Third Substitute S.B. 245

Senator Sheldon L. Killpack proposes the following substitute bill:

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 Sales and Use Tax Act and the Transportation Code relating to a
11 local sales and use tax to fund tourism, recreation, cultural, convention, and airport
12 facilities, a local sales and use tax to fund certain airport, highway, or public transit
13 projects or services, and financing of certain fixed guideways with certain airport
14 revenue.
15 Highlighted Provisions:
16 This bill:
17 . addresses an audit relating to the local sales and use tax to fund tourism, recreation,
18 cultural, convention, and airport facilities;
19 . repeals a purpose statement;
20 . provides a part title;
21 . defines terms;
22 . provides that a county legislative body may expend certain local sales and use tax
23 revenues for an airport facility in addition to other purposes allowed by statute;
24 . addresses provisions relating to ordinances and bonding for purposes of the local
25 sales and use tax to fund tourism, recreation, cultural, convention, and airport

26 facilities;
27 . authorizes a county of the second class to impose a local option sales and use tax to
28 fund certain airport, highway, or public transit projects or services;
29 . addresses the procedures and requirements for imposing the local option sales and
30 use tax to fund certain airport, highway, or public transit projects or services,
31 including providing that the sales and use tax is an agreement sales and use tax;
32 . modifies the sources of funding for the Local Transportation Corridor Preservation
33 Fund;
34 . creates a special revenue fund known as the County of the Second Class State
35 Highway Projects Fund, including:
36 . addressing funding of the fund; and
37 . addressing the purposes for which fund monies may be expended;
38 . provides that an airport operator may not use airport revenue to contribute to
39 constructing, equipping, maintaining, or operating a fixed guideway; and
40 . makes technical changes.
41 Monies Appropriated in this Bill:
42 None
43 Other Special Clauses:
44 None
45 Utah Code Sections Affected:
46 AMENDS:
47 17-31-5.5, as last amended by Laws of Utah 2007, Chapter 3
48 59-12-102, as last amended by Laws of Utah 2007, Chapters 9, 214, 224, and 288
49 59-12-602, as last amended by Laws of Utah 1995, Chapter 248
50 59-12-603, as last amended by Laws of Utah 2007, Chapters 3, 9, and 219
51 72-2-117.5, as last amended by Laws of Utah 2007, Chapters 181 and 201
52 72-10-102, as last amended by Laws of Utah 2003, Chapter 183
53 ENACTS:
54 59-12-601.1, Utah Code Annotated 1953
55 59-12-1901, Utah Code Annotated 1953
56 59-12-1902, Utah Code Annotated 1953

57 59-12-1903, Utah Code Annotated 1953
58 72-2-121.2, Utah Code Annotated 1953
59 72-10-215, Utah Code Annotated 1953
60 REPEALS:
61 59-12-601, as last amended by Laws of Utah 1991, Chapter 265
62
63 Be it enacted by the Legislature of the state of Utah:
64 Section 1. Section 17-31-5.5 is amended to read:
65 17-31-5.5. Independent audit -- Report to county legislative body -- Content.
66 (1) The legislative body of each county imposing the transient room tax provided for in
67 Section 59-12-301 shall annually engage an independent auditor to perform an audit to verify
68 that transient room tax funds are used only as authorized by this chapter and to report the
69 findings of the audit to the county legislative body.
70 (2) Subsection (1) applies to the tourism, recreation, cultural, [and] convention, and
71 airport facilities tax provided for in Section 59-12-603 , except that the audit verification
72 required under this Subsection (2) shall be for the uses authorized under Section 59-12-603 .
73 (3) The report required under Subsection (1) shall include a breakdown of expenditures
74 into the following categories:
75 (a) for the transient room tax, identification of expenditures for:
76 (i) establishing and promoting:
77 (A) recreation;
78 (B) tourism;
79 (C) film production; and
80 (D) conventions;
81 (ii) acquiring, leasing, constructing, furnishing, or operating:
82 (A) convention meeting rooms;
83 (B) exhibit halls;
84 (C) visitor information centers;
85 (D) museums; and
86 (E) related facilities;
87 (iii) acquiring or leasing land required for or related to the purposes listed in

