MISSISSIPPI LEGISLATURE
2007 Regular Session
To: Ways and Means
By: Representative Franks, Reeves, Rotenberry
AN ACT TO REQUIRE ANY MOTOR VEHICLES PURCHASED BY A STATE AGENCY, DEPARTMENT, INSTITUTION OR AGENCY TO MEET THE FEDERAL CORPORATE AVERAGE FUEL ECONOMY (CAFE) STANDARDS OR TO CONTAIN A HYBRID GAS-ELECTRIC MOTOR OR A MOTOR EQUIPPED FOR USING ALTERNATIVE FUELS; TO REQUIRE A STATE AGENCY, DEPARTMENT, INSTITUTION OR AGENCY TO PURCHASE A CERTAIN PERCENTAGE OF SUCH VEHICLES BY THE SCHEDULED TIME SPECIFIED IN THIS ACT; TO PROVIDE AN INCOME TAX CREDIT FOR CERTAIN TAXPAYERS WHO PURCHASE NEW HYBRID ELECTRIC VEHICLES; TO LIMIT THE AMOUNT OF THE TAX CREDIT TO FEDERAL LIMITS OR THE AMOUNT OF INCOME TAX IMPOSED UPON THE TAXPAYER FOR THE TAXABLE YEAR REDUCED BY THE SUM OF ALL OTHER CREDITS ALLOWABLE TO THE TAXPAYER UNDER THE STATE INCOME TAX LAWS; TO PROVIDE THAT ANY UNUSED PORTION OF THE TAX CREDIT MAY BE CARRIED FORWARD FOR THE NEXT FIVE SUCCEEDING TAX YEARS; TO PROVIDE INCOME TAX CREDITS TO THOSE WHO BUILD NEW BUILDINGS OR REHABILITATE OLD BUILDINGS IN ACCORDANCE WITH THE UNITED STATES GREEN BUILDING COUNCIL; TO CLARIFY THAT THE OFFICE OF THE ATTORNEY GENERAL IS TO MONITOR PETROLEUM BASED FUEL PRICES THROUGHOUT THE STATE; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. (1) Beginning July 1, 2007, any motor vehicle purchased or leased by any state department, institution or agency shall meet the federal Corporate Average Fuel Economy (CAFE) Standards or contain a hybrid motor powered by a combination of gasoline and electricity or a motor equipped for using an alternative fuel. For purposes of this section, the term "alternative fuel" means compressed natural gas, liquefied petroleum gas, reformulated gasoline, methanol, ethanol, electricity, and any other fuel which meet or exceed federal Clean Air Act standards.
(2) All state departments, institutions or agencies shall achieve the following percentages of replacement vehicles that exceed twenty-five (25) miles per gallon, contain a hybrid motor powered by a combination of gasoline and electricity, or a motor equipped for using alternative fuels, by the times specified:
(a) The percentage shall be equal to or greater than twenty percent (20%) of the number of the department's, institution's or agency's fleet vehicles operated by January 1, 2009.
(b) The percentage shall be equal to or greater than thirty percent (30%) of the number of the department's, institution's or agency's fleet vehicles operated by January 1, 2010.
(c) The percentage shall be equal to or greater that fifty percent (50%) of the number of the department's, institution's or agency's fleet vehicles operated by January 1, 2012.
(3) The State Auditor in its annual report to the Senate and House Conservation and Water Committees and the Joint Legislative Budget Committee shall show the progress in achieving the percentage requirements prescribed in paragraph (b).
SECTION 2. (1) For the purposes of this section, the term "hybrid electric vehicle" means a private carrier of passengers or light carrier of property, as defined in Section 27-51-101, that:
(a) Meets all applicable federal and state regulatory requirements;
(b) Meets the current vehicle exhaust standard set under the National Low-Emission Vehicle Program for gasoline powered passenger cars; and
(c) Draws propulsion energy from the following sources:
(i) An internal combustion engine or heat engine using any combustible fuel; and
(ii) An onboard rechargeable energy storage system.
(2) Subject to the provisions of this section, any taxpayer who purchases a new hybrid electric vehicle without the intent to resell the vehicle and who does not resell the vehicle within five (5) years from the date of purchase shall be entitled to a credit against the taxes imposed by this chapter in an amount equal to the amount established by federal law or the amount of income tax imposed upon the taxpayer for the taxable year reduced by the sum of all other credits allowable to the taxpayer under the state income tax laws, except credit for tax payments made by or on behalf of the taxpayer. In the case of married individuals filing separate returns, each person may claim an amount not to exceed one-half (1/2) of the tax credit that would have been allowed for a joint return. The tax credit is available only for the taxable year during which the hybrid electric vehicle was purchased, and a hybrid electric vehicle may qualify for the credit only one (1) time. To the extent that the allowable tax credit exceeds the amount of the taxpayer's liability for the taxable year, the unused portion of the tax credit may be carried forward for the next five (5) succeeding tax years until the full amount of the tax credit has been used.
