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S.B. 36

This document includes House Floor Amendments incorporated into the bill on Mon, Feb 27, 2006 at 9:24 AM by chopkin. -->              1     

SCHOOL DISTRICTS - LIMITED

             2     
AMENDMENTS TO TRUTH IN TAXATION

             3     
2006 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Mike Dmitrich

             6     
House Sponsor: Gordon E. Snow

             7     

             8      LONG TITLE
             9      General Description:
             10          This bill modifies the State System of Public Education Title and the Property Tax Act
             11      relating to a voted leeway.
             12      Highlighted Provisions:
             13          This bill:
             14          .    modifies the State System of Public Education Title and the Property Tax Act to
             15      exempt school districts from the advertisement requirements of truth in taxation
             16      when budgeting revenue from certain voted leeway programs; and
             17          .    makes technical changes.
             18      Monies Appropriated in this Bill:
             19          None
             20      Other Special Clauses:
             21          This bill takes effect on January 1, 2007.
             22      Utah Code Sections Affected:
             23      AMENDS:
             24          53A-17a-133, as last amended by Chapter 257, Laws of Utah 2004
             25          53A-17a-134, as last amended by Chapter 257, Laws of Utah 2004
             26          53A-19-102, as last amended by Chapter 79, Laws of Utah 1996
             27          59-2-918, as last amended by Chapter 11, Laws of Utah 2005, First Special Session



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             28
         59-2-919, as last amended by Chapter 11, Laws of Utah 2005, First Special Session
             29          59-2-924, as last amended by Chapters 217 and 244, Laws of Utah 2005
             30     

             31      Be it enacted by the Legislature of the state of Utah:
             32          Section 1. Section 53A-17a-133 is amended to read:
             33           53A-17a-133. State-supported voted leeway program authorized -- Election
             34      requirements -- State guarantee -- Reconsideration of the program.
             35          (1) An election to consider adoption or modification of a voted leeway program is
             36      required if initiative petitions signed by 10% of the number of electors who voted at the last
             37      preceding general election are presented to the local school board or by action of the board.
             38          (2) (a) (i) To establish a voted leeway program, a majority of the electors of a district
             39      voting at an election in the manner set forth in Section 53A-16-110 must vote in favor of a
             40      special tax.
             41          (ii) The tax rate may not exceed .002 per dollar of taxable value.
             42          (b) The district may maintain a school program which exceeds the cost of the program
             43      referred to in Section 53A-17a-145 with this voted leeway.
             44          (c) In order to receive state support the first year, a district must receive voter approval
             45      no later than December 1 of the year prior to implementation.
             46          (3) (a) Under the voted leeway program, the state shall contribute an amount sufficient
             47      to guarantee $17.54 per weighted pupil unit for each .0001 of the first .0016 per dollar of
             48      taxable value.
             49          (b) The same dollar amount guarantee per weighted pupil unit for the .0016 per dollar
             50      of taxable value under Subsection (3)(a) shall apply to the board-approved leeway authorized
             51      in Section 53A-17a-134 , so that the guarantee shall apply up to a total of .002 per dollar of
             52      taxable value if a school district levies a tax rate under both programs.
             53          (c) (i) Beginning July 1, 2005, the $17.54 guarantee under Subsections (3)(a) and (b)
             54      shall be indexed each year to the value of the weighted pupil unit by making the value of the
             55      guarantee equal to .008544 times the value of the prior year's weighted pupil unit.
             56          (ii) The guarantee shall increase by .0005 times the value of the prior year's weighted
             57      pupil unit for each succeeding year until the guarantee is equal to .010544 times the value of
             58      the prior year's weighted pupil unit.



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House Floor Amendments 2-27-2006 ch/ado
             59
          H. [ [ ] (d) (i) The amount of state guarantee money to which a school district would
             60      otherwise be entitled to under this Subsection (3) may not be reduced for the sole reason that
             61      the district's levy is reduced as a consequence of changes in the certified tax rate under Section
             62      59-2-924 pursuant to changes in property valuation.
             63          (ii) Subsection (3)(d)(i) applies for a period of two years following any such change in
             64      the certified tax rate.
[ ] ] .H
             65          (4) (a) An election to modify an existing voted leeway program is not a reconsideration
             66      of the existing program unless the proposition submitted to the electors expressly so states.
             67          (b) A majority vote opposing a modification does not deprive the district of authority to
             68      continue an existing program.
             69          (c) If adoption of a leeway program is contingent upon an offset reducing other local
             70      school board levies, the board must allow the electors, in an election, to consider modifying or
             71      discontinuing the program prior to a subsequent increase in other levies that would increase the
             72      total local school board levy.
             73          (d) Nothing contained in this section terminates, without an election, the authority of a
             74      school district to continue an existing voted leeway program previously authorized by the
             75      voters.
             76          (5) Notwithstanding Section 59-2-918 , a school district may budget an increased
             77      amount of ad valorem property tax revenue derived from a voted leeway imposed under this
             78      section in addition to revenue from new growth as defined in Subsection 59-2-924 (2), without
             79      having to comply with the advertisement requirements of Section 59-2-918 , if the voted leeway
             80      is approved:
             81          (a) in accordance with Section 53A-16-110 on or after January 1, 2003; and
             82          (b) within the four-year period immediately preceding the year in which the school
             83      district seeks to budget an increased amount of ad valorem property tax revenue derived from
             84      the voted leeway.
             85          (6) Notwithstanding Section 59-2-919 , a school district may levy a tax rate under this
             86      section that exceeds the certified tax rate without having to comply with the advertisement
             87      requirements of Section 59-2-919 if:
             88          (a) the levy exceeds the certified tax rate as the result of a school district budgeting an
             89      increased amount of ad valorem property tax revenue derived from a voted leeway imposed



