H.B. 61

This document includes Senate 2nd and 3rd Reading Floor Amendments incorporated into the bill on Wed, Mar 12, 2014 at 3:20 PM by lpoole. --> This document includes Conference Committee Amendments incorporated into the bill on Thu, Mar 13, 2014 at 3:07 PM by lerror. -->              1     

CLEAN AIR PROGRAMS

             2     
2014 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Patrice M. Arent

             5     
Senate Sponsor: Ralph Okerlund

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill modifies Title 19, Environmental Quality Code, by modifying the Clean Fuels
             10      and Vehicle Technology Program Act and enacting the Clean Air Retrofit,
             11      Replacement, and Off-road Technology Program.
             12      Highlighted Provisions:
             13          This bill:
             14          .    defines terms;
             15          .    amends definitions;
             16          .    modifies the process for the Department of Environmental Quality to make a loan or
             17      grant from the Clean Fuels and Vehicle Technology Program, including:
             18              .    allowing electric-hybrids to be eligible for the program; and
             19              .    removing the state match requirements for a grant for refueling infrastructure;
             20          .    describes the requirements for receiving a grant from the Division of Air Quality;
             21          .    authorizes the Air Quality Board to make rules; and
             22          .    makes technical changes.
             23      Money Appropriated in this Bill:
             24          This bill appropriates in fiscal year 2015:
             25          .    to the Department of Environmental Quality - Clean Air Retrofit, Replacement, and
             26      Off-road Technology, as S. [ an ongoing ] a one-time .S appropriation:
             27              .    from the General Fund, $200,000.


             28      Other Special Clauses:
             29          None
             30      Utah Code Sections Affected:
             31      AMENDS:
             32           19-1-402 , as last amended by Laws of Utah 2006, Chapter 136
             33           19-1-403 , as last amended by Laws of Utah 2011, Chapter 303
             34           19-1-404 , as last amended by Laws of Utah 2008, Chapter 382
             35           19-1-405 , as last amended by Laws of Utah 2008, Chapter 382
             36      ENACTS:
             37           19-2-201 , Utah Code Annotated 1953
             38           19-2-202 , Utah Code Annotated 1953
             39           19-2-203 , Utah Code Annotated 1953
             40           19-2-204 , Utah Code Annotated 1953
             41     
             42      Be it enacted by the Legislature of the state of Utah:
             43          Section 1. Section 19-1-402 is amended to read:
             44           19-1-402. Definitions.
             45          As used in this part:
             46          (1) "Clean fuel" means:
             47          (a) propane, natural gas, or electricity; or
             48          [(b) other fuel the Air Quality Board certifies, as authorized by Subsection
             49      19-1-405 (1)(d), to be at least as effective in reducing air pollution as fuels under Subsection
             50      (1)(a); or]
             51          [(c)] (b) other fuel that meets the clean fuel vehicle standards in the federal Clean Air
             52      Act Amendments of 1990, 42 U.S.C. Sec. 7521 et seq.
             53          (2) "Clean [fuel] vehicle" means a vehicle that:
             54          (a) uses a clean fuel; [and] or
             55          [(b) meets clean fuel vehicle standards in the federal Clean Air Act Amendments of
             56      1990, 42 U.S.C. Sec. 7521 et seq.]
             57          (b) is an electric-hybrid vehicle.
             58          (3) "Electric-hybrid vehicle" means a vehicle:


             59          (a) primarily powered by an electric motor that draws current from:
             60          (i) rechargeable storage batteries;
             61          (ii) fuel cells; or
             62          (iii) other sources of electric current; and
             63          (b) that also operates on or is capable of operating on a nonelectrical source of power.
             64          [(4) "Fuel system" means tanks, pumps, hoses, injectors, electronic controls, and
             65      related components that deliver fuel or energy or both to a motor used to propel a vehicle.]
             66          [(5)] (4) "Fund" means the Clean Fuels and Vehicle Technology Fund created in
             67      Section 19-1-403 .
             68          [(6)] (5) (a) "Government vehicle" means a motor vehicle:
             69          (i) registered in Utah; and
             70          (ii) owned and operated by:
             71          (A) the state;
             72          (B) a public trust authority;
             73          (C) a school district;
             74          (D) a county; or
             75          (E) a municipality.
             76          (b) "Government vehicle" includes a metropolitan rapid transit motor vehicle, bus,
             77      truck, law enforcement vehicle, or emergency vehicle.
             78          [(7)] (6) "Incremental cost" means the difference between the cost of the OEM vehicle
             79      and the same vehicle model manufactured without the clean fuel fueling system.
             80          [(8)] (7) "OEM vehicle" means a vehicle manufactured by the original vehicle
             81      manufacturer or its contractor [to use a clean fuel] as a clean vehicle.
             82          [(9)] (8) "Private sector business vehicle" means a motor vehicle registered in Utah that
             83      is owned and operated solely in the conduct of a private business enterprise.
             84          [(10)] (9) "Refueling equipment" means compressors when used separately,
             85      compressors used in combination with cascade tanks, and other equipment that constitute a
             86      central refueling system capable of dispensing vehicle fuel.
             87          [(11) "Retrofit" means conversion or augmentation of an existing motor, fuel system,
             88      exhaust system, or related components to systems that lead to a reduction in air pollution.]
             89          Section 2. Section 19-1-403 is amended to read:


             90           19-1-403. Clean Fuels and Vehicle Technology Fund -- Contents -- Loans or
             91      grants made with fund money.
             92          (1) (a) There is created a revolving fund known as the Clean Fuels and Vehicle
             93      Technology Fund.
             94          (b) The fund consists of:
             95          (i) appropriations to the fund;
             96          (ii) other public and private contributions made under Subsection (1)(c);
             97          (iii) interest earnings on cash balances; and
             98          (iv) all money collected for loan repayments and interest on loans.
             99          (c) The department may accept contributions from other public and private sources for
             100      deposit into the fund.
             101          (2) (a) [Except as provided in Subsection (3), the] The department may make a loan or
             102      a grant with money available in the fund for:
             103          (i) the conversion of a private sector business vehicle or a government vehicle to use a
             104      clean fuel, if certified by the Air Quality Board under Subsection 19-1-405 (1)(a); or
             105          (ii) the purchase of[: (A)] an OEM vehicle for use as a private sector business vehicle
             106      or government vehicle[; or].
             107          [(B) a vehicle, certified by the Air Quality Board under Subsection 19-1-405 (1)(d), for
             108      use as a private sector business vehicle or government vehicle;]
             109          [(iii) the retrofit, certified by the Air Quality Board under Subsection 19-1-405 (1)(d),
             110      of a private sector business vehicle or government vehicle;]
             111          [(iv) a fuel system, certified by the Air Quality Board under Subsection 19-1-405 (1)(d),
             112      for a private sector business vehicle or government vehicle; or]
             113          [(v) a state match of a federal or nonfederal grant for any item under this Subsection
             114      (2)(a).]
             115          (b) The amount of a loan for any vehicle under Subsection (2)(a)[(i) or (2)(a)(ii)(A)]
             116      may not exceed:
             117          (i) the actual cost of the vehicle conversion;
             118          (ii) the incremental cost of purchasing the OEM vehicle; or
             119          (iii) the cost of purchasing the OEM vehicle if there is no documented incremental
             120      cost.


