Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 130 Third Substitute (2023GS)

Sponsor

Rep. Shipp, R.P.

Final action

Governor Signed 3/22/2023

Outcome

Became law — signed by Gov. Spencer J. Cox

Summary

What it does

• This bill:
• defines terms;
• enacts a nonrefundable and a refundable individual income tax credit for expenses related to the adoption of a child, for which eligibility depends on the individual's income;
• provides for apportionment of the tax credit;
• requires the Department of Workforce Services to certify certain information regarding an individual's eligibility for an adoption expense tax credit and to share that information with the State Tax Commission;
• repeals an individual income tax credit for adoption of a child with special needs; and
• makes technical and conforming changes.

Every vote on this bill

Bill text

ADOPTION TAX CREDIT
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Rex P. Shipp
Senate Sponsor: 
Wayne A. Harper
LONG TITLE
General Description:
This bill enacts individual income tax credits for adoption expenses.
Highlighted Provisions:
This bill:
▸ defines terms;
▸ enacts a nonrefundable and a refundable individual income tax credit for expenses
related to the adoption of a child, for which eligibility depends on the individual's
income;
▸ provides for apportionment of the tax credit;
▸ requires the Department of Workforce Services to certify certain information
regarding an individual's eligibility for an adoption expense tax credit and to share
that information with the State Tax Commission;
▸ repeals an individual income tax credit for adoption of a child with special needs;
and
▸ makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
This bill provides retrospective operation.
Utah Code Sections Affected:
AMENDS:
59-10-137
, as last amended by Laws of Utah 2022, Chapter 264
59-10-1002.2
, as last amended by Laws of Utah 2022, Chapter 12
ENACTS:
35A-1-111
, Utah Code Annotated 1953
59-10-1046
, Utah Code Annotated 1953
59-10-1102.1
, Utah Code Annotated 1953
59-10-1114
, Utah Code Annotated 1953
REPEALS:
59-10-1104
, as last amended by Laws of Utah 2022, Chapter 335
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
35A-1-111
 is enacted to read:
 35A-1-111.
Certification for adoption tax credit.
(1) An individual who seeks to claim a tax credit under Section 
59-10-1046
 or
59-10-1114
 shall apply to the department for a certification that:
(a) the individual did not receive any state or federal assistance described in Subsection
59-10-1046
(1)(e)(ii)(A), (B), (C), or (D) during the taxable year in which the adoption is
finalized; and
(b) the individual finalized an adoption during the taxable year for which the individual
applies for a certification.
(2) An individual who applies for a certification under this section shall sign an
information release authorizing the department to disclose the individual's name and
identifying information to the State Tax Commission in accordance with Subsection (5).
(3) The department shall issue the certification on a form approved by the State Tax
Commission.
(4) An individual who receives a certification under this section shall retain the
certification for the same time period a person is required to keep books and records under
Section 
59-1-1406
.
(5) (a) The department shall provide the State Tax Commission with an electronic
report stating the name and identifying information of each individual to whom the department
issued a certification under this section for the taxable year.
(b) The department shall provide the report described in Subsection (5)(a) on or before
January 31 of the year following the year in which the department issued the certifications.
Section 2. Section 
59-10-137
 is amended 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 Opportunity to present a summary
and analysis of the information for each tax credit regarding which the Governor's Office of
Economic Opportunity 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)
] 
(ix)
 Section 
59-10-1105
; and
[
(xi)
] 
(x)
 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 
59-10-1022
;
(v) Section 
59-10-1023
;
(vi) Section 
59-10-1028
;
(vii) Section 
59-10-1034
;
(viii) Section 
59-10-1037
; and
(ix) 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 
59-10-1014
;
(iii) Section 
59-10-1017
;
(iv) Section 
59-10-1018
;
(v) Section 
59-10-1019
;
(vi) Section 
59-10-1024
;
(vii) Section 
59-10-1029
;
(viii) Section 
59-10-1036
;
(ix) Section 
59-10-1106
; and
(x) 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 3. Section 
59-10-1002.2
 is amended to read:
59-10-1002.2.
Apportionment of tax credits.
(1) A nonresident individual or a part-year resident individual that claims a tax credit
in accordance with Section 
59-10-1017
, 
59-10-1018
, 
59-10-1019
, 
59-10-1022
, 
59-10-1023
,
59-10-1024
, 
59-10-1028
, 
59-10-1042
, 
59-10-1043
, [
or
] 
59-10-1044
, or 
59-10-1046
 may only
claim an apportioned amount of the tax credit equal to:
(a) for a nonresident individual, the product of:
(i) the state income tax percentage for the nonresident individual; and
(ii) the amount of the tax credit that the nonresident individual would have been
allowed to claim but for the apportionment requirements of this section; or
(b) for a part-year resident individual, the product of:
(i) the state income tax percentage for the part-year resident individual; and
(ii) the amount of the tax credit that the part-year resident individual would have been
allowed to claim but for the apportionment requirements of this section.
(2) A nonresident estate or trust that claims a tax credit in accordance with Section
59-10-1017
, 
59-10-1020
, 
59-10-1022
, 
59-10-1024
, or 
59-10-1028
 may only claim an
apportioned amount of the tax credit equal to the product of:
(a) the state income tax percentage for the nonresident estate or trust; and
(b) the amount of the tax credit that the nonresident estate or trust would have been
allowed to claim but for the apportionment requirements of this section.
Section 4. Section 
59-10-1046
 is enacted to read:
 59-10-1046.
