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S.B. 26 Enrolled
AN ACT RELATING TO REVENUE AND TAXATION; AUTHORIZING A COUNTY
OPTION SALES AND USE TAX; REQUIRING THE COUNTY TO HOLD PUBLIC
HEARINGS AND PUBLISH ADVERTISEMENTS BEFORE LEVYING THE TAX;
PROVIDING FOR A MODIFIED REFERENDUM PROCEDURE; PROVIDING
PROCEDURES FOR DISTRIBUTING REVENUES GENERATED BY THE TAX;
PROVIDING PROCEDURES FOR ADMINISTERING THE TAX; PROVIDING A
STATEWIDE PURPOSE; MODIFYING THE PROPERTY TAX CERTIFIED RATE
PROVISIONS; PROVIDING FOR ADJUSTMENTS TO THE TAXABLE VALUE FOR
THE BASE YEAR FOR A REDEVELOPMENT AGENCY AFFECTED BY A CHANGE
IN THE CERTIFIED TAX RATE; MAKING TECHNICAL CORRECTIONS; AND
PROVIDING AN EFFECTIVE DATE.
This act affects sections of Utah Code Annotated 1953 as follows:
AMENDS:
59-2-924, as last amended by Chapters 286, 321 and 326, Laws of Utah 1996
ENACTS:
59-12-901, Utah Code Annotated 1953
59-12-902, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 59-2-924 is amended to read:
59-2-924. Report of valuation of property to county auditor and tax commission --
Transmittal by auditor to governing bodies -- Certified tax rate -- Adoption of tentative
budget -- Adjustments to taxable value for base year for redevelopment agencies.
(1) (a) Before June 1 of each year, the county assessor of each county shall deliver to the
county auditor and the commission a statement showing the aggregate valuation of all taxable
property in each taxing entity, together with a statement showing the taxable value of any
additional personal property estimated by the county assessor to be subject to taxation in the current
tax year.
(b) The county auditor shall, on or before June 8, transmit this statement, together with an
estimate of the revenue from personal property, the certified tax rate, and all forms necessary to
submit a tax levy request, to the governing body of each taxing entity.
(2) (a) The "certified tax rate" means a tax rate that will provide the same ad valorem
property tax revenue for each taxing entity as was collected for the prior year by that taxing entity
excluding collections from redemptions, interest, and penalties. The certified tax rate shall be
calculated by dividing property tax revenues collected for the prior year by that taxing entity
excluding collections from redemptions, interest, and penalties by the taxable value established in
accordance with Section 59-2-913 except for the following:
(i) except as provided in Subsection (2)(a)(ii), for new taxing entities the certified tax rate
is zero;
(ii) for each municipality incorporated on or after July 1, 1996, the certified tax rate is:
(A) in a county of the first, second, or third class, the levy imposed for municipal-type
services under Sections 17-34-1 and 17-36-9; and
(B) in a county of the fourth, fifth, or sixth class, the levy imposed for general county
purposes and such other levies imposed solely for the municipal-type services identified in Section
17-34-2 and Subsection17-36-3[
(iii) for debt service voted on by the public, the certified tax rate shall be the actual levy
imposed by that section; however,
(iv) the exceptions for the levies granted in Subsection (2)(a)(iii) do not include:
(A) school leeways provided for under Sections 11-2-7, 53A-16-110, 53A-17a-125,
53A-17a-127, 53A-17a-134, 53A-17a-143, 53A-17a-145, and 53A-21-103; and
(B) levies to pay for the costs of state legislative mandates or judicial or administrative
orders under Section 59-2-906.3; and
(v) the certified tax rates for the levies listed in Subsection (2)(a)(iv) shall each be calculated
in accordance with Section 59-2-913.
(b) For the purpose of calculating the certified tax rate, the county auditor shall use the
taxable value of property on the assessment roll, exclusive of new growth. New growth is the
increase in taxable value of the taxing entity from the previous calendar year to the current year less
the amount of increase to locally assessed real property taxable values resulting from factoring,
reappraisal, or any other adjustments.
(c) (i) Beginning January 1, 1996, and ending December 31, 1996, if a taxing entity
receives increased revenues from uniform fees on tangible personal property under Section 59-2-404
or 59-2-405 as a result of the decrease in the minimum basic tax rate under Section 53A-17a-135 by
the Legislature during the 1996 Annual General Session, the taxing entity shall decrease its certified
tax rate to offset the increased revenues.
(ii) Beginning January 1, 1997, if a taxing entity receives increased revenues from uniform
fees on tangible personal property under Section 59-2-404 or 59-2-405 as a result of any county
imposing a sales and use tax under Title 59, Chapter 12, Part 9, County Option Sales and Use Tax,
the taxing entity shall decrease its certified tax rate to offset the increased revenues.
