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H.B. 53

This document includes House Floor Amendments incorporated into the bill on Tue, Jan 25, 2005 at 2:57 PM by chopkin. -->              1     

TAX TREATMENT OF PERSONAL PROPERTY

             2     
2005 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Sponsor: LaWanna Lou Shurtliff

             5     
             6      LONG TITLE
             7      General Description:
             8          This bill amends the Motor Vehicles Act, the Property Tax Act, the Corporate
             9      Franchise and Income Taxes chapter, and the Individual Income Tax Act to address the
             10      property tax treatment of motor homes.
             11      Highlighted Provisions:
             12          This bill:
             13          .    defines terms;
             14          .    specifies the uniform fees that are received by a city library fund;
             15          .    reduces uniform statewide fees on motor homes required to be registered with the
             16      state to a rate of:
             17              .    1.25% of the value of a motor home, beginning January 1, 2006; and
             18              .    1% of the value of a motor home, beginning January 1, 2008;
             19          .    provides for the collection of uniform statewide fees;
             20          .    provides that the uniform statewide fees on motor homes shall be H. [ imposed ]
             20a      assessed .H at the
             21      H. [ time of registration and renewal of registration ] same time and in the same manner as ad
             21a      valorem personal property taxes .H ;
             22          .    addresses the appeals process for personal property;
             23          .    provides that for purposes of the corporate franchise and income tax credits and
             24      individual income tax credits for renewable energy systems, a residential unit does
             25      not include motor homes subject to uniform statewide fees;


             26          .    grants rulemaking authority to the State Tax Commission; and
             27          .    makes technical changes.


             28      Monies Appropriated in this Bill:
             29          None
             30      Other Special Clauses:
             31          This bill takes effect on January 1, 2006.
             32      Utah Code Sections Affected:
             33      AMENDS:
             34          9-7-401, as last amended by Chapter 13, Laws of Utah 1998
             35          41-1a-222, as last amended by Chapter 322, Laws of Utah 1998
             36          59-2-405, as last amended by Chapter 12, Laws of Utah 2001, First Special Session
             37          59-2-405.1, as last amended by Chapter 12, Laws of Utah 2001, First Special Session
             38          59-2-406, as last amended by Chapters 109 and 322, Laws of Utah 1998
             39          59-2-407, as last amended by Chapter 207, Laws of Utah 1999
             40          59-2-924, as last amended by Chapter 122, Laws of Utah 2003
             41          59-2-1005, as last amended by Chapter 146, Laws of Utah 1994
             42          59-7-614, as enacted by Chapter 6, Laws of Utah 2001, First Special Session
             43          59-10-134, as enacted by Chapter 6, Laws of Utah 2001, First Special Session
             44      ENACTS:
             45          59-2-405.2, Utah Code Annotated 1953
             46     
             47      Be it enacted by the Legislature of the state of Utah:
             48          Section 1. Section 9-7-401 is amended to read:
             49           9-7-401. Tax for establishment and maintenance of public library -- City library
             50      fund.
             51          (1) A city governing body may establish and maintain a public library.
             52          (2) For this purpose, cities may levy annually a tax not to exceed .001 of taxable value
             53      of taxable property in the city. The tax is in addition to all taxes levied by cities and is not
             54      limited by the levy limitation imposed on cities by law. However, if bonds are issued for
             55      purchasing a site, or constructing or furnishing a building, then taxes sufficient for the payment
             56      of the bonds and any interest may be levied.
             57          (3) The taxes described in Subsection (2) shall:
             58          (a) be levied and collected in the same manner as other general taxes of the city; and


             59      [shall]
             60          (b) constitute a fund to be known as the city library fund.
             61          (4) The city library fund shall receive a portion of:
             62          (a) the uniform fee imposed by Section 59-2-404 in accordance with the procedures
             63      established in Section 59-2-404 ;
             64          (b) the statewide uniform fee [on tangible personal property] imposed by Section
             65      59-2-405 in accordance with the procedures established in Subsection 59-2-405 (5)[.];
             66          (c) the statewide uniform fee imposed by Section 59-2-405.1 in accordance with the
             67      procedures established in Section 59-2-405.1 ; and
             68          (d) the uniform statewide fee imposed by Section 59-2-405.2 in accordance with the
             69      procedures established in Section 59-2-405.2 .
             70          Section 2. Section 41-1a-222 is amended to read:
             71           41-1a-222. Application for multiyear registration -- Payment of taxes -- Penalties.
             72          (1) The owner of any intrastate fleet of commercial vehicles which is based in the state
             73      may apply to the commission for registration in accordance with this section.
             74          (a) The application shall be made on a form prescribed by the commission.
             75          (b) Upon payment of required fees and meeting other requirements prescribed by the
             76      commission, the division shall issue, to each vehicle for which application has been made, a
             77      multiyear license plate and registration card.
             78          (i) The license plate decal and the registration card shall bear an expiration date fixed
             79      by the division and are valid until ownership of the vehicle to which they are issued is
             80      transferred by the applicant or until the expiration date, whichever comes first.
             81          (ii) An annual renewal application must be made by the owner if registration
             82      identification has been issued on an annual installment fee basis and the required fees must be
             83      paid on an annual basis.
             84          (iii) License plates and registration cards issued pursuant to this section are valid for an
             85      eight-year period, commencing with the year of initial application in this state.
             86          (c) When application for registration or renewal is made on an installment payment
             87      basis, the applicant shall submit acceptable evidence of a surety bond in a form, and with a
             88      surety, approved by the commission and in an amount equal to the total annual fees required
             89      for all vehicles registered to the applicant in accordance with this section.


             90          (2) Each vehicle registered as part of a fleet of commercial vehicles must be titled in
             91      the name of the fleet.
             92          (3) Each owner who registers fleets pursuant to this section shall pay the taxes or in
             93      lieu fees otherwise due pursuant to:
             94          (a) Section 41-1a-206 ;
             95          (b) Section 41-1a-207 ;
             96          (c) Subsection 41-1a-301 (11);
             97          [(c)] (d) Section 59-2-405.1 ; or
             98          [(d) Subsection 41-1a-301 (11).]
             99          (e) Section 59-2-405.2 .
             100          (4) An owner who fails to comply with the provisions of this section is subject to the
             101      penalties in Section 41-1a-1301 and, if the commission so determines, will result in the loss of
             102      the privileges granted in this section.
             103          Section 3. Section 59-2-405 is amended to read:
             104           59-2-405. Uniform fee on tangible personal property required to be registered
             105      with the state -- Distribution of revenues -- Appeals.
             106          (1) The property described in Subsection (2), except Subsections (2)(b)(ii) and (iii), is
             107      exempt from ad valorem property taxes pursuant to Utah Constitution Article XIII, Section
             108      [14] 2, Subsection (6).
             109          (2) (a) Except as provided in Subsection (2)(b), there is levied as provided in this part a
             110      statewide uniform fee in lieu of the ad valorem tax on:
             111          (i) motor vehicles required to be registered with the state that weigh 12,001 pounds or
             112      more;
             113          (ii) motorcycles as defined in Section 41-1a-102 that are required to be registered with
             114      the state;
             115          (iii) watercraft required to be registered with the state;
             116          (iv) recreational vehicles required to be registered with the state; and
             117          (v) all other tangible personal property required to be registered with the state before it
             118      is used on a public highway, on a public waterway, on public land, or in the air.
             119          (b) The following tangible personal property is exempt from the statewide uniform fee
             120      imposed by this section:


             121          (i) aircraft;
             122          (ii) vintage vehicles as defined in Section 41-21-1 ;
             123          (iii) state-assessed commercial vehicles;
             124          (iv) tangible personal property subject to a uniform fee imposed by:
             125          (A) Section 59-2-405.1 ; [and] or
             126          (B) Section 59-2-405.2 ; and
             127          (v) personal property that is exempt from state or county ad valorem property taxes
             128      under the laws of this state or of the federal government.
             129          (3) Beginning on January 1, 1999, the uniform fee is 1.5% of the fair market value of
             130      the personal property, as established by the commission.
             131          (4) Notwithstanding Section 59-2-407 , property subject to the uniform fee that is
             132      brought into the state and is required to be registered in Utah shall, as a condition of
             133      registration, be subject to the uniform fee unless all property taxes or uniform fees imposed by
             134      the state of origin have been paid for the current calendar year.
             135          (5) (a) The revenues collected in each county from the uniform fee shall be distributed
             136      by the county to each taxing entity in which the property described in Subsection (2) is located
             137      in the same proportion in which revenue collected from ad valorem real property tax is
             138      distributed.
             139          (b) Each taxing entity shall distribute the revenues received under Subsection (5)(a) in
             140      the same proportion in which revenue collected from ad valorem real property tax is
             141      distributed.
             142          (6) [Appeals of the valuation of] An appeal relating to the uniform fee imposed on the
             143      tangible personal property described in Subsection (2) shall be filed pursuant to Section
             144      59-2-1005 .
             145          Section 4. Section 59-2-405.1 is amended to read:
             146           59-2-405.1. Uniform fee on certain vehicles weighing 12,000 pounds or less --
             147      Distribution of revenues -- Appeals.
             148          (1) The property described in Subsection (2), except Subsection (2)(b)(ii), is exempt
             149      from ad valorem property taxes pursuant to Utah Constitution Article XIII, Section [14] 2,
             150      Subsection (6).
             151          (2) (a) Except as provided in Subsection (2)(b), there is levied as provided in this part a


             152      statewide uniform fee in lieu of the ad valorem tax on:
             153          (i) motor vehicles as defined in Section 41-1a-102 that:
             154          (A) are required to be registered with the state; and
             155          (B) weigh 12,000 pounds or less; and
             156          (ii) state-assessed commercial vehicles required to be registered with the state that
             157      weigh 12,000 pounds or less.
             158          (b) The following tangible personal property is exempt from the statewide uniform fee
             159      imposed by this section:
             160          (i) aircraft;
             161          (ii) vintage vehicles as defined in Section 41-21-1 ;
             162          (iii) tangible personal property subject to [the] a uniform fee imposed by:
             163          (A) Section 59-2-405 ; [and] or
             164          (B) Section 59-2-405.2 ; and
             165          (iv) tangible personal property that is exempt from state or county ad valorem property
             166      taxes under the laws of this state or of the federal government.
             167          (3)(a) Except as provided in Subsection (3)(b), beginning on January 1, 1999, the
             168      uniform fee for purposes of this section is as follows:
             169               Age of Vehicle                     Uniform Fee
             170              12 or more years                        $10
             171              9 or more years but less than 12 years            $50
             172              6 or more years but less than 9 years                $80
             173              3 or more years but less than 6 years                $110
             174              Less than 3 years                        $150
             175          (b) Notwithstanding Subsection (3)(a), beginning on September 1, 2001, for a motor
             176      vehicle issued a temporary sports event registration certificate in accordance with Section
             177      41-3-306 , the uniform fee for purposes of this section is $5 for the event period specified on the
             178      temporary sports event registration certificate regardless of the age of the motor vehicle.
             179          (4) Notwithstanding Section 59-2-407 , property subject to the uniform fee that is
             180      brought into the state and is required to be registered in Utah shall, as a condition of
             181      registration, be subject to the uniform fee unless all property taxes or uniform fees imposed by
             182      the state of origin have been paid for the current calendar year.


             183          (5) (a) The revenues collected in each county from the uniform fee shall be distributed
             184      by the county to each taxing entity in which the property described in Subsection (2) is located
             185      in the same proportion in which revenue collected from ad valorem real property tax is
             186      distributed.
             187          (b) Each taxing entity shall distribute the revenues received under Subsection (5)(a) in
             188      the same proportion in which revenue collected from ad valorem real property tax is
             189      distributed.
             190          [(6) Appeals of the valuation of the tangible personal property described in Subsection
             191      (2) shall be filed pursuant to Section 59-2-1005 .]
             192          Section 5. Section 59-2-405.2 is enacted to read:
             193          59-2-405.2. Uniform statewide fee on motor homes -- Distribution of revenues.
             194          (1) For purposes of this section, "motor home" means:
             195          (a) a motor home, as defined in Section 13-14-102 , that is required to be registered
             196      with the state; or
             197          (b) a self-propelled vehicle that is:
             198          (i) modified for primary use as a temporary dwelling for travel, recreational, or
             199      vacation use; and
             200          (ii) required to be registered with the state.
             201          (2) In accordance with Utah Constitution Article XIII, Section 2, Subsection (6),
             202      beginning on January 1, 2006, a motor home is:
             203          (a) exempt from the tax imposed by Section 59-2-103 ; and
             204          (b) in lieu of the tax imposed by Section 59-2-103 , subject to a uniform statewide fee
             205      as provided in Subsection (3).
             206          (3) The uniform statewide fee described in Subsection (2)(b) is:
             207          (a) beginning on January 1, 2006, and ending December 31, 2007, 1.25% of the fair
             208      market value of the motor home, as established by the commission; and
             209          (b) beginning on January 1, 2008, 1% of the fair market value of the motor home, as
             210      established by the commission.
             211          (4) Notwithstanding Section 59-2-407 , a motor home subject to the uniform statewide
             212      fee imposed by this section that is brought into the state shall, as a condition of registration, be
             213      subject to the uniform statewide fee unless all property taxes or uniform fees imposed by the


             214      state of origin have been paid for the current calendar year.
             215          (5) (a) Each county shall distribute the revenue collected by the county from the
             216      uniform statewide fee imposed by this section to each taxing entity in which each motor home
             217      subject to the uniform statewide fee is located in the same proportion in which revenue
             218      collected from the ad valorem property tax is distributed.
             219          (b) Each taxing entity described in Subsection (5)(a) that receives revenue from the
             220      uniform statewide fee imposed by this section shall distribute the revenue in the same
             221      proportion in which revenue collected from the ad valorem property tax is distributed.
             222          (6) An appeal relating to the uniform statewide fee imposed on a motor home by this
             223      section shall be filed pursuant to Section 59-2-1005 .
             224          Section 6. Section 59-2-406 is amended to read:
             225           59-2-406. Collection of uniform fees and other motor vehicle fees.
             226          (1) (a) For the purposes of efficiency in the collection of the uniform fee required by
             227      this section, the commission shall enter into a contract for the collection of the uniform fees
             228      required under Sections 59-2-405 [and], 59-2-405.1 , and 59-2-405.2 , and certain fees required
             229      by Title 41, Motor Vehicles.
             230          (b) The contract required by this section shall, at the county's option, provide for one of
             231      the following collection agreements:
             232          (i) the collection by the commission of:
             233          (A) the uniform fees required under Sections 59-2-405 [and], 59-2-405.1 , and
             234      59-2-405.2 ; and
             235          (B) all [Title 41] fees listed in Subsection (1)(c); or
             236          (ii) the collection by the county of:
             237          (A) the uniform fees required under Sections 59-2-405 [and], 59-2-405.1 , and
             238      59-2-405.2 ; and
             239          (B) all [Title 41] fees listed in Subsection (1)(c).
             240          (c) [The Title 41] For purposes of Subsections (1)(b)(i)(B) and (1)(b)(ii)(B), the fees
             241      that are subject to the contractual agreement required by this section are the following fees
             242      imposed by Title 41, Motor Vehicles:
             243          (i) registration fees for vehicles, mobile homes, manufactured homes, boats, and
             244      off-highway vehicles, with the exception of fleet and proportional registration;


