1     
VETERANS TAX AMENDMENTS

2     
2017 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Val L. Peterson

5     
Senate Sponsor: Curtis S. Bramble

6     

7     LONG TITLE
8     General Description:
9          This bill amends a property tax exemption for certain members of the military.
10     Highlighted Provisions:
11          This bill:
12          ▸      amends the definition of qualifying active duty military service to modify the time
13     period during which a military member shall complete active duty military service
14     to be eligible for a property tax exemption;
15          ▸     modifies the application requirements for claiming the qualifying active duty
16     military service property tax exemption; and
17          ▸     makes technical changes.
18     Money Appropriated in this Bill:
19          None
20     Other Special Clauses:
21          This bill provides a special effective date.
22     Utah Code Sections Affected:
23     AMENDS:
24          59-2-1104, as last amended by Laws of Utah 2015, Chapter 261
25          59-2-1105, as last amended by Laws of Utah 2015, Chapter 261
26     

27     Be it enacted by the Legislature of the state of Utah:
28          Section 1. Section 59-2-1104 is amended to read:
29          59-2-1104. Definitions -- Armed forces exemption -- Amount of armed forces

30     exemption.
31          (1) As used in this section and Section 59-2-1105:
32          (a) "Active component of the United States Armed Forces" [is as] means the same as
33     that term is defined in Section 59-10-1027.
34          (b) "Adjusted taxable value limit" means:
35          (i) for the calendar year that begins on January 1, 2015, $252,126; and
36          (ii) for each calendar year after the calendar year described in Subsection (1)(b)(i), the
37     amount of the adjusted taxable value limit for the previous year, plus an amount calculated by
38     multiplying the amount of the adjusted taxable value limit for the previous year by the actual
39     percent change in the consumer price index during the previous calendar year.
40          (c) "Claimant" means:
41          (i) a veteran with a disability who files an application under Section 59-2-1105 for an
42     exemption under this section;
43          (ii) the unmarried surviving spouse:
44          (A) of a:
45          (I) deceased veteran with a disability; or
46          (II) veteran who was killed in action or died in the line of duty; and
47          (B) who files an application under Section 59-2-1105 for an exemption under this
48     section;
49          (iii) a minor orphan:
50          (A) of a:
51          (I) deceased veteran with a disability; or
52          (II) veteran who was killed in action or died in the line of duty; and
53          (B) who files an application under Section 59-2-1105 for an exemption under this
54     section; or
55          (iv) a member of an active component of the United States Armed Forces or a reserve
56     component of the United States Armed Forces who performed qualifying active duty military
57     service.

58          (d) "Consumer price index" is as described in Section 1(f)(4), Internal Revenue Code,
59     and defined in Section 1(f)(5), Internal Revenue Code.
60          (e) "Deceased veteran with a disability" means a deceased [person] individual who was
61     a veteran with a disability at the time the [person] individual died.
62          (f) "Military entity" means:
63          (i) the federal Department of Veterans Affairs;
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) "Property taxes due" means the taxes due on a claimant's property:
67          (i) with respect to which a county grants an exemption under this section; and
68          (ii) for the calendar year for which the county grants an exemption under this section.
69          (h) "Property taxes paid" is an amount equal to the sum of:
70          (i) the amount of the property taxes the claimant paid for the calendar year for which
71     the claimant is applying for an exemption under this section; and
72          (ii) the exemption the county grants for the calendar year described in Subsection
73     (1)(h)(i).
74          (i) "Qualifying active duty military service" means[: (i)] at least 200 days [in a calendar
75     year], regardless of whether consecutive, in any continuous 365-day period of active duty
76     military service outside the state in an active component of the United States Armed Forces or
77     a reserve component of the United States Armed Forces[; or] if the days of active duty military
78     service:
79          (i) were completed in the year before an individual applies for exemption under this
80     section in accordance with Section 59-2-1105; and
81          (ii) have not previously been counted as qualifying active duty military service for
82     purposes of qualifying for an exemption under this section or applying for the exemption under
83     Section 59-2-1105.
84          [(ii) the completion of at least 200 consecutive days of active duty military service
85     outside the state:]

