Rep. Norm Thurston — Voting Record

Bill

Number

S.B. 14 (2015GS)

Sponsor

Sen. Okerlund, R.

Final action

Governor Signed 3/24/2015

Outcome

Became law — signed by Gov. Gary R. Herbert

Summary

What it does

• This bill:
• defines terms;
• addresses renewable energy tax credits; and
• makes technical and conforming changes.

Every vote on this bill

Bill text

RENEWABLE ENERGY TAX CREDIT AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Ralph Okerlund
House Sponsor: 
Brad L. Dee
LONG TITLE
General Description:
This bill addresses renewable energy tax credits.
Highlighted Provisions:
This bill:
▸ defines terms;
▸ addresses renewable energy tax credits; 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.
This bill provides a coordination clause.
Utah Code Sections Affected:
AMENDS:
59-2-102
, as last amended by Laws of Utah 2014, Chapters 65 and 411
59-7-614
, as last amended by Laws of Utah 2014, Chapter 407
59-10-1014
, as last amended by Laws of Utah 2012, Chapter 37
59-10-1106
, as last amended by Laws of Utah 2012, Chapter 37
Utah Code Sections Affected by Coordination Clause:
59-7-614
, as last amended by Laws of Utah 2014, Chapter 407
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
59-2-102
 is amended to read:
59-2-102.
Definitions.
As used in this chapter and title:
(1) "Aerial applicator" means aircraft or rotorcraft used exclusively for the purpose of
engaging in dispensing activities directly affecting agriculture or horticulture with an
airworthiness certificate from the Federal Aviation Administration certifying the aircraft or
rotorcraft's use for agricultural and pest control purposes.
(2) "Air charter service" means an air carrier operation which requires the customer to
hire an entire aircraft rather than book passage in whatever capacity is available on a scheduled
trip.
(3) "Air contract service" means an air carrier operation available only to customers
who engage the services of the carrier through a contractual agreement and excess capacity on
any trip and is not available to the public at large.
(4) "Aircraft" is as defined in Section 
72-10-102
.
(5) (a) Except as provided in Subsection (5)(b), "airline" means an air carrier that:
(i) operates:
(A) on an interstate route; and
(B) on a scheduled basis; and
(ii) offers to fly one or more passengers or cargo on the basis of available capacity on a
regularly scheduled route.
(b) "Airline" does not include an:
(i) air charter service; or
(ii) air contract service.
(6) "Assessment roll" means a permanent record of the assessment of property as
assessed by the county assessor and the commission and may be maintained manually or as a
computerized file as a consolidated record or as multiple records by type, classification, or
categories.
(7) (a) "Certified revenue levy" means a property tax levy that provides an amount of
ad valorem property tax revenue equal to the sum of:
(i) the amount of ad valorem property tax revenue to be generated statewide in the
previous year from imposing a school minimum basic tax rate, as specified in Subsection
53A-17a-135
(1)(a), or multicounty assessing and collecting levy, as specified in Section
59-2-1602
; and
(ii) the product of:
(A) new growth, as defined in:
(I) Section 
59-2-924
; and
(II) rules of the commission; and
(B) the school minimum basic tax rate or multicounty assessing and collecting levy
certified by the commission for the previous year.
(b) For purposes of this Subsection (7), "ad valorem property tax revenue" does not
include property tax revenue received by a taxing entity from personal property that is:
(i) assessed by a county assessor in accordance with Part 3, County Assessment; and
(ii) semiconductor manufacturing equipment.
(c) For purposes of calculating the certified revenue levy described in this Subsection
(7), the commission shall use:
(i) the taxable value of real property assessed by a county assessor contained on the
assessment roll;
(ii) the taxable value of real and personal property assessed by the commission; and
(iii) the taxable year end value of personal property assessed by a county assessor
contained on the prior year's assessment roll.
(8) "County-assessed commercial vehicle" means:
(a) any commercial vehicle, trailer, or semitrailer which is not apportioned under
Section 
41-1a-301
 and is not operated interstate to transport the vehicle owner's goods or
property in furtherance of the owner's commercial enterprise;
(b) any passenger vehicle owned by a business and used by its employees for
transportation as a company car or vanpool vehicle; and
(c) vehicles that are:
(i) especially constructed for towing or wrecking, and that are not otherwise used to
transport goods, merchandise, or people for compensation;
(ii) used or licensed as taxicabs or limousines;
(iii) used as rental passenger cars, travel trailers, or motor homes;
(iv) used or licensed in this state for use as ambulances or hearses;
(v) especially designed and used for garbage and rubbish collection; or
(vi) used exclusively to transport students or their instructors to or from any private,
public, or religious school or school activities.
(9) (a) Except as provided in Subsection (9)(b), for purposes of Section 
59-2-801
,
"designated tax area" means a tax area created by the overlapping boundaries of only the
following taxing entities:
(i) a county; and
(ii) a school district.
(b) Notwithstanding Subsection (9)(a), "designated tax area" includes a tax area created
by the overlapping boundaries of:
(i) the taxing entities described in Subsection (9)(a); and
(ii) (A) a city or town if the boundaries of the school district under Subsection (9)(a)
and the boundaries of the city or town are identical; or
(B) a special service district if the boundaries of the school district under Subsection
(9)(a) are located entirely within the special service district.
(10) "Eligible judgment" means a final and unappealable judgment or order under
Section 
59-2-1330
:
(a) that became a final and unappealable judgment or order no more than 14 months
prior to the day on which the notice required by Section 
59-2-919.1
 is required to be mailed;
and
(b) for which a taxing entity's share of the final and unappealable judgment or order is
greater than or equal to the lesser of:
(i) $5,000; or
(ii) 2.5% of the total ad valorem property taxes collected by the taxing entity in the
previous fiscal year.
(11) (a) "Escaped property" means any property, whether personal, land, or any
improvements to the property, subject to taxation and is:
(i) inadvertently omitted from the tax rolls, assigned to the incorrect parcel, or assessed
to the wrong taxpayer by the assessing authority;
(ii) undervalued or omitted from the tax rolls because of the failure of the taxpayer to
comply with the reporting requirements of this chapter; or
(iii) undervalued because of errors made by the assessing authority based upon
incomplete or erroneous information furnished by the taxpayer.
(b) Property that is undervalued because of the use of a different valuation
methodology or because of a different application of the same valuation methodology is not
"escaped property."
(12) "Fair market value" means the amount at which property would change hands
between a willing buyer and a willing seller, neither being under any compulsion to buy or sell
and both having reasonable knowledge of the relevant facts. For purposes of taxation, "fair
market value" shall be determined using the current zoning laws applicable to the property in
question, except in cases where there is a reasonable probability of a change in the zoning laws
affecting that property in the tax year in question and the change would have an appreciable
influence upon the value.
(13) "Farm machinery and equipment," for purposes of the exemption provided under
Section 
59-2-1101
, means tractors, milking equipment and storage and cooling facilities, feed
handling equipment, irrigation equipment, harvesters, choppers, grain drills and planters, tillage
tools, scales, combines, spreaders, sprayers, haying equipment, including balers and cubers,
and any other machinery or equipment used primarily for agricultural purposes; but does not
include vehicles required to be registered with the Motor Vehicle Division or vehicles or other
equipment used for business purposes other than farming.
(14) "Geothermal fluid" means water in any form at temperatures greater than 120
