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H.B. 50

             1     

SALES AND USE TAX - SALES RELATING

             2     
TO SCHOOLS

             3     
2000 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Sponsor: Bradley T. Johnson

             6      AN ACT RELATING TO THE SALES AND USE TAX ACT; EXPANDING THE EXEMPTION
             7      FOR SALES RELATING TO SCHOOLS TO INCLUDE AMOUNTS PAID OR CHARGED FOR
             8      ADMISSION TO CERTAIN SCHOOL-RELATED EVENTS OR SCHOOL-RELATED
             9      ACTIVITIES; MAKING TECHNICAL CHANGES; AND PROVIDING AN EFFECTIVE DATE.
             10      This act affects sections of Utah Code Annotated 1953 as follows:
             11      AMENDS:
             12          59-12-102, as last amended by Chapters 63 and 362, Laws of Utah 1999
             13          59-12-103, as last amended by Chapter 133, Laws of Utah 1999
             14      Be it enacted by the Legislature of the state of Utah:
             15          Section 1. Section 59-12-102 is amended to read:
             16           59-12-102. Definitions.
             17          As used in this chapter:
             18          (1) (a) "Admission or user fees" includes season passes.
             19          (b) "Admission or user fees" does not include annual membership dues to private
             20      organizations.
             21          (2) "Area agency on aging" is as defined in Section 62A-3-101 .
             22          (3) "Authorized carrier" means:
             23          (a) in the case of vehicles operated over public highways, the holder of credentials
             24      indicating that the vehicle is or will be operated pursuant to both the International Registration
             25      Plan (IRP) and the International Fuel Tax Agreement (IFTA);
             26          (b) in the case of aircraft, the holder of a Federal Aviation Administration (FAA) operating
             27      certificate or air carrier's operating certificate; or


             28          (c) in the case of locomotives, freight cars, railroad work equipment, or other rolling stock,
             29      the holder of a certificate issued by the United States Interstate Commerce Commission.
             30          (4) (a) For purposes of Subsection 59-12-104 (43), "coin-operated amusement device"
             31      means:
             32          (i) a coin-operated amusement, skill, or ride device;
             33          (ii) that is not controlled through vendor-assisted, over-the-counter, sales of tokens; and
             34          (iii) includes a music machine, pinball machine, billiard machine, video game machine,
             35      arcade machine, and a mechanical or electronic skill game or ride.
             36          (b) For purposes of Subsection 59-12-104 (43), "coin-operated amusement device" does
             37      not mean a coin-operated amusement device possessing a coinage mechanism that:
             38          (i) accepts and registers multiple denominations of coins; and
             39          (ii) allows the vendor to collect the sales and use tax at the time an amusement device is
             40      activated and operated by a person inserting coins into the device.
             41          (5) "Commercial use" means the use of gas, electricity, heat, coal, fuel oil, or other fuels
             42      that does not constitute industrial use under Subsection (13) or residential use under Subsection
             43      (21).
             44          (6) (a) "Common carrier" means a person engaged in or transacting the business of
             45      transporting passengers, freight, merchandise, or other property for hire within this state.
             46          (b) (i) "Common carrier" does not include a person who, at the time the person is traveling
             47      to or from that person's place of employment, transports a passenger to or from the passenger's
             48      place of employment.
             49          (ii) For purposes of Subsection (6)(b)(i), in accordance with Title 63, Chapter 46a, Utah
             50      Administrative Rulemaking Act, the commission may make rules defining what constitutes a
             51      person's place of employment.
             52          (7) "Component part" includes:
             53          (a) poultry, dairy, and other livestock feed, and their components;
             54          (b) baling ties and twine used in the baling of hay and straw;
             55          (c) fuel used for providing temperature control of orchards and commercial greenhouses
             56      doing a majority of their business in wholesale sales, and for providing power for off-highway type
             57      farm machinery; and
             58          (d) feed, seeds, and seedlings.


