1     
TRANSPORTATION SALES TAX AMENDMENTS

2     
2019 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Kay J. Christofferson

5     
Senate Sponsor: ____________

6     

7     LONG TITLE
8     Committee Note:
9          The Transportation Interim Committee recommended this bill.
10     General Description:
11          This bill modifies sales and use tax provisions relating to certain sales and use tax
12     dedications.
13     Highlighted Provisions:
14          This bill:
15          ▸     modifies sales and use tax dedications for transportation funding; and
16          ▸     makes technical changes.
17     Money Appropriated in this Bill:
18          None
19     Other Special Clauses:
20          This bill provides a special effective date.
21     Utah Code Sections Affected:
22     AMENDS:
23          35A-8-308, as last amended by Laws of Utah 2017, Chapters 181 and 421
24          35A-8-309, as last amended by Laws of Utah 2017, Chapters 181 and 421
25          59-12-103, as amended by Statewide Initiative -- Proposition 3, Nov. 6, 2018
26          59-12-1201, as last amended by Laws of Utah 2016, Chapters 184 and 291
27          63N-2-510, as last amended by Laws of Utah 2015, Chapter 417 and renumbered and

28     amended by Laws of Utah 2015, Chapter 283
29          63N-2-512, as last amended by Laws of Utah 2016, Chapter 291
30     

31     Be it enacted by the Legislature of the state of Utah:
32          Section 1. Section 35A-8-308 is amended to read:
33          35A-8-308. Throughput Infrastructure Fund.
34          (1) There is created an enterprise fund known as the Throughput Infrastructure Fund.
35          (2) The fund consists of money generated from the following revenue sources:
36          (a) all amounts transferred to the fund under Subsection 59-12-103[(12)](11);
37          (b) any voluntary contributions received;
38          (c) appropriations made to the fund by the Legislature; and
39          (d) all amounts received from the repayment of loans made by the impact board under
40     Section 35A-8-309.
41          (3) The state treasurer shall:
42          (a) invest the money in the fund by following the procedures and requirements of Title
43     51, Chapter 7, State Money Management Act; and
44          (b) deposit all interest or other earnings derived from those investments into the fund.
45          Section 2. Section 35A-8-309 is amended to read:
46          35A-8-309. Throughput Infrastructure Fund administered by impact board --
47     Uses -- Review by board -- Annual report.
48          (1) The impact board shall:
49          (a) make grants and loans from the Throughput Infrastructure Fund created in Section
50     35A-8-308 for a throughput infrastructure project;
51          (b) use money transferred to the Throughput Infrastructure Fund in accordance with
52     Subsection 59-12-103[(12)](11) to provide a loan or grant to finance the cost of acquisition or
53     construction of a throughput infrastructure project to one or more local political subdivisions,
54     including a Utah interlocal entity created under Title 11, Chapter 13, Interlocal Cooperation
55     Act;
56          (c) administer the Throughput Infrastructure Fund in a manner that will keep a portion
57     of the fund revolving;
58          (d) determine provisions for repayment of loans;

59          (e) establish criteria for awarding loans and grants; and
60          (f) establish criteria for determining eligibility for assistance under this section.
61          (2) The cost of acquisition or construction of a throughput infrastructure project
62     includes amounts for working capital, reserves, transaction costs, and other amounts
63     determined by the impact board to be allocable to a throughput infrastructure project.
64          (3) The impact board may restructure or forgive all or part of a local political
65     subdivision's or interlocal entity's obligation to repay loans for extenuating circumstances.
66          (4) In order to receive assistance under this section, a local political subdivision or an
67     interlocal entity shall submit a formal application containing the information that the impact
68     board requires.
69          (5) (a) The impact board shall:
70          (i) review the proposed uses of the Throughput Infrastructure Fund for a loan or grant
71     before approving the loan or grant and may condition its approval on whatever assurances the
72     impact board considers necessary to ensure that proceeds of the loan or grant will be used in
73     accordance with this section;
74          (ii) ensure that each loan specifies terms for interest deferments, accruals, and
75     scheduled principal repayment; and
76          (iii) ensure that repayment terms are evidenced by bonds, notes, or other obligations of
77     the appropriate local political subdivision or interlocal entity issued to the impact board and
78     payable from the net revenues of a throughput infrastructure project.
79          (b) An instrument described in Subsection (5)(a)(iii) may be:
80          (i) non-recourse to the local political subdivision or interlocal entity; and
81          (ii) limited to a pledge of the net revenues from a throughput infrastructure project.
82          (6) (a) Subject to the restriction in Subsection (6)(b), the impact board shall allocate
83     from the Throughput Infrastructure Fund to the board those amounts that are appropriated by
84     the Legislature for the administration of the Throughput Infrastructure Fund.
85          (b) The amount described in Subsection (6)(a) may not exceed 2% of the annual
86     receipts to the fund.
87          (7) The board shall include in the annual written report described in Section
88     35A-1-109:
89          (a) the number and type of loans and grants made under this section; and

