This document includes House Committee Amendments incorporated into the bill on Fri, Feb 24, 2023 at 12:22 PM by pflowers.
1     
UTAH ENERGY ACT AMENDMENTS

2     
2023 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Ryan D. Wilcox

5     
Senate Sponsor: Derrin R. Owens

6     

7     LONG TITLE
8     General Description:
9          This bill makes changes to the qualifications for certain energy related tax credits.
10     Highlighted Provisions:
11          This bill:
12          ▸     prohibits a taxpayer, claimant, estate, or trust from claiming or carrying forward a
13     renewable energy system tax credit and an alternative energy development tax credit
14     in the same taxable year.
15     Money Appropriated in this Bill:
16          None
17     Other Special Clauses:
18          This bill provides retrospective operation.
19     Utah Code Sections Affected:
20     AMENDS:
21          59-7-614, as last amended by Laws of Utah 2022, Chapter 274
22          59-7-614.7, as last amended by Laws of Utah 2021, Chapter 280
23          59-10-1029, as last amended by Laws of Utah 2021, Chapter 280
24          59-10-1106, as last amended by Laws of Utah 2021, Chapters 280, 374
25     

26     Be it enacted by the Legislature of the state of Utah:
27          Section 1. Section 59-7-614 is amended to read:

28          59-7-614. Renewable energy systems tax credits -- Definitions -- Certification --
29     Rulemaking authority.
30          (1) As used in this section:
31          (a) (i) "Active solar system" means a system of equipment that is capable of:
32          (A) collecting and converting incident solar radiation into thermal, mechanical, or
33     electrical energy; and
34          (B) transferring a form of energy described in Subsection (1)(a)(i)(A) by a separate
35     apparatus to storage or to the point of use.
36          (ii) "Active solar system" includes water heating, space heating or cooling, and
37     electrical or mechanical energy generation.
38          (b) "Biomass system" means a system of apparatus and equipment for use in:
39          (i) converting material into biomass energy, as defined in Section 59-12-102; and
40          (ii) transporting the biomass energy by separate apparatus to the point of use or storage.
41          (c) "Commercial energy system" means a system that is:
42          (i) (A) an active solar system;
43          (B) a biomass system;
44          (C) a direct use geothermal system;
45          (D) a geothermal electricity system;
46          (E) a geothermal heat pump system;
47          (F) a hydroenergy system;
48          (G) a passive solar system; or
49          (H) a wind system;
50          (ii) located in the state; and
51          (iii) used:
52          (A) to supply energy to a commercial unit; or
53          (B) as a commercial enterprise.
54          (d) "Commercial enterprise" means an entity, the purpose of which is to produce:
55          (i) electrical, mechanical, or thermal energy for sale from a commercial energy system;
56     or
57          (ii) hydrogen for sale from a hydrogen production system.
58          (e) (i) "Commercial unit" means a building or structure that an entity uses to transact

59     business.
60          (ii) Notwithstanding Subsection (1)(e)(i):
61          (A) with respect to an active solar system used for agricultural water pumping or a
62     wind system, each individual energy generating device is considered to be a commercial unit;
63     or
64          (B) if an energy system is the building or structure that an entity uses to transact
65     business, a commercial unit is the complete energy system itself.
66          (f) "Direct use geothermal system" means a system of apparatus and equipment that
67     enables the direct use of geothermal energy to meet energy needs, including heating a building,
68     an industrial process, and aquaculture.
69          (g) "Geothermal electricity" means energy that is:
70          (i) contained in heat that continuously flows outward from the earth; and
71          (ii) used as a sole source of energy to produce electricity.
72          (h) "Geothermal energy" means energy generated by heat that is contained in the earth.
73          (i) "Geothermal heat pump system" means a system of apparatus and equipment that:
74          (i) enables the use of thermal properties contained in the earth at temperatures well
75     below 100 degrees Fahrenheit; and
76          (ii) helps meet heating and cooling needs of a structure.
77          (j) "Hydroenergy system" means a system of apparatus and equipment that is capable
78     of:
79          (i) intercepting and converting kinetic water energy into electrical or mechanical
80     energy; and
81          (ii) transferring this form of energy by separate apparatus to the point of use or storage.
82          (k) "Hydrogen production system" means a system of apparatus and equipment, located
83     in this state, that uses:
84          (i) electricity from a renewable energy source to create hydrogen gas from water,
85     regardless of whether the renewable energy source is at a separate facility or the same facility
86     as the system of apparatus and equipment; or
87          (ii) uses renewable natural gas to produce hydrogen gas.
88          (l) "Office" means the Office of Energy Development created in Section 79-6-401.
89          (m) (i) "Passive solar system" means a direct thermal system that utilizes the structure

