S.B. 78 Property Tax Relief Amendments: transcript

I do. And I'd like to move it, if that's okay.

Yeah, thanks. Um, the current online version is basically last year's bill with a one year delayed effective date. Uh, in meeting with, uh, you know, some stakeholders and going through several of the issues, uh, you know, trying to find a program that could be easily administered, uh, we're still working with county, still working with several, still taking input. And at the end of the day, I think we will continue to take input. And so for that purpose, uh, you know, uh, we're moving with the first sub, uh, and I'm happy to address those things during my presentation as to what's different between the two. But there you go.

Pretty excited. I got Senator Esias vote on one. I I, sorry. Senator McKay. I got her vote on a substitute too. Just thought I'd soft. I hear it. Yeah. Uh, I just thought I'd, uh, I just thought I'd share this ta this, uh, slide. I don't know if, uh, it's, uh, available to come up, but this is, um, property tax rate relief from the circuit breaker. This is actually, this data is actually presented by, um, the Chem Gardner Institute over this summer. Uh, this number shows that we have, uh, you know, 20%, uh, the people have taken up the circuit breaker. 80% have not taken up the circuit breaker. So when people talk about the, uh, we have a low take up number, you know, that's true. We don't have a lot of people that are taking advantage of the circuit breaker, right, thus far. Um, that said, uh, what this number, we, you know, if we somehow got to a hundred percent, we would be looking at a $30 million, uh, cost, uh, in the circuit breaker as opposed to what we have here. And so there's, you know, you know, that's just one information point that came in, uh, via the, um, Kesey or via the Kesey Gardner Policy Institute this last summer. The purpose of the property tax relief, um, uh, amendments. If, um, we go back, I mean, we've been working with this and everybody's really familiar with it. Um, it, and it was vetoed this, uh, this last year. It seems like Senator Fillmore and I were both very popular with exec, with the executive branch. Um, the, the idea is if we were to design a program and start from scratch, uh, of what a program would look like, that provides property tax relief for people that are low income over the age of 65, what would it look like? And, um, you know, if, if you, uh, ask one, uh, they feel like, well, if you just forgave their property tax and made it so that, uh, so that their property tax doesn't need to be paid. And that certainly is, is one approach. And that's, that's the approach I guess they actually went with, uh, you know, a while back when the whole process was designed. Um, the, uh, the issue, and I'll, I'll just put this up for basic principle, uh, taxation. I'll throw this, uh, slide back up. Um, but basically, uh, it takes, and, um, you know, it does narrow the base, uh, and I'll just show that up here. Um, but it does narrow the base, uh, for everyone. And, uh, I stole this slide also from the Kimsey Gardner Policy Institute, and, uh, I did not take the time, but I can gray out these individuals and show like the base shrinking if we wanted to. But again, the more people you take outta the tax, you know, system, the less, like the less payers you have, the less payers you have, the higher the rate has to be to collect the same amount of revenue. Well, the difficulty with the, uh, circuit bigger program as it's designed now is we're taking people, we're taking, you know, you know, housing units or whatever out of the property tax system, which then increases the rate for everyone else. So the question was, if we were to redesign it or design it differently, is there a way to design it so that we aren't taking from, uh, so that we aren't taking from the base and raising the rate for other folks? And so that's the purpose of the deferral program that the, uh, wise Senator Fillmore created years ago. Uh, and, you know, we tried to find ways to, you know, incite or, or, uh, sorry, to encourage people to use that program. What we actually had was like a failure of, uh, you know, policy. It, it was a good policy, but we did not get a lot of people to take it up. And so what then ended up happening was, um, you know, we had this deferral that was sitting out there that, uh, nobody was taking advantage of. So, um, what we, what we tried to do is try to, and I get, I hear this from people all the time. They would like to not have a property tax rate increase once they're over the age of, uh, over the age of 65 as well. And so the purpose of the bill is to take our relief programs and change them from a one that narrows the base to one that subsidizes, uh, you know, via interest rates, but then takes that subsidy, applies it to those that need it at the time, and gives them an opportunity to, you know, to pay back the system so that the rate overall does not need to increase on everyone over the long term. Um, let's see, uh, the, I can, we can run through this. One thing that's different, uh, in running through this from, uh, from previous years is, um, the idea that, um, this, you know, they call it prop 13, but that's, you know, kind of lazy. Um, but really it takes, uh, the idea with the, with this is it takes the, derive the revenue that is derived from any reimbursement, uh, that's paid back as the deferral and it reduces the county certified tax rate such that people then, you know, others will then pay less. Um, then it, uh, one key element was we heard this feedback last year and it's something I thought of during, during the year, is they said, well, you know, would this have the effect of pushing people outta their homes? And the, that's not the goal of the policy. The policy is how do we, you know, make, uh, an equitable rate adjustment, uh, and have an equitable program, but then at the same time, uh, allow the person to pay back any of that, uh, you know, deferred, uh, amounts. And so, since the taking homes is not the, not the goal, we're, we're taking the delinquency period for which a tax sale can occur from four years. Uh, you know, when somebody's over the age, uh, sorry, four years right now, which is five in, in actuality instead of four years where the person would be delinquent and then go to a tax sale, it would go to 10 years. And so anybody over the age of 70, they, in order for a county or you know, anybody to foreclose on a home because of their property tax, they, it would take a 10 year period for, you know, for that to, for that to happen During that 10 year period, the individual can, you know, find the deferral. There are resources available, and the counties are proactive. As I've talked to several of the counties, they're very proactive in trying to help solve these problems before they get to the tax sale. Most counties, and I, I've, you know, I know that this is the case. They're trying everything they can not to foreclose on homes and, and for tax purposes. And I appreciate that. Um, the, uh, let's see. The other, um, I'm running through this one thing that's in the bill that, um, as it's written, I'm not comfortable. So there will be another substitute that comes. Um, it's, it's dealing with the Veterans residential exemption. We've heard some things from the veterans and some old language that I forgot to have updated, uh, in here we're shifting instead of, uh, the veterans residential property exemption instead, or for disabled veterans. Instead of it being a liquid assets test, which is what it says here, that was old language, um, bad instructions on my part. Uh, instead we're gonna shift to a value of home. And we're trying to find a number that, you know, the exemption at that number would no longer apply. 'cause what we, what we've heard from some counties is we have some that are, you know, uh, long term, uh, they qualify for the veterans, uh, disability exemption, but they're in a three, $4 million home, uh, which may not necessarily be the tax policy's objective. And, you know, we'll continue that. So that language will be changing for the discretionary deferral. Um, we've taken the income amount and made it 60,000 for the non-discretionary. We've sent the household income, we've increased it so that more people are, are available and more people can apply, uh, to 75,000. Um, and then we set the amount of, uh, you know, for the deferral, it is, they can set the amount of deferral of 50% of the taxes for the base year, and then any increases. And for non-discretionary deferral, it can be a hundred percent of any of the increases of taxes. And so what that does in the long term is you can lock in a, uh, base property tax amount at, uh, you know, at a certain age whenever you qualify and not ever have your property tax increase throughout the rest of your ownership if you qualify for the program. And that deferred amount will be at a preferred interest. Uh, the non-discretionary is at 3%, which nobody can get money for 3% right now. Uh, and for the discretionary amount, uh, or for the discretionary deferral, it's down to 2%, uh, for the most indigent to help, you know, people in need. Again, this is how do we design a program such that people will be, you know, be able to pay, uh, into the system and not actually, you know, take money from the system. Uh, and, and, you know, last year I talked about this a lot, but this is literally the only, uh, welfare program where someone who is house rich but cash poor receives a subsidy against that, you know, then is paid potentially by someone who's renting or someone who's, you know, uh, lower Inc a lower income, but is, you know, just not over the age of 65. So I've spoken a lot. Uh, I'm happy to entertain questions and, uh, and, and that kind of thing. So with that, Mr. Chair, I'll, we, I'll yield the Time. Okay. Uh,

