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19-2-102. Definitions
19-2-123. Tax relief to encourage investment in facilities - Sales and use tax exemption.
19-2-124. Application for certification of pollution control facility.
19-2-125. Action on application for certification.
19-2-126. Revocation of certification - Grounds - Procedure
19-2-127. Rules for administering certification for tax relief
19-2-102. Definitions
R865-19-83S. Pollution-Control Facilities Pursuant to Utah Code Ann. Section 59-12-104.
R307-1-6. Eligibility of Pollution Control Expenditures for Sales Tax Exemption and Income Tax Credit.
(1) "Air contaminant" means any particulate matter or any gas, vapor, suspended solid, or any combination of them, excluding steam and water vapors.
(2) "Air contaminant source" means all sources of emission of air contaminants whether privately or publicly owned or operated.
(3) "Air pollution" means the presence in the ambient air of one or more air contaminants in the quantities and duration and under conditions and circumstances as is or tends to be injurious to human health or welfare, animal or plant life, or property, or would unreasonably interfere with the enjoyment of life or use of property, as determined by the rules adopted by the board.
(4) "Ambient air" means the surrounding or outside air.
(5) "Asbestos" means the asbestiform varieties of serpentine (chrysotile), riebeckite (crocidolite), cummingtonite-grunerite, anthophyllite, and actinolite-tremolite.
(6) (a) "Board" means the Air Quality Board.
(b) "Board" means, as used in Sections 19-2-123 through 19-2-126, the Air Quality Board or the Water Quality Board.
(7) "Executive secretary" means the executive secretary of the board.
(8) (a) "Facility" means machinery, equipment, structures, or any part or accessories of them, installed or acquired for the primary purpose of controlling or disposing of air pollution.
(b) "Facility" does not include an air conditioner, fan, or other similar facility for the comfort of personnel.
(9) "Friable asbestos material" means any material containing more than 1% asbestos by weight that hand pressure can crumble, pulverize, or reduce to powder when dry.
(10) "Indirect source" means a facility, building, structure, or installation which attracts or may attract mobile source activity that results in emissions of a pollutant for which there is a national standard.
(11) (a) "Pollution control facility" or "facility" means, as used in Sections 19-2-123 through 19-2-126, any land, structure, building, installation, excavation, machinery, equipment, or device, or any addition to, reconstruction, replacement or improvement of, land or an existing structure, building, installation, excavation, machinery, equipment, or device reasonably used, erected, constructed, acquired, or installed by any person if a substantial purpose of the use, erection, construction, acquisition, or installation is the prevention, control, or reduction of air or water pollution by:
(i) the disposal or elimination of or redesign to eliminate waste and the use of treatment works for industrial waste as defined in Chapter 5 of this title; or
(ii) the disposal, elimination, or reduction of or redesign to eliminate or reduce air contaminants or air pollution or air contamination sources and the use of air cleaning devices.
(b) "Pollution control facility" or "facility" does not include air conditioners, septic tanks, or other facilities for human waste, nor any property installed, constructed, or used for the moving of sewage to the collection facilities of a public or quasi-public sewerage system.
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19-2-123. Tax relief to encourage investment in facilities - Sales and use tax exemption.
(1) It is in the public interest of the state to encourage, through tax relief, investment in pollution control and pollution elimination facilities while at the same time making and keeping the state an attractive location for continued industrial development, including the expansion of existing plants, thereby increasing employment and payrolls and upgrading the natural resources of the state.
(2) All materials and equipment purchased, leased, or otherwise procured and services utilized for the construction or installation in a pollution control facility are exempt from sales and use taxes imposed by Title 59, Chapter 12, Sales and Use Tax Act, upon obtaining a certification of pollution control facility from the board.
19-2-124. Application for certification of pollution control facility.
(1) A person who qualifies under Subsection (2) may apply to the board for certification of a pollution control facility or facilities erected, constructed, or installed, or to be erected, constructed, or installed in the state after December 31, 1972, or on or before January 31, 1985, and after June 30, 1986, and before July 1, 1996. An application may be filed at any time after a firm construction contract has been entered or construction has commenced.
(2) (a) A person who applies under Subsection (1) shall be the owner of a trade or business that uses property in the state requiring a pollution control facility to prevent or minimize pollution or a person who, as a lessee or pursuant to an agreement, conducts the trade or business that operates or uses the property.
(b) The facility shall be owned, operated, or leased during a part of the tax year in which the exemption is claimed.
(c) An exemption may be claimed only in those tax years that begin on or after January 1, 1973, and on or before January 31, 1985, and after June 30, 1986, and before July 1, 1996.
(d) As used in this Subsection, "owner" includes a contract purchaser.
(3) (a) Each application shall be in writing on a form prescribed by the board, contain a description of the facilities and materials incorporated in them, the machinery and equipment, the existing or proposed operational procedure, and a statement of the purpose of pollution prevention, control, or reduction served or to be served by the facility.
(b) The board may require any further information it finds necessary before issuance of a certificate.
19-2-125. Action on application for certification.
