CommunicationsWhat happenedWhat’s to come& other legislative musings by me

ULCT

YOUR ADVOCATES ON THE HILL

THE TRACKING SHEET AND UPDATEWWW.ULCT.ORG

THE TRACKING SHEET AND UPDATE

187 members83 cities and townsTake positions on bills,

provide direction to ULCT staff , and examines municipal policy

CHECK THE ROSTER

LEGISLATIVE POLICY COMMITTEEROLES AND RESPONSIBILITIES

Chair: John Curtis, Provo City

Coming into an election yearVery “young” House of RepresentativesTension between the Governor and SpeakerTension between House and Senate on Priorities Affordable Care Act Expansion (Obamacare)First time in recent history that education was

not the #1 issue for the electorateOh yeah, and then there was John Swallow786 bills fi led in 2014Passed the 3 rd Highest Number of Bills Ever

(486)

….and everything is related in politics

GENERAL TENOR OF THE 2014 SESSION

2014 LEGISLATIVE RECAP – ONLINE

ULCT DIRECTORY APPwww.ulct.org

ITS MORE THAN JUST THE BILLS, LETS

EXAMINE THE TRENDS

#1 PLANES, TRAINS AND AUTOMOBILES TRANSPORTATION

FUNDINGTHE BILLS:

HB388 – Transportation Funding Modifi cations HB135 -- Local Option Gas Tax HB210 – Sales and Use Tax for Transportation SB60 -- Fuel Excise Tax Amendments

THE ISSUES: $11.3 Bil l ion SHORTFALL in Funding Using the Unifi ed Plan as the basis for the request How do we work toward a comprehensive solution

WHAT’S NEXT We need to tell our story How do we demonstrate we have exhausted already available

solutions In the Wasatch Front – How do we change commuting behavior?

HOW DO WE CREATE PUBLIC AND LEGISLATIVE BUY IN?

WHAT DO WE MEAN BY OUR TRANSPORTATION PROBLEM?

Mass Transit

Trails Excellent Condition

Poor Condition

Sidewalks

NOT JUST INFRASTRUCTURE, OUR WAY OF LIFEYESTERDAY TODAY

How did you go to …The grocery store?The gym?Dinner?Church?School?

How did you go to …The grocery store?The gym?Dinner?Church?School?

HOW DO WE FUND TODAY’S & TOMORROW’S TRANSPORTATION?

Sales Tax … Local Option at current level since 1982/1983 State Option Local Option

Gas Tax… Current level since 1997

Vehicle Miles Traveled (VMT) Taxes/Fees

Vehicle Registration Fees

Property Tax

Severance Tax

Toll Roads

WHERE WERE WE IN 1982 & 1983?

WHERE WERE WE IN 1997?

Do You Remember Andrew Grove?

AND THE PRESSURE MOUNTS

A) Vehicle Miles Traveled (VMT) Increases

B) Fuel Effi ciency Improves

C) State and local governments already subsidizing transportation infrastructure with their general funds…

And the need continues to grow

D) Population Explosion

E) While the Gas Tax Buying Power Decreases

A) VEHICLE MILES TRAVELED WILL INCREASE

B) FUEL EFFICIENCY WILL IMPROVE

1997: 0 of top 15 vehicles in US are crossovers or hybrids

2014: 6 of top 15 vehicles in US are crossovers or hybrids Toyota Prius 50 MPG (hybrid) Ford Focus 105 MPG (electric)

2014: fuel economy must be 28 MPG

2025: fuel economy must be 54.5 MPG(Medium sized passenger cars and Corporate Average Fuel Economy)

C) FY 2011 MUNICIPAL HIGHWAY FUNDS VS. MUNICIPAL TRANSPORTATION EXPENDITURES

D) POPULATION EXPLOSION—HOW WILL WE TRAVEL?

Utah pop. in 1982: 1,461,037Utah pop. in 1997: 2,233,169

30% from 1990-2000, 4 th fastest in USAUtah pop. in 2014: 2,900,872Utah pop. expected to hit 5,000,000 in 2040

1982 1997 2014 20400

2,000

4,000

6,000

Utah Pop. (in thousands)

E) WHILE GAS TAX BUYING POWER DECREASES

Since the last gas tax increase in 1997, inflationary pressure on the “user fee” has diminished the purchasing power by 40%

During that same time period, road material costs have increased by 300%

Maintaining 35,000 miles w/equivalent of 4 cents/gallon is not sustainable

CAN’T SOLVE 2014 TRANSPORTATION NEEDS WITH 1982 & 1997 TOOLS

1982: $12$29.48 in 2014 dollars

1997: $36$53.18 in 2014 dollars

2014: $96

TREND #2: SHOW ME THE MONEY --MUNICIPAL FINANCE

THE TREND New sales tax money (internet sales/marketplace

fairness) means a larger conversation on how we fund local government

THE BILLS HB434 – Local Option Sales Tax Distribution – DIDN’T PASS

THE ISSUES Anticipates passage of Federal Marketplace Fairness Act

Creates an amended distribution formula for city sales tax using assessed valuation as a distribution factor

