This document includes Senate 2nd and 3rd Reading Floor Amendments incorporated into the bill on Wed, Mar 9, 2016 at 10:10 AM by lpoole.
This document includes House Committee Amendments incorporated into the bill on Thu, Mar 10, 2016 at 12:01 PM by cynthiahopkin.
Representative Stephen G. Handy proposes the following substitute bill:


1     
CLEAN FUEL CONVERSION AMENDMENTS

2     
2016 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 amends the Conversion to Alternative Fuel Grant Program.
10     Highlighted Provisions:
11          This bill:
12          ▸     creates the Conversion to Alternative Fuel Grant Program Fund;
13          ▸     authorizes the Department of Environmental Quality to make grants from the
14     Conversion to Alternative Fuel Grant Program Fund to a person who installs
15     conversion equipment on an eligible vehicle;
16          ▸     repeals tax credits for conversion equipment for vehicles; Ĥ→ and
17           [▸     extends tax credits for certain vehicles; and] ←Ĥ
18          ▸     makes technical changes.
19     Money Appropriated in this Bill:
20          This bill appropriates:
21          ▸     to the Conversion to Alternative Fuel Grant Program Fund, as a one-time
22     appropriation:
23               •     from the General Fund, Ŝ→ [$500,000] $150,000 ←Ŝ .
24     Other Special Clauses:
25          This bill provides a special effective date.
26     Utah Code Sections Affected:
27     AMENDS:
28          19-1-403, as last amended by Laws of Utah 2015, Chapter 381
29          19-2-302, as enacted by Laws of Utah 2015, Chapter 381
30          19-2-303, as enacted by Laws of Utah 2015, Chapter 381
31          19-2-304, as enacted by Laws of Utah 2015, Chapter 381
32          59-7-605, as last amended by Laws of Utah 2015, Chapters 381 and 439
33          59-10-1009, as last amended by Laws of Utah 2015, Chapters 381 and 439
34          63I-2-219, as last amended by Laws of Utah 2015, Chapter 258
35     ENACTS:
36          19-1-403.3, Utah Code Annotated 1953
37     

38     Be it enacted by the Legislature of the state of Utah:
39          Section 1. Section 19-1-403 is amended to read:
40          19-1-403. Clean Fuels and Vehicle Technology Fund -- Contents -- Loans or
41     grants made with fund money.
42          (1) (a) There is created a revolving fund known as the Clean Fuels and Vehicle
43     Technology Fund.
44          (b) The fund consists of:
45          (i) appropriations to the fund;
46          (ii) other public and private contributions made under Subsection (1)(c);
47          (iii) interest earnings on cash balances; and
48          (iv) all money collected for loan repayments and interest on loans.
49          (c) The department may accept contributions from other public and private sources for
50     deposit into the fund.
51          (2) (a) The department may make a loan or a grant with money available in the fund
52     for:
53          (i) [for] the conversion of a private sector business vehicle or a government vehicle to
54     use a clean fuel, if certified by the Air Quality Board under Subsection 19-1-405(1)(a); or
55          (ii) [for] the purchase of an OEM vehicle for use as a private sector business vehicle or
56     government vehicle[; or].
57          [(iii) to a person who installs conversion equipment on an eligible vehicle, as described
58     in Sections 19-2-301 through 19-2-304.]
59          (b) The amount of a loan for any vehicle under Subsection (2)(a) may not exceed:
60          (i) the actual cost of the vehicle conversion;
61          (ii) the incremental cost of purchasing the OEM vehicle; or
62          (iii) the cost of purchasing the OEM vehicle if there is no documented incremental
63     cost.
64          (c) The amount of a grant for any vehicle under Subsection (2)(a) may not exceed:
65          (i) 50% of the actual cost of the vehicle conversion minus the amount of any tax credit
66     claimed under Section 59-7-605 or 59-10-1009 for the vehicle for which a grant is requested;
67     or
68          (ii) 50% of the incremental cost of purchasing an OEM vehicle minus the amount of
69     any tax credit claimed under Section 59-7-605 or 59-10-1009 for the vehicle for which a grant
70     is requested.
71          (d) (i) Subject to the availability of money in the fund, the department may make a loan
72     or grant for the purchase of vehicle refueling equipment for a private sector business vehicle or
73     a government vehicle.
