Representative Melissa G. Ballard proposes the following substitute bill:


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     

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

27     Be it enacted by the Legislature of the state of Utah:
28          Section 1. Section 59-7-614 is amended to read:
29          59-7-614. Renewable energy systems tax credits -- Definitions -- Certification --
30     Rulemaking authority.
31          (1) As used in this section:
32          (a) (i) "Active solar system" means a system of equipment that is capable of:
33          (A) collecting and converting incident solar radiation into thermal, mechanical, or
34     electrical energy; and
35          (B) transferring a form of energy described in Subsection (1)(a)(i)(A) by a separate
36     apparatus to storage or to the point of use.
37          (ii) "Active solar system" includes water heating, space heating or cooling, and
38     electrical or mechanical energy generation.
39          (b) "Biomass system" means a system of apparatus and equipment for use in:
40          (i) converting material into biomass energy, as defined in Section 59-12-102; and
41          (ii) transporting the biomass energy by separate apparatus to the point of use or storage.
42          (c) "Commercial energy system" means a system that is:
43          (i) (A) an active solar system;
44          (B) a biomass system;
45          (C) a direct use geothermal system;
46          (D) a geothermal electricity system;
47          (E) a geothermal heat pump system;
48          (F) a hydroenergy system;
49          (G) a passive solar system; or
50          (H) a wind system;
51          (ii) located in the state; and
52          (iii) used:
53          (A) to supply energy to a commercial unit; or
54          (B) as a commercial enterprise.
55          (d) "Commercial enterprise" means an entity, the purpose of which is to produce:
56          (i) electrical, mechanical, or thermal energy for sale from a commercial energy system;
57     or
58          (ii) hydrogen for sale from a hydrogen production system.
59          (e) (i) "Commercial unit" means a building or structure that an entity uses to transact
60     business.
61          (ii) Notwithstanding Subsection (1)(e)(i):
62          (A) with respect to an active solar system used for agricultural water pumping or a
63     wind system, each individual energy generating device is considered to be a commercial unit;
64     or
65          (B) if an energy system is the building or structure that an entity uses to transact
66     business, a commercial unit is the complete energy system itself.
67          (f) "Direct use geothermal system" means a system of apparatus and equipment that
68     enables the direct use of geothermal energy to meet energy needs, including heating a building,
69     an industrial process, and aquaculture.
70          (g) "Geothermal electricity" means energy that is:
71          (i) contained in heat that continuously flows outward from the earth; and
72          (ii) used as a sole source of energy to produce electricity.
73          (h) "Geothermal energy" means energy generated by heat that is contained in the earth.
74          (i) "Geothermal heat pump system" means a system of apparatus and equipment that:
75          (i) enables the use of thermal properties contained in the earth at temperatures well
76     below 100 degrees Fahrenheit; and
77          (ii) helps meet heating and cooling needs of a structure.
78          (j) "Hydroenergy system" means a system of apparatus and equipment that is capable
79     of:
80          (i) intercepting and converting kinetic water energy into electrical or mechanical
81     energy; and
82          (ii) transferring this form of energy by separate apparatus to the point of use or storage.
83          (k) "Hydrogen production system" means a system of apparatus and equipment, located
84     in this state, that uses:
85          (i) electricity from a renewable energy source to create hydrogen gas from water,
86     regardless of whether the renewable energy source is at a separate facility or the same facility
87     as the system of apparatus and equipment; or
88          (ii) uses renewable natural gas to produce hydrogen gas.
89          [(k)] (l) "Office" means the Office of Energy Development created in Section
90     63M-4-401.
91          [(l)] (m) (i) "Passive solar system" means a direct thermal system that utilizes the
92     structure of a building and [its] the structure's operable components to provide for collection,
93     storage, and distribution of heating or cooling during the appropriate times of the year by
94     utilizing the climate resources available at the site.
95          (ii) "Passive solar system" includes those portions and components of a building that
96     are expressly designed and required for the collection, storage, and distribution of solar energy.
97          [(m)] (n) "Photovoltaic system" means an active solar system that generates electricity
98     from sunlight.
99          [(n)] (o) (i) "Principal recovery portion" means the portion of a lease payment that
100     constitutes the cost a person incurs in acquiring a commercial energy system.
101          (ii) "Principal recovery portion" does not include:
102          (A) an interest charge; or
103          (B) a maintenance expense.
104          (p) "Renewable energy source" means the same as that term is defined in Section
105     54-17-601.
