Second Substitute H.B. 23

Senator Curtis S. Bramble proposes the following substitute bill:

1 CERTIFIED TAX RATE AMENDMENTS
2 2009 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Fred R Hunsaker
5 Senate Sponsor: Wayne L. Niederhauser
6
7 LONG TITLE
8 General Description:
9 This bill amends provisions in the Property Tax Act relating to the calculation of a
10 taxing entity's certified tax rate.
11 Highlighted Provisions:
12 This bill:
13 . includes the revenue a taxing entity collects from redemptions as "ad valorem
14 property tax revenues" for purposes of calculating the taxing entity's certified tax
15 rate;
16 . requires a taxing entity's ad valorem property tax revenues budgeted for the prior
17 year to be decreased by the average annual amount of revenue collected from
18 redemptions during the prior five year period for purposes of calculating a taxing
19 entity's certified tax rate;
20 . exempts a taxing entity from the notice and hearing requirements of "Truth in
21 Taxation" for a certain amount of budgeted revenue equal to the taxing entity's five
22 year average of redemptions from collections;
23 . defines terms; and
24 . makes technical changes.
25 Monies Appropriated in this Bill:

26 None
27 Other Special Clauses:
28 This bill takes effect on January 1, 2010.
29 Utah Code Sections Affected:
30 AMENDS:
31 59-2-924, as last amended by Laws of Utah 2008, Chapters 61, 118, 231, 236, 330, 360,
32 and 382
33
34 Be it enacted by the Legislature of the state of Utah:
35 Section 1. Section 59-2-924 is amended to read:
36 59-2-924. Report of valuation of property to county auditor and commission --
37 Transmittal by auditor to governing bodies -- Certified tax rate -- Calculation of certified
38 tax rate -- Rulemaking authority -- Adoption of tentative budget.
39 (1) Before June 1 of each year, the county assessor of each county shall deliver to the
40 county auditor and the commission the following statements:
41 (a) a statement containing the aggregate valuation of all taxable real property assessed
42 by a county assessor in accordance with Part 3, County Assessment, for each taxing entity; and
43 (b) a statement containing the taxable value of all personal property assessed by a
44 county assessor in accordance with Part 3, County Assessment, from the prior year end values.
45 (2) The county auditor shall, on or before June 8, transmit to the governing body of
46 each taxing entity:
47 (a) the statements described in Subsections (1)(a) and (b);
48 (b) an estimate of the revenue from personal property;
49 (c) the certified tax rate; and
50 (d) all forms necessary to submit a tax levy request.
51 (3) (a) The "certified tax rate" means a tax rate that will provide the same ad valorem
52 property tax revenues for a taxing entity as were budgeted by that taxing entity for the prior
53 year.
54 (b) For purposes of this Subsection (3):
55 (i) "Ad valorem property tax revenues" do not include:
56 [(A) collections from redemptions;]

57 [(B)] (A) interest;
58 [(C)] (B) penalties; and
59 [(D)] (C) revenue received by a taxing entity from personal property that is:
60 (I) assessed by a county assessor in accordance with Part 3, County Assessment; and
61 (II) semiconductor manufacturing equipment.
62 (ii) "Aggregate taxable value of all property taxed" means:
63 (A) the aggregate taxable value of all real property assessed by a county assessor in
64 accordance with Part 3, County Assessment, for the current year;
65 (B) the aggregate taxable year end value of all personal property assessed by a county
66 assessor in accordance with Part 3, County Assessment, for the prior year; and
67 (C) the aggregate taxable value of all real and personal property assessed by the
68 commission in accordance with Part 2, Assessment of Property, for the current year.
69 (c) (i) Except as otherwise provided in this section, the certified tax rate shall be
70 calculated by dividing the ad valorem property tax revenues budgeted for the prior year by the
71 taxing entity by the amount calculated under Subsection (3)(c)(ii).
72 (ii) For purposes of Subsection (3)(c)(i), the legislative body of a taxing entity shall
73 calculate an amount as follows:
74 (A) calculate for the taxing entity the difference between:
75 (I) the aggregate taxable value of all property taxed; and
76 (II) any redevelopment adjustments for the current calendar year;
77 (B) after making the calculation required by Subsection (3)(c)(ii)(A), calculate an
78 amount determined by increasing or decreasing the amount calculated under Subsection
79 (3)(c)(ii)(A) by the average of the percentage net change in the value of taxable property for the
80 equalization period for the three calendar years immediately preceding the current calendar
81 year;
82 (C) after making the calculation required by Subsection (3)(c)(ii)(B), calculate the
83 product of:
84 (I) the amount calculated under Subsection (3)(c)(ii)(B); and
85 (II) the percentage of property taxes collected for the five calendar years immediately
86 preceding the current calendar year; and
87 (D) after making the calculation required by Subsection (3)(c)(ii)(C), calculate an

