S.B. 33

1

EXEMPTIONS TO RESIDENTIAL PROPERTY
2 TAX
3 2005 GENERAL SESSION
4 STATE OF UTAH
5 Sponsor: Ed Mayne
6
7 LONG TITLE
8 General Description:
9 This bill modifies the Property Tax Act to address residential property tax exemption
10 provisions and certified tax rate provisions.
11 Highlighted Provisions:
12 This bill:
13 . defines terms;
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 distributions from the General Fund;
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 This bill takes effect on January 1, 2006.
31 Utah Code Sections Affected:
32 AMENDS:
33 59-2-102, as last amended by Chapters 162, 243, 281 and 303, Laws of Utah 2004
34 59-2-103, as last amended by Chapters 90 and 281, Laws of Utah 2004
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:
44 (a) used exclusively for the purpose of engaging in dispensing activities directly
45 affecting agriculture or horticulture [with]; and
46 (b) that has an airworthiness certificate from the Federal Aviation Administration
47 certifying the aircraft or rotorcraft's use for agricultural and pest control purposes.
48 (2) "Air charter service" means an air carrier operation [which] that requires the
49 customer to hire an entire aircraft rather than book passage in whatever capacity is available on
50 a scheduled trip.
51 (3) "Air contract service" means an air carrier operation that meets the following
52 criteria:
53 (a) the service is available only to customers who engage the services of the carrier
54 through a contractual agreement; and
55 (b) excess capacity on any trip [and] is not available to the public at large.
56 (4) "Aircraft" is as defined in Section 72-10-102 .
57 (5) "Airline" means any air carrier operating interstate routes on a scheduled basis
58 [which] that offers to fly passengers or cargo on the basis of available capacity on regularly

59 scheduled routes.
60 (6) "Assessment roll" means a permanent record of the assessment of property as
61 assessed by the county assessor and the commission and may be maintained manually or as a
62 computerized file:
63 (a) as a consolidated record; or
64 (b) as multiple records by:
65 (i) type[,];
66 (ii) classification[,]; or
67 (iii) categories.
68 (7) "Certified revenue levy" means a property tax levy that provides the same amount
69 of ad valorem property tax revenue as was collected for the prior year, plus new growth, but
70 exclusive of revenue from collections from:
71 (a) redemptions[,];
72 (b) interest[,]; and
73 (c) penalties.
74 (8) "County-assessed commercial vehicle" means:
75 (a) any commercial vehicle, trailer, or semitrailer [which] that is not:
76 (i) apportioned under Section 41-1a-301 ; and [is not]
77 (ii) operated interstate to transport the vehicle owner's goods or property in furtherance
78 of the owner's commercial enterprise;
79 (b) any passenger vehicle:
80 (i) owned by a business; and
81 (ii) used by [its] the business' employees for transportation as a:
82 (A) company car; or
83 (B) vanpool vehicle; and
84 (c) vehicles [which] that are:
85 (i) especially constructed for towing or wrecking, and [which] are not otherwise used
86 to transport for compensation:
87 (A) goods[,];
88 (B) merchandise[,]; or
89 (C) people [for compensation];

90 (ii) used or licensed as:
91 (A) taxicabs; or
92 (B) limousines;
93 (iii) used as:
94 (A) rental passenger cars[,];
95 (B) travel trailers[,]; or
96 (C) motor homes;
97 (iv) used or licensed in this state for use as:
98 (A) ambulances; or
99 (B) hearses;
100 (v) especially designed and used for garbage and rubbish collection; or
101 (vi) used exclusively to transport students or their instructors to or from any:
102 (A) private[,] activities;
103 (B) public[, or] activities;
104 (C) religious school activities; or
105 (D) school activities.
106 (9) (a) Except as provided in Subsection (9)(b), for purposes of Section 59-2-801 ,
107 "designated tax area" means a tax area created by the overlapping boundaries of only the
108 following taxing entities:
109 (i) a county; and
110 (ii) a school district.
111 (b) Notwithstanding Subsection (9)(a), "designated tax area" includes a tax area created
112 by the overlapping boundaries of:
113 (i) the taxing entities described in Subsection (9)(a); and
114 (ii) (A) a city or town if the boundaries of the school district under Subsection (9)(a)
115 and the boundaries of the city or town are identical; or
116 (B) a special service district if the boundaries of the school district under Subsection
117 (9)(a) are located entirely within the special service district.
118 (10) "Eligible judgment" means a final and unappealable judgment or order under
119 Section 59-2-1330 :
120 (a) that became a final and unappealable judgment or order no more than 14 months

121 prior to the day on which the notice required by Subsection 59-2-919 (4) is required to be
122 mailed; and
123 (b) for which a taxing entity's share of the final and unappealable judgment or order is
124 greater than or equal to the lesser of:
125 (i) $5,000; or
126 (ii) 2.5% of the total ad valorem property taxes collected by the taxing entity in the
127 previous fiscal year.
128 (11) (a) "Escaped property" means any property, whether personal, land, or any
129 improvements to the property, subject to taxation [and is] that:
130 (i) the assessing authority:
131 (A) inadvertently [omitted] omits from the tax rolls[, assigned];
132 (B) assigns to the incorrect parcel[,]; or [assessed]
133 (C) assesses to the wrong taxpayer [by the assessing authority];
134 (ii) is undervalued or omitted from the tax rolls because of the failure of the taxpayer to
135 comply with the reporting requirements of this chapter; or
136 (iii) is undervalued because of errors made by the assessing authority based upon
137 [incomplete or erroneous] information furnished by the taxpayer[.] that is:
138 (A) incomplete; or
139 (B) erroneous.
140 (b) [Property which] "Escaped property" does not include property that is undervalued
141 because of:
142 (i) the use of a different valuation methodology; or [because of]
143 (ii) a different application of the same valuation methodology [is not "escaped
144 property."].
145 (12) (a) "Fair market value" means the amount at which property would change hands
146 between a willing buyer and a willing seller, when:
147 (i) neither [being] the buyer or the seller is under any compulsion to buy or sell; and
148 (ii) both [having] the buyer and the seller have reasonable knowledge of the relevant
149 facts.
150 (b) For purposes of taxation, "fair market value" shall be determined using the current
151 zoning laws applicable to the property in question, except in cases where:

