Representative Stephen G. Handy proposes the following substitute bill:


1     
ENERGY EFFICIENT VEHICLE TAX CREDIT

2     
AMENDMENTS

3     
2017 GENERAL SESSION

4     
STATE OF UTAH

5     
Chief Sponsor: Stephen G. Handy

6     
Senate Sponsor: Curtis S. Bramble

7     

8     LONG TITLE
9     General Description:
10          This bill modifies the corporate and individual income tax credits related to energy
11     efficient vehicles.
12     Highlighted Provisions:
13          This bill:
14          ▸     defines terms;
15          ▸     amends the Air Quality Board's rulemaking authority;
16          ▸     extends certain corporate and individual income tax credits related to energy
17     efficient vehicles;
18          ▸     amends the maximum amount of tax credit for energy efficient vehicles;
19          ▸     authorizes assignment of the corporate and individual income tax credits;
20          ▸     requires the Revenue and Taxation Interim Committee to annually review the
21     corporate and individual income tax credits related to energy efficient vehicles; and
22          ▸     makes technical changes.
23     Money Appropriated in this Bill:
24          None
25     Other Special Clauses:
26          This bill provides retrospective operation.
27     Utah Code Sections Affected:
28     AMENDS:
29          19-2-104, as last amended by Laws of Utah 2015, Chapter 154
30          59-7-605, as last amended by Laws of Utah 2016, Chapters 369 and 375
31          59-10-1009, as last amended by Laws of Utah 2016, Chapters 369 and 375
32     

33     Be it enacted by the Legislature of the state of Utah:
34          Section 1. Section 19-2-104 is amended to read:
35          19-2-104. Powers of board.
36          (1) The board may make rules in accordance with Title 63G, Chapter 3, Utah
37     Administrative Rulemaking Act:
38          (a) regarding the control, abatement, and prevention of air pollution from all sources
39     and the establishment of the maximum quantity of air pollutants that may be emitted by an air
40     pollutant source;
41          (b) establishing air quality standards;
42          (c) requiring persons engaged in operations that result in air pollution to:
43          (i) install, maintain, and use emission monitoring devices, as the board finds necessary;
44          (ii) file periodic reports containing information relating to the rate, period of emission,
45     and composition of the air pollutant; and
46          (iii) provide access to records relating to emissions which cause or contribute to air
47     pollution;
48          (d) (i) implementing:
49          (A) Toxic Substances Control Act, Subchapter II, Asbestos Hazard Emergency
50     Response, 15 U.S.C. 2601 et seq.;
51          (B) 40 C.F.R. Part 763, Asbestos; and
52          (C) 40 C.F.R. Part 61, National Emission Standards for Hazardous Air Pollutants,
53     Subpart M, National Emission Standard for Asbestos; and
54          (ii) reviewing and approving asbestos management plans submitted by local education
55     agencies under the Toxic Substances Control Act, Subchapter II, Asbestos Hazard Emergency
56     Response, 15 U.S.C. 2601 et seq.;
57          (e) establishing a requirement for a diesel emission opacity inspection and maintenance
58     program for diesel-powered motor vehicles;
59          (f) implementing an operating permit program as required by and in conformity with
60     Titles IV and V of the federal Clean Air Act Amendments of 1990;
61          (g) establishing requirements for county emissions inspection and maintenance
62     programs after obtaining agreement from the counties that would be affected by the
63     requirements;
64          (h) with the approval of the governor, implementing in air quality nonattainment areas
65     employer-based trip reduction programs applicable to businesses having more than 100
66     employees at a single location and applicable to federal, state, and local governments to the
67     extent necessary to attain and maintain ambient air quality standards consistent with the state
68     implementation plan and federal requirements under the standards set forth in Subsection (2);
69          (i) implementing lead-based paint training, certification, and performance requirements
70     in accordance with 15 U.S.C. 2601 et seq., Toxic Substances Control Act, Subchapter IV --
71     Lead Exposure Reduction, Sections 402 and 406; and
72          (j) to implement the requirements of Section 19-2-107.5.
73          (2) When implementing Subsection (1)(h) the board shall take into consideration:
74          (a) the impact of the business on overall air quality; and
75          (b) the need of the business to use automobiles in order to carry out its business
76     purposes.
77          (3) (a) The board may:
78          (i) hold a hearing that is not an adjudicative proceeding relating to any aspect of, or
79     matter in, the administration of this chapter;
80          (ii) recommend that the director:
81          (A) issue orders necessary to enforce the provisions of this chapter;
82          (B) enforce the orders by appropriate administrative and judicial proceedings;
83          (C) institute judicial proceedings to secure compliance with this chapter; or
84          (D) advise, consult, contract, and cooperate with other agencies of the state, local
85     governments, industries, other states, interstate or interlocal agencies, the federal government,
86     or interested persons or groups; and
87          (iii) establish certification requirements for asbestos project monitors, which shall
88     provide for experience-based certification of a person who:
89          (A) receives relevant asbestos training, as defined by rule; and
90          (B) has acquired a minimum of 1,000 hours of asbestos project monitoring related
91     work experience.
