H.B. 286

1

FUNDING FOR BURYING UTILITY LINES
2 2011 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Joel K. Briscoe
5 Senate Sponsor: ____________
6
7 LONG TITLE
8 General Description:
9 This bill allows a county, city, or town legislative body to impose a local sales and use
10 tax to bury utility lines.
11 Highlighted Provisions:
12 This bill:
13 . allows a county, city, or town legislative body to impose a sales and use tax;
14 . establishes a maximum tax rate for the tax;
15 . requires that collections from the sales and use tax be used to bury certain utility
16 lines; and
17 . provides for administration and collection procedures.
18 Money Appropriated in this Bill:
19 None
20 Other Special Clauses:
21 This bill takes effect on July 1, 2011.
22 Utah Code Sections Affected:
23 ENACTS:
24 59-12-2301, Utah Code Annotated 1953
25 59-12-2302, Utah Code Annotated 1953
26 59-12-2303, Utah Code Annotated 1953
27 59-12-2304, Utah Code Annotated 1953

28 59-12-2305, Utah Code Annotated 1953
29 59-12-2306, Utah Code Annotated 1953
30
31 Be it enacted by the Legislature of the state of Utah:
32 Section 1. Section 59-12-2301 is enacted to read:
33 Part 23. Underground Utility Line Sales and Use Tax Act
34 59-12-2301. Title.
35 This part is known as the "Underground Utility Line Sales and Use Tax Act."
36 Section 2. Section 59-12-2302 is enacted to read:
37 59-12-2302. Definitions.
38 As used in this part:
39 (1) "Annexation" means an annexation to:
40 (a) a county under Title 17, Chapter 2, Part 2, County Annexation; or
41 (b) a city or town under Title 10, Chapter 2, Part 4, Annexation.
42 (2) "Annexing area" means an area that is annexed into a county, city, or town.
43 (3) "Utility line" means an electrical transmission line or a telephone transmission line.
44 Section 3. Section 59-12-2303 is enacted to read:
45 59-12-2303. Imposition of tax -- Base -- Rate -- Expenditure of revenues collected
46 from the tax -- Administration, collection, and enforcement of tax by commission --
47 Administrative fee -- Enactment or repeal of tax -- Annexation -- Notice.
48 (1) (a) Subject to the other provisions of this section and except as provided in
49 Subsection (2), a county, city, or town legislative body may impose a sales and use tax of up to
50 .10% on the transactions:
51 (i) described in Subsection 59-12-103 (1); and
52 (ii) within the county, city, or town.
53 (b) A county, city, or town legislative body that imposes a tax under Subsection (1)(a)
54 may only expend the revenues collected from the tax to bury utility lines.
55 (c) For purposes of this Subsection (1), the location of a transaction shall be
56 determined in accordance with Sections 59-12-211 through 59-12-215 .
57 (d) For purposes of this section, a county legislative body may only impose a tax under
58 this part within the unincorporated area of the county.

59 (2) (a) A county, city, or town legislative body may not impose a tax under this part on:
60 (i) the sales and uses described in Section 59-12-104 to the extent the sales and uses
61 are exempt from taxation under Section 59-12-104 ; and
62 (ii) except as provided in Subsection (2)(b), amounts paid or charged for food and food
63 ingredients.
64 (b) A county, city, or town legislative body imposing a tax under this part shall impose
65 the tax on amounts paid or charged for food and food ingredients if the food and food
66 ingredients are sold as part of a bundled transaction attributable to food and food ingredients
67 and tangible personal property other than food and food ingredients.
68 (3) To impose a tax under this part, a county, city, or town legislative body shall obtain
69 approval by a majority vote of the members of the county, city, or town legislative body.
70 (4) The commission shall, on a monthly basis, transmit revenues collected within a
71 county, city, or town from a tax under this part to the county, city, or town legislative body by
72 electronic funds transfer.
73 (5) (a) Except as provided in Subsection (5)(b), the commission shall administer,
74 collect, and enforce a tax under this part in accordance with:
75 (i) the same procedures used to administer, collect, and enforce the tax under:
76 (A) Part 1, Tax Collection; or
77 (B) Part 2, Local Sales and Use Tax Act; and
78 (ii) Chapter 1, General Taxation Policies.
79 (b) A tax under this part is not subject to Subsections 59-12-205 (2) through (6).
80 (6) (a) The commission may retain an amount of tax collected under this part of not to
81 exceed the lesser of:
82 (i) 1.5%; or
83 (ii) an amount equal to the cost to the commission of administering this part.
84 (b) Any amount the commission retains under Subsection (6)(a) shall be:
85 (i) deposited into the Sales and Use Tax Administrative Fees Account; and
86 (ii) used as provided in Subsection 59-12-206 (2).
87 (7) (a) (i) Except as provided in Subsection (7)(b) or (c), if, a county, city, or town
88 enacts or repeals a tax or changes the rate of a tax under this part, the enactment, repeal, or
89 change shall take effect:

90 (A) on the first day of a calendar quarter; and
91 (B) after a 90-day period beginning on the date the commission receives notice meeting
92 the requirements of Subsection (7)(a)(ii) from the county, city, or town.
93 (ii) The notice described in Subsection (7)(a)(i)(B) shall state:
94 (A) that the county, city, or town will enact or repeal a tax or change the rate of the tax
95 under this part;
96 (B) the statutory authority for the tax described in Subsection (7)(a)(ii)(A);
97 (C) the effective date of the tax described in Subsection (7)(a)(ii)(A); and
98 (D) if the county, city, or town enacts the tax or changes the rate of the tax described in
99 Subsection (7)(a)(ii)(A), the rate of the tax.
100 (b) (i) If the billing period for a transaction begins before the enactment of the tax or
101 the tax rate increase under Subsection (1), the enactment of a tax or a tax rate increase shall
102 take effect on the first day of the first billing period that begins after the effective date of the
103 enactment of the tax or the tax rate increase.
104 (ii) If the billing period for a transaction begins before the effective date of the repeal
105 of the tax or the tax rate decrease imposed under Subsection (1), the repeal of a tax or a tax rate
106 decrease shall take effect on the first day of the last billing period that began before the
107 effective date of the repeal of the tax or the tax rate decrease.
108 (c) (i) If a tax due under this part on a catalogue sale is computed on the basis of sales
109 and use tax rates published in the catalogue, an enactment, repeal, or change in the rate of a tax
110 described in Subsection (7)(a)(i) takes effect:
111 (A) on the first day of a calendar quarter; and
112 (B) beginning 60 days after the effective date of the enactment, repeal, or change in the
113 rate of the tax under Subsection (7)(a)(i).
114 (ii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
115 commission may by rule define the term "catalogue sale."
116 (d) (i) Except as provided in Subsection (7)(e) or (f), if, for an annexation that occurs
117 on or after July 1, 2011, the annexation will result in the enactment, repeal, or change in the
118 rate of a tax under this part for an annexing area, the enactment, repeal, or change shall take
119 effect:
120 (A) on the first day of a calendar quarter; and

121 (B) after a 90-day period beginning on the date the commission receives notice meeting
122 the requirements of Subsection (7)(d)(ii) from the county, city, or town that annexes the
123 annexing area.
124 (ii) The notice described in Subsection (7)(d)(i)(B) shall state:
125 (A) that the annexation described in Subsection (7)(d)(i)(B) will result in the
126 enactment, repeal, or change in the rate of a tax under this part for the annexing area;
127 (B) the statutory authority for the tax described in Subsection (7)(d)(ii)(A);
128 (C) the effective date of the tax described in Subsection (7)(d)(ii)(A); and
129 (D) if the county, city, or town enacts the tax or changes the rate of the tax described in
130 Subsection (7)(d)(ii)(A), the rate of the tax.
131 (e) (i) If the billing period for a transaction begins before the effective date of the
132 enactment of the tax or a tax rate increase under Subsection (1), the enactment of a tax or a tax
133 rate increase shall take effect on the first day of the first billing period that begins after the
134 effective date of the enactment of the tax or the tax rate increase.
135 (ii) If the billing period for a transaction begins before the effective date of the repeal
136 of the tax or the tax rate decrease imposed under Subsection (1), the repeal of a tax or a tax rate
137 decrease shall take effect on the first day of the last billing period that began before the
138 effective date of the repeal of the tax or the tax rate decrease.
139 (f) (i) If a tax due under this part on a catalogue sale is computed on the basis of sales
140 and use tax rates published in the catalogue, an enactment, repeal, or change in the rate of a tax
141 described in Subsection (7)(d)(i) takes effect:
142 (A) on the first day of a calendar quarter; and
143 (B) beginning 60 days after the effective date of the enactment, repeal, or change under
144 Subsection (7)(d)(i).
145 (ii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
146 commission may by rule define the term "catalogue sale."
147 Section 4. Section 59-12-2304 is enacted to read:
148 59-12-2304. Seller or certified service provider reliance on commission
149 information.
150 A seller or certified service provider is not liable for failing to collect a tax at a tax rate
151 imposed under this part if the seller's or certified service provider's failure to collect the tax is

