Representative Paul A. Cutler proposes the following substitute bill:


1     
TECHNOLOGY UPGRADE INCENTIVES AMENDMENTS

2     
2024 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Paul A. Cutler

5     
Senate Sponsor: ____________

6     

7     LONG TITLE
8     General Description:
9          This bill provides for tax incentives related to certain technology upgrades.
10     Highlighted Provisions:
11          This bill:
12          ▸     defines terms;
13          ▸     modifies the amount of the nonrefundable corporate and individual income tax
14     credit available for purchases of alternative fuel heavy duty vehicles;
15          ▸     establishes a nonrefundable corporate and individual income tax credit for
16     purchases of locomotive idle-reduction devices;
17          ▸     provides for a total aggregate limit on the amount of tax credits issued each year for
18     alternative fuel heavy duty vehicles and locomotive idle-reduction devices;
19          ▸     provides a sunset date for the income tax credit associated with locomotive
20     idle-reduction devices; and
21          ▸     makes technical and conforming changes.
22     Money Appropriated in this Bill:
23          None
24     Other Special Clauses:
25          This bill provides a special effective date.
26          This bill provides retrospective operation.
27     Utah Code Sections Affected:
28     AMENDS:
29          59-7-618.1, as enacted by Laws of Utah 2021, Chapter 371
30          59-10-1033.1, as enacted by Laws of Utah 2021, Chapter 371
31          63I-1-259, as last amended by Laws of Utah 2023, Chapter 52
32     ENACTS:
33          59-7-618.2, Utah Code Annotated 1953
34          59-10-1033.2, Utah Code Annotated 1953
35     

36     Be it enacted by the Legislature of the state of Utah:
37          Section 1. Section 59-7-618.1 is amended to read:
38          59-7-618.1. Tax credit related to alternative fuel heavy duty vehicles.
39          (1) As used in this section:
40          (a) "Board" means the Air Quality Board created under Title 19, Chapter 2, Air
41     Conservation Act.
42          (b) "Director" means the director of the Division of Air Quality appointed under
43     Section 19-2-107.
44          (c) "Heavy duty vehicle" means a commercial category 7 or 8 vehicle, according to
45     vehicle classifications established by the Federal Highway Administration.
46          (d) "Natural gas" includes compressed natural gas and liquified natural gas.
47          (e) "Qualified heavy duty vehicle" means a heavy duty vehicle that:
48          (i) has never been titled or registered and has been driven less than 7,500 miles; and
49          (ii) is fueled by natural gas, has a 100% electric drivetrain, or has a hydrogen-electric
50     drivetrain.
51          (f) "Qualified purchase" means the purchase of a qualified heavy duty vehicle.
52          (g) "Qualified taxpayer" means a taxpayer that:
53          (i) purchases a qualified heavy duty vehicle; and
54          (ii) receives a tax credit certificate from the director.
55          (h) "Small fleet" means 40 or fewer heavy duty vehicles registered in the state and
56     owned by a single taxpayer.
57          (i) "Tax credit certificate" means a certificate issued by the director certifying that a
58     taxpayer is entitled to a tax credit as provided in this section and stating the amount of the tax
59     credit.
60          (2) [A] For a taxable year beginning on or after January 1, 2024, and before January 1,
61     2031, a qualified taxpayer may claim a nonrefundable tax credit against tax otherwise due
62     under this chapter or Chapter 8, Gross Receipts Tax on Certain Corporations Not Required to
63     Pay Corporate Franchise or Income Tax Act:
64          (a) in an amount equal to[:] $15,000; and
65          [(i) $15,000, if the qualified purchase occurs during calendar year 2021;]
66          [(ii) $13,500, if the qualified purchase occurs during calendar year 2022;]
67          [(iii) $12,000, if the qualified purchase occurs during calendar year 2023;]
68          [(iv) $10,500, if the qualified purchase occurs during calendar year 2024;]
69          [(v) $9,000, if the qualified purchase occurs during calendar year 2025;]
70          [(vi) $7,500, if the qualified purchase occurs during calendar year 2026;]
71          [(vii) $6,000, if the qualified purchase occurs during calendar year 2027;]
72          [(viii) $4,500, if the qualified purchase occurs during calendar year 2028;]
73          [(ix) $3,000, if the qualified purchase occurs during calendar year 2029; and]
74          [(x) $1,500, if the qualified purchase occurs during calendar year 2030; and]
75          (b) if the qualified taxpayer certifies under oath that over 50% of the miles that the
76     heavy duty vehicle that is the subject of the qualified purchase will travel annually will be
77     within the state.
