First Substitute S.B. 245

Senator Curtis S. Bramble proposes the following substitute bill:

1 FUNDING RELATING TO AIRPORTS
2 2008 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Curtis S. Bramble
5 House Sponsor: ____________
6
7 LONG TITLE
8 General Description:
9 This bill amends the Sales and Use Tax Act and the Transportation Code relating to a
10 local sales and use tax to fund tourism, recreation, cultural, convention, and airport
11 facilities and financing of certain fixed guideways with certain airport revenue.
12 Highlighted Provisions:
13 This bill:
14 . addresses an audit relating to the local sales and use tax to fund tourism, recreation,
15 cultural, convention, and airport facilities;
16 . repeals a purpose statement;
17 . provides a part title;
18 . defines terms;
19 . provides that a county legislative body may expend the local sales and use tax
20 revenues for an airport facility in addition to other purposes allowed by statute;
21 . provides that an airport operator may not use airport revenue to contribute to
22 constructing, equipping, maintaining, or operating a fixed guideway; and
23 . makes technical changes.
24 Monies Appropriated in this Bill:
25 None

26 Other Special Clauses:
27 None
28 Utah Code Sections Affected:
29 AMENDS:
30 17-31-5.5, as last amended by Laws of Utah 2007, Chapter 3
31 59-12-602, as last amended by Laws of Utah 1995, Chapter 248
32 59-12-603, as last amended by Laws of Utah 2007, Chapters 3, 9, and 219
33 72-10-102, as last amended by Laws of Utah 2003, Chapter 183
34 ENACTS:
35 59-12-601.1, Utah Code Annotated 1953
36 72-10-215, Utah Code Annotated 1953
37 REPEALS:
38 59-12-601, as last amended by Laws of Utah 1991, Chapter 265
39
40 Be it enacted by the Legislature of the state of Utah:
41 Section 1. Section 17-31-5.5 is amended to read:
42 17-31-5.5. Independent audit -- Report to county legislative body -- Content.
43 (1) The legislative body of each county imposing the transient room tax provided for in
44 Section 59-12-301 shall annually engage an independent auditor to perform an audit to verify
45 that transient room tax funds are used only as authorized by this chapter and to report the
46 findings of the audit to the county legislative body.
47 (2) Subsection (1) applies to the tourism, recreation, cultural, [and] convention, and
48 airport facilities tax provided for in Section 59-12-603 , except that the audit verification
49 required under this Subsection (2) shall be for the uses authorized under Section 59-12-603 .
50 (3) The report required under Subsection (1) shall include a breakdown of expenditures
51 into the following categories:
52 (a) for the transient room tax, identification of expenditures for:
53 (i) establishing and promoting:
54 (A) recreation;
55 (B) tourism;
56 (C) film production; and

57 (D) conventions;
58 (ii) acquiring, leasing, constructing, furnishing, or operating:
59 (A) convention meeting rooms;
60 (B) exhibit halls;
61 (C) visitor information centers;
62 (D) museums; and
63 (E) related facilities;
64 (iii) acquiring or leasing land required for or related to the purposes listed in
65 Subsection (3)(a)(ii);
66 (iv) mitigation costs as identified in Subsection 17-31-2 (1)(d); and
67 (v) making the annual payment of principal, interest, premiums, and necessary reserves
68 for any or the aggregate of bonds issued to pay for costs referred to in Subsections
69 17-31-2 (2)(c) and (3)(a); and
70 (b) for the tourism, recreation, cultural, [and] convention, and airport facilities tax,
71 identification of expenditures for:
72 (i) financing tourism promotion, which means an activity to develop, encourage,
73 solicit, or market tourism that attracts transient guests to the county, including planning,
74 product development, and advertising;
75 (ii) the development, operation, and maintenance of the following facilities as defined
76 in Section 59-12-602 :
77 (A) [tourist facilities] an airport facility;
78 (B) [recreation facilities] a convention facility;
79 (C) a cultural [facilities; and] facility;
80 (D) [convention facilities] a recreation facility; and
81 (E) a tourist facility; and
82 (iii) a pledge as security for evidences of indebtedness under Subsection 59-12-603 (3).
83 (4) A county legislative body shall provide a copy of a report it receives under this
84 section to:
85 (a) the Governor's Office of Economic Development;
86 (b) its tourism tax advisory board; and
87 (c) the Office of the Legislative Fiscal Analyst.

