H.B. 365 Taxation Notification Requirements: transcript

Thank you. I, I'm assuming that everybody that came to support me on this bill just went out for a bathroom break after that long discussion, so I'm guessing they'll be right back. Um, just kidding. This bill, um, HP 365 is just a requirement for cities, counties, school districts that if they plan on doing a tax increase, uh, all it does is require them to notify the public of that intended tax, uh, increase, uh, by April 1st. And, uh, Representative Peterson has a bill, um, that, that moves up a date similar to this one. But having been spent nine years on a city council, I don't think it moves it up far enough to engage the public in the budget process. So that's why we talked about it. She is running her bill. I just would like to see an earlier date of April 1st so that the public has time to engage in the process. And the reason I do, I'm doing this bill is, uh, as I sat on the city council for nine years, we got to know our Truth and taxation meeting. And we had spent literally months going through public hearings to discuss budgets. And as we got to August, people came in and said, you're not listening to us. You're not listening to me. And it wasn't that we weren't listening. We had had hard discu discussions. We had, we had tried to find ways to cut the budget. And, uh, the time for public input is not at the truth and taxation meeting. It's during the budget process. So if the intent is to, for a city, county, or a school district to raise taxes, the public should know about it. Um, as they're doing the budget process, uh, I know the cities are gonna come, cities and towns, they, they're not in favor of this bill. Um, but as a former city councilman, I think this helps our city elected officials, um, try to engage the public in the process. And that's the reason I'm running this. So, with that, uh, that concludes my presentation. I'm happy to answer any questions.

I think she wanted to leave her date the same. Um, her date was June 1st. And I think oftentimes it's been my experience that the budget is basically fully cooked by June 1st. So that's why I, I feel like to, to provide, um, opportunities for the public to be involved with the actual budgeting process. It needs to happen earlier. So, uh, we could do a coordinating clause or we could just, uh, decide whether or not I, I, I love everything else Karen's doing in her bill. I just don't feel like it gives the public notification in time, um, to, to be involved with the discussions of, of formulating a budget.

According to the drafting attorneys, the two bills can work. The dates don't necessarily conflict with each other. There's an additional requirement, but we can double check that.

Thank you, Mr. Chair. Billy Hesterman with the Utah Taxpayers Association. We want to thank Representative Peterson for bringing this forward, and we speak in favor of the bill. Uh, i, I do believe what Mr. Stitt said is correct, that this actually would just add another step to the process where represent Representative Corinne Peterson's. Bill puts, you know, a process in place to increase notification. This would just be one more step at the earlier end as a entity wants to go through with a property tax increase. And so while it, uh, might make it a little more burdensome on the entities, I do believe it will increase the, uh, notice and accountability and transparency to the taxpayers that they're able to participate in the process. And because of that, we hope you'll move it forward.

Thank you. My name's Todd Habram, the business administrator for Granite School District, and the legislative liaison for U Asbo. Uh, I also agree with the analysis there. I don't think the two bills will conflict because they actually talk to two different noticing requirements. And that's actually why I am here today. Is the one notice requirement that's due on or before April 1st. Is that a time point? We can't actually identify the revenues that we would be putting into a budget. Uh, the legislative process ends about May, uh, March 6th. We as school districts won't receive that information till about mid-April. So we're, we would be in a guess a guessing mode to try to figure out what those revenues would be to then determine how much, uh, property tax we might need or may not need. So the timing is challenging there for the notice. And so let me talk to the notice part. The notice part requires us to provide the exact same notice that you use for truth and taxation. So you have a specific dollar amount that will impact primary residents, commercial residents, what the dollar, uh, total revenue generation will be. Those aren't knowable that in the month of March. They're just not known. We can guess, but they're not knowable. The bill also then requires that whatever the rate is that we determine for that exercise, that becomes the rate that we have to adopt. Or something less, but not more. So the challenge will be is putting a guest together in March and hoping it's accurate for assessed valuations that will come later in May. Puts us in a really challenging situation. We, we won't be able to budget very well. It almost puts the certified rate process on its head where the certified process is. You determine your revenues, look to see what assessed valuations are, and then determine the rate. This one says, do the rate first. You'll see what assessed valuations are, and then you'll figure out what the revenues are, and they may not match our forecast and could jeopardize budgets and trying to keep them balanced. So I, I agree with notice and having public involved with the process even more, and I, and early April is a great time to talk. The particular notice is of challenge and it locks us into a scenario where we actually have very little budget flexibility. Thank you.