92          (b) The board shall:
93          (i) to ensure compliance with applicable statutes and regulations:
94          (A) review a settlement negotiated by the director in accordance with Subsection
95     19-2-107(2)(b)(viii) that requires a civil penalty of $25,000 or more; and
96          (B) approve or disapprove the settlement;
97          (ii) encourage voluntary cooperation by persons and affected groups to achieve the
98     purposes of this chapter;
99          (iii) meet the requirements of federal air pollution laws;
100          (iv) by rule in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
101     Act, establish work practice and certification requirements for persons who:
102          (A) contract for hire to conduct demolition, renovation, salvage, encapsulation work
103     involving friable asbestos-containing materials, or asbestos inspections if:
104          (I) the contract work is done on a site other than a residential property with four or
105     fewer units; or
106          (II) the contract work is done on a residential property with four or fewer units where a
107     tested sample contained greater than 1% of asbestos;
108          (B) conduct work described in Subsection (3)(b)(iv)(A) in areas to which the general
109     public has unrestrained access or in school buildings that are subject to the federal Asbestos
110     Hazard Emergency Response Act of 1986;
111          (C) conduct asbestos inspections in facilities subject to 15 U.S.C. 2601 et seq., Toxic
112     Substances Control Act, Subchapter II - Asbestos Hazard Emergency Response; or
113          (D) conduct lead-based paint inspections in facilities subject to 15 U.S.C. 2601 et seq.,
114     Toxic Substances Control Act, Subchapter IV -- Lead Exposure Reduction;
115          (v) establish certification requirements for a person required under 15 U.S.C. 2601 et
116     seq., Toxic Substances Control Act, Subchapter II - Asbestos Hazard Emergency Response, to
117     be accredited as an inspector, management planner, abatement project designer, asbestos
118     abatement contractor and supervisor, or an asbestos abatement worker;
119          (vi) establish certification procedures and [requirements for certification of the
120     conversion of a motor vehicle to a clean-fuel vehicle, certifying the] the form for submitting
121     proof of purchase or lease of a vehicle that is eligible for the tax credit [granted] described in
122     Section 59-7-605 or 59-10-1009;
123          (vii) establish certification requirements for a person required under 15 U.S.C. 2601 et
124     seq., Toxic Control Act, Subchapter IV - Lead Exposure Reduction, to be accredited as an
125     inspector, risk assessor, supervisor, project designer, abatement worker, renovator, or dust
126     sampling technician; and
127          (viii) assist the State Board of Education in adopting school bus idling reduction
128     standards and implementing an idling reduction program in accordance with Section
129     41-6a-1308.
130          (4) A rule adopted under this chapter shall be consistent with provisions of federal
131     laws, if any, relating to control of motor vehicles or motor vehicle emissions.
132          (5) Nothing in this chapter authorizes the board to require installation of or payment for
133     any monitoring equipment by the owner or operator of a source if the owner or operator has
134     installed or is operating monitoring equipment that is equivalent to equipment which the board
135     would require under this section.
136          (6) (a) The board may not require testing for asbestos or related materials on a
137     residential property with four or fewer units, unless:
138          (i) the property's construction was completed before January 1, 1981; or
139          (ii) the testing is for:
140          (A) a sprayed-on or painted on ceiling treatment that contained or may contain asbestos
141     fiber;
142          (B) asbestos cement siding or roofing materials;
143          (C) resilient flooring products including vinyl asbestos tile, sheet vinyl products,
144     resilient flooring backing material, whether attached or unattached, and mastic;
145          (D) thermal-system insulation or tape on a duct or furnace; or
146          (E) vermiculite type insulation materials.
147          (b) A residential property with four or fewer units is subject to an abatement rule made
148     under Subsection (1) or (3)(b)(iv) if:
149          (i) a sample from the property is tested for asbestos; and
150          (ii) the sample contains asbestos measuring greater than 1%.
151          (7) The board may not issue, amend, renew, modify, revoke, or terminate any of the
152     following that are subject to the authority granted to the director under Section 19-2-107 or
153     19-2-108:
154          (a) a permit;
155          (b) a license;
156          (c) a registration;
157          (d) a certification; or
158          (e) another administrative authorization made by the director.
159          (8) A board member may not speak or act for the board unless the board member is
160     authorized by a majority of a quorum of the board in a vote taken at a meeting of the board.
161          (9) Notwithstanding Subsection (7), the board may exercise all authority granted to the
162     board by a federally enforceable state implementation plan.
163          Section 2. Section 59-7-605 is amended to read:
164          59-7-605. Definitions -- Tax credits related to energy efficient vehicles.
165          (1) As used in this section:
166          (a) "Air quality standards" means that a vehicle's emissions are equal to or cleaner than
167     the standards established in bin 4 in Table S04-1, of 40 C.F.R. 86.1811-04(c)(6).
168          (b) "Board" means the Air Quality Board created under Title 19, Chapter 2, Air
169     Conservation Act.
170          (c) "Committee" means the Revenue and Taxation Interim Committee.
171          (d) "Director" means the director of the Division of Air Quality appointed under
172     Section 19-2-107.
173          (e) "Election statement" means a document that:
174          (i) is executed by:
175          (A) a qualifying taxpayer; and
176          (B) the financing entity, the financing entity's agent, or the financing entity's designee;
177          (ii) identifies the vehicle identification number of the vehicle that qualifies for a tax
178     credit under this section; and
179          (iii) affirms that the requirements described in Subsection (7) have been met.
180          (f) "Financing entity" means the entity that finances the purchase or lease of a vehicle
181     that qualifies for a tax credit under this section.
182          [(c)] (g) "OEM vehicle" means the same as that term is defined in Section 19-1-402.
183          [(d)] (h) "Original purchase" means the purchase of a vehicle that has never been titled
184     or registered and has been driven less than 7,500 miles.
185          [(e)] (i) "Qualifying electric motorcycle" means a vehicle that:
186          (i) has a seat or saddle for the use of the rider;
187          (ii) is designed to travel with not more than three wheels in contact with the ground;
188          (iii) may lawfully be operated on a freeway, as defined in Section 41-6a-102;
189          [(iv) is not fueled by natural gas;]
190          [(v)] (iv) is fueled by electricity only; and
191          [(vi)] (v) is an OEM vehicle except that the vehicle is fueled by a fuel described in
192     Subsection (1)[(e)(v)](i)(iv).
193          [(f)] (j) "Qualifying long-range electric vehicle" means a vehicle that:
194          (i) meets air quality standards;
195          [(ii) is not fueled by natural gas;]
196          [(iii) draws propulsion energy from]
197          (ii) has a battery [with] capacity of at least 10 kilowatt hours [of capacity; and];
198          (iii) is fueled by electricity only or a combination of electricity and:
199          (A) diesel fuel;
200          (B) gasoline; or
201          (C) a mixture of gasoline and ethanol; and
202          (iv) is an OEM vehicle except that the vehicle is fueled [by a fuel] as described in
203     Subsection (1)[(f)](j)(iii).
204          [(g)] (k) "Qualifying [plug-in hybrid] short-range electric vehicle" means a vehicle that:
205          (i) meets air quality standards;
206          [(ii) is not fueled by natural gas or propane;]
207          [(iii)] (ii) has a battery capacity that meets or exceeds the battery capacity described in
208     Section 30D(b)(3), Internal Revenue Code, but has less than 10 kilowatt hours of battery
209     capacity ; [and]
210          [(iv)] (iii) is fueled by electricity only or a combination of electricity and:
211          (A) diesel fuel;
212          (B) gasoline; or
213          (C) a mixture of gasoline and ethanol[.]; and
214          (iv) is an OEM vehicle except that the vehicle is fueled as described in Subsection
215     (1)(k)(iii).
