Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 347 First Substitute (2022GS)

Sponsor

Rep. Welton, D.

Final action

Governor Signed 3/23/2022

Outcome

Became law — signed by Gov. Spencer J. Cox

Summary

What it does

• This bill:
• modifies the definition of nonprofit entity for purposes of the exclusive use exemption;
• provides that a county board of equalization may not waive the application or annual statement requirements for an owner of certain tax exempt property;
• provides that a county board of equalization may require a property owner making an application for exemption or reduction to appear before the board of equalization;
• provides conditions under which a property owner may submit a late annual statement for certain tax exempt property;
• modifies the deadline for submitting an application to receive a property tax exemption for certain property acquired after January 1; and
• makes technical and conforming changes.

Every vote on this bill

Bill text

PROPERTY TAX EXEMPTION AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Douglas R. Welton
Senate Sponsor: 
Curtis S. Bramble
LONG TITLE
General Description:
This bill modifies exemption provisions of the Property Tax Act.
Highlighted Provisions:
This bill:
▸ modifies the definition of nonprofit entity for purposes of the exclusive use
exemption;
▸ provides that a county board of equalization may not waive the application or
annual statement requirements for an owner of certain tax exempt property;
▸ provides that a county board of equalization may require a property owner making
an application for exemption or reduction to appear before the board of
equalization;
▸ provides conditions under which a property owner may submit a late annual
statement for certain tax exempt property;
▸ modifies the deadline for submitting an application to receive a property tax
exemption for certain property acquired after January 1; and
▸ makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
This bill provides a special effective date.
Utah Code Sections Affected:
AMENDS:
59-2-1101
, as last amended by Laws of Utah 2020, Fifth Special Session, Chapter 4
59-2-1102
, as last amended by Laws of Utah 2019, Chapter 453
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
59-2-1101
 is amended to read:
59-2-1101.
Definitions -- Exemption of certain property -- Proportional payments
for certain property -- Exception -- County legislative body authority to adopt rules or
ordinances.
(1) As used in this section:
(a) "Charitable purposes" means:
(i) for property used as a nonprofit hospital or a nursing home, the standards outlined in
Howell v. County Board of Cache County ex rel. IHC Hospitals, Inc., 881 P.2d 880 (Utah
1994); and
(ii) for property other than property described in Subsection (1)(a)(i), providing a gift
to the community.
(b) (i) "Educational purposes" means purposes carried on by an educational
organization that normally:
(A) maintains a regular faculty and curriculum; and
(B) has a regularly enrolled body of pupils and students.
(ii) "Educational purposes" includes:
(A) the physical or mental teaching, training, or conditioning of competitive athletes by
a national governing body of sport recognized by the United States Olympic Committee that
qualifies as being tax exempt under Section 501(c)(3), Internal Revenue Code; and
(B) an activity in support of or incidental to the teaching, training, or conditioning
described in 
this
 Subsection (1)(b)(ii).
(c) "Exclusive use exemption" means a property tax exemption under Subsection
(3)(a)(iv), for property owned by a nonprofit entity used exclusively for one or more of the
following purposes:
(i) religious purposes;
(ii) charitable purposes; or
(iii) educational purposes.
(d) (i) "Farm machinery and equipment" means tractors, milking equipment and
storage and cooling facilities, feed handling equipment, irrigation equipment, harvesters,
choppers, grain drills and planters, tillage tools, scales, combines, spreaders, sprayers, haying
equipment, including balers and cubers, and any other machinery or equipment used primarily
for agricultural purposes.
(ii) "Farm machinery and equipment" does not include vehicles required to be
registered with the Motor Vehicle Division or vehicles or other equipment used for business
purposes other than farming.
(e) "Gift to the community" means:
(i) the lessening of a government burden; or
(ii) (A) the provision of a significant service to others without immediate expectation
of material reward;
(B) the use of the property is supported to a material degree by donations and gifts
including volunteer service;
(C) the recipients of the charitable activities provided on the property are not required
to pay for the assistance received, in whole or in part, except that if in part, to a material
degree;
(D) the beneficiaries of the charitable activities provided on the property are
unrestricted or, if restricted, the restriction bears a reasonable relationship to the charitable
objectives of the nonprofit entity that owns the property; and
(E) any commercial activities provided on the property are subordinate or incidental to
