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H.B. 126
1
COUNTY OPTION SALES AND USE TAX FOR
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AGRICULTURAL LAND AND OPEN LAND
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2006 GENERAL SESSION
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STATE OF UTAH
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Chief Sponsor: Craig W. Buttars
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Senate Sponsor:
____________
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LONG TITLE
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General Description:
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This bill modifies the Sales and Use Tax Act to enact the County Option Sales and Use
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Tax for Agricultural Land and Open Land Act.
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Highlighted Provisions:
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This bill:
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. enacts the County Option Sales and Use Tax for Agricultural Land and Open Land
15
Act;
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. provides definitions;
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. authorizes a qualifying county to impose the tax beginning on or after January 1,
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2007, and ending on or before December 31, 2011;
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. provides procedures and requirements for the imposition, enactment, and repeal of
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the tax;
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. provides procedures and requirements for the administration, collection, and
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enforcement of the tax by the State Tax Commission and provides that the State Tax
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Commission may collect an administrative fee for administering, collecting, and
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enforcing the tax;
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. provides procedures and requirements for the allocation, distribution, and
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expenditure of tax revenues;
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. requires a county legislative body to establish an advisory board to advise the
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county legislative body on the expenditure of tax revenues and provides procedures and
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requirements for establishing an advisory board;
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. addresses a seller's or certified service provider's reliance on State Tax Commission
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information or certain systems;
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. requires the Natural Resources, Agriculture, and Environment Interim Committee to
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study the tax; and
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. makes technical changes.
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Monies Appropriated in this Bill:
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None
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Other Special Clauses:
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This bill takes effect on July 1, 2006.
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Utah Code Sections Affected:
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ENACTS:
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59-12-1701, Utah Code Annotated 1953
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59-12-1702, Utah Code Annotated 1953
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59-12-1703, Utah Code Annotated 1953
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59-12-1704, Utah Code Annotated 1953
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59-12-1705, Utah Code Annotated 1953
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59-12-1706, Utah Code Annotated 1953
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59-12-1707, Utah Code Annotated 1953
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
59-12-1701
is enacted to read:
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Part 17. County Option Sales and Use Tax for Agricultural Land and Open Land Act
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59-12-1701. Title.
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This part is known as the "County Option Sales and Use Tax for Agricultural Land and
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Open Land Act."
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Section 2.
Section
59-12-1702
is enacted to read:
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59-12-1702. Definitions.
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As used in this part:
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(1) "Agricultural land" has the same meaning as "land in agricultural use" under
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Section
59-2-502
.
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(2) "Annexation" means an annexation to a county under Title 17, Chapter 2,
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Annexation to County.
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(3) "Annexing area" means an area that is annexed into a county.
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(4) "Governmental entity" means:
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(a) the United States;
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(b) the state;
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(c) a county;
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(d) a city;
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(e) a town;
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(f) a political subdivision of an entity described in Subsections (4)(b) through (e); or
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(g) an agency, a department, a division, or other similar instrumentality of an entity
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described in Subsections (4)(a) through (f).
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(5) "Municipality" means a city or town.
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(6) "Municipality's proportionate share" means a percentage of revenues described in
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Subsection
59-12-1704
(2)(b) equal to the percentage that the population of a municipality
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bears to the total population of the county in which the municipality is located.
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(7) "Open land" means land that is preserved predominantly in a natural, open, and
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undeveloped condition.
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(8) "Public land" means land that is owned by a governmental entity.
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(9) "Qualifying county" means a county, as determined by resolution of the county
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legislative body on the day on which the county legislative body adopts the resolution required
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by Subsection
59-12-1703
(2)(a)(i):
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(a) of the third, fourth, fifth, or sixth class;
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(b) that has $100,000,000 or more in cash receipts from farming as estimated for the
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most recent calendar year that is reported in the Annual Bulletin issued by the Utah
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Agricultural Statistics Service of the National Agricultural Statistics Service, United States
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Department of Agriculture;
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(c) in which the county legislative body has adopted by resolution a method for
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prioritizing lands that are eligible for the establishment of a conservation easement to protect
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agricultural land and open land;
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(d) that has an agricultural advisory board:
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(i) established by resolution of the county legislative body; and
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(ii) in operation;
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(e) that has an average annual rate of change in population of 1% or more as estimated:
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(i) by the Utah Population Estimates Committee; and
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(ii) for the four-year period listed as the most recent four-year estimate that is available
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for the county at the time the resolution is adopted; and
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(f) in which 60% or less of the land within the county is public land.
