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Fourth Substitute H.B. 122

Representative Wayne A. Harper proposes the following substitute bill:


             1     
CLEAN AIR AND EFFICIENT VEHICLE TAX

             2     
CREDIT

             3     
2007 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Rosalind J. McGee

             6     
Senate Sponsor: Gregory S. Bell

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill provides a tax credit for new vehicles meeting air quality and fuel economy
             11      standards and exempts clean fuels from taxes on motor fuels and special fuels.
             12      Highlighted Provisions:
             13          This bill:
             14          .    eliminates the clean fuel special tax;
             15          .    defines terms;
             16          .    provides a tax credit of $1,000 for new vehicles meeting air quality and fuel
             17      economy standards;
             18          .    eliminates a provision excluding hybrid electric-gasoline vehicles from the tax
             19      credit; and
             20          .    makes technical changes.
             21      Monies Appropriated in this Bill:
             22          None
             23      Other Special Clauses:
             24          This bill takes effect on January 1, 2008.
             25      Utah Code Sections Affected:


             26      AMENDS:
             27          41-1a-418, as last amended by Chapter 63, Laws of Utah 2005
             28          41-6a-1508, as renumbered and amended by Chapter 2, Laws of Utah 2005
             29          59-7-605, as last amended by Chapters 108 and 294, Laws of Utah 2005
             30          59-10-1009, as renumbered and amended by Chapter 223, Laws of Utah 2006
             31          59-13-103, as last amended by Chapter 271, Laws of Utah 1997
             32          59-13-304, as last amended by Chapter 1, Laws of Utah 2005, First Special Session
             33          59-13-314, as last amended by Chapter 7, Laws of Utah 2003
             34          72-2-124, as last amended by Chapters 11 and 135, Laws of Utah 2006
             35     
             36      Be it enacted by the Legislature of the state of Utah:
             37          Section 1. Section 41-1a-418 is amended to read:
             38           41-1a-418. Authorized special group license plates.
             39          (1) The division shall only issue special group license plates in accordance with
             40      Sections 41-1a-418 through 41-1a-422 to a person who is specified under this section within
             41      the categories listed as follows:
             42          (a) disability special group license plates issued in accordance with Section 41-1a-420 ;
             43          (b) honor special group license plates, as in a war hero, which plates are issued for a:
             44          (i) survivor of the Japanese attack on Pearl Harbor;
             45          (ii) former prisoner of war;
             46          (iii) recipient of a Purple Heart; or
             47          (iv) disabled veteran;
             48          (c) unique vehicle type special group license plates, as for historical, collectors value,
             49      or other unique vehicle type, which plates are issued for a:
             50          (i) special interest vehicle;
             51          (ii) vintage vehicle;
             52          (iii) farm truck; or
             53          (iv) vehicle powered by clean fuel [and for which a current clean special fuel certificate
             54      is maintained as provided in Section 59-13-304 ] as defined in Section 59-13-102 ;
             55          (d) recognition special group license plates, as in a public official or an emergency
             56      service giver, which plates are issued for a:


             57          (i) current member of the Legislature;
             58          (ii) current member of the United States Congress;
             59          (iii) current member of the National Guard;
             60          (iv) licensed amateur radio operator;
             61          (v) currently employed, volunteer, or retired firefighter;
             62          (vi) emergency medical technician;
             63          (vii) current member of a search and rescue team; or
             64          (viii) current honorary consulate designated by the United States Department of State;
             65      and
             66          (e) support special group license plates, as for a contributor to an institution or cause,
             67      which plates are issued for a contributor to:
             68          (i) an institution's scholastic scholarship fund;
             69          (ii) the Division of Wildlife Resources;
             70          (iii) the Office of Veterans' Affairs;
             71          (iv) the Division of Parks and Recreation;
             72          (v) the Department of Agriculture and Food;
             73          (vi) the Guardian Ad Litem Services Account and the Children's Museum of Utah;
             74          (vii) the Boy Scouts of America;
             75          (viii) spay and neuter programs through No More Homeless Pets in Utah;
             76          (ix) the Boys and Girls Clubs of America; or
             77          (x) Utah public education.
             78          (2) Beginning January 1, 2003, the division may not issue a new type of special group
             79      license plate unless the division receives:
             80          (a) a start-up fee established under Section 63-38-3.2 for production and administrative
             81      costs for providing the new special group license plates; or
             82          (b) a legislative appropriation for the start-up fee provided under Subsection (2)(a).
             83          (3) (a) A sponsoring organization that qualifies for tax-exempt status under Internal
             84      Revenue Code Section 501(c)(3) may request the commission to authorize a new type of
             85      special group license plate for the sponsoring organization. The sponsoring organization shall:
             86          (i) collect a minimum of 200 applications; and
             87          (ii) pay a start-up fee established under Section 63-38-3.2 for production and