106          [(o)] (q) "Residential energy system" means the following used to supply energy to or
107     for a residential unit:
108          (i) an active solar system;
109          (ii) a biomass system;
110          (iii) a direct use geothermal system;
111          (iv) a geothermal heat pump system;
112          (v) a hydroenergy system;
113          (vi) a passive solar system; or
114          (vii) a wind system.
115          [(p)] (r) (i) "Residential unit" means a house, condominium, apartment, or similar
116     dwelling unit that:
117          (A) is located in the state; and
118          (B) serves as a dwelling for a person, group of persons, or a family.
119          (ii) "Residential unit" does not include property subject to a fee under:
120          (A) Section 59-2-405;
121          (B) Section 59-2-405.1;
122          (C) Section 59-2-405.2;
123          (D) Section 59-2-405.3; or
124          (E) Section 72-10-110.5.
125          [(q)] (s) "Wind system" means a system of apparatus and equipment that is capable of:
126          (i) intercepting and converting wind energy into mechanical or electrical energy; and
127          (ii) transferring these forms of energy by a separate apparatus to the point of use, sale,
128     or storage.
129          (2) A taxpayer may claim an energy system tax credit as provided in this section
130     against a tax due under this chapter for a taxable year.
131          (3) (a) Subject to the other provisions of this Subsection (3), a taxpayer may claim a
132     nonrefundable tax credit under this Subsection (3) with respect to a residential unit the taxpayer
133     owns or uses if:
134          (i) the taxpayer:
135          (A) purchases and completes a residential energy system to supply all or part of the
136     energy required for the residential unit; or
137          (B) participates in the financing of a residential energy system to supply all or part of
138     the energy required for the residential unit; and
139          [(ii) the residential energy system is completed and placed in service on or after
140     January 1, 2007; and]
141          [(iii)] (ii) the taxpayer obtains a written certification from the office in accordance with
142     Subsection [(7)] (8).
143          (b) (i) Subject to Subsections (3)(b)(ii) through (iv) and, as applicable, Subsection
144     (3)(c) or (d), the tax credit is equal to 25% of the reasonable costs of each residential energy
145     system installed with respect to each residential unit the taxpayer owns or uses.
146          (ii) A tax credit under this Subsection (3) may include installation costs.
147          (iii) A taxpayer may claim a tax credit under this Subsection (3) for the taxable year in
148     which the residential energy system is completed and placed in service.
149          (iv) If the amount of a tax credit under this Subsection (3) exceeds a taxpayer's tax
150     liability under this chapter for a taxable year, the taxpayer may carry forward the amount of the
151     tax credit exceeding the liability [may be carried forward] for a period that does not exceed the
152     next four taxable years.
153          (c) The total amount of tax credit a taxpayer may claim under this Subsection (3) for a
154     residential energy system, other than a photovoltaic system, may not exceed $2,000 per
155     residential unit.
156          (d) The total amount of tax credit a taxpayer may claim under this Subsection (3) for a
157     photovoltaic system may not exceed:
158          (i) for a system installed on or after January 1, 2018, but on or before December 31,
159     2020, $1,600;
160          (ii) for a system installed on or after January 1, 2021, but on or before December 31,
161     2021, $1,200;
162          (iii) for a system installed on or after January 1, 2022, but on or before December 31,
163     2022, $800;
164          (iv) for a system installed on or after January 1, 2023, but on or before December 31,
165     2023, $400; and
166          (v) for a system installed on or after January 1, 2024, $0.
167          (e) If a taxpayer sells a residential unit to another person before the taxpayer claims the
168     tax credit under this Subsection (3):
169          (i) the taxpayer may assign the tax credit to the other person; and
170          (ii) (A) if the other person files a return under this chapter, the other person may claim
171     the tax credit under this section as if the other person had met the requirements of this section
172     to claim the tax credit; or
173          (B) if the other person files a return under Chapter 10, Individual Income Tax Act, the
174     other person may claim the tax credit under Section 59-10-1014 as if the other person had met
175     the requirements of Section 59-10-1014 to claim the tax credit.
