1     
TAX CREDIT FOR ALTERNATIVE FUEL VEHICLES

2     
2022 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Suzanne Harrison

5     
Senate Sponsor: ____________

6     

7     LONG TITLE
8     General Description:
9          This bill enacts income tax credits for the purchase or lease of an alternative fuel
10     vehicle.
11     Highlighted Provisions:
12          This bill:
13          ▸     defines terms;
14          ▸     enacts a nonrefundable corporate and individual income tax credit for the purchase
15     or lease of an alternative fuel vehicle;
16          ▸     provides a process for a taxpayer to assign a tax credit to the dealer;
17          ▸     requires the Air Quality Board to create a form to facilitate assignment of the tax
18     credit; and
19          ▸     sets a termination date for the credit but requires legislative review before the
20     termination date.
21     Money Appropriated in this Bill:
22          None
23     Other Special Clauses:
24          None
25     Utah Code Sections Affected:
26     AMENDS:
27          19-2-104, as last amended by Laws of Utah 2020, Chapter 354

28          63I-2-259, as last amended by Laws of Utah 2021, Chapter 370
29     ENACTS:
30          59-7-627, Utah Code Annotated 1953
31          59-10-1044, Utah Code Annotated 1953
32     

33     Be it enacted by the Legislature of the state of Utah:
34          Section 1. Section 19-2-104 is amended to read:
35          19-2-104. Powers of board.
36          (1) The board may make rules in accordance with Title 63G, Chapter 3, Utah
37     Administrative Rulemaking Act:
38          (a) regarding the control, abatement, and prevention of air pollution from all sources
39     and the establishment of the maximum quantity of air pollutants that may be emitted by an air
40     pollutant source;
41          (b) establishing air quality standards;
42          (c) requiring persons engaged in operations that result in air pollution to:
43          (i) install, maintain, and use emission monitoring devices, as the board finds necessary;
44          (ii) file periodic reports containing information relating to the rate, period of emission,
45     and composition of the air pollutant; and
46          (iii) provide access to records relating to emissions which cause or contribute to air
47     pollution;
48          (d) (i) implementing:
49          (A) Toxic Substances Control Act, Subchapter II, Asbestos Hazard Emergency
50     Response, 15 U.S.C. 2601 et seq.;
51          (B) 40 C.F.R. Part 763, Asbestos; and
52          (C) 40 C.F.R. Part 61, National Emission Standards for Hazardous Air Pollutants,
53     Subpart M, National Emission Standard for Asbestos; and
54          (ii) reviewing and approving asbestos management plans submitted by local education
55     agencies under the Toxic Substances Control Act, Subchapter II, Asbestos Hazard Emergency
56     Response, 15 U.S.C. 2601 et seq.;
57          (e) establishing a requirement for a diesel emission opacity inspection and maintenance
58     program for diesel-powered motor vehicles;

59          (f) implementing an operating permit program as required by and in conformity with
60     Titles IV and V of the federal Clean Air Act Amendments of 1990;
61          (g) establishing requirements for county emissions inspection and maintenance
62     programs after obtaining agreement from the counties that would be affected by the
63     requirements;
64          (h) with the approval of the governor, implementing in air quality nonattainment areas
65     employer-based trip reduction programs applicable to businesses having more than 100
66     employees at a single location and applicable to federal, state, and local governments to the
67     extent necessary to attain and maintain ambient air quality standards consistent with the state
68     implementation plan and federal requirements under the standards set forth in Subsection (2);
69          (i) implementing lead-based paint training, certification, and performance requirements
70     in accordance with 15 U.S.C. 2601 et seq., Toxic Substances Control Act, Subchapter IV --
71     Lead Exposure Reduction, Sections 402 and 406; and
72          (j) to implement the requirements of Section 19-2-107.5.
73          (2) When implementing Subsection (1)(h) the board shall take into consideration:
74          (a) the impact of the business on overall air quality; and
75          (b) the need of the business to use automobiles in order to carry out its business
76     purposes.
77          (3) (a) The board may:
78          (i) hold a hearing that is not an adjudicative proceeding relating to any aspect of, or
79     matter in, the administration of this chapter;
80          (ii) recommend that the director:
81          (A) issue orders necessary to enforce the provisions of this chapter;
82          (B) enforce the orders by appropriate administrative and judicial proceedings;
83          (C) institute judicial proceedings to secure compliance with this chapter; or
84          (D) advise, consult, contract, and cooperate with other agencies of the state, local
85     governments, industries, other states, interstate or interlocal agencies, the federal government,
86     or interested persons or groups; and
87          (iii) establish certification requirements for asbestos project monitors, which shall
88     provide for experience-based certification of a person who:
89          (A) receives relevant asbestos training, as defined by rule; and

