Senator Lincoln Fillmore proposes the following substitute bill:


1     
LOCAL DISTRICT REVISIONS

2     
2017 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Lincoln Fillmore

5     
House Sponsor: Steve Eliason

6     Cosponsors:
7     Curtis S. Bramble
Howard A. Stephenson

8     

9     LONG TITLE
10     General Description:
11          This bill modifies provisions related to property taxes levied by a local district.
12     Highlighted Provisions:
13          This bill:
14          ▸     defines terms;
15          ▸     modifies the circumstances under which a local district may levy or collect a
16     property tax that exceeds the certified tax rate;
17          ▸     imposes requirements for a member of an appointed board of trustees to report the
18     property tax increase to the legislative body that appointed or nominated the
19     member to the board of trustees; and
20          ▸     makes technical and conforming changes.
21     Money Appropriated in this Bill:
22          None
23     Other Special Clauses:
24          This bill provides a special effective date.
25     Utah Code Sections Affected:
26     AMENDS:
27          17B-1-1001, as last amended by Laws of Utah 2013, Chapter 415
28          17B-2a-1009, as last amended by Laws of Utah 2013, Chapter 415
29     ENACTS:
30          17B-1-1003, Utah Code Annotated 1953
31     

32     Be it enacted by the Legislature of the state of Utah:
33          Section 1. Section 17B-1-1001 is amended to read:
34          17B-1-1001. Provisions applicable to property tax levy.
35          (1) Each local district that levies and collects property taxes shall levy and collect them
36     according to the provisions of Title 59, Chapter 2, Property Tax Act.
37          (2) As used in this section[, "elected official" means a local district board of trustees
38     member who]:
39          [(a) is elected to the board of trustees by local district voters at an election held for that
40     purpose, including a member elected under Subsection (4);]
41          [(b) holds, at the time of appointment to the board of trustees, an elected position with
42     a municipality, county, or another local district that is partially or completely included within
43     the boundaries of the local district;]
44          [(c) is appointed in accordance with Subsection 17B-1-303(5) or 17B-1-306(4)(f); or]
45          [(d) is considered to be elected in accordance with Subsection 17B-1-306(4)(g).]
46          (a) "Appointed board of trustees" means a board of trustees of a local district that
47     includes a member who is appointed to the board of trustees in accordance with Section
48     17B-1-304, Subsection 17B-1-303(5), Subsection 17B-1-306(4)(f), or any of the applicable
49     provisions in Title 17B, Chapter 2a, Provisions Applicable to Different Types of Local
50     Districts.
51          (b) "Elected board of trustees" means a board of trustees of a local district that consists
52     entirely of members who are elected to the board of trustees in accordance with Subsection (4),
53     Section 17B-1-306, or any of the applicable provisions in Title 17B, Chapter 2a, Provisions
54     Applicable to Different Types of Local Districts.
55          [(3) (a) Except as provided in Subsection (3)(b), a local district may not levy or collect
56     property tax revenue that exceeds the certified tax rate during a taxable year that begins on or
57     after January 1, 2011.]
58          [(b)] (3) (a) [Notwithstanding Subsection (3)(a)] For a taxable year beginning on or
59     after January 1, 2018, a local district may not levy or collect property tax revenue that exceeds
60     the certified tax rate [during a taxable year that begins on or after January 1, 2011, if] unless:
61          (i) [and] to the extent that the revenue from the property tax was pledged before
62     January 1, [2011,] 2018, the local district pledges the property tax revenue to pay for bonds or
63     other obligations of the local district; or
64          [(ii) the members of the board of trustees are all elected officials;]
65          [(iii) the majority of the board of trustees are elected officials; or]
66          [(iv)] (ii) the proposed tax or increase in the property tax rate has been approved by:
67          (A) an elected board of trustees;
68          (B) subject to Subsection (3)(b), an appointed board of trustees;
69          [(A)] (C) a majority of the registered voters within the local district [at] who vote in an
70     election held for that purpose on a date specified in Section 20A-1-204;
71          [(B)] (D) the legislative body of the appointing authority; or
72          [(C)] (E) the legislative body of:
73          (I) a majority of the municipalities partially or completely included within the
74     boundary of the specified local district; or
75          (II) the county in which the specified local district is located, if the county has some or
76     all of its unincorporated area included within the boundary of the specified local district.