176          (4) (a) Subject to the other provisions of this Subsection (4), a taxpayer may claim a
177     refundable tax credit under this Subsection (4) with respect to a commercial energy system if:
178          (i) the commercial energy system does not use:
179          (A) wind, geothermal electricity, solar, or biomass equipment capable of producing a
180     total of 660 or more kilowatts of electricity; or
181          (B) solar equipment capable of producing 2,000 or more kilowatts of electricity;
182          (ii) the taxpayer purchases or participates in the financing of the commercial energy
183     system;
184          (iii) (A) the commercial energy system supplies all or part of the energy required by
185     commercial units owned or used by the taxpayer; or
186          (B) the taxpayer sells all or part of the energy produced by the commercial energy
187     system as a commercial enterprise;
188          [(iv) the commercial energy system is completed and placed in service on or after
189     January 1, 2007; and]
190          (iv) the taxpayer has not claimed and will not claim a tax credit under Subsection (7)
191     for hydrogen production using electricity for which the taxpayer claims a tax credit under this
192     Subsection (4); and
193          (v) the taxpayer obtains a written certification from the office in accordance with
194     Subsection [(7)] (8).
195          (b) (i) Subject to Subsections (4)(b)(ii) through [(v)] (iv), the tax credit is equal to 10%
196     of the reasonable costs of the commercial energy system.
197          (ii) A tax credit under this Subsection (4) may include installation costs.
198          (iii) A taxpayer [may claim] is eligible to claim a tax credit under this Subsection (4)
199     for the taxable year in which the commercial energy system is completed and placed in service.
200          [(iv) A tax credit under this Subsection (4) may not be carried forward or carried back.]
201          [(v)] (iv) The total amount of tax credit a taxpayer may claim under this Subsection (4)
202     may not exceed $50,000 per commercial unit.
203          (c) (i) Subject to Subsections (4)(c)(ii) and (iii), a taxpayer that is a lessee of a
204     commercial energy system installed on a commercial unit may claim a tax credit under this
205     Subsection (4) if the taxpayer confirms that the lessor irrevocably elects not to claim the tax
206     credit.
207          (ii) A taxpayer described in Subsection (4)(c)(i) may claim as a tax credit under this
208     Subsection (4) only the principal recovery portion of the lease payments.
209          (iii) A taxpayer described in Subsection (4)(c)(i) may claim a tax credit under this
210     Subsection (4) for a period that does not exceed seven taxable years after the [date] day on
211     which the lease begins, as stated in the lease agreement.
212          (5) (a) Subject to the other provisions of this Subsection (5), a taxpayer may claim a
213     refundable tax credit under this Subsection (5) with respect to a commercial energy system if:
214          (i) the commercial energy system uses wind, geothermal electricity, or biomass
215     equipment capable of producing a total of 660 or more kilowatts of electricity;
216          (ii) (A) the commercial energy system supplies all or part of the energy required by
217     commercial units owned or used by the taxpayer; or
218          (B) the taxpayer sells all or part of the energy produced by the commercial energy
219     system as a commercial enterprise;
220          [(iii) the commercial energy system is completed and placed in service on or after
221     January 1, 2007; and]
222          (iii) the taxpayer has not claimed and will not claim a tax credit under Subsection (7)
223     for hydrogen production using electricity for which the taxpayer claims a tax credit under this
224     Subsection (5); and
225          (iv) the taxpayer obtains a written certification from the office in accordance with
226     Subsection [(7)] (8).
227          (b) (i) Subject to [Subsections] Subsection (5)(b)(ii) [and (iii)], a tax credit under this
228     Subsection (5) is equal to the product of:
229          (A) 0.35 cents; and
230          (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
231          (ii) A taxpayer is eligible to claim a tax credit under this Subsection (5) [may be
232     claimed] for production occurring during a period of 48 months beginning with the month in
233     which the commercial energy system is placed in commercial service.
234          [(iii) A tax credit under this Subsection (5) may not be carried forward or carried back.]
235          (c) A taxpayer that is a lessee of a commercial energy system installed on a commercial
236     unit may claim a tax credit under this Subsection (5) if the taxpayer confirms that the lessor
237     irrevocably elects not to claim the tax credit.
238          (6) (a) Subject to the other provisions of this Subsection (6), a taxpayer may claim a
239     refundable tax credit as provided in this Subsection (6) if:
240          (i) the taxpayer owns a commercial energy system that uses solar equipment capable of
241     producing a total of 660 or more kilowatts of electricity;
242          (ii) (A) the commercial energy system supplies all or part of the energy required by
243     commercial units owned or used by the taxpayer; or
244          (B) the taxpayer sells all or part of the energy produced by the commercial energy
245     system as a commercial enterprise;
246          (iii) the taxpayer does not claim a tax credit under Subsection (4) and has not claimed
247     and will not claim a tax credit under Subsection (7) for hydrogen production using electricity
248     for which a taxpayer claims a tax credit under this Subsection (6); and
249          [(iv) the commercial energy system is completed and placed in service on or after
250     January 1, 2015; and]
251          [(v)] (iv) the taxpayer obtains a written certification from the office in accordance with
252     Subsection [(7)] (8).
253          (b) (i) Subject to [Subsections] Subsection (6)(b)(ii) [and (iii)], a tax credit under this
254     Subsection (6) is equal to the product of:
255          (A) 0.35 cents; and
256          (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
257          (ii) A taxpayer is eligible to claim a tax credit under this Subsection (6) [may be
258     claimed for] production occurring during a period of 48 months beginning with the month in
259     which the commercial energy system is placed in commercial service.