degrees centigrade naturally present in a geothermal system.
(15) "Geothermal resource" means:
(a) the natural heat of the earth at temperatures greater than 120 degrees centigrade;
and
(b) the energy, in whatever form, including pressure, present in, resulting from, created
by, or which may be extracted from that natural heat, directly or through a material medium.
(16) (a) "Goodwill" means:
(i) acquired goodwill that is reported as goodwill on the books and records:
(A) of a taxpayer; and
(B) that are maintained for financial reporting purposes; or
(ii) the ability of a business to:
(A) generate income:
(I) that exceeds a normal rate of return on assets; and
(II) resulting from a factor described in Subsection (16)(b); or
(B) obtain an economic or competitive advantage resulting from a factor described in
Subsection (16)(b).
(b) The following factors apply to Subsection (16)(a)(ii):
(i) superior management skills;
(ii) reputation;
(iii) customer relationships;
(iv) patronage; or
(v) a factor similar to Subsections (16)(b)(i) through (iv).
(c) "Goodwill" does not include:
(i) the intangible property described in Subsection (20)(a) or (b);
(ii) locational attributes of real property, including:
(A) zoning;
(B) location;
(C) view;
(D) a geographic feature;
(E) an easement;
(F) a covenant;
(G) proximity to raw materials;
(H) the condition of surrounding property; or
(I) proximity to markets;
(iii) value attributable to the identification of an improvement to real property,
including:
(A) reputation of the designer, builder, or architect of the improvement;
(B) a name given to, or associated with, the improvement; or
(C) the historic significance of an improvement; or
(iv) the enhancement or assemblage value specifically attributable to the interrelation
of the existing tangible property in place working together as a unit.
(17) "Governing body" means:
(a) for a county, city, or town, the legislative body of the county, city, or town;
(b) for a local district under Title 17B, Limited Purpose Local Government Entities -
Local Districts, the local district's board of trustees;
(c) for a school district, the local board of education; or
(d) for a special service district under Title 17D, Chapter 1, Special Service District
Act:
(i) the legislative body of the county or municipality that created the special service
district, to the extent that the county or municipal legislative body has not delegated authority
to an administrative control board established under Section 
17D-1-301
; or
(ii) the administrative control board, to the extent that the county or municipal
legislative body has delegated authority to an administrative control board established under
Section 
17D-1-301
.
(18) (a) For purposes of Section 
59-2-103
:
(i) "household" means the association of persons who live in the same dwelling,
sharing its furnishings, facilities, accommodations, and expenses; and
(ii) "household" includes married individuals, who are not legally separated, that have
established domiciles at separate locations within the state.
(b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may make rules defining the term "domicile."
(19) (a) Except as provided in Subsection (19)(c), "improvement" means a building,
structure, fixture, fence, or other item that is permanently attached to land, regardless of
whether the title has been acquired to the land, if:
(i) (A) attachment to land is essential to the operation or use of the item; and
(B) the manner of attachment to land suggests that the item will remain attached to the
land in the same place over the useful life of the item; or
(ii) removal of the item would:
(A) cause substantial damage to the item; or
(B) require substantial alteration or repair of a structure to which the item is attached.
(b) "Improvement" includes:
(i) an accessory to an item described in Subsection (19)(a) if the accessory is:
(A) essential to the operation of the item described in Subsection (19)(a); and
(B) installed solely to serve the operation of the item described in Subsection (19)(a);
and
(ii) an item described in Subsection (19)(a) that:
(A) is temporarily detached from the land for repairs; and
(B) remains located on the land.
(c) Notwithstanding Subsections (19)(a) and (b), "improvement" does not include:
(i) an item considered to be personal property pursuant to rules made in accordance
with Section 
59-2-107
;
(ii) a moveable item that is attached to land:
(A) for stability only; or
(B) for an obvious temporary purpose;
(iii) (A) manufacturing equipment and machinery; or
(B) essential accessories to manufacturing equipment and machinery;
(iv) an item attached to the land in a manner that facilitates removal without substantial
damage to:
(A) the land; or
(B) the item; or
(v) a transportable factory-built housing unit as defined in Section 
59-2-1502
 if that
transportable factory-built housing unit is considered to be personal property under Section
59-2-1503
.
(20) "Intangible property" means:
(a) property that is capable of private ownership separate from tangible property,
including:
(i) money;
(ii) credits;
(iii) bonds;
(iv) stocks;
(v) representative property;
(vi) franchises;
(vii) licenses;
(viii) trade names;
(ix) copyrights; and
(x) patents;
(b) a low-income housing tax credit;
(c) goodwill; or
(d) a renewable energy tax credit or incentive, including:
(i) a federal renewable energy production tax credit under Section 45, Internal Revenue
Code;
(ii) a federal energy credit for qualified renewable electricity production facilities under
Section 48, Internal Revenue Code;
(iii) a federal grant for a renewable energy property under American Recovery and
Reinvestment Act of 2009, Pub. L. No. 111-5, Section 1603; and
(iv) a tax credit under Subsection 
59-7-614
[
(2)(c)
]
(5)
.
(21) "Livestock" means:
(a) a domestic animal;
(b) a fur-bearing animal;
(c) a honeybee; or
(d) poultry.
(22) "Low-income housing tax credit" means:
(a) a federal low-income housing tax credit under Section 42, Internal Revenue Code;
or
(b) a low-income housing tax credit under:
(i) Section 
59-7-607
; or
(ii) Section 
59-10-1010
.
(23) "Metalliferous minerals" includes gold, silver, copper, lead, zinc, and uranium.
(24) "Mine" means a natural deposit of either metalliferous or nonmetalliferous
valuable mineral.
(25) "Mining" means the process of producing, extracting, leaching, evaporating, or
otherwise removing a mineral from a mine.
(26) (a) "Mobile flight equipment" means tangible personal property that is:
(i) owned or operated by an:
(A) air charter service;
(B) air contract service; or
(C) airline; and
(ii) (A) capable of flight;
(B) attached to an aircraft that is capable of flight; or
(C) contained in an aircraft that is capable of flight if the tangible personal property is
intended to be used:
(I) during multiple flights;
(II) during a takeoff, flight, or landing; and
(III) as a service provided by an air charter service, air contract service, or airline.
(b) (i) "Mobile flight equipment" does not include a spare part other than a spare
engine that is rotated:
(A) at regular intervals; and
(B) with an engine that is attached to the aircraft.
(ii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may make rules defining the term "regular intervals."
(27) "Nonmetalliferous minerals" includes, but is not limited to, oil, gas, coal, salts,
sand, rock, gravel, and all carboniferous materials.
(28) "Part-year residential property" means property that is not residential property on
January 1 of a calendar year but becomes residential property after January 1 of the calendar
year.
(29) "Personal property" includes:
(a) every class of property as defined in Subsection (30) that is the subject of
ownership and not included within the meaning of the terms "real estate" and "improvements";
(b) gas and water mains and pipes laid in roads, streets, or alleys;
(c) bridges and ferries;
(d) livestock; and
(e) outdoor advertising structures as defined in Section 
72-7-502
.
(30) (a) "Property" means property that is subject to assessment and taxation according
to its value.
(b) "Property" does not include intangible property as defined in this section.
(31) "Public utility," for purposes of this chapter, means the operating property of a
railroad, gas corporation, oil or gas transportation or pipeline company, coal slurry pipeline
