DAR File No. 38998

Environmental Quality, Air Quality

Rule R307-120

General Requirements: Tax Exemption for Air Pollution Control Equipment

Notice of Proposed Rule

(Amendment)

DAR File No.: 38998
Filed: 12/04/2014 01:27:03 PM

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 certification for sales tax exemption for pollution control equipment. H.B. 31 repealed the old statute and enacted a new statute. The old and new statutes are similar but do contain differences. These proposed amendments are to align the rule with the new statute.

Summary of the rule or change:

The proposed amendments to Rule R307-120 add a section for the rule applicability and rule definitions; expand the application requirements to be consistent with the statute; combine the "Review Period" and "Duty to Issue Certification" sections of the old rule into a new section, "Issuance of Certification;" remove the old sections of "Eligibility for Certification," "Conditions of Eligibility," and "Limitations of Certification;" and update the language in the "Exemptions from Certifications" and "Appeal and Revocation" to be consistent with the statute.

State statutory or constitutional authorization for this rule:

• Section 19-12-101
• Section 19-12-201
• Section 19-12-203
• Section 19-12-102
• Section 19-12-302
• Section 19-12-202
• Section 19-12-303
• Section 19-12-301

Anticipated cost or savings to:

the state budget:

The amendments to the rule slightly change the requirements for applying for and receiving the tax exemption. There are no changes that result in any measurable costs or savings to the state budget.

local governments:

The amendments to the rule slightly change the requirements for applying for and receiving the tax exemption. There are no changes that result in any measurable costs or savings to local government.

small businesses:

The amendments to the rule slightly change the requirements for applying for and receiving the tax exemption. There are no changes that result in any measurable costs or savings to small businesses.

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

The amendments to the rule slightly change the requirements for applying for and receiving the tax exemption. There are no changes that result in any measurable costs or savings to persons other than small businesses, businesses, or local government entities.

Compliance costs for affected persons:

The amendments to the rule slightly change the requirements for applying for and receiving the tax exemption. There are no changes that result in any measurable additional compliance costs for affected persons.

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

The amendments to the rule slightly change the requirements for applying for and receiving the tax exemption. There are no changes that would have a measurable fiscal impact on businesses.

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 mberger@utah.gov

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:

02/02/2015

This rule may become effective on:

03/05/2015

Authorized by:

Bryce Bird, Director

R307. Environmental Quality, Air Quality.

R307-120. General Requirements: Tax Exemption for Air Pollution Control Equipment.

R307-120-1. Applicability.

This rule shall apply to purchases described in Section 19-12-201.

 

R307-120-2. Definitions.

The following definitions apply to R307-120:

"Freestanding pollution control property" means freestanding pollution control property as defined in Section 19-12-102.

"Pollution control facility" means pollution control facility as defined in Section 19-12-102.

 

R307-120-[1]3. Application for Certification.

(1) An [A]application for certification shall be made on the form provided by the director.[Division of Air Quality, and]

(2) The application shall include all information requested thereon and such additional [reasonably necessary ]information as is requested by the director[executive secretary of the Air Quality Board]. At a minimum, the application shall contain:

(a) a description of the pollution control facility or the freestanding pollution control property;

(b) a description of the property, part, product, or service for a purchase or lease of property, a part, a product or a service for which a person seeks to claim a sales and use tax exemption under Section 19-12-201;

(c) the existing or proposed operation procedure for the pollution control facility or freestanding pollution control property; and

(d) a statement of the purpose served or to be served by the pollution control facility or freestanding pollution control property.

(3) Applications for certification shall include:

(a) a reference to the approval order issued under R307-401-8 that requires the pollution control facility or the freestanding pollution control property; or

(b) a reference to the section of the State Implementation Plan that requires the pollution control facility or the freestanding pollution control property; or

(c) an estimate of emission reductions (in tons per year) resulting from the use of the pollution control facility or the freestanding pollution control property.

(4) The director may require an application to contain additional information that the director finds necessary to determine whether to grant certification under Section 19-12-303.

 

[R307-120-2. Eligibility for Certification.

Certification shall be made only for taxpayers who are owners, operators (under a lease) or contract purchasers of a trade or business that utilizes Utah property with a pollution control facility to prevent or minimize air pollution.

 

]R307-120-[3]4. [Review Period]Issuance of Certification.

