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H.B. 397

             1     

PROPERTY TAX INCREASE AMENDMENTS

             2     
2013 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Jim Nielson

             5     
Senate Sponsor: ____________

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill establishes requirements related to an increase in property taxes.
             10      Highlighted Provisions:
             11          This bill:
             12          .    defines terms;
             13          .    requires an opinion question vote, which meets certain requirements, prior to certain
             14      property tax increases by a taxing entity;
             15          .    authorizes a taxing entity to enact certain property tax increases if a majority of
             16      voters voting on the opinion question approve the property tax increase; and
             17          .    makes technical and conforming changes.
             18      Money Appropriated in this Bill:
             19          None
             20      Other Special Clauses:
             21          This bill takes effect on January 1, 2014.
             22      Utah Code Sections Affected:
             23      AMENDS:
             24          59-2-919, as last amended by Laws of Utah 2010, Chapter 90
             25      ENACTS:
             26          59-2-919.3, Utah Code Annotated 1953
             27     


             28      Be it enacted by the Legislature of the state of Utah:
             29          Section 1. Section 59-2-919 is amended to read:
             30           59-2-919. Notice, public hearing, resolution, and voter approval requirements for
             31      certain tax increases -- Exceptions -- Applicability of provisions.
             32          (1) As used in this section:
             33          (a) "Ad valorem tax revenue" means ad valorem property tax revenue not including
             34      revenue from new growth as defined in Section 59-2-924 .
             35          (b) "Calendar year taxing entity" means a taxing entity that operates under a fiscal year
             36      that begins on January 1 and ends on December 31.
             37          (c) "Fiscal year taxing entity" means a taxing entity that operates under a fiscal year
             38      that begins on July 1 and ends on June 30.
             39          (2) (a) A taxing entity may not levy a tax rate that exceeds the taxing entity's certified
             40      tax rate unless the taxing entity:
             41          [(a)] (i) to the extent required by this section, meets the:
             42          [(i)] (A) notice requirements of this section; and
             43          [(ii)] (B) public hearing requirements of this section; and
             44          [(b)] (ii) adopts a resolution in accordance with this section.
             45          (b) A taxing entity may not budget ad valorem property tax revenue that exceeds the
             46      nonvoted property tax revenue limit, as defined in Section 59-2-919.3 , unless the taxing entity
             47      meets the requirements of Section 59-2-919.3 .
             48          (3) (a) Except as provided in Subsection (5), a calendar year taxing entity may levy a
             49      tax rate that exceeds the calendar year taxing entity's certified tax rate if the calendar year
             50      taxing entity:
             51          (i) (A) provides notice by meeting the advertisement requirements of Subsections (6)
             52      and (7) before the calendar year taxing entity conducts the public hearing at which the calendar
             53      year taxing entity's annual budget is adopted; and
             54          (B) before the calendar year taxing entity levies a tax rate that exceeds the calendar
             55      year taxing entity's certified tax rate:
             56          (I) provides notice by meeting the advertisement requirements of Subsections (6) and
             57      (7); or
             58          (II) provides a notice by mail:


             59          (Aa) on or no earlier than 14 days before the date the treasurer furnishes the notice
             60      required by Section 59-2-1317 for the calendar year immediately preceding the calendar year
             61      for which the calendar year taxing entity seeks to levy a tax rate that exceeds the calendar year
             62      taxing entity's certified tax rate;
             63          (Bb) before the calendar year taxing entity conducts the public meeting at which the
             64      calendar year taxing entity's annual budget is adopted; and
             65          (Cc) as provided in Subsection (3)(b); and
             66          (ii) conducts a public hearing in accordance with Subsections (8) and (9):
             67          (A) on or before the calendar year taxing entity conducts the public meeting at which
             68      the calendar year taxing entity's annual budget is adopted; and
             69          (B) if the calendar year taxing entity provides the notice described in Subsection
             70      (3)(a)(i)(B)(I), before the calendar year taxing entity levies a tax rate that exceeds the calendar
             71      year taxing entity's certified tax rate.
             72          (b) For a calendar year taxing entity that provides the notice described in Subsection
             73      (3)(a)(i)(B)(II), the notice:
             74          (i) shall be mailed to each owner of property:
             75          (A) within the calendar year taxing entity; and
             76          (B) listed on the assessment roll;
             77          (ii) shall be printed on a form:
             78          (A) developed by the commission; and
             79          (B) that, as determined by the commission, may be combined with:
             80          (I) a notice described in Subsection (3)(a)(i)(B)(II) provided by one or more other
             81      calendar year taxing entities; or
             82          (II) the notice required by Section 59-2-1317 ;
             83          (iii) shall contain for each property described in Subsection (3)(b)(i):
             84          (A) the value of the property for the calendar year immediately preceding the calendar
             85      year for which the calendar year taxing entity seeks to levy a tax rate that exceeds the calendar
             86      year taxing entity's certified tax rate;
             87          (B) the tax on the property for the calendar year immediately preceding the calendar
             88      year for which the calendar year taxing entity seeks to levy a tax rate that exceeds the calendar
             89      year taxing entity's certified tax rate; and