Thank you, Mr. Chairman. Uh, committee members, uh, my name is Steve Erickson. I'm with the Crossroads Urban Center. Um, in light of the, uh, interesting discussions here this afternoon about timing of tax cuts and tax relief, um, my experience working on, uh, tax policy issues on behalf of low income utahans, both in the community and on the hill dates to, uh, the Merrill Cook propositions A, B, and C in 1998. Um, what is interesting about that era was the end of the Reagan supply side economics era, um, with considerable tax cuts to the high end and the beginning of a great growth in inequality in the, in the country. It what followed was, uh, the recession of the HW Bush years and in Utah with Governor Banger. Then following up with, um, the need to increase taxes due to the harmful effects of the recession in the early eight, early 1990s. After, uh, year or two he'd been in office. Um, so that's just a little history. So you're, you're getting to this bill, right? I am getting to this bill. I'm just prefacing with acknowledging your earlier discussion. So, um, it's been clear for, through the processes over those years of the Tax reification commission, the tax review commission and discussions here on the Hill for pretty much every year that we've got a, a tax code that's replete with inequalities, with exclusions, with, uh, exemptions and tax credits and tax shift that's shifts are, uh, ubiquitous in the code, and it crossed the income tax as well as the sales and property tax. Um, This bill here, however, seems wrong in the timing, as in odd that it singles out for, uh, elimination of tax relief, the seniors and the indigent homeowners. And, um, it, it, this is happening at the same time that, uh, there are proposals on the table for all these tax cuts locally on the heels of large, uh, and perhaps permanent tax cuts fed federally on the income tax side. So have to question the, the, the timing of, of this bill, um, especially when you've got now over 30, uh, taxing entities throughout the, the state that are increasing taxes, some by triple digits and others by, uh, 10, 20, 30, or 40%. So, um, we're seeing, um, a lot of disruption in the tax system as we know it, and to, to force people into program that is both convoluted, difficult to understand and unpopular, um, is, uh, doesn't seem to be what is the right thing to do at this time. It'll, this bill would also increase, uh, overall regressivity within the system and, uh, could harm vulnerable seniors with little appreciable, uh, savings relative to what we're seeing with all this other tax talk and, and the realities that, that have gone into place previously. So this would, um, likely push some, uh, seniors into expensive and government subsidized, uh, caregiving, uh, situations, facilities, uh, prematurely and not really save any state money in the, in the process. So I urge you to, uh, vote against this legislation. Thank you.

