DAR File No. 39354

Environmental Quality, Air Quality

Rule R307-122

General Requirements: Heavy Duty Vehicle Tax Credit

Notice of Proposed Rule

(New Rule)

DAR File No.: 39354
Filed: 05/07/2015 09:14:44 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

H.B. 406, which provides an income tax credit for the purchase of a natural gas heavy duty vehicle, was passed during the 2015 General Session. H.B. 406 gives authority to the Air Quality Board to make rules specifying the requirements and procedures for the tax credit. This proposed new rule, R307-122, is the air quality rule that would do this.

Summary of the rule or change:

This new rule, R307-122, outlines the process for reserving and qualifying for the heavy duty vehicle tax credit.

State statutory or constitutional authorization for this rule:

• Section 19-2-104
• Section 59-7-618
• Subsection 59-10-1033(2)(b)
• Section 19-1-402

Anticipated cost or savings to:

the state budget:

The legislature considered cost when it passed H.B. 406 (2015) and put a limit on the amount of tax credit that can be awarded at $500,000 a year. This rule does not add any additional costs to what was already included in the bill's fiscal note.

local governments:

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

small businesses:

Because this new rule provides for a new tax credit for the purchase of a natural gas heavy duty vehicle, small businesses who choose to apply for the credit will see some savings. The amount of savings is unknown as it is not a requirement to apply for the credit and it is unknown how many small businesses will do so. However, the amount of tax credit that can be awarded is limited to $500,000 a year.

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

Because this new rule provides for a new tax credit for the purchase of a natural gas heavy duty vehicle, persons other than small businesses, businesses, or local governments who choose to apply for the credit will see some savings. The amount of savings is unknown as it is not a requirement to apply for the credit and it is unknown how many tax credit applicants there will be. However, the amount of tax credit that can be awarded is limited to $500,000 a year.

Compliance costs for affected persons:

This is an optional tax credit, and there is no requirement for anyone to apply; therefore, there are no compliance costs for affected persons.

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

Businesses who choose to apply for the new tax credit will see some savings; however, because we do not know how many businesses will apply for the credit, the fiscal impact is unknown. The limit of tax credit that can be awarded in a year is $500,000.

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:

07/01/2015

This rule may become effective on:

08/06/2015

Authorized by:

Bryce Bird, Director

R307. Environmental Quality, Air Quality.

R307-122. General Requirements: Heavy Duty Vehicle Tax Credit.

R307-122-1. Authorization and Purpose.

(1) This rule is authorized by Sections 59-7-618 and 59-10-1033. These statutes establish criteria and definitions used to determine eligibility for an income tax credit.

(2) R307-122 establishes procedures to provide proof of a qualified purchase, in accordance with 59-7-618(6)(a) or 59-10-1033(6)(a), to the director for a qualified heavy duty vehicle for which an income tax credit is allowed under Sections 59-7-618 or 59-10-1033.

 

R307-122-2. Definitions.

The following additional definitions apply to R307-122.

"Heavy duty vehicle" means heavy duty vehicle as defined in Subsection 59-7-618(1)(b) and 59-10-1033(1)(b).

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

"Qualified heavy duty vehicle" means qualified heavy duty vehicle as defined in 59-7-618(1)(d) and 59-10-1033(1)(d).

"Qualified purchase" means qualified purchase as defined in 59-7-618(1)(e) and 59-10-1033(1)(e).

"Qualified taxpayer" means qualified taxpayer as defined in 59-7-618(1)(f) and 59-10-1033(1)(f).

 

R307-122-3. Reservation of a Qualified Heavy Duty Vehicle Tax Credit.

(1) A qualified taxpayer shall reserve a qualified heavy duty vehicle tax credit before submitting proof of qualified purchase to obtain approval from the division for the heavy duty vehicle tax credit. A qualified taxpayer shall apply to reserve the tax credit on forms provided by the division, which will include the following:

(a) the name of the qualified taxpayer and the qualified taxpayers registered name with the United States Department of Transportation (USDOT),

(b) the last four digits of the qualified taxpayer's social security number(SSN) or employer identification number (EIN),

(c) the qualified taxpayer's address, and

(d) the qualified taxpayer's USDOT number.

(2) The tax credit shall be reserved for the qualified taxpayer for up to 180 calendar days from the division's approval of the request to reserve the credit.

(3) If the qualified taxpayer does not meet all of the requirements of R307-122-4 before 181 calendar days after the division's approval of the request to reserve the tax credit, the tax credit will no longer be reserved for the qualified taxpayer.

 

R307-122-4. Proof of Qualified Purchase for a Qualified Heavy Duty Vehicles.

To demonstrate that a heavy duty vehicle is eligible for the tax credit, proof of qualified purchase shall be made in accordance with 59-7-605(6)(a) or 59-10-1009(6)(a), 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 heavy duty vehicle is an OEM natural gas 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 heavy duty vehicle is an OEM natural gas vehicle;

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

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

(4) the certification required under Subsection 59-7-618(2)(b) and 59-10-1033(2)(b).

 

KEY: air pollution, alternative fuels, tax credits, heavy duty vehicles

Date of Enactment or Last Substantive Amendment: 2015

Authorizing, and Implemented or Interpreted Law: 19-2-104; 19-1-402; 59-7-618; 59-10-1033