             90          (C) the estimated tax on the property:
             91          (I) for the calendar year for which the calendar year taxing entity seeks to levy a tax
             92      rate that exceeds the calendar year taxing entity's certified tax rate; and
             93          (II) calculated on the basis of data for the calendar year immediately preceding the
             94      calendar year for which the calendar year taxing entity seeks to levy a tax rate that exceeds the
             95      calendar year taxing entity's certified tax rate;
             96          (iv) shall contain the following statement:
             97          "[Insert name of taxing entity] is proposing a tax increase for [insert applicable calendar
             98      year]. This notice contains estimates of the tax on your property and the proposed tax increase
             99      on your property as a result of this tax increase. These estimates are calculated on the basis of
             100      [insert previous applicable calendar year] data. The actual tax on your property and proposed
             101      tax increase on your property may vary from this estimate.";
             102          (v) shall state the date, time, and place of the public hearing that will be held to discuss
             103      the calendar year taxing entity's annual budget; and
             104          (vi) may contain other property tax information approved by the commission.
             105          (4) Except as provided in Subsection (5), a fiscal year taxing entity may levy a tax rate
             106      that exceeds the fiscal year taxing entity's certified tax rate if the fiscal year taxing entity:
             107          (a) provides notice by meeting the advertisement requirements of Subsections (6) and
             108      (7) before the fiscal year taxing entity conducts the public meeting at which the fiscal year
             109      taxing entity's annual budget is adopted; and
             110          (b) conducts a public hearing in accordance with Subsections (8) and (9) before the
             111      fiscal year taxing entity's annual budget is adopted.
             112          (5) (a) A taxing entity is not required to meet the notice or public hearing requirements
             113      of Subsection (3) or (4) if the taxing entity is expressly exempted by law from complying with
             114      the requirements of this section.
             115          (b) (i) Except as provided in Subsection (5)(b)(ii), a taxing entity is not required to
             116      meet the notice or public hearing requirements of Subsection (3) or (4) if:
             117          (A) the taxing entity is a party to an interlocal agreement under Title 11, Chapter 13,
             118      Interlocal Cooperation Act, that creates an interlocal entity to provide fire protection,
             119      emergency, and emergency medical services;
             120          (B) the tax rate increase is approved by the taxing entity's voters at an election held for


             121      that purpose on or before December 31, 2010;
             122          (C) the purpose of the tax rate increase is to pay for fire protection, emergency, and
             123      emergency medical services provided by the interlocal entity; and
             124          (D) at least 30 days before the taxing entity's annual budget hearing, the taxing entity:
             125          (I) adopts a resolution certifying that:
             126          (Aa) the taxing entity will dedicate all revenue from the tax rate increase exclusively to
             127      pay for fire protection, emergency, and emergency medical services provided by the interlocal
             128      entity; and
             129          (Bb) the amount of other revenues, independent of the revenue generated from the tax
             130      rate increase, that the taxing entity spends for fire protection, emergency, and emergency
             131      medical services each year after the tax rate increase will not decrease below the amount spent
             132      by the taxing entity during the year immediately before the tax rate increase without a
             133      corresponding decrease in the taxing entity's property tax revenues used in calculating the
             134      taxing entity's certified tax rate; and
             135          (II) sends a copy of the resolution to the commission.
             136          (ii) The exception under Subsection (5)(b)(i) from the notice and public hearing
             137      requirements of Subsection (3) or (4) does not apply to an increase in a taxing entity's tax rate
             138      that occurs after December 31, 2010, even if the tax rate increase is approved by the taxing
             139      entity's voters before that date.
             140          (c) A taxing entity is not required to meet the notice requirements of Subsection (3) or
             141      (4) if:
             142          (i) Section 53A-17a-133 allows the taxing entity to levy a tax rate that exceeds that
             143      certified tax rate without having to comply with the notice provisions of this section; or
             144          (ii) the taxing entity:
             145          (A) budgeted less than $20,000 in ad valorem tax revenues for the previous fiscal year;
             146      and
             147          (B) sets a budget during the current fiscal year of less than $20,000 of ad valorem tax
             148      revenues.
             149          (6) (a) Subject to Subsections (6)(d) and (7)(b), the advertisement described in this
             150      section shall be published:
             151          (i) subject to Section 45-1-101 , in a newspaper or combination of newspapers of