Yeah. Thank, thank you, Mr. Chair. Um, Todd? Yes. Um, Good to see you again. Good appear. So if April 1st is problematic, and I think Representative Corinne Peterson's bill is June 1st. Is there a time in between like, uh, say May 1st that still moves the, the line sum, you know, that would actually allow you to make that better and still accomplish the desire

Uh, so as I understand Representative Corinne Peterson's bill, we have to put a notification out before May 1st, but the notification is what we anticipate the revenue needs to be and the purposes for which those revenues would be used. It's not having us use the truth and taxation notification process that locks in pieces of information at that early date. So the notification, both timing is different, but the vehicle by which it's accomplished is different as well.

Okay. And would this same, in your opinion, would this, if I may Yes, go ahead. Sorry. Would this the, um, same, uh, problem occur in municipalities and other organizations?

There's just specific to a school district. I can't speak to the other organizations, but I think their representatives here.

Well, I'm looking forward to hearing the, the next answer too, but, um, I, I guess I'll put you on the spot. Is there a, speaking of Goldilocks here today, uh, is there a, is there a time that works for you and would work to serve the purposes of this bill?

So we did have those discussions with Representative Corinne Peterson. Uh, she pulled all of the stakeholders together, the assessor, the county assessors, the county clerks, business administrators, uh, folks from cities and towns to try to figure out that calendar. What does the calendar actually look like? And the best that we could come to was that by May 1st we would, uh, put a notice out that we would have a public hearing or a, a public meeting in which the discussion of a potential tax increase would be discussed. That was, that's probably the best thinking out of that group. I don't know that I can improve upon that other than we could have other notices, but we wouldn't have all the details to be able to say, you know, homeowner, this is what this increase would represent on your particular home. 'cause that math isn't available yet. We, we just don't have the, the details to do that. But we can say we're gonna increase revenues for purposes, and we will be able to communicate to you later what that means on your property.

Excellent. Thank you, Mr. Chair. Molly Wheeler with the Utah League of Cities and Towns. Um, so hopefully it can answer your question about how that would impact the municipalities. Uh, we echo, um, a lot of the, uh, concerns mentioned by the last speaker and also do really appreciate what the sponsor's trying to achieve. We are all for making changes, um, through policy education, what have you, that make sure that voters and residents feel like they understand what's happening with their budgets and that they can provide feedback about those municipal budgets, uh, prior to some of those changes going into effect. Um, the limitations with the April 1st, uh, notice and being locked into that notice, uh, presents the same limitations for municipalities. In a lot of ways, cities don't have their feedback about their, uh, growth revenue from property tax by that point. They don't have their sales tax projections by that point. And so being locked into a rate that early, uh, provides us with, with some concern. Um, in statute now, the mayor or the chief kind of budget executive needs to present the tentative budget to the council in early May. And so being locked into that rate so early potentially locks a community into a, into that number before the council has even had time to consider what the potential budget would be. We're happy to have these conversations. We've been working with Representative Corinne Peterson, um, Senator McKay. There's, there's a lot of property tax bills out there this year, and we've been working on all of them. We think we can find solutions about making sure that the public feels like their, uh, input is heard and considered, and that they know what's going on, and we're committed to continuing to work with the sponsor. To that end,

Yeah. Thank you, Mr. Chair. Uh, so kinda similar to the question that was asked before, would May 1st, uh, date, would that work better, or is, or do you feel like what you've negotiated with Representative Corinne Peterson, is that probably the be earliest date, or can you go earlier than that?