(1) (a) If the board finds that a pollution control facility or a part of a pollution control facility, for which application is made under Section 19-2-124 was or is to be erected, constructed, acquired, or installed after December 31, 1972, on or before January 31, 1985, and after June 30, 1986, and before July 1, 1996, and is designed and is being operated or will operate to a substantial extent for the purpose of preventing, controlling, or reducing air or water pollution, and that the applicant qualifies under Section 19-2-124, it shall certify the facility.
(b) If one or more facilities constitute an operational unit, the board may certify those facilities under one certificate.
(2) (a) The board shall act on an application under Section 19-2-124 before the 120th day after filing.
(b) Failure of the board to timely act constitutes automatic acceptance of the application and the board shall furnish a certificate to the applicant on demand.
19-2-126. Revocation of certification - Grounds - Procedure.
(1) (a) The board may revoke the certification issued under Section 19-2-125 of any pollution control facility if it finds that the:
(i) certification was obtained by fraud or gross misrepresentation; or
(ii) holder of the certificate has failed substantially to operate the facility for the purpose of, and to the extent necessary to prevent, control, or reduce air or water pollution as specified in the certificate.
(b) A shutdown of the facility due to force majeure, including obsolescence, is not cause to revoke certification of any facility.
(2) (a) The board shall provide notice of the revocation by issuing a notice of agency action.
(b) The holder of the certificate may obtain judicial review of the revocation.
(c) The revocation is final and conclusive unless an appeal is taken.
(d) If the revocation is affirmed on appeal, revocation is final on the date notice of revocation was received by the holder.
(3) As soon as a revocation under this section is final, the board shall notify the State Tax Commission of the revocation.
(4) (a) If the certification of a pollution control facility is revoked, all prior tax relief provided to the holder because of the certificate is forfeited.
(b) The State Tax Commission shall collect taxes not paid by the holder because of the tax relief provided the holder to the extent permitted by the applicable statute of limitations.
19-2-127. Rules for administering certification for tax relief.
In addition to the powers granted it, the board may formulate, amend, or cancel rules establishing procedures for processing and evaluating applications for certification, establishing procedures for the issuance and revocation of certificates, and all other matters pertaining to the board in administering certification for tax relief on pollution control facilities.
As used in this chapter:
(1) "Board" means the Water Quality Board.
(2) "Contaminant" means any physical, chemical, biological, or radiological substance or matter in water.
(3) "Discharge" means the addition of any pollutant to any waters of the state.
(4) "Disposal system" means a system for disposing of wastes, and includes sewerage systems and treatment works.
(5) "Effluent limitations" means any restrictions, requirements, or prohibitions, including schedules of compliance established under this chapter which apply to discharges.
(6) "Executive secretary" means the executive secretary of the board.
(7) "Individual wastewater disposal system" means a system for disposing of domestic wastewater discharges as defined by the board and the executive director.
(8) "Point source" means any discernible, confined, and discrete conveyance, including but not limited to any pipe, ditch, channel, tunnel, conduit, well, discrete fissure, container, rolling stock, concentrated animal feeding operation, or vessel or other floating craft, from which pollutants are or may be discharged. This term does not include return flows from irrigated agriculture.
(9) "Pollution" means any man-made or man-induced alteration of the chemical, physical, biological, or radiological integrity of any waters of the state, unless the alteration is necessary for the public health and safety.
(10) "Publicly-owned treatment works" means any facility for the treatment of pollutants owned by the state, its political subdivisions, or other public entity.
(11) "Schedule of compliance" means a schedule of remedial measures, including an enforceable sequence of actions or operations leading to compliance with this chapter.
(12) "Sewerage system" means pipelines or conduits, pumping stations, and all other constructions, devices, appurtenances, and facilities used for collecting or conducting wastes to a point of ultimate disposal.
(13) "Treatment works" means any plant, disposal field, lagoon, dam, pumping station, incinerator, or other works used for the purpose of treating, stabilizing, or holding wastes.
(14) "Underground injection" means the subsurface emplacement of fluids by well injection.
(15) "Waste" or "pollutant" means dredged spoil, solid waste, incinerator residue, sewage, garbage, sewage sludge, munitions, chemical wastes, biological materials, radioactive materials, heat, wrecked or discarded equipment, rock, sand, cellar dirt, and industrial, municipal, and agricultural waste discharged into water.
(16) "Waters of the state" means all streams, lakes, ponds, marshes, watercourses, waterways, wells, springs, irrigation systems, drainage systems, and all other bodies or accumulations of water, surface and underground, natural or artificial, public or private, which are contained within, flow through, or border upon this state or any portion of the state, except that bodies of water confined to and retained within the limits of private property, and which do not develop into or constitute a nuisance, or a public health hazard, or a menace to fish or wildlife, are not "waters of the state."
R865-19-83S. Pollution-Control Facilities Pursuant to Utah Code Ann. Section 59-12-104.
