S.F. 143 Section 1. Section 422.7, Code 2015, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 51. a. A taxpayer taking a depreciation 3 allowance under section 168 of the Internal Revenue Code for 4 property described in section 422.11G is not allowed to take 5 the allowance for purposes of this division to the extent that 6 a tax credit is taken for the purchase and installation of 7 the property under section 422.11G. If a credit is taken for 8 the purchase and installation of the property under section 9 422.11G, the taxpayer shall add the amount of the allowance 10 taken on such property to the extent of the amount of the 11 credit. 12 b. A taxpayer taking an expensing allowance under section 13 179 of the Internal Revenue Code for property described in 14 section 422.11G is not allowed to take the allowance for 15 purposes of this division to the extent that a tax credit 16 is taken for the purchase and installation of such property 17 under section 422.11G. If a credit is taken for the purchase 18 and installation of the property under section 422.11G, the 19 taxpayer shall add the amount of the allowance taken on such 20 property to the extent of the amount of the credit. 21 c. This subsection is repealed on January 1, 2020. 22 Sec. 2. NEW SECTION . 422.11G Electric or natural gas 23 vehicle facility tax credit. 24 1. As used in this section, “motor vehicle” means the same 25 as defined in section 322.2. 26 2. The taxes imposed under this division, less the credits 27 allowed under section 422.12, shall be reduced by an electric 28 or natural gas vehicle facility tax credit. In order to be 29 eligible to claim the tax credit, the taxpayer must comply with 30 this section and rules adopted by the director pursuant to 31 chapter 17A necessary to administer and enforce this section. 32 3. a. The taxpayer claiming the tax credit on an 33 agricultural basis as provided in subsection 9 must construct, 34 install, and place in service any of the following: 35 -1- LSB 1380XS (5) 86 da/sc 1/ 8

S.F. 143 (1) An electric vehicle facility that serves a motor vehicle 1 designed by a manufacturer to operate using electricity. 2 (2) A natural gas vehicle facility that serves a motor 3 vehicle that is any of the following: 4 (a) Designed by the manufacturer to operate using 5 compressed natural gas. 6 (b) Converted as an aftermarket alternative fuel vehicle 7 to operate using compressed natural gas if the conversion 8 equipment is certified by the United States environmental 9 protection agency, including as provided in 40 C.F.R. pt. 85. 10 b. The taxpayer claiming the tax credit on a commercial 11 basis as provided in subsection 9 must construct, install, and 12 place in service any of the following: 13 (1) An electric vehicle facility that serves a motor vehicle 14 designed by a manufacturer to operate using electricity. 15 (2) A natural gas vehicle facility that serves a motor 16 vehicle that is any of the following: 17 (a) Designed by the manufacturer to operate using 18 compressed natural gas. 19 (b) Converted as an aftermarket alternative fuel vehicle 20 to operate using compressed natural gas if the conversion 21 equipment is certified by the United States environmental 22 protection agency, including as provided in 40 C.F.R. pt. 85. 23 c. The taxpayer claiming the tax credit on a residential 24 basis as provided in subsection 9 must construct, install, 25 and place in service an electric vehicle facility that serves 26 a motor vehicle designed by a manufacturer to operate using 27 electricity. 28 4. a. After verifying the eligibility for an electric or 29 natural gas vehicle facility tax credit as provided in this 30 section, the department of revenue shall issue the taxpayer an 31 electric or natural gas vehicle facility tax credit certificate 32 which must be attached to the taxpayer’s tax return. An 33 electric or natural gas vehicle facility tax credit certificate 34 shall include all of the following: 35 -2- LSB 1380XS (5) 86 da/sc 2/ 8

S.F. 143 (1) The taxpayer’s name, address, tax identification 1 number, and any other information required by the department 2 of revenue. 3 (2) A description of the infrastructure, equipment, or 4 machinery being purchased and installed which is eligible for 5 the tax credit to be claimed on the taxpayer’s tax return. 6 (3) The amount of the tax credit being claimed. 7 b. The director shall adopt rules establishing criteria 8 for the receipt of applications for electric or natural gas 9 vehicle facility tax credit certificates and the issuance of 10 those certificates. A tax credit certificate shall be issued 11 in the taxpayer’s name and shall expire on or after the last 12 day of the taxable year for which the taxpayer is claiming the 13 tax credit. A tax credit certificate is nontransferable. 14 5. The aggregate amount of electric or natural gas vehicle 15 facility tax credit certificates that may be issued pursuant 16 to this section shall not exceed five million dollars for all 17 tax years that the tax credit is available under this section. 18 The department shall issue the tax credit certificates on a 19 first-come, first-served basis to qualified applicants as 20 follows: 21 a. Two million dollars for electric vehicle facilities. 22 b. Two million dollars for natural gas vehicle facilities. 23 (1) Except as provided in subparagraph (2), a person is not 24 entitled to apply for tax credit certificates for all natural 25 gas vehicle facilities equal to more than two hundred thousand 26 dollars. 27 (2) A person is not entitled to apply for tax credit 28 certificates equal to more than four hundred thousand dollars 29 for all natural gas vehicle facilities that are part of a 30 business or businesses selling qualified compressed natural gas 31 on a retail basis. A person is not eligible to apply for a tax 32 credit under both this subparagraph and subparagraph (1). 33 c. One million dollars for electric vehicle facilities or 34 natural gas vehicle facilities. 35 -3- LSB 1380XS (5) 86 da/sc 3/ 8

