1     
TAX CREDIT REVIEW AMENDMENTS

2     
2016 THIRD SPECIAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Jeremy A. Peterson

5     
Senate Sponsor: Curtis S. Bramble

6     

7     LONG TITLE
8     General Description:
9          This bill provides for a review of certain tax credits.
10     Highlighted Provisions:
11          This bill:
12          ▸     requires the Revenue and Taxation Interim Committee to review certain credits
13     related to individual income tax, corporate income tax, motor and special fuel tax,
14     taxation of admitted insurers, and economic development; and
15          ▸     establishes requirements for the review by the Revenue and Taxation Interim
16     Committee.
17     Money Appropriated in this Bill:
18          None
19     Other Special Clauses:
20          This bill provides a special effective date.
21     Utah Code Sections Affected:
22     AMENDS:
23          59-7-612, as last amended by Laws of Utah 2016, Chapter 135
24          59-7-614, as last amended by Laws of Utah 2015, Chapters 30, 133 and last amended
25     by Coordination Clause, Laws of Utah 2015, Chapter 133
26          59-7-614.2, as last amended by Laws of Utah 2016, Chapters 135 and 350
27          59-7-614.5, as last amended by Laws of Utah 2016, Chapter 135

28          59-7-614.7, as last amended by Laws of Utah 2016, Chapter 135
29          59-7-614.8, as last amended by Laws of Utah 2016, Chapter 135
30          59-7-614.10, as enacted by Laws of Utah 2016, Chapter 11
31          59-7-619, as enacted by Laws of Utah 2015, Chapter 356
32          59-9-107, as enacted by Laws of Utah 2014, Chapter 435
33          59-10-1012, as last amended by Laws of Utah 2016, Chapter 135
34          59-10-1013, as last amended by Laws of Utah 2016, Chapter 135
35          59-10-1014, as last amended by Laws of Utah 2015, Chapter 133
36          59-10-1024, as last amended by Laws of Utah 2011, Chapter 384
37          59-10-1025, as last amended by Laws of Utah 2016, Chapter 354
38          59-10-1029, as last amended by Laws of Utah 2016, Chapter 135
39          59-10-1030, as last amended by Laws of Utah 2016, Chapter 135
40          59-10-1034, as enacted by Laws of Utah 2015, Chapter 356
41          59-10-1037, as enacted by Laws of Utah 2016, Chapter 11
42          59-10-1106, as last amended by Laws of Utah 2015, Chapter 133
43          59-10-1107, as last amended by Laws of Utah 2016, Chapter 135
44          59-10-1108, as last amended by Laws of Utah 2016, Chapter 135
45          59-13-202, as last amended by Laws of Utah 2016, Chapter 375
46          63N-2-106, as last amended by Laws of Utah 2015, Chapter 344 and renumbered and
47     amended by Laws of Utah 2015, Chapter 283
48          63N-2-213, as last amended by Laws of Utah 2016, Chapter 11
49          63N-2-305, as renumbered and amended by Laws of Utah 2015, Chapter 283
50          63N-2-810, as last amended by Laws of Utah 2016, Chapters 135 and 354
51     ENACTS:
52          59-7-159, Utah Code Annotated 1953
53          59-10-137, Utah Code Annotated 1953
54     

55     Be it enacted by the Legislature of the state of Utah:
56          Section 1. Section 59-7-159 is enacted to read:
57          59-7-159. Review of credits allowed under this chapter.
58          (1) As used in this section, "committee" means the Revenue and Taxation Interim

59     Committee.
60          (2) (a) The committee shall review the tax credits described in this chapter as provided
61     in Subsection (3) and make recommendations concerning whether the tax credits should be
62     continued, modified, or repealed.
63          (b) In conducting the review required under Subsection (2)(a), the committee shall:
64          (i) schedule time on at least one committee agenda to conduct the review;
65          (ii) invite state agencies, individuals, and organizations concerned with the tax credit
66     under review to provide testimony;
67          (iii) (A) invite the Governor's Office of Economic Development to present a summary
68     and analysis of the information for each tax credit regarding which the Governor's Office of
69     Economic Development is required to make a report under this chapter; and
70          (B) invite the Office of the Legislative Fiscal Analyst to present a summary and
71     analysis of the information for each tax credit regarding which the Office of the Legislative
72     Fiscal Analyst is required to make a report under this chapter;
73          (iv) ensure that the committee's recommendations described in this section include an
74     evaluation of:
75          (A) the cost of the tax credit to the state;
76          (B) the purpose and effectiveness of the tax credit; and
77          (C) the extent to which the state benefits from the tax credit; and
78          (v) undertake other review efforts as determined by the committee chairs or as
79     otherwise required by law.
80          (3) (a) On or before November 30, 2017, and every three years after 2017, the
81     committee shall conduct the review required under Subsection (2) of the tax credits allowed
82     under the following sections:
83          (i) Section 59-7-601;
84          (ii) Section 59-7-607;
85          (iii) Section 59-7-612;
86          (iv) Section 59-7-614.1; and
87          (v) Section 59-7-614.5.
88          (b) On or before November 30, 2018, and every three years after 2018, the committee
89     shall conduct the review required under Subsection (2) of the tax credits allowed under the

90     following sections:
91          (i) Section 59-7-609;
92          (ii) Section 59-7-614.2;
93          (iii) Section 59-7-614.10;
94          (iv) Section 59-7-617;
95          (v) Section 59-7-619; and
96          (vi) Section 59-7-620.
97          (c) On or before November 30, 2019, and every three years after 2019, the committee
98     shall conduct the review required under Subsection (2) of the tax credits allowed under the
99     following sections:
100          (i) Section 59-7-605;
101          (ii) Section 59-7-610;
102          (iii) Section 59-7-614;
103          (iv) Section 59-7-614.7;
104          (v) Section 59-7-614.8; and
105          (vi) Section 59-7-618.
106          (d) (i) In addition to the reviews described in this Subsection (3), the committee shall
107     conduct a review of a tax credit described in this chapter that is enacted on or after January 1,
108     2017.
109          (ii) The committee shall complete a review described in this Subsection (3)(d) three
110     years after the effective date of the tax credit and every three years after the initial review date.
111          Section 2. Section 59-7-612 is amended to read:
112          59-7-612. Tax credits for research activities conducted in the state -- Carry
113     forward -- Commission to report modification or repeal of certain federal provisions --
114     Revenue and Taxation Interim Committee study.
115          (1) (a) A taxpayer meeting the requirements of this section may claim the following
116     nonrefundable tax credits:
117          (i) a research tax credit of 5% of the taxpayer's qualified research expenses for the
118     current taxable year that exceed the base amount provided for under Subsection (4);
119          (ii) a tax credit for a payment to a qualified organization for basic research as provided
120     in Section 41(e), Internal Revenue Code, of 5% for the current taxable year that exceed the

121     base amount provided for under Subsection (4); and
122          (iii) a tax credit equal to 7.5% of the taxpayer's qualified research expenses for the
123     current taxable year.
124          (b) Subject to Subsection (5), a taxpayer may claim a tax credit under:
125          (i) Subsection (1)(a)(i) or (1)(a)(iii), for the taxable year for which the taxpayer incurs
126     the qualified research expenses; or
127          (ii) Subsection (1)(a)(ii), for the taxable year for which the taxpayer makes the payment
128     to the qualified organization.
129          (c) The tax credits provided for in this section do not include the alternative
130     incremental credit provided for in Section 41(c)(4), Internal Revenue Code.
131          (2) For purposes of claiming a tax credit under this section, a unitary group as defined
132     in Section 59-7-101 is considered to be one taxpayer.
133          (3) Except as specifically provided for in this section:
134          (a) the tax credits authorized under Subsection (1) shall be calculated as provided in
135     Section 41, Internal Revenue Code; and
136          (b) the definitions provided in Section 41, Internal Revenue Code, apply in calculating
137     the tax credits authorized under Subsection (1).
138          (4) For purposes of this section:
139          (a) the base amount shall be calculated as provided in Sections 41(c) and 41(h),
140     Internal Revenue Code, except that:
141          (i) the base amount does not include the calculation of the alternative incremental
142     credit provided for in Section 41(c)(4), Internal Revenue Code;
143          (ii) a taxpayer's gross receipts include only those gross receipts attributable to sources
144     within this state as provided in Part 3, Allocation and Apportionment of Income - Utah
145     UDITPA Provisions; and
146          (iii) notwithstanding Section 41(c), Internal Revenue Code, for purposes of calculating
147     the base amount, a taxpayer:
148          (A) may elect to be treated as a start-up company as provided in Section 41(c)(3)(B)
149     regardless of whether the taxpayer meets the requirements of Section 41(c)(3)(B)(i)(I) or (II);
150     and
151          (B) may not revoke an election to be treated as a start-up company under Subsection

152     (4)(a)(iii)(A);
153          (b) "basic research" is as defined in Section 41(e)(7), Internal Revenue Code, except
154     that the term includes only basic research conducted in this state;
155          (c) "qualified research" is as defined in Section 41(d), Internal Revenue Code, except
156     that the term includes only qualified research conducted in this state;
157          (d) "qualified research expenses" is as defined and calculated in Section 41(b), Internal
158     Revenue Code, except that the term includes only:
159          (i) in-house research expenses incurred in this state; and
160          (ii) contract research expenses incurred in this state; and
161          (e) a tax credit provided for in this section is not terminated if a credit terminates under
162     Section 41, Internal Revenue Code.
163          (5) (a) If the amount of a tax credit claimed by a taxpayer under Subsection (1)(a)(i) or
164     (ii) exceeds the taxpayer's tax liability under this chapter for a taxable year, the amount of the
165     tax credit exceeding the tax liability:
166          (i) may be carried forward for a period that does not exceed the next 14 taxable years;
167     and
168          (ii) may not be carried back to a taxable year preceding the current taxable year.
169          (b) A taxpayer may not carry forward the tax credit allowed by Subsection (1)(a)(iii).
170          (6) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
171     commission may make rules for purposes of this section prescribing a certification process for
172     qualified organizations to ensure that amounts paid to the qualified organizations are for basic
173     research conducted in this state.
174          (7) If a provision of Section 41, Internal Revenue Code, is modified or repealed, the
175     commission shall provide an electronic report of the modification or repeal to the Revenue and
176     Taxation Interim Committee within 60 days after the day on which the modification or repeal
177     becomes effective.
178          (8) (a) The Revenue and Taxation Interim Committee shall review the tax credits
179     provided for in this section on or before October 1 of the year after the year in which the
180     commission reports under Subsection (7) a modification or repeal of a provision of Section 41,
181     Internal Revenue Code.
182          (b) The review described in Subsection (8)(a) is in addition to the review required by

183     Section 59-7-159.
184          [(b)] (c) Notwithstanding Subsection (8)(a), the Revenue and Taxation Interim
185     Committee is not required to review the tax credits provided for in this section if the only
186     modification to a provision of Section 41, Internal Revenue Code, is the extension of the
187     termination date provided for in Section 41(h), Internal Revenue Code.
188          [(c)] (d) The Revenue and Taxation Interim Committee shall address in a review under
189     this section:
190          (i) the cost of the tax credits provided for in this section;
191          (ii) the purpose and effectiveness of the tax credits provided for in this section;
192          (iii) whether the tax credits provided for in this section benefit the state; and
193          (iv) whether the tax credits provided for in this section should be:
194          (A) continued;
195          (B) modified; or
196          (C) repealed.
197          [(d)] (e) If the Revenue and Taxation Interim Committee reviews the tax credits
198     provided for in this section, the committee shall issue a report [its findings to the Legislative
199     Management Committee on or before the November interim meeting of the year in which the
200     Revenue and Taxation Interim Committee reviews the tax credits] of the Revenue and Taxation
201     Interim Committee's findings.
202          Section 3. Section 59-7-614 is amended to read:
203          59-7-614. Renewable energy systems tax credits -- Definitions -- Certification --
204     Rulemaking authority.
205          (1) As used in this section:
206          (a) (i) "Active solar system" means a system of equipment that is capable of:
207          (A) collecting and converting incident solar radiation into thermal, mechanical, or
208     electrical energy; and
209          (B) transferring a form of energy described in Subsection (1)(a)(i)(A) by a separate
210     apparatus to storage or to the point of use.
211          (ii) "Active solar system" includes water heating, space heating or cooling, and
212     electrical or mechanical energy generation.
213          (b) "Biomass system" means a system of apparatus and equipment for use in:

214          (i) converting material into biomass energy, as defined in Section 59-12-102; and
215          (ii) transporting the biomass energy by separate apparatus to the point of use or storage.
216          (c) "Commercial energy system" means a system that is:
217          (i) (A) an active solar system;
218          (B) a biomass system;
219          (C) a direct use geothermal system;
220          (D) a geothermal electricity system;
221          (E) a geothermal heat pump system;
222          (F) a hydroenergy system;
223          (G) a passive solar system; or
224          (H) a wind system;
225          (ii) located in the state; and
226          (iii) used:
227          (A) to supply energy to a commercial unit; or
228          (B) as a commercial enterprise.
229          (d) "Commercial enterprise" means an entity, the purpose of which is to produce
230     electrical, mechanical, or thermal energy for sale from a commercial energy system.
231          (e) (i) "Commercial unit" means a building or structure that an entity uses to transact
232     business.
233          (ii) Notwithstanding Subsection (1)(e)(i):
234          (A) with respect to an active solar system used for agricultural water pumping or a wind
235     system, each individual energy generating device is considered to be a commercial unit; or
236          (B) if an energy system is the building or structure that an entity uses to transact
237     business, a commercial unit is the complete energy system itself.
238          (f) "Direct use geothermal system" means a system of apparatus and equipment that
239     enables the direct use of geothermal energy to meet energy needs, including heating a building,
240     an industrial process, and aquaculture.
241          (g) "Geothermal electricity" means energy that is:
242          (i) contained in heat that continuously flows outward from the earth; and
243          (ii) used as a sole source of energy to produce electricity.
244          (h) "Geothermal energy" means energy generated by heat that is contained in the earth.

245          (i) "Geothermal heat pump system" means a system of apparatus and equipment that:
246          (i) enables the use of thermal properties contained in the earth at temperatures well
247     below 100 degrees Fahrenheit; and
248          (ii) helps meet heating and cooling needs of a structure.
249          (j) "Hydroenergy system" means a system of apparatus and equipment that is capable
250     of:
251          (i) intercepting and converting kinetic water energy into electrical or mechanical
252     energy; and
253          (ii) transferring this form of energy by separate apparatus to the point of use or storage.
254          (k) "Office" means the Office of Energy Development created in Section 63M-4-401.
255          (l) (i) "Passive solar system" means a direct thermal system that utilizes the structure of
256     a building and its operable components to provide for collection, storage, and distribution of
257     heating or cooling during the appropriate times of the year by utilizing the climate resources
258     available at the site.
259          (ii) "Passive solar system" includes those portions and components of a building that
260     are expressly designed and required for the collection, storage, and distribution of solar energy.
261          (m) (i) "Principal recovery portion" means the portion of a lease payment that
262     constitutes the cost a person incurs in acquiring a commercial energy system.
263          (ii) "Principal recovery portion" does not include:
264          (A) an interest charge; or
265          (B) a maintenance expense.
266          (n) "Residential energy system" means the following used to supply energy to or for a
267     residential unit:
268          (i) an active solar system;
269          (ii) a biomass system;
270          (iii) a direct use geothermal system;
271          (iv) a geothermal heat pump system;
272          (v) a hydroenergy system;
273          (vi) a passive solar system; or
274          (vii) a wind system.
275          (o) (i) "Residential unit" means a house, condominium, apartment, or similar dwelling

276     unit that:
277          (A) is located in the state; and
278          (B) serves as a dwelling for a person, group of persons, or a family.
279          (ii) "Residential unit" does not include property subject to a fee under:
280          (A) Section 59-2-404;
281          (B) Section 59-2-405;
282          (C) Section 59-2-405.1;
283          (D) Section 59-2-405.2; or
284          (E) Section 59-2-405.3.
285          (p) "Wind system" means a system of apparatus and equipment that is capable of:
286          (i) intercepting and converting wind energy into mechanical or electrical energy; and
287          (ii) transferring these forms of energy by a separate apparatus to the point of use, sale,
288     or storage.
289          (2) A taxpayer may claim an energy system tax credit as provided in this section
290     against a tax due under this chapter for a taxable year.
291          (3) (a) Subject to the other provisions of this Subsection (3), a taxpayer may claim a
292     nonrefundable tax credit under this Subsection (3) with respect to a residential unit the taxpayer
293     owns or uses if:
294          (i) the taxpayer:
295          (A) purchases and completes a residential energy system to supply all or part of the
296     energy required for the residential unit; or
297          (B) participates in the financing of a residential energy system to supply all or part of
298     the energy required for the residential unit;
299          (ii) the residential energy system is completed and placed in service on or after January
300     1, 2007; and
301          (iii) the taxpayer obtains a written certification from the office in accordance with
302     Subsection (7).
303          (b) (i) Subject to Subsections (3)(b)(ii) through (v), the tax credit is equal to 25% of the
304     reasonable costs of each residential energy system installed with respect to each residential unit
305     the taxpayer owns or uses.
306          (ii) A tax credit under this Subsection (3) may include installation costs.