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             90
     under this section; and
             91          (b) if the voted leeway was approved:
             92          (i) in accordance with Section 53A-16-110 on or after January 1, 2003; and
             93          (ii) within the four-year period immediately preceding the year in which the school
             94      district seeks to budget an increased amount of ad valorem property tax revenue derived from
             95      the voted leeway.
             96          Section 2. Section 53A-17a-134 is amended to read:
             97           53A-17a-134. Board-approved leeway -- Purpose -- State support -- Disapproval.
             98          (1) Each local school board may levy a tax rate of up to .0004 per dollar of taxable
             99      value to maintain a school program above the cost of the basic school program as follows:
             100          (a) a local school board shall use the monies generated by the tax for class size
             101      reduction within the school district;
             102          (b) if a local school board determines that the average class size in the school district is
             103      not excessive, it may use the monies for other school purposes but only if the board has
             104      declared the use for other school purposes in a public meeting prior to levying the tax rate; and
             105          (c) a district may not use the monies for other school purposes under Subsection (1)(b)
             106      until it has certified in writing that its class size needs are already being met and has identified
             107      the other school purposes for which the monies will be used to the State Board of Education
             108      and the state board has approved their use for other school purposes.
             109          (2) (a) The state shall contribute an amount sufficient to guarantee $17.54 per weighted
             110      pupil unit for each .0001 per dollar of taxable value.
             111          (b) The guarantee shall increase in the same manner as provided for the voted leeway
             112      guarantee in Subsections 53A-17a-133 (3)(c)(i) and (ii).
             113          (c) (i) The amount of state guarantee money to which a school district would otherwise
             114      be entitled to under this Subsection (2) may not be reduced for the sole reason that the district's
             115      levy is reduced as a consequence of changes in the certified tax rate under Section 59-2-924
             116      pursuant to changes in property valuation.
             117          (ii) Subsection (2)(c)(i) applies for a period of two years following any such change in
             118      the certified tax rate.
             119          (3) The levy authorized under this section is not in addition to the maximum rate of
             120      .002 authorized in Section 53A-17a-133 , but is a board-authorized component of the total tax



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             121
     rate under that section.
             122          (4) As an exception to Section 53A-17a-133 , the board-authorized levy does not
             123      require voter approval, but the board may require voter approval if requested by a majority of
             124      the board.
             125          (5) An election to consider disapproval of the board-authorized levy is required, if
             126      within 60 days after the levy is established by the board, referendum petitions signed by the
             127      number of legal voters required in Section 20A-7-301 , who reside within the school district, are
             128      filed with the school district.
             129          (6) (a) A local school board shall establish its board-approved levy by April 1 to have
             130      the levy apply to the fiscal year beginning July 1 in that same calendar year except that if an
             131      election is required under this section, the levy applies to the fiscal year beginning July 1 of the
             132      next calendar year.
             133          (b) The approval and disapproval votes authorized in Subsections (4) and (5) shall
             134      occur at a general election in even-numbered years, except that a vote required under this
             135      section in odd-numbered years shall occur at a special election held on a day in odd-numbered
             136      years that corresponds to the general election date. The school district shall pay for the cost of
             137      a special election.
             138          (7) (a) Modification or termination of a voter-approved leeway rate authorized under
             139      this section is governed by Section 53A-17a-133 .
             140          (b) A board-authorized leeway rate may be modified or terminated by a majority vote
             141      of the board subject to disapproval procedures specified in this section.
             142          (8) A board levy election does not require publication of a voter information pamphlet.
             143          Section 3. Section 53A-19-102 is amended to read:
             144           53A-19-102. Local school boards budget procedures.
             145          (1) Prior to June 22 of each year, each local school board shall adopt a budget and
             146      make appropriations for the next fiscal year. If the tax rate in the proposed budget exceeds the
             147      certified tax rate defined in Subsection 59-2-924 (2), the board shall comply with [the Tax
             148      Increase Disclosure Act] Sections 59-2-918 and 59-2-919 in adopting the budget, except as
             149      provided by Section 53A-17a-133 .
             150          (2) Prior to the adoption of a budget containing a tax rate which does not exceed the
             151      certified tax rate, the board shall hold a public hearing on the proposed budget. In addition to



