1     
SALES AND USE TAX EARMARK AMENDMENTS

2     
2016 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Daniel McCay

5     
Senate Sponsor: ____________

6     

7     LONG TITLE
8     General Description:
9          This bill modifies provisions relating to sales and use taxes.
10     Highlighted Provisions:
11          This bill:
12          ▸     repeals certain earmarks of the state sales and use tax; and
13          ▸     makes technical and conforming changes.
14     Money Appropriated in this Bill:
15          None
16     Other Special Clauses:
17          This bill provides a special effective date.
18     Utah Code Sections Affected:
19     AMENDS:
20          4-18-106, as last amended by Laws of Utah 2014, Chapter 383
21          59-12-103, as last amended by Laws of Utah 2015, Chapter 283
22          59-12-1201, as last amended by Laws of Utah 2012, Chapter 121
23          63N-2-510, as last amended by Laws of Utah 2015, Chapter 417 and renumbered and
24     amended by Laws of Utah 2015, Chapter 283
25          63N-2-512, as last amended by Laws of Utah 2015, Chapter 417 and renumbered and
26     amended by Laws of Utah 2015, Chapter 283
27          73-10c-4, as last amended by Laws of Utah 2007, Chapter 142
28     REPEALS:
29          73-10-31, as enacted by Laws of Utah 1996, Chapter 199
30     

31     Be it enacted by the Legislature of the state of Utah:
32          Section 1. Section 4-18-106 is amended to read:
33          4-18-106. Agriculture Resource Development Fund -- Contents -- Use of fund
34     money -- Authority board.
35          (1) There is created a revolving loan fund known as the Agriculture Resource
36     Development Fund.
37          (2) The Agriculture Resource Development Fund shall consist of:
38          (a) money appropriated to it by the Legislature;
39          [(b) sales and use tax receipts transferred to the fund in accordance with Section
40     59-12-103;]
41          [(c)] (b) money received for the repayment of loans made from the fund;
42          [(d)] (c) money made available to the state for agriculture resource development from
43     any source; and
44          [(e)] (d) interest earned on the fund.
45          (3) The commission shall make loans from the Agriculture Resource Development
46     Fund as provided by Subsections 4-18-105(1)(e)(i) through (v).
47          (4) The commission may appoint an advisory board that shall:
48          (a) oversee the award process for loans, as described in this section;
49          (b) make recommendations to the commission regarding loans; and
50          (c) recommend the policies and procedures for the Agriculture Resource Development
51     Fund, consistent with statute.
52          Section 2. Section 59-12-103 is amended to read:
53          59-12-103. Sales and use tax base -- Rates -- Effective dates -- Use of sales and use
54     tax revenues.
55          (1) A tax is imposed on the purchaser as provided in this part for amounts paid or
56     charged for the following transactions:
57          (a) retail sales of tangible personal property made within the state;
58          (b) amounts paid for:
59          (i) telecommunications service, other than mobile telecommunications service, that
60     originates and terminates within the boundaries of this state;
61          (ii) mobile telecommunications service that originates and terminates within the
62     boundaries of one state only to the extent permitted by the Mobile Telecommunications
63     Sourcing Act, 4 U.S.C. Sec. 116 et seq.; or
64          (iii) an ancillary service associated with a:
65          (A) telecommunications service described in Subsection (1)(b)(i); or
66          (B) mobile telecommunications service described in Subsection (1)(b)(ii);
67          (c) sales of the following for commercial use:
68          (i) gas;
69          (ii) electricity;
70          (iii) heat;
71          (iv) coal;
72          (v) fuel oil; or
73          (vi) other fuels;
74          (d) sales of the following for residential use:
75          (i) gas;
76          (ii) electricity;
77          (iii) heat;
78          (iv) coal;
79          (v) fuel oil; or
80          (vi) other fuels;
81          (e) sales of prepared food;
82          (f) except as provided in Section 59-12-104, amounts paid or charged as admission or
83     user fees for theaters, movies, operas, museums, planetariums, shows of any type or nature,
84     exhibitions, concerts, carnivals, amusement parks, amusement rides, circuses, menageries,
85     fairs, races, contests, sporting events, dances, boxing matches, wrestling matches, closed circuit
86     television broadcasts, billiard parlors, pool parlors, bowling lanes, golf, miniature golf, golf
87     driving ranges, batting cages, skating rinks, ski lifts, ski runs, ski trails, snowmobile trails,
88     tennis courts, swimming pools, water slides, river runs, jeep tours, boat tours, scenic cruises,
89     horseback rides, sports activities, or any other amusement, entertainment, recreation,
90     exhibition, cultural, or athletic activity;
91          (g) amounts paid or charged for services for repairs or renovations of tangible personal
92     property, unless Section 59-12-104 provides for an exemption from sales and use tax for:
93          (i) the tangible personal property; and
94          (ii) parts used in the repairs or renovations of the tangible personal property described
95     in Subsection (1)(g)(i), regardless of whether:
96          (A) any parts are actually used in the repairs or renovations of that tangible personal
97     property; or
98          (B) the particular parts used in the repairs or renovations of that tangible personal
99     property are exempt from a tax under this chapter;
100          (h) except as provided in Subsection 59-12-104(7), amounts paid or charged for
101     assisted cleaning or washing of tangible personal property;
102          (i) amounts paid or charged for tourist home, hotel, motel, or trailer court
103     accommodations and services that are regularly rented for less than 30 consecutive days;
104          (j) amounts paid or charged for laundry or dry cleaning services;
105          (k) amounts paid or charged for leases or rentals of tangible personal property if within
106     this state the tangible personal property is:
107          (i) stored;
108          (ii) used; or
109          (iii) otherwise consumed;
110          (l) amounts paid or charged for tangible personal property if within this state the
111     tangible personal property is:
112          (i) stored;
113          (ii) used; or
114          (iii) consumed; and
115          (m) amounts paid or charged for a sale:
116          (i) (A) of a product transferred electronically; or
117          (B) of a repair or renovation of a product transferred electronically; and
118          (ii) regardless of whether the sale provides:
119          (A) a right of permanent use of the product; or
120          (B) a right to use the product that is less than a permanent use, including a right:
121          (I) for a definite or specified length of time; and
122          (II) that terminates upon the occurrence of a condition.
