Iowa General Assembly Daily Bills, Amendments & Study Bills March 17, 2009



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HF 747

House File 747 - Introduced

HOUSE FILE

BY COMMITTEE ON ENVIRONMENTAL

PROTECTION


(SUCCESSOR TO HSB 57)

Passed House, Date Passed Senate, Date

Vote: Ayes Nays Vote: Ayes Nays

Approved


A BILL FOR
1 An Act modifying provisions applicable to facilities qualifying

2 for wind energy production and renewable energy tax credits

3 and including effective and retroactive applicability

4 provisions.

5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

6 TLSB 1649HV 83

7 rn/mg/8

House File 747 - Introduced continued


PAG LIN

1 1 Section 1. Section 476B.1, subsection 4, paragraph d, Code

1 2 2009, is amended to read as follows:

1 3 d. (1) For applications filed on or after March 1, 2008,

1 4 consists of one or more wind turbines connected to a common

1 5 gathering line which have a combined nameplate capacity of no

1 6 less than two megawatts.

1 7 (2) For applications filed on or after July 1, 2009, by a



1 8 private college or university, community college, institution

1 9 under the control of the state board of regents, or public

1 10 hospital as defined in section 249J.3, for the applicant's own


1 11 use of qualified electricity, consists of wind turbines with a

1 12 combined nameplate capacity of three=fourths of a megawatt or

1 13 greater.

1 14 Sec. 2. Section 476B.4, Code 2009, is amended to read as

1 15 follows:

1 16 476B.4 LIMITATIONS LIMITATION.

1 17 1. The wind energy production tax credit shall not be

1 18 allowed for any kilowatt=hour of electricity produced on wind

1 19 energy conversion property for which the owner has claimed or

1 20 otherwise received for that property the benefit of special

1 21 valuation under section 427B.26 or section 441.21, subsection

1 22 8, or the exemption from retail sales tax under section

1 23 422.45, subsection 48, Code Supplement 2003, or section 423.3,

1 24 subsection 54, as applicable.

1 25 2. The wind energy production tax credit shall not be

1 26 allowed for any kilowatt=hour of electricity that is sold to a

1 27 related person. For purpose purposes of this subsection

1 28 section, persons shall be treated as related to each other if

1 29 such persons would be treated as a single employer under the

1 30 regulations prescribed under section 52(b) of the Internal

1 31 Revenue Code. In the case of a corporation that is a member

1 32 of an affiliated group of corporations filing a consolidated

1 33 return, such corporation shall be treated as selling

1 34 electricity to an unrelated person if such electricity is sold

1 35 to such a person by another member of such group.

House File 747 - Introduced continued
2 1 Sec. 3. Section 476B.5, subsection 4, Code 2009, is

2 2 amended to read as follows:

2 3 4. The maximum amount of nameplate generating capacity of

2 4 all qualified facilities the board may find eligible under

2 5 this chapter shall not exceed four one hundred fifty megawatts

2 6 of nameplate generating capacity.

2 7 Sec. 4. Section 476B.6, subsection 1, Code 2009, is

2 8 amended to read as follows:

2 9 1. a. If a city or a county in which a qualified facility

2 10 is located has enacted an ordinance under section 427B.26 and

2 11 an owner has filed for and received special valuation pursuant

2 12 to that ordinance, the owner is not required to obtain

2 13 approval from the city council or county board of supervisors

2 14 to apply for the wind energy production tax credit pursuant to

2 15 subsection 2.

2 16 a. b. (1) To be eligible to receive the wind energy


2 17 production tax credit, If neither a city nor a county in which


2 18 a qualified facility is located has enacted an ordinance under

2 19 section 427B.26, or a qualified facility is not eligible for

2 20 special valuation pursuant to an ordinance adopted by a city

2 21 or a county under section 427B.26, the owner must first

2 22 receive approval of the applicable city council or county

2 23 board of supervisors of the city or county in which the

2 24 qualified facility is located in order to be eligible to


2 25 receive the wind energy production tax credit. The

2 26 application for approval may be submitted prior to

2 27 commencement of the construction of the qualified facility but

2 28 shall be submitted no later than the close of the owner's

2 29 first taxable year for which the credit is to be applied for.

2 30 The application must contain the owner's name and address, the

2 31 address of the qualified facility, and the dates of the

2 32 owner's first and last taxable years for which the credit will

2 33 be applied for. Within forty=five days of the receipt of the

2 34 application for approval, the city council or county board of

2 35 supervisors, as applicable, shall either approve or disapprove

House File 747 - Introduced continued
3 1 the application. After the forty=five=day limit time period

3 2 has expired, the application is deemed to be approved.

