Senate File 511 - Introduced
SENATE FILE
BY COMMITTEE ON WAYS AND
MEANS
(SUCCESSOR TO SSB
1193)
A BILL FOR
1 An Act modifying and enacting provisions relating to specified
2 renewable energy tax credits, and including effective date
3 and retroactive applicability provisions.
4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
TLSB 1698SV (2) 86
rn/sc
PAG LIN
1 1 Section 1. NEW SECTION. 422.11K Wind energy system tax
1 2 credits.
1 3 1. Subject to subsection 4 of this section, the taxes
1 4 imposed under this division, less the credits allowed under
1 5 section 422.12, shall be reduced by a wind energy system tax
1 6 credit equal to the sum of the following:
1 7 a. Fifty percent of the federal residential energy efficient
1 8 property credit related to small wind energy provided in
1 9 section 25D(a)(4) of the Internal Revenue Code, not to exceed
1 10 five thousand dollars.
1 11 b. Fifty percent of the federal energy credit related to
1 12 small wind energy provided in section 48(a)(2)(A)(i)(IV) of the
1 13 Internal Revenue Code, not to exceed twenty thousand dollars.
1 14 2. Any credit in excess of the tax liability is not
1 15 refundable but the excess for the tax year may be credited
1 16 to the tax liability for the following ten years or until
1 17 depleted, whichever is earlier. The director of revenue shall
1 18 adopt rules to implement this section.
1 19 3. a. An individual may claim the tax credit allowed a
1 20 partnership, limited liability company, S corporation, estate,
1 21 or trust electing to have the income taxed directly to the
1 22 individual. The amount claimed by the individual shall be
1 23 based upon the pro rata share of the individual's earnings of
1 24 the partnership, limited liability company, S corporation,
1 25 estate, or trust.
1 26 b. A taxpayer who is eligible to claim a tax credit under
1 27 this section shall not be eligible to claim a wind energy
1 28 production tax credit under chapter 476B or a renewable energy
1 29 tax credit under chapter 476C.
1 30 c. A taxpayer may claim more than one credit under this
1 31 section, but may claim only one credit per separate and
1 32 distinct small wind energy system installation. The department
1 33 shall establish criteria, by rule, for determining what
1 34 constitutes a separate and distinct installation.
1 35 d. A taxpayer must submit an application to the department
2 1 for each separate and distinct small wind energy installation.
2 2 The application must be approved by the department in order to
2 3 claim the tax credit. The application must be filed by May 1
2 4 following the year of the installation of the small wind energy
2 5 system.
2 6 4. a. Each tax year the total amount of small wind energy
2 7 system tax credit claims that shall be paid pursuant to this
2 8 section shall not exceed the amount appropriated by the general
2 9 assembly for that purpose. If the total dollar amount of the
2 10 claims exceeds that amount, each claim shall be paid an amount
2 11 equal to the amount appropriated divided by the total number of
2 12 claims, not to exceed the amount of the taxpayer's claim.
2 13 b. If an amount of tax credits available for a tax year
2 14 pursuant to paragraph "a" goes unclaimed, the amount of the
2 15 unclaimed tax credits shall be made available for a subsequent
2 16 tax year in which an appropriation under this section is made
2 17 in addition to, and cumulated with, the amount appropriated for
2 18 that subsequent tax year.
2 19 5. On or before January 1, annually, if tax credits have
2 20 been claimed during the preceding tax year, the department
2 21 shall submit a written report to the governor and the general
2 22 assembly regarding the number and value of tax credits claimed
2 23 under this section, and any other information the department
2 24 may deem relevant and appropriate.
2 25 Sec. 2. Section 422.11L, subsection 1, Code 2015, is amended
2 26 by adding the following new paragraph:
2 27 NEW PARAGRAPH. c. Notwithstanding paragraphs "a" and "b"
2 28 of this subsection, for installations occurring on or after
2 29 January 1, 2016, the applicable percentages of the federal
2 30 residential energy efficiency property tax credit related to
2 31 solar energy and the federal energy credit related to solar
2 32 energy systems shall be fifty percent.
