House approves one-year tax-rate fix to preserve local revenue after 1998 registration change

The Utah House on Monday approved a second-substitute to House Bill 178 intended to restore the legislative intent of a 1998 reform that replaced a vehicle property tax with a fee and included provisions to keep taxing entities financially whole.

Sponsor Representative Short told colleagues the substitute instructs the Tax Commission to use actual 1999 growth, not anticipated growth, when adjusting rates so local governments do not lose revenue because of the change. "This bill is a firmness issue so that the taxpayers don't pay any more than was intended in the first place," Short said on the floor.

Short said the commissionf9s earlier calculation had allowed about $16,700,000 of anticipated growth into the rate-setting formula rather than actual growth, which the substitute corrects. He also pointed to Salt Lake County as an example of actual gains that properly remain in the base: "Salt Lake County actually collected about $1,700,000 more in '99 than they did in '98, so that stays in the base," he said.

Representative Carlson asked whether limiting adjustments to actual growth would create a one-year lag and leave local entities temporarily short of funds. Short replied the change is a one-year adjustment only and that local entities will be able to retain growth going forward: "This is just a 1 year adjustment," he said.

The House adopted the second-substitute and then recorded final passage: the clerk announced the bill received 64 yes votes and 0 no votes and the measure moved to the Senate for further action.

Next steps: HB178 will be transmitted to the Senate for its consideration and, if approved, proceed to the governor for signature.