Representative Douglas V. Sagers proposes the following substitute bill:


1     
HYDROGEN TAX CREDIT AMENDMENTS

2     
2021 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Douglas V. Sagers

5     
Senate Sponsor: ____________

6     

7     LONG TITLE
8     General Description:
9          This bill creates tax credit provisions related to hydrogen energy.
10     Highlighted Provisions:
11          This bill:
12          ▸     creates nonrefundable corporate and individual income tax credits for certain
13     hydrogen production systems;
14          ▸     provides a process for a lessee to obtain a written certification to claim a
15     commercial renewable energy system income tax credit;
16          ▸     modifies the definitions of "high cost infrastructure project" and "infrastructure" for
17     purposes of qualifying for a high cost infrastructure development tax credit; and
18          ▸     makes technical and conforming changes.
19     Money Appropriated in this Bill:
20          None
21     Other Special Clauses:
22          This bill provides retrospective operation.
23     Utah Code Sections Affected:
24     AMENDS:
25          59-7-614, as last amended by Laws of Utah 2019, Chapter 247
26          59-10-1014, as last amended by Laws of Utah 2019, Chapter 247
27          63M-4-602, as last amended by Laws of Utah 2019, Chapter 501
28     

29     Be it enacted by the Legislature of the state of Utah:
30          Section 1. Section 59-7-614 is amended to read:
31          59-7-614. Renewable energy systems tax credits -- Definitions -- Certification --
32     Rulemaking authority.
33          (1) As used in this section:
34          (a) (i) "Active solar system" means a system of equipment that is capable of:
35          (A) collecting and converting incident solar radiation into thermal, mechanical, or
36     electrical energy; and
37          (B) transferring a form of energy described in Subsection (1)(a)(i)(A) by a separate
38     apparatus to storage or to the point of use.
39          (ii) "Active solar system" includes water heating, space heating or cooling, and
40     electrical or mechanical energy generation.
41          (b) "Biomass system" means a system of apparatus and equipment for use in:
42          (i) converting material into biomass energy, as defined in Section 59-12-102; and
43          (ii) transporting the biomass energy by separate apparatus to the point of use or storage.
44          (c) "Commercial energy system" means a system that is:
45          (i) (A) an active solar system;
46          (B) a biomass system;
47          (C) a direct use geothermal system;
48          (D) a geothermal electricity system;
49          (E) a geothermal heat pump system;
50          (F) a hydroenergy system;
51          (G) a hydrogen system;
52          [(G)] (H) a passive solar system; or
53          [(H)] (I) 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     electrical, mechanical, or thermal energy for sale from a commercial energy system.
60          (e) (i) "Commercial unit" means a building or structure that an entity uses to transact
61     business.
62          (ii) Notwithstanding Subsection (1)(e)(i):
63          (A) with respect to an active solar system used for agricultural water pumping or a
64     wind system, each individual energy generating device is considered to be a commercial unit;
65     or
66          (B) if an energy system is the building or structure that an entity uses to transact
67     business, a commercial unit is the complete energy system itself.
68          (f) "Direct use geothermal system" means a system of apparatus and equipment that
69     enables the direct use of geothermal energy to meet energy needs, including heating a building,
70     an industrial process, and aquaculture.
71          (g) "Geothermal electricity" means energy that is:
72          (i) contained in heat that continuously flows outward from the earth; and
73          (ii) used as a sole source of energy to produce electricity.
74          (h) "Geothermal energy" means energy generated by heat that is contained in the earth.
75          (i) "Geothermal heat pump system" means a system of apparatus and equipment that:
76          (i) enables the use of thermal properties contained in the earth at temperatures well
77     below 100 degrees Fahrenheit; and
78          (ii) helps meet heating and cooling needs of a structure.
79          (j) "Hydroenergy system" means a system of apparatus and equipment that is capable
80     of:
81          (i) intercepting and converting kinetic water energy into electrical or mechanical
82     energy; and
83          (ii) transferring this form of energy by separate apparatus to the point of use or storage.
84          (k) "Hydrogen system" means a system of apparatus and equipment that:
85          (i) is separate or in conjunction with a renewable energy source; and
86          (ii) uses a renewable energy source to create hydrogen.
87          [(k)] (l) "Office" means the Office of Energy Development created in Section
88     63M-4-401.
89          [(l)] (m) (i) "Passive solar system" means a direct thermal system that utilizes the
90     structure of a building and [its] the structure's operable components to provide for collection,
91     storage, and distribution of heating or cooling during the appropriate times of the year by
92     utilizing the climate resources available at the site.
