7 LONG TITLE
8 General Description:
9 This bill enacts nonrefundable corporate and individual income tax credits related to
10 certain alternative fuel vehicles.
11 Highlighted Provisions:
12 This bill:
13 ▸ creates nonrefundable corporate and individual income tax credits for the purchase
14 or lease of certain alternative fuel vehicles;
15 ▸ defines terms;
16 ▸ creates an application process for the purchaser or lessee to receive a tax credit
17 certificate from the director of the Division of Air Quality; and
18 ▸ sets a termination date for the tax credit but requires legislative review before the
19 termination date.
20 Money Appropriated in this Bill:
22 Other Special Clauses:
23 This bill provides a special effective date.
24 Utah Code Sections Affected:
26 19-2-107, as last amended by Laws of Utah 2018, Chapter 281
27 63I-1-219, as last amended by Laws of Utah 2019, Chapters 62, 63, 64, 65, 246, 469,
28 and 477
29 63I-1-259, as last amended by Laws of Utah 2019, Chapters 29 and 479
31 19-2-401, Utah Code Annotated 1953
32 19-2-402, Utah Code Annotated 1953
33 59-7-625, Utah Code Annotated 1953
34 59-10-1041, Utah Code Annotated 1953
36 Be it enacted by the Legislature of the state of Utah:
37 Section 1. Section 19-2-107 is amended to read:
38 19-2-107. Director -- Appointment -- Powers.
39 (1) The executive director shall appoint the director. The director shall serve under the
40 administrative direction of the executive director.
41 (2) (a) The director shall:
42 (i) prepare and develop comprehensive plans for the prevention, abatement, and control
43 of air pollution in Utah;
44 (ii) advise, consult, and cooperate with other agencies of the state, the federal
45 government, other states and interstate agencies, and affected groups, political subdivisions,
46 and industries in furtherance of the purposes of this chapter;
47 (iii) review plans, specifications, or other data relative to air pollution control
48 equipment or any part of the air pollution control equipment;
49 (iv) under the direction of the executive director, represent the state in all matters
50 relating to interstate air pollution, including interstate compacts and similar agreements;
51 (v) secure necessary scientific, technical, administrative, and operational services,
52 including laboratory facilities, by contract or otherwise;
53 (vi) encourage voluntary cooperation by persons and affected groups to achieve the
54 purposes of this chapter;
55 (vii) encourage local units of government to handle air pollution within their respective
56 jurisdictions on a cooperative basis and provide technical and consulting assistance to them;
57 (viii) determine by means of field studies and sampling the degree of air contamination
58 and air pollution in all parts of the state;
59 (ix) monitor the effects of the emission of air pollutants from motor vehicles on the
60 quality of the outdoor atmosphere in all parts of Utah and take appropriate responsive action;
61 (x) collect and disseminate information relating to air contamination and air pollution
62 and conduct educational and training programs relating to air contamination and air pollution;
63 (xi) assess and collect noncompliance penalties as required in Section 120 of the
64 federal Clean Air Act, 42 U.S.C. Section 7420;
65 (xii) comply with the requirements of federal air pollution laws;
66 (xiii) subject to the provisions of this chapter, enforce rules through the issuance of
67 orders, including:
68 (A) prohibiting or abating discharges of wastes affecting ambient air;
69 (B) requiring the construction of new control facilities or any parts of new control
70 facilities or the modification, extension, or alteration of existing control facilities or any parts
71 of new control facilities; or
72 (C) adopting other remedial measures to prevent, control, or abate air pollution; [
73 (xiv) as authorized by the board and subject to the provisions of this chapter, act as
74 executive secretary of the board under the direction of the chairman of the board[
75 (xv) issue a tax credit certificate in accordance with Chapter 2, Part 4, Tax Credit for
