Rep. Norm Thurston — Voting Record

Bill

Number

S.B. 13 (2015GS)

Sponsor

Sen. Henderson, D.

Final action

Governor Signed 3/20/2015

Outcome

Became law — signed by Gov. Gary R. Herbert

Summary

What it does

• This bill:
• repeals provisions related to corporate and individual income tax credits;
• exempts a tax credit for a combat related death from certain provisions that require the State Tax Commission to remove a tax credit from a tax return and prohibit a taxpayer from claiming or carrying forward a tax credit;
• repeals provisions related to individual income tax contributions; and
• makes technical and conforming changes.

Every vote on this bill

Bill text

INCOME TAX AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Deidre M. Henderson
House Sponsor: 
Daniel McCay
LONG TITLE
General Description:
This bill repeals and amends provisions related to income taxes.
Highlighted Provisions:
This bill:
▸ repeals provisions related to corporate and individual income tax credits;
▸ exempts a tax credit for a combat related death from certain provisions that require
the State Tax Commission to remove a tax credit from a tax return and prohibit a
taxpayer from claiming or carrying forward a tax credit;
▸ repeals provisions related to individual income tax contributions; and
▸ makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
This bill provides a special effective date.
This bill provides for retrospective operation.
Utah Code Sections Affected:
AMENDS:
23-14-13
, as last amended by Laws of Utah 2010, Chapter 278
59-7-105
, as last amended by Laws of Utah 2010, Chapters 6 and 198
59-7-106
, as last amended by Laws of Utah 2014, Chapter 273
59-7-614
, as last amended by Laws of Utah 2014, Chapter 407
59-10-1002.1
, as renumbered and amended by Laws of Utah 2008, Chapter 389
59-10-1304
, as last amended by Laws of Utah 2013, Chapters 235 and 338
63M-1-1102
, as renumbered and amended by Laws of Utah 2008, Chapter 382
REPEALS:
59-7-602
, as last amended by Laws of Utah 2011, Chapter 366
59-7-603
, as enacted by Laws of Utah 1993, Chapter 169
59-7-608
, as last amended by Laws of Utah 2003, Chapter 198
59-7-614.3
, as last amended by Laws of Utah 2011, Chapter 384
59-10-1011
, as last amended by Laws of Utah 2011, Chapter 366
59-10-1305
, as renumbered and amended by Laws of Utah 2008, Chapter 389
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
23-14-13
 is amended to read:
23-14-13.
Wildlife Resources Account.
(1) There is created a restricted account within the General Fund known as the
"Wildlife Resources Account."
(2) The following money shall be deposited into the Wildlife Resources Account:
(a) revenue from the sale of licenses, permits, tags, and certificates of registration
issued under this title or a rule or proclamation of the Wildlife Board, except as otherwise
provided by this title;
(b) revenue from the sale, lease, rental, or other granting of rights of real or personal
property acquired with revenue specified in Subsection (2)(a);
(c) revenue from fines and forfeitures for violations of this title or any rule,
proclamation, or order of the Wildlife Board, minus court costs not to exceed the schedule
adopted by the Judicial Council;
(d) funds appropriated from the General Fund by the Legislature pursuant to Section
23-19-39
;
(e) other money received by the division under any provision of this title, except as
otherwise provided by this title; 
and
[
(f) contributions made in accordance with Section 
59-10-1305
; and
]
[
(g)
] 
(f)
 interest, dividends, or other income earned on account money.
(3) Money in the Wildlife Resources Account shall be used for the administration of
this title.
Section 2. Section 
59-7-105
 is amended to read:
59-7-105.
Additions to unadjusted income.
In computing adjusted income the following amounts shall be added to unadjusted
income:
(1) interest from bonds, notes, and other evidences of indebtedness issued by any state
of the United States, including any agency and instrumentality of a state of the United States;
(2) the amount of any deduction taken on a corporation's federal return for taxes paid
by a corporation:
(a) to Utah for taxes imposed by this chapter; and
(b) to another state of the United States, a foreign country, a United States possession,
or the Commonwealth of Puerto Rico for taxes imposed for the privilege of doing business, or
exercising its corporate franchise, including income, franchise, corporate stock and business
and occupation taxes;
(3) the safe harbor lease adjustment required under Subsections 
59-7-111
(1)(a) and
(2)(a);
