Text: HSB266            Text: HSB268


House Study Bill 267

HOUSE FILE BY (PROPOSED COMMITTEE ON AGRICULTURE BILL BY CHAIRPERSON DRAKE) Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act relating to biodiesel fuel, including biodiesel fuel tax 2 credits and providing an applicability date. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 2736HC 80 5 da/pj/5 PAG LIN 1 1 Section 1. Section 159A.2, subsections 6 and 8, Code 2003, 1 2 are amended to read as follows: 1 3 6. "Renewable fuel" means an energy source at least in 1 4 part derived from an organic compound capable of powering 1 5 machinery, including an engine or power plant. A renewable 1 6 fuel includes but is not limited to ethanol=blended or 1 7 soydiesel biodiesel fuel. 1 8 8. "Soydiesel "Biodiesel fuel" means a fuel which is a 1 9 mixture of diesel fuel and processed soybean oil, if at least 1 10 twenty percent of the mixed fuel by volume is processed 1 11 soybean oil which meets American society for testing and 1 12 materials standards. 1 13 Sec. 2. Section 159A.3, subsection 3, paragraph b, Code 1 14 2003, is amended to read as follows: 1 15 b. The office shall promote the production and consumption 1 16 of soydiesel biodiesel fuel in this state. 1 17 Sec. 3. Section 307.20, subsection 3, paragraph a, Code 1 18 2003, is amended to read as follows: 1 19 a. "Biodiesel fuel" means soydiesel fuel the same as 1 20 defined in section 159A.2. 1 21 Sec. 4. NEW SECTION. 422.11H BIODIESEL FUEL TAX CREDIT. 1 22 1. As used in this section, unless the context otherwise 1 23 requires: 1 24 a. "Biodiesel fuel" means the same as defined in section 1 25 159A.2. 1 26 b. "Metered pump" means a motor vehicle fuel pump licensed 1 27 by the department of agriculture and land stewardship pursuant 1 28 to chapter 214. 1 29 c. "Retail dealer" means a retail dealer as defined in 1 30 section 214A.1 who operates a metered pump at a service 1 31 station. 1 32 d. "Sell" means to sell on a retail basis. 1 33 e. "Service station" means each geographic location in 1 34 this state where a retail dealer sells and dispenses gasoline 1 35 on a retail basis. 2 1 f. "Special fuel" means special fuel as defined in 452A.2. 2 2 g. "Tax credit" means the designated biodiesel fuel tax 2 3 credit as provided in this section. 2 4 2. The taxes imposed under this division, less the credits 2 5 allowed under sections 422.12 and 422.12B, shall be reduced by 2 6 a biodiesel fuel tax credit for each tax year that the 2 7 taxpayer is eligible to claim the tax credit under this 2 8 section. In order to be eligible, all of the following must 2 9 apply: 2 10 a. The taxpayer is a retail dealer. 2 11 b. The taxpayer operates at least one service station at 2 12 which more than five percent of the total gallons of special 2 13 fuel for diesel engines sold and dispensed through one or more 2 14 metered pumps by the taxpayer in the tax year is biodiesel 2 15 fuel. 2 16 c. The taxpayer complies with requirements of the 2 17 department required to administer this section. 2 18 d. The taxpayer reports information to the department of 2 19 natural resources as provided in section 473.7. 2 20 3. The tax credit shall be calculated separately for each 2 21 service station operated by the taxpayer. The amount of the 2 22 tax credit for each eligible service station is two and one= 2 23 half cents multiplied by the total number of gallons of 2 24 biodiesel fuel sold and dispensed through all metered pumps 2 25 located at that service station during the tax year in excess 2 26 of five percent of all special fuel for diesel engines sold 2 27 and dispensed through metered pumps at that service station 2 28 during the tax year. 2 29 4. Any credit in excess of the taxpayer's tax liability 2 30 shall be refunded. In lieu of claiming a refund, the taxpayer 2 31 may elect to have the overpayment shown on the taxpayer's 2 32 final, completed return credited to the tax liability for the 2 33 following tax year. 2 34 5. An individual may claim the tax credit allowed a 2 35 partnership, limited liability company, S corporation, estate, 3 1 or trust electing to have the income taxed directly to the 3 2 individual. The amount claimed by the individual shall be 3 3 based upon the pro rata share of the individual's earnings of 3 4 a partnership, limited liability company, S corporation, 3 5 estate, or trust. 3 6 Sec. 5. Section 422.33, Code 2003, is amended by adding 3 7 the following new subsection: 3 8 NEW SUBSECTION. 