1     
INCENTIVES AMENDMENTS

2     
2022 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Kay J. Christofferson

5     
Senate Sponsor: ____________

6     

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38          ▸     modifies reporting and study requirements related to repealed income tax credits;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          [(7) "Tax incentive" means a nonrefundable tax credit available under Section 59-7-610
138     or 59-10-1007.]
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 [if no businesses utilize the tax incentives during any calendar year].
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[(5)](4).
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          [(i) Section 59-7-601;]
507          [(ii)] (i) Section 59-7-607;
508          [(iii)] (ii) Section 59-7-612; and
509          [(iv)] (iii) Section 59-7-614.1[; and].
510          [(v) Section 59-7-614.5.]
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          [(i) Section 59-7-609;]
515          [(ii) Section 59-7-614.2;]
516          [(iii)] (i) Section 59-7-614.10;
517          [(iv)] (ii) Section 59-7-619; and
518          [(v) Section 59-7-620; and]
519          [(vi)] (iii) Section 59-7-624.
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 [the
522     following sections:] Section 59-7-614.
523          [(i) Section 59-7-610;]

524          [(ii) Section 59-7-614; and]
525          [(iii) Section 59-7-614.7.]
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          [(1)] (2) (a) A taxpayer meeting the requirements of this section may claim the
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 [(4);] (5); and
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 [(4); and] (5).
562          [(iii) a tax credit equal to 7.5% of the taxpayer's qualified research expenses for the
563     current taxable year.]
564          (b) Subject to Subsection [(5)] (6), a taxpayer may claim a tax credit under:
565          (i) Subsection [(1)(a)(i) or (1)(a)(iii)] (2)(a)(i), for the taxable year for which the
566     taxpayer incurs the qualified research expenses; or
567          (ii) Subsection [(1)] (2)(a)(ii), for the taxable year for which the taxpayer makes the
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[.]; and
572          (ii) do not terminate if a credit terminates under Section 41, Internal Revenue Code.
573          [(2)] (3) For purposes of claiming a tax credit under this section, a unitary group as
574     defined in Section 59-7-101 is considered to be one taxpayer.
575          [(3)] (4) Except as specifically provided for in this section[: (a)], the tax credits
576     authorized under Subsection [(1)] (2) shall be calculated as provided in Section 41, Internal
577     Revenue Code[; and].
578          [(b) the definitions provided in Section 41, Internal Revenue Code, apply in calculating
579     the tax credits authorized under Subsection (1).]
580          [(4)] (5) For purposes of this section[:(a)] the base amount shall be calculated as
581     provided in Sections 41(c) and 41(h), Internal Revenue Code, except that:
582          [(i)] (a) the base amount does not include the calculation of the alternative incremental
583     credit provided for in Section 41(c)(4), Internal Revenue Code;
584          [(ii)] (b) a taxpayer's gross receipts include only those gross receipts attributable to
585     sources within this state as provided in Part 3, Allocation and Apportionment of Income - Utah

