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S.B. 23 Enrolled

                 

STATE AND LOCAL TAXES, FEES, AND

                 
CHARGES RELATED TO

                 
TELECOMMUNICATIONS

                 
2003 GENERAL SESSION

                 
STATE OF UTAH

                 
Sponsor: Curtis S. Bramble

                  This act modifies the Utah Municipal Code to enact the Municipal Telecommunications
                  License Tax Act and to make technical changes. As enacted, the Municipal
                  Telecommunications License Tax Act authorizes a municipality to levy and collect a
                  municipal telecommunications license tax by ordinance. The act provides for the
                  collection, administration, and enforcement of the tax through the State Tax Commission.
                  This act limits a municipality's authority to impose other telecommunications taxes or
                  fees. This act provides for reporting of tax rate related information. This act addresses
                  customer remedies. The act addresses how bundled transactions are taxed under the
                  Municipal Telecommunications License Tax Act. This act addresses rights-of-way
                  provisions. This act modifies provisions related to the charge that may be imposed for
                  emergency telephone services. This act addresses how the location of a transaction for
                  telephone service and mobile telecommunications service is determined under the Sales
                  and Use Tax Act. This act provides an effective date.
                  This act affects sections of Utah Code Annotated 1953 as follows:
                  AMENDS:
                      10-1-203, as last amended by Chapter 172, Laws of Utah 2000
                      11-26-1, as last amended by Chapter 9, Laws of Utah 2001
                      59-1-403, as last amended by Chapters 52 and 175, Laws of Utah 2002
                      59-12-102, as last amended by Chapters 77, 117, 192 and 320, Laws of Utah 2002
                      59-12-207, as last amended by Chapters 157 and 320, Laws of Utah 2002
                      69-2-5, as last amended by Chapter 320, Laws of Utah 2002
                      69-2-5.5, as last amended by Chapter 320, Laws of Utah 2002
                      72-7-102, as last amended by Chapter 347, Laws of Utah 2000


                      72-7-108, as last amended by Chapter 347, Laws of Utah 2000
                  ENACTS:
                      10-1-401, Utah Code Annotated 1953
                      10-1-402, Utah Code Annotated 1953
                      10-1-403, Utah Code Annotated 1953
                      10-1-404, Utah Code Annotated 1953
                      10-1-405, Utah Code Annotated 1953
                      10-1-406, Utah Code Annotated 1953
                      10-1-407, Utah Code Annotated 1953
                      10-1-408, Utah Code Annotated 1953
                      10-1-409, Utah Code Annotated 1953
                      10-1-410, Utah Code Annotated 1953
                  REPEALS:
                      11-26-3, as last amended by Chapter 262, Laws of Utah 2000
                  Be it enacted by the Legislature of the state of Utah:
                      Section 1. Section 10-1-203 is amended to read:
                       10-1-203. License fees and taxes -- Application information to be transmitted to the
                  county auditor.
                      (1) For the purpose of this section[,]:
                      (a) "business" means any enterprise carried on for the purpose of gain or economic profit,
                  except that the acts of employees rendering services to employers are not included in this
                  definition[.];
                      (b) "telecommunications provider" is as defined in Section 10-1-402 ; and
                      (c) "telecommunications tax or fee" is as defined in Section 10-1-402 .
                      (2) Except as provided in Subsections (3) through (5), the governing body of a
                  municipality may license for the purpose of regulation and revenue any business within the limits
                  of the municipality and may regulate that business by ordinance.
                      (3) (a) The governing body of a municipality may raise revenue by levying and collecting

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                  a municipal energy sales or use tax as provided in Part 3, Municipal Energy Sales and Use Tax
                  Act, except a municipality may not levy or collect a franchise tax or fee [as defined in Subsection
                  10-1-303 (7)] on an energy supplier other than the municipal energy sales and use tax provided in
                  Part 3, Municipal Energy Sales and Use Tax Act.
                      (b) (i) Subsection (3)(a) does not affect the validity of a franchise agreement as defined
                  in Subsection 10-1-303 (6), that is in effect on July 1, 1997, or a future franchise.
                      (ii) A franchise agreement as defined in Subsection 10-1-303 (6) in effect on January 1,
                  1997, or a future franchise shall remain in full force and effect.
                      (c) A municipality that collects a contractual franchise fee pursuant to a franchise
                  agreement as defined in Subsection 10-1-303 (6) with an energy supplier that is in effect on July
                  1, 1997, may continue to collect that fee as provided in Subsection 10-1-310 (2).
                      (d) (i) Subject to the requirements of Subsection (3)(d)(ii), a franchise agreement as
                  defined in Subsection 10-1-303 (6) between a municipality and an energy supplier may contain a
                  provision that:
                      (A) requires the energy supplier by agreement to pay a contractual franchise fee that is
                  otherwise prohibited under Part 3, Municipal Energy Sales and Use Tax Act; and
                      (B) imposes the contractual franchise fee on or after the day on which Part 3, Municipal
                  Energy Sales and Use Tax is:
                      (I) repealed, invalidated, or the maximum allowable rate provided in Section 10-1-305 is
                  reduced; and
                      (II) is not superseded by a law imposing a substantially equivalent tax.
                      (ii) A municipality may not charge a contractual franchise fee under the provisions
                  permitted by Subsection (3)(b)(i) unless the municipality charges an equal contractual franchise
                  fee or a tax on all energy suppliers.
                      [(4) Subject to the provisions of Title 11, Chapter 26, Local Taxation of Utilities
                  Limitation, a municipality may impose upon, charge, or collect from a public utility engaged in
                  the business of supplying telephone service or other person or entity engaged in the business of
                  supplying telephone service any tax, license, fee, license fee, license tax, or similar charge, or any

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                  combination of any of these, based upon the gross revenues of the utility, person, or entity
                  derived from sales or use or both sales and use of the telephone service within the municipality.]
                      (4) (a) Subject to Subsection (4)(b), beginning July 1, 2004, the governing body of a
                  municipality may raise revenue by levying and providing for the collection of a municipal
                  telecommunications license tax as provided in Part 4, Municipal Telecommunications License
                  Tax Act.
                      (b) A municipality may not levy or collect a telecommunications tax or fee on a
                  telecommunications provider except as provided in Part 4, Municipal Telecommunications
                  License Tax Act.
                      (5) (a) The governing body of a municipality may by ordinance raise revenue by levying
                  and collecting a license fee or tax on:
                      (i) a parking service business in an amount that is less than or equal to:
                      (A) $1 per vehicle that parks at the parking service business; or
                      (B) 2% of the gross receipts of the parking service business;
                      (ii) a public assembly facility in an amount that is less than or equal to $1 per ticket
                  purchased from the public assembly facility; and
                      (iii) subject to the limitations of Subsections (5)(c) and (d), a business that causes
                  disproportionate costs of municipal services or for which the municipality provides an enhanced
                  level of municipal services in an amount that is reasonably related to the costs of the municipal
                  services provided by the municipality.
                      (b) For purposes of this Subsection (5):
                      (i) "Municipal services" include:
                      (A) public utilities; or
                      (B) services for:
                      (I) police;
                      (II) fire;
                      (III) storm water runoff;
                      (IV) traffic control;

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                      (V) parking;
                      (VI) transportation;
                      (VII) beautification; or
                      (VIII) snow removal.
                      (ii) "Parking service business" means a business:
                      (A) that primarily provides off-street parking services for a public facility that is wholly
                  or partially funded by public moneys;
                      (B) that provides parking for one or more vehicles; and
                      (C) that charges a fee for parking.
                      (iii) "Public assembly facility" means a business operating an assembly facility that:
                      (A) is wholly or partially funded by public moneys; and
                      (B) requires a person attending an event at the assembly facility to purchase a ticket.
                      (c) Before the governing body of a municipality imposes a license fee or tax on a
                  business that causes disproportionate costs of municipal services under Subsection (5)(a)(iii), the
                  governing body of the municipality shall adopt an ordinance defining for purposes of the tax
                  under Subsection (5)(a)(iii) what constitutes disproportionate costs and what amounts are
                  reasonably related to the costs of the municipal services provided by the municipality.
                      (d) Before the governing body of a municipality imposes a license fee or tax on a
                  business for which it provides an enhanced level of municipal services under Subsection
                  (5)(a)(iii), the governing body of the municipality shall adopt an ordinance defining for purposes
                  of the tax under Subsection (5)(a)(iii) what constitutes the basic level of municipal services in the
                  municipality and what amounts are reasonably related to the costs of providing an enhanced level
                  of municipal services in the municipality.
                      (6) All license fees and taxes shall be uniform in respect to the class upon which they are
                  imposed.
                      (7) The governing body shall transmit the information from each approved business
                  license application to the county assessor within 60 days following the approval of the
                  application.

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                      (8) If challenged in court, an ordinance enacted by a municipality before January 1, 1994,
                  imposing a business license fee or tax on rental dwellings under this section shall be upheld
                  unless the business license fee or tax is found to impose an unreasonable burden on the fee or tax
                  payer.
                      Section 2. Section 10-1-401 is enacted to read:
                 
Part 4. Municipal Telecommunications License Tax Act

                      10-1-401. Title.
                      This part is known as the "Municipal Telecommunications License Tax Act."
                      Section 3. Section 10-1-402 is enacted to read:
                      10-1-402. Definitions.
                      As used in this part:
                      (1) "Commission" means the State Tax Commission.
                      (2) (a) Subject to Subsections (2)(b) and (c), "customer" means the person who is
                  obligated under a contract with a telecommunications provider to pay for telecommunications
                  service received under the contract.
                      (b) For purposes of this section and Section 10-1-407 , "customer" means:
                      (i) the person who is obligated under a contract with a telecommunications provider to
                  pay for telecommunications service received under the contract; or
                      (ii) if the end user is not the person described in Subsection (2)(b)(i), the end user of
                  telecommunications service.
                      (c) "Customer" does not include a reseller:
                      (i) of telecommunications service; or
                      (ii) for mobile telecommunications service, of a serving carrier under an agreement to
                  serve the customer outside the telecommunications provider's licensed service area.
                      (3) (a) "End user" means the person who uses a telecommunications service.
                      (b) For purposes of telecommunications service provided to a person who is not an
                  individual, "end user" means the individual who uses the telecommunications service on behalf
                  of the person who is provided the telecommunications service.