78          (3) (a) Except as provided in Subsection (3)(b), a taxpayer may not submit an
79     application for, and the director may not issue to the taxpayer, a tax credit certificate under this
80     section in any taxable year for a qualified purchase if the director has already issued tax credit
81     certificates to the taxpayer for 10 qualified purchases in the same taxable year.
82          (b) If, by May 1 of any year, more than 30% of the aggregate annual total amount of
83     tax credits under Subsection (5) has not been claimed, a taxpayer may submit an application
84     for, and the director may issue to the taxpayer, one or more tax credit certificates for up to eight
85     additional qualified purchases, even if the director has already issued to that taxpayer tax credit
86     certificates for the maximum number of qualified purchases allowed under Subsection (3)(a).
87          (4) (a) Subject to Subsection (4)(b), the director shall reserve 25% of all tax credits
88     available under this section for qualified taxpayers with a small fleet.
89          (b) Subsection (4)(a) does not prevent a taxpayer from submitting an application for, or
90     the director from issuing, a tax credit certificate if, before October 1, qualified taxpayers with a
91     small fleet have not reserved under Subsection (5)(b) tax credits for the full amount reserved
92     under Subsection (4)(a).
93          (5) (a) The aggregate annual total amount of tax credits represented by tax credit
94     certificates that the director issues under this section and [Section] Sections 59-7-618.2,
95     59-10-1033.1, and 59-10-1033.2 may not exceed $500,000.
96          (b) The board shall, in accordance with Title 63G, Chapter 3, Utah Administrative
97     Rulemaking Act, make rules to establish a process under which a taxpayer may reserve a
98     potential tax credit under this section for a limited time to allow the taxpayer to make a
99     qualified purchase with the assurance that the aggregate limit under Subsection (5)(a) will not
100     be met before the taxpayer is able to submit an application for a tax credit certificate.
101          (6) (a) (i) A taxpayer wishing to claim a tax credit under this section shall, using forms
102     the board requires by rule:
103          (A) submit to the director an application for a tax credit;
104          (B) provide the director proof of a qualified purchase; and
105          (C) submit to the director the certification under oath required under Subsection (2)(b).
106          (ii) Upon receiving the application, proof, and certification required under Subsection
107     (6)(a)(i), the director shall provide the taxpayer a written statement from the director
108     acknowledging receipt of the proof.
109          (b) If the director determines that a taxpayer qualifies for a tax credit under this section,
110     the director shall:
111          (i) determine the amount of tax credit the taxpayer is allowed under this section; and
112          (ii) provide the taxpayer with a written tax credit certificate:
113          (A) stating that the taxpayer has qualified for a tax credit; and
114          (B) showing the amount of tax credit for which the taxpayer has qualified under this
115     section.
116          (c) A qualified taxpayer shall retain the tax credit certificate.
117          (d) The director shall [at least] annually submit to the commission a list [of all
118     qualified taxpayers] that includes:
119          (i) the name, taxpayer identification number, and identifying information of each
120     qualified taxpayer to which the director has issued a tax credit certificate under this section;
121     and
122          (ii) [the amount of each tax credit represented by the tax credit certificates] for each
123     qualified taxpayer listed under Subsection (6)(d)(i), the amount of the tax credit specified in the
124     tax credit certificate.
125          (7) The tax credit under this section is allowed only:
126          (a) against a tax owed under this chapter or Chapter 8, Gross Receipts Tax on Certain
127     Corporations Not Required to Pay Corporate Franchise or Income Tax Act[, in the taxable year
128     by the qualified taxpayer];
129          (b) for the taxable year in which the qualified purchase occurs; and
130          (c) once per vehicle.
131          (8) A qualified taxpayer may not assign a tax credit or a tax credit certificate under this
132     section to another person.
