Bill Summary – FastDemocracy

LEGISLATIVE GENERAL COUNSEL                                              H.B. 442
       6 Approved for Filing: G. Harb 6
          6 01-31-24 8:51 AM 6
                      LOCAL OPTION SALES TAX AMENDMENTS
                                      2024 GENERAL SESSION
                                           STATE OF UTAH
                                 Chief Sponsor: Joseph Elison
                               Senate Sponsor: Derrin R. Owens
 6
 LONG TITLE
 General Description:
        This bill modifies provisions related to local option sales and use taxes.
 Highlighted Provisions:
        This bill:
        < defines terms;
        < allows certain local governments to impose a sales and use tax for purposes of
 funding emergency services;
        < establishes requirements for a local government to impose the tax, dependent on the
 rate imposed;
        < addresses the administration, collection, and distribution of tax revenue;
        < allows the State Tax Commission to retain an administrative charge from collected
 tax revenue;
        < repeals provisions allowing certain counties to impose a rural county health care
 facilities tax to fund emergency medical services; and
        < makes technical and conforming changes.
 Money Appropriated in this Bill:
        None
 Other Special Clauses:
                                                                                                    H.B. 442
        This bill provides a special effective date.
 Utah Code Sections Affected:
     *HB0442*
       H.B. 442                                                                   01-31-24 8:51 AM
 AMENDS:
         17D-1-103, as last amended by Laws of Utah 2023, Chapter 15
         59-12-801 (Superseded 07/01/24), as last amended by Laws of Utah 2023, Chapters
 92, 329
         59-12-801 (Effective 07/01/24), as last amended by Laws of Utah 2023, Chapters 92,
 310 and 329
         59-12-802, as last amended by Laws of Utah 2023, Chapters 92, 471
 ENACTS:
         59-12-2401, Utah Code Annotated 1953
         59-12-2402, Utah Code Annotated 1953
         59-12-2403, Utah Code Annotated 1953
         59-12-2404, Utah Code Annotated 1953
         59-12-2405, Utah Code Annotated 1953
         59-12-2406, Utah Code Annotated 1953
42
 Be it enacted by the Legislature of the state of Utah:
         Section 1. Section 17D-1-103 is amended to read:
         17D-1-103. Special service district status, powers, and duties -- Registration as a
 limited purpose entity -- Limitation on districts providing jail service.
         (1) A special service district:
         (a) is:
         (i) a body corporate and politic with perpetual succession, separate and distinct from
 the county or municipality that creates it;
         (ii) a quasi-municipal corporation; and
         (iii) a political subdivision of the state; and
         (b) may sue and be sued.
         (2) A special service district may:
         (a) exercise the power of eminent domain possessed by the county or municipality that
 creates the special service district;
         (b) enter into a contract that the governing authority considers desirable to carry out
 special service district functions, including a contract:
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       01-31-24 8:51 AM                                                                            H.B. 442
         (i) with the United States or an agency of the United States, the state, an institution of
 higher education, a county, a municipality, a school district, a special district, another special
 service district, or any other political subdivision of the state; or
         (ii) that includes provisions concerning the use, operation, and maintenance of special
 service district facilities and the collection of fees or charges with respect to commodities,
 services, or facilities that the district provides;
         (c) acquire or construct facilities;
         (d) acquire real or personal property, or an interest in real or personal property,
 including water and water rights, whether by purchase, lease, gift, devise, bequest, or
 otherwise, and whether the property is located inside or outside the special service district, and
 own, hold, improve, use, finance, or otherwise deal in and with the property or property right;
         (e) sell, convey, lease, exchange, transfer, or otherwise dispose of all or any part of the
 special service district's property or assets, including water and water rights;
         (f) mortgage, pledge, or otherwise encumber all or any part of the special service
 district's property or assets, including water and water rights;
         (g) enter into a contract with respect to the use, operation, or maintenance of all or any
 part of the special service district's property or assets, including water and water rights;
         (h) accept a government grant or loan and comply with the conditions of the grant or
 loan;
         (i) use an officer, employee, property, equipment, office, or facility of the county or
 municipality that created the special service district, subject to reimbursement as provided in
 Subsection (4);
         (j) employ one or more officers, employees, or agents, including one or more
 engineers, accountants, attorneys, or financial consultants, and establish their compensation;
         (k) designate an assessment area and levy an assessment as provided in Title 11,
 Chapter 42, Assessment Area Act;
         (l) contract with a franchised, certificated public utility for the construction and
 operation of an electrical service distribution system within the special service district;
         (m) borrow money and incur indebtedness;
