2004 Legislation
Print Friendly

HOUSE BILL NO. 760 – Income tax credit/alternatve energy

HOUSE BILL NO. 760

View Bill Status

View Bill Text

View Amendment

View Engrossed Bill (Original Bill with Amendment(s) Incorporated)

View Statement of Purpose / Fiscal Impact



Text to be added within a bill has been marked with Bold and
Underline. Text to be removed has been marked with
Strikethrough and Italic. How these codes are actually displayed will
vary based on the browser software you are using.

This sentence is marked with bold and underline to show added text.

This sentence is marked with strikethrough and italic, indicating
text to be removed.

Bill Status



H0760aa,aaS.........................................by REVENUE AND TAXATION
INCOME TAX CREDIT - Adds to and amends existing law to provide that
taxpayers making expenditures for qualified alternative energy generation
equipment are entitled to the income tax credit for capital investment; to
provide an income tax credit of certain expenditures relating to investment
in alternative energy generation equipment for taxable years 2004 through
2009; to provide definitions; to provide a carryover of unused credits; to
provide procedures; and to provide an income tax credit for certain
expenditures for qualified alternative energy equipment in certain areas of
Idaho with high unemployment or low personal income, at the election of the
taxpayer for taxable years 2004 through 2009.
                                                                        
02/25    House intro - 1st rdg - to printing
02/26    Rpt prt - to Rev/Tax
03/09    Rpt out - to Gen Ord
03/10    Rpt out amen - to engros
03/11    Rpt engros - 1st rdg - to 2nd rdg as amen
03/12    2nd rdg - to 3rd rdg as amen
    Rls susp - PASSED - 65-2-3
      AYES -- Andersen, Barraclough, Barrett, Bauer, Bayer, Bedke, Bell,
      Black, Block, Boe, Bolz, Campbell, Cannon, Clark, Collins, Crow,
      Cuddy, Deal, Denney, Douglas, Eberle, Edmunson, Ellsworth, Eskridge,
      Field(18), Field(23), Gagner, Garrett, Harwood, Jaquet, Jones,
      Kellogg, Kulczyk, Langford, Langhorst, Martinez, McKague, Meyer,
      Miller, Mitchell, Moyle, Naccarato, Nielsen, Pasley-Stuart, Raybould,
      Ridinger, Ring, Ringo, Roberts, Robison, Rydalch, Sali, Sayler,
      Schaefer, Shepherd, Shirley, Skippen, Smith(30), Smylie, Snodgrass,
      Stevenson, Trail, Wills, Wood, Mr. Speaker
      NAYS -- Henbest, Lake
      Absent and excused -- Bradford, McGeachin, Smith(24)
    Floor Sponsor - Eskridge
    Title apvd - to Senate
03/15    Senate intro - 1st rdg - to Loc Gov
03/18    Rpt out - to 14th Ord
    Rpt out amen - to 1st rdg as amen
03/19    1st rdg - to 2nd rdg as amen
    Rls susp - PASSED - 32-0-3
      AYES -- Andreason, Bailey, Brandt, Bunderson, Burkett(Maxand),
      Calabretta, Cameron, Compton, Darrington, Davis, Gannon, Geddes,
      Goedde, Hill, Ingram, Kennedy, Keough, Little, Lodge, Malepeai,
      Marley, McKenzie, McWilliams, Noble, Noh, Richardson, Schroeder,
      Sorensen, Stegner, Stennett, Werk, Williams
      NAYS -- None
      Absent and excused -- Burtenshaw, Pearce, Sweet
    Floor Sponsor - Hill
    Title apvd - to House
03/20    House concurred in Senate amens - to engros
    Rpt engros - 1st rdg - to 2nd rdg as amen
    Rls susp - PASSED - 62-0-8
      AYES -- Andersen, Barraclough, Barrett, Bayer, Bedke, Bell, Black,
      Block, Boe, Bolz, Bradford, Campbell, Cannon, Collins, Crow, Cuddy,
      Deal, Denney, Douglas, Edmunson, Ellsworth, Eskridge, Field(18),
      Field(23), Gagner, Garrett, Henbest, Jaquet, Jones, Kellogg, Kulczyk,
      Lake, Langford, Langhorst, Martinez, McGeachin, McKague, Meyer,
      Miller, Mitchell, Moyle, Naccarato, Nielsen, Pasley-Stuart, Raybould,
      Ring, Ringo, Robison, Rydalch, Sali, Sayler, Schaefer, Shepherd,
      Shirley, Skippen, Smith(30), Smylie, Snodgrass, Stevenson, Wills,
      Wood, Mr. Speaker
      NAYS -- None
      Absent and excused -- Bauer, Clark, Eberle, Harwood, Ridinger,
      Roberts, Smith(24), Trail
    Floor Sponsor - Eskridge
    Title apvd - To enrol - Rpt enrol - Sp signed
03/20    Pres signed
03/22    To Governor
04/02    Governor VETOED

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-seventh Legislature                 Second Regular Session - 2004
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 760
                                                                        
                             BY REVENUE AND TAXATION COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO INCOME TAXATION; AMENDING SECTION 63-3029B, IDAHO CODE, TO PROVIDE
  3        THAT TAXPAYERS MAKING EXPENDITURES FOR QUALIFIED ALTERNATIVE ENERGY GENER-
  4        ATION EQUIPMENT ARE ENTITLED TO THE INCOME TAX CREDIT FOR CAPITAL  INVEST-
  5        MENT;  AMENDING CHAPTER 30, TITLE 63, IDAHO CODE, BY THE ADDITION OF A NEW
  6        SECTION 63-3029Q, IDAHO CODE, TO PROVIDE AN INCOME TAX CREDIT FOR  CERTAIN
  7        EXPENDITURES  RELATING  TO  INVESTMENT  IN  ALTERNATIVE  ENERGY GENERATION
  8        EQUIPMENT, TO PROVIDE A SUNSET DATE, TO PROVIDE DEFINITIONS, TO PROVIDE  A
  9        CARRYOVER  OF  UNUSED  CREDITS AND TO PROVIDE PROCEDURES; AMENDING SECTION
 10        63-3029J, IDAHO CODE, TO PROVIDE AN INCOME TAX CREDIT FOR CERTAIN EXPENDI-
 11        TURES FOR QUALIFIED ALTERNATIVE ENERGY  GENERATION  EQUIPMENT  IN  CERTAIN
 12        AREAS  OF IDAHO WITH HIGH UNEMPLOYMENT OR LOW PERSONAL INCOME AT THE ELEC-
 13        TION OF THE TAXPAYER FOR TAXABLE YEARS 2004  THROUGH  2009;  DECLARING  AN
 14        EMERGENCY AND PROVIDING RETROACTIVE APPLICATION.
                                                                        
 15    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 16        SECTION  1.  That Section 63-3029B, Idaho Code, be, and the same is hereby
 17    amended to read as follows:
                                                                        
 18        63-3029B.  INCOME TAX CREDIT FOR CAPITAL INVESTMENT. (1) At  the  election
 19    of  the taxpayer there shall be allowed, subject to the applicable limitations
 20    provided herein as a credit against the income  tax  imposed  by  chapter  30,
 21    title 63, Idaho Code, an amount equal to the sum of:
 22        (a)  The tax credit carryovers; and
 23        (b)  The tax credit for the taxable year.
 24        (2)  The  maximum  allowable  amount of the credit for the current taxable
 25    year shall be three percent (3%) of the amount of qualified  investments  made
 26    during the taxable year.
 27        (3)  As  used  in this section "qualified investment" means certain depre-
 28    ciable property which:
 29        (a)  (i)   Is eligible for the federal investment tax credit,  as  defined
 30             in  sections 46(c) and 48 of the Internal Revenue Code subject to the
 31             limitations provided for certain regulated companies in section 46(f)
 32             of the Internal Revenue Code and is not a motor vehicle  under  eight
 33             thousand (8,000) pounds gross weight; or
 34             (ii)  Is   qualified   broadband  equipment  as  defined  in  section
 35             63-3029I, Idaho Code; or
 36             (iii) Is qualified alternative energy generation equipment as defined
 37             in section 63-3029Q, Idaho Code; and
 38        (b)  Is acquired, constructed, reconstructed, erected or placed into  ser-
 39        vice after December 31, 1981; and
 40        (c)  Has a situs in Idaho.
 41        (4)  (a) For  qualified  investments  placed  in  service in taxable years
 42        beginning in 2003 and thereafter, the taxpayer may elect, in lieu  of  the
 43        credit  provided  by this section, a two (2) year exemption from all taxes
                                                                        
