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7 LONG TITLE
8 Committee Note:
9 The Revenue and Taxation Interim Committee recommended this bill.
10 General Description:
11 This bill addresses renewable energy tax credits.
12 Highlighted Provisions:
13 This bill:
14 ▸ defines terms;
15 ▸ addresses renewable energy tax credits; and
16 ▸ makes technical and conforming changes.
17 Money Appropriated in this Bill:
18 None
19 Other Special Clauses:
20 This bill provides a special effective date.
21 This bill provides for retrospective operation.
22 Utah Code Sections Affected:
23 AMENDS:
24 59-2-102, as last amended by Laws of Utah 2014, Chapters 65 and 411
25 59-7-614, as last amended by Laws of Utah 2014, Chapter 407
26 59-10-1014, as last amended by Laws of Utah 2012, Chapter 37
27 59-10-1106, as last amended by Laws of Utah 2012, Chapter 37
28
29 Be it enacted by the Legislature of the state of Utah:
30 Section 1. Section 59-2-102 is amended to read:
31 59-2-102. Definitions.
32 As used in this chapter and title:
33 (1) "Aerial applicator" means aircraft or rotorcraft used exclusively for the purpose of
34 engaging in dispensing activities directly affecting agriculture or horticulture with an
35 airworthiness certificate from the Federal Aviation Administration certifying the aircraft or
36 rotorcraft's use for agricultural and pest control purposes.
37 (2) "Air charter service" means an air carrier operation which requires the customer to
38 hire an entire aircraft rather than book passage in whatever capacity is available on a scheduled
39 trip.
40 (3) "Air contract service" means an air carrier operation available only to customers
41 who engage the services of the carrier through a contractual agreement and excess capacity on
42 any trip and is not available to the public at large.
43 (4) "Aircraft" is as defined in Section 72-10-102.
44 (5) (a) Except as provided in Subsection (5)(b), "airline" means an air carrier that:
45 (i) operates:
46 (A) on an interstate route; and
47 (B) on a scheduled basis; and
48 (ii) offers to fly one or more passengers or cargo on the basis of available capacity on a
49 regularly scheduled route.
50 (b) "Airline" does not include an:
51 (i) air charter service; or
52 (ii) air contract service.
53 (6) "Assessment roll" means a permanent record of the assessment of property as
54 assessed by the county assessor and the commission and may be maintained manually or as a
55 computerized file as a consolidated record or as multiple records by type, classification, or
56 categories.
57 (7) (a) "Certified revenue levy" means a property tax levy that provides an amount of
58 ad valorem property tax revenue equal to the sum of:
59 (i) the amount of ad valorem property tax revenue to be generated statewide in the
60 previous year from imposing a school minimum basic tax rate, as specified in Subsection
61 53A-17a-135(1)(a), or multicounty assessing and collecting levy, as specified in Section
62 59-2-1602; and
63 (ii) the product of:
64 (A) new growth, as defined in:
65 (I) Section 59-2-924; and
66 (II) rules of the commission; and
67 (B) the school minimum basic tax rate or multicounty assessing and collecting levy
68 certified by the commission for the previous year.
69 (b) For purposes of this Subsection (7), "ad valorem property tax revenue" does not
70 include property tax revenue received by a taxing entity from personal property that is:
71 (i) assessed by a county assessor in accordance with Part 3, County Assessment; and
72 (ii) semiconductor manufacturing equipment.
73 (c) For purposes of calculating the certified revenue levy described in this Subsection
74 (7), the commission shall use:
75 (i) the taxable value of real property assessed by a county assessor contained on the
76 assessment roll;
77 (ii) the taxable value of real and personal property assessed by the commission; and
78 (iii) the taxable year end value of personal property assessed by a county assessor
79 contained on the prior year's assessment roll.
80 (8) "County-assessed commercial vehicle" means:
81 (a) any commercial vehicle, trailer, or semitrailer which is not apportioned under
82 Section 41-1a-301 and is not operated interstate to transport the vehicle owner's goods or
83 property in furtherance of the owner's commercial enterprise;
84 (b) any passenger vehicle owned by a business and used by its employees for
85 transportation as a company car or vanpool vehicle; and
86 (c) vehicles that are:
87 (i) especially constructed for towing or wrecking, and that are not otherwise used to
88 transport goods, merchandise, or people for compensation;
89 (ii) used or licensed as taxicabs or limousines;
90 (iii) used as rental passenger cars, travel trailers, or motor homes;
91 (iv) used or licensed in this state for use as ambulances or hearses;
92 (v) especially designed and used for garbage and rubbish collection; or
93 (vi) used exclusively to transport students or their instructors to or from any private,
94 public, or religious school or school activities.
95 (9) (a) Except as provided in Subsection (9)(b), for purposes of Section 59-2-801,
96 "designated tax area" means a tax area created by the overlapping boundaries of only the
97 following taxing entities:
98 (i) a county; and
99 (ii) a school district.
100 (b) Notwithstanding Subsection (9)(a), "designated tax area" includes a tax area created
101 by the overlapping boundaries of:
102 (i) the taxing entities described in Subsection (9)(a); and
103 (ii) (A) a city or town if the boundaries of the school district under Subsection (9)(a)
104 and the boundaries of the city or town are identical; or
105 (B) a special service district if the boundaries of the school district under Subsection
106 (9)(a) are located entirely within the special service district.
107 (10) "Eligible judgment" means a final and unappealable judgment or order under
108 Section 59-2-1330:
109 (a) that became a final and unappealable judgment or order no more than 14 months
110 prior to the day on which the notice required by Section 59-2-919.1 is required to be mailed;
111 and
112 (b) for which a taxing entity's share of the final and unappealable judgment or order is
113 greater than or equal to the lesser of:
114 (i) $5,000; or
115 (ii) 2.5% of the total ad valorem property taxes collected by the taxing entity in the
116 previous fiscal year.