             88      administrative costs for providing the new type of special group license plates.
             89          (b) If the provisions of Subsection (3)(a) are met, the commission shall approve the
             90      request and the division shall:
             91          (i) design a license plate in accordance with Section 41-1a-419 ; and
             92          (ii) issue the new type of special group license plates.
             93          Section 2. Section 41-6a-1508 is amended to read:
             94           41-6a-1508. Low-speed vehicle.
             95          (1) Except as otherwise provided in this section, a low-speed vehicle is considered a
             96      motor vehicle for purposes of the Utah Code including requirements for:
             97          (a) traffic rules under Title 41, Chapter 6a, Traffic Code;
             98          (b) driver licensing under Title 53, Chapter 3, Uniform Driver License Act;
             99          (c) motor vehicle insurance under Title 41, Chapter 12a, Financial Responsibility of
             100      Motor Vehicle Owners and Operators Act;
             101          (d) vehicle registration, titling, odometer statements, vehicle identification numbers,
             102      license plates, and registration fees under Title 41, Chapter 1a, Motor Vehicle Act;
             103          (e) vehicle taxation under Title 59, Chapter 13, Motor and Special Fuel Tax Act, and
             104      fee in lieu of property taxes or in lieu fees under Section 59-2-405 ;
             105          (f) motor vehicle dealer licensing under Title 41, Chapter 3, Motor Vehicle Business
             106      Regulation Act;
             107          (g) motor vehicle safety inspection requirements under Section 53-8-205 ; and
             108          (h) safety belt requirements under Title 41, Chapter 6a, Part 18, Motor Vehicle Safety
             109      Belt Usage Act.
             110          (2) (a) A low-speed vehicle shall comply with federal safety standards established in 49
             111      C.F.R. 571.500 and shall be equipped with:
             112          (i) headlamps;
             113          (ii) front and rear turn signals, tail lamps, and stop lamps;
             114          (iii) turn signal lamps;
             115          (iv) reflex reflectors one on the rear of the vehicle and one on the left and right side and
             116      as far to the rear of the vehicle as practical;
             117          (v) a parking brake;
             118          (vi) a windshield that meets the standards under Section 41-6a-1635 , including a


             119      device for cleaning rain, snow, or other moisture from the windshield;
             120          (vii) an exterior rearview mirror on the driver's side and either an interior rearview
             121      mirror or an exterior rearview mirror on the passenger side;
             122          (viii) a speedometer and odometer; and
             123          (ix) braking for each wheel.
             124          (b) A low-speed vehicle that complies with this Subsection (2) and Subsection (3) and
             125      that is not altered from the manufacturer is considered to comply with equipment requirements
             126      under Part 16, Vehicle Equipment.
             127          (3) A person may not operate a low-speed vehicle that has been structurally altered
             128      from the original manufacturer's design.
             129          [(4) A user of a low-speed vehicle shall obtain an annual clean special fuel tax
             130      certificate for each low-speed vehicle as required under Section 59-13-304 .]
             131          [(5)] (4) A low-speed vehicle is exempt from a motor vehicle emissions inspection and
             132      maintenance program requirements under Section 41-6a-1642 .
             133          [(6)] (5) (a) Except to cross a highway at an intersection, a low-speed vehicle may not
             134      be operated on a highway with a posted speed limit of more than 35 miles per hour.
             135          (b) In addition to the restrictions under Subsection [(6)] (5)(a), a highway authority,
             136      may prohibit or restrict the operation of a low-speed vehicle on any highway under its
             137      jurisdiction, if the highway authority determines the prohibition or restriction is necessary for
             138      public safety.
             139          [(7)] (6) A person may not operate a low-speed vehicle on a highway without
             140      displaying on the rear of the low-speed vehicle, a slow-moving vehicle identification emblem
             141      that complies with the Society of Automotive Engineers standard SAE J943.
             142          [(8)] (7) A person who violates Subsection (2), (3), [(6)] (5), or [(7)] (6) is guilty of a
             143      class C misdemeanor.
             144          Section 3. Section 59-7-605 is amended to read:
             145           59-7-605. Definitions -- Tax credit -- Clean and efficient vehicles.
             146          (1) As used in this section:
             147          (a) "Air quality standards" means that a vehicle's emissions are equal to or cleaner than
             148      the standards established in bin 2 in Table S04-1, of 40 C.F.R. 86.1811-04(c)(6).
             149          [(a)] (b) "Board" means the Air Quality Board created under Title 19, Chapter 2, Air