company, electrical corporation, telephone corporation, sewerage corporation, or heat
corporation where the company performs the service for, or delivers the commodity to, the
public generally or companies serving the public generally, or in the case of a gas corporation
or an electrical corporation, where the gas or electricity is sold or furnished to any member or
consumers within the state for domestic, commercial, or industrial use. Public utility also
means the operating property of any entity or person defined under Section 
54-2-1
 except water
corporations.
(32) (a) Subject to Subsection (32)(b), "qualifying exempt primary residential rental
personal property" means household furnishings, furniture, and equipment that:
(i) are used exclusively within a dwelling unit that is the primary residence of a tenant;
(ii) are owned by the owner of the dwelling unit that is the primary residence of a
tenant; and
(iii) after applying the residential exemption described in Section 
59-2-103
, are exempt
from taxation under this chapter in accordance with Subsection 
59-2-1115
(2).
(b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may by rule define the term "dwelling unit" for purposes of this Subsection (32)
and Subsection (35).
(33) "Real estate" or "real property" includes:
(a) the possession of, claim to, ownership of, or right to the possession of land;
(b) all mines, minerals, and quarries in and under the land, all timber belonging to
individuals or corporations growing or being on the lands of this state or the United States, and
all rights and privileges appertaining to these; and
(c) improvements.
(34) "Relationship with an owner of the property's land surface rights" means a
relationship described in Subsection 267(b), Internal Revenue Code:
(a) except that notwithstanding Subsection 267(b), Internal Revenue Code, the term
25% shall be substituted for the term 50% in Subsection 267(b), Internal Revenue Code; and
(b) using the ownership rules of Subsection 267(c), Internal Revenue Code, for
determining the ownership of stock.
(35) (a) Subject to Subsection (35)(b), "residential property," for the purposes of the
reductions and adjustments under this chapter, means any property used for residential
purposes as a primary residence.
(b) Subject to Subsection (35)(c), "residential property":
(i) except as provided in Subsection (35)(b)(ii), includes household furnishings,
furniture, and equipment if the household furnishings, furniture, and equipment are:
(A) used exclusively within a dwelling unit that is the primary residence of a tenant;
and
(B) owned by the owner of the dwelling unit that is the primary residence of a tenant;
and
(ii) does not include property used for transient residential use.
(c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may by rule define the term "dwelling unit" for purposes of Subsection (32) and
this Subsection (35).
(36) "Split estate mineral rights owner" means a person who:
(a) has a legal right to extract a mineral from property;
(b) does not hold more than a 25% interest in:
(i) the land surface rights of the property where the wellhead is located; or
(ii) an entity with an ownership interest in the land surface rights of the property where
the wellhead is located;
(c) is not an entity in which the owner of the land surface rights of the property where
the wellhead is located holds more than a 25% interest; and
(d) does not have a relationship with an owner of the land surface rights of the property
where the wellhead is located.
(37) (a) "State-assessed commercial vehicle" means:
(i) any commercial vehicle, trailer, or semitrailer which operates interstate or intrastate
to transport passengers, freight, merchandise, or other property for hire; or
(ii) any commercial vehicle, trailer, or semitrailer which operates interstate and
transports the vehicle owner's goods or property in furtherance of the owner's commercial
enterprise.
(b) "State-assessed commercial vehicle" does not include vehicles used for hire which
are specified in Subsection (8)(c) as county-assessed commercial vehicles.
(38) "Taxable value" means fair market value less any applicable reduction allowed for
residential property under Section 
59-2-103
.
(39) "Tax area" means a geographic area created by the overlapping boundaries of one
or more taxing entities.
(40) "Taxing entity" means any county, city, town, school district, special taxing
district, local district under Title 17B, Limited Purpose Local Government Entities - Local
Districts, or other political subdivision of the state with the authority to levy a tax on property.
(41) "Tax roll" means a permanent record of the taxes charged on property, as extended
on the assessment roll and may be maintained on the same record or records as the assessment
roll or may be maintained on a separate record properly indexed to the assessment roll. It
includes tax books, tax lists, and other similar materials.
Section 2. Section 
59-7-614
 is amended to read:
59-7-614.
Renewable energy systems tax credits -- Definitions -- Certification --
Rulemaking authority -- Revenue and Taxation Interim Committee study.
(1) As used in this section:
(a) 
(i)
 "Active solar system"[
: (i)
] means a system of equipment 
that is
 capable of
:
(A)
 collecting and converting incident solar radiation into thermal, mechanical, or
electrical energy[
,
]
;
 and
(B)
 transferring [
these forms
] 
a form
 of energy 
described in Subsection (1)(a)(i)(A)
 by
a separate apparatus to storage or to the point of use[
; and
]
.
(ii) 
"Active solar system"
 includes water heating, space heating or cooling, and
electrical or mechanical energy generation.
(b) "Biomass system" means [
any
] 
a
 system of apparatus and equipment for use in
:
(i)
 converting material into biomass energy, as defined in Section 
59-12-102
[
,
]
;
 and
(ii)
 transporting [
that
] 
the biomass
 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)
] 
(c)
 "Commercial energy system" means [
any active solar, passive solar,
geothermal electricity, direct-use geothermal, geothermal heat-pump system, wind,
hydroenergy, or biomass system used
] 
a system that is:
(i) (A) an active solar system;
(B) a biomass system;
(C) a direct use geothermal system;
(D) a geothermal electricity system;
(E) a geothermal heat pump system;
(F) a hydroenergy system;
(G) a passive solar system; or
(H) a wind system;
(ii) located in the state; and
(iii) used:
(A)
 to supply energy to a commercial unit
;
 or
(B)
 as a commercial enterprise.
[
(e)
] 
(d)
 "Commercial enterprise" means [
a business
] 
an
 entity [
whose
]
, the
 purpose 
of
which
 is to produce electrical, mechanical, or thermal energy for sale from a commercial
energy system.
[
(f)
] 
(e)
 (i) "Commercial unit" means [
any
] 
a
 building or structure that [
a business
] 
an
entity uses to transact [
its
] business.
(ii) Notwithstanding Subsection (1)[
(f)
]
(e)
(i):
(A) [
in the case of
] 
with respect to
 an active solar system used for agricultural water
pumping or a wind system, each individual energy generating device [
shall
] 
is considered to
 be
a commercial unit; [
and
] 
or
(B) if an energy system is the building or structure that [
a business
] 
an
 entity uses to
transact [
its
] business, a commercial unit is the complete energy system itself.
[
(g)
] 
(f)
 "Direct use geothermal system" means a system of apparatus and equipment
[
enabling
] 
that enables
 the direct use of [
thermal
] 
geothermal
 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)
] 
(g)
 "Geothermal electricity" means energy 
that is:
(i)
 contained in heat that continuously flows outward from the earth [
that is
]
; and
(ii)
 used as a sole source of energy to produce electricity.
(h) "Geothermal energy" means energy generated by heat that is contained in the earth.
(i) "Geothermal heat pump system" means a system of apparatus and equipment
[
enabling
] 
that:
(i) enables
 the use of thermal properties contained in the earth at temperatures well
below 100 degrees Fahrenheit [
to help
]
; and
(ii) helps
 meet heating and cooling needs of a structure.
(j) "Hydroenergy system" means a system of apparatus and equipment 
that is
 capable
of
:
(i)
 intercepting and converting kinetic water energy into electrical or mechanical
energy
;
 and
(ii)
 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)
] 
(k)
 "Office" means the Office of Energy Development created in Section
63M-4-401
.
