1     
CLEAN FUEL AMENDMENTS AND REBATES

2     
2015 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Stephen G. Handy

5     
Senate Sponsor: Todd Weiler

6     

7     LONG TITLE
8     General Description:
9          This bill creates the Conversion to Alternative Fuel Grant Program and extends tax
10     credits for energy efficient vehicles.
11     Highlighted Provisions:
12          This bill:
13          ▸     defines terms;
14          ▸     amends definitions;
15          ▸     authorizes the Department of Environmental Quality to make grants from the Clean
16     Fuels and Vehicle Technology Fund to a person who installs conversion equipment
17     on an eligible vehicle;
18          ▸     describes the process for a person to apply for a grant to install conversion
19     equipment on an eligible vehicle;
20          ▸     describes the amount of grant money the director of the Division of Air Quality may
21     award to a person who installs conversion equipment on an eligible vehicle;
22          ▸     grants rulemaking authority to the Air Quality Board;
23          ▸     extends tax credits for energy efficient vehicles; and
24          ▸     makes technical changes.
25     Money Appropriated in this Bill:
26          None
27     Other Special Clauses:
28          None
29     Utah Code Sections Affected:

30     AMENDS:
31          19-1-403, as last amended by Laws of Utah 2014, Chapter 295
32          59-7-605, as last amended by Laws of Utah 2014, Chapter 125
33          59-10-1009, as last amended by Laws of Utah 2014, Chapter 125
34     ENACTS:
35          19-2-301, Utah Code Annotated 1953
36          19-2-302, Utah Code Annotated 1953
37          19-2-303, Utah Code Annotated 1953
38          19-2-304, Utah Code Annotated 1953
39          19-2-305, Utah Code Annotated 1953
40     

41     Be it enacted by the Legislature of the state of Utah:
42          Section 1. Section 19-1-403 is amended to read:
43          19-1-403. Clean Fuels and Vehicle Technology Fund -- Contents -- Loans or
44     grants made with fund money.
45          (1) (a) There is created a revolving fund known as the Clean Fuels and Vehicle
46     Technology Fund.
47          (b) The fund consists of:
48          (i) appropriations to the fund;
49          (ii) other public and private contributions made under Subsection (1)(c);
50          (iii) interest earnings on cash balances; and
51          (iv) all money collected for loan repayments and interest on loans.
52          (c) The department may accept contributions from other public and private sources for
53     deposit into the fund.
54          (2) (a) The department may make a loan or a grant with money available in the fund
55     [for]:
56          (i) for the conversion of a private sector business vehicle or a government vehicle to
57     use a clean fuel, if certified by the Air Quality Board under Subsection 19-1-405(1)(a); [or]

58          (ii) for the purchase of an OEM vehicle for use as a private sector business vehicle or
59     government vehicle[.]; or
60          (iii) to a person who installs conversion equipment on an eligible vehicle, as described
61     in Sections 19-2-301 through 19-2-304.
62          (b) The amount of a loan for any vehicle under Subsection (2)(a) may not exceed:
63          (i) the actual cost of the vehicle conversion;
64          (ii) the incremental cost of purchasing the OEM vehicle; or
65          (iii) the cost of purchasing the OEM vehicle if there is no documented incremental
66     cost.
67          (c) The amount of a grant for any vehicle under Subsection (2)(a) may not exceed:
68          (i) 50% of the actual cost of the vehicle conversion minus the amount of any tax credit
69     claimed under Section 59-7-605 or 59-10-1009 for the vehicle for which a grant is requested;
70     or
71          (ii) 50% of the incremental cost of purchasing an OEM vehicle minus the amount of
72     any tax credit claimed under Section 59-7-605 or 59-10-1009 for the vehicle for which a grant
73     is requested.
74          (d) (i) Subject to the availability of money in the fund, the department may make a loan
75     or grant for the purchase of vehicle refueling equipment for a private sector business vehicle or
76     a government vehicle.
77          (ii) The maximum amount loaned or granted per installation of refueling equipment
78     may not exceed the actual cost of the refueling equipment.
79          (3) The department may:
80          (a) establish an application fee for a loan or grant from the fund by following the
81     procedures and requirements of Section 63J-1-504; and
82          (b) reimburse itself for the costs incurred in administering the fund from:
83          (i) the fund; or
84          (ii) application fees established under Subsection (3)(a).
85          (4) (a) The fund balance may not exceed $10,000,000.