90     of a building and the structure's operable components to provide for collection, storage, and
91     distribution of heating or cooling during the appropriate times of the year by utilizing the
92     climate resources available at the site.
93          (ii) "Passive solar system" includes those portions and components of a building that
94     are expressly designed and required for the collection, storage, and distribution of solar energy.
95          (n) "Photovoltaic system" means an active solar system that generates electricity from
96     sunlight.
97          (o) (i) "Principal recovery portion" means the portion of a lease payment that
98     constitutes the cost a person incurs in acquiring a commercial energy system.
99          (ii) "Principal recovery portion" does not include:
100          (A) an interest charge; or
101          (B) a maintenance expense.
102          (p) "Renewable energy source" means the same as that term is defined in Section
103     54-17-601.
104          (q) "Residential energy system" means the following used to supply energy to or for a
105     residential unit:
106          (i) an active solar system;
107          (ii) a biomass system;
108          (iii) a direct use geothermal system;
109          (iv) a geothermal heat pump system;
110          (v) a hydroenergy system;
111          (vi) a passive solar system; or
112          (vii) a wind system.
113          (r) (i) "Residential unit" means a house, condominium, apartment, or similar dwelling
114     unit that:
115          (A) is located in the state; and
116          (B) serves as a dwelling for a person, group of persons, or a family.
117          (ii) "Residential unit" does not include property subject to a fee under:
118          (A) Section 59-2-405;
119          (B) Section 59-2-405.1;
120          (C) Section 59-2-405.2;

121          (D) Section 59-2-405.3; or
122          (E) Section 72-10-110.5.
123          (s) "Wind system" means a system of apparatus and equipment that is capable of:
124          (i) intercepting and converting wind energy into mechanical or electrical energy; and
125          (ii) transferring these forms of energy by a separate apparatus to the point of use, sale,
126     or storage.
127          (2) A taxpayer may claim an energy system tax credit as provided in this section
128     against a tax due under this chapter for a taxable year.
129          (3) (a) Subject to the other provisions of this Subsection (3), a taxpayer may claim a
130     nonrefundable tax credit under this Subsection (3) with respect to a residential unit the taxpayer
131     owns or uses if:
132          (i) the taxpayer:
133          (A) purchases and completes a residential energy system to supply all or part of the
134     energy required for the residential unit; or
135          (B) participates in the financing of a residential energy system to supply all or part of
136     the energy required for the residential unit; and
137          (ii) the taxpayer obtains a written certification from the office in accordance with
138     Subsection (8).
139          (b) (i) Subject to Subsections (3)(b)(ii) through (iv) and, as applicable, Subsection
140     (3)(c) or (d), the tax credit is equal to 25% of the reasonable costs of each residential energy
141     system installed with respect to each residential unit the taxpayer owns or uses.
142          (ii) A tax credit under this Subsection (3) may include installation costs.
143          (iii) A taxpayer may claim a tax credit under this Subsection (3) for the taxable year in
144     which the residential energy system is completed and placed in service.
145          (iv) If the amount of a tax credit under this Subsection (3) exceeds a taxpayer's tax
146     liability under this chapter for a taxable year, the taxpayer may carry forward the amount of the
147     tax credit exceeding the liability for a period that does not exceed the next four taxable years.
148          (c) The total amount of tax credit a taxpayer may claim under this Subsection (3) for a
149     residential energy system, other than a photovoltaic system, may not exceed $2,000 per
150     residential unit.
151          (d) The total amount of tax credit a taxpayer may claim under this Subsection (3) for a