117 (11) (a) "Escaped property" means any property, whether personal, land, or any
118 improvements to the property, subject to taxation and is:
119 (i) inadvertently omitted from the tax rolls, assigned to the incorrect parcel, or assessed
120 to the wrong taxpayer by the assessing authority;
121 (ii) undervalued or omitted from the tax rolls because of the failure of the taxpayer to
122 comply with the reporting requirements of this chapter; or
123 (iii) undervalued because of errors made by the assessing authority based upon
124 incomplete or erroneous information furnished by the taxpayer.
125 (b) Property that is undervalued because of the use of a different valuation
126 methodology or because of a different application of the same valuation methodology is not
127 "escaped property."
128 (12) "Fair market value" means the amount at which property would change hands
129 between a willing buyer and a willing seller, neither being under any compulsion to buy or sell
130 and both having reasonable knowledge of the relevant facts. For purposes of taxation, "fair
131 market value" shall be determined using the current zoning laws applicable to the property in
132 question, except in cases where there is a reasonable probability of a change in the zoning laws
133 affecting that property in the tax year in question and the change would have an appreciable
134 influence upon the value.
135 (13) "Farm machinery and equipment," for purposes of the exemption provided under
136 Section 59-2-1101, means tractors, milking equipment and storage and cooling facilities, feed
137 handling equipment, irrigation equipment, harvesters, choppers, grain drills and planters, tillage
138 tools, scales, combines, spreaders, sprayers, haying equipment, including balers and cubers,
139 and any other machinery or equipment used primarily for agricultural purposes; but does not
140 include vehicles required to be registered with the Motor Vehicle Division or vehicles or other
141 equipment used for business purposes other than farming.
142 (14) "Geothermal fluid" means water in any form at temperatures greater than 120
143 degrees centigrade naturally present in a geothermal system.
144 (15) "Geothermal resource" means:
145 (a) the natural heat of the earth at temperatures greater than 120 degrees centigrade;
146 and
147 (b) the energy, in whatever form, including pressure, present in, resulting from, created
148 by, or which may be extracted from that natural heat, directly or through a material medium.
149 (16) (a) "Goodwill" means:
150 (i) acquired goodwill that is reported as goodwill on the books and records:
151 (A) of a taxpayer; and
152 (B) that are maintained for financial reporting purposes; or
153 (ii) the ability of a business to:
154 (A) generate income:
155 (I) that exceeds a normal rate of return on assets; and
156 (II) resulting from a factor described in Subsection (16)(b); or
157 (B) obtain an economic or competitive advantage resulting from a factor described in
158 Subsection (16)(b).
159 (b) The following factors apply to Subsection (16)(a)(ii):
160 (i) superior management skills;
161 (ii) reputation;
162 (iii) customer relationships;
163 (iv) patronage; or
164 (v) a factor similar to Subsections (16)(b)(i) through (iv).
165 (c) "Goodwill" does not include:
166 (i) the intangible property described in Subsection (20)(a) or (b);
167 (ii) locational attributes of real property, including:
168 (A) zoning;
169 (B) location;
170 (C) view;
171 (D) a geographic feature;
172 (E) an easement;
173 (F) a covenant;
174 (G) proximity to raw materials;
175 (H) the condition of surrounding property; or
176 (I) proximity to markets;
177 (iii) value attributable to the identification of an improvement to real property,
178 including:
179 (A) reputation of the designer, builder, or architect of the improvement;
180 (B) a name given to, or associated with, the improvement; or
181 (C) the historic significance of an improvement; or
182 (iv) the enhancement or assemblage value specifically attributable to the interrelation
183 of the existing tangible property in place working together as a unit.
184 (17) "Governing body" means:
185 (a) for a county, city, or town, the legislative body of the county, city, or town;
186 (b) for a local district under Title 17B, Limited Purpose Local Government Entities -
187 Local Districts, the local district's board of trustees;
188 (c) for a school district, the local board of education; or
189 (d) for a special service district under Title 17D, Chapter 1, Special Service District
190 Act:
191 (i) the legislative body of the county or municipality that created the special service
192 district, to the extent that the county or municipal legislative body has not delegated authority
193 to an administrative control board established under Section 17D-1-301; or
194 (ii) the administrative control board, to the extent that the county or municipal
195 legislative body has delegated authority to an administrative control board established under
196 Section 17D-1-301.
197 (18) (a) For purposes of Section 59-2-103:
198 (i) "household" means the association of persons who live in the same dwelling,
199 sharing its furnishings, facilities, accommodations, and expenses; and
200 (ii) "household" includes married individuals, who are not legally separated, that have
201 established domiciles at separate locations within the state.
202 (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
203 commission may make rules defining the term "domicile."
204 (19) (a) Except as provided in Subsection (19)(c), "improvement" means a building,
205 structure, fixture, fence, or other item that is permanently attached to land, regardless of
206 whether the title has been acquired to the land, if:
207 (i) (A) attachment to land is essential to the operation or use of the item; and
208 (B) the manner of attachment to land suggests that the item will remain attached to the
209 land in the same place over the useful life of the item; or
210 (ii) removal of the item would:
211 (A) cause substantial damage to the item; or
212 (B) require substantial alteration or repair of a structure to which the item is attached.
213 (b) "Improvement" includes:
214 (i) an accessory to an item described in Subsection (19)(a) if the accessory is:
215 (A) essential to the operation of the item described in Subsection (19)(a); and
216 (B) installed solely to serve the operation of the item described in Subsection (19)(a);
217 and
218 (ii) an item described in Subsection (19)(a) that:
219 (A) is temporarily detached from the land for repairs; and
220 (B) remains located on the land.
221 (c) Notwithstanding Subsections (19)(a) and (b), "improvement" does not include:
222 (i) an item considered to be personal property pursuant to rules made in accordance
223 with Section 59-2-107;
224 (ii) a moveable item that is attached to land:
225 (A) for stability only; or
226 (B) for an obvious temporary purpose;
227 (iii) (A) manufacturing equipment and machinery; or
228 (B) essential accessories to manufacturing equipment and machinery;
229 (iv) an item attached to the land in a manner that facilitates removal without substantial
230 damage to:
231 (A) the land; or
232 (B) the item; or
233 (v) a transportable factory-built housing unit as defined in Section 59-2-1502 if that
234 transportable factory-built housing unit is considered to be personal property under Section
235 59-2-1503.
