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H.B. 96

             1     

CLEANER BURNING FUELS TAX CREDITS AMENDMENTS

             2     
2013 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Jack R. Draxler

             5     
Senate Sponsor: ____________

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill amends corporate and individual income tax credits for cleaner burning fuels.
             10      Highlighted Provisions:
             11          This bill:
             12          .    modifies eligibility requirements to claim tax credits for cleaner burning fuels;
             13          .    extends corporate and individual income tax credits for cleaner burning fuels until
             14      the end of taxable year 2018; and
             15          .    makes technical and conforming changes.
             16      Money Appropriated in this Bill:
             17          None
             18      Other Special Clauses:
             19          This bill has retrospective operation for a taxable year beginning on or after January 1,
             20      2013.
             21      Utah Code Sections Affected:
             22      AMENDS:
             23          59-7-605, as last amended by Laws of Utah 2011, Chapter 358
             24          59-10-1009, as last amended by Laws of Utah 2011, Chapter 358
             25     
             26      Be it enacted by the Legislature of the state of Utah:
             27          Section 1. Section 59-7-605 is amended to read:


             28           59-7-605. Definitions -- Cleaner burning fuels tax credit.
             29          (1) As used in this section:
             30          (a) "Air quality standards" means that a vehicle's emissions are equal to or cleaner than
             31      the standards established in:
             32          (i) bin 2 in Table S04-1, of 40 C.F.R. 86.1811-04(c)(6); or
             33          (ii) for a new qualified plug-in electric drive motor vehicle, as defined in Section 30D,
             34      Internal Revenue Code, bin 4 in Table S04-1, of 40 C.F.R. 86.1811-04(c)(6).
             35          (b) "Board" means the Air Quality Board created under Title 19, Chapter 2, Air
             36      Conservation Act.
             37          (c) "Certified by the board" means that:
             38          (i) a motor vehicle on which conversion equipment has been installed meets the
             39      following criteria:
             40          (A) before the installation of conversion equipment, the vehicle does not exceed the
             41      emission cut points for a transient test driving cycle, as specified in 40 C.F.R. Part 51,
             42      Appendix E to Subpart S, or an equivalent test for the make, model, and year of the vehicle;
             43      and
             44          [(B) the motor vehicle's emissions of regulated pollutants, when operating on a fuel
             45      listed in Subsection (2)(c)(i) or (ii), is less than the emissions were before the installation of
             46      conversion equipment; and]
             47          [(C) a reduction in emissions under Subsection (1)(c)(i)(B) is demonstrated by:]
             48          [(I) certification of the conversion equipment by the federal Environmental Protection
             49      Agency or by a state whose certification standards are recognized by the board;]
             50          [(II) testing the motor vehicle, before and after installation of the conversion
             51      equipment, in accordance with 40 C.F.R. Part 86, Control of Emissions from New and In-use
             52      Highway Vehicles and Engines, using all fuel the motor vehicle is capable of using; or]
             53          [(III) any other test or standard recognized by board rule, which may not include a
             54      retrofit compressed natural gas vehicle that is retrofit in accordance with Section 19-1-406 ,
             55      unless that motor vehicle also satisfies Subsection (1)(c)(i)(C)(I); or]
             56          (B) as a result of the installation of conversion equipment on the motor vehicle, the
             57      motor vehicle has reduced emissions; or
             58          (ii) special mobile equipment on which conversion equipment has been installed


