House Bill 2200 History
Key: Green = existing Code. Red = new code to be enacted
H. B. 2200
(By Delegates Ashley and Manchin)
[Introduced February 13, 2013; referred to the
Committee on Finance.]
A BILL to amend the Code of West Virginia, 1931, as amended, by
adding thereto a new article, designated §11-13DD-1,
§11-13DD-2, §11-13DD-3, §11-13DD-4, §11-13DD-5, §11-13DD-6,
§11-13DD-7, §11-13DD-8, §11-13DD-9, §11-13DD-10, §11-13DD-11,
§11-13DD-12 and §11-13DD-13, all relating to authorizing a tax
credit against business franchise tax, corporate net income
tax or personal income tax for eligible expenditures incurred
in placing in service a residential or nonresidential
energy-efficient building; defining terms; establishing the
amount of tax credit permitted; authorizing rulemaking; and
requiring reports to be made.
Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended
by adding thereto a new article, designated §11-13DD-1, §11-13DD-2,
§11-13DD-3, §11-13DD-4, §11-13DD-5, §11-13DD-6, §11-13DD-7, §11-13DD-8, §11-13DD-9, §11-13DD-10, §11-13DD-11, §11-13DD-12 and
§11-13DD-13, all to read as follows:
ARTICLE 13DD. ENERGY EFFICIENT BUILDING PROPERTY TAX CREDIT.
§11-13DD-1. Short title.
_____This article may be cited as the "Energy Efficient Building
§11-13DD-2. Legislative finding and purpose.
_____The Legislature finds that encouraging the construction and
rehabilitation of energy efficient buildings is in the public
interest and promotes the general welfare of the people of this
state. It contributes to economic growth and, in time, will
improve environmental quality in the state by decreasing discharge
of pollutants from buildings, improving energy efficiency and
reducing greenhouse gas emissions. To accomplish these ends, there
is enacted the energy efficient building tax credit.
_____(a) General. -- When used in this article, or in the
administration of this article, terms defined in subsection (b)
have the meanings ascribed to them by this section.
_____(b) Terms defined. --
_____(1) "Environmental Protection Agency" means the United States
Environmental Protection Agency.
_____(2) "Designed to Earn the Energy Star®" means a designation given by the Environmental Protection Agency as part of the Energy
Star® program to identify plans for the construction of residential
or nonresidential buildings that incorporate energy-efficient
details and specifications typically found in Energy Star®
_____(3) "Eligible buildings" means energy efficient residential or
nonresidential building property to which the Environmental
Protection Agency has awarded an Energy Star® label.
_____(4) "Eligible expenditures" means expenses incurred on or
after July 1, 2013, for the planning, construction or
rehabilitation of energy efficient residential or nonresidential
building property. Eligible expenditures do not include:
_____(A) Legal fees related to construction or remodeling;
_____(B) Site purchase or preparation costs;
_____(C) Interest related to construction or remodeling;
_____(D) Architectural, engineering and other professional fees
related to construction or remodeling;
_____(E) Closing costs related to construction or remodeling; and
_____(F) Costs related to issuance, or procurement of loans, bond
issuances or costs of capital or related administrative expenses.
_____(5) "Eligible building plans" means plans for the construction
of residential or nonresidential buildings that incorporate
energy-efficient details and specifications typically found in
Energy Star® qualified buildings that have earned the Designed to Earn the Energy Star® label under the Energy Star® program.
_____(6) "Eligible taxpayer" means the owner of a residential or
commercial building property to which the Environmental Protection
Agency has awarded an Energy Star® label, or the owner of building
plans which have earned the Designed to Earn the Energy Star® label
by the Energy Star® program.
_____(7) "Energy efficient residential or nonresidential building"
means a residential or nonresidential building constructed using
_____(A) Which are installed on or in the building which is:
_____(i) Located in West Virginia; and
_____(ii) Within the scope of the Energy Star® performance ratings
system used in the Energy Star® program established by 42 U.S.C.
_____(B) Which are installed as part of:
_____(i) The interior lighting systems;
_____(ii) The heating, cooling, ventilation, and hot water systems;
_____(iii) The building envelope.
_____(C) To which the Administrator of the Environmental Protection
Agency has awarded an Energy Star® label for energy efficient
buildings and manufacturing plants in accordance with the
requirements and procedures established by the Environmental
Protection Agency under the Energy Star® program.
_____(8) "Energy Star® label" means, in the context of buildings,
a designation given by the Environmental Protection Agency as part
of the Energy Star® program to identify residential and
nonresidential buildings that meet Environmental Protection Agency
strict energy efficiency guidelines.
