Utah 2023 Regular Session

Utah House Bill HB0231 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	Enrolled Copy H.B. 231
	1	+	H.B. 231
	2	+	LEGISLATIVE GENERAL COUNSEL
	3	+	6 Approved for Filing: A.V. Arthur 6
	4	+	6 01-17-23 2:42 PM 6
	5	+	H.B. 231
	6	+	- 1 - House Floor Amendments 2-13-2023 pf/ava
2	7		1 LOW INCOME HOUSING PROPERTY TAX EXEMPTI ON
3	8		2 2023 GENERAL SESSION
4	9		3 STATE OF UTAH
5	10		4 Chief Sponsor: Steve Eliason
6	11		5 Senate Sponsor: Lincoln Fillmore
7	12		6
8	13		7LONG TITLE
9	14		8General Description:
10	15		9 This bill amends the definitions related to property tax exemptions in the Property Tax
11	16		10Act.
12	17		11Highlighted Provisions:
13	18		12 This bill:
14	19		13 <provides the circumstances under which a private owner of property used as
15	20		14permanent supportive housing qualifies as a "nonprofit entity" for purposes of the
16	21		15exclusive use property tax exemption.
17	22		16Money Appropriated in this Bill:
18	23		17 None
19	24		18Other Special Clauses:
20		-	19 This bill provides retrospective operation.
	25	+	19 This bill provides º [a special effective date] retrospective operation » .
21	26		20Utah Code Sections Affected:
22	27		21AMENDS:
23	28		22 59-2-1101, as last amended by Laws of Utah 2022, Chapter 235
24	29		23
25	30		24Be it enacted by the Legislature of the state of Utah:
26	31		25 Section 1. Section 59-2-1101 is amended to read:
27	32		26 59-2-1101. Definitions -- Exemption of certain property -- Proportional payments
28	33		27for certain property -- Exception -- County legislative body authority to adopt rules or
	34	+	HB0231 H.B. 231 01-17-23 2:42 PM
	35	+	- 2 -
29	36		28ordinances.
30		-	29 (1) As used in this section: H.B. 231 Enrolled Copy
31		-	- 2 -
	37	+	29 (1) As used in this section:
32	38		30 (a) "Charitable purposes" means:
33	39		31 (i) for property used as a nonprofit hospital or a nursing home, the standards outlined in
34	40		32Howell v. County Board of Cache County ex rel. IHC Hospitals, Inc., 881 P.2d 880 (Utah
35	41		331994); and
36	42		34 (ii) for property other than property described in Subsection (1)(a)(i), providing a gift
37	43		35to the community.
38	44		36 (b) "Compliance period" means a period equal to 15 taxable years beginning with the
39	45		37first taxable year for which the taxpayer claims a tax credit under Section 42, Internal Revenue
40	46		38Code, or Section 59-7-607 or 59-10-1010.
41	47		39 [(b)] (c) (i) "Educational purposes" means purposes carried on by an educational
42	48		40organization that normally:
43	49		41 (A) maintains a regular faculty and curriculum; and
44	50		42 (B) has a regularly enrolled body of pupils and students.
45	51		43 (ii) "Educational purposes" includes:
46	52		44 (A) the physical or mental teaching, training, or conditioning of competitive athletes by
47	53		45a national governing body of sport recognized by the United States Olympic Committee that
48	54		46qualifies as being tax exempt under Section 501(c)(3), Internal Revenue Code; and
49	55		47 (B) an activity in support of or incidental to the teaching, training, or conditioning
50	56		48described in this Subsection [(1)(b)(ii)] (1)(c)(ii).
51	57		49 [(c)] (d) "Exclusive use exemption" means a property tax exemption under Subsection
52	58		50(3)(a)(iv), for property owned by a nonprofit entity used exclusively for one or more of the
53	59		51following purposes:
54	60		52 (i) religious purposes;
55	61		53 (ii) charitable purposes; or
56	62		54 (iii) educational purposes.
