S.B. 132 Enrolled

AVIATION FUEL TAX AMENDMENTS
1999 GENERAL SESSION
STATE OF UTAH
Sponsor: Lyle W. Hillyard
AN ACT RELATING TO THE MOTOR AND SPECIAL FUEL TAX ACT; INCREASING THE
AVIATION FUEL TAX; CHANGING THE ALLOCATION OF AVIATION FUEL TAX
REVENUE; DEFINING AVIATION FUEL DISTRIBUTOR AND FEDERALLY
CERTIFICATED AIR CARRIER; MODIFYING BONDING REQUIREMENTS FOR
AVIATION FUEL DISTRIBUTORS; AND PROVIDING AN EFFECTIVE DATE.
This act affects sections of Utah Code Annotated 1953 as follows:
AMENDS:
59-13-102, as last amended by Chapter 271, Laws of Utah 1997
59-13-401, as enacted by Chapter 6, Laws of Utah 1987
59-13-402, as enacted by Chapters 6 and 187, Laws of Utah 1987
59-13-403, as last amended by Chapter 145, Laws of Utah 1989
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 59-13-102 is amended to read:
59-13-102. Definitions.
As used in this chapter:
(1) "Aviation fuel" means fuel that is sold at airports and used exclusively for the operation
of aircraft.
(2) "Clean fuel" means:
(a) the following special fuels:
(i) propane;
(ii) compressed natural gas; or
(iii) electricity; or
(b) any motor or special fuel that meets the clean fuel vehicle standards in the federal clean
Air Act Amendments of 1990, Title II.
(3) "Commission" means the State Tax Commission.

(4) (a) "Diesel fuel" means any liquid that is commonly or commercially known, offered for
sale, or used as a fuel in diesel engines.
(b) "Diesel fuel" includes any combustible liquid, by whatever name the liquid may be
known or sold, when the liquid is used in an internal combustion engine for the generation of power
to operate a motor vehicle licensed to operate on the highway, except fuel that is subject to the tax
imposed in Part 2, Motor Fuel, and Part 4, Aviation Fuel, of this chapter.
(5) "Distributor" means any person in this state who:
(a) imports or causes to be imported motor fuel for use, distribution, or sale, whether at retail
or wholesale;
(b) produces, refines, manufactures, or compounds motor fuel in this state for use,
distribution, or sale in this state; [or]
(c) is engaged in the business of purchasing motor fuel for resale in wholesale quantities to
retail dealers of motor fuel and who accounts for his own motor fuel tax liability[.]; or
(d) for purposes of Part 4, Aviation Fuel, only, makes retail sales of aviation fuel to:
(i) federally certificated air carriers; and
(ii) other persons.
(6) "Dyed diesel fuel" means diesel fuel that is dyed in accordance with 26 U.S.C. Sec. 4082
or United States Environmental Protection Agency or Internal Revenue Service regulations and that
is considered destined for nontaxable off-highway use.
(7) "Exchange agreement" means an agreement between licensed suppliers where one is a
position holder in a terminal who agrees to deliver taxable special fuel to the other supplier or the
other supplier's customer at the loading rack of the terminal where the delivering supplier holds an
inventory position.
(8) "Federally certificated air carrier" means a person who holds a certificate issued by the
Federal Aviation Administration authorizing the person to conduct an all-cargo operation or
scheduled operation, as defined in 14 C.F.R. Sec. 119.3.
[(8)] (9) "Fuels" means any gas, liquid, solid, mixture, or other energy source which is
generally used in an engine or motor for the generation of power, including aviation fuel, clean fuel,

