DAR File No. 38837

Environmental Quality, Air Quality

Rule R307-121

General Requirements: Clean Air and Efficient Vehicle Tax Credit

Notice of Proposed Rule

(Amendment)

DAR File No.: 38837
Filed: 09/04/2014 09:29:14 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

During the 2014 General Legislative Session, the Utah Legislature revised the statute governing the state's Clean Fuel Tax Credit through H.B. 74. The bill modified the eligibility requirements to claim the tax credit. The proposed changes to Rule R307-121 are to align the rule with the new requirements as promulgated through H.B. 74 (2014).

Summary of the rule or change:

Because "qualifying plug-in hybrids" are now eligible for the tax credit, while traditional hybrids are no longer eligible, references to traditional hybrid vehicles are being removed and a definition for "qualifying plug-in hybrid" is being added. The requirements for qualifying vehicles that are purchased under Section R307-121-3 are being consolidated in the rule. Requirements for qualifying vehicles that are leased under Section R307-121-4 are being added.

State statutory or constitutional authorization for this rule:

• Section 59-7-605
• Section 19-2-104
• Section 19-1-402
• Section 59-10-1009

Anticipated cost or savings to:

the state budget:

The legislature considered cost when it approved "qualifying plug-in hybrids" to be eligible for the credit and when it no longer allowed traditional hybrids to qualify for the credit. It is possible that the amendments to this rule could result in additional costs or savings to the state as it changes what vehicles are eligible for the credit; however, those costs or savings are difficult to determine as there is little data on vehicle availability and consumer demand.

local governments:

No costs or savings are anticipated for local government budgets because local governments do not pay taxes.

small businesses:

Because this amendment changes which vehicles are eligible for the tax credit, small businesses that take advantage of the tax credit could either see increased costs or savings depending on what types of vehicles they include in their fleet. The Division is unable to determine the exact costs or savings as there is little data on vehicle availability and consumer demand.

persons other than small businesses, businesses, or local governmental entities:

Because this amendment changes which vehicles are eligible for the tax credit, persons other than small businesses, businesses, or local government entities that take advantage of the tax credit could either see increased costs or savings depending on what types of vehicles they purchase. The Division is unable to determine the exact costs or savings as there is little data on vehicle availability and consumer demand.

Compliance costs for affected persons:

No compliance costs are anticipated for individuals applying for the tax credit, as the cost to apply for the credit is nominal.

Comments by the department head on the fiscal impact the rule may have on businesses:

There is a potential that businesses could see some savings if they purchase qualifying vehicles and apply for and receive the credit. However, it is difficult to determine the exact amount of these savings due to data limitations.

Amanda Smith, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Environmental Quality
Air QualityRoom Fourth Floor
195 N 1950 W
SALT LAKE CITY, UT 84116-3085

Direct questions regarding this rule to:

• Mark Berger at the above address, by phone at 801-536-4000, by FAX at 801-536-0085, or by Internet E-mail at [email protected]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

10/31/2014

This rule may become effective on:

01/01/2015

Authorized by:

Bryce Bird, Director

R307. Environmental Quality, Air Quality.

R307-121. General Requirements: Clean Air and Efficient Vehicle Tax Credit.

R307-121-1. Authorization and Purpose.

(1) This rule is authorized by Sections 59-7-605 and 59-10-1009. These statutes establish criteria and definitions used to determine eligibility for an income tax credit.

(2) R307-121 establishes procedures to provide proof of purchase or lease, in accordance with 59-7-605(3)(b) or 59-10-1009(3)(b), to the director for an OEM vehicle or the conversion of a motor vehicle or special mobile equipment for which an income tax credit is allowed under Sections 59-7-605 or 59-10-1009.

 

R307-121-2. Definitions.

The following additional definitions apply to R307-121.

"Air quality standards" means air quality standards as defined in Subsection 59-7-605(1)(a) and 59-10-1009(1)(a).

"Clean fuel" means clean fuel as defined in Subsection 19-1-402(1).

"Clean fuel vehicle" means clean fuel vehicle as defined in Subsection 19-1-402(2).

"Conversion equipment" means a package that may include fuel, ignition, emissions control, and engine components that are modified, removed, or added to a motor vehicle or special mobile equipment to make that motor vehicle or equipment eligible for the tax credit.

"Motor Vehicle" means a motor vehicle as defined in 41-1a-102.

"Original equipment manufacturer(OEM) vehicle" means original equipment manufacturer(OEM) as defined in Subsection 19-1-402(8).

"Original purchase" means original purchase as defined in Subsection 59-7-605(1)(g) and 59-10-1009(1)(g).

"Qualifying electric [or hybrid ]vehicle" means qualifying electric [or hybrid ]vehicle as defined in 59-7-605(1)(h) or 59-10-1009(1)(h).

"Qualifying plug-in hybrid vehicle" means qualifying plug-in hybrid vehicle as defined in 59-7-605(1)(i) or 59-10-1009(1)(i).

"Window Sticker" means the label required by United States Code Title 15 Sections 1231 and 1232, as effective January 3, 2012.

 

R307-121-3. Proof of Purchase to Demonstrate Eligibility for New OEM Natural Gas, Propane, Qualifying Electric or Qualifying Plug-in Hybrid Vehicles.