3 3 b. (2) Upon approval of the an application submitted



3 4 pursuant to subparagraph (1), the owner may apply for the tax

3 5 credit as provided in subsection 2. In addition, approval of

3 6 the application submitted pursuant to subparagraph (1) is

3 7 acceptance by the applicant for the assessment of the

3 8 qualified facility for property tax purposes for a period of

3 9 twelve years and approval by the city council or county board

3 10 of supervisors, as applicable, for the payment of the property

3 11 taxes levied on the qualified property to the state. For

3 12 purposes of property taxation, the qualified facility

3 13 receiving approval of an application submitted pursuant to


3 14 subparagraph (1) shall be centrally assessed and shall be

3 15 exempt from any replacement tax under section 437A.6 for the

3 16 period during which the facility is subject to property

3 17 taxation. The property taxes to be paid to the state are

3 18 those property taxes which make up the consolidated tax levied

3 19 on the qualified facility and which are due and payable in the

3 20 twelve=year period beginning with the first fiscal year

3 21 beginning on or after the end of the owner's first taxable

3 22 year for which the credit is applied for. Upon approval of

3 23 the application, the city council or county board of

3 24 supervisors, as applicable, shall notify the county treasurer

3 25 to state designate on the tax statement which lists the taxes

3 26 on the qualified facility that the amount of the property

3 27 taxes shall to be paid to the department. Payment of the

3 28 designated property taxes to the department shall be in the

3 29 same manner as required for the payment of regular property

3 30 taxes and failure to pay designated property taxes to the

3 31 department shall be treated the same as failure to pay

3 32 property taxes to the county treasurer.

3 33 c. Once the owner of the qualified facility receives

3 34 approval under paragraph "a" "b", subsequent approval under

3 35 paragraph "a" "b" is not required for the same qualified


House File 747 - Introduced continued
4 1 facility for subsequent taxable years.

4 2 Sec. 5. Section 476C.3, subsection 3, Code 2009, is

4 3 amended to read as follows:

4 4 3. A facility that is not operational within thirty months

4 5 after issuance of an approval for the facility by the board

4 6 shall cease to be an eligible renewable energy facility.

4 7 However, a wind energy conversion facility that is approved as

4 8 eligible under this section but is not operational within

4 9 eighteen months due to the unavailability of necessary

4 10 equipment shall be granted an additional twelve twenty=four

4 11 months to become operational. A facility that is granted and

4 12 thereafter loses approval may reapply to the board for a new

4 13 determination.

4 14 Sec. 6. Section 476C.3, subsection 4, Code 2009, is

4 15 amended to read as follows:

4 16 4. The maximum amount of nameplate generating capacity of

4 17 all wind energy conversion facilities the board may find

4 18 eligible under this chapter shall not exceed one three hundred

4 19 eighty thirty megawatts of nameplate generating capacity. The

4 20 maximum amount of energy production capacity equivalent of all

4 21 other facilities the board may find eligible under this

4 22 chapter shall not exceed a combined output of twenty megawatts

4 23 of nameplate generating capacity and one hundred sixty=seven

4 24 billion British thermal units of heat for a commercial

4 25 purpose. Of the maximum amount of energy production capacity

4 26 equivalent of all other facilities found eligible under this

4 27 chapter, fifty=five billion British thermal units of heat for

4 28 a commercial purpose shall be reserved for an eligible

4 29 facility that is a refuse conversion facility for processed,

4 30 engineered fuel from a multicounty solid waste management

4 31 planning area. The maximum amount of energy production

4 32 capacity the board may find eligible for a single refuse

4 33 conversion facility is fifty=five billion British thermal

4 34 units of heat for a commercial purpose.

4 35 Sec. 7. REFUNDS. Refunds of taxes, interest, or penalties
House File 747 - Introduced continued
5 1 which may arise from claims resulting from the amendment of

5 2 section 476B.4 in this Act, for the exemption of sales of wind

5 3 energy conversion property as provided in section 423.3,

5 4 subsection 54, occurring between January 1, 2008, and the

5 5 effective date of this Act, shall be limited to one hundred

5 6 thousand dollars in the aggregate and shall not be allowed

5 7 unless refund claims are filed prior to October 1, 2009,

5 8 notwithstanding any other provision of law. If the amount of

5 9 claims totals more than one hundred thousand dollars in the

5 10 aggregate, the department of revenue shall prorate the one

5 11 hundred thousand dollars among all claimants in relation to

5 12 the amounts of the claimants' valid claims. Claimants shall

5 13 not be entitled to interest on any refunds.

