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7 LONG TITLE
8 General Description:
9 This bill amends provisions related to tax credits and incentives.
10 Highlighted Provisions:
11 This bill:
12 ▸ provides for the treatment of a carry forward when an income tax credit expires or
13 repeals;
14 ▸ modifies the research activities tax credit by:
15 • eliminating the credit equal to 7.5% of qualified research expenses; and
16 • requiring the State Tax Commission to provide, and the taxpayer to complete
17 and retain, a worksheet to calculate the credits;
18 ▸ modifies the formula for calculating the individual historic preservation tax credit;
19 ▸ modifies the formulas for calculating the corporate and individual renewable energy
20 system tax credits;
21 ▸ modifies the criteria for qualifying for an enterprise zone tax credit;
22 ▸ sets an end date for entering or extending contracts authorizing an economic
23 development tax increment financing tax credit;
24 ▸ repeals the following corporate income tax credits:
25 • interest income from state and federal securities;
26 • historic preservation;
27 • renewable energy system for a residential unit;
28 • alternative energy development; and
29 • recycling market development zone;
30 ▸ repeals the following individual income tax credits:
31 • recycling market development zone;
32 • qualifying solar projects;
33 • investment in life science establishments; and
34 • alternative energy development;
35 ▸ repeals the Technology and Life Science Economic Development Act;
36 ▸ repeals the motion pictures incentives;
37 ▸ repeals the Alternative Energy Development Tax Credit Act;
38 ▸ modifies reporting and study requirements related to repealed income tax credits;
39 and
40 ▸ makes technical and conforming changes.
41 Money Appropriated in this Bill:
42 None
43 Other Special Clauses:
44 This bill provides a special effective date.
45 Utah Code Sections Affected:
46 AMENDS:
47 19-13-102, as renumbered and amended by Laws of Utah 2020, Chapter 360
48 19-13-109, as renumbered and amended by Laws of Utah 2020, Chapter 360
49 59-2-102, as last amended by Laws of Utah 2021, Chapter 314
50 59-7-159, as last amended by Laws of Utah 2021, Chapters 282 and 367
51 59-7-612, as last amended by Laws of Utah 2016, Third Special Session, Chapter 1
52 59-7-614, as last amended by Laws of Utah 2021, Chapters 280 and 374
53 59-7-614.2, as last amended by Laws of Utah 2021, Chapter 282
54 59-7-624, as last amended by Laws of Utah 2021, Chapter 282
55 59-7-903, as last amended by Laws of Utah 2016, Chapters 64 and 135
56 59-10-137, as last amended by Laws of Utah 2021, Chapters 282 and 367
57 59-10-1002.2, as last amended by Laws of Utah 2021, Chapters 68 and 428
58 59-10-1006, as renumbered and amended by Laws of Utah 2006, Chapter 223
59 59-10-1012, as last amended by Laws of Utah 2016, Third Special Session, Chapter 1
60 59-10-1014, as last amended by Laws of Utah 2021, Chapter 280
61 59-10-1106, as last amended by Laws of Utah 2021, Chapters 280 and 374
62 59-10-1107, as last amended by Laws of Utah 2021, Chapter 282
63 59-10-1112, as last amended by Laws of Utah 2021, Chapter 282
64 63J-1-602.1, as last amended by Laws of Utah 2021, Chapters 280, 382, 401, and 438
65 63N-2-104, as last amended by Laws of Utah 2021, Chapters 282, 381 and last
66 amended by Coordination Clause, Laws of Utah 2021, Chapter 282
67 63N-2-106, as last amended by Laws of Utah 2021, Chapter 282
68 63N-2-213, as last amended by Laws of Utah 2021, Chapter 282
69 63N-2-304, as last amended by Laws of Utah 2019, Chapter 247
70 79-6-401, as renumbered and amended by Laws of Utah 2021, Chapter 280
71 ENACTS:
72 59-7-538, Utah Code Annotated 1953
73 59-10-552, Utah Code Annotated 1953
74 REPEALS:
75 19-13-110, as renumbered and amended by Laws of Utah 2020, Chapter 360
76 59-7-601, as last amended by Laws of Utah 2005, Chapter 105
77 59-7-609, as enacted by Laws of Utah 1995, Chapter 42
78 59-7-610, as last amended by Laws of Utah 2021, Chapter 367
79 59-7-614.5, as last amended by Laws of Utah 2021, Chapter 282
80 59-7-614.7, as last amended by Laws of Utah 2021, Chapter 280
81 59-10-1007, as last amended by Laws of Utah 2021, Chapter 367
82 59-10-1024, as last amended by Laws of Utah 2021, Chapter 280
83 59-10-1025, as last amended by Laws of Utah 2019, Chapter 465
84 59-10-1029, as last amended by Laws of Utah 2021, Chapter 280
85 59-10-1108, as last amended by Laws of Utah 2021, Chapter 282
86 63N-2-801, as renumbered and amended by Laws of Utah 2015, Chapter 283
87 63N-2-802, as last amended by Laws of Utah 2016, Chapter 354
88 63N-2-803, as last amended by Laws of Utah 2016, Chapter 354
89 63N-2-804, as renumbered and amended by Laws of Utah 2015, Chapter 283
90 63N-2-805, as renumbered and amended by Laws of Utah 2015, Chapter 283
91 63N-2-806, as last amended by Laws of Utah 2016, Chapter 354
92 63N-2-807, as renumbered and amended by Laws of Utah 2015, Chapter 283
93 63N-2-808, as last amended by Laws of Utah 2021, Chapter 282
94 63N-2-809, as renumbered and amended by Laws of Utah 2015, Chapter 283
95 63N-2-810, as last amended by Laws of Utah 2021, Chapter 282
96 63N-2-811, as last amended by Laws of Utah 2021, Chapter 382
97 63N-8-101, as renumbered and amended by Laws of Utah 2015, Chapter 283
98 63N-8-102, as last amended by Laws of Utah 2021, Chapter 282
99 63N-8-103, as last amended by Laws of Utah 2021, Chapters 282 and 436
100 63N-8-104, as last amended by Laws of Utah 2021, Chapter 282
101 63N-8-105, as last amended by Laws of Utah 2021, Chapter 282
102 79-6-501, as renumbered and amended by Laws of Utah 2021, Chapter 280
103 79-6-502, as renumbered and amended by Laws of Utah 2021, Chapter 280
104 79-6-503, as last amended by Laws of Utah 2021, Chapter 64 and renumbered and
105 amended by Laws of Utah 2021, Chapter 280
106 79-6-504, as renumbered and amended by Laws of Utah 2021, Chapter 280
107 79-6-505, as renumbered and amended by Laws of Utah 2021, Chapter 280
108
109 Be it enacted by the Legislature of the state of Utah:
110 Section 1. Section 19-13-102 is amended to read:
111 19-13-102. Definitions.
112 As used in this part:
113 (1) "Composting" means the controlled decay of landscape waste or sewage sludge and
114 organic industrial waste, or a mixture of these, by the action of bacteria, fungi, molds, and other
115 organisms.
116 (2) "Postconsumer waste material" means any product generated by a business or
117 consumer that has served its intended end use, and that has been separated from solid waste for
118 the purposes of collection, recycling, and disposition and that does not include secondary waste
119 material.
120 (3) (a) "Recovered materials" means waste materials and by-products that have been
121 recovered or diverted from solid waste.
122 (b) "Recovered materials" does not include those materials and by-products generated
123 from, and commonly reused within, an original manufacturing process.
124 (4) (a) "Recycling" means the diversion of materials from the solid waste stream and
125 the beneficial use of the materials and includes a series of activities by which materials that
126 would become or otherwise remain waste are diverted from the waste stream for collection,
127 separation, and processing, and are used as raw materials or feedstocks in lieu of or in addition
128 to virgin materials in the manufacture of goods sold or distributed in commerce or the reuse of
129 the materials as substitutes for goods made from virgin materials.
130 (b) "Recycling" does not include burning municipal solid waste for energy recovery.
131 (5) "Recycling market development zone" or "zone" means an area designated by the
132 office as meeting the requirements of this part.
133 (6) (a) "Secondary waste material" means industrial by-products that go to disposal
134 facilities and waste generated after completion of a manufacturing process.
135 (b) "Secondary waste material" does not include internally generated scrap commonly
136 returned to industrial or manufacturing processes, such as home scrap and mill broke.
137 [
138
139 Section 2. Section 19-13-109 is amended to read:
140 19-13-109. Revocation of designations.
141 (1) The department may revoke the designation of a recycling market development
142 zone [
143 (2) Before revocation of the zone, the department shall conduct a public hearing within
144 a reasonable distance of the zone to determine reasons for inactivity and explore possible
145 alternative actions.
146 Section 3. Section 59-2-102 is amended to read:
147 59-2-102. Definitions.
148 As used in this chapter:
149 (1) (a) "Acquisition cost" means any cost required to put an item of tangible personal
150 property into service.
151 (b) "Acquisition cost" includes:
152 (i) the purchase price of a new or used item;
153 (ii) the cost of freight, shipping, loading at origin, unloading at destination, crating,
154 skidding, or any other applicable cost of shipping;
155 (iii) the cost of installation, engineering, rigging, erection, or assembly, including
156 foundations, pilings, utility connections, or similar costs; and
157 (iv) sales and use taxes.
158 (2) "Aerial applicator" means aircraft or rotorcraft used exclusively for the purpose of
159 engaging in dispensing activities directly affecting agriculture or horticulture with an
160 airworthiness certificate from the Federal Aviation Administration certifying the aircraft or
161 rotorcraft's use for agricultural and pest control purposes.
162 (3) "Air charter service" means an air carrier operation that requires the customer to
163 hire an entire aircraft rather than book passage in whatever capacity is available on a scheduled
164 trip.
165 (4) "Air contract service" means an air carrier operation available only to customers
166 that engage the services of the carrier through a contractual agreement and excess capacity on
167 any trip and is not available to the public at large.
168 (5) "Aircraft" means the same as that term is defined in Section 72-10-102.
169 (6) (a) Except as provided in Subsection (6)(b), "airline" means an air carrier that:
170 (i) operates:
171 (A) on an interstate route; and
172 (B) on a scheduled basis; and
173 (ii) offers to fly one or more passengers or cargo on the basis of available capacity on a
174 regularly scheduled route.
175 (b) "Airline" does not include an:
176 (i) air charter service; or
177 (ii) air contract service.
178 (7) "Assessment roll" or "assessment book" means a permanent record of the
179 assessment of property as assessed by the county assessor and the commission and may be
180 maintained manually or as a computerized file as a consolidated record or as multiple records
181 by type, classification, or categories.
182 (8) "Base parcel" means a parcel of property that was legally:
183 (a) subdivided into two or more lots, parcels, or other divisions of land; or
184 (b) (i) combined with one or more other parcels of property; and
185 (ii) subdivided into two or more lots, parcels, or other divisions of land.
186 (9) (a) "Certified revenue levy" means a property tax levy that provides an amount of
187 ad valorem property tax revenue equal to the sum of:
188 (i) the amount of ad valorem property tax revenue to be generated statewide in the
189 previous year from imposing a multicounty assessing and collecting levy, as specified in
190 Section 59-2-1602; and
191 (ii) the product of:
192 (A) eligible new growth, as defined in Section 59-2-924; and
193 (B) the multicounty assessing and collecting levy certified by the commission for the
194 previous year.
195 (b) For purposes of this Subsection (9), "ad valorem property tax revenue" does not
196 include property tax revenue received by a taxing entity from personal property that is:
197 (i) assessed by a county assessor in accordance with Part 3, County Assessment; and
198 (ii) semiconductor manufacturing equipment.
199 (c) For purposes of calculating the certified revenue levy described in this Subsection
200 (9), the commission shall use:
201 (i) the taxable value of real property assessed by a county assessor contained on the
202 assessment roll;
203 (ii) the taxable value of real and personal property assessed by the commission; and
204 (iii) the taxable year end value of personal property assessed by a county assessor
205 contained on the prior year's assessment roll.
206 (10) "County-assessed commercial vehicle" means:
207 (a) any commercial vehicle, trailer, or semitrailer that is not apportioned under Section
208 41-1a-301 and is not operated interstate to transport the vehicle owner's goods or property in
209 furtherance of the owner's commercial enterprise;
210 (b) any passenger vehicle owned by a business and used by its employees for
211 transportation as a company car or vanpool vehicle; and
212 (c) vehicles that are:
213 (i) especially constructed for towing or wrecking, and that are not otherwise used to
214 transport goods, merchandise, or people for compensation;
215 (ii) used or licensed as taxicabs or limousines;
216 (iii) used as rental passenger cars, travel trailers, or motor homes;
217 (iv) used or licensed in this state for use as ambulances or hearses;
218 (v) especially designed and used for garbage and rubbish collection; or
219 (vi) used exclusively to transport students or their instructors to or from any private,
220 public, or religious school or school activities.
221 (11) "Eligible judgment" means a final and unappealable judgment or order under
222 Section 59-2-1330:
223 (a) that became a final and unappealable judgment or order no more than 14 months
224 before the day on which the notice described in Section 59-2-919.1 is required to be provided;
225 and
226 (b) for which a taxing entity's share of the final and unappealable judgment or order is
227 greater than or equal to the lesser of:
228 (i) $5,000; or
229 (ii) 2.5% of the total ad valorem property taxes collected by the taxing entity in the
230 previous fiscal year.
231 (12) (a) "Escaped property" means any property, whether personal, land, or any
232 improvements to the property, that is subject to taxation and is:
233 (i) inadvertently omitted from the tax rolls, assigned to the incorrect parcel, or assessed
234 to the wrong taxpayer by the assessing authority;
235 (ii) undervalued or omitted from the tax rolls because of the failure of the taxpayer to
236 comply with the reporting requirements of this chapter; or
237 (iii) undervalued because of errors made by the assessing authority based upon
238 incomplete or erroneous information furnished by the taxpayer.
239 (b) "Escaped property" does not include property that is undervalued because of the use
240 of a different valuation methodology or because of a different application of the same valuation
241 methodology.
242 (13)(a) "Fair market value" means the amount at which property would change hands
243 between a willing buyer and a willing seller, neither being under any compulsion to buy or sell
244 and both having reasonable knowledge of the relevant facts.
245 (b) For purposes of taxation, "fair market value" shall be determined using the current
246 zoning laws applicable to the property in question, except in cases where there is a reasonable
247 probability of a change in the zoning laws affecting that property in the tax year in question and
248 the change would have an appreciable influence upon the value.