(4) capital losses that have been deducted on a Utah corporate return in previous years;
(5) any deduction on the federal return that has been previously deducted on the Utah
return;
[
(6) the amount of contributions claimed as a tax credit pursuant to Section 
59-7-602
;
]
[
(7) the amount of the deduction taken pursuant to Section 
59-7-603
 for sophisticated
technological equipment;
]
[
(8)
] 
(6)
 charitable contributions, to the extent deducted on the federal return when
determining federal taxable income;
[
(9)
] 
(7)
 the amount of gain or loss determined under Section 
59-7-114
 relating to a
target corporation under Section 338, Internal Revenue Code, unless such gain or loss has
already been included in the unadjusted income of the target corporation;
[
(10)
] 
(8)
 the amount of gain or loss determined under Section 
59-7-115
 relating to
corporations treated for federal purposes as having disposed of its assets under Section 336(e),
Internal Revenue Code, unless such gain or loss has already been included in the unadjusted
income of the target corporation;
[
(11)
] 
(9)
 adjustments to gains, losses, depreciation expense, amortization expense, and
similar items due to a difference between basis for federal purposes and basis as computed
under Section 
59-7-107
;
[
(12)
] 
(10)
 the amount withdrawn under Title 53B, Chapter 8a, Utah Educational
Savings Plan, from the account of a corporation that is an account owner as defined in Section
53B-8a-102
, for the taxable year for which the amount is withdrawn, if that amount withdrawn
from the account of the corporation that is the account owner:
(a) is not expended for:
(i) higher education costs as defined in Section 
53B-8a-102
; or
(ii) a payment or distribution that qualifies as an exception to the additional tax for
distributions not used for educational expenses provided in Sections 529(c) and 530(d),
Internal Revenue Code; and
(b) is subtracted by the corporation:
(i) that is the account owner; and
(ii) in accordance with Subsection 
59-7-106
 (1)(r); and
[
(13)
] 
(11)
 the amount of the deduction for dividends paid, as defined in Section 561,
Internal Revenue Code, that is allowed under Section 857(b)(2)(B), Internal Revenue Code, in
computing the taxable income of a captive real estate investment trust, if that captive real estate
investment trust is subject to federal income taxation.
Section 3. Section 
59-7-106
 is amended to read:
59-7-106.
Subtractions from unadjusted income.
(1) In computing adjusted income the following amounts shall be subtracted from
unadjusted income:
(a) the foreign dividend gross-up included in gross income for federal income tax
purposes under Section 78, Internal Revenue Code;
(b) subject to Subsection (2), the net capital loss, as defined for federal purposes, if the
taxpayer elects to deduct the net capital loss on the return filed under this chapter for the
taxable year for which the net capital loss is incurred;
(c) the decrease in salary expense deduction for federal income tax purposes due to
claiming the federal work opportunity credit under Section 51, Internal Revenue Code;
(d) the decrease in qualified research and basic research expense deduction for federal
income tax purposes due to claiming the federal credit for increasing research activities under
Section 41, Internal Revenue Code;
(e) the decrease in qualified clinical testing expense deduction for federal income tax
purposes due to claiming the federal credit for clinical testing expenses for certain drugs for
rare diseases or conditions under Section 45C, Internal Revenue Code;
(f) any decrease in any expense deduction for federal income tax purposes due to
claiming any other federal credit;
(g) the safe harbor lease adjustment required under Subsections 
59-7-111
(1)(b) and
(2)(b);
(h) any income on the federal corporation income tax return that has been previously
taxed by Utah;
(i) an amount included in federal taxable income that is due to a refund of a tax,
including a franchise tax, an income tax, a corporate stock and business tax, or an occupation
tax:
(i) if that tax is imposed for the privilege of:
(A) doing business; or
(B) exercising a corporate franchise;
(ii) if that tax is paid by the corporation to:
(A) Utah;
(B) another state of the United States;
(C) a foreign country;
(D) a United States possession; or
(E) the Commonwealth of Puerto Rico; and
(iii) to the extent that tax was added to unadjusted income under Section 
59-7-105
;
(j) a charitable contribution, to the extent the charitable contribution is allowed as a
subtraction under Section 
