1     
ALTERNATIVE FUEL INCENTIVES AMENDMENTS

2     
2021 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Melissa G. Ballard

5     
Senate Sponsor: David P. Hinkins

6     Cosponsors:
7     Carl R. Albrecht
8     Clare Collard
Steven J. Lund
Michael J. Petersen
Angela Romero
Douglas V. Sagers
Keven J. Stratton

9     

10     LONG TITLE
11     General Description:
12          This bill modifies and enacts incentives related to alternative fuels.
13     Highlighted Provisions:
14          This bill:
15          ▸     enacts refundable corporate and individual income tax credits for systems that
16     produce hydrogen from renewable and nonrenewable sources; and
17          ▸     makes technical and conforming changes.
18     Money Appropriated in this Bill:
19          None
20     Other Special Clauses:
21          This bill provides a special effective date.
22     Utah Code Sections Affected:
23     AMENDS:
24          59-7-614, as last amended by Laws of Utah 2019, Chapter 247
25          59-10-1106, as last amended by Laws of Utah 2016, Third Special Session, Chapter 1
26     ENACTS:
27          59-7-626, Utah Code Annotated 1953
28          59-10-1113, Utah Code Annotated 1953
29     

30     Be it enacted by the Legislature of the state of Utah:
31          Section 1. Section 59-7-614 is amended to read:
32          59-7-614. Renewable energy systems tax credits -- Definitions -- Certification --
33     Rulemaking authority.
34          (1) As used in this section:
35          (a) (i) "Active solar system" means a system of equipment that is capable of:
36          (A) collecting and converting incident solar radiation into thermal, mechanical, or
37     electrical energy; and
38          (B) transferring a form of energy described in Subsection (1)(a)(i)(A) by a separate
39     apparatus to storage or to the point of use.
40          (ii) "Active solar system" includes water heating, space heating or cooling, and
41     electrical or mechanical energy generation.
42          (b) "Biomass system" means a system of apparatus and equipment for use in:
43          (i) converting material into biomass energy, as defined in Section 59-12-102; and
44          (ii) transporting the biomass energy by separate apparatus to the point of use or storage.
45          (c) "Commercial energy system" means a system that is:
46          (i) (A) an active solar system;
47          (B) a biomass system;
48          (C) a direct use geothermal system;
49          (D) a geothermal electricity system;
50          (E) a geothermal heat pump system;
51          (F) a hydroenergy system;
52          (G) a passive solar system; or
53          (H) a wind system;
54          (ii) located in the state; and
55          (iii) used:
56          (A) to supply energy to a commercial unit; or
57          (B) as a commercial enterprise.
58          (d) "Commercial enterprise" means an entity, the purpose of which is to produce:
59          (i) electrical, mechanical, or thermal energy for sale from a commercial energy system;
60     or
61          (ii) hydrogen for sale from a hydrogen production 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
66     wind system, each individual energy generating device is considered to be a commercial unit;
67     or
68          (B) if an energy system is the building or structure that an entity uses to transact
69     business, a commercial unit is the complete energy system itself.
70          (f) "Direct use geothermal system" means a system of apparatus and equipment that
71     enables the direct use of geothermal energy to meet energy needs, including heating a building,
72     an industrial process, and aquaculture.
73          (g) "Geothermal electricity" means energy that is:
74          (i) contained in heat that continuously flows outward from the earth; and
75          (ii) used as a sole source of energy to produce electricity.
76          (h) "Geothermal energy" means energy generated by heat that is contained in the earth.
77          (i) "Geothermal heat pump system" means a system of apparatus and equipment that:
78          (i) enables the use of thermal properties contained in the earth at temperatures well
79     below 100 degrees Fahrenheit; and
80          (ii) helps meet heating and cooling needs of a structure.
81          (j) "Hydroenergy system" means a system of apparatus and equipment that is capable
82     of:
83          (i) intercepting and converting kinetic water energy into electrical or mechanical
84     energy; and
85          (ii) transferring this form of energy by separate apparatus to the point of use or storage.
86          (k) "Hydrogen production system" means a system of apparatus and equipment, located
87     in this state, that uses:
88          (i) electricity from a renewable energy source to create hydrogen gas from water,
89     regardless of whether the renewable energy source is at a separate facility or the same facility
90     as the system of apparatus and equipment; or
91          (ii) uses renewable natural gas to produce hydrogen gas.
92          [(k)] (l) "Office" means the Office of Energy Development created in Section
93     63M-4-401.
94          [(l)] (m) (i) "Passive solar system" means a direct thermal system that utilizes the
95     structure of a building and [its] the structure's operable components to provide for collection,
96     storage, and distribution of heating or cooling during the appropriate times of the year by
97     utilizing the climate resources available at the site.
