1     
PROPERTY TAX DEFERRAL REVISIONS

2     
2023 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Lincoln Fillmore

5     
House Sponsor: Jordan D. Teuscher

6     

7     LONG TITLE
8     General Description:
9          This bill modifies provisions related to property tax deferral.
10     Highlighted Provisions:
11          This bill:
12          ▸     modifies defined terms;
13          ▸     addresses when deferred property taxes come due;
14          ▸     allows a surviving spouse to take ownership of residential property without
15     triggering an obligation to repay deferred property taxes;
16          ▸     clarifies the requirements for recording and maintaining a lien securing payment of
17     deferred property taxes;
18          ▸     for certain deferrals, requires the owner be current on all property tax and tax notice
19     charges;
20          ▸     establishes penalties for providing false information to a county related to a deferral
21     or an abatement; and
22          ▸     makes technical and conforming changes.
23     Money Appropriated in this Bill:
24          None
25     Other Special Clauses:
26          This bill provides retrospective operation.
27     Utah Code Sections Affected:
28     AMENDS:
29          59-2-1801, as last amended by Laws of Utah 2022, Chapter 242
30          59-2-1802, as last amended by Laws of Utah 2022, Chapter 242
31          59-2-1804, as last amended by Laws of Utah 2022, Chapter 242
32          63I-2-263, as last amended by Laws of Utah 2022, Chapters 63, 209, 240, 242, 264,
33     354, and 435
34          63J-1-602.2, as last amended by Laws of Utah 2022, Chapters 59, 68, 154, 224, 236,
35     242, and 447 and last amended by Coordination Clause, Laws of Utah 2022,
36     Chapter 154
37     ENACTS:
38          59-2-1802.5, Utah Code Annotated 1953
39          59-2-1806, Utah Code Annotated 1953
40     

41     Be it enacted by the Legislature of the state of Utah:
42          Section 1. Section 59-2-1801 is amended to read:
43          59-2-1801. Definitions.
44          As used in this part:
45          (1) "Abatement" means a tax abatement described in Section 59-2-1803.
46          (2) "Deferral" means a [tax deferral described in] postponement of a tax due date
47     granted in accordance with Section 59-2-1802 or 59-2-1802.5.
48          (3) "Eligible owner" means an owner of an attached or a detached single-family
49     residence:
50          (a) (i) who is 75 years old or older on or before December 31 of the year in which the
51     individual applies for a deferral under this part;
52          [(b)] (ii) whose household income does not exceed 200% of the maximum household
53     income certified to a homeowner's credit described in Section 59-2-1208; and
54          [(c)] (iii) whose household liquid resources do not exceed 20 times the amount of
55     property taxes levied on the owner's residence for the preceding calendar year[.]; or
56          (b) that is a trust described in Section 59-2-1805 if the grantor of the trust is an
57     individual described in Subsection (3)(a).
58          (4) "Household" means the same as that term is defined in Section 59-2-1202.
59          (5) "Household income" means the same as that term is defined in Section 59-2-1202.
60          (6) "Household liquid resources" means the following resources that are not included
61     in an individual's household income and held by one or more members of the individual's
62     household:
63          (a) cash on hand;
64          (b) money in a checking or savings account;
65          (c) savings certificates; and
66          (d) stocks or bonds[; and].
67          [(e) lump sum payments.]
68          (7) "Indigent individual" is a poor individual as described in Utah Constitution, Article
69     XIII, Section 3, Subsection (4), who:
70          (a) (i) is at least 65 years old; or
71          (ii) is less than 65 years old and:
72          (A) the county finds that extreme hardship would prevail on the individual if the
73     county does not defer or abate the individual's taxes; or
74          (B) the individual has a disability;
75          (b) has a total household income, as defined in Section 59-2-1202, of less than the
76     maximum household income certified to a homeowner's credit described in Section 59-2-1208;
77          (c) resides for at least 10 months of the year in the residence that would be subject to
78     the requested abatement or deferral; and
79          (d) cannot pay the tax assessed on the individual's residence when the tax becomes due.
