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Second Substitute H.B. 246

Representative Gage Froerer proposes the following substitute bill:


             1     
PROPERTY TAX - RESIDENTIAL

             2     
EXEMPTION

             3     
2009 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Gage Froerer

             6     
Senate Sponsor: Dennis E. Stowell

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill amends provisions of the Property Tax Act relating to the residential property
             11      tax exemption.
             12      Highlighted Provisions:
             13          This bill:
             14          .    amends the size of residential property that may qualify for a residential exemption
             15      due to a local zoning requirement for residential property or due to the covenants,
             16      conditions, and restrictions of a neighborhood, subdivision, or planned unit
             17      development;
             18          .    provides procedures to obtain a residential exemption for certain property owners
             19      with a primary residence with more than one acre of land;
             20          .    provides that a county assessor may require an owner of residential property to file a
             21      statement showing that the property qualifies for the residential exemption with the
             22      county assessor if:
             23              .    the residential property is sold; or
             24              .    the county assessor has reason to believe that the residential property no longer
             25      qualifies for the residential property tax exemption;


             26          .    provides a penalty for falsely obtaining a residential property tax exemption;
             27          .    defines terms; and
             28          .    makes technical changes.
             29      Monies Appropriated in this Bill:
             30          None
             31      Other Special Clauses:
             32          This bill takes effect on January 1, 2010.
             33      Utah Code Sections Affected:
             34      AMENDS:
             35          59-2-103, as last amended by Laws of Utah 2004, Chapters 90 and 281
             36          59-2-103.5, as last amended by Laws of Utah 2008, Chapter 382
             37     
             38      Be it enacted by the Legislature of the state of Utah:
             39          Section 1. Section 59-2-103 is amended to read:
             40           59-2-103. Rate of assessment of property -- Residential property.
             41          (1) All tangible taxable property located within the state shall be assessed and taxed at
             42      a uniform and equal rate on the basis of its fair market value, as valued on January 1, unless
             43      otherwise provided by law.
             44          (2) Subject to Subsections (3) and (4), beginning on January 1, 1995, the fair market
             45      value of residential property located within the state shall be reduced by 45%, representing a
             46      residential exemption allowed under Utah Constitution Article XIII, Section 2.
             47          (3) [No] (a) Except as provided in Subsection (3)(b), no more than one acre of land
             48      per residential unit may qualify for the residential exemption.
             49          (b) A residential unit with land having a parcel size of more than one acre of land
             50      qualifies for a residential exemption if the residential unit is:
             51          (i) prohibited from being subdivided due to:
             52          (A) a zoning ordinance adopted by a:
             53          (I) county in accordance with Title 17, Chapter 27a, Part 5, Land Use Ordinances; or
             54          (II) city or town in accordance with Title 10, Chapter 9a, Part 5, Land Use Ordinances;
             55      or
             56          (B) the covenants, conditions, and restrictions of a neighborhood, subdivision, or


             57      planned unit development; and
             58          (ii) six acres or less.
             59          (4) (a) Except as provided in Subsection (4)(b)(ii), beginning on January 1, 2005, the
             60      residential exemption in Subsection (2) is limited to one primary residence per household.
             61          (b) An owner of multiple residential properties located within the state is allowed a
             62      residential exemption under Subsection (2) for:
             63          (i) subject to Subsection (4)(a), the primary residence of the owner; and
             64          (ii) each residential property that is the primary residence of a tenant.
             65          Section 2. Section 59-2-103.5 is amended to read:
             66           59-2-103.5. Procedures to obtain an exemption for residential property -- Penalty
             67      for falsely obtaining a residential exemption.
             68          (1) (a) Subject to the other provisions of this section, [a county legislative body may by
             69      ordinance require that] in order for residential property to be allowed a residential exemption in
             70      accordance with Section 59-2-103 , a county assessor may require an owner of [the] residential
             71      property [shall] to file with the county [board of equalization] assessor a statement[:] described
             72      in Subsection (2) if:
             73          (i) the residential property is sold; or
             74          (ii) the county assessor determines that there is reason to believe that the residential
             75      property no longer qualifies for the residential exemption in accordance with Section 59-2-103 .
             76          (b) Notwithstanding Subsection (1)(a) and subject to the other provisions of this
             77      section, an owner of residential property that is more than one acre but six acres or less may be
             78      allowed a residential exemption in accordance with Subsection 59-2-103 (3)(b) if the owner
             79      files the following with the county assessor:
             80          (i) a statement described in Subsection (2); and
             81          (ii) if the owner's residential property qualifies for a residential exemption because the
             82      owner is unable to subdivide the residential property due to restrictions contained in the
             83      applicable covenants, conditions, and restrictions, a copy of the covenants, conditions, and
             84      restrictions recorded with the county recorder.
             85          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
             86      purposes of this section, the commission shall promulgate a rule to broadly define the term
             87      "sold" to include in the definition one or more instances where no legal transfer of title occurs.


             88          (2) The statement described in Subsection (1) shall:
             89          (a) be on a form prescribed by the commission by rule;
             90          (b) be signed by all of the owners of the residential property;
             91          (c) [certifying] certify that the residential property is residential property; and
             92          (d) [containing] contain other information as required by the commission by rule.
             93          [(2) (a)] (3) Subject to Section 59-2-103 and except as provided in Subsection [(3)] (4),
             94      a county [board of equalization] assessor shall allow an owner described in Subsection (1) [a
             95      residential exemption for the residential property described in Subsection (1) if: (i) the county
             96      legislative body enacts the ordinance described in Subsection (1); and (ii) the county board of
             97      equalization] a residential exemption for the owner's residential property if the county assessor
             98      determines that the requirements of [Subsection (1)] this section are met.
             99          [(b) A county board of equalization may require an owner of the residential property
             100      described in Subsection (1) to file the statement described in Subsection (1) only if:]
             101          [(i) that residential property was ineligible for the residential exemption authorized
             102      under Section 59-2-103 during the calendar year immediately preceding the calendar year for
             103      which the owner is seeking to claim the residential exemption for that residential property;]
             104          [(ii) an ownership interest in that residential property changes; or]
             105          [(iii) the county board of equalization determines that there is reason to believe that
             106      that residential property no longer qualifies for the residential exemption in accordance with
             107      Section 59-2-103 .]
             108          [(3) Notwithstanding Subsection (2)(a), if a county legislative body does not enact an
             109      ordinance requiring an owner to file a statement in accordance with this section, the county
             110      board of equalization:]
             111          [(a) may not require an owner to file a statement for residential property to be eligible
             112      for a residential exemption in accordance with Section 59-2-103 ; and]
             113          [(b)] (4) A county assessor shall allow a residential exemption for an owner's
             114      residential property in accordance with Section 59-2-103 [.] if:
             115          (a) the county assessor does not require the owner to file a statement in accordance
             116      with Subsection (1)(a); and
             117          (b) the size of the owner's residential property is one acre of land or less.
             118          (5) If a county assessor does not allow a property owner a residential exemption in


             119      accordance with this section, the property owner may file an application to appeal with the
             120      county board of equalization in accordance with the procedures prescribed in Section
             121      59-2-1004 .
             122          (6) (a) A property owner shall pay a penalty described in Subsection (6)(b) for each tax
             123      year the property owner:
             124          (i) knowingly files a statement described in Subsection (2) with false information; or
             125          (ii) falsely claims the owner's property is residential property that qualifies for a
             126      residential exemption in Section 59-2-103 .
             127          (b) The penalty described in Subsection (6)(a) is an amount equal to the sum of:
             128          (i) the property tax that would have been due on the property without the residential
             129      exemption for the tax year in which:
             130          (A) the property owner received the residential exemption; and
             131          (B) violated Subsection (6)(a); and
             132          (ii) 10% of the amount described in Subsection (6)(b)(i).
             133          [(4)] (7) (a) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
             134      Act, the commission shall make rules providing:
             135          (i) the form for the statement described in Subsection [(1)] (2); and
             136          (ii) the contents of the form for the statement described in Subsection [(1)] (2).
             137          (b) The commission shall make the form described in Subsection [(4)] (7)(a) available
             138      to counties.
             139          Section 3. Effective date.
             140          This bill takes effect on January 1, 2010.


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