Wonderful. Thank you. Thank you to the chair and the members of the committee. My name is Chris Kaufman. I am the Grand County Treasurer. I'm representing myself and I have been administering property tax relief for over 11 years. First, I would like to thank the bill sponsor for bringing attention to this important part of our tax system and for his, uh, willingness to work with the counties. I have had firsthand experience with low income seniors who are experiencing dramatic increases in property tax who have benefited immensely from the low-income abatements. The cost of this bill is that many low-income seniors who need help will not receive it. This is because they will be put in the excruciating position of choosing between their own financial wellbeing and placing a tax burden on their children. Given this difficult choice, many will choose to sacrifice for their kids, which is what they've been doing for most of their lives. I'm deeply concerned about the suffering this could cause for vulnerable members of my community. The benefits are that other taxpayers could see a small reduction in their taxes. My calculation puts it at about 0.16%. This would translate to under $10 per year for the average resident in tax savings. The state would also save about six to $7 million per year, which is less than one 10th of 1% of the general fund budget. And both of these benefits would take 10 to 20 years to fully materialize. So when I weigh these small benefits against the enormous impact to individuals' lives, I remain in support of our current low income abatements. The legislature may decide that tax shifts are something that they do not support. However, as the governor did in his veto letter, I would advocate for a comprehensive approach. Low income abatements are only 19% of all abatements, while veterans are 77%. There are many other tax shifts in our system, including ones that benefit farmers and small businesses. Additionally, most if not all of the people at this meeting, including myself, benefit from shifting 45% of the taxes on our homes to other taxpayers. Low income abatements are minuscule in comparison to these other tax shifts. It doesn't seem equitable to me to move them to deferral and not others. Thank you for your time and for considering my perspective.

Thank you, sir. Um, yeah, my name is Jerry Schmidt. I live in Salt Lake City. And, uh, kind of disappointed that, uh, here just what, one minute before the hearing begins on this bill. We find out there's a new version that we need to look through so we can make pointed comments on. So that's impossible to do. So I'll go with, uh, some of what, uh, I had prepared before. Um, I don't know whether the, uh, figures from Kim Kempsey Gardner Institute are correct. Um, I don't know whether the 12,500 recipients are households or people, because last year there were ninety five hundred and twenty six households that got this benefit. So if that's not the case, uh, Kempsey Gardner could be off by about 31%. But the bottom line is this reform and this deferral program stuff is just not needed. Uh, homeowners credit makes up a very small portion of the circuit breaker program for tax relief on property taxes. The only one the state pays for the cost went up only $16,000 last year. And, uh, in fact, participation came down last year, 222 households. It doesn't have a growth problem that requires this extensive reform. Uh, it's been going down about a percent and a half since 2020, and that's why the treasurers oppose it. Meanwhile, the elephant in the room is the another program. And congratulations to the sponsor. Uh, this idea of, of working on the Veterans Relief, uh, program is excellent. And maybe we need to look at the, uh, means, um, uh, the mean median price of households on, on doing that. But the cost on that program went up 59% in the last two years. $22 million. They now make up 87% of all property tax relief in the state. It was $59 million last year out of 68 million. That program has no income limits and no relief limits in two counties. There are some households that have had $745 annual increases, uh, in the last two years, and they're getting 25 to $2,600 a year in relief. All the while homeowners credit people are averaging 672. And the increase alone last year for that program of $7.7 million would've more than taken care of the $6.4 million that homeowners credit, uh, cost the state. But the homeowners credit people do have income limits and they also have limits to relief. But basically three times the amount of people are getting three times the amount of relief from that program compared to the homeowner's credit. I support our disabled veterans and relief to them, but I don't think we should destroy and, and scapegoat the homeowner's credit program for low income seniors on the false premise of needed reform. It's not needed at all. Thank you.

