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S.B. 26

1    

SALES TAX OPTION FOR COUNTIES

2    
1997 GENERAL SESSION

3    
STATE OF UTAH

4    
Sponsor: L. Alma Mansell

5    AN ACT RELATING TO REVENUE AND TAXATION; AUTHORIZING A COUNTY
6    OPTION SALES AND USE TAX; REQUIRING THE COUNTY TO HOLD PUBLIC
7    HEARINGS AND PUBLISH ADVERTISEMENTS BEFORE LEVYING THE TAX;
8    PROVIDING FOR A MODIFIED REFERENDUM PROCEDURE; PROVIDING
9    PROCEDURES FOR DISTRIBUTING REVENUES GENERATED BY THE TAX;
10    PROVIDING PROCEDURES FOR ADMINISTERING THE TAX; PROVIDING A
11    STATEWIDE PURPOSE; MODIFYING THE PROPERTY TAX CERTIFIED RATE
12    PROVISIONS; h PROVIDING FOR ADJUSTMENT TO THE TAXABLE VALUE FOR THE BASE YEAR
12a     FOR A REDEVELOPMENT AGENCY AFFECTED BY A CHANGE IN THE CERTIFIED TAX RATE; h
12b    MAKING TECHNICAL CORRECTIONS; AND PROVIDING AN
13    EFFECTIVE DATE.
14    This act affects sections of Utah Code Annotated 1953 as follows:
15    AMENDS:
16         59-2-924, as last amended by Chapters 286, 321 and 326, Laws of Utah 1996
17    ENACTS:
18         59-12-901, Utah Code Annotated 1953
19         59-12-902, Utah Code Annotated 1953
20    Be it enacted by the Legislature of the state of Utah:
21        Section 1. Section 59-2-924 is amended to read:
22         59-2-924. Report of valuation of property to county auditor and tax commission --
23     Transmittal by auditor to governing bodies -- Certified tax rate -- Adoption of tentative
24     budget.
25        (1) (a) Before June 1 of each year, the county assessor of each county shall deliver to the
26    county auditor and the commission a statement showing the aggregate valuation of all taxable
27    property in each taxing entity, together with a statement showing the taxable value of any
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1    additional personal property estimated by the county assessor to be subject to taxation in the
2    current tax year.
3        (b) The county auditor shall, on or before June 8, transmit this statement, together with an
4    estimate of the revenue from personal property, the certified tax rate, and all forms necessary to
5    submit a tax levy request, to the governing body of each taxing entity.
6        (2) (a) The "certified tax rate" means a tax rate that will provide the same ad valorem
7    property tax revenue for each taxing entity as was collected for the prior year by that taxing entity
8    excluding collections from redemptions, interest, and penalties. The certified tax rate shall be
9    calculated by dividing property tax revenues collected for the prior year by that taxing entity
10    excluding collections from redemptions, interest, and penalties by the taxable value established
11    in accordance with Section 59-2-913 except for the following:
12        (i) except as provided in Subsection (2)(a)(ii), for new taxing entities the certified tax rate
13    is zero;
14        (ii) for each municipality incorporated on or after July 1, 1996, the certified tax rate is:
15        (A) in a county of the first, second, or third class, the levy imposed for municipal-type
16    services under Sections 17-34-1 and 17-36-9; and
17        (B) in a county of the fourth, fifth, or sixth class, the levy imposed for general county
18    purposes and such other levies imposed solely for the municipal-type services identified in Section
19    17-34-2 and Subsection17-36-3[(24)](22);
20        (iii) for debt service voted on by the public, the certified tax rate shall be the actual levy
21    imposed by that section; however,
22        (iv) the exceptions for the levies granted in Subsection (2)(a)(iii) do not include:
23        (A) school leeways provided for under Sections 11-2-7, 53A-16-110, 53A-17a-125,
24    53A-17a-127, 53A-17a-134, 53A-17a-143, 53A-17a-145, and 53A-21-103; and
25        (B) levies to pay for the costs of state legislative mandates or judicial or administrative
26    orders under Section 59-2-906.3; and
27        (v) the certified tax rates for the levies listed in Subsection (2)(a)(iv) shall each be
28    calculated in accordance with Section 59-2-913.
29        (b) For the purpose of calculating the certified tax rate, the county auditor shall use the
30    taxable value of property on the assessment roll, exclusive of new growth. New growth is the
31    increase in taxable value of the taxing entity from the previous calendar year to the current year

