Senate File 139 - Introduced

SENATE FILE  	 BY	BARTZ

Passed Senate,	Date		Passed House, Date  	 Vote:	Ayes		Nays		Vote:	Ayes	Nays  	 
Approved  	

A BILL FOR

An Act providing for a residual biomass tax credit, and including
effective and applicability dates.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
TLSB 2009XS 83
da/rj/5

PAG LIN

1	1	Section 1.	NEW SECTION.	422.11X	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	This section is repealed December 31, 2016.
1	7	Sec. 2.	Section 422.33, Code 2009, is amended by adding
1	8 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1 12	b.	This subsection is repealed December 31, 2016.
1 13	Sec. 3.	Section 469.31, Code 2009, is amended by adding
1 14 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 2009, is
1 30 amended to read as follows:
1 31	7.	"Cellulosic biomass renewable fuel" biomass" means
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 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 422.11X,
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 an input 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 usable ton
2 20 of residual cellulosic biomass as measured on a dry matter
2 21 basis harvested, stored, and delivered to a biofuel
2 22 manufacturer.	An assay will be performed by the purchaser of
2 23 biomass to determine the usable content and unusable portions
2 24 shall be discounted proportionately.	A taxpayer shall not
2 25 claim a tax credit in excess of thirty=five thousand dollars
2 26 in any tax year.
2 27	3.	A taxpayer's tax return shall include all of the
2 28 following:
2 29	a.	A tax credit certificate issued by the office attached
2 30 to the taxpayer's tax return for the tax year for which the
2 31 tax credit is claimed.
2 32	(1)	The office must review and approve an application for
2 33 a tax credit as provided by rules adopted by the office.	The
2 34 office may approve the application and issue a certificate
35 only if it determines that the taxpayer and the biofuel
1 manufacturer are qualified for the tax credit.
3	2	(2)	A tax credit certificate shall contain the taxpayer's
3	3 name, address, and tax identification number, and any other
3	4 information required by the office.	The tax credit
3	5 certificate shall only list one type of tax to which the tax
3	6 credit may be applied.	The tax credit may only be claimed
3	7 against the type of tax reflected on the certificate.
3	8	b.	Receipts or assay reports provided by the biofuel
3	9 manufacturer attached to the taxpayer's tax return as required
3 10 by the office.
3 11	4.	An individual may claim the tax credit allowed a
3 12 partnership, limited liability company, S corporation, estate,
3 13 or trust electing to have income taxed directly to the
3 14 individual.	The amount claimed by the individual shall be
3 15 based upon the pro rata share of the individual's earnings
3 16 from the partnership, limited liability company, S
3 17 corporation, estate, or trust.
3 18	5.	A tax credit in excess of the taxpayer's liability for
3 19 the tax year may be credited to the tax liability for the
3 20 following five years or until depleted, whichever is earlier.
3 21 A tax credit shall not be carried back to a tax year prior to
3 22 the tax year in which the taxpayer redeems the tax credit.	A
3 23 tax credit shall not be transferable to any other person other
3 24 than the taxpayer's estate or trust upon the taxpayer's death.
3 25	6.	This section is repealed December 31, 2016.
3 26	Sec. 6.	EFFECTIVE AND APPLICABILITY DATE.	This Act takes
3 27 effect January 1, 2011, and applies to tax years beginning on
3 28 or after that date.
3 29	EXPLANATION
3 30	This bill provides a residual biomass tax credit allowed
3 31 against income taxes for individuals under Code chapter 422,
3 32 division II, and businesses under Code chapter 422, division
3 33 III.	The purpose of the tax credit is to stimulate the
3 34 increased use of residual cellulosic biomass as an input in
35 the manufacture of a biofuel (a combustible liquid or gas
1 derived from a biomass that alone or in combination with other
4	2 compounds is capable of fueling an engine or the production of
4	3 steam for industrial heating).
4	4	The amount of the tax credit is $10 for each usable ton of
4	5 residual cellulosic biomass containing less than 65 percent
4	6 lignin, cellulose, or hemicellulose that is to be purchased by
4	7 a biofuel manufacturer.	The tax credit cannot exceed $35,000
4	8 per tax year.
4	9	The bill imposes certain conditions upon a taxpayer who
4 10 must provide or arrange for the harvesting, storage, and
4 11 delivery to a biofuel manufacturer of residual cellulosic
4 12 biomass.
4 13	The bill provides that the taxpayer's tax return must
4 14 include documentation including a tax credit certificate
4 15 issued by the office of energy independence.	The office must
4 16 review and approve an application for a tax credit certificate
4 17 according to its rules, and the taxpayer may be required to
4 18 submit additional information with its tax return.	The bill
4 19 provides for how persons may claim a tax credit who are equity
4 20 holders in a business.	The bill also provides for the
4 21 issuance of a tax credit certificate, and for tax credit to be
4 22 carried forward.
4 23	This tax credit is eliminated on December 31, 2016.
4 24	The bill takes effect January 1, 2011, and applies to tax
4 25 years beginning on or after that date. 4 26 LSB 2009XS 83
4 27 da/rj/5