H.B. 537 Olympic Ticket Sales Tax Exemption: transcript

I kinda like that. I I can adopt that. Um, okay. So there is a substitute, which changes the name and a couple of lines in the, uh, in the body of the, of the bill. But essentially, um, all this bill does is, um, so Utah 2034, the organizing committee is a tax exempt organization. Um, they will, uh, partner with a, when they go to market with their ticket sales, they'll partner with a third party vendor who is not a tax exempt organization. And so what this bill does is makes, uh, Olympic ticket sales, uh, tax exempt. So it keeps those tickets, uh, free from sales tax. That's all it does. Is that in our best interest? Well, That's a really good question. Um, is it in our best interest? Um, there is on the back end. Uh, I mean it, it's a, it's a 5 0 1 C3, right? So they, they, they cannot charge sales tax and they want to keep it that way. But there is, on the back end, an opportunity for them to take, um, and add an, uh, an additional fee, which they will collect, and then remit to, um, cities and towns for their participation around, um, fire rescue, uh, security, snow removal, things like that during the Olympic games. And so they plan to do that, uh, to re to recoup those, those fees, uh, and those costs for, uh, the participating cities. So, but this just basically says, um, sales tax is not part of, uh, of part of the Olympic, um, ticket.

You, Mr. Chair. Just a question on line 8 95, what does it mean when it says that this section does not require the host committee to charge a government Olympic services recovery fee?

So that's on, um, the old bill. Oh, so that's, yeah, that's a good question. But it's on the old bill, so it's Not in there now.

I can't, oh, So ITT not in there now?

No, it is not in there now. Oh, thank you.

So it looks like the, the first sub removes most of that original language.

Yeah. So really if you look at the first sub, you read line 24 that says, here's the exemptions from sales tax, right. In this chapter of code. Then you jump down to line 861. Um, and it is, hold on, I'm, I'm still scrolling. Um, it says a sale of an Olympic ticket as, as defined in sections, um, 60 3G 28 1 0 1. So that's exempt from sales tax. And then it defines what an Olympic ticket is on lines 8 88 through 8 91. That significantly simplifies that.

Yeah. Yeah, for sure. Interesting.

And could you speak, you mentioned a fee that would go to, uh, some of the, the cities and counties participating. Yeah. How Does that decided on?

So, because they're, they're a private organization, they can charge whatever they need to, but there is, um, there is commitment that when they charge that fee, um, they will remit that fee directly back to the cities and counties that participate in, in the Olympics. So say, and, and, and, um, at a later time, we will come back and figure out what that, what the maximum of that fee can be. Um, but they're a private organization and they can, they can charge that. Um, but they are committed to, um, making sure that cities and counties that participate in the Olympics don't take that burden on alone, um, and have to move their budgets around and, um, to just support the Olympics. They want to be able to make them whole, um, for the services they provide.

Thank you, Mr. Chair. I move that we adopt substitute two of HB 5 37, I think. I think it's just substitute one. Oh, substitute one. Sorry. Substitute One. Yeah, no worries.

I move that we pass out HB 5 37 as substituted favorably to the full house.

I'll waive into the motion. I'll waive.

to, uh, do like the first 30 days and then you would do 15 days later or something like that? Yeah, I think what I think this is, I think what this will give us the opportunity to do is ask ourselves those same questions and try and find ways to minimize the schedule. Um, the other, uh, the other latent benefit I think that it has is if we take the session into more bite size, I did, by the way, in that 73 day period, I did not include special sessions. Um, and so, you know, we're, we had, we had a lot of them last year. I think were four last year, uh, special sessions, we tend to do do those on interim, but it actually wasn't always that way last session. There were two that were off cycle. So, um, but the idea is try and create the opportunity for flexibility and then by getting that flexibility and limiting ourselves to the 45 days, can we do that? Could we do a 30 day segment where we focus on the budget and then stretch the other policy making days out? And in those policy efforts, could we take away the feeling that Friday at midnight on March 6th feels like we've gotta hurry up and pass a bunch of bad policy potentially and find out later if it needs to be fixed. Um, and, and I'm not a big fan of that feeling at the end. I am a big fan of it ending, uh, at some point, but at the same time, I'm not a huge fan of the, the under the gun feeling for a bill, uh, that, you know, may or may not be ready for prime time. We could, you know, circle it and pick it back up in April.

