No. 40985 (5-year Review): Rule R884-24P. Property Tax

DAR File No.: 40985
Filed: 11/10/2016 10:26:23 AM

NOTICE OF REVIEW AND STATEMENT OF CONTINUATION

Concise explanation of the particular statutory provisions under which the rule is enacted and how these provisions authorize or require the rule:

Section 11-13-302 requires a project entity created under the Interlocal Cooperation Act to pay a fee to each taxing jurisdiction in lieu of ad valorem property tax. This section also provides methods for calculation, collection, and distribution of the fee and is renumbered. Section 41-1a-301 provides procedures for apportioned registration and licensing of interstate commercial vehicles. Section 59-2-102 provides definitions relating to property tax. Section 59-2-103 requires that all residential property be assessed at a uniform and equal rate on the basis of its fair market value; and provides for a residential exemption. Section 59-2-103.5 provides procedures for a property owner to obtain an exemption from property tax for residential property. Section 59-2-201 requires the Tax Commission to determine the fair market value of specified property; provides a methodology for determining fair market value of productive mining property; and requires the Tax Commission to notify the property owner and the assessor of the assessment. Section 59-2-210 indicates how tax on mining property shall be collected; and allows withholding of royalty payments as detailed in the Tax Commission rule. Section 59-2-211 states that to ensure payment and collection of ad valorem property tax, law allows the Tax Commission to collect a security, in an amount determined by the Tax Commission, from firms mining uranium and vanadium. Section 59-2-301 requires the county assessor to assess all property in the county that is not lawfully assessed by the Tax Commission. Section 59-2-301.3 defines "low-income housing covenant" and requires a county assessor to include in a property assessment, any effects a low-income housing covenant may have on the fair market value of a property subject to the covenant. Section 59-2-302 provides that assessments made by the county assessor or the Tax Commission are the only basis of property taxation for political subdivisions of the state. Section 59-2-303 requires the assessor to assess all property subject to taxation to the owner of the property as of January 1. Section 59-2-303.1 defines terms; requires the county assessor to annually update property values based on a systematic review of market data; requires counties to use a computer assisted mass appraisal system to perform the annual update; and requires that a county assessor must also complete a detailed review of each property every five years or be subject to corrective action. Section 59-2-305 requires county assessor to list all property according to its fair market value; and allows the Tax Commission to proscribe procedures and formats that will provide uniformity to property listing. Section 59-2-306 authorizes a county assessor to require a signed statement regarding real and personal property that may be assessed, and the county in which the property is located. Section 59-2-402 requires that a proportional assessment be made to property tax if a piece of taxable transitory personal property is brought into the state after the assessment date; gives the Tax Commission rulemaking authority to implement proportional assessment; and exempts certain property from proportional assessment. Section 59-2-405 imposes a statewide uniform fee of 1.5% of the fair market value of motor vehicles not subject to Section 59-2-405.1, and to watercraft, recreational vehicles, and all other tangible personal property; and requires the Tax Commission to establish fair market value. Section 59-2-405.1 imposes a statewide uniform fee for vehicles under 12,000 pounds based on the age of the vehicle. Section 59-2-406 requires the Tax Commission to enter into a contract with each county; pursuant to this contract, either the Tax Commission or the county will collect all state and local fees due on the vehicles; requires the contract to contain performance standards; and gives rulemaking authority to the Tax Commission. Subsection 59-2-508(2) outlines the application process to have land valued, assessed, and taxed as land in agricultural use. Section 59-2-514 creates the State Farmland Evaluation Advisory Committee; sets forth the membership and duties of that committee; and grants the Tax Commission rulemaking authority as necessary for purposes of Title 59, Chapter 2, Part 5. Section 59-2-515 allows the Tax Commission rulemaking authority to effectively administer the valuation of agricultural property. Section 59-2-701 requires that all persons conducting appraisals of property for fair market value of real property for the assessment roll in Utah hold an appraisers certificate or registration issued by the Division of Real Estate; and allows the Tax Commission to prescribe qualifications for persons performing appraisals. Section 59-2-702 requires the Tax Commission to conduct training and continuing education programs to educate appraisers and county assessors. Section 59-2-704 requires the Tax Commission to conduct and publish studies to determine the relationship between market value shown on the assessment role and the market value of real property in each county. The Tax Commission shall order counties to adjust assessment rates to coincide with the studies; and allows Tax Commission to conduct appraisals in a county with insufficient sales data. Section 59-2-704.5 requires the Tax Commission to adopt, by rule, standards for determining acceptable assessment levels and valuation deviations within each county. Section 59-2-705 requires the Tax Commission to provide qualified personal property appraisers to the county to aid in the audit of taxable personal property in the county. Section 59-2-801 provides a methodology for the Tax Commission to