59-7-109
;
(k) subject to Subsection (3), 50% of a dividend considered to be received or received
from a subsidiary that:
(i) is a member of the unitary group;
(ii) is organized or incorporated outside of the United States; and
(iii) is not included in a combined report under Section 
59-7-402
 or 
59-7-403
;
(l) subject to Subsection (4) and Section 
59-7-401
, 50% of the adjusted income of a
foreign operating company;
(m) the amount of gain or loss that is included in unadjusted income but not recognized
for federal purposes on stock sold or exchanged by a member of a selling consolidated group as
defined in Section 338, Internal Revenue Code, if an election has been made in accordance
with Section 338(h)(10), Internal Revenue Code;
(n) the amount of gain or loss that is included in unadjusted income but not recognized
for federal purposes on stock sold, exchanged, or distributed by a corporation in accordance
with Section 336(e), Internal Revenue Code, if an election under Section 336(e), Internal
Revenue Code, has been made for federal purposes;
(o) subject to Subsection (5), an adjustment to the following due to a difference
between basis for federal purposes and basis as computed under Section 
59-7-107
:
(i) an amortization expense;
(ii) a depreciation expense;
(iii) a gain;
(iv) a loss; or
(v) an item similar to Subsections (1)(o)(i) through (iv);
(p) an interest expense that is not deducted on a federal corporation income tax return
under Section 265(b) or 291(e), Internal Revenue Code;
(q) 100% of dividends received from a subsidiary that is an insurance company if that
subsidiary that is an insurance company is:
(i) exempt from this chapter under Subsection 
59-7-102
(1)(c); and
(ii) under common ownership;
(r) subject to Subsection 
59-7-105
[
(12)
]
(10)
, the amount of a qualified investment as
defined in Section 
53B-8a-102
 that:
(i) a corporation that is an account owner as defined in Section 
53B-8a-102
 makes
during the taxable year;
(ii) the corporation described in Subsection (1)(r)(i) does not deduct on a federal
corporation income tax return; and
(iii) does not exceed the maximum amount of the qualified investment that may be
subtracted from unadjusted income for a taxable year in accordance with Subsection
53B-8a-106
(1);
(s) for purposes of income included in a combined report under Part 4, Combined
Reporting, the entire amount of the dividends a member of a unitary group receives or is
considered to receive from a captive real estate investment trust; and
(t) the increase in income for federal income tax purposes due to claiming a:
(i) qualified tax credit bond credit under Section 54A, Internal Revenue Code; or
(ii) qualified zone academy bond under Section 1397E, Internal Revenue Code.
(2) For purposes of Subsection (1)(b):
(a) the subtraction shall be made by claiming the subtraction on a return filed:
(i) under this chapter for the taxable year for which the net capital loss is incurred; and
(ii) by the due date of the return, including extensions; and
(b) a net capital loss for a taxable year shall be:
(i) subtracted for the taxable year for which the net capital loss is incurred; or
(ii) carried forward as provided in Sections 1212(a)(1)(B) and (C), Internal Revenue
Code.
(3) (a) For purposes of calculating the subtraction provided for in Subsection (1)(k), a
taxpayer shall first subtract from a dividend considered to be received or received an expense
directly attributable to that dividend.
(b) For purposes of Subsection (3)(a), the amount of an interest expense that is
considered to be directly attributable to a dividend is calculated by multiplying the interest
expense by a fraction:
(i) the numerator of which is the taxpayer's average investment in the dividend paying
subsidiaries; and
(ii) the denominator of which is the taxpayer's average total investment in assets.
(c) (i) For purposes of calculating the subtraction allowed by Subsection (1)(k), in
determining income apportionable to this state, a portion of the factors of a foreign subsidiary
that has dividends that are partially subtracted under Subsection (1)(k) shall be included in the
combined report factors as provided in this Subsection (3)(c).
(ii) For purposes of Subsection (3)(c)(i), the portion of the factors of a foreign
subsidiary that has dividends that are partially subtracted under Subsection (1)(k) that shall be
included in the combined report factors is calculated by multiplying each factor of the foreign
subsidiary by a fraction:
(A) not to exceed 100%; and
(B) (I) the numerator of which is the amount of the dividend paid by the foreign