98          (ii) "Passive solar system" includes those portions and components of a building that
99     are expressly designed and required for the collection, storage, and distribution of solar energy.
100          [(m)] (n) "Photovoltaic system" means an active solar system that generates electricity
101     from sunlight.
102          [(n)] (o) (i) "Principal recovery portion" means the portion of a lease payment that
103     constitutes the cost a person incurs in acquiring a commercial energy system.
104          (ii) "Principal recovery portion" does not include:
105          (A) an interest charge; or
106          (B) a maintenance expense.
107          (p) "Renewable energy source" means the same as that term is defined in Section
108     54-17-601.
109          [(o)] (q) "Residential energy system" means the following used to supply energy to or
110     for a residential unit:
111          (i) an active solar system;
112          (ii) a biomass system;
113          (iii) a direct use geothermal system;
114          (iv) a geothermal heat pump system;
115          (v) a hydroenergy system;
116          (vi) a passive solar system; or
117          (vii) a wind system.
118          [(p)] (r) (i) "Residential unit" means a house, condominium, apartment, or similar
119     dwelling unit that:
120          (A) is located in the state; and
121          (B) serves as a dwelling for a person, group of persons, or a family.
122          (ii) "Residential unit" does not include property subject to a fee under:
123          (A) Section 59-2-405;
124          (B) Section 59-2-405.1;
125          (C) Section 59-2-405.2;
126          (D) Section 59-2-405.3; or
127          (E) Section 72-10-110.5.
128          [(q)] (s) "Wind system" means a system of apparatus and equipment that is capable of:
129          (i) intercepting and converting wind energy into mechanical or electrical energy; and
130          (ii) transferring these forms of energy by a separate apparatus to the point of use, sale,
131     or storage.
132          (2) A taxpayer may claim an energy system tax credit as provided in this section
133     against a tax due under this chapter for a taxable year.
134          (3) (a) Subject to the other provisions of this Subsection (3), a taxpayer may claim a
135     nonrefundable tax credit under this Subsection (3) with respect to a residential unit the taxpayer
136     owns or uses if:
137          (i) the taxpayer:
138          (A) purchases and completes a residential energy system to supply all or part of the
139     energy required for the residential unit; or
140          (B) participates in the financing of a residential energy system to supply all or part of
141     the energy required for the residential unit; and
142          [(ii) the residential energy system is completed and placed in service on or after
143     January 1, 2007; and]
144          [(iii)] (ii) the taxpayer obtains a written certification from the office in accordance with
145     Subsection [(7)] (8).
146          (b) (i) Subject to Subsections (3)(b)(ii) through (iv) and, as applicable, Subsection
147     (3)(c) or (d), the tax credit is equal to 25% of the reasonable costs of each residential energy
148     system installed with respect to each residential unit the taxpayer owns or uses.
149          (ii) A tax credit under this Subsection (3) may include installation costs.
150          (iii) A taxpayer may claim a tax credit under this Subsection (3) for the taxable year in
151     which the residential energy system is completed and placed in service.
152          (iv) If the amount of a tax credit under this Subsection (3) exceeds a taxpayer's tax
153     liability under this chapter for a taxable year, the taxpayer may carry forward the amount of the
154     tax credit exceeding the liability [may be carried forward] for a period that does not exceed the
155     next four taxable years.
156          (c) The total amount of tax credit a taxpayer may claim under this Subsection (3) for a
157     residential energy system, other than a photovoltaic system, may not exceed $2,000 per
158     residential unit.
159          (d) The total amount of tax credit a taxpayer may claim under this Subsection (3) for a
160     photovoltaic system may not exceed:
161          (i) for a system installed on or after January 1, 2018, but on or before December 31,
162     2020, $1,600;
163          (ii) for a system installed on or after January 1, 2021, but on or before December 31,
164     2021, $1,200;
165          (iii) for a system installed on or after January 1, 2022, but on or before December 31,
166     2022, $800;
167          (iv) for a system installed on or after January 1, 2023, but on or before December 31,
168     2023, $400; and
169          (v) for a system installed on or after January 1, 2024, $0.
170          (e) If a taxpayer sells a residential unit to another person before the taxpayer claims the
171     tax credit under this Subsection (3):
172          (i) the taxpayer may assign the tax credit to the other person; and
173          (ii) (A) if the other person files a return under this chapter, the other person may claim
174     the tax credit under this section as if the other person had met the requirements of this section
175     to claim the tax credit; or
176          (B) if the other person files a return under Chapter 10, Individual Income Tax Act, the
177     other person may claim the tax credit under Section 59-10-1014 as if the other person had met
178     the requirements of Section 59-10-1014 to claim the tax credit.
