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First Substitute H.B. 425
5 AN ACT RELATING TO THE PROPERTY TAX ACT; MODIFYING THE CALCULATION
6 OF PROPERTY TAXES ACCRUED FOR HOMEOWNER'S CREDIT CLAIMANTS TO
7 REDUCE THE PERCENTAGE OF FAIR MARKET VALUE UPON WHICH PROPERTY
8 TAXES ARE LEVIED; CLARIFYING THAT A COUNTY LEGISLATIVE BODY MAY
9 NOT OBTAIN PAYMENT FROM THE GENERAL FUND FOR THE FAIR MARKET
10 VALUE REDUCTION; MAKING TECHNICAL CHANGES; AND PROVIDING AN
11 EFFECTIVE DATE.
12 This act affects sections of Utah Code Annotated 1953 as follows:
14 59-2-1202, as last amended by Chapters 23 and 313, Laws of Utah 1997
15 59-2-1204, as renumbered and amended by Chapter 4, Laws of Utah 1987
16 59-2-1206, as last amended by Chapter 87, Laws of Utah 1996
17 59-2-1209, as last amended by Chapter 313, Laws of Utah 1997
18 59-2-1216, as renumbered and amended by Chapter 4, Laws of Utah 1987
19 Be it enacted by the Legislature of the state of Utah:
20 Section 1. Section 59-2-1202 is amended to read:
21 59-2-1202. Definitions.
22 As used in this part:
23 (1) (a) "Claimant" means a homeowner or renter who:
24 (i) has filed a claim under this part;
25 (ii) is domiciled in this state for the entire calendar year for which a claim for relief is filed
1 under this part; and
2 (iii) has reached the age of 65 prior to the close of that calendar year.
3 (b) A surviving spouse, who otherwise qualifies under this section, is an eligible claimant
4 regardless of age.
5 (c) If two or more individuals of a household are able to meet the qualifications for a
6 claimant, they may determine among them as to who the claimant shall be, but if they are unable
7 to agree, the matter shall be referred to the county legislative body for a determination of the
8 claimant of an owned residence and to the commission for a determination of the claimant of a
9 rented residence.
10 (2) (a) "Gross rent" means rental actually paid in cash or its equivalent solely for the right
11 of occupancy, at arm's-length, of a residence, exclusive of charges for any utilities, services,
12 furniture, furnishings, or personal appliances furnished by the landlord as a part of the rental
14 (b) If a claimant occupies two or more residences in the year and does not own the
15 residence as of the lien date, gross rent means the total rent paid for the residences during the
16 one-year period for which the renter files a claim under this part.
17 (3) "Homeowner's credit" means a credit against a claimant's property tax liability.
18 (4) "Household" means the association of persons who live in the same dwelling, sharing
19 its furnishings, facilities, accommodations, and expenses.
20 (5) "Household income" means all income received by all persons of a household in the
21 calendar year next preceding the year in which property taxes are due or, in the case of renters, the
22 year in which a claim is filed.
23 (6) (a) (i) "Income" means federal adjusted gross income as defined in Section 62, Internal
24 Revenue Code, plus all nontaxable income as defined in Subsection (6)(b).
25 (ii) "Income" does not include:
26 (A) aid, assistance, or contributions from a tax-exempt nongovernmental source;
27 (B) surplus foods;
28 (C) relief in kind supplied by a public or private agency; or
29 (D) relief provided under this part, Section 59-2-1108, or Section 59-2-1109.
30 (b) For purposes of Subsection (6)(a)(i), "nontaxable income" means amounts excluded
31 from adjusted gross income under the Internal Revenue Code, including:
1 (i) capital gains;
2 (ii) loss carry forwards claimed during the taxable year in which a claimant files for relief
3 under this part, Section 59-2-1108, or Section 59-2-1109;
4 (iii) depreciation claimed pursuant to the Internal Revenue Code by a claimant on the
5 residence for which the claimant files for relief under this part, Section 59-2-1108, or Section
7 (iv) support money received;
8 (v) nontaxable strike benefits;
9 (vi) cash public assistance or relief;
10 (vii) the gross amount of a pension or annuity, including benefits under the Railroad
11 Retirement Act of 1974, 45 U.S.C. Sec. 231, and veterans disability pensions;
12 (viii) payments received under the Social Security Act;
13 (ix) state unemployment insurance amounts;
14 (x) nontaxable interest received from any source;
15 (xi) workers' compensation;
16 (xii) the gross amount of "loss of time" insurance; and
17 (xiii) voluntary contributions to a tax-deferred retirement plan.
18 (7) (a) "Property taxes accrued" means property taxes, exclusive of special assessments,
19 delinquent interest, and charges for service, levied on a claimant's residence in this state, and in
20 the case of a mobile home includes taxes imposed on both the land upon which the home is
21 situated and also on the structure of the home itself, whether classified as real property or personal
22 property taxes.
23 (b) (i) Beginning on January 1, 1999, for a claimant who owns a residence, "property taxes
24 accrued" are the property taxes described in Subsection (7)(a) levied for the calendar year on 35%
25 of the fair market value of the residence.
26 (ii) The reduction in fair market value under Subsection (7)(b)(i) constitutes:
27 (A) a tax abatement for the poor in accordance with Utah Constitution Article XIII,
28 Section 2; and
29 (B) the residential exemption provided for in Section 59-2-103.