236 (20) "Intangible property" means:
237 (a) property that is capable of private ownership separate from tangible property,
238 including:
239 (i) money;
240 (ii) credits;
241 (iii) bonds;
242 (iv) stocks;
243 (v) representative property;
244 (vi) franchises;
245 (vii) licenses;
246 (viii) trade names;
247 (ix) copyrights; and
248 (x) patents;
249 (b) a low-income housing tax credit;
250 (c) goodwill; or
251 (d) a renewable energy tax credit or incentive, including:
252 (i) a federal renewable energy production tax credit under Section 45, Internal Revenue
253 Code;
254 (ii) a federal energy credit for qualified renewable electricity production facilities under
255 Section 48, Internal Revenue Code;
256 (iii) a federal grant for a renewable energy property under American Recovery and
257 Reinvestment Act of 2009, Pub. L. No. 111-5, Section 1603; and
258 (iv) a tax credit under Subsection 59-7-614[
259 (21) "Livestock" means:
260 (a) a domestic animal;
261 (b) a fur-bearing animal;
262 (c) a honeybee; or
263 (d) poultry.
264 (22) "Low-income housing tax credit" means:
265 (a) a federal low-income housing tax credit under Section 42, Internal Revenue Code;
266 or
267 (b) a low-income housing tax credit under:
268 (i) Section 59-7-607; or
269 (ii) Section 59-10-1010.
270 (23) "Metalliferous minerals" includes gold, silver, copper, lead, zinc, and uranium.
271 (24) "Mine" means a natural deposit of either metalliferous or nonmetalliferous
272 valuable mineral.
273 (25) "Mining" means the process of producing, extracting, leaching, evaporating, or
274 otherwise removing a mineral from a mine.
275 (26) (a) "Mobile flight equipment" means tangible personal property that is:
276 (i) owned or operated by an:
277 (A) air charter service;
278 (B) air contract service; or
279 (C) airline; and
280 (ii) (A) capable of flight;
281 (B) attached to an aircraft that is capable of flight; or
282 (C) contained in an aircraft that is capable of flight if the tangible personal property is
283 intended to be used:
284 (I) during multiple flights;
285 (II) during a takeoff, flight, or landing; and
286 (III) as a service provided by an air charter service, air contract service, or airline.
287 (b) (i) "Mobile flight equipment" does not include a spare part other than a spare
288 engine that is rotated:
289 (A) at regular intervals; and
290 (B) with an engine that is attached to the aircraft.
291 (ii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
292 commission may make rules defining the term "regular intervals."
293 (27) "Nonmetalliferous minerals" includes, but is not limited to, oil, gas, coal, salts,
294 sand, rock, gravel, and all carboniferous materials.
295 (28) "Part-year residential property" means property that is not residential property on
296 January 1 of a calendar year but becomes residential property after January 1 of the calendar
297 year.
298 (29) "Personal property" includes:
299 (a) every class of property as defined in Subsection (30) that is the subject of
300 ownership and not included within the meaning of the terms "real estate" and "improvements";
301 (b) gas and water mains and pipes laid in roads, streets, or alleys;
302 (c) bridges and ferries;
303 (d) livestock; and
304 (e) outdoor advertising structures as defined in Section 72-7-502.
305 (30) (a) "Property" means property that is subject to assessment and taxation according
306 to its value.
307 (b) "Property" does not include intangible property as defined in this section.
308 (31) "Public utility," for purposes of this chapter, means the operating property of a
309 railroad, gas corporation, oil or gas transportation or pipeline company, coal slurry pipeline
310 company, electrical corporation, telephone corporation, sewerage corporation, or heat
311 corporation where the company performs the service for, or delivers the commodity to, the
312 public generally or companies serving the public generally, or in the case of a gas corporation
313 or an electrical corporation, where the gas or electricity is sold or furnished to any member or
314 consumers within the state for domestic, commercial, or industrial use. Public utility also
315 means the operating property of any entity or person defined under Section 54-2-1 except water
316 corporations.
317 (32) (a) Subject to Subsection (32)(b), "qualifying exempt primary residential rental
318 personal property" means household furnishings, furniture, and equipment that:
319 (i) are used exclusively within a dwelling unit that is the primary residence of a tenant;
320 (ii) are owned by the owner of the dwelling unit that is the primary residence of a
321 tenant; and
322 (iii) after applying the residential exemption described in Section 59-2-103, are exempt
323 from taxation under this chapter in accordance with Subsection 59-2-1115(2).
324 (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
325 commission may by rule define the term "dwelling unit" for purposes of this Subsection (32)
326 and Subsection (35).
327 (33) "Real estate" or "real property" includes:
328 (a) the possession of, claim to, ownership of, or right to the possession of land;
329 (b) all mines, minerals, and quarries in and under the land, all timber belonging to
330 individuals or corporations growing or being on the lands of this state or the United States, and
331 all rights and privileges appertaining to these; and
332 (c) improvements.
333 (34) "Relationship with an owner of the property's land surface rights" means a
334 relationship described in Subsection 267(b), Internal Revenue Code:
335 (a) except that notwithstanding Subsection 267(b), Internal Revenue Code, the term
336 25% shall be substituted for the term 50% in Subsection 267(b), Internal Revenue Code; and
337 (b) using the ownership rules of Subsection 267(c), Internal Revenue Code, for
338 determining the ownership of stock.
339 (35) (a) Subject to Subsection (35)(b), "residential property," for the purposes of the
340 reductions and adjustments under this chapter, means any property used for residential
341 purposes as a primary residence.
342 (b) Subject to Subsection (35)(c), "residential property":
343 (i) except as provided in Subsection (35)(b)(ii), includes household furnishings,
344 furniture, and equipment if the household furnishings, furniture, and equipment are:
345 (A) used exclusively within a dwelling unit that is the primary residence of a tenant;
346 and
347 (B) owned by the owner of the dwelling unit that is the primary residence of a tenant;
348 and
349 (ii) does not include property used for transient residential use.
350 (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
351 commission may by rule define the term "dwelling unit" for purposes of Subsection (32) and
352 this Subsection (35).