260          [(iii) A tax credit under this Subsection (6) may not be carried forward or carried back.]
261          (c) A taxpayer that is a lessee of a commercial energy system installed on a commercial
262     unit may claim a tax credit under this Subsection (6) if the taxpayer confirms that the lessor
263     irrevocably elects not to claim the tax credit.
264          (7) (a) A taxpayer may claim a refundable tax credit as provided in this Subsection (7)
265     if:
266          (i) the taxpayer owns a hydrogen production system;
267          (ii) the hydrogen production system is completed and placed in service on or after
268     January 1, 2022;
269          (iii) the taxpayer sells as a commercial enterprise, or supplies for the taxpayer's own
270     use in commercial units, the hydrogen produced from the hydrogen production system;
271          (iv) the taxpayer has not claimed and will not claim a tax credit under Subsection (4),
272     (5), or (6) or Section 59-7-626 for electricity or hydrogen used to meet the requirements of this
273     Subsection (7); and
274          (v) the taxpayer obtains a written certification from the office in accordance with
275     Subsection (8).
276          (b) (i) Subject to Subsections (7)(b)(ii) and (iii), a tax credit under this Subsection (7)
277     is equal to the product of:
278          (A) $0.12; and
279          (B) the number of kilograms of hydrogen produced during the taxable year.
280          (ii) A taxpayer may not receive a tax credit under this Subsection (7) for more than
281     5,600 metric tons of hydrogen per taxable year.
282          (iii) A taxpayer is eligible to claim a tax credit under this Subsection (7) for production
283     occurring during a period of 48 months beginning with the month in which the hydrogen
284     production system is placed in commercial service.
285          [(7)] (8) (a) Before a taxpayer may claim a tax credit under this section, the taxpayer
286     shall obtain a written certification from the office.
287          (b) The office shall issue a taxpayer a written certification if the office determines that:
288          (i) the taxpayer meets the requirements of this section to receive a tax credit; and
289          (ii) the residential energy system [or], the commercial energy system, or the hydrogen
290     production system with respect to which the taxpayer seeks to claim a tax credit:
291          (A) has been completely installed;
292          (B) is a viable system for saving or producing energy from renewable resources; and
293          (C) is safe, reliable, efficient, and technically feasible to ensure that the residential
294     energy system [or], the commercial energy system, or the hydrogen production system uses the
295     state's renewable and nonrenewable energy resources in an appropriate and economic manner.
296          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
297     office may make rules:
298          (i) for determining whether a residential energy system [or], a commercial energy
299     system, or a hydrogen production system meets the requirements of Subsection [(7)] (8)(b)(ii);
300     and
301          (ii) for purposes of a tax credit under Subsection (3) [or], (4), or (6), establishing the
302     reasonable costs of a residential energy system or a commercial energy system, as an amount
303     per unit of energy production.
304          (d) A taxpayer that obtains a written certification from the office shall retain the
305     certification for the same time period a person is required to keep books and records under
306     Section 59-1-1406.
307          (e) The office shall submit to the commission an electronic list that includes:
308          (i) the name and identifying information of each taxpayer to which the office issues a
309     written certification; and
310          (ii) for each taxpayer:
311          (A) the amount of the tax credit listed on the written certification; and
312          (B) the date the renewable energy system was installed.
313          [(8)] (9) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
314     Act, the commission may make rules to address the certification of a tax credit under this
315     section.
316          [(9)] (10) A tax credit under this section is in addition to any tax credits provided under
317     the laws or rules and regulations of the United States.
318          Section 2. Section 59-7-626 is enacted to read:
319          59-7-626. Refundable tax credit for nonrenewable hydrogen production system.
320          (1) As used in this section:
321          (a) "Commercial enterprise" means an entity, the purpose of which is to produce
322     hydrogen for sale from a hydrogen production system.
323          (b) "Commercial unit" means a building or structure that an entity uses to transact
324     business.
