Download Zipped Enrolled WordPerfect SB0223.ZIP
[Introduced][Amended][Status][Bill Documents][Fiscal Note][Bills Directory]

S.B. 223 Enrolled

             1     

TAX AMENDMENTS

             2     
2007 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Wayne L. Niederhauser

             5     
House Sponsor: John Dougall

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill amends the Revenue and Taxation title and the Rural Health Services chapter.
             10      Highlighted Provisions:
             11          This bill:
             12          .    modifies the membership of the Utah Tax Review Commission to include the chairs
             13      of the Revenue and Taxation Interim Committee;
             14          .    repeals a repeal date for tax credits for research activities in the state;
             15          .    increases the percentage of expenses or payments that serve as the basis for
             16      calculating tax credits for research activities in the state;
             17          .    provides a nonrefundable tax credit equal to 5% of a taxpayer's qualified research
             18      expenses for the current taxable year in addition to other tax credits for research
             19      activities in the state allowed under current statute;
             20          .    provides that the tax credits for qualified research expenses may not be carried
             21      forward;
             22          .    requires a review of the tax credits for research activities in the state by the Utah
             23      Tax Review Commission;
             24          .    extends the availability of the renewable energy tax credit;
             25          .    provides for the Utah Tax Review Commission to review the renewable energy tax
             26      credit;
             27          .    expands the renewable energy tax credit to include some geothermal sources;
             28          .    makes the renewable energy tax credit on commercial energy systems a refundable
             29      tax credit;


             30          .    changes the calculation of the tax credit for commercial energy systems;
             31          .    removes language reimbursing the Uniform School Fund for renewable energy tax
             32      credits taken;
             33          .    provides that a tax under the Individual Income Tax Act that is imposed on the basis
             34      of graduated brackets and rates may not be imposed for taxable years beginning on
             35      or after January 1, 2008;
             36          .    provides and modifies definitions;
             37          .    reduces the single rate individual income tax rate from 5.35% to 5%;
             38          .    enacts a nonrefundable tax credit under the Single Rate Individual Income Tax Act
             39      allowed on the basis of:
             40              .    the deductions a person claims ; and
             41              .    personal exemptions;
             42          .    enacts nonrefundable retirement tax credits under the Single Rate Individual Income
             43      Tax Act;
             44          .    phases out the above nonrefundable tax credits under the Single Rate Individual
             45      Income Tax Act at certain income levels;
             46          .    requires the apportionment of the above nonrefundable tax credits under the Single
             47      Rate Individual Income Tax Act for a nonresident individual or part-year resident
             48      individual;
             49          .    modifies the definition of "prosthetic device," the sale of which is exempt from
             50      sales and use taxation, to include a dental prosthesis;
             51          .    reduces the state sales and use tax rate from 4.75% to 4.65%;
             52          .    reduces the state sales and use tax rate imposed on food and food ingredients,
             53      except with respect to certain bundled transactions;
             54          .    provides a sales and use tax exemption for certain machinery, equipment, or repair
             55      or replacement parts purchased or leased by certain establishments relating to
             56      mining that are listed under the North American Industry Classification System;
             57          .    modifies State Tax Commission rulemaking authority;


             58          .    authorizes certain counties, cities, or towns to increase certain tax rates from .25%
             59      to .30% and exempts those tax rate increases from voter approval requirements;
             60          .    provides that food and food ingredients are not subject to certain local sales and use
             61      taxes, except with respect to certain bundled transactions;
             62          .    addresses State Tax Commission notice requirements to enact, repeal, or change the
             63      tax rate of certain local sales and use taxes;
             64          .    creates a restricted special revenue fund to distribute monies to fund rural health
             65      care facilities and services that are impacted by providing that food and food
             66      ingredients are not generally subject to local sales and use taxes for rural health care
             67      facilities and services, including:
             68              .    addressing the distribution and expenditure of fund revenues; and
             69              .    providing that unexpended monies remaining in the fund at the end of a fiscal
             70      year lapse into the General Fund;
             71          .    requires the State Tax Commission to provide data to the executive director of the
             72      Department of Health;
             73          .    increases the maximum tax rate for the resort communities local sales and use tax
             74      from 1% to 1.1%;
             75          .    enacts an additional state sales and use tax and provides that the revenues collected
             76      from the tax shall be deposited into the General Fund;
             77          .    provides a nonrefundable tax credit under the Multi-Channel Video or Audio
             78      Service Tax Act for a multi-channel video or audio service provider;
             79          .    requires a multi-channel video or audio service provider to pass through an amount
             80      equal to the tax credit to purchasers located within the state;
             81          .    provides that a tax on amounts paid or charged for multi-channel video or audio
             82      service may not be reduced as a result of the amount a multi-channel video or audio
             83      service provider passes through to its customers within the state;
             84          .    requires a Revenue and Taxation Interim Committee study on repealing the state
             85      individual income tax imposed on the basis of graduated brackets and rates; and


