H.B. 78

1

PROPERTY TAX DEFERRAL - SENIOR
2 CITIZENS
3 2007 GENERAL SESSION
4 STATE OF UTAH
5 Chief Sponsor: Gage Froerer
6 Senate Sponsor: Dennis E. Stowell
7
8 LONG TITLE
9 General Description:
10 This bill modifies the Property Tax Act to amend the provisions relating to the
11 abatement or deferral of certain property taxes.
12 Highlighted Provisions:
13 This bill:
14 . modifies the provisions relating to the abatement or deferral of property taxes for
15 the poor;
16 . provides that certain property may not be subjected to a tax sale during the period of
17 deferral if a county grants a deferral;
18 . eliminates the requirement that a deferral applicant obtain approval from the
19 applicant's mortgage lender before a county may grant a deferral;
20 . defines terms;
21 . requires a county to grant a deferral of a certain portion of a claimant's residential
22 property taxes for certain individuals 70 years of age or older or an unmarried
23 surviving spouse; and
24 . makes technical changes.
25 Monies Appropriated in this Bill:
26 None
27 Other Special Clauses:

28 This bill takes effect on January 1, 2008.
29 Utah Code Sections Affected:
30 AMENDS:
31 59-2-1107, as last amended by Chapters 221 and 310, Laws of Utah 2001
32 59-2-1108, as last amended by Chapter 143, Laws of Utah 2003
33 59-2-1109, as last amended by Chapter 229, Laws of Utah 2003
34 ENACTS:
35 59-2-1108.5, Utah Code Annotated 1953
36
37 Be it enacted by the Legislature of the state of Utah:
38 Section 1. Section 59-2-1107 is amended to read:
39 59-2-1107. Poor persons -- Amount of abatement.
40 [The] (1) A county may remit or abate the taxes of [any] a poor person meeting the
41 requirements of Section 59-2-1109 in an amount not exceeding the lesser of:
42 [(1)] (a) the amount provided as a homeowner's credit for the lowest household income
43 bracket under Section 59-2-1208 ; or
44 [(2)] (b) 50% of the total tax levied for the current year.
45 (2) (a) For purposes of this Subsection (2):
46 (i) "Property taxes due" means the taxes due on a person's property:
47 (A) for which an abatement is granted by a county under this section; and
48 (B) for the calendar year for which the abatement is granted.
49 (ii) "Property taxes paid" is an amount equal to the sum of:
50 (A) the amount of the property taxes the person paid for the taxable year for which the
51 person is applying for the abatement; and
52 (B) the amount of the abatement the county grants under this section.
53 (b) A county granting an abatement to a person under this section shall issue a refund
54 to that person as described in Subsection (2)(c), if the difference described in Subsection (2)(c)
55 is $1 or more.
56 (c) The refund amount is equal to the property taxes paid minus the property taxes due.
57 Section 2. Section 59-2-1108 is amended to read:
58 59-2-1108. Poor persons -- Deferral of taxes -- Interest rate -- Treatment of

59 deferred taxes.
60 (1) (a) [The] A county may, after giving notice, defer any tax levied on the residential
61 property[, subject to the conditions] of a poor person meeting the requirements of Section
62 59-2-1109 .
63 (b) A deferral may be granted by a county at any time if the applicant is not the owner
64 of income producing assets that could be liquidated to pay the tax.
65 (c) Any assets transferred to relatives in the prior three-year period shall be considered
66 by a county in making the county's determination as to whether to grant a deferral under this
67 section.
68 [(b)] (2) If the [owner of the property described in Subsection (1)(a) is poor] county
69 grants a deferral described in Subsection (1)(a), the property may not be subjected to a tax sale
70 during the period of [deferment] deferral.
71 [(2)] (3) (a) (i) Taxes deferred by the county accumulate with interest, as provided in
72 Subsection (3)(b), as a lien against the property until the property is sold [or otherwise disposed
73 of].
74 (ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, for
75 purposes of this section, the commission shall broadly define the term "sold" and include in its
76 definition instances where no legal transfer of title occurs.
77 (b) Deferred taxes under this section:
78 (i) bear interest at an interest rate equal to the lesser of:
79 (A) 6%; or
80 (B) the [targeted] federal funds rate:
81 (I) as defined in [12] 31 C.F.R. Sec. [201.2] 203.2; and
82 (II) that exists on the January 1 immediately preceding the day on which the taxes are
83 deferred; and
84 (ii) have the same status as a lien under Sections 59-2-1301 and 59-2-1325 .
85 [(3) Deferral may be granted by the county at any time if: (a) the holder of any
86 mortgage or trust deed outstanding on the property gives written approval of the application;
87 and (b) the applicant is not the owner of income producing assets that could be liquidated to
88 pay the tax.]
89 [(4) Any assets transferred to relatives in the prior three-year period shall be considered

