Bill Summary – FastDemocracy

Enrolled Copy                                                                      H.B. 280
                            TRANSIENT ROOM TAX PROVISIONS
                                      2020 GENERAL SESSION
                                           STATE OF UTAH
                               Chief Sponsor: Carl R. Albrecht
                                Senate Sponsor: Evan J. Vickers
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 LONG TITLE
 General Description:
        This bill amends provisions related to the transient room tax.
 Highlighted Provisions:
        This bill:
        < defines terms;
        < modifies expenditure requirements for certain counties that impose a transient room
 tax;
        < requires a county that imposes a transient room tax to include certain expenditure
 information in the county's annual report;
        < allows a county auditor to coordinate with the State Tax Commission in
 determining whether to require an audit of any person that is required to remit a
 transient room tax;
        < removes certain time limitations applicable to a municipality's authority to impose a
 transient room tax; and
        < makes technical and conforming changes.
 Money Appropriated in this Bill:
        This bill appropriates in fiscal year 2021:
        < to the State Tax Commission -- Tax Administration -- as an ongoing appropriation:
            C   from the General Fund Restricted - Sales and Use Tax Admin. Fees, $264,000.
 Other Special Clauses:
        None
       H.B. 280
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 Utah Code Sections Affected:
 AMENDS:
        17-31-2, as last amended by Laws of Utah 2019, Chapters 136 and 304
        17-31-5.5, as last amended by Laws of Utah 2019, Chapter 304
        59-12-118, as last amended by Laws of Utah 1994, Chapter 259
        59-12-302, as last amended by Laws of Utah 2018, Chapters 258 and 312
        59-12-353, as last amended by Laws of Utah 2015, Chapter 258
36
 Be it enacted by the Legislature of the state of Utah:
        Section 1. Section 17-31-2 is amended to read:
        17-31-2. Purposes of transient room tax and expenditure of revenue -- Purchase
 or lease of facilities -- Mitigating impacts of recreation, tourism, or conventions --
 Issuance of bonds.
        (1) As used in this section:
        (a) "Aircraft" means the same as that term is defined in Section 72-10-102.
        (b) "Airport" means the same as that term is defined in Section 72-10-102.
        (c) "Airport authority" means the same as that term is defined in Section 72-10-102.
        (d) "Airport operator" means the same as that term is defined in Section 72-10-102.
        (e) "Base year revenue" means the amount of revenue generated by a transient room tax
 and collected by a county for fiscal year 2018-19.
        (f) "Base year promotion expenditure" means the amount of revenue generated by a
 transient room tax that a county spent for the purpose described in Subsection (2)(a) during
 fiscal year 2018-19.
        [(a)] (g) "Eligible town" means a town that:
        (i) is located within a county that has a national park within or partially within the
 county's boundaries; and
        (ii) imposes a resort communities tax authorized by Section 59-12-401.
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         (h) "Emergency medical services provider" means an eligible town, a local district, or a
 special service district.
         [(b)] (i) "Town" means a municipality that is classified as a town in accordance with
 Section 10-2-301.
         [(c)] (j) "Transient room tax" means a tax at a rate not to exceed 4.25% authorized by
 Section 59-12-301.
         (2) [Any] Subject to the requirements of this section, a county legislative body may
 impose the transient room tax for the purposes of:
         (a) establishing and promoting recreation, tourism, film production, and conventions;
         (b) acquiring, leasing, constructing, furnishing, maintaining, or operating:
         (i) convention meeting rooms;
         (ii) exhibit halls;
         (iii) visitor information centers;
         (iv) museums;
         (v) sports and recreation facilities including practice fields, stadiums, and arenas; [and]
         (vi) related facilities;
         (vii) if a national park is located within or partially within the county, the following on
 any route designated by the county legislative body:
         (A) transit service, including shuttle service; and
         (B) parking infrastructure; and
         (viii) an airport, if:
         (A) the county is a county of the fourth, fifth, or sixth class; and
         (B) the county is the airport operator of the airport;
         (c) acquiring land, leasing land, or making payments for construction or infrastructure
 improvements required for or related to the purposes listed in Subsection (2)(b); [and]
         (d) as required to mitigate the impacts of recreation, tourism, or conventions in
 counties of the fourth, fifth, and sixth class, paying for:
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        (i) solid waste disposal operations;
        (ii) emergency medical services;
        (iii) search and rescue activities;
        (iv) law enforcement activities; and
        (v) road repair and upgrade of:
        (A) class B roads, as defined in Section 72-3-103;
        (B) class C roads, as defined in Section 72-3-104; or
        (C) class D roads, as defined in Section 72-3-105[.]; and
        (e) making the annual payment of principal, interest, premiums, and necessary reserves
 for any of the aggregate of bonds authorized under Subsection (5).
