House File 814 - Introduced HOUSE FILE BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HF 747) (SUCCESSOR TO HSB 57) Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act modifying provisions applicable to facilities qualifying 2 for wind energy production and renewable energy tax credits 3 and including effective and retroactive applicability 4 provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 1649HZ 83 7 rn/mg/8 PAG LIN 1 1 Section 1. Section 476B.1, subsection 4, paragraph d, Code 1 2 2009, is amended to read as follows: 1 3 d. (1) For applications filed on or after March 1, 2008, 1 4 consists of one or more wind turbines connected to a common 1 5 gathering line which have a combined nameplate capacity of no 1 6 less than two megawatts and no more than thirty megawatts. 1 7 (2) For applications filed on or after July 1, 2009, by a 1 8 private college or university, community college, institution 1 9 under the control of the state board of regents, public or 1 10 accredited nonpublic elementary and secondary school, or 1 11 public hospital as defined in section 249J.3, for the 1 12 applicant's own use of qualified electricity, consists of wind 1 13 turbines with a combined nameplate capacity of three=fourths 1 14 of a megawatt or greater. 1 15 Sec. 2. Section 476B.4, Code 2009, is amended to read as 1 16 follows: 1 17 476B.4LIMITATIONSLIMITATION. 1 181. The wind energy production tax credit shall not be 1 19 allowed for any kilowatt=hour of electricity produced on wind 1 20 energy conversion property for which the owner has claimed or 1 21 otherwise received for that property the benefit of special 1 22 valuation under section 427B.26 or section 441.21, subsection 1 23 8, or the exemption from retail sales tax under section 1 24 422.45, subsection 48, Code Supplement 2003, or section 423.3, 1 25 subsection 54, as applicable.1 262.The wind energy production tax credit shall not be 1 27 allowed for any kilowatt=hour of electricity that is sold to a 1 28 related person. Forpurposepurposes of thissubsection1 29 section, persons shall be treated as related to each other if 1 30 such persons would be treated as a single employer under the 1 31 regulations prescribed under section 52(b) of the Internal 1 32 Revenue Code. In the case of a corporation that is a member 1 33 of an affiliated group of corporations filing a consolidated 1 34 return, such corporation shall be treated as selling 1 35 electricity to an unrelated person if such electricity is sold 2 1 to such a person by another member of such group. 2 2 Sec. 3. Section 476B.5, subsection 4, Code 2009, is 2 3 amended to read as follows: 2 4 4. The maximum amount of nameplate generating capacity of 2 5 all qualified facilities the board may find eligible under 2 6 this chapter shall not exceedfourone hundred fifty megawatts 2 7 of nameplate generating capacity. 2 8 Sec. 4. Section 476B.6, subsection 1, Code 2009, is 2 9 amended to read as follows: 2 10 1. a. If a city or a county in which a qualified facility 2 11 is located has enacted an ordinance under section 427B.26 and 2 12 an owner has filed for and received special valuation pursuant 2 13 to that ordinance, the owner is not required to obtain 2 14 approval from the city council or county board of supervisors 2 15 to apply for the wind energy production tax credit pursuant to 2 16 subsection 2. 2 17a.b. (1)To be eligible to receive the wind energy 2 18 production tax credit,If neither a city nor a county in which 2 19 a qualified facility is located has enacted an ordinance under 2 20 section 427B.26, or a qualified facility is not eligible for 2 21 special valuation pursuant to an ordinance adopted by a city 2 22 or a county under section 427B.26, the owner mustfirst2 23 receive approval of the applicable city council or county 2 24 board of supervisors of the city or county in which the 2 25 qualified facility is located in order to be eligible to 2 26 receive the wind energy production tax credit. The 2 27 application for approval may be submitted prior to 2 28 commencement of the construction of the qualified facility but 2 29 shall be submitted no later than the close of the owner's 2 30 first taxable year for which the credit is to be applied for. 2 31 The application must contain the owner's name and address, the 2 32 address of the qualified facility, and the dates of the 2 33 owner's first and last taxable years for which the credit will 2 34 be applied for. Within forty=five days of the receipt of the 2 35 application for approval, the city council or county board of 3 1 supervisors, as applicable, shall either approve or disapprove 3 2 the application. After the forty=five=daylimittime period 3 3 has expired, the application is deemed to be approved. 3 4b.