90 by the county in making the county's determination.]
91 Section 3. Section 59-2-1108.5 is enacted to read:
92 59-2-1108.5. Deferral of taxes -- Interest rate -- Treatment of deferred taxes.
93 (1) For purposes of this section:
94 (a) "Claimant" means:
95 (i) an owner of qualifying residential property:
96 (A) regardless of income; and
97 (B) who:
98 (I) files an application in accordance with Section 59-2-1109 ;
99 (II) is 70 years of age or older on or before the date on which an application for deferral
100 described in Subsection (1)(a)(i)(B)(I) is filed;
101 (III) owes a property tax on the qualifying residential property; and
102 (IV) resides for not less than ten months of each year in the qualifying residential
103 property;
104 (ii) a grantor of a trust:
105 (A) regardless of income; and
106 (B) holding title to qualifying residential property:
107 (I) who files an application in accordance with Section 59-2-1109 ;
108 (II) who is 70 years of age or older on or before the date on which an application for
109 deferral described in Subsection (1)(a)(ii)(B)(I) is filed;
110 (III) if a property tax is owed on the qualifying residential property; and
111 (IV) who resides for not less than ten months of each year in the qualifying residential
112 property; or
113 (iii) the unmarried surviving spouse of an owner described in Subsection (1)(a)(i) or a
114 grantor described in Subsection (1)(a)(ii) of qualifying residential property if:
115 (A) the unmarried surviving spouse, regardless of age, files an application in
116 accordance with Section 59-2-1109 ;
117 (B) a property tax is owed on the qualifying residential property;
118 (C) the unmarried surviving spouse resides for not less than ten months of each year in
119 the qualifying residential property; and
120 (D) the deceased spouse previously obtained a deferral:

121 (I) in accordance with this section; and
122 (II) for the qualifying residential property described in (1)(a)(iii)(B).
123 (b) "Qualifying residential property" means residential property:
124 (i) as defined in Section 59-2-102 ;
125 (ii) that is single-family residential property; and
126 (iii) owned by a claimant.
127 (2) A county shall grant a deferral of up to 50% of the property taxes levied on the
128 claimant's qualifying residential property if the claimant files an application in accordance with
129 Section 59-2-1109 .
130 (3) (a) (i) Taxes deferred by a county under this section accumulate with interest as a
131 lien against a claimant's qualifying residential property until the qualifying residential property
132 is sold.
133 (ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, for
134 purposes of this section, the commission shall broadly define the term "sold" and include in its
135 definition instances where no legal transfer of title occurs.
136 (b) Deferred taxes under this section:
137 (i) bear interest at an interest rate equal to the lesser of:
138 (A) 6%; or
139 (B) the federal funds rate:
140 (I) as defined in 31 C.F.R. Sec. 203.2; and
141 (II) that exists on the January 1 immediately preceding the day on which the taxes are
142 deferred; and
143 (ii) have the same status as a lien under Sections 59-2-1301 and 59-2-1325 .
144 (4) If a county grants a deferral in accordance with this section, the qualifying
145 residential property may not be subjected to a tax sale during the period of deferral for the
146 amount of the property tax deferred.
147 Section 4. Section 59-2-1109 is amended to read:
148 59-2-1109. Deferral or abatement -- Application -- Definition of indigent persons.
149 [(1) A person under the age of 65 years is not eligible for a deferral or abatement
150 provided for poor people under Sections 59-2-1107 and 59-2-1108 unless:]
151 [(a) the county finds that extreme hardship would prevail if the grants were not made;

152 or]
153 [(b) the person is disabled.]
154 [(2)] (1) (a) An application for [the deferral or] an abatement under Section 59-2-1107
155 or a deferral under Section 59-2-1108 or 59-2-1108.5 shall be filed on or before September 1
156 with the county in which the property is located.
157 (b) The application shall include a signed statement setting forth [the]:
158 (i) eligibility [of the applicant] for the [deferral or] abatement[.] or deferral; and
159 (ii) the amount of abatement or deferral the applicant is applying for.
160 (c) Both husband and wife shall sign the application if the husband [and] or wife seek a
161 deferral or abatement on a residence:
162 (i) in which they both reside; and
163 (ii) which they own as joint tenants.
164 (d) A county may extend the deadline for filing under Subsection [(2)] (1)(a) until
165 December 31 if the county finds that good cause exists to extend the deadline.
166 [(3) (a) For purposes of this Subsection (3):]
167 [(i) "Property taxes due" means the taxes due on a person's property:]
168 [(A) for which an abatement is granted by a county under Section 59-2-1107 ; and]
169 [(B) for the calendar year for which the abatement is granted.]
170 [(ii) "Property taxes paid" is an amount equal to the sum of:]
171 [(A) the amount of the property taxes the person paid for the taxable year for which the
172 person is applying for the abatement; and]
173 [(B) the amount of the abatement the county grants under Section 59-2-1107 .]
174 [(b) A county granting an abatement to a person under Section 59-2-1107 shall refund
175 to that person an amount equal to the amount by which the person's property taxes paid exceed
176 the person's property taxes due, if that amount is $1 or more.]
177 (2) If the claimant is the grantor of a trust holding title to real or tangible personal
178 property on which an abatement or deferral is claimed, the claimant may claim the portion of
179 the abatement or deferral under Section 59-2-1107 , 59-2-1108 , or 59-2-1108.5 and be treated
180 as the owner of that portion of the property held in trust for which the claimant proves to the
181 satisfaction of the county that:
182 (a) title to the portion of the trust will revest in the claimant upon the exercise of a

