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S.B. 177





Sponsor: Michael G. Waddoups

             6      LONG TITLE
             7      General Description:
             8          This bill modifies the Property Tax Act to clarify the definition of personal property.
             9      Highlighted Provisions:
             10          This bill:
             11          .    amends the definition of personal property to clarify that outdoor advertising
             12      structures are personal property; and
             13          .    makes technical changes.
             14      Monies Appropriated in this Bill:
             15          None
             16      Other Special Clauses:
             17          This bill provides for retrospective operation.
             18      Utah Code Sections Affected:
             19      AMENDS:
             20          59-2-102, as last amended by Chapter 113, Laws of Utah 2003
             22      Be it enacted by the Legislature of the state of Utah:
             23          Section 1. Section 59-2-102 is amended to read:
             24           59-2-102. Definitions.
             25          As used in this chapter and title:
             26          (1) "Aerial applicator" means aircraft or rotorcraft used exclusively for the purpose of
             27      engaging in dispensing activities directly affecting agriculture or horticulture with an

             28      airworthiness certificate from the Federal Aviation Administration certifying the aircraft or
             29      rotorcraft's use for agricultural and pest control purposes.
             30          (2) "Air charter service" means an air carrier operation which requires the customer to
             31      hire an entire aircraft rather than book passage in whatever capacity is available on a scheduled
             32      trip.
             33          (3) "Air contract service" means an air carrier operation available only to customers
             34      who engage the services of the carrier through a contractual agreement and excess capacity on
             35      any trip and is not available to the public at large.
             36          (4) "Aircraft" is as defined in Section 72-10-102 .
             37          (5) "Airline" means any air carrier operating interstate routes on a scheduled basis
             38      which offers to fly passengers or cargo on the basis of available capacity on regularly scheduled
             39      routes.
             40          (6) "Assessment roll" means a permanent record of the assessment of property as
             41      assessed by the county assessor and the commission and may be maintained manually or as a
             42      computerized file as a consolidated record or as multiple records by type, classification, or
             43      categories.
             44          (7) "Certified revenue levy" means a property tax levy that provides the same amount
             45      of ad valorem property tax revenue as was collected for the prior year, plus new growth, but
             46      exclusive of revenue from collections from redemptions, interest, and penalties.
             47          (8) "County-assessed commercial vehicle" means:
             48          (a) any commercial vehicle, trailer, or semitrailer which is not apportioned under
             49      Section 41-1a-301 and is not operated interstate to transport the vehicle owner's goods or
             50      property in furtherance of the owner's commercial enterprise;
             51          (b) any passenger vehicle owned by a business and used by its employees for
             52      transportation as a company car or vanpool vehicle; and
             53          (c) vehicles which are:
             54          (i) especially constructed for towing or wrecking, and which are not otherwise used to
             55      transport goods, merchandise, or people for compensation;
             56          (ii) used or licensed as taxicabs or limousines;
             57          (iii) used as rental passenger cars, travel trailers, or motor homes;
             58          (iv) used or licensed in this state for use as ambulances or hearses;

             59          (v) especially designed and used for garbage and rubbish collection; or
             60          (vi) used exclusively to transport students or their instructors to or from any private,
             61      public, or religious school or school activities.
             62          (9) (a) Except as provided in Subsection (9)(b), for purposes of Section 59-2-801 ,
             63      "designated tax area" means a tax area created by the overlapping boundaries of only the
             64      following taxing entities:
             65          (i) a county; and
             66          (ii) a school district.
             67          (b) Notwithstanding Subsection (9)(a), "designated tax area" includes a tax area created
             68      by the overlapping boundaries of:
             69          (i) the taxing entities described in Subsection (9)(a); and
             70          (ii) (A) a city or town if the boundaries of the school district under Subsection (9)(a)
             71      and the boundaries of the city or town are identical; or
             72          (B) a special service district if the boundaries of the school district under Subsection
             73      (9)(a) are located entirely within the special service district.
             74          (10) "Eligible judgment" means a final and unappealable judgment or order under
             75      Section 59-2-1330 :
             76          (a) that became a final and unappealable judgment or order no more than 14 months
             77      prior to the day on which the notice required by Subsection 59-2-919 (4) is required to be
             78      mailed; and
             79          (b) for which a taxing entity's share of the final and unappealable judgment or order is
             80      greater than or equal to the lesser of:
             81          (i) $5,000; or
             82          (ii) 2.5% of the total ad valorem property taxes collected by the taxing entity in the
             83      previous fiscal year.
             84          (11) (a) "Escaped property" means any property, whether personal, land, or any
             85      improvements to the property, subject to taxation and is:
             86          (i) inadvertently omitted from the tax rolls, assigned to the incorrect parcel, or assessed
             87      to the wrong taxpayer by the assessing authority;
             88          (ii) undervalued or omitted from the tax rolls because of the failure of the taxpayer to
             89      comply with the reporting requirements of this chapter; or

