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7 LONG TITLE
8 General Description:
9 This bill modifies tax credits for residential and commercial energy systems that utilize
10 solar power.
11 Highlighted Provisions:
12 This bill:
13 ▸ reduces tax credits for residential and commercial energy systems that utilize solar
14 power over time;
15 ▸ repeals tax credits for residential and commercial energy systems that utilize solar
16 power on January 1, 2021;
17 ▸ requires the governor's energy advisor to make a report; and
18 ▸ makes technical changes.
19 Money Appropriated in this Bill:
20 None
21 Other Special Clauses:
22 None
23 Utah Code Sections Affected:
24 AMENDS:
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 59-10-1014, as last amended by Laws of Utah 2015, Chapter 133
28 59-10-1106, as last amended by Laws of Utah 2015, Chapter 133
29 63I-2-259, as last amended by Laws of Utah 2015, Chapter 139
30 63M-4-203, as last amended by Laws of Utah 2015, Chapter 378
31
32 Be it enacted by the Legislature of the state of Utah:
33 Section 1. Section 59-7-614 is amended to read:
34 59-7-614. Renewable energy systems tax credits -- Definitions -- Certification --
35 Rulemaking authority -- Revenue and Taxation Interim Committee study.
36 (1) As used in this section:
37 (a) (i) "Active solar system" means a system of equipment that is capable of:
38 (A) collecting and converting incident solar radiation into thermal, mechanical, or
39 electrical energy; and
40 (B) transferring a form of energy described in Subsection (1)(a)(i)(A) by a separate
41 apparatus to storage or to the point of use.
42 (ii) "Active solar system" includes water heating, space heating or cooling, and
43 electrical or mechanical energy generation.
44 (b) "Biomass system" means a system of apparatus and equipment for use in:
45 (i) converting material into biomass energy, as defined in Section 59-12-102; and
46 (ii) transporting the biomass energy by separate apparatus to the point of use or storage.
47 (c) "Commercial energy system" means a system that is:
48 (i) (A) an active solar system;
49 (B) a biomass system;
50 (C) a direct use geothermal system;
51 (D) a geothermal electricity system;
52 (E) a geothermal heat pump system;
53 (F) a hydroenergy system;
54 (G) a passive solar system; or
55 (H) a wind system;
56 (ii) located in the state; and
57 (iii) used:
58 (A) to supply energy to a commercial unit; or
59 (B) as a commercial enterprise.
60 (d) "Commercial enterprise" means an entity, the purpose of which is to produce
61 electrical, mechanical, or thermal energy for sale from a commercial energy system.
62 (e) (i) "Commercial unit" means a building or structure that an entity uses to transact
63 business.
64 (ii) Notwithstanding Subsection (1)(e)(i):
65 (A) with respect to an active solar system used for agricultural water pumping or a wind
66 system, each individual energy generating device is considered to be a commercial unit; or
67 (B) if an energy system is the building or structure that an entity uses to transact
68 business, a commercial unit is the complete energy system itself.
69 (f) "Direct use geothermal system" means a system of apparatus and equipment that
70 enables the direct use of geothermal energy to meet energy needs, including heating a building,
71 an industrial process, and aquaculture.
72 (g) "Geothermal electricity" means energy that is:
73 (i) contained in heat that continuously flows outward from the earth; and
74 (ii) used as a sole source of energy to produce electricity.
75 (h) "Geothermal energy" means energy generated by heat that is contained in the earth.
76 (i) "Geothermal heat pump system" means a system of apparatus and equipment that:
77 (i) enables the use of thermal properties contained in the earth at temperatures well
78 below 100 degrees Fahrenheit; and
79 (ii) helps meet heating and cooling needs of a structure.
80 (j) "Hydroenergy system" means a system of apparatus and equipment that is capable
81 of:
82 (i) intercepting and converting kinetic water energy into electrical or mechanical
83 energy; and
84 (ii) transferring this form of energy by separate apparatus to the point of use or storage.
85 (k) "Office" means the Office of Energy Development created in Section 63M-4-401.
86 (l) (i) "Passive solar system" means a direct thermal system that utilizes the structure of
87 a building and its operable components to provide for collection, storage, and distribution of
88 heating or cooling during the appropriate times of the year by utilizing the climate resources
89 available at the site.
90 (ii) "Passive solar system" includes those portions and components of a building that
91 are expressly designed and required for the collection, storage, and distribution of solar energy.
92 (m) (i) "Principal recovery portion" means the portion of a lease payment that
93 constitutes the cost a person incurs in acquiring a commercial energy system.
94 (ii) "Principal recovery portion" does not include:
95 (A) an interest charge; or
96 (B) a maintenance expense.
97 (n) "Residential energy system" means the following used to supply energy to or for a
98 residential unit:
99 (i) an active solar system;
100 (ii) a biomass system;
101 (iii) a direct use geothermal system;
102 (iv) a geothermal heat pump system;
103 (v) a hydroenergy system;
104 (vi) a passive solar system; or
105 (vii) a wind system.
106 (o) (i) "Residential unit" means a house, condominium, apartment, or similar dwelling
107 unit that:
108 (A) is located in the state; and
109 (B) serves as a dwelling for a person, group of persons, or a family.
