Bill Summary – FastDemocracy

Enrolled Copy                                                                         H.B. 47
                              PROPERTY TAX AMENDMENTS
                                      2020 GENERAL SESSION
                                           STATE OF UTAH
                                 Chief Sponsor: Steve Eliason
                               Senate Sponsor: Curtis S. Bramble
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 LONG TITLE
 General Description:
        This bill modifies the Property Tax Act.
 Highlighted Provisions:
        This bill:
        < modifies the definition of incremental value to include project areas created under
 Title 11, Chapter 58, Utah Inland Port Authority Act; Title 63H, Chapter 1, Military
 Installation Development Authority Act; and Title 63N, Chapter 2, Part 5, New
 Convention Facility Development Incentives;
        < defines related terms;
        < modifies the definitions of charitable purposes, educational purposes, and exclusive
 use for purposes of claiming a property tax exemption;
        < provides activities that exclude a person from claiming an exemption for charitable
 purposes, educational purposes, or religious purposes; and
        < changes the effective date of Section 59-2-1101 in S.B. 263, Property Tax
 Definition Amendment, Chapter 496, 2019 General Session.
 Money Appropriated in this Bill:
        None
 Other Special Clauses:
        This bill provides a special effective date.
        This bill provides retrospective operation.
 Utah Code Sections Affected:
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 AMENDS:
        59-2-924, as last amended by Laws of Utah 2018, Chapters 101, 368, and 415
        59-2-1101 (Effective 07/01/20), as last amended by Laws of Utah 2019, Chapters 453
 and 496
 Uncodified Material Affected:
 AMENDS UNCODIFIED MATERIAL:
   Uncodified Section 2, Laws of Utah 2019, Chapter 496
        This uncodified section affects Section 59-2-1101 (Effective 07/01/20).
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 Be it enacted by the Legislature of the state of Utah:
        Section 1. Section 59-2-924 is amended to read:
        59-2-924. Definitions -- Report of valuation of property to county auditor and
 commission -- Transmittal by auditor to governing bodies -- Calculation of certified tax
 rate -- Rulemaking authority -- Adoption of tentative budget -- Notice provided by the
 commission.
        (1) As used in this section:
        (a) (i) "Ad valorem property tax revenue" means revenue collected in accordance with
 this chapter.
        (ii) "Ad valorem property tax revenue" does not include:
        (A) interest;
        (B) penalties;
        (C) collections from redemptions; or
        (D) revenue received by a taxing entity from personal property that is semiconductor
 manufacturing equipment assessed by a county assessor in accordance with Part 3, County
 Assessment.
        (b) "Adjusted tax increment" means the same as that term is defined in Section
 17C-1-102.
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         [(b)] (c) (i) "Aggregate taxable value of all property taxed" means:
         (A) the aggregate taxable value of all real property a county assessor assesses in
 accordance with Part 3, County Assessment, for the current year;
         (B) the aggregate taxable value of all real and personal property the commission
 assesses in accordance with Part 2, Assessment of Property, for the current year; and
         (C) the aggregate year end taxable value of all personal property a county assessor
 assesses in accordance with Part 3, County Assessment, contained on the prior year's tax rolls
 of the taxing entity.
         (ii) "Aggregate taxable value of all property taxed" does not include the aggregate year
 end taxable value of personal property that is:
         (A) semiconductor manufacturing equipment assessed by a county assessor in
 accordance with Part 3, County Assessment; and
         (B) contained on the prior year's tax rolls of the taxing entity.
         (d) "Base taxable value" means:
         (i) for an authority created under Section 11-58-201, the same as that term is defined in
 Section 11-58-102;
         (ii) for an agency created under Section 17C-1-201.5, the same as that term is defined
 in Section 17C-1-102;
         (iii) for an authority created under Section 63H-1-201, the same as that term is defined
 in Section 63H-1-102; or
         (iv) for a host local government, the same as that term is defined in Section 63N-2-502.
         [(c)] (e) "Centrally assessed benchmark value" means an amount equal to the highest
 year end taxable value of real and personal property the commission assesses in accordance
 with Part 2, Assessment of Property, for a previous calendar year that begins on or after
 January 1, 2015, adjusted for taxable value attributable to:
         (i) an annexation to a taxing entity; or
         (ii) an incorrect allocation of taxable value of real or personal property the commission
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 assesses in accordance with Part 2, Assessment of Property.
