Bill Text: IA HF323 | 2021-2022 | 89th General Assembly | Introduced
Bill Title: A bill for an act relating to the solar energy system tax credit available against the individual and corporate income tax, the franchise tax, the moneys and credits tax, and including effective date and retroactive applicability provisions.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2021-02-01 - Introduced, referred to Ways and Means. H.J. 263. [HF323 Detail]
Download: Iowa-2021-HF323-Introduced.html
House
File
323
-
Introduced
HOUSE
FILE
323
BY
STAED
A
BILL
FOR
An
Act
relating
to
the
solar
energy
system
tax
credit
available
1
against
the
individual
and
corporate
income
tax,
the
2
franchise
tax,
the
moneys
and
credits
tax,
and
including
3
effective
date
and
retroactive
applicability
provisions.
4
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
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Section
1.
Section
422.11L,
Code
2021,
is
amended
by
1
striking
the
section
and
inserting
in
lieu
thereof
the
2
following:
3
422.11L
Solar
energy
system
tax
credits.
4
1.
As
used
in
this
section:
5
a.
“Commercial
solar
energy
system”
means
a
solar
energy
6
system
on
property
that
is
not
residential
or
multiresidential.
7
b.
“Residential
solar
energy
system”
means
a
solar
energy
8
system
on
residential
property
or
multiresidential
property.
9
c.
“Solar
energy
system”
means
a
system
of
equipment
capable
10
of
collecting
and
converting
incident
solar
radiation
into
11
thermal,
mechanical,
or
electrical
energy
and
transporting
the
12
energy
by
a
separate
apparatus
to
storage
or
to
a
point
of
use.
13
2.
Beginning
with
installations
completed
on
or
after
14
January
1,
2021,
the
taxes
imposed
under
this
subchapter,
less
15
the
credits
allowed
under
section
422.12,
shall
be
reduced
by
a
16
solar
energy
system
tax
credit
equal
to
an
amount
calculated
17
using
only
one
of
the
following
methods:
18
a.
Fifteen
percent
of
the
gross
cost
of
the
solar
energy
19
system,
not
to
exceed
the
following
amounts:
20
(1)
For
a
residential
solar
energy
system,
five
thousand
21
dollars.
22
(2)
For
a
commercial
solar
energy
system,
twenty
thousand
23
dollars.
24
b.
The
sum
of
the
following:
25
(1)
Fifty
percent
of
the
federal
residential
energy
26
efficient
property
credit
related
to
solar
energy
provided
in
27
section
25D(a)(1)
and
section
25D(a)(2)
of
the
Internal
Revenue
28
Code,
not
to
exceed
five
thousand
dollars.
29
(2)
Fifty
percent
of
the
federal
energy
credit
related
to
30
solar
energy
systems
provided
in
section
48(a)(2)(A)(i)(II)
and
31
section
48(a)(2)(A)(i)(III)
of
the
Internal
Revenue
Code,
not
32
to
exceed
twenty
thousand
dollars.
33
3.
Any
credit
in
excess
of
the
tax
liability
is
not
34
refundable
but
the
excess
for
the
tax
year
may
be
credited
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to
the
tax
liability
for
the
following
ten
years
or
until
1
depleted,
whichever
is
earlier.
2
4.
a.
An
individual
may
claim
the
tax
credit
allowed
a
3
partnership,
limited
liability
company,
S
corporation,
estate,
4
or
trust
electing
to
have
the
income
taxed
directly
to
the
5
individual.
The
amount
claimed
by
the
individual
shall
be
6
based
upon
the
pro
rata
share
of
the
individual’s
earnings
of
7
the
partnership,
limited
liability
company,
S
corporation,
8
estate,
or
trust.
9
b.
A
taxpayer
who
is
eligible
to
claim
a
credit
under
this
10
section
shall
not
be
eligible
to
claim
a
renewable
energy
tax
11
credit
under
chapter
476C.
12
c.
A
taxpayer
may
claim
more
than
one
credit
under
this
13
section,
but
may
claim
only
one
credit
per
separate
and
14
distinct
solar
energy
system
installation.
The
department
15
shall
establish
criteria,
by
rule,
for
determining
what
16
constitutes
a
separate
and
distinct
installation.
17
d.
(1)
A
taxpayer
must
submit
an
application
to
the
18
department
for
each
separate
and
distinct
solar
energy
19
system
installation.
The
application
must
be
approved
by
the
20
department
in
order
to
claim
the
tax
credit.
The
application
21
must
be
filed
by
May
1
following
the
year
of
the
installation
22
of
the
solar
energy
system.
