1
2
3
4
5
6
7 LONG TITLE
8 General Description:
9 This bill provides for a review of certain tax credits .
10 Highlighted Provisions:
11 This bill:
12 ▸ requires the Revenue and Taxation Interim Committee to review certain credits
13 under the Individual Income Tax Act, the Corporate Income Tax, the Motor and
14 Special Fuel Tax Act, the Taxation of Admitted Insurers, and the Governor's Office
15 of Economic Development; and
16 ▸ establishes requirements for the review by the Revenue and Taxation Interim
17 Committee.
18 Money Appropriated in this Bill:
19 None
20 Other Special Clauses:
21 This bill provides coordination clauses.
22 Utah Code Sections Affected:
23 AMENDS:
24 59-7-612, as last amended by Laws of Utah 2012, Chapter 405
25 59-7-614, as last amended by Laws of Utah 2015, Chapters 30, 133 and last amended
26 by Coordination Clause, Laws of Utah 2015, Chapter 133
27 59-7-614.2, as last amended by Laws of Utah 2015, Chapter 283
28 59-7-614.5, as last amended by Laws of Utah 2015, Chapter 283
29 59-7-614.7, as enacted by Laws of Utah 2012, Chapter 410
30 59-7-614.8, as last amended by Laws of Utah 2015, Chapter 283
31 59-7-619, as enacted by Laws of Utah 2015, Chapter 356
32 59-9-107, as enacted by Laws of Utah 2014, Chapter 435
33 59-10-1012, as last amended by Laws of Utah 2012, Chapter 405
34 59-10-1013, as last amended by Laws of Utah 2011, Chapter 384
35 59-10-1014, as last amended by Laws of Utah 2015, Chapter 133
36 59-10-1024, as last amended by Laws of Utah 2011, Chapter 384
37 59-10-1029, as enacted by Laws of Utah 2012, Chapter 410
38 59-10-1030, as last amended by Laws of Utah 2015, Chapter 283
39 59-10-1034, as enacted by Laws of Utah 2015, Chapter 356
40 59-10-1106, as last amended by Laws of Utah 2015, Chapter 133
41 59-10-1107, as last amended by Laws of Utah 2015, Chapter 283
42 59-10-1108, as last amended by Laws of Utah 2015, Chapter 283
43 59-13-202, as last amended by Laws of Utah 2006, Chapter 223
44 63N-2-106, as last amended by Laws of Utah 2015, Chapter 344 and renumbered and
45 amended by Laws of Utah 2015, Chapter 283
46 63N-2-213, as renumbered and amended by Laws of Utah 2015, Chapter 283
47 63N-2-305, as renumbered and amended by Laws of Utah 2015, Chapter 283
48 63N-2-810, as renumbered and amended by Laws of Utah 2015, Chapter 283
49 ENACTS:
50 59-7-159, Utah Code Annotated 1953
51 59-10-137, Utah Code Annotated 1953
52 Utah Code Sections Affected by Coordination Clause:
53 59-7-159, Utah Code Annotated 1953
54 59-7-614.10, Utah Code Annotated 1953
55 59-10-137, Utah Code Annotated 1953
56 59-10-1036, Utah Code Annotated 1953
57 63N-2-213, as renumbered and amended by Laws of Utah 2015, Chapter 283
58 63N-2-810, as renumbered and amended by Laws of Utah 2015, Chapter 283
59
60 Section 1. Section 59-7-159 is enacted to read:
61 59-7-159. Review of credits allowed under this chapter.
62 (1) As used in this section, "committee" means the Revenue and Taxation Interim
63 Committee.
64 (2) (a) The committee shall review the tax credits described in this chapter as provided
65 in Subsection (3) and make recommendations to the Legislature concerning whether the tax
66 credits should be continued, modified, or repealed.
67 (b) In conducting the review required under Subsection (2)(a), the committee shall:
68 (i) schedule time on at least one committee agenda to conduct the review;
69 (ii) invite state agencies, individuals, and organizations concerned with the tax credit
70 under review to provide testimony;
71 (iii) (A) invite the Governor's Office of Economic Development to present a summary
72 and analysis of the information for each tax credit regarding which the Governor's Office of
73 Economic Development is required to make a report under this chapter; and
74 (B) invite the Office of the Legislative Fiscal Analyst to present a summary and
75 analysis of the information for each tax credit regarding which the Office of the Legislative
76 Fiscal Analyst is required to make a report under this chapter;
77 (iv) ensure that the committee's recommendations under this section include an
78 evaluation of:
79 (A) the cost of the tax credit to the state;
80 (B) the purpose and effectiveness of the tax credit; and
81 (C) the extent to which the state benefits from the tax credit; and
82 (v) undertake other review efforts as determined by the committee chairs or as
83 otherwise required by law.
84 (3) (a) On or before November 30, 2016, and every three years after November 30,
85 2016, the committee shall conduct the review required under Subsection (2) of the tax credits
86 allowed under the following sections:
87 (i) Section 59-7-605;
88 (ii) Section 59-7-610;
89 (iii) Section 59-7-614;
90 (iv) Section 59-7-614.7;
91 (v) Section 59-7-614.8; and
92 (vi) Section 59-7-618.
93 (b) On or before November 30, 2017, and every three years after November 30, 2017,
94 the committee shall conduct the review required under Subsection (2) of the tax credits allowed
95 under the following sections:
96 (i) Section 59-7-601;
97 (ii) Section 59-7-607;
98 (iii) Section 59-7-612;
99 (iv) Section 59-7-614.1;
100 (v) Section 59-7-614.5; and
101 (vi) Section 59-7-614.6.
102 (c) On or before November 30, 2018, and every three years after November 30, 2018,
103 the committee shall conduct the review required under Subsection (2) of the tax credits allowed
104 under the following sections:
105 (i) Section 59-7-609;
106 (ii) Section 59-7-614.2;
107 (iii) Section 59-7-617;
108 (iv) Section 59-7-619; and
109 (v) Section 59-7-620.
110 (d) (i) In addition to the reviews described in this Subsection (3), the committee shall
111 conduct a review of a tax credit described in this chapter that is enacted on or after January 1,
112 2016.
113 (ii) The committee shall complete a review described in this Subsection (3)(d) three
114 years after the effective date of the tax credit and every three years after the initial review date.
115 Section 2. Section 59-7-612 is amended to read:
116 59-7-612. Tax credits for research activities conducted in the state -- Carry
117 forward -- Commission to report modification or repeal of certain federal provisions --
118 Revenue and Taxation Interim Committee study.
119 (1) (a) A taxpayer meeting the requirements of this section may claim the following
120 nonrefundable tax credits:
121 (i) a research tax credit of 5% of the taxpayer's qualified research expenses for the
122 current taxable year that exceed the base amount provided for under Subsection (4);
123 (ii) a tax credit for a payment to a qualified organization for basic research as provided
124 in Section 41(e), Internal Revenue Code, of 5% for the current taxable year that exceed the
125 base amount provided for under Subsection (4); and
126 (iii) a tax credit equal to 7.5% of the taxpayer's qualified research expenses for the
127 current taxable year.
128 (b) Subject to Subsection (5), a taxpayer may claim a tax credit under:
129 (i) Subsection (1)(a)(i) or (1)(a)(iii), for the taxable year for which the taxpayer incurs
130 the qualified research expenses; or
131 (ii) Subsection (1)(a)(ii), for the taxable year for which the taxpayer makes the payment
132 to the qualified organization.
133 (c) The tax credits provided for in this section do not include the alternative
134 incremental credit provided for in Section 41(c)(4), Internal Revenue Code.
135 (2) For purposes of claiming a tax credit under this section, a unitary group as defined
136 in Section 59-7-101 is considered to be one taxpayer.
137 (3) Except as specifically provided for in this section:
138 (a) the tax credits authorized under Subsection (1) shall be calculated as provided in
139 Section 41, Internal Revenue Code; and
140 (b) the definitions provided in Section 41, Internal Revenue Code, apply in calculating
141 the tax credits authorized under Subsection (1).
142 (4) For purposes of this section:
143 (a) the base amount shall be calculated as provided in Sections 41(c) and 41(h),
144 Internal Revenue Code, except that:
145 (i) the base amount does not include the calculation of the alternative incremental
146 credit provided for in Section 41(c)(4), Internal Revenue Code;
147 (ii) a taxpayer's gross receipts include only those gross receipts attributable to sources
148 within this state as provided in Part 3, Allocation and Apportionment of Income - Utah
149 UDITPA Provisions; and
150 (iii) notwithstanding Section 41(c), Internal Revenue Code, for purposes of calculating
151 the base amount, a taxpayer:
152 (A) may elect to be treated as a start-up company as provided in Section 41(c)(3)(B)
153 regardless of whether the taxpayer meets the requirements of Section 41(c)(3)(B)(i)(I) or (II);
154 and
155 (B) may not revoke an election to be treated as a start-up company under Subsection
156 (4)(a)(iii)(A);
157 (b) "basic research" is as defined in Section 41(e)(7), Internal Revenue Code, except
158 that the term includes only basic research conducted in this state;
159 (c) "qualified research" is as defined in Section 41(d), Internal Revenue Code, except
160 that the term includes only qualified research conducted in this state;
161 (d) "qualified research expenses" is as defined and calculated in Section 41(b), Internal
162 Revenue Code, except that the term includes only:
163 (i) in-house research expenses incurred in this state; and
164 (ii) contract research expenses incurred in this state; and
165 (e) a tax credit provided for in this section is not terminated if a credit terminates under
166 Section 41, Internal Revenue Code.
167 (5) (a) If the amount of a tax credit claimed by a taxpayer under Subsection (1)(a)(i) or
168 (ii) exceeds the taxpayer's tax liability under this chapter for a taxable year, the amount of the
169 tax credit exceeding the tax liability:
170 (i) may be carried forward for a period that does not exceed the next 14 taxable years;
171 and
172 (ii) may not be carried back to a taxable year preceding the current taxable year.
173 (b) A taxpayer may not carry forward the tax credit allowed by Subsection (1)(a)(iii).
174 (6) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
175 commission may make rules for purposes of this section prescribing a certification process for
176 qualified organizations to ensure that amounts paid to the qualified organizations are for basic
177 research conducted in this state.
178 (7) If a provision of Section 41, Internal Revenue Code, is modified or repealed, the
179 commission shall report the modification or repeal to the Revenue and Taxation Interim
180 Committee within 60 days after the day on which the modification or repeal becomes effective.
181 (8) (a) The Revenue and Taxation Interim Committee shall review the tax credits
182 provided for in this section on or before October 1 of the year after the year in which the
183 commission reports under Subsection (7) a modification or repeal of a provision of Section 41,
184 Internal Revenue Code.
185 (b) The review described in Subsection (8)(a) is in addition to the review required by
186 Section 59-7-159.
187 [
188 Committee is not required to review the tax credits provided for in this section if the only
189 modification to a provision of Section 41, Internal Revenue Code, is the extension of the
190 termination date provided for in Section 41(h), Internal Revenue Code.
191 [
192 this section:
193 (i) the cost of the tax credits provided for in this section;
194 (ii) the purpose and effectiveness of the tax credits provided for in this section;
195 (iii) whether the tax credits provided for in this section benefit the state; and
196 (iv) whether the tax credits provided for in this section should be:
197 (A) continued;
198 (B) modified; or
199 (C) repealed.
200 [
201 provided for in this section, the committee shall issue a report [
202 Taxation Interim Committee's findings [
203
204
205 Section 3. Section 59-7-614 is amended to read:
206 59-7-614. Renewable energy systems tax credits -- Definitions -- Certification --
207 Rulemaking authority -- Revenue and Taxation Interim Committee study.
208 (1) As used in this section:
209 (a) (i) "Active solar system" means a system of equipment that is capable of:
210 (A) collecting and converting incident solar radiation into thermal, mechanical, or
211 electrical energy; and
212 (B) transferring a form of energy described in Subsection (1)(a)(i)(A) by a separate
213 apparatus to storage or to the point of use.
214 (ii) "Active solar system" includes water heating, space heating or cooling, and
215 electrical or mechanical energy generation.
216 (b) "Biomass system" means a system of apparatus and equipment for use in:
217 (i) converting material into biomass energy, as defined in Section 59-12-102; and
218 (ii) transporting the biomass energy by separate apparatus to the point of use or storage.
219 (c) "Commercial energy system" means a system that is:
220 (i) (A) an active solar system;
221 (B) a biomass system;
222 (C) a direct use geothermal system;
223 (D) a geothermal electricity system;
224 (E) a geothermal heat pump system;
225 (F) a hydroenergy system;
226 (G) a passive solar system; or
227 (H) a wind system;
228 (ii) located in the state; and
229 (iii) used:
230 (A) to supply energy to a commercial unit; or
231 (B) as a commercial enterprise.
232 (d) "Commercial enterprise" means an entity, the purpose of which is to produce
233 electrical, mechanical, or thermal energy for sale from a commercial energy system.
234 (e) (i) "Commercial unit" means a building or structure that an entity uses to transact
235 business.
236 (ii) Notwithstanding Subsection (1)(e)(i):
237 (A) with respect to an active solar system used for agricultural water pumping or a wind
238 system, each individual energy generating device is considered to be a commercial unit; or
239 (B) if an energy system is the building or structure that an entity uses to transact
240 business, a commercial unit is the complete energy system itself.
241 (f) "Direct use geothermal system" means a system of apparatus and equipment that
242 enables the direct use of geothermal energy to meet energy needs, including heating a building,
243 an industrial process, and aquaculture.
244 (g) "Geothermal electricity" means energy that is:
245 (i) contained in heat that continuously flows outward from the earth; and
246 (ii) used as a sole source of energy to produce electricity.
247 (h) "Geothermal energy" means energy generated by heat that is contained in the earth.
248 (i) "Geothermal heat pump system" means a system of apparatus and equipment that:
249 (i) enables the use of thermal properties contained in the earth at temperatures well
250 below 100 degrees Fahrenheit; and
251 (ii) helps meet heating and cooling needs of a structure.
252 (j) "Hydroenergy system" means a system of apparatus and equipment that is capable
253 of:
254 (i) intercepting and converting kinetic water energy into electrical or mechanical
255 energy; and
256 (ii) transferring this form of energy by separate apparatus to the point of use or storage.
257 (k) "Office" means the Office of Energy Development created in Section 63M-4-401.
258 (l) (i) "Passive solar system" means a direct thermal system that utilizes the structure of
259 a building and its operable components to provide for collection, storage, and distribution of
260 heating or cooling during the appropriate times of the year by utilizing the climate resources
261 available at the site.
