H. B. 2776
(By Delegates Manypenny, Martin, Ferro and Hartman)
[Introduced January 24, 2011; referred to the
Committee on Energy, Industry and Labor, Economic Development and Small Business then Finance.]
A BILL to amend and reenact §11-13Z-3 of the Code of West Virginia, 1931, as amended; and to amend said code by adding thereto a new article, designated §11-13BB-1, §11-13BB-2, §11-13BB-3 and §11-13BB-4, all relating to creating a tax credit for residential renewable energy systems; defining terms; providing amount of the credit; providing limitations and requiring the Tax Commissioner to promulgate rules for claiming and applying the tax credit; and changing the duration of the residential solar energy tax credit.
Be it enacted by the Legislature of West Virginia:
That §11-13Z-3 of the Code of West Virginia, 1931, as amended, be amended and reenacted; and that said code be amended by adding thereto a new article, designated §11-13BB-1, §11-13BB-2, §11-13BB-3 and §11-13BB-4, all to read as follows:
ARTICLE 13Z. RESIDENTIAL SOLAR ENERGY TAX CREDIT.
§11-13Z-3. Carryover credit allowed; Tax Commissioner to promulgate rules.
If the amount of the credit exceeds the taxpayer’s liability for the taxable year, the amount which exceeds the tax liability may be carried over and applied as a credit against the tax liability of the taxpayer pursuant to the provisions of article twenty-one of this chapter to each of the next taxable years unless sooner used.
The State Tax Commissioner shall promulgate legislative rules pursuant to the provisions of chapter twenty-nine-a of this code regarding the applicability, method of claiming of the credit, recapture of the credit and documentation necessary to claim the credit allowed by this article. No A taxpayer shall may not take a credit pursuant to this article for a solar energy system installed after July 1, 2013 June 30, 2011.
ARTICLE 13BB. RESIDENTIAL RENEWABLE ENERGY SYSTEMS TAX CREDIT.
As used in this article, the following terms have the meaning ascribed to them in this section:
(1) "Active solar system" means a system of equipment capable of collecting and converting incident solar radiation into thermal, mechanical, or electrical energy, and transferring these forms of energy by a separate apparatus to storage or to the point of use; and includes water heating, space heating or cooling, and electrical or mechanical energy generation.
(2) “Biomass energy” means any of the following that is used as the primary source of energy to produce fuel or electricity:
(A) Material from a plant or tree; or
(B) Other organic matter that is available on a renewable basis, including:
(i) Slash and brush from forests and woodlands;
(ii) Animal waste;
(iii) Methane produced at landfills or as a byproduct of the treatment of wastewater residuals;
(iv) Aquatic plants; and
(v) Agricultural products.
"Biomass energy" does not include black liquor, treated woods or biomass from municipal solid waste other than methane produced at landfills or as a byproduct of the treatment of wastewater residuals.
(3) "Biomass system" means any system of apparatus and equipment for use in converting material into biomass energy, as defined in subdivision(2) of this subsection, and transporting that energy by separate apparatus to the point of use or storage.
(4) "Direct-use geothermal system" means a system of apparatus and equipment enabling the direct use of geothermal energy, generally between 100 and 300 degrees Fahrenheit, that is contained in the earth to meet energy needs, including heating a building, an industrial process and aquaculture.
(5) "Geothermal energy" means energy contained in heat that continuously flows outward from the earth that is used as a sole source of energy to produce electricity.
(6) "Geothermal heat-pump system" means a system of apparatus and equipment enabling the use of thermal properties contained in the earth at temperatures well below 100 degrees Fahrenheit to help meet heating and cooling needs of a structure.
(7) "Hydroenergy system" means a system of apparatus and equipment capable of intercepting and converting kinetic water energy into electrical or mechanical energy and transferring this form of energy by separate apparatus to the point of use or storage.
(8) "Passive solar system" means a direct thermal system that utilizes the structure of a building and its operable components to provide for collection, storage, and distribution of heating or cooling during the appropriate times of the year by utilizing the climate resources available at the site. The term includes those portions and components of a building that are expressly designed and required for the collection, storage, and distribution of solar energy.
(9) “Renewable energy resource” includes solar energy, biomass energy, geothermal energy, hydroenergy and wind energy.
(10) "Residential renewable energy system" means any active solar system, passive solar system, biomass system, direct-use geothermal system, geothermal heat-pump system, wind system or hydroenergy system used to supply energy to or for any residential unit.
(11) “Wind system" means a system of apparatus and equipment capable of intercepting and converting wind energy into mechanical or electrical energy and transferring these forms of energy by a separate apparatus to the point of use or storage.
§11-13BB-2. Amount of credit.
Any taxpayer who installs or causes to be installed a residential renewable energy system on property located in this state and owned by the taxpayer and used as a residence after July 1, 2011, is allowed a credit against the taxes imposed in article twenty-one of this chapter in an amount equal to twenty-five percent of the cost to purchase and install the system up to a maximum amount of $3,000.
In order to receive the credit for a residential renewable energy system on residential property, the system must use a renewable energy resource to:
(1) Generate electricity;
(2) Heat or cool a structure; or
(3) Provide hot water for use in the structure or to provide solar process heat. The system used to provide hot water must derive at least fifty percent of its energy to heat or cool from a renewable energy resource. This subsection does not apply to a swimming pool, hot tub or any other energy storage medium that has a function other than storage.
§11-13BB-4. Credit to be apportioned over five-year period; carryover credit allowed; Tax Commissioner to promulgate rules.
(a) The credit against tax provided in this article may be taken by a taxpayer claiming the credit only in five equal increments over a five-consecutive tax-year period, so that in any tax year in which a taxpayer is entitled to the credit, only one fifth of the total credit allowed for a residential renewable energy system under section two may be taken.
(b) The State Tax Commissioner shall promulgate legislative rules pursuant to the provisions of chapter twenty-nine-a of this code regarding the applicability, method of claiming the credit, recapture of the credit and documentation necessary to claim the credit allowed by this article.
(c) A taxpayer may not take a credit pursuant to this article for a residential renewable energy system installed after June 30, 2015.
NOTE: The purpose of this bill is to create a tax credit for residential renewable energy systems. This bill also changes the duration of the residential solar energy tax credit, as the credit created by this bill applies to several types of residential renewable energy systems, including solar systems.
Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.
§11-13BB is a new article; therefore, it has been completely underscored.