307          (iii) A taxpayer may claim a tax credit under this Subsection (3) for the taxable year in
308     which the residential energy system is completed and placed in service.
309          (iv) If the amount of a tax credit under this Subsection (3) exceeds a taxpayer's tax
310     liability under this chapter for a taxable year, the amount of the tax credit exceeding the
311     liability may be carried forward for a period that does not exceed the next four taxable years.
312          (v) The total amount of tax credit a taxpayer may claim under this Subsection (3) may
313     not exceed $2,000 per residential unit.
314          (c) If a taxpayer sells a residential unit to another person before the taxpayer claims the
315     tax credit under this Subsection (3):
316          (i) the taxpayer may assign the tax credit to the other person; and
317          (ii) (A) if the other person files a return under this chapter, the other person may claim
318     the tax credit under this section as if the other person had met the requirements of this section
319     to claim the tax credit; or
320          (B) if the other person files a return under Chapter 10, Individual Income Tax Act, the
321     other person may claim the tax credit under Section 59-10-1014 as if the other person had met
322     the requirements of Section 59-10-1014 to claim the tax credit.
323          (4) (a) Subject to the other provisions of this Subsection (4), a taxpayer may claim a
324     refundable tax credit under this Subsection (4) with respect to a commercial energy system if:
325          (i) the commercial energy system does not use:
326          (A) wind, geothermal electricity, solar, or biomass equipment capable of producing a
327     total of 660 or more kilowatts of electricity; or
328          (B) solar equipment capable of producing 2,000 or more kilowatts of electricity;
329          (ii) the taxpayer purchases or participates in the financing of the commercial energy
330     system;
331          (iii) (A) the commercial energy system supplies all or part of the energy required by
332     commercial units owned or used by the taxpayer; or
333          (B) the taxpayer sells all or part of the energy produced by the commercial energy
334     system as a commercial enterprise;
335          (iv) the commercial energy system is completed and placed in service on or after
336     January 1, 2007; and
337          (v) the taxpayer obtains a written certification from the office in accordance with

338     Subsection (7).
339          (b) (i) Subject to Subsections (4)(b)(ii) through (v), the tax credit is equal to 10% of the
340     reasonable costs of the commercial energy system.
341          (ii) A tax credit under this Subsection (4) may include installation costs.
342          (iii) A taxpayer may claim a tax credit under this Subsection (4) for the taxable year in
343     which the commercial energy system is completed and placed in service.
344          (iv) A tax credit under this Subsection (4) may not be carried forward or carried back.
345          (v) The total amount of tax credit a taxpayer may claim under this Subsection (4) may
346     not exceed $50,000 per commercial unit.
347          (c) (i) Subject to Subsections (4)(c)(ii) and (iii), a taxpayer that is a lessee of a
348     commercial energy system installed on a commercial unit may claim a tax credit under this
349     Subsection (4) if the taxpayer confirms that the lessor irrevocably elects not to claim the tax
350     credit.
351          (ii) A taxpayer described in Subsection (4)(c)(i) may claim as a tax credit under this
352     Subsection (4) only the principal recovery portion of the lease payments.
353          (iii) A taxpayer described in Subsection (4)(c)(i) may claim a tax credit under this
354     Subsection (4) for a period that does not exceed seven taxable years after the date the lease
355     begins, as stated in the lease agreement.
356          (5) (a) Subject to the other provisions of this Subsection (5), a taxpayer may claim a
357     refundable tax credit under this Subsection (5) with respect to a commercial energy system if:
358          (i) the commercial energy system uses wind, geothermal electricity, or biomass
359     equipment capable of producing a total of 660 or more kilowatts of electricity;
360          (ii) (A) the commercial energy system supplies all or part of the energy required by
361     commercial units owned or used by the taxpayer; or
362          (B) the taxpayer sells all or part of the energy produced by the commercial energy
363     system as a commercial enterprise;
364          (iii) the commercial energy system is completed and placed in service on or after
365     January 1, 2007; and
366          (iv) the taxpayer obtains a written certification from the office in accordance with
367     Subsection (7).
368          (b) (i) Subject to Subsections (5)(b)(ii) and (iii), a tax credit under this Subsection (5)

369     is equal to the product of:
370          (A) 0.35 cents; and
371          (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
372          (ii) A tax credit under this Subsection (5) may be claimed for production occurring
373     during a period of 48 months beginning with the month in which the commercial energy
374     system is placed in commercial service.
375          (iii) A tax credit under this Subsection (5) may not be carried forward or carried back.
376          (c) A taxpayer that is a lessee of a commercial energy system installed on a commercial
377     unit may claim a tax credit under this Subsection (5) if the taxpayer confirms that the lessor
378     irrevocably elects not to claim the tax credit.
379          (6) (a) Subject to the other provisions of this Subsection (6), a taxpayer may claim a
380     refundable tax credit as provided in this Subsection (6) if:
381          (i) the taxpayer owns a commercial energy system that uses solar equipment capable of
382     producing a total of 660 or more kilowatts of electricity;
383          (ii) (A) the commercial energy system supplies all or part of the energy required by
384     commercial units owned or used by the taxpayer; or
385          (B) the taxpayer sells all or part of the energy produced by the commercial energy
386     system as a commercial enterprise;
387          (iii) the taxpayer does not claim a tax credit under Subsection (4);
388          (iv) the commercial energy system is completed and placed in service on or after
389     January 1, 2015; and
390          (v) the taxpayer obtains a written certification from the office in accordance with
391     Subsection (7).
392          (b) (i) Subject to Subsections (6)(b)(ii) and (iii), a tax credit under this Subsection (6)
393     is equal to the product of:
394          (A) 0.35 cents; and
395          (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
396          (ii) A tax credit under this Subsection (6) may be claimed for production occurring
397     during a period of 48 months beginning with the month in which the commercial energy
398     system is placed in commercial service.
399          (iii) A tax credit under this Subsection (6) may not be carried forward or carried back.

400          (c) A taxpayer that is a lessee of a commercial energy system installed on a commercial
401     unit may claim a tax credit under this Subsection (6) if the taxpayer confirms that the lessor
402     irrevocably elects not to claim the tax credit.
403          (7) (a) Before a taxpayer may claim a tax credit under this section, the taxpayer shall
404     obtain a written certification from the office.
405          (b) The office shall issue a taxpayer a written certification if the office determines that:
406          (i) the taxpayer meets the requirements of this section to receive a tax credit; and
407          (ii) the residential energy system or commercial energy system with respect to which
408     the taxpayer seeks to claim a tax credit:
409          (A) has been completely installed;
410          (B) is a viable system for saving or producing energy from renewable resources; and
411          (C) is safe, reliable, efficient, and technically feasible to ensure that the residential
412     energy system or commercial energy system uses the state's renewable and nonrenewable
413     energy resources in an appropriate and economic manner.
414          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
415     office may make rules:
416          (i) for determining whether a residential energy system or commercial energy system
417     meets the requirements of Subsection (7)(b)(ii); and
418          (ii) for purposes of a tax credit under Subsection (3) or (4), establishing the reasonable
419     costs of a residential energy system or a commercial energy system, as an amount per unit of
420     energy production.
421          (d) A taxpayer that obtains a written certification from the office shall retain the
422     certification for the same time period a person is required to keep books and records under
423     Section 59-1-1406.
424          (8) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
425     commission may make rules to address the certification of a tax credit under this section.
426          (9) A tax credit under this section is in addition to any tax credits provided under the
427     laws or rules and regulations of the United States.
428          [(10) (a) On or before October 1, 2017, and every five years after 2017, the Revenue
429     and Taxation Interim Committee shall review each tax credit provided by this section and
430     report its recommendations to the Legislative Management Committee concerning whether the

431     tax credit should be continued, modified, or repealed.]
432          [(b) The Revenue and Taxation Interim Committee's report under Subsection (10)(a)
433     shall include information concerning the cost of the tax credit, the purpose and effectiveness of
434     the tax credit, and the state's benefit from the tax credit.]
435          Section 4. Section 59-7-614.2 is amended to read:
436          59-7-614.2. Refundable economic development tax credit.
437          (1) As used in this section:
438          (a) "Business entity" means a taxpayer that meets the definition of "business entity" as
439     defined in Section 63N-2-103.
440          (b) "Community reinvestment agency" means the same as that term is defined in
441     Section 17C-1-102.
442          (c) "Local government entity" means the same as that term is defined in Section
443     63N-2-103.
444          (d) "New incremental jobs" means the same as that term is defined in Section
445     63N-2-103.
446          (e) "New state revenues" means the same as that term is defined in Section 63N-2-103.
447          (f) "Office" means the Governor's Office of Economic Development.
448          (2) Subject to the other provisions of this section, a business entity, local government
449     entity, or community reinvestment agency may claim a refundable tax credit for economic
450     development.
451          (3) The tax credit under this section is the amount listed as the tax credit amount on the
452     tax credit certificate that the office issues to the business entity, local government entity, or
453     community reinvestment agency for the taxable year.
454          (4) A community reinvestment agency may claim a tax credit under this section only if
455     a local government entity assigns the tax credit to the community reinvestment agency in
456     accordance with Section 63N-2-104.
457          (5) (a) In accordance with any rules prescribed by the commission under Subsection
458     (5)(b), the commission shall make a refund to the following that claim a tax credit under this
459     section:
460          (i) a local government entity;
461          (ii) a community reinvestment agency; or

462          (iii) a business entity if the amount of the tax credit exceeds the business entity's tax
463     liability for a taxable year.
464          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
465     commission may make rules providing procedures for making a refund to a business entity,
466     local government entity, or community reinvestment agency as required by Subsection (5)(a).
467          (6) (a) [On or before October 1, 2013, and every five years after October 1, 2013] In
468     accordance with Section 59-7-159, the Revenue and Taxation Interim Committee shall study
469     the tax credit allowed by this section and make recommendations [to the Legislative
470     Management Committee] concerning whether the tax credit should be continued, modified, or
471     repealed.
472          (b) [For] Except as provided in Subsection (6)(c), for purposes of the study required by
473     this Subsection (6), the office shall provide the following information, if available to the office,
474     to the Revenue and Taxation Interim Committee by electronic means:
475          (i) the amount of tax credit that the office grants to each business entity, local
476     government entity, or community reinvestment agency for each calendar year;
477          (ii) the criteria that the office uses in granting a tax credit;
478          (iii) (A) for a business entity, the new state revenues generated by the business entity
479     for the calendar year; or
480          (B) for a local government entity, regardless of whether the local government entity
481     assigns the tax credit in accordance with Section 63N-2-104, the new state revenues generated
482     as a result of a new commercial project within the local government entity for each calendar
483     year;
484          (iv) estimates for each of the next [five] three calendar years of the following:
485          (A) the amount of tax credits that the office will grant;
486          (B) the amount of new state revenues that will be generated; and
487          (C) the number of new incremental jobs within the state that will be generated;
488          (v) the information contained in the office's latest report [to the Legislature] under
489     Section 63N-2-106; and
490          (vi) any other information that the Revenue and Taxation Interim Committee requests.
491          (c) (i) In providing the information described in Subsection (6)(b), the office shall
492     redact information that identifies a recipient of a tax credit under this section.

493          (ii) If, notwithstanding the redactions made under Subsection (6)(c)(i), reporting the
494     information described in Subsection (6)(b) might disclose the identity of a recipient of a tax
495     credit, the office may file a request with the Revenue and Taxation Interim Committee to
496     provide the information described in Subsection (6)(b) in the aggregate for all entities and
497     agencies that receive the tax credit under this section.
498          [(c)] (d) The Revenue and Taxation Interim Committee shall ensure that [its] the
499     recommendations [under] described in Subsection (6)(a) include an evaluation of:
500          (i) the cost of the tax credit to the state;
501          (ii) the purpose and effectiveness of the tax credit; and
502          (iii) the extent to which the state benefits from the tax credit.
503          Section 5. Section 59-7-614.5 is amended to read:
504          59-7-614.5. Refundable motion picture tax credit.
505          (1) As used in this section:
506          (a) "Motion picture company" means a taxpayer that meets the definition of a motion
507     picture company under Section 63N-8-102.
508          (b) "Office" means the Governor's Office of Economic Development created in Section
509     63N-1-201.
510          (c) "State-approved production" [has the same meaning as] means the same as that
511     term is defined in Section 63N-8-102.
512          (2) For a taxable [years] year beginning on or after January 1, 2009, a motion picture
513     company may claim a refundable tax credit for a state-approved production.
514          (3) The tax credit under this section is the amount listed as the tax credit amount on the
515     tax credit certificate that the office issues to a motion picture company under Section
516     63N-8-103 for the taxable year.
517          (4) (a) In accordance with any rules prescribed by the commission under Subsection
518     (4)(b), the commission shall make a refund to a motion picture company that claims a tax
519     credit under this section if the amount of the tax credit exceeds the motion picture company's
520     tax liability for a taxable year.
521          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
522     commission may make rules providing procedures for making a refund to a motion picture
523     company as required by Subsection (4)(a).

524          (5) (a) [On or before October 1, 2014, and every five years after October 1, 2014] In
525     accordance with Section 59-7-159, the Revenue and Taxation Interim Committee shall study
526     the tax credit allowed by this section and make recommendations [to the Legislative
527     Management Committee] concerning whether the tax credit should be continued, modified, or
528     repealed.
529          (b) [For] (i) Except as provided in Subsection (5)(b)(ii), for purposes of the study
530     required by this Subsection (5), the office shall provide the following information [to the
531     Revenue and Taxation Interim Committee], if available to the office, to the Office of the
532     Legislative Fiscal Analyst by electronic means:
533          [(i)] (A) the amount of tax credit that the office grants to each motion picture company
534     for each calendar year; [and]
535          (B) estimates of the amount of tax credit that the office will grant for each of the next
536     [five] three calendar years;
537          [(ii)] (C) the criteria that the office uses in granting the tax credit;
538          [(iii)] (D) the dollars left in the state, as defined in Section 63N-8-102, by each motion
539     picture company for each calendar year;
540          [(iv)] (E) the information contained in the office's latest report [to the Legislature]
541     under Section 63N-8-105; and
542          [(v)] (F) any other information [requested by] that the [Revenue and Taxation Interim
543     Committee] Office of the Legislative Fiscal Analyst requests.
544          (ii) (A) In providing the information described in Subsection (5)(b)(i), the office shall
545     redact information that identifies a recipient of a tax credit under this section.
546          (B) If, notwithstanding the redactions made under Subsection (5)(b)(ii)(A), reporting
547     the information described in Subsection (5)(b)(i) might disclose the identity of a recipient of a
548     tax credit, the office may file a request with the Revenue and Taxation Interim Committee to
549     provide the information described in Subsection (5)(b)(i) in the aggregate for all motion picture
550     companies that receive the tax credit under this section.
551          (c) As part of the study required by this Subsection (5), the Office of the Legislative
552     Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
553     analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
554     office under Subsection (5)(b).

