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H0529aa.............................................by REVENUE AND TAXATION
TAXATION - GEOTHERMAL ENERGY - Amends existing law to provide for a
geothermal energy tax; to provide for the filing of operator's statements
by producers of electricity by means of geothermal energy; to provide for
the computation, allotment and apportionment of tax due from producers of
electricity by means of geothermal energy by the State Tax Commission; to
authorize county treasurers to collect specified taxes from producers of
electricity by means of geothermal energy; to provide for tax liens on
property of producers of electricity by means of geothermal energy; to
provide for the assessment of nonoperating property of producers of
electricity by means of geothermal energy; and to provide an exemption from
taxation for certain operating property of producers of electricity by
means of geothermal energy.
02/13 House intro - 1st rdg - to printing
02/14 Rpt prt - to Rev/Tax
02/22 Rpt out - to Gen Ord
02/26 Rpt out amen - to engros
02/27 Rpt engros - 1st rdg - to 2nd rdg as amen
02/28 2nd rdg - to 3rd rdg as amen
02/29 3rd rdg as amen - PASSED - 67-0-3
AYES -- Anderson, Andrus, Barrett, Bayer, Bedke, Bell, Bilbao, Block,
Bock, Boe, Bolz, Bowers, Brackett, Bradford, Chadderdon, Chavez,
Chew, Clark, Collins, Crane, Durst, Eskridge, Hagedorn, Hart,
Harwood, Henbest, Henderson, Jaquet, Killen, King, Kren, Labrador,
Lake, LeFavour, Loertscher, Luker, Marriott, Mathews, McGeachin,
Mortimer, Moyle, Nielsen, Nonini, Pasley-Stuart, Patrick, Pence,
Raybould, Ringo, Roberts, Ruchti, Rusche, Sayler, Schaefer,
Shepherd(08), Shirley, Shively, Smith(24), Smith(30)(Stanek),
Snodgrass, Stevenson, Thayn, Thomas, Trail, Vander Woude, Wood(27),
Wood(35), Mr. Speaker
NAYS -- None
Absent and excused -- Black, Shepherd(02), Wills
Floor Sponsor - Bedke
Title apvd - to Senate
03/03 Senate intro - 1st rdg - to Loc Gov
03/06 Rpt out - rec d/p - to 2nd rdg
03/07 2nd rdg - to 3rd rdg
03/13 3rd rdg - PASSED - 35-0-0
AYES -- Andreason, Bair, Bastian, Bilyeu, Broadsword, Burkett,
Cameron, Coiner, Corder, Darrington, Davis, Fulcher, Gannon, Geddes,
Goedde, Hammond, Heinrich, Hill, Jorgenson, Kelly, Keough, Langhorst,
Little, Lodge, Malepeai(Sagness), McGee, McKague, McKenzie, Pearce,
Richardson, Schroeder, Siddoway, Stegner, Stennett, Werk
NAYS -- None
Absent and excused -- None
Floor Sponsor - McKenzie
Title apvd - to House
03/13 To enrol
03/14 Rpt enrol - Sp signed
03/17 Pres signed - To Governor
03/20 Governor signed
Session Law Chapter 227
Effective: 01/01/08
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-ninth Legislature Second Regular Session - 2008IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 529 BY REVENUE AND TAXATION COMMITTEE 1 AN ACT 2 RELATING TO TAXATION OF ENERGY SYSTEMS USING GEOTHERMAL ENERGY; AMENDING SEC- 3 TION 63-3501, IDAHO CODE, TO FURTHER DEFINE TERMS; AMENDING SECTION 4 63-3502B, IDAHO CODE, TO PROVIDE FOR THE LEVY OF TAX ON GEOTHERMAL ENERGY 5 ELECTRICAL PRODUCTION; AMENDING SECTION 63-3503B, IDAHO CODE, TO PROVIDE 6 FOR FILING OPERATORS' STATEMENTS AND FOR THE ALLOTMENT AND APPORTIONMENT 7 OF TAX DUE FROM PRODUCERS OF ELECTRICITY BY MEANS OF GEOTHERMAL ENERGY BY 8 THE STATE TAX COMMISSION; AMENDING SECTION 63-3504, IDAHO CODE, TO PROVIDE 9 REFERENCE TO A PRODUCER OF ELECTRICITY BY MEANS OF GEOTHERMAL ENERGY; 10 AMENDING SECTION 63-3505, IDAHO CODE, TO PROVIDE REFERENCE TO A PRODUCER 11 OF ELECTRICITY BY MEANS OF GEOTHERMAL ENERGY; AMENDING SECTION 63-3506, 12 IDAHO CODE, TO PROVIDE REFERENCE TO A PRODUCER OF ELECTRICITY BY MEANS OF 13 GEOTHERMAL ENERGY; AMENDING SECTION 63-3622QQ, IDAHO CODE, TO PROVIDE THAT 14 MACHINERY AND EQUIPMENT INCLUDES CERTAIN OPERATING PROPERTY; AMENDING SEC- 15 TION 63-602JJ, IDAHO CODE, TO PROVIDE A PROPERTY TAX EXEMPTION FOR CERTAIN 16 OPERATING PROPERTY OF PRODUCERS OF ELECTRICITY BY MEANS OF GEOTHERMAL 17 ENERGY; DECLARING AN EMERGENCY AND PROVIDING RETROACTIVE APPLICATION. 18 Be It Enacted by the Legislature of the State of Idaho: 19 SECTION 1. That Section 63-3501, Idaho Code, be, and the same is hereby 20 amended to read as follows: 21 63-3501. DEFINITIONS. For the purposes of this chapter: 22 (a) The term "cooperative electrical association" means any nonprofit, 23 cooperative association organized and maintained by its members, whether 24 incorporated or unincorporated, for the purpose of transmitting, distributing 25 or delivering electric power to its members. 26 (b) The term "cooperative natural gas association" means any nonprofit 27 cooperative association organized and maintained by its members, whether 28 incorporated or unincorporated, for the purpose of transmitting, distributing 29 or delivering natural gas to its members. 30 (c) The term "cost of power" means the cost of power purchases and gener- 31 ation included in reports to, and in accordance with applicable requirements 32 of, the rural electrification administration, United States department of 33 agriculture, by cooperative electrical associations which are borrowers from 34 the rural electrification administration, and for cooperative electrical asso- 35 ciations which are not borrowers from the rural electrification administra- 36 tion, such costs which could have been included by such cooperative electrical 37 associations using equivalent reporting and accounting requirements. The state 38 tax commission shall prescribe necessary rules for the purpose of providing a 39 uniform method of reporting cost of power purchases and generation by coopera- 40 tive electrical associations, consistent with the reporting and accounting 41 requirements of the rural electrification administration. 