Enrolled Copy H.B. 264
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Tax Incentives Amendments
2025 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Kay J. Christofferson
Senate Sponsor: Brady Brammer
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LONG TITLE
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General Description:
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This bill modifies and repeals provisions related to income tax incentives.
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Highlighted Provisions:
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This bill:
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▸ limits the eligibility for claiming the corporate or individual income tax credit for clean
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energy systems to systems that are placed in service before January 1, 2028; and
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▸ repeals the individual income tax credit for qualifying solar projects and the corporate and
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individual income tax credits for alternative energy development.
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Money Appropriated in this Bill:
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None
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Other Special Clauses:
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This bill provides retrospective operation.
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Utah Code Sections Affected:
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AMENDS:
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59-7-614, as last amended by Laws of Utah 2024, Chapter 53
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59-10-1014, as last amended by Laws of Utah 2024, Chapter 53
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59-10-1106, as last amended by Laws of Utah 2024, Chapter 53
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REPEALS:
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59-7-614.7, as last amended by Laws of Utah 2023, Chapter 482
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59-10-1024, as last amended by Laws of Utah 2021, Chapter 280
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59-10-1029, as last amended by Laws of Utah 2023, Chapter 482
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Be it enacted by the Legislature of the state of Utah:
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Section 1. Section 59-7-614 is amended to read:
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59-7-614 . Clean energy systems tax credits -- Definitions -- Certification -- H.B. 264 Enrolled Copy
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Rulemaking authority.
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(1) As used in this section:
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(a)(i) "Active solar system" means a system of equipment that is capable of:
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(A) collecting and converting incident solar radiation into thermal, mechanical, or
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electrical energy; and
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(B) transferring a form of energy described in Subsection (1)(a)(i)(A) by a
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separate apparatus to storage or to the point of use.
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(ii) "Active solar system" includes water heating, space heating or cooling, and
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electrical or mechanical energy generation.
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(b) "Biomass system" means a system of apparatus and equipment for use in:
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(i) converting material into biomass energy, as defined in Section 59-12-102; and
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(ii) transporting the biomass energy by separate apparatus to the point of use or
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storage.
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(c) "Clean energy source" means the same as that term is defined in Section 54-17-601.
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(d) "Commercial energy system" means a system that is:
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(i)(A) an active solar system;
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(B) a biomass system;
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(C) a direct use geothermal system;
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(D) a geothermal electricity system;
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(E) a geothermal heat pump system;
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(F) a hydroenergy system;
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(G) a passive solar system; or
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(H) a wind system;
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(ii) located in the state; and
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(iii) used:
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(A) to supply energy to a commercial unit; or
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(B) as a commercial enterprise.
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(e) "Commercial enterprise" means an entity, the purpose of which is to produce:
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(i) electrical, mechanical, or thermal energy for sale from a commercial energy
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system; or
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(ii) hydrogen for sale from a hydrogen production system.
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(f)(i) "Commercial unit" means a building or structure that an entity uses to transact
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business.
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(ii) Notwithstanding Subsection (1)(f)(i):
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(A) with respect to an active solar system used for agricultural water pumping or a
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wind system, each individual energy generating device is considered to be a
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commercial unit; or
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(B) if an energy system is the building or structure that an entity uses to transact
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business, a commercial unit is the complete energy system itself.
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(g) "Direct use geothermal system" means a system of apparatus and equipment that
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enables the direct use of geothermal energy to meet energy needs, including heating a
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building, an industrial process, and aquaculture.
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(h) "Geothermal electricity" means energy that is:
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(i) contained in heat that continuously flows outward from the earth; and
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(ii) used as a sole source of energy to produce electricity.
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(i) "Geothermal energy" means energy generated by heat that is contained in the earth.
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(j) "Geothermal heat pump system" means a system of apparatus and equipment that:
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(i) enables the use of thermal properties contained in the earth at temperatures well
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below 100 degrees Fahrenheit; and
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(ii) helps meet heating and cooling needs of a structure.
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(k) "Hydroenergy system" means a system of apparatus and equipment that is capable of:
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(i) intercepting and converting kinetic water energy into electrical or mechanical
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energy; and
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(ii) transferring this form of energy by separate apparatus to the point of use or
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storage.
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(l) "Hydrogen production system" means a system of apparatus and equipment, located
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in this state, that uses:
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(i) electricity from a clean energy source to create hydrogen gas from water,
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regardless of whether the clean energy source is at a separate facility or the same
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facility as the system of apparatus and equipment; or
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(ii) uses renewable natural gas to produce hydrogen gas.
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(m) "Office" means the Office of Energy Development created in Section 79-6-401.
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(n)(i) "Passive solar system" means a direct thermal system that utilizes the structure
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of a building and the structure's operable components to provide for collection,
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storage, and distribution of heating or cooling during the appropriate times of the
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year by utilizing the climate resources available at the site.