86          (b) Interest on cash balances and repayment of loans in excess of the amount necessary
87     to maintain the fund balance at $10,000,000 shall be deposited in the General Fund.
88          (5) (a) Loans made from money in the fund shall be supported by loan documents
89     evidencing the intent of the borrower to repay the loan.
90          (b) The original loan documents shall be filed with the Division of Finance and a copy
91     shall be filed with the department.
92          Section 2. Section 19-2-301 is enacted to read:
93     
Part 3. Conversion to Alternative Fuel Grant Program

94          19-2-301. Title.
95          This part is known as the "Conversion to Alternative Fuel Grant Program."
96          Section 3. Section 19-2-302 is enacted to read:
97          19-2-302. Definitions.
98          As used in this part:
99          (1) "Air quality standards" means vehicle emission standards equal to or greater than
100     the standards established in bin 4 in Table S04-1 of 40 C.F.R. 86.1811-04(c)(6).
101          (2) "Alternative fuel" means:
102          (a) propane, natural gas, or electricity; or
103          (b) other fuel that the board determines, by rule, to be:
104          (i) at least as effective in reducing air pollution as the fuels listed in Subsection (2)(a);
105     or
106          (ii) substantially more effective in reducing air pollution as the fuel for which the
107     engine was originally designed.
108          (3) "Board" means the Air Quality Board.
109          (4) "Clean fuel grant" means a grant awarded under Title 19, Chapter 1, Part 4, Clean
110     Fuels and Vehicle Technology Program Act, for reimbursement for a portion of the incremental
111     cost of an OEM vehicle or the cost of conversion equipment.
112          (5) "Conversion equipment" means equipment designed to:
113          (a) allow an eligible vehicle to operate on an alternative fuel; and

114          (b) reduce an eligible vehicle's emissions of regulated pollutants, as demonstrated by:
115          (i) certification of the conversion equipment by the Environmental Protection Agency
116     or by a state or country that has certification standards that are recognized, by rule, by the
117     board;
118          (ii) testing the eligible vehicle, before and after the installation of the equipment, in
119     accordance with 40 C.F.R. Part 86, Control of Emissions from New and In-Use Highway
120     Vehicles and Engines, using all fuel the motor vehicle is capable of using;
121          (iii) for a retrofit natural gas vehicle that is retrofit in accordance with Section
122     19-1-406, satisfying the emission standards described in Section 19-1-406; or
123          (iv) any other test or standard recognized by board rule, made in accordance with Title
124     63G, Chapter 3, Utah Administrative Rulemaking Act.
125          (6) "Cost" means the total reasonable cost of a conversion kit and the paid labor, if any,
126     required to install it.
127          (7) "Director" means the director of the Division of Air Quality.
128          (8) "Division" means the Division of Air Quality, created in Subsection 19-1-105(1)(a).
129          (9) "Eligible vehicle" means a:
130          (a) commercial vehicle, as defined in Section 41-1a-102;
131          (b) farm tractor, as defined in Section 41-1a-102; or
132          (c) motor vehicle, as defined in Section 41-1a-102.
133          Section 4. Section 19-2-303 is enacted to read:
134          19-2-303. Grants and programs -- Conditions.
135          (1) The director may make grants to a person who installs conversion equipment on an
136     eligible vehicle as described in this part.
137          (2) A person who installs conversion equipment on an eligible vehicle:
138          (a) may apply to the division for a grant to offset the cost of installation; and
139          (b) shall pass along any savings on the cost of conversion equipment to the owner of
140     the eligible vehicle being converted in the amount of grant money received.
141          (3) As a condition for receiving the grant, a person who installs conversion equipment

142     shall agree to:
143          (a) provide information to the division about the eligible vehicle to be converted with
144     the grant proceeds;
145          (b) allow inspections by the division to ensure compliance with the terms of the grant;
146     and
147          (c) comply with the conditions for the grant.
148          (4) A grant issued under this section may not exceed the lesser of 50% of the cost of
149     the conversion system and associated labor, or $2,500, per converted eligible vehicle.
150          Section 5. Section 19-2-304 is enacted to read:
151          19-2-304. Duties and authorities -- Rulemaking.
152          (1) The board may, by following the procedures and requirements of Title 63G,
153     Chapter 3, Utah Administrative Rulemaking Act, make rules:
154          (a) specifying the amount of money to be dedicated annually for grants under this part;
155          (b) specifying criteria the director shall consider in prioritizing and awarding grants,
156     including a limitation on the types of vehicles that are eligible for funds;
157          (c) specifying the minimum qualifications of a person who:
158          (i) installs conversion equipment on an eligible vehicle; and
159          (ii) receives a grant from the division;
160          (d) specifying the terms of a grant; and
161          (e) requiring all grant applicants to apply on forms provided by the division.
162          (2) The division shall:
163          (a) administer funds to encourage eligible vehicle owners to reduce emissions from
164     eligible vehicles; and
165          (b) provide information about which conversion technology meets the requirements of
166     this part.
167          (3) The division may inspect vehicles for which a grant was made to ensure
168     compliance with the terms of the grant.
169          Section 6. Section 19-2-305 is enacted to read:

