H.B. 199

1

TAX CREDITS FOR ENERGY EFFICIENT
2 RESIDENCES
3 2008 GENERAL SESSION
4 STATE OF UTAH
5 Chief Sponsor: Fred R. Hunsaker
6 Senate Sponsor: ____________
7
8 LONG TITLE
9 General Description:
10 This bill amends the Corporate Franchise and Income Taxes chapter and the Individual
11 Income Tax Act to provide tax credits.
12 Highlighted Provisions:
13 This bill:
14 . defines terms;
15 . enacts corporate and individual nonrefundable tax credits for an energy efficient
16 new residence;
17 . enacts corporate and individual nonrefundable tax credits for energy efficient
18 retrofits;
19 . grants rulemaking authority to the Utah Geological Survey; and
20 . requires the Utah Tax Review Commission to study the tax credits.
21 Monies Appropriated in this Bill:
22 None
23 Other Special Clauses:
24 This bill coordinates with S.B. 31, Income Tax Amendments, to provide for
25 apportionment of tax credits.
26 Utah Code Sections Affected:
27 ENACTS:

28 59-7-614.2, Utah Code Annotated 1953
29 59-7-614.3, Utah Code Annotated 1953
30 59-10-1017, Utah Code Annotated 1953
31 59-10-1018, Utah Code Annotated 1953
32
33 Be it enacted by the Legislature of the state of Utah:
34 Section 1. Section 59-7-614.2 is enacted to read:
35 59-7-614.2. Nonrefundable tax credit for energy efficient new residence.
36 (1) As used in this section:
37 (a) "Contractor" means a taxpayer that is:
38 (i) a general building contractor as defined in Section 58-55-102 that, in accordance
39 with an agreement with a purchaser, constructs a new residence for the purchaser; or
40 (ii) a residential and small commercial contractor as defined in Section 58-55-102 that,
41 in accordance with an agreement with a purchaser, constructs a new residence for the
42 purchaser.
43 (b) "Purchaser" means a taxpayer that purchases a new residence from a contractor.
44 (c) "Residence" means a single or multiple family dwelling of up to four units.
45 (d) "Tier 1 energy efficiency rating" means that, as established by the Utah Geological
46 Survey, a new residence:
47 (i) is constructed to 30% or more, but less than 40% above current statewide standards
48 for energy conservation in envelope design, mechanical systems, and lighting systems, through:
49 (A) design methods;
50 (B) building methods;
51 (C) materials; and
52 (D) techniques; and
53 (ii) exceeds statewide energy efficiency standards by:
54 (A) complying with nationally recognized thermal bypass guidelines;
55 (B) having right-sized:
56 (I) cooling equipment; and
57 (II) heating equipment;
58 (C) receiving a certification of energy efficiency by a person, other than the Utah

59 Geological Survey, who is qualified to rate a new residence for energy efficiency as determined
60 by the Utah Geological Survey; and
61 (D) meeting standards established by the Utah Geological Survey for residential energy
62 use.
63 (e) "Tier 2 energy efficiency rating" means that, as established by the Utah Geological
64 Survey, a new residence:
65 (i) is constructed to 40% or more, but less than 50% above current statewide standards
66 for energy conservation in envelope design, mechanical systems, and lighting systems, through:
67 (A) design methods;
68 (B) building methods;
69 (C) materials; and
70 (D) techniques; and
71 (ii) exceeds statewide energy efficiency standards by:
72 (A) complying with nationally recognized thermal bypass guidelines;
73 (B) having right-sized:
74 (I) cooling equipment; and
75 (II) heating equipment;
76 (C) receiving a certification of energy efficiency by a person, other than the Utah
77 Geological Survey, who is qualified to rate a new residence for energy efficiency as determined
78 by the Utah Geological Survey; and
79 (D) meeting standards established by the Utah Geological Survey for residential energy
80 use.
81 (f) "Tier 3 energy efficiency rating" means that, as established by the Utah Geological
82 Survey, a new residence:
83 (i) is constructed to 50% or more above current statewide standards for energy
84 conservation in envelope design, mechanical systems, and lighting systems, through:
85 (A) design methods;
86 (B) building methods;
87 (C) materials; and
88 (D) techniques; and
89 (ii) exceeds statewide energy efficiency standards by:

90 (A) complying with nationally recognized thermal bypass guidelines;
91 (B) having right-sized:
92 (I) cooling equipment; and
93 (II) heating equipment;
94 (C) receiving a certification of energy efficiency by a person, other than the Utah
95 Geological Survey, who is qualified to rate a new residence for energy efficiency as determined
96 by the Utah Geological Survey; and
97 (D) meeting standards established by the Utah Geological Survey for residential energy
98 use.
99 (g) "Utah Geological Survey" means the Utah Geological Survey established in Section
100 63-73-5 .
101 (2) For taxable years beginning on or after January 1, 2009, a taxpayer may claim a
102 nonrefundable tax credit for the construction of an energy efficient new residence as provided
103 in this section.
104 (3) Subject to Subsection (4), the amount of the tax credit is:
105 (a) for a residence having a tier 1 energy efficiency rating:
106 (i) for the first 2,000 square feet of the residence, the product of:
107 (A) the number of square feet of the residence, not to exceed 2,000; and
108 (B) $.60; and
109 (ii) for square footage of the residence that is greater than 2,000 but does not exceed
110 3,000, the product of:
111 (A) the difference between:
112 (I) the number of square feet of the residence, not to exceed 3,000; and
113 (II) 2,000; and
114 (B) $.18;
115 (b) for a residence having a tier 2 energy efficiency rating:
116 (i) for the first 2,000 square feet of the residence, the product of:
117 (A) the number of square feet of the residence, not to exceed 2,000; and
118 (B) $.90; and
119 (ii) for square footage of the residence that is greater than 2,000 but does not exceed
120 3,000, the product of:

121 (A) the difference between:
122 (I) the number of square feet of the residence, not to exceed 3,000; and
123 (II) 2,000; and
124 (B) $.27; or
125 (c) for a residence having a tier 3 energy efficiency rating:
126 (i) for the first 2,000 square feet of the residence, the product of:
127 (A) the number of square feet of the residence, not to exceed 2,000; and
128 (B) $1.20; and
129 (ii) for square footage of the residence that is greater than 2,000 but does not exceed
130 3,000, the product of:
131 (A) the difference between:
132 (I) the number of square feet of the residence, not to exceed 3,000; and
133 (II) 2,000; and
134 (B) $.36.
135 (4) A taxpayer may not claim a tax credit under this section for the portion of square
136 footage of a residence that exceeds 3,000 square feet.
137 (5) A taxpayer may claim a tax credit under this section for the taxable year in which
138 the contractor completes construction of the residence if:
139 (a) the Utah Geological Survey certifies in writing that:
140 (i) the residence has a:
141 (A) tier 1 energy efficiency rating;
142 (B) tier 2 energy efficiency rating; or
143 (C) tier 3 energy efficiency rating; and
144 (ii) construction of the residence is complete; and
145 (b) the taxpayer is a:
146 (i) contractor; or
147 (ii) purchaser, if the contractor described in Subsection (5)(b)(i) assigns the tax credit
148 to the purchaser:
149 (A) in writing; and
150 (B) on a form provided by the Utah Geological Survey.
151 (6) A taxpayer may carry forward a tax credit under this section for a period that does

