S.B. 171

1

PROPERTY TAX TREATMENT OF
2 TRANSPORTABLE FACTORY-BUILT HOUSING
3 UNITS
4 2004 GENERAL SESSION
5 STATE OF UTAH
6 Sponsor: Curtis S. Bramble
7
8 LONG TITLE
9 General Description:
10 This bill amends the Property Tax Act and the Mortgage Lending and Servicing Act.
11 Highlighted Provisions:
12 This bill:
13 . amends and provides definitions;
14 . addresses the treatment of transportable factory-built housing units as personal
15 property or real property for purposes of the Property Tax Act;
16 . provides that the treatment of transportable factory-built housing units for purposes
17 of the Property Tax Act shall be determined without regard to the treatment of
18 mobile homes or manufactured homes for purposes of the Mortgage Lending and
19 Servicing Act;
20 . clarifies that the treatment of mobile homes or manufactured homes for purposes of
21 the Mortgage Lending and Servicing Act shall be determined without regard to the
22 treatment of transportable factory-built housing units for purposes of the Property
23 Tax Act; and
24 . makes technical changes.
25 Monies Appropriated in this Bill:
26 None
27 Other Special Clauses:

28 This bill has retrospective operation to January 1, 2004.
29 Utah Code Sections Affected:
30 AMENDS:
31 59-2-102, as last amended by Chapter 113, Laws of Utah 2003
32 70D-1-20, as enacted by Chapter 229, Laws of Utah 2003
33 ENACTS:
34 59-2-1501, Utah Code Annotated 1953
35 59-2-1502, Utah Code Annotated 1953
36 59-2-1503, Utah Code Annotated 1953
37
38 Be it enacted by the Legislature of the state of Utah:
39 Section 1. Section 59-2-102 is amended to read:
40 59-2-102. Definitions.
41 As used in this chapter and title:
42 (1) "Aerial applicator" means aircraft or rotorcraft used exclusively for the purpose of
43 engaging in dispensing activities directly affecting agriculture or horticulture with an
44 airworthiness certificate from the Federal Aviation Administration certifying the aircraft or
45 rotorcraft's use for agricultural and pest control purposes.
46 (2) "Air charter service" means an air carrier operation which requires the customer to
47 hire an entire aircraft rather than book passage in whatever capacity is available on a scheduled
48 trip.
49 (3) "Air contract service" means an air carrier operation available only to customers
50 who engage the services of the carrier through a contractual agreement and excess capacity on
51 any trip and is not available to the public at large.
52 (4) "Aircraft" is as defined in Section 72-10-102 .
53 (5) "Airline" means any air carrier operating interstate routes on a scheduled basis
54 which offers to fly passengers or cargo on the basis of available capacity on regularly scheduled
55 routes.
56 (6) "Assessment roll" means a permanent record of the assessment of property as
57 assessed by the county assessor and the commission and may be maintained manually or as a
58 computerized file as a consolidated record or as multiple records by type, classification, or

59 categories.
60 (7) "Certified revenue levy" means a property tax levy that provides the same amount
61 of ad valorem property tax revenue as was collected for the prior year, plus new growth, but
62 exclusive of revenue from collections from redemptions, interest, and penalties.
63 (8) "County-assessed commercial vehicle" means:
64 (a) any commercial vehicle, trailer, or semitrailer which is not apportioned under
65 Section 41-1a-301 and is not operated interstate to transport the vehicle owner's goods or
66 property in furtherance of the owner's commercial enterprise;
67 (b) any passenger vehicle owned by a business and used by its employees for
68 transportation as a company car or vanpool vehicle; and
69 (c) vehicles which are:
70 (i) especially constructed for towing or wrecking, and which are not otherwise used to
71 transport goods, merchandise, or people for compensation;
72 (ii) used or licensed as taxicabs or limousines;
73 (iii) used as rental passenger cars, travel trailers, or motor homes;
74 (iv) used or licensed in this state for use as ambulances or hearses;
75 (v) especially designed and used for garbage and rubbish collection; or
76 (vi) used exclusively to transport students or their instructors to or from any private,
77 public, or religious school or school activities.
78 (9) (a) Except as provided in Subsection (9)(b), for purposes of Section 59-2-801 ,
79 "designated tax area" means a tax area created by the overlapping boundaries of only the
80 following taxing entities:
81 (i) a county; and
82 (ii) a school district.
83 (b) Notwithstanding Subsection (9)(a), "designated tax area" includes a tax area created
84 by the overlapping boundaries of:
85 (i) the taxing entities described in Subsection (9)(a); and
86 (ii) (A) a city or town if the boundaries of the school district under Subsection (9)(a)
87 and the boundaries of the city or town are identical; or
88 (B) a special service district if the boundaries of the school district under Subsection
89 (9)(a) are located entirely within the special service district.