90          (b) a list of local political subdivisions or interlocal entities that received assistance
91     under this section.
92          Section 3. Section 59-12-103 is amended to read:
93          59-12-103. Sales and use tax base -- Rates -- Effective dates -- Use of sales and use
94     tax revenues.
95          (1) A tax is imposed on the purchaser as provided in this part on the purchase price or
96     sales price for amounts paid or charged for the following transactions:
97          (a) retail sales of tangible personal property made within the state;
98          (b) amounts paid for:
99          (i) telecommunications service, other than mobile telecommunications service, that
100     originates and terminates within the boundaries of this state;
101          (ii) mobile telecommunications service that originates and terminates within the
102     boundaries of one state only to the extent permitted by the Mobile Telecommunications
103     Sourcing Act, 4 U.S.C. Sec. 116 et seq.; or
104          (iii) an ancillary service associated with a:
105          (A) telecommunications service described in Subsection (1)(b)(i); or
106          (B) mobile telecommunications service described in Subsection (1)(b)(ii);
107          (c) sales of the following for commercial use:
108          (i) gas;
109          (ii) electricity;
110          (iii) heat;
111          (iv) coal;
112          (v) fuel oil; or
113          (vi) other fuels;
114          (d) sales of the following for residential use:
115          (i) gas;
116          (ii) electricity;
117          (iii) heat;
118          (iv) coal;
119          (v) fuel oil; or
120          (vi) other fuels;

121          (e) sales of prepared food;
122          (f) except as provided in Section 59-12-104, amounts paid or charged as admission or
123     user fees for theaters, movies, operas, museums, planetariums, shows of any type or nature,
124     exhibitions, concerts, carnivals, amusement parks, amusement rides, circuses, menageries,
125     fairs, races, contests, sporting events, dances, boxing matches, wrestling matches, closed circuit
126     television broadcasts, billiard parlors, pool parlors, bowling lanes, golf, miniature golf, golf
127     driving ranges, batting cages, skating rinks, ski lifts, ski runs, ski trails, snowmobile trails,
128     tennis courts, swimming pools, water slides, river runs, jeep tours, boat tours, scenic cruises,
129     horseback rides, sports activities, or any other amusement, entertainment, recreation,
130     exhibition, cultural, or athletic activity;
131          (g) amounts paid or charged for services for repairs or renovations of tangible personal
132     property, unless Section 59-12-104 provides for an exemption from sales and use tax for:
133          (i) the tangible personal property; and
134          (ii) parts used in the repairs or renovations of the tangible personal property described
135     in Subsection (1)(g)(i), regardless of whether:
136          (A) any parts are actually used in the repairs or renovations of that tangible personal
137     property; or
138          (B) the particular parts used in the repairs or renovations of that tangible personal
139     property are exempt from a tax under this chapter;
140          (h) except as provided in Subsection 59-12-104(7), amounts paid or charged for
141     assisted cleaning or washing of tangible personal property;
142          (i) amounts paid or charged for tourist home, hotel, motel, or trailer court
143     accommodations and services that are regularly rented for less than 30 consecutive days;
144          (j) amounts paid or charged for laundry or dry cleaning services;
145          (k) amounts paid or charged for leases or rentals of tangible personal property if within
146     this state the tangible personal property is:
147          (i) stored;
148          (ii) used; or
149          (iii) otherwise consumed;
150          (l) amounts paid or charged for tangible personal property if within this state the
151     tangible personal property is:

152          (i) stored;
153          (ii) used; or
154          (iii) consumed; and
155          (m) amounts paid or charged for a sale:
156          (i) (A) of a product transferred electronically; or
157          (B) of a repair or renovation of a product transferred electronically; and
158          (ii) regardless of whether the sale provides:
159          (A) a right of permanent use of the product; or
160          (B) a right to use the product that is less than a permanent use, including a right:
161          (I) for a definite or specified length of time; and
162          (II) that terminates upon the occurrence of a condition.
163          (2) (a) Except as provided in Subsections (2)(b) through (e), a state tax and a local tax
164     is imposed on a transaction described in Subsection (1) equal to the sum of:
165          (i) a state tax imposed on the transaction at a tax rate equal to the sum of:
166          (A) (I) through March 31, 2019, 4.70%; and
167          (II) beginning on April 1, 2019, 4.70% plus the rate specified in Subsection [(14)]
168     (13)(a); and
169          (B) (I) the tax rate the state imposes in accordance with Part 18, Additional State Sales
170     and Use Tax Act, if the location of the transaction as determined under Sections 59-12-211
171     through 59-12-215 is in a county in which the state imposes the tax under Part 18, Additional
172     State Sales and Use Tax Act; and
173          (II) the tax rate the state imposes in accordance with Part 20, Supplemental State Sales
174     and Use Tax Act, if the location of the transaction as determined under Sections 59-12-211
175     through 59-12-215 is in a city, town, or the unincorporated area of a county in which the state
176     imposes the tax under Part 20, Supplemental State Sales and Use Tax Act; and
177          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
178     transaction under this chapter other than this part.
179          (b) Except as provided in Subsection (2)(d) or (e), a state tax and a local tax is imposed
180     on a transaction described in Subsection (1)(d) equal to the sum of:
181          (i) a state tax imposed on the transaction at a tax rate of 2%; and
182          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the