249 (14) "Geothermal fluid" means water in any form at temperatures greater than 120
250 degrees centigrade naturally present in a geothermal system.
251 (15) "Geothermal resource" means:
252 (a) the natural heat of the earth at temperatures greater than 120 degrees centigrade;
253 and
254 (b) the energy, in whatever form, including pressure, present in, resulting from, created
255 by, or which may be extracted from that natural heat, directly or through a material medium.
256 (16) (a) "Goodwill" means:
257 (i) acquired goodwill that is reported as goodwill on the books and records that a
258 taxpayer maintains for financial reporting purposes; or
259 (ii) the ability of a business to:
260 (A) generate income that exceeds a normal rate of return on assets and that results from
261 a factor described in Subsection (16)(b); or
262 (B) obtain an economic or competitive advantage resulting from a factor described in
263 Subsection (16)(b).
264 (b) The following factors apply to Subsection (16)(a)(ii):
265 (i) superior management skills;
266 (ii) reputation;
267 (iii) customer relationships;
268 (iv) patronage; or
269 (v) a factor similar to Subsections (16)(b)(i) through (iv).
270 (c) "Goodwill" does not include:
271 (i) the intangible property described in Subsection (19)(a) or (b);
272 (ii) locational attributes of real property, including:
273 (A) zoning;
274 (B) location;
275 (C) view;
276 (D) a geographic feature;
277 (E) an easement;
278 (F) a covenant;
279 (G) proximity to raw materials;
280 (H) the condition of surrounding property; or
281 (I) proximity to markets;
282 (iii) value attributable to the identification of an improvement to real property,
283 including:
284 (A) reputation of the designer, builder, or architect of the improvement;
285 (B) a name given to, or associated with, the improvement; or
286 (C) the historic significance of an improvement; or
287 (iv) the enhancement or assemblage value specifically attributable to the interrelation
288 of the existing tangible property in place working together as a unit.
289 (17) "Governing body" means:
290 (a) for a county, city, or town, the legislative body of the county, city, or town;
291 (b) for a local district under Title 17B, Limited Purpose Local Government Entities -
292 Local Districts, the local district's board of trustees;
293 (c) for a school district, the local board of education;
294 (d) for a special service district under Title 17D, Chapter 1, Special Service District
295 Act:
296 (i) the legislative body of the county or municipality that created the special service
297 district, to the extent that the county or municipal legislative body has not delegated authority
298 to an administrative control board established under Section 17D-1-301; or
299 (ii) the administrative control board, to the extent that the county or municipal
300 legislative body has delegated authority to an administrative control board established under
301 Section 17D-1-301; or
302 (e) for a public infrastructure district under Title 17D, Chapter 4, Public Infrastructure
303 District Act, the public infrastructure district's board of trustees.
304 (18) (a) Except as provided in Subsection (18)(c), "improvement" means a building,
305 structure, fixture, fence, or other item that is permanently attached to land, regardless of
306 whether the title has been acquired to the land, if:
307 (i) (A) attachment to land is essential to the operation or use of the item; and
308 (B) the manner of attachment to land suggests that the item will remain attached to the
309 land in the same place over the useful life of the item; or
310 (ii) removal of the item would:
311 (A) cause substantial damage to the item; or
312 (B) require substantial alteration or repair of a structure to which the item is attached.
313 (b) "Improvement" includes:
314 (i) an accessory to an item described in Subsection (18)(a) if the accessory is:
315 (A) essential to the operation of the item described in Subsection (18)(a); and
316 (B) installed solely to serve the operation of the item described in Subsection (18)(a);
317 and
318 (ii) an item described in Subsection (18)(a) that is temporarily detached from the land
319 for repairs and remains located on the land.
320 (c) "Improvement" does not include:
321 (i) an item considered to be personal property pursuant to rules made in accordance
322 with Section 59-2-107;
323 (ii) a moveable item that is attached to land for stability only or for an obvious
324 temporary purpose;
325 (iii) (A) manufacturing equipment and machinery; or
326 (B) essential accessories to manufacturing equipment and machinery;
327 (iv) an item attached to the land in a manner that facilitates removal without substantial
328 damage to the land or the item; or
329 (v) a transportable factory-built housing unit as defined in Section 59-2-1502 if that
330 transportable factory-built housing unit is considered to be personal property under Section
331 59-2-1503.
332 (19) "Intangible property" means:
333 (a) property that is capable of private ownership separate from tangible property,
334 including:
335 (i) money;
336 (ii) credits;
337 (iii) bonds;
338 (iv) stocks;
339 (v) representative property;
340 (vi) franchises;
341 (vii) licenses;
342 (viii) trade names;
343 (ix) copyrights; and
344 (x) patents;
345 (b) a low-income housing tax credit;
346 (c) goodwill; or
347 (d) a renewable energy tax credit or incentive, including:
348 (i) a federal renewable energy production tax credit under Section 45, Internal Revenue
349 Code;
350 (ii) a federal energy credit for qualified renewable electricity production facilities under
351 Section 48, Internal Revenue Code;
352 (iii) a federal grant for a renewable energy property under American Recovery and
353 Reinvestment Act of 2009, Pub. L. No. 111-5, Section 1603; and
354 (iv) a tax credit under Subsection 59-7-614[
355 (20) "Livestock" means:
356 (a) a domestic animal;
357 (b) a fish;
358 (c) a fur-bearing animal;
359 (d) a honeybee; or
360 (e) poultry.
361 (21) "Low-income housing tax credit" means:
362 (a) a federal low-income housing tax credit under Section 42, Internal Revenue Code;
363 or
364 (b) a low-income housing tax credit under Section 59-7-607 or Section 59-10-1010.
365 (22) "Metalliferous minerals" includes gold, silver, copper, lead, zinc, and uranium.
366 (23) "Mine" means a natural deposit of either metalliferous or nonmetalliferous
367 valuable mineral.
368 (24) "Mining" means the process of producing, extracting, leaching, evaporating, or
369 otherwise removing a mineral from a mine.
370 (25) (a) "Mobile flight equipment" means tangible personal property that is owned or
371 operated by an air charter service, air contract service, or airline and:
372 (i) is capable of flight or is attached to an aircraft that is capable of flight; or
373 (ii) is contained in an aircraft that is capable of flight if the tangible personal property
374 is intended to be used:
375 (A) during multiple flights;
376 (B) during a takeoff, flight, or landing; and
377 (C) as a service provided by an air charter service, air contract service, or airline.
378 (b) (i) "Mobile flight equipment" does not include a spare part other than a spare
379 engine that is rotated at regular intervals with an engine that is attached to the aircraft.
380 (ii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
381 commission may make rules defining the term "regular intervals."
382 (26) "Nonmetalliferous minerals" includes, but is not limited to, oil, gas, coal, salts,
383 sand, rock, gravel, and all carboniferous materials.
384 (27) "Part-year residential property" means property that is not residential property on
385 January 1 of a calendar year but becomes residential property after January 1 of the calendar
386 year.
387 (28) "Personal property" includes:
388 (a) every class of property as defined in Subsection (29) that is the subject of
389 ownership and is not real estate or an improvement;
390 (b) any pipe laid in or affixed to land whether or not the ownership of the pipe is
391 separate from the ownership of the underlying land, even if the pipe meets the definition of an
392 improvement;
393 (c) bridges and ferries;
394 (d) livestock; and
395 (e) outdoor advertising structures as defined in Section 72-7-502.
396 (29) (a) "Property" means property that is subject to assessment and taxation according
397 to its value.
398 (b) "Property" does not include intangible property as defined in this section.
399 (30) "Public utility" means:
400 (a) for purposes of this chapter, the operating property of a railroad, gas corporation, oil
401 or gas transportation or pipeline company, coal slurry pipeline company, electrical corporation,
402 telephone corporation, sewerage corporation, or heat corporation where the company performs
403 the service for, or delivers the commodity to, the public generally or companies serving the
404 public generally, or in the case of a gas corporation or an electrical corporation, where the gas
405 or electricity is sold or furnished to any member or consumers within the state for domestic,
406 commercial, or industrial use; and
407 (b) the operating property of any entity or person defined under Section 54-2-1 except
408 water corporations.
409 (31) (a) Subject to Subsection (31)(b), "qualifying exempt primary residential rental
410 personal property" means household furnishings, furniture, and equipment that:
411 (i) are used exclusively within a dwelling unit that is the primary residence of a tenant;
412 (ii) are owned by the owner of the dwelling unit that is the primary residence of a
413 tenant; and
414 (iii) after applying the residential exemption described in Section 59-2-103, are exempt
415 from taxation under this chapter in accordance with Subsection 59-2-1115(2).
416 (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
417 commission may by rule define the term "dwelling unit" for purposes of this Subsection (31)
418 and Subsection (34).
419 (32) "Real estate" or "real property" includes:
420 (a) the possession of, claim to, ownership of, or right to the possession of land;
421 (b) all mines, minerals, and quarries in and under the land, all timber belonging to
422 individuals or corporations growing or being on the lands of this state or the United States, and
423 all rights and privileges appertaining to these; and
424 (c) improvements.
425 (33) (a) "Relationship with an owner of the property's land surface rights" means a
426 relationship described in Subsection 267(b), Internal Revenue Code, except that the term 25%
427 shall be substituted for the term 50% in Subsection 267(b), Internal Revenue Code.
428 (b) For purposes of determining if a relationship described in Subsection 267(b),
429 Internal Revenue Code, exists, the ownership of stock shall be determined using the ownership
430 rules in Subsection 267(c), Internal Revenue Code.
431 (34) (a) "Residential property," for purposes of the reductions and adjustments under
432 this chapter, means any property used for residential purposes as a primary residence.
433 (b) "Residential property" includes:
434 (i) except as provided in Subsection (34)(b)(ii), includes household furnishings,
435 furniture, and equipment if the household furnishings, furniture, and equipment are:
436 (A) used exclusively within a dwelling unit that is the primary residence of a tenant;
437 and
438 (B) owned by the owner of the dwelling unit that is the primary residence of a tenant;
439 and
440 (ii) if the county assessor determines that the property will be used for residential
441 purposes as a primary residence:
442 (A) property under construction; or
443 (B) unoccupied property.
444 (c) "Residential property" does not include property used for transient residential use.
445 (d) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
446 commission may by rule define the term "dwelling unit" for purposes of Subsection (31) and
447 this Subsection (34).
448 (35) "Split estate mineral rights owner" means a person that:
449 (a) has a legal right to extract a mineral from property;
450 (b) does not hold more than a 25% interest in:
451 (i) the land surface rights of the property where the wellhead is located; or
452 (ii) an entity with an ownership interest in the land surface rights of the property where
453 the wellhead is located;
454 (c) is not an entity in which the owner of the land surface rights of the property where
455 the wellhead is located holds more than a 25% interest; and
456 (d) does not have a relationship with an owner of the land surface rights of the property
457 where the wellhead is located.
458 (36) (a) "State-assessed commercial vehicle" means:
459 (i) any commercial vehicle, trailer, or semitrailer that operates interstate or intrastate to
460 transport passengers, freight, merchandise, or other property for hire; or
461 (ii) any commercial vehicle, trailer, or semitrailer that operates interstate and transports
462 the vehicle owner's goods or property in furtherance of the owner's commercial enterprise.
463 (b) "State-assessed commercial vehicle" does not include vehicles used for hire that are
464 specified in Subsection (10)(c) as county-assessed commercial vehicles.
465 (37) "Subdivided lot" means a lot, parcel, or other division of land, that is a division of
466 a base parcel.
467 (38) "Tax area" means a geographic area created by the overlapping boundaries of one
468 or more taxing entities.
469 (39) "Taxable value" means fair market value less any applicable reduction allowed for
470 residential property under Section 59-2-103.
471 (40) "Taxing entity" means any county, city, town, school district, special taxing
472 district, local district under Title 17B, Limited Purpose Local Government Entities - Local
473 Districts, or other political subdivision of the state with the authority to levy a tax on property.
474 (41) (a) "Tax roll" means a permanent record of the taxes charged on property, as
475 extended on the assessment roll, and may be maintained on the same record or records as the
476 assessment roll or may be maintained on a separate record properly indexed to the assessment
477 roll.
478 (b) "Tax roll" includes tax books, tax lists, and other similar materials.
479 Section 4. Section 59-7-159 is amended to read:
480 59-7-159. Review of credits allowed under this chapter.
481 (1) As used in this section, "committee" means the Revenue and Taxation Interim
482 Committee.
483 (2) (a) The committee shall review the tax credits described in this chapter as provided
484 in Subsection (3) and make recommendations concerning whether the tax credits should be
485 continued, modified, or repealed.
486 (b) In conducting the review required under Subsection (2)(a), the committee shall:
487 (i) schedule time on at least one committee agenda to conduct the review;
488 (ii) invite state agencies, individuals, and organizations concerned with the tax credit
489 under review to provide testimony;
490 (iii) (A) invite the Governor's Office of Economic Opportunity to present a summary
491 and analysis of the information for each tax credit regarding which the Governor's Office of
492 Economic Opportunity is required to make a report under this chapter; and
493 (B) invite the Office of the Legislative Fiscal Analyst to present a summary and
494 analysis of the information for each tax credit regarding which the Office of the Legislative
495 Fiscal Analyst is required to make a report under this chapter;
496 (iv) ensure that the committee's recommendations described in this section include an
497 evaluation of:
498 (A) the cost of the tax credit to the state;
499 (B) the purpose and effectiveness of the tax credit; and
500 (C) the extent to which the state benefits from the tax credit; and
501 (v) undertake other review efforts as determined by the committee chairs or as
502 otherwise required by law.
503 (3) (a) On or before November 30, 2017, and every three years after 2017, the
504 committee shall conduct the review required under Subsection (2) of the tax credits allowed
505 under the following sections:
506 [
507 [
508 [
509 [
510 [
511 (b) On or before November 30, 2018, and every three years after 2018, the committee
512 shall conduct the review required under Subsection (2) of the tax credits allowed under the
513 following sections:
514 [
515 [
516 [
517 [
518 [
519 [
520 (c) On or before November 30, 2019, and every three years after 2019, the committee
521 shall conduct the review required under Subsection (2) of the tax credits allowed under [
522
523 [
524 [
525 [
526 (d) (i) In addition to the reviews described in this Subsection (3), the committee shall
527 conduct a review of a tax credit described in this chapter that is enacted on or after January 1,
528 2017.