353 (36) "Split estate mineral rights owner" means a person who:
354 (a) has a legal right to extract a mineral from property;
355 (b) does not hold more than a 25% interest in:
356 (i) the land surface rights of the property where the wellhead is located; or
357 (ii) an entity with an ownership interest in the land surface rights of the property where
358 the wellhead is located;
359 (c) is not an entity in which the owner of the land surface rights of the property where
360 the wellhead is located holds more than a 25% interest; and
361 (d) does not have a relationship with an owner of the land surface rights of the property
362 where the wellhead is located.
363 (37) (a) "State-assessed commercial vehicle" means:
364 (i) any commercial vehicle, trailer, or semitrailer which operates interstate or intrastate
365 to transport passengers, freight, merchandise, or other property for hire; or
366 (ii) any commercial vehicle, trailer, or semitrailer which operates interstate and
367 transports the vehicle owner's goods or property in furtherance of the owner's commercial
368 enterprise.
369 (b) "State-assessed commercial vehicle" does not include vehicles used for hire which
370 are specified in Subsection (8)(c) as county-assessed commercial vehicles.
371 (38) "Taxable value" means fair market value less any applicable reduction allowed for
372 residential property under Section 59-2-103.
373 (39) "Tax area" means a geographic area created by the overlapping boundaries of one
374 or more taxing entities.
375 (40) "Taxing entity" means any county, city, town, school district, special taxing
376 district, local district under Title 17B, Limited Purpose Local Government Entities - Local
377 Districts, or other political subdivision of the state with the authority to levy a tax on property.
378 (41) "Tax roll" means a permanent record of the taxes charged on property, as extended
379 on the assessment roll and may be maintained on the same record or records as the assessment
380 roll or may be maintained on a separate record properly indexed to the assessment roll. It
381 includes tax books, tax lists, and other similar materials.
382 Section 2. Section 59-7-614 is amended to read:
383 59-7-614. Renewable energy systems tax credits -- Definitions -- Certification --
384 Rulemaking authority -- Revenue and Taxation Interim Committee study.
385 (1) As used in this section:
386 (a) (i) "Active solar system"[
387 (A) collecting and converting incident solar radiation into thermal, mechanical, or
388 electrical energy[
389 (B) transferring [
390 a separate apparatus to storage or to the point of use[
391 (ii) "Active solar system" includes water heating, space heating or cooling, and
392 electrical or mechanical energy generation.
393 (b) "Biomass system" means [
394 (i) converting material into biomass energy, as defined in Section 59-12-102[
395 (ii) transporting [
396 storage.
397 [
398
399
400 [
401
402
403 (i) (A) an active solar system;
404 (B) a biomass system;
405 (C) a direct use geothermal system;
406 (D) a geothermal electricity system;
407 (E) a geothermal heat pump system;
408 (F) a hydroenergy system;
409 (G) a passive solar system; or
410 (H) a wind system;
411 (ii) located in the state; and
412 (iii) used:
413 (A) to supply energy to a commercial unit; or
414 (B) as a commercial enterprise.
415 [
416 which is to produce electrical, mechanical, or thermal energy for sale from a commercial
417 energy system.
418 [
419 entity uses to transact [
420 (ii) Notwithstanding Subsection (1)[
421 (A) [
422 pumping or a wind system, each individual energy generating device [
423 a commercial unit; [
424 (B) if an energy system is the building or structure that [
425 transact [
426 [
427 [
428
429 heating a building, an industrial process, and aquaculture.
430 [
431 (i) contained in heat that continuously flows outward from the earth [
432 (ii) used as a sole source of energy to produce electricity.
433 (h) "Geothermal energy" means energy generated by heat that is contained in the earth.
434 (i) "Geothermal heat pump system" means a system of apparatus and equipment
435 [
436 (i) enables the use of thermal properties contained in the earth at temperatures well
437 below 100 degrees Fahrenheit [
438 (ii) helps meet heating and cooling needs of a structure.
439 (j) "Hydroenergy system" means a system of apparatus and equipment that is capable
440 of:
441 (i) intercepting and converting kinetic water energy into electrical or mechanical
442 energy; and
443 (ii) transferring this form of energy by separate apparatus to the point of use or storage.
444 [
445
446 [
447 63M-4-401.
448 [
449 structure of a building and its operable components to provide for collection, storage, and
450 distribution of heating or cooling during the appropriate times of the year by utilizing the
451 climate resources available at the site[
452 (ii) "Passive solar system" includes those portions and components of a building that
453 are expressly designed and required for the collection, storage, and distribution of solar energy.
454 (m) (i) "Principal recovery portion" means the portion of a lease payment that
455 constitutes the cost a person incurs in acquiring a commercial energy system.
456 (ii) "Principal recovery portion" does not include:
457 (A) an interest charge; or
458 (B) a maintenance expense.
459 (n) "Residential energy system" means [
460
461 following used to supply energy to or for [
462 (i) an active solar system;
463 (ii) a biomass system;
464 (iii) a direct use geothermal system;
465 (iv) a geothermal heat pump system;
466 (v) a hydroenergy system;
467 (vi) a passive solar system; or
468 (vii) a wind system.
469 (o) (i) "Residential unit" means [
470 dwelling unit that:
471 (A) is located in the state; and
472 (B) serves as a dwelling for a person, group of persons, or a family [
473 (ii) "Residential unit" does not include property subject to a fee under:
474 [
475 [
476 [
477 [
478 [
479 (p) "Wind system" means a system of apparatus and equipment that is capable of:
480 (i) intercepting and converting wind energy into mechanical or electrical energy; and
481 (ii) transferring these forms of energy by a separate apparatus to the point of use, sale,
482 or storage.
483 [
484
485
486
487 (2) A taxpayer may claim an energy system tax credit as provided in this section
488 against a tax due under this chapter for a taxable year.