(d) (i) Beginning July 1, 1997, if a county has imposed a sales and use tax under Title 59,
Chapter 12, Part 9, County Option Sales and Use Tax, the county's certified tax rate shall be:
(A) decreased on a one-time basis by the amount of the estimated sales tax revenue to be
distributed to the county under Subsection 59-12-902(3); and
(B) increased by the amount necessary to offset the county's reduction in revenue from
uniform fees on tangible personal property under Section 59-2-404 or 59-2-405 as a result of the
decrease in the certified tax rate under Subsection (2)(d)(i)(A).
(ii) The commission shall determine estimates of sales tax distributions for purposes of
Subsection (2)(d)(i).
(3) (a) No later than June 22, each taxing entity shall adopt a tentative budget. If the taxing
entity intends to exceed the certified tax rate, it shall notify the county auditor of:
(i) its intent to exceed the rate; and
(ii) the amount by which it proposes to exceed the rate.
(b) The county auditor shall notify all property owners of any intent to exceed the certified
tax rate in accordance with Subsection 59-2-919(2).
(4) (a) Except as provided in Subsection (4)(d), for taxable years beginning January 1, 1995,
and ending December 31, 1996, for taxing entities operating on a calendar year basis, and for fiscal
years 1995-96 and 1996-97 for taxing entities operating on a fiscal year basis, a taxing entity may
not impose a tax rate that exceeds the certified tax rate established in Subsection (2) unless the tax
increase is authorized by a majority vote of the governing body and approved by a vote of the people
as provided in Subsection (4)(b).
(b) To obtain voter approval for a tax increase under Subsection (4)(a), the taxing entity
shall:
(i) hold the election on the fourth Tuesday in June; and
(ii) conduct the election according to the procedures and requirements of Title 20A, Election
Code, governing local elections.
(c) A taxing entity that imposes a tax rate under Subsections (4)(a) and (b) that exceeds the
certified rate established in Subsection (2) may not impose a tax rate in excess of the maximum levy
permitted by law.
(d) A school district that increases its tax rate under Section 53A-17a-145 for debt service,
the construction or remodeling of school buildings, or the purchase of school sites, buses, equipment,
textbooks, and supplies is not subject to the requirements of Subsections (4)(a) and (b).
(5) (a) The taxable value for the base year under Subsection 17A-2-1247(2)(a) or
17A-2-1202(2), as the case may be, shall be reduced for any year to the extent necessary to provide
a redevelopment agency established under Title 17A, Chapter 2, Part 12, Neighborhood
Redevelopment Agencies, with approximately the same amount of money the agency would have
received without a reduction in the county's certified tax rate if:
(i) in that year there is a decrease in the certified tax rate under Subsection (2)(c)(ii) or
(2)(d)(i);
(ii) the amount of the decrease is more than 20% of the county's certified tax rate of the
previous year; and
(iii) the decrease results in a reduction of the amount to be paid to the agency under Section
17A-2-1247 or 17A-2-1247.5.
(b) The taxable value of the base year under Subsection 17A-2-1247(2)(a) or 17A-2-1202(2),
as the case may be, shall be increased in any year to the extent necessary to provide a redevelopment
agency with approximately the same amount of money as the agency would have received without
an increase in the certified tax rate that year if:
(i) in that year the taxable value for the base year under Subsection 17A-2-1247(2) or
17A-2-1202(2) is reduced due to a decrease in the certified tax rate under Subsection (2)(c)(ii) or
(2)(d)(i); and
(ii) The certified tax rate of a city, school district, or special district increases independent
of the adjustment to the taxable value of the base year.
(c) Notwithstanding a decrease in the certified tax rate under Subsection (2)(c)(ii) or
(2)(d)(i), the amount of money allocated and, when collected, paid each year to a redevelopment
agency established under Title 17A, Chapter 2, Part 12, Neighborhood Redevelopment Agencies,
for the payment of bonds or other contract indebtedness, but not for administrative costs, may not
be less than that amount would have been without a decrease in the certified tax rate under
Subsection (2)(c)(ii) or (2)(d)(i).
Section 2. Section 59-12-901 is enacted to read:
59-12-901. Statewide purpose.
The Legislature finds that a statewide purpose is served by this part in that it enables counties
to carry out more effectively the counties' statutorily defined roles as political and legal subdivisions
of the state by improving the counties' revenue raising capacities.
Section 3. Section 59-12-902 is enacted to read:
59-12-902. Base -- Rate -- Imposition of tax -- Distribution of revenue --
Administration.
(1) (a) Subject to the provisions of Subsections (2) through (4), and in addition to any other
tax authorized by this chapter, a county may impose by ordinance a county option sales and use tax
of 1/4% upon the sales and uses described in Subsection 59-12-103(1), subject to the exemptions
provided for in Section 59-12-104.
(b) The county option sales and use tax under this section shall be imposed:
(i) upon sales and uses made in the county, including sales and uses made within
municipalities in the county; and
(ii) except as provided in Subsection (1)(c), beginning on the first day of January:
(A) of the next calendar year after adoption of the ordinance imposing the tax if the
ordinance is adopted on or before May 25; or
(B) of the second calendar year after adoption of the ordinance imposing the tax if the
ordinance is adopted after May 25.