152     photovoltaic system may not exceed:
153          (i) for a system installed on or after January 1, 2018, but on or before December 31,
154     2020, $1,600;
155          (ii) for a system installed on or after January 1, 2021, but on or before December 31,
156     2021, $1,200;
157          (iii) for a system installed on or after January 1, 2022, but on or before December 31,
158     2022, $800;
159          (iv) for a system installed on or after January 1, 2023, but on or before December 31,
160     2023, $400; and
161          (v) for a system installed on or after January 1, 2024, $0.
162          (e) If a taxpayer sells a residential unit to another person before the taxpayer claims the
163     tax credit under this Subsection (3):
164          (i) the taxpayer may assign the tax credit to the other person; and
165          (ii) (A) if the other person files a return under this chapter, the other person may claim
166     the tax credit under this section as if the other person had met the requirements of this section
167     to claim the tax credit; or
168          (B) if the other person files a return under Chapter 10, Individual Income Tax Act, the
169     other person may claim the tax credit under Section 59-10-1014 as if the other person had met
170     the requirements of Section 59-10-1014 to claim the tax credit.
171          (4) (a) Subject to the other provisions of this Subsection (4), a taxpayer may claim a
172     refundable tax credit under this Subsection (4) with respect to a commercial energy system if:
173          (i) the commercial energy system does not use:
174          (A) wind, geothermal electricity, solar, or biomass equipment capable of producing a
175     total of 660 or more kilowatts of electricity; or
176          (B) solar equipment capable of producing 2,000 or more kilowatts of electricity;
177          (ii) the taxpayer purchases or participates in the financing of the commercial energy
178     system;
179          (iii) (A) the commercial energy system supplies all or part of the energy required by
180     commercial units owned or used by the taxpayer; or
181          (B) the taxpayer sells all or part of the energy produced by the commercial energy
182     system as a commercial enterprise;

183          (iv) the taxpayer has not claimed and will not claim a tax credit under Subsection (7)
184     for hydrogen production using electricity for which the taxpayer claims a tax credit under this
185     Subsection (4); and
186          (v) the taxpayer obtains a written certification from the office in accordance with
187     Subsection (8).
188          (b) (i) Subject to Subsections (4)(b)(ii) through (iv), the tax credit is equal to 10% of
189     the reasonable costs of the commercial energy system.
190          (ii) A tax credit under this Subsection (4) may include installation costs.
191          (iii) A taxpayer is eligible to claim a tax credit under this Subsection (4) for the taxable
192     year in which the commercial energy system is completed and placed in service.
193          (iv) The total amount of tax credit a taxpayer may claim under this Subsection (4) may
194     not exceed $50,000 per commercial unit.
195          (c) (i) Subject to Subsections (4)(c)(ii) and (iii), a taxpayer that is a lessee of a
196     commercial energy system installed on a commercial unit may claim a tax credit under this
197     Subsection (4) if the taxpayer confirms that the lessor irrevocably elects not to claim the tax
198     credit.
199          (ii) A taxpayer described in Subsection (4)(c)(i) may claim as a tax credit under this
200     Subsection (4) only the principal recovery portion of the lease payments.
201          (iii) A taxpayer described in Subsection (4)(c)(i) may claim a tax credit under this
202     Subsection (4) for a period that does not exceed seven taxable years after the day on which the
203     lease begins, as stated in the lease agreement.
204          (5) (a) Subject to the other provisions of this Subsection (5), a taxpayer may claim a
205     refundable tax credit under this Subsection (5) with respect to a commercial energy system if:
206          (i) the commercial energy system uses wind, geothermal electricity, or biomass
207     equipment capable of producing a total of 660 or more kilowatts of electricity;
208          (ii) (A) the commercial energy system supplies all or part of the energy required by
209     commercial units owned or used by the taxpayer; or
210          (B) the taxpayer sells all or part of the energy produced by the commercial energy
211     system as a commercial enterprise;
212          (iii) the taxpayer has not claimed and will not claim a tax credit under Subsection (7)
213     for hydrogen production using electricity for which the taxpayer claims a tax credit under this