A. Pollution-control facilities are exempt from tax. These facilities are defined as any land, structure, building, installation, excavation, machinery, equipment, device, etc., if a substantial purpose of the construction or installation is to prevent, control, or reduce air or water pollution--provided that air conditioners, septic tanks, and certain sewage facilities do not qualify for exemption under any circumstances. Exemption is dependent upon certification of the facilities by either the 'Air Conservation Committee' or the 'Committee on Water Pollution.' Since certification may not occur until a firm contract has been entered into or construction has begun, tax should be paid on all purchases of tangible personal property or taxable services that become part of a pollution control facility until the facility is certified and invoices and records retained to show the amount of tax paid. Upon verification of the amount of tax paid for pollution control facilities and verification that a certificate has been obtained, the Tax Commission will refund the taxes paid on these purchases. After the facility is certified, qualifying purchases should be made without paying tax by providing an exemption certificate to the vendor.
B. Claims for refund of tax paid prior to certification must be filed within 180 days after certification of a facility. Refund claims filed within this time period will have interest added at the rate prescribed in Utah Code Ann. Section 59-1-402 from the date of the overpayment.
C. If claims for refund are not filed within 180 days after certification of a facility, it is assumed the delay was for investment purposes, and interest shall be added at the rate prescribed in Utah Code Ann. Section 59-1-402 however, interest will not begin to accrue until 30 days after receipt of the refund request.
D. In the event part of the pollution control facility is constructed under a real property contract by someone other than the owner, the owner should obtain a statement from the contractor certifying the amount of Utah sales and use tax paid by the contractor and the location of the vendors to whom tax was paid, and the owner will then be entitled to a refund of the tax paid and included in the contract.
E. The owner shall apply to the Tax Commission for a refund using forms furnished by the Tax Commission. The claim for refund must contain sufficient information to support the amount claimed for credit and show that the tax has in fact been paid.
F. The owner shall retain records to support the claim that the project is qualified for the exemption.
R307-1-6. Eligibility of Pollution Control Expenditures for Sales Tax Exemption and Income Tax Credit.
6.1 Eligibility of Pollution Control Expenditures for Sales Tax Exemption.
6.1.1 Application for certification shall be made on forms provided by the State Department of Environmental Quality, and shall include all information requested thereon and such additional reasonably necessary information as is requested by the executive secretary of the Air Quality Board or the executive secretary of the Water Quality Board.
6.1.2 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 pollution.
6.1.3 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.
6.1.4 All materials, equipment and structures (or part thereof) purchased, leased or otherwise procured and services utilized for construction or installation in a water or 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 water or air pollution.
The above includes expenditures which reduce the amount of pollutants produced as well as expenditures which 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 or water pollution control facilities meeting the requirements of Subsections R307-1-6.1.4.A and R307-1-6.1.4.B, including equipment required for compliance monitoring, shall be eligible for certification.
6.1.5 Applications for certification shall be certified by the executive secretary of the Air Quality Board or the executive secretary of the Water Quality Board after consultation with the State Tax Commission and only if:
A. Air Quality
(1) the air pollution control facility in question has been reviewed and approved by the executive secretary of the Air Quality Board for those air pollution sources needing review in accordance with Section R307-1-3.1 of these rules, 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,
B. Water Quality
(1) plans for the water pollution control facility in question require review and approval by the Water Quality Board and have been so approved, or
(2) the water pollution control facility is specifically required by the Water Quality Board, including facilities constructed for pretreatment of wastes prior to discharge to a public sewerage system in accordance with Subsection R317-8-8.1, but excluding facilities which are permitted by rule under Subsection R317-6-6.2 (Ground Water Discharge Permit by Rule) unless required to obtain an individual permit by the Water Quality Board, or
(3) the water pollution control facility is required and permitted by another statutory board within the Department of Environmental Quality, or
(4) the water pollution control facility eliminates or reduces the discharge of pollutants which would be regulated by the Water Quality Board, if such pollutants were discharged.
6.1.6 The following items are specifically not eligible for certification:
A. materials and supplies used in the normal operation or maintenance of the water or air pollution control facilities;
B. materials, equipment, and services used to monitor ambient air or water, unless required for a permit or approval from a statutory board within the Department of Environmental Quality;
C. materials, equipment, and services for collection, treatment, and disposal of human wastes, unless the primary purpose of such materials, equipment and services is the treatment of industrial wastes;
D. materials, equipment and services used in removal, treatment, or disposal of pollutants from contaminated ground water, if the applicant caused the ground water contamination by failing to comply with applicable permits, approvals, rules, or standards existing at the time the contamination occurred; and
E. air conditioners.
6.1.7 Upon determination that facilities described in any application under Subsection R307-1-6.1.1 satisfy the requirements of these rules and Sections 19-2-123 through 19-2-127 the executive secretary of the Air Quality Board or the executive secretary of the Water Quality Board shall issue a certification of pollution control facility to the applicant.
6.1.8 If the application is rejected, the applicant may appeal to the appropriate Board within 20 days for an informal hearing. The Board's decision will be final and conclusive on all parties unless appealed.
6.1.9 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.
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