H.B. 359 Enrolled

1

TAX CHANGES
2 2008 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: John Dougall
5 Senate Sponsor: Wayne L. Niederhauser
6
7 LONG TITLE
8 General Description:
9 This bill amends the Corporate Franchise and Income Taxes chapter, the Individual
10 Income Tax Act, the Sales and Use Tax Act, the Transportation Code, and related
11 provisions to address the income taxation of individuals, estates, and trusts, including
12 real estate investment trusts, a change in a state sales and use tax rate, a sales and use
13 tax exemption, and the expenditure of certain state sales and use tax revenues.
14 Highlighted Provisions:
15 This bill:
16 . defines terms;
17 . addresses the income taxation of a real estate investment trust or income from a real
18 estate investment trust;
19 . repeals provisions imposing an individual income tax on the basis of graduated
20 brackets and rates;
21 . provides that an individual income tax is imposed on the basis of a single tax rate,
22 including:
23 . modifying and repealing definitions;
24 . modifying additions to, subtractions from, and adjustments to adjusted gross
25 income;
26 . addressing the taxation of a nonresident individual or part-year resident
27 individual; and
28 . addressing provisions relating to the determination and reporting of income tax
29 liability and information;

30 . addresses the apportionment of business income for purposes of the individual
31 income tax;
32 . modifies the income taxation of estates and trusts, including:
33 . providing definitions;
34 . providing that the tax is calculated on the basis of unadjusted income;
35 . modifying additions to, subtractions from, and adjustments to unadjusted
36 income;
37 . addressing the taxation of a nonresident estate or trust; and
38 . addressing provisions relating to the determination and reporting of income tax
39 liability and information;
40 . addresses the taxation of pass-through entities, including:
41 . providing definitions; and
42 . renumbering and amending provisions relating to pass-through entities;
43 . renumbers and amends provisions relating to tax credits, including tax credits for:
44 . a taxpayer;
45 . an investment in the Utah Educational Savings Plan Trust; or
46 . retirement income;
47 . provides nonrefundable tax credits for:
48 . a trust or estate;
49 . a contribution to a medical care savings account;
50 . capital gain transactions;
51 . certain amounts paid for insurance under a health benefit plan; or
52 . certain solar projects;
53 . requires the Utah Tax Review Commission to study the solar projects tax credits;
54 . provides that a person may not claim a nonrefundable renewable energy systems tax
55 credit for certain purchases for which the person claims a tax credit for certain solar
56 projects;
57 . modifies the refundable renewable energy tax credit to clarify that an estate or trust

58 may claim the tax credit;
59 . addresses the apportionment of tax credits;
60 . addresses the following relating to a medical care savings account:
61 . taxation;
62 . penalties; and
63 . interest;
64 . amends provisions relating to the taxation of an investment in the Utah Educational
65 Savings Plan Trust;
66 . renumbers and amends the individual income tax contribution provisions;
67 . addresses the administration of income tax contributions;
68 . grants rulemaking authority to:
69 . the State Tax Commission; and
70 . the Insurance Department;
71 . increases a state sales and use tax rate from 4.65% to 4.70%;
72 . provides that a .025% tax rate on certain sales and use transactions shall be
73 deposited into the Critical Highway Needs Fund and the Transportation Investment
74 Fund of 2005;
75 . provides that a .025% tax rate on certain sales and use transactions shall be
76 deposited into the Transportation Fund to be expended to address chokepoints in
77 construction management;
78 . extends the expiration date for certain sales and use tax exemptions;
79 . provides a sales and use tax exemption for sales of fuel to a common carrier that is a
80 railroad for use in a locomotive engine;
81 . provides that state sales and use tax revenues deposited into the Transportation Fund
82 are not appropriated into the class B and class C roads account;
83 . modifies the statutes creating the Transportation Investment Fund of 2005 and the
84 Critical Highway Needs Fund to address the sources of revenue that may be
85 deposited into the funds; and