74          (ii) The maximum amount loaned or granted per installation of refueling equipment
75     may not exceed the actual cost of the refueling equipment.
76          (3) The department may:
77          (a) establish an application fee for a loan or grant from the fund by following the
78     procedures and requirements of Section 63J-1-504; and
79          (b) reimburse itself for the costs incurred in administering the fund from:
80          (i) the fund; or
81          (ii) application fees established under Subsection (3)(a).
82          (4) (a) The fund balance may not exceed $10,000,000.
83          (b) Interest on cash balances and repayment of loans in excess of the amount necessary
84     to maintain the fund balance at $10,000,000 shall be deposited in the General Fund.
85          (5) (a) Loans made from money in the fund shall be supported by loan documents
86     evidencing the intent of the borrower to repay the loan.
87          (b) The original loan documents shall be filed with the Division of Finance and a copy
88     shall be filed with the department.
89          Section 2. Section 19-1-403.3 is enacted to read:
90          19-1-403.3. Conversion to Alternative Fuel Grant Program Fund -- Contents --
91     Grants made with fund money.
92          (1) (a) There is created an expendable special revenue fund known as the Conversion
93     to Alternative Fuel Grant Program 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) fees established by the department, as described in Subsection (3)(a), and
98     deposited into the fund; and
99          (iv) interest earnings on cash balances.
100          (c) The department may accept contributions from other public and private sources for
101     deposit into the fund.
102          (2) The department may make a grant with money available in the fund to a person
103     who installs conversion equipment on an eligible vehicle, as described in Sections 19-2-301
104     through 19-2-304.
105          (3) The department may:
106          (a) establish an application fee for a grant from the fund by following the procedures
107     and requirements of Section 63J-1-504; and
108          (b) reimburse itself for the costs incurred in administering the fund from:
109          (i) the fund; or
110          (ii) application fees established under Subsection (3)(a).
111          (4) (a) The fund balance may not exceed $10,000,000.
112          (b) Interest on cash balances in excess of the amount necessary to maintain the fund
113     balance at $10,000,000 shall be deposited into the General Fund.
114          Section 3. Section 19-2-302 is amended to read:
115          19-2-302. Definitions.
116          As used in this part:
117          (1) "Air quality standards" means vehicle emission standards equal to or greater than
118     the standards established in bin 4 in Table S04-1 of 40 C.F.R. 86.1811-04(c)(6).
119          (2) "Alternative fuel" means:
120          (a) propane, natural gas, or electricity; or
121          (b) other fuel that the board determines, by rule, to be:
122          (i) at least as effective in reducing air pollution as the fuels listed in Subsection (2)(a);
123     or
124          (ii) substantially more effective in reducing air pollution as the fuel for which the
125     engine was originally designed.
126          (3) "Board" means the Air Quality Board.
127          (4) "Clean fuel grant" means a grant awarded under [Title 19, Chapter 1, Part 4, Clean
128     Fuels and Vehicle Technology Program Act,] this part from the Conversion to Alternative Fuel
129     Grant Program Fund created in Section 19-1-403.3 for reimbursement for a portion of the
130     incremental cost of an OEM vehicle or the cost of conversion equipment.
131          (5) "Conversion equipment" means equipment designed to:
132          (a) allow an eligible vehicle to operate on an alternative fuel; and
133          (b) reduce an eligible vehicle's emissions of regulated pollutants, as demonstrated by:
134          (i) certification of the conversion equipment by the Environmental Protection Agency
135     or by a state or country that has certification standards that are recognized, by rule, by the
136     board;
137          (ii) testing the eligible vehicle, before and after the installation of the equipment, in
138     accordance with 40 C.F.R. Part 86, Control of Emissions from New and In-Use Highway
139     Vehicles and Engines, using all fuel the motor vehicle is capable of using;
140          (iii) for a retrofit natural gas vehicle that is retrofit in accordance with Section
141     19-1-406, satisfying the emission standards described in Section 19-1-406; or
142          (iv) any other test or standard recognized by board rule, made in accordance with Title
143     63G, Chapter 3, Utah Administrative Rulemaking Act.
144          (6) "Cost" means the total reasonable cost of a conversion kit and the paid labor, if any,
145     required to install it.
146          (7) "Director" means the director of the Division of Air Quality.