179          (4) (a) Subject to the other provisions of this Subsection (4), a taxpayer may claim a
180     refundable tax credit under this Subsection (4) with respect to a commercial energy system if:
181          (i) the commercial energy system does not use:
182          (A) wind, geothermal electricity, solar, or biomass equipment capable of producing a
183     total of 660 or more kilowatts of electricity; or
184          (B) solar equipment capable of producing 2,000 or more kilowatts of electricity;
185          (ii) the taxpayer purchases or participates in the financing of the commercial energy
186     system;
187          (iii) (A) the commercial energy system supplies all or part of the energy required by
188     commercial units owned or used by the taxpayer; or
189          (B) the taxpayer sells all or part of the energy produced by the commercial energy
190     system as a commercial enterprise;
191          [(iv) the commercial energy system is completed and placed in service on or after
192     January 1, 2007; and]
193          (iv) the taxpayer has not claimed and will not claim a tax credit under Subsection (7)
194     for hydrogen production using electricity for which the taxpayer claims a tax credit under this
195     Subsection (4); and
196          (v) the taxpayer obtains a written certification from the office in accordance with
197     Subsection [(7)] (8).
198          (b) (i) Subject to Subsections (4)(b)(ii) through [(v)] (iv), the tax credit is equal to 10%
199     of the reasonable costs of the commercial energy system.
200          (ii) A tax credit under this Subsection (4) may include installation costs.
201          (iii) A taxpayer [may claim] is eligible to claim a tax credit under this Subsection (4)
202     for the taxable year in which the commercial energy system is completed and placed in service.
203          [(iv) A tax credit under this Subsection (4) may not be carried forward or carried back.]
204          [(v)] (iv) The total amount of tax credit a taxpayer may claim under this Subsection (4)
205     may not exceed $50,000 per commercial unit.
206          (c) (i) Subject to Subsections (4)(c)(ii) and (iii), a taxpayer that is a lessee of a
207     commercial energy system installed on a commercial unit may claim a tax credit under this
208     Subsection (4) if the taxpayer confirms that the lessor irrevocably elects not to claim the tax
209     credit.
210          (ii) A taxpayer described in Subsection (4)(c)(i) may claim as a tax credit under this
211     Subsection (4) only the principal recovery portion of the lease payments.
212          (iii) A taxpayer described in Subsection (4)(c)(i) may claim a tax credit under this
213     Subsection (4) for a period that does not exceed seven taxable years after the [date] day on
214     which the lease begins, as stated in the lease agreement.
215          (5) (a) Subject to the other provisions of this Subsection (5), a taxpayer may claim a
216     refundable tax credit under this Subsection (5) with respect to a commercial energy system if:
217          (i) the commercial energy system uses wind, geothermal electricity, or biomass
218     equipment capable of producing a total of 660 or more kilowatts of electricity;
219          (ii) (A) the commercial energy system supplies all or part of the energy required by
220     commercial units owned or used by the taxpayer; or
221          (B) the taxpayer sells all or part of the energy produced by the commercial energy
222     system as a commercial enterprise;
223          [(iii) the commercial energy system is completed and placed in service on or after
224     January 1, 2007; and]
225          (iii) the taxpayer has not claimed and will not claim a tax credit under Subsection (7)
226     for hydrogen production using electricity for which the taxpayer claims a tax credit under this
227     Subsection (5); and
228          (iv) the taxpayer obtains a written certification from the office in accordance with
229     Subsection [(7)] (8).
230          (b) (i) Subject to [Subsections] Subsection (5)(b)(ii) [and (iii)], a tax credit under this
231     Subsection (5) is equal to the product of:
232          (A) 0.35 cents; and
233          (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
234          (ii) A taxpayer is eligible to claim a tax credit under this Subsection (5) [may be
235     claimed] for production occurring during a period of 48 months beginning with the month in
236     which the commercial energy system is placed in commercial service.
237          [(iii) A tax credit under this Subsection (5) may not be carried forward or carried back.]
238          (c) A taxpayer that is a lessee of a commercial energy system installed on a commercial
239     unit may claim a tax credit under this Subsection (5) if the taxpayer confirms that the lessor
240     irrevocably elects not to claim the tax credit.