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(10) "Unincorporated area's proportionate share" means a percentage of revenues
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described in Subsection
59-12-1704
(2)(b) equal to the percentage that the population of the
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unincorporated area of a county bears to the total population of the county.
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Section 3.
Section
59-12-1703
is enacted to read:
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59-12-1703. Imposition of tax -- Base -- Rate -- Opinion question election -- Use of
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tax revenues -- Administration, collection, and enforcement of tax by commission --
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Administrative fee -- Enactment or repeal of tax -- Annexation -- Notice.
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(1) (a) Beginning on or after January 1, 2007, and ending on or before December 31,
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2011, and subject to the other provisions of this part, a county legislative body of a qualifying
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county may impose a sales and use tax of .125%:
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(i) except as provided in Subsections (1)(b) and
59-12-207.1
(7)(c), on the transactions:
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(A) described in Subsection
59-12-103
(1); and
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(B) within the county, including the cities and towns within the county;
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(ii) for the purposes described in Section
59-12-1704
; and
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(iii) in addition to any other sales and use tax authorized under this chapter.
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(b) A county legislative body may not impose a tax under this section on the sales and
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uses described in Section
59-12-104
to the extent the sales and uses are exempt from taxation
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under Section
59-12-104
.
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(c) For purposes of this Subsection (1), the location of a transaction shall be
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determined in accordance with Sections
59-12-207.1
through
59-12-207.4
.
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(2) (a) Before imposing a tax under this part, a county legislative body shall:
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(i) adopt one resolution:
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(A) finding that the county is a qualifying county; and
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(B) stating the county legislative body's intent to submit an opinion question to the
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county's registered voters voting on the imposition of the tax in accordance with Subsection
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(2)(a)(ii); and
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(ii) subject to Subsection (2)(b), submit an opinion question to the county's registered
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voters voting on the imposition of the tax so that each registered voter has the opportunity to
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express the registered voter's opinion on whether a tax should be imposed under this part.
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(b) The election required by Subsection (2)(a)(ii) shall be held:
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(i) (A) at a regular general election; and
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(B) in accordance with the procedures and requirements of Title 20A, Election Code,
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governing regular general elections; or
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(ii) (A) at a municipal general election; and
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(B) in accordance with the procedures and requirements of Title 20A, Election Code,
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governing municipal general elections.
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(3) Subject to the other provisions of this part, if a county legislative body of a
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qualifying county determines that a majority of the county's registered voters voting on the
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imposition of the tax have voted in favor of the imposition of the tax in accordance with
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Subsection (2), the county legislative body of the qualifying county shall enact the tax:
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(a) by a majority vote of all of the members of the county legislative body;
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(b) by enacting an ordinance:
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(i) imposing the tax;
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(ii) (A) creating a fund to deposit the revenues generated by the tax; and
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(B) providing procedures and requirements for the administration of the fund described
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in Subsection (3)(b)(ii)(A); and
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(iii) creating an advisory board in accordance with Section
59-12-1705
to make
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findings and recommendations to the county legislative body; and
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(c) in accordance with Subsection (5).
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(4) (a) (i) Except as provided in Subsection (4)(a)(ii), the tax authorized under this part
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shall be administered, collected, and enforced in accordance with:
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(A) the same procedures used to administer, collect, and enforce the tax under:
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(I) Part 1, Tax Collection; or
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(II) Part 2, Local Sales and Use Tax Act; and
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(B) Chapter 1, General Taxation Policies.
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(ii) Notwithstanding Subsection (4)(a)(i), a tax under this part is not subject to
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Subsections
59-12-205
(2) through (9).
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(b) (i) The commission may retain an amount of tax collected under this part of not to
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exceed the lesser of:
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(A) 1.5%; or
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(B) an amount equal to the cost to the commission of administering this part.
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(ii) Any amount the commission retains under Subsection (4)(b)(i) shall be:
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(A) placed in the Sales and Use Tax Administrative Fees Account; and
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(B) used as provided in Subsection
59-12-206
(2).
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(5) (a) (i) Except as provided in Subsection (5)(b) or (c), if, on or after October 1,
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2006, a county legislative body enacts or repeals a tax under this part, the enactment or repeal
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shall take effect:
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(A) on the first day of a calendar quarter; and
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(B) after a 90-day period beginning on the date the commission receives notice meeting
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the requirements of Subsection (5)(a)(ii) from the county.