             86          .    makes technical changes.
             87      Monies Appropriated in this Bill:
             88          This bill appropriates:
             89          .    for fiscal year 2007-08 only, $277,500 from the General Fund to the Rural Health
             90      Care Facilities Fund; and
             91          .    as an ongoing appropriation subject to future budget constraints, $555,000 from the
             92      General Fund for fiscal year 2008-09 to the Rural Health Care Facilities Fund.
             93      Other Special Clauses:
             94          This bill provides effective dates and provides for retrospective operation.
             95          This bill provides revisor instructions.
             96          This bill coordinates with H.B. 27, Sales and Use Tax Modifications, by merging
             97      substantive amendments.
             98      Utah Code Sections Affected:
             99      AMENDS:
             100          59-1-210, as last amended by Chapter 271, Laws of Utah 1995
             101          59-1-901, as last amended by Chapter 243, Laws of Utah 1996
             102          59-7-612, as last amended by Chapter 9, Laws of Utah 2001
             103          59-10-104, as last amended by Chapter 2, Laws of Utah 2006, Fourth Special Session
             104          59-10-1012, as renumbered and amended by Chapter 223, Laws of Utah 2006
             105          59-10-1014, as renumbered and amended by Chapter 223, Laws of Utah 2006
             106          59-10-1202, as enacted by Chapter 2, Laws of Utah 2006, Fourth Special Session
             107          59-10-1203, as enacted by Chapter 2, Laws of Utah 2006, Fourth Special Session
             108          59-12-102, as last amended by Chapter 1, Laws of Utah 2006, Fourth Special Session
             109          59-12-103, as last amended by Chapter 9, Laws of Utah 2006, Third Special Session
             110          59-12-104, as last amended by Chapters 181, 182, 217, 218, 219, 220, 246, 268 and
             111      346, Laws of Utah 2006
             112          59-12-401, as last amended by Chapter 253, Laws of Utah 2006
             113          59-12-402, as last amended by Chapter 253, Laws of Utah 2006


             114          59-12-403, as last amended by Chapter 253, Laws of Utah 2006
             115          59-12-501, as last amended by Chapter 253, Laws of Utah 2006
             116          59-12-502, as last amended by Chapters 253 and 329, Laws of Utah 2006
             117          59-12-504, as last amended by Chapter 253, Laws of Utah 2006
             118          59-12-703, as last amended by Chapter 253, Laws of Utah 2006
             119          59-12-802, as last amended by Chapters 253 and 302, Laws of Utah 2006
             120          59-12-804, as last amended by Chapter 253, Laws of Utah 2006
             121          59-12-1001, as last amended by Chapter 253, Laws of Utah 2006
             122          59-12-1302, as last amended by Chapter 253, Laws of Utah 2006
             123          59-12-1402, as last amended by Chapter 253, Laws of Utah 2006
             124          59-12-1503, as last amended by Chapter 253, Laws of Utah 2006
             125          59-12-1703, as enacted by Chapter 1, Laws of Utah 2006, Fourth Special Session
             126          59-26-102, as enacted by Chapter 300, Laws of Utah 2004
             127          59-26-103, as enacted by Chapter 300, Laws of Utah 2004
             128      ENACTS:
             129          26-9-4, Utah Code Annotated 1953
             130          59-10-1106, Utah Code Annotated 1953
             131          59-10-1206.1, Utah Code Annotated 1953
             132          59-10-1206.2, Utah Code Annotated 1953
             133          59-10-1206.9, Utah Code Annotated 1953
             134          59-12-1801, Utah Code Annotated 1953
             135          59-12-1802, Utah Code Annotated 1953
             136          59-12-1803, Utah Code Annotated 1953
             137          59-26-104.5, Utah Code Annotated 1953
             138      REPEALS AND REENACTS:
             139          59-7-614, as last amended by Chapter 223, Laws of Utah 2006
             140      Uncodified Material Affected:
             141      ENACTS UNCODIFIED MATERIAL