183 power:
184 (i) by:
185 (A) the claimant as grantor of the trust;
186 (B) a nonadverse party; or
187 (C) both the claimant and a nonadverse party; and
188 (ii) regardless of whether the power is a power:
189 (A) to revoke;
190 (B) to terminate;
191 (C) to alter;
192 (D) to amend; or
193 (E) to appoint;
194 (b) the claimant is obligated to pay the taxes on that portion of the trust property
195 beginning January 1 of the year the claimant claims the abatement or deferral; and
196 (c) the claimant meets the requirements under Section 59-2-1107 , 59-2-1108 , or
197 59-2-1108.5 for the abatement or deferral.
198 (3) A person under the age of 65 years is not eligible for an abatement under Section
199 59-2-1107 or a deferral under Section 59-2-1108 unless:
200 (a) the county finds that extreme hardship would prevail if the grants were not made; or
201 (b) the person is disabled.
202 (4) (a) For purposes of [this section] Sections 59-2-1107 and 59-2-1108 , and this
203 Subsection (4):
204 [(a) a poor person is any person:]
205 (i) "Poor person" means a person:
206 [(i)] (A) whose total household income as defined in Section 59-2-1202 is less than the
207 maximum household income [certified to] for which a homeowner's credit is allowed under
208 Subsection 59-2-1208 (1);
209 [(ii)] (B) who resides for not less than ten months of each year in the residence for
210 which the [tax relief, deferral, or] abatement or deferral is requested; and
211 [(iii)] (C) who is unable to meet the tax assessed on the person's residential property as
212 the tax becomes due[; and].
213 [(b)] (ii) "Residence" includes a mobile home as defined under Section 70D-1-19 .

214 [(5) If the claimant is the grantor of a trust holding title to real or tangible personal
215 property on which an abatement or deferral is claimed, the claimant may claim the portion of
216 the abatement or deferral under Section 59-2-1107 or 59-2-1108 and be treated as the owner of
217 that portion of the property held in trust for which the claimant proves to the satisfaction of the
218 county that:]
219 [(a) title to the portion of the trust will revest in the claimant upon the exercise of a
220 power:]
221 [(i) by:]
222 [(A) the claimant as grantor of the trust;]
223 [(B) a nonadverse party; or]
224 [(C) both the claimant and a nonadverse party; and]
225 [(ii) regardless of whether the power is a power:]
226 [(A) to revoke;]
227 [(B) to terminate;]
228 [(C) to alter;]
229 [(D) to amend; or]
230 [(E) to appoint;]
231 [(b) the claimant is obligated to pay the taxes on that portion of the trust property
232 beginning January 1 of the year the claimant claims the abatement or deferral; and]
233 [(c) the claimant meets the requirements under this part for the abatement or deferral.]
234 [(6) The commission shall adopt rules to implement this section.]
235 [(7)] (b) Any poor person may qualify for:
236 [(a) the deferral of taxes under Section 59-2-1108 ;]
237 [(b) if the person meets the requisites of this section, for the]
238 (i) an abatement of taxes under Section 59-2-1107 if the person meets the requirements
239 of this section; [or]
240 (ii) a deferral of taxes under Section 59-2-1108 ; or
241 [(c)] (iii) both:
242 [(i) the deferral described in Subsection (7) (a); and]
243 [(ii)] (A) the abatement described in Subsection [(7)(b).] (4)(b)(i); and
244 (B) the deferral described in Subsection (4)(b)(ii).

245 (5) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
246 commission may adopt rules to implement this section.
247 Section 5. Effective date.
248 This bill takes effect on January 1, 2008.




Legislative Review Note
as of 12-18-06 4:06 PM

Office of Legislative Research and General Counsel