S.B. 261 Enrolled

1

POLITICAL SUBDIVISION ANNEXATION
2 AMENDMENTS
3 2008 GENERAL SESSION
4 STATE OF UTAH
5 Chief Sponsor: Michael G. Waddoups
6 House Sponsor: Stephen H. Urquhart
7
8 LONG TITLE
9 General Description:
10 This bill amends the Provisions Applicable to All Local Districts Chapter and the
11 Property Tax Act relating to the annexation of local districts.
12 Highlighted Provisions:
13 This bill:
14 . amends the effective dates of certain local districts;
15 . provides the conditions of the effective date of an annexation;
16 . modifies the calculation of the certified tax rate for a local district due to annexation;
17 and
18 . makes technical changes.
19 Monies Appropriated in this Bill:
20 None
21 Other Special Clauses:
22 This bill coordinates with S.B. 29, Truth in Taxation Amendments, and H.B. 77,
23 Personal Property Tax Amendments, by substantively modifying language.
24 Utah Code Sections Affected:
25 AMENDS:
26 17B-1-414, as renumbered and amended by Laws of Utah 2007, Chapter 329
27 17B-1-416, as renumbered and amended by Laws of Utah 2007, Chapter 329
28 59-2-924, as last amended by Laws of Utah 2007, Chapters 107 and 329
29

30 Be it enacted by the Legislature of the state of Utah:
31 Section 1. Section 17B-1-414 is amended to read:
32 17B-1-414. Resolution approving an annexation -- Notice of annexation -- When
33 annexation complete.
34 (1) (a) Subject to Subsection (1)(b), the local district board shall adopt a resolution
35 approving the annexation of the area proposed to be annexed or rejecting the proposed
36 annexation within 30 days after:
37 (i) expiration of the protest period under Subsection 17B-1-412 (2), if sufficient protests
38 to require an election are not filed;
39 (ii) for a petition that meets the requirements of Subsection 17B-1-413 (1):
40 (A) a public hearing under Section 17B-1-409 is held, if the board chooses or is
41 required to hold a public hearing under Subsection 17B-1-413 (2)(a)(ii); or
42 (B) expiration of the time for submitting a request for public hearing under Subsection
43 17B-1-413 (2)(a)(ii)(B), if no request is submitted and the board chooses not to hold a public
44 hearing.
45 (b) If the local district has entered into an agreement with the United States that
46 requires the consent of the United States for an annexation of territory to the district, a
47 resolution approving annexation under this part may not be adopted until the written consent of
48 the United States is obtained and filed with the board of trustees.
49 (2) (a) The board shall file a notice with the lieutenant governor:
50 (i) within 30 days after adoption of a resolution under Subsection (1), Subsection
51 17B-1-412 (3)(c)(i), or Section 17B-1-415 ; and
52 (ii) as soon as practicable after receiving the notice under Subsection 10-2-425 (2) of a
53 municipal annexation that causes an automatic annexation to a local district under Section
54 17B-1-416 .
55 (b) The notice required under Subsection (2)(a) shall:
56 (i) be accompanied by:
57 (A) if applicable, a copy of the board resolution approving the annexation; and