charitable activities provided on the property.
(f) "Government exemption" means a property tax exemption provided under
Subsection (3)(a)(i), (ii), or (iii).
(g) (i) "Nonprofit entity" means an entity:
(A) that is organized on a nonprofit basis, that dedicates the entity's property to the
entity's nonprofit purpose, and that makes no dividend or other form of financial benefit
available to a private interest;
(B) for which, upon dissolution, the entity's assets are distributable only for exempt
purposes under state law or to the government for a public purpose; 
and
[
(C) that does not receive income from any source, including gifts, donations, or
payments from recipients of products or services, that produces a profit to the entity in the
sense that the income exceeds operating and long-term maintenance expenses; and
]
[
(D)
] 
(C)
 for which none of the net earnings or donations made to the entity inure to
the benefit of private shareholders or other individuals, as the private inurement standard has
been interpreted under Section 501(c)(3), Internal Revenue Code.
(ii) "Nonprofit entity" includes an entity:
(A) if the entity is treated as a disregarded entity for federal income tax purposes and
wholly owned by, and controlled under the direction of, a nonprofit entity; and
(B) for which none of the net earnings and profits of the entity inure to the benefit of
any person other than a nonprofit entity.
(h) "Tax relief" means an exemption, deferral, or abatement that is authorized by this
part, Part 18, Tax Deferral and Tax Abatement, or Part 19, Armed Forces Exemptions.
(2) (a) Except as provided in Subsection (2)(b) or (c), tax relief may be allowed only if
the claimant is the owner of the property as of January 1 of the year the exemption is claimed.
(b) Notwithstanding Subsection (2)(a), a claimant shall collect and pay a proportional
tax based upon the length of time that the property was not owned by the claimant if:
(i) the claimant is a federal, state, or political subdivision entity described in
Subsection (3)(a)(i), (ii), or (iii); or
(ii) pursuant to Subsection (3)(a)(iv):
(A) the claimant is a nonprofit entity; and
(B) the property is used exclusively for religious, charitable, or educational purposes.
(c) Subsection (2)(a) does not apply to an exemption described in Part 19, Armed
Forces Exemptions .
(3) (a) The following property is exempt from taxation:
(i) property exempt under the laws of the United States;
(ii) property of:
(A) the state;
(B) school districts; and
(C) public libraries;
(iii) except as provided in Title 11, Chapter 13, Interlocal Cooperation Act, property of:
(A) counties;
(B) cities;
(C) towns;
(D) local districts;
(E) special service districts; and
(F) all other political subdivisions of the state;
(iv) except as provided in Subsection (6) or (7), property owned by a nonprofit entity
used exclusively for one or more of the following purposes:
(A) religious purposes;
(B) charitable purposes; or
(C) educational purposes;
(v) places of burial not held or used for private or corporate benefit;
(vi) farm machinery and equipment;
(vii) a high tunnel, as defined in Section 
10-9a-525
;
(viii) intangible property; and
(ix) the ownership interest of an out-of-state public agency, as defined in Section
11-13-103
:
(A) if that ownership interest is in property providing additional project capacity, as
defined in Section 
11-13-103
; and
(B) on which a fee in lieu of ad valorem property tax is payable under Section
11-13-302
.
(b) For purposes of a property tax exemption for property of school districts under
Subsection (3)(a)(ii)(B), a charter school under Title 53G, Chapter 5, Charter Schools, is
considered to be a school district.
(4) Subject to Subsection (5), if property that is allowed an exclusive use exemption or
a government exemption ceases to qualify for the exemption because of a change in the
ownership of the property:
(a) the new owner of the property shall pay a proportional tax based upon the period of
time:
(i) beginning on the day that the new owner acquired the property; and
(ii) ending on the last day of the calendar year during which the new owner acquired
the property; and
(b) the new owner of the property and the person from whom the new owner acquires
the property shall notify the county assessor, in writing, of the change in ownership of the
property within 30 days from the day that the new owner acquires the property.
(5) Notwithstanding Subsection (4)(a), the proportional tax described in Subsection
(4)(a):
(a) is subject to any exclusive use exemption or government exemption that the
property is entitled to under the new ownership of the property; and
(b) applies only to property that is acquired after December 31, 2005.
(6) (a) A property may not receive an exemption under Subsection (3)(a)(iv) if:
(i) the nonprofit entity that owns the property participates in or intervenes in any
political campaign on behalf of or in opposition to any candidate for public office, including
the publishing or distribution of statements; or
(ii) a substantial part of the activities of the nonprofit entity that owns the property
