Representative Kay J. Christofferson proposes the following substitute bill:


1     
INCENTIVES AMENDMENTS

2     
2023 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Kay J. Christofferson

5     
Senate Sponsor: Lincoln Fillmore

6     

7     LONG TITLE
8     General Description:
9          This bill amends provisions related to tax credits.
10     Highlighted Provisions:
11          This bill:
12          ▸     requires each state agency that issues a tax credit certificate for a tax credit to
13     provide the State Tax Commission with an electronic link to a webpage where the
14     state agency lists the names of the claimants and amounts of tax credits claimed;
15          ▸     requires the State Tax Commission to create a webpage that links to each state
16     agency's list of tax credit claimants;
17          ▸     requires the Revenue and Taxation Interim Committee to evaluate whether
18     performance metrics or reporting requirements for the tax credit would improve the
19     committee's evaluation of the benefits to the taxpayer and the state from the tax
20     credit and, if so, prepare legislation recommending specific performance metrics or
21     reporting requirements;
22          ▸     modifies reporting and study requirements related to repealed income tax credits;
23          ▸     creates a statutory certificate process for the historic preservation tax credits;
24          ▸     requires the State Historic Preservation Office to report the number of estimated
25     new jobs created by approved historic rehabilitation work in the Department of
26     Cultural and Community Engagement's annual report;
27          ▸     modifies the corporate and individual recycling market development zone tax
28     credits:
29               •     to eliminate the expenditures credit; and
30               •     to limit the machinery and equipment credit to taxpayers who do not qualify for
31     a sales and use tax exemption on the purchase of machinery and equipment;
32          ▸     modifies the corporate and individual research activities tax credits by requiring the
33     Governor's Office of Economic Opportunity to issue a tax credit certificate;
34          ▸     clarifies the production capacity requirements for solar equipment to be eligible for
35     the renewable energy systems tax credits;
36          ▸     requires the Governor's Office of Economic Opportunity to report in the annual
37     report the amount of new state revenue generated from motion picture projects
38     within the state;
39          ▸     repeals the following individual income tax credits:
40               •     qualifying solar projects; and
41               •     investment in life sciences establishments;
42          ▸     repeals the Technology and Life Science Economic Development Act;
43          ▸     repeals the corporate and individual alternative energy development tax credits;
44          ▸     repeals the Alternative Energy Development Tax Credit Act;
45          ▸     schedules the repeal of the corporate and individual renewable energy systems and
46     hydrogen production tax credits; and
47          ▸     makes technical and conforming changes.
48     Money Appropriated in this Bill:
49          None
50     Other Special Clauses:
51          This bill provides a special effective date.
52     Utah Code Sections Affected:
53     AMENDS:
54          59-7-159, as last amended by Laws of Utah 2022, Chapters 264, 274
55          59-7-610, as last amended by Laws of Utah 2021, Chapter 367
56          59-7-612, as last amended by Laws of Utah 2016, Third Special Session, Chapter 1
57          59-7-614, as last amended by Laws of Utah 2022, Chapter 274
58          59-7-626, as enacted by Laws of Utah 2021, Chapter 374
59          59-10-137, as last amended by Laws of Utah 2022, Chapter 264
60          59-10-1002.2, as last amended by Laws of Utah 2022, Chapter 12
61          59-10-1007, as last amended by Laws of Utah 2021, Chapter 367
62          59-10-1012, as last amended by Laws of Utah 2016, Third Special Session, Chapter 1
63          59-10-1014, as last amended by Laws of Utah 2021, Chapter 280
64          59-10-1106, as last amended by Laws of Utah 2021, Chapters 280, 374
65          59-10-1113, as last amended by Laws of Utah 2022, Chapter 274
66          63I-2-259, as last amended by Laws of Utah 2022, Chapter 264
67          63N-8-105, as last amended by Laws of Utah 2021, Chapter 282
68          79-6-401, as last amended by Laws of Utah 2022, Chapter 322
69     ENACTS:
70          59-1-214, Utah Code Annotated 1953
71          63N-20-101, Utah Code Annotated 1953
72          63N-20-102, Utah Code Annotated 1953
73          63N-20-103, Utah Code Annotated 1953
74     REPEALS AND REENACTS:
75          59-7-609, as enacted by Laws of Utah 1995, Chapter 42
76          59-10-1006, as renumbered and amended by Laws of Utah 2006, Chapter 223
77     REPEALS:
78          59-7-614.7, as last amended by Laws of Utah 2021, Chapter 280
79          59-10-1024, as last amended by Laws of Utah 2021, Chapter 280
80          59-10-1025, as last amended by Laws of Utah 2019, Chapter 465
81          59-10-1029, as last amended by Laws of Utah 2021, Chapter 280
82          63N-2-801, as renumbered and amended by Laws of Utah 2015, Chapter 283
83          63N-2-802, as last amended by Laws of Utah 2016, Chapter 354
84          63N-2-803, as last amended by Laws of Utah 2016, Chapter 354
85          63N-2-804, as renumbered and amended by Laws of Utah 2015, Chapter 283
86          63N-2-805, as renumbered and amended by Laws of Utah 2015, Chapter 283
87          63N-2-806, as last amended by Laws of Utah 2016, Chapter 354
88          63N-2-807, as renumbered and amended by Laws of Utah 2015, Chapter 283
89          63N-2-808, as last amended by Laws of Utah 2021, Chapter 282
90          63N-2-809, as renumbered and amended by Laws of Utah 2015, Chapter 283
91          63N-2-810, as last amended by Laws of Utah 2022, Chapter 362
92          63N-2-811, as last amended by Laws of Utah 2021, Chapter 382
93          79-6-501, as renumbered and amended by Laws of Utah 2021, Chapter 280
94          79-6-502, as renumbered and amended by Laws of Utah 2021, Chapter 280
95          79-6-503, as last amended by Laws of Utah 2021, Chapter 64 and renumbered and
96     amended by Laws of Utah 2021, Chapter 280
97          79-6-504, as renumbered and amended by Laws of Utah 2021, Chapter 280
98          79-6-505, as last amended by Laws of Utah 2022, Chapter 68
99     

100     Be it enacted by the Legislature of the state of Utah:
101          Section 1. Section 59-1-214 is enacted to read:
102          59-1-214. Disclosure of tax credit recipients.
103          (1) As used in this section:
104          (a) "Recipient" means a taxpayer, a claimant, an estate, or a trust that:
105          (i) applies for a tax credit certificate on or after January 1, 2024; and
106          (ii) is eligible to claim a tax credit in the amount for which a tax credit certificate is
107     issued.
108          (b) "Tax credit certificate" means a document that:
109          (i) a state agency is required by statute to issue upon an application by a taxpayer, a
110     claimant, an estate, or a trust;
111          (ii) verifies a taxpayer's, a claimant's, an estate's, or a trust's eligibility to claim a tax
112     credit;
113          (iii) lists the amount of tax credit that a taxpayer, a claimant, an estate, or a trust may
114     claim for the taxable year; and
115          (iv) without which the taxpayer, the claimant, the estate, or the trust may not claim the
116     tax credit.
117          (2) Each state agency shall provide the commission with a link to a webpage where the
118     state agency discloses, for each tax credit for which the state agency issues a tax credit
119     certificate:
120          (a) the names of each recipient of a tax credit certificate; and
121          (b) the amount of tax credit listed on the certificate.
122          (3) The Office of Energy Development is not required to comply with Subsection (2)
123     for a tax credit described in:
124          (a) Subsection 59-7-614(3); or
125          (b) Section 59-10-1014.
126          (4) The commission shall create a single webpage on the commission's website that
127     links to each state agency's webpage containing the information described in Subsection (2).
128          Section 2. Section 59-7-159 is amended to read:
129          59-7-159. Review of credits allowed under this chapter.
130          (1) As used in this section, "committee" means the Revenue and Taxation Interim
131     Committee.
132          (2) (a) The committee shall review the tax credits described in this chapter as provided
133     in Subsection (3) and make recommendations concerning whether the tax credits should be
134     continued, modified, or repealed.
135          (b) In conducting the review required under Subsection (2)(a), the committee shall:
136          (i) schedule time on at least one committee agenda to conduct the review;
137          (ii) invite state agencies, individuals, and organizations concerned with the tax credit
138     under review to provide testimony;
139          (iii) (A) invite the Governor's Office of Economic Opportunity to present a summary
140     and analysis of the information for each tax credit regarding which the Governor's Office of
141     Economic Opportunity is required to make a report under this chapter; and
142          (B) invite the Office of the Legislative Fiscal Analyst to present a summary and
143     analysis of the information for each tax credit regarding which the Office of the Legislative
144     Fiscal Analyst is required to make a report under this chapter;
145          (iv) ensure that the committee's recommendations described in this section include an
146     evaluation of:
147          (A) the cost of the tax credit to the state;
148          (B) the purpose and effectiveness of the tax credit; and
149          (C) the extent to which the state benefits from the tax credit; [and]
150          (v) evaluate whether performance metrics or reporting requirements for the tax credit
151     would improve the committee's evaluation of the benefits to the taxpayer and the state from the
152     tax credit; and
153          (vi) undertake other review efforts as determined by the committee chairs or as
154     otherwise required by law.
155          (c) The committee shall prepare legislation for consideration by the Legislature at the
156     next general session recommending specific performance metrics or reporting requirements for
157     any tax credit that the committee determines meets the requirement described in Subsection
158     (2)(b)(v).
159          (3) (a) On or before November 30, 2017, and every three years after 2017, the
160     committee shall conduct the review required under Subsection (2) of the tax credits allowed
161     under the following sections:
162          (i) Section 59-7-601;
163          (ii) Section 59-7-607;
164          (iii) Section 59-7-612;
165          (iv) Section 59-7-614.1; and
166          (v) Section 59-7-614.5.
167          (b) On or before November 30, 2018, and every three years after 2018, the committee
168     shall conduct the review required under Subsection (2) of the tax credits allowed under the
169     following sections:
170          (i) Section 59-7-609;
171          (ii) Section 59-7-614.2;
172          (iii) Section 59-7-614.10; and
173          (iv) Section 59-7-619.
174          (c) On or before November 30, 2019, and every three years after 2019, the committee
175     shall conduct the review required under Subsection (2) of the tax credits allowed under the
176     following sections:
177          (i) Section 59-7-610; and
178          (ii) Section 59-7-614[; and].
179          [(iii) Section 59-7-614.7.]
180          (d) (i) In addition to the reviews described in this Subsection (3), the committee shall
181     conduct a review of a tax credit described in this chapter that is enacted on or after January 1,
182     2017.
183          (ii) The committee shall complete a review described in this Subsection (3)(d) three
184     years after the effective date of the tax credit and every three years after the initial review date.
185          Section 3. Section 59-7-609 is repealed and reenacted to read:
186          59-7-609. Historic preservation credit.
187          (1) As used in this section:
188          (a) "Certified historic building" means a building that:
189          (i) is listed on the National Register of Historic Places within three years of taking the
190     credit under this section; or
191          (ii) (A) is located in a National Register Historic District; and
192          (B) has been designated by the office as being of significance to the district.
193          (b) "Office" means the State Historic Preservation Office.
194          (c) (i) "Qualified rehabilitation expenditures" means any amount properly chargeable to
195     the rehabilitation and restoration of the physical elements of the building.
196          (ii) "Qualified rehabilitation expenditures" includes the historic decorative elements
197     and the upgrading of the structural, mechanical, electrical, and plumbing systems.
198          (iii) "Qualified rehabilitation expenditures" does not include expenditures related to:
199          (A) the taxpayer's personal labor;
200          (B) cost of acquisition of the property;
201          (C) any expenditure attributable to the enlargement of an existing building;
202          (D) rehabilitation of a certified historic building without the approval required in
203     Subsection (3)(a)(i);
204          (E) an expenditure attributable to landscaping or other site features, outbuildings,
205     garages, and related features; or
206          (F) demolition and removal costs for an existing building on a property site.
207          (d) "Residential" means a building used for residential use, either owner occupied or
208     income producing.
209          (2) A taxpayer may claim a nonrefundable tax credit in an amount equal to 20% of
210     qualified rehabilitation expenditures if:
211          (a) the qualified rehabilitation expenditures cost more than $10,000;
212          (b) the qualified rehabilitation expenditures are incurred in connection with a
213     residential certified historic building; and
214          (c) the taxpayer has a written tax credit certificate issued by the office in accordance
215     with Subsection (3).
216          (3) (a) The office shall issue a tax credit certificate if the office:
217          (i) approves all rehabilitation work for which a taxpayer may claim a tax credit as
218     meeting the Secretary of the Interior's Standards for Rehabilitation before completion of the
219     rehabilitation project so that the office can provide corrective comments to the taxpayer to
220     preserve the historic qualities of the building;
221          (ii) determines that the rehabilitation project conforms with the approved rehabilitation
222     work; and
223          (iii) verifies the property is a residential certified historic building and the amount of
224     the taxpayer's qualified rehabilitation expenditures.
225          (b) The tax credit certificate shall list the amount of the tax credit that the taxpayer is
226     eligible to claim.
