H.B. 314

1

AMENDMENTS TO DEDICATED SALES AND
2 USE TAX REVENUE FOR TRANSPORTATION
3 2007 GENERAL SESSION
4 STATE OF UTAH
5 Chief Sponsor: Rebecca D. Lockhart
6 Senate Sponsor: ____________
7
8 LONG TITLE
9 General Description:
10 This bill modifies the Sales and Use Tax Act by amending provisions relating to sales
11 and use tax revenue dedications for transportation.
12 Highlighted Provisions:
13 This bill:
14 . changes the percentage of the sales and use tax revenues dedicated to:
15 . the Centennial Highway Fund Restricted Account; and
16 . the Transportation Investment Fund of 2005 when certain general obligation
17 bonds are paid off; and
18 . makes technical changes.
19 Monies Appropriated in this Bill:
20 None
21 Other Special Clauses:
22 This bill takes effect on July 1, 2007.
23 Utah Code Sections Affected:
24 AMENDS:
25 59-12-103, as last amended by Chapter 9, Laws of Utah 2006, Third Special Session
26
27 Be it enacted by the Legislature of the state of Utah:

28 Section 1. Section 59-12-103 is amended to read:
29 59-12-103. Sales and use tax base -- Rates -- Effective dates -- Use of sales and use
30 tax revenues.
31 (1) A tax is imposed on the purchaser as provided in this part for amounts paid or
32 charged for the following transactions:
33 (a) retail sales of tangible personal property made within the state;
34 (b) amounts paid:
35 (i) (A) to a common carrier; or
36 (B) whether the following are municipally or privately owned, to a:
37 (I) telephone service provider; or
38 (II) telegraph corporation as defined in Section 54-2-1 ; and
39 (ii) for:
40 (A) telephone service, other than mobile telecommunications service, that originates
41 and terminates within the boundaries of this state;
42 (B) mobile telecommunications service that originates and terminates within the
43 boundaries of one state only to the extent permitted by the Mobile Telecommunications
44 Sourcing Act, 4 U.S.C. Sec. 116 et seq.; or
45 (C) telegraph service;
46 (c) sales of the following for commercial use:
47 (i) gas;
48 (ii) electricity;
49 (iii) heat;
50 (iv) coal;
51 (v) fuel oil; or
52 (vi) other fuels;
53 (d) sales of the following for residential use:
54 (i) gas;
55 (ii) electricity;
56 (iii) heat;
57 (iv) coal;
58 (v) fuel oil; or

59 (vi) other fuels;
60 (e) sales of prepared food;
61 (f) except as provided in Section 59-12-104 , amounts paid or charged as admission or
62 user fees for theaters, movies, operas, museums, planetariums, shows of any type or nature,
63 exhibitions, concerts, carnivals, amusement parks, amusement rides, circuses, menageries,
64 fairs, races, contests, sporting events, dances, boxing matches, wrestling matches, closed circuit
65 television broadcasts, billiard parlors, pool parlors, bowling lanes, golf, miniature golf, golf
66 driving ranges, batting cages, skating rinks, ski lifts, ski runs, ski trails, snowmobile trails,
67 tennis courts, swimming pools, water slides, river runs, jeep tours, boat tours, scenic cruises,
68 horseback rides, sports activities, or any other amusement, entertainment, recreation,
69 exhibition, cultural, or athletic activity;
70 (g) amounts paid or charged for services for repairs or renovations of tangible personal
71 property, unless Section 59-12-104 provides for an exemption from sales and use tax for:
72 (i) the tangible personal property; and
73 (ii) parts used in the repairs or renovations of the tangible personal property described
74 in Subsection (1)(g)(i), whether or not any parts are actually used in the repairs or renovations
75 of that tangible personal property;
76 (h) except as provided in Subsection 59-12-104 (7), amounts paid or charged for
77 assisted cleaning or washing of tangible personal property;
78 (i) amounts paid or charged for tourist home, hotel, motel, or trailer court
79 accommodations and services that are regularly rented for less than 30 consecutive days;
80 (j) amounts paid or charged for laundry or dry cleaning services;
81 (k) amounts paid or charged for leases or rentals of tangible personal property if within
82 this state the tangible personal property is:
83 (i) stored;
84 (ii) used; or
85 (iii) otherwise consumed;
86 (l) amounts paid or charged for tangible personal property if within this state the
87 tangible personal property is:
88 (i) stored;
89 (ii) used; or