555          [(c)] (d) The Revenue and Taxation Interim Committee shall ensure that [its] the
556     recommendations [under] described in Subsection (5)(a) include an evaluation of:
557          (i) the cost of the tax credit to the state;
558          (ii) the effectiveness of the tax credit; and
559          (iii) the extent to which the state benefits from the tax credit.
560          Section 6. Section 59-7-614.7 is amended to read:
561          59-7-614.7. Nonrefundable alternative energy development tax credit.
562          (1) As used in this section:
563          (a) "Alternative energy entity" [is as] means the same as that term is defined in Section
564     63M-4-502.
565          (b) "Alternative energy project" [is as] means the same as that term is defined in
566     Section 63M-4-502.
567          (c) "Office" [is as defined] means the Office of Energy Development created in Section
568     63M-4-401.
569          (2) Subject to the other provisions of this section, an alternative energy entity may
570     claim a nonrefundable tax credit for alternative energy development as provided in this section.
571          (3) The tax credit under this section is the amount listed as the tax credit amount on a
572     tax credit certificate that the office issues under Title 63M, Chapter 4, Part 5, Alternative
573     Energy Development Tax Credit Act, to the alternative energy entity for the taxable year.
574          (4) An alternative energy entity may carry forward a tax credit under this section for a
575     period that does not exceed the next seven taxable years if:
576          (a) the alternative energy entity is allowed to claim a tax credit under this section for a
577     taxable year; and
578          (b) the amount of the tax credit exceeds the alternative energy entity's tax liability
579     under this chapter for that taxable year.
580          (5) (a) [On or before October 1, 2017, and every five years after October 1, 2017] In
581     accordance with Section 59-7-159, the Revenue and Taxation Interim Committee shall study
582     the tax credit allowed by this section and make recommendations [to the Legislative
583     Management Committee] concerning whether the tax credit should be continued, modified, or
584     repealed.
585          (b) [For] (i) Except as provided in Subsection (5)(b)(ii), for purposes of the study

586     required by this Subsection (5), the office shall provide the following information, if available
587     to the office, to the [Revenue and Taxation Interim Committee] Office of the Legislative Fiscal
588     Analyst by electronic means:
589          [(i)] (A) the amount of tax credit that the office grants to each alternative energy entity
590     for each taxable year;
591          [(ii)] (B) the new state revenues generated by each alternative energy project;
592          [(iii)] (C) the information contained in the office's latest report [to the Legislature]
593     under Section 63M-4-505; and
594          [(iv)] (D) any other information that the [Revenue and Taxation Interim Committee]
595     Office of the Legislative Fiscal Analyst requests.
596          (ii) (A) In providing the information described in Subsection (5)(b)(i), the office shall
597     redact information that identifies a recipient of a tax credit under this section.
598          (B) If, notwithstanding the redactions made under Subsection (5)(b)(ii)(A), reporting
599     the information described in Subsection (5)(b)(i) might disclose the identity of a recipient of a
600     tax credit, the office may file a request with the Revenue and Taxation Interim Committee to
601     provide the information described in Subsection (5)(b)(i) in the aggregate for all alternative
602     energy entities that receive the tax credit under this section.
603          (c) As part of the study required by this Subsection (5), the Office of the Legislative
604     Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
605     analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
606     office under Subsection (5)(b).
607          [(c)] (d) The Revenue and Taxation Interim Committee shall ensure that [its] the
608     recommendations [under] described in Subsection (5)(a) include an evaluation of:
609          (i) the cost of the tax credit to the state;
610          (ii) the purpose and effectiveness of the tax credit; and
611          (iii) the extent to which the state benefits from the tax credit.
612          Section 7. Section 59-7-614.8 is amended to read:
613          59-7-614.8. Nonrefundable alternative energy manufacturing tax credit.
614          (1) As used in this section:
615          (a) "Alternative energy entity" means the same as that term is defined in Section
616     63N-2-702.

617          (b) "Alternative energy manufacturing project" means the same as that term is defined
618     in Section 63N-2-702.
619          (c) "New incremental job within the state" means the same as that term is defined in
620     Section 63N-2-702.
621          (d) "New state revenues" means the same as that term is defined in Section 63N-2-702.
622          (e) "Office" means the Governor's Office of Economic Development created in Section
623     63N-1-201.
624          (2) Subject to the other provisions of this section, an alternative energy entity may
625     claim a nonrefundable tax credit for alternative energy manufacturing as provided in this
626     section.
627          (3) The tax credit under this section is the amount listed as the tax credit amount on a
628     tax credit certificate that the office issues under Title 63N, Chapter 2, Part 7, Alternative
629     Energy Manufacturing Tax Credit Act, to the alternative energy entity for the taxable year.
630          (4) An alternative energy entity may carry forward a tax credit under this section for a
631     period that does not exceed the next seven taxable years if:
632          (a) the alternative energy entity is allowed to claim a tax credit under this section for a
633     taxable year; and
634          (b) the amount of the tax credit exceeds the alternative energy entity's tax liability
635     under this chapter for that taxable year.
636          (5) (a) [On or before October 1, 2017, and every five years after October 1, 2017] In
637     accordance with Section 59-7-159, the Revenue and Taxation Interim Committee shall study
638     the tax credit allowed by this section and make recommendations [to the Legislative
639     Management Committee] concerning whether the tax credit should be continued, modified, or
640     repealed.
641          (b) [For] Except as provided in Subsection (5)(c), for purposes of the study required by
642     this Subsection (5), the office shall provide the following information, if available to the office,
643     to the [Revenue and Taxation Interim Committee] Office of the Legislative Fiscal Analyst by
644     electronic means:
645          (i) the amount of tax credit that the office grants to each alternative energy entity for
646     each taxable year;
647          (ii) the new state revenues generated by each alternative energy manufacturing project;

648          (iii) estimates for each of the next [five] three calendar years of the following:
649          (A) the amount of tax credits that the office will grant;
650          (B) the amount of new state revenues that will be generated; and
651          (C) the number of new incremental jobs within the state that will be generated;
652          (iv) the information contained in the office's latest report [to the Legislature] under
653     Section 63N-2-705; and
654          (v) any other information that the [Revenue and Taxation Interim Committee] Office of
655     the Legislative Fiscal Analyst requests.
656          (c) (i) In providing the information described in Subsection (5)(b), the office shall
657     redact information that identifies a recipient of a tax credit under this section.
658          (ii) If, notwithstanding the redactions made under Subsection (5)(c)(i), reporting the
659     information described in Subsection (5)(b) might disclose the identity of a recipient of a tax
660     credit, the office may file a request with the Revenue and Taxation Interim Committee to
661     provide the information described in Subsection (5)(b) in the aggregate for all alternative
662     energy entities that receive the tax credit under this section.
663          (d) As part of the study required by this Subsection (5), the Office of the Legislative
664     Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
665     analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
666     office under Subsection (5)(b).
667          [(c)] (e) The Revenue and Taxation Interim Committee shall ensure that [its] the
668     recommendations [under] described in Subsection (5)(a) include an evaluation of:
669          (i) the cost of the tax credit to the state;
670          (ii) the purpose and effectiveness of the tax credit; and
671          (iii) the extent to which the state benefits from the tax credit.
672          Section 8. Section 59-7-614.10 is amended to read:
673          59-7-614.10. Nonrefundable enterprise zone tax credit.
674          (1) As used in this section:
675          (a) "Business entity" means a corporation that meets the definition of "business entity"
676     as that term is defined in Section 63N-2-202.
677          (b) "Office" means the Governor's Office of Economic Development created in Section
678     63N-1-201.

679          (2) Subject to the provisions of this section, a business entity may claim a
680     nonrefundable enterprise zone tax credit as described in Section 63N-2-213.
681          (3) The enterprise zone tax credit under this section is the amount listed as the tax
682     credit amount on the tax credit certificate that the office issues to the business entity for the
683     taxable year.
684          (4) A business entity may carry forward a tax credit under this section for a period that
685     does not exceed the next three taxable years, if the amount of the tax credit exceeds the
686     business entity's tax liability under this chapter for that taxable year.
687          (5) A business entity may not claim or carry forward a tax credit available under this
688     part for a taxable year during which the business entity has claimed the targeted business
689     income tax credit available under Section 63N-2-305.
690          (6) (a) [On or before October 1, 2018, and every five years after October 1, 2018] In
691     accordance with Section 59-7-159, the Revenue and Taxation Interim Committee shall study
692     the tax credit allowed by this section and make recommendations [to the Legislative
693     Management Committee] concerning whether the tax credit should be continued, modified, or
694     repealed.
695          (b) [For] (i) Except as provided in Subsection (6)(b)(ii), for purposes of the study
696     required by this Subsection (6), the office shall provide by electronic means the following
697     information for each calendar year to the [Revenue and Taxation Interim Committee] Office of
698     the Legislative Fiscal Analyst:
699          [(i)] (A) the amount of tax credits provided in each development zone;
700          [(ii)] (B) the number of new full-time employee positions reported to obtain tax credits
701     in each development zone;
702          [(iii)] (C) the amount of tax credits awarded for rehabilitating a building in each
703     development zone;
704          [(iv)] (D) the amount of tax credits awarded for investing in a plant, equipment, or
705     other depreciable property in each development zone;
706          [(v)] (E) the information related to the tax credit contained in the office's latest report
707     [to the Legislature] under Section 63N-1-301; and
708          [(vi)] (F) any other information [as requested by the Revenue and Taxation Interim
709     Committee] that the Office of the Legislative Fiscal Analyst requests.

710          (ii) (A) In providing the information described in Subsection (6)(b)(i), the office shall
711     redact information that identifies a recipient of a tax credit under this section.
712          (B) If, notwithstanding the redactions made under Subsection (6)(b)(ii)(A), reporting
713     the information described in Subsection (6)(b)(i) might disclose the identity of a recipient of a
714     tax credit, the office may file a request with the Revenue and Taxation Interim Committee to
715     provide the information described in Subsection (6)(b)(i) in the aggregate for all development
716     zones that receive the tax credit under this section.
717          (c) As part of the study required by this Subsection (6), the Office of the Legislative
718     Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
719     analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
720     office under Subsection (6)(b).
721          [(c)] (d) The Revenue and Taxation Interim Committee shall ensure that [its] the
722     recommendations [under] described in Subsection (6)(a) include an evaluation of:
723          (i) the cost of the tax credit to the state;
724          (ii) the purpose and effectiveness of the tax credit; and
725          (iii) the extent to which the state benefits from the tax credit.
726          Section 9. Section 59-7-619 is amended to read:
727          59-7-619. Nonrefundable high cost infrastructure development tax credit.
728          (1) As used in this section:
729          (a) "High cost infrastructure project" means the same as that term is defined in Section
730     63M-4-602.
731          (b) "Infrastructure cost-burdened entity" means the same as that term is defined in
732     Section 63M-4-602.
733          (c) "Infrastructure-related revenue" means the same as that term is defined in Section
734     63M-4-602.
735          (d) "Office" means the Office of Energy Development created in Section 63M-4-401.
736          (2) Subject to the other provisions of this section, a corporation that is an infrastructure
737     cost-burdened entity may claim a nonrefundable tax credit for development of a high cost
738     infrastructure project as provided in this section.
739          (3) The tax credit under this section is the amount listed as the tax credit amount on a
740     tax credit certificate that the office issues under Title 63M, Chapter 4, Part 6, High Cost

741     Infrastructure Development Tax Credit Act, to the infrastructure cost-burdened entity for the
742     taxable year.
743          (4) An infrastructure cost-burdened entity may carry forward a tax credit under this
744     section for a period that does not exceed the next seven taxable years if:
745          (a) the infrastructure cost-burdened entity is allowed to claim a tax credit under this
746     section for a taxable year; and
747          (b) the amount of the tax credit exceeds the infrastructure cost-burdened entity's tax
748     liability under this chapter for that taxable year.
749          (5) (a) [On or before October 1, 2020, and every five years after October 1, 2020] In
750     accordance with Section 59-7-159, the Revenue and Taxation Interim Committee shall study
751     the tax credit allowed by this section and make recommendations [to the Legislative
752     Management Committee] concerning whether the tax credit should be continued, modified, or
753     repealed.
754          (b) [For] (i) Except as provided in Subsection (5)(b)(ii), for purposes of the study
755     required by this Subsection (5), the office shall provide the following information, if available
756     to the office, to the [Revenue and Taxation Interim Committee] Office of the Legislative Fiscal
757     Analyst:
758          [(i)] (A) the amount of tax credit that the office grants to each infrastructure
759     cost-burdened entity for each taxable year;
760          [(ii)] (B) the infrastructure-related revenue generated by each high cost infrastructure
761     project;
762          [(iii)] (C) the information contained in the office's latest report [to the Legislature]
763     under Section 63M-4-505; and
764          [(iv)] (D) any other information that the [Revenue and Taxation Interim Committee]
765     Office of the Legislative Fiscal Analyst requests.
766          (ii) (A) In providing the information described in Subsection (5)(b)(i), the office shall
767     redact information that identifies a recipient of a tax credit under this section.
768          (B) If, notwithstanding the redactions made under Subsection (5)(b)(ii)(A), reporting
769     the information described in Subsection (5)(b)(i) might disclose the identity of a recipient of a
770     tax credit, the office may file a request with the Revenue and Taxation Interim Committee to
771     provide the information described in Subsection (5)(b)(i) in the aggregate for all infrastructure

772     cost-burdened entities that receive the tax credit under this section.
773          (c) As part of the study required by this Subsection (5), the Office of the Legislative
774     Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
775     analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
776     office under Subsection (5)(b).
777          [(c)] (d) The Revenue and Taxation Interim Committee shall ensure that the [Revenue
778     and Taxation Interim Committee's] recommendations [under] described in Subsection (5)(a)
779     include an evaluation of:
780          (i) the cost of the tax credit to the state;
781          (ii) the purpose and effectiveness of the tax credit; and
782          (iii) the extent to which the state benefits from the tax credit.
783          Section 10. Section 59-9-107 is amended to read:
784          59-9-107. Nonrefundable small business jobs credit.
785          (1) As used in this section:
786          (a) "Credit allowance date" [is as] means the same as that term is defined in Section
787     63N-2-602.
788          (b) "Office" [is as defined] means the Governor's Office of Economic Development
789     created in Section [63N-1-102] 63N-1-201.
790          (c) "Tax credit certificate" [is as] means the same as that term is defined in Section
791     63N-2-602.
792          (2) An entity may claim a nonrefundable tax credit against a tax liability under this
793     chapter in accordance with this section if the entity is issued a tax credit certificate by the office
794     under Subsection 63N-2-603(11). The office shall issue a tax credit certificate to an entity that
795     is allocated tax credits under Subsection 63N-2-603(11)(e).
796          (3) The tax credit under this section is the amount listed as the tax credit amount on the
797     tax credit certificate issued to the entity for the calendar year.
798          (4) An entity may carry forward a tax credit under this section for seven years if:
799          (a) the entity is allowed to claim a tax credit under this section for a calendar year; and
800          (b) the amount of the tax credit exceeds the entity's tax liability under this chapter for
801     that calendar year.
802          (5) An entity required to pay a retaliatory tax levied under this chapter for a reason

803     other than claiming the tax credit may claim the tax credit after the retaliatory tax amount is
804     calculated, and the tax credit may be used to offset retaliatory tax liability.
805          (6) Notwithstanding the other provisions of this section, this section does not apply to
806     an admitted insurer to the extent that the admitted insurer writes workers' compensation
807     insurance in this state and has premiums taxed under Subsection 59-9-101(2).
808          (7) (a) On or before November 30, 2018, and every three years after 2018, the Revenue
809     and Taxation Interim Committee shall review the tax credit provided by this section and make
810     recommendations concerning whether the tax credit should be continued, modified, or
811     repealed.
812          (b) In conducting the review required by Subsection (7)(a), the Revenue and Taxation
813     Interim Committee shall:
814          (i) schedule time on at least one committee agenda to conduct the review;
815          (ii) invite state agencies, individuals, and organizations concerned with the tax credit
816     under review to provide testimony;
817          (iii) ensure that the recommendations described in this section include an evaluation of:
818          (A) the cost of the tax credit to the state;
819          (B) the purpose and effectiveness of the tax credit; and
820          (C) the extent to which the state benefits from the tax credit; and
821          (iv) undertake other review efforts as determined by the chairs of the Revenue and
822     Taxation Interim Committee.
823          Section 11. Section 59-10-137 is enacted to read:
824          59-10-137. Review of credits allowed under this chapter.
825          (1) As used in this section, "committee" means the Revenue and Taxation Interim
826     Committee.
827          (2) (a) The committee shall review the tax credits described in this chapter as provided
828     in Subsection (3) and make recommendations concerning whether the tax credits should be
829     continued, modified, or repealed.
830          (b) In conducting the review required under Subsection (2)(a), the committee shall:
831          (i) schedule time on at least one committee agenda to conduct the review;
832          (ii) invite state agencies, individuals, and organizations concerned with the tax credit
833     under review to provide testimony;

834          (iii) (A) invite the Governor's Office of Economic Development to present a summary
835     and analysis of the information for each tax credit regarding which the Governor's Office of
836     Economic Development is required to make a report under this chapter; and
837          (B) invite the Office of the Legislative Fiscal Analyst to present a summary and
838     analysis of the information for each tax credit regarding which the Office of the Legislative
839     Fiscal Analyst is required to make a report under this chapter;
840          (iv) ensure that the committee's recommendations described in this section include an
841     evaluation of:
842          (A) the cost of the tax credit to the state;
843          (B) the purpose and effectiveness of the tax credit; and
844          (C) the extent to which the state benefits from the tax credit; and
845          (v) undertake other review efforts as determined by the committee chairs or as
846     otherwise required by law.
847          (3) (a) On or before November 30, 2017, and every three years after 2017, the
848     committee shall conduct the review required under Subsection (2) of the tax credits allowed
849     under the following sections:
850          (i) Section 59-10-1004;
851          (ii) Section 59-10-1010;
852          (iii) Section 59-10-1015;
853          (iv) Section 59-10-1025;
854          (v) Section 59-10-1027;
855          (vi) Section 59-10-1031;
856          (vii) Section 59-10-1032;
857          (viii) Section 59-10-1035;
858          (ix) Section 59-10-1104;
859          (x) Section 59-10-1105; and
860          (xi) Section 59-10-1108.
861          (b) On or before November 30, 2018, and every three years after 2018, the committee
862     shall conduct the review required under Subsection (2) of the tax credits allowed under the
863     following sections:
864          (i) Section 59-10-1005;