Hi, my name's Tim Funk, and I've been coming up to the legislature for over 50 years, and I'm now over 80 years old, and I'm glad I'm here. But I'm also glad that I've been able to help people. I've worked in poverty programs since the early seventies, and the, one of the most meaningful programs that the state legislature has ever created is this property tax forgiveness program. And what it does is it doesn't let people off the hook entirely. It lets them off the hook a little bit according to how well they are doing. And if they're not doing very well, and they know about the program, they can get some small relief. We're talking about billions of dollars in our budget compared to what we used to do 50 years ago here. And what this amounts to is not very much. You've been hearing that, and you know that what I'm saying is that this program is very, very difficult. And I read the bill this morning and it's very, very, very, very difficult to understand. And what that's going to do is it's going to compound what people already face when they try to sign up for this program. Now, I've taken many people through this program and I still don't understand it. I've taken family members, my mother-in-law, my, my my, uh, disabled nephew who's old enough to qualify for the program. And going through it isn't isn't that easy. And most of the seniors who get this program have someone who assists them. I have people who have called me on the phone from all parts of the state saying, I understand you. You know, I, I say I understand the program, but you know, when I start doing figures over the phone and I can't see you and I can't work with you, I don't have that information or the ability to give you the right guidance, and I have to refer them back, thankfully, thankfully, to one of the 29 counties where they can get relief. That's another story. Not all those rural counties in particular have people who are good enough now to help people with this program. This is a very difficult but well intended program, and it's operated about as well as it can. And now we have, we have disability, uh, we have disabled veterans who also qualify for the program and actually qualify in a more liberal way than the, than the outstanding people who have, who have gotten it in the past. So what I'm saying is, this doesn't help, and this doesn't do anything but delay the inevitable. And it faces people who don't want to defer their taxes to their kids. Thank, thank you for your comments.

Okay. I'm not, I'm not against it if it's done fairly, but this is not a fair deal.

I've been through the program many, many times.

A good deal.

Hello, my name is Zoe Newman and I am representing the Utah Housing Coalition. Today, I just, I'll be brief, but over 48,000 extremely low income renters are in Utah right now. And of those 48,000 extremely low income renters, which is 30% a MI or below, 23% of that number is seniors. And then from 2024 to 2025, senior homelessness has increased by 42%. And I would like for everybody here to consider that the last thing we need to be doing right now is cutting programs that help seniors stay in their housing. Thank you.

I'll make a motion, um, that we pass out Senate Bill 78 with a favor recommendation and happy to speak to that.

It. Thank you. You know, it's interesting, um, the, the public comment in on this bill is always, uh, is always compelling. And I appreciate it. Um, because, you know, when you cut programs, change programs, there's always some uncertainty that comes with it. So I appreciate that. Let, let me, you know, the crazy thing is, is I couldn't help, as I was sitting there listening, I couldn't help that if we had no circuit breaker in place and we were proposing this program as a way to help seniors, then, you know, low income seniors, I'm pretty sure all the advocates that are speaking against the bill, you know, would flip, it'd be the other way. They'd be so grateful that there would be an opportunity to help low income seniors. And they might be focused on some of the positive things. Like, for example, we take the income amount, which is currently in the circuit break around $45,000 and we're taking it to $75,000. I mean, there are a lot more seniors that are gonna be available to participate at deferral program that are currently available for participate in the circuit breaker program. One, two, they might be focused on things that like, make the program easier to administer or ways to like do it better, but instead it's, we're losing something and we're not gaining enough back, which is such an interesting debate. One of the other public comment parts was, was super interesting, um, and it was said more clearly by them than I will say myself, is Mr. Coffin that said, people will choose to pay their property tax rather than burden their children with the deferred payment later. That was really like, that's exactly sums up the problem with the program because instead of choosing, let's be clear about what they're choosing to burden, they're choosing to burden their neighbors with their property tax instead of their kids with their property tax. Now, if I have a choice, you know, should I let my gut let my neighbors pay my property tax or my kids pay my property tax? I think most sane people would choose letting their neighbors. It's a interesting dichotomy and, and I take nothing away from it. I just, I'm just looking at this saying, if we reversed, its thinking for just a moment because the circuit breaker income levels are not increasing either. Uh, and they haven't for the last few years. And because of that, that number is nominally, the program is dying on its own accord. Right? And if the income levels don't increase, it will continue to phase out. And so the idea here that we're increasing the income levels, we're making more people available, but all we're doing is we're requiring that when the home sells someday, that they pay that back with a little bit of interest. I don't know. That sounds like a pretty good program. And it does exactly the opposite of what the advocates have said because now we're, now we're taking the foreclosure period, we're moving it out to 10 years so that less people are even gonna be at risk. In fact, an assessor's first question when they first start, talk to people when they're saying, well, you know, we have to sell your home or look at selling your home 'cause you're in arrears of your sales tax or your, your property tax, their first question's going to be, are you over the age of 70? And if the answer is yes, well great, we have a program to help you, and we've got the a way to defer and grow out, you know, or, and prevent you from, you know, having your home foreclosed and keep you in your home. It's, it's exactly the opposite. But unfortunately, because we haven't, uh, a what I will call a poorly designed welfare program for the rich in place now, instead we're going to make a, I'm trying to get, you know, we get com we get frustration about the proposed program rather than, you know, we're grateful that we're all working together to, you know, have a program that helps low income seniors. So, um, I appreciate the thoughts on, on the veterans. I, I, to be honest, I think it's the third rail in politics and I'm a little bit worried about it, but I, uh, I want it to be on the table and a consideration. Uh, the counties have asked for it to be on the table. It's in the bill as it is now as a placeholder, but I promise you the language that is in the bill is not how it will pass. So with that, uh, I yield my summation. Alright.