529 (ii) The committee shall complete a review described in this Subsection (3)(d) three
530 years after the effective date of the tax credit and every three years after the initial review date.
531 Section 5. Section 59-7-538 is enacted to read:
532 59-7-538. Carry forward of expired or repealed tax credit.
533 When a nonrefundable corporate income tax credit under Part 6, Credits, expires or is
534 repealed, the commission shall allow a taxpayer to carry forward any amount of the tax credit
535 that remains for the period of time described in the tax credit for the taxable year in which the
536 taxpayer first claimed the tax credit.
537 Section 6. Section 59-7-612 is amended to read:
538 59-7-612. Tax credits for research activities conducted in the state -- Carry
539 forward -- Worksheet -- Commission to report modification or repeal of certain federal
540 provisions -- Revenue and Taxation Interim Committee study.
541 (1) (a) As used in this section:
542 (i) "Basic research" means the same as that term is defined in Section 41(e)(7), Internal
543 Revenue Code, except that the term includes only basic research conducted in this state.
544 (ii) "Committee" means the Revenue and Taxation Interim Committee.
545 (iii) "Qualified research" means the same as that term is defined in Section 41(d),
546 Internal Revenue Code, except that the term includes only qualified research conducted in this
547 state.
548 (iv) "Qualified research expenses" means the same as that term is defined in Section
549 41(b), Internal Revenue Code, except that the term includes only:
550 (A) in-house research expenses incurred in this state; and
551 (B) contract research expenses incurred in this state.
552 (b) Except as provided in Subsection (1)(a), a term used in this section that is defined
553 in Section 41, Internal Revenue Code, means the same as that term is defined in Section 41,
554 Internal Revenue Code.
555 [
556 following nonrefundable tax credits:
557 (i) a research tax credit of 5% of the taxpayer's qualified research expenses for the
558 current taxable year that exceed the base amount provided for under Subsection [
559 (ii) a tax credit for a payment to a qualified organization for basic research as provided
560 in Section 41(e), Internal Revenue Code, of 5% for the current taxable year that exceed the
561 base amount provided for under Subsection [
562 [
563
564 (b) Subject to Subsection [
565 (i) Subsection [
566 taxpayer incurs the qualified research expenses; or
567 (ii) Subsection [
568 payment to the qualified organization.
569 (c) The tax credits provided for in this section:
570 (i) do not include the alternative incremental credit provided for in Section 41(c)(4),
571 Internal Revenue Code[
572 (ii) do not terminate if a credit terminates under Section 41, Internal Revenue Code.
573 [
574 defined in Section 59-7-101 is considered to be one taxpayer.
575 [
576 authorized under Subsection [
577 Revenue Code[
578 [
579
580 [
581 provided in Sections 41(c) and 41(h), Internal Revenue Code, except that:
582 [
583 credit provided for in Section 41(c)(4), Internal Revenue Code;
584 [
585 sources within this state as provided in Part 3, Allocation and Apportionment of Income - Utah
586 UDITPA Provisions; and
587 [
588 calculating the base amount, a taxpayer:
589 [
590 41(c)(3)(B), Internal Revenue Code, regardless of whether the taxpayer meets the requirements
591 of Section 41(c)(3)(B)(i)(I) or (II), Internal Revenue Code; and
592 [
593 Subsection [
594 [
595
596 [
597
598 [
599
600 [
601 [
602 [
603
604 [
605 [
606 [
607 [
608 (a) may carry forward the amount of the tax credit that exceeds the taxpayer's tax
609 liability for a period that does not exceed the next 14 taxable years; and
610 [
611 the taxpayer's tax liability to a taxable year preceding the current taxable year.
612 [
613 (7) (a) (i) The commission shall provide a worksheet for calculating the tax credits
614 available under this section.
615 (ii) A taxpayer shall complete the worksheet for each taxable year in which the
616 taxpayer claims a tax credit under this section and retain the completed worksheet for the same
617 time period that a person is required to keep books and records under Section 59-1-1406.
618 [
619 Act, the commission may make rules [
620 process for qualified organizations to ensure that amounts paid to the qualified organizations
621 are for basic research conducted in this state.
622 [
623 the commission shall provide an electronic report of the modification or repeal to the [
624
625 modification or repeal becomes effective.
626 [
627 the tax credits provided for in this section on or before October 1 of the year after the year in
628 which the commission reports under Subsection [
629 provision of Section 41, Internal Revenue Code.
630 (b) The review described in Subsection [
631 by Section 59-7-159.
632 (c) Notwithstanding Subsection [
633 Committee is not required to review the tax credits provided for in this section if the only
634 modification to a provision of Section 41, Internal Revenue Code, is the extension of the
635 termination date provided for in Section 41(h), Internal Revenue Code.
636 (d) The [
637 review under this section:
638 (i) the cost of the tax credits provided for in this section;
639 (ii) the purpose and effectiveness of the tax credits provided for in this section;
640 (iii) whether the tax credits provided for in this section benefit the state; and
641 (iv) whether the tax credits provided for in this section should be:
642 (A) continued;
643 (B) modified; or
644 (C) repealed.
645 (e) If the [
646
647 issue a report of the [
648 Section 7. Section 59-7-614 is amended to read:
649 59-7-614. Renewable energy systems tax credits -- Definitions -- Certification --
650 Rulemaking authority.
651 (1) As used in this section:
652 (a) (i) "Active solar system" means a system of equipment that is capable of:
653 (A) collecting and converting incident solar radiation into thermal, mechanical, or
654 electrical energy; and
655 (B) transferring a form of energy described in Subsection (1)(a)(i)(A) by a separate
656 apparatus to storage or to the point of use.
657 (ii) "Active solar system" includes water heating, space heating or cooling, and
658 electrical or mechanical energy generation.
659 (b) "Biomass system" means a system of apparatus and equipment for use in:
660 (i) converting material into biomass energy, as defined in Section 59-12-102; and
661 (ii) transporting the biomass energy by separate apparatus to the point of use or storage.
662 (c) "Commercial energy system" means a system that is:
663 (i) (A) an active solar system;
664 (B) a biomass system;
665 (C) a direct use geothermal system;
666 (D) a geothermal electricity system;
667 (E) a geothermal heat pump system;
668 (F) a hydroenergy system;
669 (G) a passive solar system; or
670 (H) a wind system;
671 (ii) located in the state; and
672 (iii) used:
673 (A) to supply energy to a commercial unit; or
674 (B) as a commercial enterprise.
675 (d) "Commercial enterprise" means an entity, the purpose of which is to produce:
676 (i) electrical, mechanical, or thermal energy for sale from a commercial energy system;
677 or
678 (ii) hydrogen for sale from a hydrogen production system.
679 (e) (i) "Commercial unit" means a building or structure that an entity uses to transact
680 business.
681 (ii) Notwithstanding Subsection (1)(e)(i):
682 (A) with respect to an active solar system used for agricultural water pumping or a
683 wind system, each individual energy generating device is considered to be a commercial unit;
684 or
685 (B) if an energy system is the building or structure that an entity uses to transact
686 business, a commercial unit is the complete energy system itself.
687 (f) "Direct use geothermal system" means a system of apparatus and equipment that
688 enables the direct use of geothermal energy to meet energy needs, including heating a building,
689 an industrial process, and aquaculture.
690 (g) "Geothermal electricity" means energy that is:
691 (i) contained in heat that continuously flows outward from the earth; and
692 (ii) used as a sole source of energy to produce electricity.
693 (h) "Geothermal energy" means energy generated by heat that is contained in the earth.
694 (i) "Geothermal heat pump system" means a system of apparatus and equipment that:
695 (i) enables the use of thermal properties contained in the earth at temperatures well
696 below 100 degrees Fahrenheit; and
697 (ii) helps meet heating and cooling needs of a structure.
698 (j) "Hydroenergy system" means a system of apparatus and equipment that is capable
699 of:
700 (i) intercepting and converting kinetic water energy into electrical or mechanical
701 energy; and
702 (ii) transferring this form of energy by separate apparatus to the point of use or storage.
703 (k) "Hydrogen production system" means a system of apparatus and equipment, located
704 in this state, that uses:
705 (i) electricity from a renewable energy source to create hydrogen gas from water,
706 regardless of whether the renewable energy source is at a separate facility or the same facility
707 as the system of apparatus and equipment; or
708 (ii) uses renewable natural gas to produce hydrogen gas.
709 (l) "Office" means the Office of Energy Development created in Section 79-6-401.
710 (m) (i) "Passive solar system" means a direct thermal system that utilizes the structure
711 of a building and the structure's operable components to provide for collection, storage, and
712 distribution of heating or cooling during the appropriate times of the year by utilizing the
713 climate resources available at the site.
714 (ii) "Passive solar system" includes those portions and components of a building that
715 are expressly designed and required for the collection, storage, and distribution of solar energy.
716 (n) "Photovoltaic system" means an active solar system that generates electricity from
717 sunlight.
718 (o) (i) "Principal recovery portion" means the portion of a lease payment that
719 constitutes the cost a person incurs in acquiring a commercial energy system.
720 (ii) "Principal recovery portion" does not include:
721 (A) an interest charge; or
722 (B) a maintenance expense.
723 (p) "Renewable energy source" means the same as that term is defined in Section
724 54-17-601.
725 [
726
727 [
728 [
729 [
730 [
731 [
732 [
733 [
734 [
735
736 [
737 [
738 [
739 [
740 [
741 [
742 [
743 [
744 [
745 (i) intercepting and converting wind energy into mechanical or electrical energy; and
746 (ii) transferring these forms of energy by a separate apparatus to the point of use, sale,
747 or storage.
748 (2) A taxpayer may claim an energy system tax credit as provided in this section
749 against a tax due under this chapter for a taxable year.
750 [
751
752
753 [
754 [
755
756 [
757
758 [
759
760 [
761
762
763 [
764 [
765
766 [
767
768
769 [
770
771
772 [
773
774 [
775
776 [
777
778 [
779
780 [
781
782 [
783 [
784
785 [
786 [
787
788
789 [
790
791
792 [
793 claim a refundable tax credit under this Subsection [
794 energy system if:
795 (i) the commercial energy system does not use:
796 (A) wind, geothermal electricity, solar, or biomass equipment capable of producing a
797 total of 660 or more kilowatts of electricity; or
798 (B) solar equipment capable of producing 2,000 or more kilowatts of electricity;
799 (ii) the taxpayer purchases or participates in the financing of the commercial energy
800 system;
801 (iii) (A) the commercial energy system supplies all or part of the energy required by
802 commercial units owned or used by the taxpayer; or
803 (B) the taxpayer sells all or part of the energy produced by the commercial energy
804 system as a commercial enterprise;
805 (iv) the taxpayer has not claimed and will not claim a tax credit under Subsection [
806 (6) for hydrogen production using electricity for which the taxpayer claims a tax credit under
807 this Subsection [
808 (v) the taxpayer obtains a written certification from the office in accordance with
809 Subsection [
810 (b) (i) Subject to Subsections [
811 5% of the reasonable costs of the commercial energy system.
812 (ii) A tax credit under this Subsection [
813 (iii) A taxpayer is eligible to claim a tax credit under this Subsection [
814 taxable year in which the commercial energy system is completed and placed in service.
815 (iv) The total amount of tax credit a taxpayer may claim under this Subsection [
816 may not exceed [
817 (c) (i) Subject to Subsections [
818 commercial energy system installed on a commercial unit may claim a tax credit under this
819 Subsection [
820 tax credit.
821 (ii) A taxpayer described in Subsection [
822 this Subsection [
823 (iii) A taxpayer described in Subsection [
824 Subsection [
825 which the lease begins, as stated in the lease agreement.
826 [
827 claim a refundable tax credit under this Subsection [
828 energy system if:
829 (i) the commercial energy system uses wind, geothermal electricity, or biomass
830 equipment capable of producing a total of 660 or more kilowatts of electricity;
831 (ii) (A) the commercial energy system supplies all or part of the energy required by
832 commercial units owned or used by the taxpayer; or
833 (B) the taxpayer sells all or part of the energy produced by the commercial energy
834 system as a commercial enterprise;
835 (iii) the taxpayer has not claimed and will not claim a tax credit under Subsection [
836 (6) for hydrogen production using electricity for which the taxpayer claims a tax credit under
837 this Subsection [
838 (iv) the taxpayer obtains a written certification from the office in accordance with
839 Subsection [
840 (b) (i) Subject to Subsection [
841 is equal to the product of:
842 (A) [
843 (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
844 (ii) A taxpayer is eligible to claim a tax credit under this Subsection [
845 production occurring during a period of 48 months beginning with the month in which the
846 commercial energy system is placed in commercial service.
847 (c) A taxpayer that is a lessee of a commercial energy system installed on a commercial
848 unit may claim a tax credit under this Subsection [
849 lessor irrevocably elects not to claim the tax credit.
850 [
851 claim a refundable tax credit as provided in this Subsection [
852 (i) the taxpayer owns a commercial energy system that uses solar equipment capable of
853 producing a total of 660 or more kilowatts of electricity;
854 (ii) (A) the commercial energy system supplies all or part of the energy required by
855 commercial units owned or used by the taxpayer; or
856 (B) the taxpayer sells all or part of the energy produced by the commercial energy
857 system as a commercial enterprise;
858 (iii) the taxpayer does not claim a tax credit under Subsection [
859 claimed and will not claim a tax credit under Subsection [
860 using electricity for which a taxpayer claims a tax credit under this Subsection [
861 (iv) the taxpayer obtains a written certification from the office in accordance with
862 Subsection [
863 (b) (i) Subject to Subsection [
864 is equal to the product of:
865 (A) [
866 (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
867 (ii) A taxpayer is eligible to claim a tax credit under this Subsection [
868 production occurring during a period of 48 months beginning with the month in which the
869 commercial energy system is placed in commercial service.
870 (c) A taxpayer that is a lessee of a commercial energy system installed on a commercial
871 unit may claim a tax credit under this Subsection [
872 lessor irrevocably elects not to claim the tax credit.
873 [
874 Subsection [
875 (i) the taxpayer owns a hydrogen production system;
876 (ii) the hydrogen production system is completed and placed in service on or after
877 January 1, 2022;
878 (iii) the taxpayer sells as a commercial enterprise, or supplies for the taxpayer's own
879 use in commercial units, the hydrogen produced from the hydrogen production system;
880 (iv) the taxpayer has not claimed and will not claim a tax credit under Subsection [
881
882 requirements of this Subsection [
883 (v) the taxpayer obtains a written certification from the office in accordance with
884 Subsection [
885 (b) (i) Subject to Subsections [
886 [
887 (A) $0.12; and
888 (B) the number of kilograms of hydrogen produced during the taxable year.
