1     
ENERGY EFFICIENT VEHICLE REBATE

2     
2018 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Douglas V. Sagers

5     
Senate Sponsor: ____________

6     

7     LONG TITLE
8     General Description:
9          This bill modifies provisions relating to energy efficient vehicle tax credits.
10     Highlighted Provisions:
11          This bill:
12          ▸     defines terms;
13          ▸     establishes a nonrefundable tax credit for the purchase of a new qualifying hydrogen
14     vehicle that is registered in the state; and
15          ▸     makes technical changes.
16     Money Appropriated in this Bill:
17          None
18     Other Special Clauses:
19          None
20     Utah Code Sections Affected:
21     AMENDS:
22          59-7-605, as last amended by Laws of Utah 2016, Chapters 369 and 375
23          59-10-1009, as last amended by Laws of Utah 2016, Chapters 369 and 375
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) "OEM vehicle" means the same as that term is defined in Section 19-1-402.
34          (d) "Original purchase" means the purchase of a vehicle that has never been titled or
35     registered and has been driven less than 7,500 miles.
36          (e) "Qualifying electric motorcycle" means a vehicle that:
37          (i) has a seat or saddle for the use of the rider;
38          (ii) is designed to travel with not more than three wheels in contact with the ground;
39          (iii) may lawfully be operated on a freeway, as defined in Section 41-6a-102;
40          (iv) is not fueled by natural gas;
41          (v) is fueled by electricity only; and
42          (vi) is an OEM vehicle except that the vehicle is fueled by a fuel described in
43     Subsection (1)(e)(v).
44          (f) "Qualifying electric vehicle" means a vehicle that:
45          (i) meets air quality standards;
46          (ii) is not fueled by natural gas;
47          (iii) draws propulsion energy from a battery with at least 10 kilowatt hours of capacity;
48     and
49          (iv) is an OEM vehicle except that the vehicle is fueled by a fuel described in
50     Subsection (1)(f)(iii).
51          (g) "Qualifying hydrogen vehicle" means a vehicle that:
52          (i) meets air quality standards;
53          (ii) uses pure hydrogen to supply energy to an electrochemical cell that produces
54     electricity through a noncombustion reaction and then uses the electricity to power an electric
55     motor; and
56          (iii) is an OEM vehicle except that the vehicle is fueled as described in Subsection
57     (1)(g)(ii).
58          [(g)] (h) "Qualifying plug-in hybrid vehicle" means a vehicle that:

59          (i) meets air quality standards;
60          (ii) is not fueled by natural gas or propane;
61          (iii) has a battery capacity that meets or exceeds the battery capacity described in
62     Section 30D(b)(3), Internal Revenue Code; and
63          (iv) is fueled by a combination of electricity and:
64          (A) diesel fuel;
65          (B) gasoline; or
66          (C) a mixture of gasoline and ethanol.
67          (2) For a taxable year beginning on or after January 1, 2015, but beginning on or before
68     December 31, 2016, a taxpayer may claim a tax credit against tax otherwise due under this
69     chapter or Chapter 8, Gross Receipts Tax on Certain Corporations Not Required to Pay
70     Corporate Franchise or Income Tax Act, in an amount equal to:
71          (a) (i) for the original purchase of a new qualifying electric vehicle that is registered in
72     this state, the lesser of:
73          (A) $1,500; or
74          (B) 35% of the purchase price of the vehicle; or
75          (ii) for the original purchase of a new qualifying plug-in hybrid vehicle that is
76     registered in this state, $1,000;
77          (b) for the original purchase of a new vehicle fueled by natural gas or propane that is
78     registered in this state, the lesser of:
79          (i) $1,500; or
80          (ii) 35% of the purchase price of the vehicle;
81          (c) for the original purchase of a new qualifying electric motorcycle that is registered in
82     this state, the lesser of:
83          (i) $750; or
84          (ii) 35% of the purchase price of the vehicle; and
85          (d) for a lease of a vehicle described in Subsection (2)(a), (b), or (c), an amount equal
86     to the product of:
87          (i) the amount of tax credit the taxpayer would otherwise qualify to claim under
88     Subsection (2)(a), (b), or (c) had the taxpayer purchased the vehicle, except that the purchase
89     price described in Subsection (2)(a)(i)(B), (2)(b)(ii), or (2)(c)(ii) is considered to be the value