88 Section 2. Section 59-12-601.1 is enacted to read:
89 Part 6. Tourism, Recreation, Cultural, Convention, and Airport Facilities Tax Act
90 59-12-601.1. Title.
91 This part is known as the "Tourism, Recreation, Cultural, Convention, and Airport
92 Facilities Tax Act."
93 Section 3. Section 59-12-602 is amended to read:
94 59-12-602. Definitions.
95 As used in this part:
96 (1) (a) Subject to Subsection (1)(b), "airport facility" means an airport of regional
97 significance, as defined by the Transportation Commission by rule made in accordance with
98 Title 63, Chapter 46a, Utah Administrative Rulemaking Act.
99 (b) "Airport facility" includes:
100 (i) an appurtenance to an airport, including a fixed guideway as defined in Section
101 59-12-1702 that provides transportation service to or from the airport;
102 (ii) a control tower, including a radar system;
103 (iii) a public area of an airport; or
104 (iv) a terminal facility.
105 [(1)] (2) "Convention facility" means any publicly owned or operated convention
106 center, sports arena, or other facility at which conventions, conferences, and other gatherings
107 are held and whose primary business or function is to host such conventions, conferences, and
108 other gatherings.
109 [(2)] (3) "Cultural facility" means any publicly owned or operated museum, theater, art
110 center, music hall, or other cultural or arts facility.
111 [(3)] (4) "Recreation facility" or "tourist facility" means any publicly owned or
112 operated park, campground, marina, dock, golf course, water park, historic park, monument,
113 planetarium, zoo, bicycle trails, and other recreation or tourism-related facility.
114 [(4)] (5) (a) "Restaurant" includes any coffee shop, cafeteria, luncheonette, soda
115 fountain, or fast-food service where food is prepared for immediate consumption.
116 (b) "Restaurant" does not include:
117 (i) any retail establishment whose primary business or function is the sale of fuel or
118 food items for off-premise, but not immediate, consumption; and

119 (ii) a theater that sells food items, but not a dinner theater.
120 Section 4. Section 59-12-603 is amended to read:
121 59-12-603. County tax -- Bases -- Rates -- Use of revenues -- Adoption of
122 ordinance required -- Advisory board -- Administration -- Collection -- Distribution --
123 Enactment or repeal of tax or tax rate change -- Effective date -- Notice requirements.
124 (1) (a) In addition to any other taxes, a county legislative body may, as provided in this
125 part, impose a tax as follows:
126 (i) (A) a county legislative body of any county may impose a tax of not to exceed 3%
127 on all short-term leases and rentals of motor vehicles not exceeding 30 days, except for leases
128 and rentals of motor vehicles made for the purpose of temporarily replacing a person's motor
129 vehicle that is being repaired pursuant to a repair or an insurance agreement; and
130 (B) beginning on or after January 1, 1999, a county legislative body of any county
131 imposing a tax under Subsection (1)(a)(i)(A) may, in addition to imposing the tax under
132 Subsection (1)(a)(i)(A), impose a tax of not to exceed 4% on all short-term leases and rentals
133 of motor vehicles not exceeding 30 days, except for leases and rentals of motor vehicles made
134 for the purpose of temporarily replacing a person's motor vehicle that is being repaired pursuant
135 to a repair or an insurance agreement;
136 (ii) a county legislative body of any county may impose a tax of not to exceed 1% of all
137 sales of the following that are sold by a restaurant:
138 (A) prepared food; or
139 (B) food and food ingredients; and
140 (iii) a county legislative body of a county of the first class may impose a tax of not to
141 exceed .5% on charges for the accommodations and services described in Subsection
142 59-12-103 (1)(i).
143 (b) A tax imposed under Subsection (1)(a) is subject to the audit provisions of Section
144 17-31-5.5 .
145 (2) (a) Subject to Subsection (2)(b), revenue from the imposition of the taxes provided
146 for in Subsections (1)(a)(i) through (iii) may be used for [the purposes of]:
147 (i) financing tourism promotion; and
148 (ii) the development, operation, and maintenance of [tourist, recreation, cultural, and
149 convention facilities as defined in Section 59-12-602 .]:

150 (A) an airport facility;
151 (B) a convention facility;
152 (C) a cultural facility;
153 (D) a recreation facility; or
154 (E) a tourist facility.
155 (b) A county of the first class shall expend at least $450,000 each year of the revenues
156 from the imposition of a tax authorized by Subsection (1)(a)(iii) within the county to fund a
157 marketing and ticketing system designed to:
158 (i) promote tourism in ski areas within the county by persons that do not reside within
159 the state; and
160 (ii) combine the sale of:
161 (A) ski lift tickets; and
162 (B) accommodations and services described in Subsection 59-12-103 (1)(i).
163 (3) A tax imposed under this part may be pledged as security for bonds, notes, or other
164 evidences of indebtedness incurred by a county under Title 11, Chapter 14, Local Government
165 Bonding Act, to finance [tourism, recreation, cultural, and convention facilities.]:
166 (a) an airport facility;
167 (b) a convention facility;
168 (c) a cultural facility;
169 (d) a recreation facility; or
170 (e) a tourist facility.
171 (4) (a) In order to impose the tax under Subsection (1), each county legislative body
172 shall annually adopt an ordinance imposing the tax.
173 (b) The ordinance under Subsection (4)(a) shall include provisions substantially the
174 same as those contained in Part 1, Tax Collection, except that the tax shall be imposed only on
175 those items and sales described in Subsection (1).
176 (c) The name of the county as the taxing agency shall be substituted for that of the state
177 where necessary, and an additional license is not required if one has been or is issued under
178 Section 59-12-106 .
179 (5) In order to maintain in effect its tax ordinance adopted under this part, each county
180 legislative body shall, within 30 days of any amendment of any applicable provisions of Part 1,

181 Tax Collection, adopt amendments to its tax ordinance to conform with the applicable
182 amendments to Part 1, Tax Collection.
183 (6) (a) Regardless of whether a county of the first class creates a tourism tax advisory
184 board in accordance with Section 17-31-8 , the county legislative body of the county of the first
185 class shall create a tax advisory board in accordance with this Subsection (6).
186 (b) The tax advisory board shall be composed of nine members appointed as follows:
187 (i) four members shall be appointed by the county legislative body of the county of the
188 first class as follows:
189 (A) one member shall be a resident of the unincorporated area of the county;
190 (B) two members shall be residents of the incorporated area of the county; and
191 (C) one member shall be a resident of the unincorporated or incorporated area of the
192 county; and
193 (ii) subject to Subsections (6)(c) and (d), five members shall be mayors of cities or
194 towns within the county of the first class appointed by an organization representing all mayors
195 of cities and towns within the county of the first class.
196 (c) Five members of the tax advisory board constitute a quorum.
197 (d) The county legislative body of the county of the first class shall determine:
198 (i) terms of the members of the tax advisory board;
199 (ii) procedures and requirements for removing a member of the tax advisory board;
200 (iii) voting requirements, except that action of the tax advisory board shall be by at
201 least a majority vote of a quorum of the tax advisory board;
202 (iv) chairs or other officers of the tax advisory board;
203 (v) how meetings are to be called and the frequency of meetings; and
204 (vi) the compensation, if any, of members of the tax advisory board.
205 (e) The tax advisory board under this Subsection (6) shall advise the county legislative
206 body of the county of the first class on the expenditure of revenues collected within the county
207 of the first class from the taxes described in Subsection (1)(a).
208 (7) (a) (i) Except as provided in Subsection (7)(a)(ii), a tax authorized under this part
209 shall be administered, collected, and enforced in accordance with:
210 (A) the same procedures used to administer, collect, and enforce the tax under:
211 (I) Part 1, Tax Collection; or

