Senator Evan J. Vickers proposes the following substitute bill:


1     
TRANSIENT ROOM TAX AMENDMENTS

2     
2021 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Carl R. Albrecht

5     
Senate Sponsor: Evan J. Vickers

6     

7     LONG TITLE
8     General Description:
9          This bill modifies provisions related to the transient room sales tax.
10     Highlighted Provisions:
11          This bill:
12          ▸     modifies the requirements for how a county of the fourth, fifth, or sixth class spends
13     revenue from the transient room tax;
14          ▸     limits the surplus in a transient room tax reserve fund;
15          ▸     authorizes a county auditor to make referrals to assist the State Tax Commission in
16     determining whether to audit a person that is required to collect and remit the
17     transient room tax;
18          ▸     creates a sunset date for provisions relating to expenditure of transient room tax
19     revenue for an economic diversification activity; and
20          ▸     makes technical and conforming changes.
21     Money Appropriated in this Bill:
22          None
23     Other Special Clauses:
24          None
25     Utah Code Sections Affected:

26     AMENDS:
27          17-31-2, as last amended by Laws of Utah 2020, Chapter 315
28          17-31-3, as last amended by Laws of Utah 2014, Chapter 176
29          17-31-5.5, as last amended by Laws of Utah 2020, Chapter 315
30          59-12-302, as last amended by Laws of Utah 2020, Chapter 315
31          63I-1-217, as last amended by Laws of Utah 2020, Sixth Special Session, Chapter 18
32     

33     Be it enacted by the Legislature of the state of Utah:
34          Section 1. Section 17-31-2 is amended to read:
35          17-31-2. Purposes of transient room tax and expenditure of revenue -- Purchase
36     or lease of facilities -- Mitigating impacts of recreation, tourism, or conventions --
37     Issuance of bonds.
38          (1) As used in this section:
39          (a) "Aircraft" means the same as that term is defined in Section 72-10-102.
40          (b) "Airport" means the same as that term is defined in Section 72-10-102.
41          (c) "Airport authority" means the same as that term is defined in Section 72-10-102.
42          (d) "Airport operator" means the same as that term is defined in Section 72-10-102.
43          (e) "Base year revenue" means the amount of revenue generated by a transient room tax
44     and collected by a county for fiscal year 2018-19.
45          (f) "Base year promotion expenditure" means the amount of revenue generated by a
46     transient room tax that a county spent for the purpose described in Subsection (2)(a) during
47     fiscal year 2018-19.
48          (g) "Economic diversification activity" means an economic development activity that is
49     reasonably similar to, supplements, or expands any economic program as administered by the
50     state or the Governor's Office of Economic Development.
51          [(g)] (h) "Eligible town" means a town that:
52          (i) is located within a county that has a national park within or partially within the
53     county's boundaries; and
54          (ii) imposes a resort communities tax authorized by Section 59-12-401.
55          [(h)] (i) "Emergency medical services provider" means an eligible town, a local district,
56     or a special service district.

57          (j) "Tourism" means an activity to develop, encourage, solicit, or market tourism that
58     attracts transient guests to the county, including planning, development, and advertising for the
59     purpose described in Subsection (2)(a)(i).
60          [(i)] (k) "Town" means a municipality that is classified as a town in accordance with
61     Section 10-2-301.
62          [(j)] (l) "Transient room tax" means a tax at a rate not to exceed 4.25% authorized by
63     Section 59-12-301.
64          (2) Subject to the requirements of this section, a county legislative body may impose
65     the transient room tax for the purposes of:
66          (a) establishing and promoting:
67          (i) tourism;
68          (ii) recreation, [tourism,] film production, and conventions; or
69          (iii) an economic diversification activity if:
70          (A) the county is a county of the fourth, fifth, or sixth class;
71          (B) the county has more than one national park within or partially within the county's
72     boundaries; and
73          (C) the county has a base population of 9,000 or more according to current United
74     States census data;
75          (b) acquiring, leasing, constructing, furnishing, maintaining, or operating:
76          (i) convention meeting rooms;
77          (ii) exhibit halls;
78          (iii) visitor information centers;
79          (iv) museums;
80          (v) sports and recreation facilities including practice fields, stadiums, and arenas;
81          (vi) related facilities;
82          (vii) if a national park is located within or partially within the [county] county's
83     boundaries, the following on any route designated by the county legislative body:
84          (A) transit service, including shuttle service; and
85          (B) parking infrastructure; and
86          (viii) an airport, if:
87          (A) the county is a county of the fourth, fifth, or sixth class; and