889 (ii) A taxpayer may not receive a tax credit under this Subsection [
890 than 5,600 metric tons of hydrogen per taxable year.
891 (iii) A taxpayer is eligible to claim a tax credit under this Subsection [
892 production occurring during a period of 48 months beginning with the month in which the
893 hydrogen production system is placed in commercial service.
894 [
895 shall obtain a written certification from the office.
896 (b) The office shall issue a taxpayer a written certification if the office determines that:
897 (i) the taxpayer meets the requirements of this section to receive a tax credit; and
898 (ii) [
899 production system with respect to which the taxpayer seeks to claim a tax credit:
900 (A) has been completely installed;
901 (B) is a viable system for saving or producing energy from renewable resources; and
902 (C) is safe, reliable, efficient, and technically feasible to ensure that [
903
904 state's renewable and nonrenewable energy resources in an appropriate and economic manner.
905 (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
906 office may make rules:
907 (i) for determining whether [
908 system[
909 (7)(b)(ii); and
910 (ii) for purposes of a tax credit under Subsection (3)[
911 reasonable costs of [
912 per unit of energy production.
913 (d) A taxpayer that obtains a written certification from the office shall retain the
914 certification for the same time period a person is required to keep books and records under
915 Section 59-1-1406.
916 (e) The office shall submit to the commission an electronic list that includes:
917 (i) the name and identifying information of each taxpayer to which the office issues a
918 written certification; and
919 (ii) for each taxpayer:
920 (A) the amount of the tax credit listed on the written certification; and
921 (B) the date the renewable energy system was installed.
922 [
923 Act, the commission may make rules to address the certification of a tax credit under this
924 section.
925 [
926 the laws or rules and regulations of the United States.
927 Section 8. Section 59-7-614.2 is amended to read:
928 59-7-614.2. Refundable economic development tax credit.
929 (1) As used in this section:
930 (a) "Business entity" means a taxpayer that meets the definition of "business entity" as
931 defined in Section 63N-2-103.
932 (b) "Community reinvestment agency" means the same as that term is defined in
933 Section 17C-1-102.
934 (c) "Incremental job" means the same as that term is defined in Section 63N-1a-102.
935 (d) "Local government entity" means the same as that term is defined in Section
936 63N-2-103.
937 (e) "New state revenue" means the same as that term is defined in Section 63N-1a-102.
938 (f) "Office" means the Governor's Office of Economic Opportunity.
939 (2) Subject to the other provisions of this section, a business entity, local government
940 entity, or community reinvestment agency may claim a refundable tax credit for economic
941 development.
942 (3) The tax credit under this section is the amount listed as the tax credit amount on the
943 tax credit certificate that the office issues to the business entity, local government entity, or
944 community reinvestment agency for the taxable year.
945 (4) A community reinvestment agency may claim a tax credit under this section only if
946 a local government entity assigns the tax credit to the community reinvestment agency in
947 accordance with Section 63N-2-104.
948 (5) (a) In accordance with any rules prescribed by the commission under Subsection
949 (5)(b), the commission shall make a refund to the following that claim a tax credit under this
950 section:
951 (i) a local government entity;
952 (ii) a community reinvestment agency; or
953 (iii) a business entity if the amount of the tax credit exceeds the business entity's tax
954 liability for a taxable year.
955 (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
956 commission may make rules providing procedures for making a refund to a business entity,
957 local government entity, or community reinvestment agency as required by Subsection (5)(a).
958 [
959
960
961 [
962
963
964 [
965
966 [
967 [
968
969 [
970
971
972
973 [
974 [
975 [
976 [
977 [
978
979 [
980
981 [
982
983 [
984
985
986
987
988 [
989
990 [
991 [
992 [
993 Section 9. Section 59-7-624 is amended to read:
994 59-7-624. Targeted business income tax credit.
995 (1) As used in this section, "business applicant" means the same as that term is defined
996 in Section 63N-2-302.
997 (2) A business applicant that is certified and issued a targeted business income tax
998 eligibility certificate by the Governor's Office of Economic Opportunity under Section
999 63N-2-304 may claim a refundable tax credit in the amount specified on the targeted business
1000 income tax eligibility certificate.
1001 (3) For a taxable year for which a business applicant claims a targeted business income
1002 tax credit under this section, the business applicant may not claim or carry forward a tax credit
1003 under [
1004 Act.
1005 Section 10. Section 59-7-903 is amended to read:
1006 59-7-903. Removal of tax credit from tax return -- Prohibition on claiming a tax
1007 credit -- Commission publishing requirements.
1008 (1) Subject to Subsection (2) [
1009 commission shall remove a tax credit from a tax return and a person filing a tax return may not
1010 claim the tax credit if:
1011 (a) the total amount of tax credit claimed or carried forward by all persons who file a
1012 tax return is less than $10,000 per taxable year for three consecutive taxable years; and
1013 (b) less than 10 persons per year for the three consecutive taxable years described in
1014 Subsection (1)(a) file a tax return claiming or carrying forward the tax credit.
1015 (2) If the commission determines the requirements of Subsection (1) are met, the
1016 commission shall remove a tax credit from a tax return and a person filing a tax return may not
1017 claim the tax credit beginning two taxable years after the January 1 immediately following the
1018 date the commission determines the requirements of Subsection (1) are met.
1019 [
1020 [
1021 after the taxable year in which the commission determines the requirements of Subsection (1)
1022 are met, report to the Revenue and Taxation Interim Committee by electronic means that, in
1023 accordance with this section:
1024 (a) the commission is required to remove a tax credit from a return on which the tax
1025 credit appears; and
1026 (b) a person filing a tax return may not claim the tax credit.
1027 [
1028 [
1029 each tax credit that the commission will remove from a return on which the tax credit appears.
1030 (b) The list shall:
1031 (i) be published on:
1032 (A) the commission's website; and
1033 (B) the public legal notice website in accordance with Section 45-1-101;
1034 (ii) include a statement that:
1035 (A) the commission is required to remove the tax credit from each return on which the
1036 tax credit appears; and
1037 (B) the tax credit may not be claimed on a return;
1038 (iii) state the taxable year for which the removal described in Subsection [
1039 takes effect; and
1040 (iv) remain available for viewing and searching until the commission publishes a new
1041 list in accordance with this Subsection [
1042 Section 11. Section 59-10-137 is amended to read:
1043 59-10-137. Review of credits allowed under this chapter.
1044 (1) As used in this section, "committee" means the Revenue and Taxation Interim
1045 Committee.
1046 (2) (a) The committee shall review the tax credits described in this chapter as provided
1047 in Subsection (3) and make recommendations concerning whether the tax credits should be
1048 continued, modified, or repealed.
1049 (b) In conducting the review required under Subsection (2)(a), the committee shall:
1050 (i) schedule time on at least one committee agenda to conduct the review;
1051 (ii) invite state agencies, individuals, and organizations concerned with the tax credit
1052 under review to provide testimony;
1053 (iii) (A) invite the Governor's Office of Economic Opportunity to present a summary
1054 and analysis of the information for each tax credit regarding which the Governor's Office of
1055 Economic Opportunity is required to make a report under this chapter; and
1056 (B) invite the Office of the Legislative Fiscal Analyst to present a summary and
1057 analysis of the information for each tax credit regarding which the Office of the Legislative
1058 Fiscal Analyst is required to make a report under this chapter;
1059 (iv) ensure that the committee's recommendations described in this section include an
1060 evaluation of:
1061 (A) the cost of the tax credit to the state;
1062 (B) the purpose and effectiveness of the tax credit; and
1063 (C) the extent to which the state benefits from the tax credit; and
1064 (v) undertake other review efforts as determined by the committee chairs or as
1065 otherwise required by law.
1066 (3) (a) On or before November 30, 2017, and every three years after 2017, the
1067 committee shall conduct the review required under Subsection (2) of the tax credits allowed
1068 under the following sections:
1069 (i) Section 59-10-1004;
1070 (ii) Section 59-10-1010;
1071 (iii) Section 59-10-1015;
1072 [
1073 [
1074 [
1075 [
1076 [
1077 [
1078 [
1079 [
1080 (b) On or before November 30, 2018, and every three years after 2018, the committee
1081 shall conduct the review required under Subsection (2) of the tax credits allowed under the
1082 following sections:
1083 (i) Section 59-10-1005;
1084 (ii) Section 59-10-1006;
1085 (iii) Section 59-10-1012;
1086 (iv) Section 59-10-1022;
1087 (v) Section 59-10-1023;
1088 (vi) Section 59-10-1028;
1089 (vii) Section 59-10-1034;
1090 (viii) Section 59-10-1037; and
1091 [
1092 [
1093 (c) On or before November 30, 2019, and every three years after 2019, the committee
1094 shall conduct the review required under Subsection (2) of the tax credits allowed under the
1095 following sections:
1096 [
1097 [
1098 [
1099 [
1100 [
1101 [
1102 [
1103 [
1104 [
1105 [
1106 (d) (i) In addition to the reviews described in this Subsection (3), the committee shall
1107 conduct a review of a tax credit described in this chapter that is enacted on or after January 1,
1108 2017.
1109 (ii) The committee shall complete a review described in this Subsection (3)(d) three
1110 years after the effective date of the tax credit and every three years after the initial review date.
1111 Section 12. Section 59-10-552 is enacted to read:
1112 59-10-552. Carry forward of expired or repealed tax credit.
1113 When a nonrefundable individual income tax credit, under Part 10, Nonrefundable Tax
1114 Credit Act, expires or is repealed, the commission shall allow a claimant, estate, or trust to
1115 carry forward any amount of the tax credit that remains for the period of time described in the
1116 tax credit for the taxable year in which the claimant, estate, or trust first claimed the tax credit.
1117 Section 13. Section 59-10-1002.2 is amended to read:
1118 59-10-1002.2. Apportionment of tax credits.
1119 (1) A nonresident individual or a part-year resident individual that claims a tax credit
1120 in accordance with Section 59-10-1017, 59-10-1018, 59-10-1019, 59-10-1022, 59-10-1023,
1121 [
1122 of the tax credit equal to:
1123 (a) for a nonresident individual, the product of:
1124 (i) the state income tax percentage for the nonresident individual; and
1125 (ii) the amount of the tax credit that the nonresident individual would have been
1126 allowed to claim but for the apportionment requirements of this section; or
1127 (b) for a part-year resident individual, the product of:
1128 (i) the state income tax percentage for the part-year resident individual; and
1129 (ii) the amount of the tax credit that the part-year resident individual would have been
1130 allowed to claim but for the apportionment requirements of this section.
1131 (2) A nonresident estate or trust that claims a tax credit in accordance with Section
1132 59-10-1017, 59-10-1020, 59-10-1022, [
1133 apportioned amount of the tax credit equal to the product of:
1134 (a) the state income tax percentage for the nonresident estate or trust; and
1135 (b) the amount of the tax credit that the nonresident estate or trust would have been
1136 allowed to claim but for the apportionment requirements of this section.
1137 Section 14. Section 59-10-1006 is amended to read:
1138 59-10-1006. Historic preservation tax credit.
1139 [
1140
1141
1142
1143
1144
1145 (1) As used in this section:
1146 (a) "Certified historic building" means a building that:
1147 (i) (A) is listed on the National Register of Historic Places within three years of taking
1148 the credit under this section; or
1149 (B) is located in a National Register Historic District; and
1150 (ii) has been designated by the Division of State History as being of significance to the
1151 district.
1152 (b) (i) "Qualified rehabilitation expenditures" means any amount properly chargeable
1153 to the rehabilitation and restoration of the physical elements of the building, including the
1154 historic decorative elements and the upgrading of the structural, mechanical, electrical, and
1155 plumbing systems to applicable codes.
1156 (ii) "Qualified rehabilitation expenditures" does not include expenditures related to:
1157 (A) a claimant's, estate's, or trust's personal labor;
1158 (B) cost of acquisition of the property;
1159 (C) any expenditure attributable to the enlargement of an existing building;
1160 (D) rehabilitation of a certified historic building without the approval required in
1161 Subsection (2)(b); or
1162 (E) any expenditure attributable to landscaping or other site features, outbuildings,
1163 garages, and related features.
1164 (c) "Residential" means a building used for residential use, either owner occupied or
1165 income producing.
1166 (2) (a) A claimant, estate, or trust may claim a nonrefundable tax credit in an amount
1167 equal to 10% of qualified rehabilitation expenses if the qualified rehabilitation expenses:
1168 (i) cost more than $10,000; and
1169 (ii) are incurred in connection with any residential certified historic building.
1170 (b) [
1171
1172 State Historic Preservation Office shall approve all rehabilitation work for which a claimant,
1173 estate, or trust may claim a tax credit as meeting the Secretary of the Interior's Standards for
1174 Rehabilitation before completion of the rehabilitation project so that the office can provide
1175 corrective comments to the claimant, estate, or trust [
1176 qualities of the building.
1177 [
1178
1179 (c) A claimant, estate, or trust may carry forward any amount of the tax credit that
1180 exceeds the claimant's, estate's, or trust's tax liability for five taxable years after the year in
1181 which the claimant, estate, or trust incurred the qualified rehabilitation expenditures.
1182 (d) The commission, in consultation with the Division of State History, shall
1183 [
1184 [
1185 [
1186
1187
1188
1189 [
1190
1191
1192
1193 [
1194 [
1195 [
1196 [
1197 [
1198
1199 [
1200
1201 [
1202
1203 Section 15. Section 59-10-1012 is amended to read:
1204 59-10-1012. Tax credits for research activities conducted in the state -- Carry
1205 forward -- Worksheet -- Commission to report modification or repeal of certain federal
1206 provisions -- Revenue and Taxation Interim Committee study.
1207 (1) (a) As used in this section:
1208 (i) "Basic research" means the same as that term is defined in Section 41(e)(7), Internal
1209 Revenue Code, except that the term includes only basic research conducted in this state.
1210 (ii) "Committee" means the Revenue and Taxation Interim Committee.
1211 (iii) "Qualified research" means the same as that term is defined in Section 41(d),
1212 Internal Revenue Code, except that the term includes only qualified research conducted in this
1213 state.
1214 (iv) "Qualified research expenses" means the same as that term is defined in Section
1215 41(b), Internal Revenue Code, except that the term includes only:
1216 (A) in-house research expenses incurred in this state; and
1217 (B) contract research expenses incurred in this state.
