H.B. 3001 - Tax Credit Review Amendments

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Bill

Tax Credit Review Amendments
Number: H.B. 3001 (2016S3)
Sponsor: Rep. Peterson, J.
Final action: Governor Signed 7/17/2016
Outcome: Became law — signed by Gov. Gary R. Herbert
Summary

This bill provides for a review of certain tax credits.
What it does

This bill:
requires the Revenue and Taxation Interim Committee to review certain credits related to individual income tax, corporate income tax, motor and special fuel tax, taxation of admitted insurers, and economic development; and
establishes requirements for the review by the Revenue and Taxation Interim Committee.
Every vote on this bill

7/13/2016Senate/ passed 2nd & 3rd readings/ suspension
Senate President
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7/13/2016House/ circled
House 3rd Reading Calendar for House bills
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7/13/2016House/ uncircled
House 3rd Reading Calendar for House bills
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7/13/2016House/ passed 3rd reading
Senate Secretary
69 1 5YEA
Bill text

enrolled version · official source
TAX CREDIT REVIEW AMENDMENTS
THIRD SPECIAL SESSION
STATE OF UTAH
Chief Sponsor: Jeremy A. Peterson
Senate Sponsor: 
Curtis S. Bramble
LONG TITLE
General Description:
This bill provides for a review of certain tax credits.
Highlighted Provisions:
This bill:
▸ requires the Revenue and Taxation Interim Committee to review certain credits
related to individual income tax, corporate income tax, motor and special fuel tax,
taxation of admitted insurers, and economic development; and
▸ establishes requirements for the review by the Revenue and Taxation Interim
Committee.
Money Appropriated in this Bill:
None
Other Special Clauses:
This bill provides a special effective date.
Utah Code Sections Affected:
AMENDS:
59-7-612
, as last amended by Laws of Utah 2016, Chapter 135
59-7-614
, as last amended by Laws of Utah 2015, Chapters 30, 133 and last amended
by Coordination Clause, Laws of Utah 2015, Chapter 133
59-7-614.2
, as last amended by Laws of Utah 2016, Chapters 135 and 350
59-7-614.5
, as last amended by Laws of Utah 2016, Chapter 135
59-7-614.7
, as last amended by Laws of Utah 2016, Chapter 135
59-7-614.8
, as last amended by Laws of Utah 2016, Chapter 135
59-7-614.10
, as enacted by Laws of Utah 2016, Chapter 11
59-7-619
, as enacted by Laws of Utah 2015, Chapter 356
59-9-107
, as enacted by Laws of Utah 2014, Chapter 435
59-10-1012
, as last amended by Laws of Utah 2016, Chapter 135
59-10-1013
, as last amended by Laws of Utah 2016, Chapter 135
59-10-1014
, as last amended by Laws of Utah 2015, Chapter 133
59-10-1024
, as last amended by Laws of Utah 2011, Chapter 384
59-10-1025
, as last amended by Laws of Utah 2016, Chapter 354
59-10-1029
, as last amended by Laws of Utah 2016, Chapter 135
59-10-1030
, as last amended by Laws of Utah 2016, Chapter 135
59-10-1034
, as enacted by Laws of Utah 2015, Chapter 356
59-10-1037
, as enacted by Laws of Utah 2016, Chapter 11
59-10-1106
, as last amended by Laws of Utah 2015, Chapter 133
59-10-1107
, as last amended by Laws of Utah 2016, Chapter 135
59-10-1108
, as last amended by Laws of Utah 2016, Chapter 135
59-13-202
, as last amended by Laws of Utah 2016, Chapter 375
63N-2-106
, as last amended by Laws of Utah 2015, Chapter 344 and renumbered and
amended by Laws of Utah 2015, Chapter 283
63N-2-213
, as last amended by Laws of Utah 2016, Chapter 11
63N-2-305
, as renumbered and amended by Laws of Utah 2015, Chapter 283
63N-2-810
, as last amended by Laws of Utah 2016, Chapters 135 and 354
ENACTS:
59-7-159
, Utah Code Annotated 1953
59-10-137
, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
59-7-159
 is enacted to read:
 59-7-159.
Review of credits allowed under this chapter.
(1) As used in this section, "committee" means the Revenue and Taxation Interim
Committee.
(2) (a) The committee shall review the tax credits described in this chapter as provided
in Subsection (3) and make recommendations concerning whether the tax credits should be
continued, modified, or repealed.
(b) In conducting the review required under Subsection (2)(a), the committee shall:
(i) schedule time on at least one committee agenda to conduct the review;
(ii) invite state agencies, individuals, and organizations concerned with the tax credit
under review to provide testimony;
(iii) (A) invite the Governor's Office of Economic Development to present a summary
and analysis of the information for each tax credit regarding which the Governor's Office of
Economic Development is required to make a report under this chapter; and
(B) invite the Office of the Legislative Fiscal Analyst to present a summary and
analysis of the information for each tax credit regarding which the Office of the Legislative
Fiscal Analyst is required to make a report under this chapter;
(iv) ensure that the committee's recommendations described in this section include an
evaluation of:
(A) the cost of the tax credit to the state;
(B) the purpose and effectiveness of the tax credit; and
(C) the extent to which the state benefits from the tax credit; and
(v) undertake other review efforts as determined by the committee chairs or as
otherwise required by law.
(3) (a) On or before November 30, 2017, and every three years after 2017, the
committee shall conduct the review required under Subsection (2) of the tax credits allowed
under the following sections:
(i) Section 
59-7-601
;
(ii) Section 
59-7-607
;
(iii) Section 
59-7-612
;
(iv) Section 
59-7-614.1
; and
(v) Section 
59-7-614.5
.
(b) On or before November 30, 2018, and every three years after 2018, the committee
shall conduct the review required under Subsection (2) of the tax credits allowed under the
following sections:
(i) Section 
59-7-609
;
(ii) Section 
59-7-614.2
;
(iii) Section 
59-7-614.10
;
(iv) Section 
59-7-617
;
(v) Section 
59-7-619
; and
(vi) Section 
59-7-620
.
(c) On or before November 30, 2019, and every three years after 2019, the committee
shall conduct the review required under Subsection (2) of the tax credits allowed under the
following sections:
(i) Section 
59-7-605
;
(ii) Section 
59-7-610
;
(iii) Section 
59-7-614
;
(iv) Section 
59-7-614.7
;
(v) Section 
59-7-614.8
; and
(vi) Section 
59-7-618
.
(d) (i) In addition to the reviews described in this Subsection (3), the committee shall
conduct a review of a tax credit described in this chapter that is enacted on or after January 1,
2017.
(ii) The committee shall complete a review described in this Subsection (3)(d) three
years after the effective date of the tax credit and every three years after the initial review date.
Section 2. Section 
59-7-612
 is amended to read:
59-7-612.
Tax credits for research activities conducted in the state -- Carry
forward -- Commission to report modification or repeal of certain federal provisions --
Revenue and Taxation Interim Committee study.
(1) (a) A taxpayer meeting the requirements of this section may claim the following
nonrefundable tax credits:
(i) a research tax credit of 5% of the taxpayer's qualified research expenses for the
current taxable year that exceed the base amount provided for under Subsection (4);
(ii) a tax credit for a payment to a qualified organization for basic research as provided
in Section 41(e), Internal Revenue Code, of 5% for the current taxable year that exceed the
base amount provided for under Subsection (4); and
(iii) a tax credit equal to 7.5% of the taxpayer's qualified research expenses for the
current taxable year.
(b) Subject to Subsection (5), a taxpayer may claim a tax credit under:
(i) Subsection (1)(a)(i) or (1)(a)(iii), for the taxable year for which the taxpayer incurs
the qualified research expenses; or
(ii) Subsection (1)(a)(ii), for the taxable year for which the taxpayer makes the payment
to the qualified organization.
(c) The tax credits provided for in this section do not include the alternative
incremental credit provided for in Section 41(c)(4), Internal Revenue Code.
(2) For purposes of claiming a tax credit under this section, a unitary group as defined
in Section 
59-7-101
 is considered to be one taxpayer.
(3) Except as specifically provided for in this section:
(a) the tax credits authorized under Subsection (1) shall be calculated as provided in
Section 41, Internal Revenue Code; and
(b) the definitions provided in Section 41, Internal Revenue Code, apply in calculating
the tax credits authorized under Subsection (1).
(4) For purposes of this section:
(a) the base amount shall be calculated as provided in Sections 41(c) and 41(h),
Internal Revenue Code, except that:
(i) the base amount does not include the calculation of the alternative incremental
credit provided for in Section 41(c)(4), Internal Revenue Code;
(ii) a taxpayer's gross receipts include only those gross receipts attributable to sources
within this state as provided in Part 3, Allocation and Apportionment of Income - Utah
UDITPA Provisions; and
(iii) notwithstanding Section 41(c), Internal Revenue Code, for purposes of calculating
the base amount, a taxpayer:
(A) may elect to be treated as a start-up company as provided in Section 41(c)(3)(B)
regardless of whether the taxpayer meets the requirements of Section 41(c)(3)(B)(i)(I) or (II);
and
(B) may not revoke an election to be treated as a start-up company under Subsection
(4)(a)(iii)(A);
(b) "basic research" is as defined in Section 41(e)(7), Internal Revenue Code, except
that the term includes only basic research conducted in this state;
(c) "qualified research" is as defined in Section 41(d), Internal Revenue Code, except
that the term includes only qualified research conducted in this state;
(d) "qualified research expenses" is as defined and calculated in Section 41(b), Internal
Revenue Code, except that the term includes only:
(i) in-house research expenses incurred in this state; and
(ii) contract research expenses incurred in this state; and
(e) a tax credit provided for in this section is not terminated if a credit terminates under
Section 41, Internal Revenue Code.
(5) (a) If the amount of a tax credit claimed by a taxpayer under Subsection (1)(a)(i) or
(ii) exceeds the taxpayer's tax liability under this chapter for a taxable year, the amount of the
tax credit exceeding the tax liability:
(i) may be carried forward for a period that does not exceed the next 14 taxable years;
and
(ii) may not be carried back to a taxable year preceding the current taxable year.
(b) A taxpayer may not carry forward the tax credit allowed by Subsection (1)(a)(iii).
(6) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may make rules for purposes of this section prescribing a certification process for
qualified organizations to ensure that amounts paid to the qualified organizations are for basic
research conducted in this state.
(7) If a provision of Section 41, Internal Revenue Code, is modified or repealed, the
commission shall provide an electronic report of the modification or repeal to the Revenue and
Taxation Interim Committee within 60 days after the day on which the modification or repeal
becomes effective.
(8) (a) The Revenue and Taxation Interim Committee shall review the tax credits
provided for in this section on or before October 1 of the year after the year in which the
commission reports under Subsection (7) a modification or repeal of a provision of Section 41,
Internal Revenue Code.
(b) The review described in Subsection (8)(a) is in addition to the review required by
Section 
59-7-159
.
[
(b)
] 
(c)
 Notwithstanding Subsection (8)(a), the Revenue and Taxation Interim
Committee is not required to review the tax credits provided for in this section if the only
modification to a provision of Section 41, Internal Revenue Code, is the extension of the
termination date provided for in Section 41(h), Internal Revenue Code.
[
(c)
] 
(d)
 The Revenue and Taxation Interim Committee shall address in a review under
this section:
(i) the cost of the tax credits provided for in this section;
(ii) the purpose and effectiveness of the tax credits provided for in this section;
(iii) whether the tax credits provided for in this section benefit the state; and
(iv) whether the tax credits provided for in this section should be:
(A) continued;
(B) modified; or
(C) repealed.
[
(d)
] 
(e)
 If the Revenue and Taxation Interim Committee reviews the tax credits
provided for in this section, the committee shall 
issue a
 report [
its findings to the Legislative
Management Committee on or before the November interim meeting of the year in which the
Revenue and Taxation Interim Committee reviews the tax credits
] 
of the Revenue and Taxation
Interim Committee's findings
.
Section 3. Section 
59-7-614
 is amended to read:
59-7-614.
Renewable energy systems tax credits -- Definitions -- Certification --
Rulemaking authority.
(1) As used in this section:
(a) (i) "Active solar system" 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 a form of energy described in Subsection (1)(a)(i)(A) by a separate
apparatus to storage or to the point of use.
(ii) "Active solar system" includes water heating, space heating or cooling, and
electrical or mechanical energy generation.
(b) "Biomass system" means 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 the biomass energy by separate apparatus to the point of use or storage.
(c) "Commercial energy system" means 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.
(d) "Commercial enterprise" means an entity, the purpose of which is to produce
electrical, mechanical, or thermal energy for sale from a commercial energy system.
(e) (i) "Commercial unit" means a building or structure that an entity uses to transact
business.
(ii) Notwithstanding Subsection (1)(e)(i):
(A) with respect to an active solar system used for agricultural water pumping or a wind
system, each individual energy generating device is considered to be a commercial unit; or
(B) if an energy system is the building or structure that an entity uses to transact
business, a commercial unit is the complete energy system itself.
(f) "Direct use geothermal system" means a system of apparatus and equipment that
enables the direct use of geothermal energy to meet energy needs, including heating a building,
an industrial process, and aquaculture.
(g) "Geothermal electricity" means energy that is:
(i) contained in heat that continuously flows outward from the earth; 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 that:
(i) enables the use of thermal properties contained in the earth at temperatures well
below 100 degrees Fahrenheit; 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) "Office" means the Office of Energy Development created in Section 
63M-4-401
.
