Text: HSB313            Text: HSB315


House Study Bill 314

HOUSE FILE BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON VAN FOSSEN) Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act providing a wind energy production tax credit under the 2 individual and corporate income taxes, the franchise tax, and 3 insurance premiums tax and including an applicability date 4 provision. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 2813YC 80 7 mg/pj/5 PAG LIN 1 1 Section 1. NEW SECTION. 422.11H WIND ENERGY PRODUCTION 1 2 TAX CREDIT. 1 3 The taxes imposed under this division, less the credits 1 4 allowed under sections 422.12 and 422.12B, shall be reduced by 1 5 a wind energy production tax credit allowed under chapter 1 6 476B. 1 7 Sec. 2. Section 422.33, Code 2003, is amended by adding 1 8 the following new subsection: 1 9 NEW SUBSECTION. 14. The taxes imposed under this division 1 10 shall be reduced by a wind energy production tax credit 1 11 allowed under chapter 476B. 1 12 Sec. 3. Section 422.60, Code 2003, is amended by adding 1 13 the following new subsection: 1 14 NEW SUBSECTION. 7. The taxes imposed under this division 1 15 shall be reduced by a wind energy production tax credit 1 16 allowed under chapter 476B. 1 17 Sec. 4. NEW SECTION. 432.12D WIND ENERGY PRODUCTION TAX 1 18 CREDIT. 1 19 The taxes imposed under this chapter shall be reduced by a 1 20 wind energy production tax credit allowed under chapter 476B. 1 21 Sec. 5. NEW SECTION. 476B.1 DEFINITIONS. 1 22 For purposes of this chapter, unless the context otherwise 1 23 requires: 1 24 1. "Board" means the utilities board within the utilities 1 25 division of the department of commerce. 1 26 2. "Department" means the department of revenue and 1 27 finance. 1 28 3. "Qualified electricity" means electricity produced from 1 29 wind at a qualified facility. 1 30 4. "Qualified facility" means an electrical production 1 31 facility that meets all of the following: 1 32 a. Produces electricity from wind. 1 33 b. Is located in Iowa. 1 34 c. Was originally placed in service on or after July 1, 1 35 2004, but before July 1, 2009. 2 1 Sec. 6. NEW SECTION. 276B.2 GENERAL RULE. 2 2 The owner of a qualified facility shall, for each kilowatt= 2 3 hour of qualified electricity that the owner sells during the 2 4 ten=year period beginning on the date the qualified facility 2 5 was originally placed in service, be allowed a wind energy 2 6 production tax credit to the extent provided in this chapter 2 7 against the tax imposed in chapter 422, divisions II, III, and 2 8 V, and chapter 432. 2 9 Sec. 7. NEW SECTION. 476B.3 CREDIT AMOUNT. 2 10 1. The wind energy production tax credit allowed under 2 11 this chapter equals the credit amount for the calendar year 2 12 multiplied by the number of kilowatt=hours of qualified 2 13 electricity sold by the owner during the taxable year 2 14 beginning in that calendar year. The credit amount equals one 2 15 cent for the 2004 calendar year for taxable years beginning in 2 16 the 2004 calendar year. The credit amount shall be adjusted 2 17 for inflation each calendar year for taxable years beginning 2 18 in that calendar year. The adjustment for inflation shall be 2 19 made by multiplying the credit amount for the 2004 calendar 2 20 year by the inflation adjustment factor for the calendar year. 2 21 If the adjustment amount is not a multiple of one=tenth of one 2 22 cent, such amount shall be rounded to the nearest one=tenth of 2 23 one cent. 2 24 2. For purposes of this section, "inflation adjustment 2 25 factor" means, with respect to any calendar year, a fraction, 2 26 the numerator of which is the gross domestic product implicit 2 27 price deflator for the preceding calendar year and the 2 28 denominator of which is the gross domestic product implicit 2 29 price deflator for the 2003 calendar year. The term "gross 2 30 domestic product implicit price deflator" means the most 2 31 recent revision of the implicit price deflator for the gross 2 32 domestic product as computed and published by the United 2 33 States department of commerce before March 15 of the calendar 2 34 year. The adjusted credit amount shall be published by the 2 35 board no later than April 15 of each calendar year. 3 1 Computation of the inflation adjustment factor and adjusted 3 2 credit amount by the board are not rules as defined in section 3 3 17A.2. 