1     
PROPERTY TAX DEFERRAL AMENDMENTS

2     
2022 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Lincoln Fillmore

5     
House Sponsor: Robert M. Spendlove

6     

7     LONG TITLE
8     General Description:
9          This bill modifies the deferral provisions of the Property Tax Act.
10     Highlighted Provisions:
11          This bill:
12          ▸     defines terms;
13          ▸     addresses property tax deferral for certain owners of a single-family residence;
14          ▸     modifies the interest rate that applies to deferred property taxes;
15          ▸     clarifies the required contents of an application for a deferral;
16          ▸     directs the State Tax Commission to reimburse a requesting county for the amount
17     of any property taxes that the county defers during a specified time period;
18          ▸     addresses repayment of any money a county receives; and
19          ▸     makes technical and conforming changes.
20     Money Appropriated in this Bill:
21          This bill appropriates in fiscal year 2023:
22          ▸     to the Utah State Tax Commission -- Tax Administration -- Property Tax Deferral,
23     as a one-time appropriation:
24               •     from the General Fund $8,000,000.
25     Other Special Clauses:
26          This bill provides retrospective operation.
27     Utah Code Sections Affected:
28     AMENDS:
29          59-2-1801, as enacted by Laws of Utah 2019, Chapter 453
30          59-2-1802, as enacted by Laws of Utah 2019, Chapter 453
31          59-2-1804, as enacted by Laws of Utah 2019, Chapter 453
32          63I-2-263, as last amended by Laws of Utah 2021, First Special Session, Chapter 4
33          63J-1-602.2, as last amended by Laws of Utah 2021, Chapters 179, 344, 412, 421, and
34     424
35     

36     Be it enacted by the Legislature of the state of Utah:
37          Section 1. Section 59-2-1801 is amended to read:
38          59-2-1801. Definitions.
39          As used in this part:
40          (1) "Abatement" means a tax abatement described in Section 59-2-1803.
41          (2) "Deferral" means a tax deferral described in Section 59-2-1802.
42          (3) "Eligible owner" means an owner of an attached or a detached single-family
43     residence:
44          (a) who is 75 years old or older on or before December 31 of the year in which the
45     individual applies for a deferral under this part;
46          (b) whose household income does not exceed 200% of the maximum household
47     income certified to a homeowner's credit described in Section 59-2-1208; and
48          (c) whose household liquid resources do not exceed 20 times the amount of property
49     taxes levied on the owner's residence for the preceding calendar year.
50          (4) "Household" means the same as that term is defined in Section 59-2-1202.
51          (5) "Household income" means the same as that term is defined in Section 59-2-1202.
52          (6) "Household liquid resources" means the following resources that are not included
53     in an individual's household income and held by one or more members of the individual's
54     household:
55          (a) cash on hand;
56          (b) money in a checking or savings account;
57          (c) savings certificates;
58          (d) stocks or bonds; and
59          (e) lump sum payments.
60          [(3)] (7) "Indigent individual" is a poor individual as described in Utah Constitution,
61     Article XIII, Section 3, Subsection (4), who:
62          (a) (i) is at least 65 years old; or
63          (ii) is less than 65 years old and:
64          (A) the county finds that extreme hardship would prevail on the individual if the
65     county does not defer or abate the individual's taxes; or
66          (B) the individual has a disability;
67          (b) has a total household income, as defined in Section 59-2-1202, of less than the
68     maximum household income certified to a homeowner's credit described in [Subsection
69     59-2-1208(1)] Section 59-2-1208;
70          (c) resides for at least 10 months of the year in the residence that would be subject to
71     the requested abatement or deferral; and
72          (d) cannot pay the tax assessed on the individual's residence when the tax becomes due.
73          [(4)] (8) "Property taxes due" means the taxes due on an indigent individual's property:
74          (a) for which a county granted an abatement under Section 59-2-1803; and
75          (b) for the calendar year for which the county grants the abatement.
76          [(5)] (9) "Property taxes paid" means an amount equal to the sum of:
77          (a) the amount of property taxes the indigent individual paid for the taxable year for
78     which the indigent individual applied for the abatement; and
79          (b) the amount of the abatement the county grants under Section 59-2-1803.
80          [(6)] (10) "Relative" means a spouse, child, parent, grandparent, grandchild, brother,
81     sister, parent-in-law, brother-in-law, sister-in-law, nephew, niece, aunt, uncle, first cousin, or a
82     spouse of any of these individuals.
