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S.B. 116

             1     

ARMED FORCES PROPERTY TAX EXEMPTION

             2     
2012 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Luz Robles

             5     
House Sponsor: Stephen E. Sandstrom

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill expands a property tax exemption related to military members.
             10      Highlighted Provisions:
             11          This bill:
             12          .    defines terms and modifies definitions;
             13          .    expands a property tax exemption related to military members to include certain
             14      members of the armed forces who performed military service in a combat zone in
             15      the prior year; and
             16          .    makes technical and conforming changes.
             17      Money Appropriated in this Bill:
             18          None
             19      Other Special Clauses:
             20          This bill provides a contingent effective date of January 1, 2013.
             21      Utah Code Sections Affected:
             22      AMENDS:
             23          59-2-1104, as last amended by Laws of Utah 2011, Chapter 366
             24          59-2-1105, as last amended by Laws of Utah 2011, Chapter 366
             25     
             26      Be it enacted by the Legislature of the state of Utah:
             27          Section 1. Section 59-2-1104 is amended to read:


             28           59-2-1104. Definitions -- Armed Forces exemption -- Amount of Armed Forces
             29      exemption.
             30          (1) As used in this section and Section 59-2-1105 :
             31          (a) "Active component of the United States Armed Forces" is as defined in Section
             32      59-10-1027 .
             33          [(a)] (b) "Adjusted taxable value limit" means:
             34          (i) for the year 2005, $200,000; and
             35          (ii) for each year after 2005, the amount of the adjusted taxable value limit for the
             36      previous year, plus an amount calculated by multiplying the amount of the adjusted taxable
             37      value limit for the previous year by the actual percent change in the Consumer Price Index
             38      during the previous calendar year.
             39          [(b)] (c) "Claimant" means:
             40          (i) a veteran with a disability who files an application under Section 59-2-1105 for a
             41      veteran's exemption;
             42          (ii) the unmarried surviving spouse:
             43          (A) of a:
             44          (I) deceased veteran with a disability; or
             45          (II) veteran who was killed in action or died in the line of duty; and
             46          (B) who files an application under Section 59-2-1105 for a veteran's exemption; [or]
             47          (iii) a minor orphan:
             48          (A) of a:
             49          (I) deceased veteran with a disability; or
             50          (II) veteran who was killed in action or died in the line of duty; and
             51          (B) who files an application under Section 59-2-1105 for a veteran's exemption[.]; or
             52          (iv) a member of an active component of the United States Armed Forces or a reserve
             53      component of the United States Armed Forces who performed military service in a combat
             54      zone in the prior year.
             55          (d) "Combat zone" is as defined in Section 59-10-1027 .
             56          [(c)] (e) "Consumer price index" is as described in Section 1(f)(4), Internal Revenue
             57      Code, and defined in Section 1(f)(5), Internal Revenue Code.
             58          [(d)] (f) "Deceased veteran with a disability" means a deceased person who was a


             59      veteran with a disability at the time the person died.
             60          [(e)] (g) "Military entity" means:
             61          (i) the federal Department of Veterans Affairs; [or]
             62          [(ii) a component of the armed forces of:]
             63          [(A) the United States; or]
             64          [(B) the state.]
             65          (ii) an active component of the United States Armed Forces; or
             66          (iii) a reserve component of the United States Armed Forces.
             67          (h) "Military service in a combat zone" is as defined in Section 59-10-1027 .
             68          (i) "Reserve component of the United States Armed Forces" is as defined in Section
             69      59-10-1027 .
             70          [(f)] (j) "Residence" is as defined in Section 59-2-1202 , except that a rented dwelling is
             71      not considered to be a residence.
             72          [(g)] (k) "Veteran who was killed in action or died in the line of duty" means a person
             73      who was killed in action or died in the line of duty in [the military service of the United States
             74      or the state] an active component of the United States Armed Forces or a reserve component of
             75      the United States Armed Forces, regardless of whether that person had a disability at the time
             76      that person was killed in action or died in the line of duty.
             77          [(h)] (l) "Veteran with a disability" means a person with a disability who, during
             78      military training or a military conflict, acquired a disability in the line of duty in [the military
             79      service of the United States or the state] an active component of the United States Armed
             80      Forces or a reserve component of the United States Armed Forces.
             81          [(i)] (m) "Veteran's exemption" means a property tax exemption provided for in
             82      Subsection (2).
             83          (2) (a) The amount of taxable value of the property described in Subsection (2)(b) is
             84      exempt from taxation as calculated under Subsections (2)(c) through (e) if the property
             85      described in Subsection (2)(b) is owned by:
             86          (i) a veteran with a disability; [or]
             87          (ii) the unmarried surviving spouse or a minor orphan of a:
             88          (A) deceased veteran with a disability; or
             89          (B) veteran who was killed in action or died in the line of duty[.]; or


