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S.B. 78

             1     

EXEMPTIONS TO RESIDENTIAL PROPERTY

             2     
TAX

             3     
2004 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Sponsor: Ed P. Mayne

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill modifies the Property Tax Act to amend residential property tax exemption
             10      provisions and certified tax rate provisions.
             11      Highlighted Provisions:
             12          This bill:
             13          .    provides definitions;
             14          .    provides for an exemption from taxation of a portion of the fair market value of a
             15      qualifying secondary residence;
             16          .    clarifies the exemption from taxation of a portion of the fair market value of a
             17      primary residence;
             18          .    establishes procedures and requirements for claiming an exemption for a qualifying
             19      secondary residence;
             20          .    requires the State Tax Commission to make distributions from the General Fund to
             21      counties for the amount of exemptions claimed for qualifying secondary residences;
             22          .    establishes procedures for making such distributions;
             23          .    provides that certain adjustments shall be made to a taxing entity's certified tax rate
             24      to offset the amounts of residential exemptions allowed to qualifying secondary
             25      residences; and
             26          .    makes technical changes.
             27      Monies Appropriated in this Bill:



             28          None
             29      Other Special Clauses:
             30          None
             31      Utah Code Sections Affected:
             32      AMENDS:
             33          59-2-102, as last amended by Chapter 113, Laws of Utah 2003
             34          59-2-103, as last amended by Chapter 275, Laws of Utah 1995
             35          59-2-924, as last amended by Chapter 122, Laws of Utah 2003
             36      ENACTS:
             37          59-2-1115, Utah Code Annotated 1953
             38     
             39      Be it enacted by the Legislature of the state of Utah:
             40          Section 1. Section 59-2-102 is amended to read:
             41           59-2-102. Definitions.
             42          As used in this chapter and title:
             43          (1) "Aerial applicator" means aircraft or rotorcraft used exclusively for the purpose of
             44      engaging in dispensing activities directly affecting agriculture or horticulture with an
             45      airworthiness certificate from the Federal Aviation Administration certifying the aircraft or
             46      rotorcraft's use for agricultural and pest control purposes.
             47          (2) "Air charter service" means an air carrier operation which requires the customer to
             48      hire an entire aircraft rather than book passage in whatever capacity is available on a scheduled
             49      trip.
             50          (3) "Air contract service" means an air carrier operation that is:
             51          (a) available only to customers who engage the services of the carrier through a
             52      contractual agreement and excess capacity on any trip; and [is]
             53          (b) not available to the public at large.
             54          (4) "Aircraft" is as defined in Section 72-10-102 .
             55          (5) "Airline" means any air carrier operating interstate routes on a scheduled basis
             56      [which] that offers to fly passengers or cargo on the basis of available capacity on regularly
             57      scheduled routes.
             58          (6) "Assessment roll" means a permanent record of the assessment of property:



             59          (a) as assessed by the county assessor and the commission; and
             60          (b) that may be maintained manually or as a computerized file as a consolidated record
             61      or as multiple records by type, classification, or categories.
             62          (7) "Certified revenue levy" means a property tax levy that provides the same amount
             63      of ad valorem property tax revenue as was collected for the prior year, plus new growth, but
             64      exclusive of revenue from collections from redemptions, interest, and penalties.
             65          (8) "County-assessed commercial vehicle" means:
             66          (a) any commercial vehicle, trailer, or semitrailer [which] that:
             67          (i) is not apportioned under Section 41-1a-301 ; and
             68          (ii) is not operated interstate to transport the vehicle owner's goods or property in
             69      furtherance of the owner's commercial enterprise;
             70          (b) any passenger vehicle:
             71          (i) owned by a business; and
             72          (ii) used by [its] the business' employees for transportation as a company car or
             73      vanpool vehicle; and
             74          (c) vehicles [which] that are:
             75          (i) especially constructed for towing or wrecking, and [which] that are not otherwise
             76      used to transport goods, merchandise, or people for compensation;
             77          (ii) used or licensed as taxicabs or limousines;
             78          (iii) used as rental passenger cars, travel trailers, or motor homes;
             79          (iv) used or licensed in this state for use as ambulances or hearses;
             80          (v) especially designed and used for garbage and rubbish collection; or
             81          (vi) used exclusively to transport students or their instructors to or from any private,
             82      public, or religious school or school activities.
             83          (9) (a) Except as provided in Subsection (9)(b), for purposes of Section 59-2-801 ,
             84      "designated tax area" means a tax area created by the overlapping boundaries of only the
             85      following taxing entities:
             86          (i) a county; and
             87          (ii) a school district.
             88          (b) Notwithstanding Subsection (9)(a), "designated tax area" includes a tax area created
             89      by the overlapping boundaries of:


             90          (i) the taxing entities described in Subsection (9)(a); and
             91          (ii) (A) a city or town if the boundaries of the school district under Subsection (9)(a)
             92      and the boundaries of the city or town are identical; or
             93          (B) a special service district if the boundaries of the school district under Subsection
             94      (9)(a) are located entirely within the special service district.
             95          (10) "Eligible judgment" means a final and unappealable judgment or order under
             96      Section 59-2-1330 :
             97          (a) that became a final and unappealable judgment or order no more than 14 months
             98      prior to the day on which the notice required by Subsection 59-2-919 (4) is required to be
             99      mailed; and
             100          (b) for which a taxing entity's share of the final and unappealable judgment or order is
             101      greater than or equal to the lesser of:
             102          (i) $5,000; or
             103          (ii) 2.5% of the total ad valorem property taxes collected by the taxing entity in the
             104      previous fiscal year.
             105          (11) (a) "Escaped property" means any property, whether personal, land, or any
             106      improvements to the property, subject to taxation and is:
             107          (i) inadvertently omitted from the tax rolls, assigned to the incorrect parcel, or assessed
             108      to the wrong taxpayer by the assessing authority;
             109          (ii) undervalued or omitted from the tax rolls because of the failure of the taxpayer to
             110      comply with the reporting requirements of this chapter; or
             111          (iii) undervalued because of errors made by the assessing authority based upon
             112      incomplete or erroneous information furnished by the taxpayer.
             113          (b) [Property which] "Escaped property" does not include property that is undervalued
             114      because of the use of a different valuation methodology or because of a different application of
             115      the same valuation methodology [is not "escaped property."].
             116          (12) "Fair market value" means the amount at which property would change hands
             117      between a willing buyer and a willing seller, neither being under any compulsion to buy or sell
             118      and both having reasonable knowledge of the relevant facts. For purposes of taxation, "fair
             119      market value" shall be determined using the current zoning laws applicable to the property in
             120      question, except in cases where there is a reasonable probability of a change in the zoning laws


             121      affecting that property in the tax year in question and the change would have an appreciable
             122      influence upon the value.
             123          (13) (a) "Farm machinery and equipment," for purposes of the exemption provided
             124      under Section 59-2-1101 , means tractors, milking equipment and storage and cooling facilities,
             125      feed handling equipment, irrigation equipment, harvesters, choppers, grain drills and planters,
             126      tillage tools, scales, combines, spreaders, sprayers, haying equipment, and any other machinery
             127      or equipment used primarily for agricultural purposes[; but].
             128          (b) "Farm machinery and equipment" does not include:
             129          (i) vehicles required to be registered with the Motor Vehicle Division; or
             130          (ii) vehicles or other equipment used for business purposes other than farming.
             131          (14) "Geothermal fluid" means water in any form at temperatures greater than 120
             132      degrees centigrade naturally present in a geothermal system.
             133          (15) "Geothermal resource" means:
             134          (a) the natural heat of the earth at temperatures greater than 120 degrees centigrade;
             135      and
             136          (b) the energy, in whatever form, including pressure, present in, resulting from, created
             137      by, or which may be extracted from that natural heat, directly or through a material medium.
             138          (16) "Improvements" includes all buildings, structures, fixtures, fences, and
             139      improvements erected upon or affixed to the land, whether the title has been acquired to the
             140      land or not.
             141          (17) "Intangible property" means:
             142          (a) property that is capable of private ownership separate from tangible property,
             143      including:
             144          (i) moneys;
             145          (ii) credits;
             146          (iii) bonds;
             147          (iv) stocks;
             148          (v) representative property;
             149          (vi) franchises;
             150          (vii) licenses;
             151          (viii) trade names;


             152          (ix) copyrights; and
             153          (x) patents; or
             154          (b) a low-income housing tax credit.
             155          (18) "Low-income housing tax credit" means:
             156          (a) a federal low-income housing tax credit under Section 42, Internal Revenue Code;
             157      or
             158          (b) a low-income housing tax credit under:
             159          (i) Section 59-7-607 ; or
             160          (ii) Section 59-10-129 .
             161          (19) "Metalliferous minerals" includes gold, silver, copper, lead, zinc, and uranium.
             162          (20) "Mine" means a natural deposit of either metalliferous or nonmetalliferous
             163      valuable mineral.
             164          (21) "Mining" means the process of producing, extracting, leaching, evaporating, or
             165      otherwise removing a mineral from a mine.
             166          (22) (a) "Mobile flight equipment" means tangible personal property that is:
             167          (i) owned or operated by an:
             168          (A) air charter service;
             169          (B) air contract service; or
             170          (C) airline; and
             171          (ii) (A) capable of flight;
             172          (B) attached to an aircraft that is capable of flight; or
             173          (C) contained in an aircraft that is capable of flight if the tangible personal property is
             174      intended to be used:
             175          (I) during multiple flights;
             176          (II) during a takeoff, flight, or landing; and
             177          (III) as a service provided by an air charter service, air contract service, or airline.
             178          (b) (i) "Mobile flight equipment" does not include a spare part other than a spare
             179      engine that is rotated:
             180          (A) at regular intervals; and
             181          (B) with an engine that is attached to the aircraft.
             182          (ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,


             183      the commission may make rules defining the term "regular intervals."
             184          (23) "Nonmetalliferous minerals" includes, but is not limited to, oil, gas, coal, salts,
             185      sand, rock, gravel, and all carboniferous materials.
             186          (24) "Personal property" includes:
             187          (a) [every] each class of property as defined in Subsection [(25) which] (26) that is:
             188          (i) the subject of ownership; and
             189          (ii) not [included within the meaning of the terms "]real estate[" and "improvements"];
             190          (b) gas and water mains and pipes laid in roads, streets, or alleys;
             191          (c) bridges and ferries; and
             192          (d) livestock which, for the purposes of the exemption provided under Section
             193      59-2-1112 , means all domestic animals, honeybees, poultry, fur-bearing animals, and fish.
             194          (25) (a) "Primary residence" means property used:
             195          (i) for residential purposes; and
             196          (ii) as a domicile.
             197          (b) "Primary residence" does not include:
             198          (i) property used as a transient residence; or
             199          (ii) a condominium used in a rental pool.
             200          (c) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             201      commission may by rule define the terms:
             202          (i) "domicile";
             203          (ii) "rental pool"; or
             204          (iii) "transient residence."
             205          [(25)] (26) (a) "Property" means property that is subject to assessment and taxation
             206      according to its value.
             207          (b) "Property" does not include intangible property as defined in this section.
             208          [(26)] (27) "Public utility," for purposes of this chapter, means the operating property
             209      of a railroad, gas corporation, oil or gas transportation or pipeline company, coal slurry pipeline
             210      company, electrical corporation, telephone corporation, sewerage corporation, or heat
             211      corporation where the company performs the service for, or delivers the commodity to, the
             212      public generally or companies serving the public generally, or in the case of a gas corporation
             213      or an electrical corporation, where the gas or electricity is sold or furnished to any member or