147          (8) "Division" means the Division of Air Quality, created in Subsection 19-1-105(1)(a).
148          (9) "Eligible vehicle" means a:
149          (a) commercial vehicle, as defined in Section 41-1a-102;
150          (b) farm tractor, as defined in Section 41-1a-102; or
151          (c) motor vehicle, as defined in Section 41-1a-102.
152          Section 4. Section 19-2-303 is amended to read:
153          19-2-303. Grants and programs -- Conditions.
154          (1) The director may make grants from the Conversion to Alternative Fuel Grant
155     Program Fund created in Section 19-1-403.3 to a person who installs conversion equipment on
156     an eligible vehicle as described in this part.
157          (2) A person who installs conversion equipment on an eligible vehicle:
158          (a) may apply to the division for a grant to offset the cost of installation; and
159          (b) shall pass along any savings on the cost of conversion equipment to the owner of
160     the eligible vehicle being converted in the amount of grant money received.
161          (3) As a condition for receiving the grant, a person who installs conversion equipment
162     shall agree to:
163          (a) provide information to the division about the eligible vehicle to be converted with
164     the grant proceeds;
165          (b) allow inspections by the division to ensure compliance with the terms of the grant;
166     and
167          (c) comply with the conditions for the grant.
168          (4) A grant issued under this section may not exceed the lesser of 50% of the cost of
169     the conversion system and associated labor, or $2,500, per converted eligible vehicle.
170          Section 5. Section 19-2-304 is amended to read:
171          19-2-304. Duties and authorities -- Rulemaking.
172          (1) The board may, by following the procedures and requirements of Title 63G,
173     Chapter 3, Utah Administrative Rulemaking Act, make rules:
174          (a) specifying the amount of money to be dedicated annually for grants under this part;
175          (b) specifying criteria the director shall consider in prioritizing and awarding grants,
176     including a limitation on the types of vehicles that are eligible for funds;
177          (c) specifying the minimum qualifications of a person who:
178          (i) installs conversion equipment on an eligible vehicle; and
179          (ii) receives a grant from the division;
180          (d) specifying the terms of a grant; and
181          (e) requiring all grant applicants to apply on forms provided by the division.
182          (2) The division shall:
183          (a) administer [funds] the Conversion to Alternative Fuel Grant Program Fund to
184     encourage eligible vehicle owners to reduce emissions from eligible vehicles; and
185          (b) provide information about which conversion technology meets the requirements of
186     this part.
187          (3) The division may inspect vehicles for which a grant was made to ensure
188     compliance with the terms of the grant.
189          Section 6. Section 59-7-605 is amended to read:
190          59-7-605. Definitions -- Tax credits related to energy efficient vehicles.
191          (1) As used in this section:
192          (a) "Air quality standards" means that a vehicle's emissions are equal to or cleaner than
193     the standards established in bin 4 in Table S04-1, of 40 C.F.R. 86.1811-04(c)(6).
194          (b) "Board" means the Air Quality Board created under Title 19, Chapter 2, Air
195     Conservation Act.
196          [(c) "Certified by the board" means that:]
197          [(i) a motor vehicle on which conversion equipment has been installed meets the
198     following criteria:]
199          [(A) before the installation of conversion equipment, the vehicle does not exceed the
200     emission cut points for a transient test driving cycle, as specified in 40 C.F.R. Part 51,
201     Appendix E to Subpart S, or an equivalent test for the make, model, and year of the vehicle;
202     and]
203          [(B) as a result of the installation of conversion equipment on the motor vehicle, the
204     motor vehicle has reduced emissions; or]
205          [(ii) special mobile equipment on which conversion equipment has been installed has
206     reduced emissions.]
207          [(d) "Clean fuel grant" means a grant awarded:]
208          [(i) under Title 19, Chapter 1, Part 4, Clean Fuels and Vehicle Technology Program
209     Act, for reimbursement of a portion of the incremental cost of an OEM vehicle or the cost of
210     conversion equipment; or]
211          [(ii) under Title 19, Chapter 2, Part 3, Conversion to Alternative Fuel Grant Program.]
212          [(e) "Conversion equipment" means equipment described in Subsection (2)(d) or (e).]
