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H.B. 323
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INCENTIVES TO PURCHASE CLEAN FUEL
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VEHICLES
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2000 GENERAL SESSION
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STATE OF UTAH
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Sponsor: Wayne A. Harper
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AN ACT RELATING TO REVENUE AND TAXATION AND CLEAN FUEL VEHICLES;
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AUTHORIZING THE DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT
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TO GIVE GRANTS FOR THE PURCHASE OF CLEAN FUEL VEHICLES OR EXPENSES OF
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CONVERTING VEHICLES TO USE CLEAN FUEL, IF THE VEHICLES PURCHASED OR
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CONVERTED ARE USED FOR BUSINESS OR GOVERNMENTAL PURPOSES; DIRECTING
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THE DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT TO MAKE
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RULES TO IMPLEMENT THE GRANT PROGRAM; EXTENDING AND MODIFYING THE
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CORPORATE FRANCHISE AND INCOME TAX CREDIT AND INDIVIDUAL INCOME TAX
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CREDIT FOR PURCHASES OF CLEAN FUEL VEHICLES OR EXPENSES OF
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CONVERTING A VEHICLE TO USE CLEAN FUELS; AND PROVIDING AN EFFECTIVE
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DATE.
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This act affects sections of Utah Code Annotated 1953 as follows:
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AMENDS:
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9-1-702, as last amended by Chapter 178, Laws of Utah 1996
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9-1-703, as last amended by Chapter 178, Laws of Utah 1996
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9-1-706, as last amended by Chapter 178, Laws of Utah 1996
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59-7-605, as last amended by Chapter 10, Laws of Utah 1997
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59-10-127, as last amended by Chapter 257, Laws of Utah 1996
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
9-1-702
is amended to read:
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9-1-702. Definitions.
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As used in this part:
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(1) "Certified by the Air Quality Board" means that a motor vehicle on which conversion
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equipment has been installed meets the following criteria:
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(a) before the installation of conversion equipment, the motor vehicle does not exceed the
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emission cut points for a transient test driving cycle, as specified in 40 CFR 51, Appendix E to
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Subpart S, or an equivalent test for the make, model, and year of the motor vehicle;
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(b) the motor vehicle's emissions of regulated pollutants, when operating with clean fuel,
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is less than the emissions were before the installation of conversion equipment; and
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(c) a reduction in emissions under Subsection (1)(b) is demonstrated by:
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(i) certification of the conversion equipment by the federal Environmental Protection
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Agency or by a state whose certification standards are recognized by the Air Quality Board;
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(ii) testing the motor vehicle, before and after the installation of the conversion equipment,
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in accordance with 40 CFR 86, Control of Air Pollution from New and In-use Motor Vehicle
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Engines: Certification and Test Procedures, using all fuel the motor vehicle is capable of using;
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or
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(iii) any other test or standard recognized by Air Quality Board rule.
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[(1)] (2) "Clean fuel" means:
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(a) propane, compressed natural gas, or electricity;
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(b) other fuel the Air Quality Board determines to be at least as effective as fuels under
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Subsection (2)(a) in reducing air pollution; or
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(c) other fuel that meets the clean-fuel vehicle standards in the federal Clean Air Act
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Amendments of 1990, Title II, 42 U.S.C. Sec. 7521 et seq.
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[(2)] (3) "Clean-fuel vehicle" means a vehicle that:
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(a) uses a clean fuel; and [that]
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(b) meets clean-fuel vehicle standards in the federal Clean Air Act Amendments of 1990,
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Title II, 42 U.S.C. Sec. 7521 et seq.
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[(3)] (4) "Fund" means the Clean Fuels Vehicle [Loan] Fund created in Section
9-1-703
.
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[(4)] (5) "Government vehicle" means a motor vehicle registered in Utah and owned and
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operated by the state, a public trust authority, a county, a municipality, a town, or a city, including
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a metropolitan rapid transit motor [vehicles, buses, trucks, law enforcement vehicles, and
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emergency vehicles] vehicle, bus, truck, law enforcement vehicle, or emergency vehicle.