325          (c) "Hydrogen production system" means a system of apparatus and equipment, located
326     in this state, that produces hydrogen from nonrenewable sources.
327          (d) "Office" means the Office of Energy Development created in Section 63M-4-401.
328          (2) (a) A taxpayer may claim a refundable credit under this section if:
329          (i) the taxpayer owns a hydrogen production system;
330          (ii) the hydrogen production system is completed and placed in service on or after
331     January 1, 2022;
332          (iii) the taxpayer sells as a commercial enterprise, or supplies for the taxpayer's own
333     use in commercial units, the hydrogen produced from the hydrogen production system;
334          (iv) the taxpayer has not claimed and will not claim a tax credit under Section 59-7-614
335     for electricity used to meet the requirements of this section; and
336          (v) the taxpayer obtains a written certification from the office in accordance with
337     Subsection (3).
338          (b) (i) Subject to Subsections (2)(b)(ii) and (iii), a tax credit under this section is equal
339     to the product of:
340          (A) $0.12; and
341          (B) the number of kilograms of hydrogen produced during the taxable year.
342          (ii) A taxpayer may not receive a tax credit under this section for more than 5,600
343     metric tons of hydrogen per taxable year.
344          (iii) A taxpayer is eligible to claim a tax credit under this section for production
345     occurring during a period of 48 months beginning with the month in which the hydrogen
346     production system is placed in commercial service.
347          (3) (a) Before a taxpayer may claim a tax credit under this section, the taxpayer shall
348     obtain a written certification from the office.
349          (b) The office shall issue a taxpayer a written certification if the office determines that:
350          (i) the taxpayer meets the requirements of this section to receive a tax credit; and
351          (ii) the hydrogen production system with respect to which the taxpayer seeks to claim a
352     tax credit:
353          (A) has been completely installed; and
354          (B) is safe, reliable, efficient, and technically feasible to ensure that the hydrogen
355     production system uses the state's nonrenewable energy resources in an appropriate and
356     economic manner.
357          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
358     office may make rules for determining whether a hydrogen production system meets the
359     requirements of Subsection (3)(b)(ii).
360          (d) A taxpayer that obtains a written certification from the office shall retain the
361     certification for the same time period a person is required to keep books and records under
362     Section 59-1-1406.
363          (e) The office shall submit to the commission an electronic list that includes:
364          (i) the name and identifying information of each taxpayer to which the office issues a
365     written certification; and
366          (ii) for each taxpayer:
367          (A) the amount of the tax credit listed on the written certification; and
368          (B) the date the hydrogen production system was installed.
369          (4) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
370     commission may make rules to address the certification of a tax credit under this section.
371          (5) A tax credit under this section is in addition to any tax credits provided under the
372     laws or rules and regulations of the United States.
373          Section 3. Section 59-10-1106 is amended to read:
374          59-10-1106. Refundable renewable energy systems tax credits -- Definitions --
375     Certification -- Rulemaking authority.
376          (1) As used in this section:
377          (a) "Active solar system" means the same as that term is defined in Section
378     59-10-1014.
379          (b) "Biomass system" means the same as that term is defined in Section 59-10-1014.
380          (c) "Commercial energy system" means the same as that term is defined in Section
381     59-7-614.
382          (d) "Commercial enterprise" means the same as that term is defined in Section
383     59-7-614.
384          (e) [(i)] "Commercial unit" means the same as that term is defined in Section 59-7-614.
385          [(ii) Notwithstanding Subsection (1)(e)(i):]
386          [(A) with respect to an active solar system used for agricultural water pumping or a
387     wind system, each individual energy generating device is considered to be a commercial unit;
388     or]
389          [(B) if an energy system is the building or structure that a claimant, estate, or trust uses
390     to transact business, a commercial unit is the complete energy system itself.]
391          (f) "Direct use geothermal system" means the same as that term is defined in Section
392     59-10-1014.
393          (g) "Geothermal electricity" means the same as that term is defined in Section
394     59-10-1014.
395          (h) "Geothermal energy" means the same as that term is defined in Section 59-10-1014.
396          (i) "Geothermal heat pump system" means the same as that term is defined in Section
397     59-10-1014.
398          (j) "Hydroenergy system" means the same as that term is defined in Section
399     59-10-1014.
400          (k) "Hydrogen production system" means the same as that term is defined in Section
401     59-7-614.
402          [(k)] (l) "Office" means the Office of Energy Development created in Section
403     63M-4-401.
404          [(l)] (m) "Passive solar system" means the same as that term is defined in Section
405     59-10-1014.