152 not exceed the next four taxable years if:
153 (a) the taxpayer is allowed to claim a tax credit under this section for the taxable year;
154 and
155 (b) the amount of the tax credit exceeds the taxpayer's tax liability under this chapter
156 for that taxable year.
157 (7) A tax credit under this section is in addition to any other tax credit allowed by this
158 chapter.
159 (8) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
160 Utah Geological Survey shall, on or before October 1, 2008:
161 (a) establish standards for determining whether a residence has a:
162 (i) tier 1 energy efficiency rating;
163 (ii) tier 2 energy efficiency rating; or
164 (iii) tier 3 energy efficiency rating;
165 (b) establish a certification process for determining whether a residence has a:
166 (i) tier 1 energy efficiency rating;
167 (ii) tier 2 energy efficiency rating; or
168 (iii) tier 3 energy efficiency rating;
169 (c) establish standards for a new residence to receive a certification of energy
170 efficiency by a person, other than the Utah Geological Survey, who is qualified to rate a new
171 residence for energy efficiency;
172 (d) make rules for determining when the construction of a residence is complete; and
173 (e) make rules for a contractor to assign a tax credit under this section to a purchaser.
174 (9) (a) On or before October 1, 2012, and every five years after October 1, 2012, the
175 Utah Tax Review Commission shall review the tax credit allowed by this section and make
176 recommendations to the Revenue and Taxation Interim Committee concerning whether the tax
177 credit should be continued, modified, or repealed.
178 (b) The Utah Tax Review Commission's report under Subsection (9)(a) shall include
179 information concerning the cost of the tax credit, the purpose and effectiveness of the tax
180 credit, and the state's benefit from the tax credit.
181 Section 2. Section 59-7-614.3 is enacted to read:
182 59-7-614.3. Nonrefundable tax credit for energy efficient retrofits.

183 (1) As used in this section:
184 (a) "Annual fuel utilization efficiency" means the ratio of heat output of a furnace or
185 boiler compared to the total energy consumed by the furnace or boiler.
186 (b) "Efficient natural gas boiler" means a natural gas boiler with an annual fuel
187 utilization efficiency rating of 85% or higher as determined by the Utah Geological Survey.
188 (c) "Efficient natural gas furnace" means a natural gas furnace with an annual fuel
189 utilization efficiency rating of 95% or higher as determined by the Utah Geological Survey.
190 (d) "Efficient tankless electric water heater" means a tankless electric water heater that
191 has an efficiency rating determined by the Utah Geological Survey.
192 (e) "Efficient tankless gas water heater" means a tankless gas water heater that has an
193 efficiency rating of .80 energy factor or higher as determined by the Utah Geological Survey.
194 (f) "Efficient window" means a window with an efficiency rating of .35 U-factor or
195 higher as determined by the Utah Geological Survey.
196 (g) "Eligible retrofit" means the installation of one or more of the following in an
197 existing residence:
198 (i) air sealing;
199 (ii) duct insulation;
200 (iii) duct sealing;
201 (iv) an efficient natural gas boiler;
202 (v) an efficient natural gas furnace;
203 (vi) insulation of:
204 (A) an attic;
205 (B) a floor; or
206 (C) a wall;
207 (vii) an energy efficient and water efficient premium whole-house evaporative cooling
208 system;
209 (viii) an efficient tankless:
210 (A) electric water heater; or
211 (B) gas water heater; or
212 (ix) an efficient window.
213 (h) "Energy factor" means a water heater's overall energy efficiency determined on the

214 basis of the amount of hot water produced per unit of fuel consumed over a typical day.
215 (i) "Purchaser" means a taxpayer that purchases the installation of an eligible retrofit.
216 (j) "Residence" means a single or multiple family dwelling of up to four units.
217 (k) "U-factor" means the rate of heat loss of a window.
218 (l) "Utah Geological Survey" means the Utah Geological Survey established in Section
219 63-73-5 .
220 (2) For taxable years beginning on or after January 1, 2009, a purchaser may claim a
221 nonrefundable tax credit for the installation of an eligible retrofit as provided in this section.
222 (3) Subject to Subsection (4), the amount of the tax credit is:
223 (a) for the installation of air sealing, the product of:
224 (i) the cost of the installation and materials; and
225 (ii) 20%;
226 (b) for the installation of duct insulation, the product of:
227 (i) the cost of the installation and materials, including the cost of the insulation; and
228 (ii) 20%;
229 (c) for the installation of duct sealing, the product of:
230 (i) the cost of the installation and materials; and
231 (ii) 20%;
232 (d) for the installation of an efficient natural gas boiler, the product of:
233 (i) the cost of the installation and materials, including the cost of the efficient natural
234 gas boiler; and
235 (ii) 20%;
236 (e) for the installation of an efficient natural gas furnace, the product of:
237 (i) the cost of the installation and materials, including the cost of the efficient natural
238 gas furnace; and
239 (ii) 20%;
240 (f) for the installation of insulation of an attic, a floor, or a wall, the product of:
241 (i) the cost of the installation and materials, including the cost of the insulation; and
242 (ii) 20%;
243 (g) for the installation of an energy efficient and water efficient premium whole-house
244 evaporative cooling system, the product of:

245 (i) the cost of the installation and materials, including the cost of the energy efficient
246 and water efficient premium whole-house evaporative cooling system; and
247 (ii) 20%;
248 (h) for an efficient tankless electric water heater or efficient tankless gas water heater,
249 the product of:
250 (i) the cost of the installation and materials, including the cost of the efficient tankless
251 electric water heater or efficient tankless gas water heater; and
252 (ii) 20%; or
253 (i) for the installation of an efficient window, the product of:
254 (i) the cost of the installation and materials, including the cost of the efficient window;
255 and
256 (ii) 20%.
257 (4) For a taxable year a tax credit may not exceed:
258 (a) for purposes of Subsection (3)(a), $225;
259 (b) for purposes of Subsection (3)(b), $75;
260 (c) for purposes of Subsection (3)(c), $100;
261 (d) for purposes of Subsection (3)(d), $150;
262 (e) for purposes of Subsection (3)(e), $150;
263 (f) for purposes of Subsection (3)(f), $250;
264 (g) for purposes of Subsection (3)(g), $250;
265 (h) for purposes of Subsection (3)(h), $150;
266 (i) for purposes of Subsection (3)(i), $100; or
267 (j) for purposes of this section, a total of $1,000.
268 (5) A purchaser may claim a tax credit under this section for the taxable year in which
269 the installation of the eligible retrofit is complete.
270 (6) A purchaser may carry forward a tax credit under this section for a period that does
271 not exceed the next four taxable years if:
272 (a) the purchaser is allowed to claim a tax credit under this section for the taxable year;
273 and
274 (b) the amount of the tax credit exceeds the purchaser's tax liability under this chapter
275 for that taxable year.

276 (7) A tax credit under this section is in addition to any other tax credit allowed by this
277 chapter.
278 (8) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
279 Utah Geological Survey shall, on or before October 1, 2008:
280 (a) make rules defining what constitutes the installation of:
281 (i) air sealing;
282 (ii) duct insulation;
283 (iii) duct sealing;
284 (iv) an efficient natural gas boiler;
285 (v) an efficient natural gas furnace;
286 (vi) insulation of:
287 (A) an attic;
288 (B) a floor; or
289 (C) a wall;
290 (vii) an energy efficient and water efficient premium whole-house evaporative cooling
291 system;
292 (viii) an efficient tankless:
293 (A) electric water heater; or
294 (B) gas water heater; or
295 (ix) an efficient window;
296 (b) establish standards for determining whether:
297 (i) an efficient natural gas boiler has an annual fuel utilization efficiency rating of 85%
298 or higher;
299 (ii) an efficient natural gas furnace has an annual fuel utilization efficiency rating of
300 95% or higher;
301 (iii) an efficient tankless gas water heater has an efficiency rating of .80 energy factor
302 or higher; or
303 (iv) an efficient window has an efficiency rating of .35 U-factor or higher;
304 (c) establish an efficiency rating for an efficient tankless electric water heater; and
305 (d) make rules for determining when the installation of an eligible retrofit is complete.
306 (9) (a) On or before October 1, 2012, and every five years after October 1, 2012, the