213          [(f)] (c) "OEM vehicle" [has] means the same [meaning] as that term is defined in
214     Section 19-1-402.
215          [(g)] (d) "Original purchase" means the purchase of a vehicle that has never been titled
216     or registered and has been driven less than 7,500 miles.
217          [(h)] (e) "Qualifying electric motorcycle" means a vehicle that:
218          (i) has a seat or saddle for the use of the rider;
219          (ii) is designed to travel with not more than three wheels in contact with the ground;
220          (iii) may lawfully be operated on a freeway, as defined in Section 41-6a-102;
221          (iv) is not fueled by natural gas;
222          (v) is fueled by electricity only; and
223          (vi) is an OEM vehicle except that the vehicle is fueled by a fuel described in
224     Subsection (1)[(h)](e)(v).
225          [(i)] (f) "Qualifying electric vehicle" means a vehicle that:
226          (i) meets air quality standards;
227          (ii) is not fueled by natural gas;
228          (iii) [is fueled by electricity only] draws propulsion energy from a battery with at least
229     10 kilowatt hours of capacity; and
230          (iv) is an OEM vehicle except that the vehicle is fueled by a fuel described in
231     Subsection (1)[(i)](f)(iii).
232          [(j)] (g) "Qualifying plug-in hybrid vehicle" means a vehicle that:
233          (i) meets air quality standards;
234          (ii) is not fueled by natural gas or propane;
235          (iii) has a battery capacity that meets or exceeds the battery capacity described in
236     Section 30D(b)(3), Internal Revenue Code; and
237          (iv) is fueled by a combination of electricity and:
238          (A) diesel fuel;
239          (B) gasoline; or
240          (C) a mixture of gasoline and ethanol.
241          [(k) "Reduced emissions" means:]
242          [(i) for purposes of a motor vehicle on which conversion equipment has been installed,
243     that the motor vehicle's emissions of regulated pollutants, when operating on a fuel listed in
244     Subsection (2)(e)(i) or (ii), is less than the emissions were before the installation of the
245     conversion equipment, as demonstrated by:]
246          [(A) certification of the conversion equipment by the federal Environmental Protection
247     Agency or by a state that has certification standards recognized by the board;]
248          [(B) testing the motor vehicle, before and after installation of the conversion
249     equipment, in accordance with 40 C.F.R. Part 86, Control of Emissions from New and In-use
250     Highway Vehicles and Engines, using all fuel the motor vehicle is capable of using;]
251          [(C) for a retrofit natural gas vehicle that is retrofit in accordance with Section
252     19-1-406, testing that as a result of the retrofit, the retrofit natural gas vehicle satisfies the
253     emission standards applicable under Section 19-1-406; or]
254          [(D) any other test or standard recognized by board rule, made in accordance with Title
255     63G, Chapter 3, Utah Administrative Rulemaking Act; or]
256          [(ii) for purposes of special mobile equipment on which conversion equipment has
257     been installed, that the special mobile equipment's emissions of regulated pollutants, when
258     operating on a fuel listed in Subsection (2)(e)(i) or (ii), is less than the emissions were before
259     the installation of conversion equipment, as demonstrated by:]
260          [(A) certification of the conversion equipment by the federal Environmental Protection
261     Agency or by a state that has certification standards recognized by the board; or]
262          [(B) any other test or standard recognized by board rule, made in accordance with Title
263     63G, Chapter 3, Utah Administrative Rulemaking Act.]
264          [(l) "Special mobile equipment":]
265          [(i) means any mobile equipment or vehicle that is not designed or used primarily for
266     the transportation of persons or property; and]
267          [(ii) includes construction or maintenance equipment.]