That's a good question. So I'm gonna, I'm gonna pull the Dave Davis line from earlier, which is, I am not in a position to speak on behalf of all of our cities on that right now. I think having some flexibility in starting the conversation of, Hey, we think we're going to need to go through truth and taxation earlier, I think that could entertain an earlier date being locked into whatever you say, I think is what gives us some pause. And so saying, you know, we're gonna start this conversation earlier. Um, I think there's space there, but saying we are locked into this number on April 1st, um, is not workable for us right now. And I, I can't say for certain what that Goldilock state would be, but I we're very happy to continue to work on how we notice, how we determine rates and, and what that, uh, Fair place might be.

I'd like to reserve the right to make a motion, if I may. It's an order. Yep. Um, so I'd like to speak to the bill sponsor. So it sounds like, based on what we've heard from testimony, that potentially the earliest we can possibly do this to really accomplish the goal is first to mid-May. Um, representative Corinne Peterson, there's already the 1st of June, kind of gimme a fill, if it's okay. Um, is that still significant to give an extra two to three, maybe even four weeks, or where, where are you at right now with, with what you've heard?

May I respond, Mr. Chair? Yes. Thank you. Um, so fir first of all, I, I want to address what Corinne representative Corinne Peterson's bill says, uh, on line 3 26, it says on, or they, they must do this notice on or after May 1st, but on or before June 8th. So, knowing what I know that's going to happen on June 7th or June 8th. Um, so I, the testimony was given that it will happen on the 1st of May, but it, it's not going to happen. Um, it's not going to happen on the 1st of May. So I, which means it's much later than April. Um, which means the budgeting processes are primarily done, um, by the 1st of June, and we ha the city has to have an operating budget by the 1st of July. So to have that approved, you have to do it in the third, most city council meetings are on the third week of, of the month. So you have to have a approved budget by the second week, third week of June. Um, so I, and that's where I just couldn't get on board with, with this. Um, I, I firmly believe elected officials do everything they can to provide what they need to, to the public. The other thing I'd speak to is, having been on a city council for nine years, you have a really good idea. You may not have everything, but you have a really good idea of what those numbers are gonna come in at. The other thing that I would say is, and it was spoke to by the gentleman from Granite School District, is we, we primarily know where those numbers are. And it's not to exceed, it doesn't say that you don't, you can't, you're not, we're not locking you in at that rate. It's just a not to exceed amount. So it, it's really just my, my goal here is, is to help elected officials have some cover for when the Truth in Taxation meeting comes in in August and everybody comes in very upset that they will have been able to say in April, listen, we, we told you we were gonna do this, we invited you to our budget hearings, and nobody showed up. So I, I do, I don't agree. And, and if, if this isn't acceptable, I understand, but I, I think it would be in the best interest of everyone involved.

Okay. Thank you for that explanation. So, I'm gonna admit something right here. I'm, I'm still a little bit confused on all of these dates. Uh, just on a personal level, maybe you all caught all that. Um, my, my motion I'm gonna go ahead and make would be to hold, and the reason why, 'cause I, I love what you're saying. I love the idea of, of disclosure and, and, and giving the public time to be able to have, you know, comment and so forth. But, but I, for my sake, I'd like to know these dates a little bit better, because if it's only gonna buy us a few weeks, I don't, I don't know how significant that is, but I'd, I'd love to have better chance to do that. And I apologize that we didn't have a chance to talk about that, but that would be my motion would just, just so that from a personal perspective, I could know better what these dates really look like and how it does affect the different, the district, cities and so forth, and then be able to make a better decision. So that's my motion.

Okay. Then I will make a motion that we, uh, adopt amendment number one to hb, what is it? Uh, 3, 3, 6, 5.