88 amount determined by subtracting from the amount calculated under Subsection (3)(c)(ii)(C)
89 any new growth as defined in this section:
90 (I) within the taxing entity; and
91 (II) for the following calendar year:
92 (Aa) for new growth from real property assessed by a county assessor in accordance
93 with Part 3, County Assessment and all property assessed by the commission in accordance
94 with Section 59-2-201 , the current calendar year; and
95 (Bb) for new growth from personal property assessed by a county assessor in
96 accordance with Part 3, County Assessment, the prior calendar year.
97 (iii) For purposes of Subsection (3)(c)(ii)(A), the aggregate taxable value of all
98 property taxed:
99 (A) except as provided in Subsection (3)(c)(iii)(B) or (3)(c)(ii)(C), is as defined in
100 Subsection (3)(b)(ii);
101 (B) does not include the total taxable value of personal property contained on the tax
102 rolls of the taxing entity that is:
103 (I) assessed by a county assessor in accordance with Part 3, County Assessment; and
104 (II) semiconductor manufacturing equipment; and
105 (C) for personal property assessed by a county assessor in accordance with Part 3,
106 County Assessment, the taxable value of personal property is the year end value of the personal
107 property contained on the prior year's tax rolls of the entity.
108 (iv) For purposes of Subsection (3)(c)(ii)(B), for calendar years beginning on or after
109 January 1, 2007, the value of taxable property does not include the value of personal property
110 that is:
111 (A) within the taxing entity assessed by a county assessor in accordance with Part 3,
112 County Assessment; and
113 (B) semiconductor manufacturing equipment.
114 (v) For purposes of Subsection (3)(c)(ii)(C)(II), for calendar years beginning on or after
115 January 1, 2007, the percentage of property taxes collected does not include property taxes
116 collected from personal property that is:
117 (A) within the taxing entity assessed by a county assessor in accordance with Part 3,
118 County Assessment; and

119 (B) semiconductor manufacturing equipment.
120 (vi) For purposes of Subsection (3)(c)(ii)(B), for calendar years beginning on or after
121 January 1, 2009, the value of taxable property does not include the value of personal property
122 that is within the taxing entity assessed by a county assessor in accordance with Part 3, County
123 Assessment.
124 (vii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
125 the commission may prescribe rules for calculating redevelopment adjustments for a calendar
126 year.
127 (viii) (A) For purposes of Subsection (3)(c)(i), for a calendar year beginning on or after
128 January 1, 2010, a taxing entity's ad valorem property tax revenues budgeted for the prior year
129 shall be decreased by an amount of revenue equal to the five year average of the most recent
130 prior five years of redemptions as reported on the county treasurer's final annual settlement
131 required under Subsection 59-2-1365 (2).
132 (B) For the calendar year beginning on January 1, 2010 and ending on December 31,
133 2010, a taxing entity is exempt from the public notice and hearing requirements of Sections
134 59-2-918 and 59-2-919 if the taxing entity budgets an increased amount of ad valorem property
135 tax revenue equal to or less than the taxing entity's five year average of the most recent prior
136 five years of redemptions as reported on the county treasurer's final annual settlement required
137 under Subsection 59-2-1365 (2).
138 (d) (i) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
139 the commission shall make rules determining the calculation of ad valorem property tax
140 revenues budgeted by a taxing entity.
141 (ii) For purposes of Subsection (3)(d)(i), ad valorem property tax revenues budgeted by
142 a taxing entity shall be calculated in the same manner as budgeted property tax revenues are
143 calculated for purposes of Section 59-2-913 .
144 (e) The certified tax rates for the taxing entities described in this Subsection (3)(e) shall
145 be calculated as follows:
146 (i) except as provided in Subsection (3)(e)(ii), for new taxing entities the certified tax
147 rate is zero;
148 (ii) for each municipality incorporated on or after July 1, 1996, the certified tax rate is:
149 (A) in a county of the first, second, or third class, the levy imposed for municipal-type