83          [(7)] (11) "Residence" means real property where an individual resides, including:
84          (a) a mobile home, as defined in Section 41-1a-102; or
85          (b) a manufactured home, as defined in Section 41-1a-102.
86          Section 2. Section 59-2-1802 is amended to read:
87          59-2-1802. Tax deferral.
88          (1) (a) In accordance with this part and after giving notice to the taxpayer, a county
89     may defer a tax on residential property [after giving notice to the taxpayer], allowing the
90     taxpayer to pay the tax at a later date.
91          (b) In determining a deferral, a county shall consider an asset transferred to a relative
92     by an applicant for deferral, if the transfer took place during the three years prior to the day on
93     which the applicant applied for deferral.
94          (2) A county may grant a deferral described in Subsection (1) at any time:
95          (a) after the holder of each mortgage or trust deed outstanding on the property gives
96     written approval of the application; and
97          (b) if the applicant is not the owner of income-producing assets that could be liquidated
98     to pay the tax.
99          (3) In accordance with this part, if the conditions described in Subsection (4) are
100     satisfied, a county:
101          (a) on or after January 1, 2022, may defer a tax on an attached single-family residence
102     or a detached single-family residence; or
103          (b) on or after January 1, 2025, shall defer a tax on an attached single-family residence
104     or a detached single-family residence.
105          (4) The conditions described in Subsection (3) are as follows:
106          (a) the owner of the single-family residence is:
107          (i) an eligible owner; or
108          (ii) a trust described in Section 59-2-1805 for which the grantor is an eligible owner;
109          (b) the single-family residence was the eligible owner's primary residence as of January
110     1 of the year for which the eligible owner applies for a deferral;
111          (c) (i) subject to Subsection (5), the value of the single-family residence for the year for
112     which the eligible owner applies for a deferral is no greater than 100% of the median property
113     value of attached and detached single-family residences within the county; or
114          (ii) the eligible owner has owned the single-family residence for a continuous 20 year
115     period as of January 1 of the year for which the eligible owner applies for a deferral; and
116          (d) the holder of each mortgage or trust deed outstanding on the single-family
117     residence gives written approval of the deferral.
118          (5) The values described in Subsection (4)(c) are based on the county assessment roll
119     for the county in which the single-family residence is located.
120          (6) For purposes of Subsection (4)(c)(ii), if a single-family residence is transferred
121     between an eligible owner and a trust described in Section 59-2-1805, ownership is considered
122     continuous if the eligible owner is the grantor of the trust.
123          [(3)] (7) Taxes deferred by the county accumulate with interest as a lien against the
124     residential property, as described in Subsection [(4)] (8), until the owner sells or otherwise
125     disposes of the residential property.
126          [(4)] (8) Deferred taxes under this section:
127          [(a) bear interest at an interest rate equal to the lesser of:]
128          [(i) 6%; or]
129          [(ii) the federal funds rate target:]
130          [(A) established by the Federal Open Markets Committee; and]
131          [(B) that exists on the January 1 immediately preceding the day on which the taxes are
132     deferred; and]
133          (a) bear interest at an interest rate equal to 50% of the rate described in Subsections
134     59-2-1331(2)(c) and (d); and
135          (b) have the same status as a lien as described in Sections 59-2-1301 and 59-2-1325.
136          [(5)] (9) If the owner of residential property that is granted deferral under this section is
137     an indigent individual, during the period of deferral the county may not subject the residential
138     property to a tax sale.
139          (10) (a) Upon written application from a county in a form prescribed by the
140     commission, the commission shall reimburse the county for the amount of any tax that the
141     county defers in accordance with Subsections (3) through (6).
142          (b) The commission may not reimburse a county for:
143          (i) an amount of a tax before the county grants the eligible owner a deferral of the tax;
144     or
145          (ii) a tax assessed after December 31, 2026.
146          (11) A county that receives money in accordance with this section for a deferred tax
147     shall:
148          (a) distribute the money to the taxing entities in the same proportion the county would
149     have distributed the revenue from the deferred tax; and
150          (b) repay the money:
151          (i) in an amount equal to the amount necessary to satisfy the lien described in
152     Subsection (7) as of the earlier of:
153          (A) the day on which the county repays the money; or
154          (B) the day on which the lien described in Subsection (7) is satisfied; and
155          (ii) no later than June 30 of the calendar year immediately following the calendar year
156     in which the lien described in Subsection (7) is satisfied.
157          (12) The commission shall deposit money received under this section into the General
158     Fund.
159          Section 3. Section 59-2-1804 is amended to read:
160          59-2-1804. Application for tax deferral or tax abatement.
