S.B. 245 Enrolled

1

FUNDING RELATING TO AIRPORTS, HIGHWAYS,
2 AND PUBLIC TRANSIT
3 2008 GENERAL SESSION
4 STATE OF UTAH
5 Chief Sponsor: Curtis S. Bramble
6 House Sponsor: David Clark
7
8 LONG TITLE
9 General Description:
10 This bill amends the Motor Vehicles Code, the Sales and Use Tax Act, and the
11 Transportation Code relating to the local option highway construction and
12 transportation corridor preservation fee, a local sales and use tax to fund tourism,
13 recreation, cultural, convention, and airport facilities, a local sales and use tax to fund
14 certain airport, highway, or public transit projects or services, a state sales and use tax,
15 and financing of certain fixed guideways with certain airport revenue.
16 Highlighted Provisions:
17 This bill:
18 . addresses an audit relating to the local sales and use tax to fund tourism, recreation,
19 cultural, convention, and airport facilities;
20 . reallocates a portion of the revenue received from the local option highway
21 construction and transportation corridor preservation fee imposed in a county of the
22 first class from the County of the First Class State Highway Projects Fund to the
23 legislative body of a city of the first class located within a county of the first class
24 that has an international airport with a United States customs office within its
25 boundaries;
26 . addresses amounts a seller may retain as a seller discount;
27 . repeals a purpose statement;
28 . provides part titles;
29 . defines terms;

30 . provides that a county legislative body may expend certain local sales and use tax
31 revenues for an airport facility in addition to other purposes allowed by statute;
32 . addresses provisions relating to ordinances and bonding for purposes of the local
33 sales and use tax to fund tourism, recreation, cultural, convention, and airport
34 facilities;
35 . authorizes a county of the second class to impose a local option sales and use tax to
36 fund certain airport, highway, or public transit projects or services;
37 . addresses the procedures and requirements for imposing the local option sales and
38 use tax to fund certain airport, highway, or public transit projects or services,
39 including providing that the sales and use tax is an agreement sales and use tax;
40 . imposes a state sales and use tax under certain circumstances;
41 . addresses the procedures and requirements for imposing the state sales and use tax,
42 including providing that:
43 . the sales and use tax is an agreement sales and use tax; and
44 . the revenues are distributed to certain public transit districts;
45 . modifies the sources of funding for the Local Transportation Corridor Preservation
46 Fund;
47 . creates a special revenue fund known as the County of the Second Class State
48 Highway Projects Fund, including:
49 . addressing funding of the fund; and
50 . addressing the purposes for which fund monies may be expended;
51 . provides that an airport operator may not use airport revenue to contribute to
52 constructing, equipping, maintaining, or operating a fixed guideway; and
53 . makes technical changes.
54 Monies Appropriated in this Bill:
55 None
56 Other Special Clauses:
57 This bill provides effective dates.

58 This bill coordinates with H.B. 206, Tax Amendments, to make substantive and
59 technical amendments, including enacting Sections 59-12-1904, 59-12-1905,
60 59-12-1906, 59-12-2005, 59-12-2006, and 59-12-2007.
61 Utah Code Sections Affected:
62 AMENDS:
63 11-41-102, as last amended by Laws of Utah 2007, Chapter 9
64 17-31-5.5, as last amended by Laws of Utah 2007, Chapter 3
65 41-1a-1222, as last amended by Laws of Utah 2007, Chapters 201 and 274
66 59-12-102, as last amended by Laws of Utah 2007, Chapters 9, 214, 224, and 288
67 59-12-103, as last amended by Laws of Utah 2007, Chapters 9, 101, 126, 206, and 288
68 59-12-104.2, as last amended by Laws of Utah 2003, Chapter 312
69 59-12-108, as last amended by Laws of Utah 2007, Chapter 9
70 59-12-602, as last amended by Laws of Utah 1995, Chapter 248
71 59-12-603, as last amended by Laws of Utah 2007, Chapters 3, 9, and 219
72 72-2-117.5, as last amended by Laws of Utah 2007, Chapters 181 and 201
73 72-2-121, as last amended by Laws of Utah 2007, Chapter 201
74 72-10-102, as last amended by Laws of Utah 2003, Chapter 183
75 ENACTS:
76 59-12-601.1, Utah Code Annotated 1953
77 59-12-1901, Utah Code Annotated 1953
78 59-12-1902, Utah Code Annotated 1953
79 59-12-1903, Utah Code Annotated 1953
80 59-12-2001, Utah Code Annotated 1953
81 59-12-2002, Utah Code Annotated 1953
82 59-12-2003, Utah Code Annotated 1953
83 59-12-2004, Utah Code Annotated 1953
84 72-2-121.2, Utah Code Annotated 1953
85 72-10-215, Utah Code Annotated 1953

