Representative Timothy D. Hawkes proposes the following substitute bill:


1     
PROPERTY TAX CHANGES

2     
2018 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Timothy D. Hawkes

5     
Senate Sponsor: Howard A. Stephenson

6     

7     LONG TITLE
8     General Description:
9          This bill modifies the property tax valuation and appeals processes for county assessed
10     real property.
11     Highlighted Provisions:
12          This bill:
13          ▸     defines terms;
14          ▸     modifies the burden of proof for appeals involving certain real property for which
15     there was a reduction in value as a result of a taxpayer appeal during the previous
16     taxable year;
17          ▸     creates an automatic county review process for certain real property valuations or
18     equalizations that exceed a threshold; and
19          ▸     makes technical and conforming changes.
20     Money Appropriated in this Bill:
21          None
22     Other Special Clauses:
23          This bill provides a special effective date.
24     Utah Code Sections Affected:
25     AMENDS:
26          59-2-109, as enacted by Laws of Utah 2016, Chapter 392
27          59-2-303, as last amended by Laws of Utah 1993, Chapter 245
28          59-2-311, as last amended by Laws of Utah 2005, Chapter 182
29          59-2-1004, as last amended by Laws of Utah 2016, Chapter 98
30          59-2-1004.5, as last amended by Laws of Utah 2008, Chapter 382
31     ENACTS:
32          59-2-303.2, Utah Code Annotated 1953
33     

34     Be it enacted by the Legislature of the state of Utah:
35          Section 1. Section 59-2-109 is amended to read:
36          59-2-109. Burden of proof.
37          (1) As used in this section[, "assessing]:
38          (a) "Assessing authority" means:
39          [(a)] (i) the commission for property assessed under Part 2, Assessment of Property;
40     and
41          [(b)] (ii) a county assessor for property assessed under Part 3, County Assessment.
42          (b) "Final assessed value" means:
43          (i) for real property for which the property owner appealed the valuation or
44     equalization in accordance with Section 59-2-1004, the assessed value given to the real
45     property by a county board of equalization after the appeal; or
46          (ii) for real property for which the property owner or a county assessor appealed the
47     valuation or equalization in accordance with Section 59-2-1006 or sought judicial review of the
48     valuation or equalization in accordance with Section 59-1-602 or Title 63G, Chapter 4, Part 4,
49     Judicial Review, the assessed value given to the real property by the commission.
50          (c) "Inflation adjusted value" means the final assessed value for the previous taxable
51     year of the real property that is the subject of the appeal increased by the median property value
52     increase.
53          (d) "Median property value increase" means the midpoint of the property value
54     changes, if the midpoint is greater than zero, for all real property that is:
55          (i) of the same class of real property as the qualified property; and
56          (ii) located within the same county and within the same market area as the qualified
57     property.
58          (e) "Property value change" means the percentage change in the fair market value of
59     real property between January 1 of the previous year and January 1 of the current year.
60          (f) "Qualified real property" means real property:
61          (i) for which:
62          (A) the taxpayer or a county assessor appealed the valuation or equalization in
63     accordance with Section 59-2-1004 or 59-2-1006 during the previous year; and
64          (B) as a result of the appeal described in Subsection (1)(f)(i)(A), a county board of
65     equalization or the commission reduced the assessed value for the previous taxable year;
66          (ii) that the taxpayer has not improved between January 1 of the previous taxable year
67     and January 1 of the current taxable year; and
68          (iii) for which the assessed value for the current taxable year is higher than the inflation
69     adjusted value.
70          (2) Notwithstanding Section 59-1-604, in an action appealing or seeking judicial
71     review of the value of property assessed by an assessing authority, the assessing authority has
72     the burden of proof before a county board of equalization, the commission, or a court of
73     competent jurisdiction[,] if the assessing authority presents evidence or otherwise asserts that
74     the fair market value of the assessed property is greater than the value originally assessed by
75     the assessing authority for that calendar year.
76          (3) (a) (i) Notwithstanding Section 59-1-604, in an action appealing or seeking judicial
77     review of the value of qualified real property assessed by a county assessor, the county assessor
78     has the burden of proof before a county board of equalization, the commission, or a court of
79     competent jurisdiction if the taxpayer does not seek to reduce the assessed value of the
80     qualified real property for the current taxable year below the inflation adjusted value.