123          (2) (a) Except as provided in Subsections (2)(b) through (e), a state tax and a local tax
124     is imposed on a transaction described in Subsection (1) equal to the sum of:
125          (i) a state tax imposed on the transaction at a tax rate equal to the sum of:
126          (A) 4.70%; and
127          (B) (I) the tax rate the state imposes in accordance with Part 18, Additional State Sales
128     and Use Tax Act, if the location of the transaction as determined under Sections 59-12-211
129     through 59-12-215 is in a county in which the state imposes the tax under Part 18, Additional
130     State Sales and Use Tax Act; and
131          (II) the tax rate the state imposes in accordance with Part 20, Supplemental State Sales
132     and Use Tax Act, if the location of the transaction as determined under Sections 59-12-211
133     through 59-12-215 is in a city, town, or the unincorporated area of a county in which the state
134     imposes the tax under Part 20, Supplemental State Sales and Use Tax Act; and
135          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
136     transaction under this chapter other than this part.
137          (b) Except as provided in Subsection (2)(d) or (e), a state tax and a local tax is imposed
138     on a transaction described in Subsection (1)(d) equal to the sum of:
139          (i) a state tax imposed on the transaction at a tax rate of 2%; and
140          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
141     transaction under this chapter other than this part.
142          (c) Except as provided in Subsection (2)(d) or (e), a state tax and a local tax is imposed
143     on amounts paid or charged for food and food ingredients equal to the sum of:
144          (i) a state tax imposed on the amounts paid or charged for food and food ingredients at
145     a tax rate of 1.75%; and
146          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
147     amounts paid or charged for food and food ingredients under this chapter other than this part.
148          (d) (i) For a bundled transaction that is attributable to food and food ingredients and
149     tangible personal property other than food and food ingredients, a state tax and a local tax is
150     imposed on the entire bundled transaction equal to the sum of:
151          (A) a state tax imposed on the entire bundled transaction equal to the sum of:
152          (I) the tax rate described in Subsection (2)(a)(i)(A); and
153          (II) (Aa) the tax rate the state imposes in accordance with Part 18, Additional State
154     Sales and Use Tax Act, if the location of the transaction as determined under Sections
155     59-12-211 through 59-12-215 is in a county in which the state imposes the tax under Part 18,
156     Additional State Sales and Use Tax Act; and
157          (Bb) the tax rate the state imposes in accordance with Part 20, Supplemental State
158     Sales and Use Tax Act, if the location of the transaction as determined under Sections
159     59-12-211 through 59-12-215 is in a city, town, or the unincorporated area of a county in which
160     the state imposes the tax under Part 20, Supplemental State Sales and Use Tax Act; and
161          (B) a local tax imposed on the entire bundled transaction at the sum of the tax rates
162     described in Subsection (2)(a)(ii).
163          (ii) If an optional computer software maintenance contract is a bundled transaction that
164     consists of taxable and nontaxable products that are not separately itemized on an invoice or
165     similar billing document, the purchase of the optional computer software maintenance contract
166     is 40% taxable under this chapter and 60% nontaxable under this chapter.
