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Senate circulates proposed constitutional amendment on intangible property after extended debate
Summary
Senators debated Substitute SJR 17 at length on Feb. 26, 1998, over concerns about the definition of intangible property, removal of a 5‑mill cap and revenue dedication to public education; after prolonged floor exchanges the measure was circled for further study and amendment.
A proposed constitutional amendment that would change how intangible property is treated for property‑tax purposes drew extended floor debate in the Utah State Senate on Feb. 26, 1998, and was ultimately circled for further consideration.
Senator Hilliard, who led floor discussion on Substitute SJR 17, told colleagues the measure is intended to give the legislature flexibility if the Utah Supreme Court broadens the definition of ‘intangible property.’ He said the bill removes a 5‑mill cap and would take intangible‑property revenue out of the uniform school fund, allowing the legislature greater discretion in allocating revenue if court rulings change the tax base.
"If the Supreme Court comes back and decides that intangible property means any intangible, then it's going to make this absolute chaos to try to figure out how property tax ought to be assessed," Hilliard said on the floor, arguing the amendment would give the legislature tools to respond and preserve equity across taxpayers.
Senators pressed Hilliard on whether the change might be premature without a Supreme Court ruling and whether altering constitutional language might have unintended consequences. Senator Stevenson proposed an amendment to retain the longstanding phrase that "the income thereof shall not be taxed," arguing that existing constitutional language has protected income from taxation for decades and should not be altered lightly. Senator Steiner and others warned that changing dedication language or definitions could affect how the court interprets the term "intangible property."
Senators described a broad mix of concerns: potential shifts in the property‑tax burden, the timing of a constitutional amendment (it must be enacted in a general‑election year to take effect), and the need to preserve clarity for county assessors and taxpayers. Hilliard stressed that any change would still require voter approval and that the intent is to avoid chaotic results should a court expand the legal definition.
After extended discussion and offers to amend the resolution, the Senate voted to circle Substitute SJR 17 so members and stakeholders could further study its language and consequences before returning it to the floor.