1218 (b) Except as provided in Subsection (1)(a), a term used in this section that is defined
1219 in Section 41, Internal Revenue Code, means the same as that term is defined in Section 41,
1220 Internal Revenue Code.
1221 [
1222 claim the following nonrefundable tax credits:
1223 (i) a research tax credit of 5% of the claimant's, estate's, or trust's qualified research
1224 expenses for the current taxable year that exceed the base amount provided for under
1225 Subsection [
1226 (ii) a tax credit for a payment to a qualified organization for basic research as provided
1227 in Section 41(e), Internal Revenue Code, of 5% for the current taxable year that exceed the
1228 base amount provided for under Subsection [
1229 [
1230
1231 (b) Subject to Subsection [
1232 under:
1233 (i) Subsection [
1234 claimant, estate, or trust incurs the qualified research expenses; or
1235 (ii) Subsection [
1236 trust makes the payment to the qualified organization.
1237 (c) The tax credits provided for in this section:
1238 (i) do not include the alternative incremental credit provided for in Section 41(c)(4),
1239 Internal Revenue Code[
1240 (ii) do not terminate if a credit terminates under Section 41, Internal Revenue Code.
1241 [
1242 authorized under Subsection [
1243 Revenue Code[
1244 [
1245
1246 [
1247 provided in Sections 41(c) and 41(h), Internal Revenue Code, except that:
1248 [
1249 credit provided for in Section 41(c)(4), Internal Revenue Code;
1250 [
1251 attributable to sources within this state as provided in Section 59-10-118; and
1252 [
1253 calculating the base amount, a claimant, estate, or trust:
1254 [
1255 41(c)(3)(B), Internal Revenue Code, regardless of whether the claimant, estate, or trust meets
1256 the requirements of Section 41(c)(3)(B)(i)(I) or (II), Internal Revenue Code; and
1257 [
1258 Subsection [
1259 [
1260
1261 [
1262
1263 [
1264
1265 [
1266 [
1267 [
1268
1269 [
1270 Subsection [
1271 chapter for a taxable year, the [
1272 estate, or trust:
1273 [
1274 exceeds the claimant's, estate's, or trust's tax liability for a period that does not exceed the next
1275 14 taxable years; and
1276 [
1277 the claimant's, estate's, or trust's tax liability to a taxable year preceding the current taxable
1278 year.
1279 [
1280
1281 (6) (a) The commission shall provide a worksheet for a claimant, estate, or trust to
1282 calculate the tax credits available under this section.
1283 (b) A claimant, estate, or trust shall complete the worksheet for each taxable year in
1284 which the claimant, estate, or trust claims a tax credit under this section and retain the
1285 completed worksheet for the same time period that a person is required to keep books and
1286 records under Section 59-1-1406.
1287 [
1288 Act, the commission may make rules [
1289 process for qualified organizations to ensure that amounts paid to the qualified organizations
1290 are for basic research conducted in this state.
1291 [
1292 the commission shall report the modification or repeal by electronic means to the [
1293
1294 modification or repeal becomes effective.
1295 [
1296 the tax credits provided for in this section on or before October 1 of the year after the year in
1297 which the commission reports under Subsection [
1298 provision of Section 41, Internal Revenue Code.
1299 (b) The review described in Subsection [
1300 by Section 59-10-137.
1301 (c) Notwithstanding Subsection [
1302
1303 the only modification to a provision of Section 41, Internal Revenue Code, is the extension of
1304 the termination date provided for in Section 41(h), Internal Revenue Code.
1305 (d) The [
1306 review under this section:
1307 (i) the cost of the tax credits provided for in this section;
1308 (ii) the purpose and effectiveness of the tax credits provided for in this section;
1309 (iii) whether the tax credits provided for in this section benefit the state; and
1310 (iv) whether the tax credits provided for in this section should be:
1311 (A) continued;
1312 (B) modified; or
1313 (C) repealed.
1314 (e) If the [
1315
1316 issue a report of the [
1317 Section 16. Section 59-10-1014 is amended to read:
1318 59-10-1014. Nonrefundable renewable energy systems tax credits -- Definitions --
1319 Certification -- Rulemaking authority.
1320 (1) As used in this section:
1321 (a) (i) "Active solar system" means a system of equipment that is capable of:
1322 (A) collecting and converting incident solar radiation into thermal, mechanical, or
1323 electrical energy; and
1324 (B) transferring a form of energy described in Subsection (1)(a)(i)(A) by a separate
1325 apparatus to storage or to the point of use.
1326 (ii) "Active solar system" includes water heating, space heating or cooling, and
1327 electrical or mechanical energy generation.
1328 (b) "Biomass system" means a system of apparatus and equipment for use in:
1329 (i) converting material into biomass energy, as defined in Section 59-12-102; and
1330 (ii) transporting the biomass energy by separate apparatus to the point of use or storage.
1331 (c) "Direct use geothermal system" means a system of apparatus and equipment that
1332 enables the direct use of geothermal energy to meet energy needs, including heating a building,
1333 an industrial process, and aquaculture.
1334 (d) "Geothermal electricity" means energy that is:
1335 (i) contained in heat that continuously flows outward from the earth; and
1336 (ii) used as a sole source of energy to produce electricity.
1337 (e) "Geothermal energy" means energy generated by heat that is contained in the earth.
1338 (f) "Geothermal heat pump system" means a system of apparatus and equipment that:
1339 (i) enables the use of thermal properties contained in the earth at temperatures well
1340 below 100 degrees Fahrenheit; and
1341 (ii) helps meet heating and cooling needs of a structure.
1342 (g) "Hydroenergy system" means a system of apparatus and equipment that is capable
1343 of:
1344 (i) intercepting and converting kinetic water energy into electrical or mechanical
1345 energy; and
1346 (ii) transferring this form of energy by separate apparatus to the point of use or storage.
1347 (h) "Office" means the Office of Energy Development created in Section 79-6-401.
1348 (i) (i) "Passive solar system" means a direct thermal system that utilizes the structure of
1349 a building and its operable components to provide for collection, storage, and distribution of
1350 heating or cooling during the appropriate times of the year by utilizing the climate resources
1351 available at the site.
1352 (ii) "Passive solar system" includes those portions and components of a building that
1353 are expressly designed and required for the collection, storage, and distribution of solar energy.
1354 (j) "Photovoltaic system" means an active solar system that generates electricity from
1355 sunlight.
1356 (k) (i) "Principal recovery portion" means the portion of a lease payment that
1357 constitutes the cost a person incurs in acquiring a residential energy system.
1358 (ii) "Principal recovery portion" does not include:
1359 (A) an interest charge; or
1360 (B) a maintenance expense.
1361 (l) "Residential energy system" means the following used to supply energy to or for a
1362 residential unit:
1363 (i) an active solar system;
1364 (ii) a biomass system;
1365 (iii) a direct use geothermal system;
1366 (iv) a geothermal heat pump system;
1367 (v) a hydroenergy system;
1368 (vi) a passive solar system; or
1369 (vii) a wind system.
1370 (m) (i) "Residential unit" means a house, condominium, apartment, or similar dwelling
1371 unit that:
1372 (A) is located in the state; and
1373 (B) serves as a dwelling for a person, group of persons, or a family.
1374 (ii) "Residential unit" does not include property subject to a fee under:
1375 (A) Section 59-2-405;
1376 (B) Section 59-2-405.1;
1377 (C) Section 59-2-405.2;
1378 (D) Section 59-2-405.3; or
1379 (E) Section 72-10-110.5.
1380 (n) "Wind system" means a system of apparatus and equipment that is capable of:
1381 (i) intercepting and converting wind energy into mechanical or electrical energy; and
1382 (ii) transferring these forms of energy by a separate apparatus to the point of use or
1383 storage.
1384 (2) A claimant, estate, or trust may claim an energy system tax credit as provided in
1385 this section against a tax due under this chapter for a taxable year.
1386 (3) [
1387 trust may claim a nonrefundable tax credit under this section with respect to a residential unit
1388 the claimant, estate, or trust owns or uses if:
1389 (a) the claimant, estate, or trust:
1390 (i) purchases and completes a residential energy system to supply all or part of the
1391 energy required for the residential unit; or
1392 (ii) participates in the financing of a residential energy system to supply all or part of
1393 the energy required for the residential unit;
1394 (b) the residential energy system is installed on or after January 1, 2007; and
1395 (c) the claimant, estate, or trust obtains a written certification from the office in
1396 accordance with Subsection (5).
1397 (4) (a) For a residential energy system, other than a photovoltaic system, the tax credit
1398 described in this section is equal to the lesser of:
1399 (i) 25% of the reasonable costs, including installation costs, of each residential energy
1400 system installed with respect to each residential unit the claimant, estate, or trust owns or uses;
1401 and
1402 (ii) $2,000.
1403 (b) Subject to Subsection (5)(d), for a residential energy system that is a photovoltaic
1404 system, the tax credit described in this section is equal to the lesser of:
1405 (i) 25% of the reasonable costs, including installation costs, of each system installed
1406 with respect to each residential unit the claimant, estate, or trust owns or uses; or
1407 (ii) (A) for a system installed on or after January 1, 2007, but on or before December
1408 31, 2017, $2,000;
1409 (B) for a system installed on or after January 1, 2018, but on or before December 31,
1410 2020, $1,600;
1411 (C) for a system installed on or after January 1, 2021, but on or before December 31,
1412 2021, $1,200;
1413 (D) for a system installed on or after January 1, 2022, but on or before December 31,
1414 2022, $800;
1415 (E) for a system installed on or after January 1, 2023, but on or before December 31,
1416 2023, $400; and
1417 (F) for a system installed on or after January 1, 2024, $0.
1418 (c) (i) The office shall determine the amount of the tax credit that a claimant, estate, or
1419 trust may claim and list that amount on the written certification that the office issues under
1420 Subsection (5).
1421 (ii) The claimant, estate, or trust may claim the tax credit in the amount listed on the
1422 written certification that the office issues under Subsection (5).
1423 (d) A claimant, estate, or trust may claim a tax credit under Subsection (3) for the
1424 taxable year in which the residential energy system is installed.
1425 (e) If the amount of a tax credit listed on the written certification exceeds a claimant's,
1426 estate's, or trust's tax liability under this chapter for a taxable year, the claimant, estate, or trust
1427 may carry forward the amount of the tax credit exceeding the liability for a period that does not
1428 exceed the next four taxable years.
1429 (f) A claimant, estate, or trust may claim a tax credit with respect to additional
1430 residential energy systems or parts of residential energy systems for a subsequent taxable year
1431 if the total amount of tax credit the claimant, estate, or trust claims does not exceed $2,000 per
1432 residential unit.
1433 (g) (i) Subject to Subsections (4)(g)(ii) and (iii), a claimant, estate, or trust that leases a
1434 residential energy system installed on a residential unit may claim a tax credit under Subsection
1435 (3) if the claimant, estate, or trust confirms that the lessor irrevocably elects not to claim the tax
1436 credit.
1437 (ii) A claimant, estate, or trust described in Subsection (4)(g)(i) that leases a residential
1438 energy system may claim as a tax credit under Subsection (3) only the principal recovery
1439 portion of the lease payments.
1440 (iii) A claimant, estate, or trust described in Subsection (4)(g)(i) that leases a
1441 residential energy system may claim a tax credit under Subsection (3) for a period that does not
1442 exceed seven taxable years after the date the lease begins, as stated in the lease agreement.
1443 (h) If a claimant, estate, or trust sells a residential unit to another person before the
1444 claimant, estate, or trust claims the tax credit under Subsection (3):
1445 (i) the claimant, estate, or trust may assign the tax credit to the other person; and
1446 (ii) (A) if the other person files a return under Chapter 7, Corporate Franchise and
1447 Income Taxes, the other person may claim the tax credit as if the other person had met the
1448 requirements of Section 59-7-614 to claim the tax credit; or
1449 (B) if the other person files a return under this chapter, the other person may claim the
1450 tax credit under this section as if the other person had met the requirements of this section to
1451 claim the tax credit.
1452 (5) (a) Before a claimant, estate, or trust may claim a tax credit under this section, the
1453 claimant, estate, or trust shall obtain a written certification from the office.
1454 (b) The office shall issue a claimant, estate, or trust a written certification if the office
1455 determines that:
1456 (i) the claimant, estate, or trust meets the requirements of this section to receive a tax
1457 credit; and
1458 (ii) the office determines that the residential energy system with respect to which the
1459 claimant, estate, or trust seeks to claim a tax credit:
1460 (A) has been completely installed;
1461 (B) is a viable system for saving or producing energy from renewable resources; and
1462 (C) is safe, reliable, efficient, and technically feasible to ensure that the residential
1463 energy system uses the state's renewable and nonrenewable energy resources in an appropriate
1464 and economic manner.
1465 (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1466 office may make rules:
1467 (i) for determining whether a residential energy system meets the requirements of
1468 Subsection (5)(b)(ii); and
1469 (ii) for purposes of determining the amount of a tax credit that a claimant, estate, or
1470 trust may receive under Subsection (4), establishing the reasonable costs of a residential energy
1471 system, as an amount per unit of energy production.
1472 (d) A claimant, estate, or trust that obtains a written certification from the office shall
1473 retain the certification for the same time period a person is required to keep books and records
1474 under Section 59-1-1406.
1475 (e) The office shall submit to the commission an electronic list that includes:
1476 (i) the name and identifying information of each claimant, estate, or trust to which the
1477 office issues a written certification; and
1478 (ii) for each claimant, estate, or trust:
1479 (A) the amount of the tax credit listed on the written certification; and
1480 (B) the date the renewable energy system was installed.
1481 (6) A tax credit under this section is in addition to any tax credits provided under the
1482 laws or rules and regulations of the United States.
1483 [
1484
1485
1486 Section 17. Section 59-10-1106 is amended to read:
1487 59-10-1106. Refundable renewable energy systems tax credits -- Definitions --
1488 Certification -- Rulemaking authority.
1489 (1) As used in this section:
1490 (a) "Active solar system" means the same as that term is defined in Section
1491 59-10-1014.
1492 (b) "Biomass system" means the same as that term is defined in Section 59-10-1014.
1493 (c) "Commercial energy system" means the same as that term is defined in Section
1494 59-7-614.
1495 (d) "Commercial enterprise" means the same as that term is defined in Section
1496 59-7-614.
1497 (e) "Commercial unit" means the same as that term is defined in Section 59-7-614.