90 (iii) consumed; and
91 (m) amounts paid or charged for prepaid telephone calling cards.
92 (2) (a) Except as provided in Subsection (2)(b) or (f), a state tax and a local tax is
93 imposed on a transaction described in Subsection (1) equal to the sum of:
94 (i) a state tax imposed on the transaction at a rate of 4.75%; and
95 (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
96 transaction under this chapter other than this part.
97 (b) (i) A state tax and a local tax is imposed on a transaction described in Subsection
98 (1)(d) equal to the sum of:
99 (A) a state tax imposed on the transaction at a rate of 2%; and
100 (B) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
101 transaction under this chapter other than this part; or
102 (ii) if a seller collects a tax in accordance with Subsection 59-12-107 (1)(b) on a
103 transaction described in Subsection (1), a state tax and a local tax is imposed on the transaction
104 equal to the sum of:
105 (A) a state tax imposed on the transaction at a rate of:
106 (I) 4.75% for a transaction other than a transaction described in Subsection (1)(d); or
107 (II) 2% for a transaction described in Subsection (1)(d); and
108 (B) a local tax imposed on the transaction at a rate equal to the sum of the following
109 rates:
110 (I) the tax rate authorized by Section 59-12-204 , but only if all of the counties, cities,
111 and towns in the state impose the tax under Section 59-12-204 ; and
112 (II) the tax rate authorized by Section 59-12-1102 , but only if all of the counties in the
113 state impose the tax under Section 59-12-1102 .
114 (iii) Except as provided in Subsection (2)(f), beginning on January 1, 2007, a state tax
115 and a local tax is imposed on amounts paid or charged for food and food ingredients equal to
116 the sum of:
117 (A) a state tax imposed on the amounts paid or charged for food and food ingredients
118 at a rate of 2.75%; and
119 (B) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
120 amounts paid or charged for food and food ingredients under this chapter other than this part.

121 (c) Subject to Subsections (2)(d) and (e), a tax rate repeal or tax rate change for a tax
122 rate imposed under the following shall take effect on the first day of a calendar quarter:
123 (i) Subsection (2)(a)(i);
124 (ii) Subsection (2)(b)(i)(A);
125 (iii) Subsection (2)(b)(ii)(A); or
126 (iv) Subsection (2)(b)(iii)(A).
127 (d) (i) For a transaction described in Subsection (2)(d)(iii), a tax rate increase shall take
128 effect on the first day of the first billing period:
129 (A) that begins after the effective date of the tax rate increase; and
130 (B) if the billing period for the transaction begins before the effective date of a tax rate
131 increase imposed under:
132 (I) Subsection (2)(a)(i);
133 (II) Subsection (2)(b)(i)(A); or
134 (III) Subsection (2)(b)(ii)(A).
135 (ii) For a transaction described in Subsection (2)(d)(iii), the repeal of a tax or a tax rate
136 decrease shall take effect on the first day of the last billing period:
137 (A) that began before the effective date of the repeal of the tax or the tax rate decrease;
138 and
139 (B) if the billing period for the transaction begins before the effective date of the repeal
140 of the tax or the tax rate decrease imposed under:
141 (I) Subsection (2)(a)(i);
142 (II) Subsection (2)(b)(i)(A); or
143 (III) Subsection (2)(b)(ii)(A).
144 (iii) Subsections (2)(d)(i) and (ii) apply to transactions subject to a tax under:
145 (A) Subsection (1)(b);
146 (B) Subsection (1)(c);
147 (C) Subsection (1)(d);
148 (D) Subsection (1)(e);
149 (E) Subsection (1)(f);
150 (F) Subsection (1)(g);
151 (G) Subsection (1)(h);

