1     
TAX CREDIT FOR ALTERNATIVE FUEL HEAVY DUTY

2     
VEHICLES

3     
2020 GENERAL SESSION

4     
STATE OF UTAH

5     
Chief Sponsor: Andrew Stoddard

6     
Senate Sponsor: Lincoln Fillmore

7     Cosponsors:
8     Joel K. Briscoe
Suzanne Harrison


9     

10     LONG TITLE
11     General Description:
12          This bill addresses the tax credit related to certain alternative fuel heavy duty vehicles.
13     Highlighted Provisions:
14          This bill:
15          ▸     extends the availability of the income tax credit related to certain alternative fuel
16     heavy duty vehicles; and
17          ▸     makes technical and conforming changes.
18     Money Appropriated in this Bill:
19          None
20     Other Special Clauses:
21          None
22     Utah Code Sections Affected:
23     AMENDS:
24          59-7-618, as last amended by Laws of Utah 2017, Chapter 265
25          59-10-1033, as last amended by Laws of Utah 2017, Chapter 265
26          63I-1-259, as last amended by Laws of Utah 2019, Chapters 29 and 479
27     

28     Be it enacted by the Legislature of the state of Utah:
29          Section 1. Section 59-7-618 is amended to read:
30          59-7-618. Tax credit related to alternative fuel heavy duty vehicles.
31          (1) As used in this section:
32          (a) "Board" means the Air Quality Board created under Title 19, Chapter 2, Air
33     Conservation Act.
34          (b) "Director" means the director of the Division of Air Quality appointed under
35     Section 19-2-107.
36          (c) "Heavy duty vehicle" means a commercial category 7 or 8 vehicle, according to
37     vehicle classifications established by the Federal Highway Administration.
38          (d) "Natural gas" includes compressed natural gas and liquified natural gas.
39          (e) "Qualified heavy duty vehicle" means a heavy duty vehicle that:
40          (i) has never been titled or registered and has been driven less than 7,500 miles; and
41          (ii) is fueled by natural gas , has a 100% electric drivetrain, or has a hydrogen-electric
42     drivetrain .
43          (f) "Qualified purchase" means the purchase of a qualified heavy duty vehicle.
44          (g) "Qualified taxpayer" means a taxpayer that:
45          (i) purchases a qualified heavy duty vehicle; and
46          (ii) receives a tax credit certificate from the director.
47          (h) "Small fleet" means 40 or fewer heavy duty vehicles registered in the state and
48     owned by a single taxpayer.
49          (i) "Tax credit certificate" means a certificate issued by the director certifying that a
50     taxpayer is entitled to a tax credit as provided in this section and stating the amount of the tax
51     credit.
52          (2) A qualified taxpayer may claim a nonrefundable tax credit against tax otherwise
53     due under this chapter or Chapter 8, Gross Receipts Tax on Certain Corporations Not Required
54     to Pay Corporate Franchise or Income Tax Act:
55          (a) in an amount equal to:
56          [(i) $25,000, if the qualified purchase of a natural gas heavy duty vehicle occurs during
57     calendar year 2015 or calendar year 2016;]
58          [(ii) $25,000, if the qualified purchase occurs during calendar year 2017;]
59          [(iii) $20,000, if the qualified purchase occurs during calendar year 2018;]
60          [(iv) $18,000, if the qualified purchase occurs during calendar year 2019; and]
61          [(v)] (i) $15,000, if the qualified purchase occurs during calendar year 2020; [and]
62          (ii) $13,500, if the qualified purchase occurs during calendar year 2021;
63          (iii) $12,000, if the qualified purchase occurs during calendar year 2022;
64          (iv) $10,500, if the qualified purchase occurs during calendar year 2023;
65          (v) $9,000, if the qualified purchase occurs during calendar year 2024;
66          (vi) $7,500, if the qualified purchase occurs during calendar year 2025;
67          (vii) $6,000, if the qualified purchase occurs during calendar year 2026;
68          (viii) $4,500, if the qualified purchase occurs during calendar year 2027;
69          (ix) $3,000, if the qualified purchase occurs during calendar year 2028; and
70          (x) $1,500, if the qualified purchase occurs during calendar year 2029; and
71          (b) if the qualified taxpayer certifies under oath that over 50% of the miles that the
72     heavy duty vehicle that is the subject of the qualified purchase will travel annually will be
73     within the state.
74          (3) (a) Except as provided in Subsection (3)(b), a taxpayer may not submit an
75     application for, and the director may not issue to the taxpayer, a tax credit certificate under this
76     section in any taxable year for a qualified purchase if the director has already issued tax credit
