1     
PROPERTY TAX EXEMPTION AMENDMENTS

2     
2021 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Wayne A. Harper

5     
House Sponsor: Karianne Lisonbee

6     

7     LONG TITLE
8     General Description:
9          This bill modifies the Property Tax Act.
10     Highlighted Provisions:
11          This bill:
12          ▸     modifies the qualifications for tangible personal property tax to be exempt from
13     property tax; and
14          ▸     excludes the revenue generated from the increase in the amount of the exemption
15     that is based on aggregate taxable value in the county from the certified tax rate
16     calculation.
17     Money Appropriated in this Bill:
18          None
19     Other Special Clauses:
20          This bill provides a special effective date.
21     Utah Code Sections Affected:
22     AMENDS:
23          59-2-924, as last amended by Laws of Utah 2020, Chapters 305 and 354
24          59-2-1115, as last amended by Laws of Utah 2020, Chapters 38 and 42
25     

26     Be it enacted by the Legislature of the state of Utah:
27          Section 1. Section 59-2-924 is amended to read:
28          59-2-924. Definitions -- Report of valuation of property to county auditor and
29     commission -- Transmittal by auditor to governing bodies -- Calculation of certified tax

30     rate -- Rulemaking authority -- Adoption of tentative budget -- Notice provided by the
31     commission.
32          (1) As used in this section:
33          (a) (i) "Ad valorem property tax revenue" means revenue collected in accordance with
34     this chapter.
35          (ii) "Ad valorem property tax revenue" does not include:
36          (A) interest;
37          (B) penalties;
38          (C) collections from redemptions; or
39          (D) revenue received by a taxing entity from personal property that is semiconductor
40     manufacturing equipment assessed by a county assessor in accordance with Part 3, County
41     Assessment.
42          (b) "Adjusted tax increment" means the same as that term is defined in Section
43     17C-1-102.
44          (c) (i) "Aggregate taxable value of all property taxed" means:
45          (A) the aggregate taxable value of all real property a county assessor assesses in
46     accordance with Part 3, County Assessment, for the current year;
47          (B) the aggregate taxable value of all real and personal property the commission
48     assesses in accordance with Part 2, Assessment of Property, for the current year; and
49          (C) the aggregate year end taxable value of all personal property a county assessor
50     assesses in accordance with Part 3, County Assessment, contained on the prior year's tax rolls
51     of the taxing entity.
52          (ii) "Aggregate taxable value of all property taxed" does not include the aggregate year
53     end taxable value of personal property that is:
54          (A) semiconductor manufacturing equipment assessed by a county assessor in
55     accordance with Part 3, County Assessment; and
56          (B) contained on the prior year's tax rolls of the taxing entity.
57          (d) "Base taxable value" means:

58          (i) for an authority created under Section 11-58-201, the same as that term is defined in
59     Section 11-58-102;
60          (ii) for an agency created under Section 17C-1-201.5, the same as that term is defined
61     in Section 17C-1-102;
62          (iii) for an authority created under Section 63H-1-201, the same as that term is defined
63     in Section 63H-1-102; or
64          (iv) for a host local government, the same as that term is defined in Section 63N-2-502.
65          (e) "Centrally assessed benchmark value" means an amount equal to the highest year
66     end taxable value of real and personal property the commission assesses in accordance with
67     Part 2, Assessment of Property, for a previous calendar year that begins on or after January 1,
68     2015, adjusted for taxable value attributable to:
69          (i) an annexation to a taxing entity; or
70          (ii) an incorrect allocation of taxable value of real or personal property the commission
71     assesses in accordance with Part 2, Assessment of Property.
72          (f) (i) "Centrally assessed new growth" means the greater of:
73          (A) zero; or
74          (B) the amount calculated by subtracting the centrally assessed benchmark value
75     adjusted for prior year end incremental value from the taxable value of real and personal
76     property the commission assesses in accordance with Part 2, Assessment of Property, for the
77     current year, adjusted for current year incremental value.
78          (ii) "Centrally assessed new growth" does not include a change in value as a result of a
79     change in the method of apportioning the value prescribed by the Legislature, a court, or the
80     commission in an administrative rule or administrative order.
81          (g) "Certified tax rate" means a tax rate that will provide the same ad valorem property
82     tax revenue for a taxing entity as was budgeted by that taxing entity for the prior year.
83          (h) "Eligible new growth" means the greater of:
84          (i) zero; or
85          (ii) the sum of:

86          (A) locally assessed new growth;
87          (B) centrally assessed new growth; and
88          (C) project area new growth or hotel property new growth.
89          (i) "Host local government" means the same as that term is defined in Section
90     63N-2-502.
91          (j) "Hotel property" means the same as that term is defined in Section 63N-2-502.
92          (k) "Hotel property new growth" means an amount equal to the incremental value that
93     is no longer provided to a host local government as incremental property tax revenue.
94          (l) "Incremental property tax revenue" means the same as that term is defined in
95     Section 63N-2-502.
96          (m) "Incremental value" means:
97          (i) for an authority created under Section 11-58-201, the amount calculated by
98     multiplying:
99          (A) the difference between the taxable value and the base taxable value of the property
100     that is located within a project area and on which property tax differential is collected; and
101          (B) the number that represents the percentage of the property tax differential that is
102     paid to the authority;
103          (ii) for an agency created under Section 17C-1-201.5, the amount calculated by
104     multiplying:
105          (A) the difference between the taxable value and the base taxable value of the property
106     located within a project area and on which tax increment is collected; and
107          (B) the number that represents the adjusted tax increment from that project area that is
108     paid to the agency;
109          (iii) for an authority created under Section 63H-1-201, the amount calculated by
110     multiplying:
111          (A) the difference between the taxable value and the base taxable value of the property
112     located within a project area and on which property tax allocation is collected; and
113          (B) the number that represents the percentage of the property tax allocation from that

114     project area that is paid to the authority; or
115          (iv) for a host local government, an amount calculated by multiplying:
116          (A) the difference between the taxable value and the base taxable value of the hotel
117     property on which incremental property tax revenue is collected; and
118          (B) the number that represents the percentage of the incremental property tax revenue
119     from that hotel property that is paid to the host local government.
120          (n) (i) "Locally assessed new growth" means the greater of:
121          (A) zero; or
122          (B) the amount calculated by subtracting the year end taxable value of real property the
123     county assessor assesses in accordance with Part 3, County Assessment, for the previous year,
124     adjusted for prior year end incremental value from the taxable value of real property the county
125     assessor assesses in accordance with Part 3, County Assessment, for the current year, adjusted
126     for current year incremental value.
127          (ii) "Locally assessed new growth" does not include a change in:
128          (A) value as a result of factoring in accordance with Section 59-2-704, reappraisal, or
129     another adjustment;
130          (B) assessed value based on whether a property is allowed a residential exemption for a
131     primary residence under Section 59-2-103;
132          (C) assessed value based on whether a property is assessed under Part 5, Farmland
133     Assessment Act; or
134          (D) assessed value based on whether a property is assessed under Part 17, Urban
135     Farming Assessment Act.
136          (o) "Project area" means:
137          (i) for an authority created under Section 11-58-201, the same as that term is defined in
138     Section 11-58-102;
139          (ii) for an agency created under Section 17C-1-201.5, the same as that term is defined
140     in Section 17C-1-102; or
141          (iii) for an authority created under Section 63H-1-201, the same as that term is defined

