SENATE FILE 520

BY  COMMITTEE ON WAYS AND MEANS

(SUCCESSOR TO SF 463)
(SUCCESSOR TO SSB 1154)

(As Amended and Passed by the Senate 2011-04-13)

A BILL FOR

An Act providing for an electric or natural gas vehicle facility tax credit and including effective date and applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  Section 422.7, Code 2011, is amended by adding the following new subsection:
   NEW SUBSECTION.  54.
  a.  A taxpayer taking a depreciation allowance under section 168 of the Internal Revenue Code for property described in section 422.11Y is not allowed to take the allowance to the extent that a tax credit is taken for the purchase of the property under section 422.11Y.
   b.  A taxpayer taking an expensing allowance under section 179 of the Internal Revenue Code for property described in section 422.11Y is not allowed to take the allowance to the extent that a tax credit is taken for the purchase of such property under section 422.11Y.
   c.  This subsection is repealed on January 1, 2019.
   Sec. 2.  NEW SECTION.  422.11Y  Electric or natural gas vehicle facility tax credit.
   1.  As used in this section,“motor vehicle” means the same as defined in section 322.2.
   2.  The taxes imposed under this division, less the credits allowed under section 422.12, shall be reduced by an electric or natural gas vehicle facility tax credit. In order to be eligible to claim the tax credit, the taxpayer must comply with this section and rules adopted by the department necessary to administer and enforce this section.
   3.
  a.  The taxpayer claiming the tax credit on a commercial basis as provided in this section must construct, install, and place in service any of the following:
   (1)  An electric vehicle facility which serves a motor vehicle that is designed by a manufacturer to operate using electricity.
   (2)  A natural gas vehicle facility which serves a motor vehicle that is designed by a manufacturer to operate using compressed natural gas.
   b.  The taxpayer claiming the tax credit on a residential basis as provided in this section must construct, install, and place in service an electric vehicle facility which serves a motor vehicle that is designed by a manufacturer to operate using electricity.
   4.
  a.  After verifying the eligibility for an electric or natural gas vehicle facility tax credit as provided in this section, the department of revenue shall issue the taxpayer an electric or natural gas vehicle facility tax credit certificate which must be attached to the taxpayer’s tax return. An electric or natural gas vehicle facility tax credit certificate shall include all of the following:
   (1)  The taxpayer’s name, address, tax identification number, and any other information required by the department of revenue.
   (2)  A description of the infrastructure, equipment, or machinery being purchased and installed which is eligible for the tax credit to be claimed on the taxpayer’s tax return.
   (3)  The amount of the tax credit being claimed.
   b.  The department shall adopt rules establishing criteria for the receipt of applications for electric or natural gas vehicle facility tax credit certificates and the issuance of those certificates. A tax credit certificate shall be issued in the taxpayer’s name and shall expire on or after the last day of the taxable year for which the taxpayer is claiming the tax credit. A tax credit certificate is nontransferable.
   c.  The aggregate amount of electric or natural gas vehicle facility tax credit certificates that may be issued pursuant to this section shall not exceed five million dollars for all tax years that the tax credit is available under this section. The department shall issue the tax credit certificates on a first-come, first-served basis to qualified applicants.
   5.  An electric or natural gas vehicle facility is limited to infrastructure, equipment, or machinery used to store, dispense, dry, and meter compressed natural gas or electricity. For compressed natural gas, it may include pipes, compressors, dryers, or vaporizers. For electricity, it may include charging equipment, infrastructure, or batteries.

   6.  The amount of the electric or natural gas vehicle facility tax credit equals thirty percent of the cost to the taxpayer of purchasing the infrastructure, equipment, or machinery and thirty percent of the cost to the taxpayer of installing the infrastructure, equipment, or machinery.
   7.  The electric or natural gas vehicle facility must comply with any applicable federal and state standards and the latest applicable and available A.S.T.M. international specifications.
   8.  The electric or natural gas vehicle facility tax credit may be claimed by a person on a commercial or residential basis as follows:
   a.  A person may claim the tax credit on a commercial basis, if the electric or natural gas vehicle facility is part of a business selling qualified electricity or compressed natural gas on a retail basis, or may claim the tax credit if the electric or natural gas vehicle facility is used by a business for its own vehicle fleet or employees. The tax credit must be taken in equal installments in three consecutive tax years, beginning with the tax year in which the electric or natural gas vehicle facility is placed in service. If any part of the electric or natural gas vehicle facility is taken out of service and not immediately replaced, the tax credit expires and the taxpayer cannot take any remaining installment of the tax credit.
   b.  A person may claim the tax credit on a residential basis only for an electric vehicle facility that is for personal, family, household, or farm use. The entire amount of the tax credit must be claimed in the tax year in which the electric vehicle facility is first placed in service.
   9.  Any tax credit in excess of the taxpayer’s tax liability shall be refunded. In lieu of claiming a refund, the taxpayer may elect to have the overpayment shown on the retail dealer’s final, completed return credited to the tax liability for the following tax year.
   10.  An individual may claim the tax credit allowed a partnership, limited liability company, S corporation, estate, or trust electing to have the income taxed directly to the individual. The amount claimed by the individual shall be based upon the pro rata share of the individual’s earnings of the partnership, limited liability company, S corporation, estate, or trust.
   11.  A person shall not claim a tax credit under this section for an electric or natural gas vehicle facility that was placed in service on or after January 1, 2015. However, a person claiming the tax credit on a commercial basis who placed the electric or natural gas vehicle facility in service prior to January 1, 2015, may continue to claim the tax credit for tax years ending on or after January 1, 2015, as provided in subsection 6, paragraph “a”.
   12.  This section is repealed on January 1, 2019.
   Sec. 3.  Section 422.33, Code 2011, is amended by adding the following new subsection:
   NEW SUBSECTION.  11D.  The taxes imposed under this division shall be reduced by an electric or natural gas vehicle facility tax credit for each tax year that the taxpayer is eligible to claim the tax credit under this subsection. 
   a.  The taxpayer must claim the tax credit on a commercial basis or residential basis in the same manner as provided in section 422.11Y. The taxpayer must claim the tax credit according to the same requirements, for the same amount, and for the same period as provided in section 422.11Y. The amount of the tax credit shall be calculated in the same manner as provided in section 422.11Y. A taxpayer claiming a tax credit on a commercial basis is subject to the same penalty for taking the electric or natural gas vehicle facility out of service as provided in section 422.11Y.
   b.  This subsection is repealed on January 1, 2019.
   Sec. 4.  Section 422.35, Code 2011, is amended by adding the following new subsection:
   NEW SUBSECTION.  15.
  a.  A taxpayer taking a depreciation allowance under section 168 of the Internal Revenue Code for property described in section 422.33, subsection 11D, is not allowed to take the allowance to the extent that a tax credit is taken for the purchase of the property under section 422.33, subsection 11D.
   b.  A taxpayer taking an expensing allowance under section 179 of the Internal Revenue Code for property described in section 422.33, subsection 11D, is not allowed to take the allowance to the extent that a tax credit is taken for the purchase of such property under section 422.33, subsection 11D.
   c.  This subsection is repealed on January 1, 2019.
   Sec. 5.  EFFECTIVE DATE.  This Act takes effect January 1, 2012.
   Sec. 6.  APPLICABILITY.  This Act applies to tax years beginning on and after January 1, 2012.