No, I would not. Okay. All right. Uh, to the sponsor,

Yeah. Yeah. Thanks. My button is pushed that time. Okay. So I'm kind of in favor of the motion to hold, but I think, let me just, I was a little confused. There's, there's a date to that you're committed, but there's a date before that to make an announcement, I guess is, uh, and, uh, and I, I was thinking from the conversation, it sounded like we could have an early date to say, this is what we intend to do, but then a little later date to make an announcement or to make a commitment on the budget. And so I'm a little confused on that, but I would like to discuss that a little bit more and see if there's something maybe in between. I don't know.

Yes. Mr. Chair? Um, I would just like to speak, um, against the motion to hold. I think that the good sponsors, I think he's right. I think he, I think that if we want our citizens to be able to participate sooner, then they need more notice. And I would like to see the bill move forward. So I would resist the motion to hold.

Yeah. So is there a way

Is there a way that we can just, uh, move this to a conference, uh, meeting between the two Petersons?

I'd like to move, uh, move that we pass out HB 365, uh, as amended from the committee with a favorable recommendation.

You. Yeah. I'm, I'm gonna vote for this, but I, I just wanna get on record that will you please work with Corinne and myself? I, I'd like to get clear the, the, the dates so that I understand this a little bit better. If you're willing to do that, I'm happy to vote for it so that it can move along in the process. But I just wanna make sure we're not hand tying some of these municipalities and entities unintentionally. Okay.

Yes. I'll be speaking to the first sub. Okay, go ahead. Thank you, Mr. Chairman, members of the committee. Uh, what this bill does is it, uh, just requires that if a, if a taxing entity or a city in this case wants to increase taxes, they have to notice the public, um, in advance of their meeting where the, uh, administrative body will be presenting their budget to the, um, council for, um, budget presentation. And for them to take over the budget. It has certain requirements on where they have to post it. And, um, just trying to get word out when an taxing entity wants to increase the tax rate above and beyond what should be theirs based on the, the previous year that they will, uh, have to do, take certain steps to notify the public.

that were in the original bill. Yeah, So we've been working with the League of Cities and Towns to try to meet some of their noticing requirements. We also did not want to take away the authority of a council to increase the budget above that, which was presented, um, by the mayor or the financial officer of, of a city. So we worked with the league and we eliminated some of the existing language that was in there to try to give the actual policy body, uh, not tie their hands in future budget decisions.

Yes. Okay. Thank you. Alright.

Thank you, Mr. Chair. Yeah, I, I, uh, haven't had a, a lot of time to review this. Obviously, I've, I've, I've run a bill three straight years on through the taxation. Uh, do you know if you've changed any, any code present day code or past, or where, where did these, um, recommendations come from on this bill?

Um, so the recommendations come from me, um, but the, the recommendations that are in the sub are from the League of Cities and Towns. Um, I, I would've liked to have seen the notice requirement to be April 1st so that the, the public could be involved with the budgeting process. Um, but there were some issues with doing it that early, uh, as well as, uh, I had a not to exceed in the original bill. Um, but that would tie the hands of the elected body of the city council, school boards, county commissions. And it is the intent of our intent to expand this legislation to all taxing entities. Right now, the language we have is strictly for cities. Um, but the goal is to make the public aware of the tax increase prior to the truth in taxation meeting so that they don't come to that meeting and say, we're not being heard. They're involved with the budget hearings or at least notified of the budget hearings and the intent to raise property taxes.

So, so basically this, this bill has more to do with the, the budget, uh, process than really to the taxation or anything. Yeah, I, I'm a, I was a little leery, um, but, um, um, I'll just take a look. Quick look at the, uh, uh, you, you said the first sub? Yes. Okay. I'll, I'll take a look at that while you continue. Thank you. Appreciate it. Thank You. Okay.

Have a question, Mr. Chair.

