H.B. 366

1

REPEAL OF SALES AND USE TAX
2 DIVERSION FOR OLYMPICS
3 1999 GENERAL SESSION
4 STATE OF UTAH
5 Sponsor: David Ure
6 AN ACT RELATING TO THE SALES AND USE TAX ACT; BEGINNING ON JULY 1, 1999,
7 TERMINATING THE REQUIREMENT THAT CERTAIN REVENUES GENERATED UNDER
8 THE LOCAL SALES AND USE TAX ACT BE DEPOSITED INTO THE OLYMPICS SPECIAL
9 REVENUE FUND; AND MAKING TECHNICAL CHANGES.
10 This act affects sections of Utah Code Annotated 1953 as follows:
11 AMENDS:
12 59-12-103, as last amended by Chapters 12, 202, 210, 270, 291 and 318, Laws of Utah
13 1998
14 59-12-204, as last amended by Chapter 261, Laws of Utah 1997
15 59-12-205, as last amended by Chapter 261, Laws of Utah 1997
16 Be it enacted by the Legislature of the state of Utah:
17 Section 1. Section 59-12-103 is amended to read:
18 59-12-103. Sales and use tax base -- Rate -- Use of sales and use tax revenues.
19 (1) There is levied a tax on the purchaser for the amount paid or charged for the following:
20 (a) retail sales of tangible personal property made within the state;
21 (b) amount paid to common carriers or to telephone or telegraph corporations, whether the
22 corporations are municipally or privately owned, for:
23 (i) all transportation;
24 (ii) intrastate telephone service; or
25 (iii) telegraph service;
26 (c) gas, electricity, heat, coal, fuel oil, or other fuels sold for commercial use;
27 (d) gas, electricity, heat, coal, fuel oil, or other fuels sold for residential use;

28 (e) meals sold;
29 (f) admission or user fees for theaters, movies, operas, museums, planetariums, shows of
30 any type or nature, exhibitions, concerts, carnivals, amusement parks, amusement rides, circuses,
31 menageries, fairs, races, contests, sporting events, dances, boxing and wrestling matches, closed
32 circuit television broadcasts, billiard or pool parlors, bowling lanes, golf and miniature golf, golf
33 driving ranges, batting cages, skating rinks, ski lifts, ski runs, ski trails, snowmobile trails, tennis
34 courts, swimming pools, water slides, river runs, jeep tours, boat tours, scenic cruises, horseback
35 rides, sports activities, or any other amusement, entertainment, recreation, exhibition, cultural, or
36 athletic activity;
37 (g) services for repairs or renovations of tangible personal property or services to install
38 tangible personal property in connection with other tangible personal property;
39 (h) except as provided in Subsection 59-12-104 (7), cleaning or washing of tangible
40 personal property;
41 (i) tourist home, hotel, motel, or trailer court accommodations and services for less than
42 30 consecutive days;
43 (j) laundry and dry cleaning services;
44 (k) leases and rentals of tangible personal property if the property situs is in this state, if
45 the lessee took possession in this state, or if the property is stored, used, or otherwise consumed
46 in this state;
47 (l) tangible personal property stored, used, or consumed in this state; and
48 (m) prepaid telephone calling cards.
49 (2) Except for Subsection (1)(d), the rates of the tax levied under Subsection (1) shall be:
50 (a) 5% through June 30, 1994;
51 (b) 4.875% beginning on July 1, 1994 through June 30, 1997; and
52 (c) 4.75% beginning on July 1, 1997.
53 (3) The rates of the tax levied under Subsection (1)(d) shall be 2% from and after January
54 1, 1990.
55 (4) (a) [From January 1, 1990, through December 31, 1999, there] There shall be deposited
56 in an Olympics special revenue fund or funds as determined by the Division of Finance under
57 Section 51-5-4 , for the use of the Utah Sports Authority created under Title 63A, Chapter 7, Utah
58 Sports Authority Act:

59 (i) from January 1, 1990, through December 31, 1999, the amount of sales and use tax
60 generated by a 1/64% tax rate on the taxable items and services under Subsection (1);
61 (ii) from January 1, 1990, through June 30, 1999, the amount of revenue generated by a
62 1/64% tax rate under Section 59-12-204 or Section 59-12-205 on the taxable items and services
63 under Subsection (1); and
64 (iii) interest earned on the amounts under Subsections (4)(a)(i) and (ii).
65 (b) These funds shall be used:
66 (i) by the Utah Sports Authority as follows:
67 (A) to the extent funds are available, to transfer directly to a debt service fund or to
68 otherwise reimburse to the state any amount expended on debt service or any other cost of any
69 bonds issued by the state to construct any public sports facility as defined in Section 63A-7-103 ;
70 (B) to pay for the actual and necessary operating, administrative, legal, and other expenses
71 of the Utah Sports Authority, but not including protocol expenses for seeking and obtaining the
72 right to host the Winter Olympic Games; and
73 (C) unless the Legislature appropriates additional funds from the Olympics Special
74 Revenue Fund to the Utah Sports Authority, the Utah Sports Authority may not expend, loan, or
75 pledge in the aggregate more than:
76 (I) $59,000,000 of sales and use tax deposited into the Olympics special revenue fund
77 under Subsection (4)(a);
78 (II) the interest earned on the amount described in Subsection (4)(b)(i)(C)(I); and
79 (III) the revenues deposited into the Olympics Special Revenue Fund that are not sales and
80 use taxes deposited under Subsection (4)(a) or interest on the sales and use taxes;
81 (ii) to pay salary, benefits, or administrative costs associated with the State Olympic
82 Officer under Subsection 63A-10-103 (3), except that the salary, benefits, or administrative costs
83 may not be paid from the sales and tax revenues generated by municipalities or counties and
84 deposited under Subsection (4)(a)(ii).
85 (c) A payment of salary, benefits, or administrative costs under Subsection 63A-10-103 (3)
86 is not considered an expenditure of the Utah Sports Authority.
87 (d) If the Legislature appropriates additional funds under Subsection (4)(b)(i)(C), the
88 authority may not expend, loan, pledge, or enter into any agreement to expend, loan, or pledge the
89 appropriated funds unless the authority:

90 (i) contracts in writing for the full reimbursement of the monies to the Olympics special
91 revenue fund by a public sports entity or other person benefitting from the expenditure; and
92 (ii) obtains a security interest that secures payment or performance of the obligation to
93 reimburse.
94 (e) A contract or agreement entered into in violation of Subsection (4)(d) is void.
95 (5) (a) From July 1, 1997, the annual amount of sales and use tax generated by a 1/8% tax
96 rate on the taxable items and services under Subsection (1) shall be used as follows:
97 (i) 50% shall be used for water and wastewater projects as provided in Subsections (5)(b)
98 through (f); and
99 (ii) 50% shall be used for transportation projects as provided in Subsections (5)(g) through
100 (h).
101 (b) Five hundred thousand dollars each year shall be transferred to the Agriculture
102 Resource Development Fund created in Section 4-18-6 .
103 (c) Fifty percent of the remaining amount generated by 50% of the 1/8% tax rate shall be
104 transferred to the Water Resources Conservation and Development Fund created in Section
105 73-10-24 for use by the Division of Water Resources. In addition to the uses allowed of the fund
106 under Section 73-10-24 , the fund may also be used to:
107 (i) provide a portion of the local cost share, not to exceed in any fiscal year 50% of the
108 funds made available to the Division of Water Resources under this section, of potential project
109 features of the Central Utah Project;
110 (ii) conduct hydrologic and geotechnical investigations by the Department of Natural
111 Resources in a cooperative effort with other state, federal, or local entities, for the purpose of
112 quantifying surface and ground water resources and describing the hydrologic systems of an area
113 in sufficient detail so as to enable local and state resource managers to plan for and accommodate
114 growth in water use without jeopardizing the resource;
115 (iii) fund state required dam safety improvements; and
116 (iv) protect the state's interest in interstate water compact allocations, including the hiring
117 of technical and legal staff.
118 (d) Twenty-five percent of the remaining amount generated by 50% of the 1/8% tax rate
119 shall be transferred to the Utah Wastewater Loan Program subaccount created in Section 73-10c-5
120 for use by the Water Quality Board to fund wastewater projects as defined in Section 73-10b-2 .