86 . makes technical changes.
87 Monies Appropriated in this Bill:
88 None
89 Other Special Clauses:
90 This bill provides effective dates.
91 Utah Code Sections Affected:
92 AMENDS:
93 9-4-802, as last amended by Laws of Utah 2003, Chapter 132
94 9-4-803, as last amended by Laws of Utah 2003, Chapter 132
95 23-14-13, as last amended by Laws of Utah 1995, Chapter 211
96 23-14-14.1, as enacted by Laws of Utah 2003, Chapter 162
97 26-18a-3, as last amended by Laws of Utah 1997, Chapter 1
98 26-18a-4, as last amended by Laws of Utah 1997, Chapter 1
99 26-48-102, as enacted by Laws of Utah 2006, Chapter 280
100 31A-32a-101, as enacted by Laws of Utah 1999, Chapter 131
101 31A-32a-103, as enacted by Laws of Utah 1999, Chapter 131
102 31A-32a-104, as enacted by Laws of Utah 1999, Chapter 131
103 31A-32a-105, as enacted by Laws of Utah 1999, Chapter 131
104 31A-32a-106, as last amended by Laws of Utah 2001, Chapter 53
105 31A-32a-107, as enacted by Laws of Utah 1999, Chapter 131
106 48-2c-117, as enacted by Laws of Utah 2001, Chapter 260
107 53B-8a-106, as last amended by Laws of Utah 2007, Chapter 100
108 59-7-101, as last amended by Laws of Utah 2004, Chapter 54
109 59-7-105, as last amended by Laws of Utah 2007, Chapter 100
110 59-7-106, as last amended by Laws of Utah 2007, Chapter 100
111 59-7-116.5, as enacted by Laws of Utah 1995, Chapter 311
112 59-7-402, as last amended by Laws of Utah 2004, Chapter 54
113 59-7-614, as repealed and reenacted by Laws of Utah 2007, Chapter 288

114 59-10-103, as last amended by Laws of Utah 2006, Fourth Special Session, Chapter 2
115 59-10-104, as last amended by Laws of Utah 2007, Chapter 288
116 59-10-104.1, as last amended by Laws of Utah 2006, Fourth Special Session, Chapter 2
117 59-10-110, as renumbered and amended by Laws of Utah 1987, Chapter 2
118 59-10-114, as last amended by Laws of Utah 2007, Chapter 100
119 59-10-115, as last amended by Laws of Utah 2006, Fourth Special Session, Chapter 2
120 59-10-116, as last amended by Laws of Utah 2006, Fourth Special Session, Chapter 2
121 59-10-117, as last amended by Laws of Utah 2006, Fourth Special Session, Chapter 2
122 59-10-118, as last amended by Laws of Utah 1995, Chapter 311
123 59-10-119, as renumbered and amended by Laws of Utah 1987, Chapter 2
124 59-10-120, as renumbered and amended by Laws of Utah 1987, Chapter 2
125 59-10-121, as renumbered and amended by Laws of Utah 1987, Chapter 2
126 59-10-122, as renumbered and amended by Laws of Utah 1987, Chapter 2
127 59-10-123, as renumbered and amended by Laws of Utah 1987, Chapter 2
128 59-10-124, as renumbered and amended by Laws of Utah 1987, Chapter 2
129 59-10-125, as renumbered and amended by Laws of Utah 1987, Chapter 2
130 59-10-126, as last amended by Laws of Utah 1995, Chapter 311
131 59-10-201, as last amended by Laws of Utah 2007, Chapter 100
132 59-10-201.1, as last amended by Laws of Utah 2006, Chapter 223
133 59-10-202, as last amended by Laws of Utah 2007, Chapter 100
134 59-10-204, as last amended by Laws of Utah 2006, Chapter 223
135 59-10-205, as last amended by Laws of Utah 2006, Chapter 223
136 59-10-207, as last amended by Laws of Utah 2006, Chapter 223
137 59-10-209.1, as enacted by Laws of Utah 2006, Chapter 223
138 59-10-210, as last amended by Laws of Utah 2006, Chapter 223
139 59-10-507, as last amended by Laws of Utah 2003, Chapter 198
140 59-10-1014, as last amended by Laws of Utah 2007, Chapters 122 and 288
141 59-10-1106, as enacted by Laws of Utah 2007, Chapter 288