227          (c) A taxpayer that receives a tax credit certificate under this section shall retain the tax
228     credit certificate for the same time period a person is required to keep books and records under
229     Section 59-1-1406.
230          (d) The office shall provide the commission with an electronic report that includes for
231     each taxpayer to which the office issued a tax credit certificate under this section for a taxable
232     year:
233          (i) the name of the taxpayer;
234          (ii) the identifying information of the taxpayer; and
235          (iii) the amount of tax credit that the taxpayer is eligible to claim.
236          (4) A taxpayer may carry forward the amount of the tax credit that exceeds the
237     taxpayer's tax liability for five taxable years after the year in which the taxpayer claims a tax
238     credit under this section.
239          (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
240     commission, in consultation with the office, shall make rules to implement this section.
241          (6) The office shall include the number of estimated new jobs created in the state from
242     rehabilitation work in the annual report described in Section 9-1-208.
243          Section 4. Section 59-7-610 is amended to read:
244          59-7-610. Recycling market development zones tax credits.
245          (1) As used in this section, a "qualifying taxpayer" means a business that:
246          (a) operates in a recycling market development zone as defined in Section 19-13-102;
247     and
248          (b) is not eligible for a sales and use tax exemption under Subsection 59-12-104(14).
249          (2) Subject to other provisions of this section, a qualifying taxpayer [that is a business
250     operating in a recycling market development zone as defined in Section 19-13-102] may claim
251     [the following nonrefundable tax credits:]
252          [(a)] a nonrefundable tax credit equal to the product of the percentage listed in
253     Subsection 59-7-104(2) and the purchase price paid for machinery and equipment used directly
254     in:
255          [(i)] (a) commercial composting; or
256          [(ii)] (b) manufacturing facilities or plant units that[: (A) manufacture, process,
257     compound, or produce recycled items of tangible personal property for sale; or (B)] reduce or
258     reuse postconsumer waste material[; and].
259          [(b) a tax credit equal to the lesser of:]
260          [(i) 20% of net expenditures to third parties for rent, wages, supplies, tools, test
261     inventory, and utilities made by the taxpayer for establishing and operating recycling or
262     composting technology in the state; and]
263          [(ii) $2,000.]
264          [(2)] (3) (a) To claim a tax credit described in Subsection [(1)] (2), the qualifying
265     taxpayer shall receive from the Department of Environmental Quality a written certification, on
266     a form approved by the commission, that includes:
267          (i) a statement that the taxpayer is a qualifying taxpayer [is operating a business within
268     the boundaries of a recycling market development zone];
269          [(ii) for a claim of the tax credit described in Subsection (1)(a):]
270          [(A)] (ii) the type of the machinery and equipment that the qualifying taxpayer
271     purchased;
272          [(B)] (iii) the date that the qualifying taxpayer purchased the machinery and equipment;
273          [(C)] (iv) the purchase price for [the] each item of machinery and equipment;
274          [(D)] (v) the total purchase price for all machinery and equipment for which the
275     qualifying taxpayer is claiming a tax credit;
276          [(E)] (vi) a statement that the machinery and equipment are integral to the composting
277     or recycling process; and
278          [(F)] (vii) the amount of the qualifying taxpayer's tax credit[; and].
279          [(iii) for a claim of the tax credit described in Subsection (1)(b):]
280          [(A) the type of net expenditure that the taxpayer made to a third party;]
281          [(B) the date that the taxpayer made the payment to a third party;]
282          [(C) the amount that the taxpayer paid to each third party;]
283          [(D) the total amount that the taxpayer paid to all third parties;]
284          [(E) a statement that the net expenditures support the establishment and operation of
285     recycling or composting technology in the state; and]
286          [(F) the amount of the taxpayer's tax credit.]
287          (b) (i) The Department of Environmental Quality shall provide a qualifying taxpayer
288     seeking to claim a tax credit under Subsection [(1)] (2) with a copy of the written certification.
289          (ii) The qualifying taxpayer shall retain a copy of the written certification for the same
290     period of time that a person is required to keep books and records under Section 59-1-1406.
291          (c) The Department of Environmental Quality shall submit to the commission an
292     electronic list that includes:
293          (i) the name and identifying information of each qualifying taxpayer to which the
294     Department of Environmental Quality issues a written certification; and
295          (ii) for each qualifying taxpayer, the amount of each tax credit listed on the written
296     certification.
297          [(3)] (4) A qualifying taxpayer may not claim a tax credit [under Subsection (1)(a),
298     Subsection (1)(b), or both] that exceeds 40% of the qualifying taxpayer's state income tax
299     liability as the tax liability is calculated:
300          (a) for the taxable year in which the qualifying taxpayer made the purchases [or
301     payments];
302          (b) before any other tax credits the qualifying taxpayer may claim for the taxable year;
303     and
304          (c) before the qualifying taxpayer claims a tax credit authorized by this section.
305          [(4)] (5) The commission shall make rules governing what information a qualifying
306     taxpayer shall file with the commission to verify the entitlement to and amount of a tax credit.
307          [(5)] (6) Except as provided in Subsections [(6) through] (7) and (8), a qualifying
308     taxpayer may carry forward, to the next three taxable years, the amount of a tax credit
309     [described in Subsection (1)(a) that the] that the qualifying taxpayer does not use for the
310     taxable year.
311          [(6)] (7) A qualifying taxpayer may not claim or carry forward a tax credit [described
312     in Subsection (1)(a) in] under this section for a taxable year during which the qualifying
313     taxpayer claims or carries forward a tax credit under Section 63N-2-213.
314          [(7) A taxpayer may not claim a tax credit described in Subsection (1)(b) in a taxable
315     year during which the taxpayer claims or carries forward a tax credit under Section
316     63N-2-213.]
317          (8) A qualifying taxpayer may not claim or carry forward a tax credit under this section
318     for a taxable year during which the qualifying taxpayer claims the targeted business income tax
319     credit under Section 59-7-624.
320          Section 5. Section 59-7-612 is amended to read:
321          59-7-612. Tax credits for research activities conducted in the state -- Carry
322     forward -- Commission to report modification or repeal of certain federal provisions --
323     Revenue and Taxation Interim Committee study.
324          (1) (a) As used in this section:
325          (i) "Basic research" means the same as that term is defined in Section 41(e)(7), Internal
326     Revenue Code, except that the term includes only basic research conducted in this state.
327          (ii) "Committee" means the Revenue and Taxation Interim Committee.
328          (iii) "Qualified research" means the same as that term is defined in Section 41(d),
329     Internal Revenue Code, except that the term includes only qualified research conducted in this
330     state.
331          (iv) "Qualified research expenses" means the same as that term is defined in Section
332     41(b), Internal Revenue Code, except that the term includes only:
333          (A) in-house research expenses incurred in this state; and
334          (B) contract research expenses incurred in this state.
335          (v) "Qualifying taxpayer" means a taxpayer that receives a tax credit certificate in
336     accordance with Section 63N-20-102.
337          (b) Except as provided in Subsection (1)(a), a term used in this section that is defined
338     in Section 41, Internal Revenue Code, means the same as that term is defined in Section 41,
339     Internal Revenue Code.
340          (2) (a) A qualifying taxpayer [meeting the requirements of this section] may claim the
341     following nonrefundable tax credits calculated in accordance with Section 63N-20-103:
342          (i) a research tax credit [of 5% of the taxpayer's qualified research expenses for the
343     current taxable year that exceed the base amount provided for under Subsection (4)] for the
344     qualifying taxpayer's qualified research expenses during the taxable year;
345          (ii) a tax credit for a payment to a qualified organization during the taxable year for
346     basic research as provided in Section 41(e), Internal Revenue Code[, of 5% for the current
347     taxable year that exceed the base amount provided for under Subsection (4)]; and
348          (iii) [a tax credit equal to 7.5% of the taxpayer's qualified research expenses for the
349     current taxable year] an additional research tax credit for the taxpayer's qualified research
350     expenses during the taxable year.
351          (b) The amount of each tax credit that the qualifying taxpayer is eligible to claim under
352     Subsection (2)(a)(i), (ii), or (iii) is the amount listed on the tax credit certificate.
353          (c) Subject to Subsection [(5)] (4), a qualifying taxpayer may claim a tax credit under:
354          (i) Subsection [(1)(a)(i) or (1)(a)(iii)] (2)(a)(i) or (2)(a)(iii), for the taxable year for
355     which the qualifying taxpayer incurs the qualified research expenses; or
356          (ii) Subsection [(1)(a)(ii)] (2)(a)(ii), for the taxable year for which the qualifying
357     taxpayer makes the payment to the qualified organization.
358          [(c)] (d) The tax credits provided for in this section:
359          (i) do not include the alternative incremental credit provided for in Section 41(c)(4),
360     Internal Revenue Code[.]; and
361          (ii) do not terminate if a credit terminates under Section 41, Internal Revenue Code.
362          [(2)] (3) For purposes of claiming a tax credit under this section, a unitary group as
363     defined in Section 59-7-101 is considered to be one taxpayer.
364          [(3) Except as specifically provided for in this section:]
365          [(a) the tax credits authorized under Subsection (1) shall be calculated as provided in
366     Section 41, Internal Revenue Code; and]
367          [(b) the definitions provided in Section 41, Internal Revenue Code, apply in calculating
368     the tax credits authorized under Subsection (1).]
369          [(4) For purposes of this section:]
370          [(a) the base amount shall be calculated as provided in Sections 41(c) and 41(h),
371     Internal Revenue Code, except that:]
372          [(i) the base amount does not include the calculation of the alternative incremental
373     credit provided for in Section 41(c)(4), Internal Revenue Code;]
374          [(ii) a taxpayer's gross receipts include only those gross receipts attributable to sources
375     within this state as provided in Part 3, Allocation and Apportionment of Income - Utah
376     UDITPA Provisions; and]
377          [(iii) notwithstanding Section 41(c), Internal Revenue Code, for purposes of calculating
378     the base amount, a taxpayer:]
379          [(A) may elect to be treated as a start-up company as provided in Section 41(c)(3)(B)
380     regardless of whether the taxpayer meets the requirements of Section 41(c)(3)(B)(i)(I) or (II);
381     and]
382          [(B) may not revoke an election to be treated as a start-up company under Subsection
383     (4)(a)(iii)(A);]
384          [(b) "basic research" is as defined in Section 41(e)(7), Internal Revenue Code, except
385     that the term includes only basic research conducted in this state;]
386          [(c) "qualified research" is as defined in Section 41(d), Internal Revenue Code, except
387     that the term includes only qualified research conducted in this state;]
388          [(d) "qualified research expenses" is as defined and calculated in Section 41(b),
389     Internal Revenue Code, except that the term includes only:]
390          [(i) in-house research expenses incurred in this state; and]
391          [(ii) contract research expenses incurred in this state; and]
392          [(e) a tax credit provided for in this section is not terminated if a credit terminates
393     under Section 41, Internal Revenue Code.]
394          [(5)] (4) (a) If the amount of a tax credit claimed by a qualifying taxpayer under
395     Subsection [(1)(a)(i)] (2)(a)(i) or (ii) exceeds the qualifying taxpayer's tax liability under this
396     chapter for a taxable year, the [amount of the tax credit exceeding the tax liability] qualifying
397     taxpayer:
398          (i) may [be carried forward] carry forward the amount of the tax credit that exceeds the
399     qualifying taxpayer's tax liability for a period that does not exceed the next 14 taxable years;
400     and
401          (ii) may not [be carried back] carry back the amount of the tax credit that exceeds the
402     qualifying taxpayer's tax liability to a taxable year preceding the current taxable year.
403          (b) A qualifying taxpayer may not carry forward or carry back the tax credit allowed by
404     Subsection [(1)(a)(iii)] (2)(a)(iii).
405          [(6) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
406     the commission may make rules for purposes of this section prescribing a certification process
407     for qualified organizations to ensure that amounts paid to the qualified organizations are for
408     basic research conducted in this state.]
409          [(7)] (5) If a provision of Section 41, Internal Revenue Code, is modified or repealed,
410     the commission shall provide an electronic report of the modification or repeal to the [Revenue
411     and Taxation Interim Committee] committee within 60 days after the day on which the
412     modification or repeal becomes effective.
413          [(8)] (6) (a) The [Revenue and Taxation Interim Committee] committee shall review
414     the tax credits provided for in this section on or before October 1 of the year after the year in
415     which the commission reports under Subsection [(7)] (5) a modification or repeal of a
416     provision of Section 41, Internal Revenue Code.
417          (b) The review described in Subsection [(8)(a)] (6)(a) is in addition to the review
418     required by Section 59-7-159.
419          (c) Notwithstanding Subsection [(8)(a)] (6)(a), the [Revenue and Taxation Interim
420     Committee] committee is not required to review the tax credits provided for in this section if
421     the only modification to a provision of Section 41, Internal Revenue Code, is the extension of
422     the termination date provided for in Section 41(h), Internal Revenue Code.
423          (d) The [Revenue and Taxation Interim Committee] committee shall address in a
424     review under this section:
425          (i) the cost of the tax credits provided for in this section;
426          (ii) the purpose and effectiveness of the tax credits provided for in this section;
427          (iii) whether the tax credits provided for in this section benefit the state; and
428          (iv) whether the tax credits provided for in this section should be:
429          (A) continued;
430          (B) modified; or
431          (C) repealed.