First of all, I know the bill sponsor has worked for several years on this and I appreciate all the work. You know, one of the interesting things on this is, you know, we tie the current relief program to income, but what this is going to is more net worth. And when you're talking about a deferral to your children, paying your tax, what you're actually talking about is a deferral to your estate, paying your tax prior. So it is still your tax as part of your estate. And then what is left goes to your children. Like, you're still paying your taxes on that. And, and, and so I, I don't want that to be lost. And, and the only maybe suggestion I would have is I worry that, and, and in a lot of ways this goes a lot easier because if you're a 70-year-old and you say, I can't make it, all you have to do to fall into this program is stop paying your property taxes. You don't have to fill out a form, you don't have to qualify. You just stop paying. Now if you, if you voluntarily go into that, you get a lower interest rate on it. So you can save your children any taxes on it, but it's a really easy program to opt into because you just have to not do something. It's the easiest of government programs to opt into that I've ever seen. Now the only suggestion I would maybe have is, um, you know, where it goes to 10 years, an option to request a, an additional amount of time through the end of life, um, on that. And, and just if you're working on the bill moving forward, because a lot of people are living past 80 or past 90, you know, and, and I don't want them to take this opportunity, take this deferral, and then get to a point where in the years where they're least capable of moving, they're unable to move, uh, just from a capability standpoint, but otherwise they'd be able to stay in their home. And it's just, you know, it's just deferring, uh, it's deferring based on their net. You know, they have, they have assets, but they're not liquid to pay taxes with. And that's one of the hard things about taxes is it forces a liquidity event in order to pay them. And especially with property taxes, you don't want to push the liquidity event before they're ready on a deferral program. And so maybe something that, you know, would allow an extension at that point. Yeah. Um, or just through the end of life. And, you know, I wouldn't be opposed to that as long as it's, uh, you know, we're not killing the rest of our tax system otherwise, but Yeah. Um, but yeah, I think, you know, everybody likes free stuff, but when we use only income as the determinant and it's not gathering more people, despite the population of that it is meant to, to hit exploding and more and more people should be eligible for it and it's declining, that's a program that's not working very well. And I think that this is a much easier program. 'cause all you have to do is just not pay and then you're in the program. And so I think, I think you've, you've done a lot of good work on it, and I'll be in favor.

Thank you. Appreciate these comments. I think one of the benefits of this bill is addressing the calls that I get receive on a weekly basis. And sometimes when the notices come out multiple times during the day saying, can you stop, prevent me from paying more property taxes. Can you lock me in right now? Can you find a way this does, it goes and freezes the, the property tax that you're paying and defers the growth to a, you know, to a future payment that helps an enormous amount of people. And I, I like that element of the bill.

Thank you Mr. President. Uh, this is just second to third, uh, on first substitute Senate Bill one or SE Senate bill 78. We are working on a sub for this bill and it will make substantial changes that I think, uh, will please, uh, 80% of the constituency. Um, but in the meantime, I'm just gonna ask the body if we can move it from second to third. Uh, we'll even spare the debate, move it from second to third. I will circle it tomorrow while we're working on the sub. I have a meeting with the counties and with the cities on Thursday, uh, to hammer out some details. So, uh, I'll just add, I'll just make this my third bill Cir circle on third tomorrow. But, uh, with that, um, Mr. President pro tem, I, uh, waive my, uh, presentation Discussion to first substitute Senate bill 78.

Thank you. I appreciate the good Senator Vickers request. This is a really controversial bill for some of the people that I am working with. So I, I would wish that you would circle it and we can see what the amendment is before we move into third

Uh, with that caveat that everybody knows the sub's coming and there will be plenty of time for everybody to review it. Um, I'm going to move this first substitute Senate bill 78. Be read for a third time.

Uh, I would make a motion that we lift, uh, Senate Joint Resolution five to the top of the second reading calendar. And I'm happy to speak

Go ahead and speak to that motion while we're Yes. So this is not actually to move it right now, it's so that we can adopt a substitute because the substitute deals with an issue that we'll be dealing with tomorrow. And then we'll move, we'll run it, uh, tomorrow in conjunction with another bill. So this is, this is related to the constitutional court, uh, which is a Representative MacPherson bill. And that will go tomorrow. But this is the court procedure related to it. And so we're trying to line it up so that those both go at the same time and we can have a debate at or about the same time with all of them. And so if we move it up to the top of the second reading calendar, I would adopt the substitute today and then re-circle so that that can be on the board. Everyone can see it, and then tomorrow it can run at the same time as the other. And so that is the purpose for this kind of out of the norm movement.