88 Subsection (3)(a)(ii);
89 (iv) mitigation costs as identified in Subsection 17-31-2 (1)(d); and
90 (v) making the annual payment of principal, interest, premiums, and necessary reserves
91 for any or the aggregate of bonds issued to pay for costs referred to in Subsections
92 17-31-2 (2)(c) and (3)(a); and
93 (b) for the tourism, recreation, cultural, [and] convention, and airport facilities tax,
94 identification of expenditures for:
95 (i) financing tourism promotion, which means an activity to develop, encourage,
96 solicit, or market tourism that attracts transient guests to the county, including planning,
97 product development, and advertising;
98 (ii) the development, operation, and maintenance of the following facilities as defined
99 in Section 59-12-602 :
100 (A) [tourist facilities] an airport facility;
101 (B) [recreation facilities] a convention facility;
102 (C) a cultural [facilities; and] facility;
103 (D) [convention facilities] a recreation facility; and
104 (E) a tourist facility; and
105 (iii) a pledge as security for evidences of indebtedness under Subsection 59-12-603 (3).
106 (4) A county legislative body shall provide a copy of a report it receives under this
107 section to:
108 (a) the Governor's Office of Economic Development;
109 (b) its tourism tax advisory board; and
110 (c) the Office of the Legislative Fiscal Analyst.
111 Section 2. Section 59-12-102 is amended to read:
112 59-12-102. Definitions.
113 As used in this chapter:
114 (1) (a) "Admission or user fees" includes season passes.
115 (b) "Admission or user fees" does not include annual membership dues to private
116 organizations.
117 (2) "Agreement" means the Streamlined Sales and Use Tax Agreement described in
118 Section 59-12-102.1 .

119 (3) "Agreement combined tax rate" means the sum of the tax rates:
120 (a) listed under Subsection (4); and
121 (b) that are imposed within a local taxing jurisdiction.
122 (4) "Agreement sales and use tax" means a tax imposed under:
123 (a) Subsection 59-12-103 (2)(a)(i);
124 (b) Subsection 59-12-103 (2)(b)(i);
125 (c) Subsection 59-12-103 (2)(c)(i);
126 (d) Subsection 59-12-103 (2)(d)(i);
127 (e) Subsection 59-12-103 (2)(e)(ii)(A);
128 (f) Subsection 59-12-103 (2)(e)(iii)(A);
129 (g) Section 59-12-204 ;
130 (h) Section 59-12-401 ;
131 (i) Section 59-12-402 ;
132 (j) Section 59-12-501 ;
133 (k) Section 59-12-502 ;
134 (l) Section 59-12-703 ;
135 (m) Section 59-12-802 ;
136 (n) Section 59-12-804 ;
137 (o) Section 59-12-1001 ;
138 (p) Section 59-12-1102 ;
139 (q) Section 59-12-1302 ;
140 (r) Section 59-12-1402 ;
141 (s) Section 59-12-1503 ; [or]
142 (t) Section 59-12-1703 [.]; or
143 (u) Section 59-12-1903 .
144 (5) "Aircraft" is as defined in Section 72-10-102 .
145 (6) "Alcoholic beverage" means a beverage that:
146 (a) is suitable for human consumption; and
147 (b) contains .5% or more alcohol by volume.
148 (7) "Area agency on aging" is as defined in Section 62A-3-101 .
149 (8) "Assisted amusement device" means an amusement device, skill device, or ride

