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First Substitute H.B. 67

This document includes Senate 3rd Reading Floor Amendments incorporated into the bill on Fri, Feb 22, 2013 at 1:28 PM by cmillar. -->

Senator Wayne A. Harper proposes the following substitute bill:


             1     
PROPERTY TAXATION REVISIONS

             2     
2013 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Gage Froerer

             5     
Senate Sponsor: Wayne A. Harper

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill addresses the taxation of real and personal property.
             10      Highlighted Provisions:
             11          This bill:
             12          .    applies the primary residential exemption to household furnishings, furniture, and
             13      equipment used exclusively within a rental primary residential property;
             14          .    increases a property tax exemption for personal property;
             15          .    provides that a signed statement submitted to a county assessor may only contain
             16      certain information under certain circumstances;
             17          .    addresses provisions relative to the primary residential exemption; and
             18          .    makes technical and conforming changes.
             19      Money Appropriated in this Bill:
             20          None
             21      Other Special Clauses:
             22          This bill takes effect on January 1, 2014.
             23      Utah Code Sections Affected:
             24      AMENDS:
             25          59-2-102, as last amended by Laws of Utah 2012, Chapter 240


             26          59-2-103.5, as last amended by Laws of Utah 2011, Chapter 410
             27          59-2-1105, as last amended by Laws of Utah 2012, Chapter 92
             28          59-2-1108, as last amended by Laws of Utah 2007, Chapter 306
             29          59-2-1109, as last amended by Laws of Utah 2011, Chapter 366
             30          59-2-1115, as last amended by Laws of Utah 2012, Chapter 313
             31     
             32      Be it enacted by the Legislature of the state of Utah:
             33          Section 1. Section 59-2-102 is amended to read:
             34           59-2-102. Definitions.
             35          As used in this chapter and title:
             36          (1) "Aerial applicator" means aircraft or rotorcraft used exclusively for the purpose of
             37      engaging in dispensing activities directly affecting agriculture or horticulture with an
             38      airworthiness certificate from the Federal Aviation Administration certifying the aircraft or
             39      rotorcraft's use for agricultural and pest control purposes.
             40          (2) "Air charter service" means an air carrier operation which requires the customer to
             41      hire an entire aircraft rather than book passage in whatever capacity is available on a scheduled
             42      trip.
             43          (3) "Air contract service" means an air carrier operation available only to customers
             44      who engage the services of the carrier through a contractual agreement and excess capacity on
             45      any trip and is not available to the public at large.
             46          (4) "Aircraft" is as defined in Section 72-10-102 .
             47          (5) (a) Except as provided in Subsection (5)(b), "airline" means an air carrier that:
             48          (i) operates:
             49          (A) on an interstate route; and
             50          (B) on a scheduled basis; and
             51          (ii) offers to fly one or more passengers or cargo on the basis of available capacity on a
             52      regularly scheduled route.
             53          (b) "Airline" does not include an:
             54          (i) air charter service; or
             55          (ii) air contract service.
             56          (6) "Assessment roll" means a permanent record of the assessment of property as


             57      assessed by the county assessor and the commission and may be maintained manually or as a
             58      computerized file as a consolidated record or as multiple records by type, classification, or
             59      categories.
             60          (7) (a) "Certified revenue levy" means a property tax levy that provides an amount of
             61      ad valorem property tax revenue equal to the sum of:
             62          (i) the amount of ad valorem property tax revenue to be generated statewide in the
             63      previous year from imposing a school minimum basic tax rate, as specified in Subsection
             64      53A-17a-135 (1)(a), or multicounty assessing and collecting levy, as specified in Section
             65      59-2-1602 ; and
             66          (ii) the product of:
             67          (A) new growth, as defined in:
             68          (I) Section 59-2-924 ; and
             69          (II) rules of the commission; and
             70          (B) the school minimum basic tax rate or multicounty assessing and collecting levy
             71      certified by the commission for the previous year.
             72          (b) For purposes of this Subsection (7), "ad valorem property tax revenue" does not
             73      include property tax revenue received by a taxing entity from personal property that is:
             74          (i) assessed by a county assessor in accordance with Part 3, County Assessment; and
             75          (ii) semiconductor manufacturing equipment.
             76          (c) For purposes of calculating the certified revenue levy described in this Subsection
             77      (7), the commission shall use:
             78          (i) the taxable value of real property assessed by a county assessor contained on the
             79      assessment roll;
             80          (ii) the taxable value of real and personal property assessed by the commission; and
             81          (iii) the taxable year end value of personal property assessed by a county assessor
             82      contained on the prior year's assessment roll.
             83          (8) "County-assessed commercial vehicle" means:
             84          (a) any commercial vehicle, trailer, or semitrailer which is not apportioned under
             85      Section 41-1a-301 and is not operated interstate to transport the vehicle owner's goods or
             86      property in furtherance of the owner's commercial enterprise;
             87          (b) any passenger vehicle owned by a business and used by its employees for


