Fifth Substitute S.B. 245

Representative David Clark 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 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 within its boundaries;
25 . repeals a purpose statement;

26 . provides a part title;
27 . defines terms;
28 . provides that a county legislative body may expend certain local sales and use tax
29 revenues for an airport facility in addition to other purposes allowed by statute;
30 . addresses provisions relating to ordinances and bonding for purposes of the local
31 sales and use tax to fund tourism, recreation, cultural, convention, and airport
32 facilities;
33 . authorizes a county of the second class to impose a local option sales and use tax to
34 fund certain airport, highway, or public transit projects or services;
35 . addresses the procedures and requirements for imposing the local option sales and
36 use tax to fund certain airport, highway, or public transit projects or services,
37 including providing that the sales and use tax is an agreement sales and use tax;
38 . imposes a state sales and use tax under certain circumstances;
39 . addresses the procedures and requirements for imposing the state sales and use tax,
40 including providing that:
41 . the sales and use tax is an agreement sales and use tax; and
42 . the revenues are distributed to certain public transit districts;
43 . modifies the sources of funding for the Local Transportation Corridor Preservation
44 Fund;
45 . creates a special revenue fund known as the County of the Second Class State
46 Highway Projects Fund, including:
47 . addressing funding of the fund; and
48 . addressing the purposes for which fund monies may be expended;
49 . provides that an airport operator may not use airport revenue to contribute to
50 constructing, equipping, maintaining, or operating a fixed guideway; and
51 . makes technical changes.
52 Monies Appropriated in this Bill:
53 None
54 Other Special Clauses:
55 This bill provides effective dates.
56 This bill coordinates with H.B. 206, Tax Amendments, to make substantive and

57 technical amendments, including enacting Sections 59-12-1904, 59-12-1905, 59-12-1906,
58 59-12-2005, 59-12-2006, and 59-12-2007.
59 Utah Code Sections Affected:
60 AMENDS:
61 11-41-102, as last amended by Laws of Utah 2007, Chapter 9
62 17-31-5.5, as last amended by Laws of Utah 2007, Chapter 3
63 41-1a-1222, as last amended by Laws of Utah 2007, Chapters 201 and 274
64 59-12-102, as last amended by Laws of Utah 2007, Chapters 9, 214, 224, and 288
65 59-12-103, as last amended by Laws of Utah 2007, Chapters 9, 101, 126, 206, and 288
66 59-12-104.2, as last amended by Laws of Utah 2003, Chapter 312
67 59-12-108, as last amended by Laws of Utah 2007, Chapter 9
68 59-12-602, as last amended by Laws of Utah 1995, Chapter 248
69 59-12-603, as last amended by Laws of Utah 2007, Chapters 3, 9, and 219
70 72-2-117.5, as last amended by Laws of Utah 2007, Chapters 181 and 201
71 72-2-121, as last amended by Laws of Utah 2007, Chapter 201
72 72-10-102, as last amended by Laws of Utah 2003, Chapter 183
73 ENACTS:
74 59-12-601.1, Utah Code Annotated 1953
75 59-12-1901, Utah Code Annotated 1953
76 59-12-1902, Utah Code Annotated 1953
77 59-12-1903, Utah Code Annotated 1953
78 59-12-2001, Utah Code Annotated 1953
79 59-12-2002, Utah Code Annotated 1953
80 59-12-2003, Utah Code Annotated 1953
81 59-12-2004, Utah Code Annotated 1953
82 72-2-121.2, Utah Code Annotated 1953
83 72-10-215, Utah Code Annotated 1953
84 REPEALS:
85 59-12-601, as last amended by Laws of Utah 1991, Chapter 265
86
87 Be it enacted by the Legislature of the state of Utah:

88 Section 1. Section 11-41-102 is amended to read:
89 11-41-102. Definitions.
90 As used in this chapter:
91 (1) "Agreement" means an oral or written agreement between a:
92 (a) (i) county; or
93 (ii) municipality; and
94 (b) person.
95 (2) "Municipality" means a:
96 (a) city; or
97 (b) town.
98 (3) "Payment" includes:
99 (a) a payment;
100 (b) a rebate;
101 (c) a refund; or
102 (d) an amount similar to Subsections (3)(a) through (c).
103 (4) "Regional retail business" means a:
104 (a) retail business that occupies a floor area of more than 80,000 square feet;
105 (b) dealer as defined in Section 41-1a-102 ;
106 (c) retail shopping facility that has at least two anchor tenants if the total number of
107 anchor tenants in the shopping facility occupy a total floor area of more than 150,000 square
108 feet; or
109 (d) grocery store that occupies a floor area of more than 30,000 square feet.
110 (5) (a) "Sales and use tax" means a tax:
111 (i) imposed on transactions within a:
112 (A) county; or
113 (B) municipality; and
114 (ii) except as provided in Subsection (5)(b), authorized under Title 59, Chapter 12,
115 Sales and Use Tax Act.
116 (b) Notwithstanding Subsection (5)(a)(ii), "sales and use tax" does not include a tax
117 authorized under:
118 (i) Subsection 59-12-103 (2)(a)(i);

119 (ii) Subsection 59-12-103 (2)(b)(i);
120 (iii) Subsection 59-12-103 (2)(c)(i);
121 (iv) Subsection 59-12-103 (2)(d)(i)(A);
122 (v) Subsection 59-12-103 (2)(e)(ii)(A);
123 (vi) Subsection 59-12-103 (2)(e)(iii)(A);
124 (vii) Section 59-12-301 ;
125 (viii) Section 59-12-352 ;
126 (ix) Section 59-12-353 ;
127 (x) Section 59-12-603 ; or
128 (xi) Section 59-12-1201 .
129 (6) (a) "Sales and use tax incentive payment" means a payment of revenues:
130 (i) to a person;
131 (ii) by a:
132 (A) county; or
133 (B) municipality;
134 (iii) to induce the person to locate or relocate a regional retail business within the:
135 (A) county; or
136 (B) municipality; and
137 (iv) that are derived from a sales and use tax.
138 (b) "Sales and use tax incentive payment" does not include funding for public
139 infrastructure.
140 Section 2. Section 17-31-5.5 is amended to read:
141 17-31-5.5. Independent audit -- Report to county legislative body -- Content.
142 (1) The legislative body of each county imposing the transient room tax provided for in
143 Section 59-12-301 shall annually engage an independent auditor to perform an audit to verify
144 that transient room tax funds are used only as authorized by this chapter and to report the
145 findings of the audit to the county legislative body.
146 (2) Subsection (1) applies to the tourism, recreation, cultural, [and] convention, and
147 airport facilities tax provided for in Section 59-12-603 , except that the audit verification
148 required under this Subsection (2) shall be for the uses authorized under Section 59-12-603 .
149 (3) The report required under Subsection (1) shall include a breakdown of expenditures

150 into the following categories:
151 (a) for the transient room tax, identification of expenditures for:
152 (i) establishing and promoting:
153 (A) recreation;
154 (B) tourism;
155 (C) film production; and
156 (D) conventions;
157 (ii) acquiring, leasing, constructing, furnishing, or operating:
158 (A) convention meeting rooms;
159 (B) exhibit halls;
160 (C) visitor information centers;
161 (D) museums; and
162 (E) related facilities;
163 (iii) acquiring or leasing land required for or related to the purposes listed in
164 Subsection (3)(a)(ii);
165 (iv) mitigation costs as identified in Subsection 17-31-2 (1)(d); and
166 (v) making the annual payment of principal, interest, premiums, and necessary reserves
167 for any or the aggregate of bonds issued to pay for costs referred to in Subsections
168 17-31-2 (2)(c) and (3)(a); and
169 (b) for the tourism, recreation, cultural, [and] convention, and airport facilities tax,
170 identification of expenditures for:
171 (i) financing tourism promotion, which means an activity to develop, encourage,
172 solicit, or market tourism that attracts transient guests to the county, including planning,
173 product development, and advertising;
174 (ii) the development, operation, and maintenance of the following facilities as defined
175 in Section 59-12-602 :
176 (A) [tourist facilities] an airport facility;
177 (B) [recreation facilities] a convention facility;
178 (C) a cultural [facilities; and] facility;
179 (D) [convention facilities] a recreation facility; and
180 (E) a tourist facility; and

