1     
PROPERTY TAX VALUATION AND ASSESSMENT

2     
MODIFICATIONS

3     
2015 GENERAL SESSION

4     
STATE OF UTAH

5     
Chief Sponsor: Curtis S. Bramble

6     
House Sponsor: Daniel McCay

7     

8     LONG TITLE
9     General Description:
10          This bill modifies provisions related to property assessed by the State Tax Commission.
11     Highlighted Provisions:
12          This bill:
13          ▸     authorizes the State Tax Commission to consult with a county during the valuation
14     process;
15          ▸     addresses provisions related to objections that are required to be contained in certain
16     property tax notices;
17          ▸     addresses objections to a property tax assessment with respect to property assessed
18     by the State Tax Commission;
19          ▸     requires a study by the Revenue and Taxation Interim Committee and provides a
20     repeal date for the study;
21          ▸     repeals obsolete language; and
22          ▸     makes technical and conforming changes.
23     Money Appropriated in this Bill:
24          None
25     Other Special Clauses:
26          This bill provides a special effective date.
27     Utah Code Sections Affected:
28     AMENDS:
29          59-2-201, as last amended by Laws of Utah 2009, Chapters 226 and 235
30          59-2-802, as last amended by Laws of Utah 1997, Chapter 309
31          59-2-803, as last amended by Laws of Utah 1997, Chapter 309
32          59-2-1007, as last amended by Laws of Utah 2008, Chapter 382
33          63I-2-259, as last amended by Laws of Utah 2014, Chapter 256
34     