268          (2) For the taxable years beginning on or after January 1, 2015, but beginning on or
269     before December 31, [2016] Ĥ→ [2020] 2016 ←Ĥ , a taxpayer may claim a tax credit against
269a     tax otherwise due
270     under this chapter or Chapter 8, Gross Receipts Tax on Certain Corporations Not Required to
271     Pay Corporate Franchise or Income Tax Act, in an amount equal to:
272          (a) (i) for the original purchase of a new qualifying electric vehicle that is registered in
273     this state, the lesser of:
274          (A) $1,500; or
275          (B) 35% of the purchase price of the vehicle; or
276          (ii) for the original purchase of a new qualifying plug-in hybrid vehicle that is
277     registered in this state, $1,000;
278          (b) for the original purchase of a new vehicle fueled by natural gas or propane that is
279     registered in this state, the lesser of:
280          (i) $1,500; or
281          (ii) 35% of the purchase price of the vehicle;
282          (c) for the original purchase of a new qualifying electric motorcycle that is registered in
283     this state, the lesser of:
284          (i) $750; or
285          (ii) 35% of the purchase price of the vehicle; and
286          [(d) 50% of the cost of equipment for conversion, if certified by the board, of a motor
287     vehicle registered in this state minus the amount of any clean fuel grant received, up to a
288     maximum tax credit of $1,500 per motor vehicle, if the motor vehicle is to:]
289          [(i) be fueled by propane, natural gas, or electricity;]
290          [(ii) be fueled by other fuel the board determines annually on or before July 1 to be at
291     least as effective in reducing air pollution as fuels under Subsection (2)(d)(i); or]
292          [(iii) meet the federal clean-fuel vehicle standards in the federal Clean Air Act
293     Amendments of 1990, 42 U.S.C. Sec. 7521 et seq.;]
294          [(e) 50% of the cost of equipment for conversion, if certified by the board, of a special
295     mobile equipment engine minus the amount of any clean fuel grant received, up to a maximum
296     tax credit of $1,000 per special mobile equipment engine, if the special mobile equipment is to
297     be fueled by:]
298          [(i) propane, natural gas, or electricity; or]
299          [(ii) other fuel the board determines annually on or before July 1 to be:]
300          [(A) at least as effective in reducing air pollution as the fuels under Subsection
301     (2)(e)(i); or]
302          [(B) substantially more effective in reducing air pollution than the fuel for which the
303     engine was originally designed; and]
304          [(f)] (d) for a lease of a vehicle described in Subsection (2)(a), (b), or (c), an amount
305     equal to the product of:
306          (i) the amount of tax credit the taxpayer would otherwise qualify to claim under
307     Subsection (2)(a), (b), or (c) had the taxpayer purchased the vehicle, except that the purchase
308     price described in Subsection (2)(a)(i)(B), (2)(b)(ii), or (2)(c)(ii) is considered to be the value
309     of the vehicle at the beginning of the lease; and
310          (ii) a percentage calculated by:
311          (A) determining the difference between the value of the vehicle at the beginning of the
312     lease, as stated in the lease agreement, and the value of the vehicle at the end of the lease, as
313     stated in the lease agreement; and
314          (B) dividing the difference determined under Subsection (2)[(f)](d)(ii)(A) by the value
315     of the vehicle at the beginning of the lease, as stated in the lease agreement.
316          (3) (a) The board shall:
317          (i) determine the amount of tax credit a taxpayer is allowed under this section; and
318          (ii) provide the taxpayer with a written certification of the amount of tax credit the
319     taxpayer is allowed under this section.
320          (b) A taxpayer shall provide proof of the purchase or lease of an item for which a tax
321     credit is allowed under this section by:
322          (i) providing proof to the board in the form the board requires by rule;
323          (ii) receiving a written statement from the board acknowledging receipt of the proof;
324     and
325          (iii) retaining the written statement described in Subsection (3)(b)(ii).
326          (c) A taxpayer shall retain the written certification described in Subsection (3)(a)(ii).
327          (4) Except as provided by Subsection (5), the tax credit under this section is allowed
328     only:
329          (a) against a tax owed under this chapter or Chapter 8, Gross Receipts Tax on Certain
330     Corporations Not Required to Pay Corporate Franchise or Income Tax Act, in the taxable year
331     by the taxpayer;
332          (b) for the taxable year in which a vehicle described in Subsection (2)(a), (b), or (c) is
333     purchased[,] or a vehicle described in Subsection (2)(f) is leased[, or conversion equipment
334     described in Subsection (2)(d) or (e) is installed]; and
335          (c) once per vehicle.
336          (5) A taxpayer may not assign a tax credit under this section to another person.
337          (6) If the amount of a tax credit claimed by a taxpayer under this section exceeds the
338     taxpayer's tax liability under this chapter or Chapter 8, Gross Receipts Tax on Certain
339     Corporations Not Required to Pay Corporate Franchise or Income Tax Act, for a taxable year,
340     the amount of the tax credit exceeding the tax liability may be carried forward for a period that
341     does not exceed the next five taxable years.