             152      general circulation in the taxing entity;
             153          (ii) electronically in accordance with Section 45-1-101 ; and
             154          (iii) on the Utah Public Notice Website created in Section 63F-1-701 .
             155          (b) The advertisement described in Subsection (6)(a)(i) shall:
             156          (i) be no less than 1/4 page in size;
             157          (ii) use type no smaller than 18 point; and
             158          (iii) be surrounded by a 1/4-inch border.
             159          (c) The advertisement described in Subsection (6)(a)(i) may not be placed in that
             160      portion of the newspaper where legal notices and classified advertisements appear.
             161          (d) It is the intent of the Legislature that:
             162          (i) whenever possible, the advertisement described in Subsection (6)(a)(i) appear in a
             163      newspaper that is published at least one day per week; and
             164          (ii) the newspaper or combination of newspapers selected:
             165          (A) be of general interest and readership in the taxing entity; and
             166          (B) not be of limited subject matter.
             167          (e) (i) The advertisement:
             168          (A) described in Subsection (6)(a)(i) shall:
             169          (I) except as provided in Subsection (6)(e)(ii), be run once each week for the two
             170      weeks:
             171          (Aa) before a taxing entity conducts a public hearing at which the taxing entity's annual
             172      budget is discussed; and
             173          (Bb) if a calendar year taxing entity provides the notice described in Subsection
             174      (3)(a)(i)(B)(I), before the calendar year taxing entity levies a tax rate that exceeds the calendar
             175      year taxing entity's certified tax rate; and
             176          (II) state that the taxing entity will meet on a certain day, time, and place fixed in the
             177      advertisement, which shall be not less than seven days after the day the first advertisement is
             178      published, for the purpose of hearing comments regarding any proposed increase and to explain
             179      the reasons for the proposed increase; or
             180          (B) described in Subsection (6)(a)(ii) shall:
             181          (I) be published two weeks:
             182          (Aa) before a taxing entity conducts a public hearing at which the taxing entity's annual


             183      budget is discussed; and
             184          (Bb) if a calendar year taxing entity provides the notice described in Subsection
             185      (3)(a)(i)(B)(I), before the calendar year taxing entity levies a tax rate that exceeds the calendar
             186      year taxing entity's certified tax rate; and
             187          (II) state that the taxing entity will meet on a certain day, time, and place fixed in the
             188      advertisement, which shall be not less than seven days after the day the first advertisement is
             189      published, for the purpose of hearing comments regarding any proposed increase and to explain
             190      the reasons for the proposed increase.
             191          (ii) If a taxing entity's public hearing information is published by the county auditor in
             192      accordance with Section 59-2-919.2 , the taxing entity is not subject to the requirement to run
             193      the advertisement twice, as required by Subsection (6)(e)(i)(A), but shall run the advertisement
             194      once during the week:
             195          (A) before the taxing entity conducts a public hearing at which the taxing entity's
             196      annual budget is discussed; and
             197          (B) if a calendar year taxing entity provides the notice described in Subsection
             198      (3)(a)(i)(B)(I), before the calendar year taxing entity levies a tax rate that exceeds the calendar
             199      year taxing entity's certified tax rate.
             200          (f) (i) For purposes of Subsection (3)(a)(i)(A) or (4)(a), the form and content of an
             201      advertisement shall be substantially as follows:
             202     
"NOTICE OF PROPOSED TAX INCREASE

             203     
(NAME OF TAXING ENTITY)

             204          The (name of the taxing entity) is proposing to increase its property tax revenue.
             205          *    The (name of the taxing entity) tax on a (insert the average value of a residence
             206      in the taxing entity rounded to the nearest thousand dollars) residence would
             207      increase from $______ to $________, which is $_______ per year.
             208          *    The (name of the taxing entity) tax on a (insert the value of a business having
             209      the same value as the average value of a residence in the taxing entity) business
             210      would increase from $________ to $_______, which is $______ per year.
             211          *    If the proposed budget is approved, (name of the taxing entity) would increase
             212      its property tax budgeted revenue by ___% above last year's property tax
             213      budgeted revenue excluding new growth.