214     Subsection (5); and
215          (iv) the taxpayer obtains a written certification from the office in accordance with
216     Subsection (8).
217          (b) (i) Subject to Subsection (5)(b)(ii), a tax credit under this Subsection (5) is equal to
218     the product of:
219          (A) 0.35 cents; and
220          (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
221          (ii) A taxpayer is eligible to claim a tax credit under this Subsection (5) for production
222     occurring during a period of 48 months beginning with the month in which the commercial
223     energy system is placed in commercial service.
224          (c) A taxpayer that is a lessee of a commercial energy system installed on a commercial
225     unit may claim a tax credit under this Subsection (5) if the taxpayer confirms that the lessor
226     irrevocably elects not to claim the tax credit.
227          (6) (a) Subject to the other provisions of this Subsection (6), a taxpayer may claim a
228     refundable tax credit as provided in this Subsection (6) if:
229          (i) the taxpayer owns a commercial energy system that uses solar equipment capable of
230     producing a total of 660 or more kilowatts of electricity;
231          (ii) (A) the commercial energy system supplies all or part of the energy required by
232     commercial units owned or used by the taxpayer; or
233          (B) the taxpayer sells all or part of the energy produced by the commercial energy
234     system as a commercial enterprise;
235          (iii) the taxpayer does not claim a tax credit under Subsection (4) and has not claimed
236     and will not claim a tax credit under Subsection (7) for hydrogen production using electricity
237     for which a taxpayer claims a tax credit under this Subsection (6); and
238          (iv) the taxpayer obtains a written certification from the office in accordance with
239     Subsection (8).
240          (b) (i) Subject to Subsection (6)(b)(ii), a tax credit under this Subsection (6) is equal to
241     the product of:
242          (A) 0.35 cents; and
243          (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
244          (ii) A taxpayer is eligible to claim a tax credit under this Subsection (6) for production

245     occurring during a period of 48 months beginning with the month in which the commercial
246     energy system is placed in commercial service.
247          (c) A taxpayer that is a lessee of a commercial energy system installed on a commercial
248     unit may claim a tax credit under this Subsection (6) if the taxpayer confirms that the lessor
249     irrevocably elects not to claim the tax credit.
250          (7) (a) A taxpayer may claim a refundable tax credit as provided in this Subsection (7)
251     if:
252          (i) the taxpayer owns a hydrogen production system;
253          (ii) the hydrogen production system is completed and placed in service on or after
254     January 1, 2022;
255          (iii) the taxpayer sells as a commercial enterprise, or supplies for the taxpayer's own
256     use in commercial units, the hydrogen produced from the hydrogen production system;
257          (iv) the taxpayer has not claimed and will not claim a tax credit under Subsection (4),
258     (5), or (6) or Section 59-7-626 for electricity or hydrogen used to meet the requirements of this
259     Subsection (7); and
260          (v) the taxpayer obtains a written certification from the office in accordance with
261     Subsection (8).
262          (b) (i) Subject to Subsections (7)(b)(ii) and (iii), a tax credit under this Subsection (7)
263     is equal to the product of:
264          (A) $0.12; and
265          (B) the number of kilograms of hydrogen produced during the taxable year.
266          (ii) A taxpayer may not receive a tax credit under this Subsection (7) for more than
267     5,600 metric tons of hydrogen per taxable year.
268          (iii) A taxpayer is eligible to claim a tax credit under this Subsection (7) for production
269     occurring during a period of 48 months beginning with the month in which the hydrogen
270     production system is placed in commercial service.
271          (8) (a) Before a taxpayer may claim a tax credit under this section, the taxpayer shall
272     obtain a written certification from the office.
273          (b) The office shall issue a taxpayer a written certification if the office determines that:
274          (i) the taxpayer meets the requirements of this section to receive a tax credit; and
275          (ii) the residential energy system, the commercial energy system, or the hydrogen

276     production system with respect to which the taxpayer seeks to claim a tax credit:
277          (A) has been completely installed;
278          (B) is a viable system for saving or producing energy from renewable resources; and
279          (C) is safe, reliable, efficient, and technically feasible to ensure that the residential
280     energy system, the commercial energy system, or the hydrogen production system uses the
281     state's renewable and nonrenewable energy resources in an appropriate and economic manner.
282          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
283     office may make rules:
284          (i) for determining whether a residential energy system, a commercial energy system,
285     or a hydrogen production system meets the requirements of Subsection (8)(b)(ii); and
286          (ii) for purposes of a tax credit under Subsection (3) or (4), establishing the reasonable
287     costs of a residential energy system or a commercial energy system, as an amount per unit of
288     energy production.
289          (d) A taxpayer that obtains a written certification from the office shall retain the
290     certification for the same time period a person is required to keep books and records under
291     Section 59-1-1406.
292          (e) The office shall submit to the commission an electronic list that includes:
293          (i) the name and identifying information of each taxpayer to which the office issues a
294     written certification; and
295          (ii) for each taxpayer:
296          (A) the amount of the tax credit listed on the written certification; and
297          (B) the date the renewable energy system was installed.
298          (9) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
299     commission may make rules to address the certification of a tax credit under this section.
300          (10) A tax credit under this section is in addition to any tax credits provided under the
301     laws or rules and regulations of the United States.
302          (11) A taxpayer may not claim or carry forward a tax credit described in this section in
303     a taxable year during which the taxpayer claims or carries forward a tax credit under Section
304     59-7-614.7.
305          Section 2. Section 59-7-614.7 is amended to read:
306          59-7-614.7. Nonrefundable alternative energy development tax credit.

