H.B. 122

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PROPERTY TAX - HOMEOWNER'S CREDIT
2 1998 GENERAL SESSION
3 STATE OF UTAH
4 Sponsor: David M. Jones
5 AN ACT RELATING TO THE PROPERTY TAX ACT; PROVIDING THAT THE
6 HOMEOWNER'S CREDIT IS EQUAL TO THE AMOUNT BY WHICH A CLAIMANT'S
7 PROPERTY TAX LIABILITY EXCEEDS A CERTAIN PERCENTAGE OF THE
8 CLAIMANT'S HOUSEHOLD INCOME; MAKING TECHNICAL CHANGES; AND
9 PROVIDING AN EFFECTIVE DATE.
10 This act affects sections of Utah Code Annotated 1953 as follows:
11 AMENDS:
12 59-2-1202, as last amended by Chapters 23 and 313, Laws of Utah 1997
13 59-2-1208, as last amended by Chapter 313, Laws of Utah 1997
14 59-2-1209, as last amended by Chapter 313, Laws of Utah 1997
15 Be it enacted by the Legislature of the state of Utah:
16 Section 1. Section 59-2-1202 is amended to read:
17 59-2-1202. Definitions.
18 As used in this part:
19 (1) (a) "Claimant" means a homeowner or renter who:
20 (i) has filed a claim under this part;
21 (ii) is domiciled in this state for the entire calendar year for which a claim for relief is filed
22 under this part; and
23 (iii) has reached the age of 65 prior to the close of that calendar year.
24 (b) A surviving spouse, who otherwise qualifies under this section, is an eligible claimant
25 regardless of age.
26 (c) If two or more individuals of a household are able to meet the qualifications for a
27 claimant, they may determine among them as to who the claimant shall be, but if they are unable

1 to agree, the matter shall be referred to the county legislative body for a determination of the
2 claimant of an owned residence and to the commission for a determination of the claimant of a
3 rented residence.
4 (2) (a) "Gross rent" means rental actually paid in cash or its equivalent solely for the right
5 of occupancy, at arm's-length, of a residence, exclusive of charges for any utilities, services,
6 furniture, furnishings, or personal appliances furnished by the landlord as a part of the rental
7 agreement.
8 (b) If a claimant occupies two or more residences in the year and does not own the
9 residence as of the lien date, gross rent means the total rent paid for the residences during the
10 one-year period for which the renter files a claim under this part.
11 (3) "Homeowner's credit" means a credit:
12 (a) against a claimant's property tax liability[.]; and
13 (b) in an amount equal to the amount by which the claimant's property tax liability exceeds
14 the percentage of the claimant's household income provided in Subsection 59-2-1208 (1)(a).
15 (4) "Household" means the association of persons who live in the same dwelling, sharing
16 its furnishings, facilities, accommodations, and expenses.
17 (5) "Household income" means all income received by all persons of a household in the
18 calendar year next preceding the year in which property taxes are due or, in the case of renters, the
19 year in which a claim is filed.
20 (6) (a) (i) "Income" means federal adjusted gross income as defined in Section 62, Internal
21 Revenue Code, plus all nontaxable income as defined in Subsection (6)(b).
22 (ii) "Income" does not include:
23 (A) aid, assistance, or contributions from a tax-exempt nongovernmental source;
24 (B) surplus foods;
25 (C) relief in kind supplied by a public or private agency; or
26 (D) relief provided under this part, Section 59-2-1108, or Section 59-2-1109.
27 (b) For purposes of Subsection (6)(a)(i), "nontaxable income" means amounts excluded
28 from adjusted gross income under the Internal Revenue Code, including:
29 (i) capital gains;
30 (ii) loss carry forwards claimed during the taxable year in which a claimant files for relief
31 under this part, Section 59-2-1108, or Section 59-2-1109;

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1 (iii) depreciation claimed pursuant to the Internal Revenue Code by a claimant on the
2 residence for which the claimant files for relief under this part, Section 59-2-1108, or Section
3 59-2-1109;
4 (iv) support money received;
5 (v) nontaxable strike benefits;
6 (vi) cash public assistance or relief;
7 (vii) the gross amount of a pension or annuity, including benefits under the Railroad
8 Retirement Act of 1974, 45 U.S.C. Sec. 231, and veterans disability pensions;
9 (viii) payments received under the Social Security Act;
10 (ix) state unemployment insurance amounts;
11 (x) nontaxable interest received from any source;
12 (xi) workers' compensation;
13 (xii) the gross amount of "loss of time" insurance; and
14 (xiii) voluntary contributions to a tax-deferred retirement plan.
15 (7) (a) "Property taxes accrued" means property taxes, exclusive of special assessments,
16 delinquent interest, and charges for service, levied on a claimant's residence in this state, and in
17 the case of a mobile home includes taxes imposed on both the land upon which the home is
18 situated and also on the structure of the home itself, whether classified as real property or personal
19 property taxes.
20 (b) For purposes of this subsection property taxes accrued are levied on the lien date. If
21 a claimant owns a residence on the lien date, property taxes accrued mean taxes levied on the lien
22 date, even if that claimant does not own a residence for the entire year.
23 (c) When a household owns and occupies two or more different residences in this state in
24 the same calendar year, property taxes accrued shall relate only to the residence occupied on the
25 lien date by the household as its principal place of residence.
26 (d) (i) If a residence is an integral part of a large unit such as a farm or a multipurpose or
27 multidwelling building, property taxes accrued shall be the same percentage of the total property
28 taxes accrued as the value of the residence is of the total value.
29 (ii) For purposes of this subsection, "unit" refers to the parcel of property covered by a
30 single tax statement of which the residence is a part.
31 (8) (a) "Residence" means the dwelling, whether owned or rented, and so much of the land