_____(9) "Energy Star® program" means a joint voluntary program
established within the United States Department of Energy and the
Environmental Protection Agency to identify and promote
energy-efficient products and buildings in order to reduce energy
consumption, improve energy security, and reduce pollution through
voluntary labeling of, or other forms of communication about,
products and buildings that meet the highest energy conservation
_____(10) "Energy Star® performance ratings system" means the
ratings system used by the Environmental Protection Agency in the
Energy Star® program for buildings and manufacturing plants to
award the Energy Star® label.
_____(11) "Placed in service" means the eligible building is placed
in a condition or state of readiness and availability for use as a
residential or nonresidential building.
_____(12) "Tax Commissioner" means the appointed official, or his
or her designee, charged with administering the State Tax Division
of the Department of Revenue.
§11-13DD-4. Amount of credit allowed.
_____(a) Credit allowed. --
_____(1) Eligible taxpayers are allowed a credit against the taxes
imposed by articles twenty-three, twenty-four and twenty-one of
this chapter, in that order, for owning a residential or commercial
building to which the Environmental Protection Agency has awarded
an Energy Star® label, or owning building plans which have earned
the Designed to Earn the Energy Star® label: Provided, That if a
tax credit is allowed and the structure is sold, the remaining tax
credit is available to the subsequent purchaser.
_____(2) Taxpayers who have taken the credit based on ownership of
eligible building plans shall complete construction of the eligible
building and obtain Energy Star® certification for the completed
building within four years from the time the credit was initially
taken. If the building fails to obtain Energy Star® certification
by the end of year four, the credit allowed under this article is
disallowed and the taxpayer shall file amended returns for the
first, second and third taxable years.
_____(b) Application for credit required. --
_____(1) Application required. -- Notwithstanding any provision of
this article to the contrary, no credit is allowed or may be
applied under this article for any Energy Star® eligible building
placed in service or use or for any Designed to Earn the Energy
Star® building plans until the eligible taxpayer claiming the
credit makes written application to the Tax Commissioner for allowance of credit as provided in this subsection. This
application shall be in the form prescribed by the Tax
Commissioner, and shall be filed with the Tax Commissioner no later
than the last day for filing the annual return, determined by
including any authorized extension of time for filing the return,
required under article twenty-one or twenty-four of this chapter
for the taxable year in which the property to which the credit
relates is placed in service or use.
_____(2) Failure to file. -- The failure to timely file the
application for credit under this section results in forfeiture of
fifty percent of the annual credit otherwise allowable under this
article. This penalty applies annually until the application is
_____(c) Amount of credit allowed.--
_____The amount of credit allowed by subsection (a) of this section
is the greater of:
_____(1) One and one-half percent of eligible expenditures; or
_____(2) One dollar per square foot of the eligible building as
constructed or as designed and portrayed on the building plan.
_____(d) Annual aggregate limit on total credits allowed under
article.-- The total amount of energy efficient building property
tax credits for all taxpayers pursuant to this section may not
exceed $1,000,000 each calendar year. The credits are allowed on
a first come, first served basis.
§11-13DD-5. Application of credit.
_____(a) Application of credit over ten years. -- The amount of
credit allowable must be taken over a ten-year period, at the rate
of one tenth of the amount thereof per taxable year, beginning with
the taxable year in which the taxpayer places the eligible building
in service or use in this state: Provided, That the taxpayer may
elect to delay the beginning of the ten-year period until the next
succeeding taxable year after the taxable year in which the
taxpayer places the eligible building in service or use in this
state or the building plan is approved to receive the Designed to
Earn the Energy Star® label. This election shall be made in the
annual income tax return filed under this chapter for the taxable
year in which the eligible building is first placed into service or
use by the taxpayer. Once made, the election cannot be revoked. In
the event of a failure to make a timely election to delay the
beginning of the credit application period, the credit shall be
applied beginning in the taxable year in which the taxpayer places
the eligible building in service or use in this state. No
retroactive election to delay the beginning of the credit
application period is allowed.
_____(b) Business franchise tax. -- The credit is first applied to
reduce the taxes imposed by article twenty-three of this chapter
for the taxable year, determined after application of the credits
against tax provided in section seventeen of that article, but before application of any other allowable credits against tax.
_____(c) Corporation net income taxes. -- After application of
subsection (b) of this section, any unused credit is next applied
to reduce the taxes imposed by article twenty-four of this chapter
for the taxable year, determined before application of allowable
credits against tax.