58 (B) an accurate map depicting the boundaries of the area to be annexed or a legal
59 description of the area to be annexed, adequate for purposes of the county assessor and
60 recorder;
61 (ii) for an annexation pursuant to a resolution described in Subsection (2)(a)(i), include
62 a certification by the local district board that all requirements for the annexation have been
63 complied with; and
64 (iii) for an automatic annexation to a local district under Section 17B-1-416 , state that
65 an area outside the boundaries of the local district is being automatically annexed to the local
66 district under Section 17B-1-416 because of a municipal annexation under Title 10, Chapter 2,
67 Part 4, Annexation.
68 (3) (a) As used in this Subsection (3), "fire district annexation" means an annexation
69 under this part of an area located in a county of the first class to a local district:
70 (i) created to provide fire protection, paramedic, and emergency services; and
71 (ii) in the creation of which an election was not required because of Subsection
72 17B-1-214 (3)(c).
73 [(3) The] (b) An annexation [shall be] under this part is complete and becomes
74 effective:
75 [(a)] (i) for an annexation pursuant to a resolution described in Subsection (2)(a)(i)[,]:
76 (A) (I) on July 1 for a fire district annexation, if the lieutenant governor issues the
77 certificate of annexation under Section 67-1a-6.5 from January 1 through June 30; or
78 (II) on January 1 for a fire district annexation, if the lieutenant governor issues the
79 certificate of annexation under Section 67-1a-6.5 from July 1 through December 31; or
80 (B) upon the lieutenant governor's issuance of the certificate of annexation under
81 Section 67-1a-6.5 , for an annexation other than an annexation described in Subsection
82 (3)(b)(i)(A); and
83 [(b)] (ii) for an automatic annexation that is the subject of a notice under Subsection
84 (2)(a)(ii)[,]:
85 (A) (I) on July 1 for a fire district annexation, if the lieutenant governor issues the

86 certificate of annexation under Subsection 10-1-117 (3)(b) from January 1 through June 30; or
87 (II) on January 1 for a fire district annexation, if the lieutenant governor issues the
88 certificate of annexation under Subsection 10-1-117 (3)(b) from July 1 through December 31; or
89 (B) upon the lieutenant governor's issuance of the certificate of annexation under
90 Subsection 10-1-117 (3)(b), for an annexation other than an annexation described in Subsection
91 (3)(b)(ii)(A).
92 Section 2. Section 17B-1-416 is amended to read:
93 17B-1-416. Automatic annexation to a district providing fire protection,
94 paramedic, and emergency services.
95 (1) An area outside the boundaries of a local district that is annexed to a municipality or
96 added to a municipality by a boundary adjustment under Title 10, Chapter 2, Part 4,
97 Annexation, is automatically annexed to the local district if:
98 (a) the local district provides fire protection, paramedic, and emergency services;
99 (b) an election for the creation of the local district was not required because of
100 Subsection 17B-1-214 (3)(c); and
101 (c) before the municipal annexation or boundary adjustment, the entire municipality that
102 is annexing the area or adding the area by boundary adjustment was included within the local
103 district.
104 (2) The effective date of an annexation under this section is governed by Subsection
105 17B-1-414 (3)(b)(ii).
106 Section 3. Section 59-2-924 is amended to read:
107 59-2-924. Report of valuation of property to county auditor and commission --
108 Transmittal by auditor to governing bodies -- Certified tax rate -- Calculation of certified
109 tax rate -- Rulemaking authority -- Adoption of tentative budget.
110 (1) (a) Before June 1 of each year, the county assessor of each county shall deliver to
111 the county auditor and the commission the following statements:
112 (i) a statement containing the aggregate valuation of all taxable property in each taxing
113 entity; and

114 (ii) a statement containing the taxable value of any additional personal property
115 estimated by the county assessor to be subject to taxation in the current year.
116 (b) The county auditor shall, on or before June 8, transmit to the governing body of
117 each taxing entity:
118 (i) the statements described in Subsections (1)(a)(i) and (ii);
119 (ii) an estimate of the revenue from personal property;
120 (iii) the certified tax rate; and
121 (iv) all forms necessary to submit a tax levy request.
122 (2) (a) (i) The "certified tax rate" means a tax rate that will provide the same ad valorem
123 property tax revenues for a taxing entity as were budgeted by that taxing entity for the prior
124 year.
125 (ii) For purposes of this Subsection (2), "ad valorem property tax revenues" do not
126 include:
127 (A) collections from redemptions;
128 (B) interest;
129 (C) penalties; and
130 (D) revenue received by a taxing entity from personal property that is:
131 (I) assessed by a county assessor in accordance with Part 3, County Assessment; and
132 (II) semiconductor manufacturing equipment.
133 (iii) (A) Except as otherwise provided in this section, the certified tax rate shall be
134 calculated by dividing the ad valorem property tax revenues budgeted for the prior year by the
135 taxing entity by the amount calculated under Subsection (2)(a)(iii)(B).
136 (B) For purposes of Subsection (2)(a)(iii)(A), the legislative body of a taxing entity
137 shall calculate an amount as follows:
138 (I) calculate for the taxing entity the difference between:
139 (Aa) the aggregate taxable value of all property taxed; and
140 (Bb) any redevelopment adjustments for the current calendar year;
141 (II) after making the calculation required by Subsection (2)(a)(iii)(B)(I), calculate an