86          [(A) in an active component of the United States Armed Forces or a reserve component
87     of the United States Armed Forces; and]
88          [(B) that began in the prior year, if those days of active duty military service outside the
89     state in the prior year were not counted as qualifying active duty military service for purposes
90     of this section or Section 59-2-1105 in the prior year.]
91          (j) "Reserve component of the United States Armed Forces" [is as] means the same as
92     that term is defined in Section 59-10-1027.
93          (k) "Residence" [is as] means the same as that term is defined in Section 59-2-1202,
94     except that a rented dwelling is not considered to be a residence.
95          (l) "Veteran who was killed in action or died in the line of duty" means [a person] an
96     individual who was killed in action or died in the line of duty in an active component of the
97     United States Armed Forces or a reserve component of the United States Armed Forces,
98     regardless of whether that [person] individual had a disability at the time that [person]
99     individual was killed in action or died in the line of duty.
100          (m) "Veteran with a disability" means [a person] an individual with a disability who,
101     during military training or a military conflict, acquired a disability in the line of duty in an
102     active component of the United States Armed Forces or a reserve component of the United
103     States Armed Forces, as determined by a military entity.
104          (2) (a) Subject to Subsection (2)(c), the amount of taxable value of the property
105     described in Subsection (2)(b) is exempt from taxation as calculated under Subsections (3)
106     through (6) if the property described in Subsection (2)(b) is owned by:
107          (i) a veteran with a disability;
108          (ii) the unmarried surviving spouse or a minor orphan of a:
109          (A) deceased veteran with a disability; or
110          (B) veteran who was killed in action or died in the line of duty; or
111          (iii) a member of an active component of the United States Armed Forces or a reserve
112     component of the United States Armed Forces who performed qualifying active duty military
113     service.

114          (b) Subsection (2)(a) applies to the following property:
115          (i) the claimant's primary residence;
116          (ii) for a claimant described in Subsection (2)(a)(i) or (ii), tangible personal property
117     that:
118          (A) is held exclusively for personal use; and
119          (B) is not used in a trade or business; or
120          (iii) for a claimant described in Subsection (2)(a)(i) or (ii), a combination of
121     Subsections (2)(b)(i) and (ii).
122          (c) For purposes of this section, property is considered to be the primary residence of [a
123     person] an individual described in Subsection (2)(a)(i) or (iii) who does not reside in the
124     residence if the [person] individual:
125          (i) does not reside in the residence because the [person] individual is admitted as an
126     inpatient at a health care facility as defined in Section 26-55-102; and
127          (ii) otherwise meets the requirements of this section and Section 59-2-1105 to receive
128     an exemption under this section.
129          (3) Except as provided in Subsection (4) or (5), the amount of taxable value of property
130     described in Subsection (2)(b) that is exempt under Subsection (2)(a) is:
131          (a) as described in Subsection (6), if the property is owned by:
132          (i) a veteran with a disability;
133          (ii) the unmarried surviving spouse of a deceased veteran with a disability; or
134          (iii) a minor orphan of a deceased veteran with a disability; or
135          (b) equal to the total taxable value of the claimant's property described in Subsection
136     (2)(b) if the property is owned by:
137          (i) the unmarried surviving spouse of a veteran who was killed in action or died in the
138     line of duty;
139          (ii) a minor orphan of a veteran who was killed in action or died in the line of duty; or
140          (iii) a member of an active component of the United States Armed Forces or a reserve
141     component of the United States Armed Forces who performed qualifying active duty military

