S.F. 331 Section 1. NEW SECTION . 422.11Y Green building tax credit. 1 The taxes imposed under this division, less the credits 2 allowed under sections 422.12 and 422.12B, shall be reduced by 3 a green building tax credit under section 473B.4. 4 Sec. 2. Section 422.33, Code 2011, is amended by adding the 5 following new subsection: 6 NEW SUBSECTION . 29. The taxes imposed under this division 7 shall be reduced by a green building tax credit under section 8 473B.4. 9 Sec. 3. NEW SECTION . 473B.1 Definitions. 10 As used in this chapter, unless the context otherwise 11 requires: 12 1. a. “Allowable costs” means amounts properly chargeable 13 to a capital account, other than for land, that are paid or 14 incurred on or after January 1, 2011, for all of the following: 15 (1) Construction or rehabilitation. 16 (2) Commissioning costs allocable to construction or 17 rehabilitation. 18 (3) Interest paid or incurred during the construction or 19 rehabilitation period. 20 (4) Architectural, engineering, and other professional fees 21 allocable to construction or rehabilitation. 22 (5) Closing costs for construction, rehabilitation, or 23 mortgage loans. 24 (6) Recording taxes and filing fees incurred with respect to 25 construction or rehabilitation. 26 (7) Finishes and furnishings consistent with rules adopted 27 by the department under this chapter for lighting, plumbing, 28 electrical wiring, and ventilation for construction or 29 rehabilitation. 30 b. “Allowable costs” does not include any of the following: 31 (1) The cost of telephone systems and computers other than 32 electrical wiring costs. 33 (2) Legal fees allocable to construction or rehabilitation. 34 (3) Site costs, including temporary electric wiring, 35 -1- LSB 2626XS (9) 84 rn/rj 1/ 8

S.F. 331 scaffolding, demolition costs, and fencing and security 1 facilities. 2 (4) Finishes or furnishings that are not consistent with 3 rules adopted by the department under this chapter. 4 2. “Commissioning” means the testing and fine-tuning of 5 heat, ventilating, and air-conditioning systems and other 6 systems to assure proper functioning and adherence to design 7 criteria. 8 3. “Credit allowance year” means the taxable year during 9 which the property, construction, completion, or rehabilitation 10 on which the credit allowed under this chapter is based is 11 originally placed in service. 12 4. “Department” means the department of economic 13 development. 14 5. “Eligible building” means a building located in this 15 state that is used exclusively for commercial or industrial 16 purposes, or is a residential multifamily building with at 17 least twelve dwelling units. 18 Sec. 4. NEW SECTION . 473B.2 Provisional green building 19 certificate. 20 1. A person may apply to the department for provisional 21 certification of eligibility for a green building tax credit by 22 submitting a completed application to the department containing 23 all of the following information: 24 a. Sufficient information to identify each building or space 25 as the department shall require. 26 b. Proof of the person’s ownership or tenancy of the 27 building. 28 c. An itemization of estimated allowable costs with 29 supporting documentation. 30 d. Any other information the department may require. 31 2. If upon receipt of the completed application the 32 department finds that the applicant has shown that the 33 applicant is likely within a reasonable time to place in 34 service property which would warrant the allowance of a 35 -2- LSB 2626XS (9) 84 rn/rj 2/ 8

S.F. 331 credit under section 473B.4, the department shall issue a 1 provisional green building certificate. The provisional green 2 building certificate shall describe the property for which the 3 certificate was issued and shall contain an expiration date. 4 The certificate shall apply only to property placed in service 5 by such expiration date which may be extended at the discretion 6 of the department, in order to avoid unwarranted hardship. 7 3. A person whose application for a provisional green 8 building certificate is denied may file an appeal with the 9 department within sixty days from the date of denial pursuant 10 to the provisions of chapter 17A. 11 Sec. 5. NEW SECTION . 473B.3 Eligibility certificate. 12 1. For each taxable year for which a person claims a green 13 building tax credit under this chapter, the person shall obtain 14 from an architect or professional engineer licensed to practice 15 in this state an eligibility certificate. 16 2. The eligibility certificate shall consist of a 17 certification, under the seal of such architect or engineer, 18 that the building meets the minimum standards of the United 19 States green building council’s leadership in energy and 20 environmental design rating system, or the United States green 21 building council’s leadership in energy and environmental 22 design silver rating standard. The eligibility certification 23 shall be made in accordance with the standards and guidelines 24 adopted by rule by the department and in effect at the time 25 the property which is the basis for the credit was placed 26 in service. The eligibility certificate shall set forth the 27 specific findings upon which the certification was based. 28 3. The eligibility certificate shall include sufficient 29 information to identify each building or space, and such other 30 information as the department shall require. 31 4. The taxpayer shall file a copy of each eligibility 32 certificate with the department. 33 Sec. 6. NEW SECTION . 473B.4 Tax credits. 34 A green building tax credit shall consist of one of the 35 -3- LSB 2626XS (9) 84 rn/rj 3/ 8