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(ii) The notice described in Subsection (5)(a)(i)(B) shall state:
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(A) that the county legislative body will enact or repeal a tax under this part;
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(B) the statutory authority for the tax described in Subsection (5)(a)(ii)(A);
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(C) the effective date of the tax described in Subsection (5)(a)(ii)(A); and
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(D) if the county legislative body enacts the tax described in Subsection (5)(a)(ii)(A),
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the rate of the tax.
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(b) (i) Notwithstanding Subsection (5)(a)(i), for a transaction described in Subsection
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(5)(b)(iii), the enactment of a tax shall take effect on the first day of the first billing period:
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(A) that begins after the effective date of the enactment of the tax; and
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(B) if the billing period for the transaction begins before the effective date of the
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enactment of the tax under Subsection (1).
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(ii) Notwithstanding Subsection (5)(a)(i), for a transaction described in Subsection
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(5)(b)(iii), the repeal of a tax shall take effect on the first day of the last billing period:
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(A) that began before the effective date of the repeal of the tax; and
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(B) if the billing period for the transaction begins before the effective date of the repeal
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of the tax imposed under Subsection (1).
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(iii) Subsections (5)(b)(i) and (ii) apply to transactions subject to a tax under:
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(A) Subsection
59-12-103
(1)(b);
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(B) Subsection
59-12-103
(1)(c);
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(C) Subsection
59-12-103
(1)(d);
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(D) Subsection
59-12-103
(1)(e);
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(E) Subsection
59-12-103
(1)(f);
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(F) Subsection
59-12-103
(1)(g);
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(G) Subsection
59-12-103
(1)(h);
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(H) Subsection
59-12-103
(1)(i);
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(I) Subsection
59-12-103
(1)(j); or
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(J) Subsection
59-12-103
(1)(k).
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(c) (i) Notwithstanding Subsection (5)(a)(i), if a tax due under this chapter on a
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catalogue sale is computed on the basis of sales and use tax rates published in the catalogue, an
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enactment or repeal of a tax described in Subsection (5)(a)(i) takes effect:
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(A) on the first day of a calendar quarter; and
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(B) beginning 60 days after the effective date of the enactment or repeal under
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Subsection (5)(a)(i).
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(ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
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the commission may by rule define the term "catalogue sale."
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(d) (i) Except as provided in Subsection (5)(e) or (f), if, for an annexation that occurs
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on or after October 1, 2006, the annexation will result in the enactment or repeal of a tax under
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this part for an annexing area, the enactment or repeal shall take effect:
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(A) on the first day of a calendar quarter; and
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(B) after a 90-day period beginning on the date the commission receives notice meeting
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the requirements of Subsection (5)(d)(ii) from the county legislative body that annexes the
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annexing area.
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(ii) The notice described in Subsection (5)(d)(i)(B) shall state:
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(A) that the annexation described in Subsection (5)(d)(i)(B) will result in an enactment
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or repeal of a tax under this part for the annexing area;
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(B) the statutory authority for the tax described in Subsection (5)(d)(ii)(A);
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(C) the effective date of the tax described in Subsection (5)(d)(ii)(A); and
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(D) if the county legislative body enacts the tax described in Subsection (5)(d)(ii)(A),
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the rate of the tax.
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(e) (i) Notwithstanding Subsection (5)(d)(i), for a transaction described in Subsection
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(5)(e)(iii), the enactment of a tax shall take effect on the first day of the first billing period:
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(A) that begins after the effective date of the enactment of the tax; and
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(B) if the billing period for the transaction begins before the effective date of the
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enactment of the tax under Subsection (1).
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(ii) Notwithstanding Subsection (5)(d)(i), for a transaction described in Subsection
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(5)(e)(iii), the repeal of a tax shall take effect on the first day of the last billing period:
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(A) that began before the effective date of the repeal of the tax; and
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(B) if the billing period for the transaction begins before the effective date of the repeal
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of the tax imposed under Subsection (1).
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(iii) Subsections (5)(e)(i) and (ii) apply to transactions subject to a tax under:
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(A) Subsection
59-12-103
(1)(b);
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(B) Subsection
59-12-103
(1)(c);
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(C) Subsection
59-12-103
(1)(d);
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(D) Subsection
59-12-103
(1)(e);
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(E) Subsection
59-12-103
(1)(f);
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(F) Subsection
59-12-103
(1)(g);
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(G) Subsection
59-12-103
(1)(h);
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(H) Subsection
59-12-103
(1)(i);
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(I) Subsection
59-12-103
(1)(j); or
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(J) Subsection
59-12-103
(1)(k).
