Utah Administrative Code
Topic - Tax Commission
Title R884 - Property Tax
Rule R884-24P - Property Tax
Section R884-24P-20 - Construction Work in Progress Pursuant to Utah Constitution Art. XIII, Section 2 and Utah Code Ann. Sections 59-2-201 and 59-2-301

(a) "Construction work in progress" means improvements as defined in Section 59-2-102, and personal property as defined in Section 59-2-102, that are not functionally complete.

(b) "Project" means any undertaking involving construction, expansion or modernization.

(c) "Construction" means:

(d) "Expansion" means an increase in production or capacity as a result of the project.

(e) "Modernization" means a change or contrast in character or quality resulting from the introduction of improved techniques, methods or products.

(f) "Functionally complete" or "functional completion" means capable of providing economic benefit to the owner through fulfillment of the purpose for which it was constructed. In the case of a cost-regulated utility, a project shall be functionally complete when the operating property associated with the project has been capitalized on the books and is part of the rate base of that utility.

(g) "Allocable preconstruction costs" means expenditures associated with the planning and preparation for the construction of a project. To be classified as an allocable preconstruction cost, an expenditure must be capitalized.

(h) "Cost- regulated utility" means a power company, oil and gas pipeline company, gas distribution company or telecommunication company whose earnings are determined by a rate of return applied to rate base. Rate of return and rate base are set and approved by a state or federal regulatory commission.

(i) "Centrally assessed property" means property that is required to be assessed under Section 59-2-201.

(j) "Locally assessed property" means property that is required to be assessed under Section 59-2-301.

(a) Discount Rates

(b) For purposes of this rule, discount rates shall be determined by the Tax Commission, and shall be consistent with market, financial and economic conditions.

(a) If requested by the taxpayer, preconstruction costs associated with centrally assessed property may be allocated to the value of the project in relation to the relative amount of total expenditures made on the project by the lien date. Allocation will be allowed only if the following conditions are satisfied by January 30 of the tax year for which the request is sought:

(b)

(c) The preconstruction costs allocated under this Subsection (4) are subject to audit for four years. If adjustments are necessary after examination of the records, those adjustments will be classified as property escaping assessment.

(a) On or before January 1 of each tax year, each county assessor shall determine the following for projects involving locally assessed property:

(b) Determination of the percentage of completion of a project for locally assessed property shall be based on the following percentages of completion:

(c) The value of a project on January 1 shall be determined by multiplying the full cash value of the project expected upon completion by the percentage of completion of the project as determined under this Subsection (5).

(a) No adjustments under this rule shall be made to the income indicator of value for a project under construction that is owned by a cost-regulated utility when the project is allowed in rate base.

(b) The full cash value of a project under construction as of January 1 of the tax year, shall be determined by adjusting the cost and income approaches as provided in this Subsection (6)(b).