First Substitute S.B. 1002

Senator Scott K. Jenkins proposes the following substitute bill:

1 FUNDING FOR TOURISM
2 2005 FIRST SPECIAL SESSION
3 STATE OF UTAH
4 Sponsor: Scott K. Jenkins
5
6 LONG TITLE
7 General Description:
8 This bill modifies provisions relating to tourism advertising, marketing, and branding.
9 Highlighted Provisions:
10 This bill:
11 . modifies the duties, membership, and powers of the Board of Tourism
12 Development;
13 . establishes a Tourism Marketing Performance Account within the General Fund to
14 provide a set-aside of a percentage of the increase in tourism-generated tax revenue
15 as a funding source for increased tourism promotion;
16 . provides for the creation and funding of a Cooperative Program with cities,
17 counties, and nonprofit destination marketing organizations to advertise and
18 promote tourism; and
19 . makes certain technical changes.
20 Monies Appropriated in this Bill:
21 This bill appropriates:
22 . $18,000,000 from the General Fund for fiscal year 2005-06 only, to the Tourism
23 Marketing Performance Account; and
24 . $10,000,000 from the Tourism Marketing Performance Account for fiscal year
25 2005-06 only, to the Governor's Office of Economic Development.

26 Other Special Clauses:
27 This bill takes effect on July 1, 2005.
28 Utah Code Sections Affected:
29 AMENDS:
30 63-38f-1406 (Effective 07/01/05), as renumbered and amended by Chapter 148, Laws
31 of Utah 2005
32 63-38f-1407 (Effective 07/01/05), as renumbered and amended by Chapter 148, Laws
33 of Utah 2005
34 63-38f-1408 (Effective 07/01/05), as renumbered and amended by Chapter 148, Laws
35 of Utah 2005
36 63-38f-1409 (Effective 07/01/05), as renumbered and amended by Chapter 148, Laws
37 of Utah 2005
38 ENACTS:
39 63-38f-1411, Utah Code Annotated 1953
40 REPEALS:
41 63-38f-1401 (Effective 07/01/05), as renumbered and amended by Chapter 148, Laws
42 of Utah 2005
43 63-38f-1402 (Effective 07/01/05), as renumbered and amended by Chapter 148, Laws
44 of Utah 2005
45 63-38f-1403 (Effective 07/01/05), as renumbered and amended by Chapter 148, Laws
46 of Utah 2005
47 63-38f-1404 (Effective 07/01/05), as renumbered and amended by Chapter 148, Laws
48 of Utah 2005
49 63-38f-1405 (Effective 07/01/05), as renumbered and amended by Chapter 148, Laws
50 of Utah 2005
51
52 Be it enacted by the Legislature of the state of Utah:
53 Section 1. Section 63-38f-1406 (Effective 07/01/05) is amended to read:
54 63-38f-1406 (Effective 07/01/05). Board of Tourism Development.
55 (1) There is created within the office the Board of Tourism Development.
56 (2) The board shall advise the office [in] on the office's planning, policies, and

