burden. It currently limits the ability of people to buy a vehicle. Sen. Mantes commented that the
fee in lie tax is a major tax that continues year after year and has a direct effect on the purchasing
decisions of many people. He proposed draft legislation "Property Taxes: Uniform Fees And
Certified Tax Rate" as a solution to these problems.
b. Review of Proposed Legislation--Rebecca L. Rockwell, Associate General Counsel, reviewed the legislation proposed by Sen. Mantes. She said that the proposed legislation
includes the following amendments to the property tax: (1) reducing the uniform fee on certain
tangible personal property required to be registered with the state to 50 cents per year; (2)
requiring an annual reimbursement fee of 50 cents per item of tangible personal property; (3)
changes in the property tax notices; (4) authorizing an inflationary adjustment to a taxing entity's
certified tax rate; and (5) increasing taxing entities' certified tax rates to offset the decrease in
revenues from uniform fees.
Sen. Mantes distributed handouts "Ad Valorem Tax and Flat Fee Per Vehicle Increase
Needed to Replace All Fee-in Lieu Revenues" showing figures for a $10.00 flat fee and for a
$.50 flat fee.
Rep. Valentine asked whether an inflationary adjustment was integral to reducing the
uniform fee on intangible personal property. Sen. Mantes said that it was a separate issue. Rep.
Valentine raised concerns about incorporating an inflationary adjustment into the bill.
Sen. Stephenson requested staff to research the constitutionality of classifying taxpayers for
purposes of imposing the uniform fee.
c.
Comment from County Assessors --
Lee Gardner, Salt Lake County Assessor, spoke in support of the proposed legislation. He
said it accomplishes the following: (1) simplifies administration; (2) enhances efforts to use third
party registration (mail-in registration); (3) reduces fraud; and (4) reduces transaction time.
David Haun, Weber County Assessor, said that property taxes should be separated from
registration. He said the circuit breaker needs to be increased to reduce the tax shift to older cars
under this legislation.
Monte Munns, Box Elder County Assessor, said this legislation will reduce the likelihood
of people living in Utah registering their cars out of state to avoid the high taxes imposed on
vehicles in Utah.
Rep. Short asked if this solution is superior to the flat fee on vehicles which was proposed
last year. Mr. Gardner said that the flat fee created too high an increase on older vehicles.
d. Comment from Utah State Tax Commission --
Pam Hendrickson, Commissioner,
reported that the Utah State Tax Commission ("tax commission") supports this bill because it will ease and reduce the cost of administration. She
was concerned, however, that a 50 cent reimbursement fee is not sufficient to cover the
administrative costs.
e. Public Comment --
Jonnie Wilkinson, citizen, said this legislation will burden those with older cars. Sen.
Mantes said the vast majority will be advantaged.
3. Individual Income and Corporate Franchise and Income Tax Credits --
a. Summary Review of Existing Credits _ Bryant R. Howe, Research Analyst, distributed a handout titled "Background Information, Individual Income Tax and Corporate Franchise and
Income Tax Credits." He defined "tax credit" and reviewed for the committee
the 13 corporate and 11 individual tax credits. The total dollar amount of corporate and individual tax credits for
1995 and 1996 was $3.4 million, with an average of $572 per return.
Mr. Howe compared Utah's individual and corporate income tax credits to other states. He
then outlined some articles containing suggested criteria for evaluating tax credits. His outline
included a discussion of the principles of a high quality state revenue system, arguments against
credits, arguments in favor of credits, and possible criteria for evaluating credits. He noted that
the tax credits are found on line 35 of the Utah individual income tax return.
b. Evaluation of Credits -- Sen. Dmitrich reviewed the Utah steam coal tax credit. He said legislation was passed last
session
renewing the credit, and allowing the credit to be carried forward for 15 years. The legislation also contained a provision requiring the credit to be reviewed in five years. He said
this bill allows Utah to compete in the coal market.
c. Comment from tax commission -- Rich McKeown, Commissioner, recommended simplicity in the administration of tax
credits. He said tax credits cause the forms to be longer and require administrative expertise.
d. Public Comment --
Kim Christy, Utah Farm Bureau, commented on the refund for motor fuel taxes. He said this credit has a great impact on agriculture and urged the committee to preserve this tax relief.
Phil Shumway, Director, Project TURN, said that private providers use donations from
sheltered workshops to offset state funded programs. He said the credit for employment for
persons with disabilities is an incentive for employers. He recommended continuing both tax
credits.
Susan Jancart, Office of Energy and Resource Planning, said tax credits promote the use of
renewable energy. She discussed the barriers to alternative energy systems and said that tax
credits help level the playing field. The Office of Energy and Resource Planning supports fuel
credits.
Orin Farnsworth, Solar Electric Specialties, said the residential energy system tax credit
enables people living in remote areas (especially those with no utility lines) to have non-
polluting power systems. Randy Tolbert, A-Associates Solar, said that in his experience as a
contractor, the tax credit is a major factor in the decision to purchase a renewable energy system
and therefore encourages the use of alternative energy.
Jonnie Wilkinson, Department of Community and Economic Development, Business
Development, discussed the enterprise zone program. He said that rural areas in Utah are
significantly impacted by the tax credits.
5. Other Business -- The committee did not discuss any other business.
6. Adjournment --
MOTION: Rep Harper moved to adjourn the meeting at 5:15 p.m. The motion passed unanimously with Sen Dmitrich absent for the vote.