Senator David P. Hinkins proposes the following substitute bill:


1     
HEAVY DUTY TAX CREDIT AMENDMENTS

2     
2017 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Daniel Hemmert

5     
House Sponsor: Jon E. Stanard

6     

7     LONG TITLE
8     General Description:
9          This bill amends the corporate and individual heavy duty vehicle tax credits.
10     Highlighted Provisions:
11          This bill:
12          ▸     clarifies that the corporate tax credit is nonrefundable;
13          ▸     amends definitions;
14          ▸     removes references to qualified conversions;
15          ▸      modifies the definition of a "qualified heavy duty vehicle" to include heavy duty
16     vehicles that have hydrogen-electric and electric drivetrains for purposes of
17     receiving a corporate or individual income tax credit; and
18          ▸     makes technical and conforming changes.
19     Money Appropriated in this Bill:
20          None
21     Other Special Clauses:
22          This bill provides retrospective operation.
23     Utah Code Sections Affected:
24     AMENDS:
25          59-7-618, as last amended by Laws of Utah 2016, Chapter 375

26          59-10-1033, as last amended by Laws of Utah 2016, Chapter 375
27     

28     Be it enacted by the Legislature of the state of Utah:
29          Section 1. Section 59-7-618 is amended to read:
30          59-7-618. Tax credit related to alternative fuel heavy duty vehicles.
31          (1) As used in this section:
32          (a) "Board" means the Air Quality Board created under Title 19, Chapter 2, Air
33     Conservation Act.
34          (b) "Director" means the director of the Division of Air Quality appointed under
35     Section 19-2-107.
36          [(b)] (c) "Heavy duty vehicle" means a commercial category 7 or 8 vehicle, according
37     to vehicle classifications established by the Federal Highway Administration.
38          [(c)] (d) "Natural gas" includes compressed natural gas and liquified natural gas.
39          [(d)] (e) "Qualified heavy duty vehicle" means a heavy duty vehicle that:
40          (i) has never been titled or registered and has been driven less than 7,500 miles; and
41          (ii) is fueled by natural gas , has a 100% electric drivetrain, or has a hydrogen-electric
42     drivetrain .
43          [(e)] (f) "Qualified purchase" means the purchase of a qualified heavy duty vehicle.
44          [(f)] (g) "Qualified taxpayer" means a taxpayer [who] that:
45          (i) purchases a qualified heavy duty vehicle; and
46          (ii) receives a tax credit certificate from the [board] director.
47          [(g)] (h) "Small fleet" means 40 or fewer heavy duty vehicles registered in the state and
48     owned by a single taxpayer.
49          [(h)] (i) "Tax credit certificate" means a certificate issued by the [board] director
50     certifying that a taxpayer is entitled to a tax credit as provided in this section and stating the
51     amount of the tax credit.
52          (2) [For a taxable year beginning on or after January 1, 2015, a] A qualified taxpayer
53     may claim a nonrefundable tax credit against tax otherwise due under this chapter or Chapter 8,
54     Gross Receipts Tax on Certain Corporations Not Required to Pay Corporate Franchise or
55     Income Tax Act:
56          (a) in an amount equal to:

57          [(i) $25,000, if the qualified purchase occurs during calendar year 2015, calendar year
58     2016, or calendar year 2017;]
59          (i) $25,000, if the qualified purchase of a natural gas heavy duty vehicle occurs during
60     calendar year 2015 or calendar year 2016;
61          (ii) $25,000, if the qualified purchase occurs during calendar year 2017;
62          [(ii)] (iii) $20,000, if the qualified purchase occurs during calendar year 2018;
63          [(iii)] (iv) $18,000, if the qualified purchase occurs during calendar year 2019; and
64          [(iv)] (v) $15,000, if the qualified purchase occurs during calendar year 2020; and
65          (b) if the qualified taxpayer certifies under oath that over 50% of the miles that the
66     heavy duty vehicle that is the subject of the qualified purchase will travel annually will be
67     within the state.
68          (3) (a) Except as provided in Subsection (3)(b), a taxpayer may not submit an
69     application for, and the [board] director may not issue to the taxpayer, a tax credit certificate
70     under this section in any taxable year for a [qualifying] qualified purchase if the [board]
71     director has already issued tax credit certificates to the taxpayer for 10 [qualifying] qualified
72     purchases in the same taxable year.
73          (b) If, by May 1 of any year, more than 30% of the aggregate annual total amount of
74     tax credits under Subsection (5) has not been claimed, a taxpayer may submit an application
75     for, and the [board] director may issue to the taxpayer, one or more tax credit certificates for up
76     to eight additional [qualifying] qualified purchases, even if the [board] director has already
77     issued to that taxpayer tax credit certificates for the maximum number of [qualifying] qualified
78     purchases allowed under Subsection (3)(a).
79          (4) (a) Subject to Subsection (4)(b), the [board] director shall reserve 25% of all tax
80     credits available under this section for qualified taxpayers with a small fleet.
81          (b) Subsection (4)(a) does not prevent a taxpayer from submitting an application for, or
82     the [board] director from issuing, a tax credit certificate if [the], before October 1, qualified
83     taxpayers with a small fleet have not reserved under Subsection (5)(b) tax credits for the full
84     amount reserved under Subsection (4)(a) [for taxpayers with a small fleet has not been claimed
85     by a date that is 90 days before the end of the year].
86          (5) (a) The aggregate annual total amount of tax credits represented by tax credit
87     certificates that the [board] director issues under this section[, when combined with the

88     aggregate annual total amount of tax credits represented by tax credit certificates that the board
89     issues under] and Section 59-10-1033[,] may not exceed $500,000.
90          (b) The board shall, in accordance with Title 63G, Chapter 3, Utah Administrative
91     Rulemaking Act, make rules to establish a process [whereby] under which a taxpayer may
92     reserve a potential tax credit under this section for a limited time to allow the taxpayer to make
93     a [qualifying] qualified purchase with the assurance that the aggregate limit under Subsection
94     (5)(a) will not be met before the taxpayer is able to submit an application for a tax credit
95     certificate.
96          (6) (a) (i) A taxpayer wishing to claim a tax credit under this section shall, using forms
97     the board requires by rule:
98          (A) submit to the [board] director an application for a tax credit;
99          (B) provide the [board] director proof of a [qualifying] qualified purchase; and
100          (C) submit to the [board] director the certification under oath required under
101     Subsection (2)(b).
102          (ii) Upon receiving the application, proof, and certification required under Subsection
103     (6)(a)(i), the [board] director shall provide the taxpayer a written statement from the [board]
104     director acknowledging receipt of the proof.
105          (b) If the [board] director determines that a taxpayer qualifies for a tax credit under this
106     section, the [board] director shall:
107          (i) determine the amount of tax credit the taxpayer is allowed under this section; and
108          (ii) provide the [qualifying] taxpayer with a written tax credit certificate:
109          (A) stating that the taxpayer has qualified for a tax credit; and
110          (B) showing the amount of tax credit for which the taxpayer has qualified under this
111     section.
112          (c) A qualified taxpayer shall retain the tax credit certificate.
113          (d) The [board] director shall at least annually submit to the commission a list of all
114     qualified taxpayers to [whom the board] which the director has issued a tax credit certificate
115     and the amount of each tax credit represented by the tax credit certificates.
116          (7) The tax credit under this section is allowed only:
117          (a) against a tax owed under this chapter or Chapter 8, Gross Receipts Tax on Certain
118     Corporations Not Required to Pay Corporate Franchise or Income Tax Act, in the taxable year