342          (7) In accordance with any rules prescribed by the commission under Subsection (8),
343     the commission shall transfer at least annually from the General Fund into the Education Fund
344     the amount by which the amount of tax credit claimed under this section for a taxable year
345     exceeds $500,000.
346          (8) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
347     commission may make rules for making a transfer from the General Fund into the Education
348     Fund as required by Subsection (7).
349          Section 7. Section 59-10-1009 is amended to read:
350          59-10-1009. Definitions -- Tax credits related to energy efficient vehicles.
351          (1) As used in this section:
352          (a) "Air quality standards" means that a vehicle's emissions are equal to or cleaner than
353     the standards established in bin 4 in Table S04-1, of 40 C.F.R. 86.1811-04(c)(6).
354          (b) "Board" means the Air Quality Board created in Title 19, Chapter 2, Air
355     Conservation Act.
356          [(c) "Certified by the board" means that:]
357          [(i) a motor vehicle on which conversion equipment has been installed meets the
358     following criteria:]
359          [(A) before the installation of conversion equipment, the vehicle does not exceed the
360     emission cut points for a transient test driving cycle, as specified in 40 C.F.R. Part 51,
361     Appendix E to Subpart S, or an equivalent test for the make, model, and year of the vehicle;
362     and]
363          [(B) as a result of the installation of conversion equipment on the motor vehicle, the
364     motor vehicle has reduced emissions; or]
365          [(ii) special mobile equipment on which conversion equipment has been installed has
366     reduced emissions.]
367          [(d) "Clean fuel grant" means a grant a claimant, estate, or trust receives under Title 19,
368     Chapter 1, Part 4, Clean Fuels and Vehicle Technology Program Act or Title 19, Chapter 2,
369     Part 3, Conversion to Alternative Fuel Grant Program, for reimbursement of a portion of the
370     incremental cost of the OEM vehicle or the cost of conversion equipment.]
371          [(e) "Conversion equipment" means equipment described in Subsection (2)(d) or (e).]
372          [(f)] (c) "OEM vehicle" [has] means the same [meaning] as that term is defined in
373     Section 19-1-402.
374          [(g)] (d) "Original purchase" means the purchase of a vehicle that has never been titled
375     or registered and has been driven less than 7,500 miles.
376          [(h)] (e) "Qualifying electric motorcycle" means a vehicle that:
377          (i) has a seat or saddle for the use of the rider;
378          (ii) is designed to travel with not more than three wheels in contact with the ground;
379          (iii) may lawfully be operated on a freeway, as defined in Section 41-6a-102;
380          (iv) is not fueled by natural gas;
381          (v) is fueled by electricity only; and
382          (vi) is an OEM vehicle except that the vehicle is fueled by a fuel described in
383     Subsection (1)[(h)](e)(v).
384          [(i)] (f) "Qualifying electric vehicle" means a vehicle that:
385          (i) meets air quality standards;
386          (ii) is not fueled by natural gas;
387          (iii) [is fueled by electricity only] draws propulsion energy from a battery with at least
388     10 kilowatt hours of capacity; and
389          (iv) is an OEM vehicle except that the vehicle is fueled by a fuel described in
390     Subsection (1)[(i)](f)(iii).
391          [(j)] (g) "Qualifying plug-in hybrid vehicle" means a vehicle that:
392          (i) meets air quality standards;
393          (ii) is not fueled by natural gas or propane;
394          (iii) has a battery capacity that meets or exceeds the battery capacity described in
395     Section 30D(b)(3), Internal Revenue Code; and
396          (iv) is fueled by a combination of electricity and:
397          (A) diesel fuel;
398          (B) gasoline; or
399          (C) a mixture of gasoline and ethanol.
