S.B. 120 Enrolled

RESIDENTIAL PROPERTY TAX EXEMPTION
2004 GENERAL SESSION
STATE OF UTAH
Sponsor: David L. Thomas
Howard A. Stephenson
LONG TITLE
General Description:
This bill modifies the Property Tax Act to amend residential property tax provisions.
Highlighted Provisions:
This bill:
. defines "household";
. grants rulemaking authority to the Utah State Tax Commission;
. provides that the residential property tax exemption is limited to one primary
residence per household;
. addresses the application of the residential property tax exemption with respect to an
owner of multiple residential properties located within the state; and
. makes technical changes.
Monies Appropriated in this Bill:
None
Other Special Clauses:
This bill takes effect on January 1, 2005.
Utah Code Sections Affected:
AMENDS:
59-2-102, as last amended by Chapter 113, Laws of Utah 2003
59-2-103, as last amended by Chapter 275, Laws of Utah 1995

Be it enacted by the Legislature of the state of Utah:
Section 1. Section 59-2-102 is amended to read:

59-2-102. Definitions.
As used in this chapter and title:
(1) "Aerial applicator" means aircraft or rotorcraft used exclusively for the purpose of
engaging in dispensing activities directly affecting agriculture or horticulture with an airworthiness
certificate from the Federal Aviation Administration certifying the aircraft or rotorcraft's use for
agricultural and pest control purposes.
(2) "Air charter service" means an air carrier operation which requires the customer to
hire an entire aircraft rather than book passage in whatever capacity is available on a scheduled
trip.
(3) "Air contract service" means an air carrier operation available only to customers who
engage the services of the carrier through a contractual agreement and excess capacity on any trip
and is not available to the public at large.
(4) "Aircraft" is as defined in Section 72-10-102 .
(5) "Airline" means any air carrier operating interstate routes on a scheduled basis which
offers to fly passengers or cargo on the basis of available capacity on regularly scheduled routes.
(6) "Assessment roll" means a permanent record of the assessment of property as
assessed by the county assessor and the commission and may be maintained manually or as a
computerized file as a consolidated record or as multiple records by type, classification, or
categories.
(7) "Certified revenue levy" means a property tax levy that provides the same amount of
ad valorem property tax revenue as was collected for the prior year, plus new growth, but
exclusive of revenue from collections from redemptions, interest, and penalties.
(8) "County-assessed commercial vehicle" means:
(a) any commercial vehicle, trailer, or semitrailer which is not apportioned under Section
41-1a-301 and is not operated interstate to transport the vehicle owner's goods or property in
furtherance of the owner's commercial enterprise;
(b) any passenger vehicle owned by a business and used by its employees for
transportation as a company car or vanpool vehicle; and

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(c) vehicles which are:
(i) especially constructed for towing or wrecking, and which are not otherwise used to
transport goods, merchandise, or people for compensation;
(ii) used or licensed as taxicabs or limousines;
(iii) used as rental passenger cars, travel trailers, or motor homes;
(iv) used or licensed in this state for use as ambulances or hearses;
(v) especially designed and used for garbage and rubbish collection; or
(vi) used exclusively to transport students or their instructors to or from any private,
public, or religious school or school activities.
(9) (a) Except as provided in Subsection (9)(b), for purposes of Section 59-2-801 ,
"designated tax area" means a tax area created by the overlapping boundaries of only the
following taxing entities:
(i) a county; and
(ii) a school district.
(b) Notwithstanding Subsection (9)(a), "designated tax area" includes a tax area created
by the overlapping boundaries of:
(i) the taxing entities described in Subsection (9)(a); and
(ii) (A) a city or town if the boundaries of the school district under Subsection (9)(a) and
the boundaries of the city or town are identical; or
(B) a special service district if the boundaries of the school district under Subsection
(9)(a) are located entirely within the special service district.
(10) "Eligible judgment" means a final and unappealable judgment or order under Section
59-2-1330 :
(a) that became a final and unappealable judgment or order no more than 14 months prior
to the day on which the notice required by Subsection 59-2-919 (4) is required to be mailed; and
(b) for which a taxing entity's share of the final and unappealable judgment or order is
greater than or equal to the lesser of:
(i) $5,000; or