170          19-2-305. Limitation on applying for a tax credit.
171          An owner of an eligible vehicle who receives the savings on the cost of conversion
172     equipment, as described in Subsection 19-2-303(2)(b), may not claim a tax credit for the
173     conversion under Section 59-7-605 or 59-10-1009 unless the savings are less than the tax credit
174     authorized by those sections, in which case the owner may claim a tax credit in the amount of
175     the difference.
176          Section 7. Section 59-7-605 is amended to read:
177          59-7-605. Definitions -- Tax credits related to energy efficient vehicles.
178          (1) As used in this section:
179          (a) "Air quality standards" means that a vehicle's emissions are equal to or cleaner than
180     the standards established in bin 4 in Table S04-1, of 40 C.F.R. 86.1811-04(c)(6).
181          (b) "Board" means the Air Quality Board created under Title 19, Chapter 2, Air
182     Conservation Act.
183          (c) "Certified by the board" means that:
184          (i) a motor vehicle on which conversion equipment has been installed meets the
185     following criteria:
186          (A) before the installation of conversion equipment, the vehicle does not exceed the
187     emission cut points for a transient test driving cycle, as specified in 40 C.F.R. Part 51,
188     Appendix E to Subpart S, or an equivalent test for the make, model, and year of the vehicle;
189     and
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 has
193     reduced emissions.
194          (d) "Clean fuel grant" means a grant awarded:
195          (i) under Title 19, Chapter 1, Part 4, Clean Fuels and Vehicle Technology Program
196     Act, for reimbursement of a portion of the incremental cost of an OEM vehicle or the cost of
197     conversion equipment[.]; or

198          (ii) under Title 19, Chapter 2, Part 3, Conversion to Alternative Fuel Grant Program.
199          (e) "Conversion equipment" means equipment referred to in Subsection (2)(c) or (d).
200          (f) "OEM vehicle" has the same meaning as in Section 19-1-402.
201          (g) "Original purchase" means the purchase of a vehicle that has never been titled or
202     registered and has been driven less than 7,500 miles.
203          (h) "Qualifying electric vehicle" means a vehicle that:
204          (i) meets air quality standards;
205          (ii) is not fueled by natural gas;
206          (iii) is fueled by electricity only; and
207          (iv) is an OEM vehicle except that the vehicle is fueled by a fuel described in
208     Subsection (1)(h)(iii).
209          (i) "Qualifying plug-in hybrid vehicle" means a vehicle that:
210          (i) meets air quality standards;
211          (ii) is not fueled by natural gas or propane;
212          (iii) has a battery capacity that meets or exceeds the battery capacity described in
213     Section 30D(b)(3), Internal Revenue Code; and
214          (iv) is fueled by a combination of electricity and:
215          (A) diesel fuel;
216          (B) gasoline; or
217          (C) a mixture of gasoline and ethanol.
218          (j) "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)(d)(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          (k) "Special mobile equipment":
242          (i) means any mobile equipment or vehicle that is not designed or used primarily for
243     the transportation of persons or property; and
244          (ii) includes construction or maintenance equipment.
245          (2) For the taxable [year] years beginning on or after January 1, 2015, but beginning on
246     or before December 31, [2015] 2016, a taxpayer may claim a tax credit against tax otherwise
247     due under this chapter or Chapter 8, Gross Receipts Tax on Certain Corporations Not Required
248     to Pay Corporate Franchise or Income Tax Act, in an amount equal to:
249          (a) (i) for the original purchase of a new qualifying electric vehicle that is registered in
250     this state, the lesser of:
251          (A) $1,500; or
252          (B) 35% of the purchase price of the vehicle; or
253          (ii) for the original purchase of a new qualifying plug-in hybrid vehicle that is