42 (d) The term "cost of gas" means the cost of natural gas purchased by 43 cooperative natural gas associations from wholesale or other suppliers of nat- 2 1 ural gas for delivery to members of the cooperative natural gas association. 2 (e) The term "gross electrical earnings" means the gross receipts of a 3 cooperative electrical association from the distribution, delivery and sale of 4 electric power within the state of Idaho, but shall not include any earnings 5 or receipts from the distribution, delivery or sale of electric power consumed 6 in pumping water for irrigation or drainage purposes within the state of 7 Idaho, upon the land of such consumer and for the use and benefit of his own 8 land, and where such consumer has received from the association a refund, 9 rebate, or credit of three and one-half percent (3 1/2%) of the cost to him of 10 the electric power so used and consumed. 11 (f) The term "gross natural gas earnings" means the gross receipts of a 12 cooperative natural gas association from the distribution, delivery and sale 13 of natural gas within the state of Idaho. 14 (g) The term "gross wind or geothermal energy earnings" means the gross 15 receipts of a wind energy generator or a geothermal energy generator from the 16 distribution, delivery and sale to a customer for the direct use or resale of 17 electrical energy generated, manufactured or produced by means of wind energy 18 or geothermal energy within the state of Idaho. 19 (h) The term "operating property" means and includes all real estate, 20 fixtures or personal property owned, controlled, operated or managed by such 21 electrical or natural gas association, or producer of electricity by means of 22 wind energy or geothermal energy, excluding entities that are regulated by the 23 Idaho public utilities commission as to price, in connection with or to facil- 24 itate the generation, transmission, distribution, delivery, or measuring of 25 electric power, natural gas, or electrical energy generated, manufactured or 26 produced by means of wind energy or geothermal energy, excluding entities that 27 are regulated by the Idaho public utilities commission as to price, and all 28 conduits, ducts, or other devices, materials, apparatus or property for con- 29 taining, holding or carrying conductors used for the transmission, distribu- 30 tion and delivery of electric power, natural gas, or electrical energy gener- 31 ated, manufactured or produced by means of wind energy or geothermal energy, 32 excluding entities that are regulated by the Idaho public utilities commission 33 as to price, including construction tools, materials and supplies. 34 (i) The term "nonoperating property" means all other property, real or 35 personal, owned, controlled or managed by such electrical or natural gas asso- 36 ciation. 37 (j) The term "taxing unit" shall include any of the following that had 38 property taxes levied in the prior year: the separate taxing districts of the 39 county as well as the county itself and any such taxing district's fund having 40 a different geographical boundary than such taxing district itself. 41 (k) The term "tax levy" means the total tax levies fixed by each taxing 42 district, as defined herein, in the prior calendar year. 43 (l) The term "WPPSS 4 and 5 costs" means, for a cooperative electrical 44 association which is a participant under the Washington public power supply 45 system nuclear projects numbers 4 and 5 participants' agreement, dated July 46 14, 1976, all of its costs in connection with Washington public power supply 47 system nuclear projects numbers 4 and 5. 48 (m) The term "weighted wire mileage factor" means a figure which is 49 arrived at by multiplying the tax levy of each taxing unit by the number of 50 wire miles of transmission and distribution lines of such cooperative electri- 51 cal association situated in such taxing unit. 52 (n) The term "gas line mileage factor" means a figure which is arrived at 53 by multiplying the tax levy of each taxing unit by the number of miles of nat- 54 ural gas transmission and distribution lines of such cooperative natural gas 55 association situated in such taxing unit. 3 1 SECTION 2. That Section 63-3502B, Idaho Code, be, and the same is hereby 2 amended to read as follows: 3 63-3502B. LEVY OF TAX ON WIND ENERGY OR GEOTHERMAL ENERGY ELECTRICAL PRO- 4 DUCTION. There shall be levied against every producer of electricity by means 5 of wind energy or geothermal energy a wind energy tax or a geothermal energy 6 tax equal to three percent (3%) of such producer's gross wind energy earnings 7 or geothermal energy earnings. This wind energy tax or geothermal energy tax 8 shall be in lieu of all other taxes on the operating property, as defined in 9 section 63-3501(h), Idaho Code, of such wind energy producer or of such geo- 10 thermal energy producer. 