             59      [meets the following criteria:] has reduced emissions.
             60          [(A) the special mobile equipment's emissions of regulated pollutants, when operating
             61      on fuels listed in Subsection (2)(d)(i) or (ii), is less than the emissions were before the
             62      installation of conversion equipment; and]
             63          [(B) a reduction in emissions under Subsection (1)(c)(ii)(A) is demonstrated by:]
             64          [(I) certification of the conversion equipment by the federal Environmental Protection
             65      Agency or by a state whose certification standards are recognized by the board; or]
             66          [(II) any other test or standard recognized by board rule.]
             67          (d) "Clean fuel grant" means a grant awarded under Title 19, Chapter 1, Part 4, Clean
             68      Fuels and Vehicle Technology Program Act, for reimbursement of a portion of the incremental
             69      cost of an OEM vehicle or the cost of conversion equipment.
             70          (e) "Conversion equipment" means equipment referred to in Subsection (2)(c) or (d).
             71          (f) "Fuel economy standards" means that a vehicle's combined fuel economy, as
             72      determined in 40 C.F.R. [600.209-95(d)] 600.210-12(c), is equal to or greater than:
             73          (i) [31] 35 miles per gallon for gasoline-fueled vehicles;
             74          (ii) [36] 40 miles per gallon for diesel-fueled vehicles;
             75          (iii) [19] 25 miles per gallon for vehicles fueled by a blend of 85% ethanol and 15%
             76      gasoline;
             77          (iv) [19] 25 miles per gallon for liquified petroleum gas-fueled vehicles; or
             78          (v) standards consistent with 40 C.F.R. [600.209-95(d)] 600.210-12(c) that are adopted
             79      by the Air Quality Board by rule.
             80          [(g) "Incremental cost" has the same meaning as in Section 19-1-402 .]
             81          [(h)] (g) "OEM vehicle" has the same meaning as in Section 19-1-402 .
             82          [(i)] (h) "Original purchase" means the purchase of a vehicle that has never been titled
             83      or registered and has been driven less than 7,500 miles.
             84          (i) "Reduced emissions" means:
             85          (i) for purposes of a motor vehicle on which conversion equipment has been installed,
             86      that the motor vehicle's emissions of regulated pollutants, when operating on a fuel listed in
             87      Subsection (2)(e)(i) or (ii), is less than the emissions were before the installation of the
             88      conversion equipment, as demonstrated by:
             89          (A) certification of the conversion equipment by the federal Environmental Protection


             90      Agency or by a state that has certification standards recognized by the board;
             91          (B) testing the motor vehicle, before and after installation of the conversion equipment,
             92      in accordance with 40 C.F.R. Part 86, Control of Emissions from New and In-use Highway
             93      Vehicles and Engines, using all fuel the motor vehicle is capable of using;
             94          (C) for a retrofit natural gas vehicle that is retrofit in accordance with Section
             95      19-1-406 , testing that as a result of the retrofit, the retrofit natural gas vehicle satisfies the
             96      emission standards applicable under Section 19-1-406 ; or
             97          (D) any other test or standard recognized by board rule, made in accordance with Title
             98      63G, Chapter 3, Utah Administrative Rulemaking Act; or
             99          (ii) for purposes of special mobile equipment on which conversion equipment has been
             100      installed, that the special mobile equipment's emissions of regulated pollutants, when operating
             101      on fuels listed in Subsection (2)(d)(i) or (ii), is less than the emissions were before the
             102      installation of conversion equipment, as demonstrated by:
             103          (A) certification of the conversion equipment by the federal Environmental Protection
             104      Agency or by a state that has certification standards recognized by the board; or
             105          (B) any other test or standard recognized by board rule, made in accordance with Title
             106      63G, Chapter 3, Utah Administrative Rulemaking Act.
             107          (j) "Special mobile equipment":
             108          (i) means any mobile equipment or vehicle that is not designed or used primarily for
             109      the transportation of persons or property; and
             110          (ii) includes construction or maintenance equipment.
             111          (2) For taxable years beginning on or after January 1, [2009] 2013, but beginning on or
             112      before December 31, [2013] 2018, a taxpayer may claim a tax credit against tax otherwise due
             113      under this chapter or Chapter 8, Gross Receipts Tax on Certain Corporations Not Required to
             114      Pay Corporate Franchise or Income Tax Act, in an amount equal to:
             115          (a) $605 for the original purchase of a new vehicle that is not fueled by [compressed]
             116      natural gas if the vehicle is registered in [Utah] this state and meets air quality standards and
             117      fuel economy standards;
             118          (b) for the purchase of a vehicle fueled by [compressed] natural gas that is registered in
             119      [Utah] this state, the lesser of:
             120          (i) $2,500; or