subsidiary that is included in adjusted income; and
(II) the denominator of which is the current year earnings and profits of the foreign
subsidiary as determined under the Internal Revenue Code.
(4) (a) For purposes of Subsection (1)(l), a taxpayer may not make a subtraction under
Subsection (1)(l):
(i) if the taxpayer elects to file a worldwide combined report as provided in Section
59-7-403
; or
(ii) for the following:
(A) income generated from intangible property; or
(B) a capital gain, dividend, interest, rent, royalty, or other similar item that is
generated from an asset held for investment and not from a regular business trading activity.
(b) In calculating the subtraction provided for in Subsection (1)(l), a foreign operating
company:
(i) may not subtract an amount provided for in Subsection (1)(k) or (l); and
(ii) prior to determining the subtraction under Subsection (1)(l), shall eliminate a
transaction that occurs between members of a unitary group.
(c) For purposes of the subtraction provided for in Subsection (1)(l), in determining
income apportionable to this state, the factors for a foreign operating company shall be
included in the combined report factors in the same percentages as the foreign operating
company's adjusted income is included in the combined adjusted income.
(d) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may by rule define what constitutes:
(i) income generated from intangible property; or
(ii) a capital gain, dividend, interest, rent, royalty, or other similar item that is
generated from an asset held for investment and not from a regular business trading activity.
(5) (a) For purposes of the subtraction provided for in Subsection (1)(o), the amount of
a reduction in basis shall be allowed as an expense for the taxable year in which a federal tax
credit is claimed if:
(i) there is a reduction in federal basis for a federal tax credit; and
(ii) there is no corresponding tax credit allowed in this state.
(b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may by rule define what constitutes an item similar to Subsections (1)(o)(i)
through (iv).
Section 4. Section 
59-7-614
 is amended to read:
59-7-614.
Renewable energy systems tax credit -- Definitions -- Limitations --
Certification -- Rulemaking authority.
(1) As used in this section:
(a) "Active solar system":
(i) means a system of equipment capable of collecting and converting incident solar
radiation into thermal, mechanical, or electrical energy, and transferring these forms of energy
by a separate apparatus to storage or to the point of use; and
(ii) includes water heating, space heating or cooling, and electrical or mechanical
energy generation.
(b) "Biomass system" means any system of apparatus and equipment for use in
converting material into biomass energy, as defined in Section 
59-12-102
, and transporting that
energy by separate apparatus to the point of use or storage.
(c) "Business entity" means any sole proprietorship, estate, trust, partnership,
association, corporation, cooperative, or other entity under which business is conducted or
transacted.
(d) "Commercial energy system" means any active solar, passive solar, geothermal
electricity, direct-use geothermal, geothermal heat-pump system, wind, hydroenergy, or
biomass system used to supply energy to a commercial unit or as a commercial enterprise.
(e) "Commercial enterprise" means a business entity whose purpose is to produce
electrical, mechanical, or thermal energy for sale from a commercial energy system.
(f) (i) "Commercial unit" means any building or structure that a business entity uses to
transact its business.
(ii) Notwithstanding Subsection (1)(f)(i):
(A) in the case of an active solar system used for agricultural water pumping or a wind
system, each individual energy generating device shall be a commercial unit; and
(B) if an energy system is the building or structure that a business entity uses to
transact its business, a commercial unit is the complete energy system itself.
(g) "Direct-use geothermal system" means a system of apparatus and equipment
enabling the direct use of thermal energy, generally between 100 and 300 degrees Fahrenheit,
that is contained in the earth to meet energy needs, including heating a building, an industrial
process, and aquaculture.
(h) "Geothermal electricity" means energy contained in heat that continuously flows
outward from the earth that is used as a sole source of energy to produce electricity.
(i) "Geothermal heat-pump system" means a system of apparatus and equipment