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             152
     complying with Title 52, Chapter 4, Open and Public Meetings, in regards to the hearing, the
             153      board shall do the following:
             154          (a) publish the required newspaper notice at least one week prior to the hearing; and
             155          (b) file a copy of the proposed budget with the board's business administrator for public
             156      inspection at least ten days prior to the hearing.
             157          (3) The board shall file a copy of the adopted budget with the state auditor and the
             158      State Board of Education.
             159          Section 4. Section 59-2-918 is amended to read:
             160           59-2-918. Advertisement of proposed tax increase -- Notice -- Contents.
             161          (1) (a) Except as provided in Subsection (1)(b), a taxing entity may not budget an
             162      increased amount of ad valorem tax revenue exclusive of revenue from new growth as defined
             163      in Subsection 59-2-924 (2) unless it advertises its intention to do so at the same time that it
             164      advertises its intention to fix its budget for the forthcoming fiscal year.
             165          (b) (i) Notwithstanding Subsection (1)(a), a taxing entity is not required to meet the
             166      advertisement or hearing requirements of this section if:
             167          [(i)] (A) the taxing entity:
             168          [(A)] (I) collected less than $15,000 in ad valorem tax revenues for the previous fiscal
             169      year; or
             170          [(B)] (II) is expressly exempted by law from complying with the requirements of this
             171      section; or
             172          [(ii)] (B) the increased amount of ad valorem tax revenue results from a tax rate
             173      increase that is exempted under Subsection 59-2-919 (1)(a)(ii)(B) from the advertisement and
             174      hearing requirements of Section 59-2-919 .
             175          (ii) Notwithstanding Subsection (1)(a), a taxing entity is not required to meet the
             176      advertisement requirements of this section if Section 53A-17a-133 allows the taxing entity to
             177      budget an increased amount of ad valorem property tax revenue without having to comply with
             178      the advertisement requirements of this section.
             179          (2) (a) For taxing entities operating under a July 1 through June 30 fiscal year, the
             180      advertisement required by this section may be combined with the advertisement required by
             181      Section 59-2-919 .
             182          (b) For taxing entities operating under a January 1 through December 31 fiscal year,



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             183
     the advertisement required by this section shall meet the size, type, placement, and frequency
             184      requirements established under Section 59-2-919 .
             185          (3) The form of the advertisement required by this section shall meet the size, type,
             186      placement, and frequency requirements established under Section 59-2-919 and shall be
             187      substantially as follows:
             188     
"NOTICE OF PROPOSED TAX INCREASE

             189          The (name of the taxing entity) is proposing to increase its property tax revenue. As a
             190      result of the proposed increase, the tax on a (insert the average value of a residence in the
             191      taxing entity rounded to the nearest thousand dollars) residence will be $__________, and the
             192      tax on a business having the same value as the average value of a residence in the taxing entity
             193      will be__________. Without the proposed increase, the tax on a (insert the average value of a
             194      residence in the taxing entity rounded to the nearest thousand dollars) residence would be
             195      $__________, and the tax on a business having the same value as the average value of a
             196      residence in the taxing entity would be_________.
             197          This would be an increase of ______%, which is $______ per year ($______ per
             198      month) on a (insert the average value of a residence in the taxing entity rounded to the nearest
             199      thousand dollars) residence or $______ per year on a business having the same value as the
             200      average value of a residence in the taxing entity. With new growth, this property tax increase,
             201      and other factors, (name of taxing entity) will increase its property tax revenue from $_____
             202      [collected] budgeted last year to $_____ [collected] budgeted this year which is a revenue
             203      increase of _____%.
             204          All concerned citizens are invited to a public hearing on the tax increase to be held on
             205      (date and time) at (meeting place)."
             206          (4) If a final decision regarding the budgeting of an increased amount of ad valorem tax
             207      revenue is not made at the public hearing described in Subsection (3), the taxing entity shall
             208      announce at the public hearing the scheduled time and place for consideration and adoption of
             209      the proposed budget increase.
             210          (5) (a) Each taxing entity operating under the January 1 through December 31 fiscal
             211      year shall by March 1 notify the county of the date, time, and place of the public hearing at
             212      which the budget for the following fiscal year will be considered.
             213          (b) The county shall include the information described in Subsection (5)(a) with the tax



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             214
     notice.
             215          (6) A taxing entity shall hold a public hearing under this section beginning at or after 6
             216      p.m.
             217          Section 5. Section 59-2-919 is amended to read:
             218           59-2-919. Resolution proposing tax increases -- Notice -- Contents of notice of
             219      proposed tax increase -- Personal mailed notice in addition to advertisement -- Contents
             220      of personal mailed notice -- Hearing -- Dates.
             221          A tax rate in excess of the certified tax rate may not be levied until a resolution has
             222      been approved by the taxing entity in accordance with the following procedure:
             223          (1) (a) (i) The taxing entity shall advertise its intent to exceed the certified tax rate in a
             224      newspaper or combination of newspapers of general circulation in the taxing entity.
             225          (ii) Notwithstanding Subsection (1)(a)(i), a taxing entity is not required to meet the
             226      advertisement or hearing requirements of this section if:
             227          (A) the taxing entity:
             228          (I) collected less than $15,000 in ad valorem tax revenues for the previous fiscal year;
             229      or
             230          (II) is expressly exempted by law from complying with the requirements of this
             231      section; or
             232          (B) (I) the taxing entity is a party to an interlocal agreement under Title 11, Chapter 13,
             233      Interlocal Cooperation Act, that creates an interlocal entity to provide fire protection,
             234      emergency, and emergency medical services;
             235          (II) the tax rate increase is approved by the taxing entity's voters at an election held for
             236      that purpose on or before December 31, 2010;
             237          (III) the purpose of the tax rate increase is to pay for fire protection, emergency, and
             238      emergency medical services provided by the interlocal entity; and
             239          (IV) at least 30 days before its annual budget hearing, the taxing entity:
             240          (Aa) adopts a resolution certifying that the taxing entity will dedicate all revenue from
             241      the tax rate increase exclusively to pay for fire protection, emergency, and emergency medical
             242      services provided by the interlocal entity and that the amount of other revenues, independent of
             243      the revenue generated from the tax rate increase, that the taxing entity spends for fire
             244      protection, emergency, and emergency medical services each year after the tax rate increase



