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Special session likely on tax, townships

SHARE Special session likely on tax, townships

When Utah legislators adjourned March 5, leaders said they didn't believe they'd be back in special session this year.

Wishful thinking.It's likely lawmakers will be back - maybe in May - to deal with a new controversial township law and attempt to keep a Utah State Tax Commission ruling on "intangible" property from raising property taxes on ordinary Utahns.

GOP House and Senate leaders and Gov. Mike Leavitt aren't ready yet to name a date for a special session, even to say for sure that one will occur. But legislative leaders said Thursday it looks like one is coming down the road.

A new township bill should be ready for discussion Friday. A bill sponsored by House Speaker Mel Brown, which takes effect Monday, would dissolve the year-old townships (which are really planning and zoning groups for small, unincorporated communities).

"If we can reach agreement, I've told the (township advocates) that I'd support a measure that would grandfather in the 15 super-majority townships that have already been created," Brown said Thursday.

How the new bill deals with township boundaries - and boundary interaction with city's annexations - is another matter; one more challenging to solve, he added.

Brown is not drafting the bill, the townships advocates are, and he hasn't seen the final draft yet. He's leaving town for several days on legislative business but plans to met with Leavitt and townships proponents upon his return.

"I have not asked the governor for a special session on it yet," Brown said. Only the governor may call a special session and he sets the session agenda.

A solution on the impact of the Tax Commission's ruling is much more difficult to achieve, Brown said. "It doesn't make sense to call a (special) session just on townships. We should look at the intangible issue also."

In a tax appeal by an out-of-state telecommunications company, the commission ruled last month that how "intangible" property assessments are made on state-assessed industries must be changed.

Assuming local property taxing entities don't just cut budgets by the amounts of tax lost, other property taxes would be raised to offset the impact of the commission's ruling. Because local county assessors don't really know the im-pact of the decision yet, it's difficult to pin down how residential homes or businesses will be affected.

Lawmakers side-stepped significant homeowner property tax hikes several years ago that would have come because of a commission factoring order.

Their latitude in doing that again is limited, however, by the state Constitution.

Township advocate Karen Crompton said the legislation her group has drafted will address three key issues.

First, the bill would grandfather all 15 townships that were created with a super-majority vote, leaving in place their current boundaries.

"The real kicker on this one is whether it can legally be done if May 5 comes and all townships are dissolved (by Brown's new law)," Crompton said.

"If not, we may need to take legal action to prevent (the new) law from taking effect on May 5. We would only do that if we had a pretty good indication there would be a special session. Our goal is a political solution, not a legal one."

The second issue creates a mechanism to modify the borders of townships, specifically for areas to remove themselves from townships if they want to annex into a city. If an area decided not to be part of the township, they would first go to the township planning board to withdraw.

If they did not receive satisfaction from the planning board, the decision could be appealed to a boundary commission or the county commission. "It specifically addresses the annexation issue, but it has nothing to do with incorporations," Crompton said.

The third issue has to do with who can serve on the township planning boards. Under the old township law, any resident or owner of real property within the township could serve on the board. The new law would allow only township residents who are registered to vote in the township.

Township advocates are also concerned that if Brown's HB363 is allowed to become law, the current elected planning boards will be dissolved with no provision that those elected representatives would be part of the county planning process. It is unlikely that county governments could accommodate that provision by ordinance before May 5.

If the new law takes effect on May 5 and planning boards are dissolved, Crompton questions whether new elections would have to be held. That question could provide the legal fodder for a temporary restraining order until a special session is called.

The governor has not been briefed on any of the details on the compromise legislation, and is not yet inclined now to call a special session to deal with the issue.

"We know people are trying to work something out, but we have not been told of any definite proposals that would signal that a special session should be convened," said Leavitt spokeswoman Vicki Varela. "Our sense is that it is still in the discussion stage."