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H.B. 136

This document includes Senate 2nd Reading Floor Amendments incorporated into the bill on Tue, Mar 4, 2003 at 6:31 PM by smaeser. -->              1     

COUNTY OPTION SALES AND USE TAX FOR

             2     
HIGHWAYS, FIXED GUIDEWAYS, OR

             3     
SYSTEMS FOR PUBLIC TRANSIT

             4     
2003 GENERAL SESSION

             5     
STATE OF UTAH

             6     
Sponsor: Jeff Alexander

             7      This act modifies the Sales and Use Tax Act to provide definitions and to authorize a
             8      county legislative body to impose a local option sales and use tax beginning on or after
             9      S [ October 1, 2003 ] APRIL 1, 2005 s for highways, fixed guideways, or systems for public transit.
             9a      The act
             10      provides procedures and requirements for imposing the tax and establishes the duties of
             11      the State Tax Commission to administer, collect, and enforce the tax. The act authorizes
             12      the State Tax Commission to retain a portion of the tax to cover the costs of
             13      administering the tax. The act creates the State Highway Projects Within Counties Fund.
             14      The act requires the Department of Transportation to make a separate accounting for
             15      each county for which revenues are deposited into the fund. This act provides the
             16      purposes for which revenues and interest deposited into the fund may be expended. The
             17      act provides that the fund shall earn interest and the interest shall be allocated to each
             18      county for which revenues are deposited into the fund.
             19      This act affects sections of Utah Code Annotated 1953 as follows:
             20      ENACTS:
             21          59-12-1501, Utah Code Annotated 1953
             22          59-12-1502, Utah Code Annotated 1953
             23          59-12-1503, Utah Code Annotated 1953
             24          72-2-121.1, Utah Code Annotated 1953
             25      Be it enacted by the Legislature of the state of Utah:
             26          Section 1. Section 59-12-1501 is enacted to read:


             27     
Part 15. County Option Sales and Use Tax for Highways, Fixed Guideways,


             28     
or Systems for Public Transit

             29          59-12-1501. Title.
             30          This part is known as the "County Option Sales and Use Tax for Highways, Fixed
             31      Guideways, or Systems for Public Transit Act."
             32          Section 2. Section 59-12-1502 is enacted to read:
             33          59-12-1502. Definitions.
             34          As used in this part:
             35          (1) "Annexation" means an annexation to a county under Title 17, Chapter 2,
             36      Annexation to County.
             37          (2) "Annexing area" means an area that is annexed into a county.
             38          (3) "Qualifying county" means a county in which a sales and use tax authorized by
             39      Section 59-12-502 is not imposed by:
             40          (a) the county;
             41          (b) a city within the county; or
             42          (c) a town within the county.
             43          (4) "State highway" means a highway designated as a state highway under Title 72,
             44      Chapter 4, Designation of State Highways Act.
             45          (5) (a) Except as provided in Subsection (5)(b), "public transit" is as defined in Section
             46      17A-2-1004 .
             47          (b) Notwithstanding Subsection (5)(a), "public transit" does not include a fixed
             48      guideway system.
             49          Section 3. Section 59- 12-1503 is enacted to read:
             50          59-12-1503. Opinion question election -- Imposition of tax -- Use of tax revenues.
             51          (1) (a) Beginning on or after S [October 1, 2003] APRIL 1, 2005
s , and subject to the other
             51a      provisions of
             52      this part, the county legislative body of a qualifying county may impose a sales and use tax of
             53      .25%:
             54          (i) except as provided in Subsection (1)(b), on the transactions:
             55          (A) described in Subsection 59-12-103 (1); and
             56          (B) within the county, including the cities and towns within the county;
             57          (ii) for the purposes determined by the county legislative body in accordance with