110 (ii) "Residential unit" does not include property subject to a fee under:
111 (A) Section 59-2-404;
112 (B) Section 59-2-405;
113 (C) Section 59-2-405.1;
114 (D) Section 59-2-405.2; or
115 (E) Section 59-2-405.3.
116 (p) "Wind system" means a system of apparatus and equipment that is capable of:
117 (i) intercepting and converting wind energy into mechanical or electrical energy; and
118 (ii) transferring these forms of energy by a separate apparatus to the point of use, sale,
119 or storage.
120 (2) A taxpayer may claim an energy system tax credit as provided in this section
121 against a tax due under this chapter for a taxable year.
122 (3) (a) Subject to the other provisions of this Subsection (3), a taxpayer may claim a
123 nonrefundable tax credit under this Subsection (3) with respect to a residential unit the taxpayer
124 owns or uses if:
125 (i) the taxpayer:
126 (A) purchases and completes a residential energy system to supply all or part of the
127 energy required for the residential unit; or
128 (B) participates in the financing of a residential energy system to supply all or part of
129 the energy required for the residential unit;
130 (ii) the residential energy system is completed and placed in service on or after January
131 1, 2007; and
132 (iii) the taxpayer obtains a written certification from the office in accordance with
133 Subsection (7).
134 (b) (i) Subject to Subsections (3)(b)(ii) through (v), the tax credit is equal to 25% of the
135 reasonable costs of each residential energy system installed with respect to each residential unit
136 the taxpayer owns or uses.
137 (ii) A tax credit under this Subsection (3) may include installation costs.
138 (iii) A taxpayer may claim a tax credit under this Subsection (3) for the taxable year in
139 which the residential energy system is completed and placed in service.
140 (iv) If the amount of a tax credit under this Subsection (3) exceeds a taxpayer's tax
141 liability under this chapter for a taxable year, the amount of the tax credit exceeding the
142 liability may be carried forward for a period that does not exceed the next four taxable years.
143 (v) (A) [
144 amount of tax credit a taxpayer may claim under this Subsection (3) may not exceed $2,000 per
145 residential unit.
146 (B) If the residential energy system utilizes only an active solar system or a passive
147 solar system, or both, to supply energy to the residential unit, the tax credit claimed under this
148 Subsection (3) may not exceed $1,500 for a taxable year beginning on or after January 1, 2018,
149 and ending on December 31, 2018.
150 (C) If the residential energy system utilizes only an active solar system or a passive
151 solar system, or both, to supply energy to the residential unit, the tax credit claimed under this
152 Subsection (3) may not exceed $1,000 for a taxable year beginning on or after January 1, 2019,
153 and ending on December 31, 2019.
154 (D) If the residential energy system utilizes only an active solar system or a passive
155 solar system, or both, to supply energy to the residential unit, the tax credit claimed under this
156 Subsection (3) may not exceed $500 for a taxable year beginning on or after January 1, 2020,
157 and ending on December 31, 2020.
158 (c) If a taxpayer sells a residential unit to another person before the taxpayer claims the
159 tax credit under this Subsection (3):
160 (i) the taxpayer may assign the tax credit to the other person; and
161 (ii) (A) if the other person files a return under this chapter, the other person may claim
162 the tax credit under this section as if the other person had met the requirements of this section
163 to claim the tax credit; or
164 (B) if the other person files a return under Chapter 10, Individual Income Tax Act, the
165 other person may claim the tax credit under Section 59-10-1014 as if the other person had met
166 the requirements of Section 59-10-1014 to claim the tax credit.
167 (4) (a) Subject to the other provisions of this Subsection (4), a taxpayer may claim a
168 refundable tax credit under this Subsection (4) with respect to a commercial energy system if:
169 (i) the commercial energy system does not use:
170 (A) wind, geothermal electricity, solar, or biomass equipment capable of producing a
171 total of 660 or more kilowatts of electricity; or
172 (B) solar equipment capable of producing 2,000 or more kilowatts of electricity;
173 (ii) the taxpayer purchases or participates in the financing of the commercial energy
174 system;
175 (iii) (A) the commercial energy system supplies all or part of the energy required by
176 commercial units owned or used by the taxpayer; or
177 (B) the taxpayer sells all or part of the energy produced by the commercial energy
178 system as a commercial enterprise;
179 (iv) the commercial energy system is completed and placed in service on or after
180 January 1, 2007; and
181 (v) the taxpayer obtains a written certification from the office in accordance with
182 Subsection (7).
183 (b) (i) Subject to Subsections (4)(b)(ii) through (v), the tax credit is equal to 10% of the
184 reasonable costs of the commercial energy system.
185 (ii) A tax credit under this Subsection (4) may include installation costs.
186 (iii) A taxpayer may claim a tax credit under this Subsection (4) for the taxable year in
187 which the commercial energy system is completed and placed in service.
188 (iv) A tax credit under this Subsection (4) may not be carried forward or carried back.
189 (v) (A) [
190 amount of tax credit a taxpayer may claim under this Subsection (4) may not exceed $50,000
191 per commercial unit.
192 (B) If the commercial energy system utilizes only an active solar system or a passive
193 solar system, or both, to supply energy to the commercial unit, the tax credit claimed under this
194 Subsection (4) may not exceed $40,000 for a taxable year beginning on or after January 1,
195 2017, and ending on December 31, 2017.
