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First Substitute S.B. 116

Senator John L. Valentine proposes the following substitute bill:


             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 qualifying active duty military service;
             15      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 qualifying active duty military
             54      service.
             55          [(c)] (d) "Consumer price index" is as described in Section 1(f)(4), Internal Revenue
             56      Code, and defined in Section 1(f)(5), Internal Revenue Code.


             57          [(d)] (e) "Deceased veteran with a disability" means a deceased person who was a
             58      veteran with a disability at the time the person died.
             59          [(e)] (f) "Military entity" means:
             60          (i) the federal Department of Veterans Affairs; [or]
             61          [(ii) a component of the armed forces of:]
             62          [(A) the United States; or]
             63          [(B) the state.]
             64          (ii) an active component of the United States Armed Forces; or
             65          (iii) a reserve component of the United States Armed Forces.
             66          (g) "Qualifying active duty military service" means:
             67          (i) at least 200 days in a calendar year, regardless of whether consecutive, of active
             68      duty military service outside the state in an active component of the United States Armed
             69      Forces or a reserve component of the United States Armed Forces; or
             70          (ii) the completion of at least 200 consecutive days of active duty military service
             71      outside the state:
             72          (A) in an active component of the United States Armed Forces or a reserve component
             73      of the United States Armed Forces; and
             74          (B) that began in the prior year, if those days of active duty military service outside the
             75      state in the prior year were not counted as qualifying active duty military service for purposes
             76      of this section or Section 59-2-1105 in the prior year.
             77          (h) "Reserve component of the United States Armed Forces" is as defined in Section
             78      59-10-1027 .
             79          [(f)] (i) "Residence" is as defined in Section 59-2-1202 , except that a rented dwelling is
             80      not considered to be a residence.
             81          [(g)] (j) "Veteran who was killed in action or died in the line of duty" means a person
             82      who was killed in action or died in the line of duty in [the military service of the United States
             83      or the state] an active component of the United States Armed Forces or a reserve component of
             84      the United States Armed Forces, regardless of whether that person had a disability at the time
             85      that person was killed in action or died in the line of duty.
             86          [(h)] (k) "Veteran with a disability" means a person with a disability who, during
             87      military training or a military conflict, acquired a disability in the line of duty in [the military


             88      service of the United States or the state] an active component of the United States Armed
             89      Forces or a reserve component of the United States Armed Forces.
             90          [(i)] (l) "Veteran's exemption" means a property tax exemption provided for in
             91      Subsection (2).
             92          (2) (a) The amount of taxable value of the property described in Subsection (2)(b) is
             93      exempt from taxation as calculated under Subsections (2)(c) through (e) if the property
             94      described in Subsection (2)(b) is owned by:
             95          (i) a veteran with a disability; [or]
             96          (ii) the unmarried surviving spouse or a minor orphan of a:
             97          (A) deceased veteran with a disability; or
             98          (B) veteran who was killed in action or died in the line of duty[.]; or
             99          (iii) a member of an active component of the United States Armed Forces or a reserve
             100      component of the United States Armed Forces who performed qualifying active duty military
             101      service.
             102          (b) Subsection (2)(a) applies to the following property:
             103          (i) the claimant's primary residence;
             104          (ii) for a claimant described in Subsection (2)(a)(i) or (ii), tangible personal property
             105      that:
             106          (A) is held exclusively for personal use; and
             107          (B) is not used in a trade or business; or
             108          (iii) for a claimant described in Subsection (2)(a)(i) or (ii), a combination of
             109      Subsections (2)(b)(i) and (ii).
             110          (c) Except as provided in Subsection (2)(d) or (e), the amount of taxable value of
             111      property described in Subsection (2)(b) that is exempt under Subsection (2)(a) is:
             112          (i) as described in Subsection (2)(f), if the property is owned by:
             113          (A) a veteran with a disability;
             114          (B) the unmarried surviving spouse of a deceased veteran with a disability; or
             115          (C) a minor orphan of a deceased veteran with a disability; or
             116          (ii) equal to the total taxable value of the claimant's property described in Subsection
             117      (2)(b) if the property is owned by:
             118          (A) the unmarried surviving spouse of a veteran who was killed in action or died in the