865          (ii) Section 59-10-1006;
866          (iii) Section 59-10-1012;
867          (iv) Section 59-10-1013;
868          (v) Section 59-10-1022;
869          (vi) Section 59-10-1023;
870          (vii) Section 59-10-1028;
871          (viii) Section 59-10-1034;
872          (ix) Section 59-10-1037; and
873          (x) Section 59-10-1107.
874          (c) On or before November 30, 2019, and every three years after 2019, the committee
875     shall conduct the review required under Subsection (2) of the tax credits allowed under the
876     following sections:
877          (i) Section 59-10-1007;
878          (ii) Section 59-10-1009;
879          (iii) Section 59-10-1014;
880          (iv) Section 59-10-1017;
881          (v) Section 59-10-1018;
882          (vi) Section 59-10-1019;
883          (vii) Section 59-10-1024;
884          (viii) Section 59-10-1029;
885          (ix) Section 59-10-1030;
886          (x) Section 59-10-1033;
887          (xi) Section 59-10-1036;
888          (xii) Section 59-10-1106; and
889          (xiii) Section 59-10-1111.
890          (d) (i) In addition to the reviews described in this Subsection (3), the committee shall
891     conduct a review of a tax credit described in this chapter that is enacted on or after January 1,
892     2017.
893          (ii) The committee shall complete a review described in this Subsection (3)(d) three
894     years after the effective date of the tax credit and every three years after the initial review date.
895          Section 12. Section 59-10-1012 is amended to read:

896          59-10-1012. Tax credits for research activities conducted in the state -- Carry
897     forward -- Commission to report modification or repeal of certain federal provisions --
898     Revenue and Taxation Interim Committee study.
899          (1) (a) A claimant, estate, or trust meeting the requirements of this section may claim
900     the following nonrefundable tax credits:
901          (i) a research tax credit of 5% of the claimant's, estate's, or trust's qualified research
902     expenses for the current taxable year that exceed the base amount provided for under
903     Subsection (3);
904          (ii) a tax credit for a payment to a qualified organization for basic research as provided
905     in Section 41(e), Internal Revenue Code of 5% for the current taxable year that exceed the base
906     amount provided for under Subsection (3); and
907          (iii) a tax credit equal to 7.5% of the claimant's, estate's, or trust's qualified research
908     expenses for the current taxable year.
909          (b) Subject to Subsection (4), a claimant, estate, or trust may claim a tax credit under:
910          (i) Subsection (1)(a)(i) or (1)(a)(iii), for the taxable year for which the claimant, estate,
911     or trust incurs the qualified research expenses; or
912          (ii) Subsection (1)(a)(ii), for the taxable year for which the claimant, estate, or trust
913     makes the payment to the qualified organization.
914          (c) The tax credits provided for in this section do not include the alternative
915     incremental credit provided for in Section 41(c)(4), Internal Revenue Code.
916          (2) Except as specifically provided for in this section:
917          (a) the tax credits authorized under Subsection (1) shall be calculated as provided in
918     Section 41, Internal Revenue Code; and
919          (b) the definitions provided in Section 41, Internal Revenue Code, apply in calculating
920     the tax credits authorized under Subsection (1).
921          (3) For purposes of this section:
922          (a) the base amount shall be calculated as provided in Sections 41(c) and 41(h),
923     Internal Revenue Code, except that:
924          (i) the base amount does not include the calculation of the alternative incremental
925     credit provided for in Section 41(c)(4), Internal Revenue Code;
926          (ii) a claimant's, estate's, or trust's gross receipts include only those gross receipts

927     attributable to sources within this state as provided in Section 59-10-118; and
928          (iii) notwithstanding Section 41(c), Internal Revenue Code, for purposes of calculating
929     the base amount, a claimant, estate, or trust:
930          (A) may elect to be treated as a start-up company as provided in Section 41(c)(3)(B),
931     Internal Revenue Code, regardless of whether the claimant, estate, or trust meets the
932     requirements of Section 41(c)(3)(B)(i)(I) or (II), Internal Revenue Code; and
933          (B) may not revoke an election to be treated as a start-up company under Subsection
934     (3)(a)(iii)(A);
935          (b) "basic research" is as defined in Section 41(e)(7), Internal Revenue Code, except
936     that the term includes only basic research conducted in this state;
937          (c) "qualified research" is as defined in Section 41(d), Internal Revenue Code, except
938     that the term includes only qualified research conducted in this state;
939          (d) "qualified research expenses" is as defined and calculated in Section 41(b), Internal
940     Revenue Code, except that the term includes only:
941          (i) in-house research expenses incurred in this state; and
942          (ii) contract research expenses incurred in this state; and
943          (e) a tax credit provided for in this section is not terminated if a credit terminates under
944     Section 41, Internal Revenue Code.
945          (4) (a) If the amount of a tax credit claimed by a claimant, estate, or trust under
946     Subsection (1)(a)(i) or (ii) exceeds the claimant's, estate's, or trust's tax liability under this
947     chapter for a taxable year, the amount of the tax credit exceeding the tax liability:
948          (i) may be carried forward for a period that does not exceed the next 14 taxable years;
949     and
950          (ii) may not be carried back to a taxable year preceding the current taxable year.
951          (b) A claimant, estate, or trust may not carry forward the tax credit allowed by
952     Subsection (1)(a)(iii).
953          (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
954     commission may make rules for purposes of this section prescribing a certification process for
955     qualified organizations to ensure that amounts paid to the qualified organizations are for basic
956     research conducted in this state.
957          (6) If a provision of Section 41, Internal Revenue Code, is modified or repealed, the

958     commission shall report the modification or repeal by electronic means to the Revenue and
959     Taxation Interim Committee within 60 days after the day on which the modification or repeal
960     becomes effective.
961          (7) (a) The Revenue and Taxation Interim Committee shall review the tax credits
962     provided for in this section on or before October 1 of the year after the year in which the
963     commission reports under Subsection (6) a modification or repeal of a provision of Section 41,
964     Internal Revenue Code.
965          (b) The review described in Subsection (7)(a) is in addition to the review required by
966     Section 59-10-137.
967          [(b)] (c) Notwithstanding Subsection (7)(a), the Revenue and Taxation Interim
968     Committee is not required to review the tax credits provided for in this section if the only
969     modification to a provision of Section 41, Internal Revenue Code, is the extension of the
970     termination date provided for in Section 41(h), Internal Revenue Code.
971          [(c)] (d) The Revenue and Taxation Interim Committee shall address in a review under
972     this section:
973          (i) the cost of the tax credits provided for in this section;
974          (ii) the purpose and effectiveness of the tax credits provided for in this section;
975          (iii) whether the tax credits provided for in this section benefit the state; and
976          (iv) whether the tax credits provided for in this section should be:
977          (A) continued;
978          (B) modified; or
979          (C) repealed.
980          [(d)] (e) If the Revenue and Taxation Interim Committee reviews the tax credits
981     provided for in this section, the committee shall issue a report [its] of the Revenue and
982     Taxation Interim Committee's findings [to the Legislative Management Committee on or
983     before the November interim meeting of the year in which the Revenue and Taxation Interim
984     Committee reviews the tax credits].
985          Section 13. Section 59-10-1013 is amended to read:
986          59-10-1013. Tax credits for machinery, equipment, or both primarily used for
987     conducting qualified research or basic research -- Carry forward -- Commission to report
988     modification or repeal of certain federal provisions -- Revenue and Taxation Interim

989     Committee study.
990          (1) As used in this section:
991          (a) "Basic research" [is as] means the same as that term is defined in Section 41(e)(7),
992     Internal Revenue Code, except that the term includes only basic research conducted in this
993     state.
994          (b) "Equipment" includes:
995          (i) a computer;
996          (ii) computer equipment; and
997          (iii) computer software.
998          (c) "Purchase price":
999          (i) includes the cost of installing an item of machinery or equipment; and
1000          (ii) does not include a tax imposed under Chapter 12, Sales and Use Tax Act, on an
1001     item of machinery or equipment.
1002          (d) "Qualified organization" [is as] means the same as that term is defined in Section
1003     41(e)(6), Internal Revenue Code.
1004          (e) "Qualified research" [is as] means the same as that term is defined in Section 41(d),
1005     Internal Revenue Code, except that the term includes only qualified research conducted in this
1006     state.
1007          (2) (a) Except as provided in Subsection (2)(c), for a taxable [years] year beginning on
1008     or after January 1, 1999, but beginning before December 31, 2010, a claimant, estate, or trust
1009     meeting the requirements of this section may claim the following nonrefundable tax credits:
1010          (i) a tax credit of 6% of the purchase price of machinery, equipment, or both:
1011          (A) purchased by the claimant, estate, or trust during the taxable year;
1012          (B) that is subject to a tax under Chapter 12, Sales and Use Tax Act; and
1013          (C) that is primarily used to conduct qualified research in this state; and
1014          (ii) a tax credit of 6% of the purchase price paid by the claimant, estate, or trust for
1015     machinery, equipment, or both:
1016          (A) purchased by the claimant, estate, or trust during the taxable year;
1017          (B) that is subject to a tax under Chapter 12, Sales and Use Tax Act;
1018          (C) that is donated to a qualified organization; and
1019          (D) that is primarily used to conduct basic research in this state.

1020          (b) Subject to Subsection (4), a claimant, estate, or trust may claim a tax credit under
1021     this section for the taxable year for which the claimant, estate, or trust purchases the machinery,
1022     equipment, or both.
1023          (c) If a claimant, estate, or trust qualifies for a tax credit under Subsection (2)(a) for a
1024     purchase of machinery, equipment, or both, the claimant, estate, or trust may not claim the tax
1025     credit or carry the tax credit forward if the machinery, equipment, or both, is primarily used to
1026     conduct qualified research in the state for a time period that is less than 12 consecutive months.
1027          (3) Notwithstanding Section 41(h), Internal Revenue Code, a tax credit provided for in
1028     this section is not terminated if a credit terminates under Section 41, Internal Revenue Code.
1029          (4) If the amount of a tax credit claimed by a claimant, estate, or trust under this
1030     section exceeds a claimant's, estate's, or trust's tax liability under this chapter for a taxable year,
1031     the amount of the tax credit exceeding the tax liability:
1032          (a) may be carried forward for a period that does not exceed the next 14 taxable years;
1033     and
1034          (b) may not be carried back to a taxable year preceding the current taxable year.
1035          (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1036     commission may make rules for purposes of this section prescribing a certification process for
1037     qualified organizations to ensure that machinery, equipment, or both provided to the qualified
1038     organization is to be primarily used to conduct basic research in this state.
1039          (6) If a provision of Section 41, Internal Revenue Code, is modified or repealed, the
1040     commission shall report the modification or repeal by electronic means to the Revenue and
1041     Taxation Interim Committee within 60 days after the day on which the modification or repeal
1042     becomes effective.
1043          (7) (a) The Revenue and Taxation Interim Committee shall review the tax credits
1044     provided for in this section on or before October 1 of the year after the year in which the
1045     commission reports under Subsection (6) a modification or repeal of a provision of Section 41,
1046     Internal Revenue Code.
1047          (b) The review described in Subsection (7)(a) is in addition to the review required by
1048     Section 59-10-137.
1049          [(b)] (c) Notwithstanding Subsection (7)(a), the Revenue and Taxation Interim
1050     Committee is not required to review the tax credits provided for in this section if the only

1051     modification to a provision of Section 41, Internal Revenue Code, is the extension of the
1052     termination date provided for in Section 41(h), Internal Revenue Code.
1053          [(c)] (d) The Revenue and Taxation Interim Committee shall address in a review under
1054     this section the:
1055          (i) cost of the tax credits provided for in this section;
1056          (ii) purpose and effectiveness of the tax credits provided for in this section;
1057          (iii) whether the tax credits provided for in this section benefit the state; and
1058          (iv) whether the tax credits provided for in this section should be:
1059          (A) continued;
1060          (B) modified; or
1061          (C) repealed.
1062          [(d)] (e) If the Revenue and Taxation Interim Committee reviews the tax credits
1063     provided for in this section, the committee shall issue a report [its] of the Revenue and
1064     Taxation Interim Committee's findings [to the Legislative Management Committee on or
1065     before the November interim meeting of the year in which the Revenue and Taxation Interim
1066     Committee reviews the tax credits].
1067          Section 14. Section 59-10-1014 is amended to read:
1068          59-10-1014. Nonrefundable renewable energy systems tax credits -- Definitions --
1069     Certification -- Rulemaking authority.
1070          (1) As used in this section:
1071          (a) (i) "Active solar system" means a system of equipment that is capable of:
1072          (A) collecting and converting incident solar radiation into thermal, mechanical, or
1073     electrical energy; and
1074          (B) transferring a form of energy described in Subsection (1)(a)(i)(A) by a separate
1075     apparatus to storage or to the point of use.
1076          (ii) "Active solar system" includes water heating, space heating or cooling, and
1077     electrical or mechanical energy generation.
1078          (b) "Biomass system" means a system of apparatus and equipment for use in:
1079          (i) converting material into biomass energy, as defined in Section 59-12-102; and
1080          (ii) transporting the biomass energy by separate apparatus to the point of use or storage.
1081          (c) "Direct use geothermal system" means a system of apparatus and equipment that

1082     enables the direct use of geothermal energy to meet energy needs, including heating a building,
1083     an industrial process, and aquaculture.
1084          (d) "Geothermal electricity" means energy that is:
1085          (i) contained in heat that continuously flows outward from the earth; and
1086          (ii) used as a sole source of energy to produce electricity.
1087          (e) "Geothermal energy" means energy generated by heat that is contained in the earth.
1088          (f) "Geothermal heat pump system" means a system of apparatus and equipment that:
1089          (i) enables the use of thermal properties contained in the earth at temperatures well
1090     below 100 degrees Fahrenheit; and
1091          (ii) helps meet heating and cooling needs of a structure.
1092          (g) "Hydroenergy system" means a system of apparatus and equipment that is capable
1093     of:
1094          (i) intercepting and converting kinetic water energy into electrical or mechanical
1095     energy; and
1096          (ii) transferring this form of energy by separate apparatus to the point of use or storage.
1097          (h) "Office" means the Office of Energy Development created in Section 63M-4-401.
1098          (i) (i) "Passive solar system" means a direct thermal system that utilizes the structure of
1099     a building and its operable components to provide for collection, storage, and distribution of
1100     heating or cooling during the appropriate times of the year by utilizing the climate resources
1101     available at the site.
1102          (ii) "Passive solar system" includes those portions and components of a building that
1103     are expressly designed and required for the collection, storage, and distribution of solar energy.
1104          (j) (i) "Principal recovery portion" means the portion of a lease payment that
1105     constitutes the cost a person incurs in acquiring a residential energy system.
1106          (ii) "Principal recovery portion" does not include:
1107          (A) an interest charge; or
1108          (B) a maintenance expense.
1109          (k) "Residential energy system" means the following used to supply energy to or for a
1110     residential unit:
1111          (i) an active solar system;
1112          (ii) a biomass system;

1113          (iii) a direct use geothermal system;
1114          (iv) a geothermal heat pump system;
1115          (v) a hydroenergy system;
1116          (vi) a passive solar system; or
1117          (vii) a wind system.
1118          (l) (i) "Residential unit" means a house, condominium, apartment, or similar dwelling
1119     unit that:
1120          (A) is located in the state; and
1121          (B) serves as a dwelling for a person, group of persons, or a family.
1122          (ii) "Residential unit" does not include property subject to a fee under:
1123          (A) Section 59-2-404;
1124          (B) Section 59-2-405;
1125          (C) Section 59-2-405.1;
1126          (D) Section 59-2-405.2; or
1127          (E) Section 59-2-405.3.
1128          (m) "Wind system" means a system of apparatus and equipment that is capable of:
1129          (i) intercepting and converting wind energy into mechanical or electrical energy; and
1130          (ii) transferring these forms of energy by a separate apparatus to the point of use or
1131     storage.
1132          (2) A claimant, estate, or trust may claim an energy system tax credit as provided in
1133     this section against a tax due under this chapter for a taxable year.
1134          (3) (a) Subject to the other provisions of this Subsection (3), a claimant, estate, or trust
1135     may claim a nonrefundable tax credit under this Subsection (3) with respect to a residential unit
1136     the claimant, estate, or trust owns or uses if:
1137          (i) the claimant, estate, or trust:
1138          (A) purchases and completes a residential energy system to supply all or part of the
1139     energy required for the residential unit; or
1140          (B) participates in the financing of a residential energy system to supply all or part of
1141     the energy required for the residential unit;
1142          (ii) the residential energy system is completed and placed in service on or after January
1143     1, 2007; and