             245          (ii) title fees for vehicles, mobile homes, manufactured homes, boats, and off-highway
             246      vehicles;
             247          (iii) plate fees for vehicles;
             248          (iv) permit fees; and
             249          (v) impound fees.
             250          (d) A county may change the election it makes pursuant to Subsection (1)(b) by
             251      providing written notice of the change to the commission at least 18 months before the change
             252      shall take effect.
             253          (2) The contract shall provide that the party contracting to perform services shall:
             254          (a) be responsible for the collection of:
             255          (i) the uniform fees under Sections 59-2-405 [and], 59-2-405.1 , and 59-2-405 .2; and
             256          (ii) [the applicable Title 41] any fees described in Subsection (1)(c) as agreed to in the
             257      contract;
             258          (b) utilize the documents and forms, guidelines, practices, and procedures that meet the
             259      contract specifications;
             260          (c) meet the performance standards and comply with applicable training requirements
             261      specified in the rules made under Subsection (8)(a); and
             262          (d) be subject to a penalty of 1/2 the difference between the reimbursement fee
             263      specified under Subsection (3) and the reimbursement fee for fiscal year 1997-98 if
             264      performance is below the performance standards specified in the rules made under Subsection
             265      (8)(a).
             266          (3) (a) The commission shall recommend a reimbursement fee for collecting the fees as
             267      provided in Subsection (2)(a), except that the commission may not collect a reimbursement fee
             268      on a state-assessed commercial vehicle described in Subsection 59-2-405.1 (2)(a)(ii).
             269          (b) The reimbursement fee shall be based on two dollars per standard unit for the first
             270      5,000 standard units in each county and one dollar per standard unit for all other standard units
             271      and shall be annually adjusted by the commission beginning July 1, 1999.
             272          (c) The adjustment shall be equal to any increase in the Consumer Price Index for all
             273      urban consumers, prepared by the United States Bureau of Labor Statistics, during the
             274      preceding calendar year.
             275          (d) The reimbursement fees under this Subsection (3) shall be appropriated by the


             276      Legislature.
             277          (4) All counties that elect to collect the uniform [fee] fees described in Subsection
             278      (1)(b)(ii)(A) and any other [Title 41] fees described in Subsection (1)(c) as provided by
             279      contract shall be subject to similar contractual terms.
             280          (5) The party performing the collection services by contract shall use appropriate
             281      automated systems software and equipment compatible with the system used by the other
             282      contracting party in order to ensure the integrity of the current motor vehicle data base and
             283      county tax systems, or successor data bases and systems.
             284          (6) If the county elects not to collect the uniform [fee and the Title 41] fees described
             285      in Subsection (1)(b)(ii)(A) and the fees described in Subsection (1)(c):
             286          (a) the commission shall:
             287          (i) collect the uniform [fee and Title 41] fees described in Subsection (1)(b)(ii)(A) and
             288      the fees described in Subsection (1)(c) in each county or regional center as negotiated by the
             289      counties with the commission in accordance with the requirements of this section; and
             290          (ii) provide information to the county in a format and media consistent with the
             291      county's requirements; and
             292          (b) the county shall pay the commission a reimbursement fee as provided in Subsection
             293      (3).
             294          (7) This section shall not limit the authority given to the county in Section 59-2-1302 .
             295          (8) (a) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
             296      the commission shall make rules specifying the performance standards and applicable training
             297      requirements for all contracts required by this section.
             298          (b) Beginning on July 1, 1998, each new contract entered into under this section shall
             299      be subject to the rules made under Subsection (8)(a).
             300          Section 7. Section 59-2-407 is amended to read:
             301           59-2-407. Administration of uniform fees.
             302          (1) (a) Except as provided in Subsection 59-2-405 (4) H. or 59-2-405.2(4) .H , the
             302a      uniform fee authorized in
             303      Sections 59-2-404 H. [ and ] , .H 59-2-405 H. , and 59-2-405.2 .H shall be assessed at the
             303a      same time and in the same manner as
             304      ad valorem personal property taxes under Chapter 2, Part 13, Collection of Taxes, except that
             305      in listing personal property subject to the uniform fee with real property as permitted by
             306      Section 59-2-1302 , the assessor or, if this duty has been reassigned in an ordinance under


             307      Section 17-16-5.5 , the treasurer shall list only the amount of the uniform fee due, and not the
             308      taxable value of the property subject to the uniform fee.
             309          (b) Except as provided in Subsection [ 59-2-405 ] 59-2-405.1 (4), the uniform fee
             310      [authorized in] imposed by Section 59-2-405.1 shall be assessed at the time of:
             311          (i) registration as defined in Section 41-1a-102 ; and
             312          (ii) renewal of registration.
             313           H. [ (c) Except as provided in Subsection 59-2-405.2 (4), the uniform statewide fee imposed
             314      by Section 59-2-405.2 shall be assessed at the time of:
             315          (i) registration as defined in Section 41-1a-102 ; and
             316          (ii) renewal of a registration.
] .H

             317          (2) The remedies for nonpayment of the uniform fees authorized by Sections 59-2-404 ,
             318      59-2-405 , [and] 59-2-405.1 , and 59-2-405.2 shall be the same as those provided in Chapter 2,
             319      Part 13, Collection of Taxes, for nonpayment of ad valorem personal property taxes.
             320          Section 8. Section 59-2-924 is amended to read:
             321           59-2-924. Report of valuation of property to county auditor and commission --
             322      Transmittal by auditor to governing bodies -- Certified tax rate -- Rulemaking authority
             323      -- Adoption of tentative budget.
             324          (1) (a) Before June 1 of each year, the county assessor of each county shall deliver to
             325      the county auditor and the commission the following statements:
             326          (i) a statement containing the aggregate valuation of all taxable property in each taxing
             327      entity; and
             328          (ii) a statement containing the taxable value of any additional personal property
             329      estimated by the county assessor to be subject to taxation in the current year.
             330          (b) The county auditor shall, on or before June 8, transmit to the governing body of
             331      each taxing entity:
             332          (i) the statements described in Subsections (1)(a)(i) and (ii);
             333          (ii) an estimate of the revenue from personal property;
             334          (iii) the certified tax rate; and
             335          (iv) all forms necessary to submit a tax levy request.
             336          (2) (a) (i) The "certified tax rate" means a tax rate that will provide the same ad
             337      valorem property tax revenues for a taxing entity as were budgeted by that taxing entity for the