(l) (i) "Passive solar system" 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.
(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 the following used to supply energy to or for 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 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.
(ii) "Residential unit" does not include property subject to a fee under:
(A) Section 
59-2-404
;
(B) Section 
59-2-405
;
(C) Section 
59-2-405.1
;
(D) Section 
59-2-405.2
; or
(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 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).
(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 taxpayer owns or uses.
(ii) A tax credit under this Subsection (3) may include installation costs.
(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.
(v) The total amount of tax credit a taxpayer may claim under this Subsection (3) may
not exceed $2,000 per residential unit.
(c) If a taxpayer sells a residential unit to another person before the taxpayer claims the
tax credit under this Subsection (3):
(i) the taxpayer may assign the tax credit to the other person; and
(ii) (A) 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; 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.
(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 taxpayer; or
(B) the 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).
(b) (i) Subject to Subsections (4)(b)(ii) through (v), the tax credit is equal to 10% of the
reasonable costs of the commercial energy system.
(ii) A tax credit under this Subsection (4) may include installation costs.
(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.
(v) The total amount of tax credit a taxpayer may claim under this Subsection (4) may
not exceed $50,000 per commercial unit.
(c) (i) Subject to Subsections (4)(c)(ii) and (iii), a taxpayer that is a lessee of a
commercial energy system installed on a commercial unit may claim a tax credit under this
Subsection (4) if the taxpayer confirms that the lessor irrevocably elects not to claim the tax
credit.
(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.
(iii) A taxpayer described in Subsection (4)(c)(i) may claim a tax credit under this
Subsection (4) for a period that does not exceed seven taxable years after the date the lease
begins, as stated in the lease agreement.
(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 taxpayer; or
(B) the 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).
(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 taxpayer 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 taxpayer confirms that the lessor
irrevocably elects not to claim the tax credit.
(6) (a) Subject to the other provisions of this Subsection (6), a taxpayer may claim a
refundable tax credit as provided in this Subsection (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;
(ii) (A) the commercial energy system supplies all or part of the energy required by
commercial units owned or used by the taxpayer; or
(B) the taxpayer sells all or part of the energy produced by the commercial energy
system as a commercial enterprise;
(iii) the taxpayer does not claim a tax credit under Subsection (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) (i) Subject to Subsections (6)(b)(ii) and (iii), a tax credit under this Subsection (6)
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 (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.
(iii) A tax credit under this Subsection (6) may not be carried forward or carried back.
(c) A taxpayer that is a lessee of a commercial energy system installed on a commercial
unit may claim a tax credit under this Subsection (6) if the taxpayer confirms that the lessor
irrevocably elects not to claim the tax credit.
(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.
[
(10) (a) On or before October 1, 2017, and every five years 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 (10)(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 
59-7-614.2
 is amended to read:
59-7-614.2.
Refundable economic development tax credit.
(1) As used in this section:
(a) "Business entity" means a taxpayer that meets the definition of "business entity" as
defined in Section 
63N-2-103
.
(b) "Community reinvestment agency" means the same as that term is defined in
Section 
17C-1-102
.
(c) "Local government entity" means the same as that term is defined in Section
63N-2-103
.
(d) "New incremental jobs" means the same as that term is defined in Section
63N-2-103
.
(e) "New state revenues" means the same as that term is defined in Section 
63N-2-103
.
(f) "Office" means the Governor's Office of Economic Development.
(2) Subject to the other provisions of this section, a business entity, local government
entity, or community reinvestment agency may claim a refundable tax credit for economic
development.
(3) The tax credit under this section is the amount listed as the tax credit amount on the
tax credit certificate that the office issues to the business entity, local government entity, or
community reinvestment agency for the taxable year.
(4) A community reinvestment agency may claim a tax credit under this section only if
a local government entity assigns the tax credit to the community reinvestment agency in
accordance with Section 
63N-2-104
.
(5) (a) In accordance with any rules prescribed by the commission under Subsection
(5)(b), the commission shall make a refund to the following that claim a tax credit under this
section:
(i) a local government entity;
(ii) a community reinvestment agency; or
(iii) a business entity if the amount of the tax credit exceeds the business entity's tax
liability for a taxable year.
(b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may make rules providing procedures for making a refund to a business entity,
local government entity, or community reinvestment agency as required by Subsection (5)(a).
(6) (a) [
On or before October 1, 2013, and every five years after October 1, 2013
] 
In
accordance with Section 
59-7-159
, the Revenue and Taxation Interim Committee shall study
the tax credit allowed by this section and make recommendations [
to the Legislative
Management Committee
] concerning whether the tax credit should be continued, modified, or
repealed.
(b) [
For
] 
Except as provided in Subsection (6)(c), for
 purposes of the study required by
this Subsection (6), the office shall provide the following information
, if available to the office,
to the Revenue and Taxation Interim Committee by electronic means:
(i) the amount of tax credit that the office grants to each business entity, local
government entity, or community reinvestment agency for each calendar year;
(ii) the criteria that the office uses in granting a tax credit;
(iii) (A) for a business entity, the new state revenues generated by the business entity
for the calendar year; or
(B) for a local government entity, regardless of whether the local government entity
assigns the tax credit in accordance with Section 
63N-2-104
, the new state revenues generated
as a result of a new commercial project within the local government entity for each calendar
year;
(iv) estimates for each of the next [
five
] 
three
 calendar years of the following:
(A) the amount of tax credits that the office will grant;
(B) the amount of new state revenues that will be generated; and
(C) the number of new incremental jobs within the state that will be generated;
(v) the information contained in the office's latest report [
to the Legislature
] under
Section 
63N-2-106
; and
(vi) any other information that the Revenue and Taxation Interim Committee requests.
(c) (i) In providing the information described in Subsection (6)(b), the office shall
redact information that identifies a recipient of a tax credit under this section.
(ii) If, notwithstanding the redactions made under Subsection (6)(c)(i), reporting the
information described in Subsection (6)(b) might disclose the identity of a recipient of a tax
credit, the office may file a request with the Revenue and Taxation Interim Committee to
provide the information described in Subsection (6)(b) in the aggregate for all entities and
agencies that receive the tax credit under this section.
[
(c)
] 
(d)
 The Revenue and Taxation Interim Committee shall ensure that [
its
] 
the
recommendations [
under
] 
described in
 Subsection (6)(a) include an evaluation of:
(i) the cost of the tax credit to the state;
(ii) the purpose and effectiveness of the tax credit; and
(iii) the extent to which the state benefits from the tax credit.
Section 5. Section 
59-7-614.5
 is amended to read:
59-7-614.5.
Refundable motion picture tax credit.
(1) As used in this section:
(a) "Motion picture company" means a taxpayer that meets the definition of a motion
picture company under Section 
63N-8-102
.
(b) "Office" means the Governor's Office of Economic Development 
created in Section
63N-1-201
.
(c) "State-approved production" [
has the same meaning as
] 
means the same as that
term is
 defined in Section 
63N-8-102
.
(2) For 
a
 taxable [
years
] 
year
 beginning on or after January 1, 2009, a motion picture
company may claim a refundable tax credit for a state-approved production.
(3) The tax credit under this section is the amount listed as the tax credit amount on the
tax credit certificate that the office issues to a motion picture company under Section
63N-8-103
 for the taxable year.
(4) (a) In accordance with any rules prescribed by the commission under Subsection
(4)(b), the commission shall make a refund to a motion picture company that claims a tax
credit under this section if the amount of the tax credit exceeds the motion picture company's
tax liability for a taxable year.
(b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may make rules providing procedures for making a refund to a motion picture
company as required by Subsection (4)(a).
(5) (a) [
On or before October 1, 2014, and every five years after October 1, 2014
] 
In
accordance with Section 
59-7-159
, the Revenue and Taxation Interim Committee shall study
the tax credit allowed by this section and make recommendations [
to the Legislative
Management Committee
] concerning whether the tax credit should be continued, modified, or
repealed.
(b) [
For
] 
(i) Except as provided in Subsection (5)(b)(ii), for
 purposes of the study
required by this Subsection (5), the office shall provide the following information [
to the
Revenue and Taxation Interim Committee
]
, if available to the office, to the Office of the
Legislative Fiscal Analyst
 by electronic means:
[
(i)
] (A) the amount of tax credit that the office grants to each motion picture company
for each calendar year; [
and
]
(B) estimates of the amount of tax credit that the office will grant for each of the next
[
five
] 
three
 calendar years;
[
(ii)
] 
(C)
 the criteria that the office uses in granting the tax credit;
[
(iii)
] 
(D)
 the dollars left in the state, as defined in Section 
63N-8-102
, by each motion
picture company for each calendar year;
[
(iv)
] 
(E)
 the information contained in the office's latest report [
to the Legislature
]
under Section 
63N-8-105
; and
[
(v)
] 
(F)
 any other information [
requested by
] 
that
 the [
Revenue and Taxation Interim
Committee
] 
Office of the Legislative Fiscal Analyst requests
.
(ii) (A) In providing the information described in Subsection (5)(b)(i), the office shall
redact information that identifies a recipient of a tax credit under this section.
(B) If, notwithstanding the redactions made under Subsection (5)(b)(ii)(A), reporting
the information described in Subsection (5)(b)(i) might disclose the identity of a recipient of a
tax credit, the office may file a request with the Revenue and Taxation Interim Committee to
provide the information described in Subsection (5)(b)(i) in the aggregate for all motion picture
companies that receive the tax credit under this section.
(c) As part of the study required by this Subsection (5), the Office of the Legislative
Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
office under Subsection (5)(b).
[
(c)
] 
(d)
 The Revenue and Taxation Interim Committee shall ensure that [
its
] 
the
recommendations [
under
] 
described in
 Subsection (5)(a) include an evaluation of:
(i) the cost of the tax credit to the state;
(ii) the effectiveness of the tax credit; and
(iii) the extent to which the state benefits from the tax credit.
Section 6. Section 
59-7-614.7
 is amended to read:
59-7-614.7.
Nonrefundable alternative energy development tax credit.
(1) As used in this section:
(a) "Alternative energy entity" [
is as
] 
means the same as that term is
 defined in Section
63M-4-502
.
(b) "Alternative energy project" [
is as
] 
means the same as that term is
 defined in
Section 
63M-4-502
.
(c) "Office" [
is as defined
] 
means the Office of Energy Development created
 in Section
63M-4-401
.
(2) Subject to the other provisions of this section, an alternative energy entity may
claim a nonrefundable tax credit for alternative energy development as provided in this section.
(3) The tax credit under this section is the amount listed as the tax credit amount on a
tax credit certificate that the office issues under Title 63M, Chapter 4, Part 5, Alternative
Energy Development Tax Credit Act, to the alternative energy entity for the taxable year.
(4) An alternative energy entity may carry forward a tax credit under this section for a
period that does not exceed the next seven taxable years if:
(a) the alternative energy entity is allowed to claim a tax credit under this section for a
taxable year; and
(b) the amount of the tax credit exceeds the alternative energy entity's tax liability
under this chapter for that taxable year.
(5) (a) [
On or before October 1, 2017, and every five years after October 1, 2017
] 
In
accordance with Section 
59-7-159
, the Revenue and Taxation Interim Committee shall study
the tax credit allowed by this section and make recommendations [
to the Legislative
Management Committee
] concerning whether the tax credit should be continued, modified, or
repealed.
(b) [
For
] 
(i) Except as provided in Subsection (5)(b)(ii), for
 purposes of the study
required by this Subsection (5), the office shall provide the following information
, if available
to the office,
 to the [
Revenue and Taxation Interim Committee
] 
Office of the Legislative Fiscal
Analyst
 by electronic means:
[
(i)
] 
(A)
 the amount of tax credit that the office grants to each alternative energy entity
for each taxable year;
[
(ii)
] 
(B)
 the new state revenues generated by each alternative energy project;
[
(iii)
] 
(C)
 the information contained in the office's latest report [
to the Legislature
]
under Section 
63M-4-505
; and
[
(iv)
] 
(D)
 any other information that the [
Revenue and Taxation Interim Committee
]
Office of the Legislative Fiscal Analyst
 requests.
(ii) (A) In providing the information described in Subsection (5)(b)(i), the office shall
redact information that identifies a recipient of a tax credit under this section.
(B) If, notwithstanding the redactions made under Subsection (5)(b)(ii)(A), reporting
the information described in Subsection (5)(b)(i) might disclose the identity of a recipient of a
tax credit, the office may file a request with the Revenue and Taxation Interim Committee to
provide the information described in Subsection (5)(b)(i) in the aggregate for all alternative
energy entities that receive the tax credit under this section.
(c) As part of the study required by this Subsection (5), the Office of the Legislative
Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
office under Subsection (5)(b).
[
(c)
] 
(d)
 The Revenue and Taxation Interim Committee shall ensure that [
its
] 
the
recommendations [
under
] 
described in
 Subsection (5)(a) include an evaluation of:
(i) the cost of the tax credit to the state;
(ii) the purpose and effectiveness of the tax credit; and
(iii) the extent to which the state benefits from the tax credit.
Section 7. Section 
59-7-614.8
 is amended to read:
59-7-614.8.
Nonrefundable alternative energy manufacturing tax credit.
(1) As used in this section:
(a) "Alternative energy entity" means the same as that term is defined in Section
63N-2-702
.