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                      (4) "Gross receipts from telecommunications service" means the revenue that a
                  telecommunications provider receives for telecommunications service rendered except for
                  amounts collected or paid as:
                      (a) a tax, fee, or charge:
                      (i) imposed by a governmental entity;
                      (ii) separately identified as a tax, fee, or charge in the transaction with the customer for
                  the telecommunications service; and
                      (iii) imposed only on a telecommunications provider;
                      (b) sales and use taxes collected by the telecommunications provider from a customer
                  under Title 59, Chapter 12, Sales and Use Tax Act; or
                      (c) interest, a fee, or a charge that is charged by a telecommunications provider on a
                  customer for failure to pay for telecommunications service when payment is due.
                      (5) "Mobile telecommunications service" is as defined in the Mobile
                  Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
                      (6) "Municipality" means a city or town.
                      (7) "Place of primary use":
                      (a) for telecommunications service other than mobile telecommunications service, means
                  the street address representative of where the customer's use of the telecommunications service
                  primarily occurs, which shall be:
                      (i) the residential street address of the customer; or
                      (ii) the primary business street address of the customer; or
                      (b) for mobile telecommunications service, is as defined in the Mobile
                  Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
                      (8) Notwithstanding where a call is billed or paid, "service address" means:
                      (a) if the location described in this Subsection (8)(a) is known, the location of the
                  telecommunications equipment:
                      (i) to which a call is charged; and
                      (ii) from which the call originates or terminates;

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                      (b) if the location described in Subsection (8)(a) is not known but the location described
                  in this Subsection (8)(b) is known, the location of the origination point of the signal of the
                  telecommunications service first identified by:
                      (i) the telecommunications system of the telecommunications provider; or
                      (ii) if the system used to transport the signal is not a system of the telecommunications
                  provider, information received by the telecommunications provider from its service provider; or
                      (c) if the locations described in Subsection (8)(a) or (b) are not known, the location of a
                  customer's place of primary use.
                      (9) (a) Subject to Subsections (9)(b) and (9)(c), "telecommunications provider" means a
                  person that:
                      (i) owns, controls, operates, or manages a telecommunications service; or
                      (ii) engages in an activity described in Subsection (9)(a)(i) for the shared use with or
                  resale to any person of the telecommunications service.
                      (b) A person described in Subsection (9)(a) is a telecommunications provider whether or
                  not the Public Service Commission of Utah regulates:
                      (i) that person; or
                      (ii) the telecommunications service that the person owns, controls, operates, or manages.
                      (c) "Telecommunications provider" does not include an aggregator as defined in Section
                  54-8b-2 .
                      (10) "Telecommunications service" means:
                      (a) telephone service, as defined in Section 59-12-102 , other than mobile
                  telecommunications service, that originates and terminates within the boundaries of this state;
                  and
                      (b) mobile telecommunications service, as defined in Section 59-12-102 :
                      (i) that originates and terminates within the boundaries of one state; and
                      (ii) only to the extent permitted by the Mobile Telecommunications Sourcing Act, 4
                  U.S.C. Sec. 116 et seq.
                      (11) (a) Except as provided in Subsection (11)(b), "telecommunications tax or fee"

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                  means any of the following imposed by a municipality on a telecommunications provider:
                      (i) a tax;
                      (ii) a license;
                      (iii) a fee;
                      (iv) a license fee;
                      (v) a license tax;
                      (vi) a franchise fee; or
                      (vii) a charge similar to a tax, license, or fee described in Subsections (11)(a)(i) through
                  (vi).
                      (b) "Telecommunications tax or fee" does not include:
                      (i) the municipal telecommunications license tax authorized by this part; or
                      (ii) a tax, fee, or charge, including a tax imposed under Title 59, Revenue and Taxation,
                  that is imposed:
                      (A) on telecommunications providers; and
                      (B) on persons who are not telecommunications providers.
                      Section 4. Section 10-1-403 is enacted to read:
                      10-1-403. Municipality may levy municipal telecommunications license tax --
                  Recovery from customers -- Annexation.
                      (1) (a) Subject to the provisions of this section, beginning July 1, 2004, a municipality
                  may levy on and provide that there is collected from a telecommunications provider a municipal
                  telecommunications license tax on the telecommunications provider's gross receipts from
                  telecommunications service that are attributed to the municipality in accordance with Section
                  10-1-407 .
                      (b) To levy and provide for the collection of a municipal telecommunications license tax
                  under this part, the municipality shall adopt an ordinance that complies with the requirements of
                  Section 10-1-404 .
                      (c) A municipal telecommunications license tax imposed under this part shall be at a rate
                  of up to 4% of the telecommunications provider's gross receipts from telecommunications service

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                  that are attributed to the municipality in accordance with Section 10-1-407 .
                      (2) A telecommunications provider may recover the amounts paid in municipal
                  telecommunications license taxes from the customers of the telecommunications provider within
                  the municipality imposing the municipal telecommunications license tax through a charge that is
                  separately identified in the statement of the transaction with the customer as the recovery of a
                  tax.
                      (3) (a) For purposes of this Subsection (3):
                      (i) "Annexation" means an annexation to a municipality under Title 10, Chapter 2, Part 4,
                  Annexation.
                      (ii) "Annexing area" means an area that is annexed into a municipality.
                      (b) (i) If, on or after July 1, 2004, a municipality enacts or repeals a tax under this part or
                  changes the rate of the tax, the enactment, repeal, or change 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 (3)(b)(ii) from the municipality.
                      (ii) The notice described in Subsection (3)(b)(i)(B) shall state:
                      (A) that the municipality will enact or repeal a tax under this part or change the rate of
                  the tax;
                      (B) the statutory authority for the tax described in Subsection (3)(b)(ii)(A);
                      (C) the effective date of the tax described in Subsection (3)(b)(ii)(A); and
                      (D) if the municipality enacts the municipal telecommunications license tax or changes
                  the rate of the tax, the new rate of the tax.
                      (c) (i) If, for an annexation that occurs on or after July 1, 2004, the annexation will result
                  in a change in the rate of the tax under this part for an annexing area, the change 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 (3)(c)(ii) from the municipality that annexes the annexing area.
                      (ii) The notice described in Subsection (3)(c)(i)(B) shall state:

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                      (A) that the annexation described in Subsection (3)(c)(i) will result in a change in the rate
                  of a tax under this part for the annexing area;
                      (B) the statutory authority for the tax described in Subsection (3)(c)(ii)(A);
                      (C) the effective date of the tax described in Subsection (3)(c)(ii)(A); and
                      (D) the new rate of the tax described in Subsection (3)(c)(ii)(A).
                      Section 5. Section 10-1-404 is enacted to read:
                      10-1-404. Municipal telecommunications license tax ordinance provisions.
                      An ordinance required by Subsection 10-1-403 (1) shall include a provision that:
                      (1) levies a municipal telecommunications license tax:
                      (a) on the gross receipts from telecommunications service attributed to the municipality
                  in accordance with Section 10-1-407 ;
                      (b) at a rate:
                      (i) not to exceed the rate specified in Subsection 10-1-403 (1)(c); and
                      (ii) subject to the requirements of Section 10-1-407 ; and
                      (c) beginning on a date:
                      (i) on or after July 1, 2004; and
                      (ii) subject to the requirements of Section 10-1-403 ;
                      (2) on or before the effective date of the ordinance, the municipality shall enter into the
                  uniform interlocal agreement with the commission described in Section 10-1-405 under which
                  the commission collects, enforces, and administers the municipal telecommunications license
                  tax;
                      (3) exempts a municipality from the limitation on the rate that may be imposed under
                  Subsection (1)(b)(i) if the exemption from the limitation on the rate that may be imposed under
                  Subsection (1)(b)(i) is approved by a majority vote of the voters in the municipality that vote in:
                      (a) a municipal general election;
                      (b) a regular general election; or
                      (c) a local special election; and
                      (4) incorporates the provisions of Section 10-1-408 .

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                      Section 6. Section 10-1-405 is enacted to read:
                      10-1-405. Collection of taxes by commission -- Uniform interlocal agreement --
                  Charge for services.
                      (1) Subject to the other provisions of this section, the commission shall collect, enforce,
                  and administer any municipal telecommunications license tax imposed under this part pursuant
                  to:
                      (a) the same procedures used in the administration, collection, and enforcement of the
                  state sales and use tax under:
                      (i) Title 59, Chapter 1, General Taxation Policies; and
                      (ii) Title 59, Chapter 12, Part 1, Tax Collection:
                      (A) except for Sections 59-12-104 , 59-12-104.1 , and 59-12-104.2 ; and
                      (B) except that for purposes of Section 59-12-110 , the term "taxpayer" may include a
                  customer from whom a municipal telecommunications license tax is recovered in accordance
                  with Subsection 10-1-403 (2); and
                      (b) a uniform interlocal agreement:
                      (i) between:
                      (A) the municipality that imposes the municipal telecommunications license tax; and
                      (B) the commission;
                      (ii) that is executed under Title 11, Chapter 13, Interlocal Cooperation Act;
                      (iii) that complies with Subsection (2)(a); and
                      (iv) that is developed by rule in accordance with Subsection (2)(b).
                      (2) (a) The uniform interlocal agreement described in Subsection (1) shall provide that
                  the commission shall:
                      (i) transmit monies collected under this part:
                      (A) monthly; and
                      (B) by electronic funds transfer by the commission to the municipality;
                      (ii) conduct audits of the municipal telecommunications license tax;
                      (iii) charge the municipality for the commission's services under this section in an

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                  amount:
                      (A) sufficient to reimburse the commission for the cost to the commission in rendering
                  the services; and
                      (B) that may not exceed an amount equal to 1.5% of the municipal telecommunications
                  license tax imposed by the ordinance of the municipality; and
                      (iv) collect, enforce, and administer the municipal telecommunications license tax
                  authorized under this part pursuant to the same procedures used in the administration, collection,
                  and enforcement of the state sales and use tax as provided in Subsection (1)(a).
                      (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
                  commission shall develop a uniform interlocal agreement that meets the requirements of this
                  section.
                      (3) The administrative fee charged under Subsection (2)(a) shall be:
                      (a) deposited in the Sales and Use Tax Administrative Fees Account; and
                      (b) used for administration of municipal telecommunications license taxes under this
                  part.
                      Section 7. Section 10-1-406 is enacted to read:
                      10-1-406. Limitation of other telecommunications taxes or fees.
                      (1) Subject to the other provisions of this section, a municipality may not levy or collect
                  a telecommunications tax or fee on a person except for a telecommunications tax or fee imposed
                  by the municipality:
                      (a) on a telecommunications provider to recover the management costs of the
                  municipality caused by the activities of the telecommunications provider in the right-of-way of a
                  municipality if the telecommunications tax or fee:
                      (i) is imposed in accordance with Section 72-7-102 ; and
                      (ii) is not related to:
                      (A) a municipality's loss of use of a highway as a result of the activities of the
                  telecommunications provider in a right-of-way; or
                      (B) increased deterioration of a highway as a result of the activities of the

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                  telecommunications provider in a right-of-way; or
                      (b) on a person that:
                      (i) is not subject to a municipal telecommunications license tax under this part; and
                      (ii) locates telecommunications facilities, as defined in Section 72-7-108 , in the
                  municipality.
                      (2) Subsection (1)(a) may not be interpreted as exempting a telecommunications provider
                  from complying with any ordinance:
                      (a) related to excavation, construction, or installation of a telecommunications facility;
                  and
                      (b) that addresses the safety and quality standards of the municipality for excavation,
                  construction, or installation.
                      (3) A telecommunications tax or fee imposed under Subsection (1)(b) shall be imposed:
                      (a) by ordinance; and
                      (b) on a competitively neutral basis.
                      Section 8. Section 10-1-407 is enacted to read:
                      10-1-407. Attributing the gross receipts from telecommunications service to a
                  municipality -- Rate impact.
                      (1) The gross receipts from a telecommunications service are attributed to a municipality
                  if the gross receipts are from a transaction for telecommunications service that is located within
                  the municipality:
                      (a) for purposes of sales and use taxes under Title 59, Chapter 12, Sales and Use Tax
                  Act; and
                      (b) determined in accordance with Section 59-12-207 .
                      (2) (a) The rate imposed on the gross receipts for telecommunications service shall be
                  determined in accordance with Subsection (2)(b) if the location of a transaction for
                  telecommunications service is determined under Subsection (1) to be a municipality other than
                  the municipality in which is located:
                      (i) for telecommunications service other than mobile telecommunications service, the