586     UDITPA Provisions; and
587          [(iii)] (c) notwithstanding Section 41(c), Internal Revenue Code, for purposes of
588     calculating the base amount, a taxpayer:
589          [(A)] (i) may elect to be treated as a start-up company as provided in Section
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          [(B)] (ii) may not revoke an election to be treated as a start-up company under
593     Subsection [(4)(a)(iii)(A);] (5)(c)(i).
594          [(b) "basic research" is as defined in Section 41(e)(7), Internal Revenue Code, except
595     that the term includes only basic research conducted in this state;]
596          [(c) "qualified research" is as defined in Section 41(d), Internal Revenue Code, except
597     that the term includes only qualified research conducted in this state;]
598          [(d) "qualified research expenses" is as defined and calculated in Section 41(b),
599     Internal Revenue Code, except that the term includes only:]
600          [(i) in-house research expenses incurred in this state; and]
601          [(ii) contract research expenses incurred in this state; and]
602          [(e) a tax credit provided for in this section is not terminated if a credit terminates
603     under Section 41, Internal Revenue Code.]
604          [(5) (a)] (6) If the amount of a tax credit claimed by a taxpayer under Subsection
605     [(1)(a)(i) or (ii)] (2) exceeds the taxpayer's tax liability under this chapter for a taxable year, the
606     [amount of the tax credit exceeding the tax liability] taxpayer:
607          [(i) may be carried forward]
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          [(ii)] (b) may not [be carried back] carry back the amount of the tax credit that exceeds
611     the taxpayer's tax liability to a taxable year preceding the current taxable year.
612          [(b) A taxpayer may not carry forward the tax credit allowed by Subsection (1)(a)(iii).]
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          [(6)] (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
619     Act, the commission may make rules [for purposes of this section] prescribing a certification
620     process for qualified organizations to ensure that amounts paid to the qualified organizations
621     are for basic research conducted in this state.
622          [(7)] (8) If a provision of Section 41, Internal Revenue Code, is modified or repealed,
623     the commission shall provide an electronic report of the modification or repeal to the [Revenue
624     and Taxation Interim Committee] committee within 60 days after the day on which the
625     modification or repeal becomes effective.
626          [(8)] (9) (a) The [Revenue and Taxation Interim Committee] committee shall review
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 [(7)] (8) a modification or repeal of a
629     provision of Section 41, Internal Revenue Code.
630          (b) The review described in Subsection [(8)] (9)(a) is in addition to the review required
631     by Section 59-7-159.
632          (c) Notwithstanding Subsection [(8)] (9)(a), the Revenue and Taxation Interim
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 [Revenue and Taxation Interim Committee] committee shall address in a
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 [Revenue and Taxation Interim Committee reviews the tax credits provided
646     for in this section] committee conducts a review under this Subsection (9), the committee shall
647     issue a report of the [Revenue and Taxation Interim Committee's] committee's findings.

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          [(q) "Residential energy system" means the following used to supply energy to or for a
726     residential unit:]
727          [(i) an active solar system;]
728          [(ii) a biomass system;]
729          [(iii) a direct use geothermal system;]
730          [(iv) a geothermal heat pump system;]
731          [(v) a hydroenergy system;]
732          [(vi) a passive solar system; or]
733          [(vii) a wind system.]
734          [(r) (i) "Residential unit" means a house, condominium, apartment, or similar dwelling
735     unit that:]
736          [(A) is located in the state; and]
737          [(B) serves as a dwelling for a person, group of persons, or a family.]
738          [(ii) "Residential unit" does not include property subject to a fee under:]
739          [(A) Section 59-2-405;]
740          [(B) Section 59-2-405.1;]

741          [(C) Section 59-2-405.2;]
742          [(D) Section 59-2-405.3; or]
743          [(E) Section 72-10-110.5.]
744          [(s)] (q) "Wind system" means a system of apparatus and equipment that is capable of:
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          [(3) (a) Subject to the other provisions of this Subsection (3), a taxpayer may claim a
751     nonrefundable tax credit under this Subsection (3) with respect to a residential unit the taxpayer
752     owns or uses if:]
753          [(i) the taxpayer:]
754          [(A) purchases and completes a residential energy system to supply all or part of the
755     energy required for the residential unit; or]
756          [(B) participates in the financing of a residential energy system to supply all or part of
757     the energy required for the residential unit; and]
758          [(ii) the taxpayer obtains a written certification from the office in accordance with
759     Subsection (8).]
760          [(b) (i) Subject to Subsections (3)(b)(ii) through (iv) and, as applicable, Subsection
761     (3)(c) or (d), the tax credit is equal to 25% of the reasonable costs of each residential energy
762     system installed with respect to each residential unit the taxpayer owns or uses.]
763          [(ii) A tax credit under this Subsection (3) may include installation costs.]
764          [(iii) A taxpayer may claim a tax credit under this Subsection (3) for the taxable year in
765     which the residential energy system is completed and placed in service.]
766          [(iv) If the amount of a tax credit under this Subsection (3) exceeds a taxpayer's tax
767     liability under this chapter for a taxable year, the taxpayer may carry forward the amount of the
768     tax credit exceeding the liability for a period that does not exceed the next four taxable years.]
769          [(c) The total amount of tax credit a taxpayer may claim under this Subsection (3) for a
770     residential energy system, other than a photovoltaic system, may not exceed $2,000 per
771     residential unit.]

