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MINUTES OF THE

HOUSE REVENUE AND TAXATION

STANDING COMMITTEE

Room W135 - West Office Building, State Capitol Complex


                     February 3, 2006

MEMBERS PRESENT:     Rep. Wayne A. Harper, Chair
                Rep. Glen A. Donnelson, Vice Chair                 
                Rep. Sheryl L. Allen
                Rep. Tim M. Cosgrove
                 Rep. Craig A. Frank                      
                 Rep. Fred R. Hunsaker
                Rep. Bradley G. Last                 
                Rep. Roz McGee
                 Rep. Carol Spackman Moss                
                 Rep. Joseph G. Murray                 
                 Rep. Merlynn T. Newbold
                Rep. Patrick L. Painter
                Rep. Ross I. Romero                         
                Rep. Gordon E. Snow
                                 
MEMBERS ABSENT:     Rep. Rebecca Lockhart

STAFF:            Bryant Howe, Assistant Director
                Rosemary Young, Secretary
                    
Note:    A list of visitors and a copy of handouts are filed with the committee minutes.

Chair Harper called the meeting to order at 2:05 p.m.

MOTION:    Rep. Frank moved to approve the minutes of the February 1, 2006 meeting. The motion passed unanimously with Rep. Allen, Rep. Last, Rep. Moss, and Rep. Newbold absent for the vote.

H.B. 147    Revisions to Distribution of Sales and Use Tax Revenue (Rep. S. Wyatt)

MOTION:    Rep. Snow moved to amend the bill as follows:

Amendment 1


1.    Page 1, Lines 16 through 19 :    

             16          .    establishes a procedure for a county, and a
  two-thirds       majority of the municipalities within a


             17
     county, to agree to an alternate distribution formula for certain local option sales
             18      and use tax revenues within the incorporated and unincorporated areas of the
             19      county;

2.    Page 2, Lines 43 through 46 :    

             43          .    establishes a procedure for a county, and a
  two-thirds       majority of the municipalities within a

             44      county, to reinstate the local option sales and use tax revenue distribution formula
             45      that applies to counties and municipalities that have not adopted an alternate
             46      distribution formula under this bill; and

3.    Page 9, Lines 271 through 273 :    

             271          (a) subject to Subsections (4) and (5), the county legislative body and a
  two- thirds       majority of the

             272      municipalities that are, in whole or in part, within that county agree, in writing, to an alternate
             273      distribution formula; and

4.    Page 12, Lines 338 through 340 :    

             338          (a) subject to Subsection (11), the county legislative body and a
  two- thirds       majority of the

             339      municipalities that are, in whole or in part, within that county, agree, in writing, to remove the
             340      designation as an alternate disbursal area; and
                    Amendment 2

1.    Page 1, Lines 16 through 19 :    

             16          .    establishes a procedure for a county, and a majority of the municipalities within a
             17      county, to agree to an alternate distribution formula for certain local option sales
             18      and use tax revenues within the incorporated and unincorporated areas of the
             19      county;
    
  .              provides that the procedure described in the preceding paragraph does not apply to a county of the first or second class;      


2.    Page 9, Line 267 through Page 10, Line 278 :    


             267          (3)
{   A   }        Except as provided in Subsection (4)(a), a       county shall be designated as an alternate disbursal area by the commission on

             268      the first day of the first calendar month after a 90-day period beginning on the day on which the
             269      commission receives written notice from the county that an alternate distribution formula is
             270      approved under Subsection (3)(b), if:
             271          (a) subject to Subsections (4)
  (b)       and (5), the county legislative body and a majority of the

             272      municipalities that are, in whole or in part, within that county agree, in writing, to an alternate
             273      distribution formula; and
             274          (b) in accordance with Subsection (8), after the agreement described in Subsection
             275      (3)(a) is reached, the alternate distribution formula is approved by a majority vote of the legal
             276      voters residing in the incorporated and unincorporated areas of the county.
             277          (4)
  (a)    The commission may not designate a county as an alternate disbursal area under this section if, on the day of the vote described in Subsection (3)(b), the county is a county of the first or second class.      

    
  (b)       The legislative body of a municipality shall determine whether a municipality

             278      agrees to an alternate distribution formula.

                    Amendment 3

1.    Page 1, Lines 16 through 19 :    

             16          .    establishes a procedure for a county, and a majority of the municipalities within a
             17      county,
  or, for a county with less than seven municipalities within the county, all of the municipalities within the county,       to agree to an alternate distribution formula for certain local option sales

             18      and use tax revenues within the incorporated and unincorporated areas of the
             19      county;

2.    Page 2, Lines 43 through 46 :    

             43          .    establishes a procedure for a county, and a majority of the municipalities within a


             44      county,
  or, for a county with less than seven municipalities within the county, all of the municipalities within the county,       to reinstate the local option sales and use tax revenue distribution formula

             45      that applies to counties and municipalities that have not adopted an alternate
             46      distribution formula under this bill; and

