Chief Sponsor: Karen Mayne

House Sponsor: James A. Dunnigan


8     General Description:
9          This bill amends provisions relating to metro townships.
10     Highlighted Provisions:
11          This bill:
12          ▸     allows a metro township to impose a municipal energy sales and use tax or a
13     municipal telecommunication's license tax after holding a public hearing;
14          ▸     repeals provisions limiting the taxing authority of certain metro townships;
15          ▸     requires the State Tax Commission to provide certain tax collection data to a metro
16     township; and
17          ▸     makes technical and conforming changes.
18     Money Appropriated in this Bill:
19          None
20     Other Special Clauses:
21          None
22     Utah Code Sections Affected:
23     AMENDS:
24          10-1-303, as last amended by Laws of Utah 2010, Chapter 142
25          10-1-402, as last amended by Laws of Utah 2008, Chapter 384
26          10-3c-204, as enacted by Laws of Utah 2015, Chapter 352

28     Be it enacted by the Legislature of the state of Utah:

29          Section 1. Section 10-1-303 is amended to read:
30          10-1-303. Definitions.
31          As used in this part:
32          (1) "Commission" means the State Tax Commission.
33          (2) "Contractual franchise fee" means:
34          (a) a fee:
35          (i) provided for in a franchise agreement; and
36          (ii) that is consideration for the franchise agreement; or
37          (b) (i) a fee similar to Subsection (2)(a); or
38          (ii) any combination of Subsections (2)(a) and (b).
39          (3) (a) "Delivered value" means the fair market value of the taxable energy delivered
40     for sale or use in the municipality and includes:
41          (i) the value of the energy itself; and
42          (ii) any transportation, freight, customer demand charges, services charges, or other
43     costs typically incurred in providing taxable energy in usable form to each class of customer in
44     the municipality.
45          (b) "Delivered value" does not include the amount of a tax paid under:
46          (i) Title 59, Chapter 12, Sales and Use Tax Act; or
47          (ii) this part.
48          (4) "De minimis amount" means an amount of taxable energy that does not exceed the
49     greater of:
50          (a) 5% of the energy supplier's estimated total Utah gross receipts from sales of
51     property or services; or
52          (b) $10,000.
53          (5) "Energy supplier" means a person supplying taxable energy, except that the
54     commission may by rule exclude from this definition a person supplying a de minimis amount
55     of taxable energy.

56          (6) "Franchise agreement" means a franchise or an ordinance, contract, or agreement
57     granting a franchise.
58          (7) "Franchise tax" means:
59          (a) a franchise tax;
60          (b) a tax similar to a franchise tax; or
61          (c) any combination of Subsections (7)(a) and (b).
62          (8) "Municipality" means a city, town, or metro township.
63          [(8)] (9) "Person" is as defined in Section 59-12-102.
64          [(9)] (10) "Taxable energy" means gas and electricity.
65          Section 2. Section 10-1-402 is amended to read:
66          10-1-402. Definitions.
67          As used in this part:
68          (1) "Commission" means the State Tax Commission.
69          (2) (a) Subject to Subsections (2)(b) and (c), "customer" means the person who is
70     obligated under a contract with a telecommunications provider to pay for telecommunications
71     service received under the contract.
72          (b) For purposes of this section and Section 10-1-407, "customer" means:
73          (i) the person who is obligated under a contract with a telecommunications provider to
74     pay for telecommunications service received under the contract; or
75          (ii) if the end user is not the person described in Subsection (2)(b)(i), the end user of
76     telecommunications service.
77          (c) "Customer" does not include a reseller:
78          (i) of telecommunications service; or
79          (ii) for mobile telecommunications service, of a serving carrier under an agreement to
80     serve the customer outside the telecommunications provider's licensed service area.
81          (3) (a) "End user" means the person who uses a telecommunications service.
82          (b) For purposes of telecommunications service provided to a person who is not an

83     individual, "end user" means the individual who uses the telecommunications service on behalf
84     of the person who is provided the telecommunications service.
85          (4) (a) "Gross receipts from telecommunications service" means the revenue that a
86     telecommunications provider receives for telecommunications service rendered except for
87     amounts collected or paid as:
88          (i) a tax, fee, or charge:
89          (A) imposed by a governmental entity;
90          (B) separately identified as a tax, fee, or charge in the transaction with the customer for
91     the telecommunications service; and
92          (C) imposed only on a telecommunications provider;
93          (ii) sales and use taxes collected by the telecommunications provider from a customer
94     under Title 59, Chapter 12, Sales and Use Tax Act; or
95          (iii) interest, a fee, or a charge that is charged by a telecommunications provider on a
96     customer for failure to pay for telecommunications service when payment is due.
97          (b) "Gross receipts from telecommunications service" includes a charge necessary to
98     complete a sale of a telecommunications service.
99          (5) "Mobile telecommunications service" is as defined in the Mobile
100     Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
101          (6) "Municipality" means a city [or town], town, or metro township.
102          (7) "Place of primary use":
103          (a) for telecommunications service other than mobile telecommunications service,
104     means the street address representative of where the customer's use of the telecommunications
105     service primarily occurs, which shall be:
106          (i) the residential street address of the customer; or
107          (ii) the primary business street address of the customer; or
108          (b) for mobile telecommunications service, is as defined in the Mobile
109     Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.