142     service.
143          (4) (a) Subject to Subsections (4)(b) and (c), an exemption may not be allowed under
144     this section if the percentage of disability listed on the statement described in Subsection
145     59-2-1105(3)(a) is less than 10%.
146          (b) Subsection (4)(a) does not apply to a claimant described in Subsection (2)(a)(iii).
147          (c) A veteran with a disability is considered to have a 100% disability, regardless of the
148     percentage of disability listed on a statement described in Subsection 59-2-1105(3)(a), if the
149     United States Department of Veterans Affairs certifies the veteran in the classification of
150     individual unemployability.
151          (5) A claimant who is the unmarried surviving spouse or minor orphan of a deceased
152     veteran with a disability may claim an exemption for the total value of the property described
153     in Subsection (2)(b) if:
154          (a) the deceased veteran with a disability served in the military service of the United
155     States or the state prior to January 1, 1921; and
156          (b) the percentage of disability listed on the statement described in Subsection
157     59-2-1105(3)(a) for the deceased veteran with a disability is 10% or more.
158          (6) (a) Except as provided in Subsection (6)(b), the amount of the taxable value of the
159     property described in Subsection (2)(b) that is exempt under Subsection (3)(a) is equal to the
160     percentage of disability listed on the statement described in Subsection 59-2-1105(3)(a)
161     multiplied by the adjusted taxable value limit.
162          (b) The amount of the taxable value of the property described in Subsection (2)(b) that
163     is exempt under Subsection (3)(a) may not be greater than the taxable value of the property
164     described in Subsection (2)(b).
165          (7) For purposes of this section and Section 59-2-1105, [a person] an individual who
166     received an honorable or general discharge from military service of an active component of the
167     United States Armed Forces or a reserve component of the United States Armed Forces:
168          (a) is presumed to be a citizen of the United States; and
169          (b) may not be required to provide additional proof of citizenship to establish that the

170     [person] individual is a citizen of the United States.
171          (8) The Department of Veterans' and Military Affairs created in Section 71-8-2 shall,
172     through an informal hearing held in accordance with Title 63G, Chapter 4, Administrative
173     Procedures Act, resolve each dispute arising under this section concerning a veteran's status as
174     a veteran with a disability.
175          Section 2. Section 59-2-1105 is amended to read:
176          59-2-1105. Application for United States armed forces exemption -- Rulemaking
177     authority -- Statement -- County authority to make refunds.
178          (1) (a) Except as provided in Subsections (1)(b) through (d), a county may allow an
179     exemption under Section 59-2-1104 [may be allowed] only if the interest of the claimant is on
180     record on January 1 of the year the exemption is claimed.
181          (b) A claimant may claim an exemption under Section 59-2-1104 regardless of whether
182     the interest of the claimant is on record on January 1 of the year the exemption is claimed if the
183     claimant is:
184          (i) the unmarried surviving spouse of:
185          (A) a deceased veteran with a disability as defined in Section 59-2-1104; or
186          (B) a veteran who was killed in action or died in the line of duty as defined in Section
187     59-2-1104; or
188          (ii) a minor orphan of:
189          (A) a deceased veteran with a disability as defined in Section 59-2-1104; or
190          (B) a veteran who was killed in action or died in the line of duty as defined in Section
191     59-2-1104.
192          (c) If the claimant has an interest in real property under a contract, the county may
193     allow an exemption under Section 59-2-1104 [may be allowed if it is proved] if the claimant
194     proves, to the satisfaction of the county, that the claimant is:
195          (i) the purchaser under the contract; and
196          (ii) obligated to pay the taxes on the property beginning January 1 of the year the
197     exemption is claimed.

198          (d) If the claimant is the grantor of a trust holding title to real or tangible personal
199     property on which an exemption under Section 59-2-1104 is claimed, the claimant may claim
200     the portion of the exemption under Section 59-2-1104 and be treated as the owner of that
201     portion of the property held in trust for which the claimant proves to the satisfaction of the
202     county that:
203          (i) title to the portion of the trust will revest in the claimant upon the exercise of a
204     power:
205          (A) by:
206          (I) the claimant as grantor of the trust;
207          (II) a nonadverse party; or
208          (III) both the claimant and a nonadverse party; and
209          (B) regardless of whether the power is a power:
210          (I) to revoke;
211          (II) to terminate;
212          (III) to alter;
213          (IV) to amend; or
214          (V) to appoint;
215          (ii) the claimant is obligated to pay the taxes on that portion of the trust property
216     beginning January 1 of the year the claimant claims the exemption; and
217          (iii) the claimant meets the requirements under this part for the exemption.
218          (2) (a) (i) A claimant applying for an exemption under Section 59-2-1104 shall file an
219     application:
220          (A) with the county in which that claimant resides; and
221          (B) except as provided in Subsection (2)(b) or (e), on or before September 1 of the year
222     in which that claimant is applying for the exemption in accordance with this section.
223          (ii) A county shall provide a claimant who files an application for an exemption in
224     accordance with this section with a receipt:
225          (A) stating that the county received the claimant's application; and