432          (e) If the [Revenue and Taxation Interim Committee reviews the tax credits provided
433     for in this section] committee conducts a review under this Subsection (6), the committee shall
434     issue a report of the [Revenue and Taxation Interim Committee's] committee's findings.
435          Section 6. Section 59-7-614 is amended to read:
436          59-7-614. Renewable energy systems tax credits -- Definitions -- Certification --
437     Rulemaking authority.
438          (1) As used in this section:
439          (a) (i) "Active solar system" means a system of equipment that is capable of:
440          (A) collecting and converting incident solar radiation into thermal, mechanical, or
441     electrical energy; and
442          (B) transferring a form of energy described in Subsection (1)(a)(i)(A) by a separate
443     apparatus to storage or to the point of use.
444          (ii) "Active solar system" includes water heating, space heating or cooling, and
445     electrical or mechanical energy generation.
446          (b) "Biomass system" means a system of apparatus and equipment for use in:
447          (i) converting material into biomass energy, as defined in Section 59-12-102; and
448          (ii) transporting the biomass energy by separate apparatus to the point of use or storage.
449          (c) "Commercial energy system" means a system that is:
450          (i) (A) an active solar system;
451          (B) a biomass system;
452          (C) a direct use geothermal system;
453          (D) a geothermal electricity system;
454          (E) a geothermal heat pump system;
455          (F) a hydroenergy system;
456          (G) a passive solar system; or
457          (H) a wind system;
458          (ii) located in the state; and
459          (iii) used:
460          (A) to supply energy to a commercial unit; or
461          (B) as a commercial enterprise.
462          (d) "Commercial enterprise" means an entity, the purpose of which is to produce:
463          (i) electrical, mechanical, or thermal energy for sale from a commercial energy system;
464     or
465          (ii) hydrogen for sale from a hydrogen production system.
466          (e) (i) "Commercial unit" means a building or structure that an entity uses to transact
467     business.
468          (ii) Notwithstanding Subsection (1)(e)(i):
469          (A) with respect to an active solar system used for agricultural water pumping or a
470     wind system, each individual energy generating device is considered to be a commercial unit;
471     or
472          (B) if an energy system is the building or structure that an entity uses to transact
473     business, a commercial unit is the complete energy system itself.
474          (f) "Direct use geothermal system" means a system of apparatus and equipment that
475     enables the direct use of geothermal energy to meet energy needs, including heating a building,
476     an industrial process, and aquaculture.
477          (g) "Geothermal electricity" means energy that is:
478          (i) contained in heat that continuously flows outward from the earth; and
479          (ii) used as a sole source of energy to produce electricity.
480          (h) "Geothermal energy" means energy generated by heat that is contained in the earth.
481          (i) "Geothermal heat pump system" means a system of apparatus and equipment that:
482          (i) enables the use of thermal properties contained in the earth at temperatures well
483     below 100 degrees Fahrenheit; and
484          (ii) helps meet heating and cooling needs of a structure.
485          (j) "Hydroenergy system" means a system of apparatus and equipment that is capable
486     of:
487          (i) intercepting and converting kinetic water energy into electrical or mechanical
488     energy; and
489          (ii) transferring this form of energy by separate apparatus to the point of use or storage.
490          (k) "Hydrogen production system" means a system of apparatus and equipment, located
491     in this state, that uses:
492          (i) electricity from a renewable energy source to create hydrogen gas from water,
493     regardless of whether the renewable energy source is at a separate facility or the same facility
494     as the system of apparatus and equipment; or
495          (ii) uses renewable natural gas to produce hydrogen gas.
496          (l) "Office" means the Office of Energy Development created in Section 79-6-401.
497          (m) (i) "Passive solar system" means a direct thermal system that utilizes the structure
498     of a building and the structure's operable components to provide for collection, storage, and
499     distribution of heating or cooling during the appropriate times of the year by utilizing the
500     climate resources available at the site.
501          (ii) "Passive solar system" includes those portions and components of a building that
502     are expressly designed and required for the collection, storage, and distribution of solar energy.
503          (n) "Photovoltaic system" means an active solar system that generates electricity from
504     sunlight.
505          (o) (i) "Principal recovery portion" means the portion of a lease payment that
506     constitutes the cost a person incurs in acquiring a commercial energy system.
507          (ii) "Principal recovery portion" does not include:
508          (A) an interest charge; or
509          (B) a maintenance expense.
510          (p) "Renewable energy source" means the same as that term is defined in Section
511     54-17-601.
512          (q) "Residential energy system" means the following used to supply energy to or for a
513     residential unit:
514          (i) an active solar system;
515          (ii) a biomass system;
516          (iii) a direct use geothermal system;
517          (iv) a geothermal heat pump system;
518          (v) a hydroenergy system;
519          (vi) a passive solar system; or
520          (vii) a wind system.
521          (r) (i) "Residential unit" means a house, condominium, apartment, or similar dwelling
522     unit that:
523          (A) is located in the state; and
524          (B) serves as a dwelling for a person, group of persons, or a family.
525          (ii) "Residential unit" does not include property subject to a fee under:
526          (A) Section 59-2-405;
527          (B) Section 59-2-405.1;
528          (C) Section 59-2-405.2;
529          (D) Section 59-2-405.3; or
530          (E) Section 72-10-110.5.
531          (s) "Wind system" means a system of apparatus and equipment that is capable of:
532          (i) intercepting and converting wind energy into mechanical or electrical energy; and
533          (ii) transferring these forms of energy by a separate apparatus to the point of use, sale,
534     or storage.
535          (2) [A] For a taxable year beginning before January 1, 2034, a taxpayer may claim an
536     energy system tax credit as provided in this section against a tax due under this chapter [for a
537     taxable year].
538          (3) (a) Subject to the other provisions of this Subsection (3), a taxpayer may claim a
539     nonrefundable tax credit under this Subsection (3) with respect to a residential unit the taxpayer
540     owns or uses if:
541          (i) the taxpayer:
542          (A) purchases and completes a residential energy system to supply all or part of the
543     energy required for the residential unit; or
544          (B) participates in the financing of a residential energy system to supply all or part of
545     the energy required for the residential unit; and
546          (ii) the taxpayer obtains a written certification from the office in accordance with
547     Subsection (8).
548          (b) (i) Subject to Subsections (3)(b)(ii) through (iv) and, as applicable, Subsection
549     (3)(c) or (d), the tax credit is equal to 25% of the reasonable costs of each residential energy
550     system installed with respect to each residential unit the taxpayer owns or uses.
551          (ii) A tax credit under this Subsection (3) may include installation costs.
552          (iii) A taxpayer may claim a tax credit under this Subsection (3) for the taxable year in
553     which the residential energy system is completed and placed in service.
554          (iv) If the amount of a tax credit under this Subsection (3) exceeds a taxpayer's tax
555     liability under this chapter for a taxable year, the taxpayer may carry forward the amount of the
556     tax credit exceeding the liability for a period that does not exceed the next four taxable years.
557          (c) The total amount of tax credit a taxpayer may claim under this Subsection (3) for a
558     residential energy system, other than a photovoltaic system, may not exceed $2,000 per
559     residential unit.
560          (d) The total amount of tax credit a taxpayer may claim under this Subsection (3) for a
561     photovoltaic system may not exceed:
562          (i) for a system installed on or after January 1, 2018, but on or before December 31,
563     2020, $1,600;
564          (ii) for a system installed on or after January 1, 2021, but on or before December 31,
565     2021, $1,200;
566          (iii) for a system installed on or after January 1, 2022, but on or before December 31,
567     2022, $800;
568          (iv) for a system installed on or after January 1, 2023, but on or before December 31,
569     2023, $400; and
570          (v) for a system installed on or after January 1, 2024, $0.
571          (e) If a taxpayer sells a residential unit to another person before the taxpayer claims the
572     tax credit under this Subsection (3):
573          (i) the taxpayer may assign the tax credit to the other person; and
574          (ii) (A) if the other person files a return under this chapter, the other person may claim
575     the tax credit under this section as if the other person had met the requirements of this section
576     to claim the tax credit; or
577          (B) if the other person files a return under Chapter 10, Individual Income Tax Act, the
578     other person may claim the tax credit under Section 59-10-1014 as if the other person had met
579     the requirements of Section 59-10-1014 to claim the tax credit.
580          (4) (a) Subject to the other provisions of this Subsection (4), a taxpayer may claim a
581     refundable tax credit under this Subsection (4) with respect to a commercial energy system if:
582          (i) the commercial energy system does not use:
583          (A) wind, geothermal electricity, [solar,] or biomass equipment capable of producing a
584     total of 660 or more kilowatts of electricity; or
585          (B) solar equipment capable of producing 2,000 or more kilowatts of electricity;
586          (ii) the taxpayer purchases or participates in the financing of the commercial energy
587     system;
588          (iii) (A) the commercial energy system supplies all or part of the energy required by
589     commercial units owned or used by the taxpayer; or
590          (B) the taxpayer sells all or part of the energy produced by the commercial energy
591     system as a commercial enterprise;
592          (iv) the taxpayer has not claimed and will not claim a tax credit under Subsection (7)
593     for hydrogen production using electricity for which the taxpayer claims a tax credit under this
594     Subsection (4); and
595          (v) the taxpayer obtains a written certification from the office in accordance with
596     Subsection (8).
597          (b) (i) Subject to Subsections (4)(b)(ii) through (iv), the tax credit is equal to 10% of
598     the reasonable costs of the commercial energy system.
599          (ii) A tax credit under this Subsection (4) may include installation costs.
600          (iii) A taxpayer is eligible to claim a tax credit under this Subsection (4) for the taxable
601     year in which the commercial energy system is completed and placed in service.
602          (iv) The total amount of tax credit a taxpayer may claim under this Subsection (4) may
603     not exceed $50,000 per commercial unit.
604          (c) (i) Subject to Subsections (4)(c)(ii) and (iii), a taxpayer that is a lessee of a
605     commercial energy system installed on a commercial unit may claim a tax credit under this
606     Subsection (4) if the taxpayer confirms that the lessor irrevocably elects not to claim the tax
607     credit.
608          (ii) A taxpayer described in Subsection (4)(c)(i) may claim as a tax credit under this
609     Subsection (4) only the principal recovery portion of the lease payments.
610          (iii) A taxpayer described in Subsection (4)(c)(i) may claim a tax credit under this
611     Subsection (4) for a period that does not exceed seven taxable years after the day on which the
612     lease begins, as stated in the lease agreement.
613          (5) (a) Subject to the other provisions of this Subsection (5), a taxpayer may claim a
614     refundable tax credit under this Subsection (5) with respect to a commercial energy system if:
615          (i) the commercial energy system uses wind, geothermal electricity, or biomass
616     equipment capable of producing a total of 660 or more kilowatts of electricity;
617          (ii) (A) the commercial energy system supplies all or part of the energy required by
618     commercial units owned or used by the taxpayer; or
619          (B) the taxpayer sells all or part of the energy produced by the commercial energy
620     system as a commercial enterprise;
621          (iii) the taxpayer has not claimed and will not claim a tax credit under Subsection (7)
622     for hydrogen production using electricity for which the taxpayer claims a tax credit under this
623     Subsection (5); and
624          (iv) the taxpayer obtains a written certification from the office in accordance with
625     Subsection (8).
626          (b) (i) Subject to Subsection (5)(b)(ii), a tax credit under this Subsection (5) is equal to
627     the product of:
628          (A) 0.35 cents; and
629          (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
630          (ii) A taxpayer is eligible to claim a tax credit under this Subsection (5) for production
631     occurring during a period of 48 months beginning with the month in which the commercial
632     energy system is placed in commercial service.
633          (c) A taxpayer that is a lessee of a commercial energy system installed on a commercial
634     unit may claim a tax credit under this Subsection (5) if the taxpayer confirms that the lessor
635     irrevocably elects not to claim the tax credit.
636          (6) (a) Subject to the other provisions of this Subsection (6), a taxpayer may claim a
637     refundable tax credit as provided in this Subsection (6) if:
638          (i) the taxpayer owns a commercial energy system that uses solar equipment capable of
639     producing a total of [660] 2,000 or more kilowatts of electricity;
640          (ii) (A) the commercial energy system supplies all or part of the energy required by
641     commercial units owned or used by the taxpayer; or
642          (B) the taxpayer sells all or part of the energy produced by the commercial energy
643     system as a commercial enterprise;
644          (iii) the taxpayer does not claim a tax credit under Subsection (4) and has not claimed
645     and will not claim a tax credit under Subsection (7) for hydrogen production using electricity
646     for which a taxpayer claims a tax credit under this Subsection (6); and
647          (iv) the taxpayer obtains a written certification from the office in accordance with
648     Subsection (8).
649          (b) (i) Subject to Subsection (6)(b)(ii), a tax credit under this Subsection (6) is equal to
650     the product of:
651          (A) 0.35 cents; and
652          (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
653          (ii) A taxpayer is eligible to claim a tax credit under this Subsection (6) for production
654     occurring during a period of 48 months beginning with the month in which the commercial
655     energy system is placed in commercial service.
656          (c) A taxpayer that is a lessee of a commercial energy system installed on a commercial
657     unit may claim a tax credit under this Subsection (6) if the taxpayer confirms that the lessor
658     irrevocably elects not to claim the tax credit.