90          (B) has acquired a minimum of 1,000 hours of asbestos project monitoring related
91     work experience.
92          (b) The board shall:
93          (i) to ensure compliance with applicable statutes and regulations:
94          (A) review a settlement negotiated by the director in accordance with Subsection
95     19-2-107(2)(b)(viii) that requires a civil penalty of $25,000 or more; and
96          (B) approve or disapprove the settlement;
97          (ii) encourage voluntary cooperation by persons and affected groups to achieve the
98     purposes of this chapter;
99          (iii) meet the requirements of federal air pollution laws;
100          (iv) by rule in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
101     Act, establish work practice and certification requirements for persons who:
102          (A) contract for hire to conduct demolition, renovation, salvage, encapsulation work
103     involving friable asbestos-containing materials, or asbestos inspections if:
104          (I) the contract work is done on a site other than a residential property with four or
105     fewer units; or
106          (II) the contract work is done on a residential property with four or fewer units where a
107     tested sample contained greater than 1% of asbestos;
108          (B) conduct work described in Subsection (3)(b)(iv)(A) in areas to which the general
109     public has unrestrained access or in school buildings that are subject to the federal Asbestos
110     Hazard Emergency Response Act of 1986;
111          (C) conduct asbestos inspections in facilities subject to 15 U.S.C. 2601 et seq., Toxic
112     Substances Control Act, Subchapter II - Asbestos Hazard Emergency Response; or
113          (D) conduct lead-based paint inspections in facilities subject to 15 U.S.C. 2601 et seq.,
114     Toxic Substances Control Act, Subchapter IV -- Lead Exposure Reduction;
115          (v) establish certification requirements for a person required under 15 U.S.C. 2601 et
116     seq., Toxic Substances Control Act, Subchapter II - Asbestos Hazard Emergency Response, to
117     be accredited as an inspector, management planner, abatement project designer, asbestos
118     abatement contractor and supervisor, or an asbestos abatement worker;
119          (vi) establish certification requirements for a person required under 15 U.S.C. 2601 et
120     seq., Toxic Control Act, Subchapter IV - Lead Exposure Reduction, to be accredited as an

121     inspector, risk assessor, supervisor, project designer, abatement worker, renovator, or dust
122     sampling technician; [and]
123          (vii) assist the State Board of Education in adopting school bus idling reduction
124     standards and implementing an idling reduction program in accordance with Section
125     41-6a-1308[.]; and
126          (viii) on or before January 1, 2023, create a standard election statement for use as
127     described in Sections 59-7-627 and 59-10-1044.
128          (4) A rule adopted under this chapter shall be consistent with provisions of federal
129     laws, if any, relating to control of motor vehicles or motor vehicle emissions.
130          (5) Nothing in this chapter authorizes the board to require installation of or payment for
131     any monitoring equipment by the owner or operator of a source if the owner or operator has
132     installed or is operating monitoring equipment that is equivalent to equipment which the board
133     would require under this section.
134          (6) (a) The board may not require testing for asbestos or related materials on a
135     residential property with four or fewer units, unless:
136          (i) the property's construction was completed before January 1, 1981; or
137          (ii) the testing is for:
138          (A) a sprayed-on or painted on ceiling treatment that contained or may contain asbestos
139     fiber;
140          (B) asbestos cement siding or roofing materials;
141          (C) resilient flooring products including vinyl asbestos tile, sheet vinyl products,
142     resilient flooring backing material, whether attached or unattached, and mastic;
143          (D) thermal-system insulation or tape on a duct or furnace; or
144          (E) vermiculite type insulation materials.
145          (b) A residential property with four or fewer units is subject to an abatement rule made
146     under Subsection (1) or (3)(b)(iv) if:
147          (i) a sample from the property is tested for asbestos; and
148          (ii) the sample contains asbestos measuring greater than 1%.
149          (7) The board may not issue, amend, renew, modify, revoke, or terminate any of the
150     following that are subject to the authority granted to the director under Section 19-2-107 or
151     19-2-108:

152          (a) a permit;
153          (b) a license;
154          (c) a registration;
155          (d) a certification; or
156          (e) another administrative authorization made by the director.
157          (8) A board member may not speak or act for the board unless the board member is
158     authorized by a majority of a quorum of the board in a vote taken at a meeting of the board.
159          (9) Notwithstanding Subsection (7), the board may exercise all authority granted to the
160     board by a federally enforceable state implementation plan.
161          Section 2. Section 59-7-627 is enacted to read:
162          59-7-627. Nonrefundable tax credit for alternative fuel vehicles.
163          (1) As used in this section:
164          (a) "Board" means the Air Quality Board appointed in accordance with Section
165     19-2-103.
166          (b) "Committee" means the Revenue and Taxation Interim Committee.
167          (c) "Electric motor vehicle" means the same as that term is defined in Section
168     41-1a-102.
169          (d) "Election statement" means a form created by the board that:
170          (i) (A) is executed by a purchaser or lessee of a qualifying alternative fuel vehicle; and
171          (B) the dealer;
172          (ii) identifies the vehicle identification number and the sales price of the qualifying
173     alternative fuel vehicle; and
174          (iii) affirms that the requirements of Subsection (3) have been met.
175          (e) "Hydrogen vehicle" means a motor vehicle that is powered by hydrogen fuel or a
176     hydrogen fuel cell.
177          (f) "Lease" means using a qualifying alternative fuel vehicle:
178          (i) for a period of two years or longer; and
179          (ii) according to a contractual arrangement under which a person pays money for the
180     use.
181          (g) "Motor vehicle" means the same as that term is defined in Section 41-1a-102.
182          (h) (i) "Passenger vehicle" means a motor vehicle that is manufactured primarily for

183     the purpose of carrying passengers.
184          (ii) "Passenger vehicle" does not include a motorcycle.
185          (i) "Plug-in hybrid electric vehicle" means the same as that term is defined in Section
186     41-1a-102.
187          (j) "Qualifying alternative fuel vehicle" means a new or used electric motor vehicle,
188     hydrogen vehicle, or plug-in hybrid electric vehicle:
189          (i) that is a passenger vehicle or a motorcycle;
190          (ii) that is purchased or leased on or after January 1, 2023;
191          (iii) that has a sales price of $55,000 or less;
192          (iv) (A) that is subject to sales and use tax under Chapter 12, Sales and Use Tax Act;
193     and
194          (B) for which the purchaser or lessee did not claim a sales and use tax exemption under
195     Section 59-12-104; and
196          (v) for which an income tax credit under this section or Section 59-10-1044 has not
197     previously been claimed.
198          (k) "Qualifying taxpayer" means a taxpayer that has not assigned a tax credit under this
199     section in accordance with Subsection (3).
200          (l) "Sales price" means:
201          (i) for the purchase of a qualifying alternative fuel vehicle, the price before subtracting:
202          (A) the value of any trade-in vehicle;
203          (B) the amount of a tax credit under this section; and
204          (C) the amount of sales and use tax due under Chapter 12, Sales and Use Tax Act; or
205          (ii) for a lease of a qualifying alternative fuel vehicle, the manufacturer's suggested
206     retail price.
207          (2) For a taxable year beginning on or after January 1, 2023, but beginning on or before
208     December 31, 2026, a qualifying taxpayer or a dealer may claim a nonrefundable tax credit for
209     the purchase or lease of a qualifying alternative fuel vehicle equal to:
210          (a) $3,000, for the purchase of a new qualifying alternative fuel vehicle that is a
211     passenger vehicle;
212          (b) $2,000, for the purchase of a used qualifying alternative fuel vehicle that is a
213     passenger vehicle;

214          (c) $1,500, for the purchase of a new qualifying alternative fuel vehicle that is a
215     motorcycle;
216          (d) $1,000, for the purchase of a used qualifying alternative fuel vehicle that is a
217     motorcycle;
218          (e) $1,500, for the lease of a qualifying alternative fuel vehicle that is a passenger
219     vehicle; or
220          (f) $1,000, for the lease of a qualifying alternative fuel vehicle that is a motorcycle.
221          (3) (a) Except as provided in Subsection (3)(b), a taxpayer may not assign a tax credit
222     under this section to another person.
223          (b) A taxpayer shall assign a tax credit under this section to a dealer as follows:
224          (i) in exchange for the consideration described in Subsection (3)(b)(iv), the taxpayer
225     shall assign the tax credit to the dealer and forfeit the right to claim the tax credit on the
226     taxpayer's income tax return;
227          (ii) the taxpayer shall assign the tax credit to the dealer by executing an election
228     statement at the time of the purchase or lease of a qualifying alternative fuel vehicle;
229          (iii) the taxpayer shall register and title the vehicle in the state as required by Title 41,
230     Chapter 1a, Part 2, Registration, and Title 41, Chapter 1a, Part 5, Titling Requirement; and
231          (iv) the dealer shall subtract the amount of the applicable tax credit described in
232     Subsection (2) for the type of qualifying alternative fuel vehicle purchased or leased, minus an
233     administrative fee equal to or less than $150, from the purchase or lease price of the vehicle.
234          (c) A dealer shall retain the election statement for the same time period that a person is
235     required to keep books and records under Section 59-1-1406.
236          (4) (a) A qualifying taxpayer that claims a tax credit under this section shall claim the
237     tax credit for the taxable year in which the qualifying taxpayer purchases or leases the
238     qualifying alternative fuel vehicle.
239          (b) A qualifying taxpayer may carry forward, for the next three taxable years, the
240     amount of the tax credit that exceeds the qualifying taxpayer's income tax liability for the
241     taxable year.
242          (c) A qualifying taxpayer may not carry back the amount of the tax credit that exceeds
243     the qualifying taxpayer's income tax liability.
244          (5) (a) A dealer may claim a tax credit assigned to the dealer under Subsection (3):