5 14 Sec. 8. RENEWABLE ENERGY TAX CREDIT ELIGIBILITY STUDY.

5 15 The utilities board of the utilities division of the

5 16 department of commerce shall conduct a study to evaluate

5 17 whether procedures applicable to eligible renewable energy

5 18 facilities which have been approved for the renewable energy

5 19 tax credit but are not yet operational pursuant to section

5 20 476C.3, subsection 3, and eligible renewable energy facilities

5 21 which have been placed on a waiting list for approval pursuant

5 22 to section 476C.3, subsection 5, are in need of modification.

5 23 The study shall include a survey of each facility which has

5 24 been approved to determine the extent to which progress has

5 25 been made toward achieving operational status. The study

5 26 shall also include a survey of each facility which has been

5 27 determined eligible and is awaiting approval, to ascertain

5 28 whether the facility continues to seek approval and is

5 29 committed to becoming operational once approval is obtained.

5 30 Based on the results of the surveys, the board shall submit

5 31 recommendations to the general assembly by January 1, 2010,

5 32 regarding whether statutory or procedural modifications are

5 33 necessary to ensure that facilities are being effectively and

5 34 efficiently maintained in an approved or eligible status.

5 35 Sec. 9. EFFECTIVE AND APPLICABILITY DATES. The sections
House File 747 - Introduced continued
6 1 of this Act amending sections 476B.4 and 476B.6, being deemed

6 2 of immediate importance, take effect upon enactment and apply

6 3 retroactively to January 1, 2008, for tax years beginning on

6 4 or after that date.

6 5 EXPLANATION

6 6 This bill modifies eligibility requirements applicable to

6 7 the wind energy production tax credit established in Code

6 8 chapter 476B and the renewable energy tax credit established

6 9 in Code chapter 476C.

6 10 With regard to the wind energy production tax credit, the

6 11 bill adds to the definition of "qualified facility", for

6 12 applications filed on or after July 1, 2009, by a private

6 13 college or university, community college, institution under

6 14 the control of the state board of regents, or public hospital

6 15 as defined in Code section 249J.3, for the applicant's own use

6 16 of qualified electricity a wind turbine with a combined

6 17 nameplate capacity of three=fourths of a megawatt or greater.

6 18 The bill deletes a provision which had prevented

6 19 eligibility for the wind energy production tax credit for any

6 20 kilowatt=hour of electricity produced on wind energy

6 21 conversion property for which the owner had claimed or

6 22 received specified special property tax valuation or sales tax

6 23 exemptions, thus preserving credit availability for owners

6 24 having received special valuation or having claimed the sales

6 25 tax exemptions. Because of the retroactivity of the

6 26 elimination of the restriction of the receipt of the tax

6 27 credit to those who have not received the sales tax exemption,

6 28 a provision for refund of sales tax paid is included in the

6 29 bill. These provisions take effect upon enactment and apply

6 30 retroactively to January 1, 2008, for tax years beginning on

6 31 or after that date.

6 32 The bill changes a provision specifying the maximum amount

6 33 of nameplate generating capacity of all qualifying facilities

6 34 under Code chapter 476B, currently at 450 megawatts of

6 35 nameplate generating capacity, to 150 megawatts.
House File 747 - Introduced continued
7 1 With regard to the renewable energy tax credit, the bill

7 2 provides for an extension of time for a wind energy conversion

7 3 facility to become operational following issuance of an

7 4 approval from the current period of 12 additional months to 24

7 5 additional months.

7 6 The bill changes a provision specifying the maximum amount

7 7 of nameplate generating capacity for all eligible wind energy

7 8 conversion facilities under Code chapter 476C, currently at

7 9 180 megawatts of nameplate generating capacity, to 330

7 10 megawatts.

7 11 Additionally, the bill directs the utilities board of the

7 12 utilities division of the department of commerce to conduct a

7 13 study to evaluate whether procedures applicable to eligible

7 14 renewable energy facilities which have been approved for the

7 15 renewable energy tax credit under Code chapter 476C but are

7 16 not yet operational, and facilities which have been placed on

7 17 a waiting list for approval, are in need of modification. The

7 18 board is required to submit recommendations to the general

7 19 assembly by January 1, 2010, regarding whether statutory or

7 20 procedural modifications appear necessary.

7 21 LSB 1649HV 83

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