AB 794

This bill creates a nonrefundable individual income tax credit, and a corporate

income and franchise tax credit, for the purchase of a thermal biomass heating

system (system) and a similar nonrefundable credit for the purchase of biomass fuel

for such a system. Under the bill, a claimant may claim 100 percent of the cost the

claimant spends for the purchase and installation of a system in the claimant's

primary residence or place of business. A claimant may also claim a credit for 100

percent of the cost of fuel for a system that is installed in the claimant's primary

residence or place of business.

To be eligible for the credit, the system must comply with all state requirements

related to emissions of air contaminants, and the provisions of the federal Clean Air

Act, that apply to the system on the day it is purchased. The credit related to

purchasing a system, or fuel for the system, for an individual's primary residence

may not be claimed by a nonresident or part-year resident of the state. Because the

credit is nonrefundable, it may be claimed only up to the amount of a taxpayer's

income or franchise tax liability.

Under the bill, a system is defined as a stove, furnace, or boiler that generates

heat from biomass and provides an energy efficiency conversion of at least 75

percent. Subject to a number of exceptions, such as an exception for garbage and for

certain nonvegetation-based waste, biomass is defined under the bill as a resource

that derives energy from wood or plant material or residue, biological waste, crops

grown for use as such a resource, or landfill gases.

The bill also creates real and personal property tax exemptions for a system and

for facilities that are used to store fuel for such a system. Finally, the bill creates a

sales and use tax exemption for the purchase of a system, including accessories,

attachments, and repair parts.

Because this bill relates to an exemption from state or local taxes, it may be

referred to the Joint Survey Committee on Tax Exemptions for a report to be printed

as an appendix to the bill.