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             245
     will not decrease below the amount spent by the taxing entity during the year immediately
             246      before the tax rate increase without a corresponding decrease in the taxing entity's property tax
             247      revenues used in calculating the taxing entity's certified tax rate; and
             248          (Bb) sends a copy of the resolution to the commission.
             249          (iii) The exception under Subsection (1)(a)(ii)(B) from the advertisement and hearing
             250      requirements of this section does not apply to an increase in a taxing entity's tax rate that occurs
             251      after December 31, 2010, even if the tax rate increase is approved by the taxing entity's voters
             252      before that date.
             253          (iv) Notwithstanding Subsection (1)(a)(i), a taxing entity is not required to meet the
             254      advertisement requirements of this section if Section 53A-17a-133 allows the taxing entity to
             255      levy a tax rate that exceeds that certified tax rate without having to comply with the
             256      advertisement requirements of this section.
             257          (b) The advertisement described in this section shall:
             258          (i) be no less than 1/4 page in size;
             259          (ii) use type no smaller than 18 point; and
             260          (iii) be surrounded by a 1/4-inch border.
             261          (c) The advertisement described in this section may not be placed in that portion of the
             262      newspaper where legal notices and classified advertisements appear.
             263          (d) It is the intent of the Legislature that:
             264          (i) whenever possible, the advertisement described in this section appear in a
             265      newspaper that is published at least one day per week; and
             266          (ii) the newspaper or combination of newspapers selected:
             267          (A) be of general interest and readership in the taxing entity; and
             268          (B) not be of limited subject matter.
             269          (e) The advertisement described in this section shall:
             270          (i) be run once each week for the two weeks preceding the adoption of the final budget;
             271      and
             272          (ii) state that the taxing entity will meet on a certain day, time, and place fixed in the
             273      advertisement, which shall be not less than seven days after the day the first advertisement is
             274      published, for the purpose of hearing comments regarding any proposed increase and to explain
             275      the reasons for the proposed increase.



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             276
         (f) The meeting on the proposed increase may coincide with the hearing on the
             277      proposed budget of the taxing entity.
             278          (2) The form and content of the notice shall be substantially as follows:
             279     
"NOTICE OF PROPOSED TAX INCREASE

             280          The (name of the taxing entity) is proposing to increase its property tax revenue. As a
             281      result of the proposed increase, the tax on a (insert the average value of a residence in the
             282      taxing entity rounded to the nearest thousand dollars) residence will be $__________, and the
             283      tax on a business having the same value as the average value of a residence in the taxing entity
             284      will be $__________. Without the proposed increase the tax on a (insert the average value of a
             285      residence in the taxing entity rounded to the nearest thousand dollars) residence would be
             286      $__________, and the tax on a business having the same value as the average value of a
             287      residence in the taxing entity would be $__________.
             288          The (insert year) proposed tax rate is __________. Without the proposed increase, the
             289      rate would be __________. This would be an increase of ______%, which is $______ per year
             290      ($______ per month) on a (insert the average value of a residence in the taxing entity rounded
             291      to the nearest thousand dollars) residence or $______ per year on a business having the same
             292      value as the average value of a residence in the taxing entity. With new growth, this property
             293      tax increase, and other factors, (name of taxing entity) will increase its property tax revenue
             294      from $_____ [collected] budgeted last year to $_____ [collected] budgeted this year which is a
             295      revenue increase of _____%.
             296          All concerned citizens are invited to a public hearing on the tax increase to be held on
             297      (date and time) at (meeting place)."
             298          (3) The commission:
             299          (a) shall adopt rules governing the joint use of one advertisement under this section or
             300      Section 59-2-918 by two or more taxing entities; and
             301          (b) may, upon petition by any taxing entity, authorize either:
             302          (i) the use of weekly newspapers in counties having both daily and weekly newspapers
             303      where the weekly newspaper would provide equal or greater notice to the taxpayer; or
             304          (ii) the use of a commission-approved direct notice to each taxpayer if the:
             305          (A) cost of the advertisement would cause undue hardship; and
             306          (B) direct notice is different and separate from that provided for in Subsection (4).



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             307
         (4) (a) In addition to providing the notice required by Subsections (1) and (2), the
             308      county auditor, on or before July 22 of each year, shall notify, by mail, each owner of real
             309      estate as defined in Section 59-2-102 who is listed on the assessment roll.
             310          (b) The notice described in Subsection (4)(a) shall:
             311          (i) be sent to all owners of real property by mail not less than ten days before the day
             312      on which:
             313          (A) the county board of equalization meets; and
             314          (B) the taxing entity holds a public hearing on the proposed increase in the certified tax
             315      rate;
             316          (ii) be printed on a form that is:
             317          (A) approved by the commission; and
             318          (B) uniform in content in all counties in the state; and
             319          (iii) contain for each property:
             320          (A) the value of the property;
             321          (B) the date the county board of equalization will meet to hear complaints on the
             322      valuation;
             323          (C) itemized tax information for all taxing entities, including a separate statement for
             324      the minimum school levy under Section 53A-17a-135 stating:
             325          (I) the dollar amount the taxpayer would have paid based on last year's rate; and
             326          (II) the amount of the taxpayer's liability under the current rate;
             327          (D) the tax impact on the property;
             328          (E) the time and place of the required public hearing for each entity;
             329          (F) property tax information pertaining to:
             330          (I) taxpayer relief;
             331          (II) options for payment of taxes; and
             332          (III) collection procedures;
             333          (G) information specifically authorized to be included on the notice under Title 59,
             334      Chapter 2, Property Tax Act; and
             335          (H) other property tax information approved by the commission.
             336          (5) (a) The taxing entity, after holding a hearing as provided in this section, may adopt
             337      a resolution levying a tax rate in excess of the certified tax rate.



