Before the office enters into an agreement described in Subsection (3) with an applicant regarding a project, the office, in consultation with the Utah Energy Infrastructure Board created in Section 79-6-902, and other state agencies as necessary, shall, in accordance with the procedures described in Section 79-6-604, certify:
Terms Used In Utah Code 79-6-603
Applicant: means a person that conducts business in the state and that applies for a tax credit under this part. See Utah Code 79-6-602
Energy delivery project: means a project that is designed to:
(a)
increase the capacity for the delivery of energy to a user of energy inside or outside the state; or
(b)
increase the capability of an existing energy delivery system or related facility to deliver energy to a user of energy inside or outside the state. See Utah Code 79-6-602
Fuel standard compliance project: means a project designed to retrofit a fuel refinery in order to make the refinery capable of producing fuel that complies with the United States Environmental Protection Agency's Tier 3 gasoline sulfur standard described in 40 C. See Utah Code 79-6-602
High cost infrastructure project: means a project, including an energy delivery project or a fuel standard compliance project:
(a)
(i)
that expands or creates new industrial, mining, manufacturing, or agriculture activity in the state, not including a retail business;
(ii)
that involves new investment of at least $50,000,000 in an existing industrial, mining, manufacturing, or agriculture entity, by the entity; or
(iii)
for the construction of a plant or other facility, including a fueling station, for the storage, production, or distribution of hydrogen fuel used for transportation, electricity generation, or industrial use;
(b)
that requires or is directly facilitated by infrastructure construction; and
(c)
for which the cost of infrastructure construction to the entity creating the project is greater than:
increase the capacity for water delivery to a water user in the state; or
(ii)
increase the capability of an existing water delivery system or related facility to deliver water to a water user in the state. See Utah Code 79-6-602
Infrastructure cost-burdened entity: includes a pass-through entity taxpayer, as defined in Section 59-10-1402, of a person described in Subsection (6)(a). See Utah Code 79-6-602
Infrastructure-related revenue: means an amount of tax revenue, for an entity creating a high cost infrastructure project, in a taxable year, that is directly attributable to a high cost infrastructure project, under:
State: when applied to the different parts of the United States, includes a state, district, or territory of the United States. See Utah Code 68-3-12.5
that the project meets the definition of a high cost infrastructure project under this part;
(b)
that the high cost infrastructure project will generate infrastructure-related revenue;
(c)
the economic life of the high cost infrastructure project; and
(d)
that the applicant has received a certificate of existence from the Division of Corporations and Commercial Code.
(2)
(a)
Before the office enters into an agreement described in Subsection (3) with an applicant regarding a project, the Utah Energy Infrastructure Board shall evaluate the project’s net benefit to the state, including:
(i)
whether the project is likely to increase the property tax revenue for the municipality or county where the project will be located;
(ii)
whether the project would contribute to the economy of the state and the municipality, tribe, or county where the project will be located;
(iii)
whether the project would provide new infrastructure for an area where the type of infrastructure the project would create is underdeveloped;
(iv)
whether the project is supported by a business case for providing the revenue necessary to finance the construction and operation of the project;
(v)
whether the project would have a positive environmental impact on the state;
(vi)
whether the project promotes responsible energy development;
(vii)
whether the project would upgrade or improve an existing entity in order to ensure the entity’s continued operation and economic viability;
(viii)
whether the project is less likely to be completed without a tax credit issued to the applicant under this part; and
(ix)
other relevant factors that the board specifies in the board’s evaluation.
(b)
Before the office enters into an agreement described in Subsection (3) with an applicant regarding an energy delivery project, in addition to the criteria described in Subsection (2)(a) the Utah Energy Infrastructure Board shall determine that the project:
(i)
is strategically situated to maximize connections to an energy source project located in the state that is:
(A)
existing;
(B)
under construction;
(C)
planned; or
(D)
foreseeable;
(ii)
is supported by a project plan related to:
(A)
engineering;
(B)
environmental issues;
(C)
energy production;
(D)
load or other capacity; and
(E)
any other issue related to the building and operation of energy delivery infrastructure; and
(iii)
complies with the regulations of the following regarding the building of energy delivery infrastructure:
(A)
the Federal Energy Regulatory Commission;
(B)
the North American Electric Reliability Council; and
(C)
the Public Service Commission of Utah.
(c)
The Utah Energy Infrastructure Board may recommend that the office deny an applicant a tax credit if, as determined by the Utah Energy Infrastructure Board:
(i)
the project does not sufficiently benefit the state based on the criteria described in Subsection (2)(a); or
(ii)
for an energy delivery project, the project does not satisfy the conditions described in Subsection (2)(b).
(3)
Subject to the procedures described in Section 79-6-604, if an applicant meets the requirements of Subsection (1) to receive a tax credit, and the applicant’s project receives a favorable recommendation from the Utah Energy Infrastructure Board under Subsection (2), the office shall enter into an agreement with the applicant to authorize the tax credit in accordance with this part.
(4)
The office shall grant a tax credit to an infrastructure cost-burdened entity, for a high cost infrastructure project, under an agreement described in Subsection (3):
(a)
for the lesser of:
(i)
the economic life of the high cost infrastructure project;
(ii)
20 years; or
(iii)
a time period, the first taxable year of which is the taxable year when the construction of the high cost infrastructure project begins and the last taxable year of which is the taxable year in which the infrastructure cost-burdened entity has recovered, through the tax credit, an amount equal to:
(A)
50% of the cost of the infrastructure construction associated with the high cost infrastructure project; or
(B)
if the high cost infrastructure project is a fuel standard compliance project, 30% of the cost of the infrastructure construction associated with the high cost infrastructure project;
(b)
except as provided in Subsections (4)(a) and (d), in a total amount equal to 30% of the high cost infrastructure project’s total infrastructure-related revenue over the time period described in Subsection (4)(a);
(c)
for a taxable year, in an amount that does not exceed the high cost infrastructure project’s infrastructure-related revenue during that taxable year; and
(d)
if the high cost infrastructure project is a fuel standard compliance project, in a total amount that is:
(i)
determined by the Utah Energy Infrastructure Board, based on:
(A)
the applicant’s likelihood of completing the high cost infrastructure project without a tax credit; and
(B)
how soon the applicant plans to complete the high cost infrastructure project; and
(ii)
equal to or less than 30% of the high cost infrastructure project’s total infrastructure-related revenue over the time period described in Subsection (4)(a).
(5)
An infrastructure cost-burdened entity shall, for each taxable year:
(a)
file a report with the office showing the high cost infrastructure project’s infrastructure-related revenue during the taxable year;
(b)
subject to Subsection (7), file a report with the office that is prepared by an independent certified public accountant that verifies the infrastructure-related revenue described in Subsection (5)(a); and
(c)
provide the office with information required by the office to certify the economic life of the high cost infrastructure project.
(6)
An infrastructure cost-burdened entity shall retain records supporting a claim for a tax credit for the same period of time during which a person is required to keep books and records under Section 59-1-1406.
(7)
An infrastructure cost-burdened entity for which a report is prepared under Subsection (5)(b) shall pay the costs of preparing the report.
(8)
The office shall certify, for each taxable year, the infrastructure-related revenue generated by an infrastructure cost-burdened entity.