167          (iii) Subject to Subsection (2)(d)(iv), for a bundled transaction other than a bundled
168     transaction described in Subsection (2)(d)(i) or (ii):
169          (A) if the sales price of the bundled transaction is attributable to tangible personal
170     property, a product, or a service that is subject to taxation under this chapter and tangible
171     personal property, a product, or service that is not subject to taxation under this chapter, the
172     entire bundled transaction is subject to taxation under this chapter unless:
173          (I) the seller is able to identify by reasonable and verifiable standards the tangible
174     personal property, product, or service that is not subject to taxation under this chapter from the
175     books and records the seller keeps in the seller's regular course of business; or
176          (II) state or federal law provides otherwise; or
177          (B) if the sales price of a bundled transaction is attributable to two or more items of
178     tangible personal property, products, or services that are subject to taxation under this chapter
179     at different rates, the entire bundled transaction is subject to taxation under this chapter at the
180     higher tax rate unless:
181          (I) the seller is able to identify by reasonable and verifiable standards the tangible
182     personal property, product, or service that is subject to taxation under this chapter at the lower
183     tax rate from the books and records the seller keeps in the seller's regular course of business; or
184          (II) state or federal law provides otherwise.
185          (iv) For purposes of Subsection (2)(d)(iii), books and records that a seller keeps in the
186     seller's regular course of business includes books and records the seller keeps in the regular
187     course of business for nontax purposes.
188          (e) (i) Except as otherwise provided in this chapter and subject to Subsections (2)(e)(ii)
189     and (iii), if a transaction consists of the sale, lease, or rental of tangible personal property, a
190     product, or a service that is subject to taxation under this chapter, and the sale, lease, or rental
191     of tangible personal property, other property, a product, or a service that is not subject to
192     taxation under this chapter, the entire transaction is subject to taxation under this chapter unless
193     the seller, at the time of the transaction:
194          (A) separately states the portion of the transaction that is not subject to taxation under
195     this chapter on an invoice, bill of sale, or similar document provided to the purchaser; or
196          (B) is able to identify by reasonable and verifiable standards, from the books and
197     records the seller keeps in the seller's regular course of business, the portion of the transaction
198     that is not subject to taxation under this chapter.
199          (ii) A purchaser and a seller may correct the taxability of a transaction if:
200          (A) after the transaction occurs, the purchaser and the seller discover that the portion of
201     the transaction that is not subject to taxation under this chapter was not separately stated on an
202     invoice, bill of sale, or similar document provided to the purchaser because of an error or
203     ignorance of the law; and
204          (B) the seller is able to identify by reasonable and verifiable standards, from the books
205     and records the seller keeps in the seller's regular course of business, the portion of the
206     transaction that is not subject to taxation under this chapter.
207          (iii) For purposes of Subsections (2)(e)(i) and (ii), books and records that a seller keeps
208     in the seller's regular course of business includes books and records the seller keeps in the
209     regular course of business for nontax purposes.
210          (f) (i) If the sales price of a transaction is attributable to two or more items of tangible
211     personal property, products, or services that are subject to taxation under this chapter at
212     different rates, the entire purchase is subject to taxation under this chapter at the higher tax rate
213     unless the seller, at the time of the transaction:
214          (A) separately states the items subject to taxation under this chapter at each of the
215     different rates on an invoice, bill of sale, or similar document provided to the purchaser; or
216          (B) is able to identify by reasonable and verifiable standards the tangible personal
217     property, product, or service that is subject to taxation under this chapter at the lower tax rate
218     from the books and records the seller keeps in the seller's regular course of business.
219          (ii) For purposes of Subsection (2)(f)(i), books and records that a seller keeps in the
220     seller's regular course of business includes books and records the seller keeps in the regular
221     course of business for nontax purposes.
222          (g) Subject to Subsections (2)(h) and (i), a tax rate repeal or tax rate change for a tax
223     rate imposed under the following shall take effect on the first day of a calendar quarter:
224          (i) Subsection (2)(a)(i)(A);
225          (ii) Subsection (2)(b)(i);
226          (iii) Subsection (2)(c)(i); or
227          (iv) Subsection (2)(d)(i)(A)(I).
228          (h) (i) A tax rate increase takes effect on the first day of the first billing period that
229     begins on or after the effective date of the tax rate increase if the billing period for the
230     transaction begins before the effective date of a tax rate increase imposed under:
231          (A) Subsection (2)(a)(i)(A);
232          (B) Subsection (2)(b)(i);
233          (C) Subsection (2)(c)(i); or
234          (D) Subsection (2)(d)(i)(A)(I).
235          (ii) The repeal of a tax or a tax rate decrease applies to a billing period if the billing
236     statement for the billing period is rendered on or after the effective date of the repeal of the tax
237     or the tax rate decrease imposed under:
238          (A) Subsection (2)(a)(i)(A);
239          (B) Subsection (2)(b)(i);
240          (C) Subsection (2)(c)(i); or
241          (D) Subsection (2)(d)(i)(A)(I).
242          (i) (i) For a tax rate described in Subsection (2)(i)(ii), if a tax due on a catalogue sale is
243     computed on the basis of sales and use tax rates published in the catalogue, a tax rate repeal or
244     change in a tax rate takes effect:
245          (A) on the first day of a calendar quarter; and
246          (B) beginning 60 days after the effective date of the tax rate repeal or tax rate change.
