SB 521

Sales tax exemptions

This bill provides a sales and use tax exemption for extended-range electric

vehicles that are licensed for highway use.

Property tax exemptions

This bill exempts from property taxes all tangible personal property used

exclusively to provide electricity to recharge electric vehicles that are licensed for

highway use or neighborhood electric vehicles that are allowed, by ordinance, to

operate on a roadway that has a speed limit of 35 miles per hour or less.

This bill also creates a property tax exemption and a sales and use tax

exemption for machinery and other tangible personal property used for qualified

research by persons engaged primarily in manufacturing, silviculture, or

biotechnology in this state.

Vehicle emission inspections and electric vehicle grant program

Current law requires the Department of Transportation (DOT) to conduct a

motor vehicle emission inspection and maintenance program (I/M program) in

counties in which the air quality does not meet certain federal standards

(nonattainment counties). Under the I/M program, most motor vehicles that are

subject to emission limitations established by the Department of Natural Resources

(DNR) must pass periodic emission inspections and may not be registered by DOT

unless they have passed these inspections. Most nonexempt motor vehicles must

undergo an initial emission inspection in the fourth year after the vehicle's model

year and additional emission inspections every two years thereafter. DOT may

contract with third parties to perform vehicle emission inspections under the I/M

program. The costs of administering the program, including contracting for emission

inspections, are primarily paid by DOT from the transportation fund, although a

small portion of the costs are paid by DNR from the general fund.

This bill terminates the I/M program on July 1, 2011, and prohibits DOT from

entering into any new contract, or renewing or extending any existing contract, for

the operation of the I/M program before that date. The bill also creates

appropriations to transfer money from the transportation fund to the general fund

and to fund, from the general fund, an extended-range electric vehicle grant

program. The bill requires the Department of Commerce (Commerce), after July 1,

2011, to award grants to promote the extended-range electric vehicle industry, and

research, production, and use of extended-range electric vehicles, in the

nonattainment counties. Commerce must promulgate rules to implement and

administer the extended-range electric vehicle grant program.

Super research and development credit

Under current law, for taxable years beginning on or after January 1, 2011, a

corporation may also claim a "super research and development" income and

franchise tax credit equal to the amount of its qualified research expenses in the