241          (6) (a) Subject to the other provisions of this Subsection (6), a taxpayer may claim a
242     refundable tax credit as provided in this Subsection (6) if:
243          (i) the taxpayer owns a commercial energy system that uses solar equipment capable of
244     producing a total of 660 or more kilowatts of electricity;
245          (ii) (A) the commercial energy system supplies all or part of the energy required by
246     commercial units owned or used by the taxpayer; or
247          (B) the taxpayer sells all or part of the energy produced by the commercial energy
248     system as a commercial enterprise;
249          (iii) the taxpayer does not claim a tax credit under Subsection (4) and has not claimed
250     and will not claim a tax credit under Subsection (7) for hydrogen production using electricity
251     for which a taxpayer claims a tax credit under this Subsection (6); and
252          [(iv) the commercial energy system is completed and placed in service on or after
253     January 1, 2015; and]
254          [(v)] (iv) the taxpayer obtains a written certification from the office in accordance with
255     Subsection [(7)] (8).
256          (b) (i) Subject to [Subsections] Subsection (6)(b)(ii) [and (iii)], a tax credit under this
257     Subsection (6) is equal to the product of:
258          (A) 0.35 cents; and
259          (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
260          (ii) A taxpayer is eligible to claim a tax credit under this Subsection (6) [may be
261     claimed for] production occurring during a period of 48 months beginning with the month in
262     which the commercial energy system is placed in commercial service.
263          [(iii) A tax credit under this Subsection (6) may not be carried forward or carried back.]
264          (c) A taxpayer that is a lessee of a commercial energy system installed on a commercial
265     unit may claim a tax credit under this Subsection (6) if the taxpayer confirms that the lessor
266     irrevocably elects not to claim the tax credit.
267          (7) (a) A taxpayer may claim a refundable tax credit as provided in this Subsection (7)
268     if:
269          (i) the taxpayer owns a hydrogen production system;
270          (ii) the hydrogen production system is completed and placed in service on or after
271     January 1, 2022;
272          (iii) the taxpayer sells as a commercial enterprise, or supplies for the taxpayer's own
273     use in commercial units, the hydrogen produced from the hydrogen production system;
274          (iv) the taxpayer has not claimed and will not claim a tax credit under Subsection (4),
275     (5), or (6) or Section 59-7-626 for electricity or hydrogen used to meet the requirements of this
276     Subsection (7); and
277          (v) the taxpayer obtains a written certification from the office in accordance with
278     Subsection (8).
279          (b) (i) Subject to Subsections (7)(b)(ii) and (iii), a tax credit under this Subsection (7)
280     is equal to the product of:
281          (A) $0.12; and
282          (B) the number of kilograms of hydrogen produced during the taxable year.
283          (ii) A taxpayer may not receive a tax credit under this Subsection (7) for more than
284     5,600 metric tons of hydrogen per taxable year.
285          (iii) A taxpayer is eligible to claim a tax credit under this Subsection (7) for production
286     occurring during a period of 48 months beginning with the month in which the hydrogen
287     production system is placed in commercial service.
288          [(7)] (8) (a) Before a taxpayer may claim a tax credit under this section, the taxpayer
289     shall obtain a written certification from the office.
290          (b) The office shall issue a taxpayer a written certification if the office determines that:
291          (i) the taxpayer meets the requirements of this section to receive a tax credit; and
292          (ii) the residential energy system [or], the commercial energy system, or the hydrogen
293     production system with respect to which the taxpayer seeks to claim a tax credit:
294          (A) has been completely installed;
295          (B) is a viable system for saving or producing energy from renewable resources; and
296          (C) is safe, reliable, efficient, and technically feasible to ensure that the residential
297     energy system [or], the commercial energy system, or the hydrogen production system uses the
298     state's renewable and nonrenewable energy resources in an appropriate and economic manner.
299          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
300     office may make rules:
301          (i) for determining whether a residential energy system [or], a commercial energy
302     system, or a hydrogen production system meets the requirements of Subsection [(7)] (8)(b)(ii);
303     and
304          (ii) for purposes of a tax credit under Subsection (3) [or], (4), or (6), establishing the
305     reasonable costs of a residential energy system or a commercial energy system, as an amount
306     per unit of energy production.
307          (d) A taxpayer that obtains a written certification from the office shall retain the
308     certification for the same time period a person is required to keep books and records under
309     Section 59-1-1406.
310          (e) The office shall submit to the commission an electronic list that includes:
311          (i) the name and identifying information of each taxpayer to which the office issues a
312     written certification; and
313          (ii) for each taxpayer:
314          (A) the amount of the tax credit listed on the written certification; and
315          (B) the date the renewable energy system was installed.
316          [(8)] (9) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
317     Act, the commission may make rules to address the certification of a tax credit under this
318     section.
319          [(9)] (10) A tax credit under this section is in addition to any tax credits provided under
320     the laws or rules and regulations of the United States.