93          (ii) "Passive solar system" includes those portions and components of a building that
94     are expressly designed and required for the collection, storage, and distribution of solar energy.
95          [(m)] (n) "Photovoltaic system" means an active solar system that generates electricity
96     from sunlight.
97          [(n)] (o) (i) "Principal recovery portion" means the portion of a lease payment that
98     constitutes the cost a person incurs in acquiring a commercial energy system.
99          (ii) "Principal recovery portion" does not include:
100          (A) an interest charge; or
101          (B) a maintenance expense.
102          (p) "Renewable energy source" means the same as that term is defined in Section
103     54-17-601.
104          [(o)] (q) "Residential energy system" means the following used to supply energy to or
105     for a residential unit:
106          (i) an active solar system;
107          (ii) a biomass system;
108          (iii) a direct use geothermal system;
109          (iv) a geothermal heat pump system;
110          (v) a hydroenergy system;
111          (vi) a passive solar system; or
112          (vii) a wind system.
113          [(p)] (r) (i) "Residential unit" means a house, condominium, apartment, or similar
114     dwelling unit that:
115          (A) is located in the state; and
116          (B) serves as a dwelling for a person, group of persons, or a family.
117          (ii) "Residential unit" does not include property subject to a fee under:
118          (A) Section 59-2-405;
119          (B) Section 59-2-405.1;
120          (C) Section 59-2-405.2;
121          (D) Section 59-2-405.3; or
122          (E) Section 72-10-110.5.
123          [(q)] (s) "Wind system" means a system of apparatus and equipment that is capable of:
124          (i) intercepting and converting wind energy into mechanical or electrical energy; and
125          (ii) transferring these forms of energy by a separate apparatus to the point of use, sale,
126     or storage.
127          (2) A taxpayer may claim an energy system tax credit as provided in this section
128     against a tax due under this chapter for a taxable year.
129          (3) (a) Subject to the other provisions of this Subsection (3), a taxpayer may claim a
130     nonrefundable tax credit under this Subsection (3) with respect to a residential unit the taxpayer
131     owns or uses if:
132          (i) the taxpayer:
133          (A) purchases and completes a residential energy system to supply all or part of the
134     energy required for the residential unit; or
135          (B) participates in the financing of a residential energy system to supply all or part of
136     the energy required for the residential unit;
137          (ii) the residential energy system is completed and placed in service on or after January
138     1, 2007; and
139          (iii) the taxpayer obtains a written certification from the office in accordance with
140     Subsection [(7)] (8).
141          (b) (i) Subject to Subsections (3)(b)(ii) through (iv) and, as applicable, Subsection
142     (3)(c) or (d), the tax credit is equal to 25% of the reasonable costs of each residential energy
143     system installed with respect to each residential unit the taxpayer owns or uses.
144          (ii) A tax credit under this Subsection (3) may include installation costs.
145          (iii) A taxpayer may claim a tax credit under this Subsection (3) for the taxable year in
146     which the residential energy system is completed and placed in service.
147          (iv) If the amount of a tax credit under this Subsection (3) exceeds a taxpayer's tax
148     liability under this chapter for a taxable year, the taxpayer may carry forward the amount of the
149     tax credit exceeding the liability [may be carried forward] for a period that does not exceed the
150     next four taxable years.
151          (c) The total amount of tax credit a taxpayer may claim under this Subsection (3) for a
152     residential energy system, other than a photovoltaic system, may not exceed $2,000 per
153     residential unit.
154          (d) The total amount of tax credit a taxpayer may claim under this Subsection (3) for a
155     photovoltaic system may not exceed:
156          (i) for a system installed on or after January 1, 2018, but on or before December 31,
157     2020, $1,600;
158          (ii) for a system installed on or after January 1, 2021, but on or before December 31,
159     2021, $1,200;
160          (iii) for a system installed on or after January 1, 2022, but on or before December 31,
161     2022, $800;
162          (iv) for a system installed on or after January 1, 2023, but on or before December 31,
163     2023, $400; and
164          (v) for a system installed on or after January 1, 2024, $0.
165          (e) If a taxpayer sells a residential unit to another person before the taxpayer claims the
166     tax credit under this Subsection (3):
167          (i) the taxpayer may assign the tax credit to the other person; and
168          (ii) (A) if the other person files a return under this chapter, the other person may claim
169     the tax credit under this section as if the other person had met the requirements of this section
170     to claim the tax credit; or
171          (B) if the other person files a return under Chapter 10, Individual Income Tax Act, the
172     other person may claim the tax credit under Section 59-10-1014 as if the other person had met
173     the requirements of Section 59-10-1014 to claim the tax credit.
