1     
ENERGY EFFICIENT VEHICLE TAX CREDIT FOR

2     
MOTORCYCLES

3     
2015 GENERAL SESSION

4     
STATE OF UTAH

5     
Chief Sponsor: Margaret Dayton

6     
House Sponsor: Keith Grover

7     

8     LONG TITLE
9     General Description:
10          This bill enacts an energy efficient vehicle tax credit for certain motorcycles.
11     Highlighted Provisions:
12          This bill:
13          ▸     defines terms;
14          ▸     enacts an energy efficient vehicle tax credit for certain motorcycles; and
15          ▸     makes technical and conforming changes.
16     Money Appropriated in this Bill:
17          None
18     Other Special Clauses:
19          This bill provides for retrospective operation.
20     Utah Code Sections Affected:
21     AMENDS:
22          59-7-605, as last amended by Laws of Utah 2014, Chapter 125
23          59-10-1009, as last amended by Laws of Utah 2014, Chapter 125
24     

25     Be it enacted by the Legislature of the state of Utah:
26          Section 1. Section 59-7-605 is amended to read:
27          59-7-605. Definitions -- Tax credits related to energy efficient vehicles.
28          (1) As used in this section:
29          (a) "Air quality standards" means that a vehicle's emissions are equal to or cleaner than
30     the standards established in bin 4 in Table S04-1, of 40 C.F.R. 86.1811-04(c)(6).
31          (b) "Board" means the Air Quality Board created under Title 19, Chapter 2, Air
32     Conservation Act.
33          (c) "Certified by the board" means that:
34          (i) a motor vehicle on which conversion equipment has been installed meets the
35     following criteria:
36          (A) before the installation of conversion equipment, the vehicle does not exceed the
37     emission cut points for a transient test driving cycle, as specified in 40 C.F.R. Part 51,
38     Appendix E to Subpart S, or an equivalent test for the make, model, and year of the vehicle;
39     and
40          (B) as a result of the installation of conversion equipment on the motor vehicle, the
41     motor vehicle has reduced emissions; or
42          (ii) special mobile equipment on which conversion equipment has been installed has
43     reduced emissions.
44          (d) "Clean fuel grant" means a grant awarded under Title 19, Chapter 1, Part 4, Clean
45     Fuels and Vehicle Technology Program Act, for reimbursement of a portion of the incremental
46     cost of an OEM vehicle or the cost of conversion equipment.
47          (e) "Conversion equipment" means equipment [referred to] described in Subsection
48     [(2)(c) or (d)] (2)(d) or (e).
49          (f) "OEM vehicle" has the same meaning as in Section 19-1-402.
50          (g) "Original purchase" means the purchase of a vehicle that has never been titled or
51     registered and has been driven less than 7,500 miles.
52          (h) "Qualifying electric motorcycle" means a vehicle that:
53          (i) has a seat or saddle for the use of the rider;
54          (ii) is designed to travel with not more than three wheels in contact with the ground;
55          (iii) may lawfully be operated on a freeway, as defined in Section 41-6a-102;
56          (iv) is not fueled by natural gas;
57          (v) is fueled by electricity only; and
58          (vi) is an OEM vehicle except that the vehicle is fueled by a fuel described in
59     Subsection (1)(h)(v).
60          [(h)] (i) "Qualifying electric vehicle" means a vehicle that:
61          (i) meets air quality standards;
62          (ii) is not fueled by natural gas;
63          (iii) is fueled by electricity only; and
64          (iv) is an OEM vehicle except that the vehicle is fueled by a fuel described in
65     Subsection (1)[(h)](i)(iii).
66          [(i)] (j) "Qualifying plug-in hybrid vehicle" means a vehicle that:
67          (i) meets air quality standards;
68          (ii) is not fueled by natural gas or propane;
69          (iii) has a battery capacity that meets or exceeds the battery capacity described in
70     Section 30D(b)(3), Internal Revenue Code; and
71          (iv) is fueled by a combination of electricity and:
72          (A) diesel fuel;
73          (B) gasoline; or
74          (C) a mixture of gasoline and ethanol.
75          [(j)] (k) "Reduced emissions" means:
76          (i) for purposes of a motor vehicle on which conversion equipment has been installed,
77     that the motor vehicle's emissions of regulated pollutants, when operating on a fuel listed in
78     Subsection (2)[(d)](e)(i) or (ii), is less than the emissions were before the installation of the
79     conversion equipment, as demonstrated by:
80          (A) certification of the conversion equipment by the federal Environmental Protection
81     Agency or by a state that has certification standards recognized by the board;
