Senate Study Bill 1154 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON NATURAL RESOURCES AND ENVIRONMENT BILL BY CHAIRPERSON DEARDEN) A BILL FOR An Act providing for an alternative motor fuel facility tax 1 credit and including effective date and applicability 2 provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1598XC (6) 84 da/rj

S.F. _____ Section 1. NEW SECTION . 422.11Y Alternative motor fuel 1 facility tax credit. 2 1. The taxes imposed under this division, less the 3 credits allowed under section 422.12, shall be reduced by an 4 alternative motor fuel facility tax credit. In order to be 5 eligible to claim the tax credit, the taxpayer must comply with 6 this section and rules adopted by the department necessary to 7 administer and enforce this section. 8 2. The taxpayer must construct, install, and place in 9 service an alternative motor fuel facility which serves a motor 10 vehicle that is designed by a manufacturer to operate using one 11 of the following: 12 a. A biofuel which is one of the following: 13 (1) Biodiesel blended fuel designated as B-25 or higher as 14 classified pursuant to section 214A.2, and meets the standards 15 provided in that section. 16 (2) E-85 gasoline as defined in section 214A.1, which meets 17 the standards of section 214A.2. 18 b. Compressed natural gas. 19 c. Liquefied natural gas. 20 d. Liquefied petroleum gas. 21 e. Hydrogen. 22 f. Electricity. 23 3. An alternative motor fuel facility is limited to 24 infrastructure, equipment, or machinery used to store, 25 dispense, and meter alternative motor fuel. For liquid fuel, 26 it may include associated pipes and motor fuel pumps or meters. 27 For hydrogen fuel or natural gas, it may include pipes, 28 compressors, or vaporizers. For electric fuel, it may include 29 charging equipment, infrastructure, or batteries. 30 4. The amount of the alternative motor fuel facility tax 31 credit equals thirty percent of the cost to the taxpayer of 32 purchasing the infrastructure, equipment, or machinery and 33 thirty percent of the cost to the taxpayer of installing the 34 infrastructure, equipment, or machinery. 35 -1- LSB 1598XC (6) 84 da/rj 1/ 4

S.F. _____ 5. The alternative motor fuel facility must comply with 1 any applicable federal and state standards and the latest 2 applicable and available A.S.T.M. international specifications. 3 6. The alternative motor fuel facility tax credit may be 4 claimed by a person on a commercial or residential basis. 5 a. A person may claim the tax credit on a commercial basis, 6 if the alternative motor fuel facility is part of a business 7 selling qualified alternative motor fuel on a retail basis, 8 including a dealer as defined in section 214A.1, or may claim 9 the tax credit if the alternative motor fuel facility is used 10 by a business for its own vehicle fleet or employees. The tax 11 credit must be taken in equal installments in three consecutive 12 tax years, beginning with the tax year in which the alternative 13 motor fuel facility is placed in service. If any part of the 14 alternative motor fuel facility is taken out of service and not 15 immediately replaced, the tax credit expires and the taxpayer 16 cannot take any remaining installment of the tax credit. 17 b. A person may claim the tax credit on a residential basis, 18 if the alternative motor fuel facility is part of a home or 19 farm and is used for personal, family, household, or farm use. 20 The entire amount of the tax credit must be claimed in the tax 21 year in which the alternative motor fuel facility is first 22 placed in service. 23 7. Any tax credit in excess of the taxpayer’s tax liability 24 shall be refunded. In lieu of claiming a refund, the taxpayer 25 may elect to have the overpayment shown on the retail dealer’s 26 final, completed return credited to the tax liability for the 27 following tax year. 28 8. A person shall not claim a tax credit under this section 29 for an alternative motor fuel facility that was placed in 30 service on or after January 1, 2015. However, a person who 31 placed the alternative motor fuel facility in service prior to 32 January 1, 2015, may continue to claim the tax credit after 33 that date as if the alternative motor fuel facility were placed 34 in service on January 1, 2012. 35 -2- LSB 1598XC (6) 84 da/rj 2/ 4

S.F. _____ 9. This section is repealed on January 1, 2019. 1 Sec. 2. Section 422.33, Code 2011, is amended by adding the 2 following new subsection: 3 NEW SUBSECTION . 11D. The taxes imposed under this division 4 shall be reduced by an alternative motor fuel facility tax 5 credit for each tax year that the taxpayer is eligible to claim 6 the tax credit under this subsection. 7 a. The taxpayer must claim the tax credit on a commercial 8 basis or residential basis in the same manner as provided 9 in section 422.11Y. The taxpayer must claim the tax credit 10 according to the same requirements, for the same amount, and 11 for the same period as provided in section 422.11Y. The amount 12 of the tax credit shall be calculated in the same manner as 13 provided in section 422.11Y. A taxpayer claiming tax credit on 14 a commercial basis is subject to the same penalty for taking 15 the alternative motor fuel facility out of service as provided 16 in section 422.11Y. 17 b. This subsection is repealed on January 1, 2019. 18 Sec. 3. EFFECTIVE DATE. This Act takes effect January 1, 19 2012. 20 Sec. 4. APPLICABILITY. This Act applies to tax years 21 beginning on and after January 1, 2012. 22 EXPLANATION 23 This bill creates an alternative motor fuel facility 24 tax credit for persons who construct, install, and place in 25 service a facility that stores, dispenses, and meters biodiesel 26 blended fuel with 25 percent or more biodiesel; so-called 27 E-85 gasoline, containing between 70 and 85 percent ethanol; 28 compressed natural gas; liquefied natural gas; liquefied 29 petroleum gas; hydrogen; and electricity. The amount of 30 the tax credit is 30 percent of the cost of purchasing and 31 installing the facility. A person may claim the tax credit 32 on a commercial (as a retailer) or residential basis (for 33 personal, business, or farm use). A person claiming the tax 34 credit on a commercial basis must claim one-third of the tax 35 -3- LSB 1598XC (6) 84 da/rj 3/ 4

S.F. _____ credit for each of three tax years. Any tax credit in excess of 1 the taxpayer’s tax liability is refundable or may be used in 2 calculating a future tax liability. 3 The tax credit applies to tax years beginning on and after 4 January 1, 2012. The taxpayer must place the facility in 5 service by January 1, 2015, but may claim the tax credit for a 6 previous installation after that date. The bill’s provisions 7 are repealed on January 1, 2019. The bill takes effect on 8 January 1, 2012, for tax years beginning on or after that date. 9 -4- LSB 1598XC (6) 84 da/rj 4/ 4