- 14 -


                  customer's service address; or
                      (ii) for mobile telecommunications service, the customer's primary place of use.
                      (b) The rate imposed on the gross receipts for telecommunications service described in
                  Subsection (2)(a) shall be the lower of:
                      (i) the rate imposed by the taxing jurisdiction in which the transaction is located under
                  Subsection (1); or
                      (ii) the rate imposed by the municipality in which it is located:
                      (A) for telecommunications service other than mobile telecommunications service, the
                  customer's service address; or
                      (B) for mobile telecommunications service, the customer's primary place of use.
                      Section 9. Section 10-1-408 is enacted to read:
                      10-1-408. Procedure for taxes erroneously recovered from customers.
                      A customer may not bring a cause of action against a telecommunications provider on the
                  basis that the telecommunications provider erroneously recovered from the customer municipal
                  telecommunications license taxes authorized by this part:
                      (1) unless the customer provides the telecommunications provider written notice that:
                      (a) the customer requests a refund of the amounts paid by the customer pursuant to
                  Subsection 10-1-403 (2); and
                      (b) contains the information necessary to determine the validity of the request described
                  in Subsection (1)(a); and
                      (2) before 60 days from the day on which the telecommunications provider receives the
                  written notice required by Subsection (1).
                      Section 10. Section 10-1-409 is enacted to read:
                      10-1-409. Report on rate information.
                      (1) (a) In accordance with this section, the commission shall submit a report to the
                  Legislature on or before February 16, 2004, that specifies the percentage calculated under
                  Subsection (1)(b) for each municipality that as of July 1, 2003 has imposed a tax, fee, or charge
                  under:

- 15 -


                      (i) Section 10-1-203 in effect as of July 1, 2003; and
                      (ii) Title 11, Chapter 26, Local Taxation of Utilities Limitation, in effect as of July 1,
                  2003.
                      (b) The percentage for each municipality described in Subsection (1)(a) shall be
                  calculated by:
                      (i) determining, on the basis of the report required by Subsection (2)(a), the revenues
                  received by the municipality during the period beginning July 1, 2003 and ending December 31,
                  2003 under:
                      (A) Section 10-1-203 in effect as of July 1, 2003; and
                      (B) Title 11, Chapter 26, Local Taxation of Utilities Limitation, in effect as of July 1,
                  2003;
                      (ii) dividing the number calculated under Subsection (1)(b)(i) by the aggregate for all
                  telecommunications providers of the gross receipts from telecommunications service attributed to
                  the municipality:
                      (A) as if the municipal telecommunications license tax authorized by this part had been
                  imposed by the municipality;
                      (B) during the period beginning July 1, 2003 and ending December 31, 2003; and
                      (C) on the basis of the report required by Subsection (2)(b);
                      (iii) rounding the number calculated under Subsection (1)(b)(ii) up to the nearest .01%;
                  and
                      (iv) adding .01% to the number calculated under Subsection (1)(b)(iii).
                      (c) The report required by this Subsection (1) shall be submitted to:
                      (i) (A) the Revenue and Taxation Standing Committee of the:
                      (I) House of Representatives; and
                      (II) Senate; and
                      (B) the Office of Legislative Research and General Counsel; and
                      (ii) provide information to the Legislature for the Legislature to evaluate whether the
                  maximum rate authorized by this part for the municipal telecommunications license tax should

- 16 -


                  be modified.
                      (d) The commission shall provide a copy of the report submitted under this Subsection
                  (1) to the Utah League of Cities and Towns on February 16, 2004.
                      (2) By no later than January 31, 2004 each:
                      (a) municipality described in Subsection (1)(a) shall file a report with the commission
                  certifying:
                      (i) the revenues received by the municipality during the period beginning July 1, 2003
                  and ending December 31, 2003 under:
                      (A) Section 10-1-203 in effect as of July 1, 2003; and
                      (B) Title 11, Chapter 26, Local Taxation of Utilities Limitation, in effect as of July 1,
                  2003; and
                      (b) telecommunications provider providing telecommunications service in this state shall
                  file a report with the commission stating the gross receipts from telecommunications service
                  received by the telecommunications provider for each municipality described in Subsection
                  (1)(a):
                      (i) as if the municipal telecommunications license tax had been imposed by the
                  municipality;
                      (ii) for the period beginning July 1, 2003 and ending December 31, 2003; and
                      (iii) that are attributed to the municipality.
                      Section 11. Section 10-1-410 is enacted to read:
                      10-1-410. Transactions consisting of telecommunications service and
                  nontelecommunications services.
                      (1) For purposes of this section, "nontelecommunications services" means services or
                  tangible personal property that are:
                      (a) not telecommunications service; and
                      (b) provided by a telecommunications provider to a customer.
                      (2) Except to the extent prohibited by federal law, if a telecommunications provider
                  provides nontelecommunications services to a customer as part of the same transaction in which

- 17 -


                  the telecommunications provider provides telecommunications service, the gross receipts from
                  the nontelecommunications services provided by the telecommunications provider are subject to
                  a tax under this part unless:
                      (a) the charge for the nontelecommunications services is separately identified in the
                  statement of the transaction with the customer of the telecommunications service; or
                      (b) from the books and records of the telecommunications provider that are kept in the
                  regular course of business, the telecommunications provider can reasonably identify the portion
                  of the total charge for the transaction that is attributable to:
                      (i) the nontelecommunications services; and
                      (ii) the telecommunications service.
                      Section 12. Section 11-26-1 is amended to read:
                       11-26-1. Definitions -- Ceiling on local charges based on gross revenues of public
                  service provider.
                      (1) As used in this chapter:
                      [(a) (i) "Exchange access services" means telephone exchange lines or channels, and
                  services provided in connection with them, which are necessary to provide access from the
                  premises of a subscriber to the local switched public telecommunications network of the public
                  utility to effect communication or the transfer of information.]
                      [(ii) "Exchange access services" does not include:]
                      [(A) private line services;]
                      [(B) long distance toll services;]
                      [(C) carrier access services;]
                      [(D) telephonic services that are not regulated by the Utah Public Service Commission;
                  and]
                      [(E) services that emulate functions available in customer premises equipment.]
                      [(b)] (a) "Local charge" means one or more of the following charges paid by a public
                  service provider to a county or municipality:
                      (i) a tax;

- 18 -


                      (ii) a license;
                      (iii) a fee;
                      (iv) a license fee;
                      (v) a license tax; or
                      (vi) a charge similar to Subsections (1)[(b)](a)(i) through (v).
                      (b) "Municipality" means:
                      (i) a city; or
                      (ii) a town.
                      (c) "Public service provider" means[: (i) a public utility; or (ii)] a person [or entity]
                  engaged in the business of supplying[: (A) telephone service; or (B)] taxable energy as defined
                  in Section 10-1-303 .
                      (2) A county or a municipality may not impose upon, charge, or collect from a public
                  service provider local charges:
                      (a) imposed on the basis of the gross revenues of the public service provider;
                      (b) derived from sales, use, or both sales and use of the service within the county or
                  municipality; and
                      (c) in a total amount that is greater than 6% of gross revenues.
                      (3) The determination of gross revenues under this section may not include:
                      (a) the sale of gas or electricity as special fuel for motor vehicles; or
                      [(b) the sale of telephone service provided by a public utility regulated by the Utah Public
                  Service Commission other than:]
                      [(i) exchange access services;]
                      [(ii) extended area service;]
                      [(iii) customer access line charges; and]
                      [(iv) any services for which a tax or other charge was being paid pursuant to this section
                  as of January 1, 1992; or]
                      [(c)] (b) a local charge.
                      (4) This section may not be construed to:

- 19 -


                      (a) affect or limit the power of counties or municipalities to impose sales and use taxes
                  under:
                      (i) Title 59, Chapter 12, [Part 2, Local] Sales and Use Tax Act[,]; or
                      (ii) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act; or
                      (b) grant any county or municipality the power to impose a local charge not otherwise
                  provided for by law.
                      (5) This section takes precedence over any conflicting provision of law.
                      Section 13. Section 59-1-403 is amended to read:
                       59-1-403. Confidentiality -- Exceptions -- Penalty -- Application to property tax.
                      (1) (a) Except as provided in this section, any of the following may not divulge or make
                  known in any manner any information gained by that person from any return filed with the
                  commission:
                      (i) a tax commissioner;
                      (ii) an agent, clerk, or other officer or employee of the commission; or
                      (iii) a representative, agent, clerk, or other officer or employee of any county, city, or
                  town.
                      (b) Except as provided in Subsection (1)(c), an official charged with the custody of a
                  return filed with the commission is not required to produce the return or evidence of anything
                  contained in the return in any action or proceeding in any court, except:
                      (i) in accordance with judicial order;
                      (ii) on behalf of the commission in any action or proceeding under:
                      (A) this title; or
                      (B) other law under which persons are required to file returns with the commission;
                      (iii) on behalf of the commission in any action or proceeding to which the commission is
                  a party; or
                      (iv) on behalf of any party to any action or proceeding under this title if the report or
                  facts shown by the return are directly involved in the action or proceeding.
                      (c) Notwithstanding Subsection (1)(b), a court may require the production of, and may

- 20 -


                  admit in evidence, any portion of a return or of the facts shown by the return, as are specifically
                  pertinent to the action or proceeding.
                      (2) This section does not prohibit:
                      (a) a person or that person's duly authorized representative from receiving a copy of any
                  return or report filed in connection with that person's own tax;
                      (b) the publication of statistics as long as the statistics are classified to prevent the
                  identification of particular reports or returns; and
                      (c) the inspection by the attorney general or other legal representative of the state of the
                  report or return of any taxpayer:
                      (i) who brings action to set aside or review a tax based on the report or return;
                      (ii) against whom an action or proceeding is contemplated or has been instituted under
                  this title; or
                      (iii) against whom the state has an unsatisfied money judgment.
                      (3) (a) Notwithstanding Subsection (1) and for purposes of administration, the
                  commission may by rule, made in accordance with Title 63, Chapter 46a, Utah Administrative
                  Rulemaking Act, provide for a reciprocal exchange of information with:
                      (i) the United States Internal Revenue Service; or
                      (ii) the revenue service of any other state.
                      (b) Notwithstanding Subsection (1) and for all taxes except individual income tax and
                  corporate franchise tax, the commission may by rule, made in accordance with Title 63, Chapter
                  46a, Utah Administrative Rulemaking Act, share information gathered from returns and other
                  written statements with the federal government, any other state, any of the political subdivisions
                  of another state, or any political subdivision of this state, except as limited by Sections 59-12-209
                  and 59-12-210 , if these political subdivisions or the federal government grant substantially
                  similar privileges to this state.
                      (c) Notwithstanding Subsection (1) and for all taxes except individual income tax and
                  corporate franchise tax, the commission may by rule, in accordance with Title 63, Chapter 46a,
                  Utah Administrative Rulemaking Act, provide for the issuance of information concerning the

