House File 2061 - Introduced HOUSE FILE 2061 BY ISENHART A BILL FOR An Act relating to registration fees paid for certain electric 1 vehicles, including by altering the amounts of the 2 registration fees, creating a tax credit for registration 3 fees paid, and exempting customers of an electric utility 4 who have paid registration fees from certain user or 5 franchise fees, and including applicability provisions. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 7 TLSB 5064YH (5) 88 mo/ns

H.F. 2061 Section 1. Section 321.116, Code 2020, is amended to read 1 as follows: 2 321.116 Battery electric and plug-in hybrid electric motor 3 vehicle fees. 4 1. For each battery electric motor vehicle subject to an 5 annual registration fee under section 321.109, subsection 1 , 6 paragraph “a” , and operated on the public highways of this 7 state, the owner shall pay an annual battery electric motor 8 vehicle registration fee, which shall be in addition to the 9 annual registration fee imposed for the vehicle under section 10 321.109, subsection 1 , paragraph “a” . For purposes of this 11 subsection , “battery electric motor vehicle” means a motor 12 vehicle equipped with electrical drivetrain components and not 13 equipped with an internal combustion engine, that is propelled 14 exclusively by one or more electrical motors using electrical 15 energy stored in a battery or other energy storage device that 16 can be recharged by plugging into an electrical outlet or 17 electric vehicle charging station. The amount of the fee shall 18 be as follows: 19 a. For the period beginning January July 1, 2020, and ending 20 December 31, 2020, sixty-five dollars thirty-two dollars and 21 fifty cents . 22 b. For the period beginning January 1, 2021, and ending 23 December 31, 2021, ninety-seven dollars and fifty cents 24 sixty-five dollars . 25 c. On or after January 1, 2022, one hundred thirty dollars. 26 2. For each plug-in hybrid electric motor vehicle subject to 27 an annual registration fee under section 321.109, subsection 28 1 , paragraph “a” , and operated on the public highways of this 29 state, the owner shall pay an annual plug-in hybrid electric 30 motor vehicle registration fee, which shall be in addition 31 to the annual registration fee imposed for the vehicle under 32 section 321.109, subsection 1 , paragraph “a” . For purposes of 33 this subsection , “plug-in hybrid electric motor vehicle” means a 34 motor vehicle equipped with electrical drivetrain components, 35 -1- LSB 5064YH (5) 88 mo/ns 1/ 6

H.F. 2061 an internal combustion engine, and a battery or other energy 1 storage device that can be recharged by plugging into an 2 electrical outlet or electric vehicle charging station. The 3 amount of the fee shall be as follows: 4 a. For the period beginning January July 1, 2020, and ending 5 December 31, 2020, thirty-two dollars and fifty cents sixteen 6 dollars and twenty-five cents . 7 b. For the period beginning January 1, 2021, and ending 8 December 31, 2021, forty-eight dollars and seventy-five cents 9 thirty-two dollars and fifty cents . 10 c. On or after January 1, 2022, sixty-five dollars. 11 3. The department shall document the average number of 12 miles traveled per vehicle per year by battery electric motor 13 vehicles and plug-in hybrid electric motor vehicles registered 14 under this section. 15 Sec. 2. NEW SECTION . 321.116A Electric vehicle registration 16 fee tax credit. 17 1. a. A person who paid a registration fee pursuant to 18 section 321.116 or section 321.117, subsection 2, may claim a 19 tax credit in an amount equal to the registration fee paid. 20 b. The tax credit shall be allowed against taxes imposed 21 under chapter 422, division II or III. 22 c. An individual may claim a tax credit under this section 23 of a partnership, limited liability company, S corporation, 24 estate, or trust electing to have income taxed directly to 25 the individual. The amount claimed by the individual shall 26 be based upon the pro rata share of the individual’s earnings 27 from the partnership, limited liability company, S corporation, 28 estate, or trust. 29 d. Any tax credit in excess of the taxpayer’s liability 30 for the tax year is not refundable but may be credited to the 31 tax liability for the following five years or until depleted, 32 whichever is earlier. 33 e. A tax credit shall not be carried back to a tax year 34 prior to the tax year in which the taxpayer first receives the 35 -2- LSB 5064YH (5) 88 mo/ns 2/ 6

H.F. 2061 tax credit. 1 2. The department of transportation shall control the 2 issuance of all tax credit certificates to persons who pay 3 a registration fee pursuant to section 321.116 or section 4 321.117, subsection 2. 5 3. a. To claim a tax credit under this section, a taxpayer 6 shall include one or more tax credit certificates with the 7 taxpayer’s tax return. 8 b. The tax credit certificate shall contain the taxpayer’s 9 name, address, tax identification number, the amount of the 10 credit, and any other information required by the department 11 of revenue. 12 c. The tax credit certificate, unless rescinded by the 13 department of transportation, shall be accepted by the 14 department of revenue as payment for taxes imposed pursuant to 15 chapter 422, divisions II and III, subject to any conditions or 16 restrictions placed by the department of transportation upon 17 the face of the tax credit certificate. 18 d. Tax credit certificates issued pursuant to this section 19 shall not be transferred to any other person. 20 Sec. 3. Section 321.117, Code 2020, is amended to read as 21 follows: 22 321.117 Motorcycle, autocycle, ambulance, and hearse fees. 23 1. For all motorcycles and autocycles the annual 24 registration fee shall be twenty dollars. For all motorized 25 bicycles the annual registration fee shall be seven dollars. 26 When the motorcycle or autocycle is more than five model 27 years old, the annual registration fee shall be ten dollars. 28 The annual registration fee for ambulances and hearses shall 29 be fifty dollars. Passenger car plates shall be issued for 30 ambulances and hearses. 31 2. In addition to the fee required for a motorcycle under 32 subsection 1 , the owner of a motorcycle that is a battery 33 electric motor vehicle or plug-in hybrid electric motor 34 vehicle, as those terms are defined in section 321.116 , shall 35 -3- LSB 5064YH (5) 88 mo/ns 3/ 6

