S.B. 29 Enrolled

1

TRUTH IN TAXATION AMENDMENTS
2 2008 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Wayne L. Niederhauser
5 House Sponsor: John Dougall
6
7 LONG TITLE
8 General Description:
9 This bill amends provisions in the Minimum School Program Act and the Property Tax
10 Act relating to property tax advertisement and hearing requirements.
11 Highlighted Provisions:
12 This bill:
13 . amends certain exemptions from property tax advertisement and hearing
14 requirements;
15 . requires a school district to include a statement in its proposition submitted to its
16 voters voting on the imposition or modification of a voted leeway program under
17 certain circumstances;
18 . provides that a school district may continue to receive the full amount of state
19 guarantee money tied to the voted leeway program and board approved leeway for a
20 period of five years if the school district's guarantee would have been reduced solely
21 due to changes in the school district's certified tax rate;
22 . defines terms; and
23 . makes technical changes.
24 Monies Appropriated in this Bill:
25 None
26 Other Special Clauses:
27 This bill takes effect on July 1, 2008.
28 Utah Code Sections Affected:
29 AMENDS:

30 17-34-3, as last amended by Laws of Utah 2005, First Special Session, Chapter 9
31 17C-1-408, as renumbered and amended by Laws of Utah 2006, Chapter 359
32 53A-16-106, as last amended by Laws of Utah 1994, Chapter 12
33 53A-17a-133, as last amended by Laws of Utah 2006, Chapter 26
34 53A-17a-134, as last amended by Laws of Utah 2006, Chapter 26
35 53A-19-102, as last amended by Laws of Utah 2007, Chapter 92
36 53A-19-105, as last amended by Laws of Utah 2003, Chapter 122
37 59-2-102, as last amended by Laws of Utah 2007, Chapters 107, 234, and 329
38 59-2-505, as last amended by Laws of Utah 2003, Chapter 208
39 59-2-908, as last amended by Laws of Utah 1995, Chapter 278
40 59-2-913, as last amended by Laws of Utah 2007, Chapter 107
41 59-2-914, as last amended by Laws of Utah 1995, Chapter 278
42 59-2-918, as last amended by Laws of Utah 2006, Chapters 26 and 104
43 59-2-918.5, as last amended by Laws of Utah 2000, Chapter 61
44 59-2-918.6, as enacted by Laws of Utah 2007, Chapter 297
45 59-2-919, as last amended by Laws of Utah 2006, Chapters 26 and 104
46 59-2-924, as last amended by Laws of Utah 2007, Chapters 107 and 329
47 59-2-1004, as last amended by Laws of Utah 2001, Chapter 106
48 59-2-1330, as last amended by Laws of Utah 2002, Chapters 196 and 240
49 ENACTS:
50 59-2-919.1, Utah Code Annotated 1953
51 59-2-924.2, Utah Code Annotated 1953
52
53 Be it enacted by the Legislature of the state of Utah:
54 Section 1. Section 17-34-3 is amended to read:
55 17-34-3. Taxes or service charges.
56 (1) (a) If a county furnishes the municipal-type services and functions described in
57 Section 17-34-1 to areas of the county outside the limits of incorporated cities or towns, the

