GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2009
H 4
HOUSE BILL 1829*
Committee
Substitute Favorable 6/3/10
Third Edition Engrossed 6/9/10
Senate Finance Committee Substitute Adopted 6/29/10
|
Short Title: Renewable Energy Incentives. |
(Public) |
|
|
Sponsors: |
|
|
|
Referred to: |
|
|
May 20, 2010
A BILL TO BE ENTITLED
AN ACT to PROMOTE THE USE OF RENEWABLE ENERGY BY extending the credit for constructing renewable fuel FACILITIES and the credit for biodiesel producers, REVISING THE TAX CREDIT FOR INVESTING IN RENEWABLE ENERGY PROPERTY, REINSTATING and expanding THE TAX CREDIT FOR CONSTRUCTING A RENEWABLE ENERGY PROPERTY FACILITY, CLARIFYING THE AUTHORITY OF LOCAL GOVERNMENTS TO FINANCE ENERGY PROGRAMS, clarifying That real property donated for a conservation purpose can be used only for that purpose, and ensuring that homeowners ASSOCIATION restrictions do not prevent the use of solar energy systems.
The General Assembly of North Carolina enacts:
TO EXTEND THE CREDIT FOR CONSTRUCTING RENEWABLE FUEL FACILITIES AND THE CREDIT FOR BIODIESEL PRODUCERS
SECTION 1.(a) G.S. 105‑129.16D(d) reads as rewritten:
"§ 105‑129.16D. Credit for constructing renewable fuel facilities.
(d) Sunset. This section is repealed effective for
facilities placed in service on or after January 1, 2011.2013."
SECTION 1.(b) G.S. 105‑129.16F(b) reads as rewritten:
"§ 105‑129.16F. Credit for biodiesel producers.
(b) Sunset. This section is repealed for taxable
years beginning on or after January 1, 2010.2013."
CHANGES TO CREDIT FOR INVESTING IN RENEWABLE ENERGY PROPERTY
SECTION 2.(a) G.S. 105‑129.15 reads as rewritten:
"§ 105‑129.15. Definitions.
The following definitions apply in this Article:
(2) Cost. In the case of property owned by the
taxpayer, cost is determined pursuant to regulations adopted under section 1012
of the Code, subject to the limitation on cost provided in section 179 of the
Code. In the case of property the taxpayer leases from another, cost is value
as determined pursuant to G.S. 105‑130.4(j)(2).G.S. 105‑130.4(j)(2),
unless the property is renewable energy property for which the taxpayer claims either
a federal energy credit under section 48 of the Code or a federal grant in lieu
of that credit and makes a lease pass‑through election under the Code. In
this circumstance, the cost of the leased renewable energy property is the cost
determined under the Code.
(4b) Installation of renewable energy property. Renewable energy property that, standing alone or in combination with other machinery, equipment, or real property, is able to produce usable energy on its own.
...
(7) Renewable energy property. Any of the following machinery and equipment or real property:
a. Biomass equipment that uses renewable biomass resources for biofuel production of ethanol, methanol, and biodiesel; anaerobic biogas production of methane utilizing agricultural and animal waste or garbage; or commercial thermal or electrical generation. The term also includes related devices for converting, conditioning, and storing the liquid fuels, gas, and electricity produced with biomass equipment.
b. Combined heat and power system property. Defined in section 48 of the Code.
c. Geothermal equipment that meets either of the following descriptions:
1. It is a heat pump that uses the ground or groundwater as a thermal energy source to heat a structure or as a thermal energy sink to cool a structure.
2. It uses the internal heat of the earth as a substitute for traditional energy for water heating or active space heating or cooling.
b.d. Hydroelectric generators located at
existing dams or in free‑flowing waterways, and related devices for water
supply and control, and converting, conditioning, and storing the electricity
generated.
c.e. Solar energy equipment that uses
solar radiation as a substitute for traditional energy for water heating,
active space heating and cooling, passive heating, daylighting, generating
electricity, distillation, desalination, detoxification, or the production of
industrial or commercial process heat. The term also includes related devices
necessary for collecting, storing, exchanging, conditioning, or converting
solar energy to other useful forms of energy.
d.f. Wind equipment required to capture
and convert wind energy into electricity or mechanical power, and related
devices for converting, conditioning, and storing the electricity produced.produced
or relaying the electricity by cable from the turbine motor to the power grid.
e. Geothermal heat pumps that use the ground
or groundwater as a thermal energy source to heat a structure or as a thermal
energy sink to cool a structure.
f. Geothermal equipment that uses the
internal heat of the earth as a substitute for traditional energy for water
heating or active space heating and cooling."