consists of carrying on propaganda or otherwise attempting to influence legislation, except as
provided under Subsection 501(h), Internal Revenue Code.
(b) Whether a nonprofit entity is engaged in an activity described in Subsection (6)(a)
shall be determined using the standards described in Section 501, Internal Revenue Code.
(7) A property may not receive an exemption under Subsection (3)(a)(iv) if:
(a) the property is used for a purpose that is not religious, charitable, or educational;
and
(b) the use for a purpose that is not religious, charitable, or educational is more than de
minimis.
(8) A county legislative body may adopt rules or ordinances to:
(a) effectuate the exemptions, deferrals, abatements, or other relief from taxation
provided in this part, Part 18, Tax Deferral and Tax Abatement, or Part 19, Armed Forces
Exemptions; and
(b) designate one or more persons to perform the functions given the county under this
part, Part 18, Tax Deferral and Tax Abatement, or Part 19, Armed Forces Exemptions.
(9) If a person is dissatisfied with a tax relief decision made under designated
decision-making authority as described in Subsection (8)(b), that person may appeal the
decision to the commission under Section 
59-2-1006
.
Section 2. Section 
59-2-1102
 is amended to read:
59-2-1102.
Determination of exemptions by board of equalization -- Appeal --
Application for exemption -- Annual statement -- Exceptions.
(1) (a) For property assessed under Part 3, County Assessment, the county board of
equalization may, after giving notice in a manner prescribed by rule, determine whether certain
property within the county is exempt from taxation.
(b) The decision of the county board of equalization described in Subsection (1)(a)
shall:
(i) be in writing; and
(ii) include:
(A) a statement of facts; and
(B) the statutory basis for its decision.
(c) Except as provided in Subsection [
(11)
] 
(10)
(a), a copy of the decision described in
Subsection (1)(a) shall be sent on or before May 15 to the person applying for the exemption.
[
(2) The county board of equalization shall notify an owner of exempt property that has
previously received an exemption but failed to file an annual statement in accordance with
Subsection (9)(c), of the county board of equalization's intent to revoke the exemption on or
before April 1.
]
[
(3) (a)
] 
(2)
 Except as provided in Subsection [
(8)
] 
(7)
 and subject to Subsection [
(9)
]
(8)
, a reduction 
in the value of property
 may not be made under this part or Part 18, Tax
Deferral and Tax Abatement, [
in the value of property
] and an exemption may not be granted
under this part or Part 19, Armed Forces Exemptions, unless the [
party
] 
person
 affected or the
[
party's
] 
person's
 agent:
[
(i)
] 
(a)
 [
makes and files with the county board of equalization
] 
submits
 a written
application [
for the reduction or exemption,
] 
to the county board of equalization; and
(b)
 [
verified
] 
verifies the application
 by signed statement[
; and
]
.
[
(ii) appears before the county board of equalization and shows facts upon which it is
claimed the reduction should be made, or exemption granted.
]
[
(b) Notwithstanding Subsection (9), the county board of equalization may waive:
]
[
(i) the application or personal appearance requirements of Subsection (3)(a), (4)(b), or
(9)(a); or
]
[
(ii) the annual statement requirements of Subsection (9)(c).
]
[
(4)
] 
(3)
 (a) [
Before the county board of equalization grants any application for
exemption or reduction, the
] 
The
 county board of equalization may [
examine under oath the
person or agent making the application
] 
require a person making an application for exemption
or reduction to appear before the county board of equalization and be examined under oath
.
(b) [
Except as provided in Subsection (3)(b)
] 
If the county board of equalization
requires a person making an application for exemption or reduction to appear before the county
board of equalization
, a reduction may not be made or exemption granted unless the person [
or
the agent making the application attends
] 
appears
 and answers all questions pertinent to the
inquiry.
[
(5)
] 
(4)
 For the hearing on the application, the county board of equalization may
subpoena any witnesses, and hear and take any evidence in relation to the pending application.
[
(6)
] 
(5)
 Except as provided in Subsection [
(11)
] 
(10)
(b), the county board of
equalization shall hold hearings and render a written decision to determine any exemption on
or before May 1 in each year.
[
(7)
] 
(6)
 Any property owner dissatisfied with the decision of the county board of
equalization regarding any reduction or exemption may appeal to the commission under
Section 
59-2-1006
.
[
(8)
] 
(7)
 Notwithstanding Subsection [
(3)(a)
] 
(2)
, a county board of equalization may
not require an owner of property to file an application in accordance with this section in order
to claim an exemption for the property under the following:
(a) Subsections 
59-2-1101
(3)(a)(i) through (iii);
(b) Subsection 
59-2-1101
(3)(a)(vi) or (viii);
(c) Section 
59-2-1110
