GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2009
H 2
HOUSE BILL 512*
Committee Substitute Favorable 6/25/09
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Short Title: Incentives for Energy Conservation. |
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Referred to: |
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March 10, 2009
A BILL TO BE ENTITLED
AN ACT to create incentives for renewable energy and energy efficiency.
Whereas, the House Energy and Energy Efficiency Committee reviewed the following tax credits based on the revenue impact of the credits, including how stable the revenue impact would be over time; and
Whereas, the House Energy and Energy Efficiency Committee reviewed the following tax credits based on the tax incidence and equality, including who benefits from the credits, and who will ultimately bear the burden of the tax credits; and
Whereas, the House Energy and Energy Efficiency Committee reviewed the following tax credits based on the effectiveness of the credits, including whether the credits will effectively encourage investment in renewable energy and high‑performance homes; and
Whereas, the House Energy and Energy Efficiency Committee reviewed the following tax credits based on the efficiency and clarity of the tax credits, including whether the credits are easy to understand and easy to administer; Now, therefore,
The General Assembly of North Carolina enacts:
part i: fuel cell property, renewable energy property, and energy efficiency property Credit
SECTION 1.(a) G.S. 105‑129.15 reads as rewritten:
"The following definitions apply in this Article:
(3a) Energy efficiency property. Any of the following machinery and equipment or real property should be:
a. Combined heat and power property. Equipment located at a retail electric customer's facility or home that does both of the following:
1. Simultaneously and efficiently produces useful thermal value and electricity.
2. Recovers not less than sixty percent (60%) of the energy value in the fuel (on a higher‑heating‑value basis) in the form of useful thermal energy and electricity.
b. Geothermal equipment that uses the internal heat of the earth as a substitute for traditional energy for water heating or active space heating and cooling.
(3b) Fuel cell property. Equipment that uses an electrochemical process to convert renewable‑energy‑generated hydrogen to electricity.
(7) Renewable energy property. Any of the following machinery and equipment or real property:
c. Solar energy equipment that uses solar radiation as a substitute for traditional energy for water heating, active space heating and cooling, passive heating, daylighting, generating electricity, distillation, desalination, detoxification, or the production of industrial or commercial process heat. The term also includes related devices necessary for collecting, storing, exchanging, conditioning, or converting solar energy to other useful forms of energy. Solar energy equipment for water heating must be certified for performance by the nonprofit Solar Rating Certification Corporation.
. "
SECTION 1.(b) G.S. 105‑129.16A reads as rewritten:
"§ 105‑129.16A. Credit for investing in fuel cell property, renewable energy property, and energy efficiency property.
(a) Credit. If a taxpayer that has constructed,
purchased, or leased fuel cell property, renewable energy property,
or energy efficiency property places it in service in this State during the
taxable year, the taxpayer is allowed a credit equal to thirty‑five
percent (35%) of the cost of the property.under this section. In the
case of renewable energy property that serves a single‑family
dwelling, the credit must be taken for the taxable year in which the property
is placed in service. For all other renewable energy property, the
entire credit may not be taken for the taxable year in which the property is
placed in service but must be taken in five equal installments beginning with
the taxable year in which the property is placed in service. The amount of
the credit is as follows:
(1) Renewable energy property. The credit is equal to thirty‑five percent (35%) of the cost of the property.
(2) Fuel cell and energy efficiency property. The credit is equal to ten percent (10%) of the cost of the property.
(b) Expiration. If, in one of the years in which the
installment of a credit accrues, the renewable energy property with
respect to which the credit was claimed is disposed of, taken out of service,
or moved out of State, the credit expires and the taxpayer may not take any
remaining installment of the credit. The taxpayer may, however, take the
portion of an installment that accrued in a previous year and was carried
forward to the extent permitted under G.S. 105‑129.17. No credit is
allowed under this section to the extent the cost of the renewable energy property
was provided by public funds.
(c) Ceilings. The credit allowed by this section may not exceed the applicable ceilings provided in this subsection.
(1) Nonresidential Property. A ceiling of two million
five hundred thousand dollars ($2,500,000) per installation applies to fuel
cell property, renewable energy property, or energy efficiency property
placed in service for any purpose other than residential.by a
business entity in furtherance of a commercial enterprise.
(2) Residential Property. The following ceilings apply to renewable energy property and energy efficiency property placed in service for residential purposes:
a. One thousand four hundred dollars ($1,400) per dwelling unit for solar energy equipment for domestic water heating, including pool heating.
b. Three thousand five hundred dollars ($3,500) per dwelling unit for solar energy equipment for active space heating, combined active space and domestic hot water systems, and passive space heating.
c. Ten thousand five hundred dollars ($10,500) per installation for any other renewable energy property for residential purposes.
d. Ten thousand five hundred dollars ($10,500) per installation for combined heat and power property.
e. Eight thousand four hundred dollars ($8,400) per installation for geothermal heat pumps.