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1    less the amount of increase to locally assessed real property taxable values resulting from
2    factoring, reappraisal, or any other adjustments.
3        (c) (i) Beginning January 1, 1996, and ending December 31, 1996, if a taxing entity
4    receives increased revenues from uniform fees on tangible personal property under Section
5    59-2-404 or 59-2-405 as a result of the decrease in the minimum basic tax rate under Section
6    53A-17a-135 by the Legislature during the 1996 Annual General Session, the taxing entity shall
7    decrease its certified tax rate to offset the increased revenues.
8        (ii) Beginning January 1, 1997, if a taxing entity receives increased revenues from uniform
9    fees on tangible personal property under Section 59-2-404 or 59-2-405 as a result of any county
10    imposing a sales and use tax under Title 59, Chapter 12, Part 9, County Option Sales and Use Tax,
11    the taxing entity shall decrease its certified tax rate to offset the increased revenues.
12        (d) (i) Beginning July 1, 1997, if a county has imposed a sales and use tax under Title 59,
13    Chapter 12, Part 9, County Option Sales and Use Tax, the county's certified tax rate shall be:
14        (A) decreased on a one-time basis by the amount of the estimated sales tax revenue to be
15    distributed to the county under Subsection 59-12-902(3); and
16        (B) increased by the amount necessary to offset the county's reduction in revenue from
17    uniform fees on tangible personal property under Section 59-2-404 or 59-2-405 as a result of the
18    decrease in the certified tax rate under Subsection (2)(d)(i)(A).
19        (ii) The commission shall determine estimates of sales tax distributions for purposes of
20    Subsection (2)(d)(i).
21        (3) (a) No later than June 22, each taxing entity shall adopt a tentative budget. If the
22    taxing entity intends to exceed the certified tax rate, it shall notify the county auditor of:
23        (i) its intent to exceed the rate; and
24        (ii) the amount by which it proposes to exceed the rate.
25        (b) The county auditor shall notify all property owners of any intent to exceed the certified
26    tax rate in accordance with Subsection 59-2-919(2).
27        (4) (a) Except as provided in Subsection (4)(d), for taxable years beginning January 1,
28    1995, and ending December 31, 1996, for taxing entities operating on a calendar year basis, and
29    for fiscal years 1995-96 and 1996-97 for taxing entities operating on a fiscal year basis, a taxing
30    entity may not impose a tax rate that exceeds the certified tax rate established in Subsection (2)
31    unless the tax increase is authorized by a majority vote of the governing body and approved by a

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1    vote of the people as provided in Subsection (4)(b).
2        (b) To obtain voter approval for a tax increase under Subsection (4)(a), the taxing entity
3    shall:
4        (i) hold the election on the fourth Tuesday in June; and
5        (ii) conduct the election according to the procedures and requirements of Title 20A
6    governing local elections.
7        (c) A taxing entity that imposes a tax rate under Subsections (4)(a) and (b) that exceeds
8    the certified rate established in Subsection (2) may not impose a tax rate in excess of the maximum
9    levy permitted by law.
10        (d) A school district that increases its tax rate under Section 53A-17a-145 for debt service,
11    the construction or remodeling of school buildings, or the purchase of school sites, buses,
12    equipment, textbooks, and supplies is not subject to the requirements of Subsections (4)(a) and (b).
12a     h [S (5)(a) IF A DECREASE IN THE CERTIFIED TAX RATE UNDER SUBSECTION (2)(c)(ii) OR
12b     (2)(d)(i) RESULTS IN A REDUCTION IN THE AMOUNT TO BE PAID UNDER SECTION 17A-2-1247 OR
12c     17A-2-1247.5 TO A REDEVELOPMENT AGENCY ESTABLISHED UNDER TITLE 17A, CHAPTER 2, PART
12d     12, THE TAXABLE VALUE FOR THE BASE YEAR UNDER SUBSECTION 17A-2-1247(2)(a) OR
12e     17A-2-1202(2), AS THE CASE MAY BE, SHALL BE REDUCED TO THE EXTENT NECESSARY TO PROVIDE
12f     THE AGENCY WITH APPROXIMATELY THE SAME AMOUNT OF MONEY THE AGENCY WOULD HAVE
12g     RECEIVED WITHOUT A REDUCTION IN THE CERTIFIED TAX RATE.
12h        (b) NOTWITHSTANDING A DECREASE IN THE CERTIFIED TAX RATE UNDER SUBSECTION
12i     (2)(c)(ii) OR (2)(d)(i), THE AMOUNT OF MONEY ALLOCATED AND, WHEN COLLECTED,PAID EACH
12j     YEAR TO A REDEVELOPMENT AGENCY ESTABLISHED UNDER TITLE 17A, CHAPTER 2,PART 12,
12k     FOR THE PAYMENT OF BONDS OR OTHER CONTRACT INDEBTEDNESS, BUT NOT FOR
12l     ADMINISTRATIVE COSTS, MAY NOT BE LESS THAN THAT AMOUNT WOULD HAVE BEEN
12m     WITHOUT A DECREASE IN THE CERTIFIED TAX RATE. s
]