1498 (f) "Direct use geothermal system" means the same as that term is defined in Section
1499 59-10-1014.
1500 (g) "Geothermal electricity" means the same as that term is defined in Section
1501 59-10-1014.
1502 (h) "Geothermal energy" means the same as that term is defined in Section 59-10-1014.
1503 (i) "Geothermal heat pump system" means the same as that term is defined in Section
1504 59-10-1014.
1505 (j) "Hydroenergy system" means the same as that term is defined in Section
1506 59-10-1014.
1507 (k) "Hydrogen production system" means the same as that term is defined in Section
1508 59-7-614.
1509 (l) "Office" means the Office of Energy Development created in Section 79-6-401.
1510 (m) "Passive solar system" means the same as that term is defined in Section
1511 59-10-1014.
1512 (n) "Principal recovery portion" means the same as that term is defined in Section
1513 59-10-1014.
1514 (o) "Wind system" means the same as that term is defined in Section 59-10-1014.
1515 (2) A claimant, estate, or trust may claim an energy system tax credit as provided in
1516 this section against a tax due under this chapter for a taxable year.
1517 (3) (a) Subject to the other provisions of this Subsection (3), a claimant, estate, or trust
1518 may claim a refundable tax credit under this Subsection (3) with respect to a commercial
1519 energy system if:
1520 (i) the commercial energy system does not use:
1521 (A) wind, geothermal electricity, solar, or biomass equipment capable of producing a
1522 total of 660 or more kilowatts of electricity; or
1523 (B) solar equipment capable of producing 2,000 or more kilowatts of electricity;
1524 (ii) the claimant, estate, or trust purchases or participates in the financing of the
1525 commercial energy system;
1526 (iii) (A) the commercial energy system supplies all or part of the energy required by
1527 commercial units owned or used by the claimant, estate, or trust; or
1528 (B) the claimant, estate, or trust sells all or part of the energy produced by the
1529 commercial energy system as a commercial enterprise;
1530 (iv) the claimant, estate, or trust has not claimed and will not claim a tax credit under
1531 Subsection (6) for hydrogen production using electricity for which the claimant, estate, or trust
1532 claims a tax credit under this Subsection (3); and
1533 (v) the claimant, estate, or trust obtains a written certification from the office in
1534 accordance with Subsection (7).
1535 (b) (i) Subject to Subsections (3)(b)(ii) through (iv), the tax credit is equal to [
1536 of the reasonable costs of the commercial energy system.
1537 (ii) A tax credit under this Subsection (3) may include installation costs.
1538 (iii) A claimant, estate, or trust is eligible to claim a tax credit under this Subsection (3)
1539 for the taxable year in which the commercial energy system is completed and placed in service.
1540 (iv) The total amount of tax credit a claimant, estate, or trust may claim under this
1541 Subsection (3) may not exceed [
1542 (c) (i) Subject to Subsections (3)(c)(ii) and (iii), a claimant, estate, or trust that is a
1543 lessee of a commercial energy system installed on a commercial unit may claim a tax credit
1544 under this Subsection (3) if the claimant, estate, or trust confirms that the lessor irrevocably
1545 elects not to claim the tax credit.
1546 (ii) A claimant, estate, or trust described in Subsection (3)(c)(i) may claim as a tax
1547 credit under this Subsection (3) only the principal recovery portion of the lease payments.
1548 (iii) A claimant, estate, or trust described in Subsection (3)(c)(i) may claim a tax credit
1549 under this Subsection (3) for a period that does not exceed seven taxable years after the day on
1550 which the lease begins, as stated in the lease agreement.
1551 (4) (a) Subject to the other provisions of this Subsection (4), a claimant, estate, or trust
1552 may claim a refundable tax credit under this Subsection (4) with respect to a commercial
1553 energy system if:
1554 (i) the commercial energy system uses wind, geothermal electricity, or biomass
1555 equipment capable of producing a total of 660 or more kilowatts of electricity;
1556 (ii) (A) the commercial energy system supplies all or part of the energy required by
1557 commercial units owned or used by the claimant, estate, or trust; or
1558 (B) the claimant, estate, or trust sells all or part of the energy produced by the
1559 commercial energy system as a commercial enterprise;
1560 (iii) the claimant, estate, or trust has not claimed and will not claim a tax credit under
1561 Subsection (6) for hydrogen production using electricity for which the claimant, estate, or trust
1562 claims a tax credit under this Subsection (4); and
1563 (iv) the claimant, estate, or trust obtains a written certification from the office in
1564 accordance with Subsection (7).
1565 (b) (i) Subject to Subsection (4)(b)(ii), a tax credit under this Subsection (4) is equal to
1566 the product of:
1567 (A) [
1568 (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
1569 (ii) A claimant, estate, or trust is eligible to claim a tax credit under this Subsection (4)
1570 for production occurring during a period of 48 months beginning with the month in which the
1571 commercial energy system is placed in commercial service.
1572 (c) A claimant, estate, or trust that is a lessee of a commercial energy system installed
1573 on a commercial unit may claim a tax credit under this Subsection (4) if the claimant, estate, or
1574 trust confirms that the lessor irrevocably elects not to claim the tax credit.
1575 (5) (a) Subject to the other provisions of this Subsection (5), a claimant, estate, or trust
1576 may claim a refundable tax credit as provided in this Subsection (5) if:
1577 (i) the claimant, estate, or trust owns a commercial energy system that uses solar
1578 equipment capable of producing a total of 660 or more kilowatts of electricity;
1579 (ii) (A) the commercial energy system supplies all or part of the energy required by
1580 commercial units owned or used by the claimant, estate, or trust; or
1581 (B) the claimant, estate, or trust sells all or part of the energy produced by the
1582 commercial energy system as a commercial enterprise;
1583 (iii) the claimant, estate, or trust does not claim a tax credit under Subsection (3);
1584 (iv) the claimant, estate, or trust has not claimed and will not claim a tax credit under
1585 Subsection (6) for hydrogen production using electricity for which a taxpayer claims a tax
1586 credit under this Subsection (5); and
1587 (v) the claimant, estate, or trust obtains a written certification from the office in
1588 accordance with Subsection (7).
1589 (b) (i) Subject to Subsection (5)(b)(ii), a tax credit under this Subsection (5) is equal to
1590 the product of:
1591 (A) [
1592 (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
1593 (ii) A claimant, estate, or trust is eligible to claim a tax credit under this Subsection (5)
1594 for production occurring during a period of 48 months beginning with the month in which the
1595 commercial energy system is placed in commercial service.
1596 (c) A claimant, estate, or trust that is a lessee of a commercial energy system installed
1597 on a commercial unit may claim a tax credit under this Subsection (5) if the claimant, estate, or
1598 trust confirms that the lessor irrevocably elects not to claim the tax credit.
1599 (6) (a) A claimant, estate, or trust may claim a refundable tax credit as provided in this
1600 Subsection (6) if:
1601 (i) the claimant, estate, or trust owns a hydrogen production system;
1602 (ii) the hydrogen production system is completed and placed in service on or after
1603 January 1, 2022;
1604 (iii) the claimant, estate, or trust sells as a commercial enterprise, or supplies for the
1605 claimant's, estate's, or trust's own use in commercial units, the hydrogen produced from the
1606 hydrogen production system;
1607 (iv) the claimant, estate, or trust has not claimed and will not claim a tax credit under
1608 Subsection (3), (4), or (5) for electricity used to meet the requirements of this Subsection (6);
1609 and
1610 (v) the claimant, estate, or trust obtains a written certification from the office in
1611 accordance with Subsection (7).
1612 (b) (i) Subject to Subsections (6)(b)(ii) and (iii), a tax credit under this Subsection (6)
1613 is equal to the product of:
1614 (A) $0.12; and
1615 (B) the number of kilograms of hydrogen produced during the taxable year.
1616 (ii) A claimant, estate, or trust may not receive a tax credit under this Subsection (6) for
1617 more than 5,600 metric tons of hydrogen per taxable year.
1618 (iii) A claimant, estate, or trust is eligible to claim a tax credit under this Subsection (6)
1619 for production occurring during a period of 48 months beginning with the month in which the
1620 hydrogen production system is placed in commercial service.
1621 (7) (a) Before a claimant, estate, or trust may claim a tax credit under this section, the
1622 claimant, estate, or trust shall obtain a written certification from the office.
1623 (b) The office shall issue a claimant, estate, or trust a written certification if the office
1624 determines that:
1625 (i) the claimant, estate, or trust meets the requirements of this section to receive a tax
1626 credit; and
1627 (ii) the commercial energy system or the hydrogen production system with respect to
1628 which the claimant, estate, or trust seeks to claim a tax credit:
1629 (A) has been completely installed;
1630 (B) is a viable system for saving or producing energy from renewable resources; and
1631 (C) is safe, reliable, efficient, and technically feasible to ensure that the commercial
1632 energy system or the hydrogen production system uses the state's renewable and nonrenewable
1633 resources in an appropriate and economic manner.
1634 (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1635 office may make rules:
1636 (i) for determining whether a commercial energy system or a hydrogen production
1637 system meets the requirements of Subsection (7)(b)(ii); and
1638 (ii) for purposes of a tax credit under Subsection (3), establishing the reasonable costs
1639 of a commercial energy system, as an amount per unit of energy production.
1640 (d) A claimant, estate, or trust that obtains a written certification from the office shall
1641 retain the certification for the same time period a person is required to keep books and records
1642 under Section 59-1-1406.
1643 (e) The office shall submit to the commission an electronic list that includes:
1644 (i) the name and identifying information of each claimant, estate, or trust to which the
1645 office issues a written certification; and
1646 (ii) for each claimant, estate, or trust:
1647 (A) the amount of the tax credit listed on the written certification; and
1648 (B) the date the commercial energy system or the hydrogen production system was
1649 installed.
1650 (8) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1651 commission may make rules to address the certification of a tax credit under this section.
1652 (9) A tax credit under this section is in addition to any tax credits provided under the
1653 laws or rules and regulations of the United States.
1654 [
1655
1656
1657 Section 18. Section 59-10-1107 is amended to read:
1658 59-10-1107. Refundable economic development tax credit.
1659 (1) As used in this section:
1660 (a) "Business entity" means a claimant, estate, or trust that meets the definition of
1661 "business entity" as defined in Section 63N-2-103.
1662 (b) "Incremental job" means the same as that term is defined in Section 63N-1a-102.
1663 (c) "New state revenue" means the same as that term is defined in Section 63N-1a-102.
1664 (d) "Office" means the Governor's Office of Economic Opportunity.
1665 (2) Subject to the other provisions of this section, a business entity may claim a
1666 refundable tax credit for economic development.
1667 (3) The tax credit under this section is the amount listed as the tax credit amount on the
1668 tax credit certificate that the office issues to the business entity for the taxable year.
1669 (4) (a) In accordance with any rules prescribed by the commission under Subsection
1670 (4)(b), the commission shall make a refund to a business entity that claims a tax credit under
1671 this section if the amount of the tax credit exceeds the business entity's tax liability for a
1672 taxable year.
1673 (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1674 commission may make rules providing procedures for making a refund to a business entity as
1675 required by Subsection (4)(a).
1676 [
1677
1678
1679 [
1680
1681
1682 [
1683 [
1684 [
1685 [
1686 [
1687 [
1688 [
1689 [
1690
1691 [
1692
1693 [
1694
1695 [
1696
1697
1698
1699
1700 [
1701
1702 [
1703 [
1704 [
1705 Section 19. Section 59-10-1112 is amended to read:
1706 59-10-1112. Targeted business income tax credit.
1707 (1) As used in this section, "business applicant" means the same as that term is defined
1708 in Section 63N-2-302.
1709 (2) A business applicant that is certified and issued a targeted business income tax
1710 eligibility certificate by the Governor's Office of Economic Opportunity under Section
1711 63N-2-304 may claim a refundable tax credit in the amount specified on the targeted business
1712 income tax eligibility certificate.
1713 (3) For a taxable year for which a business applicant claims a targeted business income
1714 tax credit under this section, the business applicant may not claim or carry forward a tax credit
1715 under [
1716 Act.
1717 Section 20. Section 63J-1-602.1 is amended to read:
1718 63J-1-602.1. List of nonlapsing appropriations from accounts and funds.
1719 Appropriations made from the following accounts or funds are nonlapsing:
1720 (1) The Utah Intracurricular Student Organization Support for Agricultural Education
1721 and Leadership Restricted Account created in Section 4-42-102.
1722 (2) The Native American Repatriation Restricted Account created in Section 9-9-407.
1723 (3) The Martin Luther King, Jr. Civil Rights Support Restricted Account created in
1724 Section 9-18-102.
1725 (4) The National Professional Men's Soccer Team Support of Building Communities
1726 Restricted Account created in Section 9-19-102.
1727 (5) Funds collected for directing and administering the C-PACE district created in
1728 Section 11-42a-106.
1729 (6) Money received by the Utah Inland Port Authority, as provided in Section
1730 11-58-105.
1731 (7) The "Latino Community Support Restricted Account" created in Section 13-1-16.
1732 (8) The Clean Air Support Restricted Account created in Section 19-1-109.
1733 (9) The Division of Air Quality Oil, Gas, and Mining Restricted Account created in
1734 Section 19-2a-106.
1735 (10) The Division of Water Quality Oil, Gas, and Mining Restricted Account created in
1736 Section 19-5-126.
1737 (11) The "Support for State-Owned Shooting Ranges Restricted Account" created in
1738 Section 23-14-13.5.
1739 (12) Award money under the State Asset Forfeiture Grant Program, as provided under
1740 Section 24-4-117.
1741 (13) Funds collected from the program fund for local health department expenses
1742 incurred in responding to a local health emergency under Section 26-1-38.
1743 (14) The Children with Cancer Support Restricted Account created in Section
1744 26-21a-304.
1745 (15) State funds for matching federal funds in the Children's Health Insurance Program
1746 as provided in Section 26-40-108.
1747 (16) The Children with Heart Disease Support Restricted Account created in Section
1748 26-58-102.
1749 (17) The Nurse Home Visiting Restricted Account created in Section 26-63-601.
1750 (18) The Technology Development Restricted Account created in Section 31A-3-104.
1751 (19) The Criminal Background Check Restricted Account created in Section
1752 31A-3-105.
1753 (20) The Captive Insurance Restricted Account created in Section 31A-3-304, except
1754 to the extent that Section 31A-3-304 makes the money received under that section free revenue.