             121          (c) The amount of a grant for any vehicle under Subsection (2)(a)[(i) or (2)(a)(ii)(A)]
             122      may not exceed:
             123          (i) 50% of the actual cost of the vehicle conversion minus the amount of any tax credit
             124      claimed under Section 59-7-605 or 59-10-1009 for the vehicle for which a grant is requested;
             125      or
             126          (ii) 50% of the incremental cost of purchasing an OEM vehicle minus the amount of
             127      any tax credit claimed under Section 59-7-605 or 59-10-1009 for the vehicle for which a grant
             128      is requested.
             129          (d) (i) [Except as provided in Subsection (3) and subject] Subject to the availability of
             130      money in the fund, the department may make a loan or grant for the purchase of vehicle
             131      refueling equipment for a private sector business vehicle or a government vehicle.
             132          (ii) The maximum amount loaned or granted per installation of refueling equipment
             133      may not exceed the actual cost of the refueling equipment.
             134          [(iii) Except as provided in Subsection (3) and subject to the availability of money in
             135      the fund, the department may make a grant for a state match of a federal or nonfederal grant for
             136      the purchase of vehicle refueling equipment for a private sector business vehicle or a
             137      government vehicle.]
             138          [(3) The department may not make a loan or grant under this part for an electric-hybrid
             139      vehicle.]
             140          [(4)] (3) The department may:
             141          (a) establish an application fee for a loan or grant from the fund by following the
             142      procedures and requirements of Section 63J-1-504 ; and
             143          [(a)] (b) reimburse itself for the costs incurred in administering the fund from:
             144          (i) the fund; or
             145          (ii) application fees[; and] established under Subsection (3)(a).
             146          [(b) establish an application fee for a loan or grant from the fund by following the
             147      procedures and requirements of Section 63J-1-504 .]
             148          [(5)] (4) (a) The fund balance may not exceed $10,000,000.
             149          (b) Interest on cash balances and repayment of loans in excess of the amount necessary
             150      to maintain the fund balance at $10,000,000 shall be deposited in the General Fund.
             151          [(6)] (5) (a) Loans made from money in the fund shall be supported by loan documents


             152      evidencing the intent of the borrower to repay the loan.
             153          (b) The original loan documents shall be filed with the Division of Finance and a copy
             154      shall be filed with the department.
             155          Section 3. Section 19-1-404 is amended to read:
             156           19-1-404. Department duties -- Rulemaking -- Loan repayment.
             157          (1) The department shall:
             158          (a) administer the fund created in Section 19-1-403 to encourage government officials
             159      and private sector business vehicle owners and operators to obtain and use clean fuel vehicles;
             160      and
             161          (b) by following the procedures and requirements of Title 63G, Chapter 3, Utah
             162      Administrative Rulemaking Act, make rules:
             163          (i) specifying the amount of money in the fund to be dedicated annually for grants;
             164          (ii) limiting the amount of a grant given to any person claiming a tax credit under
             165      Section 59-7-605 or 59-10-1009 for the motor vehicle for which a grant is requested to assure
             166      that the sum of the tax credit and grant does not exceed:
             167          (A) 50% of the incremental cost of the OEM vehicle; or
             168          (B) 50% of the cost of conversion equipment;
             169          (iii) limiting the number of motor vehicles per fleet operator that may be eligible for a
             170      grant in a year;
             171          (iv) specifying criteria the department shall consider in prioritizing and awarding loans
             172      and grants;
             173          (v) specifying repayment periods;
             174          (vi) specifying procedures for:
             175          (A) awarding loans and grants; and
             176          (B) collecting loans; and
             177          (vii) requiring all loan and grant applicants to:
             178          (A) apply on forms provided by the department;
             179          (B) agree in writing to use the clean fuel for which each vehicle is converted or
             180      purchased using loan or grant proceeds for a minimum of 70% of the vehicle miles traveled
             181      beginning from the time of conversion or purchase of the vehicle;
             182          (C) agree in writing to notify the department if a vehicle converted or purchased using