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[(5)] (6) "Incremental [costs] cost" means the difference between the cost of the OEM
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vehicle and the same vehicle model manufactured without the clean-fuel fueling system.
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[(6)] (7) "OEM vehicle" means a vehicle manufactured by the original vehicle
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manufacturer or its contractor to use a clean fuel.
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[(7)] (8) "Private sector business vehicle" means [one or more] a motor [vehicles] vehicle
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registered in Utah that [are] is owned and operated solely in the conduct of a private business
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enterprise.
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[(8)] (9) "Refueling equipment" means compressors when used separately, compressors
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used in combination with cascade tanks, and other equipment that constitute a central refueling
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system capable of dispensing vehicle fuel.
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Section 2.
Section
9-1-703
is amended to read:
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9-1-703. Clean Fuels Vehicle Fund -- Contents -- Loans or grants made with fund
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monies.
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(1) (a) There is created a revolving fund known as the Clean Fuels Vehicle [Loan] Fund.
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(b) The fund consists of:
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(i) appropriations to the fund;
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(ii) other public and private contributions made under Subsection (1)(d);
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(iii) interest earnings on cash balances; and
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(iv) all monies collected for loan repayments and interest on loans.
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(c) All money appropriated to the fund is nonlapsing.
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(d) The department may accept contributions from other public and private sources for
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deposit into the fund.
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(2) (a) [Monies] The department may make loans or grants with monies available in the
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fund [may be loaned by the department] for [expenses for]:
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(i) the conversion of private sector business vehicles and government vehicles to use a
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clean fuel, if certified by the Air Quality Board; or
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(ii) [to] the purchase of OEM vehicles for use as private sector business vehicles or
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government vehicles.
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(b) The amount [loaned per] of a loan for any vehicle may not exceed:
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(i) the actual cost of the vehicle conversion [if loaned under Subsection (a)(i)];
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(ii) the incremental cost of purchasing the OEM vehicle [if loaned under Subsection
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(a)(ii)]; or
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(iii) the cost of purchasing the OEM vehicle if [the purchase cost is loaned under
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Subsection (2)(a)(ii) and] there is no documented incremental cost.
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(c) The amount of a grant for any vehicle may not exceed:
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(i) 50% of the actual cost of the vehicle conversion minus the amount of any tax credit
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claimed under Section
59-7-605
or
59-10-127
for the vehicle for which a grant is requested; or
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(ii) 50% of the incremental cost of purchasing an OEM vehicle minus the amount of any
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tax credit claimed under Section
59-7-605
or
59-10-127
for the vehicle for which a grant is
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requested.
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[(c)] (d) (i) Subject to the availability of [funds] monies in the fund, [monies may be
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loaned by the division] the department may make loans for the purchase of vehicle refueling
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equipment for private sector business vehicles and government vehicles.
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(ii) The maximum amount loaned per installation of refueling equipment may not exceed
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the actual cost of [this] the refueling equipment.
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(3) Administrative costs of the fund shall be paid from the fund.
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(4) (a) The fund balance may not exceed $10,000,000.
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(b) Interest on cash balances and repayment of loans in excess of the amount necessary to
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maintain the fund balance at $10,000,000 shall be deposited in the General Fund.
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(5) (a) [Expenditures] Loans made from monies in the fund shall be supported by loan
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documents evidencing the intent of the borrower to repay the loan.
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(b) The original loan documents shall be filed with the Division of Finance and a copy
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shall be filed with the department.
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Section 3.
Section
9-1-706
is amended to read:
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9-1-706. Rulemaking -- Department duties -- Loan repayment.