3 4 Sec. 8. NEW SECTION. 476B.4 LIMITATIONS. 3 5 1. The wind energy production tax credit shall not be 3 6 allowed for any kilowatt=hour of electricity produced on wind 3 7 energy conversion property for which the owner has claimed or 3 8 otherwise received for that property the benefit of special 3 9 valuation under section 427B.26 or section 441.21, subsection 3 10 8, or the exemption from retail sales tax under section 3 11 422.45, subsection 48. 3 12 2. The wind energy production tax credit shall not be 3 13 allowed for any kilowatt=hour of electricity that is sold to a 3 14 related person. For purpose of this subsection, persons shall 3 15 be treated as related to each other if such persons would be 3 16 treated as a single employer under the regulations prescribed 3 17 under section 52(b) of the Internal Revenue Code. In the case 3 18 of a corporation that is a member of an affiliated group of 3 19 corporations filing a consolidated return, such corporation 3 20 shall be treated as selling electricity to an unrelated person 3 21 if such electricity is sold to such a person by another member 3 22 of such group. 3 23 Sec. 9. NEW SECTION. 476B.5 APPLICATION FOR TAX CREDIT 3 24 CERTIFICATES. 3 25 1. To receive the wind energy production tax credit, an 3 26 owner of the qualified facility must submit an application for 3 27 a tax credit certificate to the board not later than thirty 3 28 days after the close of its taxable year. The owner's 3 29 application must contain, but need not be limited to, all of 3 30 the following information: the owner's name, tax 3 31 identification number, and address, the number of kilowatt= 3 32 hours of qualified electricity sold by the owner during the 3 33 preceding taxable year, the address of the qualified facility 3 34 at which the qualified electricity was produced, a certified 3 35 statement of the number, if any, of kilowatt=hours of 4 1 electricity produced on wind energy conversion property for 4 2 which the owner has claimed or otherwise received for that 4 3 property the benefit of special valuation under section 4 4 427B.26 or section 441.21, subsection 8, or the exemption from 4 5 the retail sales tax under section 422.45, subsection 48, and 4 6 the denomination that each tax credit certificate is to carry. 4 7 2. The board shall, in conjunction with the department, 4 8 prescribe appropriate forms and instructions to enable owners 4 9 to claim the tax credit allowed under this chapter. If the 4 10 board prescribes these forms and instructions, an owner's 4 11 application for a tax credit certificate shall not be valid 4 12 unless made on and in accordance with these forms and 4 13 instructions. 4 14 Sec. 10. NEW SECTION. 476B.6 ISSUANCE OF TAX CREDIT 4 15 CERTIFICATES. 4 16 1. If the owner meets the criteria for eligibility for the 4 17 wind energy production tax credit, the board shall issue one 4 18 or more tax credit certificates to the owner not later than 4 19 thirty days after the application is submitted to the board. 4 20 Each tax credit certificate must contain the owner's name, 4 21 address, and tax identification number, amount of tax credits, 4 22 and the expiration date of the tax credit certificate, which 4 23 shall be seven years from its date of issuance and any other 4 24 information required by the department. Once issued by the 4 25 board, the tax credit certificate shall be binding on the 4 26 board and the department and shall not be modified, 4 27 terminated, or rescinded. 4 28 2. If the tax credit application is filed by a 4 29 partnership, limited liability company, S corporation, estate, 4 30 trust, or other reporting entity all of the income of which is 4 31 taxed directly to its equity holders or beneficiaries, the tax 4 32 credit certificate may, at the election of the owner, be 4 33 issued directly to equity holders or beneficiaries of the 4 34 owner in proportion to their pro rata share of the income of 4 35 such entity. If the owner elects to have the tax credit 5 1 certificate issued directly to its equity holders or 5 2 beneficiaries, the owner must, in the application made under 5 3 section 476B.5, identify its equity holders or beneficiaries, 5 4 and the amount of such entity's income that is allocable to 5 5 each equity holder or beneficiary. 5 6 Sec. 11. NEW SECTION. 476B.7 TRANSFER OF TAX CREDIT 5 7 CERTIFICATES. 