254     registered in this state, $1,000;
255          (b) for the original purchase of a new vehicle fueled by natural gas or propane that is
256     registered in this state, the lesser of:
257          (i) $1,500; or
258          (ii) 35% of the purchase price of the vehicle;
259          (c) 50% of the cost of equipment for conversion, if certified by the board, of a motor
260     vehicle registered in this state minus the amount of any clean fuel grant received, up to a
261     maximum tax credit of $1,500 per motor vehicle, if the motor vehicle is to:
262          (i) be fueled by propane, natural gas, or electricity;
263          (ii) be fueled by other fuel the board determines annually on or before July 1 to be at
264     least as effective in reducing air pollution as fuels under Subsection (2)(c)(i); or
265          (iii) meet the federal clean-fuel vehicle standards in the federal Clean Air Act
266     Amendments of 1990, 42 U.S.C. Sec. 7521 et seq.;
267          (d) 50% of the cost of equipment for conversion, if certified by the board, of a special
268     mobile equipment engine minus the amount of any clean fuel grant received, up to a maximum
269     tax credit of $1,000 per special mobile equipment engine, if the special mobile equipment is to
270     be fueled by:
271          (i) propane, natural gas, or electricity; or
272          (ii) other fuel the board determines annually on or before July 1 to be:
273          (A) at least as effective in reducing air pollution as the fuels under Subsection (2)(d)(i);
274     or
275          (B) substantially more effective in reducing air pollution than the fuel for which the
276     engine was originally designed; and
277          (e) for a lease of a vehicle described in Subsection (2)(a) or (b), an amount equal to the
278     product of:
279          (i) the amount of tax credit the taxpayer would otherwise qualify to claim under
280     Subsection (2)(a) or (b) had the taxpayer purchased the vehicle, except that the purchase price
281     described in Subsection (2)(a)(i)(B) or (2)(b)(ii) is considered to be the value of the vehicle at

282     the beginning of the lease; and
283          (ii) a percentage calculated by:
284          (A) determining the difference between the value of the vehicle at the beginning of the
285     lease, as stated in the lease agreement, and the value of the vehicle at the end of the lease, as
286     stated in the lease agreement; and
287          (B) dividing the difference determined under Subsection (2)(e)(ii)(A) by the value of
288     the vehicle at the beginning of the lease, as stated in the lease agreement.
289          (3) (a) The board shall:
290          (i) determine the amount of tax credit a taxpayer is allowed under this section; and
291          (ii) provide the taxpayer with a written certification of the amount of tax credit the
292     taxpayer is allowed under this section.
293          (b) A taxpayer shall provide proof of the purchase or lease of an item for which a tax
294     credit is allowed under this section by:
295          (i) providing proof to the board in the form the board requires by rule;
296          (ii) receiving a written statement from the board acknowledging receipt of the proof;
297     and
298          (iii) retaining the written statement described in Subsection (3)(b)(ii).
299          (c) A taxpayer shall retain the written certification described in Subsection (3)(a)(ii).
300          (4) Except as provided by Subsection (5), the tax credit under this section is allowed
301     only:
302          (a) against a tax owed under this chapter or Chapter 8, Gross Receipts Tax on Certain
303     Corporations Not Required to Pay Corporate Franchise or Income Tax Act, in the taxable year
304     by the taxpayer;
305          (b) for the taxable year in which a vehicle described in Subsection (2)(a) or (b) is
306     purchased, a vehicle described in Subsection (2)(e) is leased, or conversion equipment
307     described in Subsection (2)(c) or (d) is installed; and
308          (c) once per vehicle.
309          (5) A taxpayer may not assign a tax credit under this section to another person.

310          (6) If the amount of a tax credit claimed by a taxpayer under this section exceeds the
311     taxpayer's tax liability under this chapter or Chapter 8, Gross Receipts Tax on Certain
312     Corporations Not Required to Pay Corporate Franchise or Income Tax Act, for a taxable year,
313     the amount of the tax credit exceeding the tax liability may be carried forward for a period that
314     does not exceed the next five taxable years.
315          (7) In accordance with any rules prescribed by the commission under Subsection (8),
316     the commission shall transfer at least annually from the General Fund into the Education Fund
317     the amount by which the amount of tax credit claimed under this section for a taxable year
318     exceeds $500,000.
319          (8) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
320     commission may make rules for making a transfer from the General Fund into the Education
321     Fund as required by Subsection (7).
322          Section 8. Section 59-10-1009 is amended to read:
323          59-10-1009. Definitions -- Tax credits related to energy efficient vehicles.
324          (1) As used in this section:
325          (a) "Air quality standards" means that a vehicle's emissions are equal to or cleaner than
326     the standards established in bin 4 in Table S04-1, of 40 C.F.R. 86.1811-04(c)(6).
327          (b) "Board" means the Air Quality Board created in Title 19, Chapter 2, Air
328     Conservation Act.
329          (c) "Certified by the board" means that:
330          (i) a motor vehicle on which conversion equipment has been installed meets the
331     following criteria:
332          (A) before the installation of conversion equipment, the vehicle does not exceed the
333     emission cut points for a transient test driving cycle, as specified in 40 C.F.R. Part 51,
334     Appendix E to Subpart S, or an equivalent test for the make, model, and year of the vehicle;
335     and
336          (B) as a result of the installation of conversion equipment on the motor vehicle, the
337     motor vehicle has reduced emissions; or