57	63		55 [(d)] (e) (i) "Farm machinery and equipment" means tractors, milking equipment and
58	64		56storage and cooling facilities, feed handling equipment, irrigation equipment, harvesters,
59		-	57choppers, grain drills and planters, tillage tools, scales, combines, spreaders, sprayers, haying Enrolled Copy H.B. 231
	65	+	57choppers, grain drills and planters, tillage tools, scales, combines, spreaders, sprayers, haying
	66	+	58equipment, including balers and cubers, and any other machinery or equipment used primarily 01-17-23 2:42 PM H.B. 231
60	67		- 3 -
61		-	58equipment, including balers and cubers, and any other machinery or equipment used primarily
62	68		59for agricultural purposes.
63	69		60 (ii) "Farm machinery and equipment" does not include vehicles required to be
64	70		61registered with the Motor Vehicle Division or vehicles or other equipment used for business
65	71		62purposes other than farming.
66	72		63 [(e)] (f) "Gift to the community" means:
67	73		64 (i) the lessening of a government burden; or
68	74		65 (ii) (A) the provision of a significant service to others without immediate expectation
69	75		66of material reward;
70	76		67 (B) the use of the property is supported to a material degree by donations and gifts
71	77		68including volunteer service;
72	78		69 (C) the recipients of the charitable activities provided on the property are not required
73	79		70to pay for the assistance received, in whole or in part, except that if in part, to a material
74	80		71degree;
75	81		72 (D) the beneficiaries of the charitable activities provided on the property are
76	82		73unrestricted or, if restricted, the restriction bears a reasonable relationship to the charitable
77	83		74objectives of the nonprofit entity that owns the property; and
78	84		75 (E) any commercial activities provided on the property are subordinate or incidental to
79	85		76charitable activities provided on the property.
80	86		77 [(f)] (g) "Government exemption" means a property tax exemption provided under
81	87		78Subsection (3)(a)(i), (ii), or (iii).
82	88		79 [(g)] (h) (i) "Nonprofit entity" means an entity:
83	89		80 (A) that is organized on a nonprofit basis, that dedicates the entity's property to the
84	90		81entity's nonprofit purpose, and that makes no dividend or other form of financial benefit
85	91		82available to a private interest;
86	92		83 (B) for which, upon dissolution, the entity's assets are distributable only for exempt
87	93		84purposes under state law or to the government for a public purpose; and
88		-	85 (C) for which none of the net earnings or donations made to the entity inure to the H.B. 231 Enrolled Copy
89		-	- 4 -
	94	+	85 (C) for which none of the net earnings or donations made to the entity inure to the
90	95		86benefit of private shareholders or other individuals, as the private inurement standard has been
91	96		87interpreted under Section 501(c)(3), Internal Revenue Code.
92	97		88 (ii) "Nonprofit entity" includes an entity:
93		-	89 (A) if the entity is treated as a disregarded entity for federal income tax purposes and
	98	+	89 (A) if the entity is treated as a disregarded entity for federal income tax purposes and H.B. 231 01-17-23 2:42 PM
	99	+	- 4 -
94	100		90wholly owned by, and controlled under the direction of, a nonprofit entity; and
95	101		91 (B) for which none of the net earnings and profits of the entity inure to the benefit of
96	102		92any person other than a nonprofit entity.
97	103		93 (iii) "Nonprofit entity" includes an entity that is not an entity described in Subsection
98	104		94(1)(h)(i) if the entity jointly owns a property that:
99	105		95 (A) is used for the purpose of providing permanent supportive housing;
100	106		96 (B) has an owner that is an entity described in Subsection (1)(h)(i) or that is a housing
101	107		97authority that operates the permanent supportive housing;
102	108		98 (C) has an owner that receives public funding from a federal, state, or local government
103	109		99entity to provide support services and rental subsidies to the permanent supportive housing;
104	110		100 (D) is intended to be transferred at or before the end of the compliance period to an
105	111		101entity described in Subsection (1)(h)(i) or a housing authority that will continue to operate the
106	112		102property as permanent supportive housing; and
107	113		103 (E) has been certified by the Utah Housing Corporation as meeting the requirements
108	114		104described in Subsections (1)(h)(iii)(A) through (D).