             338      prior year.
             339          (ii) For purposes of this Subsection (2), "ad valorem property tax revenues" do not
             340      include:
             341          (A) collections from redemptions;
             342          (B) interest; and
             343          (C) penalties.
             344          (iii) Except as provided in Subsection (2)(a)(v), the certified tax rate shall be calculated
             345      by dividing the ad valorem property tax revenues budgeted for the prior year by the taxing
             346      entity by the taxable value established in accordance with Section 59-2-913 .
             347          (iv) (A) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking
             348      Act, the commission shall make rules determining the calculation of ad valorem property tax
             349      revenues budgeted by a taxing entity.
             350          (B) For purposes of Subsection (2)(a)(iv)(A), ad valorem property tax revenues
             351      budgeted by a taxing entity shall be calculated in the same manner as budgeted property tax
             352      revenues are calculated for purposes of Section 59-2-913 .
             353          (v) The certified tax rates for the taxing entities described in this Subsection (2)(a)(v)
             354      shall be calculated as follows:
             355          (A) except as provided in Subsection (2)(a)(v)(B), for new taxing entities the certified
             356      tax rate is zero;
             357          (B) for each municipality incorporated on or after July 1, 1996, the certified tax rate is:
             358          (I) in a county of the first, second, or third class, the levy imposed for municipal-type
             359      services under Sections 17-34-1 and 17-36-9 ; and
             360          (II) in a county of the fourth, fifth, or sixth class, the levy imposed for general county
             361      purposes and such other levies imposed solely for the municipal-type services identified in
             362      Section 17-34-1 and Subsection 17-36-3 (22);
             363          (C) for debt service voted on by the public, the certified tax rate shall be the actual levy
             364      imposed by that section, except that the certified tax rates for the following levies shall be
             365      calculated in accordance with Section 59-2-913 and this section:
             366          (I) school leeways provided for under Sections 11-2-7 , 53A-16-110 , 53A-17a-125 ,
             367      53A-17a-127 , 53A-17a-134 , 53A-17a-143 , 53A-17a-145 , and 53A-21-103 ; and
             368          (II) levies to pay for the costs of state legislative mandates or judicial or administrative


             369      orders under Section 59-2-906.3 .
             370          (vi) (A) A judgment levy imposed under Section 59-2-1328 or Section 59-2-1330 shall
             371      be established at that rate which is sufficient to generate only the revenue required to satisfy
             372      one or more eligible judgments, as defined in Section 59-2-102 .
             373          (B) The ad valorem property tax revenue generated by the judgment levy shall not be
             374      considered in establishing the taxing entity's aggregate certified tax rate.
             375          (b) (i) For the purpose of calculating the certified tax rate, the county auditor shall use
             376      the taxable value of property on the assessment roll.
             377          (ii) For purposes of Subsection (2)(b)(i), the taxable value of property on the
             378      assessment roll does not include new growth as defined in Subsection (2)(b)(iii).
             379          (iii) "New growth" means:
             380          (A) the difference between the increase in taxable value of the taxing entity from the
             381      previous calendar year to the current year; minus
             382          (B) the amount of an increase in taxable value described in Subsection (2)(b)(iv).
             383          (iv) Subsection (2)(b)(iii)(B) applies to the following increases in taxable value:
             384          (A) the amount of increase to locally assessed real property taxable values resulting
             385      from factoring, reappraisal, or any other adjustments; or
             386          (B) the amount of an increase in the taxable value of property assessed by the
             387      commission under Section 59-2-201 resulting from a change in the method of apportioning the
             388      taxable value prescribed by:
             389          (I) the Legislature;
             390          (II) a court;
             391          (III) the commission in an administrative rule; or
             392          (IV) the commission in an administrative order.
             393          (c) Beginning January 1, 1997, if a taxing entity receives increased revenues from
             394      uniform fees on tangible personal property under Section 59-2-404 , 59-2-405 , [or] 59-2-405.1 ,
             395      or 59-2-405.2 as a result of any county imposing a sales and use tax under Chapter 12, Part 11,
             396      County Option Sales and Use Tax, the taxing entity shall decrease its certified tax rate to offset
             397      the increased revenues.
             398          (d) (i) Beginning July 1, 1997, if a county has imposed a sales and use tax under
             399      Chapter 12, Part 11, County Option Sales and Use Tax, the county's certified tax rate shall be:


             400          (A) decreased on a one-time basis by the amount of the estimated sales and use tax
             401      revenue to be distributed to the county under Subsection 59-12-1102 (3); and
             402          (B) increased by the amount necessary to offset the county's reduction in revenue from
             403      uniform fees on tangible personal property under Section 59-2-404 , 59-2-405 , H. [ or ] .H
             403a      59-2-405.1 H. , or 59-2-405.2 .H as
             404      a result of the decrease in the certified tax rate under Subsection (2)(d)(i)(A).
             405          (ii) The commission shall determine estimates of sales and use tax distributions for
             406      purposes of Subsection (2)(d)(i).
             407          (e) Beginning January 1, 1998, if a municipality has imposed an additional resort
             408      communities sales tax under Section 59-12-402 , the municipality's certified tax rate shall be
             409      decreased on a one-time basis by the amount necessary to offset the first 12 months of
             410      estimated revenue from the additional resort communities sales and use tax imposed under
             411      Section 59-12-402 .
             412          (f) For the calendar year beginning on January 1, 1999, and ending on December 31,
             413      1999, a taxing entity's certified tax rate shall be adjusted by the amount necessary to offset the
             414      adjustment in revenues from uniform fees on tangible personal property under Section
             415      59-2-405.1 as a result of the adjustment in uniform fees on tangible personal property under
             416      Section 59-2-405.1 enacted by the Legislature during the 1998 Annual General Session.
             417          (g) For purposes of Subsections (2)(h) through (j):
             418          (i) "1998 actual collections" means the amount of revenues a taxing entity actually
             419      collected for the calendar year beginning on January 1, 1998, under Section 59-2-405 for:
             420          (A) motor vehicles required to be registered with the state that weigh 12,000 pounds or
             421      less; and
             422          (B) state-assessed commercial vehicles required to be registered with the state that
             423      weigh 12,000 pounds or less.
             424          (ii) "1999 actual collections" means the amount of revenues a taxing entity actually
             425      collected for the calendar year beginning on January 1, 1999, under Section 59-2-405.1 .
             426          (h) For the calendar year beginning on January 1, 2000, the commission shall make the
             427      following adjustments:
             428          (i) the commission shall make the adjustment described in Subsection (2)(i)(i) if, for
             429      the calendar year beginning on January 1, 1999, a taxing entity's 1998 actual collections were
             430      greater than the sum of:


             431          (A) the taxing entity's 1999 actual collections; and
             432          (B) any adjustments the commission made under Subsection (2)(f);
             433          (ii) the commission shall make the adjustment described in Subsection (2)(i)(ii) if, for
             434      the calendar year beginning on January 1, 1999, a taxing entity's 1998 actual collections were
             435      greater than the taxing entity's 1999 actual collections, but the taxing entity's 1998 actual
             436      collections were less than the sum of:
             437          (A) the taxing entity's 1999 actual collections; and
             438          (B) any adjustments the commission made under Subsection (2)(f); and
             439          (iii) the commission shall make the adjustment described in Subsection (2)(i)(iii) if, for
             440      the calendar year beginning on January 1, 1999, a taxing entity's 1998 actual collections were
             441      less than the taxing entity's 1999 actual collections.
             442          (i) (i) For purposes of Subsection (2)(h)(i), the commission shall increase a taxing
             443      entity's certified tax rate under this section and a taxing entity's certified revenue levy under
             444      Section 59-2-906.1 by the amount necessary to offset the difference between:
             445          (A) the taxing entity's 1998 actual collections; and
             446          (B) the sum of:
             447          (I) the taxing entity's 1999 actual collections; and
             448          (II) any adjustments the commission made under Subsection (2)(f).
             449          (ii) For purposes of Subsection (2)(h)(ii), the commission shall decrease a taxing
             450      entity's certified tax rate under this section and a taxing entity's certified revenue levy under
             451      Section 59-2-906.1 by the amount necessary to offset the difference between:
             452          (A) the sum of:
             453          (I) the taxing entity's 1999 actual collections; and
             454          (II) any adjustments the commission made under Subsection (2)(f); and
             455          (B) the taxing entity's 1998 actual collections.
             456          (iii) For purposes of Subsection (2)(h)(iii), the commission shall decrease a taxing
             457      entity's certified tax rate under this section and a taxing entity's certified revenue levy under
             458      Section 59-2-906.1 by the amount of any adjustments the commission made under Subsection
             459      (2)(f).
             460          (j) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, for
             461      purposes of Subsections (2)(f) through (i), the commission may make rules establishing the