- 21 -


                  identity and other information of taxpayers who have failed to file tax returns or to pay any tax
                  due.
                      (d) Notwithstanding Subsection (1), the commission shall provide to the Solid and
                  Hazardous Waste Control Board executive secretary, as defined in Section 19-6-102 , as
                  requested by the executive secretary, any records, returns, or other information filed with the
                  commission under Chapter 13, Motor and Special Fuel Tax Act, or Section 19-6-410.5 regarding
                  the environmental assurance program participation fee.
                      (e) Notwithstanding Subsection (1), at the request of any person the commission shall
                  provide that person sales and purchase volume data reported to the commission on a report,
                  return, or other information filed with the commission under:
                      (i) Chapter 13, Part 2, Motor Fuel; or
                      (ii) Chapter 13, Part 4, Aviation Fuel.
                      (f) Notwithstanding Subsection (1), upon request from a tobacco product manufacturer,
                  as defined in Section 59-22-202 , the commission shall report to the manufacturer:
                      (i) the quantity of cigarettes, as defined in Section 59-22-202 , produced by the
                  manufacturer and reported to the commission for the previous calendar year under Section
                  59-14-407 ; and
                      (ii) the quantity of cigarettes, as defined in Section 59-22-202 , produced by the
                  manufacturer for which a tax refund was granted during the previous calendar year under Section
                  59-14-401 and reported to the commission under Subsection 59-14-401 (1)(a)(v).
                      (g) Notwithstanding Subsection (1), the commission shall notify manufacturers,
                  distributors, wholesalers, and retail dealers of a tobacco product manufacturer that is prohibited
                  from selling cigarettes to consumers within the state under Subsection 59-14-210 (2).
                      (h) Notwithstanding Subsection (1), the commission may:
                      (i) provide to the Division of Consumer Protection within the Department of Commerce
                  and the attorney general data:
                      (A) reported to the commission under Section 59-14-212 ; or
                      (B) related to a violation under Section 59-14-211 ; and

- 22 -


                      (ii) upon request provide to any person data reported to the commission under
                  Subsections 59-14-212 (1)(a) through(c) and Subsection 59-14-212 (1)(g).
                      (i) Notwithstanding Subsection (1), the commission shall, at the request of a committee
                  of the Legislature, Office of the Legislative Fiscal Analyst, or Governor's Office of Planning and
                  Budget, provide to the committee or office the total amount of revenues collected by the
                  commission under Chapter 24, Radioactive Waste Tax Act, for the time period specified by the
                  committee or office.
                      (j) Notwithstanding Subsection (1), the commission shall at the request of the Legislature
                  provide to the Legislature the total amount of sales or uses exempt under Subsection
                  59-12-104 (52) reported to the commission in accordance with Section 59-12-105 .
                      (k) Notwithstanding Subsection (1), the commission shall make the list required by
                  Subsection 59-14-408 (3) available for public inspection.
                      (l) Notwithstanding Subsection (1), the commission shall comply with the reporting
                  requirements of Section 10-1-409 .
                      (4) (a) Reports and returns shall be preserved for at least three years.
                      (b) After the three-year period provided in Subsection (4)(a) the commission may destroy
                  a report or return.
                      (5) (a) Any person who violates this section is guilty of a class A misdemeanor.
                      (b) If the person described in Subsection (5)(a) is an officer or employee of the state, the
                  person shall be dismissed from office and be disqualified from holding public office in this state
                  for a period of five years thereafter.
                      (6) This part does not apply to the property tax.
                      Section 14. Section 59-12-102 is amended to read:
                       59-12-102. Definitions.
                      As used in this chapter:
                      (1) (a) "Admission or user fees" includes season passes.
                      (b) "Admission or user fees" does not include annual membership dues to private
                  organizations.

- 23 -


                      (2) "Area agency on aging" is as defined in Section 62A-3-101.
                      (3) "Authorized carrier" means:
                      (a) in the case of vehicles operated over public highways, the holder of credentials
                  indicating that the vehicle is or will be operated pursuant to both the International Registration
                  Plan and the International Fuel Tax Agreement;
                      (b) in the case of aircraft, the holder of a Federal Aviation Administration operating
                  certificate or air carrier's operating certificate; or
                      (c) in the case of locomotives, freight cars, railroad work equipment, or other rolling
                  stock, the holder of a certificate issued by the United States Surface Transportation Board.
                      (4) (a) For purposes of Subsection 59-12-104(43), "coin-operated amusement device"
                  means:
                      (i) a coin-operated amusement, skill, or ride device;
                      (ii) that is not controlled through vendor-assisted, over-the-counter, sales of tokens; and
                      (iii) includes a music machine, pinball machine, billiard machine, video game machine,
                  arcade machine, and a mechanical or electronic skill game or ride.
                      (b) For purposes of Subsection 59-12-104(43), "coin-operated amusement device" does
                  not mean a coin-operated amusement device possessing a coinage mechanism that:
                      (i) accepts and registers multiple denominations of coins; and
                      (ii) allows the vendor to collect the sales and use tax at the time an amusement device is
                  activated and operated by a person inserting coins into the device.
                      (5) "Commercial use" means the use of gas, electricity, heat, coal, fuel oil, or other fuels
                  that does not constitute industrial use under Subsection (13) or residential use under Subsection
                  [(23)] (24).
                      (6) (a) "Common carrier" means a person engaged in or transacting the business of
                  transporting passengers, freight, merchandise, or other property for hire within this state.
                      (b) (i) "Common carrier" does not include a person who, at the time the person is
                  traveling to or from that person's place of employment, transports a passenger to or from the
                  passenger's place of employment.

- 24 -


                      (ii) For purposes of Subsection (6)(b)(i), in accordance with Title 63, Chapter 46a, Utah
                  Administrative Rulemaking Act, the commission may make rules defining what constitutes a
                  person's place of employment.
                      (7) "Component part" includes:
                      (a) poultry, dairy, and other livestock feed, and their components;
                      (b) baling ties and twine used in the baling of hay and straw;
                      (c) fuel used for providing temperature control of orchards and commercial greenhouses
                  doing a majority of their business in wholesale sales, and for providing power for off-highway
                  type farm machinery; and
                      (d) feed, seeds, and seedlings.
                      (8) "Construction materials" means any tangible personal property that will be converted
                  into real property.
                      (9) (a) "Fundraising sales" means sales:
                      (i) (A) made by a school; or
                      (B) made by a school student;
                      (ii) that are for the purpose of raising funds for the school to purchase equipment,
                  materials, or provide transportation; and
                      (iii) that are part of an officially sanctioned school activity.
                      (b) For purposes of Subsection (9)(a)(iii), "officially sanctioned school activity" means a
                  school activity:
                      (i) that is conducted in accordance with a formal policy adopted by the school or school
                  district governing the authorization and supervision of fundraising activities;
                      (ii) that does not directly or indirectly compensate an individual teacher or other
                  educational personnel by direct payment, commissions, or payment in kind; and
                      (iii) the net or gross revenues from which are deposited in a dedicated account controlled
                  by the school or school district.
                      (10) (a) "Hearing aid" means:
                      (i) an instrument or device having an electronic component that is designed to:

- 25 -


                      (A) (I) improve impaired human hearing; or
                      (II) correct impaired human hearing; and
                      (B) (I) be worn in the human ear; or
                      (II) affixed behind the human ear;
                      (ii) an instrument or device that is surgically implanted into the cochlea; or
                      (iii) a telephone amplifying device.
                      (b) "Hearing aid" does not include:
                      (i) except as provided in Subsection (10)(a)(i)(B) or (10)(a)(ii), an instrument or device
                  having an electronic component that is designed to be worn on the body;
                      (ii) except as provided in Subsection (10)(a)(iii), an assistive listening device or system
                  designed to be used by one individual, including:
                      (A) a personal amplifying system;
                      (B) a personal FM system;
                      (C) a television listening system; or
                      (D) a device or system similar to a device or system described in Subsections
                  (10)(b)(ii)(A) through (C); or
                      (iii) an assistive listening device or system designed to be used by more than one
                  individual, including:
                      (A) a device or system installed in:
                      (I) an auditorium;
                      (II) a church;
                      (III) a conference room;
                      (IV) a synagogue; or
                      (V) a theater; or
                      (B) a device or system similar to a device or system described in Subsections
                  (10)(b)(iii)(A)(I) through (V).
                      (11) (a) "Hearing aid accessory" means a hearing aid:
                      (i) component;

- 26 -


                      (ii) attachment; or
                      (iii) accessory.
                      (b) "Hearing aid accessory" includes:
                      (i) a hearing aid neck loop;
                      (ii) a hearing aid cord;
                      (iii) a hearing aid ear mold;
                      (iv) hearing aid tubing;
                      (v) a hearing aid ear hook; or
                      (vi) a hearing aid remote control.
                      (c) "Hearing aid accessory" does not include:
                      (i) a component, attachment, or accessory designed to be used only with an:
                      (A) instrument or device described in Subsection (10)(b)(i); or
                      (B) assistive listening device or system described in Subsection (10)(b)(ii) or (iii); or
                      (ii) a hearing aid battery.
                      (12) (a) Except as provided in Subsection (12)(c), "home medical equipment or supplies"
                  means equipment or supplies that:
                      (i) a licensed physician prescribes or authorizes in writing as necessary:
                      (A) for the treatment of a medical illness or injury; or
                      (B) to mitigate an impairment resulting from illness or injury;
                      (ii) are used exclusively by the person for whom they are prescribed to serve a medical
                  purpose; and
                      (iii) are listed as eligible for payment under:
                      (A) Title XVIII [of the federal], Social Security Act; or
                      (B) the state plan for medical assistance under Title XIX [of the federal], Social Security
                  Act.
                      (b) "Home medical equipment or supplies" includes parts used in the repairs or
                  renovations of equipment or supplies described in Subsection (12)(a).
                      (c) Notwithstanding Subsection (12)(a), "home medical equipment or supplies" does not