86 REPEALS:
87 59-12-601, as last amended by Laws of Utah 1991, Chapter 265
88
89 Be it enacted by the Legislature of the state of Utah:
90 Section 1. Section 11-41-102 is amended to read:
91 11-41-102. Definitions.
92 As used in this chapter:
93 (1) "Agreement" means an oral or written agreement between a:
94 (a) (i) county; or
95 (ii) municipality; and
96 (b) person.
97 (2) "Municipality" means a:
98 (a) city; or
99 (b) town.
100 (3) "Payment" includes:
101 (a) a payment;
102 (b) a rebate;
103 (c) a refund; or
104 (d) an amount similar to Subsections (3)(a) through (c).
105 (4) "Regional retail business" means a:
106 (a) retail business that occupies a floor area of more than 80,000 square feet;
107 (b) dealer as defined in Section 41-1a-102 ;
108 (c) retail shopping facility that has at least two anchor tenants if the total number of
109 anchor tenants in the shopping facility occupy a total floor area of more than 150,000 square
110 feet; or
111 (d) grocery store that occupies a floor area of more than 30,000 square feet.
112 (5) (a) "Sales and use tax" means a tax:
113 (i) imposed on transactions within a:

114 (A) county; or
115 (B) municipality; and
116 (ii) except as provided in Subsection (5)(b), authorized under Title 59, Chapter 12,
117 Sales and Use Tax Act.
118 (b) Notwithstanding Subsection (5)(a)(ii), "sales and use tax" does not include a tax
119 authorized under:
120 (i) Subsection 59-12-103 (2)(a)(i);
121 (ii) Subsection 59-12-103 (2)(b)(i);
122 (iii) Subsection 59-12-103 (2)(c)(i);
123 (iv) Subsection 59-12-103 (2)(d)(i)(A);
124 (v) Subsection 59-12-103 (2)(e)(ii)(A);
125 (vi) Subsection 59-12-103 (2)(e)(iii)(A);
126 (vii) Section 59-12-301 ;
127 (viii) Section 59-12-352 ;
128 (ix) Section 59-12-353 ;
129 (x) Section 59-12-603 ; or
130 (xi) Section 59-12-1201 .
131 (6) (a) "Sales and use tax incentive payment" means a payment of revenues:
132 (i) to a person;
133 (ii) by a:
134 (A) county; or
135 (B) municipality;
136 (iii) to induce the person to locate or relocate a regional retail business within the:
137 (A) county; or
138 (B) municipality; and
139 (iv) that are derived from a sales and use tax.
140 (b) "Sales and use tax incentive payment" does not include funding for public
141 infrastructure.

142 Section 2. Section 17-31-5.5 is amended to read:
143 17-31-5.5. Independent audit -- Report to county legislative body -- Content.
144 (1) The legislative body of each county imposing the transient room tax provided for in
145 Section 59-12-301 shall annually engage an independent auditor to perform an audit to verify
146 that transient room tax funds are used only as authorized by this chapter and to report the
147 findings of the audit to the county legislative body.
148 (2) Subsection (1) applies to the tourism, recreation, cultural, [and] convention, and
149 airport facilities tax provided for in Section 59-12-603 , except that the audit verification
150 required under this Subsection (2) shall be for the uses authorized under Section 59-12-603 .
151 (3) The report required under Subsection (1) shall include a breakdown of expenditures
152 into the following categories:
153 (a) for the transient room tax, identification of expenditures for:
154 (i) establishing and promoting:
155 (A) recreation;
156 (B) tourism;
157 (C) film production; and
158 (D) conventions;
159 (ii) acquiring, leasing, constructing, furnishing, or operating:
160 (A) convention meeting rooms;
161 (B) exhibit halls;
162 (C) visitor information centers;
163 (D) museums; and
164 (E) related facilities;
165 (iii) acquiring or leasing land required for or related to the purposes listed in Subsection
166 (3)(a)(ii);
167 (iv) mitigation costs as identified in Subsection 17-31-2 (1)(d); and
168 (v) making the annual payment of principal, interest, premiums, and necessary reserves
169 for any or the aggregate of bonds issued to pay for costs referred to in Subsections