S.F. 143 d. Any moneys allocated under paragraph “a” or “b” that are 1 unobligated or unexpended on July 1, 2017, for either electric 2 vehicle facilities or natural gas vehicle facilities. 3 6. An electric or natural gas vehicle facility is limited 4 to infrastructure, equipment, or machinery used to store, 5 dispense, dry, and meter electricity or compressed natural 6 gas. For electricity, it may include charging equipment, 7 infrastructure, or batteries. For compressed natural gas, it 8 may include pipes, compressors, dryers, or vaporizers. 9 7. The amount of the electric or natural gas vehicle 10 facility tax credit equals thirty percent of the total cost to 11 the taxpayer of purchasing the infrastructure, equipment, or 12 machinery and thirty percent of the total cost to the taxpayer 13 of installing the infrastructure, equipment, or machinery. 14 8. The electric or natural gas vehicle facility must comply 15 with any applicable federal and state standards and the latest 16 applicable and available ASTM international specifications. 17 9. The electric or natural gas vehicle facility tax credit 18 may be claimed by a person on an agricultural, commercial, or 19 residential basis as follows: 20 a. A person may claim the tax credit on an agricultural 21 basis if the electric or natural gas vehicle facility is 22 located on land primarily used in the production of a crop as 23 defined in section 202.1 or livestock as defined in section 24 717.1. The electric or natural gas vehicle facility must be 25 used by an agricultural producer as defined in section 15E.202 26 or a person under the management of the agricultural producer. 27 The tax credit must be taken in equal installments in three 28 consecutive tax years, beginning with the tax year in which the 29 electric or natural gas vehicle facility is placed in service. 30 If any part of the electric or natural gas vehicle facility 31 is taken out of service and not immediately replaced, the tax 32 credit expires and the taxpayer cannot take any remaining 33 installment of the tax credit. 34 b. A person may claim the tax credit on a commercial basis 35 -4- LSB 1380XS (5) 86 da/sc 4/ 8

S.F. 143 if the electric or natural gas vehicle facility is part of a 1 business selling qualified electricity or compressed natural 2 gas on a retail basis, or may claim the tax credit if the 3 electric or natural gas vehicle facility is used by a business 4 for its own vehicle fleet or employees. The tax credit must 5 be taken in equal installments in three consecutive tax years, 6 beginning with the tax year in which the electric or natural 7 gas vehicle facility is placed in service. If any part of 8 the electric or natural gas vehicle facility is taken out of 9 service and not immediately replaced, the tax credit expires 10 and the taxpayer cannot take any remaining installment of the 11 tax credit. 12 c. A person may claim the tax credit on a residential basis 13 only for an electric vehicle facility that is for personal, 14 family, or household use. The entire amount of the tax credit 15 must be claimed in the tax year in which the electric vehicle 16 facility is first placed in service. 17 10. Any tax credit in excess of the taxpayer’s tax liability 18 shall be refunded. In lieu of claiming a refund, the taxpayer 19 may elect to have the overpayment shown on the taxpayer’s 20 final, completed return credited to the tax liability for the 21 following tax year. 22 11. An individual may claim the tax credit allowed a 23 partnership, limited liability company, S corporation, estate, 24 or trust electing to have the income taxed directly to the 25 individual. The amount claimed by the individual shall be 26 based upon the pro rata share of the individual’s earnings of 27 the partnership, limited liability company, S corporation, 28 estate, or trust. 29 12. A person shall not claim a tax credit under this section 30 for an electric or natural gas vehicle facility that was placed 31 in service on or after January 1, 2018. However, a person 32 claiming the tax credit on an agricultural or commercial basis 33 who placed the electric or natural gas vehicle facility in 34 service prior to January 1, 2018, may continue to claim the tax 35 -5- LSB 1380XS (5) 86 da/sc 5/ 8