             142     
             143      Be it enacted by the Legislature of the state of Utah:
             144          Section 1. Section 26-9-4 is enacted to read:
             145          26-9-4. Rural Health Care Facilities Fund -- Source of revenues -- Interest --
             146      Distribution of revenues -- Expenditure of revenues -- Unexpended revenues lapse into
             147      the General Fund.
             148          (1) As used in this section:
             149          (a) "Emergency medical services" is as defined in Section 26-8a-102 .
             150          (b) "Federally qualified health center" is as defined in 42 U.S.C. Sec. 1395x.
             151          (c) "Fiscal year" means a one-year period beginning on July 1 of each year.
             152          (d) "Freestanding urgent care center" is as defined in Section 59-12-801 .
             153          (e) "Fund" means the Rural Health Care Facilities Fund created by this section.
             154          (f) "Nursing care facility" is as defined in Section 26-21-2 .
             155          (g) "Rural city hospital" is as defined in Section 59-12-801 .
             156          (h) "Rural county health care facility" is as defined in Section 59-12-801 .
             157          (i) "Rural county hospital" is as defined in Section 59-12-801 .
             158          (j) "Rural county nursing care facility" is as defined in Section 59-12-801 .
             159          (k) "Rural emergency medical services" is as defined in Section 59-12-801 .
             160          (l) "Rural health clinic" is as defined in 42 U.S.C. Sec. 1395x.
             161          (2) There is created a restricted special revenue fund known as the Rural Health Care
             162      Facilities Fund.
             163          (3) (a) The fund shall be funded by amounts appropriated by the Legislature.
             164          (b) Any interest earned on the fund shall be deposited into the General Fund.
             165          (4) Subject to Subsection (5), the executive director shall for a fiscal year distribute
             166      monies deposited into the fund to each:
             167          (a) county legislative body of a county that, on January 1, 2007, imposes a tax in
             168      accordance with Section 59-12-802 ; or
             169          (b) city legislative body of a city that, on January 1, 2007, imposes a tax in accordance


             170      with Section 59-12-804 .
             171          (5) (a) For purposes of the distribution required by Subsection (4), the executive
             172      director shall:
             173          (i) estimate for each county and city described in Subsection (4) the amount by which
             174      the revenues collected from the taxes imposed under Sections 59-12-802 and 59-12-804 for
             175      fiscal year 2005-06 would have been reduced had:
             176          (A) the amendments made by this bill to Sections 59-12-802 and 59-12-804 been in
             177      effect for fiscal year 2005-06; and
             178          (B) each county and city described in Subsection (4) imposed the tax under Sections
             179      59-12-802 and 59-12-804 for the entire fiscal year 2005-06;
             180          (ii) calculate a percentage for each county and city described in Subsection (4) by
             181      dividing the amount estimated for each county and city in accordance with Subsection (5)(a)(i)
             182      by $555,000; and
             183          (iii) distribute to each county and city described in Subsection (4) an amount equal to
             184      the product of:
             185          (A) the percentage calculated in accordance with Subsection (5)(a)(ii); and
             186          (B) the amount appropriated by the Legislature to the fund for the fiscal year.
             187          (b) The executive director shall make the estimations, calculations, and distributions
             188      required by Subsection (5)(a) on the basis of data provided to the executive director by the
             189      State Tax Commission.
             190          (6) (a) Subject to Subsection (6)(b), a county legislative body shall distribute the
             191      monies the county legislative body receives in accordance with Subsection (5):
             192          (i) for a county of the third, fourth, or fifth class, to fund rural county health care
             193      facilities in that county; and
             194          (ii) for a county of the sixth class, to fund:
             195          (A) emergency medical services in that county;
             196          (B) federally qualified health centers in that county;
             197          (C) freestanding urgent care centers in that county;


