H.B. 380

1

TOURISM, RECREATION, CULTURAL,
2 CONVENTION, AND AIRPORT FACILITIES
3 TAX AMENDMENTS
4 2009 GENERAL SESSION
5 STATE OF UTAH
6 Chief Sponsor: Craig A. Frank
7 Senate Sponsor: ____________
8
9 LONG TITLE
10 General Description:
11 This bill amends the Tourism, Recreation, Cultural, Convention, and Airport Facilities
12 Tax Act to require certain revenues collected from a tax on food sold by restaurants to
13 be deposited into a fund and expended by the commissioner of agriculture and food for
14 certain purposes related to tourism promotion.
15 Highlighted Provisions:
16 This bill:
17 . defines terms;
18 . enacts the Utah Food and Restaurant Promotion Fund, including:
19 . addressing funding for the fund; and
20 . requiring the commissioner of agriculture and food to expend monies deposited
21 into the fund for certain purposes related to tourism promotion;
22 . requires the State Tax Commission to deposit certain revenues collected from a tax
23 on food sold by restaurants into the Utah Food and Restaurant Promotion Fund; and
24 . makes technical changes.
25 Monies Appropriated in this Bill:
26 None
27 Other Special Clauses:

28 None
29 Utah Code Sections Affected:
30 AMENDS:
31 17-31-5.5, as last amended by Laws of Utah 2008, Chapter 286
32 59-12-602, as last amended by Laws of Utah 2008, Chapter 286
33 59-12-603, as last amended by Laws of Utah 2008, Chapters 286 and 384
34 ENACTS:
35 4-40-101, Utah Code Annotated 1953
36 4-40-102, Utah Code Annotated 1953
37 4-40-103, Utah Code Annotated 1953
38
39 Be it enacted by the Legislature of the state of Utah:
40 Section 1. Section 4-40-101 is enacted to read:
41 CHAPTER 40. UTAH FOOD AND RESTAURANT PROMOTION FUND ACT
42 4-40-101. Title.
43 This chapter is known as the "Utah Food and Restaurant Promotion Fund Act."
44 Section 2. Section 4-40-102 is enacted to read:
45 4-40-102. Definitions.
46 As used in this chapter, "fund" means the Utah Food and Restaurant Promotion Fund.
47 Section 3. Section 4-40-103 is enacted to read:
48 4-40-103. Utah Food and Restaurant Promotion Fund -- Source of monies --
49 Interest -- Expenditure of monies.
50 (1) There is created a restricted special revenue fund known as the Utah Food and
51 Restaurant Promotion Fund.
52 (2) The fund shall be funded by the portion of the sales and use tax described in
53 Subsection 59-12-603 (2)(b).
54 (3) (a) The fund shall earn interest.
55 (b) Any interest earned on fund monies shall be deposited into the fund.
56 (4) (a) The commissioner shall expend the monies deposited into the fund as provided
57 in this Subsection (4).
58 (b) The commissioner shall expend 78% of the monies deposited into the fund for

59 tourism promotion by promoting increased patronage of restaurants in the state by:
60 (i) persons who reside within the state; and
61 (ii) persons who reside outside the state.
62 (c) The commissioner shall expend 22% of the monies deposited into the fund for
63 tourism promotion by promoting the use of the following by restaurants in the state:
64 (i) products grown in a variety of Utah counties; or
65 (ii) products produced in a variety of Utah counties.
66 Section 4. Section 17-31-5.5 is amended to read:
67 17-31-5.5. Independent audit -- Report to county legislative body -- Content.
68 (1) The legislative body of each county imposing the transient room tax provided for in
69 Section 59-12-301 shall annually engage an independent auditor to perform an audit to verify
70 that transient room tax funds are used only as authorized by this chapter and to report the
71 findings of the audit to the county legislative body.
72 (2) Subsection (1) applies to the tourism, recreation, cultural, convention, and airport
73 facilities tax provided for in Section 59-12-603 , except that the audit verification required
74 under this Subsection (2) shall be for the uses authorized under Section 59-12-603 .
75 (3) The report required under Subsection (1) shall include a breakdown of expenditures
76 into the following categories:
77 (a) for the transient room tax, identification of expenditures for:
78 (i) establishing and promoting:
79 (A) recreation;
80 (B) tourism;
81 (C) film production; and
82 (D) conventions;
83 (ii) acquiring, leasing, constructing, furnishing, or operating:
84 (A) convention meeting rooms;
85 (B) exhibit halls;
86 (C) visitor information centers;
87 (D) museums; and
88 (E) related facilities;
89 (iii) acquiring or leasing land required for or related to the purposes listed in