400          [(k) "Reduced emissions" means:]
401          [(i) for purposes of a motor vehicle on which conversion equipment has been installed,
402     that the motor vehicle's emissions of regulated pollutants, when operating on a fuel listed in
403     Subsection (2)(e)(i) or (ii), is less than the emissions were before the installation of the
404     conversion equipment, as demonstrated by:]
405          [(A) certification of the conversion equipment by the federal Environmental Protection
406     Agency or by a state that has certification standards recognized by the board;]
407          [(B) testing the motor vehicle, before and after installation of the conversion
408     equipment, in accordance with 40 C.F.R. Part 86, Control of Emissions from New and In-use
409     Highway Vehicles and Engines, using all fuel the motor vehicle is capable of using;]
410          [(C) for a retrofit natural gas vehicle that is retrofit in accordance with Section
411     19-1-406, testing that as a result of the retrofit, the retrofit natural gas vehicle satisfies the
412     emission standards applicable under Section 19-1-406; or]
413          [(D) any other test or standard recognized by board rule, made in accordance with Title
414     63G, Chapter 3, Utah Administrative Rulemaking Act; or]
415          [(ii) for purposes of special mobile equipment on which conversion equipment has
416     been installed, that the special mobile equipment's emissions of regulated pollutants, when
417     operating on a fuel listed in Subsection (2)(e)(i) or (ii), is less than the emissions were before
418     the installation of conversion equipment, as demonstrated by:]
419          [(A) certification of the conversion equipment by the federal Environmental Protection
420     Agency or by a state that has certification standards recognized by the board; or]
421          [(B) any other test or standard recognized by board rule, made in accordance with Title
422     63G, Chapter 3, Utah Administrative Rulemaking Act.]
423          [(l) "Special mobile equipment":]
424          [(i) means any mobile equipment or vehicle not designed or used primarily for the
425     transportation of persons or property; and]
426          [(ii) includes construction or maintenance equipment.]
427          (2) For the taxable years beginning on or after January 1, 2015, but beginning on or
428     before December 31, [2016] Ĥ→ [2020] 2016 ←Ĥ , a claimant, estate, or trust may claim a
428a     nonrefundable tax
429     credit against tax otherwise due under this chapter in an amount equal to:
430          (a) (i) for the original purchase of a new qualifying electric vehicle that is registered in
431     this state, the lesser of:
432          (A) $1,500; or
433          (B) 35% of the purchase price of the vehicle; or
434          (ii) for the original purchase of a new qualifying plug-in hybrid vehicle that is
435     registered in this state, $1,000;
436          (b) for the original purchase of a new vehicle fueled by natural gas or propane that is
437     registered in this state, the lesser of:
438          (i) $1,500; or
439          (ii) 35% of the purchase price of the vehicle;
440          (c) for the original purchase of a new qualifying electric motorcycle that is registered in
441     this state, the lesser of:
442          (i) $750; or
443          (ii) 35% of the purchase price of the vehicle; and
444          [(d) 50% of the cost of equipment for conversion, if certified by the board, of a motor
445     vehicle registered in this state minus the amount of any clean fuel grant received, up to a
446     maximum tax credit of $1,500 per vehicle, if the motor vehicle:]
447          [(i) is to be fueled by propane, natural gas, or electricity;]
448          [(ii) is to be fueled by other fuel the board determines annually on or before July 1 to
449     be at least as effective in reducing air pollution as fuels under Subsection (2)(d)(i); or]
450          [(iii) will meet the federal clean fuel vehicle standards in the federal Clean Air Act
451     Amendments of 1990, 42 U.S.C. Sec. 7521 et seq.;]
452          [(e) 50% of the cost of equipment for conversion, if certified by the board, of a special
453     mobile equipment engine minus the amount of any clean fuel grant received, up to a maximum
454     tax credit of $1,000 per special mobile equipment engine, if the special mobile equipment is to
455     be fueled by:]
456          [(i) propane, natural gas, or electricity; or]
457          [(ii) other fuel the board determines annually on or before July 1 to be:]
458          [(A) at least as effective in reducing air pollution as the fuels under Subsection
459     (2)(e)(i); or]
460          [(B) substantially more effective in reducing air pollution than the fuel for which the
461     engine was originally designed; and]
462          [(f)] (d) for a lease of a vehicle described in Subsection (2)(a), (b), or (c), an amount
463     equal to the product of:
464          (i) the amount of tax credit the claimant, estate, or trust would otherwise qualify to
465     claim under Subsection (2)(a), (b), or (c) had the claimant, estate, or trust purchased the
466     vehicle, except that the purchase price described in Subsection (2)(a)(i)(B), (2)(b)(ii), or
467     (2)(c)(ii) is considered to be the value of the vehicle at the beginning of the lease; and
468          (ii) a percentage calculated by:
469          (A) determining the difference between the value of the vehicle at the beginning of the
470     lease, as stated in the lease agreement, and the value of the vehicle at the end of the lease, as
471     stated in the lease agreement; and
472          (B) dividing the difference determined under Subsection (2)[(f)](d)(ii)(A) by the value
473     of the vehicle at the beginning of the lease, as stated in the lease agreement.