152 (H) Subsection (1)(i);
153 (I) Subsection (1)(j); or
154 (J) Subsection (1)(k).
155 (e) (i) If a tax due under Subsection (2)(a)(i) or (2)(b)(ii)(A) on a catalogue sale is
156 computed on the basis of sales and use tax rates published in the catalogue, a tax rate repeal or
157 change in a tax rate imposed under Subsection (2)(a)(i) or (2)(b)(ii)(A) takes effect:
158 (A) on the first day of a calendar quarter; and
159 (B) beginning 60 days after the effective date of the tax rate repeal or tax rate change
160 under Subsection (2)(a)(i) or (2)(b)(ii)(A).
161 (ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
162 the commission may by rule define the term "catalogue sale."
163 (f) If the price of a bundled transaction is attributable to food and food ingredients and
164 tangible personal property other than food and food ingredients, the tax imposed on the entire
165 bundled transaction is the sum of the tax rates described in Subsection (2)(a).
166 (3) (a) Except as provided in Subsections (4) through (9), the following state taxes
167 shall be deposited into the General Fund:
168 (i) the tax imposed by Subsection (2)(a)(i);
169 (ii) the tax imposed by Subsection (2)(b)(i)(A);
170 (iii) the tax imposed by Subsection (2)(b)(ii)(A); or
171 (iv) the tax imposed by Subsection (2)(b)(iii)(A).
172 (b) The local taxes described in Subsections (2)(a)(ii), (2)(b)(i)(B), and (2)(b)(iii)(B)
173 shall be distributed to a county, city, or town as provided in this chapter.
174 (c) (i) Notwithstanding any provision of this chapter, each county, city, or town in the
175 state shall receive the county's, city's, or town's proportionate share of the revenues generated
176 by the local tax described in Subsection (2)(b)(ii)(B) as provided in Subsection (3)(c)(ii).
177 (ii) The commission shall determine a county's, city's, or town's proportionate share of
178 the revenues under Subsection (3)(c)(i) by:
179 (A) calculating an amount equal to the population of the unincorporated area of the
180 county, city, or town divided by the total population of the state; and
181 (B) multiplying the amount determined under Subsection (3)(c)(ii)(A) by the total
182 amount of revenues generated by the local tax under Subsection (2)(b)(ii)(B) for all counties,

183 cities, and towns.
184 (iii) (A) Except as provided in Subsection (3)(c)(iii)(B), population figures for
185 purposes of this section shall be derived from the most recent official census or census estimate
186 of the United States Census Bureau.
187 (B) If a needed population estimate is not available from the United States Census
188 Bureau, population figures shall be derived from the estimate from the Utah Population
189 Estimates Committee created by executive order of the governor.
190 (4) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
191 2003, the lesser of the following amounts shall be used as provided in Subsections (4)(b)
192 through (g):
193 (i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:
194 (A) by a 1/16% tax rate on the transactions described in Subsection (1); and
195 (B) for the fiscal year; or
196 (ii) $17,500,000.
197 (b) (i) For a fiscal year beginning on or after July 1, 2003, 14% of the amount
198 described in Subsection (4)(a) shall be transferred each year as dedicated credits to the
199 Department of Natural Resources to:
200 (A) implement the measures described in Subsections 63-34-14 (4)(a) through (d) to
201 protect sensitive plant and animal species; or
202 (B) award grants, up to the amount authorized by the Legislature in an appropriations
203 act, to political subdivisions of the state to implement the measures described in Subsections
204 63-34-14 (4)(a) through (d) to protect sensitive plant and animal species.
205 (ii) Money transferred to the Department of Natural Resources under Subsection
206 (4)(b)(i) may not be used to assist the United States Fish and Wildlife Service or any other
207 person to list or attempt to have listed a species as threatened or endangered under the
208 Endangered Species Act of 1973, 16 U.S.C. Sec. 1531 et seq.
209 (iii) At the end of each fiscal year:
210 (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
211 Conservation and Development Fund created in Section 73-10-24 ;
212 (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
213 Program Subaccount created in Section 73-10c-5 ; and

214 (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
215 Program Subaccount created in Section 73-10c-5 .
216 (c) For a fiscal year beginning on or after July 1, 2003, 3% of the amount described in
217 Subsection (4)(a) shall be deposited each year in the Agriculture Resource Development Fund
218 created in Section 4-18-6 .
219 (d) (i) For a fiscal year beginning on or after July 1, 2003, 1% of the amount described
220 in Subsection (4)(a) shall be transferred each year as dedicated credits to the Division of Water
221 Rights to cover the costs incurred in hiring legal and technical staff for the adjudication of
222 water rights.
223 (ii) At the end of each fiscal year:
224 (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
225 Conservation and Development Fund created in Section 73-10-24 ;
226 (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
227 Program Subaccount created in Section 73-10c-5 ; and
228 (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
229 Program Subaccount created in Section 73-10c-5 .
230 (e) (i) For a fiscal year beginning on or after July 1, 2003, 41% of the amount described
231 in Subsection (4)(a) shall be deposited in the Water Resources Conservation and Development
232 Fund created in Section 73-10-24 for use by the Division of Water Resources.
233 (ii) In addition to the uses allowed of the Water Resources Conservation and
234 Development Fund under Section 73-10-24 , the Water Resources Conservation and
235 Development Fund may also be used to:
236 (A) conduct hydrologic and geotechnical investigations by the Division of Water
237 Resources in a cooperative effort with other state, federal, or local entities, for the purpose of
238 quantifying surface and ground water resources and describing the hydrologic systems of an
239 area in sufficient detail so as to enable local and state resource managers to plan for and
240 accommodate growth in water use without jeopardizing the resource;
241 (B) fund state required dam safety improvements; and
242 (C) protect the state's interest in interstate water compact allocations, including the
243 hiring of technical and legal staff.
244 (f) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount described