12n         (5)(a) THE TAXABLE VALUE FOR THE BASE YEAR UNDER SUBSECTION 17A-2-1247(2)(a) OR
12o     17A-2-1202(2), AS THE CASE MAY BE, SHALL BE REDUCED FOR ANY YEAR TO THE EXTENT
12p     NECESSARY TO PROVIDE A REDEVELOPMENT AGENCY ESTABLISHED UNDER TITLE 17A, CHAPTER
12q     2, PART 12, NEIGHBORHOOD REDEVELOPMENT AGENCIES, WITH APPROXIMATELY THE SAME
12r     AMOUNT OF MONEY THE AGENCY WOULD HAVE RECEIVED WITHOUT A REDUCTION IN THE h
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12s     h COUNTY'S CERTIFIED TAX RATE IF:
12t         (i) IN THAT YEAR THERE IS A DECREASE IN THE CERTIFIED TAX RATE UNDER
12u     SUBSECTION (2)(c)(ii) OR (2)(d)(i);
12v         (ii) THE AMOUNT OF THE DECREASE IS MORE THAN 20% OF THE COUNTY'S CERTIFIED TAX
12w     RATE OF THE PREVIOUS YEAR; AND
12x         (iii) THE DECREASE RESULTS IN A REDUCTION OF THE AMOUNT TO BE PAID TO THE
12y     AGENCY UNDER SECTION 17A-2-1247 OR 17A-2-1247.5.
12z         (b) THE TAXABLE VALUE OF THE BASE YEAR UNDER SUBSECTION 17A-2-1247(2)(a) OR
12aa     17A-2-1202(2), AS THE CASE MAY BE, SHALL BE INCREASED IN ANY YEAR TO THE EXTENT
12ab     NECESSARY TO PROVIDE A REDEVELOPMENT AGENCY WITH APPROXIMATELY THE SAME AMOUNT
12ac     OF MONEY AS THE AGENCY WOULD HAVE RECEIVED WITHOUT AN INCREASE IN THE CERTIFIED TAX
12ad     RATE THAT YEAR IF:
12ae         (i) IN THAT YEAR THE TAXABLE VALUE FOR THE BASE YEAR UNDER SUBSECTION
12af     17A-2-1247(2) OR 17A-2-1202(2) IS REDUCED DUE TO A DECREASE IN THE CERTIFIED TAX RATE
12ag     UNDER SUBSECTION (2)(c)(ii) OR (2)(d)(i); AND
12ah         (ii) THE CERTIFIED TAX RATE OF A CITY, SCHOOL DISTRICT, OR SPECIAL DISTRICT
12ai     INCREASES INDEPENDENT OF THE ADJUSTMENT TO THE TAXABLE VALUE OF THE BASE YEAR.
12aj         (c) NOTWITHSTANDING A DECREASE IN THE CERTIFIED TAX RATE UNDER SUBSECTION
12ak     (2)(c)(ii) OR (2)(d)(i), THE AMOUNT OF MONEY ALLOCATED AND, WHEN COLLECTED, PAID EACH
12al     YEAR TO A REDEVELOPMENT AGENCY ESTABLISHED UNDER TITLE 17A, CHAPTER 2, PART 12,
12am     NEIGHBORHOOD REDEVELOPMENT AGENCIES, FOR THE PAYMENT OF BONDS OR OTHER
12an     CONTRACT INDEBTEDNESS, BUT NOT FOR ADMINISTRATIVE COSTS, MAY NOT BE LESS THAN THAT
12ao     AMOUNT WOULD HAVE BEEN WITHOUT A DECREASE IN THE CERTIFIED TAX RATE UNDER
12ap     SUBSECTION (2)(c)(ii) OR (2)(d)(i). h
13        Section 2. Section 59-12-901 is enacted to read:
14    
Part 9. County Option Sales and Use Tax