2 33 Sec. 3. Section 422.11L, subsection 4, paragraph a, Code
2 34 2015, is amended to read as follows:
2 35 a. The cumulative value of tax credits claimed annually
3 1 by applicants pursuant to this section shall not exceed four
3 2 six million five hundred thousand dollars. Of this amount,
3 3 at least one million dollars shall be reserved for claims
3 4 associated with or resulting from residential solar energy
3 5 system installations. In the event that the total amount
3 6 of claims submitted for residential solar energy system
3 7 installations in a tax year is an amount less than one million
3 8 dollars, the remaining unclaimed reserved amount shall be
3 9 made available for claims associated with or resulting from
3 10 nonresidential solar energy system installations received for
3 11 the tax year.
3 12 Sec. 4. Section 422.33, subsection 29, paragraph a, Code
3 13 2015, is amended to read as follows:
3 14 a. The taxes imposed under this division shall be reduced by
3 15 a solar energy system tax credit equal to sixty percent of the
3 16 federal energy credit related to solar energy systems provided
3 17 in section 48(a)(2)(A)(i)(II) and section 48(a)(2)(A)(i)(III)
3 18 of the Internal Revenue Code, not to exceed twenty thousand
3 19 dollars. For installations occurring on or after January 1,
3 20 2016, the applicable percentage of the federal energy credit
3 21 related to solar energy systems shall be fifty percent.
3 22 Sec. 5. Section 422.33, Code 2015, is amended by adding the
3 23 following new subsection:
3 24 NEW SUBSECTION. 31. a. The taxes imposed under this
3 25 division shall be reduced by a wind energy system tax
3 26 credit equal to fifty percent of the federal energy credit
3 27 related to small wind energy systems provided in section
3 28 48(a)(2)(A)(i)(IV) of the Internal Revenue Code, not to exceed
3 29 twenty thousand dollars.
3 30 b. The taxpayer may claim the credit pursuant to this
3 31 subsection according to the same requirements, conditions, and
3 32 limitations as provided in section 422.11K.
3 33 Sec. 6. Section 422.60, subsection 12, paragraph a, Code
3 34 2015, is amended to read as follows:
3 35 a. The taxes imposed under this division shall be reduced by
4 1 a solar energy system tax credit equal to sixty percent of the
4 2 federal energy credit related to solar energy systems provided
4 3 in section 48(a)(2)(A)(i)(II) and section 48(a)(2)(A)(i)(III)
4 4 of the Internal Revenue Code, not to exceed twenty thousand
4 5 dollars. For installations occurring on or after January 1,
4 6 2016, the applicable percentage of the federal energy credit
4 7 related to solar energy systems shall be fifty percent.
4 8 Sec. 7. Section 422.60, Code 2015, is amended by adding the
4 9 following new subsection:
4 10 NEW SUBSECTION. 14. a. The taxes imposed under this
4 11 division shall be reduced by a wind energy system tax
4 12 credit equal to fifty percent of the federal energy credit
4 13 related to small wind energy systems provided in section
4 14 48(a)(2)(A)(i)(IV) of the Internal Revenue Code, not to exceed
4 15 twenty thousand dollars.
4 16 b. The taxpayer may claim the credit pursuant to this
4 17 subsection according to the same requirements, conditions, and
4 18 limitations as provided in section 422.11K.
4 19 Sec. 8. Section 476C.1, subsection 6, paragraph d, Code
4 20 2015, is amended to read as follows:
4 21 d. (1) Was initially placed into service on or after July
4 22 1, 2005, and before January 1, 2017.
4 23 (2) Notwithstanding subparagraph (1), the placement in
4 24 service requirements for a facility that has applied for
4 25 eligibility approval on or after January 1, 2008, but which is
4 26 not operational as of the effective date of this Act shall be
4 27 extended to January 1, 2019.
4 28 Sec. 9. Section 476C.3, subsection 4, paragraph a, Code
4 29 2015, is amended to read as follows:
4 30 a. The maximum amount of nameplate generating capacity
4 31 of all wind energy conversion facilities the board may find
4 32 eligible under this chapter shall not exceed three hundred
4 33 sixty=three megawatts of nameplate generating capacity.
