1     
TRANSIENT ROOM TAX AMENDMENTS

2     
2022 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Bradley G. Last

5     
Senate Sponsor: Evan J. Vickers

6     

7     LONG TITLE
8     General Description:
9          This bill modifies provisions related to the transient room tax.
10     Highlighted Provisions:
11          This bill:
12          ▸     authorizes certain counties to use a certain amount of transient room tax revenue for
13     visitor management and destination development if the expenditure is prioritized
14     and recommended by a county's tourism tax advisory board;
15          ▸     modifies provisions related to a transient room tax reserve fund;
16          ▸     modifies the general powers and duties of a county legislative body related to the
17     transient room tax;
18          ▸     modifies provisions related to an annual report by a county legislative body; and
19          ▸     makes technical changes.
20     Money Appropriated in this Bill:
21          None
22     Other Special Clauses:
23          This bill provides a special effective date.
24     Utah Code Sections Affected:
25     AMENDS:
26          17-31-2, as last amended by Laws of Utah 2021, Chapter 376
27          17-31-3, as last amended by Laws of Utah 2021, Chapter 376
28          17-31-5, as last amended by Laws of Utah 1996, Chapter 79
29          17-31-5.5, as last amended by Laws of Utah 2021, Chapters 282 and 376

30     

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

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

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

114     of the purposes described in Subsections (2)(b) through (2)(e).
115          (5) (a) The county legislative body may issue bonds or cause bonds to be issued, as
116     permitted by law, to pay all or part of any costs incurred for the purposes set forth in
117     Subsections (2)(b) through (2)(d) that are permitted to be paid from bond proceeds.
118          (b) If a county legislative body does not need the revenue generated by the transient
119     room tax for payment of principal, interest, premiums, and reserves on bonds issued as
120     provided in Subsection (2)(e), the county legislative body shall expend that revenue for the
121     purposes described in Subsection (2), subject to the limitation of Subsection (4).
122          (6) (a) In addition to the purposes described in Subsection (2), a county legislative
123     body:
124          (i) may expend up to 4% of the total revenue generated by a transient room tax to pay a
125     provider for emergency medical services in one or more eligible towns[.]; and
126          (ii) may expend up to 10% of the total revenue generated by a transient room tax for
127     visitor management and destination development if:
128          (A) a national park is located within or partially within the county's boundaries; and
129          (B) the county's tourism tax advisory board created under Subsection 17-31-8(1)(a) or
130     the substantially similar body as described in Subsection 17-31-8(1)(b) has prioritized and
131     recommended the use of the revenue in accordance with Subsection 17-31-8(4).
132          (b) A county legislative body shall reduce the amount that the county is authorized to
133     expend for the purposes described in Subsection (4) by subtracting the amount of transient
134     room tax revenue expended in accordance with Subsection (6)(a) from the amount of revenue
135     described in Subsection (4).
136          (7) (a) Except as provided in Subsection (7)(b), a county legislative body in a county of
137     the fourth, fifth, or sixth class shall expend the revenue generated by a transient room tax as
138     follows:
139          (i) an amount equal to the county's base year promotion expenditure for the purpose
140     described in Subsection (2)(a)(i);
141          (ii) an amount equal to the difference between the county's base year revenue and the

142     county's base year promotion expenditure in accordance with Subsections (3) through (6); and
143          (iii) (A) 37% of the revenue that exceeds the county's base year revenue for the purpose
144     described in Subsection (2)(a)(i); and
145          (B) subject to Subsection (7)(c), 63% of the revenue that exceeds the county's base year
146     revenue for any combination of the purposes described in Subsections (2)(a)(ii) through (e) or
147     to pay an emergency medical services provider for emergency medical services in one or more
148     eligible towns.
149          (b) A county legislative body in a county of the fourth, fifth, or sixth class with one or
150     more national recreation areas administered by the National Park Service or the Forest Service
151     or national parks within or partially within the county's boundaries shall expend the revenue
152     generated by a transient room tax as follows:
153          (i) for a purpose described in Subsection (2)(a) and subject to the limitations described
154     in Subsection (7)(d), the greater of:
155          (A) an amount equal to the county's base year promotion expenditure; or
156          (B) 37% of the transient room tax revenue; and
157          (ii) the remainder of the transient room tax not expended in accordance with
158     Subsection (7)(b)(i) for any combination of the purposes described in Subsection (2) and,
159     subject to the limitation described in Subsection (7)(c), Subsection (6).
160          (c) A county legislative body in a county of the fourth, fifth, or sixth class may not:
161          (i) expend more than 4% of the revenue generated by a transient room tax to pay an
162     emergency medical services provider for emergency medical services in one or more eligible
163     towns; or
164          (ii) expend revenue generated by a transient room tax for the purpose described in
165     Subsection (2)(e) in an amount that exceeds the county's base year promotion expenditure.
166          (d) A county legislative body may not expend:
167          (i) more than 1/5 of the revenue described in Subsection (7)(b)(i) for a purpose
168     described in Subsection (2)(a)(ii); and
169          (ii) more than 1/3 of the revenue described in Subsection (7)(b)(i) for the purpose