H.F. 2061 pay an annual electric motorcycle registration fee. The amount 1 of the fee shall be as follows: 2 a. For the period beginning January July 1, 2020, and ending 3 December 31, 2020, four dollars and fifty cents two dollars and 4 twenty-five cents . 5 b. For the period beginning January 1, 2021, and ending 6 December 31, 2021, six dollars and seventy-five cents four 7 dollars and fifty cents . 8 c. On or after January 1, 2022, nine dollars. 9 3. The department shall document the average number of miles 10 traveled per vehicle per year by motorcycles registered under 11 subsection 2. 12 Sec. 4. NEW SECTION . 422.12O Electric vehicle registration 13 fee tax credit. 14 The taxes imposed under this division, less the credits 15 allowed under section 422.12, shall be reduced by an electric 16 vehicle registration fee tax credit allowed under section 17 321.116A. 18 Sec. 5. Section 422.33, Code 2020, is amended by adding the 19 following new subsection: 20 NEW SUBSECTION . 31. The taxes imposed under this division 21 shall be reduced by an electric vehicle registration fee tax 22 credit allowed under section 321.116A. 23 Sec. 6. Section 476.6, Code 2020, is amended by adding the 24 following new subsection: 25 NEW SUBSECTION . 22. Electric vehicles. A residential 26 customer of an electric utility subject to rate regulation 27 by the board shall be exempt from paying any user fee or 28 franchise fee on the first two hundred eighty-two kilowatt 29 hours of electricity per month if the residential customer 30 submits to the electric utility proof that the customer paid 31 a registration fee required under section 321.116 or section 32 321.117, subsection 2, within the previous one-year period. 33 Sec. 7. APPLICABILITY. The following apply to tax years 34 beginning on or after January 1, 2021: 35 -4- LSB 5064YH (5) 88 mo/ns 4/ 6

H.F. 2061 1. The section of this Act enacting section 321.116A. 1 2. The section of this Act enacting section 422.12O. 2 3. The section of this Act amending section 422.33. 3 EXPLANATION 4 The inclusion of this explanation does not constitute agreement with 5 the explanation’s substance by the members of the general assembly. 6 This bill changes the amount of the annual battery electric 7 motor vehicle registration fee for the period beginning July 8 1, 2020, and ending December 31, 2020, from $65 to $32.50, and 9 the fee for the period beginning January 1, 2021, and ending 10 December 31, 2021, from $97.50 to $65. The bill changes the 11 amount of the annual plug-in hybrid electric motor vehicle 12 registration fee for the period beginning July 1, 2020, and 13 ending December 31, 2020, from $32.50 to $16.25, and the fee 14 for the period beginning January 1, 2021, and ending December 15 31, 2021, from $48.75 to $32.50. The bill changes the amount 16 of the annual electric motorcycle fee for the period beginning 17 July 1, 2020, and ending December 31, 2020, from $4.50 to 18 $2.25, and the fee for the period beginning January 1, 2021, 19 and ending December 31, 2021, from $6.75 to $4.50. 20 The bill requires the department of transportation (DOT) to 21 document the average number of miles traveled per vehicle per 22 year by registered battery electric motor vehicles, plug-in 23 hybrid electric motor vehicles, and electric motorcycles. 24 The bill creates a new tax credit available to persons who 25 pay registration fees for battery electric and plug-in hybrid 26 electric motor vehicles and motorcycles. The tax credit is 27 allowed against personal net income taxes and business taxes 28 on corporations. The tax credit is not refundable but can be 29 credited to the tax liability for the following five years or 30 until depleted, whichever is earlier. However, the tax credit 31 cannot be carried back to a tax year prior to the tax year in 32 which the taxpayer first receives the tax credit. 33 The bill provides that the DOT controls the issuance of tax 34 credit certificates to persons who pay registration fees for 35 -5- LSB 5064YH (5) 88 mo/ns 5/ 6

H.F. 2061 battery electric and plug-in hybrid electric motor vehicles 1 and motorcycles. The tax credit certificate must contain the 2 taxpayer’s name, address, tax identification number, amount 3 of the credit, and any other information as required by the 4 department of revenue (DOR). A person must include the tax 5 credit certificate with the person’s tax return in order to 6 claim the tax credit, which, unless rescinded by the DOT, 7 must be accepted by the DOR as payment for taxes. The bill 8 prohibits a person from transferring the tax credit certificate 9 to any other person. 10 The portions of the bill instituting the new tax credit apply 11 to tax years beginning on or after January 1, 2021. 12 Lastly, the bill provides that a residential customer of 13 an electric utility subject to rate regulation by the Iowa 14 utilities board is exempt from paying any user fee or franchise 15 fee on the first 282 kilowatt hours of electricity per month 16 if the residential customer submits to the electric utility 17 proof that the customer paid a registration fee for a battery 18 electric motor vehicle, plug-in hybrid electric motor vehicle, 19 or electric motorcycle within the previous one-year period. 20 -6- LSB 5064YH (5) 88 mo/ns 6/ 6