772          [(d) The total amount of tax credit a taxpayer may claim under this Subsection (3) for a
773     photovoltaic system may not exceed:]
774          [(i) for a system installed on or after January 1, 2018, but on or before December 31,
775     2020, $1,600;]
776          [(ii) for a system installed on or after January 1, 2021, but on or before December 31,
777     2021, $1,200;]
778          [(iii) for a system installed on or after January 1, 2022, but on or before December 31,
779     2022, $800;]
780          [(iv) for a system installed on or after January 1, 2023, but on or before December 31,
781     2023, $400; and]
782          [(v) for a system installed on or after January 1, 2024, $0.]
783          [(e) If a taxpayer sells a residential unit to another person before the taxpayer claims
784     the tax credit under this Subsection (3):]
785          [(i) the taxpayer may assign the tax credit to the other person; and]
786          [(ii) (A) if the other person files a return under this chapter, the other person may claim
787     the tax credit under this section as if the other person had met the requirements of this section
788     to claim the tax credit; or]
789          [(B) if the other person files a return under Chapter 10, Individual Income Tax Act, the
790     other person may claim the tax credit under Section 59-10-1014 as if the other person had met
791     the requirements of Section 59-10-1014 to claim the tax credit.]
792          [(4)] (3) (a) Subject to the other provisions of this Subsection [(4)] (3), a taxpayer may
793     claim a refundable tax credit under this Subsection [(4)] (3) with respect to a commercial
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 [(7)]
806     (6) for hydrogen production using electricity for which the taxpayer claims a tax credit under
807     this Subsection [(4)] (3); and
808          (v) the taxpayer obtains a written certification from the office in accordance with
809     Subsection [(8)] (7).
810          (b) (i) Subject to Subsections [(4)] (3)(b)(ii) through (iv), the tax credit is equal to [10]
811     5% of the reasonable costs of the commercial energy system.
812          (ii) A tax credit under this Subsection [(4)] (3) may include installation costs.
813          (iii) A taxpayer is eligible to claim a tax credit under this Subsection [(4)] (3) for the
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 [(4)] (3)
816     may not exceed [$50,000] $25,000 per commercial unit.
817          (c) (i) Subject to Subsections [(4)] (3)(c)(ii) and (iii), a taxpayer that is a lessee of a
818     commercial energy system installed on a commercial unit may claim a tax credit under this
819     Subsection [(4)] (3) if the taxpayer confirms that the lessor irrevocably elects not to claim the
820     tax credit.
821          (ii) A taxpayer described in Subsection [(4)] (3)(c)(i) may claim as a tax credit under
822     this Subsection [(4)] (3) only the principal recovery portion of the lease payments.
823          (iii) A taxpayer described in Subsection [(4)] (3)(c)(i) may claim a tax credit under this
824     Subsection [(4)] (3) for a period that does not exceed seven taxable years after the day on
825     which the lease begins, as stated in the lease agreement.
826          [(5)] (4) (a) Subject to the other provisions of this Subsection [(5)] (4), a taxpayer may
827     claim a refundable tax credit under this Subsection [(5)] (4) with respect to a commercial
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 [(7)]
836     (6) for hydrogen production using electricity for which the taxpayer claims a tax credit under
837     this Subsection [(5)] (4); and
838          (iv) the taxpayer obtains a written certification from the office in accordance with
839     Subsection [(8)] (7).
840          (b) (i) Subject to Subsection [(5)] (4)(b)(ii), a tax credit under this Subsection [(5)] (4)
841     is equal to the product of:
842          (A) [0.35 cents] $0.175; and
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 [(5)] (4) for
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 [(5)] (4) if the taxpayer confirms that the
849     lessor irrevocably elects not to claim the tax credit.
850          [(6)] (5) (a) Subject to the other provisions of this Subsection [(6)] (5), a taxpayer may
851     claim a refundable tax credit as provided in this Subsection [(6)] (5) if:
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 [(4)] (3) and has not
859     claimed and will not claim a tax credit under Subsection [(7)] (6) for hydrogen production
860     using electricity for which a taxpayer claims a tax credit under this Subsection [(6)] (5); and
861          (iv) the taxpayer obtains a written certification from the office in accordance with
862     Subsection [(8)] (7).
863          (b) (i) Subject to Subsection [(6)] (5)(b)(ii), a tax credit under this Subsection [(6)] (5)
864     is equal to the product of:

865          (A) [0.35 cents] $0.175; and
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 [(6)] (5) for
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 [(6)] (5) if the taxpayer confirms that the
872     lessor irrevocably elects not to claim the tax credit.
873          [(7)] (6) (a) A taxpayer may claim a refundable tax credit as provided in this
874     Subsection [(7)] (6) if:
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 [(4),
881     (5), or (6)] (3), (4), or (5) or Section 59-7-626 for electricity or hydrogen used to meet the
882     requirements of this Subsection [(7)] (6); and
883          (v) the taxpayer obtains a written certification from the office in accordance with
884     Subsection [(8)] (7).
885          (b) (i) Subject to Subsections [(7)] (6)(b)(ii) and (iii), a tax credit under this Subsection
886     [(7)] (6) is equal to the product of:
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 [(7)] (6) for more
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 [(7)] (6) for
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          [(8)] (7) (a) Before a taxpayer may claim a tax credit under this section, the taxpayer
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) [the residential energy system,] the commercial energy system[,] or the hydrogen
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 [the residential
903     energy system,] the commercial energy system[,] or the hydrogen production system uses the
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 [a residential energy system,] a commercial energy
908     system[,] or a hydrogen production system meets the requirements of Subsection [(8)]
909     (7)(b)(ii); and
910          (ii) for purposes of a tax credit under Subsection (3)[, (4), or (6)], establishing the
911     reasonable costs of [a residential energy system or] a commercial energy system, as an amount
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          [(9)] (8) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
923     Act, the commission may make rules to address the certification of a tax credit under this
924     section.
925          [(10)] (9) A tax credit under this section is in addition to any tax credits provided under
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          [(6) (a) In accordance with Section 59-7-159, the Revenue and Taxation Interim
959     Committee shall study the tax credit allowed by this section and make recommendations
960     concerning whether the tax credit should be continued, modified, or repealed.]
961          [(b) Except as provided in Subsection (6)(c), for purposes of the study required by this
962     Subsection (6), the office shall provide the following information, if available to the office, to
963     the Revenue and Taxation Interim Committee by electronic means:]
964          [(i) the amount of tax credit that the office grants to each business entity, local
965     government entity, or community reinvestment agency for each calendar year;]
966          [(ii) the criteria that the office uses in granting a tax credit;]
967          [(iii) (A) for a business entity, the new state revenue generated by the business entity
968     for the calendar year; or]
969          [(B) for a local government entity, regardless of whether the local government entity
970     assigns the tax credit in accordance with Section 63N-2-104, the new state revenue generated
971     as a result of a new commercial project within the local government entity for each calendar
972     year;]
973          [(iv) estimates for each of the next three calendar years of the following:]
974          [(A) the amount of tax credits that the office will grant;]
975          [(B) the amount of new state revenue that will be generated; and]
976          [(C) the number of new incremental jobs within the state that will be generated;]
977          [(v) the information contained in the office's latest report under Section 63N-2-106;
978     and]
979          [(vi) any other information that the Revenue and Taxation Interim Committee
980     requests.]
981          [(c) (i) In providing the information described in Subsection (6)(b), the office shall
982     redact information that identifies a recipient of a tax credit under this section.]
983          [(ii) If, notwithstanding the redactions made under Subsection (6)(c)(i), reporting the
984     information described in Subsection (6)(b) might disclose the identity of a recipient of a tax
985     credit, the office may file a request with the Revenue and Taxation Interim Committee to
986     provide the information described in Subsection (6)(b) in the aggregate for all entities and
987     agencies that receive the tax credit under this section.]
988          [(d) The Revenue and Taxation Interim Committee shall ensure that the

989     recommendations described in Subsection (6)(a) include an evaluation of:]
990          [(i) the cost of the tax credit to the state;]
991          [(ii) the purpose and effectiveness of the tax credit; and]
992          [(iii) the extent to which the state benefits from the tax credit.]
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 [Section 59-7-610, Section 59-10-1007, or] Title 63N, Chapter 2, Part 2, Enterprise Zone
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) [and except as provided in Subsection (3)], the
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          [(3) This section does not apply to a tax credit under Section 59-7-609.]