307 Utah Tax Review Commission shall review the tax credit allowed by this section and make
308 recommendations to the Revenue and Taxation Interim Committee concerning whether the tax
309 credit should be continued, modified, or repealed.
310 (b) The Utah Tax Review Commission's report under Subsection (9)(a) shall include
311 information concerning the cost of the tax credit, the purpose and effectiveness of the tax
312 credit, and the state's benefit from the tax credit.
313 Section 3. Section 59-10-1017 is enacted to read:
314 59-10-1017. Nonrefundable tax credit for energy efficient new residence.
315 (1) As used in this section:
316 (a) "Contractor" means a claimant, estate, or trust that is:
317 (i) a general building contractor as defined in Section 58-55-102 that, in accordance
318 with an agreement with a purchaser, constructs a new residence for the purchaser; or
319 (ii) a residential and small commercial contractor as defined in Section 58-55-102 that,
320 in accordance with an agreement with a purchaser, constructs a new residence for the
321 purchaser.
322 (b) "Purchaser" means a claimant, estate, or trust that purchases a new residence from a
323 contractor.
324 (c) "Residence" means a single or multiple family dwelling of up to four units.
325 (d) "Tier 1 energy efficiency rating" means that, as established by the Utah Geological
326 Survey, a new residence:
327 (i) is constructed to 30% or more, but less than 40% above current statewide standards
328 for energy conservation in envelope design, mechanical systems, and lighting systems, through:
329 (A) design methods;
330 (B) building methods;
331 (C) materials; and
332 (D) techniques; and
333 (ii) exceeds statewide energy efficiency standards by:
334 (A) complying with nationally recognized thermal bypass guidelines;
335 (B) having right-sized:
336 (I) cooling equipment; and
337 (II) heating equipment;

338 (C) receiving a certification of energy efficiency by a person, other than the Utah
339 Geological Survey, who is qualified to rate a new residence for energy efficiency as determined
340 by the Utah Geological Survey; and
341 (D) meeting standards established by the Utah Geological Survey for residential energy
342 use.
343 (e) "Tier 2 energy efficiency rating" means that, as established by the Utah Geological
344 Survey, a new residence:
345 (i) is constructed to 40% or more, but less than 50% above current statewide standards
346 for energy conservation in envelope design, mechanical systems, and lighting systems, through:
347 (A) design methods;
348 (B) building methods;
349 (C) materials; and
350 (D) techniques; and
351 (ii) exceeds statewide energy efficiency standards by:
352 (A) complying with nationally recognized thermal bypass guidelines;
353 (B) having right-sized:
354 (I) cooling equipment; and
355 (II) heating equipment;
356 (C) receiving a certification of energy efficiency by a person, other than the Utah
357 Geological Survey, who is qualified to rate a new residence for energy efficiency as determined
358 by the Utah Geological Survey; and
359 (D) meeting standards established by the Utah Geological Survey for residential energy
360 use.
361 (f) "Tier 3 energy efficiency rating" means that, as established by the Utah Geological
362 Survey, a new residence:
363 (i) is constructed to 50% or more above current statewide standards for energy
364 conservation in envelope design, mechanical systems, and lighting systems, through:
365 (A) design methods;
366 (B) building methods;
367 (C) materials; and
368 (D) techniques; and

369 (ii) exceeds statewide energy efficiency standards by:
370 (A) complying with nationally recognized thermal bypass guidelines;
371 (B) having right-sized:
372 (I) cooling equipment; and
373 (II) heating equipment;
374 (C) receiving a certification of energy efficiency by a person, other than the Utah
375 Geological Survey, who is qualified to rate a new residence for energy efficiency as determined
376 by the Utah Geological Survey; and
377 (D) meeting standards established by the Utah Geological Survey for residential energy
378 use.
379 (g) "Utah Geological Survey" means the Utah Geological Survey established in Section
380 63-73-5 .
381 (2) For taxable years beginning on or after January 1, 2009, a claimant, estate, or trust
382 may claim a nonrefundable tax credit for the construction of an energy efficient new residence
383 as provided in this section.
384 (3) Subject to Subsection (4), the amount of the tax credit is:
385 (a) for a residence having a tier 1 energy efficiency rating:
386 (i) for the first 2,000 square feet of the residence, the product of:
387 (A) the number of square feet of the residence, not to exceed 2,000; and
388 (B) $.60; and
389 (ii) for square footage of the residence that is greater than 2,000 but does not exceed
390 3,000, the product of:
391 (A) the difference between:
392 (I) the number of square feet of the residence, not to exceed 3,000; and
393 (II) 2,000; and
394 (B) $.18;
395 (b) for a residence having a tier 2 energy efficiency rating:
396 (i) for the first 2,000 square feet of the residence, the product of:
397 (A) the number of square feet of the residence, not to exceed 2,000; and
398 (B) $.90; and
399 (ii) for square footage of the residence that is greater than 2,000 but does not exceed