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(ii) "Passive solar system" includes those portions and components of a building that
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are expressly designed and required for the collection, storage, and distribution of
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solar energy.
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(o) "Photovoltaic system" means an active solar system that generates electricity from
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sunlight.
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(p)(i) "Principal recovery portion" means the portion of a lease payment that
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constitutes the cost a person incurs in acquiring a commercial energy system.
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(ii) "Principal recovery portion" does not include:
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(A) an interest charge; or
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(B) a maintenance expense.
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(q) "Residential energy system" means the following used to supply energy to or for a
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residential unit:
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(i) an active solar system;
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(ii) a biomass system;
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(iii) a direct use geothermal system;
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(iv) a geothermal heat pump system;
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(v) a hydroenergy system;
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(vi) a passive solar system; or
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(vii) a wind system.
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(r)(i) "Residential unit" means a house, condominium, apartment, or similar dwelling
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unit that:
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(A) is located in the state; and
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(B) serves as a dwelling for a person, group of persons, or a family.
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(ii) "Residential unit" does not include property subject to a fee under:
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(A) Section 59-2-405;
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(B) Section 59-2-405.1;
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(C) Section 59-2-405.2;
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(D) Section 59-2-405.3; or
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(E) Section 72-10-110.5.
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(s) "Wind system" means a system of apparatus and equipment that is capable of:
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(i) intercepting and converting wind energy into mechanical or electrical energy; and
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(ii) transferring these forms of energy by a separate apparatus to the point of use,
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sale, or storage.
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(2) A taxpayer may claim an energy system tax credit as provided in this section against a
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tax due under this chapter for [a taxable year] an energy system that is completed and
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placed in service before January 1, 2028.
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(3)(a) Subject to the other provisions of this Subsection (3), a taxpayer may claim a
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nonrefundable tax credit under this Subsection (3) with respect to a residential unit
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the taxpayer owns or uses if:
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(i) the taxpayer:
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(A) purchases and completes a residential energy system to supply all or part of
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the energy required for the residential unit; or
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(B) participates in the financing of a residential energy system to supply all or part
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of the energy required for the residential unit; and
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(ii) the taxpayer obtains a written certification from the office in accordance with
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Subsection (8).
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(b)(i) Subject to Subsections (3)(b)(ii) through (iv) and, as applicable, Subsection
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(3)(c) or (d), the tax credit is equal to 25% of the reasonable costs of each
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residential energy system installed with respect to each residential unit the
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taxpayer owns or uses.
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(ii) A tax credit under this Subsection (3) may include installation costs.
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(iii) A taxpayer may claim a tax credit under this Subsection (3) for the taxable year
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in which the residential energy system is completed and placed in service.
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(iv) If the amount of a tax credit under this Subsection (3) exceeds a taxpayer's tax
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liability under this chapter for a taxable year, the taxpayer may carry forward the
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amount of the tax credit exceeding the liability for a period that does not exceed
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the next four taxable years.
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(c) The total amount of tax credit a taxpayer may claim under this Subsection (3) for a
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residential energy system, other than a photovoltaic system, may not exceed $2,000
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per residential unit.
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(d) The total amount of tax credit a taxpayer may claim under this Subsection (3) for a
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photovoltaic system may not exceed:
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(i) for a system installed on or after January 1, 2018, but on or before December 31,
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2020, $1,600;
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(ii) for a system installed on or after January 1, 2021, but on or before December 31,
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2021, $1,200;
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(iii) for a system installed on or after January 1, 2022, but on or before December 31,
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2022, $800;
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(iv) for a system installed on or after January 1, 2023, but on or before December 31,
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2023, $400; and
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(v) for a system installed on or after January 1, 2024, $0.
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(e) If a taxpayer sells a residential unit to another person before the taxpayer claims the
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tax credit under this Subsection (3):
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(i) the taxpayer may assign the tax credit to the other person; and
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(ii)(A) if the other person files a return under this chapter, the other person may
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claim the tax credit under this section as if the other person had met the
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requirements of this section to claim the tax credit; or
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(B) if the other person files a return under Chapter 10, Individual Income Tax Act,
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the other person may claim the tax credit under Section 59-10-1014 as if the
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other person had met the requirements of Section 59-10-1014 to claim the tax
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credit.
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(4)(a) Subject to the other provisions of this Subsection (4), a taxpayer may claim a
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refundable tax credit under this Subsection (4) with respect to a commercial energy
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system if:
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(i) the commercial energy system does not use:
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(A) wind, geothermal electricity, solar, or biomass equipment capable of
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producing a total of 660 or more kilowatts of electricity; or
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(B) solar equipment capable of producing 2,000 or more kilowatts of electricity;
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(ii) the taxpayer purchases or participates in the financing of the commercial energy
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system;
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(iii)(A) the commercial energy system supplies all or part of the energy required
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by commercial units owned or used by the taxpayer; or
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(B) the taxpayer sells all or part of the energy produced by the commercial energy
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system as a commercial enterprise;
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(iv) the taxpayer has not claimed and will not claim a tax credit under Subsection (7)
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for hydrogen production using electricity for which the taxpayer claims a tax
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credit under this Subsection (4); and
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(v) the taxpayer obtains a written certification from the office in accordance with
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Subsection (8).