Thank you, Mr. Chair. I'm sorry. We're trying to be in multiple committees. Um, so I just wanna make sure we're consistent on policy because this is only applies to the, to cities. Correct. Uh, from what I heard from the good sponsor and, um, you know, we've Senator, um, weer had a bill that unfortunately didn't make it out of committee yesterday with regards to also notification of 48 hours versus 24. I mean, I'm sorry, 20, um, do extra, you know, days for notification. And part of what the conversation has been is that is not for everyone. So is the sponsor planning to have this expand to every, um, government entity at one point? Or is it just because it's, you know, if we are gonna do it, let's do it for everyone. As a matter of consistency.

Yes, it will. Uh, the, the intent is, and the drafting attorney is working on it right now, we just didn't have it ready for this, that we will have it apply to school districts, any taxing entities, school districts, as well as, um, uh, counties.

Thank you. Thank you, Mr. Chair. Thank

Yes. Um, a motion that we delete body and title HB 365 and replace it with first substitute house bill 365. Discussion. That motion. Seeing none.

Thank you Mr. Chair. Members of the committee, um, Carson Iers with the Utah Utah League of Cities and Towns we're extremely grateful for the sponsor having worked with us on this bill. Um, there was a couple concerns. We, we appreciate his, uh, his concern about the public not having enough notice before a, a truth and taxation hearing or understanding of the budget's increasing. Uh, we had asked for that date to be pushed back a little bit just because we won't know our new growth numbers and may not even know our full prior year numbers by April. So it just wouldn't give us an accurate, um, understanding of what our budget might look like, and we wouldn't necessarily be able to have good information to convey to the public. Um, likewise, sometimes there's costs that may incur, um, at between April and, uh, when we actually go through truth and taxation and we don't want to set up, um, either create a scenario where the public is being told that we will need to go through truth and taxation, truth and taxation hearing when we may not actually. Um, so, um, we didn't wanna set a, a cap beforehand before we actually knew what our, our numbers were. So we appreciate the sponsor working with us and, um, we've addressed our concerns, so we encourage you to support the bill. Thank you.

Uh, Billy Hesterman, again with the Utah Taxpayers Association. I wanna speak in favor of the legislation. I really appreciate what Representative Peterson is doing here to encourage more involvement with this, the, uh, fiscal year taxing entities. So I believe this will address the city's, the school districts and the special service districts that run on that, uh, July one to June 30th, uh, operating date. And so being able to have our residents involved and to be able to know about when something is being contemplated, I think is powerful and it's going to improve the process that we have now. So we hope you'll move it forward.

Uh, motion that we favor recommended first substitute House Bill 365, the full body of the Senate Discussion of that motion.

House Bill 365 taxation notification requirements by representative Tom Peterson. This bill is heard in revenue and taxation with the vote. Ten one zero

Thank you Mr. Speaker. Motion to circle.

Yeah, we're working through some, uh, proposed, uh, amendments and just need some time.

A bill is circled matter. Meeting clerk

Thank you Mr. Speaker. Motion to adopt amendment three in my name.

Yeah. So what that does is it pushes the date back from April 1st to May 1st, and it also eliminates the not to exceed condition for the property tax notice, uh, notification.

Thank you, Mr. Speaker, uh, colleagues. What this many of us have heard from our constituents that they have problems with, uh, property tax increases and, and go getting to an an August meeting where they have a truth in taxation, uh, meeting and, uh, the frustration that the public has that they, they aren't being listened to, they aren't being notified that, uh, a property tax increase was coming. What this bill does is it requires that in the event that a taxing entity wants to raise property taxes, they have to notice publicly notice, uh, under the requirements of a, of a property tax increase notification process, that they plan to raise property taxes. And they have to do that May 1st, which will give constituents time to be part of the budget process, be engaged as cities, counties, school boards, as they adopt their budgets, as they work through the budget sessions. This will give them an opportunity to be engaged earlier in the process, uh, and hopefully, uh, present produce better outcomes, uh, for taxing entities. And with that concludes my presentation.

I'll waive. Thank You. Summation has been waived.