             214      consumers within the state for domestic, commercial, or industrial use. Public utility also
             215      means the operating property of any entity or person defined under Section 54-2-1 except water
             216      corporations.
             217          (28) (a) "Qualifying secondary residence" means property that:
             218          (i) is used for residential purposes;
             219          (ii) is not a primary residence;
             220          (iii) is not connected to a sewer system or water system that is operated by:
             221          (A) a county;
             222          (B) a city;
             223          (C) a town;
             224          (D) a special district created under Title 17A, Special Districts;
             225          (E) a local district created under Title 17B, Chapter 2, Local Districts; or
             226          (F) an interlocal cooperation entity created under Title 11, Chapter 13, Interlocal
             227      Cooperation Act; and
             228          (iv) is not rented to another person during a calender year for which a residential
             229      exemption for a qualifying secondary residence is claimed in accordance with Section
             230      52-2-1115 .
             231          (b) "Qualifying secondary residence" does not include:
             232          (i) a condominium used in a rental pool;
             233          (ii) a houseboat;
             234          (iii) property owned by:
             235          (A) a for-profit business entity; or
             236          (B) more than two persons, unless the persons are related persons;
             237          (iv) a recreational vehicle as defined in Section 13-14-102 ;
             238          (v) a tent; or
             239          (vi) property similar to the property described in Subsections (28)(b)(i) through (v).
             240          (c) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             241      commission may make rules defining:
             242          (i) the terms:
             243          (A) "houseboat";
             244          (B) "rental pool"; or


             245          (C) "tent"; or
             246          (ii) what constitutes property similar to the property described in Subsections (28)(b)(i)
             247      through (v).
             248          [(27)] (29) "Real estate" or "real property" includes:
             249          (a) the possession of, claim to, ownership of, or right to the possession of land;
             250          (b) all mines, minerals, and quarries in and under the land, all timber belonging to
             251      individuals or corporations growing or being on the lands of this state or the United States, and
             252      all rights and privileges appertaining to these; and
             253          (c) improvements.
             254          (30) For purposes of Subsection (28), "related persons" means a relationship in which
             255      each owner of a residence is related to all of the other owners of the residence as:
             256          (a) an ancestor;
             257          (b) a brother or sister by the whole or half blood;
             258          (c) a lineal descendant;
             259          (d) a spouse;
             260          (e) a stepbrother or stepsister;
             261          (f) a stepfather or stepmother;
             262          (g) a stepgrandchild;
             263          (h) a stepdaughter or stepson; or
             264          (i) a spouse of an owner described in Subsections (30)(a) through (h).
             265          [(28)] (31) "Residential property," for the purposes of the reductions and adjustments
             266      under this chapter, means [any property used for residential purposes as]:
             267          (a) a primary residence[. It does not include property used for transient residential use
             268      or condominiums used in rental pools.]; or
             269          (b) a qualifying secondary residence.
             270          [(29)] (32) For purposes of Subsection 59-2-801 (1)(e), "route miles" means the number
             271      of miles calculated by the commission that is:
             272          (a) measured in a straight line by the commission; and
             273          (b) equal to the distance between a geographical location that begins or ends:
             274          (i) at a boundary of the state; and
             275          (ii) where an aircraft:


             276          (A) takes off; or
             277          (B) lands.
             278          [(30)] (33) (a) "State-assessed commercial vehicle" means:
             279          (i) any commercial vehicle, trailer, or semitrailer which operates interstate or intrastate
             280      to transport passengers, freight, merchandise, or other property for hire; or
             281          (ii) any commercial vehicle, trailer, or semitrailer which operates interstate and
             282      transports the vehicle owner's goods or property in furtherance of the owner's commercial
             283      enterprise.
             284          (b) "State-assessed commercial vehicle" does not include vehicles used for hire which
             285      are specified in Subsection (8)(c) as county-assessed commercial vehicles.
             286          [(31)] (34) "Taxable value" means fair market value less any applicable reduction
             287      allowed for residential property under Section 59-2-103 .
             288          [(32)] (35) "Tax area" means a geographic area created by the overlapping boundaries
             289      of one or more taxing entities.
             290          [(33)] (36) "Taxing entity" means any county, city, town, school district, special taxing
             291      district, or any other political subdivision of the state with the authority to levy a tax on
             292      property.
             293          [(34)] (37) (a) "Tax roll" means a permanent record of the taxes charged on property[,]:
             294          (i) as extended on the assessment roll; and
             295          (ii) that may be maintained on:
             296          (A) the same record or records as the assessment roll; or [may be maintained on]
             297          (B) a separate record properly indexed to the assessment roll. [It]
             298          (b) "Tax roll" includes tax books, tax lists, and other similar materials.
             299          Section 2. Section 59-2-103 is amended to read:
             300           59-2-103. Rate of assessment of property -- Residential property.
             301          (1) [All] Unless otherwise provided by law, all tangible taxable property shall be
             302      assessed and taxed at a uniform and equal rate on the basis of [its] the property's fair market
             303      value, as valued on January 1[, unless otherwise provided by law].
             304          (2) [Beginning January 1, 1995, the] The fair market value of residential property [shall
             305      be reduced by 45%, representing a residential exemption allowed under Utah Constitution
             306      Article XIII, Section 2, Utah Constitution.] is subject to the following residential exemptions:


             307          (a) beginning on January 1, 1995, 45% of the fair market value of each primary
             308      residence in the state is exempt; and

             309          (b) subject to Section 59-2-1115 , beginning on January 1, 2005, 25% of up to the first
             310      $100,000 of the fair market value of a qualifying secondary residence in the state is exempt.

             311          (3) No more than one acre of land per residential unit may qualify for [the] a residential
             312      exemption under this section.
             313          Section 3. Section 59-2-924 is amended to read:
             314           59-2-924. Report of valuation of property to county auditor and commission --
             315      Transmittal by auditor to governing bodies -- Certified tax rate -- Rulemaking authority
             316      -- Adoption of tentative budget.
             317          (1) (a) Before June 1 of each year, the county assessor of each county shall deliver to
             318      the county auditor and the commission the following statements:
             319          (i) a statement containing the aggregate valuation of all taxable property in each taxing
             320      entity; and
             321          (ii) a statement containing the taxable value of any additional personal property
             322      estimated by the county assessor to be subject to taxation in the current year.
             323          (b) The county auditor shall, on or before June 8, transmit to the governing body of
             324      each taxing entity:
             325          (i) the statements described in Subsections (1)(a)(i) and (ii);
             326          (ii) an estimate of the revenue from personal property;
             327          (iii) the certified tax rate; and
             328          (iv) all forms necessary to submit a tax levy request.
             329          (2) (a) (i) The "certified tax rate" means a tax rate that will provide the same ad
             330      valorem property tax revenues for a taxing entity as were budgeted by that taxing entity for the
             331      prior year.
             332          (ii) For purposes of this Subsection (2), "ad valorem property tax revenues" do not
             333      include:
             334          (A) collections from redemptions;
             335          (B) interest; and
             336          (C) penalties.
             337          (iii) Except as provided in Subsection (2)(a)(v), the certified tax rate shall be calculated


             338      by dividing the ad valorem property tax revenues budgeted for the prior year by the taxing
             339      entity by the taxable value established in accordance with Section 59-2-913 .
             340          (iv) (A) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking
             341      Act, the commission shall make rules determining the calculation of ad valorem property tax
             342      revenues budgeted by a taxing entity.
             343          (B) For purposes of Subsection (2)(a)(iv)(A), ad valorem property tax revenues
             344      budgeted by a taxing entity shall be calculated in the same manner as budgeted property tax
             345      revenues are calculated for purposes of Section 59-2-913 .
             346          (v) The certified tax rates for the taxing entities described in this Subsection (2)(a)(v)
             347      shall be calculated as follows:
             348          (A) except as provided in Subsection (2)(a)(v)(B), for new taxing entities the certified
             349      tax rate is zero;
             350          (B) for each municipality incorporated on or after July 1, 1996, the certified tax rate is:
             351          (I) in a county of the first, second, or third class, the levy imposed for municipal-type
             352      services under Sections 17-34-1 and 17-36-9 ; and
             353          (II) in a county of the fourth, fifth, or sixth class, the levy imposed for general county
             354      purposes and such other levies imposed solely for the municipal-type services identified in
             355      Section 17-34-1 and Subsection 17-36-3 (22);
             356          (C) for debt service voted on by the public, the certified tax rate shall be the actual levy
             357      imposed by that section, except that the certified tax rates for the following levies shall be
             358      calculated in accordance with Section 59-2-913 and this section:
             359          (I) school leeways provided for under Sections 11-2-7 , 53A-16-110 , 53A-17a-125 ,
             360      53A-17a-127 , 53A-17a-134 , 53A-17a-143 , 53A-17a-145 , and 53A-21-103 ; and
             361          (II) levies to pay for the costs of state legislative mandates or judicial or administrative
             362      orders under Section 59-2-906.3 .
             363          (vi) (A) A judgment levy imposed under Section 59-2-1328 or Section 59-2-1330 shall
             364      be established at that rate which is sufficient to generate only the revenue required to satisfy
             365      one or more eligible judgments, as defined in Section 59-2-102 .
             366          (B) The ad valorem property tax revenue generated by the judgment levy shall not be
             367      considered in establishing the taxing entity's aggregate certified tax rate.
             368          (b) (i) For the purpose of calculating the certified tax rate, the county auditor shall use


             369      the taxable value of property on the assessment roll.
             370          (ii) For purposes of Subsection (2)(b)(i), the taxable value of property on the
             371      assessment roll does not include new growth as defined in Subsection (2)(b)(iii).
             372          (iii) "New growth" means:
             373          (A) the difference between the increase in taxable value of the taxing entity from the
             374      previous calendar year to the current year; minus
             375          (B) the amount of an increase in taxable value described in Subsection (2)(b)(iv).
             376          (iv) Subsection (2)(b)(iii)(B) applies to the following increases in taxable value:
             377          (A) the amount of increase to locally assessed real property taxable values resulting
             378      from factoring, reappraisal, or any other adjustments; or
             379          (B) the amount of an increase in the taxable value of property assessed by the
             380      commission under Section 59-2-201 resulting from a change in the method of apportioning the
             381      taxable value prescribed by:
             382          (I) the Legislature;
             383          (II) a court;
             384          (III) the commission in an administrative rule; or
             385          (IV) the commission in an administrative order.
             386          (c) Beginning January 1, 1997, if a taxing entity receives increased revenues from
             387      uniform fees on tangible personal property under Section 59-2-404 , 59-2-405 , or 59-2-405.1 as
             388      a result of any county imposing a sales and use tax under Chapter 12, Part 11, County Option
             389      Sales and Use Tax, the taxing entity shall decrease its certified tax rate to offset the increased
             390      revenues.
             391          (d) (i) Beginning July 1, 1997, if a county has imposed a sales and use tax under
             392      Chapter 12, Part 11, County Option Sales and Use Tax, the county's certified tax rate shall be:
             393          (A) decreased on a one-time basis by the amount of the estimated sales and use tax
             394      revenue to be distributed to the county under Subsection 59-12-1102 (3); and
             395          (B) increased by the amount necessary to offset the county's reduction in revenue from
             396      uniform fees on tangible personal property under Section 59-2-404 , 59-2-405 , or 59-2-405.1 as
             397      a result of the decrease in the certified tax rate under Subsection (2)(d)(i)(A).
             398          (ii) The commission shall determine estimates of sales and use tax distributions for
             399      purposes of Subsection (2)(d)(i).


             400          (e) Beginning January 1, 1998, if a municipality has imposed an additional resort
             401      communities sales tax under Section 59-12-402 , the municipality's certified tax rate shall be
             402      decreased on a one-time basis by the amount necessary to offset the first 12 months of
             403      estimated revenue from the additional resort communities sales and use tax imposed under
             404      Section 59-12-402 .
             405          (f) For the calendar year beginning on January 1, 1999, and ending on December 31,
             406      1999, a taxing entity's certified tax rate shall be adjusted by the amount necessary to offset the
             407      adjustment in revenues from uniform fees on tangible personal property under Section
             408      59-2-405.1 as a result of the adjustment in uniform fees on tangible personal property under
             409      Section 59-2-405.1 enacted by the Legislature during the 1998 Annual General Session.
             410          (g) For purposes of Subsections (2)(h) through (j):
             411          (i) "1998 actual collections" means the amount of revenues a taxing entity actually
             412      collected for the calendar year beginning on January 1, 1998, under Section 59-2-405 for:
             413          (A) motor vehicles required to be registered with the state that weigh 12,000 pounds or
             414      less; and
             415          (B) state-assessed commercial vehicles required to be registered with the state that
             416      weigh 12,000 pounds or less.
             417          (ii) "1999 actual collections" means the amount of revenues a taxing entity actually
             418      collected for the calendar year beginning on January 1, 1999, under Section 59-2-405.1 .
             419          (h) For the calendar year beginning on January 1, 2000, the commission shall make the
             420      following adjustments:
             421          (i) the commission shall make the adjustment described in Subsection (2)(i)(i) if, for
             422      the calendar year beginning on January 1, 1999, a taxing entity's 1998 actual collections were
             423      greater than the sum of:
             424          (A) the taxing entity's 1999 actual collections; and
             425          (B) any adjustments the commission made under Subsection (2)(f);
             426          (ii) the commission shall make the adjustment described in Subsection (2)(i)(ii) if, for
             427      the calendar year beginning on January 1, 1999, a taxing entity's 1998 actual collections were
             428      greater than the taxing entity's 1999 actual collections, but the taxing entity's 1998 actual
             429      collections were less than the sum of:
             430          (A) the taxing entity's 1999 actual collections; and


             431          (B) any adjustments the commission made under Subsection (2)(f); and
             432          (iii) the commission shall make the adjustment described in Subsection (2)(i)(iii) if, for
             433      the calendar year beginning on January 1, 1999, a taxing entity's 1998 actual collections were
             434      less than the taxing entity's 1999 actual collections.
             435          (i) (i) For purposes of Subsection (2)(h)(i), the commission shall increase a taxing
             436      entity's certified tax rate under this section and a taxing entity's certified revenue levy under
             437      Section 59-2-906.1 by the amount necessary to offset the difference between:
             438          (A) the taxing entity's 1998 actual collections; and
             439          (B) the sum of:
             440          (I) the taxing entity's 1999 actual collections; and
             441          (II) any adjustments the commission made under Subsection (2)(f).
             442          (ii) For purposes of Subsection (2)(h)(ii), the commission shall decrease a taxing
             443      entity's certified tax rate under this section and a taxing entity's certified revenue levy under
             444      Section 59-2-906.1 by the amount necessary to offset the difference between:
             445          (A) the sum of:
             446          (I) the taxing entity's 1999 actual collections; and
             447          (II) any adjustments the commission made under Subsection (2)(f); and
             448          (B) the taxing entity's 1998 actual collections.
             449          (iii) For purposes of Subsection (2)(h)(iii), the commission shall decrease a taxing
             450      entity's certified tax rate under this section and a taxing entity's certified revenue levy under
             451      Section 59-2-906.1 by the amount of any adjustments the commission made under Subsection
             452      (2)(f).
             453          (j) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, for
             454      purposes of Subsections (2)(f) through (i), the commission may make rules establishing the
             455      method for determining a taxing entity's 1998 actual collections and 1999 actual collections.
             456          (k) (i) (A) For fiscal year 2000, the certified tax rate of each county required under
             457      Subsection 17-34-1 (4)(a) to provide advanced life support and paramedic services to the
             458      unincorporated area of the county shall be decreased by the amount necessary to reduce
             459      revenues in that fiscal year by an amount equal to the difference between the amount the county
             460      budgeted in its 2000 fiscal year budget for advanced life support and paramedic services
             461      countywide and the amount the county spent during fiscal year 2000 for those services,


             462      excluding amounts spent from a municipal services fund for those services.
             463          (B) For fiscal year 2001, the certified tax rate of each county to which Subsection
             464      (2)(k)(i)(A) applies shall be decreased by the amount necessary to reduce revenues in that fiscal
             465      year by the amount that the county spent during fiscal year 2000 for advanced life support and
             466      paramedic services countywide, excluding amounts spent from a municipal services fund for
             467      those services.
             468          (ii) (A) A city or town located within a county of the first class to which Subsection
             469      (2)(k)(i) applies may increase its certified tax rate by the amount necessary to generate within
             470      the city or town the same amount of revenues as the county would collect from that city or
             471      town if the decrease under Subsection (2)(k)(i) did not occur.
             472          (B) An increase under Subsection (2)(k)(ii)(A), whether occurring in a single fiscal
             473      year or spread over multiple fiscal years, is not subject to the notice and hearing requirements
             474      of Sections 59-2-918 and 59-2-919 .
             475          (l) (i) The certified tax rate of each county required under Subsection 17-34-1 (4)(b) to
             476      provide detective investigative services to the unincorporated area of the county shall be
             477      decreased:
             478          (A) in fiscal year 2001 by the amount necessary to reduce revenues in that fiscal year
             479      by at least $4,400,000; and
             480          (B) in fiscal year 2002 by the amount necessary to reduce revenues in that fiscal year
             481      by an amount equal to the difference between $9,258,412 and the amount of the reduction in
             482      revenues under Subsection (2)(l)(i)(A).
             483          (ii) (A) (I) Beginning with municipal fiscal year 2002, a city or town located within a
             484      county to which Subsection (2)(l)(i) applies may increase its certified tax rate to generate
             485      within the city or town the same amount of revenue as the county would have collected during
             486      county fiscal year 2001 from within the city or town except for Subsection (2)(l)(i)(A).
             487          (II) Beginning with municipal fiscal year 2003, a city or town located within a county
             488      to which Subsection (2)(l)(i) applies may increase its certified tax rate to generate within the
             489      city or town the same amount of revenue as the county would have collected during county
             490      fiscal year 2002 from within the city or town except for Subsection (2)(l)(i)(B).
             491          (B) (I) Except as provided in Subsection (2)(l)(ii)(B)(II), an increase in the city or
             492      town's certified tax rate under Subsection (2)(l)(ii)(A), whether occurring in a single fiscal year


             493      or spread over multiple fiscal years, is subject to the notice and hearing requirements of
             494      Sections 59-2-918 and 59-2-919 .
             495          (II) For an increase under this Subsection (2)(l)(ii) that generates revenue that does not
             496      exceed the same amount of revenue as the county would have collected except for Subsection
             497      (2)(l)(i), the requirements of Sections 59-2-918 and 59-2-919 do not apply if the city or town:
             498          (aa) publishes a notice that meets the size, type, placement, and frequency requirements
             499      of Section 59-2-919 , reflects that the increase is a shift of a tax from one imposed by the county
             500      to one imposed by the city or town, and explains how the revenues from the tax increase will
             501      be used; and
             502          (bb) holds a public hearing on the tax shift that may be held in conjunction with the
             503      city or town's regular budget hearing.
             504          (m) (i) This Subsection (2)(m) applies to each county that:
             505          (A) establishes a countywide special service district under Title 17A, Chapter 2, Part
             506      13, Utah Special Service District Act, to provide jail service, as provided in Subsection
             507      17A-2-1304 (1)(a)(x); and
             508          (B) levies a property tax on behalf of the special service district under Section
             509      17A-2-1322 .
             510          (ii) (A) The certified tax rate of each county to which this Subsection (2)(m) applies
             511      shall be decreased by the amount necessary to reduce county revenues by the same amount of
             512      revenues that will be generated by the property tax imposed on behalf of the special service
             513      district.
             514          (B) Each decrease under Subsection (2)(m)(ii)(A) shall occur contemporaneously with
             515      the levy on behalf of the special service district under Section 17A-2-1322 .
             516          (n) (i) As used in this Subsection (2)(n):
             517          (A) "Annexing county" means a county whose unincorporated area is included within a
             518      fire district by annexation.
             519          (B) "Annexing municipality" means a municipality whose area is included within a fire
             520      district by annexation.
             521          (C) "Equalized fire protection tax rate" means the tax rate that results from:
             522          (I) calculating, for each participating county and each participating municipality, the
             523      property tax revenue necessary to cover all of the costs associated with providing fire


             524      protection, paramedic, and emergency services:
             525          (aa) for a participating county, in the unincorporated area of the county; and
             526          (bb) for a participating municipality, in the municipality; and
             527          (II) adding all the amounts calculated under Subsection (2)(n)(i)(C)(I) for all
             528      participating counties and all participating municipalities and then dividing that sum by the
             529      aggregate taxable value of the property, as adjusted in accordance with Section 59-2-913 :
             530          (aa) for participating counties, in the unincorporated area of all participating counties;
             531      and
             532          (bb) for participating municipalities, in all the participating municipalities.
             533          (D) "Fire district" means a county service area under Title 17A, Chapter 2, Part 4,
             534      County Service Area Act, in the creation of which an election was not required under
             535      Subsection 17B-2-214 (3)(c).
             536          (E) "Fire protection tax rate" means:
             537          (I) for an annexing county, the property tax rate that, when applied to taxable property
             538      in the unincorporated area of the county, generates enough property tax revenue to cover all the
             539      costs associated with providing fire protection, paramedic, and emergency services in the
             540      unincorporated area of the county; and
             541          (II) for an annexing municipality, the property tax rate that generates enough property
             542      tax revenue in the municipality to cover all the costs associated with providing fire protection,
             543      paramedic, and emergency services in the municipality.
             544          (F) "Participating county" means a county whose unincorporated area is included
             545      within a fire district at the time of the creation of the fire district.
             546          (G) "Participating municipality" means a municipality whose area is included within a
             547      fire district at the time of the creation of the fire district.
             548          (ii) In the first year following creation of a fire district, the certified tax rate of each
             549      participating county and each participating municipality shall be decreased by the amount of
             550      the equalized fire protection tax rate.
             551          (iii) In the first year following annexation to a fire district, the certified tax rate of each
             552      annexing county and each annexing municipality shall be decreased by the fire protection tax
             553      rate.
             554          (iv) Each tax levied under this section by a fire district shall be considered to be levied


             555      by:
             556          (A) each participating county and each annexing county for purposes of the county's
             557      tax limitation under Section 59-2-908 ; and
             558          (B) each participating municipality and each annexing municipality for purposes of the
             559      municipality's tax limitation under Section 10-5-112 , for a town, or Section 10-6-133 , for a
             560      city.
             561          (o) (i) As used in this Subsection (2)(o):
             562          (A) "net decrease in residential exemptions allowed to qualifying secondary
             563      residences" means the difference between the following if that difference is at least $1:
             564          (I) the amount of taxable value that a county assessor reports to the commission in
             565      accordance with Subsection 59-2-1115 (6) for a taxing entity for the current calendar year; and
             566          (II) the amount of taxable value that the county assessor reported to the commission in
             567      accordance with Subsection 59-2-1115 (6) for that taxing entity for the calendar year
             568      immediately preceding the current calendar year; and
             569          (B) "net increase in residential exemptions allowed to qualifying secondary residences"
             570      means the difference between the following if that difference is at least $1:
             571          (I) the amount of taxable value that a county assessor reported to the commission in
             572      accordance with Subsection 59-2-1115 (6) for a taxing entity for the calendar year immediately
             573      preceding the current calendar year; and
             574          (II) the amount of taxable value that the county assessor reports to the commission in
             575      accordance with Subsection 59-2-1115 (6) for that taxing entity for the current calendar year.
             576          (ii) For the calender year beginning on January 1, 2005, a taxing entity's certified tax
             577      rate shall be decreased by the amount necessary to offset the total amount of taxable value that
             578      a county assessor reports to the commission in accordance with Subsection 59-2-1115 (6).
             579          (iii) For calendar years beginning on or after January 1, 2006, if for the current calendar
             580      year a county assessor reports to the commission in accordance with Subsection 59-2-1115 (6)
             581      that there is:
             582          (A) a net decrease in residential exemptions allowed to qualifying secondary residences
             583      for a taxing entity, the taxing entity's certified tax rate shall be increased by the amount
             584      necessary to offset the amount of that net decrease in residential exemptions allowed to
             585      qualifying secondary residences; or


             586          (B) a net increase in residential exemptions allowed to qualifying secondary residences
             587      for a taxing entity, the taxing entity's certified tax rate shall be decreased by the amount
             588      necessary to offset the amount of that net increase in residential exemptions allowed to
             589      qualifying secondary residences.
             590          (3) (a) On or before June 22, each taxing entity shall annually adopt a tentative budget.
             591          (b) If the taxing entity intends to exceed the certified tax rate, it shall notify the county
             592      auditor of:
             593          (i) its intent to exceed the certified tax rate; and
             594          (ii) the amount by which it proposes to exceed the certified tax rate.
             595          (c) The county auditor shall notify all property owners of any intent to exceed the
             596      certified tax rate in accordance with Subsection 59-2-919 (2).
             597          (4) (a) The taxable value for the base year under Subsection 17B-4-102 (4) shall be
             598      reduced for any year to the extent necessary to provide a redevelopment agency established
             599      under Title 17B, Chapter 4, Redevelopment Agencies Act, with approximately the same
             600      amount of money the agency would have received without a reduction in the county's certified
             601      tax rate if:
             602          (i) in that year there is a decrease in the certified tax rate under Subsection (2)(c) or
             603      (2)(d)(i);
             604          (ii) the amount of the decrease is more than 20% of the county's certified tax rate of the
             605      previous year; and
             606          (iii) the decrease results in a reduction of the amount to be paid to the agency under
             607      Section 17B-4-1003 or 17B-4-1004 .
             608          (b) The base taxable value under Subsection 17B-4-102 (4) shall be increased in any
             609      year to the extent necessary to provide a redevelopment agency with approximately the same
             610      amount of money as the agency would have received without an increase in the certified tax
             611      rate that year if:
             612          (i) in that year the base taxable value under Subsection 17B-4-102 (4) is reduced due to
             613      a decrease in the certified tax rate under Subsection (2)(c) or (2)(d)(i); and
             614          (ii) The certified tax rate of a city, school district, or special district increases
             615      independent of the adjustment to the taxable value of the base year.
             616          (c) Notwithstanding a decrease in the certified tax rate under Subsection (2)(c) or


             617      (2)(d)(i), the amount of money allocated and, when collected, paid each year to a
             618      redevelopment agency established under Title 17B, Chapter 4, Redevelopment Agencies Act,
             619      for the payment of bonds or other contract indebtedness, but not for administrative costs, may
             620      not be less than that amount would have been without a decrease in the certified tax rate under
             621      Subsection (2)(c) or (2)(d)(i).
             622          Section 4. Section 59-2-1115 is enacted to read:
             623          59-2-1115. Residential exemption for a qualifying secondary residence -- Signed
             624      statement -- Distributions to county from General Fund -- Report to commission.
             625          (1) A county assessor shall allow a residential exemption for a qualifying secondary
             626      residence if the county assessor determines that:
             627          (a) the requirements of Subsection (2) are met;
             628          (b) the property is a qualifying secondary residence; and
             629          (c) none of the owners of the qualifying secondary residence claim a residential
             630      exemption for any other qualifying secondary residence in the state.
             631          (2) An owner of a qualifying secondary residence seeking to claim a residential
             632      exemption provided for in Section 59-2-103 for the qualifying secondary residence shall file a
             633      statement with the county assessor:
             634          (a) of the county in which the qualifying secondary residence is located;
             635          (b) that is signed by all of the owners of the qualifying secondary residence;
             636          (c) subject to Subsection (4), on or before April 1 of the year for which the owner
             637      requests the residential exemption for the qualifying secondary residence; and
             638          (d) certifying that:
             639          (i) the property is a qualifying secondary residence; and
             640          (ii) none of the owners are claiming a residential exemption for any other qualifying
             641      secondary residence in the state.
             642          (3) An owner shall notify the county assessor in writing within 30 days after the day on
             643      which:
             644          (a) there is a change of ownership of the property;
             645          (b) the property is not a qualifying secondary residence; or
             646          (c) an owner applies to claim a residential exemption for another qualifying residence
             647      in the state.


             648          (4) If a county assessor allows a residential exemption for a qualifying secondary
             649      residence under this section, for the time period during which the qualifying secondary
             650      residence is eligible for the residential exemption:
             651          (a) the statement described in Subsection (2) is valid; and
             652          (b) another statement is not required to be filed in accordance with Subsection (2).
             653          (5) (a) The commission shall make distributions from the General Fund in accordance
             654      with this Subsection (5) to fund the residential exemptions a county assessor allows for
             655      qualifying secondary residences within the county in accordance with:
             656          (i) this section; and
             657          (ii) Section 59-2-103 .
             658          (b) For purposes of Subsection (5)(a), a county legislative body shall submit to the
             659      commission a list of:
             660          (i) each owner signing a statement that is filed with the county assessor in accordance
             661      with Subsection (2);
             662          (ii) for each property allowed a residential exemption for a qualifying secondary
             663      residence by the county assessor, the amount of the reduction of tax as a result of the residential
             664      exemption; and
             665          (iii) for all the properties allowed residential exemptions for qualifying secondary
             666      residences by the county assessor, the total amount of the reduction of tax as a result of the
             667      residential exemptions.
             668          (c) The commission shall distribute the amount described in Subsection (5)(b)(iii):
             669          (i) to the county in which the qualifying secondary residences described in Subsection
             670      (5)(b)(iii) are located; and
             671          (ii) (A) on or before January 1 of each year if the county legislative body submits the
             672      list required by Subsection (5)(b):
             673          (I) to the commission; and
             674          (II) on or before November 30 of the year in which the residential exemptions for a
             675      qualifying secondary residence are granted; or
             676          (B) within 30 days after the day on which the county legislative body submits the list
             677      required by Subsection (5)(b) to the commission if the county legislative body submits the list
             678      required by Subsection (5)(b) after the date described in Subsection (5)(c)(ii)(A)(II).


             679          (d) A county legislative body that receives a distribution from the commission as
             680      provided in Subsection (5)(c) shall distribute the amount the county legislative body receives
             681      from the commission:
             682          (i) to a taxing entity within the county if within that taxing entity one or more
             683      qualifying secondary residences are located for which the:
             684          (A) county assessor allows a residential exemption; and
             685          (B) county legislative body receives the distribution; and
             686          (ii) in proportion to the percentage by which the total amount of taxable value that the
             687      county assessor allows as a residential exemption for all qualifying secondary residences
             688      located within each taxing entity described in Subsection (5)(d)(i) bears to the total taxable
             689      value that the county assessor allows as a residential exemption for all qualifying secondary
             690      residences:
             691          (A) located within the county; and
             692          (B) for which the county legislative body receives the distribution.
             693          (6) For calendar years beginning on or after January 1, 2005, for each taxing entity
             694      within which one or more qualifying secondary residences are located for which a county
             695      assessor allows a residential exemption, the county assessor shall report to the commission in
             696      writing:
             697          (a) on or before June 1 of each calendar year; and
             698          (b) the total amount of taxable value that the county assessor allows as a residential
             699      exemption for all qualifying secondary residences located within that taxing entity for that
             700      calendar year.




Legislative Review Note
    as of 12-1-03 10:44 AM


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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