659          (7) (a) A taxpayer may claim a refundable tax credit as provided in this Subsection (7)
660     if:
661          (i) the taxpayer owns a hydrogen production system;
662          (ii) the hydrogen production system is completed and placed in service on or after
663     January 1, 2022;
664          (iii) the taxpayer sells as a commercial enterprise, or supplies for the taxpayer's own
665     use in commercial units, the hydrogen produced from the hydrogen production system;
666          (iv) the taxpayer has not claimed and will not claim a tax credit under Subsection (4),
667     (5), or (6) or Section 59-7-626 for electricity or hydrogen used to meet the requirements of this
668     Subsection (7); and
669          (v) the taxpayer obtains a written certification from the office in accordance with
670     Subsection (8).
671          (b) (i) Subject to Subsections (7)(b)(ii) and (iii), a tax credit under this Subsection (7)
672     is equal to the product of:
673          (A) $0.12; and
674          (B) the number of kilograms of hydrogen produced during the taxable year.
675          (ii) A taxpayer may not receive a tax credit under this Subsection (7) for more than
676     5,600 metric tons of hydrogen per taxable year.
677          (iii) A taxpayer is eligible to claim a tax credit under this Subsection (7) for production
678     occurring during a period of 48 months beginning with the month in which the hydrogen
679     production system is placed in commercial service.
680          (8) (a) Before a taxpayer may claim a tax credit under this section, the taxpayer shall
681     obtain a written certification from the office.
682          (b) The office shall issue a taxpayer a written certification if the office determines that:
683          (i) the taxpayer meets the requirements of this section to receive a tax credit; and
684          (ii) the residential energy system, the commercial energy system, or the hydrogen
685     production system with respect to which the taxpayer seeks to claim a tax credit:
686          (A) has been completely installed;
687          (B) is a viable system for saving or producing energy from renewable resources; and
688          (C) is safe, reliable, efficient, and technically feasible to ensure that the residential
689     energy system, the commercial energy system, or the hydrogen production system uses the
690     state's renewable and nonrenewable energy resources in an appropriate and economic manner.
691          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
692     office may make rules:
693          (i) for determining whether a residential energy system, a commercial energy system,
694     or a hydrogen production system meets the requirements of Subsection (8)(b)(ii); and
695          (ii) for purposes of a tax credit under Subsection (3) or (4), establishing the reasonable
696     costs of a residential energy system or a commercial energy system, as an amount per unit of
697     energy production.
698          (d) A taxpayer that obtains a written certification from the office shall retain the
699     certification for the same time period a person is required to keep books and records under
700     Section 59-1-1406.
701          (e) The office shall submit to the commission an electronic list that includes:
702          (i) the name and identifying information of each taxpayer to which the office issues a
703     written certification; and
704          (ii) for each taxpayer:
705          (A) the amount of the tax credit listed on the written certification; and
706          (B) the date the renewable energy system was installed.
707          (9) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
708     commission may make rules to address the certification of a tax credit under this section.
709          (10) A tax credit under this section is in addition to any tax credits provided under the
710     laws or rules and regulations of the United States.
711          Section 7. Section 59-7-626 is amended to read:
712          59-7-626. Refundable tax credit for nonrenewable hydrogen production system.
713          (1) As used in this section:
714          (a) "Commercial enterprise" means an entity, the purpose of which is to produce
715     hydrogen for sale from a hydrogen production system.
716          (b) "Commercial unit" means a building or structure that an entity uses to transact
717     business.
718          (c) "Hydrogen production system" means a system of apparatus and equipment, located
719     in this state, that produces hydrogen from nonrenewable sources.
720          (d) "Office" means the Office of Energy Development created in Section 79-6-401.
721          (2) (a) [A] For a taxable year beginning before January 1, 2034, a taxpayer may claim a
722     refundable credit under this section if:
723          (i) the taxpayer owns a hydrogen production system;
724          (ii) the hydrogen production system is completed and placed in service on or after
725     January 1, 2022;
726          (iii) the taxpayer sells as a commercial enterprise, or supplies for the taxpayer's own
727     use in commercial units, the hydrogen produced from the hydrogen production system;
728          (iv) the taxpayer has not claimed and will not claim a tax credit under Section 59-7-614
729     for electricity used to meet the requirements of this section; and
730          (v) the taxpayer obtains a written certification from the office in accordance with
731     Subsection (3).
732          (b) (i) Subject to Subsections (2)(b)(ii) and (iii), a tax credit under this section is equal
733     to the product of:
734          (A) $0.12; and
735          (B) the number of kilograms of hydrogen produced during the taxable year.
736          (ii) A taxpayer may not receive a tax credit under this section for more than 5,600
737     metric tons of hydrogen per taxable year.
738          (iii) A taxpayer is eligible to claim a tax credit under this section for production
739     occurring during a period of 48 months beginning with the month in which the hydrogen
740     production system is placed in commercial service.
741          (3) (a) Before a taxpayer may claim a tax credit under this section, the taxpayer shall
742     obtain a written certification from the office.
743          (b) The office shall issue a taxpayer a written certification if the office determines that:
744          (i) the taxpayer meets the requirements of this section to receive a tax credit; and
745          (ii) the hydrogen production system with respect to which the taxpayer seeks to claim a
746     tax credit:
747          (A) has been completely installed; and
748          (B) is safe, reliable, efficient, and technically feasible to ensure that the hydrogen
749     production system uses the state's nonrenewable energy resources in an appropriate and
750     economic manner.
751          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
752     office may make rules for determining whether a hydrogen production system meets the
753     requirements of Subsection (3)(b)(ii).
754          (d) A taxpayer that obtains a written certification from the office shall retain the
755     certification for the same time period a person is required to keep books and records under
756     Section 59-1-1406.
757          (e) The office shall submit to the commission an electronic list that includes:
758          (i) the name and identifying information of each taxpayer to which the office issues a
759     written certification; and
760          (ii) for each taxpayer:
761          (A) the amount of the tax credit listed on the written certification; and
762          (B) the date the hydrogen production system was installed.
763          (4) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
764     commission may make rules to address the certification of a tax credit under this section.
765          (5) A tax credit under this section is in addition to any tax credits provided under the
766     laws or rules and regulations of the United States.
767          Section 8. Section 59-10-137 is amended to read:
768          59-10-137. Review of credits allowed under this chapter.
769          (1) As used in this section, "committee" means the Revenue and Taxation Interim
770     Committee.
771          (2) (a) The committee shall review the tax credits described in this chapter as provided
772     in Subsection (3) and make recommendations concerning whether the tax credits should be
773     continued, modified, or repealed.
774          (b) In conducting the review required under Subsection (2)(a), the committee shall:
775          (i) schedule time on at least one committee agenda to conduct the review;
776          (ii) invite state agencies, individuals, and organizations concerned with the tax credit
777     under review to provide testimony;
778          (iii) (A) invite the Governor's Office of Economic Opportunity to present a summary
779     and analysis of the information for each tax credit regarding which the Governor's Office of
780     Economic Opportunity is required to make a report under this chapter; and
781          (B) invite the Office of the Legislative Fiscal Analyst to present a summary and
782     analysis of the information for each tax credit regarding which the Office of the Legislative
783     Fiscal Analyst is required to make a report under this chapter;
784          (iv) ensure that the committee's recommendations described in this section include an
785     evaluation of:
786          (A) the cost of the tax credit to the state;
787          (B) the purpose and effectiveness of the tax credit; and
788          (C) the extent to which the state benefits from the tax credit; [and]
789          (v) evaluate whether performance metrics or reporting requirements for the tax credit
790     would improve the committee's evaluation of the benefits to the claimant, estate, or trust and
791     the state from the tax credit; and
792          [(v)] (vi) undertake other review efforts as determined by the committee chairs or as
793     otherwise required by law.
794          (c) The committee shall prepare legislation for consideration by the Legislature at the
795     next general session recommending specific performance metrics or reporting requirements for
796     any tax credit that the committee determines meets the requirement described in Subsection
797     (2)(b)(v).
798          (3) (a) On or before November 30, 2017, and every three years after 2017, the
799     committee shall conduct the review required under Subsection (2) of the tax credits allowed
800     under the following sections:
801          (i) Section 59-10-1004;
802          (ii) Section 59-10-1010;
803          (iii) Section 59-10-1015;
804          [(iv) Section 59-10-1025;]
805          [(v)] (iv) Section 59-10-1027;
806          [(vi)] (v) Section 59-10-1031;
807          [(vii)] (vi) Section 59-10-1032;
808          [(viii)] (vii) Section 59-10-1035;
809          [(ix)] (viii) Section 59-10-1104;
810          [(x)] (ix) Section 59-10-1105; and
811          [(xi)] (x) Section 59-10-1108.
812          (b) On or before November 30, 2018, and every three years after 2018, the committee
813     shall conduct the review required under Subsection (2) of the tax credits allowed under the
814     following sections:
815          (i) Section 59-10-1005;
816          (ii) Section 59-10-1006;
817          (iii) Section 59-10-1012;
818          (iv) Section 59-10-1022;
819          (v) Section 59-10-1023;
820          (vi) Section 59-10-1028;
821          (vii) Section 59-10-1034;
822          (viii) Section 59-10-1037; and
823          (ix) Section 59-10-1107.
824          (c) On or before November 30, 2019, and every three years after 2019, the committee
825     shall conduct the review required under Subsection (2) of the tax credits allowed under the
826     following sections:
827          (i) Section 59-10-1007;
828          (ii) Section 59-10-1014;
829          (iii) Section 59-10-1017;
830          (iv) Section 59-10-1018;
831          (v) Section 59-10-1019;
832          [(vi) Section 59-10-1024;]
833          [(vii) Section 59-10-1029;]
834          [(viii)] (vi) Section 59-10-1036;
835          [(ix)] (vii) Section 59-10-1106; and
836          [(x)] (viii) Section 59-10-1111.
837          (d) (i) In addition to the reviews described in this Subsection (3), the committee shall
838     conduct a review of a tax credit described in this chapter that is enacted on or after January 1,
839     2017.
840          (ii) The committee shall complete a review described in this Subsection (3)(d) three
841     years after the effective date of the tax credit and every three years after the initial review date.
842          Section 9. Section 59-10-1002.2 is amended to read:
843          59-10-1002.2. Apportionment of tax credits.
844          (1) A nonresident individual or a part-year resident individual that claims a tax credit
845     in accordance with Section 59-10-1017, 59-10-1018, 59-10-1019, 59-10-1022, 59-10-1023[,
846     59-10-1024], 59-10-1028, 59-10-1042, 59-10-1043, or 59-10-1044 may only claim an
847     apportioned amount of the tax credit equal to:
848          (a) for a nonresident individual, the product of:
849          (i) the state income tax percentage for the nonresident individual; and
850          (ii) the amount of the tax credit that the nonresident individual would have been
851     allowed to claim but for the apportionment requirements of this section; or
852          (b) for a part-year resident individual, the product of:
853          (i) the state income tax percentage for the part-year resident individual; and
854          (ii) the amount of the tax credit that the part-year resident individual would have been
855     allowed to claim but for the apportionment requirements of this section.
856          (2) A nonresident estate or trust that claims a tax credit in accordance with Section
857     59-10-1017, 59-10-1020, 59-10-1022[, 59-10-1024], or 59-10-1028 may only claim an
858     apportioned amount of the tax credit equal to the product of:
859          (a) the state income tax percentage for the nonresident estate or trust; and
860          (b) the amount of the tax credit that the nonresident estate or trust would have been
861     allowed to claim but for the apportionment requirements of this section.
862          Section 10. Section 59-10-1006 is repealed and reenacted to read:
863          59-10-1006. Historic preservation tax credit.
864          (1) As used in this section:
865          (a) "Certified historic building" means a building that:
866          (i) is listed on the National Register of Historic Places within three years of taking the
867     credit under this section; or
868          (ii) (A) is located in a National Register Historic District; and
869          (B) has been designated by the office as being of significance to the district.
870          (b) "Office" means the State Historic Preservation Office.
871          (c) (i) "Qualified rehabilitation expenditures" means any amount properly chargeable to
872     the rehabilitation and restoration of the physical elements of the building.
873          (ii) "Qualified rehabilitation expenditures" includes the historic decorative elements
874     and the upgrading of the structural, mechanical, electrical, and plumbing systems.
875          (iii) "Qualified rehabilitation expenditures" does not include expenditures related to:
876          (A) the claimant's, estate's, or trust's personal labor;
877          (B) cost of acquisition of the property;
878          (C) any expenditure attributable to the enlargement of an existing building;
879          (D) rehabilitation of a certified historic building without the approval required in
880     Subsection (3)(a)(i);
881          (E) an expenditure attributable to landscaping or other site features, outbuildings,
882     garages, and related features; or
883          (F) demolition and removal costs for an existing building on a property site.
884          (d) "Residential" means a building used for residential use, either owner occupied or
885     income producing.
886          (2) A claimant, estate, or trust may claim a nonrefundable tax credit in an amount equal
887     to 20% of qualified rehabilitation expenditures if:
888          (a) the qualified rehabilitation expenditures cost more than $10,000;
889          (b) the qualified rehabilitation expenditures are incurred in connection with a
890     residential certified historic building; and
891          (c) the claimant, estate, or trust has a written tax credit certificate issued in accordance
892     with Subsection (3).