183     transaction under this chapter other than this part.
184          (c) Except as provided in Subsection (2)(d) or (e), a state tax and a local tax is imposed
185     on amounts paid or charged for food and food ingredients equal to the sum of:
186          (i) a state tax imposed on the amounts paid or charged for food and food ingredients at
187     a tax rate of 1.75%; and
188          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
189     amounts paid or charged for food and food ingredients under this chapter other than this part.
190          (d) (i) For a bundled transaction that is attributable to food and food ingredients and
191     tangible personal property other than food and food ingredients, a state tax and a local tax is
192     imposed on the entire bundled transaction equal to the sum of:
193          (A) a state tax imposed on the entire bundled transaction equal to the sum of:
194          (I) the tax rate described in Subsection (2)(a)(i)(A); and
195          (II) (Aa) the tax rate the state imposes in accordance with Part 18, Additional State
196     Sales and Use Tax Act, if the location of the transaction as determined under Sections
197     59-12-211 through 59-12-215 is in a county in which the state imposes the tax under Part 18,
198     Additional State Sales and Use Tax Act; and
199          (Bb) the tax rate the state imposes in accordance with Part 20, Supplemental State
200     Sales and Use Tax Act, if the location of the transaction as determined under Sections
201     59-12-211 through 59-12-215 is in a city, town, or the unincorporated area of a county in which
202     the state imposes the tax under Part 20, Supplemental State Sales and Use Tax Act; and
203          (B) a local tax imposed on the entire bundled transaction at the sum of the tax rates
204     described in Subsection (2)(a)(ii).
205          (ii) If an optional computer software maintenance contract is a bundled transaction that
206     consists of taxable and nontaxable products that are not separately itemized on an invoice or
207     similar billing document, the purchase of the optional computer software maintenance contract
208     is 40% taxable under this chapter and 60% nontaxable under this chapter.
209          (iii) Subject to Subsection (2)(d)(iv), for a bundled transaction other than a bundled
210     transaction described in Subsection (2)(d)(i) or (ii):
211          (A) if the sales price of the bundled transaction is attributable to tangible personal
212     property, a product, or a service that is subject to taxation under this chapter and tangible
213     personal property, a product, or service that is not subject to taxation under this chapter, the

214     entire bundled transaction is subject to taxation under this chapter unless:
215          (I) the seller is able to identify by reasonable and verifiable standards the tangible
216     personal property, product, or service that is not subject to taxation under this chapter from the
217     books and records the seller keeps in the seller's regular course of business; or
218          (II) state or federal law provides otherwise; or
219          (B) if the sales price of a bundled transaction is attributable to two or more items of
220     tangible personal property, products, or services that are subject to taxation under this chapter
221     at different rates, the entire bundled transaction is subject to taxation under this chapter at the
222     higher tax rate unless:
223          (I) the seller is able to identify by reasonable and verifiable standards the tangible
224     personal property, product, or service that is subject to taxation under this chapter at the lower
225     tax rate from the books and records the seller keeps in the seller's regular course of business; or
226          (II) state or federal law provides otherwise.
227          (iv) For purposes of Subsection (2)(d)(iii), books and records that a seller keeps in the
228     seller's regular course of business includes books and records the seller keeps in the regular
229     course of business for nontax purposes.
230          (e) (i) Except as otherwise provided in this chapter and subject to Subsections (2)(e)(ii)
231     and (iii), if a transaction consists of the sale, lease, or rental of tangible personal property, a
232     product, or a service that is subject to taxation under this chapter, and the sale, lease, or rental
233     of tangible personal property, other property, a product, or a service that is not subject to
234     taxation under this chapter, the entire transaction is subject to taxation under this chapter unless
235     the seller, at the time of the transaction:
236          (A) separately states the portion of the transaction that is not subject to taxation under
237     this chapter on an invoice, bill of sale, or similar document provided to the purchaser; or
238          (B) is able to identify by reasonable and verifiable standards, from the books and
239     records the seller keeps in the seller's regular course of business, the portion of the transaction
240     that is not subject to taxation under this chapter.
241          (ii) A purchaser and a seller may correct the taxability of a transaction if:
242          (A) after the transaction occurs, the purchaser and the seller discover that the portion of
243     the transaction that is not subject to taxation under this chapter was not separately stated on an
244     invoice, bill of sale, or similar document provided to the purchaser because of an error or

245     ignorance of the law; and
246          (B) the seller is able to identify by reasonable and verifiable standards, from the books
247     and records the seller keeps in the seller's regular course of business, the portion of the
248     transaction that is not subject to taxation under this chapter.
249          (iii) For purposes of Subsections (2)(e)(i) and (ii), books and records that a seller keeps
250     in the seller's regular course of business includes books and records the seller keeps in the
251     regular course of business for nontax purposes.
252          (f) (i) If the sales price of a transaction is attributable to two or more items of tangible
253     personal property, products, or services that are subject to taxation under this chapter at
254     different rates, the entire purchase is subject to taxation under this chapter at the higher tax rate
255     unless the seller, at the time of the transaction:
256          (A) separately states the items subject to taxation under this chapter at each of the
257     different rates on an invoice, bill of sale, or similar document provided to the purchaser; or
258          (B) is able to identify by reasonable and verifiable standards the tangible personal
259     property, product, or service that is subject to taxation under this chapter at the lower tax rate
260     from the books and records the seller keeps in the seller's regular course of business.
261          (ii) For purposes of Subsection (2)(f)(i), books and records that a seller keeps in the
262     seller's regular course of business includes books and records the seller keeps in the regular
263     course of business for nontax purposes.
264          (g) Subject to Subsections (2)(h) and (i), a tax rate repeal or tax rate change for a tax
265     rate imposed under the following shall take effect on the first day of a calendar quarter:
266          (i) Subsection (2)(a)(i)(A);
267          (ii) Subsection (2)(b)(i);
268          (iii) Subsection (2)(c)(i); or
269          (iv) Subsection (2)(d)(i)(A)(I).
270          (h) (i) A tax rate increase takes effect on the first day of the first billing period that
271     begins on or after the effective date of the tax rate increase if the billing period for the
272     transaction begins before the effective date of a tax rate increase imposed under:
273          (A) Subsection (2)(a)(i)(A);
274          (B) Subsection (2)(b)(i);
275          (C) Subsection (2)(c)(i); or