245          (i) against a tax owed under this chapter or Chapter 10, Individual Income Tax Act;
246     and
247          (ii) for the taxable year in which the taxpayer purchases or leases a qualifying
248     alternative fuel vehicle.
249          (b) A dealer may carry forward, for the next three taxable years, the amount of the tax
250     credit that exceeds the dealer's income tax liability for the taxable year.
251          (6) (a) On or after May 1, 2026, but on or before November 30, 2026, the committee
252     shall review the tax credit described in this section to determine whether the tax credit should
253     be continued.
254          (b) In conducting the review required under Subsection (6)(a), the committee shall:
255          (i) schedule time on at least one committee agenda to conduct the review;
256          (ii) invite state agencies, individuals, and organizations concerned with the tax credit to
257     provide testimony; and
258          (iii) ensure that the committee's review includes an evaluation of:
259          (A) the cost of the tax credit to the state;
260          (B) the purpose and effectiveness of the tax credit; and
261          (C) the extent to which the state benefits from the tax credit.
262          Section 3. Section 59-10-1044 is enacted to read:
263          59-10-1044. Nonrefundable tax credit for alternative fuel vehicles.
264          (1) As used in this section:
265          (a) "Board" means the Air Quality Board appointed in accordance with Section
266     19-2-103.
267          (b) "Committee" means the Revenue and Taxation Interim Committee.
268          (c) "Electric motor vehicle" means the same as that term is defined in Section
269     41-1a-102.
270          (d) "Election statement" means a form created by the board that:
271          (i) (A) is executed by a purchaser or lessee of a qualifying alternative fuel vehicle; and
272          (B) the dealer;
273          (ii) identifies the vehicle identification number and the sales price of the qualifying
274     alternative fuel vehicle; and
275          (iii) affirms that the requirements of Subsection (3) have been met.

276          (e) "Hydrogen vehicle" means a motor vehicle that is powered by hydrogen fuel or a
277     hydrogen fuel cell.
278          (f) "Lease" means using a qualifying alternative fuel vehicle:
279          (i) for a period of two years or longer; and
280          (ii) according to a contractual arrangement under which a person pays money for the
281     use.
282          (g) "Motor vehicle" means the same as that term is defined in Section 41-1a-102.
283          (h) (i) "Passenger vehicle" means a motor vehicle that is manufactured primarily for
284     the purpose of carrying passengers.
285          (ii) "Passenger vehicle" does not include a motorcycle.
286          (i) "Plug-in hybrid electric vehicle" means the same as that term is defined in Section
287     41-1a-102.
288          (j) "Qualifying alternative fuel vehicle" means a new or used electric motor vehicle,
289     hydrogen vehicle, or plug-in hybrid electric vehicle:
290          (i) that is a passenger vehicle or a motorcycle;
291          (ii) that is purchased or leased on or after January 1, 2023;
292          (iii) that has a sales price of $55,000 or less;
293          (iv) (A) that is subject to sales and use tax under Chapter 12, Sales and Use Tax Act;
294     and
295          (B) for which the purchaser or lessee did not claim a sales and use tax exemption under
296     Subsection 59-12-104; and
297          (v) for which an income tax credit under this section or Section 59-7-627 has not
298     previously been claimed.
299          (k) "Qualifying claimant" means a claimant, estate, or trust that has not assigned a tax
300     credit under this section in accordance with Subsection (3).
301          (l) "Sales price" means:
302          (i) for the purchase of a qualifying alternative fuel vehicle, the price before subtracting:
303          (A) the value of any trade-in vehicle;
304          (B) the amount of a tax credit under this section; and
305          (C) the amount of sales and use tax due under Chapter 12, Sales and Use Tax Act; or
306          (ii) for a lease of a qualifying alternative fuel vehicle, the manufacturer's suggested