76 Alternative Fuel Vehicle.
77 (b) The director may:
78 (i) employ full-time, temporary, part-time, and contract employees necessary to carry
79 out this chapter;
80 (ii) subject to the provisions of this chapter, authorize an employee or representative of
81 the department to enter at reasonable times and upon reasonable notice in or upon public or
82 private property for the purposes of inspecting and investigating conditions and plant records
83 concerning possible air pollution;
84 (iii) encourage, participate in, or conduct studies, investigations, research, and
85 demonstrations relating to air pollution and its causes, effects, prevention, abatement, and
86 control, as advisable and necessary for the discharge of duties assigned under this chapter,
87 including the establishment of inventories of pollution sources;
88 (iv) collect and disseminate information relating to air pollution and the prevention,
89 control, and abatement of it;
90 (v) cooperate with studies and research relating to air pollution and its control,
91 abatement, and prevention;
92 (vi) subject to Subsection (3), upon request, consult concerning the following with a
93 person proposing to construct, install, or otherwise acquire an air pollutant source in Utah:
94 (A) the efficacy of proposed air pollution control equipment for the source; or
95 (B) the air pollution problem that may be related to the source;
96 (vii) accept, receive, and administer grants or other funds or gifts from public and
97 private agencies, including the federal government, for the purpose of carrying out any of the
98 functions of this chapter;
99 (viii) subject to Subsection 19-2-104(3)(b)(i), settle or compromise a civil action
100 initiated by the division to compel compliance with this chapter or the rules made under this
101 chapter; or
102 (ix) subject to the provisions of this chapter, exercise all incidental powers necessary to
103 carry out the purposes of this chapter, including certification to state or federal authorities for
104 tax purposes that air pollution control equipment has been certified in conformity with Title 19,
105 Chapter 12, Pollution Control Act.
106 (3) A consultation described in Subsection (2)(b)(vi) does not relieve a person from the
107 requirements of this chapter, the rules adopted under this chapter, or any other provision of
109 Section 2. Section 19-2-401 is enacted to read:
111 19-2-401. Definitions.
112 (1) As used in this part:
113 (a) "Electric motor vehicle" means the same as the term is defined in Section
115 (b) "Hydrogen vehicle" means a motor vehicle that is powered by hydrogen fuel or a
116 hydrogen fuel cell.
117 (c) "Lease" means using an electric motor vehicle, a hydrogen vehicle, or a plug-in
118 hybrid electric motor vehicle:
119 (i) for a period of two years or longer; and
120 (ii) according to a contractual arrangement under which a person pays money for the
122 (d) "Motor vehicle" means the same as that term is defined in Section 41-1a-102.
123 (e) "Plug-in hybrid electric motor vehicle" means the same as that term is defined in
124 Section 41-1a-102.
125 (f) "Qualifying alternative fuel vehicle" means a new or used electric motor vehicle,
126 hydrogen vehicle, or plug-in hybrid electric motor vehicle:
127 (i) that the applicant purchases or leases on or after January 1, 2021;
128 (ii) (A) that the applicant purchases for $45,000 or less; or
129 (B) if the applicant leases the vehicle, that has a manufacturer's suggested retail price of
130 $45,000 or less;
131 (iii) that is subject to sales and use tax under Title 59, Chapter 12, Sales and Use Tax
132 Act, and for which the applicant did not claim a sales and use tax exemption under Section
133 59-12-104; and
134 (iv) for which the director has not previously issued a tax credit certificate to any
135 applicant under this part.
136 (g) "Qualifying application" means an application that meets the requirements of
137 Subsection 19-2-402(1).
138 (h) "Tax credit" means a tax credit described in:
139 (i) Section 59-7-625, if an applicant files an income tax return under Title 59, Chapter
140 7, Corporate Franchise and Income Taxes; or
141 (ii) Section 59-10-1041, if an applicant files an income tax return under Title 59,
142 Chapter 10, Individual Income Tax Act.
143 Section 3. Section 19-2-402 is enacted to read:
144 19-2-402. Application for and issuance of tax credit certificate for tax credit for
145 alternative fuel vehicle.
146 (1) An applicant that seeks to claim a tax credit shall:
147 (a) apply to the director for a tax credit certificate on a form provided by the director
148 and approved by the State Tax Commission; and
149 (b) include with the application, proof that the applicant purchased or leased a
150 qualifying alternative fuel vehicle during the year for which the applicant seeks to claim a tax
152 (2) (a) The director shall issue a tax credit certificate to an applicant that the director
154 (i) purchased or leased a qualifying alternative fuel vehicle during the year for which
155 the applicant seeks a tax credit; and
156 (ii) completed a qualifying application.