             88      transportation as a company car or vanpool vehicle; and
             89          (c) vehicles which are:
             90          (i) especially constructed for towing or wrecking, and which are not otherwise used to
             91      transport goods, merchandise, or people for compensation;
             92          (ii) used or licensed as taxicabs or limousines;
             93          (iii) used as rental passenger cars, travel trailers, or motor homes;
             94          (iv) used or licensed in this state for use as ambulances or hearses;
             95          (v) especially designed and used for garbage and rubbish collection; or
             96          (vi) used exclusively to transport students or their instructors to or from any private,
             97      public, or religious school or school activities.
             98          (9) (a) Except as provided in Subsection (9)(b), for purposes of Section 59-2-801 ,
             99      "designated tax area" means a tax area created by the overlapping boundaries of only the
             100      following taxing entities:
             101          (i) a county; and
             102          (ii) a school district.
             103          (b) Notwithstanding Subsection (9)(a), "designated tax area" includes a tax area created
             104      by the overlapping boundaries of:
             105          (i) the taxing entities described in Subsection (9)(a); and
             106          (ii) (A) a city or town if the boundaries of the school district under Subsection (9)(a)
             107      and the boundaries of the city or town are identical; or
             108          (B) a special service district if the boundaries of the school district under Subsection
             109      (9)(a) are located entirely within the special service district.
             110          (10) "Eligible judgment" means a final and unappealable judgment or order under
             111      Section 59-2-1330 :
             112          (a) that became a final and unappealable judgment or order no more than 14 months
             113      prior to the day on which the notice required by Section 59-2-919.1 is required to be mailed;
             114      and
             115          (b) for which a taxing entity's share of the final and unappealable judgment or order is
             116      greater than or equal to the lesser of:
             117          (i) $5,000; or
             118          (ii) 2.5% of the total ad valorem property taxes collected by the taxing entity in the


             119      previous fiscal year.
             120          (11) (a) "Escaped property" means any property, whether personal, land, or any
             121      improvements to the property, subject to taxation and is:
             122          (i) inadvertently omitted from the tax rolls, assigned to the incorrect parcel, or assessed
             123      to the wrong taxpayer by the assessing authority;
             124          (ii) undervalued or omitted from the tax rolls because of the failure of the taxpayer to
             125      comply with the reporting requirements of this chapter; or
             126          (iii) undervalued because of errors made by the assessing authority based upon
             127      incomplete or erroneous information furnished by the taxpayer.
             128          (b) Property which is undervalued because of the use of a different valuation
             129      methodology or because of a different application of the same valuation methodology is not
             130      "escaped property."
             131          (12) "Fair market value" means the amount at which property would change hands
             132      between a willing buyer and a willing seller, neither being under any compulsion to buy or sell
             133      and both having reasonable knowledge of the relevant facts. For purposes of taxation, "fair
             134      market value" shall be determined using the current zoning laws applicable to the property in
             135      question, except in cases where there is a reasonable probability of a change in the zoning laws
             136      affecting that property in the tax year in question and the change would have an appreciable
             137      influence upon the value.
             138          (13) "Farm machinery and equipment," for purposes of the exemption provided under
             139      Section 59-2-1101 , means tractors, milking equipment and storage and cooling facilities, feed
             140      handling equipment, irrigation equipment, harvesters, choppers, grain drills and planters, tillage
             141      tools, scales, combines, spreaders, sprayers, haying equipment, and any other machinery or
             142      equipment used primarily for agricultural purposes; but does not include vehicles required to be
             143      registered with the Motor Vehicle Division or vehicles or other equipment used for business
             144      purposes other than farming.
             145          (14) "Geothermal fluid" means water in any form at temperatures greater than 120
             146      degrees centigrade naturally present in a geothermal system.
             147          (15) "Geothermal resource" means:
             148          (a) the natural heat of the earth at temperatures greater than 120 degrees centigrade;
             149      and


             150          (b) the energy, in whatever form, including pressure, present in, resulting from, created
             151      by, or which may be extracted from that natural heat, directly or through a material medium.
             152          (16) (a) "Goodwill" means:
             153          (i) acquired goodwill that is reported as goodwill on the books and records:
             154          (A) of a taxpayer; and
             155          (B) that are maintained for financial reporting purposes; or
             156          (ii) the ability of a business to:
             157          (A) generate income:
             158          (I) that exceeds a normal rate of return on assets; and
             159          (II) resulting from a factor described in Subsection (16)(b); or
             160          (B) obtain an economic or competitive advantage resulting from a factor described in
             161      Subsection (16)(b).
             162          (b) The following factors apply to Subsection (16)(a)(ii):
             163          (i) superior management skills;
             164          (ii) reputation;
             165          (iii) customer relationships;
             166          (iv) patronage; or
             167          (v) a factor similar to Subsections (16)(b)(i) through (iv).
             168          (c) "Goodwill" does not include:
             169          (i) the intangible property described in Subsection (20)(a) or (b);
             170          (ii) locational attributes of real property, including:
             171          (A) zoning;
             172          (B) location;
             173          (C) view;
             174          (D) a geographic feature;
             175          (E) an easement;
             176          (F) a covenant;
             177          (G) proximity to raw materials;
             178          (H) the condition of surrounding property; or
             179          (I) proximity to markets;
             180          (iii) value attributable to the identification of an improvement to real property,


             181      including:
             182          (A) reputation of the designer, builder, or architect of the improvement;
             183          (B) a name given to, or associated with, the improvement; or
             184          (C) the historic significance of an improvement; or
             185          (iv) the enhancement or assemblage value specifically attributable to the interrelation
             186      of the existing tangible property in place working together as a unit.
             187          (17) "Governing body" means:
             188          (a) for a county, city, or town, the legislative body of the county, city, or town;
             189          (b) for a local district under Title 17B, Limited Purpose Local Government Entities -
             190      Local Districts, the local district's board of trustees;
             191          (c) for a school district, the local board of education; or
             192          (d) for a special service district under Title 17D, Chapter 1, Special Service District
             193      Act:
             194          (i) the legislative body of the county or municipality that created the special service
             195      district, to the extent that the county or municipal legislative body has not delegated authority
             196      to an administrative control board established under Section 17D-1-301 ; or
             197          (ii) the administrative control board, to the extent that the county or municipal
             198      legislative body has delegated authority to an administrative control board established under
             199      Section 17D-1-301 .
             200          (18) (a) For purposes of Section 59-2-103 :
             201          (i) "household" means the association of persons who live in the same dwelling,
             202      sharing its furnishings, facilities, accommodations, and expenses; and
             203          (ii) "household" includes married individuals, who are not legally separated, that have
             204      established domiciles at separate locations within the state.
             205          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             206      commission may make rules defining the term "domicile."
             207          (19) (a) Except as provided in Subsection (19)(c), "improvement" means a building,
             208      structure, fixture, fence, or other item that is permanently attached to land, regardless of
             209      whether the title has been acquired to the land, if:
             210          (i) (A) attachment to land is essential to the operation or use of the item; and
             211          (B) the manner of attachment to land suggests that the item will remain attached to the


