Rep. Norm Thurston — Voting Record

Bill

Number

S.B. 141 Third Substitute (2018GS)

Sponsor

Sen. Bramble, C.

Final action

Governor Signed 3/22/2018

Outcome

Became law — signed by Gov. Gary R. Herbert

Summary

What it does

• This bill:
• modifies the periods during which installation of a residential photovoltaic energy system qualifies for a specified tax credit;
• modifies a provision relating to a corporate income tax credit for the installation of a residential energy system; and
• provides for the repeal of provisions relating to net metering of electricity.

Every vote on this bill

Bill text

ELECTRIC ENERGY AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Curtis S. Bramble
House Sponsor: 
Francis D. Gibson
LONG TITLE
General Description:
This bill modifies provisions relating to electric energy.
Highlighted Provisions:
This bill:
▸ modifies the periods during which installation of a residential photovoltaic energy
system qualifies for a specified tax credit;
▸ modifies a provision relating to a corporate income tax credit for the installation of
a residential energy system; and
▸ provides for the repeal of provisions relating to net metering of electricity.
Money Appropriated in this Bill:
None
Other Special Clauses:
This bill provides retrospective operation.
Utah Code Sections Affected:
AMENDS:
59-7-614
, as last amended by Laws of Utah 2016, Third Special Session, Chapter 1
59-10-1014
, as last amended by Laws of Utah 2017, Chapter 33
63I-1-254
, as last amended by Laws of Utah 2016, Chapter 393
Be it enacted by the Legislature of the state of Utah:
Section 1. 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) "Photovoltaic system" means an active solar system that generates electricity from
sunlight.
[
(m)
] 
(n)
 (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)
] 
(o)
 "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)
] 
(p)
 (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)
] 
(q)
 "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)
] 
(iv) and, as applicable, Subsection
(3)(c) or (d)
, 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)
] 
(c)
 The total amount of tax credit a taxpayer may claim under this Subsection (3)
for a residential energy system, other than a photovoltaic system,
 may not exceed $2,000 per
residential unit.
(d) The total amount of tax credit a taxpayer may claim under this Subsection (3) for a
photovoltaic system may not exceed:
(i) for a system installed on or after January 1, 2018 but on or before December 31,
2020, $1,600;
(ii) for a system installed on or after January 1, 2021 but on or before December 31,
2021, $1,200;
(iii) for a system installed on or after January 1, 2022 but on or before December 31,
2022, $800;
(iv) for a system installed on or after January 1, 2023 but on or before December 31,
2023, $400; and
(v) for a system installed on or after January 1, 2024, $0. 
[
(c)
] 
(e)
 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.
Section 2. 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) "Photovoltaic system" means an active solar system that generates electricity from
sunlight.
(k) (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.
(l) "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.
(m) (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
.
(n) "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) For a taxable year beginning on or [
before December 31, 2021
] 
after January 1,
, a claimant, estate, or trust may claim a nonrefundable tax credit under this section with
respect to a residential unit the claimant, estate, or trust owns or uses if:
(a) the claimant, estate, or trust:
(i) purchases and completes a residential energy system to supply all or part of the
energy required for the residential unit; or
(ii) participates in the financing of a residential energy system to supply all or part of
the energy required for the residential unit;
(b) the residential energy system is installed on or after January 1, 2007; and
(c) the claimant, estate, or trust obtains a written certification from the office in
accordance with Subsection (5).
(4) (a) For a residential energy system, other than a photovoltaic system, the tax credit
described in this section is equal to the lesser of:
(i) 25% of the reasonable costs, including installation costs, of each residential energy
system installed with respect to each residential unit the claimant, estate, or trust owns or uses;
and
(ii) $2,000.
(b) Subject to Subsection (5)(d), for a residential energy system that is a photovoltaic
system, the tax credit described in this section is equal to the lesser of:
(i) 25% of the reasonable costs, including installation costs, of each system installed
with respect to each residential unit the claimant, estate, or trust owns or uses; or
(ii) (A) for a system installed on or after January 1, 2007, but 
on or
 before December
31, 2017, $2,000;
(B) for a system installed on or after January 1, 2018, but on or before December 31,
[
] 
, $1,600;
(C) for a system installed on or after January 1, [
] 
, but on or before
December 31, [
] 
, $1,200;
(D) for a system installed on or after January 1, [
] 
, but on or before
December 31, [
] 
, $800; [
and
]
(E) for a system installed on or after January 1, [
] 
, but on or before
December 31, [
] 
, $400[
.
]
; and
 (F) for a system installed on or after January 1, 2024, $0. 
(c) (i) The office shall determine the amount of the tax credit that a claimant, estate, or
trust may claim and list that amount on the written certification that the office issues under
Subsection (5).
(ii) The claimant, estate, or trust may claim the tax credit in the amount listed on the
written certification that the office issues under Subsection (5).
(d) A claimant, estate, or trust may claim a tax credit under Subsection (3) for the
taxable year in which the residential energy system is installed.
(e) If the amount of a tax credit listed on the written certification exceeds a claimant's,
estate's, or trust's tax liability under this chapter for a taxable year, the claimant, estate, or trust
may carry forward the amount of the tax credit exceeding the liability for a period that does not
exceed the next four taxable years.
(f) 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.
(g) (i) Subject to Subsections (4)(g)(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 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 (4)(g)(i) that leases a residential
energy system may claim as a tax credit under Subsection (3) only the principal recovery
portion of the lease payments.
(iii) A claimant, estate, or trust described in Subsection (4)(g)(i) that leases a
residential energy system may claim a tax credit under Subsection (3) for a period that does not
exceed seven taxable years after the date the lease begins, as stated in the lease agreement.
(h) If a claimant, estate, or trust sells a residential unit to another person before the
claimant, estate, or trust claims the tax credit under 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.
(5) (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 (5)(b)(ii); and
(ii) for purposes of determining the amount of a tax credit that a claimant, estate, or
trust may receive under Subsection (4), 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
.
(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.
Section 3. Section 
63I-1-254
 is amended to read:
63I-1-254.
Repeal dates -- Title 54.
(1) The language of Subsection 
54-4-13.4
(1)(a)(ii) after "do not exceed $5,000,000 in
any calendar year" is repealed July 1, 2018.
(2) Subsection 
54-7-13.5
(2)(d) is repealed on December 31, 2019. 
(3) Title 54, Chapter 15, Net Metering of Electricity, is repealed January 1, 2036.
Section 4. 
Retrospective operation.
This bill has retrospective operation for a taxable year beginning on or after January 1,
2018.