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H.J.R. 18

             1     

JOINT RESOLUTION ON PERSONAL PROPERTY TAX

             2     
2012 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: John Dougall

             5     
Senate Sponsor: ____________

             6     
             7      LONG TITLE
             8      General Description:
             9          This joint resolution of the Legislature proposes to amend the Utah Constitution to
             10      modify provisions relating to the taxation of personal property.
             11      Highlighted Provisions:
             12          This resolution proposes to amend the Utah Constitution to:
             13          .    authorize the Legislature to provide for tangible personal property to be assessed
             14      based on its value as reported for tax purposes to the United States government;
             15          .    authorize the Legislature to provide by statute a property tax exemption for tangible
             16      personal property that has been fully depreciated or expensed; and
             17          .    authorize the Legislature to provide by statute for a nominal fee in lieu of property
             18      tax on certain tangible personal property that is exempted from taxation.
             19      Special Clauses:
             20          This resolution directs the lieutenant governor to submit this proposal to voters.
             21          This resolution provides a contingent effective date of January 1, 2013 for this proposal.
             22      Utah Constitution Sections Affected:
             23      AMENDS:
             24          ARTICLE XIII, SECTION 2
             25          ARTICLE XIII, SECTION 3
             26     
             27      Be it resolved by the Legislature of the state of Utah, two-thirds of all members elected to each


             28      of the two houses voting in favor thereof:
             29          Section 1. It is proposed to amend Utah Constitution Article XIII, Section 2, to read:
             30           Article XIII, Section 2. [Property tax.]
             31          (1) So that each person and corporation pays a tax in proportion to the fair market
             32      value of his, her, or its tangible property, all tangible property in the State that is not exempt
             33      under the laws of the United States or under this Constitution shall be:
             34          (a) assessed at a uniform and equal rate in proportion to its fair market value, to be
             35      ascertained as provided by law; and
             36          (b) taxed at a uniform and equal rate.
             37          (2) Each corporation and person in the State or doing business in the State is subject to
             38      taxation on the tangible property owned or used by the corporation or person within the
             39      boundaries of the State or local authority levying the tax.
             40          (3) The Legislature may provide by statute that land used for agricultural purposes be
             41      assessed based on its value for agricultural use.
             42          (4) The Legislature may by statute determine the manner and extent of taxing livestock.
             43          (5) The Legislature may by statute determine the manner and extent of taxing or
             44      exempting intangible property, except that any property tax on intangible property may not
             45      exceed .005 of its fair market value. If any intangible property is taxed under the property tax,
             46      the income from that property may not also be taxed.
             47          (6) Tangible personal property required by law to be registered with the State before it
             48      is used on a public highway or waterway, on public land, or in the air may be exempted from
             49      property tax by statute. If the Legislature exempts tangible personal property from property tax
             50      under this Subsection (6), it shall provide for the payment of uniform statewide fees or uniform
             51      statewide rates of assessment or taxation on that property in lieu of the property tax. The fair
             52      market value of any property exempted under this Subsection (6) shall be considered part of the
             53      State tax base for determining the debt limitation under Article XIV.
             54          (7) The Legislature may by statute provide for the assessment of tangible personal
             55      property according to its value as reported for tax purposes to the United States government in
             56      conformity with the laws of the United States as from time to time amended.
             57          Section 2. It is proposed to amend Utah Constitution Article XIII, Section 3, to read:
             58           Article XIII, Section 3. [Property tax exemptions.]


