Rep. Norm Thurston — Voting Record

Bill

Number

S.B. 81 Third Substitute (2022GS)

Sponsor

Sen. Iwamoto, J.

Final action

Governor Signed 3/23/2022

Outcome

Became law — signed by Gov. Spencer J. Cox

Summary

What it does

• This bill:
• defines terms;
• prescribes a valuation method for determining the fair market value of real property subject to a low-income housing covenant;
• requires a county assessor to send a form approved by the State Tax Commission to each owner of real property subject to a low-income housing covenant; and
• makes technical and conforming changes.

Every vote on this bill

Bill text

AFFORDABLE HOUSING TAX AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Jani Iwamoto
House Sponsor: 
Steve Waldrip
LONG TITLE
General Description:
This bill modifies provisions related to the assessment of real property subject to a
low-income housing covenant.
Highlighted Provisions:
This bill:
▸ defines terms;
▸ prescribes a valuation method for determining the fair market value of real property
subject to a low-income housing covenant;
▸ requires a county assessor to send a form approved by the State Tax Commission to
each owner of real property subject to a low-income housing covenant; 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:
59-2-301.3
, as last amended by Laws of Utah 2012, Chapter 31
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
59-2-301.3
 is amended to read:
59-2-301.3.
Definitions -- Assessment of real property subject to a low-income
housing covenant.
(1) As used in this section:
(a) [
"low-income
] 
"Lease up period" means the period that begins the day on which
residential housing located on real property subject to a low-income housing covenant is
available for occupancy and ends the day on which the residential housing achieves 90%
occupancy for a continuous three-month period.
(b) "Low-income
 housing covenant" means an agreement:
(i) between:
(A) the Utah Housing Corporation 
or a government entity
; and
(B) an owner of real property upon which residential rental housing is located; [
and
]
(ii) in which the owner described in Subsection [
(1)(a)(i)(B)
] 
(1)(b)(i)(B)
 agrees to
limit the amount of rent that a renter may be charged for the residential rental housing; and
(iii) that is filed with the county recorder in the county in which the real property is
located.
[
(b) "residential
] 
(c) "Residential
 rental housing" means housing that:
(i) is used:
(A) for residential purposes; and
(B) as a primary residence; and
(ii) is rental property.
(2) 
(a)
 A county assessor shall, in determining the fair market value of real property
subject to a low-income housing covenant[
,
]
:
(i) use the income capitalization approach, if the county assessor finds that the income
capitalization approach is a valid indicator of the property's fair market value;
(ii) in using the income capitalization approach:
(A) calculate the property's net operating income using the reduced rent amounts that
result from the low-income housing covenant; and
(B) during the lease up period, account for rent loss due to vacancy and lease up costs;
and
(iii)
 take into account all 
other
 relevant factors that affect the fair market value of the
property, including[
:
] 
the information provided in accordance with Subsection (3).
[
(a) the information provided in Subsection (3); and
]
[
(b) any effects the low-income housing covenant may have on the fair market value of
the real property.
]
[
(3) (a) Except as provided in Subsection (3)(b), to have a county assessor take into
account a low-income housing covenant under Subsection (2), the owner of a property subject
to a low-income housing covenant shall, by April 30 of each year, provide to the county
assessor:
]
(b) (i) Subject to Subsection (2)(b)(ii), Subsection (2)(a) applies regardless of whether
the property is complete or under construction.
(ii) For a property under construction, when determining fair market value under this
section, the county assessor shall take into account the impact of the low-income housing
covenant on the fair market value of the property.
(3) (a) On or before April 30 of each year, an owner of real property subject to a
low-income housing covenant shall provide to the county assessor the following on a form
approved by the commission:
(i) a signed statement from the property owner that the project continues to meet the
requirements of the low-income housing covenant;
(ii) a 
certified
 financial operating statement for the property for the prior year;
(iii) rent rolls for the property for the prior year; [
and
]
(iv) federal and commercial financing terms and agreements for the property[
.
]
; and
(v) for a property under construction, actual construction costs incurred as of the lien
date.
(b) If the April 30 described in Subsection (3)(a) [
falls within the first 12 months after
a low-income housing operation begins on the property, a
] 
occurs before occupancy of the
property or before the end of the lease up period, the
 property owner shall provide estimates of
the information required by Subsections (3)(a)(ii) [
through (iv)
] 
and (iii)
.
(c) On or before March 31 each year, the county assessor shall send a copy of the form
described in Subsection (3)(a) to each owner of real property subject to a low-income housing
covenant located in the county.
(4) If [
the
] 
an
 owner of [
a
] 
real
 property subject to a low-income housing covenant fails
to meet the requirements of Subsection (3):
(a) the assessor shall:
(i) make a record of the failure to meet the requirements of Subsection (3); and
(ii) make an estimate of the fair market value of the property in accordance with
Subsection (2) based on information available to the assessor; and
(b) subject to Subsection (5), the owner shall pay a penalty equal to the greater of:
(i) $250; or
(ii) 5% of the tax due on the property for that year.
(5) (a) Only one penalty per year may be imposed per housing project subject to a
low-income housing covenant.
(b) Upon making a record of the action, and upon reasonable cause shown, an assessor
may waive, reduce, or compromise the penalty imposed under Subsection (4)(b).
(c) An owner is not subject to a penalty under Subsection (4) for a year in which the
county assessor failed to timely comply with Subsection (3)(c).
Section 2. 
Effective date.
This bill takes effect on January 1, 2023.