133          (9) If the qualified taxpayer receives a tax credit certificate under this section that
134     allows a tax credit in an amount that exceeds the qualified taxpayer's tax liability under this
135     chapter or Chapter 8, Gross Receipts Tax on Certain Corporations Not Required to Pay
136     Corporate Franchise or Income Tax Act, for a taxable year, the qualified taxpayer may carry
137     forward the amount of the tax credit that exceeds the tax liability for a period that does not
138     exceed the next five taxable years.
139          Section 2. Section 59-7-618.2 is enacted to read:
140          59-7-618.2. Nonrefundable tax credit for purchase of locomotive idle-reduction
141     device.
142          (1) As used in this section:
143          (a) "Board" means the Air Quality Board created under Title 19, Chapter 2, Air
144     Conservation Act.
145          (b) "Director" means the director of the Division of Air Quality appointed under
146     Section 19-2-107.
147          (c) "Locomotive idle-reduction device" means technology or equipment that:
148          (i) is verified by the United States Environmental Protection Agency to reduce
149     locomotive idling; and
150          (ii) is not required under 40 C.F.R. Sec. 1033.115.
151          (d) "Qualified purchase" means the purchase of a locomotive idle-reduction device.
152          (e) "Qualified taxpayer" means a taxpayer that:
153          (i) makes one or more qualified purchases;and
154          (ii) receives a tax credit certificate from the director under this section.
155          (2) For a taxable year beginning on or after January 1, 2024, and before January 1,
156     2031, a qualified taxpayer may claim a nonrefundable tax credit for each qualified purchase the
157     qualified taxpayer made in the taxable year in an amount equal to the lesser of:
158          (a) $15,000; and
159          (b) 50% of the actual costs paid by the qualified taxpayer for the qualified purchase,
160     not including any financial assistance, rebates, or credits, other than a tax credit issued under
161     this section, that the qualified taxpayer uses to pay for the qualified purchase.
162          (3) (a) A taxpayer shall receive a tax credit certificate from the director to claim a tax
163     credit under this section.
164          (b) The taxpayer shall submit, with the taxpayer's application to the director for a tax
165     credit certificate, proof of the taxpayer making one or more qualified purchases.
166          (c) The director shall provide notice to a taxpayer acknowledging receipt of the
167     taxpayer's application for a tax credit certificate.
168          (d) If the director determines that the taxpayer qualifies for a tax credit under this
169     section, the director shall:
170          (i) determine the amount of the taxpayer's tax credit; and
171          (ii) issue to the taxpayer a tax credit certificate stating the amount of the taxpayer's tax
172     credit.
173          (e) A qualified taxpayer shall retain the tax credit certificate for the same period that a
174     person is required to keep books and records under Section 59-1-1406.
175          (4) (a) The tax credit under this section is allowed only:
176          (i) against taxes owed under this chapter or Chapter 8, Gross Receipts Tax on Certain
177     Corporations Not Required to Pay Corporate Franchise or Income Tax Act;
178          (ii) for the taxable year in which the qualified purchase is made; and
179          (iii) once per qualified purchase.
180          (b) A qualified taxpayer may not assign a tax credit or a tax credit certificate under this
181     section to another person.
182          (c) If a qualified taxpayer receives a tax credit certificate under this section that allows
183     a tax credit in an amount that exceeds the qualified taxpayer's tax liability under this chapter for
184     a taxable year, the qualified taxpayer may carry forward the amount of the tax credit that
185     exceeds the tax liability for a period that does not exceed the next five taxable years.
186          (5) The aggregate annual total amount of tax credits represented by tax credit
187     certificates that the director issues under this section and Sections 59-7-618.1, 59-10-1033.1,
188     and 59-10-1033.2 may not exceed $500,000.
189          (6) The director shall annually submit to the commission a list that includes:
190          (a) the name, taxpayer identification number, and identifying information of each
191     qualified taxpayer to which the director has issued a tax credit certificate under this section;
192     and
193          (b) for each qualified taxpayer listed under Subsection (6)(a), the amount of the tax
194     credit specified in the tax credit certificate.
195          (7) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
196     board shall make rules to:
197          (a) establish a process under which a taxpayer may reserve a potential tax credit under
198     this section for a limited time to allow the taxpayer to make a qualified purchase with the
199     assurance that the aggregate limit under Subsection (5) will not be met before the taxpayer
200     submits an application for a tax credit certificate; and
201          (b) govern the application process for receiving a tax credit certificate under this
202     section.
