S.B. 47

1

TAX INCENTIVES FOR CLEAN FUELS
2 1997 GENERAL SESSION
3 STATE OF UTAH
4 Sponsor: LeRay McAllister
5 AN ACT RELATING TO HEALTH AND ENVIRONMENT; INCREASING TAX
6 INCENTIVES FOR PURCHASE OF OR CONVERSION TO CLEAN-FUELED VEHICLES;
7 PROVIDING TAX INCENTIVES FOR SPECIAL FUEL FILLING STATIONS; AND
8 PROVIDING AN EFFECTIVE DATE.
9 This act affects sections of Utah Code Annotated 1953 as follows:
10 AMENDS:
11 59-7-605, as last amended by Chapter 257, Laws of Utah 1996
12 59-10-127, as last amended by Chapter 257, Laws of Utah 1996
13 Be it enacted by the Legislature of the state of Utah:
14 Section 1. Section 59-7-605 is amended to read:
15 59-7-605. Definitions -- Credit -- Cleaner burning fuels.
16 (1) As used in this section:
17 (a) "Board" means the Air Quality Board created under Title 19, Chapter 2,
18 [Environmental Quality Code] Air Conservation Act.
19 (b) "Certified by the board" means that a motor vehicle on which conversion equipment
20 has been installed meets the following criteria:
21 (i) prior to the installation of conversion equipment, the vehicle does not exceed the
22 emission cut points for transient test driving cycle, as specified in 40 CFR 51, Appendix E to
23 Subpart S, or an equivalent test for the make, model, and year of the vehicle;
24 (ii) the vehicle's emissions of regulated pollutants, when operating on fuels listed in
25 Subsections 59-7-605(2)(b) and 59-10-127(2)(b), is less than prior to installation of conversion
26 equipment; and
27 (iii) reduction in emissions under Subsection (b)(ii) is demonstrated by:

1 (A) certification of the conversion equipment by the federal Environmental Protection
2 Agency or by a state whose certification standards are recognized by the board;
3 (B) the vehicle is tested, before and after installation of the conversion equipment, in
4 accordance with 40 CFR 86, Control of Air Pollution from New and In-use Motor Vehicle
5 Engines: Certification and Test Procedures, using all fuel the vehicle is capable of using; or
6 (C) any other test or standard recognized by board rule.
7 (c) "Conversion equipment" means equipment referred to in Subsection 59-7-605(2)(b)
8 and Subsection 59-7-127(2)(b).
9 (d) "Equipment incentive" means:
10 (i) regarding new vehicles: $3,000 in 1998; $3,500 in 1999; and $4,000 in and after 2000;
11 and
12 (ii) regarding conversion equipment: $2,000 in 1998; $2,200 in 1999; and $2,400 in and
13 after 2000.
14 [(d)] (e) "Special fuel mobile equipment:"
15 (i) means any mobile equipment or vehicle that uses special fuel and is not designed or
16 used primarily for the transportation of persons or property; and
17 (ii) includes construction or maintenance equipment.
18 (2) For tax years beginning January 1, [1997] 1998, and ending December 31, [2001]
19 2002, there is a credit against tax otherwise due under this chapter or Chapter 8, Gross Receipts
20 Tax on Certain Corporations Not Required to Pay Corporate Franchise or Income Tax Act, in an
21 amount equal to:
22 (a) [20%] 50%, up to a maximum of [$500] the equipment incentive per vehicle, of the
23 cost of new motor vehicles being registered in Utah and for the first time that:
24 (i) are fueled by propane, natural gas, or electricity;
25 (ii) are fueled by other fuel the board determines annually on or before July 1 to be at least
26 as effective in reducing air pollution as fuels under Subsection (2)(a)(i) in reducing air pollution;
27 or
28 (iii) meet the clean fuel vehicle standards in the federal Clean Air Act Amendments of
29 1990, Title II;
30 (b) [20%] 50%, up to a maximum of [$400] the equipment incentive, of the cost of
31 equipment for conversion, if certified by the board, of a motor vehicle registered in Utah to:

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1 (i) be fueled by propane, natural gas, or electricity;
2 (ii) be fueled by other fuel the board determines annually on or before July 1 to be at least
3 as effective in reducing air pollution as fuels under Subsection (2)(a)(i); or
4 (iii) meet the federal clean-fuel vehicle standards under Subsection (2)(a)(iii); and
5 (c) [20%] 50%, up to a maximum of [$500] the equipment incentive, of the cost of
6 equipment for conversion, if certified by the board, of a special fuel mobile equipment engine to
7 be fueled by:
8 (i) propane, natural gas, or electricity; or
9 (ii) other fuel the board determines annually on or before July 1 to be:
10 (A) at least as effective in reducing air pollution as the fuels under Subsection (2)(c)(i);
11 or
12 (B) substantially more effective in reducing air pollution than the fuel for which the engine
13 was originally designed.
14 (3) A taxpayer shall provide proof of the purchase of an item for which a credit is allowed
15 under this section by:
16 (a) providing proof to the board in the form it requires by rule;
17 (b) receiving a written statement from the board acknowledging receipt of the proof; and
18 (c) attaching the written statement obtained from the board to the tax return in which the
19 credit is claimed.
20 (4) This credit is allowed only:
21 (a) against any Utah tax owed in the taxable year by the taxpayer; and
22 (b) in the taxable year in which the item is purchased for which the credit is claimed.
23 Section 2. Section 59-10-127 is amended to read:
24 59-10-127. Definition -- Credit -- Cleaner burning fuels.
25 (1) As used in this section:
26 (a) "Board" means the Air Quality Board created in Title 19, Chapter 2, [Environmental
27 Quality Code] Air Conservation Act.
28 (b) "Certified by the board" means that a motor vehicle on which conversion equipment
29 has been installed meets the following criteria:
30 (i) prior to the installation of conversion equipment, the vehicle does not exceed the
31 emission cut points for a transient test driving cycle, as specified in 40 CFR 51, Appendix E to

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1 Subpart S, or an equivalent test for the make, model, and year of the vehicle;
2 (ii) the vehicle's emissions of regulated pollutants, when operating on fuels listed in
3 Subsection 59-7-605(2)(b) and 59-10-127(2)(b), is less than prior to installation of conversion
4 equipment; and
5 (iii) reduction in emissions under Subsection (b)(ii) is demonstrated by:
6 (A) certification of the conversion equipment by the federal Environmental Protection
7 Agency or by a state whose certification standards are recognized by the board;
8 (B) the vehicle is tested, before and after installation of the conversion equipment, in
9 accordance with 40 CFR 86, Control of Air Pollution from New and In-use Motor Vehicle
10 Engines: Certification and Test Procedures, using all fuels the vehicle is capable of using; or
11 (C) any other test or standard recognized by board rule.
12 (c) "Conversion equipment" means equipment referred to in Subsection 59-7-605(2)(b)
13 and Subsection 59-10-127(2)(b).
14 (d) "Equipment incentive" means:
15 (i) regarding new vehicles: $3,000 in 1998; $3,500 in 1999; and $4,000 in and after 2000;
16 and
17 (ii) regarding conversion equipment: $2,000 in 1998; $2,200 in 1999; and $2,400 in and
18 after 2000.
19 [(d)] (e) "Special fuel mobile equipment" means any mobile equipment or vehicle not
20 designed or used primarily for the transportation of persons or property, including construction or
21 maintenance equipment.
22 (2) For tax years beginning January 1, [1997] 1998, and ending December 31, [2001]
23 2002, there is allowed a credit against tax otherwise due under this chapter in an amount equal to:
24 (a) [20%] 50%, up to a maximum of [$500] the equipment incentive per vehicle, of the
25 cost of new motor vehicles being registered in Utah and for the first time that:
26 (i) are fueled by propane, natural gas, or electricity;
27 (ii) are fueled by other fuel the board determines annually on or before July 1 to be at least
28 as effective in reducing air pollution as fuels under Subsection (2)(a)(i); or
29 (iii) meet the clean-fuel vehicle standards in the federal Clean Air Act Amendments of
30 1990, Title II;
31 (b) [20%] 50%, up to a maximum of [$400] the equipment incentive, of the cost of

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1 equipment for conversion, if certified by the board, of a motor vehicle registered in Utah to:
2 (i) be fueled by propane, natural gas, or electricity;
3 (ii) be fueled by other fuel the board determines annually on or before July 1 to be at least
4 as effective in reducing air pollution as fuels under Subsection (2)(a)(i); or
5 (iii) meet the federal clean fuel vehicle standards under Subsection (2)(a)(iii); and
6 (c) [20%] 50%, up to a maximum of [$500] the equipment conversion, of the cost of
7 equipment for conversion, if certified by the board, of a special fuel mobile equipment engine to
8 be fueled by:
9 (i) propane, natural gas, or electricity; or
10 (ii) other fuel the board determines annually on or before July 1 to be:
11 (A) at least as effective in reducing air pollution as the fuels under Subsection (2)(c)(i);
12 or
13 (B) substantially more effective in reducing air pollution than the fuel for which the engine
14 was originally designed.
15 (3) An individual shall provide proof of the purchase of an item for which a credit is
16 allowed under this section by:
17 (a) providing proof to the board in the form it requires by rule;
18 (b) receiving a written statement from the board acknowledging receipt of the proof; and
19 (c) attaching the written statement obtained from the board to the tax return in which the
20 credit is claimed.
21 (4) This credit is allowed only:
22 (a) against any Utah tax owed in the taxable year by the taxpayer; and
23 (b) in the taxable year in which the item is purchased for which the credit is claimed.
24 Section 3. Effective date.
25 This act takes effect for taxable years beginning on or after January 1, 1998.


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Legislative Review Note
as of 12-6-96 2:08 PM

A limited legal review of this bill raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel

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