S.B. 157 Enrolled

1

PROPERTY TAXATION AND REGISTRATION OF AIRCRAFT
2 2009 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Mark B. Madsen
5 House Sponsor: Wayne A. Harper
6
7 LONG TITLE
8 General Description:
9 This bill amends provisions in the Property Tax Act and the Uniform Aeronautical
10 Regulatory Act related to the taxation and registration of certain charter aircraft.
11 Highlighted Provisions:
12 This bill:
13 . provides that, for purposes of property taxation of an air charter service, operating
14 property does not include an aircraft that is used by the air charter service for air
15 charter and is owned by a person other than the air charter service;
16 . reduces the registration fee for an aircraft used by an air charter service for air
17 charter from .4% to .25% of the average wholesale value of the aircraft; and
18 . makes technical changes.
19 Monies Appropriated in this Bill:
20 None
21 Other Special Clauses:
22 This bill provides retrospective operation for a taxable year beginning on or after
23 January 1, 2009.
24 Utah Code Sections Affected:
25 AMENDS:
26 59-2-201, as last amended by Laws of Utah 2007, Chapters 119 and 306
27 72-10-110, as last amended by Laws of Utah 2008, Chapter 206
28
29 Be it enacted by the Legislature of the state of Utah:

30 Section 1. Section 59-2-201 is amended to read:
31 59-2-201. Assessment by commission -- Determination of value of mining
32 property -- Notification of assessment -- Local assessment of property assessed by the
33 unitary method.
34 (1) (a) By May 1 of each year the following property, unless otherwise exempt under
35 the Utah Constitution or under Part 11, Exemptions, Deferrals, and Abatements, shall be
36 assessed by the commission at 100% of fair market value, as valued on January 1, in
37 accordance with this chapter:
38 [(a)] (i) except as provided in Subsection (2), all property which operates as a unit
39 across county lines, if the values must be apportioned among more than one county or state;
40 [(b)] (ii) all property of public utilities;
41 [(c)] (iii) all operating property of an airline, air charter service, and air contract
42 service;
43 [(d)] (iv) all geothermal fluids and geothermal resources;
44 [(e)] (v) all mines and mining claims except in cases, as determined by the
45 commission, where the mining claims are used for other than mining purposes, in which case
46 the value of mining claims used for other than mining purposes shall be assessed by the
47 assessor of the county in which the mining claims are located; and
48 [(f)] (vi) all machinery used in mining, all property or surface improvements upon or
49 appurtenant to mines or mining claims. For the purposes of assessment and taxation, all
50 processing plants, mills, reduction works, and smelters which are primarily used by the owner
51 of a mine or mining claim for processing, reducing, or smelting minerals taken from a mine or
52 mining claim shall be considered appurtenant to that mine or mining claim, regardless of
53 actual location.
54 (b) (i) For purposes of Subsection (1)(a)(iii), operating property of an air charter
55 service does not include an aircraft that is:
56 (A) used by the air charter service for air charter; and
57 (B) owned by a person other than the air charter service.

58 (ii) For purposes of this Subsection (1)(b):
59 (A) "person" means a natural person, individual, corporation, organization, or other
60 legal entity; and
61 (B) a person does not qualify as a person other than the air charter service as described
62 in Subsection (1)(b)(i)(B) if the person is:
63 (I) a principal, owner, or member of the air charter service; or
64 (II) a legal entity that has a principal, owner, or member of the air charter service as a
65 principal, owner, or member of the legal entity.
66 (2) The commission shall assess and collect property tax on state-assessed commercial
67 vehicles at the time of original registration or annual renewal.
68 (a) The commission shall assess and collect property tax annually on state-assessed
69 commercial vehicles which are registered pursuant to Section 41-1a-222 or 41-1a-228 .
70 (b) State-assessed commercial vehicles brought into the state which are required to be
71 registered in Utah shall, as a condition of registration, be subject to ad valorem tax unless all
72 property taxes or fees imposed by the state of origin have been paid for the current calendar
73 year.
74 (c) Real property, improvements, equipment, fixtures, or other personal property in
75 this state owned by the company shall be assessed separately by the local county assessor.
76 (d) The commission shall adjust the value of state-assessed commercial vehicles as
77 necessary to comply with 49 U.S.C. Sec. 14502, and the commission shall direct the county
78 assessor to apply the same adjustment to any personal property, real property, or improvements
79 owned by the company and used directly and exclusively in their commercial vehicle
80 activities.
81 (3) The method for determining the fair market value of productive mining property is
82 the capitalized net revenue method or any other valuation method the commission believes, or
83 the taxpayer demonstrates to the commission's satisfaction, to be reasonably determinative of
84 the fair market value of the mining property. The rate of capitalization applicable to mines
85 shall be determined by the commission, consistent with a fair rate of return expected by an

