SB 295: Property Tax Modifications - Utah

Substitute #2 → Enrolled · 5 edits · Mar 27, 2025

MODERATE

This bill modifies Utah's Property Tax Act to allow local taxing entities (like cities and counties) that cut their budgets to temporarily increase them back to previous levels without going through public notice and hearing requirements. It also changes how revenue from a statewide property tax levy is distributed, redirecting funds from a county distribution fund to a trust for property valuation improvements.

Scope change

The bill expands the ability of local governments to adjust budgets without public input during specific financial conditions and alters the destination of funds generated by a statewide property tax levy.

ELIGIBILITY

Taxing entities that reduce their budget below the previous year's amount are now eligible to increase their budget back to the 'base year' level for five years without complying with truth-in-taxation notice and public hearing requirements.

FISCAL

The requirement to set aside 18% of revenue from the statewide multicounty assessing and collecting levy for county distributions through the Property Tax Valuation Fund was removed; these funds are now redirected entirely to the Multicounty Appraisal Trust.

The specific allocation of funds to the Property Tax Valuation Fund for county distributions was repealed, as the revenue is now directed to the Multicounty Appraisal Trust instead.

TIMELINE

The bill includes retrospective operation, meaning the changes to Section 59-2-919 apply retroactively to January 1, 2025, even though the bill itself takes effect on May 7, 2025.

TECHNICAL

Several formatting and citation errors in the original text were corrected, such as removing stray numbers (e.g., '1459-2-919') and fixing line breaks in the section headers.

Introduced → Substitute #1 · 7 edits

MODERATE

This bill modifies Utah's property tax laws by adding a new rule that limits how county assessors can value income-producing properties, allowing a temporary exemption from public notice requirements for specific budget cuts, and redirecting funds from a property tax valuation pool to a multicounty appraisal trust. It also repeals several existing tax credits and changes effective dates for various sections.

Scope change

The bill expands the scope of property tax modifications by introducing a new assessment limitation and adding a new fund (Multicounty Appraisal Trust) while removing the Property Tax Valuation Fund's allocation rules.

REQUIREMENT

Added a new section (59-2-301.10) limiting county assessors from using business income other than rental income when valuing properties using the income approach.

Modified the truth-in-taxation exemption to allow taxing entities that cut their budget below the previous year's revenue to increase their budget up to the base year level without holding public hearings for a five-year period.

FISCAL

Redirected the set-aside amount from the statewide multicounty assessing and collecting levy from the Property Tax Valuation Fund to the new Multicounty Appraisal Trust.

Repealed the requirement that a portion of the multicounty levy be deposited into the Property Tax Valuation Fund.

DEFINITION

Repealed Section 59-2-1603, which governed the allocation and use of funds in the Property Tax Valuation Fund.

TIMELINE

Changed the effective date for the multicounty levy allocation changes to January 1, 2026, while other changes take effect May 7, 2025.

ENFORCEMENT

Added repeals for several existing tax credits related to alternative fuel vehicles and federal earned income tax credit reporting.

Substitute #1 → Substitute #2 · 5 edits

MODERATE

This substitute bill modifies Utah's Property Tax Act by clarifying income-based property valuation rules, creating a budget relief mechanism for taxing entities that cut budgets, and redirecting funds from the Property Tax Valuation Fund to the Multicounty Appraisal Trust. The changes aim to improve property tax fairness, provide flexibility for local governments facing budget shortfalls, and shift funding priorities toward property assessment improvements.

Scope change

The bill's scope remains focused on property tax administration but expands the budget relief provision to allow taxing entities that reduce budgets below prior years to increase budgets up to base year levels without standard notice requirements for a five-year period.

REQUIREMENT

Added a new section limiting county assessors from valuing property using business income unless it represents rental income, preventing double-counting of income in property valuations.

ELIGIBILITY

Added a five-year budget relief provision allowing taxing entities that cut budgets below prior years to increase budgets up to base year levels without complying with standard truth-in-taxation notice and public hearing requirements.

FISCAL

Modified the allocation of multicounty assessing and collecting levy revenue, redirecting the portion previously set aside for the Property Tax Valuation Fund to the Multicounty Appraisal Trust instead.

DEFINITION

Modified definitions in Section 59-2-919 to clarify terms related to tax revenue calculations, including adjustments for eligible new growth and personal property exemptions.

TECHNICAL

Made technical formatting changes to bill text, including renumbering subsections and correcting line breaks in the long title and code sections affected.

Property Tax Modifications

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