Bill Summary – FastDemocracy

LEGISLATIVE GENERAL COUNSEL                                          S.B. 182
Approved for Filing: A.V. Arthur 6                         th
                                                                 4 Sub. (Pumpkin)
          6 02-22-24 2:47 PM 6
                     Representative Steve Eliason proposes the following substitute bill:
                     PROPERTY TAX ASSESSMENT AMENDMENTS
                                        2024 GENERAL SESSION
                                           STATE OF UTAH
                               Chief Sponsor: Wayne A. Harper
                                  House Sponsor: Steve Eliason
 6
 LONG TITLE
 General Description:
        This bill modifies provisions related to property tax assessment.
 Highlighted Provisions:
        This bill:
        < provides additional remedies for a property owner who experiences an increase in
 valuation over a certain threshold solely due to valuation when there are no
 significant changes to the property;
        < requires reporting to the State Tax Commission and the Revenue and Taxation
 Interim Committee when a county values property over the threshold;
        < modifies the burdens of proof for parties to an appeal at the county board of
 equalization and State Tax Commission;
        < directs county assessors in rural areas to seek assistance in the assessment process;
        < requires a county assessor to classify types of real property for purposes of property   4 thSub. S.B. 182
 tax assessments and provides that the classification is public information;
        < provides that the State Tax Commission will conduct an education and training
 program for county assessors;
        < provides for a penalty for a county assessor who fails to comply with the education
 and training requirement;
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        < establishes when a tax is delinquent after receiving a deferral for property with an
 increase in valuation over a certain threshold;
        < provides for posting of payment when a partial payment is made on property subject
 to deferral; and
        < makes technical and conforming changes.
 Money Appropriated in this Bill:
        None
 Other Special Clauses:
        This bill provides retrospective operation.
 Utah Code Sections Affected:
 AMENDS:
        59-2-303, as last amended by Laws of Utah 2019, Chapter 16
        59-2-303.1, as last amended by Laws of Utah 2016, Chapter 135
        59-2-703, as last amended by Laws of Utah 2008, Chapter 382
        59-2-1004, as last amended by Laws of Utah 2022, Chapter 168
        59-2-1008, as repealed and reenacted by Laws of Utah 1988, Chapter 3
        59-2-1330, as last amended by Laws of Utah 2015, Chapter 201
        59-2-1331, as last amended by Laws of Utah 2018, Chapter 197
        59-2-1343, as last amended by Laws of Utah 2018, Chapter 197
        59-2-1801, as last amended by Laws of Utah 2023, Chapter 354
 ENACTS:
        59-2-109.1, Utah Code Annotated 1953
        59-2-303.3, Utah Code Annotated 1953
        59-2-702.5, Utah Code Annotated 1953
        59-2-1006.1, Utah Code Annotated 1953
        59-2-1802.1, Utah Code Annotated 1953
 REPEALS AND REENACTS:
        59-2-109, as last amended by Laws of Utah 2023, Chapter 471
54
 Be it enacted by the Legislature of the state of Utah:
        Section 1. Section 59-2-109 is repealed and reenacted to read:
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        59-2-109. Burden of proof.
        (1) For an appeal to the commission involving the valuation or equalization of real
 property assessed under Part 2, Assessment of Property, the party carrying the burden of proof
 shall demonstrate:
        (a) substantial error in the original assessed value; and
        (b) a sound evidentiary basis to support the value the party requests.
        (2) (a) For an appeal to the county board of equalization or the commission involving
 the valuation or equalization of real property assessed under Part 3, County Assessment, the
 party carrying the burden of proof shall demonstrate:
        (i) except as provided in Subsection (2)(b), substantial error in:
        (A) the original assessed value in an appeal to the county board of equalization; or
        (B) the value set by the county board of equalization in an appeal to the commission;
 and
        (ii) a sound evidentiary basis to support the value the party requests.
        (b) The party carrying the burden of proof does not have to show substantial error as
 required by Subsection (2)(a)(i) if the party is requesting:
        (i) the original assessed value in an appeal to the county board of equalization; or
        (ii) the value set by the county board of equalization in an appeal to the commission.
        (3) For property assessed under Part 2, Assessment of Property, the commission has the
 burden of proof, if the commission is a party to the appeal that asserts that the fair market value
 of the assessed property is greater than the original assessed value for that calendar year.
