7 LONG TITLE
8 General Description:
9 This bill amends the individual income tax credit for certain residential renewable
10 energy systems.
11 Highlighted Provisions:
12 This bill:
13 ▸ phases out the individual income tax credit for certain residential renewable energy
14 systems; and
15 ▸ amends the maximum individual income tax credit for certain residential renewable
16 energy systems.
17 Money Appropriated in this Bill:
19 Other Special Clauses:
21 Utah Code Sections Affected:
23 59-10-1014, as last amended by Laws of Utah 2016, Third Special Session, Chapter 1
25 Be it enacted by the Legislature of the state of Utah:
26 Section 1. Section 59-10-1014 is amended to read:
27 59-10-1014. Nonrefundable renewable energy systems tax credits -- Definitions --
28 Certification -- Rulemaking authority.
29 (1) As used in this section:
30 (a) (i) "Active solar system" means a system of equipment that is capable of:
31 (A) collecting and converting incident solar radiation into thermal, mechanical, or
32 electrical energy; and
33 (B) transferring a form of energy described in Subsection (1)(a)(i)(A) by a separate
34 apparatus to storage or to the point of use.
35 (ii) "Active solar system" includes water heating, space heating or cooling, and
36 electrical or mechanical energy generation.
37 (b) "Biomass system" means a system of apparatus and equipment for use in:
38 (i) converting material into biomass energy, as defined in Section 59-12-102; and
39 (ii) transporting the biomass energy by separate apparatus to the point of use or storage.
40 (c) "Direct use geothermal system" means a system of apparatus and equipment that
41 enables the direct use of geothermal energy to meet energy needs, including heating a building,
42 an industrial process, and aquaculture.
43 (d) "Geothermal electricity" means energy that is:
44 (i) contained in heat that continuously flows outward from the earth; and
45 (ii) used as a sole source of energy to produce electricity.
46 (e) "Geothermal energy" means energy generated by heat that is contained in the earth.
47 (f) "Geothermal heat pump system" means a system of apparatus and equipment that:
48 (i) enables the use of thermal properties contained in the earth at temperatures well
49 below 100 degrees Fahrenheit; and
50 (ii) helps meet heating and cooling needs of a structure.
51 (g) "Hydroenergy system" means a system of apparatus and equipment that is capable
53 (i) intercepting and converting kinetic water energy into electrical or mechanical
54 energy; and
55 (ii) transferring this form of energy by separate apparatus to the point of use or storage.
56 (h) "Office" means the Office of Energy Development created in Section 63M-4-401.
57 (i) (i) "Passive solar system" means a direct thermal system that utilizes the structure of
58 a building and its operable components to provide for collection, storage, and distribution of
59 heating or cooling during the appropriate times of the year by utilizing the climate resources
60 available at the site.
61 (ii) "Passive solar system" includes those portions and components of a building that
62 are expressly designed and required for the collection, storage, and distribution of solar energy.
63 (j) "Photovoltaic system" means an active solar system that generates electricity from
66 constitutes the cost a person incurs in acquiring a residential energy system.
67 (ii) "Principal recovery portion" does not include:
68 (A) an interest charge; or
69 (B) a maintenance expense.
71 for a residential unit:
72 (i) an active solar system;
73 (ii) a biomass system;
74 (iii) a direct use geothermal system;
75 (iv) a geothermal heat pump system;
76 (v) a hydroenergy system;
77 (vi) a passive solar system; or
78 (vii) a wind system.
80 dwelling unit that:
81 (A) is located in the state; and
82 (B) serves as a dwelling for a person, group of persons, or a family.
83 (ii) "Residential unit" does not include property subject to a fee under:
84 (A) Section 59-2-404;
85 (B) Section 59-2-405;
86 (C) Section 59-2-405.1;
87 (D) Section 59-2-405.2; or
88 (E) Section 59-2-405.3.
90 (i) intercepting and converting wind energy into mechanical or electrical energy; and
91 (ii) transferring these forms of energy by a separate apparatus to the point of use or
93 (2) A claimant, estate, or trust may claim an energy system tax credit as provided in
94 this section against a tax due under this chapter for a taxable year.
