H.B. 414

1

AVIATION AMENDMENTS
2 2007 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Wayne A. Harper
5 Senate Sponsor: ____________
6
7 LONG TITLE
8 General Description:
9 This bill modifies the Property Tax Act, the Motor and Special Fuel Tax Act, and the
10 Transportation Code by amending provisions relating to aviation.
11 Highlighted Provisions:
12 This bill:
13 . provides definitions;
14 . modifies the uniform fees on aircraft required to be registered with the state;
15 . increases the tax rate on aviation fuel that is purchased for use by a person other
16 than an airline from 9 cents per gallon to 17 cents per gallon;
17 . reduces certain aircraft registration fees; and
18 . makes technical changes.
19 Monies Appropriated in this Bill:
20 None
21 Other Special Clauses:
22 This bill takes effect on January 1, 2008.
23 Utah Code Sections Affected:
24 AMENDS:
25 59-2-404, as last amended by Chapter 181, Laws of Utah 1999
26 59-13-102, as last amended by Chapter 258, Laws of Utah 2000
27 59-13-401, as last amended by Chapter 179, Laws of Utah 1999

28 59-13-402, as last amended by Chapter 235, Laws of Utah 2001
29 59-13-403, as last amended by Chapter 322, Laws of Utah 2006
30 59-13-404, as enacted by Chapter 235, Laws of Utah 2001
31 72-10-110, as last amended by Chapter 181, Laws of Utah 1999
32
33 Be it enacted by the Legislature of the state of Utah:
34 Section 1. Section 59-2-404 is amended to read:
35 59-2-404. Uniform fee on aircraft -- Collection of fee by county -- Distribution of
36 fees -- Rules to implement section.
37 (1) There is levied in lieu of the ad valorem tax a uniform fee on aircraft required to be
38 registered with the state in an amount equal to the following [percent of the average wholesale
39 market value of the aircraft as established by the commission]:
40 [(a) for aerial applicators as defined in Section 59-2-102 as follows:]
41 [Calendar Year Uniform Fee]
42 [2000 0.4%]
43 [2001 0.3%]
44 [2002 and all subsequent years 0.2%; and]
45 [(b) for all other aircraft required to be registered with the state as follows:]
46 [Calendar Year Uniform Fee]
47 [2000 0.8%]
48 [2001 0.6%]
49 [2002 and all subsequent years 0.4%.]
50 Gross Weight of Aircraft Uniform Fee
51 Less than 3,500 pounds $50
52 3,500 or more pounds but less than 8,000 pounds $100
53 8,000 or more pounds but less than 12,500 pounds $200
54 12,500 pounds or more $300
55 (2) The uniform fee shall be collected by the counties with the registration fee and
56 distributed to the taxing districts in accordance with Article XIII, Sec. 14, Utah Constitution.
57 (3) The commission shall promulgate rules to implement this section.
58 Section 2. Section 59-13-102 is amended to read:

59 59-13-102. Definitions.
60 As used in this chapter:
61 (1) "Airline" means:
62 (a) any air carrier operating interstate routes on a scheduled basis which offers to fly
63 passengers or cargo on the basis of available capacity on regularly scheduled routes; or
64 (b) any federally certificated air carrier that enplanes at least 10,000 enplanements per
65 year at any single airport in this state.
66 [(1)] (2) "Aviation fuel" means fuel that is sold at airports and used exclusively for the
67 operation of aircraft.
68 [(2)] (3) "Clean fuel" means:
69 (a) the following special fuels:
70 (i) propane;
71 (ii) compressed natural gas; or
72 (iii) electricity; or
73 (b) any motor or special fuel that meets the clean fuel vehicle standards in the federal
74 clean Air Act Amendments of 1990, Title II.
75 [(3)] (4) "Commission" means the State Tax Commission.
76 [(4)] (5) (a) "Diesel fuel" means any liquid that is commonly or commercially known,
77 offered for sale, or used as a fuel in diesel engines.
78 (b) "Diesel fuel" includes any combustible liquid, by whatever name the liquid may be
79 known or sold, when the liquid is used in an internal combustion engine for the generation of
80 power to operate a motor vehicle licensed to operate on the highway, except fuel that is subject
81 to the tax imposed in Part 2, Motor Fuel, and Part 4, Aviation Fuel, of this chapter.
82 [(5)] (6) "Distributor" means any person in this state who:
83 (a) imports or causes to be imported motor fuel for use, distribution, or sale, whether at
84 retail or wholesale;
85 (b) produces, refines, manufactures, or compounds motor fuel in this state for use,
86 distribution, or sale in this state;
87 (c) is engaged in the business of purchasing motor fuel for resale in wholesale
88 quantities to retail dealers of motor fuel and who accounts for his own motor fuel tax liability;
89 or

