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First Substitute H.B. 356

Representative Brad R. Wilson proposes the following substitute bill:


             1     
NEW CONVENTION FACILITY DEVELOPMENT INCENTIVE

             2     
PROVISIONS

             3     
2014 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Brad R. Wilson

             6     
Senate Sponsor: J. Stuart Adams

             7      Cosponsor:Rebecca D. Lockhart              8     
             9      LONG TITLE
             10      General Description:
             11          This bill enacts provisions relating to incentives for the development of a new
             12      convention facility.
             13      Highlighted Provisions:
             14          This bill:
             15          .    enacts the New Convention Facility Development Incentive Act;
             16          .    establishes a tax credit for the owner of a new convention hotel or a local
             17      government entity, under certain circumstances, in the amount of state and local
             18      sales tax revenue generated from sales related to the construction of a new
             19      convention hotel and from sales on hotel property, and other local taxes;
             20          .    establishes requirements and criteria for qualifying for a tax credit;
             21          .    establishes a process for applying for and the issuance of a tax credit certificate,
             22      including an agreement between the Governor's Office of Economic Development
             23      and the hotel owner or local government in which the hotel is located;
             24          .    authorizes a community development and renewal agency of a host local


             25      government to receive incremental property tax revenue generated from hotel property during
             26      the eligibility period;
             27          .    limits how money derived from a tax credit and incremental property tax revenue
             28      may be spent;
             29          .    establishes an independent review committee to review tax credit applications;
             30          .    grants the Governor's Office of Economic Development rulemaking authority to
             31      carry out its responsibilities under and to implement provisions of this bill;
             32          .    requires a county in which a new convention hotel is located to make an annual
             33      payment into the Stay Another Day and Bounce Back Account;
             34          .    creates the Stay Another Day and Bounce Back Fund as an expendable special
             35      revenue fund;
             36          .    creates the Hotel Impact Mitigation Fund as an expendable special revenue fund;
             37      and
             38          .    modifies the duties and authority of the Board of Tourism Development.
             39      Money Appropriated in this Bill:
             40          None
             41      Other Special Clauses:
             42          This bill provides effective dates.
             43      Utah Code Sections Affected:
             44      AMENDS:
             45           59-12-103 (Effective 07/01/14), as last amended by Laws of Utah 2013, Chapters 150
             46      and 227
             47           63I-1-263 , as last amended by Laws of Utah 2013, Chapters 28, 62, 101, 167, 250, and
             48      413
             49           63M-1-1403 , as renumbered and amended by Laws of Utah 2008, Chapter 382
             50      ENACTS:
             51           17-31-9 , Utah Code Annotated 1953
             52           59-7-616 , Utah Code Annotated 1953
             53           59-10-1110 , Utah Code Annotated 1953
             54           63M-1-3401 , Utah Code Annotated 1953
             55           63M-1-3402 , Utah Code Annotated 1953


             56           63M-1-3403 , Utah Code Annotated 1953
             57           63M-1-3404 , Utah Code Annotated 1953
             58           63M-1-3405 , Utah Code Annotated 1953
             59           63M-1-3406 , Utah Code Annotated 1953
             60           63M-1-3407 , Utah Code Annotated 1953
             61           63M-1-3408 , Utah Code Annotated 1953
             62           63M-1-3409 , Utah Code Annotated 1953
             63           63M-1-3410 , Utah Code Annotated 1953
             64           63M-1-3411 , Utah Code Annotated 1953
             65           63M-1-3412 , Utah Code Annotated 1953
             66           63M-1-3413 , Utah Code Annotated 1953
             67     
             68      Be it enacted by the Legislature of the state of Utah:
             69          Section 1. Section 17-31-9 is enacted to read:
             70          17-31-9. Payment to Stay Another Day and Bounce Back Fund and Hotel Impact
             71      Mitigation Fund.
             72          A county in which a qualified hotel, as defined in Section 63M-1-3402 , is located shall:
             73          (1) make an annual payment to the Division of Finance:
             74          (a) for deposit into the Stay Another Day and Bounce Back Fund, established in
             75      Section 63M-1-3411 ;
             76          (b) for any year in which the Governor's Office of Economic Development issues a tax
             77      credit certificate, as defined in Section 63M-1-3402 ; and
             78          (c) in the amount of 5% of the state portion, as defined in Section 63M-1-3402 ; and
             79          (2) make payments to the Division of Finance:
             80          (a) for deposit into the Hotel Impact Mitigation Fund, created in Section 63M-1-3412 ;
             81          (b) for each year described in Subsection 63M-1-3412 (5)(a)(ii) during which the
             82      balance of the Hotel Impact Mitigation Fund, defined in Section 63M-1-3412 , is less than
             83      $2,100,000 before any payment for that year under Subsection 63M-1-3412 (5)(a); and
             84          (c) in the amount of the difference between $2,100,000 and the balance of the Hotel
             85      Impact Mitigation Fund, defined in Section 63M-1-3412 , before any payment for that year
             86      under Subsection 63M-1-3412 (5)(a).


             87          Section 2. Section 59-7-616 is enacted to read:
             88          59-7-616. Refundable tax credit for certain business entities.
             89          (1) As used in this section:
             90          (a) "Office" means the Governor's Office of Economic Development.
             91          (b) "Pass-through entity" has the same meaning as defined in Section 59-10-1402 .
             92          (c) "Pass-through entity taxpayer" has the same meaning as defined in Section
             93      59-10-1402 .
             94          (d) "Tax credit certificate" has the same meaning as defined in Section 63M-1-3402 .
             95          (e) "Tax credit recipient" has the same meaning as defined in Section 63M-1-3402 .
             96          (2) (a) Subject to the other provisions of this section, a tax credit recipient that is a
             97      corporation may claim a refundable tax credit as provided in Subsection (3).
             98          (b) If the tax credit recipient is a pass-through entity, the pass-through entity shall pass
             99      through to one or more pass-through entity taxpayers of the pass-through entity, in accordance
             100      with Chapter 10, Part 14, Pass-Through Entities and Pass-Through Entity Taxpayers Act, a
             101      refundable tax credit that the tax credit recipient could otherwise claim under this section.
             102          (3) The amount of a tax credit is the amount listed as the tax credit amount on the tax
             103      credit certificate that the office issues to the tax credit recipient for the taxable year.
             104          (4) A tax credit recipient:
             105          (a) may claim or pass through a tax credit in a taxable year other than the taxable year
             106      during which the tax credit recipient has been issued a tax credit certificate; and
             107          (b) may not claim a tax credit under both this section and Section 59-7-1110 .
             108          (5) (a) In accordance with any rules prescribed by the commission under Subsection
             109      (5)(b), the commission shall:
             110          (i) make a refund to a tax credit recipient that claims a tax credit under this section if
             111      the amount of the tax credit exceeds the tax credit recipient's tax liability under this chapter;
             112      and
             113          (ii) transfer at least annually from the General Fund into the Education Fund an amount
             114      equal to the amount of tax credit claimed under this section.
             115          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             116      commission may make rules providing procedures for making:
             117          (i) a refund to a tax credit recipient or pass-through entity taxpayer as required by


             118      Subsection (5)(a)(i); or
             119          (ii) transfers from the General Fund into the Education Fund as required by Subsection
             120      (5)(a)(ii).
             121          Section 3. Section 59-10-1110 is enacted to read:
             122          59-10-1110. Refundable tax credit for certain business entities.
             123          (1) As used in this section:
             124          (a) "Office" means the Governor's Office of Economic Development.
             125          (b) "Pass-through entity" has the same meaning as defined in Section 59-10-1402 .
             126          (c) "Pass-through entity taxpayer" has the same meaning as defined in Section
             127      59-10-1402 .
             128          (d) "Tax credit certificate" has the same meaning as defined in Section 63M-1-3402 .
             129          (e) "Tax credit recipient" has the same meaning as defined in Section 63M-1-3402 .
             130          (2) (a) Subject to the other provisions of this section, a tax credit recipient may claim a
             131      refundable tax credit as provided in Subsection (3).
             132          (b) If the tax credit recipient is a pass-through entity, the pass-through entity shall pass
             133      through to one or more pass-through entity taxpayers of the pass-through entity, in accordance
             134      with Chapter 10, Part 14, Pass-Through Entities and Pass-Through Entity Taxpayers Act, a
             135      refundable tax credit that the tax credit recipient could otherwise claim under this section.
             136          (3) The amount of a tax credit is the amount listed as the tax credit amount on the tax
             137      credit certificate that the office issues to the tax credit recipient for the taxable year.
             138          (4) A tax credit recipient:
             139          (a) may claim or pass through a tax credit in a taxable year other than the taxable year
             140      during which the tax credit recipient has been issued a tax credit certificate; and
             141          (b) may not claim a tax credit under both this section and Section 59-7-616 .
             142          (5) (a) In accordance with any rules prescribed by the commission under Subsection
             143      (5)(b), the commission shall:
             144          (i) make a refund to a tax credit recipient that claims a tax credit under this section if
             145      the amount of the tax credit exceeds the tax credit recipient's tax liability under this chapter;
             146      and
             147          (ii) transfer at least annually from the General Fund into the Education Fund an amount
             148      equal to the amount of tax credit claimed under this section.


