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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 the
15 claimants are eligible to claim;
16 ▸ requires the State Tax Commission to create a webpage that links to each state
17 agency's list of tax credit claimants;
18 ▸ requires the Revenue and Taxation Interim Committee to:
19 • evaluate whether performance metrics or reporting requirements for the tax
20 credit would improve the committee's evaluation of the benefits to the taxpayer
21 and the state from the tax credit and, if so, prepare legislation recommending
22 specific performance metrics or reporting requirements; and
23 • evaluate the effectiveness of the process for claiming a research activities tax
24 credit, including receiving recommendations for improvement from the State
25 Tax Commission, and prepare legislation if the committee recommends any
26 changes to the process;
27 ▸ modifies reporting and study requirements related to repealed income tax credits;
28 ▸ creates a statutory certificate process for the historic preservation tax credits;
29 ▸ requires the State Historic Preservation Office to report the number of estimated
30 new jobs created by approved historic rehabilitation work in the Department of
31 Cultural and Community Engagement's annual report;
32 ▸ modifies the corporate and individual recycling market development zone tax
33 credits to eliminate the expenditures credit;
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; and
45 ▸ makes technical and conforming changes.
46 Money Appropriated in this Bill:
47 None
48 Other Special Clauses:
49 This bill provides a special effective date.
50 Utah Code Sections Affected:
51 AMENDS:
52 59-7-159, as last amended by Laws of Utah 2022, Chapters 264, 274
53 59-7-610, as last amended by Laws of Utah 2021, Chapter 367
54 59-7-614, as last amended by Laws of Utah 2022, Chapter 274
55 59-10-137, as last amended by Laws of Utah 2022, Chapter 264
56 59-10-1002.2, as last amended by Laws of Utah 2022, Chapter 12
57 59-10-1007, as last amended by Laws of Utah 2021, Chapter 367
58 59-10-1014, as last amended by Laws of Utah 2021, Chapter 280
59 59-10-1106, as last amended by Laws of Utah 2021, Chapters 280, 374
60 63N-8-105, as last amended by Laws of Utah 2021, Chapter 282
61 79-6-401, as last amended by Laws of Utah 2022, Chapter 322
62 ENACTS:
63 59-1-214, Utah Code Annotated 1953
64 REPEALS AND REENACTS:
65 59-7-609, as enacted by Laws of Utah 1995, Chapter 42
66 59-10-1006, as renumbered and amended by Laws of Utah 2006, Chapter 223
67 REPEALS:
68 59-7-614.7, as last amended by Laws of Utah 2021, Chapter 280
69 59-10-1024, as last amended by Laws of Utah 2021, Chapter 280
70 59-10-1025, as last amended by Laws of Utah 2019, Chapter 465
71 59-10-1029, as last amended by Laws of Utah 2021, Chapter 280
72 63N-2-801, as renumbered and amended by Laws of Utah 2015, Chapter 283
73 63N-2-802, as last amended by Laws of Utah 2016, Chapter 354
74 63N-2-803, as last amended by Laws of Utah 2016, Chapter 354
75 63N-2-804, as renumbered and amended by Laws of Utah 2015, Chapter 283
76 63N-2-805, as renumbered and amended by Laws of Utah 2015, Chapter 283
77 63N-2-806, as last amended by Laws of Utah 2016, Chapter 354
78 63N-2-807, as renumbered and amended by Laws of Utah 2015, Chapter 283
79 63N-2-808, as last amended by Laws of Utah 2021, Chapter 282
80 63N-2-809, as renumbered and amended by Laws of Utah 2015, Chapter 283
81 63N-2-810, as last amended by Laws of Utah 2022, Chapter 362
82 63N-2-811, as last amended by Laws of Utah 2021, Chapter 382
83 79-6-501, as renumbered and amended by Laws of Utah 2021, Chapter 280
84 79-6-502, as renumbered and amended by Laws of Utah 2021, Chapter 280
85 79-6-503, as last amended by Laws of Utah 2021, Chapter 64 and renumbered and
86 amended by Laws of Utah 2021, Chapter 280
87 79-6-504, as renumbered and amended by Laws of Utah 2021, Chapter 280
88 79-6-505, as last amended by Laws of Utah 2022, Chapter 68
89
90 Be it enacted by the Legislature of the state of Utah:
91 Section 1. Section 59-1-214 is enacted to read:
92 59-1-214. Disclosure of tax credit recipients.
93 (1) As used in this section:
94 (a) "Recipient" means a taxpayer, a claimant, an estate, or a trust that:
95 (i) applies for a tax credit certificate on or after January 1, 2024; and
96 (ii) is eligible to claim a tax credit in the amount for which a tax credit certificate is
97 issued.
98 (b) "Tax credit certificate" means a document that:
99 (i) a state agency is required by statute to issue upon an application by a taxpayer, a
100 claimant, an estate, or a trust;
101 (ii) verifies a taxpayer's, a claimant's, an estate's, or a trust's eligibility to claim a tax
102 credit;
103 (iii) lists the amount of tax credit that a taxpayer, a claimant, an estate, or a trust may
104 claim for the taxable year; and
105 (iv) without which the taxpayer, the claimant, the estate, or the trust may not claim the
106 tax credit.
107 (2) Each state agency shall provide the commission with a link to a webpage where the
108 state agency discloses, for each tax credit for which the state agency issues a tax credit
109 certificate:
110 (a) the names of each recipient of a tax credit certificate; and
111 (b) the amount of tax credit listed on the certificate.
112 (3) The Office of Energy Development is not required to comply with Subsection (2)
113 for a tax credit described in:
114 (a) Subsection 59-7-614(3); or
115 (b) Section 59-10-1014.
116 (4) The commission shall create a single webpage on the commission's website that
117 links to each state agency's webpage containing the information described in Subsection (2).
118 Section 2. Section 59-7-159 is amended to read:
119 59-7-159. Review of credits allowed under this chapter.
120 (1) As used in this section, "committee" means the Revenue and Taxation Interim
121 Committee.
122 (2) (a) The committee shall review the tax credits described in this chapter as provided
123 in Subsection (3) and make recommendations concerning whether the tax credits should be
124 continued, modified, or repealed.
125 (b) In conducting the review required under Subsection (2)(a), the committee shall:
126 (i) schedule time on at least one committee agenda to conduct the review;
127 (ii) invite state agencies, individuals, and organizations concerned with the tax credit
128 under review to provide testimony;
129 (iii) (A) invite the Governor's Office of Economic Opportunity to present a summary
130 and analysis of the information for each tax credit regarding which the Governor's Office of
131 Economic Opportunity is required to make a report under this chapter; and
132 (B) invite the Office of the Legislative Fiscal Analyst to present a summary and
133 analysis of the information for each tax credit regarding which the Office of the Legislative
134 Fiscal Analyst is required to make a report under this chapter;
135 (iv) ensure that the committee's recommendations described in this section include an
136 evaluation of:
137 (A) the cost of the tax credit to the state;
138 (B) the purpose and effectiveness of the tax credit; and
139 (C) the extent to which the state benefits from the tax credit; [
140 (v) evaluate whether performance metrics or reporting requirements for the tax credit
141 would improve the committee's evaluation of the benefits to the taxpayer and the state from the
142 tax credit; and
143 (vi) undertake other review efforts as determined by the committee chairs or as
144 otherwise required by law.
145 (c) The committee shall prepare legislation for consideration by the Legislature at the
146 next general session recommending specific performance metrics or reporting requirements for
147 any tax credit that the committee determines meets the requirement described in Subsection
148 (2)(b)(v).
149 (3) (a) On or before November 30, 2017, and every three years after 2017, the
150 committee shall conduct the review required under Subsection (2) of the tax credits allowed
151 under the following sections:
152 (i) Section 59-7-601;
153 (ii) Section 59-7-607;
154 (iii) Section 59-7-612;
155 (iv) Section 59-7-614.1; and
156 (v) Section 59-7-614.5.
157 (b) On or before November 30, 2018, and every three years after 2018, the committee
158 shall conduct the review required under Subsection (2) of the tax credits allowed under the
159 following sections:
160 (i) Section 59-7-609;
161 (ii) Section 59-7-614.2;
162 (iii) Section 59-7-614.10; and
163 (iv) Section 59-7-619.
164 (c) On or before November 30, 2019, and every three years after 2019, the committee
165 shall conduct the review required under Subsection (2) of the tax credits allowed under the
166 following sections:
167 (i) Section 59-7-610; and
168 (ii) Section 59-7-614[
169 [
170 (d) (i) In addition to the reviews described in this Subsection (3), the committee shall
171 conduct a review of a tax credit described in this chapter that is enacted on or after January 1,
172 2017.