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                  include:
                      (i) equipment or supplies purchased by, for, or on behalf of any:
                      (A) health care facility, as defined in Subsection (12)(d); or
                      (B) one or more of the following for use in a professional practice:
                      (I) a doctor;
                      (II) a nurse; or
                      (III) another health care provider;
                      (ii) eyeglasses, contact lenses, or equipment to correct impaired vision; or
                      (iii) hearing aids or hearing aid accessories.
                      (d) For purposes of Subsection (12)(c)(i)(A), "health care facility" includes:
                      (i) a clinic;
                      (ii) a doctor's office; or
                      (iii) a health care facility as defined in Section 26-21-2.
                      (13) "Industrial use" means the use of natural gas, electricity, heat, coal, fuel oil, or other
                  fuels:
                      (a) in mining or extraction of minerals;
                      (b) in agricultural operations to produce an agricultural product up to the time of harvest
                  or placing the agricultural product into a storage facility, including:
                      (i) commercial greenhouses;
                      (ii) irrigation pumps;
                      (iii) farm machinery;
                      (iv) implements of husbandry as defined in Subsection 41-1a-102(23) that are not
                  registered under Title 41, Chapter 1a, Part 2, Registration; and
                      (v) other farming activities;
                      (c) in manufacturing tangible personal property at an establishment described in SIC
                  Codes 2000 to 3999 of the 1987 Standard Industrial Classification Manual of the federal
                  Executive Office of the President, Office of Management and Budget; or
                      (d) by a scrap recycler if:

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                      (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
                  one or more of the following items into prepared grades of processed materials for use in new
                  products:
                      (A) iron;
                      (B) steel;
                      (C) nonferrous metal;
                      (D) paper;
                      (E) glass;
                      (F) plastic;
                      (G) textile; or
                      (H) rubber; and
                      (ii) the new products under Subsection (13)(d)(i) would otherwise be made with
                  nonrecycled materials.
                      (14) "Manufactured home" means any manufactured home or mobile home as defined in
                  Title 58, Chapter 56, Utah Uniform Building Standards Act.
                      (15) For purposes of Subsection 59-12-104(14), "manufacturing facility" means:
                      (a) an establishment described in SIC Codes 2000 to 3999 of the 1987 Standard
                  Industrial Classification Manual of the federal Executive Office of the President, Office of
                  Management and Budget; or
                      (b) a scrap recycler if:
                      (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
                  one or more of the following items into prepared grades of processed materials for use in new
                  products:
                      (A) iron;
                      (B) steel;
                      (C) nonferrous metal;
                      (D) paper;
                      (E) glass;

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                      (F) plastic;
                      (G) textile; or
                      (H) rubber; and
                      (ii) the new products under Subsection (15)(b)(i) would otherwise be made with
                  nonrecycled materials.
                      (16) (a) "Medicine" means:
                      (i) insulin, syringes, and any medicine prescribed for the treatment of human ailments by
                  a person authorized to prescribe treatments and dispensed on prescription filled by a registered
                  pharmacist, or supplied to patients by a physician, surgeon, or podiatric physician;
                      (ii) any medicine dispensed to patients in a county or other licensed hospital if prescribed
                  for that patient and dispensed by a registered pharmacist or administered under the direction of a
                  physician; and
                      (iii) any oxygen or stoma supplies prescribed by a physician or administered under the
                  direction of a physician or paramedic.
                      (b) "Medicine" does not include:
                      (i) any auditory, prosthetic, ophthalmic, or ocular device or appliance; or
                      (ii) any alcoholic beverage.
                      (17) "Mobile telecommunications service" is as defined in the Mobile
                  Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
                      (18) "Olympic merchandise" means tangible personal property bearing an Olympic
                  designation, emblem, insignia, mark, logo, service mark, symbol, terminology, trademark, or
                  other copyrighted or protected material, including:
                      (a) one or more of the following terms:
                      (i) "Olympic";
                      (ii) "Olympiad"; or
                      (iii) "Citius Altius Fortius";
                      (b) the symbol of the International Olympic Committee, consisting of five interlocking
                  rings;

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                      (c) the emblem of the International Olympic Committee Corporation;
                      (d) a United States Olympic Committee designation, emblem, insignia, mark, logo,
                  service mark, symbol, terminology, trademark, or other copyrighted or protected material;
                      (e) any emblem of the Olympic Winter Games of 2002 that is officially designated by the
                  Salt Lake Organizing Committee of the Olympic Winter Games of 2002; or
                      (f) the mascot of the Olympic Winter Games of 2002.
                      (19) (a) "Other fuels" means products that burn independently to produce heat or energy.
                      (b) "Other fuels" includes oxygen when it is used in the manufacturing of tangible
                  personal property.
                      (20) "Person" includes any individual, firm, partnership, joint venture, association,
                  corporation, estate, trust, business trust, receiver, syndicate, this state, any county, city,
                  municipality, district, or other local governmental entity of the state, or any group or combination
                  acting as a unit.
                      (21) "Place of primary use":
                      (a) for telephone service other than mobile telecommunications service, means the street
                  address representative of where the purchaser's use of the telephone service primarily occurs,
                  which shall be:
                      (i) the residential street address of the purchaser; or
                      (ii) the primary business street address of the purchaser; or
                      (b) for mobile telecommunications service, is as defined in the Mobile
                  Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
                      [(21)] (22) "Purchase price" means the amount paid or charged for tangible personal
                  property or any other taxable transaction under Subsection 59-12-103(1), excluding only cash
                  discounts taken or any excise tax imposed on the purchase price by the federal government.
                      [(22)] (23) "Regularly rented" means:
                      (a) rented to a guest for value three or more times during a calendar year; or
                      (b) advertised or held out to the public as a place that is regularly rented to guests for
                  value.

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                      [(23)] (24) "Residential use" means the use in or around a home, apartment building,
                  sleeping quarters, and similar facilities or accommodations.
                      [(24)] (25) (a) "Retail sale" means any sale within the state of tangible personal property
                  or any other taxable transaction under Subsection 59-12-103(1), other than resale of such
                  property, item, or service by a retailer or wholesaler to a user or consumer.
                      (b) "Retail sale" includes sales by any farmer or other agricultural producer of poultry,
                  eggs, or dairy products to consumers if the sales have an average monthly sales value of $125 or
                  more.
                      (c) "Retail sale" does not include, and no additional sales or use tax shall be assessed
                  against, those transactions where a purchaser of tangible personal property pays applicable sales
                  or use taxes on its initial nonexempt purchases of property and then enters into a sale-leaseback
                  transaction by which title to such property is transferred by the purchaser-lessee to a lessor for
                  consideration, provided:
                      (i) the transaction is intended as a form of financing for the property to the
                  purchaser-lessee; and
                      (ii) pursuant to generally accepted accounting principles, the purchaser-lessee is required
                  to capitalize the subject property for financial reporting purposes, and account for the lease
                  payments as payments made under a financing arrangement.
                      [(25)] (26) (a) "Retailer" means any person engaged in a regularly organized retail
                  business in tangible personal property or any other taxable transaction under Subsection
                  59-12-103(1), and who is selling to the user or consumer and not for resale.
                      (b) "Retailer" includes commission merchants, auctioneers, and any person regularly
                  engaged in the business of selling to users or consumers within the state.
                      (c) "Retailer" does not include farmers, gardeners, stockmen, poultrymen, or other
                  growers or agricultural producers producing and doing business on their own premises, except
                  those who are regularly engaged in the business of buying or selling for a profit.
                      (d) For purposes of this chapter the commission may regard as retailers the following if
                  they determine it is necessary for the efficient administration of this chapter: salesmen,

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                  representatives, peddlers, or canvassers as the agents of the dealers, distributors, supervisors, or
                  employers under whom they operate or from whom they obtain the tangible personal property
                  sold by them, irrespective of whether they are making sales on their own behalf or on behalf of
                  these dealers, distributors, supervisors, or employers, except that:
                      (i) a printer's facility with which a retailer has contracted for printing shall not be
                  considered to be a salesman, representative, peddler, canvasser, or agent of the retailer; and
                      (ii) the ownership of property that is located at the premises of a printer's facility with
                  which the retailer has contracted for printing and that consists of the final printed product,
                  property that becomes a part of the final printed product, or copy from which the printed product
                  is produced, shall not result in the retailer being deemed to have or maintain an office,
                  distribution house, sales house, warehouse, service enterprise, or other place of business, or to
                  maintain a stock of goods, within this state.
                      [(26)] (27) "Sale" means any transfer of title, exchange, or barter, conditional or
                  otherwise, in any manner, of tangible personal property or any other taxable transaction under
                  Subsection 59-12-103(1), for consideration. It includes:
                      (a) installment and credit sales;
                      (b) any closed transaction constituting a sale;
                      (c) any sale of electrical energy, gas, services, or entertainment taxable under this
                  chapter;
                      (d) any transaction if the possession of property is transferred but the seller retains the
                  title as security for the payment of the price; and
                      (e) any transaction under which right to possession, operation, or use of any article of
                  tangible personal property is granted under a lease or contract and the transfer of possession
                  would be taxable if an outright sale were made.
                      [(27)] (28) (a) "Sales relating to schools" means the following sales by, amounts paid to,
                  or amounts charged by a school:
                      (i) sales that are directly related to the school's educational functions or activities
                  including:

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                      (A) the sale of:
                      (I) textbooks;
                      (II) textbook fees;
                      (III) laboratory fees;
                      (IV) laboratory supplies; or
                      (V) safety equipment;
                      (B) the sale of clothing that:
                      (I) a student is specifically required to wear as a condition of participation in a
                  school-related event or school-related activity; and
                      (II) is not readily adaptable to general or continued usage to the extent that it takes the
                  place of ordinary clothing;
                      (C) sales of food if the net or gross revenues generated by the food sales are deposited
                  into a school district fund or school fund dedicated to school meals; or
                      (D) transportation charges for official school activities; or
                      (ii) amounts paid to or amounts charged by a school for admission to a school-related
                  event or school-related activity.
                      (b) "Sales relating to schools" does not include:
                      (i) bookstore sales of items that are not educational materials or supplies;
                      (ii) except as provided in Subsection [(27)] (28)(a)(i)(B), clothing; or
                      (iii) amounts paid to or amounts charged by a school for admission to a school-related
                  event or school-related activity if the amounts paid or charged are passed through to a person:
                      (A) other than a:
                      (I) school;
                      (II) nonprofit organization authorized by a school board or a governing body of a private
                  school to organize and direct a competitive secondary school activity; or
                      (III) nonprofit association authorized by a school board or a governing body of a private
                  school to organize and direct a competitive secondary school activity; and
                      (B) that is required to collect sales and use taxes under this chapter.

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                      (c) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
                  commission may make rules defining the term "passed through."
                      [(28)] (29) For purposes of this section and Section 59-12-104, "school" means:
                      (a) an elementary school or a secondary school that:
                      (i) is a:
                      (A) public school; or
                      (B) private school; and
                      (ii) provides instruction for one or more grades kindergarten through 12; or
                      (b) a public school district.
                      [(29)] (30) (a) "Semiconductor fabricating or processing materials" means tangible
                  personal property:
                      (i) used primarily in the process of:
                      (A) (I) manufacturing a semiconductor; or
                      (II) fabricating a semiconductor; or
                      (B) maintaining an environment suitable for a semiconductor; or
                      (ii) consumed primarily in the process of:
                      (A) (I) manufacturing a semiconductor; or
                      (II) fabricating a semiconductor; or
                      (B) maintaining an environment suitable for a semiconductor.
                      (b) "Semiconductor fabricating or processing materials" includes:
                      (i) parts used in the repairs or renovations of tangible personal property described in
                  Subsection [(29)] (30)(a); or
                      (ii) a chemical, catalyst, or other material used to:
                      (A) produce or induce in a semiconductor a:
                      (I) chemical change; or
                      (II) physical change;
                      (B) remove impurities from a semiconductor; or
                      (C) improve the marketable condition of a semiconductor.