             149          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             150      commission may make rules providing procedures for making:
             151          (i) a refund to a tax credit recipient or pass-through entity taxpayer as required by
             152      Subsection (5)(a)(i); or
             153          (ii) transfers from the General Fund into the Education Fund as required by Subsection
             154      (5)(a)(ii).
             155          Section 4. Section 59-12-103 (Effective 07/01/14) is amended to read:
             156           59-12-103 (Effective 07/01/14). Sales and use tax base -- Rates -- Effective dates --
             157      Use of sales and use tax revenues.
             158          (1) A tax is imposed on the purchaser as provided in this part for amounts paid or
             159      charged for the following transactions:
             160          (a) retail sales of tangible personal property made within the state;
             161          (b) amounts paid for:
             162          (i) telecommunications service, other than mobile telecommunications service, that
             163      originates and terminates within the boundaries of this state;
             164          (ii) mobile telecommunications service that originates and terminates within the
             165      boundaries of one state only to the extent permitted by the Mobile Telecommunications
             166      Sourcing Act, 4 U.S.C. Sec. 116 et seq.; or
             167          (iii) an ancillary service associated with a:
             168          (A) telecommunications service described in Subsection (1)(b)(i); or
             169          (B) mobile telecommunications service described in Subsection (1)(b)(ii);
             170          (c) sales of the following for commercial use:
             171          (i) gas;
             172          (ii) electricity;
             173          (iii) heat;
             174          (iv) coal;
             175          (v) fuel oil; or
             176          (vi) other fuels;
             177          (d) sales of the following for residential use:
             178          (i) gas;
             179          (ii) electricity;


             180          (iii) heat;
             181          (iv) coal;
             182          (v) fuel oil; or
             183          (vi) other fuels;
             184          (e) sales of prepared food;
             185          (f) except as provided in Section 59-12-104 , amounts paid or charged as admission or
             186      user fees for theaters, movies, operas, museums, planetariums, shows of any type or nature,
             187      exhibitions, concerts, carnivals, amusement parks, amusement rides, circuses, menageries,
             188      fairs, races, contests, sporting events, dances, boxing matches, wrestling matches, closed circuit
             189      television broadcasts, billiard parlors, pool parlors, bowling lanes, golf, miniature golf, golf
             190      driving ranges, batting cages, skating rinks, ski lifts, ski runs, ski trails, snowmobile trails,
             191      tennis courts, swimming pools, water slides, river runs, jeep tours, boat tours, scenic cruises,
             192      horseback rides, sports activities, or any other amusement, entertainment, recreation,
             193      exhibition, cultural, or athletic activity;
             194          (g) amounts paid or charged for services for repairs or renovations of tangible personal
             195      property, unless Section 59-12-104 provides for an exemption from sales and use tax for:
             196          (i) the tangible personal property; and
             197          (ii) parts used in the repairs or renovations of the tangible personal property described
             198      in Subsection (1)(g)(i), whether or not any parts are actually used in the repairs or renovations
             199      of that tangible personal property;
             200          (h) except as provided in Subsection 59-12-104 (7), amounts paid or charged for
             201      assisted cleaning or washing of tangible personal property;
             202          (i) amounts paid or charged for tourist home, hotel, motel, or trailer court
             203      accommodations and services that are regularly rented for less than 30 consecutive days;
             204          (j) amounts paid or charged for laundry or dry cleaning services;
             205          (k) amounts paid or charged for leases or rentals of tangible personal property if within
             206      this state the tangible personal property is:
             207          (i) stored;
             208          (ii) used; or
             209          (iii) otherwise consumed;
             210          (l) amounts paid or charged for tangible personal property if within this state the


             211      tangible personal property is:
             212          (i) stored;
             213          (ii) used; or
             214          (iii) consumed; and
             215          (m) amounts paid or charged for a sale:
             216          (i) (A) of a product transferred electronically; or
             217          (B) of a repair or renovation of a product transferred electronically; and
             218          (ii) regardless of whether the sale provides:
             219          (A) a right of permanent use of the product; or
             220          (B) a right to use the product that is less than a permanent use, including a right:
             221          (I) for a definite or specified length of time; and
             222          (II) that terminates upon the occurrence of a condition.
             223          (2) (a) Except as provided in Subsections (2)(b) through (e), a state tax and a local tax
             224      is imposed on a transaction described in Subsection (1) equal to the sum of:
             225          (i) a state tax imposed on the transaction at a tax rate equal to the sum of:
             226          (A) 4.70%; and
             227          (B) (I) the tax rate the state imposes in accordance with Part 18, Additional State Sales
             228      and Use Tax Act, if the location of the transaction as determined under Sections 59-12-211
             229      through 59-12-215 is in a county in which the state imposes the tax under Part 18, Additional
             230      State Sales and Use Tax Act; and
             231          (II) the tax rate the state imposes in accordance with Part 20, Supplemental State Sales
             232      and Use Tax Act, if the location of the transaction as determined under Sections 59-12-211
             233      through 59-12-215 is in a city, town, or the unincorporated area of a county in which the state
             234      imposes the tax under Part 20, Supplemental State Sales and Use Tax Act; and
             235          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
             236      transaction under this chapter other than this part.
             237          (b) Except as provided in Subsection (2)(d) or (e), a state tax and a local tax is imposed
             238      on a transaction described in Subsection (1)(d) equal to the sum of:
             239          (i) a state tax imposed on the transaction at a tax rate of 2%; and
             240          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
             241      transaction under this chapter other than this part.


             242          (c) Except as provided in Subsection (2)(d) or (e), a state tax and a local tax is imposed
             243      on amounts paid or charged for food and food ingredients equal to the sum of:
             244          (i) a state tax imposed on the amounts paid or charged for food and food ingredients at
             245      a tax rate of 1.75%; and
             246          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
             247      amounts paid or charged for food and food ingredients under this chapter other than this part.
             248          (d) (i) For a bundled transaction that is attributable to food and food ingredients and
             249      tangible personal property other than food and food ingredients, a state tax and a local tax is
             250      imposed on the entire bundled transaction equal to the sum of:
             251          (A) a state tax imposed on the entire bundled transaction equal to the sum of:
             252          (I) the tax rate described in Subsection (2)(a)(i)(A); and
             253          (II) (Aa) the tax rate the state imposes in accordance with Part 18, Additional State
             254      Sales and Use Tax Act, if the location of the transaction as determined under Sections
             255      59-12-211 through 59-12-215 is in a county in which the state imposes the tax under Part 18,
             256      Additional State Sales and Use Tax Act; and
             257          (Bb) the tax rate the state imposes in accordance with Part 20, Supplemental State
             258      Sales and Use Tax Act, if the location of the transaction as determined under Sections
             259      59-12-211 through 59-12-215 is in a city, town, or the unincorporated area of a county in which
             260      the state imposes the tax under Part 20, Supplemental State Sales and Use Tax Act; and
             261          (B) a local tax imposed on the entire bundled transaction at the sum of the tax rates
             262      described in Subsection (2)(a)(ii).
             263          (ii) If an optional computer software maintenance contract is a bundled transaction that
             264      consists of taxable and nontaxable products that are not separately itemized on an invoice or
             265      similar billing document, the purchase of the optional computer software maintenance contract
             266      is 40% taxable under this chapter and 60% nontaxable under this chapter.
             267          (iii) Subject to Subsection (2)(d)(iv), for a bundled transaction other than a bundled
             268      transaction described in Subsection (2)(d)(i) or (ii):
             269          (A) if the sales price of the bundled transaction is attributable to tangible personal
             270      property, a product, or a service that is subject to taxation under this chapter and tangible
             271      personal property, a product, or service that is not subject to taxation under this chapter, the
             272      entire bundled transaction is subject to taxation under this chapter unless:


             273          (I) the seller is able to identify by reasonable and verifiable standards the tangible
             274      personal property, product, or service that is not subject to taxation under this chapter from the
             275      books and records the seller keeps in the seller's regular course of business; or
             276          (II) state or federal law provides otherwise; or
             277          (B) if the sales price of a bundled transaction is attributable to two or more items of
             278      tangible personal property, products, or services that are subject to taxation under this chapter
             279      at different rates, the entire bundled transaction is subject to taxation under this chapter at the
             280      higher tax rate unless:
             281          (I) the seller is able to identify by reasonable and verifiable standards the tangible
             282      personal property, product, or service that is subject to taxation under this chapter at the lower
             283      tax rate from the books and records the seller keeps in the seller's regular course of business; or
             284          (II) state or federal law provides otherwise.
             285          (iv) For purposes of Subsection (2)(d)(iii), books and records that a seller keeps in the
             286      seller's regular course of business includes books and records the seller keeps in the regular
             287      course of business for nontax purposes.
             288          (e) (i) Except as otherwise provided in this chapter and subject to Subsections (2)(e)(ii)
             289      and (iii), if a transaction consists of the sale, lease, or rental of tangible personal property, a
             290      product, or a service that is subject to taxation under this chapter, and the sale, lease, or rental
             291      of tangible personal property, other property, a product, or a service that is not subject to
             292      taxation under this chapter, the entire transaction is subject to taxation under this chapter unless
             293      the seller, at the time of the transaction:
             294          (A) separately states the portion of the transaction that is not subject to taxation under
             295      this chapter on an invoice, bill of sale, or similar document provided to the purchaser; or
             296          (B) is able to identify by reasonable and verifiable standards, from the books and
             297      records the seller keeps in the seller's regular course of business, the portion of the transaction
             298      that is not subject to taxation under this chapter.
             299          (ii) A purchaser and a seller may correct the taxability of a transaction if:
             300          (A) after the transaction occurs, the purchaser and the seller discover that the portion of
             301      the transaction that is not subject to taxation under this chapter was not separately stated on an
             302      invoice, bill of sale, or similar document provided to the purchaser because of an error or
             303      ignorance of the law; and


             304          (B) the seller is able to identify by reasonable and verifiable standards, from the books
             305      and records the seller keeps in the seller's regular course of business, the portion of the
             306      transaction that is not subject to taxation under this chapter.
             307          (iii) For purposes of Subsections (2)(e)(i) and (ii), books and records that a seller keeps
             308      in the seller's regular course of business includes books and records the seller keeps in the
             309      regular course of business for nontax purposes.
             310          (f) (i) If the sales price of a transaction is attributable to two or more items of tangible
             311      personal property, products, or services that are subject to taxation under this chapter at
             312      different rates, the entire purchase is subject to taxation under this chapter at the higher tax rate
             313      unless the seller, at the time of the transaction:
             314          (A) separately states the items subject to taxation under this chapter at each of the
             315      different rates on an invoice, bill of sale, or similar document provided to the purchaser; or
             316          (B) is able to identify by reasonable and verifiable standards the tangible personal
             317      property, product, or service that is subject to taxation under this chapter at the lower tax rate
             318      from the books and records the seller keeps in the seller's regular course of business.
             319          (ii) For purposes of Subsection (2)(f)(i), books and records that a seller keeps in the
             320      seller's regular course of business includes books and records the seller keeps in the regular
             321      course of business for nontax purposes.
             322          (g) Subject to Subsections (2)(h) and (i), a tax rate repeal or tax rate change for a tax
             323      rate imposed under the following shall take effect on the first day of a calendar quarter:
             324          (i) Subsection (2)(a)(i)(A);
             325          (ii) Subsection (2)(b)(i);
             326          (iii) Subsection (2)(c)(i); or
             327          (iv) Subsection (2)(d)(i)(A)(I).
             328          (h) (i) A tax rate increase takes effect on the first day of the first billing period that
             329      begins on or after the effective date of the tax rate increase if the billing period for the
             330      transaction begins before the effective date of a tax rate increase imposed under:
             331          (A) Subsection (2)(a)(i)(A);
             332          (B) Subsection (2)(b)(i);
             333          (C) Subsection (2)(c)(i); or
             334          (D) Subsection (2)(d)(i)(A)(I).


             335          (ii) The repeal of a tax or a tax rate decrease applies to a billing period if the billing
             336      statement for the billing period is rendered on or after the effective date of the repeal of the tax
             337      or the tax rate decrease imposed under:
             338          (A) Subsection (2)(a)(i)(A);
             339          (B) Subsection (2)(b)(i);
             340          (C) Subsection (2)(c)(i); or
             341          (D) Subsection (2)(d)(i)(A)(I).
             342          (i) (i) For a tax rate described in Subsection (2)(i)(ii), if a tax due on a catalogue sale is
             343      computed on the basis of sales and use tax rates published in the catalogue, a tax rate repeal or
             344      change in a tax rate takes effect:
             345          (A) on the first day of a calendar quarter; and
             346          (B) beginning 60 days after the effective date of the tax rate repeal or tax rate change.
             347          (ii) Subsection (2)(i)(i) applies to the tax rates described in the following:
             348          (A) Subsection (2)(a)(i)(A);
             349          (B) Subsection (2)(b)(i);
             350          (C) Subsection (2)(c)(i); or
             351          (D) Subsection (2)(d)(i)(A)(I).
             352          (iii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
             353      the commission may by rule define the term "catalogue sale."
             354          (3) (a) The following state taxes shall be deposited into the General Fund:
             355          (i) the tax imposed by Subsection (2)(a)(i)(A);
             356          (ii) the tax imposed by Subsection (2)(b)(i);
             357          (iii) the tax imposed by Subsection (2)(c)(i); or
             358          (iv) the tax imposed by Subsection (2)(d)(i)(A)(I).
             359          (b) The following local taxes shall be distributed to a county, city, or town as provided
             360      in this chapter:
             361          (i) the tax imposed by Subsection (2)(a)(ii);
             362          (ii) the tax imposed by Subsection (2)(b)(ii);
             363          (iii) the tax imposed by Subsection (2)(c)(ii); and
             364          (iv) the tax imposed by Subsection (2)(d)(i)(B).
             365          (4) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,


             366      2003, the lesser of the following amounts shall be expended as provided in Subsections (4)(b)
             367      through (g):
             368          (i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:
             369          (A) by a 1/16% tax rate on the transactions described in Subsection (1); and
             370          (B) for the fiscal year; or
             371          (ii) $17,500,000.
             372          (b) (i) For a fiscal year beginning on or after July 1, 2003, 14% of the amount
             373      described in Subsection (4)(a) shall be transferred each year as dedicated credits to the
             374      Department of Natural Resources to:
             375          (A) implement the measures described in Subsections 79-2-303 (3)(a) through (d) to
             376      protect sensitive plant and animal species; or
             377          (B) award grants, up to the amount authorized by the Legislature in an appropriations
             378      act, to political subdivisions of the state to implement the measures described in Subsections
             379      79-2-303 (3)(a) through (d) to protect sensitive plant and animal species.
             380          (ii) Money transferred to the Department of Natural Resources under Subsection
             381      (4)(b)(i) may not be used to assist the United States Fish and Wildlife Service or any other
             382      person to list or attempt to have listed a species as threatened or endangered under the
             383      Endangered Species Act of 1973, 16 U.S.C. Sec. 1531 et seq.
             384          (iii) At the end of each fiscal year:
             385          (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
             386      Conservation and Development Fund created in Section 73-10-24 ;
             387          (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
             388      Program Subaccount created in Section 73-10c-5 ; and
             389          (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
             390      Program Subaccount created in Section 73-10c-5 .
             391          (c) For a fiscal year beginning on or after July 1, 2003, 3% of the amount described in
             392      Subsection (4)(a) shall be deposited each year in the Agriculture Resource Development Fund
             393      created in Section 4-18-106 .
             394          (d) (i) For a fiscal year beginning on or after July 1, 2003, 1% of the amount described
             395      in Subsection (4)(a) shall be transferred each year as dedicated credits to the Division of Water
             396      Rights to cover the costs incurred in hiring legal and technical staff for the adjudication of