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             338
         (b) If a resolution adopting a tax rate is not adopted on the day of the public hearing,
             339      the scheduled time and place for consideration and adoption of the resolution shall be
             340      announced at the public hearing.
             341          (c) If a resolution adopting a tax rate is to be considered at a day and time that is more
             342      than two weeks after the public hearing described in Subsection (4)(b)(iii)(E), a taxing entity,
             343      other than a taxing entity described in Subsection (1)(a)(ii), shall advertise the date of the
             344      proposed adoption of the resolution in the same manner as provided under Subsections (1) and
             345      (2).
             346          (6) (a) All hearings described in this section shall be open to the public.
             347          (b) The governing body of a taxing entity conducting a hearing shall permit all
             348      interested parties desiring to be heard an opportunity to present oral testimony within
             349      reasonable time limits.
             350          (7) (a) Each taxing entity shall notify the county legislative body by March 1 of each
             351      year of the date, time, and place a public hearing is held by the taxing entity pursuant to this
             352      section.
             353          (b) A taxing entity may not schedule a hearing described in this section at the same
             354      time as another overlapping taxing entity in the same county, but all taxing entities in which the
             355      power to set tax levies is vested in the same governing board or authority may consolidate the
             356      required hearings into one hearing.
             357          (c) The county legislative body shall resolve any conflicts in hearing dates and times
             358      after consultation with each affected taxing entity.
             359          (8) A taxing entity shall hold a public hearing under this section beginning at or after 6
             360      p.m.
             361          Section 6. Section 59-2-924 is amended to read:
             362           59-2-924. Report of valuation of property to county auditor and commission --
             363      Transmittal by auditor to governing bodies -- Certified tax rate -- Rulemaking authority
             364      -- Adoption of tentative budget.
             365          (1) (a) Before June 1 of each year, the county assessor of each county shall deliver to
             366      the county auditor and the commission the following statements:
             367          (i) a statement containing the aggregate valuation of all taxable property in each taxing
             368      entity; and



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             369
         (ii) a statement containing the taxable value of any additional personal property
             370      estimated by the county assessor to be subject to taxation in the current year.
             371          (b) The county auditor shall, on or before June 8, transmit to the governing body of
             372      each taxing entity:
             373          (i) the statements described in Subsections (1)(a)(i) and (ii);
             374          (ii) an estimate of the revenue from personal property;
             375          (iii) the certified tax rate; and
             376          (iv) all forms necessary to submit a tax levy request.
             377          (2) (a) (i) The "certified tax rate" means a tax rate that will provide the same ad
             378      valorem property tax revenues for a taxing entity as were budgeted by that taxing entity for the
             379      prior year.
             380          (ii) For purposes of this Subsection (2), "ad valorem property tax revenues" do not
             381      include:
             382          (A) collections from redemptions;
             383          (B) interest; and
             384          (C) penalties.
             385          (iii) Except as provided in Subsection (2)(a)(v), the certified tax rate shall be calculated
             386      by dividing the ad valorem property tax revenues budgeted for the prior year by the taxing
             387      entity by the taxable value established in accordance with Section 59-2-913 .
             388          (iv) (A) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking
             389      Act, the commission shall make rules determining the calculation of ad valorem property tax
             390      revenues budgeted by a taxing entity.
             391          (B) For purposes of Subsection (2)(a)(iv)(A), ad valorem property tax revenues
             392      budgeted by a taxing entity shall be calculated in the same manner as budgeted property tax
             393      revenues are calculated for purposes of Section 59-2-913 .
             394          (v) The certified tax rates for the taxing entities described in this Subsection (2)(a)(v)
             395      shall be calculated as follows:
             396          (A) except as provided in Subsection (2)(a)(v)(B), for new taxing entities the certified
             397      tax rate is zero;
             398          (B) for each municipality incorporated on or after July 1, 1996, the certified tax rate is:
             399          (I) in a county of the first, second, or third class, the levy imposed for municipal-type



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House Floor Amendments 2-27-2006 ch/ado
             400
     services under Sections 17-34-1 and 17-36-9 ; and
             401          (II) in a county of the fourth, fifth, or sixth class, the levy imposed for general county
             402      purposes and such other levies imposed solely for the municipal-type services identified in
             403      Section 17-34-1 and Subsection 17-36-3 (22);
             404          (C) for debt service H. [ or a voted leeway under Section 53A-17a-133 , ] .H voted
             404a      on by the
             405      public, the certified tax rate shall be the actual levy imposed by that section, except that the
             406      certified tax rates for the following levies shall be calculated in accordance with Section
             407      59-2-913 and this section:
             408          (I) school leeways provided for under Sections 11-2-7 , 53A-16-110 , 53A-17a-125 ,
             409      53A-17a-127 , H. 53A-17a-133, .H 53A-17a-134 , 53A-17a-143 , 53A-17a-145 , and
             409a      53A-21-103 ; and
             410          (II) levies to pay for the costs of state legislative mandates or judicial or administrative
             411      orders under Section 59-2-906.3 .
             412          (vi) (A) A judgment levy imposed under Section 59-2-1328 or Section 59-2-1330 shall
             413      be established at that rate which is sufficient to generate only the revenue required to satisfy
             414      one or more eligible judgments, as defined in Section 59-2-102 .
             415          (B) The ad valorem property tax revenue generated by the judgment levy shall not be
             416      considered in establishing the taxing entity's aggregate certified tax rate.
             417          (b) (i) For the purpose of calculating the certified tax rate, the county auditor shall use
             418      the taxable value of property on the assessment roll.
             419          (ii) For purposes of Subsection (2)(b)(i), the taxable value of property on the
             420      assessment roll does not include new growth as defined in Subsection (2)(b)(iii).
             421          (iii) "New growth" means:
             422          (A) the difference between the increase in taxable value of the taxing entity from the
             423      previous calendar year to the current year; minus
             424          (B) the amount of an increase in taxable value described in Subsection (2)(b)(iv).
             425          (iv) Subsection (2)(b)(iii)(B) applies to the following increases in taxable value:
             426          (A) the amount of increase to locally assessed real property taxable values resulting
             427      from factoring, reappraisal, or any other adjustments; or
             428          (B) the amount of an increase in the taxable value of property assessed by the
             429      commission under Section 59-2-201 resulting from a change in the method of apportioning the
             430      taxable value prescribed by:



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             431
         (I) the Legislature;
             432          (II) a court;
             433          (III) the commission in an administrative rule; or
             434          (IV) the commission in an administrative order.
             435          (c) Beginning January 1, 1997, if a taxing entity receives increased revenues from
             436      uniform fees on tangible personal property under Section 59-2-404 , 59-2-405 , 59-2-405.1 ,
             437      59-2-405.2 , or 59-2-405.3 as a result of any county imposing a sales and use tax under Chapter
             438      12, Part 11, County Option Sales and Use Tax, the taxing entity shall decrease its certified tax
             439      rate to offset the increased revenues.
             440          (d) (i) Beginning July 1, 1997, if a county has imposed a sales and use tax under
             441      Chapter 12, Part 11, County Option Sales and Use Tax, the county's certified tax rate shall be:
             442          (A) decreased on a one-time basis by the amount of the estimated sales and use tax
             443      revenue to be distributed to the county under Subsection 59-12-1102 (3); and
             444          (B) increased by the amount necessary to offset the county's reduction in revenue from
             445      uniform fees on tangible personal property under Section 59-2-404 , 59-2-405 , 59-2-405.1 ,
             446      59-2-405.2 , or 59-2-405.3 as a result of the decrease in the certified tax rate under Subsection
             447      (2)(d)(i)(A).
             448          (ii) The commission shall determine estimates of sales and use tax distributions for
             449      purposes of Subsection (2)(d)(i).
             450          (e) Beginning January 1, 1998, if a municipality has imposed an additional resort
             451      communities sales tax under Section 59-12-402 , the municipality's certified tax rate shall be
             452      decreased on a one-time basis by the amount necessary to offset the first 12 months of
             453      estimated revenue from the additional resort communities sales and use tax imposed under
             454      Section 59-12-402 .
             455          (f) For the calendar year beginning on January 1, 1999, and ending on December 31,
             456      1999, a taxing entity's certified tax rate shall be adjusted by the amount necessary to offset the
             457      adjustment in revenues from uniform fees on tangible personal property under Section
             458      59-2-405.1 as a result of the adjustment in uniform fees on tangible personal property under
             459      Section 59-2-405.1 enacted by the Legislature during the 1998 Annual General Session.
             460          (g) For purposes of Subsections (2)(h) through (j):
             461          (i) "1998 actual collections" means the amount of revenues a taxing entity actually



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             462
     collected for the calendar year beginning on January 1, 1998 , under Section 59-2-405 for:
             463          (A) motor vehicles required to be registered with the state that weigh 12,000 pounds or
             464      less; and
             465          (B) state-assessed commercial vehicles required to be registered with the state that
             466      weigh 12,000 pounds or less.
             467          (ii) "1999 actual collections" means the amount of revenues a taxing entity actually
             468      collected for the calendar year beginning on January 1, 1999, under Section 59-2-405.1 .
             469          (h) For the calendar year beginning on January 1, 2000, the commission shall make the
             470      following adjustments:
             471          (i) the commission shall make the adjustment described in Subsection (2)(i)(i) if, for
             472      the calendar year beginning on January 1, 1999, a taxing entity's 1998 actual collections were
             473      greater than the sum of:
             474          (A) the taxing entity's 1999 actual collections; and
             475          (B) any adjustments the commission made under Subsection (2)(f);
             476          (ii) the commission shall make the adjustment described in Subsection (2)(i)(ii) if, for
             477      the calendar year beginning on January 1, 1999, a taxing entity's 1998 actual collections were
             478      greater than the taxing entity's 1999 actual collections, but the taxing entity's 1998 actual
             479      collections were less than the sum of:
             480          (A) the taxing entity's 1999 actual collections; and
             481          (B) any adjustments the commission made under Subsection (2)(f); and
             482          (iii) the commission shall make the adjustment described in Subsection (2)(i)(iii) if, for
             483      the calendar year beginning on January 1, 1999, a taxing entity's 1998 actual collections were
             484      less than the taxing entity's 1999 actual collections.
             485          (i) (i) For purposes of Subsection (2)(h)(i), the commission shall increase a taxing
             486      entity's certified tax rate under this section and a taxing entity's certified revenue levy under
             487      Section 59-2-906.1 by the amount necessary to offset the difference between:
             488          (A) the taxing entity's 1998 actual collections; and
             489          (B) the sum of:
             490          (I) the taxing entity's 1999 actual collections; and
             491          (II) any adjustments the commission made under Subsection (2)(f).
             492          (ii) For purposes of Subsection (2)(h)(ii), the commission shall decrease a taxing



