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S.B. 121


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Senate Committee Amendments 1-31-2005 rd/trv
This document includes Senate Committee Amendments incorporated into the bill on Mon, Jan 31, 2005 at 11:43 AM by rday. --> This document includes Senate 2nd Reading Floor Amendments incorporated into the bill on Tue, Feb 8, 2005 at 3:27 PM by rday. -->              1
    
PROPERTY TAX EXEMPTION AMENDMENTS

             2     
2005 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Sponsor: Curtis S. Bramble

             5     

             6      LONG TITLE
             7      General Description:
             8          This bill amends the Property Tax Act to provide for a proportional property tax for
             9      certain property that is eligible for a property tax exemption.
             10      Highlighted Provisions:
             11          This bill:
             12          .    defines terms;
             13          .    provides that, retroactive to January 1, 2004, when property is acquired by a
             14      nonprofit entity and used exclusively for religious, charitable, or educational
             15      purposes, the nonprofit entity shall only be required to collect and pay a
             16      proportional tax based on the amount of time that the property was not owned by
             17      the nonprofit entity;
             18          .    provides that, for property acquired after December 31, 2005, when S. the .S property
             18a      ceases
             19      to qualify for S. [ a charitable ] an .S exemption S. for property owned by a nonprofit entity
             19a      and used exclusively for religious, charitable, or educational purposes .S or a government
             19b      exemption because of a
             20      change in the ownership of the property, the new owner shall pay a proportional tax
             21      based upon the period of time:
             22              .    beginning on the day that the new owner acquired the property; and
             23              .    ending on the last day of the calendar year during which the new owner acquired
             24      the property;
             24a      S. .    provides that, for property acquired after December 31, 2005, when the property ceases
             24b      to qualify for an exemption for property owned by a nonprofit entity and used exclusively for
             24c      religious, charitable, or educational purposes or a government exemption because of a change
             24d      in ownership of the property, the new owner and previous owner of the property are required
             24e      to report the acquisition of the property to the county assessor within 30 days from the day
             24f      that the new owner acquired the property; .S
             25          .    modifies the deadlines:


             26              .    for applying for a property tax exemption for property owned by a nonprofit
             27      entity that is used exclusively for religious, charitable, or educational purposes;



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             28
             .    for a county board of equalization to hold a hearing and render a decision on a
             29      property tax exemption; and
             30              .    for a county board of equalization to send a copy of the decision described in the
             31      previous paragraph to the person that applied for the exemption; and
             32          .    makes technical changes.
             33      Monies Appropriated in this Bill:
             34          None
             35      Other Special Clauses:
             36          This bill provides an immediate effective date.
             37          This bill provides retrospective operation.
             38      Utah Code Sections Affected:
             39      AMENDS:
             40          59-2-1101, as last amended by Chapter 333, Laws of Utah 2004
             41          59-2-1102, as last amended by Chapter 169, Laws of Utah 2002
             42     

             43      Be it enacted by the Legislature of the state of Utah:
             44          Section 1. Section 59-2-1101 is amended to read:
             45           59-2-1101. Exemption of certain property -- Proportional payments for certain
             46      property -- County legislative body authority to adopt rules or ordinances.
             47          (1) For purposes of this section:
             48          (a) " S. [ charitable ] exclusive use .S exemption" means a property tax exemption under
             48a      Subsection (3)(d),
             49      for property owned by a nonprofit entity that is used exclusively for religious, charitable, or
             50      educational purposes;
             51          (b) "government exemption" means a property tax exemption provided under
             52      Subsection (3)(a), (b), or (c); and
             53          (c) "tax relief" means an exemption, deferral, or abatement that is authorized by this
             54      part.
             55          [(1)] (2) (a) Except as provided in Subsection [(1)] (2)(b) or (c), [the exemptions,
             56      deferrals, and abatements authorized by this part] tax relief may be allowed only if the claimant
             57      is the owner of the property as of January 1 of the year the exemption is claimed.


             58          (b) Notwithstanding Subsection [(1)] (2)(a), [if the claimant is a federal, state, or



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             59
     political subdivision entity under Subsection (2)(a), (b), or (c), the entity] a claimant shall
             60      collect and pay a proportional tax based upon the length of time that the property was not
             61      owned by the [entity.] claimant if:
             62          (i) the claimant is a federal, state, or political subdivision entity described in
             63      Subsection (3)(a), (b), or (c); or
             64          (ii) pursuant to Subsection (3)(d):
             65          (A) the claimant is a nonprofit entity; and
             66          (B) the property is used exclusively for religious, charitable, or educational purposes.
             67          (c) Notwithstanding Subsection [(1)] (2)(a), a claimant may be allowed a veteran's
             68      exemption in accordance with Sections 59-2-1104 and 59-2-1105 regardless of whether the
             69      claimant is the owner of the property as of January 1 of the year the exemption is claimed if the
             70      claimant is:
             71          (i) the unmarried surviving spouse of:
             72          (A) a deceased disabled veteran as defined in Section 59-2-1104 ; or
             73          (B) a veteran who was killed in action or died in the line of duty as defined in Section
             74      59-2-1104; or
             75          (ii) a minor orphan of:
             76          (A) a deceased disabled veteran as defined in Section 59-2-1104 ; or
             77          (B) a veteran who was killed in action or died in the line of duty as defined in Section
             78      59-2-1104 .
             79          [(2)] (3) The following property is exempt from taxation:
             80          (a) property exempt under the laws of the United States;
             81          (b) property of:
             82          (i) the state[,];
             83          (ii) school districts[,]; and
             84          (iii) public libraries;
             85          (c) except as provided in Title 11, Chapter 13, Interlocal Cooperation Act, property of:
             86          (i) counties[,];
             87          (ii) cities[,];
             88          (iii) towns[,];
             89          (iv) special districts[,]; and



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         (v) all other political subdivisions of the state[, except as provided in Title 11, Chapter
             91      13, Interlocal Cooperation Act];
             92          (d) property owned by a nonprofit entity which is used exclusively for religious,
             93      charitable, or educational purposes;
             94          (e) places of burial not held or used for private or corporate benefit;
             95          (f) farm equipment and machinery;
             96          (g) intangible property; and
             97          (h) the ownership interest of an out-of-state public agency, as defined in Section
             98      11-13-103 [,]:
             99          (i) if that ownership interest is in property providing additional project capacity, as
             100      defined in Section 11-13-103 [,]; and
             101          (ii) on which a fee in lieu of ad valorem property tax is payable under Section
             102      11-13-302 .
             103          (4) Subject to Subsection (5), if property that is allowed S. [ a charitable ] an exclusive use .S
             103a      exemption or a
             104      government exemption ceases to qualify for the exemption because of a change in the
             105      ownership of the property S. [ , ] :
             105a      (a) .S the new owner of the property shall pay a proportional tax based
             106      upon the period of time:
             107           S. [ (a) ] (i) .S beginning on the day that the new owner acquired the property; and
             108           S. [ (b) ] (ii) .S ending on the last day of the calendar year during which the new owner
             108a      acquired
             109      the property S. [ . ] ; and
             109a      (b)    the new owner of the property and the person from whom the new owner acquires the
             109b      property shall notify the county assessor, in writing, of the change in ownership of the
             109c      property within 30 days from the day that the new owner acquires the property. .S
             110          (5) Notwithstanding Subsection (4), S. (a) .S the proportional tax described in
             110a      Subsection (4) S. (a) .S :
             111          (a) is subject to any S. [ charitable ] exclusive use .S exemption or government exemption
             111a      that the property is
             112      entitled to under the new ownership of the property; and


             113          (b) applies only to property that is acquired after December 31, 2005.
             114          [(3)] (6) A county legislative body may adopt rules or ordinances to:
             115          (a) effectuate the exemptions, deferrals, abatements, or other relief from taxation


            
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     provided in this part; and
             117          (b) designate one or more persons to perform the functions given the county under this
             118      part.
             119          Section 2. Section 59-2-1102 is amended to read:
             120           59-2-1102. Determination of exemptions by board of equalization -- Appeal --



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             121
     Application for exemption -- Annual statement -- Exceptions.
             122          (1) (a) For property assessed under Part 3, County Assessment, the county board of
             123      equalization may, after giving notice in a manner prescribed by rule, determine whether certain
             124      property within the county is exempt from taxation.
             125          (b) The decision of the county board of equalization described in Subsection (1)(a)
             126      shall:
             127          (i) be in writing; and
             128          (ii) include:
             129          (A) a statement of facts; and
             130          (B) the statutory basis for its decision.
             131          (c) [A] Except as provided in Subsection (11)(a), a copy of the decision described in
             132      Subsection (1)(a) shall be sent on or before May 15 to the person [or organization] applying for
             133      the exemption.
             134          (2) The county board of equalization shall notify an owner of exempt property that has
             135      previously received an exemption but failed to file an annual statement in accordance with
             136      Subsection (9)(c), of the county board of equalization's intent to revoke the exemption on or
             137      before April 1.
             138          (3) (a) Except as provided in Subsection (8) and subject to Subsection (9), a reduction
             139      may not be made under this part in the value of property and an exemption may not be granted
             140      under this part unless the party affected or the party's agent:
             141          (i) makes and files with the county board of equalization a written application for the
             142      reduction or exemption, verified by signed statement; and
             143          (ii) appears before the county board of equalization and shows facts upon which it is
             144      claimed the reduction should be made, or exemption granted.
             145          (b) Notwithstanding Subsection (9), the county board of equalization may waive:
             146          (i) the application or personal appearance requirements of Subsection (3)(a), (4)(b), or
             147      (9)(a); or
             148          (ii) the annual statement requirements of Subsection (9)(c).
             149          (4) (a) Before the county board of equalization grants any application for exemption or
             150      reduction, the county board of equalization may examine [on] under oath the person or agent
             151      making the application.



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             152
         (b) Except as provided in Subsection (3)(b), a reduction may not be made or exemption
             153      granted unless the person or the agent making the application attends and answers all questions
             154      pertinent to the inquiry.
             155          (5) [Upon] For the hearing [of] on the application, the county board of equalization
             156      may subpoena any witnesses, and hear and take any evidence in relation to the pending
             157      application.
             158          (6) [The] Except as provided in Subsection (11)(b), the county board of equalization
             159      shall hold hearings and render a written decision to determine any exemption on or before May
             160      1 in each year.
             161          (7) Any property owner dissatisfied with the decision of the county board of
             162      equalization regarding any reduction or exemption may appeal to the commission under
             163      Section 59-2-1006 .
             164          (8) Notwithstanding Subsection (3)(a), a county board of equalization may not require
             165      an owner of property to file an application in accordance with this section in order to claim an
             166      exemption for the property under the following:
             167          (a) Subsections 59-2-1101 [(2)](3)(a) through (c);
             168          (b) Subsection 59-2-1101 [(2)](3)(f) or (g);
             169          (c) Section 59-2-1110 ;
             170          (d) Section 59-2-1111 ;
             171          (e) Section 59-2-1112 ;
             172          (f) Section 59-2-1113 ; or
             173          (g) Section 59-2-1114 .
             174          (9) (a) Except as provided in Subsections (3)(b) and (9)(b), for property described in
             175      Subsection 59-2-1101 [(2)](3)(d) or (e), a county board of equalization shall, consistent with
             176      Subsection (10), require an owner of that property to file an application in accordance with this
             177      section in order to claim an exemption for that property.
             178          (b) Notwithstanding Subsection (9)(a), a county board of equalization may not require
             179      an owner of property described in Subsection 59-2-1101 [(2)](3)(d) or (e) to file an application
             180      under Subsection (9)(a) if:
             181          (i) (A) the owner filed an application under Subsection (9)(a); or
             182          (B) the county board of equalization waived the application requirements in accordance



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             183
     with Subsection (3)(b);
             184          (ii) the county board of equalization determines that the owner may claim an
             185      exemption for that property; and
             186          (iii) the exemption described in Subsection (9)(b)(ii) is in effect.
             187          (c) (i) Except as provided in Subsection (3)(b), for the time period that an owner is
             188      granted an exemption in accordance with this section for property described in Subsection
             189      59-2-1101 [(2)](3)(d) or (e), a county board of equalization shall require the owner to file an
             190      annual statement on a form prescribed by the commission establishing that the property
             191      continues to be eligible for the exemption.
             192          (ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
             193      the commission shall make rules providing:
             194          (A) the form for the annual statement required by Subsection (9)(c)(i);
             195          (B) the contents of the form for the annual statement required by Subsection (9)(c)(i);
             196      and
             197          (C) procedures and requirements for making the annual statement required by
             198      Subsection (9)(c)(i).
             199          (iii) The commission shall make the form described in Subsection (9)(c)(ii)(A)
             200      available to counties.
             201          (10) (a) For purposes of this Subsection (10), " S. [ charitable ] exclusive use .S exemption"
             201a      is as defined in
             202      Section 59-2-1101 .
             203          (b) (i) For purposes of Subsection (1)(a), and except as provided in Subsections
             204      (10)(b)(ii) and (iii), when a person acquires property on or after January 1 that qualifies for S. [ a
             205      charitable
] an exclusive use .S
exemption, that person may apply for the S. [charitable] exclusive use .S
             205a      exemption on or before the later
             206      of:
             207          (A) the day set by rule as the deadline for filing a property tax exemption application;
             208      or
             209          (B) 30 days after the day on which the property is acquired.
             210          (ii) Notwithstanding Subsection (10)(b)(i), a person who acquires property on or after
             211      January 1, 2004, and before January 1, 2005, that qualifies for S. [ a charitable ] an exclusive use .S
             211a      exemption, may
             212      apply for the S. [ charitable ] exclusive use .S exemption for the 2004 calendar year on or before
             212a      September 30, 2005.
             213          (iii) Notwithstanding Subsection (10)(b)(i), a person who acquires property on or after




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             214
     January 1, 2005, and before January 1, 2006, that qualifies for S. [ a charitable ] an exclusive use .S
             214a      exemption, may
             215      apply for the S. [ charitable ] exclusive use .S exemption for the 2005 calendar year on or before the
             215a      later of:
             216          (A) September 30, 2005; or
             217          (B) 30 days after the day on which the property is acquired.
             218          (11) (a) Notwithstanding Subsection (1)(c), if an application for an exemption is filed
             219      under Subsection (10), a county board of equalization shall send a copy of the decision
             220      described in Subsection (1)(c) to the person applying for the exemption on or before the later
             221      of:
             222          (i) May 15; or
             223          (ii) 45 days after the day on which the application for the exemption is filed.
             224          (b) Notwithstanding Subsection (6), if an application for an exemption is filed under
             225      Subsection (10), a county board of equalization shall hold the hearing and render the decision
             226      described in Subsection (6) on or before the later of:
             227          (i) May 1; or
             228          (ii) 30 days after the day on which the application for the exemption is filed.
             229          Section 3. Effective date.
             230          If approved by two-thirds of all the members elected to each house, this bill takes effect
             231      upon approval by the governor, or the day following the constitutional time limit of Utah
             232      Constitution Article VII, Section 8, without the governor's signature, or in the case of a veto,
             233      the date of veto override.
             234          Section 4. Retrospective operation.
             235          This bill has retrospective operation to January 1, 2004.





Legislative Review Note
    as of 1-17-05 2:48 PM


Based on a limited legal review, this legislation has not been determined to have a high
probability of being held unconstitutional.

Office of Legislative Research and General Counsel


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