S.B. 71

1

ROLLBACK TAX AND ONE-TIME IN LIEU
2 FEE AMENDMENTS
3 2003 GENERAL SESSION
4 STATE OF UTAH
5 Sponsor: Peter C. Knudson
6 This act modifies the Farmland Assessment Act to allow a county that adopts an
7 ordinance to extend the rollback period for purposes of calculating the rollback tax. The
8 act provides for the distribution of rollback taxes. The act establishes the purposes for
9 which certain rollback taxes may be used and requires a county legislative body to adopt
10 an ordinance containing certain information before expending those rollback taxes. The
11 act addresses the distribution of the conservation easement rollback tax and the
12 calculation of certain one-time in lieu fee payments. The act makes technical changes.
13 This act affects sections of Utah Code Annotated 1953 as follows:
14 AMENDS:
15 59-2-506, as last amended by Chapter 141, Laws of Utah 2002
16 59-2-506.5, as enacted by Chapter 141, Laws of Utah 2002
17 59-2-511, as last amended by Chapter 141, Laws of Utah 2002
18 ENACTS:
19 59-2-506.1, Utah Code Annotated 1953
20 Be it enacted by the Legislature of the state of Utah:
21 Section 1. Section 59-2-506 is amended to read:
22 59-2-506. Rollback tax -- Penalty -- Lien -- Computation of tax -- Procedure --
23 Collection -- Distribution.
24 (1) Except as provided in Section 59-2-506.5 or 59-2-511 , if land is withdrawn from
25 this part, the land is subject to a rollback tax imposed in accordance with this section.
26 (2) (a) An owner shall notify the county assessor that land is withdrawn from this part
27 within 180 days after the day on which the land is withdrawn from this part.

28 (b) An owner that fails to notify the county assessor under Subsection (2)(a) that land is
29 withdrawn from this part is subject to a penalty equal to the greater of:
30 (i) $10; or
31 (ii) 2% of the rollback tax due for the last year of the rollback period.
32 (3) The rollback tax is:
33 (a) a lien on the land assessed under this part until paid; and
34 (b) due and payable on the day the county assessor mails the notice required by
35 Subsection (6).
36 (4) (a) The county assessor shall determine the amount of the rollback tax by
37 computing the difference for the rollback period described in Subsection (4)(b) between:
38 (i) the tax paid while the land was assessed under this part; and
39 (ii) the tax that would have been paid had the property not been assessed under this
40 part.
41 (b) For purposes of this section, the rollback period is a time period that:
42 (i) except as provided in Subsection (4)(c), begins on the later of:
43 (A) the date the land is first assessed under this part; or
44 (B) five years preceding the day on which the county assessor mails the notice required
45 by Subsection (6); and
46 (ii) ends the day on which the county assessor mails the notice required by Subsection
47 (6).
48 (c) (i) Notwithstanding Subsection (4)(b)(i) and subject to Subsections (4)(c)(ii) and
49 (5), a county legislative body may adopt an ordinance providing that for purposes of this
50 section the rollback period begins on the later of:
51 (A) the date the land is first assessed under this part; or
52 (B) ten years preceding the day on which the county assessor mails the notice required
53 by Subsection (6).
54 (ii) If a county legislative body adopts an ordinance in accordance with Subsection
55 (4)(c)(i), the ordinance shall take effect on the January 1 immediately following the day on
56 which the county legislative body adopts the ordinance.
57 (5) (a) The county treasurer shall:
58 (i) collect the rollback tax; and

59 (ii) after the rollback tax is paid, certify to the county recorder that the rollback tax lien
60 on the property has been satisfied.
61 (b) [The] Except as provided in Subsection (5)(c), the rollback tax collected under this
62 section shall:
63 (i) be paid into the county treasury; and
64 (ii) be paid by the county treasurer to the various taxing entities pro rata in accordance
65 with the property tax levies for the current year.
66 (c) Notwithstanding Subsection (5)(b), if a county adopts an ordinance in accordance
67 with Subsection (4)(c), beginning on the day on which the ordinance takes effect, the rollback
68 tax collected under this section shall be distributed as follows:
69 (i) 50% of the rollback tax shall:
70 (A) be paid into the county treasury; and
71 (B) be paid by the county treasurer to the various taxing entities pro rata in accordance
72 with the property tax levies for the current year; and
73 (ii) 50% of the rollback tax shall be:
74 (A) paid into the county treasury; and
75 (B) expended by the county legislative body in accordance with Section 59-2-506.1 .
76 (6) (a) The county assessor shall mail to an owner of the land that is subject to a
77 rollback tax a notice that:
78 (i) the land is withdrawn from this part;
79 (ii) the land is subject to a rollback tax under this section; and
80 (iii) the rollback tax is delinquent if the owner of the land does not pay the tax within
81 30 days after the day on which the county assessor mails the notice.
82 (b) The rollback tax is delinquent if an owner of the land that is withdrawn from this
83 part does not pay the rollback tax within 30 days after the day on which the county assessor
84 mails the notice required by Subsection (6)(a).
85 (7) The following shall be governed by the procedures provided for the assessment and
86 taxation of real property not assessed under this part:
87 (a) except as provided in this section, the assessment of the rollback tax imposed by
88 Subsection (1);
89 (b) the attachment of the lien for the rollback tax; and

90 (c) the right of an owner or other interested party to review any judgment of the county
91 board of equalization affecting the rollback tax.
92 (8) (a) Land that becomes ineligible for assessment under this part only as a result of an
93 amendment to this part is not subject to the rollback tax.
94 (b) Land described in Subsection (8)(a) that is withdrawn from this part as a result of
95 an event other than an amendment to this part, whether voluntary or involuntary, is subject to
96 the rollback tax.
97 (9) Except as provided in Section 59-2-511 , land that becomes exempt from taxation
98 under Utah Constitution Article XIII, Section 2, is not subject to the rollback tax.
99 Section 2. Section 59-2-506.1 is enacted to read:
100 59-2-506.1. Definitions -- Use of certain rollback taxes -- County ordinance.
101 (1) (a) As used in this section, "open land" means land that is:
102 (i) preserved in or restored to a predominantly natural, open, and undeveloped
103 condition; and
104 (ii) used for:
105 (A) wildlife habitat;
106 (B) cultural or recreational use;
107 (C) watershed protection; or
108 (D) another use consistent with the preservation of the land in or restoration of the land
109 to a predominantly natural, open, and undeveloped condition.
110 (b) (i) "Open land" does not include land that is predominantly used as a developed
111 facility for active recreational activities, including baseball, tennis, soccer, golf, or other
112 sporting or similar activity.
113 (ii) The condition of land does not change from a natural, open, and undeveloped
114 condition because of the development or presence on the land of facilities, including trails,
115 waterways, and grassy areas, that:
116 (A) enhance the natural, scenic, or aesthetic qualities of the land; or
117 (B) facilitate the public's access to or use of the land for the enjoyment of its natural,
118 scenic, or aesthetic qualities and for compatible recreational activities.
119 (2) Subject to Subsections (3) and (4), a county legislative body shall expend rollback
120 taxes described in Subsection 59-2-506 (5)(c)(ii):

121 (a) to establish conservation easements in accordance with Title 57, Chapter 18, Land
122 Conservation Easement Act, to protect land in agricultural use;
123 (b) to preserve or restore open land; or
124 (c) for a combination of the purposes described in Subsections (2)(a) and (b).
125 (3) A county legislative body may not use rollback taxes:
126 (a) for the costs of administering the expenditure of the rollback taxes; or
127 (b) to purchase a fee interest in real property.
128 (4) Before a county legislative body may expend rollback taxes for a purpose described
129 in Subsection (2), the county legislative body shall adopt an ordinance establishing:
130 (a) eligibility criteria for prioritizing lands with respect to which rollback taxes will be
131 expended;
132 (b) the terms and conditions for establishing conservation easements;
133 (c) procedures and requirements for a person to apply to the county for rollback taxes
134 to be expended for a purpose described in Subsection (2); and
135 (d) procedures for monitoring the expenditure of the rollback taxes.
136 Section 3. Section 59-2-506.5 is amended to read:
137 59-2-506.5. Conservation easement rollback tax -- One-time in lieu fee payment --
138 Computation -- Lien -- Procedure -- Collection -- Distribution.
139 (1) (a) Notwithstanding Section 59-2-506 and subject to the requirements of this
140 section, land is not subject to the rollback tax under Section 59-2-506 , if:
141 (i) the land becomes subject to a conservation easement created in accordance with
142 Title 57, Chapter 18, Land Conservation Easement Act;
143 (ii) the creation of the conservation easement described in Subsection (1)(a)(i) is
144 considered to be a qualified conservation contribution for federal purposes under Section
145 170(h), Internal Revenue Code;
146 (iii) the land was assessed under this part in the tax year preceding the tax year that the
147 land does not meet the requirements of Section 59-2-503 ;
148 (iv) after the creation of the conservation easement described in Subsection (1)(a)(i),
149 the land does not meet the requirements of Section 59-2-503 ; and
150 (v) an owner of the land notifies the county assessor as provided in Subsection (1)(b).
151 (b) An owner of land described in Subsection (1)(a) shall notify the county assessor

152 that the land meets the requirements of Subsection (1)(a) within 30 days after the day on which
153 the land does not meet the requirements of Section 59-2-503 .
154 (2) (a) Except as provided in Subsection (4), if a conservation easement is terminated
155 in accordance with Section 57-18-5 :
156 (i) the land described in Subsection (1) is subject to a conservation easement rollback
157 tax imposed in accordance with this section; or
158 (ii) if the land described in Subsection (1) is owned by a governmental entity as defined
159 in Section 59-2-511 , the land is subject to a one-time in lieu fee payment that is:
160 (A) in an amount equal to the conservation easement rollback tax imposed in
161 accordance with this section; and
162 (B) paid, collected, and distributed in the same manner as the conservation easement
163 rollback tax imposed in accordance with this section.
164 (b) The conservation easement rollback tax is an amount equal to the product of:
165 (i) the property tax imposed on the land for each year during the time period that is the
166 shorter of:
167 (A) the time period during which the land is subject to a conservation easement
168 described in Subsection (1); or
169 (B) five years before the county assessor mails the notice required by Subsection
170 (3)(b); and
171 (ii) 20.
172 (c) An owner shall notify the county assessor that a conservation easement on land
173 described in Subsection (1) has been terminated in accordance with Section 57-18-5 within 180
174 days after the day on which the conservation easement is terminated.
175 (3) (a) The conservation easement rollback tax under this section is:
176 (i) a lien on the land described in Subsection (1) until paid; and
177 (ii) due and payable on the day the county assessor mails the notice required by
178 Subsection (3)(b).
179 (b) If land is subject to a conservation easement rollback tax under Subsection (2), the
180 county assessor shall mail to an owner of the land a notice that:
181 (i) the land is subject to a conservation easement rollback tax under this section; and
182 (ii) the conservation easement rollback tax is delinquent if the owner of the land does

183 not pay the tax within 30 days after the day on which the county assessor mails the notice.
184 (c) The conservation easement rollback tax is delinquent if an owner of the land that is
185 subject to the conservation easement rollback tax does not pay the conservation easement
186 rollback tax within 30 days after the day on which the county assessor mails the notice required
187 by Subsection (3)(b).
188 (d) [The] (i) Except as provided in Subsection (3)(d)(ii), the conservation easement
189 rollback tax shall be paid, collected, and distributed in a manner consistent with this section
190 and Section 59-2-506 .
191 (ii) Notwithstanding Subsection (3)(d)(i), regardless of whether the county legislative
192 body of the county in which the land is located adopts an ordinance in accordance with
193 Subsection 59-2-506 (4)(c), the conservation easement rollback tax:
194 (A) shall:
195 (I) be paid into the county treasury; and
196 (II) be paid by the county treasurer to the various taxing entities pro rata in accordance
197 with the property tax levies for the current year; and
198 (B) is not subject to the distribution provisions of Subsection 59-2-506 (5)(c).
199 (4) (a) Notwithstanding Subsection (2), land described in Subsection (2) is not subject
200 to the conservation easement rollback tax or the one-time in lieu fee payment required by
201 Subsection (2) if after the conservation easement is terminated in accordance with Section
202 57-18-5 :
203 (i) an owner of the land applies for assessment of the land as land in agricultural use
204 under this part within 30 days after the day on which the conservation easement is terminated;
205 and
206 (ii) the application for assessment of the land described in Subsection (4)(a)(i) is
207 approved within two years after the day on which the application was filed.
208 (b) Notwithstanding Subsection (4)(a), if the land described in Subsection (4)(a)(i)
209 does not receive approval for assessment as land in agricultural use under this part within two
210 years after the day on which the application was filed under Subsection (4)(a), an owner of the
211 land shall:
212 (i) within 30 days after the day on which the two-year period expires, notify the county
213 assessor that the two-year period expired; and

214 (ii) pay the conservation easement rollback tax or the one-time in lieu fee payment
215 required by Subsection (2) as provided in this section.
216 (5) Land subject to a conservation easement created in accordance with Title 57,
217 Chapter 18, Land Conservation Easement Act, is not subject to a conservation easement
218 rollback tax or a one-time in lieu fee payment if the land is assessed under this part in
219 accordance with Section 59-2-505 .
220 Section 4. Section 59-2-511 is amended to read:
221 59-2-511. Acquisition of land by governmental entity -- Requirements -- Rollback
222 tax -- One-time in lieu fee payment.
223 (1) For purposes of this section, "governmental entity" means:
224 (a) the United States;
225 (b) the state;
226 (c) a political subdivision of the state, including:
227 (i) a county;
228 (ii) a city;
229 (iii) a town;
230 (iv) a school district; or
231 (v) a special district; or
232 (d) an entity created by the state or the United States, including:
233 (i) an agency;
234 (ii) a board;
235 (iii) a bureau;
236 (iv) a commission;
237 (v) a committee;
238 (vi) a department;
239 (vii) a division;
240 (viii) an institution;
241 (ix) an instrumentality; or
242 (x) an office.
243 (2) (a) Except as provided in Subsections (3) and (4), land acquired by a governmental
244 entity is subject to the rollback tax imposed by this part if:

245 (i) prior to the governmental entity acquiring the land, the land is assessed under this
246 part; and
247 (ii) after the governmental entity acquires the land, the land does not meet the
248 requirements of Section 59-2-503 .
249 (b) A person dedicating a public right-of-way to a governmental entity shall pay the
250 rollback tax imposed by this part if:
251 (i) a portion of the public right-of-way is located within a subdivision as defined in
252 Section 10-9-103 ; or
253 (ii) in exchange for the dedication, the person dedicating the public right-of-way
254 receives:
255 (A) money; or
256 (B) other consideration.
257 (3) (a) Except as provided in Subsection (4), land acquired by a governmental entity is
258 not subject to the rollback tax imposed by this part, but is subject to a one-time in lieu fee
259 payment as provided in Subsection (3)(b), if:
260 (i) the governmental entity acquires the land by eminent domain;
261 (ii) (A) the land is under the threat or imminence of eminent domain proceedings; and
262 (B) the governmental entity provides written notice of the proceedings to the owner; or
263 (iii) the land is donated to the governmental entity.
264 (b) (i) If a governmental entity acquires land under Subsection (3)(a)(iii), the
265 governmental entity shall make a one-time in lieu fee payment:
266 (A) to the county treasurer of the county in which the land is located; and
267 (B) in an amount [equal to the amount of rollback tax calculated under Section
268 59-2-506 ] calculated under Subsection (3)(c).
269 (ii) If a governmental entity acquires land under Subsection (3)(a)(i) or (3)(a)(ii), the
270 governmental entity shall make a one-time in lieu fee payment:
271 (A) to the county treasurer of the county in which the land is located; and
272 (B) (I) if the land remaining after the acquisition by the governmental entity meets the
273 requirements of Section 59-2-503 , in an amount equal to the [rollback tax under Section
274 59-2-506 ] amount imposed by Subsection (3)(b)(i)(B) on the land acquired by the
275 governmental entity; or

276 (II) if the land remaining after the acquisition by the governmental entity is less than
277 five acres, in an amount equal to the [rollback tax under Section 59-2-506 ] amount imposed by
278 Subsection (3)(b)(i)(B) on the land acquired by the governmental entity and the land remaining
279 after the acquisition by the governmental entity.
280 (iii) For purposes of Subsection (3)(b)(ii), "land remaining after the acquisition by the
281 governmental entity" includes other eligible acreage described in Subsection 59-2-503 (1)(a)(i)
282 that is used in conjunction with the land remaining after the acquisition by the governmental
283 entity.
284 (c) (i) For purposes of Subsection (3)(b)(i), regardless of whether the county legislative
285 body of the county in which the land is located adopts an ordinance in accordance with
286 Subsection 59-2-506 (4)(c), the one-time in lieu fee payment under this section shall be
287 calculated by computing the difference for the rollback period described in Subsection (3)(c)(ii)
288 between:
289 (A) the tax paid while the land was assessed under this part; and
290 (B) the tax that would have been paid had the property not been assessed under this
291 part.
292 (ii) For purposes of this Subsection (3)(c)(i), the rollback period is a time period that:
293 (A) begins on the later of:
294 (I) the date the land is first assessed under this part; or
295 (II) five years preceding the day on which the county assessor mails the notice required
296 by Subsection 59-2-506 (6); and
297 (B) ends the day on which the county assessor mails the notice required by Subsection
298 59-2-506 (6).
299 [(c)] (d) A county receiving an in lieu fee payment under Subsection (3)(b) shall
300 distribute the revenues generated by the payment:
301 (i) to the taxing entities in which the land is located; and
302 (ii) in the same proportion as the revenue from real property taxes is distributed.
303 (4) Except as provided in Section 59-2-506.5 , if land acquired by a governmental entity
304 is made subject to a conservation easement in accordance with Section 59-2-506.5 :
305 (a) the land is not subject to the rollback tax imposed by this part; and
306 (b) the governmental entity acquiring the land is not required to make an in lieu fee

307 payment under Subsection (3)(b).




Legislative Review Note
as of 2-3-03 11:07 AM

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

Office of Legislative Research and General Counsel