90     of the vehicle at the beginning of the lease; and
91          (ii) a percentage calculated by:
92          (A) determining the difference between the value of the vehicle at the beginning of the
93     lease, as stated in the lease agreement, and the value of the vehicle at the end of the lease, as
94     stated in the lease agreement; and
95          (B) dividing the difference determined under Subsection (2)(d)(ii)(A) by the value of
96     the vehicle at the beginning of the lease, as stated in the lease agreement.
97          (3) For a taxable year beginning on or after January 1, 2019, but beginning on or before
98     December 31, 2022, a taxpayer may claim a nonrefundable tax credit against tax otherwise due
99     under this chapter or Chapter 8, Gross Receipts Tax on Certain Corporations Not Required to
100     Pay Corporate Franchise or Income Tax Act, in an amount equal to $3,000 for the original
101     purchase of a new qualifying hydrogen vehicle that is registered in this state.
102          [(3)] (4) (a) The board shall:
103          (i) determine the amount of tax credit a taxpayer is allowed under this section; and
104          (ii) provide the taxpayer with a written certification of the amount of tax credit the
105     taxpayer is allowed under this section.
106          (b) A taxpayer shall provide proof of the purchase or lease of an item for which a tax
107     credit is allowed under this section by:
108          (i) providing proof to the board in the form the board requires by rule;
109          (ii) receiving a written statement from the board acknowledging receipt of the proof;
110     and
111          (iii) retaining the written statement described in Subsection [(3)] (4)(b)(ii).
112          (c) A taxpayer shall retain the written certification described in Subsection [(3)]
113     (4)(a)(ii).
114          [(4)] (5) Except as provided by Subsection [(5)] (6), the tax credit under this section is
115     allowed only:
116          (a) against a tax owed under this chapter or Chapter 8, Gross Receipts Tax on Certain
117     Corporations Not Required to Pay Corporate Franchise or Income Tax Act, in the taxable year
118     by the taxpayer;
119          (b) for the taxable year in which a vehicle described in Subsection (2)(a), (2)(b), [or]
120     (2)(c), or (3) is purchased or a vehicle described in Subsection (2)(d) is leased; and

121          (c) once per vehicle.
122          [(5)] (6) A taxpayer may not assign a tax credit under this section to another person.
123          [(6)] (7) If the amount of a tax credit claimed by a taxpayer under [this section]
124     Subsection (2)(a), (b), (c), or (d) exceeds the taxpayer's tax liability under this chapter or
125     Chapter 8, Gross Receipts Tax on Certain Corporations Not Required to Pay Corporate
126     Franchise or Income Tax Act, for a taxable year, the amount of the tax credit exceeding the tax
127     liability may be carried forward for a period that does not exceed the next five taxable years.
128          [(7)] (8) In accordance with any rules prescribed by the commission under Subsection
129     [(8)] (9), the Division of Finance shall transfer at least annually from the General Fund into the
130     Education Fund the amount by which the amount of tax credit claimed under this section for a
131     fiscal year exceeds $500,000.
132          [(8)] (9) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
133     Act, the commission may make rules for making a transfer from the General Fund into the
134     Education Fund as required by Subsection [(7)] (8).
135          Section 2. Section 59-10-1009 is amended to read:
136          59-10-1009. Definitions -- Tax credits related to energy efficient vehicles.
137          (1) As used in this section:
138          (a) "Air quality standards" means that a vehicle's emissions are equal to or cleaner than
139     the standards established in bin 4 in Table S04-1, of 40 C.F.R. 86.1811-04(c)(6).
140          (b) "Board" means the Air Quality Board created in Title 19, Chapter 2, Air
141     Conservation Act.
142          (c) "OEM vehicle" means the same as that term is defined in Section 19-1-402.
143          (d) "Original purchase" means the purchase of a vehicle that has never been titled or
144     registered and has been driven less than 7,500 miles.
145          (e) "Qualifying electric motorcycle" means a vehicle that:
146          (i) has a seat or saddle for the use of the rider;
147          (ii) is designed to travel with not more than three wheels in contact with the ground;
148          (iii) may lawfully be operated on a freeway, as defined in Section 41-6a-102;
149          (iv) is not fueled by natural gas;
150          (v) is fueled by electricity only; and
151          (vi) is an OEM vehicle except that the vehicle is fueled by a fuel described in

152     Subsection (1)(e)(v).
153          (f) "Qualifying electric vehicle" means a vehicle that:
154          (i) meets air quality standards;
155          (ii) is not fueled by natural gas;
156          (iii) draws propulsion energy from a battery with at least 10 kilowatt hours of capacity;
157     and
158          (iv) is an OEM vehicle except that the vehicle is fueled by a fuel described in
159     Subsection (1)(f)(iii).
160          (g) "Qualifying hydrogen vehicle" means a vehicle that:
161          (i) meets air quality standards;
162          (ii) uses pure hydrogen to supply energy to an electrochemical cell that produces
163     electricity through a noncombustion reaction and then uses the electricity to power an electric
164     motor; and
165          (iii) is an OEM vehicle except that the vehicle is fueled as described in Subsection
166     (1)(g)(ii).
167          [(g)] (h) "Qualifying plug-in hybrid vehicle" means a vehicle that:
168          (i) meets air quality standards;
169          (ii) is not fueled by natural gas or propane;
170          (iii) has a battery capacity that meets or exceeds the battery capacity described in
171     Section 30D(b)(3), Internal Revenue Code; and
172          (iv) is fueled by a combination of electricity and:
173          (A) diesel fuel;
174          (B) gasoline; or
175          (C) a mixture of gasoline and ethanol.
176          (2) For a taxable year beginning on or after January 1, 2015, but beginning on or before
177     December 31, 2016, a claimant, estate, or trust may claim a nonrefundable tax credit against
178     tax otherwise due under this chapter in an amount equal to:
179          (a) (i) for the original purchase of a new qualifying electric vehicle that is registered in
180     this state, the lesser of:
181          (A) $1,500; or
182          (B) 35% of the purchase price of the vehicle; or

