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7 LONG TITLE
8 General Description:
9 This bill amends the provision regarding local option sales and use tax distribution.
10 Highlighted Provisions:
11 This bill:
12 ▸ amends the distribution for certain local option sales taxes;
13 ▸ provides the State Tax Commission with direction on how to distribute the city and
14 town portion of the sales and use tax within a county;
15 ▸ specifies the ways a county, city, or town may expend the sales and use tax revenue
16 when a county selects the new option;
17 ▸ provides requirements for changing which distribution option the county applies if
18 the county elects to change distribution options;
19 ▸ requires a city to comply with the moderate income housing plan requirements to
20 receive a sales and use tax distribution;
21 ▸ eliminates the deadline for a county to impose the local option sales and use tax;
22 and
23 ▸ makes technical changes.
24 Money Appropriated in this Bill:
25 None
26 Other Special Clauses:
27 None
28 Utah Code Sections Affected:
29 AMENDS:
30 10-9a-408, as last amended by Laws of Utah 2022, Chapter 406
31 59-12-2220, as last amended by Laws of Utah 2022, Chapter 259
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33 Be it enacted by the Legislature of the state of Utah:
34 Section 1. Section 10-9a-408 is amended to read:
35 10-9a-408. Moderate income housing report -- Contents -- Prioritization for
36 funds or projects -- Ineligibility for funds after noncompliance -- Civil actions.
37 (1) As used in this section:
38 (a) "Division" means the Housing and Community Development Division within the
39 Department of Workforce Services.
40 (b) "Implementation plan" means the implementation plan adopted as part of the
41 moderate income housing element of a specified municipality's general plan as provided in
42 Subsection 10-9a-403(2)(c).
43 (c) "Moderate income housing report" or "report" means the report described in
44 Subsection (2)(a).
45 (d) "Moderate income housing strategy" means a strategy described in Subsection
46 10-9a-403(2)(b)(iii).
47 (e) "Specified municipality" means:
48 (i) a city of the first, second, third, or fourth class;
49 (ii) a city of the fifth class with a population of 5,000 or more, if the city is located
50 within a county of the first, second, or third class; or
51 (iii) a metro township with a population of 5,000 or more.
52 (2) (a) Beginning in 2022, on or before October 1 of each calendar year, the legislative
53 body of a specified municipality shall annually submit a written moderate income housing
54 report to the division.
55 (b) The moderate income housing report submitted in 2022 shall include:
56 (i) a description of each moderate income housing strategy selected by the specified
57 municipality for implementation; and
58 (ii) an implementation plan.
59 (c) The moderate income housing report submitted in each calendar year after 2022
60 shall include:
61 (i) the information required under Subsection (2)(b);
62 (ii) a description of each action, whether one-time or ongoing, taken by the specified
63 municipality during the previous fiscal year to implement the moderate income housing
64 strategies selected by the specified municipality for implementation;
65 (iii) a description of each land use regulation or land use decision made by the
66 specified municipality during the previous fiscal year to implement the moderate income
67 housing strategies, including an explanation of how the land use regulation or land use decision
68 supports the specified municipality's efforts to implement the moderate income housing
69 strategies;
70 (iv) a description of any barriers encountered by the specified municipality in the
71 previous fiscal year in implementing the moderate income housing strategies;
72 (v) information regarding the number of internal and external or detached accessory
73 dwelling units located within the specified municipality for which the specified municipality:
74 (A) issued a building permit to construct; or
75 (B) issued a business license to rent;
76 (vi) a description of how the market has responded to the selected moderate income
77 housing strategies, including the number of entitled moderate income housing units or other
78 relevant data; and
79 (vii) any recommendations on how the state can support the specified municipality in
80 implementing the moderate income housing strategies.
81 (d) The moderate income housing report shall be in a form:
82 (i) approved by the division; and
83 (ii) made available by the division on or before July 1 of the year in which the report is
84 required.
85 (3) Within 90 days after the day on which the division receives a specified
86 municipality's moderate income housing report, the division shall:
87 (a) post the report on the division's website;
88 (b) send a copy of the report to the Department of Transportation, the Governor's
89 Office of Planning and Budget, the association of governments in which the specified
90 municipality is located, and, if the specified municipality is located within the boundaries of a
91 metropolitan planning organization, the appropriate metropolitan planning organization; and
92 (c) subject to Subsection (4), review the report to determine compliance with
93 Subsection (2).
94 (4) (a) The report described in Subsection (2)(b) complies with Subsection (2) if the
95 report:
96 (i) includes the information required under Subsection (2)(b);
97 (ii) demonstrates to the division that the specified municipality made plans to
98 implement:
99 (A) three or more moderate income housing strategies if the specified municipality
100 does not have a fixed guideway public transit station; or
101 (B) subject to Subsection 10-9a-403(2)(b)(iv), five or more moderate income housing
102 strategies if the specified municipality has a fixed guideway public transit station; and
103 (iii) is in a form approved by the division.
