ENROLLED HOUSE
BILL NO. 2542 By: O'Donnell and McBride of the House
and
Woods of the Senate
An Act relating to revenue and taxation; amending 68 O.S. 2021,
Section 2357.22, as amended by Section 1, Chapter 404, O.S.L. 2022 (68 O.S.
Supp. 2022, Section 2357.22) which relates to income tax credits for certain
qualified fuel burning properties; modifying definitions; modifying eligible
vehicle types for purposes of tax credit; deleting reference to certain tax
year; providing an effective date; and declaring an emergency.
SUBJECT: Revenue and taxation
BE IT
ENACTED BY THE PEOPLE OF THE STATE OF
SECTION 1.
AMENDATORY 68 O.S. 2021,
Section 2357.22, as amended by Section 1, Chapter 404, O.S.L. 2022 (68 O.S.
Supp. 2022, Section 2357.22), is amended to read as follows:
Section 2357.22
A. For tax years 2028 and before,
there shall be allowed a one-time credit against the income tax imposed by
Section 2355 of this title for investments in qualified clean-burning motor
vehicle fuel property placed in service on or after January 1, 1991, or with
respect to a hydrogen fuel cell, on or after the effective date of this act.
B. As used in this
section, "qualified clean-burning motor vehicle fuel property" means:
1. Equipment installed to
modify a motor vehicle which is propelled by gasoline or diesel fuel so that
the vehicle may be propelled by compressed natural gas, a hydrogen fuel
cell, liquefied natural gas, or liquefied petroleum gas. The equipment covered by this paragraph must:
a. be
new, not previously used to modify or retrofit any vehicle propelled by
gasoline or diesel fuel and be installed by an alternative fuels equipment
technician who is certified in accordance with the Alternative Fuels Technician
Certification Act,
b. meet
all Federal Motor Vehicle Safety Standards set forth in 49 CFR 571, or
c. for
any commercial motor vehicle (CMV), follow the Federal Motor Carrier Safety
Regulations or Oklahoma Intrastate Motor Carrier Regulations;
2. A motor vehicle
originally equipped so that the vehicle may be propelled by compressed natural
gas, a hydrogen fuel cell, or liquefied natural gas or liquefied
petroleum gas but only to the extent of the portion of the basis of such motor
vehicle which is attributable to the storage of such fuel, the delivery to the
engine of such motor vehicle of such fuel, and the exhaust of gases from
combustion of such fuel;
3. Property, not
including a building and its structural components, which is:
a. directly
related to the delivery of compressed natural gas, liquefied natural gas or
liquefied petroleum gas, or hydrogen for commercial purposes or for a fee or
charge, into the fuel tank of a motor vehicle propelled by such fuel including
compression equipment and storage tanks for such fuel at the point where such
fuel is so delivered but only if such property is not used to deliver such fuel
into any other type of storage tank or receptacle and such fuel is not used for
any purpose other than to propel a motor vehicle, or
b. a
metered-for-fee, public access recharging system for motor vehicles propelled
in whole or in part by electricity. The
property covered by this paragraph must be new, and must not have been
previously installed or used to refuel vehicles powered by compressed natural
gas, liquefied natural gas or liquefied petroleum gas, hydrogen, or
electricity.
Any
property covered by this paragraph which is related to the delivery of hydrogen
into the fuel tank of a motor vehicle shall only be eligible for tax years 2010
and 2023 through 2028;
4. Property which is
directly related to the compression and delivery of natural gas from a private
home or residence, for noncommercial purposes, into the fuel tank of a motor
vehicle propelled by compressed natural gas.
The property covered by this paragraph must be new and must not have
been previously installed or used to refuel vehicles powered by natural gas; or
5. For tax years 2010 and
2023 through 2028, a motor vehicle originally equipped so that the vehicle may
be propelled by a hydrogen fuel cell electric fueling system.
C. As used in this
section, "motor vehicle" means a motor vehicle originally designed by
the manufacturer to operate lawfully and principally on streets and highways.
D. The credit provided
for in subsection A of this section shall be as follows:
1. For the qualified
clean-burning motor vehicle fuel property defined in paragraphs 1, 2, or 5 of
subsection B of this section, the amount of the credit shall be as follows
based upon gross vehicle weight of the qualified vehicle:
a. for
vehicles up to or below six thousand (6,000) pounds, the credit shall be a
maximum of Five Thousand Five Hundred Dollars ($5,500.00),
b. for
vehicles between six thousand one (6,001) pounds to ten thousand (10,000)
pounds, the credit shall be a maximum amount of Nine Thousand Dollars
($9,000.00),
c. for vehicles of ten thousand one (10,001)
pounds, but not in excess of twenty-six thousand five hundred (26,500) pounds,
the credit shall be a maximum amount of Twenty-six Thousand Dollars
($26,000.00), and
d. for
vehicles in excess of twenty-six thousand five hundred one (26,501) pounds, the
credit shall be a maximum amount of One Hundred Thousand Dollars ($100,000.00);
2. For qualified
clean-burning motor vehicle fuel property defined in paragraph 3 of subsection
B of this section, a per-location credit of forty-five percent (45%) of the
cost of the qualified clean-burning motor vehicle fuel property; and
3. For qualified
clean-burning motor vehicle fuel property defined in paragraph 4 of subsection
B of this section, a per-location credit of the lesser of fifty percent (50%)
of the cost of the qualified clean-burning motor vehicle fuel property or Two
Thousand Five Hundred Dollars ($2,500.00).
E. In cases where no
credit has been claimed pursuant to paragraph 1 of subsection D of this section
by any prior owner and in which a motor vehicle is purchased by a taxpayer with
qualified clean-burning motor vehicle fuel property installed by the
manufacturer of such motor vehicle and the taxpayer is unable or elects not to
determine the exact basis which is attributable to such property, the taxpayer
may claim a credit in an amount not exceeding the lesser of ten percent (10%)
of the cost of the motor vehicle or One Thousand Five Hundred Dollars
($1,500.00).