170 17-31-2 (2)(c) and (3)(a); and
171 (b) for the tourism, recreation, cultural, [and] convention, and airport facilities tax,
172 identification of expenditures for:
173 (i) financing tourism promotion, which means an activity to develop, encourage, solicit,
174 or market tourism that attracts transient guests to the county, including planning, product
175 development, and advertising;
176 (ii) the development, operation, and maintenance of the following facilities as defined in
177 Section 59-12-602 :
178 (A) [tourist facilities] an airport facility;
179 (B) [recreation facilities] a convention facility;
180 (C) a cultural [facilities; and] facility;
181 (D) [convention facilities] a recreation facility; and
182 (E) a tourist facility; and
183 (iii) a pledge as security for evidences of indebtedness under Subsection 59-12-603 (3).
184 (4) A county legislative body shall provide a copy of a report it receives under this
185 section to:
186 (a) the Governor's Office of Economic Development;
187 (b) its tourism tax advisory board; and
188 (c) the Office of the Legislative Fiscal Analyst.
189 Section 3. Section 41-1a-1222 is amended to read:
190 41-1a-1222. Local option highway construction and transportation corridor
191 preservation fee -- Exemptions -- Deposit -- Transfer -- County ordinance -- Notice.
192 (1) (a) (i) A county legislative body may impose a local option highway construction
193 and transportation corridor preservation fee of up to $10 on each motor vehicle registration
194 within the county.
195 (ii) A fee imposed under Subsection (1)(a)(i) shall be set in whole dollar increments.
196 (b) If imposed under Subsection (1)(a), at the time application is made for registration
197 or renewal of registration of a motor vehicle under this chapter, the applicant shall pay the local

198 option highway construction and transportation corridor preservation fee established by the
199 county legislative body.
200 (c) The following are exempt from the fee required under Subsection (1)(a):
201 (i) a motor vehicle that is exempt from the registration fee under Section 41-1a-1209 or
202 Subsection 41-1a-419 (3);
203 (ii) a commercial vehicle with an apportioned registration under Section 41-1a-301 ; and
204 (iii) a motor vehicle with a Purple Heart special group license plate issued in accordance
205 with Section 41-1a-421 .
206 (2) (a) Except as provided in Subsection (2)(b), the revenue generated under this
207 section shall be:
208 (i) deposited in the Local Transportation Corridor Preservation Fund created in Section
209 72-2-117.5 ;
210 (ii) credited to the county from which it is generated; and
211 (iii) used and distributed in accordance with Section 72-2-117.5 .
212 (b) [Seventy percent of the] The revenue generated by a fee imposed under this section
213 in a county of the first class shall be[:] deposited or transferred as follows:
214 (i) 50% of the revenue shall be:
215 [(i)] (A) deposited in the County of the First Class State Highway Projects Fund
216 created in Section 72-2-121 ; and
217 [(ii)] (B) used in accordance with Section 72-2-121 [.];
218 (ii) 20% of the revenue shall be:
219 (A) transferred to the legislative body of a city of the first class:
220 (I) located in a county of the first class; and
221 (II) that has:
222 (Aa) an international airport within its boundaries; and
223 (Bb) a United States customs office on the premises of the international airport
224 described in Subsection (2)(b)(ii)(A)(II)(Aa); and
225 (B) used by the city described in Subsection (2)(b)(ii)(A) for highway construction,