80          (8) "Property taxes due" means the taxes due on an indigent individual's property:
81          (a) for which a county granted an abatement under Section 59-2-1803; and
82          (b) for the calendar year for which the county grants the abatement.
83          (9) "Property taxes paid" means an amount equal to the sum of:
84          (a) the amount of property taxes the indigent individual paid for the taxable year for
85     which the indigent individual applied for the abatement; and
86          (b) the amount of the abatement the county grants under Section 59-2-1803.
87          (10) "Relative" means a spouse, child, parent, grandparent, grandchild, brother, sister,
88     parent-in-law, brother-in-law, sister-in-law, nephew, niece, aunt, uncle, first cousin, or a spouse
89     of any of these individuals.
90          (11) "Residence" means real property where an individual resides, including:
91          (a) a mobile home, as defined in Section 41-1a-102; or
92          (b) a manufactured home, as defined in Section 41-1a-102.
93          Section 2. Section 59-2-1802 is amended to read:
94          59-2-1802. Tax deferral -- County discretion to grant deferral -- Creation of lien
95     and due date.
96          (1) (a) In accordance with this part and after receiving an application and giving notice
97     to the taxpayer, a county may [defer] grant a deferral of a tax on residential property[, allowing
98     the taxpayer to pay the tax at a later date].
99          (b) In determining [a deferral] whether to grant an application for a deferral under this
100     section, a county shall consider an asset transferred to a relative by an applicant for deferral, if
101     the transfer took place during the three years [prior to] before the day on which the applicant
102     applied for deferral.
103          (2) A county may grant a deferral described in Subsection (1) at any time:
104          (a) after the holder of each mortgage or trust deed outstanding on the property gives
105     written approval of the application; and
106          (b) if the applicant is not the owner of income-producing assets that could be liquidated
107     to pay the tax.
108          [(3) In accordance with this part, if the conditions described in Subsection (4) are
109     satisfied, a county:]
110          [(a) on or after January 1, 2022, may defer a tax on an attached single-family residence
111     or a detached single-family residence; or]
112          [(b) on or after January 1, 2025, shall defer a tax on an attached single-family residence
113     or a detached single-family residence.]
114          [(4) The conditions described in Subsection (3) are as follows:]
115          [(a) the owner of the single-family residence is:]
116          [(i) an eligible owner; or]
117          [(ii) a trust described in Section 59-2-1805 for which the grantor is an eligible owner;]
118          [(b) the single-family residence was the eligible owner's primary residence as of
119     January 1 of the year for which the eligible owner applies for a deferral;]
120          [(c) (i) subject to Subsection (5), the value of the single-family residence for the year
121     for which the eligible owner applies for a deferral is no greater than 100% of the median
122     property value of attached and detached single-family residences within the county; or]
123          [(ii) the eligible owner has owned the single-family residence for a continuous 20 year
124     period as of January 1 of the year for which the eligible owner applies for a deferral; and]
125          [(d) the holder of each mortgage or trust deed outstanding on the single-family
126     residence gives written approval of the deferral.]
127          [(5) The values described in Subsection (4)(c) are based on the county assessment roll
128     for the county in which the single-family residence is located.]
129          [(6) For purposes of Subsection (4)(c)(ii), if a single-family residence is transferred
130     between an eligible owner and a trust described in Section 59-2-1805, ownership is considered
131     continuous if the eligible owner is the grantor of the trust.]
132          [(7) Taxes deferred by the county accumulate with interest as a lien against the
133     residential property, as described in Subsection (8), until the owner sells or otherwise disposes
134     of the residential property.]
135          [(8) Deferred taxes under this section:]
136          [(a) bear interest at an interest rate equal to 50% of the rate described in Subsections
137     59-2-1331(2)(c) and (d); and]
138          [(b) have the same status as a lien as described in Sections 59-2-1301 and 59-2-1325.]
139          [(9) If the owner of residential property that is granted deferral under this section is an
140     indigent individual, during the period of deferral the county may not subject the residential
141     property to a tax sale.]
