1     
TAX AMENDMENTS

2     
2019 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Daniel McCay

5     
House Sponsor: ____________

6     

7     LONG TITLE
8     General Description:
9          This bill modifies provisions relating to the Homeless Shelter Cities Mitigation
10     Restricted Account.
11     Highlighted Provisions:
12          This bill:
13          ▸     modifies the calculation of a county's or municipality's annual contribution to the
14     Homeless Shelter Cities Mitigation Restricted Account by:
15               •     removing the cap on a county's or municipality's contribution amount;
16               •     changing the percentage used to determine the amount of the contribution; and      
17               •     requiring the State Tax Commission to subtract the contribution from the
18     county's or municipality's distribution of local option sales and use tax revenue
19     that is based on the location of the transaction, rather than the distribution that is
20     based on population; and
21          ▸     makes technical changes.
22     Money Appropriated in this Bill:
23          None
24     Other Special Clauses:
25          This bill provides a special effective date.
26     Utah Code Sections Affected:
27     AMENDS:

28          35A-8-606, as enacted by Laws of Utah 2018, Chapter 312
29          35A-8-608, as enacted by Laws of Utah 2018, Chapter 312
30          35A-8-609, as enacted by Laws of Utah 2018, Chapter 312
31          59-12-205, as last amended by Laws of Utah 2018, Chapters 258, 312, and 330
32          63J-1-801, as enacted by Laws of Utah 2018, Chapter 312
33     

34     Be it enacted by the Legislature of the state of Utah:
35          Section 1. Section 35A-8-606 is amended to read:
36          35A-8-606. Homeless Shelter Cities Mitigation Restricted Account.
37          (1) As used in this section:
38          (a) "Annual local contribution" means:
39          (i) for a participating local government, [the lesser of $200,000 or] an amount equal to
40     [1.8%] 1.99% of the participating local government's tax revenue distribution amount under
41     Subsection 59-12-205(2)[(a)](b) for the previous fiscal year; or
42          (ii) for an eligible municipality or a grant eligible entity that is certified in accordance
43     with Section 35A-8-609, $0.
44          (b) "Eligible municipality" means the same as that term is defined in Section
45     35A-8-607.
46          (c) "Grant eligible entity" means the same as that term is defined in Section 35A-8-608.
47          (d) "Participating local government" means a county or municipality, as defined in
48     Section 10-1-104, that is not an eligible municipality or grant eligible entity as certified by the
49     department in accordance with Section 35A-8-609.
50          (2) There is created a restricted account within the General Fund known as the
51     Homeless Shelter Cities Mitigation Restricted Account.
52          (3) The account shall be funded by:
53          (a) local sales and use tax revenue deposited into the account in accordance with
54     Section 59-12-205; and
55          (b) interest earned on the account.
56          (4) (a) The department shall administer the account.
57          (b) Subject to appropriation, the department shall disburse funds from the account to:
58          (i) eligible municipalities in accordance with Sections 35A-8-607 and 63J-1-802; and

59          (ii) grant eligible entities in accordance with Sections 35A-8-608 and 63J-1-802.
60          Section 2. Section 35A-8-608 is amended to read:
61          35A-8-608. Grant eligible entity application process for Homeless Shelter Cities
62     Mitigation Restricted Account funds.
63          (1) As used in this section:
64          (a) "Account" means the restricted account created in Section 35A-8-606.
65          (b) "Committee" means the Homeless Coordinating Committee created in this part.
66          (c) "Grant" means an award of funds from the account.
67          (d) "Grant eligible entity" means:
68          (i) the Department of Public Safety; or
69          (ii) a city, town, or metro township that:
70          (A) has a homeless shelter within the city's, town's, or metro township's geographic
71     boundaries;
72          (B) has increased community, social service, [and] or public safety service needs due to
73     the location of a homeless shelter within the city's, town's, or metro township's geographic
74     boundaries; and
75          (C) is certified as a grant eligible entity in accordance with Section 35A-8-609.
76          (e) "Homeless shelter" means a facility that:
77          (i) provides temporary shelter to homeless individuals;
78          (ii) has the capacity to provide temporary shelter to at least 60 individuals per night;
79     and
80          (iii) operates year-round and is not subject to restrictions that limit the hours, days,
81     weeks, or months of operation.
82          (f) "Public safety services" means law enforcement, emergency medical services, and
83     fire protection.
84          (2) Subject to the availability of funds, a grant eligible entity may request a grant to
85     mitigate the impacts of the location of a homeless shelter:
86          (a) through employment of additional personnel to provide public safety services in
87     and around a homeless shelter; or
88          (b) for a grant eligible entity that is a city, town, or metro township, through:
89          (i) development of a community and neighborhood program within the city's, town's, or