88          (B) the county is the airport operator of the airport;
89          (c) acquiring land, leasing land, or making payments for construction or infrastructure
90     improvements required for or related to the purposes listed in Subsection (2)(b);
91          (d) as required to mitigate the impacts of recreation, tourism, or conventions in
92     counties of the fourth, fifth, and sixth class, paying for:
93          (i) solid waste disposal operations;
94          (ii) emergency medical services;
95          (iii) search and rescue activities;
96          (iv) law enforcement activities; and
97          (v) road repair and upgrade of:
98          (A) class B roads, as defined in Section 72-3-103;
99          (B) class C roads, as defined in Section 72-3-104; or
100          (C) class D roads, as defined in Section 72-3-105; and
101          (e) making the annual payment of principal, interest, premiums, and necessary reserves
102     for any of the aggregate of bonds authorized under Subsection (5).
103          (3) (a) The county legislative body of a county that imposes a transient room tax at a
104     rate of 3% or less may expend the revenue generated as provided in Subsection (4), after
105     making any reduction required by Subsection (6).
106          (b) The county legislative body of a county that imposes a transient room tax at a rate
107     that exceeds 3% or increases the rate of transient room tax above 3% may expend:
108          (i) the revenue generated from the transient room tax at a rate of 3% as provided in
109     Subsection (4), after making any reduction required by Subsection (6); and
110          (ii) the revenue generated from the portion of the rate that exceeds 3%:
111          (A) for any combination of the purposes described in Subsections (2) and (5); and
112          (B) regardless of the limitation on expenditures for the purposes described in
113     Subsection (4).
114          (4) Subject to [Subsection] Subsections (6) and (7), a county may not expend more than
115     1/3 of the revenue generated by a rate of transient room tax that does not exceed 3%, for any
116     combination of the purposes described in Subsections (2)(b) through (2)(e).
117          (5) (a) The county legislative body may issue bonds or cause bonds to be issued, as
118     permitted by law, to pay all or part of any costs incurred for the purposes set forth in

119     Subsections (2)(b) through (2)(d) that are permitted to be paid from bond proceeds.
120          (b) If a county legislative body does not need the revenue generated by the transient
121     room tax for payment of principal, interest, premiums, and reserves on bonds issued as
122     provided in Subsection (2)(e), the county legislative body shall expend that revenue for the
123     purposes described in Subsection (2), subject to the limitation of Subsection (4).
124          (6) (a) In addition to the purposes described in Subsection (2), a county legislative
125     body may expend up to 4% of the total revenue generated by a transient room tax to pay a
126     provider for emergency medical services in one or more eligible towns.
127          (b) A county legislative body shall reduce the amount that the county is authorized to
128     expend for the purposes described in Subsection (4) by subtracting the amount of transient
129     room tax revenue expended in accordance with Subsection (6)(a) from the amount of revenue
130     described in Subsection (4).
131          (7) (a) [A] Except as provided in Subsection (7)(b), a county legislative body in a
132     county of the fourth, fifth, or sixth class shall expend the revenue generated by a transient room
133     tax as follows:
134          (i) an amount equal to the county's base year promotion expenditure for the purpose
135     described in Subsection (2)(a)(i);
136          (ii) an amount equal to the difference between the county's base year revenue and the
137     county's base year promotion expenditure in accordance with Subsections (3) through (6); and
138          (iii) (A) 37% of the revenue that exceeds the county's base year revenue for the purpose
139     described in Subsection (2)(a)(i); and
140          (B) subject to Subsection [(7)(b)] (7)(c), 63% of the revenue that exceeds the county's
141     base year revenue for any combination of the purposes described in Subsections [(2)(b)]
142     (2)(a)(ii) through (e) or to pay an emergency medical services provider for emergency medical
143     services in one or more eligible towns.
144          (b) A county legislative body in a county of the fourth, fifth, or sixth class with one or
145     more national recreation areas administered by the National Park Service or the Forest Service
146     or national parks within or partially within the county's boundaries shall expend the revenue
147     generated by a transient room tax as follows:
148          (i) for a purpose described in Subsection (2)(a) and subject to the limitations described
149     in Subsection (7)(d), the greater of:

150          (A) an amount equal to the county's base year promotion expenditure; or
151          (B) 37% of the transient room tax revenue; and
152          (ii) the remainder of the transient room tax not expended in accordance with
153     Subsection (7)(b)(i) for any combination of the purposes described in Subsection (2) and,
154     subject to the limitation described in Subsection (7)(c), Subsection (6).
155          [(b)] (c) A county legislative body in a county of the fourth, fifth, or sixth class may
156     not:
157          (i) expend more than 4% of the revenue generated by a transient room tax to pay an
158     emergency medical services provider for emergency medical services in one or more eligible
159     towns; or
160          (ii) expend revenue generated by a transient room tax for the purpose described in
161     Subsection (2)(e) in an amount that exceeds the county's base year promotion expenditure.
162          (d) A county legislative body may not expend:
163          (i) more than 1/5 of the revenue described in Subsection (7)(b)(i) for a purpose
164     described in Subsection (2)(a)(ii); and
165          (ii) more than 1/3 of the revenue described in Subsection (7)(b)(i) for the purpose
166     described in Subsection (2)(a)(iii).
167          [(c)] (e) The provisions of this Subsection (7) apply notwithstanding any other
168     provision of this section.
169          [(d)] (f) If the total amount of revenue generated by a transient room tax in a county of
170     the fourth, fifth, or sixth class is less than the county's base year promotion expenditure:
171          (i) Subsections (7)(a) through [(c)] (d) do not apply; and
172          (ii) the county legislative body shall expend the revenue generated by the transient
173     room tax in accordance with Subsections (3) through (6).
174          Section 2. Section 17-31-3 is amended to read:
175          17-31-3. Reserve fund authorized -- Use of collected funds -- Limitation on
176     surplus in fund.
177          (1) The county legislative body may create a reserve fund [and any funds collected but
178     not expended during any fiscal year shall be retained in a special fund to be used in accordance
179     with Sections 17-31-2 through 17-31-5].
180          (2) (a) Subject to Subsection (2)(b), a county legislative body shall retain any transient

181     room tax funds collected but not expended during any fiscal year in the reserve fund to be used
182     in accordance with Sections 17-31-2 through 17-31-5.
183          (b) The accumulated unappropriated surplus in the reserve fund, as determined before
184     the county's adoption of a tentative budget, may not exceed 50% of the total transient room tax
185     revenue for the current fiscal year.
186          Section 3. Section 17-31-5.5 is amended to read:
187          17-31-5.5. Report by county legislative body -- Content.
188          (1) The legislative body of each county that imposes a transient room tax under Section
189     59-12-301 or a tourism, recreation, cultural, convention, and airport facilities tax under Section
190     59-12-603 shall prepare annually a report in accordance with Subsection (2).
191          (2) The report described in Subsection (1) shall include a breakdown of expenditures
192     into the following categories:
193          (a) for the transient room tax, identification of expenditures for:
194          (i) establishing and promoting:
195          (A) recreation;
196          (B) tourism;
197          (C) film production; [and]
198          (D) conventions; and
199          (E) economic diversification activity;
200          (ii) acquiring, leasing, constructing, furnishing, or operating:
201          (A) convention meeting rooms;
202          (B) exhibit halls;
203          (C) visitor information centers;
204          (D) museums; and
205          (E) related facilities;
206          (iii) acquiring or leasing land required for or related to the purposes listed in
207     Subsection (2)(a)(ii);
208          (iv) mitigation costs as identified in Subsection 17-31-2(2)(d); and
209          (v) making the annual payment of principal, interest, premiums, and necessary reserves
210     for any or the aggregate of bonds issued to pay for costs referred to in Subsections
211     17-31-2(2)(e) and (5)(a); and