338          (ii) special mobile equipment on which conversion equipment has been installed has
339     reduced emissions.
340          (d) "Clean fuel grant" means a grant a claimant, estate, or trust receives under Title 19,
341     Chapter 1, Part 4, Clean Fuels and Vehicle Technology Program Act[,] or Title 19, Chapter 2,
342     Part 3, Conversion to Alternative Fuel Grant Program, for reimbursement of a portion of the
343     incremental cost of the OEM vehicle or the cost of conversion equipment.
344          (e) "Conversion equipment" means equipment referred to in Subsection (2)(c) or (d).
345          (f) "OEM vehicle" has the same meaning as in Section 19-1-402.
346          (g) "Original purchase" means the purchase of a vehicle that has never been titled or
347     registered and has been driven less than 7,500 miles.
348          (h) "Qualifying electric vehicle" means a vehicle that:
349          (i) meets air quality standards;
350          (ii) is not fueled by natural gas;
351          (iii) is fueled by electricity only; and
352          (iv) is an OEM vehicle except that the vehicle is fueled by a fuel described in
353     Subsection (1)(h)(iii).
354          (i) "Qualifying plug-in hybrid vehicle" means a vehicle that:
355          (i) meets air quality standards;
356          (ii) is not fueled by natural gas or propane;
357          (iii) has a battery capacity that meets or exceeds the battery capacity described in
358     Section 30D(b)(3), Internal Revenue Code; and
359          (iv) is fueled by a combination of electricity and:
360          (A) diesel fuel;
361          (B) gasoline; or
362          (C) a mixture of gasoline and ethanol.
363          (j) "Reduced emissions" means:
364          (i) for purposes of a motor vehicle on which conversion equipment has been installed,
365     that the motor vehicle's emissions of regulated pollutants, when operating on a fuel listed in

366     Subsection (2)(d)(i) or (ii), is less than the emissions were before the installation of the
367     conversion equipment, as demonstrated by:
368          (A) certification of the conversion equipment by the federal Environmental Protection
369     Agency or by a state that has certification standards recognized by the board;
370          (B) testing the motor vehicle, before and after installation of the conversion equipment,
371     in accordance with 40 C.F.R. Part 86, Control of Emissions from New and In-use Highway
372     Vehicles and Engines, using all fuel the motor vehicle is capable of using;
373          (C) for a retrofit natural gas vehicle that is retrofit in accordance with Section
374     19-1-406, testing that as a result of the retrofit, the retrofit natural gas vehicle satisfies the
375     emission standards applicable under Section 19-1-406; or
376          (D) any other test or standard recognized by board rule, made in accordance with Title
377     63G, Chapter 3, Utah Administrative Rulemaking Act; or
378          (ii) for purposes of special mobile equipment on which conversion equipment has been
379     installed, that the special mobile equipment's emissions of regulated pollutants, when operating
380     on fuels listed in Subsection (2)(d)(i) or (ii), is less than the emissions were before the
381     installation of conversion equipment, as demonstrated by:
382          (A) certification of the conversion equipment by the federal Environmental Protection
383     Agency or by a state that has certification standards recognized by the board; or
384          (B) any other test or standard recognized by board rule, made in accordance with Title
385     63G, Chapter 3, Utah Administrative Rulemaking Act.
386          (k) "Special mobile equipment":
387          (i) means any mobile equipment or vehicle not designed or used primarily for the
388     transportation of persons or property; and
389          (ii) includes construction or maintenance equipment.
390          (2) For the taxable [year] years beginning on or after January 1, 2015, but beginning on
391     or before December 31, [2015] 2016, a claimant, estate, or trust may claim a nonrefundable tax
392     credit against tax otherwise due under this chapter in an amount equal to:
393          (a) (i) for the original purchase of a new qualifying electric vehicle that is registered in