245 in Subsection (4)(a) shall be deposited in the Utah Wastewater Loan Program Subaccount
246 created in Section 73-10c-5 for use by the Water Quality Board to fund wastewater projects.
247 (g) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount described
248 in Subsection (4)(a) shall be deposited in the Drinking Water Loan Program Subaccount
249 created in Section 73-10c-5 for use by the Division of Drinking Water to:
250 (i) provide for the installation and repair of collection, treatment, storage, and
251 distribution facilities for any public water system, as defined in Section 19-4-102 ;
252 (ii) develop underground sources of water, including springs and wells; and
253 (iii) develop surface water sources.
254 (5) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
255 2006, the difference between the following amounts shall be expended as provided in this
256 Subsection (5), if that difference is greater than $1:
257 (i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated for the
258 fiscal year by a 1/16% tax rate on the transactions described in Subsection (1); and
259 (ii) $17,500,000.
260 (b) (i) The first $500,000 of the difference described in Subsection (5)(a) shall be:
261 (A) transferred each fiscal year to the Department of Natural Resources as dedicated
262 credits; and
263 (B) expended by the Department of Natural Resources for watershed rehabilitation or
264 restoration.
265 (ii) At the end of each fiscal year, 100% of any unexpended dedicated credits described
266 in Subsection (5)(b)(i) shall lapse to the Water Resources Conservation and Development Fund
267 created in Section 73-10-24 .
268 (c) (i) After making the transfer required by Subsection (5)(b)(i), $150,000 of the
269 remaining difference described in Subsection (5)(a) shall be:
270 (A) transferred each fiscal year to the Division of Water Resources as dedicated
271 credits; and
272 (B) expended by the Division of Water Resources for cloud-seeding projects
273 authorized by Title 73, Chapter 15, Modification of Weather.
274 (ii) At the end of each fiscal year, 100% of any unexpended dedicated credits described
275 in Subsection (5)(c)(i) shall lapse to the Water Resources Conservation and Development Fund

276 created in Section 73-10-24 .
277 (d) After making the transfers required by Subsections (5)(b) and (c), 94% of the
278 remaining difference described in Subsection (5)(a) shall be deposited into the Water
279 Resources Conservation and Development Fund created in Section 73-10-24 for use by the
280 Division of Water Resources for:
281 (i) preconstruction costs:
282 (A) as defined in Subsection 73-26-103 (6) for projects authorized by Title 73, Chapter
283 26, Bear River Development Act; and
284 (B) as defined in Subsection 73-28-103 (8) for the Lake Powell Pipeline project
285 authorized by Title 73, Chapter 28, Lake Powell Pipeline Development Act;
286 (ii) the cost of employing a civil engineer to oversee any project authorized by Title 73,
287 Chapter 26, Bear River Development Act;
288 (iii) the cost of employing a civil engineer to oversee the Lake Powell Pipeline project
289 authorized by Title 73, Chapter 28, Lake Powell Pipeline Development Act; and
290 (iv) other uses authorized under Sections 73-10-24 , 73-10-25.1 , 73-10-30 , and
291 Subsection (4)(e)(ii) after funding the uses specified in Subsections (5)(d)(i) through (iii).
292 (e) Any unexpended monies described in Subsection (5)(d) that remain in the Water
293 Resources Conservation and Development Fund at the end of the fiscal year are nonlapsing.
294 (f) After making the transfers required by Subsections (5)(b) and (c) and subject to
295 Subsection (5)(g), 6% of the remaining difference described in Subsection (5)(a) shall be
296 transferred each year as dedicated credits to the Division of Water Rights to cover the costs
297 incurred for employing additional technical staff for the administration of water rights.
298 (g) At the end of each fiscal year, any unexpended dedicated credits described in
299 Subsection (5)(f) over $150,000 lapse to the Water Resources Conservation and Development
300 Fund created in Section 73-10-24 .
301 (6) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
302 2003, the lesser of the following amounts shall be used as provided in Subsections (6)(b)
303 through (d):
304 (i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:
305 (A) by a 1/16% tax rate on the transactions described in Subsection (1); and
306 (B) for the fiscal year; or