216          (l) "Qualifying taxpayer" means a taxpayer that operates in a part of the state where air
217     quality is determined to exceed the National Ambient Air Quality Standards, as defined in the
218     Clean Air Amendments of 1970, Pub. L. No. 91-604, Sec. 109, for fine particulate matter (PM
219     2.5).
220          (2) For a taxable year beginning on or after January 1, [2015, but beginning] 2017, and
221     ending on or before December 31, [2016] 2017, a qualifying taxpayer may claim a
222     nonrefundable tax credit against tax otherwise due under this chapter or Chapter 8, Gross
223     Receipts Tax on Certain Corporations Not Required to Pay Corporate Franchise or Income Tax
224     Act, in an amount equal to:
225          (a) [(i)] for the original purchase of a new qualifying long-range electric vehicle that is
226     registered in this state, [the lesser of: (A)] $1,500; [or]
227          [(B) 35% of the purchase price of the vehicle; or]
228          [(ii)] (b) for the original purchase of a new qualifying [plug-in hybrid] short-range
229     electric vehicle that is registered in this state, $1,000;
230          [(b) for the original purchase of a new vehicle fueled by natural gas or propane that is
231     registered in this state, the lesser of: (i) $1,500; or]
232          [(ii) 35% of the purchase price of the vehicle;]
233          (c) for the original purchase of a new qualifying electric motorcycle that is registered in
234     this state, [the lesser of: (i)] $750; [or] and
235          [(ii) 35% of the purchase price of the vehicle; and]
236          (d) for a lease of a vehicle described in Subsection (2)(a), (b), or (c), an amount equal
237     to the product of:
238          (i) the amount of tax credit the qualifying taxpayer would otherwise qualify to claim
239     under Subsection (2)(a), (b), or (c) had the qualifying taxpayer purchased the vehicle[, except
240     that the purchase price described in Subsection (2)(a)(i)(B), (2)(b)(ii), or (2)(c)(ii) is considered
241     to be the value of the vehicle at the beginning of the lease]; and
242          (ii) a percentage calculated by:
243          (A) determining the difference between the value of the vehicle at the beginning of the
244     lease, as stated in the lease agreement, and the value of the vehicle at the end of the lease, as
245     stated in the lease agreement; and
246          (B) dividing the difference determined under Subsection (2)(d)(ii)(A) by the value of
247     the vehicle at the beginning of the lease, as stated in the lease agreement.
248          [(3) (a) The board shall:]
249          [(i) determine the amount of tax credit a taxpayer is allowed under this section; and]
250          [(ii) provide the taxpayer with a written certification of the amount of tax credit the
251     taxpayer is allowed under this section.]
252          [(b) A taxpayer shall provide proof of the purchase or lease of an item for which a tax
253     credit is allowed under this section by:]
254          [(i) providing proof to the board in the form the board requires by rule;]
255          [(ii) receiving a written statement from the board acknowledging receipt of the proof;
256     and]
257          [(iii) retaining the written statement described in Subsection (3)(b)(ii).]
258          [(c) A taxpayer shall retain the written certification described in Subsection (3)(a)(ii).]
259          [(4) Except as provided by Subsection (5), the tax credit under this section is allowed
260     only:]
261          [(a) against a tax owed under this chapter or Chapter 8, Gross Receipts Tax on Certain
262     Corporations Not Required to Pay Corporate Franchise or Income Tax Act, in the taxable year
263     by the taxpayer;]
264          [(b) for the taxable year in which a vehicle described in Subsection (2)(a), (b), or (c) is
265     purchased or a vehicle described in Subsection (2)(d) is leased; and]
266          [(c) once per vehicle.]
267          [(5) A taxpayer may not assign a tax credit under this section to another person.]
268          (3) For a taxable year beginning on or after January 1, 2018, and ending on or before
269     December 31, 2018, a qualifying taxpayer may claim a nonrefundable tax credit against tax
270     otherwise due under this chapter or Chapter 8, Gross Receipts Tax on Certain Corporations Not
271     Required to Pay Corporate Franchise or Income Tax Act, in an amount equal to:
272          (a) for the original purchase of a new qualifying long-range electric vehicle that is
273     registered in this state, $1,500;
274          (b) for the original purchase of a new qualifying short-range electric vehicle that is
275     registered in this state, $1,000;
276          (c) for the original purchase of a new qualifying electric motorcycle that is registered in
277     this state, $750; and
278          (d) for a lease of a vehicle described in Subsection (3)(a), (b), or (c), an amount equal
279     to the product of:
280          (i) the amount of tax credit the qualifying taxpayer would otherwise qualify to claim
281     under Subsection (3)(a), (b), or (c) had the qualifying taxpayer purchased the vehicle; and
282          (ii) a percentage calculated by:
283          (A) determining the difference between the value of the vehicle at the beginning of the
284     lease, as stated in the lease agreement, and the value of the vehicle at the end of the lease, as
285     stated in the lease agreement; and
286          (B) dividing the difference determined under Subsection (3)(d)(ii)(A) by the value of
287     the vehicle at the beginning of the lease, as stated in the lease agreement.