11 SECTION 3. That Section 63-3503B, Idaho Code, be, and the same is hereby 12 amended to read as follows: 13 63-3503B. FILING OPERATORS' STATEMENTS -- ALLOTMENT AND APPORTIONMENT OF 14 TAX DUE FROM PRODUCERS OF ELECTRICITY BY MEANS OF WIND ENERGY OR GEOTHERMAL 15 ENERGY BY STATE TAX COMMISSION. Every producer of electricity by means of wind 16 energy or by means of geothermal energy in this state shall file with the 17 state tax commission of the state of Idaho an operator's statement in the man- 18 ner as provided for in section 63-404, Idaho Code, and shall include thereon a 19 statement of the prior calendar year's gross wind energy earnings or gross 20 geothermal energy earnings. Upon examining and verifying said statement, the 21 state tax commission shall compute the amount of the wind energy tax or the 22 geothermal energy tax based on the gross wind energy earnings or the gross 23 geothermal energy earnings and shall allot to each county in which the operat- 24 ing property of such producer is situate either: that proportion of the total 25 wind energy tax or that proportion of the total geothermal energy tax of such 26 producer shown to be due as the same proportion that the total original cost 27 of operating property situate in such county bears to the total original cost 28 of operating property of such producer for the wind energy project or of such 29 producer for the geothermal energy project. The state tax commission shall 30 then, for each county, apportion the wind energy tax or geothermal energy tax 31 so allotted to such county among the several taxing units thereof within which 32 any operating property of such producer is situate, by apportioning to each 33 such taxing unit that proportion of the wind energy tax or geothermal energy 34 tax so allotted to such county. For such apportionment, the state tax commis- 35 sion shall calculate the weighted original cost which shall be the product of 36 the original cost of such operating property within such taxing unit times 37 such taxing unit's property tax levy for the prior year and the weighted 38 apportionment rate which shall be the ratio of the wind energy tax or of the 39 geothermal energy tax as the case may be, allotted to such county, to the 40 aggregate weighted original cost for all such taxing units within which the 41 operating property is located and then shall calculate the apportionment of 42 the wind energy tax or geothermal energy tax for each such taxing unit to be 43 equal to the product of the weighted original cost times the weighted appor- 44 tionment rate. The state tax commission shall, on or before the second Monday 45 in August, notify the state superintendent of public instruction, the county 46 auditor, and the county treasurer of such allotment and apportionment and the 47 amounts thereof. On or before the third Monday in August, the county auditor 48 shall notify the appropriate taxing units of the amount of wind energy tax or 49 the amount of the geothermal energy tax being apportioned. 50 SECTION 4. That Section 63-3504, Idaho Code, be, and the same is hereby 51 amended to read as follows: 4 1 63-3504. COLLECTION BY COUNTY TREASURER -- PENALTY AND INTEREST IMPOSED 2 WHEN DELINQUENT. Upon receipt of the notification of the allotment and appor- 3 tionment of such taxes by the state tax commission by the county treasurer, 4 said county treasurer shall, not later than June 15 of each year, notify each 5 cooperative electrical association, natural gas cooperative, and producer of 6 electricity by means of wind energy or by means of geothermal energy, of the 7 amount of taxes owed, and the apportionment thereof to the county and to the 8 several taxing districts in the county and such tax shall be due and payable 9 not later than July 1, following and, upon the payment thereof, the county 10 treasurer shall pay over to each taxing district its apportionment as herein 11 determined. Any such taxes not paid by July 1, as aforesaid, shall become 12 delinquent and a penalty of five percent (5%) thereof shall be imposed, 13 together with interest at the rate of one percent (1%) per month from July 1 14 until paid. 15 SECTION 5. That Section 63-3505, Idaho Code, be, and the same is hereby 16 amended to read as follows: 17 63-3505. TAXES A LIEN ON PROPERTY OF ASSOCIATION OR PRODUCER UNTIL PAID. 18 All taxes due and payable under this chapter shall be a lien on all property, 19 real and personal, of the electrical, or natural gas association, or the pro- 20 ducer of electricity by means of wind energy or by means of geothermal energy, 21 owing the same, as of June 15 of each year and shall be discharged only by the 22 payment thereof. In any action to enforce payment of any delinquent taxes due 23 under this chapter, the county prosecuting such action shall be entitled to a 24 judgment for the reasonable costs of prosecuting such action, as well as for 25 the delinquent taxes, penalty and interest. 26 SECTION 6. That Section 63-3506, Idaho Code, be, and the same is hereby 27 amended to read as follows: 28 63-3506. ASSESSMENT OF NONOPERATING PROPERTY BY ASSESSOR. The 29 nonoperating property of any cooperative electrical or natural gas associa- 30 tion, or producer of electricity by means of wind energy or by means of geo- 31 thermal energy, shall be assessed by the county assessor of the county wherein 32 such property is situate, and taxes levied against the same shall be a lien, 33 and shall be due and payable, in the same manner as are any other taxes on 34 property. 35 SECTION 7. That Section 63-3622QQ, Idaho Code, be, and the same is hereby 36 amended to read as follows: 37 63-3622QQ. EQUIPMENT USED IN ALTERNATIVE METHOD OF GENERATION OF ELEC- 38 TRICITY. (1) Purchasers of machinery and equipment used directly in generating 39 electricity using fuel cells, low impact hydro, wind, geothermal resources, 40 biomass, cogeneration, sun or landfill gas as the principal source of power 41 may qualify for a rebate of sales or use taxes paid on such purchases but only 42 if the purchaser develops with such machinery, equipment, and tangible per- 43 sonal property a facility capable of generating not less than twenty-five (25) 44 kilowatts of electricity. 