212 (II) Part 2, Local Sales and Use Tax Act; and
213 (B) Chapter 1, General Taxation Policies.
214 (ii) A tax under this part is not subject to Section 59-12-107.1 or Subsections
215 59-12-205 (2) through (7).
216 (b) Except as provided in Subsection (7)(c):
217 (i) for a tax under this part other than the tax under Subsection (1)(a)(i)(B), the
218 commission shall distribute the revenues to the county imposing the tax; and
219 (ii) for a tax under Subsection (1)(a)(i)(B), the commission shall distribute the revenues
220 according to the distribution formula provided in Subsection (8).
221 (c) The commission shall deduct from the distributions under Subsection (7)(b) an
222 administrative charge for collecting the tax as provided in Section 59-12-206 .
223 (8) The commission shall distribute the revenues generated by the tax under Subsection
224 (1)(a)(i)(B) to each county collecting a tax under Subsection (1)(a)(i)(B) according to the
225 following formula:
226 (a) the commission shall distribute 70% of the revenues based on the percentages
227 generated by dividing the revenues collected by each county under Subsection (1)(a)(i)(B) by
228 the total revenues collected by all counties under Subsection (1)(a)(i)(B); and
229 (b) the commission shall distribute 30% of the revenues based on the percentages
230 generated by dividing the population of each county collecting a tax under Subsection
231 (1)(a)(i)(B) by the total population of all counties collecting a tax under Subsection (1)(a)(i)(B).
232 (9) (a) For purposes of this Subsection (9):
233 (i) "Annexation" means an annexation to a county under Title 17, Chapter 2,
234 Annexation to County.
235 (ii) "Annexing area" means an area that is annexed into a county.
236 (b) (i) Except as provided in Subsection (9)(c), if, on or after July 1, 2004, a county
237 enacts or repeals a tax or changes the rate of a tax under this part, the enactment, repeal, or
238 change shall take effect:
239 (A) on the first day of a calendar quarter; and
240 (B) after a 90-day period beginning on the date the commission receives notice meeting
241 the requirements of Subsection (9)(b)(ii) from the county.
242 (ii) The notice described in Subsection (9)(b)(i)(B) shall state:

243 (A) that the county will enact or repeal a tax or change the rate of a tax under this part;
244 (B) the statutory authority for the tax described in Subsection (9)(b)(ii)(A);
245 (C) the effective date of the tax described in Subsection (9)(b)(ii)(A); and
246 (D) if the county enacts the tax or changes the rate of the tax described in Subsection
247 (9)(b)(ii)(A), the rate of the tax.
248 (c) (i) Notwithstanding Subsection (9)(b)(i), for a transaction described in Subsection
249 (9)(c)(iii), the enactment of a tax or a tax rate increase shall take effect on the first day of the
250 first billing period:
251 (A) that begins after the effective date of the enactment of the tax or the tax rate
252 increase; and
253 (B) if the billing period for the transaction begins before the effective date of the
254 enactment of the tax or the tax rate increase imposed under Subsection (1).
255 (ii) Notwithstanding Subsection (9)(b)(i), for a transaction described in Subsection
256 (9)(c)(iii), the repeal of a tax or a tax rate decrease shall take effect on the first day of the last
257 billing period:
258 (A) that began before the effective date of the repeal of the tax or the tax rate decrease;
259 and
260 (B) if the billing period for the transaction begins before the effective date of the repeal
261 of the tax or the tax rate decrease imposed under Subsection (1).
262 (iii) Subsections (9)(c)(i) and (ii) apply to transactions subject to a tax under:
263 (A) Subsection 59-12-103 (1)(e);
264 (B) Subsection 59-12-103 (1)(i); or
265 (C) Subsection 59-12-103 (1)(k).
266 (d) (i) Except as provided in Subsection (9)(e), if, for an annexation that occurs on or
267 after July 1, 2004, the annexation will result in the enactment, repeal, or change in the rate of a
268 tax under this part for an annexing area, the enactment, repeal, or change shall take effect:
269 (A) on the first day of a calendar quarter; and
270 (B) after a 90-day period beginning on the date the commission receives notice meeting
271 the requirements of Subsection (9)(d)(ii) from the county that annexes the annexing area.
272 (ii) The notice described in Subsection (9)(d)(i)(B) shall state:
273 (A) that the annexation described in Subsection (9)(d)(i) will result in an enactment,