247          (ii) Subsection (2)(i)(i) applies to the tax rates described in the following:
248          (A) Subsection (2)(a)(i)(A);
249          (B) Subsection (2)(b)(i);
250          (C) Subsection (2)(c)(i); or
251          (D) Subsection (2)(d)(i)(A)(I).
252          (iii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
253     the commission may by rule define the term "catalogue sale."
254          (3) (a) The following state taxes shall be deposited into the General Fund:
255          (i) the tax imposed by Subsection (2)(a)(i)(A);
256          (ii) the tax imposed by Subsection (2)(b)(i);
257          (iii) the tax imposed by Subsection (2)(c)(i); or
258          (iv) the tax imposed by Subsection (2)(d)(i)(A)(I).
259          (b) The following local taxes shall be distributed to a county, city, or town as provided
260     in this chapter:
261          (i) the tax imposed by Subsection (2)(a)(ii);
262          (ii) the tax imposed by Subsection (2)(b)(ii);
263          (iii) the tax imposed by Subsection (2)(c)(ii); and
264          (iv) the tax imposed by Subsection (2)(d)(i)(B).
265          [(4) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July
266     1, 2003, the lesser of the following amounts shall be expended as provided in Subsections
267     (4)(b) through (g):]
268          [(i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:]
269          [(A) by a 1/16% tax rate on the transactions described in Subsection (1); and]
270          [(B) for the fiscal year; or]
271          [(ii) $17,500,000.]
272          [(b) (i) For a fiscal year beginning on or after July 1, 2003, 14% of the amount
273     described in Subsection (4)(a) shall be transferred each year as dedicated credits to the
274     Department of Natural Resources to:]
275          [(A) implement the measures described in Subsections 79-2-303(3)(a) through (d) to
276     protect sensitive plant and animal species; or]
277          [(B) award grants, up to the amount authorized by the Legislature in an appropriations
278     act, to political subdivisions of the state to implement the measures described in Subsections
279     79-2-303(3)(a) through (d) to protect sensitive plant and animal species.]
280          [(ii) Money transferred to the Department of Natural Resources under Subsection
281     (4)(b)(i) may not be used to assist the United States Fish and Wildlife Service or any other
282     person to list or attempt to have listed a species as threatened or endangered under the
283     Endangered Species Act of 1973, 16 U.S.C. Sec. 1531 et seq.]
284          [(iii) At the end of each fiscal year:]
285          [(A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
286     Conservation and Development Fund created in Section 73-10-24;]
287          [(B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
288     Program Subaccount created in Section 73-10c-5; and]
289          [(C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
290     Program Subaccount created in Section 73-10c-5.]
291          [(c) For a fiscal year beginning on or after July 1, 2003, 3% of the amount described in
292     Subsection (4)(a) shall be deposited each year in the Agriculture Resource Development Fund
293     created in Section 4-18-106.]
294          [(d) (i) For a fiscal year beginning on or after July 1, 2003, 1% of the amount described
295     in Subsection (4)(a) shall be transferred each year as dedicated credits to the Division of Water
296     Rights to cover the costs incurred in hiring legal and technical staff for the adjudication of
297     water rights.]
298          [(ii) At the end of each fiscal year:]
299          [(A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
300     Conservation and Development Fund created in Section 73-10-24;]
301          [(B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
302     Program Subaccount created in Section 73-10c-5; and]
303          [(C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
304     Program Subaccount created in Section 73-10c-5.]
305          [(e) (i) For a fiscal year beginning on or after July 1, 2003, 41% of the amount
306     described in Subsection (4)(a) shall be deposited in the Water Resources Conservation and
307     Development Fund created in Section 73-10-24 for use by the Division of Water Resources.]
308          [(ii) In addition to the uses allowed of the Water Resources Conservation and
309     Development Fund under Section 73-10-24, the Water Resources Conservation and
310     Development Fund may also be used to:]
311          [(A) conduct hydrologic and geotechnical investigations by the Division of Water
312     Resources in a cooperative effort with other state, federal, or local entities, for the purpose of
313     quantifying surface and ground water resources and describing the hydrologic systems of an
314     area in sufficient detail so as to enable local and state resource managers to plan for and
315     accommodate growth in water use without jeopardizing the resource;]
316          [(B) fund state required dam safety improvements; and]
317          [(C) protect the state's interest in interstate water compact allocations, including the
318     hiring of technical and legal staff.]
319          [(f) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount described
320     in Subsection (4)(a) shall be deposited in the Utah Wastewater Loan Program Subaccount
321     created in Section 73-10c-5 for use by the Water Quality Board to fund wastewater projects.]
322          [(g) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount described
323     in Subsection (4)(a) shall be deposited in the Drinking Water Loan Program Subaccount
324     created in Section 73-10c-5 for use by the Division of Drinking Water to:]
325          [(i) provide for the installation and repair of collection, treatment, storage, and
326     distribution facilities for any public water system, as defined in Section 19-4-102;]
327          [(ii) develop underground sources of water, including springs and wells; and]
328          [(iii) develop surface water sources.]