             90          (iii) a member of an active component of the United States Armed Forces or a reserve
             91      component of the United States Armed Forces who performed military service in a combat
             92      zone in the prior year.
             93          (b) Subsection (2)(a) applies to the following property:
             94          (i) the claimant's primary residence;
             95          (ii) tangible personal property that:
             96          (A) is held exclusively for personal use; and
             97          (B) is not used in a trade or business; or
             98          (iii) a combination of Subsections (2)(b)(i) and (ii).
             99          (c) Except as provided in Subsection (2)(d) or (e), the amount of taxable value of
             100      property described in Subsection (2)(b) that is exempt under Subsection (2)(a) is:
             101          (i) as described in Subsection (2)(f), if the property is owned by:
             102          (A) a veteran with a disability;
             103          (B) the unmarried surviving spouse of a deceased veteran with a disability; or
             104          (C) a minor orphan of a deceased veteran with a disability; or
             105          (ii) equal to the total taxable value of the claimant's property described in Subsection
             106      (2)(b) if the property is owned by:
             107          (A) the unmarried surviving spouse of a veteran who was killed in action or died in the
             108      line of duty; [or]
             109          (B) a minor orphan of a veteran who was killed in action or died in the line of duty[.];
             110      or
             111          (C) a member of an active component of the United States Armed Forces or a reserve
             112      component of the United States Armed Forces who performed military service in a combat
             113      zone in the prior year.
             114          (d) (i) Notwithstanding Subsection (2)(c)(i) and subject to Subsection (2)(d)(ii), a
             115      veteran's exemption except for a claimant described in Subsection (2)(a)(iii) may not be
             116      allowed under this Subsection (2) if the percentage of disability listed on the certificate
             117      described in Subsection 59-2-1105 (3)(a) is less than 10%.
             118          (ii) A veteran with a disability is considered to have a 100% disability, regardless of
             119      the percentage of disability listed on a certificate described in Subsection 59-2-1105 (3)(a), if
             120      the United States Department of Veterans' Affairs certifies the veteran in the classification of


             121      individual unemployability.
             122          (e) Notwithstanding Subsection (2)(c)(i), a claimant who is the unmarried surviving
             123      spouse or minor orphan of a deceased veteran with a disability may claim [a veteran's] an
             124      exemption for the total value of the property described in Subsection (2)(b) if:
             125          (i) the deceased veteran with a disability served in the military service of the United
             126      States or the state prior to January 1, 1921; and
             127          (ii) the percentage of disability listed on the certificate described in Subsection
             128      59-2-1105 (3)(a) for the deceased veteran with a disability is 10% or more.
             129          (f) Except as provided in Subsection (2)(g), the amount of the taxable value of the
             130      property described in Subsection (2)(b) that is exempt under Subsection (2)(c)(i) is equal to the
             131      percentage of disability listed on the certificate described in Subsection 59-2-1105 (3)(a)
             132      multiplied by the adjusted taxable value limit.
             133          (g) Notwithstanding Subsection (2)(f), the amount of the taxable value of the property
             134      described in Subsection (2)(b) that is exempt under Subsection (2)(c)(i) may not be greater than
             135      the taxable value of the property described in Subsection (2)(b).
             136          (h) For purposes of this section and Section 59-2-1105 , a person who is honorably
             137      discharged from military service of [the United States or the state] an active component of the
             138      United States Armed Forces or a reserve component of the United States Armed Forces:
             139          (i) is presumed to be a citizen of the United States; and
             140          (ii) [shall] may not be required to provide additional proof of citizenship to establish
             141      that the [veteran] person is a citizen of the United States.
             142          (3) The Department of Veterans' Affairs created in Section 71-8-2 shall, through an
             143      informal hearing held in accordance with Title 63G, Chapter 4, Administrative Procedures Act,
             144      resolve each dispute arising under this section concerning a veteran's status as a veteran with a
             145      disability.
             146          Section 2. Section 59-2-1105 is amended to read:
             147           59-2-1105. Application for Armed Forces exemption -- Rulemaking authority --
             148      Statement -- County authority to make refunds.
             149          (1) (a) Except as provided in Subsection 59-2-1101 (2)(c), [a veteran's] an exemption
             150      under Section 59-2-1104 may be allowed only if the interest of the claimant is on record on
             151      January 1 of the year the exemption is claimed.