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(f) (i) Notwithstanding Subsection (5)(d)(i), if a tax due under this chapter on a
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catalogue sale is computed on the basis of sales and use tax rates published in the catalogue, an
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enactment or repeal of a tax described in Subsection (5)(d)(i) takes effect:
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(A) on the first day of a calendar quarter; and
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(B) beginning 60 days after the effective date of the enactment or repeal under
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Subsection (5)(d)(i).
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(ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
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the commission may by rule define the term "catalogue sale."
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Section 4.
Section
59-12-1704
is enacted to read:
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59-12-1704. Allocation, distribution, and expenditure of tax revenues.
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(1) After the commission subtracts the amount described in Subsection
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59-12-1703
(4)(b), the remaining revenues generated by a tax under this part shall be:
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(a) transmitted:
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(i) by the commission;
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(ii) to the county legislative body imposing the tax;
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(iii) monthly; and
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(iv) by electronic funds transfer; and
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(b) allocated, distributed, and expended as provided in this section.
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(2) A county legislative body that imposes a tax under this part shall:
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(a) expend 90% of the revenues distributed to the county legislative body under
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Subsection (1) as provided in Subsection (3)(a); and
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(b) allocate or distribute 10% of the revenues distributed to the county legislative body
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under Subsection (1) as provided in Subsection (3)(b).
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(3) (a) Except as provided in Subsections (4) through (6), a county legislative body
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shall expend the revenues described in Subsection (2)(a):
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(i) to establish conservation easements as provided in Title 57, Chapter 18, Land
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Conservation Easement Act, to protect agricultural land;
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(ii) for per diem and expenses for members of a county board as provided in Section
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59-12-1705
; or
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(iii) for a combination of the purposes described in Subsections (3)(a)(i) and (ii).
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(b) (i) Except as provided in Subsections (4) through (6), the revenues described in
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Subsection (2)(b) shall be allocated, distributed, and expended in accordance with this
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Subsection (3)(b).
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(ii) A county legislative body imposing a tax under this part shall:
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(A) allocate the unincorporated area's proportionate share of the revenues described in
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Subsection (2)(b) to be expended by the county as provided in Subsection (3)(b)(iii) within the
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unincorporated areas of the county; and
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(B) distribute to each municipality within the county the municipality's proportionate
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share of the revenues described in Subsection (2)(b) to be expended by the municipality as
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provided in Subsection (3)(b)(iii).
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(iii) A county legislative body shall expend the revenues described in Subsection
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(2)(b):
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(A) to establish conservation easements as provided in Title 57, Chapter 18, Land
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Conservation Easement Act, to protect open land;
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(B) for another use consistent with the preservation of open land in a predominantly
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natural, open, and undeveloped condition; or
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(C) for a combination of the purposes described in Subsections (3)(b)(iii)(A) and (B).
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(4) (a) Notwithstanding Subsection (3) and except as provided in Subsection (4)(b), a
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county or municipality may not expend any revenues generated by a tax under this part to
287
purchase a fee interest in real property to protect open land.
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(b) Notwithstanding Subsection (4)(a) and subject to Subsections (4)(c) and (d), a
289
county, city, or town, may expend revenues generated by a tax under this part to purchase a fee
290
interest in real property to protect open land if:
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(i) the parcel to be purchased is not more than ten acres in size; and
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(ii) real property that is roughly equivalent in size to the real property with respect to
293
which a fee interest is purchased is transferred to private ownership:
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(A) within 30 days after the day on which the fee interest in real property is purchased;
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and
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(B) from the county, city, or town that purchases the fee interest in real property.
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(c) Eminent domain may not be used or threatened in connection with any purchase
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under this Subsection (4).
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(d) A parcel of real property larger than ten acres in size may not be divided into
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separate parcels that are smaller than ten acres each to meet the requirements of Subsection
301
(4)(b).
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(5) Notwithstanding Subsection (3), a county may not:
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(a) expend any revenues generated by a tax under this part to pay:
304
(i) debt service on a bond or bond anticipation note; or
305
(ii) for a cost related to the authorization or issuance of a bond or bond anticipation
306
note, including:
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(A) an engineering fee;
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(B) a legal fee;
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(C) a fiscal advisor's fee;
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(D) interest that accrues on a bond or bond anticipation note; or
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(E) a cost similar to a cost described in Subsections (5)(a)(ii)(A) through (D); or
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(b) pledge any revenues generated by a tax under this part as a source of payment for a
313
bond or bond anticipation note.
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(6) Notwithstanding Subsection (3), a county, city, or town may expend revenues
315
generated by a tax under this part within a county, city, or town that is located outside of the
316
county, city, or town expending the revenues if the county, city, or town receiving the revenues
317
agrees to the expenditure.