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diesel fuel, motor fuel, and special fuel.
[(9)] (10) "Highway" means every way or place, of whatever nature, generally open to the
use of the public for the purpose of vehicular travel notwithstanding that the way or place may be
temporarily closed for the purpose of construction, maintenance, or repair.
[(10)] (11) "Motor fuel" means fuel that is commonly or commercially known or sold as
gasoline or gasohol and is used for any purpose, but does not include aviation fuel.
[(11)] (12) "Motor fuels received" means:
(a) motor fuels that have been loaded at the refinery or other place into tank cars, placed in
any tank at the refinery from which any withdrawals are made directly into tank trucks, tank wagons,
or other types of transportation equipment, containers, or facilities other than tank cars, or placed in
any tank at the refinery from which any sales, uses, or deliveries not involving transportation are
made directly; or
(b) motor fuels that have been imported by any person into the state from any other state or
territory by tank car, tank truck, pipeline, or any other conveyance at the time when, and the place
where, the interstate transportation of the motor fuel is completed within the state by the person who
at the time of the delivery is the owner of the motor fuel.
[(12)] (13) (a) "Qualified motor vehicle" means a special fuel-powered motor vehicle used,
designed, or maintained for transportation of persons or property which:
(i) has a gross vehicle weight or registered gross vehicle weight exceeding 26,000 pounds;
(ii) has three or more axles regardless of weight; or
(iii) is used in a combination of vehicles when the weight of the combination of vehicles
exceeds 26,000 pounds gross vehicle weight.
(b) "Qualified motor vehicle" does not include a recreational vehicle not used in connection
with any business activity.
[(13)] (14) "Rack," as used in Part 3, means a deck, platform, or open bay which consists of
a series of metered pipes and hoses for the delivery or removal of diesel fuel from a refinery or
terminal into a motor vehicle, rail car, or vessel.
[(14)] (15) "Removal," as used in Part 3, means the physical transfer of diesel fuel from a

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production, manufacturing, terminal, or refinery facility and includes use of diesel fuel. Removal
does not include:
(a) loss by evaporation or destruction; or
(b) transfers between refineries, racks, or terminals.
[(15)] (16) (a) "Special fuel" means any fuel regardless of name or character that:
(i) is usable as fuel to operate or propel a motor vehicle upon the public highways of the
state; and
(ii) is not taxed under the category of aviation or motor fuel.
(b) Special fuel includes [those]:
(i) fuels that are not conveniently measurable on a gallonage basis[.]; and
[(b)] (ii) ["Special fuel" includes] diesel fuel.
[(16)] (17) "Supplier," as used in Part 3, means a person who:
(a) imports or acquires immediately upon importation into this state diesel fuel from within
or without a state, territory, or possession of the United States or the District of Columbia;
(b) produces, manufactures, refines, or blends diesel fuel in this state;
(c) otherwise acquires for distribution or sale in this state, diesel fuel with respect to which
there has been no previous taxable sale or use; or
(d) is in a two party exchange where the receiving party is deemed to be the supplier.
[(17)] (18) "Terminal," as used in Part 3, means a facility for the storage of diesel fuel which
is supplied by a motor vehicle, pipeline, or vessel and from which diesel fuel is removed for
distribution at a rack.
[(18)] (19) "Two party exchange" means a transaction in which special fuel is transferred
between licensed suppliers pursuant to an exchange agreement.
[(19)] (20) "Undyed diesel fuel" means diesel fuel that is not subject to the dyeing
requirements in accordance with 26 U.S.C. Sec. 4082 or United States Environmental Protection
Agency or Internal Revenue Service regulations.
[(20)] (21) "Use," as used in Part 3, means the consumption of special fuel for the operation
or propulsion of a motor vehicle upon the public highways of the state and includes the reception of

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special fuel into the fuel supply tank of a motor vehicle.
[(21)] (22) "User," as used in Part 3, means any person who uses special fuel within this state
in an engine or motor for the generation of power to operate or propel a motor vehicle upon the
public highways of the state.
Section 2. Section 59-13-401 is amended to read:
59-13-401. Aviation fuel tax -- Rate.
(1) A tax is imposed [at the rate] upon aviation fuel at the rates provided in this section.
(2) Except as provided by Subsection (3) the tax on aviation fuel shall be:
(a) beginning July 1, 1999, six cents per gallon;
(b) beginning July 1, 2000, eight cents per gallon; and
(c) beginning July 1, 2001, nine cents per gallon.
(3) Aviation fuel purchased for use by a federally certificated air carrier is subject to a tax
of four cents per gallon [upon all aviation fuel].
Section 3. Section 59-13-402 is amended to read:
59-13-402. Revenue from taxes deposited with treasurer -- Credit to Aeronautics
Restricted Account -- Purposes for which funds may be used -- Allocation of funds -- Reports
-- Returns required.
(1) (a) All revenue received by the commission under this part shall be deposited daily with
the state treasurer who shall credit all of the revenue collected to the Transportation Fund.
(b) An appropriation from the Transportation Fund shall be made to the commission to cover
expenses incurred in the administration and enforcement of this part and the collection of the
aviation fuel tax.
(c) Refunds to which taxpayers are entitled under this part shall be paid from the
Transportation Fund.
(2) The state treasurer shall place an amount equal to the total amount received from the sale
or use of aviation fuel in the Transportation Fund's Restricted Revenue Account for aeronautical
operations of the Department of Transportation for:
(a) the construction, improvement, operation, and maintenance of publicly used airports in