173 (ii) The committee shall complete a review described in this Subsection (3)(d) three
174 years after the effective date of the tax credit and every three years after the initial review date.
175 (4) On or before November 30, 2023, the committee shall:
176 (a) evaluate the effectiveness of the current process for issuing a tax credit described in
177 Section 59-7-612;
178 (b) receive input from the commission regarding improvements to the process for
179 issuing a tax credit described in Section 59-7-612; and
180 (c) if the committee makes a recommendation for improving the process for issuing a
181 tax credit described in Section 59-7-612, prepare legislation for consideration by the
182 Legislature at the next general session.
183 Section 3. Section 59-7-609 is repealed and reenacted to read:
184 59-7-609. Historic preservation credit.
185 (1) As used in this section:
186 (a) "Certified historic building" means a building that:
187 (i) is listed on the National Register of Historic Places within three years of taking the
188 credit under this section; or
189 (ii) (A) is located in a National Register Historic District; and
190 (B) has been designated by the office as being of significance to the district.
191 (b) "Office" means the State Historic Preservation Office.
192 (c) (i) "Qualified rehabilitation expenditures" means any amount properly chargeable to
193 the rehabilitation and restoration of the physical elements of the building.
194 (ii) "Qualified rehabilitation expenditures" includes the historic decorative elements
195 and the upgrading of the structural, mechanical, electrical, and plumbing systems.
196 (iii) "Qualified rehabilitation expenditures" does not include expenditures related to:
197 (A) the taxpayer's personal labor;
198 (B) cost of acquisition of the property;
199 (C) any expenditure attributable to the enlargement of an existing building;
200 (D) rehabilitation of a certified historic building without the approval required in
201 Subsection (3)(a)(i);
202 (E) an expenditure attributable to landscaping or other site features, outbuildings,
203 garages, and related features; or
204 (F) demolition and removal costs for an existing building on a property site.
205 (d) "Residential" means a building used for residential use, either owner occupied or
206 income producing.
207 (2) A taxpayer may claim a nonrefundable tax credit in an amount equal to 20% of
208 qualified rehabilitation expenditures if:
209 (a) the qualified rehabilitation expenditures cost more than $10,000;
210 (b) the qualified rehabilitation expenditures are incurred in connection with a
211 residential certified historic building; and
212 (c) the taxpayer has a written tax credit certificate issued by the office in accordance
213 with Subsection (3).
214 (3) (a) The office shall issue a tax credit certificate if the office:
215 (i) approves all rehabilitation work for which a taxpayer may claim a tax credit as
216 meeting the Secretary of the Interior's Standards for Rehabilitation before completion of the
217 rehabilitation project so that the office can provide corrective comments to the taxpayer to
218 preserve the historic qualities of the building;
219 (ii) determines that the rehabilitation project conforms with the approved rehabilitation
220 work; and
221 (iii) verifies the property is a residential certified historic building and the amount of
222 the taxpayer's qualified rehabilitation expenditures.
223 (b) The tax credit certificate shall list the amount of the tax credit that the taxpayer is
224 eligible to claim.
225 (c) A taxpayer that receives a tax credit certificate under this section shall retain the tax
226 credit certificate for the same time period a person is required to keep books and records under
227 Section 59-1-1406.
228 (d) The office shall provide the commission with an electronic report that includes for
229 each taxpayer to which the office issued a tax credit certificate under this section for a taxable
230 year:
231 (i) the name of the taxpayer;
232 (ii) the identifying information of the taxpayer; and
233 (iii) the amount of tax credit that the taxpayer is eligible to claim.
234 (4) A taxpayer may carry forward the amount of the tax credit that exceeds the
235 taxpayer's tax liability for five taxable years after the year in which the taxpayer claims a tax
236 credit under this section.
237 (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
238 commission, in consultation with the office, shall make rules to implement this section.
239 (6) The office shall include the number of estimated new jobs created in the state from
240 rehabilitation work in the annual report described in Section 9-1-208.
241 Section 4. Section 59-7-610 is amended to read:
242 59-7-610. Recycling market development zones tax credits.
243 (1) Subject to other provisions of this section, a taxpayer that is a business operating in
244 a recycling market development zone as defined in Section 19-13-102 may claim [
245
246 [
247 Subsection 59-7-104(2) and the purchase price paid for machinery and equipment used directly
248 in:
249 [
250 [
251 [
252 personal property for sale; or
253 [
254 [
255 [
256
257
258 [
259 (2) (a) To claim a tax credit described in Subsection (1), the taxpayer shall receive
260 from the Department of Environmental Quality a written certification, on a form approved by
261 the commission, that includes:
262 (i) a statement that the taxpayer is operating a business within the boundaries of a
263 recycling market development zone;
264 [
265 [
266 [
267 [
268 [
269 taxpayer is claiming a tax credit;
270 [
271 or recycling process; and
272 [
273 [
274 [
275 [
276 [
277 [
278 [
279
280 [
281 (b) (i) The Department of Environmental Quality shall provide a taxpayer seeking to
282 claim a tax credit under Subsection (1) with a copy of the written certification.
283 (ii) The taxpayer shall retain a copy of the written certification for the same period of
284 time that a person is required to keep books and records under Section 59-1-1406.
285 (c) The Department of Environmental Quality shall submit to the commission an
286 electronic list that includes:
287 (i) the name and identifying information of each taxpayer to which the Department of
288 Environmental Quality issues a written certification; and
289 (ii) for each taxpayer, the amount of each tax credit listed on the written certification.
290 (3) A taxpayer may not claim a tax credit [
291
292 calculated:
293 (a) for the taxable year in which the taxpayer made the purchases [
294 (b) before any other tax credits the taxpayer may claim for the taxable year; and
295 (c) before the taxpayer claims a tax credit authorized by this section.
296 (4) The commission shall make rules governing what information a taxpayer shall file
297 with the commission to verify the entitlement to and amount of a tax credit.
298 (5) Except as provided in Subsections (6) [
299 forward, to the next three taxable years, the amount of a tax credit [
300
301 (6) A taxpayer may not claim or carry forward a tax credit [
302
303 forward a tax credit under Section 63N-2-213.
304 [
305
306
307 [
308 taxable year during which the taxpayer claims the targeted business income tax credit under
309 Section 59-7-624.
310 Section 5. Section 59-7-614 is amended to read:
311 59-7-614. Renewable energy systems tax credits -- Definitions -- Certification --
312 Rulemaking authority.
313 (1) As used in this section:
314 (a) (i) "Active solar system" means a system of equipment that is capable of:
315 (A) collecting and converting incident solar radiation into thermal, mechanical, or
316 electrical energy; and
317 (B) transferring a form of energy described in Subsection (1)(a)(i)(A) by a separate
318 apparatus to storage or to the point of use.
319 (ii) "Active solar system" includes water heating, space heating or cooling, and
320 electrical or mechanical energy generation.
321 (b) "Biomass system" means a system of apparatus and equipment for use in:
322 (i) converting material into biomass energy, as defined in Section 59-12-102; and
323 (ii) transporting the biomass energy by separate apparatus to the point of use or storage.
324 (c) "Commercial energy system" means a system that is:
325 (i) (A) an active solar system;
326 (B) a biomass system;
327 (C) a direct use geothermal system;
328 (D) a geothermal electricity system;
329 (E) a geothermal heat pump system;
330 (F) a hydroenergy system;
331 (G) a passive solar system; or
332 (H) a wind system;
333 (ii) located in the state; and
334 (iii) used:
335 (A) to supply energy to a commercial unit; or
336 (B) as a commercial enterprise.
337 (d) "Commercial enterprise" means an entity, the purpose of which is to produce:
338 (i) electrical, mechanical, or thermal energy for sale from a commercial energy system;
339 or
340 (ii) hydrogen for sale from a hydrogen production system.
341 (e) (i) "Commercial unit" means a building or structure that an entity uses to transact
342 business.
343 (ii) Notwithstanding Subsection (1)(e)(i):
344 (A) with respect to an active solar system used for agricultural water pumping or a
345 wind system, each individual energy generating device is considered to be a commercial unit;
346 or
347 (B) if an energy system is the building or structure that an entity uses to transact
348 business, a commercial unit is the complete energy system itself.
349 (f) "Direct use geothermal system" means a system of apparatus and equipment that
350 enables the direct use of geothermal energy to meet energy needs, including heating a building,
351 an industrial process, and aquaculture.