             150      Conservation Act.
             151          [(b)] (c) "Certified by the board" means that:
             152          (i) a motor vehicle on which conversion equipment has been installed meets the
             153      following criteria:
             154          (A) before the installation of conversion equipment, the vehicle does not exceed the
             155      emission cut points for a transient test driving cycle, as specified in 40 C.F.R. Part 51,
             156      Appendix E to Subpart S, or an equivalent test for the make, model, and year of the vehicle;
             157          (B) the motor vehicle's emissions of regulated pollutants, when operating on a fuel
             158      listed in Subsection (2)[(a)(ii)(A)](b)(i) or (2)[(a)(ii)(B)](b)(ii), is less than the emissions were
             159      before the installation of conversion equipment; and
             160          (C) a reduction in emissions under Subsection (1)[(b)](c)(i)(B) is demonstrated by:
             161          (I) certification of the conversion equipment by the federal Environmental Protection
             162      Agency or by a state whose certification standards are recognized by the board;
             163          (II) testing the motor vehicle, before and after installation of the conversion equipment,
             164      in accordance with 40 C.F.R. Part 86, Control of Emissions from New and In-use Highway
             165      Vehicles and Engines, using all fuel the motor vehicle is capable of using; or
             166          (III) any other test or standard recognized by board rule; or
             167          (ii) special mobile equipment on which conversion equipment has been installed meets
             168      the following criteria:
             169          (A) the special mobile equipment's emissions of regulated pollutants, when operating
             170      on fuels listed in Subsection (2)[(a)(iii)(A)](c)(i) or (2)[(a)(iii)(B)](c)(ii), is less than the
             171      emissions were before the installation of conversion equipment; and
             172          (B) a reduction in emissions under Subsection (1)[(b)](c)(ii)(A) is demonstrated by:
             173          (I) certification of the conversion equipment by the federal Environmental Protection
             174      Agency or by a state whose certification standards are recognized by the board; or
             175          (II) any other test or standard recognized by board rule.
             176          [(c)] (d) "Clean fuel grant" means a grant awarded under Title 19, Chapter 1, Part 4,
             177      Clean Fuels Conversion Program Act, for reimbursement of a portion of the incremental cost
             178      of an OEM vehicle or the cost of conversion equipment.
             179          [(d)] (e) "Conversion equipment" means equipment referred to in Subsection
             180      (2)[(a)(ii)](b) or (2)[(a)(iii)](c).


             181          [(e)] (f) "Electric-hybrid vehicle" is as defined in 42 U.S.C. Sec. 13435.
             182          (g) "Fuel economy standards" means that a vehicle's combined fuel economy, as
             183      determined in 40 C.F.R. 600.209-95(d) is equal to or greater than:
             184          (i) 36 miles per gallon for gasoline-fueled vehicles;
             185          (ii) 41 miles per gallon for diesel-fueled vehicles;
             186          (iii) 26 miles per gallon for vehicles fueled by a blend of 85% ethanol and 15%
             187      gasoline;
             188          (iv) 23 miles per gallon for liquified petroleum gas-fueled vehicles; or
             189          (v) 27 miles per gallon for compressed natural gas-fueled vehicles.
             190          [(f)] (h) "Incremental cost" has the same meaning as in Section 19-1-402 .
             191          [(g)] (i) "OEM vehicle" has the same meaning as in Section 19-1-402 .
             192          (j) "Original purchase" means the purchase of a vehicle that has never been titled or
             193      registered and has been driven less than 7,500 miles.
             194          [(h)] (k) "Special mobile equipment":
             195          (i) means any mobile equipment or vehicle that is not designed or used primarily for
             196      the transportation of persons or property; and
             197          (ii) includes construction or maintenance equipment.
             198          (2) [(a) Except as provided in Subsection (2)(b), for] For taxable years beginning on or
             199      after January 1, 2001, but beginning on or before December 31, 2010, a taxpayer may claim a
             200      tax credit against tax otherwise due under this chapter or Chapter 8, Gross Receipts Tax on
             201      Certain Corporations Not Required to Pay Corporate Franchise or Income Tax Act, in an
             202      amount equal to:
             203          [(i) 50% of the incremental cost of an OEM vehicle registered in Utah minus the
             204      amount of any clean fuel grant received, up to a maximum tax credit of $3,000 per vehicle, if
             205      the vehicle:]
             206          [(A) is fueled by propane, natural gas, or electricity;]
             207          [(B) is fueled by other fuel the board determines annually on or before July 1 to be at
             208      least as effective in reducing air pollution as fuels under Subsection (2)(a)(i)(A); or]
             209          [(C) meets the clean-fuel vehicle standards in the federal Clean Air Act Amendments
             210      of 1990, 42 U.S.C. Sec. 7521 et seq.;]
             211          (a) $1,000 for the original purchase of a new vehicle if the vehicle meets air quality and