104 (b) The report described in Subsection (2)(c) complies with Subsection (2) if the
105 report:
106 (i) includes the information required under Subsection (2)(c);
107 (ii) demonstrates to the division that the specified municipality made plans to
108 implement:
109 (A) three or more moderate income housing strategies if the specified municipality
110 does not have a fixed guideway public transit station; or
111 (B) four or more moderate income housing strategies if the specified municipality has a
112 fixed guideway public transit station;
113 (iii) is in a form approved by the division; and
114 (iv) provides sufficient information for the division to:
115 (A) assess the specified municipality's progress in implementing the moderate income
116 housing strategies;
117 (B) monitor compliance with the specified municipality's implementation plan;
118 (C) identify a clear correlation between the specified municipality's land use
119 regulations and land use decisions and the specified municipality's efforts to implement the
120 moderate income housing strategies; and
121 (D) identify how the market has responded to the specified municipality's selected
122 moderate income housing strategies.
123 (5) (a) A specified municipality qualifies for priority consideration under this
124 Subsection (5) if the specified municipality's moderate income housing report:
125 (i) complies with Subsection (2); and
126 (ii) demonstrates to the division that the specified municipality made plans to
127 implement:
128 (A) five or more moderate income housing strategies if the specified municipality does
129 not have a fixed guideway public transit station; or
130 (B) six or more moderate income housing strategies if the specified municipality has a
131 fixed guideway public transit station.
132 (b) The following apply to a specified municipality described in Subsection (5)(a)
133 during the fiscal year immediately following the fiscal year in which the report is required:
134 (i) the Transportation Commission may give priority consideration to transportation
135 projects located within the boundaries of the specified municipality in accordance with
136 Subsection 72-1-304(3)(c); and
137 (ii) the Governor's Office of Planning and Budget may give priority consideration for
138 awarding financial grants to the specified municipality under the COVID-19 Local Assistance
139 Matching Grant Program in accordance with Subsection 63J-4-802(6).
140 (c) Upon determining that a specified municipality qualifies for priority consideration
141 under this Subsection (5), the division shall send a notice of prioritization to the legislative
142 body of the specified municipality, the Department of Transportation, and the Governor's
143 Office of Planning and Budget.
144 (d) The notice described in Subsection (5)(c) shall:
145 (i) name the specified municipality that qualifies for priority consideration;
146 (ii) describe the funds or projects for which the specified municipality qualifies to
147 receive priority consideration;
148 (iii) specify the fiscal year during which the specified municipality qualifies for priority
149 consideration; and
150 (iv) state the basis for the division's determination that the specified municipality
151 qualifies for priority consideration.
152 (6) (a) If the division, after reviewing a specified municipality's moderate income
153 housing report, determines that the report does not comply with Subsection (2), the division
154 shall send a notice of noncompliance to the legislative body of the specified municipality.
155 (b) The notice described in Subsection (6)(a) shall:
156 (i) describe each deficiency in the report and the actions needed to cure each
157 deficiency;
158 (ii) state that the specified municipality has an opportunity to cure the deficiencies
159 within 90 days after the day on which the notice is sent; and
160 (iii) state that failure to cure the deficiencies within 90 days after the day on which the
161 notice is sent will result in ineligibility for funds under Subsection (7).
162 (7) (a) A specified municipality is ineligible for funds under this Subsection (7) if the
163 specified municipality:
164 (i) fails to submit a moderate income housing report to the division; or
165 (ii) fails to cure the deficiencies in the specified municipality's moderate income
166 housing report within 90 days after the day on which the division sent to the specified
167 municipality a notice of noncompliance under Subsection (6).
168 (b) The following apply to a specified municipality described in Subsection (7)(a)
169 during the fiscal year immediately following the fiscal year in which the report is required:
170 (i) the executive director of the Department of Transportation may not program funds
171 from the Transportation Investment Fund of 2005, including the Transit Transportation
172 Investment Fund, to projects located within the boundaries of the specified municipality in
173 accordance with Subsection 72-2-124(5); and
174 (ii) the Governor's Office of Planning and Budget may not award financial grants to the
175 specified municipality under the COVID-19 Local Assistance Matching Grant Program in
176 accordance with Subsection 63J-4-802(7).
