H.B. 136

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 October 1, 2003 for highways, fixed guideways, or systems for public transit. 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 October 1, 2003, and subject to the other 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 October 1, 2003 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 follow the procedures outlined in
106 Title 11, Chapter 14, Utah Municipal Bond Act.
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 October 1, 2003, a county enacts or repeals a tax 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 October 1, 2003, the 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