329          [(5) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July
330     1, 2006, the difference between the following amounts shall be expended as provided in this
331     Subsection (5), if that difference is greater than $1:]
332          [(i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated for
333     the fiscal year by a 1/16% tax rate on the transactions described in Subsection (1); and]
334          [(ii) $17,500,000.]
335          [(b) (i) The first $500,000 of the difference described in Subsection (5)(a) shall be:]
336          [(A) transferred each fiscal year to the Department of Natural Resources as dedicated
337     credits; and]
338          [(B) expended by the Department of Natural Resources for watershed rehabilitation or
339     restoration.]
340          [(ii) At the end of each fiscal year, 100% of any unexpended dedicated credits
341     described in Subsection (5)(b)(i) shall lapse to the Water Resources Conservation and
342     Development Fund created in Section 73-10-24.]
343          [(c) (i) After making the transfer required by Subsection (5)(b)(i), $150,000 of the
344     remaining difference described in Subsection (5)(a) shall be:]
345          [(A) transferred each fiscal year to the Division of Water Resources as dedicated
346     credits; and]
347          [(B) expended by the Division of Water Resources for cloud-seeding projects
348     authorized by Title 73, Chapter 15, Modification of Weather.]
349          [(ii) At the end of each fiscal year, 100% of any unexpended dedicated credits
350     described in Subsection (5)(c)(i) shall lapse to the Water Resources Conservation and
351     Development Fund created in Section 73-10-24.]
352          [(d) After making the transfers required by Subsections (5)(b) and (c), 94% of the
353     remaining difference described in Subsection (5)(a) shall be deposited into the Water
354     Resources Conservation and Development Fund created in Section 73-10-24 for use by the
355     Division of Water Resources for:]
356          [(i) preconstruction costs:]
357          [(A) as defined in Subsection 73-26-103(6) for projects authorized by Title 73, Chapter
358     26, Bear River Development Act; and]
359          [(B) as defined in Subsection 73-28-103(8) for the Lake Powell Pipeline project
360     authorized by Title 73, Chapter 28, Lake Powell Pipeline Development Act;]
361          [(ii) the cost of employing a civil engineer to oversee any project authorized by Title
362     73, Chapter 26, Bear River Development Act;]
363          [(iii) the cost of employing a civil engineer to oversee the Lake Powell Pipeline project
364     authorized by Title 73, Chapter 28, Lake Powell Pipeline Development Act; and]
365          [(iv) other uses authorized under Sections 73-10-24, 73-10-25.1, 73-10-30, and
366     Subsection (4)(e)(ii) after funding the uses specified in Subsections (5)(d)(i) through (iii).]
367          [(e) After making the transfers required by Subsections (5)(b) and (c) and subject to
368     Subsection (5)(f), 6% of the remaining difference described in Subsection (5)(a) shall be
369     transferred each year as dedicated credits to the Division of Water Rights to cover the costs
370     incurred for employing additional technical staff for the administration of water rights.]
371          [(f) At the end of each fiscal year, any unexpended dedicated credits described in
372     Subsection (5)(e) over $150,000 lapse to the Water Resources Conservation and Development
373     Fund created in Section 73-10-24.]
374          [(6)] (4) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July
375     1, 2003, and for taxes listed under Subsection (3)(a), the amount of revenue generated by a
376     1/16% tax rate on the transactions described in Subsection (1) for the fiscal year shall be
377     deposited in the Transportation Fund created by Section 72-2-102.
378          [(7)] (5) Notwithstanding Subsection (3)(a), beginning on July 1, 2012, the Division of
379     Finance shall deposit into the Transportation Investment Fund of 2005 created in Section
380     72-2-124 a portion of the taxes listed under Subsection (3)(a) equal to the revenues generated
381     by a 1/64% tax rate on the taxable transactions under Subsection (1).
382          [(8)] (6) (a) Notwithstanding Subsection (3)(a), in addition to the amounts deposited
383     [in] under Subsection [(7)] (5), and subject to Subsection [(8)] (6)(b), for a fiscal year
384     beginning on or after July 1, 2012, the Division of Finance shall deposit into the Transportation
385     Investment Fund of 2005 created by Section 72-2-124:
386          (i) a portion of the taxes listed under Subsection (3)(a) in an amount equal to 8.3% of
387     the revenues collected from the following taxes, which represents a portion of the
388     approximately 17% of sales and use tax revenues generated annually by the sales and use tax
389     on vehicles and vehicle-related products:
390          (A) the tax imposed by Subsection (2)(a)(i)(A);
391          (B) the tax imposed by Subsection (2)(b)(i);
392          (C) the tax imposed by Subsection (2)(c)(i); and
393          (D) the tax imposed by Subsection (2)(d)(i)(A)(I); plus
394          (ii) an amount equal to 30% of the growth in the amount of revenues collected in the
395     current fiscal year from the sales and use taxes described in Subsections [(8)] (6)(a)(i)(A)
396     through (D) that exceeds the amount collected from the sales and use taxes described in
