S.F. 2319 Section 1. Section 422.7, Code 2016, 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amount of the allowance taken on such 20 property to the extent of the amount of the credit. 21 c. This subsection is repealed on January 1, 2025. 22 Sec. 2. NEW SECTION . 422.11G Alternative fuel vehicle 23 facility tax credit. 24 1. As used in this section, unless the context otherwise 25 requires: 26 a. “Alternative fuel” means electricity, compressed natural 27 gas, or liquid propane gas. 28 b. “Motor vehicle” means a vehicle that is self-propelled, 29 including but not limited to automobiles, trucks, motorcycles, 30 all-terrain vehicles, and implements of husbandry. 31 2. The taxes imposed under this division, less the 32 credits allowed under section 422.12, shall be reduced by an 33 alternative fuel vehicle facility tax credit. In order to be 34 eligible to claim the tax credit, the taxpayer must comply with 35 -1- LSB 1380SZ (2) 86 da/sc 1/ 11

S.F. 2319 this section and rules adopted by the director pursuant to 1 chapter 17A necessary to administer and enforce this section. 2 3. a. The taxpayer claiming the alternative fuel vehicle 3 facility tax credit on an agricultural basis as provided in 4 subsection 11 must purchase and install any of the following: 5 (1) An electric vehicle facility located in this state that 6 serves a motor vehicle designed by the manufacturer to operate 7 using electricity. 8 (2) A natural gas vehicle facility located in this state 9 that serves a motor vehicle that is any of the following: 10 (a) Designed by the manufacturer to operate using 11 compressed natural gas. 12 (b) An aftermarket alternative fuel vehicle converted 13 to operate using compressed natural gas if the conversion 14 equipment is certified by the United States environmental 15 protection agency, including as provided in 40 C.F.R. pt. 85. 16 (3) A liquid propane gas vehicle facility located in this 17 state that serves a motor vehicle that is any of the following: 18 (a) Designed by the manufacturer to operate using liquid 19 propane gas. 20 (b) An aftermarket alternative fuel vehicle converted to 21 operate using liquid propane gas if the conversion equipment is 22 certified by the United States environmental protection agency, 23 including as provided in 40 C.F.R. pt. 85. 24 b. The taxpayer claiming the tax credit on a commercial 25 basis as provided in subsection 11 must purchase and install 26 any of the following: 27 (1) An electric vehicle facility located in this state that 28 serves a motor vehicle designed by the manufacturer to operate 29 using electricity. 30 (2) A natural gas vehicle facility located in this state 31 that serves a motor vehicle that is any of the following: 32 (a) Designed by the manufacturer to operate using 33 compressed natural gas. 34 (b) An aftermarket alternative fuel vehicle converted 35 -2- LSB 1380SZ (2) 86 da/sc 2/ 11

S.F. 2319 to operate using compressed natural gas if the conversion 1 equipment is certified by the United States environmental 2 protection agency, including as provided in 40 C.F.R. pt. 85. 3 (3) A liquid propane gas vehicle facility located in this 4 state that serves a motor vehicle that is any of the following: 5 (a) Designed by the manufacturer to operate using liquid 6 propane gas. 7 (b) An aftermarket alternative fuel vehicle converted to 8 operate using liquid propane gas if the conversion equipment is 9 certified by the United States environmental protection agency, 10 including as provided in 40 C.F.R. pt. 85. 11 c. The taxpayer claiming the tax credit on a residential 12 basis as provided in subsection 11 must purchase and install 13 an electric vehicle facility located in this state that serves 14 a motor vehicle designed by the manufacturer to operate using 15 electricity. 16 4. a. In order to claim an alternative fuel vehicle 17 facility tax credit, the taxpayer must apply to be issued a 18 tax credit certificate by the department. The tax credit 19 certificate must be included with the taxpayer’s return. The 20 department may require supporting documentation to be included 21 with the application. The department shall issue the tax 22 credit certificate to the taxpayer in the taxpayer’s name. The 23 tax credit certificate is not transferable. The tax credit 24 certificate shall include all of the following: 25 (1) The taxpayer’s name, address, and tax identification 26 number. 27 (2) The type of infrastructure, equipment, or machinery 28 purchased and installed. 29 (3) The amount of the tax credit being claimed. 30 (4) The date that the installation of the alternative fuel 31 vehicle facility was completed. 32 (5) Any other information required by the department. 33 b. A taxpayer claiming an alternative fuel facility tax 34 credit on an agricultural or commercial basis in three equal 35 -3- LSB 1380SZ (2) 86 da/sc 3/ 11