             198          (D) rural county health care facilities in that county;
             199          (E) rural health clinics in that county; or
             200          (F) a combination of Subsections (6)(a)(ii)(A) through (E).
             201          (b) A county legislative body shall distribute a percentage of the monies the county
             202      legislative body receives in accordance with Subsection (5) to each center, clinic, facility, or
             203      service described in Subsection (6)(a) equal to the same percentage that the county legislative
             204      body distributes to that center, clinic, facility, or service in accordance with Section 59-12-803
             205      for the calendar year ending on the December 31 immediately preceding the first day of the
             206      fiscal year for which the county legislative body receives the distribution in accordance with
             207      Subsection (5).
             208          (c) A center, clinic, facility, or service that receives a distribution in accordance with
             209      this Subsection (6) shall expend that distribution for the same purposes for which monies
             210      generated by a tax under Section 59-12-802 may be expended.
             211          (7) (a) Subject to Subsection (7)(b), a city legislative body shall distribute the monies
             212      the city legislative body receives in accordance with Subsection (5) to fund rural city hospitals
             213      in that city.
             214          (b) A city legislative body shall distribute a percentage of the monies the city
             215      legislative body receives in accordance with Subsection (5) to each rural city hospital described
             216      in Subsection (7)(a) equal to the same percentage that the city legislative body distributes to
             217      that rural city hospital in accordance with Section 59-12-805 for the calendar year ending on
             218      the December 31 immediately preceding the first day of the fiscal year for which the city
             219      legislative body receives the distribution in accordance with Subsection (5).
             220          (c) A rural city hospital that receives a distribution in accordance with this Subsection
             221      (7) shall expend that distribution for the same purposes for which monies generated by a tax
             222      under Section 59-12-804 may be expended.
             223          (8) Any monies remaining in the Rural Health Care Facilities Fund at the end of a
             224      fiscal year after the executive director makes the distributions required by this section shall
             225      lapse into the General Fund.


             226          Section 2. Section 59-1-210 is amended to read:
             227           59-1-210. General powers and duties.
             228          The powers and duties of the commission are as follows:
             229          (1) to sue and be sued in its own name;
             230          (2) to adopt rules and policies consistent with the Constitution and laws of this state to
             231      govern the commission, executive director, division directors, and commission employees in
             232      the performance of their duties;
             233          (3) to adopt rules and policies consistent with the Constitution and laws of the state, to
             234      govern county boards and officers in the performance of any duty relating to assessment,
             235      equalization, and collection of taxes;
             236          (4) to prescribe the use of forms relating to the assessment of property for state or local
             237      taxation, the equalization of those assessments, the reporting of property or income for state or
             238      local taxation purposes, or for the computation of those taxes and the reporting of any
             239      information, statistics, or data required by the commission;
             240          (5) to administer and supervise the tax laws of the state;
             241          (6) to prepare and maintain from year to year a complete record of all lands subject to
             242      taxation in this state, and all machinery used in mining and all property or surface
             243      improvements upon or appurtenant to mines or mining claims;
             244          (7) to exercise general supervision over assessors and county boards of equalization
             245      including the authority to enforce Section 59-2-303.1 , and over other county officers in the
             246      performance of their duties relating to the assessment of property and collection of taxes, so
             247      that all assessments of property are just and equal, according to fair market value, and that the
             248      tax burden is distributed without favor or discrimination;
             249          (8) to reconvene any county board of equalization which, when reconvened, may only
             250      address business approved by the commission and extend the time for which any county board
             251      of equalization may sit for the equalization of assessments;
             252          (9) to confer with, advise, and direct county treasurers, assessors, and other county
             253      officers in matters relating to the assessment and equalization of property for taxation and the