81          (ii) The burden remains on the county assessor even if the previous year's valuation is:
82          (A) pending judicial review requested in accordance with Section 59-1-602 or Title
83     63G, Chapter 4, Part 4, Judicial Review; or
84          (B) overturned by a district court as a result of judicial review requested in accordance
85     with Section 59-1-602 or Title 63G, Chapter 4, Part 4, Judicial Review.
86          (b) In an action appealing or seeking judicial review of the value of qualified real
87     property assessed by a county assessor, the taxpayer has the burden of proof before a county
88     board of equalization, the commission, or a court of competent jurisdiction if the taxpayer
89     seeks to reduce the assessed value of the qualified real property for the current taxable year
90     below the inflation adjusted value.
91          Section 2. Section 59-2-303 is amended to read:
92          59-2-303. General duties of county assessor.
93          (1) [Prior to] (a) Before May 22 each year, the county assessor shall:
94          (i) ascertain the names of the owners of all property [which] that is subject to taxation
95     by the county[, and shall];
96          (ii) except as provided in Subsection (2), assess the property to the owner, claimant of
97     record, or occupant in possession or control at [12 o'clock midnight of January 1 in the tax
98     year, unless a subsequent conveyance of ownership of the real property was recorded in the
99     office of the county recorder more than 14 calendar days before the date of mailing of the tax
100     notice. In that case, any tax notice may be mailed, and the tax assessed, to the new owner. No
101     mistake in the name or address of the owner or supposed owner of property renders the
102     assessment invalid.] midnight on January 1 of the taxable year; and
103          (iii) conduct the review process described in Section 59-2-303.2.
104          (b) No mistake in the name or address of the owner or supposed owner of property
105     renders the assessment invalid.
106          (2) If a conveyance of ownership of the real property was recorded in the office of a
107     county recorder after January 1 but more than 14 calendar days before the day on which the
108     county treasurer mails the tax notice, the county assessor shall assess the property to the new
109     owner.
110          [(2)] (3) A county assessor shall become fully acquainted with all property in [his] the
111     county assessor's county, as provided in Section 59-2-301.
112          Section 3. Section 59-2-303.2 is enacted to read:
113          59-2-303.2. Automatic review of assessed value of review property.
114          (1) As used in this section:
115          (a) "Final assessed value" means:
116          (i) for a review property for which the property owner did not appeal the valuation or
117     equalization in accordance with Section 59-2-1004, the assessed value as stated on the
118     valuation notice described in Section 59-2-919.1;
119          (ii) for a review property for which the property owner appealed the valuation or
120     equalization in accordance with Section 59-2-1004, the assessed value given to the review
121     property by a county board of equalization after the appeal; or
122          (iii) for a review property for which the property owner or a county assessor appealed
123     the valuation or equalization in accordance with Section 59-2-1006 or sought judicial review of
124     the valuation or equalization in accordance with Section 59-1-602 or Title 63G, Chapter 4, Part
125     4, Judicial Review, the assessed value given to the review property by the commission.
126          (b) "Median property value change" means the midpoint of the property value changes
127     for all real property that is:
128          (i) of the same class of real property as the review property; and
129          (ii) located within the same county and within the same market area as the review
130     property.
131          (c) "Property value change" means the percentage change in the fair market value of
132     real property between January 1 of the previous year and January 1 of the current year.
133          (d) "Review property" means real property located in the county:
134          (i) that between January 1 of the previous year and January 1 of the current year has not
135     been improved; and
136          (ii) for which the county assessor did not conduct a detailed review of property
137     characteristics during the current taxable year.
138          (e) "Threshold increase" means an increase in a review property's assessed value for the
139     current taxable year compared to the final assessed value of the review property for the
140     previous taxable year that is:
141          (i) the median property value change plus 15%; and
142          (ii) $10,000.
143          (2) (a) Before completing and delivering the assessment book to the county auditor in
144     accordance with Section 59-2-311, the county assessor shall review an assessment of review
145     property for which the assessed value for the current taxable year is equal to or exceeds the
146     threshold increase.
147          (b) The county assessor shall retain a record of the properties for which the county
148     assessor conducts a review in accordance with this section and the results of that review.
149          (3) (a) If the county assessor determines that the assessed value of the review property
150     reflects the review property's fair market value, the county assessor shall not adjust the review
151     property's assessed value.
152          (b) If the county assessor determines that the assessed value of the review property
153     does not reflect the review property's fair market value, the county assessor shall adjust the
154     assessed value of the review property to reflect the fair market value.