288          (4) For a taxable year beginning on or after January 1, 2019, and ending on or before
289     December 31, 2019, a qualifying taxpayer may claim a nonrefundable tax credit against tax
290     otherwise due under this chapter or Chapter 8, Gross Receipts Tax on Certain Corporations Not
291     Required to Pay Corporate Franchise or Income Tax Act, in an amount equal to:
292          (a) for the original purchase of a new qualifying long-range electric vehicle that is
293     registered in this state, $1,000;
294          (b) for the original purchase of a new qualifying short-range electric vehicle that is
295     registered in this state, $750;
296          (c) for the original purchase of a new qualifying electric motorcycle that is registered in
297     this state, $550; and
298          (d) for a lease of a vehicle described in Subsection (4)(a), (b), or (c), an amount equal
299     to the product of:
300          (i) the amount of tax credit the qualifying taxpayer would otherwise qualify to claim
301     under Subsection (4)(a), (b), or (c) had the qualifying taxpayer purchased the vehicle; and
302          (ii) a percentage calculated by:
303          (A) determining the difference between the value of the vehicle at the beginning of the
304     lease, as stated in the lease agreement, and the value of the vehicle at the end of the lease, as
305     stated in the lease agreement; and
306          (B) dividing the difference determined under Subsection (4)(d)(ii)(A) by the value of
307     the vehicle at the beginning of the lease, as stated in the lease agreement.
308          (5) For a taxable year beginning on or after January 1, 2020, and ending on or before
309     December 31, 2020, a qualifying taxpayer may claim a nonrefundable tax credit against tax
310     otherwise due under this chapter or Chapter 8, Gross Receipts Tax on Certain Corporations Not
311     Required to Pay Corporate Franchise or Income Tax Act, in an amount equal to:
312          (a) for the original purchase of a new qualifying long-range electric vehicle that is
313     registered in this state, $750;
314          (b) for the original purchase of a new qualifying short-range electric vehicle that is
315     registered in this state, $500;
316          (c) for the original purchase of a new qualifying electric motorcycle that is registered in
317     this state, $375; and
318          (d) for a lease of a vehicle described in Subsection (5)(a), (b), or (c), an amount equal
319     to the product of:
320          (i) the amount of tax credit the qualifying taxpayer would otherwise qualify to claim
321     under Subsection (5)(a), (b), or (c) had the qualifying taxpayer purchased the vehicle; and
322          (ii) a percentage calculated by:
323          (A) determining the difference between the value of the vehicle at the beginning of the
324     lease, as stated in the lease agreement, and the value of the vehicle at the end of the lease, as
325     stated in the lease agreement; and
326          (B) dividing the difference determined under Subsection (5)(d)(ii)(A) by the value of
327     the vehicle at the beginning of the lease, as stated in the lease agreement.
328          (6) For a taxable year beginning on or after January 1, 2021, and ending on or before
329     December 31, 2021, a qualifying taxpayer may claim a nonrefundable tax credit against tax
330     otherwise due under this chapter or Chapter 8, Gross Receipts Tax on Certain Corporations Not
331     Required to Pay Corporate Franchise or Income Tax Act, in an amount equal to:
332          (a) for the original purchase of a new qualifying long-range electric vehicle that is
333     registered in this state, $350;
334          (b) for the original purchase of a new qualifying short-range electric vehicle that is
335     registered in this state, $150;
336          (c) for the original purchase of a new qualifying electric motorcycle that is registered in
337     this state, $100; and
338          (d) for a lease of a vehicle described in Subsection (6)(a), (b), or (c), an amount equal
339     to the product of:
340          (i) the amount of tax credit the qualifying taxpayer would otherwise qualify to claim
341     under Subsection (6)(a), (b), or (c) had the qualifying taxpayer purchased the vehicle; and
342          (ii) a percentage calculated by:
343          (A) determining the difference between the value of the vehicle at the beginning of the
344     lease, as stated in the lease agreement, and the value of the vehicle at the end of the lease, as
345     stated in the lease agreement; and
346          (B) dividing the difference determined under Subsection (6)(d)(ii)(A) by the value of
347     the vehicle at the beginning of the lease, as stated in the lease agreement.
348          (7) (a) Except as provided in Subsection (7)(b), a qualifying taxpayer may not assign a
349     tax credit under this section to another person.
350          (b) A qualifying taxpayer may assign a tax credit under this section to a financing
351     entity as follows:
352          (i) in exchange for the consideration described in Subsection (7)(b)(iv), the qualifying
353     taxpayer shall assign the tax credit to the financing entity and forfeit the right to claim the tax
354     credit on the qualifying taxpayer's income tax return;
355          (ii) the qualifying taxpayer shall assign the tax credit to the financing entity by
356     executing an election statement described in Subsection (7)(c) at the time of the purchase or
357     lease of a new qualifying long-range electric vehicle, a new qualifying short-range electric
358     vehicle, or a new qualifying electric motorcycle ;
359          (iii) the qualifying taxpayer shall title and register the vehicle in the state as required by
360     Title 41, Chapter 1a, Part 5, Titling Requirement, and Title 41, Chapter 1a, Part 2, Registration;
361     and
362          (iv) the financing entity shall compensate the qualifying taxpayer the applicable
363     amount of the tax credit described in Subsection (2), (3), (4), (5), or (6) for the type of vehicle
364     purchased or leased, except that the financing entity may collect an administrative fee equal to
365     or less than $150.
366          (c) The board shall develop a model election statement on or before July 1, 2017.
367          (8) (a) A qualifying taxpayer may claim the tax credit under this section only:
368          (i) against a tax owed under this chapter or Chapter 8, Gross Receipts Tax on Certain
369     Corporations Not Required to Pay Corporate Franchise or Income Tax Act, in the taxable year;
370     and
371          (ii) for the taxable year in which a qualifying taxpayer purchases or leases a new
372     qualifying long-range electric vehicle, a new qualifying short-range electric vehicle, or a new
373     qualifying electric motorcycle .
374          (b) A financing entity may claim a tax credit assigned to the financing entity under
375     Subsection (7)(b):
376          (i) against a tax owed under this chapter, Chapter 8, Gross Receipts Tax on Certain
377     Corporations Not Required to Pay Corporate Franchise or Income Tax Act, or Chapter 10,
378     Individual Income Tax Act; and
379          (ii) for the taxable year in which the qualifying taxpayer purchases or leases a new
380     qualifying long-range electric vehicle, a new qualifying short-range electric vehicle, or a new
381     qualifying electric motorcycle .