             254      collection of taxes;
             255          (10) to provide for and hold annually at such time and place as may be convenient a
             256      district or state convention of county assessors, auditors, and other county officers to consider
             257      and discuss matters relative to taxation, uniformity of valuation, and changes in the law relative
             258      to taxation and methods of assessment, to which county assessors and other officers called to
             259      attend shall attend at county expense;
             260          (11) to direct proceedings, actions, and prosecutions to enforce the laws relating to the
             261      penalties, liabilities, and punishments of public officers, persons, and officers or agents of
             262      corporations for failure or neglect to comply with the statutes governing the reporting,
             263      assessment, and taxation of property;
             264          (12) to cause complaints to be made in the proper court seeking removal from office of
             265      assessors, auditors, members of county boards, and other assessing, taxing, or disbursing
             266      officers, who are guilty of official misconduct or neglect of duty;
             267          (13) to require county attorneys to immediately institute and prosecute actions and
             268      proceedings in respect to penalties, forfeitures, removals, and punishments for violations of the
             269      laws relating to the assessment and taxation of property in their respective counties;
             270          (14) to require any person to furnish any information required by the commission to
             271      ascertain the value and the relative burden borne by all kinds of property in the state, and to
             272      require from all state and local officers any information necessary for the proper discharge of
             273      the duties of the commission;
             274          (15) to examine all records relating to the valuation of property of any person;
             275          (16) to subpoena witnesses to appear and give testimony and produce records relating
             276      to any matter before the commission;
             277          (17) to cause depositions of witnesses to be taken as in civil actions at the request of
             278      the commission or any party to any matter or proceeding before the commission;
             279          (18) to authorize any member or employee of the commission to administer oaths and
             280      affirmations in any matter or proceeding relating to the exercise of the powers and duties of the
             281      commission;


             282          (19) to visit periodically each county of the state, to investigate and direct the work and
             283      methods of local assessors and other officials in the assessment, equalization, and taxation of
             284      property, and to ascertain whether the law requiring the assessment of all property not exempt
             285      from taxation, and the collection of taxes, have been properly administered and enforced;
             286          (20) to carefully examine all cases where evasion or violation of the laws for
             287      assessment and taxation of property is alleged, to ascertain whether existing laws are defective
             288      or improperly administered;
             289          (21) to furnish to the governor from time to time such assistance and information as the
             290      governor requires;
             291          (22) to transmit to the governor and to each member of the Legislature
             292      recommendations as to legislation which will correct or eliminate defects in the operation of
             293      the tax laws and will equalize the burden of taxation within the state;
             294          (23) to correct any error in any assessment made by it at any time before the tax is due
             295      and report the correction to the county auditor, who shall enter the corrected assessment upon
             296      the assessment roll;
             297          (24) to compile and publish statistics relating to taxation in the state and prepare and
             298      submit an annual budget to the governor for inclusion in the state budget to be submitted to the
             299      Legislature;
             300          (25) to perform any further duties imposed by law, and exercise all powers necessary in
             301      the performance of its duties;
             302          (26) to adopt a schedule of fees assessed for services provided by the commission,
             303      unless otherwise provided by statute. The fee shall be reasonable and fair, and shall reflect the
             304      cost of services provided. Each fee established in this manner shall be submitted to and
             305      approved by the Legislature as part of the commission's annual appropriations request. The
             306      commission may not charge or collect any fee proposed in this manner without approval by the
             307      Legislature; [and]
             308          (27) to comply with the procedures and requirements of Title 63, Chapter 46b,
             309      Administrative Procedures Act, in its adjudicative proceedings[.]; and