142 59-12-103, as last amended by Laws of Utah 2007, Chapters 9, 101, 126, 206, and 288
143 59-12-104, as last amended by Laws of Utah 2007, Chapters 76, 195, 214, 224, 288,
144 295, and 329
145 72-2-107, as last amended by Laws of Utah 2007, Chapter 126
146 72-2-124, as last amended by Laws of Utah 2006, Chapters 11 and 135
147 72-2-125, as enacted by Laws of Utah 2007, Chapter 206
148 ENACTS:
149 59-7-614.2, Utah Code Annotated 1953
150 59-10-1020, Utah Code Annotated 1953
151 59-10-1021, Utah Code Annotated 1953
152 59-10-1022, Utah Code Annotated 1953
153 59-10-1023, Utah Code Annotated 1953
154 59-10-1024, Utah Code Annotated 1953
155 59-10-1301, Utah Code Annotated 1953
156 59-10-1302, Utah Code Annotated 1953
157 59-10-1303, Utah Code Annotated 1953
158 59-10-1401, Utah Code Annotated 1953
159 59-10-1402, Utah Code Annotated 1953
160 RENUMBERS AND AMENDS:
161 59-10-1002.1, (Renumbered from 59-10-1016, as renumbered and amended by Laws of
162 Utah 2006, Chapter 223)
163 59-10-1002.2, (Renumbered from 59-10-1206.9, as enacted by Laws of Utah 2007,
164 Chapter 288)
165 59-10-1017, (Renumbered from 59-10-1206.1, as enacted by Laws of Utah 2007,
166 Chapter 100)
167 59-10-1018, (Renumbered from 59-10-1206.2, as enacted by Laws of Utah 2007,
168 Chapter 288)
169 59-10-1019, (Renumbered from 59-10-1206.3, as enacted by Laws of Utah 2007,

170 Chapter 288)
171 59-10-1304, (Renumbered from 59-10-551, as last amended by Laws of Utah 2006,
172 Chapter 280)
173 59-10-1305, (Renumbered from 59-10-530, as last amended by Laws of Utah 1997,
174 Chapter 12)
175 59-10-1306, (Renumbered from 59-10-530.5, as last amended by Laws of Utah 2003,
176 Chapter 132)
177 59-10-1307, (Renumbered from 59-10-549, as last amended by Laws of Utah 2005,
178 Chapter 208)
179 59-10-1308, (Renumbered from 59-10-550, as last amended by Laws of Utah 1997,
180 Chapters 1 and 12)
181 59-10-1309, (Renumbered from 59-10-550.1, as enacted by Laws of Utah 2003,
182 Chapter 162)
183 59-10-1310, (Renumbered from 59-10-550.2, as enacted by Laws of Utah 2006,
184 Chapter 280)
185 59-10-1311, (Renumbered from 59-10-547, as last amended by Laws of Utah 1998,
186 Chapter 269)
187 59-10-1312, (Renumbered from 59-10-548, as last amended by Laws of Utah 2002,
188 Chapters 107 and 256)
189 59-10-1403, (Renumbered from 59-10-301, as renumbered and amended by Laws of
190 Utah 1987, Chapter 2)
191 59-10-1404, (Renumbered from 59-10-302, as renumbered and amended by Laws of
192 Utah 1987, Chapter 2)
193 59-10-1405, (Renumbered from 59-10-303, as last amended by Laws of Utah 2006,
194 Fourth Special Session, Chapter 2)
195 REPEALS:
196 59-10-206, as last amended by Laws of Utah 1995, Chapter 345
197 59-10-801, as last amended by Laws of Utah 1997, Chapter 159