1020          [(4)] (3) The commission shall, on or before the November interim meeting of the year
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          [(5)] (4) (a) Within a 30-day period after making the report required by Subsection
1028     [(4)] (3), the commission shall publish a list in accordance with Subsection [(5)] (4)(b) stating
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 [(5)] (4)(a)
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 [(5)] (4).
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          [(iv) Section 59-10-1025;]
1073          [(v)] (iv) Section 59-10-1027;
1074          [(vi)] (v) Section 59-10-1031;
1075          [(vii)] (vi) Section 59-10-1032;
1076          [(viii)] (vii) Section 59-10-1035;
1077          [(ix)] (viii) Section 59-10-1104; and
1078          [(x)] (ix) Section 59-10-1105[; and].
1079          [(xi) Section 59-10-1108.]
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          [(ix) Section 59-10-1107; and]
1092          [(x)] (ix) Section 59-10-1112.
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          [(i) Section 59-10-1007;]
1097          [(ii)] (i) Section 59-10-1014;
1098          [(iii)] (ii) Section 59-10-1017;
1099          [(iv)] (iii) Section 59-10-1018;
1100          [(v)] (iv) Section 59-10-1019;
1101          [(vi) Section 59-10-1024;]
1102          [(vii) Section 59-10-1029;]
1103          [(viii)] (v) Section 59-10-1036;
1104          [(ix)] (vi) Section 59-10-1106; and
1105          [(x)] (vii) Section 59-10-1111.
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     [59-10-1024,] 59-10-1028, 59-10-1042, or 59-10-1043 may only claim an apportioned amount
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, [59-10-1024,] or 59-10-1028 may only claim an
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          [(1) (a) For tax years beginning January 1, 1993, and thereafter, there is allowed to a
1140     claimant, estate, or trust, as a nonrefundable tax credit against the income tax due, an amount
1141     equal to 20% of qualified rehabilitation expenditures, costing more than $10,000, incurred in
1142     connection with any residential certified historic building. When qualifying expenditures of
1143     more than $10,000 are incurred, the tax credit allowed by this section shall apply to the full

1144     amount of expenditures.]
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) [All rehabilitation work to which the tax credit may be applied shall be approved
1171     by the State Historic Preservation Office prior to completion of the rehabilitation project] The
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 [in order] to preserve the historical
1176     qualities of the building.
1177          [(c) Any amount of tax credit remaining may be carried forward to each of the five
1178     taxable years following the qualified expenditures.]
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     [promulgate] make rules to implement this section.
1184          [(2) As used in this section:]
1185          [(a) "Certified historic building" means a building that is listed on the National
1186     Register of Historic Places within three years of taking the credit under this section or that is
1187     located in a National Register Historic District and the building has been designated by the
1188     Division of State History as being of significance to the district.]
1189          [(b) (i) "Qualified rehabilitation expenditures" means any amount properly chargeable
1190     to the rehabilitation and restoration of the physical elements of the building, including the
1191     historic decorative elements, and the upgrading of the structural, mechanical, electrical, and
1192     plumbing systems to applicable codes.]
1193          [(ii) "Qualified rehabilitation expenditures" does not include expenditures related to:]
1194          [(A) a claimant's, estate's, or trust's personal labor;]
1195          [(B) cost of acquisition of the property;]
1196          [(C) any expenditure attributable to the enlargement of an existing building;]
1197          [(D) rehabilitation of a certified historic building without the approval required in
1198     Subsection (1)(b); or]
1199          [(E) any expenditure attributable to landscaping and other site features, outbuildings,
1200     garages, and related features.]
1201          [(c) "Residential" means a building used for residential use, either owner occupied or
1202     income producing.]
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          [(1)] (2) (a) A claimant, estate, or trust meeting the requirements of this section may
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 [(3)] (4); and
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 [(3); and] (4).
1229          [(iii) a tax credit equal to 7.5% of the claimant's, estate's, or trust's qualified research
1230     expenses for the current taxable year.]
1231          (b) Subject to Subsection [(4)] (5), a claimant, estate, or trust may claim a tax credit
1232     under:
1233          (i) Subsection [(1)(a)(i) or (1)(a)(iii)] (2)(a)(i), for the taxable year for which the
1234     claimant, estate, or trust incurs the qualified research expenses; or
1235          (ii) Subsection [(1)] (2)(a)(ii), for the taxable year for which the claimant, estate, or
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[.]; and
1240          (ii) do not terminate if a credit terminates under Section 41, Internal Revenue Code.
1241          [(2)] (3) Except as specifically provided for in this section[: (a)], the tax credits
1242     authorized under Subsection [(1)] (2) shall be calculated as provided in Section 41, Internal
1243     Revenue Code[; and].
1244          [(b) the definitions provided in Section 41, Internal Revenue Code, apply in calculating
1245     the tax credits authorized under Subsection (1).]
1246          [(3)] (4) For purposes of this section[: (a)], the base amount shall be calculated as
1247     provided in Sections 41(c) and 41(h), Internal Revenue Code, except that:
1248          [(i)] (a) the base amount does not include the calculation of the alternative incremental
1249     credit provided for in Section 41(c)(4), Internal Revenue Code;
1250          [(ii)] (b) a claimant's, estate's, or trust's gross receipts include only those gross receipts
1251     attributable to sources within this state as provided in Section 59-10-118; and
1252          [(iii)] (c) notwithstanding Section 41(c), Internal Revenue Code, for purposes of
1253     calculating the base amount, a claimant, estate, or trust:
1254          [(A)] (i) may elect to be treated as a start-up company as provided in Section
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          [(B)] (ii) may not revoke an election to be treated as a start-up company under
1258     Subsection [(3)(a)(iii)(A);] (4)(c)(i).
1259          [(b) "basic research" is as defined in Section 41(e)(7), Internal Revenue Code, except
1260     that the term includes only basic research conducted in this state;]
1261          [(c) "qualified research" is as defined in Section 41(d), Internal Revenue Code, except
1262     that the term includes only qualified research conducted in this state;]
1263          [(d) "qualified research expenses" is as defined and calculated in Section 41(b),
1264     Internal Revenue Code, except that the term includes only:]
1265          [(i) in-house research expenses incurred in this state; and]
1266          [(ii) contract research expenses incurred in this state; and]
1267          [(e) a tax credit provided for in this section is not terminated if a credit terminates