196 (C) If the commercial energy system utilizes only an active solar system or a passive
197 solar system, or both, to supply energy to the commercial unit, the tax credit claimed under this
198 Subsection (4) may not exceed $30,000 for a taxable year beginning on or after January 1,
199 2018, and ending on December 31, 2018.
200 (D) If the commercial energy system utilizes only an active solar system or a passive
201 solar system, or both, to supply energy to the commercial unit, the tax credit claimed under this
202 Subsection (4) may not exceed $20,000 for a taxable year beginning on or after January 1,
203 2019, and ending on December 31, 2019.
204 (E) If the commercial energy system utilizes only an active solar system or a passive
205 solar system, or both, to supply energy to the commercial unit, the tax credit claimed under this
206 Subsection (4) may not exceed $10,000 for a taxable year beginning on or after January 1,
207 2020, and ending on December 31, 2020.
208 (c) (i) Subject to Subsections (4)(c)(ii) and (iii), a taxpayer that is a lessee of a
209 commercial energy system installed on a commercial unit may claim a tax credit under this
210 Subsection (4) if the taxpayer confirms that the lessor irrevocably elects not to claim the tax
211 credit.
212 (ii) A taxpayer described in Subsection (4)(c)(i) may claim as a tax credit under this
213 Subsection (4) only the principal recovery portion of the lease payments.
214 (iii) A taxpayer described in Subsection (4)(c)(i) may claim a tax credit under this
215 Subsection (4) for a period that does not exceed seven taxable years after the date the lease
216 begins, as stated in the lease agreement.
217 (5) (a) Subject to the other provisions of this Subsection (5), a taxpayer may claim a
218 refundable tax credit under this Subsection (5) with respect to a commercial energy system if:
219 (i) the commercial energy system uses wind, geothermal electricity, or biomass
220 equipment capable of producing a total of 660 or more kilowatts of electricity;
221 (ii) (A) the commercial energy system supplies all or part of the energy required by
222 commercial units owned or used by the taxpayer; or
223 (B) the taxpayer sells all or part of the energy produced by the commercial energy
224 system as a commercial enterprise;
225 (iii) the commercial energy system is completed and placed in service on or after
226 January 1, 2007; and
227 (iv) the taxpayer obtains a written certification from the office in accordance with
228 Subsection (7).
229 (b) (i) Subject to Subsections (5)(b)(ii) and (iii), a tax credit under this Subsection (5)
230 is equal to the product of:
231 (A) 0.35 cents; and
232 (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
233 (ii) A tax credit under this Subsection (5) may be claimed for production occurring
234 during a period of 48 months beginning with the month in which the commercial energy
235 system is placed in commercial service.
236 (iii) A tax credit under this Subsection (5) may not be carried forward or carried back.
237 (c) A taxpayer that is a lessee of a commercial energy system installed on a commercial
238 unit may claim a tax credit under this Subsection (5) if the taxpayer confirms that the lessor
239 irrevocably elects not to claim the tax credit.
240 (6) (a) Subject to the other provisions of this Subsection (6), a taxpayer may claim a
241 refundable tax credit as provided in this Subsection (6) if:
242 (i) the taxpayer owns a commercial energy system that uses solar equipment capable of
243 producing a total of 660 or more kilowatts of electricity;
244 (ii) (A) the commercial energy system supplies all or part of the energy required by
245 commercial units owned or used by the taxpayer; or
246 (B) the taxpayer sells all or part of the energy produced by the commercial energy
247 system as a commercial enterprise;
248 (iii) the taxpayer does not claim a tax credit under Subsection (4);
249 (iv) the commercial energy system is completed and placed in service on or after
250 January 1, 2015; and
251 (v) the taxpayer obtains a written certification from the office in accordance with
252 Subsection (7).
253 (b) (i) Subject to Subsections (6)(b)(ii) and (iii), a tax credit under this Subsection (6)
254 is equal to the product of:
255 (A) 0.35 cents; and
256 (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
257 (ii) A tax credit under this Subsection (6) may be claimed for production occurring
258 during a period of 48 months beginning with the month in which the commercial energy
259 system is placed in commercial service.
260 (iii) A tax credit under this Subsection (6) may not be carried forward or carried back.
261 (c) A taxpayer that is a lessee of a commercial energy system installed on a commercial
262 unit may claim a tax credit under this Subsection (6) if the taxpayer confirms that the lessor
263 irrevocably elects not to claim the tax credit.
264 (7) (a) Before a taxpayer may claim a tax credit under this section, the taxpayer shall
265 obtain a written certification from the office.
266 (b) The office shall issue a taxpayer a written certification if the office determines that:
267 (i) the taxpayer meets the requirements of this section to receive a tax credit; and
268 (ii) the residential energy system or commercial energy system with respect to which
269 the taxpayer seeks to claim a tax credit:
270 (A) has been completely installed;
271 (B) is a viable system for saving or producing energy from renewable resources; and
272 (C) is safe, reliable, efficient, and technically feasible to ensure that the residential
273 energy system or commercial energy system uses the state's renewable and nonrenewable
274 energy resources in an appropriate and economic manner.