1755 (21) The Title Licensee Enforcement Restricted Account created in Section
1756 31A-23a-415.
1757 (22) The Health Insurance Actuarial Review Restricted Account created in Section
1758 31A-30-115.
1759 (23) The Insurance Fraud Investigation Restricted Account created in Section
1760 31A-31-108.
1761 (24) The Underage Drinking Prevention Media and Education Campaign Restricted
1762 Account created in Section 32B-2-306.
1763 (25) The School Readiness Restricted Account created in Section 35A-15-203.
1764 (26) Money received by the Utah State Office of Rehabilitation for the sale of certain
1765 products or services, as provided in Section 35A-13-202.
1766 (27) The Oil and Gas Administrative Penalties Account created in Section 40-6-11.
1767 (28) The Oil and Gas Conservation Account created in Section 40-6-14.5.
1768 (29) The Division of Oil, Gas, and Mining Restricted account created in Section
1769 40-6-23.
1770 (30) The Electronic Payment Fee Restricted Account created by Section 41-1a-121 to
1771 the Motor Vehicle Division.
1772 (31) The Motor Vehicle Enforcement Division Temporary Permit Restricted Account
1773 created by Section 41-3-110 to the State Tax Commission.
1774 (32) The Utah Law Enforcement Memorial Support Restricted Account created in
1775 Section 53-1-120.
1776 (33) The State Disaster Recovery Restricted Account to the Division of Emergency
1777 Management, as provided in Section 53-2a-603.
1778 (34) The Department of Public Safety Restricted Account to the Department of Public
1779 Safety, as provided in Section 53-3-106.
1780 (35) The Utah Highway Patrol Aero Bureau Restricted Account created in Section
1781 53-8-303.
1782 (36) The DNA Specimen Restricted Account created in Section 53-10-407.
1783 (37) The Canine Body Armor Restricted Account created in Section 53-16-201.
1784 (38) The Technical Colleges Capital Projects Fund created in Section 53B-2a-118.
1785 (39) The Higher Education Capital Projects Fund created in Section 53B-22-202.
1786 (40) A certain portion of money collected for administrative costs under the School
1787 Institutional Trust Lands Management Act, as provided under Section 53C-3-202.
1788 (41) The Public Utility Regulatory Restricted Account created in Section 54-5-1.5,
1789 subject to Subsection 54-5-1.5(4)(d).
1790 (42) Funds collected from a surcharge fee to provide certain licensees with access to an
1791 electronic reference library, as provided in Section 58-3a-105.
1792 (43) Certain fines collected by the Division of Occupational and Professional Licensing
1793 for violation of unlawful or unprofessional conduct that are used for education and enforcement
1794 purposes, as provided in Section 58-17b-505.
1795 (44) Funds collected from a surcharge fee to provide certain licensees with access to an
1796 electronic reference library, as provided in Section 58-22-104.
1797 (45) Funds collected from a surcharge fee to provide certain licensees with access to an
1798 electronic reference library, as provided in Section 58-55-106.
1799 (46) Funds collected from a surcharge fee to provide certain licensees with access to an
1800 electronic reference library, as provided in Section 58-56-3.5.
1801 (47) Certain fines collected by the Division of Occupational and Professional Licensing
1802 for use in education and enforcement of the Security Personnel Licensing Act, as provided in
1803 Section 58-63-103.
1804 (48) The Relative Value Study Restricted Account created in Section 59-9-105.
1805 (49) The Cigarette Tax Restricted Account created in Section 59-14-204.
1806 (50) Funds paid to the Division of Real Estate for the cost of a criminal background
1807 check for a mortgage loan license, as provided in Section 61-2c-202.
1808 (51) Funds paid to the Division of Real Estate for the cost of a criminal background
1809 check for principal broker, associate broker, and sales agent licenses, as provided in Section
1810 61-2f-204.
1811 (52) Certain funds donated to the Department of Human Services, as provided in
1812 Section 62A-1-111.
1813 (53) The National Professional Men's Basketball Team Support of Women and
1814 Children Issues Restricted Account created in Section 62A-1-202.
1815 (54) Certain funds donated to the Division of Child and Family Services, as provided
1816 in Section 62A-4a-110.
1817 (55) The Choose Life Adoption Support Restricted Account created in Section
1818 62A-4a-608.
1819 (56) Funds collected by the Office of Administrative Rules for publishing, as provided
1820 in Section 63G-3-402.
1821 (57) The Immigration Act Restricted Account created in Section 63G-12-103.
1822 (58) Money received by the military installation development authority, as provided in
1823 Section 63H-1-504.
1824 (59) The Computer Aided Dispatch Restricted Account created in Section 63H-7a-303.
1825 (60) The Unified Statewide 911 Emergency Service Account created in Section
1826 63H-7a-304.
1827 (61) The Utah Statewide Radio System Restricted Account created in Section
1828 63H-7a-403.
1829 (62) The Utah Capital Investment Restricted Account created in Section 63N-6-204.
1830 [
1831 [
1832 Commission, as provided under Section 63N-10-301.
1833 [
1834 inmates, as provided in Subsection 64-13e-104(2).
1835 [
1836 Fire, and State Lands, as provided in Section 65A-8-103.
1837 [
1838 created in Section 71-14-102.
1839 [
1840 72-16-204.
1841 [
1842 fines or bonds, as provided in Section 73-3-25.
1843 [
1844 Section 73-23-2.
1845 [
1846 Subsection 78A-6-203(1)(c).
1847 [
1848 [
1849 78B-6-141, 78B-6-144, and 78B-6-144.5.
1850 [
1851 Part 4, Utah Indigent Defense Commission.
1852 [
1853 created in Section 79-3-403.
1854 [
1855 State Park, and Green River State Park, as provided under Section 79-4-403.
1856 [
1857 disposal of buffalo, as provided under Section 79-4-1001.
1858 [
1859 Restricted Account created in Section 32B-2-308.
1860 Section 21. Section 63N-2-104 is amended to read:
1861 63N-2-104. Creation of economic development zones -- Tax credits -- Assignment
1862 of tax credit.
1863 (1) The office may create an economic development zone in the state if the following
1864 requirements are satisfied:
1865 (a) the area is zoned agricultural, commercial, industrial, manufacturing, business park,
1866 research park, or other appropriate business related use in a community-approved master plan
1867 that contemplates future growth;
1868 (b) the request to create a development zone has first been approved by an appropriate
1869 local government entity; and
1870 (c) local incentives have been or will be committed to be provided within the area in
1871 accordance with the community's approved incentive policy and application process.
1872 (2) (a) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
1873 the office shall make rules establishing the requirements for a business entity or local
1874 government entity to qualify for a tax credit for a new commercial project in a development
1875 zone under this part.
1876 (b) The office shall ensure that the requirements described in Subsection (2)(a) include
1877 the following:
1878 (i) the new commercial project is within the development zone;
1879 (ii) the new commercial project includes direct investment within the geographic
1880 boundaries of the development zone;
1881 (iii) the new commercial project brings new incremental jobs to Utah;
1882 (iv) the new commercial project includes the creation of high paying jobs in the state,
1883 significant capital investment in the state, or significant purchases from vendors, contractors, or
1884 service providers in the state, or a combination of these three economic factors;
1885 (v) the new commercial project generates new state revenues;
1886 (vi) a business entity, a local government entity, or a community reinvestment agency
1887 to which a local government entity assigns a tax credit under this section meets the
1888 requirements of Section 63N-2-105; and
1889 (vii) unless otherwise advisable in light of economic circumstances, the new
1890 commercial project relates to the industry clusters identified by the commission under Section
1891 63N-1a-202.
1892 (3) (a) [
1893 the GO Utah board, may enter into a written agreement with a business entity or local
1894 government entity authorizing a tax credit to the business entity or local government entity if
1895 the business entity or local government entity meets the requirements described in this section.
1896 (b) (i) With respect to a new commercial project, the office may authorize a tax credit
1897 to a business entity or a local government entity, but not both.
1898 (ii) In determining whether to authorize a tax credit with respect to a new commercial
1899 project to a business entity or a local government entity, the office shall authorize the tax credit
1900 in a manner that the office determines will result in providing the most effective incentive for
1901 the new commercial project.
1902 (c) (i) Except as provided in Subsection (3)(c)(ii)(A), for a new commercial project that
1903 is located within the boundary of a county of the first or second class, the office may not
1904 authorize or commit to authorize a tax credit that exceeds:
1905 (A) 50% of the new state revenues from the new commercial project in any given year;
1906 or
1907 (B) 30% of the new state revenues from the new commercial project over the lesser of
1908 the life of a new commercial project or 20 years.
1909 (ii) If the office authorizes or commits to authorize a tax credit for a new commercial
1910 project located within the boundary of:
1911 (A) a municipality with a population of 10,000 or less located within a county of the
1912 second class and that is experiencing economic hardship as determined by the office, the office
1913 shall authorize a tax credit of up to 50% of new state revenues from the new commercial
1914 project over the lesser of the life of the new commercial project or 20 years;
1915 (B) a county of the third class, the office shall authorize a tax credit of up to 50% of
1916 new state revenues from the new commercial project over the lesser of the life of the new
1917 commercial project or 20 years; and
1918 (C) a county of the fourth, fifth, or sixth class, the office shall authorize a tax credit of
1919 50% of new state revenues from the new commercial project over the lesser of the life of the
1920 new commercial project or 20 years.
1921 (iii) Notwithstanding any other provisions of this section, the office may not authorize
1922 a tax credit under this section for a new commercial project:
1923 (A) to a business entity that has claimed a High Cost Infrastructure Development Tax
1924 Credit described in Section 79-6-603 related to the same new commercial project; or
1925 (B) in an amount more than the amount of the capital investment in the new
1926 commercial project.
1927 (d) (i) A local government entity may by resolution assign a tax credit authorized by
1928 the office to a community reinvestment agency.
1929 (ii) The local government entity shall provide a copy of the resolution described in
1930 Subsection (3)(d)(i) to the office.
1931 (iii) If a local government entity assigns a tax credit to a community reinvestment
1932 agency, the written agreement described in Subsection (3)(a) shall:
1933 (A) be between the office, the local government entity, and the community
1934 reinvestment agency;
1935 (B) establish the obligations of the local government entity and the community
1936 reinvestment agency; and
1937 (C) establish the extent to which any of the local government entity's obligations are
1938 transferred to the community reinvestment agency.
1939 (iv) If a local government entity assigns a tax credit to a community reinvestment
1940 agency:
1941 (A) the community reinvestment agency shall retain records as described in Subsection
1942 (4)(d); and
1943 (B) a tax credit certificate issued in accordance with Section 63N-2-105 shall list the
1944 community reinvestment agency as the named applicant.
1945 (e) On or after July 1, 2022, the office may not:
1946 (i) enter into a new written agreement under Subsection (3)(a); or
1947 (ii) modify an existing written agreement described in Subsection (3)(a) to increase the
1948 maximum amount of the tax credit a business entity or local government agency may claim or
1949 to extend the length of time a business entity or local government agency may claim the credit.
1950 (4) The office shall ensure that the written agreement described in Subsection (3):
1951 (a) specifies the requirements that the business entity or local government entity shall
1952 meet to qualify for a tax credit under this part;
1953 (b) specifies the maximum amount of tax credit that the business entity or local
1954 government entity may be authorized for a taxable year and over the life of the new commercial
1955 project;
1956 (c) establishes the length of time the business entity or local government entity may
1957 claim a tax credit;
1958 (d) requires the business entity or local government entity to retain records supporting a
1959 claim for a tax credit for at least four years after the business entity or local government entity
1960 claims a tax credit under this part; and
1961 (e) requires the business entity or local government entity to submit to audits for
1962 verification of the tax credit claimed.
1963 (5) The office may attribute an incremental job or a high paying job to a new
1964 commercial project regardless of whether the job is performed in person, within the
1965 development zone or remotely from elsewhere in the state.
1966 Section 22. Section 63N-2-106 is amended to read:
1967 63N-2-106. Reports -- Posting monthly and annual reports.
1968 (1) The office shall include the following information in the annual written report
1969 described in Section 63N-1a-306:
1970 (a) the office's success in attracting new commercial projects to development zones
1971 under this part and the corresponding increase in new incremental jobs;
1972 (b) how many new incremental jobs and high paying jobs are employees of a company
1973 that received tax credits under this part, including the number of employees who work for a
1974 third-party rather than directly for a company, receiving the tax credits under this part;
1975 (c) the estimated amount of tax credit commitments made by the office and the period
1976 of time over which tax credits will be paid;
1977 (d) the economic impact on the state from new state revenues and the provision of tax
1978 credits under this part;
1979 (e) the estimated costs and economic benefits of the tax credit commitments made by
1980 the office;
1981 (f) the actual costs and economic benefits of the tax credit commitments made by the
1982 office; and
1983 (g) tax credit commitments made by the office, with the associated calculation.
1984 (2) Each month, the office shall post on [
1985 (a) the new tax credit commitments made by the office during the previous month; and
1986 (b) the estimated costs and economic benefits of those tax credit commitments.
1987 [
1988
1989 [
1990 [
1991 [
1992
1993 [
1994 [
1995 [
1996 [
1997 [
1998
1999
2000 [
2001 [
2002 [
2003 Section 23. Section 63N-2-213 is amended to read:
2004 63N-2-213. State tax credits.
2005 (1) The office shall certify a business entity's eligibility for a tax credit described in this
2006 section.
2007 (2) A business entity seeking to receive a tax credit as provided in this section shall
2008 provide the office with:
2009 (a) an application for a tax credit certificate in a form approved by the office, including
2010 a certification, by an officer of the business entity, of a signature on the application; and
2011 (b) documentation that demonstrates the business entity has met the requirements to
2012 receive the tax credit.
2013 (3) If, after review of an application and documentation provided by a business entity
2014 as described in Subsection (2), the office determines that the application and documentation are
2015 inadequate to provide a reasonable justification for authorizing the tax credit, the office shall:
2016 (a) deny the tax credit; or
2017 (b) inform the business entity that the application or documentation was inadequate
2018 and ask the business entity to submit additional documentation.
2019 (4) If, after review of an application and documentation provided by a business entity
2020 as described in Subsection (2), the office determines that the application and documentation
2021 provide reasonable justification for authorizing a tax credit, the office shall:
2022 (a) determine the amount of the tax credit to be granted to the business entity;
2023 (b) issue a tax credit certificate to the business entity; and
2024 (c) provide a digital record of the tax credit certificate to the State Tax Commission.