262 (ii) "Passive solar system" includes those portions and components of a building that
263 are expressly designed and required for the collection, storage, and distribution of solar energy.
264 (m) (i) "Principal recovery portion" means the portion of a lease payment that
265 constitutes the cost a person incurs in acquiring a commercial energy system.
266 (ii) "Principal recovery portion" does not include:
267 (A) an interest charge; or
268 (B) a maintenance expense.
269 (n) "Residential energy system" means the following used to supply energy to or for a
270 residential unit:
271 (i) an active solar system;
272 (ii) a biomass system;
273 (iii) a direct use geothermal system;
274 (iv) a geothermal heat pump system;
275 (v) a hydroenergy system;
276 (vi) a passive solar system; or
277 (vii) a wind system.
278 (o) (i) "Residential unit" means a house, condominium, apartment, or similar dwelling
279 unit that:
280 (A) is located in the state; and
281 (B) serves as a dwelling for a person, group of persons, or a family.
282 (ii) "Residential unit" does not include property subject to a fee under:
283 (A) Section 59-2-404;
284 (B) Section 59-2-405;
285 (C) Section 59-2-405.1;
286 (D) Section 59-2-405.2; or
287 (E) Section 59-2-405.3.
288 (p) "Wind system" means a system of apparatus and equipment that is capable of:
289 (i) intercepting and converting wind energy into mechanical or electrical energy; and
290 (ii) transferring these forms of energy by a separate apparatus to the point of use, sale,
291 or storage.
292 (2) A taxpayer may claim an energy system tax credit as provided in this section
293 against a tax due under this chapter for a taxable year.
294 (3) (a) Subject to the other provisions of this Subsection (3), a taxpayer may claim a
295 nonrefundable tax credit under this Subsection (3) with respect to a residential unit the taxpayer
296 owns or uses if:
297 (i) the taxpayer:
298 (A) purchases and completes a residential energy system to supply all or part of the
299 energy required for the residential unit; or
300 (B) participates in the financing of a residential energy system to supply all or part of
301 the energy required for the residential unit;
302 (ii) the residential energy system is completed and placed in service on or after January
303 1, 2007; and
304 (iii) the taxpayer obtains a written certification from the office in accordance with
305 Subsection (7).
306 (b) (i) Subject to Subsections (3)(b)(ii) through (v), the tax credit is equal to 25% of the
307 reasonable costs of each residential energy system installed with respect to each residential unit
308 the taxpayer owns or uses.
309 (ii) A tax credit under this Subsection (3) may include installation costs.
310 (iii) A taxpayer may claim a tax credit under this Subsection (3) for the taxable year in
311 which the residential energy system is completed and placed in service.
312 (iv) If the amount of a tax credit under this Subsection (3) exceeds a taxpayer's tax
313 liability under this chapter for a taxable year, the amount of the tax credit exceeding the
314 liability may be carried forward for a period that does not exceed the next four taxable years.
315 (v) The total amount of tax credit a taxpayer may claim under this Subsection (3) may
316 not exceed $2,000 per residential unit.
317 (c) If a taxpayer sells a residential unit to another person before the taxpayer claims the
318 tax credit under this Subsection (3):
319 (i) the taxpayer may assign the tax credit to the other person; and
320 (ii) (A) if the other person files a return under this chapter, the other person may claim
321 the tax credit under this section as if the other person had met the requirements of this section
322 to claim the tax credit; or
323 (B) if the other person files a return under Chapter 10, Individual Income Tax Act, the
324 other person may claim the tax credit under Section 59-10-1014 as if the other person had met
325 the requirements of Section 59-10-1014 to claim the tax credit.
326 (4) (a) Subject to the other provisions of this Subsection (4), a taxpayer may claim a
327 refundable tax credit under this Subsection (4) with respect to a commercial energy system if:
328 (i) the commercial energy system does not use:
329 (A) wind, geothermal electricity, solar, or biomass equipment capable of producing a
330 total of 660 or more kilowatts of electricity; or
331 (B) solar equipment capable of producing 2,000 or more kilowatts of electricity;
332 (ii) the taxpayer purchases or participates in the financing of the commercial energy
333 system;
334 (iii) (A) the commercial energy system supplies all or part of the energy required by
335 commercial units owned or used by the taxpayer; or
336 (B) the taxpayer sells all or part of the energy produced by the commercial energy
337 system as a commercial enterprise;
338 (iv) the commercial energy system is completed and placed in service on or after
339 January 1, 2007; and
340 (v) the taxpayer obtains a written certification from the office in accordance with
341 Subsection (7).
342 (b) (i) Subject to Subsections (4)(b)(ii) through (v), the tax credit is equal to 10% of the
343 reasonable costs of the commercial energy system.
344 (ii) A tax credit under this Subsection (4) may include installation costs.
345 (iii) A taxpayer may claim a tax credit under this Subsection (4) for the taxable year in
346 which the commercial energy system is completed and placed in service.
347 (iv) A tax credit under this Subsection (4) may not be carried forward or carried back.
348 (v) The total amount of tax credit a taxpayer may claim under this Subsection (4) may
349 not exceed $50,000 per commercial unit.
350 (c) (i) Subject to Subsections (4)(c)(ii) and (iii), a taxpayer that is a lessee of a
351 commercial energy system installed on a commercial unit may claim a tax credit under this
352 Subsection (4) if the taxpayer confirms that the lessor irrevocably elects not to claim the tax
353 credit.
354 (ii) A taxpayer described in Subsection (4)(c)(i) may claim as a tax credit under this
355 Subsection (4) only the principal recovery portion of the lease payments.
356 (iii) A taxpayer described in Subsection (4)(c)(i) may claim a tax credit under this
357 Subsection (4) for a period that does not exceed seven taxable years after the date the lease
358 begins, as stated in the lease agreement.
359 (5) (a) Subject to the other provisions of this Subsection (5), a taxpayer may claim a
360 refundable tax credit under this Subsection (5) with respect to a commercial energy system if:
361 (i) the commercial energy system uses wind, geothermal electricity, or biomass
362 equipment capable of producing a total of 660 or more kilowatts of electricity;
363 (ii) (A) the commercial energy system supplies all or part of the energy required by
364 commercial units owned or used by the taxpayer; or
365 (B) the taxpayer sells all or part of the energy produced by the commercial energy
366 system as a commercial enterprise;
367 (iii) the commercial energy system is completed and placed in service on or after
368 January 1, 2007; and
369 (iv) the taxpayer obtains a written certification from the office in accordance with
370 Subsection (7).
371 (b) (i) Subject to Subsections (5)(b)(ii) and (iii), a tax credit under this Subsection (5)
372 is equal to the product of:
373 (A) 0.35 cents; and
374 (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
375 (ii) A tax credit under this Subsection (5) may be claimed for production occurring
376 during a period of 48 months beginning with the month in which the commercial energy
377 system is placed in commercial service.
378 (iii) A tax credit under this Subsection (5) may not be carried forward or carried back.
379 (c) A taxpayer that is a lessee of a commercial energy system installed on a commercial
380 unit may claim a tax credit under this Subsection (5) if the taxpayer confirms that the lessor
381 irrevocably elects not to claim the tax credit.
382 (6) (a) Subject to the other provisions of this Subsection (6), a taxpayer may claim a
383 refundable tax credit as provided in this Subsection (6) if:
384 (i) the taxpayer owns a commercial energy system that uses solar equipment capable of
385 producing a total of 660 or more kilowatts of electricity;
386 (ii) (A) the commercial energy system supplies all or part of the energy required by
387 commercial units owned or used by the taxpayer; or
388 (B) the taxpayer sells all or part of the energy produced by the commercial energy
389 system as a commercial enterprise;
390 (iii) the taxpayer does not claim a tax credit under Subsection (4);
391 (iv) the commercial energy system is completed and placed in service on or after
392 January 1, 2015; and
393 (v) the taxpayer obtains a written certification from the office in accordance with
394 Subsection (7).
395 (b) (i) Subject to Subsections (6)(b)(ii) and (iii), a tax credit under this Subsection (6)
396 is equal to the product of:
397 (A) 0.35 cents; and
398 (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
399 (ii) A tax credit under this Subsection (6) may be claimed for production occurring
400 during a period of 48 months beginning with the month in which the commercial energy
401 system is placed in commercial service.
402 (iii) A tax credit under this Subsection (6) may not be carried forward or carried back.
403 (c) A taxpayer that is a lessee of a commercial energy system installed on a commercial
404 unit may claim a tax credit under this Subsection (6) if the taxpayer confirms that the lessor
405 irrevocably elects not to claim the tax credit.
406 (7) (a) Before a taxpayer may claim a tax credit under this section, the taxpayer shall
407 obtain a written certification from the office.
408 (b) The office shall issue a taxpayer a written certification if the office determines that:
409 (i) the taxpayer meets the requirements of this section to receive a tax credit; and
410 (ii) the residential energy system or commercial energy system with respect to which
411 the taxpayer seeks to claim a tax credit:
412 (A) has been completely installed;
413 (B) is a viable system for saving or producing energy from renewable resources; and
414 (C) is safe, reliable, efficient, and technically feasible to ensure that the residential
415 energy system or commercial energy system uses the state's renewable and nonrenewable
416 energy resources in an appropriate and economic manner.
417 (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
418 office may make rules:
419 (i) for determining whether a residential energy system or commercial energy system
420 meets the requirements of Subsection (7)(b)(ii); and
421 (ii) for purposes of a tax credit under Subsection (3) or (4), establishing the reasonable
422 costs of a residential energy system or a commercial energy system, as an amount per unit of
423 energy production.
424 (d) A taxpayer that obtains a written certification from the office shall retain the
425 certification for the same time period a person is required to keep books and records under
426 Section 59-1-1406.
427 (8) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
428 commission may make rules to address the certification of a tax credit under this section.
429 (9) A tax credit under this section is in addition to any tax credits provided under the
430 laws or rules and regulations of the United States.
431 [
432
433
434
435 [
436
437
438 Section 4. Section 59-7-614.2 is amended to read:
439 59-7-614.2. Refundable economic development tax credit.
440 (1) As used in this section:
441 (a) "Business entity" means a taxpayer that meets the definition of "business entity" as
442 defined in Section 63N-2-103.
443 (b) "Community development and renewal agency" [
444 is defined in Section 17C-1-102.
445 (c) "Local government entity" [
446 63N-2-103.
447 (d) "Office" means the Governor's Office of Economic Development.
448 (2) Subject to the other provisions of this section, a business entity, local government
449 entity, or community development and renewal agency may claim a refundable tax credit for
450 economic development.
451 (3) The tax credit under this section is the amount listed as the tax credit amount on the
452 tax credit certificate that the office issues to the business entity, local government entity, or
453 community development and renewal agency for the taxable year.
454 (4) A community development and renewal agency may claim a tax credit under this
455 section only if a local government entity assigns the tax credit to the community development
456 and renewal agency in accordance with Section 63N-2-104.
457 (5) (a) In accordance with any rules prescribed by the commission under Subsection
458 (5)(b), the commission shall make a refund to the following that claim a tax credit under this
459 section:
460 (i) a local government entity;
461 (ii) a community development and renewal agency; or
462 (iii) a business entity if the amount of the tax credit exceeds the business entity's tax
463 liability for a taxable year.
464 (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
465 commission may make rules providing procedures for making a refund to a business entity,
466 local government entity, or community development and renewal agency as required by
467 Subsection (5)(a).
468 (6) (a) [
469 accordance with Section 59-7-159, the Revenue and Taxation Interim Committee shall study
470 the tax credit allowed by this section and make recommendations [
471
472 repealed.
473 (b) [
474 this Subsection (6), the office shall provide the following information [
475
476 (i) the amount of tax credit that the office grants to each business entity, local
477 government entity, or community development and renewal agency for each calendar year;
478 (ii) the criteria that the office uses in granting a tax credit;
479 (iii) (A) for a business entity, the new state revenues generated by the business entity
480 for the calendar year; or
481 (B) for a local government entity, regardless of whether the local government entity
482 assigns the tax credit in accordance with Section 63N-2-104, the new state revenues generated
483 as a result of a new commercial project within the local government entity for each calendar
484 year;
485 (iv) the information contained in the office's latest report to the Legislature under
486 Section 63N-2-106; and
487 (v) any other information that the Revenue and Taxation Interim Committee requests.
488 (c) (i) In providing the information described in Subsection (6)(b), the office shall
489 redact information that identifies a recipient of a tax credit under this section.
490 (ii) If, notwithstanding the redactions made under Subsection (6)(c)(i), reporting the
491 information described in Subsection (6)(b) might disclose the identity of a recipient of a tax
492 credit, the office may file a request with the Revenue and Taxation Interim Committee to
493 provide the information described in Subsection (6)(b) in the aggregate for all entities and
494 agencies that receive the tax credit under this section.
495 [
496 Revenue and Taxation Interim Committee's recommendations under Subsection (6)(a) include
497 an evaluation of:
498 (i) the cost of the tax credit to the state;
499 (ii) the purpose and effectiveness of the tax credit; and
500 (iii) the extent to which the state benefits from the tax credit.
501 Section 5. Section 59-7-614.5 is amended to read:
502 59-7-614.5. Refundable motion picture tax credit.
503 (1) As used in this section:
504 (a) "Motion picture company" means a taxpayer that meets the definition of a motion
505 picture company under Section 63N-8-102.
506 (b) "Office" means the Governor's Office of Economic Development.
507 (c) "State-approved production" [
508 term is defined in Section 63N-8-102.
509 (2) For a taxable [
510 company may claim a refundable tax credit for a state-approved production.
511 (3) The tax credit under this section is the amount listed as the tax credit amount on the
512 tax credit certificate that the office issues to a motion picture company under Section
513 63N-8-103 for the taxable year.
514 (4) (a) In accordance with any rules prescribed by the commission under Subsection
515 (4)(b), the commission shall make a refund to a motion picture company that claims a tax
516 credit under this section if the amount of the tax credit exceeds the motion picture company's
517 tax liability for a taxable year.
518 (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
519 commission may make rules providing procedures for making a refund to a motion picture
520 company as required by Subsection (4)(a).
521 (5) (a) [
522 accordance with Section 59-7-159, the Revenue and Taxation Interim Committee shall study
523 the tax credit allowed by this section and make recommendations [
524
525 repealed.
526 (b) [
527 required by this Subsection (5), the office shall provide the following information , if available
528 to the office, to the [
529 Analyst :
530 [
531 for each calendar year;
532 [
533 [
534 picture company for each calendar year;
535 [
536 Section 63N-8-105; and
537 [
538
539 (ii) (A) In providing the information described in Subsection (5)(b)(i), the office shall
540 redact information that identifies a recipient of a tax credit under this section.