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(b)(i) Subject to Subsections (4)(b)(ii) through (iv), the tax credit is equal to 10% of
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the reasonable costs of the commercial energy system.
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(ii) A tax credit under this Subsection (4) may include installation costs.
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(iii) A taxpayer is eligible to claim a tax credit under this Subsection (4) for the
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taxable year in which the commercial energy system is completed and placed in
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service.
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(iv) The total amount of tax credit a taxpayer may claim under this Subsection (4)
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may not exceed $50,000 per commercial unit.
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(c)(i) Subject to Subsections (4)(c)(ii) and (iii), a taxpayer that is a lessee of a
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commercial energy system installed on a commercial unit may claim a tax credit
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under this Subsection (4) if the taxpayer confirms that the lessor irrevocably elects
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not to claim the tax credit.
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(ii) A taxpayer described in Subsection (4)(c)(i) may claim as a tax credit under this
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Subsection (4) only the principal recovery portion of the lease payments.
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(iii) A taxpayer described in Subsection (4)(c)(i) may claim a tax credit under this
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Subsection (4) for a period that does not exceed seven taxable years after the day
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on which the lease begins, as stated in the lease agreement.
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(5)(a) Subject to the other provisions of this Subsection (5), a taxpayer may claim a
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refundable tax credit under this Subsection (5) with respect to a commercial energy
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system if:
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(i) the commercial energy system uses wind, geothermal electricity, or biomass
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equipment capable of producing a total of 660 or more kilowatts of electricity;
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(ii)(A) the commercial energy system supplies all or part of the energy required by
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commercial units owned or used by the taxpayer; or
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(B) the taxpayer sells all or part of the energy produced by the commercial energy
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system as a commercial enterprise;
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(iii) the taxpayer has not claimed and will not claim a tax credit under Subsection (7)
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for hydrogen production using electricity for which the taxpayer claims a tax
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credit under this Subsection (5); and
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(iv) the taxpayer obtains a written certification from the office in accordance with
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Subsection (8).
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(b)(i) Subject to Subsection (5)(b)(ii), a tax credit under this Subsection (5) is equal
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to the product of:
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(A) 0.35 cents; and
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(B) the kilowatt hours of electricity produced and used or sold during the taxable
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year.
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(ii) A taxpayer is eligible to claim a tax credit under this Subsection (5) for
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production occurring during a period of 48 months beginning with the month in
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which the commercial energy system is placed in commercial service.
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(c) A taxpayer that is a lessee of a commercial energy system installed on a commercial
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unit may claim a tax credit under this Subsection (5) if the taxpayer confirms that the
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lessor irrevocably elects not to claim the tax credit.
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(6)(a) Subject to the other provisions of this Subsection (6), a taxpayer may claim a
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refundable tax credit as provided in this Subsection (6) if:
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(i) the taxpayer owns a commercial energy system that uses solar equipment capable
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of producing a total of 660 or more kilowatts of electricity;
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(ii)(A) the commercial energy system supplies all or part of the energy required by
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commercial units owned or used by the taxpayer; or
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(B) the taxpayer sells all or part of the energy produced by the commercial energy
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system as a commercial enterprise;
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(iii) the taxpayer does not claim a tax credit under Subsection (4) and has not claimed
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and will not claim a tax credit under Subsection (7) for hydrogen production using
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electricity for which a taxpayer claims a tax credit under this Subsection (6); and
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(iv) the taxpayer obtains a written certification from the office in accordance with
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Subsection (8).
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(b)(i) Subject to Subsection (6)(b)(ii), a tax credit under this Subsection (6) is equal
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to the product of:
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(A) 0.35 cents; and
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(B) the kilowatt hours of electricity produced and used or sold during the taxable
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year.
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(ii) A taxpayer is eligible to claim a tax credit under this Subsection (6) for
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production occurring during a period of 48 months beginning with the month in
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which the commercial energy system is placed in commercial service.
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(c) A taxpayer that is a lessee of a commercial energy system installed on a commercial
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unit may claim a tax credit under this Subsection (6) if the taxpayer confirms that the
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lessor irrevocably elects not to claim the tax credit.