        [(d)] (f) (i) "Centrally assessed new growth" means the greater of:
        (A) zero; or
        (B) the amount calculated by subtracting the centrally assessed benchmark value
 adjusted for prior year end incremental value from the taxable value of real and personal
 property the commission assesses in accordance with Part 2, Assessment of Property, for the
 current year, adjusted for current year incremental value.
        (ii) "Centrally assessed new growth" does not include a change in value as a result of a
 change in the method of apportioning the value prescribed by the Legislature, a court, or the
 commission in an administrative rule or administrative order.
        [(e)] (g) "Certified tax rate" means a tax rate that will provide the same ad valorem
 property tax revenue for a taxing entity as was budgeted by that taxing entity for the prior year.
        [(f)] (h) "Eligible new growth" means the greater of:
        (i) zero; or
        (ii) the sum of:
        (A) locally assessed new growth;
        (B) centrally assessed new growth; and
        (C) project area new growth or hotel property new growth.
        (i) "Host local government" means the same as that term is defined in Section
 63N-2-502.
        (j) "Hotel property" means the same as that term is defined in Section 63N-2-502.
        (k) "Hotel property new growth" means an amount equal to the incremental value that
 is no longer provided to a host local government as incremental property tax revenue.
        (l) "Incremental property tax revenue" means the same as that term is defined in
 Section 63N-2-502.
        [(g)] (m) "Incremental value" means [the same as that term is defined in Section
 17C-1-102.]:
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         (i) for an authority created under Section 11-58-201, the amount calculated by
 multiplying:
         (A) the difference between the taxable value and the base taxable value of the property
 that is located within a project area and on which property tax differential is collected; and
         (B) the number that represents the percentage of the property tax differential that is
 paid to the authority;
         (ii) for an agency created under Section 17C-1-201.5, the amount calculated by
 multiplying:
         (A) the difference between the taxable value and the base taxable value of the property
 located within a project area and on which tax increment is collected; and
         (B) the number that represents the adjusted tax increment from that project area that is
 paid to the agency;
         (iii) for an authority created under Section 63H-1-201, the amount calculated by
 multiplying:
         (A) the difference between the taxable value and the base taxable value of the property
 located within a project area and on which property tax allocation is collected; and
         (B) the number that represents the percentage of the property tax allocation from that
 project area that is paid to the authority; or
         (iv) for a host local government, an amount calculated by multiplying:
         (A) the difference between the taxable value and the base taxable value of the hotel
 property on which incremental property tax revenue is collected; and
         (B) the number that represents the percentage of the incremental property tax revenue
 from that hotel property that is paid to the host local government.
         [(h)] (n) (i) "Locally assessed new growth" means the greater of:
         (A) zero; or
         (B) the amount calculated by subtracting the year end taxable value of real property the
 county assessor assesses in accordance with Part 3, County Assessment, for the previous year,
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 adjusted for prior year end incremental value from the taxable value of real property the county
 assessor assesses in accordance with Part 3, County Assessment, for the current year, adjusted
 for current year incremental value.
        (ii) "Locally assessed new growth" does not include a change in:
        (A) value as a result of factoring in accordance with Section 59-2-704, reappraisal, or
 another adjustment;
        (B) assessed value based on whether a property is allowed a residential exemption for a
 primary residence under Section 59-2-103;
        (C) assessed value based on whether a property is assessed under Part 5, Farmland
 Assessment Act; or
        (D) assessed value based on whether a property is assessed under Part 17, Urban
 Farming Assessment Act.
        [(i)] (o) "Project area" means [the same as that term is defined in Section 17C-1-102.]:
        (i) for an authority created under Section 11-58-201, the same as that term is defined in
 Section 11-58-102;
        (ii) for an agency created under Section 17C-1-201.5, the same as that term is defined
 in Section 17C-1-102; or
        (iii) for an authority created under Section 63H-1-201, the same as that term is defined
 in Section 63H-1-102.
        [(j)] (p) "Project area new growth" means [an amount equal to the incremental value
 that is no longer provided to an agency as tax increment.]:
        (i) for an authority created under Section 11-58-201, an amount equal to the
 incremental value that is no longer provided to an authority as property tax differential;
        (ii) for an agency created under Section 17C-1-201.5, an amount equal to the
 incremental value that is no longer provided to an agency as tax increment; or
        (iii) for an authority created under Section 63H-1-201, an amount equal to the
 incremental value that is no longer provided to an authority as property tax allocation.
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        Enrolled Copy                                                                            H.B. 47
        (q) "Property tax allocation" means the same as that term is defined in Section
 63H-1-102.
        (r) "Property tax differential" means the same as that term is defined in Section
 11-58-102.