;
(d) Section 
59-2-1111
;
(e) Section 
59-2-1112
;
(f) Section 
59-2-1113
; or
(g) Section 
59-2-1114
.
[
(9)
] 
(8)
 (a) Except as provided in [
Subsections (3)(b) and (9)(b),
] 
Subsection (8)(b),
for property described in Subsection 
59-2-1101
(3)(a)(iv) or (v), a county board of equalization
shall, consistent with Subsection [
(10)
] 
(9)
, require an owner of that property to file an
application in accordance with this section in order to claim an exemption for that property.
(b) Notwithstanding Subsection [
(9)
] 
(8)
(a), a county board of equalization may not
require an owner of property described in Subsection 
59-2-1101
(3)(a)(iv) or (v) to file an
application under Subsection [
(9)
] 
(8)
(a) if:
(i) [
(A)
] the owner filed an application under Subsection [
(9)(a); or
] 
(8)(a);
[
(B) the county board of equalization waived the application requirements in
accordance with Subsection (3)(b);
]
(ii) the county board of equalization determines that the owner may claim an
exemption for that property; and
(iii) the exemption described in Subsection [
(9)
] 
(8)
(b)(ii) is in effect.
(c) (i) [
Except as provided in Subsection (3)(b), for
] 
For
 the time period that an owner
is granted an exemption in accordance with this section for property described in Subsection
59-2-1101
(3)(a)(iv) or (v), a county board of equalization shall require the owner to file an
annual statement 
on or before March 1
 on a form prescribed by the commission establishing
that the property continues to be eligible for the exemption.
(ii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission shall make rules providing:
(A) the form for the annual statement required by Subsection [
(9)
] 
(8)
(c)(i);
(B) the contents of the form for the annual statement required by Subsection [
(9)
]
(8)
(c)(i); and
(C) procedures and requirements for making the annual statement required by
Subsection [
(9)
] 
(8)
(c)(i).
(iii) The commission shall make the form described in Subsection [
(9)
] 
(8)
(c)(ii)(A)
available to counties.
(d) On or before April 1, a county board of equalization shall notify each property
owner who fails to timely file an annual statement in accordance with Subsection (8)(c) of the
county board of equalization's intent to revoke the exemption.
(e) An owner of exempt property described in Subsection 
59-2-1101
(3)(a)(iv) may file
the annual statement described in Subsection (8)(c) after March 1 if the property owner:
(i) files the annual statement on or before March 31; and
(ii) includes a statement of facts establishing that the property owner was unable to file
the annual statement on or before March 1 due to one of the following conditions and no other
responsible party was capable of filing the annual statement:
(A) a medical emergency of the property owner, an immediate family member of the
property owner, or the property owner's agent;
(B) the death of the property owner, an immediate family member of the property
owner, or the property owner's agent; or
(C) other extraordinary and unanticipated circumstances.
[
(10)
] 
(9)
 (a) For purposes of this Subsection [
(10)
] 
(9)
, "exclusive use exemption" is
as defined in Section 
59-2-1101
.
(b) [
(i)
] For purposes of Subsection (1)(a), [
and except as provided in Subsections
(10)(b)(ii) and (iii),
] when a person acquires property on or after January 1 that qualifies for an
exclusive use exemption, that person may apply for the exclusive use exemption on or before
the later of:
[
(A)
] 
(i)
 the day set by rule as the deadline for filing a property tax exemption
application; or
[
(B)
] 
(ii)
 [
] 
 days after the day on which the property is acquired.
[
(ii) Notwithstanding Subsection (10)(b)(i), a person who acquires property on or after
January 1, 2004, and before January 1, 2005, that qualifies for an exclusive use exemption, may
apply for the exclusive use exemption for the 2004 calendar year on or before September 30,
2005.
]
[
(iii) Notwithstanding Subsection (10)(b)(i), a person who acquires property on or after
January 1, 2005, and before January 1, 2006, that qualifies for an exclusive use exemption, may
apply for the exclusive use exemption for the 2005 calendar year on or before the later of:
]
[
(A) September 30, 2005; or
]
[
(B) 30 days after the day on which the property is acquired.
]
[
(11)
] 
(10)
 (a) Notwithstanding Subsection (1)(c), if an application for an exemption is
filed under Subsection [
(10)
] 
(9)
, a county board of equalization shall send a copy of the
decision described in Subsection (1)(c) to the person applying for the exemption on or before
the later of:
(i) May 15; or
(ii) 45 days after the day on which the application for the exemption is filed.
(b) Notwithstanding Subsection [
(6)
] 
(5)
, if an application for an exemption is filed
under Subsection [
(10)
] 
(9)
, a county board of equalization shall hold the hearing and render
the decision described in Subsection [
(6)
] 
(5)
 on or before the later of:
(i) May 1; or
(ii) 30 days after the day on which the application for the exemption is filed.
Section 3. 
Effective date.
This bill takes effect on January 1, 2023.