174          (4) (a) Subject to the other provisions of this Subsection (4), a taxpayer may claim a
175     refundable tax credit under this Subsection (4) with respect to a commercial energy system if:
176          (i) the commercial energy system does not use:
177          (A) wind, geothermal electricity, solar, or biomass equipment capable of producing a
178     total of 660 or more kilowatts of electricity; or
179          (B) solar equipment capable of producing 2,000 or more kilowatts of electricity;
180          (ii) the taxpayer purchases or participates in the financing of the commercial energy
181     system;
182          (iii) (A) the commercial energy system supplies all or part of the energy required by
183     commercial units owned or used by the taxpayer; or
184          (B) the taxpayer sells all or part of the energy produced by the commercial energy
185     system as a commercial enterprise;
186          (iv) the commercial energy system is completed and placed in service on or after
187     January 1, 2007; and
188          (v) the taxpayer obtains a written certification from the office in accordance with
189     Subsection [(7)] (8).
190          (b) (i) Subject to Subsections (4)(b)(ii) through [(v)] (iv), the tax credit is equal to 10%
191     of the reasonable costs of the commercial energy system.
192          (ii) A tax credit under this Subsection (4) may include installation costs.
193          (iii) A taxpayer may claim a tax credit under this Subsection (4) for the taxable year in
194     which the commercial energy system is completed and placed in service.
195          [(iv) A tax credit under this Subsection (4) may not be carried forward or carried back.]
196          [(v)] (iv) The total amount of tax credit a taxpayer may claim under this Subsection (4)
197     may not exceed $50,000 per commercial unit.
198          (c) (i) Subject to Subsections (4)(c)(ii) and (iii), a taxpayer that is a lessee of a
199     commercial energy system installed on a commercial unit may claim a tax credit under this
200     Subsection (4) if the taxpayer [confirms that the lessor irrevocably elects not to claim the tax
201     credit] obtains a written certification from the office in accordance with Subsection (8).
202          (ii) A taxpayer described in Subsection (4)(c)(i) may claim as a tax credit under this
203     Subsection (4) only the principal recovery portion of the lease payments.
204          (iii) A taxpayer described in Subsection (4)(c)(i) may claim a tax credit under this
205     Subsection (4) for a period that does not exceed seven taxable years after the [date] day on
206     which the lease begins, as stated in the lease agreement.
207          (5) (a) Subject to the other provisions of this Subsection (5), a taxpayer may claim a
208     refundable tax credit under this Subsection (5) with respect to a commercial energy system if:
209          (i) the commercial energy system uses wind, geothermal electricity, or biomass
210     equipment capable of producing a total of 660 or more kilowatts of electricity;
211          (ii) (A) the commercial energy system supplies all or part of the energy required by
212     commercial units owned or used by the taxpayer; or
213          (B) the taxpayer sells all or part of the energy produced by the commercial energy
214     system as a commercial enterprise;
215          (iii) the commercial energy system is completed and placed in service on or after
216     January 1, 2007; and
217          (iv) the taxpayer obtains a written certification from the office in accordance with
218     Subsection [(7)] (8).
219          (b) (i) Subject to [Subsections] Subsection (5)(b)(ii) [and (iii)], a tax credit under this
220     Subsection (5) is equal to the product of:
221          (A) 0.35 cents; and
222          (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
223          (ii) A tax credit under this Subsection (5) may be claimed for production occurring
224     during a period of 48 months beginning with the month in which the commercial energy
225     system is placed in commercial service.
226          [(iii) A tax credit under this Subsection (5) may not be carried forward or carried back.]
227          (c) A taxpayer that is a lessee of a commercial energy system installed on a commercial
228     unit may claim a tax credit under this Subsection (5) if the taxpayer [confirms that the lessor
229     irrevocably elects not to claim the tax credit] obtains a written certification from the office in
230     accordance with Subsection (8).
231          (6) (a) Subject to the other provisions of this Subsection (6), a taxpayer may claim a
232     refundable tax credit as provided in this Subsection (6) if:
233          (i) the taxpayer owns a commercial energy system that uses solar equipment capable of
234     producing a total of 660 or more kilowatts of electricity;
235          (ii) (A) the commercial energy system supplies all or part of the energy required by
236     commercial units owned or used by the taxpayer; or
237          (B) the taxpayer sells all or part of the energy produced by the commercial energy
238     system as a commercial enterprise;
239          (iii) the taxpayer does not claim a tax credit under Subsection (4);
240          (iv) the commercial energy system is completed and placed in service on or after
241     January 1, 2015; and
242          (v) the taxpayer obtains a written certification from the office in accordance with
243     Subsection [(7)] (8).
244          (b) (i) Subject to [Subsections] Subsection (6)(b)(ii) [and (iii)], a tax credit under this
245     Subsection (6) is equal to the product of:
246          (A) 0.35 cents; and
247          (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
248          (ii) A tax credit under this Subsection (6) may be claimed for production occurring
249     during a period of 48 months beginning with the month in which the commercial energy
250     system is placed in commercial service.
