HB 1722-4_ Filed 04/03/2007, 10:12 Hershman

SENATE MOTION


MADAM PRESIDENT:

    I move
that Engrossed House Bill 1722 be amended to read as follows:

    "Page 1, between the enacting clause and line 1, begin a new paragraph and insert:

SOURCE: IC 6-3.1-27-9.5; (07)MO172206.1. -->     "SECTION 1. IC 6-3.1-27-9.5, AS AMENDED BY P.L.122-2006, SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2008]: Sec. 9.5. Except as provided in IC 6-3.1-28-11(c), the total amount of credits allowed under:
        (1) section 8 of this chapter;
        (2) section 9 of this chapter; and
        (3) IC 6-3.1-28;
may not exceed fifty million dollars ($50,000,000) for all taxpayers and all taxable years beginning after December 31, 2004. The corporation shall determine the maximum allowable amount for each type of credit, which must be at least four million dollars ($4,000,000) for each type of credit.
SOURCE: IC 6-3.1-28-9; (07)MO172206.2. -->     SECTION 2. IC 6-3.1-28-9 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 9. (a) If the amount of the credit determined under this chapter for a taxpayer in a taxable year exceeds the taxpayer's state tax liability for that taxable year, the taxpayer may carry over the excess to the following taxable years. The amount of the credit carryover from a taxable year shall be reduced to the extent that the carryover is used by the taxpayer to obtain a credit under this chapter for any subsequent taxable year.
    (b) A taxpayer is not entitled to a carryback or refund of any unused credit. A taxpayer may not sell, assign, convey, or otherwise transfer the tax credit provided by this chapter.
SOURCE: IC 6-3.1-28-11; (07)MO172206.3. -->     SECTION 3. IC 6-3.1-28-11, AS AMENDED BY P.L.122-2006, SECTION 9, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2008]: Sec. 11. (a) As used in this section, "cellulosic ethanol" means ethanol derived solely from lignocellulosic or hemicellulosic matter.
     (b) The corporation shall determine the maximum amount of credits

that a taxpayer (or if the person producing the ethanol is a pass through entity, the shareholders, partners, or members of the pass through entity) is eligible to receive under this section. The total amount of credits allowed a taxpayer (or, if the person producing the ethanol is a pass through entity, the shareholders, partners, or members of the pass through entity) under this chapter may not exceed a total of the following amounts for all taxable years:
        (1) Two million dollars ($2,000,000) in the case of a taxpayer who produces at least forty million (40,000,000) but less than sixty million (60,000,000) gallons of grain ethanol in a taxable year.
        (2) Three million dollars ($3,000,000) in the case of a taxpayer who produces at least sixty million (60,000,000) gallons of grain ethanol in a taxable year.
         (3) Twenty million dollars ($20,000,000) for all taxpayers for all taxable years, in the case of tax credits for a taxpayer who produces at least twenty million (20,000,000) gallons of cellulosic ethanol in a taxable year.
     (c) The total amount of tax credits allowed under this chapter for a taxpayer who produces at least twenty million (20,000,000) gallons of cellulosic ethanol is not subject to the maximum amount of tax credits imposed by IC 6-3.1-27-9.5.".

SOURCE: Page 1, line 17; (07)MO172206.1. -->     Page 1, line 17, delete "Subject" and insert " If the corporation decides to award a tax credit under this chapter to a taxpayer, and subject".
    Page 2, line 20, delete "The" and insert " If the corporation decides to award a tax credit under this chapter to an applicant, the".
    Page 3, between lines 33 and 34, begin a new paragraph and insert:
SOURCE: IC 6-3.1-34; (07)MO172206.7. -->     "SECTION 7. IC 6-3.1-34 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2008]:
    Chapter 34. Indiana Fueled Energy Investment Tax Credit
    Sec. 1. As used in this chapter, "biomass" means any organic matter that is available on a renewable basis, including agricultural crops and agricultural wastes and residues, wood and wood wastes, including wood residues, forest thinnings, mill residue wood, clean construction and demolition waste (but excluding treated or painted lumber), animal wastes, municipal wastes, food wastes, and aquatic plants.