274 repeal, or change in the rate of a tax under this part for the annexing area;
275 (B) the statutory authority for the tax described in Subsection (9)(d)(ii)(A);
276 (C) the effective date of the tax described in Subsection (9)(d)(ii)(A); and
277 (D) if the county enacts the tax or changes the rate of the tax described in Subsection
278 (9)(d)(ii)(A), the rate of the tax.
279 (e) (i) Notwithstanding Subsection (9)(d)(i), for a transaction described in Subsection
280 (9)(e)(iii), the enactment of a tax or a tax rate increase shall take effect on the first day of the
281 first billing period:
282 (A) that begins after the effective date of the enactment of the tax or the tax rate
283 increase; and
284 (B) if the billing period for the transaction begins before the effective date of the
285 enactment of the tax or the tax rate increase imposed under Subsection (1).
286 (ii) Notwithstanding Subsection (9)(d)(i), for a transaction described in Subsection
287 (9)(e)(iii), the repeal of a tax or a tax rate decrease shall take effect on the first day of the last
288 billing period:
289 (A) that began before the effective date of the repeal of the tax or the tax rate decrease;
290 and
291 (B) if the billing period for the transaction begins before the effective date of the repeal
292 of the tax or the tax rate decrease imposed under Subsection (1).
293 (iii) Subsections (9)(e)(i) and (ii) apply to transactions subject to a tax under:
294 (A) Subsection 59-12-103 (1)(e);
295 (B) Subsection 59-12-103 (1)(i); or
296 (C) Subsection 59-12-103 (1)(k).
297 Section 5. Section 72-10-102 is amended to read:
298 72-10-102. Definitions.
299 As used in this chapter:
300 (1) "Acrobatics" means the intentional maneuvers of an aircraft not necessary to air
301 navigation.
302 (2) "Aeronautics" means transportation by aircraft, air instruction, the operation, repair,
303 or maintenance of aircraft, and the design, operation, repair, or maintenance of airports, or
304 other air navigation facilities.