119     by the qualified taxpayer;
120          (b) for the taxable year in which the [qualifying] qualified purchase occurs; and
121          (c) once per vehicle.
122          (8) A [qualifying] qualified taxpayer may not assign a tax credit or a tax credit
123     certificate under this section to another person.
124          (9) If the [amount of] qualified taxpayer receives a tax credit [claimed by a qualifying
125     taxpayer] certificate under this section that allows a tax credit in an amount that exceeds the
126     [qualifying] qualified taxpayer's tax liability under this chapter or Chapter 8, Gross Receipts
127     Tax on Certain Corporations Not Required to Pay Corporate Franchise or Income Tax Act, for
128     a taxable year, the qualified taxpayer may carry forward the amount of the tax credit
129     [exceeding] that exceeds the tax liability [may be carried forward] for a period that does not
130     exceed the next five taxable years.
131          (10) (a) In accordance with any rules prescribed by the commission under Subsection
132     (10)(b), the Division of Finance shall transfer at least annually from the General Fund into the
133     Education Fund the aggregate amount of all tax credits claimed under this section.
134          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
135     commission may make rules for making a transfer from the General Fund into the Education
136     Fund as required by Subsection (10)(a).
137          Section 2. Section 59-10-1033 is amended to read:
138          59-10-1033. Tax credit related to alternative fuel heavy duty vehicles.
139          (1) As used in this section:
140          (a) "Board" means the Air Quality Board created under Title 19, Chapter 2, Air
141     Conservation Act.
142          (b) "Director" means the director of the Division of Air Quality appointed under
143     Section 19-2-107.
144          [(b)] (c) "Heavy duty vehicle" means a commercial category 7 or 8 vehicle, according
145     to vehicle classifications established by the Federal Highway Administration.
146          [(c)] (d) "Natural gas" includes compressed natural gas and liquified natural gas.
147          [(d)] (e) "Qualified heavy duty vehicle" means a heavy duty vehicle that:
148          (i) has never been titled or registered and has been driven less than 7,500 miles; and
149          (ii) is fueled by natural gas[; and] , has a 100% electric drivetrain, or has a

150     hydrogen-electric drivetrain.
151          [(iii) meets air quality standards.]
152          [(e)] (f) "Qualified purchase" means the purchase of a qualified heavy duty vehicle.
153          [(f)] (g) "Qualified taxpayer" means a claimant, estate, or trust that:
154          (i) purchases a qualified heavy duty vehicle; and
155          (ii) receives a tax credit certificate from the [board] director.
156          [(g)] (h) "Small fleet" means 40 or fewer heavy duty vehicles registered in the state and
157     owned by a single claimant, estate, or trust.
158          [(h)] (i) "Tax credit certificate" means a certificate issued by the [board] director
159     certifying that a claimant, estate, or trust is entitled to a tax credit as provided in this section
160     and stating the amount of the tax credit.
161          (2) [For a taxable year beginning on or after January 1, 2015, a] A qualified taxpayer
162     may claim a nonrefundable tax credit against tax otherwise due under this chapter:
163          (a) in an amount equal to:
164          [(i) $25,000, if the qualified purchase occurs during calendar year 2015, calendar year
165     2016, or calendar year 2017;]
166          (i) $25,000, if the qualified purchase of a natural gas heavy duty vehicle occurs during
167     calendar year 2015 or calendar year 2016;
168          (ii) $25,000, if the qualified purchase occurs during calendar year 2017;
169          [(ii)] (iii) $20,000, if the qualified purchase occurs during calendar year 2018;
170          [(iii)] (iv) $18,000, if the qualified purchase occurs during calendar year 2019; and
171          [(iv)] (v) $15,000, if the qualified purchase occurs during calendar year 2020; and
172          (b) if the [claimant, estate, or trust] qualified taxpayer certifies under oath that over
173     50% of the miles that the heavy duty vehicle that is the subject of the qualified purchase [or
174     qualified conversion] will travel annually will be within the state.
175          (3) (a) Except as provided in Subsection (3)(b), a claimant, estate, or trust may not
176     submit an application for, and the [board] director may not issue to the claimant, estate, or
177     trust, a tax credit certificate under this section in any taxable year for a [qualifying] qualified
178     purchase if the [board] director has already issued tax credit certificates to the claimant, estate,
179     or trust for 10 [tax credits for qualifying] qualified purchases in the same taxable year.
180          (b) If, by May 1 of any year, more than 30% of the aggregate annual total amount of

