S.F. 524 Section 1. NEW SECTION . 476.53A Wind and other renewable 1 electric power generation. 2 It is the intent of the general assembly to encourage 3 the development of wind and other renewable electric power 4 generation including but not limited to solar and biomass 5 electric power generation. Wind electric power generation 6 has a proven record of providing a safe and secure source of 7 electricity in this state and the United States and offers 8 the potential for significant additional job creation and 9 other economic development benefits. It is also the intent of 10 the general assembly to encourage the use of solar and wind 11 power to meet local electric needs and the development of 12 transmission capacity to export wind power generated in Iowa. 13 Sec. 2. Section 476B.5, subsection 4, Code 2011, is amended 14 to read as follows: 15 4. The maximum amount of nameplate generating capacity of 16 all qualified facilities the board may find eligible under 17 this chapter shall not exceed one hundred fifty megawatts of 18 nameplate generating capacity. 19 Sec. 3. Section 476C.1, subsection 6, paragraph d, Code 20 2011, is amended to read as follows: 21 d. Was initially placed into service on or after July 1, 22 2005, and before January 1, 2012 2021 . 23 Sec. 4. Section 476C.1, subsection 6, Code 2011, is amended 24 by adding the following new paragraphs: 25 NEW PARAGRAPH . e. For applications filed on or after July 26 1, 2011, is a facility of not less than three-fourths megawatts 27 of nameplate generating capacity or the energy production 28 capacity equivalent if all or a portion of the renewable energy 29 produced is for on-site consumption by the producer. 30 NEW PARAGRAPH . f. For applications filed on or after 31 July 1, 2011, except for wind energy conversion facilities, 32 is a facility of no greater than five megawatts of nameplate 33 generating capacity or the energy production capacity 34 equivalent. 35 -1- LSB 1967SZ (3) 84 rn/nh 1/ 8

S.F. 524 Sec. 5. Section 476C.1, subsection 8, Code 2011, is amended 1 to read as follows: 2 8. “Heat for a commercial purpose” means the heat in British 3 thermal unit equivalents from refuse-derived fuel, methane, or 4 other biogas produced in this state either for commercial use 5 by a producer for on-site consumption or sold to a purchaser of 6 renewable energy for use for a commercial purpose in this state 7 or for use by an institution in this state. 8 Sec. 6. Section 476C.2, subsection 1, Code 2011, is amended 9 to read as follows: 10 1. A producer or purchaser of renewable energy may 11 receive renewable energy tax credits under this chapter in 12 an amount equal to one and one-half cents per kilowatt-hour 13 of electricity, or four dollars and fifty cents per million 14 British thermal units of heat for a commercial purpose, or 15 four dollars and fifty cents per million British thermal units 16 of methane gas or other biogas used to generate electricity, 17 or one dollar and forty-four cents per one thousand standard 18 cubic feet of hydrogen fuel generated by and purchased from 19 an eligible renewable energy facility or used for on-site 20 consumption by the producer . 21 Sec. 7. Section 476C.3, subsection 1, paragraph e, Code 22 2011, is amended to read as follows: 23 e. A Except when the renewable energy is produced for 24 on-site consumption by the producer, a copy of the power 25 purchase agreement or other agreement to purchase electricity, 26 hydrogen fuel, methane or other biogas, or heat for a 27 commercial purpose which shall designate either the producer 28 or purchaser of renewable energy as eligible to apply for the 29 renewable energy tax credit. 30 Sec. 8. Section 476C.3, subsection 3, Code 2011, is amended 31 to read as follows: 32 3. a. A facility that is not operational within thirty 33 months after issuance of an approval for the facility by 34 the board shall cease to be an eligible renewable energy 35 -2- LSB 1967SZ (3) 84 rn/nh 2/ 8