             397      water rights.
             398          (ii) At the end of each fiscal year:
             399          (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
             400      Conservation and Development Fund created in Section 73-10-24 ;
             401          (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
             402      Program Subaccount created in Section 73-10c-5 ; and
             403          (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
             404      Program Subaccount created in Section 73-10c-5 .
             405          (e) (i) For a fiscal year beginning on or after July 1, 2003, 41% of the amount described
             406      in Subsection (4)(a) shall be deposited in the Water Resources Conservation and Development
             407      Fund created in Section 73-10-24 for use by the Division of Water Resources.
             408          (ii) In addition to the uses allowed of the Water Resources Conservation and
             409      Development Fund under Section 73-10-24 , the Water Resources Conservation and
             410      Development Fund may also be used to:
             411          (A) conduct hydrologic and geotechnical investigations by the Division of Water
             412      Resources in a cooperative effort with other state, federal, or local entities, for the purpose of
             413      quantifying surface and ground water resources and describing the hydrologic systems of an
             414      area in sufficient detail so as to enable local and state resource managers to plan for and
             415      accommodate growth in water use without jeopardizing the resource;
             416          (B) fund state required dam safety improvements; and
             417          (C) protect the state's interest in interstate water compact allocations, including the
             418      hiring of technical and legal staff.
             419          (f) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount described
             420      in Subsection (4)(a) shall be deposited in the Utah Wastewater Loan Program Subaccount
             421      created in Section 73-10c-5 for use by the Water Quality Board to fund wastewater projects.
             422          (g) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount described
             423      in Subsection (4)(a) shall be deposited in the Drinking Water Loan Program Subaccount
             424      created in Section 73-10c-5 for use by the Division of Drinking Water to:
             425          (i) provide for the installation and repair of collection, treatment, storage, and
             426      distribution facilities for any public water system, as defined in Section 19-4-102 ;
             427          (ii) develop underground sources of water, including springs and wells; and


             428          (iii) develop surface water sources.
             429          (5) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
             430      2006, the difference between the following amounts shall be expended as provided in this
             431      Subsection (5), if that difference is greater than $1:
             432          (i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated for the
             433      fiscal year by a 1/16% tax rate on the transactions described in Subsection (1); and
             434          (ii) $17,500,000.
             435          (b) (i) The first $500,000 of the difference described in Subsection (5)(a) shall be:
             436          (A) transferred each fiscal year to the Department of Natural Resources as dedicated
             437      credits; and
             438          (B) expended by the Department of Natural Resources for watershed rehabilitation or
             439      restoration.
             440          (ii) At the end of each fiscal year, 100% of any unexpended dedicated credits described
             441      in Subsection (5)(b)(i) shall lapse to the Water Resources Conservation and Development Fund
             442      created in Section 73-10-24 .
             443          (c) (i) After making the transfer required by Subsection (5)(b)(i), $150,000 of the
             444      remaining difference described in Subsection (5)(a) shall be:
             445          (A) transferred each fiscal year to the Division of Water Resources as dedicated
             446      credits; and
             447          (B) expended by the Division of Water Resources for cloud-seeding projects
             448      authorized by Title 73, Chapter 15, Modification of Weather.
             449          (ii) At the end of each fiscal year, 100% of any unexpended dedicated credits described
             450      in Subsection (5)(c)(i) shall lapse to the Water Resources Conservation and Development Fund
             451      created in Section 73-10-24 .
             452          (d) After making the transfers required by Subsections (5)(b) and (c), 94% of the
             453      remaining difference described in Subsection (5)(a) shall be deposited into the Water
             454      Resources Conservation and Development Fund created in Section 73-10-24 for use by the
             455      Division of Water Resources for:
             456          (i) preconstruction costs:
             457          (A) as defined in Subsection 73-26-103 (6) for projects authorized by Title 73, Chapter
             458      26, Bear River Development Act; and


             459          (B) as defined in Subsection 73-28-103 (8) for the Lake Powell Pipeline project
             460      authorized by Title 73, Chapter 28, Lake Powell Pipeline Development Act;
             461          (ii) the cost of employing a civil engineer to oversee any project authorized by Title 73,
             462      Chapter 26, Bear River Development Act;
             463          (iii) the cost of employing a civil engineer to oversee the Lake Powell Pipeline project
             464      authorized by Title 73, Chapter 28, Lake Powell Pipeline Development Act; and
             465          (iv) other uses authorized under Sections 73-10-24 , 73-10-25.1 , 73-10-30 , and
             466      Subsection (4)(e)(ii) after funding the uses specified in Subsections (5)(d)(i) through (iii).
             467          (e) After making the transfers required by Subsections (5)(b) and (c) and subject to
             468      Subsection (5)(f), 6% of the remaining difference described in Subsection (5)(a) shall be
             469      transferred each year as dedicated credits to the Division of Water Rights to cover the costs
             470      incurred for employing additional technical staff for the administration of water rights.
             471          (f) At the end of each fiscal year, any unexpended dedicated credits described in
             472      Subsection (5)(e) over $150,000 lapse to the Water Resources Conservation and Development
             473      Fund created in Section 73-10-24 .
             474          (6) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
             475      2003, and for taxes listed under Subsection (3)(a), the amount of revenue generated by a 1/16%
             476      tax rate on the transactions described in Subsection (1) for the fiscal year shall be deposited in
             477      the Transportation Fund created by Section 72-2-102 .
             478          (7) Notwithstanding Subsection (3)(a), beginning on July 1, 2012, the Division of
             479      Finance shall deposit into the Transportation Investment Fund of 2005 created in Section
             480      72-2-124 a portion of the taxes listed under Subsection (3)(a) equal to the revenues generated
             481      by a 1/64% tax rate on the taxable transactions under Subsection (1).
             482          (8) (a) Notwithstanding Subsection (3)(a), in addition to the amounts deposited in
             483      Subsection (7), and subject to Subsection (8)(b), for a fiscal year beginning on or after July 1,
             484      2012, the Division of Finance shall deposit into the Transportation Investment Fund of 2005
             485      created by Section 72-2-124 :
             486          (i) a portion of the taxes listed under Subsection (3)(a) in an amount equal to 8.3% of
             487      the revenues collected from the following taxes, which represents a portion of the
             488      approximately 17% of sales and use tax revenues generated annually by the sales and use tax
             489      on vehicles and vehicle-related products:


             490          (A) the tax imposed by Subsection (2)(a)(i)(A);
             491          (B) the tax imposed by Subsection (2)(b)(i);
             492          (C) the tax imposed by Subsection (2)(c)(i); and
             493          (D) the tax imposed by Subsection (2)(d)(i)(A)(I); plus
             494          (ii) an amount equal to 30% of the growth in the amount of revenues collected in the
             495      current fiscal year from the sales and use taxes described in Subsections (8)(a)(i)(A) through
             496      (D) that exceeds the amount collected from the sales and use taxes described in Subsections
             497      (8)(a)(i)(A) through (D) in the 2010-11 fiscal year.
             498          (b) (i) Subject to Subsections (8)(b)(ii) and (iii), in any fiscal year that the portion of
             499      the sales and use taxes deposited under Subsection (8)(a) represents an amount that is a total
             500      lower percentage of the sales and use taxes described in Subsections (8)(a)(i)(A) through (D)
             501      generated in the current fiscal year than the total percentage of sales and use taxes deposited in
             502      the previous fiscal year, the Division of Finance shall deposit an amount under Subsection
             503      (8)(a) equal to the product of:
             504          (A) the total percentage of sales and use taxes deposited under Subsection (8)(a) in the
             505      previous fiscal year; and
             506          (B) the total sales and use tax revenue generated by the taxes described in Subsections
             507      (8)(a)(i)(A) through (D) in the current fiscal year.
             508          (ii) In any fiscal year in which the portion of the sales and use taxes deposited under
             509      Subsection (8)(a) would exceed 17% of the revenues collected from the sales and use taxes
             510      described in Subsections (8)(a)(i)(A) through (D) in the current fiscal year, the Division of
             511      Finance shall deposit 17% of the revenues collected from the sales and use taxes described in
             512      Subsections (8)(a)(i)(A) through (D) for the current fiscal year under Subsection (8)(a).
             513          (iii) In all subsequent fiscal years after a year in which 17% of the revenues collected
             514      from the sales and use taxes described in Subsections (8)(a)(i)(A) through (D) was deposited
             515      under Subsection (8)(a), the Division of Finance shall annually deposit 17% of the revenues
             516      collected from the sales and use taxes described in Subsections (8)(a)(i)(A) through (D) in the
             517      current fiscal year under Subsection (8)(a).
             518          (9) Notwithstanding Subsection (3)(a), and in addition to the amounts deposited under
             519      Subsections (7) and (8), for a fiscal year beginning on or after July 1, 2012, the Division of
             520      Finance shall annually deposit $90,000,000 of the revenues generated by the taxes listed under