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(7)(a) A taxpayer may claim a refundable tax credit as provided in this Subsection (7) if:
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(i) the taxpayer owns a hydrogen production system;
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(ii) the hydrogen production system is completed and placed in service on or after
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January 1, 2022;
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(iii) the taxpayer sells as a commercial enterprise, or supplies for the taxpayer's own
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use in commercial units, the hydrogen produced from the hydrogen production
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system;
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(iv) the taxpayer has not claimed and will not claim a tax credit under Subsection (4),
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(5), or (6) or Section 59-7-626 for electricity or hydrogen used to meet the
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requirements of this Subsection (7); and
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(v) the taxpayer obtains a written certification from the office in accordance with
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Subsection (8).
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(b)(i) Subject to Subsections (7)(b)(ii) and (iii), a tax credit under this Subsection (7)
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is equal to the product of:
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(A) $0.12; and
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(B) the number of kilograms of hydrogen produced during the taxable year.
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(ii) A taxpayer may not receive a tax credit under this Subsection (7) for more than
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5,600 metric tons of hydrogen per taxable year.
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(iii) A taxpayer is eligible to claim a tax credit under this Subsection (7) for
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production occurring during a period of 48 months beginning with the month in
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which the hydrogen production system is placed in commercial service.
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(8)(a) Before a taxpayer may claim a tax credit under this section, the taxpayer shall
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obtain a written certification from the office.
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(b) The office shall issue a taxpayer a written certification if the office determines that:
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(i) the taxpayer meets the requirements of this section to receive a tax credit; and
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(ii) the residential energy system, the commercial energy system, or the hydrogen
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production system with respect to which the taxpayer seeks to claim a tax credit:
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(A) has been completely installed;
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(B) is a viable system for saving or producing energy from clean resources; and
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(C) is safe, reliable, efficient, and technically feasible to ensure that the residential
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energy system, the commercial energy system, or the hydrogen production
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system uses the state's clean and nonrenewable energy resources in an
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appropriate and economic manner.
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(c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
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office may make rules:
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(i) for determining whether a residential energy system, a commercial energy system,
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or a hydrogen production system meets the requirements of Subsection (8)(b)(ii);
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and
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(ii) for purposes of a tax credit under Subsection (3) or (4), establishing the
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reasonable costs of a residential energy system or a commercial energy system, as
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an amount per unit of energy production.
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(d) A taxpayer that obtains a written certification from the office shall retain the
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certification for the same time period a person is required to keep books and records
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under Section 59-1-1406.
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(e) The office shall submit to the commission an electronic list that includes:
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(i) the name and identifying information of each taxpayer to which the office issues a
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written certification; and
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(ii) for each taxpayer:
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(A) the amount of the tax credit listed on the written certification; and
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(B) the date the clean energy system was installed.
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(9) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
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commission may make rules to address the certification of a tax credit under this section.
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(10) A tax credit under this section is in addition to any tax credits provided under the laws
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or rules and regulations of the United States.
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(11) A taxpayer may not claim or carry forward a tax credit described in this section in a
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taxable year during which the taxpayer claims or carries forward a tax credit under
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Section 59-7-614.7.
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Section 2. Section 59-10-1014 is amended to read:
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59-10-1014 . Nonrefundable clean energy systems tax credits -- Definitions --
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Certification -- Rulemaking authority.
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(1) As used in this section:
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(a)(i) "Active solar system" means a system of equipment that is capable of:
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(A) collecting and converting incident solar radiation into thermal, mechanical, or
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electrical energy; and
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(B) transferring a form of energy described in Subsection (1)(a)(i)(A) by a
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separate apparatus to storage or to the point of use.
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(ii) "Active solar system" includes water heating, space heating or cooling, and
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electrical or mechanical energy generation.
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(b) "Biomass system" means a system of apparatus and equipment for use in:
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(i) converting material into biomass energy, as defined in Section 59-12-102; and
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(ii) transporting the biomass energy by separate apparatus to the point of use or
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storage.
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(c) "Direct use geothermal system" means a system of apparatus and equipment that
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enables the direct use of geothermal energy to meet energy needs, including heating a
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building, an industrial process, and aquaculture.
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(d) "Geothermal electricity" means energy that is:
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(i) contained in heat that continuously flows outward from the earth; and
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(ii) used as a sole source of energy to produce electricity.
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(e) "Geothermal energy" means energy generated by heat that is contained in the earth.
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(f) "Geothermal heat pump system" means a system of apparatus and equipment that:
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(i) enables the use of thermal properties contained in the earth at temperatures well
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below 100 degrees Fahrenheit; and
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(ii) helps meet heating and cooling needs of a structure.
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(g) "Hydroenergy system" means a system of apparatus and equipment that is capable of:
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(i) intercepting and converting kinetic water energy into electrical or mechanical
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energy; and
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(ii) transferring this form of energy by separate apparatus to the point of use or
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storage.
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(h) "Office" means the Office of Energy Development created in Section 79-6-401.
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(i)(i) "Passive solar system" means a direct thermal system that utilizes the structure
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of a building and its operable components to provide for collection, storage, and
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distribution of heating or cooling during the appropriate times of the year by
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utilizing the climate resources available at the site.