S.F. 524 facility. However, a wind energy conversion facility that is 1 approved as eligible under this section but is not operational 2 within eighteen months due to the unavailability of necessary 3 equipment shall be granted an additional twenty-four months to 4 become operational. 5 b. A facility which notifies the board prior to the 6 expiration of the time periods specified in paragraph “a” 7 that the facility intends to become operational and wishes 8 to preserve its eligibility shall be granted a twelve-month 9 extension. An extension may be renewed for succeeding 10 twelve-month periods if the board is notified prior to the 11 expiration of the extension of the continued intention to 12 become operational during the succeeding period of extension. 13 c. If the owner of a facility discontinues efforts to 14 achieve operational status, the owner shall notify the board. 15 Upon receipt of such notification, the board shall no longer 16 consider the facility as an eligible renewable energy facility 17 under this chapter. 18 d. A facility that is granted and thereafter loses approval 19 may reapply to the board for a new determination. 20 Sec. 9. Section 476C.3, subsection 4, Code 2011, is amended 21 to read as follows: 22 4. The maximum amount of nameplate generating capacity 23 of all wind energy conversion facilities the board may find 24 eligible under this chapter shall not exceed three hundred 25 thirty seventy-five megawatts of nameplate generating capacity. 26 Beginning January 1, 2015, this maximum shall be increased 27 by twenty-five megawatts annually, with the last increase 28 occurring January 1, 2020. The maximum amount of energy 29 production capacity equivalent of all other facilities the 30 board may find eligible under this chapter shall not exceed a 31 combined output of twenty fifty-three megawatts of nameplate 32 generating capacity and one hundred sixty-seven billion British 33 thermal units of heat for a commercial purpose. Of the maximum 34 amount of energy production capacity equivalent of all other 35 -3- LSB 1967SZ (3) 84 rn/nh 3/ 8

S.F. 524 facilities found eligible under this chapter , fifty-five 1 billion British thermal units of heat for a commercial purpose 2 shall be reserved for an eligible facility that is a refuse 3 conversion facility for processed, engineered fuel from a 4 multicounty solid waste management planning area. The maximum 5 amount of energy production capacity the board may find 6 eligible for a single refuse conversion facility is fifty-five 7 billion British thermal units of heat for a commercial purpose. 8 Sec. 10. Section 476C.4, subsections 1 and 2, Code 2011, are 9 amended to read as follows: 10 1. A producer or purchaser of renewable energy may apply to 11 the board for the renewable energy tax credit by submitting to 12 the board all of the following: 13 a. A completed application in a form prescribed by the 14 board. 15 b. A copy of the determination granting approval of the 16 facility as an eligible renewable energy facility by the board. 17 c. A copy of a signed power purchase agreement or other 18 agreement to purchase electricity, hydrogen fuel, methane or 19 other biogas, or heat for a commercial purpose from an eligible 20 renewable energy facility which shall designate either the 21 producer or purchaser of renewable energy as eligible to apply 22 for the renewable energy tax credit. 23 d. Sufficient documentation that the electricity, heat for 24 a commercial purpose, methane gas or other biogas, or hydrogen 25 fuel has been generated by the eligible renewable energy 26 facility and sold to the purchaser of renewable energy. 27 e. To the extent the produced electricity, hydrogen fuel, 28 methane or other biogas, or heat for a commercial purpose is 29 used for on-site consumption, the requirements of paragraphs 30 “c” and “d” shall not be applicable. For such renewable energy 31 production, the owner must submit a certification under penalty 32 of perjury that the claimed amount of electricity, hydrogen 33 fuel, methane or other biogas, or heat for a commercial purpose 34 was produced by the eligible facility and consumed by the 35 -4- LSB 1967SZ (3) 84 rn/nh 4/ 8

S.F. 524 owner. 1 e. f. Any other information the board deems necessary. 2 2. The board shall notify the department of the amount 3 of kilowatt-hours, British thermal units of heat for a 4 commercial purpose, British thermal units of methane gas or 5 other biogas used to generate electricity, or standard cubic 6 feet of hydrogen fuel generated and purchased from an eligible 7 renewable energy facility or generated and used by the producer 8 for on-site consumption . The department shall calculate the 9 amount of the tax credit for which the applicant is eligible 10 and shall issue the tax credit certificate for that amount or 11 notify the applicant in writing of its refusal to do so. An 12 applicant whose application is denied may file an appeal with 13 the department within sixty days from the date of the denial 14 pursuant to the provisions of chapter 17A . 15 Sec. 11. Section 476C.4, subsection 5, Code 2011, is amended 16 to read as follows: 17 5. The department shall not issue a tax credit certificate 18 if the facility approved by the board as an eligible renewable 19 energy facility is not operational within eighteen months after 20 the approval is issued , subject to the extension provisions of 21 section 476C.3, subsection 3 . 22 Sec. 12. Section 476C.5, Code 2011, is amended to read as 23 follows: 24 476C.5 Certificate issuance period. 25 A producer or purchaser of renewable energy may receive 26 renewable energy tax credit certificates for a ten-year period 27 for each eligible renewable energy facility under this chapter . 28 The ten-year period for issuance of the tax credit certificates 29 begins with the date the purchaser of renewable energy first 30 purchases electricity, hydrogen fuel, methane gas or other 31 biogas used to generate electricity, or heat for commercial 32 purposes from the eligible renewable energy facility for 33 which a tax credit is issued under this chapter , or the date 34 the producer of the renewable energy first uses the energy 35 -5- LSB 1967SZ (3) 84 rn/nh 5/ 8