(b) "Alternative energy manufacturing project" means the same as that term is defined
in Section 
63N-2-702
.
(c) "New incremental job within the state" means the same as that term is defined in
Section 
63N-2-702
.
(d) "New state revenues" means the same as that term is defined in Section 
63N-2-702
.
(e) "Office" means the Governor's Office of Economic Development 
created in Section
63N-1-201
.
(2) Subject to the other provisions of this section, an alternative energy entity may
claim a nonrefundable tax credit for alternative energy manufacturing as provided in this
section.
(3) The tax credit under this section is the amount listed as the tax credit amount on a
tax credit certificate that the office issues under Title 63N, Chapter 2, Part 7, Alternative
Energy Manufacturing Tax Credit Act, to the alternative energy entity for the taxable year.
(4) An alternative energy entity may carry forward a tax credit under this section for a
period that does not exceed the next seven taxable years if:
(a) the alternative energy entity is allowed to claim a tax credit under this section for a
taxable year; and
(b) the amount of the tax credit exceeds the alternative energy entity's tax liability
under this chapter for that taxable year.
(5) (a) [
On or before October 1, 2017, and every five years after October 1, 2017
] 
In
accordance with Section 
59-7-159
, the Revenue and Taxation Interim Committee shall study
the tax credit allowed by this section and make recommendations [
to the Legislative
Management Committee
] concerning whether the tax credit should be continued, modified, or
repealed.
(b) [
For
] 
Except as provided in Subsection (5)(c), for
 purposes of the study required by
this Subsection (5), the office shall provide the following information
, if available to the office,
to the [
Revenue and Taxation Interim Committee
] 
Office of the Legislative Fiscal Analyst
 by
electronic means:
(i) the amount of tax credit that the office grants to each alternative energy entity for
each taxable year;
(ii) the new state revenues generated by each alternative energy manufacturing project;
(iii) estimates for each of the next [
five
] 
three
 calendar years of the following:
(A) the amount of tax credits that the office will grant;
(B) the amount of new state revenues that will be generated; and
(C) the number of new incremental jobs within the state that will be generated;
(iv) the information contained in the office's latest report [
to the Legislature
] under
Section 
63N-2-705
; and
(v) any other information that the [
Revenue and Taxation Interim Committee
] 
Office of
the Legislative Fiscal Analyst
 requests.
(c) (i) In providing the information described in Subsection (5)(b), the office shall
redact information that identifies a recipient of a tax credit under this section.
(ii) If, notwithstanding the redactions made under Subsection (5)(c)(i), reporting the
information described in Subsection (5)(b) might disclose the identity of a recipient of a tax
credit, the office may file a request with the Revenue and Taxation Interim Committee to
provide the information described in Subsection (5)(b) in the aggregate for all alternative
energy entities that receive the tax credit under this section.
(d) As part of the study required by this Subsection (5), the Office of the Legislative
Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
office under Subsection (5)(b).
[
(c)
] 
(e)
 The Revenue and Taxation Interim Committee shall ensure that [
its
] 
the
recommendations [
under
] 
described in
 Subsection (5)(a) include an evaluation of:
(i) the cost of the tax credit to the state;
(ii) the purpose and effectiveness of the tax credit; and
(iii) the extent to which the state benefits from the tax credit.
Section 8. Section 
59-7-614.10
 is amended to read:
59-7-614.10.
Nonrefundable enterprise zone tax credit.
(1) As used in this section:
(a) "Business entity" means a corporation that meets the definition of "business entity"
as that term is defined in Section 
63N-2-202
.
(b) "Office" means the Governor's Office of Economic Development created in Section
63N-1-201
.
(2) Subject to the provisions of this section, a business entity may claim a
nonrefundable enterprise zone tax credit as described in Section 
63N-2-213
.
(3) The enterprise zone tax credit under this section is the amount listed as the tax
credit amount on the tax credit certificate that the office issues to the business entity for the
taxable year.
(4) A business entity may carry forward a tax credit under this section for a period that
does not exceed the next three taxable years, if the amount of the tax credit exceeds the
business entity's tax liability under this chapter for that taxable year.
(5) A business entity may not claim or carry forward a tax credit available under this
part for a taxable year during which the business entity has claimed the targeted business
income tax credit available under Section 
63N-2-305
.
(6) (a) [
On or before October 1, 2018, and every five years after October 1, 2018
] 
In
accordance with Section 
59-7-159
, the Revenue and Taxation Interim Committee shall study
the tax credit allowed by this section and make recommendations [
to the Legislative
Management Committee
] concerning whether the tax credit should be continued, modified, or
repealed.
(b) [
For
] 
(i) Except as provided in Subsection (6)(b)(ii), for
 purposes of the study
required by this Subsection (6), the office shall provide by electronic means the following
information for each calendar year to the [
Revenue and Taxation Interim Committee
] 
Office of
the Legislative Fiscal Analyst
:
[
(i)
] 
(A)
 the amount of tax credits provided in each development zone;
[
(ii)
] 
(B)
 the number of new full-time employee positions reported to obtain tax credits
in each development zone;
[
(iii)
] 
(C)
 the amount of tax credits awarded for rehabilitating a building in each
development zone;
[
(iv)
] 
(D)
 the amount of tax credits awarded for investing in a plant, equipment, or
other depreciable property in each development zone;
[
(v)
] 
(E)
 the information related to the tax credit contained in the office's latest report
[
to the Legislature
] under Section 
63N-1-301
; and
[
(vi)
] 
(F) any
 other information [
as requested by the Revenue and Taxation Interim
Committee
] 
that the Office of the Legislative Fiscal Analyst requests
.
(ii) (A) In providing the information described in Subsection (6)(b)(i), the office shall
redact information that identifies a recipient of a tax credit under this section.
(B) If, notwithstanding the redactions made under Subsection (6)(b)(ii)(A), reporting
the information described in Subsection (6)(b)(i) might disclose the identity of a recipient of a
tax credit, the office may file a request with the Revenue and Taxation Interim Committee to
provide the information described in Subsection (6)(b)(i) in the aggregate for all development
zones that receive the tax credit under this section.
(c) As part of the study required by this Subsection (6), the Office of the Legislative
Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
office under Subsection (6)(b).
[
(c)
] 
(d)
 The Revenue and Taxation Interim Committee shall ensure that [
its
] 
the
recommendations [
under
] 
described in
 Subsection (6)(a) include an evaluation of:
(i) the cost of the tax credit to the state;
(ii) the purpose and effectiveness of the tax credit; and
(iii) the extent to which the state benefits from the tax credit.
Section 9. Section 
59-7-619
 is amended to read:
59-7-619.
Nonrefundable high cost infrastructure development tax credit.
(1) As used in this section:
(a) "High cost infrastructure project" means the same as that term is defined in Section
63M-4-602
.
(b) "Infrastructure cost-burdened entity" means the same as that term is defined in
Section 
63M-4-602
.
(c) "Infrastructure-related revenue" means the same as that term is defined in Section
63M-4-602
.
(d) "Office" means the Office of Energy Development created in Section 
63M-4-401
.
(2) Subject to the other provisions of this section, a corporation that is an infrastructure
cost-burdened entity may claim a nonrefundable tax credit for development of a high cost
infrastructure project as provided in this section.
(3) The tax credit under this section is the amount listed as the tax credit amount on a
tax credit certificate that the office issues under Title 63M, Chapter 4, Part 6, High Cost
Infrastructure Development Tax Credit Act, to the infrastructure cost-burdened entity for the
taxable year.
(4) An infrastructure cost-burdened entity may carry forward a tax credit under this
section for a period that does not exceed the next seven taxable years if:
(a) the infrastructure cost-burdened entity is allowed to claim a tax credit under this
section for a taxable year; and
(b) the amount of the tax credit exceeds the infrastructure cost-burdened entity's tax
liability under this chapter for that taxable year.
(5) (a) [
On or before October 1, 2020, and every five years after October 1, 2020
] 
In
accordance with Section 
59-7-159
, the Revenue and Taxation Interim Committee shall study
the tax credit allowed by this section and make recommendations [
to the Legislative
Management Committee
] concerning whether the tax credit should be continued, modified, or
repealed.
(b) [
For
] 
(i) Except as provided in Subsection (5)(b)(ii), for
 purposes of the study
required by this Subsection (5), the office shall provide the following information
, if available
to the office,
 to the [
Revenue and Taxation Interim Committee
] 
Office of the Legislative Fiscal
Analyst
:
[
(i)
] 
(A)
 the amount of tax credit that the office grants to each infrastructure
cost-burdened entity for each taxable year;
[
(ii)
] 
(B)
 the infrastructure-related revenue generated by each high cost infrastructure
project;
[
(iii)
] 
(C)
 the information contained in the office's latest report [
to the Legislature
]
under Section 
63M-4-505
; and
[
(iv)
] 
(D)
 any other information that the [
Revenue and Taxation Interim Committee
]
Office of the Legislative Fiscal Analyst
 requests.
(ii) (A) In providing the information described in Subsection (5)(b)(i), the office shall
redact information that identifies a recipient of a tax credit under this section.
(B) If, notwithstanding the redactions made under Subsection (5)(b)(ii)(A), reporting
the information described in Subsection (5)(b)(i) might disclose the identity of a recipient of a
tax credit, the office may file a request with the Revenue and Taxation Interim Committee to
provide the information described in Subsection (5)(b)(i) in the aggregate for all infrastructure
cost-burdened entities that receive the tax credit under this section.
(c) As part of the study required by this Subsection (5), the Office of the Legislative
Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
office under Subsection (5)(b).
[
(c)
] 
(d)
 The Revenue and Taxation Interim Committee shall ensure that the [
Revenue
and Taxation Interim Committee's
] recommendations [
under
] 
described in
 Subsection (5)(a)
include an evaluation of:
(i) the cost of the tax credit to the state;
(ii) the purpose and effectiveness of the tax credit; and
(iii) the extent to which the state benefits from the tax credit.
Section 10. Section 
59-9-107
 is amended to read:
59-9-107.
Nonrefundable small business jobs credit.
(1) As used in this section:
(a) "Credit allowance date" [
is as
] 
means the same as that term is
 defined in Section
63N-2-602
.
(b) "Office" [
is as defined
] 
means the Governor's Office of Economic Development
created
 in Section [
63N-1-102
] 
63N-1-201
.
(c) "Tax credit certificate" [
is as
] 
means the same as that term is
 defined in Section
63N-2-602
.
(2) An entity may claim a nonrefundable tax credit against a tax liability under this
chapter in accordance with this section if the entity is issued a tax credit certificate by the office
under Subsection 
63N-2-603
(11). The office shall issue a tax credit certificate to an entity that
is allocated tax credits under Subsection 
63N-2-603
(11)(e).
(3) The tax credit under this section is the amount listed as the tax credit amount on the
tax credit certificate issued to the entity for the calendar year.
(4) An entity may carry forward a tax credit under this section for seven years if:
(a) the entity is allowed to claim a tax credit under this section for a calendar year; and
(b) the amount of the tax credit exceeds the entity's tax liability under this chapter for
that calendar year.
(5) An entity required to pay a retaliatory tax levied under this chapter for a reason
other than claiming the tax credit may claim the tax credit after the retaliatory tax amount is
calculated, and the tax credit may be used to offset retaliatory tax liability.
(6) Notwithstanding the other provisions of this section, this section does not apply to
an admitted insurer to the extent that the admitted insurer writes workers' compensation
insurance in this state and has premiums taxed under Subsection 
59-9-101
(2).
(7) (a) On or before November 30, 2018, and every three years after 2018, the Revenue
and Taxation Interim Committee shall review the tax credit provided by this section and make
recommendations concerning whether the tax credit should be continued, modified, or
repealed.
(b) In conducting the review required by Subsection (7)(a), the Revenue and Taxation
Interim Committee shall:
(i) schedule time on at least one committee agenda to conduct the review;
(ii) invite state agencies, individuals, and organizations concerned with the tax credit
under review to provide testimony;
(iii) ensure that the recommendations described in this section include an evaluation of:
(A) the cost of the tax credit to the state;
(B) the purpose and effectiveness of the tax credit; and
(C) the extent to which the state benefits from the tax credit; and
(iv) undertake other review efforts as determined by the chairs of the Revenue and
Taxation Interim Committee.
Section 11. Section 
59-10-137
 is enacted to read:
 59-10-137.
Review of credits allowed under this chapter.
(1) As used in this section, "committee" means the Revenue and Taxation Interim
Committee.
(2) (a) The committee shall review the tax credits described in this chapter as provided
in Subsection (3) and make recommendations concerning whether the tax credits should be
continued, modified, or repealed.
(b) In conducting the review required under Subsection (2)(a), the committee shall:
(i) schedule time on at least one committee agenda to conduct the review;
(ii) invite state agencies, individuals, and organizations concerned with the tax credit
under review to provide testimony;
(iii) (A) invite the Governor's Office of Economic Development to present a summary
and analysis of the information for each tax credit regarding which the Governor's Office of
Economic Development is required to make a report under this chapter; and
(B) invite the Office of the Legislative Fiscal Analyst to present a summary and
analysis of the information for each tax credit regarding which the Office of the Legislative
Fiscal Analyst is required to make a report under this chapter;
(iv) ensure that the committee's recommendations described in this section include an
evaluation of:
(A) the cost of the tax credit to the state;
(B) the purpose and effectiveness of the tax credit; and
(C) the extent to which the state benefits from the tax credit; and
(v) undertake other review efforts as determined by the committee chairs or as
otherwise required by law.