             462      method for determining a taxing entity's 1998 actual collections and 1999 actual collections.
             463          (k) (i) (A) For fiscal year 2000, the certified tax rate of each county required under
             464      Subsection 17-34-1 (4)(a) to provide advanced life support and paramedic services to the
             465      unincorporated area of the county shall be decreased by the amount necessary to reduce
             466      revenues in that fiscal year by an amount equal to the difference between the amount the county
             467      budgeted in its 2000 fiscal year budget for advanced life support and paramedic services
             468      countywide and the amount the county spent during fiscal year 2000 for those services,
             469      excluding amounts spent from a municipal services fund for those services.
             470          (B) For fiscal year 2001, the certified tax rate of each county to which Subsection
             471      (2)(k)(i)(A) applies shall be decreased by the amount necessary to reduce revenues in that fiscal
             472      year by the amount that the county spent during fiscal year 2000 for advanced life support and
             473      paramedic services countywide, excluding amounts spent from a municipal services fund for
             474      those services.
             475          (ii) (A) A city or town located within a county of the first class to which Subsection
             476      (2)(k)(i) applies may increase its certified tax rate by the amount necessary to generate within
             477      the city or town the same amount of revenues as the county would collect from that city or
             478      town if the decrease under Subsection (2)(k)(i) did not occur.
             479          (B) An increase under Subsection (2)(k)(ii)(A), whether occurring in a single fiscal
             480      year or spread over multiple fiscal years, is not subject to the notice and hearing requirements
             481      of Sections 59-2-918 and 59-2-919 .
             482          (l) (i) The certified tax rate of each county required under Subsection 17-34-1 (4)(b) to
             483      provide detective investigative services to the unincorporated area of the county shall be
             484      decreased:
             485          (A) in fiscal year 2001 by the amount necessary to reduce revenues in that fiscal year
             486      by at least $4,400,000; and
             487          (B) in fiscal year 2002 by the amount necessary to reduce revenues in that fiscal year
             488      by an amount equal to the difference between $9,258,412 and the amount of the reduction in
             489      revenues under Subsection (2)(l)(i)(A).
             490          (ii) (A) (I) Beginning with municipal fiscal year 2002, a city or town located within a
             491      county to which Subsection (2)(l)(i) applies may increase its certified tax rate to generate
             492      within the city or town the same amount of revenue as the county would have collected during


             493      county fiscal year 2001 from within the city or town except for Subsection (2)(l)(i)(A).
             494          (II) Beginning with municipal fiscal year 2003, a city or town located within a county
             495      to which Subsection (2)(l)(i) applies may increase its certified tax rate to generate within the
             496      city or town the same amount of revenue as the county would have collected during county
             497      fiscal year 2002 from within the city or town except for Subsection (2)(l)(i)(B).
             498          (B) (I) Except as provided in Subsection (2)(l)(ii)(B)(II), an increase in the city or
             499      town's certified tax rate under Subsection (2)(l)(ii)(A), whether occurring in a single fiscal year
             500      or spread over multiple fiscal years, is subject to the notice and hearing requirements of
             501      Sections 59-2-918 and 59-2-919 .
             502          (II) For an increase under this Subsection (2)(l)(ii) that generates revenue that does not
             503      exceed the same amount of revenue as the county would have collected except for Subsection
             504      (2)(l)(i), the requirements of Sections 59-2-918 and 59-2-919 do not apply if the city or town:
             505          (Aa) publishes a notice that meets the size, type, placement, and frequency
             506      requirements of Section 59-2-919 , reflects that the increase is a shift of a tax from one imposed
             507      by the county to one imposed by the city or town, and explains how the revenues from the tax
             508      increase will be used; and
             509          (Bb) holds a public hearing on the tax shift that may be held in conjunction with the
             510      city or town's regular budget hearing.
             511          (m) (i) This Subsection (2)(m) applies to each county that:
             512          (A) establishes a countywide special service district under Title 17A, Chapter 2, Part
             513      13, Utah Special Service District Act, to provide jail service, as provided in Subsection
             514      17A-2-1304 (1)(a)(x); and
             515          (B) levies a property tax on behalf of the special service district under Section
             516      17A-2-1322 .
             517          (ii) (A) The certified tax rate of each county to which this Subsection (2)(m) applies
             518      shall be decreased by the amount necessary to reduce county revenues by the same amount of
             519      revenues that will be generated by the property tax imposed on behalf of the special service
             520      district.
             521          (B) Each decrease under Subsection (2)(m)(ii)(A) shall occur contemporaneously with
             522      the levy on behalf of the special service district under Section 17A-2-1322 .
             523          (n) (i) As used in this Subsection (2)(n):


             524          (A) "Annexing county" means a county whose unincorporated area is included within a
             525      fire district by annexation.
             526          (B) "Annexing municipality" means a municipality whose area is included within a fire
             527      district by annexation.
             528          (C) "Equalized fire protection tax rate" means the tax rate that results from:
             529          (I) calculating, for each participating county and each participating municipality, the
             530      property tax revenue necessary to cover all of the costs associated with providing fire
             531      protection, paramedic, and emergency services:
             532          (Aa) for a participating county, in the unincorporated area of the county; and
             533          (Bb) for a participating municipality, in the municipality; and
             534          (II) adding all the amounts calculated under Subsection (2)(n)(i)(C)(I) for all
             535      participating counties and all participating municipalities and then dividing that sum by the
             536      aggregate taxable value of the property, as adjusted in accordance with Section 59-2-913 :
             537          (Aa) for participating counties, in the unincorporated area of all participating counties;
             538      and
             539          (Bb) for participating municipalities, in all the participating municipalities.
             540          (D) "Fire district" means a county service area under Title 17A, Chapter 2, Part 4,
             541      County Service Area Act, in the creation of which an election was not required under
             542      Subsection 17B-2-214 (3)(c).
             543          (E) "Fire protection tax rate" means:
             544          (I) for an annexing county, the property tax rate that, when applied to taxable property
             545      in the unincorporated area of the county, generates enough property tax revenue to cover all the
             546      costs associated with providing fire protection, paramedic, and emergency services in the
             547      unincorporated area of the county; and
             548          (II) for an annexing municipality, the property tax rate that generates enough property
             549      tax revenue in the municipality to cover all the costs associated with providing fire protection,
             550      paramedic, and emergency services in the municipality.
             551          (F) "Participating county" means a county whose unincorporated area is included
             552      within a fire district at the time of the creation of the fire district.
             553          (G) "Participating municipality" means a municipality whose area is included within a
             554      fire district at the time of the creation of the fire district.