             119      line of duty; [or]
             120          (B) a minor orphan of a veteran who was killed in action or died in the line of duty[.];
             121      or
             122          (C) a member of an active component of the United States Armed Forces or a reserve
             123      component of the United States Armed Forces who performed qualifying active duty military
             124      service.
             125          (d) (i) Notwithstanding Subsection (2)(c)(i) and subject to Subsection (2)(d)(ii), a
             126      veteran's exemption except for a claimant described in Subsection (2)(a)(iii) may not be
             127      allowed under this Subsection (2) if the percentage of disability listed on the certificate
             128      described in Subsection 59-2-1105 (3)(a) is less than 10%.
             129          (ii) A veteran with a disability is considered to have a 100% disability, regardless of
             130      the percentage of disability listed on a certificate described in Subsection 59-2-1105 (3)(a), if
             131      the United States Department of Veterans' Affairs certifies the veteran in the classification of
             132      individual unemployability.
             133          (e) Notwithstanding Subsection (2)(c)(i), a claimant who is the unmarried surviving
             134      spouse or minor orphan of a deceased veteran with a disability may claim [a veteran's] an
             135      exemption for the total value of the property described in Subsection (2)(b) if:
             136          (i) the deceased veteran with a disability served in the military service of the United
             137      States or the state prior to January 1, 1921; and
             138          (ii) the percentage of disability listed on the certificate described in Subsection
             139      59-2-1105 (3)(a) for the deceased veteran with a disability is 10% or more.
             140          (f) Except as provided in Subsection (2)(g), the amount of the taxable value of the
             141      property described in Subsection (2)(b) that is exempt under Subsection (2)(c)(i) is equal to the
             142      percentage of disability listed on the certificate described in Subsection 59-2-1105 (3)(a)
             143      multiplied by the adjusted taxable value limit.
             144          (g) Notwithstanding Subsection (2)(f), the amount of the taxable value of the property
             145      described in Subsection (2)(b) that is exempt under Subsection (2)(c)(i) may not be greater than
             146      the taxable value of the property described in Subsection (2)(b).
             147          (h) For purposes of this section and Section 59-2-1105 , a person who is honorably
             148      discharged from military service of [the United States or the state] an active component of the
             149      United States Armed Forces or a reserve component of the United States Armed Forces:


             150          (i) is presumed to be a citizen of the United States; and
             151          (ii) [shall] may not be required to provide additional proof of citizenship to establish
             152      that the [veteran] person is a citizen of the United States.
             153          (3) The Department of Veterans' Affairs created in Section 71-8-2 shall, through an
             154      informal hearing held in accordance with Title 63G, Chapter 4, Administrative Procedures Act,
             155      resolve each dispute arising under this section concerning a veteran's status as a veteran with a
             156      disability.
             157          Section 2. Section 59-2-1105 is amended to read:
             158           59-2-1105. Application for Armed Forces exemption -- Rulemaking authority --
             159      Statement -- County authority to make refunds.
             160          (1) (a) Except as provided in Subsection 59-2-1101 (2)(c), [a veteran's] an exemption
             161      under Section 59-2-1104 may be allowed only if the interest of the claimant is on record on
             162      January 1 of the year the exemption is claimed.
             163          (b) If the claimant has an interest in real property under a contract, the [veteran's]
             164      exemption under Section 59-2-1104 may be allowed if it is proved to the satisfaction of the
             165      county that the claimant is:
             166          (i) the purchaser under the contract; and
             167          (ii) obligated to pay the taxes on the property beginning January 1 of the year the
             168      exemption is claimed.
             169          (c) If the claimant is the grantor of a trust holding title to real or tangible personal
             170      property on which [a veteran's] an exemption under Section 59-2-1104 is claimed, the claimant
             171      may claim the portion of the [veteran's] exemption under Section 59-2-1104 and be treated as
             172      the owner of that portion of the property held in trust for which the claimant proves to the
             173      satisfaction of the county that:
             174          (i) title to the portion of the trust will revest in the claimant upon the exercise of a
             175      power:
             176          (A) by:
             177          (I) the claimant as grantor of the trust;
             178          (II) a nonadverse party; or
             179          (III) both the claimant and a nonadverse party; and
             180          (B) regardless of whether the power is a power:


             181          (I) to revoke;
             182          (II) to terminate;
             183          (III) to alter;
             184          (IV) to amend; or
             185          (V) to appoint;
             186          (ii) the claimant is obligated to pay the taxes on that portion of the trust property
             187      beginning January 1 of the year the claimant claims the exemption; and
             188          (iii) the claimant meets the requirements under this part for the exemption.
             189          (2) (a) (i) A claimant applying for [a veteran's] an exemption under [this section]
             190      Section 59-2-1104 shall file an application:
             191          (A) with the county in which that [person] claimant resides; and
             192          (B) except as provided in Subsection (2)(b) or (e), on or before September 1 of the year
             193      in which that claimant is applying for the [veteran's] exemption in accordance with this section.
             194          (ii) A county shall provide a claimant who files an application for [a veteran's] an
             195      exemption in accordance with this section with a receipt:
             196          (A) stating that the county received the claimant's application; and
             197          (B) no later than 30 days after the day on which the claimant filed the application in
             198      accordance with this section.
             199          (b) Notwithstanding Subsection (2)(a)(i)(B) or (2)(e):
             200          (i) subject to Subsection (2)(b)(iv), for a claimant who applies for [a veteran's] an
             201      exemption under Section 59-2-1104 on or after January 1, 2004, a county shall extend the
             202      deadline for filing the application required by Subsection (2)(a) to September 1 of the year after
             203      the year the claimant would otherwise be required to file 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          (I) veteran has a disability; or
             207          (II) deceased veteran with a disability with respect to whom the claimant applies for a
             208      veteran's exemption had a disability at the time the deceased veteran with a disability died; and
             209          (B) the date the written decision described in Subsection (2)(b)(i)(A) takes effect is in
             210      any year prior to the current calendar year;
             211          (ii) subject to Subsections (2)(b)(iv) and (2)(d), for a claimant who applies for [a


             212      veteran's] an exemption under Section 59-2-1104 on or after January 1, 2004, a county shall
             213      allow the claimant to amend the application required by Subsection (2)(a) on or before
             214      September 1 of the year after the year the claimant filed the application under Subsection
             215      (2)(a)(i)(B) if:
             216          (A) on or after January 1, 2004, a military entity issues a written decision that the
             217      percentage of disability has changed for the:
             218          (I) veteran with a disability; or
             219          (II) deceased veteran with a disability with respect to whom the claimant applies for [a
             220      veteran's] the exemption; and
             221          (B) the date the written decision described in Subsection (2)(b)(ii)(A) takes effect is in
             222      any year prior to the current calendar year;
             223          (iii) subject to Subsections (2)(b)(iv) and (2)(d), for a claimant who applies for [a
             224      veteran's] an exemption under Section 59-2-1104 on or after January 1, 2004, a county shall
             225      extend the deadline for filing the application required by Subsection (2)(a) to September 1 of
             226      the year after the year the claimant would otherwise be required to file the application under
             227      Subsection (2)(a)(i)(B) if the county legislative body determines that:
             228          (A) the claimant or a member of the claimant's immediate family had an illness or
             229      injury that prevented the claimant from filing the application on or before the deadline for
             230      filing the application established in Subsection (2)(a)(i)(B);
             231          (B) a member of the claimant's immediate family died during the calendar year the
             232      claimant was required to file the application under Subsection (2)(a)(i)(B);
             233          (C) the claimant was not physically present in the state for a time period of at least six
             234      consecutive months during the calendar year the claimant was required to file the application
             235      under Subsection (2)(a)(i)(B); or
             236          (D) the failure of the claimant to file the application on or before the deadline for filing
             237      the application established in Subsection (2)(a)(i)(B):
             238          (I) would be against equity or good conscience; and
             239          (II) was beyond the reasonable control of the claimant; and
             240          (iv) a county may extend the deadline for filing an application or amending an
             241      application under this Subsection (2) until December 31 if the county finds that good cause
             242      exists to extend the deadline.


             243          (c) The following shall accompany the initial application for [a veteran's] an exemption
             244      under Section 59-2-1104 :
             245          (i) a copy of the veteran's certificate of discharge from [the] military service [of:]; or
             246          [(A) the United States; or]
             247          [(B) this state; or]
             248          (ii) other satisfactory evidence of eligible military service, including orders for
             249      qualifying active duty military service, if applicable.
             250          (d) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             251      commission may by rule:
             252          (i) establish procedures and requirements for amending an application under
             253      Subsection (2)(b)(ii);
             254          (ii) for purposes of Subsection (2)(b)(iii), define the terms:
             255          (A) "immediate family"; or
             256          (B) "physically present"; or
             257          (iii) for purposes of Subsection (2)(b)(iii), prescribe the circumstances under which the
             258      failure of a claimant to file an application on or before the deadline for filing the application
             259      established in Subsection (2)(a)(i)(B):
             260          (A) would be against equity or good conscience; and
             261          (B) is beyond the reasonable control of a claimant.
             262          (e) [If] Except as provided in Subsection (2)(g), if a claimant has on file with the
             263      county the application described in Subsection (2)(a), the county may not require the claimant
             264      to file another application described in Subsection (2)(a) unless:
             265          (i) the claimant applies all or a portion of an exemption [allowed by this section] under
             266      Section 59-2-1104 to any tangible personal property;
             267          (ii) the percentage of disability has changed for the:
             268          (A) veteran with a disability; or
             269          (B) deceased veteran with a disability with respect to whom a claimant applies for a
             270      veteran's exemption under this section;
             271          (iii) the veteran with a disability dies;
             272          (iv) the claimant's ownership interest in the claimant's primary residence changes;
             273          (v) the claimant's occupancy of the primary residence for which the claimant claims an