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(ii) "Passive solar system" includes those portions and components of a building that
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are expressly designed and required for the collection, storage, and distribution of
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solar energy.
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(j) "Photovoltaic system" means an active solar system that generates electricity from
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sunlight.
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(k)(i) "Principal recovery portion" means the portion of a lease payment that
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constitutes the cost a person incurs in acquiring a residential energy system.
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(ii) "Principal recovery portion" does not include:
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(A) an interest charge; or
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(B) a maintenance expense.
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(l) "Residential energy system" means the following used to supply energy to or for a
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residential unit:
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(i) an active solar system;
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(ii) a biomass system;
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(iii) a direct use geothermal system;
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(iv) a geothermal heat pump system;
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(v) a hydroenergy system;
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(vi) a passive solar system; or
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(vii) a wind system.
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(m)(i) "Residential unit" means a house, condominium, apartment, or similar
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dwelling unit that:
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(A) is located in the state; and
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(B) serves as a dwelling for a person, group of persons, or a family.
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(ii) "Residential unit" does not include property subject to a fee under:
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(A) Section 59-2-405;
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(B) Section 59-2-405.1;
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(C) Section 59-2-405.2;
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(D) Section 59-2-405.3; or
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(E) Section 72-10-110.5.
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(n) "Wind system" means a system of apparatus and equipment that is capable of:
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(i) intercepting and converting wind energy into mechanical or electrical energy; and
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(ii) transferring these forms of energy by a separate apparatus to the point of use or
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storage.
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(2) A claimant, estate, or trust may claim an energy system tax credit as provided in this
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section against a tax due under this chapter for [a taxable year] an energy system that is
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completed and placed in service before January 1, 2028.
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(3) For a taxable year beginning on or after January 1, 2007, a claimant, estate, or trust may
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claim a nonrefundable tax credit under this section with respect to a residential unit the
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claimant, estate, or trust owns or uses if:
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(a) the claimant, estate, or trust:
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(i) purchases and completes a residential energy system to supply all or part of the
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energy required for the residential unit; or
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(ii) participates in the financing of a residential energy system to supply all or part of
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the energy required for the residential unit;
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(b) the residential energy system is installed on or after January 1, 2007; and
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(c) the claimant, estate, or trust obtains a written certification from the office in
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accordance with Subsection (5).
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(4)(a) For a residential energy system, other than a photovoltaic system, the tax credit
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described in this section is equal to the lesser of:
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(i) 25% of the reasonable costs, including installation costs, of each residential
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energy system installed with respect to each residential unit the claimant, estate, or
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trust owns or uses; and
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(ii) $2,000.
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(b) Subject to Subsection (5)(d), for a residential energy system that is a photovoltaic
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system, the tax credit described in this section is equal to the lesser of:
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(i) 25% of the reasonable costs, including installation costs, of each system installed
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with respect to each residential unit the claimant, estate, or trust owns or uses; or
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(ii)(A) for a system installed on or after January 1, 2007, but on or before
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December 31, 2017, $2,000;
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(B) for a system installed on or after January 1, 2018, but on or before December
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31, 2020, $1,600;
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(C) for a system installed on or after January 1, 2021, but on or before December
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31, 2021, $1,200;
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(D) for a system installed on or after January 1, 2022, but on or before December
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31, 2022, $800;
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(E) for a system installed on or after January 1, 2023, but on or before December
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31, 2023, $400; and
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(F) for a system installed on or after January 1, 2024, $0.
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(c)(i) The office shall determine the amount of the tax credit that a claimant, estate, or
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trust may claim and list that amount on the written certification that the office
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issues under Subsection (5).
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(ii) The claimant, estate, or trust may claim the tax credit in the amount listed on the
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written certification that the office issues under Subsection (5).
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(d) A claimant, estate, or trust may claim a tax credit under Subsection (3) for the
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taxable year in which the residential energy system is installed.
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(e) If the amount of a tax credit listed on the written certification exceeds a claimant's,
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estate's, or trust's tax liability under this chapter for a taxable year, the claimant,
430
estate, or trust may carry forward the amount of the tax credit exceeding the liability
431
for a period that does not exceed the next four taxable years.
432
(f) A claimant, estate, or trust may claim a tax credit with respect to additional
433
residential energy systems or parts of residential energy systems for a subsequent
434
taxable year if the total amount of tax credit the claimant, estate, or trust claims does
435
not exceed $2,000 per residential unit.
436
(g)(i) Subject to Subsections (4)(g)(ii) and (iii), a claimant, estate, or trust that leases
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437
a residential energy system installed on a residential unit may claim a tax credit
438
under Subsection (3) if the claimant, estate, or trust confirms that the lessor
439
irrevocably elects not to claim the tax credit.
