HF 2073 (LSB 5576YH (1) 89)

HOUSE FILE 2073

BY  STAED

A BILL FOR

An Act reducing the solar energy system tax credit wait list by reducing authorized aggregate tax credits for certain economic development programs.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 15.119, Code 2022, is amended by adding the following new subsection:
   NEW SUBSECTION.  6.  a.  In allocating the amount of tax credits authorized pursuant to subsection 1 among the programs specified in subsection 2, the authority shall reduce the amount of tax credits authorized pursuant to subsection 1 equal to the cumulative value of the solar energy system tax credits on the wait list, upon the notification sent pursuant to section 422.11L, subsection 4, paragraph “c”, subparagraph (2). 
   b.  A reduction pursuant to this subsection shall not exceed seven million dollars in any one fiscal year. 
    Sec. 2.  Section 422.11L, subsection 4, Code 2022, is amended to read as follows:
   4.  a.  The cumulative value of tax credits claimed annually by applicants pursuant to this section shall not exceed five million dollars, unless additional moneys are available pursuant to paragraph “c”. Of this amount, at least one million dollars shall be reserved for claims associated with or resulting from residential solar energy system installations. In the event that the total amount of claims submitted for residential solar energy system installations in a tax year is an amount less than one million dollars, the remaining unclaimed reserved amount shall be made available for claims associated with or resulting from nonresidential solar energy system installations received for the tax year.
   b.  If an amount of tax credits available for a tax year pursuant to paragraph “a” goes unclaimed, the amount of the unclaimed tax credits shall be made available for the following tax year in addition to, and cumulated with, the amount available pursuant to paragraph “a” for the following tax year.
   c.  (1)  The cumulative value of tax credits claimed annually may exceed five million dollars pursuant to this paragraph. The additional amount of tax credits that may be claimed pursuant to this paragraph shall equal the amount of tax credits placed on the wait list pursuant to subsection 3, up to the amount allowable under section 15.119, subsection 6, until such time the wait list is eliminated. 
   (2)  (a)  At the beginning of each fiscal year, the director of revenue shall notify the director of the economic development authority of the cumulative value of the tax credits on the wait list in subsection 3, paragraph “d”, subparagraph (2).
   (b)  The director of revenue shall notify the director of economic development authority when the cumulative value of the tax credits on the wait list is zero, at which point no additional amount of tax credit may be claimed pursuant to this paragraph.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill reduces the solar energy system tax credit wait list by reducing authorized aggregate tax credits for certain economic development programs.
   Currently, the cumulative value of solar energy system tax credits claimed is annually capped at $5 million. The bill allows the cumulative value of tax credits claimed annually to exceed the $5 million cap amount until such time the wait list for the tax credit is eliminated. The amount of tax credits that may be claimed in excess of the $5 million cap shall equal the amount of tax credits placed on the wait list, but shall not exceed $7 million over the cap.
   The bill requires the director of revenue, at the beginning of each fiscal year, to notify the director of the department of economic authority of the cumulative value of tax credits on the solar energy system tax credit wait list. The bill also requires the director of the department of revenue to notify the director of the economic development authority when the cumulative value of the tax credits on the solar energy system tax credit wait list is zero, at which point authorized aggregate tax credits for certain economic development programs shall cease being reduced. 
   Currently, certain economic development tax credit amounts are capped at $170 million in the aggregate under Code section 15.119. In allocating the tax credits pursuant to Code section 15.119, the bill requires the economic development authority to reduce the $170 million authorized tax credit aggregate amount by the cumulative value of the solar energy system tax credits on the wait list until such time the wait list for the solar energy system tax credit is eliminated. 
   The solar energy system tax credit is available against the individual and corporate income taxes, franchise tax, and moneys and credits tax.