             121          (ii) 35% of the purchase price of the vehicle;
             122          (c) 50% of the cost of equipment for conversion, if certified by the board, of a motor
             123      vehicle registered in [Utah] this state minus the amount of any clean fuel grant received, up to a
             124      maximum tax credit of $2,500 per motor vehicle, if the motor vehicle is to:
             125          (i) be fueled by propane, natural gas, or electricity;
             126          (ii) be fueled by other fuel the board determines annually on or before July 1 to be at
             127      least as effective in reducing air pollution as fuels under Subsection (2)(c)(i); or
             128          (iii) meet the federal clean-fuel vehicle standards in the federal Clean Air Act
             129      Amendments of 1990, 42 U.S.C. Sec. 7521 et seq.; and
             130          (d) 50% of the cost of equipment for conversion, if certified by the board, of a special
             131      mobile equipment engine minus the amount of any clean fuel grant received, up to a maximum
             132      tax credit of $1,000 per special mobile equipment engine, if the special mobile equipment is to
             133      be fueled by:
             134          (i) propane, natural gas, or electricity; or
             135          (ii) other fuel the board determines annually on or before July 1 to be:
             136          (A) at least as effective in reducing air pollution as the fuels under Subsection (2)(d)(i);
             137      or
             138          (B) substantially more effective in reducing air pollution than the fuel for which the
             139      engine was originally designed.
             140          (3) A taxpayer shall provide proof of the purchase of an item for which a tax credit is
             141      allowed under this section by:
             142          (a) providing proof to the board in the form the board requires by rule;
             143          (b) receiving a written statement from the board acknowledging receipt of the proof;
             144      and
             145          (c) retaining the written statement described in Subsection (3)(b).
             146          (4) Except as provided by Subsection (5), the tax credit under this section is allowed
             147      only:
             148          (a) against [any Utah] a tax owed under this chapter or Chapter 8, Gross Receipts Tax
             149      on Certain Corporations Not Required to Pay Corporate Franchise or Income Tax Act, in the
             150      taxable year by the taxpayer;
             151          (b) [in] for the taxable year in which [the], or the next taxable year after which, an item


             152      [is purchased for which the tax credit is claimed] described in Subsection (2)(a) or (b) is
             153      purchased or conversion equipment described in Subsection (2)(c) or (d) is installed; and
             154          (c) once per vehicle.
             155          (5) If the amount of a tax credit claimed by a taxpayer under this section exceeds the
             156      taxpayer's tax liability under this chapter or Chapter 8, Gross Receipts Tax on Certain
             157      Corporations Not Required to Pay Corporate Franchise or Income Tax Act, for a taxable year,
             158      the amount of the tax credit exceeding the tax liability may be carried forward for a period that
             159      does not exceed the next five taxable years.
             160          [(6) The tax credit provided by this section may be taken only once per vehicle.]
             161          Section 2. Section 59-10-1009 is amended to read:
             162           59-10-1009. Definitions -- Cleaner burning fuels tax credit.
             163          (1) As used in this section:
             164          (a) "Air quality standards" means that a vehicle's emissions are equal to or cleaner than
             165      the standards established in:
             166          (i) bin 2 in Table S04-1, of 40 C.F.R. 86.1811-04(c)(6); or
             167          (ii) for a new qualified plug-in electric drive motor vehicle, as defined in Section 30D,
             168      Internal Revenue Code, bin 4 in Table S04-1, of 40 C.F.R. 86.1811-04(c)(6).
             169          (b) "Board" means the Air Quality Board created in Title 19, Chapter 2, Air
             170      Conservation Act.
             171          (c) "Certified by the board" means that:
             172          (i) a motor vehicle on which conversion equipment has been installed meets the
             173      following criteria:
             174          (A) before the installation of conversion equipment, the vehicle does not exceed the
             175      emission cut points for a transient test driving cycle, as specified in 40 C.F.R. Part 51,
             176      Appendix E to Subpart S, or an equivalent test for the make, model, and year of the vehicle;
             177      and
             178          [(B) the motor vehicle's emissions of regulated pollutants, when operating on fuels
             179      listed in Subsection (2)(c)(i) or (ii), is less than the emissions were before the installation of
             180      conversion equipment; and]
             181          [(C) a reduction in emissions under Subsection (1)(c)(i)(B) is demonstrated by:]
             182          [(I) certification of the conversion equipment by the federal Environmental Protection