90     metro township's boundaries; or
91          (ii) provision of social services within the city's, town's, or metro township's
92     boundaries.
93          (3) (a) In accordance with Title 63G, Chapter 4, Administrative Procedures Act, the
94     department shall make rules governing:
95          (i) the process for determining whether there is sufficient revenue to the account to
96     offer a grant program for the next fiscal year; and
97          (ii) the process for notifying grant eligible entities about the availability of grants for
98     the next fiscal year.
99          (b) (i) If the committee offers a grant program for the next fiscal year, the committee
100     shall set aside time on the agenda of a committee meeting that occurs on or after July 1 and on
101     or before November 30 to allow a grant eligible entity to present a request for account funds for
102     the next fiscal year.
103          (ii) A grant eligible entity may present a request for account funds by:
104          (A) sending an electronic copy of the request to the committee before the meeting; and
105          (B) appearing at the meeting to present the request.
106          (c) The request described in Subsection (3)(b) shall contain:
107          (i) for a grant request to develop a community and neighborhood program:
108          (A) a proposal outlining the components of a community and neighborhood program;
109          (B) a summary of the grant eligible entity's proposed use of any grant awarded; and
110          (C) the amount requested;
111          (ii) for a grant request to provide social services:
112          (A) a proposal outlining the need for additional social services;
113          (B) a summary of the grant eligible entity's proposed use of any grant awarded; and
114          (C) the amount requested;
115          (iii) for a grant request to employ additional personnel to provide public safety
116     services:
117          (A) data relating to the grant eligible entity's public safety services for the current fiscal
118     year, including crime statistics and calls for public safety services;
119          (B) data showing an increase in the grant eligible entity's need for public safety
120     services in the next fiscal year;

121          (C) a summary of the grant eligible entity's proposed use of any grant awarded; and
122          (D) the amount requested; [and] or
123          (iv) for a grant request to provide some combination of the activities described in
124     Subsections (3)(c)(i) through (iii), the information required by this Subsection (3) for each
125     activity for which the grant eligible entity requests a grant.
126          (d) (i) On or before November 30, a grant eligible entity that received a grant during
127     the previous fiscal year shall file electronically with the committee a report that includes:
128          (A) a summary of the amount of the grant that the grant eligible entity received and the
129     grant eligible entity's specific use of those funds;
130          (B) an evaluation of the grant eligible entity's effectiveness in using the grant to
131     address the grant eligible entity's increased needs due to the location of a homeless shelter; and
132          (C) any proposals for improving the grant eligible entity's effectiveness in using a grant
133     that the grant eligible entity may receive in future fiscal years.
134          (ii) The committee may request additional information as needed to make the
135     evaluation described in Subsection (3)(e).
136          (e) The committee shall evaluate a grant request made in accordance with this
137     Subsection (3) using the following factors:
138          (i) the strength of the proposal that the grant eligible entity provides to support the
139     request;
140          (ii) if the grant eligible entity received a grant during the previous fiscal year, the
141     efficiency with which the grant eligible entity used the grant during the previous fiscal year;
142          (iii) the availability of alternative funding for the grant eligible entity to address the
143     grant eligible entity's needs due to the location of a homeless shelter; and
144          (iv) any other considerations identified by the committee.
145          (f) (i) After making the evaluation described in Subsection (3)(e) for each grant eligible
146     entity that makes a grant request and subject to other provisions of this Subsection (3)(f), the
147     committee shall vote to:
148          (A) prioritize the grant requests; and
149          (B) recommend a grant amount for each grant eligible entity.
150          (ii) The committee shall support the prioritization and recommendation described in
151     Subsection (3)(f)(i) with findings on each of the factors described in Subsection (3)(e).

152          (g) The committee shall submit a list that prioritizes the grant requests and
153     recommends a grant amount for each grant eligible entity that requested a grant to:
154          (i) the governor for inclusion in the governor's budget to be submitted to the
155     Legislature; and
156          (ii) the Social Services Appropriations Subcommitee of the Legislature for approval in
157     accordance with Section 63J-1-802.
158          (4) (a) Subject to Subsection (4)(b), the department shall disburse the revenue in the
159     account as a grant to a grant eligible entity:
160          (i) after making the disbursements required by Section 35A-8-607; and
161          (ii) subject to the availability of funds in the account:
162          (A) in the order of priority that the Legislature gives to each eligible grant entity under
163     Section 63J-1-802; and
164          (B) in the amount that the Legislature approves to a grant eligible entity under Section
165     63J-1-802.
166          (b) In accordance with Title 63G, Chapter 4, Administrative Procedures Act, the
167     department shall make rules governing the process for the department to determine the timeline
168     within the fiscal year for funding the grants.
169          (5) On or before October 1, the department, in cooperation with the committee, shall:
170          (a) submit an annual written report electronically to the Social Services Appropriations
171     Subcommittee of the Legislature that gives a complete accounting of the department's
172     disbursement of the money from the account under this section for the previous fiscal year; and
173          (b) include information regarding the disbursement of money from the account under
174     this section in the annual report described in Section 35A-1-109.
175          Section 3. Section 35A-8-609 is amended to read:
176          35A-8-609. Certification of eligible municipality or grant eligible entity.
177          (1) The department shall certify each year, on or after July 1 and before the first
178     meeting of the [committee] Homeless Coordinating Committee after July 1, the cities or towns
179     that meet the requirements of an eligible municipality or a grant eligible entity as of July 1.
180          (2) On or before October 1, the department shall provide a list of the cities or towns
181     that the department has certified as meeting the requirements of an eligible municipality or a
182     grant eligible entity for the year to the State Tax Commission.