                                           2
                                                                        
  1        on personal property on the qualified investment. The exemption from  per-
  2        sonal  property  tax shall apply to the year the election is filed as pro-
  3        vided in this section and the immediately  following  year.  The  election
  4        provided  by  this  paragraph  is available only to a taxpayer whose Idaho
  5        taxable income in the  second preceding taxable year in which the  invest-
  6        ment is placed in service is negative.
  7        (b)  The  election  shall  be made in the form prescribed by the state tax
  8        commission and shall include a specific description and  location  of  all
  9        qualified  investments placed into service and located in the jurisdiction
 10        of the assessing authority, a designation of the specific assets for which
 11        the exemption is claimed, and such other information as the state tax com-
 12        mission may require. The election must be made by including  the  election
 13        form  with  the  listing  of personal property required by section 63-302,
 14        Idaho Code, or, in the case of operating property assessed  under  chapter
 15        4, title 63, Idaho Code, with the operator's statement required by section
 16        63-404,  Idaho  Code, for the calendar year immediately following the tax-
 17        able year in which the property was placed in service. Once made the elec-
 18        tion is irrevocable. If no election is made, the election is not otherwise
 19        available. A copy of the election form must also be attached to the origi-
 20        nal income tax return due for the taxable year  in  which  the  claim  was
 21        made.
 22        (c)  The  state tax commission and the various county assessors are autho-
 23        rized to exchange information as  necessary  to  properly  coordinate  the
 24        exemption provided in this subsection.
 25        (d)  In the event that an investment in regard to which the election under
 26        this  section was made is determined by the state tax commission to not be
 27        a qualified investment or ceases to qualify during the  recapture  period,
 28        the  taxpayer  shall  be  subject  to a penalty equal to the amount of the
 29        claimed investment times the average urban property tax levy of the  state
 30        as determined by the state tax commission times two (2).
 31        (5)  Notwithstanding  the  provisions  of  subsections (1) and (2) of this
 32    section, the amount of the credit allowed shall not exceed fifty percent (50%)
 33    of the tax liability of the taxpayer. The tax liability of the taxpayer  shall
 34    be the tax after deducting the credit allowed by section 63-3029, Idaho Code.
 35        (6)  If the sum of credit carryovers from the credit allowed by subsection
 36    (2)  of  this  section  and the amount of credit for the taxable year from the
 37    credit allowed by subsection (2) of this section exceed the limitation imposed
 38    by subsection (5) of this section for the current  taxable  year,  the  excess
 39    attributable  to  the  current  taxable  year's  credit shall be an investment
 40    credit carryover to the fourteen (14) succeeding taxable years. In the case of
 41    a group of corporations filing a combined report under section 63-3027,  Idaho
 42    Code,  or sections 63-3027B through 63-3027E, Idaho Code, credit earned by one
 43    (1) member of the group but not used by that member may  be  used  by  another
 44    member  of the group, subject to the provisions of subsection (5) of this sec-
 45    tion, instead of carried over. The entire amount of  unused  credit  shall  be
 46    carried  forward  to  the earliest of the succeeding years, wherein the oldest
 47    available unused credit shall be used first, so long as the qualified  invest-
 48    ment  property  for  which the unused credit was granted still maintains Idaho
 49    situs. For a combined group of corporations, credit  carried  forward  may  be
 50    claimed  by any member of the group unless the member who earned the credit is
 51    no longer included in the combined group.
 52        (7)  Any recapture of the credit allowed by subsection (2) of this section
 53    on property disposed of or ceasing to qualify,  prior  to  the  close  of  the
 54    recapture  period,  shall  be determined according to the applicable recapture
 55    provisions of the Internal Revenue Code. In the case of  a  unitary  group  of
                                                                        
                                           3
                                                                        
  1    corporations,  the  increase  in  tax  due  to the recapture of investment tax
  2    credit must be reported by the member of  the  group  who  earned  the  credit
  3    regardless of which member claimed the credit against tax.
  4        (8)  For  the purpose of determining whether property placed in service is
  5    a "qualified investment" as defined in subsection (3)  of  this  section,  the
  6    provisions of section 49 of the Internal Revenue Code shall be disregarded.
  7        (9)  For  purposes of this section, property has a situs in Idaho during a
  8    taxable year if it is used in Idaho at any time during the taxable year. Prop-
  9    erty not used in Idaho during a taxable year does not have a situs in Idaho in
 10    the taxable year during which the property is not used in Idaho or in any sub-
 11    sequent taxable year. No credit or carryover of credit is permitted under this
 12    section if the credit or carryover relates to property that does  not  have  a
 13    situs  in  Idaho  during the taxable year for which the credit or carryover is
 14    claimed. The Idaho situs of property must be established by records maintained
 15    by the taxpayer which are created reasonably contemporaneously with the use of
 16    the property.
 17        (10) In the case of property used both in and outside Idaho, the taxpayer,
 18    electing to claim the credit provided in this section, must elect  to  compute
 19    the  qualified  investment  in  property  with  a  situs in Idaho for all such
 20    investments first qualifying during that year in one (1), but only one (1), of
 21    the following ways:
 22        (a)  The amount of each qualified investment in a specific asset shall  be
 23        separately computed based on the percentage of the actual use of the prop-
 24        erty  in Idaho by using a measure of the use, such as total miles or total
 25        machine hours, that most accurately reflects the beneficial use during the
 26        taxable year in which it is first  acquired,  constructed,  reconstructed,
 27        erected or placed into service; provided, that the asset is placed in ser-
 28        vice more than ninety (90) days before the end of the taxable year. In the
 29        case  of  assets  acquired,  constructed, reconstructed, erected or placed
 30        into service within ninety (90) days prior to the end of the taxable  year
 31        in  which  the  investment first qualifies, the measure of the use of that
 32        asset within Idaho for that year shall be based upon the percentage of use
 33        in Idaho during the first ninety (90) days of use of the asset;
 34        (b)  The investment in qualified property used  both  inside  and  outside
 35        Idaho  during the taxable year in which it is first acquired, constructed,
 36        reconstructed, erected or placed into service shall be multiplied  by  the
 37        percent  of  the investment that would be included in the numerator of the
 38        Idaho property factor determined pursuant to section 63-3027, Idaho  Code,
 39        for the same year.
 40        (11) Only  for the purposes of subsections (3)(a) and (8) of this section,
 41    references to sections of  the  "Internal  Revenue  Code"  mean  the  sections
 42    referred  to  as  they  existed  in the Internal Revenue Code of 1986 prior to
 43    November 5, 1990.
                                                                        
 44        SECTION 2.  That Chapter 30, Title 63, Idaho Code, be,  and  the  same  is
 45    hereby  amended by the addition thereto of a NEW SECTION, to be known and des-
 46    ignated as Section 63-3029Q, Idaho Code, and to read as follows:
                                                                        
 47        63-3029Q.  INCOME TAX CREDIT FOR INVESTMENT IN ALTERNATIVE ENERGY  GENERA-
 48    TION  EQUIPMENT.  (1)  Subject to the limitations of this section, for taxable
 49    years beginning between January 1, 2004, and  December  31,  2009,  inclusive,
 50    there  shall  be  allowed  to  a taxpayer a nonrefundable credit against taxes
 51    imposed by sections 63-3024, 63-3025 and 63-3025A, Idaho Code,  for  qualified
 52    expenditures in qualified alternative energy generation equipment in Idaho.
 53        (2)  The credit permitted in subsection (1) of this section shall be three
                                                                        
                                           4
                                                                        
  1    percent  (3%) of the qualified investment in qualified alternative energy gen-
  2    eration equipment in Idaho and shall be in addition to the credit for  capital
  3    investment permitted by section 63-3029B, Idaho Code.
  4        (3)  As used in this section:
  5        (a)  "Qualified  investment"  shall  be defined in section 63-3029B, Idaho
  6        Code.
  7        (b)  "Qualified alternative energy generation equipment"  means  equipment
  8        that:
  9             (i)   Qualifies  for  the  credit for capital investment permitted by
 10             section 63-3029B, Idaho Code;
 11             (ii)  Is capable of producing electricity from biomass, waste, renew-
 12             able resources including, but not limited to, solar, wind, low-impact
 13             hydro and pumped storage, geothermal resources,  or  any  combination
 14             thereof;
 15             (iii) Does  not  receive  more  than twenty-five percent (25%) of its
 16             total annual energy input from oil, propane, natural gas or coal that
 17             may be used only for ignition, start-up, testing, flame stabilization
 18             or to prevent outages;
 19             (iv)  Connects such electricity producing equipment to the  transmis-
 20             sion  grid including, but not limited to, all facilities necessary to
 21             synchronize the qualifying alternative  energy  generation  equipment
 22             with the utility transmission grid and the transmission line from the
 23             qualifying  alternative  energy generation equipment with the nearest
 24             usable utility transmission lines.
 25        (c)  "Low-impact hydro" means an electric  generating  facility  utilizing
 26        water  for  the  generation of electricity, housed in a canal or reservoir
 27        and not having a power production capacity  of  greater  than  fifty  (50)
 28        megawatts.
 29        (4)  No  equipment  described  in  subsection (3)(b) of this section shall
 30    qualify for the credit provided in subsection (1) of this  section  until  the
 31    taxpayer applies for and obtains an order from the Idaho public utilities com-
 32    mission  confirming  that  the  installed  equipment  is qualified alternative
 33    energy generation equipment. Applications submitted to  the  public  utilities
 34    commission  shall  be  governed  by the public utilities commission's rules of
 35    procedure.  The public utilities commission may issue procedural orders neces-
 36    sary to implement the provisions of this section.
 37        (5)  The credit allowed by subsection (1) of this section,  together  with
 38    any  credits  carried forward under subsection (7) of this section, shall not,
 39    in any one (1) taxable year, exceed the lesser of:
 40        (a)  The amount of tax due under sections 63-3024, 63-3025  and  63-3025A,
 41        Idaho  Code, after allowance for all other credits permitted by this chap-
 42        ter; or
 43        (b)  Seven hundred fifty thousand dollars ($750,000). When credits  earned
 44        in  more than one (1) taxable year are available, the oldest credits shall
 45        be applied first.
 46        (6)  In the case of a group of corporations filing a combined report under
 47    subsection (t) of section 63-3027, Idaho Code, credit earned by one (1) member
 48    of the group but not used by that member may be used by another member of  the
 49    group, subject to the provisions of subsection (7) of this section, instead of
 50    carried over. For a combined group of corporations, credit carried forward may
 51    be  claimed by any member of the group unless the member who earned the credit
 52    is no longer included in the combined group.
 53        (7)  If the credit allowed by subsection (1) of this section  exceeds  the
 54    limitation under subsection (5) of this section, the excess amount may be car-
 55    ried  forward for a period that does not exceed the next fourteen (14) taxable
                                                                        
                                           5
                                                                        
  1    years.
  2        (8)  In the event that qualified alternative energy  generation  equipment
  3    upon  which the credit allowed by this section has been used ceases to qualify
  4    for the credit allowed by section 63-3029B,  Idaho  Code,  or  is  subject  to
  5    recapture  of that credit, the recapture of credit under this section shall be
  6    in the same proportion and subject to the same provisions  as  the  amount  of
  7    credit required to be recaptured under section 63-3029B, Idaho Code.
  8        (9)  In  addition to other needed rules, the state tax commission may pro-
  9    mulgate rules prescribing, in the case of S corporations, partnerships, trusts
 10    or estates, a method of attributing the  credit  under  this  section  to  the
 11    shareholders,  partners  or  beneficiaries in proportion to their share of the
 12    income from the S corporation, partnership, trust or estate.
                                                                        