S.F. 2319 installments in three consecutive tax years pursuant to 1 subsection 11 shall include documentation included with the 2 taxpayer’s tax return in the second and third tax year that 3 verifies that the alternative fuel vehicle facility has not 4 been taken out of service. 5 c. The department shall adopt rules establishing the 6 contents of applications and documentation required to be filed 7 with the department under this section, and criteria for the 8 receipt of the applications or documentation. 9 5. The aggregate amount of tax credit certificates that 10 may be issued pursuant to this section shall not exceed five 11 million dollars for all tax years that the tax credit is 12 available under this section. The department shall issue the 13 tax credit certificates to qualified applicants as follows: 14 a. Two million dollars for electric vehicle facilities in 15 which installation is completed between January 1, 2017, and 16 December 31, 2019. However, the following limitations shall 17 apply: 18 (1) The department shall not issue tax credit certificates 19 to a taxpayer for electric vehicle facilities on an 20 agricultural basis equal to more than two hundred thousand 21 dollars in the aggregate. 22 (2) The department shall not issue tax credit certificates 23 to a taxpayer for electric vehicle facilities on a commercial 24 basis equal to more than four hundred thousand dollars in the 25 aggregate. 26 (3) The department shall not issue tax credit certificates 27 to a taxpayer for electric vehicle facilities on a residential 28 basis equal to more than two hundred thousand dollars in the 29 aggregate. 30 b. Two million dollars for natural gas vehicle facilities in 31 which installation is completed between January 1, 2017, and 32 December 31, 2019. However, the following limitations shall 33 apply: 34 (1) The department shall not issue tax credit certificates 35 -4- LSB 1380SZ (2) 86 da/sc 4/ 11

S.F. 2319 to a taxpayer for natural gas vehicle facilities on an 1 agricultural basis equal to more than two hundred thousand 2 dollars in the aggregate. 3 (2) The department shall not issue tax credit certificates 4 to a taxpayer for natural gas vehicle facilities on a 5 commercial basis equal to more than four hundred thousand 6 dollars in the aggregate. 7 c. One million dollars for liquid propane gas vehicle 8 facilities in which installation is completed between January 9 1, 2017, and December 31, 2018. However, the following 10 limitations shall apply: 11 (1) The department shall not issue tax credit certificates 12 to a taxpayer for liquid propane gas vehicle facilities on an 13 agricultural basis equal to more than two hundred thousand 14 dollars in the aggregate. 15 (2) The department shall not issue tax credit certificates 16 to a taxpayer for liquid propane gas vehicle facilities on 17 a commercial basis equal to more than four hundred thousand 18 dollars in the aggregate. 19 d. Notwithstanding paragraph “c” , on and after January 1, 20 2019, the aggregate amount of tax credit certificates that 21 have not been issued to taxpayers for liquid propane gas 22 vehicle facilities shall be issued to qualified applicants for 23 installations of alternative fuel vehicle facilities completed 24 between January 1, 2017, and December 31, 2019. All of the 25 following shall apply: 26 (1) A taxpayer is eligible to be issued a tax credit 27 certificate under this paragraph “d” regardless of whether it is 28 for electric vehicle facilities on an agricultural, commercial, 29 or residential basis; natural gas vehicle facilities on an 30 agricultural or commercial basis; or liquid propane gas vehicle 31 facilities on an agricultural or commercial basis. 32 (2) A taxpayer is eligible to be issued tax credit 33 certificates under this paragraph “d” , subject to the 34 applicable aggregate dollar limitations on tax credit 35 -5- LSB 1380SZ (2) 86 da/sc 5/ 11