275 (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
276 office may make rules:
277 (i) for determining whether a residential energy system or commercial energy system
278 meets the requirements of Subsection (7)(b)(ii); and
279 (ii) for purposes of a tax credit under Subsection (3) or (4), establishing the reasonable
280 costs of a residential energy system or a commercial energy system, as an amount per unit of
281 energy production.
282 (d) A taxpayer that obtains a written certification from the office shall retain the
283 certification for the same time period a person is required to keep books and records under
284 Section 59-1-1406.
285 (8) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
286 commission may make rules to address the certification of a tax credit under this section.
287 (9) A tax credit under this section is in addition to any tax credits provided under the
288 laws or rules and regulations of the United States.
289 (10) (a) On or before October 1, 2017, and every five years after 2017, the Revenue
290 and Taxation Interim Committee shall review each tax credit provided by this section and
291 report its recommendations to the Legislative Management Committee concerning whether the
292 tax credit should be continued, modified, or repealed.
293 (b) The Revenue and Taxation Interim Committee's report under Subsection (10)(a)
294 shall include information concerning the cost of the tax credit, the purpose and effectiveness of
295 the tax credit, and the state's benefit from the tax credit.
296 Section 2. Section 59-10-1014 is amended to read:
297 59-10-1014. Nonrefundable renewable energy systems tax credits -- Definitions --
298 Certification -- Rulemaking authority -- Revenue and Taxation Interim Committee study.
299 (1) As used in this section:
300 (a) (i) "Active solar system" means a system of equipment that is capable of:
301 (A) collecting and converting incident solar radiation into thermal, mechanical, or
302 electrical energy; and
303 (B) transferring a form of energy described in Subsection (1)(a)(i)(A) by a separate
304 apparatus to storage or to the point of use.
305 (ii) "Active solar system" includes water heating, space heating or cooling, and
306 electrical or mechanical energy generation.
307 (b) "Biomass system" means a system of apparatus and equipment for use in:
308 (i) converting material into biomass energy, as defined in Section 59-12-102; and
309 (ii) transporting the biomass energy by separate apparatus to the point of use or storage.
310 (c) "Direct use geothermal system" means a system of apparatus and equipment that
311 enables the direct use of geothermal energy to meet energy needs, including heating a building,
312 an industrial process, and aquaculture.
313 (d) "Geothermal electricity" means energy that is:
314 (i) contained in heat that continuously flows outward from the earth; and
315 (ii) used as a sole source of energy to produce electricity.
316 (e) "Geothermal energy" means energy generated by heat that is contained in the earth.
317 (f) "Geothermal heat pump system" means a system of apparatus and equipment that:
318 (i) enables the use of thermal properties contained in the earth at temperatures well
319 below 100 degrees Fahrenheit; and
320 (ii) helps meet heating and cooling needs of a structure.
321 (g) "Hydroenergy system" means a system of apparatus and equipment that is capable
322 of:
323 (i) intercepting and converting kinetic water energy into electrical or mechanical
324 energy; and
325 (ii) transferring this form of energy by separate apparatus to the point of use or storage.
326 (h) "Office" means the Office of Energy Development created in Section 63M-4-401.
327 (i) (i) "Passive solar system" means a direct thermal system that utilizes the structure of
328 a building and its operable components to provide for collection, storage, and distribution of
329 heating or cooling during the appropriate times of the year by utilizing the climate resources
330 available at the site.
331 (ii) "Passive solar system" includes those portions and components of a building that
332 are expressly designed and required for the collection, storage, and distribution of solar energy.
333 (j) (i) "Principal recovery portion" means the portion of a lease payment that
334 constitutes the cost a person incurs in acquiring a residential energy system.
335 (ii) "Principal recovery portion" does not include:
336 (A) an interest charge; or
337 (B) a maintenance expense.
338 (k) "Residential energy system" means the following used to supply energy to or for a
339 residential unit:
340 (i) an active solar system;
341 (ii) a biomass system;
342 (iii) a direct use geothermal system;
343 (iv) a geothermal heat pump system;
344 (v) a hydroenergy system;
345 (vi) a passive solar system; or
346 (vii) a wind system.
347 (l) (i) "Residential unit" means a house, condominium, apartment, or similar dwelling
348 unit that:
349 (A) is located in the state; and
350 (B) serves as a dwelling for a person, group of persons, or a family.
351 (ii) "Residential unit" does not include property subject to a fee under:
352 (A) Section 59-2-404;
353 (B) Section 59-2-405;
354 (C) Section 59-2-405.1;
355 (D) Section 59-2-405.2; or
356 (E) Section 59-2-405.3.
357 (m) "Wind system" means a system of apparatus and equipment that is capable of:
358 (i) intercepting and converting wind energy into mechanical or electrical energy; and
359 (ii) transferring these forms of energy by a separate apparatus to the point of use or
360 storage.
361 (2) A claimant, estate, or trust may claim an energy system tax credit as provided in
362 this section against a tax due under this chapter for a taxable year.
363 (3) (a) Subject to the other provisions of this Subsection (3), a claimant, estate, or trust
364 may claim a nonrefundable tax credit under this Subsection (3) with respect to a residential unit
365 the claimant, estate, or trust owns or uses if:
366 (i) the claimant, estate, or trust:
367 (A) purchases and completes a residential energy system to supply all or part of the
368 energy required for the residential unit; or
369 (B) participates in the financing of a residential energy system to supply all or part of
370 the energy required for the residential unit;
371 (ii) the residential energy system is completed and placed in service on or after January
372 1, 2007; and
373 (iii) the claimant, estate, or trust obtains a written certification from the office in
374 accordance with Subsection (4).