352 (g) "Geothermal electricity" means energy that is:
353 (i) contained in heat that continuously flows outward from the earth; and
354 (ii) used as a sole source of energy to produce electricity.
355 (h) "Geothermal energy" means energy generated by heat that is contained in the earth.
356 (i) "Geothermal heat pump system" means a system of apparatus and equipment that:
357 (i) enables the use of thermal properties contained in the earth at temperatures well
358 below 100 degrees Fahrenheit; and
359 (ii) helps meet heating and cooling needs of a structure.
360 (j) "Hydroenergy system" means a system of apparatus and equipment that is capable
361 of:
362 (i) intercepting and converting kinetic water energy into electrical or mechanical
363 energy; and
364 (ii) transferring this form of energy by separate apparatus to the point of use or storage.
365 (k) "Hydrogen production system" means a system of apparatus and equipment, located
366 in this state, that uses:
367 (i) electricity from a renewable energy source to create hydrogen gas from water,
368 regardless of whether the renewable energy source is at a separate facility or the same facility
369 as the system of apparatus and equipment; or
370 (ii) uses renewable natural gas to produce hydrogen gas.
371 (l) "Office" means the Office of Energy Development created in Section 79-6-401.
372 (m) (i) "Passive solar system" means a direct thermal system that utilizes the structure
373 of a building and the structure's operable components to provide for collection, storage, and
374 distribution of heating or cooling during the appropriate times of the year by utilizing the
375 climate resources available at the site.
376 (ii) "Passive solar system" includes those portions and components of a building that
377 are expressly designed and required for the collection, storage, and distribution of solar energy.
378 (n) "Photovoltaic system" means an active solar system that generates electricity from
379 sunlight.
380 (o) (i) "Principal recovery portion" means the portion of a lease payment that
381 constitutes the cost a person incurs in acquiring a commercial energy system.
382 (ii) "Principal recovery portion" does not include:
383 (A) an interest charge; or
384 (B) a maintenance expense.
385 (p) "Renewable energy source" means the same as that term is defined in Section
386 54-17-601.
387 (q) "Residential energy system" means the following used to supply energy to or for a
388 residential unit:
389 (i) an active solar system;
390 (ii) a biomass system;
391 (iii) a direct use geothermal system;
392 (iv) a geothermal heat pump system;
393 (v) a hydroenergy system;
394 (vi) a passive solar system; or
395 (vii) a wind system.
396 (r) (i) "Residential unit" means a house, condominium, apartment, or similar dwelling
397 unit that:
398 (A) is located in the state; and
399 (B) serves as a dwelling for a person, group of persons, or a family.
400 (ii) "Residential unit" does not include property subject to a fee under:
401 (A) Section 59-2-405;
402 (B) Section 59-2-405.1;
403 (C) Section 59-2-405.2;
404 (D) Section 59-2-405.3; or
405 (E) Section 72-10-110.5.
406 (s) "Wind system" means a system of apparatus and equipment that is capable of:
407 (i) intercepting and converting wind energy into mechanical or electrical energy; and
408 (ii) transferring these forms of energy by a separate apparatus to the point of use, sale,
409 or storage.
410 (2) A taxpayer may claim an energy system tax credit as provided in this section
411 against a tax due under this chapter for a taxable year.
412 (3) (a) Subject to the other provisions of this Subsection (3), a taxpayer may claim a
413 nonrefundable tax credit under this Subsection (3) with respect to a residential unit the taxpayer
414 owns or uses if:
415 (i) the taxpayer:
416 (A) purchases and completes a residential energy system to supply all or part of the
417 energy required for the residential unit; or
418 (B) participates in the financing of a residential energy system to supply all or part of
419 the energy required for the residential unit; and
420 (ii) the taxpayer obtains a written certification from the office in accordance with
421 Subsection (8).
422 (b) (i) Subject to Subsections (3)(b)(ii) through (iv) and, as applicable, Subsection
423 (3)(c) or (d), the tax credit is equal to 25% of the reasonable costs of each residential energy
424 system installed with respect to each residential unit the taxpayer owns or uses.
425 (ii) A tax credit under this Subsection (3) may include installation costs.
426 (iii) A taxpayer may claim a tax credit under this Subsection (3) for the taxable year in
427 which the residential energy system is completed and placed in service.
428 (iv) If the amount of a tax credit under this Subsection (3) exceeds a taxpayer's tax
429 liability under this chapter for a taxable year, the taxpayer may carry forward the amount of the
430 tax credit exceeding the liability for a period that does not exceed the next four taxable years.
431 (c) The total amount of tax credit a taxpayer may claim under this Subsection (3) for a
432 residential energy system, other than a photovoltaic system, may not exceed $2,000 per
433 residential unit.
434 (d) The total amount of tax credit a taxpayer may claim under this Subsection (3) for a
435 photovoltaic system may not exceed:
436 (i) for a system installed on or after January 1, 2018, but on or before December 31,
437 2020, $1,600;
438 (ii) for a system installed on or after January 1, 2021, but on or before December 31,
439 2021, $1,200;
440 (iii) for a system installed on or after January 1, 2022, but on or before December 31,
441 2022, $800;
442 (iv) for a system installed on or after January 1, 2023, but on or before December 31,
443 2023, $400; and
444 (v) for a system installed on or after January 1, 2024, $0.
445 (e) If a taxpayer sells a residential unit to another person before the taxpayer claims the
446 tax credit under this Subsection (3):
447 (i) the taxpayer may assign the tax credit to the other person; and
448 (ii) (A) if the other person files a return under this chapter, the other person may claim
449 the tax credit under this section as if the other person had met the requirements of this section
450 to claim the tax credit; or
451 (B) if the other person files a return under Chapter 10, Individual Income Tax Act, the
452 other person may claim the tax credit under Section 59-10-1014 as if the other person had met
453 the requirements of Section 59-10-1014 to claim the tax credit.
454 (4) (a) Subject to the other provisions of this Subsection (4), a taxpayer may claim a
455 refundable tax credit under this Subsection (4) with respect to a commercial energy system if:
456 (i) the commercial energy system does not use:
457 (A) wind, geothermal electricity, [
458 total of 660 or more kilowatts of electricity; or
459 (B) solar equipment capable of producing 2,000 or more kilowatts of electricity;
460 (ii) the taxpayer purchases or participates in the financing of the commercial energy
461 system;
462 (iii) (A) the commercial energy system supplies all or part of the energy required by
463 commercial units owned or used by the taxpayer; or
464 (B) the taxpayer sells all or part of the energy produced by the commercial energy
465 system as a commercial enterprise;
466 (iv) the taxpayer has not claimed and will not claim a tax credit under Subsection (7)
467 for hydrogen production using electricity for which the taxpayer claims a tax credit under this
468 Subsection (4); and
469 (v) the taxpayer obtains a written certification from the office in accordance with
470 Subsection (8).
471 (b) (i) Subject to Subsections (4)(b)(ii) through (iv), the tax credit is equal to 10% of
472 the reasonable costs of the commercial energy system.
473 (ii) A tax credit under this Subsection (4) may include installation costs.
474 (iii) A taxpayer is eligible to claim a tax credit under this Subsection (4) for the taxable
475 year in which the commercial energy system is completed and placed in service.
476 (iv) The total amount of tax credit a taxpayer may claim under this Subsection (4) may
477 not exceed $50,000 per commercial unit.
478 (c) (i) Subject to Subsections (4)(c)(ii) and (iii), a taxpayer that is a lessee of a
479 commercial energy system installed on a commercial unit may claim a tax credit under this
480 Subsection (4) if the taxpayer confirms that the lessor irrevocably elects not to claim the tax
481 credit.
482 (ii) A taxpayer described in Subsection (4)(c)(i) may claim as a tax credit under this
483 Subsection (4) only the principal recovery portion of the lease payments.
484 (iii) A taxpayer described in Subsection (4)(c)(i) may claim a tax credit under this
485 Subsection (4) for a period that does not exceed seven taxable years after the day on which the
486 lease begins, as stated in the lease agreement.