S.F. 331 following: 1 1. For new construction of any building that meets 2 the minimum standards of the United States green building 3 council’s leadership in energy and environmental design rating 4 system, a tax credit equal to five percent of the cost of 5 the construction, subject to a maximum credit of one million 6 dollars. 7 2. For new construction of any building that achieves the 8 United States green building council’s leadership in energy and 9 environmental design silver rating standard, a tax credit equal 10 to ten percent of the cost of the construction, subject to a 11 maximum credit of two million dollars. 12 3. For rehabilitation of a building constructed and 13 placed in service prior to January 1, 2011, that meets 14 the minimum standards of the United States green building 15 council’s leadership in energy and environmental design rating 16 system, a tax credit equal to ten percent of the cost of the 17 rehabilitation, subject to a maximum credit of one million 18 dollars. 19 4. For rehabilitation of a building constructed and placed 20 in service prior to January 1, 2011, that achieves the United 21 States green building council’s leadership in energy and 22 environmental design silver rating standard, a tax credit equal 23 to twenty percent of the cost of the rehabilitation, subject to 24 a maximum credit of two million dollars. 25 5. The department of economic development, in consultation 26 with the department of public safety, the department of natural 27 resources, and the department of revenue, may adopt rules 28 authorizing the tax credits issued pursuant to subsections 1 29 through 4 for construction and rehabilitation that achieves 30 superior energy efficiency and environmental performance 31 comparable to the United States green building council’s 32 leadership in energy and environmental design certification. 33 6. Any credit issued pursuant to subsections 1 through 4 34 in excess of tax liability for the credit allowance year is 35 -4- LSB 2626XS (9) 84 rn/rj 4/ 8

S.F. 331 refundable. 1 Sec. 7. NEW SECTION . 473B.5 Application for tax credit 2 certificate. 3 1. To receive a green building tax credit described in 4 section 473B.4, a taxpayer shall file an application with the 5 department for a tax credit certificate. The application shall 6 contain all of the following: 7 a. All applicable provisional green building certificates. 8 b. All applicable eligibility certificates. 9 c. A certificate of occupancy if required. 10 d. Documentation supporting actual allowable costs incurred. 11 e. Any other information required by the department. 12 2. If upon receipt of a completed application, the 13 department finds that the person is qualified for a green 14 building tax credit, the department shall calculate the amount 15 of the tax credit for which the person is eligible and shall 16 issue a green building tax credit certificate to the person or 17 notify the person in writing of its refusal to do so. The tax 18 credit certificate may be applied against tax owed pursuant 19 to chapter 422, division II and division III, for the year in 20 which the property which is the basis for the credit was placed 21 in service. 22 3. The green building tax credit certificate shall state all 23 of the following: 24 a. The year for which the credit may be claimed and a 25 description of the property for which eligibility was granted. 26 b. The certificate’s expiration date and applicability 27 only to property placed in service by such expiration date. 28 Such expiration date may be extended at the discretion of the 29 department, in order to avoid unwarranted hardship. 30 c. The maximum amount of the tax credit allowable. 31 4. The amount of each green building tax credit shall not 32 exceed the limit set forth in the provisional green building 33 certificate obtained pursuant to section 473B.2. 34 5. A person whose application for a green building tax 35 -5- LSB 2626XS (9) 84 rn/rj 5/ 8