             274      exemption under Section 59-2-1104 changes; or
             275          (vi) the claimant who files an application for [a veteran's] an exemption under Section
             276      59-2-1104 with respect to a deceased veteran with a disability or veteran who was killed in
             277      action or died in the line of duty is a person other than the claimant who filed the application
             278      described in Subsection (2)(a) for [a veteran's] the exemption:
             279          (A) for the calendar year immediately preceding the current calendar year; and
             280          (B) with respect to that deceased veteran with a disability or veteran who was killed in
             281      action or died in the line of duty.
             282          (f) The county may verify that the residential property for which the claimant claims an
             283      exemption under Section 59-2-1104 is the claimant's primary residence.
             284          (g) A member of an active component of the United States Armed Forces or reserve
             285      component of the United States Armed Forces who performed qualifying active duty military
             286      service shall:
             287          (i) file the application described in Subsection (2)(a) in the year after the year during
             288      which the member completes the qualifying active duty military service; and
             289          (ii) if the member meets the requirements of Section 59-2-1104 and this section to
             290      receive an exemption under Section 59-2-1104 , claim one exemption only in the year the
             291      member files the application described in Subsection (2)(g)(i).
             292          (3) (a) (i) Subject to Subsection (3)(a)(ii), a claimant except for a claimant described in
             293      Subsection (2)(g) who files an application for [a veteran's] an exemption under Section
             294      59-2-1104 shall have on file with the county a statement:
             295          (A) issued by a military entity; and
             296          (B) listing the percentage of disability for the veteran with a disability or deceased
             297      veteran with a disability with respect to whom a claimant applies for [a veteran's] the
             298      exemption.
             299          (ii) If a claimant except for a claimant described in Subsection (2)(g) has on file with
             300      the county the statement described in Subsection (3)(a)(i), the county may not require the
             301      claimant to file another statement described in Subsection (3)(a)(i) unless:
             302          (A) the claimant who files an application under this section for [a veteran's] an
             303      exemption under Section 59-2-1104 with respect to a deceased veteran with a disability or
             304      veteran who was killed in action or died in the line of duty is a person other than the claimant


             305      who filed the statement described in Subsection (3)(a)(i) for [a veteran's] the exemption:
             306          (I) for the calendar year immediately preceding the current calendar year; and
             307          (II) with respect to that deceased veteran with a disability or veteran who was killed in
             308      action or died in the line of duty; or
             309          (B) the percentage of disability has changed for a:
             310          (I) veteran with a disability; or
             311          (II) deceased veteran with a disability with respect to whom the claimant applies for [a
             312      veteran's] an exemption under [this section] Section 59-2-1104 .
             313          (b) For a claimant filing an application in accordance with Subsection (2)(b)(i), the
             314      claimant shall include with the application required by Subsection (2) a statement issued by a
             315      military entity listing the date the written decision described in Subsection (2)(b)(i)(A) takes
             316      effect.
             317          (c) For a claimant amending an application in accordance with Subsection (2)(b)(ii),
             318      the claimant shall provide to the county a statement issued by a military entity listing the date
             319      the written decision described in Subsection (2)(b)(ii)(A) takes effect.
             320          (4) (a) For purposes of this Subsection (4):
             321          (i) "Property taxes due" means the taxes due on a claimant's property:
             322          (A) for which [a veteran's] an exemption under Section 59-2-1104 is granted by a
             323      county; and
             324          (B) for the calendar year for which the [veteran's] exemption is granted.
             325          (ii) "Property taxes paid" is an amount equal to the sum of:
             326          (A) the amount of the property taxes the claimant paid for the calendar year for which
             327      the claimant is applying for [the veteran's] an exemption under Section 59-2-1104 ; and
             328          (B) the [veteran's] exemption the county granted for the calendar year described in
             329      Subsection (4)(a)(ii)(A).
             330          (b) A county granting [a veteran's] an exemption under Section 59-2-1104 to a
             331      claimant shall refund to that claimant an amount equal to the amount by which the claimant's
             332      property taxes paid exceed the claimant's property taxes due, if that amount is $1 or more.
             333          Section 3. Effective date.
             334          This bill takes effect on January 1, 2013 if the amendment to the Utah Constitution
             335      proposed by S.J.R. 8, Joint Resolution on Property Tax Exemption for Military Personnel,


             336      2012 General Session, passes the Legislature and is approved by a majority of those voting on
             337      it at the next regular general election.


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