1144          (iii) the claimant, estate, or trust obtains a written certification from the office in
1145     accordance with Subsection (4).
1146          (b) (i) Subject to Subsections (3)(b)(ii) through (vi), the tax credit is equal to 25% of
1147     the reasonable costs of each residential energy system installed with respect to each residential
1148     unit the claimant, estate, or trust owns or uses.
1149          (ii) A tax credit under this Subsection (3) may include installation costs.
1150          (iii) A claimant, estate, or trust may claim a tax credit under this Subsection (3) for the
1151     taxable year in which the residential energy system is completed and placed in service.
1152          (iv) If the amount of a tax credit under this Subsection (3) exceeds a claimant's,
1153     estate's, or trust's tax liability under this chapter for a taxable year, the amount of the tax credit
1154     exceeding the liability may be carried forward for a period that does not exceed the next four
1155     taxable years.
1156          (v) The total amount of tax credit a claimant, estate, or trust may claim under this
1157     Subsection (3) may not exceed $2,000 per residential unit.
1158          (vi) A claimant, estate, or trust may claim a tax credit with respect to additional
1159     residential energy systems or parts of residential energy systems for a subsequent taxable year
1160     if the total amount of tax credit the claimant, estate, or trust claims does not exceed $2,000 per
1161     residential unit.
1162          (c) (i) Subject to Subsections (3)(c)(ii) and (iii), a claimant, estate, or trust that leases a
1163     residential energy system installed on a residential unit may claim a tax credit under this
1164     Subsection (3) if the claimant, estate, or trust confirms that the lessor irrevocably elects not to
1165     claim the tax credit.
1166          (ii) A claimant, estate, or trust described in Subsection (3)(c)(i) that leases a residential
1167     energy system may claim as a tax credit under this Subsection (3) only the principal recovery
1168     portion of the lease payments.
1169          (iii) A claimant, estate, or trust described in Subsection (3)(c)(i) that leases a residential
1170     energy system may claim a tax credit under this Subsection (3) for a period that does not
1171     exceed seven taxable years after the date the lease begins, as stated in the lease agreement.
1172          (d) If a claimant, estate, or trust sells a residential unit to another person before the
1173     claimant, estate, or trust claims the tax credit under this Subsection (3):
1174          (i) the claimant, estate, or trust may assign the tax credit to the other person; and

1175          (ii) (A) if the other person files a return under Chapter 7, Corporate Franchise and
1176     Income Taxes, the other person may claim the tax credit as if the other person had met the
1177     requirements of Section 59-7-614 to claim the tax credit; or
1178          (B) if the other person files a return under this chapter, the other person may claim the
1179     tax credit under this section as if the other person had met the requirements of this section to
1180     claim the tax credit.
1181          (4) (a) Before a claimant, estate, or trust may claim a tax credit under this section, the
1182     claimant, estate, or trust shall obtain a written certification from the office.
1183          (b) The office shall issue a claimant, estate, or trust a written certification if the office
1184     determines that:
1185          (i) the claimant, estate, or trust meets the requirements of this section to receive a tax
1186     credit; and
1187          (ii) the office determines that the residential energy system with respect to which the
1188     claimant, estate, or trust seeks to claim a tax credit:
1189          (A) has been completely installed;
1190          (B) is a viable system for saving or producing energy from renewable resources; and
1191          (C) is safe, reliable, efficient, and technically feasible to ensure that the residential
1192     energy system uses the state's renewable and nonrenewable energy resources in an appropriate
1193     and economic manner.
1194          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1195     office may make rules:
1196          (i) for determining whether a residential energy system meets the requirements of
1197     Subsection (4)(b)(ii); and
1198          (ii) for purposes of a tax credit under Subsection (3), establishing the reasonable costs
1199     of a residential energy system, as an amount per unit of energy production.
1200          (d) A claimant, estate, or trust that obtains a written certification from the office shall
1201     retain the certification for the same time period a person is required to keep books and records
1202     under Section 59-1-1406.
1203          (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1204     commission may make rules to address the certification of a tax credit under this section.
1205          (6) A tax credit under this section is in addition to any tax credits provided under the

1206     laws or rules and regulations of the United States.
1207          (7) A purchaser of one or more solar units that claims a tax credit under Section
1208     59-10-1024 for the purchase of the one or more solar units may not claim a tax credit under this
1209     section for that purchase.
1210          [(8) (a) On or before October 1, 2017, and every five years after 2017, the Revenue and
1211     Taxation Interim Committee shall review each tax credit provided by this section and report its
1212     recommendations to the Legislative Management Committee concerning whether the tax credit
1213     should be continued, modified, or repealed.]
1214          [(b) The Revenue and Taxation Interim Committee's report under Subsection (8)(a)
1215     shall include information concerning the cost of the tax credit, the purpose and effectiveness of
1216     the tax credit, and the state's benefit from the tax credit.]
1217          Section 15. Section 59-10-1024 is amended to read:
1218          59-10-1024. Nonrefundable tax credit for qualifying solar projects.
1219          (1) As used in this section:
1220          (a) "Active solar system" [is as] means the same as that term is defined in Section
1221     59-10-1014.
1222          (b) "Purchaser" means a claimant, estate, or trust that purchases one or more solar units
1223     from a qualifying political subdivision.
1224          (c) "Qualifying political subdivision" means:
1225          (i) a city or town in this state;
1226          (ii) an interlocal entity created under Title 11, Chapter 13, Interlocal Cooperation Act;
1227     or
1228          (iii) a special service district created under Title 17D, Chapter 1, Special Service
1229     District Act.
1230          (d) "Qualifying solar project" means the portion of an active solar system:
1231          (i) that a qualifying political subdivision:
1232          (A) constructs;
1233          (B) controls; or
1234          (C) owns;
1235          (ii) with respect to which the qualifying political subdivision described in Subsection
1236     (1)(c)(i) sells one or more solar units; and

1237          (iii) that generates electrical output that is furnished:
1238          (A) to one or more residential units; or
1239          (B) for the benefit of one or more residential units.
1240          (e) "Residential unit" [is as] means the same as that term is defined in Section
1241     59-10-1014.
1242          (f) "Solar unit" means a portion of the electrical output:
1243          (i) of a qualifying solar project;
1244          (ii) that a qualifying political subdivision sells to a purchaser; and
1245          (iii) the purchase of which requires that the purchaser agree to bear a proportionate
1246     share of the expense of the qualifying solar project:
1247          (A) in accordance with a written agreement between the purchaser and the qualifying
1248     political subdivision;
1249          (B) in exchange for a credit on the purchaser's electrical bill; and
1250          (C) as determined by a formula established by the qualifying political subdivision.
1251          (2) Subject to Subsection (3), for taxable years beginning on or after January 1, 2009, a
1252     purchaser may claim a nonrefundable tax credit equal to the product of:
1253          (a) the amount the purchaser pays to purchase one or more solar units during the
1254     taxable year; and
1255          (b) 25%.
1256          (3) For a taxable year, a tax credit under this section may not exceed $2,000 on a
1257     return.
1258          (4) A purchaser may carry forward a tax credit under this section for a period that does
1259     not exceed the next four taxable years if:
1260          (a) the purchaser is allowed to claim a tax credit under this section for a taxable year;
1261     and
1262          (b) the amount of the tax credit exceeds the purchaser's tax liability under this chapter
1263     for that taxable year.
1264          (5) Subject to Section 59-10-1014, a tax credit under this section is in addition to any
1265     other tax credit allowed by this chapter.
1266          [(6) (a) On or before October 1, 2012, and every five years after October 1, 2012, the
1267     Revenue and Taxation Interim Committee shall review the tax credit allowed by this section

1268     and report its recommendations to the Legislative Management Committee concerning whether
1269     the tax credit should be continued, modified, or repealed.]
1270          [(b) The Revenue and Taxation Interim Committee's report under Subsection (6)(a)
1271     shall include information concerning the cost of the tax credit, the purpose and effectiveness of
1272     the tax credit, and the state's benefit from the tax credit.]
1273          Section 16. Section 59-10-1025 is amended to read:
1274          59-10-1025. Nonrefundable tax credit for investment in certain life science
1275     establishments.
1276          (1) As used in this section:
1277          (a) "Commercial domicile" means the principal place from which the trade or business
1278     of a Utah small business corporation is directed or managed.
1279          (b) "Eligible claimant, estate, or trust" means the same as that term is defined in
1280     Section 63N-2-802.
1281          (c) "Life science establishment" means an establishment primarily engaged in the
1282     development or manufacture of products in one or more of the following categories:
1283          (i) biotechnologies;
1284          (ii) medical devices;
1285          (iii) medical diagnostics; and
1286          (iv) pharmaceuticals.
1287          (d) "Office" means the Governor's Office of Economic Development.
1288          (e) "Pass-through entity" means the same as that term is defined in Section 59-10-1402.
1289          (f) "Pass-through entity taxpayer" means the same as that term is defined in Section
1290     59-10-1402.
1291          (g) "Qualifying ownership interest" means an ownership interest that is:
1292          (i) (A) common stock;
1293          (B) preferred stock; or
1294          (C) an ownership interest in a pass-through entity;
1295          (ii) originally issued to:
1296          (A) an eligible claimant, estate, or trust; or
1297          (B) a pass-through entity if the eligible claimant, estate, or trust that claims a tax credit
1298     under this section was a pass-through entity taxpayer of the pass-through entity on the day on

1299     which the qualifying ownership interest was issued and remains a pass-through entity taxpayer
1300     of the pass-through entity until the last day of the taxable year for which the eligible claimant,
1301     estate, or trust claims a tax credit under this section; and
1302          (iii) issued:
1303          (A) by a Utah small business corporation;
1304          (B) on or after January 1, 2011; and
1305          (C) for money or other property, except for stock or securities.
1306          (h) (i) Except as provided in Subsection (1)(h)(ii), "Utah small business corporation"
1307     means the same as that term is defined in Section 59-10-1022.
1308          (ii) For purposes of this section, a corporation under Section 1244(c)(3)(A), Internal
1309     Revenue Code, is considered to include a pass-through entity.
1310          (2) Subject to the other provisions of this section, for a taxable year beginning on or
1311     after January 1, 2011, an eligible claimant, estate, or trust that holds a tax credit certificate
1312     issued to the eligible claimant, estate, or trust in accordance with Section 63N-2-808 for that
1313     taxable year may claim a nonrefundable tax credit in an amount up to 35% of the purchase
1314     price of a qualifying ownership interest in a Utah small business corporation by the claimant,
1315     estate, or trust if:
1316          (a) the qualifying ownership interest is issued by a Utah small business corporation that
1317     is a life science establishment;
1318          (b) the qualifying ownership interest in the Utah small business corporation is
1319     purchased for at least $25,000;
1320          (c) the eligible claimant, estate, or trust owned less than 30% of the qualifying
1321     ownership interest of the Utah small business corporation at the time of the purchase of the
1322     qualifying ownership interest; and
1323          (d) on each day of the taxable year in which the purchase of the qualifying ownership
1324     interest was made, the Utah small business corporation described in Subsection (2)(a) has at
1325     least 50% of its employees in the state.
1326          (3) Subject to Subsection (4), the tax credit under Subsection (2):
1327          (a) may only be claimed by an eligible claimant, estate, or trust:
1328          (i) for a taxable year for which the eligible claimant, estate, or trust holds a tax credit
1329     certificate issued in accordance with Section 63N-2-808; and

1330          (ii) subject to obtaining a tax credit certificate for each taxable year as required by
1331     Subsection (3)(a)(i), for a period of three taxable years as follows:
1332          (A) the tax credit in the taxable year in which the purchase of the qualifying ownership
1333     interest was made may not exceed 10% of the purchase price of the qualifying ownership
1334     interest;
1335          (B) the tax credit in the taxable year after the taxable year described in Subsection
1336     (3)(a)(ii)(A) may not exceed 10% of the purchase price of the qualifying ownership interest;
1337     and
1338          (C) the tax credit in the taxable year two years after the taxable year described in
1339     Subsection (3)(a)(ii)(A) may not exceed 15% of the purchase price of the qualifying ownership
1340     interest; and
1341          (b) may not exceed the lesser of:
1342          (i) the amount listed on the tax credit certificate issued in accordance with Section
1343     63N-2-808; or
1344          (ii) $350,000 in a taxable year.
1345          (4) An eligible claimant, estate, or trust may not claim a tax credit under this section
1346     for a taxable year if the eligible claimant, estate, or trust:
1347          (a) has sold any of the qualifying ownership interest during the taxable year; or
1348          (b) does not hold a tax credit certificate for that taxable year that is issued to the
1349     eligible claimant, estate, or trust by the office in accordance with Section 63N-2-808.
1350          (5) If a Utah small business corporation in which an eligible claimant, estate, or trust
1351     purchases a qualifying ownership interest fails, dissolves, or otherwise goes out of business, the
1352     eligible claimant, estate, or trust may not claim both the tax credit provided in this section and
1353     a capital loss on the qualifying ownership interest.
1354          (6) If an eligible claimant is a pass-through entity taxpayer that files a return under
1355     Chapter 7, Corporate Franchise and Income Taxes, the eligible claimant may claim the tax
1356     credit under this section on the return filed under Chapter 7, Corporate Franchise and Income
1357     Taxes.
1358          (7) A claimant, estate, or trust may not carry forward or carry back a tax credit under
1359     this section.
1360          (8) (a) In accordance with Section 59-10-137, the Revenue and Taxation Interim

1361     Committee shall study the tax credit allowed by this section and make recommendations
1362     concerning whether the tax credit should be continued, modified, or repealed.
1363          (b) Except as provided in Subsection (8)(c), for purposes of the study required by this
1364     Subsection (8), the office shall provide the following information, if available to the office, to
1365     the Office of the Legislative Fiscal Analyst by electronic means:
1366          (i) the amount of tax credit that the office grants to each eligible business entity for
1367     each taxable year;
1368          (ii) the amount of eligible new state tax revenues generated by each eligible product or
1369     project;
1370          (iii) estimates for each of the next three calendar years of the following:
1371          (A) the amount of tax credit that the office will grant;
1372          (B) the amount of eligible new state tax revenues that will be generated; and
1373          (C) the number of new incremental jobs within the state that will be generated;
1374          (iv) the information contained in the office's latest report under Section 63N-2-705;
1375     and
1376          (v) any other information that the Office of the Legislative Fiscal Analyst requests.
1377          (c) (i) In providing the information described in Subsection (8)(b), the office shall
1378     redact information that identifies a recipient of a tax credit under this section.
1379          (ii) If, notwithstanding the redactions made under Subsection (8)(c)(i), reporting the
1380     information described in Subsection (8)(b) might disclose the identity of a recipient of a tax
1381     credit, the office may file a request with the Revenue and Taxation Interim Committee to
1382     provide the information described in Subsection (8)(b) in the aggregate for all entities that
1383     receive the tax credit under this section.
1384          (d) As part of the study required by this Subsection (8), the Office of the Legislative
1385     Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
1386     analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
1387     office under Subsection (8)(b).
1388          (e) The Revenue and Taxation Interim Committee shall ensure that the
1389     recommendations described in Subsection (8)(a) include an evaluation of:
1390          (i) the cost of the tax credit under this section;
1391          (ii) the purpose and effectiveness of the tax credit; and

1392          (iii) the extent to which the state benefits from the tax credit.
1393          Section 17. Section 59-10-1029 is amended to read:
1394          59-10-1029. Nonrefundable alternative energy development tax credit.
1395          (1) As used in this section:
1396          (a) "Alternative energy entity" [is as] means the same as that term is defined in Section
1397     63M-4-502.
1398          (b) "Alternative energy project" [is as] means the same as that term is defined in
1399     Section 63M-4-502.
1400          (c) "Office" [is as defined in] means the Office of Energy Development created in
1401     Section 63M-4-401.
1402          (2) Subject to the other provisions of this section, an alternative energy entity may
1403     claim a nonrefundable tax credit for alternative energy development as provided in this section.
1404          (3) The tax credit under this section is the amount listed as the tax credit amount on a
1405     tax credit certificate that the office issues under Title 63M, Chapter 4, Part 5, Alternative
1406     Energy Development Tax Credit Act, to the alternative energy entity for the taxable year.
1407          (4) An alternative energy entity may carry forward a tax credit under this section for a
1408     period that does not exceed the next seven taxable years if:
1409          (a) the alternative energy entity is allowed to claim a tax credit under this section for a
1410     taxable year; and
1411          (b) the amount of the tax credit exceeds the alternative energy entity's tax liability
1412     under this chapter for that taxable year.
1413          (5) (a) [On or before October 1, 2017, and every five years after October 1, 2017] In
1414     accordance with Section 59-10-137, the Revenue and Taxation Interim Committee shall study
1415     the tax credit allowed by this section and make recommendations [to the Legislative
1416     Management Committee] concerning whether the tax credit should be continued, modified, or
1417     repealed.
1418          (b) [For] (i) Except as provided in Subsection (5)(b)(ii), for purposes of the study
1419     required by this Subsection (5), the office shall provide the following information, if available
1420     to the office, to the [Revenue and Taxation Interim Committee] Office of the Legislative Fiscal
1421     Analyst by electronic means:
1422          [(i)] (A) the amount of tax credit that the office grants to each alternative energy entity

1423     for each taxable year;
1424          [(ii)] (B) the new state revenues generated by each alternative energy project;
1425          [(iii)] (C) the information contained in the office's latest report [to the Legislature]
1426     under Section 63M-4-505; and
1427          [(iv)] (D) any other information that the [Revenue and Taxation Interim Committee]
1428     Office of the Legislative Fiscal Analyst requests.