(e) Sunset. This section is repealed effective for fuel
cell property, renewable energy property, and energy efficiency
property placed into service on or after January 1, 2011.2016.
(f) Tax Election. For purposes of the tax credit allowed under this section, the tax election required under G.S. 105‑129.17(a) also includes the gross premium taxes levied in Article 8B of this Chapter."
part ii: fuel cell PROPERTY, renewable energy property, and energy efficiency PROPERTY facility construction credit
SECTION 2.(a) G.S. 105‑130.28 is reenacted and reads as rewritten:
"§
105‑130.28. Credit against corporate income tax for construction
construction, expansion, or retooling of a facility for the
manufacture of property components, fuel cell property, renewable energy equipment
property, and energy efficiency property.facility.
(a) Credit. A corporation that constructs constructs,
expands, or retools in North Carolina a facility for the manufacture of
property components, fuel cell property, renewable energy equipment property,
or energy efficiency property, is allowed a credit against the tax imposed
by this Part equal to twenty‑fiveten percent (25%)(10%)
of the installation and equipment costs of construction construction,
expansion, or retooling paid during the taxable year. The entire credit may
not be taken for the taxable year in which the costs are paid but must be taken
in five equal installments beginning with the taxable year in which the costs
are paid.
No credit is allowed, however, to the extent that any of the
costs of the equipment property were provided by federal, State,
or local grants. At least seventy-five percent (75%) of the annual
production of property components must be intended for end products of fuel
cell property, renewable energy property, or energy efficiency property. The
North Carolina Solar Center will verify that the property component manufacturer
has satisfied the minimum annual production requirement of this subsection. To
secure the credit allowed by this section, the taxpayer must own or control the
facility at the time of construction.
(b) Definitions. The following definitions provided
in G.S. 105‑129.15 apply in this section:section.
(1) Biomass equipment. Products designed to
use renewable biomass resources for biofuel production of ethanol, methanol,
and biodiesel; anaerobic biogas production of methane utilizing agricultural
and animal waste or garbage; or commercial thermal or electrical generation
from renewable energy crops or wood waste materials. The term also includes
related devices for converting, conditioning, and storing the liquid fuels,
gas, and electricity produced with biomass equipment.
(2) Hydroelectric generator. Defined in G.S. 105‑129.15.
(3) Renewable biomass resources. Defined in
G.S. 105‑129.15.
(4) Renewable energy equipment. Biomass equipment,
hydroelectric generators, solar electric or thermal equipment, and wind energy
equipment.
(5) Solar electric or thermal equipment. Products
designed to convert sunlight into electricity or heat.
(6) Wind energy equipment. Products
designed to capture and convert wind energy into electricity or mechanical
power.
(c) Cap. The credit allowed by this section may not exceed fifty percent (50%) of the amount of the tax imposed by this Part for the taxable year reduced by the sum of all credits allowable, except payments of tax made by or on behalf of the taxpayer. This limitation applies to the cumulative amount of the credit, including carryforwards, claimed by the taxpayer under this section for the taxable year. Any unused portion of the credit may be carried forward for the succeeding 10 years.
(c1) Tax Election. The credit allowed by this section is allowed against the franchise tax levied in Article 3 of this Chapter or the income taxes levied in Article 4 of this Chapter. The taxpayer must elect the tax against which a credit will be claimed when filing the return on which the first installment of the credit is claimed. This election is binding. Any carryforwards of a credit must be claimed against the same tax.
(d) No Double Credit. A taxpayer that claims any
other credit allowed under this Chapter with respect to construction construction,
expansion, or retooling of a facility for the manufacture of property
components, fuel cell property, renewable energy equipment property,
and energy efficiency property may not take the credit allowed in this
section with respect to the same facility.
(e) Sunset. This section is repealed effective for facilities constructed, expanded, or retooled for the manufacture of property components, fuel cell property, renewable energy property, or energy efficiency property on or after January 1, 2016."
SECTION 2.(b) G.S. 105‑115 is amended by adding a new subdivision to read:
"(7a) Property component. Any part, assembly of parts, material, or supply that is incorporated directly into the end product of fuel cell property, renewable energy property, or energy efficiency component."
part IIi: Effective date
SECTION 3. This act is effective for taxable years beginning on or after January 1, 2009.