[
(m)
] 
(l) (i)
 "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) 
"Passive solar system"
 includes those portions and components of a building that
are expressly designed and required for the collection, storage, and distribution of solar energy.
(m) (i) "Principal recovery portion" means the portion of a lease payment that
constitutes the cost a person incurs in acquiring a commercial energy system.
(ii) "Principal recovery portion" does not include:
(A) an interest charge; or
(B) a maintenance expense.
(n) "Residential energy system" means [
any active solar, passive solar, biomass,
direct-use geothermal, geothermal heat-pump system, wind, or hydroenergy system
] 
the
following
 used to supply energy to or for [
any
] 
a
 residential unit[
.
]
:
(i) an active solar system;
(ii) a biomass system;
(iii) a direct use geothermal system;
(iv) a geothermal heat pump system;
(v) a hydroenergy system;
(vi) a passive solar system; or
(vii) a wind system.
(o) 
(i)
 "Residential unit" means [
any
] 
a
 house, condominium, apartment, or similar
dwelling unit that
:
(A) is located in the state; and
(B)
 serves as a dwelling for a person, group of persons, or a family [
but
]
.
(ii) "Residential unit"
 does not include property subject to a fee under:
[
(i)
] 
(A)
 Section 
59-2-404
;
[
(ii)
] 
(B)
 Section 
59-2-405
;
[
(iii)
] 
(C)
 Section 
59-2-405.1
;
[
(iv)
] 
(D)
 Section 
59-2-405.2
; or
[
(v)
] 
(E)
 Section 
59-2-405.3
.
(p) "Wind system" means a system of apparatus and equipment 
that is
 capable of
:
(i)
 intercepting and converting wind energy into mechanical or electrical energy
;
 and
(ii)
 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).
]
(2) A taxpayer may claim an energy system tax credit as provided in this section
against a tax due under this chapter for a taxable year.
(3) (a) Subject to the other provisions of this Subsection (3), a taxpayer may claim a
nonrefundable tax credit under this Subsection (3) with respect to a residential unit the taxpayer
owns or uses if:
(i) the taxpayer:
(A) purchases and completes a residential energy system to supply all or part of the
energy required for the residential unit; or
(B) participates in the financing of a residential energy system to supply all or part of
the energy required for the residential unit;
(ii) the residential energy system is completed and placed in service on or after January
1, 2007; and
(iii) the taxpayer obtains a written certification from the office in accordance with
Subsection (7).
[
(ii) (A) The
] 
(b) (i) Subject to Subsections (3)(b)(ii) through (v), 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
] 
taxpayer
 owns or uses[
, including
]
.
(ii) A tax credit under this Subsection (3) may include
 installation costs[
, against any
tax due under this chapter
]
.
(iii) A taxpayer may claim a tax credit under this Subsection (3)
 for the taxable year in
which the 
residential
 energy system is completed and placed in service.
(iv) If the amount of a tax credit under this Subsection (3) exceeds a taxpayer'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.
[
(B)
] 
(v)
 The total amount of [
each
] tax credit 
a taxpayer may claim
 under this
Subsection [
(2)(a)
] 
(3)
 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)
] 
(c)
 If a [
business entity
] 
taxpayer
 sells a residential unit to [
an individual
taxpayer
] 
another person
 before [
making a claim for
] 
the taxpayer claims
 the tax credit under
this Subsection [
(2)(a)
] 
(3)
[
, the business entity may
]:
[
(A)
] 
(i) the taxpayer may
 assign [
its right to this
] 
the
 tax credit to the [
individual
taxpayer
] 
other person
; and
[
(B)
] 
(ii) (A)
 [
if the business entity assigns its right to the tax credit to an individual
taxpayer under Subsection (2)(a)(iii)(A), the individual taxpayer
] 
if the other person files a
return under this chapter, the other person
 may claim the tax credit 
under this section
 as if the
[
individual taxpayer had completed or participated in the costs of the residential energy system
under Section 
59-10-1014
.
] 
other person had met the requirements of this section to claim the
tax credit; or
(B) if the other person files a return under Chapter 10, Individual Income Tax Act, the
other person may claim the tax credit under Section 
59-10-1014
 as if the other person had met
the requirements of Section 
59-10-1014
 to claim the tax credit.
[
(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:
]
(4) (a) Subject to the other provisions of this Subsection (4), a taxpayer may claim a
refundable tax credit under this Subsection (4) with respect to a commercial energy system if:
(i) the commercial energy system does not use:
(A) wind, geothermal electricity, solar, or biomass equipment capable of producing a
total of 660 or more kilowatts of electricity; or
(B) solar equipment capable of producing 2,000 or more kilowatts of electricity;
(ii) the taxpayer purchases or participates in the financing of the commercial energy
system;
(iii)
 (A) the commercial energy system supplies all or part of the energy required by
commercial units owned or used by the [
business entity
] 
taxpayer
; or
(B) the [
business entity
] 
taxpayer
 sells all or part of the energy produced by the
commercial energy system as a commercial enterprise[
.
]
;
(iv) the commercial energy system is completed and placed in service on or after
January 1, 2007; and
(v) the taxpayer obtains a written certification from the office in accordance with
Subsection (7).
[
(ii) (A) A business entity is entitled to a
] 
(b) (i) Subject to Subsections (4)(b)(ii)
through (v), the
 tax credit [
of up
] 
is equal
 to 10% of the reasonable costs of [
any
] 
the
commercial energy system [
installed, including
]
.
(ii) A tax credit under this Subsection (4) may include
 installation costs[
, against any
tax due under this chapter
]
.
(iii) A taxpayer may claim a tax credit under this Subsection (4)
 for the taxable year in
which the commercial energy system is completed and placed in service.
(iv) A tax credit under this Subsection (4) may not be carried forward or carried back.
[
(B) Notwithstanding Subsection (2)(b)(ii)(A), the
]
(v) The
 total amount of [
the
] tax credit 
a taxpayer may claim
 under this Subsection
[
(2)(b)
] 
(4)
 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)
] 
(c) (i)
 [
A business entity that leases
] 
Subject to Subsections (4)(c)(ii) and (iii), a
taxpayer that is a lessee of
 a commercial energy system installed on a commercial unit [
is
eligible for the
] 
may claim a
 tax credit under this Subsection [
(2)(b)
] 
(4)
 if the [
lessee can
confirm
] 
taxpayer confirms
 that the lessor irrevocably elects not to claim the tax credit.
[
(iv) Only
] 
(ii) A taxpayer described in Subsection (4)(c)(i) may claim as a tax credit
under this Subsection (4) 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
]
(iii) A taxpayer described in Subsection (4)(c)(i) may claim a
 tax credit under this
Subsection [
(2)(b)
] 
(4)
 for a period [
no greater than
] 
that does not exceed
 seven 
taxable
 years
[
from the initiation of the lease
] 
after the date the lease begins, as stated in the lease agreement
.
[
(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:
]
(5) (a) Subject to the other provisions of this Subsection (5), a taxpayer may claim a
refundable tax credit under this Subsection (5) with respect to a commercial energy system if:
(i) the commercial energy system uses wind, geothermal electricity, or biomass
equipment capable of producing a total of 660 or more kilowatts of electricity;
(ii)
 (A) the commercial energy system supplies all or part of the energy required by
commercial units owned or used by the [
business entity
] 
taxpayer
; or
(B) the [
business entity
] 
taxpayer
 sells all or part of the energy produced by the
commercial energy system as a commercial enterprise[
.
]
;
(iii) the commercial energy system is completed and placed in service on or after
January 1, 2007; and
(iv) the taxpayer obtains a written certification from the office in accordance with
Subsection (7).
[
(ii) (A) A business entity may claim
]
(b) (i) Subject to Subsections (5)(b)(ii) and (iii),
 a tax credit under this [
section
]
Subsection (5) is
 equal to the product of:
[
(I)
] 
(A)
 0.35 cents; and
[
(II)
] 
(B)
 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)
]
(ii) A tax credit under this Subsection (5)