1429          (ii) (A) In providing the information described in Subsection (5)(b)(i), the office shall
1430     redact information that identifies a recipient of a tax credit under this section.
1431          (B) If, notwithstanding the redactions made under Subsection (5)(b)(ii)(A), reporting
1432     the information described in Subsection (5)(b)(i) might disclose the identity of a recipient of a
1433     tax credit, the office may file a request with the Revenue and Taxation Interim Committee to
1434     provide the information described in Subsection (5)(b)(i) in the aggregate for all alternative
1435     energy entities that receive the tax credit under this section.
1436          (c) As part of the study required by this Subsection (5), the Office of the Legislative
1437     Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
1438     analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
1439     office under Subsection (5)(b).
1440          [(c)] (d) The Revenue and Taxation Interim Committee shall ensure that [its] the
1441     recommendations [under] described in Subsection (5)(a) include an evaluation of:
1442          (i) the cost of the tax credit to the state;
1443          (ii) the purpose and effectiveness of the tax credit; and
1444          (iii) the extent to which the state benefits from the tax credit.
1445          Section 18. Section 59-10-1030 is amended to read:
1446          59-10-1030. Nonrefundable alternative energy manufacturing tax credit.
1447          (1) As used in this section:
1448          (a) "Alternative energy entity" means the same as that term is defined in Section
1449     63N-2-702.
1450          (b) "Alternative energy manufacturing project" means the same as that term is defined
1451     in Section 63N-2-702.
1452          (c) "New incremental job with the state" means the same as that term is defined in

1453     Section 63N-2-702.
1454          (d) "New state revenues" means the same as that term is defined in Section 63N-2-702.
1455          (e) "Office" means the Governor's Office of Economic Development created in Section
1456     63N-1-201.
1457          (2) Subject to the other provisions of this section, an alternative energy entity may
1458     claim a nonrefundable tax credit for alternative energy manufacturing as provided in this
1459     section.
1460          (3) The tax credit under this section is the amount listed as the tax credit amount on a
1461     tax credit certificate that the office issues under Title 63N, Chapter 2, Part 7, Alternative
1462     Energy Manufacturing Tax Credit Act, to the alternative energy entity for the taxable year.
1463          (4) An alternative energy entity may carry forward a tax credit under this section for a
1464     period that does not exceed the next seven taxable years if:
1465          (a) the alternative energy entity is allowed to claim a tax credit under this section for a
1466     taxable year; and
1467          (b) the amount of the tax credit exceeds the alternative energy entity's tax liability
1468     under this chapter for that taxable year.
1469          (5) (a) [On or before October 1, 2017, and every five years after October 1, 2017] In
1470     accordance with Section 59-10-137, the Revenue and Taxation Interim Committee shall study
1471     the tax credit allowed by this section and make recommendations [to the Legislative
1472     Management Committee] concerning whether the tax credit should be continued, modified, or
1473     repealed.
1474          (b) [For] Except as provided in Subsection (5)(c), for purposes of the study required by
1475     this Subsection (5), the office shall provide the following information, if available to the office,
1476     to the [Revenue and Taxation Interim Committee] Office of the Legislative Fiscal Analyst by
1477     electronic means:
1478          (i) the amount of tax credit that the office grants to each alternative energy entity for
1479     each taxable year;
1480          (ii) the new state revenues generated by each alternative energy manufacturing project;
1481          (iii) estimates for each of the next [five] three calendar years of the following:
1482          (A) the amount of tax credits that the office will grant;
1483          (B) the amount of new state revenues that will be generated; and

1484          (C) the number of new incremental jobs within the state that will be generated;
1485          (iv) the information contained in the office's latest report [to the Legislature] under
1486     Section [63N-2-705] 63N-1-301; and
1487          (v) any other information that the [Revenue and Taxation Interim Committee] Office of
1488     the Legislative Fiscal Analyst requests.
1489          (c) (i) In providing the information described in Subsection (5)(b), the office shall
1490     redact information that identifies a recipient of a tax credit under this section.
1491          (ii) If, notwithstanding the redactions made under Subsection (5)(c)(i), reporting the
1492     information described in Subsection (5)(b) might disclose the identity of a recipient of a tax
1493     credit, the office may file a request with the Revenue and Taxation Interim Committee to
1494     provide the information described in Subsection (5)(b) in the aggregate for all alternative
1495     energy entities that receive the tax credit under this section.
1496          (d) As part of the study required by this Subsection (5), the Office of the Legislative
1497     Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
1498     analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
1499     office under Subsection (5)(b).
1500          [(c)] (e) The Revenue and Taxation Interim Committee shall ensure that [its] the
1501     recommendations [under] described in Subsection (5)(a) include an evaluation of:
1502          (i) the cost of the tax credit to the state;
1503          (ii) the purpose and effectiveness of the tax credit; and
1504          (iii) the extent to which the state benefits from the tax credit.
1505          Section 19. Section 59-10-1034 is amended to read:
1506          59-10-1034. Nonrefundable high cost infrastructure development tax credit.
1507          (1) As used in this section:
1508          (a) "High cost infrastructure project" means the same as that term is defined in Section
1509     63M-4-602.
1510          (b) "Infrastructure cost-burdened entity" means the same as that term is defined in
1511     Section 63M-4-602.
1512          (c) "Infrastructure-related revenue" means the same as that term is defined in Section
1513     63M-4-602.
1514          (d) "Office" means the Office of Energy Development created in Section 63M-4-401.

1515          (2) Subject to the other provisions of this section, a claimant, estate, or trust that is an
1516     infrastructure cost-burdened entity may claim a nonrefundable tax credit for development of a
1517     high cost infrastructure project as provided in this section.
1518          (3) The tax credit under this section is the amount listed as the tax credit amount on a
1519     tax credit certificate that the office issues under Title 63M, Chapter 4, Part 6, High Cost
1520     Infrastructure Development Tax Credit Act, to the infrastructure cost-burdened entity for the
1521     taxable year.
1522          (4) An infrastructure cost-burdened entity may carry forward a tax credit under this
1523     section for a period that does not exceed the next seven taxable years if:
1524          (a) the infrastructure cost-burdened entity is allowed to claim a tax credit under this
1525     section for a taxable year; and
1526          (b) the amount of the tax credit exceeds the infrastructure cost-burdened entity's tax
1527     liability under this chapter for that taxable year.
1528          (5) (a) [On or before October 1, 2020, and every five years after October 1, 2020] In
1529     accordance with Section 59-10-137, the Revenue and Taxation Interim Committee shall study
1530     the tax credit allowed by this section and make recommendations [to the Legislative
1531     Management Committee] concerning whether the tax credit should be continued, modified, or
1532     repealed.
1533          (b) [For] (i) Except as provided in Subsection (5)(b)(ii), for purposes of the study
1534     required by this Subsection (5), the office shall provide the following information, if available
1535     to the office, to the [Revenue and Taxation Interim Committee] Office of the Legislative Fiscal
1536     Analyst:
1537          [(i)] (A) the amount of tax credit that the office grants to each infrastructure
1538     cost-burdened entity for each taxable year;
1539          [(ii)] (B) the infrastructure-related revenue generated by each high cost infrastructure
1540     project;
1541          [(iii)] (C) the information contained in the office's latest report [to the Legislature]
1542     under Section 63M-4-505; and
1543          [(iv)] (D) any other information that the [Revenue and Taxation Interim Committee]
1544     Office of the Legislative Fiscal Analyst requests.
1545          (ii) (A) In providing the information described in Subsection (5)(b)(i), the office shall

1546     redact information that identifies a recipient of a tax credit under this section.
1547          (B) If, notwithstanding the redactions made under Subsection (5)(b)(ii)(A), reporting
1548     the information described in Subsection (5)(b)(i) might disclose the identity of a recipient of a
1549     tax credit, the office may file a request with the Revenue and Taxation Interim Committee to
1550     provide the information described in Subsection (5)(b)(i) in the aggregate for all infrastructure
1551     cost-burdened entities that receive the tax credit under this section.
1552          (c) As part of the study required by this Subsection (5), the Office of the Legislative
1553     Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
1554     analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
1555     office under Subsection (5)(b).
1556          [(c)] (d) The Revenue and Taxation Interim Committee shall ensure that the [Revenue
1557     and Taxation Interim Committee's] recommendations [under] described in Subsection (5)(a)
1558     include an evaluation of:
1559          (i) the cost of the tax credit to the state;
1560          (ii) the purpose and effectiveness of the tax credit; and
1561          (iii) the extent to which the state benefits from the tax credit.
1562          Section 20. Section 59-10-1037 is amended to read:
1563          59-10-1037. Nonrefundable enterprise zone tax credit.
1564          (1) As used in this section:
1565          (a) "Business entity" means a claimant, estate, or trust that meets the definition of
1566     "business entity" as that term is defined in Section 63N-2-202.
1567          (b) "Office" means the Governor's Office of Economic Development created in Section
1568     63N-1-201.
1569          (2) Subject to the provisions of this section, a business entity may claim a
1570     nonrefundable enterprise zone tax credit as described in Section 63N-2-213.
1571          (3) The enterprise zone tax credit under this section is the amount listed as the tax
1572     credit amount on the tax credit certificate that the office issues to the business entity for the
1573     taxable year.
1574          (4) A business entity may carry forward a tax credit under this section for a period that
1575     does not exceed the next three taxable years, if the amount of the tax credit exceeds the
1576     business entity's tax liability under this chapter for that taxable year.

1577          (5) A business entity may not claim or carry forward a tax credit available under this
1578     part for a taxable year during which the business entity has claimed the targeted business
1579     income tax credit available under Section 63N-2-305.
1580          (6) (a) [On or before October 1, 2018, and every five years after October 1, 2018] In
1581     accordance with Section 59-10-137, the Revenue and Taxation Interim Committee shall study
1582     the tax credit allowed by this section and make recommendations [to the Legislative
1583     Management Committee] concerning whether the tax credit should be continued, modified, or
1584     repealed.
1585          (b) [For] (i) Except as provided in Subsection (6)(b)(ii), for purposes of the study
1586     required by this Subsection (6), the office shall provide by electronic means the following
1587     information, if available to the office, for each calendar year to the [Revenue and Taxation
1588     Interim Committee] Office of the Legislative Fiscal Analyst:
1589          [(i)] (A) the amount of tax credits provided in each development zone;
1590          [(ii)] (B) the number of new full-time employee positions reported to obtain tax credits
1591     in each development zone;
1592          [(iii)] (C) the amount of tax credits awarded for rehabilitating a building in each
1593     development zone;
1594          [(iv)] (D) the amount of tax credits awarded for investing in a plant, equipment, or
1595     other depreciable property in each development zone;
1596          [(v)] (E) the information related to the tax credit contained in the office's latest report
1597     [to the Legislature] under Section 63N-1-301; and
1598          [(vi)] (F) other information [as requested by the Revenue and Taxation Interim
1599     Committee] that the Office of the Legislative Fiscal Analyst requests.
1600          (ii) (A) In providing the information described in Subsection (6)(b)(i), the office shall
1601     redact information that identifies a recipient of a tax credit under this section.
1602          (B) If, notwithstanding the redactions made under Subsection (6)(b)(ii)(A), reporting
1603     the information described in Subsection (6)(b)(i) might disclose the identity of a recipient of a
1604     tax credit, the office may file a request with the Revenue and Taxation Interim Committee to
1605     provide the information described in Subsection (6)(b)(i) in the aggregate for all development
1606     zones that receive the tax credit under this section.
1607          (c) As part of the study required by this Subsection (6), the Office of the Legislative

1608     Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
1609     analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
1610     office under Subsection (6)(b).
1611          [(c)] (d) The Revenue and Taxation Interim Committee shall ensure that [its] the
1612     recommendations [under] described in Subsection (6)(a) include an evaluation of:
1613          (i) the cost of the tax credit to the state;
1614          (ii) the purpose and effectiveness of the tax credit; and
1615          (iii) the extent to which the state benefits from the tax credit.
1616          Section 21. Section 59-10-1106 is amended to read:
1617          59-10-1106. Refundable renewable energy systems tax credits -- Definitions --
1618     Certification -- Rulemaking authority.
1619          (1) As used in this section:
1620          (a) "Active solar system" [has the same meaning as] means the same as that term is
1621     defined in Section 59-10-1014.
1622          (b) "Biomass system" [has the same meaning as] means the same as that term is
1623     defined in Section 59-10-1014.
1624          (c) "Commercial energy system" [has the same meaning as] means the same as that
1625     term is defined in Section 59-7-614.
1626          (d) "Commercial enterprise" [has the same meaning as] means the same as that term is
1627     defined in Section 59-7-614.
1628          (e) (i) "Commercial unit" [has the same meaning as] means the same as that term is
1629     defined in Section 59-7-614.
1630          (ii) Notwithstanding Subsection (1)(e)(i):
1631          (A) with respect to an active solar system used for agricultural water pumping or a
1632     wind system, each individual energy generating device is considered to be a commercial unit;
1633     or
1634          (B) if an energy system is the building or structure that a claimant, estate, or trust uses
1635     to transact business, a commercial unit is the complete energy system itself.
1636          (f) "Direct use geothermal system" [has the same meaning as] means the same as that
1637     term is defined in Section 59-10-1014.
1638          (g) "Geothermal electricity" [has the same meaning as] means the same as that term is

1639     defined in Section 59-10-1014.
1640          (h) "Geothermal energy" [has the same meaning as] means the same as that term is
1641     defined in Section 59-10-1014.
1642          (i) "Geothermal heat pump system" [has the same meaning as] means the same as that
1643     term is defined in Section 59-10-1014.
1644          (j) "Hydroenergy system" [has the same meaning as] means the same as that term is
1645     defined in Section 59-10-1014.
1646          (k) "Office" means the Office of Energy Development created in Section 63M-4-401.
1647          (l) "Passive solar system" [has the same meaning as] means the same as that term is
1648     defined in Section 59-10-1014.
1649          (m) "Principal recovery portion" [has the same meaning as] means the same as that
1650     term is defined in Section 59-10-1014.
1651          (n) "Wind system" [has the same meaning as] means the same as that term is defined in
1652     Section 59-10-1014.
1653          (2) A claimant, estate, or trust may claim an energy system tax credit as provided in
1654     this section against a tax due under this chapter for a taxable year.
1655          (3) (a) Subject to the other provisions of this Subsection (3), a claimant, estate, or trust
1656     may claim a refundable tax credit under this Subsection (3) with respect to a commercial
1657     energy system if:
1658          (i) the commercial energy system does not use:
1659          (A) wind, geothermal electricity, solar, or biomass equipment capable of producing a
1660     total of 660 or more kilowatts of electricity; or
1661          (B) solar equipment capable of producing 2,000 or more kilowatts of electricity;
1662          (ii) the claimant, estate, or trust purchases or participates in the financing of the
1663     commercial energy system;
1664          (iii) (A) the commercial energy system supplies all or part of the energy required by
1665     commercial units owned or used by the claimant, estate, or trust; or
1666          (B) the claimant, estate, or trust sells all or part of the energy produced by the
1667     commercial energy system as a commercial enterprise;
1668          (iv) the commercial energy system is completed and placed in service on or after
1669     January 1, 2007; and

1670          (v) the claimant, estate, or trust obtains a written certification from the office in
1671     accordance with Subsection (6).
1672          (b) (i) Subject to Subsections (3)(b)(ii) through (v), the tax credit is equal to 10% of the
1673     reasonable costs of the commercial energy system.
1674          (ii) A tax credit under this Subsection (3) may include installation costs.
1675          (iii) A claimant, estate, or trust may claim a tax credit under this Subsection (3) for the
1676     taxable year in which the commercial energy system is completed and placed in service.
1677          (iv) A tax credit under this Subsection (3) may not be carried forward or carried back.
1678          (v) The total amount of tax credit a claimant, estate, or trust may claim under this
1679     Subsection (3) may not exceed $50,000 per commercial unit.
1680          (c) (i) Subject to Subsections (3)(c)(ii) and (iii), a claimant, estate, or trust that is a
1681     lessee of a commercial energy system installed on a commercial unit may claim a tax credit
1682     under this Subsection (3) if the claimant, estate, or trust confirms that the lessor irrevocably
1683     elects not to claim the tax credit.
1684          (ii) A claimant, estate, or trust described in Subsection (3)(c)(i) may claim as a tax
1685     credit under this Subsection (3) only the principal recovery portion of the lease payments.
1686          (iii) A claimant, estate, or trust described in Subsection (3)(c)(i) may claim a tax credit
1687     under this Subsection (3) for a period that does not exceed seven taxable years after the date the
1688     lease begins, as stated in the lease agreement.
1689          (4) (a) Subject to the other provisions of this Subsection (4), a claimant, estate, or trust
1690     may claim a refundable tax credit under this Subsection (4) with respect to a commercial
1691     energy system if:
1692          (i) the commercial energy system uses wind, geothermal electricity, or biomass
1693     equipment capable of producing a total of 660 or more kilowatts of electricity;
1694          (ii) (A) the commercial energy system supplies all or part of the energy required by
1695     commercial units owned or used by the claimant, estate, or trust; or
1696          (B) the claimant, estate, or trust sells all or part of the energy produced by the
1697     commercial energy system as a commercial enterprise;
1698          (iii) the commercial energy system is completed and placed in service on or after
1699     January 1, 2007; and
1700          (iv) the claimant, estate, or trust obtains a written certification from the office in