489 (3) (a) Subject to the other provisions of this Subsection (3), a taxpayer may claim a
490 nonrefundable tax credit under this Subsection (3) with respect to a residential unit the taxpayer
491 owns or uses if:
492 (i) the taxpayer:
493 (A) purchases and completes a residential energy system to supply all or part of the
494 energy required for the residential unit; or
495 (B) participates in the financing of a residential energy system to supply all or part of
496 the energy required for the residential unit;
497 (ii) the residential energy system is completed and placed in service on or after January
498 1, 2007; and
499 (iii) the taxpayer obtains a written certification from the office in accordance with
500 Subsection (7).
501 [
502 to 25% of the reasonable costs of each residential energy system installed with respect to each
503 residential unit the [
504 (ii) A tax credit under this Subsection (3) may include installation costs[
505
506 (iii) A taxpayer may claim a tax credit under this Subsection (3) for the taxable year in
507 which the residential energy system is completed and placed in service.
508 (iv) If the amount of a tax credit under this Subsection (3) exceeds a taxpayer's tax
509 liability under this chapter for a taxable year, the amount of the tax credit exceeding the
510 liability may be carried forward for a period that does not exceed the next four taxable years.
511 [
512 Subsection [
513 [
514
515 [
516
517 this Subsection [
518 [
519
520 [
521
522 return under this chapter, the other person may claim the tax credit under this section as if the
523 [
524
525 tax credit; or
526 (B) if the other person files a return under Chapter 10, Individual Income Tax Act, the
527 other person may claim the tax credit under Section 59-10-1014 as if the other person had met
528 the requirements of Section 59-10-1014 to claim the tax credit.
529 [
530
531
532
533
534
535 (4) (a) Subject to the other provisions of this Subsection (4), a taxpayer may claim a
536 refundable tax credit under this Subsection (4) with respect to a commercial energy system if:
537 (i) the commercial energy system does not use:
538 (A) wind, geothermal electricity, solar, or biomass equipment capable of producing a
539 total of 660 or more kilowatts of electricity; or
540 (B) solar equipment capable of producing 2,000 or more kilowatts of electricity;
541 (ii) the corporation purchases or participates in the financing of the commercial energy
542 system;
543 (iii) (A) the commercial energy system supplies all or part of the energy required by
544 commercial units owned or used by the [
545 (B) the [
546 commercial energy system as a commercial enterprise[
547 (iv) the commercial energy system is completed and placed in service on or after
548 January 1, 2007; and
549 (v) the taxpayer obtains a written certification from the office in accordance with
550 Subsection (7).
551 [
552 through (v), the tax credit [
553 commercial energy system [
554 (ii) A tax credit under this Subsection (4) may include installation costs[
555
556 (iii) A taxpayer may claim a tax credit under this Subsection (4) for the taxable year in
557 which the commercial energy system is completed and placed in service.
558 (iv) A tax credit under this Subsection (4) may not be carried forward or carried back.
559 [
560 (v) The total amount of [
561 [
562 [
563
564 [
565 taxpayer that is a lessee of a commercial energy system installed on a commercial unit [
566
567
568 [
569 under this Subsection (4) only the principal recovery portion of the lease payments[
570
571
572
573 [
574 (iii) A taxpayer described in Subsection (4)(c)(i) may claim a tax credit under this
575 Subsection [
576 [
577 [
578
579 [
580
581
582
583 (5) (a) Subject to the other provisions of this Subsection (5), a taxpayer may claim a
584 refundable tax credit under this Subsection (5) with respect to a commercial energy system if:
585 (i) the commercial energy system uses wind, geothermal electricity, or biomass
586 equipment capable of producing a total of 660 or more kilowatts of electricity;
587 (ii) (A) the commercial energy system supplies all or part of the energy required by
588 commercial units owned or used by the [
589 (B) the [
590 commercial energy system as a commercial enterprise[
591 (iii) the commercial energy system is completed and placed in service on or after
592 January 1, 2007; and
593 (iv) the taxpayer obtains a written certification from the office in accordance with
594 Subsection (7).
595 [
596 (b) (i) Subject to Subsections (5)(b)(ii) and (iii), a tax credit under this [
597 Subsection (5) is equal to the product of:
598 [
599 [
600 taxable year.
601 [
602 (ii) A tax credit under this Subsection (5) may be claimed for production occurring
603 during a period of 48 months beginning with the month in which the commercial energy
604 system is placed in commercial service.
605 [
606 (iii) A tax credit under this Subsection (5) may not be carried forward or carried back.
607 [
608
609 [
610 (c) A taxpayer that is a lessee of a commercial energy system installed on a commercial
611 unit [
612
613 [
614
615 [
616
617 [
618
619
620 [
621
622 (6) (a) Subject to the other provisions of this Subsection (6), a taxpayer may claim a
623 refundable tax credit as provided in this Subsection [
624 (i) the taxpayer owns a commercial energy system that uses solar equipment capable of
625 producing a total of 660 or more kilowatts of electricity;
626 [
627 by commercial units owned or used by the [
628 (B) the [
629 commercial energy system as a commercial enterprise; [
630 [
631 [
632 (iv) the commercial energy system is completed and placed in service on or after
633 January 1, 2015; and
634 (v) the taxpayer obtains a written certification from the office in accordance with
635 Subsection (7).
636 (b) [
637 credit under this [
638 [
639 [
640 taxable year.
641 [
642 production occurring during a period of 48 months beginning with the month in which the
643 commercial energy system is placed in commercial service.
644 [
645 or carried back.
646 [
647
648 [
649 system installed on a commercial unit may claim a tax credit under this Subsection [
650 the [
651 elects not to claim the tax credit.
652 [
653
654 (7) (a) Before a taxpayer may claim a tax credit under this section, the taxpayer shall
655 obtain a written certification from the office.
656 (b) The office shall issue a taxpayer a written certification if the office determines that:
657 (i) the taxpayer meets the requirements of this section to receive a tax credit; and
658 (ii) the residential energy system or commercial energy system with respect to which
659 the taxpayer seeks to claim a tax credit:
660 (A) has been completely installed;
661 (B) is a viable system for saving or producing energy from renewable resources; and
662 (C) is safe, reliable, efficient, and technically feasible to ensure that the residential
663 energy system or commercial energy system uses the state's renewable and nonrenewable
664 energy resources in an appropriate and economic manner.