Yeah, I, I appreciate what, I appreciate what you said, and I, I think I'm certainly open to the discussion because it, it certainly poses a hardship on, on anybody that's employed. Yeah. And so, uh, you know, I think there's pros and cons. I look at some of our surrounding states that have, you know, that meet two or three times a week so that you can go back to your regular job a couple times. But then, uh, in, in some respect, I appreciate the definiteness of when our session starts and ends as opposed to, you know, something going on for four or five, six months or indefinite. And, and so I, I think I'm open to the conversation, so I'll, I'll vote yes for that and, but, but maybe not, maybe not convinced yet though, either. Yeah.

Okay. Just, You know, just to your point, all this does is it says we may, right? It doesn't say we have to, we can keep our finality as as we want to, but this gives us the option right now, constitutionally, we don't have the option to even discuss this, this com have this conversation.

Yeah, I appreciate Senator McKay, what you're doing, what you're talking about here. We've discussed this a couple times over the period that I've been up here. A couple things I've learned in my experience dealing nationally, Utah and Montana, and a couple other states that have really short sessions are the NV of Veva states because, uh, as I say, you know, you have a finite period of time, uh, the mischief ends and there are bad bills that actually die. You go into some of these other states that are year round and they have the biannual sessions and you cannot kill a bill, it comes back in another format. So, um, I am comfortable staying where we are. Yeah.

Thank you. Yeah, I'm Seth Stewart, representing myself from American Fork. Um, I, I, I think what I'm, what I'm hearing from Senator McKay, this is why my mind is interpreting what he's saying, is to say that we need more breaks in the legislative session. We need more, uh, we need better closure when we're passing bills to ensure that they're the right bills to be passing. And we need more slow and careful deliberation, uh, as well as hopefully reduce the overall burden on the legislators and be able to reduce the immediate impact to their schedules. And I, I share some of the concern about impact to schedules, um, for legislators as well as for the public because of hearings like this one, uh, where members of the public also need to take time off. Uh, one of my concerns about having the flexibility to schedule dates throughout the year is I'm not seeing a provision here that would require, um, any kind of advanced notice system for the public, because we also need to plan time off of work and so on if we're going to, uh, appear in any committee hearing where legislation or bills are being considered. So, um, I, I would urge some consideration of the impact to the public as well. Um, and I will submit as far as getting more breaks on the legislation and just more, uh, better closure on, on the bills that end up getting passed. I, I do see this as a problem. There's a lot of rush, especially during the final days of the session, to just kind of cram through a whole ton of bills. And that might leave us all with buyer's remorse on large number of instances. And I would submit that we're missing some structural checks and balances in our system for doing that. And for that reason, I would submit, uh, that we need to return to differentiated election methods as modeled in the United States Constitution originally, uh, for the different legislative offices. And that way the, the houses of the legislature can actually act as a check on each other and slow down that process so that we do get better closure. And that way they can, they can still prioritize which bills are important to pass as long as there's good consensus between the House and the Senate. And anyways, I I just invite urge people to look up Article one, section two and Article One section three in the United States Constitution for a model of what that would look like with respect to the legislature. I would submit that that would also have the effect of reducing the workload of the legislature as the sponsor of the bill intends. So, thank you.

Or since I'm on the committee, Mr. Chairman, I'm gonna just make a motion that we move on to the next item on the agenda is late. And instead of drag us through a lot lengthy floor debate over the issue, uh, we could at least put this as a placeholder at, at the moment of where we can start this conversation. Uh, I don't know. Uh, I'll have to think about Senator Harper's comments about being the envy of the country on finality. That's an interesting, that's an interesting point. Um, that's, that's worthy of some, uh, some consideration, but that I have motion we go on to the next item on the agenda.