82          (B) testing the motor vehicle, before and after installation of the conversion equipment,
83     in accordance with 40 C.F.R. Part 86, Control of Emissions from New and In-use Highway
84     Vehicles and Engines, using all fuel the motor vehicle is capable of using;
85          (C) for a retrofit natural gas vehicle that is retrofit in accordance with Section
86     19-1-406, testing that as a result of the retrofit, the retrofit natural gas vehicle satisfies the
87     emission standards applicable under Section 19-1-406; or
88          (D) any other test or standard recognized by board rule, made in accordance with Title
89     63G, Chapter 3, Utah Administrative Rulemaking Act; or
90          (ii) for purposes of special mobile equipment on which conversion equipment has been
91     installed, that the special mobile equipment's emissions of regulated pollutants, when operating
92     on [fuels] a fuel listed in Subsection (2)[(d)](e)(i) or (ii), is less than the emissions were before
93     the installation of conversion equipment, as demonstrated by:
94          (A) certification of the conversion equipment by the federal Environmental Protection
95     Agency or by a state that has certification standards recognized by the board; or
96          (B) any other test or standard recognized by board rule, made in accordance with Title
97     63G, Chapter 3, Utah Administrative Rulemaking Act.
98          [(k)] (l) "Special mobile equipment":
99          (i) means any mobile equipment or vehicle that is not designed or used primarily for
100     the transportation of persons or property; and
101          (ii) includes construction or maintenance equipment.
102          (2) For the taxable year beginning on or after January 1, 2015, but beginning on or
103     before December 31, 2015, a taxpayer may claim a tax credit against tax otherwise due under
104     this chapter or Chapter 8, Gross Receipts Tax on Certain Corporations Not Required to Pay
105     Corporate Franchise or Income Tax Act, in an amount equal to:
106          (a) (i) for the original purchase of a new qualifying electric vehicle that is registered in
107     this state, the lesser of:
108          (A) $1,500; or
109          (B) 35% of the purchase price of the vehicle; or
110          (ii) for the original purchase of a new qualifying plug-in hybrid vehicle that is
111     registered in this state, $1,000;
112          (b) for the original purchase of a new vehicle fueled by natural gas or propane that is
113     registered in this state, the lesser of:
114          (i) $1,500; or
115          (ii) 35% of the purchase price of the vehicle;
116          (c) for the original purchase of a new qualifying electric motorcycle that is registered in
117     this state, the lesser of:
118          (i) $750; or
119          (ii) 35% of the purchase price of the vehicle;
120          [(c)] (d) 50% of the cost of equipment for conversion, if certified by the board, of a
121     motor vehicle registered in this state minus the amount of any clean fuel grant received, up to a
122     maximum tax credit of $1,500 per motor vehicle, if the motor vehicle is to:
123          (i) be fueled by propane, natural gas, or electricity;
124          (ii) be fueled by other fuel the board determines annually on or before July 1 to be at
125     least as effective in reducing air pollution as fuels under Subsection (2)[(c)](d)(i); or
126          (iii) meet the federal clean-fuel vehicle standards in the federal Clean Air Act
127     Amendments of 1990, 42 U.S.C. Sec. 7521 et seq.;
128          [(d)] (e) 50% of the cost of equipment for conversion, if certified by the board, of a
129     special mobile equipment engine minus the amount of any clean fuel grant received, up to a
130     maximum tax credit of $1,000 per special mobile equipment engine, if the special mobile
131     equipment is to be fueled by:
132          (i) propane, natural gas, or electricity; or
133          (ii) other fuel the board determines annually on or before July 1 to be:
134          (A) at least as effective in reducing air pollution as the fuels under Subsection
135     (2)[(d)](e)(i); or
136          (B) substantially more effective in reducing air pollution than the fuel for which the
137     engine was originally designed; and
138          [(e)] (f) for a lease of a vehicle described in Subsection (2)(a) [or], (b), or (c), an
139     amount equal to the product of:
140          (i) the amount of tax credit the taxpayer would otherwise qualify to claim under
141     Subsection (2)(a) [or], (b), or (c) had the taxpayer purchased the vehicle, except that the
142     purchase price described in Subsection (2)(a)(i)(B) [or], (2)(b)(ii), or (2)(c)(ii) is considered to
143     be the value of the vehicle at the beginning of the lease; and