382          (c) This section only allows one tax credit per vehicle.
383          (9) Before claiming a tax credit under this section, a qualifying taxpayer or a financing
384     entity described in Subsection (7)(b) shall obtain the written certification described in
385     Subsection (10).
386          (10) (a) The director shall:
387          (i) verify that only one written certification is issued per vehicle;
388          (ii) determine the amount of tax credit a qualifying taxpayer or a financing entity
389     described in Subsection (7)(b) is allowed under this section; and
390          (iii) provide the qualifying taxpayer or the financing entity described in Subsection
391     (7)(b) with a written certification of the amount of tax credit allowed under this section.
392          (b) (i) A qualifying taxpayer shall provide proof of the purchase or lease of a vehicle
393     that qualifies for a tax credit under this section by:
394          (A) providing proof to the director in the form established by the board;
395          (B) obtaining a written statement from the director acknowledging receipt of the proof;
396     and
397          (C) retaining the written statement described in Subsection (10)(b)(i)(B) for the same
398     time period a person is required to keep books and records under Section 59-1-1406.
399          (ii) A financing entity shall provide proof of assignment of a tax credit for a vehicle
400     that qualifies for a tax credit under this section by:
401          (A) providing a copy of the election statement to the director;
402          (B) providing proof, in the form established by the board, of the qualifying taxpayer's
403     purchase or lease of a vehicle that qualifies for a tax credit under this section;
404          (C) obtaining a written statement from the director acknowledging receipt of the
405     election statement; and
406          (D) retaining the written statement described in Subsection (10)(b)(ii)(C) for the same
407     time period a person is required to keep books and records under Section 59-1-1406.
408          (c) A qualifying taxpayer or a financing entity described in Subsection (7)(b) shall
409     retain the written certification described in Subsection (10)(a)(iii).
410          [(6)] (11) (a) If the amount of a tax credit claimed by a taxpayer under this section
411     exceeds the qualifying taxpayer's tax liability under this chapter or Chapter 8, Gross Receipts
412     Tax on Certain Corporations Not Required to Pay Corporate Franchise or Income Tax Act, for
413     a taxable year, a qualifying taxpayer may carry forward the amount of the tax credit exceeding
414     the tax liability [may be carried forward] for a period that does not exceed the next five taxable
415     years.
416          (b) If the amount of a tax credit claimed by a financing entity under this section
417     exceeds the financing entity's tax liability under this chapter, Chapter 8, Gross Receipts Tax on
418     Certain Corporations Not Required to Pay Corporate Franchise or Income Tax Act, or Chapter
419     10, Individual Income Tax Act, for a taxable year, the financing entity may carry forward the
420     amount of the tax credit exceeding the liability for a period that does not exceed the next five
421     taxable years.
422          [(7)] (12) In accordance with any rules prescribed by the commission under Subsection
423     [(8)] (13), the Division of Finance shall transfer at least annually from the General Fund into
424     the Education Fund the amount by which the amount of tax credit claimed under this section
425     for a fiscal year exceeds [$500,000] $125,000.
426          [(8)] (13) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
427     Act, the commission may make rules for making a transfer from the General Fund into the
428     Education Fund as required by Subsection [(7)] (12).
429          (14) (a) On or before November 30, the committee shall study the tax credit described
430     in this section and make recommendations concerning whether the tax credit should be
431     continued, modified, or repealed.
432          (b) In conducting the review required under Subsection (14)(a), the committee shall:
433          (i) schedule time on at least one committee agenda to conduct the review;
434          (ii) invite state agencies, individuals, and organizations concerned with the tax credit
435     under review to provide testimony;
436          (iii) ensure that the committee's recommendations described in this section include an
437     evaluation of:
438          (A) the cost of the tax credit to the state;
439          (B) the purpose and effectiveness of the tax credit; and
440          (C) the extent to which the state benefits from the tax credit; and
441          (iv) undertake other review efforts as determined by the committee chairs or as
442     otherwise required by law.
443          (c) If the committee conducts a review in accordance with Section 59-7-159, the
444     committee need not conduct the review required by this Subsection (14).
445          Section 3. Section 59-10-1009 is amended to read:
446          59-10-1009. Definitions -- Tax credits related to energy efficient vehicles.
447          (1) As used in this section:
448          (a) "Air quality standards" means that a vehicle's emissions are equal to or cleaner than
449     the standards established in bin 4 in Table S04-1, of 40 C.F.R. 86.1811-04(c)(6).
450          (b) "Board" means the Air Quality Board created in Title 19, Chapter 2, Air
451     Conservation Act.
452          (c) "Committee" means the Revenue and Taxation Interim Committee.
453          (d) "Director" means the director of the Division of Air Quality appointed under
454     Section 19-2-107.
455          (e) "Election statement" means a document that:
456          (i) is executed by:
457          (A) a qualifying claimant, estate, or trust; and
458          (B) the financing entity, the financing entity's agent, or the financing entity's designee;
459          (ii) identifies the vehicle identification number of the vehicle that qualifies for a tax
460     credit under this section; and
461          (iii) affirms that the requirements described in Subsection (7) have been met.
462          (f) "Financing entity" means the entity that finances the purchase or lease of a vehicle
463     that qualifies for a tax credit under this section.
464          [(c)] (g) "OEM vehicle" means the same as that term is defined in Section 19-1-402.
465          [(d)] (h) "Original purchase" means the purchase of a vehicle that has never been titled
466     or registered and has been driven less than 7,500 miles.