S.F. 524 produced by the eligible renewable energy facility for on-site 1 consumption . Renewable energy tax credit certificates shall 2 not be issued for renewable energy purchased or produced for 3 on-site consumption after December 31, 2021 2030 . 4 EXPLANATION 5 This bill relates to tax credits issued for eligible and 6 qualifying wind energy and renewable energy facilities. 7 The bill provides that it is the intent of the general 8 assembly to encourage the development of wind and other 9 renewable electric power generation, based upon a proven 10 record of providing a safe and secure source of electricity 11 and offering the potential for significant job creation. The 12 bill additionally provides that it is the intent of the general 13 assembly to encourage utilization of solar and wind power 14 to meet local electric needs and develop wind transmission 15 capacity. 16 The bill reduces the maximum amount of nameplate generating 17 capacity of qualified facilities determined eligible to 18 receive the wind energy production tax credit issued pursuant 19 to Code chapter 476B from 150 megawatts to 50 megawatts, and 20 increases the maximum amount of nameplate generating capacity 21 for all wind energy conversion facilities determined eligible 22 to receive the renewable energy tax credit issued pursuant 23 to Code chapter 476C from 330 to 375 megawatts, increasing 24 beginning January 1, 2015, by 25 megawatts annually up to and 25 including January 1, 2020. The bill additionally increases the 26 maximum amount of energy production capacity equivalent of all 27 renewable energy facilities other than wind energy conversion 28 facilities determined eligible to receive the renewable energy 29 tax credit from 20 megawatts combined with other specified 30 British thermal units to 53 megawatts. 31 The bill extends the time period during which an eligible 32 renewable energy facility seeking to qualify for the renewable 33 energy tax credit shall have been placed in service by 11 years 34 to before January 1, 2021, and correspondingly extends the 35 -6- LSB 1967SZ (3) 84 rn/nh 6/ 8

S.F. 524 existing 10-year duration for credit issuance to December 31, 1 2030. 2 The bill adds renewable energy produced for on-site 3 consumption for a commercial purpose as a form of energy 4 produced by a qualifying facility which may apply for the 5 credit on or after July 1, 2011, provided that the facility is 6 capable of producing not less than three-fourths megawatts of 7 nameplate generating capacity or the energy production capacity 8 equivalent, and makes conforming changes in Code chapter 476C. 9 The bill restricts facilities other than wind energy conversion 10 facilities applying for the credit on or after July 1, 2011, 11 to a nameplate generating capacity of no greater than five 12 megawatts. 13 The bill provides that to the extent that electricity, 14 hydrogen fuel, methane or other biogas, or heat for a 15 commercial purpose is used for on-site consumption, current 16 application requirements relating to submission of a signed 17 power purchase agreement with a utility and documentation 18 regarding the sale of the energy produced are not applicable. 19 Instead, the bill provides that the owner must submit a 20 certification under penalty of perjury that the claimed amount 21 of electricity, hydrogen fuel, methane or other biogas, or heat 22 for a commercial purpose was in fact produced by the eligible 23 facility and consumed by the owner. 24 The bill also provides that a facility which notifies 25 the Iowa utilities board that the facility intends to become 26 operational and wishes to preserve its eligibility for a tax 27 credit under Code chapter 476C shall be granted a 12-month 28 extension, beyond a current 18-month maximum, which may 29 be renewed for succeeding 12-month periods if the board is 30 notified prior to the expiration of the period of the continued 31 intention to become operational. The bill specifies that 32 if the owner of a facility discontinues efforts to achieve 33 operational status, the owner shall notify the board. Upon 34 receipt of such notification the board shall immediately remove 35 -7- LSB 1967SZ (3) 84 rn/nh 7/ 8