31 If a claimant owns a residence on the lien date, property taxes accrued mean taxes levied on the
1 lien date, even if that claimant does not own a residence for the entire year.
3 state in the same calendar year, property taxes accrued shall relate only to the residence occupied
4 on the lien date by the household as its principal place of residence.
6 or multidwelling building, property taxes accrued shall be the same percentage of the total property
7 taxes accrued as the value of the residence is of the total value.
8 (ii) For purposes of this subsection, "unit" refers to the parcel of property covered by a
9 single tax statement of which the residence is a part.
10 (8) (a) "Residence" means the dwelling, whether owned or rented, and so much of the land
11 surrounding it, not exceeding one acre, as is reasonably necessary for use of the dwelling as a
12 home, and may consist of a part of a multidwelling or multipurpose building and a part of the land
13 upon which it is built and includes a mobile home or houseboat.
14 (b) "Residence" does not include personal property such as furniture, furnishings, or
16 (c) For purposes of this subsection, "owned" includes a vendee in possession under a land
17 contract or one or more joint tenants or tenants in common.
18 Section 2. Section 59-2-1204 is amended to read:
19 59-2-1204. Renter's and homeowner's credits authorized -- No interest allowed.
20 (1) If a claimant who owns a residence files an application for a homeowner's credit under
21 Section 59-2-1206 and meets the requirements of this part, the claimant's property tax liability for
22 the calendar year is equal to property taxes accrued.
23 (2) (a) A claimant meeting the requirements of this part may claim in any year either a
24 renter's credit under Section 59-2-1209 [
26 (b) If a claimant who owns a residence claims a credit under Subsection (2)(a), the credit
27 shall be applied against the claimant's property taxes accrued.
28 (3) Interest is not allowed on any payment made to a renter's or homeowner's credit
29 claimant under this part.
30 Section 3. Section 59-2-1206 is amended to read:
31 59-2-1206. Application for homeowner's credit -- Time for filing -- Payment from
1 General Fund.
2 (1) (a) Every claimant applying for a homeowner's credit shall file an application for the
3 credit with the county legislative body before September 1 in each year.
4 (b) The application under Subsection (1)(a) shall be on forms provided by the commission
5 and shall include a household income statement signed by the claimant stating that the income
6 statement is correct and that the claimant qualifies for the credit.
7 (c) The liability of the claimant for property taxes accrued shall be reduced for that year
8 by the full amount of the homeowner's credit allowable and the claimant shall pay only the
9 difference, if any.
10 (d) Any eligible claimant who fails to submit an application before the September 1
11 deadline may request reimbursement for allowable credit by filing the application form directly
12 with the commission by December 31.
13 (2) (a) (i) The county legislative body shall compile a list of claimants and the
14 homeowner's credits granted to them for purposes of obtaining payment from the General Fund
15 for that portion of the claimant's liability for property taxes accrued represented by the credits
17 (ii) A county legislative body may not obtain payment from the General Fund for the
18 reduction in fair market value provided for in Subsection 59-2-1202(7).
19 (b) Upon certification by the commission the payment shall be made to the county on or
20 before January 1 if the list of claimants and the credits granted are received by the commission on
21 or before the preceding November 30. [
22 (c) If the commission receives the list of claimants after the preceding November 30,
23 payment shall be made within 30 days of receipt of the list of claimants and credits from the
25 Section 4. Section 59-2-1209 is amended to read:
26 59-2-1209. Amount of renter's credit -- Cost-of-living adjustment -- Limitation --
27 General Fund as source of credit -- Maximum credit.
28 (1) (a) For any taxable year a claimant is entitled to a renter's credit for the previous year
29 that does not exceed the following amounts:
30 If household income is Percentage of rent [
1 $0 -- $7,358 9.5%
2 $7,359 -- $9,812 8.5%
3 $9,813 -- $12,264 7.0%
4 $12,265 -- $14,717 5.5%
5 $14,718 -- $17,171 4.0%
6 $17,172 -- $19,479 3.0%
7 $19,480 -- $21,644 2.5%
8 (b) (i) For taxable years beginning on or after January 1, 1999, the commission shall
9 increase or decrease the household income eligibility amounts under Subsection (1)(a) in a
10 percentage equal to the percentage difference between the consumer price index for the preceding
11 calendar year and the consumer price index for calendar year 1997.
12 (ii) For purposes of Subsection (1)(b)(i), the commission shall calculate the consumer
13 price index as provided in Sections (1)(f)(4) and (1)(f)(5), Internal Revenue Code.
14 (2) An individual who is claimed as a personal exemption on another individual's return
15 may not receive a renter's credit.
16 (3) The renter's credit allowed by this section, and provided for in Section 59-2-1204, shall
17 be derived from the General Fund and appropriate transfers made to effectuate this credit.
18 (4) For taxable years beginning on or after January 1, 1998, a credit under this section may
19 not exceed the maximum amount allowed as a homeowner's credit for each income bracket under
20 Subsection 59-2-1208(1)(a).
21 Section 5. Section 59-2-1216 is amended to read:
22 59-2-1216. Rented homestead -- Rent constituting property taxes.
23 If a homestead is rented by a person from another person under circumstances deemed by
24 the commission to be not at arm's-length, the commission may determine rent [
26 within 30 days.
27 Section 6. Effective date.
28 This act takes effect on January 1, 1999.
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