90 Subsection (3)(a)(ii);
91 (iv) mitigation costs as identified in Subsection 17-31-2 (1)(d); and
92 (v) making the annual payment of principal, interest, premiums, and necessary reserves
93 for any or the aggregate of bonds issued to pay for costs referred to in Subsections
94 17-31-2 (2)(c) and (3)(a); and
95 (b) for the tourism, recreation, cultural, convention, and airport facilities tax,
96 identification of expenditures for:
97 (i) financing tourism promotion[, which means an activity to develop, encourage,
98 solicit, or market tourism that attracts transient guests to the county, including planning,
99 product development, and advertising] as defined in Section 59-12-602 ;
100 (ii) the development, operation, and maintenance of the following facilities as defined
101 in Section 59-12-602 :
102 (A) an airport facility;
103 (B) a convention facility;
104 (C) a cultural facility;
105 (D) a recreation facility; and
106 (E) a tourist facility; and
107 (iii) a pledge as security for evidences of indebtedness under Subsection 59-12-603 (3).
108 (4) A county legislative body shall provide a copy of a report it receives under this
109 section to:
110 (a) the Governor's Office of Economic Development;
111 (b) its tourism tax advisory board; and
112 (c) the Office of the Legislative Fiscal Analyst.
113 Section 5. Section 59-12-602 is amended to read:
114 59-12-602. Definitions.
115 As used in this part:
116 (1) (a) Subject to Subsection (1)(b), "airport facility" means an airport of regional
117 significance, as defined by the Transportation Commission by rule made in accordance with
118 Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
119 (b) "Airport facility" includes:
120 (i) an appurtenance to an airport, including a fixed guideway as defined in Section

121 59-12-1702 that provides transportation service to or from the airport;
122 (ii) a control tower, including a radar system;
123 (iii) a public area of an airport; or
124 (iv) a terminal facility.
125 (2) "Convention facility" means any publicly owned or operated convention center,
126 sports arena, or other facility at which conventions, conferences, and other gatherings are held
127 and whose primary business or function is to host such conventions, conferences, and other
128 gatherings.
129 (3) "Cultural facility" means any publicly owned or operated museum, theater, art
130 center, music hall, or other cultural or arts facility.
131 (4) "Recreation facility" or "tourist facility" means any publicly owned or operated
132 park, campground, marina, dock, golf course, water park, historic park, monument,
133 planetarium, zoo, bicycle trails, and other recreation or tourism-related facility.
134 (5) (a) "Restaurant" includes any coffee shop, cafeteria, luncheonette, soda fountain, or
135 fast-food service where food is prepared for immediate consumption.
136 (b) "Restaurant" does not include:
137 (i) any retail establishment whose primary business or function is the sale of fuel or
138 food items for off-premise, but not immediate, consumption; and
139 (ii) a theater that sells food items, but not a dinner theater.
140 (6) (a) "Tourism promotion" means to develop, market, promote, or solicit tourism.
141 (b) "Tourism promotion" includes:
142 (i) advertising;
143 (ii) planning;
144 (iii) product development; or
145 (iv) tourism promotion as described in Subsection 59-12-603 (2)(b)(ii) or (2)(c).
146 Section 6. Section 59-12-603 is amended to read:
147 59-12-603. County tax -- Bases -- Rates -- Use of revenues -- Adoption of
148 ordinance required -- Advisory board -- Administration -- Collection -- Distribution --
149 Enactment or repeal of tax or tax rate change -- Effective date -- Notice requirements.
150 (1) (a) In addition to any other taxes, a county legislative body may, as provided in this
151 part, impose a tax as follows:

152 (i) (A) a county legislative body of any county may impose a tax of not to exceed 3%
153 on all short-term leases and rentals of motor vehicles not exceeding 30 days, except for leases
154 and rentals of motor vehicles made for the purpose of temporarily replacing a person's motor
155 vehicle that is being repaired pursuant to a repair or an insurance agreement; and
156 (B) beginning on or after January 1, 1999, a county legislative body of any county
157 imposing a tax under Subsection (1)(a)(i)(A) may, in addition to imposing the tax under
158 Subsection (1)(a)(i)(A), impose a tax of not to exceed 4% on all short-term leases and rentals
159 of motor vehicles not exceeding 30 days, except for leases and rentals of motor vehicles made
160 for the purpose of temporarily replacing a person's motor vehicle that is being repaired pursuant
161 to a repair or an insurance agreement;
162 (ii) a county legislative body of any county may impose a tax of not to exceed 1% of all
163 sales of the following that are sold by a restaurant:
164 (A) prepared food; or
165 (B) food and food ingredients; and
166 (iii) a county legislative body of a county of the first class may impose a tax of not to
167 exceed .5% on charges for the accommodations and services described in Subsection
168 59-12-103 (1)(i).
169 (b) A tax imposed under Subsection (1)(a) is subject to the audit provisions of Section
170 17-31-5.5 .
171 (2) (a) Subject to [Subsection (2)(b)] Subsections (2)(b) and (c), revenue from the
172 imposition of the taxes provided for in Subsections (1)(a)(i) through (iii) may be used for:
173 (i) financing tourism promotion; and
174 (ii) the development, operation, and maintenance of:
175 (A) an airport facility;
176 (B) a convention facility;
177 (C) a cultural facility;
178 (D) a recreation facility; or
179 (E) a tourist facility.
180 (b) (i) Each fiscal year, beginning with fiscal year 2009-10, the commission shall
181 deposit 3.44% of the revenues collected from a tax authorized by Subsection (1)(a)(ii) within
182 the boundaries of a county that imposes a tax authorized by Subsection (1)(a)(ii) into the Utah