Sponsor and Leadership want us to start looking at our overall fi nance picture

TREND #2 – SHOW ME THE MONEYACTION ITEMS

TO DOs• Begin ULCT led discussion of municipal finance (internally)

• Gas Tax, Sales Tax, Role of Property Tax, and Franchise Fees

WHAT ARE WE ALREADY DOING TO HELP YOU PREPARE

•The ULCT has already done much of the research and groundwork on the history of the various municipal taxes/funding sources

•Reconvene the ULCT Tax team

•Continue to work on specific funding proposals with the legislature

THEY ARE LOOKING TO US TO ADDRESS THESE ISSUES IN LIGHT OF MARKETPLACE

TREND #3 – NEW SHERIFF IN TOWNHOW DO WE SPEND AND TRACK

MONEYTHE TREND

There is a new “Sheriff ” in town and his name is John Dougall

Transparency in municipal fi nancing practices, best practice concepts and benchmarking activities will all be on the rise. He is watching what we all do very closely.

THE BILLS HB66 -- Enterprise Fund Transfers – Merged in to SB51 HB381 -- Local Government Interfund Loans SB51 -- Audit Practices for Local Budgets HB102 – Assessment Area Amendments – Vetoed but work to do HB258 – Business Licensing Amendments – Did Not Pass

THE ISSUES This dovetails in to the transparency discussion. We need to be

very conscientious of how we handle money and ensure we are following the public disclosure process

TREND #3 – NEW SHERIFF IN TOWNACTION ITEMS

WHAT WE ARE ALREADY DOING TO HELP YOU PREPARE Working with the auditor on our 15 year old database of

municipal fi nance. Updating this to provide more tools to you

Working on benchmarking to show trends and eff orts being made by local government

Working on the UT-2 Form and Statement of Accounts process

Working with individual cities on audit compliance issues to ensure we stay in front of this issue

Created a subcommittee to work on the assessment area issue

A municipality may NOT require a license for a business if the business… Primarily conducted at home

Receives customers at home so long as they don’t significantly disrupt the flow of traffi c

Number of customers at home does not interrupt another owner’s enjoyment and use of their own property

Does not have employees Does not involve hazardous materials Is not a kennel, mechanic business, child care facility, or a

Title 58 Occupation

Municipality may not transfer to the county any info about a business that is not required to be licensed

HB 258S2: MUNICIPAL BUSINESS LICENSING AMENDMENTS

TREND #4 – SOME TIMES TRANSPARENCY IS A GOOD THING!

THE BILLSSB70 – State Data Portal AmendmentsSB185 -- Law Enforcement TransparencySB113 – Public Meeting AmendmentsHB242 – Fees for Government Records

THE ISSUESPublic Notice WebsiteGRAMA WebsiteTransparency in Finance WebsitePublic Posting of Minutes

WHAT ARE WE ALREADY DOING TO HELPULCT Resources acquired for GRAMA requirementULCT Resources acquired for digitizing of public records

TREND #5 – ELECTION DAY

THE BILLS HB 156 -- Election Day Voter Registration Pilot Project HB 252 -- Absentee Ballot Amendments HB 413 -- Voter Accountability in Political Subdivisions SB 134 -- Taxation Related Referendum Amendments

THE ISSUES Referendum process changes Technology is changing nature of elections State wants to be inventive with ways to approach elections COUNT MY VOTE

WHAT ARE WE ALREADY DOING TO HELP Working with the clerks & recorders to protect mail in

elections Authorized a same day voter registration – OPT-IN

If you have ideas, now is the time to let us know!

THE ISSUES State regulations/Local costs Nutrient control (nitrogen & phosphorus)

Proposed state rule: $1.35/month Drinking Water Fees Handling considerable growth in municipal needs (2+ Mil new

people) Conversion from agricultural use to municipal use Conservation Infrastructure investment

WHAT WE ARE DOING TO HELP Creation of coalition with the major suppliers Continue to work with Department to find alternatives to local fees

for state regulation Working with Rep. Snow and others to address municipal

perspectives

TREND #6 – WATER, WATER, EVERYWHERE

THE TREND: Planning in our communities...consistency in the rules and

consistency in training

THE ISSUES: Cross training cities and developers so everyone has similar

expectations on the processes we follow when making decisions

Using training to avoid undue legislation regulating our authority on local land use.