305 (3) "Aeronautics instructor" means any individual engaged in giving or offering to give
306 instruction in aeronautics, flying, or ground subjects, either with or without:
307 (a) compensation or other reward;
308 (b) advertising the occupation;
309 (c) calling his facilities an air school, or any equivalent term; or
310 (d) employing or using other instructors.
311 (4) "Aircraft" means any contrivance now known or in the future invented, used, or
312 designed for navigation of or flight in the air.
313 (5) "Air instruction" means the imparting of aeronautical information by any aviation
314 instructor or in any air school or flying club.
315 (6) "Airport" means any area of land, water, or both, that:
316 (a) is used or is made available for landing and takeoff;
317 (b) provides facilities for the shelter, supply, and repair of aircraft, and handling of
318 passengers and cargo; [and]
319 (c) meets the minimum requirements established by the division as to size and design,
320 surface, marking, equipment, and operation; and
321 (d) includes all areas shown as part of the airport in the current airport layout plan as
322 approved by the Federal Aviation Administration.
323 (7) "Airport authority" means a political subdivision of the state, other than a county or
324 municipality, that is authorized by statute to operate an airport.
325 (8) "Airport operator" means a municipality, county, or airport authority that owns or
326 operates a commercial airport.
327 (9) (a) "Airport revenue" means:
328 (i) all fees, charges, rents, or other payments received by or accruing to an airport
329 operator for any of the following reasons:
330 (A) revenue from air carriers, tenants, lessees, purchasers of airport properties, airport
331 permittees making use of airport property and services, and other parties;
332 (B) revenue received from the activities of others or the transfer of rights to others
333 relating to the airport, including revenue received:
334 (I) for the right to conduct an activity on the airport or to use or occupy airport
335 property;

336 (II) for the sale, transfer, or disposition of airport real or personal property, or any
337 interest in that property, including transfer through a condemnation proceeding;
338 (III) for the sale of, or the sale or lease of rights in, mineral, natural, or agricultural
339 products or water owned by the airport operator to be taken from the airport; and
340 (IV) for the right to conduct an activity on, or for the use or disposition of, real or
341 personal property or any interest in real or personal property owned or controlled by the airport
342 operator and used for an airport-related purpose but not located on the airport;
343 (C) revenue received from activities conducted by the airport operator whether on or
344 off the airport, which is directly connected to the airport operator's ownership or operation of
345 the airport; and
346 (ii) state and local taxes on aviation fuel.
347 (b) "Airport revenue" does not include amounts received by an airport operator as
348 passenger facility fees pursuant to 49 U.S.C. Sec. 40117.
349 [(8)] (10) "Air school" means any person engaged in giving, offering to give, or
350 advertising, representing, or holding himself out as giving, with or without compensation or
351 other reward, instruction in aeronautics, flying, or ground subjects, or in more than one of these
352 subjects.
353 [(9)] (11) "Airworthiness" means conformity with requirements prescribed by the
354 Federal Aviation Administration regarding the structure or functioning of aircraft, engine,
355 parts, or accessories.
356 [(10)] (12) "Antique aircraft" means a civil aircraft that is:
357 (a) 30 years old or older, calculated as to include the current year;
358 (b) primarily a collector's item and used solely for recreational or display purposes;
359 (c) not used for daily or regular transportation; and
360 (d) not used for commercial operations.
361 [(11)] (13) "Civil aircraft" means any aircraft other than a public aircraft.
362 [(12)] (14) "Commercial aircraft" means aircraft used for commercial purposes.
363 [(13)] (15) "Commercial airport" means a landing area, landing strip, or airport that
364 may be used for commercial operations.
365 [(14)] (16) "Commercial flight operator" means a person who conducts commercial
366 operations.

367 [(15)] (17) "Commercial operations" means:
368 (a) any operations of an aircraft for compensation or hire or any services performed
369 incidental to the operation of any aircraft for which a fee is charged or compensation is
370 received, including the servicing, maintaining, and repairing of aircraft, the rental or charter of
371 aircraft, the operation of flight or ground schools, the operation of aircraft for the application or
372 distribution of chemicals or other substances, and the operation of aircraft for hunting and
373 fishing; or
374 (b) the brokering or selling of any of these services; but
375 (c) does not include any operations of aircraft as common carriers certificated by the
376 federal government or the services incidental to those operations.
377 [(16)] (18) "Dealer" means any person who is actively engaged in the business of flying
378 for demonstration purposes, or selling or exchanging aircraft, and who has an established place
379 of business.
380 [(17)] (19) "Division" means the Operations Division in the Department of
381 Transportation, created in Section 72-1-204 .
382 [(18)] (20) "Experimental aircraft" means:
383 &n