apportion the assessment of property assessed by it. Section 59-2-918.5 prohibits a taxing entity from imposing a judgment levy without advertising that intent and holding a public hearing on the matter; and provides a required format for the advertisement. Section 59-2-918.6 defines a new school district and remaining school district and sets forth the advertisement and public hearing requirements for the new school district and remaining school district to impose a property tax. Section 59-2-919 prohibits a tax rate in excess of the certified tax rate unless the taxing entity approves a resolution after first advertising that intent; provides a required format for the notice of the proposed tax increase; requires the county auditor to notify all owners of real property, prior to July 22, of a hearing on the proposed increase; and sets forth guidelines for the hearing. Section 59-2-919.1 requires a county auditor to provide a notice by mail to each property owner, on or before July 22, and prescribes the form and content of that notice. Section 59-2-919.2 allows the county auditor to publish a consolidated advertisement for a public hearing on a proposed tax increase when multiple taxing entities notify a county auditor prior to July 22 of a proposed property tax increase. Section 59-2-920 requires a county to forward to the Tax Commission any resolution to exceed the certified tax rate. Section 59-2-921 requires the county board of equalization and the Tax Commission to annually notify before September 15 each taxing entity of any changes they made in the taxing entity's assessment roll or adopted tax rate; and exempts a taxing entity from notice and public hearing provisions in certain instances. Section 59-2-922 requires a county to adopt a replacement resolution, after meeting notice and public hearing requirements, if after approving an initial tax rate, a taxing entity determines that a greater tax rate is required. Section 59-2-923 allows a taxing entity to, before adopting a final budget or tax rate, spend money on the basis of the entity's approved tentative budget or the prior year's adopted budget. Section 59-2-924 requires the county assessor to report the valuation of property within the county to the county auditor and the Tax Commission, and requires the county auditor to report that information, along with the certified tax rate, to each taxing entity; defines certified tax rate and indicates how the certified tax rate shall be determined; and requires the county auditor to notify all property owners of any intent to exceed the certified tax rate. Section 59-2-1004 allows a taxpayer dissatisfied with a valuation or equalization to appeal to the board of equalization; requires the county board of equalization to hold public hearings; and allows a taxpayer to appeal the decision of the board of equalization to the Tax Commission. Section 59-2-1101 exempts the owner of certain property from taxation; and requires an owner to file an affidavit, if required by the Tax Commission, in order to receive exempt status for the property value. Subsection 59-2-1101(d) provides that property owned by a nonprofit entity and used exclusively for religious purposes is exempt from tax. Section 59-2-1102 provides the manner in which a county board of equalization shall determine whether certain property within the county is exempt from taxation. Section 59-2-1104 defines "residence"; and exempts from property tax certain property owned by disabled veterans or their unmarried surviving spouses and minor orphans. Section 59-2-1106 exempts from property tax certain property owned by blind persons or their unmarried surviving spouses or minor orphans; and authorizes county to provide refunds for those qualifying for this exemption. Sections 59-2-1107 through 59-2-1109 authorize a county to defer or abate taxes paid by indigent persons. Section 59-2-1113 exempts household furnishings, furniture, and equipment that are used exclusively by the owner at the owner's place of residence from property tax. Section 59-2-1115 indicates tangible personal property that is exempt from taxation, and allows the Tax Commission to make rules to implement the section. Subsection 59-2-1202(5) defines "household income" for purposes of the homeowner's and renter's property tax credits. Section 59-2-1308.5 allows the Tax Commission to enter into agreements for equal property tax payments over a reasonable period not to exceed 20 years under certain conditions; and grants the Tax Commission authority to promulgate rules to ensure that tax revenue derived from these agreements do not affect the calculation of the certified tax rate. Section 59-2-1317 requires the treasurer to collect the taxes and furnish tax notices to taxpayers; and indicates the information that shall be included on the notice. Section 59-2-1328 requires the payment of refunds and interest if a tax paid under protest was unlawfully collected; and allows a taxing entity to impose a judgment levy to pay its share of eligible judgments. Section 59-2-1330 provides that if a board of equalization, court, or the Tax Commission orders a reduction in the tax on a property, the taxpayer shall receive a refund of that tax, plus interest; provides an interest rate for refunds and sets a time within which the refund and interest must be paid; and allows a taxing entity to impose a judgment levy to pay its share of eligible judgments. Section 59-2-1347 allows the county legislative body and the Tax Commission the right to defer or adjust the property tax of an individual if it is determined that it is in the best interest of the state or the county; provides procedures for applying for deferral; and requires county legislative body or the Tax Commission to post notice of any deferrals or adjustments. Section 59-2-1351.1 provides procedures for sale of personal property seized as a result of failure to pay property tax; and includes notice requirements for sale of the property.