             183      loan or grant proceeds becomes inoperable through mechanical failure or accident and to
             184      pursue a remedy outlined in department rules;
             185          (D) provide reasonable data to the department on a vehicle converted or purchased
             186      with loan or grant proceeds; and
             187          (E) submit a vehicle converted or purchased with loan or grant proceeds to inspections
             188      by the department as required in department rules and as necessary for administration of the
             189      loan and grant program[; and].
             190          [(viii) specifying the criteria for awarding a state match under Subsection 19-1-403 (2).]
             191          (2) (a) When developing repayment schedules for the loans, the department shall
             192      consider the projected savings from use of the clean [fuel] vehicle.
             193          (b) A repayment schedule may not exceed 10 years.
             194          (c) The department shall make a loan from the fund for a private sector vehicle at an
             195      interest rate equal to the annual return earned in the state treasurer's Public Treasurer's Pool as
             196      determined the month immediately preceding the closing date of the loan.
             197          (d) The department shall make a loan from the fund for a government vehicle with no
             198      interest rate.
             199          (3) The Division of Finance shall:
             200          (a) collect and account for the loans; and
             201          (b) have custody of all loan documents, including all notes and contracts, evidencing
             202      the indebtedness of the fund.
             203          Section 4. Section 19-1-405 is amended to read:
             204           19-1-405. Air Quality Board duties -- Rulemaking.
             205          (1) By following the procedures and requirements of Title 63G, Chapter 3, Utah
             206      Administrative Rulemaking Act, the Air Quality Board may make rules to:
             207          (a) certify a motor vehicle on which conversion equipment has been installed if:
             208          (i) before the installation of conversion equipment, the motor vehicle does not exceed
             209      the emission cut points for:
             210          (A) a transient test driving cycle, as specified in 40 CFR 51, Appendix E to Subpart S;
             211      or
             212          (B) an equivalent test for the make, model, and year of the motor vehicle; and
             213          (ii) the motor vehicle's emissions of regulated pollutants, when operating with clean


             214      fuel, is less than the emissions were before the installation of conversion equipment;
             215          (b) recognize a test or standard that demonstrates a reduction in emissions; or
             216          (c) recognize a certification standard from another state[;].
             217          [(d) certify a fuel, vehicle, retrofit, or fuel system if it is at least as effective in reducing
             218      air pollution as fuels under Subsection 19-1-402 (1)(a) or vehicles under Subsection
             219      19-1-402 (2); or]
             220          [(e) establish criteria for determining the effectiveness of a fuel, vehicle, retrofit, or
             221      fuel system in reducing air pollution.]
             222          (2) A reduction in emissions under Subsection (1)(a)(ii) is demonstrated by:
             223          (a) certification of the conversion equipment by the federal Environmental Protection
             224      Agency or by a state whose certification standards are recognized by the Air Quality Board;
             225          (b) testing the motor vehicle, before and after the installation of the conversion
             226      equipment, in accordance with 40 CFR 86, Control of Air Pollution from New and In-use
             227      Motor Vehicle Engines: Certification and Test Procedures, using all fuel the motor vehicle is
             228      capable of using; or
             229          (c) any other test or standard recognized by the Air Quality Board in rule.
             230          Section 5. Section 19-2-201 is enacted to read:
             231     
Part 2. Clean Air Retrofit, Replacement, and Off-road Technology Program

             232          19-2-201. Title.
             233          This part is known as the "Clean Air Retrofit, Replacement, and Off-road Technology
             234      Program."
             235          Section 6. Section 19-2-202 is enacted to read:
             236          19-2-202. Definitions.
             237          As used in this part:
             238          (1) "Board" means the Air Quality Board.
             239          (2) "Certified" means certified by the United States Environmental Protection Agency
             240      or the California Air Resources Board to meet appropriate emission standards.
             241          (3) "Cost" means the total reasonable cost of a project eligible for a grant under the
             242      fund, including the cost of labor.
             243          (4) "Director" means the director of the Division of Air Quality.
             244          (5) "Division" means the Division of Air Quality, created in Subsection 19-1-105 (1)(a).