181 (iii) a pledge as security for evidences of indebtedness under Subsection 59-12-603 (3).
182 (4) A county legislative body shall provide a copy of a report it receives under this
183 section to:
184 (a) the Governor's Office of Economic Development;
185 (b) its tourism tax advisory board; and
186 (c) the Office of the Legislative Fiscal Analyst.
187 Section 3. Section 41-1a-1222 is amended to read:
188 41-1a-1222. Local option highway construction and transportation corridor
189 preservation fee -- Exemptions -- Deposit -- County ordinance -- Notice.
190 (1) (a) (i) A county legislative body may impose a local option highway construction
191 and transportation corridor preservation fee of up to $10 on each motor vehicle registration
192 within the county.
193 (ii) A fee imposed under Subsection (1)(a)(i) shall be set in whole dollar increments.
194 (b) If imposed under Subsection (1)(a), at the time application is made for registration
195 or renewal of registration of a motor vehicle under this chapter, the applicant shall pay the local
196 option highway construction and transportation corridor preservation fee established by the
197 county legislative body.
198 (c) The following are exempt from the fee required under Subsection (1)(a):
199 (i) a motor vehicle that is exempt from the registration fee under Section 41-1a-1209 or
200 Subsection 41-1a-419 (3);
201 (ii) a commercial vehicle with an apportioned registration under Section 41-1a-301 ;
202 and
203 (iii) a motor vehicle with a Purple Heart special group license plate issued in
204 accordance with Section 41-1a-421 .
205 (2) (a) Except as provided in Subsection (2)(b), the revenue generated under this
206 section shall be:
207 (i) deposited in the Local Transportation Corridor Preservation Fund created in Section
208 72-2-117.5 ;
209 (ii) credited to the county from which it is generated; and
210 (iii) used and distributed in accordance with Section 72-2-117.5 .
211 (b) [Seventy percent of the] The revenue generated by a fee imposed under this section

212 in a county of the first class shall be[:] deposited or transferred as follows:
213 (i) 50% of the revenue shall be:
214 [(i)] (A) deposited in the County of the First Class State Highway Projects Fund
215 created in Section 72-2-121 ; and
216 [(ii)] (B) used in accordance with Section 72-2-121 [.];
217 (ii) 20% of the revenue shall be:
218 (A) transferred to the legislative body of a city of the first class:
219 (I) located in a county of the first class; and
220 (II) that has:
221 (Aa) an international airport within its boundaries; and
222 (Bb) a United States customs office on the premises of the international airport
223 described in Subsection (2)(b)(ii)(A)(II)(Aa); and
224 (B) used by the city described in Subsection (2)(b)(ii)(A) for highway construction,
225 reconstruction, or maintenance projects; and
226 (iii) 30% of the revenue shall be deposited, credited, and used as provided in
227 Subsection (2)(a).
228 (3) To impose or change the amount of a fee under this section, the county legislative
229 body shall pass an ordinance:
230 (a) approving the fee;
231 (b) setting the amount of the fee; and
232 (c) providing an effective date for the fee as provided in Subsection (4).
233 (4) (a) If a county legislative body enacts, changes, or repeals a fee under this section,
234 the enactment, change, or repeal shall take effect on July 1 if the commission receives notice
235 meeting the requirements of Subsection (4)(b) from the county prior to April 1.
236 (b) The notice described in Subsection (4)(a) shall:
237 (i) state that the county will enact, change, or repeal a fee under this part;
238 (ii) include a copy of the ordinance imposing the fee; and
239 (iii) if the county enacts or changes the fee under this section, state the amount of the
240 fee.
241 Section 4. Section 59-12-102 is amended to read:
242 59-12-102. Definitions.