226 reconstruction, or maintenance projects; and
227 (iii) 30% of the revenue shall be deposited, credited, and used as provided in Subsection
228 (2)(a).
229 (3) To impose or change the amount of a fee under this section, the county legislative
230 body shall pass an ordinance:
231 (a) approving the fee;
232 (b) setting the amount of the fee; and
233 (c) providing an effective date for the fee as provided in Subsection (4).
234 (4) (a) If a county legislative body enacts, changes, or repeals a fee under this section,
235 the enactment, change, or repeal shall take effect on July 1 if the commission receives notice
236 meeting the requirements of Subsection (4)(b) from the county prior to April 1.
237 (b) The notice described in Subsection (4)(a) shall:
238 (i) state that the county will enact, change, or repeal a fee under this part;
239 (ii) include a copy of the ordinance imposing the fee; and
240 (iii) if the county enacts or changes the fee under this section, state the amount of the
241 fee.
242 Section 4. Section 59-12-102 is amended to read:
243 59-12-102. Definitions.
244 As used in this chapter:
245 (1) (a) "Admission or user fees" includes season passes.
246 (b) "Admission or user fees" does not include annual membership dues to private
247 organizations.
248 (2) "Agreement" means the Streamlined Sales and Use Tax Agreement described in
249 Section 59-12-102.1 .
250 (3) "Agreement combined tax rate" means the sum of the tax rates:
251 (a) listed under Subsection (4); and
252 (b) that are imposed within a local taxing jurisdiction.
253 (4) "Agreement sales and use tax" means a tax imposed under:

254 (a) Subsection 59-12-103 (2)(a)(i)(A);
255 (b) Subsection 59-12-103 (2)(b)(i);
256 (c) Subsection 59-12-103 (2)(c)(i);
257 (d) Subsection 59-12-103 (2)(d)(i)(A)(I);
258 (e) Subsection 59-12-103 (2)(e)(ii)(A)(I);
259 (f) Subsection 59-12-103 (2)(e)(iii)(A)(I);
260 (g) Section 59-12-204 ;
261 (h) Section 59-12-401 ;
262 (i) Section 59-12-402 ;
263 (j) Section 59-12-501 ;
264 (k) Section 59-12-502 ;
265 (l) Section 59-12-703 ;
266 (m) Section 59-12-802 ;
267 (n) Section 59-12-804 ;
268 (o) Section 59-12-1001 ;
269 (p) Section 59-12-1102 ;
270 (q) Section 59-12-1302 ;
271 (r) Section 59-12-1402 ;
272 (s) Section 59-12-1503 ; [or]
273 (t) Section 59-12-1703 [.];
274 (u) Section 59-12-1903 ; or
275 (v) Section 59-12-2003 .
276 (5) "Aircraft" is as defined in Section 72-10-102 .
277 (6) "Alcoholic beverage" means a beverage that:
278 (a) is suitable for human consumption; and
279 (b) contains .5% or more alcohol by volume.
280 (7) "Area agency on aging" is as defined in Section 62A-3-101 .
281 (8) "Assisted amusement device" means an amusement device, skill device, or ride

282 device that is started and stopped by an individual:
283 (a) who is not the purchaser or renter of the right to use or operate the amusement
284 device, skill device, or ride device; and
285 (b) at the direction of the seller of the right to use the amusement device, skill device, or
286 ride device.
287 (9) "Assisted cleaning or washing of tangible personal property" means cleaning or
288 washing of tangible personal property if the cleaning or washing labor is primarily performed by
289 an individual:
290 (a) who is not the purchaser of the cleaning or washing of the tangible personal
291 property; and
292 (b) at the direction of the seller of the cleaning or washing of the tangible personal
293 property.
294 (10) "Authorized carrier" means:
295 (a) in the case of vehicles operated over public highways, the holder of credentials
296 indicating that the vehicle is or will be operated pursuant to both the International Registration
297 Plan and the International Fuel Tax Agreement;
298 (b) in the case of aircraft, the holder of a Federal Aviation Administration operating
299 certificate or air carrier's operating certificate; or
300 (c) in the case of locomotives, freight cars, railroad work equipment, or other rolling
301 stock, the holder of a certificate issued by the United States Surface Transportation Board.
302 (11) (a) Except as provided in Subsection (11)(b), "biomass energy" means any of the
303 following that is used as the primary source of energy to produce fuel or electricity:
304 (i) material from a plant or tree; or
305 (ii) other organic matter that is available on a renewable basis, including:
306 (A) slash and brush from forests and woodlands;
307 (B) animal waste;
308 (C) methane produced:
309 (I) at landfills; or