77          (b) For a local district with an appointed board of trustees, each member of the board
78     of trustees shall comply with the trustee reporting requirements described in Section
79     17B-1-1003 before the local district may impose a property tax levy that exceeds the certified
80     tax rate.
81          (4) (a) Notwithstanding provisions to the contrary in Title 17B, Chapter 2a, Provisions
82     Applicable to Different Types of Local Districts, and [for purposes of Subsection (3)(b),]
83     subject to Subsection (4)(b), members of the board of trustees of a local district shall be
84     elected, if[, subject to Subsection (4)(b)]:
85          (i) two-thirds of all members of the board of trustees of the local district vote in favor
86     of changing to an elected board of trustees; and
87          (ii) the legislative body of each municipality or county that appoints a member to the
88     board of trustees adopts a resolution approving the change to an elected board of trustees.
89          (b) A change to an elected board of trustees under Subsection (4)(a) may not shorten
90     the term of any member of the board of trustees serving at the time of the change.
91          (5) Subsections (2), (3), and (4) do not apply to:
92          (a) Title 17B, Chapter 2a, Part 6, Metropolitan Water District Act;
93          (b) Title 17B, Chapter 2a, Part 10, Water Conservancy District Act; or
94          (c) a local district in which:
95          (i) the board of trustees consists solely of:
96          (A) land owners or the land owners' agents; or
97          (B) as described in Subsection 17B-1-302(1)(c), land owners or the land owners' agents
98     or officers; and
99          (ii) there are no residents within the local district at the time a property tax is levied.
100          Section 2. Section 17B-1-1003 is enacted to read:
101          17B-1-1003. Trustee reporting requirement.
102          (1) As used in this section:
103          (a) "Appointed board of trustees" means a board of trustees of a local district that
104     includes a member who is appointed to the board of trustees in accordance with Section
105     17B-1-304, Subsection 17B-1-303(5), Subsection 17B-1-306(4)(f), or any of the applicable
106     provisions in Title 17B, Chapter 2a, Provisions Applicable to Different Types of Local
107     Districts.
108          (b) "Legislative entity" means:
109          (i) the member's appointing authority, if the appointing authority is a legislative body;
110     or
111          (ii) the member's nominating entity, if the appointing authority is not a legislative body.
112          (c) (i) "Member" means an individual who is appointed to a board of trustees for a
113     local district in accordance with Section 17B-1-304, Subsection 17B-1-303(5), Subsection
114     17B-1-306(4)(f), or any of the applicable provisions in Title 17B, Chapter 2a, Provisions
115     Applicable to Different Types of Local Districts.
116          (ii) "Member" includes a member of the board of trustees who holds an elected
117     position with a municipality, county, or another local district that is partially or completely
118     included within the boundaries of the local district.
119          (d) "Nominating entity" means the legislative body that submits nominees for
120     appointment to the board of trustees to an appointing authority.
121          (e) "Property tax increase" means a property tax levy that exceeds the certified tax rate
122     for the taxable year.
123          (2) (a) If a local district board of trustees adopts a tentative budget that includes a
124     property tax increase, each member shall report to the member's legislative entity on the
125     property tax increase.
126          (b) (i) The local district shall request that each of the legislative entities that appoint or
127     nominate a member to the local district's board of trustees hear the report required by
128     Subsection (2)(a) at a public meeting of each legislative entity.
129          (ii) The request to make a report may be made by:
130          (A) the member appointed or nominated by the legislative entity; or
131          (B) another member of the board of trustees.
132          (c) The member appointed or nominated by the legislative entity shall make the report
133     required by Subsection (2)(a) at a public meeting that:
134          (i) complies with Title 52, Chapter 4, Open and Public Meetings Act;
135          (ii) includes the report as a separate agenda item; and
136          (iii) is held within 30 days after the day on which the legislative entity receives a
137     request to hear the report.
138          (d) (i) If the legislative entity does not have a scheduled meeting within 30 days after
139     the day on which the legislative entity receives a request to hear the report required by
140     Subsection (2)(a), the legislative entity shall schedule a meeting for that purpose.