90 (d) for purposes of Part 4, Aviation Fuel, only, makes retail sales of aviation fuel to:
91 (i) federally certificated air carriers; and
92 (ii) other persons.
93 [(6)] (7) "Dyed diesel fuel" means diesel fuel that is dyed in accordance with 26 U.S.C.
94 Sec. 4082 or United States Environmental Protection Agency or Internal Revenue Service
95 regulations and that is considered destined for nontaxable off-highway use.
96 [(7)] (8) "Exchange agreement" means an agreement between licensed suppliers where
97 one is a position holder in a terminal who agrees to deliver taxable special fuel to the other
98 supplier or the other supplier's customer at the loading rack of the terminal where the delivering
99 supplier holds an inventory position.
100 [(8)] (9) "Federally certificated air carrier" means a person who holds a certificate
101 issued by the Federal Aviation Administration authorizing the person to conduct an all-cargo
102 operation or scheduled operation, as defined in 14 C.F.R. Sec. 119.3.
103 [(9)] (10) "Fuels" means any gas, liquid, solid, mixture, or other energy source which is
104 generally used in an engine or motor for the generation of power, including aviation fuel, clean
105 fuel, diesel fuel, motor fuel, and special fuel.
106 [(10)] (11) "Highway" means every way or place, of whatever nature, generally open to
107 the use of the public for the purpose of vehicular travel notwithstanding that the way or place
108 may be temporarily closed for the purpose of construction, maintenance, or repair.
109 [(11)] (12) "Motor fuel" means fuel that is commonly or commercially known or sold
110 as gasoline or gasohol and is used for any purpose, but does not include aviation fuel.
111 [(12)] (13) "Motor fuels received" means:
112 (a) motor fuels that have been loaded at the refinery or other place into tank cars,
113 placed in any tank at the refinery from which any withdrawals are made directly into tank
114 trucks, tank wagons, or other types of transportation equipment, containers, or facilities other
115 than tank cars, or placed in any tank at the refinery from which any sales, uses, or deliveries not
116 involving transportation are made directly; or
117 (b) motor fuels that have been imported by any person into the state from any other
118 state or territory by tank car, tank truck, pipeline, or any other conveyance at the time when,
119 and the place where, the interstate transportation of the motor fuel is completed within the state
120 by the person who at the time of the delivery is the owner of the motor fuel.

121 [(13)] (14) (a) "Qualified motor vehicle" means a special fuel-powered motor vehicle
122 used, designed, or maintained for transportation of persons or property which:
123 (i) has a gross vehicle weight or registered gross vehicle weight exceeding 26,000
124 pounds;
125 (ii) has three or more axles regardless of weight; or
126 (iii) is used in a combination of vehicles when the weight of the combination of
127 vehicles exceeds 26,000 pounds gross vehicle weight.
128 (b) "Qualified motor vehicle" does not include a recreational vehicle not used in
129 connection with any business activity.
130 [(14)] (15) "Rack," as used in Part 3, Special Fuel, means a deck, platform, or open bay
131 which consists of a series of metered pipes and hoses for the delivery or removal of diesel fuel
132 from a refinery or terminal into a motor vehicle, rail car, or vessel.
133 [(15)] (16) "Removal," as used in Part 3, Special Fuel, means the physical transfer of
134 diesel fuel from a production, manufacturing, terminal, or refinery facility and includes use of
135 diesel fuel. Removal does not include:
136 (a) loss by evaporation or destruction; or
137 (b) transfers between refineries, racks, or terminals.
138 [(16)] (17) (a) "Special fuel" means any fuel regardless of name or character that:
139 (i) is usable as fuel to operate or propel a motor vehicle upon the public highways of
140 the state; and
141 (ii) is not taxed under the category of aviation or motor fuel.
142 (b) Special fuel includes:
143 (i) fuels that are not conveniently measurable on a gallonage basis; and
144 (ii) diesel fuel.
145 [(17)] (18) "Supplier," as used in Part 3, Special Fuel, means a person who:
146 (a) imports or acquires immediately upon importation into this state diesel fuel from
147 within or without a state, territory, or possession of the United States or the District of
148 Columbia;
149 (b) produces, manufactures, refines, or blends diesel fuel in this state;
150 (c) otherwise acquires for distribution or sale in this state, diesel fuel with respect to
151 which there has been no previous taxable sale or use; or