394     this state, the lesser of:
395          (A) $1,500; or
396          (B) 35% of the purchase price of the vehicle; or
397          (ii) for the original purchase of a new qualifying plug-in hybrid vehicle that is
398     registered in this state, $1,000;
399          (b) for the original purchase of a new vehicle fueled by natural gas or propane that is
400     registered in this state, the lesser of:
401          (i) $1,500; or
402          (ii) 35% of the purchase price of the vehicle;
403          (c) 50% of the cost of equipment for conversion, if certified by the board, of a motor
404     vehicle registered in this state minus the amount of any clean fuel [conversion] grant received,
405     up to a maximum tax credit of $1,500 per vehicle, if the motor vehicle:
406          (i) is to be fueled by propane, natural gas, or electricity;
407          (ii) is to be fueled by other fuel the board determines annually on or before July 1 to be
408     at least as effective in reducing air pollution as fuels under Subsection (2)(c)(i); or
409          (iii) will meet the federal clean fuel vehicle standards in the federal Clean Air Act
410     Amendments of 1990, 42 U.S.C. Sec. 7521 et seq.;
411          (d) 50% of the cost of equipment for conversion, if certified by the board, of a special
412     mobile equipment engine minus the amount of any clean fuel [conversion] grant received, up to
413     a maximum tax credit of $1,000 per special mobile equipment engine, if the special mobile
414     equipment is to be fueled by:
415          (i) propane, natural gas, or electricity; or
416          (ii) other fuel the board determines annually on or before July 1 to be:
417          (A) at least as effective in reducing air pollution as the fuels under Subsection (2)(d)(i);
418     or
419          (B) substantially more effective in reducing air pollution than the fuel for which the
420     engine was originally designed; and
421          (e) for a lease of a vehicle described in Subsection (2)(a) or (b), an amount equal to the

422     product of:
423          (i) the amount of tax credit the claimant, estate, or trust would otherwise qualify to
424     claim under Subsection (2)(a) or (b) had the claimant, estate, or trust purchased the vehicle,
425     except that the purchase price described in Subsection (2)(a)(i)(B) or (2)(b)(ii) is considered to
426     be the value of the vehicle at the beginning of the lease; and
427          (ii) a percentage calculated by:
428          (A) determining the difference between the value of the vehicle at the beginning of the
429     lease, as stated in the lease agreement, and the value of the vehicle at the end of the lease, as
430     stated in the lease agreement; and
431          (B) dividing the difference determined under Subsection (2)(e)(ii)(A) by the value of
432     the vehicle at the beginning of the lease, as stated in the lease agreement.
433          (3) (a) The board shall:
434          (i) determine the amount of tax credit a claimant, estate, or trust is allowed under this
435     section; and
436          (ii) provide the claimant, estate, or trust with a written certification of the amount of
437     tax credit the claimant, estate, or trust is allowed under this section.
438          (b) A claimant, estate, or trust shall provide proof of the purchase or lease of an item
439     for which a tax credit is allowed under this section by:
440          (i) providing proof to the board in the form the board requires by rule;
441          (ii) receiving a written statement from the board acknowledging receipt of the proof;
442     and
443          (iii) retaining the written statement described in Subsection (3)(b)(ii).
444          (c) A claimant, estate, or trust shall retain the written certification described in
445     Subsection (3)(a)(ii).
446          (4) Except as provided by Subsection (5), the tax credit under this section is allowed
447     only:
448          (a) against a tax owed under this chapter in the taxable year by the claimant, estate, or
449     trust;

450          (b) for the taxable year in which a vehicle described in Subsection (2)(a) or (b) is
451     purchased, a vehicle described in Subsection (2)(e) is leased, or conversion equipment
452     described in Subsection (2)(c) or (d) is installed; and
453          (c) once per vehicle.
454          (5) A claimant, estate, or trust may not assign a tax credit under this section to another
455     person.
456          (6) If the amount of a tax credit claimed by a claimant, estate, or trust under this
457     section exceeds the claimant's, estate's, or trust's tax liability under this chapter for a taxable
458     year, the amount of the tax credit exceeding the tax liability may be carried forward for a period
459     that does not exceed the next five taxable years.
460          (7) In accordance with any rules prescribed by the commission under Subsection (8),
461     the commission shall transfer at least annually from the General Fund into the Education Fund
462     the amount by which the amount of tax credit claimed under this section for a taxable year
463     exceeds $500,000.
464          (8) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
465     commission may make rules for making a transfer from the General Fund into the Education
466     Fund as required by Subsection (7).