Bill Text: IA SF511 | 2015-2016 | 86th General Assembly | Introduced
Bill Title: A bill for an act modifying and enacting provisions relating to specified renewable energy tax credits, and including effective date and retroactive applicability provisions. (Formerly SSB 1193.)
Spectrum: Committee Bill
Status: (Introduced - Dead) 2015-06-05 - Referred to Ways & Means. S.J. 1122. [SF511 Detail]
Download: Iowa-2015-SF511-Introduced.html
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 exceedfour 3 2six 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