198 59-10-1201, as enacted by Laws of Utah 2006, Fourth Special Session, Chapter 2
199 59-10-1202, as last amended by Laws of Utah 2007, Chapters 100 and 288
200 59-10-1203, as last amended by Laws of Utah 2007, Chapters 100 and 288
201 59-10-1204, as enacted by Laws of Utah 2006, Fourth Special Session, Chapter 2
202 59-10-1205, as enacted by Laws of Utah 2006, Fourth Special Session, Chapter 2
203 59-10-1206, as enacted by Laws of Utah 2006, Fourth Special Session, Chapter 2
204 59-10-1207, as enacted by Laws of Utah 2006, Fourth Special Session, Chapter 2
205
206 Be it enacted by the Legislature of the state of Utah:
207 Section 1. Section 9-4-802 is amended to read:
208 9-4-802. Purposes of Homeless Coordinating Committee -- Uses of Pamela
209 Atkinson Homeless Trust Account.
210 (1) (a) The Homeless Coordinating Committee shall work to ensure that services
211 provided to the homeless by state agencies, local governments, and private organizations are
212 provided in a cost-effective manner.
213 (b) Programs funded by the committee shall emphasize emergency housing and
214 self-sufficiency, including placement in meaningful employment or occupational training
215 activities and, where needed, special services to meet the unique needs of the homeless who
216 have families with children, or who are mentally ill, disabled, or suffer from other serious
217 challenges to employment and self-sufficiency.
218 (c) The committee may also fund treatment programs to ameliorate the effects of
219 substance abuse or a disability.
220 (2) The committee members designated in Subsection 9-4-801 (2) shall:
221 (a) award contracts funded by the Pamela Atkinson Homeless Trust Account with the
222 advice and input of those designated in Subsection 9-4-801 (3);
223 (b) consider need, diversity of geographic location, coordination with or enhancement
224 of existing services, and the extensive use of volunteers; and
225 (c) give priority for funding to programs that serve the homeless who are mentally ill

226 and who are in families with children.
227 (3) (a) In any fiscal year, no more than 80% of the funds in the Pamela Atkinson
228 Homeless Trust Account may be allocated to organizations that provide services only in Salt
229 Lake, Davis, Weber, and Utah Counties.
230 (b) The committee may:
231 (i) expend up to 3% of its annual appropriation for administrative costs associated with
232 the allocation of funds from the Pamela Atkinson Homeless Trust Account, and up to 2% of its
233 annual appropriation for marketing the account and soliciting donations to the account; and
234 (ii) pay for the initial costs of the State Tax Commission in implementing Section
235 [ 59-10-530.5 ] 59-10-1306 from the account.
236 (4) (a) The committee may not expend, except as provided in Subsection (4)(b), an
237 amount equal to the greater of $50,000 or 20% of the amount donated to the Pamela Atkinson
238 Homeless Trust Account during fiscal year 1988-89.
239 (b) If there are decreases in contributions to the account, the committee may expend
240 funds held in reserve to provide program stability, but the committee shall reimburse the
241 amounts of those expenditures to the reserve fund.
242 (5) The committee shall make an annual report to the Economic Development and
243 Human Resources Appropriations Subcommittee regarding the programs and services funded
244 by contributions to the Pamela Atkinson Homeless Trust Account.
245 (6) The moneys in the Pamela Atkinson Homeless Trust Account shall be invested by
246 the state treasurer according to the procedures and requirements of Title 51, Chapter 7, State
247 Money Management Act, except that all interest or other earnings derived from the fund
248 moneys shall be deposited in the fund.
249 Section 2. Section 9-4-803 is amended to read:
250 9-4-803. Creation of Pamela Atkinson Homeless Trust Account.
251 (1) There is created a restricted account within the General Fund to be known as the
252 Pamela Atkinson Homeless Trust Account.
253 (2) Private contributions received under this section and Section [ 59-10-530.5 ]