35     Be it enacted by the Legislature of the state of Utah:
36          Section 1. Section 59-2-201 is amended to read:
37          59-2-201. Assessment by commission -- Determination of value of mining
38     property -- Notification of assessment -- Local assessment of property assessed by the
39     unitary method -- Commission may consult with county.
40          (1) (a) By May 1 of each year the following property, unless otherwise exempt under
41     the Utah Constitution or under Part 11, Exemptions, Deferrals, and Abatements, shall be
42     assessed by the commission at 100% of fair market value, as valued on January 1, in
43     accordance with this chapter:
44          (i) except as provided in Subsection (2), all property which operates as a unit across
45     county lines, if the values must be apportioned among more than one county or state;
46          (ii) all property of public utilities;
47          (iii) all operating property of an airline, air charter service, and air contract service;
48          (iv) all geothermal fluids and geothermal resources;
49          (v) all mines and mining claims except in cases, as determined by the commission,
50     where the mining claims are used for other than mining purposes, in which case the value of
51     mining claims used for other than mining purposes shall be assessed by the assessor of the
52     county in which the mining claims are located; and
53          (vi) all machinery used in mining, all property or surface improvements upon or
54     appurtenant to mines or mining claims. For the purposes of assessment and taxation, all
55     processing plants, mills, reduction works, and smelters which are primarily used by the owner
56     of a mine or mining claim for processing, reducing, or smelting minerals taken from a mine or
57     mining claim shall be considered appurtenant to that mine or mining claim, regardless of actual
58     location.
59          (b) (i) For purposes of Subsection (1)(a)(iii), operating property of an air charter
60     service does not include an aircraft that is:
61          (A) used by the air charter service for air charter; and
62          (B) owned by a person other than the air charter service.
63          (ii) For purposes of this Subsection (1)(b):
64          (A) "person" means a natural person, individual, corporation, organization, or other
65     legal entity; and
66          (B) a person does not qualify as a person other than the air charter service as described
67     in Subsection (1)(b)(i)(B) if the person is:
68          (I) a principal, owner, or member of the air charter service; or
69          (II) a legal entity that has a principal, owner, or member of the air charter service as a
70     principal, owner, or member of the legal entity.
71          (2) The commission shall assess and collect property tax on state-assessed commercial
72     vehicles at the time of original registration or annual renewal.
73          (a) The commission shall assess and collect property tax annually on state-assessed
74     commercial vehicles which are registered pursuant to Section 41-1a-222 or 41-1a-228.
75          (b) State-assessed commercial vehicles brought into the state which are required to be
76     registered in Utah shall, as a condition of registration, be subject to ad valorem tax unless all
77     property taxes or fees imposed by the state of origin have been paid for the current calendar
78     year.
79          (c) Real property, improvements, equipment, fixtures, or other personal property in this
80     state owned by the company shall be assessed separately by the local county assessor.
81          (d) The commission shall adjust the value of state-assessed commercial vehicles as
82     necessary to comply with 49 U.S.C. Sec. 14502, and the commission shall direct the county
83     assessor to apply the same adjustment to any personal property, real property, or improvements
84     owned by the company and used directly and exclusively in their commercial vehicle activities.
85          (3) The method for determining the fair market value of productive mining property is
86     the capitalized net revenue method or any other valuation method the commission believes, or
87     the taxpayer demonstrates to the commission's satisfaction, to be reasonably determinative of
88     the fair market value of the mining property. The rate of capitalization applicable to mines
89     shall be determined by the commission, consistent with a fair rate of return expected by an
90     investor in light of that industry's current market, financial, and economic conditions. In no
91     event may the fair market value of the mining property be less than the fair market value of the
92     land, improvements, and tangible personal property upon or appurtenant to the mining
93     property.
94          (4) Immediately following the assessment, the owner or operator of the assessed
95     property shall be notified of the assessment by certified mail. The assessor of the county in
96     which the property is located shall also be immediately notified of the assessment by certified
97     mail.
98          (5) The commission may consult with a county in valuing property in accordance with
99     this part.
100          [(5)] (6) Property assessed by the unitary method, which is not necessary to the conduct
101     and does not contribute to the income of the business as determined by the commission, shall
102     be assessed separately by the local county assessor.
103          [(6) (a) Except as provided in Subsection (6)(b), for calendar years beginning on or
104     after January 1, 2009 and ending on or before December 31, 2010, the method for determining
105     the fair market value of an aircraft, aircraft type, or mobile flight equipment assessed under this
106     part is equal to:]
107          [(i) the value referenced in the Used Price for Avg Acft Wholesale column of the
108     Airliner Price Guide by make, model, series, and year of manufacture; minus]
109          [(ii) 20% of the value described in Subsection (6)(a)(i).]
110          [(b) Notwithstanding Subsection (6)(a), for calendar years beginning on or after
111     January 1, 2009 and ending on or before December 1, 2010, the method for determining the
112     fair market value of an aircraft not listed in the Airliner Price Guide is equal to:]
113          [(i) the value references in the Average Wholesale column of the Aircraft Bluebook
114     Price Digest by make, model, series, and year of manufacture; minus]
115          [(ii) 20% of the value described in Subsection (6)(b)(i).]
116          Section 2. Section 59-2-802 is amended to read:
117          59-2-802. Statement of commission transmitted to county auditors -- Contents of