142     in Section 63H-1-102.
143          (p) "Project area new growth" means:
144          (i) for an authority created under Section 11-58-201, an amount equal to the
145     incremental value that is no longer provided to an authority as property tax differential;
146          (ii) for an agency created under Section 17C-1-201.5, an amount equal to the
147     incremental value that is no longer provided to an agency as tax increment; or
148          (iii) for an authority created under Section 63H-1-201, an amount equal to the
149     incremental value that is no longer provided to an authority as property tax allocation.
150          (q) "Property tax allocation" means the same as that term is defined in Section
151     63H-1-102.
152          (r) "Property tax differential" means the same as that term is defined in Section
153     11-58-102.
154          (s) "Qualifying exempt revenue" means revenue received:
155          (i) for the previous calendar year;
156          (ii) by a taxing entity;
157          (iii) from tangible personal property contained on the prior year's tax rolls that is
158     exempt from property tax under Subsection 59-2-1115(2)(b) for a calendar year beginning on
159     January 1, 2022; and
160          (iv) on the aggregate 2021 year end taxable value of the tangible personal property that
161     exceeds $15,300.
162          [(s)] (t) "Tax increment" means the same as that term is defined in Section 17C-1-102.
163          (2) Before June 1 of each year, the county assessor of each county shall deliver to the
164     county auditor and the commission the following statements:
165          (a) a statement containing the aggregate valuation of all taxable real property a county
166     assessor assesses in accordance with Part 3, County Assessment, for each taxing entity; and
167          (b) a statement containing the taxable value of all personal property a county assessor
168     assesses in accordance with Part 3, County Assessment, from the prior year end values.
169          (3) The county auditor shall, on or before June 8, transmit to the governing body of

170     each taxing entity:
171          (a) the statements described in Subsections (2)(a) and (b);
172          (b) an estimate of the revenue from personal property;
173          (c) the certified tax rate; and
174          (d) all forms necessary to submit a tax levy request.
175          (4) (a) Except as otherwise provided in this section, the certified tax rate shall be
176     calculated by dividing the ad valorem property tax revenue that a taxing entity budgeted for the
177     prior year minus the qualifying exempt revenue by the amount calculated under Subsection
178     (4)(b).
179          (b) For purposes of Subsection (4)(a), the legislative body of a taxing entity shall
180     calculate an amount as follows:
181          (i) calculate for the taxing entity the difference between:
182          (A) the aggregate taxable value of all property taxed; and
183          (B) any adjustments for current year incremental value;
184          (ii) after making the calculation required by Subsection (4)(b)(i), calculate an amount
185     determined by increasing or decreasing the amount calculated under Subsection (4)(b)(i) by the
186     average of the percentage net change in the value of taxable property for the equalization
187     period for the three calendar years immediately preceding the current calendar year;
188          (iii) after making the calculation required by Subsection (4)(b)(ii), calculate the product
189     of:
190          (A) the amount calculated under Subsection (4)(b)(ii); and
191          (B) the percentage of property taxes collected for the five calendar years immediately
192     preceding the current calendar year; and
193          (iv) after making the calculation required by Subsection (4)(b)(iii), calculate an amount
194     determined by:
195          (A) multiplying the percentage of property taxes collected for the five calendar years
196     immediately preceding the current calendar year by eligible new growth; and
197          (B) subtracting the amount calculated under Subsection (4)(b)(iv)(A) from the amount

198     calculated under Subsection (4)(b)(iii).
199          (5) A certified tax rate for a taxing entity described in this Subsection (5) shall be
200     calculated as follows:
201          (a) except as provided in Subsection (5)(b), for a new taxing entity, the certified tax
202     rate is zero;
203          (b) for a municipality incorporated on or after July 1, 1996, the certified tax rate is:
204          (i) in a county of the first, second, or third class, the levy imposed for municipal-type
205     services under Sections 17-34-1 and 17-36-9; and
206          (ii) in a county of the fourth, fifth, or sixth class, the levy imposed for general county
207     purposes and such other levies imposed solely for the municipal-type services identified in
208     Section 17-34-1 and Subsection 17-36-3(23); and
209          (c) for debt service voted on by the public, the certified tax rate is the actual levy
210     imposed by that section, except that a certified tax rate for the following levies shall be
211     calculated in accordance with Section 59-2-913 and this section:
212          (i) a school levy provided for under Section 53F-8-301, 53F-8-302, or 53F-8-303; and
213          (ii) a levy to pay for the costs of state legislative mandates or judicial or administrative
214     orders under Section 59-2-1602.
215          (6) (a) A judgment levy imposed under Section 59-2-1328 or 59-2-1330 may be
216     imposed at a rate that is sufficient to generate only the revenue required to satisfy one or more
217     eligible judgments.
218          (b) The ad valorem property tax revenue generated by a judgment levy described in
219     Subsection (6)(a) may not be considered in establishing a taxing entity's aggregate certified tax
220     rate.
221          (7) (a) For the purpose of calculating the certified tax rate, the county auditor shall use:
222          (i) the taxable value of real property:
223          (A) the county assessor assesses in accordance with Part 3, County Assessment; and
224          (B) contained on the assessment roll;
225          (ii) the year end taxable value of personal property:

226          (A) a county assessor assesses in accordance with Part 3, County Assessment; and
227          (B) contained on the prior year's assessment roll; and
228          (iii) the taxable value of real and personal property the commission assesses in
229     accordance with Part 2, Assessment of Property.
230          (b) For purposes of Subsection (7)(a), taxable value does not include eligible new
231     growth.
232          (8) (a) On or before June 30, a taxing entity shall annually adopt a tentative budget.
233          (b) If a taxing entity intends to exceed the certified tax rate, the taxing entity shall
234     notify the county auditor of:
235          (i) the taxing entity's intent to exceed the certified tax rate; and
236          (ii) the amount by which the taxing entity proposes to exceed the certified tax rate.
237          (c) The county auditor shall notify property owners of any intent to levy a tax rate that
238     exceeds the certified tax rate in accordance with Sections 59-2-919 and 59-2-919.1.
239          (9) (a) Subject to Subsection (9)(d), the commission shall provide notice, through
240     electronic means on or before July 31, to a taxing entity and the Revenue and Taxation Interim
241     Committee if:
242          (i) the amount calculated under Subsection (9)(b) is 10% or more of the year end
243     taxable value of the real and personal property the commission assesses in accordance with
244     Part 2, Assessment of Property, for the previous year, adjusted for prior year end incremental
245     value; and
246          (ii) the amount calculated under Subsection (9)(c) is 50% or more of the total year end
247     taxable value of the real and personal property of a taxpayer the commission assesses in
248     accordance with Part 2, Assessment of Property, for the previous year.
249          (b) For purposes of Subsection (9)(a)(i), the commission shall calculate an amount by
250     subtracting the taxable value of real and personal property the commission assesses in
251     accordance with Part 2, Assessment of Property, for the current year, adjusted for current year
252     incremental value, from the year end taxable value of the real and personal property the
253     commission assesses in accordance with Part 2, Assessment of Property, for the previous year,

254     adjusted for prior year end incremental value.
255          (c) For purposes of Subsection (9)(a)(ii), the commission shall calculate an amount by
256     subtracting the total taxable value of real and personal property of a taxpayer the commission
257     assesses in accordance with Part 2, Assessment of Property, for the current year, from the total
258     year end taxable value of the real and personal property of a taxpayer the commission assesses
259     in accordance with Part 2, Assessment of Property, for the previous year.
260          (d) The notification under Subsection (9)(a) shall include a list of taxpayers that meet
261     the requirement under Subsection (9)(a)(ii).
262          Section 2. Section 59-2-1115 is amended to read:
263          59-2-1115. Exemption of certain tangible personal property.
264          (1) As used in this section:
265          (a) (i) "Item of taxable tangible personal property" does not include an improvement to
266     real property or a part that will become an improvement.
267          (ii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
268     commission may make rules defining the term "item of taxable tangible personal property."
269          (b) (i) "Taxable tangible personal property" means tangible personal property that is
270     subject to taxation under this chapter.
271          (ii) "Taxable tangible personal property" does not include:
272          (A) tangible personal property required by law to be registered with the state before it
273     is used on a public highway, public waterway, or public land or in the air;
274          (B) a mobile home as defined in Section 41-1a-102; or
275          (C) a manufactured home as defined in Section 41-1a-102.
276          (2) (a) In accordance with Utah Constitution, Article XIII, Section 3, Subsection
277     (2)(a)(vi), which provides that the Legislature may by statute exempt tangible personal property
278     that, if subject to property tax, would generate an inconsequential amount of revenue, the
279     Legislature exempts the tangible personal property described in this Subsection (2).
280          (b) The taxable tangible personal property of a taxpayer is exempt from taxation if the
281     taxable tangible personal property has a total aggregate taxable value per county of [$15,000]