SECTION 2.(b) G.S. 105‑129.16A reads as rewritten:
"§ 105‑129.16A. Credit for investing in renewable energy property.
(a) Credit. If a taxpayer that has constructed,
purchased, or leased renewable energy property places it in service in this
State during the taxable year, the taxpayer is allowed a credit equal to thirty‑five
percent (35%) of the cost of the property. In the case of renewable energy
property that serves a single‑family dwelling,nonbusiness
purpose, the credit must be taken for the taxable year in which the
property is placed in service. For all other renewable energy property, the
entire credit may not be taken for the taxable year in which the property is
placed in service but must be taken in five equal installments beginning with
the taxable year in which the property is placed in service. Upon request of
a taxpayer that leases renewable energy property, the lessor of the property
must give the taxpayer a statement that describes the renewable energy property
and states the cost of the property.
(b) Expiration. If, in one of the years in which the installment of a credit accrues, the renewable energy property with respect to which the credit was claimed is disposed of, taken out of service, or moved out of State, the credit expires and the taxpayer may not take any remaining installment of the credit. The taxpayer may, however, take the portion of an installment that accrued in a previous year and was carried forward to the extent permitted under G.S. 105‑129.17. No credit is allowed under this section to the extent the cost of the renewable energy property was provided by public funds.
(c) Ceilings. The credit allowed by this section may not exceed the applicable ceilings provided in this subsection.
(1) Nonresidential Property. Business.
A ceiling of two million five hundred thousand dollars ($2,500,000) per
installation applies to each installation of renewable energy
property placed in service for any purpose other than residential. a
business purpose. Renewable energy property is placed in service for a business
purpose if the useful energy generated by the property is offered for sale or is
used on‑site for a purpose other than providing energy to a residence.
(2) Residential Property.Nonbusiness.
The following ceilings apply to each installation of renewable energy
property placed in service for residential purposes: a nonbusiness
purpose. The ceiling applies to each residence:
a. One thousand four hundred dollars ($1,400) per
dwelling unit for solar energy equipment for domestic water heating,
including pool heating.
b. Three thousand five hundred dollars ($3,500) per
dwelling unit for solar energy equipment for active space heating, combined
active space and domestic hot water systems, and passive space heating.
c. Ten thousand five hundred dollars ($10,500) per
installation for any other renewable energy property for residential purposes.Eight
thousand four hundred dollars ($8,400) for geothermal equipment.
d. Eight thousand four hundred dollars ($8,400) per
installation for a geothermal heat pump or geothermal equipment.Ten
thousand five hundred dollars ($10,500) for any other renewable energy
property.
(d) No Double Credit. A taxpayer that claims any other credit allowed under this Chapter with respect to renewable energy property may not take the credit allowed in this section with respect to the same property. A taxpayer may not take the credit allowed in this section for renewable energy property the taxpayer leases from another unless the taxpayer obtains the lessor's written certification that the lessor will not claim a credit under this Chapter with respect to the property.
(e) Sunset. This section is repealed effective for renewable energy property placed into service on or after January 1, 2016."
SECTION 2.(c) G.S. 105‑259(b) is amended by adding the following new subdivision to read:
"(40) To furnish to a taxpayer claiming a credit under G.S. 105‑129.16A information used by the Secretary to adjust the amount of the credit claimed by the taxpayer."
SECTION 2.(d) This section is effective for taxable years beginning on or after January 1, 2010.
REINSTATE AND EXPAND CREDIT FOR A RENEWABLE ENERGY PROPERTY FACILITY
SECTION 3.(a) Article 3B of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105‑129.16I. Credit for a renewable energy property facility.