276          (D) Subsection (2)(d)(i)(A)(I).
277          (ii) The repeal of a tax or a tax rate decrease applies to a billing period if the billing
278     statement for the billing period is rendered on or after the effective date of the repeal of the tax
279     or the tax rate decrease imposed under:
280          (A) Subsection (2)(a)(i)(A);
281          (B) Subsection (2)(b)(i);
282          (C) Subsection (2)(c)(i); or
283          (D) Subsection (2)(d)(i)(A)(I).
284          (i) (i) For a tax rate described in Subsection (2)(i)(ii), if a tax due on a catalogue sale is
285     computed on the basis of sales and use tax rates published in the catalogue, a tax rate repeal or
286     change in a tax rate takes effect:
287          (A) on the first day of a calendar quarter; and
288          (B) beginning 60 days after the effective date of the tax rate repeal or tax rate change.
289          (ii) Subsection (2)(i)(i) applies to the tax rates described in the following:
290          (A) Subsection (2)(a)(i)(A);
291          (B) Subsection (2)(b)(i);
292          (C) Subsection (2)(c)(i); or
293          (D) Subsection (2)(d)(i)(A)(I).
294          (iii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
295     the commission may by rule define the term "catalogue sale."
296          (3) (a) The following state taxes shall be deposited into the General Fund:
297          (i) the tax imposed by Subsection (2)(a)(i)(A);
298          (ii) the tax imposed by Subsection (2)(b)(i);
299          (iii) the tax imposed by Subsection (2)(c)(i); or
300          (iv) the tax imposed by Subsection (2)(d)(i)(A)(I).
301          (b) The following local taxes shall be distributed to a county, city, or town as provided
302     in this chapter:
303          (i) the tax imposed by Subsection (2)(a)(ii);
304          (ii) the tax imposed by Subsection (2)(b)(ii);
305          (iii) the tax imposed by Subsection (2)(c)(ii); and
306          (iv) the tax imposed by Subsection (2)(d)(i)(B).

307          (4) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
308     2003, the lesser of the following amounts shall be expended as provided in Subsections (4)(b)
309     through (g):
310          (i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:
311          (A) by a 1/16% tax rate on the transactions described in Subsection (1); and
312          (B) for the fiscal year; or
313          (ii) $17,500,000.
314          (b) (i) For a fiscal year beginning on or after July 1, 2003, 14% of the amount
315     described in Subsection (4)(a) shall be transferred each year as dedicated credits to the
316     Department of Natural Resources to:
317          (A) implement the measures described in Subsections 79-2-303(3)(a) through (d) to
318     protect sensitive plant and animal species; or
319          (B) award grants, up to the amount authorized by the Legislature in an appropriations
320     act, to political subdivisions of the state to implement the measures described in Subsections
321     79-2-303(3)(a) through (d) to protect sensitive plant and animal species.
322          (ii) Money transferred to the Department of Natural Resources under Subsection
323     (4)(b)(i) may not be used to assist the United States Fish and Wildlife Service or any other
324     person to list or attempt to have listed a species as threatened or endangered under the
325     Endangered Species Act of 1973, 16 U.S.C. Sec. 1531 et seq.
326          (iii) At the end of each fiscal year:
327          (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
328     Conservation and Development Fund created in Section 73-10-24;
329          (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
330     Program Subaccount created in Section 73-10c-5; and
331          (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
332     Program Subaccount created in Section 73-10c-5.
333          (c) For a fiscal year beginning on or after July 1, 2003, 3% of the amount described in
334     Subsection (4)(a) shall be deposited each year in the Agriculture Resource Development Fund
335     created in Section 4-18-106.
336          (d) (i) For a fiscal year beginning on or after July 1, 2003, 1% of the amount described
337     in Subsection (4)(a) shall be transferred each year as dedicated credits to the Division of Water

338     Rights to cover the costs incurred in hiring legal and technical staff for the adjudication of
339     water rights.
340          (ii) At the end of each fiscal year:
341          (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
342     Conservation and Development Fund created in Section 73-10-24;
343          (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
344     Program Subaccount created in Section 73-10c-5; and
345          (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
346     Program Subaccount created in Section 73-10c-5.
347          (e) (i) For a fiscal year beginning on or after July 1, 2003, 41% of the amount described
348     in Subsection (4)(a) shall be deposited into the Water Resources Conservation and
349     Development Fund created in Section 73-10-24 for use by the Division of Water Resources.
350          (ii) In addition to the uses allowed of the Water Resources Conservation and
351     Development Fund under Section 73-10-24, the Water Resources Conservation and
352     Development Fund may also be used to:
353          (A) conduct hydrologic and geotechnical investigations by the Division of Water
354     Resources in a cooperative effort with other state, federal, or local entities, for the purpose of
355     quantifying surface and ground water resources and describing the hydrologic systems of an
356     area in sufficient detail so as to enable local and state resource managers to plan for and
357     accommodate growth in water use without jeopardizing the resource;
358          (B) fund state required dam safety improvements; and
359          (C) protect the state's interest in interstate water compact allocations, including the
360     hiring of technical and legal staff.
361          (f) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount described
362     in Subsection (4)(a) shall be deposited into the Utah Wastewater Loan Program Subaccount
363     created in Section 73-10c-5 for use by the Water Quality Board to fund wastewater projects.
364          (g) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount described
365     in Subsection (4)(a) shall be deposited into the Drinking Water Loan Program Subaccount
366     created in Section 73-10c-5 for use by the Division of Drinking Water to:
367          (i) provide for the installation and repair of collection, treatment, storage, and
368     distribution facilities for any public water system, as defined in Section 19-4-102;