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                      [(30)] (31) "Senior citizen center" means a facility having the primary purpose of
                  providing services to the aged as defined in Section 62A-3-101.
                      [(31)] (32) "State" means the state of Utah, its departments, and agencies.
                      [(32)] (33) "Storage" means any keeping or retention of tangible personal property or any
                  other taxable transaction under Subsection 59-12-103(1), in this state for any purpose except sale
                  in the regular course of business.
                      [(33)] (34) (a) "Tangible personal property" means:
                      (i) all goods, wares, merchandise, produce, and commodities;
                      (ii) all tangible or corporeal things and substances which are dealt in or capable of being
                  possessed or exchanged;
                      (iii) water in bottles, tanks, or other containers; and
                      (iv) all other physically existing articles or things, including property severed from real
                  estate.
                      (b) "Tangible personal property" does not include:
                      (i) real estate or any interest or improvements in real estate;
                      (ii) bank accounts, stocks, bonds, mortgages, notes, and other evidence of debt;
                      (iii) insurance certificates or policies;
                      (iv) personal or governmental licenses;
                      (v) water in pipes, conduits, ditches, or reservoirs;
                      (vi) currency and coinage constituting legal tender of the United States or of a foreign
                  nation; and
                      (vii) all gold, silver, or platinum ingots, bars, medallions, or decorative coins, not
                  constituting legal tender of any nation, with a gold, silver, or platinum content of not less than
                  80%.
                      [(34)] (35) (a) [For purposes of Subsection (35) and Section 59-12-103, "telephone]
                  "Telephone service" means a two-way transmission:
                      (i) by:
                      (A) wire;

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                      (B) radio;
                      (C) lightwave; or
                      (D) other electromagnetic means; and
                      (ii) of one or more of the following:
                      (A) a sign;
                      (B) a signal;
                      (C) writing;
                      (D) an image;
                      (E) sound;
                      (F) a message;
                      (G) data; or
                      (H) other information of any nature.
                      (b) "Telephone service" includes:
                      (i) cellular telephone service;
                      (ii) private communications service; or
                      (iii) automated digital telephone answering service.
                      (c) "Telephone service" does not include a service or a transaction that a state or a
                  political subdivision of a state is prohibited from taxing as of July 1, 2001, under the Internet Tax
                  Freedom Act, Pub. L. No. 105-277.
                      (36) Notwithstanding where a call is billed or paid, "telephone service address" means:
                      (a) if the location described in this Subsection (36)(a) is known, the location of the
                  telephone service equipment:
                      (i) to which a call is charged; and
                      (ii) from which the call originates or terminates;
                      (b) if the location described in Subsection (36)(a) is not known but the location described
                  in this Subsection (36)(b) is known, the location of the origination point of the signal of the
                  telephone service first identified by:
                      (i) the telecommunications system of the seller; or

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                      (ii) if the system used to transport the signal is not that of the seller, information received
                  by the seller from its service provider; or
                      (c) if the locations described in Subsection (36)(a) or (b) are not known, the location of a
                  purchaser's primary place of use.
                      [(35)] (37) (a) "Telephone service provider" means a person that:
                      (i) owns, controls, operates, or manages a telephone service; [and] or
                      (ii) engages in an activity described in Subsection [(35)] (37)(a)(i) for the shared use with
                  or resale to any person of the telephone service.
                      (b) A person described in Subsection [(35)] (37)(a) is a telephone service provider
                  whether or not the Public Service Commission of Utah regulates:
                      (i) that person; or
                      (ii) the telephone service that the person owns, controls, operates, or manages.
                      [(36)] (38) (a) "Use" means the exercise of any right or power over tangible personal
                  property under Subsection 59-12-103(1), incident to the ownership or the leasing of that
                  property, item, or service.
                      (b) "Use" does not include the sale, display, demonstration, or trial of that property in the
                  regular course of business and held for resale.
                      [(37)] (39) "Vehicle" means any aircraft, as defined in Section 72-10-102; any vehicle, as
                  defined in Section 41-1a-102; any off-highway vehicle, as defined in Section 41-22-2; and any
                  vessel, as defined in Section 41-1a-102; that is required to be titled, registered, or both.
                  "Vehicle," for purposes of Subsection 59-12-104(36) only, also includes any locomotive, freight
                  car, railroad work equipment, or other railroad rolling stock.
                      [(38)] (40) "Vehicle dealer" means a person engaged in the business of buying, selling, or
                  exchanging vehicles as defined in Subsection [(37)] (39).
                      [(39)] (41) (a) "Vendor" means any person receiving any payment or consideration upon
                  a sale of tangible personal property or any other taxable transaction under Subsection
                  59-12-103(1), or to whom the payment or consideration is payable.
                      (b) "Vendor" does not mean a printer's facility described in Subsection [(25)] (26)(d).

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                      Section 15. Section 59-12-207 is amended to read:
                       59-12-207. Report of tax collections -- Point of sale when retailer has no permanent
                  place of business or more than one place of business is determined by rule of commission --
                  Public utilities -- Telephone telecommunications service.
                      (1) Except as provided in Subsection (5), any sales and use taxes collected under this part
                  shall be reported to the commission on forms that accurately identify the location where the
                  transaction resulting in a tax under this chapter is consummated.
                      (2) Except as provided in Subsection (5), for purposes of this part, the location of where
                  a transaction is consummated:
                      (a) is determined under rules of the commission if:
                      (i) a retailer has no permanent place of business in the state; or
                      (ii) has more than one place of business; and
                      (b) is where a purchaser receives the following products or services sold by a public
                  utility, as defined in Section 54-2-1 , to that purchaser:
                      (i) gas; or
                      (ii) electricity[; or].
                      [(iii) telephone services.]
                      (3) The form required under Subsection (1) shall:
                      (a) accompany the sales and use tax returns required under this chapter; and
                      (b) identify the location of any transaction consummated during the return filing period.
                      (4) Subject to Subsection (5) and in accordance with Title 63, Chapter 46a, Utah
                  Administrative Rulemaking Act, the commission shall make rules regarding the determination of
                  the location of where under Subsection (2)(a) a transaction is consummated.
                      (5) Notwithstanding Subsections (1) and (2)[, mobile telecommunications service is
                  subject to the sourcing rules provided in the Mobile Telecommunications Sourcing Act, 4 U.S.C.
                  Sec. 116 et seq.] and except as provided in Subsection (6), the location of a transaction for
                  telephone service taxed under this part shall be the county, city, or town within which is located
                  the nine-digit zip code that is assigned by the United States Postal Service:

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                      (a) for telephone service other than mobile telecommunications service, to the telephone
                  service address for the transaction; and
                      (b) for mobile telecommunications service, to the place of primary use for the
                  transaction.
                      (6) (a) For purposes of this Subsection (6):
                      (i) "Combined tax rate" means the sum of the tax rates imposed on a transaction
                  described in Subsection 59-12-103 (1) under:
                      (A) Subsection 59-12-103 (2)(a)(i);
                      (B) Section 59-12-204 ;
                      (C) Section 59-12-205 ;
                      (D) Section 59-12-401 ;
                      (E) Section 59-12-402 ;
                      (F) Section 59-12-501 ;
                      (G) Section 59-12-502 ;
                      (H) Section 59-12-703 ;
                      (I) Section 59-12-802 ;
                      (J) Section 59-12-804 ;
                      (K) Section 59-12-1001 ;
                      (L) Section 59-12-1102 ;
                      (M) Section 59-12-1302 ; and
                      (N) Section 59-12-1402 .
                      (ii) "Lowest combined tax rate" for a shared zip code means the lowest combined tax rate
                  of the counties, cities, or towns within which the shared zip code is located.
                      (iii) "Shared zip code" means a nine-digit zip code assigned by the United States Postal
                  Service that is located within two or more counties, cities, or towns.
                      (b) Notwithstanding Subsection (5), if the nine-digit zip code that is assigned to a
                  telephone service address or a place of primary use is a shared zip code, the location of a
                  transaction for telephone service shall be:

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                      (i) if there is only one county, city, or town that imposes the lowest combined tax rate for
                  the shared zip code, the county, city, or town that imposes the lowest combined tax rate; or
                      (ii) if two or more counties, cities, or towns impose the lowest combined tax rate for the
                  shared zip code, the county, city, or town that:
                      (A) imposes the lowest combined tax rate for the shared zip code; and
                      (B) of the counties, cities, or towns that impose the lowest combined tax rate, has located
                  within the county, city, or town the largest number of street addresses within the shared zip code.
                      (c) A telephone service provider shall collect sales and use taxes imposed under this
                  chapter at the combined tax rate imposed within the county, city, or town in which the
                  transaction for telephone service is located under Subsection (6)(b) notwithstanding the
                  following:
                      (i) Section 59-12-204 ;
                      (ii) Section 59-12-205;
                      (iii) Section 59-12-401 ;
                      (iv) Section 59-12-402 ;
                      (v) Section 59-12-501 ;
                      (vi) Section 59-12-502 ;
                      (vii) Section 59-12-703 ;
                      (viii) Section 59-12-802 ;
                      (ix) Section 59-12-804 ;
                      (x) Section 59-12-1001 ;
                      (xi) Section 59-12-1102 ;
                      (xii) Section 59-12-1302 ; and
                      (xiii) Section 59-12-1402 .
                      Section 16. Section 69-2-5 is amended to read:
                       69-2-5. Funding for 911 emergency telephone service.
                      (1) In providing funding of 911 emergency telephone service, any public agency
                  establishing a 911 emergency telephone service may:

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                      (a) seek assistance from the federal or state government, to the extent constitutionally
                  permissible, in the form of loans, advances, grants, subsidies, and otherwise, directly or
                  indirectly;
                      (b) seek funds appropriated by local governmental taxing authorities for the funding of
                  public safety agencies; and
                      (c) seek gifts, donations, or grants from individuals, corporations, or other private
                  entities.
                      (2) For purposes of providing funding of 911 emergency telephone service, special
                  service districts may raise funds as provided in Section 17A-2-1322 and may borrow money and
                  incur indebtedness as provided in Section 17A-2-1316 .
                      (3) (a) Except as provided in Subsection (3)(b)[,] and subject to [Subsection (3)(f), the
                  governing authority of any public agency providing] the other provisions of this Subsection (3) a
                  county, city, or town within which 911 emergency telephone service is provided may levy
                  monthly an emergency services telephone charge on:
                      (i) each local exchange service switched access line within the boundaries of the county,
                  city, or town; and
                      (ii) each revenue producing radio communications access line with a billing address
                  within the boundaries of the [area served by the public agency] county, city, or town.
                      (b) Notwithstanding Subsection (3)(a), an access [lines] line provided for public coin
                  telephone service [are] is exempt from emergency telephone charges.
                      (c) The amount of the charge levied under this section may not exceed:
                      (i) 53 cents per month for each local exchange service switched access line; and
                      (ii) 53 cents per month for each radio communications access line.
                      (d) (i) For purposes of this Subsection (3)(d) the following terms shall be defined as
                  provided in Section 59-12-102 :
                      (A) "mobile telecommunications service";
                      (B) "primary place of use";
                      (C) "service address"; and

