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S.B. 64

             1     

RESIDENTIAL EXEMPTION - SECONDARY

             2     
RESIDENCES

             3     
2000 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Sponsor: Ed P. Mayne

             6      AN ACT RELATING TO THE PROPERTY TAX ACT; AMENDING THE DEFINITION OF
             7      RESIDENTIAL PROPERTY TO INCLUDE SECONDARY RESIDENCES; DEFINING TERMS;
             8      PROVIDING PROCEDURES FOR A PROPERTY OWNER TO CLAIM A RESIDENTIAL
             9      EXEMPTION FOR A SECONDARY RESIDENCE; AND MAKING TECHNICAL CHANGES.
             10      This act affects sections of Utah Code Annotated 1953 as follows:
             11      AMENDS:
             12          59-2-102, as last amended by Chapter 134, Laws of Utah 1999
             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) "Aircraft" is as defined in Section 72-10-102 .


             28          (5) "Airline" means any air carrier operating interstate routes on a scheduled basis which
             29      offers to fly passengers or cargo on the basis of available capacity on regularly scheduled routes.
             30          (6) "Assessment roll" means a permanent record of the assessment of property as assessed
             31      by the county assessor and the commission and may be maintained manually or as a computerized
             32      file as a consolidated record or as multiple records by type, classification, or categories.
             33          (7) "Certified revenue levy" means a property tax levy that provides the same amount of
             34      ad valorem property tax revenue as was collected for the prior year, plus new growth, but exclusive
             35      of revenue from collections from redemptions, interest, and penalties.
             36          (8) "County-assessed commercial vehicle" means:
             37          (a) any commercial vehicle, trailer, or semitrailer which is not apportioned under Section
             38      41-1a-301 and is not operated interstate to transport the vehicle owner's goods or property in
             39      furtherance of the owner's commercial enterprise;
             40          (b) any passenger vehicle owned by a business and used by its employees for
             41      transportation as a company car or vanpool vehicle; and
             42          (c) vehicles which are:
             43          (i) especially constructed for towing or wrecking, and which are not otherwise used to
             44      transport goods, merchandise, or people for compensation;
             45          (ii) used or licensed as taxicabs or limousines;
             46          (iii) used as rental passenger cars, travel trailers, or motor homes;
             47          (iv) used or licensed in this state for use as ambulances or hearses;
             48          (v) especially designed and used for garbage and rubbish collection; or
             49          (vi) used exclusively to transport students or their instructors to or from any private,
             50      public, or religious school or school activities.
             51          (9) (a) Except as provided in Subsection (9)(b), for purposes of Section 59-2-801 ,
             52      "designated tax area" means a tax area created by the overlapping boundaries of only the following
             53      taxing entities:
             54          (i) a county; and
             55          (ii) a school district.
             56          (b) Notwithstanding Subsection (9)(a), "designated tax area" includes a tax area created
             57      by the overlapping boundaries of:
             58          (i) the taxing entities described in Subsection (9)(a); and


             59          (ii) (A) a city or town if the boundaries of the school district under Subsection (9)(a) and
             60      the boundaries of the city or town are identical; or
             61          (B) a special service district if the boundaries of the school district under Subsection (9)(a)
             62      are located entirely within the special service district.
             63          (10) (a) "Escaped property" means any property, whether personal, land, or any
             64      improvements to the property, subject to taxation and is:
             65          (i) inadvertently omitted from the tax rolls, assigned to the incorrect parcel, or assessed
             66      to the wrong taxpayer by the assessing authority;
             67          (ii) undervalued or omitted from the tax rolls because of the failure of the taxpayer to
             68      comply with the reporting requirements of this chapter; or
             69          (iii) undervalued because of errors made by the assessing authority based upon incomplete
             70      or erroneous information furnished by the taxpayer.
             71          (b) Property which is undervalued because of the use of a different valuation methodology
             72      or because of a different application of the same valuation methodology is not "escaped property."
             73          (11) "Fair market value" means the amount at which property would change hands
             74      between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and
             75      both having reasonable knowledge of the relevant facts. For purposes of taxation, "fair market
             76      value" shall be determined using the current zoning laws applicable to the property in question,
             77      except in cases where there is a reasonable probability of a change in the zoning laws affecting that
             78      property in the tax year in question and the change would have an appreciable influence upon the
             79      value.
             80          (12) "Farm machinery and equipment," for purposes of the exemption provided under
             81      Section 59-2-1101 , means tractors, milking equipment and storage and cooling facilities, feed
             82      handling equipment, irrigation equipment, harvesters, choppers, grain drills and planters, tillage
             83      tools, scales, combines, spreaders, sprayers, haying equipment, and any other machinery or
             84      equipment used primarily for agricultural purposes; but does not include vehicles required to be
             85      registered with the Motor Vehicle Division or vehicles or other equipment used for business
             86      purposes other than farming.
             87          (13) "Geothermal fluid" means water in any form at temperatures greater than 120 degrees
             88      centigrade naturally present in a geothermal system.
             89          (14) "Geothermal resource" means:


             90          (a) the natural heat of the earth at temperatures greater than 120 degrees centigrade; and
             91          (b) the energy, in whatever form, including pressure, present in, resulting from, created by,
             92      or which may be extracted from that natural heat, directly or through a material medium.
             93          (15) "Improvements" includes all buildings, structures, fixtures, fences, and improvements
             94      erected upon or affixed to the land, whether the title has been acquired to the land or not.
             95          (16) "Intangible property":
             96          (a) means property that is capable of private ownership separate from tangible property;
             97      and
             98          (b) includes:
             99          (i) moneys;
             100          (ii) credits;
             101          (iii) bonds;
             102          (iv) stocks;
             103          (v) representative property;
             104          (vi) franchises;
             105          (vii) licenses;
             106          (viii) trade names;
             107          (ix) copyrights; and
             108          (x) patents.
             109          (17) "Metalliferous minerals" includes gold, silver, copper, lead, zinc, and uranium.
             110          (18) "Mine" means a natural deposit of either metalliferous or nonmetalliferous valuable
             111      mineral.
             112          (19) "Mining" means the process of producing, extracting, leaching, evaporating, or
             113      otherwise removing a mineral from a mine.
             114          (20) (a) "Mobile flight equipment" means tangible personal property that is:
             115          (i) owned or operated by an:
             116          (A) air charter service;
             117          (B) air contract service; or
             118          (C) airline; and
             119          (ii) (A) capable of flight;
             120          (B) attached to an aircraft that is capable of flight; or


             121          (C) contained in an aircraft that is capable of flight if the tangible personal property is
             122      intended to be used:
             123          (I) during multiple flights;
             124          (II) during a takeoff, flight, or landing; and
             125          (III) as a service provided by an air charter service, air contract service, or airline.
             126          (b) (i) "Mobile flight equipment" does not include a spare part other than a spare engine
             127      that is rotated:
             128          (A) at regular intervals; and
             129          (B) with an engine that is attached to the aircraft.
             130          (ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             131      commission may make rules defining the term "regular intervals."
             132          (21) "Nonmetalliferous minerals" includes[, but is not limited to,] oil, gas, coal, salts, sand,
             133      rock, gravel, and all carboniferous materials.
             134          (22) "Personal property" includes:
             135          (a) [every] each class of property as defined in Subsection [(23)] (24) which is the subject
             136      of ownership and not included within the meaning of the terms "real estate" and "improvements";
             137          (b) gas and water mains and pipes laid in roads, streets, or alleys;
             138          (c) bridges and ferries; and
             139          (d) livestock which, for the purposes of the exemption provided under Section 59-2-1112 ,
             140      means all domestic animals, honeybees, poultry, fur-bearing animals, and fish.
             141          (23) (a) "Primary residence" means property used:
             142          (i) for residential purposes; and
             143          (ii) as a domicile.
             144          (b) "Primary residence" does not include:
             145          (i) property used as a transient residence; or
             146          (ii) a condominium used in a rental pool.
             147          [(23)] (24) (a) "Property" means property that is subject to assessment and taxation
             148      according to its value.
             149          (b) "Property" does not include intangible property as defined in this section.
             150          [(24)] (25) "Public utility," for purposes of this chapter, means the operating property of
             151      a railroad, gas corporation, oil or gas transportation or pipeline company, coal slurry pipeline


             152      company, electrical corporation, telephone corporation, sewerage corporation, or heat corporation
             153      where the company performs the service for, or delivers the commodity to, the public generally
             154      or companies serving the public generally, or in the case of a gas corporation or an electrical
             155      corporation, where the gas or electricity is sold or furnished to any member or consumers within
             156      the state for domestic, commercial, or industrial use. Public utility also means the operating
             157      property of any entity or person defined under Section 54-2-1 except water corporations.
             158          [(25)] (26) "Real estate or property" includes:
             159          (a) the possession of, claim to, ownership of, or right to the possession of land;
             160          (b) all mines, minerals, and quarries in and under the land, all timber belonging to
             161      individuals or corporations growing or being on the lands of this state or the United States, and all
             162      rights and privileges appertaining to these; and
             163          (c) improvements.
             164          [(26)] (27) "Residential property," for the purposes of the reductions and adjustments
             165      under this chapter, means [any property used for residential purposes as] a:
             166          (a) primary residence[. It does not include property used for transient residential use or
             167      condominiums used in rental pools]; or
             168          (b) secondary residence.
             169          [(27)] (28) For purposes of Subsection 59-2-801 (1)(e), "route miles" means the number
             170      of miles calculated by the commission that is:
             171          (a) measured in a straight line by the commission; and
             172          (b) equal to the distance between a geographical location that begins or ends:
             173          (i) at a boundary of the state; and
             174          (ii) where an aircraft:
             175          (A) takes off; or
             176          (B) lands.
             177          (29) (a) "Secondary residence" means property that:
             178          (i) is used for residential purposes; and
             179          (ii) is not a primary residence.
             180          (b) "Secondary residence" does not include:
             181          (i) a condominium used in a rental pool; or
             182          (ii) property:


             183          (A) owned by a for-profit business entity; or
             184          (B) owned by more than two persons, unless the persons are related as described in Section
             185      267(c)(4), Internal Revenue Code.
             186          [(28)] (30) (a) "State-assessed commercial vehicle" means:
             187          (i) any commercial vehicle, trailer, or semitrailer which operates interstate or intrastate to
             188      transport passengers, freight, merchandise, or other property for hire; or
             189          (ii) any commercial vehicle, trailer, or semitrailer which operates interstate and transports
             190      the vehicle owner's goods or property in furtherance of the owner's commercial enterprise.
             191          (b) "State-assessed commercial vehicle" does not include vehicles used for hire which are
             192      specified in Subsection (8)(c) as county-assessed commercial vehicles.
             193          [(29)] (31) "Taxable value" means fair market value less any applicable reduction allowed
             194      for residential property under Section 59-2-103 .
             195          [(30)] (32) "Tax area" means a geographic area created by the overlapping boundaries of
             196      one or more taxing entities.
             197          [(31)] (33) "Taxing entity" means any county, city, town, school district, special taxing
             198      district, or any other political subdivision of the state with the authority to levy a tax on property.
             199          [(32)] (34) "Tax roll" means a permanent record of the taxes charged on property, as
             200      extended on the assessment roll and may be maintained on the same record or records as the
             201      assessment roll or may be maintained on a separate record properly indexed to the assessment roll.
             202      It includes tax books, tax lists, and other similar materials.
             203          Section 2. Section 59-2-103 is amended to read:
             204           59-2-103. Rate of assessment of property -- Residential property.
             205          (1) All tangible taxable property shall be assessed and taxed at a uniform and equal rate
             206      on the basis of its fair market value, as valued on January 1, unless otherwise provided by law.
             207          (2) [Beginning January 1, 1995, the] The fair market value of residential property [shall
             208      be reduced by 45%, representing a residential exemption allowed under Utah Constitution Article
             209      XIII, Section 2, Utah Constitution.] is subject to the following residential exemptions:
             210          (a) beginning on January 1, 1995, 45% of the fair market value of a primary residence is
             211      exempt; and
             212          (b) beginning on January 1, 2001, 25% of the first $150,000 of the fair market value of a
             213      secondary residence is exempt as provided in Subsection (4).


             214          (3) No more than one acre of land per residential unit may qualify for [the] a residential
             215      exemption.
             216          (4) An owner of a secondary residence claiming a residential exemption for the secondary
             217      residence under Subsection (2)(b) shall file a signed statement with the county assessor:
             218          (a) (i) subject to Subsection (5), in any year before the year in which the owner claims the
             219      residential exemption for the secondary residence; or
             220          (ii) (A) subject to Subsection (5), in the year in which the owner claims a residential
             221      exemption for the secondary residence; and
             222          (B) on or before the deadline for filing appeals under Section 59-2-1004 ; and
             223          (b) certifying that:
             224          (i) the property is a secondary residence;
             225          (ii) the owner does not have a signed statement on file with any county assessor in the state
             226      certifying that another property in the state is a secondary residence;
             227          (iii) the owner shall not rent the property during a calendar year in which the owner is
             228      claiming the residential exemption for the secondary residence; and
             229          (iv) the owner shall notify the county assessor in writing within 30 days after the day on
             230      which:
             231          (A) there is a change of ownership of the property; or
             232          (B) the property does not meet the definition of secondary residence under Section
             233      59-2-102 .
             234          (5) If an owner files a signed statement meeting the requirements of Subsection (4) for a
             235      secondary residence that qualifies for a residential exemption under this part, for the time period
             236      during which the secondary residence qualifies for the residential exemption:
             237          (a) the signed statement is valid; and
             238          (b) the owner is not required to file another signed statement under Subsection (4).




Legislative Review Note
    as of 2-1-00 3:27 PM


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

Office of Legislative Research and General Counsel


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