         (n) as provided in Part 5, Special Service District Bonds, issue bonds for the purpose of
 acquiring, constructing, and equipping any of the facilities required for the services the special
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        H.B. 442                                                                      01-31-24 8:51 AM
 service district is authorized to provide, including:
         (i) bonds payable in whole or in part from taxes levied on the taxable property in the
 special service district;
         (ii) bonds payable from revenues derived from the operation of revenue-producing
 facilities of the special service district;
         (iii) bonds payable from both taxes and revenues;
         (iv) guaranteed bonds, payable in whole or in part from taxes levied on the taxable
 property in the special service district;
         (v) tax anticipation notes;
         (vi) bond anticipation notes;
         (vii) refunding bonds;
         (viii) special assessment bonds; and
         (ix) bonds payable in whole or in part from mineral lease payments as provided in
 Section 11-14-308;
         (o) except as provided in Subsection (5), impose fees or charges or both for
 commodities, services, or facilities that the special service district provides;
         (p) provide to an area outside the special service district's boundary, whether inside or
 outside the state, a service that the special service district is authorized to provide within its
 boundary, if the governing body makes a finding that there is a public benefit to providing the
 service to the area outside the special service district's boundary;
         (q) provide other services that the governing body determines will more effectively
 carry out the purposes of the special service district; [and]
         (r) adopt an official seal for the special service district[.]; and
         (s) if authorized, impose an emergency services tax under Title 59, Chapter 12, Part 24,
 Emergency Services Tax.
         (3) (a) Each special service district shall register and maintain the special service
 district's registration as a limited purpose entity, in accordance with Section 67-1a-15.
         (b) A special service district that fails to comply with Subsection (3)(a) or Section
 67-1a-15 is subject to enforcement by the state auditor, in accordance with Section 67-3-1.
         (4) Each special service district that uses an officer, employee, property, equipment,
 office, or facility of the county or municipality that created the special service district shall
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        01-31-24 8:51 AM                                                                            H.B. 442
 reimburse the county or municipality a reasonable amount for what the special service district
 uses.
         (5) (a) A special service district that provides jail service as provided in Subsection
 17D-1-201(10) may not impose a fee or charge for the service it provides.
         (b) Subsection (5)(a) may not be construed to limit a special service district that
 provides jail service from:
         (i) entering into a contract with the federal government, the state, or a political
 subdivision of the state to provide jail service for compensation; or
         (ii) receiving compensation for jail service it provides under a contract described in
 Subsection (5)(b)(i).
         Section 2. Section 59-12-801 (Superseded 07/01/24) is amended to read:
         59-12-801 (Superseded 07/01/24). Definitions.
         As used in this part:
         [(1) "Affected area" means the portion of a county in which a tax is imposed under
 Subsection 59-12-802(4).]
         [(2)] (1) "Emergency medical services" means the same as that term is defined in
 Section 26B-4-101.
         [(3)] (2) "Federally qualified health center" means the same as that term is defined in
 42 U.S.C. Sec. 1395x.
         [(4)] (3) "Freestanding urgent care center" means a facility that provides outpatient
 health care service:
         (a) on an as-needed basis, without an appointment;
         (b) to the public;
         (c) for the diagnosis and treatment of a medical condition if that medical condition
 does not require hospitalization or emergency intervention for a life threatening or potentially
 permanently disabling condition; and
         (d) including one or more of the following services:
         (i) a medical history physical examination;
         (ii) an assessment of health status; or
         (iii) treatment:
         (A) for a variety of medical conditions; and
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        H.B. 442                                                                     01-31-24 8:51 AM
         (B) that is commonly offered in a physician's office.
         [(5) "Municipality" means a city or town.]
         [(6)] (4) "Nursing care facility" means the same as that term is defined in Section
 26B-2-201.
         [(7) "Political subdivision" means a county, municipality, special district, or special
 service district.]
         [(8)] (5) "Rural city hospital" means a hospital owned by a city that is located within a
 third, fourth, fifth, or sixth class county.
         [(9)] (6) "Rural county health care facility" means a:
         (a) rural county hospital; or
         (b) rural county nursing care facility.
         [(10)] (7) "Rural county hospital" means a hospital owned by a county that is:
         (a) a third, fourth, fifth, or sixth class county, as defined in Section 17-50-501; and
         (b) located outside of a standard metropolitan statistical area, as designated by the
 United States Bureau of the Census.