(c) Notwithstanding Subsection (1)(b)(ii), the county option sales and use tax under this
section shall be imposed:
(i) beginning January 1, 1998, if an ordinance adopting the tax imposed on or before
September 4, 1997; or
(ii) beginning January 1, 1999, if an ordinance adopting the tax is imposed during 1997 but
after September 4, 1997.
(2) (a) Before imposing a county option sales and use tax under Subsection (1), a county
shall:
(i) hold two public hearings on separate days in geographically diverse locations in the
county; and
(ii) notify the commission at least 30 days prior to the adoption of the ordinance.
(b) (i) At least one of the hearings required by Subsection (2)(a)(i) shall have a starting time
of no earlier than 6:00 p.m.
(ii) The earlier of the hearings required by Subsection (2)(a)(i) shall be no less than seven
days after the day the first advertisement required by Subsection (2)(c) is published.
(c) (i) Before holding the public hearings required by Subsection (2)(a)(i), the county shall
advertise in a newspaper of general circulation in the county:
(A) its intent to adopt a county option sales and use tax;
(B) the date, time, and location of each public hearing; and
(C) a statement that the purpose of each public hearing is to obtain public comments
regarding the proposed tax.
(ii) The advertisement shall be published once each week for the two weeks preceding the
earlier of the two public hearings.
(iii) The advertisement shall be no less than 1/8 page in size, and the type used shall be no
smaller than 18 point and surrounded by a 1/4-inch border.
(iv) The advertisement may not be placed in that portion of the newspaper where legal
notices and classified advertisements appear.
(v) Whenever possible:
(A) the advertisement shall appear in a newspaper that is published at least five days a week,
unless the only newspaper in the county is published less than five days a week; and
(B) the newspaper selected shall be one of general interest and readership in the community,
and not one of limited subject matter.
(d) The adoption of an ordinance imposing a county option sales and use tax is subject to
a local referendum election as provided in Title 20A, Chapter 7, Part 6, Local Referenda -
Procedures, except that:
(i) notwithstanding Subsection 20A-7-609(2)(a), the county clerk shall hold a referendum
election that qualifies for the ballot on the earlier of the next regular general election date or the next
municipal general election date more than 155 days after adoption of an ordinance under this section;
(ii) for 1997 only, the 120-day period in Subsection 20A-7-606(1) shall be 30 days; and
(iii) the deadlines in Subsection 20A-7-606(2) and (3) do not apply, and the clerk shall take
the actions required by the those subsections before the referendum election.
(3) (a) If the aggregate population of the counties imposing a county option sales and use
tax under Subsection (1) is less than 75% of the state population, the tax levied under Subsection (1)
shall be distributed to the county in which the tax was collected.
(b) If the aggregate population of the counties imposing a county option sales and use tax
under Subsection (1) is greater than or equal to 75% of the state population:
(i) 50% of the tax collected under Subsection (1) in each county shall be distributed to the
county in which the tax was collected; and
(ii) except as provided in Subsection (3)(c), 50% of the tax collected under Subsection (1)
in each county shall be distributed proportionately among all counties imposing the tax, based on
the total population of each county.
(c) If the amount to be distributed annually to a county under Subsection (3)(b)(ii), when
combined with the amount distributed to the county under Subsection (3)(b)(i), does not equal at
least $75,000, then:
(i) the amount to be distributed annually to that county under Subsection (3)(b)(ii) shall be
increased so that, when combined with the amount distributed to the county under Subsection
(3)(b)(i), the amount distributed annually to the county is $75,000; and
(ii) the amount to be distributed annually to all other counties under Subsection (3)(b)(ii)
shall be reduced proportionately to offset the additional amount distributed under Subsection
(3)(c)(i).
(d) The commission shall establish rules to implement the distribution of the tax under
Subsections (3)(a), (b), and (c).
(4) (a) Except as provided in Subsections (4)(b) and (c), a county option sales and use tax
under Subsection (1) shall be imposed and administered in the same manner as a tax imposed under
Title 59, Chapter 12, Part 2, The Local Sales and Use Tax Act.
(b) A county option sales and use tax imposed under this part is not subject to:
(i) the distribution provisions of Subsections 59-12-205(2) and (3); and
(ii) the earmarking provisions of Subsection 59-12-205(4).
(c) The fee charged by the commission under Section 59-12-206 shall be based on the
distribution amounts resulting after all the applicable distribution calculations under Subsection (3)
have been made.
Section 4. Effective date.
If approved by two-thirds of all the members elected to each house, this act takes effect upon
approval by the governor, or the day following the constitutional time limit of Utah Constitution
Article VII, Section 8, without the governor's signature, or in the case of a veto, the date of veto
override.
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