S.F. 2319 certificate amounts in paragraphs “a” through “c” . However, 1 paragraph “b” , subparagraph (2), does not apply to limit the 2 aggregate amount of tax credit certificates that a taxpayer 3 may receive for installing natural gas vehicle facilities on a 4 commercial basis. 5 (3) A taxpayer shall not be issued a tax credit certificate 6 under this paragraph “d” for an alternative fuel vehicle 7 facility for which the taxpayer had already been issued a tax 8 credit certificate prior to January 1, 2019. 9 6. A taxpayer is eligible to receive a tax credit 10 certificate only if all of the following apply: 11 a. Installation of the alternative fuel vehicle facility is 12 completed between January 1, 2017, and December 31, 2019. 13 b. Installation of the alternative fuel vehicle facility is 14 completed on or before the date when the application for the 15 tax credit certificate is submitted. 16 c. The alternative fuel vehicle facility complies with 17 any applicable federal and state standards and the latest 18 applicable and available ASTM international specifications on 19 the date that the installation was completed. 20 d. The application does not seek an alternative fuel 21 vehicle facility tax credit for the repair or expansion of an 22 alternative fuel vehicle facility. 23 7. The department may approve an eligible application and 24 issue a tax credit certificate to a taxpayer for completing 25 installation of more than one alternative fuel vehicle facility 26 at different locations or at the same location so long as the 27 alternative fuel vehicle facility is separate and distinct from 28 any other alternative fuel vehicle facility. 29 8. a. The department shall accept and approve eligible 30 applications for tax credit certificates on and after May 1, 31 2017. However, the department shall not issue tax credit 32 certificates to qualified applicants prior to July 1, 2017, and 33 taxpayers shall not claim the alternative fuel vehicle facility 34 tax credit prior to September 1, 2017. 35 -6- LSB 1380SZ (2) 86 da/sc 6/ 11

S.F. 2319 b. The department shall issue tax credit certificates under 1 paragraph “a” on a first-come, first-served basis. Eligible 2 applications that were approved by the department beginning 3 on May 1, 2017, and ending December 31, 2018, but for which 4 tax credit certificates were not issued under subsection 5, 5 paragraphs “a” and “b” , due to lack of funding, shall be placed 6 on a wait list in the order the eligible applications were 7 received by the department and shall be given priority for 8 being issued tax credit certificates on and after January 1, 9 2019, from moneys available under subsection 5, paragraph “d” . 10 9. a. The alternative fuel vehicle tax credit is limited 11 to the cost of purchasing and installing infrastructure, 12 equipment, or machinery used to store, dispense, dry, or meter 13 an alternative fuel that serves motor vehicles. For electric 14 vehicle facilities, this may include charging equipment, 15 connection devices, and batteries. For natural gas vehicle 16 facilities, this may include storage tanks, pipes, compressors, 17 dryers, and vaporizers. For liquid propane gas vehicle 18 facilities, this may include storage tanks, dispensers, pumps, 19 and motors. 20 b. The tax credit is not available for costs related to 21 the acquisition of real property or to the remodeling or 22 expansion of a building. The tax credit is available for costs 23 related to rewiring, so long as the costs are limited to those 24 necessary to place in service an electric vehicle facility. 25 10. Subject to the limitations described in subsection 5, 26 the amount of the alternative fuel vehicle facility tax credit 27 equals thirty percent of the total cost to the taxpayer of 28 purchasing the infrastructure, equipment, or machinery and 29 thirty percent of the total cost to the taxpayer of installing 30 the infrastructure, equipment, or machinery. 31 11. The alternative fuel vehicle facility tax credit may 32 be claimed by a taxpayer on an agricultural, commercial, or 33 residential basis as follows: 34 a. A taxpayer may claim the tax credit on an agricultural 35 -7- LSB 1380SZ (2) 86 da/sc 7/ 11