 13        SECTION 3.  That Section 63-3029J, Idaho Code, be, and the same is  hereby
 14    amended to read as follows:
                                                                        
 15        63-3029J.  INCENTIVE INCOME TAX INVESTMENT CREDIT. (1) Subject to the lim-
 16    itations  of  this section, for taxable year 2001 only, there shall be allowed
 17    to a taxpayer  a  nonrefundable  credit  against  taxes  imposed  by  sections
 18    63-3024, 63-3025 and 63-3025A, Idaho Code, in the amount allowed by subsection
 19    (23)  of  this section for qualified investments in Idaho. The credit shall be
 20    in addition  to  the  credit  for  capital  investment  permitted  by  section
 21    63-3029B, Idaho Code.
 22        (2)  Subject  to  the  limitations of this section, for taxable years 2004
 23    through 2009, inclusive, there shall be allowed to a taxpayer a  nonrefundable
 24    credit  against taxes imposed by sections 63-3024, 63-3025 and 63-3025A, Idaho
 25    Code, in the amount allowed by subsection (3) of this  section  for  qualified
 26    alternative energy generation equipment investments in Idaho permitted by sub-
 27    section  (3)(a)(iii)  of  section 63-3029B, Idaho Code. The credit shall be in
 28    addition to the credit for capital investment permitted by  sections  63-3029B
 29    and  63-3029Q, Idaho Code.
 30        (3)  The  credit  permitted  in subsection (1) of this section shall be at
 31    the percentage rate determined under either subsection (23)(a) or  (23)(b)  of
 32    this section at the election of the taxpayer.
 33        (a)  (i)   One-half  (1/2)  of  the amount by which the average three-year
 34             unemployment rate in the county in  which  the  property  is  located
 35             exceeds  six percent (6%).  In the case of mobile property, the prop-
 36             erty shall be located in the county in which it is primarily based.
 37             (ii)  For purposes of this section the director of the department  of
 38             labor shall, on or before the first day of September of each calendar
 39             year,  establish  and certify to the state tax commission the average
 40             three-year unemployment rate in each county in Idaho for the  immedi-
 41             ately  preceding  three  (3) calendar years. The rates thus certified
 42             shall apply  to  the  calculation  of  the  credit  under  subsection
 43             (23)(a)(i)  of  this  section  for property qualifying in the taxable
 44             year beginning during the next calendar year.
 45        (b)  (i)   One-tenth of one percent (.1%) for each full percent  that  the
 46             three-year  average per capita personal income level in the county in
 47             which the property is located is below ninety percent  (90%)  of  the
 48             average statewide per capita personal income level.
 49             (ii)  For  purposes of this section the director of the department of
 50             commerce shall, on or before the first day of September of each  cal-
 51             endar  year,  establish  and  certify to the state tax commission the
 52             most current three-year average per capita personal income  level  in
 53             each  county  in  Idaho  and the statewide per capita personal income
                                                                        
                                           6
                                                                        
  1             level for the most current preceding three (3)  calendar  years.  The
  2             levels  thus  certified  shall apply to the calculation of the credit
  3             under subsection (23)(b)(i) of this section for  property  qualifying
  4             in the taxable year beginning during the next calendar year.
  5        (34)  As  used  in  this  section the term "qualified investment" shall be
  6    defined as in section 63-3029B, Idaho Code.
  7        (45)  The credit allowed by subsection (1) of this section  together  with
  8    any  credits  carried  forward under subsection (67) of this section shall not
  9    exceed in any one (1) taxable year the lesser of:
 10        (a)  The amount of tax due under sections 63-3024, 63-3025  and  63-3025A,
 11        Idaho  Code, after allowance for all other credits permitted by this chap-
 12        ter; or
 13        (b)  Five hundred thousand dollars ($500,000).
 14        (56)  In the case of a group of  corporations  filing  a  combined  report
 15    under  subsection (t) of section 63-3027, Idaho Code, credit earned by one (1)
 16    member of the group but not used by that member may be used by another  member
 17    of  the  group,  subject to the provisions of subsection (67) of this section,
 18    instead of carried over. For a combined group of corporations, credit  carried
 19    forward may be claimed by any member of the group unless the member who earned
 20    the credit is no longer included in the combined group.
 21        (67)  If  the credit allowed by subsection (1) of this section exceeds the
 22    limitation under subsection (45) of this section, the  excess  amount  may  be
 23    carried  forward for a period that does not exceed the next fourteen (14) tax-
 24    able years.
 25        (78)  In the event that property upon which the  credit  allowed  by  this
 26    section  has  been  used  ceases  to qualify for the credit allowed by section
 27    63-3029B, Idaho Code, the recapture of credit under this section shall  be  in
 28    the same proportion and subject to the same provisions as the amount of credit
 29    required to be recaptured under section 63-3029B, Idaho Code.
 30        (89)  (a) Subject  to  the requirements of this subsection, a taxpayer who
 31        earns and is entitled to the credit or to an unused portion of the  credit
 32        allowed by this section may transfer the unused credit to another taxpayer
 33        required to file a return under this chapter.
 34        (b)  Before  completing  a  transfer under this subsection, the transferor
 35        shall notify the state tax commission of its  intention  to  transfer  the
 36        credit  and the identity of the transferee. The state tax commission shall
 37        provide the transferor with a written statement of the  amount  of  credit
 38        available under this section as then appearing in the commission's records
 39        and  the  number  of  years the credit may be carried over. The transferor
 40        shall provide the transferee with the original statement.  The  transferee
 41        shall  attach a copy of the statement to any return in regard to which the
 42        transferred credit is claimed.
 43        (c)  In the event that after the transfer the state tax commission  deter-
 44        mines  that  the amount of credit properly available under this section is
 45        less than the amount claimed by the transferor of the credit and shown  in
 46        the  statement described in subsection (89)(b) of this section or that the
 47        credit is subject to recapture, the commission shall assess the amount  of
 48        overstated credit as taxes due from the transferor and not the transferee.
 49        The  assessment  shall  be made in the manner provided for a deficiency in
 50        taxes under this chapter.
 51        (910) In addition to other needed rules, the state tax commission may pro-
 52    mulgate rules prescribing:
 53        (a)  In the case of S corporations, partnerships,  trusts  or  estates,  a
 54        method  of  attributing the credit under this section to the shareholders,
 55        partners or beneficiaries in proportion to their share of the income  from
                                                                        
                                           7
                                                                        
  1        the S corporation, partnership, trust or estate.
  2        (b)  A  requirement  that  a transferor under subsection (89) of this sec-
  3        tion, prior to obtaining the  written  statement  provided  in  subsection
  4        (89)(b)  of this section, post such bond or security as the state tax com-
  5        mission may require to secure any  liability  referred  to  in  subsection
  6        (89)(c)  of  this  section.  Such rules shall provide an opportunity for a
  7        taxpayer, upon a showing of financial responsibility,  to  have  the  bond
  8        waiver, for notice of denial of waiver in accordance with section 63-3045,
  9        Idaho  Code,  and  for  review  in accordance with section 63-3045B, Idaho
 10        Code.
                                                                        
 11        SECTION 4.  An emergency existing  therefor,  which  emergency  is  hereby
 12    declared to exist, this act shall be in full force and effect on and after its
 13    passage and approval, and retroactively to January 1, 2004.

Amendment


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-seventh Legislature                 Second Regular Session - 2004
                                                                        
                                                                        
                                                     Moved by    Cuddy               
                                                                        
                                                     Seconded by Ridinger            
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                              HOUSE AMENDMENT TO H.B. NO. 760
                                                                        
  1                                AMENDMENT TO SECTION 2
  2        On page 5 of the printed bill, following line 7, insert:
  3        "(9)  (a) Subject to the requirements of this subsection, a  taxpayer  who
  4        earns  and is entitled to the credit or to an unused portion of the credit
  5        allowed by this section may transfer all or a portion of the unused credit
  6        to:
  7             (i)   Another taxpayer required to file a return under this chapter;
  8             or
  9             (ii)  To an intermediary for its use or  for  resale  to  a  taxpayer
 10             required to file a return under this chapter.
 11        In  the  event  of  either  such  a transfer, the transferee may claim the
 12        credit on the transferee's income tax return originally filed  during  the
 13        calendar  year in which the transfer takes place and, in the case of  car-
 14        ryover of the credit, on the transferee's returns for the number of  years
 15        of carryover available to the transferor  at  the  time  of  the  transfer
 16        unless earlier exhausted.
 17        (b)  Before  completing  a  transfer under this subsection, the transferor
 18        shall notify the state tax commission of its  intention  to  transfer  the
 19        credit  and the identity of the transferee. The state tax commission shall
 20        provide the transferor with a written statement of the  amount  of  credit
 21        available under this section as then appearing in the commission's records
 22        and  the  number  of  years the credit may be carried over. The transferee
 23        shall attach a copy of the statement to any return in regard to which  the
 24        transferred credit is claimed.
 25        (c)  In  the event that after the transfer the state tax commission deter-
 26        mines that the amount of credit properly available under this section   is
 27        less  than the amount claimed by the transferor of the credit or that  the
 28        credit is subject to recapture, the commission shall assess the amount  of
 29        overstated  or recaptured credit as taxes due from the transferor and  not
 30        the transferee. The assessment shall be made in the manner provided  for a
 31        deficiency in taxes under this chapter.";
 32    and in line 8, delete "(9)" and insert: "(10)".
                                                                        
 33                                 CORRECTION TO TITLE
 34        On page 1, delete line 9, and insert: "CARRYOVER  OF  UNUSED  CREDITS,  TO
 35    PROVIDE PROCEDURES AND TO PROVIDE TRANSFERABILITY; AMENDING SECTION".
                                                     Moved by    Hill                
                                                                        
                                                     Seconded by Stegner             
                                                                        
                                                                        
                                       IN THE SENATE
                        SENATE AMENDMENT TO H.B. NO. 760, As Amended
                                 ]]]
                                                                        
                                          2
                                                                        
  1                                AMENDMENT TO SECTION 2
  2        On  page  5  of the engrossed bill, delete lines 9 through 37; and in line
  3    38, delete "(10)" and insert: "(9)".
                                                                        
  4                                 CORRECTION TO TITLE
  5        On page 1, delete lines 9 and 10 and insert: "CARRYOVER OF UNUSED  CREDITS
  6    AND  TO  PROVIDE PROCEDURES; AMENDING SECTION 63-3029J, IDAHO CODE, TO PROVIDE
  7    AN INCOME".