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this state and the payment of principal and interest on indebtedness incurred for those purposes;
(b) the promotion of aeronautics in this state; and
(c) the payment of the costs and expenses of the Department of Transportation in
administering this part or other law conferring upon it the duty of regulating and supervising
aeronautics in this state.
[(3) Seventy-five percent of the aviation fuel tax collected on fuel sold at each airport shall
be paid to that airport for its use under Subsection (2). All amounts collected on fuel sold at airports
owned and operated by cities of the first class shall be paid to the city treasurer on the first day of
each month and used for airport use at the discretion of the governing authority of the city.]
[(4) The remaining 25% shall be expended as the aeronautical operations of the Department
of Transportation may determine under Subsection (2). ]
(3) The tax imposed on each gallon of aviation fuel under Section 59-13-401 shall be
allocated to the airport where the aviation fuel was sold and to aeronautical operations of the
Department of Transportation as follows:
Total Allocation to Allocation to
Tax Airport Aeronautical
Operations
Tax on Each Gallon of Aviation Fuel Purchased
for Use by a Federally Certificated Air Carrier $.04 $.03 $.01
Tax on Each Gallon of Aviation Fuel Purchased
for Use by a Person Other than a
Federally Certificated Air Carrier at the Salt Lake International Airport
beginning July 1, 1999 $.06 $.02 $.04
beginning July 1, 2000 $.08 $.01 $.07
beginning July 1, 2001 $.09 $.00 $.09
Tax on Each Gallon of Aviation Fuel Purchased
for Use by a Person Other than a
Federally Certificated Air Carrier Other than at the Salt Lake International Airport

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beginning July 1, 1999 $.06 $.03 $.03
beginning July 1, 2000 $.08 $.03 $.05
beginning July 1, 2001 $.09 $.03 $.06
(a) The allocation to the publicly used airport may be used at the discretion of the airport's
governing authority for the purposes specified in Subsection (2)(a).
(b) Upon appropriation by the Legislature, the allocation to aeronautical operations of the
Department of Transportation shall be used as provided in Subsection (2).
[(5) ] (4) (a) The commission shall require reports and returns from distributors, retail
dealers, and users in order to enable the commission and the Department of Transportation to
allocate the revenue to be credited to the Transportation Fund's Restricted Revenue Account for the
aeronautical [operation] operations of that department and the separate accounts of individual
airports. [Any]
(b) (i) Except as provided by Subsection (4)(b)(ii), any unexpended amount remaining in the
account of any publicly used airport on the first day of January, April, July, and October shall be paid
to the authority operating the airport [and used to defray operating expenses of the airport].
(ii) Aviation fuel tax allocated to any airport owned and operated by a city of the first class
shall be paid to the city treasurer on the first day of each month.
(c) The state treasurer shall place [the remainder] aviation fuel tax collected on fuel sold at
places other than publicly used airports in the Transportation Fund's Restricted Revenue Account
for the aeronautical operations of the Department of Transportation.
Section 4. Section 59-13-403 is amended to read:
59-13-403. Administration and penalties -- Bond requirements.
(1) All administrative and penalty provisions of Part 2, Motor Fuel, apply to the
administration of Part 4, Aviation Fuel.
(2) (a) Notwithstanding Subsection (1) and Subsection 59-13-203 (3), [the bond requirement
for aviation fuel distributors whose tax liability averages $500 or less per month during the preceding
six months is $2,000.] and except as provided in Subsection (2)(b), the bond may not be less than
$2,000.

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(b) A distributor is not required to furnish a bond if the distributor:
(i) meets the definition of distributor under Subsection 59-13-102 (5)(d); and
(ii) has an average tax liability of $500 or less per month.
Section 5. Effective date.
This act takes effect on July 1, 1999.

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