183          Section 4. Section 59-12-205 is amended to read:
184          59-12-205. Ordinances to conform with statutory amendments -- Distribution of
185     tax revenue -- Determination of population.
186          (1) To maintain in effect sales and use tax ordinances adopted pursuant to Section
187     59-12-204, a county, city, or town shall adopt amendments to the county's, city's, or town's
188     sales and use tax ordinances:
189          (a) within 30 days of the day on which the state makes an amendment to an applicable
190     provision of Part 1, Tax Collection; and
191          (b) as required to conform to the amendments to Part 1, Tax Collection.
192          (2) Except as provided in Subsections (3) through (5) and subject to Subsection (6):
193          (a) 50% of each dollar collected from the sales and use tax authorized by this part shall
194     be distributed to each county, city, and town on the basis of the percentage that the population
195     of the county, city, or town bears to the total population of all counties, cities, and towns in the
196     state; and
197          (b) (i) except as provided in Subsection (2)(b)(ii), 50% of each dollar collected from
198     the sales and use tax authorized by this part shall be distributed to each county, city, and town
199     on the basis of the location of the transaction as determined under Sections 59-12-211 through
200     59-12-215; and
201          (ii) 50% of each dollar collected from the sales and use tax authorized by this part
202     within a project area described in a project area plan adopted by the military installation
203     development authority under Title 63H, Chapter 1, Military Installation Development
204     Authority Act, shall be distributed to the military installation development authority created in
205     Section 63H-1-201.
206          (3) (a) Beginning on July 1, 2017, and ending on June 30, 2022, the commission shall
207     distribute annually to a county, city, or town the distribution required by this Subsection (3) if:
208          (i) the county, city, or town is a:
209          (A) county of the third, fourth, fifth, or sixth class;
210          (B) city of the fifth class; or
211          (C) town;
212          (ii) the county, city, or town received a distribution under this section for the calendar
213     year beginning on January 1, 2008, that was less than the distribution under this section that the

214     county, city, or town received for the calendar year beginning on January 1, 2007;
215          (iii) (A) for a county described in Subsection (3)(a)(i)(A), the county had located
216     within the unincorporated area of the county for one or more days during the calendar year
217     beginning on January 1, 2008, an establishment described in NAICS Industry Group 2121,
218     Coal Mining, or NAICS Code 213113, Support Activities for Coal Mining, of the 2002 North
219     American Industry Classification System of the federal Executive Office of the President,
220     Office of Management and Budget; or
221          (B) for a city described in Subsection (3)(a)(i)(B) or a town described in Subsection
222     (3)(a)(i)(C), the city or town had located within the city or town for one or more days during
223     the calendar year beginning on January 1, 2008, an establishment described in NAICS Industry
224     Group 2121, Coal Mining, or NAICS Code 213113, Support Activities for Coal Mining, of the
225     2002 North American Industry Classification System of the federal Executive Office of the
226     President, Office of Management and Budget; and
227          (iv) (A) for a county described in Subsection (3)(a)(i)(A), at least one establishment
228     described in Subsection (3)(a)(iii)(A) located within the unincorporated area of the county for
229     one or more days during the calendar year beginning on January 1, 2008, was not the holder of
230     a direct payment permit under Section 59-12-107.1; or
231          (B) for a city described in Subsection (3)(a)(i)(B) or a town described in Subsection
232     (3)(a)(i)(C), at least one establishment described in Subsection (3)(a)(iii)(B) located within a
233     city or town for one or more days during the calendar year beginning on January 1, 2008, was
234     not the holder of a direct payment permit under Section 59-12-107.1.
235          (b) The commission shall make the distribution required by this Subsection (3) to a
236     county, city, or town described in Subsection (3)(a):
237          (i) from the distribution required by Subsection (2)(a); and
238          (ii) before making any other distribution required by this section.
239          (c) (i) For purposes of this Subsection (3), the distribution is the amount calculated by
240     multiplying the fraction calculated under Subsection (3)(c)(ii) by $333,583.
241          (ii) For purposes of Subsection (3)(c)(i):
242          (A) the numerator of the fraction is the difference calculated by subtracting the
243     distribution a county, city, or town described in Subsection (3)(a) received under this section
244     for the calendar year beginning on January 1, 2008, from the distribution under this section that