             212      fuel economy standards;
             213          [(ii)] (b) 50% of the cost of equipment for conversion, if certified by the board, of a
             214      motor vehicle registered in Utah minus the amount of any clean fuel grant received, up to a
             215      maximum tax credit of $2,500 per motor vehicle, if the motor vehicle is to:
             216          [(A)] (i) be fueled by propane, natural gas, or electricity;
             217          [(B)] (ii) be fueled by other fuel the board determines annually on or before July 1 to
             218      be at least as effective in reducing air pollution as fuels under Subsection (2)[(a)(ii)(A)](b)(i);
             219      or
             220          [(C)] (iii) meet the federal clean-fuel vehicle standards in the federal Clean Air Act
             221      Amendments of 1990, 42 U.S.C. Sec. 7521 et seq.; and
             222          [(iii)] (c) 50% of the cost of equipment for conversion, if certified by the board, of a
             223      special mobile equipment engine minus the amount of any clean fuel grant received, up to a
             224      maximum tax credit of $1,000 per special mobile equipment engine, if the special mobile
             225      equipment is to be fueled by:
             226          [(A)] (i) propane, natural gas, or electricity; or
             227          [(B)] (ii) other fuel the board determines annually on or before July 1 to be:
             228          [(I)] (A) at least as effective in reducing air pollution as the fuels under Subsection
             229      (2)[(a)(iii)(A)](c)(i); or
             230          [(II)] (B) substantially more effective in reducing air pollution than the fuel for which
             231      the engine was originally designed.
             232          [(b) Notwithstanding Subsection (2)(a), for taxable years beginning on or after January
             233      1, 2006, a taxpayer may not claim a tax credit under this section with respect to an
             234      electric-hybrid vehicle.]
             235          (3) A taxpayer shall provide proof of the purchase of an item for which a tax credit is
             236      allowed under this section by:
             237          (a) providing proof to the board in the form the board requires by rule;
             238          (b) receiving a written statement from the board acknowledging receipt of the proof;
             239      and
             240          (c) retaining the written statement described in Subsection (3)(b).
             241          (4) Except as provided by Subsection (5), the tax credit under this section is allowed
             242      only:


             243          (a) against any Utah tax owed in the taxable year by the taxpayer;
             244          (b) in the taxable year in which the item is purchased for which the tax credit is
             245      claimed; and
             246          (c) once per vehicle.
             247          (5) If the amount of a tax credit claimed by a taxpayer under this section exceeds the
             248      taxpayer's tax liability under this chapter for a taxable year, the amount of the tax credit
             249      exceeding the tax liability may be carried forward for a period that does not exceed the next
             250      five taxable years.
             251          Section 4. Section 59-10-1009 is amended to read:
             252           59-10-1009. Definitions -- Tax credit -- Clean and efficient vehicles.
             253          (1) As used in this section:
             254          (a) "Air quality standards" means that a vehicle's emissions are equal to or cleaner than
             255      the standards established in bin 2 in Table S04-1, of 40 C.F.R. 86.1811-04(c)(6).
             256          [(a)] (b) "Board" means the Air Quality Board created in Title 19, Chapter 2, Air
             257      Conservation Act.
             258          [(b)] (c) "Certified by the board" means that:
             259          (i) a motor vehicle on which conversion equipment has been installed meets the
             260      following criteria:
             261          (A) before the installation of conversion equipment, the vehicle does not exceed the
             262      emission cut points for a transient test driving cycle, as specified in 40 C.F.R. Part 51,
             263      Appendix E to Subpart S, or an equivalent test for the make, model, and year of the vehicle;
             264          (B) the motor vehicle's emissions of regulated pollutants, when operating on fuels
             265      listed in Subsection (2)[(a)(ii)(A)](b)(i) or (2)[(a)(ii)(B)](b)(ii), is less than the emissions were
             266      before the installation of conversion equipment; and
             267          (C) a reduction in emissions under Subsection (1)[(b)](c)(i)(B) is demonstrated by:
             268          (I) certification of the conversion equipment by the federal Environmental Protection
             269      Agency or by a state whose certification standards are recognized by the board;
             270          (II) testing the motor vehicle, before and after installation of the conversion equipment,
             271      in accordance with 40 C.F.R. Part 86, Control Emissions from New and In-use Highway
             272      Vehicles and Engines, using all fuels the motor vehicle is capable of using; or
             273          (III) any other test or standard recognized by board rule; or