665 (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
666 office may make rules:
667 (i) for determining whether a residential energy system or commercial energy system
668 meets the requirements of Subsection (7)(b)(ii); and
669 (ii) for purposes of a tax credit under Subsection (3) or (4), establishing the reasonable
670 costs of a residential energy system or a commercial energy system, as an amount per unit of
671 energy production.
672 (d) A taxpayer that obtains a written certification from the office shall retain the
673 certification for the same time period a person is required to keep books and records under
674 Section 59-1-1406.
675 (8) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
676 commission may make rules to address the certification of a tax credit under this section.
677 (9) A tax credit under this section is in addition to any tax credits provided under the
678 laws or rules and regulations of the United States.
679 [
680 59-7-614.3 for the purchase of the one or more solar units may not claim a tax credit under this
681 section for that purchase.
682 [
683
684
685
686
687 [
688
689
690 [
691
692
693 [
694
695 [
696 after 2017, the Revenue and Taxation Interim Committee shall review each tax credit provided
697 by this section and report its recommendations to the Legislative Management Committee
698 concerning whether the tax credit should be continued, modified, or repealed.
699 (b) The Revenue and Taxation Interim Committee's report under Subsection [
700 (11)(a) shall include information concerning the cost of the tax credit, the purpose and
701 effectiveness of the tax credit, and the state's benefit from the tax credit.
702 Section 3. Section 59-10-1014 is amended to read:
703 59-10-1014. Nonrefundable renewable energy systems tax credits -- Definitions --
704 Certification -- Rulemaking authority -- Revenue and Taxation Interim Committee study.
705 (1) As used in this [
706 (a) (i) "Active solar system"[
707 (A) collecting and converting incident solar radiation into thermal, mechanical, or
708 electrical energy[
709 (B) transferring [
710 a separate apparatus to storage or to the point of use[
711 (ii) "Active solar system" includes water heating, space heating or cooling, and
712 electrical or mechanical energy generation.
713 (b) "Biomass system" means [
714 (i) converting material into biomass energy, as defined in Section 59-12-102[
715 (ii) transporting [
716 storage.
717 [
718
719 [
720 [
721
722 heating a building, an industrial process, and aquaculture.
723 [
724 (i) contained in heat that continuously flows outward from the earth [
725 (ii) used as a sole source of energy to produce electricity.
726 (e) "Geothermal energy" means energy generated by heat that is contained in the earth.
727 (f) "Geothermal heat pump system" means a system of apparatus and equipment
728 [
729 (i) enables the use of thermal properties contained in the earth at temperatures well
730 below 100 degrees Fahrenheit [
731 (ii) helps meet heating and cooling needs of a structure.
732 (g) "Hydroenergy system" means a system of apparatus and equipment that is capable
733 of:
734 (i) intercepting and converting kinetic water energy into electrical or mechanical
735 energy; and
736 (ii) transferring this form of energy by separate apparatus to the point of use or storage.
737 (h) "Office" means the Office of Energy Development created in Section 63M-4-401.
738 (i) (i) "Passive solar system"[
739 structure of a building and its operable components to provide for collection, storage, and
740 distribution of heating or cooling during the appropriate times of the year by utilizing the
741 climate resources available at the site[
742 (ii) "Passive solar system" includes those portions and components of a building that
743 are expressly designed and required for the collection, storage, and distribution of solar energy.
744 (j) (i) "Principal recovery portion" means the portion of a lease payment that
745 constitutes the cost a person incurs in acquiring a residential energy system.
746 (ii) "Principal recovery portion" does not include:
747 (A) an interest charge; or
748 (B) a maintenance expense.
749 [
750
751 following used to supply energy to or for [
752 (i) an active solar system;
753 (ii) a biomass system;
754 (iii) a direct use geothermal system;
755 (iv) a geothermal heat pump system;
756 (v) a hydroenergy system;
757 (vi) a passive solar system; or
758 (vii) a wind system.
759 [
760 dwelling unit that:
761 (A) is located in the state; and
762 (B) serves as a dwelling for a person, group of persons, or a family [
763 (ii) "Residential unit" does not include property subject to a fee under:
764 [
765 [
766 [
767 [
768 [
769 [
770 (i) intercepting and converting wind energy into mechanical or electrical energy; and
771 (ii) transferring these forms of energy by a separate apparatus to the point of use or
772 storage.
773 [
774
775 [
776
777
778 [
779
780
781 [
782
783
784 (2) A claimant, estate, or trust may claim an energy system tax credit as provided in
785 this section against a tax due under this chapter for a taxable year.
786 (3) (a) Subject to the other provisions of this Subsection (3), a claimant, estate, or trust
787 may claim a nonrefundable tax credit under this Subsection (3) with respect to a residential unit
788 the claimant, estate, or trust owns or uses if:
789 (i) the claimant, estate, or trust:
790 (A) purchases and completes a residential energy system to supply all or part of the
791 energy required for the residential unit; or
792 (B) participates in the financing of a residential energy system to supply all or part of
793 the energy required for the residential unit;
794 (ii) the residential energy system is completed and placed in service on or after January
795 1, 2007; and
796 (iii) the claimant, estate, or trust obtains a written certification from the office in
797 accordance with Subsection (4).
798 [
799 [
800 system[
801
802
803 owns or uses.
804 [
805
806 [
807
808 [
809
810 (ii) A tax credit under this Subsection (3) may include installation costs.
811 (iii) A claimant, estate, or trust may claim a tax credit under this Subsection (3) for the
812 taxable year in which the residential energy system is completed and placed in service.
813 (iv) If the amount of a tax credit under this Subsection (3) exceeds a claimant's,
814 estate's, or trust's tax liability under this chapter for a taxable year, the amount of the tax credit
815 exceeding the liability may be carried forward for a period that does not exceed the next four
816 taxable years.
817 (v) The total amount of tax credit a claimant, estate, or trust may claim under this
818 Subsection (3) may not exceed $2,000 per residential unit.
819 [
820 additional residential energy systems or parts of residential energy systems [
821
822 [
823 residential unit.
824 [
825
826
827
828 [
829 [
830 unit [
831 [
832 tax credit.