14. a. As used in this subsection, 3 9 unless the context otherwise requires: 3 10 (1) "Biodiesel fuel", "metered pump", "retail dealer", 3 11 "sell", "service station", and "special fuel" mean the same as 3 12 defined in section 422.11H. 3 13 (2) "Tax credit" means the designated biodiesel fuel tax 3 14 credit as provided in this subsection. 3 15 b. The taxes imposed under this division shall be reduced 3 16 by a biodiesel fuel tax credit for each tax year that the 3 17 taxpayer is eligible to claim the tax credit under this 3 18 subsection. In order to be eligible, all of the following 3 19 must apply: 3 20 (1) The taxpayer is a retail dealer. 3 21 (2) The taxpayer operates at least one service station at 3 22 which more than five percent of the total gallons of special 3 23 fuel for diesel engines sold and dispensed through one or more 3 24 metered pumps by the taxpayer is biodiesel fuel. 3 25 (3) The taxpayer complies with requirements of the 3 26 department required to administer this subsection. 3 27 (4) The taxpayer reports information to the department of 3 28 natural resources as provided in section 473.7. 3 29 c. The tax credit shall be calculated separately for each 3 30 service station operated by the taxpayer. The amount of the 3 31 tax credit for each eligible service station is two and one= 3 32 half cents multiplied by the total number of gallons of 3 33 biodiesel fuel sold in excess of five percent of all special 3 34 fuel for diesel engines sold and dispensed through metered 3 35 pumps at that service station during the tax year. 4 1 d. Any credit in excess of the taxpayer's tax liability 4 2 shall be refunded. In lieu of claiming a refund, the taxpayer 4 3 may elect to have the overpayment shown on the taxpayer's 4 4 final, completed return credited to the tax liability for the 4 5 following tax year. 4 6 Sec. 6. Section 473.7, Code 2003, is amended by adding the 4 7 following new subsection: 4 8 NEW SUBSECTION. 14A. Obtain information from retail 4 9 dealers as defined in section 422.11H and maintain records 4 10 regarding the market share and gallons purchased of special 4 11 fuels for diesel engines and biodiesel fuel as provided in 4 12 section 422.11H. 4 13 Sec. 7. APPLICABILITY. The biodiesel fuel tax credits 4 14 provided in sections 422.11H and 422.33 apply to tax years 4 15 beginning on or after January 1, 2004. The department of 4 16 revenue and finance shall perform functions, prior to the 4 17 beginning of that tax year, necessary in order to implement 4 18 the tax credits. 4 19 EXPLANATION 4 20 This bill is patterned after the ethanol=blended gasoline 4 21 tax credit provisions creating a tax credit for retail dealers 4 22 of motor vehicle fuel who sell ethanol=blended gasoline 4 23 (gasoline containing at least 10 percent alcohol). The 4 24 ethanol=blended gasoline tax credit applies to both taxpayers 4 25 filing as individuals under Code chapter 422, division II, and 4 26 businesses under Code chapter 422, division III. Pursuant to 4 27 the bill, a retail dealer may claim a tax credit for the sale 4 28 of biodiesel fuel if the retail dealer operates at least one 4 29 service station at which more than 5 percent of the total 4 30 gallons of special fuel for diesel engines sold is biodiesel 4 31 fuel. According to the bill, the amount of the tax credit for 4 32 each eligible service station is two and one=half cents 4 33 multiplied by the total number of gallons of biodiesel fuel 4 34 sold at that service station during the tax year in excess of 4 35 5 percent of all special fuel for diesel engines sold at that 5 1 service station. The bill also requires retail dealers to 5 2 report information regarding sales of special fuels and 5 3 biodiesel fuel to the department of natural resources. 5 4 Biodiesel fuel is a fuel which is a mixture of diesel fuel 5 5 and processed soybean oil, if at least 20 percent of the mixed 5 6 fuel by volume is processed soybean oil. The bill changes the 5 7 term "soydiesel" fuel to "biodiesel" fuel in Code chapter 159A 5 8 providing for renewable fuels. Code section 452A.2 defines a 5 9 "special fuel" as a fuel used for generating power for the 5 10 propulsion of motor vehicles other than motor fuel. 5 11 The tax credits apply to tax years beginning on or after 5 12 January 1, 2004. 5 13 LSB 2736HC 80 5 14 da/pj/5
Text: HSB266            Text: HSB268