307          (1) As used in this section:
308          (a) "Alternative energy entity" means the same as that term is defined in Section
309     79-6-502.
310          (b) "Alternative energy project" means the same as that term is defined in Section
311     79-6-502.
312          (c) "Office" means the Office of Energy Development created in Section 79-6-401.
313          (2) Subject to the other provisions of this section, an alternative energy entity may
314     claim a nonrefundable tax credit for alternative energy development as provided in this section.
315          (3) The tax credit under this section is the amount listed as the tax credit amount on a
316     tax credit certificate that the office issues under Title 79, Chapter 6, Part 5, Alternative Energy
317     Development Tax Credit Act, to the alternative energy entity for the taxable year.
318          (4) An alternative energy entity may carry forward a tax credit under this section for a
319     period that does not exceed the next seven taxable years if:
320          (a) the alternative energy entity is allowed to claim a tax credit under this section for a
321     taxable year; and
322          (b) the amount of the tax credit exceeds the alternative energy entity's tax liability
323     under this chapter for that taxable year.
324          (5) (a) In accordance with Section 59-7-159, the Revenue and Taxation Interim
325     Committee shall study the tax credit allowed by this section and make recommendations
326     concerning whether the tax credit should be continued, modified, or repealed.
327          (b) (i) Except as provided in Subsection (5)(b)(ii), for purposes of the study required by
328     this Subsection (5), the office shall provide the following information, if available to the office,
329     to the Office of the Legislative Fiscal Analyst by electronic means:
330          (A) the amount of tax credit that the office grants to each alternative energy entity for
331     each taxable year;
332          (B) the new state revenues generated by each alternative energy project;
333          (C) the information contained in the office's latest report under Section 79-6-505; and
334          (D) any other information that the Office of the Legislative Fiscal Analyst requests.
335          (ii) (A) In providing the information described in Subsection (5)(b)(i), the office shall
336     redact information that identifies a recipient of a tax credit under this section.
337          (B) If, notwithstanding the redactions made under Subsection (5)(b)(ii)(A), reporting

338     the information described in Subsection (5)(b)(i) might disclose the identity of a recipient of a
339     tax credit, the office may file a request with the Revenue and Taxation Interim Committee to
340     provide the information described in Subsection (5)(b)(i) in the aggregate for all alternative
341     energy entities that receive the tax credit under this section.
342          (c) As part of the study required by this Subsection (5), the Office of the Legislative
343     Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
344     analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
345     office under Subsection (5)(b).
346          (d) The Revenue and Taxation Interim Committee shall ensure that the
347     recommendations described in Subsection (5)(a) include an evaluation of:
348          (i) the cost of the tax credit to the state;
349          (ii) the purpose and effectiveness of the tax credit; and
350          (iii) the extent to which the state benefits from the tax credit.
351          (6) A taxpayer may not claim or carry forward a tax credit described in Subsection (2)
352     in a taxable year during which the taxpayer claims or carries forward a tax credit under Section
353     59-7-614.
354          Section 3. Section 59-10-1029 is amended to read:
355          59-10-1029. Nonrefundable alternative energy development tax credit.
356          (1) As used in this section:
357          (a) "Alternative energy entity" means the same as that term is defined in Section
358     79-6-502.
359          (b) "Alternative energy project" means the same as that term is defined in Section
360     79-6-502.
361          (c) "Office" means the Office of Energy Development created in Section 79-6-401.
362          (2) Subject to the other provisions of this section, an alternative energy entity may
363     claim a nonrefundable tax credit for alternative energy development as provided in this section.
364          (3) The tax credit under this section is the amount listed as the tax credit amount on a
365     tax credit certificate that the office issues under Title 79, Chapter 6, Part 5, Alternative Energy
366     Development Tax Credit Act, to the alternative energy entity for the taxable year.
367          (4) An alternative energy entity may carry forward a tax credit under this section for a
368     period that does not exceed the next seven taxable years if:

369          (a) the alternative energy entity is allowed to claim a tax credit under this section for a
370     taxable year; and
371          (b) the amount of the tax credit exceeds the alternative energy entity's tax liability
372     under this chapter for that taxable year.
373          (5) (a) In accordance with Section 59-10-137, the Revenue and Taxation Interim
374     Committee shall study the tax credit allowed by this section and make recommendations
375     concerning whether the tax credit should be continued, modified, or repealed.
376          (b) (i) Except as provided in Subsection (5)(b)(ii), for purposes of the study required by
377     this Subsection (5), the office shall provide the following information, if available to the office,
378     to the Office of the Legislative Fiscal Analyst by electronic means:
379          (A) the amount of tax credit that the office grants to each alternative energy entity for
380     each taxable year;
381          (B) the new state revenues generated by each alternative energy project;
382          (C) the information contained in the office's latest report under Section 79-6-505; and
383          (D) any other information that the Office of the Legislative Fiscal Analyst requests.
384          (ii) (A) In providing the information described in Subsection (5)(b)(i), the office shall
385     redact information that identifies a recipient of a tax credit under this section.
386          (B) If, notwithstanding the redactions made under Subsection (5)(b)(ii)(A), reporting
387     the information described in Subsection (5)(b)(i) might disclose the identity of a recipient of a
388     tax credit, the office may file a request with the Revenue and Taxation Interim Committee to
389     provide the information described in Subsection (5)(b)(i) in the aggregate for all alternative
390     energy entities that receive the tax credit under this section.
391          (c) As part of the study required by this Subsection (5), the Office of the Legislative
392     Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
393     analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
394     office under Subsection (5)(b).
395          (d) The Revenue and Taxation Interim Committee shall ensure that the
396     recommendations described in Subsection (5)(a) include an evaluation of:
397          (i) the cost of the tax credit to the state;
398          (ii) the purpose and effectiveness of the tax credit; and
399          (iii) the extent to which the state benefits from the tax credit.

400          (6) A claimant, estate, or trust Ĥ→ [
may not claim] ←Ĥ may not claim or carry forward a
400a     tax
401     credit described in Subsection (2) in a taxable year during which the taxpayer claims or carries
402     forward a tax credit under Section 59-10-1106.
403          Section 4. Section 59-10-1106 is amended to read:
404          59-10-1106. Refundable renewable energy systems tax credits -- Definitions --
405     Certification -- Rulemaking authority.
406          (1) As used in this section:
407          (a) "Active solar system" means the same as that term is defined in Section
408     59-10-1014.
409          (b) "Biomass system" means the same as that term is defined in Section 59-10-1014.
410          (c) "Commercial energy system" means the same as that term is defined in Section
411     59-7-614.
412          (d) "Commercial enterprise" means the same as that term is defined in Section
413     59-7-614.
414          (e) "Commercial unit" means the same as that term is defined in Section 59-7-614.
415          (f) "Direct use geothermal system" means the same as that term is defined in Section
416     59-10-1014.
417          (g) "Geothermal electricity" means the same as that term is defined in Section
418     59-10-1014.
419          (h) "Geothermal energy" means the same as that term is defined in Section 59-10-1014.
420          (i) "Geothermal heat pump system" means the same as that term is defined in Section
421     59-10-1014.
422          (j) "Hydroenergy system" means the same as that term is defined in Section
423     59-10-1014.
424          (k) "Hydrogen production system" means the same as that term is defined in Section
425     59-7-614.
426          (l) "Office" means the Office of Energy Development created in Section 79-6-401.
427          (m) "Passive solar system" means the same as that term is defined in Section
428     59-10-1014.
429          (n) "Principal recovery portion" means the same as that term is defined in Section
430     59-10-1014.

