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; 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

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).
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
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) beginning on the first day of 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 August 1; or

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1 (B) of the second calendar year after adoption of the ordinance imposing the tax if the
2 ordinance is adopted after August 1.
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:
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, except that the percentages set forth in Subsection 20A-7-601(1) shall, for purposes

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1 of this Subsection (d), each be 20%.
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 This act takes effect on July 1, 1997.




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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