59-2-506.  Rollback tax — Penalty — Computation of tax — Procedure — Lien — Interest — Notice — Collection — Distribution.

(1)  Except as provided in this section, Section 59-2-506.5, or Section 59-2-511, if land is withdrawn from this part, the land is subject to a rollback tax imposed in accordance with this section.

Terms Used In Utah Code 59-2-506

  • Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
  • Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
  • Land: includes :Utah Code 68-3-12.5
  • Lien: A claim against real or personal property in satisfaction of a debt.
  • Property: means property that is subject to assessment and taxation according to its value. See Utah Code 59-2-102
  • Rollback tax: means the tax imposed under Section 59-2-506. See Utah Code 59-2-502
  • Split estate mineral rights owner: means a person that:
(a) has a legal right to extract a mineral from property;
(b) does not hold more than a 25% interest in:
(i) the land surface rights of the property where the wellhead is located; or
(ii) an entity with an ownership interest in the land surface rights of the property where the wellhead is located;
(c) is not an entity in which the owner of the land surface rights of the property where the wellhead is located holds more than a 25% interest; and
(d) does not have a relationship with an owner of the land surface rights of the property where the wellhead is located. See Utah Code 59-2-102
  • Withdrawn from this part: means that land that has been assessed under this part is no longer assessed under this part or eligible for assessment under this part for any reason including that:
    (a) an owner voluntarily requests that the land be withdrawn from this part;
    (b) the land is no longer actively devoted to agricultural use;
    (c) 
    (i) the land has a change in ownership; and
    (ii) 
    (A) the new owner fails to apply for assessment under this part as required by Section 59-2-509; or
    (B) 
    (I) an owner applies for assessment under this part as required by Section 59-2-509; and
    (II) the land does not meet the requirements of this part to be assessed under this part;
    (d) 
    (i) the legal description of the land changes; and
    (ii) 
    (A) an owner fails to apply for assessment under this part as required by Section 59-2-509; or
    (B) 
    (I) an owner applies for assessment under this part as required by Section 59-2-509; and
    (II) the land does not meet the requirements of this part to be assessed under this part;
    (e) if required by the county assessor, the owner of the land:
    (i) fails to file a new application as provided in Subsection 59-2-508(5); or
    (ii) fails to file a signed statement as provided in Subsection 59-2-508(5); or
    (f) except as provided in Section 59-2-503, the land fails to meet a requirement of Section 59-2-503. See Utah Code 59-2-502
    (2) 

    (a)  An owner shall notify the county assessor that land is withdrawn from this part within 120 days after the day on which the land is withdrawn from this part.

    (b)  An owner that fails to notify the county assessor under Subsection (2)(a) that land is withdrawn from this part is subject to a penalty equal to the greater of:

    (i)  $10; or

    (ii)  2% of the rollback tax due for the last year of the rollback period.

    (3) 

    (a)  The county assessor shall determine the amount of the rollback tax by computing the difference for the rollback period described in Subsection (3)(b) between:

    (i)  the tax paid while the land was assessed under this part; and

    (ii)  the tax that would have been paid had the property not been assessed under this part.

    (b)  For purposes of this section, the rollback period is a time period that:

    (i)  begins on the later of:

    (A)  the date the land is first assessed under this part; or

    (B)  five years preceding the day on which the county assessor mails the notice required by Subsection (5); and

    (ii)  ends the day on which the county assessor mails the notice required by Subsection (5).

    (4) 

    (a)  The county treasurer shall:

    (i)  collect the rollback tax; and

    (ii)  after the rollback tax is paid, certify to the county recorder that the rollback tax lien on the property has been satisfied by:

    (A)  preparing a document that certifies that the rollback tax lien on the property has been satisfied; and

    (B)  providing the document described in Subsection (4)(a)(ii)(A) to the county recorder for recordation.

    (b)  The county treasurer shall pay the rollback tax collected under this section as follows:

    (i)  20% to the county for use for open land and working agricultural land as those terms are defined in Section 4-46-102; and

    (ii)  80% to the various taxing entities pro rata in accordance with the property tax levies for the current year.