45 (2) For purposes of this section: 46 (a) "Landfill gas" means biomass fuel of the type qualified for federal 47 tax credits under 26 U.S.C. section 29 collected from a landfill. 48 "Landfill" means a landfill as defined in section 39-7403, Idaho Code; 49 (b) "Machinery and equipment" means industrial fixtures, devices, and 5 1 support facilities that are integral and necessary to the generation of 2 electricity using fuel cells, low impact hydro, wind, geothermal 3 resources, biomass, cogeneration, sun, or landfill gas as the principal 4 source of power; 5 (c) "Machinery and equipment" does not include: 6 (i) Hand-powered tools; 7 (ii) Property with a useful life of less than one (1) year; 8 (iii) Repair parts required to restore machinery and equipment to 9 normal working order; 10 (iv) Replacement parts that do not increase productivity, improve 11 efficiency, or extend the useful life of machinery and equipment; 12 (v) Buildings; or 13 (vi) Building fixtures that are not integral and necessary to the 14 generation of electricity that are permanently affixed to and become 15 a physical part of a building;. 16 Machinery and equipment includes all operating property as described in 17 section 63-3501(h), Idaho Code. 18 (d) Machinery and equipment is "used directly" in generating electricity 19 with fuel cells or by low impact hydro, wind energy, geothermal resources, 20 biomass, cogeneration, solar energy or landfill gas power if it provides 21 any part of the process that captures the energy of the fuel cells, low 22 impact hydro, wind, geothermal resources, biomass, cogeneration, sun, or 23 landfill gas, converts that energy to electricity, and stores, transforms 24 or transmits that electricity for entry into or operation in parallel with 25 electric transmission and distribution systems; 26 (e) "Fuel cell" means an electrochemical reaction that generates elec- 27 tricity by combining atoms of hydrogen and oxygen in the presence of a 28 catalyst; 29 (f) "Low impact hydro" means an electric generating facility utilizing 30 water for the generation of electricity, housed in existing canals or 31 existing reservoirs and having a power production capacity twenty-five 32 (25) kilowatts or greater. 33 (3) To qualify for the rebate, the taxpayer and his contractors must pay 34 sales and use tax on their purchases of property. Once a public utility, a 35 cooperative, a municipality or the public utilities commission certifies the 36 project will generate at least twenty-five (25) kilowatts of electricity, the 37 taxpayer may file a refund request with the state tax commission. The refund 38 request shall state that the taxpayer will construct or has constructed a 39 project that will generate sufficient kilowatts of electricity at the project 40 site to be eligible for the rebate and that the taxpayer is entitled to 41 receive a rebate of all sales and use taxes paid that qualifies for the rebate 42 created by this section. 43 (4) Upon filing of a written refund claim by the taxpayer entitled to the 44 rebate, and subject to such reasonable documentation and verification as the 45 state tax commission may require, the rebate shall be paid by the state tax 46 commission as a refund allowable under section 63-3626, Idaho Code. A claim 47 for rebate under this section must be filed on or before the last day of the 48 third calendar year following the year in which the taxes sought to be rebated 49 were paid or the right to the rebate is lost. 50 (5) Any rebate paid shall be subject to recapture by the state tax com- 51 mission. In the event the property is not used, stored or otherwise consumed 52 in the process of generating electricity for a period of sixty (60) months, 53 the state tax commission may recapture the tax paid in the same proportion as 54 an amount of credit required to be recaptured under section 63-3029B, Idaho 55 Code. 6 1 (6) Any recapture amount due under this section shall be a deficiency in 2 tax for the period in which the disqualification first occurs for purposes of 3 section 63-3629, Idaho Code, and may be enforced and collected in the manner 4 provided by the Idaho sales tax act, provided however, that in lieu of the 5 provisions of section 63-3633, Idaho Code, the period of time within which the 6 commission may issue a notice under section 63-3629, Idaho Code, in regard to 7 an amount subject to recapture shall be the later of five (5) years after the 8 end of the taxable year, for income tax purposes, in which the project period 9 ends. 10 SECTION 8. That Section 63-602JJ, Idaho Code, be, and the same is hereby 11 amended to read as follows: 12 63-602JJ. PROPERTY EXEMPT FROM TAXATION -- CERTAIN OPERATING PROPERTY OF 13 PRODUCER OF ELECTRICITY BY MEANS OF WIND ENERGY OR BY MEANS OF GEOTHERMAL 14 ENERGY. The following property is exempt from taxation: (i) operating property 15 of producers of electricity by means of wind energy exclusively used to pro- 16 duce electricity by means of wind energy on which the tax on gross wind energy 17 earnings will be paid; and (ii) operating property of producers of electricity 18 by means of geothermal energy exclusively used to produce electricity by means 19 of geothermal energy on which the tax on gross geothermal energy earnings will 20 be paid. 21 SECTION 9. An emergency existing therefor, which emergency is hereby 22 declared to exist, this act shall be in full force and effect on and after its 23 passage and approval, and retroactively to January 1, 2008.