3.    Page 9, Lines 267 through 273 :    

             267          (3) A county shall be designated as an alternate disbursal area by the commission on
             268      the first day of the first calendar month after a 90-day period beginning on the day on which the
             269      commission receives written notice from the county that an alternate distribution formula is
             270      approved under Subsection (3)(b), if:
             271          (a) subject to Subsections (4) and (5)
{   ,   }        :      

        
  (i)    for a county with seven or more municipalities that are, in whole or in part, within the county,       the county legislative body and a majority of the

             272      municipalities that are, in whole or in part, within that county agree, in writing, to an alternate
             273      distribution formula
  ; or

        (ii)    for a county with less than seven municipalities that are, in whole or in part, within the county, the county legislative body and each municipality that is, in whole or in part, within that county agree, in writing, to an alternate distribution formula  
; and


4.    Page 11, Line 336 through Page 12, Line 340 :    

             336          (9) Subject to Subsection (10), the commission shall remove a county's designation as
             337      an alternate disbursal area if:
             338          (a) subject to Subsection (11)
{   ,   }        :      

        
  (i)    for a county with seven or more municipalities that are, in whole or in part, within the county,       the county legislative body and a majority of the

             339      municipalities that are, in whole or in part, within that county, agree, in writing, to remove the
             340      designation as an alternate disbursal area
  ; or

        (ii)    for a county with less than seven municipalities that are, in whole or in part, within the county, the county legislative body and each municipality that is, in

whole or in part, within that county agree, in writing, to remove the designation as an alternate disbursal area  

; and


A division of the motion was requested.

The motion to adopt amendment 1 passed unanimously with Rep. Allen, and Rep. Last, absent for the vote.

The motion to adopt amendment 2 failed with Rep. Romero voting in favor and Rep. Allen, and Rep. Last, absent for the vote.

The motion to adopt amendment 3 passed unanimously with Rep. Allen, and Rep. Last, absent for the vote.

Rep. Wyatt introduced the bill and explained it to the committee. The following individuals spoke in favor of the bill:
    Karl Hendrickson, Utah Association of Counties
    Larry Anhder, Nibley City Manager
    Mike Jerman, Utah Taxpayers Association
    Jack Green, Air Quality Task Force

The following individuals spoke in opposition to the bill:
    Roger Tew, Utah League of Cities and Towns
    Lincoln Schurtz, Utah League of Cities and Towns

MOTION:    Rep. Hunsaker moved to transmit the amended bill with a favorable recommendation.

SUBSTITUTE
MOTION:    
Rep. Newbold moved to proceed to the next item on the agenda. The motion failed with Rep. Cosgrove, Rep. McGee, Rep. Moss, Rep. Newbold, and Rep. Romero voting in favor and Rep. Snow absent for the vote.

The original motion to transmit HB 147 with a favorable recommendation passed with Rep. Cosgrove, Rep. McGee, Rep. Moss, Rep. Newbold, and Rep. Romero voting in opposition and Rep. Snow absent for the vote.

H.B. 309    Municipal Energy Sales and Use Tax Amendments (Rep. G. Hughes)

MOTION:    
Rep. Romero moved to delete in title and body HB 309 and replace it with 1st Substitute HB 309. The motion passed unanimously with Rep. Newbold and Rep. Snow absent for the vote.



Sen. Killpack introduced the bill and explained it to the committee. The following individuals spoke in favor of the bill:
    Roger Tew, Utah League of Cities and Towns
    Lincoln Schurtz, Utah League of Cities and Towns
    Morris Jackson, Questar
    Mike Jerman, Utah Taxpayers Association
    Leslie Reberg, Committee of consumer Services
    Paul Barber, Utah Energy Users Association
    Tom Bingham, Utah Manufacturers Association

MOTION:    
Rep. Frank moved to transmit the bill with a favorable recommendation. The motion passed unanimously with Rep. Hunsaker, Rep. McGee, and Rep. Snow absent for the vote.

H.B. 338    Property Tax Exemption for Business Personal Property (Rep. J. Dougall)

The bill was not considered at this meeting.

S.B. 36    School Districts - Limited Amendments to Truth in Taxation (Sen. M. Dmitrich) (Rep. G. Snow)

Sen. Dmitrich introduced the bill and explained it to the committee.

MOTION:    Rep. Allen moved to transmit the bill with a favorable recommendation. The motion passed unanimously with Rep. Hunsaker and Rep. Snow absent for the vote.

S.B. 28    Sales and Use Tax - Exemption for Isolated or Occasional Sales (Sen. L. Hillyard) (Rep. W. Harper)

Rep. Harper introduced the bill and explained it to the committee.

MOTION:    Rep. Allen moved to transmit the bill with a favorable recommendation. The motion passed unanimously with Rep. Hunsaker, Rep. Newbold, and Rep. Snow absent for the vote.

MOTION:    Rep. Allen moved to adjourn. The motion passed unanimously with Rep. Hunsaker, Rep. Newbold, and Rep. Snow absent for the vote.

The Vice Chair adjourned the meeting at 3:26 p.m.




                            __________________________
                            Rep. Wayne A. Harper, Chair