             521      Subsection (3)(a) into the Transportation Investment Fund of 2005 created by Section
             522      72-2-124 .
             523          (10) Notwithstanding Subsection (3)(a), for each fiscal year beginning with fiscal year
             524      2009-10, $533,750 shall be deposited into the Qualified Emergency Food Agencies Fund
             525      created by Section 35A-8-1009 and expended as provided in Section 35A-8-1009 .
             526          (11) (a) Notwithstanding Subsection (3)(a), except as provided in Subsection (11)(b),
             527      and in addition to any amounts deposited under Subsections (7), (8), and (9), beginning on July
             528      1, 2012, the Division of Finance shall deposit into the Transportation Investment Fund of 2005
             529      created by Section 72-2-124 the amount of tax revenue generated by a .025% tax rate on the
             530      transactions described in Subsection (1).
             531          (b) For purposes of Subsection (11)(a), the Division of Finance may not deposit into
             532      the Transportation Investment Fund of 2005 any tax revenue generated by amounts paid or
             533      charged for food and food ingredients, except for tax revenue generated by a bundled
             534      transaction attributable to food and food ingredients and tangible personal property other than
             535      food and food ingredients described in Subsection (2)(d).
             536          (12) (a) Notwithstanding Subsection (3)(a), and except as provided in Subsection
             537      (12)(b), beginning on January 1, 2009, the Division of Finance shall deposit into the
             538      Transportation Fund created by Section 72-2-102 the amount of tax revenue generated by a
             539      .025% tax rate on the transactions described in Subsection (1) to be expended to address
             540      chokepoints in construction management.
             541          (b) For purposes of Subsection (12)(a), the Division of Finance may not deposit into
             542      the Transportation Fund any tax revenue generated by amounts paid or charged for food and
             543      food ingredients, except for tax revenue generated by a bundled transaction attributable to food
             544      and food ingredients and tangible personal property other than food and food ingredients
             545      described in Subsection (2)(d).
             546          (13) Notwithstanding Subsections (4) through (12), an amount required to be expended
             547      or deposited in accordance with Subsections (4) through (12) may not include an amount the
             548      Division of Finance deposits in accordance with Section 59-12-103.2 .
             549          (14) Notwithstanding Subsection (3)(a), beginning the second fiscal year after the
             550      fiscal year during which the Division of Finance receives notice under Subsection
             551      63M-1-3410 (3) that construction on a qualified hotel, as defined in Section 63M-1-3402 , has


             552      begun, the Division of Finance shall, for two consecutive fiscal years, annually deposit
             553      $1,900,000 of the revenue generated by the taxes listed under Subsection (3)(a) into the Hotel
             554      Impact Mitigation Fund, created in Section 63M-1-3412 .
             555          Section 5. Section 63I-1-263 is amended to read:
             556           63I-1-263. Repeal dates, Titles 63A to 63M.
             557          (1) Section 63A-4-204 , authorizing the Risk Management Fund to provide coverage to
             558      any public school district which chooses to participate, is repealed July 1, 2016.
             559          (2) Subsections 63A-5-104 (4)(d) and (e) are repealed on July 1, 2014.
             560          (3) Section 63A-5-603 , State Facility Energy Efficiency Fund, is repealed July 1, 2016.
             561          (4) Title 63C, Chapter 4a, Constitutional and Federalism Defense Act, is repealed July
             562      1, 2018.
             563          (5) Section 53B-24-402 , rural residency training program, is repealed July 1, 2015.
             564          (6) Title 63C, Chapter 13, Prison Relocation and Development Authority Act, is
             565      repealed July 1, 2014.
             566          (7) Title 63C, Chapter 14, Federal Funds Commission, is repealed July 1, 2018.
             567          (8) Subsection 63G-6a-1402 (7) authorizing certain transportation agencies to award a
             568      contract for a design-build transportation project in certain circumstances, is repealed July 1,
             569      2015.
             570          (9) Title 63H, Chapter 4, Heber Valley Historic Railroad Authority, is repealed July 1,
             571      2020.
             572          (10) The Resource Development Coordinating Committee, created in Section
             573      63J-4-501 , is repealed July 1, 2015.
             574          (11) Title 63M, Chapter 1, Part 4, Enterprise Zone Act, is repealed July 1, 2018.
             575          (12) (a) Title 63M, Chapter 1, Part 11, Recycling Market Development Zone Act, is
             576      repealed January 1, 2021.
             577          (b) Subject to Subsection (12)(c), Sections 59-7-610 and 59-10-1007 regarding tax
             578      credits for certain persons in recycling market development zones, are repealed for taxable
             579      years beginning on or after January 1, 2021.
             580          (c) A person may not claim a tax credit under Section 59-7-610 or 59-10-1007 :
             581          (i) for the purchase price of machinery or equipment described in Section 59-7-610 or
             582      59-10-1007 , if the machinery or equipment is purchased on or after January 1, 2021; or


             583          (ii) for an expenditure described in Subsection 59-7-610 (1)(b) or 59-10-1007 (1)(b), if
             584      the expenditure is made on or after January 1, 2021.
             585          (d) Notwithstanding Subsections (12)(b) and (c), a person may carry forward a tax
             586      credit in accordance with Section 59-7-610 or 59-10-1007 if:
             587          (i) the person is entitled to a tax credit under Section 59-7-610 or 59-10-1007 ; and
             588          (ii) (A) for the purchase price of machinery or equipment described in Section
             589      59-7-610 or 59-10-1007 , the machinery or equipment is purchased on or before December 31,
             590      2020; or
             591          (B) for an expenditure described in Subsection 59-7-610 (1)(b) or 59-10-1007 (1)(b), the
             592      expenditure is made on or before December 31, 2020.
             593          (13) Section 63M-1-3412 is repealed on July 1, 2021.
             594          [(13)] (14) (a) Section 63M-1-2507 , Health Care Compact is repealed on July 1, 2014.
             595          (b) (i) The Legislature shall, before reauthorizing the Health Care Compact:
             596          (A) direct the Health System Reform Task Force to evaluate the issues listed in
             597      Subsection [(13)] (14)(b)(ii), and by January 1, 2013, develop and recommend criteria for the
             598      Legislature to use to negotiate the terms of the Health Care Compact; and
             599          (B) prior to July 1, 2014, seek amendments to the Health Care Compact among the
             600      member states that the Legislature determines are appropriate after considering the
             601      recommendations of the Health System Reform Task Force.
             602          (ii) The Health System Reform Task Force shall evaluate and develop criteria for the
             603      Legislature regarding:
             604          (A) the impact of the Supreme Court ruling on the Affordable Care Act;
             605          (B) whether Utah is likely to be required to implement any part of the Affordable Care
             606      Act prior to negotiating the compact with the federal government, such as Medicaid expansion
             607      in 2014;
             608          (C) whether the compact's current funding formula, based on adjusted 2010 state
             609      expenditures, is the best formula for Utah and other state compact members to use for
             610      establishing the block grants from the federal government;
             611          (D) whether the compact's calculation of current year inflation adjustment factor,
             612      without consideration of the regional medical inflation rate in the current year, is adequate to
             613      protect the state from increased costs associated with administering a state based Medicaid and


             614      a state based Medicare program;
             615          (E) whether the state has the flexibility it needs under the compact to implement and
             616      fund state based initiatives, or whether the compact requires uniformity across member states
             617      that does not benefit Utah;
             618          (F) whether the state has the option under the compact to refuse to take over the federal
             619      Medicare program;
             620          (G) whether a state based Medicare program would provide better benefits to the
             621      elderly and disabled citizens of the state than a federally run Medicare program;
             622          (H) whether the state has the infrastructure necessary to implement and administer a
             623      better state based Medicare program;
             624          (I) whether the compact appropriately delegates policy decisions between the
             625      legislative and executive branches of government regarding the development and
             626      implementation of the compact with other states and the federal government; and
             627          (J) the impact on public health activities, including communicable disease surveillance
             628      and epidemiology.
             629          [(14)] (15) The Crime Victim Reparations and Assistance Board, created in Section
             630      63M-7-504 , is repealed July 1, 2017.
             631          [(15)] (16) Title 63M, Chapter 11, Utah Commission on Aging, is repealed July 1,
             632      2017.
             633          Section 6. Section 63M-1-1403 is amended to read:
             634           63M-1-1403. Board duties.
             635          (1) The board shall:
             636          (a) have authority to approve a tourism program of out-of-state advertising, marketing,
             637      and branding, taking into account the long-term strategic plan, economic trends, and
             638      opportunities for tourism development on a statewide basis, as a condition of the distribution of
             639      funds to the office from the Tourism Marketing Performance Account under Section
             640      63M-1-1406 ;
             641          (b) have authority to approve a tourism program of advertising, marketing, and
             642      branding of the state, taking into account the long-term strategic plan, economic trends, and
             643      opportunities for tourism development on a statewide basis, as a condition of the distribution of
             644      money to the office from the Stay Another Day and Bounce Back Account, created in Section