440
(ii) A claimant, estate, or trust described in Subsection (4)(g)(i) that leases a
441
residential energy system may claim as a tax credit under Subsection (3) only the
442
principal recovery portion of the lease payments.
443
(iii) A claimant, estate, or trust described in Subsection (4)(g)(i) that leases a
444
residential energy system may claim a tax credit under Subsection (3) for a period
445
that does not exceed seven taxable years after the date the lease begins, as stated
446
in the lease agreement.
447
(h) If a claimant, estate, or trust sells a residential unit to another person before the
448
claimant, estate, or trust claims the tax credit under Subsection (3):
449
(i) the claimant, estate, or trust may assign the tax credit to the other person; and
450
(ii)(A) if the other person files a return under Chapter 7, Corporate Franchise and
451
Income Taxes, the other person may claim the tax credit as if the other person
452
had met the requirements of Section 59-7-614 to claim the tax credit; or
453
(B) if the other person files a return under this chapter, the other person may claim
454
the tax credit under this section as if the other person had met the requirements
455
of this section to claim the tax credit.
456
(5)(a) Before a claimant, estate, or trust may claim a tax credit under this section, the
457
claimant, estate, or trust shall obtain a written certification from the office.
458
(b) The office shall issue a claimant, estate, or trust a written certification if the office
459
determines that:
460
(i) the claimant, estate, or trust meets the requirements of this section to receive a tax
461
credit; and
462
(ii) the office determines that the residential energy system with respect to which the
463
claimant, estate, or trust seeks to claim a tax credit:
464
(A) has been completely installed;
465
(B) is a viable system for saving or producing energy from clean resources; and
466
(C) is safe, reliable, efficient, and technically feasible to ensure that the residential
467
energy system uses the state's renewable and nonrenewable energy resources in
468
an appropriate and economic manner.
469
(c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
470
office may make rules:
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471
(i) for determining whether a residential energy system meets the requirements of
472
Subsection (5)(b)(ii); and
473
(ii) for purposes of determining the amount of a tax credit that a claimant, estate, or
474
trust may receive under Subsection (4), establishing the reasonable costs of a
475
residential energy system, as an amount per unit of energy production.
476
(d) A claimant, estate, or trust that obtains a written certification from the office shall
477
retain the certification for the same time period a person is required to keep books
478
and records under Section 59-1-1406.
479
(e) The office shall submit to the commission an electronic list that includes:
480
(i) the name and identifying information of each claimant, estate, or trust to which the
481
office issues a written certification; and
482
(ii) for each claimant, estate, or trust:
483
(A) the amount of the tax credit listed on the written certification; and
484
(B) the date the clean energy system was installed.
485
(6) A tax credit under this section is in addition to any tax credits provided under the laws
486
or rules and regulations of the United States.
487
(7) A purchaser of one or more solar units that claims a tax credit under Section 59-10-1024
488
for the purchase of the one or more solar units may not claim a tax credit under this
489
section for that purchase.
490
Section 3. Section 59-10-1106 is amended to read:
491
59-10-1106 . Refundable clean energy systems tax credits -- Definitions --
492
Certification -- Rulemaking authority.
493
(1) As used in this section:
494
(a) "Active solar system" means the same as that term is defined in Section 59-10-1014.
495
(b) "Biomass system" means the same as that term is defined in Section 59-10-1014.
496
(c) "Commercial energy system" means the same as that term is defined in Section
497
59-7-614.
498
(d) "Commercial enterprise" means the same as that term is defined in Section 59-7-614.
499
(e) "Commercial unit" means the same as that term is defined in Section 59-7-614.
500
(f) "Direct use geothermal system" means the same as that term is defined in Section
501
59-10-1014.
502
(g) "Geothermal electricity" means the same as that term is defined in Section
503
59-10-1014.
504
(h) "Geothermal energy" means the same as that term is defined in Section 59-10-1014.
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505
(i) "Geothermal heat pump system" means the same as that term is defined in Section
506
59-10-1014.
507
(j) "Hydroenergy system" means the same as that term is defined in Section 59-10-1014.
508
(k) "Hydrogen production system" means the same as that term is defined in Section
509
59-7-614.
510
(l) "Office" means the Office of Energy Development created in Section 79-6-401.
511
(m) "Passive solar system" means the same as that term is defined in Section 59-10-1014.
512
(n) "Principal recovery portion" means the same as that term is defined in Section
513
59-10-1014.
514
(o) "Wind system" means the same as that term is defined in Section 59-10-1014.
515
(2) A claimant, estate, or trust may claim an energy system tax credit as provided in this
516
section against a tax due under this chapter for [a taxable year] an energy system that is
517
completed and placed in service before January 1, 2028.