(1) [Date of filing shall be date of receipt of the final item of information requested and this filing date shall initiate the 120-day review period.]The filing date of the application shall be the date the director receives a complete application with all of the information as described in R307-120-3. Within 120 days of the filing date of the application, the director will:

(a) issue a written certification of the pollution control facility or the freestanding pollution control property; or

(b) provide a written statement of the reason for the denial of certification.

(2) The director shall issue a certification of a pollution control facility or a freestanding pollution control property to the applicant if the director determines that:

(a) the application meets the requirements of Section 19-12-301(3) or 19-12-302(2);

(b) the facility or property that is the subject of the application is a pollution control facility or a freestanding pollution control property.

(c) the person who files the application is a person described in Section 19-12-301(1) or 19-12-302(1); and

(d) the purchases or leases for which the person seeks to claim a sales and use tax exemption are exempt under Section 19-12-201.

(3) The director may issue one certification for one or more pollution control facilities or freestanding pollution control properties that constitute an operational unit.

(4) If the director does not issue or deny a certification within 120 days after the date a person files an application, the director shall issue a certification to the person at the person's request.

 

[R307-120-4. Conditions for Eligibility.

(1) All materials, equipment and structures (or part thereof) purchased, leased or otherwise procured and services utilized for construction or installation in an air pollution control facility shall be eligible for certification, provided:

(a) such materials, equipment, structures (or part thereof), and services installed, constructed, or acquired result in a demonstrated reduction of pollutant discharges or emission pollutant levels, and

(b) the primary purpose of such materials, equipment, structures (or part thereof), and services is preventing, controlling, reducing, or disposing of air pollution.

(2) The above includes expenditures that reduce the amount of pollutants produced as well as expenditures that result in removal of pollutants from waste streams. The materials, equipment, structures (or part thereof), and services that are necessary for the proper functioning of air pollution control facilities meeting the requirements of (1)(a) and (b) above, including equipment required for compliance monitoring, shall be eligible for certification.

 

R307-120-5. Limitations on Certification.

Applications for certification shall be certified by the executive secretary of the Board after consultation with the State Tax Commission and only if:

(1) the air pollution control facility in question has been reviewed and approved by the executive secretary of the Board for those air pollution sources needing review in accordance with R307-401, or

(2) the air pollution control facilities installed, constructed, or acquired are the result of the requirements of these rules (permits by rule) or the State Implementation Plan.

 

]R307-120-[6]5. Exemptions from Certification.

The director shall not issue a certification for the following:

(1) a replacement of freestanding pollution control property; or

(2) property, a part, a product, or a service described in Sections 19-12-201(1)(b) through (e) used or performed in a repair or replacement related to:

(a) a pollution control facility; or

(b) a freestanding pollution control property.

(3) a pollution control facility or a freestanding pollution control property that has already received a certification under R307-120-5.

[The following items are specifically not eligible for certification:

(1) materials and supplies used in the normal operation or maintenance of the air pollution control facilities;

(2) materials, equipment, and services used to monitor ambient air, unless required for a permit or approval from the Board;

(3) air conditioners.

 

R307-120-7. Duty to Issue Certification.

Upon determination that facilities described in any application under R307-120-1 satisfy the requirements of these rules and Sections 19-2-123 through 19-2-127 the executive secretary of the Board shall issue a certification of pollution control facility to the applicant.]

 

R307-120-[8]6. Appeal and Revocation.

(1) A decision of the [executive secretary of the Board]director may be reviewed by filing a Request for Agency Action as provided in [R307-103]R305-7.

(2) [Revocation of prior certification shall be made for any of the circumstances prescribed in Section 19-2-126, after consultation with the State Tax Commission.]The director may revoke a certification issued under Section 19-12-303 if the director makes a determination as contained in Section 19-12-304.

 

KEY: air pollution, tax exemptions, equipment

Date of Enactment or Last Substantive Amendment: [August 29, 2011]2015

Notice of Continuation: February 1, 2012

Authorizing, and Implemented or Interpreted Law: [19-2-123; 19-2-124; 19-2-125; 19-2-126; 19-2-127]19-12-101; 19-12-102; 19-12-201; 19-12-202; 19-12-203; 19-12-301; 19-12-302; 19-12-303; 19-12-304; 19-12-305