893          (3) (a) The office shall issue a tax credit certificate if the office:
894          (i) approves all rehabilitation work for which a claimant, estate, or trust may claim a
895     tax credit as meeting the Secretary of the Interior's Standards for Rehabilitation before
896     completion of the rehabilitation project so that the office can provide corrective comments to
897     the claimant, estate, or trust to preserve the historic qualities of the building;
898          (ii) determines that the rehabilitation project conforms with the approved rehabilitation
899     work; and
900          (iii) verifies the property is a residential certified historic building and the amount of
901     the claimant's, estate's, or trust's qualified rehabilitation expenditures.
902          (b) The tax credit certificate shall list the amount of the tax credit that the claimant,
903     estate, or trust is eligible to claim.
904          (c) A claimant, estate, or trust that receives a tax credit certificate under this section
905     shall retain the tax credit certificate for the same time period a person is required to keep books
906     and records under Section 59-1-1406.
907          (d) The office shall provide the commission with an electronic report that includes for
908     each claimant, estate, or trust to which the office issued a tax credit certificate under this
909     section for a taxable year:
910          (i) the name of the claimant, estate, or trust;
911          (ii) the identifying information of the claimant, estate, or trust; and
912          (iii) the amount of tax credit that the claimant, estate, or trust is eligible to claim.
913          (4) A claimant, estate, or trust may carry forward the amount of the tax credit that
914     exceeds the claimant's, estate's, or trust's tax liability for five taxable years after the year in
915     which the claimant, estate, or trust claims a tax credit under this section.
916          (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
917     commission, in consultation with the office, shall make rules to implement this section.
918          (6) The office shall include the number of estimated new jobs created in the state from
919     rehabilitation work in the annual report described in Section 9-1-208.
920          Section 11. Section 59-10-1007 is amended to read:
921          59-10-1007. Recycling market development zones tax credits.
922          (1) As used in this section, "qualifying claimant, estate, or trust" means a business that:
923          (a) operates in a recycling market development zone as defined in Section 19-13-102;
924     and
925          (b) is not eligible for a sales and use tax exemption under Subsection 59-12-104(14).
926          (2) Subject to other provisions of this section, a qualifying claimant, estate, or trust [in
927     a recycling market development zone as defined in Section 19-13-102 may claim the following
928     nonrefundable tax credits:]
929          [(a)] may claim a nonrefundable tax credit equal to the product of the percentage listed
930     in Subsection 59-10-104(2) and the purchase price paid for machinery and equipment used
931     directly in:
932          [(i)] (a) commercial composting; or
933          [(ii)] (b) manufacturing facilities or plant units that[: (A) manufacture, process,
934     compound, or produce recycled items of tangible personal property for sale; or (B)] reduce or
935     reuse postconsumer waste material[; and].
936          [(b) a tax credit equal to the lesser of:]
937          [(i) 20% of net expenditures to third parties for rent, wages, supplies, tools, test
938     inventory, and utilities made by the claimant, estate, or trust for establishing and operating
939     recycling or composting technology in the state; and]
940          [(ii) $2,000.]
941          [(2)] (3) (a) To claim a tax credit described in Subsection [(1)] (2), the qualifying
942     claimant, estate, or trust shall receive from the Department of Environmental Quality a written
943     certification, on a form approved by the commission, that includes:
944          (i) a statement that the claimant, estate, or trust is [operating within the boundaries of a
945     recycling market development zone] a qualifying claimant, estate, or trust;
946          [(ii) for a claim of the tax credit described in Subsection (1)(a):]
947          [(A)] (ii) the type of the machinery and equipment that the qualifying claimant, estate,
948     or trust purchased;
949          [(B)] (iii) the date that the qualifying claimant, estate, or trust purchased the machinery
950     and equipment;
951          [(C)] (iv) the purchase price for [the] each item of machinery and equipment;
952          [(D)] (v) the total purchase price for all machinery and equipment for which the
953     qualifying claimant, estate, or trust is claiming a tax credit;
954          (vi) a statement that the machinery and equipment are integral to the composting or
955     recycling process; and
956          [(E)] (vii) the amount of the qualifying claimant's, estate's, or trust's tax credit[; and].
957          [(F) a statement that the machinery and equipment are integral to the composting or
958     recycling process; and]
959          [(iii) for a claim of the tax credit described in Subsection (1)(b):]
960          [(A) the type of net expenditure that the claimant, estate, or trust made to a third party;]
961          [(B) the date that the claimant, estate, or trust made the payment to a third party;]
962          [(C) the amount that the claimant, estate, or trust paid to each third party;]
963          [(D) the total amount that the claimant, estate, or trust paid to all third parties;]
964          [(E) a statement that the net expenditures support the establishment and operation of
965     recycling or composting technology in the state; and]
966          [(F) the amount of the claimant's, estate's, or trust's tax credit.]
967          (b) (i) The Department of Environmental Quality shall provide a qualifying claimant,
968     estate, or trust seeking to claim a tax credit under Subsection [(1)] (2) with a copy of the
969     written certification.
970          (ii) The qualifying claimant, estate, or trust shall retain a copy of the written
971     certification for the same period of time that a person is required to keep books and records
972     under Section 59-1-1406.
973          (c) The Department of Environmental Quality shall submit to the commission an
974     electronic list that includes:
975          (i) the name and identifying information of each qualifying claimant, estate, or trust to
976     which the Department of Environmental Quality issues a written certification; and
977          (ii) for each qualifying claimant, estate, or trust, the amount of each tax credit listed on
978     the written certification.
979          [(3)] (4) A qualifying claimant, estate, or trust may not claim a tax credit [under
980     Subsection (1)(a), Subsection (1)(b), or both] that exceeds 40% of the qualifying claimant's,
981     estate's, or trust's state income tax liability as the tax liability is calculated:
982          (a) for the taxable year in which the qualifying claimant, estate, or trust made the
983     purchases [or payments];
984          (b) before any other tax credits the qualifying claimant, estate, or trust may claim for
985     the taxable year; and
986          (c) before the qualifying claimant, estate, or trust claims a tax credit authorized by this
987     section.
988          [(4)] (5) The commission shall make rules governing what information a qualifying
989     claimant, estate, or trust shall file with the commission to verify the entitlement to and amount
990     of a tax credit.
991          [(5)] (6) Except as provided in Subsections [(6) through] (7) and (8), a qualifying
992     claimant, estate, or trust may carry forward, to the next three taxable years, the amount of a tax
993     credit [described in Subsection (1)(a)] that the qualifying claimant, estate, or trust does not use
994     for the taxable year.
995          [(6)] (7) A qualifying claimant, estate, or trust may not claim or carry forward a tax
996     credit [described in Subsection (1)(a) in] under this section for a taxable year during which the
997     qualifying claimant, estate, or trust claims or carries forward a tax credit under Section
998     63N-2-213.
999          [(7) A claimant, estate, or trust may not claim a tax credit described in Subsection
1000     (1)(b) in a taxable year during which the claimant, estate, or trust claims or carries forward a
1001     tax credit under Section 63N-2-213.]
1002          (8) A qualifying claimant, estate, or trust may not claim or carry forward a tax credit
1003     under this section for a taxable year during which the qualifying claimant, estate, or trust
1004     claims the targeted business income tax credit under Section 59-10-1112.
1005          Section 12. Section 59-10-1012 is amended to read:
1006          59-10-1012. Tax credits for research activities conducted in the state -- Carry
1007     forward -- Commission to report modification or repeal of certain federal provisions --
1008     Revenue and Taxation Interim Committee study.
1009          (1) (a) As used in this section:
1010          (i) "Basic research" means the same as that term is defined in Section 41(e)(7), Internal
1011     Revenue Code, except that the term includes only basic research conducted in this state.
1012          (ii) "Committee" means the Revenue and Taxation Interim Committee.
1013          (iii) "Qualified research" means the same as that term is defined in Section 41(d),
1014     Internal Revenue Code, except that the term includes only qualified research conducted in this
1015     state.
1016          (iv) "Qualified research expenses" means the same as that term is defined in Section
1017     41(b), Internal Revenue Code, except that the term includes only:
1018          (A) in-house research expenses incurred in this state; and
1019          (B) contract research expenses incurred in this state.
1020          (v) "Qualifying claimant" means a claimant, an estate, or a trust that receives a tax
1021     credit certificate in accordance with Section 63N-20-102.
1022          (b) Except as provided in Subsection (1)(a), a term used in this section that is defined
1023     in Section 41, Internal Revenue Code, means the same as that term is defined in Section 41,
1024     Internal Revenue Code.
1025          (2) (a) A qualifying claimant[, estate, or trust meeting the requirements of this section]
1026     may claim the following nonrefundable tax credits calculated in accordance with Section
1027     63N-20-103:
1028          (i) a research tax credit [of 5% of the claimant's, estate's, or trust's qualified research
1029     expenses for the current taxable year that exceed the base amount provided for under
1030     Subsection (3)] for the qualifying claimant's research expenses during the taxable year;
1031          (ii) a tax credit for a payment to a qualified organization during the taxable year for
1032     basic research as provided in Section 41(e), Internal Revenue Code [of 5% for the current
1033     taxable year that exceed the base amount provided for under Subsection (3)]; and
1034          (iii) [a tax credit equal to 7.5% of the claimant's, estate's, or trust's qualified research
1035     expenses for the current taxable year] an additional research tax credit for the qualifying
1036     claimant's qualified research expenses during the taxable year.
1037          (b) The amount of each tax credit that the qualifying claimant is eligible to claim under
1038     Subsection (2)(a)(i), (ii), or (iii) is the amount listed on the tax credit certificate.
1039          [(b)] (c) Subject to Subsection [(4)] (3), a qualifying claimant[, estate, or trust] may
1040     claim a tax credit under:
1041          (i) Subsection [(1)(a)(i) or (1)(a)(iii)] (2)(a)(i) or (2)(a)(iii), for the taxable year for
1042     which the qualifying claimant[, estate, or trust] incurs the qualified research expenses; or
1043          (ii) Subsection [(1)(a)(ii)] (2)(a)(ii), for the taxable year for which the qualifying
1044     claimant[, estate, or trust] makes the payment to the qualified organization.
1045          [(c)] (d) The tax credits provided for in this section:
1046          (i) do not include the alternative incremental credit provided for in Section 41(c)(4),
1047     Internal Revenue Code[.]; and
1048          (ii) do not terminate if a credit terminates under Section 41, Internal Revenue Code.
1049          [(2) Except as specifically provided for in this section:]
1050          [(a) the tax credits authorized under Subsection (1) shall be calculated as provided in
1051     Section 41, Internal Revenue Code; and]
1052          [(b) the definitions provided in Section 41, Internal Revenue Code, apply in calculating
1053     the tax credits authorized under Subsection (1).]
1054          [(3) For purposes of this section:]
1055          [(a) the base amount shall be calculated as provided in Sections 41(c) and 41(h),
1056     Internal Revenue Code, except that:]
1057          [(i) the base amount does not include the calculation of the alternative incremental
1058     credit provided for in Section 41(c)(4), Internal Revenue Code;]
1059          [(ii) a claimant's, estate's, or trust's gross receipts include only those gross receipts
1060     attributable to sources within this state as provided in Section 59-10-118; and]
1061          [(iii) notwithstanding Section 41(c), Internal Revenue Code, for purposes of calculating
1062     the base amount, a claimant, estate, or trust:]
1063          [(A) may elect to be treated as a start-up company as provided in Section 41(c)(3)(B),
1064     Internal Revenue Code, regardless of whether the claimant, estate, or trust meets the
1065     requirements of Section 41(c)(3)(B)(i)(I) or (II), Internal Revenue Code; and]
1066          [(B) may not revoke an election to be treated as a start-up company under Subsection
1067     (3)(a)(iii)(A);]
1068          [(b) "basic research" is as defined in Section 41(e)(7), Internal Revenue Code, except
1069     that the term includes only basic research conducted in this state;]
1070          [(c) "qualified research" is as defined in Section 41(d), Internal Revenue Code, except
1071     that the term includes only qualified research conducted in this state;]
1072          [(d) "qualified research expenses" is as defined and calculated in Section 41(b),
1073     Internal Revenue Code, except that the term includes only:]
1074          [(i) in-house research expenses incurred in this state; and]
1075          [(ii) contract research expenses incurred in this state; and]
1076          [(e) a tax credit provided for in this section is not terminated if a credit terminates
1077     under Section 41, Internal Revenue Code.]
1078          [(4)] (3) (a) If the amount of a tax credit claimed by a qualifying claimant[, estate, or
1079     trust] under Subsection [(1)(a)(i)] (2)(a)(i) or (ii) exceeds the qualifying claimant's[, estate's, or
1080     trust's] tax liability under this chapter for a taxable year, the [amount of the tax credit exceeding
1081     the tax liability] qualifying claimant:
1082          (i) may [be carried forward] carry forward the amount of the tax credit that exceeds the
1083     qualifying claimant's tax liability for a period that does not exceed the next 14 taxable years;
1084     and
1085          (ii) may not [be carried back] carry back the amount of the tax credit that exceeds the
1086     qualifying claimant's tax liability to a taxable year preceding the current taxable year.