310 (II) as a byproduct of the treatment of wastewater residuals;
311 (D) aquatic plants; and
312 (E) agricultural products.
313 (b) "Biomass energy" does not include:
314 (i) black liquor;
315 (ii) treated woods; or
316 (iii) biomass from municipal solid waste other than methane produced:
317 (A) at landfills; or
318 (B) as a byproduct of the treatment of wastewater residuals.
319 (12) (a) "Bundled transaction" means the sale of two or more items of tangible personal
320 property if:
321 (i) one or more of the items of tangible personal property is food and food ingredients;
322 and
323 (ii) the items of tangible personal property are:
324 (A) distinct and identifiable; and
325 (B) sold for one price that is not itemized.
326 (b) "Bundled transaction" does not include the sale of tangible personal property if the
327 sales price varies, or is negotiable, on the basis of the selection by the purchaser of the items of
328 tangible personal property included in the transaction.
329 (c) For purposes of Subsection (12)(a)(ii)(A), tangible personal property that is distinct
330 and identifiable does not include:
331 (i) packaging that:
332 (A) accompanies the sale of the tangible personal property; and
333 (B) is incidental or immaterial to the sale of the tangible personal property;
334 (ii) tangible personal property provided free of charge with the purchase of another item
335 of tangible personal property; or
336 (iii) an item of tangible personal property included in the definition of "purchase price."
337 (d) For purposes of Subsection (12)(c)(ii), an item of tangible personal property is

338 provided free of charge with the purchase of another item of tangible personal property if the
339 sales price of the purchased item of tangible personal property does not vary depending on the
340 inclusion of the tangible personal property provided free of charge.
341 (13) "Certified automated system" means software certified by the governing board of
342 the agreement in accordance with Section 59-12-102.1 that:
343 (a) calculates the agreement sales and use tax imposed within a local taxing jurisdiction:
344 (i) on a transaction; and
345 (ii) in the states that are members of the agreement;
346 (b) determines the amount of agreement sales and use tax to remit to a state that is a
347 member of the agreement; and
348 (c) maintains a record of the transaction described in Subsection (13)(a)(i).
349 (14) "Certified service provider" means an agent certified:
350 (a) by the governing board of the agreement in accordance with Section 59-12-102.1 ;
351 and
352 (b) to perform all of a seller's sales and use tax functions for an agreement sales and use
353 tax other than the seller's obligation under Section 59-12-107.4 to remit a tax on the seller's
354 own purchases.
355 (15) (a) Subject to Subsection (15)(b), "clothing" means all human wearing apparel
356 suitable for general use.
357 (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
358 commission shall make rules:
359 (i) listing the items that constitute "clothing"; and
360 (ii) that are consistent with the list of items that constitute "clothing" under the
361 agreement.
362 (16) "Coal-to-liquid" means the process of converting coal into a liquid synthetic fuel.
363 (17) "Commercial use" means the use of gas, electricity, heat, coal, fuel oil, or other
364 fuels that does not constitute industrial use under Subsection (42) or residential use under
365 Subsection (80).

366 (18) (a) "Common carrier" means a person engaged in or transacting the business of
367 transporting passengers, freight, merchandise, or other property for hire within this state.
368 (b) (i) "Common carrier" does not include a person who, at the time the person is
369 traveling to or from that person's place of employment, transports a passenger to or from the
370 passenger's place of employment.
371 (ii) For purposes of Subsection (18)(b)(i), in accordance with Title 63, Chapter 46a,
372 Utah Administrative Rulemaking Act, the commission may make rules defining what constitutes
373 a person's place of employment.
374 (19) "Component part" includes:
375 (a) poultry, dairy, and other livestock feed, and their components;
376 (b) baling ties and twine used in the baling of hay and straw;
377 (c) fuel used for providing temperature control of orchards and commercial
378 greenhouses doing a majority of their business in wholesale sales, and for providing power for
379 off-highway type farm machinery; and
380