152 (i) there is a reasonable probability of a change in the zoning laws affecting that
153 property in the tax year in question; and
154 (ii) the change would have an appreciable influence upon the value.
155 (13) (a) "Farm machinery and equipment," for purposes of the exemption provided
156 under Section 59-2-1101 , means:
157 (i) tractors[,];
158 (ii) milking equipment and storage and cooling facilities[,];
159 (iii) feed handling equipment[,];
160 (iv) irrigation equipment[,];
161 (v) harvesters[,];
162 (vi) choppers[,];
163 (vii) grain drills and planters[,];
164 (viii) tillage tools[,];
165 (ix) scales[,];
166 (x) combines[,];
167 (xi) spreaders[,];
168 (xii) sprayers[,];
169 (xiii) haying equipment[,]; and
170 (xiv) any other machinery or equipment used primarily for agricultural purposes[; but].
171 (b) "Farm machinery and equipment" does not include [vehicles]:
172 (i) a vehicle required to be registered with the Motor Vehicle Division [or vehicles]; or
173 (ii) a vehicle or other equipment used for business purposes other than farming.
174 (14) "Geothermal fluid" means water in any form at temperatures greater than 120
175 degrees centigrade naturally present in a geothermal system.
176 (15) "Geothermal resource" means:
177 (a) the natural heat of the earth at temperatures greater than 120 degrees centigrade;
178 and
179 (b) the energy, in whatever form, including pressure, present in, resulting from, created
180 by, or which may be extracted from that natural heat, directly or through a material medium.
181 (16) (a) For purposes of Section 59-2-103 :
182 (i) "household" means the association of persons who live in the same dwelling,

183 sharing its furnishings, facilities, accommodations, and expenses; and
184 (ii) "household" includes married individuals, who are not legally separated, that have
185 established domiciles at separate locations within the state.
186 (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
187 commission may make rules defining the term "domicile."
188 (17) (a) Except as provided in Subsection (17)(c), "improvement" means a building,
189 structure, fixture, fence, or other item that is permanently attached to land, regardless of
190 whether the title has been acquired to the land, if:
191 (i) (A) attachment to land is essential to the operation or use of the item; and
192 (B) the manner of attachment to land suggests that the item will remain attached to the
193 land in the same place over the useful life of the item; or
194 (ii) removal of the item would:
195 (A) cause substantial damage to the item; or
196 (B) require substantial alteration or repair of a structure to which the item is attached.
197 (b) "Improvement" includes:
198 (i) an accessory to an item described in Subsection (17)(a) if the accessory is:
199 (A) essential to the operation of the item described in Subsection (17)(a); and
200 (B) installed solely to serve the operation of the item described in Subsection (17)(a);
201 and
202 (ii) an item described in Subsection (17)(a) that:
203 (A) is temporarily detached from the land for repairs; and
204 (B) remains located on the land.
205 (c) Notwithstanding Subsections (17)(a) and (b), "improvement" does not include:
206 (i) an item considered to be personal property pursuant to rules made in accordance
207 with Section 59-2-107 ;
208 (ii) a moveable item that is attached to land:
209 (A) for stability only; or
210 (B) for an obvious temporary purpose;
211 (iii) (A) manufacturing equipment and machinery; or
212 (B) essential accessories to manufacturing equipment and machinery; [or]
213 (iv) an item attached to the land in a manner that facilitates removal without substantial

214 damage to:
215 (A) the land; or
216 (B) the item; or
217 (v) a transportable factory-built housing unit as defined in Section 59-2-1502 if that
218 transportable factory-built housing unit is considered to be personal property under Section
219 59-2-1503 .
220 (18) "Intangible property" means:
221 (a) property that is capable of private ownership separate from tangible property,
222 including:
223 (i) moneys;
224 (ii) credits;
225 (iii) bonds;
226 (iv) stocks;
227 (v) representative property;
228 (vi) franchises;
229 (vii) licenses;
230 (viii) trade names;
231 (ix) copyrights; and
232 (x) patents; or
233 (b) a low-income housing tax credit.
234 (19) "Low-income housing tax credit" means:
235 (a) a federal low-income housing tax credit under Section 42, Internal Revenue Code;
236 or
237 (b) a low-income housing tax credit under:
238 (i) Section 59-7-607 ; or
239 (ii) Section 59-10-129 .
240 (20) "Metalliferous minerals" includes:
241 (a) gold[,];
242 (b) silver[,];
243 (c) copper[,];
244 (d) lead[,];

245 (e) zinc[,]; and
246 (f) uranium.
247 (21) "Mine" means a natural deposit of either metalliferous or nonmetalliferous
248 valuable mineral.
249 (22) "Mining" means the process of:
250 (a) producing[,];
251 (b) extracting[,];
252 (c) leaching[,];
253 (d) evaporating[,]; or
254 (e) otherwise removing a mineral from a mine.
255 (23) (a) "Mobile flight equipment" means tangible personal property that is:
256 (i) owned or operated by an:
257 (A) air charter service;
258 (B) air contract service; or
259 (C) airline; and
260 (ii) (A) capable of flight;
261 (B) attached to an aircraft that is capable of flight; or
262 (C) contained in an aircraft that is capable of flight if the tangible personal property is
263 intended to be used:
264 (I) during multiple flights;
265 (II) during a takeoff, flight, or landing; and
266 (III) as a service provided by an air charter service, air contract service, or airline.
267 (b) (i) "Mobile flight equipment" does not include a spare part other than a spare
268 engine that is rotated:
269 (A) at regular intervals; and
270 (B) with an engine that is attached to the aircraft.
271 (ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
272 the commission may make rules defining the term "regular intervals."
273 (24) "Nonmetalliferous minerals" includes[, but is not limited to,]:
274 (a) oil[,];
275 (b) gas[,];