2025 (5) A business entity may not claim a tax credit under this section unless the business
2026 entity has a tax credit certificate issued by the office.
2027 (6) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
2028 office shall make rules describing:
2029 (a) the form and content of an application for a tax credit under this section;
2030 (b) the documentation requirements for a business entity to receive a tax credit
2031 certificate under this section; and
2032 (c) administration of the program, including relevant timelines and deadlines.
2033 (7) Subject to the limitations of Subsections (8) through (10), and if the requirements
2034 of this part are met, the following nonrefundable tax credits against a tax under Title 59,
2035 Chapter 7, Corporate Franchise and Income Taxes, or Title 59, Chapter 10, Individual Income
2036 Tax Act, are applicable in an enterprise zone:
2037 (a) a tax credit of $750 [
2038 employee position created within the enterprise zone[
2039 [
2040
2041 [
2042
2043 [
2044
2045
2046 [
2047
2048
2049 [
2050
2051
2052
2053 [
2054
2055
2056
2057 (i) the new full-time position pays at least 125% of:
2058 (A) the county average monthly nonagricultural payroll wage for the respective
2059 industry as determined by the Department of Workforce Services; or
2060 (B) if the county average monthly nonagricultural payroll wage is not available for the
2061 respective industry, the total average monthly nonagricultural payroll wage in the respective
2062 county where the enterprise zone is located; and
2063 (ii) (A) the new full-time position is filled by an employee who is insured under an
2064 employer-sponsored health insurance program; and
2065 (B) the employer pays at least 50% of the premium cost for the year in which the credit
2066 is claimed; and
2067 [
2068 2.5% of the first [
2069 depreciable property.
2070 (8) (a) Subject to the limitations of Subsection (8)(b), a business entity claiming a tax
2071 credit under [
2072 more than 30 full-time employee positions in a taxable year.
2073 (b) A business entity that received a tax credit for one or more new full-time employee
2074 positions under [
2075 year may claim a tax credit for a new full-time employee position in a subsequent taxable year
2076 under [
2077 (i) the business entity has created a new full-time position within the enterprise zone;
2078 and
2079 (ii) the total number of employee positions at the business entity at any point during the
2080 tax year for which the tax credit is being claimed is greater than the highest number of
2081 employee positions that existed at the business entity in the previous taxable year.
2082 (c) Construction jobs are not eligible for the tax [
2083
2084 (9) If the amount of a tax credit under this section exceeds a business entity's tax
2085 liability under this chapter for a taxable year, the business entity may carry forward the amount
2086 of the tax credit exceeding the liability for a period that does not exceed the next three taxable
2087 years.
2088 [
2089
2090
2091 (10) A business entity primarily engaged in retail trade or residential rental property or
2092 a public utilities business may not claim a tax credit under Subsection (7).
2093 (11) A business entity that has no employees:
2094 (a) may not claim [
2095 described in Subsection (7)(a); and
2096 (b) may claim [
2097 in Subsection (7)(b).
2098 (12) [
2099 this part for a taxable year during which the business entity has claimed the targeted business
2100 income tax credit available under Section 63N-2-304.
2101 [
2102
2103
2104 (13) (a) On or before November 30, 2018, and every three years after 2018, the
2105 Revenue and Taxation Interim Committee shall review the tax credits provided by this section
2106 and make recommendations concerning whether the tax credits should be continued, modified,
2107 or repealed.
2108 (b) In conducting the review required by Subsection (13)(a), the Revenue and Taxation
2109 Interim Committee shall:
2110 (i) schedule time on at least one committee agenda to conduct the review;
2111 (ii) invite state agencies, individuals, and organizations concerned with the credits
2112 under review to provide testimony;
2113 (iii) ensure that the recommendations described in this section include an evaluation of:
2114 (A) the cost of the tax credits to the state;
2115 (B) the purpose and effectiveness of the tax credits; and
2116 (C) the extent to which the state benefits from the tax credits; and
2117 (iv) undertake other review efforts as determined by the chairs of the Revenue and
2118 Taxation Interim Committee.
2119 Section 24. Section 63N-2-304 is amended to read:
2120 63N-2-304. Application for targeted business income tax credit.
2121 (1) (a) A business applicant may apply to the office for a targeted business income tax
2122 credit eligibility certificate under this part if the business applicant:
2123 (i) is located in:
2124 (A) an enterprise zone; and
2125 (B) a county with a population of less than 25,000;
2126 (ii) meets the requirements of Section 63N-2-212;
2127 (iii) provides a community investment project within the enterprise zone; and
2128 (iv) is not engaged in the following:
2129 (A) construction;
2130 (B) retail trade; or
2131 (C) public utility activities.
2132 (b) For a taxable year for which a business applicant claims a targeted business income
2133 tax credit available under this part, the business applicant may not claim or carry forward a tax
2134 credit available under Section [
2135 (2) (a) A business applicant seeking to claim a targeted business income tax credit
2136 under this part shall submit an application to the office by no later than June 1 of the taxable
2137 year in which the business applicant is seeking to claim the targeted business income tax credit.
2138 (b) The application described in Subsection (2)(a) shall include:
2139 (i) any documentation required by the office to demonstrate that the business applicant
2140 meets the requirements of Subsection (1);
2141 (ii) a plan developed by the business applicant that describes:
2142 (A) if the community investment project includes significant new employment, the
2143 projected number and anticipated wage level of the jobs that the business applicant plans to
2144 create as the basis for qualifying for a targeted business income tax credit;
2145 (B) if the community investment project includes significant new capital development,
2146 the capital development the business applicant plans to make as the basis for qualifying for a
2147 targeted business income tax credit;
2148 (C) how the business applicant's plan coordinates with the goals of the enterprise zone
2149 in which the business applicant is providing a community investment project;
2150 (D) how the business applicant's plan coordinates with the overall economic
2151 development goals of the county or municipality in which the business applicant is providing a
2152 community investment project;
2153 (E) any matching funds that will be used for the community investment project;
2154 (F) how any targeted business income tax credit incentives that were awarded in a
2155 previous year have been used for the community investment project by the business applicant;
2156 and
2157 (G) the requested amount of the targeted business income tax credit; and
2158 (iii) any additional information required by the office.
2159 (3) (a) The office shall:
2160 (i) evaluate an application filed under Subsection (2);
2161 (ii) determine whether the business applicant is potentially eligible for a targeted
2162 business income tax credit; and
2163 (iii) if the business applicant is potentially eligible for a targeted business income tax
2164 credit, determine performance benchmarks and the deadline for meeting those benchmarks that
2165 the business applicant must achieve before the office awards a targeted business income tax
2166 credit to the business applicant.
2167 (b) If the office determines that the business applicant is potentially eligible for a
2168 targeted business income tax credit, the office shall:
2169 (i) notify the business applicant that the business applicant is eligible for a targeted
2170 business income tax credit if the business applicant meets the performance benchmarks by the
2171 deadline as determined by the office as described in Subsection (3)(a)(iii);
2172 (ii) notify the business applicant of the potential amount of the targeted business
2173 income tax credit that may be awarded to the business applicant, which amount may be no
2174 more than $100,000 for the business applicant in a taxable year; and
2175 (iii) monitor a business applicant to ensure compliance with this section and to
2176 measure the business applicant's progress in meeting performance benchmarks.
2177 (c) If the business applicant provides evidence to the office, in a form prescribed by the
2178 office, that the business applicant has achieved the performance benchmarks by the deadline as
2179 determined by the office as described in Subsection (3)(a)(iii), the office shall:
2180 (i) certify that the business applicant is eligible for a targeted business income tax
2181 credit;
2182 (ii) issue a targeted business income tax credit eligibility certificate to the business
2183 applicant in accordance with:
2184 (A) for a business applicant that files a return under Title 59, Chapter 7, Corporate
2185 Franchise and Income Taxes, Section 59-7-624; or
2186 (B) for a business applicant that files a return under Title 59, Chapter 10, Individual
2187 Income Tax Act, Section 59-10-1112; and
2188 (iii) provide a duplicate copy of the targeted business income tax credit eligibility
2189 certificate to the State Tax Commission.
2190 (4) The total amount of the targeted business income tax credit eligibility certificates
2191 that the office issues under this part for all business applicants may not exceed $300,000 in any
2192 fiscal year.
2193 (5) (a) A business applicant shall retain the targeted business income tax credit
2194 eligibility certificate as issued under Subsection (3) for the same time period that a person is
2195 required to keep books and records under Section 59-1-1406.
2196 (b) The office may audit a business applicant to ensure:
2197 (i) eligibility for a targeted business income tax credit; and
2198 (ii) compliance with this section.
2199 Section 25. Section 79-6-401 is amended to read:
2200 79-6-401. Office of Energy Development -- Creation -- Director -- Purpose --
2201 Rulemaking regarding confidential information -- Fees -- Transition for employees.
2202 (1) There is created an Office of Energy Development in the Department of Natural
2203 Resources.
2204 (2) (a) The energy advisor shall serve as the director of the office or, on or before June
2205 30, 2029, appoint a director of the office.
2206 (b) The director:
2207 (i) shall, if the energy advisor appoints a director under Subsection (2)(a), report to the
2208 energy advisor; and
2209 (ii) may appoint staff as funding within existing budgets allows.
2210 (c) The office may consolidate energy staff and functions existing in the state energy
2211 program.
2212 (3) The purposes of the office are to:
2213 (a) serve as the primary resource for advancing energy and mineral development in the
2214 state;
2215 (b) implement:
2216 (i) the state energy policy under Section 79-6-301; and
2217 (ii) the governor's energy and mineral development goals and objectives;
2218 (c) advance energy education, outreach, and research, including the creation of
2219 elementary, higher education, and technical college energy education programs;
2220 (d) promote energy and mineral development workforce initiatives; and
2221 (e) support collaborative research initiatives targeted at Utah-specific energy and
2222 mineral development.
2223 (4) By following the procedures and requirements of Title 63J, Chapter 5, Federal
2224 Funds Procedures Act, the office may:
2225 (a) seek federal grants or loans;
2226 (b) seek to participate in federal programs; and
2227 (c) in accordance with applicable federal program guidelines, administer federally
2228 funded state energy programs.
2229 (5) The office shall perform the duties required by Sections 11-42a-106, 59-5-102,
2230 [
2231 High Cost Infrastructure Development Tax Credit Act.
2232 (6) (a) For purposes of administering this section, the office may make rules, by
2233 following Title 63G, Chapter 3, Utah Administrative Rulemaking Act, to maintain as
2234 confidential, and not as a public record, information that the office receives from any source.
2235 (b) The office shall maintain information the office receives from any source at the
2236 level of confidentiality assigned by the source.
2237 (7) The office may charge application, filing, and processing fees in amounts
2238 determined by the office in accordance with Section 63J-1-504 as dedicated credits for
2239 performing office duties described in this part.
2240 (8) (a) An employee of the office is an at-will employee.
2241 (b) For an employee of the office on July 1, 2021, the employee shall have the same
2242 salary and benefit options the employee had when the office was part of the office of the
2243 governor.
2244 Section 26. Repealer.
2245 This bill repeals:
2246 Section 19-13-110, Recycling market development zone credit.
2247 Section 59-7-601, Credit of interest income from state and federal securities.
2248 Section 59-7-609, Historic preservation credit.
2249 Section 59-7-610, Recycling market development zones tax credits.
2250 Section 59-7-614.5, Refundable motion picture tax credit.
2251 Section 59-7-614.7, Nonrefundable alternative energy development tax credit.
2252 Section 59-10-1007, Recycling market development zones tax credits.
2253 Section 59-10-1024, Nonrefundable tax credit for qualifying solar projects.
2254 Section 59-10-1025, Nonrefundable tax credit for investment in certain life science
2255 establishments.
2256 Section 59-10-1029, Nonrefundable alternative energy development tax credit.
2257 Section 59-10-1108, Refundable motion picture tax credit.
2258 Section 63N-2-801, Title.
2259 Section 63N-2-802, Definitions.
2260 Section 63N-2-803, Tax credits issued by office.
2261 Section 63N-2-804, Person may not claim or pass through a tax credit without tax
2262 credit certificate.
2263 Section 63N-2-805, Application process.
2264 Section 63N-2-806, Criteria for tax credits.
2265 Section 63N-2-807, Rulemaking authority.
2266 Section 63N-2-808, Agreements between office and tax credit applicant and life
2267 science establishment -- Tax credit certificate.
2268 Section 63N-2-809, Issuance of tax credit certificates.
2269 Section 63N-2-810, Reports on tax credit certificates.
2270 Section 63N-2-811, Reports of tax credits.
2271 Section 63N-8-101, Title -- Purpose.
2272 Section 63N-8-102, Definitions.
2273 Section 63N-8-103, Motion Picture Incentive Account created -- Cash rebate
2274 incentives -- Refundable tax credit incentives.
2275 Section 63N-8-104, Motion picture incentives -- Standards to qualify for an
2276 incentive -- Limitations -- Content of agreement between office and motion picture
2277 company or digital media company.
2278 Section 63N-8-105, Annual report.
2279 Section 79-6-501, Title.
2280 Section 79-6-502, Definitions.
2281 Section 79-6-503, Tax credits.
2282 Section 79-6-504, Qualifications for tax credit -- Procedure.
2283 Section 79-6-505, Report to the Legislature.
2284 Section 27. Effective date.
2285 (1) Except as provided in Subsections (2) and (3), this bill takes effect on January 1,
2286 2023.
2287 (2) The changes to the following sections take effect for a taxable year that begins on
2288 or after January 1, 2023:
2289 (a) Section 59-7-601;
2290 (b) Section 59-7-609;
2291 (c) Section 59-7-610;
2292 (d) Section 59-7-612;
2293 (e) Section 59-7-614;
2294 (f) Section 59-7-614.5;
2295 (g) Section 59-7-614.7;
2296 (h) Section 59-7-624;
2297 (i) Section 59-10-1002.2;
2298 (j) Section 59-10-1006;
2299 (k) Section 59-10-1007;
2300 (l) Section 59-10-1012;
2301 (m) Section 59-10-1014;
2302 (n) Section 59-10-1024;
2303 (o) Section 59-10-1025;
2304 (p) Section 59-10-1029;
2305 (q) Section 59-10-1106;
2306 (r) Section 59-10-1108;
2307 (s) Section 59-10-1112; and
2308 (t) Section 63N-2-213.
2309 (3) The changes to Section 63N-2-104 take effect on May 4, 2022.