House File 2489 - Introduced HOUSE FILE BY MAY, STRUYK, SODERBERG, and FREEMAN Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act relating to eligibility requirements for the renewable 2 energy tax credit and providing an effective date. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 6206YH 81 5 kk/je/5 PAG LIN 1 1 Section 1. Section 476C.3, subsection 1, Code Supplement 1 2 2005, is amended to read as follows: 1 3 1. A producer or purchaser of renewable energy may apply 1 4 to the board for a written determination regarding whether a 1 5 facility is an eligible renewable energy facility by 1 6 submitting to the board a written application containing all 1 7 of the following: 1 8 a. Information regarding the ownership of the facility 1 9 including the percentage of equity interest held by each 1 10 owner. 1 11 b. The nameplate generating capacity of the facility or 1 12 energy production capacity equivalent. 1 13 c. Information regarding the facility's initial placement 1 14 in service. 1 15 d. Information regarding the type of facility and what 1 16 type of renewable energy the facility will produce. 1 17 e. A copy of the power purchase agreement or other 1 18 agreement to purchase electricity, hydrogen fuel, methane or 1 19 other biogas, or heat for a commercial purpose which shall 1 20 designate either the producer or purchaser of renewable energy 1 21 as eligible to apply for the renewable energy tax credit. 1 22 f. A letter of credit in an amount reasonably sufficient 1 23 to finance the construction of the facility. 1 24f.g. Any other information the board may require. 1 25 Sec. 2. Section 476C.3, subsection 3, Code Supplement 1 26 2005, is amended by striking the subsection and inserting in 1 27 lieu thereof the following: 1 28 3. A facility loses its approval by the board as an 1 29 eligible renewable energy facility if any of the following 1 30 occur: 1 31 a. The facility is not operational within eighteen months 1 32 after issuance of an approval for the facility by the board. 1 33 b. The owner of the facility does not provide the board 1 34 within ninety days after issuance of an approval for the 1 35 facility by the board an executed power purchase agreement or 2 1 other executed agreement to sell electricity, heat for a 2 2 commercial purpose, methane gas or other biogas, or hydrogen 2 3 fuel generated by the facility to a purchaser of renewable 2 4 energy. 2 5 c. Within one hundred eighty days after issuance of an 2 6 approval for the facility by the board, the owner of the 2 7 facility fails to place an amount equal to twenty percent of 2 8 the total moneys needed to finance the construction of the 2 9 facility in an escrow account until invested in the 2 10 construction of the facility and provide proof to the board 2 11 that the moneys have been placed in escrow as required by this 2 12 paragraph. 2 13 3A. A facility that is granted and thereafter loses 2 14 approval as an eligible renewable energy facility under this 2 15 section may reapply to the board for a new determination. 2 16 Sec. 3. EFFECTIVE DATE. This Act, being deemed of 2 17 immediate importance, takes effect upon enactment. 2 18 EXPLANATION 2 19 This bill relates to the eligibility requirements for the 2 20 renewable energy tax credit. The bill provides that when a 2 21 producer or purchaser of renewable energy applies to the Iowa 2 22 utilities board for a determination regarding whether a 2 23 renewable energy facility is an eligible renewable energy 2 24 facility, the producer or purchaser must provide with the 2 25 application a letter of credit in an amount that is reasonably 2 26 sufficient to finance the construction of the renewable energy 2 27 facility. 2 28 The bill provides that in addition to the current 2 29 requirement that a facility be operational within 18 months 2 30 after receiving approval as an eligible renewable energy 2 31 facility by the board, the owner of the facility must also 2 32 provide the board, within 90 days after approval, an executed 2 33 power purchase agreement or other executed agreement to sell 2 34 electricity, heat for a commercial purpose, methane gas or 2 35 other biogas, or hydrogen fuel generated by the facility to a 3 1 purchaser of renewable energy. The bill requires an owner of 3 2 a facility that has received approval by the board as an 3 3 eligible renewable energy facility to place an amount equal to 3 4 20 percent of the total moneys needed to finance the 3 5 construction of the facility in an escrow account within 180 3 6 days after approval. The owner must provide the board with 3 7 proof that the moneys have been placed in an escrow account as 3 8 required by the bill. 3 9 A facility can lose its approval as a renewable energy 3 10 facility requiring the owner of the facility to reapply for 3 11 approval if the facility is not operational within 18 months, 3 12 if the owner fails to provide an executed power purchase 3 13 agreement or other documentation of the sale of renewable 3 14 energy, or if the owner fails to place an amount equal to 20 3 15 percent of the total moneys needed to finance the construction 3 16 of the facility as required by the bill. However, a facility 3 17 can reapply for a new determination of approval. 3 18 The bill takes effect upon enactment. 3 19 LSB 6206YH 81 3 20 kk:rj/je/5