             59          (8) "Construction materials" means any tangible personal property that will be converted
             60      into real property.
             61          (9) (a) "Fundraising sales" means sales:
             62          (i) (A) made by a public or private elementary or secondary school; or
             63          (B) made by a public or private elementary or secondary school student, grades
             64      kindergarten through 12;
             65          (ii) that are for the purpose of raising funds for the school to purchase equipment,
             66      materials, or provide transportation; and
             67          (iii) that are part of an officially sanctioned school activity.
             68          (b) For purposes of Subsection (9)(a)(iii), "officially sanctioned school activity" means a
             69      school activity:
             70          (i) that is conducted in accordance with a formal policy adopted by the school or school
             71      district governing the authorization and supervision of fundraising activities;
             72          (ii) that does not directly or indirectly compensate an individual teacher or other
             73      educational personnel by direct payment, commissions, or payment in kind; and
             74          (iii) the net or gross revenues from which are deposited in a dedicated account controlled
             75      by the school or school district.
             76          (10) (a) "Hearing aid" means:
             77          (i) an instrument or device having an electronic component that is designed to:
             78          (A) (I) improve impaired human hearing; or
             79          (II) correct impaired human hearing; and
             80          (B) (I) be worn in the human ear; or
             81          (II) affixed behind the human ear;
             82          (ii) an instrument or device that is surgically implanted into the cochlea; or
             83          (iii) a telephone amplifying device.
             84          (b) "Hearing aid" does not include:
             85          (i) except as provided in Subsection (10)(a)(i)(B) or (10)(a)(ii), an instrument or device
             86      having an electronic component that is designed to be worn on the body;
             87          (ii) except as provided in Subsection (10)(a)(iii), an assistive listening device or system
             88      designed to be used by one individual, including:
             89          (A) a personal amplifying system;


             90          (B) a personal FM system;
             91          (C) a television listening system; or
             92          (D) a device or system similar to a device or system described in Subsections
             93      (10)(b)(ii)(A) through (C); or
             94          (iii) an assistive listening device or system designed to be used by more than one
             95      individual, including:
             96          (A) a device or system installed in:
             97          (I) an auditorium;
             98          (II) a church;
             99          (III) a conference room;
             100          (IV) a synagogue; or
             101          (V) a theater; or
             102          (B) a device or system similar to a device or system described in Subsections
             103      (10)(b)(iii)(A)(I) through (V).
             104          (11) (a) "Hearing aid accessory" means a hearing aid:
             105          (i) component;
             106          (ii) attachment; or
             107          (iii) accessory.
             108          (b) "Hearing aid accessory" includes:
             109          (i) a hearing aid neck loop;
             110          (ii) a hearing aid cord;
             111          (iii) a hearing aid ear mold;
             112          (iv) hearing aid tubing;
             113          (v) a hearing aid ear hook; or
             114          (vi) a hearing aid remote control.
             115          (c) "Hearing aid accessory" does not include:
             116          (i) a component, attachment, or accessory designed to be used only with an:
             117          (A) instrument or device described in Subsection (10)(b)(i); or
             118          (B) assistive listening device or system described in Subsection (10)(b)(ii) or (iii); or
             119          (ii) a hearing aid battery.
             120          (12) (a) "Home medical equipment and supplies" means equipment and supplies that:


             121          (i) a licensed physician prescribes or authorizes in writing as necessary for the treatment
             122      of a medical illness or injury or as necessary to mitigate an impairment resulting from illness or
             123      injury;
             124          (ii) are used exclusively by the person for whom they are prescribed to serve a medical
             125      purpose; and
             126          (iii) are listed as eligible for payment under Title 18 of the federal Social Security Act or
             127      under the state plan for medical assistance under Title 19 of the federal Social Security Act.
             128          (b) "Home medical equipment and supplies" does not include:
             129          (i) equipment and supplies purchased by, for, or on behalf of any health care facility, as
             130      defined in Subsection (12)(c), doctor, nurse, or other health care provider for use in their
             131      professional practice;
             132          (ii) eyeglasses, contact lenses, or equipment to correct impaired vision; or
             133          (iii) hearing aids or hearing aid accessories.
             134          (c) For purposes of Subsection (12)(b)(i), "health care facility" includes:
             135          (i) a clinic;
             136          (ii) a doctor's office; and
             137          (iii) a health care facility as defined in Section 26-21-2 .
             138          (13) "Industrial use" means the use of natural gas, electricity, heat, coal, fuel oil, or other
             139      fuels in:
             140          (a) mining or extraction of minerals;
             141          (b) agricultural operations to produce an agricultural product up to the time of harvest or
             142      placing the agricultural product into a storage facility, including:
             143          (i) commercial greenhouses;
             144          (ii) irrigation pumps;
             145          (iii) farm machinery;
             146          (iv) implements of husbandry as defined in Subsection 41-1a-102 (23) that are not
             147      registered under Title 41, Chapter 1a, Part 2, Registration; and
             148          (v) other farming activities; and
             149          (c) manufacturing tangible personal property at an establishment described in SIC Codes
             150      2000 to 3999 of the 1987 Standard Industrial Classification Manual of the federal Executive Office
             151      of the President, Office of Management and Budget.