321          Section 2. Section 59-7-626 is enacted to read:
322          59-7-626. Refundable tax credit for nonrenewable hydrogen production system.
323          (1) As used in this section:
324          (a) "Commercial enterprise" means an entity, the purpose of which is to produce
325     hydrogen for sale from a hydrogen production system.
326          (b) "Commercial unit" means a building or structure that an entity uses to transact
327     business.
328          (c) "Hydrogen production system" means a system of apparatus and equipment, located
329     in this state, that produces hydrogen from nonrenewable sources.
330          (d) "Office" means the Office of Energy Development created in Section 63M-4-401.
331          (2) (a) A taxpayer may claim a refundable credit under this section if:
332          (i) the taxpayer owns a hydrogen production system;
333          (ii) the hydrogen production system is completed and placed in service on or after
334     January 1, 2022;
335          (iii) the taxpayer sells as a commercial enterprise, or supplies for the taxpayer's own
336     use in commercial units, the hydrogen produced from the hydrogen production system;
337          (iv) the taxpayer has not claimed and will not claim a tax credit under Section 59-7-614
338     for electricity used to meet the requirements of this section; and
339          (v) the taxpayer obtains a written certification from the office in accordance with
340     Subsection (3).
341          (b) (i) Subject to Subsections (2)(b)(ii) and (iii), a tax credit under this section is equal
342     to the product of:
343          (A) $0.12; and
344          (B) the number of kilograms of hydrogen produced during the taxable year.
345          (ii) A taxpayer may not receive a tax credit under this section for more than 5,600
346     metric tons of hydrogen per taxable year.
347          (iii) A taxpayer is eligible to claim a tax credit under this section for production
348     occurring during a period of 48 months beginning with the month in which the hydrogen
349     production system is placed in commercial service.
350          (3) (a) Before a taxpayer may claim a tax credit under this section, the taxpayer shall
351     obtain a written certification from the office.
352          (b) The office shall issue a taxpayer a written certification if the office determines that:
353          (i) the taxpayer meets the requirements of this section to receive a tax credit; and
354          (ii) the hydrogen production system with respect to which the taxpayer seeks to claim a
355     tax credit:
356          (A) has been completely installed; and
357          (B) is safe, reliable, efficient, and technically feasible to ensure that the hydrogen
358     production system uses the state's nonrenewable energy resources in an appropriate and
359     economic manner.
360          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
361     office may make rules for determining whether a hydrogen production system meets the
362     requirements of Subsection (3)(b)(ii).
363          (d) A taxpayer that obtains a written certification from the office shall retain the
364     certification for the same time period a person is required to keep books and records under
365     Section 59-1-1406.
366          (e) The office shall submit to the commission an electronic list that includes:
367          (i) the name and identifying information of each taxpayer to which the office issues a
368     written certification; and
369          (ii) for each taxpayer:
370          (A) the amount of the tax credit listed on the written certification; and
371          (B) the date the hydrogen production system was installed.
372          (4) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
373     commission may make rules to address the certification of a tax credit under this section.
374          (5) A tax credit under this section is in addition to any tax credits provided under the
375     laws or rules and regulations of the United States.
376          Section 3. Section 59-10-1106 is amended to read:
377          59-10-1106. Refundable renewable energy systems tax credits -- Definitions --
378     Certification -- Rulemaking authority.
379          (1) As used in this section:
380          (a) "Active solar system" means the same as that term is defined in Section
381     59-10-1014.
382          (b) "Biomass system" means the same as that term is defined in Section 59-10-1014.
383          (c) "Commercial energy system" means the same as that term is defined in Section
384     59-7-614.
385          (d) "Commercial enterprise" means the same as that term is defined in Section
386     59-7-614.
387          (e) [(i)] "Commercial unit" means the same as that term is defined in Section 59-7-614.
388          [(ii) Notwithstanding Subsection (1)(e)(i):]
389          [(A) with respect to an active solar system used for agricultural water pumping or a
390     wind system, each individual energy generating device is considered to be a commercial unit;
391     or]
392          [(B) if an energy system is the building or structure that a claimant, estate, or trust uses
393     to transact business, a commercial unit is the complete energy system itself.]
394          (f) "Direct use geothermal system" means the same as that term is defined in Section
395     59-10-1014.
396          (g) "Geothermal electricity" means the same as that term is defined in Section
397     59-10-1014.
398          (h) "Geothermal energy" means the same as that term is defined in Section 59-10-1014.
399          (i) "Geothermal heat pump system" means the same as that term is defined in Section
400     59-10-1014.
401          (j) "Hydroenergy system" means the same as that term is defined in Section
402     59-10-1014.