S.F. 143 credit for tax years ending on or after January 1, 2018, as 1 provided in subsection 9, paragraph “a” or “b” , as applicable. 2 13. This section is repealed on January 1, 2020. 3 Sec. 3. Section 422.33, Code 2015, is amended by adding the 4 following new subsection: 5 NEW SUBSECTION . 11. The taxes imposed under this division 6 shall be reduced by an electric or natural gas vehicle facility 7 tax credit for each tax year that the taxpayer is eligible to 8 claim the tax credit under this subsection. 9 a. The taxpayer must claim the tax credit on an agricultural 10 or commercial basis in the same manner as provided in section 11 422.11G. The taxpayer must claim the tax credit according 12 to the same requirements, for the same amount, and for the 13 same period as provided in section 422.11G. The amount of the 14 tax credit shall be calculated in the same manner as provided 15 in section 422.11G. A taxpayer claiming a tax credit on an 16 agricultural or commercial basis is subject to the same penalty 17 for taking the electric or natural gas vehicle facility out of 18 service as provided in section 422.11G. 19 b. This subsection is repealed on January 1, 2020. 20 Sec. 4. Section 422.35, Code 2015, is amended by adding the 21 following new subsection: 22 NEW SUBSECTION . 15. a. A taxpayer taking a depreciation 23 allowance under section 168 of the Internal Revenue Code for 24 property described in section 422.33, subsection 11, is not 25 allowed to take the allowance for purposes of this division 26 to the extent that a tax credit is taken for the purchase and 27 installation of the property under section 422.33, subsection 28 11. If a credit is taken for the purchase and installation of 29 the property under section 422.33, subsection 11, the taxpayer 30 shall add the amount of the allowance taken on such property to 31 the extent of the amount of the credit. 32 b. A taxpayer taking an expensing allowance under section 33 179 of the Internal Revenue Code for property described in 34 section 422.33, subsection 11, is not allowed to take the 35 -6- LSB 1380XS (5) 86 da/sc 6/ 8

S.F. 143 allowance for purposes of this division to the extent that a 1 tax credit is taken for the purchase and installation of such 2 property under section 422.33, subsection 11. If a credit 3 is taken for the purchase and installation of the property 4 under section 422.33, subsection 11, the taxpayer shall add the 5 amount of the allowance taken on such property to the extent of 6 the amount of the credit. 7 c. This subsection is repealed on January 1, 2020. 8 Sec. 5. EFFECTIVE UPON ENACTMENT. This Act, being deemed of 9 immediate importance, takes effect upon enactment. 10 Sec. 6. RETROACTIVE APPLICABILITY. This Act applies 11 retroactively to January 1, 2015, for tax years beginning on 12 or after that date. 13 EXPLANATION 14 The inclusion of this explanation does not constitute agreement with 15 the explanation’s substance by the members of the general assembly. 16 This bill creates an electric or natural gas vehicle 17 facility tax credit for persons who construct, install, and 18 place in service an electric vehicle facility or a natural 19 gas vehicle facility. The amount of the tax credit is 30 20 percent of the total cost of purchasing and of installing the 21 facility. A person may claim the tax credit on an agricultural 22 (farmer), commercial (business), or residential (personal, 23 family, or household) basis. The bill provides that $5 million 24 is dedicated for the issuance of tax credit certificates which 25 must be attached to a person’s tax return in order to claim 26 the tax credit. The bill establishes limits upon the amount 27 of credit that a person may claim for either electric vehicle 28 facilities or natural gas facilities. A person claiming the 29 tax credit on an agricultural or commercial basis may claim 30 the tax credit for the installation of an electric or natural 31 gas facility. The person must claim one-third of the tax 32 credit for each of three tax years. A person claiming the tax 33 credit on a residential basis may claim the tax credit for the 34 installation of an electric vehicle facility. The person must 35 -7- LSB 1380XS (5) 86 da/sc 7/ 8

S.F. 143 claim the tax credit in the tax year in which the electric 1 vehicle facility was first placed in service. Any tax credit 2 in excess of the taxpayer’s tax liability is refundable or may 3 be used in calculating a future tax liability. 4 The taxpayer must place the facility in service before 5 January 1, 2018, but those taxpayers claiming on an 6 agricultural or commercial basis may claim the tax credit for a 7 previous installation after that date. 8 The aggregate amount of electric or natural gas vehicle 9 facility tax credit certificates that may be issued cannot 10 exceed $5 million for all tax years that the tax credit 11 is available. Two million dollars is allocated to support 12 electric vehicle facilities, $2 million is allocated to support 13 natural gas facilities, and $1 million is allocated to support 14 either electric vehicle facilities or natural gas vehicle 15 facilities. As of July 1, 2017, any remaining encumbered or 16 expended moneys are also allocated to support either type of 17 facility. 18 The tax credit applies retroactively to tax years beginning 19 on and after January 1, 2015. The bill’s provisions are 20 repealed on January 1, 2020. The bill takes effect upon 21 enactment. 22 -8- LSB 1380XS (5) 86 da/sc 8/ 8