833 [
834 residential energy system may claim as a tax credit under this Subsection (3) only the principal
835 recovery portion of the lease payments[
836
837
838 [
839 leases a residential energy system may [
840 Subsection (3) for a period that does not exceed seven taxable years [
841
842 (d) If a claimant, estate, or trust sells a residential unit to another person before the
843 claimant, estate, or trust claims the tax credit under this Subsection (3):
844 (i) the claimant, estate, or trust may assign the tax credit to the other person; and
845 (ii) (A) if the other person files a return under Chapter 7, Corporate Franchise and
846 Income Taxes, the other person may claim the tax credit as if the other person had met the
847 requirements of Section 59-7-614 to claim the tax credit; or
848 (B) if the other person files a return under this chapter, the other person may claim the
849 tax credit under this section as if the other person had met the requirements of this section to
850 claim the tax credit.
851 [
852
853
854
855
856 [
857
858
859
860
861 [
862
863 [
864
865 [
866
867
868 [
869
870 [
871
872
873
874
875 [
876
877 [
878
879 [
880
881
882
883 [
884
885 (4) (a) Before a claimant, estate, or trust may claim a tax credit under this section, the
886 claimant, estate, or trust shall obtain a written certification from the office.
887 (b) The office shall issue a claimant, estate, or trust a written certification if the office
888 determines that:
889 (i) the claimant, estate, or trust meets the requirements of this section to receive a tax
890 credit; and
891 (ii) the office determines that the residential energy system with respect to which the
892 claimant, estate, or trust seeks to claim a tax credit:
893 (A) has been completely installed;
894 (B) is a viable system for saving or producing energy from renewable resources; and
895 (C) is safe, reliable, efficient, and technically feasible to ensure that the residential
896 energy system uses the state's renewable and nonrenewable energy resources in an appropriate
897 and economic manner.
898 (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
899 office may make rules:
900 (i) for determining whether a residential energy system meets the requirements of
901 Subsection (4)(b)(ii); and
902 (ii) for purposes of a tax credit under Subsection (3), establishing the reasonable costs
903 of a residential energy system, as an amount per unit of energy production.
904 (d) A claimant, estate, or trust that obtains a written certification from the office shall
905 retain the certification for the same time period a person is required to keep books and records
906 under Section 59-1-1406.
907 (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
908 commission may make rules to address the certification of a tax credit under this section.
909 (6) A tax credit under this section is in addition to any tax credits provided under the
910 laws or rules and regulations of the United States.
911 [
912 59-10-1024 for the purchase of the one or more solar units may not claim a tax credit under this
913 section for that purchase.
914 [
915
916
917
918 [
919
920
921 [
922
923
924 [
925
926 [
927 after 2017, the Revenue and Taxation Interim Committee shall review each tax credit provided
928 by this section and report its recommendations to the Legislative Management Committee
929 concerning whether the tax credit should be continued, modified, or repealed.
930 (b) The Revenue and Taxation Interim Committee's report under Subsection [
931 (8)(a) shall include information concerning the cost of the tax credit, the purpose and
932 effectiveness of the tax credit, and the state's benefit from the tax credit.
933 Section 4. Section 59-10-1106 is amended to read:
934 59-10-1106. Refundable renewable energy systems tax credits -- Definitions --
935 Certification -- Rulemaking authority -- Revenue and Taxation Interim Committee study.
936 (1) As used in this section:
937 (a) "Active solar system" [
938 (b) "Biomass system" [
939 [
940 [
941
942
943
944 [
945 as defined in Section 59-7-614.
946 [
947 [
948
949 [
950
951 in Section 59-7-614.
952 (ii) Notwithstanding Subsection (1)[
953 (A) [
954 pumping or a wind system, each individual energy generating device [
955 a commercial unit; [
956 (B) if an energy system is the building or structure that [
957 claimant, estate, or trust uses to transact [
958 energy system itself.
959 [
960 Section 59-10-1014.
961 [
962 59-10-1014.
963 (h) "Geothermal energy" has the same meaning as defined in Section 59-10-1014.
964 (i) "Geothermal heat pump system" [
965 59-10-1014.
966 (j) "Hydroenergy system" [
967 (k) "Office" means the Office of Energy Development created in Section 63M-4-401.
968 (l) "Passive solar system" [
969 (m) "Principal recovery portion" has the same meaning as defined in Section
970 59-10-1014.
971 [
972 [
973
974
975
976
977 (2) A claimant, estate, or trust may claim an energy system tax credit as provided in
978 this section against a tax due under this chapter for a taxable year.
979 (3) (a) Subject to the other provisions of this Subsection (3), a claimant, estate, or trust
980 may claim a refundable tax credit under this Subsection (3) with respect to a commercial
981 energy system if:
982 (i) the commercial energy system does not use:
983 (A) wind, geothermal electricity, solar, or biomass equipment capable of producing a
984 total of 660 or more kilowatts of electricity; or
985 (B) solar equipment capable of producing 2,000 or more kilowatts of electricity;
986 (ii) the claimant, estate, or trust purchases or participates in the financing of the
987 commercial energy system;
988 (iii) (A) the commercial energy system supplies all or part of the energy required by
989 commercial units owned or used by the [
990 (B) the [
991 produced by the commercial energy system as a commercial enterprise[
992 (iv) the commercial energy system is completed and placed in service on or after
993 January 1, 2007; and
994 (v) the claimant, estate, or trust obtains a written certification from the office in
995 accordance with Subsection (6).
996 [
997 Subject to Subsections (3)(b)(ii) through (v), the tax credit [
998 reasonable costs of [
999 (ii) A tax credit under this Subsection (3) may include installation costs[
1000
1001 (iii) A claimant, estate, or trust may claim a tax credit under this Subsection (3) for the
1002 taxable year in which the commercial energy system is completed and placed in service.
1003 (iv) A tax credit under this Subsection (3) may not be carried forward or carried back.
1004 [
1005 (v) The total amount of [
1006 Subsection [
1007 [
1008
1009 [
1010 Subsections (3)(c)(ii) and (iii), a claimant, estate, or trust that is a lessee of a commercial
1011 energy system installed on a commercial unit [
1012 this Subsection [
1013 lessor irrevocably elects not to claim the tax credit.
