Text: HF2501            Text: HF2503


House File 2502

HOUSE FILE BY JACOBY Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act providing for a residual biomass tax credit, and including 2 effective and applicability dates. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 5602HH 82 5 da/rj/5 PAG LIN 1 1 Section 1. NEW SECTION. 422.11V RESIDUAL BIOMASS TAX 1 2 CREDIT. 1 3 1. The taxes imposed under this division, less the credits 1 4 allowed under section 422.12, shall be reduced by a residual 1 5 biomass tax credit as allowed under section 469.41. 1 6 2. This section is repealed December 31, 2015. 1 7 Sec. 2. Section 422.33, Code Supplement 2007, is amended 1 8 by adding the following new subsection: 1 9 NEW SUBSECTION. 11D. a. The taxes imposed under this 1 10 division shall be reduced by a residual biomass tax credit as 1 11 allowed under section 469.41. 1 12 b. This subsection is repealed December 31, 2015. 1 13 Sec. 3. Section 469.31, Code Supplement 2007, is amended 1 14 by adding the following new subsections: 1 15 NEW SUBSECTION. 4A. "Biofuel" means a combustible liquid 1 16 or gas derived from a biomass that alone or in combination 1 17 with other compounds is capable of fueling an engine or being 1 18 burned to produce steam for industrial heating. "Biofuel" 1 19 includes but is not limited to ethanol or biodiesel as defined 1 20 in section 214A.1. 1 21 NEW SUBSECTION. 4B. "Biofuel manufacturer" means a 1 22 biobased materials industry organized as a business 1 23 association in this state that produces biofuel. 1 24 NEW SUBSECTION. 11. "Residual cellulosic biomass" means 1 25 that type of cellulosic biomass that does not have nutritional 1 26 or caloric value when fed to agricultural animals, including 1 27 but not limited to wheat and rice straw, corn stalks and cobs, 1 28 seed husks and hulls, and manure. 1 29 Sec. 4. Section 469.31, subsection 7, Code Supplement 1 30 2007, is amended to read as follows: 1 31 7. "Cellulosic biomass renewable fuel" biomass" means 1 32 renewable fuel derived from a lignocellulosic or 1 33 hemicellulosic lignocellulosic matter that contains any 1 34 combination of lignin, cellulose, or hemicellulose that 1 35 comprises at least sixty=five percent of the material and dry 2 1 matter basis. "Cellulosic biomass" includes matter that is 2 2 deriving from nonfood or animal feed sources and available on 2 3 a renewable or recurring basis, including dedicated energy 2 4 crops and trees, wood and wood residues, plants, grasses, 2 5 agricultural residues, fiber, animal wastes and other waste 2 6 materials, refuse=derived fuel, and municipal solid waste. 2 7 7A. "Cellulosic biomass renewable fuel" means a renewable 2 8 fuel derived from cellulosic biomass. 2 9 Sec. 5. NEW SECTION. 469.41 RESIDUAL BIOMASS TAX CREDIT. 2 10 A residual biomass tax credit is allowed under this 2 11 section. The tax credit is allowed against the taxes imposed 2 12 in chapter 422, division II, as provided in section 422.11V, 2 13 and in chapter 422, division III, as provided in section 2 14 422.33. 2 15 1. The purpose of the tax credit is to stimulate the 2 16 increased use of residual cellulosic biomass as a feedstock in 2 17 the manufacture of a biofuel or other forms of renewable 2 18 energy. 2 19 2. The tax credit equals ten dollars for each ton of 2 20 residual cellulosic biomass as measured on a dry matter basis. 2 21 An assay will be performed by the purchaser of biomass to 2 22 determine the usable content and unusable portions shall be 2 23 discounted proportionately. A taxpayer shall not claim a tax 2 24 credit in excess of thirty=five thousand dollars in any tax 2 25 year. 2 26 3. A taxpayer shall not claim a tax credit under this 2 27 section, unless all of the following applies: 2 28 a. The taxpayer is qualified to provide for the storage, 2 29 processing, and delivery of residual cellulosic biomass to a 2 30 biofuel manufacturer. 