FEATURE

Recapping the 2008 Legislative Session

Utah's 2008 General Legislative Session is now in the history books. All in all, it was a productive and successful session and our legislators are to be commended for helping to make Utah the best managed state in the nation.

With regard to the now completed session, EDCUtah's primary focus was legislation affecting our economy and the Beehive state's business climate. The legislation we watched most closely fit within six categories:

• Transportation
• Health Care Reform
• Immigration
• Energy
• Taxation
• Economic Development

Transportation

Addressing transportation needs is essential to our growth and economic development. Consequently, we are pleased that the legislature authorized a new $1.8 billion bond for the reconstruction of I-15 in Utah County from Lehi to U.S. 6. What's more, a 0.05 percent sales tax increase was enacted that will raise about $22 million annually to fix "choke point" road projects throughout the state. (Choke points are road projects that require little money but have a big impact on congestion.)

Salt Lake City needs $35 million to add a light-rail line from downtown to the Salt Lake International Airport. SB 245, Funding Relating to Airports, Highways, and Public Transit, allows Salt Lake City to raise the $35 million by earmarking for TRAX a $2 portion of the existing $10 local option fee Salt Lake City residents already pay when registering their vehicles. This raises approximately $1.8 million annually. UTA will now be able to bond against this revenue stream to pay for the light rail enhancements and it won't be necessary for Salt Lake City to dip into airport improvement funds to pay for the new TRAX line.

SB 245 also creates two new ways for Utah County and Washington County to raise money to enhance their respective airports, and St. George will get a $39 million "bridge loan" from the state to allow it to immediately start building a new airport southeast of the city.

Under SB 237, Delta Air Lines receives a $5.7 million tax break to help it retain its hub in Salt Lake City.

Health Care Reform

Health care reform is a complex, divisive issue, and Utah's legislators acted prudently as they set in motion a health care reformation system that could contain healthcare costs, improve quality, and provide universal insurance coverage. HB 133, Health System Reform, creates a task force to study major reform and let the marketplace share the burden. The Health Care Reform Task Force will soon get underway amid hope and optimism that, over time, we can control skyrocketing health care costs and expand insurance coverage to nearly everyone. That said, it won't be easy.

Immigration

Various Immigration bills brought on some of the most heated debate during the legislative session. In the end, the ?omnibus? immigration bill, SB 81, was passed and signed into law by Governor Jon Huntsman. The most important amendment made to the bill was its effective date of July 1, 2009. The delayed effective date was intended to give stakeholders from business to health service communities an opportunity to evaluate its potential impact. Upon the effective date, public employers and state contractors or subcontractors must use an electronic Status Verification System to verify work eligibility status of new hires. The law also mandates that a lawful employee cannot be discharged and "replaced" by (or have his/her duties assumed by) an employee that the employer knows (or reasonably should have known) is an unauthorized alien. Employers using a Status Verification System are exempt from liability.

Two other bills that would have repealed in-state tuition and driving privilege cards for undocumented immigrants failed to find support in the Senate, despite both passing the House. Instead, the Senate passed HB 171, Driving Privilege Card Amendments, which tightened the rules for the driving cards and killed outright all attempts to repeal the instate tuition waiver for undocumented immigrants.

Energy ? Going Green

SB 202, Energy Resource and Carbon Emission Reduction Initiative, passed with overwhelming support. Beginning in the year 2025, the law requires that 20 percent of an electrical corporation's or municipal electric utility's adjusted retail electric sales come from qualifying electricity, including renewable energy resources, if cost effective. It also requires plans and reports concerning an electrical corporation's or municipal electric utility's progress in acquiring qualifying electricity.

Taxation

The legislature adopted a small, statewide sales tax increase of 0.05 percent, increasing the sales tax rate from 4.65 to 4.70 percent. Approximately $22 million of the increase will be used to address transportation ?chokepoints.? The sales tax increase will also be used to pay for the $18.7 million health care tax credit. The 0.05 percent sales tax increase means that for every $100 in non-food purchases Utahns will pay 5 cents more in sales tax?approximately $9 more in sales tax paid per Utahn per year.

At the same time, legislative leadership chose to exempt aircraft maintenance and repair costs from Utah sales tax to aid in attracting aviation service companies to the state.

Legislative leaders called the deal a "tax shift" because the sales tax increase is actually offset by other tax cuts.

Economic Development

The legislature increased USTAR's annual allocation by $2.5 million this year, raising the total to $17.5 million rather than the $25 million hoped for, partly due to lower-than-anticipated state revenues.

The state's Fund of Funds program, which is helping to draw venture capital firms and money into the state, received a second cycle of funds.

HB 37, the Utah Business Resource Centers Act was passed. HB 37 is a great piece of legislation that will help small businesses through the establishment and administration of business resource centers by GOED. The centers will provide one-stop resources and assistance in the way of business support, education, sources of funding, training and networking to Utah businesses.

Finally, legislators opted to make a change to the existing state incentive program that will convert tax rebates to tax credits. This change will decrease the overall impact of economic development incentives on the general fund and create additional ease in what can be a complicated process.

CALENDAR

April 1-3: JEC (Paris)

April 14-16: SME (Salt Lake City)
April 16: Executive Committee (EDCUtah)

May 4-7: CoreNet (San Diego)
May 14: Board Meeting

May 18-21: ICSC (Las Vegas)
May 18-22: SAMPE (Long Beach)
June 4: Golf Tournament (Wasatch Mountain)
June 9-12: AUVSI (San Diego)
June 17-20: BIO (San Diego)
June 18: Executive Committee (EDCUtah)
June 25: Quarterly Update (location TBD)
Aug. 6: OIA Thought Leader
Sept. 13-17: IAMC (Oklahoma)
Sept. 25: What's Goin' Down Up North - Northern Utah Economic Summit Thursday, September 25, 9 a.m. - 3 p.m. Utah State University Innovation Campus, North Logan. Registration form.
Oct. 9-12: CoreNet (Orlando)
Oct. 22: Quarterly Update
Dec. 17: Holiday Open House (EDCUtah)