 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
]
(iii) A tax credit under this Subsection (5)
 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
]
(c) A taxpayer that is a lessee of
 a commercial energy system installed on a commercial
unit [
is eligible for the
] 
may claim a
 tax credit under this Subsection [
(2)(c)
] 
(5)
 if the [
lessee
can confirm
] 
taxpayer confirms
 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
]
(6) (a) Subject to the other provisions of this Subsection (6), a taxpayer
 may claim a
refundable tax credit as provided in this Subsection [
(3)
] 
(6)
 if:
(i) the taxpayer owns a commercial energy system that uses solar equipment capable of
producing a total of 660 or more kilowatts of electricity;
[
(i)
] 
(ii)
 (A) the commercial energy system supplies all or part of the energy required
by commercial units owned or used by the [
business entity
] 
taxpayer
; or
(B) the [
business entity
] 
taxpayer
 sells all or part of the energy produced by the
commercial energy system as a commercial enterprise; [
and
]
[
(ii)
] 
(iii)
 the [
business entity
] 
taxpayer
 does not claim a tax credit under Subsection
[
(2)(b).
] 
(4);
(iv) the commercial energy system is completed and placed in service on or after
January 1, 2015; and
(v) the taxpayer obtains a written certification from the office in accordance with
Subsection (7).
(b) [
A business entity may claim
] 
(i) Subject to Subsections (6)(b)(ii) and (iii),
 a tax
credit under this [
section
] 
Subsection (6) is
 equal to the product of:
[
(i)
] 
(A)
 0.35 cents; and
[
(ii)
] 
(B)
 the kilowatt hours of electricity produced and [
either
] used or sold during the
taxable year.
[
(c) The
] 
(ii) A
 tax credit under this Subsection [
(3)
] 
(6)
 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
] 
(iii) A
 tax credit under this Subsection [
(3)
] 
(6)
 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)
] 
(c)
 A [
business entity that leases
] 
taxpayer that is a lessee of
 a commercial energy
system installed on a commercial unit may claim a tax credit under this Subsection [
(3)
] 
(6)
 if
the [
business entity that is the lessee can confirm
] 
taxpayer confirms
 that the lessor irrevocably
elects not to claim the tax credit.
[
(4) (a) Except as provided in Subsection (4)(b), the tax credits provided for under
Subsection (2) or (3) are
]
(7) (a) Before a taxpayer may claim a tax credit under this section, the taxpayer shall
obtain a written certification from the office.
(b) The office shall issue a taxpayer a written certification if the office determines that:
(i) the taxpayer meets the requirements of this section to receive a tax credit; and
(ii) the residential energy system or commercial energy system with respect to which
the taxpayer seeks to claim a tax credit:
(A) has been completely installed;
(B) is a viable system for saving or producing energy from renewable resources; and
(C) is safe, reliable, efficient, and technically feasible to ensure that the residential
energy system or commercial energy system uses the state's renewable and nonrenewable
energy resources in an appropriate and economic manner.
(c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
office may make rules:
(i) for determining whether a residential energy system or commercial energy system
meets the requirements of Subsection (7)(b)(ii); and
(ii) for purposes of a tax credit under Subsection (3) or (4), establishing the reasonable
costs of a residential energy system or a commercial energy system, as an amount per unit of
energy production.
(d) A taxpayer that obtains a written certification from the office shall retain the
certification for the same time period a person is required to keep books and records under
Section 
59-1-1406
.
(8) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may make rules to address the certification of a tax credit under this section.
(9) A tax credit under this section is
 in addition to any tax credits provided under the
laws or rules and regulations of the United States.
[
(b)
] 
(10)
 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) (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) 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)
] 
(11)
 (a) On or before October 1, [
] 
, and every five years [
thereafter
]
after 2017
, 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)
]
(11)
(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 3. Section 
59-10-1014
 is amended to read:
59-10-1014.
Nonrefundable renewable energy systems tax credits -- Definitions --
Certification -- Rulemaking authority -- Revenue and Taxation Interim Committee study.
(1) As used in this [
part
] 
section
:
(a) 
(i)
 "Active solar system"[
: (i)
] means a system of equipment 
that is
 capable of
:
(A)
 collecting and converting incident solar radiation into thermal, mechanical, or
electrical energy[
,
]
;
 and
(B)
 transferring [
these forms
] 
a form
 of energy 
described in Subsection (1)(a)(i)(A)
 by
a separate apparatus to storage or to the point of use[
; and
]
.
(ii) 
"Active solar system"
 includes water heating, space heating or cooling, and
electrical or mechanical energy generation.
(b) "Biomass system" means [
any
] 
a
 system of apparatus and equipment for use in
:
(i)
 converting material into biomass energy, as defined in Section 
59-12-102
[
,
]
;
 and
(ii)
 transporting [
that
] 
the biomass
 energy by separate apparatus to the point of use or
storage.
[
(c) "Business entity" means any entity under which business is conducted or
transacted.
]
[
(d)
] 
(c)
 "Direct use geothermal system" means a system of apparatus and equipment
[
enabling
] 
that enables
 the direct use of [
thermal
] 
geothermal
 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.
[
(e)
] 
(d)
 "Geothermal electricity" means energy 
that is:
(i)
 contained in heat that continuously flows outward from the earth [
that is
]
; and
(ii)
 used as a sole source of energy to produce electricity.
(e) "Geothermal energy" means energy generated by heat that is contained in the earth.
(f) "Geothermal heat pump system" means a system of apparatus and equipment
[
enabling
] 
that:
(i) enables
 the use of thermal properties contained in the earth at temperatures well
below 100 degrees Fahrenheit [
to help
]
; and
(ii) helps
 meet heating and cooling needs of a structure.
(g) "Hydroenergy system" means a system of apparatus and equipment 
that is
 capable
of
:
(i)
 intercepting and converting kinetic water energy into electrical or mechanical
energy
;
 and
(ii)
 transferring this form of energy by separate apparatus to the point of use or storage.
(h) "Office" means the Office of Energy Development created in Section 
63M-4-401
.
(i) 
(i)
 "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) 
"Passive solar system"
 includes those portions and components of a building that
are expressly designed and required for the collection, storage, and distribution of solar energy.
(j) (i) "Principal recovery portion" means the portion of a lease payment that
constitutes the cost a person incurs in acquiring a residential energy system.
(ii) "Principal recovery portion" does not include:
(A) an interest charge; or
(B) a maintenance expense.
[
(j)
] 
(k)
 "Residential energy system" means [
any active solar, passive solar, biomass,
direct-use geothermal, geothermal heat-pump system, wind, or hydroenergy system
] 
the
following
 used to supply energy to or for [
any
] 
a
 residential unit[
.
]
:
(i) an active solar system;
(ii) a biomass system;
(iii) a direct use geothermal system;
(iv) a geothermal heat pump system;
(v) a hydroenergy system;
(vi) a passive solar system; or
(vii) a wind system.
[
(k)
] 
(l) (i)
 "Residential unit" means [
any
] 
a
 house, condominium, apartment, or similar
dwelling unit that
:
(A) is located in the state; and
(B)
 serves as a dwelling for a person, group of persons, or a family [
but
]
.
(ii) "Residential unit"
 does not include property subject to a fee under:
[
(i)
] 
(A)
 Section 
59-2-404
;
[
(ii)
] 
(B)
 Section 
59-2-405
;
[
(iii)
] 
(C)
 Section 
59-2-405.1
;
[
(iv)
] 
(D)
 Section 
59-2-405.2
; or
[
(v)
] 
(E)
 Section 
59-2-405.3
.
[
(l)
] 
(m)
 "Wind system" means a system of apparatus and equipment 
that is
 capable of
:
(i)
 intercepting and converting wind energy into mechanical or electrical energy
;
 and
(ii)