251          [(iii) A tax credit under this Subsection (6) may not be carried forward or carried back.]
252          (c) A taxpayer that is a lessee of a commercial energy system installed on a commercial
253     unit may claim a tax credit under this Subsection (6) if the taxpayer [confirms that the lessor
254     irrevocably elects not to claim the tax credit.] obtains a written certification from the office in
255     accordance with Subsection (8).
256          (7) (a) A taxpayer may claim a nonrefundable tax credit as provided in this Subsection
257     (7) if:
258          (i) the taxpayer owns a commercial energy system that is a hydrogen system having a
259     rated capacity of two megawatts or greater;
260          (ii) (A) the commercial energy system supplies all or part of the energy required by
261     commercial units owned or used by the taxpayer; or
262          (B) the taxpayer sells all or part of the energy produced by the commercial energy
263     system as a commercial enterprise;
264          (iii) the taxpayer does not claim a credit under Subsection (4);
265          (iv) the commercial energy system is completed and placed in service on or after
266     January 1, 2015; and
267          (v) the taxpayer obtains a written certification from the office in accordance with
268     Subsection (8).
269          (b) (i) Subject to Subsections (7)(b)(ii) and (iii), a tax credit under this Subsection (7)
270     is equal to the product of:
271          (A) 12 cents; and
272          (B) the kilograms of hydrogen produced and stored, used, or sold during the taxable
273     year.
274          (ii) A taxpayer may not receive a tax credit under this Subsection (7) for more than
275     5,600 metric tons of hydrogen per taxable year.
276          (iii) A taxpayer may claim a tax credit for production occurring during a period of 48
277     months beginning with the month in which the commercial energy system is placed in
278     commercial service.
279          (c) If the amount of a tax credit under this Subsection (7) exceeds a taxpayer's tax
280     liability under this chapter for a taxable year, the taxpayer may carry forward the amount of the
281     tax credit exceeding the liability for a period that does not exceed the next four taxable years.
282          (d) (i) Subject to Subsections (7)(d)(ii) and (iii), a taxpayer that is a lessee of a
283     commercial energy system installed on a commercial unit may claim a tax credit under this
284     Subsection (7) if the taxpayer obtains a written certification from the office in accordance with
285     Subsection (8).
286          (ii) A taxpayer described in Subsection (7)(d)(i) may claim as a tax credit under this
287     Subsection (7) only the principal recovery portion of the lease payments.
288          (iii) A taxpayer described in Subsection (7)(d)(i) may claim a tax credit under this
289     Subsection (7) for a period that does not exceed seven taxable years after the day on which the
290     lease begins, as stated in the lease agreement.
291          [(7)] (8) (a) Before a taxpayer, including a lessee under Subsection (4), (5), (6), or (7),
292     may claim a tax credit under this section, the taxpayer shall obtain a written certification from
293     the office.
294          (b) The office shall issue a taxpayer that is not a lessee a written certification if the
295     office determines that:
296          (i) the taxpayer meets the requirements of this section to receive a tax credit; and
297          (ii) the residential energy system or commercial energy system with respect to which
298     the taxpayer seeks to claim a tax credit:
299          (A) has been completely installed;
300          (B) is a viable system for saving or producing energy from renewable resources; and
301          (C) is safe, reliable, efficient, and technically feasible to ensure that the residential
302     energy system or commercial energy system uses the state's renewable and nonrenewable
303     energy resources in an appropriate and economic manner.
304          (c) The office shall issue a taxpayer that is a lessee a written certification if the office
305     receives:
306          (i) a copy of the lessor's written certification or other proof, in a form established by the
307     office, that the lessor qualified for a tax credit under Subsection (4), (5), (6), or (7); and
308          (ii) proof that the lessor irrevocably elects not to claim the tax credit for which the
309     lessor qualified.
310          [(c)] (d) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
311     Act, the office may make rules:
312          (i) for determining whether a residential energy system or commercial energy system
313     meets the requirements of Subsection [(7)] (8)(b)(ii); and
314          (ii) for purposes of a tax credit under Subsection (3) or (4), establishing the reasonable
315     costs of a residential energy system or a commercial energy system, as an amount per unit of
316     energy production.