181     tax credits under Subsection (5) has not been claimed, a claimant, estate, or trust may submit
182     an application for, and the [board] director may issue to the claimant, estate, or trust, one or
183     more tax credit certificates for up to eight additional [qualifying] qualified purchases, even if
184     the [board] director has already issued to that claimant, estate, or trust tax credit certificates for
185     the maximum number of [qualifying] qualified purchases allowed under Subsection (3)(a).
186          (4) (a) Subject to Subsection (4)(b), the [board] director shall reserve 25% of all tax
187     credits available under this section for [claimants, estates, or trusts] qualified taxpayers with a
188     small fleet.
189          (b) Subsection (4)(a) does not prevent a claimant, estate, or trust from submitting an
190     application for, or the [board] director from issuing, a tax credit certificate if [the], before
191     October 1, qualified taxpayers with a small fleet have not reserved under Subsection (5)(b) tax
192     credits for the full amount reserved under Subsection (4)(a) [for claimants, estates, or trusts
193     with a small fleet has not been claimed by a date that is 90 days before the end of the year].
194          (5) (a) The aggregate annual total amount of tax credits represented by tax credit
195     certificates that the [board] director issues under this section[, when combined with the
196     aggregate annual total amount of tax credits represented by tax credit certificates that the board
197     issues under] and Section 59-7-618[,] may not exceed $500,000.
198          (b) The board shall, in accordance with Title 63G, Chapter 3, Utah Administrative
199     Rulemaking Act, make rules to establish a process [whereby a taxpayer] under which a
200     claimant, estate, or trust may reserve a potential tax credit under this section for a limited time
201     to allow the [taxpayer] claimant, estate, or trust to make a [qualifying] qualified purchase with
202     the assurance that the aggregate limit under Subsection (5)(a) will not be met before the
203     [taxpayer] claimant, estate, or trust is able to submit an application for a tax credit certificate.
204          (6) (a) (i) A claimant, estate, or trust wishing to claim a tax credit under this section
205     shall, using forms the board requires by rule:
206          (A) submit to the [board] director an application for a tax credit;
207          (B) provide the [board] director proof of a [qualifying] qualified purchase [or
208     qualifying conversion]; and
209          (C) submit to the [board] director the certification under oath required under
210     Subsection (2)(b).
211          (ii) Upon receiving the application, proof, and certification required under Subsection

212     (6)(a)(i), the [board] director shall provide the claimant, estate, or trust a written statement
213     from the [board] director acknowledging receipt of the proof.
214          (b) If the [board] director determines that a claimant, estate, or trust qualifies for a tax
215     credit under this section, the [board] director shall:
216          (i) determine the amount of tax credit the claimant, estate, or trust is allowed under this
217     section; and
218          (ii) provide the [qualifying taxpayer] claimant, estate, or trust with a written tax credit
219     certificate:
220          (A) stating that the claimant, estate, or trust has qualified for a tax credit; and
221          (B) showing the amount of tax credit for which the claimant, estate, or trust has
222     qualified under this section.
223          (c) A [claimant, estate, or trust] qualified taxpayer shall retain the tax credit certificate.
224          (d) The [board] director shall at least annually submit to the commission a list of all
225     [claimants, estates, and trusts] qualified taxpayers to which the [board] director has issued a tax
226     credit certificate and the amount of each tax credit represented by the tax credit certificates.
227          (7) The tax credit under this section is allowed only:
228          (a) against a tax owed under this chapter in the taxable year by the qualified taxpayer;
229          (b) for the taxable year in which the [qualifying] qualified purchase occurs; and
230          (c) once per vehicle.
231          (8) A [qualifying] qualified taxpayer may not assign a tax credit or a tax credit
232     certificate under this section to another person.
233          (9) If the [amount of] qualified taxpayer receives a tax credit [claimed by a qualifying
234     taxpayer] certificate under this section that allows a tax credit in an amount that exceeds the
235     [qualifying] qualified taxpayer's tax liability under this chapter for a taxable year, the qualified
236     taxpayer may carry forward the amount of the tax credit [exceeding] that exceeds the tax
237     liability [may be carried forward] for a period that does not exceed the next five taxable years.
238          (10) (a) In accordance with any rules prescribed by the commission under Subsection
239     (10)(b), the Division of Finance shall transfer at least annually from the General Fund into the
240     Education Fund the aggregate amount of all tax credits claimed under this section.
241          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
242     commission may make rules for making a transfer from the General Fund into the Education

243     Fund as required by Subsection (10)(a).
244          Section 3. Retrospective operation.
245          This bill has retrospective operation for a taxable year beginning on or after January 1,
246     2017.