             152          (14) "Manufactured home" means any manufactured home or mobile home as defined in
             153      Title 58, Chapter 56, Utah Uniform Building Standards Act.
             154          (15) For purposes of Subsection 59-12-104 (14), "manufacturing facility" means:
             155          (a) an establishment described in SIC Codes 2000 to 3999 of the 1987 Standard Industrial
             156      Classification Manual of the federal Executive Office of the President, Office of Management and
             157      Budget; or
             158          (b) a scrap recycler if:
             159          (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process one
             160      or more of the following items into prepared grades of processed materials for use in new products:
             161          (A) iron;
             162          (B) steel;
             163          (C) nonferrous metal;
             164          (D) paper;
             165          (E) glass;
             166          (F) plastic;
             167          (G) textile; or
             168          (H) rubber; and
             169          (ii) the new products under Subsection (15)(b)(i) would otherwise be made with
             170      nonrecycled materials.
             171          (16) (a) "Medicine" means:
             172          (i) insulin, syringes, and any medicine prescribed for the treatment of human ailments by
             173      a person authorized to prescribe treatments and dispensed on prescription filled by a registered
             174      pharmacist, or supplied to patients by a physician, surgeon, or podiatric physician;
             175          (ii) any medicine dispensed to patients in a county or other licensed hospital if prescribed
             176      for that patient and dispensed by a registered pharmacist or administered under the direction of a
             177      physician; and
             178          (iii) any oxygen or stoma supplies prescribed by a physician or administered under the
             179      direction of a physician or paramedic.
             180          (b) "Medicine" does not include:
             181          (i) any auditory, prosthetic, ophthalmic, or ocular device or appliance; or
             182          (ii) any alcoholic beverage.


             183          (17) "Olympic merchandise" means tangible personal property bearing an Olympic
             184      designation, emblem, insignia, mark, logo, service mark, symbol, terminology, trademark, or other
             185      copyrighted or protected material, including:
             186          (a) one or more of the following terms:
             187          (i) "Olympic;"
             188          (ii) "Olympiad;" or
             189          (iii) "Citius Altius Fortius;"
             190          (b) the symbol of the International Olympic Committee, consisting of five interlocking
             191      rings;
             192          (c) the emblem of the International Olympic Committee Corporation;
             193          (d) a United States Olympic Committee designation, emblem, insignia, mark, logo, service
             194      mark, symbol, terminology, trademark, or other copyrighted or protected material;
             195          (e) any emblem of the Winter Olympic Games of 2002 that is officially designated by the
             196      Salt Lake Organizing Committee of the Winter Olympic Games of 2002; or
             197          (f) the mascot of the Winter Olympic Games of 2002.
             198          (18) (a) "Other fuels" means products that burn independently to produce heat or energy.
             199          (b) "Other fuels" includes oxygen when it is used in the manufacturing of tangible personal
             200      property.
             201          (19) "Person" includes any individual, firm, partnership, joint venture, association,
             202      corporation, estate, trust, business trust, receiver, syndicate, this state, any county, city,
             203      municipality, district, or other local governmental entity of the state, or any group or combination
             204      acting as a unit.
             205          (20) "Purchase price" means the amount paid or charged for tangible personal property or
             206      any other taxable [item or service] transaction under Subsection 59-12-103 (1), excluding only cash
             207      discounts taken or any excise tax imposed on the purchase price by the federal government.
             208          (21) "Residential use" means the use in or around a home, apartment building, sleeping
             209      quarters, and similar facilities or accommodations.
             210          (22) (a) "Retail sale" means any sale within the state of tangible personal property or any
             211      other taxable [item or service] transaction under Subsection 59-12-103 (1), other than resale of such
             212      property, item, or service by a retailer or wholesaler to a user or consumer.
             213          (b) "Retail sale" includes sales by any farmer or other agricultural producer of poultry,