To demonstrate that an OEM natural gas, propane, qualifying electric, or qualifying plug-in hybrid motor vehicle is eligible for the tax credit, proof of purchase shall be made in accordance with 59-7-605(3)(b) or 59-10-1009(3)(b), by submitting the following documents to the director:

(1)(a) a copy of the motor vehicle's window sticker, which includes its Vehicle Identification Number (VIN), or equivalent manufacturer's documentation showing that the motor vehicle is an OEM natural gas , propane, qualifying electric or qualifying plug-in hybrid vehicle, or

(b) a signed statement by either an Automotive Service Excellence (ASE)-certified technician or Canadian Standards Association (CSA) America CNG Fuel System Inspector that includes the [vehicle identification number (]VIN[)], the technician's ASE or CSA America certification number, and states that the motor vehicle is an [eligible ]OEM natural gas, propane, qualifying electric or qualifying plug-in hybrid vehicle;

(2) an original or copy of the purchase order, customer invoice, or receipt that includes the name of the taxpayer seeking the credit, the name of the seller of the motor vehicle, the VIN, purchase date, and price of the motor vehicle;[and]

(3) a copy of the current Utah vehicle registration in the name of the taxpayer seeking the credit[.];

(4) an original or copy of the odometer disclosure statement required in Utah Code Annotated Title 41 Chapter 1a Section 902 for the motor vehicle that was acquired as an original purchase; and

(5) the underhood identification number or engine group of the motor vehicle.

 

R307-121-4. Proof of [ Purchase ] Lease to Demonstrate Eligibility for [ Qualifying ] New OEM Natural Gas, Propane, Qualifying Electric or Qualifying Plug-in Hybrid Vehicles.

To demonstrate that an [motor vehicle is a qualifying]OEM natural gas, propane, qualifying electric or qualifying plug-in hybrid vehicle is eligible for the tax credit, proof of [purchase]lease shall be made[,] in accordance with 59-7-605(3)(b) or 59-10-1009(3)(b), by submitting the following documents to the director:

[(1) an original or copy of the odometer disclosure statement required in Utah Code Annotated Title 41 Chapter 1a Section 902 for the motor vehicle that was acquired as an original purchase;

(2) an original or copy of the purchase order, customer invoice, or receipt that includes the name of the taxpayer seeking the credit, the name of the seller of the qualifying electric or hybrid vehicle, the VIN, purchase date, and price of the motor vehicle;

(3) the underhood identification number or engine group of the motor vehicle; and

(4) a copy of the current Utah vehicle registration in the name of the taxpayer seeking the credit.

](1)(a) a copy of the motor vehicle's window sticker, which includes its Vehicle Identification Number (VIN), or equivalent manufacturer's documentation showing that the motor vehicle is an OEM natural gas, propane, qualifying electric or qualifying plug-in hybrid vehicle; or

(b) a signed statement by either an Automotive Service Excellence (ASE)-certified technician or Canadian Standards Association (CSA) America CNG Fuel System Inspector that includes the VIN, the technician's ASE or CSA America certification number, and states that the motor vehicle is an OEM natural gas, propane, qualifying electric or qualifying plug-in hybrid vehicle;

(2) an original or copy of the lease agreement that includes the name of the taxpayer seeking the credit, the name of the lessor of the vehicle, the VIN, the beginning date of the lease, the value of the vehicle at the beginning of the lease, and the value of the vehicle at the end of the lease;

(3) a copy of the current Utah vehicle registration in the name of the taxpayer seeking the credit;

(4) an original or copy of the odometer disclosure statement required in Utah Code Annotated Title 41 Chapter 1a Section 902 for the motor vehicle that was acquired as an original purchase; and

(5) the underhood identification number or engine group of the motor vehicle.

 

R307-121-5. Proof of Purchase to Demonstrate Eligibility for Motor Vehicles Converted to a Clean Fuel.

To demonstrate that a conversion of a motor vehicle to be fueled by a clean fuel is eligible for the tax credit, proof of purchase shall be made, in accordance with 59-7-605(3)(b) or 59-10-1009(3)(b), by submitting the following documentation to the director:

(1) an original or copy of the purchase order, customer invoice, or receipt that includes the name of the taxpayer seeking the credit; the name, address, and phone number of the person that converted the motor vehicle to run on a clean fuel; the VIN; the date of conversion; and the price of the conversion equipment installed on the motor vehicle; and

(2) a copy of the current Utah vehicle registration in the name of the taxpayer seeking the credit.

 

R307-121-6. Proof of Purchase to Demonstrate Eligibility for Special Mobile Equipment Converted to Clean Fuels.

To demonstrate that a conversion of special mobile equipment to be fueled by clean fuel is eligible for the tax credit, proof of purchase shall be made, in accordance with 59-7-605(3)(b) or 59-10-1009(3)(b), by submitting the following documentation to the director:

(1) a description, including serial number, of the special mobile equipment for which credit is to be claimed; and

(2) an original or copy of the purchase order, customer invoice, or receipt that includes the name of the taxpayer seeking the credit, the serial number, the date of conversion, and the price of the conversion equipment installed on the special mobile equipment.

 

KEY: air pollution, alternative fuels, tax credits, motor vehicles

Date of Enactment or Last Substantive Amendment: January 1, 201[4]5

Notice of Continuation: January 23, 2012

Authorizing, and Implemented or Interpreted Law: 19-2-104; 19-1-402; 59-7-605; 59-10-1009