58 entire cost of the services or functions so furnished shall be defrayed from funds that the county
59 has derived from:
60 (i) taxes that the county may lawfully levy or impose outside the limits of incorporated
61 towns or cities;
62 (ii) service charges or fees the county may impose upon the persons benefited in any
63 way by the services or functions; or
64 (iii) a combination of these sources.
65 (b) As the taxes or service charges or fees are levied and collected, they shall be placed
66 in a special revenue fund of the county and shall be disbursed only for the rendering of the
67 services or functions established in Section 17-34-1 within the unincorporated areas of the
68 county or as provided in Subsection 10-2-121 (2).
69 (2) For the purpose of levying taxes, service charges, or fees provided in this section,
70 the county legislative body may establish a district or districts in the unincorporated areas of the
71 county.
72 (3) Nothing contained in this chapter may be construed to authorize counties to impose
73 or levy taxes not otherwise allowed by law.
74 [(4) (a) A county required under Subsection 17-34-1 (4) to provide advanced life
75 support and paramedic services to the unincorporated area of the county and that previously
76 paid for those services through a countywide levy may increase its levy under Subsection
77 (1)(a)(i) to generate in the unincorporated area of the county the same amount of revenue as the
78 county loses from that area due to the required decrease in the countywide certified tax rate
79 under Subsection 59-2-924 (2)(k)(i).]
80 [(b) An increase in tax rate under Subsection (4)(a) is exempt from the notice and
81 hearing requirements of Sections 59-2-918 and 59-2-919 .]
82 [(5)] (4) Notwithstanding any other provision of this chapter, a county providing fire,
83 paramedic, and police protection services in a designated recreational area, as provided in
84 Subsection 17-34-1 (5), may fund those services from the county general fund with revenues
85 derived from both inside and outside the limits of cities and towns, and the funding of those

86 services is not limited to unincorporated area revenues.
87 Section 2. Section 17C-1-408 is amended to read:
88 17C-1-408. Base taxable value to be adjusted to reflect other changes.
89 (1) (a) (i) As used in this Subsection (1), "qualifying decrease" means:
90 (A) a decrease of more than 20% from the previous tax year's levy; or
91 (B) a cumulative decrease over a consecutive five-year period of more than 100% from
92 the levy in effect at the beginning of the five-year period.
93 (ii) The year in which a qualifying decrease under Subsection (1)(a)(i)(B) occurs is the
94 fifth year of the five-year period.
95 (b) If there is a qualifying decrease in the minimum basic school levy under Section
96 59-2-902 that would result in a reduction of the amount of tax increment to be paid to an
97 agency:
98 (i) the base taxable value of taxable property within the project area shall be reduced in
99 the year of the qualifying decrease to the extent necessary, even if below zero, to provide the
100 agency with approximately the same amount of tax increment that would have been paid to the
101 agency each year had the qualifying decrease not occurred; and
102 (ii) the amount of tax increment paid to the agency each year for the payment of bonds
103 and indebtedness may not be less than what would have been paid to the agency if there had
104 been no qualifying decrease.
105 (2) (a) The amount of the base taxable value to be used in determining tax increment
106 shall be:
107 (i) increased or decreased by the amount of an increase or decrease that results from:
108 (A) a statute enacted by the Legislature or by the people through an initiative;
109 (B) a judicial decision;
110 (C) an order from the State Tax Commission to a county to adjust or factor its
111 assessment rate under Subsection 59-2-704 (2);
112 (D) a change in exemption provided in Utah Constitution Article XIII, Section 2, or
113 Section 59-2-103 ; or

114 (E) an increase or decrease in the percentage of fair market value, as defined under
115 Section 59-2-102 ; and
116 (ii) reduced for any year to the extent necessary, even if below zero, to provide an
117 agency with approximately the same amount of money the agency would have received without
118 a reduction in the county's certified tax rate if:
119 (A) in that year there is a decrease in the county's certified tax rate under Subsection
120 [ 59-2-924 (2)(c) or (d)(i)] 59-2-924.2 (2) or (3)(a);
121 (B) the amount of the decrease is more than 20% of the county's certified tax rate of the
122 previous year; and
123 (C) the decrease would result in a reduction of the amount of tax increment to be paid
124 to the agency.
125 (b) Notwithstanding an increase or decrease under Subsection (2)(a), the amount of tax
126 increment paid to an agency each year for payment of bonds or other indebtedness may not be
127 less than would have been paid to the agency each year if there had been no increase or decrease
128 under Subsection (2)(a).
129 Section 3. Section 53A-16-106 is amended to read:
130 53A-16-106. Annual certification of tax rate proposed by local school board --
131 Inclusion of school district budget -- Modified filing date.
132 (1) Prior to June 22 of each year, each local school board shall certify to the county
133 legislative body in which the district is located, on forms prescribed by the State Tax
134 Commission, the proposed tax rate approved by the local school board.
135 (2) A copy of the district's budget, including items under Section 53A-19-101 , and a
136 certified copy of the local school board's resolution which approved the budget and set the tax
137 rate for the subsequent school year beginning July 1 shall accompany the tax rate.
138 (3) If the tax rate approved by the board is in excess of the "certified tax rate" as
139 defined under Subsection 59-2-924[(2)](3) (a), the date for filing the tax rate and budget
140 adopted by the board shall be that established under Section 59-2-919 .
141 Section 4. Section 53A-17a-133 is amended to read:

142 53A-17a-133. State-supported voted leeway program authorized -- Election
143 requirements -- State guarantee -- Reconsideration of the program.
144 (1) An election to consider adoption or modification of a voted leeway program is
145 required if initiative petitions signed by 10% of the number of electors who voted at the last
146 preceding general election are presented to the local school board or by action of the board.
147 (2) (a) (i) To establish a voted leeway program, a majority of the electors of a district
148 voting at an election in the manner set forth in Section 53A-16-110 must vote in favor of a
149 special tax.
150 (ii) The tax rate may not exceed .002 per dollar of taxable value.
151 (b) The district may maintain a school program which exceeds the cost of the program
152 referred to in Section 53A-17a-145 with this voted leeway.
153 (c) In order to receive state support the first year, a district must receive voter approval
154 no later than December 1 of the year prior to implementation.
155 (3) (a) Under the voted leeway program, the state shall contribute an amount sufficient
156 to guarantee $17.54 per weighted pupil unit for each .0001 of the first .0016 per dollar of
157 taxable value.
158 (b) The same dollar amount guarantee per weighted pupil unit for the .0016 per dollar
159 of taxable value under Subsection (3)(a) shall apply to the board-approved leeway authorized in
160 Section 53A-17a-134 , so that the guarantee shall apply up to a total of .002 per dollar of
161 taxable value if a school district levies a tax rate under both programs.
162 (c) (i) Beginning July 1, 2005, the $17.54 guarantee under Subsections (3)(a) and (b)
163 shall be indexed each year to the value of the weighted pupil unit by making the value of the
164 guarantee equal to .008544 times the value of the prior year's weighted pupil unit.
165 (ii) The guarantee shall increase by .0005 times the value of the prior year's weighted
166 pupil unit for each succeeding year until the guarantee is equal to .010544 times the value of the
167 prior year's weighted pupil unit.
168 (d) (i) The amount of state guarantee money to which a school district would otherwise
169 be entitled to under this Subsection (3) may not be reduced for the sole reason that the district's

170 levy is reduced as a consequence of changes in the certified tax rate under Section 59-2-924
171 pursuant to changes in property valuation.
172 (ii) Subsection (3)(d)(i) applies for a period of [two] five years following any such
173 change in the certified tax rate.
174 (4) (a) An election to modify an existing voted leeway program is not a reconsideration
175 of the existing program unless the proposition submitted to the electors expressly so states.
176 (b) A majority vote opposing a modification does not deprive the district of authority to
177 continue an existing program.
178 (c) If adoption of a leeway program is contingent upon an offset reducing other local
179 school board levies, the board must allow the electors, in an election, to consider modifying or
180 discontinuing the program prior to a subsequent increase in other levies that would increase the
181 total local school board levy.
182 (d) Nothing contained in this section terminates, without an election, the authority of a
183 school district to continue an existing voted leeway program previously authorized by the
184 voters.
185 (5) Notwithstanding Section 59-2-918 , a school district may budget an increased
186 amount of ad valorem property tax revenue derived from a voted leeway imposed under this
187 section in addition to revenue from new growth as defined in Subsection 59-2-924 [(2)](4),
188 without having to comply with the advertisement requirements of Section 59-2-918 , if:
189 (a) the voted leeway is approved:
190 [(a)] (i) in accordance with Section 53A-16-110 on or after January 1, 2003; and
191 [(b)] (ii) within the four-year period immediately preceding the year in which the school
192 district seeks to budget an increased amount of ad valorem property tax revenue derived from
193 the voted leeway[.]; and
194 (b) for a voted leeway approved or modified in accordance with this section on or after
195 January 1, 2009, the school district complies with the requirements of Subsection (7).
196 (6) Notwithstanding Section 59-2-919 , a school district may levy a tax rate under this
197 section that exceeds the certified tax rate without having to comply with the advertisement