317          [(d)] (e) A taxpayer, including a lessee, that obtains a written certification from the
318     office shall retain the written certification for the same time period a person is required to keep
319     books and records under Section 59-1-1406.
320          [(e)] (f) The office shall submit to the commission an electronic list that includes:
321          (i) the name and identifying information of each taxpayer or lessee to which the office
322     issues a written certification; and
323          (ii) for each taxpayer or lessee:
324          (A) the amount of the tax credit listed on the written certification; and
325          (B) the date the renewable energy system was installed.
326          [(8)] (9) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
327     Act, the commission may make rules to address the certification of a tax credit under this
328     section.
329          [(9)] (10) A tax credit under this section is in addition to any tax credits provided under
330     the laws or rules and regulations of the United States.
331          Section 2. Section 59-10-1014 is amended to read:
332          59-10-1014. Nonrefundable renewable energy systems tax credits -- Definitions --
333     Certification -- Rulemaking authority.
334          (1) As used in this section:
335          (a) (i) "Active solar system" means a system of equipment that is capable of:
336          (A) collecting and converting incident solar radiation into thermal, mechanical, or
337     electrical energy; and
338          (B) transferring a form of energy described in Subsection (1)(a)(i)(A) by a separate
339     apparatus to storage or to the point of use.
340          (ii) "Active solar system" includes water heating, space heating or cooling, and
341     electrical or mechanical energy generation.
342          (b) "Biomass system" means a system of apparatus and equipment for use in:
343          (i) converting material into biomass energy, as defined in Section 59-12-102; and
344          (ii) transporting the biomass energy by separate apparatus to the point of use or storage.
345          (c) "Commercial energy system" means the same as that term is defined in Section
346     59-7-614.
347          (d) "Commercial enterprise" means the same as that term is defined in Section
348     59-7-614.
349          (e) "Commercial unit" means the same as that term is defined in Section 59-7-614.
350          [(c)] (f) "Direct use geothermal system" means a system of apparatus and equipment
351     that enables the direct use of geothermal energy to meet energy needs, including heating a
352     building, an industrial process, and aquaculture.
353          [(d)] (g) "Geothermal electricity" means energy that is:
354          (i) contained in heat that continuously flows outward from the earth; and
355          (ii) used as a sole source of energy to produce electricity.
356          [(e)] (h) "Geothermal energy" means energy generated by heat that is contained in the
357     earth.
358          [(f)] (i) "Geothermal heat pump system" means a system of apparatus and equipment
359     that:
360          (i) enables the use of thermal properties contained in the earth at temperatures well
361     below 100 degrees Fahrenheit; and
362          (ii) helps meet heating and cooling needs of a structure.
363          [(g)] (j) "Hydroenergy system" means a system of apparatus and equipment that is
364     capable of:
365          (i) intercepting and converting kinetic water energy into electrical or mechanical
366     energy; and
367          (ii) transferring this form of energy by separate apparatus to the point of use or storage.
368          (k) "Hydrogen system" means the same as that term is defined in Section 59-7-614.
369          [(h)] (l) "Office" means the Office of Energy Development created in Section
370     63M-4-401.
371          [(i)] (m) (i) "Passive solar system" means a direct thermal system that utilizes the
372     structure of a building and [its] the structure's operable components to provide for collection,
373     storage, and distribution of heating or cooling during the appropriate times of the year by
374     utilizing the climate resources available at the site.
375          (ii) "Passive solar system" includes those portions and components of a building that
376     are expressly designed and required for the collection, storage, and distribution of solar energy.
377          [(j)] (n) "Photovoltaic system" means an active solar system that generates electricity
378     from sunlight.
379          [(k)] (o) (i) "Principal recovery portion" means the portion of a lease payment that
380     constitutes the cost a person incurs in acquiring a residential energy system.
381          (ii) "Principal recovery portion" does not include:
382          (A) an interest charge; or
383          (B) a maintenance expense.
384          [(l)] (p) "Residential energy system" means the following used to supply energy to or
385     for a residential unit:
386          (i) an active solar system;
387          (ii) a biomass system;
388          (iii) a direct use geothermal system;
389          (iv) a geothermal heat pump system;
390          (v) a hydroenergy system;
391          (vi) a passive solar system; or
392          (vii) a wind system.
393          [(m)] (q) (i) "Residential unit" means a house, condominium, apartment, or similar
394     dwelling unit that:
395          (A) is located in the state; and
396          (B) serves as a dwelling for a person, group of persons, or a family.