541 (B) If, notwithstanding the redactions made under Subsection (5)(b)(ii), reporting the
542 information described in Subsection (5)(b)(i) might disclose the identity of a recipient of a tax
543 credit, the office may file a request with the Revenue and Taxation Interim Committee to
544 provide the information described in Subsection (5)(b)(i) in the aggregate for all motion picture
545 companies that receive the tax credit under this section.
546 (c) As part of the study required by this Subsection (5), the Office of the Legislative
547 Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
548 analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
549 office under Subsection (5)(b).
550 [
551 Revenue and Taxation Interim Committee's recommendations under Subsection (5)(a) include
552 an evaluation of:
553 (i) the cost of the tax credit to the state;
554 (ii) the effectiveness of the tax credit; and
555 (iii) the extent to which the state benefits from the tax credit.
556 Section 6. Section 59-7-614.7 is amended to read:
557 59-7-614.7. Nonrefundable alternative energy development tax credit.
558 (1) As used in this section:
559 (a) "Alternative energy entity" [
560 63M-4-502.
561 (b) "Alternative energy project" [
562 Section 63M-4-502.
563 (c) "Office" [
564 63M-4-401.
565 (2) Subject to the other provisions of this section, an alternative energy entity may
566 claim a nonrefundable tax credit for alternative energy development as provided in this section.
567 (3) The tax credit under this section is the amount listed as the tax credit amount on a
568 tax credit certificate that the office issues under Title 63M, Chapter 4, Part 5, Alternative
569 Energy Development Tax Credit Act, to the alternative energy entity for the taxable year.
570 (4) An alternative energy entity may carry forward a tax credit under this section for a
571 period that does not exceed the next seven taxable years if:
572 (a) the alternative energy entity is allowed to claim a tax credit under this section for a
573 taxable year; and
574 (b) the amount of the tax credit exceeds the alternative energy entity's tax liability
575 under this chapter for that taxable year.
576 (5) (a) [
577 accordance with Section 59-7-159, the Revenue and Taxation Interim Committee shall study
578 the tax credit allowed by this section and make recommendations [
579
580 repealed.
581 (b) [
582 required by this Subsection (5), the office shall provide the following information , if available
583 to the office, to the [
584 Analyst:
585 [
586 for each taxable year;
587 [
588 [
589 under Section 63M-4-505; and
590 [
591 Office of the Legislative Fiscal Analyst requests.
592 (ii) (A) In providing the information described in Subsection (5)(b)(i), the office shall
593 redact information that identifies a recipient of a tax credit under this section.
594 (B) If, notwithstanding the redactions made under Subsection (5)(b)(ii), reporting the
595 information described in Subsection (5)(b)(i) might disclose the identity of a recipient of a tax
596 credit, the office may file a request with the Revenue and Taxation Interim Committee to
597 provide the information described in Subsection (5)(b)(i) in the aggregate for all alternative
598 energy entities that receive the tax credit under this section.
599 (c) As part of the study required by this Subsection (5), the Office of the Legislative
600 Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
601 analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
602 office under Subsection (5)(b).
603 [
604 Revenue and Taxation Interim Committee's recommendations under Subsection (5)(a) include
605 an evaluation of:
606 (i) the cost of the tax credit to the state;
607 (ii) the purpose and effectiveness of the tax credit; and
608 (iii) the extent to which the state benefits from the tax credit.
609 Section 7. Section 59-7-614.8 is amended to read:
610 59-7-614.8. Nonrefundable alternative energy manufacturing tax credit.
611 (1) As used in this section:
612 (a) "Alternative energy entity" [
613 63N-2-702.
614 (b) "Alternative energy manufacturing project" [
615 defined in Section 63N-2-702.
616 (c) "Office" means the Governor's Office of Economic Development.
617 (2) Subject to the other provisions of this section, an alternative energy entity may
618 claim a nonrefundable tax credit for alternative energy manufacturing as provided in this
619 section.
620 (3) The tax credit under this section is the amount listed as the tax credit amount on a
621 tax credit certificate that the office issues under Title 63N, Chapter 2, Part 7, Alternative
622 Energy Manufacturing Tax Credit Act, to the alternative energy entity for the taxable year.
623 (4) An alternative energy entity may carry forward a tax credit under this section for a
624 period that does not exceed the next seven taxable years if:
625 (a) the alternative energy entity is allowed to claim a tax credit under this section for a
626 taxable year; and
627 (b) the amount of the tax credit exceeds the alternative energy entity's tax liability
628 under this chapter for that taxable year.
629 (5) (a) [
630 accordance with Section 59-7-159, the Revenue and Taxation Interim Committee shall study
631 the tax credit allowed by this section and make recommendations [
632
633 repealed.
634 (b) [
635 required by this Subsection (5), the office shall provide the following information , if available
636 to the office, to the [
637 Analyst :
638 [
639 for each taxable year;
640 [
641 project;
642 [
643 Section [
644 [
645 Office of the Legislative Fiscal Analyst requests.
646 (ii) (A) In providing the information described in Subsection (5)(b)(i), the office shall
647 redact information that identifies a recipient of a tax credit under this section.
648 (B) If, notwithstanding the redactions made under Subsection (5)(b)(ii), reporting the
649 information described in Subsection (5)(b)(i) might disclose the identity of a recipient of a tax
650 credit, the office may file a request with the Revenue and Taxation Interim Committee to
651 provide the information described in Subsection (5)(b)(i) in the aggregate for all alternative
652 energy entities that receive the tax credit under this section.
653 (c) As part of the study required by this Subsection (5), the Office of the Legislative
654 Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
655 analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
656 office under Subsection (5)(b).
657 [
658 Revenue and Taxation Interim Committee's recommendations under Subsection (5)(a) include
659 an evaluation of:
660 (i) the cost of the tax credit to the state;
661 (ii) the purpose and effectiveness of the tax credit; and
662 (iii) the extent to which the state benefits from the tax credit.
663 Section 8. Section 59-7-619 is amended to read:
664 59-7-619. Nonrefundable high cost infrastructure development tax credit.
665 (1) As used in this section:
666 (a) "High cost infrastructure project" means the same as that term is defined in Section
667 63M-4-602.
668 (b) "Infrastructure cost-burdened entity" means the same as that term is defined in
669 Section 63M-4-602.
670 (c) "Infrastructure-related revenue" means the same as that term is defined in Section
671 63M-4-602.
672 (d) "Office" means the Office of Energy Development created in Section 63M-4-401.
673 (2) Subject to the other provisions of this section, a corporation that is an infrastructure
674 cost-burdened entity may claim a nonrefundable tax credit for development of a high cost
675 infrastructure project as provided in this section.
676 (3) The tax credit under this section is the amount listed as the tax credit amount on a
677 tax credit certificate that the office issues under Title 63M, Chapter 4, Part 6, High Cost
678 Infrastructure Development Tax Credit Act, to the infrastructure cost-burdened entity for the
679 taxable year.
680 (4) An infrastructure cost-burdened entity may carry forward a tax credit under this
681 section for a period that does not exceed the next seven taxable years if:
682 (a) the infrastructure cost-burdened entity is allowed to claim a tax credit under this
683 section for a taxable year; and
684 (b) the amount of the tax credit exceeds the infrastructure cost-burdened entity's tax
685 liability under this chapter for that taxable year.
686 (5) (a) [
687 accordance with Section 59-7-159, the Revenue and Taxation Interim Committee shall study
688 the tax credit allowed by this section and make recommendations [
689
690 repealed.
691 (b) [
692 required by this Subsection (5), the office shall provide the following information , if available
693 to the office, to the [
694 Analyst :
695 [
696 cost-burdened entity for each taxable year;
697 [
698 project;
699 [
700 under Section 63M-4-505; and
701 [
702 Office of the Legislative Fiscal Analyst requests.
703 (ii) (A) In providing the information described in Subsection (5)(b)(i), the office shall
704 redact information that identifies a recipient of a tax credit under this section.
705 (B) If, notwithstanding the redactions made under Subsection (5)(b)(ii), reporting the
706 information described in Subsection (5)(b)(i) might disclose the identity of a recipient of a tax
707 credit, the office may file a request with the Revenue and Taxation Interim Committee to
708 provide the information described in Subsection (5)(b)(i) in the aggregate for all infrastructure
709 cost-burdened entities that receive the tax credit under this section.
710 (c) As part of the study required by this Subsection (5), the Office of the Legislative
711 Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
712 analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
713 office under Subsection (5)(b).
714 [
715 and Taxation Interim Committee's recommendations under Subsection (5)(a) include an
716 evaluation of:
717 (i) the cost of the tax credit to the state;
718 (ii) the purpose and effectiveness of the tax credit; and
719 (iii) the extent to which the state benefits from the tax credit.
720 Section 9. Section 59-9-107 is amended to read:
721 59-9-107. Nonrefundable small business jobs credit.
722 (1) As used in this section:
723 (a) "Credit allowance date" [
724 63N-2-602.
725 (b) "Office" [
726 (c) "Tax credit certificate" [
727 63N-2-602.
728 (2) An entity may claim a nonrefundable tax credit against a tax liability under this
729 chapter in accordance with this section if the entity is issued a tax credit certificate by the office
730 under Subsection 63N-2-603(11). The office shall issue a tax credit certificate to an entity that
731 is allocated tax credits under Subsection 63N-2-603(11)(e).
732 (3) The tax credit under this section is the amount listed as the tax credit amount on the
733 tax credit certificate issued to the entity for the calendar year.
734 (4) An entity may carry forward a tax credit under this section for seven years if:
735 (a) the entity is allowed to claim a tax credit under this section for a calendar year; and
736 (b) the amount of the tax credit exceeds the entity's tax liability under this chapter for
737 that calendar year.
738 (5) An entity required to pay a retaliatory tax levied under this chapter for a reason
739 other than claiming the tax credit may claim the tax credit after the retaliatory tax amount is
740 calculated, and the tax credit may be used to offset retaliatory tax liability.
741 (6) Notwithstanding the other provisions of this section, this section does not apply to
742 an admitted insurer to the extent that the admitted insurer writes workers' compensation
743 insurance in this state and has premiums taxed under Subsection 59-9-101(2).
744 (7) (a) On or before November 30, 2018, and every three years after November 30,
745 2018, the Revenue and Taxation Interim Committee shall review the tax credits provided by
746 this section and make recommendations concerning whether the tax credits should be
747 continued, modified, or repealed.
748 (b) In conducting the review required under Subsection (7)(a), the Revenue and
749 Taxation Interim Committee shall:
750 (i) schedule time on at least one committee agenda to conduct the review;
751 (ii) invite state agencies, individuals, and organizations concerned with the tax credit
752 under review to provide testimony;
753 (iii) ensure that the Revenue and Taxation Interim Committee's recommendations
754 under this section include an evaluation of:
755 (A) the cost of the tax credit to the state;
756 (B) the purpose and effectiveness of the tax credit; and
757 (C) the extent to which the state benefits from the tax credit; and
758 (iv) undertake other review efforts as determined by the chairs of the Revenue and
759 Taxation Interim Committee.
760 Section 10. Section 59-10-137 is enacted to read:
761 59-10-137. Review of credits allowed under this chapter.
762 (1) As used in this section, "committee" means the Revenue and Taxation Interim
763 Committee.
764 (2) (a) The committee shall review the tax credits described in this chapter as provided
765 in Subsection (3) and make recommendations concerning whether the tax credits should be
766 continued, modified, or repealed.
767 (b) In conducting the review required under Subsection (2)(a), the committee shall:
768 (i) schedule time on at least one committee agenda to conduct the review;
769 (ii) invite state agencies, individuals, and organizations concerned with the tax credit
770 under review to provide testimony;
771 (iii) (A) invite the Governor's Office of Economic Development to present a summary
772 and analysis of the information for each tax credit regarding which the Governor's Office of
773 Economic Development is required to make a report under this chapter; and
774 (B) invite the Office of the Legislative Fiscal Analyst to present a summary and
775 analysis of the information for each tax credit regarding which the Office of the Legislative
776 Fiscal Analyst is required to make a report under this chapter;
777 (iv) ensure that the committee's recommendations under this section include an
778 evaluation of:
779 (A) the cost of the tax credit to the state;
780 (B) the purpose and effectiveness of the tax credit; and
781 (C) the extent to which the state benefits from the tax credit; and
782 (v) undertake other review efforts as determined by the committee chairs or as
783 otherwise required by law.
784 (3) (a) On or before November 30, 2016, and every three years after November 30,
785 2016, the committee shall conduct the review required under Subsection (2) of the tax credits
786 allowed under the following sections:
787 (i) Section 59-10-1007;
788 (ii) Section 59-10-1009;
789 (iii) Section 59-10-1014;
790 (iv) Section 59-10-1017;
791 (v) Section 59-10-1018;
792 (vi) Section 59-10-1019;
793 (vii) Section 59-10-1024;
794 (viii) Section 59-10-1029;
795 (ix) Section 59-10-1030;
796 (x) Section 59-10-1033; and
797 (xi) Section 59-10-1106.
798 (b) On or before November 30, 2017, and every three years after November 30, 2017,
799 the committee shall conduct the review required under Subsection (2) of the tax credits allowed
800 under the following sections:
801 (i) Section 59-10-1004;
802 (ii) Section 59-10-1010;
803 (iii) Section 59-10-1015;
804 (iv) Section 59-10-1025;
805 (v) Section 59-10-1027;
806 (vi) Section 59-10-1031;
807 (vii) Section 59-10-1032;
808 (viii) Section 59-10-1035;
809 (ix) Section 59-10-1104;
810 (x) Section 59-10-1105;
811 (xi) Section 59-10-1108; and
812 (xii) Section 59-10-1109.
813 (c) On or before November 30, 2018, and every three years after November 30, 2018,
814 the committee shall conduct the review required under Subsection (2) of the tax credits allowed
815 under the following sections:
816 (i) Section 59-10-1005;
817 (ii) Section 59-10-1006;
818 (iii) Section 59-10-1012;
819 (iv) Section 59-10-1013;
820 (v) Section 59-10-1021;
821 (vi) Section 59-10-1022;
822 (vii) Section 59-10-1023;
823 (viii) Section 59-10-1028;
824 (ix) Section 59-10-1034; and
825 (x) Section 59-10-1107.
826 (d) (i) In addition to the reviews described in this Subsection (3), the committee shall
827 conduct a review of a tax credit described in this chapter that is enacted on or after January 1,
828 2016.