400 3,000, the product of:
401 (A) the difference between:
402 (I) the number of square feet of the residence, not to exceed 3,000; and
403 (II) 2,000; and
404 (B) $.27; or
405 (c) for a residence having a tier 3 energy efficiency rating:
406 (i) for the first 2,000 square feet of the residence, the product of:
407 (A) the number of square feet of the residence, not to exceed 2,000; and
408 (B) $1.20; and
409 (ii) for square footage of the residence that is greater than 2,000 but does not exceed
410 3,000, the product of:
411 (A) the difference between:
412 (I) the number of square feet of the residence, not to exceed 3,000; and
413 (II) 2,000; and
414 (B) $.36.
415 (4) A claimant, estate, or trust may not claim a tax credit under this section for the
416 portion of square footage of a residence that exceeds 3,000 square feet.
417 (5) A claimant, estate, or trust may claim a tax credit under this section for the taxable
418 year in which the contractor completes construction of the residence if:
419 (a) the Utah Geological Survey certifies in writing that:
420 (i) the residence has a:
421 (A) tier 1 energy efficiency rating;
422 (B) tier 2 energy efficiency rating; or
423 (C) tier 3 energy efficiency rating; and
424 (ii) construction of the residence is complete; and
425 (b) the claimant, estate, or trust is a:
426 (i) contractor; or
427 (ii) purchaser, if the contractor described in Subsection (5)(b)(i) assigns the tax credit
428 to the purchaser:
429 (A) in writing; and
430 (B) on a form provided by the Utah Geological Survey.

431 (6) A claimant, estate, or trust may carry forward a tax credit under this section for a
432 period that does not exceed the next four taxable years if:
433 (a) the claimant, estate, or trust is allowed to claim a tax credit under this section for
434 the taxable year; and
435 (b) the amount of the tax credit exceeds the claimant's, estate's, or trust's tax liability
436 under this chapter for that taxable year.
437 (7) A tax credit under this section is in addition to any other tax credit allowed by this
438 chapter.
439 (8) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
440 Utah Geological Survey shall, on or before October 1, 2008:
441 (a) establish standards for determining whether a residence has a:
442 (i) tier 1 energy efficiency rating;
443 (ii) tier 2 energy efficiency rating; or
444 (iii) tier 3 energy efficiency rating;
445 (b) establish a certification process for determining whether a residence has a:
446 (i) tier 1 energy efficiency rating;
447 (ii) tier 2 energy efficiency rating; or
448 (iii) tier 3 energy efficiency rating;
449 (c) establish standards for a new residence to receive a certification of energy
450 efficiency by a person, other than the Utah Geological Survey, who is qualified to rate a new
451 residence for energy efficiency;
452 (d) make rules for determining when the construction of a residence is complete; and
453 (e) make rules for a contractor to assign a tax credit under this section to a purchaser.
454 (9) (a) On or before October 1, 2012, and every five years after October 1, 2012, the
455 Utah Tax Review Commission shall review the tax credit allowed by this section and make
456 recommendations to the Revenue and Taxation Interim Committee concerning whether the tax
457 credit should be continued, modified, or repealed.
458 (b) The Utah Tax Review Commission's report under Subsection (9)(a) shall include
459 information concerning the cost of the tax credit, the purpose and effectiveness of the tax
460 credit, and the state's benefit from the tax credit.
461 Section 4. Section 59-10-1018 is enacted to read:

462 59-10-1018. Nonrefundable tax credit for energy efficient retrofits.
463 (1) As used in this section:
464 (a) "Annual fuel utilization efficiency" means the ratio of heat output of a furnace or
465 boiler compared to the total energy consumed by the furnace or boiler.
466 (b) "Efficient natural gas boiler" means a natural gas boiler with an annual fuel
467 utilization efficiency rating of 85% or higher as determined by the Utah Geological Survey.
468 (c) "Efficient natural gas furnace" means a natural gas furnace with an annual fuel
469 utilization efficiency rating of 95% or higher as determined by the Utah Geological Survey.
470 (d) "Efficient tankless electric water heater" means a tankless electric water heater that
471 has an efficiency rating determined by the Utah Geological Survey.
472 (e) "Efficient tankless gas water heater" means a tankless gas water heater that has an
473 efficiency rating of .80 energy factor or higher as determined by the Utah Geological Survey.
474 (f) "Efficient window" means a window with an efficiency rating of .35 U-factor or
475 higher as determined by the Utah Geological Survey.
476 (g) "Eligible retrofit" means the installation of one or more of the following in an
477 existing residence:
478 (i) air sealing;
479 (ii) duct insulation;
480 (iii) duct sealing;
481 (iv) an efficient natural gas boiler;
482 (v) an efficient natural gas furnace;
483 (vi) insulation of:
484 (A) an attic;
485 (B) a floor; or
486 (C) a wall;
487 (vii) an energy efficient and water efficient premium whole-house evaporative cooling
488 system;
489 (viii) an efficient tankless:
490 (A) electric water heater; or
491 (B) gas water heater; or
492 (ix) an efficient window.

493 (h) "Energy factor" means a water heater's overall energy efficiency determined on the
494 basis of the amount of hot water produced per unit of fuel consumed over a typical day.
495 (i) "Purchaser" means a claimant, estate, or trust that purchases the installation of an
496 eligible retrofit.
497 (j) "Residence" means a single or multiple family dwelling of up to four units.
498 (k) "U-factor" means the rate of heat loss of a window.
499 (l) "Utah Geological Survey" means the Utah Geological Survey established in Section
500 63-73-5 .
501 (2) For taxable years beginning on or after January 1, 2009, a purchaser may claim a
502 nonrefundable tax credit for the installation of an eligible retrofit as provided in this section.
503 (3) Subject to Subsection (4), the amount of the tax credit is:
504 (a) for the installation of air sealing, the product of:
505 (i) the cost of the installation and materials; and
506 (ii) 20%;
507 (b) for the installation of duct insulation, the product of:
508 (i) the cost of the installation and materials, including the cost of the insulation; and
509 (ii) 20%;
510 (c) for the installation of duct sealing, the product of:
511 (i) the cost of the installation and materials; and
512 (ii) 20%;
513 (d) for the installation of an efficient natural gas boiler, the product of:
514 (i) the cost of the installation and materials, including the cost of the efficient natural
515 gas boiler; and
516 (ii) 20%;
517 (e) for the installation of an efficient natural gas furnace, the product of:
518 (i) the cost of the installation and materials, including the cost of the efficient natural
519 gas furnace; and
520 (ii) 20%;
521 (f) for the installation of insulation of an attic, a floor, or a wall, the product of:
522 (i) the cost of the installation and materials, including the cost of the insulation; and
523 (ii) 20%;