S.F. 2319 basis if the alternative fuel vehicle facility is located on 1 land primarily used in the production of a crop as defined 2 in section 202.1 or livestock as defined in section 717.1. 3 The alternative fuel vehicle facility must be used by an 4 agricultural producer as defined in section 15E.202 or a 5 person under the management of the agricultural producer. 6 The tax credit must be taken in equal installments in three 7 consecutive tax years, beginning with the tax year that the 8 taxpayer completed installation of the alternative fuel vehicle 9 facility. However, if the taxpayer’s application for a tax 10 credit certificate was placed on a wait list pursuant to 11 subsection 8, the taxpayer must claim the tax credit beginning 12 with the tax year that the tax credit certificate is issued. 13 If any part of the alternative fuel vehicle facility is taken 14 out of service and not immediately replaced and the facility 15 placed back in service, the tax credit expires and the taxpayer 16 cannot take any remaining installment of the tax credit. 17 b. A taxpayer may claim the tax credit on a commercial 18 basis if the alternative fuel vehicle facility is part of a 19 business selling alternative fuel on a retail basis, or may 20 claim the tax credit if the alternative fuel vehicle facility 21 is used by a business for its own vehicle fleet or employees. 22 The tax credit must be taken in equal installments in three 23 consecutive tax years, beginning with the tax year that the 24 taxpayer completed installation of the alternative fuel vehicle 25 facility. However, if the taxpayer’s application for a tax 26 credit certificate was placed on a wait list pursuant to 27 subsection 8, the taxpayer must claim the tax credit beginning 28 with the tax year that the tax credit certificate is issued. 29 If any part of the alternative fuel vehicle facility is taken 30 out of service and not immediately replaced and the facility 31 placed back in service, the tax credit expires and the taxpayer 32 cannot take any remaining installment of the tax credit. 33 c. A taxpayer may claim the tax credit on a residential 34 basis only for an electric vehicle facility that is for 35 -8- LSB 1380SZ (2) 86 da/sc 8/ 11

S.F. 2319 personal, family, or household use as part of the taxpayer’s 1 primary residence. The entire amount of the tax credit 2 must be claimed in the tax year that the taxpayer completed 3 installation of the electric vehicle facility. However, if the 4 taxpayer’s application for a tax credit certificate was placed 5 on a wait list pursuant to subsection 8, the taxpayer must 6 claim the tax credit beginning with the tax year that the tax 7 credit certificate is issued. 8 12. Any tax credit in excess of the taxpayer’s tax liability 9 shall be refunded. In lieu of claiming a refund, the taxpayer 10 may elect to have the overpayment shown on the taxpayer’s 11 final, completed return credited to the tax liability for the 12 following tax year. 13 13. An individual may claim the tax credit allowed a 14 partnership, limited liability company, S corporation, estate, 15 or trust electing to have the income taxed directly to the 16 individual. The amount claimed by the individual shall be 17 based upon the pro rata share of the individual’s earnings of 18 the partnership, limited liability company, S corporation, 19 estate, or trust. 20 14. This section is repealed on January 1, 2025. 21 Sec. 3. Section 422.33, Code 2016, is amended by adding the 22 following new subsection: 23 NEW SUBSECTION . 11. The taxes imposed under this division 24 shall be reduced by an alternative fuel vehicle facility tax 25 credit allowed for each tax year that the taxpayer is eligible 26 to claim the tax credit under this subsection. 27 a. The taxpayer must claim the tax credit on an 28 agricultural, commercial, or residential basis in the same 29 manner as provided in section 422.11G. The taxpayer must claim 30 the tax credit according to the same requirements, for the same 31 amount, and for the same period as provided in section 422.11G. 32 The amount of the tax credit shall be calculated in the same 33 manner as provided in section 422.11G. A taxpayer claiming a 34 tax credit on an agricultural or commercial basis is subject 35 -9- LSB 1380SZ (2) 86 da/sc 9/ 11