829 (ii) The committee shall complete a review described in this Subsection (3)(d) three
830 years after the effective date of the tax credit and every three years after the initial review date.
831 Section 11. Section 59-10-1012 is amended to read:
832 59-10-1012. Tax credits for research activities conducted in the state -- Carry
833 forward -- Commission to report modification or repeal of certain federal provisions --
834 Revenue and Taxation Interim Committee study.
835 (1) (a) A claimant, estate, or trust meeting the requirements of this section may claim
836 the following nonrefundable tax credits:
837 (i) a research tax credit of 5% of the claimant's, estate's, or trust's qualified research
838 expenses for the current taxable year that exceed the base amount provided for under
839 Subsection (3);
840 (ii) a tax credit for a payment to a qualified organization for basic research as provided
841 in Section 41(e), Internal Revenue Code of 5% for the current taxable year that exceed the base
842 amount provided for under Subsection (3); and
843 (iii) a tax credit equal to 7.5% of the claimant's, estate's, or trust's qualified research
844 expenses for the current taxable year.
845 (b) Subject to Subsection (4), a claimant, estate, or trust may claim a tax credit under:
846 (i) Subsection (1)(a)(i) or (1)(a)(iii), for the taxable year for which the claimant, estate,
847 or trust incurs the qualified research expenses; or
848 (ii) Subsection (1)(a)(ii), for the taxable year for which the claimant, estate, or trust
849 makes the payment to the qualified organization.
850 (c) The tax credits provided for in this section do not include the alternative
851 incremental credit provided for in Section 41(c)(4), Internal Revenue Code.
852 (2) Except as specifically provided for in this section:
853 (a) the tax credits authorized under Subsection (1) shall be calculated as provided in
854 Section 41, Internal Revenue Code; and
855 (b) the definitions provided in Section 41, Internal Revenue Code, apply in calculating
856 the tax credits authorized under Subsection (1).
857 (3) For purposes of this section:
858 (a) the base amount shall be calculated as provided in Sections 41(c) and 41(h),
859 Internal Revenue Code, except that:
860 (i) the base amount does not include the calculation of the alternative incremental
861 credit provided for in Section 41(c)(4), Internal Revenue Code;
862 (ii) a claimant's, estate's, or trust's gross receipts include only those gross receipts
863 attributable to sources within this state as provided in Section 59-10-118; and
864 (iii) notwithstanding Section 41(c), Internal Revenue Code, for purposes of calculating
865 the base amount, a claimant, estate, or trust:
866 (A) may elect to be treated as a start-up company as provided in Section 41(c)(3)(B),
867 Internal Revenue Code, regardless of whether the claimant, estate, or trust meets the
868 requirements of Section 41(c)(3)(B)(i)(I) or (II), Internal Revenue Code; and
869 (B) may not revoke an election to be treated as a start-up company under Subsection
870 (3)(a)(iii)(A);
871 (b) "basic research" is as defined in Section 41(e)(7), Internal Revenue Code, except
872 that the term includes only basic research conducted in this state;
873 (c) "qualified research" is as defined in Section 41(d), Internal Revenue Code, except
874 that the term includes only qualified research conducted in this state;
875 (d) "qualified research expenses" is as defined and calculated in Section 41(b), Internal
876 Revenue Code, except that the term includes only:
877 (i) in-house research expenses incurred in this state; and
878 (ii) contract research expenses incurred in this state; and
879 (e) a tax credit provided for in this section is not terminated if a credit terminates under
880 Section 41, Internal Revenue Code.
881 (4) (a) If the amount of a tax credit claimed by a claimant, estate, or trust under
882 Subsection (1)(a)(i) or (ii) exceeds the claimant's, estate's, or trust's tax liability under this
883 chapter for a taxable year, the amount of the tax credit exceeding the tax liability:
884 (i) may be carried forward for a period that does not exceed the next 14 taxable years;
885 and
886 (ii) may not be carried back to a taxable year preceding the current taxable year.
887 (b) A claimant, estate, or trust may not carry forward the tax credit allowed by
888 Subsection (1)(a)(iii).
889 (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
890 commission may make rules for purposes of this section prescribing a certification process for
891 qualified organizations to ensure that amounts paid to the qualified organizations are for basic
892 research conducted in this state.
893 (6) If a provision of Section 41, Internal Revenue Code, is modified or repealed, the
894 commission shall report the modification or repeal to the Revenue and Taxation Interim
895 Committee within 60 days after the day on which the modification or repeal becomes effective.
896 (7) (a) The Revenue and Taxation Interim Committee shall review the tax credits
897 provided for in this section on or before October 1 of the year after the year in which the
898 commission reports under Subsection (6) a modification or repeal of a provision of Section 41,
899 Internal Revenue Code.
900 (b) The review described in Subsection (7)(a) is in addition to the review required by
901 Section 59-10-137.
902 [
903 Committee is not required to review the tax credits provided for in this section if the only
904 modification to a provision of Section 41, Internal Revenue Code, is the extension of the
905 termination date provided for in Section 41(h), Internal Revenue Code.
906 [
907 this section:
908 (i) the cost of the tax credits provided for in this section;
909 (ii) the purpose and effectiveness of the tax credits provided for in this section;
910 (iii) whether the tax credits provided for in this section benefit the state; and
911 (iv) whether the tax credits provided for in this section should be:
912 (A) continued;
913 (B) modified; or
914 (C) repealed.
915 [
916 provided for in this section, the committee shall issue a report [
917 Taxation Interim Committee's findings [
918
919
920 Section 12. Section 59-10-1013 is amended to read:
921 59-10-1013. Tax credits for machinery, equipment, or both primarily used for
922 conducting qualified research or basic research -- Carry forward -- Commission to report
923 modification or repeal of certain federal provisions -- Revenue and Taxation Interim
924 Committee study.
925 (1) As used in this section:
926 (a) "Basic research" [
927 Internal Revenue Code, except that the term includes only basic research conducted in this
928 state.
929 (b) "Equipment" includes:
930 (i) a computer;
931 (ii) computer equipment; and
932 (iii) computer software.
933 (c) "Purchase price":
934 (i) includes the cost of installing an item of machinery or equipment; and
935 (ii) does not include a tax imposed under Chapter 12, Sales and Use Tax Act, on an
936 item of machinery or equipment.
937 (d) "Qualified organization" [
938 41(e)(6), Internal Revenue Code.
939 (e) "Qualified research" [
940 Internal Revenue Code, except that the term includes only qualified research conducted in this
941 state.
942 (2) (a) Except as provided in Subsection (2)(c), for a taxable [
943 or after January 1, 1999, but beginning before December 31, 2010, a claimant, estate, or trust
944 meeting the requirements of this section may claim the following nonrefundable tax credits:
945 (i) a tax credit of 6% of the purchase price of machinery, equipment, or both:
946 (A) purchased by the claimant, estate, or trust during the taxable year;
947 (B) that is subject to a tax under Chapter 12, Sales and Use Tax Act; and
948 (C) that is primarily used to conduct qualified research in this state; and
949 (ii) a tax credit of 6% of the purchase price paid by the claimant, estate, or trust for
950 machinery, equipment, or both:
951 (A) purchased by the claimant, estate, or trust during the taxable year;
952 (B) that is subject to a tax under Chapter 12, Sales and Use Tax Act;
953 (C) that is donated to a qualified organization; and
954 (D) that is primarily used to conduct basic research in this state.
955 (b) Subject to Subsection (4), a claimant, estate, or trust may claim a tax credit under
956 this section for the taxable year for which the claimant, estate, or trust purchases the machinery,
957 equipment, or both.
958 (c) If a claimant, estate, or trust qualifies for a tax credit under Subsection (2)(a) for a
959 purchase of machinery, equipment, or both, the claimant, estate, or trust may not claim the tax
960 credit or carry the tax credit forward if the machinery, equipment, or both, is primarily used to
961 conduct qualified research in the state for a time period that is less than 12 consecutive months.
962 (3) Notwithstanding Section 41(h), Internal Revenue Code, a tax credit provided for in
963 this section is not terminated if a credit terminates under Section 41, Internal Revenue Code.
964 (4) If the amount of a tax credit claimed by a claimant, estate, or trust under this section
965 exceeds a claimant's, estate's, or trust's tax liability under this chapter for a taxable year, the
966 amount of the tax credit exceeding the tax liability:
967 (a) may be carried forward for a period that does not exceed the next 14 taxable years;
968 and
969 (b) may not be carried back to a taxable year preceding the current taxable year.
970 (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
971 commission may make rules for purposes of this section prescribing a certification process for
972 qualified organizations to ensure that machinery, equipment, or both provided to the qualified
973 organization is to be primarily used to conduct basic research in this state.
974 (6) If a provision of Section 41, Internal Revenue Code, is modified or repealed, the
975 commission shall report the modification or repeal to the Revenue and Taxation Interim
976 Committee within 60 days after the day on which the modification or repeal becomes effective.
977 (7) (a) The Revenue and Taxation Interim Committee shall review the tax credits
978 provided for in this section on or before October 1 of the year after the year in which the
979 commission reports under Subsection (6) a modification or repeal of a provision of Section 41,
980 Internal Revenue Code.
981 (b) The review described in Subsection (7)(a) is in addition to the review required by
982 Section 59-10-137.
983 [
984 Committee is not required to review the tax credits provided for in this section if the only
985 modification to a provision of Section 41, Internal Revenue Code, is the extension of the
986 termination date provided for in Section 41(h), Internal Revenue Code.
987 [
988 this section the:
989 (i) cost of the tax credits provided for in this section;
990 (ii) purpose and effectiveness of the tax credits provided for in this section;
991 (iii) whether the tax credits provided for in this section benefit the state; and
992 (iv) whether the tax credits provided for in this section should be:
993 (A) continued;
994 (B) modified; or
995 (C) repealed.
996 [
997 provided for in this section, the committee shall issue a report [
998 Taxation Interim Committee's findings [
999
1000
1001 Section 13. Section 59-10-1014 is amended to read:
1002 59-10-1014. Nonrefundable renewable energy systems tax credits -- Definitions --
1003 Certification -- Rulemaking authority -- Revenue and Taxation Interim Committee study.
1004 (1) As used in this section:
1005 (a) (i) "Active solar system" means a system of equipment that is capable of:
1006 (A) collecting and converting incident solar radiation into thermal, mechanical, or
1007 electrical energy; and
1008 (B) transferring a form of energy described in Subsection (1)(a)(i)(A) by a separate
1009 apparatus to storage or to the point of use.
1010 (ii) "Active solar system" includes water heating, space heating or cooling, and
1011 electrical or mechanical energy generation.
1012 (b) "Biomass system" means a system of apparatus and equipment for use in:
1013 (i) converting material into biomass energy, as defined in Section 59-12-102; and
1014 (ii) transporting the biomass energy by separate apparatus to the point of use or storage.
1015 (c) "Direct use geothermal system" means a system of apparatus and equipment that
1016 enables the direct use of geothermal energy to meet energy needs, including heating a building,
1017 an industrial process, and aquaculture.
1018 (d) "Geothermal electricity" means energy that is:
1019 (i) contained in heat that continuously flows outward from the earth; and
1020 (ii) used as a sole source of energy to produce electricity.
1021 (e) "Geothermal energy" means energy generated by heat that is contained in the earth.
1022 (f) "Geothermal heat pump system" means a system of apparatus and equipment that:
1023 (i) enables the use of thermal properties contained in the earth at temperatures well
1024 below 100 degrees Fahrenheit; and
1025 (ii) helps meet heating and cooling needs of a structure.
1026 (g) "Hydroenergy system" means a system of apparatus and equipment that is capable
1027 of:
1028 (i) intercepting and converting kinetic water energy into electrical or mechanical
1029 energy; and
1030 (ii) transferring this form of energy by separate apparatus to the point of use or storage.
1031 (h) "Office" means the Office of Energy Development created in Section 63M-4-401.
1032 (i) (i) "Passive solar system" means a direct thermal system that utilizes the structure of
1033 a building and its operable components to provide for collection, storage, and distribution of
1034 heating or cooling during the appropriate times of the year by utilizing the climate resources
1035 available at the site.
1036 (ii) "Passive solar system" includes those portions and components of a building that
1037 are expressly designed and required for the collection, storage, and distribution of solar energy.
1038 (j) (i) "Principal recovery portion" means the portion of a lease payment that
1039 constitutes the cost a person incurs in acquiring a residential energy system.
1040 (ii) "Principal recovery portion" does not include:
1041 (A) an interest charge; or
1042 (B) a maintenance expense.
1043 (k) "Residential energy system" means the following used to supply energy to or for a
1044 residential unit:
1045 (i) an active solar system;
1046 (ii) a biomass system;
1047 (iii) a direct use geothermal system;
1048 (iv) a geothermal heat pump system;
1049 (v) a hydroenergy system;
1050 (vi) a passive solar system; or
1051 (vii) a wind system.
1052 (l) (i) "Residential unit" means a house, condominium, apartment, or similar dwelling
1053 unit that:
1054 (A) is located in the state; and
1055 (B) serves as a dwelling for a person, group of persons, or a family.
1056 (ii) "Residential unit" does not include property subject to a fee under:
1057 (A) Section 59-2-404;
1058 (B) Section 59-2-405;
1059 (C) Section 59-2-405.1;
1060 (D) Section 59-2-405.2; or
1061 (E) Section 59-2-405.3.
1062 (m) "Wind system" means a system of apparatus and equipment that is capable of:
1063 (i) intercepting and converting wind energy into mechanical or electrical energy; and
1064 (ii) transferring these forms of energy by a separate apparatus to the point of use or
1065 storage.
1066 (2) A claimant, estate, or trust may claim an energy system tax credit as provided in
1067 this section against a tax due under this chapter for a taxable year.
1068 (3) (a) Subject to the other provisions of this Subsection (3), a claimant, estate, or trust
1069 may claim a nonrefundable tax credit under this Subsection (3) with respect to a residential unit
1070 the claimant, estate, or trust owns or uses if:
1071 (i) the claimant, estate, or trust:
1072 (A) purchases and completes a residential energy system to supply all or part of the
1073 energy required for the residential unit; or
1074 (B) participates in the financing of a residential energy system to supply all or part of
1075 the energy required for the residential unit;
1076 (ii) the residential energy system is completed and placed in service on or after January
1077 1, 2007; and
1078 (iii) the claimant, estate, or trust obtains a written certification from the office in
1079 accordance with Subsection (4).