 transferring these forms of energy by a separate apparatus to the point of use or
storage.
[
(2) For taxable years beginning on or after January 1, 2007, a claimant, estate, or trust
may claim a nonrefundable tax credit as provided in this section if:
]
[
(a) a claimant, estate, or trust that is not a business entity purchases and completes or
participates in the financing of a residential energy system to supply all or part of the energy for
the claimant's, estate's, or trust's residential unit in the state; or
]
[
(b) (i) a claimant, estate, or trust that is a business entity sells a residential unit to
another claimant, estate, or trust that is not a business entity before making a claim for a tax
credit under Subsection (6) or Section 
59-7-614
; and
]
[
(ii) the claimant, estate, or trust that is a business entity assigns its right to the tax
credit to the claimant, estate, or trust that is not a business entity as provided in Subsection
(6)(c) or Subsection 
59-7-614
(2)(a)(iii).
]
(2) A claimant, estate, or trust may claim an energy system tax credit as provided in
this section against a tax due under this chapter for a taxable year.
(3) (a) Subject to the other provisions of this Subsection (3), a claimant, estate, or trust
may claim a nonrefundable tax credit under this Subsection (3) with respect to a residential unit
the claimant, estate, or trust owns or uses if:
(i) the claimant, estate, or trust:
(A) purchases and completes a residential energy system to supply all or part of the
energy required for the residential unit; or
(B) participates in the financing of a residential energy system to supply all or part of
the energy required for the residential unit;
(ii) the residential energy system is completed and placed in service on or after January
1, 2007; and
(iii) the claimant, estate, or trust obtains a written certification from the office in
accordance with Subsection (4).
[
(3) (a) The
] 
(b) (i) Subject to Subsections (3)(b)(ii) through (vi), the
 tax credit
[
described in Subsection (2)
] is equal to 25% of the reasonable costs of each residential energy
system[
, including installation costs, against any income tax liability of the claimant, estate, or
trust under this chapter for the taxable year in which the residential energy system is completed
and placed in service
] 
installed with respect to each residential unit the claimant, estate, or trust
owns or uses
.
[
(b) The total amount of each tax credit under this section may not exceed $2,000 per
residential unit.
]
[
(c) The tax credit under this section is allowed for any residential energy system
completed and placed in service on or after January 1, 2007.
]
[
(4) (a) The tax credit provided for in this section shall be claimed in the return for the
taxable year in which the residential energy system is completed and placed in service.
]
(ii) A tax credit under this Subsection (3) may include installation costs.
(iii) A claimant, estate, or trust may claim a tax credit under this Subsection (3) for the
taxable year in which the residential energy system is completed and placed in service.
(iv) If the amount of a tax credit under this Subsection (3) exceeds a claimant's,
estate's, or trust'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.
(v) The total amount of tax credit a claimant, estate, or trust may claim under this
Subsection (3) may not exceed $2,000 per residential unit.
[
(b) Additional
] 
(vi) A claimant, estate, or trust may claim a tax credit with respect to
additional
 residential energy systems or parts of residential energy systems [
may be similarly
claimed in returns
] for 
a
 subsequent taxable [
years as long as
] 
year if
 the total amount
[
claimed
] 
of tax credit the claimant, estate, or trust claims
 does not exceed $2,000 per
residential unit.
[
(c) If the amount of the tax credit under this section exceeds the income tax liability of
the claimant, estate, or trust claiming the tax credit under this section for that taxable year, then
the amount not used may be carried over for a period that does not exceed the next four taxable
years.
]
[
(5) (a) A
] 
(c) (i) Subject to Subsections (3)(c)(ii) and (iii), a
 claimant, estate, or trust
[
that is not a business entity
] that leases a residential energy system installed on a residential
unit [
is eligible for the residential energy
] 
may claim a
 tax credit 
under this Subsection (3)
 if
[
that
] 
the
 claimant, estate, or trust confirms that the lessor irrevocably elects not to claim the
tax credit.
[
(b) Only
] 
(ii) A claimant, estate, or trust described in Subsection (3)(c)(i) that leases a
residential energy system may claim as a tax credit under this Subsection (3) only
 the principal
recovery portion of the lease payments[
, which is the cost incurred by the claimant, estate, or
trust in acquiring the residential energy system excluding interest charges and maintenance
expenses, is eligible for the tax credits
].
[
(c)
] 
(iii)
 A claimant, estate, or trust described in [
this
] Subsection [
(5)
] 
(3)(c)(i) that
leases a residential energy system
 may [
use the tax credits
] 
claim a tax credit under this
Subsection (3)
 for a period that does not exceed seven 
taxable
 years [
from the initiation of the
lease.
] 
after the date the lease begins, as stated in the lease agreement.
(d) If a claimant, estate, or trust sells a residential unit to another person before the
claimant, estate, or trust claims the tax credit under this Subsection (3):
(i) the claimant, estate, or trust may assign the tax credit to the other person; and
(ii) (A) if the other person files a return under Chapter 7, Corporate Franchise and
Income Taxes, the other person may claim the tax credit as if the other person had met the
requirements of Section 
59-7-614
 to claim the tax credit; or
(B) if the other person files a return under this chapter, the other person may claim the
tax credit under this section as if the other person had met the requirements of this section to
claim the tax credit.
[
(6) (a) A claimant, estate, or trust that is 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 claimant, estate, or trust that is a
business entity and situated in Utah is entitled to a nonrefundable tax credit as provided in this
Subsection (6).
]
[
(b) (i) For taxable years beginning on or after January 1, 2007, a claimant, estate, or
trust that is a business entity is entitled to a nonrefundable tax credit equal to 25% of the
reasonable costs of a residential energy system installed with respect to each residential unit it
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.
]
[
(ii) The total amount of the tax credit under this Subsection (6) may not exceed $2,000
per residential unit.
]
[
(iii) The tax credit under this Subsection (6) is allowed for any residential energy
system completed and placed in service on or after January 1, 2007.
]
[
(c) If a claimant, estate, or trust that is a business entity sells a residential unit to a
claimant, estate, or trust that is not a business entity before making a claim for the tax credit
under this Subsection (6), the claimant, estate, or trust that is a business entity may:
]
[
(i) assign its right to this tax credit to the claimant, estate, or trust that is not a business
entity; and
]
[
(ii) if the claimant, estate, or trust that is a business entity assigns its right to the tax
credit to a claimant, estate, or trust that is not a business entity under Subsection (6)(c)(i), the
claimant, estate, or trust that is not a business entity may claim the tax credit as if that claimant,
estate, or trust that is not a business entity had completed or participated in the costs of the
residential energy system under this section.
]
[
(7) (a) A tax credit under this section may be claimed for the taxable year in which the
residential energy system is completed and placed in service.
]
[
(b) Additional residential energy systems or parts of residential energy systems may be
claimed for subsequent years.
]
[
(c) If the amount of a tax credit under this section exceeds the tax liability of the
claimant, estate, or trust claiming the tax credit under this section for a taxable year, the amount
of the tax credit exceeding the tax liability may be carried over for a period which does not
exceed the next four taxable years.
]
[
(8) (a) Except as provided in Subsection (8)(b), tax credits provided for under this
section are
]