406          [(m)] (n) "Principal recovery portion" means the same as that term is defined in Section
407     59-10-1014.
408          [(n)] (o) "Wind system" means the same as that term is defined in Section 59-10-1014.
409          (2) A claimant, estate, or trust may claim an energy system tax credit as provided in
410     this section against a tax due under this chapter for a taxable year.
411          (3) (a) Subject to the other provisions of this Subsection (3), a claimant, estate, or trust
412     may claim a refundable tax credit under this Subsection (3) with respect to a commercial
413     energy system if:
414          (i) the commercial energy system does not use:
415          (A) wind, geothermal electricity, solar, or biomass equipment capable of producing a
416     total of 660 or more kilowatts of electricity; or
417          (B) solar equipment capable of producing 2,000 or more kilowatts of electricity;
418          (ii) the claimant, estate, or trust purchases or participates in the financing of the
419     commercial energy system;
420          (iii) (A) the commercial energy system supplies all or part of the energy required by
421     commercial units owned or used by the claimant, estate, or trust; or
422          (B) the claimant, estate, or trust sells all or part of the energy produced by the
423     commercial energy system as a commercial enterprise;
424          [(iv) the commercial energy system is completed and placed in service on or after
425     January 1, 2007; and]
426          (iv) the claimant, estate, or trust has not claimed and will not claim a tax credit under
427     Subsection (6) for hydrogen production using electricity for which the claimant, estate, or trust
428     claims a tax credit under this Subsection (3); and
429          (v) the claimant, estate, or trust obtains a written certification from the office in
430     accordance with Subsection [(6)] (7).
431          (b) (i) Subject to Subsections (3)(b)(ii) through [(v)] (iv), the tax credit is equal to 10%
432     of the reasonable costs of the commercial energy system.
433          (ii) A tax credit under this Subsection (3) may include installation costs.
434          (iii) A claimant, estate, or trust [may claim] is eligible to claim a tax credit under this
435     Subsection (3) for the taxable year in which the commercial energy system is completed and
436     placed in service.
437          [(iv) A tax credit under this Subsection (3) may not be carried forward or carried back.]
438          [(v)] (iv) The total amount of tax credit a claimant, estate, or trust may claim under this
439     Subsection (3) may not exceed $50,000 per commercial unit.
440          (c) (i) Subject to Subsections (3)(c)(ii) and (iii), a claimant, estate, or trust that is a
441     lessee of a commercial energy system installed on a commercial unit may claim a tax credit
442     under this Subsection (3) if the claimant, estate, or trust confirms that the lessor irrevocably
443     elects not to claim the tax credit.
444          (ii) A claimant, estate, or trust described in Subsection (3)(c)(i) may claim as a tax
445     credit under this Subsection (3) only the principal recovery portion of the lease payments.
446          (iii) A claimant, estate, or trust described in Subsection (3)(c)(i) may claim a tax credit
447     under this Subsection (3) for a period that does not exceed seven taxable years after the [date]
448     day on which the lease begins, as stated in the lease agreement.
449          (4) (a) Subject to the other provisions of this Subsection (4), a claimant, estate, or trust
450     may claim a refundable tax credit under this Subsection (4) with respect to a commercial
451     energy system if:
452          (i) the commercial energy system uses wind, geothermal electricity, or biomass
453     equipment capable of producing a total of 660 or more kilowatts of electricity;
454          (ii) (A) the commercial energy system supplies all or part of the energy required by
455     commercial units owned or used by the claimant, estate, or trust; or
456          (B) the claimant, estate, or trust sells all or part of the energy produced by the
457     commercial energy system as a commercial enterprise;
458          [(iii) the commercial energy system is completed and placed in service on or after
459     January 1, 2007; and]
460          (iii) the claimant, estate, or trust has not claimed and will not claim a tax credit under
461     Subsection (6) for hydrogen production using electricity for which the claimant, estate, or trust
462     claims a tax credit under this Subsection (4); and
463          (iv) the claimant, estate, or trust obtains a written certification from the office in
464     accordance with Subsection [(6)] (7).
465          (b) (i) Subject to [Subsections] Subsection (4)(b)(ii) [and (iii)], a tax credit under this
466     Subsection (4) is equal to the product of:
467          (A) 0.35 cents; and
468          (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
469          (ii) A claimant, estate, or trust is eligible to claim a tax credit under this Subsection (4)
470     [may be claimed] for production occurring during a period of 48 months beginning with the
471     month in which the commercial energy system is placed in commercial service.
472          [(iii) A tax credit under this Subsection (4) may not be carried forward or back.]