enabling the use of thermal properties contained in the earth at temperatures well below 100
degrees Fahrenheit to help meet heating and cooling needs of a structure.
(j) "Hydroenergy system" means a system of apparatus and equipment capable of
intercepting and converting kinetic water energy into electrical or mechanical energy and
transferring this form of energy by separate apparatus to the point of use or storage.
(k) "Individual taxpayer" means any person who is a taxpayer as defined in Section
59-10-103
 and an individual as defined in Section 
59-10-103
.
(l) "Office" means the Office of Energy Development created in Section 
63M-4-401
.
(m) "Passive solar system":
(i) means a direct thermal system that utilizes the structure of a building and its
operable components to provide for collection, storage, and distribution of heating or cooling
during the appropriate times of the year by utilizing the climate resources available at the site;
and
(ii) includes those portions and components of a building that are expressly designed
and required for the collection, storage, and distribution of solar energy.
(n) "Residential energy system" means any active solar, passive solar, biomass,
direct-use geothermal, geothermal heat-pump system, wind, or hydroenergy system used to
supply energy to or for any residential unit.
(o) "Residential unit" means any house, condominium, apartment, or similar dwelling
unit that serves as a dwelling for a person, group of persons, or a family but does not include
property subject to a fee under:
(i) Section 
59-2-404
;
(ii) Section 
59-2-405
;
(iii) Section 
59-2-405.1
;
(iv) Section 
59-2-405.2
; or
(v) Section 
59-2-405.3
.
(p) "Wind system" means a system of apparatus and equipment capable of intercepting
and converting wind energy into mechanical or electrical energy and transferring these forms of
energy by a separate apparatus to the point of use, sale, or storage.
(2) (a) (i) A business entity that purchases and completes or participates in the
financing of a residential energy system to supply all or part of the energy required for a
residential unit owned or used by the business entity and located in the state may claim a
nonrefundable tax credit as provided in this Subsection (2)(a).
(ii) (A) The tax credit is equal to 25% of the reasonable costs of each residential energy
system installed with respect to each residential unit the business entity owns or uses, including
installation costs, against any tax due under this chapter for the taxable year in which the
energy system is completed and placed in service.
(B) The total amount of each tax credit under this Subsection (2)(a) may not exceed
$2,000 per residential unit.
(C) The tax credit under this Subsection (2)(a) is allowed for any residential energy
system completed and placed in service on or after January 1, 2007.
(iii) If a business entity sells a residential unit to an individual taxpayer before making
a claim for the tax credit under this Subsection (2)(a), the business entity may:
(A) assign its right to this tax credit to the individual taxpayer; and
(B) if the business entity assigns its right to the tax credit to an individual taxpayer
under Subsection (2)(a)(iii)(A), the individual taxpayer may claim the tax credit as if the
individual taxpayer had completed or participated in the costs of the residential energy system
under Section 
59-10-1014
.
(b) (i) A business entity that purchases or participates in the financing of a commercial
energy system situated in Utah may claim a refundable tax credit as provided in this Subsection
(2)(b) if the commercial energy system does not use wind, geothermal electricity, solar, or
biomass equipment capable of producing a total of 660 or more kilowatts of electricity or if the
commercial energy system does not use solar equipment capable of producing 2,000 or more
kilowatts of electricity, and:
(A) the commercial energy system supplies all or part of the energy required by
commercial units owned or used by the business entity; or
(B) the business entity sells all or part of the energy produced by the commercial
energy system as a commercial enterprise.
(ii) (A) A business entity is entitled to a tax credit of up to 10% of the reasonable costs
of any commercial energy system installed, including installation costs, against any tax due
under this chapter for the taxable year in which the commercial energy system is completed and
placed in service.
(B) Notwithstanding Subsection (2)(b)(ii)(A), the total amount of the tax credit under
this Subsection (2)(b) may not exceed $50,000 per commercial unit.