(3) (a) On or before November 30, 2017, and every three years after 2017, the
committee shall conduct the review required under Subsection (2) of the tax credits allowed
under the following sections:
(i) Section 
59-10-1004
;
(ii) Section 
59-10-1010
;
(iii) Section 
59-10-1015
;
(iv) Section 
59-10-1025
;
(v) Section 
59-10-1027
;
(vi) Section 
59-10-1031
;
(vii) Section 
59-10-1032
;
(viii) Section 
59-10-1035
;
(ix) Section 
59-10-1104
;
(x) Section 
59-10-1105
; and
(xi) Section 
59-10-1108
.
(b) On or before November 30, 2018, and every three years after 2018, the committee
shall conduct the review required under Subsection (2) of the tax credits allowed under the
following sections:
(i) Section 
59-10-1005
;
(ii) Section 
59-10-1006
;
(iii) Section 
59-10-1012
;
(iv) Section 
59-10-1013
;
(v) Section 
59-10-1022
;
(vi) Section 
59-10-1023
;
(vii) Section 
59-10-1028
;
(viii) Section 
59-10-1034
;
(ix) Section 
59-10-1037
; and
(x) Section 
59-10-1107
.
(c) On or before November 30, 2019, and every three years after 2019, the committee
shall conduct the review required under Subsection (2) of the tax credits allowed under the
following sections:
(i) Section 
59-10-1007
;
(ii) Section 
59-10-1009
;
(iii) Section 
59-10-1014
;
(iv) Section 
59-10-1017
;
(v) Section 
59-10-1018
;
(vi) Section 
59-10-1019
;
(vii) Section 
59-10-1024
;
(viii) Section 
59-10-1029
;
(ix) Section 
59-10-1030
;
(x) Section 
59-10-1033
;
(xi) Section 
59-10-1036
;
(xii) Section 
59-10-1106
; and
(xiii) Section 
59-10-1111
.
(d) (i) In addition to the reviews described in this Subsection (3), the committee shall
conduct a review of a tax credit described in this chapter that is enacted on or after January 1,
2017.
(ii) The committee shall complete a review described in this Subsection (3)(d) three
years after the effective date of the tax credit and every three years after the initial review date.
Section 12. Section 
59-10-1012
 is amended to read:
59-10-1012.
Tax credits for research activities conducted in the state -- Carry
forward -- Commission to report modification or repeal of certain federal provisions --
Revenue and Taxation Interim Committee study.
(1) (a) A claimant, estate, or trust meeting the requirements of this section may claim
the following nonrefundable tax credits:
(i) a research tax credit of 5% of the claimant's, estate's, or trust's qualified research
expenses for the current taxable year that exceed the base amount provided for under
Subsection (3);
(ii) a tax credit for a payment to a qualified organization for basic research as provided
in Section 41(e), Internal Revenue Code of 5% for the current taxable year that exceed the base
amount provided for under Subsection (3); and
(iii) a tax credit equal to 7.5% of the claimant's, estate's, or trust's qualified research
expenses for the current taxable year.
(b) Subject to Subsection (4), a claimant, estate, or trust may claim a tax credit under:
(i) Subsection (1)(a)(i) or (1)(a)(iii), for the taxable year for which the claimant, estate,
or trust incurs the qualified research expenses; or
(ii) Subsection (1)(a)(ii), for the taxable year for which the claimant, estate, or trust
makes the payment to the qualified organization.
(c) The tax credits provided for in this section do not include the alternative
incremental credit provided for in Section 41(c)(4), Internal Revenue Code.
(2) Except as specifically provided for in this section:
(a) the tax credits authorized under Subsection (1) shall be calculated as provided in
Section 41, Internal Revenue Code; and
(b) the definitions provided in Section 41, Internal Revenue Code, apply in calculating
the tax credits authorized under Subsection (1).
(3) For purposes of this section:
(a) the base amount shall be calculated as provided in Sections 41(c) and 41(h),
Internal Revenue Code, except that:
(i) the base amount does not include the calculation of the alternative incremental
credit provided for in Section 41(c)(4), Internal Revenue Code;
(ii) a claimant's, estate's, or trust's gross receipts include only those gross receipts
attributable to sources within this state as provided in Section 
59-10-118
; and
(iii) notwithstanding Section 41(c), Internal Revenue Code, for purposes of calculating
the base amount, a claimant, estate, or trust:
(A) may elect to be treated as a start-up company as provided in Section 41(c)(3)(B),
Internal Revenue Code, regardless of whether the claimant, estate, or trust meets the
requirements of Section 41(c)(3)(B)(i)(I) or (II), Internal Revenue Code; and
(B) may not revoke an election to be treated as a start-up company under Subsection
(3)(a)(iii)(A);
(b) "basic research" is as defined in Section 41(e)(7), Internal Revenue Code, except
that the term includes only basic research conducted in this state;
(c) "qualified research" is as defined in Section 41(d), Internal Revenue Code, except
that the term includes only qualified research conducted in this state;
(d) "qualified research expenses" is as defined and calculated in Section 41(b), Internal
Revenue Code, except that the term includes only:
(i) in-house research expenses incurred in this state; and
(ii) contract research expenses incurred in this state; and
(e) a tax credit provided for in this section is not terminated if a credit terminates under
Section 41, Internal Revenue Code.
(4) (a) If the amount of a tax credit claimed by a claimant, estate, or trust under
Subsection (1)(a)(i) or (ii) exceeds the claimant's, estate's, or trust's tax liability under this
chapter for a taxable year, the amount of the tax credit exceeding the tax liability:
(i) may be carried forward for a period that does not exceed the next 14 taxable years;
and
(ii) may not be carried back to a taxable year preceding the current taxable year.
(b) A claimant, estate, or trust may not carry forward the tax credit allowed by
Subsection (1)(a)(iii).
(5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may make rules for purposes of this section prescribing a certification process for
qualified organizations to ensure that amounts paid to the qualified organizations are for basic
research conducted in this state.
(6) If a provision of Section 41, Internal Revenue Code, is modified or repealed, the
commission shall report the modification or repeal by electronic means to the Revenue and
Taxation Interim Committee within 60 days after the day on which the modification or repeal
becomes effective.
(7) (a) The Revenue and Taxation Interim Committee shall review the tax credits
provided for in this section on or before October 1 of the year after the year in which the
commission reports under Subsection (6) a modification or repeal of a provision of Section 41,
Internal Revenue Code.
(b) The review described in Subsection (7)(a) is in addition to the review required by
Section 
59-10-137
.
[
(b)
] 
(c)
 Notwithstanding Subsection (7)(a), the Revenue and Taxation Interim
Committee is not required to review the tax credits provided for in this section if the only
modification to a provision of Section 41, Internal Revenue Code, is the extension of the
termination date provided for in Section 41(h), Internal Revenue Code.
[
(c)
] 
(d)
 The Revenue and Taxation Interim Committee shall address in a review under
this section:
(i) the cost of the tax credits provided for in this section;
(ii) the purpose and effectiveness of the tax credits provided for in this section;
(iii) whether the tax credits provided for in this section benefit the state; and
(iv) whether the tax credits provided for in this section should be:
(A) continued;
(B) modified; or
(C) repealed.
[
(d)
] 
(e)
 If the Revenue and Taxation Interim Committee reviews the tax credits
provided for in this section, the committee shall 
issue a
 report [
its
] 
of the Revenue and
Taxation Interim Committee's
 findings [
to the Legislative Management Committee on or
before the November interim meeting of the year in which the Revenue and Taxation Interim
Committee reviews the tax credits
].
Section 13. Section 
59-10-1013
 is amended to read:
59-10-1013.
Tax credits for machinery, equipment, or both primarily used for
conducting qualified research or basic research -- Carry forward -- Commission to report
modification or repeal of certain federal provisions -- Revenue and Taxation Interim
Committee study.
(1) As used in this section:
(a) "Basic research" [
is as
] 
means the same as that term is
 defined in Section 41(e)(7),
Internal Revenue Code, except that the term includes only basic research conducted in this
state.
(b) "Equipment" includes:
(i) a computer;
(ii) computer equipment; and
(iii) computer software.
(c) "Purchase price":
(i) includes the cost of installing an item of machinery or equipment; and
(ii) does not include a tax imposed under Chapter 12, Sales and Use Tax Act, on an
item of machinery or equipment.
(d) "Qualified organization" [
is as
] 
means the same as that term is
 defined in Section
41(e)(6), Internal Revenue Code.
(e) "Qualified research" [
is as
] 
means the same as that term is
 defined in Section 41(d),
Internal Revenue Code, except that the term includes only qualified research conducted in this
state.
(2) (a) Except as provided in Subsection (2)(c), for 
a
 taxable [
years
] 
year
 beginning on
or after January 1, 1999, but beginning before December 31, 2010, a claimant, estate, or trust
meeting the requirements of this section may claim the following nonrefundable tax credits:
(i) a tax credit of 6% of the purchase price of machinery, equipment, or both:
(A) purchased by the claimant, estate, or trust during the taxable year;
(B) that is subject to a tax under Chapter 12, Sales and Use Tax Act; and
(C) that is primarily used to conduct qualified research in this state; and
(ii) a tax credit of 6% of the purchase price paid by the claimant, estate, or trust for
machinery, equipment, or both:
(A) purchased by the claimant, estate, or trust during the taxable year;
(B) that is subject to a tax under Chapter 12, Sales and Use Tax Act;
(C) that is donated to a qualified organization; and
(D) that is primarily used to conduct basic research in this state.
(b) Subject to Subsection (4), a claimant, estate, or trust may claim a tax credit under
this section for the taxable year for which the claimant, estate, or trust purchases the machinery,
equipment, or both.
(c) If a claimant, estate, or trust qualifies for a tax credit under Subsection (2)(a) for a
purchase of machinery, equipment, or both, the claimant, estate, or trust may not claim the tax
credit or carry the tax credit forward if the machinery, equipment, or both, is primarily used to
conduct qualified research in the state for a time period that is less than 12 consecutive months.
(3) Notwithstanding Section 41(h), Internal Revenue Code, a tax credit provided for in
this section is not terminated if a credit terminates under Section 41, Internal Revenue Code.
(4) If the amount of a tax credit claimed by a claimant, estate, or trust under this
section 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 tax liability:
(a) may be carried forward for a period that does not exceed the next 14 taxable years;
and
(b) may not be carried back to a taxable year preceding the current taxable year.
(5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may make rules for purposes of this section prescribing a certification process for
qualified organizations to ensure that machinery, equipment, or both provided to the qualified
organization is to be primarily used to conduct basic research in this state.
(6) If a provision of Section 41, Internal Revenue Code, is modified or repealed, the
commission shall report the modification or repeal by electronic means to the Revenue and
Taxation Interim Committee within 60 days after the day on which the modification or repeal
becomes effective.
(7) (a) The Revenue and Taxation Interim Committee shall review the tax credits
provided for in this section on or before October 1 of the year after the year in which the
commission reports under Subsection (6) a modification or repeal of a provision of Section 41,
Internal Revenue Code.
(b) The review described in Subsection (7)(a) is in addition to the review required by
Section 
59-10-137
.
[
(b)
] 
(c)
 Notwithstanding Subsection (7)(a), the Revenue and Taxation Interim
Committee is not required to review the tax credits provided for in this section if the only
modification to a provision of Section 41, Internal Revenue Code, is the extension of the
termination date provided for in Section 41(h), Internal Revenue Code.
[
(c)
] 
(d)
 The Revenue and Taxation Interim Committee shall address in a review under
this section the:
(i) cost of the tax credits provided for in this section;
(ii) purpose and effectiveness of the tax credits provided for in this section;
(iii) whether the tax credits provided for in this section benefit the state; and
(iv) whether the tax credits provided for in this section should be:
(A) continued;
(B) modified; or
(C) repealed.
[
(d)
] 
(e)
 If the Revenue and Taxation Interim Committee reviews the tax credits
provided for in this section, the committee shall 
issue a
 report [
its
] 
of the Revenue and
Taxation Interim Committee's
 findings [
to the Legislative Management Committee on or
before the November interim meeting of the year in which the Revenue and Taxation Interim
Committee reviews the tax credits
].
Section 14. Section 
59-10-1014
 is amended to read:
59-10-1014.
Nonrefundable renewable energy systems tax credits -- Definitions --
Certification -- Rulemaking authority.
(1) As used in this section:
(a) (i) "Active solar system" 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 a form of energy described in Subsection (1)(a)(i)(A) by a separate
apparatus to storage or to the point of use.
(ii) "Active solar system" includes water heating, space heating or cooling, and
electrical or mechanical energy generation.
(b) "Biomass system" means 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 the biomass energy by separate apparatus to the point of use or storage.
(c) "Direct use geothermal system" means a system of apparatus and equipment that
enables the direct use of geothermal energy to meet energy needs, including heating a building,
an industrial process, and aquaculture.
(d) "Geothermal electricity" means energy that is:
(i) contained in heat that continuously flows outward from the earth; 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 that:
(i) enables the use of thermal properties contained in the earth at temperatures well
below 100 degrees Fahrenheit; 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" 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.
(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.
(k) "Residential energy system" means the following used to supply energy to or for 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.
(l) (i) "Residential unit" means 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.