109	115		105 (i) "Permanent supportive housing" means a housing facility that:
110	116		106 (i) provides supportive services;
111	117		107 (ii) makes a 15-year commitment to provide rent subsidies to tenants of the housing
112	118		108facility when the housing facility is placed in service;
113	119		109 (iii) receives an allocation of federal low-income housing tax credits in accordance
114	120		110with 26 U.S.C. Sec. 42; and
115	121		111 (iv) leases each unit to a tenant:
116	122		112 (A) who, immediately before leasing the housing, was homeless as defined in 24
117		-	113C.F.R. 583.5; and Enrolled Copy H.B. 231
118		-	- 5 -
	123	+	113C.F.R. 583.5; and
119	124		114 (B) whose rent is capped at no more than 30% of the tenant's household income.
120	125		115 (j) "Supportive service" means a service that is an eligible cost under 24 C.F.R. 578.53.
121	126		116 [(h)] (k) "Tax relief" means an exemption, deferral, or abatement that is authorized by
122	127		117this part, Part 18, Tax Deferral and Tax Abatement, or Part 19, Armed Forces Exemptions.
123	128		118 (2) (a) Except as provided in Subsection (2)(b) or (c), tax relief may be allowed only if
124	129		119the claimant is the owner of the property as of January 1 of the year the exemption is claimed.
125		-	120 (b) Notwithstanding Subsection (2)(a), a claimant shall collect and pay a proportional
	130	+	120 (b) Notwithstanding Subsection (2)(a), a claimant shall collect and pay a proportional 01-17-23 2:42 PM H.B. 231
	131	+	- 5 -
126	132		121tax based upon the length of time that the property was not owned by the claimant if:
127	133		122 (i) the claimant is a federal, state, or political subdivision entity described in
128	134		123Subsection (3)(a)(i), (ii), or (iii); or
129	135		124 (ii) pursuant to Subsection (3)(a)(iv):
130	136		125 (A) the claimant is a nonprofit entity; and
131	137		126 (B) the property is used exclusively for religious, charitable, or educational purposes.
132	138		127 (c) Subsection (2)(a) does not apply to an exemption described in Part 19, Armed
133	139		128Forces Exemptions .
134	140		129 (3) (a) The following property is exempt from taxation:
135	141		130 (i) property exempt under the laws of the United States;
136	142		131 (ii) property of:
137	143		132 (A) the state;
138	144		133 (B) school districts; and
139	145		134 (C) public libraries;
140	146		135 (iii) except as provided in Title 11, Chapter 13, Interlocal Cooperation Act, property of:
141	147		136 (A) counties;
142	148		137 (B) cities;
143	149		138 (C) towns;
144	150		139 (D) local districts;
145	151		140 (E) special service districts; and
146		-	141 (F) all other political subdivisions of the state; H.B. 231 Enrolled Copy
147		-	- 6 -
	152	+	141 (F) all other political subdivisions of the state;
148	153		142 (iv) except as provided in Subsection (6) or (7), property owned by a nonprofit entity
149	154		143used exclusively for one or more of the following purposes:
150	155		144 (A) religious purposes;
151	156		145 (B) charitable purposes; or
152	157		146 (C) educational purposes;
153	158		147 (v) places of burial not held or used for private or corporate benefit;
154	159		148 (vi) farm machinery and equipment;
155	160		149 (vii) a high tunnel, as defined in Section 10-9a-525;
156	161		150 (viii) intangible property; and
157		-	151 (ix) the ownership interest of an out-of-state public agency, as defined in Section
	162	+	151 (ix) the ownership interest of an out-of-state public agency, as defined in Section H.B. 231 01-17-23 2:42 PM
	163	+	- 6 -
158	164		15211-13-103:
159	165		153 (A) if that ownership interest is in property providing additional project capacity, as
160	166		154defined in Section 11-13-103; and
161	167		155 (B) on which a fee in lieu of ad valorem property tax is payable under Section
162	168		15611-13-302.