150 device that is started and stopped by an individual:
151 (a) who is not the purchaser or renter of the right to use or operate the amusement
152 device, skill device, or ride device; and
153 (b) at the direction of the seller of the right to use the amusement device, skill device,
154 or ride device.
155 (9) "Assisted cleaning or washing of tangible personal property" means cleaning or
156 washing of tangible personal property if the cleaning or washing labor is primarily performed
157 by an individual:
158 (a) who is not the purchaser of the cleaning or washing of the tangible personal
159 property; and
160 (b) at the direction of the seller of the cleaning or washing of the tangible personal
161 property.
162 (10) "Authorized carrier" means:
163 (a) in the case of vehicles operated over public highways, the holder of credentials
164 indicating that the vehicle is or will be operated pursuant to both the International Registration
165 Plan and the International Fuel Tax Agreement;
166 (b) in the case of aircraft, the holder of a Federal Aviation Administration operating
167 certificate or air carrier's operating certificate; or
168 (c) in the case of locomotives, freight cars, railroad work equipment, or other rolling
169 stock, the holder of a certificate issued by the United States Surface Transportation Board.
170 (11) (a) Except as provided in Subsection (11)(b), "biomass energy" means any of the
171 following that is used as the primary source of energy to produce fuel or electricity:
172 (i) material from a plant or tree; or
173 (ii) other organic matter that is available on a renewable basis, including:
174 (A) slash and brush from forests and woodlands;
175 (B) animal waste;
176 (C) methane produced:
177 (I) at landfills; or
178 (II) as a byproduct of the treatment of wastewater residuals;
179 (D) aquatic plants; and
180 (E) agricultural products.

181 (b) "Biomass energy" does not include:
182 (i) black liquor;
183 (ii) treated woods; or
184 (iii) biomass from municipal solid waste other than methane produced:
185 (A) at landfills; or
186 (B) as a byproduct of the treatment of wastewater residuals.
187 (12) (a) "Bundled transaction" means the sale of two or more items of tangible personal
188 property if:
189 (i) one or more of the items of tangible personal property is food and food ingredients;
190 and
191 (ii) the items of tangible personal property are:
192 (A) distinct and identifiable; and
193 (B) sold for one price that is not itemized.
194 (b) "Bundled transaction" does not include the sale of tangible personal property if the
195 sales price varies, or is negotiable, on the basis of the selection by the purchaser of the items of
196 tangible personal property included in the transaction.
197 (c) For purposes of Subsection (12)(a)(ii)(A), tangible personal property that is distinct
198 and identifiable does not include:
199 (i) packaging that:
200 (A) accompanies the sale of the tangible personal property; and
201 (B) is incidental or immaterial to the sale of the tangible personal property;
202 (ii) tangible personal property provided free of charge with the purchase of another
203 item of tangible personal property; or
204 (iii) an item of tangible personal property included in the definition of "purchase
205 price."
206 (d) For purposes of Subsection (12)(c)(ii), an item of tangible personal property is
207 provided free of charge with the purchase of another item of tangible personal property if the
208 sales price of the purchased item of tangible personal property does not vary depending on the
209 inclusion of the tangible personal property provided free of charge.
210 (13) "Certified automated system" means software certified by the governing board of
211 the agreement in accordance with Section 59-12-102.1 that:

212 (a) calculates the agreement sales and use tax imposed within a local taxing
213 jurisdiction:
214 (i) on a transaction; and
215 (ii) in the states that are members of the agreement;
216 (b) determines the amount of agreement sales and use tax to remit to a state that is a
217 member of the agreement; and
218 (c) maintains a record of the transaction described in Subsection (13)(a)(i).
219 (14) "Certified service provider" means an agent certified:
220 (a) by the governing board of the agreement in accordance with Section 59-12-102.1 ;
221 and
222 (b) to perform all of a seller's sales and use tax functions for an agreement sales and
223 use tax other than the seller's obligation under Section 59-12-107.4 to remit a tax on the seller's
224 own purchases.
225 (15) (a) Subject to Subsection (15)(b), "clothing" means all human wearing apparel
226 suitable for general use.
227 (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
228 commission shall make rules:
229 (i) listing the items that constitute "clothing"; and
230 (ii) that are consistent with the list of items that constitute "clothing" under the
231 agreement.
232 (16) "Coal-to-liquid" means the process of converting coal into a liquid synthetic fuel.
233 (17) "Commercial use" means the use of gas, electricity, heat, coal, fuel oil, or other
234 fuels that does not constitute industrial use under Subsection (42) or residential use under
235 Subsection (80).
236 (18) (a) "Common carrier" means a person engaged in or transacting the business of
237 transporting passengers, freight, merchandise, or other property for hire within this state.
238 (b) (i) "Common carrier" does not include a person who, at the time the person is
239 traveling to or from that person's place of employment, transports a passenger to or from the
240 passenger's place of employment.
241 (ii) For purposes of Subsection (18)(b)(i), in accordance with Title 63, Chapter 46a,
242 Utah Administrative Rulemaking Act, the commission may make rules defining what