        (4) For property assessed under Part 3, County Assessment, the following shall carry
 the burden of proof before a county board of equalization or the commission:
        (a) the county assessor or the county board of equalization that is a party to the appeal
 has the burden of proof to support the value the county assessor or the county board of
 equalization requests; and
        (b) the taxpayer that is a party to the appeal has the burden of proof to support the
 value the taxpayer requests.
        (5) A preponderance of the evidence suffices to sustain the burden for all parties.
        Section 2. Section 59-2-109.1 is enacted to read:
        59-2-109.1. Burden of proof for an appeal involving property eligible for deferral
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 for 2023.
           (1) This section applies to an appeal to the commission involving the valuation or
 equalization of real property that is eligible for a deferral under Section 59-2-1802.1 for the
 calendar year that begins on January 1, 2023.
           (2) (a) The party carrying the burden of proof shall demonstrate:
           (i) except as provided in Subsection (2)(b), substantial error in the value set by the
 county board of equalization; and
           (ii) a sound evidentiary basis to support the value the party requests.
           (b) The party carrying the burden of proof does not have to show substantial error as
 required by Subsection (2)(a)(i) if the party is requesting the value set by the county board of
 equalization in an appeal to the commission.
           (3) The following shall carry the burden of proof:
           (a) the county board of equalization that is a party to the appeal has the burden of proof
 to support the value the county board of equalization requests; and
           (b) the taxpayer that is a party to the appeal has the burden of proof to support the
 value the taxpayer requests.
           Section 3. Section 59-2-303 is amended to read:
           59-2-303. General duties of county assessor.
           (1) (a) Before May 22 each year, the county assessor shall:
           (i) ascertain the names of the owners of all property that is subject to taxation by the
 county;
           (ii) except as provided in Subsection (2), assess the property to the owner, claimant of
 record, or occupant in possession or control at midnight on January 1 of the taxable year; and
           (iii) conduct the review process described in Section 59-2-303.2.
           (b) No mistake in the name or address of the owner or supposed owner of property
 renders the assessment invalid.
           (2) If a conveyance of ownership of the real property was recorded in the office of a
 county recorder after January 1 but more than 14 calendar days before the day on which the
 county treasurer mails the tax notice, the county assessor shall assess the property to the new
 owner.
           (3) A county assessor shall become fully acquainted with all property in the county
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 assessor's county, as provided in Section 59-2-301.
           (4) A county assessor in a county of the third, fourth, fifth, or sixth class shall seek
 assistance from other county assessors or an appraiser contracted in accordance with Section
 59-2-703 for the county assessor to meet the requirements of Section 59-2-303.1.
           Section 4. Section 59-2-303.1 is amended to read:
           59-2-303.1. Mandatory cyclical appraisals.
           (1) For purposes of this section:
           (a) "Corrective action" includes:
           (i) factoring pursuant to Section 59-2-704;
           (ii) notifying the state auditor that the county failed to comply with the requirements of
 this section; or
           (iii) filing a petition for a court order requiring a county to take action.
           (b) "Mass appraisal system" means a computer assisted mass appraisal system that:
           (i) a county assessor uses to value real property; and
           (ii) includes at least the following system features:
           (A) has the ability to update all parcels of real property located within the county each
 year;
           (B) can be programmed with specialized criteria;
           (C) provides uniform and equal treatment of parcels within the same class of real
 property throughout the county; and
           (D) annually updates all parcels of residential real property within the county using
 accepted valuation methodologies as determined by rule.
           (c) "Property review date" means the date a county assessor completes a detailed
 review of the property characteristics of a parcel of real property in accordance with Subsection
 (3)(a).
           (2) (a) The county assessor shall annually update property values of property as
 provided in Section 59-2-301 based on a systematic review of current market data.
           (b) The county assessor shall conduct the annual update described in Subsection (2)(a)
 by using a mass appraisal system [on or before the following:].
           [(i) for a county of the first class, January 1, 2009;]
           [(ii) for a county of the second class, January 1, 2011;]
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          [(iii) for a county of the third class, January 1, 2014; and]
          [(iv) for a county of the fourth, fifth, or sixth class, January 1, 2015.]
          (c) The county assessor and the commission shall jointly certify that the county's mass
 appraisal system meets the requirements:
          (i) described in Subsection (1)(b); and
          (ii) of the commission.