             212      land in the same place over the useful life of the item; or
             213          (ii) removal of the item would:
             214          (A) cause substantial damage to the item; or
             215          (B) require substantial alteration or repair of a structure to which the item is attached.
             216          (b) "Improvement" includes:
             217          (i) an accessory to an item described in Subsection (19)(a) if the accessory is:
             218          (A) essential to the operation of the item described in Subsection (19)(a); and
             219          (B) installed solely to serve the operation of the item described in Subsection (19)(a);
             220      and
             221          (ii) an item described in Subsection (19)(a) that:
             222          (A) is temporarily detached from the land for repairs; and
             223          (B) remains located on the land.
             224          (c) Notwithstanding Subsections (19)(a) and (b), "improvement" does not include:
             225          (i) an item considered to be personal property pursuant to rules made in accordance
             226      with Section 59-2-107 ;
             227          (ii) a moveable item that is attached to land:
             228          (A) for stability only; or
             229          (B) for an obvious temporary purpose;
             230          (iii) (A) manufacturing equipment and machinery; or
             231          (B) essential accessories to manufacturing equipment and machinery;
             232          (iv) an item attached to the land in a manner that facilitates removal without substantial
             233      damage to:
             234          (A) the land; or
             235          (B) the item; or
             236          (v) a transportable factory-built housing unit as defined in Section 59-2-1502 if that
             237      transportable factory-built housing unit is considered to be personal property under Section
             238      59-2-1503 .
             239          (20) "Intangible property" means:
             240          (a) property that is capable of private ownership separate from tangible property,
             241      including:
             242          (i) money;


             243          (ii) credits;
             244          (iii) bonds;
             245          (iv) stocks;
             246          (v) representative property;
             247          (vi) franchises;
             248          (vii) licenses;
             249          (viii) trade names;
             250          (ix) copyrights; and
             251          (x) patents;
             252          (b) a low-income housing tax credit;
             253          (c) goodwill; or
             254          (d) a renewable energy tax credit or incentive, including:
             255          (i) a federal renewable energy production tax credit under Section 45, Internal Revenue
             256      Code;
             257          (ii) a federal energy credit for qualified renewable electricity production facilities under
             258      Section 48, Internal Revenue Code;
             259          (iii) a federal grant for a renewable energy property under American Recovery and
             260      Reinvestment Act of 2009, Pub. L. No. 111-5, Section 1603; and
             261          (iv) a tax credit under Subsection 59-7-614 (2)(c).
             262          (21) "Low-income housing tax credit" means:
             263          (a) a federal low-income housing tax credit under Section 42, Internal Revenue Code;
             264      or
             265          (b) a low-income housing tax credit under:
             266          (i) Section 59-7-607 ; or
             267          (ii) Section 59-10-1010 .
             268          (22) "Metalliferous minerals" includes gold, silver, copper, lead, zinc, and uranium.
             269          (23) "Mine" means a natural deposit of either metalliferous or nonmetalliferous
             270      valuable mineral.
             271          (24) "Mining" means the process of producing, extracting, leaching, evaporating, or
             272      otherwise removing a mineral from a mine.
             273          (25) (a) "Mobile flight equipment" means tangible personal property that is:


             274          (i) owned or operated by an:
             275          (A) air charter service;
             276          (B) air contract service; or
             277          (C) airline; and
             278          (ii) (A) capable of flight;
             279          (B) attached to an aircraft that is capable of flight; or
             280          (C) contained in an aircraft that is capable of flight if the tangible personal property is
             281      intended to be used:
             282          (I) during multiple flights;
             283          (II) during a takeoff, flight, or landing; and
             284          (III) as a service provided by an air charter service, air contract service, or airline.
             285          (b) (i) "Mobile flight equipment" does not include a spare part other than a spare
             286      engine that is rotated:
             287          (A) at regular intervals; and
             288          (B) with an engine that is attached to the aircraft.
             289          (ii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             290      commission may make rules defining the term "regular intervals."
             291          (26) "Nonmetalliferous minerals" includes, but is not limited to, oil, gas, coal, salts,
             292      sand, rock, gravel, and all carboniferous materials.
             293          (27) "Personal property" includes:
             294          (a) every class of property as defined in Subsection (28) which is the subject of
             295      ownership and not included within the meaning of the terms "real estate" and "improvements";
             296          (b) gas and water mains and pipes laid in roads, streets, or alleys;
             297          (c) bridges and ferries;
             298          (d) livestock which, for the purposes of the exemption provided under Section
             299      59-2-1112 , means all domestic animals, honeybees, poultry, fur-bearing animals, and fish; and
             300          (e) outdoor advertising structures as defined in Section 72-7-502 .
             301          (28) (a) "Property" means property that is subject to assessment and taxation according
             302      to its value.
             303          (b) "Property" does not include intangible property as defined in this section.
             304          (29) "Public utility," for purposes of this chapter, means the operating property of a