(4) (a) Before a claimant, estate, or trust may claim a tax credit under this section, the
claimant, estate, or trust shall obtain a written certification from the office.
(b) The office shall issue a claimant, estate, or trust a written certification if the office
determines that:
(i) the claimant, estate, or trust meets the requirements of this section to receive a tax
credit; and
(ii) the office determines that the residential energy system with respect to which the
claimant, estate, or trust seeks to claim a tax credit:
(A) has been completely installed;
(B) is a viable system for saving or producing energy from renewable resources; and
(C) is safe, reliable, efficient, and technically feasible to ensure that the residential
energy system uses the state's renewable and nonrenewable energy resources in an appropriate
and economic manner.
(c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
office may make rules:
(i) for determining whether a residential energy system meets the requirements of
Subsection (4)(b)(ii); and
(ii) for purposes of a tax credit under Subsection (3), establishing the reasonable costs
of a residential energy system, as an amount per unit of energy production.
(d) A claimant, estate, or trust that obtains a written certification from the office shall
retain the certification for the same time period a person is required to keep books and records
under Section 
59-1-1406
.
(5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may make rules to address the certification of a tax credit under this section.
(6) A tax credit under this section is
 in addition to any tax credits provided under the
laws or rules and regulations of the United States.
[
(b)
] 
(7)
 A purchaser of one or more solar units that claims a tax credit under Section
59-10-1024
 for the purchase of the one or more solar units may not claim a tax credit under this
section for that purchase.
[
(9) (a) The office may set standards for residential energy systems 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.
]
[
(b) The office may set standards for residential and commercial energy systems that
establish the reasonable costs of an energy system, as used in Subsections (3)(a) and (6)(b)(i),
as an amount per unit of energy production.
]
[
(c) A tax credit may not be taken under this section 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.
]
[
(10) 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.
]
[
(11)
] 
(8)
 (a) On or before October 1, [
] 
, and every five years [
thereafter
]
after 2017
, 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 [
(11)
]
(8)
(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 4. Section 
59-10-1106
 is amended to read:
59-10-1106.
Refundable renewable energy systems tax credits -- Definitions --
Certification -- Rulemaking authority -- Revenue and Taxation Interim Committee study.
(1) As used in this section:
(a) "Active solar system" [
is
] 
has the same meaning
 as defined in Section 
59-10-1014
.
(b) "Biomass system" [
is
] 
has the same meaning
 as defined in Section 
59-10-1014
.
[
(c) "Business entity" is as defined in Section 
59-10-1014
.
]
[
(d)
] 
(c)
 "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
] 
has the same meaning as defined in Section 
59-7-614
.
[
(e)
] 
(d)
 "Commercial enterprise" [
means a business entity that:
] 
has the same meaning
as defined in Section 
59-7-614.
[
(i) is a claimant, estate, or trust; and
]
[
(ii) has the purpose of producing electrical, mechanical, or thermal energy for sale
from a commercial energy system.
]
[
(f)
] 
(e)
 (i) "Commercial unit" [
means any building or structure that a business entity
that is a claimant, estate, or trust uses to transact its business
] 
has the same meaning as defined
in Section 
59-7-614
.
(ii) Notwithstanding Subsection (1)[
(f)
]
(e)
(i):
(A) [
in the case of
] 
with respect to
 an active solar system used for agricultural water
pumping or a wind system, each individual energy generating device [
shall
] 
is considered to
 be
a commercial unit; [
and
] 
or
(B) if an energy system is the building or structure that [
a business entity that is
] a
claimant, estate, or trust uses to transact [
its
] business, a commercial unit is the complete
energy system itself.
[
(g)
] 
(f)
 "Direct use geothermal system" [
is
] 
has the same meaning
 as defined in
Section 
59-10-1014
.
[
(h)
] 
(g)
 "Geothermal electricity" [
is
] 
has the same meaning
 as defined in Section
59-10-1014
.
(h) "Geothermal energy" has the same meaning as defined in Section 
59-10-1014
.
(i) "Geothermal heat pump system" [
is
] 
has the same meaning
 as defined in Section
59-10-1014
.
(j) "Hydroenergy system" [
is
] 
has the same meaning
 as defined in Section 
59-10-1014
.
(k) "Office" means the Office of Energy Development created in Section 
63M-4-401
.
(l) "Passive solar system" [
is
] 
has the same meaning
 as defined in Section 
59-10-1014
.
(m) "Principal recovery portion" has the same meaning as defined in Section
59-10-1014
.
[
(m)
] 
(n)
 "Wind system" [
is
] 
has the same meaning
 as defined in Section 
59-10-1014
.
[
(2) (a) (i) A business entity that is a claimant, estate, or trust that purchases or
participates in the financing of a commercial energy system situated in Utah is entitled to a
refundable tax credit as provided in this Subsection (2)(a) if the commercial energy system
does not use wind, geothermal electricity, or biomass equipment capable of producing a total of
or more kilowatts of electricity and:
]
(2) A claimant, estate, or trust may claim an energy system tax credit as provided in
this section against a tax due under this chapter for a taxable year.
(3) (a) Subject to the other provisions of this Subsection (3), a claimant, estate, or trust
may claim a refundable tax credit under this Subsection (3) with respect to a commercial
energy system if:
(i) the commercial energy system does not use:
(A) wind, geothermal electricity, solar, or biomass equipment capable of producing a
total of 660 or more kilowatts of electricity; or
(B) solar equipment capable of producing 2,000 or more kilowatts of electricity;
(ii) the claimant, estate, or trust purchases or participates in the financing of the
commercial energy system;
(iii)
 (A) the commercial energy system supplies all or part of the energy required by
commercial units owned or used by the [
business entity that is a
] claimant, estate, or trust; or
(B) the [
business entity that is a
] claimant, estate, or trust sells all or part of the energy
produced by the commercial energy system as a commercial enterprise[
.
]
;
(iv) the commercial energy system is completed and placed in service on or after
January 1, 2007; and
(v) the claimant, estate, or trust obtains a written certification from the office in
accordance with Subsection (6).
[
(ii) (A) A business entity that is a claimant, estate, or trust is entitled to a
] 
(b) (i) 
Subject to Subsections (3)(b)(ii) through (v), the
 tax credit [
of up
] 
is equal
 to 10% of the
reasonable costs of [
any
] 
the
 commercial energy system [
installed, including
]
.
(ii) A tax credit under this Subsection (3) may include
 installation costs[
, against any
tax due under this chapter
]
.
(iii) A claimant, estate, or trust may claim a tax credit under this Subsection (3)
 for the
taxable year in which the commercial energy system is completed and placed in service.
(iv) A tax credit under this Subsection (3) may not be carried forward or carried back.
[
(B) Notwithstanding Subsection (2)(a)(ii)(A), the
]
(v) The
 total amount of [
the
] 
tax
 credit 
a claimant, estate, or trust may claim
 under this
Subsection [
(2)(a)
] 
(3)
 may not exceed $50,000 per commercial unit.
[
(C) The credit under this Subsection (2)(a) is allowed for any commercial energy
system completed and placed in service on or after January 1, 2007.
]
[
(iii)
] 
(c) (i)
 [
A business entity that is a claimant, estate, or trust that leases
] 
Subject to
Subsections (3)(c)(ii) and (iii), a claimant, estate, or trust that is a lessee of
 a commercial
energy system installed on a commercial unit [
is eligible for the
] 
may claim a
 tax credit under
this Subsection [
(2)(a)
] 
(3)
 if the [
lessee can confirm
] 
claimant, estate, or trust confirms
 that the
lessor irrevocably elects not to claim the 
tax
 credit.
[
(iv) Only
] 
(ii) A claimant, estate, or trust described in Subsection (3)(c)(i) may claim
