Bill Text: IA HF2462 | 2015-2016 | 86th General Assembly | Introduced
Bill Title: A bill for an act providing for tax credits and refunds relating to renewable fuels including their component biofuels and including effective date provisions. (Formerly HF 2175) (Formerly HSB 519)
Spectrum: Committee Bill
Status: (Introduced - Dead) 2016-04-21 - Withdrawn. H.J. 721. [HF2462 Detail]
Download: Iowa-2015-HF2462-Introduced.html
House File 2462 - Introduced HOUSE FILE BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HF 2175) (SUCCESSOR TO HSB 519) (COMPANION TO SF 2309 by committee on ways and means) A BILL FOR 1 An Act providing for tax credits and refunds relating to 2 renewable fuels including their component biofuels and 3 including effective date provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: TLSB 5598HZ (2) 86 da/rj PAG LIN 1 1 DIVISION I 1 2 INCOME TAX ==== E=15 PLUS GASOLINE PROMOTION TAX CREDIT 1 3 Section 1. Section 422.11Y, subsection 9, Code 2016, is 1 4 amended to read as follows: 1 5 9. This section is repealed on January 1,20182025. 1 6 Sec. 2. Section 422.33, subsection 11D, paragraph c, Code 1 7 2016, is amended to read as follows: 1 8 c. This subsection is repealed on January 1,20182025. 1 9 Sec. 3. 2011 Iowa Acts, chapter 113, section 37, is amended 1 10 to read as follows: 1 11 SEC. 37. TAX CREDIT AVAILABILITY. For a retail dealer who 1 12 may claim an E=15 plus gasoline promotion tax credit under 1 13 section 422.11Y or 422.33, subsection 11D, as enacted in this 1 14 Act and amended in subsequent Acts, in calendar year2017 1 152024, and whose tax year ends prior to December 31,20172024, 1 16 the retail dealer may continue to claim the tax credit in the 1 17 retail dealer's following tax year. In that case, the tax 1 18 credit shall be calculated in the same manner as provided in 1 19 section 422.11Y or 422.33, subsection 11D, as enacted in this 1 20 Act and amended in subsequent Acts, for the remaining period 1 21 beginning on the first day of the retail dealer's new tax year 1 22 until December 31,20172024. For that remaining period, the 1 23 tax credit shall be calculated in the same manner as a retail 1 24 dealer whose tax year began on the previous January 1 and who 1 25 is calculating the tax credit on December 31,20172024. 1 26 DIVISION II 1 27 INCOME TAX ==== E=85 GASOLINE PROMOTION TAX CREDIT 1 28 Sec. 4. Section 422.11O, subsection 8, Code 2016, is amended 1 29 to read as follows: 1 30 8. This section is repealed on January 1,20182025. 1 31 Sec. 5. Section 422.33, subsection 11B, paragraph c, Code 1 32 2016, is amended to read as follows: 1 33 c. This subsection is repealed on January 1,20182025. 1 34 Sec. 6. 2006 Iowa Acts, chapter 1142, section 49, subsection 1 35 3, as amended by 2011 Iowa Acts, chapter 113, section 20, is 2 1 amended to read as follows: 2 2 3. For a retail dealer who may claim an E=85 gasoline 2 3 promotion tax credit under section 422.11O or 422.33, 2 4 subsection 11B, as enacted in this Act and amended in 2 5 subsequent Acts, in calendar year20172024 and whose tax 2 6 year ends prior to December 31,20172024, the retail dealer 2 7 may continue to claim the tax credit in the retail dealer's 2 8 following tax year. In that case, the tax credit shall be 2 9 calculated in the same manner as provided in section 422.11O 2 10 or 422.33, subsection 11B, as enacted in this Act and amended 2 11 in subsequent Acts, for the remaining period beginning on the 2 12 first day of the retail dealer's new tax year until December 2 13 31,20172024. For that remaining period, the tax credit shall 2 14 be calculated in the same manner as a retail dealer whose tax 2 15 year began on the previous January 1 and who is calculating the 2 16 tax credit on December 31,20172024. 2 17 DIVISION III 2 18 INCOME TAX ==== BIODIESEL BLENDED FUEL TAX CREDIT 2 19 Sec. 7. Section 422.11P, subsection 3, paragraph b, Code 2 20 2016, is amended to read as follows: 2 21 b. The tax credit shall apply to biodiesel blended fuel 2 22 classified as provided in this section, if the classification 2 23 meets the standards provided in section 214A.2. In ensuring 2 24 that biodiesel blended fuel meets the classification 2 25 requirements of this section, the department shall take 2 26 into account reasonable variances due to testing and other 2 27 limitations. The department shall adopt rules to provide that 2 28 where a blending error occurs and an insufficient amount of 2 29 biodiesel has inadvertently been blended with petroleum=based 2 30 diesel fuel so that the mixture fails to qualify as B=11 or 2 31 higher a one percent tolerance applies when classifying the 2 32 biodiesel blended fuel. 2 33 Sec. 8. Section 422.11P, subsections 4 and 8, Code 2016, are 2 34 amended to read as follows: 2 35 4. For a retail dealer whose tax year is on a calendar year 3 1 basis, the retail dealer shall calculate the amount of the tax 3 2 credit by multiplying a designated rate by the retail dealer's 3 3 total biodiesel blended fuel gallonage as provided in section 3 4 452A.31 which qualifies under this subsection. 