90 (10) "Eligible judgment" means a final and unappealable judgment or order under
91 Section 59-2-1330 :
92 (a) that became a final and unappealable judgment or order no more than 14 months
93 prior to the day on which the notice required by Subsection 59-2-919 (4) is required to be
94 mailed; and
95 (b) for which a taxing entity's share of the final and unappealable judgment or order is
96 greater than or equal to the lesser of:
97 (i) $5,000; or
98 (ii) 2.5% of the total ad valorem property taxes collected by the taxing entity in the
99 previous fiscal year.
100 (11) (a) "Escaped property" means any property, whether personal, land, or any
101 improvements to the property, subject to taxation and is:
102 (i) inadvertently omitted from the tax rolls, assigned to the incorrect parcel, or assessed
103 to the wrong taxpayer by the assessing authority;
104 (ii) undervalued or omitted from the tax rolls because of the failure of the taxpayer to
105 comply with the reporting requirements of this chapter; or
106 (iii) undervalued because of errors made by the assessing authority based upon
107 incomplete or erroneous information furnished by the taxpayer.
108 (b) Property which is undervalued because of the use of a different valuation
109 methodology or because of a different application of the same valuation methodology is not
110 "escaped property."
111 (12) "Fair market value" means the amount at which property would change hands
112 between a willing buyer and a willing seller, neither being under any compulsion to buy or sell
113 and both having reasonable knowledge of the relevant facts. For purposes of taxation, "fair
114 market value" shall be determined using the current zoning laws applicable to the property in
115 question, except in cases where there is a reasonable probability of a change in the zoning laws
116 affecting that property in the tax year in question and the change would have an appreciable
117 influence upon the value.
118 (13) "Farm machinery and equipment," for purposes of the exemption provided under
119 Section 59-2-1101 , means tractors, milking equipment and storage and cooling facilities, feed
120 handling equipment, irrigation equipment, harvesters, choppers, grain drills and planters, tillage

121 tools, scales, combines, spreaders, sprayers, haying equipment, and any other machinery or
122 equipment used primarily for agricultural purposes; but does not include vehicles required to be
123 registered with the Motor Vehicle Division or vehicles or other equipment used for business
124 purposes other than farming.
125 (14) "Geothermal fluid" means water in any form at temperatures greater than 120
126 degrees centigrade naturally present in a geothermal system.
127 (15) "Geothermal resource" means:
128 (a) the natural heat of the earth at temperatures greater than 120 degrees centigrade;
129 and
130 (b) the energy, in whatever form, including pressure, present in, resulting from, created
131 by, or which may be extracted from that natural heat, directly or through a material medium.
132 (16) (a) ["Improvements"] Except as provided in Subsection (16)(b), "improvement"
133 includes [all buildings, structures, fixtures, fences, and improvements erected upon or affixed
134 to the land, whether the title has been acquired to the land or not.] the following if erected upon
135 or affixed to land, regardless of whether the title has been acquired to the land:
136 (i) a building;
137 (ii) a fence;
138 (iii) a fixture;
139 (iv) an improvement; and
140 (v) a structure.
141 (b) Notwithstanding Subsection (16)(a), "improvement" does not include a
142 transportable factory-built housing unit as defined in Section 59-2-1502 if that transportable
143 factory-built housing unit is considered to be personal property under Section 59-2-1503 .
144 (17) "Intangible property" means:
145 (a) property that is capable of private ownership separate from tangible property,
146 including:
147 (i) moneys;
148 (ii) credits;
149 (iii) bonds;
150 (iv) stocks;
151 (v) representative property;