             645      63M-1-3411 ;
             646          [(b)] (c) review the office programs for coordination and integration of advertising and
             647      branding themes to be used whenever possible in all office programs, including recreational,
             648      scenic, historic, and tourist attractions of the state at large;
             649          [(c)] (d) encourage and assist in coordination of the activities of persons, firms,
             650      associations, corporations, civic groups, and governmental agencies engaged in publicizing,
             651      developing, and promoting the scenic attractions and tourist advantages of the state; and
             652          [(d)] (e) (i) advise the office in establishing a Cooperative Program from the money in
             653      the Tourism Marketing Performance Account under Section 63M-1-1406 for use by cities,
             654      counties, nonprofit destination marketing organizations, and similar public entities for the
             655      purpose of supplementing money committed by these entities for advertising and promotion to
             656      and for out-of-state residents to attract them to visit sites advertised by and attend events
             657      sponsored by these entities;
             658          (ii) the Cooperative Program shall be allocated 20% of the revenues appropriated to the
             659      office from the Tourism Marketing Performance Account;
             660          (iii) the office, with approval from the board, shall establish eligibility, advertising, and
             661      timing requirements and criteria and provide for an approval process for applications;
             662          (iv) an application from an eligible applicant to receive money from the Cooperative
             663      Program must be submitted on or before the appropriate date established by the office; and
             664          (v) Cooperative Program money not used in each fiscal year shall be returned to the
             665      Tourism Marketing Performance Account.
             666          (2) The board may:
             667          (a) solicit and accept contributions of money, services, and facilities from any other
             668      sources, public or private and shall use these funds for promoting the general interest of the
             669      state in tourism; and
             670          (b) establish subcommittees for the purpose of assisting the board in an advisory role
             671      only.
             672          (3) The board may not, except as otherwise provided in Subsection (1)(a), make policy
             673      related to the management or operation of the office.
             674          Section 7. Section 63M-1-3401 is enacted to read:
             675     
Part 34. New Convention Facility Development Incentive Act


             676          63M-1-3401. Title.
             677          This part is known as the "New Convention Facility Development Incentive Act."
             678          Section 8. Section 63M-1-3402 is enacted to read:
             679          63M-1-3402. Definitions.
             680          As used in this part:
             681          (1) "Agreement" means an agreement described in Section 63M-1-3403 .
             682          (2) "Commission" means the Utah State Tax Commission.
             683          (3) "Community development and renewal agency" has the same meaning as defined in
             684      Section 17C-1-102 .
             685          (4) "Eligibility period" means:
             686          (a) the period that:
             687          (i) begins the date construction of a qualified hotel begins, and
             688          (ii) ends:
             689          (A) for purposes of the state portion, 20 years after the date of initial occupancy of that
             690      qualified hotel; or
             691          (B) for purposes of the local portion, 25 years after the date of initial occupancy of that
             692      hotel; or
             693          (b) as provided in an agreement between the office and a qualified hotel owner or host
             694      local government, a period that:
             695          (i) begins no earlier than the date construction of a qualified hotel begins; and
             696          (ii) is shorter than the period described in Subsection (4)(a).
             697          (5) "Endorsement letter" means a letter:
             698          (a) from the county in which a qualified hotel is located or is proposed to be located;
             699          (b) signed by the county executive; and
             700          (c) expressing the county's endorsement of a developer of a qualified hotel as meeting
             701      all the county's criteria for receiving the county's endorsement.
             702          (6) "Host agency" means the community development and renewal agency of the host
             703      local government.
             704          (7) "Host local government" means:
             705          (a) a county that enters into an agreement with the office for the construction of a
             706      qualified hotel within the unincorporated area of the county; or


             707          (b) a city or town that enters into an agreement with the office for the construction of a
             708      qualified hotel within the boundary of the city or town.
             709          (8) "Hotel property" means a qualified hotel and any property that is included in the
             710      same development as the qualified hotel, including convention, exhibit, and meeting space,
             711      retail shops, restaurants, parking, and other ancillary facilities and amenities.
             712          (9) "Incremental property tax revenue" means the amount of property tax revenue
             713      generated from hotel property that equals the difference between:
             714          (a) the amount of property tax revenue generated in any tax year by all taxing entities
             715      from hotel property, using the current assessed value of the hotel property; and
             716          (b) the amount of property tax revenue that would be generated that tax year by all
             717      taxing entities from hotel property, using a base taxable value of the hotel property as
             718      established by the county in which the hotel property is located.
             719          (10) "Local portion" means:
             720          (a) the portion of new tax revenue that is not the state portion; and
             721          (b) incremental property tax revenue.
             722          (11) "New tax revenue" means:
             723          (a) all new revenue generated from a tax under Title 59, Chapter 12, Sales and Use Tax
             724      Act, on transactions occurring during the eligibility period as a result of the construction of the
             725      hotel property, including purchases made by a qualified hotel owner and its subcontractors;
             726          (b) all new revenue generated from a tax under Title 59, Chapter 12, Sales and Use Tax
             727      Act, on transactions occurring on hotel property during the eligibility period; and
             728          (c) all new revenue generated from a tax under Title 59, Chapter 12, Sales and Use Tax
             729      Act, on transactions by a third-party seller occurring other than on hotel property during the
             730      eligibility period, if:
             731          (i) the transaction is subject to a tax under Title 59, Chapter 12, Sales and Use Tax Act;
             732      and
             733          (ii) the third-party seller voluntarily consents to the disclosure of information to the
             734      office, as provided in Subsection 63M-1-3405 (1)(b)(i)(E).
             735          (12) "Public infrastructure" means:
             736          (a) water, sewer, storm drainage, electrical, telecommunications, and other similar
             737      systems and lines;


             738          (b) streets, roads, curbs, gutters, sidewalks, walkways, parking facilities, and public
             739      transportation facilities; and
             740          (c) other buildings, facilities, infrastructure, and improvements that benefit the public.
             741          (13) "Qualified hotel" means a full-service hotel development constructed in the state
             742      on or after July 1, 2014 that:
             743          (a) requires a significant capital investment;
             744          (b) includes at least 85 square feet of convention, exhibit, and meeting space per guest
             745      room; and
             746          (c) is located within 1,000 feet of a convention center that contains at least 500,000
             747      square feet of convention, exhibit, and meeting space.
             748          (14) "Qualified hotel owner" means a person who owns a qualified hotel.
             749          (15) "Review committee" means the independent review committee established under
             750      Section 63M-1-3404 .
             751          (16) "Significant capital investment" means an amount of at least $200,000,000.
             752          (17) "State portion" means the portion of new tax revenue that is attributable to a tax
             753      imposed under Subsection 59-12-103 (2)(a)(i)(A).
             754          (18) "Tax credit" means a tax credit under Section 59-7-616 or 59-10-1110 .
             755          (19) "Tax credit applicant" means a qualified hotel owner or host local government
             756      that:
             757          (a) has entered into an agreement with the office; and
             758          (b) pursuant to that agreement, submits an application for the issuance of a tax credit
             759      certificate.
             760          (20) "Tax credit certificate" means a certificate issued by the office that includes:
             761          (a) the name of the tax credit recipient;
             762          (b) the tax credit recipient's taxpayer identification number;
             763          (c) the amount of the tax credit authorized under this part for a taxable year; and
             764          (d) other information as determined by the office.
             765          (21) "Tax credit recipient" means a tax credit applicant that has been issued a tax credit
             766      certificate.
             767          (22) "Third-party seller" means a person who is a seller in a transaction:
             768          (a) occurring other than on hotel property;


             769          (b) that is:
             770          (i) the sale, rental, or lease of a room or of convention or exhibit space or other
             771      facilities on hotel property; or
             772          (ii) the sale of tangible personal property or a service on hotel property; and
             773          (c) that is subject to a tax under Title 59, Chapter 12, Sales and Use Tax Act.
             774          Section 9. Section 63M-1-3403 is enacted to read:
             775          63M-1-3403. Agreement for development of new convention hotel -- Tax credit
             776      authorized -- Agreement requirements.
             777          (1) The office, with the board's advice, may enter into an agreement with a qualified
             778      hotel owner or a host local government:
             779          (a) for the development of a qualified hotel; and
             780          (b) to authorize a tax credit:
             781          (i) to the qualified hotel owner or host local government, but not both;
             782          (ii) for a period not to exceed the eligibility period;
             783          (iii) if:
             784          (A) the county in which the qualified hotel is proposed to be located has issued an
             785      endorsement letter endorsing the qualified hotel owner; and
             786          (B) all applicable requirements of this part and the agreement are met; and
             787          (iv) that is reduced by $1,900,000 per year during the first two years of the eligibility
             788      period, as described in Subsection (2)(c);
             789          (2) An agreement shall:
             790          (a) specify the requirements for a tax credit recipient to qualify for a tax credit;
             791          (b) require compliance with the terms of the endorsement letter issued by the county in
             792      which the qualified hotel is proposed to be located;
             793          (c) require the amount of a tax credit listed in a tax credit certificate issued during the
             794      first two years of the eligibility period to be reduced by $1,900,000 per year;
             795          (d) with respect to the state portion of any tax credit that the tax credit recipient may
             796      receive during the eligibility period:
             797          (i) specify the maximum dollar amount that the tax credit recipient may receive,
             798      subject to a maximum of:
             799          (A) for any taxable year, the amount of the state portion of new tax revenue in that