        (3) (a) The county legislative body of a county that imposes a transient room tax at a
 rate of 3% or less may expend the revenue generated as provided in Subsection (4), after
 making any reduction required by Subsection (6).
        (b) The county legislative body of a county that imposes a transient room tax at a rate
 that exceeds 3% or increases the rate of transient room tax above 3% may expend:
        (i) the revenue generated from the transient room tax at a rate of 3% as provided in
 Subsection (4), after making any reduction required by Subsection (6); and
        (ii) the revenue generated from the portion of the rate that exceeds 3%:
        (A) for any combination of the purposes described in Subsections (2) and (5); and
        (B) regardless of the limitation on expenditures for the purposes described in
 Subsection (4).
        (4) Subject to Subsection (6), a county may not expend more than 1/3 of the revenue
 generated by a rate of transient room tax that does not exceed 3%, for any combination of the
 [following purposes:] purposes described in Subsections (2)(b) through (2)(e).
        [(a) (i) acquiring, leasing, constructing, furnishing, maintaining, or operating:]
        [(A) convention meeting rooms;]
        [(B) exhibit halls;]
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        Enrolled Copy                                                                            H.B. 280
         [(C) visitor information centers;]
         [(D) museums;]
         [(E) sports and recreation facilities including practice fields, stadiums, and arenas; and]
         [(F) related facilities; and]
         [(ii) acquiring land, leasing land, or making payments for construction or infrastructure
 improvements required for or related to the purposes described in Subsection (4)(a)(i);]
         [(b) as required to mitigate the impacts of recreation, tourism, or conventions in
 counties of the fourth, fifth, and sixth class, to pay for:]
         [(i) solid waste disposal operations;]
         [(ii) emergency medical services;]
         [(iii) search and rescue activities;]
         [(iv) law enforcement activities; and]
         [(v) road repair and upgrade of:]
         [(A) class B roads, as defined in Section 72-3-103;]
         [(B) class C roads, as defined in Section 72-3-104; or]
         [(C) class D roads, as defined in Section 72-3-105; or]
         [(c) making the annual payment of principal, interest, premiums, and necessary
 reserves for any or the aggregate of bonds authorized under Subsection (5).]
         (5) (a) The county legislative body may issue bonds or cause bonds to be issued, as
 permitted by law, to pay all or part of any costs incurred for the purposes set forth in
 [Subsection (4)(a) or (b)] Subsections (2)(b) through (2)(d) that are permitted to be paid from
 bond proceeds.
         (b) If a county legislative body does not need the revenue generated by the transient
 room tax for payment of principal, interest, premiums, and reserves on bonds issued as
 provided in Subsection [(4)(c)] (2)(e), the county legislative body shall expend that revenue for
 the purposes described in Subsection (2), subject to the limitation of Subsection (4).
         (6) (a) In addition to the purposes described in Subsection (2), a county legislative
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 body may expend up to 4% of the total revenue generated by a transient room tax to pay a
 provider for emergency medical services in one or more eligible towns.
         [(b) An emergency medical services provider means an eligible town, a local district,
 or a special service district.]
         [(c)] (b) A county legislative body shall reduce the amount that the county is
 authorized to expend for the purposes described in Subsection (4) by subtracting the amount of
 transient room tax revenue expended in accordance with Subsection (6)(a) from the amount of
 revenue described in Subsection (4).
         (7) (a) A county legislative body in a county of the fourth, fifth, or sixth class shall
 expend the revenue generated by a transient room tax as follows:
         (i) an amount equal to the county's base year promotion expenditure for the purpose
 described in Subsection (2)(a);
         (ii) an amount equal to the difference between the county's base year revenue and the
 county's base year promotion expenditure in accordance with Subsections (3) through (6); and
         (iii) (A) 37% of the revenue that exceeds the county's base year revenue for the purpose
 described in Subsection (2)(a); and
         (B) subject to Subsection (7)(b), 63% of the revenue that exceeds the county's base
 year revenue for any combination of the purposes described in Subsections (2)(b) through (e)
 or to pay an emergency medical services provider for emergency medical services in one or
 more eligible towns.
         (b) A county legislative body in a county of the fourth, fifth, or sixth class may not:
         (i) expend more than 4% of the revenue generated by a transient room tax to pay an
 emergency medical services provider for emergency medical services in one or more eligible
 towns; or
         (ii) expend revenue generated by a transient room tax for the purpose described in
 Subsection (2)(e) in an amount that exceeds the county's base year promotion expenditure.