243 constitutes a person's place of employment.
244 (19) "Component part" includes:
245 (a) poultry, dairy, and other livestock feed, and their components;
246 (b) baling ties and twine used in the baling of hay and straw;
247 (c) fuel used for providing temperature control of orchards and commercial
248 greenhouses doing a majority of their business in wholesale sales, and for providing power for
249 off-highway type farm machinery; and
250 (d) feed, seeds, and seedlings.
251 (20) "Computer" means an electronic device that accepts information:
252 (a) (i) in digital form; or
253 (ii) in a form similar to digital form; and
254 (b) manipulates that information for a result based on a sequence of instructions.
255 (21) "Computer software" means a set of coded instructions designed to cause:
256 (a) a computer to perform a task; or
257 (b) automatic data processing equipment to perform a task.
258 (22) "Construction materials" means any tangible personal property that will be
259 converted into real property.
260 (23) "Delivered electronically" means delivered to a purchaser by means other than
261 tangible storage media.
262 (24) (a) "Delivery charge" means a charge:
263 (i) by a seller of:
264 (A) tangible personal property; or
265 (B) services; and
266 (ii) for preparation and delivery of the tangible personal property or services described
267 in Subsection (24)(a)(i) to a location designated by the purchaser.
268 (b) "Delivery charge" includes a charge for the following:
269 (i) transportation;
270 (ii) shipping;
271 (iii) postage;
272 (iv) handling;
273 (v) crating; or

274 (vi) packing.
275 (25) (a) "Dental prosthesis" means the following if fabricated in a laboratory:
276 (i) a bridge;
277 (ii) a crown if that crown covers at least 75% of a tooth structure;
278 (iii) a denture;
279 (iv) an implant;
280 (v) an orthodontic device designed to:
281 (A) retain the position or spacing of teeth; and
282 (B) replace a missing tooth;
283 (vi) a partial denture; or
284 (vii) a device similar to Subsections (25)(a)(i) through (vi).
285 (b) "Dental prosthesis" does not include an appliance or device, other than a device
286 described in Subsection (25)(a), if that appliance or device is used in orthodontic therapy to
287 apply force to the teeth and their supporting structures to:
288 (i) produce changes in their relationship to each other; and
289 (ii) control their growth and development.
290 (26) "Dietary supplement" means a product, other than tobacco, that:
291 (a) is intended to supplement the diet;
292 (b) contains one or more of the following dietary ingredients:
293 (i) a vitamin;
294 (ii) a mineral;
295 (iii) an herb or other botanical;
296 (iv) an amino acid;
297 (v) a dietary substance for use by humans to supplement the diet by increasing the total
298 dietary intake; or
299 (vi) a concentrate, metabolite, constituent, extract, or combination of any ingredient
300 described in Subsections (26)(b)(i) through (v);
301 (c) (i) except as provided in Subsection (26)(c)(ii), is intended for ingestion in:
302 (A) tablet form;
303 (B) capsule form;
304 (C) powder form;