5 8 Wind energy production tax credit certificates issued under 5 9 this chapter may be transferred to any person or entity. 5 10 Within thirty days of transfer, the transferee must submit the 5 11 transferred tax credit certificate to the board along with a 5 12 statement containing the transferee's name, tax identification 5 13 number, and address, and the denomination that each 5 14 replacement tax credit certificate is to carry and any other 5 15 information required by the department. Within thirty days of 5 16 receiving the transferred tax credit certificate and the 5 17 transferee's statement, the board shall issue one or more 5 18 replacement tax credit certificates to the transferee. Each 5 19 replacement certificate must contain the information required 5 20 under section 476B.6 and must have the same expiration date 5 21 that appeared in the transferred tax credit certificate. Tax 5 22 credit certificate amounts of less than the minimum amount 5 23 established by rule of the board shall not be transferable. A 5 24 tax credit shall not be claimed by a transferee under this 5 25 chapter until a replacement tax credit certificate identifying 5 26 the transferee as the proper holder has been issued. 5 27 The tax credit shall only be transferred once. The 5 28 transferee may use the amount of the tax credit transferred 5 29 against the taxes imposed under chapter 422, divisions II, 5 30 III, and V, and chapter 432 for any tax year the original 5 31 transferor could have claimed the tax credit. Any 5 32 consideration received for the transfer of the tax credit 5 33 shall not be included as income under chapter 422, divisions 5 34 II, III, and V. Any consideration paid for the transfer of 5 35 the tax credit shall not be deducted from income under chapter 6 1 422, divisions II, III, and V. 6 2 Sec. 12. NEW SECTION. 476B.8 USE OF TAX CREDIT 6 3 CERTIFICATES. 6 4 To claim a wind energy production tax credit under this 6 5 chapter, a taxpayer must attach one or more tax credit 6 6 certificates to the taxpayer's tax return. The tax credit 6 7 certificate or certificates attached to the taxpayer's tax 6 8 return shall be issued in the taxpayer's name, expire on or 6 9 after the last day of the taxable year for which the taxpayer 6 10 is claiming the tax credit, and show a tax credit amount equal 6 11 to or greater than the tax credit claimed on the taxpayer's 6 12 tax return. Any tax credit in excess of the taxpayer's tax 6 13 liability for the taxable year may be credited to the 6 14 taxpayer's tax liability for the following seven taxable years 6 15 or until depleted, whichever is the earlier. 6 16 Sec. 13. NEW SECTION. 476B.9 REGISTRATION OF TAX CREDIT 6 17 CERTIFICATES. 6 18 The board shall, in conjunction with the department, 6 19 develop a system for the registration of the wind energy 6 20 production tax credit certificates issued or transferred under 6 21 this chapter and a system that permits verification that any 6 22 tax credit claimed on a tax return is valid and that transfers 6 23 of the tax credit certificates are made in accordance with the 6 24 requirements of this chapter. The tax credit certificates 6 25 issued under this chapter shall not be classified as a 6 26 security pursuant to chapter 502. 6 27 Sec. 14. APPLICABILITY DATE. This Act applies to tax 6 28 years beginning on or after January 1, 2004. 6 29 EXPLANATION 6 30 This bill provides a wind energy production tax credit to 6 31 be used to offset a taxpayer's tax liability under the 6 32 individual or corporate income tax, franchise tax, or 6 33 insurance premiums tax. The credit is based upon the number 6 34 of kilowatt=hours of electricity produced and sold by a 6 35 qualified facility that uses wind energy to generate 7 1 electricity. The credit amount is determined by multiplying 7 2 those kilowatt=hours by one cent. This one cent is adjusted 7 3 for inflation each year. A qualified facility is one located 7 4 in Iowa that was originally placed in operation between July 7 5 1, 2004, and June 30, 2009. 7 6 The credit is nonrefundable. However, the credit may be 7 7 transferred by the taxpayer to another taxpayer or any credit 7 8 not used by the taxpayer may be carried forward for up to 7 9 seven years. 7 10 The bill applies starting with a tax year beginning on or 7 11 after January 1, 2004. 7 12 LSB 2813YC 80 7 13 mg/pj/5.1
Text: HSB313            Text: HSB315