HF 225 (LSB 1666YH (1) 86)

HOUSE FILE 225

BY  PETTENGILL

A BILL FOR

An Act providing a franchise tax credit for the installation of geothermal energy systems in Iowa and including effective date and retroactive applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 422.60, Code 2015, is amended by adding the following new subsection:
   NEW SUBSECTION.  14.  a.  The taxes imposed under this division shall be reduced by a geothermal energy system tax credit equal to sixty percent of the federal energy credit in section 48 of the Internal Revenue Code allowed for geothermal energy systems described in section 48(a)(3)(A)(iii) and section 48(a)(3)(A)(vii) of the Internal Revenue Code for property located in Iowa.
   b.  Any credit in excess of the tax liability is not refundable but the excess for the tax year may be credited to the tax liability for the following ten years or until depleted, whichever is earlier.
   c.  The director of revenue shall adopt rules to implement this subsection.
    Sec. 2.  EFFECTIVE UPON ENACTMENT.  This Act, being deemed of immediate importance, takes effect upon enactment.
    Sec. 3.  RETROACTIVE APPLICABILITY.  This Act applies retroactively to January 1, 2015, for tax years beginning on or after that date.
EXPLANATION
The inclusion of this explanation does not constitute agreement with

the explanation’s substance by the members of the general assembly.
   This bill provides a franchise tax credit in an amount equal to 60 percent of the federal energy credit provided in section 48 of the Internal Revenue Code for the installation of a geothermal energy system, if the property is located in Iowa. Any credit in excess of the tax liability is nonrefundable, but may be carried forward for up to 10 years.
   The bill takes effect upon enactment and applies retroactively to tax years beginning on or after January 1, 2015.