SF 2498 (LSB 6847SV (3) 91)

SENATE FILE 2498

BY  COMMITTEE ON WAYS AND MEANS

(SUCCESSOR TO SSB 3181)

A BILL FOR

An Act relating to nuclear electric generation facilities by creating sales and use tax exemptions and refunds, making appropriations to the state board of regents for establishing and maintaining a nuclear energy workforce, and providing penalties.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  262.101  Nuclear energy workforce fund —— appropriation —— report.
   1.  A nuclear energy workforce fund is established in the office of the treasurer of state under the control of the state board of regents. The fund consists of the contributions made to the fund pursuant to section 423.3, subsection 111, and any other appropriations made to the fund. Moneys in the fund shall be separate from the general fund of the state and shall not be considered part of the general fund of the state. Moneys in the fund shall be used only as specified in this section and shall be appropriated only for the uses specified. Moneys in the fund are not subject to section 8.33 and shall not be transferred, used, obligated, appropriated, or otherwise encumbered, except as provided in this section. Notwithstanding section 12C.7, subsection 2, interest or earnings on moneys deposited in the fund shall be credited to the fund.
   2.  Moneys in the fund are appropriated to the board for the purpose of establishing and maintaining programs and equipment at one or more institutions of higher education governed by the board that support nuclear energy workforce programs.
   3.  Beginning January 15, 2028, and each January 15 thereafter, the board shall submit a report to the general assembly regarding the progress and implementation of the nuclear energy workforce programs established at the institutions governed by the board. The reports shall include but are not limited to the numbers of students and educators participating in the programs and the allocation of funds appropriated for the programs.
    Sec. 2.  Section 423.3, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  111.  a.  (1)  To the extent permissible in the agreement under paragraph “d”, the sales price of tangible personal property or specified digital products sold, or of services furnished to a nuclear electric generation facility.
   (2)  The tangible personal property, specified digital products, and services furnished shall be directly and primarily used before, during, or after the site preparation, construction, reconstruction, replacement, alteration, repair, safe storage, maintenance, or restarting after decommissioning of the nuclear electric generation facility.
   b.  This exemption does not apply to motor vehicles subject to registration under chapter 321.
   c.  This subsection shall not be construed to limit any other exemptions applicable under this chapter.
   d.  (1)  As a condition of receiving the exemption under this subsection, and prior to being eligible to receive the exemption, the nuclear electric generation facility shall enter into an agreement with the state board of regents and the economic development authority that provides a minimum contribution for establishing and maintaining programs and equipment at one or more institutions of higher education governed by the board that support a nuclear energy workforce. The agreement shall, at a minimum, require the nuclear electric generation facility to annually contribute at least fifteen percent of the aggregate value of the sales and use tax exemption and refund disclosed in the annual report to the department pursuant to paragraph “e” for the previous calendar year. The contribution shall be made to the department and deposited into the nuclear energy workforce fund created in section 262.101.
   (2)  The agreement shall establish the date when eligibility for the exemption begins including whether and to what extent the exemption applies to any tangible personal property or specified digital products sold or to services furnished prior to the agreement date.
   e.  (1)  The nuclear electric generation facility shall register with the department. The registration must include all of the following:
   (a)  An executed copy of the agreement in paragraph “d”.
   (b)  Any information the department requires.
   (2)  To maintain its registration, the nuclear electric generation facility shall file an annual report with the department beginning January 31, 2027, and by each January 31 thereafter, that contains all of the following information: 
   (a)  The aggregate sales price amount of exempt tangible personal property or digital products sold and services furnished from the previous calendar year under this subsection, including tangible personal property, specified digital products, and services that are also exempt under another subsection of this section.
   (b)  The aggregate sales price amount of building materials, supplies, equipment, and services subject to a refund claim the department approved during the previous calendar year under section 423.4, subsection 12.
   (c)  Evidence the nuclear electric generation facility made the contribution required by the agreement in paragraph “d”.
   (d)  Any other information required by the department.
   (3)  The nuclear electric generation facility shall repay the aggregate amount of the sales and use tax exemptions and refunds claimed in the calendar year for which the nuclear electric generation facility did not make the required contribution. Any repayment shall be considered a tax payment due and payable to the department by the nuclear electric generation facility, and the failure to make the repayment may be treated by the department in the same manner as a failure to pay the tax shown due, or required to be shown due, with the filing of a return or deposit form.
   (4)  A nuclear electric generation facility that is not registered with the department is not eligible to receive an exemption under this subsection or a refund under section 423.4, subsection 12.
   f.  The department may adopt rules pursuant to chapter 17A to administer this subsection.