183          (ii) for the original purchase of a new qualifying plug-in hybrid vehicle that is
184     registered in this state, $1,000;
185          (b) for the original purchase of a new vehicle fueled by natural gas or propane that is
186     registered in this state, the lesser of:
187          (i) $1,500; or
188          (ii) 35% of the purchase price of the vehicle;
189          (c) for the original purchase of a new qualifying electric motorcycle that is registered in
190     this state, the lesser of:
191          (i) $750; or
192          (ii) 35% of the purchase price of the vehicle; and
193          (d) for a lease of a vehicle described in Subsection (2)(a), (b), or (c), an amount equal
194     to the product of:
195          (i) the amount of tax credit the claimant, estate, or trust would otherwise qualify to
196     claim under Subsection (2)(a), (b), or (c) had the claimant, estate, or trust purchased the
197     vehicle, except that the purchase price described in Subsection (2)(a)(i)(B), (2)(b)(ii), or
198     (2)(c)(ii) is considered to be the value of the vehicle at the beginning of the lease; and
199          (ii) a percentage calculated by:
200          (A) determining the difference between the value of the vehicle at the beginning of the
201     lease, as stated in the lease agreement, and the value of the vehicle at the end of the lease, as
202     stated in the lease agreement; and
203          (B) dividing the difference determined under Subsection (2)(d)(ii)(A) by the value of
204     the vehicle at the beginning of the lease, as stated in the lease agreement.
205          (3) For a taxable year beginning on or after January 1, 2019, but beginning on or before
206     December 31, 2022, a claimant, estate, or trust may claim a nonrefundable tax credit against
207     tax otherwise due under this chapter in an amount equal to $3,000 for the original purchase of a
208     new qualifying hydrogen vehicle that is registered in this state.
209          [(3)] (4) (a) The board shall:
210          (i) determine the amount of tax credit a claimant, estate, or trust is allowed under this
211     section; and
212          (ii) provide the claimant, estate, or trust with a written certification of the amount of
213     tax credit the claimant, estate, or trust is allowed under this section.

214          (b) A claimant, estate, or trust shall provide proof of the purchase or lease of an item
215     for which a tax credit is allowed under this section by:
216          (i) providing proof to the board in the form the board requires by rule;
217          (ii) receiving a written statement from the board acknowledging receipt of the proof;
218     and
219          (iii) retaining the written statement described in Subsection [(3)] (4)(b)(ii).
220          (c) A claimant, estate, or trust shall retain the written certification described in
221     Subsection [(3)] (4)(a)(ii).
222          [(4)] (5) Except as provided by Subsection [(5)] (6), the tax credit under this section is
223     allowed only:
224          (a) against a tax owed under this chapter in the taxable year by the claimant, estate, or
225     trust;
226          (b) for the taxable year in which a vehicle described in Subsection (2)(a), (2)(b), [or]
227     (2)(c), or (3) is purchased or a vehicle described in Subsection (2)(d) is leased; and
228          (c) once per vehicle.
229          [(5)] (6) A claimant, estate, or trust may not assign a tax credit under this section to
230     another person.
231          [(6)] (7) If the amount of a tax credit claimed by a claimant, estate, or trust under [this
232     section] Subsection (2)(a), (b), (c), or (d) exceeds the claimant's, estate's, or trust's tax liability
233     under this chapter for a taxable year, the amount of the tax credit exceeding the tax liability
234     may be carried forward for a period that does not exceed the next five taxable years.
235          [(7)] (8) In accordance with any rules prescribed by the commission under Subsection
236     [(8)] (9), the Division of Finance shall transfer at least annually from the General Fund into the
237     Education Fund the amount by which the amount of tax credit claimed under this section for a
238     fiscal year exceeds $500,000.
239          [(8)] (9) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
240     Act, the commission may make rules for making a transfer from the General Fund into the
241     Education Fund as required by Subsection [(7)] (8).






Legislative Review Note
Office of Legislative Research and General Counsel