Bill Text: IA SF491 | 2015-2016 | 86th General Assembly | Introduced
Bill Title: A bill for an act creating a geothermal tax credit available against the individual income tax and including effective date and applicability provisions.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2015-04-21 - Subcommittee, Hogg, Bolkcom, and Feenstra. S.J. 905. [SF491 Detail]
Download: Iowa-2015-SF491-Introduced.html
Senate File 491 - Introduced SENATE FILE BY ANDERSON A BILL FOR 1 An Act creating a geothermal tax credit available against the 2 individual income tax and including effective date and 3 applicability provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: TLSB 2222XS (2) 86 mm/sc PAG LIN 1 1 Section 1. NEW SECTION. 422.10A Geothermal tax credit. 1 2 1. For purposes of this section, unless the context 1 3 otherwise requires: 1 4 a. "Qualified geothermal heat pump property" means any 1 5 equipment that uses the ground or ground water as a thermal 1 6 energy source to heat the dwelling unit of the taxpayer or as a 1 7 thermal energy sink to cool such dwelling unit, which equipment 1 8 meets the requirements of the federal Energy Star program in 1 9 effect at the time that the expenditure for such equipment is 1 10 made. 1 11 b. "Qualified geothermal heat pump property expenditures" 1 12 means an expenditure for qualified geothermal heat pump 1 13 property installed on or in connection with a dwelling unit 1 14 located in Iowa and used as a residence by the taxpayer. 1 15 2. The taxes imposed under this division, less the credits 1 16 allowed under section 422.12, shall be reduced by a geothermal 1 17 tax credit equal to twenty=five percent of the qualified 1 18 geothermal heat pump property expenditures made by the taxpayer 1 19 during the tax year, not to exceed ten thousand dollars for 1 20 each separate and distinct geothermal installation. 1 21 3. The department shall establish criteria, by rule, for 1 22 determining what constitutes a separate and distinct geothermal 1 23 installation. Qualified geothermal heat pump property 1 24 expenditures shall be deemed to have been made on the date the 1 25 installation is complete or, in the case of new construction 1 26 or reconstruction, the date the original use of the structure 1 27 by the taxpayer begins. 1 28 4. In the case of a taxpayer whose dwelling unit is part 1 29 of a multiple housing cooperative organized under chapter 1 30 499A or a horizontal property regime under chapter 499B, 1 31 the taxpayer shall be treated as having made the taxpayer's 1 32 proportionate share of any qualified geothermal heat pump 1 33 property expenditures made by the cooperative or the regime. 1 34 5. The tax credit shall be claimed by way of a tax credit 1 35 certificate issued by the department and included with the 2 1 taxpayer's tax return. To receive a tax credit, a taxpayer 2 2 must submit an application to the department. The department 2 3 shall issue certificates under this section on a first=come, 2 4 first=served basis, which certificates may be claimed for tax 2 5 credits. 2 6 6. The cumulative value of tax credits claimed annually 2 7 by applicants pursuant to this section shall not exceed two 2 8 million five hundred thousand dollars. If in a calendar year 2 9 the aggregate amount of tax credits applied for exceeds two 2 10 million five hundred thousand dollars, the department shall 2 11 establish a wait list for tax credits. Applications that were 2 12 approved but for which certificates were not issued shall be 2 13 placed on the wait list in the order the applications were 2 14 received and those applicants shall be given priority for 2 15 receiving certificates in succeeding calendar years. Placement 2 16 on a wait list pursuant to this subsection shall not constitute 2 17 a promise binding the state. The availability of a tax credit 2 18 and issuance of a tax credit certificate pursuant to this 2 19 section in a future calendar year is contingent upon the 2 20 availability of tax credits in that particular calendar year. 2 21 7. Any credit in excess of the tax liability is not 2 22 refundable but the excess for the tax year may be credited 2 23 to the tax liability for the following ten years or until 2 24 depleted, whichever is earlier. 2 25 8. A tax credit shall not be transferable to any other 2 26 person. 2 27 9. A taxpayer who is eligible to claim a credit under this 2 28 section may also claim the geothermal heat pump tax credit 2 29 under section 422.11I, if available, on the same expenditures. 2 30 Sec. 2. EFFECTIVE DATE. This Act takes effect January 1, 2 31 2017. 2 32 Sec. 3. APPLICABILITY. This Act applies to qualified 2 33 geothermal heat pump property expenditures incurred on or after 2 34 January 1, 2017. 2 35 EXPLANATION 3 1 The inclusion of this explanation does not constitute agreement with 3 2 the explanation's substance by the members of the general assembly. 3 3 This bill creates a geothermal tax credit available 3 4 against the individual income tax equal to 25 percent of the 3 5 expenditures for qualified geothermal heat pump property 3 6 installed on or in connection with a dwelling unit located in 3 7 Iowa and used as a residence by the taxpayer, not to exceed 3 8 $10,000 for each separate and distinct geothermal installation. 3 9 The bill requires the department of revenue (department) to 3 10 adopt rules for what constitutes a separate and distinct 3 11 geothermal installation. "Qualified geothermal heat pump 3 12 property" and other related terms are defined in the bill. 3 13 For purposes of the tax credit, expenditures are deemed to be 3 14 made on the date the installation is complete or, in the case 3 15 of new construction or reconstruction, the date the original 3 16 use of the structure begins. If the taxpayer's dwelling 3 17 unit is part of a multiple housing cooperative (Code chapter 3 18 499A) or a horizontal property regime (Code chapter 499B) the 3 19 taxpayer is treated as having made a proportionate share of any 3 20 expenditures made by the cooperative or regime. 3 21 In order to receive a tax credit, the taxpayer submits 3 22 an application to the department and the department issues 3 23 the taxpayer a tax credit certificate. No more than $2.5 3 24 million in geothermal tax credits may be claimed per year. 3 25 If the applications for tax credits exceed that amount, the 3 26 department is required to establish a wait list in the order 3 27 the applications were received and those applicants will 3 28 receive priority for receiving tax credits in succeeding years. 3 29 The tax credit is nontransferable and nonrefundable, but any 3 30 amount in excess of the taxpayer's tax liability may be carried 3 31 forward for up to 10 years. 3 32 A taxpayer who claims the geothermal tax credit is also 3 33 eligible to claim the geothermal heat pump tax credit under 3 34 Code section 422.11I, if available, on the same expenditures. 3 35 Code section 422.11I currently provides a tax credit equal 4 1 to 20 percent of the federal residential energy efficiency 4 2 property tax credit for geothermal heat pumps, but that federal 4 3 credit is scheduled to expire after the 2016 tax year. 4 4 The bill takes effect January 1, 2017, and applies to 4 5 qualified geothermal heat pump property expenditures incurred 4 6 on or after that date. 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