473          (c) A claimant, estate, or trust that is a lessee of a commercial energy system installed
474     on a commercial unit may claim a tax credit under this Subsection (4) if the claimant, estate, or
475     trust confirms that the lessor irrevocably elects not to claim the tax credit.
476          (5) (a) Subject to the other provisions of this Subsection (5), a claimant, estate, or trust
477     may claim a refundable tax credit as provided in this Subsection (5) if:
478          (i) the claimant, estate, or trust owns a commercial energy system that uses solar
479     equipment capable of producing a total of 660 or more kilowatts of electricity;
480          (ii) (A) the commercial energy system supplies all or part of the energy required by
481     commercial units owned or used by the claimant, estate, or trust; or
482          (B) the claimant, estate, or trust sells all or part of the energy produced by the
483     commercial energy system as a commercial enterprise;
484          (iii) the claimant, estate, or trust does not claim a tax credit under Subsection (3);
485          [(iv) the commercial energy system is completed and placed in service on or after
486     January 1, 2015; and]
487          (iv) the claimant, estate, or trust has not claimed and will not claim a tax credit under
488     Subsection (6) for hydrogen production using electricity for which a taxpayer claims a tax
489     credit under this Subsection (5); and
490          (v) the claimant, estate, or trust obtains a written certification from the office in
491     accordance with Subsection [(6)] (7).
492          (b) (i) Subject to [Subsections] Subsection (5)(b)(ii) [and (iii)], a tax credit under this
493     Subsection (5) is equal to the product of:
494          (A) 0.35 cents; and
495          (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
496          (ii) A claimant, estate, or trust is eligible to claim a tax credit under this Subsection (5)
497     [may be claimed] for production occurring during a period of 48 months beginning with the
498     month in which the commercial energy system is placed in commercial service.
499          [(iii) A tax credit under this Subsection (5) may not be carried forward or carried back.]
500          (c) A claimant, estate, or trust that is a lessee of a commercial energy system installed
501     on a commercial unit may claim a tax credit under this Subsection (5) if the claimant, estate, or
502     trust confirms that the lessor irrevocably elects not to claim the tax credit.
503          (6) (a) A claimant, estate, or trust may claim a refundable tax credit as provided in this
504     Subsection (6) if:
505          (i) the claimant, estate, or trust owns a hydrogen production system;
506          (ii) the hydrogen production system is completed and placed in service on or after
507     January 1, 2022;
508          (iii) the claimant, estate, or trust sells as a commercial enterprise, or supplies for the
509     claimant's, estate's, or trust's own use in commercial units, the hydrogen produced from the
510     hydrogen production system;
511          (iv) the claimant, estate, or trust has not claimed and will not claim a tax credit under
512     Subsection (3), (4), or (5) for electricity used to meet the requirements of this Subsection (6);
513     and
514          (v) the claimant, estate, or trust obtains a written certification from the office in
515     accordance with Subsection (7).
516          (b) (i) Subject to Subsections (6)(b)(ii) and (iii), a tax credit under this Subsection (6)
517     is equal to the product of:
518          (A) $0.12; and
519          (B) the number of kilograms of hydrogen produced during the taxable year.
520          (ii) A claimant, estate, or trust may not receive a tax credit under this Subsection (6) for
521     more than 5,600 metric tons of hydrogen per taxable year.
522          (iii) A claimant, estate, or trust is eligible to claim a tax credit under this Subsection (6)
523     for production occurring during a period of 48 months beginning with the month in which the
524     hydrogen production system is placed in commercial service.
525          [(6)] (7) (a) Before a claimant, estate, or trust may claim a tax credit under this section,
526     the claimant, estate, or trust shall obtain a written certification from the office.
527          (b) The office shall issue a claimant, estate, or trust a written certification if the office
528     determines that:
529          (i) the claimant, estate, or trust meets the requirements of this section to receive a tax
530     credit; and
531          (ii) [the office determines that] the commercial energy system or the hydrogen
532     production system with respect to which the claimant, estate, or trust seeks to claim a tax
533     credit:
534          (A) has been completely installed;
535          (B) is a viable system for saving or producing energy from renewable resources; and
536          (C) is safe, reliable, efficient, and technically feasible to ensure that the commercial
537     energy system or the hydrogen production system uses the state's renewable and nonrenewable
538     resources in an appropriate and economic manner.