397          (ii) "Residential unit" does not include property subject to a fee under:
398          (A) Section 59-2-405;
399          (B) Section 59-2-405.1;
400          (C) Section 59-2-405.2;
401          (D) Section 59-2-405.3; or
402          (E) Section 72-10-110.5.
403          [(n)] (r) "Wind system" means a system of apparatus and equipment that is capable of:
404          (i) intercepting and converting wind energy into mechanical or electrical energy; and
405          (ii) transferring these forms of energy by a separate apparatus to the point of use or
406     storage.
407          (2) A claimant, estate, or trust may claim an energy system tax credit as provided in
408     this section against a tax due under this chapter for a taxable year.
409          (3) [For a taxable year beginning on or after January 1, 2007, a] (a) A claimant, estate,
410     or trust may claim a nonrefundable tax credit under this [section] Subsection (3) with respect to
411     a residential unit the claimant, estate, or trust owns or uses if:
412          [(a)] (i) the claimant, estate, or trust:
413          [(i)] (A) purchases and completes a residential energy system to supply all or part of
414     the energy required for the residential unit; or
415          [(ii)] (B) participates in the financing of a residential energy system to supply all or
416     part of the energy required for the residential unit;
417          [(b)] (ii) the residential energy system is installed on or after January 1, 2007; and
418          [(c)] (iii) the claimant, estate, or trust obtains a written certification from the office in
419     accordance with Subsection (5).
420          [(4) (a)] (b) For a residential energy system, other than a photovoltaic system, the tax
421     credit described in this section is equal to the lesser of:
422          (i) 25% of the reasonable costs, including installation costs, of each residential energy
423     system installed with respect to each residential unit the claimant, estate, or trust owns or uses;
424     and
425          (ii) $2,000.
426          [(b) Subject to Subsection (5)(d), for] (c) For a residential energy system that is a
427     photovoltaic system, the tax credit described in this section is equal to the lesser of:
428          (i) 25% of the reasonable costs, including installation costs, of each system installed
429     with respect to each residential unit the claimant, estate, or trust owns or uses; or
430          (ii) (A) for a system installed on or after January 1, 2007, but on or before December
431     31, 2017, $2,000;
432          (B) for a system installed on or after January 1, 2018, but on or before December 31,
433     2020, $1,600;
434          (C) for a system installed on or after January 1, 2021, but on or before December 31,
435     2021, $1,200;
436          (D) for a system installed on or after January 1, 2022, but on or before December 31,
437     2022, $800;
438          (E) for a system installed on or after January 1, 2023, but on or before December 31,
439     2023, $400; and
440          (F) for a system installed on or after January 1, 2024, $0.
441          [(c)] (d) (i) The office shall determine the amount of the tax credit that a claimant,
442     estate, or trust may claim and list that amount on the written certification that the office issues
443     under Subsection (5).
444          (ii) The claimant, estate, or trust may claim the tax credit in the amount listed on the
445     written certification that the office issues under Subsection (5).
446          [(d)] (e) A claimant, estate, or trust may claim a tax credit under this Subsection (3) for
447     the taxable year in which the residential energy system is installed.
448          [(e)] (f) If the amount of a tax credit listed on the written certification exceeds a
449     claimant's, estate's, or trust's tax liability under this chapter for a taxable year, the claimant,
450     estate, or trust may carry forward the amount of the tax credit exceeding the liability for a
451     period that does not exceed the next four taxable years.
452          [(f)] (g) A claimant, estate, or trust may claim a tax credit with respect to additional
453     residential energy systems or parts of residential energy systems for a subsequent taxable year
454     if the total amount of tax credit the claimant, estate, or trust claims does not exceed $2,000 per
455     residential unit.
456          [(g)] (h) (i) Subject to Subsections [(4)(g)] (3)(h)(ii) and (iii), a claimant, estate, or trust
457     that leases a residential energy system installed on a residential unit may claim a tax credit
458     under this Subsection (3) if the claimant, estate, or trust [confirms that the lessor irrevocably
459     elects not to claim the tax credit] obtains a written certification from the office in accordance
460     with Subsection (5).
461          (ii) A claimant, estate, or trust described in Subsection [(4)(g)] (3)(h)(i) [that leases a
462     residential energy system] may claim as a tax credit under this Subsection (3) only the principal
463     recovery portion of the lease payments.