1014 [
1015 as a tax credit under this Subsection (3) only the principal recovery portion of the lease
1016 payments[
1017
1018
1019 [
1020
1021 (iii) A claimant, estate, or trust described in Subsection (3)(c)(i) may claim a tax credit
1022 under this Subsection [
1023 taxable years [
1024 lease agreement.
1025 [
1026
1027
1028
1029 (4) (a) Subject to the other provisions of this Subsection (4), a claimant, estate, or trust
1030 may claim a refundable tax credit under this Subsection (4) with respect to a commercial
1031 energy system if:
1032 (i) the commercial energy system uses wind, geothermal electricity, or biomass
1033 equipment capable of producing a total of 660 or more kilowatts of electricity;
1034 (ii) (A) the commercial energy system supplies all or part of the energy required by
1035 commercial units owned or used by the [
1036 (B) the [
1037 produced by the commercial energy system as a commercial enterprise[
1038 (iii) the commercial energy system is completed and placed in service on or after
1039 January 1, 2007; and
1040 (iv) the claimant, estate, or trust obtains a written certification from the office in
1041 accordance with Subsection (6).
1042 [
1043 (b) (i) Subject to Subsections (4)(b)(ii) and (iii), a tax credit under this Subsection
1044 [
1045 (A) 0.35 cents; and
1046 (B) the kilowatt hours of electricity produced and [
1047 taxable year.
1048 [
1049 [
1050 occurring during a period of 48 months beginning with the month in which the commercial
1051 energy system is placed in commercial service[
1052 [
1053 [
1054 (c) A claimant, estate, or trust that is a lessee of a commercial energy system installed
1055 on a commercial unit [
1056 (4) if the [
1057 elects not to claim the tax credit.
1058 [
1059 (5) (a) Subject to the other provisions of this Subsection (5), a claimant, estate, or trust
1060 may claim a refundable tax credit as provided in this Subsection (5) if:
1061 (i) the claimant, estate, or trust owns a commercial energy system that uses solar
1062 equipment capable of producing a total of 660 or more kilowatts of electricity;
1063 (ii) (A) the commercial energy system supplies all or part of the energy required by
1064 commercial units owned or used by the claimant, estate, or trust; or
1065 (B) the claimant, estate, or trust sells all or part of the energy produced by the
1066 commercial energy system as a commercial enterprise;
1067 (iii) the claimant, estate, or trust does not claim a tax credit under Subsection (3);
1068 (iv) the commercial energy system is completed and placed in service on or after
1069 January 1, 2015; and
1070 (v) the claimant, estate, or trust obtains a written certification from the office in
1071 accordance with Subsection (6).
1072 (b) (i) Subject to Subsections (5)(b)(ii) and (iii), a tax credit under this Subsection (5)
1073 is equal to the product of:
1074 (A) 0.35 cents; and
1075 (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
1076 (ii) A tax credit under this Subsection (5) may be claimed for production occurring
1077 during a period of 48 months beginning with the month in which the commercial energy
1078 system is placed in commercial service.
1079 (iii) A tax credit under this Subsection (5) may not be carried forward or carried back.
1080 (c) A claimant, estate, or trust that is a lessee of a commercial energy system installed
1081 on a commercial unit may claim a tax credit under this Subsection (5) if the claimant, estate, or
1082 trust confirms that the lessor irrevocably elects not to claim the tax credit.
1083 (6) (a) Before a claimant, estate, or trust may claim a tax credit under this section, the
1084 claimant, estate, or trust shall obtain a written certification from the office.
1085 (b) The office shall issue a claimant, estate, or trust a written certification if the office
1086 determines that:
1087 (i) the claimant, estate, or trust meets the requirements of this section to receive a tax
1088 credit; and
1089 (ii) the office determines that the commercial energy system with respect to which the
1090 claimant, estate, or trust seeks to claim a tax credit:
1091 (A) has been completely installed;
1092 (B) is a viable system for saving or producing energy from renewable resources; and
1093 (C) is safe, reliable, efficient, and technically feasible to ensure that the commercial
1094 energy system uses the state's renewable and nonrenewable resources in an appropriate and
1095 economic manner.
1096 (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1097 office may make rules:
1098 (i) for determining whether a commercial energy system meets the requirements of
1099 Subsection (6)(b)(ii); and
1100 (ii) for purposes of a tax credit under Subsection (3), establishing the reasonable costs
1101 of a commercial energy system, as an amount per unit of energy production.
1102 (d) A claimant, estate, or trust that obtains a written certification from the office shall
1103 retain the certification for the same time period a person is required to keep books and records
1104 under Section 59-1-1406.
1105 (7) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1106 commission may make rules to address the certification of a tax credit under this section.
1107 (8) A tax credit under this section is in addition to any tax credits provided under the
1108 laws or rules and regulations of the United States.
1109 [
1110
1111
1112
1113 [
1114
1115
1116 [
1117
1118 (9) A purchaser of one or more solar units that claims a tax credit under Section
1119 59-10-1024 for the purchase of the one or more solar units may not claim a tax credit under this
1120 section for that purchase.
1121 [
1122 after 2017, the Revenue and Taxation Interim Committee shall review each tax credit provided
1123 by this section and report its recommendations to the Legislative Management Committee
1124 concerning whether the credit should be continued, modified, or repealed.
1125 (b) The Revenue and Taxation Interim Committee's report under Subsection [
1126 (10)(a) shall include information concerning the cost of the credit, the purpose and
1127 effectiveness of the credit, and the state's benefit from the credit.
1128 Section 5. Effective date -- Retrospective operation.
1129 (1) This bill takes effect on May 12, 2015.
1130 (2) The actions affecting the following sections have retrospective operation for a
1131 taxable year beginning on or after January 1, 2015:
1132 (a) Section 59-7-614;
1133 (b) Section 59-10-1014; and
1134 (c) Section 59-10-1106.
Legislative Review Note
as of 11-20-14 2:17 PM
Office of Legislative Research and General Counsel