             90          (iii) undervalued because of errors made by the assessing authority based upon
             91      incomplete or erroneous information furnished by the taxpayer.
             92          (b) Property which is undervalued because of the use of a different valuation
             93      methodology or because of a different application of the same valuation methodology is not
             94      "escaped property."
             95          (12) "Fair market value" means the amount at which property would change hands
             96      between a willing buyer and a willing seller, neither being under any compulsion to buy or sell
             97      and both having reasonable knowledge of the relevant facts. For purposes of taxation, "fair
             98      market value" shall be determined using the current zoning laws applicable to the property in
             99      question, except in cases where there is a reasonable probability of a change in the zoning laws
             100      affecting that property in the tax year in question and the change would have an appreciable
             101      influence upon the value.
             102          (13) "Farm machinery and equipment," for purposes of the exemption provided under
             103      Section 59-2-1101 , means tractors, milking equipment and storage and cooling facilities, feed
             104      handling equipment, irrigation equipment, harvesters, choppers, grain drills and planters, tillage
             105      tools, scales, combines, spreaders, sprayers, haying equipment, and any other machinery or
             106      equipment used primarily for agricultural purposes; but does not include vehicles required to be
             107      registered with the Motor Vehicle Division or vehicles or other equipment used for business
             108      purposes other than farming.
             109          (14) "Geothermal fluid" means water in any form at temperatures greater than 120
             110      degrees centigrade naturally present in a geothermal system.
             111          (15) "Geothermal resource" means:
             112          (a) the natural heat of the earth at temperatures greater than 120 degrees centigrade;
             113      and
             114          (b) the energy, in whatever form, including pressure, present in, resulting from, created
             115      by, or which may be extracted from that natural heat, directly or through a material medium.
             116          (16) "Improvements" includes all buildings, structures, fixtures, fences, and
             117      improvements erected upon or affixed to the land, whether the title has been acquired to the
             118      land or not.
             119          (17) "Intangible property" means:
             120          (a) property that is capable of private ownership separate from tangible property,

             121      including:
             122          (i) moneys;
             123          (ii) credits;
             124          (iii) bonds;
             125          (iv) stocks;
             126          (v) representative property;
             127          (vi) franchises;
             128          (vii) licenses;
             129          (viii) trade names;
             130          (ix) copyrights; and
             131          (x) patents; or
             132          (b) a low-income housing tax credit.
             133          (18) "Low-income housing tax credit" means:
             134          (a) a federal low-income housing tax credit under Section 42, Internal Revenue Code;
             135      or
             136          (b) a low-income housing tax credit under:
             137          (i) Section 59-7-607 ; or
             138          (ii) Section 59-10-129 .
             139          (19) "Metalliferous minerals" includes gold, silver, copper, lead, zinc, and uranium.
             140          (20) "Mine" means a natural deposit of either metalliferous or nonmetalliferous
             141      valuable mineral.
             142          (21) "Mining" means the process of producing, extracting, leaching, evaporating, or
             143      otherwise removing a mineral from a mine.
             144          (22) (a) "Mobile flight equipment" means tangible personal property that is:
             145          (i) owned or operated by an:
             146          (A) air charter service;
             147          (B) air contract service; or
             148          (C) airline; and
             149          (ii) (A) capable of flight;
             150          (B) attached to an aircraft that is capable of flight; or
             151          (C) contained in an aircraft that is capable of flight if the tangible personal property is