             305      railroad, gas corporation, oil or gas transportation or pipeline company, coal slurry pipeline
             306      company, electrical corporation, telephone corporation, sewerage corporation, or heat
             307      corporation where the company performs the service for, or delivers the commodity to, the
             308      public generally or companies serving the public generally, or in the case of a gas corporation
             309      or an electrical corporation, where the gas or electricity is sold or furnished to any member or
             310      consumers within the state for domestic, commercial, or industrial use. Public utility also
             311      means the operating property of any entity or person defined under Section 54-2-1 except water
             312      corporations.
             313          (30) (a) Subject to Subsection (30)(b), "qualifying exempt primary residential rental
             314      personal property" means household furnishings, furniture, and equipment that:
             315          (i) are used exclusively within a dwelling unit that is the primary residence of a tenant;
             316      S. [ and ] .S
             317          (ii) are owned by the owner of the dwelling unit that is the primary residence of a
             318      tenant; S. and .S
             319          (iii) after applying the residential exemption described in Section 59-2-103 , are exempt
             320      from taxation under this chapter in accordance with Subsection 59-2-1115 (2).
             321          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             322      commission may by rule define the term "dwelling unit" for purposes of this Subsection (30)
             323      and Subsection (32).
             324          [(30)] (31) "Real estate" or "real property" includes:
             325          (a) the possession of, claim to, ownership of, or right to the possession of land;
             326          (b) all mines, minerals, and quarries in and under the land, all timber belonging to
             327      individuals or corporations growing or being on the lands of this state or the United States, and
             328      all rights and privileges appertaining to these; and
             329          (c) improvements.
             330          [(31)] (32) (a) Subject to Subsection (32)(b), "residential property," for the purposes of
             331      the reductions and adjustments under this chapter, means any property used for residential
             332      purposes as a primary residence. [It]
             333          (b) Subject to Subsection (32)(c), "residential property":
             334          (i) except as provided in Subsection (32)(b)(ii), includes household furnishings,
             335      furniture, and equipment if the household furnishings, furniture, and equipment are:


             336          (A) used exclusively within a dwelling unit that is the primary residence of a tenant;
             337      and
             338          (B) owned by the owner of the dwelling unit that is the primary residence of a tenant;
             339      and
             340          (ii) does not include property used for transient residential use [or condominiums used
             341      in rental pools].
             342          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             343      commission may by rule define the term "dwelling unit" for purposes of Subsection (30) and
             344      this Subsection (32).
             345          [(32)] (33) (a) "State-assessed commercial vehicle" means:
             346          (i) any commercial vehicle, trailer, or semitrailer which operates interstate or intrastate
             347      to transport passengers, freight, merchandise, or other property for hire; or
             348          (ii) any commercial vehicle, trailer, or semitrailer which operates interstate and
             349      transports the vehicle owner's goods or property in furtherance of the owner's commercial
             350      enterprise.
             351          (b) "State-assessed commercial vehicle" does not include vehicles used for hire which
             352      are specified in Subsection (8)(c) as county-assessed commercial vehicles.
             353          [(33)] (34) "Taxable value" means fair market value less any applicable reduction
             354      allowed for residential property under Section 59-2-103 .
             355          [(34)] (35) "Tax area" means a geographic area created by the overlapping boundaries
             356      of one or more taxing entities.
             357          [(35)] (36) "Taxing entity" means any county, city, town, school district, special taxing
             358      district, local district under Title 17B, Limited Purpose Local Government Entities - Local
             359      Districts, or other political subdivision of the state with the authority to levy a tax on property.
             360          [(36)] (37) "Tax roll" means a permanent record of the taxes charged on property, as
             361      extended on the assessment roll and may be maintained on the same record or records as the
             362      assessment roll or may be maintained on a separate record properly indexed to the assessment
             363      roll. It includes tax books, tax lists, and other similar materials.
             364          Section 2. Section 59-2-103.5 is amended to read:
             365           59-2-103.5. Procedures to obtain an exemption for residential property --
             366      Procedure if property owner or property no longer qualifies to receive a residential


             367      exemption.
             368          (1) Subject to the other provisions of this section, a county legislative body may by
             369      ordinance require that in order for residential property to be allowed a residential exemption in
             370      accordance with Section 59-2-103 , an owner of the residential property shall file with the
             371      county board of equalization a statement:
             372          (a) on a form prescribed by the commission by rule;
             373          (b) signed by all of the owners of the residential property;
             374          (c) certifying that the residential property is residential property; and
             375          (d) containing other information as required by the commission by rule.
             376          (2) (a) Subject to Section 59-2-103 and except as provided in Subsection (3), a county
             377      board of equalization shall allow an owner described in Subsection (1) a residential exemption
             378      for the residential property described in Subsection (1) if:
             379          (i) the county legislative body enacts the ordinance described in Subsection (1); and
             380          (ii) the county board of equalization determines that the requirements of Subsection (1)
             381      are met.
             382          (b) A county board of equalization may require an owner of the residential property
             383      described in Subsection (1) to file the statement described in Subsection (1) only if:
             384          (i) that residential property was ineligible for the residential exemption authorized
             385      under Section 59-2-103 during the calendar year immediately preceding the calendar year for
             386      which the owner is seeking to claim the residential exemption for that residential property;
             387          (ii) an ownership interest in that residential property changes; or
             388          (iii) the county board of equalization determines that there is reason to believe that that
             389      residential property no longer qualifies for the residential exemption in accordance with
             390      Section 59-2-103 .
             391          (3) Notwithstanding Subsection (2)(a), if a county legislative body does not enact an
             392      ordinance requiring an owner to file a statement in accordance with this section, the county
             393      board of equalization:
             394          (a) may not require an owner to file a statement for residential property to be eligible
             395      for a residential exemption in accordance with Section 59-2-103 ; and
             396          (b) shall allow a residential exemption for residential property in accordance with
             397      Section 59-2-103 .