(C) The tax credit under this Subsection (2)(b) is allowed for any commercial energy
system completed and placed in service on or after January 1, 2007.
(iii) A business entity that leases a commercial energy system installed on a
commercial unit is eligible for the tax credit under this Subsection (2)(b) if the lessee can
confirm that the lessor irrevocably elects not to claim the tax credit.
(iv) Only the principal recovery portion of the lease payments, which is the cost
incurred by a business entity in acquiring a commercial energy system, excluding interest
charges and maintenance expenses, is eligible for the tax credit under this Subsection (2)(b).
(v) A business entity that leases a commercial energy system is eligible to use the tax
credit under this Subsection (2)(b) for a period no greater than seven years from the initiation
of the lease.
(vi) A tax credit allowed by this Subsection (2)(b) may not be carried forward or
carried back.
(c) (i) A business entity that owns a commercial energy system located in the state
using wind, geothermal electricity, or biomass equipment capable of producing a total of 660 or
more kilowatts of electricity may claim a refundable tax credit as provided in this Subsection
(2)(c) if:
(A) the commercial energy system supplies all or part of the energy required by
commercial units owned or used by the business entity; or
(B) the business entity sells all or part of the energy produced by the commercial
energy system as a commercial enterprise.
(ii) (A) A business entity may claim a tax credit under this section equal to the product
of:
(I) 0.35 cents; and
(II) the kilowatt hours of electricity produced and either used or sold during the taxable
year.
(B) (I) The tax credit calculated under Subsection (2)(c)(ii)(A) may be claimed for
production occurring during a period of 48 months beginning with the month in which the
commercial energy system is placed in commercial service.
(II) The tax credit allowed by this Subsection (2)(c) for each year may not be carried
forward or carried back.
(C) The tax credit under this Subsection (2)(c) is allowed for any commercial energy
system completed and placed in service on or after January 1, 2007.
(iii) A business entity that leases a commercial energy system installed on a
commercial unit is eligible for the tax credit under this Subsection (2)(c) if the lessee can
confirm that the lessor irrevocably elects not to claim the tax credit.
(d) (i) A tax credit under Subsection (2)(a) or (b) may be claimed for the taxable year
in which the energy system is completed and placed in service.
(ii) Additional energy systems or parts of energy systems may be claimed for
subsequent years.
(iii) If the amount of a tax credit under Subsection (2)(a) exceeds a business entity's tax
liability under this chapter for a taxable year, the amount of the tax credit exceeding the
liability may be carried forward for a period that does not exceed the next four taxable years.
(3) (a) A business entity that owns a commercial energy system located in the state that
uses solar equipment capable of producing a total of 660 or more kilowatts of electricity may
claim a refundable tax credit as provided in this Subsection (3) if:
(i) (A) the commercial energy system supplies all or part of the energy required by
commercial units owned or used by the business entity; or
(B) the business entity sells all or part of the energy produced by the commercial
energy system as a commercial enterprise; and
(ii) the business entity does not claim a tax credit under Subsection (2)(b).
(b) A business entity may claim a tax credit under this section equal to the product of:
(i) 0.35 cents; and
(ii) the kilowatt hours of electricity produced and either used or sold during the taxable
year.
(c) The tax credit under this Subsection (3) may be claimed for production occurring
during a period of 48 months beginning with the month in which the commercial energy
system is placed in commercial service.
(d) The tax credit under this Subsection (3) may not be carried forward or carried back.
(e) The tax credit under this Subsection (3) is allowed for a commercial energy system
completed and placed in service on or after January 1, 2015.
(f) A business entity that leases a commercial energy system installed on a commercial
unit may claim a tax credit under this Subsection (3) if the business entity that is the lessee can
confirm that the lessor irrevocably elects not to claim the tax credit.
(4) (a) [
Except as provided in Subsection (4)(b), the
] 
The
 tax credits provided for