142          [(10) (a) Upon written application from a county in a form prescribed by the
143     commission, the commission shall reimburse the county for the amount of any tax that the
144     county defers in accordance with Subsections (3) through (6).]
145          [(b) The commission may not reimburse a county for:]
146          [(i) an amount of a tax before the county grants the eligible owner a deferral of the tax;
147     or]
148          [(ii) a tax assessed after December 31, 2026.]
149          [(11) A county that receives money in accordance with this section for a deferred tax
150     shall:]
151          [(a) distribute the money to the taxing entities in the same proportion the county would
152     have distributed the revenue from the deferred tax; and]
153          [(b) repay the money:]
154          [(i) in an amount equal to the amount necessary to satisfy the lien described in
155     Subsection (7) as of the earlier of:]
156          [(A) the day on which the county repays the money; or]
157          [(B) the day on which the lien described in Subsection (7) is satisfied; and]
158          [(ii) no later than June 30 of the calendar year immediately following the calendar year
159     in which the lien described in Subsection (7) is satisfied.]
160          [(12) The commission shall deposit money received under this section into the General
161     Fund.]
162          (3) (a) Taxes deferred under this part accumulate with interest and applicable recording
163     fees as a lien against the residential property.
164          (b) A lien described in this Subsection (3) has the same legal status as a lien described
165     in Section 59-2-1325.
166          (c) To release the lien described in this Subsection (3), an owner shall pay the total
167     amount subject to the lien:
168          (i) upon the owner selling or otherwise disposing of the residential property; or
169          (ii) when the residential property is no longer the owner's primary residence.
170          (d) (i) Notwithstanding Subsection (3)(c), an owner that receives a deferral does not
171     have to pay the deferred taxes and applicable recording fees when the residential property
172     transfers:
173          (A) to the owner's surviving spouse as a result of the owner's death; or
174          (B) between the owner and a trust described in Section 59-2-1805 for which the owner
175     is the grantor.
176          (ii) After the residential property transfers to the owner's surviving spouse, the deferred
177     taxes and applicable recording fees are due:
178          (A) upon the surviving spouse selling or otherwise disposing of the residential
179     property; or
180          (B) when the residential property is no longer the surviving spouse's primary residence.
181          (e) When the deferral period ends:
182          (i) the lien becomes due as a property tax subject to the collection procedures described
183     in Section 59-2-1331; and
184          (ii) the date of levy is the date that the deferral period ends.
185          (4) (a) If a county grants an owner more than one deferral for the same single-family
186     residence, the county is not required to submit for recording more than one lien.
187          (b) Each subsequent deferral relates back to the date of the initial lien filing.
188          (5) (a) For each residential property for which the county grants a deferral, the treasurer
189     shall maintain a record that is an itemized account of the total amount subject to the lien for
190     deferred property taxes.
191          (b) The record described in this Subsection (5) is the official record of the amount of
192     the lien.
193          (6) Taxes deferred under this part bear interest at a rate equal to 50% of the rate
194     described in Subsections 59-2-1331(2)(c) and (d).
195          Section 3. Section 59-2-1802.5 is enacted to read:
196          59-2-1802.5. Nondiscretionary tax deferral for elderly property owners.
197          (1) An eligible owner may apply for a deferral under this section if:
198          (a) the eligible owner uses the single-family residence as the eligible owner's primary
199     residence as of January 1 of the year for which the eligible owner applies for the deferral;
200          (b) with respect to the single-family residence, there are no:
201          (i) delinquent property taxes;
202          (ii) delinquent tax notice charges; or
203          (iii) outstanding penalties, interest, or administrative costs related to a delinquent
204     property tax or a delinquent tax notice charge;
205          (c) (i) the value of the single-family residence for which the eligible owner applies for
206     the deferral is no greater than the median property value of:
207          (A) attached single-family residences within the county, if the single-family residence
208     is an attached single-family residence; or
209          (B) detached single-family residences within the county, if the single-family residence
210     is a detached single-family residence; or
211          (ii) the eligible owner has owned the single-family residence for a continuous 20-year
212     period as of January 1 of the year for which the eligible owner applies for the deferral; and
213          (d) the holder of each mortgage or trust deed outstanding on the single-family
214     residence gives written approval of the deferral.
