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SB22-051

Policies To Reduce Emissions From Built Environment

Concerning policies to reduce emissions from the built environment.
Session:
2022 Regular Session
Subjects:
Fiscal Policy & Taxes
State Government
Bill Summary

The bill specifies that air-source and ground-source heat pump systems are household furnishings exempt from the levy and collection of property tax. The bill exempts air-source and ground-source heat pump systems from the definition of "fixtures" for property tax purposes.For income tax years beginning on or after January 1, 2023, but before January 1, 2033, any purchaser of an air-source heat pump system, ground-source heat pump system, water-source heat pump system, or variable refrigerant flow heat pump system (heat pump system) that installs a residential or commercial heat pump system or a residential or commercial heat pump water heater into real property in the state is allowed an income tax credit in an amount equal to 10% of the purchase price of the heat pump system or heat pump water heater.

For income tax years beginning on or after January 1, 2023, but before January 1, 2033, any purchaser of an energy storage system that installs the energy storage system in a residential dwelling in the state is allowed an income tax credit in an amount equal to 10% of the purchase price of the energy storage system.

For the heat pump system and heat pump water heater income tax credit and for the energy storage system income tax credit, the bill requires the purchaser to assign the income tax credit to the seller of the heat pump system, heat pump water heater, or energy storage system (seller) at the time of purchase, and the seller is required to compensate the purchaser for the full nominal value of the tax credit. The bill specifies the requirements of the purchaser, seller, and the department of revenue in connection with the assignment of either income tax credit.

Beginning July 1, 2024, the bill exempts from state sales and use tax all sales, storage, and use of eligible decarbonizing building materials. "Eligible decarbonizing building materials" are defined as building materials that have a maximum acceptable global warming potential as determined by the office of the state architect (office) and to be eligible for the sales and use tax exemption, such materials must be on a list of eligible materials maintained by the office. The bill allows manufacturers to submit the environmental product declaration of an eligible material to the office for the office's review. The office is required to compile a list of eligible materials and the manufacturers of those materials based on the information voluntarily submitted to the office by the manufacturers.

In addition, beginning January 1, 2023, the bill exempts from state sales and use tax all sales, storage, and use of air-source and ground-source heat pump systems or heat pump water heaters that are used in commercial or residential buildings. To be eligible for the sales and use tax exemption under certain circumstances, the purchaser of the heat pump system or heat pump water heater is required to certify that all necessary mechanical, plumbing, and electrical work performed in connection with the installation of the heat pump system or heat pump water heater will be performed by a certified contractor on a certified contractor list created pursuant to current law or by employees of a utility, subject to state licensing requirements and all applicable state and local rules, codes, and standards.Beginning January 1, 2023, the bill exempts from state sales and use tax all sales, storage, and use of energy storage systems that are used in a residential dwelling.

After January 1, 2023, an investor-owned gas utility may apply to the public utilities commission for approval to measure the amount of use for billing purposes in either fuel commodity units or for energy services provided. The public utilities commission is required to approve, deny, or modify the utility's application.

The bill specifies that a statutory town, city, or county may exempt the same items only by express inclusion of the exemption in its initial sales tax ordinance or resolution or by amendment thereto.

(Note: Italicized words indicate new material added to the original summary; dashes through words indicate deletions from the original summary.)


(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)

Status

Introduced
Passed
Became Law

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