Engrossed Bill (Original Bill with Amendment(s) Incorporated)


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-seventh Legislature                 Second Regular Session - 2004
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                  HOUSE BILL NO. 760, As Amended, As Amended in the Senate
                                                                        
                             BY REVENUE AND TAXATION COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO INCOME TAXATION; AMENDING SECTION 63-3029B, IDAHO CODE, TO PROVIDE
  3        THAT TAXPAYERS MAKING EXPENDITURES FOR QUALIFIED ALTERNATIVE ENERGY GENER-
  4        ATION EQUIPMENT ARE ENTITLED TO THE INCOME TAX CREDIT FOR CAPITAL  INVEST-
  5        MENT;  AMENDING CHAPTER 30, TITLE 63, IDAHO CODE, BY THE ADDITION OF A NEW
  6        SECTION 63-3029Q, IDAHO CODE, TO PROVIDE AN INCOME TAX CREDIT FOR  CERTAIN
  7        EXPENDITURES  RELATING  TO  INVESTMENT  IN  ALTERNATIVE  ENERGY GENERATION
  8        EQUIPMENT, TO PROVIDE A SUNSET DATE, TO PROVIDE DEFINITIONS, TO PROVIDE  A
  9        CARRYOVER  OF  UNUSED  CREDITS AND TO PROVIDE PROCEDURES; AMENDING SECTION
 10        63-3029J, IDAHO CODE, TO PROVIDE AN INCOME TAX CREDIT FOR CERTAIN EXPENDI-
 11        TURES FOR QUALIFIED ALTERNATIVE ENERGY  GENERATION  EQUIPMENT  IN  CERTAIN
 12        AREAS  OF IDAHO WITH HIGH UNEMPLOYMENT OR LOW PERSONAL INCOME AT THE ELEC-
 13        TION OF THE TAXPAYER FOR TAXABLE YEARS 2004  THROUGH  2009;  DECLARING  AN
 14        EMERGENCY AND PROVIDING RETROACTIVE APPLICATION.
                                                                        
 15    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 16        SECTION  1.  That Section 63-3029B, Idaho Code, be, and the same is hereby
 17    amended to read as follows:
                                                                        
 18        63-3029B.  INCOME TAX CREDIT FOR CAPITAL INVESTMENT. (1) At  the  election
 19    of  the taxpayer there shall be allowed, subject to the applicable limitations
 20    provided herein as a credit against the income  tax  imposed  by  chapter  30,
 21    title 63, Idaho Code, an amount equal to the sum of:
 22        (a)  The tax credit carryovers; and
 23        (b)  The tax credit for the taxable year.
 24        (2)  The  maximum  allowable  amount of the credit for the current taxable
 25    year shall be three percent (3%) of the amount of qualified  investments  made
 26    during the taxable year.
 27        (3)  As  used  in this section "qualified investment" means certain depre-
 28    ciable property which:
 29        (a)  (i)   Is eligible for the federal investment tax credit,  as  defined
 30             in  sections 46(c) and 48 of the Internal Revenue Code subject to the
 31             limitations provided for certain regulated companies in section 46(f)
 32             of the Internal Revenue Code and is not a motor vehicle  under  eight
 33             thousand (8,000) pounds gross weight; or
 34             (ii)  Is   qualified   broadband  equipment  as  defined  in  section
 35             63-3029I, Idaho Code; or
 36             (iii) Is qualified alternative energy generation equipment as defined
 37             in section 63-3029Q, Idaho Code; and
 38        (b)  Is acquired, constructed, reconstructed, erected or placed into  ser-
 39        vice after December 31, 1981; and
 40        (c)  Has a situs in Idaho.
 41        (4)  (a) For  qualified  investments  placed  in  service in taxable years
 42        beginning in 2003 and thereafter, the taxpayer may elect, in lieu  of  the
 43        credit  provided  by this section, a two (2) year exemption from all taxes
                                                                        
                                           2
                                                                        
  1        on personal property on the qualified investment. The exemption from  per-
  2        sonal  property  tax shall apply to the year the election is filed as pro-
  3        vided in this section and the immediately  following  year.  The  election
  4        provided  by  this  paragraph  is available only to a taxpayer whose Idaho
  5        taxable income in the  second preceding taxable year in which the  invest-
  6        ment is placed in service is negative.
  7        (b)  The  election  shall  be made in the form prescribed by the state tax
  8        commission and shall include a specific description and  location  of  all
  9        qualified  investments placed into service and located in the jurisdiction
 10        of the assessing authority, a designation of the specific assets for which
 11        the exemption is claimed, and such other information as the state tax com-
 12        mission may require. The election must be made by including  the  election
 13        form  with  the  listing  of personal property required by section 63-302,
 14        Idaho Code, or, in the case of operating property assessed  under  chapter
 15        4, title 63, Idaho Code, with the operator's statement required by section
 16        63-404,  Idaho  Code, for the calendar year immediately following the tax-
 17        able year in which the property was placed in service. Once made the elec-
 18        tion is irrevocable. If no election is made, the election is not otherwise
 19        available. A copy of the election form must also be attached to the origi-
 20        nal income tax return due for the taxable year  in  which  the  claim  was
 21        made.
 22        (c)  The  state tax commission and the various county assessors are autho-
 23        rized to exchange information as  necessary  to  properly  coordinate  the
 24        exemption provided in this subsection.
 25        (d)  In the event that an investment in regard to which the election under
 26        this  section was made is determined by the state tax commission to not be
 27        a qualified investment or ceases to qualify during the  recapture  period,
 28        the  taxpayer  shall  be  subject  to a penalty equal to the amount of the
 29        claimed investment times the average urban property tax levy of the  state
 30        as determined by the state tax commission times two (2).
 31        (5)  Notwithstanding  the  provisions  of  subsections (1) and (2) of this
 32    section, the amount of the credit allowed shall not exceed fifty percent (50%)
 33    of the tax liability of the taxpayer. The tax liability of the taxpayer  shall
 34    be the tax after deducting the credit allowed by section 63-3029, Idaho Code.
 35        (6)  If the sum of credit carryovers from the credit allowed by subsection
 36    (2)  of  this  section  and the amount of credit for the taxable year from the
 37    credit allowed by subsection (2) of this section exceed the limitation imposed
 38    by subsection (5) of this section for the current  taxable  year,  the  excess
 39    attributable  to  the  current  taxable  year's  credit shall be an investment
 40    credit carryover to the fourteen (14) succeeding taxable years. In the case of
 41    a group of corporations filing a combined report under section 63-3027,  Idaho
 42    Code,  or sections 63-3027B through 63-3027E, Idaho Code, credit earned by one
 43    (1) member of the group but not used by that member may  be  used  by  another
 44    member  of the group, subject to the provisions of subsection (5) of this sec-
 45    tion, instead of carried over. The entire amount of  unused  credit  shall  be
 46    carried  forward  to  the earliest of the succeeding years, wherein the oldest
 47    available unused credit shall be used first, so long as the qualified  invest-
 48    ment  property  for  which the unused credit was granted still maintains Idaho
 49    situs. For a combined group of corporations, credit  carried  forward  may  be
 50    claimed  by any member of the group unless the member who earned the credit is
 51    no longer included in the combined group.
 52        (7)  Any recapture of the credit allowed by subsection (2) of this section
 53    on property disposed of or ceasing to qualify,  prior  to  the  close  of  the
 54    recapture  period,  shall  be determined according to the applicable recapture
 55    provisions of the Internal Revenue Code. In the case of  a  unitary  group  of
                                                                        
                                           3
                                                                        
  1    corporations,  the  increase  in  tax  due  to the recapture of investment tax
  2    credit must be reported by the member of  the  group  who  earned  the  credit
  3    regardless of which member claimed the credit against tax.
  4        (8)  For  the purpose of determining whether property placed in service is
  5    a "qualified investment" as defined in subsection (3)  of  this  section,  the
  6    provisions of section 49 of the Internal Revenue Code shall be disregarded.
  7        (9)  For  purposes of this section, property has a situs in Idaho during a
  8    taxable year if it is used in Idaho at any time during the taxable year. Prop-
  9    erty not used in Idaho during a taxable year does not have a situs in Idaho in
 10    the taxable year during which the property is not used in Idaho or in any sub-
 11    sequent taxable year. No credit or carryover of credit is permitted under this
 12    section if the credit or carryover relates to property that does  not  have  a
 13    situs  in  Idaho  during the taxable year for which the credit or carryover is
 14    claimed. The Idaho situs of property must be established by records maintained
 15    by the taxpayer which are created reasonably contemporaneously with the use of
 16    the property.
 17        (10) In the case of property used both in and outside Idaho, the taxpayer,
 18    electing to claim the credit provided in this section, must elect  to  compute
 19    the  qualified  investment  in  property  with  a  situs in Idaho for all such
 20    investments first qualifying during that year in one (1), but only one (1), of
 21    the following ways:
 22        (a)  The amount of each qualified investment in a specific asset shall  be
 23        separately computed based on the percentage of the actual use of the prop-
 24        erty  in Idaho by using a measure of the use, such as total miles or total
 25        machine hours, that most accurately reflects the beneficial use during the
 26        taxable year in which it is first  acquired,  constructed,  reconstructed,
 27        erected or placed into service; provided, that the asset is placed in ser-
 28        vice more than ninety (90) days before the end of the taxable year. In the
 29        case  of  assets  acquired,  constructed, reconstructed, erected or placed
 30        into service within ninety (90) days prior to the end of the taxable  year
 31        in  which  the  investment first qualifies, the measure of the use of that
 32        asset within Idaho for that year shall be based upon the percentage of use
 33        in Idaho during the first ninety (90) days of use of the asset;
 34        (b)  The investment in qualified property used  both  inside  and  outside
 35        Idaho  during the taxable year in which it is first acquired, constructed,
 36        reconstructed, erected or placed into service shall be multiplied  by  the
 37        percent  of  the investment that would be included in the numerator of the
 38        Idaho property factor determined pursuant to section 63-3027, Idaho  Code,
 39        for the same year.
 40        (11) Only  for the purposes of subsections (3)(a) and (8) of this section,
 41    references to sections of  the  "Internal  Revenue  Code"  mean  the  sections
 42    referred  to  as  they  existed  in the Internal Revenue Code of 1986 prior to
 43    November 5, 1990.
                                                                        
