1     
TAXING ENTITIES' TAX RATE AMENDMENTS

2     
2016 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Deidre M. Henderson

5     
House Sponsor: ____________

6     

7     LONG TITLE
8     General Description:
9           This bill addresses the process for setting certain property tax rates.
10     Highlighted Provisions:
11          This bill:
12          ▸      describes a circumstance under which a fiscal year taxing entity may not adopt a
13     property tax rate that exceeds the certified tax rate.
14     Money Appropriated in this Bill:
15          None
16     Other Special Clauses:
17          None
18     Utah Code Sections Affected:
19     AMENDS:
20          10-5-112, as last amended by Laws of Utah 1989, Chapter 118
21          10-6-133, as last amended by Laws of Utah 2014, Chapter 176
22          17B-1-1001, as last amended by Laws of Utah 2013, Chapter 415
23          53A-16-106, as last amended by Laws of Utah 2008, Chapters 61, 231, and 236
24     

25     Be it enacted by the Legislature of the state of Utah:
26          Section 1. Section 10-5-112 is amended to read:
27          10-5-112. Property tax levy set by ordinance -- Maximum -- Certification.
28          [(1) Not later than June 22 of each year, or August 17 in the case of a property tax
29     increase under Sections 59-2-919 through 59-2-923,]
30          (1) As used in this section, "certified tax rate" means the same as that term is defined in
31     Section 59-2-924.
32           (2) (a) Except as provided in Subsection (2)(b), the council, at a regular meeting or
33     special meeting called for that purpose, shall by ordinance or resolution set the [real and
34     personal] property tax levy for town purposes[, but the levy may be set at an appropriate later
35     date with the approval of the State Tax Commission.] by:
36          (i) if the tax rate is not more than the certified tax rate, adopting a final tax rate before
37     June 22 of each year; or
38          (ii) in the case of a tax increase under Sections 59-2-919 through 59-2-923:
39          (A) adopting a proposed tax rate before June 22 of each year; and
40          (B) adopting a final tax rate before August 17 of each year.
41          (b) (i) Subject to Subsection (2)(b)(ii), the council may set the tax levy at an
42     appropriate later date with the approval of the State Tax Commission.
43          (ii) If the council does not adopt a proposed tax rate before June 22, the council may
44     not adopt a rate that exceeds the certified tax rate.
45          [(2)] (3) The combined levies for each town, for all purposes in any year, excluding the
46     retirement of general obligation bonds and the payment of any interest, and taxes expressly
47     authorized by law to be levied in addition, may not exceed .007 per dollar of taxable value of
48     taxable property.
49          [(3)] (4) The town clerk shall certify the ordinance or resolution setting the levy to the
50     county auditor, or auditors, if the town is located in more than one county, not later than June
51     22 of each year.
52          Section 2. Section 10-6-133 is amended to read:
53          10-6-133. Property tax levy -- Time for setting -- Computation of total levy --
54     Apportionment of proceeds -- Maximum levy.
55          [(1) (a) Before June 22 of each year, or August 17 in the case of a property tax rate
56     increase under Sections 59-2-919 through 59-2-923,]
57          (1) As used in this section, "certified tax rate" means the same as that term is defined in
58     Section 59-2-924.
59          (2) (a) Except as provided in Subsection (2)(b), the governing body of each city,
60     [including charter cities,] at a regular meeting or special meeting called for that purpose, shall
61     by ordinance or resolution set the [real and personal] property tax levy for various municipal
62     purposes[.] by:
63          (i) if the tax rate is not more than the certified tax rate, adopting a final tax rate before
64     June 22 of each year; or
65          (ii) in the case of a tax increase under Sections 59-2-919 through 59-2-923:
66          (A) adopting a proposed tax rate before June 22 of each year; and
67          (B) adopting a final tax rate before August 17 of each year.
68          [(b) Notwithstanding Subsection (1)(a)]
69          (b) (i) Subject to Subsection (2)(b)(ii) , the governing body may set the levy at an
70     appropriate later date with the approval of the State Tax Commission.
71          (ii) If the governing body of a city does not adopt a proposed tax rate before June 22,
72     the governing body may not adopt a rate that exceeds the certified tax rate.
73          [(2)] (3) In its computation of the total levy, the governing body shall determine the
74     requirements of each fund for which property taxes are to be levied and shall specify in its
75     ordinance or resolution adopting the levy the amount apportioned to each fund.
76          [(3)] (4) The proceeds of the levy apportioned for city general fund purposes shall be
77     credited as revenue in the city general fund.
78          [(4)] (5) The proceeds of the levy apportioned for special fund purposes shall be
79     credited to the appropriate accounts in the applicable special funds.
80          [(5)] (6) The combined levies for each city, [including charter cities,] for all purposes
81     in any year, excluding the retirement of general obligation bonds and the payment of any
82     interest, and taxes expressly authorized by law to be levied in addition, may not exceed .007
83     per dollar of taxable value of taxable property.
84          Section 3. Section 17B-1-1001 is amended to read:
85          17B-1-1001. Provisions applicable to property tax levy.
86          [(1) Each local district that levies and collects property taxes shall levy and collect
87     them according to the provisions of Title 59, Chapter 2, Property Tax Act.]