(a) Credit. A taxpayer that places in service in this State a commercial facility for the manufacture of renewable energy property or a major component subassembly for a solar array or a wind turbine is allowed a credit. A taxpayer places a facility in service if it constructs the facility or converts its existing manufacturing facility to change the product it manufactures. For a taxpayer that constructs a facility, the credit is twenty‑five percent (25%) of the taxpayer's cost to construct and equip the facility. For a taxpayer that converts a facility, the credit is twenty‑five percent (25%) of the taxpayer's cost to convert and equip the existing facility. A taxpayer that claims any other credit allowed under this Chapter with respect to the facility may not take the credit allowed in this section with respect to that facility.
(b) Installments. The entire credit may not be taken for the taxable year in which the facility is placed in service but must be taken in five equal annual installments beginning with the taxable year in which the facility is placed in service. If, in one of the years in which the installment of a credit accrues, the facility with respect to which the credit was claimed is disposed of or taken out of service, the credit expires and the taxpayer may not take any remaining installment of the credit. The taxpayer may, however, take the portion of an installment that accrued in a previous year and was carried forward to the extent permitted under G.S. 105‑129.17.
(c) Sunset. This section is repealed effective for a renewable energy property facility placed in service on or after January 1, 2014."
SECTION 3.(b) This section is effective for taxable years beginning on or after January 1, 2011.
CLARIFY LOCAL GOVERNMENT AUTHORITY TO FINANCE ENERGY PROGRAMS
SECTION 4.(a) G.S. 153A‑455 reads as rewritten:
"§ 153A‑455.
Revolving loan program for energyProgram to finance energy
improvements.
(a) Purpose. The General Assembly finds it is in the best interest of the citizens of North Carolina to promote and encourage renewable energy and energy efficiency within the State in order to conserve energy, promote economic competitiveness, and expand employment in the State. The General Assembly also finds that a county has an integral role in furthering this purpose by promoting and encouraging renewable energy and energy efficiency within the county's territorial jurisdiction. In furtherance of this purpose, a county may establish a program to finance the purchase and installation of distributed generation renewable energy sources or energy efficiency improvements that are permanently affixed to residential, commercial, or other real property.
(b) Revolving Loan Fund.Financing Assistance
A county may establish a revolving loan fund and a loan loss reserve fund for
the purpose of providing loans to financefinancing or assisting in
the financing of the purchase and installation of distributed generation
renewable energy sources or energy efficiency improvements that are permanently
fixed to residential, commercial, or other real property. A county may
establish other local government energy efficiency and distributed generation
renewable energy source finance programs funded through federal grants. A
county may use Energy Efficiency and Conservation Block Grant Funds State
and federal grants and loans and its unrestricted general revenue
to fund the revolving loan fund.for this financing. The annual
interest rate charged for the use of funds from the revolving fund may not
exceed eight percent (8%) per annum, excluding other fees for loan application
review and origination. The term of any loan originated under this section may
not be greater than 15 years.20 years.
(c) Definition. As used in this Article, "renewable energy source" has the same meaning as "renewable energy resource" in G.S. 62‑133.8."
SECTION 4.(b) G.S. 153A‑149(c) is amended by adding a new subdivision to read:
"(10c) Energy Financing. To provide financing for renewable energy and energy efficiency in accordance with a program established under G.S. 153A‑455."
SECTION 4.(c) G.S. 160A‑ 459.1 reads as rewritten:
"§ 160A‑459.1.
Revolving loan program for Program to finance energy
improvements.
(a) Purpose. The General Assembly finds it is in the best interest of the citizens of North Carolina to promote and encourage renewable energy and energy efficiency within the State in order to conserve energy, promote economic competitiveness, and expand employment in the State. The General Assembly also finds that a city has an integral role in furthering this purpose by promoting and encouraging renewable energy and energy efficiency within the city's territorial jurisdiction. In furtherance of this purpose, a city may establish a program to finance the purchase and installation of distributed generation renewable energy sources or energy efficiency improvements that are permanently affixed to residential, commercial, or other real property.
(b) Revolving Loan Fund Financing Assistance.
A city may establish a revolving loan fund and a loan loss reserve fund for
the purpose of providing loans to finance financing or assisting in
the financing of the purchase and installation of distributed generation
renewable energy sources or energy efficiency improvements that are permanently
fixed to residential, commercial, or other real property. A city may
establish other local government energy efficiency and distributed generation
renewable energy source finance programs funded through federal grants. A
city may use Energy Efficiency and Conservation Block Grant Funds State
and federal grants and loans and its unrestricted general revenue
to fund the revolving loan fund. for this financing. The annual
interest rate charged for the use of funds from the revolving fund may not
exceed eight percent (8%) per annum, excluding other fees for loan application
review and origination. The term of any loan originated under this section may
not be greater than 15 years.20 years.