             214          All concerned citizens are invited to a public hearing on the tax increase.
             215     
PUBLIC HEARING

             216          Date/Time:    (date) (time)
             217          Location:    (name of meeting place and address of meeting place)
             218          To obtain more information regarding the tax increase, citizens may contact the (name
             219      of the taxing entity) at (phone number of taxing entity)."
             220          (ii) For purposes of Subsection (3)(a)(i)(B)(I), the form and content of an
             221      advertisement shall be substantially as follows:
             222     
"NOTICE OF PROPOSED TAX INCREASE

             223     
(NAME OF TAXING ENTITY)

             224          The (name of the taxing entity) is proposing to increase its property tax revenue.
             225          *    The (name of the taxing entity) tax on a (insert the average value of a residence
             226      in the taxing entity rounded to the nearest thousand dollars) residence would
             227      increase from $______ to $________, which is $_______ per year.
             228          *    The (name of the taxing entity) tax on a (insert the value of a business having
             229      the same value as the average value of a residence in the taxing entity) business
             230      would increase from $________ to $_______, which is $______ per year.
             231          *    If the proposed budget is approved, (name of the taxing entity) would increase
             232      its property tax budgeted revenue by ___% above last year's property tax
             233      budgeted revenue excluding new growth.
             234          (Name of taxing entity) property tax revenue from new growth and other sources will
             235      increase from $_______________ to $______________.
             236          All concerned citizens are invited to a public hearing on the tax increase.
             237     
PUBLIC HEARING

             238          Date/Time:    (date) (time)
             239          Location:    (name of meeting place and address of meeting place)
             240          To obtain more information regarding the tax increase, citizens may contact the (name
             241      of the taxing entity) at (phone number of taxing entity)."
             242          (7) The commission:
             243          (a) shall adopt rules in accordance with Title 63G, Chapter 3, Utah Administrative
             244      Rulemaking Act, governing the joint use of one advertisement described in Subsection (6) by


             245      two or more taxing entities; and
             246          (b) subject to Section 45-1-101 , may authorize:
             247          (i) the use of a weekly newspaper:
             248          (A) in a county having both daily and weekly newspapers if the weekly newspaper
             249      would provide equal or greater notice to the taxpayer; and
             250          (B) if the county petitions the commission for the use of the weekly newspaper; or
             251          (ii) the use by a taxing entity except for a calendar year taxing entity that provides the
             252      notice described in Subsection (3)(a)(i)(B)(II) of a commission approved direct notice to each
             253      taxpayer if:
             254          (A) the cost of the advertisement would cause undue hardship;
             255          (B) the direct notice is different and separate from that provided for in Section
             256      59-2-919.1 ; and
             257          (C) the taxing entity petitions the commission for the use of a commission approved
             258      direct notice.
             259          (8) (a) (i) A taxing entity shall on or before March 1 notify the county legislative body
             260      in which the taxing entity is located of the date, time, and place of the first public hearing at
             261      which the taxing entity's annual budget will be discussed.
             262          (ii) A county that receives notice from a taxing entity under Subsection (8)(a)(i) shall
             263      include on the notice required by Section 59-2-919.1 the date, time, and place of the public
             264      hearing described in Subsection (8)(a)(i).
             265          (b) (i) A public hearing described in this section shall be open to the public.
             266          (ii) The governing body of a taxing entity conducting a public hearing described in this
             267      section shall provide an interested party desiring to be heard an opportunity to present oral
             268      testimony within reasonable time limits.
             269          (c) (i) Except as provided in Subsection (8)(c)(ii), a taxing entity may not schedule a
             270      public hearing described in this section at the same time as the public hearing of another
             271      overlapping taxing entity in the same county.
             272          (ii) The taxing entities in which the power to set tax levies is vested in the same
             273      governing board or authority may consolidate the public hearings described in this section into
             274      one public hearing.
             275          (d) A county legislative body shall resolve any conflict in public hearing dates and