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-ninth Legislature Second Regular Session - 2008Moved by Raybould Seconded by Lake IN THE HOUSE OF REPRESENTATIVES HOUSE AMENDMENT TO H.B. NO. 529 1 AMENDMENTS TO SECTION 7 2 On page 5 of the printed bill, delete line 4, and insert: "source of 3 power. "Machinery and equipment" includes all operating property as described 4 in section 63-3501(h), Idaho Code;"; in line 5, delete ""Machinery" and 5 insert: "Notwithstanding subsection (2)(b) of this section, "mMachinery"; in 6 line 15, delete ";." and insert: ";"; and delete lines 16 and 17.
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-ninth Legislature Second Regular Session - 2008IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 529, As Amended BY REVENUE AND TAXATION COMMITTEE 1 AN ACT 2 RELATING TO TAXATION OF ENERGY SYSTEMS USING GEOTHERMAL ENERGY; AMENDING SEC- 3 TION 63-3501, IDAHO CODE, TO FURTHER DEFINE TERMS; AMENDING SECTION 4 63-3502B, IDAHO CODE, TO PROVIDE FOR THE LEVY OF TAX ON GEOTHERMAL ENERGY 5 ELECTRICAL PRODUCTION; AMENDING SECTION 63-3503B, IDAHO CODE, TO PROVIDE 6 FOR FILING OPERATORS' STATEMENTS AND FOR THE ALLOTMENT AND APPORTIONMENT 7 OF TAX DUE FROM PRODUCERS OF ELECTRICITY BY MEANS OF GEOTHERMAL ENERGY BY 8 THE STATE TAX COMMISSION; AMENDING SECTION 63-3504, IDAHO CODE, TO PROVIDE 9 REFERENCE TO A PRODUCER OF ELECTRICITY BY MEANS OF GEOTHERMAL ENERGY; 10 AMENDING SECTION 63-3505, IDAHO CODE, TO PROVIDE REFERENCE TO A PRODUCER 11 OF ELECTRICITY BY MEANS OF GEOTHERMAL ENERGY; AMENDING SECTION 63-3506, 12 IDAHO CODE, TO PROVIDE REFERENCE TO A PRODUCER OF ELECTRICITY BY MEANS OF 13 GEOTHERMAL ENERGY; AMENDING SECTION 63-3622QQ, IDAHO CODE, TO PROVIDE THAT 14 MACHINERY AND EQUIPMENT INCLUDES CERTAIN OPERATING PROPERTY; AMENDING SEC- 15 TION 63-602JJ, IDAHO CODE, TO PROVIDE A PROPERTY TAX EXEMPTION FOR CERTAIN 16 OPERATING PROPERTY OF PRODUCERS OF ELECTRICITY BY MEANS OF GEOTHERMAL 17 ENERGY; DECLARING AN EMERGENCY AND PROVIDING RETROACTIVE APPLICATION. 18 Be It Enacted by the Legislature of the State of Idaho: 19 SECTION 1. That Section 63-3501, Idaho Code, be, and the same is hereby 20 amended to read as follows: 21 63-3501. DEFINITIONS. For the purposes of this chapter: 22 (a) The term "cooperative electrical association" means any nonprofit, 23 cooperative association organized and maintained by its members, whether 24 incorporated or unincorporated, for the purpose of transmitting, distributing 25 or delivering electric power to its members. 26 (b) The term "cooperative natural gas association" means any nonprofit 27 cooperative association organized and maintained by its members, whether 28 incorporated or unincorporated, for the purpose of transmitting, distributing 29 or delivering natural gas to its members. 30 (c) The term "cost of power" means the cost of power purchases and gener- 31 ation included in reports to, and in accordance with applicable requirements 32 of, the rural electrification administration, United States department of 33 agriculture, by cooperative electrical associations which are borrowers from 34 the rural electrification administration, and for cooperative electrical asso- 35 ciations which are not borrowers from the rural electrification administra- 36 tion, such costs which could have been included by such cooperative electrical 37 associations using equivalent reporting and accounting requirements. The state 38 tax commission shall prescribe necessary rules for the purpose of providing a 39 uniform method of reporting cost of power purchases and generation by coopera- 40 tive electrical associations, consistent with the reporting and accounting 41 requirements of the rural electrification administration. 42 (d) The term "cost of gas" means the cost of natural gas purchased by 43 cooperative natural gas associations from wholesale or other suppliers of nat- 2 1 ural gas for delivery to members of the cooperative natural gas association. 2 (e) The term "gross electrical earnings" means the gross receipts of a 3 cooperative electrical association from the distribution, delivery and sale of 4 electric power within the state of Idaho, but shall not include any earnings 5 or receipts from the distribution, delivery or sale of electric power consumed 6 in pumping water for irrigation or drainage purposes within the state of 7 Idaho, upon the land of such consumer and for the use and benefit of his own 8 land, and where such consumer has received from the association a refund, 9 rebate, or credit of three and one-half percent (3 1/2%) of the cost to him of 10 the electric power so used and consumed. 11 (f) The term "gross natural gas earnings" means the gross receipts of a 12 cooperative natural gas association from the distribution, delivery and sale 13 of natural gas within the state of Idaho. 14 (g) The term "gross wind or geothermal energy earnings" means the gross 15 receipts of a wind energy generator or a geothermal energy generator from the 16 distribution, delivery and sale to a customer for the direct use or resale of 17 electrical energy generated, manufactured or produced by means of wind energy 18 or geothermal energy within the state of Idaho. 