203          Section 3. Section 59-10-1033.1 is amended to read:
204          59-10-1033.1. Tax credit related to alternative fuel heavy duty vehicles.
205          (1) As used in this section:
206          (a) "Board" means the Air Quality Board created under Title 19, Chapter 2, Air
207     Conservation Act.
208          (b) "Director" means the director of the Division of Air Quality appointed under
209     Section 19-2-107.
210          (c) "Heavy duty vehicle" means a commercial category 7 or 8 vehicle, according to
211     vehicle classifications established by the Federal Highway Administration.
212          (d) "Natural gas" includes compressed natural gas and liquified natural gas.
213          (e) "Qualified heavy duty vehicle" means a heavy duty vehicle that:
214          (i) has never been titled or registered and has been driven less than 7,500 miles; and
215          (ii) is fueled by natural gas, has a 100% electric drivetrain, or has a hydrogen-electric
216     drivetrain.
217          (f) "Qualified purchase" means the purchase of a qualified heavy duty vehicle.
218          (g) "Qualified taxpayer" means a claimant, estate, or trust that:
219          (i) purchases a qualified heavy duty vehicle; and
220          (ii) receives a tax credit certificate from the director.
221          (h) "Small fleet" means 40 or fewer heavy duty vehicles registered in the state and
222     owned by a single claimant, estate, or trust.
223          (i) "Tax credit certificate" means a certificate issued by the director certifying that a
224     claimant, estate, or trust is entitled to a tax credit as provided in this section and stating the
225     amount of the tax credit.
226          (2) [A] For a taxable year beginning on or after January 1, 2024, and before January 1,
227     2031, a qualified taxpayer may claim a nonrefundable tax credit against tax otherwise due
228     under this chapter:
229          (a) in an amount equal to[:] $15,000; and
230          [(i) $15,000, if the qualified purchase occurs during calendar year 2021;]
231          [(ii) $13,500, if the qualified purchase occurs during calendar year 2022;]
232          [(iii) $12,000, if the qualified purchase occurs during calendar year 2023;]
233          [(iv) $10,500, if the qualified purchase occurs during calendar year 2024;]
234          [(v) $9,000, if the qualified purchase occurs during calendar year 2025;]
235          [(vi) $7,500, if the qualified purchase occurs during calendar year 2026;]
236          [(vii) $6,000, if the qualified purchase occurs during calendar year 2027;]
237          [(viii) $4,500, if the qualified purchase occurs during calendar year 2028;]
238          [(ix) $3,000, if the qualified purchase occurs during calendar year 2029; and]
239          [(x) $1,500, if the qualified purchase occurs during calendar year 2030; and]
240          (b) if the qualified taxpayer certifies under oath that over 50% of the miles that the
241     heavy duty vehicle that is the subject of the qualified purchase will travel annually will be
242     within the state.
243          (3) (a) Except as provided in Subsection (3)(b), a claimant, estate, or trust may not
244     submit an application for, and the director may not issue to the claimant, estate, or trust, a tax
245     credit certificate under this section in any taxable year for a qualified purchase if the director
246     has already issued tax credit certificates to the claimant, estate, or trust for 10 qualified
247     purchases in the same taxable year.
248          (b) If, by May 1 of any year, more than 30% of the aggregate annual total amount of
249     tax credits under Subsection (5) has not been claimed, a claimant, estate, or trust may submit
250     an application for, and the director may issue to the claimant, estate, or trust, one or more tax
251     credit certificates for up to eight additional qualified purchases, even if the director has already
252     issued to that claimant, estate, or trust tax credit certificates for the maximum number of
253     qualified purchases allowed under Subsection (3)(a).
254          (4) (a) Subject to Subsection (4)(b), the director shall reserve 25% of all tax credits
255     available under this section for qualified taxpayers with a small fleet.
256          (b) Subsection (4)(a) does not prevent a claimant, estate, or trust from submitting an
257     application for, or the director from issuing, a tax credit certificate if, before October 1,
258     qualified taxpayers with a small fleet have not reserved under Subsection (5)(b) tax credits for
259     the full amount reserved under Subsection (4)(a).