F. If the tax credit
allowed pursuant to subsection A of this section exceeds the amount of income
taxes due or if there are no state income taxes due on the income of the
taxpayer, the amount of the credit not used as an offset against the income
taxes of a taxable year may be carried forward, in order, as a credit against
subsequent income tax liability for a period not to exceed five (5) years. The tax credit authorized pursuant to the
provisions of this section shall not be used to reduce the tax liability of the
taxpayer to less than zero (0).
G. A husband and wife who
file separate returns for a taxable year in which they could have filed a joint
return may each claim only one-half (1/2) of the tax credit that would have
been allowed for a joint return.
H. The Oklahoma Tax
Commission is herein empowered to promulgate rules by which the purpose of this
section shall be administered including the power to establish and enforce
penalties for violations thereof.
I. Notwithstanding the
provisions of Section 2352 of this title, for the fiscal year beginning on July
1, 2014, and each fiscal year thereafter, the Tax Commission shall calculate an
amount that equals five percent (5%) of the cost of qualified clean-burning
motor vehicle fuel property as provided for in paragraph 1 of subsection D of
this section for tax year 2012. For each
subsequent fiscal year thereafter, the Tax Commission shall perform the same
computation with respect to the second tax year preceding the beginning of each
subsequent fiscal year. The Tax
Commission shall then transfer an amount equal to the amount calculated in this
subsection from the revenue derived pursuant to the provisions of subsections
A, B and E of Section 2355 of this title to the Compressed Natural Gas
Conversion Safety and Regulation Fund created in Section 130.25 of Title 74 of
the Oklahoma Statutes.
J. For the tax years 2020
through 2022, the total amount of credits authorized by this section used to
offset tax shall be adjusted annually to limit the annual amount of credits to
Twenty Million Dollars ($20,000,000.00).
The Tax Commission shall annually calculate and publish by the first day
of the affected taxable year a percentage by which the credits authorized by
this section shall be reduced so the total amount of credits used to offset tax
does not exceed Twenty Million Dollars ($20,000,000.00) per year. The formula to be used for the percentage
adjustment shall be Twenty Million Dollars ($20,000,000.00) divided by the
credits claimed in the second preceding year, with respect to any changes to
the future of the credit.
K. Pursuant to subsection
J of this section, in the event the total tax credits authorized by this
section exceed Twenty Million Dollars ($20,000,000.00) in any calendar year,
the Tax Commission shall permit any excess over Twenty Million Dollars
($20,000,000.00) but shall factor such excess into the percentage adjustment
formula for subsequent years with respect to any changes to the future of the
credit.
L. For the tax years 2023
through 2028, the total amount of credits authorized by this section used to offset
tax shall be adjusted annually to limit the annual amount of credits to:
1. Ten Million Dollars
($10,000,000.00) for qualified clean burning fuel property propelled by
compressed natural gas, liquefied natural gas, or liquefied petroleum gas,
property related to the delivery of compressed natural gas, liquefied natural
gas or liquefied petroleum gas, and property directly related to the
compression and delivery of natural gas;
2. Ten Million Dollars
($10,000,000.00) for property originally equipped so that the vehicle may be
propelled by a hydrogen fuel cell electric fueling system and property directly
related to the delivery of hydrogen; and
3. Ten Million Dollars
($10,000,000.00) for property which is a metered-for-fee, public access
recharging system for motor vehicles propelled in whole or in part by
electricity.
The Tax Commission shall annually calculate and publish by the
first day of the affected taxable year a percentage by which the credits
authorized by this section shall be reduced so the total amount of credits used
to offset tax does not exceed each of the limits provided in paragraphs 1
through 3 of this subsection. The
formula to be used for the percentage adjustment shall be Ten Million Dollars
($10,000,000.00) divided by the credits claimed in the second preceding year,
with respect to any changes to the future of the credit.
M. Pursuant to subsection
L of this section, in the event the tax credits authorized by this section
exceed any of the limits provided in paragraphs 1 through 3 of subsection L of
this section in any year, the Tax Commission shall permit any excess over Ten
Million Dollars ($10,000,000.00) but shall factor such excess into the
percentage adjustment formula for subsequent years with respect to any changes
to the future of the credit.
N. The Tax Commission
shall notify the Office of the State Secretary of Energy and Environment at any
time when the amount of claims for credits allowed pursuant to this section
reaches eighty percent (80%) of the total annual limit provided in subsection J
of this section. Upon such notification,
the Secretary shall provide notice to the Governor, President Pro Tempore of
the Senate and Speaker of the House of Representatives.
SECTION 2.
This act shall become effective July 1, 2023.
SECTION 3.
It being immediately necessary for the preservation of the public peace,
health or safety, an emergency is hereby declared to exist, by reason whereof
this act shall take effect and be in full force from and after its passage and
approval.
Passed the
House of Representatives the 20th day of March, 2023.
Presiding
Officer of the House
of
Representatives
Passed the Senate the 20th day of
April, 2023.
Presiding
Officer of the Senate
OFFICE OF THE GOVERNOR
Received by the Office
of the Governor this ____________________ day of ___________________,
20_______, at _______ o'clock _______ M.
By:
_________________________________
Approved by the
Governor of the State of Oklahoma this _________ day of ___________________,
20_______, at _______ o'clock _______ M.
_________________________________
Governor of
the State of Oklahoma
OFFICE
OF THE SECRETARY OF STATE
Received by the Office
of the Secretary of State this __________ day of ___________________,
20_______, at _______ o'clock _______ M.
By:
_________________________________