397     Subsections [(8)] (6)(a)(i)(A) through (D) in the 2010-11 fiscal year.
398          (b) (i) Subject to Subsections [(8)] (6)(b)(ii) and (iii), in any fiscal year that the portion
399     of the sales and use taxes deposited under Subsection [(8)] (6)(a) represents an amount that is a
400     total lower percentage of the sales and use taxes described in Subsections [(8)] (6)(a)(i)(A)
401     through (D) generated in the current fiscal year than the total percentage of sales and use taxes
402     deposited in the previous fiscal year, the Division of Finance shall deposit an amount under
403     Subsection [(8)] (6)(a) equal to the product of:
404          (A) the total percentage of sales and use taxes deposited under Subsection [(8)] (6)(a)
405     in the previous fiscal year; and
406          (B) the total sales and use tax revenue generated by the taxes described in Subsections
407     [(8)] (6)(a)(i)(A) through (D) in the current fiscal year.
408          (ii) In any fiscal year in which the portion of the sales and use taxes deposited under
409     Subsection [(8)] (6)(a) would exceed 17% of the revenues collected from the sales and use
410     taxes described in Subsections [(8)] (6)(a)(i)(A) through (D) in the current fiscal year, the
411     Division of Finance shall deposit 17% of the revenues collected from the sales and use taxes
412     described in Subsections [(8)] (6)(a)(i)(A) through (D) for the current fiscal year under
413     Subsection [(8)] (6)(a).
414          (iii) In all subsequent fiscal years after a year in which 17% of the revenues collected
415     from the sales and use taxes described in Subsections [(8)] (6)(a)(i)(A) through (D) was
416     deposited under Subsection [(8)] (6)(a), the Division of Finance shall annually deposit 17% of
417     the revenues collected from the sales and use taxes described in Subsections [(8)] (6)(a)(i)(A)
418     through (D) in the current fiscal year under Subsection [(8)] (6)(a).
419          [(9)] (7) Notwithstanding Subsection (3)(a), and in addition to the amounts deposited
420     under Subsections [(7)] (5) and [(8)] (6), for a fiscal year beginning on or after July 1, 2012, the
421     Division of Finance shall annually deposit $90,000,000 of the revenues generated by the taxes
422     listed under Subsection (3)(a) into the Transportation Investment Fund of 2005 created by
423     Section 72-2-124.
424          [(10)] (8) Notwithstanding Subsection (3)(a), for each fiscal year beginning with fiscal
425     year 2009-10, $533,750 shall be deposited into the Qualified Emergency Food Agencies Fund
426     created by Section 35A-8-1009 and expended as provided in Section 35A-8-1009.
427          [(11)] (9) (a) Notwithstanding Subsection (3)(a), except as provided in Subsection
428     [(11)] (9)(b), and in addition to any amounts deposited under Subsections [(7), (8), and (9)] (5),
429     (6), and (7), beginning on July 1, 2012, the Division of Finance shall deposit into the
430     Transportation Investment Fund of 2005 created by Section 72-2-124 the amount of tax
431     revenue generated by a .025% tax rate on the transactions described in Subsection (1).
432          (b) For purposes of Subsection [(11)] (9)(a), the Division of Finance may not deposit
433     into the Transportation Investment Fund of 2005 any tax revenue generated by amounts paid or
434     charged for food and food ingredients, except for tax revenue generated by a bundled
435     transaction attributable to food and food ingredients and tangible personal property other than
436     food and food ingredients described in Subsection (2)(d).
437          [(12)] (10) (a) Notwithstanding Subsection (3)(a), and except as provided in
438     Subsection [(12)] (10)(b), beginning on January 1, 2009, the Division of Finance shall deposit
439     into the Transportation Fund created by Section 72-2-102 the amount of tax revenue generated
440     by a .025% tax rate on the transactions described in Subsection (1) to be expended to address
441     chokepoints in construction management.
442          (b) For purposes of Subsection [(12)] (10)(a), the Division of Finance may not deposit
443     into the Transportation Fund any tax revenue generated by amounts paid or charged for food
444     and food ingredients, except for tax revenue generated by a bundled transaction attributable to
445     food and food ingredients and tangible personal property other than food and food ingredients
446     described in Subsection (2)(d).
447          [(13)] (11) Notwithstanding Subsection (3)(a), beginning the second fiscal year after
448     the fiscal year during which the Division of Finance receives notice under [Subsection] Section
449     63N-2-510[(3)] that construction on a qualified hotel, as defined in Section 63N-2-502, has
450     begun, the Division of Finance shall, for two consecutive fiscal years, annually deposit
451     $1,900,000 of the revenue generated by the taxes listed under Subsection (3)(a) into the Hotel
452     Impact Mitigation Fund, created in Section 63N-2-512.
453          [(14)] (12) Notwithstanding Subsections (4) through [(13)] (11), an amount required to
454     be expended or deposited in accordance with Subsections (4) through [(13)] (11) may not
455     include an amount the Division of Finance deposits in accordance with Section 59-12-103.2.