276 (c) coal[,];
277 (d) salts[,];
278 (e) sand[,];
279 (f) rock[,];
280 (g) gravel[,]; and
281 (h) all carboniferous materials.
282 (25) "Personal property" includes:
283 (a) [every] each class of property as defined in Subsection [(26) which] (27) that is:
284 (i) the subject of ownership; and
285 (ii) not [included within the meaning of the terms] "real estate" [and "improvements"];
286 (b) gas and water mains and pipes laid in:
287 (i) roads[,];
288 (ii) streets[,]; or
289 (iii) alleys;
290 (c) bridges [and];
291 (d) ferries;
292 [(d)] (e) livestock which, for the purposes of the exemption provided under Section
293 59-2-1112 , means all:
294 (i) domestic animals[,];
295 (ii) honeybees[,];
296 (iii) poultry[,];
297 (iv) fur-bearing animals[,]; and
298 (v) fish; and
299 [(e)] (f) outdoor advertising structures as defined in Section 72-7-502 .
300 (26) (a) "Primary residence" means property used:
301 (i) for residential purposes; and
302 (ii) as a domicile.
303 (b) "Primary residence" does not include:
304 (i) property used as a transient residence; or
305 (ii) a condominium used in a rental pool.
306 (c) In accordance with Title 63, Chapter 46a, Utah Administrative Rule Making Act,

307 the commission may by rule define the terms:
308 (i) "domicile";
309 (ii) "rental pool"; or
310 (iii) "transient residence."
311 [(26)] (27) (a) "Property" means property that is subject to assessment and taxation
312 according to its value.
313 (b) "Property" does not include intangible property as defined in this section.
314 [(27)] (28) (a) "Public utility," for purposes of this chapter, means the operating
315 property of a railroad, gas corporation, oil or gas transportation or pipeline company, coal
316 slurry pipeline company, electrical corporation, telephone corporation, sewerage corporation,
317 or heat corporation where:
318 (i) the company performs the service for, or delivers the commodity to[,]:
319 (A) the public generally; or
320 (B) companies serving the public generally[,]; or
321 (ii) in the case of a gas corporation or an electrical corporation, where the gas or
322 electricity is sold or furnished to any member or consumers within the state for:
323 (A) domestic[,] use;
324 (B) commercial[,] use; or
325 (C) industrial use.
326 (b) "Public utility" also means the operating property of any entity or person defined
327 under Section 54-2-1 except water corporations.
328 (29) (a) "Qualifying secondary residence" means property that:
329 (i) is used for residential purposes;
330 (ii) is not a primary residence;
331 (iii) is not connected to a sewer system or water system that is operated by:
332 (A) a county;
333 (B) a city;
334 (C) a town;
335 (D) a special district created under Title 17A, Special Districts;
336 (E) a local district created under Title 17B, Chapter 2, Local Districts; or
337 (F) an interlocal cooperation entity created under Title 11, Chapter 13, Interlocal

338 Cooperation Act; and
339 (iv) is not rented to another person during a calender year for which a residential
340 exemption for a qualifying secondary residence is claimed in accordance with Section
341 59-2-1115 .
342 (b) "Qualifying secondary residence" does not include:
343 (i) a condominium used in a rental pool;
344 (ii) a houseboat;
345 (iii) property owned by:
346 (A) a for-profit business entity; or
347 (B) more than two persons, unless the persons are related persons;
348 (iv) a recreational vehicle as defined in Section 13-14-102 ;
349 (v) a tent; or
350 (vi) property similar to the property described in Subsections (29)(b)(i) through (v).
351 (c) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
352 commission may make rules defining:
353 (i) the terms:
354 (A) "houseboat";
355 (B) "rental pool"; or
356 (C) "tent"; or
357 (ii) what constitutes property similar to the property described in Subsections (29)(b)(i)
358 through (v).
359 [(28)] (30) "Real estate" or "real property" includes:
360 (a) the possession of, claim to, ownership of, or right to the possession of land;
361 (b) all mines, minerals, and quarries in and under the land[,];
362 (c) all timber belonging to individuals or corporations growing or being on the lands of
363 this state or the United States[, and];
364 (d) all rights and privileges appertaining to [these] Subsections (30)(b) and (c); and
365 [(c)] (e) improvements.
366 (31) For purposes of Subsection (29), "related persons" means a relationship in which
367 each owner of a residence is related to all of the other owners of the residence as:
368 (a) an ancestor;

369 (b) a brother or sister by the whole or half blood;
370 (c) a lineal descendant;
371 (d) a spouse;
372 (e) a stepbrother or stepsister;
373 (f) a stepfather or stepmother;
374 (g) a stepgrandchild;
375 (h) a stepdaughter or stepson; or
376 (i) a spouse of an owner described in Subsections (31)(a) through (h).
377 [(29)] (32) "Residential property," for the purposes of the reductions and adjustments
378 under this chapter, means [any property used for residential purposes as a primary residence. It
379 does not include property used for transient residential use or condominiums used in rental
380 pools.]:
381 (a) a primary residence; or
382 (b) a qualifying secondary residence.
383 [(30)] (33) For purposes of Subsection 59-2-801 (1)(e), "route miles" means the number
384 of miles calculated by the commission that is:
385 (a) measured in a straight line by the commission; and
386 (b) equal to the distance between a geographical location that begins or ends:
387 (i) at a boundary of the state; and
388 (ii) where an aircraft:
389 (A) takes off; or
390 (B) lands.
391 [(31)] (34) (a) "State-assessed commercial vehicle" means:
392 (i) any commercial vehicle, trailer, or semitrailer [which] that operates interstate or
393 intrastate to transport:
394 (A) passengers[,];
395 (B) freight[,];
396 (C) merchandise[,]; or
397 (D) other property for hire; or
398 (ii) any commercial vehicle, trailer, or semitrailer [which] that operates interstate and
399 transports the vehicle owner's goods or property in furtherance of the owner's commercial