             800      taxable year; and
             801          (B) $75,000,000 in the aggregate for any tax credit recipient during an eligibility
             802      period, calculated as though the two $1,900,000 reductions of the tax credit amount under
             803      Subsection (1)(b)(iv) had not occurred; and
             804          (ii) specify the maximum percentage of the state portion of new tax revenue that may
             805      be used in calculating a tax credit that a tax credit recipient may receive during the eligibility
             806      period for each taxable year and in the aggregate;
             807          (e) establish a shorter period of time than the period described in Subsection
             808      63M-1-3402 (5)(a) during which the tax credit recipient may claim a tax credit or that the host
             809      agency may be paid incremental property tax revenue, if the office and qualified hotel owner or
             810      host local government agree to a shorter period of time;
             811          (f) require the tax credit recipient to retain books and records supporting a claim for a
             812      tax credit as required by Section 59-1-1406 ;
             813          (g) allow the transfer of the agreement to a third party if the third party assumes all
             814      liabilities and responsibilities in the agreement;
             815          (h) limit the expenditure of funds received under a tax credit as provided in Section
             816      63M-1-3412 ; and
             817          (i) require the tax credit recipient to submit to any audit the office considers
             818      appropriate for verification of any tax credit or claimed tax credit.
             819          Section 10. Section 63M-1-3404 is enacted to read:
             820          63M-1-3404. Independent review committee.
             821          (1) In accordance with rules adopted by the office under Section 63M-1-3408 , the
             822      board shall establish a separate, independent review committee to:
             823          (a) review each initial tax credit application submitted under this part for compliance
             824      with the requirements of this part and the agreement; and
             825          (b) consult with the office, as provided in this part.
             826          (2) The review committee shall consist of:
             827          (a) one member appointed by the director to represent the office;
             828          (b) two members appointed by the mayor or chief executive of the county in which the
             829      qualified hotel is located or proposed to be located;
             830          (c) two members appointed by:


             831          (i) the mayor of the municipality in which the qualified hotel is located or proposed to
             832      be located, if the qualified hotel is located or proposed to be located within the boundary of a
             833      municipality; or
             834          (ii) the mayor or chief executive of the county in which the qualified hotel is located or
             835      proposed to be located, in addition to the two members appointed under Subsection (2)(b), if
             836      the qualified hotel is located or proposed to be located outside the boundary of a municipality;
             837          (d) an individual representing the hotel industry, appointed by the Utah Hotel and
             838      Lodging Association;
             839          (e) an individual representing the commercial development and construction industry,
             840      appointed by the president or chief executive officer of the local chamber of commerce;
             841          (f) an individual representing the convention and meeting planners industry, appointed
             842      by the president or chief executive officer of the local convention and visitors bureau ; and
             843          (g) one member appointed by the board.
             844          (3) (a) A member serves an indeterminate term and may be removed from the review
             845      committee by the appointing authority at any time.
             846          (b) A vacancy may be filled in the same manner as an appointment under Subsection
             847      (2).
             848          (4) A member of the review committee may not be paid for serving on the review
             849      committee and may not receive per diem or expense reimbursement.
             850          (5) The office shall provide any necessary staff support to the review committee.
             851          Section 11. Section 63M-1-3405 is enacted to read:
             852          63M-1-3405. Submission of written application for tax credit certificate --
             853      Disclosure of tax returns and other information -- Determination of tax credit
             854      application.
             855          (1) For each taxable year for which a tax credit applicant seeks the issuance of a tax
             856      credit certificate, the tax credit applicant shall submit to the office:
             857          (a) a written application for a tax credit certificate;
             858          (b) (i) for an application submitted by a qualified hotel owner:
             859          (A) a certification by the individual signing the application that the individual is duly
             860      authorized to sign the application on behalf of the qualified hotel owner;
             861          (B) documentation of the new tax revenue generated during the preceding year;


             862          (C) a document in which the qualified hotel owner expressly directs and authorizes the
             863      commission to disclose to the office the qualified hotel owner's tax returns and other
             864      information that would otherwise be subject to confidentiality under Section 59-1-403 or
             865      Section 6103, Internal Revenue Code;
             866          (D) a document in which the qualified hotel's direct vendors, lessees, or subcontractors,
             867      as applicable, expressly direct and authorize the commission to disclose to the office the tax
             868      returns and other information of those vendors, lessees, or subcontractors that would otherwise
             869      be subject to confidentiality under Section 59-1-403 or Section 6103, Internal Revenue Code;
             870          (E) a document in which a third-party seller expressly and voluntarily directs and
             871      authorizes the commission to disclose to the office the third-party seller's tax returns and other
             872      information that would otherwise be subject to confidentiality under Section 59-1-403 or
             873      Section 6103, Internal Revenue Code, and that shows the amount of tax under Title 59, Chapter
             874      12, Sales and Use Tax Act, that the third-party seller has collected in a transaction occurring
             875      other than on hotel property for the sale, rental, or lease of a room or of convention or exhibit
             876      space or other facilities on hotel property or for the sale of tangible personal property or a
             877      service on hotel property; and
             878          (F) documentation verifying that the qualified hotel owner is in compliance with the
             879      terms of the agreement;
             880          (ii) for an application submitted by a host local government, documentation of the new
             881      tax revenue generated during the preceding year;
             882          (c) if the host local government intends to assign the tax credit sought in the tax credit
             883      application to a community development and renewal agency:
             884          (i) the taxpayer identification number of the community development and renewal
             885      agency; and
             886          (ii) a document signed by the governing body members of the community development
             887      and renewal agency that expressly directs and authorizes the commission to disclose to the
             888      office the agency's tax returns and other information that would otherwise be subject to
             889      confidentiality under Section 59-1-403 or Section 6103, Internal Revenue Code; and
             890          (d) a statement provided by an independent certified public accountant, at the tax credit
             891      applicant's expense, attesting to the accuracy of the documentation of new tax revenue.
             892          (2) (a) The office shall submit to the commission the documents described in


             893      Subsections (1)(b)(i)(C) and (1)(c)(ii) authorizing disclosure of the tax returns and other
             894      information.
             895          (b) Upon receipt of the documents described in Subsection (2)(a), the commission shall
             896      provide the office the tax returns and other information described in those documents.
             897          (3) If the office determines that the tax returns and other information is inadequate to
             898      validate the issuance of a tax credit certificate, the office shall inform the tax credit applicant
             899      that the tax returns and other information were inadequate and request the tax credit applicant
             900      to submit additional documentation to validate the issuance of a tax credit certificate.
             901          (4) If the office determines that the returns and other information, including any
             902      additional documentation provided under Subsection (3), provide reasonable justification for
             903      the issuance of a tax credit certificate, the office shall:
             904          (a) determine the amount of the tax credit to be listed on the tax credit certificate;
             905          (b) issue a tax credit certificate to the tax credit applicant for the amount of that tax
             906      credit; and
             907          (c) provide a copy of the tax credit certificate to the commission.
             908          Section 12. Section 63M-1-3406 is enacted to read:
             909          63M-1-3406. Effect of tax credit certificate -- Retaining tax credit certificate.
             910          (1) A person may not claim a tax credit unless the office has issued the person a tax
             911      credit certificate.
             912          (2) A tax credit recipient may claim a tax credit in the amount of the tax credit stated in
             913      a tax credit certificate.
             914          (3) A tax credit recipient shall retain the tax credit certificate in accordance with the
             915      requirements of Section 59-1-1406 for retaining books and records.
             916          (4) The amount of a tax credit indicated on a tax credit certificate issued during the
             917      eligibility period may not exceed the amount of eligible new tax revenue generated during the
             918      taxable year preceding the taxable year for which the tax credit certificate is issued.
             919          Section 13. Section 63M-1-3407 is enacted to read:
             920          63M-1-3407. Assigning tax credit.
             921          (1) A host local government that enters into an agreement with the office may, by
             922      resolution, assign a tax credit to a community development and renewal agency, in accordance
             923      with rules adopted by the office.