             152          (b) If the claimant has an interest in real property under a contract, the [veteran's]
             153      exemption under Section 59-2-1104 may be allowed if it is proved to the satisfaction of the
             154      county that the claimant is:
             155          (i) the purchaser under the contract; and
             156          (ii) obligated to pay the taxes on the property beginning January 1 of the year the
             157      exemption is claimed.
             158          (c) If the claimant is the grantor of a trust holding title to real or tangible personal
             159      property on which [a veteran's] an exemption under Section 59-2-1104 is claimed, the claimant
             160      may claim the portion of the [veteran's] exemption under Section 59-2-1104 and be treated as
             161      the owner of that portion of the property held in trust for which the claimant proves to the
             162      satisfaction of the county that:
             163          (i) title to the portion of the trust will revest in the claimant upon the exercise of a
             164      power:
             165          (A) by:
             166          (I) the claimant as grantor of the trust;
             167          (II) a nonadverse party; or
             168          (III) both the claimant and a nonadverse party; and
             169          (B) regardless of whether the power is a power:
             170          (I) to revoke;
             171          (II) to terminate;
             172          (III) to alter;
             173          (IV) to amend; or
             174          (V) to appoint;
             175          (ii) the claimant is obligated to pay the taxes on that portion of the trust property
             176      beginning January 1 of the year the claimant claims the exemption; and
             177          (iii) the claimant meets the requirements under this part for the exemption.
             178          (2) (a) (i) A claimant applying for [a veteran's] an exemption under [this section]
             179      Section 59-2-1104 shall file an application:
             180          (A) with the county in which that [person] claimant resides; and
             181          (B) except as provided in Subsection (2)(b) or (e), on or before September 1 of the year
             182      in which that claimant is applying for the [veteran's] exemption in accordance with this section.


             183          (ii) A county shall provide a claimant who files an application for [a veteran's] an
             184      exemption in accordance with this section with a receipt:
             185          (A) stating that the county received the claimant's application; and
             186          (B) no later than 30 days after the day on which the claimant filed the application in
             187      accordance with this section.
             188          (b) Notwithstanding Subsection (2)(a)(i)(B) or (2)(e):
             189          (i) subject to Subsection (2)(b)(iv), for a claimant who applies for [a veteran's] an
             190      exemption under Section 59-2-1104 on or after January 1, 2004, a county shall extend the
             191      deadline for filing the application required by Subsection (2)(a) to September 1 of the year after
             192      the year the claimant would otherwise be required to file the application under Subsection
             193      (2)(a)(i)(B) if:
             194          (A) on or after January 1, 2004, a military entity issues a written decision that the:
             195          (I) veteran has a disability; or
             196          (II) deceased veteran with a disability with respect to whom the claimant applies for a
             197      veteran's exemption had a disability at the time the deceased veteran with a disability died; and
             198          (B) the date the written decision described in Subsection (2)(b)(i)(A) takes effect is in
             199      any year prior to the current calendar year;
             200          (ii) subject to Subsections (2)(b)(iv) and (2)(d), for a claimant who applies for [a
             201      veteran's] an exemption under Section 59-2-1104 on or after January 1, 2004, a county shall
             202      allow the claimant to amend the application required by Subsection (2)(a) on or before
             203      September 1 of the year after the year the claimant filed the application under Subsection
             204      (2)(a)(i)(B) if:
             205          (A) on or after January 1, 2004, a military entity issues a written decision that the
             206      percentage of disability has changed for the:
             207          (I) veteran with a disability; or
             208          (II) deceased veteran with a disability with respect to whom the claimant applies for [a
             209      veteran's] the exemption; and
             210          (B) the date the written decision described in Subsection (2)(b)(ii)(A) takes effect is in
             211      any year prior to the current calendar year;
             212          (iii) subject to Subsections (2)(b)(iv) and (2)(d), for a claimant who applies for [a
             213      veteran's] an exemption under Section 59-2-1104 on or after January 1, 2004, a county shall


