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VETO SINKS TAX BREAK FOR WINERY

Although Gov. Norm Bangerter's veto of half the funding for a horse-racing commission was his most controversial action Tuesday, he also rejected five bills including one that would have given a tax break to a Utah winery.

The governor beat by nearly seven hours the midnight Tuesday deadline for signing, vetoing or letting become law without his signature the more than 300 bills passed by the 1992 Legislature.Bangerter said he wanted to help the state's only winery, Arches Vineyard in Moab, but had to veto the bill based on advice from the state attorney general's office that it is unconstitutional.

"I did not wish to veto that bill," the governor said, noting he supported it despite a suggestion by The Church of Jesus Christ of Latter-day Saints that all liquor-related issues be studied before any action is taken. The LDS Church later withdrew its objections to the winery bill.

The bill would have reduced the tax, also known as a markup, on wine produced in Utah from a minimum of 61 percent to a minimum of 30 percent. The intent was to keep Arches Vineyards from going out of business.

The problem with the bill, according to the attorney general's office, is that it violates the Commerce Clause of the U.S. Constitution by discriminating against out-of-state liquor suppliers.

The opinion written by the attorney general's office cited a U.S. Supreme Court ruling that struck down a similar law in Hawaii that granted excise-tax exemptions on pineapple brandy and wine.

An attorney representing Arches Vineyard argued in a letter to the governor that the Utah tax break was constitutional because the state controls all liquor sales anyway.

That argument wasn't enough to persuade either the attorney general's office or the governor that the bill would withstand a court challenge. Bangerter said such a challenge could end up costing the state plenty of money.

The governor said a court could rule that all liquor suppliers are entitled to the same reduced mark-up, slicing the amount of revenue available for the state's school-lunch program.

Bangerter also vetoed a bill that would have limited photo radar to school zones, saying local governments "are fully qualified" to decide for themselves how to use the controversial ticketing tool.

He said no, too, to a bill requiring public notice on any state building project that would cost more than $100,000. The bill, the governor said, could force as many as 150 hearings annually.

Another bill that would have required school buses to be inspected by official inspection stations instead of the Utah Highway Patrol also was rejected by Bangerter because of the problems it would create for rural areas.

Bangerter also vetoed a budgetary and fiscal procedures bill detailing that federal funds can be transferred to the proper program for expenditure despite a state prohibition against line-item transfers. The bill was deemed unnecessary.

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(Additional information)

Governor's action on '92 bills

HB81 - Restricts photo radar to school zones

HB182 - Winery license amendments

HB218 - $100,000 appropriation for Utah horse regulation act

HB271 - Public notice of state projects

HB215 - School bus safety

SB215 - Appropriations (three line items)

SB224 - Budgetary and fiscal procedures

REFUSED TO SIGN (bills still become law)

HB65 - Equalization of capital outlay monies in public education

HB131 - Reauthorization of administrative rules

HB177 - Continuity of Government Act

HB211 - Comprehensive school health record pilot program

HB218 - Utah Horse Regulation Act

HB226 - Choice in education task force

HB338 - Monthly collection of sales taxes

SB21 - Reauthorization of public school trust lands task force

SB31 - Motor fuel marketing act

SB58 - Reauthorization of access to health care task force

SB92 - Gender balance

SB186 - Utah Construction Trades Licensing Act

SB213 - Bonding for capital facilities