Representative Douglas V. Sagers proposes the following substitute bill:




Chief Sponsor: Douglas V. Sagers

Senate Sponsor: Scott D. Sandall


8     General Description:
9          This bill modifies provisions related to the Permanent Community Impact Fund and the
10     High Cost Infrastructure Development Tax Credit Act.
11     Highlighted Provisions:
12          This bill:
13          ▸     expands the definition of "throughput infrastructure project" to include a plant or
14     facility that stores, produces, or distributes hydrogen for use as a fuel in zero
15     emission motor vehicles, for electrical generation, or for industrial use in the
16     context of allowable uses for money in the Permanent Community Impact Fund;
17          ▸     expands the definition of "high cost infrastructure project" to include the
18     construction of a plant or other facility for the production and distribution of
19     hydrogen fuel used for transportation, in the context of a program to allow a tax
20     credit for costs associated with the project; and
21          ▸     expands the definition of "infrastructure."
22     Money Appropriated in this Bill:
23          None
24     Other Special Clauses:
25          None

26     Utah Code Sections Affected:
27     AMENDS:
28          35A-8-302, as last amended by Laws of Utah 2017, Chapter 262
29          63M-4-602, as last amended by Laws of Utah 2016, Chapter 348

31     Be it enacted by the Legislature of the state of Utah:
32          Section 1. Section 35A-8-302 is amended to read:
33          35A-8-302. Definitions.
34          As used in this part:
35          (1) "Bonus payments" means that portion of the bonus payments received by the
36     United States government under the Leasing Act paid to the state under Section 35 of the
37     Leasing Act, 30 U.S.C. Sec. 191, together with any interest that had accrued on those
38     payments.
39          (2) "Impact board" means the Permanent Community Impact Fund Board created under
40     Section 35A-8-304.
41          (3) "Impact fund" means the Permanent Community Impact Fund established by this
42     chapter.
43          (4) "Interlocal agency" means a legal or administrative entity created by a subdivision
44     or combination of subdivisions under the authority of Title 11, Chapter 13, Interlocal
45     Cooperation Act.
46          (5) "Leasing Act" means the Mineral Lands Leasing Act of 1920, 30 U.S.C. Sec. 181 et
47     seq.
48          (6) "Qualifying sales and use tax distribution reduction" means that, for the calendar
49     year beginning on January 1, 2008, the total sales and use tax distributions a city received
50     under Section 59-12-205 were reduced by at least 15% from the total sales and use tax
51     distributions the city received under Section 59-12-205 for the calendar year beginning on
52     January 1, 2007.
53          (7) "Subdivision" means a county, city, town, county service area, special service
54     district, special improvement district, water conservancy district, water improvement district,
55     sewer improvement district, housing authority, building authority, school district, or public
56     postsecondary institution organized under the laws of this state.

57          (8) (a) "Throughput infrastructure project" means the following facilities, whether
58     located within, partially within, or outside of the state:
59          (i) a bulk commodities ocean terminal;
60          (ii) a pipeline for the transportation of liquid or gaseous hydrocarbons;
61          (iii) electric transmission lines and ancillary facilities;
62          (iv) a shortline freight railroad and ancillary facilities;
63          (v) a plant [for] or facility for storing, distributing, or producing hydrogen, including
64     the liquification of hydrogen, for use as a fuel in zero emission motor vehicles, for electricity
65     generation, or for industrial use; or
66          (vi) a plant for the production of zero emission hydrogen fueled trucks.
67          (b) "Throughput infrastructure project" includes:
68          (i) an ownership interest or a joint or undivided ownership interest in a facility;
69          (ii) a membership interest in the owner of a facility; or
70          (iii) a contractual right, whether secured or unsecured, to use all or a portion of the
71     throughput, transportation, or transmission capacity of a facility.
72          Section 2. Section 63M-4-602 is amended to read:
73          63M-4-602. Definitions.
74          As used in this part:
75          (1) "Applicant" means a person that conducts business in the state and that applies for a
76     tax credit under this part.
77          (2) "Fuel standard compliance project" means a project designed to retrofit a fuel
78     refinery in order to make the refinery capable of producing fuel that complies with the United
79     States Environmental Protection Agency's Tier 3 gasoline sulfur standard described in 40
80     C.F.R. Sec. 79.54.
81          (3) "High cost infrastructure project" means a project:
82          (a) (i) that expands or creates new industrial, mining, manufacturing, or agriculture
83     activity in the state, not including a retail business; [or]
84          (ii) that involves new investment of at least $50,000,000 in an existing industrial,
85     mining, manufacturing, or agriculture entity, by the entity; or
86          (iii) for the construction of a plant or other facility, including a fueling station, for the
87     storage, production, or distribution of hydrogen fuel used for transportation, electricity

88     generation, or industrial use;
89          (b) that requires or is directly facilitated by infrastructure construction; and
90          (c) for which the cost of infrastructure construction to the entity creating the project is
91     greater than:
92          (i) 10% of the total cost of the project; or
93          (ii) $10,000,000.
94          (4) "Infrastructure" means:
95          (a) an energy delivery project as defined in Section 63H-2-102;
96          (b) a railroad as defined in Section 54-2-1;
97          (c) a fuel standard compliance project;
98          (d) a road improvement project;
99          (e) a water self-supply project;
100          (f) a water removal system project; [or]
101          (g) a solution-mined subsurface salt cavern; or
102          [(g)] (h) a project that is designed to:
103          (i) increase the capacity for water delivery to a water user in the state; or
104          (ii) increase the capability of an existing water delivery system or related facility to
105     deliver water to a water user in the state.
106          (5) (a) "Infrastructure cost-burdened entity" means an applicant that enters into an
107     agreement with the office that qualifies the applicant to receive a tax credit as provided in this
108     part.
109          (b) "Infrastructure cost-burdened entity" includes a pass-through entity taxpayer, as
110     defined in Section 59-10-1402, of a person described in Subsection (5)(a).
111          (6) "Infrastructure-related revenue" means an amount of tax revenue, for an entity
112     creating a high cost infrastructure project, in a taxable year, that is directly attributable to a high
113     cost infrastructure project, under:
114          (a) Title 59, Chapter 7, Corporate Franchise and Income Taxes;
115          (b) Title 59, Chapter 10, Individual Income Tax Act; and
116          (c) Title 59, Chapter 12, Sales and Use Tax Act.
117          (7) "Office" means the Office of Energy Development created in Section 63M-4-401.
118          (8) "Tax credit" means a tax credit under Section 59-7-619 or 59-10-1034.

119          (9) "Tax credit certificate" means a certificate issued by the office to an infrastructure
120     cost-burdened entity that:
121          (a) lists the name of the infrastructure cost-burdened entity;
122          (b) lists the infrastructure cost-burdened entity's taxpayer identification number;
123          (c) lists, for a taxable year, the amount of the tax credit authorized for the infrastructure
124     cost-burdened entity under this part; and
125          (d) includes other information as determined by the office.