         [(11)] (8) "Rural county nursing care facility" means a nursing care facility owned by:
         (a) a county that is:
         (i) a third, fourth, fifth, or sixth class county, as defined in Section 17-50-501; and
         (ii) located outside of a standard metropolitan statistical area, as designated by the
 United States Census Bureau; or
         (b) a special service district if the special service district is:
         (i) created for the purpose of operating the nursing care facility; and
         (ii) within a county that is:
         (A) a third, fourth, fifth, or sixth class county, as defined in Section 17-50-501; and
         (B) located outside of a standard metropolitan statistical area, as designated by the
 United States Census Bureau.
         [(12)] (9) "Rural emergency medical services" means emergency medical services that
 are provided by a county that is:
         (a) a third, fourth, fifth, or sixth class county, as defined in Section 17-50-501; and
         (b) located outside of a standard metropolitan statistical area, as designated by the
 United States Census Bureau.
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        01-31-24 8:51 AM                                                                        H.B. 442
         [(13)] (10) "Rural health clinic" means the same as that term is defined in 42 U.S.C.
 Sec. 1395x.
         Section 3. Section 59-12-801 (Effective 07/01/24) is amended to read:
         59-12-801 (Effective 07/01/24). Definitions.
         As used in this part:
         [(1) "Affected area" means the portion of a county in which a tax is imposed under
 Subsection 59-12-802(4).]
         [(2)] (1) "Emergency medical services" means the same as that term is defined in
 Section 53-2d-101.
         [(3)] (2) "Federally qualified health center" means the same as that term is defined in
 42 U.S.C. Sec. 1395x.
         [(4)] (3) "Freestanding urgent care center" means a facility that provides outpatient
 health care service:
         (a) on an as-needed basis, without an appointment;
         (b) to the public;
         (c) for the diagnosis and treatment of a medical condition if that medical condition
 does not require hospitalization or emergency intervention for a life threatening or potentially
 permanently disabling condition; and
         (d) including one or more of the following services:
         (i) a medical history physical examination;
         (ii) an assessment of health status; or
         (iii) treatment:
         (A) for a variety of medical conditions; and
         (B) that is commonly offered in a physician's office.
         [(5) "Municipality" means a city or town.]
         [(6)] (4) "Nursing care facility" means the same as that term is defined in Section
 26B-2-201.
         [(7) "Political subdivision" means a county, municipality, local district, or special
 service district.]
         [(8)] (5) "Rural city hospital" means a hospital owned by a city that is located within a
 third, fourth, fifth, or sixth class county.
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        H.B. 442                                                                    01-31-24 8:51 AM
        [(9)] (6) "Rural county health care facility" means a:
        (a) rural county hospital; or
        (b) rural county nursing care facility.
        [(10)] (7) "Rural county hospital" means a hospital owned by a county that is:
        (a) a third, fourth, fifth, or sixth class county, as defined in Section 17-50-501; and
        (b) located outside of a standard metropolitan statistical area, as designated by the
 United States Bureau of the Census.
        [(11)] (8) "Rural county nursing care facility" means a nursing care facility owned by:
        (a) a county that is:
        (i) a third, fourth, fifth, or sixth class county, as defined in Section 17-50-501; and
        (ii) located outside of a standard metropolitan statistical area, as designated by the
 United States Census Bureau; or
        (b) a special service district if the special service district is:
        (i) created for the purpose of operating the nursing care facility; and
        (ii) within a county that is:
        (A) a third, fourth, fifth, or sixth class county, as defined in Section 17-50-501; and
        (B) located outside of a standard metropolitan statistical area, as designated by the
 United States Census Bureau.
        [(12)] (9) "Rural emergency medical services" means emergency medical services that
 are provided by a county that is:
        (a) a third, fourth, fifth, or sixth class county, as defined in Section 17-50-501; and
        (b) located outside of a standard metropolitan statistical area, as designated by the
 United States Census Bureau.
        [(13)] (10) "Rural health clinic" means the same as that term is defined in 42 U.S.C.
 Sec. 1395x.
        Section 4. Section 59-12-802 is amended to read:
        59-12-802. Imposition of rural county health care facilities tax -- Expenditure of
 tax revenue -- Base -- Rate -- Administration, collection, and enforcement of tax --
 Administrative charge.
        (1) (a) A county legislative body of [the following counties] a county of the third,
 fourth, fifth, or sixth class may impose a sales and use tax of up to 1% on the transactions
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        01-31-24 8:51 AM                                                                         H.B. 442
 described in Subsection 59-12-103(1) located within the county[:].
        [(i) a county of the third, fourth, fifth, or sixth class; or]
        [(ii) a county of the second class that has:]
        [(A) a national park within or partiall