 44        SECTION 2.  That Chapter 30, Title 63, Idaho Code, be,  and  the  same  is
 45    hereby  amended by the addition thereto of a NEW SECTION, to be known and des-
 46    ignated as Section 63-3029Q, Idaho Code, and to read as follows:
                                                                        
 47        63-3029Q.  INCOME TAX CREDIT FOR INVESTMENT IN ALTERNATIVE ENERGY  GENERA-
 48    TION  EQUIPMENT.  (1)  Subject to the limitations of this section, for taxable
 49    years beginning between January 1, 2004, and  December  31,  2009,  inclusive,
 50    there  shall  be  allowed  to  a taxpayer a nonrefundable credit against taxes
 51    imposed by sections 63-3024, 63-3025 and 63-3025A, Idaho Code,  for  qualified
 52    expenditures in qualified alternative energy generation equipment in Idaho.
 53        (2)  The credit permitted in subsection (1) of this section shall be three
                                                                        
                                           4
                                                                        
  1    percent  (3%) of the qualified investment in qualified alternative energy gen-
  2    eration equipment in Idaho and shall be in addition to the credit for  capital
  3    investment permitted by section 63-3029B, Idaho Code.
  4        (3)  As used in this section:
  5        (a)  "Qualified  investment"  shall  be defined in section 63-3029B, Idaho
  6        Code.
  7        (b)  "Qualified alternative energy generation equipment"  means  equipment
  8        that:
  9             (i)   Qualifies  for  the  credit for capital investment permitted by
 10             section 63-3029B, Idaho Code;
 11             (ii)  Is capable of producing electricity from biomass, waste, renew-
 12             able resources including, but not limited to, solar, wind, low-impact
 13             hydro and pumped storage, geothermal resources,  or  any  combination
 14             thereof;
 15             (iii) Does  not  receive  more  than twenty-five percent (25%) of its
 16             total annual energy input from oil, propane, natural gas or coal that
 17             may be used only for ignition, start-up, testing, flame stabilization
 18             or to prevent outages;
 19             (iv)  Connects such electricity producing equipment to the  transmis-
 20             sion  grid including, but not limited to, all facilities necessary to
 21             synchronize the qualifying alternative  energy  generation  equipment
 22             with the utility transmission grid and the transmission line from the
 23             qualifying  alternative  energy generation equipment with the nearest
 24             usable utility transmission lines.
 25        (c)  "Low-impact hydro" means an electric  generating  facility  utilizing
 26        water  for  the  generation of electricity, housed in a canal or reservoir
 27        and not having a power production capacity  of  greater  than  fifty  (50)
 28        megawatts.
 29        (4)  No  equipment  described  in  subsection (3)(b) of this section shall
 30    qualify for the credit provided in subsection (1) of this  section  until  the
 31    taxpayer applies for and obtains an order from the Idaho public utilities com-
 32    mission  confirming  that  the  installed  equipment  is qualified alternative
 33    energy generation equipment. Applications submitted to  the  public  utilities
 34    commission  shall  be  governed  by the public utilities commission's rules of
 35    procedure.  The public utilities commission may issue procedural orders neces-
 36    sary to implement the provisions of this section.
 37        (5)  The credit allowed by subsection (1) of this section,  together  with
 38    any  credits  carried forward under subsection (7) of this section, shall not,
 39    in any one (1) taxable year, exceed the lesser of:
 40        (a)  The amount of tax due under sections 63-3024, 63-3025  and  63-3025A,
 41        Idaho  Code, after allowance for all other credits permitted by this chap-
 42        ter; or
 43        (b)  Seven hundred fifty thousand dollars ($750,000). When credits  earned
 44        in  more than one (1) taxable year are available, the oldest credits shall
 45        be applied first.
 46        (6)  In the case of a group of corporations filing a combined report under
 47    subsection (t) of section 63-3027, Idaho Code, credit earned by one (1) member
 48    of the group but not used by that member may be used by another member of  the
 49    group, subject to the provisions of subsection (7) of this section, instead of
 50    carried over. For a combined group of corporations, credit carried forward may
 51    be  claimed by any member of the group unless the member who earned the credit
 52    is no longer included in the combined group.
 53        (7)  If the credit allowed by subsection (1) of this section  exceeds  the
 54    limitation under subsection (5) of this section, the excess amount may be car-
 55    ried  forward for a period that does not exceed the next fourteen (14) taxable
                                                                        
                                           5
                                                                        
  1    years.
  2        (8)  In the event that qualified alternative energy  generation  equipment
  3    upon  which the credit allowed by this section has been used ceases to qualify
  4    for the credit allowed by section 63-3029B,  Idaho  Code,  or  is  subject  to
  5    recapture  of that credit, the recapture of credit under this section shall be
  6    in the same proportion and subject to the same provisions  as  the  amount  of
  7    credit required to be recaptured under section 63-3029B, Idaho Code.
  8        (9)  In  addition to other needed rules, the state tax commission may pro-
  9    mulgate rules prescribing, in the case of S corporations, partnerships, trusts
 10    or estates, a method of attributing the  credit  under  this  section  to  the
 11    shareholders,  partners  or  beneficiaries in proportion to their share of the
 12    income from the S corporation, partnership, trust or estate.
                                                                        
 13        SECTION 3.  That Section 63-3029J, Idaho Code, be, and the same is  hereby
 14    amended to read as follows:
                                                                        
 15        63-3029J.  INCENTIVE INCOME TAX INVESTMENT CREDIT. (1) Subject to the lim-
 16    itations  of  this section, for taxable year 2001 only, there shall be allowed
 17    to a taxpayer  a  nonrefundable  credit  against  taxes  imposed  by  sections
 18    63-3024, 63-3025 and 63-3025A, Idaho Code, in the amount allowed by subsection
 19    (23)  of  this section for qualified investments in Idaho. The credit shall be
 20    in addition  to  the  credit  for  capital  investment  permitted  by  section
 21    63-3029B, Idaho Code.
 22        (2)  Subject  to  the  limitations of this section, for taxable years 2004
 23    through 2009, inclusive, there shall be allowed to a taxpayer a  nonrefundable
 24    credit  against taxes imposed by sections 63-3024, 63-3025 and 63-3025A, Idaho
 25    Code, in the amount allowed by subsection (3) of this  section  for  qualified
 26    alternative energy generation equipment investments in Idaho permitted by sub-
 27    section  (3)(a)(iii)  of  section 63-3029B, Idaho Code. The credit shall be in
 28    addition to the credit for capital investment permitted by  sections  63-3029B
 29    and  63-3029Q, Idaho Code.
 30        (3)  The  credit  permitted  in subsection (1) of this section shall be at
 31    the percentage rate determined under either subsection (23)(a) or  (23)(b)  of
 32    this section at the election of the taxpayer.
 33        (a)  (i)   One-half  (1/2)  of  the amount by which the average three-year
 34             unemployment rate in the county in  which  the  property  is  located
 35             exceeds  six percent (6%).  In the case of mobile property, the prop-
 36             erty shall be located in the county in which it is primarily based.
 37             (ii)  For purposes of this section the director of the department  of
 38             labor shall, on or before the first day of September of each calendar
 39             year,  establish  and certify to the state tax commission the average
 40             three-year unemployment rate in each county in Idaho for the  immedi-
 41             ately  preceding  three  (3) calendar years. The rates thus certified
 42             shall apply  to  the  calculation  of  the  credit  under  subsection
 43             (23)(a)(i)  of  this  section  for property qualifying in the taxable
 44             year beginning during the next calendar year.
 45        (b)  (i)   One-tenth of one percent (.1%) for each full percent  that  the
 46             three-year  average per capita personal income level in the county in
 47             which the property is located is below ninety percent  (90%)  of  the
 48             average statewide per capita personal income level.
 49             (ii)  For  purposes of this section the director of the department of
 50             commerce shall, on or before the first day of September of each  cal-
 51             endar  year,  establish  and  certify to the state tax commission the
 52             most current three-year average per capita personal income  level  in
 53             each  county  in  Idaho  and the statewide per capita personal income
                                                                        