403          (k) "Hydrogen production system" means the same as that term is defined in Section
404     59-7-614.
405          [(k)] (l) "Office" means the Office of Energy Development created in Section
406     63M-4-401.
407          [(l)] (m) "Passive solar system" means the same as that term is defined in Section
408     59-10-1014.
409          [(m)] (n) "Principal recovery portion" means the same as that term is defined in Section
410     59-10-1014.
411          [(n)] (o) "Wind system" means the same as that term is defined in Section 59-10-1014.
412          (2) A claimant, estate, or trust may claim an energy system tax credit as provided in
413     this section against a tax due under this chapter for a taxable year.
414          (3) (a) Subject to the other provisions of this Subsection (3), a claimant, estate, or trust
415     may claim a refundable tax credit under this Subsection (3) with respect to a commercial
416     energy system if:
417          (i) the commercial energy system does not use:
418          (A) wind, geothermal electricity, solar, or biomass equipment capable of producing a
419     total of 660 or more kilowatts of electricity; or
420          (B) solar equipment capable of producing 2,000 or more kilowatts of electricity;
421          (ii) the claimant, estate, or trust purchases or participates in the financing of the
422     commercial energy system;
423          (iii) (A) the commercial energy system supplies all or part of the energy required by
424     commercial units owned or used by the claimant, estate, or trust; or
425          (B) the claimant, estate, or trust sells all or part of the energy produced by the
426     commercial energy system as a commercial enterprise;
427          [(iv) the commercial energy system is completed and placed in service on or after
428     January 1, 2007; and]
429          (iv) the claimant, estate, or trust has not claimed and will not claim a tax credit under
430     Subsection (6) for hydrogen production using electricity for which the claimant, estate, or trust
431     claims a tax credit under this Subsection (3); and
432          (v) the claimant, estate, or trust obtains a written certification from the office in
433     accordance with Subsection [(6)] (7).
434          (b) (i) Subject to Subsections (3)(b)(ii) through [(v)] (iv), the tax credit is equal to 10%
435     of the reasonable costs of the commercial energy system.
436          (ii) A tax credit under this Subsection (3) may include installation costs.
437          (iii) A claimant, estate, or trust [may claim] is eligible to claim a tax credit under this
438     Subsection (3) for the taxable year in which the commercial energy system is completed and
439     placed in service.
440          [(iv) A tax credit under this Subsection (3) may not be carried forward or carried back.]
441          [(v)] (iv) The total amount of tax credit a claimant, estate, or trust may claim under this
442     Subsection (3) may not exceed $50,000 per commercial unit.
443          (c) (i) Subject to Subsections (3)(c)(ii) and (iii), a claimant, estate, or trust that is a
444     lessee of a commercial energy system installed on a commercial unit may claim a tax credit
445     under this Subsection (3) if the claimant, estate, or trust confirms that the lessor irrevocably
446     elects not to claim the tax credit.
447          (ii) A claimant, estate, or trust described in Subsection (3)(c)(i) may claim as a tax
448     credit under this Subsection (3) only the principal recovery portion of the lease payments.
449          (iii) A claimant, estate, or trust described in Subsection (3)(c)(i) may claim a tax credit
450     under this Subsection (3) for a period that does not exceed seven taxable years after the [date]
451     day on which the lease begins, as stated in the lease agreement.
452          (4) (a) Subject to the other provisions of this Subsection (4), a claimant, estate, or trust
453     may claim a refundable tax credit under this Subsection (4) with respect to a commercial
454     energy system if:
455          (i) the commercial energy system uses wind, geothermal electricity, or biomass
456     equipment capable of producing a total of 660 or more kilowatts of electricity;
457          (ii) (A) the commercial energy system supplies all or part of the energy required by
458     commercial units owned or used by the claimant, estate, or trust; or
459          (B) the claimant, estate, or trust sells all or part of the energy produced by the
460     commercial energy system as a commercial enterprise;
461          [(iii) the commercial energy system is completed and placed in service on or after
462     January 1, 2007; and]
463          (iii) the claimant, estate, or trust has not claimed and will not claim a tax credit under
464     Subsection (6) for hydrogen production using electricity for which the claimant, estate, or trust
465     claims a tax credit under this Subsection (4); and
466          (iv) the claimant, estate, or trust obtains a written certification from the office in
467     accordance with Subsection [(6)] (7).
468          (b) (i) Subject to [Subsections] Subsection (4)(b)(ii) [and (iii)], a tax credit under this
469     Subsection (4) is equal to the product of:
470          (A) 0.35 cents; and
471          (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
472          (ii) A claimant, estate, or trust is eligible to claim a tax credit under this Subsection (4)
473     [may be claimed] for production occurring during a period of 48 months beginning with the
474     month in which the commercial energy system is placed in commercial service.