431          (o) "Wind system" means the same as that term is defined in Section 59-10-1014.
432          (2) A claimant, estate, or trust may claim an energy system tax credit as provided in
433     this section against a tax due under this chapter for a taxable year.
434          (3) (a) Subject to the other provisions of this Subsection (3), a claimant, estate, or trust
435     may claim a refundable tax credit under this Subsection (3) with respect to a commercial
436     energy system if:
437          (i) the commercial energy system does not use:
438          (A) wind, geothermal electricity, solar, or biomass equipment capable of producing a
439     total of 660 or more kilowatts of electricity; or
440          (B) solar equipment capable of producing 2,000 or more kilowatts of electricity;
441          (ii) the claimant, estate, or trust purchases or participates in the financing of the
442     commercial energy system;
443          (iii) (A) the commercial energy system supplies all or part of the energy required by
444     commercial units owned or used by the claimant, estate, or trust; or
445          (B) the claimant, estate, or trust sells all or part of the energy produced by the
446     commercial energy system as a commercial enterprise;
447          (iv) the claimant, estate, or trust has not claimed and will not claim a tax credit under
448     Subsection (6) for hydrogen production using electricity for which the claimant, estate, or trust
449     claims a tax credit under this Subsection (3); and
450          (v) the claimant, estate, or trust obtains a written certification from the office in
451     accordance with Subsection (7).
452          (b) (i) Subject to Subsections (3)(b)(ii) through (iv), the tax credit is equal to 10% of
453     the reasonable costs of the commercial energy system.
454          (ii) A tax credit under this Subsection (3) may include installation costs.
455          (iii) A claimant, estate, or trust is eligible to claim a tax credit under this Subsection (3)
456     for the taxable year in which the commercial energy system is completed and placed in service.
457          (iv) The total amount of tax credit a claimant, estate, or trust may claim under this
458     Subsection (3) may not exceed $50,000 per commercial unit.
459          (c) (i) Subject to Subsections (3)(c)(ii) and (iii), a claimant, estate, or trust that is a
460     lessee of a commercial energy system installed on a commercial unit may claim a tax credit
461     under this Subsection (3) if the claimant, estate, or trust confirms that the lessor irrevocably

462     elects not to claim the tax credit.
463          (ii) A claimant, estate, or trust described in Subsection (3)(c)(i) may claim as a tax
464     credit under this Subsection (3) only the principal recovery portion of the lease payments.
465          (iii) A claimant, estate, or trust described in Subsection (3)(c)(i) may claim a tax credit
466     under this Subsection (3) for a period that does not exceed seven taxable years after the day on
467     which the lease begins, as stated in the lease agreement.
468          (4) (a) Subject to the other provisions of this Subsection (4), a claimant, estate, or trust
469     may claim a refundable tax credit under this Subsection (4) with respect to a commercial
470     energy system if:
471          (i) the commercial energy system uses wind, geothermal electricity, or biomass
472     equipment capable of producing a total of 660 or more kilowatts of electricity;
473          (ii) (A) the commercial energy system supplies all or part of the energy required by
474     commercial units owned or used by the claimant, estate, or trust; or
475          (B) the claimant, estate, or trust sells all or part of the energy produced by the
476     commercial energy system as a commercial enterprise;
477          (iii) the claimant, estate, or trust has not claimed and will not claim a tax credit under
478     Subsection (6) for hydrogen production using electricity for which the claimant, estate, or trust
479     claims a tax credit under this Subsection (4); and
480          (iv) the claimant, estate, or trust obtains a written certification from the office in
481     accordance with Subsection (7).
482          (b) (i) Subject to Subsection (4)(b)(ii), a tax credit under this Subsection (4) is equal to
483     the product of:
484          (A) 0.35 cents; and
485          (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
486          (ii) A claimant, estate, or trust is eligible to claim a tax credit under this Subsection (4)
487     for production occurring during a period of 48 months beginning with the month in which the
488     commercial energy system is placed in commercial service.
489          (c) A claimant, estate, or trust that is a lessee of a commercial energy system installed
490     on a commercial unit may claim a tax credit under this Subsection (4) if the claimant, estate, or
491     trust confirms that the lessor irrevocably elects not to claim the tax credit.
492          (5) (a) Subject to the other provisions of this Subsection (5), a claimant, estate, or trust

