SF 3397

as introduced - 92nd Legislature (2021 - 2022) Posted on 03/17/2022 09:45am

A bill for an act
relating to taxation; individual income; providing a refundable credit for investments
in energy efficient home improvements, electric vehicles, and renewable energy;
appropriating money; 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 [290.0687] CLIMATE ACTION TAX CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For the purposes of this section, the terms in subdivisions
2 through 19 have the meanings given.
new text end

new text begin Subd. 2. new text end

new text begin Adjusted gross income. new text end

new text begin "Adjusted gross income" has the meaning given in
section 62 of the Internal Revenue Code.
new text end

new text begin Subd. 3. new text end

new text begin Air-source heat pump. new text end

new text begin "Air-source heat pump" means an Energy Star certified
mechanism that heats and cools indoor air by transferring heat from outdoors or indoors
using a fan, a refrigerant-filled heat exchanger, and an inverter-driven compressor that varies
the pressure of the refrigerant to warm or cool the refrigerant vapor.
new text end

new text begin Subd. 4. new text end

new text begin Climate action expenditure. new text end

new text begin "Climate action expenditure" means the sum of
the amount of qualifying appliance expenditures, qualifying energy efficiency measure
expenditures, and qualifying large improvement expenditures. When calculating this sum:
new text end

new text begin (1) only amounts not exceeding $1,000 in the aggregate for each expenditure category
are included; and
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new text begin (2) only amounts for qualifying appliance expenditures not exceeding the following
limits are included:
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new text begin (i) for an electric vehicle residential charger, the limit is $100;
new text end

new text begin (ii) for a heat pump water heater, the limit is $250;
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new text begin (iii) for an induction range, the limit is $200; and
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new text begin (iv) for a smart thermostat, the limit is $100.
new text end

new text begin Subd. 5. new text end

new text begin Ductless mini-split heat pump. new text end

new text begin "Ductless mini-split heat pump" means an
electric-powered Energy Star certified mechanism that provides space heating and cooling
to non-ducted residences and consists of: (1) an indoor unit containing an air handler that
circulates room air across refrigerant coils; and (2) an outdoor unit containing a compressor
that keeps coils hot or cold.
new text end

new text begin Subd. 6. new text end

new text begin Electric vehicle. new text end

new text begin "Electric vehicle" has the meaning given in section 169.011,
subdivision 26a, paragraph (a), and is also a passenger vehicle, as defined in section 169.011,
subdivision 52.
new text end

new text begin Subd. 7. new text end

new text begin Electric vehicle residential charger. new text end

new text begin "Electric vehicle residential charger"
means a Level 2 charger certified by Underwriters Laboratory that is installed in a residence
and that uses alternating current of at least 30 amps to transfer electricity to an electric
vehicle battery.
new text end

new text begin Subd. 8. new text end

new text begin Electrical service panel upgrade. new text end

new text begin "Electrical service panel upgrade" means
the installation of devices that increase the capacity of the electrical service panel in a
residence to 200 amps. For purposes of this subdivision, "electrical service panel" means
the central distribution point connecting the electric wires outside a residence and the internal
wires of the residence's electric network, consisting of a box containing electrical breaker
switches that distribute power throughout the residence.
new text end

new text begin Subd. 9. new text end

new text begin Energy efficiency measure. new text end

new text begin "Energy efficiency measure" means any insulation
material, system, or component that is specifically and primarily designed to reduce the
heat loss or gain of a residence in which it is installed.
new text end

new text begin Subd. 10. new text end

new text begin Energy storage system. new text end

new text begin "Energy storage system" has the meaning given in
section 216B.2422, subdivision 1, paragraph (f), clauses (1) and (2).
new text end

new text begin Subd. 11. new text end

new text begin Ground-source heat pump. new text end

new text begin "Ground-source heat pump" means an Energy
Star certified mechanism that provides space heating and cooling by means of: (1) a heat
exchanger composed of underground pipes containing a fluid; and (2) a heat pump that
transfers heat between the heat exchanger and the interior of a residence through ductwork.
new text end

new text begin Subd. 12. new text end

new text begin Heat pump water heater. new text end

new text begin "Heat pump water heater" means an Energy Star
certified water heater that uses a heat pump to transfer heat from surrounding air to water.
new text end