15         59-12-901. Statewide purpose.
16        The Legislature finds that a statewide purpose is served by this part in that it enables

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Amend on 3_goldenrod February 4, 1997

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17    counties to carry out more effectively the counties' statutorily defined roles as political and legal
18    subdivisions of the state by improving the counties' revenue raising capacities.
19        Section 3. Section 59-12-902 is enacted to read:
20         59-12-902. Base -- Rate -- Imposition of tax -- Distribution of revenue --
21     Administration.
22        (1) (a) Subject to the provisions of Subsections (2) through (4), and in addition to any
23    other tax authorized by this chapter, a county may impose by ordinance a county option sales and
24    use tax of 1/4% upon the sales and uses described in Subsection 59-12-103(1), subject to the
25    exemptions provided for in Section 59-12-104.
26        (b) The county option sales and use tax under this section shall be imposed:
27        (i) upon sales and uses made in the county, including sales and uses made within
28    municipalities in the county; and
29        (ii) h EXCEPT AS PROVIDED IN SUBSECTION (1)(c), h beginning on the first day of
29a    January:
30        (A) of the next calendar year after adoption of the ordinance imposing the tax if the
31    ordinance is adopted on or before h [August 1 ] MAY 25 h ; or













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Amend on 3_goldenrod February 4, 1997
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Amend on 2_goldenrod February 3, 1997
1        (B) of the second calendar year after adoption of the ordinance imposing the tax if the
2    ordinance is adopted after h [August 1 ] MAY 25 h .
2a          h (C) NOTWITHSTANDING SUBSECTION (1)(b)(ii), THE COUNTY OPTION SALES AND USE TAX
2b     UNDER THIS SECTION SHALL BE IMPOSED:
2c         (i) BEGINNING JANUARY 1, 1998, IF AN ORDINANCE ADOPTING THE TAX IS IMPOSED ON OR
2d     BEFORE SEPTEMBER 4, 1997; OR
2e         (ii) BEGINNING JANUARY 1, 1999, IF AN ORDINANCE ADOPTING THE TAX IS IMPOSED DURING
2f     1997 BUT AFTER SEPTEMBER 4, 1997. h
3        (2) (a) Before imposing a county option sales and use tax under Subsection (1), a county
4    shall:
5        (i) hold two public hearings on separate days in geographically diverse locations in the
6    county; and
7        (ii) notify the commission at least 30 days prior to the adoption of the ordinance.
8        (b) (i) At least one of the hearings required by Subsection (2)(a)(i) shall have a starting
9    time of no earlier than 6:00 p.m.
10        (ii) The earlier of the hearings required by Subsection (2)(a)(i) shall be no less than seven
11    days after the day the first advertisement required by Subsection (2)(c) is published.
12        (c) (i) Before holding the public hearings required by Subsection (2)(a)(i), the county shall
13    advertise in a newspaper of general circulation in the county:
14        (A) its intent to adopt a county option sales and use tax;
15        (B) the date, time, and location of each public hearing; and
16        (C) a statement that the purpose of each public hearing is to obtain public comments
17    regarding the proposed tax.
18        (ii) The advertisement shall be published once each week for the two weeks preceding the
19    earlier of the two public hearings.
20        (iii) The advertisement shall be no less than 1/8 page in size, and the type used shall be
21    no smaller than 18 point and surrounded by a 1/4-inch border.
22        (iv) The advertisement may not be placed in that portion of the newspaper where legal
23    notices and classified advertisements appear.
24        (v) Whenever possible:
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25        (A) the advertisement shall appear in a newspaper that is published at least five days a
26    week, unless the only newspaper in the county is published less than five days a week; and
27        (B) the newspaper selected shall be one of general interest and readership in the
28    community, and not one of limited subject matter.
29        (d) The adoption of an ordinance imposing a county option sales and use tax is subject to
30    a local referendum election as provided in Title 20A, Chapter 7, Part 6, Local Referenda -
31    Procedures S [, except that the percentages set forth in Subsection 20A-7-601(1) shall, for
31a     purposes] h , EXCEPT THAT :
31b         (i) NOTWITHSTANDING SUBSECTION 20A-7-609(2)(a), THE COUNTY CLERK SHALL HOLD A
31c     REFERENDUM ELECTION THAT QUALIFIES FOR THE BALLOT ON THE EARLIER OF THE NEXT
31d     REGULAR GENERAL ELECTION DATE OR THE NEXT MUNICIPAL GENERAL ELECTION DATE MORE
31e     THAN 155 DAYS AFTER ADOPTION OF AN ORDINANCE UNDER THIS SECTION;
31f         (ii) FOR 1997 ONLY, THE 120-day PERIOD IN SUBSECTION 20A-7-606(1) SHALL BE 30 DAYS;
31g     AND
31h         (iii) THE DEADLINES IN SUBSECTIONS 20A-7-606(2) AND (3) DO NOT APPLY,
31i     AND THE CLERK SHALL TAKE THE ACTIONS REQUIRED BY THOSE SUBSECTIONS BEFORE THE
31j     REFERENDUM ELECTION h . s