163	169		157 (b) For purposes of a property tax exemption for property of school districts under
164	170		158Subsection (3)(a)(ii)(B), a charter school under Title 53G, Chapter 5, Charter Schools, is
165	171		159considered to be a school district.
166	172		160 (4) Subject to Subsection (5), if property that is allowed an exclusive use exemption or
167	173		161a government exemption ceases to qualify for the exemption because of a change in the
168	174		162ownership of the property:
169	175		163 (a) the new owner of the property shall pay a proportional tax based upon the period of
170	176		164time:
171	177		165 (i) beginning on the day that the new owner acquired the property; and
172	178		166 (ii) ending on the last day of the calendar year during which the new owner acquired
173	179		167the property; and
174	180		168 (b) the new owner of the property and the person from whom the new owner acquires
175		-	169the property shall notify the county assessor, in writing, of the change in ownership of the Enrolled Copy H.B. 231
176		-	- 7 -
	181	+	169the property shall notify the county assessor, in writing, of the change in ownership of the
177	182		170property within 30 days from the day that the new owner acquires the property.
178	183		171 (5) Notwithstanding Subsection (4)(a), the proportional tax described in Subsection
179	184		172(4)(a):
180	185		173 (a) is subject to any exclusive use exemption or government exemption that the
181	186		174property is entitled to under the new ownership of the property; and
182	187		175 (b) applies only to property that is acquired after December 31, 2005.
183	188		176 (6) (a) A property may not receive an exemption under Subsection (3)(a)(iv) if:
184	189		177 (i) the nonprofit entity that owns the property participates in or intervenes in any
185	190		178political campaign on behalf of or in opposition to any candidate for public office, including
186	191		179the publishing or distribution of statements; or
187	192		180 (ii) a substantial part of the activities of the nonprofit entity that owns the property
188	193		181consists of carrying on propaganda or otherwise attempting to influence legislation, except as
189		-	182provided under Subsection 501(h), Internal Revenue Code.
	194	+	182provided under Subsection 501(h), Internal Revenue Code. 01-17-23 2:42 PM H.B. 231
	195	+	- 7 - House Floor Amendments 2-13-2023 pf/ava
190	196		183 (b) Whether a nonprofit entity is engaged in an activity described in Subsection (6)(a)
191	197		184shall be determined using the standards described in Section 501, Internal Revenue Code.
192	198		185 (7) A property may not receive an exemption under Subsection (3)(a)(iv) if:
193	199		186 (a) the property is used for a purpose that is not religious, charitable, or educational;
194	200		187and
195	201		188 (b) the use for a purpose that is not religious, charitable, or educational is more than de
196	202		189minimis.
197	203		190 (8) A county legislative body may adopt rules or ordinances to:
198	204		191 (a) effectuate the exemptions, deferrals, abatements, or other relief from taxation
199	205		192provided in this part, Part 18, Tax Deferral and Tax Abatement, or Part 19, Armed Forces
200	206		193Exemptions; and
201	207		194 (b) designate one or more persons to perform the functions given the county under this
202	208		195part, Part 18, Tax Deferral and Tax Abatement, or Part 19, Armed Forces Exemptions.
203	209		196 (9) If a person is dissatisfied with a tax relief decision made under designated
204		-	197decision-making authority as described in Subsection (8)(b), that person may appeal the H.B. 231 Enrolled Copy
205		-	- 8 -
	210	+	197decision-making authority as described in Subsection (8)(b), that person may appeal the
206	211		198decision to the commission under Section 59-2-1006.
207		-	199 Section 2. Retrospective operation.
208		-	200 This bill has retrospective operation to January 1, 2023.
	212	+	199 Section 2. º [Effective date.] Retrospective operation. »
	213	+	200 º [This bill takes effect on January 1, 2024.] This bill has retrospective operation to
	214	+	200aJanuary 1, 2023. »