474          (3) (a) The board shall:
475          (i) determine the amount of tax credit a claimant, estate, or trust is allowed under this
476     section; and
477          (ii) provide the claimant, estate, or trust with a written certification of the amount of
478     tax credit the claimant, estate, or trust is allowed under this section.
479          (b) A claimant, estate, or trust shall provide proof of the purchase or lease of an item
480     for which a tax credit is allowed under this section by:
481          (i) providing proof to the board in the form the board requires by rule;
482          (ii) receiving a written statement from the board acknowledging receipt of the proof;
483     and
484          (iii) retaining the written statement described in Subsection (3)(b)(ii).
485          (c) A claimant, estate, or trust shall retain the written certification described in
486     Subsection (3)(a)(ii).
487          (4) Except as provided by Subsection (5), the tax credit under this section is allowed
488     only:
489          (a) against a tax owed under this chapter in the taxable year by the claimant, estate, or
490     trust;
491          (b) for the taxable year in which a vehicle described in Subsection (2)(a), (b), or (c) is
492     purchased[,] or a vehicle described in Subsection (2)(f) is leased[, or conversion equipment
493     described in Subsection (2)(d) or (e) is installed]; and
494          (c) once per vehicle.
495          (5) A claimant, estate, or trust may not assign a tax credit under this section to another
496     person.
497          (6) If the amount of a tax credit claimed by a claimant, estate, or trust under this
498     section exceeds the claimant's, estate's, or trust's tax liability under this chapter for a taxable
499     year, the amount of the tax credit exceeding the tax liability may be carried forward for a period
500     that does not exceed the next five taxable years.
501          (7) In accordance with any rules prescribed by the commission under Subsection (8),
502     the commission shall transfer at least annually from the General Fund into the Education Fund
503     the amount by which the amount of tax credit claimed under this section for a taxable year
504     exceeds $500,000.
505          (8) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
506     commission may make rules for making a transfer from the General Fund into the Education
507     Fund as required by Subsection (7).
508          Section 8. Section 63I-2-219 is amended to read:
509          63I-2-219. Repeal dates -- Title 19.
510          (1) Subsection 19-1-403(2)(c)(i), the language that states "minus the amount of any tax
511     credit claimed under Section 59-7-605 or 59-10-1009" is repealed on January 1, 2017.
512          (2) Subsection 19-1-403(2)(c)(ii), the language that states "minus the amount of any
513     tax credit claimed under Section 59-7-605 or 59-10-1009" is repealed on January 1, 2017.
514          Section 9. Appropriation.
515          Under the terms and conditions of Title 63J, Chapter 1, Budgetary Procedures Act, for
516     the fiscal year beginning July 1, 2016, and ending June 30, 2017, the following sums of money
517     are appropriated from resources not otherwise appropriated, or reduced from amounts
518     previously appropriated, out of the funds or amounts indicated. These sums of money are in
519     addition to amounts previously appropriated for fiscal year 2017.
520          To the Department of Environmental Quality, Conversion to Alternative Fuel Grant
521     Program Fund
522               From General Fund, One-time Ŝ→ [
$500,000]

522a                                                             $150,000 ←Ŝ
523               Schedule of Programs:
524                    Conversion to Alternative Fuel Grant Program Fund      Ŝ→ [$500,000]
524a                                                             $150,000 ←Ŝ
525          The Legislature intends that the appropriation under this section be used by the Division
526     of Air Quality to provide grants to an individual who installs conversion equipment on an
527     eligible vehicle, as described by Title 19, Chapter 2, Part 3, Conversion to Alternative Fuel
528     Grant Program. The Legislature intends that, under Section 63J-1-603, appropriations under
529     this section not lapse at the close of fiscal year 2017.
530          Section 10. Effective date.
531           (1) Except as provided in Subsection (2), this bill takes effect on May 10, 2016.
532          (2) The amendments to Sections 59-7-605 and 59-10-1009 take effect for a taxable
533     year beginning on or after January 1, 2017.