307 (ii) $18,743,000.
308 (b) (i) For a fiscal year beginning on or after July 1, 2003, 3% of the amount described
309 in Subsection (6)(a) shall be deposited each year in the Transportation Corridor Preservation
310 Revolving Loan Fund created in Section 72-2-117 .
311 (ii) At least 50% of the money deposited in the Transportation Corridor Preservation
312 Revolving Loan Fund under Subsection (6)(b)(i) shall be used to fund loan applications made
313 by the Department of Transportation at the request of local governments.
314 (c) For a fiscal year beginning on or after July 1, 2003, 3% of the amount described in
315 Subsection (6)(a) shall be transferred each year as nonlapsing dedicated credits to the
316 Department of Transportation for the State Park Access Highways Improvement Program
317 created in Section 72-3-207 .
318 (d) For a fiscal year beginning on or after July 1, 2003, 94% of the amount described in
319 Subsection (6)(a) shall be deposited in the class B and class C roads account to be expended as
320 provided in Title 72, Chapter 2, Transportation Finances Act, for the use of class B and C
321 roads.
322 (7) (a) Notwithstanding Subsection (3)(a) and until Subsection (7)(b) applies,
323 beginning on January 1, 2000, the Division of Finance shall deposit into the Centennial
324 Highway Fund Restricted Account created in Section 72-2-118 a portion of the taxes listed
325 under Subsection (3)(a) equal to the revenues generated by a 1/64% tax rate on the taxable
326 transactions under Subsection (1).
327 (b) Notwithstanding Subsection (3)(a), when the highway general obligation bonds
328 have been paid off and the highway projects completed that are intended to be paid from
329 revenues deposited in the Centennial Highway Fund Restricted Account as determined by the
330 Executive Appropriations Committee under Subsection 72-2-118 (6)(d), the Division of
331 Finance shall deposit into the Transportation Investment Fund of 2005 created by Section
332 72-2-124 a portion of the taxes listed under Subsection (3)(a) equal to the revenues generated
333 by a 1/64% tax rate on the taxable transactions under Subsection (1).
334 (8) (a) Notwithstanding Subsection (3)(a), for fiscal years beginning on or after fiscal
335 year 2004-05, the commission shall each year on or before the September 30 immediately
336 following the last day of the fiscal year deposit the difference described in Subsection (8)(b)
337 into the Remote Sales Restricted Account created in Section 59-12-103.2 if that difference is

338 greater than $0.
339 (b) The difference described in Subsection (8)(a) is equal to the difference between:
340 (i) the total amount of the revenues under Subsections (2)(b)(ii)(A) and (2)(b)(iii)(A)
341 the commission received from sellers collecting a tax in accordance with Subsection
342 59-12-107 (1)(b) for the fiscal year immediately preceding the September 30 described in
343 Subsection (8)(a); and
344 (ii) $7,279,673.
345 (9) (a) Notwithstanding Subsection (3)(a), in addition to the amount deposited in
346 Subsection (7)(a), and until Subsection (9)(b) applies, for a fiscal year beginning on or after
347 July 1, 2006, the Division of Finance shall deposit into the Centennial Highway Fund
348 Restricted Account created by Section 72-2-118 a portion of the taxes listed under Subsection
349 (3)(a) equal to [8.3%] 17% of the revenues collected from the taxes described in Subsections
350 (2)(a)(i), (2)(b)(i)(A), and (2)(b)(iii)(A), which represents [a portion of] the [approximately
351 17% of] sales and use tax revenues generated annually by the sales and use tax on vehicles and
352 vehicle-related products.
353 (b) Notwithstanding Subsection (3)(a) and in addition to the amounts deposited under
354 Subsection (7)(b), when the highway general obligation bonds have been paid off and the
355 highway projects completed that are intended to be paid from revenues deposited in the
356 Centennial Highway Fund Restricted Account as determined by the Executive Appropriations
357 Committee under Subsection 72-2-118 (6)(d), the Division of Finance shall deposit into the
358 Transportation Investment Fund of 2005 created by Section 72-2-124 a portion of the taxes
359 listed under Subsection (3)(a) equal to [8.3%] 17% of the revenues collected from the taxes
360 described in Subsections (2)(a)(i), (2)(b)(i)(A), and (2)(b)(iii)(A), which represents [a portion
361 of] the [approximately 17% of] sales and use tax revenues generated annually by the sales and
362 use tax on vehicles and vehicle-related products.
363 Section 2. Effective date.
364 This bill takes effect on July 1, 2007.

Legislative Review Note
as of 1-17-07 12:14 PM

Office of Legislative Research and General Counsel