215          (2) If the conditions in Subsection (1) are satisfied and the applicant complies with the
216     other applicable provisions of this part:
217          (a) a county shall defer the property tax on an attached single-family residence or a
218     detached single-family residence for an application of deferral made on or after January 1,
219     2024; and
220          (b) a county may defer the property tax on an attached single-family residence or a
221     detached single-family residence for an application of deferral made before January 1, 2024.
222          (3) The values described in Subsection (1)(c) are based on the county assessment roll
223     for the county in which the single-family residence is located.
224          (4) For purposes of Subsection (1)(c)(ii), ownership is considered continuous
225     regardless of whether the single-family residence is transferred between an eligible owner who
226     is an individual and an eligible owner that is a trust.
227          (5) (a) Upon application from a county in a form prescribed by the commission, the
228     commission shall reimburse the county for the amount of any tax that the county defers in
229     accordance with this section.
230          (b) The commission may not reimburse a county:
231          (i) before the county approves the deferral; or
232          (ii) for a tax assessed after December 31, 2026.
233          (c) A county that receives money in accordance with this Subsection (5) shall:
234          (i) distribute the money to the taxing entities in the same proportion the county would
235     have distributed the revenue from the deferred tax; and
236          (ii) repay the money no later than 30 days after the day on which the deferral lien is
237     satisfied.
238          (d) The commission shall deposit money received under Subsection (5)(c)(ii) into the
239     General Fund.
240          Section 4. Section 59-2-1804 is amended to read:
241          59-2-1804. Application for tax deferral or tax abatement.
242          (1) (a) Except as provided in Subsection (1)(b) or (2), an applicant for deferral or
243     abatement for the current tax year shall annually file an application on or before September 1
244     with the county in which the applicant's property is located.
245          (b) If a county finds good cause exists, the county may extend until December 31 the
246     deadline described in Subsection (1)(a).
247          (c) An indigent individual may apply and potentially qualify for deferral, abatement, or
248     both.
249          (2) (a) A county shall extend the default application deadline by one additional year if
250     the applicant had been approved for a deferral under this part in the prior year; or
251          (b) the county determines that:
252          (i) the applicant or a member of the applicant's immediate family had an illness or
253     injury that prevented the applicant from filing the application on or before the default
254     application deadline;
255          (ii) a member of the applicant's immediate family died during the calendar year of the
256     default application deadline;
257          (iii) the failure of the applicant to file the application on or before the default
258     application deadline was beyond the reasonable control of the applicant; or
259          (iv) denial of an application would be unjust or unreasonable.
260          [(2)] (3) (a) An applicant shall include in an application a signed statement that
261     describes the eligibility of the applicant for deferral or abatement.
262          (b) For an application for a deferral under [Subsection 59-2-1802(3)] Section
263     59-2-1802.5, the requirements described in Subsection [(2)(a)] (3)(a) include:
264          (i) proof that the applicant resides at the single-family residence for which the applicant
265     seeks the deferral;
266          (ii) proof of age; and
267          (iii) proof of household income.
268          [(3)] (4) Both spouses shall sign an application if the application seeks a deferral or
269     abatement on a residence:
270          (a) in which both spouses reside; and
271          (b) that the spouses own as joint tenants.
272          [(4)] (5) If an applicant is dissatisfied with a county's decision on the applicant's
273     application for deferral or abatement, the applicant may appeal the decision to the commission
274     in accordance with Section 59-2-1006.
275          [(5)] (6) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
276     Act, the commission may make rules to implement this section.
277          Section 5. Section 59-2-1806 is enacted to read:
278          59-2-1806. Fraudulent or negligent representation -- Penalties and interest.
279          (1) If a county determines that a person knowingly provided false information to the
280     county related to a requirement under this part, the county shall:
281          (a) deny or revoke any deferral or abatement related to the false information; and
282          (b) recover by assessment the amount of the claimed or granted deferral or abatement,
283     plus interest that accrues at a rate of 1% per month beginning the day on which the person
284     knowingly provided the false information.