142 amount determined by increasing or decreasing the amount calculated under Subsection
143 (2)(a)(iii)(B)(I) by the average of the percentage net change in the value of taxable property for
144 the equalization period for the three calendar years immediately preceding the current calendar
145 year;
146 (III) after making the calculation required by Subsection (2)(a)(iii)(B)(II), calculate the
147 product of:
148 (Aa) the amount calculated under Subsection (2)(a)(iii)(B)(II); and
149 (Bb) the percentage of property taxes collected for the five calendar years immediately
150 preceding the current calendar year; and
151 (IV) after making the calculation required by Subsection (2)(a)(iii)(B)(III), calculate an
152 amount determined by subtracting from the amount calculated under Subsection
153 (2)(a)(iii)(B)(III) any new growth as defined in this section:
154 (Aa) within the taxing entity; and
155 (Bb) for the current calendar year.
156 (C) For purposes of Subsection (2)(a)(iii)(B)(I), the aggregate taxable value of all
157 property taxed:
158 (I) except as provided in Subsection (2)(a)(iii)(C)(II), includes the total taxable value of
159 the real and personal property contained on the tax rolls of the taxing entity; and
160 (II) does not include the total taxable value of personal property contained on the tax
161 rolls of the taxing entity that is:
162 (Aa) assessed by a county assessor in accordance with Part 3, County Assessment; and
163 (Bb) semiconductor manufacturing equipment.
164 (D) For purposes of Subsection (2)(a)(iii)(B)(II), for calendar years beginning on or
165 after January 1, 2007, the value of taxable property does not include the value of personal
166 property that is:
167 (I) within the taxing entity assessed by a county assessor in accordance with Part 3,
168 County Assessment; and
169 (II) semiconductor manufacturing equipment.

170 (E) For purposes of Subsection (2)(a)(iii)(B)(III)(Bb), for calendar years beginning on
171 or after January 1, 2007, the percentage of property taxes collected does not include property
172 taxes collected from personal property that is:
173 (I) within the taxing entity assessed by a county assessor in accordance with Part 3,
174 County Assessment; and
175 (II) semiconductor manufacturing equipment.
176 (F) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
177 commission may prescribe rules for calculating redevelopment adjustments for a calendar year.
178 (iv) (A) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking
179 Act, the commission shall make rules determining the calculation of ad valorem property tax
180 revenues budgeted by a taxing entity.
181 (B) For purposes of Subsection (2)(a)(iv)(A), ad valorem property tax revenues
182 budgeted by a taxing entity shall be calculated in the same manner as budgeted property tax
183 revenues are calculated for purposes of Section 59-2-913 .
184 (v) The certified tax rates for the taxing entities described in this Subsection (2)(a)(v)
185 shall be calculated as follows:
186 (A) except as provided in Subsection (2)(a)(v)(B), for new taxing entities the certified
187 tax rate is zero;
188 (B) for each municipality incorporated on or after July 1, 1996, the certified tax rate is:
189 (I) in a county of the first, second, or third class, the levy imposed for municipal-type
190 services under Sections 17-34-1 and 17-36-9 ; and
191 (II) in a county of the fourth, fifth, or sixth class, the levy imposed for general county
192 purposes and such other levies imposed solely for the municipal-type services identified in
193 Section 17-34-1 and Subsection 17-36-3 (22); and
194 (C) for debt service voted on by the public, the certified tax rate shall be the actual levy
195 imposed by that section, except that the certified tax rates for the following levies shall be
196 calculated in accordance with Section 59-2-913 and this section:
197 (I) school leeways provided for under Sections 11-2-7 , 53A-16-110 , 53A-17a-125 ,