487 (5) (a) Subject to the other provisions of this Subsection (5), a taxpayer may claim a
488 refundable tax credit under this Subsection (5) with respect to a commercial energy system if:
489 (i) the commercial energy system uses wind, geothermal electricity, or biomass
490 equipment capable of producing a total of 660 or more kilowatts of electricity;
491 (ii) (A) the commercial energy system supplies all or part of the energy required by
492 commercial units owned or used by the taxpayer; or
493 (B) the taxpayer sells all or part of the energy produced by the commercial energy
494 system as a commercial enterprise;
495 (iii) the taxpayer has not claimed and will not claim a tax credit under Subsection (7)
496 for hydrogen production using electricity for which the taxpayer claims a tax credit under this
497 Subsection (5); and
498 (iv) the taxpayer obtains a written certification from the office in accordance with
499 Subsection (8).
500 (b) (i) Subject to Subsection (5)(b)(ii), a tax credit under this Subsection (5) is equal to
501 the product of:
502 (A) 0.35 cents; and
503 (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
504 (ii) A taxpayer is eligible to claim a tax credit under this Subsection (5) for production
505 occurring during a period of 48 months beginning with the month in which the commercial
506 energy system is placed in commercial service.
507 (c) A taxpayer that is a lessee of a commercial energy system installed on a commercial
508 unit may claim a tax credit under this Subsection (5) if the taxpayer confirms that the lessor
509 irrevocably elects not to claim the tax credit.
510 (6) (a) Subject to the other provisions of this Subsection (6), a taxpayer may claim a
511 refundable tax credit as provided in this Subsection (6) if:
512 (i) the taxpayer owns a commercial energy system that uses solar equipment capable of
513 producing a total of [
514 (ii) (A) the commercial energy system supplies all or part of the energy required by
515 commercial units owned or used by the taxpayer; or
516 (B) the taxpayer sells all or part of the energy produced by the commercial energy
517 system as a commercial enterprise;
518 (iii) the taxpayer does not claim a tax credit under Subsection (4) and has not claimed
519 and will not claim a tax credit under Subsection (7) for hydrogen production using electricity
520 for which a taxpayer claims a tax credit under this Subsection (6); and
521 (iv) the taxpayer obtains a written certification from the office in accordance with
522 Subsection (8).
523 (b) (i) Subject to Subsection (6)(b)(ii), a tax credit under this Subsection (6) is equal to
524 the product of:
525 (A) 0.35 cents; and
526 (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
527 (ii) A taxpayer is eligible to claim a tax credit under this Subsection (6) for production
528 occurring during a period of 48 months beginning with the month in which the commercial
529 energy system is placed in commercial service.
530 (c) A taxpayer that is a lessee of a commercial energy system installed on a commercial
531 unit may claim a tax credit under this Subsection (6) if the taxpayer confirms that the lessor
532 irrevocably elects not to claim the tax credit.
533 (7) (a) A taxpayer may claim a refundable tax credit as provided in this Subsection (7)
534 if:
535 (i) the taxpayer owns a hydrogen production system;
536 (ii) the hydrogen production system is completed and placed in service on or after
537 January 1, 2022;
538 (iii) the taxpayer sells as a commercial enterprise, or supplies for the taxpayer's own
539 use in commercial units, the hydrogen produced from the hydrogen production system;
540 (iv) the taxpayer has not claimed and will not claim a tax credit under Subsection (4),
541 (5), or (6) or Section 59-7-626 for electricity or hydrogen used to meet the requirements of this
542 Subsection (7); and
543 (v) the taxpayer obtains a written certification from the office in accordance with
544 Subsection (8).
545 (b) (i) Subject to Subsections (7)(b)(ii) and (iii), a tax credit under this Subsection (7)
546 is equal to the product of:
547 (A) $0.12; and
548 (B) the number of kilograms of hydrogen produced during the taxable year.
549 (ii) A taxpayer may not receive a tax credit under this Subsection (7) for more than
550 5,600 metric tons of hydrogen per taxable year.
551 (iii) A taxpayer is eligible to claim a tax credit under this Subsection (7) for production
552 occurring during a period of 48 months beginning with the month in which the hydrogen
553 production system is placed in commercial service.
554 (8) (a) Before a taxpayer may claim a tax credit under this section, the taxpayer shall
555 obtain a written certification from the office.
556 (b) The office shall issue a taxpayer a written certification if the office determines that:
557 (i) the taxpayer meets the requirements of this section to receive a tax credit; and
558 (ii) the residential energy system, the commercial energy system, or the hydrogen
559 production system with respect to which the taxpayer seeks to claim a tax credit:
560 (A) has been completely installed;
561 (B) is a viable system for saving or producing energy from renewable resources; and
562 (C) is safe, reliable, efficient, and technically feasible to ensure that the residential
563 energy system, the commercial energy system, or the hydrogen production system uses the
564 state's renewable and nonrenewable energy resources in an appropriate and economic manner.
565 (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
566 office may make rules:
567 (i) for determining whether a residential energy system, a commercial energy system,
568 or a hydrogen production system meets the requirements of Subsection (8)(b)(ii); and
569 (ii) for purposes of a tax credit under Subsection (3) or (4), establishing the reasonable
570 costs of a residential energy system or a commercial energy system, as an amount per unit of
571 energy production.
572 (d) A taxpayer that obtains a written certification from the office shall retain the
573 certification for the same time period a person is required to keep books and records under
574 Section 59-1-1406.
575 (e) The office shall submit to the commission an electronic list that includes:
576 (i) the name and identifying information of each taxpayer to which the office issues a
577 written certification; and
578 (ii) for each taxpayer:
579 (A) the amount of the tax credit listed on the written certification; and
580 (B) the date the renewable energy system was installed.
581 (9) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
582 commission may make rules to address the certification of a tax credit under this section.
583 (10) A tax credit under this section is in addition to any tax credits provided under the
584 laws or rules and regulations of the United States.
585 Section 6. Section 59-10-137 is amended to read:
586 59-10-137. Review of credits allowed under this chapter.
587 (1) As used in this section, "committee" means the Revenue and Taxation Interim
588 Committee.
589 (2) (a) The committee shall review the tax credits described in this chapter as provided
590 in Subsection (3) and make recommendations concerning whether the tax credits should be
591 continued, modified, or repealed.
592 (b) In conducting the review required under Subsection (2)(a), the committee shall:
593 (i) schedule time on at least one committee agenda to conduct the review;
594 (ii) invite state agencies, individuals, and organizations concerned with the tax credit
595 under review to provide testimony;
596 (iii) (A) invite the Governor's Office of Economic Opportunity to present a summary
597 and analysis of the information for each tax credit regarding which the Governor's Office of
598 Economic Opportunity is required to make a report under this chapter; and
599 (B) invite the Office of the Legislative Fiscal Analyst to present a summary and
600 analysis of the information for each tax credit regarding which the Office of the Legislative
601 Fiscal Analyst is required to make a report under this chapter;
602 (iv) ensure that the committee's recommendations described in this section include an
603 evaluation of:
604 (A) the cost of the tax credit to the state;
605 (B) the purpose and effectiveness of the tax credit; and
606 (C) the extent to which the state benefits from the tax credit; [
607 (v) evaluate whether performance metrics or reporting requirements for the tax credit
608 would improve the committee's evaluation of the benefits to the claimant, estate, or trust and
609 the state from the tax credit; and
610 [
611 otherwise required by law.
612 (c) The committee shall prepare legislation for consideration by the Legislature at the
613 next general session recommending specific performance metrics or reporting requirements for
614 any tax credit that the committee determines meets the requirement described in Subsection
615 (2)(b)(v).
616 (3) (a) On or before November 30, 2017, and every three years after 2017, the
617 committee shall conduct the review required under Subsection (2) of the tax credits allowed
618 under the following sections:
619 (i) Section 59-10-1004;
620 (ii) Section 59-10-1010;
621 (iii) Section 59-10-1015;
622 [
623 [
624 [
625 [
626 [
627 [
628 [
629 [
630 (b) On or before November 30, 2018, and every three years after 2018, the committee
631 shall conduct the review required under Subsection (2) of the tax credits allowed under the
632 following sections:
633 (i) Section 59-10-1005;
634 (ii) Section 59-10-1006;
635 (iii) Section 59-10-1012;
636 (iv) Section 59-10-1022;
637 (v) Section 59-10-1023;
638 (vi) Section 59-10-1028;
639 (vii) Section 59-10-1034;
640 (viii) Section 59-10-1037; and
641 (ix) Section 59-10-1107.
642 (c) On or before November 30, 2019, and every three years after 2019, the committee
643 shall conduct the review required under Subsection (2) of the tax credits allowed under the
644 following sections:
645 (i) Section 59-10-1007;
646 (ii) Section 59-10-1014;
647 (iii) Section 59-10-1017;
648 (iv) Section 59-10-1018;
649 (v) Section 59-10-1019;
650 [
651 [
652 [
653 [
654 [
655 (d) (i) In addition to the reviews described in this Subsection (3), the committee shall
656 conduct a review of a tax credit described in this chapter that is enacted on or after January 1,
657 2017.