             274          (ii) special mobile equipment on which conversion equipment has been installed meets
             275      the following criteria:
             276          (A) the special mobile equipment's emissions of regulated pollutants, when operating
             277      on fuels listed in Subsection (2)[(a)(iii)(A)](c)(i) or (2)[(a)(iii)(B)](c)(ii), is less than the
             278      emissions were before the installation of conversion equipment; and
             279          (B) a reduction in emissions under Subsection (1)[(b)](c)(ii)(A) is demonstrated by:
             280          (I) certification of the conversion equipment by the federal Environmental Protection
             281      Agency or by a state whose certification standards are recognized by the board; or
             282          (II) any other test or standard recognized by the board.
             283          [(c)] (d) "Clean fuel grant" means a grant a claimant, estate, or trust receives under
             284      Title 19, Chapter 1, Part 4, Clean Fuels Conversion Program Act, for reimbursement of a
             285      portion of the incremental cost of the OEM vehicle or the cost of conversion equipment.
             286          [(d)] (e) "Conversion equipment" means equipment referred to in Subsection
             287      (2)[(a)(ii)](b) or (2)[(a)(iii)](c).
             288          [(e)] (f) "Electric-hybrid vehicle" is as defined in 42 U.S.C. Sec. 13435.
             289          (g) "Fuel economy standards" means that a vehicle's combined fuel economy, as
             290      determined in 40 C.F.R. 600.209-95(d) is equal to or greater than:
             291          (i) 36 miles per gallon for gasoline-fueled vehicles;
             292          (ii) 41 miles per gallon for diesel-fueled vehicles;
             293          (iii) 26 miles per gallon for vehicles fueled by a blend of 85% ethanol and 15%
             294      gasoline;
             295          (iv) 23 miles per gallon for liquified petroleum gas-fueled vehicles; or
             296          (v) 27 miles per gallon for compressed natural gas-fueled vehicles.
             297          [(f)] (h) "Incremental cost" has the same meaning as in Section 19-1-402 .
             298          [(g)] (i) "OEM vehicle" has the same meaning as in Section 19-1-402 .
             299          (j) "Original purchase" means the purchase of a vehicle that has never been titled or
             300      registered and has been driven less than 7,500 miles.
             301          [(h)] (k) "Special mobile equipment":
             302          (i) means any mobile equipment or vehicle not designed or used primarily for the
             303      transportation of persons or property; and
             304          (ii) includes construction or maintenance equipment.