86 investor in light of that industry's current market, financial, and economic conditions. In no
87 event may the fair market value of the mining property be less than the fair market value of the
88 land, improvements, and tangible personal property upon or appurtenant to the mining
89 property.
90 (4) Immediately following the assessment, the owner or operator of the assessed
91 property shall be notified of the assessment by certified mail. The assessor of the county in
92 which the property is located shall also be immediately notified of the assessment by certified
93 mail.
94 (5) Property assessed by the unitary method, which is not necessary to the conduct and
95 does not contribute to the income of the business as determined by the commission, shall be
96 assessed separately by the local county assessor.
97 Section 2. Section 72-10-110 is amended to read:
98 72-10-110. Aircraft registration information requirements -- Registration fee --
99 Administration -- Partial year registration.
100 (1) All applications for aircraft registration shall contain:
101 (a) a description of the aircraft, including:
102 (i) the manufacturer or builder;
103 (ii) the aircraft registration number, type, year of manufacture, or if an experimental
104 aircraft, the year the aircraft was completed and certified for air worthiness by an inspector of
105 the Federal Aviation Administration; and
106 (iii) gross weight;
107 (b) the name and address of the owner of the aircraft; and
108 (c) where the aircraft is located, or the address where the aircraft is usually used or
109 based.
110 (2) (a) Except as provided in Subsection (3), at the time application is made for
111 registration or renewal of registration of an aircraft under this chapter, an annual registration
112 fee of 0.4% of the average wholesale value of the aircraft shall be paid.
113 (b) For purposes of calculating the value of the aircraft under Subsection (2)(a) or

114 (3)(d), the Tax Commission shall use the average wholesale value as stated in the Aircraft
115 Bluebook Price Digest.
116 (3) (a) Notwithstanding Subsection (2)[: (a)], the following aircraft shall pay an annual
117 registration fee of $100:
118 (i) an aircraft not listed in the Aircraft Bluebook Price Digest; or
119 (ii) an experimental aircraft.
120 (b) [An] Notwithstanding Subsection (2), an aircraft 50 years or older shall pay the
121 lesser of:
122 (i) $100; or
123 (ii) the uniform fee provided for under Subsection (2)(a)[; and].
124 (c) [an] Notwithstanding Subsection (2), an aircraft that does not have a valid
125 airworthiness certificate for a period of six months or more:
126 (i) may not apply for a certificate of registration required under Section 72-10-109 ;
127 and
128 (ii) is exempt from paying a registration fee until the aircraft has a valid airworthiness
129 certificate.
130 (d) Notwithstanding Subsection (2), an aircraft shall pay an annual registration fee of
131 .25% of the average wholesale value of the aircraft if:
132 (i) used by an air charter service for air charter; and
133 (ii) owned by a person other than the air charter service.
134 (4) (a) The Tax Commission shall provide a registration card to an owner of an aircraft
135 if:
136 (i) the owner complies with the registration requirements of this section; and
137 (ii) the owner of the aircraft states that the aircraft has a valid airworthiness certificate.
138 (b) An owner of an aircraft shall carry the registration card in the registered aircraft.
139 (5) The registration fees assessed under this chapter shall be collected by the Tax
140 Commission to be distributed as provided in Subsection (6).
141 (6) (a) After deducting the costs of administering all aircraft registrations under this

142 chapter, the Tax Commission shall deposit all remaining aircraft registration fees in the
143 Transportation Fund's Restricted Revenue Account for aeronautical operations of the
144 Department of Transportation to be used as provided in Subsection 59-13-402 (2).
145 (b) All interest earned on monies in the Transportation Fund's Restricted Revenue
146 Account shall be deposited into the Transportation Fund's Restricted Revenue Account for
147 aeronautical operations.
148 (7) Aircraft which are registered under this chapter for less than a full calendar year
149 shall be charged a registration fee which is reduced in proportion to the fraction of the
150 calendar year during which the aircraft is registered in this state.
151 (8) (a) The Utah Division of Aeronautics shall maintain a statewide database of all
152 aircraft based within the state.
153 (b) On or before October 1 of each year, the Utah Division of Aeronautics shall
154 provide the Tax Commission with the data the Tax Commission requires from the database
155 described in Subsection (8)(a).
156 (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
157 commission may by rule define the contents of the database described in Subsection (8)(a).
158 (9) The Tax Commission may suspend or revoke a registration if it determines that the
159 required fee has not been paid and the fee is not paid upon reasonable notice and demand.
160 Section 3. Retrospective operation.
161 This bill has retrospective operation for a taxable year beginning on or after January 1,
162 2009.