             183      Agency or by a state whose certification standards are recognized by the board;]
             184          [(II) testing the motor vehicle, before and after installation of the conversion
             185      equipment, in accordance with 40 C.F.R. Part 86, Control Emissions from New and In-use
             186      Highway Vehicles and Engines, using all fuels the motor vehicle is capable of using; or]
             187          [(III) any other test or standard recognized by board rule, which may not include a
             188      retrofit compressed natural gas vehicle that is retrofit in accordance with Section 19-1-406 ,
             189      unless that motor vehicle also satisfies Subsection (1)(c)(i)(C)(I); or]
             190          (B) as a result of the installation of conversion equipment on the motor vehicle, the
             191      motor vehicle has reduced emissions; or
             192          (ii) special mobile equipment on which conversion equipment has been installed
             193      [meets the following criteria:] has reduced emissions.
             194          [(A) the special mobile equipment's emissions of regulated pollutants, when operating
             195      on fuels listed in Subsection (2)(c)(i) or (ii), is less than the emissions were before the
             196      installation of conversion equipment; and]
             197          [(B) a reduction in emissions under Subsection (1)(c)(ii)(A) is demonstrated by:]
             198          [(I) certification of the conversion equipment by the federal Environmental Protection
             199      Agency or by a state whose certification standards are recognized by the board; or]
             200          [(II) any other test or standard recognized by the board.]
             201          (d) "Clean fuel grant" means a grant a claimant, estate, or trust receives under Title 19,
             202      Chapter 1, Part 4, Clean Fuels and Vehicle Technology Program Act, for reimbursement of a
             203      portion of the incremental cost of the OEM vehicle or the cost of conversion equipment.
             204          (e) "Conversion equipment" means equipment referred to in Subsection (2)(c) or (d).
             205          (f) "Fuel economy standards" means that a vehicle's combined fuel economy, as
             206      determined in 40 C.F.R. [600.209-95(d)] 600.210-12(c), is equal to or greater than:
             207          (i) [31] 35 miles per gallon for gasoline-fueled vehicles;
             208          (ii) [36] 40 miles per gallon for diesel-fueled vehicles;
             209          (iii) [19] 25 miles per gallon for vehicles fueled by a blend of 85% ethanol and 15%
             210      gasoline;
             211          (iv) [19] 25 miles per gallon for liquified petroleum gas-fueled vehicles; or
             212          (v) standards consistent with 40 C.F.R. [600.209-95(d)] 600.210-12(c) that are adopted
             213      by the Air Quality Board by rule.


             214          [(g) "Incremental cost" has the same meaning as in Section 19-1-402 .]
             215          [(h)] (g) "OEM vehicle" has the same meaning as in Section 19-1-402 .
             216          [(i)] (h) "Original purchase" means the purchase of a vehicle that has never been titled
             217      or registered and has been driven less than 7,500 miles.
             218          [(j)] (i) "Reduced emissions" means:
             219          (i) for purposes of a motor vehicle on which conversion equipment has been installed,
             220      that the motor vehicle's emissions of regulated pollutants, when operating on a fuel listed in
             221      Subsection (2)(e)(i) or (ii), is less than the emissions were before the installation of the
             222      conversion equipment, as demonstrated by:
             223          (A) certification of the conversion equipment by the federal Environmental Protection
             224      Agency or by a state that has certification standards recognized by the board;
             225          (B) testing the motor vehicle, before and after installation of the conversion equipment,
             226      in accordance with 40 C.F.R. Part 86, Control of Emissions from New and In-use Highway
             227      Vehicles and Engines, using all fuel the motor vehicle is capable of using;
             228          (C) for a retrofit natural gas vehicle that is retrofit in accordance with Section
             229      19-1-406 , testing that as a result of the retrofit, the retrofit natural gas vehicle satisfies the
             230      emission standards applicable under Section 19-1-406 ; or
             231          (D) any other test or standard recognized by board rule, made in accordance with Title
             232      63G, Chapter 3, Utah Administrative Rulemaking Act; or
             233          (ii) for purposes of special mobile equipment on which conversion equipment has been
             234      installed, that the special mobile equipment's emissions of regulated pollutants, when operating
             235      on fuels listed in Subsection (2)(d)(i) or (ii), is less than the emissions were before the
             236      installation of conversion equipment, as demonstrated by:
             237          (A) certification of the conversion equipment by the federal Environmental Protection
             238      Agency or by a state that has certification standards recognized by the board; or
             239          (B) any other test or standard recognized by board rule, made in accordance with Title
             240      63G, Chapter 3, Utah Administrative Rulemaking Act.
             241          (j) "Special mobile equipment":
             242          (i) means any mobile equipment or vehicle not designed or used primarily for the
             243      transportation of persons or property; and
             244          (ii) includes construction or maintenance equipment.