77     certificates to the taxpayer for 10 qualified purchases in the same taxable year.
78          (b) If, by May 1 of any year, more than 30% of the aggregate annual total amount of
79     tax credits under Subsection (5) has not been claimed, a taxpayer may submit an application
80     for, and the director may issue to the taxpayer, one or more tax credit certificates for up to eight
81     additional qualified purchases, even if the director has already issued to that taxpayer tax credit
82     certificates for the maximum number of qualified purchases allowed under Subsection (3)(a).
83          (4) (a) Subject to Subsection (4)(b), the director shall reserve 25% of all tax credits
84     available under this section for qualified taxpayers with a small fleet.
85          (b) Subsection (4)(a) does not prevent a taxpayer from submitting an application for, or
86     the director from issuing, a tax credit certificate if, before October 1, qualified taxpayers with a
87     small fleet have not reserved under Subsection (5)(b) tax credits for the full amount reserved
88     under Subsection (4)(a).
89          (5) (a) The aggregate annual total amount of tax credits represented by tax credit
90     certificates that the director issues under this section and Section 59-10-1033 may not exceed
91     $500,000.
92          (b) The board shall, in accordance with Title 63G, Chapter 3, Utah Administrative
93     Rulemaking Act, make rules to establish a process under which a taxpayer may reserve a
94     potential tax credit under this section for a limited time to allow the taxpayer to make a
95     qualified purchase with the assurance that the aggregate limit under Subsection (5)(a) will not
96     be met before the taxpayer is able to submit an application for a tax credit certificate.
97          (6) (a) (i) A taxpayer wishing to claim a tax credit under this section shall, using forms
98     the board requires by rule:
99          (A) submit to the director an application for a tax credit;
100          (B) provide the director proof of a qualified purchase; and
101          (C) submit to the director the certification under oath required under Subsection (2)(b).
102          (ii) Upon receiving the application, proof, and certification required under Subsection
103     (6)(a)(i), the director shall provide the taxpayer a written statement from the director
104     acknowledging receipt of the proof.
105          (b) If the director determines that a taxpayer qualifies for a tax credit under this section,
106     the director shall:
107          (i) determine the amount of tax credit the taxpayer is allowed under this section; and
108          (ii) provide the taxpayer with a written tax credit certificate:
109          (A) stating that the taxpayer has qualified for a tax credit; and
110          (B) showing the amount of tax credit for which the taxpayer has qualified under this
111     section.
112          (c) A qualified taxpayer shall retain the tax credit certificate.
113          (d) The director shall at least annually submit to the commission a list of all qualified
114     taxpayers to which the director has issued a tax credit certificate and the amount of each tax
115     credit represented by the tax credit certificates.
116          (7) The tax credit under this section is allowed only:
117          (a) against a tax owed under this chapter or Chapter 8, Gross Receipts Tax on Certain
118     Corporations Not Required to Pay Corporate Franchise or Income Tax Act, in the taxable year
119     by the qualified taxpayer;
120          (b) for the taxable year in which the qualified purchase occurs; and
121          (c) once per vehicle.
122          (8) A qualified taxpayer may not assign a tax credit or a tax credit certificate under this
123     section to another person.
124          (9) If the qualified taxpayer receives a tax credit certificate under this section that
125     allows a tax credit in an amount that exceeds the qualified taxpayer's tax liability under this
126     chapter or Chapter 8, Gross Receipts Tax on Certain Corporations Not Required to Pay
127     Corporate Franchise or Income Tax Act, for a taxable year, the qualified taxpayer may carry
128     forward the amount of the tax credit that exceeds the tax liability for a period that does not
129     exceed the next five taxable years.
130          [(10) (a) In accordance with any rules prescribed by the commission under Subsection
131     (10)(b), the Division of Finance shall transfer at least annually from the General Fund into the
132     Education Fund the aggregate amount of all tax credits claimed under this section.]
133          [(b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
134     the commission may make rules for making a transfer from the General Fund into the