198 requirements of Section 59-2-919 if:
199 (a) the levy exceeds the certified tax rate as the result of a school district budgeting an
200 increased amount of ad valorem property tax revenue derived from a voted leeway imposed
201 under this section; [and]
202 (b) if the voted leeway was approved:
203 (i) in accordance with Section 53A-16-110 on or after January 1, 2003; and
204 (ii) within the four-year period immediately preceding the year in which the school
205 district seeks to budget an increased amount of ad valorem property tax revenue derived from
206 the voted leeway[.]; and
207 (c) for a voted leeway approved or modified in accordance with this section on or after
208 January 1, 2009, the school district complies with requirements of Subsection (7).
209 (7) For purposes of Subsection (5)(b) or (6)(c), the proposition submitted to the
210 electors regarding the adoption or modification of a voted leeway program shall contain the
211 following statement:
212 "A vote in favor of this tax means that (name of the school district) may increase
213 revenue from this property tax without advertising the increase for the next five years."
214 Section 5. Section 53A-17a-134 is amended to read:
215 53A-17a-134. Board-approved leeway -- Purpose -- State support -- Disapproval.
216 (1) Each local school board may levy a tax rate of up to .0004 per dollar of taxable
217 value to maintain a school program above the cost of the basic school program as follows:
218 (a) a local school board shall use the monies generated by the tax for class size
219 reduction within the school district;
220 (b) if a local school board determines that the average class size in the school district is
221 not excessive, it may use the monies for other school purposes but only if the board has
222 declared the use for other school purposes in a public meeting prior to levying the tax rate; and
223 (c) a district may not use the monies for other school purposes under Subsection (1)(b)
224 until it has certified in writing that its class size needs are already being met and has identified
225 the other school purposes for which the monies will be used to the State Board of Education

226 and the state board has approved their use for other school purposes.
227 (2) (a) The state shall contribute an amount sufficient to guarantee $17.54 per weighted
228 pupil unit for each .0001 per dollar of taxable value.
229 (b) The guarantee shall increase in the same manner as provided for the voted leeway
230 guarantee in Subsections 53A-17a-133 (3)(c)(i) and (ii).
231 (c) (i) The amount of state guarantee money to which a school district would otherwise
232 be entitled to under this Subsection (2) may not be reduced for the sole reason that the district's
233 levy is reduced as a consequence of changes in the certified tax rate under Section 59-2-924
234 pursuant to changes in property valuation.
235 (ii) Subsection (2)(c)(i) applies for a period of [two] five years following any such
236 change in the certified tax rate.
237 (3) The levy authorized under this section is not in addition to the maximum rate of
238 .002 authorized in Section 53A-17a-133 , but is a board-authorized component of the total tax
239 rate under that section.
240 (4) As an exception to Section 53A-17a-133 , the board-authorized levy does not
241 require voter approval, but the board may require voter approval if requested by a majority of
242 the board.
243 (5) An election to consider disapproval of the board-authorized levy is required, if
244 within 60 days after the levy is established by the board, referendum petitions signed by the
245 number of legal voters required in Section 20A-7-301 , who reside within the school district, are
246 filed with the school district.
247 (6) (a) A local school board shall establish its board-approved levy by April 1 to have
248 the levy apply to the fiscal year beginning July 1 in that same calendar year except that if an
249 election is required under this section, the levy applies to the fiscal year beginning July 1 of the
250 next calendar year.
251 (b) The approval and disapproval votes authorized in Subsections (4) and (5) shall
252 occur at a general election in even-numbered years, except that a vote required under this
253 section in odd-numbered years shall occur at a special election held on a day in odd-numbered