198 53A-17a-127 , 53A-17a-133 , 53A-17a-134 , 53A-17a-143 , 53A-17a-145 , and 53A-21-103 ; and
199 (II) levies to pay for the costs of state legislative mandates or judicial or administrative
200 orders under Section 59-2-906.3 .
201 (vi) (A) A judgment levy imposed under Section 59-2-1328 or 59-2-1330 shall be
202 established at that rate which is sufficient to generate only the revenue required to satisfy one or
203 more eligible judgments, as defined in Section 59-2-102 .
204 (B) The ad valorem property tax revenue generated by the judgment levy shall not be
205 considered in establishing the taxing entity's aggregate certified tax rate.
206 (b) (i) For the purpose of calculating the certified tax rate, the county auditor shall use
207 the taxable value of property on the assessment roll.
208 (ii) For purposes of Subsection (2)(b)(i), the taxable value of property on the
209 assessment roll does not include:
210 (A) new growth as defined in Subsection (2)(b)(iii); or
211 (B) the total taxable value of personal property contained on the tax rolls of the taxing
212 entity that is:
213 (I) assessed by a county assessor in accordance with Part 3, County Assessment; and
214 (II) semiconductor manufacturing equipment.
215 (iii) "New growth" means:
216 (A) the difference between the increase in taxable value of the taxing entity from the
217 previous calendar year to the current year; minus
218 (B) the amount of an increase in taxable value described in Subsection (2)(b)(v).
219 (iv) For purposes of Subsection (2)(b)(iii), the taxable value of the taxing entity does
220 not include the taxable value of personal property that is:
221 (A) contained on the tax rolls of the taxing entity if that property is assessed by a
222 county assessor in accordance with Part 3, County Assessment; and
223 (B) semiconductor manufacturing equipment.
224 (v) Subsection (2)(b)(iii)(B) applies to the following increases in taxable value:
225 (A) the amount of increase to locally assessed real property taxable values resulting

226 from factoring, reappraisal, or any other adjustments; or
227 (B) the amount of an increase in the taxable value of property assessed by the
228 commission under Section 59-2-201 resulting from a change in the method of apportioning the
229 taxable value prescribed by:
230 (I) the Legislature;
231 (II) a court;
232 (III) the commission in an administrative rule; or
233 (IV) the commission in an administrative order.
234 (c) Beginning January 1, 1997, if a taxing entity receives increased revenues from
235 uniform fees on tangible personal property under Section 59-2-404 , 59-2-405 , 59-2-405.1 ,
236 59-2-405.2 , or 59-2-405.3 as a result of any county imposing a sales and use tax under Chapter
237 12, Part 11, County Option Sales and Use Tax, the taxing entity shall decrease its certified tax
238 rate to offset the increased revenues.
239 (d) (i) Beginning July 1, 1997, if a county has imposed a sales and use tax under
240 Chapter 12, Part 11, County Option Sales and Use Tax, the county's certified tax rate shall be:
241 (A) decreased on a one-time basis by the amount of the estimated sales and use tax
242 revenue to be distributed to the county under Subsection 59-12-1102 (3); and
243 (B) increased by the amount necessary to offset the county's reduction in revenue from
244 uniform fees on tangible personal property under Section 59-2-404 , 59-2-405 , 59-2-405.1 ,
245 59-2-405.2 , or 59-2-405.3 as a result of the decrease in the certified tax rate under Subsection
246 (2)(d)(i)(A).
247 (ii) The commission shall determine estimates of sales and use tax distributions for
248 purposes of Subsection (2)(d)(i).
249 (e) Beginning January 1, 1998, if a municipality has imposed an additional resort
250 communities sales tax under Section 59-12-402 , the municipality's certified tax rate shall be
251 decreased on a one-time basis by the amount necessary to offset the first 12 months of estimated
252 revenue from the additional resort communities sales and use tax imposed under Section
253 59-12-402 .