464          (iii) A claimant, estate, or trust described in Subsection [(4)(g)] (3)(h)(i) [that leases a
465     residential energy system] may claim a tax credit under this Subsection (3) for a period that
466     does not exceed seven taxable years after the [date] day on which the lease begins, as stated in
467     the lease agreement.
468          [(h)] (i) If a claimant, estate, or trust sells a residential unit to another person before the
469     claimant, estate, or trust claims the tax credit under this Subsection (3):
470          (i) the claimant, estate, or trust may assign the tax credit to the other person; and
471          (ii) (A) if the other person files a return under Chapter 7, Corporate Franchise and
472     Income Taxes, the other person may claim the tax credit as if the other person had met the
473     requirements of Section 59-7-614 to claim the tax credit; or
474          (B) if the other person files a return under this chapter, the other person may claim the
475     tax credit under this section as if the other person had met the requirements of this section to
476     claim the tax credit.
477          (4) (a) A claimant, estate, or trust may claim a nonrefundable tax credit as provided in
478     this Subsection (4) if:
479          (i) the claimant, estate, or trust owns a commercial energy system that is a hydrogen
480     system having a rated capacity of two megawatts or greater;
481          (ii) (A) the commercial energy system supplies all or part of the energy required by
482     commercial units owned or used by the claimant, estate, or trust; or
483          (B) the claimant, estate, or trust sells all or part of the energy produced by the
484     commercial energy system as a commercial enterprise;
485          (iii) the claimant, estate, or trust does not claim a credit under Subsection
486     59-10-1106(3);
487          (iv) the commercial energy system is completed and placed in service on or after
488     January 1, 2015; and
489          (v) the claimant, estate, or trust obtains a written certification from the office in
490     accordance with Subsection (5).
491          (b) (i) Subject to Subsections (4)(b)(ii) and (iii), a tax credit under this Subsection (4)
492     is equal to the product of:
493          (A) 12 cents; and
494          (B) the kilograms of hydrogen produced and stored, used, or sold during the taxable
495     year.
496          (ii) A claimant, estate, or trust may not receive a tax credit under this Subsection (4) for
497     more than 5,600 metric tons of hydrogen per taxable year.
498          (iii) A claimant, estate, or trust may claim a tax credit for production occurring during
499     a period of 48 months beginning with the month in which the commercial energy system is
500     placed in commercial service.
501          (c) If the amount of a tax credit under this Subsection (4) exceeds a claimant's, estate's,
502     or trust's tax liability under this chapter for a taxable year, the claimant, estate, or trust may
503     carry forward the amount of the tax credit exceeding the liability for a period that does not
504     exceed the next four taxable years.
505          (d) (i) Subject to Subsections (4)(d)(ii) and (iii), a claimant, estate, or trust that is a
506     lessee of a commercial energy system installed on a commercial unit may claim a tax credit
507     under this Subsection (4) if the claimant, estate, or trust obtains a written certification from the
508     office in accordance with Subsection (5).
509          (ii) A claimant, estate, or trust described in Subsection (4)(d)(i) may claim as a tax
510     credit under this Subsection (4) only the principal recovery portion of the lease payments.
511          (iii) A claimant, estate, or trust described in Subsection (4)(d)(i) may claim a tax credit
512     under this Subsection (4) for a period that does not exceed seven taxable years after the day on
513     which the lease begins, as stated in the lease agreement.
514          (5) (a) Before a claimant, estate, or trust, including a lessee, may claim a tax credit
515     under this section, the claimant, estate, or trust shall obtain a written certification from the
516     office.
517          (b) The office shall issue a claimant, estate, or trust that is not a lessee a written
518     certification if the office determines that:
519          (i) the claimant, estate, or trust meets the requirements of this section to receive a tax
520     credit; and
521          (ii) the office determines that the residential energy system with respect to which the
522     claimant, estate, or trust seeks to claim a tax credit:
523          (A) has been completely installed;
524          (B) is a viable system for saving or producing energy from renewable resources; and
525          (C) is safe, reliable, efficient, and technically feasible to ensure that the residential
526     energy system uses the state's renewable and nonrenewable energy resources in an appropriate
527     and economic manner.
528          (c) The office shall issue a claimant, estate, or trust that is a lessee a written
529     certification if the office receives:
530          (i) a copy of the lessor's written certification or other proof, in a form established by the
531     office, that the lessor qualified for a tax credit under this section; and
532          (ii) proof that the lessor irrevocably elects not to claim the tax credit for which the
533     lessor qualified.