1087          (b) A qualifying claimant[, estate, or trust] may not carry forward or carry back the tax
1088     credit allowed by Subsection [(1)(a)(iii)] (2)(a)(iii).
1089          [(5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
1090     the commission may make rules for purposes of this section prescribing a certification process
1091     for qualified organizations to ensure that amounts paid to the qualified organizations are for
1092     basic research conducted in this state.]
1093          [(6)] (4) If a provision of Section 41, Internal Revenue Code, is modified or repealed,
1094     the commission shall report the modification or repeal by electronic means to the [Revenue and
1095     Taxation Interim Committee] committee within 60 days after the day on which the
1096     modification or repeal becomes effective.
1097          [(7)] (5) (a) The [Revenue and Taxation Interim Committee] committee shall review
1098     the tax credits provided for in this section on or before October 1 of the year after the year in
1099     which the commission reports under Subsection [(6)] (4) a modification or repeal of a
1100     provision of Section 41, Internal Revenue Code.
1101          (b) The review described in Subsection [(7)(a)] (5)(a) is in addition to the review
1102     required by Section 59-10-137.
1103          (c) Notwithstanding Subsection [(7)(a)] (5)(a), the [Revenue and Taxation Interim
1104     Committee] committee is not required to review the tax credits provided for in this section if
1105     the only modification to a provision of Section 41, Internal Revenue Code, is the extension of
1106     the termination date provided for in Section 41(h), Internal Revenue Code.
1107          (d) The [Revenue and Taxation Interim Committee] committee shall address in a
1108     review under this section:
1109          (i) the cost of the tax credits provided for in this section;
1110          (ii) the purpose and effectiveness of the tax credits provided for in this section;
1111          (iii) whether the tax credits provided for in this section benefit the state; and
1112          (iv) whether the tax credits provided for in this section should be:
1113          (A) continued;
1114          (B) modified; or
1115          (C) repealed.
1116          (e) If the [Revenue and Taxation Interim Committee reviews the tax credits provided
1117     for in this section] committee conducts a review under this Subsection (5), the committee shall
1118     issue a report of the Revenue and Taxation Interim Committee's findings.
1119          Section 13. Section 59-10-1014 is amended to read:
1120          59-10-1014. Nonrefundable renewable energy systems tax credits -- Definitions --
1121     Certification -- Rulemaking authority.
1122          (1) As used in this section:
1123          (a) (i) "Active solar system" means a system of equipment that is capable of:
1124          (A) collecting and converting incident solar radiation into thermal, mechanical, or
1125     electrical energy; and
1126          (B) transferring a form of energy described in Subsection (1)(a)(i)(A) by a separate
1127     apparatus to storage or to the point of use.
1128          (ii) "Active solar system" includes water heating, space heating or cooling, and
1129     electrical or mechanical energy generation.
1130          (b) "Biomass system" means a system of apparatus and equipment for use in:
1131          (i) converting material into biomass energy, as defined in Section 59-12-102; and
1132          (ii) transporting the biomass energy by separate apparatus to the point of use or storage.
1133          (c) "Direct use geothermal system" means a system of apparatus and equipment that
1134     enables the direct use of geothermal energy to meet energy needs, including heating a building,
1135     an industrial process, and aquaculture.
1136          (d) "Geothermal electricity" means energy that is:
1137          (i) contained in heat that continuously flows outward from the earth; and
1138          (ii) used as a sole source of energy to produce electricity.
1139          (e) "Geothermal energy" means energy generated by heat that is contained in the earth.
1140          (f) "Geothermal heat pump system" means a system of apparatus and equipment that:
1141          (i) enables the use of thermal properties contained in the earth at temperatures well
1142     below 100 degrees Fahrenheit; and
1143          (ii) helps meet heating and cooling needs of a structure.
1144          (g) "Hydroenergy system" means a system of apparatus and equipment that is capable
1145     of:
1146          (i) intercepting and converting kinetic water energy into electrical or mechanical
1147     energy; and
1148          (ii) transferring this form of energy by separate apparatus to the point of use or storage.
1149          (h) "Office" means the Office of Energy Development created in Section 79-6-401.
1150          (i) (i) "Passive solar system" means a direct thermal system that utilizes the structure of
1151     a building and its operable components to provide for collection, storage, and distribution of
1152     heating or cooling during the appropriate times of the year by utilizing the climate resources
1153     available at the site.
1154          (ii) "Passive solar system" includes those portions and components of a building that
1155     are expressly designed and required for the collection, storage, and distribution of solar energy.
1156          (j) "Photovoltaic system" means an active solar system that generates electricity from
1157     sunlight.
1158          (k) (i) "Principal recovery portion" means the portion of a lease payment that
1159     constitutes the cost a person incurs in acquiring a residential energy system.
1160          (ii) "Principal recovery portion" does not include:
1161          (A) an interest charge; or
1162          (B) a maintenance expense.
1163          (l) "Residential energy system" means the following used to supply energy to or for a
1164     residential unit:
1165          (i) an active solar system;
1166          (ii) a biomass system;
1167          (iii) a direct use geothermal system;
1168          (iv) a geothermal heat pump system;
1169          (v) a hydroenergy system;
1170          (vi) a passive solar system; or
1171          (vii) a wind system.
1172          (m) (i) "Residential unit" means a house, condominium, apartment, or similar dwelling
1173     unit that:
1174          (A) is located in the state; and
1175          (B) serves as a dwelling for a person, group of persons, or a family.
1176          (ii) "Residential unit" does not include property subject to a fee under:
1177          (A) Section 59-2-405;
1178          (B) Section 59-2-405.1;
1179          (C) Section 59-2-405.2;
1180          (D) Section 59-2-405.3; or
1181          (E) Section 72-10-110.5.
1182          (n) "Wind system" means a system of apparatus and equipment that is capable of:
1183          (i) intercepting and converting wind energy into mechanical or electrical energy; and
1184          (ii) transferring these forms of energy by a separate apparatus to the point of use or
1185     storage.
1186          (2) [A] For a taxable year beginning before January 1, 2034, a claimant, estate, or trust
1187     may claim an energy system tax credit as provided in this section against a tax due under this
1188     chapter [for a taxable year].
1189          (3) [For a taxable year beginning on or after January 1, 2007, a] A claimant, estate, or
1190     trust may claim a nonrefundable tax credit under this section with respect to a residential unit
1191     the claimant, estate, or trust owns or uses if:
1192          (a) the claimant, estate, or trust:
1193          (i) purchases and completes a residential energy system to supply all or part of the
1194     energy required for the residential unit; or
1195          (ii) participates in the financing of a residential energy system to supply all or part of
1196     the energy required for the residential unit;
1197          (b) the residential energy system is installed on or after January 1, 2007; and
1198          (c) the claimant, estate, or trust obtains a written certification from the office in
1199     accordance with Subsection (5).
1200          (4) (a) For a residential energy system, other than a photovoltaic system, the tax credit
1201     described in this section is equal to the lesser of:
1202          (i) 25% of the reasonable costs, including installation costs, of each residential energy
1203     system installed with respect to each residential unit the claimant, estate, or trust owns or uses;
1204     and
1205          (ii) $2,000.
1206          (b) Subject to Subsection (5)(d), for a residential energy system that is a photovoltaic
1207     system, the tax credit described in this section is equal to the lesser of:
1208          (i) 25% of the reasonable costs, including installation costs, of each system installed
1209     with respect to each residential unit the claimant, estate, or trust owns or uses; or
1210          (ii) (A) for a system installed on or after January 1, 2007, but on or before December
1211     31, 2017, $2,000;
1212          (B) for a system installed on or after January 1, 2018, but on or before December 31,
1213     2020, $1,600;
1214          (C) for a system installed on or after January 1, 2021, but on or before December 31,
1215     2021, $1,200;
1216          (D) for a system installed on or after January 1, 2022, but on or before December 31,
1217     2022, $800;
1218          (E) for a system installed on or after January 1, 2023, but on or before December 31,
1219     2023, $400; and
1220          (F) for a system installed on or after January 1, 2024, $0.
1221          (c) (i) The office shall determine the amount of the tax credit that a claimant, estate, or
1222     trust may claim and list that amount on the written certification that the office issues under
1223     Subsection (5).
1224          (ii) The claimant, estate, or trust may claim the tax credit in the amount listed on the
1225     written certification that the office issues under Subsection (5).
1226          (d) A claimant, estate, or trust may claim a tax credit under Subsection (3) for the
1227     taxable year in which the residential energy system is installed.
1228          (e) If the amount of a tax credit listed on the written certification exceeds a claimant's,
1229     estate's, or trust's tax liability under this chapter for a taxable year, the claimant, estate, or trust
1230     may carry forward the amount of the tax credit exceeding the liability for a period that does not
1231     exceed the next four taxable years.
1232          (f) A claimant, estate, or trust may claim a tax credit with respect to additional
1233     residential energy systems or parts of residential energy systems for a subsequent taxable year
1234     if the total amount of tax credit the claimant, estate, or trust claims does not exceed $2,000 per
1235     residential unit.
1236          (g) (i) Subject to Subsections (4)(g)(ii) and (iii), a claimant, estate, or trust that leases a
1237     residential energy system installed on a residential unit may claim a tax credit under Subsection
1238     (3) if the claimant, estate, or trust confirms that the lessor irrevocably elects not to claim the tax
1239     credit.
1240          (ii) A claimant, estate, or trust described in Subsection (4)(g)(i) that leases a residential
1241     energy system may claim as a tax credit under Subsection (3) only the principal recovery
1242     portion of the lease payments.
1243          (iii) A claimant, estate, or trust described in Subsection (4)(g)(i) that leases a
1244     residential energy system may claim a tax credit under Subsection (3) for a period that does not
1245     exceed seven taxable years after the date the lease begins, as stated in the lease agreement.
1246          (h) If a claimant, estate, or trust sells a residential unit to another person before the
1247     claimant, estate, or trust claims the tax credit under Subsection (3):
1248          (i) the claimant, estate, or trust may assign the tax credit to the other person; and
1249          (ii) (A) if the other person files a return under Chapter 7, Corporate Franchise and
1250     Income Taxes, the other person may claim the tax credit as if the other person had met the
1251     requirements of Section 59-7-614 to claim the tax credit; or
1252          (B) if the other person files a return under this chapter, the other person may claim the
1253     tax credit under this section as if the other person had met the requirements of this section to
1254     claim the tax credit.
1255          (5) (a) Before a claimant, estate, or trust may claim a tax credit under this section, the
1256     claimant, estate, or trust shall obtain a written certification from the office.
1257          (b) The office shall issue a claimant, estate, or trust a written certification if the office
1258     determines that:
1259          (i) the claimant, estate, or trust meets the requirements of this section to receive a tax
1260     credit; and
1261          (ii) the office determines that the residential energy system with respect to which the
1262     claimant, estate, or trust seeks to claim a tax credit:
1263          (A) has been completely installed;
1264          (B) is a viable system for saving or producing energy from renewable resources; and
1265          (C) is safe, reliable, efficient, and technically feasible to ensure that the residential
1266     energy system uses the state's renewable and nonrenewable energy resources in an appropriate
1267     and economic manner.
1268          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1269     office may make rules:
1270          (i) for determining whether a residential energy system meets the requirements of
1271     Subsection (5)(b)(ii); and
1272          (ii) for purposes of determining the amount of a tax credit that a claimant, estate, or
1273     trust may receive under Subsection (4), establishing the reasonable costs of a residential energy
1274     system, as an amount per unit of energy production.
1275          (d) A claimant, estate, or trust that obtains a written certification from the office shall
1276     retain the certification for the same time period a person is required to keep books and records
1277     under Section 59-1-1406.
1278          (e) The office shall submit to the commission an electronic list that includes:
1279          (i) the name and identifying information of each claimant, estate, or trust to which the
1280     office issues a written certification; and
1281          (ii) for each claimant, estate, or trust:
1282          (A) the amount of the tax credit listed on the written certification; and
1283          (B) the date the renewable energy system was installed.
1284          (6) A tax credit under this section is in addition to any tax credits provided under the
1285     laws or rules and regulations of the United States.
1286          [(7) A purchaser of one or more solar units that claims a tax credit under Section
1287     59-10-1024 for the purchase of the one or more solar units may not claim a tax credit under this
1288     section for that purchase.]
1289          Section 14. Section 59-10-1106 is amended to read:
1290          59-10-1106. Refundable renewable energy systems tax credits -- Definitions --
1291     Certification -- Rulemaking authority.
1292          (1) As used in this section:
1293          (a) "Active solar system" means the same as that term is defined in Section
1294     59-10-1014.
1295          (b) "Biomass system" means the same as that term is defined in Section 59-10-1014.
1296          (c) "Commercial energy system" means the same as that term is defined in Section
1297     59-7-614.
1298          (d) "Commercial enterprise" means the same as that term is defined in Section
1299     59-7-614.
1300          (e) "Commercial unit" means the same as that term is defined in Section 59-7-614.
1301          (f) "Direct use geothermal system" means the same as that term is defined in Section
1302     59-10-1014.
1303          (g) "Geothermal electricity" means the same as that term is defined in Section
1304     59-10-1014.
1305          (h) "Geothermal energy" means the same as that term is defined in Section 59-10-1014.