3 5 a. Incalendar year 2012, inorder to qualify for the tax 3 6 credit, the biodiesel blended fuel must be classified asB=2 3 7B=5 or higher as provided in paragraph "b". 3 8(1) For biodiesel blended fuel classified as B=2 or higher 3 9 but not as high as B=5, the designated rate is two cents.3 10(2)b. (1) (a)ForUntil December 31, 2017, for biodiesel 3 11 blended fuel classified as B=5 or higher, the designated rate 3 12 is four and one=half cents. 3 13 (b) This subparagraph (1) is repealed on January 1, 2019. 3 14b.(2)In calendar year 2013 and for each subsequent 3 15 calendar year, in order to qualify for the tax credit, the 3 16Beginning January 1, 2018, the designated rate is determined 3 17 as follows: 3 18 (a) For biodiesel blended fuelmust beclassified as B=5 3 19 or higher. Thebut not as high as B=11, the designated rate 3 20for the qualifying biodiesel blended fuelisfour and one=half 3 21three and one=half cents. 3 22 (b) For biodiesel blended fuel classified as B=11 or higher, 3 23 the designated rate is five and one=half cents. 3 24 8. This section is repealed January 1,20182025. 3 25 Sec. 9. Section 422.33, subsection 11C, paragraph c, Code 3 26 2016, is amended to read as follows: 3 27 c. This subsection is repealed on January 1,20182025. 3 28 Sec. 10. 2011 Iowa Acts, chapter 113, section 31, is amended 3 29 to read as follows: 3 30 SEC. 31. TAX CREDIT AVAILABILITY. For a retail dealer 3 31 who may claim a biodiesel blended fuel promotion tax credit 3 32 under section 422.11P or 422.33, subsection 11C, as amended 3 33 in this Act and amended in subsequent Acts, in calendar year 3 3420172024, and whose tax year ends prior to December 31,2017 3 352024, the retail dealer may continue to claim the tax credit in 4 1 the retail dealer's following tax year. In that case, the tax 4 2 credit shall be calculated in the same manner as provided in 4 3 section 422.11P or 422.33, subsection 11C, as amended in this 4 4 Act and amended in subsequent Acts, for the remaining period 4 5 beginning on the first day of the retail dealer's new tax year 4 6 until December 31,20172024. For that remaining period, the 4 7 tax credit shall be calculated in the same manner as a retail 4 8 dealer whose tax year began on the previous January 1 and who 4 9 is calculating the tax credit on December 31,20172024. 4 10 DIVISION IV 4 11 SALES AND USE TAX ==== BIODIESEL PRODUCTION REFUND 4 12 Sec. 11. Section 423.4, subsection 9, paragraph e, Code 4 13 2016, is amended to read as follows: 4 14 e. This subsection is repealed on January 1,20182025. 4 15 DIVISION V 4 16 FUTURE REPEALS 4 17 Sec. 12. Section 422.11O, subsection 5, Code 2016, is 4 18 amended to read as follows: 4 19 5.a.A retail dealer is eligible to claim an E=85 gasoline 4 20 promotion tax credit as provided in this section even though 4 21 the retail dealer claimsone or all of the following related 4 22 tax credits:4 23(1) The ethanol promotion tax credit pursuant to section 4 24 422.11N.4 25(2)Thean E=15 plus gasoline promotion tax credit pursuant 4 26 to section 422.11Y.4 27b.(1)The retail dealer may claim the E=85 gasoline 4 28 promotion tax credit and one or more of the related tax credits 4 29 as provided in paragraph "a"for the same tax year. 4 30(2) The retail dealer may claim the ethanol promotion 4 31 tax credit as provided in paragraph "a" for the same ethanol 4 32 gallonage used to calculate and claim the E=85 gasoline 4 33 promotion tax credit.4 34 Sec. 13. Section 422.11Y, subsection 6, Code 2016, is 4 35 amended to read as follows: 5 1 6.a.A retail dealer is eligible to claim an E=15 plus 5 2 gasoline promotion tax credit as provided in this section even 5 3 though the retail dealer claimsone or all of the following 5 4 related tax credits:5 5(1) The ethanol promotion tax credit pursuant to section 5 6 422.11N.5 7(2)Thean E=85 gasoline promotion tax credit pursuant to 5 8 section 422.11O.5 9b.