             214      extend the deadline for filing the application required by Subsection (2)(a) to September 1 of
             215      the year after the year the claimant would otherwise be required to file the application under
             216      Subsection (2)(a)(i)(B) if the county legislative body determines that:
             217          (A) the claimant or a member of the claimant's immediate family had an illness or
             218      injury that prevented the claimant from filing the application on or before the deadline for
             219      filing the application established in Subsection (2)(a)(i)(B);
             220          (B) a member of the claimant's immediate family died during the calendar year the
             221      claimant was required to file the application under Subsection (2)(a)(i)(B);
             222          (C) the claimant was not physically present in the state for a time period of at least six
             223      consecutive months during the calendar year the claimant was required to file the application
             224      under Subsection (2)(a)(i)(B); or
             225          (D) the failure of the claimant to file the application on or before the deadline for filing
             226      the application established in Subsection (2)(a)(i)(B):
             227          (I) would be against equity or good conscience; and
             228          (II) was beyond the reasonable control of the claimant; and
             229          (iv) a county may extend the deadline for filing an application or amending an
             230      application under this Subsection (2) until December 31 if the county finds that good cause
             231      exists to extend the deadline.
             232          (c) The following shall accompany the initial application for [a veteran's] an exemption
             233      under Section 59-2-1104 :
             234          (i) a copy of the veteran's certificate of discharge from [the] military service [of:]; or
             235          [(A) the United States; or]
             236          [(B) this state; or]
             237          (ii) other satisfactory evidence of eligible military service, including military service in
             238      a combat zone, if applicable.
             239          (d) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             240      commission may by rule:
             241          (i) establish procedures and requirements for amending an application under
             242      Subsection (2)(b)(ii);
             243          (ii) for purposes of Subsection (2)(b)(iii), define the terms:
             244          (A) "immediate family"; or


             245          (B) "physically present"; or
             246          (iii) for purposes of Subsection (2)(b)(iii), prescribe the circumstances under which the
             247      failure of a claimant to file an application on or before the deadline for filing the application
             248      established in Subsection (2)(a)(i)(B):
             249          (A) would be against equity or good conscience; and
             250          (B) is beyond the reasonable control of a claimant.
             251          (e) [If] Except as provided in Subsection (2)(g), if a claimant has on file with the
             252      county the application described in Subsection (2)(a), the county may not require the claimant
             253      to file another application described in Subsection (2)(a) unless:
             254          (i) the claimant applies all or a portion of an exemption [allowed by this section] under
             255      Section 59-2-1104 to any tangible personal property;
             256          (ii) the percentage of disability has changed for the:
             257          (A) veteran with a disability; or
             258          (B) deceased veteran with a disability with respect to whom a claimant applies for a
             259      veteran's exemption under this section;
             260          (iii) the veteran with a disability dies;
             261          (iv) the claimant's ownership interest in the claimant's primary residence changes;
             262          (v) the claimant's occupancy of the primary residence for which the claimant claims an
             263      exemption under Section 59-2-1104 changes; or
             264          (vi) the claimant who files an application for [a veteran's] an exemption under Section
             265      59-2-1104 with respect to a deceased veteran with a disability or veteran who was killed in
             266      action or died in the line of duty is a person other than the claimant who filed the application
             267      described in Subsection (2)(a) for [a veteran's] the exemption:
             268          (A) for the calendar year immediately preceding the current calendar year; and
             269          (B) with respect to that deceased veteran with a disability or veteran who was killed in
             270      action or died in the line of duty.
             271          (f) The county may verify that the residential property for which the claimant claims an
             272      exemption under Section 59-2-1104 is the claimant's primary residence.
             273          (g) A member of an active component of the United States Armed Forces or reserve
             274      component of the United States Armed Forces who performed military service in a combat
             275      zone in the prior year shall annually file the application described in Subsection (2)(a).