400 enterprise.
401 (b) "State-assessed commercial vehicle" does not include vehicles used for hire
402 [which] that are specified in Subsection (8)(c) as county-assessed commercial vehicles.
403 [(32)] (35) "Taxable value" means fair market value less any applicable reduction
404 allowed for residential property under Section 59-2-103 .
405 [(33)] (36) "Tax area" means a geographic area created by the overlapping boundaries
406 of one or more taxing entities.
407 [(34)] (37) "Taxing entity" means any:
408 (a) county[,];
409 (b) city[,];
410 (c) town[,];
411 (d) school district[,];
412 (e) special taxing district[,]; or [any]
413 (f) other political subdivision of the state with the authority to levy a tax on property.
414 [(35)] (38) (a) "Tax roll" means a permanent record of the taxes charged on property,
415 as extended on the assessment roll and may be maintained:
416 (i) on the same record or records as the assessment roll; or [may be maintained]
417 (ii) on a separate record properly indexed to the assessment roll. [It]
418 (b) "Tax roll" includes:
419 (i) tax books[,];
420 (ii) tax lists[,]; and
421 (iii) other similar materials.
422 Section 2. Section 59-2-103 is amended to read:
423 59-2-103. Rate of assessment of property -- Residential property.
424 (1) [All] Unless otherwise provided by law, all tangible taxable property located within
425 the state shall be assessed and taxed at a uniform and equal rate on the basis of [its] the
426 property's fair market value, as valued on January 1[, unless otherwise provided by law].
427 (2) Subject to Subsections (3) and (4)[, beginning on January 1, 1995, the fair market
428 value of residential property located within the state shall be reduced by 45%, representing a
429 residential exemption allowed under Utah Constitution Article XIII, Section 2.], pursuant to
430 Utah Constitution Article XIII, Section 2, the fair market value of residential property located

431 within this state shall be reduced as follows:
432 (a) beginning on January 1, 2006, the fair market value of a primary residence located
433 within the state shall be reduced by 45%; and
434 (b) subject to Section 59-2-1115 , beginning on January 1, 2006, the fair market value
435 of a qualifying secondary residence shall be reduced by 25% of up to the first $100,000 of the
436 fair market value of the qualifying secondary residence.
437 (3) No more than one acre of land per residential unit may qualify for [the] a residential
438 exemption under this section.
439 (4) (a) [Except as provided in Subsection (4)(b)(ii), beginning] Beginning on January
440 1, [2005, the] 2006, a residential exemption in Subsection (2) is limited to:
441 (i) except as provided in Subsection (4)(b), one primary residence per household[.];
442 and
443 (ii) one qualifying secondary residence per household.
444 (b) [An] For purposes of Subsection (4)(a)(i), an owner of multiple [residential
445 properties] primary residences located within the state is allowed a residential exemption under
446 Subsection (2)(a) for:
447 (i) subject to Subsection (4)(a)(i), the primary residence of the owner; and
448 (ii) each residential property that is the primary residence of a tenant.
449 Section 3. Section 59-2-924 is amended to read:
450 59-2-924. Report of valuation of property to county auditor and commission --
451 Transmittal by auditor to governing bodies -- Certified tax rate -- Rulemaking authority
452 -- Adoption of tentative budget.
453 (1) (a) Before June 1 of each year, the county assessor of each county shall deliver to
454 the county auditor and the commission the following statements:
455 (i) a statement containing the aggregate valuation of all taxable property in each taxing
456 entity; and
457 (ii) a statement containing the taxable value of any additional personal property
458 estimated by the county assessor to be subject to taxation in the current year.
459 (b) The county auditor shall, on or before June 8, transmit to the governing body of
460 each taxing entity:
461 (i) the statements described in Subsections (1)(a)(i) and (ii);

462 (ii) an estimate of the revenue from personal property;
463 (iii) the certified tax rate; and
464 (iv) all forms necessary to submit a tax levy request.
465 (2) (a) (i) The "certified tax rate" means a tax rate that will provide the same ad
466 valorem property tax revenues for a taxing entity as were budgeted by that taxing entity for the
467 prior year.
468 (ii) For purposes of this Subsection (2), "ad valorem property tax revenues" do not
469 include:
470 (A) collections from redemptions;
471 (B) interest; and
472 (C) penalties.
473 (iii) Except as provided in Subsection (2)(a)(v), the certified tax rate shall be calculated
474 by dividing the ad valorem property tax revenues budgeted for the prior year by the taxing
475 entity by the taxable value established in accordance with Section 59-2-913 .
476 (iv) (A) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking
477 Act, the commission shall make rules determining the calculation of ad valorem property tax
478 revenues budgeted by a taxing entity.
479 (B) For purposes of Subsection (2)(a)(iv)(A), ad valorem property tax revenues
480 budgeted by a taxing entity shall be calculated in the same manner as budgeted property tax
481 revenues are calculated for purposes of Section 59-2-913 .
482 (v) The certified tax rates for the taxing entities described in this Subsection (2)(a)(v)
483 shall be calculated as follows:
484 (A) except as provided in Subsection (2)(a)(v)(B), for a new taxing [entities] entity the
485 certified tax rate is zero;
486 (B) for each municipality incorporated on or after July 1, 1996, the certified tax rate is:
487 (I) in a county of the first, second, or third class, the levy imposed for municipal-type
488 services under Sections 17-34-1 and 17-36-9 ; and
489 (II) in a county of the fourth, fifth, or sixth class, the levy imposed for general county
490 purposes and such other levies imposed solely for the municipal-type services identified in
491 Section 17-34-1 and Subsection 17-36-3 (22);
492 (C) for debt service voted on by the public, the certified tax rate shall be the actual levy

493 imposed by that section, except that the certified tax rates for the following levies shall be
494 calculated in accordance with Section 59-2-913 and this section:
495 (I) school leeways provided for under [Sections]:
496 (Aa) Section 11-2-7 [,];
497 (Bb) Section 53A-16-110 [,];
498 (Cc) Section 53A-17a-125 [,];
499 (Dd) Section 53A-17a-127 [,];
500 (Ee) Section 53A-17a-134 [,];
501 (Ff) Section 53A-17a-143 [,];
502 (Gg) Section 53A-17a-145 [,]; and
503 (Hh) Section 53A-21-103 ; and
504 (II) levies to pay for the costs of state legislative mandates or judicial or administrative
505 orders under Section 59-2-906.3 .
506 (vi) (A) A judgment levy imposed under Section 59-2-1328 or Section 59-2-1330 shall
507 be established at that rate which is sufficient to generate only the revenue required to satisfy
508 one or more eligible judgments, as defined in Section 59-2-102 .
509 (B) The ad valorem property tax revenue generated by the judgment levy shall not be
510 considered in establishing the taxing entity's aggregate certified tax rate.
511 (b) (i) For the purpose of calculating the certified tax rate, the county auditor shall use
512 the taxable value of property on the assessment roll.
513 (ii) For purposes of Subsection (2)(b)(i), the taxable value of property on the
514 assessment roll does not include new growth as defined in Subsection (2)(b)(iii).
515 (iii) "New growth" means:
516 (A) the difference between the increase in taxable value of the taxing entity from the
517 previous calendar year to the current year; minus
518 (B) the amount of an increase in taxable value described in Subsection (2)(b)(iv).
519 (iv) Subsection (2)(b)(iii)(B) applies to the following increases in taxable value:
520 (A) the amount of increase to locally assessed real property taxable values resulting
521 from:
522 (I) factoring[,];
523 (II) reappraisal[,]; or [any]

524 (III) other adjustments; or
525 (B) the amount of an increase in the taxable value of property assessed by the
526 commission under Section 59-2-201 resulting from a change in the method of apportioning the
527 taxable value prescribed by:
528 (I) the Legislature;
529 (II) a court;
530 (III) the commission in an administrative rule; or
531 (IV) the commission in an administrative order.
532 (c) Beginning January 1, 1997, if a taxing entity receives increased revenues from
533 uniform fees on tangible personal property under Section 59-2-404 , 59-2-405 , or 59-2-405.1 as
534 a result of any county imposing a sales and use tax under Chapter 12, Part 11, County Option
535 Sales and Use Tax, the taxing entity shall decrease its certified tax rate to offset the increased
536 revenues.
537 (d) (i) Beginning July 1, 1997, if a county has imposed a sales and use tax under
538 Chapter 12, Part 11, County Option Sales and Use Tax, the county's certified tax rate shall be:
539 (A) decreased on a one-time basis by the amount of the estimated sales and use tax
540 revenue to be distributed to the county under Subsection 59-12-1102 (3); and
541 (B) increased by the amount necessary to offset the county's reduction in revenue from
542 uniform fees on tangible personal property under Section 59-2-404 , 59-2-405 , or 59-2-405.1 as
543 a result of the decrease in the certified tax rate under Subsection (2)(d)(i)(A).
544 (ii) The commission shall determine estimates of sales and use tax distributions for
545 purposes of Subsection (2)(d)(i).
546 (e) Beginning January 1, 1998, if a municipality has imposed an additional resort
547 communities sales tax under Section 59-12-402 , the municipality's certified tax rate shall be
548 decreased on a one-time basis by the amount necessary to offset the first 12 months of
549 estimated revenue from the additional resort communities sales and use tax imposed under
550 Section 59-12-402 .
551 (f) For the calendar year beginning on January 1, 1999, and ending on December 31,
552 1999, a taxing entity's certified tax rate shall be adjusted by the amount necessary to offset the
553 adjustment in revenues from uniform fees on tangible personal property under Section
554 59-2-405.1 as a result of the adjustment in uniform fees on tangible personal property under

555 Section 59-2-405.1 enacted by the Legislature during the 1998 Annual General Session.
556 (g) For purposes of Subsections (2)(h) through (j):
557 (i) "1998 actual collections" means the amount of revenues a taxing entity actually
558 collected for the calendar year beginning on January 1, 1998, under Section 59-2-405 for:
559 (A) motor vehicles required to be registered with the state that weigh 12,000 pounds or
560 less; and
561 (B) state-assessed commercial vehicles required to be registered with the state that
562 weigh 12,000 pounds or less.
563 (ii) "1999 actual collections" means the amount of revenues a taxing entity actually
564 collected for the calendar year beginning on January 1, 1999, under Section 59-2-405.1 .
565 (h) For the calendar year beginning on January 1, 2000, the commission shall make the
566 following adjustments:
567 (i) the commission shall make the adjustment described in Subsection (2)(i)(i) if, for
568 the calendar year beginning on January 1, 1999, a taxing entity's 1998 actual collections were
569 greater than the sum of:
570 (A) the taxing entity's 1999 actual collections; and
571 (B) any adjustments the commission made under Subsection (2)(f);
572 (ii) the commission shall make the adjustment described in Subsection (2)(i)(ii) if, for
573 the calendar year beginning on January 1, 1999, a taxing entity's 1998 actual collections were
574 greater than the taxing entity's 1999 actual collections, but the taxing entity's 1998 actual
575 collections were less than the sum of:
576 (A) the taxing entity's 1999 actual collections; and
577 (B) any adjustments the commission made under Subsection (2)(f); and
578 (iii) the commission shall make the adjustment described in Subsection (2)(i)(iii) if, for
579 the calendar year beginning on January 1, 1999, a taxing entity's 1998 actual collections were
580 less than the taxing entity's 1999 actual collections.
581 (i) (i) For purposes of Subsection (2)(h)(i), the commission shall increase a taxing
582 entity's certified tax rate under this section and a taxing entity's certified revenue levy under
583 Section 59-2-906.1 by the amount necessary to offset the difference between:
584 (A) the taxing entity's 1998 actual collections; and
585 (B) the sum of:

586 (I) the taxing entity's 1999 actual collections; and
587 (II) any adjustments the commission made under Subsection (2)(f).
588 (ii) For purposes of Subsection (2)(h)(ii), the commission shall decrease a taxing
589 entity's certified tax rate under this section and a taxing entity's certified revenue levy under
590 Section 59-2-906.1 by the amount necessary to offset the difference between:
591 (A) the sum of:
592 (I) the taxing entity's 1999 actual collections; and
593 (II) any adjustments the commission made under Subsection (2)(f); and
594 (B) the taxing entity's 1998 actual collections.
595 (iii) For purposes of Subsection (2)(h)(iii), the commission shall decrease a taxing
596 entity's certified tax rate under this section and a taxing entity's certified revenue levy under
597 Section 59-2-906.1 by the amount of any adjustments the commission made under Subsection
598 (2)(f).
599 (j) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, for
600 purposes of Subsections (2)(f) through (i), the commission may make rules establishing the
601 method for determining a taxing entity's 1998 actual collections and 1999 actual collections.
602 (k) (i) (A) For fiscal year 2000, the certified tax rate of each county required under
603 Subsection 17-34-1 (4)(a) to provide advanced life support and paramedic services to the
604 unincorporated area of the county shall be decreased by the amount necessary to reduce
605 revenues in that fiscal year by an amount equal to the difference between the amount the county
606 budgeted in its 2000 fiscal year budget for advanced life support and paramedic services
607 countywide and the amount the county spent during fiscal year 2000 for those services,
608 excluding amounts spent from a municipal services fund for those services.
609 (B) For fiscal year 2001, the certified tax rate of each county to which Subsection
610 (2)(k)(i)(A) applies shall be decreased by the amount necessary to reduce revenues in that fiscal
611 year by the amount that the county spent during fiscal year 2000 for advanced life support and
612 paramedic services countywide, excluding amounts spent from a municipal services fund for
613 those services.
614 (ii) (A) A city or town located within a county of the first class to which Subsection
615 (2)(k)(i) applies may increase its certified tax rate by the amount necessary to generate within
616 the city or town the same amount of revenues as the county would collect from that city or

617 town if the decrease under Subsection (2)(k)(i) did not occur.
618 (B) An increase under Subsection (2)(k)(ii)(A), whether occurring in a single fiscal
619 year or spread over multiple fiscal years, is not subject to the notice and hearing requirements
620 of Sections 59-2-918 and 59-2-919 .
621 (l) (i) The certified tax rate of each county required under Subsection 17-34-1 (4)(b) to
622 provide detective investigative services to the unincorporated area of the county shall be
623 decreased:
624 (A) in fiscal year 2001 by the amount necessary to reduce revenues in that fiscal year
625 by at least $4,400,000; and
626 (B) in fiscal year 2002 by the amount necessary to reduce revenues in that fiscal year
627 by an amount equal to the difference between $9,258,412 and the amount of the reduction in
628 revenues under Subsection (2)(l)(i)(A).
629 (ii) (A) (I) Beginning with municipal fiscal year 2002, a city or town located within a
630 county to which Subsection (2)(l)(i) applies may increase its certified tax rate to generate
631 within the city or town the same amount of revenue as the county would have collected during
632 county fiscal year 2001 from within the city or town except for Subsection (2)(l)(i)(A).
633 (II) Beginning with municipal fiscal year 2003, a city or town located within a county
634 to which Subsection (2)(l)(i) applies may increase its certified tax rate to generate within the
635 city or town the same amount of revenue as the county would have collected during county
636 fiscal year 2002 from within the city or town except for Subsection (2)(l)(i)(B).
637 (B) (I) Except as provided in Subsection (2)(l)(ii)(B)(II), an increase in the city or
638 town's certified tax rate under Subsection (2)(l)(ii)(A), whether occurring in a single fiscal year
639 or spread over multiple fiscal years, is subject to the notice and hearing requirements of
640 Sections 59-2-918 and 59-2-919 .
641 (II) For an increase under this Subsection (2)(l)(ii) that generates revenue that does not
642 exceed the same amount of revenue as the county would have collected except for Subsection
643 (2)(l)(i), the requirements of Sections 59-2-918 and 59-2-919 do not apply if the city or town:
644 (Aa) publishes a notice that meets the size, type, placement, and frequency
645 requirements of Section 59-2-919 , reflects that the increase is a shift of a tax from one imposed
646 by the county to one imposed by the city or town, and explains how the revenues from the tax
647 increase will be used; and

648 (Bb) holds a public hearing on the tax shift that may be held in conjunction with the
649 city or town's regular budget hearing.
650 (m) (i) This Subsection (2)(m) applies to each county that:
651 (A) establishes a countywide special service district under Title 17A, Chapter 2, Part
652 13, Utah Special Service District Act, to provide jail service, as provided in Subsection
653 17A-2-1304 (1)(a)(x); and
654 (B) levies a property tax on behalf of the special service district under Section
655 17A-2-1322 .
656 (ii) (A) The certified tax rate of each county to which this Subsection (2)(m) applies
657 shall be decreased by the amount necessary to reduce county revenues by the same amount of
658 revenues that will be generated by the property tax imposed on behalf of the special service
659 district.
660 (B) Each decrease under Subsection (2)(m)(ii)(A) shall occur contemporaneously with
661 the levy on behalf of the special service district under Section 17A-2-1322 .
662 (n) (i) As used in this Subsection (2)(n):
663 (A) "Annexing county" means a county whose unincorporated area is included within a
664 fire district by annexation.
665 (B) "Annexing municipality" means a municipality whose area is included within a fire
666 district by annexation.
667 (C) "Equalized fire protection tax rate" means the tax rate that results from:
668 (I) calculating, for each participating county and each participating municipality, the
669 property tax revenue necessary to cover all of the costs associated with providing fire
670 protection, paramedic, and emergency services:
671 (Aa) for a participating county, in the unincorporated area of the county; and
672 (Bb) for a participating municipality, in the municipality; and
673 (II) adding all the amounts calculated under Subsection (2)(n)(i)(C)(I) for all
674 participating counties and all participating municipalities and then dividing that sum by the
675 aggregate taxable value of the property, as adjusted in accordance with Section 59-2-913 :
676 (Aa) for participating counties, in the unincorporated area of all participating counties;
677 and
678 (Bb) for participating municipalities, in all the participating municipalities.

679 (D) "Fire district" means a county service area under Title 17A, Chapter 2, Part 4,
680 County Service Area Act, in the creation of which an election was not required under
681 Subsection 17B-2-214 (3)(c).
682 (E) "Fire protection tax rate" means:
683 (I) for an annexing county, the property tax rate that, when applied to taxable property
684 in the unincorporated area of the county, generates enough property tax revenue to cover all the
685 costs associated with providing fire protection, paramedic, and emergency services in the
686 unincorporated area of the county; and
687 (II) for an annexing municipality, the property tax rate that generates enough property
688 tax revenue in the municipality to cover all the costs associated with providing fire protection,
689 paramedic, and emergency services in the municipality.
690 (F) "Participating county" means a county whose unincorporated area is included
691 within a fire district at the time of the creation of the fire district.
692 (G) "Participating municipality" means a municipality whose area is included within a
693 fire district at the time of the creation of the fire district.
694 (ii) In the first year following creation of a fire district, the certified tax rate of each
695 participating county and each participating municipality shall be decreased by the amount of
696 the equalized fire protection tax rate.
697 (iii) In the first year following annexation to a fire district, the certified tax rate of each
698 annexing county and each annexing municipality shall be decreased by the fire protection tax
699 rate.
700 (iv) Each tax levied under this section by a fire district shall be considered to be levied
701 by:
702 (A) each participating county and each annexing county for purposes of the county's
703 tax limitation under Section 59-2-908 ; and
704 (B) each participating municipality and each annexing municipality for purposes of the
705 municipality's tax limitation under Section 10-5-112 , for a town, or Section 10-6-133 , for a
706 city.
707 (o) (i) As used in this Subsection (2)(o):
708 (A) "net decrease in residential exemptions allowed to qualifying secondary
709 residences" means the difference between the following if that difference is at least $1:

710 (I) the amount of taxable value that a county assessor reports to the commission in
711 accordance with Subsection 59-2-1115 (6) for a taxing entity for the current calendar year; and
712 (II) the amount of taxable value that the county assessor reported to the commission in
713 accordance with Subsection 59-2-1115 (6) for that taxing entity for the calendar year
714 immediately preceding the current calendar year; and
715 (B) "net increase in residential exemptions allowed to qualifying secondary residences"
716 means the difference between the following if that difference is at least $1:
717 (I) the amount of taxable value that a county assessor reported to the commission in
718 accordance with Subsection 59-2-1115 (6) for a taxing entity for the calendar year immediately
719 preceding the current calendar year; and
720 (II) the amount of taxable value that the county assessor reports to the commission in
721 accordance with Subsection 59-2-1115 (6) for that taxing entity for the current calendar year.
722 (ii) For the calender year beginning on January 1, 2006, a taxing entity's certified tax
723 rate shall be decreased by the amount necessary to offset the total amount of taxable value that
724 a county assessor reports to the commission in accordance with Subsection 59-2-1115 (6).
725 (iii) For calendar years beginning on or after January 1, 2007, if for the current calendar
726 year a county assessor reports to the commission in accordance with Subsection 59-2-1115 (6)
727 that there is:
728 (A) a net decrease in residential exemptions allowed to qualifying secondary residences
729 for a taxing entity, the taxing entity's certified tax rate shall be increased by the amount
730 necessary to offset the amount of that net decrease in residential exemptions allowed to
731 qualifying secondary residences; or
732 (B) a net increase in residential exemptions allowed to qualifying secondary residences
733 for a taxing entity, the taxing entity's certified tax rate shall be decreased by the amount
734 necessary to offset the amount of that net increase in residential exemptions allowed to
735 qualifying secondary residences.
736 (3) (a) On or before June 22, each taxing entity shall annually adopt a tentative budget.
737 (b) If the taxing entity intends to exceed the certified tax rate, it shall notify the county
738 auditor of:
739 (i) its intent to exceed the certified tax rate; and
740 (ii) the amount by which it proposes to exceed the certified tax rate.

741 (c) The county auditor shall notify all property owners of any intent to exceed the
742 certified tax rate in accordance with Subsection 59-2-919 (2).
743 (4) (a) The taxable value for the base year under Subsection 17B-4-102 (4) shall be
744 reduced for any year to the extent necessary to provide a redevelopment agency established
745 under Title 17B, Chapter 4, Redevelopment Agencies Act, with approximately the same
746 amount of money the agency would have received without a reduction in the county's certified
747 tax rate if:
748 (i) in that year there is a decrease in the certified tax rate under Subsection (2)(c) or
749 (2)(d)(i);
750 (ii) the amount of the decrease is more than 20% of the county's certified tax rate of the
751 previous year; and
752 (iii) the decrease results in a reduction of the amount to be paid to the agency under
753 Section 17B-4-1003 or 17B-4-1004 .
754 (b) The base taxable value under Subsection 17B-4-102 (4) shall be increased in any
755 year to the extent necessary to provide a redevelopment agency with approximately the same
756 amount of money as the agency would have received without an increase in the certified tax
757 rate that year if:
758 (i) in that year the base taxable value under Subsection 17B-4-102 (4) is reduced due to
759 a decrease in the certified tax rate under Subsection (2)(c) or (2)(d)(i); and
760 (ii) The certified tax rate of a city, school district, or special district increases
761 independent of the adjustment to the taxable value of the base year.
762 (c) Notwithstanding a decrease in the certified tax rate under Subsection (2)(c) or
763 (2)(d)(i), the amount of money allocated and, when collected, paid each year to a
764 redevelopment agency established under Title 17B, Chapter 4, Redevelopment Agencies Act,
765 for the payment of bonds or other contract indebtedness, but not for administrative costs, may
766 not be less than that amount would have been without a decrease in the certified tax rate under
767 Subsection (2)(c) or (2)(d)(i).
768 Section 4. Section 59-2-1115 is enacted to read:
769 59-2-1115. Residential exemption for a qualifying secondary residence -- Signed
770 statement -- Distributions to county from General Fund -- Report to commission.
771 (1) A county assessor shall allow a residential exemption for a qualifying secondary

772 residence if the county assessor determines that:
773 (a) the requirements of Subsection (2) are met;
774 (b) the property is a qualifying secondary residence; and
775 (c) none of the owners of the qualifying secondary residence claim a residential
776 exemption for any other qualifying secondary residence in the state.
777 (2) An owner of a qualifying secondary residence seeking to claim a residential
778 exemption provided for in Section 59-2-103 for the qualifying secondary residence shall file a
779 statement with the county assessor:
780 (a) of the county in which the qualifying secondary residence is located;
781 (b) that is signed by all of the owners of the qualifying secondary residence;
782 (c) subject to Subsection (4), on or before April 1 of the year for which the owner
783 requests the residential exemption for the qualifying secondary residence; and
784 (d) certifying that:
785 (i) the property is a qualifying secondary residence; and
786 (ii) none of the owners are claiming a residential exemption for any other qualifying
787 secondary residence in the state.
788 (3) An owner of a qualifying secondary residence that is receiving the residential
789 exemption described in Subsection (1) shall notify the county assessor in writing within 30
790 days after the day on which:
791 (a) there is a change of ownership of the property;
792 (b) the property is not a qualifying secondary residence; or
793 (c) an owner of the qualifying secondary residence applies to claim a residential
794 exemption for another qualifying residence in the state.
795 (4) If a county assessor allows a residential exemption for a qualifying secondary
796 residence under this section, for the time period during which the qualifying secondary
797 residence is eligible for the residential exemption:
798 (a) the statement described in Subsection (2) is valid; and
799 (b) another statement is not required to be filed in accordance with Subsection (2).
800 (5) (a) The commission shall make distributions from the General Fund in accordance
801 with this Subsection (5) to fund the residential exemptions a county assessor allows for
802 qualifying secondary residences within the county in accordance with:

803 (i) this section; and
804 (ii) Section 59-2-103 .
805 (b) For purposes of Subsection (5)(a), a county legislative body shall submit to the
806 commission a list of:
807 (i) each owner signing a statement that is filed with the county assessor in accordance
808 with Subsection (2);
809 (ii) for each property allowed a residential exemption for a qualifying secondary
810 residence by the county assessor, the amount of the reduction of tax as a result of the residential
811 exemption; and
812 (iii) for all the properties allowed residential exemptions for qualifying secondary
813 residences by the county assessor, the total amount of the reduction of tax as a result of the
814 residential exemptions.
815 (c) The commission shall distribute the amount described in Subsection (5)(b)(iii):
816 (i) to the county in which the qualifying secondary residences described in Subsection
817 (5)(b)(iii) are located; and
818 (ii) (A) on or before January 1 of each year if the county legislative body submits the
819 information required by Subsection (5)(b):
820 (I) to the commission; and
821 (II) on or before November 30 of the year in which the residential exemptions for a
822 qualifying secondary residence are granted; or
823 (B) within 30 days after the day on which the county legislative body submits the
824 information required by Subsection (5)(b) to the commission if the county legislative body
825 submits the information required by Subsection (5)(b) after the date described in Subsection
826 (5)(c)(ii)(A)(II).
827 (d) A county legislative body that receives a distribution from the commission as
828 provided in Subsection (5)(c) shall distribute the amount the county legislative body receives
829 from the commission:
830 (i) to a taxing entity within the county if within that taxing entity one or more
831 qualifying secondary residences are located for which the:
832 (A) county assessor allows a residential exemption; and
833 (B) county legislative body receives the distribution; and

834 (ii) in proportion to the percentage by which the total amount of taxable value that the
835 county assessor allows as a residential exemption for all qualifying secondary residences
836 located within each taxing entity described in Subsection (5)(d)(i) bears to the total taxable
837 value that the county assessor allows as a residential exemption for all qualifying secondary
838 residences:
839 (A) located within the county; and
840 (B) for which the county legislative body receives the distribution.
841 (6) For calendar years beginning on or after January 1, 2006, for each taxing entity
842 within which one or more qualifying secondary residences are located for which a county
843 assessor allows a residential exemption, the county assessor shall report to the commission in
844 writing:
845 (a) on or before June 1 of each calendar year; and
846 (b) the total amount of taxable value that the county assessor allows as a residential
847 exemption for all qualifying secondary residences located within that taxing entity for that
848 calendar year.
849 Section 5. Effective date.
850 This bill takes effect on January 1, 2006.




Legislative Review Note
as of 12-13-04 11:14 AM

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