Thank you very much. Um, we do very much what, uh, Senator Weiler, uh, the good Senator, uh, from Bountiful, uh, is doing. We're making a substantive change with Senate Bill 78, um, with a new substitute. And so the plan is to, um, adopt the second substitute. That will be my motion here. Uh, the motion is to delete and title embody Senate bill 78 and replace it with second substitute Senate bill 78. And I'd like to speak to that.

Um, as Senator Weiler, uh, just showed, um, we're gonna take Senate bill 78, it's a vehicle in motion, so to speak. Substitute it with second Senate bills, uh, Senate bill 78. And, uh, the primary substantive changes, uh, is it, you know, repeals the abatement programs at the state level and pushes the abatement programs down to the county level. Um, the counties, uh, after uh, after this sub was released, contact me about making a different substantive change. Uh, and so we're meeting later to do that, but I wanted to adopt the substitute. Uh, and then we will recircle the bill. Uh, I'll meet with the counties and continue this conversation.

Thank you Mr. President Prote. Motion to encircle SV 1 47.

Um, thank you Mr. President Pro temp.

Yeah. Substitute. Uh, we, in meeting with the counties, we have unanimous support for the count from the counties on this issue. Uh, as we're trying to work through several of the last minute, uh, uh, button up issues, uh, we've, uh, made a couple of minor tweaks to the bill and made it more clear as to, uh, the discretionary, um, uh, the discretionary, um, deferral program. And for that purpose we've set a common interest rate between the two types of deferrals and, uh, also cleaned up, uh, and have a requirement that the state pick up and pay for active duty property tax abatements. So for active duty military, when they're deployed, the state will now pick those up as a portion of, uh, the money that we're saving from the, um, uh, from the property tax abatements and the circuit broker being pushed down to the local level. With that Mr. President, uh, I'm going to, uh, that's on the motion to sub, I think. Right?

Uh, thank you Mr. President. A motion that the Senate adjourn until Monday, March 2nd at 10:00 AM.

Yes. Um, after a lot of consideration, honestly, we've been negotiating this bill throughout the session. We've substituted obviously a few times. Uh, we have taken all of the mentions of the veterans programs that we were gonna send to the county level. We've taken all the veterans programs out and now we're focused on, uh, the indigent and the circuit breaker program, repeals and, uh, and pushing those down to the county level for their abatement programs. And then creating and, uh, supporting the state, uh, deferral program for those purposes and those purposes only. Uh, the other part, uh, with the substitute is it provides ongoing funding to the, uh, to the counties for the loan program, for the deferral program. We had a funding mechanism set up, uh, that we we end up taking away last year because the deferral program wasn't being used as much. We, we think that this new program is going to be used a lot more. So those are the key principles of what's changed in, uh, four substitute.

No. President. We, uh, originally what we were doing is we were taking those programs and pushing 'em down to the county level so they'd be locally assessed. Right now, those programs are locally assessed, but state controlled, the idea be the idea that we had in the very beginning was to make them locally assessed and locally controlled. Um, after just significant negotiations, we couldn't get to peace on, uh, on that piece. So we just removed any changes that there, that there were to the veterans programs or to the active duty programs. And those are all removed. So, so to be sure that, uh, there's no change in the substitute Correct. Uh, to the veterans program. Correct. That currently currently exists.

Thank you President. Um, the Senate bill 78, now four substitute. Uh, basically I did a pretty decent description. Um, the key elements of this bill, if you wanna scroll down, uh, for fun, uh, you can look down, I think it's in the 16 hundreds. Hang on one second. Get there myself. Okay. So you'll start to read in the, um, about how the deferral program will work. This is going to be a, what I believe is a big value add. What I hear from a lot of constituents, 1694, if you wanna follow along. Um, what I hear from a lot of constituents at town halls related to property tax, especially our seniors, is they're concerned about the fact that their property taxes feel like they're always going up and they're living on a fixed income. Uh, with, with a passage of fourth substitute Senate Bill 78, what it, what will happen is anyone that is anyone that is making under 75,000 a year, we'll be able to choose a base year. And that base year then becomes their maximum property tax exposure and such that any amount, uh, if you're, uh, between 65 and 75,000, any amount that the property tax goes up during your ownership, you can defer that amount and that deferral will be held at the county level and the county will hold it at a 3%, uh, interest rate. And you can pay back that property tax amount when the, when the home is sold. The benefit here is no one over the age of 65 will feel the, uh, will feel a property tax increase because of, uh, a result of inability to pay. Um, we will make a strong effort towards preventing any seniors from ever being removed from their home as a result. And so property tax will be, uh, they will be locked out of, so to speak, once they choose that base year program, they will not be forced to pay, uh, to pay sales tax or to pay the additional property tax for the following year for that year. Now, if you go to, let me see, uh, line here we are, uh, if you scroll back up and you now look at lines 1405 and read down through there, that explains the base year component. But then you get to lines 1403 or 1430 and you see where these amounts are. Now, if you make less than 65,000 a year, you'll, you can have the option to freeze seven and pay only 75%. So you can actually get a discount on your property tax and not see a property tax increase. And you can defer that amount for later. If you make less than 55,000, you can do 50%, 50%. And if you make less than $45,000, you can defer up to 75% of your base year property tax and any of the increases, those amounts now will make it so that the sting or the difficulty of trying to live within a fixed income and work within the deferral program, you will be able to lock away those and pay those, uh, those property taxes when the property is sold. Um, that's the primary crux of it. Now, the circuit breaker program itself does not go away. We are pushing that certified, we're pushing a certified rate down to the county level where they will then offer the same amount of circuit breaker that they're offering. Now, if that's the, the county's choice, and they will come up with that program. And if they do, they will just have to have a certified rate that identifies, uh, that will be identified on the, on the taxes, uh, or on the tax notice. And that will just notify people how much is being paid on their certified, uh, as part of their certified rate. So with that, Mr. President, I am happy to yield for questions.