             555          (ii) In the first year following creation of a fire district, the certified tax rate of each
             556      participating county and each participating municipality shall be decreased by the amount of
             557      the equalized fire protection tax rate.
             558          (iii) In the first year following annexation to a fire district, the certified tax rate of each
             559      annexing county and each annexing municipality shall be decreased by the fire protection tax
             560      rate.
             561          (iv) Each tax levied under this section by a fire district shall be considered to be levied
             562      by:
             563          (A) each participating county and each annexing county for purposes of the county's
             564      tax limitation under Section 59-2-908 ; and
             565          (B) each participating municipality and each annexing municipality for purposes of the
             566      municipality's tax limitation under Section 10-5-112 , for a town, or Section 10-6-133 , for a
             567      city.
             568          (3) (a) On or before June 22, each taxing entity shall annually adopt a tentative budget.
             569          (b) If the taxing entity intends to exceed the certified tax rate, it shall notify the county
             570      auditor of:
             571          (i) its intent to exceed the certified tax rate; and
             572          (ii) the amount by which it proposes to exceed the certified tax rate.
             573          (c) The county auditor shall notify all property owners of any intent to exceed the
             574      certified tax rate in accordance with Subsection 59-2-919 (2).
             575          (4) (a) The taxable value for the base year under Subsection 17B-4-102 (4) shall be
             576      reduced for any year to the extent necessary to provide a redevelopment agency established
             577      under Title 17B, Chapter 4, Redevelopment Agencies Act, with approximately the same
             578      amount of money the agency would have received without a reduction in the county's certified
             579      tax rate if:
             580          (i) in that year there is a decrease in the certified tax rate under Subsection (2)(c) or
             581      (2)(d)(i);
             582          (ii) the amount of the decrease is more than 20% of the county's certified tax rate of the
             583      previous year; and
             584          (iii) the decrease results in a reduction of the amount to be paid to the agency under
             585      Section 17B-4-1003 or 17B-4-1004 .


             586          (b) The base taxable value under Subsection 17B-4-102 (4) shall be increased in any
             587      year to the extent necessary to provide a redevelopment agency with approximately the same
             588      amount of money as the agency would have received without an increase in the certified tax
             589      rate that year if:
             590          (i) in that year the base taxable value under Subsection 17B-4-102 (4) is reduced due to
             591      a decrease in the certified tax rate under Subsection (2)(c) or (2)(d)(i); and
             592          (ii) The certified tax rate of a city, school district, or special district increases
             593      independent of the adjustment to the taxable value of the base year.
             594          (c) Notwithstanding a decrease in the certified tax rate under Subsection (2)(c) or
             595      (2)(d)(i), the amount of money allocated and, when collected, paid each year to a
             596      redevelopment agency established under Title 17B, Chapter 4, Redevelopment Agencies Act,
             597      for the payment of bonds or other contract indebtedness, but not for administrative costs, may
             598      not be less than that amount would have been without a decrease in the certified tax rate under
             599      Subsection (2)(c) or (2)(d)(i).
             600          Section 9. Section 59-2-1005 is amended to read:
             601           59-2-1005. Procedures for appeal of personal property valuation -- Time for
             602      appeal -- Hearing -- Decision -- Appeal to commission.
             603          (1) [The] For personal property assessed by a county assessor in accordance with
             604      Section 59-2-301 , the county legislative body shall include with the signed statement required
             605      by Section 59-2-306 , a notice of procedures for an appeal [of any] relating to the value of the
             606      personal property [valuation with each tax notice]. If personal property is subject to a fee in
             607      lieu of tax or the uniform tax under Article XIII, Sec. [14] 2, Utah Constitution, and the fee or
             608      tax is based upon the value of the property, the basis of the value may be appealed to the
             609      commission.
             610          (2) [Any] For the personal property described in Subsection (1), a taxpayer [dissatisfied
             611      with the taxable value of the taxpayer's personal property] may make an appeal relating to the
             612      value of the personal property by filing an application with the county legislative body no later
             613      than 30 days after the mailing of the tax notice.
             614          (3) (a) After giving reasonable notice, the county legislative body shall hear [the] an
             615      appeal filed in accordance with Subsection (2) and render a written decision.
             616          (b) The written decision described in Subsection (3)(a) shall be rendered no later than


             617      60 days after receipt of the appeal.
             618          (4) If any taxpayer is dissatisfied with [the] a decision [of] rendered in accordance with
             619      Subsection (3) by the county legislative body, the taxpayer may file an appeal with the
             620      commission [as established] in accordance with Section 59-2-1006 .
             621          (5) For personal property assessed by the commission in accordance with Section
             622      59-2-201 , a taxpayer may make an appeal relating to the personal property in accordance with
             623      Section 59-2-1007 .
             624          Section 10. Section 59-7-614 is amended to read:
             625           59-7-614. Renewable energy systems tax credit -- Definitions -- Limitations --
             626      State tax credit in addition to allowable federal credits -- Certification -- Rulemaking
             627      authority -- Reimbursement of Uniform School Fund.
             628          (1) As used in this section:
             629          (a) "Active solar system":
             630          (i) means a system of equipment capable of collecting and converting incident solar
             631      radiation into thermal, mechanical, or electrical energy, and transferring these forms of energy
             632      by a separate apparatus to storage or to the point of use; and
             633          (ii) includes water heating, space heating or cooling, and electrical or mechanical
             634      energy generation.
             635          (b) "Biomass system" means any system of apparatus and equipment capable of
             636      converting organic plant, wood, or waste products into electrical and thermal energy and
             637      transferring these forms of energy by a separate apparatus to the point of use or storage.
             638          (c) "Business entity" means any sole proprietorship, estate, trust, partnership,
             639      association, corporation, cooperative, or other entity under which business is conducted or
             640      transacted.
             641          (d) "Commercial energy system" means any active solar, passive solar, wind,
             642      hydroenergy, or biomass system used to supply energy to a commercial unit or as a commercial
             643      enterprise.
             644          (e) "Commercial enterprise" means a business entity whose purpose is to produce
             645      electrical, mechanical, or thermal energy for sale from a commercial energy system.
             646          (f) (i) "Commercial unit" means any building or structure which a business entity uses
             647      to transact its business except as provided in Subsection (1)(f)(ii); and


             648          (ii) (A) in the case of an active solar system used for agricultural water pumping or a
             649      wind system, each individual energy generating device shall be a commercial unit; and
             650          (B) if an energy system is the building or structure which a business entity uses to
             651      transact its business, a commercial unit is the complete energy system itself.
             652          (g) "Hydroenergy system" means a system of apparatus and equipment capable of
             653      intercepting and converting kinetic water energy into electrical or mechanical energy and
             654      transferring this form of energy by separate apparatus to the point of use or storage.
             655          (h) "Individual taxpayer" means any person who is a taxpayer as defined in Section
             656      59-10-103 and an individual as defined in Section 59-10-103 .
             657          (i) "Office of Energy and Resource Planning" means the Office of Energy and
             658      Resource Planning, Department of Natural Resources.
             659          (j) "Passive solar system":
             660          (i) means a direct thermal system which utilizes the structure of a building and its
             661      operable components to provide for collection, storage, and distribution of heating or cooling
             662      during the appropriate times of the year by utilizing the climate resources available at the site;
             663      and
             664          (ii) includes those portions and components of a building that are expressly designed
             665      and required for the collection, storage, and distribution of solar energy.
             666          (k) "Residential energy system" means any active solar, passive solar, wind, or
             667      hydroenergy system used to supply energy to or for any residential unit.
             668          (l) "Residential unit" means any house, condominium, apartment, or similar dwelling
             669      unit which serves as a dwelling for a person, group of persons, or a family but does not include
             670      property subject to [the fees in lieu of the ad valorem tax] a fee under:
             671          (i) Section 59-2-404 ;
             672          (ii) Section 59-2-405 ; [or]
             673          (iii) Section 59-2-405.1 [.]; or
             674          (iv) Section 59-2-405.2 .
             675          (m) "Wind system" means a system of apparatus and equipment capable of intercepting
             676      and converting wind energy into mechanical or electrical energy and transferring these forms of
             677      energy by a separate apparatus to the point of use or storage.
             678          (2) (a) (i) For taxable years beginning on or after January 1, 2001, but beginning on or