(1)The retail dealer may claim the E=15 plus gasoline 5 10 promotion tax credit and one or more of the related tax credits 5 11 as provided in paragraph "a"for the same tax year. 5 12(2) The retail dealer may claim the ethanol promotion 5 13 tax credit as provided in paragraph "a" for the same ethanol 5 14 gallonage used to calculate and claim the E=15 plus gasoline 5 15 promotion tax credit.5 16 Sec. 14. REPEAL. Any intervening provision effective prior 5 17 to the effective date of this division of this Act that amends 5 18 section 422.11O, subsection 5, or section 422.11Y, subsection 5 19 6, as amended in this division of this Act, is repealed, unless 5 20 that Act or another Act specifically provides otherwise. 5 21 Sec. 15. EFFECTIVE DATE. This division of this Act takes 5 22 effect January 1, 2021. 5 23 EXPLANATION 5 24 The inclusion of this explanation does not constitute agreement with 5 25 the explanation's substance by the members of the general assembly. 5 26 BIOFUELS TAX CREDIT AND REFUND EXTENSIONS. This bill 5 27 extends the expiration date of four biofuel tax programs from 5 28 January 1, 2018, to January 1, 2025, including three income tax 5 29 credits and one sales and use tax refund. 5 30 BIODIESEL FUEL TAX CREDIT ==== INCREASED TAX CREDIT RATE FOR 5 31 B=11 OR HIGHER. Beginning January 1, 2018, the bill decreases 5 32 the designated tax credit rate for the sale of biodiesel 5 33 blended fuel classified as B=5 or higher but not as high as 5 34 B=11 from 4.5 to 3.5 cents per gallon and correspondingly the 5 35 designated tax credit rate for the sale of biodiesel blended 6 1 fuel classified as B=11 or higher is increased from 4.5 cents 6 2 to 5.5 cents per gallon. The bill also provides that the 6 3 department of revenue is required to adopt rules to account for 6 4 errors in the blending of diesel fuel and biodiesel. 6 5 BACKGROUND. A biofuel is a substance blended with motor fuel 6 6 (gasoline or diesel fuel) and includes either ethanol (ethyl 6 7 alcohol) or biodiesel (a substance derived from vegetable 6 8 oils or animal fats) meeting state standards (Code section 6 9 214A.2). A motor fuel blended with a biofuel is referred to 6 10 as a renewable fuel. The amount of the tax credit or refund 6 11 is claimed by a taxpayer on a tax or calendar year basis after 6 12 multiplying the total gallonage of a qualifying renewable fuel 6 13 or biofuel times a designated monetary rate. 6 14 CURRENT INCOME TAX CREDITS. The income tax credits may 6 15 be claimed by a retail dealer operating a retail motor fuel 6 16 site and the amount of each tax credit is based on the total 6 17 number of gallons of a renewable fuel sold. The E=15 plus 6 18 gasoline promotion tax credit requires an ethanol content of 6 19 between 15 and 69 percent per gallon and the designated rate 6 20 equals 3 cents except between June 1 and September 15 when 6 21 the designated rate increases to 10 cents. The E=85 gasoline 6 22 promotion tax credit requires an ethanol content of between 6 23 70 and 85 percent per gallon and the designated rate equals 6 24 16 cents. The biodiesel blended fuel tax credit requires a 6 25 biodiesel content of at least 5 percent per gallon (B=5) and 6 26 the designated rate equals 4.5 cents. 6 27 SALES AND USE TAX REFUND. The sales and use tax refund may 6 28 be claimed by a biodiesel producer who manufactures biodiesel 6 29 for use in biodiesel blended fuel. The amount of the refund 6 30 equals the total number of gallons of biodiesel produced during 6 31 each calendar year quarter multiplied by a designated rate 6 32 of 2 cents. However, a producer cannot claim the refund on 6 33 more than 25 million gallons produced at any one manufacturing 6 34 facility. 6 35 FUTURE REPEAL OF REFERENCES TO THE ETHANOL PROMOTION TAX 7 1 CREDIT. The bill amends Code sections creating the E=85 7 2 gasoline promotion tax credit and the E=15 plus gasoline 7 3 promotion tax credit by repealing references to another tax 7 4 credit referred to as the ethanol promotion tax credit claimed 7 5 by a retail dealer who attains a certain threshold number of 7 6 all biofuels sold during a determination period and which is 7 7 based on the number of gallons of pure ethanol sold during that 7 8 period. The amendments become effective on January 1, 2021, 7 9 which is the date that the ethanol promotion tax credit is due 7 10 to expire. LSB 5598HZ (2) 86 da/rj