                                           6
                                                                        
  1             level for the most current preceding three (3)  calendar  years.  The
  2             levels  thus  certified  shall apply to the calculation of the credit
  3             under subsection (23)(b)(i) of this section for  property  qualifying
  4             in the taxable year beginning during the next calendar year.
  5        (34)  As  used  in  this  section the term "qualified investment" shall be
  6    defined as in section 63-3029B, Idaho Code.
  7        (45)  The credit allowed by subsection (1) of this section  together  with
  8    any  credits  carried  forward under subsection (67) of this section shall not
  9    exceed in any one (1) taxable year the lesser of:
 10        (a)  The amount of tax due under sections 63-3024, 63-3025  and  63-3025A,
 11        Idaho  Code, after allowance for all other credits permitted by this chap-
 12        ter; or
 13        (b)  Five hundred thousand dollars ($500,000).
 14        (56)  In the case of a group of  corporations  filing  a  combined  report
 15    under  subsection (t) of section 63-3027, Idaho Code, credit earned by one (1)
 16    member of the group but not used by that member may be used by another  member
 17    of  the  group,  subject to the provisions of subsection (67) of this section,
 18    instead of carried over. For a combined group of corporations, credit  carried
 19    forward may be claimed by any member of the group unless the member who earned
 20    the credit is no longer included in the combined group.
 21        (67)  If  the credit allowed by subsection (1) of this section exceeds the
 22    limitation under subsection (45) of this section, the  excess  amount  may  be
 23    carried  forward for a period that does not exceed the next fourteen (14) tax-
 24    able years.
 25        (78)  In the event that property upon which the  credit  allowed  by  this
 26    section  has  been  used  ceases  to qualify for the credit allowed by section
 27    63-3029B, Idaho Code, the recapture of credit under this section shall  be  in
 28    the same proportion and subject to the same provisions as the amount of credit
 29    required to be recaptured under section 63-3029B, Idaho Code.
 30        (89)  (a) Subject  to  the requirements of this subsection, a taxpayer who
 31        earns and is entitled to the credit or to an unused portion of the  credit
 32        allowed by this section may transfer the unused credit to another taxpayer
 33        required to file a return under this chapter.
 34        (b)  Before  completing  a  transfer under this subsection, the transferor
 35        shall notify the state tax commission of its  intention  to  transfer  the
 36        credit  and the identity of the transferee. The state tax commission shall
 37        provide the transferor with a written statement of the  amount  of  credit
 38        available under this section as then appearing in the commission's records
 39        and  the  number  of  years the credit may be carried over. The transferor
 40        shall provide the transferee with the original statement.  The  transferee
 41        shall  attach a copy of the statement to any return in regard to which the
 42        transferred credit is claimed.
 43        (c)  In the event that after the transfer the state tax commission  deter-
 44        mines  that  the amount of credit properly available under this section is
 45        less than the amount claimed by the transferor of the credit and shown  in
 46        the  statement described in subsection (89)(b) of this section or that the
 47        credit is subject to recapture, the commission shall assess the amount  of
 48        overstated credit as taxes due from the transferor and not the transferee.
 49        The  assessment  shall  be made in the manner provided for a deficiency in
 50        taxes under this chapter.
 51        (910) In addition to other needed rules, the state tax commission may pro-
 52    mulgate rules prescribing:
 53        (a)  In the case of S corporations, partnerships,  trusts  or  estates,  a
 54        method  of  attributing the credit under this section to the shareholders,
 55        partners or beneficiaries in proportion to their share of the income  from
                                                                        
                                           7
                                                                        
  1        the S corporation, partnership, trust or estate.
  2        (b)  A  requirement  that  a transferor under subsection (89) of this sec-
  3        tion, prior to obtaining the  written  statement  provided  in  subsection
  4        (89)(b)  of this section, post such bond or security as the state tax com-
  5        mission may require to secure any  liability  referred  to  in  subsection
  6        (89)(c)  of  this  section.  Such rules shall provide an opportunity for a
  7        taxpayer, upon a showing of financial responsibility,  to  have  the  bond
  8        waiver, for notice of denial of waiver in accordance with section 63-3045,
  9        Idaho  Code,  and  for  review  in accordance with section 63-3045B, Idaho
 10        Code.
                                                                        
 11        SECTION 4.  An emergency existing  therefor,  which  emergency  is  hereby
 12    declared to exist, this act shall be in full force and effect on and after its
 13    passage and approval, and retroactively to January 1, 2004.
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                               HOUSE BILL NO. 760, As Amended
                                                                        
                             BY REVENUE AND TAXATION COMMITTEE
                                                                        
 14                                        AN ACT
 15    RELATING TO INCOME TAXATION; AMENDING SECTION 63-3029B, IDAHO CODE, TO PROVIDE
 16        THAT TAXPAYERS MAKING EXPENDITURES FOR QUALIFIED ALTERNATIVE ENERGY GENER-
 17        ATION  EQUIPMENT ARE ENTITLED TO THE INCOME TAX CREDIT FOR CAPITAL INVEST-
 18        MENT; AMENDING CHAPTER 30, TITLE 63, IDAHO CODE, BY THE ADDITION OF A  NEW
 19        SECTION  63-3029Q, IDAHO CODE, TO PROVIDE AN INCOME TAX CREDIT FOR CERTAIN
 20        EXPENDITURES RELATING  TO  INVESTMENT  IN  ALTERNATIVE  ENERGY  GENERATION
 21        EQUIPMENT,  TO PROVIDE A SUNSET DATE, TO PROVIDE DEFINITIONS, TO PROVIDE A
 22        CARRYOVER OF UNUSED CREDITS, TO PROVIDE PROCEDURES AND TO  PROVIDE  TRANS-
 23        FERABILITY;  AMENDING  SECTION  63-3029J, IDAHO CODE, TO PROVIDE AN INCOME
 24        TAX CREDIT FOR CERTAIN EXPENDITURES FOR QUALIFIED ALTERNATIVE ENERGY  GEN-
 25        ERATION  EQUIPMENT IN CERTAIN AREAS OF IDAHO WITH HIGH UNEMPLOYMENT OR LOW
 26        PERSONAL INCOME AT THE ELECTION OF THE TAXPAYER  FOR  TAXABLE  YEARS  2004
 27        THROUGH  2009;  DECLARING  AN EMERGENCY AND PROVIDING RETROACTIVE APPLICA-
 28        TION.
                                                                        
 29    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 30        SECTION 5.  That Section 63-3029B, Idaho Code, be, and the same is  hereby
 31    amended to read as follows:
                                                                        
 32        63-3029B.  INCOME  TAX  CREDIT FOR CAPITAL INVESTMENT. (1) At the election
 33    of the taxpayer there shall be allowed, subject to the applicable  limitations
 34    provided  herein  as  a  credit  against the income tax imposed by chapter 30,
 35    title 63, Idaho Code, an amount equal to the sum of:
 36        (a)  The tax credit carryovers; and
 37        (b)  The tax credit for the taxable year.
 38        (2)  The maximum allowable amount of the credit for  the  current  taxable
 39    year  shall  be three percent (3%) of the amount of qualified investments made
 40    during the taxable year.
 41        (3)  As used in this section "qualified investment" means  certain  depre-
 42    ciable property which:
 43        (a)  (i)   Is  eligible  for the federal investment tax credit, as defined
 44             in sections 46(c) and 48 of the Internal Revenue Code subject to  the
 45             limitations provided for certain regulated companies in section 46(f)
                                                                        
                                           8
                                                                        
  1             of  the  Internal Revenue Code and is not a motor vehicle under eight
  2             thousand (8,000) pounds gross weight; or
  3             (ii)  Is  qualified  broadband  equipment  as  defined   in   section
  4             63-3029I, Idaho Code; or
  5             (iii) Is qualified alternative energy generation equipment as defined
  6             in section 63-3029Q, Idaho Code; and
  7        (b)  Is  acquired, constructed, reconstructed, erected or placed into ser-
  8        vice after December 31, 1981; and
  9        (c)  Has a situs in Idaho.
 10        (4)  (a) For qualified investments placed  in  service  in  taxable  years
 11        beginning  in  2003 and thereafter, the taxpayer may elect, in lieu of the
 12        credit provided by this section, a two (2) year exemption from  all  taxes
 13        on  personal property on the qualified investment. The exemption from per-
 14        sonal property tax shall apply to the year the election is filed  as  pro-
 15        vided  in  this  section  and the immediately following year. The election
 16        provided by this paragraph is available only to  a  taxpayer  whose  Idaho
 17        taxable  income in the  second preceding taxable year in which the invest-
 18        ment is placed in service is negative.
 19        (b)  The election shall be made in the form prescribed by  the  state  tax
 20        commission  and  shall  include a specific description and location of all
 21        qualified investments placed into service and located in the  jurisdiction
 22        of the assessing authority, a designation of the specific assets for which
 23        the exemption is claimed, and such other information as the state tax com-
 24        mission  may  require. The election must be made by including the election
 25        form with the listing of personal property  required  by  section  63-302,
 26        Idaho  Code,  or, in the case of operating property assessed under chapter
 27        4, title 63, Idaho Code, with the operator's statement required by section
 28        63-404, Idaho Code, for the calendar year immediately following  the  tax-
 29        able year in which the property was placed in service. Once made the elec-
 30        tion is irrevocable. If no election is made, the election is not otherwise
 31        available. A copy of the election form must also be attached to the origi-
 32        nal  income  tax  return  due  for the taxable year in which the claim was
 33        made.
 34        (c)  The state tax commission and the various county assessors are  autho-
 35        rized  to  exchange  information  as  necessary to properly coordinate the
 36        exemption provided in this subsection.
 37        (d)  In the event that an investment in regard to which the election under
 38        this section was made is determined by the state tax commission to not  be
 39        a  qualified  investment or ceases to qualify during the recapture period,
 40        the taxpayer shall be subject to a penalty equal  to  the  amount  of  the
 41        claimed  investment times the average urban property tax levy of the state
 42        as determined by the state tax commission times two (2).
 43        (5)  Notwithstanding the provisions of subsections (1)  and  (2)  of  this
 44    section, the amount of the credit allowed shall not exceed fifty percent (50%)
 45    of  the tax liability of the taxpayer. The tax liability of the taxpayer shall
 46    be the tax after deducting the credit allowed by section 63-3029, Idaho Code.
 47        (6)  If the sum of credit carryovers from the credit allowed by subsection
 48    (2) of this section and the amount of credit for the  taxable  year  from  the
 49    credit allowed by subsection (2) of this section exceed the limitation imposed
 50    by  subsection  (5)  of  this section for the current taxable year, the excess
 51    attributable to the current taxable  year's  credit  shall  be  an  investment
 52    credit carryover to the fourteen (14) succeeding taxable years. In the case of
 53    a  group of corporations filing a combined report under section 63-3027, Idaho
 54    Code, or sections 63-3027B through 63-3027E, Idaho Code, credit earned by  one
 55    (1)  member  of  the  group but not used by that member may be used by another
                                                                        
