Utah Constitutional Revision Commission

was the only difference from last year's draft.

     Mr. Sullivan asked if the reference to sections of the Enabling Act are sufficiently specific to discriminate between trust lands and nontrust public lands.

    Mr. Bates indicated he believed the language was sufficient.

    Chair McKeachnie commented that "public lands" has a special meaning in natural resource law. There are many federal lands that are not public lands, he said.

     Mr. Jensen asked for clarification that the language being added is not intended to change anything.

    Mr. Bates indicated the proposed language is only intended to clarify that trust lands are not public lands or state lands and it is not intended to create a substantive change in the current law.

     Ms. Wood asked if consideration has been given regarding the potential argument and the impending cases that the language may impact.

    Mr. Bates indicated the decisions in the courts have uniformly upheld the trust status.

     Mr. Linton discussed Section 2 of the resolution. He said he would not want the language to exclude lands that are purchased.

    Ms. Baskin explained that the language clearly indicates that any lands added must be added pursuant to the Enabling Act for the trust purpose.

    Chair McKeachnie discussed exchange of trust lands. He said that trust lands within an Indian Reservation or national park, for example, would be exchanged with the federal government for lands outside of the reservation or park and those lands would then have the status of lands added under those sections.

    Mr. Bates also pointed out that there have been instances where sections have been sold and the money used to purchase another section.

    Mr. Sullivan observed that this proposal has not received the same level of review that is normally given to issues the commission studies.

     H.J.R. 18, "Resolution Governing Public Education - Ms. Watts Baskin explained that the sponsor's intent is to make the state superintendent an elected position rather than an appointed

position. The sponsor, Rep. Glenn Way, also intends to ensure that local education is controlled at the local level.

    Mr. Bates stated that Utah has gone through many government models on public education. Nationally it appears that the appointed superintendent, by the board, appears to be the most harmonious, he stated. He indicated that the proposed language appears to be rather vague.

    Ms. Wood pointed out that this resolution would be inconsistent with any effort to revise the local government article.

     MOTION: Rep. Bradshaw moved that the commission decline to support H.J.R. 18. The motion passed unanimously.

     MOTION: Sen. Hillyard moved to write a letter to Rep. Way inviting him to discuss the resolution with the commission during the interim. The motion passed unanimously.

     H.J.R. 1, "Resolution Allowing Property Tax Deferment for the Elderly" - Rep. LaMont Tyler explained that the resolution provides that taxes for the elderly can be deferred as provided by law. He noted a concern regarding elderly people who do not qualify under the circuit breaker act but still have difficulty meeting their property tax obligations. Rep. Tyler stated his intent is to help people who are asset rich but cash poor. This proposed approach does not transfer the tax to someone else, he said, but it provides an opportunity for the Legislature to review the problem and, if they so decide, to defer taxes for the elderly based solely on age.

     Dr. White asked for a definition of elderly, and questioned whether the resolution includes an age at retirement provision. Some type of means test has to be done, she said.

    Rep. Tyler remarked that the new language states that the taxes of the elderly may be deferred at such times and in such manner as provided by statute. He felt the definition of elderly would be provided by statute, not the constitution. He envisioned that the taxes would be paid when the individual's house is sold and the title is transferred. The Legislature would determine how that would be handled and what interest rate might be appropriate.

     Mr. Asplund pointed out that the only tax that is governed by the constitution is the property tax. The resolution would only make reference to property taxes.

    Ms. Wood asked if this issue was considered in conjunction with the baby boomers' emerging as the majority of the population. If the majority of the population is given the opportunity to defer taxes, others will have to pay on an ongoing basis to make up the difference. She asked Rep. Tyler if he had also considered the possibility of there not being sufficient funds to pay the

tax at the time the property is sold. If the elderly had a reverse mortgage, for example, the property may not have any equity at the time the taxes are due, he said.

    Rep. Tyler indicated the county sets the certified tax rate. In calculating that rate, the county makes an estimate of what noncollectibles will be. Initially, he said, there may be a small increase because of deferments. After a few years, redemptions will closely track the deferred taxes. Rep. Tyler pointed out that there has never been an owner occupied residence that has been sold for taxes in Salt Lake County.

    Mr. Asplund noted that there is a deferral program available to the elderly whose income is below the cap specified in law. There are two other programs available for the elderly. The abatement program is a county program where part of the tax is forgiven and never has to be paid if the person meets certain criteria. The circuit breaker is a statewide program where the state provides money to the counties to make up for tax forgiveness.

    Rep. Tyler explained that the counties have some concerns about the resolution. However, those concerns are mostly administrative in nature, he said.

