1     
INCOME TAX REVENUE AMENDMENTS

2     
2021 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Norman K. Thurston

5     
Senate Sponsor: Daniel McCay

6     

7     LONG TITLE
8     General Description:
9          This bill modifies provisions relating to income tax revenue.
10     Highlighted Provisions:
11          This bill:
12          ▸     creates the Income Tax Surplus Restricted Account;
13          ▸     specifies purposes for which revenue deposited into the Income Tax Surplus
14     Restricted Account may be used;
15          ▸     requires the Division of Finance to deposit a certain amount of income tax revenue
16     into the Income Tax Surplus Restricted Account following a federal tax law change
17     that will likely cause an increase in state income tax revenue;
18          ▸     requires the State Tax Commission to report to the Revenue and Taxation Interim
19     Committee and the Division of Finance if a federal tax law change is enacted that
20     will likely cause an increase in state income tax revenue; and
21          ▸     requires the Revenue and Taxation Interim Committee to review the State Tax
22     Commission's report and make recommendations to the Legislative Management
23     Committee.
24     Money Appropriated in this Bill:
25          None
26     Other Special Clauses:
27          None
28     Utah Code Sections Affected:
29     AMENDS:
30          59-1-213, as last amended by Laws of Utah 2016, Chapter 135
31     ENACTS:
32          59-1-103, Utah Code Annotated 1953
33     

34     Be it enacted by the Legislature of the state of Utah:
35          Section 1. Section 59-1-103 is enacted to read:
36          59-1-103. Income Tax Surplus Restricted Account.
37          (1) As used in this section, "federal tax law change impacting state income tax
38     revenue" means the same as that term is defined in Section 59-1-213.
39          (2) There is created within the Education Fund a restricted account known as the
40     "Income Tax Surplus Restricted Account."
41          (3) The account shall be funded by the revenue deposited into the account in
42     accordance with Subsection (5).
43          (4) (a) The account shall earn interest.
44          (b) The interest described in Subsection (4)(a) shall be deposited into the account.
45          (5) After the Division of Finance receives a report in accordance with Section
46     59-1-213, the Division of Finance shall deposit into the account an amount of income tax
47     revenue equal to the estimate stated in the report each fiscal year:
48          (a) beginning the fiscal year that begins after the effective date of the federal tax law
49     change impacting state income tax revenue described in the report; and
50          (b) ending the fiscal year for which the Legislature appropriates the money in the
51     account attributed to the federal tax law change impacting state income tax revenue.
52          (6) Upon appropriation, the money in the account may be used for the purposes
53     specified by the Legislature in accordance with Utah Constitution, Article X, Section 1.
54          Section 2. Section 59-1-213 is amended to read:
55          59-1-213. Annual report on Internal Revenue Code changes.
56          (1) As used in this section:
57          (a) "Federal tax law change impacting state income tax revenue" means a change to
58     federal tax law that will likely result in a material increase in state income tax revenue for the
59     first full fiscal year the change is implemented, as determined by consensus between:
60          (i) the legislative fiscal analyst;
61          (ii) the commission; and
62          (iii) the Governor's Office of Management and Budget.
63          (b) "Material increase in state income tax revenue" means an increase in the revenue
64     the state receives from the income taxes imposed under this title that is equal to or greater than
65     .5% of the revenue the state received from the income taxes imposed under this title for the
66     preceding fiscal year.
67          (2) The commission shall annually provide an electronic report to the Revenue and
68     Taxation Interim Committee on or before the October interim meeting concerning the impacts
69     of the reliance of this title on the Internal Revenue Code, including:
70          [(1)] (a) any modification to the Internal Revenue Code that is likely to have a fiscal
71     impact on state revenues:
72          [(a)] (i) that became effective:
73          [(i)] (A) if the commission is preparing its initial report in accordance with this section,
74     during the previous calendar year; or
75          [(ii)] (B) if the commission has prepared a previous report in accordance with this
76     section, after the most recent report prepared in accordance with this section; or
77          [(b)] (ii) that have been enacted and will become effective prior to the end of the
78     calendar year that begins January 1 following the current report prepared in accordance with
79     this section;
80          [(2)] (b) the fiscal impacts a modification described in Subsection [(1)] (2)(a) may have
81     on state revenues; [and]
82          [(3)] (c) statutory or administrative options to:
83          [(a)] (i) implement the effects on this title of a modification described in Subsection
84     [(1)] (2)(a); or
85          [(b)] (ii) change this title to prevent this title from implementing a modification
86     described in Subsection [(1).] (2)(a); and
87          (d) if there is a federal tax law change impacting state income tax revenue enacted
88     during the preceding year:
89          (i) a description of each federal tax law change impacting state income tax revenue;
90          (ii) an estimate of the amount of the increase in state income tax revenue expected to
91     result from each federal tax law change impacting state income tax revenue, based on
92     consensus between:
93          (A) the legislative fiscal analyst;
94          (B) the commission; and
95          (C) the Governor's Office of Management and Budget.
96          (3) Each year in which the commission reports a federal tax law change impacting state
97     income tax revenue in accordance with Subsection (2)(d):
98          (a) the commission shall submit an electronic report to the Division of Finance that
99     contains the information described in Subsection (2)(d); and
100          (b) the Revenue and Taxation Interim Committee shall:
101          (i) review each federal tax law change impacting state income tax revenue; and
102          (ii) no later than one year after the day on which the Revenue and Taxation Interim
103     Committee receives a report under this section that includes a federal tax law change impacting
104     state income tax revenue, recommend to the Legislative Management Committee any
105     legislative action.