Senate advances fourth substitute of SB 194 to restructure statewide assessing levy, adopts 60/40 split

Senator Lyle Hilliard, sponsor and chair of the Revenue and Tax Committee, presented and moved substitution of the fourth substitute to Senate Bill 194, saying the measure seeks to improve uniformity and accountability in property tax assessment and collection across Utah’s counties. He told the Senate the substitute ties redevelopment bonding issues after May 1, 1993, coordinates with House Bill 278 and changes how a state assessing levy is shared between a statewide pool and local counties.

The fourth substitute directs the State Tax Commission, working with county assessors, to adopt standards for acceptable assessment levels and valuation deviations and tasks an interim committee with periodic review. Hilliard said the bill changes the existing distribution of the state assessing levy so that 60% becomes a statewide-shared portion and 40% remains with local counties, while preserving a 2.5-mill cap on the program and allowing a county to impose an additional permissive levy (described in debate as 0.0002) if needed.

Why it matters: backers argued the change reduces the incentive for counties to inflate assessment-and-collection spending and creates enforceable standards and a mechanism for the State Tax Commission to step in when counties fail to comply. Opponents, led in floor remarks by representatives of Utah County and some senators, said the proposed ratios would shift significant dollars among counties and could cost Utah County in the hundreds of thousands of dollars annually.

Utah County Treasurer Leonard Ellis told the Senate his county estimated the substitute would reduce Utah County’s receipts by about $450,000 per year and urged adjustments to the county factor. Senator Hilliard acknowledged those concerns and said the package includes a $500,000 contingency fund for counties he named and that the proposal was negotiated with many stakeholders, including the statewide assessed business community.

Commissioner Brent Oviso and other presenters told the Senate the 60/40 split was the broadly agreed compromise reached after negotiations among counties and business representatives; Oviso said moving the numerator to a higher share (for example 65/35 or 75/25) would further shift money away from some counties. Tom Allen, the state auditor (introduced to the chamber by the sponsor), explained technical aspects of the levy and said the program as drafted should not raise the overall cap (the sponsor said there would be “no tax increase whatsoever” because the 2.5-mill cap is preserved) and that the change was intended to reduce perverse spending incentives.

Several senators asked for additional modeling and county-by-county figures. Senator McAllister requested tomorrow’s discussion include estimates of the bill’s dollar impact on the business community; Hilliard said county-by-county figures could be provided but that his office could not at present separate the impact by business versus homeowners. Multiple senators said they supported moving the bill forward to third reading while reserving the right to consider amendments on third.

The Senate called the question on the substitute and, after a roll-call, the clerk announced the fourth substitute of SB 194 passed and the bill was placed on the third-reading calendar.

The next procedural step is third reading in the Senate, where sponsors said remaining technical clarifications and any targeted amendments (including those Utah County indicated it intended to offer) could be resolved.