118     statement -- Duties of auditors -- Change of assessment prohibited.
119          (1) The commission shall, before June 8, annually transmit to the county auditor of
120     each county to which an apportionment has been made a statement showing:
121          (a) the property assessed;
122          (b) the value of the property, as fixed and apportioned to the tax areas; and
123          (c) the aggregate amount of taxable value placed in dispute [by property owners within
124     the county pursuant to] in accordance with Section 59-2-1007.
125          (2) The county auditor shall enter the:
126          (a) statement on the county assessment roll or book; and
127          (b) amount of the assessment apportioned to the county in the column of the
128     assessment book or roll which shows for the county the total taxable value of all property.
129          (3) A county board of equalization may not change any assessment fixed by the
130     commission.
131          Section 3. Section 59-2-803 is amended to read:
132          59-2-803. Statement transmitted by county auditors to governing bodies --
133     Contents of statement.
134          (1) The county auditor shall transmit to the governing bodies of taxing entities in
135     which the property is located, or to which any of the value is apportioned, a statement of the
136     valuation of all property as fixed and apportioned by the commission and reported under
137     Section 59-2-802.
138          (2) The statement under Subsection (1) shall contain the aggregate amount of taxable
139     value placed in dispute [by property owners within the county pursuant to] in accordance with
140     Section 59-2-1007.
141          (3) The statement shall be transmitted at the same time and in the same manner as the
142     statement is transmitted under Section 59-2-924.
143          Section 4. Section 59-2-1007 is amended to read:
144          59-2-1007. Objection to assessment by commission -- Application -- Contents of
145     application -- Amending an application -- Hearings -- Appeals.
146          (1) (a) [If] Subject to the other provisions of this section, if the owner of [any] property
147     assessed by the commission[, or any county upon a showing of reasonable cause,] objects to the
148     assessment, the owner [or the county may,] may apply to the commission for a hearing on the
149     objection on or before the later of:
150          (i) June 1; or [a day within]
151          (ii) 30 days [of] after the date the commission mails the notice of assessment[ is mailed
152     by the commission pursuant to] in accordance with Section 59-2-201[, apply to the commission
153     for a hearing].
154          (b) The commission shall allow [the following] an owner that meets the requirements
155     of Subsection (1)(a) to be a party at a hearing under this section[:].
156          [(i) the owner; and]
157          [(ii) the county upon a showing of reasonable cause.]
158          (2) Subject to the other provisions of this section, a county that objects to the
159     assessment of property assessed by the commission may apply to the commission for a hearing
160     on the objection:
161          (a) for an assessment with respect to which the owner has applied to the commission
162     for a hearing on the objection under Subsection (1), if the county applies to the commission to
163     become a party to the hearing on the objection no later than 30 days after the date the owner
164     applied to the commission for the hearing on the objection; or
165          (b) for an assessment with respect to which the owner has not applied to the
166     commission for a hearing on the objection under Subsection (1), if the county:
167          (i) reasonably believes that the commission should have assessed the property for the
168     current calendar year at a fair market value that is at least the lesser of an amount that is:
169          (A) 50% greater than the value at which the commission is assessing the property for
170     the current calendar year; or
171          (B) 50% greater than the value at which the commission assessed the property for the
172     prior calendar year; and
173          (ii) applies to the commission for a hearing on the objection no later than 30 days after
174     the last day on which the owner could have applied to the commission for a hearing on the
175     objection under Subsection (1).
176          (3) Before a county may apply to the commission for a hearing under this section on an
177     objection to an assessment, a majority of the members of the county legislative body shall
178     approve filing an application under this section.
179          (4) (a) The commission shall allow a county that meets the requirements of
180     Subsections (2) and (3) to be a party at a hearing under this section.
181          (b) The commission shall allow an owner to be a party at a hearing under this section
182     on an objection to an assessment a county files in accordance with Subsection (2)(b).
183          [(2) The] (5) An owner or a county shall include in [the] an application under
184     [Subsection (1)(a)] this section:
185          (a) a written statement:
186          (i) setting forth the known facts and legal basis supporting a different fair market value
187     than the value assessed by the commission; and
188          (ii) for an assessment described in Subsection (2)(b), establishing the county's
189     reasonable belief that the commission should have assessed the property for the current
190     calendar year at a fair market value that is at least the lesser of an amount that is:
191          (A) 50% greater than the value at which the commission is assessing the property for
192     the current calendar year; or
193          (B) 50% greater than the value at which the commission assessed the property for the
194     prior calendar year; and
195          (b) the owner's or county's estimate of the fair market value of the property.
196          [(3)] (6) (a) [An] Except as provided in Subsection (6)(b), an owner's or a county's
197     estimate on an application under [Subsection (2)] this section of the fair market value of the
198     property may be amended prior to the hearing as provided by rule.
199          (b) A county may not amend the fair market value of property under this Subsection (6)
200     to equal an amount that is less than the lesser of:
201          (i) the value at which the commission is assessing the property for the current calendar
202     year plus 50%; or
203          (ii) the value at which the commission assessed the property for the prior calendar year
204     plus 50%.