369          (ii) develop underground sources of water, including springs and wells; and
370          (iii) develop surface water sources.
371          (5) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
372     2006, the difference between the following amounts shall be expended as provided in this
373     Subsection (5), if that difference is greater than $1:
374          (i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated for the
375     fiscal year by a 1/16% tax rate on the transactions described in Subsection (1); and
376          (ii) $17,500,000.
377          (b) (i) The first $500,000 of the difference described in Subsection (5)(a) shall be:
378          (A) transferred each fiscal year to the Department of Natural Resources as dedicated
379     credits; and
380          (B) expended by the Department of Natural Resources for watershed rehabilitation or
381     restoration.
382          (ii) At the end of each fiscal year, 100% of any unexpended dedicated credits described
383     in Subsection (5)(b)(i) shall lapse to the Water Resources Conservation and Development Fund
384     created in Section 73-10-24.
385          (c) (i) After making the transfer required by Subsection (5)(b)(i), $150,000 of the
386     remaining difference described in Subsection (5)(a) shall be:
387          (A) transferred each fiscal year to the Division of Water Resources as dedicated
388     credits; and
389          (B) expended by the Division of Water Resources for cloud-seeding projects
390     authorized by Title 73, Chapter 15, Modification of Weather.
391          (ii) At the end of each fiscal year, 100% of any unexpended dedicated credits described
392     in Subsection (5)(c)(i) shall lapse to the Water Resources Conservation and Development Fund
393     created in Section 73-10-24.
394          (d) After making the transfers required by Subsections (5)(b) and (c), 85% of the
395     remaining difference described in Subsection (5)(a) shall be deposited into the Water
396     Resources Conservation and Development Fund created in Section 73-10-24 for use by the
397     Division of Water Resources for:
398          (i) preconstruction costs:
399          (A) as defined in Subsection 73-26-103(6) for projects authorized by Title 73, Chapter

400     26, Bear River Development Act; and
401          (B) as defined in Subsection 73-28-103(8) for the Lake Powell Pipeline project
402     authorized by Title 73, Chapter 28, Lake Powell Pipeline Development Act;
403          (ii) the cost of employing a civil engineer to oversee any project authorized by Title 73,
404     Chapter 26, Bear River Development Act;
405          (iii) the cost of employing a civil engineer to oversee the Lake Powell Pipeline project
406     authorized by Title 73, Chapter 28, Lake Powell Pipeline Development Act; and
407          (iv) other uses authorized under Sections 73-10-24, 73-10-25.1, and 73-10-30, and
408     Subsection (4)(e)(ii) after funding the uses specified in Subsections (5)(d)(i) through (iii).
409          (e) After making the transfers required by Subsections (5)(b) and (c) and subject to
410     Subsection (5)(f), 15% of the remaining difference described in Subsection (5)(a) shall be
411     transferred each year as dedicated credits to the Division of Water Rights to cover the costs
412     incurred for employing additional technical staff for the administration of water rights.
413          (f) At the end of each fiscal year, any unexpended dedicated credits described in
414     Subsection (5)(e) over $150,000 lapse to the Water Resources Conservation and Development
415     Fund created in Section 73-10-24.
416          (6) Notwithstanding Subsection (3)(a) and for taxes listed under Subsection (3)(a), the
417     amount of revenue generated by a 1/16% tax rate on the transactions described in Subsection
418     (1) for the fiscal year shall be deposited as follows:
419          [(a) for fiscal year 2016-17 only, 100% of the revenue described in this Subsection (6)
420     shall be deposited into the Transportation Investment Fund of 2005 created by Section
421     72-2-124;]
422          [(b) for fiscal year 2017-18 only:]
423          [(i) 80% of the revenue described in this Subsection (6) shall be deposited into the
424     Transportation Investment Fund of 2005 created by Section 72-2-124; and]
425          [(ii) 20% of the revenue described in this Subsection (6) shall be deposited into the
426     Water Infrastructure Restricted Account created by Section 73-10g-103;]
427          [(c) for fiscal year 2018-19 only:]
428          [(i) 60% of the revenue described in this Subsection (6) shall be deposited into the
429     Transportation Investment Fund of 2005 created by Section 72-2-124; and]
430          [(ii) 40% of the revenue described in this Subsection (6) shall be deposited into the