493     may claim a refundable tax credit as provided in this Subsection (5) if:
494          (i) the claimant, estate, or trust owns a commercial energy system that uses solar
495     equipment capable of producing a total of 660 or more kilowatts of electricity;
496          (ii) (A) the commercial energy system supplies all or part of the energy required by
497     commercial units owned or used by the claimant, estate, or trust; or
498          (B) the claimant, estate, or trust sells all or part of the energy produced by the
499     commercial energy system as a commercial enterprise;
500          (iii) the claimant, estate, or trust does not claim a tax credit under Subsection (3);
501          (iv) the claimant, estate, or trust has not claimed and will not claim a tax credit under
502     Subsection (6) for hydrogen production using electricity for which a taxpayer claims a tax
503     credit under this Subsection (5); and
504          (v) the claimant, estate, or trust obtains a written certification from the office in
505     accordance with Subsection (7).
506          (b) (i) Subject to Subsection (5)(b)(ii), a tax credit under this Subsection (5) is equal to
507     the product of:
508          (A) 0.35 cents; and
509          (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
510          (ii) A claimant, estate, or trust is eligible to claim a tax credit under this Subsection (5)
511     for production occurring during a period of 48 months beginning with the month in which the
512     commercial energy system is placed in commercial service.
513          (c) A claimant, estate, or trust that is a lessee of a commercial energy system installed
514     on a commercial unit may claim a tax credit under this Subsection (5) if the claimant, estate, or
515     trust confirms that the lessor irrevocably elects not to claim the tax credit.
516          (6) (a) A claimant, estate, or trust may claim a refundable tax credit as provided in this
517     Subsection (6) if:
518          (i) the claimant, estate, or trust owns a hydrogen production system;
519          (ii) the hydrogen production system is completed and placed in service on or after
520     January 1, 2022;
521          (iii) the claimant, estate, or trust sells as a commercial enterprise, or supplies for the
522     claimant's, estate's, or trust's own use in commercial units, the hydrogen produced from the
523     hydrogen production system;

524          (iv) the claimant, estate, or trust has not claimed and will not claim a tax credit under
525     Subsection (3), (4), or (5) for electricity used to meet the requirements of this Subsection (6);
526     and
527          (v) the claimant, estate, or trust obtains a written certification from the office in
528     accordance with Subsection (7).
529          (b) (i) Subject to Subsections (6)(b)(ii) and (iii), a tax credit under this Subsection (6)
530     is equal to the product of:
531          (A) $0.12; and
532          (B) the number of kilograms of hydrogen produced during the taxable year.
533          (ii) A claimant, estate, or trust may not receive a tax credit under this Subsection (6) for
534     more than 5,600 metric tons of hydrogen per taxable year.
535          (iii) A claimant, estate, or trust is eligible to claim a tax credit under this Subsection (6)
536     for production occurring during a period of 48 months beginning with the month in which the
537     hydrogen production system is placed in commercial service.
538          (7) (a) Before a claimant, estate, or trust may claim a tax credit under this section, the
539     claimant, estate, or trust shall obtain a written certification from the office.
540          (b) The office shall issue a claimant, estate, or trust a written certification if the office
541     determines that:
542          (i) the claimant, estate, or trust meets the requirements of this section to receive a tax
543     credit; and
544          (ii) the commercial energy system or the hydrogen production system with respect to
545     which the claimant, estate, or trust seeks to claim a tax credit:
546          (A) has been completely installed;
547          (B) is a viable system for saving or producing energy from renewable resources; and
548          (C) is safe, reliable, efficient, and technically feasible to ensure that the commercial
549     energy system or the hydrogen production system uses the state's renewable and nonrenewable
550     resources in an appropriate and economic manner.
551          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
552     office may make rules:
553          (i) for determining whether a commercial energy system or a hydrogen production
554     system meets the requirements of Subsection (7)(b)(ii); and

555          (ii) for purposes of a tax credit under Subsection (3), establishing the reasonable costs
556     of a commercial energy system, as an amount per unit of energy production.
557          (d) A claimant, estate, or trust that obtains a written certification from the office shall
558     retain the certification for the same time period a person is required to keep books and records
559     under Section 59-1-1406.
560          (e) The office shall submit to the commission an electronic list that includes:
561          (i) the name and identifying information of each claimant, estate, or trust to which the
562     office issues a written certification; and
563          (ii) for each claimant, estate, or trust:
564          (A) the amount of the tax credit listed on the written certification; and
565          (B) the date the commercial energy system or the hydrogen production system was
566     installed.
567          (8) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
568     commission may make rules to address the certification of a tax credit under this section.
569          (9) A tax credit under this section is in addition to any tax credits provided under the
570     laws or rules and regulations of the United States.
571          (10) A purchaser of one or more solar units that claims a tax credit under Section
572     59-10-1024 for the purchase of the one or more solar units may not claim a tax credit under this
573     section for that purchase.
574          (11) A claimant, estate, or trust may not claim or carry forward a tax credit described in
575     this section in a taxable year during which the claimant, estate, or trust claims or carries
576     forward a tax credit under Section Ĥ→ [
59-7-1029] 59-10-1029 ←Ĥ .
577          Section 5. Retrospective operation.
578          This bill has retrospective operation for a taxable year beginning on or after January 1,
579     2023.