Utah Natural Gas Laws and Incentives

State Incentives

High Occupancy Vehicle (HOV) Lane Exemption

Vehicles with clean fuel license plates are authorized to travel in HOV lanes regardless of the number of occupants, to the extent authorized or permitted by federal law or federal regulation. The clean fuel plate must be purchased from a Utah Motor Vehicles office for a fee of $15. Until January 1, 2009, vehicle owners must also present a Clean Special Fuel Certificate. To be eligible for a clean fuel license plate, a vehicle must meet the definition of a clean fuel vehicle as defined in Utah Code 19-2-402. This incentive expires December 31, 2010. (Reference House Bill 106, 2008, and Utah Code 41-6a-702 and 63-55-241)

Alternative Fuel Vehicle (AFV) and Fueling Infrastructure Grants and Loans

The Utah Clean Fuels and Vehicle Technology Grant and Loan Program, funded through the Clean Fuels and Vehicle Technology Fund, provides grants to assist businesses and government entities in covering: 1) the cost of converting a vehicle to operate on clean fuels; 2) the incremental cost of purchasing an Original Equipment Manufacturer (OEM) clean fuel vehicle; and 3) the cost of retrofitting diesel vehicles with U.S. Environmental Protection Agency verified closed crankcase filtration devices, diesel oxidation catalysts, and/or diesel particulate filters. The Clean-Fuels Grant and Loan Program also provides loans for the cost of converting a vehicle to operate on a clean fuel, for the purchase of OEM clean fuel vehicle, and for the purchase of fueling equipment for public/private sector business and government vehicles. Finally, the program can provide grants and loans to serve as matching funds for federal and non-federal grants for the purpose of vehicles to operate on a clean fuel, purchasing OEM clean fuel vehicles, or retrofitting diesel vehicles. The Clean Fuels Grant and Loan Program is on hold pending final development of administrative rules. (Reference Utah Code 19-1-401 through 19-1-405)

Clean Fuel Vehicle Tax Credit

The state provides an income tax credit for 50% of the incremental cost (up to $3,000 maximum) of a clean fuel vehicle built by an Original Equipment Manufacturer (OEM) and/or an income tax credit for 50% of the cost (up to $2,500 maximum) of converting the vehicle to operate on an alternative fuel for vehicles purchased after January 1, 2001, and registered in Utah. If not previously used, the tax credit may be claimed on used vehicles. Tax credits are available for businesses and individuals, may be carried forward up to five years, and are not available for hybrid electric vehicles. Documentation must be provided as described in the Utah state tax form TC-40V. Effective January 1, 2009, the credit amount for OEM vehicles will decrease to 35% of the incremental cost (up to $2,500) for compressed natural gas vehicles registered in Utah; other clean fuel vehicles may be eligible for a credit of up to $750. (Reference House Bill 106, 2008, Utah Code 59-7-605 and 59-10-127)

Alternative Fuel Vehicle (AFV) Parking Incentive – Salt Lake City

Salt Lake City has a free metered parking program for “Green Vehicles”, which are vehicles that qualify for a Utah Clean Fuel license plate by meeting the definition of a clean fuel vehicle as defined by Utah Code 19-1-402, or that qualify for a Salt Lake City “Green Vehicle” parking permit by being a top performer in regards to city fuel economy or emissions. To park free at meters, vehicles must display a Utah Clean Fuel license plate, or “Green Vehicle” parking permit. Green Vehicle parking permits are available from the Salt Lake City Transportation Division for vehicles meeting at least one of the following criteria: 1) achieve a city fuel economy of at least 41 miles per gallon as determined by the U.S. Environmental Protection Agency (EPA), or 2) achieve an EPA Green Vehicle Guide pollution score of at least eight for Utah. (Reference Salt Lake City Code 12.56.205)

State Laws and Regulations

Alternative Fuels Tax

Until January 1, 2009, owners of qualified alternative fuel vehicles that operate on propane, compressed natural gas, or electricity, are required to pay a clean special fuel tax by annually purchasing a Clean Special Fuel Certificate. This certificate may be obtained during vehicle registration or may be purchased at any time thereafter. The cost of this certificate is $82 annually for vehicles with a Gross Vehicle Weight Rating (GVWR) of up to 26,000 pounds (lbs.) and $126 annually for vehicles over 26,000 lbs. GVWR. Government entities that own or lease an alternative fuel vehicle are exempt from the clean special fuel tax. The Revenue and Tax Code provides for a reduction of motor and special fuel taxes if the motor or special fuel is already taxed by the Navajo Nation. Agreements with the Navajo Nation related to administration of motor and special fuels taxes have been authorized. (Reference House Bill 106, 2008, and Utah Code 59-13-201, 59-13-301, and 59-13-303 through 59-13-304)

Provision for Establishment of Alternative Fuel Use Mandate

The Utah Air Quality Board is authorized to mandate fleet vehicles to use clean fuels, if such a mandate is necessary in order to meet national air quality standards. (Reference Utah Code 19-2-105.3)

Utilities/Private Incentives

Incentive for Airport Alternative Fuels Use

The Salt Lake City Department of Airports provides incentives to commercial ground transportation providers who purchase and operate clean fuel vehicles exclusively using approved clean fuels (as designated by State of Utah Statute 59-13-102). Eligible vehicles are those that operate on compressed natural gas, propane, hydrogen, electricity, or hybrid electric vehicles. The incentives are in the form of a credit against ground transportation fees. Incentive credit amounts are $2,500 for each Original Equipment Manufacturer vehicle or certified vehicle converted to operate on an alternative fuel. (Reference Salt Lake City Department of Airports Clean Fuel Policy Number 10.07.100)

Natural Gas Technical Assistance

Questar Gas offers technical assistance to customers interested in converting their vehicles to operate on compressed natural gas. The company provides financial analysis and fleet consulting services for alternative fuel comparisons.