155          (4) The review process described in this section does not supersede or otherwise affect
156     a taxpayer's right to appeal or to seek judicial review of the valuation or equalization of the
157     taxpayer's review property in accordance with:
158          (a) this part;
159          (b) Title 59, Chapter 1, Part 6, Judicial Review; or
160          (c) Title 63G, Chapter 4, Part 4, Judicial Review.
161          Section 4. Section 59-2-311 is amended to read:
162          59-2-311. Completion and delivery of assessment book -- Signed statement
163     required -- Contents of signed statement -- Adjustment of assessment in assessment book.
164          (1) [Prior to] Before May 22 each year, the county assessor shall complete and deliver
165     the assessment book to the county auditor.
166          (2) The county assessor shall subscribe and sign a statement in the assessment book
167     substantially as follows:
168          I, ____, the assessor of ____ County, do swear that before May 22, _______(year), I
169     made diligent inquiry and examination, and either personally or by deputy, established the
170     value of all of the property within the county subject to assessment by me; that the property has
171     been assessed on the assessment book equally and uniformly according to the best of my
172     judgment, information, and belief at its fair market value; that I have faithfully complied with
173     all the duties imposed on the assessor under the revenue laws including the requirements of
174     Section 59-2-303.1; and that I have not imposed any unjust or double assessments through
175     malice or ill will or otherwise, or allowed anyone to escape a just and equal assessment through
176     favor or reward, or otherwise.
177          (3) Before completing and delivering the assessment book under Subsection (1), the
178     county assessor shall adjust the assessment of property in the assessment book to reflect an
179     adjustment in the taxable value of any property if the adjustment in taxable value is made:
180          (a) by the county board of equalization [under] in accordance with Section
181     59-2-1004.5[; and] on or before May 15; or
182          [(b) on or before May 15.]
183          (b) by the county assessor in accordance with Section 59-2-303.2.
184          Section 5. Section 59-2-1004 is amended to read:
185          59-2-1004. Appeal to county board of equalization -- Real property -- Time
186     period for appeal -- Decision of board -- Extensions approved by commission -- Appeal to
187     commission.
188          (1) As used in this section:
189          (a) "Final assessed value" means:
190          (i) for real property for which the property owner appealed the valuation or
191     equalization in accordance with Section 59-2-1004, the assessed value given to the real
192     property by a county board of equalization after the appeal; or
193          (ii) for real property for which the property owner or the county assessor appealed the
194     valuation or equalization in accordance with Section 59-2-1006 or sought judicial review of the
195     valuation or equalization in accordance with Section 59-1-602 or Title 63G, Chapter 4, Part 4,
196     Judicial Review, the assessed value given to the real property by the commission.
197          (b) "Inflation adjusted value" means the final assessed value for the previous taxable
198     year of the real property that is the subject of the appeal increased by the median property value
199     increase.
200          (c) "Median property value increase" means the midpoint of the property value
201     changes, if the midpoint is greater than zero, for all real property that is:
202          (i) of the same class of real property as the qualified property; and
203          (ii) located within the same county and within the same market area as the qualified
204     property.
205          (d) "Property value change" means the percentage change in the fair market value of
206     real property between January 1 of the previous year and January 1 of the current year.
207          (e) "Qualified real property" means real property:
208          (i) for which:
209          (A) the taxpayer or a county assessor appealed the valuation or equalization in
210     accordance with Section 59-2-1004 or 59-2-1006 during the previous year; and
211          (B) as a result of the appeal described in Subsection (1)(e)(i)(A), a county board of
212     equalization or the commission reduced the assessed value for the previous taxable year;
213          (ii) that the taxpayer has not improved between January 1 of the previous taxable year
214     and January 1 of the current taxable year; and
215          (iii) for which the assessed value for the current taxable year is higher than the inflation
216     adjusted value.
217          [(1)] (2) (a) A taxpayer dissatisfied with the valuation or the equalization of the
218     taxpayer's real property may make an application to appeal by:
219          (i) filing the application with the county board of equalization within the time period
220     described in Subsection [(2)] (3); or
221          (ii) making an application by telephone or other electronic means within the time
222     period described in Subsection [(2)] (3) if the county legislative body passes a resolution under
223     Subsection [(7) authorizing applications to be made] (8) authorizing a taxpayer to make an
224     application by telephone or other electronic means.