475          [(iii) A tax credit under this Subsection (4) may not be carried forward or back.]
476          (c) A claimant, estate, or trust that is a lessee of a commercial energy system installed
477     on a commercial unit may claim a tax credit under this Subsection (4) if the claimant, estate, or
478     trust confirms that the lessor irrevocably elects not to claim the tax credit.
479          (5) (a) Subject to the other provisions of this Subsection (5), a claimant, estate, or trust
480     may claim a refundable tax credit as provided in this Subsection (5) if:
481          (i) the claimant, estate, or trust owns a commercial energy system that uses solar
482     equipment capable of producing a total of 660 or more kilowatts of electricity;
483          (ii) (A) the commercial energy system supplies all or part of the energy required by
484     commercial units owned or used by the claimant, estate, or trust; or
485          (B) the claimant, estate, or trust sells all or part of the energy produced by the
486     commercial energy system as a commercial enterprise;
487          (iii) the claimant, estate, or trust does not claim a tax credit under Subsection (3);
488          [(iv) the commercial energy system is completed and placed in service on or after
489     January 1, 2015; and]
490          (iv) the claimant, estate, or trust has not claimed and will not claim a tax credit under
491     Subsection (6) for hydrogen production using electricity for which a taxpayer claims a tax
492     credit under this Subsection (5); and
493          (v) the claimant, estate, or trust obtains a written certification from the office in
494     accordance with Subsection [(6)] (7).
495          (b) (i) Subject to [Subsections] Subsection (5)(b)(ii) [and (iii)], a tax credit under this
496     Subsection (5) is equal to the product of:
497          (A) 0.35 cents; and
498          (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
499          (ii) A claimant, estate, or trust is eligible to claim a tax credit under this Subsection (5)
500     [may be claimed] for production occurring during a period of 48 months beginning with the
501     month in which the commercial energy system is placed in commercial service.
502          [(iii) A tax credit under this Subsection (5) may not be carried forward or carried back.]
503          (c) A claimant, estate, or trust that is a lessee of a commercial energy system installed
504     on a commercial unit may claim a tax credit under this Subsection (5) if the claimant, estate, or
505     trust confirms that the lessor irrevocably elects not to claim the tax credit.
506          (6) (a) A claimant, estate, or trust may claim a refundable tax credit as provided in this
507     Subsection (6) if:
508          (i) the claimant, estate, or trust owns a hydrogen production system;
509          (ii) the hydrogen production system is completed and placed in service on or after
510     January 1, 2022;
511          (iii) the claimant, estate, or trust sells as a commercial enterprise, or supplies for the
512     claimant's, estate's, or trust's own use in commercial units, the hydrogen produced from the
513     hydrogen production system;
514          (iv) the claimant, estate, or trust has not claimed and will not claim a tax credit under
515     Subsection (3), (4), or (5) for electricity used to meet the requirements of this Subsection (6);
516     and
517          (v) the claimant, estate, or trust obtains a written certification from the office in
518     accordance with Subsection (7).
519          (b) (i) Subject to Subsections (6)(b)(ii) and (iii), a tax credit under this Subsection (6)
520     is equal to the product of:
521          (A) $0.12; and
522          (B) the number of kilograms of hydrogen produced during the taxable year.
523          (ii) A claimant, estate, or trust may not receive a tax credit under this Subsection (6) for
524     more than 5,600 metric tons of hydrogen per taxable year.
525          (iii) A claimant, estate, or trust is eligible to claim a tax credit under this Subsection (6)
526     for production occurring during a period of 48 months beginning with the month in which the
527     hydrogen production system is placed in commercial service.
528          [(6)] (7) (a) Before a claimant, estate, or trust may claim a tax credit under this section,
529     the claimant, estate, or trust shall obtain a written certification from the office.
530          (b) The office shall issue a claimant, estate, or trust a written certification if the office
531     determines that:
532          (i) the claimant, estate, or trust meets the requirements of this section to receive a tax
533     credit; and
534          (ii) [the office determines that] the commercial energy system or the hydrogen
535     production system with respect to which the claimant, estate, or trust seeks to claim a tax
536     credit:
537          (A) has been completely installed;
538          (B) is a viable system for saving or producing energy from renewable resources; and
539          (C) is safe, reliable, efficient, and technically feasible to ensure that the commercial
540     energy system or the hydrogen production system uses the state's renewable and nonrenewable
541     resources in an appropriate and economic manner.