1306          (i) "Geothermal heat pump system" means the same as that term is defined in Section
1307     59-10-1014.
1308          (j) "Hydroenergy system" means the same as that term is defined in Section
1309     59-10-1014.
1310          (k) "Hydrogen production system" means the same as that term is defined in Section
1311     59-7-614.
1312          (l) "Office" means the Office of Energy Development created in Section 79-6-401.
1313          (m) "Passive solar system" means the same as that term is defined in Section
1314     59-10-1014.
1315          (n) "Principal recovery portion" means the same as that term is defined in Section
1316     59-10-1014.
1317          (o) "Wind system" means the same as that term is defined in Section 59-10-1014.
1318          (2) [A] For a taxable year beginning before January 1, 2034, a claimant, estate, or trust
1319     may claim an energy system tax credit as provided in this section against a tax due under this
1320     chapter [for a taxable year].
1321          (3) (a) Subject to the other provisions of this Subsection (3), a claimant, estate, or trust
1322     may claim a refundable tax credit under this Subsection (3) with respect to a commercial
1323     energy system if:
1324          (i) the commercial energy system does not use:
1325          (A) wind, geothermal electricity[, solar], or biomass equipment capable of producing a
1326     total of 660 or more kilowatts of electricity; or
1327          (B) solar equipment capable of producing 2,000 or more kilowatts of electricity;
1328          (ii) the claimant, estate, or trust purchases or participates in the financing of the
1329     commercial energy system;
1330          (iii) (A) the commercial energy system supplies all or part of the energy required by
1331     commercial units owned or used by the claimant, estate, or trust; or
1332          (B) the claimant, estate, or trust sells all or part of the energy produced by the
1333     commercial energy system as a commercial enterprise;
1334          (iv) the claimant, estate, or trust has not claimed and will not claim a tax credit under
1335     Subsection (6) for hydrogen production using electricity for which the claimant, estate, or trust
1336     claims a tax credit under this Subsection (3); and
1337          (v) the claimant, estate, or trust obtains a written certification from the office in
1338     accordance with Subsection (7).
1339          (b) (i) Subject to Subsections (3)(b)(ii) through (iv), the tax credit is equal to 10% of
1340     the reasonable costs of the commercial energy system.
1341          (ii) A tax credit under this Subsection (3) may include installation costs.
1342          (iii) A claimant, estate, or trust is eligible to claim a tax credit under this Subsection (3)
1343     for the taxable year in which the commercial energy system is completed and placed in service.
1344          (iv) The total amount of tax credit a claimant, estate, or trust may claim under this
1345     Subsection (3) may not exceed $50,000 per commercial unit.
1346          (c) (i) Subject to Subsections (3)(c)(ii) and (iii), a claimant, estate, or trust that is a
1347     lessee of a commercial energy system installed on a commercial unit may claim a tax credit
1348     under this Subsection (3) if the claimant, estate, or trust confirms that the lessor irrevocably
1349     elects not to claim the tax credit.
1350          (ii) A claimant, estate, or trust described in Subsection (3)(c)(i) may claim as a tax
1351     credit under this Subsection (3) only the principal recovery portion of the lease payments.
1352          (iii) A claimant, estate, or trust described in Subsection (3)(c)(i) may claim a tax credit
1353     under this Subsection (3) for a period that does not exceed seven taxable years after the day on
1354     which the lease begins, as stated in the lease agreement.
1355          (4) (a) Subject to the other provisions of this Subsection (4), a claimant, estate, or trust
1356     may claim a refundable tax credit under this Subsection (4) with respect to a commercial
1357     energy system if:
1358          (i) the commercial energy system uses wind, geothermal electricity, or biomass
1359     equipment capable of producing a total of 660 or more kilowatts of electricity;
1360          (ii) (A) the commercial energy system supplies all or part of the energy required by
1361     commercial units owned or used by the claimant, estate, or trust; or
1362          (B) the claimant, estate, or trust sells all or part of the energy produced by the
1363     commercial energy system as a commercial enterprise;
1364          (iii) the claimant, estate, or trust has not claimed and will not claim a tax credit under
1365     Subsection (6) for hydrogen production using electricity for which the claimant, estate, or trust
1366     claims a tax credit under this Subsection (4); and
1367          (iv) the claimant, estate, or trust obtains a written certification from the office in
1368     accordance with Subsection (7).
1369          (b) (i) Subject to Subsection (4)(b)(ii), a tax credit under this Subsection (4) is equal to
1370     the product of:
1371          (A) 0.35 cents; and
1372          (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
1373          (ii) A claimant, estate, or trust is eligible to claim a tax credit under this Subsection (4)
1374     for production occurring during a period of 48 months beginning with the month in which the
1375     commercial energy system is placed in commercial service.
1376          (c) A claimant, estate, or trust that is a lessee of a commercial energy system installed
1377     on a commercial unit may claim a tax credit under this Subsection (4) if the claimant, estate, or
1378     trust confirms that the lessor irrevocably elects not to claim the tax credit.
1379          (5) (a) Subject to the other provisions of this Subsection (5), a claimant, estate, or trust
1380     may claim a refundable tax credit as provided in this Subsection (5) if:
1381          (i) the claimant, estate, or trust owns a commercial energy system that uses solar
1382     equipment capable of producing a total of [660] 2,000 or more kilowatts of electricity;
1383          (ii) (A) the commercial energy system supplies all or part of the energy required by
1384     commercial units owned or used by the claimant, estate, or trust; or
1385          (B) the claimant, estate, or trust sells all or part of the energy produced by the
1386     commercial energy system as a commercial enterprise;
1387          (iii) the claimant, estate, or trust does not claim a tax credit under Subsection (3);
1388          (iv) the claimant, estate, or trust has not claimed and will not claim a tax credit under
1389     Subsection (6) for hydrogen production using electricity for which a taxpayer claims a tax
1390     credit under this Subsection (5); and
1391          (v) the claimant, estate, or trust obtains a written certification from the office in
1392     accordance with Subsection (7).
1393          (b) (i) Subject to Subsection (5)(b)(ii), a tax credit under this Subsection (5) is equal to
1394     the product of:
1395          (A) 0.35 cents; and
1396          (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
1397          (ii) A claimant, estate, or trust is eligible to claim a tax credit under this Subsection (5)
1398     for production occurring during a period of 48 months beginning with the month in which the
1399     commercial energy system is placed in commercial service.
1400          (c) A claimant, estate, or trust that is a lessee of a commercial energy system installed
1401     on a commercial unit may claim a tax credit under this Subsection (5) if the claimant, estate, or
1402     trust confirms that the lessor irrevocably elects not to claim the tax credit.
1403          (6) (a) A claimant, estate, or trust may claim a refundable tax credit as provided in this
1404     Subsection (6) if:
1405          (i) the claimant, estate, or trust owns a hydrogen production system;
1406          (ii) the hydrogen production system is completed and placed in service on or after
1407     January 1, 2022;
1408          (iii) the claimant, estate, or trust sells as a commercial enterprise, or supplies for the
1409     claimant's, estate's, or trust's own use in commercial units, the hydrogen produced from the
1410     hydrogen production system;
1411          (iv) the claimant, estate, or trust has not claimed and will not claim a tax credit under
1412     Subsection (3), (4), or (5) for electricity used to meet the requirements of this Subsection (6);
1413     and
1414          (v) the claimant, estate, or trust obtains a written certification from the office in
1415     accordance with Subsection (7).
1416          (b) (i) Subject to Subsections (6)(b)(ii) and (iii), a tax credit under this Subsection (6)
1417     is equal to the product of:
1418          (A) $0.12; and
1419          (B) the number of kilograms of hydrogen produced during the taxable year.
1420          (ii) A claimant, estate, or trust may not receive a tax credit under this Subsection (6) for
1421     more than 5,600 metric tons of hydrogen per taxable year.
1422          (iii) A claimant, estate, or trust is eligible to claim a tax credit under this Subsection (6)
1423     for production occurring during a period of 48 months beginning with the month in which the
1424     hydrogen production system is placed in commercial service.
1425          (7) (a) Before a claimant, estate, or trust may claim a tax credit under this section, the
1426     claimant, estate, or trust shall obtain a written certification from the office.
1427          (b) The office shall issue a claimant, estate, or trust a written certification if the office
1428     determines that:
1429          (i) the claimant, estate, or trust meets the requirements of this section to receive a tax
1430     credit; and
1431          (ii) the commercial energy system or the hydrogen production system with respect to
1432     which the claimant, estate, or trust seeks to claim a tax credit:
1433          (A) has been completely installed;
1434          (B) is a viable system for saving or producing energy from renewable resources; and
1435          (C) is safe, reliable, efficient, and technically feasible to ensure that the commercial
1436     energy system or the hydrogen production system uses the state's renewable and nonrenewable
1437     resources in an appropriate and economic manner.
1438          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1439     office may make rules:
1440          (i) for determining whether a commercial energy system or a hydrogen production
1441     system meets the requirements of Subsection (7)(b)(ii); and
1442          (ii) for purposes of a tax credit under Subsection (3), establishing the reasonable costs
1443     of a commercial energy system, as an amount per unit of energy production.
1444          (d) A claimant, estate, or trust that obtains a written certification from the office shall
1445     retain the certification for the same time period a person is required to keep books and records
1446     under Section 59-1-1406.
1447          (e) The office shall submit to the commission an electronic list that includes:
1448          (i) the name and identifying information of each claimant, estate, or trust to which the
1449     office issues a written certification; and
1450          (ii) for each claimant, estate, or trust:
1451          (A) the amount of the tax credit listed on the written certification; and
1452          (B) the date the commercial energy system or the hydrogen production system was
1453     installed.
1454          (8) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1455     commission may make rules to address the certification of a tax credit under this section.
1456          (9) A tax credit under this section is in addition to any tax credits provided under the
1457     laws or rules and regulations of the United States.
1458          [(10) A purchaser of one or more solar units that claims a tax credit under Section
1459     59-10-1024 for the purchase of the one or more solar units may not claim a tax credit under this
1460     section for that purchase.]
1461          Section 15. Section 59-10-1113 is amended to read:
1462          59-10-1113. Refundable tax credit for nonrenewable hydrogen production
1463     system.
1464          (1) As used in this section:
1465          (a) "Commercial enterprise" means the same as that term is defined in Section
1466     59-7-626.
1467          (b) "Commercial unit" means the same as that term is defined in Section 59-7-626.
1468          (c) "Hydrogen production system" means the same as that term is defined in Section
1469     59-7-626.
1470          (d) "Office" means the Office of Energy Development created in Section 79-6-401.
1471          (2) (a) [A] For a taxable year beginning before January 1, 2034, a claimant, estate, or
1472     trust may claim a refundable credit under this section if:
1473          (i) the claimant, estate, or trust owns a hydrogen production system;
1474          (ii) the hydrogen production system is completed and placed in service on or after
1475     January 1, 2022;
1476          (iii) the claimant, estate, or trust sells as a commercial enterprise, or supplies for the
1477     claimant's, estate's, or trust's own use in commercial units, the hydrogen produced from the
1478     hydrogen production system;
1479          (iv) the claimant, estate, or trust has not claimed and will not claim a tax credit under
1480     Section 59-10-1106 for electricity used to meet the requirements of this section; and
1481          (v) the taxpayer obtains a written certification from the office in accordance with
1482     Subsection (3).
1483          (b) (i) Subject to Subsections (2)(b)(ii) and (iii), a tax credit under this section is equal
1484     to the product of:
1485          (A) $0.12; and
1486          (B) the number of kilograms of hydrogen produced during the taxable year.
1487          (ii) A claimant, estate, or trust may not receive a tax credit under this section for more
1488     than 5,600 metric tons of hydrogen per taxable year.
1489          (iii) A claimant, estate, or trust is eligible to claim a tax credit under this section for
1490     production occurring during a period of 48 months beginning with the month in which the
1491     hydrogen production system is placed in commercial service.
1492          (3) (a) Before a claimant, estate, or trust may claim a tax credit under this section, the
1493     claimant, estate, or trust shall obtain a written certification from the office.
1494          (b) The office shall issue a claimant, estate, or trust a written certification if the office
1495     determines that:
1496          (i) the claimant, estate, or trust meets the requirements of this section to receive a tax
1497     credit; and
1498          (ii) the hydrogen production system with respect to which the claimant, estate, or trust
1499     seeks to claim a tax credit:
1500          (A) has been completely installed; and
1501          (B) is safe, reliable, efficient, and technically feasible to ensure that the hydrogen
1502     production system uses the state's nonrenewable energy resources in an appropriate and
1503     economic manner.
1504          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1505     office may make rules for determining whether a hydrogen production system meets the
1506     requirements of Subsection (3)(b)(ii).
1507          (d) A claimant, estate, or trust that obtains a written certification from the office shall
1508     retain the certification for the same time period a person is required to keep books and records
1509     under Section 59-1-1406.
1510          (e) The office shall submit to the commission an electronic list that includes:
1511          (i) the name and identifying information of each claimant, estate, or trust to which the
1512     office issues a written certification; and
1513          (ii) for each claimant, estate, or trust:
1514          (A) the amount of the tax credit listed on the written certification; and
1515          (B) the date the hydrogen production system was installed.
1516          (4) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1517     commission may make rules to address the certification of a tax credit under this section.