110          (8) Notwithstanding where a call is billed or paid, "service address" means:
111          (a) if the location described in this Subsection (8)(a) is known, the location of the
112     telecommunications equipment:
113          (i) to which a call is charged; and
114          (ii) from which the call originates or terminates;
115          (b) if the location described in Subsection (8)(a) is not known but the location
116     described in this Subsection (8)(b) is known, the location of the origination point of the signal
117     of the telecommunications service first identified by:
118          (i) the telecommunications system of the telecommunications provider; or
119          (ii) if the system used to transport the signal is not a system of the telecommunications
120     provider, information received by the telecommunications provider from its service provider;
121     or
122          (c) if the locations described in Subsection (8)(a) or (b) are not known, the location of a
123     customer's place of primary use.
124          (9) (a) Subject to Subsections (9)(b) and (9)(c), "telecommunications provider" means
125     a person that:
126          (i) owns, controls, operates, or manages a telecommunications service; or
127          (ii) engages in an activity described in Subsection (9)(a)(i) for the shared use with or
128     resale to any person of the telecommunications service.
129          (b) A person described in Subsection (9)(a) is a telecommunications provider whether
130     or not the Public Service Commission of Utah regulates:
131          (i) that person; or
132          (ii) the telecommunications service that the person owns, controls, operates, or
133     manages.
134          (c) "Telecommunications provider" does not include an aggregator as defined in
135     Section 54-8b-2.
136          (10) "Telecommunications service" means:

137          (a) telecommunications service, as defined in Section 59-12-102, other than mobile
138     telecommunications service, that originates and terminates within the boundaries of this state;
139          (b) mobile telecommunications service, as defined in Section 59-12-102:
140          (i) that originates and terminates within the boundaries of one state; and
141          (ii) only to the extent permitted by the Mobile Telecommunications Sourcing Act, 4
142     U.S.C. Sec. 116 et seq.; or
143          (c) an ancillary service as defined in Section 59-12-102.
144          (11) (a) Except as provided in Subsection (11)(b), "telecommunications tax or fee"
145     means any of the following imposed by a municipality on a telecommunications provider:
146          (i) a tax;
147          (ii) a license;
148          (iii) a fee;
149          (iv) a license fee;
150          (v) a license tax;
151          (vi) a franchise fee; or
152          (vii) a charge similar to a tax, license, or fee described in Subsections (11)(a)(i)
153     through (vi).
154          (b) "Telecommunications tax or fee" does not include:
155          (i) the municipal [telecommunications] telecommunication's license tax authorized by
156     this part; or
157          (ii) a tax, fee, or charge, including a tax imposed under Title 59, Revenue and
158     Taxation, that is imposed:
159          (A) on telecommunications providers; and
160          (B) on persons who are not telecommunications providers.
161          Section 3. Section 10-3c-204 is amended to read:
162          10-3c-204. Taxing authority limited.
163          (1) A metro township may [not] impose:

164          (a) a municipal energy sales and use tax [as described] in accordance with Chapter 1,
165     Part 3, Municipal Energy Sales and Use Tax Act; or
166          (b) a municipal telecommunication's license tax [as described] in accordance with
167     Chapter 1, Part 4, Municipal Telecommunications License Tax Act.
168          [(2) (a) If the electors at an election under Section 10-2a-404 chose a metro township
169     that is included in a municipal services district and has limited municipal powers, or a metro
170     township subsequently joins a municipal services district, the metro township may not levy or
171     impose a tax unless the Legislature expressly provides that the metro township may levy or
172     impose the tax.]
173          [(b) Subsection (2)(a) does not apply if a municipal services district is dissolved.]
174          (2) (a) The State Tax Commission shall provide to each metro township the collection
175     data necessary to verify that revenues collected by the commission are distributed to each metro
176     township in accordance with:
177          (i) Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act; and
178          (ii) Chapter 1, Part 4, Municipal Telecommunications License Tax Act.
179          (b) The data described in Subsection (2)(a) shall include the State Tax Commission's
180     reports of collections, distributions, and a breakdown of metro township revenues.
181          (3) (a) Before a metro township enacts a tax described in Subsection (1), the metro
182     township council shall hold a public hearing:
183          (i) on a weekday evening other than a holiday beginning no earlier than 6:00 p.m.;
184          (ii) that is open to the public; and
185          (iii) to allow an individual present to comment on the proposed tax:
186          (A) within reasonable time limits; and
187          (B) without unreasonable restriction on the number of individuals permitted to
188     comment on the proposed tax.
189          (b) (i) A metro township council shall publish notice of the public hearing described in
190     Subsection (3)(a):

191          (A) by mailing notice to each mailing address in the metro township at least 14 days
192     before the day of the public hearing;
193          (B) by posting notice on the Utah Public Notice Website created in Section 63F-1-701
194     for each of the 14 days before the day of the public hearing; and
195          (C) if the metro township has a website, by posting notice on the metro township's
196     website for each of the 14 days before the day of the public hearing.
197          (ii) The council of a metro township that is included in a municipal services district
198     satisfies the requirement described in Subsection (3)(b)(i)(A) by mailing notice, at least 14 days
199     before the day of the public hearing, to each mailing address in the metro township, using
200     records or information available to the municipal services district in which the metro township
201     is included.
202          (c) The notice described in Subsection (3)(b) shall:
203          (i) state "NOTICE OF PROPOSED TAX" at the top of the notice, in bold upper-case
204     type no smaller than 18 point;
205          (ii) indicate the date, time, and location of the public hearing described in Subsection
206     (3)(a); and
207          (iii) indicate the proposed tax rate.