23
(2)
The
department
shall
accept
and
approve
applications
24
on
a
first-come,
first-served
basis
until
the
maximum
amount
25
of
tax
credits
that
may
be
claimed
pursuant
to
subsection
5
26
is
reached.
If
for
a
tax
year
the
aggregate
amount
of
tax
27
credits
applied
for
exceeds
the
amount
specified
in
subsection
28
5,
the
department
shall
establish
a
wait
list
for
tax
credits.
29
Valid
applications
filed
by
the
taxpayer
by
May
1
following
the
30
year
of
the
installation
but
not
approved
by
the
department
31
shall
be
placed
on
a
wait
list
in
the
order
the
applications
32
were
received
and
those
applicants
shall
be
given
priority
33
for
having
their
applications
approved
in
succeeding
years.
34
Placement
on
a
wait
list
pursuant
to
this
subparagraph
shall
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not
constitute
a
promise
binding
the
state.
The
availability
1
of
a
tax
credit
and
approval
of
a
tax
credit
application
2
pursuant
to
this
section
in
a
future
year
is
contingent
upon
3
the
availability
of
tax
credits
in
that
particular
year.
4
5.
a.
The
cumulative
value
of
tax
credits
claimed
annually
5
by
applicants
pursuant
to
this
section
shall
not
exceed
ten
6
million
dollars.
7
b.
If
an
amount
of
tax
credits
available
for
a
tax
year
8
pursuant
to
paragraph
“a”
goes
unclaimed,
the
amount
of
the
9
unclaimed
tax
credits
shall
be
made
available
for
the
following
10
tax
year
in
addition
to,
and
cumulated
with,
the
amount
11
available
pursuant
to
paragraph
“a”
for
the
following
tax
year.
12
6.
On
or
before
January
1,
annually,
the
department
shall
13
submit
a
written
report
to
the
governor
and
the
general
14
assembly
regarding
the
number
and
value
of
tax
credits
claimed
15
under
this
section,
and
any
other
information
the
department
16
may
deem
relevant
and
appropriate.
17
7.
The
director
shall
adopt
rules
pursuant
to
chapter
17A
to
18
administer
this
section.
19
Sec.
2.
Section
422.33,
subsection
29,
paragraph
a,
Code
20
2021,
is
amended
to
read
as
follows:
21
a.
The
Beginning
with
installations
completed
on
or
after
22
January
1,
2021,
the
taxes
imposed
under
this
subchapter
shall
23
be
reduced
by
a
solar
energy
system
tax
credit
equal
to
sixty
24
percent
of
the
federal
energy
credit
related
to
solar
energy
25
systems
provided
in
section
48(a)(2)(A)(i)(II)
and
section
26
48(a)(2)(A)(i)(III)
of
the
Internal
Revenue
Code
,
not
to
exceed
27
twenty
thousand
dollars.
For
installations
occurring
on
or
28
after
January
1,
2016,
the
applicable
percentage
of
the
federal
29
energy
credit
related
to
solar
energy
systems
shall
be
fifty
30
percent
allowed
under
section
422.11L
.
31
Sec.
3.
Section
422.60,
subsection
12,
paragraph
a,
Code
32
2021,
is
amended
to
read
as
follows:
33
a.
The
Beginning
with
the
installations
completed
on
or
34
after
January
1,
2021,
the
taxes
imposed
under
this
subchapter
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shall
be
reduced
by
a
solar
energy
system
tax
credit
equal
to
1
sixty
percent
of
the
federal
energy
credit
related
to
solar
2
energy
systems
provided
in
section
48(a)(2)(A)(i)(II)
and
3
section
48(a)(2)(A)(i)(III)
of
the
Internal
Revenue
Code
,
not
4
to
exceed
twenty
thousand
dollars.
For
installations
occurring
5
on
or
after
January
1,
2016,
the
applicable
percentage
of
the
6
federal
energy
credit
related
to
solar
energy
systems
shall
be
7
fifty
percent
allowed
under
section
422.11L
.
8
Sec.
4.
Section
533.329,
subsection
2,
paragraph
k,
Code
9
2021,
is
amended
to
read
as
follows:
10
k.
The
Beginning
with
the
installations
completed
on
or
11
after
January
1,
2021,
the
moneys
and
credits
tax
imposed
under
12
this
section
shall
be
reduced
by
a
solar
energy
system
tax
13
credit
allowed
under
section
422.11L
.
14
Sec.
5.
CUMULATIVE
VALUE
OF
SOLAR
ENERGY
SYSTEM
TAX
CREDIT
15
FOR
YEAR
2021
——
WAIT
LIST.