307     retail price.
308          (2) For a taxable year beginning on or after January 1, 2023, but beginning on or before
309     December 31, 2026, a qualifying claimant, estate, or trust or a dealer may claim a
310     nonrefundable tax credit for the purchase or lease of a qualifying alternative fuel vehicle equal
311     to:
312          (a) $3,000, for the purchase of a new qualifying alternative fuel vehicle that is a
313     passenger vehicle;
314          (b) $2,000, for the purchase of a used qualifying alternative fuel vehicle that is a
315     passenger vehicle;
316          (c) $1,500, for the purchase of a new qualifying alternative fuel vehicle that is a
317     motorcycle;
318          (d) $1,000, for the purchase of a used qualifying alternative fuel vehicle that is a
319     motorcycle;
320          (e) $1,500, for the lease of a qualifying alternative fuel vehicle that is a passenger
321     vehicle; or
322          (f) $1,000, for the lease of a qualifying alternative fuel vehicle that is a motorcycle.
323          (3) (a) Except as provided in Subsection (3)(b), a claimant, estate, or trust may not
324     assign a tax credit under this section to another person.
325          (b) A claimant, estate, or trust shall assign a tax credit under this section to a dealer as
326     follows:
327          (i) in exchange for the consideration described in Subsection (3)(b)(iv), the claimant,
328     estate, or trust shall assign the tax credit to the dealer and forfeit the right to claim the tax credit
329     on the claimant's, estate's, or trust's income tax return;
330          (ii) the claimant, estate, or trust shall assign the tax credit to the dealer by executing an
331     election statement at the time of the purchase or lease of a qualifying alternative fuel vehicle;
332          (iii) the claimant, estate, or trust shall register and title the vehicle in the state as
333     required by Title 41, Chapter 1a, Part 2, Registration, and Title 41, Chapter 1a, Part 5, Titling
334     Requirement; and
335          (iv) the dealer shall subtract the amount of the applicable tax credit described in
336     Subsection (2) for the type of qualifying alternative fuel vehicle purchased or leased, minus an
337     administrative fee equal to or less than $150, from the purchase or lease price of the vehicle.

338          (4) (a) A qualifying claimant that claims a tax credit under this section shall claim the
339     tax credit for the taxable year in which the qualifying claimant purchases or leases the
340     qualifying alternative fuel vehicle.
341          (b) A qualifying claimant may carry forward, for the next three taxable years, the
342     amount of the tax credit that exceeds the qualifying claimant's income tax liability for the
343     taxable year.
344          (c) A qualifying claimant may not carry back the amount of the tax credit that exceeds
345     the qualifying claimant's income tax liability.
346          (5) (a) A dealer may claim a tax credit assigned to the dealer under Subsection (3):
347          (i) against a tax owed under this chapter or Chapter 7, Corporate Franchise and Income
348     Taxes; and
349          (ii) for the taxable year in which the claimant, estate, or trust purchases or leases a
350     qualifying alternative fuel vehicle.
351          (b) A dealer may carry forward, for the next three taxable years, the amount of the tax
352     credit that exceeds the dealer's income tax liability for the taxable year.
353          (6) (a) On or after May 1, 2026, but on or before November 30, 2026, the committee
354     shall review the tax credit described in this section to determine whether the tax credit should
355     be continued.
356          (b) In conducting the review required under Subsection (6)(a), the committee shall:
357          (i) schedule time on at least one committee agenda to conduct the review;
358          (ii) invite state agencies, individuals, and organizations concerned with the tax credit to
359     provide testimony; and
360          (iii) ensure that the committee's review includes an evaluation of:
361          (A) the cost of the tax credit to the state;
362          (B) the purpose and effectiveness of the tax credit; and
363          (C) the extent to which the state benefits from the tax credit.
364          Section 4. Section 63I-2-259 is amended to read:
365          63I-2-259. Repeal dates -- Title 59.
366          (1) In Section 59-2-926, the language that states "applicable" and "or 53F-2-301.5" is
367     repealed July 1, 2023.
368          [(2) Subsection 59-7-106(1)(w) is repealed December 31, 2021.]

369          [(3) Section 59-7-620 is repealed December 31, 2021.]
370          [(4) Subsection 59-10-114(2)(j) is repealed December 31, 2021.]
371          (2) Section 59-7-627 is repealed December 31, 2028.
372          (3) Section 59-10-1044 is repealed December 31, 2028.