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(1) The department shall:
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(a) establish and administer the loan and grant program to encourage government officials
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and private sector business vehicle owners and operators to obtain and use clean-fuel vehicles; and
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(b) make rules in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking
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Act[, to establish criteria and conditions for]:
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[(i) the amount loaned per incremental costs of:]
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[(A) vehicle conversion to clean fuel or OEM purchase or lease; and]
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[(B) purchase, or lease and installation of refueling equipment;]
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(i) specifying the amount of money in the fund to be dedicated annually for grants;
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(ii) limiting the amount of a grant given to any person claiming a tax credit under Section
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59-7-605
or
59-10-127
for the motor vehicle for which a grant is requested to assure that the sum
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of the tax credit and grant does not exceed:
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(A) 50% of the incremental cost of the OEM vehicle; or
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(B) 50% of the cost of conversion equipment;
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(iii) limiting the number of motor vehicles per fleet operator that may be eligible for a grant
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in a year;
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[(ii)] (iv) specifying criteria the department shall consider in prioritizing and awarding
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loans[, including establishing a minimum loan amount] and grants;
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[(iii)] (v) specifying repayment [by the loan recipient] periods;
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(vi) specifying procedures for:
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(A) awarding loans and grants; and
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[(iv)] (B) [collection of the] collecting loans [authorized by this section]; and
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[(v) awarding program monies to loan recipients who meet the criteria and conditions
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under Subsection (b); and]
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[(vi)] (vii) requiring all loan and grant applicants [who wish to receive a loan under the
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loan program] to:
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(A) apply on forms provided by the department;
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(B) agree in writing to use the clean fuel for which each vehicle is converted or purchased
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using loan or grant proceeds for a minimum of [60%] 70% of the vehicle miles traveled beginning
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from the time of conversion[, lease,] or purchase of the vehicle;
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(C) agree in writing to notify the department if a vehicle converted or purchased using loan
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or grant proceeds becomes inoperable through mechanical failure or accident and to pursue a
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remedy outlined in department rules;
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(D) provide reasonable data to the department on vehicles converted[, leased,] or
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purchased with loan or grant proceeds; and
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(E) submit vehicles converted[, leased,] or purchased with loan or grant proceeds to
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inspections by the department as required in department rules and as necessary for administration
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of the loan and grant program.
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(2) (a) When developing repayment schedules for the loans, the department shall consider
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the projected savings from use of the clean-fuel vehicle.
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(b) A repayment schedule may not exceed ten years.
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(c) Loans made from the fund for private sector vehicles shall be made at an interest rate
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equal to the annual return earned in the state treasurer's Public Treasurer's Pool as determined the
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month immediately preceding the closing date of the loan.
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(d) Loans made from the fund for government vehicles shall be made at a zero interest
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rate.
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(3) The Division of Finance is responsible for collection of and accounting for the loans
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and has custody of all loan documents, including all notes and contracts, evidencing the
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indebtedness of the fund.
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Section 4.
Section
59-7-605
is amended to read:
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59-7-605. Definitions -- Credit -- Cleaner burning fuels.
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(1) As used in this section:
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(a) "Board" means the Air Quality Board created under Title 19, Chapter 2, Air
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Conservation Act.