Summary of written comments received during and since the last five-year review of the rule from interested persons supporting or opposing the rule:

No written comments have been received.

Reasoned justification for continuation of the rule, including reasons why the agency disagrees with comments in opposition to the rule, if any:

Section R884-24P-5 defines "household income" with regard to property tax abatements or deferrals for indigent persons; and states that absence from residence due to vacation, confinement to hospital, or other temporary situations shall not be deducted from the 10-month residency requirement of Section 59-2-1109. Section R884-24P-7 defines terms; and provides a methodology for assessment of mining properties. Section R884-24P-10 defines terms and provides methodology necessary for taxation of underground rights in land that contains deposits of oil or gas; and also provides for withholding of these taxes. Section R884-24P-14 requires assessor to consider preservation easements when valuing historically significant real property and structures; and also requires property owners to inform the assessor of the preservation easement. Section R884-24P-16 defines terms and provides a methodology for valuing Interlocal Cooperation Act project entity properties; and refers to Section 11-13-25 which is renumbered. Section R884-24P-19 sets forth the ad valorem training and designation program. Section R884-24P-20 defines terms concerning the appraisal of property under construction and provides methodology for valuing that property. Section R884-24P-24 sets forth form county auditor must use to notify real property owners of property valuation and tax changes; and provides guidelines to be used in determining new growth, the certified tax rate, and increase in property tax revenues. Section R884-24P-27 defines terms related to the standards of assessment performance; sets forth standards of assessment performance regarding assessment level and uniformity; states when corrective action is necessary; and provides an alternate performance evaluation. Section R884-24P-28 sets forth a procedure for reporting heavy equipment leased or rented during the tax year. Section R884-24P-29 states situations when household furnishings, furniture, and equipment are subject to property tax. Section R884-24P-32 clarifies that leasehold improvements shall be included in the value of the underlying real property and assessed to the owner of the underlying real property unless the underlying real property is owned by an exempt entity. Section R884-24P-33 defines terms; and provides percent good schedules for all personal property to be used to arrive at the property's taxable value. Section R884-24P-35 requires the owner of property receiving a property tax exemption based on exclusive use for religious, charitable, or educational purposes to file an annual affidavit. Section R884-24P-36 sets forth items that must appear on the real property tax notice, in addition to items required in Section 59-2-1317. Section R884-24P-37 requires the county assessor to maintain an appraisal record of all real property subject to assessment by the county; indicates what information shall be included in the record; requires the value of the land and improvements be shown separately. Section R884-24P-38 provides definitions and a methodology for assessing nonoperating railroad properties. Section R884-24P-40 clarifies when parsonages, rectories, monasteries, homes, and residences are used exclusively for religious purposes; and states that vacant land not actively used by the religious organization is not exempt from property tax. Section R884-24P-42 provides procedures an assessor must follow upon Tax Commission completion of audits of personal property and land subject to the Farmland Assessment Act. Section R884-24P-44 indicates who is the owner for purposes of the property tax exemption for the owner of equipment and machinery used for agricultural purposes; and clarifies when machinery and equipment are not used for farming purposes. Section R884-24P-49 defines terms and provides a methodology for valuating a private rail car company apportioned to Utah. Section R884-24P-50 defines terms and provides a methodology for apportioning the Utah portion of commercial aircraft. Section R884-24P-52 defines terms and establishes criteria necessary