under Subsection (2) or (3) are in addition to any tax credits provided under the laws or rules
and regulations of the United States.
[
(b) A purchaser of one or more solar units that claims a tax credit under Section
59-7-614.3
 for the purchase of the one or more solar units may not claim a tax credit under this
section for that purchase.
]
[
(c)
] 
(b)
 (i) The office may set standards for residential and commercial energy systems
claiming a tax credit under Subsections (2)(a) and (b) that cover the safety, reliability,
efficiency, leasing, and technical feasibility of the systems to ensure that the systems eligible
for the tax credit use the state's renewable and nonrenewable energy resources in an appropriate
and economic manner.
(ii) The office may set standards for residential and commercial energy systems that
establish the reasonable costs of an energy system, as used in Subsections (2)(a)(ii)(A) and
(2)(b)(ii)(A), as an amount per unit of energy production.
(iii) A tax credit may not be taken under Subsection (2) or (3) until the office has
certified that the energy system has been completely installed and is a viable system for saving
or production of energy from renewable resources.
[
(d)
] 
(c)
 The office and the commission may make rules in accordance with Title 63G,
Chapter 3, Utah Administrative Rulemaking Act, that are necessary to implement this section.
(5) (a) On or before October 1, 2012, and every five years thereafter, the Revenue and
Taxation Interim Committee shall review each tax credit provided by this section and report its
recommendations to the Legislative Management Committee concerning whether the tax credit
should be continued, modified, or repealed.
(b) The Revenue and Taxation Interim Committee's report under Subsection (5)(a)
shall include information concerning the cost of the tax credit, the purpose and effectiveness of
the tax credit, and the state's benefit from the tax credit.
Section 5. Section 
59-10-1002.1
 is amended to read:
59-10-1002.1.
Removal of tax credit from tax return and prohibition on claiming
or carrying forward a tax credit -- Conditions for removal and prohibition on claiming or
carrying forward a tax credit -- Exception -- Commission reporting requirements.
(1) As used in this section, "tax return" means a tax return filed in accordance with this
chapter.
(2) [
Beginning
] 
Except as provided in Subsection (4), beginning
 two taxable years
after the requirements of Subsection (3) are met:
(a) the commission shall remove a tax credit allowed under this part from each tax
return on which the tax credit appears; and
(b) a claimant, estate, or trust filing a tax return may not claim or carry forward the tax
credit.
(3) [
The
] 
Except as provided in Subsection (4), the
 commission shall remove a tax
credit allowed under this part from a tax return and a claimant, estate, or trust filing a tax return
may not claim or carry forward the tax credit as provided in Subsection (2) if:
(a) the total amount of the tax credit claimed or carried forward by all claimants,
estates, or trusts filing tax returns is less than $10,000 per year for three consecutive taxable
years beginning on or after January 1, 2002; and
(b) less than 10 claimants, estates, and trusts per year for the three consecutive taxable
years described in Subsection (3)(a), file a tax return claiming or carrying forward the tax
credit.
(4) This section does not apply to a tax credit under Section 
59-10-1027
.
[
(4)
] 
(5)
 The commission shall, on or before the November interim meeting of the year
after the taxable year in which the requirements of Subsection (3) are met:
(a) report to the Revenue and Taxation Interim Committee that in accordance with this
section:
(i) the commission is required to remove a tax credit from each tax return on which the
tax credit appears; and
(ii) a claimant, estate, or trust filing a tax return may not claim or carry forward the tax
credit; and
(b) notify each state agency required by statute to assist in the administration of the tax
credit that in accordance with this section:
(i) the commission is required to remove a tax credit from each tax return on which the
tax credit appears; and
(ii) a claimant, estate, or trust filing a tax return may not claim or carry forward the tax
credit.
Section 6. Section 
59-10-1304
 is amended to read:
59-10-1304.
Removal of designation and prohibitions on collection for certain
contributions on income tax return -- Conditions for removal and prohibitions on
collection -- Commission reporting requirements.
(1) (a) If a contribution or combination of contributions described in Subsection (1)(b)