             214      eggs, or dairy products to consumers if the sales have an average monthly sales value of $125 or
             215      more.
             216          (c) "Retail sale" does not include, and no additional sales or use tax shall be assessed
             217      against, those transactions where a purchaser of tangible personal property pays applicable sales
             218      or use taxes on its initial nonexempt purchases of property and then enters into a sale-leaseback
             219      transaction by which title to such property is transferred by the purchaser-lessee to a lessor for
             220      consideration, provided:
             221          (i) the transaction is intended as a form of financing for the property to the
             222      purchaser-lessee; and
             223          (ii) pursuant to generally accepted accounting principles, the purchaser-lessee is required
             224      to capitalize the subject property for financial reporting purposes, and account for the lease
             225      payments as payments made under a financing arrangement.
             226          (23) (a) "Retailer" means any person engaged in a regularly organized retail business in
             227      tangible personal property or any other taxable [item or service] transaction under Subsection
             228      59-12-103 (1), and who is selling to the user or consumer and not for resale.
             229          (b) "Retailer" includes commission merchants, auctioneers, and any person regularly
             230      engaged in the business of selling to users or consumers within the state.
             231          (c) "Retailer" includes any person who engages in regular or systematic solicitation of a
             232      consumer market in this state by the distribution of catalogs, periodicals, advertising flyers, or
             233      other advertising, or by means of print, radio or television media, by mail, telegraphy, telephone,
             234      computer data base, cable, optic, microwave, or other communication system.
             235          (d) "Retailer" does not include farmers, gardeners, stockmen, poultrymen, or other growers
             236      or agricultural producers producing and doing business on their own premises, except those who
             237      are regularly engaged in the business of buying or selling for a profit.
             238          (e) For purposes of this chapter the commission may regard as retailers the following if
             239      they determine it is necessary for the efficient administration of this chapter: salesmen,
             240      representatives, peddlers, or canvassers as the agents of the dealers, distributors, supervisors, or
             241      employers under whom they operate or from whom they obtain the tangible personal property sold
             242      by them, irrespective of whether they are making sales on their own behalf or on behalf of these
             243      dealers, distributors, supervisors, or employers, except that:
             244          (i) a printer's facility with which a retailer has contracted for printing shall not be


             245      considered to be a salesman, representative, peddler, canvasser, or agent of the retailer; and
             246          (ii) the ownership of property that is located at the premises of a printer's facility with
             247      which the retailer has contracted for printing and that consists of the final printed product, property
             248      that becomes a part of the final printed product, or copy from which the printed product is
             249      produced, shall not result in the retailer being deemed to have or maintain an office, distribution
             250      house, sales house, warehouse, service enterprise, or other place of business, or to maintain a stock
             251      of goods, within this state.
             252          (24) "Sale" means any transfer of title, exchange, or barter, conditional or otherwise, in any
             253      manner, of tangible personal property or any other taxable [item or service] transaction under
             254      Subsection 59-12-103 (1), for [a] consideration. It includes:
             255          (a) installment and credit sales;
             256          (b) any closed transaction constituting a sale;
             257          (c) any sale of electrical energy, gas, services, or entertainment taxable under this chapter;
             258          (d) any transaction if the possession of property is transferred but the seller retains the title
             259      as security for the payment of the price; and
             260          (e) any transaction under which right to possession, operation, or use of any article of
             261      tangible personal property is granted under a lease or contract and the transfer of possession would
             262      be taxable if an outright sale were made.
             263          (25) (a) "Sales relating to schools" means the following sales or amounts paid or charged
             264      by a public school district or public or private elementary or secondary school, grades kindergarten
             265      through 12[, that]:
             266          (i) sales that are directly related to the school's or school district's educational functions
             267      or activities [and include], including:
             268          [(i)] (A) the sale of:
             269          (I) textbooks[,];
             270          (II) textbook fees[,];
             271          (III) laboratory fees[,];
             272          (IV) laboratory supplies[, and]; or
             273          (V) safety equipment;
             274          [(ii)] (B) the sale of clothing that:
             275          [(A)] (I) a student is specifically required to wear as a condition of participation in a