285          (2) If a county determines that a person negligently provided false information to the
286     county related to a requirement under this part, the county shall:
287          (a) reduce by 10% the amount of any deferral or abatement for which the person is
288     eligible and that relates to the false information; and
289          (b) recover by assessment the amount of any deferral or abatement the county approved
290     in reliance on the false information that exceeds the amount to which the person is entitled,
291     plus interest that accrues at a rate of 1% per month beginning the day on which the deferral or
292     abatement was approved.
293          Section 6. Section 63I-2-263 is amended to read:
294          63I-2-263. Repeal dates: Title 63A to Title 63N.
295          (1) Title 63A, Chapter 2, Part 5, Educational Interpretation and Translation Services
296     Procurement Advisory Council is repealed July 1, 2025.
297          (2) Section 63A-17-303 is repealed July 1, 2023.
298          (3) Subsection 63A-17-304(1)(c) is repealed July 1, 2022.
299          (4) Title 63C, Chapter 22, Digital Wellness, Citizenship, and Safe Technology
300     Commission is repealed July 1, 2023.
301          (5) Section 63G-1-502 is repealed July 1, 2022.
302          (6) The following sections regarding the World War II Memorial Commission are
303     repealed July 1, 2022:
304          (a) Section 63G-1-801;
305          (b) Section 63G-1-802;
306          (c) Section 63G-1-803; and
307          (d) Section 63G-1-804.
308          [(7) Title 63H, Chapter 5, Utah State Railroad Museum Authority, is repealed on July
309     1, 2022.]
310          [(8)] (7) Section 63H-7a-303 is repealed July 1, 2024.
311          [(9)] (8) Subsection 63H-7a-403(2)(b), regarding the charge to maintain the public
312     safety communications network, is repealed July 1, 2033.
313          [(10)] (9) Subsection [63J-1-602.2(44)] 63J-1-602.2(43), which lists appropriations to
314     the State Tax Commission for property tax deferral reimbursements, is repealed July 1, 2027.
315          [(11)] (10) Sections 63M-7-213 and 63M-7-213.5 are repealed January 1, 2023.
316          [(12)] (11) Section 63M-7-217 is repealed July 1, 2022.
317          [(13)] (12) Subsection 63N-2-213(12)(a), relating to claiming a tax credit in the same
318     taxable year as the targeted business income tax credit, is repealed December 31, 2024.
319          [(14)] (13) Title 63N, Chapter 2, Part 3, Targeted Business Income Tax Credit in an
320     Enterprise Zone, is repealed December 31, 2024.
321          Section 7. Section 63J-1-602.2 is amended to read:
322          63J-1-602.2. List of nonlapsing appropriations to programs.
323          Appropriations made to the following programs are nonlapsing:
324          (1) The Legislature and the Legislature's committees.
325          (2) The State Board of Education, including all appropriations to agencies, line items,
326     and programs under the jurisdiction of the State Board of Education, in accordance with
327     Section 53F-9-103.
328          (3) The Percent-for-Art Program created in Section 9-6-404.
329          (4) The LeRay McAllister Critical Land Conservation Program created in Section
330     4-46- 301.
331          (5) The Utah Lake Authority created in Section 11-65-201.
332          (6) Dedicated credits accrued to the Utah Marriage Commission as provided under
333     Subsection 17-16-21(2)(d)(ii).
334          (7) The Division of Wildlife Resources for the appraisal and purchase of lands under
335     the Pelican Management Act, as provided in Section 23-21a-6.
336          (8) The Emergency Medical Services Grant Program in Section 26-8a-207.
337          (9) The primary care grant program created in Section 26-10b-102.
338          (10) Sanctions collected as dedicated credits from Medicaid providers under
339     Subsection 26-18-3(7).
340          (11) The Utah Health Care Workforce Financial Assistance Program created in Section
341     26-46-102.