             398          (4) (a) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
             399      the commission shall make rules providing:
             400          (i) the form for the statement described in Subsection (1); and
             401          (ii) the contents of the form for the statement described in Subsection (1).
             402          (b) The commission shall make the form described in Subsection (4)(a) available to
             403      counties.
             404          (5) Except as provided in Subsection (6), if a property owner no longer qualifies to
             405      receive a residential exemption authorized under Section 59-2-103 for that property owner's
             406      primary residence, the property owner shall:
             407          (a) file a written statement with the county board of equalization of the county in which
             408      the property is located:
             409          (i) on a form provided by the county board of equalization; and
             410          (ii) notifying the county board of equalization that the property owner no longer
             411      qualifies to receive a residential exemption authorized under Section 59-2-103 for that property
             412      owner's primary residence; and
             413          (b) declare on the property owner's individual income tax return under Chapter 10,
             414      Individual Income Tax Act, for the taxable year for which the property owner no longer
             415      qualifies to receive a residential exemption authorized under Section 59-2-103 for that property
             416      owner's primary residence, that the property owner no longer qualifies to receive a residential
             417      exemption authorized under Section 59-2-103 for that property owner's primary residence.
             418          (6) A property owner is not required to file a written statement or make the declaration
             419      described in Subsection (5) if the property owner:
             420          (a) changes primary residences;
             421          (b) qualified to receive a residential exemption authorized under Section 59-2-103 for
             422      the residence that was the property owner's former primary residence; and
             423          (c) qualifies to receive a residential exemption authorized under Section 59-2-103 for
             424      the residence that is the property owner's current primary residence.
             425          (7) (a) Subsections (2) through (6) do not apply to qualifying exempt primary
             426      residential rental personal property.
             427          (b) (i) For the first calendar year in which a taxpayer qualifies for an exemption
             428      described in Subsection (2), a county assessor may require the taxpayer to file a signed


             429      statement described in Section 59-2-306 .
             430          (ii) Notwithstanding Section 59-2-306 , for a calendar year after the calendar year
             431      described in Subsection (7)(b)(i) in which a taxpayer qualifies for an exemption described in
             432      Subsection 59-2-1115 (2) for qualifying exempt primary residential rental personal property, a
             433      signed statement described in Section 59-2-306 with respect to the qualifying exempt primary
             434      residential rental personal property may only require the taxpayer to certify, under penalty of
             435      perjury, that the taxpayer qualifies for the exemption under Subsection 59-2-1115 (2).
             436          Section 3. Section 59-2-1105 is amended to read:
             437           59-2-1105. Application for United States Armed Forces exemption -- Rulemaking
             438      authority -- Statement -- County authority to make refunds.
             439          (1) (a) Except as provided in Subsection 59-2-1101 (2)(c), an exemption under Section
             440      59-2-1104 may be allowed only if the interest of the claimant is on record on January 1 of the
             441      year the exemption is claimed.
             442          (b) If the claimant has an interest in real property under a contract, the exemption under
             443      Section 59-2-1104 may be allowed if it is proved to the satisfaction of the county that the
             444      claimant is:
             445          (i) the purchaser under the contract; and
             446          (ii) obligated to pay the taxes on the property beginning January 1 of the year the
             447      exemption is claimed.
             448          (c) If the claimant is the grantor of a trust holding title to real or tangible personal
             449      property on which an exemption under Section 59-2-1104 is claimed, the claimant may claim
             450      the portion of the exemption under Section 59-2-1104 and be treated as the owner of that
             451      portion of the property held in trust for which the claimant proves to the satisfaction of the
             452      county that:
             453          (i) title to the portion of the trust will revest in the claimant upon the exercise of a
             454      power:
             455          (A) by:
             456          (I) the claimant as grantor of the trust;
             457          (II) a nonadverse party; or
             458          (III) both the claimant and a nonadverse party; and
             459          (B) regardless of whether the power is a power:


             460          (I) to revoke;
             461          (II) to terminate;
             462          (III) to alter;
             463          (IV) to amend; or
             464          (V) to appoint;
             465          (ii) the claimant is obligated to pay the taxes on that portion of the trust property
             466      beginning January 1 of the year the claimant claims the exemption; and
             467          (iii) the claimant meets the requirements under this part for the exemption.
             468          (2) (a) (i) A claimant applying for an exemption under Section 59-2-1104 shall file an
             469      application:
             470          (A) with the county in which that claimant resides; and
             471          (B) except as provided in Subsection (2)(b) or (e), on or before September 1 of the year
             472      in which that claimant is applying for the exemption in accordance with this section.
             473          (ii) A county shall provide a claimant who files an application for an exemption in
             474      accordance with this section with a receipt:
             475          (A) stating that the county received the claimant's application; and
             476          (B) no later than 30 days after the day on which the claimant filed the application in
             477      accordance with this section.
             478          (b) Notwithstanding Subsection (2)(a)(i)(B) or (2)(e):
             479          (i) subject to Subsection (2)(b)(iv), for a claimant who applies for an exemption under
             480      Section 59-2-1104 on or after January 1, 2004, a county shall extend the deadline for filing the
             481      application required by Subsection (2)(a) to September 1 of the year after the year the claimant
             482      would otherwise be required to file the application under Subsection (2)(a)(i)(B) if:
             483          (A) on or after January 1, 2004, a military entity issues a written decision that the:
             484          (I) veteran has a disability; or
             485          (II) deceased veteran with a disability with respect to whom the claimant applies for a
             486      veteran's exemption had a disability at the time the deceased veteran with a disability died; and
             487          (B) the date the written decision described in Subsection (2)(b)(i)(A) takes effect is in
             488      any year prior to the current calendar year;
             489          (ii) subject to Subsections (2)(b)(iv) and (2)(d), for a claimant who applies for an
             490      exemption under Section 59-2-1104 on or after January 1, 2004, a county shall allow the