144          (ii) a percentage calculated by:
145          (A) determining the difference between the value of the vehicle at the beginning of the
146     lease, as stated in the lease agreement, and the value of the vehicle at the end of the lease, as
147     stated in the lease agreement; and
148          (B) dividing the difference determined under Subsection (2)[(e)](f)(ii)(A) by the value
149     of the vehicle at the beginning of the lease, as stated in the lease agreement.
150          (3) (a) The board shall:
151          (i) determine the amount of tax credit a taxpayer is allowed under this section; and
152          (ii) provide the taxpayer with a written certification of the amount of tax credit the
153     taxpayer is allowed under this section.
154          (b) A taxpayer shall provide proof of the purchase or lease of an item for which a tax
155     credit is allowed under this section by:
156          (i) providing proof to the board in the form the board requires by rule;
157          (ii) receiving a written statement from the board acknowledging receipt of the proof;
158     and
159          (iii) retaining the written statement described in Subsection (3)(b)(ii).
160          (c) A taxpayer shall retain the written certification described in Subsection (3)(a)(ii).
161          (4) Except as provided by Subsection (5), the tax credit under this section is allowed
162     only:
163          (a) against a tax owed under this chapter or Chapter 8, Gross Receipts Tax on Certain
164     Corporations Not Required to Pay Corporate Franchise or Income Tax Act, in the taxable year
165     by the taxpayer;
166          (b) for the taxable year in which a vehicle described in Subsection (2)(a) [or], (b), or
167     (c) is purchased, a vehicle described in Subsection (2)[(e)](f) is leased, or conversion
168     equipment described in Subsection (2)[(c)](d) or [(d)] (e) is installed; and
169          (c) once per vehicle.
170          (5) A taxpayer may not assign a tax credit under this section to another person.
171          (6) If the amount of a tax credit claimed by a taxpayer under this section exceeds the
172     taxpayer's tax liability under this chapter or Chapter 8, Gross Receipts Tax on Certain
173     Corporations Not Required to Pay Corporate Franchise or Income Tax Act, for a taxable year,
174     the amount of the tax credit exceeding the tax liability may be carried forward for a period that
175     does not exceed the next five taxable years.
176          (7) In accordance with any rules prescribed by the commission under Subsection (8),
177     the commission shall transfer at least annually from the General Fund into the Education Fund
178     the amount by which the amount of tax credit claimed under this section for a taxable year
179     exceeds $500,000.
180          (8) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
181     commission may make rules for making a transfer from the General Fund into the Education
182     Fund as required by Subsection (7).
183          Section 2. Section 59-10-1009 is amended to read:
184          59-10-1009. Definitions -- Tax credits related to energy efficient vehicles.
185          (1) As used in this section:
186          (a) "Air quality standards" means that a vehicle's emissions are equal to or cleaner than
187     the standards established in bin 4 in Table S04-1, of 40 C.F.R. 86.1811-04(c)(6).
188          (b) "Board" means the Air Quality Board created in Title 19, Chapter 2, Air
189     Conservation Act.
190          (c) "Certified by the board" means that:
191          (i) a motor vehicle on which conversion equipment has been installed meets the
192     following criteria:
193          (A) before the installation of conversion equipment, the vehicle does not exceed the
194     emission cut points for a transient test driving cycle, as specified in 40 C.F.R. Part 51,
195     Appendix E to Subpart S, or an equivalent test for the make, model, and year of the vehicle;
196     and
197          (B) as a result of the installation of conversion equipment on the motor vehicle, the
198     motor vehicle has reduced emissions; or
199          (ii) special mobile equipment on which conversion equipment has been installed has
200     reduced emissions.
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] described in Subsection
205     (2)[(c)](d) or [(d)] (e).
206          (f) "OEM vehicle" has the same meaning as in Section 19-1-402.
207          (g) "Original purchase" means the purchase of a vehicle that has never been titled or
208     registered and has been driven less than 7,500 miles.
209          (h) "Qualifying electric motorcycle" means a vehicle that:
210          (i) has a seat or saddle for the use of the rider;
211          (ii) is designed to travel with not more than three wheels in contact with the ground;