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(b) "Certified by the board" means that:
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(i) a motor vehicle on which conversion equipment has been installed meets the following
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criteria:
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[(i)] (A) [prior to] before the installation of conversion equipment, the vehicle does not
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exceed the emission cut points for a transient test driving cycle, as specified in 40 CFR 51,
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Appendix E to Subpart S, or an equivalent test for the make, model, and year of the vehicle;
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[(ii)] (B) the motor vehicle's emissions of regulated pollutants, when operating on fuels
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listed in [Subsections
59-7-605
] Subsection (2)(b) [and
59-10-127
(2)(b)], is less than [prior to] the
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emissions were before the installation of conversion equipment; and
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[(iii)] (C) a reduction in emissions under Subsection [(b)(ii)] (1)(b)(i)(B) is demonstrated
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by:
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[(A)] (I) certification of the conversion equipment by the federal Environmental Protection
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Agency or by a state whose certification standards are recognized by the board;
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[(B)] (II) testing the motor vehicle [is tested], before and after installation of the
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conversion equipment, in accordance with 40 CFR 86, Control of Air Pollution from New and
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In-use Motor Vehicle Engines: Certification and Test Procedures, using all fuel the motor vehicle
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is capable of using; or
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[(C)] (III) any other test or standard recognized by board rule[.]; or
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(ii) special mobile equipment on which conversion equipment has been installed meets the
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following criteria:
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(A) the special mobile equipment's emissions of regulated pollutants, when operating on
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fuels listed in Subsection (2)(c), is less than the emissions were before the installation of
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conversion equipment; and
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(B) a reduction in emissions under Subsection (1)(b)(ii)(A) is demonstrated by:
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(I) certification of the conversion equipment by the federal Environmental Protection
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Agency or by a state whose certification standards are recognized by the board; or
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(II) any other test or standard recognized by board rule.
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(c) "Clean fuel grant" means a grant awarded under Title 9, Chapter 1, Part 7, Clean Fuels
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Conversion Program Act, for reimbursement of a portion of the incremental cost of an OEM
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vehicle or the cost of conversion equipment.
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[(c)] (d) "Conversion equipment" means equipment referred to in Subsection
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[
59-7-605
](2)(b) or (2)(c).
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(e) "Incremental cost" has the same meaning as in Section
9-1-702
.
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(f) "OEM vehicle" has the same meaning as in Section
9-1-702
.
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[(d)] (g) "Special [fuel] mobile equipment":
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(i) means any mobile equipment or vehicle that [uses special fuel and] is not designed or
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used primarily for the transportation of persons or property; and
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(ii) includes construction or maintenance equipment.
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(2) For [tax] taxable years beginning on or after January 1, [1997, and ending] 2001, but
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beginning on or before December 31, [2001, there is] 2005, a taxpayer may claim a credit against
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tax otherwise due under this chapter or Chapter 8, Gross Receipts Tax on Certain Corporations Not
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Required to Pay Corporate Franchise or Income Tax Act, in an amount equal to:
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(a) [20%, up to a maximum of $500 per vehicle,] 50% of the incremental cost of [new
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motor vehicles being] an OEM vehicle registered in Utah [and for the first time that] minus the
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amount of any clean fuel grant received, up to a maximum tax credit of $3,000 per vehicle, if the
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vehicle:
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(i) [are] is fueled by propane, natural gas, or electricity;
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(ii) [are] is fueled by other fuel the board determines annually on or before July 1 to be at
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least as effective in reducing air pollution as fuels under Subsection (2)(a)(i) [in reducing air
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pollution]; or
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(iii) [meet] meets the clean-fuel vehicle standards in the federal Clean Air Act
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Amendments of 1990, Title II, 42 U.S.C. Sec. 7521 et seq.;
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(b) [20%, up to a maximum of $400,] 50% of the cost of equipment for conversion, if
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certified by the board, of a motor vehicle registered in Utah minus the amount of any clean fuel
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grant received, up to a maximum tax credit of $2,500 per motor vehicle, if the motor vehicle is to:
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(i) be fueled by propane, natural gas, or electricity;
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(ii) be fueled by other fuel the board determines annually on or before July 1 to be at least
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as effective in reducing air pollution as fuels under Subsection (2)[(a)] (b)(i); or
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(iii) meet the federal clean-fuel vehicle standards [under Subsection (2)(a)(iii)] in the
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federal Clean Air Act Amendments of 1990, Title II, 42 U.S.C. Sec. 7521 et seq.; and
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(c) [20%, up to a maximum of $500,] 50% of the cost of equipment for conversion, if
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certified by the board, of a special [fuel] mobile equipment engine minus the amount of any clean
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fuel grant received, up to a maximum tax credit of $1,000 per special mobile equipment engine,
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if the special mobile equipment is to be fueled by:
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(i) propane, natural gas, or electricity; or
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(ii) other fuel the board determines annually on or before July 1 to be:
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(A) at least as effective in reducing air pollution as the fuels under Subsection (2)(c)(i);
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or
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(B) substantially more effective in reducing air pollution than the fuel for which the engine
236
was originally designed.