183 Food and Restaurant Promotion Fund created in Section 4-40-103 .
184 (ii) The commissioner of agriculture and food shall expend monies deposited into the
185 Utah Food and Restaurant Promotion Fund in accordance with Subsection (2)(b)(i) for tourism
186 promotion as provided in Section 4-40-103 .
187 [(b)] (c) A county of the first class shall expend at least $450,000 each year of the
188 revenues from the imposition of a tax authorized by Subsection (1)(a)(iii) within the county to
189 fund a marketing and ticketing system designed [to]:
190 (i) [promote] for tourism promotion in ski areas within the county by persons that do
191 not reside within the state; and
192 (ii) to combine the sale of:
193 (A) ski lift tickets; and
194 (B) accommodations and services described in Subsection 59-12-103 (1)(i).
195 (3) A tax imposed under this part may be pledged as security for bonds, notes, or other
196 evidences of indebtedness incurred by a county, city, or town under Title 11, Chapter 14, Local
197 Government Bonding Act, or a community development and renewal agency under Title 17C,
198 Chapter 1, Part 5, Agency Bonds, to finance:
199 (a) an airport facility;
200 (b) a convention facility;
201 (c) a cultural facility;
202 (d) a recreation facility; or
203 (e) a tourist facility.
204 (4) (a) In order to impose the tax under Subsection (1), each county legislative body
205 shall adopt an ordinance imposing the tax.
206 (b) The ordinance under Subsection (4)(a) shall include provisions substantially the
207 same as those contained in Part 1, Tax Collection, except that the tax shall be imposed only on
208 those items and sales described in Subsection (1).
209 (c) The name of the county as the taxing agency shall be substituted for that of the state
210 where necessary, and an additional license is not required if one has been or is issued under
211 Section 59-12-106 .
212 (5) In order to maintain in effect its tax ordinance adopted under this part, each county
213 legislative body shall, within 30 days of any amendment of any applicable provisions of Part 1,

214 Tax Collection, adopt amendments to its tax ordinance to conform with the applicable
215 amendments to Part 1, Tax Collection.
216 (6) (a) Regardless of whether a county of the first class creates a tourism tax advisory
217 board in accordance with Section 17-31-8 , the county legislative body of the county of the first
218 class shall create a tax advisory board in accordance with this Subsection (6).
219 (b) The tax advisory board shall be composed of nine members appointed as follows:
220 (i) four members shall be appointed by the county legislative body of the county of the
221 first class as follows:
222 (A) one member shall be a resident of the unincorporated area of the county;
223 (B) two members shall be residents of the incorporated area of the county; and
224 (C) one member shall be a resident of the unincorporated or incorporated area of the
225 county; and
226 (ii) subject to Subsections (6)(c) and (d), five members shall be mayors of cities or
227 towns within the county of the first class appointed by an organization representing all mayors
228 of cities and towns within the county of the first class.
229 (c) Five members of the tax advisory board constitute a quorum.
230 (d) The county legislative body of the county of the first class shall determine:
231 (i) terms of the members of the tax advisory board;
232 (ii) procedures and requirements for removing a member of the tax advisory board;
233 (iii) voting requirements, except that action of the tax advisory board shall be by at
234 least a majority vote of a quorum of the tax advisory board;
235 (iv) chairs or other officers of the tax advisory board;
236 (v) how meetings are to be called and the frequency of meetings; and
237 (vi) the compensation, if any, of members of the tax advisory board.
238 (e) The tax advisory board under this Subsection (6) shall advise the county legislative
239 body of the county of the first class on the expenditure of revenues collected within the county
240 of the first class from the taxes described in Subsection (1)(a).
241 (7) (a) (i) Except as provided in Subsection (7)(a)(ii), a tax authorized under this part
242 shall be administered, collected, and enforced in accordance with:
243 (A) the same procedures used to administer, collect, and enforce the tax under:
244 (I) Part 1, Tax Collection; or