         (c) The provisions of this Subsection (7) apply notwithstanding any other provision of
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        Enrolled Copy                                                                             H.B. 280
 this section.
         (d) If the total amount of revenue generated by a transient room tax in a county of the
 fourth, fifth, or sixth class is less than the county's base year promotion expenditure:
         (i) Subsections (7)(a) through (c) do not apply; and
         (ii) the county legislative body shall expend the revenue generated by the transient
 room tax in accordance with Subsections (3) through (6).
         Section 2. Section 17-31-5.5 is amended to read:
         17-31-5.5. Report to county legislative body -- Content.
         (1) The legislative body of each county that imposes a transient room tax under Section
 59-12-301 or a tourism, recreation, cultural, convention, and airport facilities tax under Section
 59-12-603 shall prepare annually a report in accordance with Subsection (2).
         (2) The report described in Subsection (1) shall include a breakdown of expenditures
 into the following categories:
         (a) for the transient room tax, identification of expenditures for:
         (i) establishing and promoting:
         (A) recreation;
         (B) tourism;
         (C) film production; and
         (D) conventions;
         (ii) acquiring, leasing, constructing, furnishing, or operating:
         (A) convention meeting rooms;
         (B) exhibit halls;
         (C) visitor information centers;
         (D) museums; and
         (E) related facilities;
         (iii) acquiring or leasing land required for or related to the purposes listed in
 Subsection (2)(a)(ii);
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        (iv) mitigation costs as identified in Subsection 17-31-2(2)(d); and
        (v) making the annual payment of principal, interest, premiums, and necessary reserves
 for any or the aggregate of bonds issued to pay for costs referred to in Subsections
 17-31-2[(4)(c)] (2)(e) and (5)(a); and
        (b) for the tourism, recreation, cultural, convention, and airport facilities tax,
 identification of expenditures for:
        (i) financing tourism promotion, which means an activity to develop, encourage,
 solicit, or market tourism that attracts transient guests to the county, including planning,
 product development, and advertising;
        (ii) the development, operation, and maintenance of the following facilities as defined
 in Section 59-12-602:
        (A) an airport facility;
        (B) a convention facility;
        (C) a cultural facility;
        (D) a recreation facility; and
        (E) a tourist facility; and
        (iii) a pledge as security for evidences of indebtedness under Subsection 59-12-603(3).
        (3) For the transient room tax, the report described in Subsection (1) shall include a
 breakdown of each expenditure described in Subsection (2)(a)(i), including:
        (a) whether the expenditure was used for in-state and out-of-state promotion efforts;
        (b) an explanation of how the expenditure targeted a cost created by tourism; and
        (c) an accounting of the expenditure showing that the expenditure was used only for
 costs directly related to a cost created by tourism.
        [(3)] (4) A county legislative body shall provide a copy of the report described in
 Subsection (1) to:
        (a) the Utah Office of Tourism within the Governor's Office of Economic
 Development;
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        (b) its tourism tax advisory board; and
        (c) the Office of the Legislative Fiscal Analyst.
        Section 3. Section 59-12-118 is amended to read:
        59-12-118. Commission's authority to administer sales and use tax.
        Except as provided in [Section] Sections 59-12-209 and 59-12-302, the commission
 shall have exclusive authority to administer, operate, and enforce the provisions of this chapter
 including:
        (1) determining, assessing, and collecting any sales and use tax imposed pursuant to
 this chapter;
        (2) representing each county, city, and town's interest in any administrative proceeding
 involving the state or local option sales and use tax;
        (3) adjudicating any administrative proceedings involving the state or local option sales
 and use tax;
        (4) waiving, reducing, or compromising any penalty and interest imposed in connection
 with any determination of state or local option sales or use tax; and
        (5) prescribing forms and rules to conform with this chapter for the making of returns
 and for the ascertainment, assessment, and collection of the taxes imposed under this chapter.
        Section 4. Section 59-12-302 is amended to read:
        59-12-302. Collection of tax -- Administrative charge.
        (1) Except as provided in [Subsection (2) or (3)] Subsections (2), (3), and (4), the tax
 authorized under this part shall be administered, collected, and enforced in accordance with:
        (a) the same procedures used to administer, collect, and enforce the tax under:
        (i) Part 1, Tax Collection; or
        (ii) Part 2, Local Sales and Use Tax Act; and
        (b) Chapter 1, General Taxation Policies.
        (2) The location of a transaction shall be determined in accordance with Sections
 59-12-211 through 59-12-215.
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