135     Education Fund as required by Subsection (10)(a).]
136          Section 2. Section 59-10-1033 is amended to read:
137          59-10-1033. Tax credit related to alternative fuel heavy duty vehicles.
138          (1) As used in this section:
139          (a) "Board" means the Air Quality Board created under Title 19, Chapter 2, Air
140     Conservation Act.
141          (b) "Director" means the director of the Division of Air Quality appointed under
142     Section 19-2-107.
143          (c) "Heavy duty vehicle" means a commercial category 7 or 8 vehicle, according to
144     vehicle classifications established by the Federal Highway Administration.
145          (d) "Natural gas" includes compressed natural gas and liquified natural gas.
146          (e) "Qualified heavy duty vehicle" means a heavy duty vehicle that:
147          (i) has never been titled or registered and has been driven less than 7,500 miles; and
148          (ii) is fueled by natural gas , has a 100% electric drivetrain, or has a hydrogen-electric
149     drivetrain.
150          (f) "Qualified purchase" means the purchase of a qualified heavy duty vehicle.
151          (g) "Qualified taxpayer" means a claimant, estate, or trust that:
152          (i) purchases a qualified heavy duty vehicle; and
153          (ii) receives a tax credit certificate from the director.
154          (h) "Small fleet" means 40 or fewer heavy duty vehicles registered in the state and
155     owned by a single claimant, estate, or trust.
156          (i) "Tax credit certificate" means a certificate issued by the director certifying that a
157     claimant, estate, or trust is entitled to a tax credit as provided in this section and stating the
158     amount of the tax credit.
159          (2) A qualified taxpayer may claim a nonrefundable tax credit against tax otherwise
160     due under this chapter:
161          (a) in an amount equal to:
162          [(i) $25,000, if the qualified purchase of a natural gas heavy duty vehicle occurs during
163     calendar year 2015 or calendar year 2016;]
164          [(ii) $25,000, if the qualified purchase occurs during calendar year 2017;]
165          [(iii) $20,000, if the qualified purchase occurs during calendar year 2018;]
166          [(iv) $18,000, if the qualified purchase occurs during calendar year 2019; and]
167          [(v)] (i) $15,000, if the qualified purchase occurs during calendar year 2020; [and]
168          (ii) $13,500, if the qualified purchase occurs during calendar year 2021;
169          (iii) $12,000, if the qualified purchase occurs during calendar year 2022;
170          (iv) $10,500, if the qualified purchase occurs during calendar year 2023;
171          (v) $9,000, if the qualified purchase occurs during calendar year 2024;
172          (vi) $7,500, if the qualified purchase occurs during calendar year 2025;
173          (vii) $6,000, if the qualified purchase occurs during calendar year 2026;
174          (viii) $4,500, if the qualified purchase occurs during calendar year 2027;
175          (ix) $3,000, if the qualified purchase occurs during calendar year 2028; and
176          (x) $1,500, if the qualified purchase occurs during calendar year 2029; and
177          (b) if the qualified taxpayer certifies under oath that over 50% of the miles that the
178     heavy duty vehicle that is the subject of the qualified purchase will travel annually will be
179     within the state.
180          (3) (a) Except as provided in Subsection (3)(b), a claimant, estate, or trust may not
181     submit an application for, and the director may not issue to the claimant, estate, or trust, a tax
182     credit certificate under this section in any taxable year for a qualified purchase if the director
183     has already issued tax credit certificates to the claimant, estate, or trust for 10 qualified
184     purchases in the same taxable year.
185          (b) If, by May 1 of any year, more than 30% of the aggregate annual total amount of
186     tax credits under Subsection (5) has not been claimed, a claimant, estate, or trust may submit
187     an application for, and the director may issue to the claimant, estate, or trust, one or more tax
188     credit certificates for up to eight additional qualified purchases, even if the director has already
189     issued to that claimant, estate, or trust tax credit certificates for the maximum number of
190     qualified purchases allowed under Subsection (3)(a).
191          (4) (a) Subject to Subsection (4)(b), the director shall reserve 25% of all tax credits
192     available under this section for qualified taxpayers with a small fleet.
193          (b) Subsection (4)(a) does not prevent a claimant, estate, or trust from submitting an