282     $25,000 or less.
283          [(b) In addition to the exemption under Subsection (2)(a), an item of taxable tangible
284     personal property, except for an item of noncapitalized personal property as defined in Section
285     59-2-108, is exempt from taxation if the item of taxable tangible personal property:]
286          [(i) has an acquisition cost of $1,000 or less;]
287          [(ii) has reached a percent good of 15% or less according to a personal property
288     schedule published by the commission pursuant to Section 59-2-107; and]
289          [(iii) is in a personal property schedule with a residual value of 15% or less.]
290          (c) For an item of taxable tangible personal property that is not exempt under
291     Subsection [(2)(a) or (b)] (2)(b), the item is exempt from taxation if:
292          [(i) (A) the item is owned by a business and is not critical to the actual business
293     operation of the business; or]
294          [(B) beginning January 1, 2021,]
295          (i) the item is owned by a business and is not critical to the actual business operation of
296     the business; and
297          (ii) the acquisition cost of the item is[:] less than $500.
298          [(A) less than $150; or]
299          [(B) beginning January 1, 2021, less than $500.]
300          (3) (a) For a calendar year beginning on or after January 1, [2021] 2023, the
301     commission shall increase the dollar amount described in Subsection (2)[(a)](b):
302          (i) by a percentage equal to the percentage difference between the consumer price
303     index for the preceding calendar year and the consumer price index for calendar year [2019]
304     2021; and
305          (ii) up to the nearest $100 increment.
306          (b) For purposes of this Subsection (3), the commission shall calculate the consumer
307     price index as provided in Sections 1(f)(4) and 1(f)(5), Internal Revenue Code.
308          (c) If the percentage difference under Subsection (3)(a)(i) is zero or a negative
309     percentage, the consumer price index increase for the year is zero.

310          (4) (a) For the first calendar year in which a taxpayer qualifies for an exemption
311     described in Subsection (2)[(a)](b), a county assessor may require the taxpayer to file a signed
312     statement described in Section 59-2-306.
313          (b) Notwithstanding Section 59-2-306 and subject to Subsection (5), for a calendar
314     year in which a taxpayer qualifies for an exemption described in Subsection (2)[(a)](b) after the
315     calendar year described in Subsection (4)(a), a signed statement described in Section 59-2-306
316     with respect to the taxable tangible personal property that is exempt under Subsection
317     (2)[(a)](b) may only require the taxpayer to certify, under penalty of perjury, that the taxpayer
318     qualifies for the exemption under Subsection (2)[(a)](b).
319          (c) If a taxpayer qualifies for an exemption described in Subsection (2)[(a)](b) for five
320     consecutive years and files a signed statement for each of those years in accordance with
321     Section 59-2-306 and Subsection (4)(b), a county assessor may not require the taxpayer to file a
322     signed statement for each continuing consecutive year for which the taxpayer qualifies for the
323     exemption.
324          (d) If a taxpayer qualifies for an exemption described in Subsection [(2)(b) or] (2)(c)
325     for an item of tangible taxable personal property, a county assessor may not require the
326     taxpayer to include the item on a signed statement described in Section 59-2-306.
327          (5) A signed statement with respect to qualifying exempt primary residential rental
328     personal property is as provided in Section 59-2-103.5.
329          (6) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
330     commission may make rules to administer this section and provide for uniform
331     implementation.
332          Section 3. Effective date.
333          This bill takes effect on January 1, 2022.