I think the sponsor yielded. I just, uh, that seemed like a lot. There's a lot of numbers and stuff. Could, could you repeat that, senator?

Absolutely. So I'm just saying

Thank you Mr. President. So Mr. President have the counties, uh, and UAC agreed to this.

Thank you, Mr. President. I have a letter signed by, uh, by all the counties of the state of Utah that all support this program. Uh, and they believe in this policy shift and feel like it is a step in a positive direction to help seniors and also shore up our abatement programs.

I'd like to go back and address the deferral program there. If they defer that, is their interest tacked onto that each year or does it just the set amount?

Thank you. The deferred amount, they will get a preferred 3% interest rate. Okay. Last year we had two deferral rates, one was 2%, one was 3%. We've done away with all that. We simplified it significantly, and that's the part the county's really worked hard on was trying to consolidate the program. So that's only one program, but there will be a 3% interest that is charged on that money so that when the taxpayer is paid back on those deferral, it will make that incremental interest value.

Thank you, Mr. President Pro tem. I mean, thank you, Mr. President. Um, when I think about, um, this policy, I think about generational wealth and a lifetime to accumulate. When we defer the liens and the um, penalties to the next generation, we are actually preventing the next generation from succeeding at the same rate that maybe we have succeeded. Um, we are struggling with a housing shortage and we talk about that all the time. And we're struggling with the ability for people to afford housing by doing this. We are actually going to take another tool away from the young people in our lives to have that wealth passed on to them. Uh, when my parents passed away, they provided me with some security that will now be passed on to my kids. And so we're looking at affordability, but we're also thinking about sustainability. Affording a house is staying in it and barely making ends meet. Sustainability is when we have a house and we start building wealth. And so I, I really feel this is a detriment to the next generation, having that lifeline that we give our students and our families. Uh, I received a bible today and I was thumbing through it and I came to Proverbs 15 and it says, he who oppresses the poor reproaches his maker. I haven't quoted the Bible in a long time, but I think that this is part of this problem. We need to be taking care of the people who are struggling and we need to make sure that we give that lifeline to our next generation. Thank you

You President. I'll waive summation and move that four substitute hospital 78 property tax relief amendments pass under suspension of the rules.

Senator Ipson Baldy. Yes. Lewin Brammer. Yes. Bus Colmore Escamilla Fillmore Grover Harper Aye. Hankins Ipson. A A. Johnson Aye. Juab McKay. Mikel Milner Musselman Owens Mitch Pitcher Plum Rebe Sandal Stevenson Aye. Stratton Aye. Bickers. Weiler Aye. Wilson Aye. Winterton Aye. Plum President Adams Aye.

Thank you Mr. Speaker. I move that we adopt amendment number two.

Yes. That, uh, yes. This amendment leaves the Veterans program untouched. Uh, so a lot of people have been worried about whether veterans and the, um, abatement or the circuit breaker program would be, um, taken away. This ensures that it's untouched and remains status quo.