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(3) A taxpayer shall provide proof of the purchase of an item for which a credit is allowed
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under this section by:
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(a) providing proof to the board in the form [it] the board requires by rule;
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(b) receiving a written statement from the board acknowledging receipt of the proof; and
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(c) attaching the written statement obtained from the board to the tax return in which the
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credit is claimed.
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(4) [This] Except as provided by Subsection (5), this credit is allowed only:
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(a) against any Utah tax owed in the taxable year by the taxpayer; [and]
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(b) in the taxable year in which the item is purchased for which the credit is claimed[.];
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and
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(c) once per vehicle.
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(5) If the amount of a tax credit claimed by a taxpayer under this section exceeds the
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taxpayer's tax liability under this chapter for a taxable year, the amount of the credit exceeding the
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liability may be carried forward for a period that does not exceed the next five taxable years.
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Section 5.
Section
59-10-127
is amended to read:
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59-10-127. Definition -- Credit -- Cleaner burning fuels.
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(1) As used in this section:
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(a) "Board" means the Air Quality Board created in Title 19, Chapter 2, [Environmental
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Quality Code] Air Conservation Act.
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(b) "Certified by the board" means that:
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(i) a motor vehicle on which conversion equipment has been installed meets the following
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criteria:
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[(i)] (A) [prior to] before the installation of conversion equipment, the vehicle does not
260
exceed the emission cut points for a transient test driving cycle, as specified in 40 CFR 51,
261
Appendix E to Subpart S, or an equivalent test for the make, model, and year of the vehicle;
262
[(ii)] (B) the motor vehicle's emissions of regulated pollutants, when operating on fuels
263
listed in Subsection [
59-7-605
(2)(b) and
59-10-127
](2)(b), is less than [prior to] the emissions
264
were before the installation of conversion equipment; and
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(iii) a reduction in emissions under Subsection [(b)(ii)] (1)(b)(i)(B) is demonstrated by:
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[(A)] (I) certification of the conversion equipment by the federal Environmental Protection
267
Agency or by a state whose certification standards are recognized by the board;
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[(B)] (II) testing the motor vehicle [is tested], before and after installation of the
269
conversion equipment, in accordance with 40 CFR 86, Control of Air Pollution from New and
270
In-use Motor Vehicle Engines: Certification and Test Procedures, using all fuels the motor vehicle
271
is capable of using; or
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[(C)] (III) any other test or standard recognized by board rule[.]; or
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(ii) special mobile equipment on which conversion equipment has been installed meets the
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following criteria:
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(A) the special mobile equipment's emissions of regulated pollutants, when operating on
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fuels listed in Subsection (2)(c), is less than the emissions were before the installation of
277
conversion equipment; and
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(B) a reduction in emissions under Subsection (1)(b)(ii)(A) is demonstrated by:
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(I) certification of the conversion equipment by the federal Environmental Protection
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Agency or by a state whose certification standards are recognized by the board; or
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(II) any other test or standard recognized by the board.
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(c) "Clean fuel grant" means a grant the taxpayer receives under Title 9, Chapter 1, Part
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7, Clean Fuels Conversion Program Act for reimbursement of a portion of the incremental cost of
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the OEM vehicle or the cost of conversion equipment.
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[(c)] (d) "Conversion equipment" means equipment referred to in [Subsection
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59-7-605
(2)(b) and] Subsection [
59-10-127
](2)(b) or (2)(c).