534          [(c)] (d) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
535     Act, the office may make rules:
536          (i) for determining whether a residential energy system meets the requirements of
537     Subsection (5)(b)(ii); and
538          (ii) for purposes of determining the amount of a tax credit that a claimant, estate, or
539     trust may receive under Subsection [(4)] (3), establishing the reasonable costs of a residential
540     energy system, as an amount per unit of energy production.
541          [(d)] (e) A claimant, estate, or trust, including a lessee, that obtains a written
542     certification from the office shall retain written the certification for the same time period a
543     person is required to keep books and records under Section 59-1-1406.
544          [(e)] (f) The office shall submit to the commission an electronic list that includes:
545          (i) the name and identifying information of each claimant, estate, [or] trust, or lessee to
546     which the office issues a written certification; and
547          (ii) for each claimant, estate, [or] trust, or lessee:
548          (A) the amount of the tax credit listed on the written certification; and
549          (B) the date the renewable energy system was installed.
550          (6) A tax credit under this section is in addition to any tax credits provided under the
551     laws or rules and regulations of the United States.
552          (7) A purchaser of one or more solar units that claims a tax credit under Section
553     59-10-1024 for the purchase of the one or more solar units may not claim a tax credit under this
554     section for that purchase.
555          Section 3. Section 63M-4-602 is amended to read:
556          63M-4-602. Definitions.
557          As used in this part:
558          (1) "Applicant" means a person that conducts business in the state and that applies for a
559     tax credit under this part.
560          (2) "Fuel standard compliance project" means a project designed to retrofit a fuel
561     refinery in order to make the refinery capable of producing fuel that complies with the United
562     States Environmental Protection Agency's Tier 3 gasoline sulfur standard described in 40
563     C.F.R. Sec. 79.54.
564          (3) "High cost infrastructure project" means a project:
565          (a) (i) that expands or creates new industrial, mining, manufacturing, or agriculture
566     activity in the state, not including a retail business;
567          (ii) that involves new investment of at least $50,000,000 in an existing industrial,
568     mining, manufacturing, or agriculture entity, by the entity; or
569          (iii) for the construction of a plant, a pipeline, or other facility, including a fueling
570     station, for the storage, production, or distribution of hydrogen fuel produced using renewable
571     energy, as defined in Section 54-17-601, and used for transportation, electricity generation, or
572     industrial use;
573          (b) that requires or is directly facilitated by infrastructure construction; and
574          (c) for which the cost of infrastructure construction to the entity creating the project is
575     greater than:
576          (i) 10% of the total cost of the project; or
577          (ii) $10,000,000.
578          (4) "Infrastructure" means:
579          (a) an energy delivery project as defined in Section 63H-2-102;
580          (b) a railroad as defined in Section 54-2-1;
581          (c) a fuel standard compliance project;
582          (d) a road improvement project;
583          (e) a water self-supply project;
584          (f) a water removal system project;
585          (g) a solution-mined subsurface salt cavern; [or]
586          (h) a project that is designed to:
587          (i) increase the capacity for water delivery to a water user in the state; or
588          (ii) increase the capability of an existing water delivery system or related facility to
589     deliver water to a water user in the state[.]; or
590          (i) a hydrogen fuel production or distribution project.
591          (5) (a) "Infrastructure cost-burdened entity" means an applicant that enters into an
592     agreement with the office that qualifies the applicant to receive a tax credit as provided in this
593     part.
594          (b) "Infrastructure cost-burdened entity" includes a pass-through entity taxpayer, as
595     defined in Section 59-10-1402, of a person described in Subsection (5)(a).
596          (6) "Infrastructure-related revenue" means an amount of tax revenue, for an entity
597     creating a high cost infrastructure project, in a taxable year, that is directly attributable to a high
598     cost infrastructure project, under:
599          (a) Title 59, Chapter 7, Corporate Franchise and Income Taxes;
600          (b) Title 59, Chapter 10, Individual Income Tax Act; and
601          (c) Title 59, Chapter 12, Sales and Use Tax Act.
602          (7) "Office" means the Office of Energy Development created in Section 63M-4-401.
603          (8) "Tax credit" means a tax credit under Section 59-7-619 or 59-10-1034.
604          (9) "Tax credit certificate" means a certificate issued by the office to an infrastructure
605     cost-burdened entity that:
606          (a) lists the name of the infrastructure cost-burdened entity;
607          (b) lists the infrastructure cost-burdened entity's taxpayer identification number;
608          (c) lists, for a taxable year, the amount of the tax credit authorized for the infrastructure
609     cost-burdened entity under this part; and
610          (d) includes other information as determined by the office.
611          Section 4. Retrospective operation.
612          This bill has retrospective operation for a taxable year beginning on or after January 1,
613     2021.