                                           9
                                                                        
  1    member of the group, subject to the provisions of subsection (5) of this  sec-
  2    tion,  instead  of  carried  over. The entire amount of unused credit shall be
  3    carried forward to the earliest of the succeeding years,  wherein  the  oldest
  4    available  unused credit shall be used first, so long as the qualified invest-
  5    ment property for which the unused credit was granted  still  maintains  Idaho
  6    situs.  For  a  combined  group of corporations, credit carried forward may be
  7    claimed by any member of the group unless the member who earned the credit  is
  8    no longer included in the combined group.
  9        (7)  Any recapture of the credit allowed by subsection (2) of this section
 10    on  property  disposed  of  or  ceasing  to qualify, prior to the close of the
 11    recapture period, shall be determined according to  the  applicable  recapture
 12    provisions  of  the  Internal  Revenue Code. In the case of a unitary group of
 13    corporations, the increase in tax due  to  the  recapture  of  investment  tax
 14    credit  must  be  reported  by  the  member of the group who earned the credit
 15    regardless of which member claimed the credit against tax.
 16        (8)  For the purpose of determining whether property placed in service  is
 17    a  "qualified  investment"  as  defined in subsection (3) of this section, the
 18    provisions of section 49 of the Internal Revenue Code shall be disregarded.
 19        (9)  For purposes of this section, property has a situs in Idaho during  a
 20    taxable year if it is used in Idaho at any time during the taxable year. Prop-
 21    erty not used in Idaho during a taxable year does not have a situs in Idaho in
 22    the taxable year during which the property is not used in Idaho or in any sub-
 23    sequent taxable year. No credit or carryover of credit is permitted under this
 24    section  if  the  credit or carryover relates to property that does not have a
 25    situs in Idaho during the taxable year for which the credit  or  carryover  is
 26    claimed. The Idaho situs of property must be established by records maintained
 27    by the taxpayer which are created reasonably contemporaneously with the use of
 28    the property.
 29        (10) In the case of property used both in and outside Idaho, the taxpayer,
 30    electing  to  claim the credit provided in this section, must elect to compute
 31    the qualified investment in property with  a  situs  in  Idaho  for  all  such
 32    investments first qualifying during that year in one (1), but only one (1), of
 33    the following ways:
 34        (a)  The  amount of each qualified investment in a specific asset shall be
 35        separately computed based on the percentage of the actual use of the prop-
 36        erty in Idaho by using a measure of the use, such as total miles or  total
 37        machine hours, that most accurately reflects the beneficial use during the
 38        taxable  year  in  which it is first acquired, constructed, reconstructed,
 39        erected or placed into service; provided, that the asset is placed in ser-
 40        vice more than ninety (90) days before the end of the taxable year. In the
 41        case of assets acquired, constructed,  reconstructed,  erected  or  placed
 42        into  service within ninety (90) days prior to the end of the taxable year
 43        in which the investment first qualifies, the measure of the  use  of  that
 44        asset within Idaho for that year shall be based upon the percentage of use
 45        in Idaho during the first ninety (90) days of use of the asset;
 46        (b)  The  investment  in  qualified  property used both inside and outside
 47        Idaho during the taxable year in which it is first acquired,  constructed,
 48        reconstructed,  erected  or placed into service shall be multiplied by the
 49        percent of the investment that would be included in the numerator  of  the
 50        Idaho  property factor determined pursuant to section 63-3027, Idaho Code,
 51        for the same year.
 52        (11) Only for the purposes of subsections (3)(a) and (8) of this  section,
 53    references  to  sections  of  the  "Internal  Revenue  Code" mean the sections
 54    referred to as they existed in the Internal Revenue  Code  of  1986  prior  to
 55    November 5, 1990.
                                                                        
                                           10
                                                                        
  1        SECTION  6.  That  Chapter  30,  Title 63, Idaho Code, be, and the same is
  2    hereby amended by the addition thereto of a NEW SECTION, to be known and  des-
  3    ignated as Section 63-3029Q, Idaho Code, and to read as follows:
                                                                        
  4        63-3029Q.  INCOME  TAX CREDIT FOR INVESTMENT IN ALTERNATIVE ENERGY GENERA-
  5    TION EQUIPMENT. (1) Subject to the limitations of this  section,  for  taxable
  6    years  beginning  between  January  1, 2004, and December 31, 2009, inclusive,
  7    there shall be allowed to a taxpayer  a  nonrefundable  credit  against  taxes
  8    imposed  by  sections 63-3024, 63-3025 and 63-3025A, Idaho Code, for qualified
  9    expenditures in qualified alternative energy generation equipment in Idaho.
 10        (2)  The credit permitted in subsection (1) of this section shall be three
 11    percent (3%) of the qualified investment in qualified alternative energy  gen-
 12    eration  equipment in Idaho and shall be in addition to the credit for capital
 13    investment permitted by section 63-3029B, Idaho Code.
 14        (3)  As used in this section:
 15        (a)  "Qualified investment" shall be defined in  section  63-3029B,  Idaho
 16        Code.
 17        (b)  "Qualified  alternative  energy generation equipment" means equipment
 18        that:
 19             (i)   Qualifies for the credit for capital  investment  permitted  by
 20             section 63-3029B, Idaho Code;
 21             (ii)  Is capable of producing electricity from biomass, waste, renew-
 22             able resources including, but not limited to, solar, wind, low-impact
 23             hydro  and  pumped  storage, geothermal resources, or any combination
 24             thereof;
 25             (iii) Does not receive more than twenty-five  percent  (25%)  of  its
 26             total annual energy input from oil, propane, natural gas or coal that
 27             may be used only for ignition, start-up, testing, flame stabilization
 28             or to prevent outages;
 29             (iv)  Connects  such electricity producing equipment to the transmis-
 30             sion grid including, but not limited to, all facilities necessary  to
 31             synchronize  the  qualifying  alternative energy generation equipment
 32             with the utility transmission grid and the transmission line from the
 33             qualifying alternative energy generation equipment with  the  nearest
 34             usable utility transmission lines.
 35        (c)  "Low-impact  hydro"  means  an electric generating facility utilizing
 36        water for the generation of electricity, housed in a  canal  or  reservoir
 37        and  not  having  a  power  production capacity of greater than fifty (50)
 38        megawatts.
 39        (4)  No equipment described in subsection (3)(b)  of  this  section  shall
 40    qualify  for  the  credit provided in subsection (1) of this section until the
 41    taxpayer applies for and obtains an order from the Idaho public utilities com-
 42    mission confirming that  the  installed  equipment  is  qualified  alternative
 43    energy  generation  equipment.  Applications submitted to the public utilities
 44    commission shall be governed by the public  utilities  commission's  rules  of
 45    procedure.  The public utilities commission may issue procedural orders neces-
 46    sary to implement the provisions of this section.
 47        (5)  The  credit  allowed by subsection (1) of this section, together with
 48    any credits carried forward under subsection (7) of this section,  shall  not,
 49    in any one (1) taxable year, exceed the lesser of:
 50        (a)  The  amount  of tax due under sections 63-3024, 63-3025 and 63-3025A,
 51        Idaho Code, after allowance for all other credits permitted by this  chap-
 52        ter; or
 53        (b)  Seven  hundred fifty thousand dollars ($750,000). When credits earned
 54        in more than one (1) taxable year are available, the oldest credits  shall
                                                                        
                                           11
                                                                        
  1        be applied first.
  2        (6)  In the case of a group of corporations filing a combined report under
  3    subsection (t) of section 63-3027, Idaho Code, credit earned by one (1) member
  4    of  the group but not used by that member may be used by another member of the
  5    group, subject to the provisions of subsection (7) of this section, instead of
  6    carried over. For a combined group of corporations, credit carried forward may
  7    be claimed by any member of the group unless the member who earned the  credit
  8    is no longer included in the combined group.
  9        (7)  If  the  credit allowed by subsection (1) of this section exceeds the
 10    limitation under subsection (5) of this section, the excess amount may be car-
 11    ried forward for a period that does not exceed the next fourteen (14)  taxable
 12    years.
 13        (8)  In  the  event that qualified alternative energy generation equipment
 14    upon which the credit allowed by this section has been used ceases to  qualify
 15    for  the  credit  allowed  by  section  63-3029B, Idaho Code, or is subject to
 16    recapture of that credit, the recapture of credit under this section shall  be
 17    in  the  same  proportion  and subject to the same provisions as the amount of
 18    credit required to be recaptured under section 63-3029B, Idaho Code.
 19        (9)  (a) Subject to the requirements of this subsection,  a  taxpayer  who
 20        earns  and is entitled to the credit or to an unused portion of the credit
 21        allowed by this section may transfer all or a portion of the unused credit
 22        to:
 23             (i)   Another taxpayer required to file a return under this chapter;
 24             or
 25             (ii)  To an intermediary for its use or  for  resale  to  a  taxpayer
 26             required to file a return under this chapter.
 27        In  the  event  of  either  such  a transfer, the transferee may claim the
 28        credit on the transferee's income tax return originally filed  during  the
 29        calendar  year in which the transfer takes place and, in the case of  car-
 30        ryover of the credit, on the transferee's returns for the number of  years
 31        of carryover available to the transferor  at  the  time  of  the  transfer
 32        unless earlier exhausted.
 33        (b)  Before  completing  a  transfer under this subsection, the transferor
 34        shall notify the state tax commission of its  intention  to  transfer  the
 35        credit  and the identity of the transferee. The state tax commission shall
 36        provide the transferor with a written statement of the  amount  of  credit
 37        available under this section as then appearing in the commission's records
 38        and  the  number  of  years the credit may be carried over. The transferee
 39        shall attach a copy of the statement to any return in regard to which  the
 40        transferred credit is claimed.
 41        (c)  In  the event that after the transfer the state tax commission deter-
 42        mines that the amount of credit properly available under this section   is
 43        less  than the amount claimed by the transferor of the credit or that  the
 44        credit is subject to recapture, the commission shall assess the amount  of
 45        overstated  or recaptured credit as taxes due from the transferor and  not
 46        the transferee. The assessment shall be made in the manner provided  for a
 47        deficiency in taxes under this chapter.
 48        (10) In addition to other needed rules, the state tax commission may  pro-
 49    mulgate rules prescribing, in the case of S corporations, partnerships, trusts
 50    or  estates,  a  method  of  attributing  the credit under this section to the
 51    shareholders, partners or beneficiaries in proportion to their  share  of  the
 52    income from the S corporation, partnership, trust or estate.
                                                                        