161          (1) (a) Except as provided in Subsection (1)(b), an applicant for deferral or abatement
162     for the current tax year shall annually file an application on or before September 1 with the
163     county in which the applicant's property is located.
164          (b) If a county finds good cause exists, the county may extend until December 31 the
165     deadline described in Subsection (1)(a).
166          (c) An indigent individual may apply and potentially qualify for deferral, abatement, or
167     both.
168          (2) (a) An applicant shall include in an application a signed statement that describes the
169     eligibility of the applicant for deferral or abatement.
170          (b) For an application for a deferral under Subsection 59-2-1802(3), the requirements
171     described in Subsection (2)(a) include:
172          (i) proof that the applicant resides at the single-family residence for which the applicant
173     seeks the deferral;
174          (ii) proof of age; and
175          (iii) proof of household income.
176          (3) Both spouses shall sign an application if the application seeks a deferral or
177     abatement on a residence:
178          (a) in which both spouses reside; and
179          (b) that the spouses own as joint tenants.
180          (4) If an applicant is dissatisfied with a county's decision on the applicant's application
181     for deferral or abatement, the applicant may appeal the decision to the commission in
182     accordance with Section 59-2-1006.
183          (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
184     commission may make rules to implement this section.
185          Section 4. Section 63I-2-263 is amended to read:
186          63I-2-263. Repeal dates, Title 63A to Title 63N.
187          (1) Section 63A-3-111 is repealed June 30, 2021.
188          (2) Title 63C, Chapter 19, Higher Education Strategic Planning Commission is
189     repealed July 1, 2021.
190          (3) Title 63C, Chapter 22, Digital Wellness, Citizenship, and Safe Technology
191     Commission is repealed July 1, 2023.
192          (4) Section 63G-1-502 is repealed July 1, 2022.
193          (5) The following sections regarding the World War II Memorial Commission are
194     repealed on July 1, 2022:
195          (a) Section 63G-1-801;
196          (b) Section 63G-1-802;
197          (c) Section 63G-1-803; and
198          (d) Section 63G-1-804.
199          (6) Section 63H-7a-303 is repealed July 1, 2024.
200          (7) Subsection 63J-1-206(3)(c), relating to coronavirus, is repealed July 1, 2021.
201          (8) Subsection 63J-1-602.2(42), which lists appropriations to the State Tax
202     Commission for property tax deferral reimbursements, is repealed July 1, 2027.
203          [(8)] (9) Sections 63M-7-213 and 63M-7-213.5 are repealed on January 1, 2023.
204          [(9)] (10) Section 63M-7-217 is repealed on July 1, 2022.
205          [(10)] (11) Title 63N, Chapter 13, Part 3, Facilitating Public-private Partnerships Act,
206     is repealed January 1, 2024.
207          [(11)] (12) Title 63N, Chapter 15, COVID-19 Economic Recovery Programs, is
208     repealed December 31, 2021.
209          Section 5. Section 63J-1-602.2 is amended to read:
210          63J-1-602.2. List of nonlapsing appropriations to programs.
211          Appropriations made to the following programs are nonlapsing:
212          (1) The Legislature and the Legislature's committees.
213          (2) The State Board of Education, including all appropriations to agencies, line items,
214     and programs under the jurisdiction of the State Board of Education, in accordance with
215     Section 53F-9-103.
216          (3) The Percent-for-Art Program created in Section 9-6-404.
217          (4) The LeRay McAllister Critical Land Conservation Program created in Section
218     11-38-301.
219          (5) Dedicated credits accrued to the Utah Marriage Commission as provided under
220     Subsection 17-16-21(2)(d)(ii).
221          (6) The Trip Reduction Program created in Section 19-2a-104.
222          (7) The Division of Wildlife Resources for the appraisal and purchase of lands under
223     the Pelican Management Act, as provided in Section 23-21a-6.
224          (8) The [emergency medical services grant program] Emergency Medical Services
225     Grant Program in Section 26-8a-207.
226          (9) The primary care grant program created in Section 26-10b-102.
227          (10) Sanctions collected as dedicated credits from Medicaid [provider] providers under
228     Subsection 26-18-3(7).
229          (11) The Utah Health Care Workforce Financial Assistance Program created in Section
230     26-46-102.
231          (12) The Rural Physician Loan Repayment Program created in Section 26-46a-103.
232          (13) The Opiate Overdose Outreach Pilot Program created in Section 26-55-107.
233          (14) Funds that the Department of Alcoholic Beverage Control retains in accordance
234     with Subsection 32B-2-301(9)(a) or (b).
