First Substitute H.B. 435

Representative Douglas V. Sagers proposes the following substitute bill:


             1     
TAXATION OF PROPERTY AMENDMENTS

             2     
2014 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Douglas V. Sagers

             5     
Senate Sponsor: Peter C. Knudson

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill amends provisions related to the taxation of property.
             10      Highlighted Provisions:
             11          This bill:
             12          .    defines "diminished productive value";    
             13          .    requires a county assessor to consider diminished productive value in determining
             14      the fair market value of property;
             15          .    requires a county assessor, under certain circumstances, to consider whether
             16      property has been used for hazardous waste storage or radioactive waste storage in
             17      determining fair market value;
             18          .    provides that provisions requiring a county assessor to consider certain factors in
             19      determining the fair market value of property apply to the privilege tax; and
             20          .    makes technical and conforming changes.
             21      Money Appropriated in this Bill:
             22          None
             23      Other Special Clauses:
             24          This bill takes effect on January 1, 2015.
             25      Utah Code Sections Affected:


             26      AMENDS:
             27           59-4-101 , as last amended by Laws of Utah 2006, Chapter 36
             28      ENACTS:
             29           59-2-301.6 , Utah Code Annotated 1953
             30           59-2-301.7 , Utah Code Annotated 1953
             31     
             32      Be it enacted by the Legislature of the state of Utah:
             33          Section 1. Section 59-2-301.6 is enacted to read:
             34          59-2-301.6. Definitions -- Assessment of property having a diminished productive
             35      value.
             36          (1) As used in this section, "diminished productive value" means that property has no,
             37      or a significantly reduced, ability to generate income as a result of:
             38          (a) a parcel size requirement established under a land use ordinance or zoning map
             39      adopted by a:
             40          (i) city or town in accordance with Title 10, Chapter 9a, Part 5, Land Use Ordinances;
             41      or
             42          (ii) a county in accordance with Title 17, Chapter 27a, Part 5, Land Use Ordinances;
             43          (b) the property being severed from other property in a manner that permanently
             44      restricts the ability to generate income from the property; or
             45          (c) a particular right of use being severed from the property in a manner that
             46      permanently restricts the ability to generate income from the property.
             47          (2) In assessing the fair market value of property, a county assessor shall consider as
             48      part of the determination of fair market value whether property has diminished productive
             49      value.
             50          (3) This section does not prohibit a county assessor from including as part of a
             51      determination of the fair market value of property any other factor affecting the fair market
             52      value of the property.
             53          Section 2. Section 59-2-301.7 is enacted to read:
             54          59-2-301.7. Definitions -- Assessment of property used for radioactive or
             55      hazardous waste storage.
             56          (1) As used in this section:


             57          (a) "Hazardous waste" is as defined in Section 19-6-102 .
             58          (b) (i) "Radioactive waste" means:
             59          (A) low-level radioactive waste as defined in 42 U.S.C. Sec. 10101; or
             60          (B) high-level radioactive waste as defined in 42 U.S.C. Sec. 10101.
             61          (ii) "Radioactive waste" does not include naturally occurring radioactive materials.
             62          (2) Subject to Subsection (3), in assessing the fair market value of property, a county
             63      assessor shall consider, as part of the determination of fair market value, whether property that
             64      is not currently used for the storage of hazardous waste or radioactive waste has been used in
             65      the past for the storage of hazardous waste or radioactive waste in a manner that affects:
             66          (a) the functionality of the property;
             67          (b) the ability to use the property; or
             68          (c) property rights.
             69          (3) Subsection (2) applies to the extent a county assessor knows, or reasonably should
             70      have known, that property has been used in the past for the storage of hazardous waste or
             71      radioactive waste.
             72          (4) This section does not prohibit a county assessor from including as part of a
             73      determination of the fair market value of property any other factor affecting the fair market
             74      value of the property.
             75          Section 3. Section 59-4-101 is amended to read:
             76           59-4-101. Tax basis -- Exceptions -- Assessment and collection.
             77          (1) (a) Except as provided in Subsections (1)(b) and (c), a tax is imposed on the
             78      possession or other beneficial use enjoyed by any person of any real or personal property which
             79      for any reason is exempt from taxation, if that property is used in connection with a business
             80      conducted for profit.
             81          (b) Any interest remaining in the state in state lands after subtracting amounts paid or
             82      due in part payment of the purchase price as provided in Subsection 59-2-1103 (2)(b)(i) under a
             83      contract of sale is subject to taxation under this chapter regardless of whether the property is
             84      used in connection with a business conducted for profit.
             85          (c) The tax imposed under Subsection (1)(a) does not apply to property exempt from
             86      taxation under Section 59-2-1114 .
             87          (2) The tax imposed under this chapter is the same amount that the ad valorem property


             88      tax would be if the possessor or user were the owner of the property. The amount of any
             89      payments which are made in lieu of taxes is credited against the tax imposed on the beneficial
             90      use of property owned by the federal government.
             91          (3) A tax is not imposed under this chapter on the following:
             92          (a) the use of property which is a concession in, or relative to, the use of a public
             93      airport, park, fairground, or similar property which is available as a matter of right to the use of
             94      the general public;
             95          (b) the use or possession of property by a religious, educational, or charitable
             96      organization;
             97          (c) the use or possession of property if the revenue generated by the possessor or user
             98      of the property through its possession or use of the property inures only to the benefit of a
             99      religious, educational, or charitable organization and not to the benefit of any other person;
             100          (d) the possession or other beneficial use of public land occupied under the terms of an
             101      agricultural lease or permit issued by the United States or this state;
             102          (e) the use or possession of any lease, permit, or easement unless the lease, permit, or
             103      easement entitles the lessee or permittee to exclusive possession of the premises to which the
             104      lease, permit, or easement relates. Every lessee, permittee, or other holder of a right to remove
             105      or extract the mineral covered by the holder's lease, right, permit, or easement except from
             106      brines of the Great Salt Lake, is considered to be in possession of the premises,
             107      notwithstanding the fact that other parties may have a similar right to remove or extract another
             108      mineral from the same lands or estates;
             109          (f) the use or possession of property by a public agency, as defined in Section
             110      11-13-103 , to the extent that the ownership interest of the public agency in that property is
             111      subject to a fee in lieu of ad valorem property tax under Section 11-13-302 ; or
             112          (g) the possession or beneficial use of public property as a tollway by a private entity
             113      through a tollway development agreement as defined in Section 72-6-202 .
             114          (4) A tax imposed under this chapter is assessed to the possessors or users of the
             115      property on the same forms, and collected and distributed at the same time and in the same
             116      manner, as taxes assessed owners, possessors, or other claimants of property which is subject to
             117      ad valorem property taxation. The tax is not a lien against the property, and no tax-exempt
             118      property may be attached, encumbered, sold, or otherwise affected for the collection of the tax.


             119          (5) Sections 59-2-301.1 through 59-2-301.7 apply for purposes of assessing a tax under
             120      this chapter.
             121          Section 4. Effective date.
             122          This bill takes effect on January 1, 2015.


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