After each General Session, the Legislature meets and discusses relevant items of significance. The Salt Lake Chamber’s public policy team actively tracks this process and helps navigate study items on behalf of members and the broader business community. These Interim sessions help provide a preview of issues that may be addressed in a future General Legislative session.
Every month the Salt Lake Chamber policy team will give an update on relevant business issues that the Legislature’s bicameral study committees discuss.
A brief summary from our policy team of broad topics the Chamber is engaged on:
“As we enter the Fall, both budget season and early legislative efforts are underway. The Chamber is actively working to position our top-priorities for 2017 with key legislators, leadership, the Governor and stakeholders. We plan to rollout our early requests in the next month to engage the membership leading into the session.” – Abby Albrecht, Director of Government Relations
“Few understand the significance of interim periods to the policy process. They play a key role in our policy framework and help inform our annual public policy guide. Already key issues are becoming apparent for the coming session including education funding, water, clean air and improving Utah’s tax code.” – Michael Parker, Director of Public Policy
Improving Utah’s Water Data
The Division and Board of Water Resources hopes to hire a third party contractor to analyze the water usage data reported from 90% of Utah’s water providers. The analysis would help establish water conservation goals in addition to fulfilling S.B.251’s mission to establish criteria for better water reporting. The Division and Board of Water Resources will use the funds S.B. 251 appropriated specifically for this use. The Chamber was a major supporter of S.B. 251 and will continue to play an active role in its implementation to ensure we have the best data available on this complex issue.
Understanding and Addressing Utah’s Air Quality Challenges
Air quality took center stage at the Natural Resources, Agriculture and Environment Committee as it focused on our annual winter inversions, new federal ozone regulation and other air quality issues. While only 5% of days are below federal standards and National Ambient Air Quality Standards are ever changing, we must continue to be proactive in addressing this issue. We must carefully address air quality issues while minimizing the cost to businesses and ultimately consumers. Utah must meet current federal air quality standards. Without action, we may lose federal highway funding, garner additional regulatory burdens and impair economic development and corporate recruitment.
Some key issues addressed on this topic included:
- The new ozone standard was finalized in Oct. 2015 and will be reviewed in the State Oct. 2016. We are concerned that the EPA’s lower ozone standard will disproportionately impact the Intermountain West due to high levels of “background ozone.”
- Vehicles and the fuel they use are major contributors to much of the Wasatch Front’s winter inversion and summer ozone issues. The committee discussed incentives to convert state, commercial and private sector vehicles to cleaner vehicles. This includes accelerated implementation of the Tier 3 Vehicle Emissions and Fuel Standards Program and other alternative fuels.
Improving Utah’s Tax Code
Utah is lucky to be home to one of the most business-friendly tax environments in the nation. This contributes to our overall business climate, quality of life and low cost of living, which boosts our economic growth and entices business investment. To build on this success, the Legislature has asked the Utah Tax Review Commission to review business taxes at both the state and local level and make recommendations for improvements. This includes reviewing two key topics: Pass-Through Entity Payment or Withholding of Tax and Pass-Through Entity Audits, and Sales and Use Tax Exemption for Purchases of Manufacturing Equipment.
More specifically, in 2009 S.B. 23 passed to require 5% withholding on all pass through entity taxpayers who are not Utah resident individuals. The chain of pass through entities is particularly complex in Utah because some partnerships do not operate on the same tax year, potentially resulting in excessive withholding. A proposed legislative solution would be adopting a refund option for pass through entities who meet a certain threshold for Utah sourced income.
Additionally, Utah currently has a general sales and use tax exemption for manufacturing inputs, machinery and equipment, replacement parts and ingredients for components. However, unlike other states the staff surveyed, Utah requires manufacturing-related purchases have a three-year economic life to be granted the exemption. The implications of removing this limitation were discussed and the commission concluded that should this limitation be removed there would have to be an accompanying solution to offset any effects on state revenue.
As a follow up to the June Interim, the Revenue and Tax Committee discussed economic development and tax related business incentives.
The Office of Legislative Research and General Counsel highlighted the overall landscape of economic development incentives – including sales tax exemptions – and issued a brief report to help members understand the various incentive programs.
These incentives are used to select companies that create new, high-paying jobs that help improve the standard of living, diversify the state economy, increase the tax base, attract and retain top-level management, and encourage graduates of in-state universities to remain in Utah.
The Chamber’s formal position on the issue is:
Strategic Industry Incentives – We support strategic tax incentives that enhance and grow Utah’s economy in strategic industries, such as life sciences, advanced manufacturing, software and IT development, aerospace and defense, logistics and distribution centers, energy development and financial services.
Improving Utah’s Future Workforce
A working group formed by the Education Interim Committee studied mastery-based learning to identify potential barriers to expanding efforts in this area. Identified barriers include education funding based on enrollment, assessment and teacher evaluation methodology. A motion was made by Sen. Millner to open a committee bill file to support funding for schools or districts hoping to implement pilot programs.
Additionally, equalization of per student property tax revenue across districts was discussed. Sen. Fillmore’s anticipated bill would set aside certain funds for voted and board levy-guarantee programs. The growth in state-matching funds for local property tax levies to weighted pupil unit value growth so a larger portion of new growth goes to lowest-funded districts first.
Key Transportation Issues
- Mountain Accord
- Presented an overview of the mountain transportation plans and future Central Wasatch Commission.
- Audit of the Utah Department of Transportation
- UDOT was the subject of two legislative audits. One reviewed the agency’s performance and the other took an in-depth look at its budget. Carlos Braceros stated “The organization will improve as a result of the work of the audits”.
- You can find the full result of the audits by clicking http://le.utah.gov/interim/2016/pdf/00003683.pdf and http://le.utah.gov/interim/2016/pdf/00003682.pdf
- Grand Boulevards
- Stakeholders across the community are seeking to address the city’s first impressions of a “Grand Boulevard” at the entrance to Salt Lake City at 500 and 600 South. The Legislature’s Business and Labor Interim Committee is studying the item as a convener of many stakeholders and the fact the state owns both roads.
- This month focused on an update regarding the City of Salt Lake and Outdoor Industry working group meeting. The Outdoor Industry was asked to come with specific ideas to better the billboard situation on the two corridors. The City is in review of their requests at this time. The Chamber will now move onto a focus group discussion with land owners on the corridor for a final visioning plan.