225          (b) (i) The county board of equalization shall make a rule describing the contents of the
226     application [shall be prescribed by rule of the county board of equalization].
227          (ii) In addition to any information the county board of equalization requires, the
228     application shall include information about:
229          (A) the burden of proof in an appeal involving qualified real property; and
230          (B) the process for a taxpayer who owns qualified real property to learn the inflation
231     adjusted value of the qualified real property.
232          [(2)] (3) (a) Except as provided in Subsection [(2)(b),] (3)(b) and for purposes of
233     Subsection (1), a taxpayer shall make an application to appeal the valuation or the equalization
234     of the taxpayer's real property on or before the later of:
235          (i) September 15 of the current calendar year; or
236          (ii) the last day of a 45-day period beginning on the day on which the county auditor
237     provides the notice under Section 59-2-919.1.
238          (b) [Notwithstanding Subsection (2)(a), in] In accordance with Title 63G, Chapter 3,
239     Utah Administrative Rulemaking Act, the commission shall make rules providing for
240     circumstances under which the county board of equalization is required to accept an application
241     to appeal that is filed after the time period prescribed in Subsection [(2)] (3)(a).
242          [(3) The owner]
243          (4) (a) Except as provided in Subsection (4)(b), the taxpayer shall include in the
244     application under Subsection [(1)] (2)(a)(i) the [owner's] taxpayer's estimate of the fair market
245     value of the property and any evidence [which] that may indicate that the assessed valuation of
246     the [owner's] taxpayer's property is improperly equalized with the assessed valuation of
247     comparable properties.
248          (b) (i) For an appeal involving qualified real property:
249          (A) the county board of equalization shall presume that the fair market value of the
250     qualified real property is equal to the inflation adjusted value; and
251          (B) except as provided in Subsection (4)(b)(ii), the taxpayer may provide the
252     information described in Subsection (4)(a).
253          (ii) If the taxpayer seeks to prove that the fair market value of the qualified real
254     property is below the inflation adjusted value, the taxpayer shall provide the information
255     described in Subsection (4)(a).
256          [(4)] (5) In reviewing evidence submitted to a county board of equalization by or on
257     behalf of an owner or a county assessor, the county board of equalization shall consider and
258     weigh:
259          (a) the accuracy, reliability, and comparability of the evidence presented by the owner
260     or the county assessor;
261          (b) if submitted, the sales price of relevant property that was under contract for sale as
262     of the lien date but sold after the lien date;
263          (c) if submitted, the sales offering price of property that was offered for sale as of the
264     lien date but did not sell, including considering and weighing the amount of time for which,
265     and manner in which, the property was offered for sale; and
266          (d) if submitted, other evidence that is relevant to determining the fair market value of
267     the property.
268          [(5)] (6) (a) The county board of equalization shall meet and hold public hearings as
269     [prescribed] described in Section 59-2-1001.
270          (b) The county board of equalization shall make a decision on each appeal filed in
271     accordance with this section within [a 60-day period] 60 days after the day on which the
272     taxpayer makes an application [is made].
273          (c) The commission may approve the extension of a time period provided for in
274     Subsection [(5)] (6)(b) for a county board of equalization to make a decision on an appeal.
275          (d) Unless the commission approves the extension of a time period under Subsection
276     [(5)] (6)(c), if a county board of equalization fails to make a decision on an appeal within the
277     time period described in Subsection [(5)] (6)(b), the county legislative body shall:
278          (i) list the appeal, by property owner and parcel number, on the agenda for the next
279     meeting [of] the county legislative body [that is held] holds after the expiration of the time
280     period described in Subsection [(5)] (6)(b); and
281          (ii) hear the appeal at the meeting described in Subsection [(5)] (6)(d)(i).
282          (e) The decision of the county board of equalization shall contain:
283          (i) a determination of the valuation of the property based on fair market value[,]; and
284          (ii) a conclusion that the fair market value is properly equalized with the assessed value
285     of comparable properties.
286          (f) If no evidence is presented before the county board of equalization, [it will be
287     presumed] the county board of equalization shall presume that the equalization issue has been
288     met.
289          (g) (i) If the fair market value of the property that is the subject of the appeal deviates
290     plus or minus 5% from the assessed value of comparable properties, the county board of
291     equalization shall adjust the valuation of the appealed property [shall be adjusted] to reflect a
292     value equalized with the assessed value of comparable properties.