194     application for, or the director from issuing, a tax credit certificate if, before October 1,
195     qualified taxpayers with a small fleet have not reserved under Subsection (5)(b) tax credits for
196     the full amount reserved under Subsection (4)(a).
197          (5) (a) The aggregate annual total amount of tax credits represented by tax credit
198     certificates that the director issues under this section and Section 59-7-618 may not exceed
199     $500,000.
200          (b) The board shall, in accordance with Title 63G, Chapter 3, Utah Administrative
201     Rulemaking Act, make rules to establish a process under which a claimant, estate, or trust may
202     reserve a potential tax credit under this section for a limited time to allow the claimant, estate,
203     or trust to make a qualified purchase with the assurance that the aggregate limit under
204     Subsection (5)(a) will not be met before the claimant, estate, or trust is able to submit an
205     application for a tax credit certificate.
206          (6) (a) (i) A claimant, estate, or trust wishing to claim a tax credit under this section
207     shall, using forms the board requires by rule:
208          (A) submit to the director an application for a tax credit;
209          (B) provide the director proof of a qualified purchase; and
210          (C) submit to the director the certification under oath required under Subsection (2)(b).
211          (ii) Upon receiving the application, proof, and certification required under Subsection
212     (6)(a)(i), the director shall provide the claimant, estate, or trust a written statement from the
213     director acknowledging receipt of the proof.
214          (b) If the director determines that a claimant, estate, or trust qualifies for a tax credit
215     under this section, the director shall:
216          (i) determine the amount of tax credit the claimant, estate, or trust is allowed under this
217     section; and
218          (ii) provide the claimant, estate, or trust with a written tax credit certificate:
219          (A) stating that the claimant, estate, or trust has qualified for a tax credit; and
220          (B) showing the amount of tax credit for which the claimant, estate, or trust has
221     qualified under this section.
222          (c) A qualified taxpayer shall retain the tax credit certificate.
223          (d) The director shall at least annually submit to the commission a list of all qualified
224     taxpayers to which the director has issued a tax credit certificate and the amount of each tax
225     credit represented by the tax credit certificates.
226          (7) The tax credit under this section is allowed only:
227          (a) against a tax owed under this chapter in the taxable year by the qualified taxpayer;
228          (b) for the taxable year in which the qualified purchase occurs; and
229          (c) once per vehicle.
230          (8) A qualified taxpayer may not assign a tax credit or a tax credit certificate under this
231     section to another person.
232          (9) If the qualified taxpayer receives a tax credit certificate under this section that
233     allows a tax credit in an amount that exceeds the qualified taxpayer's tax liability under this
234     chapter for a taxable year, the qualified taxpayer may carry forward the amount of the tax credit
235     that exceeds the tax liability for a period that does not exceed the next five taxable years.
236          [(10) (a) In accordance with any rules prescribed by the commission under Subsection
237     (10)(b), the Division of Finance shall transfer at least annually from the General Fund into the
238     Education Fund the aggregate amount of all tax credits claimed under this section.]
239          [(b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
240     the commission may make rules for making a transfer from the General Fund into the
241     Education Fund as required by Subsection (10)(a).]
242          Section 3. Section 63I-1-259 is amended to read:
243          63I-1-259. Repeal dates, Title 59.
244          (1) Section 59-1-213.1 is repealed on May 9, 2024.
245          (2) Section 59-1-213.2 is repealed on May 9, 2024.
246          (3) Subsection 59-1-405(1)(g) is repealed on May 9, 2024.
247          (4) Subsection 59-1-405(2)(b) is repealed on May 9, 2024.
248          (5) Section 59-7-618 is repealed July 1, [2020] 2029.
249          (6) Section 59-9-102.5 is repealed December 31, 2020.
250          (7) Section 59-10-1033 is repealed July 1, [2020] 2029.
251          (8) Subsection 59-12-2219(13), which addresses new revenue supplanting existing
252     allocations, is repealed on June 30, 2020.
253          (9) Title 59, Chapter 28, State Transient Room Tax Act, is repealed on January 1,
254     2023.