245     the county, city, or town received for the calendar year beginning on January 1, 2007; and
246          (B) the denominator of the fraction is $333,583.
247          (d) A distribution required by this Subsection (3) is in addition to any other distribution
248     required by this section.
249          (4) (a) As used in this Subsection (4):
250          (i) "Eligible county, city, or town" means a county, city, or town that:
251          (A) for fiscal year 2012-13, received a tax revenue distribution under Subsection (4)(b)
252     equal to the amount described in Subsection (4)(b)(ii); and
253          (B) does not impose a sales and use tax under Section 59-12-2103 on or before July 1,
254     2016.
255          (ii) "Minimum tax revenue distribution" means the total amount of tax revenue
256     distributions an eligible county, city, or town received from a tax imposed in accordance with
257     this part for fiscal year 2004-05.
258          (b) An eligible county, city, or town shall receive a tax revenue distribution for a tax
259     imposed in accordance with this part equal to the greater of:
260          (i) the payment required by Subsection (2); or
261          (ii) the minimum tax revenue distribution.
262          (5) (a) For purposes of this Subsection (5):
263          (i) "Annual local contribution" means [the lesser of $200,000 or] an amount equal to
264     [1.8%] 1.99% of the participating local government's tax revenue distribution amount under
265     Subsection (2)[(a)](b) for the previous fiscal year.
266          (ii) "Participating local government" means a county or municipality, as defined in
267     Section 10-1-104, that is not an eligible municipality or grant eligible entity certified in
268     accordance with Section 35A-8-609.
269          (b) For revenue collected from the tax authorized by this part that is distributed on or
270     after January 1, [2019] 2020, the commission, before making a tax revenue distribution under
271     Subsection (2)[(a)](b) to a participating local government, shall:
272          (i) subtract one-twelfth of the annual local contribution for each participating local
273     government from the participating local government's tax revenue distribution under
274     Subsection (2)[(a)](b); and
275          (ii) deposit the amount described in Subsection (5)(b)(i) into the Homeless Shelter

276     Cities Mitigation Restricted Account created in Section [35A-8a-606] 35A-8-606.
277          (c) The commission shall make the calculation and distribution described in this
278     Subsection (5) after making the distributions described in Subsections (3) and (4).
279          (6) (a) Population figures for purposes of this section shall be based on the most recent
280     official census or census estimate of the United States Bureau of the Census.
281          (b) If a needed population estimate is not available from the United States Bureau of
282     the Census, population figures shall be derived from the estimate from the Utah Population
283     Committee.
284          (c) The population of a county for purposes of this section shall be determined only
285     from the unincorporated area of the county.
286          Section 5. Section 63J-1-801 is amended to read:
287          63J-1-801. Definitions.
288          As used in this part:
289          (1) "Committee" means the Homeless Coordinating Committee created in Section
290     35A-8-601.
291          (2) "Eligible municipality" means a city of the third, fourth, or fifth class, a town, or a
292     metro township that:
293          (a) has, or is proposed to have, a homeless shelter within the city's, town's, or metro
294     township's geographic boundaries that:
295          (i) provides or is proposed to provide temporary shelter to homeless individuals;
296          (ii) has or is proposed to have the capacity to provide temporary shelter to at least 200
297     individuals per night; and
298          (iii) operates year-round and is not subject to restrictions that limit the hours, days,
299     weeks, or months of operation; and
300          (b) due to the location of a homeless shelter within the city's, town's, or metro
301     township's geographic boundaries, needs more public safety services than the city, town, or
302     metro township needed before the location of the homeless shelter within the city's, town's, or
303     metro township's geographic boundaries.
304          (3) "Grant eligible entity" means:
305          (a) the Department of Public Safety; or
306          (b) a city, town, or metro township that has:

307          (i) a homeless shelter within the city's, town's, or metro township's geographic
308     boundaries that:
309          (A) provides temporary shelter to homeless individuals;
310          (B) has the capacity to provide temporary shelter to at least 60 individuals per night;
311     and
312          (C) operates year-round and is not subject to restrictions that limit the hours, days,
313     weeks, or months of operation; and
314          (ii) increased community, social service, [and] or public safety service needs due to the
315     location of a homeless shelter within the city's, town's, or metro township's geographic
316     boundaries.
317          Section 6. Effective date.
318          This bill takes effect on January 1, 2020.