(3) No person who receives a credit under the provisions of this section shall alter the vehicle for which a credit is received in any manner that changes the vehicle to such a condition that the vehicle is no longer a hybrid-electric vehicle.
SECTION 3. Section 2 of this act shall be codified as a separate section in Chapter 7, Title 27, Mississippi Code of 1972.
SECTION 4. (1) As used in this section, the following words shall have the meanings ascribed herein unless the context clearly requires otherwise:
(a) "Department" means the Department of Environmental Quality.
(b) (i) "Allowable costs" means amounts that are paid or incurred on or after July 1, 2007, for construction or rehabilitation, commissioning costs, interest paid or incurred during the construction or rehabilitation period, architectural, engineering or other fees able to be allocated to construction or rehabilitation, closing costs for construction, rehabilitation, or mortgage loans, recording taxes and filing fees incurred with respect to construction or rehabilitation, finishes and furnishings consistent with the regulations adopted by the department under this section, lighting, plumbing, electrical wiring, and ventilation.
(ii) "Allowable costs" does not include: the cost of telephone systems and computers, other than electrical wiring costs, legal fees allocable to construction or rehabilitation, site costs, including temporary electric wiring, scaffolding, demolition costs, and fencing and security facilities, finishes or furnishings that are not consistent with the regulations adopted by the department under this section, the cost of purchasing or installing fuel cells, wind turbines, or photovoltaic module.
(c) "Applicable energy efficiency standards" means ASHRAE/IESNA Standard 90.1-1999, Energy Standard for Buildings Except Low-Rise Residential Buildings, published by the American Society of Heating, Refrigerating and Air-Conditioning Engineers and the Leadership in Energy and Environmental Design (LEED) Green Building Rating System and any applicable standard established by the federal Department of Energy.
(d) "Base building" means all areas of a building not intended for occupancy by a tenant or owner, including the structural components of the building, exterior walls, floors, windows, roofs, foundations, chimneys and stacks, parking areas, mechanical rooms and mechanical systems, and owner-controlled or operated service spaces, sidewalks, main lobby, shafts and vertical transportation mechanisms, stairways, and corridors.
(e) "Commissioning" has the following meanings: (i) the testing and fine-tuning of heat, ventilating, and air-conditioning systems and other systems to assure proper functioning and adherence to design criteria; and (ii) the preparation of system operation manuals and instruction of maintenance personnel.
(f) "Credit allowance year" means the later of: (i) the taxable year during which the property, construction, completion, or rehabilitation on which the credit allowed under this section is based is originally placed in service; or a fuel cell, wind turbine, or photovoltaic module constitutes a qualifying alternate energy source and is fully operational; or the earliest taxable year for which the credit may be claimed under the initial credit certificate issued under subsection (k) of this section.
(g) "Eligible building" means a building located in the state that:
(i) Is a building used primarily for residential purposes;
(ii) 1. Is a building used primarily for nonresidential purposes if the building contains at least twenty thousand (20,000) square feet of interior space; or 2. Is a residential multifamily building with at least twelve (12) dwelling units that contains at least twenty thousand (20,000) square feet of interior space; or 3. Is any combination of buildings described in this subparagraph (g);
(iii) Is a newly constructed building for which a certificate of occupancy was not issued before the effective date of this act, and: 1. Is located on a qualified brownfields site, as defined under state law; 2. Is located in a priority funding area and is not located on wetlands, the alteration of which requires a permit under § 404 of the federal Clean Water Act, 33 USCS § 1344; or
(iv) Is a rehabilitated building that is not an increase of more than twenty-five percent (25%) in the square footage of the building, meet applicable energy efficiency standards.
(h) "Fuel cell" means a device that produces electricity directly from hydrogen or hydrocarbon fuel through a noncombustive electrochemical process.
(i) "Green base building" means a base building that is part of an eligible building and meets the requirements set out in this section.
(j) "Green whole building" means a building for which the base building is a green base building and all space is green space.
(k) "Green tenant space" means tenant space in a building if the building is an eligible building and the tenant space meets the requirements of this section.