456          Section 3. Section 59-12-1201 is amended to read:
457          59-12-1201. Motor vehicle rental tax -- Rate -- Exemptions -- Administration,
458     collection, and enforcement of tax -- Administrative charge -- Deposits.
459          (1) (a) Except as provided in Subsection (3), there is imposed a tax of 2.5% on all
460     short-term leases and rentals of motor vehicles not exceeding 30 days.
461          (b) The tax imposed in this section is in addition to all other state, county, or municipal
462     fees and taxes imposed on rentals of motor vehicles.
463          (2) (a) Subject to Subsection (2)(b), a tax rate repeal or tax rate change for the tax
464     imposed under Subsection (1) shall take effect on the first day of a calendar quarter.
465          (b) (i) For a transaction subject to a tax under Subsection (1), a tax rate increase shall
466     take effect on the first day of the first billing period:
467          (A) that begins after the effective date of the tax rate increase; and
468          (B) if the billing period for the transaction begins before the effective date of a tax rate
469     increase imposed under Subsection (1).
470          (ii) For a transaction subject to a tax under Subsection (1), the repeal of a tax or a tax
471     rate decrease shall take effect on the first day of the last billing period:
472          (A) that began before the effective date of the repeal of the tax or the tax rate decrease;
473     and
474          (B) if the billing period for the transaction begins before the effective date of the repeal
475     of the tax or the tax rate decrease imposed under Subsection (1).
476          (3) A motor vehicle is exempt from the tax imposed under Subsection (1) if:
477          (a) the motor vehicle is registered for a gross laden weight of 12,001 or more pounds;
478          (b) the motor vehicle is rented as a personal household goods moving van; or
479          (c) the lease or rental of the motor vehicle is made for the purpose of temporarily
480     replacing a person's motor vehicle that is being repaired pursuant to a repair agreement or an
481     insurance agreement.
482          (4) (a) (i) The tax authorized under this section shall be administered, collected, and
483     enforced in accordance with:
484          (A) the same procedures used to administer, collect, and enforce the tax under Part 1,
485     Tax Collection; and
486          (B) Chapter 1, General Taxation Policies.
487          (ii) Notwithstanding Subsection (4)(a)(i), a tax under this part is not subject to
488     Subsections 59-12-103(4) through [(12)] (10) or Section 59-12-107.1 or 59-12-123.
489          (b) The commission shall retain and deposit an administrative charge in accordance
490     with Section 59-1-306 from the revenues the commission collects from a tax under this part.
491          (c) Except as provided under Subsection (4)(b), all revenue received by the
492     commission under this section shall be deposited daily with the state treasurer and credited
493     monthly to the Marda Dillree Corridor Preservation Fund under Section 72-2-117.
494          Section 4. Section 63N-2-510 is amended to read:
495          63N-2-510. Report by office -- Posting of report.
496          (1) The office shall include the following information in the office's annual written
497     report described in Section 63N-1-301:
498          (a) the state's success in attracting new conventions and corresponding new state
499     revenue;
500          (b) the estimated amount of convention incentive commitments and the associated
501     calculation made by the office and the period of time over which convention incentives are
502     expected to be paid;
503          (c) the economic impact on the state related to generating new state revenue and
504     providing convention incentives; and
505          (d) the estimated and actual costs and economic benefits of the convention incentive
506     commitments that the office made.
507          (2) Upon the commencement of the construction of a qualified hotel, the office shall
508     send a written notice to the Division of Finance:
509          (a) referring to the two annual deposits required under Subsection 59-12-103[(13)](11);
510     and
511          (b) notifying the Division of Finance that construction on the qualified hotel has begun.
512          Section 5. Section 63N-2-512 is amended to read:
513          63N-2-512. Hotel Impact Mitigation Fund.
514          (1) As used in this section:
515          (a) "Affected hotel" means a hotel built in the state before July 1, 2014.
516          (b) "Direct losses" means affected hotels' losses of hotel guest business attributable to
517     the qualified hotel room supply being added to the market in the state.
518          (c) "Mitigation fund" means the Hotel Impact Mitigation Fund, created in Subsection
519     (2).
520          (2) There is created an expendable special revenue fund known as the Hotel Impact
521     Mitigation Fund.
522          (3) The mitigation fund shall:
523          (a) be administered by the board;
524          (b) earn interest; and
525          (c) be funded by:
526          (i) payments required to be deposited into the mitigation fund by the Division of
527     Finance under Subsection 59-12-103[(13)](11);
528          (ii) money required to be deposited into the mitigation fund under Subsection
529     17-31-9(2) by the county in which a qualified hotel is located; and
530          (iii) any money deposited into the mitigation fund under Subsection (6).
531          (4) Interest earned by the mitigation fund shall be deposited into the mitigation fund.