152 (vi) franchises;
153 (vii) licenses;
154 (viii) trade names;
155 (ix) copyrights; and
156 (x) patents; or
157 (b) a low-income housing tax credit.
158 (18) "Low-income housing tax credit" means:
159 (a) a federal low-income housing tax credit under Section 42, Internal Revenue Code;
160 or
161 (b) a low-income housing tax credit under:
162 (i) Section 59-7-607 ; or
163 (ii) Section 59-10-129 .
164 (19) "Metalliferous minerals" includes gold, silver, copper, lead, zinc, and uranium.
165 (20) "Mine" means a natural deposit of either metalliferous or nonmetalliferous
166 valuable mineral.
167 (21) "Mining" means the process of producing, extracting, leaching, evaporating, or
168 otherwise removing a mineral from a mine.
169 (22) (a) "Mobile flight equipment" means tangible personal property that is:
170 (i) owned or operated by an:
171 (A) air charter service;
172 (B) air contract service; or
173 (C) airline; and
174 (ii) (A) capable of flight;
175 (B) attached to an aircraft that is capable of flight; or
176 (C) contained in an aircraft that is capable of flight if the tangible personal property is
177 intended to be used:
178 (I) during multiple flights;
179 (II) during a takeoff, flight, or landing; and
180 (III) as a service provided by an air charter service, air contract service, or airline.
181 (b) (i) "Mobile flight equipment" does not include a spare part other than a spare
182 engine that is rotated:

183 (A) at regular intervals; and
184 (B) with an engine that is attached to the aircraft.
185 (ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
186 the commission may make rules defining the term "regular intervals."
187 (23) "Nonmetalliferous minerals" includes, but is not limited to, oil, gas, coal, salts,
188 sand, rock, gravel, and all carboniferous materials.
189 (24) "Personal property" includes:
190 (a) every class of property as defined in Subsection (25) which is the subject of
191 ownership and not included within the meaning of the terms "real estate" and "improvements";
192 (b) gas and water mains and pipes laid in roads, streets, or alleys;
193 (c) bridges and ferries; and
194 (d) livestock which, for the purposes of the exemption provided under Section
195 59-2-1112 , means all domestic animals, honeybees, poultry, fur-bearing animals, and fish.
196 (25) (a) "Property" means property that is subject to assessment and taxation according
197 to its value.
198 (b) "Property" does not include intangible property as defined in this section.
199 (26) "Public utility," for purposes of this chapter, means the operating property of a
200 railroad, gas corporation, oil or gas transportation or pipeline company, coal slurry pipeline
201 company, electrical corporation, telephone corporation, sewerage corporation, or heat
202 corporation where the company performs the service for, or delivers the commodity to, the
203 public generally or companies serving the public generally, or in the case of a gas corporation
204 or an electrical corporation, where the gas or electricity is sold or furnished to any member or
205 consumers within the state for domestic, commercial, or industrial use. Public utility also
206 means the operating property of any entity or person defined under Section 54-2-1 except water
207 corporations.
208 (27) "Real estate" or "real property" includes:
209 (a) the possession of, claim to, ownership of, or right to the possession of land;
210 (b) all mines, minerals, and quarries in and under the land, all timber belonging to
211 individuals or corporations growing or being on the lands of this state or the United States, and
212 all rights and privileges appertaining to these; and
213 (c) improvements.