Notwithstanding
section
422.11L,
16
subsection
5,
as
enacted
by
this
Act,
there
shall
be
no
maximum
17
cumulative
value
of
tax
credits
that
may
be
claimed
during
the
18
2021
calendar
year
until
such
time
as
the
wait
list
pursuant
to
19
section
422.11L,
subsection
3,
Code
2021,
has
been
eliminated.
20
If
the
wait
list
has
been
eliminated
during
the
2021
calendar
21
year,
the
maximum
cumulative
value
of
tax
credits
during
22
calendar
year
2021
shall
not
exceed
the
maximum
cumulative
23
value
of
tax
credits
specified
in
section
422.11L,
subsection
24
5,
as
enacted
by
this
Act.
25
Sec.
6.
EFFECTIVE
DATE.
This
Act,
being
deemed
of
immediate
26
importance,
takes
effect
upon
enactment.
27
Sec.
7.
RETROACTIVE
APPLICABILITY.
This
Act
applies
28
retroactively
to
January
1,
2021,
for
tax
years
ending
on
or
29
after
that
date.
30
EXPLANATION
31
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
32
the
explanation’s
substance
by
the
members
of
the
general
assembly.
33
This
bill
relates
to
the
solar
energy
system
tax
credit.
34
Under
existing
law,
the
Iowa
solar
energy
system
tax
credit
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available
against
the
individual
or
corporate
income
tax,
the
1
franchise
tax,
or
the
moneys
and
credits
tax
equals
the
sum
of
2
50
percent
of
the
federal
residential
energy
efficient
property
3
credit,
not
to
exceed
$5,000,
plus
50
percent
of
the
federal
4
energy
credit
related
to
solar
energy
systems,
not
to
exceed
5
$20,000.
6
The
bill
maintains
the
existing
framework
of
the
solar
7
energy
system
tax
credit
as
a
percentage
of
the
federal
energy
8
credit
but
creates
a
new
Iowa
solar
energy
system
tax
credit
9
for
installations
completed
on
or
after
January
1,
2021.
For
10
solar
energy
systems
completed
on
or
after
January
1,
2021,
the
11
bill
allows
a
taxpayer
to
calculate
the
solar
energy
system
tax
12
credit
amount
as
a
percentage
of
the
federal
energy
credit
or
13
calculate
the
solar
energy
system
tax
credit
amount
pursuant
14
to
the
new
Iowa
solar
energy
system
tax
credit
created
in
the
15
bill.
The
bill
creates
a
residential
solar
energy
system
tax
16
credit
equal
to
15
percent
of
the
gross
cost
of
the
system,
up
17
to
$5,000.
The
bill
creates
a
separate
commercial
solar
energy
18
system
tax
credit
not
to
exceed
15
percent
of
the
gross
cost
of
19
the
system,
up
to
$20,000.
The
bill
defines
“residential
solar
20
energy
system”
to
mean
a
solar
energy
project
on
residential
21
property
or
multiresidential
property.
The
bill
defines
22
“commercial
solar
energy
system”
to
mean
a
solar
energy
system
23
on
a
property
that
is
not
residential
or
multiresidential.
24
Any
tax
credit
approved
under
the
bill
is
not
refundable
25
but
the
excess
for
the
tax
year
may
be
credited
to
the
tax
26
liability
for
the
following
10
years
or
until
depleted,
27
whichever
is
earlier.
28
The
tax
credit
is
available
against
the
individual
and
29
corporate
income
taxes,
the
franchise
tax,
and
the
moneys
and
30
credits
tax.
31
A
taxpayer
eligible
to
claim
a
credit
under
the
bill
is
not
32
eligible
to
claim
a
renewable
energy
tax
credit
under
Code
33
chapter
476C.
34
The
bill
provides
that
a
taxpayer
may
claim
more
than
one
tax
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credit,
but
may
claim
only
one
credit
per
separate
and
distinct
1
solar
energy
system
installation.
2
The
bill
permanently
increases
the
maximum
cumulative
value
3
of
tax
credits
that
may
be
claimed
during
the
year
from
$4
4
million
to
$10
million.
5
The
bill
eliminates
the
wait
list
for
the
tax
credit
by
6
removing
the
maximum
cumulative
value
of
tax
credits
that
may
7
be
claimed
in
a
year
for
calendar
year
2021
until
the
wait
list
8
is
eliminated.
If
the
wait
list
is
eliminated
during
calendar
9
year
2021,
the
maximum
cumulative
value
of
tax
credits
that
10
may
be
claimed
during
calendar
year
2021
shall
not
exceed
the
11
maximum
cumulative
value
established
in
the
bill,
$10
million.
12
The
bill
takes
effect
upon
enactment
and
applies
13
retroactively
to
January
1,
2021,
for
tax
years
ending
on
or
14
after
that
date.
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