HOUSE 3rd Reading Unamended May 1, 2015 HOUSE Amended 2nd Reading April 30, 2015First Regular Session Seventieth General Assembly STATE OF COLORADO REENGROSSED This Version Includes All Amendments Adopted in the House of Introduction LLS NO. 15-0932.01 Esther van Mourik x4215HOUSE BILL 15-1332 HOUSE SPONSORSHIP Pabon, SENATE SPONSORSHIP Crowder, House Committees Senate Committees Transportation & Energy Finance Appropriations A BILL FOR AN ACT Concerning an income tax credit for the purchase and installation of certain distributed energy resource systems. Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://www.leg.state.co.us/billsummaries.) For income tax years commencing on or after January 1, 2015, but prior to January 1, 2018, the bill allows to any qualified taxpayer a one-time refundable income tax credit against the taxes due in an amount equal to the lesser of 30% of the taxpayer's total cost or $50,000 for purchasing and installing the equipment necessary to generate electricity using hydroelectricity, wind, or biomass resources. For purposes of this income tax credit, a qualified taxpayer is a resident individual or a partnership, S corporation, or other similar pass-through entity that: Is an end-use electricity customer of a cooperative electric association or a municipal electric utility; and Generates electricity on the customer's side of the meter using qualified equipment. The bill requires the Colorado energy office to issue credit certificates up to an aggregate capped amount to taxpayers who have met all the requirements of the tax credit. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, add 39-22-538 as follows: 39-22-538. Credit for purchase and installation of certain distributed energy resource systems - legislative declaration - definitions - repeal. (1) The general assembly declares that: (a) The purpose of the tax expenditure in this section is to allow Coloradans in portions of the state served by cooperative electric associations and municipal electric utilities to be able to purchase and install distributed energy resource systems that use wind or hydroelectric resources to help lower utility costs for consumers, create local jobs as a result of the installation of such systems, and help stabilize energy security in the event of natural disasters such as floods and fires that damage the electric grid; (b) Distributed energy resource systems do not require additional transmission and are located on the customer's side of the meter; (c) Increased use of distributed energy resource systems that rely on renewable energy will also assist in fulfilling the state's renewable energy portfolio standard requirements; and (d) A targeted income tax credit would reduce the cost of the up-front investment of installing these specific types of distributed energy resource systems. (2) As used in this section, unless the context otherwise requires: (a) "Colorado energy office" or "office" means the Colorado energy office created in section 24-38.5-101, C.R.S. (b) "Credit certificate" means a statement issued by the Colorado energy office certifying that a given taxpayer has installed, according to the applicable utility interconnection requirements, the qualified equipment so that it is operational and specifying the amount of the credit allowed. (c) "Department" means the department of revenue. (d) "Qualified equipment" means the equipment necessary to generate electricity using hydroelectricity or wind resources that are eligible under section 40-9.5-118, C.R.S. (e) "Qualified taxpayer" means a resident individual or a partnership, S corporation, or other similar pass-through entity that: (I) Is an end-use electricity customer of a utility; and (II) Generates electricity on the customer's side of the meter using qualified equipment. (f) "Total cost" includes the retail price of the qualified equipment and the cost of the installation. (g) "Utility" means a cooperative electric association or a municipal electric utility. (3) (a) For income tax years commencing on or after January 1, 2016, but prior to January 1, 2019, there is allowed to any qualified taxpayer a one-time income tax credit against the taxes due under this article in an amount equal to the lesser of thirty percent of the taxpayer's total cost of the qualified equipment or twenty-five thousand dollars expended by the taxpayer during the tax year. (b) The Colorado energy office shall issue credit certificates to qualified taxpayers who meet the requirements of this section. The Colorado energy office, in its discretion, may issue credit certificates totaling up to two hundred fifty thousand dollars per income tax year, and the unused portion of the two hundred fifty thousand dollars per income tax year may be used by the office to issue more than two hundred fifty thousand dollars in credit certificates in future income tax years, so long as the office does not issue credit certificates totaling more than seven hundred fifty thousand dollars during the income tax years for which the credit allowed in paragraph (a) of this subsection (3) is available. (c) The Colorado energy office may require a qualified taxpayer to provide the office any documentation necessary to issue the credit certificates. (4) To claim the income tax credit allowed in this section, the qualified taxpayer shall attach a copy of the credit certificate to the taxpayer's tax return. No tax credit is allowed under this section unless the taxpayer provides the copy of the credit certificate. (5) The requirements for the customer-generator and the cooperative electric association set forth in section 40-9.5-118, C.R.S., apply to the qualified taxpayer and the utility for purposes of the income tax credit allowed in this section. (6) If a credit allowed in this section exceeds the income tax due on the income of the qualified taxpayer for the taxable year, the excess credit may not be carried forward and shall be refunded to the taxpayer. (7) The office shall, in a sufficiently timely manner to allow the department to process returns claiming the credit allowed by this section, provide the department with an electronic report of the qualified taxpayers receiving a credit certificate as allowed in this section for the preceding calendar year that includes the following information: (a) The taxpayer's name; (b) The taxpayer's social security number or the taxpayer's Colorado account number and federal employer identification number; and (c) The amount of the credit allowed in this section. (8) No later than January 5, 2018, the Colorado energy office shall submit a report to the transportation and energy and finance committees of the house of representatives and the agriculture, natural resources, and energy and finance committees of the senate that details: (a) The quality of the implementation of this section; (b) The area of the state where qualified taxpayers were located; (c) The type of qualified equipment installed as a result of this section; (d) The value of the tax credits allowed under this section; and (e) Any problems or issues arising in the implementation of this section. (9) This section is repealed, effective December 31, 2021. SECTION 2. Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.