4 34 Beginning January 1, 2016, of the credits revoked pursuant to
4 35 subsection 6, one megawatt of nameplate generating capacity
5 1 shall be reserved for wind energy conversion facilities
5 2 installed within a small wind innovation zone pursuant to
5 3 section 476.48.
5 4 Sec. 10. Section 476C.3, subsection 4, paragraph b, Code
5 5 2015, is amended to read as follows:
5 6 b. The maximum amount of energy production capacity
5 7 equivalent of all other facilities the board may find eligible
5 8 under this chapter shall not exceed a combined output of
5 9 fifty=three megawatts of nameplate generating capacity and,
5 10 annually, one hundred sixty=seven billion British thermal units
5 11 of heat for a commercial purpose. Of the maximum amount of
5 12 energy production capacity equivalent of all other facilities
5 13 found eligible under this chapter, no more than ten megawatts
5 14 of nameplate generating capacity or energy production capacity
5 15 equivalent shall be allocated to any one facility. Of the
5 16 maximum amount of energy production capacity equivalent of all
5 17 other facilities found eligible under this chapter, fifty=five
5 18 billion British thermal units of heat for a commercial purpose
5 19 shall be reserved annually for an eligible facility that is
5 20 a refuse conversion facility for processed, engineered fuel
5 21 from a multicounty solid waste management planning area. The
5 22 maximum amount of energy production capacity the board may
5 23 find eligible for a single refuse conversion facility is,
5 24 annually, fifty=five billion British thermal units of heat for
5 25 a commercial purpose.
5 26 Sec. 11. Section 476C.5, Code 2015, is amended by adding the
5 27 following new unnumbered paragraph:
5 28 NEW UNNUMBERED PARAGRAPH For a renewable energy facility
5 29 that has applied for eligibility approval on or after January
5 30 1, 2008, but which is not operational as of the effective date
5 31 of this Act, renewable energy tax credit certificates shall not
5 32 be issued for renewable energy purchased or produced by the
5 33 facility for on=site consumption on or after December 31, 2028.
5 34 Sec. 12. EFFECTIVE UPON ENACTMENT. This Act, being deemed
5 35 of immediate importance, takes effect upon enactment.
6 1 Sec. 13. RETROACTIVE APPLICABILITY.
6 2 1. The section of this Act amending section 476C.3,
6 3 subsection 4, paragraph "b", applies retroactively to January
6 4 1, 2014, for tax years beginning on or after that date.
6 5 2. The sections of this Act amending section 422.11L,
6 6 subsection 4, paragraph "a", section 422.33, subsection 29,
6 7 paragraph "a", and section 422.60, subsection 12, paragraph
6 8 "a", apply retroactively to January 1, 2015, for tax years
6 9 beginning on or after that date.
6 10 3. The sections of this Act enacting section 422.11K,
6 11 section 422.33, subsection 31, and section 422.60, subsection
6 12 14, apply retroactively to January 1, 2015, for tax years
6 13 beginning on or after that date.
6 14 EXPLANATION
6 15 The inclusion of this explanation does not constitute agreement with
6 16 the explanation's substance by the members of the general assembly.
6 17 This bill modifies existing renewable energy tax credit
6 18 provisions and enacts new renewable energy tax credit
6 19 provisions.
6 20 The bill establishes a wind energy system tax credit against
6 21 the individual and corporate income tax and the franchise tax.
6 22 The tax credit is equal to the sum of 50 percent of the federal
6 23 residential energy efficient property credit related to small
6 24 wind energy provided in section 25D(a)(4) of the Internal
6 25 Revenue Code, not to exceed $5,000, and 50 percent of the
6 26 federal energy credit related to small wind energy provided in
6 27 section 48(a)(2)(A)(i)(IV) of the Internal Revenue Code, not
6 28 to exceed $20,000.