             276      school-related event or activity; and
             277          [(B)] (II) is not readily adaptable to general or continued usage to the extent that it takes
             278      the place of ordinary clothing;
             279          [(iii)] (C) sales of food if the net or gross revenues generated by the food sales are
             280      deposited into a school district fund or school fund dedicated to school meals; and
             281          [(iv)] (D) transportation charges for official school activities[.];
             282          (ii) amounts paid or charged for admission to a school-related event or school-related
             283      activity, including:
             284          (A) a concert;
             285          (B) a sports event;
             286          (C) a sports activity;
             287          (D) a play;
             288          (E) a dance; or
             289          (F) a school-related event or school-related activity similar to Subsections (25)(a)(ii)(A)
             290      through (E).
             291          (b) "Sales relating to schools" does not include:
             292          [(i) gate receipts;]
             293          [(ii) special event admission fees;]
             294          [(iii)] (i) bookstore sales of items that are not educational materials or supplies; [and] or
             295          [(iv)] (ii) except as provided in Subsection (25)(a)[(ii)] (i)(B), clothing.
             296          (26) "Senior citizen center" means a facility having the primary purpose of providing
             297      services to the aged as defined in Section 62A-3-101 .
             298          (27) "State" means the state of Utah, its departments, and agencies.
             299          (28) "Storage" means any keeping or retention of tangible personal property or any other
             300      taxable [item or service] transaction under Subsection 59-12-103 (1), in this state for any purpose
             301      except sale in the regular course of business.
             302          (29) (a) "Tangible personal property" means:
             303          (i) all goods, wares, merchandise, produce, and commodities;
             304          (ii) all tangible or corporeal things and substances which are dealt in or capable of being
             305      possessed or exchanged;
             306          (iii) water in bottles, tanks, or other containers; and


             307          (iv) all other physically existing articles or things, including property severed from real
             308      estate.
             309          (b) "Tangible personal property" does not include:
             310          (i) real estate or any interest or improvements in real estate;
             311          (ii) bank accounts, stocks, bonds, mortgages, notes, and other evidence of debt;
             312          (iii) insurance certificates or policies;
             313          (iv) personal or governmental licenses;
             314          (v) water in pipes, conduits, ditches, or reservoirs;
             315          (vi) currency and coinage constituting legal tender of the United States or of a foreign
             316      nation; and
             317          (vii) all gold, silver, or platinum ingots, bars, medallions, or decorative coins, not
             318      constituting legal tender of any nation, with a gold, silver, or platinum content of not less than
             319      80%.
             320          (30) (a) "Use" means the exercise of any right or power over tangible personal property
             321      under Subsection 59-12-103 (1), incident to the ownership or the leasing of that property, item, or
             322      service.
             323          (b) "Use" does not include the sale, display, demonstration, or trial of that property in the
             324      regular course of business and held for resale.
             325          (31) "Vehicle" means any aircraft, as defined in Section 72-10-102 ; any vehicle, as defined
             326      in Section 41-1a-102 ; any off-highway vehicle, as defined in Section 41-22-2 ; and any vessel, as
             327      defined in Section 41-1a-102 ; that is required to be titled, registered, or both. "Vehicle" for
             328      purposes of Subsection 59-12-104 (36) only, also includes any locomotive, freight car, railroad
             329      work equipment, or other railroad rolling stock.
             330          (32) "Vehicle dealer" means a person engaged in the business of buying, selling, or
             331      exchanging vehicles as defined in Subsection (31).
             332          (33) (a) "Vendor" means:
             333          (i) any person receiving any payment or consideration upon a sale of tangible personal
             334      property or any other taxable [item or service] transaction under Subsection 59-12-103 (1), or to
             335      whom such payment or consideration is payable; and
             336          (ii) any person who engages in regular or systematic solicitation of a consumer market in
             337      this state by the distribution of catalogs, periodicals, advertising flyers, or other advertising, or by