19 (h) The term "operating property" means and includes all real estate, 20 fixtures or personal property owned, controlled, operated or managed by such 21 electrical or natural gas association, or producer of electricity by means of 22 wind energy or geothermal energy, excluding entities that are regulated by the 23 Idaho public utilities commission as to price, in connection with or to facil- 24 itate the generation, transmission, distribution, delivery, or measuring of 25 electric power, natural gas, or electrical energy generated, manufactured or 26 produced by means of wind energy or geothermal energy, excluding entities that 27 are regulated by the Idaho public utilities commission as to price, and all 28 conduits, ducts, or other devices, materials, apparatus or property for con- 29 taining, holding or carrying conductors used for the transmission, distribu- 30 tion and delivery of electric power, natural gas, or electrical energy gener- 31 ated, manufactured or produced by means of wind energy or geothermal energy, 32 excluding entities that are regulated by the Idaho public utilities commission 33 as to price, including construction tools, materials and supplies. 34 (i) The term "nonoperating property" means all other property, real or 35 personal, owned, controlled or managed by such electrical or natural gas asso- 36 ciation. 37 (j) The term "taxing unit" shall include any of the following that had 38 property taxes levied in the prior year: the separate taxing districts of the 39 county as well as the county itself and any such taxing district's fund having 40 a different geographical boundary than such taxing district itself. 41 (k) The term "tax levy" means the total tax levies fixed by each taxing 42 district, as defined herein, in the prior calendar year. 43 (l) The term "WPPSS 4 and 5 costs" means, for a cooperative electrical 44 association which is a participant under the Washington public power supply 45 system nuclear projects numbers 4 and 5 participants' agreement, dated July 46 14, 1976, all of its costs in connection with Washington public power supply 47 system nuclear projects numbers 4 and 5. 48 (m) The term "weighted wire mileage factor" means a figure which is 49 arrived at by multiplying the tax levy of each taxing unit by the number of 50 wire miles of transmission and distribution lines of such cooperative electri- 51 cal association situated in such taxing unit. 52 (n) The term "gas line mileage factor" means a figure which is arrived at 53 by multiplying the tax levy of each taxing unit by the number of miles of nat- 54 ural gas transmission and distribution lines of such cooperative natural gas 55 association situated in such taxing unit. 3 1 SECTION 2. That Section 63-3502B, Idaho Code, be, and the same is hereby 2 amended to read as follows: 3 63-3502B. LEVY OF TAX ON WIND ENERGY OR GEOTHERMAL ENERGY ELECTRICAL PRO- 4 DUCTION. There shall be levied against every producer of electricity by means 5 of wind energy or geothermal energy a wind energy tax or a geothermal energy 6 tax equal to three percent (3%) of such producer's gross wind energy earnings 7 or geothermal energy earnings. This wind energy tax or geothermal energy tax 8 shall be in lieu of all other taxes on the operating property, as defined in 9 section 63-3501(h), Idaho Code, of such wind energy producer or of such geo- 10 thermal energy producer. 11 SECTION 3. That Section 63-3503B, Idaho Code, be, and the same is hereby 12 amended to read as follows: 13 63-3503B. FILING OPERATORS' STATEMENTS -- ALLOTMENT AND APPORTIONMENT OF 14 TAX DUE FROM PRODUCERS OF ELECTRICITY BY MEANS OF WIND ENERGY OR GEOTHERMAL 15 ENERGY BY STATE TAX COMMISSION. Every producer of electricity by means of wind 16 energy or by means of geothermal energy in this state shall file with the 17 state tax commission of the state of Idaho an operator's statement in the man- 18 ner as provided for in section 63-404, Idaho Code, and shall include thereon a 19 statement of the prior calendar year's gross wind energy earnings or gross 20 geothermal energy earnings. Upon examining and verifying said statement, the 21 state tax commission shall compute the amount of the wind energy tax or the 22 geothermal energy tax based on the gross wind energy earnings or the gross 23 geothermal energy earnings and shall allot to each county in which the operat- 24 ing property of such producer is situate either: that proportion of the total 25 wind energy tax or that proportion of the total geothermal energy tax of such 26 producer shown to be due as the same proportion that the total original cost 27 of operating property situate in such county bears to the total original cost 28 of operating property of such producer for the wind energy project or of such 29 producer for the geothermal energy project. The state tax commission shall 30 then, for each county, apportion the wind energy tax or geothermal energy tax 31 so allotted to such county among the several taxing units thereof within which 32 any operating property of such producer is situate, by apportioning to each 33 such taxing unit that proportion of the wind energy tax or geothermal energy 34 tax so allotted to such county. For such apportionment, the state tax commis- 35 sion shall calculate the weighted