539          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
540     office may make rules:
541          (i) for determining whether a commercial energy system or a hydrogen production
542     system meets the requirements of Subsection [(6)] (7)(b)(ii); and
543          (ii) for purposes of a tax credit under Subsection (3), establishing the reasonable costs
544     of a commercial energy system, as an amount per unit of energy production.
545          (d) A claimant, estate, or trust that obtains a written certification from the office shall
546     retain the certification for the same time period a person is required to keep books and records
547     under Section 59-1-1406.
548          (e) The office shall submit to the commission an electronic list that includes:
549          (i) the name and identifying information of each claimant, estate, or trust to which the
550     office issues a written certification; and
551          (ii) for each claimant, estate, or trust:
552          (A) the amount of the tax credit listed on the written certification; and
553          (B) the date the commercial energy system or the hydrogen production system was
554     installed.
555          [(7)] (8) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
556     Act, the commission may make rules to address the certification of a tax credit under this
557     section.
558          [(8)] (9) A tax credit under this section is in addition to any tax credits provided under
559     the laws or rules and regulations of the United States.
560          [(9)] (10) A purchaser of one or more solar units that claims a tax credit under Section
561     59-10-1024 for the purchase of the one or more solar units may not claim a tax credit under this
562     section for that purchase.
563          Section 4. Section 59-10-1113 is enacted to read:
564          59-10-1113. Refundable tax credit for nonrenewable hydrogen production system.
565          (1) As used in this section:
566          (a) "Commercial enterprise" means the same as that term is defined in Section
567     59-7-626.
568          (b) "Commercial unit" means the same as that term is defined in Section 59-7-626.
569          (c) "Hydrogen production system" means the same as that term is defined in Section
570     59-7-626.
571          (d) "Office" means the Office of Energy Development created in Section 63M-4-401.
572          (2) (a) A claimant, estate, or trust may claim a refundable credit under this section if:
573          (i) the claimant, estate, or trust owns a hydrogen production system;
574          (ii) the hydrogen production system is completed and placed in service on or after
575     January 1, 2022;
576          (iii) the claimant, estate, or trust sells as a commercial enterprise, or supplies for the
577     claimant's, estate's, or trust's own use in commercial units, the hydrogen produced from the
578     hydrogen production system;
579          (iv) the claimant, estate, or trust has not claimed and will not claim a tax credit under
580     Section 59-10-1106 for electricity used to meet the requirements of this section; and
581          (v) the taxpayer obtains a written certification from the office in accordance with
582     Subsection (3).
583          (b) (i) Subject to Subsections (2)(b)(ii) and (iii), a tax credit under this section is equal
584     to the product of:
585          (A) $0.12; and
586          (B) the number of kilograms of hydrogen produced during the taxable year.
587          (ii) A claimant, estate, or trust may not receive a tax credit under this section for more
588     than 5,600 metric tons of hydrogen per taxable year.
589          (iii) A claimant, estate, or trust is eligible to claim a tax credit under this section for
590     production occurring during a period of 48 months beginning with the month in which the
591     hydrogen production system is placed in commercial service.
592          (3) (a) Before a claimant, estate, or trust may claim a tax credit under this section, the
593     claimant, estate, or trust shall obtain a written certification from the office.
594          (b) The office shall issue a claimant, estate, or trust a written certification if the office
595     determines that:
596          (i) the claimant, estate, or trust meets the requirements of this section to receive a tax
597     credit; and
598          (ii) the hydrogen production system with respect to which the claimant, estate, or trust
599     seeks to claim a tax credit:
600          (A) has been completely installed;
601          (B) is safe, reliable, efficient, and technically feasible to ensure that the hydrogen
602     production system uses the state's nonrenewable energy resources in an appropriate and
603     economic manner.
604          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
605     office may make rules for determining whether a hydrogen production system meets the
606     requirements of this Subsection (3)(b)(ii).
607          (d) A claimant, estate, or trust that obtains a written certification from the office shall
608     retain the certification for the same time period a person is required to keep books and records
609     under Section 59-1-1406.
610          (e) The office shall submit to the commission an electronic list that includes:
611          (i) the name and identifying information of each claimant, estate, or trust to which the
612     office issues a written certification; and
613          (ii) for each claimant, estate, or trust:
614          (A) the amount of the tax credit listed on the written certification; and
615          (B) the date the hydrogen production system was installed.
616          (4) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
617     commission may make rules to address the certification of a tax credit under this section.
618          (5) A tax credit under this section is in addition to any tax credits provided under the
619     laws or rules and regulations of the United States.
620          Section 5. Effective date.
621          This bill takes effect for a taxable year beginning on or after January 1, 2022.