658 (ii) The committee shall complete a review described in this Subsection (3)(d) three
659 years after the effective date of the tax credit and every three years after the initial review date.
660 (4) On or before November 30, 2023, the committee shall:
661 (a) evaluate the effectiveness of the current process for issuing a tax credit described in
662 Section 59-10-1012;
663 (b) receive input from the commission regarding improvements to the process for
664 issuing a tax credit described in Section 59-10-1012; and
665 (c) if the committee makes a recommendation for improving the process for issuing a
666 tax credit described in Section 59-10-1012, prepare legislation for consideration by the
667 Legislature at the next general session.
668 Section 7. Section 59-10-1002.2 is amended to read:
669 59-10-1002.2. Apportionment of tax credits.
670 (1) A nonresident individual or a part-year resident individual that claims a tax credit
671 in accordance with Section 59-10-1017, 59-10-1018, 59-10-1019, 59-10-1022, 59-10-1023[
672
673 apportioned amount of the tax credit equal to:
674 (a) for a nonresident individual, the product of:
675 (i) the state income tax percentage for the nonresident individual; and
676 (ii) the amount of the tax credit that the nonresident individual would have been
677 allowed to claim but for the apportionment requirements of this section; or
678 (b) for a part-year resident individual, the product of:
679 (i) the state income tax percentage for the part-year resident individual; and
680 (ii) the amount of the tax credit that the part-year resident individual would have been
681 allowed to claim but for the apportionment requirements of this section.
682 (2) A nonresident estate or trust that claims a tax credit in accordance with Section
683 59-10-1017, 59-10-1020, 59-10-1022[
684 apportioned amount of the tax credit equal to the product of:
685 (a) the state income tax percentage for the nonresident estate or trust; and
686 (b) the amount of the tax credit that the nonresident estate or trust would have been
687 allowed to claim but for the apportionment requirements of this section.
688 Section 8. Section 59-10-1006 is repealed and reenacted to read:
689 59-10-1006. Historic preservation tax credit.
690 (1) As used in this section:
691 (a) "Certified historic building" means a building that:
692 (i) is listed on the National Register of Historic Places within three years of taking the
693 credit under this section; or
694 (ii) (A) is located in a National Register Historic District; and
695 (B) has been designated by the office as being of significance to the district.
696 (b) "Office" means the State Historic Preservation Office.
697 (c) (i) "Qualified rehabilitation expenditures" means any amount properly chargeable to
698 the rehabilitation and restoration of the physical elements of the building.
699 (ii) "Qualified rehabilitation expenditures" includes the historic decorative elements
700 and the upgrading of the structural, mechanical, electrical, and plumbing systems.
701 (iii) "Qualified rehabilitation expenditures" does not include expenditures related to:
702 (A) the claimant's, estate's, or trust's personal labor;
703 (B) cost of acquisition of the property;
704 (C) any expenditure attributable to the enlargement of an existing building;
705 (D) rehabilitation of a certified historic building without the approval required in
706 Subsection (3)(a)(i);
707 (E) an expenditure attributable to landscaping or other site features, outbuildings,
708 garages, and related features; or
709 (F) demolition and removal costs for an existing building on a property site.
710 (d) "Residential" means a building used for residential use, either owner occupied or
711 income producing.
712 (2) A claimant, estate, or trust may claim a nonrefundable tax credit in an amount equal
713 to 20% of qualified rehabilitation expenditures if:
714 (a) the qualified rehabilitation expenditures cost more than $10,000;
715 (b) the qualified rehabilitation expenditures are incurred in connection with a
716 residential certified historic building; and
717 (c) the claimant, estate, or trust has a written tax credit certificate issued in accordance
718 with Subsection (3).
719 (3) (a) The office shall issue a tax credit certificate if the office:
720 (i) approves all rehabilitation work for which a claimant, estate, or trust may claim a
721 tax credit as meeting the Secretary of the Interior's Standards for Rehabilitation before
722 completion of the rehabilitation project so that the office can provide corrective comments to
723 the claimant, estate, or trust to preserve the historic qualities of the building;
724 (ii) determines that the rehabilitation project conforms with the approved rehabilitation
725 work; and
726 (iii) verifies the property is a residential certified historic building and the amount of
727 the claimant's, estate's, or trust's qualified rehabilitation expenditures.
728 (b) The tax credit certificate shall list the amount of the tax credit that the claimant,
729 estate, or trust is eligible to claim.
730 (c) A claimant, estate, or trust that receives a tax credit certificate under this section
731 shall retain the tax credit certificate for the same time period a person is required to keep books
732 and records under Section 59-1-1406.
733 (d) The office shall provide the commission with an electronic report that includes for
734 each claimant, estate, or trust to which the office issued a tax credit certificate under this
735 section for a taxable year:
736 (i) the name of the claimant, estate, or trust;
737 (ii) the identifying information of the claimant, estate, or trust; and
738 (iii) the amount of tax credit that the claimant, estate, or trust is eligible to claim.
739 (4) A claimant, estate, or trust may carry forward the amount of the tax credit that
740 exceeds the claimant's, estate's, or trust's tax liability for five taxable years after the year in
741 which the claimant, estate, or trust claims a tax credit under this section.
742 (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
743 commission, in consultation with the office, shall make rules to implement this section.
744 (6) The office shall include the number of estimated new jobs created in the state from
745 rehabilitation work in the annual report described in Section 9-1-208.
746 Section 9. Section 59-10-1007 is amended to read:
747 59-10-1007. Recycling market development zones tax credits.
748 (1) Subject to other provisions of this section, a claimant, estate, or trust [
749
750
751 [
752 listed in Subsection 59-10-104(2) and the purchase price paid for machinery and equipment
753 used directly in:
754 [
755 [
756 [
757 personal property for sale; or
758 [
759 [
760 [
761
762
763 [
764 (2) (a) To claim a tax credit described in Subsection (1), the claimant, estate, or trust
765 shall receive from the Department of Environmental Quality a written certification, on a form
766 approved by the commission, that includes:
767 (i) a statement that the claimant, estate, or trust is operating within the boundaries of a
768 recycling market development zone;
769 [
770 [
771 purchased;
772 [
773 equipment;
774 [
775 [
776 claimant, estate, or trust is claiming a tax credit;
777 (vi) a statement that the machinery and equipment are integral to the composting or
778 recycling process; and
779 [
780 [
781
782 [
783 [
784 [
785 [
786 [
787 [
788
789 [
790 (b) (i) The Department of Environmental Quality shall provide a claimant, estate, or
791 trust seeking to claim a tax credit under Subsection (1) with a copy of the written certification.
792 (ii) The claimant, estate, or trust shall retain a copy of the written certification for the
793 same period of time that a person is required to keep books and records under Section
794 59-1-1406.
795 (c) The Department of Environmental Quality shall submit to the commission an
796 electronic list that includes:
797 (i) the name and identifying information of each claimant, estate, or trust to which the
798 Department of Environmental Quality issues a written certification; and
799 (ii) for each claimant, estate, or trust, the amount of each tax credit listed on the written
800 certification.
801 (3) A claimant, estate, or trust may not claim a tax credit [
802
803 tax liability as the tax liability is calculated:
804 (a) for the taxable year in which the claimant, estate, or trust made the purchases [
805
806 (b) before any other tax credits the claimant, estate, or trust may claim for the taxable
807 year; and
808 (c) before the claimant, estate, or trust claims a tax credit authorized by this section.
809 (4) The commission shall make rules governing what information a claimant, estate, or
810 trust shall file with the commission to verify the entitlement to and amount of a tax credit.
811 (5) Except as provided in Subsections (6) [
812 trust may carry forward, to the next three taxable years, the amount of a tax credit [
813
814 (6) A claimant, estate, or trust may not claim or carry forward a tax credit [
815
816 trust claims or carries forward a tax credit under Section 63N-2-213.
817 [
818
819
820 [
821 this section for a taxable year during which the claimant, estate, or trust claims the targeted
822 business income tax credit under Section 59-10-1112.
823 Section 10. Section 59-10-1014 is amended to read:
824 59-10-1014. Nonrefundable renewable energy systems tax credits -- Definitions --
825 Certification -- Rulemaking authority.
826 (1) As used in this section:
827 (a) (i) "Active solar system" means a system of equipment that is capable of:
828 (A) collecting and converting incident solar radiation into thermal, mechanical, or
829 electrical energy; and
830 (B) transferring a form of energy described in Subsection (1)(a)(i)(A) by a separate
831 apparatus to storage or to the point of use.