2 31 b. The biofuel manufacturer is qualified to actively 2 32 produce biofuel on a commercially viable scale. 2 33 4. A taxpayer's tax return shall include all of the 2 34 following: 2 35 a. A tax credit certificate issued by the office attached 3 1 to the taxpayer's tax return for the tax year for which the 3 2 tax credit is claimed. 3 3 (1) The office must review and approve an application for 3 4 a tax credit as provided by rules adopted by the office. The 3 5 office may approve the application and issue a certificate 3 6 only if it determines that the taxpayer and the biofuel 3 7 manufacturer are qualified for the tax credit. 3 8 (2) A tax credit certificate shall contain the taxpayer's 3 9 name, address, and tax identification number, and any other 3 10 information required by the office. The tax credit 3 11 certificate shall only list one type of tax to which the tax 3 12 credit may be applied. Once issued, the tax credit 3 13 certificate shall not be terminated or rescinded. The tax 3 14 credit may only be claimed against the type of tax reflected 3 15 on the certificate. 3 16 b. Receipts or assay reports provided by the biofuel 3 17 manufacturer attached to the taxpayer's tax return as required 3 18 by the office. 3 19 5. A tax credit in excess of the taxpayer's liability for 3 20 the tax year may be credited to the tax liability for the 3 21 following five years or until depleted, whichever is earlier. 3 22 A tax credit shall not be carried back to a tax year prior to 3 23 the tax year in which the taxpayer redeems the tax credit. A 3 24 tax credit shall not be transferable to any other person other 3 25 than the taxpayer's estate or trust upon the taxpayer's death. 3 26 6. This section is repealed December 31, 2015. 3 27 Sec. 6. EFFECTIVE AND APPLICABILITY DATE. This Act takes 3 28 effect January 1, 2010, and applies to tax years beginning on 3 29 or after that date. 3 30 EXPLANATION 3 31 This bill provides a residual biomass tax credit allowed 3 32 against income taxes for individuals under Code chapter 422, 3 33 division II, and businesses under Code chapter 422, division 3 34 III. The purpose of the tax credit is to stimulate the 3 35 increased use of residual cellulosic biomass as a feedstock in 4 1 the manufacture of a biofuel (a combustible liquid or gas 4 2 derived from a biomass that alone or in combination with other 4 3 compounds is capable of fueling an engine or the production of 4 4 steam for industrial heating). 4 5 The amount of the tax credit is $10 for each ton of 4 6 residual cellulosic biomass containing less than 65 percent 4 7 lignin, cellulose, or hemicellulose that is to be purchased by 4 8 a biofuel manufacturer. The tax credit cannot exceed $35,000 4 9 per tax year. 4 10 The bill imposes certain conditions upon a taxpayer who 4 11 must demonstrate that they are qualified to provide for the 4 12 storage, processing, and delivery of residual cellulosic 4 13 biomass to a biofuel manufacturer and upon a biofuel 4 14 manufacturer who must be organized in this state and qualified 4 15 to actively produce biofuel on a commercially viable scale. 4 16 The bill provides that the taxpayer's tax return must 4 17 include documentation including a tax credit certificate 4 18 issued by the office of energy independence. The office must 4 19 review and approve an application for a tax credit certificate 4 20 according to its rules, and the taxpayer may be required to 4 21 submit additional information with its tax return. The bill 4 22 also provides for the issuance of a tax credit certificate, 4 23 and for tax credit to be carried forward. 4 24 This tax credit is eliminated on December 31, 2015. 4 25 The bill takes effect January 1, 2010, and applies to tax 4 26 years beginning on or after that date. 4 27 LSB 5602HH 82 4 28 da/rj/5
Text: HF2501            Text: HF2503