532          (5) (a) In accordance with office rules, the board shall annually pay up to $2,100,000 of
533     money in the mitigation fund:
534          (i) to affected hotels;
535          (ii) for four consecutive years, beginning 12 months after the date of initial occupancy
536     of the qualified hotel occurs; and
537          (iii) to mitigate direct losses.
538          (b) (i) If the amount the board pays under Subsection (5)(a) in any year is less than
539     $2,100,000, the board shall pay to the Stay Another Day and Bounce Back Fund, created in
540     Section 63N-2-511, the difference between $2,100,000 and the amount paid under Subsection
541     (5)(a).
542          (ii) The board shall make any required payment under Subsection (5)(b)(i) within 90
543     days after the end of the year for which a determination is made of how much the board is
544     required to pay to affected hotels under Subsection (5)(a).
545          (6) A host local government or qualified hotel owner may make payments to the
546     Division of Finance for deposit into the mitigation fund.
547          (7) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
548     office shall, in consultation with the Utah Hotel and Lodging Association and the county in
549     which the qualified hotel is located, make rules establishing procedures and criteria governing
550     payments under Subsection (5)(a) to affected hotels.
551          Section 6. Section 73-10c-4 is amended to read:
552          73-10c-4. Credit enhancement and interest buy-down agreements -- Loans or
553     grants -- Hardship grants.
554          (1) On behalf of the state, the Water Quality Board and the Drinking Water Board may
555     each enter into credit enhancement agreements with political subdivisions containing terms and
556     provisions that the acting board determines will reasonably improve the security for or
557     marketability of drinking water and wastewater project obligations, including any of the
558     following:
559          (a) a term providing security for drinking water and wastewater project obligations, as
560     provided in Subsection 73-10c-6(2)(b), by agreeing to purchase the drinking water or
561     wastewater project obligations of, or to make loans to, political subdivisions from a subaccount
562     of the security fund for the purpose of preventing defaults in the payment of principal and
563     interest on drinking water and wastewater project obligations;
564          (b) a term making loans to political subdivisions to pay the cost of obtaining:
565          (i) letters of credit from banks, savings and loan institutions, insurance companies, or
566     other financial institutions;
567          (ii) municipal bond insurance; or
568          (iii) other forms of insurance or security to provide security for drinking water and
569     wastewater project obligations; and
570          (c) a term providing other methods and assistance to political subdivisions that are
571     reasonable and proper to enhance the marketability of or security for drinking water and
572     wastewater project obligations.
573          (2) (a) The Drinking Water Board and the Water Quality Board may each make loans
574     from a security fund subaccount to political subdivisions to finance all or part of drinking water
575     and wastewater project costs by following the procedures and requirements of Sections
576     73-10c-4.1 and 73-10c-4.2.
577          (b) These loans may only be made after credit enhancement agreements, interest
578     buy-down agreements, and all other financing alternatives have been evaluated by the acting
579     board and the board determines those options are unavailable or unreasonably expensive for the
580     subdivision requesting assistance.
581          (c) Loans may be made from the security fund subaccount at interest rates determined
582     by the board.
583          (3) (a) The Drinking Water Board and the Water Quality Board may each make loans
584     or grants from the security fund to political subdivisions for interest buy-down agreements for
585     drinking water or wastewater project obligations.
586          (b) The Drinking Water Board may make loans or grants from the security account to
587     political subdivisions for planning for drinking water projects.
588          [(4) (a) Of the total amount of money annually available to the Drinking Water Board
589     and Water Quality Board for financial assistance to political subdivisions, at least 10% shall be
590     allocated by each board for credit enhancement and interest buy-down agreements.]
591          [(b) The requirement specified in Subsection (4)(a) shall apply only so long as sales
592     and use tax is transferred to the Utah Wastewater Loan Program Subaccount and Drinking
593     Water Loan Program Subaccount as provided in Section 59-12-103.]
594          [(5)] (4) To the extent money is available in the hardship grant subaccounts of the
595     security fund, the Drinking Water Board and the Water Quality Board may each make grants to
596     political subdivisions that meet the drinking water or wastewater project loan considerations
597     respectively, but whose projects are determined by the granting board to not be economically
598     feasible unless grant assistance is provided.
599          [(6)] (5) The Drinking Water and Water Quality Boards may at any time transfer
600     money out of their respective hardship grant subaccounts of the security fund to their respective
601     loan program subaccounts.
602          [(7)] (6) The Water Quality Board may make a grant from the Hardship Grant Program
603     for Wastewater Projects Subaccount created in Subsection 73-10c-5(2)(c) for a nonpoint source
604     project as provided by Section 73-10c-4.5 if:
605          (a) money is available in the subaccount; and
606          (b) the Water Quality Board determines that the project would not be economically
607     feasible unless a grant were made.
608          Section 7. Repealer.
609          This bill repeals:
610          Section 73-10-31, Allocation of funds for credit enhancement and interest
611     buy-down agreements.
612          Section 8. Effective date.
613          This bill takes effect on July 1, 2016.




Legislative Review Note
Office of Legislative Research and General Counsel