177 (c) Upon determining that a specified municipality is ineligible for funds under this
178 Subsection (7), the division shall send a notice of ineligibility to the legislative body of the
179 specified municipality, the Department of Transportation, the State Tax Commission, and the
180 Governor's Office of Planning and Budget.
181 (d) The notice described in Subsection (7)(c) shall:
182 (i) name the specified municipality that is ineligible for funds;
183 (ii) describe the funds for which the specified municipality is ineligible to receive;
184 (iii) specify the fiscal year during which the specified municipality is ineligible for
185 funds; and
186 (iv) state the basis for the division's determination that the specified municipality is
187 ineligible for funds.
188 (8) In a civil action seeking enforcement or claiming a violation of this section or of
189 Subsection 10-9a-404(4)(c), a plaintiff may not recover damages but may be awarded only
190 injunctive or other equitable relief.
191 Section 2. Section 59-12-2220 is amended to read:
192 59-12-2220. County option sales and use tax to fund a system for public transit --
193 Base -- Rate.
194 (1) Subject to the other provisions of this part and subject to the requirements of this
195 section, [
196 under this section:
197 (a) a county legislative body may impose the sales and use tax on the transactions
198 described in Subsection 59-12-103(1) located within the county, including the cities and towns
199 within the county if:
200 (i) the entire boundary of a county is annexed into a large public transit district; and
201 (ii) the maximum amount of sales and use tax authorizations allowed pursuant to
202 Section 59-12-2203 and authorized under the following sections has been imposed:
203 (A) Section 59-12-2213;
204 (B) Section 59-12-2214;
205 (C) Section 59-12-2215;
206 (D) Section 59-12-2216;
207 (E) Section 59-12-2217;
208 (F) Section 59-12-2218; and
209 (G) Section 59-12-2219;
210 (b) if the county is not annexed into a large public transit district, the county legislative
211 body may impose the sales and use tax on the transactions described in Subsection
212 59-12-103(1) located within the county, including the cities and towns within the county if:
213 (i) the county is an eligible political subdivision as defined in Section 59-12-2219; or
214 (ii) a city or town within the boundary of the county is an eligible political subdivision
215 as defined in Section 59-12-2219; or
216 (c) a county legislative body of a county not described in Subsection (1)(a) may impose
217 the sales and use tax on the transactions described in Subsection 59-12-103(1) located within
218 the county, including the cities and towns within the county, if there is a public transit district
219 within the boundary of the county.
220 (2) For purposes of Subsection (1) and subject to the other provisions of this section, a
221 county legislative body that imposes a sales and use tax under this section may impose the tax
222 at a rate of .2%.
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229 (3) (a) The commission shall distribute sales and use tax revenue collected under this
230 section as determined by a county legislative body as described in Subsection (3)(b).
231 (b) If a county legislative body imposes a sales and use tax as described in this section,
232 the county legislative body may elect the sales and use tax revenue distribution as described in
233 Subsection (4), (5), (6), or (7), depending on the class of county, and presence and type of a
234 public transit district in the county.
235 (4) If a county legislative body imposes a sales and use tax as described in this section,
236 and the entire boundary of the county is annexed into a large public transit district, and the
237 county is a county of the first class, the commission shall distribute the sales and use tax
238 revenue as designated by the county, as follows:
239 (a) .2% sales and use tax revenue collected within the county to a public transit district
240 described in Subsection (11); or
241 (b) (i) .10% to a public transit district as described in Subsection (11);
242 (ii) .05% to the cities and towns as provided in Subsection (8); and
243 (iii) .05% to the county legislative body.
244 (5) If a county legislative body imposes a sales and use tax as described in this section
245 and the entire boundary of the county is annexed into a large public transit district, and the
246 county is a county not described in Subsection (4), the commission shall distribute the sales
247 and use tax revenue as designated by the county as follows:
248 (a) .2% sales and use tax revenue collected within the county to a public transit district
249 or other entity as described in Subsection (11); or
250 (b) (i) .10% to a public transit district or other entity as described in Subsection (11);
251 (ii) .05% to the cities and towns as provided in Subsection (8); and
252 (iii) .05% to the county legislative body.
253 (6) (a) If the entire boundary of a county that imposes a sales and use tax as described
254 in this section is not annexed into a single public transit district, but a city or town within the
255 county is annexed into a single public transit district, the commission shall distribute the sales
256 and use tax revenue collected within the county as provided in Subsection (6)(b) or (c).
257 (b) For a city, town, or portion of the county described in Subsection (6)(a) that is
258 annexed into the single public transit district, or an eligible political subdivision, the county
259 legislative body may request that the commission distribute:
260 (i) .2% sales and use tax revenue collected within the portion of the county that has a
261 public transit service as described in Subsection (11); or
262 (ii) the sales and use tax revenue collected within the public transit district of the
263 county as follows:
264 (A) .05% to a public transit provider as described in Subsection (11);
265 (B) .075% to the cities and towns as provided in Subsection (8); and
266 (C) .075% to the county legislative body.