375 (b) (i) Subject to Subsections (3)(b)(ii) through (vi), the tax credit is equal to 25% of
376 the reasonable costs of each residential energy system installed with respect to each residential
377 unit the claimant, estate, or trust owns or uses.
378 (ii) A tax credit under this Subsection (3) may include installation costs.
379 (iii) A claimant, estate, or trust may claim a tax credit under this Subsection (3) for the
380 taxable year in which the residential energy system is completed and placed in service.
381 (iv) If the amount of a tax credit under this Subsection (3) exceeds a claimant's,
382 estate's, or trust's tax liability under this chapter for a taxable year, the amount of the tax credit
383 exceeding the liability may be carried forward for a period that does not exceed the next four
384 taxable years.
385 (v) (A) [
386 amount of tax credit a claimant, estate, or trust may claim under this Subsection (3) may not
387 exceed $2,000 per residential unit.
388 (B) If the commercial energy system utilizes only an active solar system or a passive
389 solar system, or both, to supply energy to the commercial unit, the tax credit claimed under this
390 Subsection (3) may not exceed $40,000 for a taxable year beginning on or after January 1,
391 2017, and ending on December 31, 2017.
392 (C) If the commercial energy system utilizes only an active solar system or a passive
393 solar system, or both, to supply energy to the commercial unit, the tax credit claimed under this
394 Subsection (3) may not exceed $30,000 for a taxable year beginning on or after January 1,
395 2018, and ending on December 31, 2018.
396 (D) If the commercial energy system utilizes only an active solar system or a passive
397 solar system, or both, to supply energy to the commercial unit, the tax credit claimed under this
398 Subsection (3) may not exceed $20,000 for a taxable year beginning on or after January 1,
399 2019, and ending on December 31, 2019.
400 (E) If the commercial energy system utilizes only an active solar system or a passive
401 solar system, or both, to supply energy to the commercial unit, the tax credit claimed under this
402 Subsection (3) may not exceed $10,000 for a taxable year beginning on or after January 1,
403 2020, and ending on December 31, 2020.
404 (vi) A claimant, estate, or trust may claim a tax credit with respect to additional
405 residential energy systems or parts of residential energy systems for a subsequent taxable year
406 if the total amount of tax credit the claimant, estate, or trust claims does not exceed $2,000 per
407 residential unit.
408 (c) (i) Subject to Subsections (3)(c)(ii) and (iii), a claimant, estate, or trust that leases a
409 residential energy system installed on a residential unit may claim a tax credit under this
410 Subsection (3) if the claimant, estate, or trust confirms that the lessor irrevocably elects not to
411 claim the tax credit.
412 (ii) A claimant, estate, or trust described in Subsection (3)(c)(i) that leases a residential
413 energy system may claim as a tax credit under this Subsection (3) only the principal recovery
414 portion of the lease payments.
415 (iii) A claimant, estate, or trust described in Subsection (3)(c)(i) that leases a residential
416 energy system may claim a tax credit under this Subsection (3) for a period that does not
417 exceed seven taxable years after the date the lease begins, as stated in the lease agreement.
418 (d) If a claimant, estate, or trust sells a residential unit to another person before the
419 claimant, estate, or trust claims the tax credit under this Subsection (3):
420 (i) the claimant, estate, or trust may assign the tax credit to the other person; and
421 (ii) (A) if the other person files a return under Chapter 7, Corporate Franchise and
422 Income Taxes, the other person may claim the tax credit as if the other person had met the
423 requirements of Section 59-7-614 to claim the tax credit; or
424 (B) if the other person files a return under this chapter, the other person may claim the
425 tax credit under this section as if the other person had met the requirements of this section to
426 claim the tax credit.
427 (4) (a) Before a claimant, estate, or trust may claim a tax credit under this section, the
428 claimant, estate, or trust shall obtain a written certification from the office.
429 (b) The office shall issue a claimant, estate, or trust a written certification if the office
430 determines that:
431 (i) the claimant, estate, or trust meets the requirements of this section to receive a tax
432 credit; and
433 (ii) the office determines that the residential energy system with respect to which the
434 claimant, estate, or trust seeks to claim a tax credit:
435 (A) has been completely installed;
436 (B) is a viable system for saving or producing energy from renewable resources; and
437 (C) is safe, reliable, efficient, and technically feasible to ensure that the residential
438 energy system uses the state's renewable and nonrenewable energy resources in an appropriate
439 and economic manner.
440 (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
441 office may make rules:
442 (i) for determining whether a residential energy system meets the requirements of
443 Subsection (4)(b)(ii); and
444 (ii) for purposes of a tax credit under Subsection (3), establishing the reasonable costs
445 of a residential energy system, as an amount per unit of energy production.
446 (d) A claimant, estate, or trust that obtains a written certification from the office shall
447 retain the certification for the same time period a person is required to keep books and records
448 under Section 59-1-1406.
449 (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
450 commission may make rules to address the certification of a tax credit under this section.