254 59-10-1306 shall be deposited into the account to be used only for programs described in
255 Section 9-4-802 .
256 (3) Money shall be appropriated from the account to the State Homeless Coordinating
257 Committee in accordance with the Utah Budgetary Procedures Act.
258 (4) The State Homeless Coordinating Committee may accept transfers, grants, gifts,
259 bequests, or any money made available from any source to implement this part.
260 Section 3. Section 23-14-13 is amended to read:
261 23-14-13. Wildlife Resources Account.
262 (1) The Wildlife Resources Account [within the General Fund] is established within the
263 General Fund.
264 (2) The following monies shall be deposited into the Wildlife Resources Account:
265 (a) revenue from the sale of licenses, permits, tags, and certificates of registration issued
266 under this title or a rule or proclamation of the Wildlife Board, except as otherwise provided by
267 this title;
268 (b) revenue from the sale, lease, rental, or other granting of rights of real or personal
269 property acquired with revenue specified in Subsection (2)(a);
270 (c) revenue from fines and forfeitures for violations of this title or any rule,
271 proclamation, or order of the Wildlife Board, minus court costs not to exceed the schedule
272 adopted by the Judicial Council;
273 (d) funds appropriated from the General Fund by the Legislature pursuant to Section
274 23-19-39 ;
275 (e) other monies received by the division under any provision of this title, except as
276 otherwise provided by this title; [and]
277 (f) contributions made in accordance with Section 59-10-1305 ; and
278 [(f)] (g) interest, dividends, or other income earned on account monies.
279 (3) Monies in the Wildlife Resources Account shall be used for the administration of
280 this title.
281 Section 4. Section 23-14-14.1 is amended to read:

282 23-14-14.1. Wolf Depredation and Management Restricted Account -- Interest --
283 Use of contributions and interest.
284 (1) There is created within the General Fund the Wolf Depredation and Management
285 Restricted Account.
286 (2) The account shall be funded by contributions deposited into the Wolf Depredation
287 and Management Restricted Account in accordance with Section [ 59-10-550.1 ] 59-10-1309 .
288 (3) (a) The Wolf Depredation and Management Restricted Account shall earn interest.
289 (b) Interest earned on the Wolf Depredation and Management Restricted Account shall
290 be deposited into the Wolf Depredation and Management Restricted Account.
291 (4) (a) Subject to Subsection (4)(b), contributions and interest deposited into the Wolf
292 Depredation and Management Restricted Account shall be used by the Division of Wildlife
293 Resources for:
294 (i) payments for livestock depredation by wolves; or
295 (ii) wolf management.
296 (b) Contributions and interest deposited into the Wolf Depredation and Management
297 Restricted Account may be used for the purposes described in Subsection (4)(a) only to the
298 extent permitted by federal law.
299 Section 5. Section 26-18a-3 is amended to read:
300 26-18a-3. Purpose of committee.
301 (1) The committee shall work to:
302 (a) provide financial assistance for initial medical expenses of children who need organ
303 transplants;
304 (b) obtain the assistance of volunteer and public service organizations; and
305 (c) fund activities as the committee designates for the purpose of educating the public
306 about the need for organ donors.
307 (2) (a) The committee is responsible for awarding financial assistance funded by the
308 trust account.
309 (b) The financial assistance awarded by the committee under Subsection (1)(a) shall be