1701     accordance with Subsection (6).
1702          (b) (i) Subject to Subsections (4)(b)(ii) and (iii), a tax credit under this Subsection (4)
1703     is equal to the product of:
1704          (A) 0.35 cents; and
1705          (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
1706          (ii) A tax credit under this Subsection (4) may be claimed for production occurring
1707     during a period of 48 months beginning with the month in which the commercial energy
1708     system is placed in commercial service.
1709          (iii) A tax credit under this Subsection (4) may not be carried forward or back.
1710          (c) A claimant, estate, or trust that is a lessee of a commercial energy system installed
1711     on a commercial unit may claim a tax credit under this Subsection (4) if the claimant, estate, or
1712     trust confirms that the lessor irrevocably elects not to claim the tax credit.
1713          (5) (a) Subject to the other provisions of this Subsection (5), a claimant, estate, or trust
1714     may claim a refundable tax credit as provided in this Subsection (5) if:
1715          (i) the claimant, estate, or trust owns a commercial energy system that uses solar
1716     equipment capable of producing a total of 660 or more kilowatts of electricity;
1717          (ii) (A) the commercial energy system supplies all or part of the energy required by
1718     commercial units owned or used by the claimant, estate, or trust; or
1719          (B) the claimant, estate, or trust sells all or part of the energy produced by the
1720     commercial energy system as a commercial enterprise;
1721          (iii) the claimant, estate, or trust does not claim a tax credit under Subsection (3);
1722          (iv) the commercial energy system is completed and placed in service on or after
1723     January 1, 2015; and
1724          (v) the claimant, estate, or trust obtains a written certification from the office in
1725     accordance with Subsection (6).
1726          (b) (i) Subject to Subsections (5)(b)(ii) and (iii), a tax credit under this Subsection (5)
1727     is equal to the product of:
1728          (A) 0.35 cents; and
1729          (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
1730          (ii) A tax credit under this Subsection (5) may be claimed for production occurring
1731     during a period of 48 months beginning with the month in which the commercial energy

1732     system is placed in commercial service.
1733          (iii) A tax credit under this Subsection (5) may not be carried forward or carried back.
1734          (c) A claimant, estate, or trust that is a lessee of a commercial energy system installed
1735     on a commercial unit may claim a tax credit under this Subsection (5) if the claimant, estate, or
1736     trust confirms that the lessor irrevocably elects not to claim the tax credit.
1737          (6) (a) Before a claimant, estate, or trust may claim a tax credit under this section, the
1738     claimant, estate, or trust shall obtain a written certification from the office.
1739          (b) The office shall issue a claimant, estate, or trust a written certification if the office
1740     determines that:
1741          (i) the claimant, estate, or trust meets the requirements of this section to receive a tax
1742     credit; and
1743          (ii) the office determines that the commercial energy system with respect to which the
1744     claimant, estate, or trust seeks to claim a tax credit:
1745          (A) has been completely installed;
1746          (B) is a viable system for saving or producing energy from renewable resources; and
1747          (C) is safe, reliable, efficient, and technically feasible to ensure that the commercial
1748     energy system uses the state's renewable and nonrenewable resources in an appropriate and
1749     economic manner.
1750          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1751     office may make rules:
1752          (i) for determining whether a commercial energy system meets the requirements of
1753     Subsection (6)(b)(ii); and
1754          (ii) for purposes of a tax credit under Subsection (3), establishing the reasonable costs
1755     of a commercial energy system, as an amount per unit of energy production.
1756          (d) A claimant, estate, or trust that obtains a written certification from the office shall
1757     retain the certification for the same time period a person is required to keep books and records
1758     under Section 59-1-1406.
1759          (7) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1760     commission may make rules to address the certification of a tax credit under this section.
1761          (8) A tax credit under this section is in addition to any tax credits provided under the
1762     laws or rules and regulations of the United States.

1763          (9) A purchaser of one or more solar units that claims a tax credit under Section
1764     59-10-1024 for the purchase of the one or more solar units may not claim a tax credit under this
1765     section for that purchase.
1766          [(10) (a) On or before October 1, 2017, and every five years after 2017, the Revenue
1767     and Taxation Interim Committee shall review each tax credit provided by this section and
1768     report its recommendations to the Legislative Management Committee concerning whether the
1769     credit should be continued, modified, or repealed.]
1770          [(b) The Revenue and Taxation Interim Committee's report under Subsection (10)(a)
1771     shall include information concerning the cost of the credit, the purpose and effectiveness of the
1772     credit, and the state's benefit from the credit.]
1773          Section 22. Section 59-10-1107 is amended to read:
1774          59-10-1107. Refundable economic development tax credit.
1775          (1) As used in this section:
1776          (a) "Business entity" means a claimant, estate, or trust that meets the definition of
1777     "business entity" as defined in Section 63N-2-103.
1778          (b) "New incremental jobs" means the same as that term is defined in Section
1779     63N-2-103.
1780          (c) "New state revenues" means the same as that term is defined in Section 63N-2-103.
1781          (d) "Office" means the Governor's Office of Economic Development.
1782          (2) Subject to the other provisions of this section, a business entity may claim a
1783     refundable tax credit for economic development.
1784          (3) The tax credit under this section is the amount listed as the tax credit amount on the
1785     tax credit certificate that the office issues to the business entity for the taxable year.
1786          (4) (a) In accordance with any rules prescribed by the commission under Subsection
1787     (4)(b), the commission shall make a refund to a business entity that claims a tax credit under
1788     this section if the amount of the tax credit exceeds the business entity's tax liability for a
1789     taxable year.
1790          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1791     commission may make rules providing procedures for making a refund to a business entity as
1792     required by Subsection (4)(a).
1793          (5) (a) [On or before October 1, 2013, and every five years after October 1, 2013] In

1794     accordance with Section 59-10-137, the Revenue and Taxation Interim Committee shall study
1795     the tax credit allowed by this section and make recommendations [to the Legislative
1796     Management Committee] concerning whether the tax credit should be continued, modified, or
1797     repealed.
1798          (b) [For] Except as provided in Subsection (5)(c), for purposes of the study required by
1799     this Subsection (5), the office shall provide the following information, if available to the office,
1800     to the Revenue and Taxation Interim Committee by electronic means:
1801          (i) the amount of tax credit the office grants to each taxpayer for each calendar year;
1802          (ii) the criteria the office uses in granting a tax credit;
1803          (iii) the new state revenues generated by each taxpayer for each calendar year;
1804          (iv) estimates for each of the next [five] three calendar years of the following:
1805          (A) the amount of tax credits that the office will grant;
1806          (B) the amount of new state revenues that will be generated; and
1807          (C) the number of new incremental jobs within the state that will be generated;
1808          (v) the information contained in the office's latest report [to the Legislature] under
1809     Section 63N-2-106; and
1810          (vi) any other information that the Revenue and Taxation Interim Committee requests.
1811          (c) (i) In providing the information described in Subsection (5)(b), the office shall
1812     redact information that identifies a recipient of a tax credit under this section.
1813          (ii) If, notwithstanding the redactions made under Subsection (5)(c)(i), reporting the
1814     information described in Subsection (5)(b) might disclose the identity of a recipient of a tax
1815     credit, the office may file a request with the Revenue and Taxation Interim Committee to
1816     provide the information described in Subsection (5)(b) in the aggregate for all taxpayers that
1817     receive the tax credit under this section.
1818          [(c)] (d) The Revenue and Taxation Interim Committee shall ensure that [its] the
1819     recommendations [under] described in Subsection (5)(a) include an evaluation of:
1820          (i) the cost of the tax credit to the state;
1821          (ii) the purpose and effectiveness of the tax credit; and
1822          (iii) the extent to which the state benefits from the tax credit.
1823          Section 23. Section 59-10-1108 is amended to read:
1824          59-10-1108. Refundable motion picture tax credit.

1825          (1) As used in this section:
1826          (a) "Motion picture company" means a claimant, estate, or trust that meets the
1827     definition of a motion picture company under Section 63N-8-102.
1828          (b) "Office" means the Governor's Office of Economic Development created in Section
1829     63N-1-201.
1830          (c) "State-approved production" [has the same meaning as] means the same as that
1831     term is defined in Section 63N-8-102.
1832          (2) For a taxable [years] year beginning on or after January 1, 2009, a motion picture
1833     company may claim a refundable tax credit for a state-approved production.
1834          (3) The tax credit under this section is the amount listed as the tax credit amount on the
1835     tax credit certificate that the office issues to a motion picture company under Section
1836     63N-8-103 for the taxable year.
1837          (4) (a) In accordance with any rules prescribed by the commission under Subsection
1838     (4)(b), the commission shall make a refund to a motion picture company that claims a tax
1839     credit under this section if the amount of the tax credit exceeds the motion picture company's
1840     tax liability for the taxable year.
1841          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1842     commission may make rules providing procedures for making a refund to a motion picture
1843     company as required by Subsection (4)(a).
1844          (5) (a) [On or before October 1, 2014, and every five years after October 1, 2014] In
1845     accordance with Section 59-10-137, the Revenue and Taxation Interim Committee shall study
1846     the tax credit allowed by this section and make recommendations [to the Legislative
1847     Management Committee] concerning whether the tax credit should be continued, modified, or
1848     repealed.
1849          (b) [For] (i) Except as provided in Subsection (5)(b)(ii), for purposes of the study
1850     required by this Subsection (5), the office shall provide the following information, if available
1851     to the office, to the [Revenue and Taxation Interim Committee] Office of the Legislative Fiscal
1852     Analyst by electronic means:
1853          [(i)] (A) the amount of tax credit the office grants to each taxpayer for each calendar
1854     year; [and]
1855          (B) estimates of the amount of tax credit that the office will grant for each of the next

1856     [five] three calendar years;
1857          [(ii)] (C) the criteria the office uses in granting a tax credit;
1858          [(iii)] (D) the dollars left in the state, as defined in Section 63N-8-102, by each motion
1859     picture company for each calendar year;
1860          [(iv)] (E) the information contained in the office's latest report [to the Legislature]
1861     under Section 63N-8-105; and
1862          [(v)] (F) any other information [requested by the Revenue and Taxation Interim
1863     Committee] that the Office of the Legislative Fiscal Analyst requests.
1864          (ii) (A) In providing the information described in Subsection (5)(b)(i), the office shall
1865     redact information that identifies a recipient of a tax credit under this section.
1866          (B) If, notwithstanding the redactions made under Subsection (5)(b)(ii)(A), reporting
1867     the information described in Subsection (5)(b)(i) might disclose the identity of a recipient of a
1868     tax credit, the office may file a request with the Revenue and Taxation Interim Committee to
1869     provide the information described in Subsection (5)(b)(i) in the aggregate for all taxpayers that
1870     receive the tax credit under this section.
1871          (c) As part of the study required by this Subsection (5), the Office of the Legislative
1872     Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
1873     analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
1874     office under Subsection (5)(b).
1875          [(c)] (d) The Revenue and Taxation Interim Committee shall ensure that [its] the
1876     recommendations [under] described in Subsection (5)(a) include an evaluation of:
1877          (i) the cost of the tax credit to the state;
1878          (ii) the effectiveness of the tax credit; and
1879          (iii) the extent to which the state benefits from the tax credit.
1880          Section 24. Section 59-13-202 is amended to read:
1881          59-13-202. Refund of tax for agricultural uses on individual income and
1882     corporate franchise and income tax returns -- Application for permit for refund --
1883     Division of Finance to pay claims -- Rules permitted to enforce part -- Penalties --
1884     Revenue and Taxation Interim Committee study.
1885          (1) As used in this section:
1886          (a) (i) Except at provided in Subsection (1)(a)(ii), "claimant" means a resident or

1887     nonresident person.
1888          (ii) "Claimant" does not include an estate or trust.
1889          (b) "Estate" means a nonresident estate or a resident estate.
1890          (c) "Refundable tax credit" or "tax credit" means a tax credit that a claimant, estate, or
1891     trust may claim:
1892          (i) as provided by statute; and
1893          (ii) regardless of whether, for the taxable year for which the claimant, estate, or trust
1894     claims the tax credit, the claimant, estate, or trust has a tax liability under:
1895          (A) Chapter 7, Corporate Franchise and Income Taxes; or
1896          (B) Chapter 10, Individual Income Tax Act.
1897          (d) "Trust" means a nonresident trust or a resident trust.
1898          (2) Any claimant, estate, or trust that purchases and uses any motor fuel within the state
1899     for the purpose of operating or propelling stationary farm engines and self-propelled farm
1900     machinery used for nonhighway agricultural uses, and that has paid the tax on the motor fuel as
1901     provided by this part, is entitled to a refund of the tax subject to the conditions and limitations
1902     provided under this part.
1903          (3) (a) A claimant, estate, or trust desiring a nonhighway agricultural use refund under
1904     this part shall claim the refund as a refundable tax credit on the tax return the claimant, estate,
1905     or trust files under:
1906          (i) Chapter 7, Corporate Franchise and Income Taxes; or
1907          (ii) Chapter 10, Individual Income Tax Act.
1908          (b) A claimant, estate, or trust not subject to filing a tax return described in Subsection
1909     (3)(a) shall obtain a permit and file claims on a calendar year basis.
1910          (c) Any claimant, estate, or trust claiming a refundable tax credit under this section is
1911     required to furnish any or all of the information outlined in this section upon request of the
1912     commission.
1913          (d) A refundable tax credit under this section is allowed only on purchases on which
1914     tax is paid during the taxable year covered by the tax return.
1915          (4) In order to obtain a permit for a refund of motor fuel tax paid, an application shall
1916     be filed containing:
1917          (a) the name of the claimant, estate, or trust;

1918          (b) the claimant's, estate's, or trust's address;
1919          (c) location and number of acres owned and operated, location and number of acres
1920     rented and operated, the latter of which shall be verified by a signed statement from the legal
1921     owner;
1922          (d) number of acres planted to each crop, type of soil, and whether irrigated or dry; and
1923          (e) make, size, and type of fuel used and power rating of each piece of equipment using
1924     fuel. If the claimant, estate, or trust is an operator of self-propelled or tractor-pulled farm
1925     machinery with which the claimant, estate, or trust works for hire doing custom jobs for other
1926     farmers, the application shall include information the commission requires and shall all be
1927     contained in, and be considered part of, the original application. The claimant, estate, or trust
1928     shall also file with the application a certificate from the county assessor showing each piece of
1929     equipment using fuel. This original application and all information contained in it constitutes a
1930     permanent file with the commission in the name of the claimant, estate, or trust.
1931          (5) A claimant, estate, or trust claiming the right to a refund of motor fuel tax paid shall
1932     file a claim with the commission by April 15 of each year for the refund for the previous
1933     calendar year. The claim shall state the name and address of the claimant, estate, or trust, the
1934     number of gallons of motor fuel purchased for nonhighway agricultural uses, and the amount
1935     paid for the motor fuel. The claimant, estate, or trust shall retain the original invoice to support
1936     the claim. No more than one claim for a tax refund may be filed annually by each user of
1937     motor fuel purchased for nonhighway agricultural uses.
1938          (6) Upon commission approval of the claim for a refund, the Division of Finance shall
1939     pay the amount found due to the claimant, estate, or trust. The total amount of claims for
1940     refunds shall be paid from motor fuel taxes.
1941          (7) The commission may refuse to accept as evidence of purchase or payment any
1942     instruments that show alteration or that fail to indicate the quantity of the purchase, the price of
1943     the motor fuel, a statement that the motor fuel is purchased for purposes other than
1944     transportation, and the date of purchase and delivery. If the commission is not satisfied with
1945     the evidence submitted in connection with the claim, the commission may reject the claim or
1946     require additional evidence.
1947          (8) A claimant, estate, or trust aggrieved by the decision of the commission with
1948     respect to a refundable tax credit or refund may file a request for agency action, requesting a