(ii) "Residential unit" does not include property subject to a fee under:
(A) Section 
59-2-404
;
(B) Section 
59-2-405
;
(C) Section 
59-2-405.1
;
(D) Section 
59-2-405.2
; or
(E) Section 
59-2-405.3
.
(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) 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).
(b) (i) Subject to Subsections (3)(b)(ii) through (vi), the tax credit is equal to 25% of
the reasonable costs of each residential energy system installed with respect to each residential
unit the claimant, estate, or trust owns or uses.
(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.
(vi) A claimant, estate, or trust may claim a tax credit with respect to additional
residential energy systems or parts of residential energy systems for a subsequent taxable year
if the total amount of tax credit the claimant, estate, or trust claims does not exceed $2,000 per
residential unit.
(c) (i) Subject to Subsections (3)(c)(ii) and (iii), a claimant, estate, or trust that leases a
residential energy system installed on a residential unit may claim a tax credit under this
Subsection (3) if the claimant, estate, or trust confirms that the lessor irrevocably elects not to
claim the tax credit.
(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.
(iii) A claimant, estate, or trust described in Subsection (3)(c)(i) that leases a residential
energy system may claim a tax credit under this Subsection (3) for a period that does not
exceed seven taxable years 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.
(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.
(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.
[
(8) (a) On or before October 1, 2017, and every five years 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 (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 15. Section 
59-10-1024
 is amended to read:
59-10-1024.
Nonrefundable tax credit for qualifying solar projects.
(1) As used in this section:
(a) "Active solar system" [
is as
] 
means the same as that term is
 defined in Section
59-10-1014
.
(b) "Purchaser" means a claimant, estate, or trust that purchases one or more solar units
from a qualifying political subdivision.
(c) "Qualifying political subdivision" means:
(i) a city or town in this state;
(ii) an interlocal entity created under Title 11, Chapter 13, Interlocal Cooperation Act;
or
(iii) a special service district created under Title 17D, Chapter 1, Special Service
District Act.
(d) "Qualifying solar project" means the portion of an active solar system:
(i) that a qualifying political subdivision:
(A) constructs;
(B) controls; or
(C) owns;
(ii) with respect to which the qualifying political subdivision described in Subsection
(1)(c)(i) sells one or more solar units; and
(iii) that generates electrical output that is furnished:
(A) to one or more residential units; or
(B) for the benefit of one or more residential units.
(e) "Residential unit" [
is as
] 
means the same as that term is
 defined in Section
59-10-1014
.
(f) "Solar unit" means a portion of the electrical output:
(i) of a qualifying solar project;
(ii) that a qualifying political subdivision sells to a purchaser; and
(iii) the purchase of which requires that the purchaser agree to bear a proportionate
share of the expense of the qualifying solar project:
(A) in accordance with a written agreement between the purchaser and the qualifying
political subdivision;
(B) in exchange for a credit on the purchaser's electrical bill; and
(C) as determined by a formula established by the qualifying political subdivision.
(2) Subject to Subsection (3), for taxable years beginning on or after January 1, 2009, a
purchaser may claim a nonrefundable tax credit equal to the product of:
(a) the amount the purchaser pays to purchase one or more solar units during the
taxable year; and
(b) 25%.
(3) For a taxable year, a tax credit under this section may not exceed $2,000 on a
return.
(4) A purchaser may carry forward a tax credit under this section for a period that does
not exceed the next four taxable years if:
(a) the purchaser is allowed to claim a tax credit under this section for a taxable year;
and
(b) the amount of the tax credit exceeds the purchaser's tax liability under this chapter
for that taxable year.
(5) Subject to Section 
59-10-1014
, a tax credit under this section is in addition to any
other tax credit allowed by this chapter.
[
(6) (a) On or before October 1, 2012, and every five years after October 1, 2012, the
Revenue and Taxation Interim Committee shall review the tax credit allowed 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 (6)(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 16. Section 
59-10-1025
 is amended to read:
59-10-1025.
Nonrefundable tax credit for investment in certain life science
establishments.
(1) As used in this section:
(a) "Commercial domicile" means the principal place from which the trade or business
of a Utah small business corporation is directed or managed.
(b) "Eligible claimant, estate, or trust" means the same as that term is defined in
Section 
63N-2-802
.
(c) "Life science establishment" means an establishment primarily engaged in the
development or manufacture of products in one or more of the following categories:
(i) biotechnologies;
(ii) medical devices;
(iii) medical diagnostics; and
(iv) pharmaceuticals.
(d) "Office" means the Governor's Office of Economic Development.
(e) "Pass-through entity" means the same as that term is defined in Section 
59-10-1402
.
(f) "Pass-through entity taxpayer" means the same as that term is defined in Section
59-10-1402
.
(g) "Qualifying ownership interest" means an ownership interest that is:
(i) (A) common stock;
(B) preferred stock; or
(C) an ownership interest in a pass-through entity;
(ii) originally issued to:
(A) an eligible claimant, estate, or trust; or
(B) a pass-through entity if the eligible claimant, estate, or trust that claims a tax credit
under this section was a pass-through entity taxpayer of the pass-through entity on the day on
which the qualifying ownership interest was issued and remains a pass-through entity taxpayer
of the pass-through entity until the last day of the taxable year for which the eligible claimant,
estate, or trust claims a tax credit under this section; and
(iii) issued:
(A) by a Utah small business corporation;
(B) on or after January 1, 2011; and
(C) for money or other property, except for stock or securities.
(h) (i) Except as provided in Subsection (1)(h)(ii), "Utah small business corporation"
means the same as that term is defined in Section 
59-10-1022
.
(ii) For purposes of this section, a corporation under Section 1244(c)(3)(A), Internal
Revenue Code, is considered to include a pass-through entity.
(2) Subject to the other provisions of this section, for a taxable year beginning on or
after January 1, 2011, an eligible claimant, estate, or trust that holds a tax credit certificate
issued to the eligible claimant, estate, or trust in accordance with Section 
63N-2-808
 for that
taxable year may claim a nonrefundable tax credit in an amount up to 35% of the purchase
price of a qualifying ownership interest in a Utah small business corporation by the claimant,
estate, or trust if:
(a) the qualifying ownership interest is issued by a Utah small business corporation that
is a life science establishment;
(b) the qualifying ownership interest in the Utah small business corporation is
purchased for at least $25,000;
(c) the eligible claimant, estate, or trust owned less than 30% of the qualifying
ownership interest of the Utah small business corporation at the time of the purchase of the
qualifying ownership interest; and
(d) on each day of the taxable year in which the purchase of the qualifying ownership
interest was made, the Utah small business corporation described in Subsection (2)(a) has at
least 50% of its employees in the state.
(3) Subject to Subsection (4), the tax credit under Subsection (2):
(a) may only be claimed by an eligible claimant, estate, or trust:
(i) for a taxable year for which the eligible claimant, estate, or trust holds a tax credit
certificate issued in accordance with Section 
63N-2-808
; and
(ii) subject to obtaining a tax credit certificate for each taxable year as required by
Subsection (3)(a)(i), for a period of three taxable years as follows:
(A) the tax credit in the taxable year in which the purchase of the qualifying ownership
interest was made may not exceed 10% of the purchase price of the qualifying ownership
interest;
(B) the tax credit in the taxable year after the taxable year described in Subsection
(3)(a)(ii)(A) may not exceed 10% of the purchase price of the qualifying ownership interest;
and
(C) the tax credit in the taxable year two years after the taxable year described in
Subsection (3)(a)(ii)(A) may not exceed 15% of the purchase price of the qualifying ownership
interest; and
(b) may not exceed the lesser of:
(i) the amount listed on the tax credit certificate issued in accordance with Section
63N-2-808
; or
(ii) $350,000 in a taxable year.
(4) An eligible claimant, estate, or trust may not claim a tax credit under this section
for a taxable year if the eligible claimant, estate, or trust:
(a) has sold any of the qualifying ownership interest during the taxable year; or
(b) does not hold a tax credit certificate for that taxable year that is issued to the
eligible claimant, estate, or trust by the office in accordance with Section 
63N-2-808
.
(5) If a Utah small business corporation in which an eligible claimant, estate, or trust
purchases a qualifying ownership interest fails, dissolves, or otherwise goes out of business, the
eligible claimant, estate, or trust may not claim both the tax credit provided in this section and
a capital loss on the qualifying ownership interest.
(6) If an eligible claimant is a pass-through entity taxpayer that files a return under
Chapter 7, Corporate Franchise and Income Taxes, the eligible claimant may claim the tax
credit under this section on the return filed under Chapter 7, Corporate Franchise and Income
Taxes.
(7) A claimant, estate, or trust may not carry forward or carry back a tax credit under
this section.
(8) (a) In accordance with Section 
59-10-137
, the Revenue and Taxation Interim
Committee shall study the tax credit allowed by this section and make recommendations
concerning whether the tax credit should be continued, modified, or repealed.
(b) Except as provided in Subsection (8)(c), for purposes of the study required by this
Subsection (8), the office shall provide the following information, if available to the office, to
the Office of the Legislative Fiscal Analyst by electronic means:
(i) the amount of tax credit that the office grants to each eligible business entity for
each taxable year;
(ii) the amount of eligible new state tax revenues generated by each eligible product or
project;
(iii) estimates for each of the next three calendar years of the following:
(A) the amount of tax credit that the office will grant;
(B) the amount of eligible new state tax revenues that will be generated; and
(C) the number of new incremental jobs within the state that will be generated;
(iv) the information contained in the office's latest report under Section 
63N-2-705
;
and
(v) any other information that the Office of the Legislative Fiscal Analyst requests.
(c) (i) In providing the information described in Subsection (8)(b), the office shall
redact information that identifies a recipient of a tax credit under this section.
(ii) If, notwithstanding the redactions made under Subsection (8)(c)(i), reporting the
information described in Subsection (8)(b) might disclose the identity of a recipient of a tax
credit, the office may file a request with the Revenue and Taxation Interim Committee to
provide the information described in Subsection (8)(b) in the aggregate for all entities that
receive the tax credit under this section.
(d) As part of the study required by this Subsection (8), the Office of the Legislative
Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
office under Subsection (8)(b).
(e) The Revenue and Taxation Interim Committee shall ensure that the
recommendations described in Subsection (8)(a) include an evaluation of:
(i) the cost of the tax credit under this section;
(ii) the purpose and effectiveness of the tax credit; and
(iii) the extent to which the state benefits from the tax credit.
Section 17. Section 
59-10-1029
 is amended to read:
59-10-1029.
Nonrefundable alternative energy development tax credit.
(1) As used in this section:
(a) "Alternative energy entity" [
is as
] 
means the same as that term is
 defined in Section
63M-4-502
.
(b) "Alternative energy project" [
is as
] 
means the same as that term is
 defined in
Section 
63M-4-502
.
(c) "Office" [
is as defined in
] 
means the Office of Energy Development created in
Section 
63M-4-401
.
(2) Subject to the other provisions of this section, an alternative energy entity may
claim a nonrefundable tax credit for alternative energy development as provided in this section.
(3) The tax credit under this section is the amount listed as the tax credit amount on a
tax credit certificate that the office issues under Title 63M, Chapter 4, Part 5, Alternative
Energy Development Tax Credit Act, to the alternative energy entity for the taxable year.
(4) An alternative energy entity may carry forward a tax credit under this section for a
period that does not exceed the next seven taxable years if:
(a) the alternative energy entity is allowed to claim a tax credit under this section for a
taxable year; and
(b) the amount of the tax credit exceeds the alternative energy entity's tax liability
under this chapter for that taxable year.
(5) (a) [
On or before October 1, 2017, and every five years after October 1, 2017
] 
In
accordance with Section 
59-10-137
, the Revenue and Taxation Interim Committee shall study
the tax credit allowed by this section and make recommendations [
to the Legislative
Management Committee
] concerning whether the tax credit should be continued, modified, or
repealed.
(b) [
For
] 
(i) Except as provided in Subsection (5)(b)(ii), for
 purposes of the study
required by this Subsection (5), the office shall provide the following information
, if available
to the office,
 to the [
Revenue and Taxation Interim Committee
] 
Office of the Legislative Fiscal
Analyst
 by electronic means:
[
(i)
] 
(A)
 the amount of tax credit that the office grants to each alternative energy entity
for each taxable year;
[
(ii)
] 
(B)
 the new state revenues generated by each alternative energy project;
[
(iii)
] 
(C)
 the information contained in the office's latest report [
to the Legislature
]
under Section 
63M-4-505
; and
[
(iv)
] 
(D)
 any other information that the [
Revenue and Taxation Interim Committee
]
Office of the Legislative Fiscal Analyst
 requests.
(ii) (A) In providing the information described in Subsection (5)(b)(i), the office shall
redact information that identifies a recipient of a tax credit under this section.
(B) If, notwithstanding the redactions made under Subsection (5)(b)(ii)(A), reporting
the information described in Subsection (5)(b)(i) might disclose the identity of a recipient of a
tax credit, the office may file a request with the Revenue and Taxation Interim Committee to
provide the information described in Subsection (5)(b)(i) in the aggregate for all alternative
energy entities that receive the tax credit under this section.
(c) As part of the study required by this Subsection (5), the Office of the Legislative
Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
office under Subsection (5)(b).