original cost which shall be the product of 36 the original cost of such operating property within such taxing unit times 37 such taxing unit's property tax levy for the prior year and the weighted 38 apportionment rate which shall be the ratio of the wind energy tax or of the 39 geothermal energy tax as the case may be, allotted to such county, to the 40 aggregate weighted original cost for all such taxing units within which the 41 operating property is located and then shall calculate the apportionment of 42 the wind energy tax or geothermal energy tax for each such taxing unit to be 43 equal to the product of the weighted original cost times the weighted appor- 44 tionment rate. The state tax commission shall, on or before the second Monday 45 in August, notify the state superintendent of public instruction, the county 46 auditor, and the county treasurer of such allotment and apportionment and the 47 amounts thereof. On or before the third Monday in August, the county auditor 48 shall notify the appropriate taxing units of the amount of wind energy tax or 49 the amount of the geothermal energy tax being apportioned. 50 SECTION 4. That Section 63-3504, Idaho Code, be, and the same is hereby 51 amended to read as follows: 4 1 63-3504. COLLECTION BY COUNTY TREASURER -- PENALTY AND INTEREST IMPOSED 2 WHEN DELINQUENT. Upon receipt of the notification of the allotment and appor- 3 tionment of such taxes by the state tax commission by the county treasurer, 4 said county treasurer shall, not later than June 15 of each year, notify each 5 cooperative electrical association, natural gas cooperative, and producer of 6 electricity by means of wind energy or by means of geothermal energy, of the 7 amount of taxes owed, and the apportionment thereof to the county and to the 8 several taxing districts in the county and such tax shall be due and payable 9 not later than July 1, following and, upon the payment thereof, the county 10 treasurer shall pay over to each taxing district its apportionment as herein 11 determined. Any such taxes not paid by July 1, as aforesaid, shall become 12 delinquent and a penalty of five percent (5%) thereof shall be imposed, 13 together with interest at the rate of one percent (1%) per month from July 1 14 until paid. 15 SECTION 5. That Section 63-3505, Idaho Code, be, and the same is hereby 16 amended to read as follows: 17 63-3505. TAXES A LIEN ON PROPERTY OF ASSOCIATION OR PRODUCER UNTIL PAID. 18 All taxes due and payable under this chapter shall be a lien on all property, 19 real and personal, of the electrical, or natural gas association, or the pro- 20 ducer of electricity by means of wind energy or by means of geothermal energy, 21 owing the same, as of June 15 of each year and shall be discharged only by the 22 payment thereof. In any action to enforce payment of any delinquent taxes due 23 under this chapter, the county prosecuting such action shall be entitled to a 24 judgment for the reasonable costs of prosecuting such action, as well as for 25 the delinquent taxes, penalty and interest. 26 SECTION 6. That Section 63-3506, Idaho Code, be, and the same is hereby 27 amended to read as follows: 28 63-3506. ASSESSMENT OF NONOPERATING PROPERTY BY ASSESSOR. The 29 nonoperating property of any cooperative electrical or natural gas associa- 30 tion, or producer of electricity by means of wind energy or by means of geo- 31 thermal energy, shall be assessed by the county assessor of the county wherein 32 such property is situate, and taxes levied against the same shall be a lien, 33 and shall be due and payable, in the same manner as are any other taxes on 34 property. 35 SECTION 7. That Section 63-3622QQ, Idaho Code, be, and the same is hereby 36 amended to read as follows: 37 63-3622QQ. EQUIPMENT USED IN ALTERNATIVE METHOD OF GENERATION OF ELEC- 38 TRICITY. (1) Purchasers of machinery and equipment used directly in generating 39 electricity using fuel cells, low impact hydro, wind, geothermal resources, 40 biomass, cogeneration, sun or landfill gas as the principal source of power 41 may qualify for a rebate of sales or use taxes paid on such purchases but only 42 if the purchaser develops with such machinery, equipment, and tangible per- 43 sonal property a facility capable of generating not less than twenty-five (25) 44 kilowatts of electricity. 45 (2) For purposes of this section: 46 (a) "Landfill gas" means biomass fuel of the type qualified for federal 47 tax credits under 26 U.S.C. section 29 collected from a landfill. 