293          (ii) Subject to Sections 59-2-301.1, 59-2-301.2, 59-2-301.3, and 59-2-301.4, equalized
294     value established under Subsection [(5)] (6)(g)(i) shall be the assessed value for property tax
295     purposes until the county assessor is able to evaluate and equalize the assessed value of all
296     comparable properties to bring [them] all comparable properties into conformity with full fair
297     market value.
298          [(6)] (7) If any taxpayer is dissatisfied with the decision of the county board of
299     equalization, the taxpayer may file an appeal with the commission as [prescribed] described in
300     Section 59-2-1006.
301          [(7)] (8) A county legislative body may pass a resolution authorizing taxpayers owing
302     taxes on property assessed by that county to file property tax appeals applications under this
303     section by telephone or other electronic means.
304          Section 6. Section 59-2-1004.5 is amended to read:
305          59-2-1004.5. Valuation adjustment for decrease in taxable value caused by a
306     natural disaster.
307          (1) For purposes of this section:
308          (a) ["natural] "Natural disaster" means:
309          (i) an explosion;
310          (ii) fire;
311          (iii) a flood;
312          (iv) a storm;
313          (v) a tornado;
314          (vi) winds;
315          (vii) an earthquake;
316          (viii) lightning;
317          (ix) any adverse weather event; or
318          (x) any event similar to an event described in this Subsection (1), as determined by the
319     commission by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
320     Rulemaking Act[; and].
321          (b) "[natural] Natural disaster damage" means any physical harm to property caused by
322     a natural disaster.
323          (2) Except as provided in Subsection (3), if, during a calendar year, property sustains a
324     decrease in taxable value that is caused by natural disaster damage, the owner of the property
325     may apply to the county board of equalization for an adjustment in the taxable value of the
326     owner's property as provided in Subsection (4).
327          (3) [Notwithstanding Subsection (2), an] An owner may not receive the valuation
328     adjustment described in this section if the decrease in taxable value described in Subsection (2)
329     is:
330          (a) due to the intentional action or inaction of the owner; or
331          (b) less than 30% of the taxable value of the property described in Subsection (2)
332     before the decrease in taxable value described in Subsection (2).
333          (4) (a) To receive the valuation adjustment described in Subsection (2), the owner of
334     the property shall file an application for the valuation adjustment with the county board of
335     equalization on or before the later of:
336          (i) the deadline described in Subsection 59-2-1004[(2)](3); or
337          (ii) 45 days after the day on which the natural disaster damage described in Subsection
338     (2) occurs.
339          (b) The county board of equalization shall hold a hearing:
340          (i) within 30 days [of] after the day on which the county board of equalization receives
341     the application described in Subsection (4)(a) [is received by the board of equalization]; and
342          (ii) following the procedures and requirements of Section 59-2-1001.
343          (c) At the hearing described in Subsection (4)(b), the applicant shall have the burden of
344     proving, by a preponderance of the evidence:
345          (i) that the property sustained a decrease in taxable value, that:
346          (A) was caused by natural disaster damage; and
347          (B) is at least 30% of the taxable value of the property described in this Subsection
348     (4)(c)(i) before the decrease in taxable value described in this Subsection (4)(c)(i);
349          (ii) the amount of the decrease in taxable value described in Subsection (4)(c)(i); and
350          (iii) that the decrease in taxable value described in Subsection (4)(c)(i) is not due to the
351     action or inaction of the applicant.
352          (d) If the county board of equalization determines that the applicant has met the burden
353     of proof described in Subsection (4)(c), the county board of equalization shall reduce the
354     valuation of the property described in Subsection (4)(c)(i) by an amount equal to the decrease
355     in taxable value of the property multiplied by the percentage of the calendar year remaining
356     after the natural disaster damage occurred.
357          (e) The decision of the board of equalization shall be provided to the applicant, in
358     writing, within 30 days [of] after the day on which the county board of equalization concludes
359     the hearing described in Subsection (4)(b) [is concluded].
360          (5) An applicant that is dissatisfied with a decision of the county board of equalization
361     under this section may appeal that decision under Section 59-2-1006.
362          Section 7. Effective date.
363          If approved by two-thirds of all the members elected to each house, this bill takes effect
364     upon approval by the governor, or the day following the constitutional time limit of Utah
365     Constitution, Article VII, Section 8, without the governor's signature, or in the case of a veto,
366     the date of veto override.