             338      means of print, radio or television media, by mail, telegraphy, telephone, computer data base,
             339      cable, optic, microwave, or other communication system.
             340          (b) "Vendor" does not mean a printer's facility described in Subsection (23)(e).
             341          Section 2. Section 59-12-103 is amended to read:
             342           59-12-103. Sales and use tax base -- Rate -- Use of sales and use tax revenues.
             343          (1) [There is levied a] A tax is imposed on the purchaser as provided in this part for [the
             344      amount] amounts paid or charged for the following transactions:
             345          (a) retail sales of tangible personal property made within the state;
             346          (b) [amount] amounts paid to common carriers or to telephone or telegraph corporations,
             347      whether the corporations are municipally or privately owned, for:
             348          (i) all transportation;
             349          (ii) intrastate telephone service; or
             350          (iii) telegraph service;
             351          (c) sales of the following for commercial use:
             352          (i) gas[,];
             353          (ii) electricity[,];
             354          (iii) heat[,];
             355          (iv) coal[,];
             356          (v) fuel oil[,]; or
             357          (vi) other fuels [sold for commercial use];
             358          (d) sales of the following for residential use:
             359          (i) gas[,];
             360          (ii) electricity[,];
             361          (iii) heat[,];
             362          (iv) coal[,];
             363          (v) fuel oil[,]; or
             364          (vi) other fuels [sold for residential use];
             365          (e) sales of meals [sold];
             366          (f) except as provided in Subsection 59-12-104 (38), amounts paid or charged as admission
             367      or user fees for theaters, movies, operas, museums, planetariums, shows of any type or nature,
             368      exhibitions, concerts, carnivals, amusement parks, amusement rides, circuses, menageries, fairs,


             369      races, contests, sporting events, dances, boxing matches, [and] wrestling matches, closed circuit
             370      television broadcasts, billiard [or] parlors, pool parlors, bowling lanes, golf [and], miniature golf,
             371      golf driving ranges, batting cages, skating rinks, ski lifts, ski runs, ski trails, snowmobile trails,
             372      tennis courts, swimming pools, water slides, river runs, jeep tours, boat tours, scenic cruises,
             373      horseback rides, sports activities, or any other amusement, entertainment, recreation, exhibition,
             374      cultural, or athletic activity;
             375          (g) amounts paid or charged for services:
             376          (i) for repairs or renovations of tangible personal property; or [services]
             377          (ii) to install tangible personal property in connection with other tangible personal property;
             378          (h) except as provided in Subsection 59-12-104 (7), amounts paid or charged for cleaning
             379      or washing of tangible personal property;
             380          (i) amounts paid or charged for tourist home, hotel, motel, or trailer court accommodations
             381      and services for less than 30 consecutive days;
             382          (j) amounts paid or charged for laundry [and] or dry cleaning services;
             383          (k) amounts paid or charged for leases [and] or rentals of tangible personal property if [the
             384      property]:
             385          (i) the tangible personal property's situs is in this state[, if];
             386          (ii) the lessee took possession of the tangible personal property in this state[,]; or [if]
             387          (iii) within this state the property is:
             388          (A) stored[,];
             389          (B) used[,]; or
             390          (C) otherwise consumed [in this state];
             391          (l) amounts paid or charged for tangible personal property if within this state the tangible
             392      personal property is:
             393          (i) stored[,];
             394          (ii) used[,]; or
             395          (iii) consumed [in this state]; and
             396          (m) amounts paid or charged for prepaid telephone calling cards.
             397          (2) Except [for] as provided in Subsection [(1)(d)] (3), the [rates of the] tax [levied under]
             398      rates imposed on a transaction described in Subsection (1) [shall be] are as follows:
             399          [(a) 5% through June 30, 1994;]