generate less than $30,000 per year for three consecutive years, the commission shall remove
the designation for the contribution from the individual income tax return and may not collect
the contribution from a resident or nonresident individual beginning two taxable years after the
three-year period for which the contribution generates less than $30,000 per year.
(b) The following contributions apply to Subsection (1)(a):
[
(i) the contribution provided for in Section 
59-10-1305
;
]
[
(ii)
] 
(i)
 the contribution provided for in Section 
59-10-1306
;
[
(iii)
] 
(ii)
 the sum of the contributions provided for in Subsection 
59-10-1307
(1);
[
(iv)
] 
(iii)
 the contribution provided for in Section 
59-10-1308
;
[
(v)
] 
(iv)
 the contribution provided for in Section 
59-10-1310
;
[
(vi)
] 
(v)
 the contribution provided for in Section 
59-10-1315
;
[
(vii)
] 
(vi)
 the sum of the contributions provided for in:
(A) Section 
59-10-1316
; and
(B) Section 
59-10-1317
; or
[
(viii)
] 
(vii)
 the contribution provided for in Section 
59-10-1318
.
(2) If the commission removes the designation for a contribution under Subsection (1),
the commission shall report to the Revenue and Taxation Interim Committee that the
commission removed the designation on or before the November interim meeting of the year in
which the commission determines to remove the designation.
Section 7. Section 
63M-1-1102
 is amended to read:
63M-1-1102.
Definitions.
As used in this part:
(1) "Composting" means the controlled decay of landscape waste or sewage sludge and
organic industrial waste, or a mixture of these, by the action of bacteria, fungi, molds, and other
organisms.
(2) "Postconsumer waste material" means any product generated by a business or
consumer that has served its intended end use, and that has been separated from solid waste for
the purposes of collection, recycling, and disposition and that does not include secondary waste
material.
(3) (a) "Recovered materials" means waste materials and by-products that have been
recovered or diverted from solid waste.
(b) "Recovered materials" does not include those materials and by-products generated
from, and commonly reused within, an original manufacturing process.
(4) (a) "Recycling" means the diversion of materials from the solid waste stream and
the beneficial use of the materials and includes a series of activities by which materials that
would become or otherwise remain waste are diverted from the waste stream for collection,
separation, and processing, and are used as raw materials or feedstocks in lieu of or in addition
to virgin materials in the manufacture of goods sold or distributed in commerce or the reuse of
the materials as substitutes for goods made from virgin materials.
(b) "Recycling" does not include burning municipal solid waste for energy recovery.
(5) "Recycling market development zone" or "zone" means an area designated by the
office as meeting the requirements of this part.
(6) (a) "Secondary waste material" means industrial by-products that go to disposal
facilities and waste generated after completion of a manufacturing process.
(b) "Secondary waste material" does not include internally generated scrap commonly
returned to industrial or manufacturing processes, such as home scrap and mill broke.
(7) [
"State tax incentives," "tax incentives," or "tax benefits"
] 
"Tax incentive"
 means
[
the
] 
a
 nonrefundable tax [
credits
] 
credit
 available under [
Sections 
59-7-608
 and
] 
Section
59-7-610
 or
59-10-1007
.
Section 8. 
Repealer.
This bill repeals:
Section 
59-7-602
,
Credit for cash contributions to sheltered workshops.
Section 
59-7-603
,
Credit for sophisticated technological equipment donated to
schools.
Section 
59-7-608
,
Targeted jobs tax credit.
Section 
59-7-614.3
,
Nonrefundable tax credit for qualifying solar projects.
Section 
59-10-1011
,
Tutoring tax credits for dependents with a disability.
Section 
59-10-1305
,
Nongame wildlife contribution -- Credit to Wildlife Resources
Account.
Section 9. 
Effective date.
(1) Except as provided in Subsection (2), this bill takes effect on May 12, 2015.
(2) The actions affecting the following have retrospective operation for a taxable year
beginning on or after January 1, 2015:
(a) Section 
59-7-105
;
(b) Section 
59-7-106
;
(c) Section 
59-7-602
;
(d) Section 
59-7-603
;
(e) Section 
59-7-608
;
(f) Section 
59-7-614
;
(g) Section 
59-7-614.3
;
(h) Section 
59-10-1002.1
;
(i) Section 
59-10-1011
;
(j) Section 
59-10-1304
;
(k) Section 
59-10-1305
; and
(l) Section 
63M-1-1102
.