832 (ii) "Active solar system" includes water heating, space heating or cooling, and
833 electrical or mechanical energy generation.
834 (b) "Biomass system" means a system of apparatus and equipment for use in:
835 (i) converting material into biomass energy, as defined in Section 59-12-102; and
836 (ii) transporting the biomass energy by separate apparatus to the point of use or storage.
837 (c) "Direct use geothermal system" means a system of apparatus and equipment that
838 enables the direct use of geothermal energy to meet energy needs, including heating a building,
839 an industrial process, and aquaculture.
840 (d) "Geothermal electricity" means energy that is:
841 (i) contained in heat that continuously flows outward from the earth; and
842 (ii) used as a sole source of energy to produce electricity.
843 (e) "Geothermal energy" means energy generated by heat that is contained in the earth.
844 (f) "Geothermal heat pump system" means a system of apparatus and equipment that:
845 (i) enables the use of thermal properties contained in the earth at temperatures well
846 below 100 degrees Fahrenheit; and
847 (ii) helps meet heating and cooling needs of a structure.
848 (g) "Hydroenergy system" means a system of apparatus and equipment that is capable
849 of:
850 (i) intercepting and converting kinetic water energy into electrical or mechanical
851 energy; and
852 (ii) transferring this form of energy by separate apparatus to the point of use or storage.
853 (h) "Office" means the Office of Energy Development created in Section 79-6-401.
854 (i) (i) "Passive solar system" means a direct thermal system that utilizes the structure of
855 a building and its operable components to provide for collection, storage, and distribution of
856 heating or cooling during the appropriate times of the year by utilizing the climate resources
857 available at the site.
858 (ii) "Passive solar system" includes those portions and components of a building that
859 are expressly designed and required for the collection, storage, and distribution of solar energy.
860 (j) "Photovoltaic system" means an active solar system that generates electricity from
861 sunlight.
862 (k) (i) "Principal recovery portion" means the portion of a lease payment that
863 constitutes the cost a person incurs in acquiring a residential energy system.
864 (ii) "Principal recovery portion" does not include:
865 (A) an interest charge; or
866 (B) a maintenance expense.
867 (l) "Residential energy system" means the following used to supply energy to or for a
868 residential unit:
869 (i) an active solar system;
870 (ii) a biomass system;
871 (iii) a direct use geothermal system;
872 (iv) a geothermal heat pump system;
873 (v) a hydroenergy system;
874 (vi) a passive solar system; or
875 (vii) a wind system.
876 (m) (i) "Residential unit" means a house, condominium, apartment, or similar dwelling
877 unit that:
878 (A) is located in the state; and
879 (B) serves as a dwelling for a person, group of persons, or a family.
880 (ii) "Residential unit" does not include property subject to a fee under:
881 (A) Section 59-2-405;
882 (B) Section 59-2-405.1;
883 (C) Section 59-2-405.2;
884 (D) Section 59-2-405.3; or
885 (E) Section 72-10-110.5.
886 (n) "Wind system" means a system of apparatus and equipment that is capable of:
887 (i) intercepting and converting wind energy into mechanical or electrical energy; and
888 (ii) transferring these forms of energy by a separate apparatus to the point of use or
889 storage.
890 (2) A claimant, estate, or trust may claim an energy system tax credit as provided in
891 this section against a tax due under this chapter for a taxable year.
892 (3) For a taxable year beginning on or after January 1, 2007, a claimant, estate, or trust
893 may claim a nonrefundable tax credit under this section with respect to a residential unit the
894 claimant, estate, or trust owns or uses if:
895 (a) the claimant, estate, or trust:
896 (i) purchases and completes a residential energy system to supply all or part of the
897 energy required for the residential unit; or
898 (ii) participates in the financing of a residential energy system to supply all or part of
899 the energy required for the residential unit;
900 (b) the residential energy system is installed on or after January 1, 2007; and
901 (c) the claimant, estate, or trust obtains a written certification from the office in
902 accordance with Subsection (5).
903 (4) (a) For a residential energy system, other than a photovoltaic system, the tax credit
904 described in this section is equal to the lesser of:
905 (i) 25% of the reasonable costs, including installation costs, of each residential energy
906 system installed with respect to each residential unit the claimant, estate, or trust owns or uses;
907 and
908 (ii) $2,000.
909 (b) Subject to Subsection (5)(d), for a residential energy system that is a photovoltaic
910 system, the tax credit described in this section is equal to the lesser of:
911 (i) 25% of the reasonable costs, including installation costs, of each system installed
912 with respect to each residential unit the claimant, estate, or trust owns or uses; or
913 (ii) (A) for a system installed on or after January 1, 2007, but on or before December
914 31, 2017, $2,000;
915 (B) for a system installed on or after January 1, 2018, but on or before December 31,
916 2020, $1,600;
917 (C) for a system installed on or after January 1, 2021, but on or before December 31,
918 2021, $1,200;
919 (D) for a system installed on or after January 1, 2022, but on or before December 31,
920 2022, $800;
921 (E) for a system installed on or after January 1, 2023, but on or before December 31,
922 2023, $400; and
923 (F) for a system installed on or after January 1, 2024, $0.
924 (c) (i) The office shall determine the amount of the tax credit that a claimant, estate, or
925 trust may claim and list that amount on the written certification that the office issues under
926 Subsection (5).
927 (ii) The claimant, estate, or trust may claim the tax credit in the amount listed on the
928 written certification that the office issues under Subsection (5).
929 (d) A claimant, estate, or trust may claim a tax credit under Subsection (3) for the
930 taxable year in which the residential energy system is installed.
931 (e) If the amount of a tax credit listed on the written certification exceeds a claimant's,
932 estate's, or trust's tax liability under this chapter for a taxable year, the claimant, estate, or trust
933 may carry forward the amount of the tax credit exceeding the liability for a period that does not
934 exceed the next four taxable years.
935 (f) A claimant, estate, or trust may claim a tax credit with respect to additional
936 residential energy systems or parts of residential energy systems for a subsequent taxable year
937 if the total amount of tax credit the claimant, estate, or trust claims does not exceed $2,000 per
938 residential unit.
939 (g) (i) Subject to Subsections (4)(g)(ii) and (iii), a claimant, estate, or trust that leases a
940 residential energy system installed on a residential unit may claim a tax credit under Subsection
941 (3) if the claimant, estate, or trust confirms that the lessor irrevocably elects not to claim the tax
942 credit.
943 (ii) A claimant, estate, or trust described in Subsection (4)(g)(i) that leases a residential
944 energy system may claim as a tax credit under Subsection (3) only the principal recovery
945 portion of the lease payments.
946 (iii) A claimant, estate, or trust described in Subsection (4)(g)(i) that leases a
947 residential energy system may claim a tax credit under Subsection (3) for a period that does not
948 exceed seven taxable years after the date the lease begins, as stated in the lease agreement.
949 (h) If a claimant, estate, or trust sells a residential unit to another person before the
950 claimant, estate, or trust claims the tax credit under Subsection (3):
951 (i) the claimant, estate, or trust may assign the tax credit to the other person; and
952 (ii) (A) if the other person files a return under Chapter 7, Corporate Franchise and
953 Income Taxes, the other person may claim the tax credit as if the other person had met the
954 requirements of Section 59-7-614 to claim the tax credit; or
955 (B) if the other person files a return under this chapter, the other person may claim the
956 tax credit under this section as if the other person had met the requirements of this section to
957 claim the tax credit.
958 (5) (a) Before a claimant, estate, or trust may claim a tax credit under this section, the
959 claimant, estate, or trust shall obtain a written certification from the office.
960 (b) The office shall issue a claimant, estate, or trust a written certification if the office
961 determines that:
962 (i) the claimant, estate, or trust meets the requirements of this section to receive a tax
963 credit; and
964 (ii) the office determines that the residential energy system with respect to which the
965 claimant, estate, or trust seeks to claim a tax credit:
966 (A) has been completely installed;
967 (B) is a viable system for saving or producing energy from renewable resources; and
968 (C) is safe, reliable, efficient, and technically feasible to ensure that the residential
969 energy system uses the state's renewable and nonrenewable energy resources in an appropriate
970 and economic manner.