(l) "Incremental cost of building-integrated photovoltaic modules" means:
(i) The cost of building-integrated photovoltaic modules and any associated inverter, additional wiring or other electrical equipment for the photovoltaic modules, or additional mounting or structural materials, less the cost of spandrel glass or other building material that would have been used if building-integrated photovoltaic modules were not installed;
(ii) Incremental labor costs properly allocable to on-site preparation, assembly, and original installation of photovoltaic modules; and
(iii) Incremental costs of architectural and engineering services and designs and plans directly related to the construction or installation of photovoltaic modules.
(m) "Qualifying alternate energy sources" means building-integrated and nonbuilding-integrated photovoltaic modules, wind turbines, and fuel cells installed to serve the base building or tenant space that:
(i) Have the capability to monitor their actual power output;
(ii) Are fully commissioned upon installation, and annually thereafter, to ensure that the systems meet their design specifications; and
(iii) In the case of wind turbines, meet any applicable noise ordinances.
(n) "Tenant improvements" means improvements that are necessary or appropriate to support or conduct the business of a tenant or occupying owner.
(o) "Tenant space" means the portion of a building intended for occupancy by a tenant or occupying owner.
(2) Credit authorized. (a) An individual or a corporation may claim a credit against the state income tax as provided under this section for green buildings and green building components.
(b) If the credit allowed under this section exceeds the state income tax, any unused credit may be carried forward and applied for succeeding taxable years until the earlier of:
(i) The full amount of the credit is used; or
(ii) The expiration of the tenth (10th) year after the taxable year for which the credit was allowed.
(c) For each of the credits under this section, the credit may not be allowed for any taxable year unless:
(i) The taxpayer has obtained and filed an initial credit certificate and an eligibility certificate issued under this section;
(ii) A certificate of occupancy for the building has been issued; and
(iii) The property with respect to which the credit is claimed is in service during the taxable year.
(d) The total amount allowed in the aggregate for all credits under this section may not exceed the maximum set forth in the initial credit certificate obtained under this section.
(e) In determining the amount of the credits under this section, a cost paid or incurred may not be the basis for more than one credit.
(3) Amount of credit - Green whole building. (a) For the taxable year that is the credit allowance year, an owner or tenant may claim a credit in an amount equal to ten percent (10%) of the allowable costs paid or incurred by the owner or tenant for the construction of a green whole building or the rehabilitation of a building that is not a green whole building to be a green whole building.
(b) The allowable costs used to determine the credit amount allowed under this subsection for a green whole building may not exceed in the aggregate:
(i) One Hundred Twenty Dollars ($120) per square foot for that portion of the building that comprises the base building; and
(ii) Sixty Dollars ($60) per square foot for that portion of the building that comprises the tenant space.
(4) Amount of credit - Green base building. (a) For the taxable year that is the credit allowance year, an owner may claim a credit in an amount equal to ten percent (10%) of the allowable costs paid or incurred by the owner for the construction of a green base building or the rehabilitation of a building that is not a green base building to be a green base building.
(b) The allowable costs used to determine the credit amount allowed under this subsection for a green base building may not exceed, in the aggregate, One Hundred Twenty Dollars ($120.00) per square foot.
(5) Amount of credit - Green tenant space. (a) For the taxable year that is the credit allowance year, an owner or tenant may claim a credit in an amount equal to six percent (6%) of the allowable costs for tenant improvements paid or incurred by the owner or tenant in the construction or completion of green tenant space or the rehabilitation of tenant space that is not green tenant space to be green tenant space.
(b) (i) The allowable costs used to determine the credit amount allowed under this subsection for green tenant space may not exceed, in the aggregate, Sixty Dollars ($60) per square foot.
(ii) If an owner and tenant both incur allowable costs for tenant improvements under this subsection and the costs exceed Sixty Dollars ($60) per square foot in the aggregate, the owner has priority as to costs constituting the basis for the green tenant space credit under this subsection.
(c) The credit under this subsection for green tenant space may not be claimed by an owner of a building that occupies fewer than ten thousand (10,000) square feet of the building.
(d) The credit under this subsection for green tenant space may not be claimed by a tenant that occupies fewer than five thousand (5,000) square feet.
(6) Amount of credit - Fuel cell. (a) For the taxable year that is the credit allowance year, an owner or tenant may claim a credit in the amount determined under this subsection for the installation of a fuel cell that is a qualifying alternate energy source and is installed to serve a green whole building, green base building, or green tenant space.