             924          (2) A host local government that adopts a resolution assigning a tax credit under
             925      Subsection (1) shall provide a copy of the resolution to the office and the commission.
             926          Section 14. Section 63M-1-3408 is enacted to read:
             927          63M-1-3408. Payment of incremental property tax revenue.
             928          (1) (a) In accordance with rules adopted by the office, a host agency shall be paid
             929      incremental property tax revenue during the eligibility period.
             930          (b) Incremental property tax revenue may be used only for:
             931          (i) the purchase of or payment for, or reimbursement of a previous purchase of or
             932      payment for:
             933          (A) tangible personal property used in the construction of convention, exhibit, or
             934      meeting space on hotel property;
             935          (B) tangible personal property that, upon the construction of hotel property, becomes
             936      affixed to hotel property as real property; or
             937          (C) any labor and overhead costs associated with the construction described in
             938      Subsections (1)(b)(i)(A) and (B);
             939          (ii) public infrastructure; and
             940          (iii) other purposes as approved by the host agency.
             941          (2) A county that collects property tax on hotel property during the eligibility period
             942      shall pay and distribute to the host agency the incremental property tax revenue that the host
             943      agency is entitled to collect under Subsection (1), in the manner and at the time provided in
             944      Section 59-2-1365 .
             945          Section 15. Section 63M-1-3409 is enacted to read:
             946          63M-1-3409. Rulemaking authority -- Requirements for rules.
             947          (1) The office shall, in accordance with Title 63G, Chapter 3, Utah Administrative
             948      Rulemaking Act, make rules to carry out its responsibilities under this part and to implement
             949      the provisions of this part.
             950          (2) The rules the office makes under Subsection (1) shall:
             951          (a) establish, consistent with this part, the conditions that a tax credit applicant is
             952      required to meet to qualify for a tax credit;
             953          (b) require that a significant capital investment be made in the development of the
             954      hotel property;


             955          (c) require a tax credit applicant to meet all applicable requirements in order to receive
             956      a tax credit certificate;
             957          (d) require that a qualified hotel owner meet the county's requirements to receive an
             958      endorsement letter; and
             959          (e) provide for the establishment of an independent review committee, in accordance
             960      with the requirements of Section 63M-1-3404 .
             961          Section 16. Section 63M-1-3410 is enacted to read:
             962          63M-1-3410. Report by office -- Posting of report.
             963          (1) Before November 1 of each year, the office shall submit a written report to the
             964      Economic Development and Workforce Services Interim Committee of the Legislature, the
             965      Governor's Office of Management and Budget, and the Office of the Legislative Fiscal Analyst
             966      describing:
             967          (a) the state's success in attracting new conventions and corresponding new state
             968      revenue;
             969          (b) the estimated amount of tax credit commitments and the associated calculation
             970      made by the office and the period of time over which tax credits are expected to be paid;
             971          (c) the economic impact on the state related to generating new state revenue and
             972      providing tax credits; and
             973          (d) the estimated and actual costs and economic benefits of the tax credit commitments
             974      that the office made.
             975          (2) The office shall post the annual report under Subsection (1) on its website and on a
             976      state website.
             977          (3) Upon the commencement of the construction of a qualified hotel, the office shall
             978      send a written notice to the Division of Finance:
             979          (a) referring to the two annual deposits required under Subsection 59-12-103 (14); and
             980          (b) notifying the Division of Finance that construction on the qualified hotel has begun.
             981          Section 17. Section 63M-1-3411 is enacted to read:
             982          63M-1-3411. Stay Another Day and Bounce Back Fund.
             983          (1) As used in this section:
             984          (a) "Bounce back fund" means the Stay Another Day and Bounce Back Fund, created
             985      in Subsection (2).


             986          (b) "Tourism board" means the Board of Tourism Development created in Section
             987      63M-1-1401 .
             988          (2) There is created an expendable special revenue fund known as the Stay Another
             989      Day and Bounce Back Fund.
             990          (3) The bounce back fund shall:
             991          (a) be administered by the tourism board;
             992          (b) earn interest; and
             993          (c) be funded by:
             994          (i) annual payments under Section 17-31-9 from the county in which a qualified hotel
             995      is located;
             996          (ii) money transferred to the bounce back fund under Section 63M-1-3412 ; and
             997          (iii) any money that the Legislature chooses to appropriate to the bounce back fund.
             998          (4) Interest earned by the bounce back fund shall be deposited into the bounce back
             999      fund.
             1000          (5) The tourism board may use money in the bounce back fund to pay for a tourism
             1001      program of advertising, marketing, and branding of the state, taking into consideration the
             1002      long-term strategic plan, economic trends, and opportunities for tourism development on a
             1003      statewide basis.
             1004          Section 18. Section 63M-1-3412 is enacted to read:
             1005          63M-1-3412. Hotel Impact Mitigation Fund.
             1006          (1) As used in this section:
             1007          (a) "Affected hotel" means a hotel, built in the state built before July 1, 2014.
             1008          (b) "Direct losses" means affected hotels' losses of hotel guest business attributable to
             1009      the qualified hotel room supply being added to the market in the state.
             1010          (c) "Mitigation fund" means the Hotel Impact Mitigation Fund, created in Subsection
             1011      (2).
             1012          (2) There is created an expendable special revenue fund known as the Hotel Impact
             1013      Mitigation Fund.
             1014          (3) The mitigation fund shall:
             1015          (a) be administered by the board;
             1016          (b) earn interest; and


             1017          (c) be funded by:
             1018          (i) payments required to be deposited into the mitigation fund by the Division of
             1019      Finance under Subsection 59-12-103 (14);
             1020          (ii) money required to be deposited into the mitigation fund under Subsection
             1021      17-31-9 (2) by the county in which a qualified hotel is located; and
             1022          (iii) any money deposited into the mitigation fund under Subsection (6).
             1023          (4) Interest earned by the mitigation fund shall be deposited into the mitigation fund.
             1024          (5) (a) In accordance with office rules, the board shall annually pay up to $2,100,000 of
             1025      money in the mitigation fund:
             1026          (i) to affected hotels;
             1027          (ii) for four consecutive years, beginning 12 months after the date of initial occupancy
             1028      of the qualified hotel occurs; and
             1029          (iii) to mitigate direct losses.
             1030          (b) (i) If the amount the board pays under Subsection (5)(a) in any year is less than
             1031      $2,100,000, the board shall pay to the Stay Another Day and Bounce Back Fund, created in
             1032      Section 63M-1-3411 , the difference between $2,100,000 and the amount paid under Subsection
             1033      (5)(a).
             1034          (ii) The board shall make any required payment under Subsection (5)(b)(i) within 90
             1035      days after the end of the year for which a determination is made of how much the board is
             1036      required to pay to affected hotels under Subsection (5)(a).
             1037          (6) A host local government or qualified hotel owner may make payments to the
             1038      Division of Finance for deposit into the mitigation fund.
             1039          (7) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1040      office shall, in consultation with the Utah Hotel and Lodging Association and the county in
             1041      which the qualified hotel is located, make rules establishing procedures and criteria governing
             1042      payments under Subsection (5)(a) to affected hotels.
             1043          Section 19. Section 63M-1-3413 is enacted to read:
             1044          63M-1-3413. Authorized expenditures of tax credit money.
             1045          (1) A tax credit recipient may spend money received as a direct result of the state
             1046      portion of a tax credit only for the purchase of or payment for, or reimbursement of a previous
             1047      purchase of or payment for:


             1048          (a) tangible personal property used in the construction of convention, exhibit, or
             1049      meeting space on hotel property;
             1050          (b) tangible personal property that, upon the construction of hotel property, becomes
             1051      affixed to hotel property as real property; or
             1052          (c) any labor and overhead costs associated with the construction described in
             1053      Subsections (1)(a) and (b).
             1054          (2) A tax credit recipient may spend money received as a direct result of the local
             1055      portion of a tax credit only for:
             1056          (a) a purpose described in Subsection (1);
             1057          (b) public infrastructure; and
             1058          (c) other purposes as approved by the host agency.
             1059          Section 20. Effective date.
             1060          (1) Except as provided in Subsections (2) and (3), this bill takes effect May 13, 2014.
             1061          (2) Sections 59-7-616 and 59-10-1110 take effect for a taxable year beginning on or
             1062      after January 1, 2015.
             1063          (3) The amendments to Section 59-12-103 (Effective 07/01/14) take effect on July 1,
             1064      2014.


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