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                      (D) "telephone service."
                      (ii) An access line described in Subsection (3)(a) is considered to be within the
                  boundaries of a county, city, or town if the telephone services provided over the access line are
                  located within the county, city, or town:
                      (A) for purposes of sales and use taxes under Title 59, Chapter 12, Sales and Use Tax
                  Act; and
                      (B) determined in accordance with Section 59-12-207 .
                      (iii) The rate imposed on an access line under this section shall be determined in
                  accordance with Subsection (3)(d)(iv) if the location of an access line described in Subsection
                  (3)(a) is determined under Subsection (3)(d)(ii) to be a county, city, or town other than county,
                  city, or town in which is located:
                      (A) for telephone service other than mobile telecommunications service, the purchaser's
                  service address; or
                      (B) for mobile telecommunications service, the purchaser's primary place of use.
                      (iv) The rate imposed on an access line under this section shall be the lower of:
                      (A) the rate imposed by the county, city, or town in which the access line is located under
                  Subsection (3)(d)(ii); or
                      (B) the rate imposed by the county, city, or town in which it is located:
                      (I) for telephone service other than mobile telecommunications service, the purchaser's
                  service address; or
                      (II) for mobile telecommunications service, the purchaser's primary place of use.
                      [(d)] (e) (i) [Notification of intent to levy the charge shall be given to] A county, city, or
                  town shall notify the Public Service Commission of the intent to levy the charge under this
                  Subsection (3) at least 30 days prior to the effective date of the charge being levied.
                      (ii) For purposes of this Subsection (3)(e):
                      (A) "Annexation" means an annexation to:
                      (I) a city or town under Title 10, Chapter 2, Part 4, Annexation; or
                      (II) a county under Title 17, Chapter 2, Annexation to County.

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                      (B) "Annexing area" means an area that is annexed into a county, city, or town.
                      (iii) (A) If, on or after July 1, 2003, a county, city, or town enacts or repeals a charge
                  under this section, the enactment or repeal shall take effect:
                      (I) on the first day of a calendar quarter; and
                      (II) after a 75-day period beginning on the date the State Tax Commission receives notice
                  meeting the requirements of Subsection (3)(e)(iii)(B) from the county, city, or town.
                      (B) The notice described in Subsection (3)(e)(iii)(A) shall state:
                      (I) that the county, city, or town will enact or repeal a charge under this section;
                      (II) the statutory authority for the charge described in Subsection (3)(e)(iii)(B)(I); and
                      (III) the effective date of the charge described in Subsection (3)(e)(iii)(B)(I).
                      (iv) (A) If, for an annexation that occurs on or after July 1, 2003, the annexation will
                  result in a change in a charge imposed under this section being imposed in an annexing area, the
                  change shall take effect:
                      (I) on the first day of a calendar quarter; and
                      (II) after a 75-day period beginning on the date the State Tax Commission receives notice
                  meeting the requirements of Subsection (3)(e)(iv)(B) from the county, city, or town that annexes
                  the annexing area.
                      (B) The notice described in Subsection (3)(e)(iv)(A) shall state:
                      (I) that the annexation described in Subsection (3)(e)(iv)(A) will result in a change in the
                  charge being imposed under this section for the annexing area;
                      (II) the statutory authority for the charge described in Subsection (3)(e)(iv)(B)(I); and
                      (III) the effective date of the charge described in Subsection (3)(e)(iv)(B)(I).
                      [(e)] (f) Subject to Subsection (3)[(f)] (g), an emergency services telephone charge levied
                  under this section shall:
                      (i) be billed and collected by the [corporation,] person[, or entity] that provides the:
                      (A) local exchange service switched access line services; or
                      (B) radio communications access line services; and
                      (ii) remitted to the [public agency providing 911 emergency telephone service in the

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                  billed customer location area as directed by the public agency] State Tax Commission.
                      [(f)] (g) An emergency services telephone charge on a mobile telecommunications
                  service may be levied, billed, and collected only to the extent permitted by the Mobile
                  Telecommunications Sourcing Act, 4 U.S.C. Sec. 116 et seq.
                      (h) The State Tax Commission shall:
                      (i) collect, enforce, and administer the charge imposed under this Subsection (3) pursuant
                  to the same procedures used in the administration, collection, and enforcement of the state sales
                  and use taxes under:
                      (A) Title 59, Chapter 1, General Taxation Policies; and
                      (B) Title 59, Chapter 12, Part 1, Tax Collection, except for Sections 59-12-104 ,
                  59-12-104.1 , and 59-12-104.2 ;
                      (ii) transmit monies collected under this Subsection (3):
                      (A) monthly; and
                      (B) by electronic funds transfer by the commission to the county, city, or town that
                  imposes the charge; and

                      (iii) charge the county, city, or town for the State Tax Commission's services under this
                  Subsection (3) in an amount:
                      (A) sufficient to reimburse the State Tax Commission for the cost to the State Tax
                  Commission in rendering the services; and
                      (B) that may not exceed an amount equal to 1.5% of the charges imposed under this
                  Subsection (3).
                      (4) (a) Any money received by [the] a public agency for the provision of 911 emergency
                  telephone service shall be deposited in a special emergency telephone service fund.
                      (b) (i) The money in the emergency telephone service fund described in Subsection (4)(a)
                  shall be expended by the public agency to pay the costs of establishing, installing, maintaining,
                  and operating a 911 emergency telephone system or integrating a 911 system into an established
                  public safety dispatch center, including contracting with the providers of local exchange service,
                  radio communications service, and vendors of appropriate terminal equipment as necessary to

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                  implement the 911 emergency telephone service.
                      (ii) Revenues derived for the funding of 911 emergency telephone service may only be
                  used for that portion of costs related to the operation of the 911 emergency telephone system
                  when such a system is integrated with any public safety dispatch system.
                      Section 17. Section 69-2-5.5 is amended to read:
                       69-2-5.5. Emergency services telephone charge to fund the Poison Control Center.
                      (1) Subject to Subsection (13), there is imposed an emergency services telephone charge
                  of 7 cents per month on each local exchange service switched access line and each revenue
                  producing radio communications access line that is subject to an emergency services telephone
                  charge levied by a [public agency] county, city, or town under Section 69-2-5 .
                      (2) The emergency services telephone charge imposed under this section shall be:
                      (a) subject to Subsection (13), billed and collected by the [corporation,] person[, or
                  entity] that provides:
                      (i) local exchange service switched access line services; or
                      (ii) radio communications access line services [and];
                      (b) remitted [monthly] to the State Tax Commission at the same time as the person
                  remits to the State Tax Commission monies collected by the person under Title 59, Chapter 12,
                  Sales and Use Tax Act; and
                      [(b)] (c) deposited into the General Fund as dedicated credits to pay for:
                      (i) costs of establishing, installing, maintaining, and operating the University of Utah
                  Poison Control Center; and
                      (ii) expenses of the State Tax Commission to administer and enforce the collection of the
                  emergency services telephone charges.
                      (3) Funds for the University of Utah Poison Control Center program are nonlapsing.
                      (4) Emergency services telephone charges remitted to the State Tax Commission
                  pursuant to Subsection (2) shall be accompanied by the form prescribed by the commission.
                      (5) The State Tax Commission may make rules to administer and enforce the collection
                  of emergency services telephone charges imposed under this section.

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                      (6) A provider of local exchange service switched access line services or radio
                  communications access line services who fails to comply with this section is subject to penalties
                  and interest as provided in Sections 59-1-401 and 59-1-402 .
                      (7) (a) Except as provided in Subsections (8) through (11), and subject to Subsection
                  (13), the State Tax Commission shall assess a charge imposed under this section within three
                  years after a provider of local exchange service switched access line services or radio
                  communications access line services files a return.
                      (b) Except as provided in Subsections (8) through (11), if the commission does not
                  assess a charge imposed under this section within the three-year period provided in Subsection
                  (7)(a), the commission may not commence a proceeding to collect the charge.
                      (8) Notwithstanding Subsection (7), and subject to Subsection (13), the State Tax
                  Commission may assess a charge at any time if a provider of local exchange service switched
                  access line services or radio communications access line services:
                      (a) files a false or fraudulent return with intent to evade; or
                      (b) does not file a return.
                      (9) Notwithstanding Subsection (7), beginning on July 1, 1998, the State Tax
                  Commission may extend the period to make an assessment or commence a proceeding to collect
                  the charge imposed under this section if:
                      (a) the three-year period under Subsection (7) has not expired; and
                      (b) the commission and the provider of local exchange service switched access line
                  services or radio communications access line services sign a written agreement:
                      (i) authorizing the extension; and
                      (ii) providing for the length of the extension.
                      (10) If the State Tax Commission delays an audit at the request of a provider of local
                  exchange service switched access line services or radio communications access line services, the
                  commission may make an assessment as provided in Subsection (11) if:
                      (a) the provider of local exchange service switched access line services or radio
                  communications access line services subsequently refuses to agree to an extension request by the

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                  commission; and
                      (b) the three-year period under Subsection (7) expires before the commission completes
                  the audit.
                      (11) An assessment under Subsection (10) shall be:
                      (a) for the time period for which the State Tax Commission could not make an
                  assessment because of the expiration of the three-year period; and
                      (b) in an amount equal to the difference between:
                      (i) the commission's estimate of the amount of the charge the provider of local exchange
                  service switched access line services or radio communications access line services would have
                  been assessed for the time period described in Subsection (11)(a); and
                      (ii) the amount of the charge the provider of local exchange service switched access line
                  services or radio communications access line services actually paid for the time period described
                  in Subsection (11)(a).
                      (12) (a) Except as provided in Subsection (12)(b), the State Tax Commission may not
                  make a credit or refund unless the provider of local exchange service switched access line
                  services or radio communications access line services files a claim with the commission within
                  three years of the date of overpayment.
                      (b) Notwithstanding Subsection (12)(a), beginning on July 1, 1998, the commission shall
                  extend the period for a provider of local exchange service switched access line services or radio
                  communications access line services to file a claim under Subsection (12)(a) if:
                      (i) the three-year period under Subsection (12)(a) has not expired; and
                      (ii) the commission and the provider of local exchange service switched access line
                  services or radio communications access line services sign a written agreement:
                      (A) authorizing the extension; and
                      (B) providing for the length of the extension.
                      (13) An emergency services telephone charge under this section on a mobile
                  telecommunications service may be imposed, billed, and collected only to the extent permitted by
                  the Mobile Telecommunications Sourcing Act, 4 U.S.C. Sec. 116 et seq.