152 (d) is in a two party exchange where the receiving party is deemed to be the supplier.
153 [(18)] (19) "Terminal," as used in Part 3, Special Fuel, means a facility for the storage
154 of diesel fuel which is supplied by a motor vehicle, pipeline, or vessel and from which diesel
155 fuel is removed for distribution at a rack.
156 [(19)] (20) "Two party exchange" means a transaction in which special fuel is
157 transferred between licensed suppliers pursuant to an exchange agreement.
158 [(20)] (21) "Undyed diesel fuel" means diesel fuel that is not subject to the dyeing
159 requirements in accordance with 26 U.S.C. Sec. 4082 or United States Environmental
160 Protection Agency or Internal Revenue Service regulations.
161 [(21)] (22) "Use," as used in Part 3, Special Fuel, means the consumption of special
162 fuel for the operation or propulsion of a motor vehicle upon the public highways of the state
163 and includes the reception of special fuel into the fuel supply tank of a motor vehicle.
164 [(22)] (23) "User," as used in Part 3, Special Fuel, means any person who uses special
165 fuel within this state in an engine or motor for the generation of power to operate or propel a
166 motor vehicle upon the public highways of the state.
167 [(23)] (24) "Ute tribal member" means an enrolled member of the Ute tribe.
168 [(24)] (25) "Ute tribe" means the Ute Indian Tribe of the Uintah and Ouray
169 Reservation.
170 [(25)] (26) "Ute trust land" means the lands:
171 (a) of the Uintah and Ouray Reservation that are held in trust by the United States for
172 the benefit of:
173 (i) the Ute tribe;
174 (ii) an individual; or
175 (iii) a group of individuals; or
176 (b) specified as trust land by agreement between the governor and the Ute tribe meeting
177 the requirements of Subsections 59-13-201.5 (3) and 59-13-301.5 (3).
178 Section 3. Section 59-13-401 is amended to read:
179 59-13-401. Aviation fuel tax -- Rate.
180 (1) A tax is imposed upon aviation fuel at the rates provided in this section.
181 (2) Except as provided by Subsection (3) the tax on aviation fuel shall be[:] 17 cents
182 per gallon.

183 [(a) beginning July 1, 1999, six cents per gallon;]
184 [(b) beginning July 1, 2000, eight cents per gallon; and]
185 [(c) beginning July 1, 2001, nine cents per gallon.]
186 (3) Aviation fuel purchased for use by [a federally certificated air carrier] an airline is
187 subject to a tax of [four] 4 cents per gallon.
188 Section 4. Section 59-13-402 is amended to read:
189 59-13-402. Revenue from taxes deposited with treasurer -- Credit to Aeronautics
190 Restricted Account -- Purposes for which funds may be used -- Allocation of funds --
191 Reports -- Returns required.
192 (1) (a) All revenue received by the commission under this part shall be deposited daily
193 with the state treasurer who shall credit all of the revenue collected to the Transportation Fund.
194 (b) An appropriation from the Transportation Fund shall be made to the commission to
195 cover expenses incurred in the administration and enforcement of this part and the collection of
196 the aviation fuel tax.
197 (c) Refunds to which taxpayers are entitled under this part shall be paid from the
198 Transportation Fund.
199 (2) The state treasurer shall place an amount equal to the total amount received from
200 the sale or use of aviation fuel in the Transportation Fund's Restricted Revenue Account for
201 aeronautical operations of the Department of Transportation for:
202 (a) the construction, improvement, operation, and maintenance of publicly used
203 airports in this state and the payment of principal and interest on indebtedness incurred for
204 those purposes;
205 (b) the promotion of aeronautics in this state; and
206 (c) the payment of the costs and expenses of the Department of Transportation in
207 administering this part or other law conferring upon it the duty of regulating and supervising
208 aeronautics in this state.
209 (3) The tax imposed on each gallon of aviation fuel under Section 59-13-401 shall be
210 allocated to the airport where the aviation fuel was sold and to aeronautical operations of the
211 Department of Transportation as follows:
212 Total Allocation to Allocation to
213 Tax Airport Aeronautical