             491      claimant to amend the application required by Subsection (2)(a) on or before September 1 of
             492      the year after the year the claimant filed the application under Subsection (2)(a)(i)(B) if:
             493          (A) on or after January 1, 2004, a military entity issues a written decision that the
             494      percentage of disability has changed for the:
             495          (I) veteran with a disability; or
             496          (II) deceased veteran with a disability with respect to whom the claimant applies for the
             497      exemption; and
             498          (B) the date the written decision described in Subsection (2)(b)(ii)(A) takes effect is in
             499      any year prior to the current calendar year;
             500          (iii) subject to Subsections (2)(b)(iv) and (2)(d), for a claimant who applies for an
             501      exemption under Section 59-2-1104 on or after January 1, 2004, a county shall extend the
             502      deadline for filing the application required by Subsection (2)(a) to September 1 of the year after
             503      the year the claimant would otherwise be required to file the application under Subsection
             504      (2)(a)(i)(B) if the county legislative body determines that:
             505          (A) the claimant or a member of the claimant's immediate family had an illness or
             506      injury that prevented the claimant from filing the application on or before the deadline for
             507      filing the application established in Subsection (2)(a)(i)(B);
             508          (B) a member of the claimant's immediate family died during the calendar year the
             509      claimant was required to file the application under Subsection (2)(a)(i)(B);
             510          (C) the claimant was not physically present in the state for a time period of at least six
             511      consecutive months during the calendar year the claimant was required to file the application
             512      under Subsection (2)(a)(i)(B); or
             513          (D) the failure of the claimant to file the application on or before the deadline for filing
             514      the application established in Subsection (2)(a)(i)(B):
             515          (I) would be against equity or good conscience; and
             516          (II) was beyond the reasonable control of the claimant; and
             517          (iv) a county may extend the deadline for filing an application or amending an
             518      application under this Subsection (2) until December 31 if the county finds that good cause
             519      exists to extend the deadline.
             520          (c) The following shall accompany the initial application for an exemption under
             521      Section 59-2-1104 :


             522          (i) a copy of the veteran's certificate of discharge from military service; or
             523          (ii) other satisfactory evidence of eligible military service, including orders for
             524      qualifying active duty military service, if applicable.
             525          (d) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             526      commission may by rule:
             527          (i) establish procedures and requirements for amending an application under
             528      Subsection (2)(b)(ii);
             529          (ii) for purposes of Subsection (2)(b)(iii), define the terms:
             530          (A) "immediate family"; or
             531          (B) "physically present"; or
             532          (iii) for purposes of Subsection (2)(b)(iii), prescribe the circumstances under which the
             533      failure of a claimant to file an application on or before the deadline for filing the application
             534      established in Subsection (2)(a)(i)(B):
             535          (A) would be against equity or good conscience; and
             536          (B) is beyond the reasonable control of a claimant.
             537          (e) Except as provided in Subsection (2)(g), if a claimant has on file with the county
             538      the application described in Subsection (2)(a), the county may not require the claimant to file
             539      another application described in Subsection (2)(a) unless:
             540          (i) the claimant applies all or a portion of an exemption under Section 59-2-1104 to any
             541      tangible personal property;
             542          (ii) the percentage of disability has changed for the:
             543          (A) veteran with a disability; or
             544          (B) deceased veteran with a disability with respect to whom a claimant applies for a
             545      veteran's exemption under this section;
             546          (iii) the veteran with a disability dies;
             547          (iv) the claimant's ownership interest in the claimant's primary residence changes;
             548          (v) the claimant's occupancy of the primary residence for which the claimant claims an
             549      exemption under Section 59-2-1104 changes; or
             550          (vi) the claimant who files an application for an exemption under Section 59-2-1104
             551      with respect to a deceased veteran with a disability or veteran who was killed in action or died
             552      in the line of duty is a person other than the claimant who filed the application described in


             553      Subsection (2)(a) for the exemption:
             554          (A) for the calendar year immediately preceding the current calendar year; and
             555          (B) with respect to that deceased veteran with a disability or veteran who was killed in
             556      action or died in the line of duty.
             557          (f) The county may verify that the real property that is residential property for which
             558      the claimant claims an exemption under Section 59-2-1104 is the claimant's primary residence.
             559          (g) A member of an active component of the United States Armed Forces or reserve
             560      component of the United States Armed Forces who performed qualifying active duty military
             561      service shall:
             562          (i) file the application described in Subsection (2)(a) in the year after the year during
             563      which the member completes the qualifying active duty military service; and
             564          (ii) if the member meets the requirements of Section 59-2-1104 and this section to
             565      receive an exemption under Section 59-2-1104 , claim one exemption only in the year the
             566      member files the application described in Subsection (2)(g)(i).
             567          (3) (a) (i) Subject to Subsection (3)(a)(ii), a claimant except for a claimant described in
             568      Subsection (2)(g) who files an application for an exemption under Section 59-2-1104 shall
             569      have on file with the county a statement:
             570          (A) issued by a military entity; and
             571          (B) listing the percentage of disability for the veteran with a disability or deceased
             572      veteran with a disability with respect to whom a claimant applies for the exemption.
             573          (ii) If a claimant except for a claimant described in Subsection (2)(g) has on file with
             574      the county the statement described in Subsection (3)(a)(i), the county may not require the
             575      claimant to file another statement described in Subsection (3)(a)(i) unless:
             576          (A) the claimant who files an application under this section for an exemption under
             577      Section 59-2-1104 with respect to a deceased veteran with a disability or veteran who was
             578      killed in action or died in the line of duty is a person other than the claimant who filed the
             579      statement described in Subsection (3)(a)(i) for the exemption:
             580          (I) for the calendar year immediately preceding the current calendar year; and
             581          (II) with respect to that deceased veteran with a disability or veteran who was killed in
             582      action or died in the line of duty; or
             583          (B) the percentage of disability has changed for a:


             584          (I) veteran with a disability; or
             585          (II) deceased veteran with a disability with respect to whom the claimant applies for an
             586      exemption under Section 59-2-1104 .
             587          (b) For a claimant filing an application in accordance with Subsection (2)(b)(i), the
             588      claimant shall include with the application required by Subsection (2) a statement issued by a
             589      military entity listing the date the written decision described in Subsection (2)(b)(i)(A) takes
             590      effect.
             591          (c) For a claimant amending an application in accordance with Subsection (2)(b)(ii),
             592      the claimant shall provide to the county a statement issued by a military entity listing the date
             593      the written decision described in Subsection (2)(b)(ii)(A) takes effect.
             594          (4) (a) For purposes of this Subsection (4):
             595          (i) "Property taxes due" means the taxes due on a claimant's property:
             596          (A) for which an exemption under Section 59-2-1104 is granted by a county; and
             597          (B) for the calendar year for which the exemption is granted.
             598          (ii) "Property taxes paid" is an amount equal to the sum of:
             599          (A) the amount of the property taxes the claimant paid for the calendar year for which
             600      the claimant is applying for an exemption under Section 59-2-1104 ; and
             601          (B) the exemption the county granted for the calendar year described in Subsection
             602      (4)(a)(ii)(A).
             603          (b) A county granting an exemption under Section 59-2-1104 to a claimant shall refund
             604      to that claimant an amount equal to the amount by which the claimant's property taxes paid
             605      exceed the claimant's property taxes due, if that amount is $1 or more.
             606          Section 4. Section 59-2-1108 is amended to read:
             607           59-2-1108. Indigent persons -- Deferral of taxes -- Interest rate -- Treatment of
             608      deferred taxes.
             609          (1) (a) The county may, after giving notice, defer any tax levied on real property that is
             610      residential property, subject to the conditions of Section 59-2-1109 .
             611          (b) If the owner of the property described in Subsection (1)(a) is poor, the property may
             612      not be subjected to a tax sale during the period of deferment.
             613          (2) (a) Taxes deferred by the county accumulate with interest as a lien against the
             614      property until the property is sold or otherwise disposed of.


             615          (b) Deferred taxes under this section:
             616          (i) bear interest at an interest rate equal to the lesser of:
             617          (A) 6%; or
             618          (B) the federal funds rate target:
             619          (I) established by the Federal Open Markets Committee; and
             620          (II) that exists on the January 1 immediately preceding the day on which the taxes are
             621      deferred; and
             622          (ii) have the same status as a lien under Sections 59-2-1301 and 59-2-1325 .
             623          (3) Deferral may be granted by the county at any time if:
             624          (a) the holder of any mortgage or trust deed outstanding on the property gives written
             625      approval of the application; and
             626          (b) the applicant is not the owner of income producing assets that could be liquidated
             627      to pay the tax.
             628          (4) Any assets transferred to relatives in the prior three-year period shall be considered
             629      by the county in making the county's determination.
             630          Section 5. Section 59-2-1109 is amended to read:
             631           59-2-1109. Indigent persons -- Deferral or abatement -- Application -- County
             632      authority to make refunds.
             633          (1) A person under the age of 65 years is not eligible for a deferral or abatement
             634      provided for poor people under Sections 59-2-1107 and 59-2-1108 unless:
             635          (a) the county finds that extreme hardship would prevail if the grants were not made; or
             636          (b) the person has a disability.
             637          (2) (a) An application for the deferral or abatement shall be filed on or before
             638      September 1 with the county in which the property is located.
             639          (b) The application shall include a signed statement setting forth the eligibility of the
             640      applicant for the deferral or abatement.
             641          (c) Both husband and wife shall sign the application if the husband and wife seek a
             642      deferral or abatement on a residence:
             643          (i) in which they both reside; and
             644          (ii) which they own as joint tenants.
             645          (d) A county may extend the deadline for filing under Subsection (2)(a) until December