226          (B) no later than 30 days after the day on which the claimant filed the application in
227     accordance with this section.
228          (b) Notwithstanding Subsection [(2)(a)(i)(B) or] (2)(e):
229          (i) subject to Subsection (2)(b)(iv), for a claimant who applies for an exemption under
230     Section 59-2-1104 on or after January 1, 2004, a county shall extend the deadline for filing the
231     application required by Subsection (2)(a) to September 1 of the year after the year the claimant
232     would otherwise be required to file the application under Subsection (2)(a)(i)(B) if:
233          (A) on or after January 1, 2004, a military entity issues a written decision that the:
234          (I) veteran has a disability; or
235          (II) deceased veteran with a disability with respect to whom the claimant applies for an
236     exemption under this section had a disability at the time the deceased veteran with a disability
237     died; and
238          (B) the date the written decision described in Subsection (2)(b)(i)(A) takes effect is in
239     any year prior to the current calendar year;
240          (ii) subject to Subsections (2)(b)(iv) and (2)(d), for a claimant who applies for an
241     exemption under Section 59-2-1104 on or after January 1, 2004, a county shall allow the
242     claimant to amend the application required by Subsection (2)(a) on or before September 1 of
243     the year after the year the claimant filed the application under Subsection (2)(a)(i)(B) if:
244          (A) on or after January 1, 2004, a military entity issues a written decision that the
245     percentage of disability has changed for the:
246          (I) veteran with a disability; or
247          (II) deceased veteran with a disability with respect to whom the claimant applies for the
248     exemption; and
249          (B) the date the written decision described in Subsection (2)(b)(ii)(A) takes effect is in
250     any year prior to the current calendar year;
251          (iii) subject to Subsections (2)(b)(iv) and (2)(d), for a claimant who applies for an
252     exemption under Section 59-2-1104 on or after January 1, 2004, a county shall extend the
253     deadline for filing the application required by Subsection (2)(a) to September 1 of the year after

254     the year the claimant would otherwise be required to file the application under Subsection
255     (2)(a)(i)(B) if the county legislative body determines that:
256          (A) the claimant or a member of the claimant's immediate family had an illness or
257     injury that prevented the claimant from filing the application on or before the deadline for
258     filing the application established in Subsection (2)(a)(i)(B);
259          (B) a member of the claimant's immediate family died during the calendar year the
260     claimant was required to file the application under Subsection (2)(a)(i)(B);
261          (C) the claimant was not physically present in the state for a time period of at least six
262     consecutive months during the calendar year the claimant was required to file the application
263     under Subsection (2)(a)(i)(B); or
264          (D) the failure of the claimant to file the application on or before the deadline for filing
265     the application established in Subsection (2)(a)(i)(B):
266          (I) would be against equity or good conscience; and
267          (II) was beyond the reasonable control of the claimant; and
268          (iv) a county may extend the deadline for filing an application or amending an
269     application under this Subsection (2) until December 31 if the county finds that good cause
270     exists to extend the deadline.
271          (c) The following shall accompany the initial application for an exemption under
272     Section 59-2-1104:
273          (i) a copy of the veteran's certificate of discharge from military service; or
274          (ii) other satisfactory evidence of eligible military service, including orders for
275     qualifying active duty military service, if applicable.
276          (d) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
277     commission may by rule:
278          (i) establish procedures and requirements for amending an application under
279     Subsection (2)(b)(ii);
280          (ii) for purposes of Subsection (2)(b)(iii), define the terms:
281          (A) "immediate family"; or

