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S.B. 253





Sponsor: Thomas V. Hatch

             5      This act modifies the Privilege Tax code to provide that the possession or other beneficial
             6      use of public land occupied under the terms of certain agricultural leases or permits is
             7      not subject to the privilege tax. This act makes technical changes. This act takes effect
             8      on January 1, 2004.
             9      This act affects sections of Utah Code Annotated 1953 as follows:
             10      AMENDS:
             11          59-4-101, as last amended by Chapter 286, Laws of Utah 2002
             12      Be it enacted by the Legislature of the state of Utah:
             13          Section 1. Section 59-4-101 is amended to read:
             14           59-4-101. Tax basis -- Exceptions -- Assessment and collection.
             15          (1) (a) Except as provided in Subsections (1)(b) and (c), a tax is imposed on the
             16      possession or other beneficial use enjoyed by any person of any real or personal property which
             17      for any reason is exempt from taxation, if that property is used in connection with a business
             18      conducted for profit.
             19          (b) Any interest remaining in the state in state lands after subtracting amounts paid or
             20      due in part payment of the purchase price as provided in Subsection 59-2-1103 (2)(b)(i) under a
             21      contract of sale is subject to taxation under this chapter regardless of whether the property is
             22      used in connection with a business conducted for profit.
             23          (c) The tax imposed under Subsection (1)(a) does not apply to property exempt from
             24      taxation under Section 59-2-1114 .
             25          (2) The tax imposed under this chapter is the same amount that the ad valorem property
             26      tax would be if the possessor or user were the owner of the property. The amount of any
             27      payments which are made in lieu of taxes is credited against the tax imposed on the beneficial

             28      use of property owned by the federal government.
             29          (3) A tax is not imposed under this chapter on the following:
             30          (a) the use of property which is a concession in, or relative to, the use of a public
             31      airport, park, fairground, or similar property which is available as a matter of right to the use of
             32      the general public;
             33          (b) the use or possession of property by a religious, educational, or charitable
             34      organization;
             35          (c) the use or possession of property if the revenue generated by the possessor or user
             36      of the property through its possession or use of the property inures only to the benefit of a
             37      religious, educational, or charitable organization and not to the benefit of any other person;
             38          (d) the possession or other beneficial use of public land occupied under the terms of [a
             39      grazing] an agricultural lease or permit issued by the United States or this state;
             40          (e) the use or possession of any lease, permit, or easement unless the lease, permit, or
             41      easement entitles the lessee or permittee to exclusive possession of the premises to which the
             42      lease, permit, or easement relates. Every lessee, permittee, or other holder of a right to remove
             43      or extract the mineral covered by the holder's lease, right, permit, or easement except from
             44      brines of the Great Salt Lake, is considered to be in possession of the premises,
             45      notwithstanding the fact that other parties may have a similar right to remove or extract another
             46      mineral from the same lands or estates; or
             47          (f) the use or possession of property by a public agency, as defined in Section
             48      11-13-103 , to the extent that the ownership interest of the public agency in that property is
             49      subject to a fee in lieu of ad valorem property tax under Section 11-13-302 .
             50          (4) A tax imposed under this chapter is assessed to the possessors or users of the
             51      property on the same forms, and collected and distributed at the same time and in the same
             52      manner, as taxes assessed owners, possessors, or other claimants of property which is subject to
             53      ad valorem property taxation. The tax is not a lien against the property, and no tax-exempt
             54      property may be attached, encumbered, sold, or otherwise affected for the collection of the tax.
             55          Section 2. Effective date.
             56          This act takes effect on January 1, 2004.

Legislative Review Note
    as of 2-19-03 4:02 PM

A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel

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