267 (c) For a city, town, or portion of the county described in Subsection (6)(a) that is not
268 annexed into a single public transit district in the county, the commission shall distribute the
269 sales and use tax revenue collected within the portion of the county that is not annexed as
270 follows:
271 (i) .08% to the cities and towns as provided in Subsection (8); and
272 (ii) .12% to the county legislative body.
273 (7) For a county without public transit that is not described in Subsection (4), (5), or
274 (6), that imposes a sales and use tax as described in this section, the commission shall
275 distribute the sales and use tax revenue collected within the county as follows:
276 (a) .08% to the cities and towns as provided in Subsection (8); and
277 (b) .12% to the county legislative body;
278 (8) (a) Subject to Subsections (8)(b) and (c), the commission shall make the
279 distributions required by Subsections (4)(b)(ii), (5)(b)(ii), (6)(b)(ii)(B), (6)(c)(i), and (7)(a) as
280 follows:
281 (i) 50% of the total revenue collected under Subsections (4)(b)(ii), (5)(b)(ii),
282 (6)(b)(ii)(B), (6)(c)(i), and (7)(a) within the counties that impose a tax under Subsections (4)
283 through (7) shall be distributed to the unincorporated areas, cities, and towns within those
284 counties on the basis of the percentage that the population of each unincorporated area, city, or
285 town bears to the total population of all of the counties that impose a tax under this section; and
286 (ii) 50% of the total revenue collected under Subsections (4)(b)(ii), (5)(b)(ii),
287 (6)(b)(ii)(B), (6)(c)(i), and (7)(a) within the counties that impose a tax under Subsections (4)
288 through (7) shall be distributed to the unincorporated areas, cities, and towns within those
289 counties on the basis of the location of the transaction as determined under Sections 59-12-211
290 through 59-12-215.
291 (b) (i) Population for purposes of this Subsection (8) shall be determined on the basis
292 of the most recent official census or census estimate of the United States Census Bureau.
293 (ii) If a needed population estimate is not available from the United States Census
294 Bureau, population figures shall be derived from an estimate from the Utah Population
295 Estimates Committee created by executive order of the governor.
296 (c) If the Housing and Community Development Division within the Department of
297 Workforce Services determines that a city is ineligible for funds under Subsection
298 10-9a-408(7), the commission shall distribute the distribution that city would have received
299 under Subsection (8)(a) to cities and towns to which Subsection 10-9a-408(7) does not apply.
300 (9) If a public transit service is organized after the date a county legislative body first
301 imposes a tax under this section, a change in a distribution required by this section may not
302 take effect until the first distribution the commission makes under this section after a 90-day
303 period that begins on the date the commission receives written notice from the public transit
304 district that the public transit district has been organized.
305 (10) (a) Except as provided in Subsection (10)(b), a county, city, or town that received
306 distributions described in Subsections (4)(b)(ii), (4)(b)(iii), (5)(b)(ii), (5)(b)(iii), (6)(b)(ii)(B),
307 (6)(b)(ii)(C), (6)(c), and (7) may only expend those funds for a purpose described in Section
308 59-12-2212.2.
309 (b) A county of the first class receiving the county distribution described in Subsection
310 (4)(b)(iii) may only use the distribution as provided in Subsection (10)(a), except that a county
311 legislative body may use up to .02% of the .05% to provide services to individuals with a
312 mental or behavioral health condition, including:
313 (i) evaluation and diversion from incarceration to mental and behavioral health
314 treatment;
315 (ii) assistance in transitioning from incarceration, including housing stability; and
316 (iii) other related services.
317 (11) The following entities may expend revenue the commission distributes to that
318 entity only for capital expenses and service delivery expenses:
319 (a) a public transit district;
320 (b) an eligible political subdivision, as that term is defined in Section 59-12-2219; or
321 (c) another entity providing a service for public transit or a transit facility within the
322 county as those terms are defined in Section 17B-2a-802.
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324 is not required to, submit an opinion question to the county's registered voters in accordance
325 with Section 59-12-2208 to impose a sales and use tax under this section.
326 (b) Notwithstanding Section 59-12-2208, if a county legislative body described in
327 Subsection (4), (5), or (6) seeks to change the distribution of sales and use tax revenue as
328 described in Subsection (4), (5), or (6), the county legislative body may change the allocation
329 by adopting a resolution specifying the change in distribution.
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338 used to supplant existing General Fund appropriations that a county has budgeted for
339 transportation or public transit as of the date the tax becomes effective for a county.
340 (b) The limitation under Subsection [
341 transportation or public transit capital or reserve account a county may have established prior to
342 the date the tax becomes effective.