205          [(b)] (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
206     Act, the commission may make rules governing the procedures for amending an estimate of
207     fair market value under this Subsection [(3)(a)] (6).
208          (7) In applying to the commission for a hearing on an objection under this section:
209          (a) a county may estimate the fair market value of the property using a valuation
210     methodology the county considers to be appropriate, regardless of:
211          (i) the valuation methodology used previously in valuing the property; or
212          (ii) the valuation methodology an owner asserts; and
213          (b) an owner may estimate the fair market value of the property using a valuation
214     methodology the owner considers to be appropriate, regardless of:
215          (i) the valuation methodology used previously in valuing the property; or
216          (ii) the valuation methodology a county asserts.
217          [(4)] (8) (a) An owner [applying] who applies to the commission for a hearing in
218     accordance with Subsection (1) shall, for the property for which the owner objects to the
219     commission's assessment, file a copy of the application with the county auditor of each county
220     in which the property is located.
221          (b) A county auditor [receiving] who receives a copy of an application in accordance
222     with Subsection [(4)] (8)(a) shall provide a copy of the application to the county:
223          (i) assessor;
224          (ii) attorney;
225          (iii) legislative body; and
226          (iv) treasurer.
227          [(5)] (9) (a) On or before August 1, the commission shall conduct a scheduling
228     conference with all parties to a hearing under this section.
229          (b) At the scheduling conference under Subsection [(5)] (9)(a), the commission shall
230     establish dates for:
231          (i) the completion of discovery;
232          (ii) the filing of prehearing motions; and
233          (iii) conducting a hearing on the objection to the assessment.
234          [(6)] (10) (a) The commission shall issue a written decision no later than 120 days after
235     the later of the date:
236          (i) the hearing [described in Subsection (5)(b)] under this section is completed; or
237          (ii) all posthearing briefs are submitted.
238          (b) [Any applications not resolved by the commission within] If the commission does
239     not issue a written decision on an objection to an assessment under this section within a
240     two-year period [from the date of filing are] after the date an application under this section is
241     filed, the objection is considered to be denied, unless the parties stipulate to a different time
242     period for resolving [an application] the objection.
243          (c) A party may appeal to the district court [pursuant to] in accordance with Section
244     59-1-601 within 30 days [from the day on which] after the date an [application] objection is
245     considered to be denied.
246          [(7)] (11) At the hearing on [the application] an objection under this section, the
247     commission may increase, lower, or sustain the assessment if:
248          (a) the commission finds an error in the assessment; or
249          (b) the commission determines that increasing, lowering, or sustaining the assessment
250     is necessary to equalize the assessment with other similarly assessed property.
251          [(8)] (12) (a) [(i)] The commission shall send notice of a commission action under
252     Subsection [(7)] (11) to a county auditor if:
253          [(A)] (i) the commission proposes to adjust an assessment [which was made pursuant
254     to] the commission made in accordance with Section 59-2-201;
255          [(B)] (ii) the county's tax revenues may be affected by the commission's decision; and
256          [(C)] (iii) the county [has not already been made a party pursuant to Subsection (1)] is
257     not a party to the hearing under this section.
258          [(ii)] (b) The written notice [sent by the commission under Subsection (8)(a)(i)]
259     described in Subsection (12)(a):
260          [(A)] (i) may be transmitted by:
261          [(I)] (A) any form of electronic communication;
262          [(II)] (B) first class mail; or
263          [(III)] (C) private carrier; and
264          [(B)] (ii) shall request the county to show good cause why the commission should not
265     adjust the assessment by requesting the county to provide to the commission a written
266     statement[: (I)] setting forth the known facts and legal basis for not adjusting the assessment[;
267     and (II)] within 30 days from the date of the written notice.
268          [(b)] (c) If a county provides a written statement described in Subsection (12)(b) to the
269     commission [a written statement in accordance with Subsection (8)(a)(ii)(B)], the commission
270     shall:
271          (i) hold a hearing or take other appropriate action to consider the good cause [alleged
272     by the county] the county provides in the written statement; and
273          (ii) issue a written decision increasing, lowering, or sustaining the assessment.
274          [(c)] (d) If a county does not provide [to the commission] a written statement [in
275     accordance with Subsection (8)(a)(ii)(B),] described in Subsection (12)(b) to the commission
276     within 30 days after the commission sends the notice described in Subsection [(8)] (12)(a), the
277     commission shall adjust the assessment and send a copy of the commission's written decision
278     to the county.
279          [(9)] (13) Subsection [(8)] (12) does not limit the rights of [any county as described in
280     Subsection (1)] a county as provided in Subsections (2) and (4)(a).
281          (14) (a) On or before the November 2018 interim meeting, the Revenue and Taxation
282     Interim Committee shall study the process for a county to object to an assessment of property
283     assessed by the commission.
284          (b) As part of the study required by Subsection (14)(a), the Revenue and Taxation
285     Interim Committee shall determine whether to draft legislation to modify the process for a
286     county to object to an assessment of property assessed by the commission.
287          Section 5. Section 63I-2-259 is amended to read:
288          63I-2-259. Repeal dates -- Title 59.
289          (1) Subsection 59-2-919(10) is repealed December 31, 2015.
290          (2) Subsection 59-2-919.1(4) is repealed December 31, 2015.
291          (3) Subsection 59-2-1007(14) is repealed on December 31, 2018.
292          Section 6. Effective date.
293          This bill takes effect on January 1, 2016.