1268     under Section 41, Internal Revenue Code.]
1269          [(4) (a)] (5) If the amount of a tax credit claimed by a claimant, estate, or trust under
1270     Subsection [(1)] (2)(a)(i) or (ii) exceeds the claimant's, estate's, or trust's tax liability under this
1271     chapter for a taxable year, the [amount of the tax credit exceeding the tax liability] claimant,
1272     estate, or trust:
1273          [(i)] (a) may [be carried forward] carry forward the amount of the tax credit that
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          [(ii)] (b) may not [be carried back] carry back the amount of the tax credit that exceeds
1277     the claimant's, estate's, or trust's tax liability to a taxable year preceding the current taxable
1278     year.
1279          [(b) A claimant, estate, or trust may not carry forward the tax credit allowed by
1280     Subsection (1)(a)(iii).]
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          [(5)] (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
1288     Act, the commission may make rules [for purposes of this section] prescribing a certification
1289     process for qualified organizations to ensure that amounts paid to the qualified organizations
1290     are for basic research conducted in this state.
1291          [(6)] (7) If a provision of Section 41, Internal Revenue Code, is modified or repealed,
1292     the commission shall report the modification or repeal by electronic means to the [Revenue and
1293     Taxation Interim Committee] committee within 60 days after the day on which the
1294     modification or repeal becomes effective.
1295          [(7)] (8) (a) The [Revenue and Taxation Interim Committee] committee shall review
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 [(6)] (7) a modification or repeal of a
1298     provision of Section 41, Internal Revenue Code.

1299          (b) The review described in Subsection [(7)] (8)(a) is in addition to the review required
1300     by Section 59-10-137.
1301          (c) Notwithstanding Subsection [(7)] (8)(a), the [Revenue and Taxation Interim
1302     Committee] committee is not required to review the tax credits provided for in this section if
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 [Revenue and Taxation Interim Committee] committee shall address in a
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 [Revenue and Taxation Interim Committee reviews the tax credits provided
1315     for in this section,] committee conducts a review under this Subsection (8), the committee shall
1316     issue a report of the [Revenue and Taxation Interim Committee's] committee's findings.
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) [For a taxable year beginning on or after January 1, 2007, a] A claimant, estate, or
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          [(7) A purchaser of one or more solar units that claims a tax credit under Section
1484     59-10-1024 for the purchase of the one or more solar units may not claim a tax credit under this