          (3) (a) In addition to the requirements in Subsection (2), the county assessor shall
 complete a detailed review of property characteristics for each property at least once every five
 years.
          (b) The county assessor shall maintain on the county's [computer] mass appraisal
 system, a record of the last property review date for each parcel of real property located within
 the county assessor's county.
          (c) (i) The county assessor shall maintain on the county's mass appraisal system a
 parcel's property tax class or category that is used for the purpose of property tax assessment on
 the annual assessment date.
          (ii) The classifications or categories of real property under Subsection (3)(c)(i) shall
 include, at minimum:
          (A) primary residential;
          (B) commercial;
          (C) vacant land;
          (D) secondary residential; and
          (E) non-taxable.
          (iii) The classifications or categories of real property used by the county assessor, and
 the classification or category applied to a specific parcel, is public information.
          (4) (a) The commission shall take corrective action if the commission determines that:
          (i) a county assessor has not satisfactorily followed the current mass appraisal
 standards, as provided by law;
          (ii) the sales-assessment ratio, coefficients of dispersion, or other statistical measures
 of appraisal performance related to the studies required by Section 59-2-704 are not within the
 standards provided by law; or
          (iii) the county assessor has failed to comply with the requirements of this section.
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        (b) If a county assessor fails to comply with the requirements of this section for one
 year, the commission shall assist the county assessor in fulfilling the requirements of
 Subsections (2) and (3).
        (c) If a county assessor fails to comply with the requirements of this section for two
 consecutive years, the county will lose the county's allocation of the revenue generated
 statewide from the imposition of the multicounty assessing and collecting levy authorized in
 Sections 59-2-1602 and 59-2-1603.
        (d) If a county loses its allocation of the revenue generated statewide from the
 imposition of the multicounty assessing and collecting levy described in Subsection (4)(c), the
 revenue the county would have received shall be distributed to the Multicounty Appraisal Trust
 created by interlocal agreement by all counties in the state.
        (5) (a) On or before July 1, 2008, the county assessor shall prepare a five-year plan to
 comply with the requirements of Subsections (2) and (3).
        (b) The plan shall be available in the county assessor's office for review by the public
 upon request.
        (c) The plan shall be annually reviewed and revised as necessary.
        (6) (a) A county assessor shall create, maintain, and regularly update a database
 containing the following information that the county assessor may use to enhance the county's
 ability to accurately appraise and assess property on an annual basis:
        [(a)] (i) fee and other appraisals;
        [(b)] (ii) property characteristics and features;
        [(c)] (iii) property surveys;
        [(d)] (iv) sales data; and
        [(e)] (v) any other data or information on sales, studies, transfers, changes to property,
 or property characteristics.
        (b) A county assessor may provide access to the information in the database to another
 county assessor that requests assistance in accordance with Section 59-2-303.
        Section 5. Section 59-2-303.3 is enacted to read:
        59-2-303.3. Automatic review for property with 150% or more valuation increase.
        (1) As used in this section, "qualifying increase" means a valuation increase that is
 equal to or more than 150% higher than the previous year's valuation for property that:
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           (a) is county assessed; and
           (b) on or after January 1 of the previous year and before January 1 of the current year,
 has not had:
           (i) a physical improvement if the fair market value of the physical improvement
 increases enough to result in the valuation increase solely as a result of the physical
 improvement;
           (ii) a zoning change if the fair market value of the real property increases enough to
 result in the valuation increase solely as a result of the zoning change; or
           (iii) a change in the legal description of the real property, if the fair market value of the
 real property increases enough to result in the valuation increase solely as a result of the change
 in the legal description of the real property.
           (2) (a) For the calendar year beginning on January 1, 2023, the county assessor shall
 review the assessment of the property with a qualifying increase on or before May 31, 2024.
           (b) For a calendar year beginning on or after January 1, 2024, the county assessor shall
 review the assessment of a property with a qualifying increase before delivery of the
 assessment book to the county auditor in accordance with Section 59-2-311.
           (c) The county assessor shall retain a record of the properties for which the county
 assessor conducts a review in accordance with this Subsection (2) and the results of that
 review.
           (3) (a) When the county assessor conducts the review described in Subsection (2):
           (i) if the county assessor determines that the assessed value of the property reflects the
 property's fair market value, the county assessor may not adjust the property's assessed value;
 or
           (ii) if the county assessor determines that the assessed value of the property does not
 reflect the review property's fair market value, the count