    
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Text Box

Amend on 2_goldenrod February 3, 1997
1     S [of this Subsection (d), each be 20%.] s
2        (3) (a) If the aggregate population of the counties imposing a county option sales and use
3    tax under Subsection (1) is less than 75% of the state population, the tax levied under Subsection
4    (1) shall be distributed to the county in which the tax was collected.
5        (b) If the aggregate population of the counties imposing a county option sales and use tax
6    under Subsection (1) is greater than or equal to 75% of the state population:
7        (i) 50% of the tax collected under Subsection (1) in each county shall be distributed to the
8    county in which the tax was collected; and
9        (ii) except as provided in Subsection (3)(c), 50% of the tax collected under Subsection (1)
10    in each county shall be distributed proportionately among all counties imposing the tax, based on
11    the total population of each county.
12        (c) If the amount to be distributed annually to a county under Subsection (3)(b)(ii), when
13    combined with the amount distributed to the county under Subsection (3)(b)(i), does not equal at
14    least $75,000, then:
15        (i) the amount to be distributed annually to that county under Subsection (3)(b)(ii) shall
16    be increased so that, when combined with the amount distributed to the county under Subsection
17    (3)(b)(i), the amount distributed annually to the county is $75,000; and
18        (ii) the amount to be distributed annually to all other counties under Subsection (3)(b)(ii)
19    shall be reduced proportionately to offset the additional amount distributed under Subsection
20    (3)(c)(i).
21        (d) The commission shall establish rules to implement the distribution of the tax under
22    Subsections (3)(a), (b), and (c).
23        (4) (a) Except as provided in Subsections (4)(b) and (c), a county option sales and use tax
24    under Subsection (1) shall be imposed and administered in the same manner as a tax imposed
25    under Title 59, Chapter 12, Part 2, The Local Sales and Use Tax Act.
26        (b) A county option sales and use tax imposed under this part is not subject to:
27        (i) the distribution provisions of Subsections 59-12-205(2) and(3); and
28        (ii) the earmarking provisions of Subsection 59-12-205(4).
29        (c) The fee charged by the commission under Section 59-12-206 shall be based on the
30    distribution amounts resulting after all the applicable distribution calculations under Subsection
31    (3) have been made.

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1        Section 4. Effective date.
2         h [This act takes effect on July 1, 1997. ] IF APPROVED BY TWO-THIRDS OF ALL THE
2a     MEMBERS ELECTED TO EACH HOUSE, THIS ACT TAKES EFFECT UPON APPROVAL BY THE
2b     GOVERNOR, OR THE DAY FOLLOWING THE CONSTITUTIONAL TIME LIMIT OF UTAH CONSTITUTION
2c     ARTICLE VII, SECTION 8, WITHOUT THE GOVERNOR'S SIGNATURE, OR IN THE CASE OF A VETO, THE
2d     DATE OF VETO OVERRIDE. h




Legislative Review Note
    as of 1-10-97 11:31 AM


A limited legal review of this bill raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel























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lilac-February 20, 1997


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