     Sec. 2. As used in this chapter, "corporation" means the Indiana economic development corporation established by IC 5-28-3-1.
     Sec. 3. As used in this chapter, "Indiana coal" has the meaning set forth in IC 4-4-30-4.
    Sec. 4. As used in this chapter, "Indiana fuel" means either of the following:
        (1) Any of the following when the fuel is gasified, liquefied, or methanized:
            (A) Biomass produced in Indiana.
            (B) Indiana coal.
            (C) Petroleum coke produced in Indiana.
            (D) Oil shale located in Indiana.
        (2) Coal mine methane when used in the production of power.
    Sec. 5. As used in this chapter, "office" means the office of energy and defense development.
    Sec. 6. As used in this chapter, "qualified investment" means a taxpayer's expenditures for:
        (1) all real and tangible personal property incorporated in and used as part of a facility used to produce energy from Indiana fuel; and
        (2) transmission equipment and other real and personal property located at the site of the energy production facility that is employed specifically to serve the energy production facility.
    Sec. 7. As used in this chapter, "pass through entity" means:
        (1) a corporation that is exempt from the adjusted gross income tax under IC 6-3-2-2.8(2);
        (2) a partnership;
        (3) a limited liability company;
        (4) a limited liability partnership;
        (5) a corporation organized under IC 8-1-13; or
        (6) a corporation organized under IC 23-17-1 that:
            (A) is an electric cooperative; and
            (B) has at least one (1) member that is a corporation organized under IC 8-1-13.
    Sec. 8. As used in this chapter, "petroleum coke" means a carbonaceous solid derived from the process of refining oil.
    Sec. 9. As used in this chapter, "state tax liability" means the taxpayer's total tax liability that is incurred under:
        (1) IC 6-3-1 through IC 6-3-7 (the adjusted gross income tax);
        (2) IC 27-1-18-2 (the insurance premiums tax);
        (3) IC 6-5.5 (the financial institutions tax); and
        (4) IC 6-2.3 (the utility receipts tax);
as computed after the application of the credits that, under IC 6-3.1-1-2, are to be applied before the credit provided by this chapter.
    Sec. 10. As used in this chapter, "taxpayer" means any person, corporation, limited liability company, partnership, or other entity that:
        (1) has any state tax liability; and
        (2) makes a qualified investment.
    Sec. 11. (a) A taxpayer that:
        (1) is awarded a tax credit under this chapter by the corporation; and
        (2) complies with the conditions set forth in this chapter and the agreement entered into by the corporation and the

taxpayer under this chapter;
is entitled to a credit against the taxpayer's state tax liability for a taxable year in which the taxpayer places into service an energy production facility using Indiana fuel and for the taxable years provided in section 13 of this chapter.
    (b) A tax credit awarded under this chapter must be applied against the taxpayer's state tax liability in the following order:
        (1) Against the taxpayer's liability incurred under IC 6-3-1 through IC 6-3-7 (the adjusted gross income tax).
        (2) Against the taxpayer's liability incurred under IC 6-5.5 (the financial institutions tax).
        (3) Against the taxpayer's liability incurred under IC 27-1-18-2 (the insurance premiums tax).
        (4) Against the taxpayer's liability incurred under IC 6-2.3 (the utility receipts tax).
    Sec. 12. (a) If the corporation decides to award a tax credit under this chapter to a taxpayer, the amount of the credit to which the taxpayer is entitled for a qualified investment is equal to the product of:
        (1) the amount of the taxpayer's qualified investment; multiplied by
        (2) ten percent (10%).
    (b) The total amount of tax credits awarded under this chapter may not exceed fifty million dollars ($50,000,000) for all taxpayers and all taxable years.
    Sec. 13. (a) A credit awarded under section 11 of this chapter must be taken in ten (10) annual installments, beginning with the year in which the taxpayer places into service the taxpayer's energy production facility.
    (b) The amount of an annual installment of the credit awarded under section 11 of this chapter is equal to the quotient of:
        (1) the credit amount determined under section 12 of this chapter; divided by
        (2) ten (10).
    (c) If the credit allowed by this chapter is available to a member of an affiliated group of corporations filing a consolidated return under IC 6-2.3-6-5 or IC 6-3-4-14, the credit shall be applied against the state tax liability of the affiliated group.
    Sec. 14. (a) If a pass through entity is entitled to a credit under this chapter but does not have state tax liability against which the credit may be applied, an individual who is a shareholder, partner, or member of the pass through entity is entitled to a credit equal to:
        (1) the credit determined for the pass through entity for the taxable year; multiplied by
        (2) in the case of a pass through entity described in:

             (A) section 7(1), 7(2), 7(3), or 7(4) of this chapter, the percentage of the pass through entity's distributive income

to which the shareholder, partner, or member is entitled; or
            (B) section 7(5) or 7(6) of this chapter, the relative percentage of the corporation's patronage dividends allocable to the member for the taxable year.
    (b) The credit provided under subsection (a) is in addition to a tax credit to which a shareholder, partner, or member of a pass through entity is otherwise entitled under this chapter. However, a pass through entity and an individual who is a shareholder, partner, or member of the pass through entity may not claim more than one (1) credit for the same qualified investment.
    Sec. 15. The amount of a credit claimed under this chapter may not exceed a qualified taxpayer's state tax liability. A taxpayer is not entitled to a carryback, carryover, or refund of an unused credit.
    Sec. 16. A taxpayer may not sell, assign, convey, or otherwise transfer the tax credit provided by this chapter.
    Sec. 17. (a) A taxpayer that proposes to place a new energy production facility utilizing Indiana fuel into service may apply to the corporation before the taxpayer makes the qualified investment to enter into an agreement for a tax credit under this chapter. The corporation shall prescribe the form of the application.
    (b) The office shall provide any technical assistance requested by the corporation in the administration of this chapter.
    Sec. 18. After receipt of an application, the corporation may enter into an agreement with the applicant for a credit under this chapter if the corporation determines that the taxpayer's proposed investment satisfies the requirements of this chapter.
    Sec. 19. (a) If the corporation decides to award a tax credit under this chapter to an applicant, the corporation shall enter into an agreement with the applicant. The agreement must include all the following:
        (1) A detailed description of the project that is the subject of the agreement.
        (2) The first taxable year for which the credit may be claimed.
        (3) The amount of the tax credit that, subject to section 15 of this chapter, will be allowed for each taxable year.
        (4) A requirement that the taxpayer shall maintain operations at the project location for at least ten (10) years during the term that the tax credit is available.
        (5) A requirement that the taxpayer shall pay an average wage to its employees at the energy production facility, other than highly compensated employees, in each taxable year that a tax credit is available, that equals at least one hundred twenty-five percent (125%) of the average county wage in the county in which the energy production facility is located.
        (6) A requirement that the taxpayer will maintain at the location where the qualified investment is made, during the

term of the tax credit, a total payroll that is at least equal to the payroll that existed on the date that the taxpayer placed the energy production facility into service.
        (7) A requirement that one hundred percent (100%) of the fuel used at the energy production facility must be Indiana fuel.
        (8) A requirement that the energy production facility will comply with any energy efficiency or emission standard recommended by the office and imposed by the corporation.
    (b) A taxpayer must comply with the terms of the agreement described in subsection (a) to receive an annual installment of the tax credit awarded under this chapter. The corporation shall annually determine whether the taxpayer is in compliance with the agreement. If the corporation determines that the taxpayer is in compliance, the corporation shall issue a certificate of compliance to the taxpayer.
    Sec. 20. To receive the credit awarded by this chapter, a taxpayer must claim the credit on the taxpayer's annual state tax return or returns in the manner prescribed by the department. The taxpayer shall submit to the department a copy of the taxpayer's certificate of compliance issued under section 19 of this chapter, and all information that the department determines is necessary for the calculation of the credit provided by this chapter.
".

SOURCE: Page 8, line 24; (07)MO172206.8. -->     Page 8, between lines 24 and 25, begin a new paragraph and insert:
SOURCE: IC 8-1-8.8-10; (07)MO172206.16. -->     "SECTION 16. IC 8-1-8.8-10 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 10. (a) As used in this chapter, "renewable energy resources" means alternative sources of renewable energy, including the following:
        (1) Energy from wind.
        (2) Solar energy.
        (3) Photovoltaic cells and panels.
        (4) Dedicated crops grown for energy production.
        (5) Organic waste Biomass (as defined by IC 6-3.1-34-1).
        (6) Hydropower from existing dams.
        (7) Fuel cells.
        (8) Energy from waste to energy facilities producing steam not used for the production of electricity.
    (b) Except for energy described in subsection (a)(8), the term does not include energy from the incinerations, burning, or heating of any of the following:
        (1) Waste wood.
        (2) (1) Tires.
        (3) (2) General household, institutional, commercial, industrial lunchroom, office, or landscape waste.
        (4) Construction or demolition debris.".
SOURCE: Page 15, line 18; (07)MO172206.15. -->     Page 15, between lines 18 and 19, begin a new paragraph and insert:
SOURCE: ; (07)MO172206.21. -->     "SECTION 21. [EFFECTIVE JANUARY 1, 2008] (a)

IC 6-3.1-28-11, as amended by this act, applies to taxable years beginning after December 31, 2007.
    (b) IC 6-3.1-34, as added by this act, applies to taxable years beginning after December 31, 2007.
".
    Renumber all SECTIONS consecutively.
    (Reference is to EHB 1722 as printed March 16, 2007.)

________________________________________

Senator HERSHMAN


MO172206/DI 101
2007