House File 2274 - Introduced
HOUSE FILE
BY JENKINS
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act providing individual and corporate income tax credits for
2 the purchase and installation of methane gas conversion
3 property by livestock producers to be used to generate
4 electricity and including a retroactive applicability date
5 provision.
6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
7 TLSB 5414YH 81
8 mg/gg/14
PAG LIN
1 1 Section 1. NEW SECTION. 422.11M METHANE GAS CONVERSION
1 2 TAX CREDIT.
1 3 1. The taxes imposed under this division, less the amounts
1 4 of nonrefundable credits allowed under this division, shall be
1 5 reduced by a methane gas conversion tax credit. The amount of
1 6 the credit equals twenty=five percent of the cost of the
1 7 acquisition and installation of methane gas conversion
1 8 property by a livestock producer for the purpose of converting
1 9 methane gas into electricity. A taxpayer claming the tax
1 10 credit allowed under this section shall not be eligible to
1 11 claim a tax credit under chapter 476C with respect to the
1 12 methane gas conversion property.
1 13 2. Any credit in excess of the taxpayer's tax liability
1 14 shall be refunded. In lieu of claiming a refund, the taxpayer
1 15 may elect to have the overpayment shown on the taxpayer's
1 16 final, completed return credited to the tax liability for the
1 17 following tax year.
1 18 3. An individual may claim the tax credit allowed a
1 19 partnership, limited liability company, S corporation, estate,
1 20 or trust electing to have the income taxed directly to the
1 21 individual. The amount claimed by the individual shall be
1 22 based upon the pro rata share of the individual's earnings of
1 23 a partnership, limited liability company, S corporation,
1 24 estate, or trust.
1 25 4. A taxpayer claiming a tax credit under this section
1 26 shall not be precluded, in computing taxable income, from
1 27 using the entire cost of the purchase or installation of the
1 28 methane gas conversion property in determining the amount of
1 29 depreciation or expense deduction under any section of the
1 30 Internal Revenue Code.
1 31 5. For purposes of this section:
1 32 a. "Livestock" means an animal belonging to the bovine,
1 33 caprine, equine, ovine, or porcine species, ostriches, rheas,
1 34 emus, farm deer as defined in section 170.1, or poultry.
1 35 b. "Livestock operation" means an animal feeding operation
2 1 as defined in section 459.102 in which livestock is provided
2 2 care and feeding, or any other area which is used for raising
2 3 crops or other vegetation and upon which livestock is fed or
2 4 allowed to graze.
2 5 c. "Livestock producer" means a person who is the owner
2 6 and operator of livestock subject to care and feeding at a
2 7 livestock operation in which the person holds a legal
2 8 interest. The person may own the livestock or own the
2 9 livestock jointly with another person. The person must be
2 10 actively engaged in the livestock operation by making
2 11 management decisions and performing physical work relating to
2 12 the care and feeding of the livestock on a regular,
2 13 continuous, and substantial basis in a manner that is
2 14 essential to the success of the livestock operation.
2 15 d. "Methane gas conversion property" means personal
2 16 property, real property, and improvements to real property
2 17 used in an operation to collect methane gas or other gases
2 18 produced as a by=product of waste decomposition from a
2 19 livestock operation and to convert the gas to energy to be
2 20 used to generate electricity.
2 21 Sec. 2. Section 422.33, Code Supplement 2005, is amended
2 22 by adding the following new subsection:
2 23 NEW SUBSECTION. 20. a. The taxes imposed under this
2 24 division shall be reduced by a methane gas conversion tax
2 25 credit. The amount of the credit equals twenty=five percent
2 26 of the cost of the acquisition and installation of methane gas
2 27 conversion property by a livestock producer for the purpose of
2 28 converting methane gas into electricity. A taxpayer claming
2 29 the tax credit allowed under this subsection shall not be
2 30 eligible to claim a tax credit under chapter 476C with respect
2 31 to the methane gas conversion property.
2 32 b. Any credit in excess of the taxpayer's tax liability
2 33 shall be refunded. In lieu of claiming a refund, the taxpayer
2 34 may elect to have the overpayment shown on the taxpayer's
2 35 final, completed return credited to the tax liability for the
3 1 following tax year.
3 2 c. A taxpayer claiming a tax credit under this subsection
3 3 shall not be precluded, in computing taxable income, from
3 4 using the entire cost of the purchase or installation of the
3 5 methane gas conversion property in determining the amount of
3 6 depreciation or expense deduction under any section of the
3 7 Internal Revenue Code.
3 8 d. For purposes of this subsection:
3 9 (1) "Livestock" means an animal belonging to the bovine,
3 10 caprine, equine, ovine, or porcine species, ostriches, rheas,
3 11 emus, farm deer as defined in section 170.1, or poultry.
3 12 (2) "Livestock operation" means an animal feeding
3 13 operation as defined in section 459.102 in which livestock is
3 14 provided care and feeding, or any other area which is used for
3 15 raising crops or other vegetation and upon which livestock is
3 16 fed or allowed to graze.
3 17 (3) "Livestock producer" means a person who is the owner
3 18 and operator of livestock subject to care and feeding at a
3 19 livestock operation in which the person holds a legal
3 20 interest. The person may own the livestock or own the
3 21 livestock jointly with another person. The person must be
3 22 actively engaged in the livestock operation by making
3 23 management decisions and performing physical work relating to
3 24 the care and feeding of the livestock on a regular,
3 25 continuous, and substantial basis in a manner that is
3 26 essential to the success of the livestock operation.
3 27 (4) "Methane gas conversion property" means personal
3 28 property, real property, and improvements to real property
3 29 used in an operation to collect methane gas or other gases
3 30 produced as a by=product of waste decomposition from a
3 31 livestock operation and to convert the gas to energy to be
3 32 used to generate electricity.
3 33 Sec. 3. Section 437A.6, subsection 1, paragraph d, Code
3 34 2005, is amended to read as follows:
3 35 d. Methane gas conversion property subject to section
4 1 427.1, subsection 29, or eligible for a tax credit under
4 2 section 422.11M or section 422.33, subsection 20.
4 3 Sec. 4. RETROACTIVE APPLICABILITY DATE. This Act applies
4 4 retroactively to January 1, 2006, for tax years beginning on
4 5 or after that date.
4 6 EXPLANATION
4 7 This bill provides an income tax credit under the
4 8 individual and corporate income taxes equal to 25 percent of
4 9 the cost to a livestock producer of the acquisition and
4 10 installation of methane gas conversion property. Methane gas
4 11 conversion property is personal and real property that is used
4 12 to convert the gas produced from livestock waste decomposition
4 13 into electricity.
4 14 The bill applies retroactively to January 1, 2006, for tax
4 15 years beginning on or after that date.
4 16 LSB 5414YH 81
4 17 mg:nh/gg/14