214 (28) "Residential property," for the purposes of the reductions and adjustments under
215 this chapter, means any property used for residential purposes as a primary residence. It does
216 not include property used for transient residential use or condominiums used in rental pools.
217 (29) For purposes of Subsection 59-2-801 (1)(e), "route miles" means the number of
218 miles calculated by the commission that is:
219 (a) measured in a straight line by the commission; and
220 (b) equal to the distance between a geographical location that begins or ends:
221 (i) at a boundary of the state; and
222 (ii) where an aircraft:
223 (A) takes off; or
224 (B) lands.
225 (30) (a) "State-assessed commercial vehicle" means:
226 (i) any commercial vehicle, trailer, or semitrailer which operates interstate or intrastate
227 to transport passengers, freight, merchandise, or other property for hire; or
228 (ii) any commercial vehicle, trailer, or semitrailer which operates interstate and
229 transports the vehicle owner's goods or property in furtherance of the owner's commercial
230 enterprise.
231 (b) "State-assessed commercial vehicle" does not include vehicles used for hire which
232 are specified in Subsection (8)(c) as county-assessed commercial vehicles.
233 (31) "Taxable value" means fair market value less any applicable reduction allowed for
234 residential property under Section 59-2-103 .
235 (32) "Tax area" means a geographic area created by the overlapping boundaries of one
236 or more taxing entities.
237 (33) "Taxing entity" means any county, city, town, school district, special taxing
238 district, or any other political subdivision of the state with the authority to levy a tax on
239 property.
240 (34) "Tax roll" means a permanent record of the taxes charged on property, as extended
241 on the assessment roll and may be maintained on the same record or records as the assessment
242 roll or may be maintained on a separate record properly indexed to the assessment roll. It
243 includes tax books, tax lists, and other similar materials.
244 Section 2. Section 59-2-1501 is enacted to read:

245 Part 15. Transportable Factory-Built Housing Unit Act
246 59-2-1501. Title.
247 This part is known as the "Transportable Factory-Built Housing Unit Act."
248 Section 3. Section 59-2-1502 is enacted to read:
249 59-2-1502. Definitions.
250 As used in this part:
251 (1) "Manufactured home" is as defined in Section 41-1a-102 .
252 (2) "Mobile home" is as defined in Section 41-1a-102.
253 (3) "Transportable factory-built housing unit" means a:
254 (a) mobile home; or
255 (b) manufactured home.
256 (4) "Transportable factory-built housing unit park" means any tract of land on which
257 two or more unit spaces are:
258 (a) leased;
259 (b) rented; or
260 (c) offered for:
261 (i) lease; or
262 (ii) rent.
263 (5) "Unit space" means a specific area of land within a transportable factory-built
264 housing unit park that is designed to accommodate one transportable factory-built housing unit
265 for residential purposes.
266 Section 4. Section 59-2-1503 is enacted to read:
267 59-2-1503. Property tax treatment of transportable factory-built housing units.
268 Regardless of whether a transportable factory-built housing unit is considered to be real
269 property or personal property under Section 70D-1-20 , for purposes of this chapter:
270 (1) a transportable factory-built housing unit that is located in a transportable
271 factory-built housing unit park:
272 (a) except as provided in Subsection (1)(b), is considered to be personal property; and
273 (b) notwithstanding Subsection (1)(a), is considered to be real property if the owner of
274 the transportable factory-built housing unit owns the real property upon which the transportable
275 factory-built housing unit is located; and

276 (2) a transportable factory-built housing unit that is not located in a transportable
277 factory-built housing unit park:
278 (a) except as provided in Subsection (2)(b), is considered to be personal property; and
279 (b) notwithstanding Subsection (2)(a), is considered to be real property if the
280 transportable factory-built housing unit is an improvement.
281 Section 5. Section 70D-1-20 is amended to read:
282 70D-1-20. Qualification of manufactured home or mobile home as improvement
283 to real property -- Requirements -- Removal from property.
284 (1) Except as provided in this section, for purposes of this chapter, a manufactured
285 home or mobile home shall be considered personal property.
286 (2) Notwithstanding Subsection (1), for purposes of this chapter, if the requirements of
287 this section are met, a manufactured home or mobile home shall be:
288 (a) considered to be an improvement to real property; and
289 (b) considered as real property.
290 (3) A manufactured home or mobile home shall be considered to be an improvement to
291 real property if:
292 (a) the manufactured home or mobile home is permanently affixed to real property;
293 (b) the person seeking to have the manufactured home or mobile home considered to
294 be an improvement to real property:
295 (i) owns the manufactured home or mobile home; and
296 (ii) (A) owns the real property to which the manufactured home or mobile home is
297 permanently affixed; or
298 (B) leases the real property to which the manufactured home or mobile home is
299 permanently affixed and the real property is financed in accordance with Subsection (4); and
300 (iii) meets the requirements of Subsections (5) and (6); and
301 (c) in accordance with Subsection (7), the following are recorded by the county
302 recorder:
303 (i) the affidavit of affixture described in Subsection (7); and
304 (ii) the receipt of surrender described in Subsection (7).
305 (4) For purposes of Subsection (3)(b)(ii)(B), a manufactured home or mobile home
306 shall be financed in accordance with the guidelines established by:

307 (a) the Federal Home Loan Mortgage Corporation;
308 (b) the Federal National Mortgage Association;
309 (c) the United States Department of Agriculture; or
310 (d) another entity that requires as part of the entity's financing program restrictions:
311 (i) on:
312 (A) ownership; and
313 (B) actions affecting title and possession; and
314 (ii) if the restrictions described in Subsection (4)(d)(i) are similar to restrictions
315 imposed by one or more of the entities described in Subsections (4)(a) through (c).
316 (5) (a) An owner of a manufactured home or mobile home seeking to have the
317 manufactured home or mobile home considered to be an improvement to real property and
318 considered real property shall complete an affidavit of affixture.
319 (b) An affidavit of affixture described in Subsection (5)(a) shall contain:
320 (i) the vehicle identification numbers of the manufactured home or mobile home;
321 (ii) the legal description of the real property to which the manufactured home or mobile
322 home is permanently affixed;
323 (iii) a statement certified by the assessor of the county in which the manufactured home
324 or mobile home is located that the owner of the manufactured home or mobile home:
325 (A) is not required to pay personal property tax in this state on the manufactured home
326 or mobile home; or
327 (B) if the manufactured home or mobile home is subject to personal property tax in this
328 state, has paid all current and prior year personal property taxes assessed on the manufactured
329 home or mobile home;
330 (iv) a description of any security interests in the manufactured home or mobile home;
331 and
332 (v) a receipt of surrender issued by the Motor Vehicle Division of the State Tax
333 Commission in accordance with Subsection (6).
334 (6) (a) The Motor Vehicle Division of the State Tax Commission shall issue a receipt
335 of surrender under Subsection (5)(b)(v) if an owner described in Subsection (5) surrenders to
336 the Motor Vehicle Division the:
337 (i) manufacturer's original certificate of origin; or

338 (ii) title to the manufactured home or mobile home.
339 (b) After issuing the receipt of surrender in Subsection (6)(a), the Motor Vehicle
340 Division shall maintain a permanent record of:
341 (i) the receipt of surrender; and
342 (ii) the certificate or title described in Subsection (6)(a)(ii).
343 (7) (a) An owner shall present to the county recorder:
344 (i) the affidavit of affixture described in Subsection (5); and
345 (ii) the receipt of surrender described in Subsection (6).
346 (b) A county recorder who receives an affidavit of affixture and receipt of surrender
347 described in Subsection (7)(a) shall record the receipt of surrender and affidavit of affixture.
348 (c) An owner of property described in Subsection (5) shall provide a copy of the
349 recorded affidavit of affixture to:
350 (i) the Motor Vehicle Division of the Tax Commission; and
351 (ii) the assessor of the county in which the manufactured home or mobile home is
352 located.
353 (8) A lien on the manufactured home or mobile home that is considered to be an
354 improvement to real property shall be perfected in the manner provided for the perfection of a
355 lien on real property.
356 (9) If a manufactured home or mobile home owner separates the manufactured home or
357 mobile home from the real property, the owner may acquire a new title by submitting to the
358 Motor Vehicle Division of the State Tax Commission:
359 (a) a recorded affidavit that the manufactured home or mobile home has been removed
360 from the real property; and
361 (b) an application for a new title.
362 (10) The determination of whether a manufactured home or mobile home is considered
363 real property or personal property under this section may not be considered in determining
364 whether the manufactured home or mobile home is real property or personal property for
365 purposes of taxation under Title 59, Chapter 2, Property Tax Act.
366 Section 6. Retrospective operation.
367 This bill has retrospective operation to January 1, 2004.

Legislative Review Note
as of 2-2-04 4:01 PM

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

Office of Legislative Research and General Counsel