             245          (6) "Eligible equipment" means equipment with engines, including stationary
             246      generators and pumps, operated and, if applicable, permitted in Utah.
             247          (7) "Eligible vehicle" means a vehicle operated and, if applicable, registered in Utah
             248      that is:
             249          (a) a medium-duty or heavy-duty transit bus;
             250          (b) a school bus as defined in Subsection 53-3-102 (33);
             251          (c) a medium-duty or heavy-duty truck with a gross vehicle weight rating of at least
             252      16,001 GVWR;
             253          (d) a locomotive; or
             254          (e) another type of vehicle identified by the board in rule as being a significant
             255      potential source of air pollution, as defined in Subsection 19-2-102 (3).
             256          (8) "Verified" means verified by the United States Environmental Protection Agency or
             257      the California Air Resources Board to reduce air emissions and meet durability requirements.
             258          Section 7. Section 19-2-203 is enacted to read:
             259          19-2-203. Grants and programs -- Conditions.
             260          (1) The director may make grants for implementing:
             261          (a) verified technologies for eligible vehicles or equipment; and
             262          (b) certified vehicles, engines, or equipment.
             263          (2) (a) The division may develop programs, including exchange, rebate, or low-cost
             264      purchase programs, to encourage replacement of:
             265          (i) landscaping and maintenance equipment with equipment that is lower in emissions;
             266      and
             267          (ii) other equipment or products identified by the board in rule as being a significant
             268      potential source of air pollution, as defined in Subsection 19-2-102 (3).
             269          (b) The division may enter into agreements with local health departments to administer
             270      the programs described in Subsection (2)(a).
             271          (3) As a condition for receiving the grant, a person receiving a grant under Subsection
             272      (1) or receiving a grant under this Subsection (3) shall agree to:
             273          (a) provide information to the division about the vehicles, equipment, or technology
             274      acquired with the grant proceeds;
             275          (b) allow inspections by the division to ensure compliance with the terms of the grant;


             276          (c) permanently disable replaced vehicles, engines, and equipment from use; and
             277          (d) comply with the conditions for the grant.
             278          (4) Grants and programs under Subsections (1) and (2) may be administered using a
             279      rebate program.
             280          (5) Grants issued under this section may not exceed the actual cost of the project.
             281          Section 8. Section 19-2-204 is enacted to read:
             282          19-2-204. Duties and authorities -- Rulemaking.
             283          (1) The board may, by following the procedures and requirements of Title 63G,
             284      Chapter 3, Utah Administrative Rulemaking Act, make rules:
             285          (a) specifying the amount of money to be dedicated annually for grants;
             286          (b) specifying criteria the director shall consider in prioritizing and awarding grants,
             287      including:
             288          (i) a preference for awarding a grant to an individual who has already secured some
             289      other source of funding; and
             290          (ii) a limitation on the types of vehicles that are eligible for funds;
             291          (c) specifying the terms of a grant or exchange under Subsections 19-2-203 (2), (3), and
             292      (4);
             293          (d) specifying the procedures to be used in the grant and exchange programs authorized
             294      in Subsections 19-2-203 (2), (3), and (5); and
             295          (e) requiring all grant applicants to apply on forms provided by the division.
             296          (2) The division shall:
             297          (a) administer funds to encourage vehicle and equipment owners and operators to
             298      reduce emissions from vehicles and equipment;
             299          (b) provide forms for application for a grant or exchange under Subsection 19-2-203 (2)
             300      or (3); and
             301          (c) provide information about which vehicles, engines, or equipment are certified and
             302      which technology is verified as provided in this part.
             303          (3) The division may inspect vehicles, equipment, or technology for which a grant was
             304      made to ensure compliance with the terms of the grant.
             305          Section 9. Appropriation.
             306          Under the terms and conditions of Title 63J, Chapter 1, Budgetary Procedures Act, the


             307      following sums of money are appropriated from resources not otherwise appropriated, or
             308      reduced from amounts previously appropriated, out of the funds or fund accounts indicated for
             309      the fiscal year beginning July 1, 2014 and ending June 30, 2015. These are in addition to
             310      amounts previously appropriated for fiscal year 2015.
             311          To the Department of Environmental Quality - Clean Air Retrofit, Replacement, and
             312          Off-road Technology
             313              From General Fund S. , One-time .S
$200,000

             314              Schedule of Programs:
             315                  Clean Air Retrofit, Replacement, and
             316                  Off-road Technology                $200,000
             317          The Legislature intends that the appropriation under this section is H. [ ongoing, subject to
             318      availability of funds, for fiscal years 2015, 2016, and 2017,
] .H
to be used by the Division of Air
             319      Quality to provide grants for clean air projects, consistent with Title 19, Chapter 2, Part 2,
             320      Clean Air Retrofit, Replacement, and Off-road Technology Program.




Legislative Review Note
    as of 1-16-14 1:03 PM


Office of Legislative Research and General Counsel


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