95 (3) [
96 beginning on or before December 31, 2021, a claimant, estate, or trust may claim a
97 nonrefundable tax credit under this [
98 the claimant, estate, or trust owns or uses if:
101 the energy required for the residential unit; or
103 part of the energy required for the residential unit;
105 or after January 1, 2007; and
107 accordance with Subsection [
109 (4) (a) For a residential energy system, other than a photovoltaic system, the tax credit
110 described in this section is equal to the lesser of:
111 (i) 25% of the reasonable costs, including installation costs, of each residential energy
112 system installed with respect to each residential unit the claimant, estate, or trust owns or uses[
114 (ii) $2,000.
115 (b) Subject to Subsection (5)(d), for a residential energy system that is a photovoltaic
116 system, the tax credit described in this section is equal to the lesser of:
117 (i) 25% of the reasonable costs, including installation costs, of each system installed
118 with respect to each residential unit the claimant, estate, or trust owns or uses; or
119 (ii) (A) for a system installed on or after January 1, 2007, but before December 31,
120 2017, $2,000;
121 (B) for a system installed on or after January 1, 2018, but on or before December 31,
122 2018, $1,600;
123 (C) for a system installed on or after January 1, 2019, but on or before December 31,
124 2019, $1,200;
125 (D) for a system installed on or after January 1, 2020, but on or before December 31,
126 2020, $800; and
127 (E) for a system installed on or after January 1, 2021, but on or before December 31,
128 2021, $400.
129 (c) (i) The office shall determine the amount of the tax credit that a claimant, estate, or
130 trust may claim and list that amount on the written certification that the office issues under
131 Subsection (5).
132 (ii) The claimant, estate, or trust may claim the tax credit in the amount listed on the
133 written certification that the office issues under Subsection (5).
135 for the taxable year in which the residential energy system is [
138 certification exceeds a claimant's, estate's, or trust's tax liability under this chapter for a taxable
139 year, the claimant, estate, or trust may carry forward the amount of the tax credit exceeding the
140 liability [
144 residential energy systems or parts of residential energy systems for a subsequent taxable year
145 if the total amount of tax credit the claimant, estate, or trust claims does not exceed $2,000 per
146 residential unit.
148 that leases a residential energy system installed on a residential unit may claim a tax credit
149 under [
150 elects not to claim the tax credit.
151 (ii) A claimant, estate, or trust described in Subsection [
152 residential energy system may claim as a tax credit under [
153 principal recovery portion of the lease payments.
154 (iii) A claimant, estate, or trust described in Subsection [
155 residential energy system may claim a tax credit under [
156 does not exceed seven taxable years after the date the lease begins, as stated in the lease
159 the claimant, estate, or trust claims the tax credit under [
160 (i) the claimant, estate, or trust may assign the tax credit to the other person; and
161 (ii) (A) if the other person files a return under Chapter 7, Corporate Franchise and
162 Income Taxes, the other person may claim the tax credit as if the other person had met the
163 requirements of Section 59-7-614 to claim the tax credit; or
164 (B) if the other person files a return under this chapter, the other person may claim the
165 tax credit under this section as if the other person had met the requirements of this section to
166 claim the tax credit.
168 the claimant, estate, or trust shall obtain a written certification from the office.
169 (b) The office shall issue a claimant, estate, or trust a written certification if the office
170 determines that:
171 (i) the claimant, estate, or trust meets the requirements of this section to receive a tax
172 credit; and
173 (ii) the office determines that the residential energy system with respect to which the
174 claimant, estate, or trust seeks to claim a tax credit:
175 (A) has been completely installed;
176 (B) is a viable system for saving or producing energy from renewable resources; and
177 (C) is safe, reliable, efficient, and technically feasible to ensure that the residential
178 energy system uses the state's renewable and nonrenewable energy resources in an appropriate
179 and economic manner.
180 (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
181 office may make rules:
182 (i) for determining whether a residential energy system meets the requirements of
183 Subsection [
184 (ii) for purposes of determining the amount of a tax credit that a claimant, estate, or
185 trust may receive under Subsection [
186 energy system, as an amount per unit of energy production.
187 (d) A claimant, estate, or trust that obtains a written certification from the office shall
188 retain the certification for the same time period a person is required to keep books and records
189 under Section 59-1-1406.
192 (6) A tax credit under this section is in addition to any tax credits provided under the
193 laws or rules and regulations of the United States.
194 (7) A purchaser of one or more solar units that claims a tax credit under Section
195 59-10-1024 for the purchase of the one or more solar units may not claim a tax credit under this
196 section for that purchase.