S.B. 168

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PROPERTY TAX RESIDENTIAL EXEMPTION
2 1997 GENERAL SESSION
3 STATE OF UTAH
4 Sponsor: David L. Buhler
5 AN ACT RELATING TO REVENUE AND TAXATION; AMENDING THE DEFINITION OF
6 RESIDENTIAL PROPERTY TO INCLUDE SECONDARY RESIDENCES; PROVIDING
7 PROCEDURES FOR A PROPERTY OWNER TO CLAIM A RESIDENTIAL EXEMPTION
8 FOR A SECONDARY RESIDENCE; PROVIDING DEFINITIONS; MAKING TECHNICAL
9 CHANGES; AND PROVIDING FOR RETROSPECTIVE OPERATION.
10 This act affects sections of Utah Code Annotated 1953 as follows:
11 AMENDS:
12 59-2-102, as last amended by Chapter 170, Laws of Utah 1996
13 59-2-103, as last amended by Chapter 275, Laws of Utah 1995
14 Be it enacted by the Legislature of the state of Utah:
15 Section 1. Section 59-2-102 is amended to read:
16 59-2-102. Definitions.
17 As used in this chapter and title:
18 (1) "Aerial applicator" means aircraft or rotorcraft used exclusively for the purpose of
19 engaging in dispensing activities directly affecting agriculture or horticulture with an airworthiness
20 certificate from the Federal Aviation Administration certifying the aircraft or rotorcraft's use for
21 agricultural and pest control purposes.
22 (2) "Air charter service" means an air carrier operation which requires the customer to hire
23 an entire aircraft rather than book passage in whatever capacity is available on a scheduled trip.
24 (3) "Air contract service" means an air carrier operation available only to customers who
25 engage the services of the carrier through a contractual agreement and excess capacity on any trip
26 and is not available to the public at large.
27 (4) "Airline" means any air carrier operating interstate routes on a scheduled basis which

1 offers to fly passengers or cargo on the basis of available capacity on regularly scheduled routes.
2 (5) "Assessment roll" means a permanent record of the assessment of property as assessed
3 by the county assessor and the commission and may be maintained manually or as a computerized
4 file as a consolidated record or as multiple records by type, classification, or categories.
5 (6) "Certified revenue levy" means a property tax levy that provides the same amount of
6 ad valorem property tax revenue as was collected for the prior year, plus new growth, but exclusive
7 of revenue from collections from redemptions, interest, and penalties.
8 (7) (a) "Escaped property" means any property, whether personal, land, or any
9 improvements to the property, subject to taxation and is:
10 (i) inadvertently omitted from the tax rolls, assigned to the incorrect parcel, or assessed
11 to the wrong taxpayer by the assessing authority;
12 (ii) undervalued or omitted from the tax rolls because of the failure of the taxpayer to
13 comply with the reporting requirements of this chapter; or
14 (iii) undervalued because of errors made by the assessing authority based upon incomplete
15 or erroneous information furnished by the taxpayer.
16 (b) Property which is undervalued because of the use of a different valuation methodology
17 or because of a different application of the same valuation methodology is not "escaped property."
18 (8) "Fair market value" means the amount at which property would change hands between
19 a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both
20 having reasonable knowledge of the relevant facts, and includes the adjustment for intangible
21 values under Sections 59-2-304 and 59-2-201 for real property assessed by the county assessor or
22 the commission. For purposes of taxation, "fair market value" shall be determined using the
23 current zoning laws applicable to the property in question, except in cases where there is a
24 reasonable probability of a change in the zoning laws affecting that property in the tax year in
25 question and the change would have an appreciable influence upon the value.
26 (9) "Farm machinery and equipment," for purposes of the exemption provided under
27 Section 59-2-1101, means tractors, milking equipment and storage and cooling facilities, feed
28 handling equipment, irrigation equipment, harvesters, choppers, grain drills and planters, tillage
29 tools, scales, combines, spreaders, sprayers, haying equipment, and any other machinery or
30 equipment used primarily for agricultural purposes; but does not include vehicles required to be
31 registered with the Motor Vehicle Division or vehicles or other equipment used for business

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1 purposes other than farming.
2 (10) "Geothermal fluid" means water in any form at temperatures greater than 120 degrees
3 centigrade naturally present in a geothermal system.
4 (11) "Geothermal resource" means:
5 (a) the natural heat of the earth at temperatures greater than 120 degrees centigrade; and
6 (b) the energy, in whatever form, including pressure, present in, resulting from, created
7 by, or which may be extracted from that natural heat, directly or through a material medium.
8 (12) "Improvements" includes all buildings, structures, fixtures, fences, and improvements
9 erected upon or affixed to the land, whether the title has been acquired to the land or not.
10 "Improvements" also includes a mobile home as defined in Section 59-2-601, located on land
11 owned by the person who owns the mobile home. For purposes of this subsection "land owned"
12 includes a vendee in possession of the land under a land contract.
13 (13) "Intangible value" includes various fees, services, closing costs, and brokerage
14 commissions related to a real property sales transaction.
15 (14) "Metalliferous minerals" includes gold, silver, copper, lead, zinc, and uranium.
16 (15) "Mine" means a natural deposit of either metalliferous or nonmetalliferous valuable
17 mineral.
18 (16) "Mining" means the process of producing, extracting, leaching, evaporating, or
19 otherwise removing a mineral from a mine.
20 (17) "Nonmetalliferous minerals" includes[, but is not limited to,] oil, gas, coal, salts, sand,
21 rock, gravel, and all carboniferous materials.
22 (18) "Personal property" includes:
23 (a) [every] each class of property as defined in Subsection [(19)] (20) which is the subject
24 of ownership and not included within the meaning of the terms "real estate" and "improvements";
25 (b) gas and water mains and pipes laid in roads, streets, or alleys;
26 (c) bridges and ferries; and
27 (d) livestock which, for the purposes of the exemption provided under Section 59-2-1112,
28 means all domestic animals, honeybees, poultry, fur-bearing animals, and fish.
29 (19) "Primary residence" means:
30 (a) property used:
31 (i) for residential purposes; and