254 (f) (i) (A) For fiscal year 2000, the certified tax rate of each county required under
255 Subsection 17-34-1 (4)(a) to provide advanced life support and paramedic services to the
256 unincorporated area of the county shall be decreased by the amount necessary to reduce
257 revenues in that fiscal year by an amount equal to the difference between the amount the county
258 budgeted in its 2000 fiscal year budget for advanced life support and paramedic services
259 countywide and the amount the county spent during fiscal year 2000 for those services,
260 excluding amounts spent from a municipal services fund for those services.
261 (B) For fiscal year 2001, the certified tax rate of each county to which Subsection
262 (2)(f)(i)(A) applies shall be decreased by the amount necessary to reduce revenues in that fiscal
263 year by the amount that the county spent during fiscal year 2000 for advanced life support and
264 paramedic services countywide, excluding amounts spent from a municipal services fund for
265 those services.
266 (ii) (A) A city or town located within a county of the first class to which Subsection
267 (2)(f)(i) applies may increase its certified tax rate by the amount necessary to generate within
268 the city or town the same amount of revenues as the county would collect from that city or
269 town if the decrease under Subsection (2)(f)(i) did not occur.
270 (B) An increase under Subsection (2)(f)(ii)(A), whether occurring in a single fiscal year
271 or spread over multiple fiscal years, is not subject to the notice and hearing requirements of
272 Sections 59-2-918 and 59-2-919 .
273 (g) (i) The certified tax rate of each county required under Subsection 17-34-1 (4)(b) to
274 provide detective investigative services to the unincorporated area of the county shall be
275 decreased:
276 (A) in fiscal year 2001 by the amount necessary to reduce revenues in that fiscal year by
277 at least $4,400,000; and
278 (B) in fiscal year 2002 by the amount necessary to reduce revenues in that fiscal year by
279 an amount equal to the difference between $9,258,412 and the amount of the reduction in
280 revenues under Subsection (2)(g)(i)(A).
281 (ii) (A) (I) Beginning with municipal fiscal year 2002, a city or town located within a

282 county to which Subsection (2)(g)(i) applies may increase its certified tax rate to generate
283 within the city or town the same amount of revenue as the county would have collected during
284 county fiscal year 2001 from within the city or town except for Subsection (2)(g)(i)(A).
285 (II) Beginning with municipal fiscal year 2003, a city or town located within a county to
286 which Subsection (2)(g)(i) applies may increase its certified tax rate to generate within the city
287 or town the same amount of revenue as the county would have collected during county fiscal
288 year 2002 from within the city or town except for Subsection (2)(g)(i)(B).
289 (B) (I) Except as provided in Subsection (2)(g)(ii)(B)(II), an increase in the city or
290 town's certified tax rate under Subsection (2)(g)(ii)(A), whether occurring in a single fiscal year
291 or spread over multiple fiscal years, is subject to the notice and hearing requirements of Sections
292 59-2-918 and 59-2-919 .
293 (II) For an increase under this Subsection (2)(g)(ii) that generates revenue that does not
294 exceed the same amount of revenue as the county would have collected except for Subsection
295 (2)(g)(i), the requirements of Sections 59-2-918 and 59-2-919 do not apply if the city or town:
296 (Aa) publishes a notice that meets the size, type, placement, and frequency requirements
297 of Section 59-2-919 , reflects that the increase is a shift of a tax from one imposed by the county
298 to one imposed by the city or town, and explains how the revenues from the tax increase will be
299 used; and
300 (Bb) holds a public hearing on the tax shift that may be held in conjunction with the city
301 or town's regular budget hearing.
302 (h) (i) This Subsection (2)(h) applies to each county that:
303 (A) establishes a countywide special service district under Title 17A, Chapter 2, Part
304 13, Utah Special Service District Act, to provide jail service, as provided in Subsection
305 17A-2-1304 (1)(a)(x); and
306 (B) levies a property tax on behalf of the special service district under Section
307 17A-2-1322 .
308 (ii) (A) The certified tax rate of each county to which this Subsection (2)(h) applies
309 shall be decreased by the amount necessary to reduce county revenues by the same amount of

