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State Tax Credits News Briefs - June 2011

The California Senate passed a bill that would require a seven-year sunset provision and specific objectives to be included in any bill enacting a new tax credit in 2012. In addition, under S.B. 508, any bill that enacts a credit against the personal income tax law would have to contain information that the Legislature could use to monitor the program, such as specific purposes and goals, detailed performance indicators and data collection requirements. An identical bill was introduced in the previous legislative session but was vetoed by then-Gov. Arnold Schwarzenegger. S.B. 508 moved to the Assembly in April.

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California Insurance Commissioner Dave Jones announced $11 million in new insurance company investments in the community development financial institution (CDFI) tax credit program under the California Organized Insurance Network (COIN), which benefits the state's underserved communities. The investments of $7 million from Farmer's Insurance Exchange, $2 million from Pacific Life Insurance Company and $2 million from State Farm Mutual Automobile Insurance Company were made to Impact Community Capital LLC. In exchange for an $11 million, zero interest, five-year loan, the insurance companies will share a 20 percent tax credit of $2.2 million. The program is scheduled to sunset in 2012; however, recently introduced legislation, Assembly Bill 624, seeks to extend that date. See the April 2011 Novogradac Journal of Tax Credits for more details about California's CDFI tax credit program.

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Iowa's Legislature is considering legislation to establish a $5 million redevelopment tax credit program for brownfield and grayfield sites. S.F. 514 would allow developers of grayfield sites to claim a tax credit of as much as 15 percent of eligible development costs if energy conservation measures are implemented. For brownfield sites, developers would be eligible for as much as 34 percent. If passed, the bill's provisions would take effect retroactively from January 2011.

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Joule Unlimited Inc. secured $19 million in state tax incentives and a 1,200-acre site in Lea County, New Mexico for the production of diesel and ethanol fuel directly from sunlight and waste carbon dioxide. New Mexico's Legislature voted to amend the state's Advanced Energy Manufacturing Tax Credit Act to help companies with breakthrough processes like Joule's qualify. The company uses genetically engineered, photosynthetic microorganisms to produce renewable fuel and plans to use the incentives to facilitate commercial-scale operations. At full-scale production, Joule expects to deliver ethanol for as little as 60 cents a gallon.

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DataScan Technologies in Alpharetta, Ga. has completed its new 202-kilowatt rooftop solar array, the second largest commercial location in Georgia and the largest of any data center in the state, the company said. The array is capable of generating approximately 285,500 kilowatt-hours of electricity annually. The project benefitted from the state renewable energy tax credit program, which has been extended through 2014. The enacting legislation, signed by Gov. Nathan Deal in May, also doubled the annual credit ceiling to $5 million beginning in 2012. See a copy of the extension bill, H.B. 346, at www.energytaxcredits.com.

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A tax reform package proposed by Gov. Rick Snyder has passed in the Michigan Legislature. The tax reform bill s part of Snyder's plan to close a $1.4 billion budget deficit, in part by eliminating business and personal tax credits. The proposal was opposed by the historic preservation community, which urged the Legislature to preserve historic and brownfield tax credits because of their role in leveraging private investment to revitalize communities and stimulate local economies.

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Vince Lintz is the new executive director of Preservation Iowa. Lintz has more than 30 years of experience promoting affordable housing, community betterment and economic development. His responsibilities will include implementing Preservation Iowa's programs, with an emphasis on promotion and development of the new Main Street Development Loan program.

Journal Category:

State Tax Credits

Authors:

Novogradac

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