Nonrefundable adoption expense tax credit.
(1) As used in this section:
(a) "Adoption expense" means a reasonable and necessary adoption fee, court cost,
attorney fee, or other expense that is:
(i) directly related to, and for the primary purpose of, adoption of a qualifying child
through a domestic adoption;
(ii) not incurred in violation of federal or state law or in carrying out any surrogate
parenting arrangement; and
(iii) not paid or reimbursed by any employer or state assistance program.
(b) "Domestic adoption" means an adoption of a child who is a United States citizen or
a resident of the United States or its possessions before the adoption effort begins.
(c) (i) "Qualifying child" means an individual who is under 18 years old.
(ii) "Qualifying child" does not include an individual who is a child of the claimant's
spouse.
(d) "Qualifying claimant" means a claimant:
(i) whose adjusted gross income on a federal tax return is:
(A) for a claimant who files the federal tax return jointly with the claimant's spouse,
$55,000 or more but less than $110,000; or
(B) for a claimant who files the federal tax return other than jointly, $27,500 or more
but less than $55,000;
(ii) who did not, and if the claimant is married, whose spouse did not, receive state or
federal assistance during the taxable year in which the adoption is finalized; and
(iii) who applies for and receives a certification described in Section 
35A-1-111
 from
the Department of Workforce Services.
(e) (i) "State or federal assistance" means public funds that are:
(A) expended for the benefit of an individual in need of financial, medical, food,
housing, or related assistance;
(B) means tested; and
(C) provided by a state or the federal government.
(ii) "State or federal assistance" includes:
(A) the Medicaid program, as defined in Section 
26-18-2
;
(B) the Employment Support Act described in Title 35A, Chapter 3, Employment
Support Act;
(C) the Children's Health Insurance Program created in Title 26, Chapter 40, Utah
Children's Health Insurance Act;
(D) the Supplemental Nutrition Assistance Program established in 7 U.S.C. Chapter
51, Supplemental Nutrition Assistance Program;
(E) the Women, Infants, and Children Program established in 42 U.S.C. Sec. 1786;
(F) the federal Social Security Act; and
(G) housing assistance.
(iii) "State or federal assistance" does not include an income tax credit, subtraction, or
deduction.
(2) Subject to Section 
59-10-1002.2
, a qualifying claimant may claim, in the taxable
year in which the adoption is finalized, a nonrefundable tax credit equal to the lesser of:
(a) $3,500; or
(b) the amount of the qualifying claimant's adoption expenses.
(3) A qualifying claimant may carry forward, to the next three taxable years, the
amount of any tax credit that exceeds the qualifying claimant's tax liability for the taxable year.
(4) A qualifying claimant may not claim a credit under this section to the extent that
the qualifying claimant claims a federal tax credit under 26 U.S.C. Sec. 23 for the same
adoption expense.
(5) A qualifying claimant who is married may claim a tax credit under this section only
if the qualifying claimant and the qualifying claimant's spouse file a joint federal income tax
return.
Section 5. Section 
59-10-1102.1
 is enacted to read:
 59-10-1102.1.
Apportionment of tax credit.
 A nonresident individual or a part-year resident individual who claims a tax credit in
accordance with Section 
59-10-1114
 may claim only an apportioned amount of the tax credit
equal to the product of:
 (1) the state income tax percentage for the nonresident individual or the state income
tax percentage for the part-year resident individual; and
(2) the amount of the tax credit that the nonresident individual or the part-year resident
individual would have been allowed to claim but for the apportionment requirement of this
section.
Section 6. Section 
59-10-1114
 is enacted to read:
 59-10-1114.
Refundable adoption expense tax credit.
(1) As used in this section:
(a) "Adoption expense" means the same as that term is defined in Section 
59-10-1046
.
(b) "Domestic adoption" means the same as that term is defined in Section 
59-10-1046
.
(c) "Qualifying child" means the same as that term is defined in Section 
59-10-1046
.
(d) "Qualifying claimant" means a claimant:
(i) whose adjusted gross income is:
(A) for a claimant who files a federal income tax return jointly with the claimant's
spouse, less than $55,000; and
(B) for a claimant who files a federal income tax return other than jointly, less than
$27,500;
(ii) who did not, and if the claimant is married, whose spouse did not, receive state or
federal assistance during the taxable year in which the adoption is finalized; and
(iii) who applies for and receives a certification described in Section 
35A-1-111
 from
the Department of Workforce Services.
(e) "State or federal assistance" means the same as that term is defined in Section
59-10-1046
.
(2) (a) Subject to Section 
59-10-1102.1
 and other provisions of this Subsection (2), a
qualifying claimant is eligible to claim a refundable tax credit equal to the lesser of:
(i) $3,500; or
(ii) the amount of the qualifying claimant's adoption expenses.
(b) A qualifying claimant who claims the tax credit described in Subsection (2)(a) shall
claim the tax credit for the taxable year in which the adoption is finalized.
(3) A qualifying claimant may not claim a credit under this section to the extent that
the qualifying claimant claims a federal tax credit under 26 U.S.C. Sec. 23 for the same
adoption expense.
(4) A qualifying claimant who is married may claim a tax credit under this section only
if the qualifying claimant and the qualifying claimant's spouse file a joint federal income tax
return.
Section 7. 
Repealer.
This bill repeals:
Section 
59-10-1104
,
Tax credit for adoption of a child who has a special need.
Section 8. 
Retrospective operation.
(1) Except as provided in Subsection (2), this bill has retrospective operation for a
taxable year beginning on or after January 1, 2023.
 (2) Section 
35A-1-111
 has retrospective operation to January 1, 2023.