[
(c)
] 
(d)
 The Revenue and Taxation Interim Committee shall ensure that [
its
] 
the
recommendations [
under
] 
described in
 Subsection (5)(a) include an evaluation of:
(i) the cost of the tax credit to the state;
(ii) the purpose and effectiveness of the tax credit; and
(iii) the extent to which the state benefits from the tax credit.
Section 18. Section 
59-10-1030
 is amended to read:
59-10-1030.
Nonrefundable alternative energy manufacturing tax credit.
(1) As used in this section:
(a) "Alternative energy entity" means the same as that term is defined in Section
63N-2-702
.
(b) "Alternative energy manufacturing project" means the same as that term is defined
in Section 
63N-2-702
.
(c) "New incremental job with the state" means the same as that term is defined in
Section 
63N-2-702
.
(d) "New state revenues" means the same as that term is defined in Section 
63N-2-702
.
(e) "Office" means the Governor's Office of Economic Development 
created in Section
63N-1-201
.
(2) Subject to the other provisions of this section, an alternative energy entity may
claim a nonrefundable tax credit for alternative energy manufacturing as provided in this
section.
(3) The tax credit under this section is the amount listed as the tax credit amount on a
tax credit certificate that the office issues under Title 63N, Chapter 2, Part 7, Alternative
Energy Manufacturing Tax Credit Act, to the alternative energy entity for the taxable year.
(4) An alternative energy entity may carry forward a tax credit under this section for a
period that does not exceed the next seven taxable years if:
(a) the alternative energy entity is allowed to claim a tax credit under this section for a
taxable year; and
(b) the amount of the tax credit exceeds the alternative energy entity's tax liability
under this chapter for that taxable year.
(5) (a) [
On or before October 1, 2017, and every five years after October 1, 2017
] 
In
accordance with Section 
59-10-137
, the Revenue and Taxation Interim Committee shall study
the tax credit allowed by this section and make recommendations [
to the Legislative
Management Committee
] concerning whether the tax credit should be continued, modified, or
repealed.
(b) [
For
] 
Except as provided in Subsection (5)(c), for
 purposes of the study required by
this Subsection (5), the office shall provide the following information
, if available to the office,
to the [
Revenue and Taxation Interim Committee
] 
Office of the Legislative Fiscal Analyst
 by
electronic means:
(i) the amount of tax credit that the office grants to each alternative energy entity for
each taxable year;
(ii) the new state revenues generated by each alternative energy manufacturing project;
(iii) estimates for each of the next [
five
] 
three
 calendar years of the following:
(A) the amount of tax credits that the office will grant;
(B) the amount of new state revenues that will be generated; and
(C) the number of new incremental jobs within the state that will be generated;
(iv) the information contained in the office's latest report [
to the Legislature
] under
Section [
63N-2-705
] 
63N-1-301
; and
(v) any other information that the [
Revenue and Taxation Interim Committee
] 
Office of
the Legislative Fiscal Analyst
 requests.
(c) (i) In providing the information described in Subsection (5)(b), the office shall
redact information that identifies a recipient of a tax credit under this section.
(ii) If, notwithstanding the redactions made under Subsection (5)(c)(i), reporting the
information described in Subsection (5)(b) might disclose the identity of a recipient of a tax
credit, the office may file a request with the Revenue and Taxation Interim Committee to
provide the information described in Subsection (5)(b) in the aggregate for all alternative
energy entities that receive the tax credit under this section.
(d) As part of the study required by this Subsection (5), the Office of the Legislative
Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
office under Subsection (5)(b).
[
(c)
] 
(e)
 The Revenue and Taxation Interim Committee shall ensure that [
its
] 
the
recommendations [
under
] 
described in
 Subsection (5)(a) include an evaluation of:
(i) the cost of the tax credit to the state;
(ii) the purpose and effectiveness of the tax credit; and
(iii) the extent to which the state benefits from the tax credit.
Section 19. Section 
59-10-1034
 is amended to read:
59-10-1034.
Nonrefundable high cost infrastructure development tax credit.
(1) As used in this section:
(a) "High cost infrastructure project" means the same as that term is defined in Section
63M-4-602
.
(b) "Infrastructure cost-burdened entity" means the same as that term is defined in
Section 
63M-4-602
.
(c) "Infrastructure-related revenue" means the same as that term is defined in Section
63M-4-602
.
(d) "Office" means the Office of Energy Development created in Section 
63M-4-401
.
(2) Subject to the other provisions of this section, a claimant, estate, or trust that is an
infrastructure cost-burdened entity may claim a nonrefundable tax credit for development of a
high cost infrastructure project as provided in this section.
(3) The tax credit under this section is the amount listed as the tax credit amount on a
tax credit certificate that the office issues under Title 63M, Chapter 4, Part 6, High Cost
Infrastructure Development Tax Credit Act, to the infrastructure cost-burdened entity for the
taxable year.
(4) An infrastructure cost-burdened entity may carry forward a tax credit under this
section for a period that does not exceed the next seven taxable years if:
(a) the infrastructure cost-burdened entity is allowed to claim a tax credit under this
section for a taxable year; and
(b) the amount of the tax credit exceeds the infrastructure cost-burdened entity's tax
liability under this chapter for that taxable year.
(5) (a) [
On or before October 1, 2020, and every five years after October 1, 2020
] 
In
accordance with Section 
59-10-137
, the Revenue and Taxation Interim Committee shall study
the tax credit allowed by this section and make recommendations [
to the Legislative
Management Committee
] concerning whether the tax credit should be continued, modified, or
repealed.
(b) [
For
] 
(i) Except as provided in Subsection (5)(b)(ii), for
 purposes of the study
required by this Subsection (5), the office shall provide the following information
, if available
to the office,
 to the [
Revenue and Taxation Interim Committee
] 
Office of the Legislative Fiscal
Analyst
:
[
(i)
] 
(A)
 the amount of tax credit that the office grants to each infrastructure
cost-burdened entity for each taxable year;
[
(ii)
] 
(B)
 the infrastructure-related revenue generated by each high cost infrastructure
project;
[
(iii)
] 
(C)
 the information contained in the office's latest report [
to the Legislature
]
under Section 
63M-4-505
; and
[
(iv)
] 
(D)
 any other information that the [
Revenue and Taxation Interim Committee
]
Office of the Legislative Fiscal Analyst
 requests.
(ii) (A) In providing the information described in Subsection (5)(b)(i), the office shall
redact information that identifies a recipient of a tax credit under this section.
(B) If, notwithstanding the redactions made under Subsection (5)(b)(ii)(A), reporting
the information described in Subsection (5)(b)(i) might disclose the identity of a recipient of a
tax credit, the office may file a request with the Revenue and Taxation Interim Committee to
provide the information described in Subsection (5)(b)(i) in the aggregate for all infrastructure
cost-burdened entities that receive the tax credit under this section.
(c) As part of the study required by this Subsection (5), the Office of the Legislative
Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
office under Subsection (5)(b).
[
(c)
] 
(d)
 The Revenue and Taxation Interim Committee shall ensure that the [
Revenue
and Taxation Interim Committee's
] recommendations [
under
] 
described in
 Subsection (5)(a)
include an evaluation of:
(i) the cost of the tax credit to the state;
(ii) the purpose and effectiveness of the tax credit; and
(iii) the extent to which the state benefits from the tax credit.
Section 20. Section 
59-10-1037
 is amended to read:
59-10-1037.
Nonrefundable enterprise zone tax credit.
(1) As used in this section:
(a) "Business entity" means a claimant, estate, or trust that meets the definition of
"business entity" as that term is defined in Section 
63N-2-202
.
(b) "Office" means the Governor's Office of Economic Development created in Section
63N-1-201
.
(2) Subject to the provisions of this section, a business entity may claim a
nonrefundable enterprise zone tax credit as described in Section 
63N-2-213
.
(3) The enterprise zone tax credit under this section is the amount listed as the tax
credit amount on the tax credit certificate that the office issues to the business entity for the
taxable year.
(4) A business entity may carry forward a tax credit under this section for a period that
does not exceed the next three taxable years, if the amount of the tax credit exceeds the
business entity's tax liability under this chapter for that taxable year.
(5) A business entity may not claim or carry forward a tax credit available under this
part for a taxable year during which the business entity has claimed the targeted business
income tax credit available under Section 
63N-2-305
.
(6) (a) [
On or before October 1, 2018, and every five years after October 1, 2018
] 
In
accordance with Section 
59-10-137
, the Revenue and Taxation Interim Committee shall study
the tax credit allowed by this section and make recommendations [
to the Legislative
Management Committee
] concerning whether the tax credit should be continued, modified, or
repealed.
(b) [
For
] 
(i) Except as provided in Subsection (6)(b)(ii), for
 purposes of the study
required by this Subsection (6), the office shall provide by electronic means the following
information
, if available to the office,
 for each calendar year to the [
Revenue and Taxation
Interim Committee
] 
Office of the Legislative Fiscal Analyst
:
[
(i)
] 
(A)
 the amount of tax credits provided in each development zone;
[
(ii)
] 
(B)
 the number of new full-time employee positions reported to obtain tax credits
in each development zone;
[
(iii)
] 
(C)
 the amount of tax credits awarded for rehabilitating a building in each
development zone;
[
(iv)
] 
(D)
 the amount of tax credits awarded for investing in a plant, equipment, or
other depreciable property in each development zone;
[
(v)
] 
(E)
 the information related to the tax credit contained in the office's latest report
[
to the Legislature
] under Section 
63N-1-301
; and
[
(vi)
] 
(F)
 other information [
as requested by the Revenue and Taxation Interim
Committee
] 
that the Office of the Legislative Fiscal Analyst requests
.
(ii) (A) In providing the information described in Subsection (6)(b)(i), the office shall
redact information that identifies a recipient of a tax credit under this section.
(B) If, notwithstanding the redactions made under Subsection (6)(b)(ii)(A), reporting
the information described in Subsection (6)(b)(i) might disclose the identity of a recipient of a
tax credit, the office may file a request with the Revenue and Taxation Interim Committee to
provide the information described in Subsection (6)(b)(i) in the aggregate for all development
zones that receive the tax credit under this section.
(c) As part of the study required by this Subsection (6), the Office of the Legislative
Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
office under Subsection (6)(b).
[
(c)
] 
(d)
 The Revenue and Taxation Interim Committee shall ensure that [
its
] 
the
recommendations [
under
] 
described in
 Subsection (6)(a) include an evaluation of:
(i) the cost of the tax credit to the state;
(ii) the purpose and effectiveness of the tax credit; and
(iii) the extent to which the state benefits from the tax credit.
Section 21. Section 
59-10-1106
 is amended to read:
59-10-1106.
Refundable renewable energy systems tax credits -- Definitions --
Certification -- Rulemaking authority.
(1) As used in this section:
(a) "Active solar system" [
has the same meaning as
] 
means the same as that term is
defined in Section 
59-10-1014
.
(b) "Biomass system" [
has the same meaning as
] 
means the same as that term is
defined in Section 
59-10-1014
.
(c) "Commercial energy system" [
has the same meaning as
] 
means the same as that
term is
 defined in Section 
59-7-614
.
(d) "Commercial enterprise" [
has the same meaning as
] 
means the same as that term is
defined in Section 
59-7-614
.
(e) (i) "Commercial unit" [
has the same meaning as
] 
means the same as that term is
defined in Section 
59-7-614
.
(ii) Notwithstanding Subsection (1)(e)(i):
(A) with respect to an active solar system used for agricultural water pumping or a
wind system, each individual energy generating device is considered to be a commercial unit;
or
(B) if an energy system is the building or structure that a claimant, estate, or trust uses
to transact business, a commercial unit is the complete energy system itself.
(f) "Direct use geothermal system" [
has the same meaning as
] 
means the same as that
term is
 defined in Section 
59-10-1014
.
(g) "Geothermal electricity" [
has the same meaning as
] 
means the same as that term is
defined in Section 
59-10-1014
.
(h) "Geothermal energy" [
has the same meaning as
] 
means the same as that term is
defined in Section 
59-10-1014
.
(i) "Geothermal heat pump system" [
has the same meaning as
] 
means the same as that
term is
 defined in Section 
59-10-1014
.
(j) "Hydroenergy system" [
has the same meaning as
] 
means the same as that term is
defined in Section 
59-10-1014
.
(k) "Office" means the Office of Energy Development created in Section 
63M-4-401
.
(l) "Passive solar system" [
has the same meaning as
] 
means the same as that term is
defined in Section 
59-10-1014
.
(m) "Principal recovery portion" [
has the same meaning as
] 
means the same as that
term is
 defined in Section 
59-10-1014
.
(n) "Wind system" [
has the same meaning as
] 
means the same as that term is
 defined in
Section 
59-10-1014
.
(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 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;
(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).
(b) (i) Subject to Subsections (3)(b)(ii) through (v), the tax credit is equal to 10% of the
reasonable costs of the commercial energy system.
(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 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.
(v) The total amount of tax credit a claimant, estate, or trust may claim under this
Subsection (3) may not exceed $50,000 per commercial unit.
(c) (i) 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 may claim a tax credit
under this Subsection (3) if the claimant, estate, or trust confirms that the lessor irrevocably
elects not to claim the tax credit.
(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.
(iii) A claimant, estate, or trust described in Subsection (3)(c)(i) may claim a tax credit
under this Subsection (3) for a period that does not exceed seven taxable years after the date the
lease begins, as stated in the lease agreement.
(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 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 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).
(b) (i) Subject to Subsections (4)(b)(ii) and (iii), a tax credit under this Subsection (4)
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 (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.