6 29 The bill provides that any credit in excess of the tax
6 30 liability is not refundable but the excess for the tax year may
6 31 be credited to the tax liability for the following 10 years or
6 32 until depleted, whichever is earlier.
6 33 The bill provides that a taxpayer who is eligible to claim
6 34 the wind energy system tax credit shall not be eligible to
6 35 claim a wind energy production tax credit under Code chapter
7 1 476B or a renewable energy tax credit under Code chapter 476C.
7 2 A taxpayer may claim more than one wind energy system tax
7 3 credit but may claim only one credit per separate and distinct
7 4 small wind energy system installation. The department shall
7 5 establish criteria by rule for determining what constitutes a
7 6 separate and distinct installation.
7 7 The bill requires that a taxpayer must submit an application
7 8 to the department for each separate and distinct wind energy
7 9 installation for approval. The application must be filed by
7 10 May 1 following the year of the installation of the small wind
7 11 energy system.
7 12 The bill states that each tax year the total amount of wind
7 13 energy system tax credit claims that shall be paid shall not
7 14 exceed the amount appropriated by the general assembly for that
7 15 purpose. If the total dollar amount of the claims exceeds
7 16 that amount, each claim shall be paid an amount equal to the
7 17 amount appropriated divided by the total number of claims, not
7 18 to exceed the amount of the taxpayer's claim. If an amount
7 19 of tax credits available for a tax year goes unclaimed, the
7 20 amount of the unclaimed tax credits shall be made available for
7 21 the following tax year in which an appropriation is made in
7 22 addition to, and cumulated with, the amount appropriated for
7 23 that following tax year.
7 24 The bill requires the department, on or before January 1,
7 25 annually, if tax credits have been claimed during the preceding
7 26 tax year, to submit a written report to the governor and the
7 27 general assembly regarding the number and value of tax credits
7 28 claimed and any other information the department may deem
7 29 relevant and appropriate.
7 30 The provisions enacting the wind energy system tax credit
7 31 are retroactively applicable to January 1, 2015, for tax years
7 32 beginning on or after that date.
7 33 The bill modifies provisions applicable to the solar energy
7 34 system tax credit. The bill provides that for solar energy
7 35 system installations occurring on or after January 1, 2016,
8 1 the percentages of the federal residential energy efficiency
8 2 property credit related to solar energy and the federal energy
8 3 credit related to solar energy which may be claimed shall be
8 4 reduced from 60 percent to 50 percent. The bill increases
8 5 the cumulative value of solar energy system tax credits which
8 6 may be claimed annually from $4 million to $6 million. These
8 7 changes are correspondingly made to the corporate and franchise
8 8 solar energy system tax credit provisions contained in Code
8 9 sections 422.33 and 422.60. These provisions are retroactively
8 10 applicable to January 1, 2015, for tax years beginning on or
8 11 after that date.
8 12 With regard to renewable energy tax credit provisions
8 13 contained in Code chapter 476C, the bill extends placement in
8 14 service requirements for eligible renewable energy facilities
8 15 that have applied for eligibility approval on or after
8 16 January 1, 2008, but which are not operational on the bill's
8 17 effective date, from January 1, 2017, to January 1, 2019.
8 18 The bill correspondingly extends the period during which
8 19 renewable energy tax credit certificates may be issued for such
8 20 facilities by two years, from December 31, 2026, to December
8 21 31, 2028.
8 22 Additionally, the bill modifies references to the maximum
8 23 amount of British thermal units of heat for a commercial
8 24 purpose which may be included in energy production capacity
8 25 equivalent qualifying for a renewable energy tax credit. Such
8 26 references shall apply on an annual basis. These provisions
8 27 are retroactively applicable to January 1, 2014, for tax years
8 28 beginning on or after that date.
8 29 Finally, the bill reserves one megawatt of nameplate
8 30 generating capacity for wind energy conversion facilities
8 31 installed within a small wind innovation zone established
8 32 pursuant to Code section 476.48. This reserved capacity
8 33 commences January 1, 2016.
8 34 The bill takes effect upon enactment.
LSB 1698SV (2) 86
rn/sc