1949     hearing before the commission.
1950          (9) A claimant, estate, or trust that makes any false claim, report, or statement, as
1951     claimant, estate, trust, agent, or creditor, with intent to defraud or secure a refund to which the
1952     claimant, estate, or trust is not entitled, is subject to the criminal penalties provided under
1953     Section 59-1-401, and the commission shall initiate the filing of a complaint for alleged
1954     violations of this part. In addition to these penalties, the claimant, estate, or trust may not
1955     receive any refund as a claimant, estate, or trust or as a creditor of a claimant, estate, or trust for
1956     refund for a period of five years.
1957          (10) (a) In accordance with any rules prescribed by the commission under Subsection
1958     (10)(b), the Division of Finance shall transfer at least annually from the Transportation Fund
1959     into the Education Fund an amount equal to the amount of the refund claimed under this
1960     section.
1961          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1962     commission may make rules providing procedures for:
1963          (i) making a refund to a claimant, estate, or trust as required by Subsection (3)(a)(i);
1964          (ii) making a transfer from the Transportation Fund into the Education Fund as
1965     required by Subsection (10)(a); or
1966          (iii) enforcing this part.
1967          (11) (a) On or before November 30, 2017, and every three years after 2017, the
1968     Revenue and Taxation Interim Committee shall review the tax credit provided by this section
1969     and make recommendations concerning whether the tax credit should be continued, modified,
1970     or repealed.
1971          (b) In conducting the review required by Subsection (11)(a), the Revenue and Taxation
1972     Interim Committee shall:
1973          (i) schedule time on at least one committee agenda to conduct the review;
1974          (ii) invite state agencies, individuals, and organizations concerned with the credit under
1975     review to provide testimony;
1976          (iii) ensure that the recommendations described in this section include an evaluation of:
1977          (A) the cost of the tax credit to the state;
1978          (B) the purpose and effectiveness of the tax credit; and
1979          (C) the extent to which the state benefits from the tax credit; and

1980          (iv) undertake other review efforts as determined by the chairs of the Revenue and
1981     Taxation Interim Committee.
1982          Section 25. Section 63N-2-106 is amended to read:
1983          63N-2-106. Reports -- Posting monthly and annual reports -- Audit and study of
1984     tax credits.
1985          (1) The office shall include the following information in the annual written report
1986     described in Section 63N-1-301:
1987          (a) the office's success in attracting new commercial projects to development zones
1988     under this part and the corresponding increase in new incremental jobs;
1989          (b) how many new incremental jobs and high paying jobs are employees of a company
1990     that received tax credits under this part, including the number of employees who work for a
1991     third-party rather than directly for a company, receiving the tax credits under this part;
1992          (c) the estimated amount of tax credit commitments made by the office and the period
1993     of time over which tax credits will be paid;
1994          (d) the economic impact on the state from new state revenues and the provision of tax
1995     credits under this part;
1996          (e) the estimated costs and economic benefits of the tax credit commitments made by
1997     the office;
1998          (f) the actual costs and economic benefits of the tax credit commitments made by the
1999     office; and
2000          (g) tax credit commitments made by the office, with the associated calculation.
2001          (2) Each month, the office shall post on its website and on a state website:
2002          (a) the new tax credit commitments made by the office during the previous month; and
2003          (b) the estimated costs and economic benefits of those tax credit commitments.
2004          (3) (a) On or before November 1, 2014, and every three years after November 1, 2014,
2005     the office shall:
2006          (i) conduct an audit of the tax credits allowed under Section 63N-2-105;
2007          (ii) study the tax credits allowed under Section 63N-2-105; and
2008          (iii) make recommendations concerning whether the tax credits should be continued,
2009     modified, or repealed.
2010          (b) The audit shall include an evaluation of:

2011          (i) the cost of the tax credits;
2012          (ii) the purposes and effectiveness of the tax credits;
2013          (iii) the extent to which the state benefits from the tax credits; and
2014          (iv) the state's return on investment under this part measured by new state revenues,
2015     compared with the costs of tax credits provided and GOED's expenses in administering this
2016     part.
2017          (c) The office shall provide the results of the audit described in this Subsection (3):
2018          (i) in the written annual report described in Subsection (1); and
2019          (ii) as part of the reviews described in Sections 59-7-159 and 59-10-137.
2020          Section 26. Section 63N-2-213 is amended to read:
2021          63N-2-213. State tax credits.
2022          (1) The office shall certify a business entity's eligibility for a tax credit described in this
2023     section.
2024          (2) A business entity seeking to receive a tax credit as provided in this section shall
2025     provide the office with:
2026          (a) an application for a tax credit certificate in a form approved by the office, including
2027     a certification, by an officer of the business entity, of a signature on the application; and
2028          (b) documentation that demonstrates the business entity has met the requirements to
2029     receive the tax credit.
2030          (3) If, after review of an application and documentation provided by a business entity
2031     as described in Subsection (2), the office determines that the application and documentation are
2032     inadequate to provide a reasonable justification for authorizing the tax credit, the office shall:
2033          (a) deny the tax credit; or
2034          (b) inform the business entity that the application or documentation was inadequate
2035     and ask the business entity to submit additional documentation.
2036          (4) If, after review of an application and documentation provided by a business entity
2037     as described in Subsection (2), the office determines that the application and documentation
2038     provide reasonable justification for authorizing a tax credit, the office shall:
2039          (a) determine the amount of the tax credit to be granted to the business entity;
2040          (b) issue a tax credit certificate to the business entity; and
2041          (c) provide a duplicate copy of the tax credit certificate to the State Tax Commission.

2042          (5) A business entity may not claim a tax credit under this section unless the business
2043     entity has a tax credit certificate issued by the office.
2044          (6) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
2045     office shall make rules describing:
2046          (a) the form and content of an application for a tax credit under this section;
2047          (b) the documentation requirements for a business entity to receive a tax credit
2048     certificate under this section; and
2049          (c) administration of the program, including relevant timelines and deadlines.
2050          (7) Subject to the limitations of Subsections (8) through (10), and if the requirements
2051     of this part are met, the following nonrefundable tax credits against a tax under Title 59,
2052     Chapter 7, Corporate Franchise and Income Taxes, or Title 59, Chapter 10, Individual Income
2053     Tax Act, are applicable in an enterprise zone:
2054          (a) a tax credit of $750 may be claimed by a business entity for each new full-time
2055     employee position created within the enterprise zone;
2056          (b) an additional $500 tax credit may be claimed if the new full-time employee position
2057     created within the enterprise zone pays at least 125% of:
2058          (i) the county average monthly nonagricultural payroll wage for the respective industry
2059     as determined by the Department of Workforce Services; or
2060          (ii) if the county average monthly nonagricultural payroll wage is not available for the
2061     respective industry, the total average monthly nonagricultural payroll wage in the respective
2062     county where the enterprise zone is located;
2063          (c) an additional tax credit of $750 may be claimed if the new full-time employee
2064     position created within the enterprise zone is in a business entity that adds value to agricultural
2065     commodities through manufacturing or processing;
2066          (d) an additional tax credit of $200 may be claimed for two consecutive years for each
2067     new full-time employee position created within the enterprise zone that is filled by an
2068     employee who is insured under an employer-sponsored health insurance program if the
2069     employer pays at least 50% of the premium cost for the year for which the credit is claimed;
2070          (e) a tax credit of 25% of the first $200,000 spent on rehabilitating a building in the
2071     enterprise zone that has been vacant for two years or more; and
2072          (f) an annual investment tax credit of 10% of the first $250,000 in investment, and 5%

2073     of the next $1,000,000 qualifying investment in plant, equipment, or other depreciable
2074     property.
2075          (8) (a) Subject to the limitations of Subsection (8)(b), a business entity claiming a tax
2076     credit under Subsections (7)(a) through (d) may claim the tax credit for no more than 30
2077     full-time employee positions in a taxable year.
2078          (b) A business entity that received a tax credit for one or more new full-time employee
2079     positions under Subsections (7)(a) through (d) in a prior taxable year may claim a tax credit for
2080     a new full-time employee position in a subsequent taxable year under Subsections (7)(a)
2081     through (d) if:
2082          (i) the business entity has created a new full-time position within the enterprise zone;
2083     and
2084          (ii) the total number of full-time employee positions at the business entity at any point
2085     during the tax year for which the tax credit is being claimed is greater than the highest number
2086     of full-time employee positions that existed at the business entity in the previous three taxable
2087     years.
2088          (c) Construction jobs are not eligible for the tax credits under Subsections (7)(a)
2089     through (d).
2090          (9) If the amount of a tax credit under this section exceeds a business entity's tax
2091     liability under this chapter for a taxable year, the business entity may carry forward the amount
2092     of the tax credit exceeding the liability for a period that does not exceed the next three taxable
2093     years.
2094          (10) Tax credits under Subsections (7)(a) through (f) may not be claimed by a business
2095     entity primarily engaged in retail trade or by a public utilities business.
2096          (11) A business entity that has no employees:
2097          (a) may not claim tax credits under Subsections (7)(a) through (d); and
2098          (b) may claim tax credits under Subsections (7)(e) through (f).
2099          (12) A business entity may not claim or carry forward a tax credit available under this
2100     part for a taxable year during which the business entity has claimed the targeted business
2101     income tax credit available under Section 63N-2-305.
2102          (13) (a) On or before November 30, 2018, and every three years after 2018, the
2103     Revenue and Taxation Interim Committee shall review the tax credits provided by this section

2104     and make recommendations concerning whether the tax credits should be continued, modified,
2105     or repealed.
2106          (b) In conducting the review required by Subsection (13)(a), the Revenue and Taxation
2107     Interim Committee shall:
2108          (i) schedule time on at least one committee agenda to conduct the review;
2109          (ii) invite state agencies, individuals, and organizations concerned with the credits
2110     under review to provide testimony;
2111          (iii) ensure that the recommendations described in this section include an evaluation of:
2112          (A) the cost of the tax credits to the state;
2113          (B) the purpose and effectiveness of the tax credits; and
2114          (C) the extent to which the state benefits from the tax credits; and
2115          (iv) undertake other review efforts as determined by the chairs of the Revenue and
2116     Taxation Interim Committee.
2117          Section 27. Section 63N-2-305 is amended to read:
2118          63N-2-305. Targeted business income tax credit structure -- Duties of the local
2119     zone administrator -- Duties of the State Tax Commission -- Revenue and Taxation
2120     Interim Committee study.
2121          (1) A business applicant that is certified under Subsection 63N-2-304(3) and issued a
2122     targeted business tax credit eligibility form by the office under Subsection (8) may claim a
2123     refundable tax credit:
2124          (a) against the business applicant's tax liability under:
2125          (i) Title 59, Chapter 7, Corporate Franchise and Income Taxes; or
2126          (ii) Title 59, Chapter 10, Individual Income Tax Act; and
2127          (b) subject to requirements and limitations provided by this part.
2128          (2) The total amount of the targeted business income tax credits allowed under this part
2129     for all business applicants may not exceed $300,000 in any fiscal year.
2130          (3) (a) A targeted business income tax credit allowed under this part for each
2131     community investment project provided by a business applicant may not:
2132          (i) be claimed by a business applicant for more than seven consecutive taxable years
2133     from the date the business applicant first qualifies for a targeted business income tax credit on
2134     the basis of a community investment project;

2135          (ii) be carried forward or carried back;
2136          (iii) exceed $100,000 in total amount for the community investment project period
2137     during which the business applicant is eligible to claim a targeted business income tax credit;
2138     or
2139          (iv) exceed in any year that the targeted business income tax credit is claimed the lesser
2140     of:
2141          (A) 50% of the maximum amount allowed by the local zone administrator; or
2142          (B) the allocated cap amount determined by the office under Subsection 63N-2-304(5).
2143          (b) A business applicant may apply to the local zone administrator to claim a targeted
2144     business income tax credit allowed under this part for each community investment project
2145     provided by the business applicant as the basis for its eligibility for a targeted business income
2146     tax credit.
2147          (4) Subject to other provisions of this section, the local zone administrator shall
2148     establish for each business applicant that qualifies for a targeted business income tax credit:
2149          (a) criteria for maintaining eligibility for the targeted business income tax credit that
2150     are reasonably related to the community investment project that is the basis for the business
2151     applicant's targeted business income tax credit;
2152          (b) the maximum amount of the targeted business income tax credit the business
2153     applicant is allowed for the community investment project period;
2154          (c) the time period over which the total amount of the targeted business income tax
2155     credit may be claimed;
2156          (d) the maximum amount of the targeted business income tax credit that the business
2157     applicant will be allowed to claim each year; and
2158          (e) requirements for a business applicant to report to the local zone administrator
2159     specifying:
2160          (i) the frequency of the business applicant's reports to the local zone administrator,
2161     which shall be made at least quarterly; and
2162          (ii) the information needed by the local zone administrator to monitor the business
2163     applicant's compliance with this Subsection (4) or Section 63N-2-304 that shall be included in
2164     the report.
2165          (5) In accordance with Subsection (4)(e), a business applicant allowed a targeted

2166     business income tax credit under this part shall report to the local zone administrator.
2167          (6) The amount of a targeted business income tax credit that a business applicant is
2168     allowed to claim for a taxable year shall be reduced by 25% for each quarter in which the office
2169     or the local zone administrator determines that the business applicant has failed to comply with
2170     a requirement of Subsection (3) or Section 63N-2-304.
2171          (7) The office or local zone administrator may audit a business applicant to ensure:
2172          (a) eligibility for a targeted business income tax credit; or
2173          (b) compliance with Subsection (3) or Section 63N-2-304.
2174          (8) The office shall issue a targeted business income tax credit eligibility form in a
2175     form jointly developed by the State Tax Commission and the office no later than 30 days after
2176     the last day of the business applicant's taxable year showing:
2177          (a) the maximum amount of the targeted business income tax credit that the business
2178     applicant is eligible for that taxable year;
2179          (b) any reductions in the maximum amount of the targeted business income tax credit
2180     because of failure to comply with a requirement of Subsection (3) or Section 63N-2-304;
2181          (c) the allocated cap amount that the business applicant may claim for that taxable
2182     year; and
2183          (d) the actual amount of the targeted business income tax credit that the business
2184     applicant may claim for that taxable year.
2185          (9) (a) A business applicant shall retain the targeted business income tax credit
2186     eligibility form provided by the office under this Subsection (9).
2187          (b) The State Tax Commission may audit a business applicant to ensure:
2188          (i) eligibility for a targeted business income tax credit; or
2189          (ii) compliance with Subsection (3) or Section 63N-2-304.
2190          (10) (a) On or before November 30, 2018, and every three years after 2018, the
2191     Revenue and Taxation Interim Committee shall review the tax credit provided by this section
2192     and make recommendations concerning whether the tax credit should be continued, modified,
2193     or repealed.
2194          (b) In conducting the review required by Subsection (10)(a), the Revenue and Taxation
2195     Interim Committee shall:
2196          (i) schedule time on at least one committee agenda to conduct the review;

2197          (ii) invite state agencies, individuals, and organizations concerned with the credit under
2198     review to provide testimony;
2199          (iii) ensure that the recommendations described in this section include an evaluation of:
2200          (A) the cost of the tax credit to the state;
2201          (B) the purpose and effectiveness of the tax credit; and
2202          (C) the extent to which the state benefits from the tax credit; and
2203          (iv) undertake other review efforts as determined by the chairs of the Revenue and
2204     Taxation Interim Committee.
2205          Section 28. Section 63N-2-810 is amended to read:
2206          63N-2-810. Reports on tax credit certificates -- Study by legislative committees.
2207          [(1)] The office shall include the following information in the annual written report
2208     described in Section 63N-1-301:
2209          [(a)] (1) the total amount listed on tax credit certificates the office issues under this
2210     part;
2211          [(b)] (2) the criteria that the office uses in prioritizing the issuance of tax credits
2212     amongst tax credit applicants under this part; and
2213          [(c)] (3) the economic impact on the state related to providing tax credits under this
2214     part.
2215          [(2) (a) On or before November 1, 2016, and every five years after November 1, 2016,
2216     the Revenue and Taxation Interim Committee shall:]
2217          [(i) study the tax credit allowed under Section 59-10-1025; and]
2218          [(ii) make recommendations concerning whether the tax credit should be continued,
2219     modified, or repealed.]
2220          [(b) The study under Subsection (2)(a) shall include an evaluation of:]
2221          [(i) the cost of the tax credit under Section 59-10-1025;]
2222          [(ii) the purposes and effectiveness of the tax credit; and]
2223          [(iii) the extent to which the state benefits from the tax credit.]
2224          [(c) For purposes of the study required by this Subsection (2), the office shall provide
2225     the following information to the Revenue and Taxation Interim Committee by electronic
2226     means:]
2227          [(i) the amount of tax credits that the office grants to each eligible business entity for

2228     each taxable year;]
2229          [(ii) the amount of eligible new state tax revenues generated by each eligible product or
2230     project;]
2231          [(iii) estimates for each of the next five calendar years of the following:]
2232          [(A) the amount of tax credits that the office will grant;]
2233          [(B) the amount of eligible new state tax revenues that will be generated; and]
2234          [(C) the number of new incremental jobs within the state that will be generated;]
2235          [(iv) the information contained in the office's latest report to the Legislature under
2236     Section 63N-2-705; and]
2237          [(v) any other information that the Revenue and Taxation Interim Committee requests.]
2238          Section 29. Effective date.
2239          If approved by two-thirds of all the members elected to each house, this bill takes effect
2240     upon approval by the governor, or the day following the constitutional time limit of Utah
2241     Constitution, Article VII, Section 8, without the governor's signature, or in the case of a veto,
2242     the date of veto override.






Legislative Review Note
Office of Legislative Research and General Counsel