No. 32275: R307-121. General Requirements: Clean Airand Efficient Vehicle Tax Credit

DAR File No.: 32275
Filed: 01/06/2009, 06:53
Received by: NL

NOTICE OF REVIEW AND STATEMENT OF CONTINUATION

Concise explanation of the particular statutory provisions under which the rule is enacted and how these provisions authorize or require the rule:

Sections 59-7-605 and 59-10-1009 authorize an income tax credit for those purchasing a new vehicle that uses clean fuels and for those who retrofit a vehicle to use clean fuels. Rule R307-121 sets forth conditions for eligibility and the process of application for corporate and individual income tax credits.

Summary of written comments received during and since the last five-year review of the rule from interested persons supporting or opposing the rule:

Rule R307-121 has been amended twice since the last five-year review: June 2008 under DAR No. 31389, and October 2008 under DAR No. 31928. Comments where received on the June 2008 amendment and are summarized below. No other comments where received. COMMENT 1 (from John Mitton, NaturalDrive Partners): The Division of Air Quality should consider extending the grant and loan program, as well as the alternative fuel tax credits to include not only vehicles which have valid EPA certifications of conformity, but also to vehicles which have been granted Testing Exemptions from EPA. RESPONSE 1: The intent of this program is to provide an incentive for taxpayers to convert their vehicles to use a cleaner burning fuel or to buy a vehicle that was built by an original equipment manufacturer (OEM) to run on a cleaner burning fuel. To demonstrate that the converted vehicle is cleaner than before the conversion, Sections 59-7-605 and 59-10-1009 require one of the following as proof of certification: a certification of the conversion equipment by the federal Environmental Protection Agency, a certification of the conversion equipment by a state whose certification standards are recognized by the board, testing the motor vehicle before and after installation of the conversion equipment in accordance with 40 CFR Part 86, and any other test or standard recognized by board rule. As required in the Utah Code, the testing exemption would not qualify under any of these categories. COMMENT 2 (from John Mitton, NaturalDrive Partners): The Division of Air Quality might also consider mirroring the Federal statute in providing that the seller of the vehicle or conversion could capture the tax credit in the event the buyer is a non-taxpaying entity. This would provide immediate assistance to, for example, a municipality which is converting a fleet to an alternative fuel, as opposed to the current provision which would likely provide some assistance in the future resale value of the vehicle. RESPONSE 2: Subsections 59-7-605(3) and 59-10-1009(3) only extend this tax credit to a claimant, estate, or trust that has purchased the vehicle. This would require a change to the Utah Code that would allow others to claim the tax credit. In addition, the Grant and Loan Program was created to allow non-taxpaying entities a way of offsetting the cost of buying alternative fuel vehicles. COMMENT 3 (Kathy Van Dame, Wasatch Clean Air Coalition): There seems to be some inconsistencies between Rule R307-121 and Subsections R307-123-4(4)(a) and (b). RESPONSE 3: The Division of Air Quality agreed and changed the language in Rule R307-123 to match the language in Rule R307-121.

Reasoned justification for continuation of the rule, including reasons why the agency disagrees with comments in opposition to the rule, if any:

Rule R307-121 is authorized by Sections 59-7-605 and 59-10-1009. Therefore, this rule should be continued.

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

Environmental Quality
Air Quality
150 N 1950 W
SALT LAKE CITY UT 84116-3085

Direct questions regarding this rule to:

Kimberly Kreykes at the above address, by phone at 801-536-4042, by FAX at 801-536-4099, or by Internet E-mail at [e-mail]

Authorized by:

Bryce Bird, Planning Branch Manager