             152      intended to be used:
             153          (I) during multiple flights;
             154          (II) during a takeoff, flight, or landing; and
             155          (III) as a service provided by an air charter service, air contract service, or airline.
             156          (b) (i) "Mobile flight equipment" does not include a spare part other than a spare
             157      engine that is rotated:
             158          (A) at regular intervals; and
             159          (B) with an engine that is attached to the aircraft.
             160          (ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
             161      the commission may make rules defining the term "regular intervals."
             162          (23) "Nonmetalliferous minerals" includes, but is not limited to, oil, gas, coal, salts,
             163      sand, rock, gravel, and all carboniferous materials.
             164          (24) "Personal property" includes:
             165          (a) every class of property as defined in Subsection (25) which is the subject of
             166      ownership and not included within the meaning of the terms "real estate" and "improvements";
             167          (b) gas and water mains and pipes laid in roads, streets, or alleys;
             168          (c) bridges and ferries; [and]
             169          (d) livestock which, for the purposes of the exemption provided under Section
             170      59-2-1112 , means all domestic animals, honeybees, poultry, fur-bearing animals, and fish[.];
             171      and
             172          (e) outdoor advertising structures as defined in Section 72-7-502 .
             173          (25) (a) "Property" means property that is subject to assessment and taxation according
             174      to its value.
             175          (b) "Property" does not include intangible property as defined in this section.
             176          (26) "Public utility," for purposes of this chapter, means the operating property of a
             177      railroad, gas corporation, oil or gas transportation or pipeline company, coal slurry pipeline
             178      company, electrical corporation, telephone corporation, sewerage corporation, or heat
             179      corporation where the company performs the service for, or delivers the commodity to, the
             180      public generally or companies serving the public generally, or in the case of a gas corporation
             181      or an electrical corporation, where the gas or electricity is sold or furnished to any member or
             182      consumers within the state for domestic, commercial, or industrial use. Public utility also

             183      means the operating property of any entity or person defined under Section 54-2-1 except water
             184      corporations.
             185          (27) "Real estate" or "real property" includes:
             186          (a) the possession of, claim to, ownership of, or right to the possession of land;
             187          (b) all mines, minerals, and quarries in and under the land, all timber belonging to
             188      individuals or corporations growing or being on the lands of this state or the United States, and
             189      all rights and privileges appertaining to these; and
             190          (c) improvements.
             191          (28) "Residential property," for the purposes of the reductions and adjustments under
             192      this chapter, means any property used for residential purposes as a primary residence. It does
             193      not include property used for transient residential use or condominiums used in rental pools.
             194          (29) For purposes of Subsection 59-2-801 (1)(e), "route miles" means the number of
             195      miles calculated by the commission that is:
             196          (a) measured in a straight line by the commission; and
             197          (b) equal to the distance between a geographical location that begins or ends:
             198          (i) at a boundary of the state; and
             199          (ii) where an aircraft:
             200          (A) takes off; or
             201          (B) lands.
             202          (30) (a) "State-assessed commercial vehicle" means:
             203          (i) any commercial vehicle, trailer, or semitrailer which operates interstate or intrastate
             204      to transport passengers, freight, merchandise, or other property for hire; or
             205          (ii) any commercial vehicle, trailer, or semitrailer which operates interstate and
             206      transports the vehicle owner's goods or property in furtherance of the owner's commercial
             207      enterprise.
             208          (b) "State-assessed commercial vehicle" does not include vehicles used for hire which
             209      are specified in Subsection (8)(c) as county-assessed commercial vehicles.
             210          (31) "Taxable value" means fair market value less any applicable reduction allowed for
             211      residential property under Section 59-2-103 .
             212          (32) "Tax area" means a geographic area created by the overlapping boundaries of one
             213      or more taxing entities.

             214          (33) "Taxing entity" means any county, city, town, school district, special taxing
             215      district, or any other political subdivision of the state with the authority to levy a tax on
             216      property.
             217          (34) "Tax roll" means a permanent record of the taxes charged on property, as extended
             218      on the assessment roll and may be maintained on the same record or records as the assessment
             219      roll or may be maintained on a separate record properly indexed to the assessment roll. It
             220      includes tax books, tax lists, and other similar materials.
             221          Section 2. Retrospective operation.
             222          This bill has retrospective operation for the taxable year beginning on January 1, 2004.

Legislative Review Note
    as of 2-5-04 6:29 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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