1080 (b) (i) Subject to Subsections (3)(b)(ii) through (vi), the tax credit is equal to 25% of
1081 the reasonable costs of each residential energy system installed with respect to each residential
1082 unit the claimant, estate, or trust owns or uses.
1083 (ii) A tax credit under this Subsection (3) may include installation costs.
1084 (iii) A claimant, estate, or trust may claim a tax credit under this Subsection (3) for the
1085 taxable year in which the residential energy system is completed and placed in service.
1086 (iv) If the amount of a tax credit under this Subsection (3) exceeds a claimant's,
1087 estate's, or trust's tax liability under this chapter for a taxable year, the amount of the tax credit
1088 exceeding the liability may be carried forward for a period that does not exceed the next four
1089 taxable years.
1090 (v) The total amount of tax credit a claimant, estate, or trust may claim under this
1091 Subsection (3) may not exceed $2,000 per residential unit.
1092 (vi) A claimant, estate, or trust may claim a tax credit with respect to additional
1093 residential energy systems or parts of residential energy systems for a subsequent taxable year
1094 if the total amount of tax credit the claimant, estate, or trust claims does not exceed $2,000 per
1095 residential unit.
1096 (c) (i) Subject to Subsections (3)(c)(ii) and (iii), a claimant, estate, or trust that leases a
1097 residential energy system installed on a residential unit may claim a tax credit under this
1098 Subsection (3) if the claimant, estate, or trust confirms that the lessor irrevocably elects not to
1099 claim the tax credit.
1100 (ii) A claimant, estate, or trust described in Subsection (3)(c)(i) that leases a residential
1101 energy system may claim as a tax credit under this Subsection (3) only the principal recovery
1102 portion of the lease payments.
1103 (iii) A claimant, estate, or trust described in Subsection (3)(c)(i) that leases a residential
1104 energy system may claim a tax credit under this Subsection (3) for a period that does not
1105 exceed seven taxable years after the date the lease begins, as stated in the lease agreement.
1106 (d) If a claimant, estate, or trust sells a residential unit to another person before the
1107 claimant, estate, or trust claims the tax credit under this Subsection (3):
1108 (i) the claimant, estate, or trust may assign the tax credit to the other person; and
1109 (ii) (A) if the other person files a return under Chapter 7, Corporate Franchise and
1110 Income Taxes, the other person may claim the tax credit as if the other person had met the
1111 requirements of Section 59-7-614 to claim the tax credit; or
1112 (B) if the other person files a return under this chapter, the other person may claim the
1113 tax credit under this section as if the other person had met the requirements of this section to
1114 claim the tax credit.
1115 (4) (a) Before a claimant, estate, or trust may claim a tax credit under this section, the
1116 claimant, estate, or trust shall obtain a written certification from the office.
1117 (b) The office shall issue a claimant, estate, or trust a written certification if the office
1118 determines that:
1119 (i) the claimant, estate, or trust meets the requirements of this section to receive a tax
1120 credit; and
1121 (ii) the office determines that the residential energy system with respect to which the
1122 claimant, estate, or trust seeks to claim a tax credit:
1123 (A) has been completely installed;
1124 (B) is a viable system for saving or producing energy from renewable resources; and
1125 (C) is safe, reliable, efficient, and technically feasible to ensure that the residential
1126 energy system uses the state's renewable and nonrenewable energy resources in an appropriate
1127 and economic manner.
1128 (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1129 office may make rules:
1130 (i) for determining whether a residential energy system meets the requirements of
1131 Subsection (4)(b)(ii); and
1132 (ii) for purposes of a tax credit under Subsection (3), establishing the reasonable costs
1133 of a residential energy system, as an amount per unit of energy production.
1134 (d) A claimant, estate, or trust that obtains a written certification from the office shall
1135 retain the certification for the same time period a person is required to keep books and records
1136 under Section 59-1-1406.
1137 (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1138 commission may make rules to address the certification of a tax credit under this section.
1139 (6) A tax credit under this section is in addition to any tax credits provided under the
1140 laws or rules and regulations of the United States.
1141 (7) A purchaser of one or more solar units that claims a tax credit under Section
1142 59-10-1024 for the purchase of the one or more solar units may not claim a tax credit under this
1143 section for that purchase.
1144 [
1145
1146
1147
1148 [
1149
1150
1151 Section 14. Section 59-10-1024 is amended to read:
1152 59-10-1024. Nonrefundable tax credit for qualifying solar projects.
1153 (1) As used in this section:
1154 (a) "Active solar system" [
1155 59-10-1014.
1156 (b) "Purchaser" means a claimant, estate, or trust that purchases one or more solar units
1157 from a qualifying political subdivision.
1158 (c) "Qualifying political subdivision" means:
1159 (i) a city or town in this state;
1160 (ii) an interlocal entity created under Title 11, Chapter 13, Interlocal Cooperation Act;
1161 or
1162 (iii) a special service district created under Title 17D, Chapter 1, Special Service
1163 District Act.
1164 (d) "Qualifying solar project" means the portion of an active solar system:
1165 (i) that a qualifying political subdivision:
1166 (A) constructs;
1167 (B) controls; or
1168 (C) owns;
1169 (ii) with respect to which the qualifying political subdivision described in Subsection
1170 (1)(c)(i) sells one or more solar units; and
1171 (iii) that generates electrical output that is furnished:
1172 (A) to one or more residential units; or
1173 (B) for the benefit of one or more residential units.
1174 (e) "Residential unit" [
1175 59-10-1014.
1176 (f) "Solar unit" means a portion of the electrical output:
1177 (i) of a qualifying solar project;
1178 (ii) that a qualifying political subdivision sells to a purchaser; and
1179 (iii) the purchase of which requires that the purchaser agree to bear a proportionate
1180 share of the expense of the qualifying solar project:
1181 (A) in accordance with a written agreement between the purchaser and the qualifying
1182 political subdivision;
1183 (B) in exchange for a credit on the purchaser's electrical bill; and
1184 (C) as determined by a formula established by the qualifying political subdivision.
1185 (2) Subject to Subsection (3), for taxable years beginning on or after January 1, 2009, a
1186 purchaser may claim a nonrefundable tax credit equal to the product of:
1187 (a) the amount the purchaser pays to purchase one or more solar units during the
1188 taxable year; and
1189 (b) 25%.
1190 (3) For a taxable year, a tax credit under this section may not exceed $2,000 on a
1191 return.
1192 (4) A purchaser may carry forward a tax credit under this section for a period that does
1193 not exceed the next four taxable years if:
1194 (a) the purchaser is allowed to claim a tax credit under this section for a taxable year;
1195 and
1196 (b) the amount of the tax credit exceeds the purchaser's tax liability under this chapter
1197 for that taxable year.
1198 (5) Subject to Section 59-10-1014, a tax credit under this section is in addition to any
1199 other tax credit allowed by this chapter.
1200 [
1201
1202
1203
1204 [
1205
1206
1207 Section 15. Section 59-10-1029 is amended to read:
1208 59-10-1029. Nonrefundable alternative energy development tax credit.
1209 (1) As used in this section:
1210 (a) "Alternative energy entity" [
1211 63M-4-502.
1212 (b) "Alternative energy project" [
1213 Section 63M-4-502.
1214 (c) "Office" [
1215 63M-4-401.
1216 (2) Subject to the other provisions of this section, an alternative energy entity may
1217 claim a nonrefundable tax credit for alternative energy development as provided in this section.
1218 (3) The tax credit under this section is the amount listed as the tax credit amount on a
1219 tax credit certificate that the office issues under Title 63M, Chapter 4, Part 5, Alternative
1220 Energy Development Tax Credit Act, to the alternative energy entity for the taxable year.
1221 (4) An alternative energy entity may carry forward a tax credit under this section for a
1222 period that does not exceed the next seven taxable years if:
1223 (a) the alternative energy entity is allowed to claim a tax credit under this section for a
1224 taxable year; and
1225 (b) the amount of the tax credit exceeds the alternative energy entity's tax liability
1226 under this chapter for that taxable year.
1227 (5) (a) [
1228 accordance with Section 59-10-137, the Revenue and Taxation Interim Committee shall study
1229 the tax credit allowed by this section and make recommendations [
1230
1231 repealed.
1232 (b) [
1233 required by this Subsection (5), the office shall provide the following information , if available
1234 to the office, to the [
1235 Analyst:
1236 [
1237 for each taxable year;
1238 [
1239 [
1240 under Section 63M-4-505; and
1241 [
1242 Office of the Legislative Fiscal Analyst requests.
1243 (ii) (A) In providing the information described in Subsection (5)(b)(i), the office shall
1244 redact information that identifies a recipient of a tax credit under this section.
1245 (B) If, notwithstanding the redactions made under Subsection (5)(b)(ii), reporting the
1246 information described in Subsection (5)(b)(i) might disclose the identity of a recipient of a tax
1247 credit, the office may file a request with the Revenue and Taxation Interim Committee to
1248 provide the information described in Subsection (5)(b)(i) in the aggregate for all alternative
1249 energy entities that receive the tax credit under this section.
1250 (c) As part of the study required by this Subsection (5), the Office of the Legislative
1251 Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
1252 analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
1253 office under Subsection (5)(b).
1254 [
1255 Revenue and Taxation Interim Committee's recommendations under Subsection (5)(a) include
1256 an evaluation of:
1257 (i) the cost of the tax credit to the state;
1258 (ii) the purpose and effectiveness of the tax credit; and
1259 (iii) the extent to which the state benefits from the tax credit.
1260 Section 16. Section 59-10-1030 is amended to read:
1261 59-10-1030. Nonrefundable alternative energy manufacturing tax credit.
1262 (1) As used in this section:
1263 (a) "Alternative energy entity" [
1264 63N-2-702.
1265 (b) "Alternative energy manufacturing project" [
1266 defined in Section 63N-2-702.
1267 (c) "Office" means the Governor's Office of Economic Development.
1268 (2) Subject to the other provisions of this section, an alternative energy entity may
1269 claim a nonrefundable tax credit for alternative energy manufacturing as provided in this
1270 section.
1271 (3) The tax credit under this section is the amount listed as the tax credit amount on a
1272 tax credit certificate that the office issues under Title 63N, Chapter 2, Part 7, Alternative
1273 Energy Manufacturing Tax Credit Act, to the alternative energy entity for the taxable year.
1274 (4) An alternative energy entity may carry forward a tax credit under this section for a
1275 period that does not exceed the next seven taxable years if:
1276 (a) the alternative energy entity is allowed to claim a tax credit under this section for a
1277 taxable year; and
1278 (b) the amount of the tax credit exceeds the alternative energy entity's tax liability
1279 under this chapter for that taxable year.
1280 (5) (a) [
1281 accordance with Section 59-10-137, the Revenue and Taxation Interim Committee shall study
1282 the tax credit allowed by this section and make recommendations [
1283
1284 repealed.
1285 (b) [
1286 required by this Subsection (5), the office shall provide the following information , if available
1287 to the office, to the [
1288 Analyst:
1289 [
1290 for each taxable year;
1291 [
1292 project;
1293 [
1294 Section 63N-2-705; and
1295 [
1296 Office of the Legislative Fiscal Analyst requests.
1297 (ii) (A) In providing the information described in Subsection (5)(b)(i), the office shall
1298 redact information that identifies a recipient of a tax credit under this section.
1299 (B) If, notwithstanding the redactions made under Subsection (5)(b)(ii), reporting the
1300 information described in Subsection (5)(b)(i) might disclose the identity of a recipient of a tax
1301 credit, the office may file a request with the Revenue and Taxation Interim Committee to
1302 provide the information described in Subsection (5)(b)(i) in the aggregate for all alternative
1303 energy entities that receive the tax credit under this section.
1304 (c) As part of the study required by this Subsection (5), the Office of the Legislative
1305 Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
1306 analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
1307 office under Subsection (5)(b).
1308 [
1309 recommendations under Subsection (5)(a) include an evaluation of:
1310 (i) the cost of the tax credit to the state;
1311 (ii) the purpose and effectiveness of the tax credit; and
1312 (iii) the extent to which the state benefits from the tax credit.
1313 Section 17. Section 59-10-1034 is amended to read:
1314 59-10-1034. Nonrefundable high cost infrastructure development tax credit.
1315 (1) As used in this section:
1316 (a) "High cost infrastructure project" means the same as that term is defined in Section
1317 63M-4-602.
1318 (b) "Infrastructure cost-burdened entity" means the same as that term is defined in
1319 Section 63M-4-602.
1320 (c) "Infrastructure-related revenue" means the same as that term is defined in Section
1321 63M-4-602.
1322 (d) "Office" means the Office of Energy Development created in Section 63M-4-401.
1323 (2) Subject to the other provisions of this section, a claimant, estate, or trust that is an
1324 infrastructure cost-burdened entity may claim a nonrefundable tax credit for development of a
1325 high cost infrastructure project as provided in this section.
1326 (3) The tax credit under this section is the amount listed as the tax credit amount on a
1327 tax credit certificate that the office issues under Title 63M, Chapter 4, Part 6, High Cost
1328 Infrastructure Development Tax Credit Act, to the infrastructure cost-burdened entity for the
1329 taxable year.
1330 (4) An infrastructure cost-burdened entity may carry forward a tax credit under this
1331 section for a period that does not exceed the next seven taxable years if:
1332 (a) the infrastructure cost-burdened entity is allowed to claim a tax credit under this
1333 section for a taxable year; and
1334 (b) the amount of the tax credit exceeds the infrastructure cost-burdened entity's tax
1335 liability under this chapter for that taxable year.
1336 (5) (a) [
1337 accordance with Section 59-10-137, the Revenue and Taxation Interim Committee shall study
1338 the tax credit allowed by this section and make recommendations [
1339
1340 repealed.
1341 (b) [
1342 required by this Subsection (5), the office shall provide the following information , if available
1343 to the office, to the [
1344 Analyst:
1345 [
1346 cost-burdened entity for each taxable year;
1347 [
1348 project;
1349 [
1350 under Section 63M-4-505; and
1351 [
1352 Office of the Legislative Fiscal Analyst requests.
1353 (ii) (A) In providing the information described in Subsection (5)(b)(i), the office shall
1354 redact information that identifies a recipient of a tax credit under this section.
1355 (B) If, notwithstanding the redactions made under Subsection (5)(b)(ii), reporting the
1356 information described in Subsection (5)(b)(i) might disclose the identity of a recipient of a tax
1357 credit, the office may file a request with the Revenue and Taxation Interim Committee to
1358 provide the information described in Subsection (5)(b)(i) in the aggregate for all infrastructure
1359 cost-burdened entities that receive the tax credit under this section.