157 (b) The tax credit certificate shall state the amount of the applicant's tax credit, which
158 is, subject to Subsection (3), equal to 8.9% of:
159 (i) if the applicant purchases the qualifying alternative fuel vehicle, the purchase price;
161 (ii) if the applicant leases the qualifying alternative fuel vehicle, the total amount of the
162 lease payments.
163 (3) (a) The maximum aggregate amount of tax credit certificates that the director may
164 issue for a year is $3,000,000.
165 (b) If the director receives qualifying applications for tax credit certificates that exceed
166 the aggregate amount of tax credit certificates that the director may issue for a year, the director
167 shall issue the tax credit certificates:
168 (i) in the order that the director receives the qualifying applications until the total
169 aggregate amount is met; and
170 (ii) for the final applicant to receive a tax credit certificate, in an amount equal to the
171 difference between the maximum aggregate dollar amount described in this Subsection (3) and
172 the aggregate dollar amount of the tax credit certificates that the director has already issued for
173 the year.
174 (4) The director shall submit to the State Tax Commission an electronic list that
176 (a) the name and identifying information of each applicant to which the director issues
177 a tax credit certificate; and
178 (b) for each applicant, the amount of the tax credit stated on the tax credit certificate.
179 Section 4. Section 59-7-625 is enacted to read:
180 59-7-625. Nonrefundable tax credit for purchase or lease of alternative fuel
182 (1) "Qualifying alternative fuel vehicle" means the same as that term is defined in
183 Section 19-2-401.
184 (2) A taxpayer that has a tax credit certificate issued in accordance with Section
185 19-2-402 may claim a nonrefundable tax credit for the purchase or lease of a qualifying
186 alternative fuel vehicle in an amount equal to the amount stated on the tax credit certificate.
187 (3) (a) A taxpayer may carry forward, to the next five taxable years, the amount of the
188 tax credit that exceeds the taxpayer's income tax liability for the taxable year.
189 (b) A taxpayer may not carry back the amount of the tax credit that exceeds the
190 taxpayer's income tax liability for the taxable year.
191 Section 5. Section 59-10-1041 is enacted to read:
192 59-10-1041. Nonrefundable tax credit for purchase or lease of alternative fuel
194 (1) "Qualifying alternative fuel vehicle" means the same as that term is defined in
195 Section 19-2-401.
196 (2) A claimant, estate, or trust that has a tax credit certificate issued in accordance with
197 Section 19-2-402 may claim a nonrefundable tax credit for the purchase or lease of a qualifying
198 alternative fuel vehicle in an amount equal to the amount stated on the tax credit certificate.
199 (3) (a) A claimant, estate, or trust may carry forward, to the next five taxable years, the
200 amount of the tax credit that exceeds the claimant's, estate's, or trust's income tax liability for
201 the taxable year.
202 (b) A claimant, estate, or trust may not carry back the amount of the tax credit that
203 exceeds the claimant's, estate's, or trust's income tax liability for the taxable year.
204 Section 6. Section 63I-1-219 is amended to read:
205 63I-1-219. Repeal dates, Title 19.
206 (1) Subsection 19-2-107(2)(a)(xv), which relates to issuing a tax credit certificate, is
207 repealed January 1, 2024.
208 (2) Title 19, Chapter 2, Part 4, Tax Credit for Alternative Fuel Vehicle, is repealed
209 January 1, 2024.
218 July 1, 2020.
220 1, 2028.
228 1, 2027.
229 Section 7. Section 63I-1-259 is amended to read:
230 63I-1-259. Repeal dates, Title 59.
231 (1) Section 59-1-213.1 is repealed on May 9, 2024.
232 (2) Section 59-1-213.2 is repealed on May 9, 2024.
233 (3) Subsection 59-1-405(1)(g) is repealed on May 9, 2024.
234 (4) Subsection 59-1-405(2)(b) is repealed on May 9, 2024.
235 (5) Section 59-7-618 is repealed July 1, 2020.
236 (6) Section 59-7-625 is repealed January 1, 2024.
239 (9) Section 59-10-1041 is repealed January 1, 2024.
241 existing allocations, is repealed on June 30, 2020.
243 1, 2023.
244 Section 8. Effective date.
245 This bill takes effect for a taxable year that begins on or after January 1, 2021.