             310          (28) to provide data to the executive director of the Department of Health for purposes
             311      of the distributions required by Section 26-9-4 .
             312          Section 3. Section 59-1-901 is amended to read:
             313           59-1-901. Creation -- Members -- Terms.
             314          (1) There is created a state commission to be known as the Utah Tax Review
             315      Commission.
             316          (2) (a) The [review commission] Utah Tax Review Commission shall be composed of
             317      [14] 16 members as follows:
             318          (i) [Two] two members shall be appointed by the speaker of the House of
             319      Representatives from the House of Representatives, not more than one of whom may be from
             320      the same political party[.];
             321          (ii) [Two] two members shall be appointed by the president of the Senate from the
             322      Senate, not more than one of whom may be from the same political party[.];
             323          (iii) [Five] five members shall be appointed by the governor, not more than three of
             324      whom may be from the same political party[.];
             325          (iv) [A] one member who is a member of the State Tax Commission, appointed by the
             326      State Tax Commission, shall be an ex officio member of the [review commission.] Utah Tax
             327      Review Commission;
             328          (v) one member who is the House of Representatives chair of the Revenue and
             329      Taxation Interim Committee shall be an ex officio member of the Utah Tax Review
             330      Commission; and
             331          (vi) one member who is the Senate chair of the Revenue and Taxation Interim
             332      Committee shall be an ex officio member of the Utah Tax Review Commission.
             333          (b) The [ten] 12 members appointed under Subsection (2)(a) shall then select four
             334      additional members with consideration to be given to achieving ethnic, cultural, and gender
             335      diversity, representation from the major geographical areas of the state, and equal bipartisan
             336      representation.
             337          (3) (a) Except for members appointed under Subsections (2)(a)(i) [and], (ii), (v), and


             338      (vi), and except as required by Subsection (3)(b), members shall be appointed to four-year
             339      terms.
             340          (b) Notwithstanding the requirements of Subsection (3)(a), the governor shall, at the
             341      time of appointment or reappointment, adjust the length of terms to ensure that the terms of
             342      commission members are staggered so that approximately half of the commission is appointed
             343      every two years.
             344          Section 4. Section 59-7-612 is amended to read:
             345           59-7-612. Tax credits for research activities conducted in the state -- Carry
             346      forward -- Commission to report modification or repeal of certain federal provisions --
             347      Utah Tax Review Commission study.
             348          (1) (a) [For taxable years beginning on or after January 1, 1999, but beginning before
             349      December 31, 2010, a] A taxpayer meeting the requirements of this section [shall qualify for]
             350      may claim the following nonrefundable tax credits [for increasing research activities in this
             351      state]:
             352          (i) a research tax credit of [6%] 7% of the taxpayer's qualified research expenses for
             353      the current taxable year that exceed the base amount provided for under Subsection (4); [and]
             354          (ii) a tax credit for payments to qualified organizations for basic research as provided
             355      in Section 41(e), Internal Revenue Code, of [6%] 7% for the current taxable year that exceed
             356      the base amount provided for under Subsection (4)[.]; and
             357          (iii) a tax credit equal to 5% of the taxpayer's qualified research expenses for the
             358      current taxable year.
             359          [(b) If a taxpayer qualifying for a credit under Subsection (1)(a) seeks to claim the
             360      credit, the taxpayer shall:]
             361          (b) (i) Except as provided in Subsection (1)(b)(ii), a taxpayer may:
             362          [(i)] (A) claim the tax credit or a portion of the tax credit for the taxable year
             363      immediately following the taxable year for which the taxpayer qualifies for the tax credit;
             364          [(ii)] (B) carry forward the tax credit or a portion of the tax credit [forward] as
             365      provided in Subsection [(4)(f)] (5); or


             366          [(iii)] (C) claim a portion of the tax credit and carry forward a portion of the tax credit
             367      as provided in Subsections (1)(b)(i)(A) and [(ii)] (B).
             368          (ii) A taxpayer may not carry forward the tax credit allowed by Subsection (1)(a)(iii).
             369          (c) The tax credits provided for in this section do not include the alternative
             370      incremental credit provided for in Section 41(c)(4), Internal Revenue Code.
             371          (2) For purposes of claiming a tax credit under this section, a unitary group as defined
             372      in Section 59-7-101 is considered to be one taxpayer.
             373          (3) Except as specifically provided for in this section:
             374          (a) the tax credits authorized under Subsection (1) shall be calculated as provided in
             375      Section 41, Internal Revenue Code; and
             376          (b