245 (II) Part 2, Local Sales and Use Tax Act; and
246 (B) Chapter 1, General Taxation Policies.
247 (ii) A tax under this part is not subject to Section 59-12-107.1 or 59-12-123 or
248 Subsections 59-12-205 (2) through (6).
249 (b) Except as provided in Subsection (7)(c):
250 (i) for a tax under this part other than the tax under Subsection (1)(a)(i)(B), the
251 commission shall distribute the revenues to the county imposing the tax; and
252 (ii) for a tax under Subsection (1)(a)(i)(B), the commission shall distribute the revenues
253 according to the distribution formula provided in Subsection (8).
254 (c) The commission shall deduct from the distributions under Subsection (7)(b) an
255 administrative charge for collecting the tax as provided in Section 59-12-206 .
256 (8) The commission shall distribute the revenues generated by the tax under Subsection
257 (1)(a)(i)(B) to each county collecting a tax under Subsection (1)(a)(i)(B) according to the
258 following formula:
259 (a) the commission shall distribute 70% of the revenues based on the percentages
260 generated by dividing the revenues collected by each county under Subsection (1)(a)(i)(B) by
261 the total revenues collected by all counties under Subsection (1)(a)(i)(B); and
262 (b) the commission shall distribute 30% of the revenues based on the percentages
263 generated by dividing the population of each county collecting a tax under Subsection
264 (1)(a)(i)(B) by the total population of all counties collecting a tax under Subsection (1)(a)(i)(B).
265 (9) (a) For purposes of this Subsection (9):
266 (i) "Annexation" means an annexation to a county under Title 17, Chapter 2,
267 Annexation to County.
268 (ii) "Annexing area" means an area that is annexed into a county.
269 (b) (i) Except as provided in Subsection (9)(c), if, on or after July 1, 2004, a county
270 enacts or repeals a tax or changes the rate of a tax under this part, the enactment, repeal, or
271 change shall take effect:
272 (A) on the first day of a calendar quarter; and
273 (B) after a 90-day period beginning on the date the commission receives notice meeting
274 the requirements of Subsection (9)(b)(ii) from the county.
275 (ii) The notice described in Subsection (9)(b)(i)(B) shall state:

276 (A) that the county will enact or repeal a tax or change the rate of a tax under this part;
277 (B) the statutory authority for the tax described in Subsection (9)(b)(ii)(A);
278 (C) the effective date of the tax described in Subsection (9)(b)(ii)(A); and
279 (D) if the county enacts the tax or changes the rate of the tax described in Subsection
280 (9)(b)(ii)(A), the rate of the tax.
281 (c) (i) The enactment of a tax or a tax rate increase shall take effect on the first day of
282 the first billing period:
283 (A) that begins after the effective date of the enactment of the tax or the tax rate
284 increase; and
285 (B) if the billing period for the transaction begins before the effective date of the
286 enactment of the tax or the tax rate increase imposed under Subsection (1).
287 (ii) The repeal of a tax or a tax rate decrease shall take effect on the first day of the last
288 billing period:
289 (A) that began before the effective date of the repeal of the tax or the tax rate decrease;
290 and
291 (B) if the billing period for the transaction begins before the effective date of the repeal
292 of the tax or the tax rate decrease imposed under Subsection (1).
293 (d) (i) Except as provided in Subsection (9)(e), if, for an annexation that occurs on or
294 after July 1, 2004, the annexation will result in the enactment, repeal, or change in the rate of a
295 tax under this part for an annexing area, the enactment, repeal, or change shall take effect:
296 (A) on the first day of a calendar quarter; and
297 (B) after a 90-day period beginning on the date the commission receives notice meeting
298 the requirements of Subsection (9)(d)(ii) from the county that annexes the annexing area.
299 (ii) The notice described in Subsection (9)(d)(i)(B) shall state:
300 (A) that the annexation described in Subsection (9)(d)(i) will result in an enactment,
301 repeal, or change in the rate of a tax under this part for the annexing area;
302 (B) the statutory authority for the tax described in Subsection (9)(d)(ii)(A);
303 (C) the effective date of the tax described in Subsection (9)(d)(ii)(A); and
304 (D) if the county enacts the tax or changes the rate of the tax described in Subsection
305 (9)(d)(ii)(A), the rate of the tax.
306 (e) (i) The enactment of a tax or a tax rate increase shall take effect on the first day of

307 the first billing period:
308 (A) that begins after the effective date of the enactment of the tax or the tax rate
309 increase; and
310 (B) if the billing period for the transaction begins before the effective date of the
311 enactment of the tax or the tax rate increase imposed under Subsection (1).
312 (ii) The repeal of a tax or a tax rate decrease shall take effect on the first day of the last
313 billing period:
314 (A) that began before the effective date of the repeal of the tax or the tax rate decrease;
315 and
316 (B) if the billing period for the transaction begins before the effective date of the repeal
317 of the tax or the tax rate decrease imposed under Subsection (1).




Legislative Review Note
as of 2-12-09 10:16 AM

Office of Legislative Research and General Counsel