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             493
     entity's certified tax rate under this section and a taxing entity's certified revenue levy under
             494      Section 59-2-906.1 by the amount necessary to offset the difference between:
             495          (A) the sum of:
             496          (I) the taxing entity's 1999 actual collections; and
             497          (II) any adjustments the commission made under Subsection (2)(f); and
             498          (B) the taxing entity's 1998 actual collections.
             499          (iii) For purposes of Subsection (2)(h)(iii), the commission shall decrease a taxing
             500      entity's certified tax rate under this section and a taxing entity's certified revenue levy under
             501      Section 59-2-906.1 by the amount of any adjustments the commission made under Subsection
             502      (2)(f).
             503          (j) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, for
             504      purposes of Subsections (2)(f) through (i), the commission may make rules establishing the
             505      method for determining a taxing entity's 1998 actual collections and 1999 actual collections.
             506          (k) (i) (A) For fiscal year 2000, the certified tax rate of each county required under
             507      Subsection 17-34-1 (4)(a) to provide advanced life support and paramedic services to the
             508      unincorporated area of the county shall be decreased by the amount necessary to reduce
             509      revenues in that fiscal year by an amount equal to the difference between the amount the county
             510      budgeted in its 2000 fiscal year budget for advanced life support and paramedic services
             511      countywide and the amount the county spent during fiscal year 2000 for those services,
             512      excluding amounts spent from a municipal services fund for those services.
             513          (B) For fiscal year 2001, the certified tax rate of each county to which Subsection
             514      (2)(k)(i)(A) applies shall be decreased by the amount necessary to reduce revenues in that fiscal
             515      year by the amount that the county spent during fiscal year 2000 for advanced life support and
             516      paramedic services countywide, excluding amounts spent from a municipal services fund for
             517      those services.
             518          (ii) (A) A city or town located within a county of the first class to which Subsection
             519      (2)(k)(i) applies may increase its certified tax rate by the amount necessary to generate within
             520      the city or town the same amount of revenues as the county would collect from that city or
             521      town if the decrease under Subsection (2)(k)(i) did not occur.
             522          (B) An increase under Subsection (2)(k)(ii)(A), whether occurring in a single fiscal
             523      year or spread over multiple fiscal years, is not subject to the notice and hearing requirements



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             524
     of Sections 59-2-918 and 59-2-919 .
             525          (l) (i) The certified tax rate of each county required under Subsection 17-34-1 (4)(b) to
             526      provide detective investigative services to the unincorporated area of the county shall be
             527      decreased:
             528          (A) in fiscal year 2001 by the amount necessary to reduce revenues in that fiscal year
             529      by at least $4,400,000; and
             530          (B) in fiscal year 2002 by the amount necessary to reduce revenues in that fiscal year
             531      by an amount equal to the difference between $9,258,412 and the amount of the reduction in
             532      revenues under Subsection (2)(l)(i)(A).
             533          (ii) (A) (I) Beginning with municipal fiscal year 2002, a city or town located within a
             534      county to which Subsection (2)(l)(i) applies may increase its certified tax rate to generate
             535      within the city or town the same amount of revenue as the county would have collected during
             536      county fiscal year 2001 from within the city or town except for Subsection (2)(l)(i)(A).
             537          (II) Beginning with municipal fiscal year 2003, a city or town located within a county
             538      to which Subsection (2)(l)(i) applies may increase its certified tax rate to generate within the
             539      city or town the same amount of revenue as the county would have collected during county
             540      fiscal year 2002 from within the city or town except for Subsection (2)(l)(i)(B).
             541          (B) (I) Except as provided in Subsection (2)(l)(ii)(B)(II), an increase in the city or
             542      town's certified tax rate under Subsection (2)(l)(ii)(A), whether occurring in a single fiscal year
             543      or spread over multiple fiscal years, is subject to the notice and hearing requirements of
             544      Sections 59-2-918 and 59-2-919 .
             545          (II) For an increase under this Subsection (2)(l)(ii) that generates revenue that does not
             546      exceed the same amount of revenue as the county would have collected except for Subsection
             547      (2)(l)(i), the requirements of Sections 59-2-918 and 59-2-919 do not apply if the city or town:
             548          (Aa) publishes a notice that meets the size, type, placement, and frequency
             549      requirements of Section 59-2-919 , reflects that the increase is a shift of a tax from one imposed
             550      by the county to one imposed by the city or town, and explains how the revenues from the tax
             551      increase will be used; and
             552          (Bb) holds a public hearing on the tax shift that may be held in conjunction with the
             553      city or town's regular budget hearing.
             554          (m) (i) This Subsection (2)(m) applies to each county that:



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             555
         (A) establishes a countywide special service district under Title 17A, Chapter 2, Part
             556      13, Utah Special Service District Act, to provide jail service, as provided in Subsection
             557      17A-2-1304 (1)(a)(x); and
             558          (B) levies a property tax on behalf of the special service district under Section
             559      17A-2-1322 .
             560          (ii) (A) The certified tax rate of each county to which this Subsection (2)(m) applies
             561      shall be decreased by the amount necessary to reduce county revenues by the same amount of
             562      revenues that will be generated by the property tax imposed on behalf of the special service
             563      district.
             564          (B) Each decrease under Subsection (2)(m)(ii)(A) shall occur contemporaneously with
             565      the levy on behalf of the special service district under Section 17A-2-1322 .
             566          (n) (i) As used in this Subsection (2)(n):
             567          (A) "Annexing county" means a county whose unincorporated area is included within a
             568      fire district by annexation.
             569          (B) "Annexing municipality" means a municipality whose area is included within a fire
             570      district by annexation.
             571          (C) "Equalized fire protection tax rate" means the tax rate that results from:
             572          (I) calculating, for each participating county and each participating municipality, the
             573      property tax revenue necessary to cover all of the costs associated with providing fire
             574      protection, paramedic, and emergency services:
             575          (Aa) for a participating county, in the unincorporated area of the county; and
             576          (Bb) for a participating municipality, in the municipality; and
             577          (II) adding all the amounts calculated under Subsection (2)(n)(i)(C)(I) for all
             578      participating counties and all participating municipalities and then dividing that sum by the
             579      aggregate taxable value of the property, as adjusted in accordance with Section 59-2-913 :
             580          (Aa) for participating counties, in the unincorporated area of all participating counties;
             581      and
             582          (Bb) for participating municipalities, in all the participating municipalities.
             583          (D) "Fire district" means a county service area under Title 17A, Chapter 2, Part 4,
             584      County Service Area Act, in the creation of which an election was not required under
             585      Subsection 17B-2-214 (3)(c).



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             586
         (E) "Fire protection tax rate" means:
             587          (I) for an annexing county, the property tax rate that, when applied to taxable property
             588      in the unincorporated area of the county, generates enough property tax revenue to cover all the
             589      costs associated with providing fire protection, paramedic, and emergency services in the
             590      unincorporated area of the county; and
             591          (II) for an annexing municipality, the property tax rate that generates enough property
             592      tax revenue in the municipality to cover all the costs associated with providing fire protection,
             593      paramedic, and emergency services in the municipality.
             594          (F) "Participating county" means a county whose unincorporated area is included
             595      within a fire district at the time of the creation of the fire district.
             596          (G) "Participating municipality" means a municipality whose area is included within a
             597      fire district at the time of the creation of the fire district.
             598          (ii) In the first year following creation of a fire district, the certified tax rate of each
             599      participating county and each participating municipality shall be decreased by the amount of
             600      the equalized fire protection tax rate.
             601          (iii) In the first year following annexation to a fire district, the certified tax rate of each
             602      annexing county and each annexing municipality shall be decreased by the fire protection tax
             603      rate.
             604          (iv) Each tax levied under this section by a fire district shall be considered to be levied
             605      by:
             606          (A) each participating county and each annexing county for purposes of the county's
             607      tax limitation under Section 59-2-908 ; and
             608          (B) each participating municipality and each annexing municipality for purposes of the
             609      municipality's tax limitation under Section 10-5-112 , for a town, or Section 10-6-133 , for a
             610      city.
             611          (3) (a) On or before June 22, each taxing entity shall annually adopt a tentative budget.
             612          (b) If the taxing entity intends to exceed the certified tax rate, it shall notify the county
             613      auditor of:
             614          (i) its intent to exceed the certified tax rate; and
             615          (ii) the amount by which it proposes to exceed the certified tax rate.
             616          (c) The county auditor shall notify all property owners of any intent to exceed the



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             617
     certified tax rate in accordance with Subsection 59-2-919 (2).
             618          (4) (a) The taxable value for the base year under Subsection 17B-4-102 (4) shall be
             619      reduced for any year to the extent necessary to provide a redevelopment agency established
             620      under Title 17B, Chapter 4, Redevelopment Agencies Act, with approximately the same
             621      amount of money the agency would have received without a reduction in the county's certified
             622      tax rate if:
             623          (i) in that year there is a decrease in the certified tax rate under Subsection (2)(c) or
             624      (2)(d)(i);
             625          (ii) the amount of the decrease is more than 20% of the county's certified tax rate of the
             626      previous year; and
             627          (iii) the decrease results in a reduction of the amount to be paid to the agency under
             628      Section 17B-4-1003 or 17B-4-1004 .
             629          (b) The base taxable value under Subsection 17B-4-102 (4) shall be increased in any
             630      year to the extent necessary to provide a redevelopment agency with approximately the same
             631      amount of money as the agency would have received without an increase in the certified tax
             632      rate that year if:
             633          (i) in that year the base taxable value under Subsection 17B-4-102 (4) is reduced due to
             634      a decrease in the certified tax rate under Subsection (2)(c) or (2)(d)(i); and
             635          (ii) The certified tax rate of a city, school district, or special district increases
             636      independent of the adjustment to the taxable value of the base year.
             637          (c) Notwithstanding a decrease in the certified tax rate under Subsection (2)(c) or
             638      (2)(d)(i), the amount of money allocated and, when collected, paid each year to a
             639      redevelopment agency established under Title 17B, Chapter 4, Redevelopment Agencies Act,
             640      for the payment of bonds or other contract indebtedness, but not for administrative costs, may
             641      not be less than that amount would have been without a decrease in the certified tax rate under
             642      Subsection (2)(c) or (2)(d)(i).
             643          Section 7. Effective date.
             644          This bill takes effect on January 1, 2007.



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Legislative Review Note
    as of 11-29-05 9:24 AM


Based on a limited legal review, this legislation has not been determined to have a high
probability of being held unconstitutional.

Office of Legislative Research and General Counsel

Interim Committee Note
    as of 12-21-05 3:50 PM

The Revenue and Taxation Interim Committee recommended this bill.

Mixed Membership Committee Note
    as of 12-21-05 3:50 PM

The Tax Reform Task Force recommended this bill.
    Membership:        13 legislators    2 non-legislators
    Legislative Vote:    10 voting for    0 voting against    3 absent


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