1360 (c) As part of the study required by this Subsection (5), the Office of the Legislative
1361 Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
1362 analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
1363 office under Subsection (5)(b).
1364 [
1365 and Taxation Interim Committee's recommendations under Subsection (5)(a) include an
1366 evaluation of:
1367 (i) the cost of the tax credit to the state;
1368 (ii) the purpose and effectiveness of the tax credit; and
1369 (iii) the extent to which the state benefits from the tax credit.
1370 Section 18. Section 59-10-1106 is amended to read:
1371 59-10-1106. Refundable renewable energy systems tax credits -- Definitions --
1372 Certification -- Rulemaking authority -- Revenue and Taxation Interim Committee study.
1373 (1) As used in this section:
1374 (a) "Active solar system" [
1375 defined in Section 59-10-1014.
1376 (b) "Biomass system" [
1377 defined in Section 59-10-1014.
1378 (c) "Commercial energy system" [
1379 term is defined in Section 59-7-614.
1380 (d) "Commercial enterprise" [
1381 defined in Section 59-7-614.
1382 (e) (i) "Commercial unit" [
1383 defined in Section 59-7-614.
1384 (ii) Notwithstanding Subsection (1)(e)(i):
1385 (A) with respect to an active solar system used for agricultural water pumping or a
1386 wind system, each individual energy generating device is considered to be a commercial unit;
1387 or
1388 (B) if an energy system is the building or structure that a claimant, estate, or trust uses
1389 to transact business, a commercial unit is the complete energy system itself.
1390 (f) "Direct use geothermal system" [
1391 term is defined in Section 59-10-1014.
1392 (g) "Geothermal electricity" [
1393 defined in Section 59-10-1014.
1394 (h) "Geothermal energy" [
1395 defined in Section 59-10-1014.
1396 (i) "Geothermal heat pump system" [
1397 term is defined in Section 59-10-1014.
1398 (j) "Hydroenergy system" [
1399 defined in Section 59-10-1014.
1400 (k) "Office" means the Office of Energy Development created in Section 63M-4-401.
1401 (l) "Passive solar system" [
1402 defined in Section 59-10-1014.
1403 (m) "Principal recovery portion" [
1404 term is defined in Section 59-10-1014.
1405 (n) "Wind system" [
1406 Section 59-10-1014.
1407 (2) A claimant, estate, or trust may claim an energy system tax credit as provided in
1408 this section against a tax due under this chapter for a taxable year.
1409 (3) (a) Subject to the other provisions of this Subsection (3), a claimant, estate, or trust
1410 may claim a refundable tax credit under this Subsection (3) with respect to a commercial
1411 energy system if:
1412 (i) the commercial energy system does not use:
1413 (A) wind, geothermal electricity, solar, or biomass equipment capable of producing a
1414 total of 660 or more kilowatts of electricity; or
1415 (B) solar equipment capable of producing 2,000 or more kilowatts of electricity;
1416 (ii) the claimant, estate, or trust purchases or participates in the financing of the
1417 commercial energy system;
1418 (iii) (A) the commercial energy system supplies all or part of the energy required by
1419 commercial units owned or used by the claimant, estate, or trust; or
1420 (B) the claimant, estate, or trust sells all or part of the energy produced by the
1421 commercial energy system as a commercial enterprise;
1422 (iv) the commercial energy system is completed and placed in service on or after
1423 January 1, 2007; and
1424 (v) the claimant, estate, or trust obtains a written certification from the office in
1425 accordance with Subsection (6).
1426 (b) (i) Subject to Subsections (3)(b)(ii) through (v), the tax credit is equal to 10% of the
1427 reasonable costs of the commercial energy system.
1428 (ii) A tax credit under this Subsection (3) may include installation costs.
1429 (iii) A claimant, estate, or trust may claim a tax credit under this Subsection (3) for the
1430 taxable year in which the commercial energy system is completed and placed in service.
1431 (iv) A tax credit under this Subsection (3) may not be carried forward or carried back.
1432 (v) The total amount of tax credit a claimant, estate, or trust may claim under this
1433 Subsection (3) may not exceed $50,000 per commercial unit.
1434 (c) (i) Subject to Subsections (3)(c)(ii) and (iii), a claimant, estate, or trust that is a
1435 lessee of a commercial energy system installed on a commercial unit may claim a tax credit
1436 under this Subsection (3) if the claimant, estate, or trust confirms that the lessor irrevocably
1437 elects not to claim the tax credit.
1438 (ii) A claimant, estate, or trust described in Subsection (3)(c)(i) may claim as a tax
1439 credit under this Subsection (3) only the principal recovery portion of the lease payments.
1440 (iii) A claimant, estate, or trust described in Subsection (3)(c)(i) may claim a tax credit
1441 under this Subsection (3) for a period that does not exceed seven taxable years after the date the
1442 lease begins, as stated in the lease agreement.
1443 (4) (a) Subject to the other provisions of this Subsection (4), a claimant, estate, or trust
1444 may claim a refundable tax credit under this Subsection (4) with respect to a commercial
1445 energy system if:
1446 (i) the commercial energy system uses wind, geothermal electricity, or biomass
1447 equipment capable of producing a total of 660 or more kilowatts of electricity;
1448 (ii) (A) the commercial energy system supplies all or part of the energy required by
1449 commercial units owned or used by the claimant, estate, or trust; or
1450 (B) the claimant, estate, or trust sells all or part of the energy produced by the
1451 commercial energy system as a commercial enterprise;
1452 (iii) the commercial energy system is completed and placed in service on or after
1453 January 1, 2007; and
1454 (iv) the claimant, estate, or trust obtains a written certification from the office in
1455 accordance with Subsection (6).
1456 (b) (i) Subject to Subsections (4)(b)(ii) and (iii), a tax credit under this Subsection (4)
1457 is equal to the product of:
1458 (A) 0.35 cents; and
1459 (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
1460 (ii) A tax credit under this Subsection (4) may be claimed for production occurring
1461 during a period of 48 months beginning with the month in which the commercial energy
1462 system is placed in commercial service.
1463 (iii) A tax credit under this Subsection (4) may not be carried forward or back.
1464 (c) A claimant, estate, or trust that is a lessee of a commercial energy system installed
1465 on a commercial unit may claim a tax credit under this Subsection (4) if the claimant, estate, or
1466 trust confirms that the lessor irrevocably elects not to claim the tax credit.
1467 (5) (a) Subject to the other provisions of this Subsection (5), a claimant, estate, or trust
1468 may claim a refundable tax credit as provided in this Subsection (5) if:
1469 (i) the claimant, estate, or trust owns a commercial energy system that uses solar
1470 equipment capable of producing a total of 660 or more kilowatts of electricity;
1471 (ii) (A) the commercial energy system supplies all or part of the energy required by
1472 commercial units owned or used by the claimant, estate, or trust; or
1473 (B) the claimant, estate, or trust sells all or part of the energy produced by the
1474 commercial energy system as a commercial enterprise;
1475 (iii) the claimant, estate, or trust does not claim a tax credit under Subsection (3);
1476 (iv) the commercial energy system is completed and placed in service on or after
1477 January 1, 2015; and
1478 (v) the claimant, estate, or trust obtains a written certification from the office in
1479 accordance with Subsection (6).
1480 (b) (i) Subject to Subsections (5)(b)(ii) and (iii), a tax credit under this Subsection (5)
1481 is equal to the product of:
1482 (A) 0.35 cents; and
1483 (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
1484 (ii) A tax credit under this Subsection (5) may be claimed for production occurring
1485 during a period of 48 months beginning with the month in which the commercial energy
1486 system is placed in commercial service.
1487 (iii) A tax credit under this Subsection (5) may not be carried forward or carried back.
1488 (c) A claimant, estate, or trust that is a lessee of a commercial energy system installed
1489 on a commercial unit may claim a tax credit under this Subsection (5) if the claimant, estate, or
1490 trust confirms that the lessor irrevocably elects not to claim the tax credit.
1491 (6) (a) Before a claimant, estate, or trust may claim a tax credit under this section, the
1492 claimant, estate, or trust shall obtain a written certification from the office.
1493 (b) The office shall issue a claimant, estate, or trust a written certification if the office
1494 determines that:
1495 (i) the claimant, estate, or trust meets the requirements of this section to receive a tax
1496 credit; and
1497 (ii) the office determines that the commercial energy system with respect to which the
1498 claimant, estate, or trust seeks to claim a tax credit:
1499 (A) has been completely installed;
1500 (B) is a viable system for saving or producing energy from renewable resources; and
1501 (C) is safe, reliable, efficient, and technically feasible to ensure that the commercial
1502 energy system uses the state's renewable and nonrenewable resources in an appropriate and
1503 economic manner.
1504 (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1505 office may make rules:
1506 (i) for determining whether a commercial energy system meets the requirements of
1507 Subsection (6)(b)(ii); and
1508 (ii) for purposes of a tax credit under Subsection (3), establishing the reasonable costs
1509 of a commercial energy system, as an amount per unit of energy production.
1510 (d) A claimant, estate, or trust that obtains a written certification from the office shall
1511 retain the certification for the same time period a person is required to keep books and records
1512 under Section 59-1-1406.
1513 (7) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1514 commission may make rules to address the certification of a tax credit under this section.
1515 (8) A tax credit under this section is in addition to any tax credits provided under the
1516 laws or rules and regulations of the United States.
1517 (9) A purchaser of one or more solar units that claims a tax credit under Section
1518 59-10-1024 for the purchase of the one or more solar units may not claim a tax credit under this
1519 section for that purchase.
1520 [
1521
1522
1523
1524 [
1525
1526
1527 Section 19. Section 59-10-1107 is amended to read:
1528 59-10-1107. Refundable economic development tax credit.
1529 (1) As used in this section:
1530 (a) "Business entity" means a claimant, estate, or trust that meets the definition of
1531 [
1532 (b) "Office" means the Governor's Office of Economic Development.
1533 (2) Subject to the other provisions of this section, a business entity may claim a
1534 refundable tax credit for economic development.
1535 (3) The tax credit under this section is the amount listed as the tax credit amount on the
1536 tax credit certificate that the office issues to the business entity for the taxable year.
1537 (4) (a) In accordance with any rules prescribed by the commission under Subsection
1538 (4)(b), the commission shall make a refund to a business entity that claims a tax credit under
1539 this section if the amount of the tax credit exceeds the business entity's tax liability for a
1540 taxable year.
1541 (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1542 commission may make rules providing procedures for making a refund to a business entity as
1543 required by Subsection (4)(a).
1544 (5) (a) [
1545 accordance with Section 59-10-137, the Revenue and Taxation Interim Committee shall study
1546 the tax credit allowed by this section and make recommendations [
1547
1548 repealed.
1549 (b) [
1550 required by this Subsection (5), the office shall provide the following information [
1551
1552 [
1553 year;
1554 [
1555 [
1556 [
1557 Section 63N-2-106; and
1558 [
1559 requests.
1560 (ii) (A) In providing the information described in Subsection (5)(b)(i), the office shall
1561 redact information that identifies a recipient of a tax credit under this section.
1562 (B) If, notwithstanding the redactions made under Subsection (5)(b)(ii), reporting the
1563 information described in Subsection (5)(b)(i) might disclose the identity of a recipient of a tax
1564 credit, the office may file a request with the Revenue and Taxation Interim Committee to
1565 provide the information described in Subsection (5)(b)(i) in the aggregate for all taxpayers that
1566 receive the tax credit under this section.
1567 (c) The Revenue and Taxation Interim Committee shall ensure that [
1568 and Taxation Interim Committee's recommendations under Subsection (5)(a) include an
1569 evaluation of:
1570 (i) the cost of the tax credit to the state;
1571 (ii) the purpose and effectiveness of the tax credit; and
1572 (iii) the extent to which the state benefits from the tax credit.
1573 Section 20. Section 59-10-1108 is amended to read:
1574 59-10-1108. Refundable motion picture tax credit.
1575 (1) As used in this section:
1576 (a) "Motion picture company" means a claimant, estate, or trust that meets the
1577 definition of a motion picture company under Section 63N-8-102.
1578 (b) "Office" means the Governor's Office of Economic Development.
1579 (c) "State-approved production" [
1580 term is defined in Section 63N-8-102.
1581 (2) For a taxable [
1582 company may claim a refundable tax credit for a state-approved production.
1583 (3) The tax credit under this section is the amount listed as the tax credit amount on the
1584 tax credit certificate that the office issues to a motion picture company under Section
1585 63N-8-103 for the taxable year.
1586 (4) (a) In accordance with any rules prescribed by the commission under Subsection
1587 (4)(b), the commission shall make a refund to a motion picture company that claims a tax
1588 credit under this section if the amount of the tax credit exceeds the motion picture company's
1589 tax liability for the taxable year.
1590 (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1591 commission may make rules providing procedures for making a refund to a motion picture
1592 company as required by Subsection (4)(a).
1593 (5) (a) [
1594 accordance with Section 59-10-137, the Revenue and Taxation Interim Committee shall study
1595 the tax credit allowed by this section and make recommendations [
1596
1597 repealed.
1598 (b) [
1599 required by this Subsection (5), the office shall provide the following information , if available
1600 to the office, to the [
1601 Analyst:
1602 [
1603 year;
1604 [
1605 [
1606 picture company for each calendar year;
1607 [
1608 Section 63N-8-105; and
1609 [
1610
1611 (ii) (A) In providing the information described in Subsection (5)(b)(i), the office shall
1612 redact information that identifies a recipient of a tax credit under this section.
1613 (B) If, notwithstanding the redactions made under Subsection (5)(b)(ii), reporting the
1614 information described in Subsection (5)(b)(i) might disclose the identity of a recipient of a tax
1615 credit, the office may file a request with the Revenue and Taxation Interim Committee to
1616 provide the information described in Subsection (5)(b)(i) in the aggregate for all taxpayers that
1617 receive the tax credit under this section.
1618 (c) As part of the study required by this Subsection (5), the Office of the Legislative
1619 Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
1620 analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
1621 office under Subsection (5)(b).
1622 [
1623 Revenue and Taxation Interim Committee's recommendations under Subsection (5)(a) include
1624 an evaluation of:
1625 (i) the cost of the tax credit to the state;
1626 (ii) the effectiveness of the tax credit; and
1627 (iii) the extent to which the state benefits from the tax credit.
1628 Section 21. Section 59-13-202 is amended to read:
1629 59-13-202. Refund of tax for agricultural uses on individual income and
1630 corporate franchise and income tax returns -- Application for permit for refund --
1631 Division of Finance to pay claims -- Rules permitted to enforce part -- Penalties.
1632 (1) As used in this section:
1633 (a) (i) Except at provided in Subsection (1)(a)(ii), "claimant" means a resident or
1634 nonresident person.