             679      before December 31, 2006, a business entity that purchases and completes or participates in the
             680      financing of a residential energy system to supply all or part of the energy required for a
             681      residential unit owned or used by the business entity and situated in Utah is entitled to a tax
             682      credit as provided in this Subsection (2)(a).
             683          (ii) (A) A business entity is entitled to a tax credit equal to 25% of the costs of a
             684      residential energy system installed with respect to each residential unit it owns or uses,
             685      including installation costs, against any tax due under this chapter for the taxable year in which
             686      the energy system is completed and placed in service.
             687          (B) The total amount of the credit under this Subsection (2)(a) may not exceed $2,000
             688      per residential unit.
             689          (C) The credit under this Subsection (2)(a) is allowed for any residential energy system
             690      completed and placed in service on or after January 1, 2001, but on or before December 31,
             691      2006.
             692          (iii) If a business entity sells a residential unit to an individual taxpayer prior to making
             693      a claim for the tax credit under this Subsection (2)(a), the business entity may:
             694          (A) assign its right to this tax credit to the individual taxpayer; and
             695          (B) if the business entity assigns its right to the tax credit to an individual taxpayer
             696      under Subsection (2)(a)(iii)(A), the individual taxpayer may claim the tax credit as if the
             697      individual taxpayer had completed or participated in the costs of the residential energy system
             698      under Section 59-10-134 .
             699          (b) (i) For taxable years beginning on or after January 1, 2001, but beginning on or
             700      before December 31, 2006, a business entity that purchases or participates in the financing of a
             701      commercial energy system is entitled to a tax credit as provided in this Subsection (2)(b) if:
             702          (A) the commercial energy system supplies all or part of the energy required by
             703      commercial units owned or used by the business entity; or
             704          (B) the business entity sells all or part of the energy produced by the commercial
             705      energy system as a commercial enterprise.
             706          (ii) (A) A business entity is entitled to a tax credit equal to 10% of the costs of any
             707      commercial energy system installed, including installation costs, against any tax due under this
             708      chapter for the taxable year in which the commercial energy system is completed and placed in
             709      service.


             710          (B) The total amount of the credit under this Subsection (2)(b) may not exceed $50,000
             711      per commercial unit.
             712          (C) The credit under this Subsection (2)(b) is allowed for any commercial energy
             713      system completed and placed in service on or after January 1, 2001, but on or before December
             714      31, 2006.
             715          (iii) A business entity that leases a commercial energy system installed on a
             716      commercial unit is eligible for the tax credit under this Subsection (2)(b) if the lessee can
             717      confirm that the lessor irrevocably elects not to claim the credit.
             718          (iv) Only the principal recovery portion of the lease payments, which is the cost
             719      incurred by a business entity in acquiring a commercial energy system, excluding interest
             720      charges and maintenance expenses, is eligible for the tax credit under this Subsection (2)(b).
             721          (v) A business entity that leases a commercial energy system is eligible to use the tax
             722      credit under this Subsection (2)(b) for a period no greater than seven years from the initiation
             723      of the lease.
             724          (c) (i) A tax credit under this section may be claimed for the taxable year in which the
             725      energy system is completed and placed in service.
             726          (ii) Additional energy systems or parts of energy systems may be claimed for
             727      subsequent years.
             728          (iii) If the amount of a tax credit under this section exceeds a business entity's tax
             729      liability under this chapter for a taxable year, the amount of the credit exceeding the liability
             730      may be carried over for a period which does not exceed the next four taxable years.
             731          (3) (a) The tax credits provided for under Subsection (2) are in addition to any tax
             732      credits provided under the laws or rules and regulations of the United States.
             733          (b) (i) The Office of Energy and Resource Planning may promulgate standards for
             734      residential and commercial energy systems that cover the safety, reliability, efficiency, leasing,
             735      and technical feasibility of the systems to ensure that the systems eligible for the tax credit use
             736      the state's renewable and nonrenewable energy resources in an appropriate and economic
             737      manner.
             738          (ii) A tax credit may not be taken under Subsection (2) until the Office of Energy and
             739      Resource Planning has certified that the energy system has been completely installed and is a
             740      viable system for saving or production of energy from renewable resources.


             741          (c) The Office of Energy and Resource Planning and the commission are authorized to
             742      promulgate rules in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking
             743      Act, which are necessary to implement this section.
             744          (d) The Uniform School Fund shall be reimbursed by transfers from the General Fund
             745      for any credits taken under this section.
             746          Section 11. Section 59-10-134 is amended to read:
             747           59-10-134. Renewable energy systems tax credit -- Definitions -- Individual tax
             748      credit -- Limitations -- Business tax credit -- Limitations -- State tax credit in addition to
             749      allowable federal credits -- Certification -- Rulemaking authority -- Reimbursement of
             750      Uniform School Fund.
             751          (1) As used in this part:
             752          (a) "Active solar system":
             753          (i) means a system of equipment capable of collecting and converting incident solar
             754      radiation into thermal, mechanical, or electrical energy, and transferring these forms of energy
             755      by a separate apparatus to storage or to the point of use; and
             756          (ii) includes water heating, space heating or cooling, and electrical or mechanical
             757      energy generation.
             758          (b) "Biomass system" means any system of apparatus and equipment capable of
             759      converting organic plant, wood, or waste products into electrical and thermal energy and
             760      transferring these forms of energy by a separate apparatus to the point of use or storage.
             761          (c) "Business entity" means any sole proprietorship, estate, trust, partnership,
             762      association, corporation, cooperative, or other entity under which business is conducted or
             763      transacted.
             764          (d) "Commercial energy system" means any active solar, passive solar, wind,
             765      hydroenergy, or biomass system used to supply energy to a commercial unit or as a commercial
             766      enterprise.
             767          (e) "Commercial enterprise" means a business entity whose purpose is to produce
             768      electrical, mechanical, or thermal energy for sale from a commercial energy system.
             769          (f) (i) "Commercial unit" means any building or structure which a business entity uses
             770      to transact its business, except as provided in Subsection (1)(f)(ii); and
             771          (ii) (A) in the case of an active solar system used for agricultural water pumping or a


             772      wind system, each individual energy generating device shall be a commercial unit; and
             773          (B) if an energy system is the building or structure which a business entity uses to
             774      transact its business, a commercial unit is the complete energy system itself.
             775          (g) "Hydroenergy system" means a system of apparatus and equipment capable of
             776      intercepting and converting kinetic water energy into electrical or mechanical energy and
             777      transferring this form of energy by separate apparatus to the point of use or storage.
             778          (h) "Individual taxpayer" means any person who is a taxpayer as defined in Section
             779      59-10-103 and an individual as defined in Section 59-10-103 .
             780          (i) "Office of Energy and Resource Planning" means the Office of Energy and
             781      Resource Planning, Department of Natural Resources.
             782          (j) "Passive solar system":
             783          (i) means a direct thermal system which utilizes the structure of a building and its
             784      operable components to provide for collection, storage, and distribution of heating or cooling
             785      during the appropriate times of the year by utilizing the climate resources available at the site;
             786      and
             787          (ii) includes those portions and components of a building that are expressly designed
             788      and required for the collection, storage, and distribution of solar energy.
             789          (k) "Residential energy system" means any active solar, passive solar, wind, or
             790      hydroenergy system used to supply energy to or for any residential unit.
             791          (l) "Residential unit" means any house, condominium, apartment, or similar dwelling
             792      unit which serves as a dwelling for a person, group of persons, or a family but does not include
             793      property subject to [the fees in lieu of the ad valorem tax] a fee under:
             794          (i) Section 59-2-404 ;
             795          (ii) Section 59-2-405 ; [or]
             796          (iii) Section 59-2-405.1 [.]; or
             797          (iv) Section 59-2-405.2 .
             798          (m) "Wind system" means a system of apparatus and equipment capable of intercepting
             799      and converting wind energy into mechanical or electrical energy and transferring these forms of
             800      energy by a separate apparatus to the point of use or storage.
             801          (2) For taxable years beginning on or after January 1, 2001, but beginning on or before
             802      December 31, 2006, any individual taxpayer may claim a tax credit as provided in this section


