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Tourism, tax funding in spotlight again

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A bill that would require counties to tell the state how they spend tax money on tourism facilities and activities passed out of a Senate committee Thursday, but not before some lawmakers pushed for a study about whether public facilities are competing with private-sector restaurants and concert venues.

HB40 requires counties to report to the state on their use of tourism, recreation, cultural and convention facilities tax funds, known as the TRCC tax assessed at restaurants. It also calls for the counties to report on the use of the TRCC and transient room tax, or TRT or hotel room tax, spending by certain categories.

The TRT report would detail spending for recreation, tourism, film production and conventions, plus the building and operation of tourism facilities. For TRCC, counties would need to list spending on financing tourism promotion or developing and operating tourism-related facilities.

Together, the two taxes amount to about $60 million annually, according to Rep. Stuart Adams, R-Layton, the bill's sponsor and co-chairman of the Tourism Task Force that studied the matter.

The TRT already has an audit provision. The bill would add that requirement to the TRCC. "This bill kind of marries those two together," providing a uniform reporting system, Adams said

"If we enable a tax to be put in place, we surely have a responsibility to make sure we understand how that tax is being spent," he said.

But before the bill was passed out of the Senate Workforce Services and Community and Economic Development Committee, a potential hot-button issue cropped up again. A few committee members wanted to discuss how some private activities at publicly funded facilities affect business at private-sector companies. At the task force's final meeting in November, several people questioned whether weddings, receptions, meetings and other activities at public buildings and grounds — such as convention centers, recreation centers, golf courses and libraries — that are funded by tax dollars suck business away from private-sector establishments.

While not mentioned Thursday, the task force voted in November to have another task force formed to study that issue. Sen. Howard Stephenson, R-Draper, is sponsoring SB74, which calls for the creation of a Privatization of Government Functions Task Force that would study, among other things, placing restrictions on government competition with private business and providing for equity, especially in taxes and regulation, for private businesses that compete with government to provide services. That bill has advanced through the Senate and will be considered by the House.

The committee's chairman, Sen. Carlene Walker, R-Sandy, on Thursday said she has heard about smaller convention centers that appear to be serving local residents and, as a result, not bringing in more guests to help hotel business.

Adams said the Tourism Task Force realized counties use their tourism tax money in different ways, from providing recreation programs to building convention facilities to constructing baseball diamonds.

"We've enabled those new taxes to be used for recreation and hotels and all those types of things. We discussed how much we ought to regulate as a state. I think it was almost a unanimous decision that it was impossible for us to regulate Beaver County and Utah County and Cache County and tell them how to spend the money," Adams said.

"But we said the least we can do is get a report. And if we've got the data, at least then the way the money is being spent becomes very public and very knowledgeable. Then those elected officials within those jurisdictions need to decide whether they want to spend the money that way."

He noted that some people may prefer to eat at a county facility instead of a nearby Applebee's restaurant.

"This bill doesn't deal with that, but I think there are issues we need to deal with and will probably have an opportunity to deal with," Adams said.

"I think you're onto something here, and I would like to know about the Applebee's scenario because I think that's played out," said Sen. Mark Madsen, R-Lehi.

"Are we discouraging the private sector from coming in and providing certain services when they know they're going to have to compete with the government? Or is it fair when the private sector has come in and invested and then, after the fact, they have to compete with the government?

"This has a number of ramifications, this whole transient room tax. And we're talking about funding arenas and sports venues that would compete for concert business. So I'm concerned about this, and I think this (bill) is a great first step because this brings some transparency and sheds some light on it, but I'd like to encourage you to pursue the other aspects of this, because I think the tentacles run deep."

"There are lots of thoughts and rumors and information that we don't have accurate data on," Adams replied. "This bill helps bring that data in so we can actually see and make accurate determination on how that money is spent."

Some county representatives in September told the Tourism Task Force that they were worried that such a bill would lead to the state wanting to control how their tourism money is spent, or even that the state would want to get some of that money. However, no one spoke in opposition to HB40 when it was passed out unanimously by the House Business and Labor Committees and no one from the public spoke at the Senate committee meeting Thursday.

E-mail: bwallace@desnews.com