HF 2757 (LSB 6140HV (1) 91)

HOUSE FILE 2757

BY  COMMITTEE ON WAYS AND MEANS

(SUCCESSOR TO HSB 767)

A BILL FOR

An Act creating sales and use tax exemptions relating to commencing or restarting nuclear electric generation facilities, and including retroactive applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 423.3, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  111.  a.  The sales price of tangible personal property or specified digital products sold or services furnished before, during, or after the site preparation, construction, reconstruction, replacement, alteration, repair, safe storage, maintenance, or restarting after decommissioning of a nuclear electric generation facility.
   b.  This exemption does not apply to the following:
   (1)  Motor vehicles subject to registration under chapter 321.
   (2)  Tangible personal property or specified digital products sold, or services furnished where the purchasing agent of the nuclear electric generation facility fails to provide the retailer with an exemption certificate.
   (3)  Tangible personal property or specified digital products sold, or services furnished prior to January 1, 2025.
   c.  This subsection shall not be construed to limit any other exemptions applicable under this chapter.
   d.  The department shall issue guidance within ninety days of the effective date of this Act regarding acceptable documentation for exemption qualification and exemption certificate procedures.
   e.  The department may adopt rules pursuant to chapter 17A to administer this subsection.
   f.  For purposes of this subsection, “nuclear electric generation facility” means a facility commencing or restarting commercial operations on or after January 1, 2028, that is located in this state, uses nuclear fission, fusion, or other nuclear processes to generate electricity for sale or for use in the transmission or distribution grid and is licensed by the federal nuclear regulatory commission. A “nuclear electric generation facility” includes facilities undergoing restart after a decommissioning period and facilities in advanced stages of development or obtaining federal licensing from the United States nuclear regulatory commission. A “nuclear electric generation facility” includes all of the following:
   (1)  Nuclear reactors, reactor fuel cores, reactor vessels, steam generators, heat exchangers, turbine systems, control rods, instrumentation, cooling systems, fuel handling and storage systems, radiation shielding, radiation sources and other primary nuclear generation components, and spent fuel storage.
   (2)  Structures and buildings housing nuclear generation systems, including containment buildings, auxiliary buildings, cooling towers, water intake or discharge structures, and on-site storage facilities directly related to nuclear operations.
   (3)  Electrical generation and transformation equipment, including turbines, generators, switchgear, transformers, inverters, transmission structures, conductors, substations, and associated power conditioning and control equipment.
   (4)  Equipment and systems used for safety, security, radiation monitoring, emergency power, operator training, maintenance training, safety-related equipment storage, and warehousing.
   (5)  Environmental protection required for operation of the facility.
   (6)  System materials, components, equipment, storage, structures, and buildings associated with integrated systems that enhance the flexibility of the system in delivering energy to the electrical grid, including but not limited to the following:
   (a)  Systems that store and utilize thermal energy or electrical energy from the nuclear electric generating facility prior to delivering energy to the grid.
   (b)  Energy storage systems that utilize a transmission system interconnection to the same physical substation as the nuclear electric generating facility.
   (7)  Materials, supplies, and components permanently incorporated into or consumed in the construction, repair, or maintenance of a nuclear electric generation facility.
   (8)  Digital control systems, software, cybersecurity, infrastructure, and physical security systems and equipment used in the safe and compliant operation of the nuclear electric generation facility.
   (9)  Equipment, materials, systems, and services required to restart operations at a previously operational nuclear electric generation facility that has ceased commercial operation, including but not limited to refurbishment, modernization, regulatory compliance upgrades, and relicensing activities.
    Sec. 2.  RETROACTIVE APPLICABILITY.  This Act applies retroactively to January 1, 2025, for qualifying tangible personal property or specified digital products sold, or services furnished on or after that date.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill creates sales and use tax exemptions relating to commencing or restarting nuclear electric generation facilities.
   The bill exempts tangible personal property or specified digital products sold and services furnished are exempted from the state sales and use tax (exemption) before, during, or after the site preparation, construction, reconstruction, replacement, alteration, repair, safe storage, maintenance, or the restarting after decommissioning of a nuclear electric generation facility.
   The bill defines “nuclear electric generation facility” (facility) to mean a facility commencing or restarting on or after January 1, 2028, that is located in this state, uses nuclear fission, fusion, or other nuclear processes to generate electricity for sale or for use in the transmission or distribution grid and is licensed by the federal nuclear regulatory commission.
   The exemption does not apply to the following: (1) motor vehicles registered under Code chapter 321, (2) tangible personal property or specified digital products sold, or services furnished, without the facility providing its exemption certificate, and (3) tangible personal property or specified digital products sold, or services furnished, prior to January 1, 2025.
   The definition of facility in the bill is comprehensive and includes but is not limited to nuclear reactors, storage facilities, equipment, electrical generation, and other structures.
   The bill requires the department of revenue to issue guidance about acceptable documentation required to obtain the exemption and exemption certificate procedures. The bill also specifies the department of revenue may adopt rules to administer the bill.
   The bill applies retroactively to January 1, 2025, for qualifying tangible personal property or specified digital products sold, or services furnished on or after that date.