57 strategies and on trends and opportunities for tourism development that may exist in the
58 various areas of the state.
59 (3) The board shall perform other duties as required by Section 63-38f-1408 .
60 Section 2. Section 63-38f-1407 (Effective 07/01/05) is amended to read:
61 63-38f-1407 (Effective 07/01/05). Members -- Meetings -- Expenses.
62 (1) (a) The board shall consist of [nine] 13 members appointed by the governor to
63 four-year terms of office with the consent of the Senate.
64 (b) Notwithstanding the requirements of Subsection (1)(a), the governor shall, at the
65 time of appointment or reappointment, adjust the length of terms to ensure that the terms of
66 board members are staggered so that approximately half of the board is appointed every two
67 years.
68 (2) The members may not serve more than two full consecutive terms unless the
69 governor determines that an additional term is in the best interest of the state.
70 (3) Not more than [five] seven members of the board may be of the same political
71 party.
72 (4) (a) The members shall be representative of:
73 (i) all areas of the state with six being appointed from separate geographical areas as
74 provided in Subsection (4)(b); and
75 (ii) a diverse mix of [the travel and] business ownership or executive management of
76 tourism related industries.
77 (b) The geographical representatives shall be appointed as follows:
78 (i) one member from Salt Lake, Tooele, or Morgan County;
79 (ii) one member from Davis, Weber, Box Elder, Cache, or Rich County;
80 (iii) one member from Utah, Summit, Juab, or Wasatch County;
81 (iv) one member from Carbon, Emery, Grand, Duchesne, Daggett, or Uintah County;
82 (v) one member from San Juan, Piute, Wayne, Garfield, or Kane County; and
83 (vi) one member from Washington, Iron, Beaver, Sanpete, Sevier, or Millard County.
84 (c) The [travel and] tourism industry representatives of ownership or executive
85 management shall be appointed [from among active participants in the ownership or
86 management of travel and tourism related businesses.] as follows:
87 (i) one member from ownership or executive management of the lodging industry, as

88 recommended by the lodging industry for the governor's consideration;
89 (ii) one member from ownership or executive management of the restaurant industry,
90 as recommended by the restaurant industry for the governor's consideration;
91 (iii) one member from ownership or executive management of the ski industry, as
92 recommended by the ski industry for the governor's consideration; and
93 (iv) one member from ownership or executive management of the motor vehicle rental
94 industry, as recommended by the motor vehicle rental industry for the governor's consideration.
95 (d) One member shall be appointed at large from ownership or executive management
96 of business, finance, economic policy, or the academic media marketing community.
97 (e) One member shall be appointed from the Utah Tourism Industry Coalition as
98 recommended by the coalition for the governor's consideration.
99 (f) One member shall be appointed to represent the state's counties as recommended by
100 the Utah Association of Counties for the governor's consideration.
101 (g) (i) The governor may choose to disregard a recommendation made for a board
102 member under Subsections (4)(c), (e), and (f).
103 (ii) The governor shall request additional recommendations if recommendations are
104 disregarded under Subsection (4)(g)(i).
105 (5) When a vacancy occurs in the membership for any reason, the replacement shall be
106 appointed for the unexpired term from the same geographic area or industry representation as
107 the member whose office was vacated.
108 (6) [Five] Seven members of the board [constitutes] constitute a quorum for
109 conducting board business and exercising board powers.
110 (7) The governor shall select one of the board members as chair and one of the board
111 members as vice chair, each for a [two-year] four-year term as recommended by the board for
112 the governor's consideration.
113 (8) (a) Members shall receive no compensation or benefits for their services, but may
114 receive per diem and expenses incurred in the performance of the member's official duties at
115 the rates established by the Division of Finance under Sections 63A-3-106 and 63A-3-107 .
116 (b) Members may decline to receive per diem and expenses for their service.
117 (9) The board shall meet [at least once each quarter] monthly or as often as the board
118 determines to be necessary at various locations throughout the state.