971 (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
972 office may make rules:
973 (i) for determining whether a residential energy system meets the requirements of
974 Subsection (5)(b)(ii); and
975 (ii) for purposes of determining the amount of a tax credit that a claimant, estate, or
976 trust may receive under Subsection (4), establishing the reasonable costs of a residential energy
977 system, as an amount per unit of energy production.
978 (d) A claimant, estate, or trust that obtains a written certification from the office shall
979 retain the certification for the same time period a person is required to keep books and records
980 under Section 59-1-1406.
981 (e) The office shall submit to the commission an electronic list that includes:
982 (i) the name and identifying information of each claimant, estate, or trust to which the
983 office issues a written certification; and
984 (ii) for each claimant, estate, or trust:
985 (A) the amount of the tax credit listed on the written certification; and
986 (B) the date the renewable energy system was installed.
987 (6) A tax credit under this section is in addition to any tax credits provided under the
988 laws or rules and regulations of the United States.
989 [
990
991
992 Section 11. Section 59-10-1106 is amended to read:
993 59-10-1106. Refundable renewable energy systems tax credits -- Definitions --
994 Certification -- Rulemaking authority.
995 (1) As used in this section:
996 (a) "Active solar system" means the same as that term is defined in Section
997 59-10-1014.
998 (b) "Biomass system" means the same as that term is defined in Section 59-10-1014.
999 (c) "Commercial energy system" means the same as that term is defined in Section
1000 59-7-614.
1001 (d) "Commercial enterprise" means the same as that term is defined in Section
1002 59-7-614.
1003 (e) "Commercial unit" means the same as that term is defined in Section 59-7-614.
1004 (f) "Direct use geothermal system" means the same as that term is defined in Section
1005 59-10-1014.
1006 (g) "Geothermal electricity" means the same as that term is defined in Section
1007 59-10-1014.
1008 (h) "Geothermal energy" means the same as that term is defined in Section 59-10-1014.
1009 (i) "Geothermal heat pump system" means the same as that term is defined in Section
1010 59-10-1014.
1011 (j) "Hydroenergy system" means the same as that term is defined in Section
1012 59-10-1014.
1013 (k) "Hydrogen production system" means the same as that term is defined in Section
1014 59-7-614.
1015 (l) "Office" means the Office of Energy Development created in Section 79-6-401.
1016 (m) "Passive solar system" means the same as that term is defined in Section
1017 59-10-1014.
1018 (n) "Principal recovery portion" means the same as that term is defined in Section
1019 59-10-1014.
1020 (o) "Wind system" means the same as that term is defined in Section 59-10-1014.
1021 (2) A claimant, estate, or trust may claim an energy system tax credit as provided in
1022 this section against a tax due under this chapter for a taxable year.
1023 (3) (a) Subject to the other provisions of this Subsection (3), a claimant, estate, or trust
1024 may claim a refundable tax credit under this Subsection (3) with respect to a commercial
1025 energy system if:
1026 (i) the commercial energy system does not use:
1027 (A) wind, geothermal electricity[
1028 total of 660 or more kilowatts of electricity; or
1029 (B) solar equipment capable of producing 2,000 or more kilowatts of electricity;
1030 (ii) the claimant, estate, or trust purchases or participates in the financing of the
1031 commercial energy system;
1032 (iii) (A) the commercial energy system supplies all or part of the energy required by
1033 commercial units owned or used by the claimant, estate, or trust; or
1034 (B) the claimant, estate, or trust sells all or part of the energy produced by the
1035 commercial energy system as a commercial enterprise;
1036 (iv) the claimant, estate, or trust has not claimed and will not claim a tax credit under
1037 Subsection (6) for hydrogen production using electricity for which the claimant, estate, or trust
1038 claims a tax credit under this Subsection (3); and
1039 (v) the claimant, estate, or trust obtains a written certification from the office in
1040 accordance with Subsection (7).
1041 (b) (i) Subject to Subsections (3)(b)(ii) through (iv), the tax credit is equal to 10% of
1042 the reasonable costs of the commercial energy system.
1043 (ii) A tax credit under this Subsection (3) may include installation costs.
1044 (iii) A claimant, estate, or trust is eligible to claim a tax credit under this Subsection (3)
1045 for the taxable year in which the commercial energy system is completed and placed in service.
1046 (iv) The total amount of tax credit a claimant, estate, or trust may claim under this
1047 Subsection (3) may not exceed $50,000 per commercial unit.
1048 (c) (i) Subject to Subsections (3)(c)(ii) and (iii), a claimant, estate, or trust that is a
1049 lessee of a commercial energy system installed on a commercial unit may claim a tax credit
1050 under this Subsection (3) if the claimant, estate, or trust confirms that the lessor irrevocably
1051 elects not to claim the tax credit.
1052 (ii) A claimant, estate, or trust described in Subsection (3)(c)(i) may claim as a tax
1053 credit under this Subsection (3) only the principal recovery portion of the lease payments.
1054 (iii) A claimant, estate, or trust described in Subsection (3)(c)(i) may claim a tax credit
1055 under this Subsection (3) for a period that does not exceed seven taxable years after the day on
1056 which the lease begins, as stated in the lease agreement.
1057 (4) (a) Subject to the other provisions of this Subsection (4), a claimant, estate, or trust
1058 may claim a refundable tax credit under this Subsection (4) with respect to a commercial
1059 energy system if:
1060 (i) the commercial energy system uses wind, geothermal electricity, or biomass
1061 equipment capable of producing a total of 660 or more kilowatts of electricity;
1062 (ii) (A) the commercial energy system supplies all or part of the energy required by
1063 commercial units owned or used by the claimant, estate, or trust; or
1064 (B) the claimant, estate, or trust sells all or part of the energy produced by the
1065 commercial energy system as a commercial enterprise;
1066 (iii) the claimant, estate, or trust has not claimed and will not claim a tax credit under
1067 Subsection (6) for hydrogen production using electricity for which the claimant, estate, or trust
1068 claims a tax credit under this Subsection (4); and
1069 (iv) the claimant, estate, or trust obtains a written certification from the office in
1070 accordance with Subsection (7).
1071 (b) (i) Subject to Subsection (4)(b)(ii), a tax credit under this Subsection (4) is equal to
1072 the product of:
1073 (A) 0.35 cents; and
1074 (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
1075 (ii) A claimant, estate, or trust is eligible to claim a tax credit under this Subsection (4)
1076 for production occurring during a period of 48 months beginning with the month in which the
1077 commercial energy system is placed in commercial service.
1078 (c) A claimant, estate, or trust that is a lessee of a commercial energy system installed
1079 on a commercial unit may claim a tax credit under this Subsection (4) if the claimant, estate, or
1080 trust confirms that the lessor irrevocably elects not to claim the tax credit.
1081 (5) (a) Subject to the other provisions of this Subsection (5), a claimant, estate, or trust
1082 may claim a refundable tax credit as provided in this Subsection (5) if:
1083 (i) the claimant, estate, or trust owns a commercial energy system that uses solar
1084 equipment capable of producing a total of [
1085 (ii) (A) the commercial energy system supplies all or part of the energy required by
1086 commercial units owned or used by the claimant, estate, or trust; or
1087 (B) the claimant, estate, or trust sells all or part of the energy produced by the
1088 commercial energy system as a commercial enterprise;
1089 (iii) the claimant, estate, or trust does not claim a tax credit under Subsection (3);
1090 (iv) the claimant, estate, or trust has not claimed and will not claim a tax credit under
1091 Subsection (6) for hydrogen production using electricity for which a taxpayer claims a tax
1092 credit under this Subsection (5); and
1093 (v) the claimant, estate, or trust obtains a written certification from the office in
1094 accordance with Subsection (7).
1095 (b) (i) Subject to Subsection (5)(b)(ii), a tax credit under this Subsection (5) is equal to
1096 the product of:
1097 (A) 0.35 cents; and
1098 (B) the kilowatt hours of electricity produced and used or sold during the taxable year.
1099 (ii) A claimant, estate, or trust is eligible to claim a tax credit under this Subsection (5)
1100 for production occurring during a period of 48 months beginning with the month in which the
1101 commercial energy system is placed in commercial service.
1102 (c) A claimant, estate, or trust that is a lessee of a commercial energy system installed
1103 on a commercial unit may claim a tax credit under this Subsection (5) if the claimant, estate, or
1104 trust confirms that the lessor irrevocably elects not to claim the tax credit.