1635 (ii) "Claimant" does not include an estate or trust.
1636 (b) "Estate" means a nonresident estate or a resident estate.
1637 (c) "Refundable tax credit" or "tax credit" means a tax credit that a claimant, estate, or
1638 trust may claim:
1639 (i) as provided by statute; and
1640 (ii) regardless of whether, for the taxable year for which the claimant, estate, or trust
1641 claims the tax credit, the claimant, estate, or trust has a tax liability under:
1642 (A) Chapter 7, Corporate Franchise and Income Taxes; or
1643 (B) Chapter 10, Individual Income Tax Act.
1644 (d) "Trust" means a nonresident trust or a resident trust.
1645 (2) Any claimant, estate, or trust that purchases and uses any motor fuel within the state
1646 for the purpose of operating or propelling stationary farm engines and self-propelled farm
1647 machinery used for nonhighway agricultural uses, and that has paid the tax on the motor fuel as
1648 provided by this part, is entitled to a refund of the tax subject to the conditions and limitations
1649 provided under this part.
1650 (3) (a) A claimant, estate, or trust desiring a nonhighway agricultural use refund under
1651 this part shall claim the refund as a refundable tax credit on the tax return the claimant, estate,
1652 or trust files under:
1653 (i) Chapter 7, Corporate Franchise and Income Taxes; or
1654 (ii) Chapter 10, Individual Income Tax Act.
1655 (b) A claimant, estate, or trust not subject to filing a tax return described in Subsection
1656 (3)(a) shall obtain a permit and file claims on a calendar year basis.
1657 (c) Any claimant, estate, or trust claiming a refundable tax credit under this section is
1658 required to furnish any or all of the information outlined in this section upon request of the
1659 commission.
1660 (d) A refundable tax credit under this section is allowed only on purchases on which
1661 tax is paid during the taxable year covered by the tax return.
1662 (4) In order to obtain a permit for a refund of motor fuel tax paid, an application shall
1663 be filed containing:
1664 (a) the name of the claimant, estate, or trust;
1665 (b) the claimant's, estate's, or trust's address;
1666 (c) location and number of acres owned and operated, location and number of acres
1667 rented and operated, the latter of which shall be verified by a signed statement from the legal
1668 owner;
1669 (d) number of acres planted to each crop, type of soil, and whether irrigated or dry; and
1670 (e) make, size, type of fuel used, and power rating of each piece of equipment using
1671 fuel. If the claimant, estate, or trust is an operator of self-propelled or tractor-pulled farm
1672 machinery with which the claimant, estate, or trust works for hire doing custom jobs for other
1673 farmers, the application shall include information the commission requires and shall all be
1674 contained in, and be considered part of, the original application. The claimant, estate, or trust
1675 shall also file with the application a certificate from the county assessor showing each piece of
1676 equipment using fuel. This original application and all information contained in it constitutes a
1677 permanent file with the commission in the name of the claimant, estate, or trust.
1678 (5) Any claimant, estate, or trust claiming the right to a refund of motor fuel tax paid
1679 shall file a claim with the commission by April 15 of each year for the refund for the previous
1680 calendar year. The claim shall state the name and address of the claimant, estate, or trust, the
1681 number of gallons of motor fuel purchased for nonhighway agricultural uses, and the amount
1682 paid for the motor fuel. The claimant, estate, or trust shall retain the original invoice to support
1683 the claim. No more than one claim for a tax refund may be filed annually by each user of
1684 motor fuel purchased for nonhighway agricultural uses.
1685 (6) Upon commission approval of the claim for a refund, the Division of Finance shall
1686 pay the amount found due to the claimant, estate, or trust. The total amount of claims for
1687 refunds shall be paid from motor fuel taxes.
1688 (7) The commission may [
1689 refuse to accept as evidence of purchase or payment any instruments [
1690 alteration or [
1691 fuel, a statement that it is purchased for purposes other than transportation, and the date of
1692 purchase and delivery. If the commission is not satisfied with the evidence submitted in
1693 connection with the claim, it may reject the claim or require additional evidence.
1694 (8) Any claimant, estate, or trust aggrieved by the decision of the commission with
1695 respect to a refundable tax credit or refund may file a request for agency action, requesting a
1696 hearing before the commission.
1697 (9) Any claimant, estate, or trust that makes any false claim, report, or statement, as
1698 claimant, estate, trust, agent, or creditor, with intent to defraud or secure a refund to which the
1699 claimant, estate, or trust is not entitled, is subject to the criminal penalties provided under
1700 Section 59-1-401, and the commission shall initiate the filing of a complaint for alleged
1701 violations of this part. In addition to these penalties, the claimant, estate, or trust may not
1702 receive any refund as a claimant, estate, or trust or as a creditor of a claimant, estate, or trust for
1703 refund for a period of five years.
1704 (10) Refunds to which a claimant, estate, or trust is entitled under this part shall be paid
1705 from the Transportation Fund.
1706 (11) (a) On or before November 30, 2017, and every three years after November 30,
1707 2017, the Revenue and Taxation Interim Committee shall review the tax credits provided by
1708 this section and make recommendations concerning whether the tax credits should be
1709 continued, modified, or repealed.
1710 (b) In conducting the review required under Subsection (11)(a), the Revenue and
1711 Taxation Interim Committee shall:
1712 (i) schedule time on at least one committee agenda to conduct the review;
1713 (ii) invite state agencies, individuals, and organizations concerned with the credit under
1714 review to provide testimony;
1715 (iii) ensure that the Revenue and Taxation Interim Committee's recommendations
1716 under this section include an evaluation of:
1717 (A) the cost of the tax credit to the state;
1718 (B) the purpose and effectiveness of the tax credit; and
1719 (C) the extent to which the state benefits from the tax credit; and
1720 (iv) undertake other review efforts as determined by the chairs of the Revenue and
1721 Taxation Interim Committee.
1722 Section 22. Section 63N-2-106 is amended to read:
1723 63N-2-106. Reports -- Posting monthly and annual reports -- Audit and study of
1724 tax credits.
1725 (1) The office shall include the following information in the annual written report
1726 described in Section 63N-1-301:
1727 (a) the office's success in attracting new commercial projects to development zones
1728 under this part and the corresponding increase in new incremental jobs;
1729 (b) how many new incremental jobs and high paying jobs are employees of a company
1730 that received tax credits under this part, including the number of employees who work for a
1731 third-party rather than directly for a company, receiving the tax credits under this part;
1732 (c) the estimated amount of tax credit commitments made by the office and the period
1733 of time over which tax credits will be paid;
1734 (d) the economic impact on the state from new state revenues and the provision of tax
1735 credits under this part;
1736 (e) the estimated costs and economic benefits of the tax credit commitments made by
1737 the office;
1738 (f) the actual costs and economic benefits of the tax credit commitments made by the
1739 office; and
1740 (g) tax credit commitments made by the office, with the associated calculation.
1741 (2) Each month, the office shall post on its website and on a state website:
1742 (a) the new tax credit commitments made by the office during the previous month; and
1743 (b) the estimated costs and economic benefits of those tax credit commitments.
1744 (3) (a) On or before November 1, 2014, and every three years after November 1, 2014,
1745 the office shall:
1746 (i) conduct an audit of the tax credits allowed under Section 63N-2-105;
1747 (ii) study the tax credits allowed under Section 63N-2-105; and
1748 (iii) make recommendations concerning whether the tax credits should be continued,
1749 modified, or repealed.
1750 (b) The audit shall include an evaluation of:
1751 (i) the cost of the tax credits;
1752 (ii) the purposes and effectiveness of the tax credits;
1753 (iii) the extent to which the state benefits from the tax credits; and
1754 (iv) the state's return on investment under this part measured by new state revenues,
1755 compared with the costs of tax credits provided and GOED's expenses in administering this
1756 part.
1757 (c) The office shall provide the results of the audit described in this Subsection (3):
1758 (i) in the written annual report described in Subsection (1); and
1759 (ii) as part of the review described in Sections 59-7-159 and 59-10-137.
1760 Section 23. Section 63N-2-213 is amended to read:
1761 63N-2-213. State tax credits.
1762 (1) Subject to the limitations of Subsections (2) through (4), the following
1763 nonrefundable tax credits against a tax under Title 59, Chapter 7, Corporate Franchise and
1764 Income Taxes, or Title 59, Chapter 10, Individual Income Tax Act, are applicable in an
1765 enterprise zone:
1766 (a) a tax credit of $750 may be claimed by a business entity for each new full-time
1767 employee position created within the enterprise zone;
1768 (b) an additional $500 tax credit may be claimed if the new full-time employee position
1769 created within the enterprise zone pays at least 125% of:
1770 (i) the county average monthly nonagricultural payroll wage for the respective industry
1771 as determined by the Department of Workforce Services; or
1772 (ii) if the county average monthly nonagricultural payroll wage is not available for the
1773 respective industry, the total average monthly nonagricultural payroll wage in the respective
1774 county where the enterprise zone is located;
1775 (c) an additional tax credit of $750 may be claimed if the new full-time employee
1776 position created within the enterprise zone is in a business entity that adds value to agricultural
1777 commodities through manufacturing or processing;
1778 (d) an additional tax credit of $200 may be claimed for two consecutive years for each
1779 new full-time employee position created within the enterprise zone that is filled by an
1780 employee who is insured under an employer-sponsored health insurance program if the
1781 employer pays at least 50% of the premium cost for the year for which the credit is claimed;
1782 (e) a tax credit of 50% of the value of a cash contribution to a private nonprofit
1783 corporation, except that the credit claimed may not exceed $100,000:
1784 (i) that is exempt from federal income taxation under Section 501(c)(3), Internal
1785 Revenue Code;
1786 (ii) whose primary purpose is community and economic development; and
1787 (iii) that has been accredited by the Governor's Rural Partnership Board;
1788 (f) a tax credit of 25% of the first $200,000 spent on rehabilitating a building in the
1789 enterprise zone that has been vacant for two years or more; and
1790 (g) an annual investment tax credit of 10% of the first $250,000 in investment, and 5%
1791 of the next $1,000,000 qualifying investment in plant, equipment, or other depreciable
1792 property.
1793 (2) (a) Subject to the limitations of Subsection (2)(b), a business entity claiming tax
1794 credits under Subsections (1)(a) through (d) may claim the tax credits for up to 30 full-time
1795 employee positions per taxable year.
1796 (b) A business entity that received a tax credit for one or more new full-time employee
1797 positions under Subsections (1)(a) through (d) in a prior taxable year may claim a tax credit for
1798 a new full-time employee position in a subsequent taxable year under Subsections (1)(a)
1799 through (d) if:
1800 (i) the business entity has created a new full-time position within the enterprise zone;
1801 and
1802 (ii) the total number of full-time employee positions at the business entity at any point
1803 during the tax year for which the tax credit is being claimed is greater than the number of
1804 full-time employee positions that existed at the business entity at any point during the taxable
1805 year immediately preceding the taxable year for which the credit is being claimed.
1806 (c) Construction jobs are not eligible for the tax credits under Subsections (1)(a)
1807 through (d).
1808 (3) If the amount of a tax credit under this section exceeds a business entity's tax
1809 liability under this chapter for a taxable year, the business entity may carry forward the amount
1810 of the tax credit exceeding the liability for a period that does not exceed the next three taxable
1811 years.
1812 (4) Tax credits under Subsections (1)(a) through (g) may not be claimed by a business
1813 entity primarily engaged in retail trade or by a public utilities business.
1814 (5) A business entity that has no employees:
1815 (a) may not claim tax credits under Subsections (1)(a) through (d); and
1816 (b) may claim tax credits under Subsections (1)(e) through (g).
1817 (6) A business entity may not claim or carry forward a tax credit available under this
1818 part for a taxable year during which the business entity has claimed the targeted business
1819 income tax credit available under Section 63N-2-305.
1820 (7) (a) On or before November 30, 2018, and every three years after November 30,
1821 2018, the Revenue and Taxation Interim Committee shall review the tax credits provided by
1822 this section and make recommendations concerning whether the tax credits should be
1823 continued, modified, or repealed.
1824 (b) In conducting the review required under this Subsection (7), the Revenue and
1825 Taxation Interim Committee shall:
1826 (i) schedule time on at least one committee agenda to conduct the review;
1827 (ii) invite state agencies, individuals, and organizations concerned with the credit under
1828 review to provide testimony;
1829 (iii) ensure that the Revenue and Taxation Interim Committee's recommendations
1830 under this section include an evaluation of:
1831 (A) the cost of the tax credit to the state;
1832 (B) the purpose and effectiveness of the tax credit; and
1833 (C) the extent to which the state benefits from the tax credit; and
1834 (iv) undertake other review efforts as determined by the chairs of the Revenue and
1835 Taxation Interim Committee.
1836 Section 24. Section 63N-2-305 is amended to read:
1837 63N-2-305. Targeted business income tax credit structure -- Duties of the local
1838 zone administrator -- Duties of the State Tax Commission.
1839 (1) A business applicant that is certified under Subsection 63N-2-304(3) and issued a
1840 targeted business tax credit eligibility form by the office under Subsection (8) may claim a
1841 refundable tax credit:
1842 (a) against the business applicant's tax liability under:
1843 (i) Title 59, Chapter 7, Corporate Franchise and Income Taxes; or
1844 (ii) Title 59, Chapter 10, Individual Income Tax Act; and
1845 (b) subject to requirements and limitations provided by this part.
1846 (2) The total amount of the targeted business income tax credits allowed under this part
1847 for all business applicants may not exceed $300,000 in any fiscal year.
1848 (3) (a) A targeted business income tax credit allowed under this part for each
1849 community investment project provided by a business applicant may not:
1850 (i) be claimed by a business applicant for more than seven consecutive taxable years
1851 from the date the business applicant first qualifies for a targeted business income tax credit on
1852 the basis of a community investment project;
1853 (ii) be carried forward or carried back;
1854 (iii) exceed $100,000 in total amount for the community investment project period
1855 during which the business applicant is eligible to claim a targeted business income tax credit;
1856 or
1857 (iv) exceed in any year that the targeted business income tax credit is claimed the lesser
1858 of:
1859 (A) 50% of the maximum amount allowed by the local zone administrator; or
1860 (B) the allocated cap amount determined by the office under Subsection 63N-2-304(5).
