School District Taxation Amendments

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53F-2-601
53F-2-601
0
School District Taxation Amendments
2026 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Jason B. Kyle
Senate Sponsor: Wayne A. Harper

Cosponsor:
Brady Brammer
LONG TITLE
General Description:
This bill extends a hold harmless period for state guaranteed funding related to a certain
reduction in a school district's certified tax rate.
Highlighted Provisions:
This bill:
extends a hold harmless period for state guaranteed funding related to a certain reduction
in a school district's certified tax rate.
Money Appropriated in this Bill:
None
Other Special Clauses:
This bill provides a special effective date.
Utah Code Sections Affected:
AMENDS:
53F-2-601
, as last amended by Laws of Utah 2025, Chapters 6, 165
Be it enacted by the Legislature of the state of Utah:
Section 1. Section
53F-2-601
is amended to read:
53F-2-601
. State guaranteed local levy increments -- Appropriation to increase
number of guaranteed local levy increments -- No effect of change of minimum basic tax
rate -- Voted and board local levy funding balance -- Use of guaranteed local levy
increment funds.
(1)
As used in this section:
(a)
"Board local levy" means a local levy described in Section
53F-8-302
.
(b)
"Excess funds" means the difference between:
(i)
the amount of state guarantee money a school district received in the 2025 fiscal
year; and
(ii)
the amount of state guarantee money a school district would receive based solely
on the certified tax rate in effect for the 2025 fiscal year.
(c)
"Capital local levy" means a local levy described in Section
53F-8-303
.
(d)
"Guaranteed local levy increment" means a local levy increment guaranteed by the
state as described in Subsection
(2)
.
(e)
"Local levy increment" means .0001 per dollar of taxable value.
(f)
"Voted local levy" means a local levy described in Section
53F-8-301
.
(2)
(a)
(i)
In accordance with Subsection
53F-2-205(6)
and in addition to the revenue
collected from the imposition of a voted local levy or a board local levy, the state
shall guarantee that a school district receives, subject to Subsections
(2)(b)(ii)(B)

and
(3)(a)
, for each guaranteed local levy increment, an amount sufficient to
guarantee for a fiscal year beginning on or after July 1, 2018, $43.10 per weighted
pupil unit.
(ii)
The number of guaranteed local levy increments under this Subsection
(2)
for a
school district may not exceed 20 guaranteed local levy increments, regardless of
whether the guaranteed local levy increments are from the imposition of a voted
local levy, a board local levy, or a combination of the two.
(b)
(i)
Subject to future budget constraints, the Legislature shall annually appropriate
money from the Local Levy Growth Account established in Section
53F-9-305
for
purposes described in Subsection
(2)(b)(ii)
.
(ii)
The state board shall, for a fiscal year beginning on or after July 1, 2018, allocate
funds appropriated under Subsection
(2)(b)(i)
and the amount described in
Subsection
(3)(c)
in the following order of priority by increasing:
(A)
by the amount described in Subsection
(2)(a)(ii)
; and
(B)
the guaranteed amount described in Subsection
(2)(a)(i)
.
(3)
(a)
The guarantee described in Subsection
(2)(a)(i)
is indexed each year to the value
of the weighted pupil unit by making the value of the guarantee equal to .011962
times the value of the prior year's weighted pupil unit.
(b)
The guarantee shall increase by .0005 times the value of the prior year's weighted
pupil unit for each year subject to the Legislature appropriating funds for an increase
in the guarantee.
(c)
If the indexing and growth described in Subsections
(3)(a)
and
(b)
result in a cost to
the state in a given fiscal year that is less than the amount the Legislature
appropriated, the state board shall dedicate the difference to the allocation described
in Subsection
(2)(b)(ii)
.
(4)
(a)
The amount of state guarantee money that a school district would otherwise be
entitled to receive under this section may not be reduced for the sole reason that the
school district's board local levy or voted local levy is reduced as a consequence of
changes in the certified tax rate under Section
59-2-924

pursuant to
in accordance
with
changes in property valuation, if the school district applies the certified rate
reduction proportionally to the district's voted local levy, board local levy, and capital
local levy.
(b)
Subsection
(4)(a)
applies for a period of
one year
two years
following a change in
the certified tax rate as described in Subsection
(4)(a)
.
(c)
Subsection
(4)(a)
does not apply if a school district:
(i)
does not apply the certified rate reduction proportionally to the district's local
levies in accordance with Subsection
(4)(a)
; or
(ii)
otherwise moves tax rate capacity from the board local levy or voted local levy to
the capital local levy.
(5)
The guarantee provided under this section does not apply to the portion of a voted local
levy rate that exceeds the voted local levy rate that was in effect for the previous fiscal
year, unless an increase in the voted local levy rate was authorized in an election
conducted on or after July 1 of the previous fiscal year and before December 2 of the
previous fiscal year.
(6)
A local school board of a school district that receives funds described in this section
shall budget and expend the funds for public education purposes.
(7)
(a)
Beginning with the 2026 fiscal year, the amount of state guarantee money that a
school district receives under this section may reduce as a result of changes in the
certified tax rate under Section
59-2-924
due to changes in property valuation.
(b)
For a school district receiving state guarantee money in excess of the amount the
school district would receive based solely on the current certified tax rate, the excess
funds:
(i)
may not cause the amount the school district receives to exceed the total amount
of state guarantee the school district received in the 2025 fiscal year; and
(ii)
shall diminish over a three-year period as follows:
(A)
in the 2026 fiscal year, the school district shall receive 100% of the excess
funds received in the 2025 fiscal year;
(B)
in the 2027 fiscal year, the school district shall receive 66% of the excess
funds received in the 2025 fiscal year;
(C)
in the 2028 fiscal year, the school district shall receive 33% of the excess
funds received in the 2025 fiscal year; and
(D)
in the 2029 fiscal year, the school district may not receive excess funds.
(c)
The state board shall:
(i)
calculate the amount of excess funds for each affected school district;
(ii)
notify each affected school district of the phase-out schedule for the excess funds
described in Subsection
(7)(b)
; and
(iii)
oversee the phase-out process described in this Subsection
(7)
.
Section 2.
Effective Date.
This bill takes effect on
July 1, 2026
.
3-5-26 11:39 AM