212          (iii) may lawfully be operated on a freeway, as defined in Section 41-6a-102;
213          (iv) is not fueled by natural gas;
214          (v) is fueled by electricity only; and
215          (vi) is an OEM vehicle except that the vehicle is fueled by a fuel described in
216     Subsection (1)(h)(v).
217          [(h)] (i) "Qualifying electric vehicle" means a vehicle that:
218          (i) meets air quality standards;
219          (ii) is not fueled by natural gas;
220          (iii) is fueled by electricity only; and
221          (iv) is an OEM vehicle except that the vehicle is fueled by a fuel described in
222     Subsection (1)[(h)](i)(iii).
223          [(i)] (j) "Qualifying plug-in hybrid vehicle" means a vehicle that:
224          (i) meets air quality standards;
225          (ii) is not fueled by natural gas or propane;
226          (iii) has a battery capacity that meets or exceeds the battery capacity described in
227     Section 30D(b)(3), Internal Revenue Code; and
228          (iv) is fueled by a combination of electricity and:
229          (A) diesel fuel;
230          (B) gasoline; or
231          (C) a mixture of gasoline and ethanol.
232          [(j)] (k) "Reduced emissions" means:
233          (i) for purposes of a motor vehicle on which conversion equipment has been installed,
234     that the motor vehicle's emissions of regulated pollutants, when operating on a fuel listed in
235     Subsection (2)[(d)](e)(i) or (ii), is less than the emissions were before the installation of the
236     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;
239          (B) testing the motor vehicle, before and after installation of the conversion equipment,
240     in accordance with 40 C.F.R. Part 86, Control of Emissions from New and In-use Highway
241     Vehicles and Engines, using all fuel the motor vehicle is capable of using;
242          (C) for a retrofit natural gas vehicle that is retrofit in accordance with Section
243     19-1-406, testing that as a result of the retrofit, the retrofit natural gas vehicle satisfies the
244     emission standards applicable under Section 19-1-406; or
245          (D) any other test or standard recognized by board rule, made in accordance with Title
246     63G, Chapter 3, Utah Administrative Rulemaking Act; or
247          (ii) for purposes of special mobile equipment on which conversion equipment has been
248     installed, that the special mobile equipment's emissions of regulated pollutants, when operating
249     on [fuels] a fuel listed in Subsection (2)[(d)](e)(i) or (ii), is less than the emissions were before
250     the installation of conversion equipment, as demonstrated by:
251          (A) certification of the conversion equipment by the federal Environmental Protection
252     Agency or by a state that has certification standards recognized by the board; or
253          (B) any other test or standard recognized by board rule, made in accordance with Title
254     63G, Chapter 3, Utah Administrative Rulemaking Act.
255          [(k)] (l) "Special mobile equipment":
256          (i) means any mobile equipment or vehicle not designed or used primarily for the
257     transportation of persons or property; and
258          (ii) includes construction or maintenance equipment.
259          (2) For the taxable year beginning on or after January 1, 2015, but beginning on or
260     before December 31, 2015, a claimant, estate, or trust may claim a nonrefundable tax credit
261     against tax otherwise due under this chapter in an amount equal to:
262          (a) (i) for the original purchase of a new qualifying electric vehicle that is registered in
263     this state, the lesser of:
264          (A) $1,500; or
265          (B) 35% of the purchase price of the vehicle; or
266          (ii) for the original purchase of a new qualifying plug-in hybrid vehicle that is
267     registered in this state, $1,000;
268          (b) for the original purchase of a new vehicle fueled by natural gas or propane that is
269     registered in this state, the lesser of:
270          (i) $1,500; or
271          (ii) 35% of the purchase price of the vehicle;
272          (c) for the original purchase of a new qualifying electric motorcycle that is registered in
273     this state, the lesser of:
274          (i) $750; or
275          (ii) 35% of the purchase price of the vehicle;
276          [(c)] (d) 50% of the cost of equipment for conversion, if certified by the board, of a
277     motor vehicle registered in this state minus the amount of any clean fuel conversion grant
278     received, up to a maximum tax credit of $1,500 per vehicle, if the motor vehicle:
279          (i) is to be fueled by propane, natural gas, or electricity;
280          (ii) is to be fueled by other fuel the board determines annually on or before July 1 to be