342          (12) The Rural Physician Loan Repayment Program created in Section 26-46a-103.
343          (13) The Opiate Overdose Outreach Pilot Program created in Section 26-55-107.
344          (14) The Utah Medical Education Council for the:
345          (a) administration of the Utah Medical Education Program created in Section
346     26-69-403;
347          (b) provision of medical residency grants described in Section 26-69-407; and
348          (c) provision of the forensic psychiatric fellowship grant described in Section
349     26-69-408.
350          (15) Funds that the Department of Alcoholic Beverage Services retains in accordance
351     with Subsection 32B-2-301(8)(a) or (b).
352          (16) The General Assistance program administered by the Department of Workforce
353     Services, as provided in Section 35A-3-401.
354          (17) The Utah National Guard, created in Title 39, Militia and Armories.
355          (18) The State Tax Commission under Section 41-1a-1201 for the:
356          (a) purchase and distribution of license plates and decals; and
357          (b) administration and enforcement of motor vehicle registration requirements.
358          (19) The Search and Rescue Financial Assistance Program, as provided in Section
359     53-2a-1102.
360          (20) The Motorcycle Rider Education Program, as provided in Section 53-3-905.
361          (21) The Utah Board of Higher Education for teacher preparation programs, as
362     provided in Section 53B-6-104.
363          (22) Innovation grants under Section 53G-10-608, except as provided in Subsection
364     53G-10-608(6).
365          (23) The Division of Services for People with Disabilities, as provided in Section
366     62A-5-102.
367          (24) The Division of Fleet Operations for the purpose of upgrading underground
368     storage tanks under Section 63A-9-401.
369          (25) The Utah Seismic Safety Commission, as provided in Section 63C-6-104.
370          (26) The Division of Technology Services for technology innovation as provided under
371     Section 63A-16-903.
372          (27) The Office of Administrative Rules for publishing, as provided in Section
373     63G-3-402.
374          (28) The Colorado River Authority of Utah, created in Title 63M, Chapter 14,
375     Colorado River Authority of Utah Act.
376          (29) The Governor's Office of Economic Opportunity to fund the Enterprise Zone Act,
377     as provided in Title 63N, Chapter 2, Part 2, Enterprise Zone Act.
378          (30) The Governor's Office of Economic Opportunity's Rural Employment Expansion
379     Program, as described in Title 63N, Chapter 4, Part 4, Rural Employment Expansion Program.
380          (31) Programs for the Jordan River Recreation Area as described in Section 65A-2-8.
381          (32) The Division of Human Resource Management user training program, as provided
382     in Section 63A-17-106.
383          (33) A public safety answering point's emergency telecommunications service fund, as
384     provided in Section 69-2-301.
385          (34) The Traffic Noise Abatement Program created in Section 72-6-112.
386          (35) The money appropriated from the Navajo Water Rights Negotiation Account to
387     the Division of Water Rights, created in Section 73-2-1.1, for purposes of participating in a
388     settlement of federal reserved water right claims.
389          (36) The Judicial Council for compensation for special prosecutors, as provided in
390     Section 77-10a-19.
391          (37) A state rehabilitative employment program, as provided in Section 78A-6-210.
392          (38) The Utah Geological Survey, as provided in Section 79-3-401.
393          (39) The Bonneville Shoreline Trail Program created under Section 79-5-503.
394          (40) Adoption document access as provided in Sections 78B-6-141, 78B-6-144, and
395     78B-6-144.5.
396          (41) Indigent defense as provided in Title 78B, Chapter 22, Part 4, Utah Indigent
397     Defense Commission.
398          (42) The program established by the Division of Facilities Construction and
399     Management under Section 63A-5b-703 under which state agencies receive an appropriation
400     and pay lease payments for the use and occupancy of buildings owned by the Division of
401     Facilities Construction and Management.
402          (43) The State Tax Commission for reimbursing counties for deferred property taxes in
403     accordance with Section [59-2-1802] 59-2-1802.5.
404          Section 8. Retrospective operation.
405          This bill provides retrospective operation to January 1, 2023.