305 (D) softgel form;
306 (E) gelcap form; or
307 (F) liquid form; or
308 (ii) notwithstanding Subsection (26)(c)(i), if the product is not intended for ingestion in
309 a form described in Subsections (26)(c)(i)(A) through (F), is not represented:
310 (A) as conventional food; and
311 (B) for use as a sole item of:
312 (I) a meal; or
313 (II) the diet; and
314 (d) is required to be labeled as a dietary supplement:
315 (i) identifiable by the "Supplemental Facts" box found on the label; and
316 (ii) as required by 21 C.F.R. Sec. 101.36.
317 (27) (a) "Direct mail" means printed material delivered or distributed by United States
318 mail or other delivery service:
319 (i) to:
320 (A) a mass audience; or
321 (B) addressees on a mailing list provided by a purchaser of the mailing list; and
322 (ii) if the cost of the printed material is not billed directly to the recipients.
323 (b) "Direct mail" includes tangible personal property supplied directly or indirectly by a
324 purchaser to a seller of direct mail for inclusion in a package containing the printed material.
325 (c) "Direct mail" does not include multiple items of printed material delivered to a
326 single address.
327 (28) (a) "Disposable home medical equipment or supplies" means medical equipment
328 or supplies that:
329 (i) cannot withstand repeated use; and
330 (ii) are purchased by, for, or on behalf of a person other than:
331 (A) a health care facility as defined in Section 26-21-2 ;
332 (B) a health care provider as defined in Section 78-14-3 ;
333 (C) an office of a health care provider described in Subsection (28)(a)(ii)(B); or
334 (D) a person similar to a person described in Subsections (28)(a)(ii)(A) through (C).
335 (b) "Disposable home medical equipment or supplies" does not include:

336 (i) a drug;
337 (ii) durable medical equipment;
338 (iii) a hearing aid;
339 (iv) a hearing aid accessory;
340 (v) mobility enhancing equipment; or
341 (vi) tangible personal property used to correct impaired vision, including:
342 (A) eyeglasses; or
343 (B) contact lenses.
344 (c) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
345 commission may by rule define what constitutes medical equipment or supplies.
346 (29) (a) "Drug" means a compound, substance, or preparation, or a component of a
347 compound, substance, or preparation that is:
348 (i) recognized in:
349 (A) the official United States Pharmacopoeia;
350 (B) the official Homeopathic Pharmacopoeia of the United States;
351 (C) the official National Formulary; or
352 (D) a supplement to a publication listed in Subsections (29)(a)(i)(A) through (C);
353 (ii) intended for use in the:
354 (A) diagnosis of disease;
355 (B) cure of disease;
356 (C) mitigation of disease;
357 (D) treatment of disease; or
358 (E) prevention of disease; or
359 (iii) intended to affect:
360 (A) the structure of the body; or
361 (B) any function of the body.
362 (b) "Drug" does not include:
363 (i) food and food ingredients;
364 (ii) a dietary supplement;
365 (iii) an alcoholic beverage; or
366 (iv) a prosthetic device.

367 (30) (a) Except as provided in Subsection (30)(c), "durable medical equipment" means
368 equipment that:
369 (i) can withstand repeated use;
370 (ii) is primarily and customarily used to serve a medical purpose;
371 (iii) generally is not useful to a person in the absence of illness or injury; and
372 (iv) is not worn in or on the body.
373 (b) "Durable medical equipment" includes parts used in the repair or replacement of the
374 equipment described in Subsection (30)(a).
375 (c) Notwithstanding Subsection (30)(a), "durable medical equipment" does not include
376 mobility enhancing equipment.
377 (31) "Electronic" means:
378 (a) relating to technology; and
379 (b) having:
380 (i) electrical capabilities;
381 (ii) digital capabilities;
382 (iii) magnetic capabilities;
383 (iv) wireless capabilities;
384 (v) optical capabilities;
385 (vi) electromagnetic capabilities; or
386 (vii) capabilities similar to Subsections (31)(b)(i) through (vi).
387 (32) "Employee" is as defined in Section 59-10-401 .
388 (33) "Fixed guideway" means a public transit facility that uses and occupies:
389 (a) rail for the use of public transit; or
390 (b) a separate right-of-way for the use of public transit.
391 (34) (a) "Food and food ingredients" means substances:
3