119 (10) Members who may have a potential conflict of interest in consideration of fund
120 allocation decisions shall identify the potential conflict prior to voting on the issue.
121 (11) (a) The board shall determine attendance requirements for maintaining a
122 designated board seat.
123 (b) If a board member fails to attend according to the requirements established
124 pursuant to Subsection (11)(a), the board member shall be replaced upon written certification
125 from the board chair or vice chair to the governor.
126 (c) A replacement appointed by the governor under Subsection (11)(b) shall serve for
127 the remainder of the board member's unexpired term.
128 [(10)] (12) The board's office shall be in Salt Lake City.
129 Section 3. Section 63-38f-1408 (Effective 07/01/05) is amended to read:
130 63-38f-1408 (Effective 07/01/05). Board duties.
131 (1) The board shall:
132 (a) [review] have authority to approve a tourism program of [information,] out-of-state
133 advertising, [and publicity relating to the recreational, scenic, historic, highway, and tourist
134 attractions of the state at large; and] marketing, and branding, taking into account the long-term
135 strategic plan, economic trends, and opportunities for tourism development on a statewide
136 basis, as a condition of the distribution of funds to the office from the Tourism Marketing
137 Performance Account under Section 63-38f-1411 ;
138 [(b) encourage and assist in the coordination of the activities of persons, firms,
139 associations, corporations, civic groups, and governmental agencies engaged in publicizing,
140 developing, and promoting the scenic attractions and tourist advantages of the state.]
141 (b) review the office programs for coordination and integration of advertising and
142 branding themes to be used whenever possible in all office programs, including recreational,
143 scenic, historic, and tourist attractions of the state at large;
144 (c) encourage and assist in coordination of the activities of persons, firms, associations,
145 corporations, civic groups, and governmental agencies engaged in publicizing, developing, and
146 promoting the scenic attractions and tourist advantages of the state; and
147 (d) (i) advise the office in establishing a Cooperative Program from the monies in the
148 Tourism Marketing Performance Account under Section 63-38f-1411 for use by cities,
149 counties, nonprofit destination marketing organizations, and similar public entities for the

150 purpose of supplementing monies committed by these entities for advertising and promotion to
151 and for out-of-state residents to attract them to visit sites advertised by and attend events
152 sponsored by these entities;
153 (ii) the Cooperative Program shall be allocated 20% of the revenues appropriated to the
154 office from the Tourism Marketing Performance Account;
155 (iii) the office, with approval from the board, shall establish eligibility, advertising, and
156 timing requirements and criteria and provide for an approval process for applications;
157 (iv) an application from an eligible applicant to receive monies from the Cooperative
158 Program must be submitted on or before the appropriate date established by the office; and
159 (v) Cooperative Program monies not used in each fiscal year shall be returned to the
160 Tourism Marketing Performance Account.
161 (2) The board may:
162 (a) solicit and accept contributions of moneys, services, and facilities from any other
163 sources, public or private and shall use these funds for promoting the general interest of the
164 state in [travel and] tourism[.]; and
165 (b) establish subcommittees for the purpose of assisting the board in an advisory role
166 only.
167 (3) The board may not, except as otherwise provided in Subsection (1)(a), make policy
168 related to the management or operation of the office.
169 Section 4. Section 63-38f-1409 (Effective 07/01/05) is amended to read:
170 63-38f-1409 (Effective 07/01/05). Powers and duties of office related to tourism
171 development plan -- Annual report and survey.
172 (1) The office shall:
173 (a) be the tourism development authority of the state;
174 (b) develop a tourism [promotion] advertising, marketing, and branding program for
175 the state;
176 (c) receive approval from the Board of Tourism Development under Subsection
177 63-38f-1408 (1)(a) before implementing the out-of-state advertising, marketing, and branding
178 campaign;
179 [(c)] (d) develop a plan to increase the economic contribution by tourists visiting the
180 state;