1518          (5) A tax credit under this section is in addition to any tax credits provided under the
1519     laws or rules and regulations of the United States.
1520          Section 16. Section 63I-2-259 is amended to read:
1521          63I-2-259. Repeal dates: Title 59.
1522          [(1) In Section 59-2-926, the language that states "applicable" and "or 53F-2-301.5" is
1523     repealed July 1, 2023.]
1524          (1) Subsection 59-7-159(3)(c)(ii), referencing Section 59-7-614, is repealed December
1525     31, 2034.
1526          (2) Subsection 59-7-610(8), relating to claiming a tax credit in the same taxable year as
1527     the targeted business income tax credit, is repealed December 31, 2024.
1528          (3) Section 59-7-614 is repealed December 31, 2034.
1529          (4) Subsection 59-7-614.10(5), relating to claiming a tax credit in the same taxable
1530     year as the targeted business income tax credit, is repealed December 31, 2024.
1531          [(4)] (5) Section 59-7-624 is repealed December 31, 2024.
1532          (6) Section 59-7-626 is repealed December 31, 2034.
1533          (7) Subsection 59-10-137(3)(c)(ii), referencing Section 59-10-1014, is repealed
1534     December 31, 2034.
1535          (8) Subsection 59-10-137(3)(c)(viii), referencing Section 59-10-1106, is repealed
1536     December 31, 2034.
1537          [(5)] (9) Subsection 59-10-210(2)(b)(vi) is repealed December 31, 2024.
1538          [(6)] (10) Subsection 59-10-1007(8), relating to claiming a tax credit in the same
1539     taxable year as the targeted business income tax credit, is repealed December 31, 2024.
1540          (11) Section 59-10-1014 is repealed December 31, 2034.
1541          [(7)] (12) Subsection 59-10-1037(5), relating to claiming a tax credit in the same
1542     taxable year as the targeted business income tax credit, is repealed December 31, 2024.
1543          (13) Section 59-10-1106 is repealed December 31, 2034.
1544          [(8)] (14) Section 59-10-1112 is repealed December 31, 2024.
1545          (15) Section 59-10-1113 is repealed December 31, 2034.
1546          Section 17. Section 63N-8-105 is amended to read:
1547          63N-8-105. Annual report.
1548          The office shall include the following information in the annual written report described
1549     in Section 63N-1a-306:
1550          (1) the office's success in attracting within-the-state production of television series,
1551     made-for-television movies, and motion pictures, including feature films and independent
1552     films;
1553          (2) the amount of incentive commitments made by the office under this part and the
1554     period of time over which the incentives will be paid; and
1555          (3) the economic impact on the state related to:
1556          (a) dollars left in the state; [and]
1557          (b) new state revenues generated by a motion picture company or a digital media
1558     company for each state-approved production; and
1559          [(b)] (c) providing motion picture incentives under this part.
1560          Section 18. Section 63N-20-101 is enacted to read:
1561     
CHAPTER 20. RESEARCH EXPENSES TAX CREDIT

1562          63N-20-101. Definitions.
1563          (1) As used in this chapter:
1564          (a) "Basic research" means the same as that term is defined in Section 41(e)(7), Internal
1565     Revenue Code, except that the term includes only basic research conducted in this state.
1566          (b) "Qualified research" means the same as that term is defined in Section 41(d),
1567     Internal Revenue Code, except that the term includes only qualified research conducted in this
1568     state.
1569          (c) "Qualified research expenses" means the same as that term is defined in Section
1570     41(b), Internal Revenue Code, except that the term includes only:
1571          (i) in-house research expenses incurred in this state; and
1572          (ii) contract research expenses incurred in this state.
1573          (2) Except as provided in Subsection (1)(a), a term used in this section that is defined
1574     in Section 41, Internal Revenue Code, means the same as that term is defined in Section 41,
1575     Internal Revenue Code.
1576          Section 19. Section 63N-20-102 is enacted to read:
1577          63N-20-102. Tax credit certificate.
1578          (1) To claim a nonrefundable tax credit under Section 59-7-612 or 59-10-1012, a
1579     person shall first receive a tax credit certificate in accordance with this section.
1580          (2) To receive a tax credit certificate, the person shall submit to the office an
1581     application that includes:
1582          (a) receipts and other information needed to calculate the person's qualified research
1583     expenses, payments to a qualified organization for basic research, and base amount;
1584          (b) a description of the qualified research expenses or payments for basic research;
1585          (c) a statement indicating whether the person files an income tax return under Title 59,
1586     Chapter 7, Corporate Franchise and Income Taxes, or Title 59, Chapter 10, Individual Income
1587     Tax Act;
1588          (d) a statement from the person submitting the application describing the benefits the
1589     state receives from the research expenses or payments; and
1590          (e) any other information that the office requests to calculate the person's eligibility or
1591     amount of tax credit.
1592          (3) If, after review of the application, the office determines that the person has
1593     qualified research expenses or payments to a qualified organization for basic research, the
1594     office shall:
1595          (a) calculate in accordance with Section 63N-20-103, the amount of each tax credit that
1596     the person is eligible to claim; and
1597          (b) issue a tax credit certificate to the person that states the amount of each tax credit
1598     that the person may claim.
1599          (4) A person that receives a tax credit certificate under this section shall retain the tax
1600     credit certificate for the same time period a person is required to keep books and records under
1601     Section 59-1-1406.
1602          (5) (a) The office shall provide the State Tax Commission with an electronic report that
1603     includes for each person to which the office issued a tax credit certificate under this section for
1604     a taxable year:
1605          (i) the name and identifying information of the person; and
1606          (ii) the amount of each tax credit that the person is eligible to claim.
1607          (b) The office shall provide the report described in Subsection (5)(a) on or before
1608     January 31 of the year following the year the office issues the tax credit certificates.
1609          (6) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1610     office shall make rules governing the administration of the tax credit certificate issuance
1611     process.
1612          Section 20. Section 63N-20-103 is enacted to read:
1613          63N-20-103. Amount of tax credit.
1614          (1) Except as specifically provided in this section, the tax credits authorized under
1615     Section 63N-20-102 shall be calculated as provided in Section 41, Internal Revenue Code.
1616          (2) (a) The research tax credit described in Subsection 59-7-612(2)(a)(i) or
1617     59-10-1012(2)(a)(i) is equal to 5% of the person's qualified research expenses incurred during
1618     the current taxable year that exceed the base amount calculated in accordance with Subsection
1619     (2).
1620          (b) The tax credit described in Subsection 59-7-612(2)(a)(ii) or 59-10-1012(2)(a)(ii) is
1621     equal to 5% of the payment to a qualified organization for basic research incurred during the
1622     current taxable year that exceeds the base amount calculated in accordance with Subsection (2).
1623          (c) The additional research tax credit described in Subsection 59-7-612(2)(a)(iii) or
1624     59-10-1012(2)(a)(iii) is equal to 7.5% of the person's qualified research expenses for the
1625     current taxable year.
1626          (3) The office shall calculate the base amount as provided in Section 41(c), Internal
1627     Revenue Code, except that:
1628          (a) the base amount does not include the calculation of the alternative incremental
1629     credit provided for in Section 41(c)(4), Internal Revenue Code;
1630          (b) (i) for a person that files a tax return under Title 59, Chapter 7, Corporate Franchise
1631     and Income Taxes, a person's gross receipts include only those gross receipts attributable to
1632     sources within this state as provided in Title 59, Chapter 7, Part 3, Allocation and
1633     Apportionment of Income - Utah UDITPA Provisions; and
1634          (ii) for a person that files a tax return under Title 59, Chapter 10, Individual Income
1635     Tax Act, the taxpayer's gross receipts include only those gross receipts attributable to sources
1636     within this state as provided in Section 59-10-118; and
1637          (c) notwithstanding Section 41(c), Internal Revenue Code, a person:
1638          (i) may elect to be treated as a start-up company as provided in Section 41(c)(3)(B)
1639     regardless of whether the taxpayer meets the requirements of Section 41(c)(3)(B)(i)(I) or (II);
1640     and
1641          (ii) may not revoke an election to be treated as a start-up company under Subsection
1642     (3)(c)(i).
1643          (4) For purposes of claiming a tax credit under this section, a unitary group as defined
1644     in Section 59-7-101 is considered to be one taxpayer.
1645          Section 21. Section 79-6-401 is amended to read:
1646          79-6-401. Office of Energy Development -- Creation -- Director -- Purpose --
1647     Rulemaking regarding confidential information -- Fees -- Transition for employees.
1648          (1) There is created an Office of Energy Development in the Department of Natural
1649     Resources.
1650          (2) (a) The energy advisor shall serve as the director of the office or, on or before June
1651     30, 2029, appoint a director of the office.
1652          (b) The director:
1653          (i) shall, if the energy advisor appoints a director under Subsection (2)(a), report to the
1654     energy advisor; and
1655          (ii) may appoint staff as funding within existing budgets allows.
1656          (c) The office may consolidate energy staff and functions existing in the state energy
1657     program.
1658          (3) The purposes of the office are to:
1659          (a) serve as the primary resource for advancing energy and mineral development in the
1660     state;
1661          (b) implement:
1662          (i) the state energy policy under Section 79-6-301; and
1663          (ii) the governor's energy and mineral development goals and objectives;
1664          (c) advance energy education, outreach, and research, including the creation of
1665     elementary, higher education, and technical college energy education programs;
1666          (d) promote energy and mineral development workforce initiatives; and
1667          (e) support collaborative research initiatives targeted at Utah-specific energy and
1668     mineral development.
1669          (4) By following the procedures and requirements of Title 63J, Chapter 5, Federal
1670     Funds Procedures Act, the office may:
1671          (a) seek federal grants or loans;
1672          (b) seek to participate in federal programs; and
1673          (c) in accordance with applicable federal program guidelines, administer federally
1674     funded state energy programs.
1675          (5) The office shall perform the duties required by Sections 11-42a-106, 59-5-102,
1676     [59-7-614.7, 59-10-1029], 63C-26-202, [Part 5, Alternative Energy Development Tax Credit
1677     Act,] and Part 6, High Cost Infrastructure Development Tax Credit Act.
1678          (6) (a) For purposes of administering this section, the office may make rules, by
1679     following Title 63G, Chapter 3, Utah Administrative Rulemaking Act, to maintain as
1680     confidential, and not as a public record, information that the office receives from any source.
1681          (b) The office shall maintain information the office receives from any source at the
1682     level of confidentiality assigned by the source.
1683          (7) The office may charge application, filing, and processing fees in amounts
1684     determined by the office in accordance with Section 63J-1-504 as dedicated credits for
1685     performing office duties described in this part.
1686          (8) (a) An employee of the office is an at-will employee.
1687          (b) For an employee of the office on July 1, 2021, the employee shall have the same
1688     salary and benefit options the employee had when the office was part of the office of the
1689     governor.
1690          Section 22. Repealer.
1691          This bill repeals:
1692          Section 59-7-614.7, Nonrefundable alternative energy development tax credit.
1693          Section 59-10-1024, Nonrefundable tax credit for qualifying solar projects.
1694          Section 59-10-1025, Nonrefundable tax credit for investment in certain life science
1695     establishments.
1696          Section 59-10-1029, Nonrefundable alternative energy development tax credit.
1697          Section 63N-2-801, Title.
1698          Section 63N-2-802, Definitions.
1699          Section 63N-2-803, Tax credits issued by office.
1700          Section 63N-2-804, Person may not claim or pass through a tax credit without tax
1701     credit certificate.
1702          Section 63N-2-805, Application process.
1703          Section 63N-2-806, Criteria for tax credits.
1704          Section 63N-2-807, Rulemaking authority.
1705          Section 63N-2-808, Agreements between office and tax credit applicant and life
1706     science establishment -- Tax credit certificate.
1707          Section 63N-2-809, Issuance of tax credit certificates.
1708          Section 63N-2-810, Reports on tax credit certificates.
1709          Section 63N-2-811, Reports of tax credits.
1710          Section 79-6-501, Title.
1711          Section 79-6-502, Definitions.
1712          Section 79-6-503, Tax credits.
1713          Section 79-6-504, Qualifications for tax credit -- Procedure.
1714          Section 79-6-505, Report to the Legislature.
1715          Section 23. Effective date.
1716          (1) Except as provided in Subsections (2) and (3), this bill takes effect on January 1,
1717     2024.
1718          (2) The actions affecting the following sections take effect on May 3, 2023:
1719          (a) Section 59-7-159; and
1720          (b) Section 59-10-137.
1721          (3) The actions affecting the following sections take effect for a taxable year beginning
1722     on or after January 1, 2024:
1723          (a) Section 59-7-609;
1724          (b) Section 59-7-610;
1725          (c) Section 59-7-612;
1726          (d) Section 59-7-614;
1727          (e) Section 59-7-614.7;
1728          (f) Section 59-7-626;
1729          (g) Section 59-10-1002.2;
1730          (h) Section 59-10-1006;
1731          (i) Section 59-10-1007;
1732          (j) Section 59-10-1012;
1733          (k) Section 59-10-1014;
1734          (l) Section 59-10-1024;
1735          (m) Section 59-10-1025;
1736          (n) Section 59-10-1029;
1737          (o) Section 59-10-1106; and
1738          (p) Section 59-10-1113.