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(ii) 2.5% of the total ad valorem property taxes collected by the taxing entity in the
previous fiscal year.
(11) (a) "Escaped property" means any property, whether personal, land, or any
improvements to the property, subject to taxation and is:
(i) inadvertently omitted from the tax rolls, assigned to the incorrect parcel, or assessed to
the wrong taxpayer by the assessing authority;
(ii) undervalued or omitted from the tax rolls because of the failure of the taxpayer to
comply with the reporting requirements of this chapter; or
(iii) undervalued because of errors made by the assessing authority based upon incomplete
or erroneous information furnished by the taxpayer.
(b) Property which is undervalued because of the use of a different valuation
methodology or because of a different application of the same valuation methodology is not
"escaped property."
(12) "Fair market value" means the amount at which property would change hands
between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and
both having reasonable knowledge of the relevant facts. For purposes of taxation, "fair market
value" shall be determined using the current zoning laws applicable to the property in question,
except in cases where there is a reasonable probability of a change in the zoning laws affecting
that property in the tax year in question and the change would have an appreciable influence upon
the value.
(13) "Farm machinery and equipment," for purposes of the exemption provided under
Section 59-2-1101 , means tractors, milking equipment and storage and cooling facilities, feed
handling equipment, irrigation equipment, harvesters, choppers, grain drills and planters, tillage
tools, scales, combines, spreaders, sprayers, haying equipment, and any other machinery or
equipment used primarily for agricultural purposes; but does not include vehicles required to be
registered with the Motor Vehicle Division or vehicles or other equipment used for business
purposes other than farming.
(14) "Geothermal fluid" means water in any form at temperatures greater than 120

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degrees centigrade naturally present in a geothermal system.
(15) "Geothermal resource" means:
(a) the natural heat of the earth at temperatures greater than 120 degrees centigrade; and
(b) the energy, in whatever form, including pressure, present in, resulting from, created
by, or which may be extracted from that natural heat, directly or through a material medium.
(16) (a) For purposes of Section 59-2-103 :
(i) "household" means the association of persons who live in the same dwelling, sharing
its furnishings, facilities, accommodations, and expenses; and
(ii) "household" includes married individuals, who are not legally separated, that have
established domiciles at separate locations within the state.
(b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
commission may make rules defining the term "domicile."
[(16)] (17) "Improvements" includes all buildings, structures, fixtures, fences, and
improvements erected upon or affixed to the land, whether the title has been acquired to the land
or not.
[(17)] (18) "Intangible property" means:
(a) property that is capable of private ownership separate from tangible property,
including:
(i) moneys;
(ii) credits;
(iii) bonds;
(iv) stocks;
(v) representative property;
(vi) franchises;
(vii) licenses;
(viii) trade names;
(ix) copyrights; and
(x) patents; or

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(b) a low-income housing tax credit.
[(18)] (19) "Low-income housing tax credit" means:
(a) a federal low-income housing tax credit under Section 42, Internal Revenue Code; or
(b) a low-income housing tax credit under:
(i) Section 59-7-607 ; or
(ii) Section 59-10-129 .
[(19)] (20) "Metalliferous minerals" includes gold, silver, copper, lead, zinc, and uranium.
[(20)] (21) "Mine" means a natural deposit of either metalliferous or nonmetalliferous
valuable mineral.
[(21)] (22) "Mining" means the process of producing, extracting, leaching, evaporating,
or otherwise removing a mineral from a mine.
[(22)] (23) (a) "Mobile flight equipment" means tangible personal property that is:
(i) owned or operated by an:
(A) air charter service;
(B) air contract service; or
(C) airline; and
(ii) (A) capable of flight;
(B) attached to an aircraft that is capable of flight; or
(C) contained in an aircraft that is capable of flight if the tangible personal property is
intended to be used:
(I) during multiple flights;
(II) during a takeoff, flight, or landing; and
(III) as a service provided by an air charter service, air contract service, or airline.
(b) (i) "Mobile flight equipment" does not include a spare part other than a spare engine
that is rotated:
(A) at regular intervals; and
(B) with an engine that is attached to the aircraft.
(ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the