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Section 5.
Section
59-12-1705
is enacted to read:
319
59-12-1705. Advisory board.
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(1) A county legislative body imposing a tax under this part shall, in accordance with
321
Section
59-12-1703
, enact an ordinance establishing an advisory board to make findings and
322
recommendations to the county legislative body on expending the revenues described in
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Subsection
59-12-1704
(2)(a) in accordance with Subsection
59-12-1704
(3)(a).
324
(2) (a) Subject to Subsection (2)(b), the advisory board required by Subsection (1) shall
325
consist of seven members appointed by the county legislative body imposing a tax under this
326
part as follows:
327
(i) five members shall represent agricultural interests as determined by the county
328
legislative body;
329
(ii) one member shall be a:
330
(A) mayor of a city or town located within the county; or
331
(B) member of a municipal legislative body of a municipality located within the
332
county; and
333
(iii) one member shall be:
334
(A) a member of the:
335
(I) county legislative body; or
336
(II) county executive body; or
337
(B) the county executive.
338
(b) A county legislative body shall select the members described in Subsection (2)(a)(i)
339
from names submitted as follows:
340
(i) each of the local soil conservation districts created by Title 17A, Chapter 3, Part 8,
341
Soil Conservation Districts, that are located within the county shall submit ten or more names
342
to the county legislative body; and
343
(ii) other agricultural organizations that are located within the county may submit one
344
or more names to the county legislative body.
345
(3) The ordinance required by Section
59-12-1703
establishing the advisory board
346
shall:
347
(a) provide for the terms of the members;
348
(b) provide for the method of appointing members to the advisory board;
349
(c) provide a procedure for filling vacancies and removing members from office;
350
(d) provide for the appointment of a chair of the advisory board; and
351
(e) contain other provisions relating to the organization and procedure of the advisory
352
board.
353
(4) (a) A member of an advisory board who is not an employee of a governmental
354
entity may not receive compensation for the member's work associated with the advisory board,
355
but may receive per diem and reimbursement for travel expenses incurred as a member of the
356
advisory board at the rates established by the Division of Finance under Sections
63A-3-106
357
and
63A-3-107
.
358
(b) A member of an advisory board who is an employee of a governmental entity who
359
does not receive salary, per diem, or expenses from the governmental entity for their work
360
associated with the advisory board may receive per diem and reimbursement for travel
361
expenses incurred as a member of the advisory board at the rates established by the Division of
362
Finance under Sections
63A-3-106
and
63A-3-107
.
363
(c) A member of an advisory board may decline to receive per diem and expenses for
364
their work associated with the advisory board.
365
Section 6.
Section
59-12-1706
is enacted to read:
366
59-12-1706. Seller or certified service provider reliance on commission
367
information or certain systems.
368
A seller or certified service provider is not liable for failing to collect and remit a tax at
369
a tax rate imposed under this part if:
370
(1) the tax rate at which the seller or certified service provider collected the tax was
371
derived from a database created by the commission containing:
372
(a) tax rates; or
373
(b) local taxing jurisdiction boundaries;
374
(2) the failure to collect and remit the tax is as a result of the seller's or certified service
375
provider's reliance on incorrect data provided by the commission in the taxability matrix
376
required by Section 328 of the agreement;
377
(3) for a model 2 seller, the failure to collect and remit the tax:
378
(a) is due to an error in the certified automated system used by the model 2 seller; and
379
(b) occurs prior to an audit of the certified automated system that reveals the error in
380
the certified automated system; or
381
(4) for a model 3 seller, the failure to collect and remit the tax:
382
(a) is due to an error in the proprietary system used by the model 3 seller; and
383
(b) occurs prior to an audit of the proprietary system that reveals the error in the
384
proprietary system.
385
Section 7.
Section
59-12-1707
is enacted to read:
386
59-12-1707. Natural Resources, Agriculture, and Environment Interim
387
Committee study.
388
(1) On or before the November 2010 interim meeting, the Natural Resources,
389
Agriculture, and Environment Interim Committee shall study the tax authorized by this part.
390
(2) As part of the study required by this section, the Natural Resources, Agriculture,
391
and Environment Interim Committee shall:
392
(a) hear testimony from counties imposing the tax; and
393
(b) make findings regarding whether the authority to impose a tax under this part
394
should be extended.
395
Section 8. Effective date.
396
This bill takes effect on July 1, 2006.
Legislative Review Note
as of 1-16-06 2:02 PM
Based on a limited legal review, this legislation has not been determined to have a high
probability of being held unconstitutional.