451 (6) A tax credit under this section is in addition to any tax credits provided under the
452 laws or rules and regulations of the United States.
453 (7) A purchaser of one or more solar units that claims a tax credit under Section
454 59-10-1024 for the purchase of the one or more solar units may not claim a tax credit under this
455 section for that purchase.
456 (8) (a) On or before October 1, 2017, and every five years after 2017, the Revenue and
457 Taxation Interim Committee shall review each tax credit provided by this section and report its
458 recommendations to the Legislative Management Committee concerning whether the tax credit
459 should be continued, modified, or repealed.
460 (b) The Revenue and Taxation Interim Committee's report under Subsection (8)(a)
461 shall include information concerning the cost of the tax credit, the purpose and effectiveness of
462 the tax credit, and the state's benefit from the tax credit.
463 Section 3. Section 59-10-1106 is amended to read:
464 59-10-1106. Refundable renewable energy systems tax credits -- Definitions --
465 Certification -- Rulemaking authority -- Revenue and Taxation Interim Committee study.
466 (1) As used in this section:
467 (a) "Active solar system" has the same meaning as defined in Section 59-10-1014.
468 (b) "Biomass system" has the same meaning as defined in Section 59-10-1014.
469 (c) "Commercial energy system" has the same meaning as defined in Section 59-7-614.
470 (d) "Commercial enterprise" has the same meaning as defined in Section 59-7-614.
471 (e) (i) "Commercial unit" has the same meaning as defined in Section 59-7-614.
472 (ii) Notwithstanding Subsection (1)(e)(i):
473 (A) with respect to an active solar system used for agricultural water pumping or a
474 wind system, each individual energy generating device is considered to be a commercial unit;
475 or
476 (B) if an energy system is the building or structure that a claimant, estate, or trust uses
477 to transact business, a commercial unit is the complete energy system itself.
478 (f) "Direct use geothermal system" has the same meaning as defined in Section
479 59-10-1014.
480 (g) "Geothermal electricity" has the same meaning as defined in Section 59-10-1014.
481 (h) "Geothermal energy" has the same meaning as defined in Section 59-10-1014.
482 (i) "Geothermal heat pump system" has the same meaning as defined in Section
483 59-10-1014.
484 (j) "Hydroenergy system" has the same meaning as defined in Section 59-10-1014.
485 (k) "Office" means the Office of Energy Development created in Section 63M-4-401.
486 (l) "Passive solar system" has the same meaning as defined in Section 59-10-1014.
487 (m) "Principal recovery portion" has the same meaning as defined in Section
488 59-10-1014.
489 (n) "Wind system" has the same meaning as defined in Section 59-10-1014.
490 (2) A claimant, estate, or trust may claim an energy system tax credit as provided in
491 this section against a tax due under this chapter for a taxable year.
492 (3) (a) Subject to the other provisions of this Subsection (3), a claimant, estate, or trust
493 may claim a refundable tax credit under this Subsection (3) with respect to a commercial
494 energy system if:
495 (i) the commercial energy system does not use:
496 (A) wind, geothermal electricity, solar, or biomass equipment capable of producing a
497 total of 660 or more kilowatts of electricity; or
498 (B) solar equipment capable of producing 2,000 or more kilowatts of electricity;
499 (ii) the claimant, estate, or trust purchases or participates in the financing of the
500 commercial energy system;
501 (iii) (A) the commercial energy system supplies all or part of the energy required by
502 commercial units owned or used by the claimant, estate, or trust; or
503 (B) the claimant, estate, or trust sells all or part of the energy produced by the
504 commercial energy system as a commercial enterprise;
505 (iv) the commercial energy system is completed and placed in service on or after
506 January 1, 2007; and
507 (v) the claimant, estate, or trust obtains a written certification from the office in
508 accordance with Subsection (6).
509 (b) (i) Subject to Subsections (3)(b)(ii) through (v), the tax credit is equal to 10% of the
510 reasonable costs of the commercial energy system.
511 (ii) A tax credit under this Subsection (3) may include installation costs.
512 (iii) A claimant, estate, or trust may claim a tax credit under this Subsection (3) for the
513 taxable year in which the commercial energy system is completed and placed in service.
514 (iv) A tax credit under this Subsection (3) may not be carried forward or carried back.
515 (v) (A) [
516 amount of tax credit a claimant, estate, or trust may claim under this Subsection (3) may not
517 exceed $50,000 per commercial unit.
518 (B) If the residential energy system utilizes only an active solar system or a passive
519 solar system, or both, to supply energy to the residential unit, the tax credit claimed under this
520 Subsection (3) may not exceed $1,500 for a taxable year beginning on or after January 1, 2018,
521 and ending on December 31, 2018.
522 (C) If the residential energy system utilizes only an active solar system or a passive
523 solar system, or both, to supply energy to the residential unit, the tax credit claimed under this
524 Subsection (3) may not exceed $1,000 for a taxable year beginning on or after January 1, 2019,
525 and ending on December 31, 2019.
526 (D) If the residential energy system utilizes only an active solar system or a passive
527 solar system, or both, to supply energy to the residential unit, the tax credit claimed under this
528 Subsection (3) may not exceed $500 for a taxable year beginning on or after January 1, 2020,
529 and ending on December 31, 2020.