   g.  For purposes of this subsection, “nuclear electric generation facility” means a facility located in this state that 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 federal 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 generation 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 generation 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. 3.  Section 423.4, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  12.  a.  A nuclear electric generation facility, as defined in section 423.3, subsection 111, may apply to the department for the refund of sales or use tax upon the sales price of all sales of building materials, supplies, equipment, or from service furnished to a contractor, used in the performance of a written contract with the nuclear electric generation facility if all of the following apply:
   (1)  The building materials, supplies, equipment, or services are completely consumed in the performance of a construction project with the nuclear electric generation facility.
   (2)  The property that is the subject of the construction project becomes public property or the property of the nuclear electric generation facility.
   b.  A contractor shall state under oath, on forms provided by the department, the amount of such sales and building materials, supplies, or equipment, or services furnished and used in the performance of such contract, and upon which sales or use tax has been paid, and shall file such forms with the nuclear electric generation facility which has made any written contract for performance by the contractor. The forms shall be filed by the contractor with the nuclear electric generation facility before final settlement is made.
   c.  A nuclear electric generation facility shall, not more than one year after the final settlement has been made, apply to the department for any refund of the amount of the sales or use tax which shall have been paid upon any building materials, supplies, equipment, or services furnished, the application to be made in the manner and upon forms to be provided by the department, and the department shall forthwith audit the claim and, if approved, issue a warrant to the nuclear electric generation facility in the amount of the sales or use tax which has been paid to the state of Iowa under the contract. The nuclear electric generation facility shall be registered with the department as required under section 423.3, subsection 111, at the time the nuclear electric generation facility applies for refund under this subsection.
   d.  Refunds authorized under this subsection shall accrue interest in accordance with section 421.60, subsection 2, paragraph “e”.
   e.  Any contractor who willfully makes a false report of tax paid under the provisions of this subsection is guilty of a simple misdemeanor and in addition shall be liable for the payment of the tax and any applicable penalty and interest.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill makes certain sales and use tax exemptions relating to nuclear electric generation facilities contingent upon making contributions to institutions of higher education (regents institution) governed by the state board of regents (board).
   NUCLEAR ELECTRIC GENERATION FACILITY —— EXEMPTION. To the extent permissible under an agreement required by the bill, 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 tangible personal property, specified digital products, and services exempted are required to be directly and primarily used for these purposes.
   The bill defines “nuclear electric generation facility” (facility) to mean a facility located in this state that 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 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.
   AGREEMENT BY FACILITY. As a condition of receiving the exemption created in the bill, a facility is required to enter into an agreement with the board and the economic development authority (authority) that requires the facility to make a minimum contribution for establishing and maintaining programs and equipment at one or more regents institutions governed by the board that support nuclear energy workforce programs. The agreement shall, at a minimum, require the facility to contribute at least 15 percent of the aggregate value of the exemption received pursuant to the bill for the purpose of establishing and maintaining programs and equipment at a regents institution that supports nuclear energy workforce programs.
   The agreement with the authority shall establish the date the exemption begins, including whether and to what extent the exemption applies to any tangible personal property or specified digital products sold, or services furnished prior to the agreement date.
   Beginning January 15, 2028, and each January 15 thereafter, the bill requires the board to submit a report to the general assembly regarding the progress and implementation of the nuclear energy workforce programs.
   REPORTING BY FACILITY. The bill requires a facility to register with the department. Beginning January 31, 2027, and each January 31 thereafter, a facility receiving an exemption is required to file an annual report with the department of revenue (DOR). The annual report shall provide the aggregate sales price amount of tangible personal property, specified digital products, and services that received an exemption in the previous calendar year.
   The bill requires DOR to calculate the aggregate value of the exemption based upon the aggregate sales price amounts disclosed in the annual report, and provide the aggregate value of the exemption to the authority, for purposes of calculating the 15 percent contribution for establishing and maintaining programs and equipment at a regents institution that supports nuclear energy workforce programs.
   SALES AND USE TAX REFUNDS. The bill permits a facility to apply to DOR for the refund of sales or tax upon the sales price of all sales of building materials, supplies, equipment, or from services furnished to a contractor, used in the performance of a written contract with the facility, if certain circumstances apply. Any contractor who willfully makes a false report of taxes paid for purposes of obtaining a sales or use tax refund under the bill commits a simple misdemeanor.