_____(d) Personal income tax. --
_____(1) If the eligible taxpayer is an electing small business
corporation (as defined in section 1361 of the United States
Internal Revenue Code of 1986, as amended), a partnership, a
limited liability company that is treated as a partnership for
federal income tax purposes or a sole proprietorship, then any
unused credit, after application of subsections (b) and (c) of this
section, as applicable, is allowed as a credit against the taxes
imposed by article twenty-one of this chapter.
_____(2) Electing small business corporations, limited liability
companies, partnerships and other unincorporated organizations
shall allocate the credit allowed by this article among its members
in the same manner as profits and losses are allocated for the
§11-13DD-6. Limitation on use of credit.
_____(a) Withholding. -- No credit is allowed under this section
against any employer withholding taxes imposed by article
twenty-one of this chapter.
_____(b) No other tax credit authorized. -- The credit allowed or
authorized under the provisions of this article may not be allowed,
authorized or applied against tax if any tax credit is authorized,
applied for or used or applied against tax by the taxpayer, or by
any other person, under article thirteen-d, article thirteen-e,
article thirteen-q, article thirteen-r or article thirteen-s of
this chapter, or any combination thereof, for, or with relation to,
investment in any building, or facility for which credit is, or may
be allowed, authorized or applied against tax under this article.
§11-13DD-7. Excess credit; carryforward; carryback prohibited.
_____(a) If the tax credit allowed under this article in any
taxable year exceeds the sum of the taxes enumerated in section
four of this article for that taxable year, the excess may be
applied against those taxes, in the order and manner stated in
section four of this article, for succeeding taxable years until
the earlier of the following:
_____(1) Five taxable years have elapsed; or
_____(2) The full amount of the excess tax credit is used.
_____(b) No carryback to a prior taxable year is allowed for the
amount of any unused portion of any annual credit allowance.
§11-13DD-8. Credit recapture.
_____(a) If it appears upon audit or otherwise that any taxpayer
has taken the credit against tax allowed under this article and was
not entitled to take the credit, then the credit improperly taken under this article shall be recaptured.
_____(b) Amended returns shall be filed for any tax year for which
the credit was improperly taken. Any additional taxes due under
this chapter shall be remitted with the amended return or returns
filed with the Tax Commissioner, along with interest, as provided
in section seventeen, article ten of this chapter and such other
penalties and additions to tax as may be applicable pursuant to the
provisions of article ten of this chapter.
§11-13DD-9. Interest; penalties; additions to tax.
_____Notwithstanding the provisions of article ten of this chapter,
penalties and additions to tax imposed under article ten of this
chapter may be waived at the discretion of the Tax Commissioner:
Provided, That interest is not subject to waiver, except in
accordance with the provisions of article ten of this chapter.
§11-13DD-10. Statute of limitations.
_____Notwithstanding the provisions of article ten of this chapter,
the statute of limitations for the issuance of an assessment of tax
by the Tax Commissioner is five years from the date of filing of
any tax return on which this credit was taken or five years from
the date of payment of any tax liability, calculated pursuant to
the assertion of the credit allowed under this article, whichever
§11-13DD-11. Report on credit.
_____(a) The Tax Commissioner shall provide to the Joint Committee
on Government and Finance by July 1, 2015, and by July 1 of each
year after that, a report detailing the amount of credit claimed
pursuant to this article. The report shall include the amount of
credit claimed against the business franchise tax, the amount of
credit claimed against the corporate net income tax and the amount
of credit claimed against the personal income tax.
_____(b) Taxpayers claiming the credit shall provide the
information the Tax Commissioner requires to prepare the report:
Provided, That the information is subject to the confidentiality
and disclosure provisions of sections five-d and five-s, article
ten of this chapter.
§11-13DD-12. Legislative rules.
_____The Tax Commissioner shall propose for legislative approval
rules pursuant to the provisions of article three, chapter
twenty-nine-a of this code, necessary to carry out the purposes of
§11-13DD-13. Effective date.
This article shall be effective for business franchise tax
years, corporate net income tax years and personal income tax years
beginning on or after January 1, 2013.
NOTE: The purpose of this bill is to authorize the creation
of a new tax credit for eligible expenditures incurred in placing in service residential or nonresidential energy efficient building
property. The bill's incentive will encourage the construction of
energy efficient buildings, thereby reducing the total amount of
energy consumed in the state. The bill requires the Tax
Commissioner to provide to the Joint Committee on Government and
Finance annual reports beginning in 2015.
This article is new; therefore,
it has been completely