542          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
543     office may make rules:
544          (i) for determining whether a commercial energy system or a hydrogen production
545     system meets the requirements of Subsection [(6)] (7)(b)(ii); and
546          (ii) for purposes of a tax credit under Subsection (3), establishing the reasonable costs
547     of a commercial energy system, as an amount per unit of energy production.
548          (d) A claimant, estate, or trust that obtains a written certification from the office shall
549     retain the certification for the same time period a person is required to keep books and records
550     under Section 59-1-1406.
551          (e) The office shall submit to the commission an electronic list that includes:
552          (i) the name and identifying information of each claimant, estate, or trust to which the
553     office issues a written certification; and
554          (ii) for each claimant, estate, or trust:
555          (A) the amount of the tax credit listed on the written certification; and
556          (B) the date the commercial energy system or the hydrogen production system was
557     installed.
558          [(7)] (8) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
559     Act, the commission may make rules to address the certification of a tax credit under this
560     section.
561          [(8)] (9) A tax credit under this section is in addition to any tax credits provided under
562     the laws or rules and regulations of the United States.
563          [(9)] (10) A purchaser of one or more solar units that claims a tax credit under Section
564     59-10-1024 for the purchase of the one or more solar units may not claim a tax credit under this
565     section for that purchase.
566          Section 4. Section 59-10-1113 is enacted to read:
567          59-10-1113. Refundable tax credit for nonrenewable hydrogen production system.
568          (1) As used in this section:
569          (a) "Commercial enterprise" means the same as that term is defined in Section
570     59-7-626.
571          (b) "Commercial unit" means the same as that term is defined in Section 59-7-626.
572          (c) "Hydrogen production system" means the same as that term is defined in Section
573     59-7-626.
574          (d) "Office" means the Office of Energy Development created in Section 63M-4-401.
575          (2) (a) A claimant, estate, or trust may claim a refundable credit under this section if:
576          (i) the claimant, estate, or trust owns a hydrogen production system;
577          (ii) the hydrogen production system is completed and placed in service on or after
578     January 1, 2022;
579          (iii) the claimant, estate, or trust sells as a commercial enterprise, or supplies for the
580     claimant's, estate's, or trust's own use in commercial units, the hydrogen produced from the
581     hydrogen production system;
582          (iv) the claimant, estate, or trust has not claimed and will not claim a tax credit under
583     Section 59-10-1106 for electricity used to meet the requirements of this section; and
584          (v) the taxpayer obtains a written certification from the office in accordance with
585     Subsection (3).
586          (b) (i) Subject to Subsections (2)(b)(ii) and (iii), a tax credit under this section is equal
587     to the product of:
588          (A) $0.12; and
589          (B) the number of kilograms of hydrogen produced during the taxable year.
590          (ii) A claimant, estate, or trust may not receive a tax credit under this section for more
591     than 5,600 metric tons of hydrogen per taxable year.
592          (iii) A claimant, estate, or trust is eligible to claim a tax credit under this section for
593     production occurring during a period of 48 months beginning with the month in which the
594     hydrogen production system is placed in commercial service.
595          (3) (a) Before a claimant, estate, or trust may claim a tax credit under this section, the
596     claimant, estate, or trust shall obtain a written certification from the office.
597          (b) The office shall issue a claimant, estate, or trust a written certification if the office
598     determines that:
599          (i) the claimant, estate, or trust meets the requirements of this section to receive a tax
600     credit; and
601          (ii) the hydrogen production system with respect to which the claimant, estate, or trust
602     seeks to claim a tax credit:
603          (A) has been completely installed;
604          (B) is safe, reliable, efficient, and technically feasible to ensure that the hydrogen
605     production system uses the state's nonrenewable energy resources in an appropriate and
606     economic manner.
607          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
608     office may make rules for determining whether a hydrogen production system meets the
609     requirements of this Subsection (3)(b)(ii).
610          (d) A claimant, estate, or trust that obtains a written certification from the office shall
611     retain the certification for the same time period a person is required to keep books and records
612     under Section 59-1-1406.
613          (e) The office shall submit to the commission an electronic list that includes:
614          (i) the name and identifying information of each claimant, estate, or trust to which the
615     office issues a written certification; and
616          (ii) for each claimant, estate, or trust:
617          (A) the amount of the tax credit listed on the written certification; and
618          (B) the date the hydrogen production system was installed.
619          (4) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
620     commission may make rules to address the certification of a tax credit under this section.
621          (5) A tax credit under this section is in addition to any tax credits provided under the
622     laws or rules and regulations of the United States.
623          Section 5. Effective date.
624          This bill takes effect for a taxable year beginning on or after January 1, 2022.