170     described in Subsection (2)(a)(iii).
171          (e) The provisions of this Subsection (7) apply notwithstanding any other provision of
172     this section.
173          (f) If the total amount of revenue generated by a transient room tax in a county of the
174     fourth, fifth, or sixth class is less than the county's base year promotion expenditure:
175          (i) Subsections (7)(a) through (d) do not apply; and
176          (ii) the county legislative body shall expend the revenue generated by the transient
177     room tax in accordance with Subsections (3) through (6).
178          Section 2. Section 17-31-3 is amended to read:
179          17-31-3. Reserve fund authorized -- Use of collected funds -- Limitation on
180     surplus in fund.
181          (1) The county legislative body may create a reserve fund.
182          (2) (a) Subject to [Subsection (2)(b)] Subsections (2)(b) and (c), a county legislative
183     body shall retain any transient room tax funds collected but not expended during any fiscal year
184     in the reserve fund to be used in accordance with Sections 17-31-2 through 17-31-5.
185          (b) [The] Except as described in Subsection (2)(c), accumulated unappropriated surplus
186     in the reserve fund, as determined before the county's adoption of a tentative budget, may not
187     exceed 50% of the total transient room tax revenue for the current fiscal year.
188          (c) For a fiscal year beginning on or after July 1, 2019, and ending on or before July 1,
189     2023:
190          (i) if a county receives more than 150% of total transient room tax revenue in the fiscal
191     year compared to the total transient room tax revenue received in the previous fiscal year,
192     accumulated unappropriated surplus in the reserve fund, as determined before the county's
193     adoption of a tentative budget, may not exceed 50% of the total transient room tax revenue for
194     the previous fiscal year plus an amount equal to the total transient room tax revenue that is
195     more than 100% of total transient room tax revenue from the previous fiscal year; and
196          (ii) if a county adds to the county's reserve fund an amount equal to the total transient
197     room tax revenue that is more than 100% of total transient room tax revenue from the previous

198     fiscal year as authorized in Subsection (2)(c)(i), the county may expend that additional reserve
199     fund money for visitor management and destination development subject to the requirements
200     described in Subsections 17-31-2(6)(a)(ii)(A) and (B).
201          Section 3. Section 17-31-5 is amended to read:
202          17-31-5. General powers and duties of a county legislative body related to the
203     transient room tax.
204          [The county legislative body may do and perform any and all other acts and things
205     necessary, convenient, desirable, or appropriate to carry out the provisions of Sections 17-31-2
206     through 17-31-5.]
207          (1) The legislative body of each county that imposes a transient room tax in accordance
208     with Section 17-31-2:
209          (a) shall, except as provided in Subsection (2), at least annually consider the priorities
210     and recommendations of the county's tourism tax advisory board created under Subsection
211     17-31-8(1)(a) or the substantially similar body as described in Subsection 17-31-8(1)(b) in one
212     or more public meetings before finalizing decisions on expenditures of revenue from the
213     transient room tax in each fiscal year;
214          (b) shall prepare and provide the annual written report for each fiscal year as described
215     in Section 17-31-5.5; and
216          (c) may do and perform any and all other acts and things necessary, convenient,
217     desirable, or appropriate to carry out the provisions of Sections 17-31-2 through 17-31-5.5.
218          (2) Subsection (1)(a) does not apply to the legislative body of a county if:
219          (a) the legislative body of the county has entered into a written contract with a
220     substantially similar body to a tourism tax advisory board as described in Subsection
221     17-31-8(1)(b); and
222          (b) the written contract described in Subsection (2)(a) clearly delineates how the
223     expenditures of revenue from the transient room tax are to be spent.
224          Section 4. Section 17-31-5.5 is amended to read:
225          17-31-5.5. Report by county legislative body -- Content.

226          (1) The legislative body of each county that imposes a transient room tax under Section
227     59-12-301 or a tourism, recreation, cultural, convention, and airport facilities tax under Section
228     59-12-603 shall prepare annually a written report in accordance with Subsection (2).
229          (2) The report described in Subsection (1) shall include a breakdown of expenditures
230     into the following categories:
231          (a) for the transient room tax, identification of expenditures for:
232          (i) establishing and promoting:
233          (A) recreation;
234          (B) tourism;
235          (C) film production;
236          (D) conventions; and
237          (E) economic diversification activity;
238          (ii) acquiring, leasing, constructing, furnishing, or operating:
239          (A) convention meeting rooms;
240          (B) exhibit halls;
241          (C) visitor information centers;
242          (D) museums; and
243          (E) related facilities;
244          (iii) acquiring or leasing land required for or related to the purposes listed in
245     Subsection (2)(a)(ii);
246          (iv) mitigation costs as identified in Subsection 17-31-2(2)(d); and
247          (v) making the annual payment of principal, interest, premiums, and necessary reserves
248     for any or the aggregate of bonds issued to pay for costs referred to in Subsections
249     17-31-2(2)(e) and (5)(a); and
250          (b) for the tourism, recreation, cultural, convention, and airport facilities tax,
251     identification of expenditures for:
252          (i) financing tourism promotion, which means an activity to develop, encourage,
253     solicit, or market tourism that attracts transient guests to the county, including planning,

254     product development, and advertising;
255          (ii) the development, operation, and maintenance of the following facilities as defined
256     in Section 59-12-602:
257          (A) an airport facility;
258          (B) a convention facility;
259          (C) a cultural facility;
260          (D) a recreation facility; and
261          (E) a tourist facility; and
262          (iii) a pledge as security for evidences of indebtedness under Subsection 59-12-603(3).
263          (3) For the transient room tax, the report described in Subsection (1) shall include a
264     breakdown of each expenditure described in Subsection (2)(a)(i), including:
265          (a) whether the expenditure was used for in-state and out-of-state promotion efforts;
266          (b) an explanation of how the expenditure targeted a cost created by tourism; and
267          (c) an accounting of the expenditure showing that the expenditure was used only for
268     costs directly related to a cost created by tourism.
269          (4) [A] On or before October 1, the county legislative body shall provide a copy of the
270     annual written report described in Subsection (1) for the previous fiscal year to:
271          (a) the Utah Office of Tourism within the Governor's Office of Economic Opportunity;
272          (b) the county's tourism tax advisory board; and
273          (c) the Office of the Legislative Fiscal Analyst.
274          Section 5. Effective date.
275          This bill takes effect on July 1, 2022.