             646      31 if the county finds that good cause exists to extend the deadline.
             647          (3) (a) For purposes of this Subsection (3):
             648          (i) "Property taxes due" means the taxes due on a person's property:
             649          (A) for which an abatement is granted by a county under Section 59-2-1107 ; and
             650          (B) for the calendar year for which the abatement is granted.
             651          (ii) "Property taxes paid" is an amount equal to the sum of:
             652          (A) the amount of the property taxes the person paid for the taxable year for which the
             653      person is applying for the abatement; and
             654          (B) the amount of the abatement the county grants under Section 59-2-1107 .
             655          (b) A county granting an abatement to a person under Section 59-2-1107 shall refund
             656      to that person an amount equal to the amount by which the person's property taxes paid exceed
             657      the person's property taxes due, if that amount is $1 or more.
             658          (4) For purposes of this section:
             659          (a) a poor person is any person:
             660          (i) whose total household income as defined in Section 59-2-1202 is less than the
             661      maximum household income certified to a homeowner's credit under Subsection 59-2-1208 (1);
             662          (ii) who resides for not less than 10 months of each year in the residence for which the
             663      tax relief, deferral, or abatement is requested; and
             664          (iii) who is unable to meet the tax assessed on the person's real property that is
             665      residential property as the tax becomes due; and
             666          (b) "residence" includes a mobile home as defined under Section 70D-2-401 .
             667          (5) If the claimant is the grantor of a trust holding title to real or tangible personal
             668      property on which an abatement or deferral is claimed, the claimant may claim the portion of
             669      the abatement or deferral under Section 59-2-1107 or 59-2-1108 and be treated as the owner of
             670      that portion of the property held in trust for which the claimant proves to the satisfaction of the
             671      county that:
             672          (a) title to the portion of the trust will revest in the claimant upon the exercise of a
             673      power:
             674          (i) by:
             675          (A) the claimant as grantor of the trust;
             676          (B) a nonadverse party; or


             677          (C) both the claimant and a nonadverse party; and
             678          (ii) regardless of whether the power is a power:
             679          (A) to revoke;
             680          (B) to terminate;
             681          (C) to alter;
             682          (D) to amend; or
             683          (E) to appoint;
             684          (b) the claimant is obligated to pay the taxes on that portion of the trust property
             685      beginning January 1 of the year the claimant claims the abatement or deferral; and
             686          (c) the claimant meets the requirements under this part for the abatement or deferral.
             687          (6) The commission shall adopt rules to implement this section.
             688          (7) Any poor person may qualify for:
             689          (a) the deferral of taxes under Section 59-2-1108 ;
             690          (b) if the person meets the requisites of this section, for the abatement of taxes under
             691      Section 59-2-1107 ; or
             692          (c) both:
             693          (i) the deferral described in Subsection (7)(a); and
             694          (ii) the abatement described in Subsection (7)(b).
             695          Section 6. Section 59-2-1115 is amended to read:
             696           59-2-1115. Exemption of certain tangible personal property.
             697          (1) For purposes of this section:
             698          (a) (i) "Acquisition cost" means all costs required to put an item of tangible personal
             699      property into service; and
             700          (ii) includes:
             701          (A) the purchase price for a new or used item;
             702          (B) the cost of freight and shipping;
             703          (C) the cost of installation, engineering, erection, or assembly; and
             704          (D) sales and use taxes.
             705          (b) (i) "Item of taxable tangible personal property" does not include an improvement to
             706      real property or a part that will become an improvement.
             707          (ii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the


             708      commission may make rules defining the term "item of taxable tangible personal property."
             709          (c) (i) "Taxable tangible personal property" means tangible personal property that is
             710      subject to taxation under this chapter.
             711          (ii) "Taxable tangible personal property" does not include:
             712          (A) tangible personal property required by law to be registered with the state before it
             713      is used:
             714          (I) on a public highway;
             715          (II) on a public waterway;
             716          (III) on public land; or
             717          (IV) in the air;
             718          (B) a mobile home as defined in Section 41-1a-102 ; or
             719          (C) a manufactured home as defined in Section 41-1a-102 .
             720          (2) (a) The taxable tangible personal property of a taxpayer is exempt from taxation if
             721      the taxable tangible personal property has a total aggregate [fair market] taxable value per
             722      county of [$3,500] $10,000 or less.
             723          (b) [An] In addition to the exemption under Subsection (2)(a), an item of taxable
             724      tangible personal property, except for an item of noncapitalized personal property as defined in
             725      Section 59-2-108 , is exempt from taxation if the item of taxable tangible personal property:
             726          (i) has an acquisition cost of $1,000 or less;
             727          (ii) has reached a percent good of 15% or less according to a personal property
             728      schedule published by the commission pursuant to Section 59-2-107 ; and
             729          (iii) is in a personal property schedule with a residual value of 15% or less.
             730          (3) (a) For calendar years beginning on or after January 1, [2008] 2015, the
             731      commission shall increase the dollar amount described in Subsection (2)(a):
             732          (i) by a percentage equal to the percentage difference between the consumer price
             733      index for the preceding calendar year and the consumer price index for calendar year [2006]
             734      2013; and
             735          (ii) up to the nearest $100 increment.
             736          (b) For purposes of this Subsection (3), the commission shall calculate the consumer
             737      price index as provided in Sections 1(f)(4) and 1(f)(5), Internal Revenue Code.
             738          (c) If the percentage difference under Subsection (3)(a)(i) is zero or a negative


             739      percentage, the consumer price index increase for the year is zero.
             740          (4) (a) For the first calendar year in which a taxpayer qualifies for an exemption
             741      described in Subsection (2), a county assessor may require the taxpayer to file a signed
             742      statement described in Section 59-2-306 .
             743          (b) Notwithstanding Section 59-2-306 and subject to Subsection (5), for a calendar
             744      year in which a taxpayer qualifies for an exemption described in Subsection (2) after the
             745      calendar year described in Subsection (4)(a), a signed statement described in Section 59-2-306
             746      with respect to the taxable tangible personal property that is exempt under Subsection (2) may
             747      only require the taxpayer to certify, under penalty of perjury, that the taxpayer qualifies for the
             748      exemption under Subsection (2).
             749          (5) A signed statement with respect to qualifying exempt primary residential rental
             750      personal property is as provided in Section 59-2-103.5 .
             751          [(4)] (6) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
             752      Act, the commission may make rules to administer this section and provide for uniform
             753      implementation.
             754          Section 7. Effective date.
             755          This bill takes effect on January 1, 2014.


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