You, uh, Mr. Chair and the committee. I appreciate the opportunity. You know, after our discussion last week, we took, uh, the committee's a advice and, uh, and, and tried to answer some of the questions that the committeemen, uh, had. Uh, we met with DOT and, uh, wildlife Resources. And, uh, our, our conclusion of that meeting was our, our only opportunity to, uh, to structure what we, we are trying to do here with W Wildlife Crossings is, is to use the, the TIF fund. Uh, it's, um, it just because of the way it's structured, as you know. Um, and, and we discussed last week, the, the wildlife overpass going across, uh, interstate 80 at the top of Parleys Canyon is the first in the nation. And it's, uh, amazing the, the recognition we've got from it. Um, wildlife crossings are recognized as a, uh, metric that are involved with the planning of new projects.

First substitute House Bill 5 37 Olympic ticket sales tax exemption by Representative Hawkins. This bill was heard in Economic Development and Workforce Services with a vote of 7 1 2.

Thank you Mr. Speaker. Um, motion to adopt amendment one in my name.

Yeah. Um, we just added the words. Um, or Paralympics, um, or Paralympic, uh, in three locations in the bill.

Thank you, Mr. Speaker. So, um, this bill, uh, basically says that, uh, the Olympic Committee, when they, uh, um, contract with a vendor to sell tickets or hospitality packages, that vendor cannot charge a sales tax, uh, to, uh, you know, in addition to the package that they sell. So, um, that's all the bill does. Uh, thank you Representative Hawkins.

Would the sponsor yield to a question?

Um, I guess I don't understand why we would not want to collect sales tax on this time in the state where there would be obviously a lot of opportunity to collect sales tax. Could you enlighten me on that?

Yes, Mr. Speaker. Thank you for the question. Um, the, the Olympic Committee is, uh, promised, uh, to not collect any state monies for, uh, the, the execution of the Olympics. Um, they are able to charge whatever they want to, um, with their tickets. And so, uh, they, uh, I have been in conversation with them, um, to talk about, you know, how, how they overcome that deficit. Um, and they've talked to me about, um, an additional fee that would basically cover the sales tax, um, so that the, those that could be reimbursed to the state and to the local communities that participate in the Olympics.

Thank you, Mr. Speaker. May I ask another question? Representative Hawkins, will you continue to yield?

Okay. Thank you. So are you saying that they technically are going to be paying to the communities and to the state sales tax money, but it's going to be coming another way? I'm just trying to make sure that I'm understanding that the people that are rolling out the red carpet for the Olympics are not going to be thrown under the financial bus as it were.

Um, thank you Mr. Speaker for the, for the question. Um, technically no, they're not gonna be collecting sales tax. That's what this bill does. They will collect, uh, an additional fee and pay the communities and the state back for participation. Ophir, uh, police, snow removal, uh, all of the services that go into putting on an Olympic games, but technically they're not collecting a sales tax.

Thank you, Mr. Speaker with the sponsor yield Representative Hawkins, will you yield?

Thank you, Mr. Speaker. I'm wondering why we wouldn't do that and then put the money into a perpetual maintenance fund for the venues.

Thank you, Mr. Speaker, for the question. Um, that is actually part of the plan, um, to put the money into Perpetual Maintenance fund, um, that will, you know, upkeep the venues, the, um, the, you know, the facilities, um, and, and be able to pay back those communities and the state for the involvement in the Olympics.

But Mr. Speaker, if, if you're gonna eliminate the sales tax, why are you eliminating that funding source?

I'm afraid I don't understand the question, Mr. Speaker.

Well, Mr. Speaker, if, if he's going to eliminate the sales tax on the ven on the events and so forth, the contracted folks that, uh, vendors and so forth, why wouldn't you want that? And maybe put it into a perpetual maintenance fund for the venues for the future so that, so that you get people still coming here after the Olympics to train and so forth, that brings a lot of economic value.

Now I understand Mr. Speaker. So that is actually the purpose of, of, of the fund that they're going to, to create. Um, um, it doesn't have to be tied to a sales tax, um, that, you know, in creation of this, the, the money's generated. So the fund will be there, um, but they just don't want to, uh, be tied to a sales tax.