121 (e) Twenty-five percent of the remaining amount generated by 50% of the 1/8% tax rate
122 shall be transferred to the Drinking Water Loan Program subaccount created in Section 73-10c-5
123 for use by the Division of Drinking Water to:
124 (i) provide for the installation and repair of collection, treatment, storage, and distribution
125 facilities for any public water system, as defined in Section 19-4-102 ;
126 (ii) develop underground sources of water, including springs and wells; and
127 (iii) develop surface water sources.
128 (f) Notwithstanding Subsections (5)(b), (c), (d), and (e), $100,000 of the remaining amount
129 generated by 50% of the 1/8% tax rate each year shall be transferred as dedicated credits to the
130 Division of Water Rights to cover the costs incurred in hiring legal and other technical staff for the
131 adjudication of water rights. Any remaining balance at the end of each fiscal year shall lapse back
132 to the contributing funds on a prorated basis.
133 (g) Fifty percent of the 1/8% tax rate shall be transferred to the class B and class C roads
134 account to be expended as provided in Title 72, Chapter 2, Transportation Finances Act, for the
135 use of class B and C road funds except as provided in Subsection (5)(h).
136 (h) (i) If H.B. 53, "Transportation Corridor Preservation," passes in the 1996 General
137 Session, $500,000 each year shall be transferred to the Transportation Corridor Preservation
138 Revolving Loan Fund, and if H.B. 121, "State Park Access Roads," passes in the 1996 General
139 Session, from July 1, 1997, through June 30, 2006, $500,000 shall be transferred to the Department
140 of Transportation for the State Park Access Highways Improvement Program. The remaining
141 amount generated by 50% of the 1/8% tax rate shall be transferred to the class B and class C roads
142 account.
143 (ii) At least 50% of the money transferred to the Transportation Corridor Preservation
144 Revolving Loan Fund under Subsection (5)(h)(i) shall be used to fund loan applications made by
145 the Department of Transportation at the request of local governments.
146 (6) (a) Beginning on January 1, 2000, the Division of Finance shall deposit into the
147 Centennial Highway Fund created in Section 72-2-118 a portion of the state sales and use tax
148 under Subsections (2) and (3) equal to the revenues generated by a 1/64% tax rate on the taxable
149 items and services under Subsection (1).
150 (b) Beginning on [January 1, 2000] July 1, 1999, the revenues generated by the 1/64% tax
151 rate:

152 (i) retained under Subsection 59-12-204 (7)(a) shall be retained by the counties, cities, or
153 towns as provided in Section 59-12-204 ; and
154 (ii) retained under Subsection 59-12-205 (4)(a) shall be distributed to each county, city, and
155 town as provided in Section 59-12-205 .
156 Section 2. Section 59-12-204 is amended to read:
157 59-12-204. Sales and use tax ordinance provisions -- Tax rate -- Distribution of tax
158 revenues.
159 (1) The tax ordinance adopted pursuant to this part shall impose a tax upon those items
160 listed in Section 59-12-103 .
161 (2) Except as provided in Subsection 59-12-205 (2), such tax ordinance shall include a
162 provision imposing a tax upon every retail sale of items listed in Section 59-12-103 made within
163 a county, including areas contained within the cities and towns thereof at the rate of 3/4% or any
164 fractional part of such 3/4% of the purchase price paid or charged.
165 (3) Such tax ordinance shall include provisions substantially the same as those contained
166 in Part 1, Tax Collection, insofar as they relate to sales or use tax, except that the name of the
167 county as the taxing agency shall be substituted for that of the state where necessary for the
168 purpose of this part and that an additional license is not required if one has been or is issued under
169 Section 59-12-106 .
170 (4) Such tax ordinance shall include a provision that the county shall contract, prior to the
171 effective date of the ordinance, with the commission to perform all functions incident to the
172 administration or operation of the ordinance.
173 (5) Such tax ordinance shall include a provision that the sale, storage, use, or other
174 consumption of tangible personal property, the purchase price or the cost of which has been subject
175 to sales or use tax under a sales and use tax ordinance enacted in accordance with this part by any
176 county, city, or town in any other county in this state, shall be exempt from the tax due under this
177 ordinance.
178 (6) Such tax ordinance shall include a provision that any person subject to the provisions
179 of a city or town sales and use tax shall be exempt from the county sales and use tax if the city or
180 town sales and use tax is levied under an ordinance including provisions in substance as follows:
181 (a) a provision imposing a tax upon every retail sale of items listed in Section 59-12-103
182 made within the city or town at the rate imposed by the county in which it is situated pursuant to