             400          [(b) 4.875%] (a) beginning on July 1, 1994 through June 30, 1997, the tax rate is 4.875%;
             401      and
             402          [(c) 4.75%] (b) beginning on July 1, 1997, the tax rate is 4.75%.
             403          (3) [The rates of the] Notwithstanding Subsection (2), beginning on January 1, 1990, the
             404      tax [levied under] rate imposed on a transaction described in Subsection (1)(d) [shall be] is 2%
             405      [from and after January 1, 1990].
             406          (4) (a) There shall be deposited in an Olympics special revenue fund or funds as determined
             407      by the Division of Finance under Section 51-5-4 , for the use of the Utah Sports Authority created
             408      under Title 63A, Chapter 7, Utah Sports Authority Act:
             409          (i) from January 1, 1990, through December 31, 1999, the amount of sales and use tax
             410      generated by a 1/64% tax rate on the taxable [items and services] transactions under Subsection
             411      (1);
             412          (ii) from January 1, 1990, through June 30, 1999, the amount of revenue generated by a
             413      1/64% tax rate under Section 59-12-204 or Section 59-12-205 on the taxable [items and services]
             414      transactions under Subsection (1); and
             415          (iii) interest earned on the amounts under Subsections (4)(a)(i) and (ii).
             416          (b) These funds shall be used:
             417          (i) by the Utah Sports Authority as follows:
             418          (A) to the extent funds are available, to transfer directly to a debt service fund or to
             419      otherwise reimburse to the state any amount expended on debt service or any other cost of any
             420      bonds issued by the state to construct any public sports facility as defined in Section 63A-7-103 ;
             421          (B) to pay for the actual and necessary operating, administrative, legal, and other expenses
             422      of the Utah Sports Authority, but not including protocol expenses for seeking and obtaining the
             423      right to host the Winter Olympic Games; and
             424          (C) unless the Legislature appropriates additional funds from the Olympics Special
             425      Revenue Fund to the Utah Sports Authority, the Utah Sports Authority may not expend, loan, or
             426      pledge in the aggregate more than:
             427          (I) $59,000,000 of sales and use tax deposited into the Olympics special revenue fund
             428      under Subsection (4)(a);
             429          (II) the interest earned on the amount described in Subsection (4)(b)(i)(C)(I); and
             430          (III) the revenues deposited into the Olympics Special Revenue Fund that are not sales and


             431      use taxes deposited under Subsection (4)(a) or interest on the sales and use taxes;
             432          (ii) to pay salary, benefits, or administrative costs associated with the State Olympic
             433      Officer under Subsection 63A-10-103 (3), except that the salary, benefits, or administrative costs
             434      may not be paid from the sales and tax revenues generated by municipalities or counties and
             435      deposited under Subsection (4)(a)(ii).
             436          (c) A payment of salary, benefits, or administrative costs under Subsection 63A-10-103 (3)
             437      is not considered an expenditure of the Utah Sports Authority.
             438          (d) If the Legislature appropriates additional funds under Subsection (4)(b)(i)(C), the
             439      authority may not expend, loan, pledge, or enter into any agreement to expend, loan, or pledge the
             440      appropriated funds unless the authority:
             441          (i) contracts in writing for the full reimbursement of the monies to the Olympics special
             442      revenue fund by a public sports entity or other person benefitting from the expenditure; and
             443          (ii) obtains a security interest that secures payment or performance of the obligation to
             444      reimburse.
             445          (e) A contract or agreement entered into in violation of Subsection (4)(d) is void.
             446          (5) (a) From July 1, 1997, the annual amount of sales and use tax generated by a 1/8% tax
             447      rate on the taxable [items and services] transactions under Subsection (1) shall be used as follows:
             448          (i) 50% shall be used for water and wastewater projects as provided in Subsections (5)(b)
             449      through (f); and
             450          (ii) 50% shall be used for transportation projects as provided in Subsections (5)(g) through
             451      (h).
             452          (b) Five hundred thousand dollars each year shall be transferred to the Agriculture
             453      Resource Development Fund created in Section 4-18-6 .
             454          (c) Fifty percent of the remaining amount generated by 50% of the 1/8% tax rate shall be
             455      transferred to the Water Resources Conservation and Development Fund created in Section
             456      73-10-24 for use by the Division of Water Resources. In addition to the uses allowed of the fund
             457      under Section 73-10-24 , the fund may also be used to:
             458          (i) provide a portion of the local cost share, not to exceed in any fiscal year 50% of the
             459      funds made available to the Division of Water Resources under this section, of potential project
             460      features of the Central Utah Project;
             461          (ii) conduct hydrologic and geotechnical investigations by the Department of Natural