467          (i) "Qualifying claimant, estate, or trust" means a claimant, estate, or trust that:
468          (i) for a claimant, lives or lived, at the time of the purchase or lease of a vehicle
469     described in Subsection (2), in a part of the state where air quality is determined to exceed the
470     National Ambient Air Quality Standards, as defined in the Clean Air Amendments of 1970,
471     Pub. L. No. 91-604, Sec. 109, for fine particulate matter (PM 2.5);
472          (ii) for an estate, had a decedent that lived, at the time of the purchase or lease of a
473     vehicle described in Subsection (2), in a part of the state where air quality is determined to
474     exceed the National Ambient Air Quality Standards, as defined in the Clean Air Amendments
475     of 1970, Pub. L. No. 91-604, Sec. 109, for fine particulate matter (PM 2.5); or
476          (iii) for a trust, had a trustee that lives or lived, at the time of the purchase or lease of a
477     vehicle described in Subsection (2), in a part of the state where air quality is determined to
478     exceed the National Ambient Air Quality Standards, as defined in the Clean Air Amendments
479     of 1970, Pub. L. No. 91-604, Sec. 109, for fine particulate matter (PM 2.5).
480          [(e)] (j) "Qualifying electric motorcycle" means a vehicle that:
481          (i) has a seat or saddle for the use of the rider;
482          (ii) is designed to travel with not more than three wheels in contact with the ground;
483          (iii) may lawfully be operated on a freeway, as defined in Section 41-6a-102;
484          [(iv) is not fueled by natural gas;]
485          [(v)] (iv) is fueled by electricity only; and
486          [(vi)] (v) is an OEM vehicle except that the vehicle is fueled by a fuel described in
487     Subsection (1)[(e)(v)](j)(iv).
488          [(f)] (k) "Qualifying long-range electric vehicle" means a vehicle that:
489          (i) meets air quality standards;
490          [(ii) is not fueled by natural gas;]
491          [(iii) draws propulsion energy from]
492          (ii) has a battery [with] capacity of at least 10 kilowatt hours [of capacity; and];
493          (iii) is fueled by electricity only or a combination of electricity and:
494          (A) diesel fuel;
495          (B) gasoline; or
496          (C) a mixture of gasoline and ethanol; and
497          (iv) is an OEM vehicle except that the vehicle is fueled [by a fuel] as described in
498     Subsection (1)[(f)](k)(iii).
499          [(g)] (l) "Qualifying [plug-in hybrid] short-range electric vehicle" means a vehicle that:
500          (i) meets air quality standards;
501          [(ii) is not fueled by natural gas or propane;]
502          [(iii)] (ii) has a battery capacity that meets or exceeds the battery capacity described in
503     Section 30D(b)(3), Internal Revenue Code, but has less than 10 kilowatt hours of battery
504     capacity ; [and]
505          [(iv)] (iii) is fueled by electricity only or a combination of electricity and:
506          (A) diesel fuel;
507          (B) gasoline; or
508          (C) a mixture of gasoline and ethanol[.]; and
509          (iv) is an OEM vehicle except that the vehicle is fueled as described in Subsection
510     (1)(l)(iii).
511          (2) For a taxable year beginning on or after January 1, [2015, but beginning] 2017, and
512     ending on or before December 31, [2016] 2017, a qualifying claimant, estate, or trust may
513     claim a nonrefundable tax credit against tax otherwise due under this chapter in an amount
514     equal to:
515          (a) [(i)] for the original purchase of a new qualifying long-range electric vehicle that is
516     registered in this state, [the lesser of: (A)] $1,500; [or]
517          [(B) 35% of the purchase price of the vehicle; or]
518          [(ii)] (b) for the original purchase of a new qualifying [plug-in hybrid] short-range
519     electric vehicle that is registered in this state, $1,000;
520          [(b) for the original purchase of a new vehicle fueled by natural gas or propane that is
521     registered in this state, the lesser of: (i) $1,500; or]
522          [(ii) 35% of the purchase price of the vehicle;]
523          (c) for the original purchase of a new qualifying electric motorcycle that is registered in
524     this state, [the lesser of: (i)] $750; [or] and
525          [(ii) 35% of the purchase price of the vehicle; and]
526          (d) for a lease of a vehicle described in Subsection (2)(a), (b), or (c), an amount equal
527     to the product of:
528          (i) the amount of tax credit the qualifying claimant, estate, or trust would otherwise
529     qualify to claim under Subsection (2)(a), (b), or (c) had the qualifying claimant, estate, or trust
530     purchased the vehicle[, except that the purchase price described in Subsection (2)(a)(i)(B),
531     (2)(b)(ii), or (2)(c)(ii) is considered to be the value of the vehicle at the beginning of the lease];
532     and
533          (ii) a percentage calculated by:
534          (A) determining the difference between the value of the vehicle at the beginning of the
535     lease, as stated in the lease agreement, and the value of the vehicle at the end of the lease, as
536     stated in the lease agreement; and
537          (B) dividing the difference determined under Subsection (2)(d)(ii)(A) by the value of
538     the vehicle at the beginning of the lease, as stated in the lease agreement.
539          [(3) (a) The board shall:]
540          [(i) determine the amount of tax credit a claimant, estate, or trust is allowed under this
541     section; and]
542          [(ii) provide the claimant, estate, or trust with a written certification of the amount of
543     tax credit the claimant, estate, or trust is allowed under this section.]
544          [(b) A claimant, estate, or trust shall provide proof of the purchase or lease of an item
545     for which a tax credit is allowed under this section by:]
546          [(i) providing proof to the board in the form the board requires by rule;]
547          [(ii) receiving a written statement from the board acknowledging receipt of the proof;
548     and]
549          [(iii) retaining the written statement described in Subsection (3)(b)(ii).]
550          [(c) A claimant, estate, or trust shall retain the written certification described in
551     Subsection (3)(a)(ii).]
552          [(4) Except as provided by Subsection (5), the tax credit under this section is allowed
553     only:]
554          [(a) against a tax owed under this chapter in the taxable year by the claimant, estate, or
555     trust;]
556          [(b) for the taxable year in which a vehicle described in Subsection (2)(a), (b), or (c) is
557     purchased or a vehicle described in Subsection (2)(d) is leased; and]
558          [(c) once per vehicle.]
559          [(5) A claimant, estate, or trust may not assign a tax credit under this section to another
560     person.]