260          (5) (a) The aggregate annual total amount of tax credits represented by tax credit
261     certificates that the director issues under this section and [Section] Sections 59-7-618.1,
262     59-7-618.2, and 59-10-1033.2 may not exceed $500,000.
263          (b) The board shall, in accordance with Title 63G, Chapter 3, Utah Administrative
264     Rulemaking Act, make rules to establish a process under which a claimant, estate, or trust may
265     reserve a potential tax credit under this section for a limited time to allow the claimant, estate,
266     or trust to make a qualified purchase with the assurance that the aggregate limit under
267     Subsection (5)(a) will not be met before the claimant, estate, or trust is able to submit an
268     application for a tax credit certificate.
269          (6) (a) (i) A claimant, estate, or trust wishing to claim a tax credit under this section
270     shall, using forms the board requires by rule:
271          (A) submit to the director an application for a tax credit;
272          (B) provide the director proof of a qualified purchase; and
273          (C) submit to the director the certification under oath required under Subsection (2)(b).
274          (ii) Upon receiving the application, proof, and certification required under Subsection
275     (6)(a)(i), the director shall provide the claimant, estate, or trust a written statement from the
276     director acknowledging receipt of the proof.
277          (b) If the director determines that a claimant, estate, or trust qualifies for a tax credit
278     under this section, the director shall:
279          (i) determine the amount of tax credit the claimant, estate, or trust is allowed under this
280     section; and
281          (ii) provide the claimant, estate, or trust with a written tax credit certificate:
282          (A) stating that the claimant, estate, or trust has qualified for a tax credit; and
283          (B) showing the amount of tax credit for which the claimant, estate, or trust has
284     qualified under this section.
285          (c) A qualified taxpayer shall retain the tax credit certificate.
286          (d) The director shall [at least] annually submit to the commission a list [of all
287     qualified taxpayers] that includes:
288          (i) the name, taxpayer identification number, and identifying information of each
289     qualified taxpayer to which the director has issued a tax credit certificate under this section;
290     and
291          (ii) [the amount of each tax credit represented by the tax credit certificates] for each
292     qualified taxpayer listed under Subsection (6)(d)(i), the amount of the tax credit specified in the
293     tax credit certificate.
294          (7) The tax credit under this section is allowed only:
295          (a) against a tax owed under this chapter [in the taxable year by the qualified taxpayer];
296          (b) for the taxable year in which the qualified purchase occurs; and
297          (c) once per vehicle.
298          (8) A qualified taxpayer may not assign a tax credit or a tax credit certificate under this
299     section to another person.
300          (9) If the qualified taxpayer receives a tax credit certificate under this section that
301     allows a tax credit in an amount that exceeds the qualified taxpayer's tax liability under this
302     chapter for a taxable year, the qualified taxpayer may carry forward the amount of the tax credit
303     that exceeds the tax liability for a period that does not exceed the next five taxable years.
304          Section 4. Section 59-10-1033.2 is enacted to read:
305          59-10-1033.2. Nonrefundable tax credit for purchase of locomotive idle-reduction
306     device.
307          (1) As used in this section:
308          (a) "Board" means the Air Quality Board created under Title 19, Chapter 2, Air
309     Conservation Act.
310          (b) "Director" means the director of the Division of Air Quality appointed under
311     Section 19-2-107.
312          (c) "Locomotive idle-reduction device" means technology or equipment that:
313          (i) is verified by the United States Environmental Protection Agency to reduce
314     locomotive idling; and
315          (ii) is not required under 40 C.F.R. Sec. 1033.115.
316          (d) "Purchaser" means a claimant, estate, or trust.
317          (e) "Qualified purchase" means the purchase of a locomotive idle-reduction device.
318          (f) "Qualified purchaser" means a purchaser that:
319          (i) makes one or more qualified purchases; and
320          (ii) receives a tax credit certificate from the director under this section.
321          (2) For a taxable year beginning on or after January 1, 2024, and before January 1,
322     2031, a qualified purchaser may claim a nonrefundable tax credit for each qualified purchase
323     the qualified purchaser made in the taxable year in an amount equal to the lesser of:
324          (a) $15,000; and
325          (b) 50% of the actual costs paid by the qualified purchaser for the qualified purchase,
326     not including any financial assistance, rebates, or credits, other than a tax credit issued under
327     this section, that the qualified purchaser uses to pay for the qualified purchase.