152 as a result of the seller's or certified service provider's reliance on incorrect data provided by
153 the commission in a database created by the commission:
154 (1) containing tax rates, boundaries, or local taxing jurisdiction assignments; or
155 (2) indicating the taxability of tangible personal property, a product transferred
156 electronically, or a service.
157 Section 5. Section 59-12-2305 is enacted to read:
158 59-12-2305. Certified service provider or model 2 seller reliance on commission
159 certified software.
160 (1) Except as provided in Subsection (2) and subject to Subsection (4), a certified
161 service provider or model 2 seller is not liable for failing to collect a tax required under this
162 part if:
163 (a) the certified service provider or model 2 seller relies on software the commission
164 certifies; and
165 (b) the certified service provider's or model 2 seller's failure to collect a tax required
166 under this part is as a result of the seller's or certified service provider's reliance on incorrect
167 data:
168 (i) provided by the commission; or
169 (ii) in the software the commission certifies.
170 (2) The relief from liability described in Subsection (1) does not apply if a certified
171 service provider or model 2 seller incorrectly classifies an item or transaction into a product
172 category the commission certifies.
173 (3) If the taxability of a product category is incorrectly classified in software the
174 commission certifies, the commission shall:
175 (a) notify a certified service provider or model 2 seller of the incorrect classification of
176 the taxability of a product category in software the commission certifies; and
177 (b) state in the notice required by Subsection (3)(a) that the certified service provider or
178 model 2 seller is liable for failing to collect the correct amount of tax under this part on the
179 incorrectly classified product category if the certified service provider or model 2 seller fails to
180 correct the taxability of the item or transaction within 10 days after the day on which the
181 certified service provider or model 2 seller receives the notice.
182 (4) If a certified service provider or model 2 seller fails to correct the taxability of an

183 item or transaction within 10 days after the day on which the certified service provider or
184 model 2 seller receives the notice described in Subsection (3), the certified service provider or
185 model 2 seller is liable for failing to collect the correct amount of tax under this part on the
186 item or transaction.
187 Section 6. Section 59-12-2306 is enacted to read:
188 59-12-2306. Purchaser relief from liability.
189 (1) (a) Except as provided in Subsection (1)(b), a purchaser is relieved from a penalty
190 under Section 59-1-401 for failure to pay a tax due under this part or an underpayment if:
191 (i) the purchaser's seller or certified service provider relies on incorrect data provided
192 by the commission:
193 (A) on a tax rate;
194 (B) on a boundary;
195 (C) on a taxing jurisdiction; or
196 (D) in the taxability matrix the commission provides in accordance with the agreement;
197 or
198 (ii) the purchaser, regardless of whether the purchaser holds a direct payment permit in
199 accordance with Section 59-12-107.1 , relies on incorrect data provided by the commission:
200 (A) on a tax rate;
201 (B) on a boundary;
202 (C) on a taxing jurisdiction; or
203 (D) in the taxability matrix the commission provides in accordance with the agreement.
204 (b) For purposes of Subsection (1)(a), a purchaser is not relieved from a penalty under
205 Section 59-1-401 for failure to pay a tax due under this part or an underpayment if the
206 purchaser's, the purchaser's seller's, or the purchaser's certified service provider's reliance on
207 incorrect data provided by the commission is as a result of conduct that is:
208 (i) fraudulent;
209 (ii) intentional; or
210 (iii) willful.
211 (2) In addition to the relief from a penalty described in Subsection (1), a purchaser is
212 not liable for a tax or interest under Section 59-1-402 for failure to pay a tax due under this part
213 or an underpayment if:

214 (a) the purchaser's seller or certified service provider relies on:
215 (i) incorrect data provided by the commission:
216 (A) on a tax rate;
217 (B) on a boundary; or
218 (C) on a taxing jurisdiction; or
219 (ii) an erroneous classification by the commission:
220 (A) in the taxability matrix the commission provides in accordance with the agreement;
221 and
222 (B) with respect to a term in the library of definitions, if that term is listed as taxable or
223 exempt, included in or excluded from "sales price," or included in or excluded from a
224 definition; or
225 (b) the purchaser, regardless of whether the purchaser holds a direct payment permit in
226 accordance with Section 59-12-107.1 , relies on:
227 (i) incorrect data provided by the commission:
228 (A) on a tax rate;
229 (B) on a boundary; or
230 (C) on a taxing jurisdiction; or
231 (ii) an erroneous classification by the commission:
232 (A) in the taxability matrix the commission provides in accordance with the agreement;
233 and
234 (B) with respect to a term in the library of definitions, if that term is listed as taxable or
235 exempt, included in or excluded from "sales price," or included in or excluded from a
236 definition.
237 Section 7. Effective date.
238 This bill takes effect on July 1, 2011.




Legislative Review Note
as of 2-9-11 2:00 PM

Office of Legislative Research and General Counsel