561          (3) For a taxable year beginning on or after January 1, 2018, and ending on or before
562     December 31, 2018, a qualifying claimant, estate, or trust may claim a nonrefundable tax credit
563     against tax otherwise due under this chapter or Chapter 8, Gross Receipts Tax on Certain
564     Corporations Not Required to Pay Corporate Franchise or Income Tax Act, in an amount equal
565     to:
566          (a) for the original purchase of a new qualifying long-range electric vehicle that is
567     registered in this state, $1,500;
568          (b) for the original purchase of a new qualifying short-range electric vehicle that is
569     registered in this state, $1,000;
570          (c) for the original purchase of a new qualifying electric motorcycle that is registered in
571     this state, $750; and
572          (d) for a lease of a vehicle described in Subsection (3)(a), (b), or (c), an amount equal
573     to the product of:
574          (i) the amount of tax credit the qualifying claimant, estate, or trust would otherwise
575     qualify to claim under Subsection (3)(a), (b), or (c) had the qualifying claimant, estate, or trust
576     purchased the vehicle; and
577          (ii) a percentage calculated by:
578          (A) determining the difference between the value of the vehicle at the beginning of the
579     lease, as stated in the lease agreement, and the value of the vehicle at the end of the lease, as
580     stated in the lease agreement; and
581          (B) dividing the difference determined under Subsection (3)(d)(ii)(A) by the value of
582     the vehicle at the beginning of the lease, as stated in the lease agreement.
583          (4) For a taxable year beginning on or after January 1, 2019, and ending on or before
584     December 31, 2019, a qualifying claimant, estate, or trust may claim a nonrefundable tax credit
585     against tax otherwise due under this chapter or Chapter 8, Gross Receipts Tax on Certain
586     Corporations Not Required to Pay Corporate Franchise or Income Tax Act, in an amount equal
587     to:
588          (a) for the original purchase of a new qualifying long-range electric vehicle that is
589     registered in this state, $1,000;
590          (b) for the original purchase of a new qualifying short-range electric vehicle that is
591     registered in this state, $750;
592          (c) for the original purchase of a new qualifying electric motorcycle that is registered in
593     this state, $550; and
594          (d) for a lease of a vehicle described in Subsection (4)(a), (b), or (c), an amount equal
595     to the product of:
596          (i) the amount of tax credit the qualifying claimant, estate, or trust would otherwise
597     qualify to claim under Subsection (4)(a), (b), or (c) had the qualifying claimant, estate, or trust
598     purchased the vehicle; and
599          (ii) a percentage calculated by:
600          (A) determining the difference between the value of the vehicle at the beginning of the
601     lease, as stated in the lease agreement, and the value of the vehicle at the end of the lease, as
602     stated in the lease agreement; and
603          (B) dividing the difference determined under Subsection (4)(d)(ii)(A) by the value of
604     the vehicle at the beginning of the lease, as stated in the lease agreement.
605          (5) For a taxable year beginning on or after January 1, 2020, and ending on or before
606     December 31, 2020, a qualifying claimant, estate, or trust may claim a nonrefundable tax credit
607     against tax otherwise due under this chapter or Chapter 8, Gross Receipts Tax on Certain
608     Corporations Not Required to Pay Corporate Franchise or Income Tax Act, in an amount equal
609     to:
610          (a) for the original purchase of a new qualifying long-range electric vehicle that is
611     registered in this state, $750;
612          (b) for the original purchase of a new qualifying short-range electric vehicle that is
613     registered in this state, $500;
614          (c) for the original purchase of a new qualifying electric motorcycle that is registered in
615     this state, $375; and
616          (d) for a lease of a vehicle described in Subsection (5)(a), (b), or (c), an amount equal
617     to the product of:
618          (i) the amount of tax credit the qualifying claimant, estate, or trust would otherwise
619     qualify to claim under Subsection (5)(a), (b), or (c) had the qualifying claimant, estate, or trust
620     purchased the vehicle; and
621          (ii) a percentage calculated by:
622          (A) determining the difference between the value of the vehicle at the beginning of the
623     lease, as stated in the lease agreement, and the value of the vehicle at the end of the lease, as
624     stated in the lease agreement; and
625          (B) dividing the difference determined under Subsection (5)(d)(ii)(A) by the value of
626     the vehicle at the beginning of the lease, as stated in the lease agreement.
627          (6) For a taxable year beginning on or after January 1, 2021, and ending on or before
628     December 31, 2021, a qualifying claimant, estate, or trust may claim a nonrefundable tax credit
629     against tax otherwise due under this chapter or Chapter 8, Gross Receipts Tax on Certain
630     Corporations Not Required to Pay Corporate Franchise or Income Tax Act, in an amount equal
631     to:
632          (a) for the original purchase of a new qualifying long-range electric vehicle that is
633     registered in this state, $350;
634          (b) for the original purchase of a new qualifying short-range electric vehicle that is
635     registered in this state, $150;
636          (c) for the original purchase of a new qualifying electric motorcycle that is registered in
637     this state, $100; and
638          (d) for a lease of a vehicle described in Subsection (6)(a), (b), or (c), an amount equal
639     to the product of:
640          (i) the amount of tax credit the qualifying claimant, estate, or trust would otherwise
641     qualify to claim under Subsection (6)(a), (b), or (c) had the qualifying claimant, estate, or trust
642     purchased the vehicle; and
643          (ii) a percentage calculated by:
644          (A) determining the difference between the value of the vehicle at the beginning of the
645     lease, as stated in the lease agreement, and the value of the vehicle at the end of the lease, as
646     stated in the lease agreement; and
647          (B) dividing the difference determined under Subsection (6)(d)(ii)(A) by the value of
648     the vehicle at the beginning of the lease, as stated in the lease agreement.
649          (7) (a) Except as provided in Subsection (7)(b), a qualifying claimant, estate, or trust
650     may not assign a tax credit under this section to another person.