181 [(d)] (e) plan and conduct a program of information, advertising, and publicity relating
182 to the recreational, scenic, historic, [highway,] and tourist advantages and attractions of the
183 state at large; and
184 [(e)] (f) encourage and assist in the coordination of the activities of persons, firms,
185 associations, corporations, travel regions, counties, and governmental agencies engaged in
186 publicizing, developing, and promoting the scenic attractions and tourist advantages of the
187 state.
188 (2) Any plan provided for under Subsection (1) shall address, but not be limited to,
189 enhancing the state's image, promoting Utah as a year-round destination, encouraging
190 expenditures by visitors to the state, and expanding the markets where the state is promoted.
191 [(3) The office is encouraged to:]
192 [(a) conduct surveys on tourism promotion activities undertaken by cities and counties
193 within the state; and]
194 [(b) in collaboration with the cities and counties surveyed, make an annual report to the
195 Legislature on the economic benefit of those activities to the state and the cities and counties
196 surveyed by the office.]
197 (3) The office shall conduct a regular and ongoing research program to identify
198 statewide economic trends and conditions in the tourism sector of the economy and to provide
199 an annual evaluation of the economic efficiency of the advertising and branding campaigns
200 conducted under this part to the Legislature's Workforce Services and Community and
201 Economic Development Interim Committee and the Economic Development and Human
202 Resources Appropriations Subcommittee.
203 Section 5. Section 63-38f-1411 is enacted to read:
204 63-38f-1411. Tourism Marketing Performance Account.
205 (1) There is created within the General Fund a restricted account known as the Tourism
206 Marketing Performance Account.
207 (2) The account shall be administered by the office for the purposes listed in
208 Subsection (5).
209 (3) (a) The account shall earn interest.
210 (b) All interest earned on account monies shall be deposited into the account.
211 (c) Monies in the account are nonlapsing.

212 (4) The account shall be funded by appropriations made to the account by the
213 Legislature in accordance with this section.
214 (5) The director may use account monies to pay for the statewide advertising,
215 marketing, and branding campaign for promotion of the state as conducted by the office.
216 (6) (a) For the fiscal year beginning July 1, 2005, the director shall allocate 7.5% of the
217 account monies appropriated to the office, but not to exceed $750,000, to be distributed to a
218 sports organization for advertising, marketing, branding, and promoting Utah in attracting
219 sporting events into the state as determined by the office.
220 (b) For a fiscal year beginning on or after July 1, 2006, the amount distributed under
221 Subsection (6)(a) shall be indexed from the July 1, 2005 fiscal year to reflect a percent increase
222 or decrease of monies set aside into the account as compared to the previous fiscal year.
223 (c) The monies distributed under Subsections (6)(a) and (b) are nonlapsing.
224 (d) The office shall provide for an annual accounting to the director and the board by a
225 sports organization of the use of monies it receives under Subsection (6)(a) or (b).
226 (e) For purposes of this Subsection (6), "sports organization " means an organization
227 that is:
228 (i) exempt from federal income taxation in accordance with Section 501(c)(3), Internal
229 Revenue Code; and
230 (ii) created to foster national and international amateur sports competition to be held in
231 the state and sports tourism throughout the state, to include advertising, marketing, branding,
232 and promoting Utah for the purpose of attracting sporting events into the state.
233 (7) (a) Monies set aside into the account shall be as follows:
234 (i) for the fiscal year beginning July 1, 2005 only, an amount appropriated in Section 7
235 of this bill;
236 (ii) for the fiscal year beginning July 1, 2006, the $8,000,000 from beginning
237 nonlapsing appropriation balances in the Tourism Marketing Performance Account, a
238 legislative appropriation from the sales and use tax revenue increases identified in Subsection
239 (8), plus any appropriation made by the Legislature from the General Fund to the account in an
240 appropriations bill.
241 (iii) for the fiscal year beginning July 1, 2007, and for each fiscal year thereafter, a
242 $1,000,000 reduction in the prior year's appropriation sources other than the sales and use tax