1485     section for that purchase.]
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 [10] 5%
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 [$50,000] $25,000 per commercial unit.
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) [0.35 cents] $0.175; and
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) [0.35 cents] $0.175; and
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          [(10) A purchaser of one or more solar units that claims a tax credit under Section
1655     59-10-1024 for the purchase of the one or more solar units may not claim a tax credit under this
1656     section for that purchase.]
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          [(5) (a) In accordance with Section 59-10-137, the Revenue and Taxation Interim
1677     Committee shall study the tax credit allowed by this section and make recommendations
1678     concerning whether the tax credit should be continued, modified, or repealed.]
1679          [(b) Except as provided in Subsection (5)(c), for purposes of the study required by this
1680     Subsection (5), the office shall provide the following information, if available to the office, to
1681     the Revenue and Taxation Interim Committee by electronic means:]
1682          [(i) the amount of tax credit the office grants to each taxpayer for each calendar year;]
1683          [(ii) the criteria the office uses in granting a tax credit;]
1684          [(iii) the new state revenue generated by each taxpayer for each calendar year;]
1685          [(iv) estimates for each of the next three calendar years of the following:]
1686          [(A) the amount of tax credits that the office will grant;]
1687          [(B) the amount of new state revenue that will be generated; and]
1688          [(C) the number of new incremental jobs within the state that will be generated;]
1689          [(v) the information contained in the office's latest report under Section 63N-2-106;
1690     and]
1691          [(vi) any other information that the Revenue and Taxation Interim Committee
1692     requests.]
1693          [(c) (i) In providing the information described in Subsection (5)(b), the office shall
1694     redact information that identifies a recipient of a tax credit under this section.]
1695          [(ii) If, notwithstanding the redactions made under Subsection (5)(c)(i), reporting the
1696     information described in Subsection (5)(b) might disclose the identity of a recipient of a tax
1697     credit, the office may file a request with the Revenue and Taxation Interim Committee to
1698     provide the information described in Subsection (5)(b) in the aggregate for all taxpayers that
1699     receive the tax credit under this section.]
1700          [(d) The Revenue and Taxation Interim Committee shall ensure that the
1701     recommendations described in Subsection (5)(a) include an evaluation of:]

1702          [(i) the cost of the tax credit to the state;]
1703          [(ii) the purpose and effectiveness of the tax credit; and]
1704          [(iii) the extent to which the state benefits from the tax credit.]
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 [Section 59-7-610, Section 59-10-1007, or] Title 63N, Chapter 2, Part 2, Enterprise Zone
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          [(63) The Motion Picture Incentive Account created in Section 63N-8-103.]
1831          [(64)] (63) Certain money payable for expenses of the Pete Suazo Utah Athletic
1832     Commission, as provided under Section 63N-10-301.
1833          [(65)] (64) Funds collected by the housing of state probationary inmates or state parole
1834     inmates, as provided in Subsection 64-13e-104(2).
1835          [(66)] (65) Certain forestry and fire control funds utilized by the Division of Forestry,
1836     Fire, and State Lands, as provided in Section 65A-8-103.
1837          [(67)] (66) The Transportation of Veterans to Memorials Support Restricted Account
1838     created in Section 71-14-102.
1839          [(68)] (67) The Amusement Ride Safety Restricted Account, as provided in Section
1840     72-16-204.
1841          [(69)] (68) Certain funds received by the Office of the State Engineer for well drilling
1842     fines or bonds, as provided in Section 73-3-25.
1843          [(70)] (69) The Water Resources Conservation and Development Fund, as provided in
1844     Section 73-23-2.
1845          [(71)] (70) Funds donated or paid to a juvenile court by private sources, as provided in
1846     Subsection 78A-6-203(1)(c).
1847          [(72)] (71) Fees for certificate of admission created under Section 78A-9-102.
1848          [(73)] (72) Funds collected for adoption document access as provided in Sections
1849     78B-6-141, 78B-6-144, and 78B-6-144.5.
1850          [(74)] (73) Funds collected for indigent defense as provided in Title 78B, Chapter 22,
1851     Part 4, Utah Indigent Defense Commission.
1852          [(75)] (74) The Utah Geological Survey Oil, Gas, and Mining Restricted Account
1853     created in Section 79-3-403.
1854          [(76)] (75) Revenue for golf user fees at the Wasatch Mountain State Park, Palisades
1855     State Park, and Green River State Park, as provided under Section 79-4-403.
1856          [(77)] (76) Certain funds received by the Division of State Parks from the sale or