as a tax credit under this Subsection (3) only
 the principal recovery portion of the lease
payments[
, which is the cost incurred by a business entity that is a claimant, estate, or trust in
acquiring a commercial energy system, excluding interest charges and maintenance expenses,
is eligible for the tax credit under this Subsection (2)(a)
].
[
(v) A business entity that is a claimant, estate, or trust that leases a commercial energy
system is eligible to use the
]
(iii) A claimant, estate, or trust described in Subsection (3)(c)(i) may claim a
 tax credit
under this Subsection [
(2)(a)
] 
(3)
 for a period [
no greater than
] 
that does not exceed
 seven
taxable
 years [
from the initiation of the lease
] 
after the date the lease begins, as stated in the
lease agreement
.
[
(b) (i) A business entity that is a claimant, estate, or trust that owns a commercial
energy system situated in Utah using wind, geothermal electricity, or biomass equipment
capable of producing a total of 660 or more kilowatts of electricity is entitled to a refundable
tax credit as provided in this section if:
]
(4) (a) Subject to the other provisions of this Subsection (4), a claimant, estate, or trust
may claim a refundable tax credit under this Subsection (4) with respect to a commercial
energy system if:
(i) the commercial energy system uses wind, geothermal electricity, or biomass
equipment capable of producing a total of 660 or more kilowatts of electricity;
(ii)
 (A) the commercial energy system supplies all or part of the energy required by
commercial units owned or used by the [
business entity that is a
] claimant, estate, or trust; or
(B) the [
business entity that is a
] claimant, estate, or trust sells all or part of the energy
produced by the commercial energy system as a commercial enterprise[
.
]
;
(iii) the commercial energy system is completed and placed in service on or after
January 1, 2007; and
(iv) the claimant, estate, or trust obtains a written certification from the office in
accordance with Subsection (6).
[
(ii) A business entity that is a claimant, estate, or trust is entitled to
]
(b) (i) Subject to Subsections (4)(b)(ii) and (iii),
 a tax credit under this Subsection
[
(2)(b)
] 
(4) is
 equal to the product of:
(A) 0.35 cents; and
(B) the kilowatt hours of electricity produced and [
either
] used or sold during the
taxable year.
[
(iii) The credit allowed by this Subsection (2)(b):
]
[
(A)
] 
(ii) A tax credit under this Subsection (4)
 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[
; and
]
.
[
(B)
] 
(iii) A tax credit under this Subsection (4)
 may not be carried forward or back.
[
(iv) A business entity that is a claimant, estate, or trust that leases
]
(c) A claimant, estate, or trust that is a lessee of
 a commercial energy system installed
on a commercial unit [
is eligible for the
] 
may claim a
 tax credit under this [
section
] 
Subsection
(4)
 if the [
lessee can confirm
] 
claimant, estate, or trust confirms
 that the lessor irrevocably
elects not to claim the 
tax
 credit.
[
(3) The tax credits provided for under this section are
]
(5) (a) Subject to the other provisions of this Subsection (5), a claimant, estate, or trust
may claim a refundable tax credit as provided in this Subsection (5) if:
(i) the claimant, estate, or trust owns a commercial energy system that uses solar
equipment capable of producing a total of 660 or more kilowatts of electricity;
(ii) (A) the commercial energy system supplies all or part of the energy required by
commercial units owned or used by the claimant, estate, or trust; or
(B) the claimant, estate, or trust sells all or part of the energy produced by the
commercial energy system as a commercial enterprise;
(iii) the claimant, estate, or trust does not claim a tax credit under Subsection (3);
(iv) the commercial energy system is completed and placed in service on or after
January 1, 2015; and
(v) the claimant, estate, or trust obtains a written certification from the office in
accordance with Subsection (6).
(b) (i) Subject to Subsections (5)(b)(ii) and (iii), a tax credit under this Subsection (5)
is equal to the product of:
(A) 0.35 cents; and
(B) the kilowatt hours of electricity produced and used or sold during the taxable year.
(ii) A tax credit under this Subsection (5) 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.
(iii) A tax credit under this Subsection (5) may not be carried forward or carried back.
(c) A claimant, estate, or trust that is a lessee of a commercial energy system installed
on a commercial unit may claim a tax credit under this Subsection (5) if the claimant, estate, or
trust confirms that the lessor irrevocably elects not to claim the tax credit.
(6) (a) Before a claimant, estate, or trust may claim a tax credit under this section, the
claimant, estate, or trust shall obtain a written certification from the office.
(b) The office shall issue a claimant, estate, or trust a written certification if the office
determines that:
(i) the claimant, estate, or trust meets the requirements of this section to receive a tax
credit; and
(ii) the office determines that the commercial energy system with respect to which the
claimant, estate, or trust seeks to claim a tax credit:
(A) has been completely installed;
(B) is a viable system for saving or producing energy from renewable resources; and
(C) is safe, reliable, efficient, and technically feasible to ensure that the commercial
energy system uses the state's renewable and nonrenewable resources in an appropriate and
economic manner.
(c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
office may make rules:
(i) for determining whether a commercial energy system meets the requirements of
Subsection (6)(b)(ii); and
(ii) for purposes of a tax credit under Subsection (3), establishing the reasonable costs
of a commercial energy system, as an amount per unit of energy production.
(d) A claimant, estate, or trust that obtains a written certification from the office shall
retain the certification for the same time period a person is required to keep books and records
under Section 
59-1-1406
.
(7) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may make rules to address the certification of a tax credit under this section.
(8) A tax credit under this section is
 in addition to any tax credits provided under the
laws or rules and regulations of the United States.
[
(4) (a) The office may set standards for commercial energy systems claiming a tax
credit under Subsection (2)(a) 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.
]
[
(b) A tax credit may not be taken under this section until the office has certified that
the commercial energy system has been completely installed and is a viable system for saving
or production of energy from renewable resources.
]
[
(5) 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.
]
(9) A purchaser of one or more solar units that claims a tax credit under Section
59-10-1024
 for the purchase of the one or more solar units may not claim a tax credit under this
section for that purchase.
[
(6)
] 
(10)
 (a) On or before October 1, [
] 
, and every five years [
thereafter
]
after 2017
, 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 credit should be continued, modified, or repealed.
(b) The Revenue and Taxation Interim Committee's report under Subsection [
(6)
]
(10)
(a) shall include information concerning the cost of the credit, the purpose and
effectiveness of the credit, and the state's benefit from the credit.
Section 5. 
Effective date -- Retrospective operation.
(1) This bill takes effect on May 12, 2015.
(2) The actions affecting the following sections have retrospective operation for a
taxable year beginning on or after January 1, 2015:
(a) Section 
59-7-614
;
(b) Section 
59-10-1014
; and
(c) Section 
59-10-1106
.
Section 6. 
 Coordinating S.B. 14 with S.B. 13 -- Substantive and technical
amendments.
If this S.B. 14 and S.B. 13, Income Tax Amendments, both pass and become law, it is
the intent of the Legislature that the Office of Legislative Research and General Counsel
prepare the Utah Code database for publication as follows:
(1) Section 
59-7-614
 in this bill supersedes Section 
59-7-614
 in S.B. 13;
(2) delete all of Subsection 
59-7-614
(10) in this bill; and
(3) renumber Subsection 
59-7-614
(11) in this bill, including the references to
Subsection 
59-7-614
(11) in this bill, to Subsection (10).