431     Water Infrastructure Restricted Account created by Section 73-10g-103;]
432          [(d)] (a) for fiscal year 2019-20 only:
433          (i) 40% of the revenue described in this Subsection (6) shall be deposited into the
434     Transportation Investment Fund of 2005 created by Section 72-2-124; and
435          (ii) 60% of the revenue described in this Subsection (6) shall be deposited into the
436     Water Infrastructure Restricted Account created by Section 73-10g-103;
437          [(e)] (b) for fiscal year 2020-21 only:
438          (i) 20% of the revenue described in this Subsection (6) shall be deposited into the
439     Transportation Investment Fund of 2005 created by Section 72-2-124; and
440          (ii) 80% of the revenue described in this Subsection (6) shall be deposited into the
441     Water Infrastructure Restricted Account created by Section 73-10g-103; and
442          [(f)] (c) for a fiscal year beginning on or after July 1, 2021, 100% of the revenue
443     described in this Subsection (6) shall be deposited into the Water Infrastructure Restricted
444     Account created by Section 73-10g-103.
445          (7) (a) Notwithstanding Subsection (3)(a), in addition to the amounts deposited in
446     Subsection (6), and subject to Subsection (7)(b), for a fiscal year beginning on or after July 1,
447     [2012] 2019, the Division of Finance shall deposit into the Transportation Investment Fund of
448     2005 created by Section 72-2-124[: (i)] a portion of the taxes listed under Subsection (3)(a) in
449     an amount equal to [8.3%] 20.68% of the revenues collected from the following taxes[, which
450     represents a portion of the approximately 17% of sales and use tax revenues generated annually
451     by the sales and use tax on vehicles and vehicle-related products]:
452          [(A)] (i) the tax imposed by Subsection (2)(a)(i)(A) at a 4.7% rate;
453          [(B)] (ii) the tax imposed by Subsection (2)(b)(i);
454          [(C)] (iii) the tax imposed by Subsection (2)(c)(i); and
455          [(D)] (iv) the tax imposed by Subsection (2)(d)(i)(A)(I)[; plus].
456          [(ii) an amount equal to 30% of the growth in the amount of revenues collected in the
457     current fiscal year from the sales and use taxes described in Subsections (7)(a)(i)(A) through
458     (D) that exceeds the amount collected from the sales and use taxes described in Subsections
459     (7)(a)(i)(A) through (D) in the 2010-11 fiscal year.]
460          [(b) (i) Subject to Subsections (7)(b)(ii) and (iii), in any fiscal year that the portion of
461     the sales and use taxes deposited under Subsection (7)(a) represents an amount that is a total

462     lower percentage of the sales and use taxes described in Subsections (7)(a)(i)(A) through (D)
463     generated in the current fiscal year than the total percentage of sales and use taxes deposited in
464     the previous fiscal year, the Division of Finance shall deposit an amount under Subsection
465     (7)(a) equal to the product of:]
466          [(A) the total percentage of sales and use taxes deposited under Subsection (7)(a) in the
467     previous fiscal year; and]
468          [(B) the total sales and use tax revenue generated by the taxes described in Subsections
469     (7)(a)(i)(A) through (D) in the current fiscal year.]
470          [(ii) In any fiscal year in which the portion of the sales and use taxes deposited under
471     Subsection (7)(a) would exceed 17% of the revenues collected from the sales and use taxes
472     described in Subsections (7)(a)(i)(A) through (D) in the current fiscal year, the Division of
473     Finance shall deposit 17% of the revenues collected from the sales and use taxes described in
474     Subsections (7)(a)(i)(A) through (D) for the current fiscal year under Subsection (7)(a).]
475          [(iii) In all subsequent fiscal years after a year in which 17% of the revenues collected
476     from the sales and use taxes described in Subsections (7)(a)(i)(A) through (D) was deposited
477     under Subsection (7)(a), the Division of Finance shall annually deposit 17% of the revenues
478     collected from the sales and use taxes described in Subsections (7)(a)(i)(A) through (D) in the
479     current fiscal year under Subsection (7)(a).]
480          [(8) (a) Notwithstanding Subsection (3)(a), and in addition to the amounts deposited
481     under Subsections (6) and (7), for the 2016-17 fiscal year only, the Division of Finance shall
482     deposit $64,000,000 of the revenues generated by the taxes listed under Subsection (3)(a) into
483     the Transportation Investment Fund of 2005 created by Section 72-2-124.]
484          [(b) Notwithstanding Subsection (3)(a), and in addition to the amounts deposited under
485     Subsections (6) and (7), for the 2017-18 fiscal year only, the Division of Finance shall deposit
486     $63,000,000 of the revenues generated by the taxes listed under Subsection (3)(a) into the
487     Transportation Investment Fund of 2005 created by Section 72-2-124.]
488          [(c) (i) Notwithstanding Subsection (3)(a), in addition to the amounts deposited under
489     Subsections (6) and (7), and subject to Subsection (8)(c)(ii), for a fiscal year beginning on or
490     after July 1, 2018, the commission shall annually deposit into the Transportation Investment
491     Fund of 2005 created by Section 72-2-124 a portion of the taxes listed under Subsection (3)(a)
492     in an amount equal to 3.68% of the revenues collected from the following taxes:]