524 (g) for the installation of an energy efficient and water efficient premium whole-house
525 evaporative cooling system, the product of:
526 (i) the cost of the installation and materials, including the cost of the energy efficient
527 and water efficient premium whole-house evaporative cooling system; and
528 (ii) 20%;
529 (h) for an efficient tankless electric water heater or efficient tankless gas water heater,
530 the product of:
531 (i) the cost of the installation and materials, including the cost of the efficient tankless
532 electric water heater or efficient tankless gas water heater; and
533 (ii) 20%; or
534 (i) for the installation of an efficient window, the product of:
535 (i) the cost of the installation and materials, including the cost of the efficient window;
536 and
537 (ii) 20%.
538 (4) For a taxable year a tax credit may not exceed:
539 (a) for purposes of Subsection (3)(a), $225;
540 (b) for purposes of Subsection (3)(b), $75;
541 (c) for purposes of Subsection (3)(c), $100;
542 (d) for purposes of Subsection (3)(d), $150;
543 (e) for purposes of Subsection (3)(e), $150;
544 (f) for purposes of Subsection (3)(f), $250;
545 (g) for purposes of Subsection (3)(g), $250;
546 (h) for purposes of Subsection (3)(h), $150;
547 (i) for purposes of Subsection (3)(i), $100; or
548 (j) for purposes of this section, a total of $1,000.
549 (5) A purchaser may claim a tax credit under this section for the taxable year in which
550 the installation of the eligible retrofit is complete.
551 (6) A purchaser may carry forward a tax credit under this section for a period that does
552 not exceed the next four taxable years if:
553 (a) the purchaser is allowed to claim a tax credit under this section for the taxable year;
554 and

555 (b) the amount of the tax credit exceeds the purchaser's tax liability under this chapter
556 for that taxable year.
557 (7) A tax credit under this section is in addition to any other tax credit allowed by this
558 chapter.
559 (8) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
560 Utah Geological Survey shall, on or before October 1, 2008:
561 (a) make rules defining what constitutes the installation of:
562 (i) air sealing;
563 (ii) duct insulation;
564 (iii) duct sealing;
565 (iv) an efficient natural gas boiler;
566 (v) an efficient natural gas furnace;
567 (vi) insulation of:
568 (A) an attic;
569 (B) a floor; or
570 (C) a wall;
571 (vii) an energy efficient and water efficient premium whole-house evaporative cooling
572 system;
573 (viii) an efficient tankless:
574 (A) electric water heater; or
575 (B) gas water heater; or
576 (ix) an efficient window;
577 (b) establish standards for determining whether:
578 (i) an efficient natural gas boiler has an annual fuel utilization efficiency rating of 85%
579 or higher;
580 (ii) an efficient natural gas furnace has an annual fuel utilization efficiency rating of
581 95% or higher;
582 (iii) an efficient tankless gas water heater has an efficiency rating of .80 energy factor
583 or higher; or
584 (iv) an efficient window has an efficiency rating of .35 U-factor or higher;
585 (c) establish an efficiency rating for an efficient tankless electric water heater; and

586 (d) make rules for determining when the installation of an eligible retrofit is complete.
587 (9) (a) On or before October 1, 2012, and every five years after October 1, 2012, the
588 Utah Tax Review Commission shall review the tax credit allowed by this section and make
589 recommendations to the Revenue and Taxation Interim Committee concerning whether the tax
590 credit should be continued, modified, or repealed.
591 (b) The Utah Tax Review Commission's report under Subsection (9)(a) shall include
592 information concerning the cost of the tax credit, the purpose and effectiveness of the tax
593 credit, and the state's benefit from the tax credit.
594 Section 5. Coordinating H.B. 199 with S.B. 31 -- Modifying substantive language.
595 If this H.B. 199 and S.B. 31, Income Tax Amendments, both pass, it is the intent of the
596 Legislature that the Office of Legislative Research and General Counsel, in preparing the Utah
597 Code database for publication, modify Section 59-10-1002.2 , which is renumbered and
598 amended in S.B. 31, so that citations to the statutory sections enacted in Sections 3 and 4 in this
599 H.B. 199 are included in the list of sections in:
600 (1) Subsection 59-10-1002.2 (1); and
601 (2) Subsection 59-10-1002.2 (2).




Legislative Review Note
as of 2-11-08 3:43 PM

Office of Legislative Research and General Counsel