    (5) 

    (a)  The county assessor shall mail to an owner of the land that is subject to a rollback tax a notice that:

    (i)  the land is withdrawn from this part;

    (ii)  the land is subject to a rollback tax under this section; and

    (iii)  the rollback tax is delinquent if the owner of the land does not pay the tax within 30 days after the day on which the county assessor mails the notice described in this Subsection (5)(a).

    (b) 

    (i)  The rollback tax is due and payable on the day the county assessor mails the notice required by Subsection (5)(a).

    (ii)  Subject to Subsection (7), the rollback tax is delinquent if an owner of the land that is withdrawn from this part does not pay the rollback tax within 30 days after the day on which the county assessor mails the notice required by Subsection (5)(a).

    (6) 

    (a)  Subject to Subsection (6)(b), the following are a lien on the land assessed under this part:

    (i)  the rollback tax; and

    (ii)  interest imposed in accordance with Subsection (7).

    (b)  The lien described in Subsection (6)(a) shall:

    (i)  arise upon the imposition of the rollback tax under this section;

    (ii)  end on the day on which the rollback tax and interest imposed in accordance with Subsection (7) are paid in full; and

    (iii)  relate back to the first day of the rollback period described in Subsection (3)(b).

    (7) 

    (a)  A delinquent rollback tax under this section shall accrue interest:

    (i)  from the date of delinquency until paid; and

    (ii)  at the interest rate established under Section 59-2-1331 and in effect on January 1 of the year in which the delinquency occurs.

    (b)  The county treasurer shall include in the notice required by Section 59-2-1317 a rollback tax that is delinquent on September 1 of any year and interest calculated on that delinquent amount through November 30 of the year in which the county treasurer provides the notice under Section 59-2-1317.

    (8) 

    (a)  Land that becomes ineligible for assessment under this part only as a result of an amendment to this part is not subject to the rollback tax if the owner of the land notifies the county assessor, in accordance with Subsection (2), that the land is withdrawn from this part.

    (b)  Land described in Subsection (8)(a) that is withdrawn from this part as a result of an event other than an amendment to this part, whether voluntary or involuntary, is subject to the rollback tax.

    (9)  Except as provided in Section 59-2-511, land that becomes exempt from taxation under Utah Constitution, Article XIII, Section 3, is not subject to the rollback tax if the land meets the requirements of Section 59-2-503 to be assessed under this part.

    (10)  Land that becomes ineligible for assessment under this part only as a result of a split estate mineral rights owner exercising the right to extract a mineral is not subject to the rollback tax:

    (a) 

    (i)  for the portion of the land required by a split estate mineral rights owner to extract a mineral if, after the split estate mineral rights owner exercises the right to extract a mineral, the portion of the property that remains in agricultural production still meets the acreage requirements of Section 59-2-503 for assessment under this part; or

    (ii)  for the entire acreage that would otherwise qualify for assessment under this part if, after the split estate mineral rights owner exercises the right to extract a mineral, the entire acreage that would otherwise qualify for assessment under this part no longer meets the acreage requirements of Section 59-2-503 for assessment under this part only due to the extraction of the mineral by the split estate mineral rights owner; and

    (b)  for the period of time that the property described in Subsection (10)(a) is ineligible for assessment under this part due to the extraction of a mineral by the split estate mineral rights owner.

    (11) 

    (a)  A portion of land withdrawn from this part is not subject to the rollback tax if the portion of land:

    (i)  qualifies for assessment under 17; and

    (ii)  for the tax year immediately following withdrawal, the owner of the portion of land applies in accordance with Section 59-2-1707 for the land to be assessed under 17.

    (b)  Any remaining portion of the withdrawn land that does not satisfy the requirements of Subsection (11)(a) is subject to the rollback tax.

    Amended by Chapter 180, 2023 General Session
    Amended by Chapter 189, 2023 General Session

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