214 Allocated Operations
215 (a) Tax on Each Gallon of Aviation
216 Fuel Purchased for Use by [a Federally]
217 [Certificated Air Carrier] an Airline Other than at
218 the Salt Lake International Airport $.04 $.03 $.01
219 (b) Tax, less a refund or credit
220 claimed under Section 59-13-404 ,
221 on Each Gallon of Aviation
222 Fuel Purchased for Use by [a Certificated]
223 [Air Carrier] an Airline at the Salt Lake International
224 Airport $.025 $.015 $.01
225 (c) Tax on Each Gallon of Aviation
226 Fuel Purchased for Use by a Person Other
227 than [a Federally Certificated Air Carrier] an Airline
228 at the Salt Lake International Airport $.17 $.00 $.17
229 [beginning July 1, 1999 $.06 $.02 $.04]
230 [beginning July 1, 2000 $.08 $.01 $.07]
231 [beginning July 1, 2001 $.09 $.00 $.09]
232 (d) Tax on Each Gallon of Aviation Fuel
233 Purchased for Use by a Person Other
234 than [a Federally Certificated Air Carrier] an Airline
235 Other than at the Salt Lake
236 International Airport $.17 $.03 $.14
237 [beginning July 1, 1999 $.06 $.03 $.03]
238 [beginning July 1, 2000 $.08 $.03 $.05]
239 [beginning July 1, 2001 $.09 $.03 $.06]
240 (e) The allocation to the publicly used airport may be used at the discretion of the
241 airport's governing authority for the purposes specified in Subsection (2)(a).
242 (f) Upon appropriation by the Legislature, the allocation to aeronautical operations of
243 the Department of Transportation shall be used as provided in Subsection (2).
244 (4) (a) The commission shall require reports and returns from distributors, retail

245 dealers, and users in order to enable the commission and the Department of Transportation to
246 allocate the revenue to be credited to the Transportation Fund's Restricted Revenue Account for
247 the aeronautical operations of that department and the separate accounts of individual airports.
248 (b) (i) Except as provided by Subsection (4)(b)(ii), any unexpended amount remaining
249 in the account of any publicly used airport on the first day of January, April, July, and October
250 shall be paid to the authority operating the airport.
251 (ii) Aviation fuel tax allocated to any airport owned and operated by a city of the first
252 class shall be paid to the city treasurer on the first day of each month.
253 (c) The state treasurer shall place aviation fuel tax collected on fuel sold at places other
254 than publicly used airports in the Transportation Fund's Restricted Revenue Account for the
255 aeronautical operations of the Department of Transportation.
256 Section 5. Section 59-13-403 is amended to read:
257 59-13-403. Administration and penalties -- Bond requirements.
258 (1) All administrative and penalty provisions of Part 2, Motor Fuel, apply to the
259 administration of Part 4, Aviation Fuel.
260 (2) Notwithstanding Subsection (1), a distributor is not required to furnish a bond if the
261 distributor:
262 (a) meets the definition of distributor under [Subsection] Section 59-13-102 [(5)(d)];
263 and
264 (b) has an average tax liability of $500 or less per month.
265 Section 6. Section 59-13-404 is amended to read:
266 59-13-404. Refunds of aviation fuel tax -- Filing claims -- Commission approval --
267 Rulemaking -- Appeals -- Penalties.
268 (1) [A federally certificated air carrier] An airline is entitled to a $.015 refund or credit
269 of the aviation fuel tax paid on gallons of aviation fuel purchased at the Salt Lake International
270 Airport, subject to the conditions and limitations provided under this section.
271 (2) (a) [A federally certificated air carrier] An airline shall file a claim for a refund or
272 credit with the commission within 90 days of the end of the tax year for which a claim is made.
273 (b) [A federally certificated air carrier] An airline filing a claim for a refund or credit
274 shall furnish any or all of the information outlined in this section upon request of the
275 commission.