48 "Landfill" means a landfill as defined in section 39-7403, Idaho Code; 49 (b) "Machinery and equipment" means industrial fixtures, devices, and 5 1 support facilities that are integral and necessary to the generation of 2 electricity using fuel cells, low impact hydro, wind, geothermal 3 resources, biomass, cogeneration, sun, or landfill gas as the principal 4 source of power. "Machinery and equipment" includes all operating property 5 as described in section 63-3501(h), Idaho Code; 6 (c) Notwithstanding subsection (2)(b) of this section, "mMachinery and 7 equipment" does not include: 8 (i) Hand-powered tools; 9 (ii) Property with a useful life of less than one (1) year; 10 (iii) Repair parts required to restore machinery and equipment to 11 normal working order; 12 (iv) Replacement parts that do not increase productivity, improve 13 efficiency, or extend the useful life of machinery and equipment; 14 (v) Buildings; or 15 (vi) Building fixtures that are not integral and necessary to the 16 generation of electricity that are permanently affixed to and become 17 a physical part of a building; 18 (d) Machinery and equipment is "used directly" in generating electricity 19 with fuel cells or by low impact hydro, wind energy, geothermal resources, 20 biomass, cogeneration, solar energy or landfill gas power if it provides 21 any part of the process that captures the energy of the fuel cells, low 22 impact hydro, wind, geothermal resources, biomass, cogeneration, sun, or 23 landfill gas, converts that energy to electricity, and stores, transforms 24 or transmits that electricity for entry into or operation in parallel with 25 electric transmission and distribution systems; 26 (e) "Fuel cell" means an electrochemical reaction that generates elec- 27 tricity by combining atoms of hydrogen and oxygen in the presence of a 28 catalyst; 29 (f) "Low impact hydro" means an electric generating facility utilizing 30 water for the generation of electricity, housed in existing canals or 31 existing reservoirs and having a power production capacity twenty-five 32 (25) kilowatts or greater. 33 (3) To qualify for the rebate, the taxpayer and his contractors must pay 34 sales and use tax on their purchases of property. Once a public utility, a 35 cooperative, a municipality or the public utilities commission certifies the 36 project will generate at least twenty-five (25) kilowatts of electricity, the 37 taxpayer may file a refund request with the state tax commission. The refund 38 request shall state that the taxpayer will construct or has constructed a 39 project that will generate sufficient kilowatts of electricity at the project 40 site to be eligible for the rebate and that the taxpayer is entitled to 41 receive a rebate of all sales and use taxes paid that qualifies for the rebate 42 created by this section. 43 (4) Upon filing of a written refund claim by the taxpayer entitled to the 44 rebate, and subject to such reasonable documentation and verification as the 45 state tax commission may require, the rebate shall be paid by the state tax 46 commission as a refund allowable under section 63-3626, Idaho Code. A claim 47 for rebate under this section must be filed on or before the last day of the 48 third calendar year following the year in which the taxes sought to be rebated 49 were paid or the right to the rebate is lost. 50 (5) Any rebate paid shall be subject to recapture by the state tax com- 51 mission. In the event the property is not used, stored or otherwise consumed 52 in the process of generating electricity for a period of sixty (60) months, 53 the state tax commission may recapture the tax paid in the same proportion as 54 an amount of credit required to be recaptured under section 63-3029B, Idaho 55 Code. 6 1 (6) Any recapture amount due under this section shall be a deficiency in 2 tax for the period in which the disqualification first occurs for purposes of 3 section 63-3629, Idaho Code, and may be enforced and collected in the manner 4 provided by the Idaho sales tax act, provided however, that in lieu of the 5 provisions of section 63-3633, Idaho Code, the period of time within which the 6 commission may issue a notice under section 63-3629, Idaho Code, in regard to 7 an amount subject to recapture shall be the later of five (5) years after the 8 end of the taxable year, for income tax purposes, in which the project period 9 ends. 10 SECTION 8. That Section 63-602JJ, Idaho Code, be, and the same is hereby 11 amended to read as follows: 12 63-602JJ. PROPERTY EXEMPT FROM TAXATION -- CERTAIN OPERATING PROPERTY OF 13 PRODUCER OF ELECTRICITY BY MEANS OF WIND ENERGY OR BY MEANS OF GEOTHERMAL 14 ENERGY. The following property is exempt from taxation: (i) operating property 15 of producers of electricity by means of wind energy exclusively used to pro- 16 duce electricity by means of wind energy on which the tax on gross wind energy 17 earnings will be paid; and (ii) operating property of producers of electricity 18 by means of geothermal energy exclusively used to produce electricity by means 19 of geothermal energy on which the tax on gross geothermal energy earnings will 20 be paid. 21 SECTION 9. An emergency existing therefor, which emergency is hereby 22 declared to exist, this act shall be in full force and effect on and after its 23 passage and approval, and retroactively to January 1, 2008.
STATEMENT OF PURPOSE
RS 17722
The purpose of this proposed legislation is to include
producers of geothermal energy under the identical tax provisions
of Idaho Code as producers of wind energy. It clarifies that the
"Operating Property" as defined in Idaho Code Section 63-3501(h)
is included in the definition of "Machinery and Equipment" as
defined in Idaho Code Section 63-3622QQ(b).
FISCAL NOTE
There no impact to the General Fund.
Contact
Name: Stephen E. West, CENTRA Consulting, Inc.
Phone: 208.338.9400
Kerry Hawkley, US Geothermal Inc.
208.434.1027
STATEMENT OF PURPOSE/FISCAL NOTE H 529