(c) Definition. As used in this Article, "renewable energy source" has the same meaning as "renewable energy resource" in G.S. 62‑133.8."
SECTION 4.(d) G.S. 160A‑209(c) is amended by adding a new subdivision to read:
"(10b) Energy Financing. To provide financing for renewable energy and energy efficiency in accordance with a program established under G.S. 160A‑459.1."
CLARIFY THAT REAL PROPERTY DONATED FOR A CONSERVATION PURPOSE CAN BE USED ONLY FOR THAT PURPOSE
SECTION 5.(a) G.S. 105‑130.34(a) reads as rewritten:
"(a) Any C Corporation that makes a qualified
donation of an interest in real property located in North Carolina during the
taxable year that is useful for (i) public beach access or use, (ii) public
access to public waters or trails, (iii) fish and wildlife conservation, (iv)
forestland or farmland conservation, (v) watershed protection, (vi)
conservation of natural areas as that term is defined in G.S. 113A‑164.3(3),
(vii) conservation of natural or scenic river areas as those terms are used in G.S. 113A‑34,
(viii) conservation of predominantly natural parkland, or (ix) historic
landscape conservation is allowed a credit against the tax imposed by this Part
equal to twenty‑five percent (25%) of the fair market value of the
donated property interest. To be eligible for this credit, the interest in real
property must be donated in perpetuity to and accepted by for one of
the qualifying uses listed in this subsection and accepted in perpetuity for
the qualifying use for which the property is donated. The person to whom the
property is donated must be the State, a local government, or a body that
is both organized to receive and administer lands for conservation purposes and
qualified to receive charitable contributions pursuant to G.S. 105‑130.9.
Lands required to be dedicated pursuant to local governmental regulation or ordinance
and dedications made to increase building density levels permitted under a
regulation or ordinance are not eligible for this credit.
The credit allowed under this section for one or more qualified donations made in a taxable year may not exceed five hundred thousand dollars ($500,000). To support the credit allowed by this section, the taxpayer must file with the income tax return for the taxable year in which the credit is claimed the following:
(1) A certification by the Department of Environment and Natural Resources that the property donated is suitable for one or more of the valid public benefits set forth in this subsection.
(2) A self‑contained appraisal report or summary appraisal report as defined in Standards Rule 2‑2 in the latest edition of the Uniform Standards of Professional Appraisal Practice as promulgated by the Appraisal Foundation for the property. For fee simple absolute donations of real property, a taxpayer may submit documentation of the county's appraised value of the donated property, as adjusted by the sales assessment ratio, in lieu of an appraisal report."
SECTION 5.(b) G.S. 105‑151.12(a) reads as rewritten:
"(a) An individual or pass‑through entity
that makes a qualified donation of an interest in real property located in North
Carolina during the taxable year that is useful for (i) public beach access or
use, (ii) public access to public waters or trails, (iii) fish and wildlife
conservation, (iv) forestland or farmland conservation, (v) watershed
protection, (vi) conservation of natural areas as that term is defined in G.S. 113A‑164.3(3),
(vii) conservation of natural or scenic river areas as those terms are used in G.S. 113A‑34,
(viii) conservation of predominantly natural parkland, or (ix) historic
landscape conservation is allowed a credit against the tax imposed by this Part
equal to twenty‑five percent (25%) of the fair market value of the
donated property interest. To be eligible for this credit, the interest in
property must be donated in perpetuity to and accepted by for one of
the qualifying uses listed in this subsection and accepted in perpetuity for
the qualifying use for which the property is donated. The person to whom the
property is donated must be the State, a local government, or a body that
is both organized to receive and administer lands for conservation purposes and
qualified to receive charitable contributions under the Code. Lands required to
be dedicated pursuant to local governmental regulation or ordinance and
dedications made to increase building density levels permitted under a
regulation or ordinance are not eligible for this credit.