310 revenues that will be generated by the property tax imposed on behalf of the special service
311 district.
312 (B) Each decrease under Subsection (2)(h)(ii)(A) shall occur contemporaneously with
313 the levy on behalf of the special service district under Section 17A-2-1322 .
314 (i) (i) As used in this Subsection (2)(i):
315 (A) "Annexing county" means a county whose unincorporated area is included within a
316 fire district by annexation.
317 (B) "Annexing municipality" means a municipality whose area is included within a fire
318 district by annexation.
319 (C) "Equalized fire protection tax rate" means the tax rate that results from:
320 (I) calculating, for each participating county and each participating municipality, the
321 property tax revenue necessary to cover all of the costs associated with providing fire
322 protection, paramedic, and emergency services:
323 (Aa) for a participating county, in the unincorporated area of the county; and
324 (Bb) for a participating municipality, in the municipality; and
325 (II) adding all the amounts calculated under Subsection (2)(i)(i)(C)(I) for all
326 participating counties and all participating municipalities and then dividing that sum by the
327 aggregate taxable value of the property, as adjusted in accordance with Section 59-2-913 :
328 (Aa) for participating counties, in the unincorporated area of all participating counties;
329 and
330 (Bb) for participating municipalities, in all the participating municipalities.
331 (D) "Fire district" means a service area under Title 17B, Chapter 2a, Part 9, Service
332 Area Act, in the creation of which an election was not required under Subsection
333 17B-1-214 (3)(c).
334 [(E) "Fire protection tax rate" means:]
335 [(I) for an annexing county, the property tax rate that, when applied to taxable property
336 in the unincorporated area of the county, generates enough property tax revenue to cover all the
337 costs associated with providing fire protection, paramedic, and emergency services in the

338 unincorporated area of the county; and]
339 [(II) for an annexing municipality, the property tax rate that generates enough property
340 tax revenue in the municipality to cover all the costs associated with providing fire protection,
341 paramedic, and emergency services in the municipality.]
342 [(F)] (E) "Participating county" means a county whose unincorporated area is included
343 within a fire district at the time of the creation of the fire district.
344 [(G)] (F) "Participating municipality" means a municipality whose area is included
345 within a fire district at the time of the creation of the fire district.
346 (ii) In the first year following creation of a fire district, the certified tax rate of each
347 participating county and each participating municipality shall be decreased by the amount of the
348 equalized fire protection tax rate.
349 (iii) In the first budget year following annexation to a fire district, the certified tax rate
350 of each annexing county and each annexing municipality shall be decreased by [the fire
351 protection tax rate.] an amount equal to the amount of revenue budgeted by the annexing
352 county or annexing municipality:
353 (A) for fire protection, paramedic, and emergency services; and
354 (B) in:
355 (I) for a taxing entity operating under a January 1 through December 31 fiscal year, the
356 prior calendar year; or
357 (II) for a taxing entity operating under a July 1 through June 30 fiscal year, the prior
358 fiscal year.
359 (iv) Each tax levied under this section by a fire district shall be considered to be levied
360 by:
361 (A) each participating county and each annexing county for purposes of the county's tax
362 limitation under Section 59-2-908 ; and
363 (B) each participating municipality and each annexing municipality for purposes of the
364 municipality's tax limitation under Section 10-5-112 , for a town, or Section 10-6-133 , for a city.
365 (v) The calculation of a fire district's certified tax rate for the year of annexation shall be

366 adjusted to include an amount of revenue equal to the amount of revenue budgeted by the