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                      (14) (a) (i) For purposes of this Subsection (14) and except as provided in Subsection
                  (14)(a)(ii), "bad debt" is as defined in Section 166, Internal Revenue Code.
                      (ii) "Bad debt" does not include:
                      (A) amounts not subject to the charge imposed under this section that are included in the
                  purchase price for:
                      (I) local exchange service switched access line service; or
                      (II) radio communications access line service;
                      (B) financing charges or interest;
                      (C) the charge imposed under this section on:
                      (I) a local exchange service switched access line; or
                      (II) a radio communications access line;
                      (D) uncollectible amounts on tangible personal property that remains in the possession of
                  the vendor until the full purchase price is paid;
                      (E) expenses incurred in attempting to collect any debt; and
                      (F) amounts uncollected on repossessed property.
                      (b) The State Tax Commission shall allow a credit for amounts remitted to the State Tax
                  Commission under this section that constitute bad debt.
                      Section 18. Section 72-7-102 is amended to read:
                       72-7-102. Excavations, structures, or objects prohibited within right-of-way except
                  in accordance with law -- Permit and fee requirements -- Rulemaking -- Penalty for
                  violation.
                      (1) As used in this section, "management costs" means the reasonable, direct, and actual
                  costs a highway authority incurs in exercising authority over the highways under its jurisdiction.
                      (2) Except as provided in Subsection (3) and Section 54-4-15 , a person may not:
                      (a) dig or excavate, within the right-of-way of any state highway, county road, or city
                  street; or
                      (b) place, construct, or maintain any approach road, driveway, pole, pipeline, conduit,
                  sewer, ditch, culvert, billboard, advertising sign, or any other structure or object of any kind or

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                  character within the right-of-way.
                      (3) (a) A highway authority having jurisdiction over the right-of-way may allow
                  excavating, installation of utilities and other facilities or access under rules made by the highway
                  authority and in compliance with federal, state, and local law as applicable.
                      (b) (i) The rules may require a permit for any excavation or installation and may require a
                  surety bond or other security.
                      (ii) The application for a permit for excavation or installation on a state highway shall be
                  accompanied by a fee established under Subsection (4)(f).
                      (iii) The permit may be revoked and the surety bond or other security may be forfeited
                  for cause.
                      (4) (a) Except as provided in Section 72-7-108 with respect to the department concerning
                  the interstate highway system, a highway authority may require compensation from a utility
                  service provider for access to the right-of-way of a highway only as provided in this section.
                      (b) A highway authority may recover from a utility service provider, only those
                  management costs caused by the utility service provider's activities in the right-of-way of a
                  highway under the jurisdiction of the highway authority.
                      (c) (i) A fee or other compensation under this Subsection (4) shall be imposed on a
                  competitively neutral basis.
                      (ii) If a highway authority's management costs cannot be attributed to only one entity, the
                  management costs shall be allocated among all privately owned and government agencies using
                  the highway right-of-way for utility service purposes, including the highway authority itself. The
                  allocation shall reflect proportionately the management costs incurred by the highway authority
                  as a result of the various utility uses of the highway.
                      (d) A highway authority may not use the compensation authority granted under this
                  Subsection (4) as a basis for generating revenue for the highway authority that is in addition to its
                  management costs.
                      (e) (i) A utility service provider that is assessed management costs or a franchise fee by a
                  highway authority is entitled to recover those management costs.

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                      (ii) If the highway authority that assesses the management costs or franchise fees is a
                  political subdivision of the state and the utility service provider serves customers within the
                  boundaries of that highway authority, the management costs may be recovered from those
                  customers.
                      (f) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
                  department shall adopt a schedule of fees to be assessed for management costs incurred in
                  connection with issuing and administering a permit on a state highway under this section.
                      (g) In addition to the requirements of this Subsection (4), a telecommunications tax or
                  fee imposed by a municipality on a telecommunications provider, as defined in Section 10-1-402 ,
                  is subject to Section 10-1-406 .
                      (5) Permit fees collected by the department under this section shall be deposited with the
                  state treasurer and credited to the Transportation Fund.
                      (6) Nothing in this section shall affect the authority of a municipality under:
                      (a) Section 10-1-203 ;
                      (b) Section 11-26-1 [and];
                      (c) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act[.]; or
                      (d) Title 10, Chapter 1, Part 4, Municipal Telecommunications License Tax Act.
                      (7) A person who violates the provisions of Subsection (2) is guilty of a class B
                  misdemeanor.
                      Section 19. Section 72-7-108 is amended to read:
                       72-7-108. Longitudinal telecommunication access in the interstate highway system
                  -- Definitions -- Agreements -- Compensation -- Restrictions -- Rulemaking.
                      (1) As used in this section:
                      (a) "Longitudinal access" means access to or use of any part of a right-of-way of a
                  highway on the interstate system that extends generally parallel to the right-of-way for a total of
                  30 or more linear meters.
                      (b) "Statewide telecommunications purposes" means the further development of the
                  statewide network that meets the telecommunications needs of state agencies and enhances the

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                  learning purposes of higher and public education.
                      (c) "Telecommunication facility" means any telecommunication cable, line, fiber, wire,
                  conduit, innerduct, access manhole, handhole, tower, hut, pedestal, pole, box, transmitting
                  equipment, receiving equipment, power equipment, or other equipment, system, and device used
                  to transmit, receive, produce, or distribute via wireless, wireline, electronic, or optical signal for
                  communication purposes.
                      (2) (a) Except as provided in Subsection (4), the department may allow a
                  telecommunication facility provider longitudinal access to the right-of-way of a highway on the
                  interstate system for the installation, operation, and maintenance of a telecommunication facility.
                      (b) The department shall enter into an agreement with a telecommunication facility
                  provider and issue a permit before granting it any longitudinal access under this section.
                      (i) Except as specifically provided by the agreement, a property interest in a right-of-way
                  may not be granted under the provisions of this section.
                      (ii) An agreement entered into by the department under this section shall:
                      (A) specify the terms and conditions for the renegotiation of the agreement;
                      (B) specify maintenance responsibilities for each telecommunication facility;
                      (C) be nonexclusive; and
                      (D) be limited to a maximum term of 30 years.
                      (3) (a) The department shall require compensation from a telecommunication facility
                  provider under this section for longitudinal access to the right-of-way of a highway on the
                  interstate system.
                      (b) The compensation charged shall be:
                      (i) fair and reasonable;
                      (ii) competitively neutral;
                      (iii) nondiscriminatory;
                      (iv) open to public inspection;
                      (v) established to promote access by multiple telecommunication facility providers;
                      (vi) established for zones of the state, with zones determined based upon factors that

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                  include population density, distance, numbers of telecommunication subscribers, and the impact
                  upon private right-of-way users;
                      (vii) established to encourage the deployment of digital infrastructure within the state;
                      (viii) set after the department conducts a market analysis to determine the fair and
                  reasonable values of the right-of-way based upon adjacent property values;
                      (ix) a lump sum payment or annual installment, at the option of the telecommunications
                  facility provider; and
                      (x) set in accordance with Subsection (3)(f).
                      (c) (i) The compensation charged may be cash, in-kind compensation, or a combination
                  of cash and in-kind compensation.
                      (ii) In-kind compensation requires the agreement of both the telecommunication facility
                  provider and the department.
                      (iii) The department shall, in consultation with the Telecommunications Advisory
                  Council created in Section 72-7-109 , determine the present value of any in-kind compensation
                  based upon the incremental cost to the telecommunication facility provider.
                      (iv) The value of in-kind compensation or a combination of cash and in-kind
                  compensation shall be equal to or greater than the amount of cash compensation that would be
                  charged if the compensation is cash only.
                      (d) (i) The department shall provide for the proportionate sharing of costs among the
                  department and telecommunications providers for joint trenching or trench sharing based on the
                  amount of conduit innerduct space that is authorized in the agreement for the trench.
                      (ii) If two or more telecommunications facility providers are required to share a single
                  trench, each telecommunications facility provider in the trench shall share the cost and benefits
                  of the trench in accordance with Subsection (3)(d)(i) on a fair, reasonable, competitively neutral,
                  and nondiscriminatory basis.
                      (e) The market analysis under Subsection (3)(b)(viii) shall be conducted at least every
                  five years and any adjustments warranted shall apply only to agreements entered after the date of
                  the new market analysis.

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                      (f) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
                  department shall establish a schedule of rates of compensation for any longitudinal access
                  granted under this section.
                      (4) The department may not grant any longitudinal access under this section that results
                  in a significant compromise of the safe, efficient, and convenient use of the interstate system for
                  the traveling public.
                      (5) The department may not pay any cost of relocation of a telecommunication facility
                  granted longitudinal access to the right-of-way of a highway on the interstate system under this
                  section.
                      (6) (a) Monetary compensation collected by the department in accordance with this
                  section shall be deposited with the state treasurer and credited to the Transportation Fund.
                      (b) Any telecommunications capacity acquired as in-kind compensation shall be used:
                      (i) exclusively for statewide telecommunications purposes and may not be sold or leased
                  in competition with telecommunication or Internet service providers; and
                      (ii) as determined by the department after consultation with the Telecommunications
                  Advisory Council created in Section 72-7-109 .
                      (7) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
                  department shall make rules:
                      (a) governing the installation, operation, and maintenance of a telecommunication
                  facility granted longitudinal access under this section;
                      (b) specifying the procedures for establishing an agreement for longitudinal access for a
                  telecommunication facility provider;
                      (c) providing for the relocation or removal of a telecommunication facility for:
                      (i) needed changes to a highway on the interstate system;
                      (ii) expiration of an agreement; or
                      (iii) a breach of an agreement; and
                      (d) providing an opportunity for all interested providers to apply for access within open
                  right-of-way segments.

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                      (8) (a) Except for a right-of-way of a highway on the interstate system, nothing in this
                  section shall be construed to allow a highway authority to require compensation from a
                  telecommunication facility provider for longitudinal access to the right-of-way of a highway
                  under the highway authority's jurisdiction.
                      (b) Nothing in this section shall affect the authority of a municipality under:
                      (i) Section 10-1-203 ;
                      (ii) Section 11-26-1 [and];
                      (iii) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act[.]; or
                      (iv) Title 10, Chapter 1, Part 4, Municipal Telecommunications License Tax Act.
                      (9) Compensation paid to the department under Subsection (3) may not be used by any
                  person as evidence of the market or other value of the access for any other purpose, including
                  condemnation proceedings, other litigation, or the application of rates of taxation or the
                  establishment of franchise fees relating to longitudinal access rights.
                      Section 20. Repealer.
                      This act repeals:
                      Section 11-26-3, Local charge on certain revenues of public utility or telephone
                  service suppliers -- Notice and hearing requirements.
                      Section 21. Effective date.
                      This act takes effect on July 1, 2003 except the following take effect on July 1, 2004:
                      (1) the amendments in this act to:
                      (a) Section 10-1-203 ;
                      (b) Section 11-26-1 ;
                      (c) Section 72-7-102 ;
                      (d) Section 72-7-108 ; and
                      (2) the repeal of Section 11-26-3 .

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