243 revenue increases identified in Subsection (8), plus a legislative appropriation from the
244 cumulative sales and use tax revenue increases identified in Subsection (8).
245 (b) Monies in the account are nonlapsing.
246 (8) (a) In fiscal years 2006 through 2015, a portion of the state sales and use tax
247 revenues determined under this Subsection (8) shall be certified as a set-aside for the account
248 by the State Tax Commission and reported to the Office of Legislative Fiscal Analyst.
249 (b) The State Tax Commission shall determine the set-aside under this Subsection (8)
250 in each fiscal year by applying the following formula: if the increase in the state sales and use
251 tax revenues derived from the retail sales of tourist-oriented goods and services in the fiscal
252 year two years prior to the fiscal year in which the set-aside is to be made for the account is at
253 least 3% over the state sales and use tax revenues derived from the retail sales of
254 tourist-oriented goods and services generated in the fiscal year three years prior to the fiscal
255 year in which the set-aside is to be made, an amount equal to 1/2 of the state sales and use tax
256 revenues generated above the 3% increase shall be calculated by the commission and set aside
257 by the state treasurer for appropriation to the account.
258 (c) Total monies to be appropriated to the account in any fiscal year under Subsections
259 (8)(a) and (b) may not exceed the amount in the account under this section in the fiscal year
260 immediately preceding the current fiscal year by more than $3,000,000.
261 (d) As used in this Subsection (8), "sales of tourism-oriented goods and services" are
262 those sales by businesses registered with the State Tax Commission under the following codes
263 of the 1997 North American Industry Classification System of the federal Executive Office of
264 the President, Office of Management and Budget:
265 (i) NAICS Code 453 Miscellaneous Store Retailers;
266 (ii) NAICS Code 481 Passenger Air Transportation;
267 (iii) NAICS Code 487 Scenic and Sightseeing Transportation;
268 (iv) NAICS Code 711 Performing Arts, Spectator Sports and Related Industries;
269 (v) NAICS Code 712 Museums, Historical Sites and Similar Institutions;
270 (vi) NAICS Code 713 Amusement, Gambling and Recreation Industries;
271 (vii) NAICS Code 721 Accommodations;
272 (viii) NAICS Code 722 Food Services and Drinking Places;
273 (ix) NAICS Code 4483 Jewelry, Luggage, and Leather Goods Stores;

274 (x) NAICS Code 4853 Taxi and Limousine Service;
275 (xi) NAICS Code 4855 Charter Bus;
276 (xii) NAICS Code 5616 Travel Arrangement and Reservation Services;
277 (xiii) NAICS Code 44611 Pharmacies and Drug Stores;
278 (xiv) NAICS Code 45111 Sporting Goods Stores;
279 (xv) NAICS Code 45112 Hobby Toy and Game Stores;
280 (xvi) NAICS Code 45121 Book Stores and News Dealers;
281 (xvii) NAICS Code 445120 Convenience Stores without Gas Pumps;
282 (xviii) NAICS Code 447110 Gasoline Stations with Convenience Stores;
283 (xix) NAICS Code 447190 Other Gasoline Stations;
284 (xx) NAICS Code 532111 Passenger Car Rental; and
285 (xxi) NAICS Code 532292 Recreational Goods Rental.
286 Section 6. Repealer.
287 This bill repeals:
288 Section 63-38f-1401 (Effective 07/01/05), Purpose.
289 Section 63-38f-1402 (Effective 07/01/05), Definitions.
290 Section 63-38f-1403 (Effective 07/01/05), Creation and administration of fund.
291 Section 63-38f-1404 (Effective 07/01/05), Appropriations to the fund.
292 Section 63-38f-1405 (Effective 07/01/05), Distribution of fund monies --
293 Determination of recipients.
294 Section 7. Appropriation.
295 (1) There is appropriated to the Tourism Marketing Performance Account for the fiscal
296 year beginning July 1, 2005, and ending June 30, 2006 only, $18,000,000 from the General
297 Fund, one-time; and ($8,000,000) from Closing Nonlapsing Appropriations Balances to help
298 pay for the statewide advertising, marketing, and branding campaign for promotion of the state.
299 (2) There is appropriated to the Governor's Office of Economic Development for the
300 fiscal year beginning July 1, 2005, and ending June 30, 2006 only, $10,000,000 from the
301 Tourism Marketing Performance Account for the statewide advertising, marketing, and
302 branding campaign for tourism promotion of the state.
303 Section 8. Effective date.
304 This bill takes effect on July 1, 2005.