             245          (2) For taxable years beginning on or after January 1, [2009] 2013, but beginning on or
             246      before December 31, [2013] 2018, a claimant, estate, or trust may claim a nonrefundable tax
             247      credit against tax otherwise due under this chapter in an amount equal to:
             248          (a) $605 for the original purchase of a new vehicle that is not fueled by [compressed]
             249      natural gas if the vehicle is registered in [Utah] this state and meets air quality standards and
             250      fuel economy standards;
             251          (b) for the purchase of a vehicle fueled by [compressed] natural gas that is registered in
             252      [Utah] this state, the lesser of:
             253          (i) $2,500; or
             254          (ii) 35% of the purchase price of the vehicle;
             255          (c) 50% of the cost of equipment for conversion, if certified by the board, of a motor
             256      vehicle registered in [Utah] this state minus the amount of any clean fuel conversion grant
             257      received, up to a maximum tax credit of $2,500 per vehicle, if the motor vehicle:
             258          (i) is to be fueled by propane, natural gas, or electricity;
             259          (ii) is to be fueled by other fuel the board determines annually on or before July 1 to be
             260      at least as effective in reducing air pollution as fuels under Subsection (2)(c)(i); or
             261          (iii) will meet the federal clean fuel vehicle standards in the federal Clean Air Act
             262      Amendments of 1990, 42 U.S.C. Sec. 7521 et seq.; and
             263          (d) 50% of the cost of equipment for conversion, if certified by the board, of a special
             264      mobile equipment engine minus the amount of any clean fuel conversion grant received, up to a
             265      maximum tax credit of $1,000 per special mobile equipment engine, if the special mobile
             266      equipment is to be fueled by:
             267          (i) propane, natural gas, or electricity; or
             268          (ii) other fuel the board determines annually on or before July 1 to be:
             269          (A) at least as effective in reducing air pollution as the fuels under Subsection (2)(d)(i);
             270      or
             271          (B) substantially more effective in reducing air pollution than the fuel for which the
             272      engine was originally designed.
             273          (3) A claimant, estate, or trust shall provide proof of the purchase of an item for which
             274      a tax credit is allowed under this section by:
             275          (a) providing proof to the board in the form the board requires by rule;


             276          (b) receiving a written statement from the board acknowledging receipt of the proof;
             277      and
             278          (c) retaining the written statement described in Subsection (3)(b).
             279          (4) Except as provided by Subsection (5), the tax credit under this section is allowed
             280      only:
             281          (a) against [any Utah] a tax owed under this chapter in the taxable year by the claimant,
             282      estate, or trust;
             283          (b) [in] for the taxable year in which [the], or the next taxable year after which, an item
             284      [is purchased for which the tax credit is claimed] described in Subsection (2)(a) or (b) is
             285      purchased or conversion equipment described in Subsection (2)(c) or (d) is installed; and
             286          (c) once per vehicle.
             287          (5) If the amount of a tax credit claimed by a claimant, estate, or trust under this
             288      section exceeds the claimant's, estate's, or trust's tax liability under this chapter for a taxable
             289      year, the amount of the tax credit exceeding the tax liability may be carried forward for a period
             290      that does not exceed the next five taxable years.
             291          [(6) The tax credit provided by this section may be taken only once per vehicle.]
             292          Section 3. Retrospective operation.
             293          This bill has retrospective operation for a taxable year beginning on or after January 1,
             294      2013.




Legislative Review Note
    as of 1-29-13 12:13 PM


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