254 years that corresponds to the general election date. The school district shall pay for the cost of
255 a special election.
256 (7) (a) Modification or termination of a voter-approved leeway rate authorized under
257 this section is governed by Section 53A-17a-133 .
258 (b) A board-authorized leeway rate may be modified or terminated by a majority vote of
259 the board subject to disapproval procedures specified in this section.
260 (8) A board levy election does not require publication of a voter information pamphlet.
261 Section 6. Section 53A-19-102 is amended to read:
262 53A-19-102. Local school boards budget procedures.
263 (1) Prior to June 22 of each year, each local school board shall adopt a budget and
264 make appropriations for the next fiscal year. If the tax rate in the proposed budget exceeds the
265 certified tax rate defined in [Subsection] Section 59-2-924 [(2)], the board shall comply with
266 Sections 59-2-918 and 59-2-919 in adopting the budget, except as provided by Section
267 53A-17a-133 .
268 (2) Prior to the adoption of a budget containing a tax rate which does not exceed the
269 certified tax rate, the board shall hold a public hearing, as defined in Section 10-9a-103 , on the
270 proposed budget. In addition to complying with Title 52, Chapter 4, Open and Public Meetings
271 Act, in regards to the hearing, the board shall do the following:
272 (a) publish the required newspaper notice at least ten days prior to the hearing; and
273 (b) file a copy of the proposed budget with the board's business administrator for public
274 inspection at least ten days prior to the hearing.
275 (3) The board shall file a copy of the adopted budget with the state auditor and the
276 State Board of Education.
277 Section 7. Section 53A-19-105 is amended to read:
278 53A-19-105. School district interfund transfers.
279 (1) A school district shall spend revenues only within the fund for which they were
280 originally authorized, levied, collected, or appropriated.
281 (2) Except as otherwise provided in this section, school district interfund transfers of

282 residual equity are prohibited.
283 (3) The State Board of Education may authorize school district interfund transfers of
284 residual equity when a district states its intent to create a new fund or expand, contract, or
285 liquidate an existing fund.
286 (4) The State Board of Education may also authorize school district interfund transfers
287 of residual equity for a financially distressed district if the board determines the following:
288 (a) the district has a significant deficit in its maintenance and operations fund caused by
289 circumstances not subject to the administrative decisions of the district;
290 (b) the deficit cannot be reasonably reduced under Section 53A-19-104 ; and
291 (c) without the transfer, the school district will not be capable of meeting statewide
292 educational standards adopted by the State Board of Education.
293 (5) The board shall develop standards for defining and aiding financially distressed
294 school districts under this section in accordance with Title 63, Chapter 46a, Utah Administrative
295 Rulemaking Act.
296 (6) (a) All debt service levies not subject to certified tax rate hearings shall be recorded
297 and reported in the debt service fund.
298 (b) Debt service levies under Subsection 59-2-924 [(2)(a)(v)(C)](3)(e)(iii) that are not
299 subject to the certified tax rate hearing requirements of Sections 59-2-918 and 59-2-919 may
300 not be used for any purpose other than retiring general obligation debt.
301 (c) Amounts from these levies remaining in the debt service fund at the end of a fiscal
302 year shall be used in subsequent years for general obligation debt retirement.
303 (d) Any amounts left in the debt service fund after all general obligation debt has been
304 retired may be transferred to the capital projects fund upon completion of the budgetary hearing
305 process required under Section 53A-19-102 .
306 Section 8. Section 59-2-102 is amended to read:
307 59-2-102. Definitions.
308 As used in this chapter and title:
309 (1) "Aerial applicator" means aircraft or rotorcraft used exclusively for the purpose of

