House File 2452 - Introduced HOUSE FILE 2452 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HF 2174) A BILL FOR An Act creating a geothermal tax credit available against the 1 individual income tax and including effective date and 2 applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 5658HV (3) 86 mm/sc

H.F. 2452 Section 1. NEW SECTION . 422.10A Geothermal tax credit. 1 1. For purposes of this section, unless the context 2 otherwise requires: 3 a. “Qualified geothermal heat pump property” means any 4 equipment that uses the ground or groundwater as a thermal 5 energy source to heat the dwelling unit of the taxpayer or as a 6 thermal energy sink to cool such dwelling unit, which equipment 7 meets the requirements of the federal Energy Star program in 8 effect at the time that the expenditure for such equipment is 9 made. 10 b. “Qualified geothermal heat pump property expenditures” 11 means an expenditure for qualified geothermal heat pump 12 property installed on or in connection with a dwelling unit 13 located in Iowa and used as a residence by the taxpayer. 14 2. The taxes imposed under this division, less the credits 15 allowed under section 422.12, shall be reduced by a geothermal 16 tax credit equal to ten percent of the qualified geothermal 17 heat pump property expenditures made by the taxpayer during the 18 tax year. 19 3. Qualified geothermal heat pump property expenditures 20 shall be deemed to have been made on the date the installation 21 is complete or, in the case of new construction or 22 reconstruction, the date the original use of the structure by 23 the taxpayer begins. 24 4. In the case of a taxpayer whose dwelling unit is part 25 of a multiple housing cooperative organized under chapter 26 499A or a horizontal property regime under chapter 499B, 27 the taxpayer shall be treated as having made the taxpayer’s 28 proportionate share of any qualified geothermal heat pump 29 property expenditures made by the cooperative or the regime. 30 5. Any credit in excess of the tax liability is not 31 refundable but the excess for the tax year may be credited 32 to the tax liability for the following ten years or until 33 depleted, whichever is earlier. 34 6. A taxpayer who claims a credit under this section shall 35 -1- LSB 5658HV (3) 86 mm/sc 1/ 3

H.F. 2452 not claim the geothermal heat pump tax credit under section 1 422.11I, if available, on the same expenditures. 2 Sec. 2. EFFECTIVE DATE. This Act takes effect January 1, 3 2017. 4 Sec. 3. APPLICABILITY. This Act applies to qualified 5 geothermal heat pump property expenditures incurred on or after 6 January 1, 2017. 7 EXPLANATION 8 The inclusion of this explanation does not constitute agreement with 9 the explanation’s substance by the members of the general assembly. 10 This bill creates a geothermal tax credit available 11 against the individual income tax equal to 10 percent 12 of the expenditures for qualified geothermal heat pump 13 property installed on or in connection with a dwelling unit 14 located in Iowa and used as a residence by the taxpayer. 15 “Qualified geothermal heat pump property” and other related 16 terms are defined in the bill. For purposes of the tax 17 credit, expenditures are deemed to be made on the date the 18 installation is complete or, in the case of new construction 19 or reconstruction, the date the original use of the structure 20 begins. If the taxpayer’s dwelling unit is part of a multiple 21 housing cooperative (Code chapter 499A) or a horizontal 22 property regime (Code chapter 499B) the taxpayer is treated as 23 having made a proportionate share of any expenditures made by 24 the cooperative or regime. 25 The tax credit is nonrefundable, but any amount in excess of 26 the taxpayer’s tax liability may be carried forward for up to 27 10 years. 28 A taxpayer who claims the geothermal tax credit is not 29 eligible to claim the geothermal heat pump tax credit under 30 Code section 422.11I, if available, on the same expenditures. 31 Code section 422.11I currently provides a tax credit equal 32 to 20 percent of the federal residential energy efficiency 33 property tax credit for geothermal heat pumps, but that federal 34 credit is scheduled to expire after the 2016 tax year. 35 -2- LSB 5658HV (3) 86 mm/sc 2/ 3

H.F. 2452 The bill takes effect January 1, 2017, and applies to 1 qualified geothermal heat pump property expenditures incurred 2 on or after that date. 3 -3- LSB 5658HV (3) 86 mm/sc 3/ 3