276 (3) (a) The claim shall include an application containing:
277 (i) the name of the [federally certificated air carrier] airline claimant;
278 (ii) the number of gallons actually purchased;
279 (iii) the place of purchase; and
280 (iv) any other information required by the commission to support the claim.
281 (b) This original claim and all information contained in it, constitutes a permanent file
282 with the commission in the name of the [federally certificated air carrier] airline claimant.
283 (4) (a) Upon commission approval of the claim for a refund, the commission shall pay
284 the amount found due to the [federally certificated air carrier] airline claimant.
285 (b) The total amount of claims for refunds shall be paid from the Transportation Fund.
286 (5) (a) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
287 the commission may promulgate rules to enforce this part, and may refuse to accept
288 unsubstantiated evidence for the claim.
289 (b) If the commission is not satisfied with the evidence submitted in connection with
290 the claim, it may reject the claim or require additional evidence.
291 (6) [A federally certificated air carrier] An airline aggrieved by the decision of the
292 commission with respect to a refund or credit may file a request for agency action, requesting a
293 hearing before the commission.
294 (7) (a) [A federally certificated air carrier who] An airline that makes any false claim,
295 report, or statement, with intent to defraud or secure a refund or credit to which the claimant is
296 not entitled, is subject to the criminal penalties provided under Section 59-1-401 [, and the].
297 (b) The commission shall initiate the filing of a complaint for alleged violations of this
298 part.
299 (c) In addition to [these] the penalties under Subsection (7)(a), the [federally
300 certificated air carrier] airline may not receive any refund or credit as a claimant for a period of
301 five years.
302 Section 7. Section 72-10-110 is amended to read:
303 72-10-110. Aircraft registration information requirements -- Registration fee --
304 Administration -- Partial year registration.
305 (1) All applications for aircraft registration, including under Section 72-10-111 , shall
306 contain:

307 (a) a description of the aircraft, including:
308 (i) the manufacturer or builder;
309 (ii) the aircraft registration number, type, year of manufacture, or if an experimental
310 aircraft, the year the aircraft was completed and certified for air worthiness by an inspector of
311 the Federal Aviation Administration; and
312 (iii) gross weight;
313 (b) the name and address of the owner of the aircraft; and
314 (c) where the aircraft is located, or the address where the aircraft is usually used or
315 based.
316 (2) (a) Except as provided in Section 72-10-111 , at the time application is made for
317 registration or renewal of registration of an aircraft under this chapter, an annual registration
318 fee shall be paid as follows:
319 (i) [$25] $45 for each balloon, glider, ultralight, helicopter, or propellor driven aircraft;
320 (ii) [$5,000] $75 for each jet aircraft with a maximum gross takeoff weight under
321 20,000 lbs.; and
322 (iii) [$10,000] $100 for each jet aircraft with a maximum gross takeoff weight of
323 20,000 lbs. or more.
324 (b) The registration fees assessed under this chapter shall be collected by the county
325 and remitted to the State Tax Commission to be distributed as provided in Subsection (2)(c).
326 (c) After deducting the costs of administering all aircraft registrations under this
327 chapter, the State Tax Commission shall deposit all remaining aircraft registration fees in the
328 Transportation Fund's Restricted Revenue Account for aeronautical operations of the
329 Department of Transportation to be used as provided in Subsection 59-13-402 (2).
330 [(d) Aircraft which are registered under this chapter for less than a full calendar year
331 shall be charged a registration fee which is reduced in proportion to the fraction of the calendar
332 year during which the aircraft is registered in this state.]
333 Section 8. Effective date.
334 This bill takes effect on January 1, 2008.

Legislative Review Note
as of 2-8-07 4:04 PM

Office of Legislative Research and General Counsel