Property‑tax rules tightened: HB236 adds pre‑notice requirements and interim budget rules

Alexa, covering revenue and taxation, walked LPC members through HB236 and related legislation affecting how municipalities consider and disclose property‑tax increases.

Under the third substitute of HB236, a taxing entity that is considering a property‑tax increase must make a preliminary statement in a public meeting between May 1 and June 13 and post a separate announcement on the meeting notice that a tax increase is being considered. The taxing entity must present a property‑tax impact schedule that includes approximate additional revenue, the percentage revenue increase, effects on average residential and commercial property owners and department‑level impacts.

By June 30 the taxing entity must adopt an interim budget reflecting the proposed increase and hold any revenue derived from the proposed increase in a restricted interim account until the final budget or tax increase is adopted. HB236 includes a one‑year grace period that protects certification for some technical mistakes made when entities transition to the new requirements.

Alexa also described SB238, which clarified posting, virtual‑participation and evidence‑submission rules after a number of taxing entities failed to get their rates certified last year; it requires posting instructions 24 hours before hearings, standalone truth‑and‑taxation hearing dates, and submission of evidence of compliance to the Tax Commission within seven days of final budget adoption.

Justin emphasized the takeaway: "we did not lose any authority as cities...to impose property taxes," but municipalities should expect continued interim conversation and additional ULCT webinars to walk through compliance steps.

Next steps: municipal budget officers and clerks should review FY timelines, prepare the property‑tax impact schedule template, and plan for the June/July interim budget and reporting steps outlined in HB236 and SB238.