WHAT WE ARE DOING TO HELP: Acquired resources to aid in creating training resources for

cities and developers Working with local planners to create curriculum MEG RYAN... SHE’S HERE TO HELP

#7 TREND – PLANNING AWAY

New Speaker of the HouseBudget

Medicaid Expansion Education Funding Transportation Sales Tax Distribution “Re-Alignment”

ElectionsTransparency/FinancesLand Use issuesGood landlordAlcoholExecutive Branch (Governor, Auditor, Attorney

General)

2015 SESSION—WHAT’S TO COME

Battery powered devices that heat a liquid nicotine solution creating vapors that users inhale

No tobacco in the e-cigarette but it contains nicotine derived from tobacco (court-endorsed legal pretext for regs)

Vapor looks like smoke but doesn’t contain the same tar, chemicals, or odor as regular cigarettes

Inconclusive research on e-cigarette health impact

$2 billion in sales in 2013Utah e-cig use has doubled

in last two years

WHAT ARE E-CIGARETTES?

CURRENT STATE LAW--CIGARETTES

Cigarette: roll made for smoking with tobacco wrapped in paper

Tobacco product: product made of, or containing, tobaccoAge 19 to use or buy $30 licenseTax rates of 8.5 cents to 9.963 cents per cigarette“Retail tobacco specialty business” is a commercial

establishment in which the sale of tobacco products accounts for more than 35% of total annual gross receipts

CITY IMPACT

City can require an entity to be licensed as a retail tobacco specialty business

City enforces proximity req’ts (1000/600/600)City can reject the business license application &/or have

stricter standards than state law

"Electronic cigarette" means any device, other than a cigarette or cigar, intended to deliver vapor containing nicotine into a person's respiratory system

NOT TOBACCONO TOBACCO TAXE-CIGARETTES DO NOT COUNT TOWARDS THE 35%

REVENUE RULE FOR A RETAIL SPECIALITY BUSINESSSILENT ON PRODUCTS(cigarette) BUTT:Age limit (19)Same proximity req’ts as cigarettes

1000 ft from community location, 600 ft from ag or residential zones

Utah Indoor Clean Air Act applies

STATE LAW E-CIG PUZZLE

HB 112 10TH SUBSTITUTE, 2014

Electronic Cigarette Licensing ActWould have defined E-cigarette as separate from

tobacco products but still regulated like traditional cigarettes

Would have expanded the definition to include components

Would have authorized the Department of Health to regulate the sale of E-cigarettes

Would have inserted “electronic cigarette” into existing cigarette statutes for a retail tobacco specialty business

Passed both bodies but House did not concur with Senate amendments

WHY A PUZZLE? FDA TIMELINE

Family Smoking Prevention & Tobacco Control Act of 2009FDA authority over tobacco products on market as of Feb

15, 2007E-Cig companies that did not exist in 2007 can sell by

demonstrating they are “substantially equivalent” to the early models

2009: FDA tried to ban e-cigarettes as “drug-device combination products”

April 24: FDA proposed banning sales of e-cigarettes to anyone under 18, adding warning labels, & requiring agency approval for new products

August 8: FDA public comment periodRulemaking could take another year & then companies

would have 2 years to comply

WHY THE PUZZLE? FDA (IN)ACTION

FDA proposed extending its authority to regulate cigars, hookahs, nicotine gels, & pipe tobacco

FDA proposes requiring warning labels & agency approval for new products

FDA proposes mandating e-cigarette makers to disclose their products’ ingredients

They could not claim their products are safer than other tobacco products

No free samples or vending machines (except in bars)FDA wants more evidence before rushing into more

restrictionsNo marketing on online sales restrictions yetNo ban on fruit or candy flavors

FDA HAS REQUESTED COMMENT ON:

(1) How should e-cigarettes be regulated on the continuum of nicotine-delivering products?

(2) How should the FDA defi ne components/parts of tobacco products, and how should those items be distinguished from tobacco product accessories? Should e-cigarette liquid that does not contain nicotine be regulated?

(3) How should the FDA regulate e-cigarettes in a way that is appropriate for the protection of the public health but also keeps costs low for manufacturers?

(4) Should all tobacco products (including e-cigarettes) be required to carry an addiction warning? If so, should diff erent products be required to carry diff erent warnings?

(5) How will proposed regulations aff ect small businesses?

MAY HHS INTERIM COMMITTEE

(1) Ban sales of fl avored e-cigarette liquid to minors, even where the fl avored e-cigarette liquid does not contain nicotine If the FDA does not have the statutory authority to regulate e-

cigarette liquid not containing nicotine, recommend that Congress grant the FDA the necessary authority

(2) Implement age restrictions on the sale of e-cigarettes and e-cigarette components to minors

(3) On spectrum of tobacco products, treat e-cigarettes & components the same as cigarettes. Regulate e-cigarettes & components as strictly as, & not less strictly than, cigarettes

(4) Place a uniform nicotine addiction warning on all tobacco products, including e-cigarettes and e-cigarette components

State Tax Commission & cities seeking clarity in the code

www.ulct.org 801-328-1601#ULCTcitycafe Like us on

facebookFriday Facts September

Convention

Ken Bullock, Executive Directorkbullock@ulct.org

Cameron Diehl, Director of Governmental Relationscdiehl@ulct.org

QUESTIONS? FEEDBACK? CONTACT US!