        (s) "Tax increment" means the same as that term is defined in Section 17C-1-102.
        (2) Before June 1 of each year, the county assessor of each county shall deliver to the
 county auditor and the commission the following statements:
        (a) a statement containing the aggregate valuation of all taxable real property a county
 assessor assesses in accordance with Part 3, County Assessment, for each taxing entity; and
        (b) a statement containing the taxable value of all personal property a county assessor
 assesses in accordance with Part 3, County Assessment, from the prior year end values.
        (3) The county auditor shall, on or before June 8, transmit to the governing body of
 each taxing entity:
        (a) the statements described in Subsections (2)(a) and (b);
        (b) an estimate of the revenue from personal property;
        (c) the certified tax rate; and
        (d) all forms necessary to submit a tax levy request.
        (4) (a) Except as otherwise provided in this section, the certified tax rate shall be
 calculated by dividing the ad valorem property tax revenue that a taxing entity budgeted for the
 prior year by the amount calculated under Subsection (4)(b).
        (b) For purposes of Subsection (4)(a), the legislative body of a taxing entity shall
 calculate an amount as follows:
        (i) calculate for the taxing entity the difference between:
        (A) the aggregate taxable value of all property taxed; and
        (B) any adjustments for current year incremental value;
        (ii) after making the calculation required by Subsection (4)(b)(i), calculate an amount
 determined by increasing or decreasing the amount calculated under Subsection (4)(b)(i) by the
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 average of the percentage net change in the value of taxable property for the equalization
 period for the three calendar years immediately preceding the current calendar year;
         (iii) after making the calculation required by Subsection (4)(b)(ii), calculate the product
 of:
         (A) the amount calculated under Subsection (4)(b)(ii); and
         (B) the percentage of property taxes collected for the five calendar years immediately
 preceding the current calendar year; and
         (iv) after making the calculation required by Subsection (4)(b)(iii), calculate an amount
 determined by:
         (A) multiplying the percentage of property taxes collected for the five calendar years
 immediately preceding the current calendar year by eligible new growth; and
         (B) subtracting the amount calculated under Subsection (4)(b)(iv)(A) from the amount
 calculated under Subsection (4)(b)(iii).
         (5) A certified tax rate for a taxing entity described in this Subsection (5) shall be
 calculated as follows:
         (a) except as provided in Subsection (5)(b), for a new taxing entity, the certified tax
 rate is zero;
         (b) for a municipality incorporated on or after July 1, 1996, the certified tax rate is:
         (i) in a county of the first, second, or third class, the levy imposed for municipal-type
 services under Sections 17-34-1 and 17-36-9; and
         (ii) in a county of the fourth, fifth, or sixth class, the levy imposed for general county
 purposes and such other levies imposed solely for the municipal-type services identified in
 Section 17-34-1 and Subsection 17-36-3(22); and
         (c) for debt service voted on by the public, the certified tax rate is the actual levy
 imposed by that section, except that a certified tax rate for the following levies shall be
 calculated in accordance with Section 59-2-913 and this section:
         (i) a school levy provided for under Section 53F-8-301, 53F-8-302, or 53F-8-303; and
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         (ii) a levy to pay for the costs of state legislative mandates or judicial or administrative
 orders under Section 59-2-1602.
         (6) (a) A judgment levy imposed under Section 59-2-1328 or 59-2-1330 may be
 imposed at a rate that is sufficient to generate only the revenue required to satisfy one or more
 eligible judgments.
         (b) The ad valorem property tax revenue generated by a judgment levy described in
 Subsection (6)(a) may not be considered in establishing a taxing entity's aggregate certified tax
 rate.
         (7) (a) For the purpose of calculating the certified tax rate, the county auditor shall use:
         (i) the taxable value of real property:
         (A) the county assessor assesses in accordance with Part 3, County Assessment; and
         (B) contained on the assessment roll;
         (ii) the year end taxable value of personal property:
         (A) a county assessor assesses in accordance with Part 3, County Assessment; and
         (B) contained on the prior year's assessment roll; and
         (iii) the taxable value of real and personal property the commission assesses in
 accordance with Part 2, Assessment of Property.
         (b) For purposes of Subsection (7)(a), taxable value does not include eligible new
 growth.
         (8) (a) On or before June 30, a taxing entity shall annually adopt a tentative budget.
         (b) If a taxing entity intends to exceed the certified tax rate, the taxing entity shall
 notify the county auditor of:
         (i) the taxing entity's intent to exceed the certified tax rate; and
         (ii) the