             276          (3) (a) (i) Subject to Subsection (3)(a)(ii), a claimant except for a claimant described in
             277      Subsection (2)(g) who files an application for [a veteran's] an exemption under Section
             278      59-2-1104 shall have on file with the county a statement:
             279          (A) issued by a military entity; and
             280          (B) listing the percentage of disability for the veteran with a disability or deceased
             281      veteran with a disability with respect to whom a claimant applies for [a veteran's] the
             282      exemption.
             283          (ii) If a claimant except for a claimant described in Subsection (2)(g) has on file with
             284      the county the statement described in Subsection (3)(a)(i), the county may not require the
             285      claimant to file another statement described in Subsection (3)(a)(i) unless:
             286          (A) the claimant who files an application under this section for [a veteran's] an
             287      exemption under Section 59-2-1104 with respect to a deceased veteran with a disability or
             288      veteran who was killed in action or died in the line of duty is a person other than the claimant
             289      who filed the statement described in Subsection (3)(a)(i) for [a veteran's] the exemption:
             290          (I) for the calendar year immediately preceding the current calendar year; and
             291          (II) with respect to that deceased veteran with a disability or veteran who was killed in
             292      action or died in the line of duty; or
             293          (B) the percentage of disability has changed for a:
             294          (I) veteran with a disability; or
             295          (II) deceased veteran with a disability with respect to whom the claimant applies for [a
             296      veteran's] an exemption under [this section] Section 59-2-1104 .
             297          (b) For a claimant filing an application in accordance with Subsection (2)(b)(i), the
             298      claimant shall include with the application required by Subsection (2) a statement issued by a
             299      military entity listing the date the written decision described in Subsection (2)(b)(i)(A) takes
             300      effect.
             301          (c) For a claimant amending an application in accordance with Subsection (2)(b)(ii),
             302      the claimant shall provide to the county a statement issued by a military entity listing the date
             303      the written decision described in Subsection (2)(b)(ii)(A) takes effect.
             304          (4) (a) For purposes of this Subsection (4):
             305          (i) "Property taxes due" means the taxes due on a claimant's property:
             306          (A) for which [a veteran's] an exemption under Section 59-2-1104 is granted by a


             307      county; and
             308          (B) for the calendar year for which the [veteran's] exemption is granted.
             309          (ii) "Property taxes paid" is an amount equal to the sum of:
             310          (A) the amount of the property taxes the claimant paid for the calendar year for which
             311      the claimant is applying for [the veteran's] an exemption under Section 59-2-1104 ; and
             312          (B) the [veteran's] exemption the county granted for the calendar year described in
             313      Subsection (4)(a)(ii)(A).
             314          (b) A county granting [a veteran's] an exemption under Section 59-2-1104 to a
             315      claimant shall refund to that claimant an amount equal to the amount by which the claimant's
             316      property taxes paid exceed the claimant's property taxes due, if that amount is $1 or more.
             317          Section 3. Effective date.
             318          This bill takes effect on January 1, 2013 if the amendment to the Utah Constitution
             319      proposed by S.J.R. 8, Joint Resolution on Property Tax Exemption for Military Personnel,
             320      2012 General Session, passes the Legislature and is approved by a majority of those voting on
             321      it at the next regular general election.




Legislative Review Note
    as of 1-16-12 6:16 PM


Office of Legislative Research and General Counsel


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