SF 1788

as introduced - 90th Legislature (2017 - 2018) Posted on 03/07/2017 09:19am

A bill for an act
relating to taxation; income and corporate franchise; providing a credit for combined
heat and power systems and expander generators; proposing coding for new law
in Minnesota Statutes, chapter 290.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [290.0682] COMBINED HEAT AND POWER AND EXPANDER
GENERATOR CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Credit allowed; limitation; definition. new text end

new text begin (a) A taxpayer is allowed a credit
against the tax imposed under this chapter equal to 50 percent of the total installed cost of:
new text end

new text begin (1) an eligible combined heat and power system; and
new text end

new text begin (2) an eligible expander generator system.
new text end

new text begin (b) For purposes of this section, "eligible combined heat and power system" means a
system that:
new text end

new text begin (1) uses the same energy source for the simultaneous or sequential generation of electrical
power, mechanical shaft power, or both, in combination with the generation of steam or
other forms of useful thermal energy, including for industrial process applications, which
produces at least 20 percent of its total useful energy in the form of thermal energy which
is not used to produce electrical or mechanical power, or combination thereof, and at least
20 percent of its total useful energy in the form of electrical or mechanical power, or
combination thereof, with a system energy efficiency percentage of at least 60 percent;
new text end

new text begin (2) has a nameplate output of no less than one megawatt and no more than 26 megawatts;
new text end

new text begin (3) is located in Minnesota; and
new text end

new text begin (4) is installed after December 31, 2015, and before January 1, 2026.
new text end

new text begin (c) For purposes of this section, "eligible expander generator system" means a system
that:
new text end

new text begin (1) uses a gaseous flow, pressure drop, or both, for generation of electrical power,
mechanical shaft power, or both, or other forms of useful thermal energy, including for
industrial process applications, with a system efficiency of at least 60 percent;
new text end

new text begin (2) has a nameplate output of no less than 250 kilowatts and no more than 26 megawatts;
new text end

new text begin (3) is located in Minnesota;
new text end

new text begin (4) is installed after December 31, 2015, and before January 1, 2026.
new text end

new text begin (d) The total credit allowed under this section for any taxable year cannot exceed the
taxpayer's tax liability for tax imposed under this chapter. However, if the credit is created
by a pass-through entity, the limitation is applied to the partner, member, shareholder, or
owner's tax liability consistent with paragraph (e).
new text end

new text begin (e) Credits claimed by a partnership, a limited liability company taxed as a partnership,
S corporation, or multiple owners of property are passed through to the partners, members,
shareholders, or owners, respectively, pro rata to each partner, member, shareholder, or
owner based on the partner's, member's, shareholder's, or owner's share of the entity's assets
or as specially allocated in the organizational documents as of the last day of the taxable
year in which the eligibility statement was issued.
new text end

new text begin (f) If the taxpayer is a cooperative, the credit must be allocated between the patrons and
the cooperative as declared by the cooperative. This declaration is due to the patrons of the
cooperative by the 15th day of the ninth month following the close of the cooperative's
taxable year. If no such allocation is made for any taxable year, the credit shall be allocated
100 percent to the cooperative for that year. The limitation in paragraph (d) is applied at
each of the credit recipient's level for their allocated credit.
new text end

new text begin Subd. 2. new text end

new text begin Certification. new text end

new text begin A taxpayer claiming the credit under this section must certify
to the commissioner the installation date, total installed cost, and nameplate output of the
eligible combined heat and power system or eligible expander generator system.
new text end

new text begin Subd. 3. new text end

new text begin Carryover. new text end

new text begin If the amount of the credit determined under this section for any
taxable year exceeds the taxpayer's liability for tax under this chapter, the excess shall be
a credit carryover to each of the ten succeeding taxable years. In no case may the credit
carryover exceed the taxpayer's liability for tax in any taxable year. The entire amount of
the excess unused credit for the taxable year shall be carried first to the earliest of the taxable
years to which the credit may be carried and then to each successive year to which the credit
may be carried. Taxpayers with credit carryover must certify to the commissioner the ongoing
operation of the eligible combined heat and power system to be eligible to claim a credit
carryover.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2016, and before January 1, 2026.
new text end