SB 251

This bill creates a levy limit exception for political subdivisions that receive

certain utility aid payments.

Generally under current law, local levy limits are applied to the property tax

levies that are imposed by a political subdivision in December of each year. Current

law prohibits any political subdivision from increasing its levy by a percentage that

exceeds its “valuation factor," which is defined as the greater of either zero percent

or the percentage change in the political subdivision's equalized value due to new

construction, less improvements removed.

Current law contains a number of exceptions to the levy limit, such as amounts

a county levies for a countywide emergency medical system, for a county children

with disabilities education board, and for certain bridge and culvert construction and

repair. In addition, a political subdivision may exceed the levy limit that is otherwise

applicable if its governing body adopts a resolution to do so and if that resolution is

approved by the electors in a referendum.

Also under current law, if a power plant that is exempt from property taxes is

decommissioned or closed, and therefore becomes taxable, the county and

municipality where the plant is located receive a utility aid payment from the state

for the first five years in which the plant is subject to the property tax in an amount

equal to a percentage of the utility aid payment that the county or municipality

received for the last year in which the plant was exempt. The percentage decreases

by 20 percent each year.

This bill creates a levy limit exception for a political subdivision that is

receiving these utility aid payments. The amount that is exempt from the levy limit

is equal to the full amount of the utility aid in the first year less the amount of the

utility aid to be paid to the political subdivision in the year in which the levy is

imposed.