new text begin Subd. 13. new text end

new text begin Induction range. new text end

new text begin "Induction range" means a cooking surface that heats by
transferring currents from an electromagnetic field located below the glass surface directly
to the magnetic induction cookware placed above it.
new text end

new text begin Subd. 14. new text end

new text begin Photovoltaic device. new text end

new text begin "Photovoltaic device" has the meaning given in section
216C.06, subdivision 16.
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new text begin Subd. 15. new text end

new text begin Qualifying appliance expenditures. new text end

new text begin "Qualifying appliance expenditures"
means the sum of the amounts of the expenditures for the following appliances:
new text end

new text begin (1) electric vehicle residential charger;
new text end

new text begin (2) heat pump water heater;
new text end

new text begin (3) induction range; and
new text end

new text begin (4) smart thermostat.
new text end

new text begin Subd. 16. new text end

new text begin Qualifying energy efficiency measure expenditures. new text end

new text begin "Qualifying energy
efficiency measure expenditures" means the sum of the amounts of the expenditures for
energy efficiency measures.
new text end

new text begin Subd. 17. new text end

new text begin Qualifying large improvement expenditures. new text end

new text begin "Qualifying large improvement
expenditures" means the sum of the amount of the expenditures for the following large
improvements:
new text end

new text begin (1) air-source heat pump;
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new text begin (2) ductless mini-split heat pump;
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new text begin (3) electrical service panel upgrade;
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new text begin (4) electric vehicle;
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new text begin (5) energy storage system;
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new text begin (6) ground-source heat pump;
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new text begin (7) photovoltaic device; and
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new text begin (8) solar water heater.
new text end

new text begin Subd. 18. new text end

new text begin Smart thermostat. new text end

new text begin "Smart thermostat" means an Energy Star certified
Wi-Fi-enabled device with connected sensors that adjusts space heating and cooling
temperature settings in a residence for optimal performance.
new text end

new text begin Subd. 19. new text end

new text begin Solar water heater. new text end

new text begin "Solar water heater" means a device that collects the
sun's radiant energy, converts it to heat, and uses circulating pumps to pass the heat to a
water tank.
new text end

new text begin Subd. 20. new text end

new text begin Credit allowed; limitations. new text end

new text begin (a) An individual is allowed a credit against the
tax computed under this chapter for the taxable year equal to one-half of the amount of the
individual's climate action expenditure for an individual's residence, but not to exceed
$2,000.
new text end

new text begin (b) For a nonresident or a part-year resident, the credit must be allocated based on the
percentage calculated under section 290.06, subdivision 2c, paragraph (e).
new text end

new text begin (c) A taxpayer may claim any or all qualifying small appliance expenditures, qualifying
energy efficiency measure expenditures, or qualifying large improvement expenditures,
provided that the amount of each expenditure is only included once for purposes of
calculating the climate action expenditure.
new text end

new text begin (d) For a married individual filing a separate return, the calculation of the individual's
climate action expenditure under subdivision 4 does not include any expenditure used to
calculate the climate action expenditure for the individual's spouse.
new text end

new text begin Subd. 21. new text end

new text begin Credit to be refundable. new text end

new text begin If the amount of credit which a taxpayer who is a
resident or part-year resident of Minnesota is eligible to receive under this section exceeds
the taxpayer's tax liability under this chapter, the commissioner shall refund the excess to
the taxpayer. For nonresident taxpayers, the credit may not exceed the taxpayer's liability
for tax under this chapter.
new text end

new text begin Subd. 22. new text end

new text begin Phaseout. new text end

new text begin For married couples filing joint returns, the maximum credit is
reduced by $1 for every $30 of adjusted gross income in excess of $130,000. For all other
filers, the maximum credit is reduced by $1 for every $15 of adjusted gross income in excess
of $65,000. In no case is the maximum credit less than zero.
new text end

new text begin Subd. 23. new text end

new text begin Appropriation. new text end

new text begin An amount sufficient to pay the refunds required by this
section is appropriated to the commissioner from the general fund.
new text end

new text begin Subd. 24. new text end

new text begin Sunset. new text end

new text begin This section expires January 1, 2027, for taxable years beginning after
December 31, 2026, except that the expiration of this section does not affect the commissioner
of revenue's authority to audit or power of examination and assessment for credits claimed
under this subdivision.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2021.
new text end