1105 (6) (a) A claimant, estate, or trust may claim a refundable tax credit as provided in this
1106 Subsection (6) if:
1107 (i) the claimant, estate, or trust owns a hydrogen production system;
1108 (ii) the hydrogen production system is completed and placed in service on or after
1109 January 1, 2022;
1110 (iii) the claimant, estate, or trust sells as a commercial enterprise, or supplies for the
1111 claimant's, estate's, or trust's own use in commercial units, the hydrogen produced from the
1112 hydrogen production system;
1113 (iv) the claimant, estate, or trust has not claimed and will not claim a tax credit under
1114 Subsection (3), (4), or (5) for electricity used to meet the requirements of this Subsection (6);
1115 and
1116 (v) the claimant, estate, or trust obtains a written certification from the office in
1117 accordance with Subsection (7).
1118 (b) (i) Subject to Subsections (6)(b)(ii) and (iii), a tax credit under this Subsection (6)
1119 is equal to the product of:
1120 (A) $0.12; and
1121 (B) the number of kilograms of hydrogen produced during the taxable year.
1122 (ii) A claimant, estate, or trust may not receive a tax credit under this Subsection (6) for
1123 more than 5,600 metric tons of hydrogen per taxable year.
1124 (iii) A claimant, estate, or trust is eligible to claim a tax credit under this Subsection (6)
1125 for production occurring during a period of 48 months beginning with the month in which the
1126 hydrogen production system is placed in commercial service.
1127 (7) (a) Before a claimant, estate, or trust may claim a tax credit under this section, the
1128 claimant, estate, or trust shall obtain a written certification from the office.
1129 (b) The office shall issue a claimant, estate, or trust a written certification if the office
1130 determines that:
1131 (i) the claimant, estate, or trust meets the requirements of this section to receive a tax
1132 credit; and
1133 (ii) the commercial energy system or the hydrogen production system with respect to
1134 which the claimant, estate, or trust seeks to claim a tax credit:
1135 (A) has been completely installed;
1136 (B) is a viable system for saving or producing energy from renewable resources; and
1137 (C) is safe, reliable, efficient, and technically feasible to ensure that the commercial
1138 energy system or the hydrogen production system uses the state's renewable and nonrenewable
1139 resources in an appropriate and economic manner.
1140 (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1141 office may make rules:
1142 (i) for determining whether a commercial energy system or a hydrogen production
1143 system meets the requirements of Subsection (7)(b)(ii); and
1144 (ii) for purposes of a tax credit under Subsection (3), establishing the reasonable costs
1145 of a commercial energy system, as an amount per unit of energy production.
1146 (d) A claimant, estate, or trust that obtains a written certification from the office shall
1147 retain the certification for the same time period a person is required to keep books and records
1148 under Section 59-1-1406.
1149 (e) The office shall submit to the commission an electronic list that includes:
1150 (i) the name and identifying information of each claimant, estate, or trust to which the
1151 office issues a written certification; and
1152 (ii) for each claimant, estate, or trust:
1153 (A) the amount of the tax credit listed on the written certification; and
1154 (B) the date the commercial energy system or the hydrogen production system was
1155 installed.
1156 (8) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
1157 commission may make rules to address the certification of a tax credit under this section.
1158 (9) A tax credit under this section is in addition to any tax credits provided under the
1159 laws or rules and regulations of the United States.
1160 [
1161
1162
1163 Section 12. Section 63N-8-105 is amended to read:
1164 63N-8-105. Annual report.
1165 The office shall include the following information in the annual written report described
1166 in Section 63N-1a-306:
1167 (1) the office's success in attracting within-the-state production of television series,
1168 made-for-television movies, and motion pictures, including feature films and independent
1169 films;
1170 (2) the amount of incentive commitments made by the office under this part and the
1171 period of time over which the incentives will be paid; and
1172 (3) the economic impact on the state related to:
1173 (a) dollars left in the state; [
1174 (b) new state revenues generated by a motion picture company or a digital media
1175 company for each state-approved production; and
1176 [
1177 Section 13. Section 79-6-401 is amended to read:
1178 79-6-401. Office of Energy Development -- Creation -- Director -- Purpose --
1179 Rulemaking regarding confidential information -- Fees -- Transition for employees.
1180 (1) There is created an Office of Energy Development in the Department of Natural
1181 Resources.
1182 (2) (a) The energy advisor shall serve as the director of the office or, on or before June
1183 30, 2029, appoint a director of the office.
1184 (b) The director:
1185 (i) shall, if the energy advisor appoints a director under Subsection (2)(a), report to the
1186 energy advisor; and
1187 (ii) may appoint staff as funding within existing budgets allows.
1188 (c) The office may consolidate energy staff and functions existing in the state energy
1189 program.
1190 (3) The purposes of the office are to:
1191 (a) serve as the primary resource for advancing energy and mineral development in the
1192 state;
1193 (b) implement:
1194 (i) the state energy policy under Section 79-6-301; and
1195 (ii) the governor's energy and mineral development goals and objectives;
1196 (c) advance energy education, outreach, and research, including the creation of
1197 elementary, higher education, and technical college energy education programs;
1198 (d) promote energy and mineral development workforce initiatives; and
1199 (e) support collaborative research initiatives targeted at Utah-specific energy and
1200 mineral development.
1201 (4) By following the procedures and requirements of Title 63J, Chapter 5, Federal
1202 Funds Procedures Act, the office may:
1203 (a) seek federal grants or loans;
1204 (b) seek to participate in federal programs; and
1205 (c) in accordance with applicable federal program guidelines, administer federally
1206 funded state energy programs.
1207 (5) The office shall perform the duties required by Sections 11-42a-106, 59-5-102,
1208 [
1209
1210 (6) (a) For purposes of administering this section, the office may make rules, by
1211 following Title 63G, Chapter 3, Utah Administrative Rulemaking Act, to maintain as
1212 confidential, and not as a public record, information that the office receives from any source.
1213 (b) The office shall maintain information the office receives from any source at the
1214 level of confidentiality assigned by the source.
1215 (7) The office may charge application, filing, and processing fees in amounts
1216 determined by the office in accordance with Section 63J-1-504 as dedicated credits for
1217 performing office duties described in this part.
1218 (8) (a) An employee of the office is an at-will employee.
1219 (b) For an employee of the office on July 1, 2021, the employee shall have the same
1220 salary and benefit options the employee had when the office was part of the office of the
1221 governor.
1222 Section 14. Repealer.
1223 This bill repeals:
1224 Section 59-7-614.7, Nonrefundable alternative energy development tax credit.
1225 Section 59-10-1024, Nonrefundable tax credit for qualifying solar projects.
1226 Section 59-10-1025, Nonrefundable tax credit for investment in certain life science
1227 establishments.
1228 Section 59-10-1029, Nonrefundable alternative energy development tax credit.
1229 Section 63N-2-801, Title.
1230 Section 63N-2-802, Definitions.
1231 Section 63N-2-803, Tax credits issued by office.
1232 Section 63N-2-804, Person may not claim or pass through a tax credit without tax
1233 credit certificate.
1234 Section 63N-2-805, Application process.
1235 Section 63N-2-806, Criteria for tax credits.
1236 Section 63N-2-807, Rulemaking authority.
1237 Section 63N-2-808, Agreements between office and tax credit applicant and life
1238 science establishment -- Tax credit certificate.
1239 Section 63N-2-809, Issuance of tax credit certificates.
1240 Section 63N-2-810, Reports on tax credit certificates.
1241 Section 63N-2-811, Reports of tax credits.
1242 Section 79-6-501, Title.
1243 Section 79-6-502, Definitions.
1244 Section 79-6-503, Tax credits.
1245 Section 79-6-504, Qualifications for tax credit -- Procedure.
1246 Section 79-6-505, Report to the Legislature.
1247 Section 15. Effective date.
1248 (1) Except as provided in Subsections (2) and (3), this bill takes effect on January 1,
1249 2024.
1250 (2) The actions affecting the following sections take effect on May 3, 2023:
1251 (a) Section 59-7-159; and
1252 (b) Section 59-10-137.
1253 (3) The actions affecting the following sections take effect for a taxable year beginning
1254 on or after January 1, 2024:
1255 (a) Section 59-7-609;
1256 (b) Section 59-7-610;
1257 (c) Section 59-7-614;
1258 (d) Section 59-7-614.7;
1259 (e) Section 59-10-1002.2;
1260 (f) Section 59-10-1006;
1261 (g) Section 59-10-1007;
1262 (h) Section 59-10-1014;
1263 (i) Section 59-10-1024;
1264 (j) Section 59-10-1025;
1265 (k) Section 59-10-1029; and
1266 (l) Section 59-10-1106.