281     at least as effective in reducing air pollution as fuels under Subsection (2)[(c)](d)(i); or
282          (iii) will meet the federal clean fuel vehicle standards in the federal Clean Air Act
283     Amendments of 1990, 42 U.S.C. Sec. 7521 et seq.;
284          [(d)] (e) 50% of the cost of equipment for conversion, if certified by the board, of a
285     special mobile equipment engine minus the amount of any clean fuel conversion grant
286     received, up to a maximum tax credit of $1,000 per special mobile equipment engine, if the
287     special mobile equipment is to be fueled by:
288          (i) propane, natural gas, or electricity; or
289          (ii) other fuel the board determines annually on or before July 1 to be:
290          (A) at least as effective in reducing air pollution as the fuels under Subsection
291     (2)[(d)](e)(i); or
292          (B) substantially more effective in reducing air pollution than the fuel for which the
293     engine was originally designed; and
294          [(e)] (f) for a lease of a vehicle described in Subsection (2)(a) [or], (b), or (c), an
295     amount equal to the product of:
296          (i) the amount of tax credit the claimant, estate, or trust would otherwise qualify to
297     claim under Subsection (2)(a) [or], (b), or (c) had the claimant, estate, or trust purchased the
298     vehicle, except that the purchase price described in Subsection (2)(a)(i)(B) [or], (2)(b)(ii), or
299     (2)(c)(ii) is considered to be the value of the vehicle at the beginning of the lease; and
300          (ii) a percentage calculated by:
301          (A) determining the difference between the value of the vehicle at the beginning of the
302     lease, as stated in the lease agreement, and the value of the vehicle at the end of the lease, as
303     stated in the lease agreement; and
304          (B) dividing the difference determined under Subsection (2)[(e)](f)(ii)(A) by the value
305     of the vehicle at the beginning of the lease, as stated in the lease agreement.
306          (3) (a) The board shall:
307          (i) determine the amount of tax credit a claimant, estate, or trust is allowed under this
308     section; and
309          (ii) provide the claimant, estate, or trust with a written certification of the amount of
310     tax credit the claimant, estate, or trust is allowed under this section.
311          (b) A claimant, estate, or trust shall provide proof of the purchase or lease of an item
312     for which a tax credit is allowed under this section by:
313          (i) providing proof to the board in the form the board requires by rule;
314          (ii) receiving a written statement from the board acknowledging receipt of the proof;
315     and
316          (iii) retaining the written statement described in Subsection (3)(b)(ii).
317          (c) A claimant, estate, or trust shall retain the written certification described in
318     Subsection (3)(a)(ii).
319          (4) Except as provided by Subsection (5), the tax credit under this section is allowed
320     only:
321          (a) against a tax owed under this chapter in the taxable year by the claimant, estate, or
322     trust;
323          (b) for the taxable year in which a vehicle described in Subsection (2)(a) [or], (b), or
324     (c) is purchased, a vehicle described in Subsection (2)[(e)](f) is leased, or conversion
325     equipment described in Subsection (2)[(c)](d) or [(d)] (e) is installed; and
326          (c) once per vehicle.
327          (5) A claimant, estate, or trust may not assign a tax credit under this section to another
328     person.
329          (6) If the amount of a tax credit claimed by a claimant, estate, or trust under this
330     section exceeds the claimant's, estate's, or trust's tax liability under this chapter for a taxable
331     year, the amount of the tax credit exceeding the tax liability may be carried forward for a period
332     that does not exceed the next five taxable years.
333          (7) In accordance with any rules prescribed by the commission under Subsection (8),
334     the commission shall transfer at least annually from the General Fund into the Education Fund
335     the amount by which the amount of tax credit claimed under this section for a taxable year
336     exceeds $500,000.
337          (8) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
338     commission may make rules for making a transfer from the General Fund into the Education
339     Fund as required by Subsection (7).
340          Section 3. Retrospective operation.
341          This bill has retrospective operation for a taxable year beginning on or after January 1,
342     2015.




Legislative Review Note
     as of 2-4-15 11:57 AM

Office of Legislative Research and General Counsel