282          (B) "physically present"; or
283          (iii) for purposes of Subsection (2)(b)(iii), prescribe the circumstances under which the
284     failure of a claimant to file an application on or before the deadline for filing the application
285     established in Subsection (2)(a)(i)(B):
286          (A) would be against equity or good conscience; and
287          (B) is beyond the reasonable control of a claimant.
288          (e) Except as provided in Subsection (2)(g), if a claimant has on file with the county
289     the application described in Subsection (2)(a), the county may not require the claimant to file
290     another application described in Subsection (2)(a) unless:
291          (i) the claimant applies all or a portion of an exemption under Section 59-2-1104 to any
292     tangible personal property;
293          (ii) the percentage of disability has changed for the:
294          (A) veteran with a disability; or
295          (B) deceased veteran with a disability with respect to whom a claimant applies for an
296     exemption under this section;
297          (iii) the veteran with a disability dies;
298          (iv) the claimant's ownership interest in the claimant's primary residence changes;
299          (v) the claimant's occupancy of the primary residence for which the claimant claims an
300     exemption under Section 59-2-1104 changes; or
301          (vi) the claimant who files an application for an exemption under Section 59-2-1104
302     with respect to a deceased veteran with a disability or veteran who was killed in action or died
303     in the line of duty is a person other than the claimant who filed the application described in
304     Subsection (2)(a) for the exemption:
305          (A) for the calendar year immediately preceding the current calendar year; and
306          (B) with respect to that deceased veteran with a disability or veteran who was killed in
307     action or died in the line of duty.
308          (f) The county may verify that the real property that is residential property for which
309     the claimant claims an exemption under Section 59-2-1104 is the claimant's primary residence.

310          (g) (i) A member of an active component of the United States Armed Forces or reserve
311     component of the United States Armed Forces who performed qualifying active duty military
312     service shall[:(i)] file the application described in Subsection (2)(a) in the year after the year
313     during which the member completes the qualifying active duty military service[; and].
314          (ii) [if the member] If a claimant described in Subsection (2)(g)(i) meets the
315     requirements of Section 59-2-1104 and this section to receive an exemption under Section
316     59-2-1104, the claimant may claim one exemption only in the year the member files the
317     application described in Subsection (2)(g)(i).
318          (3) (a) (i) Subject to Subsection (3)(a)(ii), a claimant except for a claimant described in
319     Subsection (2)(g) who files an application for an exemption under Section 59-2-1104 shall
320     have on file with the county a statement:
321          (A) issued by a military entity; and
322          (B) listing the percentage of disability for the veteran with a disability or deceased
323     veteran with a disability with respect to whom a claimant applies for the exemption.
324          (ii) If a claimant except for a claimant described in Subsection (2)(g) has on file with
325     the county the statement described in Subsection (3)(a)(i), the county may not require the
326     claimant to file another statement described in Subsection (3)(a)(i) unless:
327          (A) the claimant who files an application under this section for an exemption under
328     Section 59-2-1104 with respect to a deceased veteran with a disability or veteran who was
329     killed in action or died in the line of duty is a person other than the claimant who filed the
330     statement described in Subsection (3)(a)(i) for the exemption:
331          (I) for the calendar year immediately preceding the current calendar year; and
332          (II) with respect to that deceased veteran with a disability or veteran who was killed in
333     action or died in the line of duty; or
334          (B) the percentage of disability has changed for a:
335          (I) veteran with a disability; or
336          (II) deceased veteran with a disability with respect to whom the claimant applies for an
337     exemption under Section 59-2-1104.

338          (b) For a claimant filing an application in accordance with Subsection (2)(b)(i), the
339     claimant shall include with the application required by Subsection (2) a statement issued by a
340     military entity listing the date the written decision described in Subsection (2)(b)(i)(A) takes
341     effect.
342          (c) For a claimant amending an application in accordance with Subsection (2)(b)(ii),
343     the claimant shall provide to the county a statement issued by a military entity listing the date
344     the written decision described in Subsection (2)(b)(ii)(A) takes effect.
345          (d) For a claimant filing an application in accordance with Subsection (2)(g), the
346     claimant shall include with the application described in Subsection (2)(a) a statement listing the
347     dates on which the 200 days of qualifying active duty military service began and ended.
348          (4) A county that grants an exemption under Section 59-2-1104 to a claimant shall
349     refund to that claimant an amount equal to the amount by which the claimant's property taxes
350     paid exceed the claimant's property taxes due, if that amount is $1 or more.
351          Section 3. Contingent effective date.
352          This bill takes effect on January 1, 2019, if the amendment to the Utah Constitution
353     proposed by H.J.R. 7, Proposal to Amend Utah Constitution - Active Military Property Tax
354     Exemption, 2017 General Session, passes the Legislature and is approved by a majority of
355     those voting on it at the next regular general election.