518
(3)(a) Subject to the other provisions of this Subsection (3), a claimant, estate, or trust
519
may claim a refundable tax credit under this Subsection (3) with respect to a
520
commercial energy system if:
521
(i) the commercial energy system does not use:
522
(A) wind, geothermal electricity, solar, or biomass equipment capable of
523
producing a total of 660 or more kilowatts of electricity; or
524
(B) solar equipment capable of producing 2,000 or more kilowatts of electricity;
525
(ii) the claimant, estate, or trust purchases or participates in the financing of the
526
commercial energy system;
527
(iii)(A) the commercial energy system supplies all or part of the energy required
528
by commercial units owned or used by the claimant, estate, or trust; or
529
(B) the claimant, estate, or trust sells all or part of the energy produced by the
530
commercial energy system as a commercial enterprise;
531
(iv) the claimant, estate, or trust has not claimed and will not claim a tax credit under
532
Subsection (6) for hydrogen production using electricity for which the claimant,
533
estate, or trust claims a tax credit under this Subsection (3); and
534
(v) the claimant, estate, or trust obtains a written certification from the office in
535
accordance with Subsection (7).
536
(b)(i) Subject to Subsections (3)(b)(ii) through (iv), the tax credit is equal to 10% of
537
the reasonable costs of the commercial energy system.
538
(ii) A tax credit under this Subsection (3) may include installation costs.
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539
(iii) A claimant, estate, or trust is eligible to claim a tax credit under this Subsection
540
(3) for the taxable year in which the commercial energy system is completed and
541
placed in service.
542
(iv) The total amount of tax credit a claimant, estate, or trust may claim under this
543
Subsection (3) may not exceed $50,000 per commercial unit.
544
(c)(i) Subject to Subsections (3)(c)(ii) and (iii), a claimant, estate, or trust that is a
545
lessee of a commercial energy system installed on a commercial unit may claim a
546
tax credit under this Subsection (3) if the claimant, estate, or trust confirms that
547
the lessor irrevocably elects not to claim the tax credit.
548
(ii) A claimant, estate, or trust described in Subsection (3)(c)(i) may claim as a tax
549
credit under this Subsection (3) only the principal recovery portion of the lease
550
payments.
551
(iii) A claimant, estate, or trust described in Subsection (3)(c)(i) may claim a tax
552
credit under this Subsection (3) for a period that does not exceed seven taxable
553
years after the day on which the lease begins, as stated in the lease agreement.
554
(4)(a) Subject to the other provisions of this Subsection (4), a claimant, estate, or trust
555
may claim a refundable tax credit under this Subsection (4) with respect to a
556
commercial energy system if:
557
(i) the commercial energy system uses wind, geothermal electricity, or biomass
558
equipment capable of producing a total of 660 or more kilowatts of electricity;
559
(ii)(A) the commercial energy system supplies all or part of the energy required by
560
commercial units owned or used by the claimant, estate, or trust; or
561
(B) the claimant, estate, or trust sells all or part of the energy produced by the
562
commercial energy system as a commercial enterprise;
563
(iii) the claimant, estate, or trust has not claimed and will not claim a tax credit under
564
Subsection (6) for hydrogen production using electricity for which the claimant,
565
estate, or trust claims a tax credit under this Subsection (4); and
566
(iv) the claimant, estate, or trust obtains a written certification from the office in
567
accordance with Subsection (7).
568
(b)(i) Subject to Subsection (4)(b)(ii), a tax credit under this Subsection (4) is equal
569
to the product of:
570
(A) 0.35 cents; and
571
(B) the kilowatt hours of electricity produced and used or sold during the taxable
572
year.
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573
(ii) A claimant, estate, or trust is eligible to claim a tax credit under this Subsection
574
(4) for production occurring during a period of 48 months beginning with the
575
month in which the commercial energy system is placed in commercial service.
576
(c) A claimant, estate, or trust that is a lessee of a commercial energy system installed on
577
a commercial unit may claim a tax credit under this Subsection (4) if the claimant,
578
estate, or trust confirms that the lessor irrevocably elects not to claim the tax credit.
579
(5)(a) Subject to the other provisions of this Subsection (5), a claimant, estate, or trust
580
may claim a refundable tax credit as provided in this Subsection (5) if:
581
(i) the claimant, estate, or trust owns a commercial energy system that uses solar
582
equipment capable of producing a total of 660 or more kilowatts of electricity;
583
(ii)(A) the commercial energy system supplies all or part of the energy required by
584
commercial units owned or used by the claimant, estate, or trust; or
585
(B) the claimant, estate, or trust sells all or part of the energy produced by the
586
commercial energy system as a commercial enterprise;
587
(iii) the claimant, estate, or trust does not claim a tax credit under Subsection (3);
588
(iv) the claimant, estate, or trust has not claimed and will not claim a tax credit under
589
Subsection (6) for hydrogen production using electricity for which a taxpayer
590
claims a tax credit under this Subsection (5); and
591
(v) the claimant, estate, or trust obtains a written certification from the office in
592
accordance with Subsection (7).