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1 surrounding it, not exceeding one acre, as is reasonably necessary for use of the dwelling as a
2 home, and may consist of a part of a multidwelling or multipurpose building and a part of the land
3 upon which it is built and includes a mobile home or houseboat.
4 (b) "Residence" does not include personal property such as furniture, furnishings, or
5 appliances.
6 (c) For purposes of this subsection, "owned" includes a vendee in possession under a land
7 contract or one or more joint tenants or tenants in common.
8 Section 2. Section 59-2-1208 is amended to read:
9 59-2-1208. Amount of homeowner's credit -- Cost-of-living adjustment -- Limitation
10 -- General Fund as source of credit.
11 (1) (a) For taxable years beginning on or after January 1, 1998, a claimant is entitled to a
12 homeowner's credit [that does not exceed the following amounts] as follows:
13 If household income is: Homeowner's credit equals the
14 amount of property tax liability
15 that exceeds the following
16 percentages of household income:
17 $0 -- $7,358 [$577] 1%
18 $7,359 -- $9,812 [$504] 1.4%
19 $9,813 -- $12,264 [$432] 1.8%
20 $12,265 -- $14,717 [$324] 2.2%
21 $14,718 -- $17,171 [$252] 2.6%
22 $17,172 -- $19,479 [$144] 3%
23 $19,480 -- $21,644 [$71] 3.4%
24 (b) (i) For taxable years beginning on or after January 1, 1999, the commission shall
25 increase or decrease the household income eligibility amounts [and the credits] under Subsection
26 (1)(a) in a percentage equal to the percentage difference between the consumer price index for the
27 preceding calendar year and the consumer price index for calendar year 1997.
28 (ii) For purposes of Subsection (1)(b)(i), the commission shall calculate the consumer
29 price index as provided in Sections (1)(f)(4) and (1)(f)(5), Internal Revenue Code.
30 (2) An individual who is claimed as a personal exemption on another individual's return
31 may not receive a homeowner's credit.

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1 (3) The homeowner's credit allowed by this section, and provided for in Section
2 59-2-1204, shall be derived from the General Fund and appropriate transfers made to effectuate
3 this credit.
4 Section 3. Section 59-2-1209 is amended to read:
5 59-2-1209. Amount of renter's credit -- Cost-of-living adjustment -- Limitation --
6 General Fund as source of credit.
7 (1) (a) For any taxable year a claimant is entitled to a renter's credit for the previous year
8 that does not exceed the following amounts:
9 If household income is: Percentage of rent constituting
10 property taxes accrued allowed as a credit:
11 $0 -- $7,358 9.5%
12 $7,359 -- $9,812 8.5%
13 $9,813 -- $12,264 7.0%
14 $12,265 -- $14,717 5.5%
15 $14,718 -- $17,171 4.0%
16 $17,172 -- $19,479 3.0%
17 $19,480 -- $21,644 2.5%
18 (b) (i) For taxable years beginning on or after January 1, 1999, the commission shall
19 increase or decrease the household income eligibility amounts under Subsection (1)(a) in a
20 percentage equal to the percentage difference between the consumer price index for the preceding
21 calendar year and the consumer price index for calendar year 1997.
22 (ii) For purposes of Subsection (1)(b)(i), the commission shall calculate the consumer
23 price index as provided in Sections (1)(f)(4) and (1)(f)(5), Internal Revenue Code.
24 (2) An individual who is claimed as a personal exemption on another individual's return
25 may not receive a renter's credit.
26 (3) The renter's credit allowed by this section, and provided for in Section 59-2-1204, shall
27 be derived from the General Fund and appropriate transfers made to effectuate this credit.
28 [(4) For taxable years beginning on or after January 1, 1998, a credit under this section may
29 not exceed the maximum amount allowed as a homeowner's credit for each income bracket under
30 Subsection 59-2-1208(1)(a).]
31 Section 4. Effective date.

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1 This act takes effect on January 1, 1999.




Legislative Review Note
as of 1-22-98 10:56 AM

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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