328          (3) (a) A purchaser shall receive a tax credit certificate from the director to claim a tax
329     credit under this section.
330          (b) The purchaser shall submit, with the purchaser's application to the director for a tax
331     credit certificate, proof of the purchaser making one or more qualified purchases.
332          (c) The director shall provide notice to a purchaser acknowledging receipt of the
333     purchaser's application for a tax credit certificate.
334          (d) If the director determines that the purchaser qualifies for a tax credit under this
335     section, the director shall:
336          (i) determine the amount of the purchaser's tax credit; and
337          (ii) issue to the purchaser a tax credit certificate stating the amount of the purchaser's
338     tax credit.
339          (e) A qualified purchaser shall retain the tax credit certificate for the same period that a
340     person is required to keep books and records under Section 59-1-1406.
341          (4) (a) The tax credit under this section is allowed only:
342          (i) against taxes owed under this chapter;
343          (ii) for the taxable year in which the qualified purchase is made; and
344          (iii) once per qualified purchase.
345          (b) A qualified purchaser may not assign a tax credit or a tax credit certificate under
346     this section to another person.
347          (c) If a qualified purchaser receives a tax credit certificate under this section that allows
348     a tax credit in an amount that exceeds the qualified taxpayer's tax liability under this chapter for
349     a taxable year, the qualified purchaser may carry forward the amount of the tax credit that
350     exceeds the tax liability for a period that does not exceed the next five taxable years.
351          (5) The aggregate annual total amount of tax credits represented by tax credit
352     certificates that the director issues under this section and Sections 59-7-618.1, 59-7-618.2, and
353     59-10-1033.1 may not exceed $500,000.
354          (6) The director shall annually submit to the commission a list that includes:
355          (a) the name, taxpayer identification number, and identifying information of each
356     qualified purchaser to which the director has issued a tax credit certificate under this section;
357     and
358          (b) for each qualified purchaser listed under Subsection (6)(a), the amount of the tax
359     credit specified in the tax credit certificate.
360          (7) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
361     board shall make rules to:
362          (a) establish a process under which a purchaser may reserve a potential tax credit under
363     this section for a limited time to allow the purchaser to make a qualified purchase with the
364     assurance that the aggregate limit under Subsection (5) will not be met before the purchaser
365     submits an application for a tax credit certificate; and
366          (b) govern the application process for receiving a tax credit certificate under this
367     section.
368          Section 5. Section 63I-1-259 is amended to read:
369          63I-1-259. Repeal dates: Title 59.
370          (1) Section 59-1-213.1 is repealed May 9, 2024.
371          (2) Section 59-1-213.2 is repealed May 9, 2024.
372          (3) Subsection 59-1-403(4)(aa), which authorizes the State Tax Commission to inform
373     the Department of Workforce Services whether an individual claimed a federal earned income
374     tax credit, is repealed July 1, 2029.
375          (4) Subsection 59-1-405(1)(g) is repealed May 9, 2024.
376          (5) Subsection 59-1-405(2)(b) is repealed May 9, 2024.
377          (6) Section 59-7-618.1 is repealed July 1, [2029] 2031.
378          (7) Section 59-7-618.2 is repealed July 1, 2031.
379          [(7)] (8) Section 59-9-102.5 is repealed December 31, 2030.
380          [(8)] (9) Section 59-10-1033.1 is repealed July 1, [2029] 2031.
381          (10) Section 59-10-1033.2 is repealed July 1, 2031.
382          Section 6. Effective date.
383          (1) If approved by two-thirds of all the members elected to each house, this bill takes
384     effect upon approval by the governor, or the day following the constitutional time limit of Utah
385     Constitution, Article VII, Section 8, without the governor's signature, or in the case of a veto,
386     the date of veto override.
387          (2) If this bill is not approved by two-thirds of all members elected to each house, this
388     bill takes effect May 1, 2024.
389          Section 7. Retrospective operation.
390          The following sections have retrospective operation for a taxable year beginning on or
391     after January 1, 2024:
392          (1) Section 59-7-618.1;
393          (2) Section 59-7-618.2;
394          (3) Section 59-10-1033.1; and
395          (4) Section 59-10-1033.2.