493          [(A) the tax imposed by Subsection (2)(a)(i)(A) at a 4.7% rate;]
494          [(B) the tax imposed by Subsection (2)(b)(i);]
495          [(C) the tax imposed by Subsection (2)(c)(i); and]
496          [(D) the tax imposed by Subsection (2)(d)(i)(A)(I).]
497          [(ii)] (b) For a fiscal year beginning on or after July 1, 2019, the commission shall
498     annually reduce the deposit into the Transportation Investment Fund of 2005 under Subsection
499     [(8)(c)(i)] (7)(a) by an amount that is equal to 35% of the amount of revenue generated in the
500     current fiscal year by the portion of the tax imposed on motor and special fuel that is sold,
501     used, or received for sale or use in this state that exceeds 29.4 cents per gallon.
502          [(iii)] (c) The commission shall annually deposit the amount described in Subsection
503     [(8)(c)(ii)] (7)(b) into the Transit and Transportation Investment Fund created in Section
504     72-2-124.
505          [(9)] (8) Notwithstanding Subsection (3)(a), for each fiscal year beginning with fiscal
506     year 2009-10, $533,750 shall be deposited into the Qualified Emergency Food Agencies Fund
507     created by Section 35A-8-1009 and expended as provided in Section 35A-8-1009.
508          [(10) (a) Notwithstanding Subsection (3)(a), except as provided in Subsection (10)(c),
509     in addition to any amounts deposited under Subsections (6), (7), and (8), and for the 2016-17
510     fiscal year only, the Division of Finance shall deposit into the Transportation Investment Fund
511     of 2005 created by Section 72-2-124 the amount of tax revenue generated by a .05% tax rate on
512     the transactions described in Subsection (1).]
513          [(b)] (9) (a) Notwithstanding Subsection (3)(a), except as provided in Subsection
514     [(10)(c)] (9)(b), and in addition to any amounts deposited under Subsections (6)[,] and (7)[, and
515     (8)], the Division of Finance shall deposit into the Transportation Investment Fund of 2005
516     created by Section 72-2-124 the amount of revenue described as follows:
517          [(i) for fiscal year 2017-18 only, 83.33% of the amount of revenue generated by a .05%
518     tax rate on the transactions described in Subsection (1);]
519          [(ii) for fiscal year 2018-19 only, 66.67% of the amount of revenue generated by a
520     .05% tax rate on the transactions described in Subsection (1);]
521          [(iii)] (i) for fiscal year 2019-20 only, 50% of the amount of revenue generated by a
522     .05% tax rate on the transactions described in Subsection (1);
523          [(iv)] (ii) for fiscal year 2020-21 only, 33.33% of the amount of revenue generated by a

524     .05% tax rate on the transactions described in Subsection (1); and
525          [(v)] (iii) for fiscal year 2021-22 only, 16.67% of the amount of revenue generated by a
526     .05% tax rate on the transactions described in Subsection (1).
527          [(c)] (b) For purposes of [Subsections (10)(a) and (b)] Subsection (9)(a), the Division
528     of Finance may not deposit into the Transportation Investment Fund of 2005 any tax revenue
529     generated by amounts paid or charged for food and food ingredients, except for tax revenue
530     generated by a bundled transaction attributable to food and food ingredients and tangible
531     personal property other than food and food ingredients described in Subsection (2)(d).
532          [(11)] (10) Notwithstanding Subsection (3)(a), beginning the second fiscal year after
533     the fiscal year during which the Division of Finance receives notice under Section 63N-2-510
534     that construction on a qualified hotel, as defined in Section 63N-2-502, has begun, the Division
535     of Finance shall, for two consecutive fiscal years, annually deposit $1,900,000 of the revenue
536     generated by the taxes listed under Subsection (3)(a) into the Hotel Impact Mitigation Fund,
537     created in Section 63N-2-512.
538          [(12)] (11) (a) Notwithstanding Subsection (3)(a), for the 2016-17 fiscal year only, the
539     Division of Finance shall deposit $26,000,000 of the revenues generated by the taxes listed
540     under Subsection (3)(a) into the Throughput Infrastructure Fund created by Section 35A-8-308.
541          (b) Notwithstanding Subsection (3)(a), for the 2017-18 fiscal year only, the Division of
542     Finance shall deposit $27,000,000 of the revenues generated by the taxes listed under
543     Subsection (3)(a) into the Throughput Infrastructure Fund created by Section 35A-8-308.
544          [(13)] (12) Notwithstanding Subsections (4) through [(12)] (11) and [(14)] (13), an
545     amount required to be expended or deposited in accordance with Subsections (4) through [(12)]
546     (11) and [(14)] (13) may not include an amount the Division of Finance deposits in accordance
547     with Section 59-12-103.2.
548          [(14)] (13) (a) The rate specified in this subsection is 0.15%.
549          (b) Notwithstanding Subsection (3)(a), the Division of Finance shall:
550          (i) on or before September 30, 2019, transfer the amount of revenue generated by a
551     0.15% tax rate imposed beginning on April 1, 2019, and ending on June 30, 2019, on the
552     transactions that are subject to the sales and use tax under Subsection (2)(a)(i)(A) as dedicated
553     credits to the Division of Health Care Financing; and
554          (ii) for a fiscal year beginning on or after fiscal year 2019-20, annually transfer the

555     amount of revenue generated by a 0.15% tax rate on the transactions that are subject to the
556     sales and use tax under Subsection (2)(a)(i)(A) as dedicated credits to the Division of Health
557     Care Financing.
558          (c) The revenue described in Subsection [(14)] (13)(b) that the Division of Finance
559     transfers to the Division of Health Care Financing as dedicated credits shall be expended for
560     the following uses:
561          (i) implementation of the Medicaid expansion described in Sections 26-18-3.1(4) and
562     26-18-3.9(2)(b);
563          (ii) if revenue remains after the use specified in Subsection [(14)] (13)(c)(i), other
564     measures required by Section 26-18-3.9; and
565          (iii) if revenue remains after the uses specified in Subsections [(14)] (13)(c)(i) and (ii),
566     other measures described in Title 26, Chapter 18, Medical Assistance Act.
567          Section 4. Section 59-12-1201 is amended to read:
568          59-12-1201. Motor vehicle rental tax -- Rate -- Exemptions -- Administration,
569     collection, and enforcement of tax -- Administrative charge -- Deposits.
570          (1) (a) Except as provided in Subsection (3), there is imposed a tax of 2.5% on all
571     short-term leases and rentals of motor vehicles not exceeding 30 days.
572          (b) The tax imposed in this section is in addition to all other state, county, or municipal
573     fees and taxes imposed on rentals of motor vehicles.
574          (2) (a) Subject to Subsection (2)(b), a tax rate repeal or tax rate change for the tax
575     imposed under Subsection (1) shall take effect on the first day of a calendar quarter.
576          (b) (i) For a transaction subject to a tax under Subsection (1), a tax rate increase shall
577     take effect on the first day of the first billing period:
578          (A) that begins after the effective date of the tax rate increase; and
579          (B) if the billing period for the transaction begins before the effective date of a tax rate
580     increase imposed under Subsection (1).
581          (ii) For a transaction subject to a tax under Subsection (1), the repeal of a tax or a tax
582     rate decrease shall take effect on the first day of the last billing period:
583          (A) that began before the effective date of the repeal of the tax or the tax rate decrease;
584     and
585          (B) if the billing period for the transaction begins before the effective date of the repeal