             305          (2) [(a) Except as provided in Subsection (2)(b), for] For taxable years beginning on or
             306      after January 1, 2001, but beginning on or before December 31, 2010, a claimant, estate, or
             307      trust may claim a nonrefundable tax credit against tax otherwise due under this chapter in an
             308      amount equal to:
             309          [(i) 50% of the incremental cost of an OEM vehicle registered in Utah minus the
             310      amount of any clean fuel grant received, up to a maximum tax credit of $3,000 per vehicle, if
             311      the vehicle:]
             312          [(A) is fueled by propane, natural gas, or electricity;]
             313          [(B) is fueled by other fuel the board determines annually on or before July 1 to be at
             314      least as effective in reducing air pollution as fuels under Subsection (2)(a)(i)(A); or]
             315          [(C) meets the clean-fuel vehicle standards in the federal Clean Air Act Amendments
             316      of 1990, 42 U.S.C. Sec. 7521 et seq.;]
             317          (a) $1,000 for the original purchase of a new vehicle if the vehicle meets air quality and
             318      fuel economy standards;
             319          [(ii)] (b) 50% of the cost of equipment for conversion, if certified by the board, of a
             320      motor vehicle registered in Utah minus the amount of any clean fuel conversion grant received,
             321      up to a maximum tax credit of $2,500 per vehicle, if the motor vehicle:
             322          [(A)] (i) is to be fueled by propane, natural gas, or electricity;
             323          [(B)] (ii) is to be fueled by other fuel the board determines annually on or before July 1
             324      to be at least as effective in reducing air pollution as fuels under Subsection (2)[(a)(ii)(A)]
             325      (b)(i); or
             326          [(C)] (iii) will meet the federal clean fuel vehicle standards in the federal Clean Air Act
             327      Amendments of 1990, 42 U.S.C. Sec. 7521 et seq.; and
             328          [(iii)] (c) 50% of the cost of equipment for conversion, if certified by the board, of a
             329      special mobile equipment engine minus the amount of any clean fuel conversion grant
             330      received, up to a maximum tax credit of $1,000 per special mobile equipment engine, if the
             331      special mobile equipment is to be fueled by:
             332          [(A)] (i) propane, natural gas, or electricity; or
             333          [(B)] (ii) other fuel the board determines annually on or before July 1 to be:
             334          [(I)] (A) at least as effective in reducing air pollution as the fuels under Subsection
             335      (2)[(a)(iii)(A)](c)(i); or


             336          [(II)] (B) substantially more effective in reducing air pollution than the fuel for which
             337      the engine was originally designed.
             338          [(b) Notwithstanding Subsection (2)(a), for taxable years beginning on or after January
             339      1, 2006, a claimant, estate, or trust may not claim a tax credit under this section with respect to
             340      an electric-hybrid vehicle.]
             341          (3) A claimant, estate, or trust shall provide proof of the purchase of an item for which
             342      a tax credit is allowed under this section by:
             343          (a) providing proof to the board in the form the board requires by rule;
             344          (b) receiving a written statement from the board acknowledging receipt of the proof;
             345      and
             346          (c) retaining the written statement described in Subsection (3)(b).
             347          (4) Except as provided by Subsection (5), the tax credit under this section is allowed
             348      only:
             349          (a) against any Utah tax owed in the taxable year by the claimant, estate, or trust;
             350          (b) in the taxable year in which the item is purchased for which the tax credit is
             351      claimed; and
             352          (c) once per vehicle.
             353          (5) If the amount of a tax credit claimed by a claimant, estate, or trust under this
             354      section exceeds the claimant's, estate's, or trust's tax liability under this chapter for a taxable
             355      year, the amount of the tax credit exceeding the tax liability may be carried forward for a period
             356      that does not exceed the next five taxable years.
             357          Section 5. Section 59-13-103 is amended to read:
             358           59-13-103. List of clean fuels provided to tax commission -- Report to the
             359      Legislature.
             360          (1) The Air Quality Board shall annually provide to the tax commission a list of fuels
             361      that are clean fuels under Section 59-13-102 .
             362          (2) The Air Quality Board created under Section 19-2-103 shall in conjunction with the
             363      State Tax Commission prepare and submit to the Legislature before January 1, 1995, a report
             364      evaluating the impacts, benefits, and economic consequences of the clean fuel [certificate]
             365      provisions of Sections 59-13-201 and 59-13-301 .
             366          Section 6. Section 59-13-304 is amended to read:


             367           59-13-304. Exemptions from Special Fuel Tax -- Inspection of clean fuel vehicles.
             368          [(1) (a) Except as provided in Subsection (4), a user of special fuel who owns a vehicle
             369      powered by a clean special fuel as defined under Section 59-13-102 shall pay a clean special
             370      fuel tax as provided under this section for use of clean special fuel.]
             371          [(b) A user of special fuel who qualifies for the clean special fuel tax shall annually
             372      purchase from the commission a clean special fuel tax certificate for each vehicle owned or
             373      leased that is powered by a clean special fuel.]
             374          [(c) Clean special fuel tax certificates are provided to encourage the use of clean fuels
             375      to reduce air pollution.]
             376          [(2) (a) The fee for a clean special fuel tax certificate is:]
             377          [(i) 70/.19 of the tax per gallon imposed under Subsection 59-13-201 (1)(a), rounded up
             378      to the nearest dollar, for qualified motor vehicles as defined under Section 59-13-102 ; and]
             379          [(ii) 36/.19 of the tax per gallon imposed under Subsection 59-13-201 (1)(a), rounded
             380      up to the nearest dollar, for other vehicles.]
             381          (1) A vehicle that operates on clean fuel is exempt from the special fuel tax.
             382          [(b)] (2) The commission may require each clean fuel vehicle to be inspected for safe
             383      operation [before issuing the certificate].
             384          [(c)] (3) Each clean fuel vehicle shall be equipped with an approved and properly
             385      installed carburetion system if it is powered by a fuel that is gaseous at standard atmospheric
             386      conditions.
             387          [(3) (a) Beginning January 1, 2001 through December 31, 2010, there is imposed a
             388      surcharge of $35 on each clean special fuel tax certificate issued under this section.]
             389          [(b) (i) Until Subsection (3)(b)(ii) applies, surcharges imposed under Subsection (3)(a)
             390      shall be deposited into the Centennial Highway Fund Restricted Account created under Section
             391      72-2-118 .]
             392          [(ii) When the highway general obligation bonds have been paid off and the highway
             393      projects completed that are intended to be paid from revenues deposited in the Centennial
             394      Highway Fund Restricted Account as determined by the Executive Appropriations Committee
             395      under Subsection 72-2-118 (6)(d), the surcharge imposed under Subsection (3)(a) shall be
             396      deposited into the Transportation Investment Fund of 2005 created by Section 72-2-124 .]
             397          [(4) A governmental entity identified in Subsection 59-13-301 (9) that owns or leases a


             398      vehicle powered by a special fuel that qualifies as a clean special fuel is exempt from the clean
             399      special fuel tax imposed under this section.]
             400          Section 7. Section 59-13-314 is amended to read:
             401           59-13-314. Special fuel user permit required before registration of vehicle.
             402          Before registering any motor vehicle which is operated by special fuels, the registered
             403      owner or lessee of the vehicle shall obtain[: (1)] a valid special fuel user permit for the current
             404      year if required under Section 59-13-303 [; or].
             405          [(2) a valid clean special fuel tax certificate for the current year if required under
             406      Section 59-13-304 .]
             407          Section 8. Section 72-2-124 is amended to read:
             408           72-2-124. Transportation Investment Fund of 2005.
             409          (1) There is created a special revenue fund entitled the Transportation Investment Fund
             410      of 2005.
             411          (2) The fund consists of monies generated from the following sources:
             412          (a) any voluntary contributions received for the maintenance, construction,
             413      reconstruction, or renovation of state and federal highways; and
             414          (b) appropriations made to the fund by the Legislature.
             415          (3) When the highway general obligation bonds have been paid off and the highway
             416      projects completed that are intended to be paid from revenues deposited in the Centennial
             417      Highway Fund Restricted Account as determined by the Executive Appropriations Committee
             418      under Subsection 72-2-118 (6)(d), the fund shall also consist of monies generated from the
             419      following sources:
             420          (a) registration fees designated under Subsection 41-1a-1201 (6)(a); and
             421          [(b) the clean special fuel tax certificate surcharge under Subsection 59-13-304 (3);
             422      and]
             423          [(c)] (b) the sales and use tax amounts provided for in Section 59-12-103 .
             424          (4) (a) The fund shall earn interest.
             425          (b) All interest earned on fund monies shall be deposited into the fund.
             426          (5) (a) Except as provided in Subsections (5)(b) and (c), the executive director may use
             427      fund monies only to pay the costs of maintenance, construction, reconstruction, or renovation
             428      to state and federal highways prioritized by the Transportation Commission through the


             429      prioritization process for new transportation capacity projects adopted under Section 72-1-304 .
             430          (b) The executive director may use fund monies deposited into the fund in fiscal year
             431      2006 only to pay the costs of maintenance, construction, reconstruction, or renovation to state
             432      and federal highways prioritized by the Transportation Commission.
             433          (c) The executive director may use fund monies to exchange for an equal or greater
             434      amount of federal transportation funds to be used as provided in Subsection (5)(a).
             435          Section 9. Effective date.
             436          This bill takes effect on January 1, 2008.


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