Presentation. Thank you. I appreciate that. So, uh, I'm gonna be brief, uh, colleagues, I know where we're out of timewise. Uh, Senate Bill 78 is a bill that was, uh, heard last year. It passed both bodies. Uh, it was vetoed by the governor. There was some improvements that were made this time. It took a long time for those improvements to be made, which is why we're here at this late hour. Uh, so let me briefly articulate what the bill does. First of all, it repeals three existing state property tax programs. The renter's credit, the homeowner's credit and abatement for indigen individual state property tax relief. I'm just gonna note that in some previous conversations I'd mentioned that it didn't touch the renter's credit. It does. It, it it repeals the renter's credit. So I want to be clear with the members, uh, with regard to that provision. The second thing is that it authorizes a county at its discretion to provide an abatement program. If they choose, they have the ability to set it up however they want. Um, and, uh, they, they're, they're able to work through that at the county level. Right now, that's being funded at the state level through a $9 million state appropriation. Um, it moves this abatement program to a deferral program, a tax deferral program. So the $9 million would be available essentially to, uh, help individuals through an, through a deferral. Not an abatement, meaning that you don't, you wouldn't have to pay the tax. Uh, under qualifying conditions, you have a paper on your desk. On the backside it explains all the qualifying conditions. So you don't have to pay the tax until there is a transfer. Would that transfer would be when you're deceased. If you're deceased, it can go to your spouse after, after, after your, uh, spouse is deceased. Unless it is like a special kind of a trust for, um, uh, an individual's, uh, special needs. There's a special needs trust that authorizes it to, to, uh, continue. If it doesn't meet one of those conditions, then the property tax would be repaid at that time. With a 3% interest rate. It has to be 3% under the program. Um, so I just wanna note that, uh, surviving spouses are protected, special needs trusts are protected. And, um, there is the ability to continue to help provide relief, just not in an abatement. It becomes a deferral program. That concludes my presentation. Mr. Speaker.

Thank, thank you, Mr. Speaker. I have concerns with this bill on the policy of this bill itself. Um, the deferral program. I've asked my elderly residents and I've tried to explain them. I actually think the deferral program is probably the right policy, but it's extremely unpopular. The, uh, residents in my area that are complaining about, you know, fixed income people and I tell 'em about the deferral program and they're like, yeah, that's not gonna do it for me. That's not what we just like, why can't we just keep the circuit breaker program? So what I worry about this bill is we're gonna get rid of the state circuit breaker program. We're gonna allow the counties to decide how they do it. It's gonna be extremely hard for the, for some of the counties to make the decision to create a program. They have to figure out how to do it, and they have to restore the revenue from some other form of taxation. So, excuse me, Senator. Mr. Speaker, I don't need to. Senator arguing with me all during my presentation. Could we have him go somewhere else? Senator?

Thank you, Mr. Speaker. I have never had that happen before. I apologize to my colleagues for losing my cool. Um, so we're putting this onto the counties. The counties have to decide to design a program. They have to figure out how to pay for the program. They have to figure out how to recover the, the re revenue from somewhere else. And what ends up happening is, is when they don't do it, the only option for those seniors is the deferral program. Now, like I said, the deferral program is probably the right policy. I can't argue with that. But what I worry about is that this is not the policy that my voters and my constituents want. They want the circuit breaker program. They would in fact prefer that we keep the program and expand the eligibility. I understand that if we expand the eligibility, someone else has to pay for it, et cetera, et cetera. Uh, I understand that. But this is not popular with my voters. And so my concern is, is that we're going to create a, a lot of pressure on the counties to do something that the counties are not gonna be ready to do. And then our voters are gonna be upset that we took away something that they had and gave them something that they don't want. So that's my concern. Thank you Mr. Speaker.

Thank you Mr. Speaker. I move to circle this. Bill didn't have a hearing and we were circling the ones that didn't have a hearing.

to circle Do I get to speak to that?

Uh, thank you Mr. Speaker. I would, uh, ref, I would, uh, oppose the motion to circle. I'll note that some of the bills that did not have a hearing were circled, um, but others were not. And, uh, I would resist the motion to circle this bill.

Thank you Mr. Speaker. So I, I had the opportunity last couple weeks to discuss this at my town halls, which we had a lot of seniors attend. And they really liked the idea of not having to pay property taxes. They get older based on their income. I said, there's only one thing when the property's transferred, transferred, you have to pay the property tax. They didn't like that part at all. And they said, well, we like the part where we don't have to pay it, but we don't have to want to pay it later either. I said, that's not the proposal. And so they said, well, then we'd rather have the current circuit breaker program. So they like it real well until they're told that they are gonna have to pay it at some point. And then they did not care for it at all. Thank you, Mr. Speaker.

Thank you. I appreciate, uh, the body's, uh, consideration of this policy. Uh, I want to just note that the, uh, current policy is, uh, improved substantially from last year. Uh, the policy that was vetoed spent a a tremendous amount of time and effort to, uh, get to a place where the, uh, counties, uh, could step forward. And they've endorsed the policy. You have that endorsement. Uh, uh or haven't. They're, they've been very clear about their support of this policy. Uh, the issues that led to the veto have been resolved. Um, this is a policy that I think is, uh, the right policy for, from a tax standpoint in this particular case. We have a number of situations where, uh, there's substantial equity in the properties that are being, uh, that are participating in the Circuit Breaker program. And what this allows, what this allows for is an appropriate way to provide an abatement, or sorry, a deferral, which will allow for, uh, allow for the property tax to eventually be paid. Um, but it doesn't, uh, shift that tax burden onto the other residents, uh, in the county. Um, it allows for the property owner who has the ability to, to pay, particularly if they have the, uh, some time to navigate that. It, it, it allows for them to pay the property tax, uh, that they're owed. Thank you Mr. Speaker. That concludes my present, my remarks.