183 Subsection (2);
184 (b) provisions substantially the same as those contained in Part 1, Tax Collection, insofar
185 as they relate to sales and use taxes, except that the name of the city or town as the taxing agency
186 shall be substituted for that of the state where necessary for the purposes of this part;
187 (c) a provision that the city or town shall contract prior to the effective date of the city or
188 town sales and use tax ordinance with the commission to perform all functions incident to the
189 administration or operation of the sales and use tax ordinance of the city or town;
190 (d) a provision that the sale, storage, use, or other consumption of tangible personal
191 property, the gross receipts from the sale of or the cost of which has been subject to sales or use
192 tax under a sales and use tax ordinance enacted in accordance with this part by any county other
193 than the county in which the city or town is located, or city or town in this state, shall be exempt
194 from the tax; and
195 (e) a provision that the amount of any tax paid under Part 1, Tax Collection, shall not be
196 included as a part of the purchase price paid or charged for a taxable item.
197 (7) (a) Notwithstanding any other provision of this section, from January 1, 1990, through
198 [December 31] June 30, 1999, the commission shall determine and retain the amount of revenue
199 generated by a 1/64% tax rate and deposit it in the Olympics Special Revenue Fund or funds
200 provided for in Subsection 59-12-103 (4) for the purposes of the Utah Sports Authority described
201 in Title 63A, Chapter 7, Utah Sports Authority Act.
202 (b) Beginning on [January] July 1, [2000] 1999, the amount of revenue generated by the
203 1/64% tax rate under Subsection (7)(a) shall be retained by the county, city, or town levying a tax
204 under this section.
205 Section 3. Section 59-12-205 is amended to read:
206 59-12-205. Ordinances to conform with statutory amendments -- Distribution of tax
207 revenues.
208 (1) Each county, city, and town, in order to maintain in effect sales and use tax ordinances
209 pursuant to this part, shall, within 30 days of any amendment of any applicable provisions of Part
210 1, Tax Collection, adopt amendments of their respective sales and use tax ordinances to conform
211 with the amendments to Part 1, Tax Collection, insofar as they relate to sales and use taxes.
212 (2) Any county, city, or town may distribute its sales or use tax revenues by means other
213 than point of sale or use by notifying the commission in writing of such decision, no later than 30

214 days before commencement of the next tax accrual period. After such notice is given, a county,
215 city, or town may increase the tax authorized by this part to a total of 1% from and after January
216 1, 1990, of the purchase price paid or charged, excluding a public transit sales and use tax as
217 provided in Section 59-12-501 and a resort communities sales tax as provided in Section
218 59-12-401 . This tax shall be collected and distributed as follows:
219 (a) from July 1, 1992, through June 30, 1993, 45% of each dollar collected from the sales
220 and use tax authorized by this part shall be paid to each county, city, and town providing notice
221 under this section, based upon the percentage that the population of the county, city, or town bears
222 to the total population of all such entities providing notice under this section, and 55% based upon
223 the point of sale or use of the transaction; and
224 (b) from and after July 1, 1993, 50% of each dollar collected from the sales and use tax
225 authorized by this part shall be paid to each county, city, and town providing notice under this
226 section, based upon the percentage that the population of the county, city, or town bears to the total
227 population of all such entities providing notice under this section, and 50% based upon the point
228 of sale or use of the transaction.
229 (3) Notwithstanding any provision of Subsection (2), a county, city, or town that has given
230 notice under this section may not receive a tax revenue distribution less than 3/4 of 1% of the
231 taxable sales within its boundaries. The commission shall proportionally reduce quarterly
232 distributions to any county, city, or town, which, but for the reduction, would receive a distribution
233 in excess of 1% beginning January 1, 1990, of the sales and use tax revenue collected within its
234 boundaries.
235 (4) (a) Notwithstanding any other provision of this section, from January 1, 1990, through
236 [December 31] June 30, 1999, the commission shall determine and retain the amount of revenue
237 generated by a 1/64% tax rate and deposit it in the Olympics Special Revenue Fund or funds
238 provided for in Subsection 59-12-103 (4) for the purposes of the Utah Sports Authority described
239 in Title 63A, Chapter 7, Utah Sports Authority Act.
240 (b) Beginning on [January] July 1, [2000] 1999, the amount of revenue generated by the
241 1/64% tax rate under Subsection (4)(a) shall be distributed to each county, city, and town as
242 provided in this section.
243 (5) (a) Population figures for purposes of this section shall be based on the most recent
244 official census or census estimate of the United States Bureau of the Census.

245 (b) If population estimates are not made for any county, city, or town by the United States
246 Bureau of Census, population figures shall be determined according to the biennial estimate from
247 the Utah Population Estimates Committee.
248 (6) The population of a county for purposes of this section shall be determined solely from
249 the unincorporated area of the county.




Legislative Review Note
as of 2-2-99 10:48 AM

A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel