First Substitute H.B. 75

Representative Jack R. Draxler proposes the following substitute bill:

1 PROPERTY TAXATION OF LOW-INCOME HOUSING
2 2012 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Jack R. Draxler
5 Senate Sponsor: Lyle W. Hillyard
6
7 LONG TITLE
8 General Description:
9 This bill makes changes to property tax provisions related to low-income housing.
10 Highlighted Provisions:
11 This bill:
12 . requires the owner of property subject to a low-income housing covenant to
13 annually provide certain information to a county assessor;
14 . provides for assessment when the required information is not provided;
15 . provides for a penalty for failure to provide certain information to an assessor; and
16 . makes technical and conforming changes.
17 Money Appropriated in this Bill:
18 None
19 Other Special Clauses:
20 This bill takes effect on January 1, 2013.
21 Utah Code Sections Affected:
22 AMENDS:
23 59-2-301.3, as enacted by Laws of Utah 2003, Chapter 113
24
25 Be it enacted by the Legislature of the state of Utah:

26 Section 1. Section 59-2-301.3 is amended to read:
27 59-2-301.3. Definitions -- Assessment of real property subject to a low-income
28 housing covenant.
29 (1) As used in this section:
30 (a) "low-income housing covenant" means an agreement:
31 (i) between:
32 (A) the Utah Housing Corporation; and
33 (B) an owner of real property upon which residential rental housing is located; and
34 (ii) in which the owner described in Subsection (1)(a)(i)(B) agrees to limit the amount
35 of rent that a renter may be charged for the residential rental housing; and
36 (b) "residential rental housing" means housing that:
37 (i) is used:
38 (A) for residential purposes; and
39 (B) as a primary residence; and
40 (ii) is rental property.
41 (2) [In assessing the fair market value of real property that is subject to a low-income
42 housing covenant, a] A county assessor shall [include as part of the assessment], in determining
43 the fair market value of real property subject to a low-income housing covenant, take into
44 account all relevant factors that affect the fair market value of the property, including:
45 (a) the information provided in Subsection (3); and
46 (b) any effects the low-income housing covenant may have on the fair market value of
47 the real property.
48 (3) (a) Except as provided in Subsection (3)(b), to have a county assessor take into
49 account a low-income housing covenant under Subsection (2), the owner of a property subject
50 to a low-income housing covenant shall, by April 30 of each year, provide to the county
51 assessor:
52 (i) a signed statement from the property owner that the project continues to meet the
53 requirements of the low-income housing covenant;
54 (ii) a financial operating statement for the property for the prior year;
55 (iii) rent rolls for the property for the prior year; and
56 (iv) federal and commercial financing terms and agreements for the property.

57 (b) If the April 30 described in Subsection (3)(a) falls within the first twelve months
58 after a low-income housing operation begins on the property, a property owner shall provide
59 estimates of the information required by Subsections (3)(a)(ii) through (iv).
60 (4) If the owner of a property subject to a low-income housing covenant fails to meet
61 the requirements of Subsection (3):
62 (a) the assessor shall:
63 (i) make a record of the failure to meet the requirements of Subsection (3); and
64 (ii) make an estimate of the fair market value of the property in accordance with
65 Subsection (2) based on information available to the assessor; and
66 (b) the owner shall pay a penalty equal to the greater of:
67 (i) $250; or
68 (ii) 10% of the tax due on the property for that year.
69 Section 2. Effective date.
70 This bill takes effect on January 1, 2013.