(b) The amount of the credit allowed under this subsection is twenty percent (20%) of the sum of the capitalized costs paid or incurred by an owner or tenant with respect to each fuel cell installed, including the cost of the foundation or platform and the labor costs associated with installation.
(c) The costs used to determine the credit amount allowed under this subsection for installation of a fuel cell:
(i) May not exceed One Thousand Dollars ($1,000) per kilowatt of installed DC rated capacity of the fuel cell; and
(ii) Shall be reduced by the amount of any federal, State, or local grant:
1. Received by the taxpayer and used for the purchase or installation of the fuel cell; and
2. Not included in the federal gross income of the taxpayer.
(7) Amount of credit - Photovoltaic modules. (a) For the taxable year that is the credit allowance year, an owner or tenant may claim a credit in the amount determined under this subsection for the installation of photovoltaic modules that constitute a qualifying alternate energy source and are installed to serve a green whole building, green base building, or green tenant space
(b) The amount of the credit allowed under this subsection is:
(i) Twenty percent (20%) of the incremental cost paid or incurred by an owner or tenant for building-integrated photovoltaic modules; and
(ii) Twenty-five (25%) of the cost of nonbuilding-integrated photovoltaic modules, including the cost of the foundation or platform and the labor costs associated with installation.
(c) The costs used to determine the credit amount allowed under this subsection for installation of photovoltaic modules:
(i) May not exceed the product obtained by multiplying Three Dollars ($3) times the number of watts included in the DC rated capacity of the photovoltaic modules; and
(ii) Shall be reduced by the amount of any federal, state, or local grant:
1. Received by the taxpayer and used for the purchase or installation of the photovoltaic equipment; and
2. Not included in the federal gross income of the taxpayer.
(d) A credit may not be claimed under this subsection for the installation of photovoltaic modules if the credit under subtitle is claimed with respect to the photovoltaic modules.
(8) Amount of credit - Wind turbine. (a) For the taxable year that is the credit allowance year, an owner or tenant may claim a credit in the amount determined under this subsection for the installation of a wind turbine that is a qualifying alternate energy source and is installed to serve a green whole building, green base building, or green tenant space.
(b) The amount of the credit allowed under this subsection is twenty-five percent (25%) of the sum of the capitalized costs paid or incurred by an owner or tenant with respect to each wind turbine installed, including the cost of the foundation or platform and the labor costs associated with installation.
(9) Regulations - Green base building. (a) By regulation, the department shall adopt applicable energy efficiency standards for a building to qualify as a green base building eligible for the tax credits under this section that are consistent with the criteria for green base buildings set forth by the United States Green Building Council or other similar criteria.
(b) The regulations adopted under this subsection shall provide that the energy use shall be no more than sixty-five percent (65%) for new construction of a base building, or seventy-five percent (75%) in the case of rehabilitation of a base building, of the energy use attributable to a reference building which meets the requirements of applicable energy efficiency standards.
(10) Regulations - Green tenant. (a) By regulation, the department shall adopt standards for tenant space to qualify as green tenant space eligible for the tax credits under this section that are consistent with the criteria for green tenant space set forth by the United States Green Building Council or other similar criteria.
(b) The regulations adopted under this subsection shall provide that the energy use shall be no more than sixty-five percent (65%) for new construction, or seventy-five percent (75%) in the case of rehabilitation, of the energy use attributable to a reference building which meets the requirements of applicable energy efficiency standards.
(11) Initial credit certificate; eligibility certificate; written report. (1) (a) On application by a taxpayer, the Department shall issue an initial credit certificate if the taxpayer has made a showing that the taxpayer is likely within a reasonable time to place in service property for which a credit under this section would be allowed.
(b) The initial credit certificate issued under this paragraph:
(i) Shall state the earliest taxable year for which the credit may be claimed and an expiration date; and
(ii) Shall apply only to property placed in service on or before the expiration date.
(c) To avoid unwarranted hardship, the Department at its discretion may extend the expiration date stated under an initial credit certificate.
(d) The initial credit certificate shall state the maximum amount of credit allowable in the aggregate for all credits allowed under this section.
(e) The department may not issue initial credit certificates during a state fiscal year, in the aggregate, for more than Twenty-five Million Dollars ($25,000,000) worth of credits.