 53        SECTION  7.  That Section 63-3029J, Idaho Code, be, and the same is hereby
 54    amended to read as follows:
                                                                        
                                           12
                                                                        
  1        63-3029J.  INCENTIVE INCOME TAX INVESTMENT CREDIT. (1) Subject to the lim-
  2    itations of this section, for taxable year 2001 only, there shall  be  allowed
  3    to  a  taxpayer  a  nonrefundable  credit  against  taxes  imposed by sections
  4    63-3024, 63-3025 and 63-3025A, Idaho Code, in the amount allowed by subsection
  5    (23) of this section for qualified investments in Idaho. The credit  shall  be
  6    in  addition  to  the  credit  for  capital  investment  permitted  by section
  7    63-3029B, Idaho Code.
  8        (2)  Subject to the limitations of this section, for  taxable  years  2004
  9    through  2009, inclusive, there shall be allowed to a taxpayer a nonrefundable
 10    credit against taxes imposed by sections 63-3024, 63-3025 and 63-3025A,  Idaho
 11    Code,  in  the  amount allowed by subsection (3) of this section for qualified
 12    alternative energy generation equipment investments in Idaho permitted by sub-
 13    section (3)(a)(iii) of  section 63-3029B, Idaho Code. The credit shall  be  in
 14    addition  to  the credit for capital investment permitted by sections 63-3029B
 15    and  63-3029Q, Idaho Code.
 16        (3)  The credit permitted in subsection (1) of this section  shall  be  at
 17    the  percentage  rate determined under either subsection (23)(a) or (23)(b) of
 18    this section at the election of the taxpayer.
 19        (a)  (i)   One-half (1/2) of the amount by which  the  average  three-year
 20             unemployment  rate  in  the  county  in which the property is located
 21             exceeds six percent (6%).  In the case of mobile property, the  prop-
 22             erty shall be located in the county in which it is primarily based.
 23             (ii)  For  purposes of this section the director of the department of
 24             labor shall, on or before the first day of September of each calendar
 25             year, establish and certify to the state tax commission  the  average
 26             three-year  unemployment rate in each county in Idaho for the immedi-
 27             ately preceding three (3) calendar years. The  rates  thus  certified
 28             shall  apply  to  the  calculation  of  the  credit  under subsection
 29             (23)(a)(i) of this section for property  qualifying  in  the  taxable
 30             year beginning during the next calendar year.
 31        (b)  (i)   One-tenth  of  one percent (.1%) for each full percent that the
 32             three-year average per capita personal income level in the county  in
 33             which  the  property  is located is below ninety percent (90%) of the
 34             average statewide per capita personal income level.
 35             (ii)  For purposes of this section the director of the department  of
 36             commerce  shall, on or before the first day of September of each cal-
 37             endar year, establish and certify to the  state  tax  commission  the
 38             most  current  three-year average per capita personal income level in
 39             each county in Idaho and the statewide  per  capita  personal  income
 40             level  for  the  most current preceding three (3) calendar years. The
 41             levels thus certified shall apply to the calculation  of  the  credit
 42             under  subsection  (23)(b)(i) of this section for property qualifying
 43             in the taxable year beginning during the next calendar year.
 44        (34)  As used in this section the term  "qualified  investment"  shall  be
 45    defined as in section 63-3029B, Idaho Code.
 46        (45)  The  credit  allowed by subsection (1) of this section together with
 47    any credits carried forward under subsection (67) of this  section  shall  not
 48    exceed in any one (1) taxable year the lesser of:
 49        (a)  The  amount  of tax due under sections 63-3024, 63-3025 and 63-3025A,
 50        Idaho Code, after allowance for all other credits permitted by this  chap-
 51        ter; or
 52        (b)  Five hundred thousand dollars ($500,000).
 53        (56)  In  the  case  of  a  group of corporations filing a combined report
 54    under subsection (t) of section 63-3027, Idaho Code, credit earned by one  (1)
 55    member  of the group but not used by that member may be used by another member
                                                                        
                                           13
                                                                        
  1    of the group, subject to the provisions of subsection (67)  of  this  section,
  2    instead  of carried over. For a combined group of corporations, credit carried
  3    forward may be claimed by any member of the group unless the member who earned
  4    the credit is no longer included in the combined group.
  5        (67)  If the credit allowed by subsection (1) of this section exceeds  the
  6    limitation  under  subsection  (45)  of this section, the excess amount may be
  7    carried forward for a period that does not exceed the next fourteen (14)  tax-
  8    able years.
  9        (78)  In  the  event  that  property upon which the credit allowed by this
 10    section has been used ceases to qualify for  the  credit  allowed  by  section
 11    63-3029B,  Idaho  Code, the recapture of credit under this section shall be in
 12    the same proportion and subject to the same provisions as the amount of credit
 13    required to be recaptured under section 63-3029B, Idaho Code.
 14        (89)  (a) Subject to the requirements of this subsection, a  taxpayer  who
 15        earns  and is entitled to the credit or to an unused portion of the credit
 16        allowed by this section may transfer the unused credit to another taxpayer
 17        required to file a return under this chapter.
 18        (b)  Before completing a transfer under this  subsection,  the  transferor
 19        shall  notify  the  state  tax commission of its intention to transfer the
 20        credit and the identity of the transferee. The state tax commission  shall
 21        provide  the  transferor  with a written statement of the amount of credit
 22        available under this section as then appearing in the commission's records
 23        and the number of years the credit may be  carried  over.  The  transferor
 24        shall  provide the transferee with the original statement.  The transferee
 25        shall attach a copy of the statement to any return in regard to which  the
 26        transferred credit is claimed.
 27        (c)  In  the event that after the transfer the state tax commission deter-
 28        mines that the amount of credit properly available under this  section  is
 29        less  than the amount claimed by the transferor of the credit and shown in
 30        the statement described in subsection (89)(b) of this section or that  the
 31        credit  is subject to recapture, the commission shall assess the amount of
 32        overstated credit as taxes due from the transferor and not the transferee.
 33        The assessment shall be made in the manner provided for  a  deficiency  in
 34        taxes under this chapter.
 35        (910) In addition to other needed rules, the state tax commission may pro-
 36    mulgate rules prescribing:
 37        (a)  In  the  case  of  S corporations, partnerships, trusts or estates, a
 38        method of attributing the credit under this section to  the  shareholders,
 39        partners  or beneficiaries in proportion to their share of the income from
 40        the S corporation, partnership, trust or estate.
 41        (b)  A requirement that a transferor under subsection (89)  of  this  sec-
 42        tion,  prior  to  obtaining  the  written statement provided in subsection
 43        (89)(b) of this section, post such bond or security as the state tax  com-
 44        mission  may  require  to  secure  any liability referred to in subsection
 45        (89)(c) of this section.  Such rules shall provide an  opportunity  for  a
 46        taxpayer,  upon  a  showing  of financial responsibility, to have the bond
 47        waiver, for notice of denial of waiver in accordance with section 63-3045,
 48        Idaho Code, and for review in  accordance  with  section  63-3045B,  Idaho
 49        Code.
                                                                        
 50        SECTION  8.  An  emergency  existing  therefor,  which emergency is hereby
 51    declared to exist, this act shall be in full force and effect on and after its
 52    passage and approval, and retroactively to January 1, 2004.

Statement of Purpose / Fiscal Impact


 REPRINT   REPRINT   REPRINT   REPRINT  REPRINT  REPRINT  REPRINT


                        STATEMENT OF PURPOSE

                              RS13822

This legislation will provide an investment tax credit against
state income taxes for investments in wind turbines, solar energy, low
impact hydro, industrial waste, animal waste, municipal waste,
geothermal resources, other renewable resources. This credit is
patterned after the broadband tax credit that was enacted in 2001. The
credit escalates if a qualifying facility is located in certain
economically depressed counties. The credit is for new investment for
tax years 2004 through 2009.


                           FISCAL IMPACT

The strategic plan of the Energy Division of the Department of
Water Resources is to have 300 MW of Windpower installed in Idaho by
the year 2010. If we were to break this out into 50 MW per year new
energy coming on line this would be an annual total investment of
$42,500,000 based on the cost of $850 KW. The maximum credit that could
be taken per year would be $2,125,000 (3+2) if the facility were to be
in the qualifying counties in the legislation. If the remainder of
alternative energy is added at about fifty percent capacity of
windpower, the maximum credit that would be taken would be $1,620,500
annually. The first year the estimated credit would be $3,187,500. This
credit would not take into account any increased sales or income taxes
paid as a result of the construction of a facility.

Contact:

Name:  Senator Brent Hill
       Representative George Eskridge-Committee on Energy 
Phone: 332-1000

STATEMENT OF PURPOSE/FISCAL NOTE                          H 760