141          (ii) If the legislative entity fails to hear the report at a public meeting that meets the
142     criteria described in Subsection (2)(c), the trustee reporting requirements under this section
143     shall be considered satisfied.
144          (3) (a) A report on a property tax increase at a legislative entity's public meeting shall
145     include:
146          (i) a statement that the local district intends to levy a property tax at a rate that exceeds
147     the certified tax rate for the taxable year;
148          (ii) the dollar amount of and purpose for additional ad valorem tax revenue that would
149     be generated by the proposed increase in the certified tax rate;
150          (iii) the approximate percentage increase in ad valorem tax revenue for the local
151     district based on the proposed property tax increase; and
152          (iv) any other information requested by the legislative entity.
153          (b) The legislative entity shall allow time during the meeting for comment from the
154     legislative entity and members of the public on the property tax increase.
155          (4) (a) If more than one member is appointed to the board of trustees by the same
156     legislative entity, a majority of the members appointed or nominated by the legislative entity
157     shall be present to provide the report required by Subsection (2) and described in Subsection
158     (3).
159          (b) The chair of the board of trustees shall appoint another member of the board of
160     trustees to provide the report described in Subsection (3) to the legislative entity if:
161          (i) the member appointed or nominated by the legislative entity is unable or unwilling
162     to provide the report at a public meeting that meets the requirements of Subsection (3)(a); and
163          (ii) the absence of the member appointed or nominated by the legislative entity results
164     in:
165          (A) no member who was appointed or nominated by the legislative entity being present
166     to provide the report; or
167          (B) an inability to comply with Subsection (4)(a).
168          (5) A local district board of trustees may approve a property tax increase only after the
169     conditions of this section have been satisfied or considered satisfied for each member of the
170     board of trustees.
171          Section 3. Section 17B-2a-1009 is amended to read:
172          17B-2a-1009. Limit on property tax authority -- Exceptions.
173          (1) As used in this section[, "elected official" means a water conservancy district board
174     of trustee member who]:
175          (a) "Appointed board of trustees" means a board of trustees of a water conservancy
176     district that includes a member who is appointed to the board of trustees in accordance with
177     this part.
178          (b) "Elected board of trustees" means a board of trustees of a water conservancy district
179     that consists entirely of members who are elected to the board of trustees in accordance with
180     this part.
181          [(a) is elected to the board of trustees by water conservancy district voters at an
182     election held for that purpose;]
183          [(b) holds, at the time of appointment to the board of trustees, an elected position with
184     a municipality, county, or local district that is partially or completely included within the
185     boundaries of the water conservancy district; or]
186          [(c) is appointed in accordance with Subsection 17B-1-303(5) or 17B-1-306(4)(f) or
187     (g).]
188          (2) (a) [The board of trustees of] For a taxable year beginning on or after January 1,
189     2018, a water conservancy district may not collect property tax revenue [in a tax year beginning
190     on or after January 1, 2015,] that would exceed the certified tax rate under Section 59-2-924
191     unless the proposed tax levy has been previously approved by:
192          [(a) the members of the board of trustees are all elected officials;]
193          [(b) the majority of the board of trustees are elected officials; or]
194          [(c) the proposed tax levy has previously been approved by:]
195          (i) an elected board of trustees;
196          (ii) subject to Subsection (2)(b), an appointed board of trustees;
197          [(i)] (iii) a majority of the water conservancy district voters [at] who vote in an election
198     held for that purpose on a date specified in Section 20A-1-204; or
199          [(ii)] (iv) for a district described in Subsection 17B-2a-1005(2)(b), the appointing
200     authority.
201          (b) For a water conservancy district with an appointed board of trustees, each member
202     of the board of trustees shall comply with the trustee reporting requirements described in
203     Section 17B-1-1003 before the water conservancy district may impose a property tax levy that
204     exceeds the certified tax rate.
205          Section 4. Effective date.
206          This bill takes effect on January 1, 2018.