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commission may make rules defining the term "regular intervals."
[(23)] (24) "Nonmetalliferous minerals" includes, but is not limited to, oil, gas, coal, salts,
sand, rock, gravel, and all carboniferous materials.
[(24)] (25) "Personal property" includes:
(a) every class of property as defined in Subsection [(25)] (26) which is the subject of
ownership and not included within the meaning of the terms "real estate" and "improvements";
(b) gas and water mains and pipes laid in roads, streets, or alleys;
(c) bridges and ferries; and
(d) livestock which, for the purposes of the exemption provided under Section
59-2-1112 , means all domestic animals, honeybees, poultry, fur-bearing animals, and fish.
[(25)] (26) (a) "Property" means property that is subject to assessment and taxation
according to its value.
(b) "Property" does not include intangible property as defined in this section.
[(26)] (27) "Public utility," for purposes of this chapter, means the operating property of a
railroad, gas corporation, oil or gas transportation or pipeline company, coal slurry pipeline
company, electrical corporation, telephone corporation, sewerage corporation, or heat
corporation where the company performs the service for, or delivers the commodity to, the public
generally or companies serving the public generally, or in the case of a gas corporation or an
electrical corporation, where the gas or electricity is sold or furnished to any member or
consumers within the state for domestic, commercial, or industrial use. Public utility also means
the operating property of any entity or person defined under Section 54-2-1 except water
corporations.
[(27)] (28) "Real estate" or "real property" includes:
(a) the possession of, claim to, ownership of, or right to the possession of land;
(b) all mines, minerals, and quarries in and under the land, all timber belonging to
individuals or corporations growing or being on the lands of this state or the United States, and all
rights and privileges appertaining to these; and
(c) improvements.

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[(28)] (29) "Residential property," for the purposes of the reductions and adjustments
under this chapter, means any property used for residential purposes as a primary residence. It
does not include property used for transient residential use or condominiums used in rental pools.
[(29)] (30) For purposes of Subsection 59-2-801 (1)(e), "route miles" means the number
of miles calculated by the commission that is:
(a) measured in a straight line by the commission; and
(b) equal to the distance between a geographical location that begins or ends:
(i) at a boundary of the state; and
(ii) where an aircraft:
(A) takes off; or
(B) lands.
[(30)] (31) (a) "State-assessed commercial vehicle" means:
(i) any commercial vehicle, trailer, or semitrailer which operates interstate or intrastate to
transport passengers, freight, merchandise, or other property for hire; or
(ii) any commercial vehicle, trailer, or semitrailer which operates interstate and transports
the vehicle owner's goods or property in furtherance of the owner's commercial enterprise.
(b) "State-assessed commercial vehicle" does not include vehicles used for hire which are
specified in Subsection (8)(c) as county-assessed commercial vehicles.
[(31)] (32) "Taxable value" means fair market value less any applicable reduction allowed
for residential property under Section 59-2-103 .
[(32)] (33) "Tax area" means a geographic area created by the overlapping boundaries of
one or more taxing entities.
[(33)] (34) "Taxing entity" means any county, city, town, school district, special taxing
district, or any other political subdivision of the state with the authority to levy a tax on property.
[(34)] (35) "Tax roll" means a permanent record of the taxes charged on property, as
extended on the assessment roll and may be maintained on the same record or records as the
assessment roll or may be maintained on a separate record properly indexed to the assessment
roll. It includes tax books, tax lists, and other similar materials.

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Section 2. Section 59-2-103 is amended to read:
59-2-103. Rate of assessment of property -- Residential property.
(1) All tangible taxable property located within the state shall be assessed and taxed at a
uniform and equal rate on the basis of its fair market value, as valued on January 1, unless
otherwise provided by law.
(2) [Beginning] Subject to Subsections (3) and (4), beginning on January 1, 1995, the fair
market value of residential property located within the state shall be reduced by 45%, representing
a residential exemption allowed under Utah Constitution Article XIII, Section 2[, Utah
Constitution].
(3) No more than one acre of land per residential unit may qualify for the residential
exemption.
(4) (a) Except as provided in Subsection (4)(b)(ii), beginning on January 1, 2005, the
residential exemption in Subsection (2) is limited to one primary residence per household.
(b) An owner of multiple residential properties located within the state is allowed a
residential exemption under Subsection (2) for:
(i) subject to Subsection (4)(a), the primary residence of the owner; and
(ii) each residential property that is the primary residence of a tenant.
Section 3. Effective date.
This bill takes effect on January 1, 2005.

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