(iii) A tax credit under this Subsection (4) may not be carried forward or 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 (4) if the claimant, estate, or
trust confirms that the lessor irrevocably elects not to claim the tax credit.
(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.
(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.
[
(10) (a) On or before October 1, 2017, and every five years 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 (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 22. Section 
59-10-1107
 is amended to read:
59-10-1107.
Refundable economic development tax credit.
(1) As used in this section:
(a) "Business entity" means a claimant, estate, or trust that meets the definition of
"business entity" as defined in Section 
63N-2-103
.
(b) "New incremental jobs" means the same as that term is defined in Section
63N-2-103
.
(c) "New state revenues" means the same as that term is defined in Section 
63N-2-103
.
(d) "Office" means the Governor's Office of Economic Development.
(2) Subject to the other provisions of this section, a business entity may claim a
refundable tax credit for economic development.
(3) The tax credit under this section is the amount listed as the tax credit amount on the
tax credit certificate that the office issues to the business entity for the taxable year.
(4) (a) In accordance with any rules prescribed by the commission under Subsection
(4)(b), the commission shall make a refund to a business entity that claims a tax credit under
this section if the amount of the tax credit exceeds the business entity's tax liability for a
taxable year.
(b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may make rules providing procedures for making a refund to a business entity as
required by Subsection (4)(a).
(5) (a) [
On or before October 1, 2013, and every five years after October 1, 2013
] 
In
accordance with Section 
59-10-137
, the Revenue and Taxation Interim Committee shall study
the tax credit allowed by this section and make recommendations [
to the Legislative
Management Committee
] concerning whether the tax credit should be continued, modified, or
repealed.
(b) [
For
] 
Except as provided in Subsection (5)(c), for
 purposes of the study required by
this Subsection (5), the office shall provide the following information
, if available to the office,
to the Revenue and Taxation Interim Committee by electronic means:
(i) the amount of tax credit the office grants to each taxpayer for each calendar year;
(ii) the criteria the office uses in granting a tax credit;
(iii) the new state revenues generated by each taxpayer for each calendar year;
(iv) estimates for each of the next [
five
] 
three
 calendar years of the following:
(A) the amount of tax credits that the office will grant;
(B) the amount of new state revenues that will be generated; and
(C) the number of new incremental jobs within the state that will be generated;
(v) the information contained in the office's latest report [
to the Legislature
] under
Section 
63N-2-106
; and
(vi) any other information that the Revenue and Taxation Interim Committee requests.
(c) (i) In providing the information described in Subsection (5)(b), the office shall
redact information that identifies a recipient of a tax credit under this section.
(ii) If, notwithstanding the redactions made under Subsection (5)(c)(i), reporting the
information described in Subsection (5)(b) might disclose the identity of a recipient of a tax
credit, the office may file a request with the Revenue and Taxation Interim Committee to
provide the information described in Subsection (5)(b) in the aggregate for all taxpayers that
receive the tax credit under this section.
[
(c)
] 
(d)
 The Revenue and Taxation Interim Committee shall ensure that [
its
] 
the
recommendations [
under
] 
described in
 Subsection (5)(a) include an evaluation of:
(i) the cost of the tax credit to the state;
(ii) the purpose and effectiveness of the tax credit; and
(iii) the extent to which the state benefits from the tax credit.
Section 23. Section 
59-10-1108
 is amended to read:
59-10-1108.
Refundable motion picture tax credit.
(1) As used in this section:
(a) "Motion picture company" means a claimant, estate, or trust that meets the
definition of a motion picture company under Section 
63N-8-102
.
(b) "Office" means the Governor's Office of Economic Development 
created in Section
63N-1-201
.
(c) "State-approved production" [
has the same meaning as
] 
means the same as that
term is
 defined in Section 
63N-8-102
.
(2) For 
a
 taxable [
years
] 
year
 beginning on or after January 1, 2009, a motion picture
company may claim a refundable tax credit for a state-approved production.
(3) The tax credit under this section is the amount listed as the tax credit amount on the
tax credit certificate that the office issues to a motion picture company under Section
63N-8-103
 for the taxable year.
(4) (a) In accordance with any rules prescribed by the commission under Subsection
(4)(b), the commission shall make a refund to a motion picture company that claims a tax
credit under this section if the amount of the tax credit exceeds the motion picture company's
tax liability for the taxable year.
(b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may make rules providing procedures for making a refund to a motion picture
company as required by Subsection (4)(a).
(5) (a) [
On or before October 1, 2014, and every five years after October 1, 2014
] 
In
accordance with Section 
59-10-137
, the Revenue and Taxation Interim Committee shall study
the tax credit allowed by this section and make recommendations [
to the Legislative
Management Committee
] concerning whether the tax credit should be continued, modified, or
repealed.
(b) [
For
] 
(i) Except as provided in Subsection (5)(b)(ii), for
 purposes of the study
required by this Subsection (5), the office shall provide the following information
, if available
to the office,
 to the [
Revenue and Taxation Interim Committee
] 
Office of the Legislative Fiscal
Analyst
 by electronic means:
[
(i)
] (A) the amount of tax credit the office grants to each taxpayer for each calendar
year; [
and
]
(B) estimates of the amount of tax credit that the office will grant for each of the next
[
five
] 
three
 calendar years;
[
(ii)
] 
(C)
 the criteria the office uses in granting a tax credit;
[
(iii)
] 
(D)
 the dollars left in the state, as defined in Section 
63N-8-102
, by each motion
picture company for each calendar year;
[
(iv)
] 
(E)
 the information contained in the office's latest report [
to the Legislature
]
under Section 
63N-8-105
; and
[
(v)
] 
(F)
 any other information [
requested by the Revenue and Taxation Interim
Committee
] 
that the Office of the Legislative Fiscal Analyst requests
.
(ii) (A) In providing the information described in Subsection (5)(b)(i), the office shall
redact information that identifies a recipient of a tax credit under this section.
(B) If, notwithstanding the redactions made under Subsection (5)(b)(ii)(A), reporting
the information described in Subsection (5)(b)(i) might disclose the identity of a recipient of a
tax credit, the office may file a request with the Revenue and Taxation Interim Committee to
provide the information described in Subsection (5)(b)(i) in the aggregate for all taxpayers that
receive the tax credit under this section.
(c) As part of the study required by this Subsection (5), the Office of the Legislative
Fiscal Analyst shall report to the Revenue and Taxation Interim Committee a summary and
analysis of the information provided to the Office of the Legislative Fiscal Analyst by the
office under Subsection (5)(b).
[
(c)
] 
(d)
 The Revenue and Taxation Interim Committee shall ensure that [
its
] 
the
recommendations [
under
] 
described in
 Subsection (5)(a) include an evaluation of:
(i) the cost of the tax credit to the state;
(ii) the effectiveness of the tax credit; and
(iii) the extent to which the state benefits from the tax credit.
Section 24. Section 
59-13-202
 is amended to read:
59-13-202.
Refund of tax for agricultural uses on individual income and
corporate franchise and income tax returns -- Application for permit for refund --
Division of Finance to pay claims -- Rules permitted to enforce part -- Penalties --
Revenue and Taxation Interim Committee study.
(1) As used in this section:
(a) (i) Except at provided in Subsection (1)(a)(ii), "claimant" means a resident or
nonresident person.
(ii) "Claimant" does not include an estate or trust.
(b) "Estate" means a nonresident estate or a resident estate.
(c) "Refundable tax credit" or "tax credit" means a tax credit that a claimant, estate, or
trust may claim:
(i) as provided by statute; and
(ii) regardless of whether, for the taxable year for which the claimant, estate, or trust
claims the tax credit, the claimant, estate, or trust has a tax liability under:
(A) Chapter 7, Corporate Franchise and Income Taxes; or
(B) Chapter 10, Individual Income Tax Act.
(d) "Trust" means a nonresident trust or a resident trust.
(2) Any claimant, estate, or trust that purchases and uses any motor fuel within the state
for the purpose of operating or propelling stationary farm engines and self-propelled farm
machinery used for nonhighway agricultural uses, and that has paid the tax on the motor fuel as
provided by this part, is entitled to a refund of the tax subject to the conditions and limitations
provided under this part.
(3) (a) A claimant, estate, or trust desiring a nonhighway agricultural use refund under
this part shall claim the refund as a refundable tax credit on the tax return the claimant, estate,
or trust files under:
(i) Chapter 7, Corporate Franchise and Income Taxes; or
(ii) Chapter 10, Individual Income Tax Act.
(b) A claimant, estate, or trust not subject to filing a tax return described in Subsection
(3)(a) shall obtain a permit and file claims on a calendar year basis.
(c) Any claimant, estate, or trust claiming a refundable tax credit under this section is
required to furnish any or all of the information outlined in this section upon request of the
commission.
(d) A refundable tax credit under this section is allowed only on purchases on which
tax is paid during the taxable year covered by the tax return.
(4) In order to obtain a permit for a refund of motor fuel tax paid, an application shall
be filed containing:
(a) the name of the claimant, estate, or trust;
(b) the claimant's, estate's, or trust's address;
(c) location and number of acres owned and operated, location and number of acres
rented and operated, the latter of which shall be verified by a signed statement from the legal
owner;
(d) number of acres planted to each crop, type of soil, and whether irrigated or dry; and
(e) make, size, and type of fuel used and power rating of each piece of equipment using
fuel. If the claimant, estate, or trust is an operator of self-propelled or tractor-pulled farm
machinery with which the claimant, estate, or trust works for hire doing custom jobs for other
farmers, the application shall include information the commission requires and shall all be
contained in, and be considered part of, the original application. The claimant, estate, or trust
shall also file with the application a certificate from the county assessor showing each piece of
equipment using fuel. This original application and all information contained in it constitutes a
permanent file with the commission in the name of the claimant, estate, or trust.
(5) A claimant, estate, or trust claiming the right to a refund of motor fuel tax paid shall
file a claim with the commission by April 15 of each year for the refund for the previous
calendar year. The claim shall state the name and address of the claimant, estate, or trust, the
number of gallons of motor fuel purchased for nonhighway agricultural uses, and the amount
paid for the motor fuel. The claimant, estate, or trust shall retain the original invoice to support
the claim. No more than one claim for a tax refund may be filed annually by each user of
motor fuel purchased for nonhighway agricultural uses.
(6) Upon commission approval of the claim for a refund, the Division of Finance shall
pay the amount found due to the claimant, estate, or trust. The total amount of claims for
refunds shall be paid from motor fuel taxes.
(7) The commission may refuse to accept as evidence of purchase or payment any
instruments that show alteration or that fail to indicate the quantity of the purchase, the price of
the motor fuel, a statement that the motor fuel is purchased for purposes other than
transportation, and the date of purchase and delivery. If the commission is not satisfied with
the evidence submitted in connection with the claim, the commission may reject the claim or
require additional evidence.
(8) A claimant, estate, or trust aggrieved by the decision of the commission with
respect to a refundable tax credit or refund may file a request for agency action, requesting a
hearing before the commission.
(9) A claimant, estate, or trust that makes any false claim, report, or statement, as
claimant, estate, trust, agent, or creditor, with intent to defraud or secure a refund to which the
claimant, estate, or trust is not entitled, is subject to the criminal penalties provided under
Section 
59-1-401
, and the commission shall initiate the filing of a complaint for alleged
violations of this part. In addition to these penalties, the claimant, estate, or trust may not
receive any refund as a claimant, estate, or trust or as a creditor of a claimant, estate, or trust for
refund for a period of five years.
(10) (a) In accordance with any rules prescribed by the commission under Subsection
(10)(b), the Division of Finance shall transfer at least annually from the Transportation Fund
into the Education Fund an amount equal to the amount of the refund claimed under this
section.
(b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may make rules providing procedures for:
(i) making a refund to a claimant, estate, or trust as required by Subsection (3)(a)(i);
(ii) making a transfer from the Transportation Fund into the Education Fund as
required by Subsection (10)(a); or
(iii) enforcing this part.
(11) (a) On or before November 30, 2017, and every three years after 2017, the
Revenue and Taxation Interim Committee shall review the tax credit provided by this section
and make recommendations concerning whether the tax credit should be continued, modified,
or repealed.
(b) In conducting the review required by Subsection (11)(a), the Revenue and Taxation
Interim Committee shall:
(i) schedule time on at least one committee agenda to conduct the review;
(ii) invite state agencies, individuals, and organizations concerned with the credit under
review to provide testimony;
(iii) ensure that the recommendations described in this section include an evaluation of:
(A) the cost of the tax credit to the state;
(B) the purpose and effectiveness of the tax credit; and
(C) the extent to which the state benefits from the tax credit; and
(iv) undertake other review efforts as determined by the chairs of the Revenue and
Taxation Interim Committee.
Section 25. Section 
63N-2-106
 is amended to read:
63N-2-106.
Reports -- Posting monthly and annual reports -- Audit and study of
tax credits.
(1) The office shall include the following information in the annual written report
described in Section 
63N-1-301
:
(a) the office's success in attracting new commercial projects to development zones
under this part and the corresponding increase in new incremental jobs;
(b) how many new incremental jobs and high paying jobs are employees of a company
that received tax credits under this part, including the number of employees who work for a
third-party rather than directly for a company, receiving the tax credits under this part;
(c) the estimated amount of tax credit commitments made by the office and the period
of time over which tax credits will be paid;
(d) the economic impact on the state from new state revenues and the provision of tax
credits under this part;
(e) the estimated costs and economic benefits of the tax credit commitments made by
the office;
(f) the actual costs and economic benefits of the tax credit commitments made by the
office; and
(g) tax credit commitments made by the office, with the associated calculation.