S.F. 2319 to the same penalty for taking the alternative fuel vehicle 1 facility out of service as provided in section 422.11G. 2 b. This subsection is repealed on January 1, 2025. 3 Sec. 4. Section 422.35, Code 2016, is amended by adding the 4 following new subsection: 5 NEW SUBSECTION . 15. a. A taxpayer taking a depreciation 6 allowance under section 168 of the Internal Revenue Code for 7 property described in section 422.33, subsection 11, is not 8 allowed to take the allowance for purposes of this division 9 to the extent that a tax credit is taken for the purchase and 10 installation of the property under section 422.33, subsection 11 11. If a credit is taken for the purchase and installation of 12 the property under section 422.33, subsection 11, the taxpayer 13 shall add the amount of the allowance taken on such property to 14 the extent of the amount of the credit. 15 b. A taxpayer taking an expensing allowance under section 16 179 of the Internal Revenue Code for property described in 17 section 422.33, subsection 11, is not allowed to take the 18 allowance for purposes of this division to the extent that a 19 tax credit is taken for the purchase and installation of such 20 property under section 422.33, subsection 11. If a credit 21 is taken for the purchase and installation of the property 22 under section 422.33, subsection 11, the taxpayer shall add the 23 amount of the allowance taken on such property to the extent of 24 the amount of the credit. 25 c. This subsection is repealed on January 1, 2025. 26 Sec. 5. APPLICABILITY DATE. This Act applies to tax years 27 beginning on or after January 1, 2017. 28 EXPLANATION 29 The inclusion of this explanation does not constitute agreement with 30 the explanation’s substance by the members of the general assembly. 31 This bill creates an alternative fuel vehicle facility 32 tax credit for an electric vehicle facility, a (compressed) 33 natural gas vehicle facility, and a liquid propane gas vehicle 34 facility. The tax credit is administered by the department of 35 -10- LSB 1380SZ (2) 86 da/sc 10/ 11

S.F. 2319 revenue. A taxpayer may claim the tax credit for an electric 1 vehicle facility on an agricultural, commercial, or residential 2 basis and may claim the tax credit for a natural gas facility 3 or liquid propane gas facility on an agricultural or commercial 4 basis. The amount of the tax credit that a taxpayer may claim 5 is limited to 30 percent of the cost of purchasing and 30 6 percent of the cost of installing the facility. A taxpayer 7 claiming the tax credit on a residential basis must claim the 8 entire tax credit for the tax year in which the facility was 9 installed. The taxpayer must install the facility between 10 January 1, 2017, and December 31, 2019. The aggregate amount 11 of tax credit certificates that may be issued cannot exceed 12 a total amount of $5 million for all tax years that the tax 13 credit is available. That total amount is divided into three 14 reserved amounts: (1) $2 million allocated for electric 15 vehicle facilities, (2) $2 million allocated for natural gas 16 facilities, and (3) $1 million allocated for liquid propane gas 17 facilities. 18 The department is to issue tax credit certificates on a 19 first-come, first-served basis. If moneys are no longer 20 available from a reserved amount, the taxpayer’s application 21 for a tax credit certificate is to be placed on a waitlist. On 22 and after January 1, 2019, the aggregate amount of tax credit 23 certificates that have not been issued to taxpayers for liquid 24 propane gas vehicle facilities are available to be issued to 25 taxpayers for installations of all alternative fuel vehicle 26 facilities completed between January 1, 2017, and December 27 31, 2019. If a taxpayer’s application for a tax credit 28 certificate was placed on a wait list, the taxpayer must claim 29 the tax credit beginning with the tax year that the tax credit 30 certificate is issued. The department must accept and approve 31 eligible applications for tax credit certificates on and after 32 May 1, 2017. However, the department cannot issue a tax credit 33 certificate to a taxpayer prior to July 1, 2017, and a taxpayer 34 cannot claim the tax credit prior to September 1, 2017. 35 -11- LSB 1380SZ (2) 86 da/sc 11/ 11