S.F. 331 credit certificate is denied may file an appeal with the 1 department within sixty days from the date of denial pursuant 2 to the provisions of chapter 17A. 3 6. If the department has reason to believe that an 4 architect or professional engineer in making any eligibility 5 certification under this chapter engaged in professional 6 misconduct, the department may revoke a provisional green 7 building certificate or green building tax credit certificate 8 issued pursuant to this chapter and report the misconduct to 9 the appropriate professional board or commission. 10 Sec. 8. NEW SECTION . 473B.6 Successor owner or tenant. 11 1. If a green building tax credit is allowed to a building 12 owner pursuant to this chapter with respect to property, and 13 such property or an interest therein is sold, the credit for 14 the period after the sale which would have been allowable under 15 this chapter to the prior owner had the property not been sold 16 shall be allowable to the new owner. A tax credit for the year 17 of sale shall be allocated between the parties on the basis 18 of the number of days during such year that the property or 19 interest was held by each. 20 2. If a tax credit is allowed to a tenant pursuant to 21 this chapter with respect to property, and if such tenancy is 22 terminated but such property remains in use in the building by 23 a successor tenant, the tax credit for the period after such 24 termination which would have been allowable under this chapter 25 to the prior tenant had the tenancy not been terminated shall 26 be allowable to the successor tenant. A tax credit for the 27 year of termination shall be allocated between the parties 28 on the basis of the number of days during such year that the 29 property was used by each. 30 3. Notwithstanding any other provision of law to the 31 contrary, in the case of allowance of a tax credit under 32 this section to a successor owner or tenant, as provided in 33 subsection 1 or 2, the department shall have the authority to 34 reveal to the successor owner or tenant any information, with 35 -6- LSB 2626XS (9) 84 rn/rj 6/ 8

S.F. 331 respect to the credit of the prior owner or tenant, which is 1 the basis for the denial in whole or in part of the credit 2 claimed by such successor owner or tenant. 3 Sec. 9. NEW SECTION . 473B.7 Reporting. 4 On or before January 1, annually, the department shall 5 submit a written report to the director of the office of energy 6 independence, the governor, and the general assembly regarding 7 all of the following: 8 1. The number and value of provisional green building 9 certificates and green building tax credit certificates issued 10 under this chapter. 11 2. The amount of the green building tax credits redeemed. 12 3. The geographical distribution of the provisional 13 green building certificates and green building tax credit 14 certificates issued and redeemed. 15 4. Any other such available information the department may 16 deem meaningful and appropriate. 17 Sec. 10. EFFECTIVE AND APPLICABILITY DATES. This Act, being 18 deemed of immediate importance, takes effect upon enactment and 19 is retroactively applicable to tax years beginning on or after 20 January 1, 2011. 21 EXPLANATION 22 This bill provides for a tax credit on personal and corporate 23 income tax for the construction or rehabilitation of certain 24 buildings certified under specified building standards that 25 promote energy efficiency. Tax credits are available in an 26 amount equal to a percentage of the costs for the construction 27 or rehabilitation of commercial, industrial, or specified 28 residential multifamily buildings. An immediate effective date 29 and retroactive applicability provision is included relating to 30 application of the tax credits. 31 The bill provides that new construction of any building that 32 meets the minimum standards of the United States green building 33 council’s leadership in energy and environmental design rating 34 system shall be eligible for a tax credit equal to five percent 35 -7- LSB 2626XS (9) 84 rn/rj 7/ 8

S.F. 331 of the cost of the construction, subject to a maximum credit 1 of $1 million. For rehabilitation of a building constructed 2 and placed in service prior to January 1, 2011, that meets 3 the minimum standards of the United States green building 4 council’s leadership in energy and environmental design rating 5 system, the bill authorizes a tax credit equal to 10 percent, 6 subject to a maximum credit of $1 million. In the event a 7 newly constructed or rehabilitated building achieves the United 8 States green building council’s leadership in energy and 9 environmental design silver rating standard, the bill doubles 10 these tax credit amounts and maximums. The bill permits the 11 department of economic development, in consultation with the 12 departments of public safety, natural resources, and revenue, 13 to adopt rules authorizing tax credits for construction and 14 rehabilitation that achieves superior energy efficiency and 15 environmental performance comparable to the United States green 16 building council’s leadership in energy and environmental 17 design certification. The bill states that any credit issued 18 in excess of tax liability for the credit allowance year is 19 refundable. 20 The bill specifies procedures regarding obtaining a 21 provisional green building certificate and an eligibility 22 certificate, tax credit application procedures, and provisions 23 regarding allowance of a tax credit with regard to successor 24 owners or tenants. The bill directs the department of economic 25 development to submit a report by January 1 annually regarding 26 the number and value of tax credit certificates issued, the 27 amount redeemed, and their geographical distribution. 28 The bill takes effect upon enactment and applies 29 retroactively to January 1, 2011. 30 -8- LSB 2626XS (9) 84 rn/rj 8/ 8