Thank you, Mr. Speaker. I, I think they're missing a golden opportunity here to raise money for perpetual maintenance. Uh, but if they're gonna create another fund, who knows what that is? Thank you.

Thank you, Mr. Speakers. So those that are confused with what yellow means, it means exactly what's happening right now. It causes you to pause and maybe look a little deeper into the fiscal note and why it's not that it's a bad bill, it's not that it's getting hung up, it's just we need to be a little more attention. 'cause if you look at the top note, it said zero, but there was some reasons why. So, um, those that are getting really concerned about yellow fiscal notes don't, but you're doing exactly what it's meant to do. So thank you

Um, in, in, in the accounting world, we often talk about opportunity cost that would also be, in some cases be called a dynamic fiscal note, which we generally aren't doing. But in my reading this fiscal note, and I just wanna confirm if my reading is accurate, we are potentially foregoing, uh, approximately 58 million in sales tax related, uh, to future Olympic ticket sales. Is, is that correct, Mr. Speaker?

So I was distracted. Mr. Speaker. Could, could I have the representative repeat his question?

Yeah, sure. I I can repeat that. Um, I, I just mentioned that, uh, in, in accounting and economics, there's a, a term called opportunity cost in terms of what you're foregoing not at something you have to write a check for, but something that you're giving up it, my reading of the fiscal note says that the, uh, exemption sales tax exemption may be causing the state to forego approximately 58 million in sales tax revenue. Is, is my reading of that? Correct?

Thank you, Mr. Speaker for that clarification. Um, I think that your reading is correct, that the state is foregoing, uh, the revenue on the sales tax. However, um, the Olympic committee can charge whatever they want and has, has promised to pay back to the state for the, uh, you know, for the services rendered by the state and the local communities. And so, um, although the state won't be part of that opportunity, the state will benefit from, from the fee that or the, uh, the ticket sales, uh, that the Olympic, uh, committee is, is going to gather.

Thank you, Mr. Speaker. Thank you, uh,

Thank you, Mr. Speaker. And I apologize before, um, for my inattentiveness, there were a few people in my ear. Um, I, I think this is a good discussion. I want to clarify what the sponsor's trying to do here, because I think what he's accomplishing here with this bill is helpful. We have heard from our constituents that we do not want to see the state making large term investments and being financially liable for all aspects of the Olympics as they come here. That's what, what we have said repeatedly. We want to be able to have this perpetuate itself fund its police and fire, snow removal, all of those things. So while this provision outlines that the state foregoes the sales tax on these particular tickets, what you're not seeing in this bill is the authorization for the Olympics to charge a fee on each individual ticket. And those fees will go to pay for the games themselves so that the ticket is literally paying for the venue. Otherwise, the, those Olympic funders would be coming back to the state and asking us to remit state monies for the financing of the games. This is a creative solution that allows the Olympics to occur here. I'm grateful for the sponsors. Good work on this. It also allows the Olympics to pay for themselves. And I'm, I, that is what I think we have all said, promised our constituents and heard from them. So I would encourage my colleagues to please support the bill. Thank You. Thank you, Representative Snider.

Thank you, Mr. Speaker. Um, I appreciate our good majority leaders, uh, clarifying explanation of, of my inadequate, uh, uh, presentation. But that is, that is essentially what we've promised to our constituents, that the Olympics when it comes here will not take state money. And so what this does is allow the Olympic Committee to not charge sales tax to take state money, but allows them to operate and, and allows the state and local communities to recuperate for the, um, for the services rendered during the Olympics and Paralympic games.

Thank you. Um, we, we've got a great bill. Uh, the title's a little bit weird. The, our Olympic Committee is a not-for-profit and we, we are allowing them to contract with a third party vendor to ticket sales. Um, this is not necessarily not collecting tax. The dollars that they collect are actually gonna go back to the locals to help take care of DPS type concerns. That's that's what this bill is, is doing. And we're doing it now without I, I'd move this move to consent and move this bill pass.

Thank you. President Pro Tem over in the house, they codified an existing practice regarding to leave banks