To support the credit allowed by this section, the taxpayer must file with the income tax return for the taxable year in which the credit is claimed the following:
(1) A certification by the Department of Environment and Natural Resources that the property donated is suitable for one or more of the valid public benefits set forth in this subsection. The certification for a qualified donation made by a pass‑through entity must be filed by the pass‑through entity.
(2) A self‑contained or summary appraisal report as defined in Standards Rule 2‑2 in the latest edition of the Uniform Standards of Professional Appraisal Practice as promulgated by the Appraisal Foundation for the property. For fee simple absolute donations of real property, a taxpayer may submit documentation of the county's appraised value of the donated property, as adjusted by the sales assessment ratio, in lieu of an appraisal report."
ENSURE THAT HOMEOWNERS ASSOCIATION RESTRICTIONS DO NOT PREVENT THE USE OF SOLAR ENERGY SYSTEMS
SECTION 6.(a) G.S. 22B‑20 reads as rewritten:
"§ 22B‑20. Deed restrictions and other agreements prohibiting solar collectors.
(a) The intent of the General Assembly is to protect the public health, safety, and welfare by encouraging the development and use of solar resources and by prohibiting deed restrictions, covenants, and other similar agreements that could have the ultimate effect of driving the costs of owning and maintaining a residence beyond the financial means of most owners.
(b) Except as provided in subsection (d) of this
section, anyA deed restriction, covenant, or similar binding
agreement that runs with the land that would prohibit, or have the effect of
prohibiting, the installation of a solar collector that gathers solar radiation
as a substitute for traditional energy for water heating, active space heating
and cooling, passive heating, or generating electricity for a residential
property on land subject to the deed restriction, covenant, or agreement is
void and unenforceable. As used in this section, the term "residential
property" means property where the predominant use is for residential
purposes. The term "residential property" does not include any
condominium created under Chapter 47A or 47C of the General Statutes located in
a multi‑story building containing units having horizontal boundaries
described in the declaration. As used in this section, the term "declaration"
has the same meaning as in G.S. 47A‑3 or G.S. 47C‑1‑103,
depending on the chapter of the General Statutes under which the condominium
was created.
(c) This section does not prohibit aA
deed restriction, covenant, or similar binding agreement that runs with the
land that would regulatemay not place unreasonable restrictions on
the location or screening of solar collectors as described in subsection (b) of
this section, provided the deed restriction, covenant, or similar binding
agreement does not have the effect of preventing the reasonable use of a solar
collector for a residential property. section. As used in this subsection,
"unreasonable restrictions" means any restriction that would increase
the installation costs of a solar collector by more than ten percent (10%) of
the total initial installation costs, including labor and equipment. If an
owners' association is responsible for exterior maintenance of a structure
containing individual residences, a deed restriction, covenant, or similar
binding agreement that runs with the land may provide that (i) the title owner
of the residence shall be responsible for all damages caused by the
installation, existence, or removal of solar collectors; (ii) the title owner
of the residence shall hold harmless and indemnify the owners' association for
any damages caused by the installation, existence, or removal of solar
collectors; and (iii) the owners' association shall not be responsible for
maintenance, repair, replacement, or removal of solar collectors unless
expressly agreed in a written agreement that is recorded in the office of the
register of deeds in the county or counties in which the property is situated.
As used in this section, "owners' association" has the same meaning
as in G.S. 47F‑1‑103.
(d) This section does not prohibit a deed
restriction, covenant, or similar binding agreement that runs with the land that
would prohibit the location of solar collectors as described in subsection (b)
of this section that are visible by a person on the ground:
(1) On the facade of a structure that faces
areas open to common or public access;
(2) On a roof surface that slopes downward
toward the same areas open to common or public access that the faηade of the
structure faces; or
(3) Within the area set off by a line running
across the faηade of the structure extending to the property boundaries on
either side of the faηade, and those areas of common or public access faced by
the structure.
(e) In any civil action arising under this section, the court may award costs and reasonable attorneys' fees to the prevailing party."
SECTION 6.(b) This section becomes effective December 1, 2010, and applies to deed restrictions, covenants, or similar binding agreements that run with the land and that are recorded on or after that date.
EFFECTIVE DATE
SECTION 7. Except as otherwise provided, this act is effective when it becomes law.