AB 358

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

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

biomass heating system. Under the bill, for taxable years 2011 to 2016, a claimant

may claim a certain percentage of the amount the claimant pays for the purchase and

installation of a system in the claimant's primary residence or place of business.

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 limits the total amount of credits that may be claimed. The Department

of Revenue may prorate the amount of credits claimed to ensure these limitations are

not exceeded, and may allocate unused credits from one year to another year. A

business that is not able to totally offset the credit it is due against income or

franchise taxes otherwise owed may carry forward the credit for the following three

taxable years. A business that has more than $5,000,000 in gross receipts in the

taxable year may not claim the credit.

No new credits may be claimed for taxable years beginning after December 31,

2016.

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 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.