SENATE FILE _____

BY  (PROPOSED COMMITTEE ON NATURAL RESOURCES AND ENVIRONMENT BILL BY CHAIRPERSON DEARDEN)

A BILL FOR

An Act providing for an alternative motor fuel facility tax credit and including effective date and applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  NEW SECTION.  422.11Y  Alternative motor fuel facility tax credit.
   1.  The taxes imposed under this division, less the credits allowed under section 422.12, shall be reduced by an alternative motor fuel facility tax credit. In order to be eligible to claim the tax credit, the taxpayer must comply with this section and rules adopted by the department necessary to administer and enforce this section.
   2.  The taxpayer must construct, install, and place in service an alternative motor fuel facility which serves a motor vehicle that is designed by a manufacturer to operate using one of the following:
   a.  A biofuel which is one of the following:
   (1)  Biodiesel blended fuel designated as B-25 or higher as classified pursuant to section 214A.2, and meets the standards provided in that section.
   (2)  E-85 gasoline as defined in section 214A.1, which meets the standards of section 214A.2.
   b.  Compressed natural gas.
   c.  Liquefied natural gas.
   d.  Liquefied petroleum gas.
   e.  Hydrogen.
   f.  Electricity.
   3.  An alternative motor fuel facility is limited to infrastructure, equipment, or machinery used to store, dispense, and meter alternative motor fuel. For liquid fuel, it may include associated pipes and motor fuel pumps or meters. For hydrogen fuel or natural gas, it may include pipes, compressors, or vaporizers. For electric fuel, it may include charging equipment, infrastructure, or batteries.
   4.  The amount of the alternative motor fuel facility tax credit equals thirty percent of the cost to the taxpayer of purchasing the infrastructure, equipment, or machinery and thirty percent of the cost to the taxpayer of installing the infrastructure, equipment, or machinery.
   5.  The alternative motor fuel facility must comply with any applicable federal and state standards and the latest applicable and available A.S.T.M. international specifications.
   6.  The alternative motor fuel facility tax credit may be claimed by a person on a commercial or residential basis.
   a.  A person may claim the tax credit on a commercial basis, if the alternative motor fuel facility is part of a business selling qualified alternative motor fuel on a retail basis, including a dealer as defined in section 214A.1, or may claim the tax credit if the alternative motor fuel facility is used by a business for its own vehicle fleet or employees. The tax credit must be taken in equal installments in three consecutive tax years, beginning with the tax year in which the alternative motor fuel facility is placed in service. If any part of the alternative motor fuel facility is taken out of service and not immediately replaced, the tax credit expires and the taxpayer cannot take any remaining installment of the tax credit.
   b.  A person may claim the tax credit on a residential basis, if the alternative motor fuel facility is part of a home or farm and is used for personal, family, household, or farm use. The entire amount of the tax credit must be claimed in the tax year in which the alternative motor fuel facility is first placed in service.
   7.  Any tax credit in excess of the taxpayer’s tax liability shall be refunded. In lieu of claiming a refund, the taxpayer may elect to have the overpayment shown on the retail dealer’s final, completed return credited to the tax liability for the following tax year.
   8.  A person shall not claim a tax credit under this section for an alternative motor fuel facility that was placed in service on or after January 1, 2015. However, a person who placed the alternative motor fuel facility in service prior to January 1, 2015, may continue to claim the tax credit after that date as if the alternative motor fuel facility were placed in service on January 1, 2012.
   9.  This section is repealed on January 1, 2019.
   Sec. 2.  Section 422.33, Code 2011, is amended by adding the following new subsection:
   NEW SUBSECTION.  11D.  The taxes imposed under this division shall be reduced by an alternative motor fuel facility tax credit for each tax year that the taxpayer is eligible to claim the tax credit under this subsection. 
   a.  The taxpayer must claim the tax credit on a commercial basis or residential basis in the same manner as provided in section 422.11Y. The taxpayer must claim the tax credit according to the same requirements, for the same amount, and for the same period as provided in section 422.11Y. The amount of the tax credit shall be calculated in the same manner as provided in section 422.11Y. A taxpayer claiming tax credit on a commercial basis is subject to the same penalty for taking the alternative motor fuel facility out of service as provided in section 422.11Y.
   b.  This subsection is repealed on January 1, 2019.
   Sec. 3.  EFFECTIVE DATE.  This Act takes effect January 1, 2012.
   Sec. 4.  APPLICABILITY.  This Act applies to tax years beginning on and after January 1, 2012.
EXPLANATION
   This bill creates an alternative motor fuel facility tax credit for persons who construct, install, and place in service a facility that stores, dispenses, and meters biodiesel blended fuel with 25 percent or more biodiesel; so-called E-85 gasoline, containing between 70 and 85 percent ethanol; compressed natural gas; liquefied natural gas; liquefied petroleum gas; hydrogen; and electricity. The amount of the tax credit is 30 percent of the cost of purchasing and installing the facility. A person may claim the tax credit on a commercial (as a retailer) or residential basis (for personal, business, or farm use). A person claiming the tax credit on a commercial basis must claim one-third of the tax credit for each of three tax years. Any tax credit in excess of the taxpayer’s tax liability is refundable or may be used in calculating a future tax liability.
   The tax credit applies to tax years beginning on and after January 1, 2012. The taxpayer must place the facility in service by January 1, 2015, but may claim the tax credit for a previous installation after that date. The bill’s provisions are repealed on January 1, 2019. The bill takes effect on January 1, 2012, for tax years beginning on or after that date.