(f) Except as otherwise provided in this section, initial credit certificates shall be limited in their applicability, as follows:
Credits in the aggregate may With respect to taxable
not
be allowed for more than: years beginning: $1 million 2006
$2 million
2007
$3 million
2008
$4 million
2009
$5 million
2010
$4 million
2011
$3 million
2012
$2 million
2013
$1 million
2014
(g) As of the end of a calendar year, if certificates for credit amounts totaling less than the amount permitted with respect to taxable years beginning in that calendar year have been issued, the maximum amount that may be allowed for taxable years beginning in the subsequent calendar year shall be increased by the amount of the preceding year's shortfall.
(h) The department may not issue an initial credit certificate after December 31, 2011.
(i) On January 1, 2008, and each year thereafter, the department shall provide to the Tax Commission a list of all taxpayers in the prior taxable year that have been issued an initial credit certificate and shall specify for each taxpayer the earliest taxable year for which the credit may be claimed and the maximum amount of the credit allowable in the aggregate for all credits allowed under this section.
(2) (a) For each taxable year for which a taxpayer claims a credit under this section with respect to a green whole building, green base building, green tenant space, fuel cell, photovoltaic module, or wind turbine, the taxpayer shall obtain an eligibility certificate from an architect or professional engineer licensed to practice in this state.
(b) An eligibility certificate issued under this paragraph shall consist of a certification, under the seal of the architect or engineer, that the property that is the basis for the credit that is claimed is in service and that:
(i) The building, base building, or tenant space with respect to which the credit is claimed is a green whole building, green base building, or green tenant space;
(ii) Any fuel cell, photovoltaic module, or wind turbine with respect to which the credit is claimed constitutes a qualifying alternate energy source and is fully operational;
(iii) The certification under subparagraph (ii) of this paragraph:
1. Shall be made in accordance with the regulations adopted by the department under this section specifying the standards and guidelines for each credit under this section; and
2. Shall set forth the specific findings on which the certification was based.
(iv) The taxpayer shall file the eligibility certificate and the associated initial credit certificate with the taxpayer's income tax return and shall file duplicate copies of the eligibility certificate with the department; and
(v) The eligibility certificate shall include:
1. Sufficient information to identify each building or space; and
2. Any other information that the department or the Tax Commission requires by regulation.
(3) If the department has reason to believe that an architect or professional engineer, in making any certification under this subsection, engaged in professional misconduct, the department shall inform the appropriate professional board of the suspected misconduct.
(4) (a) The department may adopt regulations necessary to carry out the provisions of this section.
(b) Regulations adopted under this section shall construe the provisions of this section in such a manner as to encourage the development of green whole buildings, green base buildings, and green tenant space and to maintain high, but commercially reasonable, standards for obtaining tax credits under this section.
(5) On or before April 1, 2008, the Tax Commission and the department, jointly and in consultation with the Department of the Environment, shall submit to the Legislature:
(a) The number of certifications and taxpayers claiming the credit under this section;
(b) The amount of the credits claimed;
(c) The geographical distribution of the credits claimed; and
(d) Any other available information the department determines to be meaningful and appropriate.
(6) The Tax Commission shall ensure that the information is presented and classified in a manner consistent with the confidentiality of tax return information.
SECTION 5. (1) The Legislature finds and determines that the petroleum industry is an essential element of the Mississippi economy and is therefore of vital importance to the health and welfare of all Mississippians.
The Legislature further finds and determines that a complete and thorough understanding of the operations of the petroleum industry is required by state government at all times to enable it to respond to possible shortages, oversupplies or other disruptions and to assess whether all consumers including emergency service agencies, state and local government agencies, and agricultural and business consumers of petroleum products have adequate and economic supplies of fuel.
(2) The Attorney General is authorized to monitor petroleum based fuel prices throughout the state, using the Oil Price Information Services (OPIS) or any other service, approved by the Attorney General, that monitors petroleum based fuel prices throughout the state. The Attorney General may promulgate such rules and regulations necessary to effectuate only his authority to monitor petroleum based fuel prices.
SECTION 6. Nothing in this act shall affect or defeat any claim, assessment, appeal, suit, right or cause of action for taxes due or accrued under the income tax laws before the date on which this act becomes effective, whether those claims, assessments, appeals, suits or actions have been begun before the date on which this act becomes effective or are begun after; and the provisions of the income tax laws are expressly continued in full force, effect and operation for the purpose of the assessment, collection and enrollment of liens for any taxes due or accrued and the execution of any warrant under those laws before the date on which this act becomes effective, and for the imposition of any penalties, forfeitures or claims for failure to comply with those laws.
SECTION 7. This act shall take effect and be in force from and after July 1, 2007.