88          [(2)] (1) As used in this section, "elected official" means a local district board of
89     trustees member who:
90          (a) is elected to the board of trustees by local district voters at an election held for that
91     purpose, including a member elected under Subsection (4);
92          (b) holds, at the time of appointment to the board of trustees, an elected position with a
93     municipality, county, or another local district that is partially or completely included within the
94     boundaries of the local district;
95          (c) is appointed in accordance with Subsection 17B-1-303(5) or 17B-1-306(4)(f); or
96          (d) is considered to be elected in accordance with Subsection 17B-1-306(4)(g).
97          (2) Each local district that levies and collects property taxes shall levy and collect the
98     property taxes according to the provisions of Title 59, Chapter 2, Property Tax Act.
99          (3) (a) Except as provided in [Subsection] Subsections (3)(b) and (c), a local district
100     may not levy or collect property tax revenue at a rate that exceeds the certified tax rate during a
101     taxable year that begins on or after January 1, 2011.
102          (b) [Notwithstanding Subsection (3)(a), a] A local district may levy or collect property
103     tax revenue at a rate that exceeds the certified tax rate during a taxable year that begins on or
104     after January 1, 2011, if:
105          (i) [and] to the extent that the revenue from the property tax was pledged before
106     January 1, 2011, [to pay] the revenue pays for bonds or other obligations of the local district;
107          (ii) the members of the board of trustees are all elected officials;
108          (iii) the majority of the board of trustees are elected officials; or
109          (iv) the proposed tax or increase in the property tax rate has been approved by:
110          (A) a majority of the registered voters within the local district at an election held for
111     that purpose on a date specified in Section 20A-1-204;
112          (B) the legislative body of the appointing authority; or
113          (C) the legislative body of:
114          (I) a majority of the municipalities partially or completely included within the
115     boundary of the specified local district; or
116          (II) the county in which the specified local district is located, if the county has some or
117     all of its unincorporated area included within the boundary of the specified local district.
118          (c) In addition to the criteria described in Subsection (3)(b), for a local district to levy
119     or collect property tax revenue at a rate that exceeds the certified tax rate, a local district that is
120     a fiscal year taxing entity shall adopt a proposed property tax rate before June 22 of each year.
121          (4) (a) Notwithstanding provisions to the contrary in Title 17B, Chapter 2a, Provisions
122     Applicable to Different Types of Local Districts, and for purposes of Subsection (3)(b),
123     members of the board of trustees of a local district shall be elected, if, subject to Subsection
124     (4)(b):
125          (i) two-thirds of all members of the board of trustees of the local district vote in favor
126     of changing to an elected board; and
127          (ii) the legislative body of each municipality or county that appoints a member to the
128     board of trustees adopts a resolution approving the change to an elected board.
129          (b) A change to an elected board of trustees under Subsection (4)(a) may not shorten
130     the term of any member of the board of trustees serving at the time of the change.
131          (5) Subsections (2), (3), and (4) do not apply to:
132          (a) Title 17B, Chapter 2a, Part 6, Metropolitan Water District Act;
133          (b) Title 17B, Chapter 2a, Part 10, Water Conservancy District Act; or
134          (c) a local district in which:
135          (i) the board of trustees consists solely of:
136          (A) land owners or the land owners' agents; or
137          (B) as described in Subsection 17B-1-302(1)(c), land owners or the land owners' agents
138     or officers; and
139          (ii) there are no residents within the local district at the time a property tax is levied.
140          Section 4. Section 53A-16-106 is amended to read:
141          53A-16-106. Annual certification of tax rate proposed by local school board --
142     Inclusion of school district budget -- Modified filing date.
143          (1) As used in this section, "certified tax rate" means the same as that term is defined in
144     Section 59-2-924.
145          [(1) Prior to] (2) (a) Before June 22 of each year, each local school board shall certify
146     to the county legislative body in which the district is located, on forms prescribed by the State
147     Tax Commission, the proposed tax rate approved by the local school board.
148          (b) In the case of a tax increase, if the local school board fails to approve a proposed
149     tax rate increase before June 22, the local board may not adopt a tax rate that exceeds the
150     certified tax rate.
151          [(2)] (3) A copy of the district's budget, including items under Section 53A-19-101,
152     and a certified copy of the local school board's resolution [which] that approved the budget and
153     set the tax rate for the subsequent school year beginning July 1 shall accompany the tax rate.
154          [(3)] (4) If the tax rate approved by the board is in excess of the ["certified tax rate" as
155     defined under Subsection 59-2-924(3)(a)] certified tax rate , the date for filing the tax rate and
156     budget adopted by the board shall be that established under [Section 59-2-919] Sections
157     53A-19-102 and 59-2-912.




Legislative Review Note
Office of Legislative Research and General Counsel