212          (b) for the tourism, recreation, cultural, convention, and airport facilities tax,
213     identification of expenditures for:
214          (i) financing tourism promotion, which means an activity to develop, encourage,
215     solicit, or market tourism that attracts transient guests to the county, including planning,
216     product development, and advertising;
217          (ii) the development, operation, and maintenance of the following facilities as defined
218     in Section 59-12-602:
219          (A) an airport facility;
220          (B) a convention facility;
221          (C) a cultural facility;
222          (D) a recreation facility; and
223          (E) a tourist facility; and
224          (iii) a pledge as security for evidences of indebtedness under Subsection 59-12-603(3).
225          (3) For the transient room tax, the report described in Subsection (1) shall include a
226     breakdown of each expenditure described in Subsection (2)(a)(i), including:
227          (a) whether the expenditure was used for in-state and out-of-state promotion efforts;
228          (b) an explanation of how the expenditure targeted a cost created by tourism; and
229          (c) an accounting of the expenditure showing that the expenditure was used only for
230     costs directly related to a cost created by tourism.
231          (4) A county legislative body shall provide a copy of the report described in Subsection
232     (1) to:
233          (a) the Utah Office of Tourism within the Governor's Office of Economic
234     Development;
235          (b) [its] the county's tourism tax advisory board; and
236          (c) the Office of the Legislative Fiscal Analyst.
237          Section 4. Section 59-12-302 is amended to read:
238          59-12-302. Collection of tax -- Administrative charge.
239          (1) Except as provided in Subsections (2), (3), and (4), the tax authorized under this
240     part shall be administered, collected, and enforced in accordance with:
241          (a) the same procedures used to administer, collect, and enforce the tax under:
242          (i) Part 1, Tax Collection; or

243          (ii) Part 2, Local Sales and Use Tax Act; and
244          (b) Chapter 1, General Taxation Policies.
245          (2) The location of a transaction shall be determined in accordance with Sections
246     59-12-211 through 59-12-215.
247          (3) A tax under this part is not subject to Section 59-12-107.1 or 59-12-123 or
248     Subsections 59-12-205(2) through (6).
249          [(4) A county auditor may coordinate with the commission in determining whether to
250     require an audit of any person that is required to remit a tax authorized under this part.]
251          (4) A county auditor may make referrals to the commission to assist the commission in
252     determining whether to require an audit of any person that is required to remit a tax authorized
253     under this part.
254          (5) The commission:
255          (a) shall distribute the revenue collected from the tax to the county within which the
256     revenue was collected; and
257          (b) shall retain and deposit an administrative charge in accordance with Section
258     59-1-306 from revenue the commission collects from a tax under this part.
259          Section 5. Section 63I-1-217 is amended to read:
260          63I-1-217. Repeal dates, Title 17.
261          (1) Subsection 17-16-21(2)(d) is repealed July 1, 2023.
262          (2) Title 17, Chapter 21a, Part 3, Administration and Standards, which creates the Utah
263     Electronic Recording Commission, is repealed July 1, 2022.
264          (3) In relation to Section 17-31-2, on July 1, 2026:
265          (a) Subsection 17-31-2(1)(g), which defines "economic diversification activity," is
266     repealed;
267          (b) Subsection 17-31-2(2)(a)(iii), relating to establishing and promoting an economic
268     diversification activity, is repealed;
269          (c) Subsection 17-31-2(7)(b)(i) is amended to read:
270          "(i) for a purpose described in Subsection (2)(a) and subject to the limitation described
271     in Subsection (7)(d), the greater of:"; and
272          (d) Subsection 17-31-2(7)(d)(ii), relating to a limitation on the expenditure of revenue
273     for an economic diversification activity, is repealed.

274          (4) Subsection 17-31-5.5(2)(a)(i)(E), relating to economic diversification activity, is
275     repealed July 1, 2026.