HF 1923

as introduced - 90th Legislature (2017 - 2018) Posted on 03/27/2017 11:42am

A bill for an act
relating to taxation; income; providing a credit for the purchase and installation
of solar energy systems; proposing coding for new law in Minnesota Statutes,
chapter 290.

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

Section 1.

[290.0693] SOLAR ENERGY SYSTEM CREDIT.

Subdivision 1.

Definitions.

(a) For purposes of this section, the following terms have
the meanings given.

(b) "Business property" means class 3a property, as defined in section 273.13, subdivision
24.

(c) "Homestead" means class 1a and 1b residential property, as defined in section 273.13,
subdivision 22, or an agricultural homestead, as defined in section 273.13, subdivision 23.

(d) "Photovoltaic device" has the meaning given in section 216C.06, subdivision 16.

(e) "Solar energy system" means a photovoltaic device, a solar water heater, or a solar
thermal system.

(f) "Solar thermal system" has the meaning given in section 216C.06, subdivision 17.

(g) "Solar water heater" means an active, closed-loop system that pumps a nonfreezing
heat-transfer fluid through a flat-plate collector that collects solar energy and a heat exchanger
to heat water.

Subd. 2.

Credit allowed; limitation.

(a) A taxpayer receiving electric service at retail
from a municipal utility or a cooperative electric association that meets the requirements
of paragraph (g) and who purchases and places in service in this state a solar energy system
during the taxable year is eligible for a credit against the tax due under this chapter equal
to the lesser of the applicable percentage of the solar energy system's purchase and installation
costs or the maximum allowable credit.

(b) For solar energy systems first placed into service:

(1) after December 31, 2016, and before January 1, 2020, the applicable percentage is
15 percent;

(2) after December 31, 2019, and before January 1, 2021, the applicable percentage is
13 percent; and

(3) after December 31, 2020, and before January 1, 2023, the applicable percentage is
11 percent.

(c) The maximum allowable credit is $5,000 for solar energy systems installed on the
site of a taxpayer's homestead, and $20,000 for solar energy systems installed on each
business property.

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

(e) If the amount of the credit under this section for any taxable year exceeds the tax
due under this chapter, the excess is a credit carryover to each of the ten succeeding taxable
years. The entire amount of the excess unused credit for the taxable year must be carried
first to the earliest of the taxable years to which the credit may be carried. The amount of
the unused credit that may be added under this paragraph may not exceed the taxpayer's
liability for tax, less the credit for the taxable year.

(f) Credits granted to a partnership, a limited liability company taxed as a partnership,
an 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 their share of the entity's assets or as specially allocated in their
organizational documents or any other executed agreement, as of the last day of the taxable
year.

(g) A taxpayer receiving electric service at retail from a cooperative electric association
is eligible to receive a tax credit under this section only if the cooperative electric association
is subject to section 216B.164, subdivision 3, paragraph (a).

Subd. 3.

Application.

(a) A taxpayer must apply for the credit in a form and manner
prescribed by the commissioner. The application for 2017 must be made available on the
department's Web site by August 1, 2017. Applications for subsequent years must be made
available on the department's Web site by November 1 of the preceding year. An individual
cannot file an application until the solar energy system has been installed. A business cannot
file an application until the solar energy system has been placed in service.

(b) A taxpayer may apply separately to receive a credit for solar energy systems installed
on the taxpayer's homestead and on business property owned by the taxpayer.

(c) A taxpayer may apply separately to receive a credit for solar energy systems installed
on multiple business properties owned by the taxpayer.

Subd. 4.

Certificates; limitations.

(a) The commissioner shall issue credit certificates
on a first-come, first-served basis to taxpayers who submit applications that meet the
requirements of this section.

(b) The commissioner may not issue more than $5,000,000 in credit for any taxable
year, at least $2,500,000 of which is reserved for the installation of solar energy systems
on the site of taxpayers' homesteads.

(c) If any portion of a taxable year's credits is not allocated by September 30 of the
taxable year, the remaining amount is available beginning on October 1 for all claims for
installations of solar energy systems.

(d) Any amount of a taxable year's credits not allocated by December 31 of the taxable
year is available for the following taxable year in addition to the amount available under
paragraph (a).

EFFECTIVE DATE.

This section is effective for taxable years beginning after December
31, 2016.