1861 (b) A business applicant may apply to the local zone administrator to claim a targeted
1862 business income tax credit allowed under this part for each community investment project
1863 provided by the business applicant as the basis for its eligibility for a targeted business income
1864 tax credit.
1865 (4) Subject to other provisions of this section, the local zone administrator shall
1866 establish for each business applicant that qualifies for a targeted business income tax credit:
1867 (a) criteria for maintaining eligibility for the targeted business income tax credit that
1868 are reasonably related to the community investment project that is the basis for the business
1869 applicant's targeted business income tax credit;
1870 (b) the maximum amount of the targeted business income tax credit the business
1871 applicant is allowed for the community investment project period;
1872 (c) the time period over which the total amount of the targeted business income tax
1873 credit may be claimed;
1874 (d) the maximum amount of the targeted business income tax credit that the business
1875 applicant will be allowed to claim each year; and
1876 (e) requirements for a business applicant to report to the local zone administrator
1877 specifying:
1878 (i) the frequency of the business applicant's reports to the local zone administrator,
1879 which shall be made at least quarterly; and
1880 (ii) the information needed by the local zone administrator to monitor the business
1881 applicant's compliance with this Subsection (4) or Section 63N-2-304 that shall be included in
1882 the report.
1883 (5) In accordance with Subsection (4)(e), a business applicant allowed a targeted
1884 business income tax credit under this part shall report to the local zone administrator.
1885 (6) The amount of a targeted business income tax credit that a business applicant is
1886 allowed to claim for a taxable year shall be reduced by 25% for each quarter in which the office
1887 or the local zone administrator determines that the business applicant has failed to comply with
1888 a requirement of Subsection (3) or Section 63N-2-304.
1889 (7) The office or local zone administrator may audit a business applicant to ensure:
1890 (a) eligibility for a targeted business income tax credit; or
1891 (b) compliance with Subsection (3) or Section 63N-2-304.
1892 (8) The office shall issue a targeted business income tax credit eligibility form in a
1893 form jointly developed by the State Tax Commission and the office no later than 30 days after
1894 the last day of the business applicant's taxable year showing:
1895 (a) the maximum amount of the targeted business income tax credit that the business
1896 applicant is eligible for that taxable year;
1897 (b) any reductions in the maximum amount of the targeted business income tax credit
1898 because of failure to comply with a requirement of Subsection (3) or Section 63N-2-304;
1899 (c) the allocated cap amount that the business applicant may claim for that taxable
1900 year; and
1901 (d) the actual amount of the targeted business income tax credit that the business
1902 applicant may claim for that taxable year.
1903 (9) (a) A business applicant shall retain the targeted business income tax credit
1904 eligibility form provided by the office under this Subsection (9).
1905 (b) The State Tax Commission may audit a business applicant to ensure:
1906 (i) eligibility for a targeted business income tax credit; or
1907 (ii) compliance with Subsection (3) or Section 63N-2-304.
1908 (10) (a) On or before November 30, 2018, and every three years after November 30,
1909 2018, the Revenue and Taxation Interim Committee shall review the tax credits provided by
1910 this section and make recommendations concerning whether the tax credits should be
1911 continued, modified, or repealed.
1912 (b) In conducting the review required under this Subsection (10), the Revenue and
1913 Taxation Interim Committee shall:
1914 (i) schedule time on at least one committee agenda to conduct the review;
1915 (ii) invite state agencies, individuals, and organizations concerned with the credit under
1916 review to provide testimony;
1917 (iii) ensure that the Revenue and Taxation Interim Committee's recommendations
1918 under this section include an evaluation of:
1919 (A) the cost of the tax credit to the state;
1920 (B) the purpose and effectiveness of the tax credit; and
1921 (C) the extent to which the state benefits from the tax credit; and
1922 (iv) undertake other review efforts as determined by the chairs of the Revenue and
1923 Taxation Interim Committee.
1924 Section 25. Section 63N-2-810 is amended to read:
1925 63N-2-810. Reports on tax credit certificates -- Study by legislative committees.
1926 [
1927 described in Section 63N-1-301:
1928 [
1929 part;
1930 [
1931 amongst tax credit applicants under this part; and
1932 [
1933 part.
1934 [
1935
1936 [
1937
1938 [
1939
1940 [
1941 [
1942
1943 [
1944 [
1945 Section 26. Coordinating H.B. 310 with H.B. 26 -- Substantive and technical
1946 amendments.
1947 If this H.B. 310 and H.B. 26, Revenue and Taxation Interim Committee Report
1948 Amendments, both pass and become law, it is the intent of the Legislature that the Office of
1949 Legislative Research and General Counsel shall prepare the Utah Code database for publication
1950 by amending Subsection 63N-2-810(2) to read:
1951 "(2) (a) [
1952 In accordance with Sections 59-7-159 and 59-10-137, the Revenue and Taxation Interim
1953 Committee shall:
1954 (i) study the tax credits allowed under Sections 59-7-614.6, 59-10-1025, and
1955 59-10-1109; and
1956 (ii) make recommendations concerning whether the tax credits should be continued,
1957 modified, or repealed.
1958 [
1959 [
1960
1961 [
1962 [
1963 (b) Except as provided in Subsection (2)(c), for purposes of the study required by this
1964 Subsection (2), the office shall provide the following information, if available to the office, to
1965 the Office of the Legislative Fiscal Analyst by electronic means:
1966 (i) the amount of tax credits that the office grants to each eligible business entity for
1967 each taxable year;
1968 (ii) the amount of eligible new state tax revenues generated by each eligible product or
1969 project;
1970 (iii) estimates for each of the next three calendar years of the following:
1971 (A) the amount of tax credits that the office will grant;
1972 (B) the amount of eligible new state tax revenues that will be generated; and
1973 (C) the number of new incremental jobs within the state that will be generated;
1974 (iv) the information contained in the office's latest report to the Legislature under
1975 Section 63N-2-705; and
1976 (v) any other information that the Office of the Legislative Fiscal Analyst requests.
1977 (c) (i) In providing the information described in Subsection (2)(b), the office shall
1978 redact information that identifies a recipient of a tax credit under this section.
1979 (ii) If, notwithstanding the redactions made under Subsection (2)(c)(i), reporting the
1980 information described in Subsection (2)(b) might disclose the identity of a recipient of a tax
1981 credit, the office may file a request with the Revenue and Taxation Interim Committee to
1982 provide the information described in Subsection (2)(b) in the aggregate for all entities that
1983 receive the tax credit under this section.
1984 (d) As a part of the study required by this Subsection (2), the Office of the Legislative
1985 Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
1986 analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
1987 office under Subsection (2)(b).
1988 (e) The Revenue and Taxation Interim Committee shall ensure that the Revenue and
1989 Taxation Interim Committee's recommendations under Subsection (2)(a) include an evaluation
1990 of:
1991 (i) the cost of the tax credits under Sections 59-7-614.6, 59-10-1025, and 59-10-1109;
1992 (ii) the purpose and effectiveness of the tax credits; and
1993 (iii) the extent to which the state benefits from the tax credits."
1994 Section 27. Coordinating H.B. 310 with H.B. 31 -- Substantive and technical
1995 amendments.
1996 If this H.B. 310 and H.B. 31, Enterprise Zone Amendments, both pass and become law,
1997 it is the intent of the Legislature that the Office of Legislative Research and General Counsel
1998 shall prepare the Utah Code database for publication by:
1999 (1) modifying Subsection 59-7-159(3)(c) to add a new (iii) to read:
2000 "(iii) Section 59-7-614.10;";
2001 (2) modifying Subsection 59-7-614.10(6) to read:
2002 "(6) (a) In accordance with Section 59-7-159, the Revenue and Taxation Interim
2003 Committee shall study the tax credit allowed by this section and make recommendations
2004 concerning whether the tax credit should be continued, modified, or repealed.
2005 (b) (i) Except as provided in Subsection (6)(b)(ii), for purposes of the study required by
2006 this Subsection (6), the office shall provide by electronic means the following information, if
2007 available to the office, for each calendar year to the Office of the Legislative Fiscal Analyst:
2008 (A) the amount of tax credits provided in each development zone;
2009 (B) the number of new full-time employee positions reported to obtain tax credits in
2010 each development zone;
2011 (C) the amount of tax credits awarded for rehabilitating a building in each development
2012 zone;
2013 (D) the amount of tax credits awarded for investing in a plant, equipment, or other
2014 depreciable property in each development zone;
2015 (E) the information related to the tax credit contained in the office's latest report to the
2016 Legislature under Section 63N-1-301; and
2017 (F) other information as requested by the Office of the Legislative Fiscal Analyst.
2018 (ii) (A) In providing the information described in Subsection (6)(b)(i), the office shall
2019 redact information that identifies a recipient of a tax credit under this section.
2020 (B) If, notwithstanding the redactions made under Subsection (6)(b)(ii), reporting the
2021 information described in Subsection (6)(b)(i) might disclose the identity of a recipient of a tax
2022 credit, the office may file a request with the Revenue and Taxation Interim Committee to
2023 provide the information described in Subsection (6)(b)(i) in the aggregate for all development
2024 zones that receive the tax credit under this section.
2025 (c) As part of the study required by this Subsection (6), the Office of the Legislative
2026 Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
2027 analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
2028 office under Subsection (6)(b).
2029 (d) The Revenue and Taxation Interim Committee shall ensure that the Revenue and
2030 Taxation Interim Committee's recommendations under Subsection (6)(a) include an evaluation
2031 of:
2032 (i) the cost of the tax credit to the state;
2033 (ii) the purpose and effectiveness of the tax credit; and
2034 (iii) the extent to which the state benefits from the tax credit.";
2035 (3) modifying Subsection 59-10-137(3)(c) to add a new (x) to read:
2036 "(x) Section 59-10-1036; and";
2037 (4) modifying Subsection 59-10-1036(6) to read:
2038 "(6) (a) In accordance with Section 59-10-137, the Revenue and Taxation Interim
2039 Committee shall study the tax credit allowed by this section and make recommendations
2040 concerning whether the tax credit should be continued, modified, or repealed.
2041 (b) (i) Except as provided in Subsection (6)(b)(ii), for purposes of the study required by
2042 this Subsection (6), the office shall provide by electronic means the following information , if
2043 available to the office, for each calendar year to the Office of the Legislative Fiscal Analyst:
2044 (A) the amount of tax credits provided in each development zone;
2045 (B) the number of new full-time employee positions reported to obtain tax credits in
2046 each development zone;
2047 (C) the amount of tax credits awarded for rehabilitating a building in each development
2048 zone;
2049 (D) the amount of tax credits awarded for investing in a plant, equipment, or other
2050 depreciable property in each development zone;
2051 (E) the information related to the tax credit contained in the office's latest report to the
2052 Legislature under Section 63N-1-301; and
2053 (F) other information as requested by the Office of the Legislative Fiscal Analyst.
2054 (ii) (A) In providing the information described in Subsection (6)(b)(i), the office shall
2055 redact information that identifies a recipient of a tax credit under this section.
2056 (B) If, notwithstanding the redactions made under Subsection (6)(b)(ii), reporting the
2057 information described in Subsection (6)(b)(i) might disclose the identity of a recipient of a tax
2058 credit, the office may file a request with the Revenue and Taxation Interim Committee to
2059 provide the information described in Subsection (6)(b)(i) in the aggregate for all development
2060 zones that receive the tax credit under this section.
2061 (c) As part of the study required by this Subsection (6), the Office of the Legislative
2062 Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
2063 analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
2064 office under Subsection (6)(b).
2065 (d) The Revenue and Taxation Interim Committee shall ensure that the Revenue and
2066 Taxation Interim Committee's recommendations under Subsection (6)(a) include an evaluation
2067 of:
2068 (i) the cost of the tax credit to the state;
2069 (ii) the purpose and effectiveness of the tax credit; and
2070 (iii) the extent to which the state benefits from the tax credit."; and
2071 (5) eliminating Subsection 63N-2-213(7) in H.B. 310, Tax Credit Review
2072 Amendments.
2073 Section 28. Coordinating H.B. 310 with H.B. 26 and S.B. 171 -- Substantive and
2074 technical amendments.
2075 If this H.B. 310, H.B. 26, Revenue and Taxation Interim Committee Report
2076 Amendments, and S.B. 171, Economic Development Tax Credits Amendments, all pass and
2077 become law, it is the intent of the Legislature that the Office of Legislative Research and
2078 General Counsel shall prepare the Utah Code database for publication by amending Subsection
2079 63N-2-810(2) to read:
2080 "(2) (a) [
2081 In accordance with Section 59-10-137, the Revenue and Taxation Interim Committee shall:
2082 (i) study the tax [
2083 59-10-1025[
2084 (ii) make recommendations concerning whether the tax [
2085 continued, modified, or repealed.
2086 [
2087 [
2088
2089 [
2090 [
2091 (b) Except as provided in Subsection (2)(c), for purposes of the study required by this
2092 Subsection (2), the office shall provide the following information , if available to the office, to
2093 the Office of the Legislative Fiscal Analyst by electronic means:
2094 (i) the amount of tax credit that the office grants to each eligible business entity for
2095 each taxable year;
2096 (ii) the amount of eligible new state tax revenues generated by each eligible product or
2097 project;
2098 (iii) estimates for each of the next three calendar years of the following:
2099 (A) the amount of tax credit that the office will grant;
2100 (B) the amount of eligible new state tax revenues that will be generated; and
2101 (C) the number of new incremental jobs within the state that will be generated;
2102 (iv) the information contained in the office's latest report to the Legislature under
2103 Section 63N-2-705; and
2104 (v) any other information that the Office of the Legislative Fiscal Analyst requests.
2105 (c) (i) In providing the information described in Subsection (2)(b), the office shall
2106 redact information that identifies a recipient of a tax credit under this section.
2107 (ii) If, notwithstanding the redactions made under Subsection (2)(c)(i), reporting the
2108 information described in Subsection (2)(b) might disclose the identity of a recipient of a tax
2109 credit, the office may file a request with the Revenue and Taxation Interim Committee to
2110 provide the information described in Subsection (2)(b) in the aggregate for all entities that
2111 receive the tax credit under this section.
2112 (d) As a part of the study required by this Subsection (2), the Office of the Legislative
2113 Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
2114 analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
2115 office under Subsection (2)(b).
2116 (e) The Revenue and Taxation Interim Committee shall ensure that the Revenue and
2117 Taxation Interim Committee's recommendations under Subsection (2)(a) include an evaluation
2118 of:
2119 (i) the cost of the tax credit under Section 59-10-1025;
2120 (ii) the purpose and effectiveness of the tax credit; and
2121 (iii) the extent to which the state benefits from the tax credit."