             462      Resources in a cooperative effort with other state, federal, or local entities, for the purpose of
             463      quantifying surface and ground water resources and describing the hydrologic systems of an area
             464      in sufficient detail so as to enable local and state resource managers to plan for and accommodate
             465      growth in water use without jeopardizing the resource;
             466          (iii) fund state required dam safety improvements; and
             467          (iv) protect the state's interest in interstate water compact allocations, including the hiring
             468      of technical and legal staff.
             469          (d) Twenty-five percent of the remaining amount generated by 50% of the 1/8% tax rate
             470      shall be transferred to the Utah Wastewater Loan Program subaccount created in Section 73-10c-5
             471      for use by the Water Quality Board to fund wastewater projects as defined in Section 73-10b-2 .
             472          (e) Twenty-five percent of the remaining amount generated by 50% of the 1/8% tax rate
             473      shall be transferred to the Drinking Water Loan Program subaccount created in Section 73-10c-5
             474      for use by the Division of Drinking Water to:
             475          (i) provide for the installation and repair of collection, treatment, storage, and distribution
             476      facilities for any public water system, as defined in Section 19-4-102 ;
             477          (ii) develop underground sources of water, including springs and wells; and
             478          (iii) develop surface water sources.
             479          (f) Notwithstanding Subsections (5)(b), (c), (d), and (e), $100,000 of the remaining amount
             480      generated by 50% of the 1/8% tax rate each year shall be transferred as dedicated credits to the
             481      Division of Water Rights to cover the costs incurred in hiring legal and other technical staff for the
             482      adjudication of water rights. Any remaining balance at the end of each fiscal year shall lapse back
             483      to the contributing funds on a prorated basis.
             484          (g) Fifty percent of the 1/8% tax rate shall be transferred to the class B and class C roads
             485      account to be expended as provided in Title 72, Chapter 2, Transportation Finances Act, for the
             486      use of class B and C road funds except as provided in Subsection (5)(h).
             487          (h) (i) If H.B. 53, "Transportation Corridor Preservation," passes in the 1996 General
             488      Session, $500,000 each year shall be transferred to the Transportation Corridor Preservation
             489      Revolving Loan Fund, and if H.B. 121, "State Park Access Roads," passes in the 1996 General
             490      Session, from July 1, 1997, through June 30, 2006, $500,000 shall be transferred to the Department
             491      of Transportation for the State Park Access Highways Improvement Program. The remaining
             492      amount generated by 50% of the 1/8% tax rate shall be transferred to the class B and class C roads


             493      account.
             494          (ii) At least 50% of the money transferred to the Transportation Corridor Preservation
             495      Revolving Loan Fund under Subsection (5)(h)(i) shall be used to fund loan applications made by
             496      the Department of Transportation at the request of local governments.
             497          (6) (a) Beginning on January 1, 2000, the Division of Finance shall deposit into the
             498      Centennial Highway Fund created in Section 72-2-118 a portion of the state sales and use tax
             499      under Subsections (2) and (3) equal to the revenues generated by a 1/64% tax rate on the taxable
             500      [items and services] transactions under Subsection (1).
             501          (b) Except for sales and use taxes deposited under Subsection (7), beginning on July 1,
             502      1999, the revenues generated by the 1/64% tax rate:
             503          (i) retained under Subsection 59-12-204 (7)(a) shall be retained by the counties, cities, or
             504      towns as provided in Section 59-12-204 ; and
             505          (ii) retained under Subsection 59-12-205 (4)(a) shall be distributed to each county, city, and
             506      town as provided in Section 59-12-205 .
             507          (7) Beginning on July 1, 1999, the commission shall deposit into the Airport to University
             508      of Utah Light Rail Restricted Account created in Section 17A-2-1064 the portion of the sales and
             509      use tax under Sections 59-12-204 and 59-12-205 that is:
             510          (a) generated by a city or town that will have constructed within its boundaries the Airport
             511      to University of Utah Light Rail described in the Transportation Equity Act for the 21st Century,
             512      Pub. L. No. 105-178, Sec. 3030(c)(2)(B)(i)(II), 112 Stat. 107; and
             513          (b) equal to the revenues generated by a 1/64% tax rate on the taxable items and services
             514      under Subsection (1).
             515          Section 3. Effective date.
             516          This act takes effect on July 1, 2000.




Legislative Review Note
    as of 1-3-00 3:06 PM


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

Office of Legislative Research and General Counsel


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