             803      if:
             804          (a) the individual taxpayer purchases and completes or participates in the financing of a
             805      residential energy system to supply all or part of the energy for the individual taxpayer's
             806      residential unit in the state; or
             807          (b) (i) a business entity sells a residential unit to an individual taxpayer prior to making
             808      a claim for a tax credit under Subsection (6) or Section 59-7-614 ; and
             809          (ii) the business entity assigns its right to the tax credit to the individual taxpayer as
             810      provided in Subsection (6)(c) or Subsection 59-7-614 (2)(a)(iii).
             811          (3) (a) An individual taxpayer meeting the requirements of Subsection (2) is entitled to
             812      a tax credit equal to 25% of the costs of the energy system, including installation costs, against
             813      any income tax liability of the individual taxpayer under this chapter for the taxable year in
             814      which the residential energy system is completed and placed in service.
             815          (b) The total amount of the credit under this section may not exceed $2,000 per
             816      residential unit.
             817          (c) The credit under this section is allowed for any residential energy system completed
             818      and placed in service on or after January 1, 2001, but on or before December 31, 2006.
             819          (4) (a) The tax credit provided for in this section shall be claimed in the return for the
             820      taxable year in which the energy system is completed and placed in service.
             821          (b) Additional residential energy systems or parts of residential energy systems may be
             822      similarly claimed in returns for subsequent taxable years as long as the total amount claimed
             823      does not exceed $2,000 per residential unit.
             824          (c) If the amount of the tax credit under this section exceeds the income tax liability of
             825      the individual taxpayer for that taxable year, then the amount not used may be carried over for
             826      a period which does not exceed the next four taxable years.
             827          (5) (a) Individual taxpayers who lease a residential energy system installed on a
             828      residential unit are eligible for the residential energy tax credits if the lessee can confirm that
             829      the lessor irrevocably elects not to claim the state tax credit.
             830          (b) Only the principal recovery portion of the lease payments, which is the cost
             831      incurred by the taxpayer in acquiring the residential energy system excluding interest charges
             832      and maintenance expenses, is eligible for the tax credits.
             833          (c) Individual taxpayers who lease residential energy systems are eligible to use the tax


             834      credits for a period no greater than seven years from the initiation of the lease.
             835          (6) (a) A business entity that purchases and completes or participates in the financing
             836      of a residential energy system to supply all or part of the energy required for a residential unit
             837      owned or used by the business entity and situated in Utah is entitled to a tax credit as provided
             838      in this Subsection (6).
             839          (b) (i) For taxable years beginning on or after January 1, 2001, but beginning on or
             840      before December 31, 2006, a business entity is entitled to a tax credit equal to 25% of the costs
             841      of a residential energy system installed with respect to each residential unit it owns or uses,
             842      including installation costs, against any tax due under this chapter for the taxable year in which
             843      the energy system is completed and placed in service.
             844          (ii) The total amount of the credit under this Subsection (6) may not exceed $2,000 per
             845      residential unit.
             846          (iii) The credit under this Subsection (6) is allowed for any residential energy system
             847      completed and placed in service on or after January 1, 2001, but on or before December 31,
             848      2006.
             849          (c) If a business entity sells a residential unit to an individual taxpayer prior to making
             850      a claim for the tax credit under this Subsection (6), the business entity may:
             851          (i) assign its right to this tax credit to the individual taxpayer; and
             852          (ii) if the business entity assigns its right to the tax credit to an individual taxpayer
             853      under Subsection (6)(c)(i), the individual taxpayer may claim the tax credit as if the individual
             854      taxpayer had completed or participated in the costs of the residential energy system under this
             855      section.
             856          (7) (a) A business entity that purchases or participates in the financing of a commercial
             857      energy system is entitled to a tax credit as provided in this Subsection (7) if:
             858          (i) the commercial energy system supplies all or part of the energy required by
             859      commercial units owned or used by the business entity; or
             860          (ii) the business entity sells all or part of the energy produced by the commercial
             861      energy system as a commercial enterprise.
             862          (b) (i) A business entity is entitled to a tax credit equal to 10% of the costs of any
             863      commercial energy system installed, including installation costs, against any tax due under this
             864      chapter for the taxable year in which the commercial energy system is completed and placed in


             865      service.
             866          (ii) The total amount of the credit under this Subsection (7) may not exceed $50,000
             867      per commercial unit.
             868          (iii) The credit under this Subsection (7) is allowed for any commercial energy system
             869      completed and placed in service on or after January 1, 2001, but on or before December 31,
             870      2006.
             871          (c) A business entity that leases a commercial energy system installed on a commercial
             872      unit is eligible for the tax credit under this Subsection (7) if the lessee can confirm that the
             873      lessor irrevocably elects not to claim the credit.
             874          (d) Only the principal recovery portion of the lease payments, which is the cost
             875      incurred by a business entity in acquiring a commercial energy system, excluding interest
             876      charges and maintenance expenses, is eligible for the tax credit under this Subsection (7).
             877          (e) A business entity that leases a commercial energy system is eligible to use the tax
             878      credit under this Subsection (7) for a period no greater than seven years from the initiation of
             879      the lease.
             880          (8) (a) A tax credit under this section may be claimed for the taxable year in which the
             881      energy system is completed and placed in service.
             882          (b) Additional energy systems or parts of energy systems may be claimed for
             883      subsequent years.
             884          (c) If the amount of a tax credit under this section exceeds a business entity's tax
             885      liability under this chapter for a taxable year, the amount of the credit exceeding the liability
             886      may be carried over for a period which does not exceed the next four taxable years.
             887          (9) The tax credits provided for under this section are in addition to any tax credits
             888      provided under the laws or rules and regulations of the United States.
             889          (10) (a) The Office of Energy and Resource Planning may promulgate standards for
             890      residential and commercial energy systems that cover the safety, reliability, efficiency, leasing,
             891      and technical feasibility of the systems to ensure that the systems eligible for the tax credit use
             892      the state's renewable and nonrenewable energy resources in an appropriate and economic
             893      manner.
             894          (b) A tax credit may not be taken under this section until the Office of Energy and
             895      Resource Planning has certified that the energy system has been completely installed and is a


             896      viable system for saving or production of energy from renewable resources.
             897          (11) The Office of Energy and Resource Planning and the commission are authorized
             898      to promulgate rules in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking
             899      Act, which are necessary to implement this section.
             900          (12) The Uniform School Fund shall be reimbursed by transfers from the General Fund
             901      for any credits taken under this section.
             902          Section 12. Effective date.
             903          This bill takes effect on January 1, 2006.




Legislative Review Note
    as of 12-14-04 6:59 AM


Based on a limited legal review, this legislation has not been determined to have a high
probability of being held unconstitutional.

Office of Legislative Research and General Counsel


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