Senate Study Bill 1065 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON FEENSTRA) A BILL FOR An Act modifying provisions applicable to the renewable energy 1 tax credit, and including effective date and retroactive 2 applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 2244XC (2) 87 gh/sc/rn

S.F. _____ Section 1. Section 476C.1, subsection 8, Code 2017, is 1 amended to read as follows: 2 8. “Heat for a commercial purpose” means the heat in British 3 thermal unit equivalents from refuse-derived fuel, methane, or 4 other biogas produced in this state either for commercial use 5 by a producer for on-site consumption or sold to a purchaser 6 of renewable energy for use for a commercial purpose in this 7 state or for use by an institution in this state. For purposes 8 of this chapter, “heat for a commercial purpose” includes heat 9 captured during the generation of electricity using methane gas 10 or other biogas produced by a biogas recovery facility when 11 such heat is used for a commercial purpose for which fuel or 12 electricity would otherwise be consumed. 13 Sec. 2. Section 476C.2, subsection 1, Code 2017, is amended 14 to read as follows: 15 1. A producer or purchaser of renewable energy may receive 16 renewable energy tax credits under this chapter in an amount 17 equal to the sum of the following: 18 a. one One and one-half cents per kilowatt-hour of 19 electricity , or . 20 b. four Four dollars and fifty cents per million British 21 thermal units of heat for a commercial purpose , or . 22 c. four Four dollars and fifty cents per million British 23 thermal units of methane gas or other biogas used to generate 24 electricity, or unless renewable energy tax credits are claimed 25 for such electricity under paragraph “a” . 26 d. one One dollar and forty-four cents per one thousand 27 standard cubic feet of hydrogen fuel generated by and purchased 28 from an eligible renewable energy facility or used for on-site 29 consumption by the producer. 30 Sec. 3. Section 476C.3, subsection 4, paragraph a, Code 31 2017, is amended to read as follows: 32 a. The maximum amount of nameplate generating capacity 33 of all wind energy conversion facilities the board may find 34 eligible under this chapter shall not exceed three hundred 35 -1- LSB 2244XC (2) 87 gh/sc/rn 1/ 3

S.F. _____ sixty-three forty-three megawatts of nameplate generating 1 capacity. 2 Sec. 4. Section 476C.3, subsection 4, paragraph b, 3 unnumbered paragraph 1, Code 2017, is amended to read as 4 follows: 5 The maximum amount of energy production capacity equivalent 6 of all other facilities the board may find eligible under this 7 chapter shall not exceed a combined output of sixty-three 8 eighty-three megawatts of nameplate generating capacity and, 9 annually, one hundred sixty-seven billion British thermal units 10 of heat for a commercial purpose. 11 Sec. 5. Section 476C.3, subsection 4, paragraph b, Code 12 2017, is amended by adding the following new subparagraph: 13 NEW SUBPARAGRAPH . (4) Of the maximum amount of energy 14 production capacity equivalent of all other facilities 15 found eligible under this chapter, twenty-two and one-half 16 megawatts of nameplate generating capacity or energy production 17 equivalent shall be reserved for biogas recovery facilities 18 with a generating capacity of two and one-half megawatts or 19 less. 20 Sec. 6. EFFECTIVE UPON ENACTMENT. This Act, being deemed of 21 immediate importance, takes effect upon enactment. 22 Sec. 7. RETROACTIVE APPLICABILITY. This Act applies 23 retroactively to January 1, 2014, for tax years beginning on 24 or after that date. 25 EXPLANATION 26 The inclusion of this explanation does not constitute agreement with 27 the explanation’s substance by the members of the general assembly. 28 This bill modifies provisions applicable to the renewable 29 energy tax credit established in Code chapter 476C. 30 Currently, the Code chapter defines “heat for a commercial 31 purpose” to mean the heat in British thermal unit equivalents 32 from refuse-derived fuel, methane, or other biogas produced 33 in this state either for commercial use by a producer for 34 on-site consumption or sold to a purchaser of renewable 35 -2- LSB 2244XC (2) 87 gh/sc/rn 2/ 3

S.F. _____ energy for use for a commercial purpose in Iowa or for use 1 by an institution in Iowa. The bill adds that “heat for a 2 commercial purpose” also includes heat captured during the 3 generation of electricity using methane gas or other biogas 4 produced by a biogas recovery facility when such heat is used 5 for a commercial purpose for which fuel or electricity would 6 otherwise be consumed. 7 Currently, the Code chapter specifies the dollar value 8 of renewable energy tax credits which may be claimed per 9 kilowatt-hour of electricity, or per million British thermal 10 units of heat for a commercial purpose, or per million British 11 thermal units of methane gas or other biogas used to generate 12 electricity, or per one thousand standard cubic feet of 13 hydrogen fuel. The bill provides that a producer or purchaser 14 of renewable energy is not limited to claiming one form of 15 these four differentiated credits but may instead receive more 16 than one credit corresponding to each type of heat generated or 17 captured by a renewable energy facility. 18 Additionally, current Code section 476.3(4) specifies the 19 maximum amounts of energy production capacity equivalent of 20 renewable energy production facilities that the Iowa utilities 21 board may find eligible for a renewable energy tax credit. 22 The bill decreases the maximum amount of nameplate generating 23 capacity (NGC) with respect to wind energy conversion 24 facilities from 363 megawatts to 343 megawatts. The bill 25 increases the maximum amount of NGC with respect to all 26 other facilities from 63 megawatts to 83 megawatts. The bill 27 provides that 22.5 megawatts out of the total 83 megawatts 28 of NGC for which credits may be issued to facilities other 29 than wind energy conversion facilities is reserved for biogas 30 recovery facilities with an NGC of 2.5 megawatts or less. 31 The bill takes effect upon enactment and applies 32 retroactively to January 1, 2014, for tax years beginning on 33 or after that date. 34 -3- LSB 2244XC (2) 87 gh/sc/rn 3/ 3