             276      times after consultation with each affected taxing entity.
             277          (e) A taxing entity shall hold a public hearing described in this section beginning at or
             278      after 6 p.m.
             279          (9) (a) If a taxing entity does not make a final decision on budgeting an increased
             280      amount of ad valorem tax revenue at a public hearing described in this section, the taxing entity
             281      shall announce at that public hearing the scheduled time and place of the next public meeting at
             282      which the taxing entity will consider budgeting the increased amount of ad valorem tax
             283      revenue.
             284          (b) (i) If a calendar year taxing entity that conducts a public hearing in accordance with
             285      Subsection (3)(b)(ii) does not adopt a resolution levying a tax rate on the day of the public
             286      hearing, the taxing entity shall announce at that public hearing the scheduled time and place of
             287      the next public meeting at which the taxing entity will consider adopting a resolution levying
             288      the tax rate.
             289          (ii) If a taxing entity except for a taxing entity described in Subsection (5)(a) or (b) will
             290      consider adopting a resolution levying a tax rate at a day and time that is more than two weeks
             291      after the public hearing described in Subsection 59-2-919.1 (2)(c)(v), the taxing entity shall
             292      meet the notice requirements of Subsection (3)(a)(i)(B)(I).
             293          (10) (a) A taxing entity may adopt a resolution levying a tax rate that exceeds the
             294      taxing entity's certified tax rate if the taxing entity, to the extent required by this section, meets
             295      the:
             296          (i) notice requirements of this section; and
             297          (ii) public hearing requirements of this section.
             298          (b) A public hearing on levying a tax rate that exceeds a taxing entity's certified tax rate
             299      may coincide with a public hearing on the taxing entity's proposed annual budget.
             300          (11) The amendments to this section in Laws of Utah 2009, Chapter 204, apply to:
             301          (a) for a fiscal year taxing entity, the fiscal year that begins on July 1, 2009; or
             302          (b) for a calendar year taxing entity, the fiscal year that begins on January 1, 2010.
             303          Section 2. Section 59-2-919.3 is enacted to read:
             304          59-2-919.3. Definitions -- Property tax revenue increase that exceeds nonvoted
             305      property tax revenue limit -- Opinion question -- Taxing entity authority to impose tax
             306      rate.


             307          (1) As used in this section:
             308          (a) "Ad valorem property tax revenues" is as defined in Section 59-2-924 .
             309          (b) "Certified tax rate" is as defined in Section 59-2-924 .
             310          (c) "Consumer price index" is as described in Section 1(f)(4), Internal Revenue Code,
             311      and defined in Section 1(f)(5), Internal Revenue Code.
             312          (d) "New growth" is as defined in Section 59-2-924 .
             313          (e) "Nonvoted property tax revenue limit" means, for a taxable year, the sum of:
             314          (i) ad valorem property tax revenues budgeted by the taxing entity in the prior year;
             315          (ii) revenue from new growth in the current year; and
             316          (iii) the product of:
             317          (A) the taxing entity's budgeted ad valorem property tax revenues in the prior year; and
             318          (B) the annual percentage change in the consumer price index in the most recent year.
             319          (2) Beginning January 1, 2014, in addition to any other requirements of this part,
             320      before budgeting ad valorem property tax revenues that exceed the nonvoted property tax
             321      revenue limit, a taxing entity shall submit an opinion question to the taxing entity's registered
             322      voters voting on exceeding the nonvoted property tax revenue limit so that each registered
             323      voter has the opportunity to express the registered voter's opinion on whether the taxing entity
             324      should exceed the nonvoted property tax revenue limit.
             325          (3) The opinion question required by this section shall state:
             326          "Shall (insert the name of the taxing entity) be authorized to impose a tax rate that
             327      would result in the collection of increased property tax revenue? If this tax rate is imposed,
             328      property tax revenue for (insert the name of the taxing entity) would increase by (insert
             329      aggregate dollar amount of increase) above the prior year's budgeted property tax revenue.
             330      This increase is (insert aggregate dollar amount of increase) above the nonvoted property tax
             331      revenue limit. The increase would result in a property tax increase of (insert dollar amount of
             332      property tax increase) as compared to last year for a primary residence having an assessed value
             333      of (insert median assessed value of a primary residence within the taxing entity). Revenue
             334      received from this increase will be used for (insert intended use of revenue)."
             335          (4) The election required by this section shall be held at:
             336          (a) a regular general election conducted in accordance with the procedures and
             337      requirements of Title 20A, Election Code, governing regular elections; or


             338          (b) at a municipal general election conducted in accordance with the procedures and
             339      requirements of Section 20A-1-202 .
             340          (5) If a majority of the taxing entity's registered voters voting on exceeding the
             341      nonvoted property tax revenue limit vote in favor of exceeding the nonvoted property tax
             342      revenue limit, the taxing entity may, no later than two years after the date of the canvass of the
             343      election, impose a tax rate up to the tax rate that generates the increase in ad valorem property
             344      tax revenues authorized by the vote.
             345          Section 3. Effective date.
             346          This bill takes effect on January 1, 2014.




Legislative Review Note
    as of 2-22-13 10:13 AM


Office of Legislative Research and General Counsel


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