651          (b) A qualifying claimant, estate, or trust may assign a tax credit under this section to a
652     financing entity as follows:
653          (i) in exchange for the consideration described in Subsection (7)(b)(iv), the qualifying
654     claimant, estate, or trust shall assign the tax credit to the financing entity and forfeit the right to
655     claim the tax credit on the qualifying claimant's, estate's, or trust's income tax return;
656          (ii) the qualifying claimant, estate, or trust shall assign the tax credit to the financing
657     entity by executing an election statement described in Subsection (7)(c) at the time of the
658     purchase or lease of a new qualifying long-range electric vehicle, a new qualifying short-range
659     electric vehicle, or a new qualifying electric motorcycle ;
660          (iii) the qualifying claimant, estate, or trust shall title and register the vehicle in the
661     state as required by Title 41, Chapter 1a, Part 5, Titling Requirement, and Title 41, Chapter 1a,
662     Part 2, Registration; and
663          (iv) the financing entity shall compensate the qualifying claimant, estate, or trust the
664     applicable amount of the tax credit described in Subsection (2), (3), (4), (5), or (6) for the type
665     of vehicle purchased or leased, except that the financing entity may collect an administrative
666     fee equal to or less than $150.
667          (c) The board shall develop a model election statement on or before July 1, 2017.
668          (8) (a) A qualifying claimant, estate, or trust may claim the tax credit under this section
669     only:
670          (i) against a tax owed under this chapter; and
671          (ii) for the taxable year in which a qualifying claimant, estate, or trust purchases or
672     leases a new qualifying long-range electric vehicle, a new qualifying short-range electric
673     vehicle, or a new qualifying electric motorcycle .
674          (b) A financing entity may claim a tax credit assigned to the financing entity under
675     Subsection (7)(b):
676          (i) against a tax owed under this chapter, Chapter 7, Corporate Franchise and Income
677     Taxes, or Chapter 8, Gross Receipts Tax on Certain Corporations Not Required to Pay
678     Corporate Franchise or Income Tax Act; and
679          (ii) for the taxable year in which the qualifying claimant, estate, or trust purchases or
680     leases a new qualifying long-range electric vehicle, a new qualifying short-range electric
681     vehicle, or a new qualifying electric motorcycle .
682          (c) This section only allows one tax credit per vehicle.
683          (9) Before claiming a tax credit under this section, a qualifying claimant, estate, or trust
684     or the financing entity described in Subsection (7)(b) shall obtain the written certification
685     described in Subsection (10).
686          (10) (a) The director shall:
687          (i) verify that only one written certification is issued per vehicle;
688          (ii) determine the amount of tax credit a qualifying claimant, estate, or trust or a
689     financing entity described in Subsection (7)(b) is allowed under this section; and
690          (iii) provide the qualifying claimant, estate, or trust or financing entity described in
691     Subsection (7)(b) with a written certification of the amount of tax credit allowed under this
692     section.
693          (b) (i) A qualifying claimant, estate, or trust shall provide proof of the purchase or lease
694     of a vehicle that qualifies for a tax credit under this section by:
695          (A) providing proof to the director in the form established by the board;
696          (B) obtaining a written statement from the director acknowledging receipt of the proof;
697     and
698          (C) retaining the written statement described in Subsection (10)(b)(i)(B) for the same
699     time period a person is required to keep books and records under Section 59-1-1406.
700          (ii) A financing entity shall provide proof of assignment of a tax credit for a vehicle
701     that qualifies for a tax credit under this section by:
702          (A) providing a copy of the election statement to the director;
703          (B) providing proof, in the form established by the board, of the qualifying claimant's,
704     estate's, or trust's purchase or lease of a vehicle that qualifies for a tax credit under this section;
705          (C) obtaining a written statement from the director acknowledging receipt of the
706     election statement; and
707          (D) retaining the written statement described in Subsection (10)(b)(ii)(C) for the same
708     time period a person is required to keep books and records under Section 59-1-1406.
709          (c) A qualifying claimant, estate, or trust or a financing entity described in Subsection
710     (7)(b) shall retain the written certification described in Subsection (10)(a)(iii).
711          [(6)] (11) (a) If the amount of a tax credit claimed by a qualifying claimant, estate, or
712     trust under this section exceeds the qualifying claimant's, estate's, or trust's tax liability under
713     this chapter for a taxable year, the qualifying claimant, estate, or trust may carry forward the
714     amount of the tax credit exceeding the tax liability [may be carried forward] for a period that
715     does not exceed the next five taxable years.
716          (b) If the amount of a tax credit claimed by a financing entity under this section
717     exceeds the financing entity's tax liability under this chapter, Chapter 7, Corporate Franchise
718     and Income Taxes, or Chapter 8, Gross Receipts Tax on Certain Corporations Not Required to
719     Pay Corporate Franchise or Income Tax Act, for a taxable year, the financing entity may carry
720     forward the amount of the tax credit exceeding the tax liability for a period that does not
721     exceed the next five taxable years.
722          [(7)] (12) In accordance with any rules prescribed by the commission under Subsection
723     [(8)] (13), the Division of Finance shall transfer at least annually from the General Fund into
724     the Education Fund the amount by which the amount of tax credit claimed under this section
725     for a fiscal year exceeds [$500,000] $125,000.
726          [(8)] (13) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
727     Act, the commission may make rules for making a transfer from the General Fund into the
728     Education Fund as required by Subsection [(7)] (12).
729          (14) (a) On or before November 30, the committee shall study the tax credit described
730     in this section and make recommendations concerning whether the tax credit should be
731     continued, modified, or repealed.
732          (b) In conducting the review required under Subsection (14)(a), the committee shall:
733          (i) schedule time on at least one committee agenda to conduct the review;
734          (ii) invite state agencies, individuals, and organizations concerned with the tax credit
735     under review to provide testimony;
736          (iii) ensure that the committee's recommendations described in this section include an
737     evaluation of:
738          (A) the cost of the tax credit to the state;
739          (B) the purpose and effectiveness of the tax credit; and
740          (C) the extent to which the state benefits from the tax credit; and
741          (iv) undertake other review efforts as determined by the committee chairs or as
742     otherwise required by law.
743          (c) If the committee conducts a review in accordance with Section 59-10-137, the
744     committee need not conduct the review required by this Subsection (14).
745          Section 4. Retrospective operation.
746          This bill has retrospective operation for a taxable year beginning on or after January 1,
747     2017.