(2) Each month, the office shall post on its website and on a state website:
(a) the new tax credit commitments made by the office during the previous month; and
(b) the estimated costs and economic benefits of those tax credit commitments.
(3) (a) On or before November 1, 2014, and every three years after November 1, 2014,
the office shall:
(i) conduct an audit of the tax credits allowed under Section 
63N-2-105
;
(ii) study the tax credits allowed under Section 
63N-2-105
; and
(iii) make recommendations concerning whether the tax credits should be continued,
modified, or repealed.
(b) The audit shall include an evaluation of:
(i) the cost of the tax credits;
(ii) the purposes and effectiveness of the tax credits;
(iii) the extent to which the state benefits from the tax credits; and
(iv) the state's return on investment under this part measured by new state revenues,
compared with the costs of tax credits provided and GOED's expenses in administering this
part.
(c) The office shall provide the results of the audit described in this Subsection (3):
(i) in the written annual report described in Subsection (1); and
(ii) as part of the reviews described in Sections 
59-7-159
 and 
59-10-137
.
Section 26. Section 
63N-2-213
 is amended to read:
63N-2-213.
State tax credits.
(1) The office shall certify a business entity's eligibility for a tax credit described in this
section.
(2) A business entity seeking to receive a tax credit as provided in this section shall
provide the office with:
(a) an application for a tax credit certificate in a form approved by the office, including
a certification, by an officer of the business entity, of a signature on the application; and
(b) documentation that demonstrates the business entity has met the requirements to
receive the tax credit.
(3) If, after review of an application and documentation provided by a business entity
as described in Subsection (2), the office determines that the application and documentation are
inadequate to provide a reasonable justification for authorizing the tax credit, the office shall:
(a) deny the tax credit; or
(b) inform the business entity that the application or documentation was inadequate
and ask the business entity to submit additional documentation.
(4) If, after review of an application and documentation provided by a business entity
as described in Subsection (2), the office determines that the application and documentation
provide reasonable justification for authorizing a tax credit, the office shall:
(a) determine the amount of the tax credit to be granted to the business entity;
(b) issue a tax credit certificate to the business entity; and
(c) provide a duplicate copy of the tax credit certificate to the State Tax Commission.
(5) A business entity may not claim a tax credit under this section unless the business
entity has a tax credit certificate issued by the office.
(6) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
office shall make rules describing:
(a) the form and content of an application for a tax credit under this section;
(b) the documentation requirements for a business entity to receive a tax credit
certificate under this section; and
(c) administration of the program, including relevant timelines and deadlines.
(7) Subject to the limitations of Subsections (8) through (10), and if the requirements
of this part are met, the following nonrefundable tax credits against a tax under Title 59,
Chapter 7, Corporate Franchise and Income Taxes, or Title 59, Chapter 10, Individual Income
Tax Act, are applicable in an enterprise zone:
(a) a tax credit of $750 may be claimed by a business entity for each new full-time
employee position created within the enterprise zone;
(b) an additional $500 tax credit may be claimed if the new full-time employee position
created within the enterprise zone pays at least 125% of:
(i) the county average monthly nonagricultural payroll wage for the respective industry
as determined by the Department of Workforce Services; or
(ii) if the county average monthly nonagricultural payroll wage is not available for the
respective industry, the total average monthly nonagricultural payroll wage in the respective
county where the enterprise zone is located;
(c) an additional tax credit of $750 may be claimed if the new full-time employee
position created within the enterprise zone is in a business entity that adds value to agricultural
commodities through manufacturing or processing;
(d) an additional tax credit of $200 may be claimed for two consecutive years for each
new full-time employee position created within the enterprise zone that is filled by an
employee who is insured under an employer-sponsored health insurance program if the
employer pays at least 50% of the premium cost for the year for which the credit is claimed;
(e) a tax credit of 25% of the first $200,000 spent on rehabilitating a building in the
enterprise zone that has been vacant for two years or more; and
(f) an annual investment tax credit of 10% of the first $250,000 in investment, and 5%
of the next $1,000,000 qualifying investment in plant, equipment, or other depreciable
property.
(8) (a) Subject to the limitations of Subsection (8)(b), a business entity claiming a tax
credit under Subsections (7)(a) through (d) may claim the tax credit for no more than 30
full-time employee positions in a taxable year.
(b) A business entity that received a tax credit for one or more new full-time employee
positions under Subsections (7)(a) through (d) in a prior taxable year may claim a tax credit for
a new full-time employee position in a subsequent taxable year under Subsections (7)(a)
through (d) if:
(i) the business entity has created a new full-time position within the enterprise zone;
and
(ii) the total number of full-time employee positions at the business entity at any point
during the tax year for which the tax credit is being claimed is greater than the highest number
of full-time employee positions that existed at the business entity in the previous three taxable
years.
(c) Construction jobs are not eligible for the tax credits under Subsections (7)(a)
through (d).
(9) If the amount of a tax credit under this section exceeds a business entity's tax
liability under this chapter for a taxable year, the business entity may carry forward the amount
of the tax credit exceeding the liability for a period that does not exceed the next three taxable
years.
(10) Tax credits under Subsections (7)(a) through (f) may not be claimed by a business
entity primarily engaged in retail trade or by a public utilities business.
(11) A business entity that has no employees:
(a) may not claim tax credits under Subsections (7)(a) through (d); and
(b) may claim tax credits under Subsections (7)(e) through (f).
(12) A business entity may not claim or carry forward a tax credit available under this
part for a taxable year during which the business entity has claimed the targeted business
income tax credit available under Section 
63N-2-305
.
(13) (a) On or before November 30, 2018, and every three years after 2018, the
Revenue and Taxation Interim Committee shall review the tax credits provided by this section
and make recommendations concerning whether the tax credits should be continued, modified,
or repealed.
(b) In conducting the review required by Subsection (13)(a), the Revenue and Taxation
Interim Committee shall:
(i) schedule time on at least one committee agenda to conduct the review;
(ii) invite state agencies, individuals, and organizations concerned with the credits
under review to provide testimony;
(iii) ensure that the recommendations described in this section include an evaluation of:
(A) the cost of the tax credits to the state;
(B) the purpose and effectiveness of the tax credits; and
(C) the extent to which the state benefits from the tax credits; and
(iv) undertake other review efforts as determined by the chairs of the Revenue and
Taxation Interim Committee.
Section 27. Section 
63N-2-305
 is amended to read:
63N-2-305.
Targeted business income tax credit structure -- Duties of the local
zone administrator -- Duties of the State Tax Commission -- Revenue and Taxation
Interim Committee study.
(1) A business applicant that is certified under Subsection 
63N-2-304
(3) and issued a
targeted business tax credit eligibility form by the office under Subsection (8) may claim a
refundable tax credit:
(a) against the business applicant's tax liability under:
(i) Title 59, Chapter 7, Corporate Franchise and Income Taxes; or
(ii) Title 59, Chapter 10, Individual Income Tax Act; and
(b) subject to requirements and limitations provided by this part.
(2) The total amount of the targeted business income tax credits allowed under this part
for all business applicants may not exceed $300,000 in any fiscal year.
(3) (a) A targeted business income tax credit allowed under this part for each
community investment project provided by a business applicant may not:
(i) be claimed by a business applicant for more than seven consecutive taxable years
from the date the business applicant first qualifies for a targeted business income tax credit on
the basis of a community investment project;
(ii) be carried forward or carried back;
(iii) exceed $100,000 in total amount for the community investment project period
during which the business applicant is eligible to claim a targeted business income tax credit;
or
(iv) exceed in any year that the targeted business income tax credit is claimed the lesser
of:
(A) 50% of the maximum amount allowed by the local zone administrator; or
(B) the allocated cap amount determined by the office under Subsection 
63N-2-304
(5).
(b) A business applicant may apply to the local zone administrator to claim a targeted
business income tax credit allowed under this part for each community investment project
provided by the business applicant as the basis for its eligibility for a targeted business income
tax credit.
(4) Subject to other provisions of this section, the local zone administrator shall
establish for each business applicant that qualifies for a targeted business income tax credit:
(a) criteria for maintaining eligibility for the targeted business income tax credit that
are reasonably related to the community investment project that is the basis for the business
applicant's targeted business income tax credit;
(b) the maximum amount of the targeted business income tax credit the business
applicant is allowed for the community investment project period;
(c) the time period over which the total amount of the targeted business income tax
credit may be claimed;
(d) the maximum amount of the targeted business income tax credit that the business
applicant will be allowed to claim each year; and
(e) requirements for a business applicant to report to the local zone administrator
specifying:
(i) the frequency of the business applicant's reports to the local zone administrator,
which shall be made at least quarterly; and
(ii) the information needed by the local zone administrator to monitor the business
applicant's compliance with this Subsection (4) or Section 
63N-2-304
 that shall be included in
the report.
(5) In accordance with Subsection (4)(e), a business applicant allowed a targeted
business income tax credit under this part shall report to the local zone administrator.
(6) The amount of a targeted business income tax credit that a business applicant is
allowed to claim for a taxable year shall be reduced by 25% for each quarter in which the office
or the local zone administrator determines that the business applicant has failed to comply with
a requirement of Subsection (3) or Section 
63N-2-304
.
(7) The office or local zone administrator may audit a business applicant to ensure:
(a) eligibility for a targeted business income tax credit; or
(b) compliance with Subsection (3) or Section 
63N-2-304
.
(8) The office shall issue a targeted business income tax credit eligibility form in a
form jointly developed by the State Tax Commission and the office no later than 30 days after
the last day of the business applicant's taxable year showing:
(a) the maximum amount of the targeted business income tax credit that the business
applicant is eligible for that taxable year;
(b) any reductions in the maximum amount of the targeted business income tax credit
because of failure to comply with a requirement of Subsection (3) or Section 
63N-2-304
;
(c) the allocated cap amount that the business applicant may claim for that taxable
year; and
(d) the actual amount of the targeted business income tax credit that the business
applicant may claim for that taxable year.
(9) (a) A business applicant shall retain the targeted business income tax credit
eligibility form provided by the office under this Subsection (9).
(b) The State Tax Commission may audit a business applicant to ensure:
(i) eligibility for a targeted business income tax credit; or
(ii) compliance with Subsection (3) or Section 
63N-2-304
.
(10) (a) On or before November 30, 2018, and every three years after 2018, the
Revenue and Taxation Interim Committee shall review the tax credit provided by this section
and make recommendations concerning whether the tax credit should be continued, modified,
or repealed.
(b) In conducting the review required by Subsection (10)(a), the Revenue and Taxation
Interim Committee shall:
(i) schedule time on at least one committee agenda to conduct the review;
(ii) invite state agencies, individuals, and organizations concerned with the credit under
review to provide testimony;
(iii) ensure that the recommendations described in this section include an evaluation of:
(A) the cost of the tax credit to the state;
(B) the purpose and effectiveness of the tax credit; and
(C) the extent to which the state benefits from the tax credit; and
(iv) undertake other review efforts as determined by the chairs of the Revenue and
Taxation Interim Committee.
Section 28. Section 
63N-2-810
 is amended to read:
63N-2-810.
Reports on tax credit certificates.
[
(1)
] The office shall include the following information in the annual written report
described in Section 
63N-1-301
:
[
(a)
] 
(1)
 the total amount listed on tax credit certificates the office issues under this
part;
[
(b)
] 
(2)
 the criteria that the office uses in prioritizing the issuance of tax credits
amongst tax credit applicants under this part; and
[
(c)
] 
(3)
 the economic impact on the state related to providing tax credits under this
part.
[
(2) (a) On or before November 1, 2016, and every five years after November 1, 2016,
the Revenue and Taxation Interim Committee shall:
]
[
(i) study the tax credit allowed under Section 
59-10-1025
; and
]
[
(ii) make recommendations concerning whether the tax credit should be continued,
modified, or repealed.
]
[
(b) The study under Subsection (2)(a) shall include an evaluation of:
]
[
(i) the cost of the tax credit under Section 
59-10-1025
;
]
[
(ii) the purposes and effectiveness of the tax credit; and
]
[
(iii) the extent to which the state benefits from the tax credit.
]
[
(c) For purposes of the study required by this Subsection (2), the office shall provide
the following information to the Revenue and Taxation Interim Committee by electronic
means:
]
[
(i) the amount of tax credits that the office grants to each eligible business entity for
each taxable year;
]
[
(ii) the amount of eligible new state tax revenues generated by each eligible product or
project;
]
[
(iii) estimates for each of the next five calendar years of the following:
]
[
(A) the amount of tax credits that the office will grant;
]
[
(B) the amount of eligible new state tax revenues that will be generated; and
]
[
(C) the number of new incremental jobs within the state that will be generated;
]
[
(iv) the information contained in the office's latest report to the Legislature under
Section 
63N-2-705
; and
]
[
(v) any other information that the Revenue and Taxation Interim Committee requests.
]
Section 29. 
Effective date.
If approved by two-thirds of all the members elected to each house, this bill takes effect
upon approval by the governor, or the day following the constitutional time limit of Utah
Constitution, Article VII, Section 8, without the governor's signature, or in the case of a veto,
the date of veto override.