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1 (ii) as a domicile; and
2 (b) does not include:
3 (i) property used as a transient residence; or
4 (ii) condominiums used in rental pools.
5 [(19)] (20) "Property" means property which is subject to assessment and taxation
6 according to its value, but does not include moneys, credits, bonds, stocks, representative property,
7 franchises, goodwill, copyrights, patents, or other intangibles.
8 [(20)] (21) "Public utility," for purposes of this chapter, means the operating property of
9 a railroad, gas corporation, oil or gas transportation or pipeline company, coal slurry pipeline
10 company, electrical corporation, telephone corporation, sewerage corporation, or heat corporation
11 where the company performs the service for, or delivers the commodity to, the public generally
12 or companies serving the public generally, or in the case of a gas corporation or an electrical
13 corporation, where the gas or electricity is sold or furnished to any member or consumers within
14 the state for domestic, commercial, or industrial use. Public utility also means the operating
15 property of any entity or person defined under Section 54-2-1 except water corporations.
16 [(21)] (22) "Real estate or property" includes:
17 (a) the possession of, claim to, ownership of, or right to the possession of land;
18 (b) all mines, minerals, and quarries in and under the land, all timber belonging to
19 individuals or corporations growing or being on the lands of this state or the United States, and all
20 rights and privileges appertaining to these; and
21 (c) improvements.
22 [(22)] (23) "Residential property," for the purposes of the reductions and adjustments
23 under this chapter, means [any property used for residential purposes as] a primary residence or
24 a secondary residence. [It does not include property used for transient residential use or
25 condominiums used in rental pools.]
26 (24) "Secondary residence":
27 (a) means property that is used for residential purposes; and
28 (b) does not include:
29 (i) a primary residence;
30 (ii) condominiums used in rental pools; or
31 (iii) property:

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1 (A) owned by a for-profit business entity; or
2 (B) owned by more than two persons, unless the persons are related as described in Section
3 267(c)(4) of the Internal Revenue Code.
4 [(23)] (25) "Taxable value" means fair market value less any applicable reduction allowed
5 for residential property under Section 59-2-103.
6 [(24)] (26) "Taxing entity" means any county, city, town, school district, special taxing
7 district, or any other political subdivision of the state with the authority to levy a tax on property.
8 [(25)] (27) "Tax roll" means a permanent record of the taxes charged on property, as
9 extended on the assessment roll and may be maintained on the same record or records as the
10 assessment roll or may be maintained on a separate record properly indexed to the assessment roll.
11 It includes tax books, tax lists, and other similar materials.
12 Section 2. Section 59-2-103 is amended to read:
13 59-2-103. Rate of assessment of property -- Residential property.
14 (1) All tangible taxable property shall be assessed and taxed at a uniform and equal rate
15 on the basis of its fair market value, as valued on January 1, unless otherwise provided by law.
16 (2) Beginning January 1, 1995, the fair market value of residential property shall be
17 reduced by 45%, representing a residential exemption allowed under Utah Constitution Article
18 XIII, Section 2, Utah Constitution.
19 (3) No more than one acre of land per residential unit may qualify for the residential
20 exemption.
21 (4) To be eligible for a residential exemption for a secondary residence, the owner shall
22 file an affidavit, under penalty of perjury, with the county assessor:
23 (a) (i) in any year before the year in which the owner is claiming the residential exemption
24 for the secondary residence; or
25 (ii) (A) in the year in which the owner is claiming the residential exemption for the
26 secondary residence; and
27 (B) on or before the deadline for filing appeals under Section 59-2-1004; and
28 (b) certifying that:
29 (i) the property is a secondary residence;
30 (ii) the owner does not have an affidavit on file with any county assessor certifying that
31 another property in the state is a secondary residence;

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1 (iii) the owner shall not rent the property to another person for more than 24 days during
2 a calendar year in which the owner is claiming the residential exemption for the secondary
3 residence; and
4 (iv) the owner shall notify the county assessor in writing within 30 calendar days after the
5 day on which:
6 (A) there is a change in ownership of the property; or
7 (B) the property does not meet the definition of a secondary residence under Section
8 59-2-102.
9 Section 3. Retrospective operation.
10 This act has retrospective operation to January 1, 1997.




Legislative Review Note
as of 2-25-97 1:13 PM

A limited legal review of this bill raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel

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