             58      Subsection (2); and


             59          (iii) in addition to any other sales and use tax authorized under this chapter.
             60          (b) Notwithstanding Subsection (1)(a)(i), a county legislative body may not impose a
             61      tax under this section on:
             62          (i) the sales and uses described in Section 59-12-104 to the extent the sales and uses
             63      are exempt from taxation under Section 59-12-104 ; and
             64          (ii) any amount paid or charged by a vendor that collects a tax under Subsection
             65      59-12-107 (1)(b).
             66          (2) (a) Subject to Subsection (2)(b), before obtaining the approval required by
             67      Subsection (3), a county legislative body shall adopt a resolution specifying the percentage of
             68      revenues the county will receive from the tax under this part that will be allocated to fund one
             69      or more of the following:
             70          (i) a project or service relating to a fixed guideway system:
             71          (A) for the portion of the project or service that is performed within the county; and
             72          (B) if the fixed guideway system is owned and operated by a public transit district
             73      organized under Title 17A, Chapter 2, Part 10, Utah Public Transit District Act;
             74          (ii) a project or service relating to a system for public transit:
             75          (A) for the portion of the project or service that is performed within the county; and
             76          (B) if the system for public transit is owned and operated by a public transit district
             77      organized under Title 17A, Chapter 2, Part 10, Utah Public Transit District Act; or
             78          (iii) the following relating to a state highway within the county:
             79          (A) a project beginning on or after S [ October 1, 2003 ] THE DAY ON WHICH A COUNTY
             79a      LEGISLATIVE BODY IMPOSES A TAX UNDER THIS PART s only within the county involving:
             80          (I) new construction;
             81          (II) a renovation;
             82          (III) an improvement; or
             83          (IV) an environmental study;
             84          (B) debt service on a project described in Subsections (2)(a)(iii)(A)(I) through (IV); or
             85          (C) bond issuance costs relating to a project described in Subsections (2)(a)(iii)(A)(I)
             86      through (IV).
             87          (b) (i) A county legislative body shall in the resolution required by Subsection (2)(a)
             88      allocate as required by Subsection (2)(a) 100% of the revenues the county will receive from the
             89      tax under this part.


             90          (ii) For purposes of Subsection (2)(b), the revenues a county will receive from the tax
             91      under this part do not include amounts retained by the commission in accordance with
             92      Subsection (8).
             93          (3) (a) Before imposing a tax under this part, a county legislative body shall:
             94          (i) obtain approval from a majority of the members of the county legislative body to:
             95          (A) impose the tax; and
             96          (B) allocate the revenues the county will receive from the tax in accordance with the
             97      resolution adopted in accordance with Subsection (2); and
             98          (ii) subject to Subsection (3)(b), submit an opinion question to the county's registered
             99      voters voting on the imposition of the tax so that each registered voter has the opportunity to
             100      express the registered voter's opinion on whether a tax should be imposed under this part.
             101          (b) The opinion question required by Subsection (3)(a)(ii) shall state the allocations
             102      specified in the resolution:
             103          (i) adopted in accordance with Subsection (2); and
             104          (ii) approved by the county legislative body in accordance with Subsection (3)(a).
             105          (c) The election required by this Subsection (3) shall S [ follow the procedures outlined in ]
             105a      BE HELD:
             105b          (i) AT A REGULAR GENERAL ELECTION; AND
             105c          (ii) IN ACCORDANCE WITH THE PROCEDURES AND REQUIREMENTS OF TITLE 20A,
             105d      ELECTION CODE, GOVERNING REGULAR GENERAL ELECTIONS.
             106      [ Title 11, Chapter 14, Utah Municipal Bond Act. ] s
             107          (4) (a) Subject to Subsection (8), if a county legislative body determines that a majority
             108      of the county's registered voters voting on the imposition of the tax have voted in favor of the
             109      imposition of the tax in accordance with Subsection (3), the county legislative body may
             110      impose the tax by a majority vote of all of the members of the county legislative body.
             111          (b) If a county legislative body imposes a tax under Subsection (4)(a), the revenues
             112      generated by the tax shall be:
             113          (i) allocated in accordance with the allocations specified in the resolution under
             114      Subsection (2); and
             115          (ii) expended as provided in this part.
             116          (5) If a county legislative body allocates revenues generated by the tax for a project
             117      described in Subsection (2)(a)(iii)(A), before beginning the project the county legislative body
             118      shall:


             119          (a) obtain approval from the Transportation Commission to complete the project; and
             120          (b) enter into an interlocal agreement:


             121          (i) established in accordance with Title 11, Chapter 13, Interlocal Cooperation Act;
             122          (ii) with the Department of Transportation; and
             123          (iii) to complete the project.
             124          (6) (a) If after a county legislative body imposes a tax under Subsection (4) the county
             125      legislative body seeks to change the allocation of the tax specified in the resolution under
             126      Subsection (2), the county legislative body may change the allocation of the tax by:
             127          (i) adopting a resolution in accordance with Subsection (2) specifying the percentage of
             128      revenues the county will receive from the tax under this part that will be allocated to fund one
             129      or more of the systems or projects described in Subsection (2);
             130          (ii) obtaining approval to change the allocation of the tax from a majority of the
             131      members of the county legislative body; and
             132          (iii) (A) submitting an opinion question to the county's registered voters voting on
             133      changing the allocation of the tax so that each registered voter has the opportunity to express
             134      the registered voter's opinion on whether the allocation of the tax should be changed; and
             135          (B) obtaining approval to change the allocation of the tax from a majority of the
             136      county's registered voters voting on changing the allocation of the tax.
             137          (b) (i) The opinion question required by Subsection (6)(a)(iii) shall state the allocations
             138      specified in the resolution:
             139          (A) adopted in accordance with Subsection (6)(a)(i); and
             140          (B) approved by the county legislative body in accordance with Subsection (6)(a)(ii).
             141          (ii) The election required by Subsection (6)(a)(iii) shall follow the procedures and
             142      requirements of Title 11, Chapter 14, Utah Municipal Bond Act.
             143          (7) (a) (i) Except as provided in Subsection (7)(a)(ii), revenues generated by a tax
             144      under this part that are allocated for a purpose described in Subsection (2)(a)(i) or (ii) shall be
             145      transmitted:
             146          (A) by the commission;
             147          (B) to the county;
             148          (C) monthly; and
             149          (D) by electronic funds transfer.
             150          (ii) Notwithstanding Subsection (7)(a)(i), a county may request that the commission
             151      transfer the revenues described in Subsection (7)(a)(i):


             152          (A) directly to a public transit district:
             153          (I) organized under Title 17A, Chapter 2, Part 10, Utah Public Transit District Act; and
             154          (II) designated by the county; and
             155          (B) by providing written notice to the commission:
             156          (I) requesting the revenues to be transferred directly to a public transit district as
             157      provided in Subsection (7)(a)(ii)(A); and
             158          (II) designating the public transit district to which the revenues are requested to be
             159      transferred.
             160          (b) Revenues generated by a tax under this part that are allocated for a purpose
             161      described in Subsection (2)(a)(iii) shall be:
             162          (i) deposited into the State Highway Projects Within Counties Fund created by Section
             163      72-2-121.1 ; and
             164          (ii) expended as provided in Section 72-2-121.1 .
             165          (8) (a) The commission shall administer, collect, and enforce the tax under this part in
             166      accordance with the procedures outlined in:
             167          (i) Part 1, Tax Collection, for the administration, collection, and enforcement of the
             168      state sales and use tax; and
             169          (ii) Chapter 1, General Taxation Policies.
             170          (b) (i) The commission may retain an amount of tax collected under this part of not to
             171      exceed the lesser of:
             172          (A) 1.5%; or
             173          (B) an amount equal to the cost to the commission of administering this part.
             174          (ii) Any amount the commission retains under Subsection (8)(b)(i) shall be:
             175          (A) placed in the Sales and Use Tax Administrative Fees Account; and
             176          (B) used as provided in Subsection 59-12-206 (2).
             177          (9) (a) (i) If, on or after S [ October 1, 2003 ] APRIL 1, 2005 s , a county enacts or repeals a tax
             177a      under this
             178      part, the enactment or repeal shall take effect:
             179          (A) on the first day of a calendar quarter; and
             180          (B) after a 75-day period beginning on the date the commission receives notice meeting
             181      the requirements of Subsection (9)(a)(ii) from the county.
             182          (ii) The notice described in Subsection (9)(a)(i)(B) shall state:


             183          (A) that the county will enact or repeal a tax under this part;
             184          (B) the statutory authority for the tax described in Subsection (9)(a)(ii)(A);
             185          (C) the effective date of the tax described in Subsection (9)(a)(ii)(A); and
             186          (D) if the county enacts the tax described in Subsection (9)(a)(ii)(A), the rate of the tax.
             187          (b) (i) If, for an annexation that occurs on or after S [ October 1, 2003 ] APRIL 1, 2005 s , the
             187a      annexation will
             188      result in the enactment or repeal of a tax under this part for an annexing area, the enactment or
             189      repeal shall take effect:
             190          (A) on the first day of a calendar quarter; and
             191          (B) after a 75-day period beginning on the date the commission receives notice meeting
             192      the requirements of Subsection (9)(b)(ii) from the county that annexes the annexing area.
             193          (ii) The notice described in Subsection (9)(b)(i)(B) shall state:
             194          (A) that the annexation described in Subsection (9)(b)(i)(B) will result in an enactment
             195      or repeal of a tax under this part for the annexing area;
             196          (B) the statutory authority for the tax described in Subsection (9)(b)(ii)(A);
             197          (C) the effective date of the tax described in Subsection (9)(b)(ii)(A); and
             198          (D) the rate of the tax described in Subsection (9)(b)(ii)(A).
             199          Section 4. Section 72-2-121.1 is enacted to read:
             200          72-2-121.1. State Highway Projects Within Counties Fund -- Accounting for
             201      revenues -- Interest -- Expenditure of revenues.
             202          (1) There is created a special revenue fund known as the State Highway Projects
             203      Within Counties Fund.
             204          (2) The State Highway Projects Within Counties Fund shall be funded by revenues
             205      generated by a tax imposed by a county under Title 59, Chapter 12, Part 15, County Option
             206      Sales and Use Tax for Highways, Fixed Guideways, or Systems for Public Transit, if those
             207      revenues are allocated:
             208          (a) for a purpose described in Subsection 59-12-1503(2)(a)(iii); and
             209          (b) in accordance with Section 59-12-1503 .
             210          (3) The department shall make a separate accounting for:
             211          (a) the revenues described in Subsection (2); and
             212          (b) each county for which revenues are deposited into the State Highway Projects
             213      Within Counties Fund.



             214          (4) (a) The State Highway Projects Within Counties Fund shall earn interest.
             215          (b) The department shall allocate the interest earned on the State Highway Projects
             216      Within Counties Fund:
             217          (i) proportionately;
             218          (ii) to each county's balance in the State Highway Project Within Counties Fund; and
             219          (iii) on the basis of each county's balance in the State Highway Projects Within
             220      Counties Fund.
             221          (5) The department shall expend the revenues and interest deposited into the State
             222      Highway Projects Within Counties Fund to pay:
             223          (a) for a project:
             224          (i) described in Subsection 59-12-1503 (2)(a)(iii)(A); and
             225          (ii) for which the requirements of Subsection 59-12-1503 (5) are met;
             226          (b) debt service on a project described in Subsection (5)(a); or
             227          (c) bond issuance costs relating to a project described in Subsection (5)(a).




Legislative Review Note
    as of 2-18-03 3:51 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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