310 engaging in dispensing activities directly affecting agriculture or horticulture with an
311 airworthiness certificate from the Federal Aviation Administration certifying the aircraft or
312 rotorcraft's use for agricultural and pest control purposes.
313 (2) "Air charter service" means an air carrier operation which requires the customer to
314 hire an entire aircraft rather than book passage in whatever capacity is available on a scheduled
315 trip.
316 (3) "Air contract service" means an air carrier operation available only to customers
317 who engage the services of the carrier through a contractual agreement and excess capacity on
318 any trip and is not available to the public at large.
319 (4) "Aircraft" is as defined in Section 72-10-102 .
320 (5) "Airline" means any air carrier operating interstate routes on a scheduled basis
321 which offers to fly passengers or cargo on the basis of available capacity on regularly scheduled
322 routes.
323 (6) "Assessment roll" means a permanent record of the assessment of property as
324 assessed by the county assessor and the commission and may be maintained manually or as a
325 computerized file as a consolidated record or as multiple records by type, classification, or
326 categories.
327 (7) (a) "Certified revenue levy" means a property tax levy that provides the same
328 amount of ad valorem property tax revenue as was collected for the prior year, plus new
329 growth, but exclusive of revenue from collections from redemptions, interest, and penalties.
330 (b) For purposes of this Subsection (7), "ad valorem property tax revenue" does not
331 include property tax revenue received by a taxing entity from personal property that is:
332 (i) assessed by a county assessor in accordance with Part 3, County Assessment; and
333 (ii) semiconductor manufacturing equipment.
334 (8) "County-assessed commercial vehicle" means:
335 (a) any commercial vehicle, trailer, or semitrailer which is not apportioned under
336 Section 41-1a-301 and is not operated interstate to transport the vehicle owner's goods or
337 property in furtherance of the owner's commercial enterprise;

338 (b) any passenger vehicle owned by a business and used by its employees for
339 transportation as a company car or vanpool vehicle; and
340 (c) vehicles which are:
341 (i) especially constructed for towing or wrecking, and which are not otherwise used to
342 transport goods, merchandise, or people for compensation;
343 (ii) used or licensed as taxicabs or limousines;
344 (iii) used as rental passenger cars, travel trailers, or motor homes;
345 (iv) used or licensed in this state for use as ambulances or hearses;
346 (v) especially designed and used for garbage and rubbish collection; or
347 (vi) used exclusively to transport students or their instructors to or from any private,
348 public, or religious school or school activities.
349 (9) (a) Except as provided in Subsection (9)(b), for purposes of Section 59-2-801 ,
350 "designated tax area" means a tax area created by the overlapping boundaries of only the
351 following taxing entities:
352 (i) a county; and
353 (ii) a school district.
354 (b) Notwithstanding Subsection (9)(a), "designated tax area" includes a tax area created
355 by the overlapping boundaries of:
356 (i) the taxing entities described in Subsection (9)(a); and
357 (ii) (A) a city or town if the boundaries of the school district under Subsection (9)(a)
358 and the boundaries of the city or town are identical; or
359 (B) a special service district if the boundaries of the school district under Subsection
360 (9)(a) are located entirely within the special service district.
361 (10) "Eligible judgment" means a final and unappealable judgment or order under
362 Section 59-2-1330 :
363 (a) that became a final and unappealable judgment or order no more than 14 months
364 prior to the day on which the notice required by [Subsection 59-2-919 (4)] Section 59-2-919.1 is
365 required to be mailed; and

366 (b) for which a taxing entity's share of the final and unappealable judgment or order is
367 greater than or equal to the lesser of:
368 (i) $5,000; or
369 (ii) 2.5% of the total ad valorem property taxes collected by the taxing entity in the
370 previous fiscal year.