243 As used in this chapter:
244 (1) (a) "Admission or user fees" includes season passes.
245 (b) "Admission or user fees" does not include annual membership dues to private
246 organizations.
247 (2) "Agreement" means the Streamlined Sales and Use Tax Agreement described in
248 Section 59-12-102.1 .
249 (3) "Agreement combined tax rate" means the sum of the tax rates:
250 (a) listed under Subsection (4); and
251 (b) that are imposed within a local taxing jurisdiction.
252 (4) "Agreement sales and use tax" means a tax imposed under:
253 (a) Subsection 59-12-103 (2)(a)(i)(A);
254 (b) Subsection 59-12-103 (2)(b)(i);
255 (c) Subsection 59-12-103 (2)(c)(i);
256 (d) Subsection 59-12-103 (2)(d)(i)(A)(I);
257 (e) Subsection 59-12-103 (2)(e)(ii)(A)(I);
258 (f) Subsection 59-12-103 (2)(e)(iii)(A)(I);
259 (g) Section 59-12-204 ;
260 (h) Section 59-12-401 ;
261 (i) Section 59-12-402 ;
262 (j) Section 59-12-501 ;
263 (k) Section 59-12-502 ;
264 (l) Section 59-12-703 ;
265 (m) Section 59-12-802 ;
266 (n) Section 59-12-804 ;
267 (o) Section 59-12-1001 ;
268 (p) Section 59-12-1102 ;
269 (q) Section 59-12-1302 ;
270 (r) Section 59-12-1402 ;
271 (s) Section 59-12-1503 ; [or]
272 (t) Section 59-12-1703 [.];
273 (u) Section 59-12-1903 ; or

274 (v) Section 59-12-2003 .
275 (5) "Aircraft" is as defined in Section 72-10-102 .
276 (6) "Alcoholic beverage" means a beverage that:
277 (a) is suitable for human consumption; and
278 (b) contains .5% or more alcohol by volume.
279 (7) "Area agency on aging" is as defined in Section 62A-3-101 .
280 (8) "Assisted amusement device" means an amusement device, skill device, or ride
281 device that is started and stopped by an individual:
282 (a) who is not the purchaser or renter of the right to use or operate the amusement
283 device, skill device, or ride device; and
284 (b) at the direction of the seller of the right to use the amusement device, skill device,
285 or ride device.
286 (9) "Assisted cleaning or washing of tangible personal property" means cleaning or
287 washing of tangible personal property if the cleaning or washing labor is primarily performed
288 by an individual:
289 (a) who is not the purchaser of the cleaning or washing of the tangible personal
290 property; and
291 (b) at the direction of the seller of the cleaning or washing of the tangible personal
292 property.
293 (10) "Authorized carrier" means:
294 (a) in the case of vehicles operated over public highways, the holder of credentials
295 indicating that the vehicle is or will be operated pursuant to both the International Registration
296 Plan and the International Fuel Tax Agreement;
297 (b) in the case of aircraft, the holder of a Federal Aviation Administration operating
298 certificate or air carrier's operating certificate; or
299 (c) in the case of locomotives, freight cars, railroad work equipment, or other rolling
300 stock, the holder of a certificate issued by the United States Surface Transportation Board.
301 (11) (a) Except as provided in Subsection (11)(b), "biomass energy" means any of the
302 following that is used as the primary source of energy to produce fuel or electricity:
303 (i) material from a plant or tree; or
304 (ii) other organic matter that is available on a renewable basis, including:

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

336 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
344 jurisdiction:
345 (i) on a transaction; and
346 (ii) in the states that are members of the agreement;
347 (b) determines the amount of agreement sales and use tax to remit to a state that is a
348 member of the agreement; and
349 (c) maintains a record of the transaction described in Subsection (13)(a)(i).
350 (14) "Certified service provider" means an agent certified:
351 (a) by the governing board of the agreement in accordance with Section 59-12-102.1 ;
352 and
353 (b) to perform all of a seller's sales and use tax functions for an agreement sales and
354 use tax other than the seller's obligation under Section 59-12-107.4 to remit a tax on the seller's
355 own purchases.
356 (15) (a) Subject to Subsection (15)(b), "clothing" means all human wearing apparel
357 suitable for general use.
358 (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
359 commission shall make rules:
360 (i) listing the items that constitute "clothing"; and
361 (ii) that are consistent with the list of items that constitute "clothing" under the
362 agreement.
363 (16) "Coal-to-liquid" means the process of converting coal into a liquid synthetic fuel.
364 (17) "Commercial use" means the use of gas, electricity, heat, coal, fuel oil, or other
365 fuels that does not constitute industrial use under Subsection (42) or residential use under
366 Subsection (80).

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