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Second Substitute S.J.R. 6

Senator Howard A. Stephenson proposes the following substitute bill:


             1     
JOINT RESOLUTION URGING A STUDY

             2     
OF CERTAIN EXEMPTIONS

             3     
2002 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Sponsor: Michael G. Waddoups

             6      This joint resolution of the Legislature urges the Tax Review Commission to conduct a
             7      two-year study of certain tax exemptions, suggests the scope of the study, and requests the
             8      Commission to make annual reports to the Revenue and Taxation Interim Committee.
             9      Be it resolved by the Legislature of the state of Utah:
             10          WHEREAS, by the year 2007 public education enrollment is expected to increase by more
             11      than 50,000 students;
             12          WHEREAS, by the year 2007 higher education enrollment is expected to increase by more
             13      than 20,000 students;
             14          WHEREAS, education funding needs should be examined and a variety of options for
             15      addressing these funding needs should be considered; and
             16          WHEREAS, the Utah Tax Review Commission is well situated and qualified to examine
             17      issues relating to tax exemptions and their impact on education funding:
             18          NOW, THEREFORE, BE IT RESOLVED that the Legislature of the state of Utah urge the
             19      Utah Tax Review Commission to conduct a study during the 2002 and 2003 interims as follows:
             20          (1) (a) Study tax exemptions that an electrical power system owned by a city or town, a
             21      community recreation center owned by a county, city, or town, or a hospital or nursing home
             22      owned by a nonprofit entity may be allowed under the Utah Constitution or statute, including:
             23          (i) sales and use tax exemptions;
             24          (ii) property tax exemptions;
             25          (iii) individual income tax exemptions; and


             26          (iv) corporate franchise and income tax exemptions.
             27          (b) Study other tax exemptions for the entities described in Subsection (1)(a) as the Utah
             28      Tax Review Commission considers appropriate.
             29          (c) Study one or more tax exemptions described in Subsection (1)(a) allowed to a
             30      company, a center, or an entity other than an entity described in Subsection (1)(a) that:
             31          (i) provides services that are similar to the services provided by an entity that is subject
             32      to taxation; or
             33          (ii) competes for business with an entity that is subject to taxation.
             34          (2) (a) Review the cost of the exemptions that the Utah Tax Review Commission studies.
             35          (b) Review the purpose and effectiveness of the exemptions that the Utah Tax Review
             36      Commission studies.
             37          (c) Determine whether the exemptions that the Utah Tax Review Commission studies
             38      benefit the state.
             39          (d) Determine whether the exemptions that the Utah Tax Review Commission studies
             40      result in an unfair competitive advantage to an entity described in Subsection (1)(a) as compared
             41      to an entity subject to taxation that:
             42          (i) provides services that are similar to the services provided by the entity described in
             43      Subsection (1)(a); or
             44          (ii) competes for business with the entity described in Subsection (1)(a).
             45          (e) Review the taxes imposed on entities subject to taxation that provide services that are
             46      similar to the services provided by an entity described in Subsection (1)(a) or compete for business
             47      with an entity described in Subsection (1)(a), including:
             48          (i) sales and use taxes;
             49          (ii) property taxes;
             50          (iii) individual income taxes; and
             51          (iv) corporate franchise and income taxes.
             52          (f) Determine whether an entity described in Subsection (1)(a) should contribute to funding
             53      public education, higher education, or both.
             54          (g) Determine whether any of the exemptions allowed to an entity described in Subsection
             55      (1)(a) that the Utah Tax Review Commission studies should be:
             56          (i) continued;


             57          (ii) modified; or
             58          (iii) repealed.
             59          (h) If the Utah Tax Review Commission determines that an exemption allowed to an entity
             60      described in Subsection (1)(a) should be repealed, determine whether there should be imposed on
             61      the entity:
             62          (i) a tax;
             63          (ii) a fee; or
             64          (iii) a combination of a tax and a fee.
             65          BE IT FURTHER RESOLVED that the Legislature urge the Utah Tax Review
             66      Commission, in conducting the study, to request and consider testimony from:
             67          (1) (a) one or more cities or towns that own an electrical power system; or
             68          (b) one or more counties, cities, or towns that own a community recreation center;
             69          (2) one or more directors or officers of a:
             70          (a) hospital owned by a nonprofit entity; or
             71          (b) nursing home owned by a nonprofit entity; and
             72          (3) one or more owners, managers, or operators of an entity subject to taxation that
             73      competes for business with an entity described in Subsection (1)(a) of the preceding paragraph that
             74      is allowed an exemption described in that subsection.
             75          BE IT FURTHER RESOLVED that the Legislature urge the Utah Tax Review
             76      Commission to report to the Revenue and Taxation Interim Committee:
             77          (1) on or before the November 2002 interim meeting regarding the Utah Tax Review
             78      Commission's progress on its study; and
             79          (2) on or before the November 2003 interim meeting regarding:
             80          (a) the Utah Tax Review Commission's findings and recommendations on its study; and
             81          (b) the basis for determining whether the exemptions that the Utah Tax Review
             82      Commission studies should be:
             83          (i) continued;
             84          (ii) modified; or
             85          (iii) repealed.
             86          BE IT FURTHER RESOLVED that a copy of this joint resolution be delivered to the chair
             87      of the Utah Tax Review Commission.


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