    Ms. Baskin stated the Utah Association of Counties, Salt Lake County Treasurer, and Salt Lake County Assessor were reported as opposing H.J.R. 1 due to administrative workload concerns. The Utah Taxpayers Association supported H.J.R. 1 and opposed H.J.R. 11 because of the abatement and remittance language.

    Rep. Tyler indicated that if H.J.R. 11 were to pass, there would be no need for H.J.R. 1.

     H.J.R. 3, "Resolution Restricting Property Tax Valuation on Primary Residences of the Elderly" - Ms. Baskin explained that the resolution allows for the property tax valuation of an elderly person's primary residence to be valued at the time of the elderly person's retirement as provided by statute. The valuation is then frozen while that person resides in the house. The resolution has not yet gone to committee.

     Mr. Jones said the concept of retirement is very troublesome. He would be hesitant to support the resolution without some sense of what the Legislature might do with that issue, he said.

    Ms. Baskin noted that the age one receives social security benefits rather than retirement had been discussed as the time one would qualify for the tax exemption.

    Mr. Asplund indicated that many military people who retire are not in the social security system.

     H.J.R. 11, "Resolution Amending Property Tax Exemptions" - Ms. Baskin said the resolution closely resembles H.J.R. 1, except it allows for more alternatives, such as deferral, abatement, and remittance.

     H.J.R. 2, "Resolution Requiring Supermajority Vote to Increase Taxes, Fees, or Other Sources of Revenues" - Ms. Baskin noted this resolution was tabled in committee. The resolution states that any amendment to statute proposed in either house that requires the taxpayer to pay increased taxes or fees, or requires other increased sources of revenue to the state, shall require a favorable vote of 3/5 of all members of the Legislature. The meaning of taxes, fees, and other sources of revenue would be provided by statute. She said the resolution was tabled because there were so many questions about how it would be provided in statute.

     MOTION: Sen. Hillyard moved that Rep. Way also be requested to discuss H.J.R. 2 with the commission during the interim. The motion passed unanimously.

     H.B. 374, "Marital Property Rights Amendments" - Rep. Bradshaw indicated that language the commission is proposing to repeal in H.J.R. 8, "Resolution Repealing Provision on Property Rights of Married Women" is also found in statute. H.B. 374 proposes to repeal the language in the statute, she said.

    Ms. Baskin explained that the legislation repeals the statutory language that is identical to the constitutional language. The bill will only take effect if the amendment to the constitution is passed. Ms. Baskin discussed a news article from The Salt Lake Tribune which contained some misconceptions concerning H.J.R. 8.

     H.C.R. 7, "Resolution Calling for State's Amendments to Federal Constitution" - Ms. Baskin said the legislation would amend the U.S. Constitution so that if 3/4 of the states decide they want to amend the U.S. Constitution, it can be done.

     S.B. 127, "Constitutional Revision Commission Amendments" - Ms. Baskin said this bill has passed the Senate. An amendment was made to clarify that the ex officio member does not have a limit to 12 years of service.

     MOTION: Sen. Hillyard moved to take no position on H.J.R. 14 at this time. The issue would be put on the study list for 1997. The motion passed unanimously.

     MOTION: Sen. Hillyard moved to take no position on H.J.R. 1, H.J.R. 3, and H.J.R. 11 at this time. These issues should be studied during the interim, he said. The motion passed unanimously.

    Chair McKeachnie requested staff to draft a letter to the bill sponsors explaining the commission's action.

     MOTION: Mr. Sullivan moved to favorably recommend H.B. 374 to the Legislature. The motion passed unanimously.

     MOTION: Sen. Hillyard moved to take no action on H.C.R. 7. The motion passed unanimously.

     H.J.R. 10, "Resolution Amending Property Tax Valuation" - Ms. Baskin explained this resolution proposes that the valuation of property will be ascertained on square footage of liveable or useable space or acreage if on unimproved real property.

    Chair McKeachnie cautioned that the commission tread carefully before recommending how the appraisal community is to determine value.

     MOTION: Sen. Hillyard moved that the commission decline to support H.J.R. 10. The motion passed unanimously.

    Ms. Baskin reviewed the biography of Rep. David Jones which was mailed to members prior to the meeting. Rep. Jones will be replacing Rep. Pignanelli on the commission.

    Chair McKeachnie expressed his appreciation to the members for their efforts and involvement in the commission's activities.

     MOTION: Mr. Sullivan moved to approve the minutes of November 21, 1996. The motion passed unanimously.

    The next meeting of the commission was scheduled for April 11, 1997.

    The meeting was adjourned at 1:45 p.m.