287
(e) "Incremental cost" has the same meaning as in Section
9-1-702
.
288
(f) "OEM vehicle" has the same meaning as in Section
9-1-702
.
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[(d)] (g) "Special [fuel] mobile equipment":
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(i) means any mobile equipment or vehicle not designed or used primarily for the
291
transportation of persons or property[, including]; and
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(ii) includes construction or maintenance equipment.
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(2) For [tax] taxable years beginning on or after January 1, [1997, and ending] 2001, but
294
beginning on or before December 31, [2001, there is allowed] 2005, a taxpayer may claim a credit
295
against tax otherwise due under this chapter in an amount equal to:
296
(a) [20%, up to a maximum of $500 per vehicle,] 50% of the incremental cost of [new
297
motor vehicles being] an OEM vehicle registered in Utah [and for the first time that] minus the
298
amount of any clean fuel grant received, up to a maximum tax credit of $3,000 per vehicle, if the
299
vehicle:
300
(i) [are] is fueled by propane, natural gas, or electricity;
301
(ii) [are] is fueled by other fuel the board determines annually on or before July 1 to be at
302
least as effective in reducing air pollution as fuels under Subsection (2)(a)(i); or
303
(iii) [meet] meets the clean-fuel vehicle standards in the federal Clean Air Act
304
Amendments of 1990, Title II, 42 U.S.C. Sec. 7521 et seq.;
305
(b) [20%, up to a maximum of $400,] 50% of the cost of equipment for conversion, if
306
certified by the board, of a motor vehicle registered in Utah [to] minus the amount of any clean
307
fuel conversion grant received, up to a maximum tax credit of $2,500 per vehicle, if the motor
308
vehicle:
309
(i) is to be fueled by propane, natural gas, or electricity;
310
(ii) is to be fueled by other fuel the board determines annually on or before July 1 to be at
311
least as effective in reducing air pollution as fuels under Subsection (2)[(a)] (b)(i); or
312
(iii) will meet the federal clean fuel vehicle standards [under Subsection (2)(a)(iii)] in the
313
federal Clean Air Act Amendments of 1990, Title II, 42 U.S.C. Sec. 7521 et seq.; and
314
(c) [20%, up to a maximum of $500,] 50% of the cost of equipment for conversion, if
315
certified by the board, of a special [fuel] mobile equipment engine minus the amount of any clean
316
fuel conversion grant received, up to a maximum tax credit of $1,000 per special mobile
317
equipment engine, if the special mobile equipment is to be fueled by:
318
(i) propane, natural gas, or electricity; or
319
(ii) other fuel the board determines annually on or before July 1 to be:
320
(A) at least as effective in reducing air pollution as the fuels under Subsection (2)(c)(i);
321
or
322
(B) substantially more effective in reducing air pollution than the fuel for which the engine
323
was originally designed.
324
(3) An individual shall provide proof of the purchase of an item for which a credit is
325
allowed under this section by:
326
(a) providing proof to the board in the form [it] the board requires by rule;
327
(b) receiving a written statement from the board acknowledging receipt of the proof; and
328
(c) attaching the written statement obtained from the board to the tax return in which the
329
credit is claimed.
330
(4) [This] Except as provided by Subsection (5), this credit is allowed only:
331
(a) against any Utah tax owed in the taxable year by the taxpayer; [and]
332
(b) in the taxable year in which the item is purchased for which the credit is claimed[.];
333
and
334
(c) once per vehicle.
335
(5) If the amount of a tax credit claimed by a taxpayer under this section exceeds the
336
taxpayer's tax liability under this chapter for a taxable year, the amount of the credit exceeding the
337
liability may be carried forward for a period that does not exceed the next five taxable years.
338
Section 6. Effective date.
339
This act takes effect on January 1, 2001.
Legislative Review Note
as of 1-26-00 4:09 PM
A limited legal review of this legislation raises no obvious constitutional or statutory concerns.