H.B. 136 Enrolled

COUNTY OPTION SALES AND USE TAX FOR
HIGHWAYS, FIXED GUIDEWAYS, OR
SYSTEMS FOR PUBLIC TRANSIT
2003 GENERAL SESSION
STATE OF UTAH
Sponsor: Jeff Alexander
This act modifies the Sales and Use Tax Act to provide definitions and to authorize a
county legislative body to impose a local option sales and use tax beginning on or after
April 1, 2004 for highways, fixed guideways, or systems for public transit. The act
provides procedures and requirements for imposing the tax and establishes the duties of
the State Tax Commission to administer, collect, and enforce the tax. The act authorizes
the State Tax Commission to retain a portion of the tax to cover the costs of
administering the tax. The act creates the State Highway Projects Within Counties Fund.
The act requires the Department of Transportation to make a separate accounting for
each county for which revenues are deposited into the fund. This act provides the
purposes for which revenues and interest deposited into the fund may be expended. The
act provides that the fund shall earn interest and the interest shall be allocated to each
county for which revenues are deposited into the fund.
This act affects sections of Utah Code Annotated 1953 as follows:
ENACTS:
59-12-1501, Utah Code Annotated 1953
59-12-1502, Utah Code Annotated 1953
59-12-1503, Utah Code Annotated 1953
72-2-121.1, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 59-12-1501 is enacted to read:
Part 15. County Option Sales and Use Tax for Highways, Fixed Guideways,
or Systems for Public Transit
59-12-1501. Title.

This part is known as the "County Option Sales and Use Tax for Highways, Fixed
Guideways, or Systems for Public Transit Act."
Section 2. Section 59-12-1502 is enacted to read:
59-12-1502. Definitions.
As used in this part:
(1) "Annexation" means an annexation to a county under Title 17, Chapter 2, Annexation
to County.
(2) "Annexing area" means an area that is annexed into a county.
(3) "Qualifying county" means a county in which a sales and use tax authorized by
Section 59-12-502 is not imposed by:
(a) the county;
(b) a city within the county; or
(c) a town within the county.
(4) "State highway" means a highway designated as a state highway under Title 72,
Chapter 4, Designation of State Highways Act.
(5) (a) Except as provided in Subsection (5)(b), "public transit" is as defined in Section
17A-2-1004 .
(b) Notwithstanding Subsection (5)(a), "public transit" does not include a fixed guideway
system.
Section 3. Section 59-12-1503 is enacted to read:
59-12-1503. Opinion question election -- Imposition of tax -- Use of tax revenues --
Administration, collection, and enforcement of tax by commission -- Administrative fee --
Enactment or repeal of tax -- Annexation -- Notice.
(1) (a) Beginning on or after April 1, 2004, and subject to the other provisions of this
part, the county legislative body of a qualifying county may impose a sales and use tax of .25%:
(i) except as provided in Subsection (1)(b), on the transactions:
(A) described in Subsection 59-12-103 (1); and
(B) within the county, including the cities and towns within the county;

- 2 -

(ii) for the purposes determined by the county legislative body in accordance with
Subsection (2); and
(iii) in addition to any other sales and use tax authorized under this chapter.
(b) Notwithstanding Subsection (1)(a)(i), a county legislative body may not impose a tax
under this section on:
(i) the sales and uses described in Section 59-12-104 to the extent the sales and uses are
exempt from taxation under Section 59-12-104 ; and
(ii) any amount paid or charged by a vendor that collects a tax under Subsection
59-12-107 (1)(b).
(2) (a) Subject to Subsection (2)(b), before obtaining the approval required by Subsection
(3), a county legislative body shall adopt a resolution specifying the percentage of revenues the
county will receive from the tax under this part that will be allocated to fund one or more of the
following:
(i) a project or service relating to a fixed guideway system:
(A) for the portion of the project or service that is performed within the county; and
(B) if the fixed guideway system is owned and operated by a public transit district
organized under Title 17A, Chapter 2, Part 10, Utah Public Transit District Act;
(ii) a project or service relating to a system for public transit:
(A) for the portion of the project or service that is performed within the county; and
(B) if the system for public transit is owned and operated by a public transit district
organized under Title 17A, Chapter 2, Part 10, Utah Public Transit District Act; or
(iii) the following relating to a state highway within the county:
(A) a project beginning on or after the day on which a county legislative body imposes a
tax under this part only within the county involving:
(I) new construction;
(II) a renovation;
(III) an improvement; or
(IV) an environmental study;