(2) Upon approval ofthean application submitted 3 5 pursuant to subparagraph (1), the owner may apply for the tax 3 6 credit as provided in subsection 2. In addition, approval of 3 7 the application submitted pursuant to subparagraph (1) is 3 8 acceptance by the applicant for the assessment of the 3 9 qualified facility for property tax purposes for a period of 3 10 twelve years and approval by the city council or county board 3 11 of supervisors, as applicable, for the payment of the property 3 12 taxes levied on the qualified property to the state. For 3 13 purposes of property taxation, the qualified facility 3 14 receiving approval of an application submitted pursuant to 3 15 subparagraph (1) shall be centrally assessed and shall be 3 16 exempt from any replacement tax under section 437A.6 for the 3 17 period during which the facility is subject to property 3 18 taxation. The property taxes to be paid to the state are 3 19 those property taxes which make up the consolidated tax levied 3 20 on the qualified facility and which are due and payable in the 3 21 twelve=year period beginning with the first fiscal year 3 22 beginning on or after the end of the owner's first taxable 3 23 year for which the credit is applied for. Upon approval of 3 24 the application, the city council or county board of 3 25 supervisors, as applicable, shall notify the county treasurer 3 26 tostatedesignate on the tax statement which lists the taxes 3 27 on the qualified facilitythatthe amount of the property 3 28 taxesshallto be paid to the department. Payment of the 3 29 designated property taxes to the department shall be in the 3 30 same manner as required for the payment of regular property 3 31 taxes and failure to pay designated property taxes to the 3 32 department shall be treated the same as failure to pay 3 33 property taxes to the county treasurer. 3 34 c. Once the owner of the qualified facility receives 3 35 approval under paragraph"a""b", subsequent approval under 4 1 paragraph"a""b" is not required for the same qualified 4 2 facility for subsequent taxable years. 4 3 Sec. 5. Section 476C.3, subsection 3, Code 2009, is 4 4 amended to read as follows: 4 5 3. A facility that is not operational within thirty months 4 6 after issuance of an approval for the facility by the board 4 7 shall cease to be an eligible renewable energy facility. 4 8 However, a wind energy conversion facility that is approved as 4 9 eligible under this section but is not operational within 4 10 eighteen months due to the unavailability of necessary 4 11 equipment shall be granted an additionaltwelvetwenty=four 4 12 months to become operational. A facility that is granted and 4 13 thereafter loses approval may reapply to the board for a new 4 14 determination. 4 15 Sec. 6. Section 476C.3, subsection 4, Code 2009, is 4 16 amended to read as follows: 4 17 4. The maximum amount of nameplate generating capacity of 4 18 all wind energy conversion facilities the board may find 4 19 eligible under this chapter shall not exceedonethree hundred 4 20eightythirty megawatts of nameplate generating capacity. The 4 21 maximum amount of energy production capacity equivalent of all 4 22 other facilities the board may find eligible under this 4 23 chapter shall not exceed a combined output of twenty megawatts 4 24 of nameplate generating capacity and one hundred sixty=seven 4 25 billion British thermal units of heat for a commercial 4 26 purpose. Of the maximum amount of energy production capacity 4 27 equivalent of all other facilities found eligible under this 4 28 chapter, fifty=five billion British thermal units of heat for 4 29 a commercial purpose shall be reserved for an eligible 4 30 facility that is a refuse conversion facility for processed, 4 31 engineered fuel from a multicounty solid waste management 4 32 planning area. The maximum amount of energy production 4 33 capacity the board may find eligible for a single refuse 4 34 conversion facility is fifty=five billion British thermal 4 35 units of heat for a commercial purpose. 5 1 Sec. 7. REFUNDS. Refunds of taxes, interest, or penalties 5 2 which may arise from claims resulting from the amendment of 5 3 section 476B.4 in this Act, for the exemption of sales of wind 5 4 energy conversion property as provided in section 423.3, 5 5 subsection 54, occurring between January 1, 2008, and the 5 6 effective date of this Act, shall be limited to one hundred 5 7 thousand dollars in the aggregate and shall not be allowed 5 8 unless refund claims are filed prior to October 1, 2009, 5 9 notwithstanding any other provision of law. If the amount of 5 10 claims totals more than one hundred thousand dollars in the 5 11 aggregate, the department of revenue shall prorate the one 5 12 hundred thousand dollars among all claimants in relation to 5 13 the amounts of the claimants' valid claims. Claimants shall 5 14 not be entitled to interest on any refunds. 5 15 Sec. 8. RENEWABLE ENERGY TAX CREDIT ELIGIBILITY STUDY. 