310 in the form of interest free loans. The committee may establish terms for repayment of the
311 loans, including a waiver of the requirement to repay any awards if, in the committee's
312 judgment, repayment of the loan would impose an undue financial burden on the recipient.
313 (c) In making financial awards under Subsection (1)(a), the committee shall consider:
314 (i) need;
315 (ii) coordination with or enhancement of existing services or financial assistance,
316 including availability of insurance or other state aid;
317 (iii) the success rate of the particular organ transplant procedure needed by the child;
318 and
319 (iv) the extent of the threat to the child's life without the organ transplant.
320 (3) The committee may only provide the assistance described in this section to children
321 who have resided in Utah, or whose legal guardians have resided in Utah for at least six months
322 prior to the date of assistance under this section.
323 (4) (a) The committee may expend up to 5% of its annual appropriation for
324 administrative costs associated with the allocation of funds from the trust account.
325 (b) The administrative costs shall be used for the costs associated with staffing the
326 committee and for State Tax Commission costs in implementing Section [ 59-10-550 ]
327 59-10-1308 .
328 (5) The committee shall make an annual report to the Health and Human Services
329 Appropriations Subcommittee regarding the programs and services funded by contributions to
330 the trust account.
331 Section 6. Section 26-18a-4 is amended to read:
332 26-18a-4. Creation of Kurt Oscarson Children's Organ Transplant Trust
333 Account.
334 (1) There is created a restricted account within the General Fund pursuant to Section
335 51-5-4 known as the Kurt Oscarson Children's Organ Transplant Trust Account. Private
336 contributions received under this section and Section [ 59-10-550 ] 59-10-1308 shall be
337 deposited into the trust account to be used only for the programs and purposes described in

338 Section 26-18a-3 .
339 (2) Money shall be appropriated from the trust account to the committee in accordance
340 with Title 63, Chapter 38, Budgetary Procedures Act.
341 (3) In addition to funds received under Section [ 59-10-550 ] 59-10-1308 , the committee
342 may accept transfers, grants, gifts, bequests, or any money made available from any source to
343 implement this chapter.
344 Section 7. Section 26-48-102 is amended to read:
345 26-48-102. Cat and Dog Community Spay and Neuter Program Restricted
346 Account -- Interest -- Use of contributions and interest.
347 (1) There is created within the General Fund the Cat and Dog Community Spay and
348 Neuter Program Restricted Account.
349 (2) The account shall be funded by contributions deposited into the Cat and Dog
350 Community Spay and Neuter Program Restricted Account in accordance with Section
351 [ 59-10-550.2 ] 59-10-1310 .
352 (3) (a) The Cat and Dog Community Spay and Neuter Program Restricted Account
353 shall earn interest.
354 (b) Interest earned on the Cat and Dog Community Spay and Neuter Program
355 Restricted Account shall be deposited into the Cat and Dog Community Spay and Neuter
356 Program Restricted Account.
357 (4) The department shall distribute contributions and interest deposited into the Cat and
358 Dog Community Spay and Neuter Program Restricted Account to one or more organizations
359 that:
360 (a) are exempt from federal income taxation under Section 501(c)(3), Internal Revenue
361 Code;
362 (b) operate a mobile spay and neuter clinic for cats and dogs;
363 (c) provide annual spay and neuter services at the mobile spay and neuter clinic
364 described in Subsection (4)(b):
365 (i) to one or more communities in at least 20 counties in the state; and

366 (ii) by veterinarians who are licensed by Title 58, Chapter 28, Veterinary Practice Act;
367 and
368 (d) (i) spay and neuter cats and dogs owned by persons having low incomes; and
369 (ii) have established written guidelines for determining what constitutes a person having
370 a low income in accordance with any rules made by the department as authorized by Subsection
371 (5)(c).
372 (5) (a) An organization described in Subsection (4) may apply to the department to
373 receive a distribution in accordance with Subsection (4).
374 (b) An organization that receives a distribution from the department in accordance with
375 Subsection (4):
376 (i) shall expend the distribution only to spay or neuter dogs and cats:
377 (A) owned by persons having low incomes;
378 (B) by veterinarians who are licensed by Title 58, Chapter 28, Veterinary Practice Act;
379 (C) through a statewide voucher program; and
380 (D) at a location that:
381 (I) is not a mobile spay and neuter clinic; and
382 (II) does not receive any funding from a governmental entity; and
383 (ii) may not expend the distribution for any administrative cost relating to an
384 expenditure authorized by Subsection (5)(b)(i).
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