593
(b)(i) Subject to Subsection (5)(b)(ii), a tax credit under this Subsection (5) is equal
594
to the product of:
595
(A) 0.35 cents; and
596
(B) the kilowatt hours of electricity produced and used or sold during the taxable
597
year.
598
(ii) A claimant, estate, or trust is eligible to claim a tax credit under this Subsection
599
(5) for production occurring during a period of 48 months beginning with the
600
month in which the commercial energy system is placed in commercial service.
601
(c) A claimant, estate, or trust that is a lessee of a commercial energy system installed on
602
a commercial unit may claim a tax credit under this Subsection (5) if the claimant,
603
estate, or trust confirms that the lessor irrevocably elects not to claim the tax credit.
604
(6)(a) A claimant, estate, or trust may claim a refundable tax credit as provided in this
605
Subsection (6) if:
606
(i) the claimant, estate, or trust owns a hydrogen production system;
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607
(ii) the hydrogen production system is completed and placed in service on or after
608
January 1, 2022;
609
(iii) the claimant, estate, or trust sells as a commercial enterprise, or supplies for the
610
claimant's, estate's, or trust's own use in commercial units, the hydrogen produced
611
from the hydrogen production system;
612
(iv) the claimant, estate, or trust has not claimed and will not claim a tax credit under
613
Subsection (3), (4), or (5) for electricity used to meet the requirements of this
614
Subsection (6); and
615
(v) the claimant, estate, or trust obtains a written certification from the office in
616
accordance with Subsection (7).
617
(b)(i) Subject to Subsections (6)(b)(ii) and (iii), a tax credit under this Subsection (6)
618
is equal to the product of:
619
(A) $0.12; and
620
(B) the number of kilograms of hydrogen produced during the taxable year.
621
(ii) A claimant, estate, or trust may not receive a tax credit under this Subsection (6)
622
for more than 5,600 metric tons of hydrogen per taxable year.
623
(iii) A claimant, estate, or trust is eligible to claim a tax credit under this Subsection
624
(6) for production occurring during a period of 48 months beginning with the
625
month in which the hydrogen production system is placed in commercial service.
626
(7)(a) Before a claimant, estate, or trust may claim a tax credit under this section, the
627
claimant, estate, or trust shall obtain a written certification from the office.
628
(b) The office shall issue a claimant, estate, or trust a written certification if the office
629
determines that:
630
(i) the claimant, estate, or trust meets the requirements of this section to receive a tax
631
credit; and
632
(ii) the commercial energy system or the hydrogen production system with respect to
633
which the claimant, estate, or trust seeks to claim a tax credit:
634
(A) has been completely installed;
635
(B) is a viable system for saving or producing energy from clean resources; and
636
(C) is safe, reliable, efficient, and technically feasible to ensure that the
637
commercial energy system or the hydrogen production system uses the state's
638
clean and nonrenewable resources in an appropriate and economic manner.
639
(c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
640
office may make rules:
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641
(i) for determining whether a commercial energy system or a hydrogen production
642
system meets the requirements of Subsection (7)(b)(ii); and
643
(ii) for purposes of a tax credit under Subsection (3), establishing the reasonable costs
644
of a commercial energy system, as an amount per unit of energy production.
645
(d) A claimant, estate, or trust that obtains a written certification from the office shall
646
retain the certification for the same time period a person is required to keep books
647
and records under Section 59-1-1406.
648
(e) The office shall submit to the commission an electronic list that includes:
649
(i) the name and identifying information of each claimant, estate, or trust to which the
650
office issues a written certification; and
651
(ii) for each claimant, estate, or trust:
652
(A) the amount of the tax credit listed on the written certification; and
653
(B) the date the commercial energy system or the hydrogen production system
654
was installed.
655
(8) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
656
commission may make rules to address the certification of a tax credit under this section.
657
(9) A tax credit under this section is in addition to any tax credits provided under the laws
658
or rules and regulations of the United States.
659
(10) A purchaser of one or more solar units that claims a tax credit under Section
660
59-10-1024 for the purchase of the one or more solar units may not claim a tax credit
661
under this section for that purchase.
662
(11) A claimant, estate, or trust may not claim or carry forward a tax credit described in this
663
section in a taxable year during which the claimant, estate, or trust claims or carries
664
forward a tax credit under Section 59-10-1029.
665
Section 4. Repealer.
666
This bill repeals:
667
Section 59-7-614.7, Nonrefundable alternative energy development tax credit.
668
Section 59-10-1024, Nonrefundable tax credit for qualifying solar projects.
669
Section 59-10-1029, Nonrefundable alternative energy development tax credit.
670
Section 5. Effective Date.
671
This bill takes effect on May 7, 2025.
672
Section 6. Retrospective operation.
673
This bill has retrospective operation for a taxable year beginning on or after January 1,
674
2025.
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