586     of the tax or the tax rate decrease imposed under Subsection (1).
587          (3) A motor vehicle is exempt from the tax imposed under Subsection (1) if:
588          (a) the motor vehicle is registered for a gross laden weight of 12,001 or more pounds;
589          (b) the motor vehicle is rented as a personal household goods moving van; or
590          (c) the lease or rental of the motor vehicle is made for the purpose of temporarily
591     replacing a person's motor vehicle that is being repaired pursuant to a repair agreement or an
592     insurance agreement.
593          (4) (a) (i) The tax authorized under this section shall be administered, collected, and
594     enforced in accordance with:
595          (A) the same procedures used to administer, collect, and enforce the tax under Part 1,
596     Tax Collection; and
597          (B) Chapter 1, General Taxation Policies.
598          (ii) Notwithstanding Subsection (4)(a)(i), a tax under this part is not subject to
599     Subsections 59-12-103(4) through [(10)] (9) or Section 59-12-107.1 or 59-12-123.
600          (b) The commission shall retain and deposit an administrative charge in accordance
601     with Section 59-1-306 from the revenues the commission collects from a tax under this part.
602          (c) Except as provided under Subsection (4)(b), all revenue received by the
603     commission under this section shall be deposited daily with the state treasurer and credited
604     monthly to the Marda Dillree Corridor Preservation Fund under Section 72-2-117.
605          Section 5. Section 63N-2-510 is amended to read:
606          63N-2-510. Report by office -- Posting of report.
607          (1) The office shall include the following information in the office's annual written
608     report described in Section 63N-1-301:
609          (a) the state's success in attracting new conventions and corresponding new state
610     revenue;
611          (b) the estimated amount of convention incentive commitments and the associated
612     calculation made by the office and the period of time over which convention incentives are
613     expected to be paid;
614          (c) the economic impact on the state related to generating new state revenue and
615     providing convention incentives; and
616          (d) the estimated and actual costs and economic benefits of the convention incentive

617     commitments that the office made.
618          (2) Upon the commencement of the construction of a qualified hotel, the office shall
619     send a written notice to the Division of Finance:
620          (a) referring to the two annual deposits required under Subsection 59-12-103[(11)](10);
621     and
622          (b) notifying the Division of Finance that construction on the qualified hotel has begun.
623          Section 6. Section 63N-2-512 is amended to read:
624          63N-2-512. Hotel Impact Mitigation Fund.
625          (1) As used in this section:
626          (a) "Affected hotel" means a hotel built in the state before July 1, 2014.
627          (b) "Direct losses" means affected hotels' losses of hotel guest business attributable to
628     the qualified hotel room supply being added to the market in the state.
629          (c) "Mitigation fund" means the Hotel Impact Mitigation Fund, created in Subsection
630     (2).
631          (2) There is created an expendable special revenue fund known as the Hotel Impact
632     Mitigation Fund.
633          (3) The mitigation fund shall:
634          (a) be administered by the board;
635          (b) earn interest; and
636          (c) be funded by:
637          (i) payments required to be deposited into the mitigation fund by the Division of
638     Finance under Subsection 59-12-103[(11)](10);
639          (ii) money required to be deposited into the mitigation fund under Subsection
640     17-31-9(2) by the county in which a qualified hotel is located; and
641          (iii) any money deposited into the mitigation fund under Subsection (6).
642          (4) Interest earned by the mitigation fund shall be deposited into the mitigation fund.
643          (5) (a) In accordance with office rules, the board shall annually pay up to $2,100,000 of
644     money in the mitigation fund:
645          (i) to affected hotels;
646          (ii) for four consecutive years, beginning 12 months after the date of initial occupancy
647     of the qualified hotel occurs; and

648          (iii) to mitigate direct losses.
649          (b) (i) If the amount the board pays under Subsection (5)(a) in any year is less than
650     $2,100,000, the board shall pay to the Stay Another Day and Bounce Back Fund, created in
651     Section 63N-2-511, the difference between $2,100,000 and the amount paid under Subsection
652     (5)(a).
653          (ii) The board shall make any required payment under Subsection (5)(b)(i) within 90
654     days after the end of the year for which a determination is made of how much the board is
655     required to pay to affected hotels under Subsection (5)(a).
656          (6) A host local government or qualified hotel owner may make payments to the
657     Division of Finance for deposit into the mitigation fund.
658          (7) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
659     office shall, in consultation with the Utah Hotel and Lodging Association and the county in
660     which the qualified hotel is located, make rules establishing procedures and criteria governing
661     payments under Subsection (5)(a) to affected hotels.
662          Section 7. Effective date.
663          This bill takes effect on July 1, 2019.