530 (c) (i) Subject to Subsections (3)(c)(ii) and (iii), a claimant, estate, or trust that is a
531 lessee of a commercial energy system installed on a commercial unit may claim a tax credit
532 under this Subsection (3) if the claimant, estate, or trust confirms that the lessor irrevocably
533 elects not to claim the tax credit.
534 (ii) A claimant, estate, or trust described in Subsection (3)(c)(i) may claim as a tax
535 credit under this Subsection (3) only the principal recovery portion of the lease payments.
536 (iii) A claimant, estate, or trust described in Subsection (3)(c)(i) may claim a tax credit
537 under this Subsection (3) for a period that does not exceed seven taxable years after the date the
538 lease begins, as stated in the lease agreement.
539 (4) (a) Subject to the other provisions of this Subsection (4), a claimant, estate, or trust
540 may claim a refundable tax credit under this Subsection (4) with respect to a commercial
541 energy system if:
542 (i) the commercial energy system uses wind, geothermal electricity, or biomass
543 equipment capable of producing a total of 660 or more kilowatts of electricity;
544 (ii) (A) the commercial energy system supplies all or part of the energy required by
545 commercial units owned or used by the claimant, estate, or trust; or
546 (B) the claimant, estate, or trust sells all or part of the energy produced by the
547 commercial energy system as a commercial enterprise;
548 (iii) the commercial energy system is completed and placed in service on or after
549 January 1, 2007; and
550 (iv) the claimant, estate, or trust obtains a written certification from the office in
551 accordance with Subsection (6).
552 (b) (i) Subject to Subsections (4)(b)(ii) and (iii), a tax credit under this Subsection (4)
553 is equal to the product of:
554 (A) 0.35 cents; and
555 (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
556 (ii) A tax credit under this Subsection (4) may be claimed for production occurring
557 during a period of 48 months beginning with the month in which the commercial energy
558 system is placed in commercial service.
559 (iii) A tax credit under this Subsection (4) may not be carried forward or back.
560 (c) A claimant, estate, or trust that is a lessee of a commercial energy system installed
561 on a commercial unit may claim a tax credit under this Subsection (4) if the claimant, estate, or
562 trust confirms that the lessor irrevocably elects not to claim the tax credit.
563 (5) (a) Subject to the other provisions of this Subsection (5), a claimant, estate, or trust
564 may claim a refundable tax credit as provided in this Subsection (5) if:
565 (i) the claimant, estate, or trust owns a commercial energy system that uses solar
566 equipment capable of producing a total of 660 or more kilowatts of electricity;
567 (ii) (A) the commercial energy system supplies all or part of the energy required by
568 commercial units owned or used by the claimant, estate, or trust; or
569 (B) the claimant, estate, or trust sells all or part of the energy produced by the
570 commercial energy system as a commercial enterprise;
571 (iii) the claimant, estate, or trust does not claim a tax credit under Subsection (3);
572 (iv) the commercial energy system is completed and placed in service on or after
573 January 1, 2015; and
574 (v) the claimant, estate, or trust obtains a written certification from the office in
575 accordance with Subsection (6).
576 (b) (i) Subject to Subsections (5)(b)(ii) and (iii), a tax credit under this Subsection (5)
577 is equal to the product of:
578 (A) 0.35 cents; and
579 (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
580 (ii) A tax credit under this Subsection (5) may be claimed for production occurring
581 during a period of 48 months beginning with the month in which the commercial energy
582 system is placed in commercial service.
583 (iii) A tax credit under this Subsection (5) may not be carried forward or carried back.
584 (c) A claimant, estate, or trust that is a lessee of a commercial energy system installed
585 on a commercial unit may claim a tax credit under this Subsection (5) if the claimant, estate, or
586 trust confirms that the lessor irrevocably elects not to claim the tax credit.
587 (6) (a) Before a claimant, estate, or trust may claim a tax credit under this section, the
588 claimant, estate, or trust shall obtain a written certification from the office.
589 (b) The office shall issue a claimant, estate, or trust a written certification if the office
590 determines that:
591 (i) the claimant, estate, or trust meets the requirements of this section to receive a tax
592 credit; and
593 (ii) the office determines that the commercial energy system with respect to which the
594 claimant, estate, or trust seeks to claim a tax credit:
595 (A) has been completely installed;
596 (B) is a viable system for saving or producing energy from renewable resources; and
597 (C) is safe, reliable, efficient, and technically feasible to ensure that the commercial
598 energy system uses the state's renewable and nonrenewable resources in an appropriate and
599 economic manner.
600 (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
601 office may make rules:
602 (i) for determining whether a commercial energy system meets the requirements of
603 Subsection (6)(b)(ii); and
604 (ii) for purposes of a tax credit under Subsection (3), establishing the reasonable costs
605 of a commercial energy system, as an amount per unit of energy production.
606 (d) A claimant, estate, or trust that obtains a written certification from the office shall
607 retain the certification for the same time period a person is required to keep books and records
608 under Section 59-1-1406.
609 (7) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
610 commission may make rules to address the certification of a tax credit under this section.
611 (8) A tax credit under this section is in addition to any tax credits provided under the
612 laws or rules and regulations of the United States.