for the determination of whether a residence is a primary residence in Utah. Section R884-24P-53 provides valuation tables for the valuation of land subject to the Farmland Assessment Act. Section R884-24P-55 requires each county to establish a written ordinance for real property sale procedures and indicates what issues the ordinance must address; the section also requires that the ordinance be displayed in a public place and be available to all interested parties. Section R884-24P-56 provides a formula to calculate the previous year's statewide rate; apportions vehicles assessed under Section 41-1a-301 at the same percentage filed with the Customer Service Division of the Tax Commission; and defines "principal route." Section R884-24P-57 defines terms related to a judgment levy; provides guidelines on a judgment levy public hearing and advertisement; and requires taxing entities to file with the Tax Commission a statement certifying that they meet the qualifications for imposing a judgment levy. Section R884-24P-58 indicates how the one-time decrease in the certified rate based on the county option sales tax shall be determined. Section R884-24P-59 indicates how the one-time decrease in the certified rate based on resort community sales tax shall be determined. Section R884-24P-60 excludes motorcycles from the definition of "motor vehicle"; and provides additional guidelines on the calculation of the age-based uniform fee on tangible personal property. Section R884-24P-61 defines "recreational vehicle" and excludes motorcycles from the definition of "motor vehicle"; and clarifies what types of personal property the uniform fee applies to; provides a formula to determine the fair market value of tangible personal property. Section R884-24P-62 defines terms related to state-assessed utility and transportation properties; and provides a methodology for valuation of state-assessed utility and transportation properties. Section R884-24P-63 requires a written customer service performance plan to be developed by the party contracting to collect both state registration fees and county property taxes on vehicles; and requires county offices and the Tax Commission to provide training. Section R884-24P-64 provides a formula for determining the taxable value of vehicles owned by disabled veterans and the blind for purposes of the property tax exemptions for the disabled veterans and the blind. Section R884-24P-65 defines "transitory personal property" and clarifies when this type of property is subject to a proportional assessment of property tax. Section R884-24P-66 defines "factual error;" indicates when a board of equalization must accept a property tax appeal that is filed beyond the period allowed under the statute of limitations; and sets forth criteria for county board of equalization hearing procedures. Section R884-24P-67 provides an annual reporting mechanism to assist county assessors in gathering data necessary for accurate valuation of low-income housing projects. Section R884-24P-68 provides guidance in determining whether a taxpayer qualifies for the property tax exemption for tangible personal property with a total aggregate fair market value of $3,500 or less. Section R884-24P-70 provides that county mass appraisal systems shall use accepted valuation methodologies to perform the annual update of all residential parcels and defines "accepted valuation methodologies"; and indicates what a detailed review of property characteristics includes. Section R884-24P-71 indicates how the Tax Commission will ensure that an equal property tax payment agreement does not impact the certified tax rate; and indicates the period for which an agreement is effective. Section R884-24P-72 allows a member of the State Farmland Evaluation Advisory Committee to participate electronically in a meeting of that committee. Therefore, this rule should be continued.

The full text of this rule may be inspected, during regular business hours, at the Office of Administrative Rules, or at:

Tax Commission
Property Tax
210 N 1950 W
SALT LAKE CITY, UT 84134

Direct questions regarding this rule to:

• Christa Johnson at the above address, by phone at 801-297-3901, by FAX at 801-297-3907, or by Internet E-mail at [e-mail]

Effective:

11/10/2016

Authorized by:

Rebecca Rockwell, Commissioner

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