150 services under Sections 17-34-1 and 17-36-9 ; and
151 (B) in a county of the fourth, fifth, or sixth class, the levy imposed for general county
152 purposes and such other levies imposed solely for the municipal-type services identified in
153 Section 17-34-1 and Subsection 17-36-3 (22); and
154 (iii) for debt service voted on by the public, the certified tax rate shall be the actual
155 levy imposed by that section, except that the certified tax rates for the following levies shall be
156 calculated in accordance with Section 59-2-913 and this section:
157 (A) school leeways provided for under Sections 11-2-7 , 53A-16-110 , [53A-17a-125 ,]
158 53A-17a-127 , 53A-17a-133 , 53A-17a-134 , 53A-17a-143 , and 53A-17a-145 [, and
159 53A-21-103 ]; and
160 (B) levies to pay for the costs of state legislative mandates or judicial or administrative
161 orders under Section 59-2-1604 .
162 (f) (i) A judgment levy imposed under Section 59-2-1328 or 59-2-1330 shall be
163 established at that rate which is sufficient to generate only the revenue required to satisfy one
164 or more eligible judgments, as defined in Section 59-2-102 .
165 (ii) The ad valorem property tax revenue generated by the judgment levy shall not be
166 considered in establishing the taxing entity's aggregate certified tax rate.
167 (g) The ad valorem property tax revenue generated by the capital outlay levy described
168 in Section 53A-16-107 within a taxing entity in a county of the first class:
169 (i) may not be considered in establishing the school district's aggregate certified tax
170 rate; and
171 (ii) shall be included by the commission in establishing a certified tax rate for that
172 capital outlay levy determined in accordance with the calculation described in Subsection
173 59-2-913 (3).
174 (4) (a) For the purpose of calculating the certified tax rate, the county auditor shall use:
175 (i) the taxable value of real property assessed by a county assessor contained on the
176 assessment roll;
177 (ii) the taxable value of real and personal property assessed by the commission; and
178 (iii) the taxable year end value of personal property assessed by a county assessor
179 contained on the prior year's assessment roll.
180 (b) For purposes of Subsection (4)(a)(i), the taxable value of real property on the

181 assessment roll does not include new growth as defined in Subsection (4)(c).
182 (c) "New growth" means:
183 (i) the difference between the increase in taxable value of the following property of the
184 taxing entity from the previous calendar year to the current year:
185 (A) real property assessed by a county assessor in accordance with Part 3, County
186 Assessment; and
187 (B) property assessed by the commission under Section 59-2-201 ; plus
188 (ii) the difference between the increase in taxable year end value of personal property
189 of the taxing entity from the year prior to the previous calendar year to the previous calendar
190 year; minus
191 (iii) the amount of an increase in taxable value described in Subsection (4)(e).
192 (d) For purposes of Subsection (4)(c)(ii), the taxable value of personal property of the
193 taxing entity does not include the taxable value of personal property that is:
194 (i) contained on the tax rolls of the taxing entity if that property is assessed by a county
195 assessor in accordance with Part 3, County Assessment; and
196 (ii) semiconductor manufacturing equipment.
197 (e) Subsection (4)(c)(iii) applies to the following increases in taxable value:
198 (i) the amount of increase to locally assessed real property taxable values resulting
199 from factoring, reappraisal, or any other adjustments; or
200 (ii) the amount of an increase in the taxable value of property assessed by the
201 commission under Section 59-2-201 resulting from a change in the method of apportioning the
202 taxable value prescribed by:
203 (A) the Legislature;
204 (B) a court;
205 (C) the commission in an administrative rule; or
206 (D) the commission in an administrative order.
207 (f) For purposes of Subsection (4)(a)(ii), the taxable year end value of personal
208 property on the prior year's assessment roll does not include:
209 (i) new growth as defined in Subsection (4)(c); or
210 (ii) the total taxable year end value of personal property contained on the prior year's
211 tax rolls of the taxing entity that is:

212 (A) assessed by a county assessor in accordance with Part 3, County Assessment; and
213 (B) semiconductor manufacturing equipment.
214 (5) (a) On or before June 22, each taxing entity shall annually adopt a tentative budget.
215 (b) If the taxing entity intends to exceed the certified tax rate, it shall notify the county
216 auditor of:
217 (i) its intent to exceed the certified tax rate; and
218 (ii) the amount by which it proposes to exceed the certified tax rate.
219 (c) The county auditor shall notify all property owners of any intent to exceed the
220 certified tax rate in accordance with Subsection 59-2-919 (3).
221 Section 2. Effective date.
222 This bill takes effect on January 1, 2010.