning on July 1, 2001, the amount of sales
             546      and use tax generated annually by a 1/16% tax rate on the taxable transactions under Subsection
             547      (1) shall be used as provided in Subsections (6)(b) through (d).
             548          (b) (i) Five hundred thousand dollars each year shall be deposited in the Transportation
             549      Corridor Preservation Revolving Loan Fund created in Section 72-2-117 .
             550          (ii) At least 50% of the money deposited in the Transportation Corridor Preservation
             551      Revolving Loan Fund under Subsection (6)(b)(i) shall be used to fund loan applications made by
             552      the Department of Transportation at the request of local governments.
             553          (c) From July 1, 1997, through June 30, 2006, $500,000 each year shall be transferred as
             554      nonlapsing dedicated credits to the Department of Transportation for the State Park Access


             555      Highways Improvement Program created in Section 72-3-207 .
             556          (d) The remaining amount generated by the 1/16% tax rate shall be deposited in the class
             557      B and class C roads account to be expended as provided in Title 72, Chapter 2, Transportation
             558      Finances Act, for the use of class B and C roads.
             559          (7) (a) Notwithstanding Subsection (3)(a), beginning on January 1, 2000, the Division of
             560      Finance shall deposit into the Centennial Highway Fund created in Section 72-2-118 a portion of
             561      the state sales and use tax under Subsection (2) equal to the revenues generated by a 1/64% tax rate
             562      on the taxable transactions under Subsection (1).
             563          (b) Except for sales and use taxes deposited under Subsection (8), beginning on July 1,
             564      1999, the revenues generated by the 1/64% tax rate:
             565          (i) retained under Subsection 59-12-204 (7)(a) shall be retained by the counties, cities, or
             566      towns as provided in Section 59-12-204 ; and
             567          (ii) retained under Subsection 59-12-205 (4)(a) shall be distributed to each county, city, and
             568      town as provided in Section 59-12-205 .
             569          (8) Notwithstanding Subsection (3)(a), beginning on July 1, 1999, the commission shall
             570      deposit into the Airport to University of Utah Light Rail Restricted Account created in Section
             571      17A-2-1064 the portion of the sales and use tax under Sections 59-12-204 and 59-12-205 that is:
             572          (a) generated by a city or town that will have constructed within its boundaries the Airport
             573      to University of Utah Light Rail described in the Transportation Equity Act for the 21st Century,
             574      Pub. L. No. 105-178, Sec. 3030(c)(2)(B)(i)(II), 112 Stat. 107; and
             575          (b) equal to the revenues generated by a 1/64% tax rate on the taxable items and services
             576      under Subsection (1).
             577          (9) (a) Notwithstanding Subsection (3)(a), for fiscal years beginning on or after fiscal year
             578      2002-03, the commission shall on or before September 30 of each year deposit the difference
             579      described in Subsection (9)(b) into the Remote Sales Restricted Account created in Section
             580      59-12-103.2 if that difference is greater than $0.
             581          (b) The difference described in Subsection (9)(a) is equal to the difference between:
             582          (i) the total amount of revenues the commission received from vendors collecting a tax
             583      under Subsection 59-12-107(1)(b) for the previous fiscal year; and
             584          (ii) the total amount of revenues the commission received from vendors collecting a tax
             585      under Subsection 59-12-107(1)(b) for fiscal year 2000-01.


             586          (10) (a) For purposes of amounts paid or charged as admission or user fees relating to the
             587      Olympic Winter Games of 2002, the amounts are considered to be paid or charged on the day on
             588      which the Salt Lake Organizing Committee for the Olympic Winter Games of 2002 or a person
             589      designated by the Salt Lake Organizing Committee for the Olympic Winter Games of 2002 sends
             590      a purchaser confirmation of the purchase of an admission or user fee described in Subsection
             591      (1)(f).
             592          (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             593      commission shall make rules defining what constitutes sending a purchaser confirmation under
             594      Subsection (10)(a).
             595          Section 3. Effective date.
             596          This act takes effect on July 1, 2001.




Legislative Review Note
    as of 2-12-01 7:34 AM


A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel


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