1857     disposal of buffalo, as provided under Section 79-4-1001.
1858          [(78)] (77) The Drinking While Pregnant Prevention Media and Education Campaign
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) [The] Except as provided in Subsection (3)(e), the office, after consultation with
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 [its] the office's website and on a state website:
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          [(3) (a) On or before November 1, 2014, and every three years after November 1, 2014,
1988     the office shall:]
1989          [(i) conduct an audit of the tax credits allowed under Section 63N-2-105;]
1990          [(ii) study the tax credits allowed under Section 63N-2-105; and]
1991          [(iii) make recommendations concerning whether the tax credits should be continued,
1992     modified, or repealed.]
1993          [(b) The audit shall include an evaluation of:]
1994          [(i) the cost of the tax credits;]
1995          [(ii) the purposes and effectiveness of the tax credits;]
1996          [(iii) the extent to which the state benefits from the tax credits; and]
1997          [(iv) the state's return on investment under this part measured by new state revenues,
1998     compared with the costs of tax credits provided and GOED's expenses in administering this
1999     part.]
2000          [(c) The office shall provide the results of the audit described in this Subsection (3):]
2001          [(i) in the written annual report described in Subsection (1); and]
2002          [(ii) as part of the reviews described in Sections 59-7-159 and 59-10-137.]
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 [may be claimed by a business entity] for each new full-time
2038     employee position created within the enterprise zone[;] if:
2039          [(b) an additional $500 tax credit may be claimed if the new full-time employee
2040     position created within the enterprise zone pays at least 125% of:]
2041          [(i) the county average monthly nonagricultural payroll wage for the respective
2042     industry as determined by the Department of Workforce Services; or]

2043          [(ii) if the county average monthly nonagricultural payroll wage is not available for the
2044     respective industry, the total average monthly nonagricultural payroll wage in the respective
2045     county where the enterprise zone is located;]
2046          [(c) an additional tax credit of $750 may be claimed if the new full-time employee
2047     position created within the enterprise zone is in a business entity that adds value to agricultural
2048     commodities through manufacturing or processing;]
2049          [(d) an additional tax credit of $200 may be claimed for each new full-time employee
2050     position created within the enterprise zone that is filled by an employee who is insured under
2051     an employer-sponsored health insurance program if the employer pays at least 50% of the
2052     premium cost for the year for which the credit is claimed;]
2053          [(e) a tax credit of 25% of the first $200,000 spent on rehabilitating a building in the
2054     enterprise zone that has been vacant for two years or more, including that the building has had
2055     or contained no occupants, tenants, furniture, or personal property for two years or more, in the
2056     time period immediately before the rehabilitation; and]
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          [(f)] (b) an annual investment tax credit [may be claimed] in an amount equal to [5]
2068     2.5% of the first [$750,000] $500,000 qualifying investment in plant, equipment, or other
2069     depreciable property.
2070          (8) (a) Subject to the limitations of Subsection (8)(b), a business entity claiming a tax
2071     credit under [Subsections (7)(a) through (d)] Subsection (7)(a) may claim the tax credit for no
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 [Subsections (7)(a) through (d)] Subsection (7)(a) in a [prior] previous taxable
2075     year may claim a tax credit for a new full-time employee position in a subsequent taxable year
2076     under [Subsections (7)(a) through (d)] Subsection (7)(a) if:
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 [credits under Subsections (7)(a)
2083     through (d)] credit described in Subsection (7)(a).
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          [(10) Tax credits under Subsections (7)(a) through (f) may not be claimed by a
2089     business entity primarily engaged in retail trade, residential rental property, or by a public
2090     utilities business.]
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 [tax credits under Subsections (7)(a) through (d)] a tax credit
2095     described in Subsection (7)(a); and
2096          (b) may claim [tax credits under Subsections (7)(e) through (f)] a tax credit described
2097     in Subsection (7)(b).
2098          (12) [(a)] A business entity may not claim or carry forward a tax credit available under
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          [(b) A business entity may not claim or carry forward a tax credit available under this
2102     section for a taxable year during which the business entity claims or carries forward a tax credit
2103     available under Section 59-7-610 or 59-10-1007.]
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 [59-7-610, 59-10-1007, or] 63N-2-213.
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     [59-7-614.7, 59-10-1029, Part 5, Alternative Energy Development Tax Credit Act,] and Part 6,
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.