5 16 The utilities board of the utilities division of the 5 17 department of commerce shall conduct a study to evaluate 5 18 whether procedures applicable to eligible renewable energy 5 19 facilities which have been approved for the renewable energy 5 20 tax credit but are not yet operational pursuant to section 5 21 476C.3, subsection 3, and eligible renewable energy facilities 5 22 which have been placed on a waiting list for approval pursuant 5 23 to section 476C.3, subsection 5, are in need of modification. 5 24 The study shall include a survey of each facility which has 5 25 been approved to determine the extent to which progress has 5 26 been made toward achieving operational status. The study 5 27 shall also include a survey of each facility which has been 5 28 determined eligible and is awaiting approval, to ascertain 5 29 whether the facility continues to seek approval and is 5 30 committed to becoming operational once approval is obtained. 5 31 Based on the results of the surveys, the board shall submit 5 32 recommendations to the general assembly by January 1, 2010, 5 33 regarding whether statutory or procedural modifications are 5 34 necessary to ensure that facilities are being effectively and 5 35 efficiently maintained in an approved or eligible status. 6 1 Sec. 9. EFFECTIVE AND APPLICABILITY DATES. The sections 6 2 of this Act enacting section 476B.1, subsection 4, paragraph 6 3 "d", subparagraph (1), and amending sections 476B.4 and 6 4 476B.6, being deemed of immediate importance, take effect upon 6 5 enactment and apply retroactively to January 1, 2008, for tax 6 6 years beginning on or after that date. 6 7 EXPLANATION 6 8 This bill modifies eligibility requirements applicable to 6 9 the wind energy production tax credit established in Code 6 10 chapter 476B and the renewable energy tax credit established 6 11 in Code chapter 476C. 6 12 With regard to the wind energy production tax credit, the 6 13 bill provides for a maximum combined nameplate capacity 6 14 restriction of no more than 30 megawatts for applicants for 6 15 the credit. The bill also adds to the definition of 6 16 "qualified facility", for applications filed on or after July 6 17 1, 2009, by a private college or university, community 6 18 college, institution under the control of the state board of 6 19 regents, a public or accredited nonpublic primary or secondary 6 20 school, or public hospital as defined in Code section 249J.3, 6 21 for the applicant's own use of qualified electricity a wind 6 22 turbine with a combined nameplate capacity of three=fourths of 6 23 a megawatt or greater. 6 24 The bill deletes a provision which had prevented 6 25 eligibility for the wind energy production tax credit for any 6 26 kilowatt=hour of electricity produced on wind energy 6 27 conversion property for which the owner had claimed or 6 28 received specified special property tax valuation or sales tax 6 29 exemptions, thus preserving credit availability for owners 6 30 having received special valuation or having claimed the sales 6 31 tax exemptions. Because of the retroactivity of the 6 32 elimination of the restriction of the receipt of the tax 6 33 credit to those who have not received the sales tax exemption, 6 34 a provision for refund of sales tax paid is included in the 6 35 bill. These provisions and the provision regarding a maximum 7 1 combined nameplate capacity restriction take effect upon 7 2 enactment and apply retroactively to January 1, 2008, for tax 7 3 years beginning on or after that date. 7 4 The bill changes a provision specifying the maximum amount 7 5 of nameplate generating capacity of all qualifying facilities 7 6 under Code chapter 476B, currently at 450 megawatts of 7 7 nameplate generating capacity, to 150 megawatts. 7 8 With regard to the renewable energy tax credit, the bill 7 9 provides for an extension of time for a wind energy conversion 7 10 facility to become operational following issuance of an 7 11 approval from the current period of 12 additional months to 24 7 12 additional months. 7 13 The bill changes a provision specifying the maximum amount 7 14 of nameplate generating capacity for all eligible wind energy 7 15 conversion facilities under Code chapter 476C, currently at 7 16 180 megawatts of nameplate generating capacity, to 330 7 17 megawatts. 7 18 Additionally, the bill directs the utilities board of the 7 19 utilities division of the department of commerce to conduct a 7 20 study to evaluate whether procedures applicable to eligible 7 21 renewable energy facilities which have been approved for the 7 22 renewable energy tax credit under Code chapter 476C but are 7 23 not yet operational, and facilities which have been placed on 7 24 a waiting list for approval, are in need of modification. The 7 25 board is required to submit recommendations to the general 7 26 assembly by January 1, 2010, regarding whether statutory or 7 27 procedural modifications appear necessary. 7 28 LSB 1649HZ 83 7 29 rn/mg/8