- 3 -

(B) debt service on a project described in Subsections (2)(a)(iii)(A)(I) through (IV); or
(C) bond issuance costs relating to a project described in Subsections (2)(a)(iii)(A)(I)
through (IV).
(b) (i) A county legislative body shall in the resolution required by Subsection (2)(a)
allocate as required by Subsection (2)(a) 100% of the revenues the county will receive from the
tax under this part.
(ii) For purposes of Subsection (2)(b), the revenues a county will receive from the tax
under this part do not include amounts retained by the commission in accordance with
Subsection (8).
(3) (a) Before imposing a tax under this part, a county legislative body shall:
(i) obtain approval from a majority of the members of the county legislative body to:
(A) impose the tax; and
(B) allocate the revenues the county will receive from the tax in accordance with the
resolution adopted in accordance with Subsection (2); and
(ii) subject to Subsection (3)(b), submit an opinion question to the county's registered
voters voting on the imposition of the tax so that each registered voter has the opportunity to
express the registered voter's opinion on whether a tax should be imposed under this part.
(b) The opinion question required by Subsection (3)(a)(ii) shall state the allocations
specified in the resolution:
(i) adopted in accordance with Subsection (2); and
(ii) approved by the county legislative body in accordance with Subsection (3)(a).
(c) The election required by this Subsection (3) shall be held:
(i) (A) at a regular general election; and
(B) in accordance with the procedures and requirements of Title 20A, Election Code,
governing regular general elections; or
(ii) (A) at a special election called by the county legislative body;
(B) only on the date of a municipal general election provided in Subsection
20A-1-202 (1); and

- 4 -

(C) in accordance with the procedures and requirements of Section 20A-a-203 .
(4) (a) Subject to Subsection (8), if a county legislative body determines that a majority
of the county's registered voters voting on the imposition of the tax have voted in favor of the
imposition of the tax in accordance with Subsection (3), the county legislative body may impose
the tax by a majority vote of all of the members of the county legislative body.
(b) If a county legislative body imposes a tax under Subsection (4)(a), the revenues
generated by the tax shall be:
(i) allocated in accordance with the allocations specified in the resolution under
Subsection (2); and
(ii) expended as provided in this part.
(5) If a county legislative body allocates revenues generated by the tax for a project
described in Subsection (2)(a)(iii)(A), before beginning the project the county legislative body
shall:
(a) obtain approval from the Transportation Commission to complete the project; and
(b) enter into an interlocal agreement:
(i) established in accordance with Title 11, Chapter 13, Interlocal Cooperation Act;
(ii) with the Department of Transportation; and
(iii) to complete the project.
(6) (a) If after a county legislative body imposes a tax under Subsection (4) the county
legislative body seeks to change the allocation of the tax specified in the resolution under
Subsection (2), the county legislative body may change the allocation of the tax by:
(i) adopting a resolution in accordance with Subsection (2) specifying the percentage of
revenues the county will receive from the tax under this part that will be allocated to fund one or
more of the systems or projects described in Subsection (2);
(ii) obtaining approval to change the allocation of the tax from a majority of the members
of the county legislative body; and
(iii) (A) submitting an opinion question to the county's registered voters voting on
changing the allocation of the tax so that each registered voter has the opportunity to express the

- 5 -

registered voter's opinion on whether the allocation of the tax should be changed; and
(B) obtaining approval to change the allocation of the tax from a majority of the county's
registered voters voting on changing the allocation of the tax.
(b) (i) The opinion question required by Subsection (6)(a)(iii) shall state the allocations
specified in the resolution:
(A) adopted in accordance with Subsection (6)(a)(i); and
(B) approved by the county legislative body in accordance with Subsection (6)(a)(ii).
(ii) The election required by Subsection (6)(a)(iii) shall follow the procedures and
requirements of Title 11, Chapter 14, Utah Municipal Bond Act.
(7) (a) (i) Except as provided in Subsection (7)(a)(ii), revenues generated by a tax under
this part that are allocated for a purpose described in Subsection (2)(a)(i) or (ii) shall be
transmitted:
(A) by the commission;
(B) to the county;
(C) monthly; and
(D) by electronic funds transfer.
(ii) Notwithstanding Subsection (7)(a)(i), a county may request that the commission
transfer the revenues described in Subsection (7)(a)(i):
(A) directly to a public transit district:
(I) organized under Title 17A, Chapter 2, Part 10, Utah Public Transit District Act; and
(II) designated by the county; and
(B) by providing written notice to the commission:
(I) requesting the revenues to be transferred directly to a public transit district as
provided in Subsection (7)(a)(ii)(A); and
(II) designating the public transit district to which the revenues are requested to be
transferred.
(b) Revenues generated by a tax under this part that are allocated for a purpose described
in Subsection (2)(a)(iii) shall be:

- 6 -

(i) deposited into the State Highway Projects Within Counties Fund created by Section
72-2-121.1 ; and
(ii) expended as provided in Section 72-2-121.1 .
(8) (a) The commission shall administer, collect, and enforce the tax under this part in
accordance with the procedures outlined in:
(i) Part 1, Tax Collection, for the administration, collection, and enforcement of the state
sales and use tax; and
(ii) Chapter 1, General Taxation Policies.
(b) (i) The commission may retain an amount of tax collected under this part of not to
exceed the lesser of:
(A) 1.5%; or
(B) an amount equal to the cost to the commission of administering this part.
(ii) Any amount the commission retains under Subsection (8)(b)(i) shall be:
(A) placed in the Sales and Use Tax Administrative Fees Account; and
(B) used as provided in Subsection 59-12-206 (2).
(9) (a) (i) If, on or after April 1, 2004, a county enacts or repeals a tax under this part, the
enactment or repeal shall take effect:
(A) on the first day of a calendar quarter; and
(B) after a 75-day period beginning on the date the commission receives notice meeting
the requirements of Subsection (9)(a)(ii) from the county.
(ii) The notice described in Subsection (9)(a)(i)(B) shall state:
(A) that the county will enact or repeal a tax under this part;
(B) the statutory authority for the tax described in Subsection (9)(a)(ii)(A);
(C) the effective date of the tax described in Subsection (9)(a)(ii)(A); and
(D) if the county enacts the tax described in Subsection (9)(a)(ii)(A), the rate of the tax.
(b) (i) If, for an annexation that occurs on or after April 1, 2004, the annexation will
result in the enactment or repeal of a tax under this part for an annexing area, the enactment or
repeal shall take effect:

- 7 -

(A) on the first day of a calendar quarter; and
(B) after a 75-day period beginning on the date the commission receives notice meeting
the requirements of Subsection (9)(b)(ii) from the county that annexes the annexing area.
(ii) The notice described in Subsection (9)(b)(i)(B) shall state:
(A) that the annexation described in Subsection (9)(b)(i)(B) will result in an enactment or
repeal of a tax under this part for the annexing area;
(B) the statutory authority for the tax described in Subsection (9)(b)(ii)(A);
(C) the effective date of the tax described in Subsection (9)(b)(ii)(A); and
(D) the rate of the tax described in Subsection (9)(b)(ii)(A).
Section 4. Section 72-2-121.1 is enacted to read:
72-2-121.1. State Highway Projects Within Counties Fund -- Accounting for
revenues -- Interest -- Expenditure of revenues.
(1) There is created a special revenue fund known as the State Highway Projects Within
Counties Fund.
(2) The State Highway Projects Within Counties Fund shall be funded by revenues
generated by a tax imposed by a county under Title 59, Chapter 12, Part 15, County Option Sales
and Use Tax for Highways, Fixed Guideways, or Systems for Public Transit Act, if those
revenues are allocated:
(a) for a purpose described in Subsection 59-12-1503(2)(a)(iii); and
(b) in accordance with Section 59-12-1503 .
(3) The department shall make a separate accounting for:
(a) the revenues described in Subsection (2); and
(b) each county for which revenues are deposited into the State Highway Projects Within
Counties Fund.
(4) (a) The State Highway Projects Within Counties Fund shall earn interest.
(b) The department shall allocate the interest earned on the State Highway Projects
Within Counties Fund:
(i) proportionately;

- 8 -

(ii) to each county's balance in the State Highway Projects Within Counties Fund; and
(iii) on the basis of each county's balance in the State Highway Projects Within Counties
Fund.
(5) The department shall expend the revenues and interest deposited into the State
Highway Projects Within Counties Fund to pay:
(a) for a project:
(i) described in Subsection 59-12-1503 (2)(a)(iii)(A); and
(ii) for which the requirements of Subsection 59-12-1503 (5) are met;
(b) debt service on a project described in Subsection (5)(a); or
(c) bond issuance costs relating to a project described in Subsection (5)(a).

- 9 -