235          (15) The General Assistance program administered by the Department of Workforce
236     Services, as provided in Section 35A-3-401.
237          (16) The Utah National Guard, created in Title 39, Militia and Armories.
238          (17) The State Tax Commission under Section 41-1a-1201 for the:
239          (a) purchase and distribution of license plates and decals; and
240          (b) administration and enforcement of motor vehicle registration requirements.
241          (18) The Search and Rescue Financial Assistance Program, as provided in Section
242     53-2a-1102.
243          (19) The Motorcycle Rider Education Program, as provided in Section 53-3-905.
244          (20) The Utah Board of Higher Education for teacher preparation programs, as
245     provided in Section 53B-6-104.
246          (21) The Medical Education Program administered by the Medical Education Council,
247     as provided in Section 53B-24-202.
248          (22) The Division of Services for People with Disabilities, as provided in Section
249     62A-5-102.
250          (23) The Division of Fleet Operations for the purpose of upgrading underground
251     storage tanks under Section 63A-9-401.
252          (24) The Utah Seismic Safety Commission, as provided in Section 63C-6-104.
253          (25) [Appropriations to the] The Division of Technology Services for technology
254     innovation as provided under Section 63A-16-903.
255          (26) The Office of Administrative Rules for publishing, as provided in Section
256     63G-3-402.
257          (27) The Colorado River Authority of Utah, created in Title 63M, Chapter 14,
258     Colorado River Authority of Utah Act.
259          (28) The Governor's Office of Economic Opportunity to fund the Enterprise Zone Act,
260     as provided in Title 63N, Chapter 2, Part 2, Enterprise Zone Act.
261          (29) [Appropriations to fund the] The Governor's Office of Economic Opportunity's
262     Rural Employment Expansion Program, as described in Title 63N, Chapter 4, Part 4, Rural
263     Employment Expansion Program.
264          (30) [Appropriations to fund programs] Programs for the Jordan River Recreation Area
265     as described in Section 65A-2-8.
266          (31) The Division of Human Resource Management user training program, as provided
267     in Section 63A-17-106.
268          (32) A public safety answering point's emergency telecommunications service fund, as
269     provided in Section 69-2-301.
270          (33) The Traffic Noise Abatement Program created in Section 72-6-112.
271          (34) The money appropriated from the Navajo Water Rights Negotiation Account to
272     the Division of Water Rights, created in Section 73-2-1.1, for purposes of participating in a
273     settlement of federal reserved water right claims.
274          (35) The Judicial Council for compensation for special prosecutors, as provided in
275     Section 77-10a-19.
276          (36) A state rehabilitative employment program, as provided in Section 78A-6-210.
277          (37) The Utah Geological Survey, as provided in Section 79-3-401.
278          (38) The Bonneville Shoreline Trail Program created under Section 79-5-503.
279          (39) Adoption document access as provided in Sections 78B-6-141, 78B-6-144, and
280     78B-6-144.5.
281          (40) Indigent defense as provided in Title 78B, Chapter 22, Part 4, Utah Indigent
282     Defense Commission.
283          (41) The program established by the Division of Facilities Construction and
284     Management under Section 63A-5b-703 under which state agencies receive an appropriation
285     and pay lease payments for the use and occupancy of buildings owned by the Division of
286     Facilities Construction and Management.
287          (42) The State Tax Commission for reimbursing counties for deferred property taxes in
288     accordance with Section 59-2-1802.
289          Section 6. Appropriations.
290          The following sums of money are appropriated for the fiscal year beginning July 1,
291     2022, and ending June 30, 2023. These are additions to amounts previously appropriated for
292     fiscal year 2023. Under the terms and conditions of Title 63J, Chapter 1, Budgetary Procedures
293     Act, the Legislature appropriates the following sums of money from the funds or accounts
294     indicated for the use and support of the government of the state of Utah.
295     ITEM 1
296          To Utah State Tax Commission -- Tax Administration
297               From General Fund, One-time
$8,000,000

298               Schedule of Programs:
299                    Property Tax Deferral                    $8,000,000
300          The Legislature intends that:
301          (1) appropriations provided under this section be used to reimburse counties for
302     deferred property taxes in accordance with Section 59-2-1802; and
303          (2) under Section 63J-1-603, appropriations provided under this section not lapse at the
304     close of fiscal year 2023 and the use of any nonlapsing funds is limited to reimbursing counties
305     for deferred property taxes in accordance with Section 59-2-1802.
306          Section 7. Retrospective operation.
307          This bill has retrospective operation to January 1, 2022.