             59          (1) The following are exempt from property tax:
             60          (a) property owned by the State;
             61          (b) property owned by a public library;
             62          (c) property owned by a school district;
             63          (d) property owned by a political subdivision of the State, other than a school district,
             64      and located within the political subdivision;
             65          (e) property owned by a political subdivision of the State, other than a school district,
             66      and located outside the political subdivision unless the Legislature by statute authorizes the
             67      property tax on that property;
             68          (f) property owned by a nonprofit entity used exclusively for religious, charitable, or
             69      educational purposes;
             70          (g) places of burial not held or used for private or corporate benefit;
             71          (h) farm equipment and farm machinery as defined by statute;
             72          (i) water rights, reservoirs, pumping plants, ditches, canals, pipes, flumes, power
             73      plants, and transmission lines to the extent owned and used by an individual or corporation to
             74      irrigate land that is:
             75          (i) within the State; and
             76          (ii) owned by the individual or corporation, or by an individual member of the
             77      corporation; and
             78          (j) (i) if owned by a nonprofit entity and used within the State to irrigate land, provide
             79      domestic water, as defined by statute, or provide water to a public water supplier:
             80          (A) water rights; and
             81          (B) reservoirs, pumping plants, ditches, canals, pipes, flumes, and, as defined by
             82      statute, other water infrastructure;
             83          (ii) land occupied by a reservoir, ditch, canal, or pipe that is exempt under Subsection
             84      (1)(j)(i)(B) if the land is owned by the nonprofit entity that owns the reservoir, ditch, canal, or
             85      pipe; and
             86          (iii) land immediately adjacent to a reservoir, ditch, canal, or pipe that is exempt under
             87      Subsection (1)(j)(i)(B) if the land is:
             88          (A) owned by the nonprofit entity that owns the adjacent reservoir, ditch, canal, or
             89      pipe; and


             90          (B) reasonably necessary for the maintenance or for otherwise supporting the operation
             91      of the reservoir, ditch, canal, or pipe.
             92          (2) (a) The Legislature may by statute exempt the following from property tax:
             93          (i) tangible personal property constituting inventory present in the State on January 1
             94      and held for sale in the ordinary course of business;
             95          (ii) tangible personal property present in the State on January 1 and held for sale or
             96      processing and shipped to a final destination outside the State within 12 months;
             97          (iii) subject to Subsection (2)(b), property to the extent used to generate and deliver
             98      electrical power for pumping water to irrigate lands in the State;
             99          (iv) up to 45% of the fair market value of residential property, as defined by statute;
             100          (v) household furnishings, furniture, and equipment used exclusively by the owner of
             101      that property in maintaining the owner's home; [and]
             102          (vi) tangible personal property that, if subject to property tax, would generate an
             103      inconsequential amount of revenue[.]; and
             104          (vii) tangible personal property that lawfully has been fully depreciated or accounted
             105      for as an expense.
             106          (b) The exemption under Subsection (2)(a)(iii) shall accrue to the benefit of the users
             107      of pumped water as provided by statute.
             108          (c) If the Legislature exempts tangible personal property under Subsection (2)(a)(vi),
             109      the Legislature may by statute provide for the imposition of a nominal fee to be paid in lieu of
             110      property tax on the exempted property.
             111          (3) The following may be exempted from property tax as provided by statute:
             112          (a) property owned by a disabled person who, during military training or a military
             113      conflict, was disabled in the line of duty in the military service of the United States or the State;
             114      and
             115          (b) property owned by the unmarried surviving spouse or the minor orphan of a person
             116      who:
             117          (i) is described in Subsection (3)(a); or
             118          (ii) during military training or a military conflict, was killed in action or died in the line
             119      of duty in the military service of the United States or the State.
             120          (4) The Legislature may by statute provide for the remission or abatement of the taxes


             121      of the poor.
             122          Section 3. Submittal to voters.
             123          The lieutenant governor is directed to submit this proposed amendment to the voters of
             124      the state at the next regular general election in the manner provided by law.
             125          Section 4. Effective date.
             126          If the amendment proposed by this joint resolution is approved by a majority of those
             127      voting on it at the next regular general election, the amendment shall take effect on January 1,
             128      2013.




Legislative Review Note
    as of 2-10-12 8:53 AM


Office of Legislative Research and General Counsel


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