613 (9) A purchaser of one or more solar units that claims a tax credit under Section
614 59-10-1024 for the purchase of the one or more solar units may not claim a tax credit under this
615 section for that purchase.
616 (10) (a) On or before October 1, 2017, and every five years after 2017, the Revenue
617 and Taxation Interim Committee shall review each tax credit provided by this section and
618 report its recommendations to the Legislative Management Committee concerning whether the
619 credit should be continued, modified, or repealed.
620 (b) The Revenue and Taxation Interim Committee's report under Subsection (10)(a)
621 shall include information concerning the cost of the credit, the purpose and effectiveness of the
622 credit, and the state's benefit from the credit.
623 Section 4. Section 63I-2-259 is amended to read:
624 63I-2-259. Repeal dates -- Title 59.
625 [
626 [
627 [
628 (2) Subsection 59-7-614(1)(a) is repealed on January 1, 2021.
629 (3) Subsections 59-7-614(1)(c)(i)(A) and (G) are repealed on January 1, 2021.
630 (4) Subsection 59-7-614(1)(e)(ii)(A) is repealed on January 1, 2021.
631 (5) Subsection 59-7-614(1)(l) is repealed on January 1, 2021.
632 (6) Subsections 59-7-614(1)(n)(i) and (vi) are repealed on January 1, 2021.
633 (7) Subsection 59-7-614(3)(b)(v)(A), the language that states "Except as provided in
634 Subsections (3)(b)(v)(B) through (3)(b)(v)(D)," is repealed on January 1, 2021.
635 (8) Subsections 59-7-614(3)(b)(v)(B) through (3)(b)(v)(D) are repealed on January 1,
636 2021.
637 (9) Subsection 59-7-614(4)(a)(i)(A), the language that states "solar," is repealed on
638 January 1, 2021.
639 (10) Subsection 59-7-614(4)(b)(v)(A), the language that states, "Except as provided in
640 Subsections (4)(b)(v)(B) through (4)(b)(v)(E)," is repealed on January 1, 2021.
641 (11) Subsections 59-7-614(4)(b)(v)(B) through (4)(b)(v)(E) are repealed on January 1,
642 2021.
643 (12) Subsection 59-7-614(6)(a)(i) is repealed on January 1, 2021.
644 (13) Subsection 59-10-1106(1)(a) is repealed on January 1, 2021.
645 (14) Subsection 59-10-1106(1)(e)(ii)(A) is repealed on January 1, 2021.
646 (15) Subsection 59-10-1106(1)(l) is repealed on January 1, 2021.
647 (16) Subsection 59-10-1106(3)(a)(i)(A), the language that states "solar," is repealed on
648 January 1, 2021.
649 (17) Subsection 59-10-1106(3)(a)(i)(B) is repealed on January 1, 2021.
650 (18) Subsection 59-10-1106(3)(b)(v)(A), the language that states, "Except as provided
651 in Subsections (3)(b)(v)(B) through (D)," is repealed on January 1, 2021.
652 (19) Subsections 59-10-1106 (3)(b)(v)(B) through (D) are repealed on January 1, 2021.
653 (20) Subsection 59-10-1106(5)(a)(i) is repealed on January 1, 2021;
654 (21) Subsection 59-10-1106(9) is repealed on January 1, 2021.
655 (22) Subsection 59-10-1014(1)(a) is repealed on January 1, 2021.
656 (23) Subsection 59-10-1014(1)(i) is repealed on January 1, 2021.
657 (24) Subsections 59-10-1014(1)(k)(i) and (vi) are repealed on January 1, 2021.
658 (25) Subsection 59-10-1014(3)(b)(v)(A), the language that states, "Except as provided
659 in Subsections (3)(b)(v)(B) through (D)," is repealed on January 1, 2021.
660 (26) Subsections 59-10-1014 (3)(b)(v)(B) through (E) are repealed on January 1, 2021.
661 (27) Subsection 59-10-1014(7) is repealed on January 1, 2021.
662 (28) Section 59-10-1024 is repealed on January 1, 2021.
663 (29) On January 1, 2021, when making the changes in this section, the Office of
664 Legislative Research and General Counsel shall, in addition to its authority under Subsection
665 36-12-12(3), make corrections necessary to ensure that sections and subsections identified in
666 this section are complete sentences and accurately reflect the office's perception of the
667 Legislature's intent.
668 Section 5. Section 63M-4-203 is amended to read:
669 63M-4-203. Reports.
670 (1) The governor's energy advisor shall report annually to:
671 (a) the governor; and
672 (b) the Natural Resources, Agriculture, and Environment Interim Committee.
673 (2) The report required in Subsection (1) shall:
674 (a) summarize the status and development of the state's energy resources;
675 (b) summarize the activities and accomplishments of the Office of Energy
676 Development;
677 (c) address the governor's energy advisor's activities under this part; and
678 (d) recommend any energy-related executive or legislative action the governor's energy
679 advisor considers beneficial to the state, including updates to the state energy policy under
680 Section 63M-4-301.
681 (3) The governor's energy advisor shall report to the Natural Resources, Agriculture,
682 and Environment Interim Committee, no later than October 30, 2017, on the advisability of
683 creating a grant program within the office for residential and commercial energy systems to
684 utilize solar power.
Legislative Review Note
Office of Legislative Research and General Counsel