CHAPTER 29. COAL GASIFICATION TECHNOLOGY INVESTMENT TAX CREDIT
IC 6-3.1-29
Chapter 29. Coal Gasification Technology Investment Tax Credit
IC 6-3.1-29-1
Legislative intent; use of women and minority businesses asvendors
Sec. 1. The general assembly declares that the opportunity for theparticipation of underutilized small businesses, especially womenand minority business enterprises, in the coal gasification industry isessential if social and economic parity is to be obtained by womenand minority business persons and if the economy of Indiana is to bestimulated as contemplated by this chapter. A recipient of a creditunder this chapter is encouraged to purchase goods and services fromunderutilized small businesses, especially women and minoritybusiness enterprises.
As added by P.L.191-2005, SEC.15.
IC 6-3.1-29-2
"Commission"
Sec. 2. As used in this chapter, "commission" refers to the Indianautility regulatory commission.
As added by P.L.191-2005, SEC.15.
IC 6-3.1-29-3
"Corporation"
Sec. 3. As used in this chapter, "corporation" refers to the Indianaeconomic development corporation established by IC 5-28-3-1.
As added by P.L.191-2005, SEC.15.
IC 6-3.1-29-4
"Department"
Sec. 4. As used in this chapter, "department" refers to thedepartment of state revenue.
As added by P.L.191-2005, SEC.15.
IC 6-3.1-29-4.5
"Fluidized bed combustion technology"
Sec. 4.5. As used in this chapter, "fluidized bed combustiontechnology" means a technology that involves the combustion of fuelin connection with a bed of inert material, such as limestone ordolomite, which is held in a fluid like state by the means of air orother gasses being passed through the materials.
As added by P.L.122-2006, SEC.10.
IC 6-3.1-29-5
"Indiana coal"
Sec. 5. As used in this chapter, "Indiana coal" has the meaning setforth in IC 21-47-1-4.
As added by P.L.191-2005, SEC.15. Amended by P.L.2-2007,SEC.125.
IC 6-3.1-29-6
"Integrated coal gasification powerplant"
Sec. 6. As used in this chapter, "integrated coal gasificationpowerplant" means a facility that satisfies all the followingrequirements:
(1) The facility is located in Indiana and is a newly constructedenergy generating plant.
(2) The facility converts coal into synthesis gas that can be usedas a fuel to generate energy or as a substitute for natural gas.
(3) The facility uses the synthesis gas as a fuel to generateelectric energy or produces synthesis gas that can be used as asubstitute for natural gas.
(4) The facility is dedicated primarily to production ofelectricity or gas for use by energy utilities serving Indianaretail electric or gas utility consumers.
As added by P.L.191-2005, SEC.15. Amended by P.L.175-2007,SEC.4.
IC 6-3.1-29-7
"Minority"
Sec. 7. As used in this chapter, "minority" means a member of aminority group (as defined in IC 4-13-16.5-1.)
As added by P.L.191-2005, SEC.15.
IC 6-3.1-29-8
"Minority business enterprise"
Sec. 8. As used in this chapter, "minority business enterprise" hasthe meaning set forth in IC 4-13-16.5-1.
As added by P.L.191-2005, SEC.15. Amended by P.L.1-2006,SEC.144.
IC 6-3.1-29-9
"Pass through entity"
Sec. 9. As used in this chapter, "pass through entity" means:
(1) a corporation that is exempt from the adjusted gross incometax under IC 6-3-2-2.8(2);
(2) a partnership;
(3) a limited liability company;
(4) a limited liability partnership;
(5) a corporation organized under IC 8-1-13; or
(6) a corporation organized under IC 23-17-1 that is an electriccooperative and that has at least one (1) member that is acorporation organized under IC 8-1-13.
As added by P.L.191-2005, SEC.15.
IC 6-3.1-29-10
"Qualified investment"
Sec. 10. As used in this chapter, "qualified investment" means ataxpayer's expenditures for:
(1) all real and tangible personal property incorporated in and
used as part of an integrated coal gasification powerplant or afluidized bed combustion technology; and
(2) transmission equipment and other real and personal propertylocated at the site of an integrated coal gasification powerplantor a fluidized bed combustion technology that is employedspecifically to serve the integrated coal gasification powerplantor fluidized bed combustion technology.
As added by P.L.191-2005, SEC.15. Amended by P.L.122-2006,SEC.11.
IC 6-3.1-29-11
"State tax liability"
Sec. 11. As used in this chapter, "state tax liability" means ataxpayer's total tax liability that is incurred under:
(1) IC 6-3-1 through IC 6-3-7 (the adjusted gross income tax);
(2) IC 6-5.5 (the financial institutions tax);
(3) IC 27-1-18-2 (the insurance premiums tax); and
(4) IC 6-2.3 (the utility receipts tax);
as computed after the application of the credits that underIC 6-3.1-1-2 are to be applied before the credit provided by thischapter.
As added by P.L.191-2005, SEC.15.
IC 6-3.1-29-12
"Taxpayer"
Sec. 12. As used in this chapter, "taxpayer" means a person, acorporation, a partnership, or other entity that makes a qualifiedinvestment.
As added by P.L.191-2005, SEC.15.
IC 6-3.1-29-13
"Women's business enterprise"
Sec. 13. As used in this section, "women's business enterprise"has the meaning set forth in IC 4-13-16.5-1.3.
As added by P.L.191-2005, SEC.15.
IC 6-3.1-29-14
Credit
Sec. 14. (a) A taxpayer that:
(1) is awarded a tax credit under this chapter by the corporation;and
(2) complies with the conditions set forth in this chapter and theagreement entered into by the corporation and the taxpayerunder this chapter;
is entitled to a credit against the taxpayer's state tax liability for ataxable year in which the taxpayer places into service an integratedcoal gasification powerplant or a fluidized bed combustiontechnology and for the taxable years provided in section 16 of thischapter.
(b) A tax credit awarded under this chapter must be applied
against the taxpayer's state tax liability in the following order:
(1) Against the taxpayer's liability incurred under IC 6-3-1through IC 6-3-7 (the adjusted gross income tax).
(2) Against the taxpayer's liability incurred under IC 6-5.5 (thefinancial institutions tax).
(3) Against the taxpayer's liability incurred under IC 27-1-18-2(the insurance premiums tax).
(4) Against the taxpayer's liability incurred under IC 6-2.3 (theutility receipts tax).
As added by P.L.191-2005, SEC.15. Amended by P.L.122-2006,SEC.12.
IC 6-3.1-29-15
Computation of credit amount
Sec. 15. (a) Subject to section 16 of this chapter, the amount ofthe credit to which a taxpayer is entitled for a qualified investmentin an integrated coal gasification powerplant is equal to the sum ofthe following:
(1) Ten percent (10%) of the taxpayer's qualified investment forthe first five hundred million dollars ($500,000,000) invested.
(2) Five percent (5%) of the amount of the taxpayer's qualifiedinvestment that exceeds five hundred million dollars($500,000,000) only if the facility is dedicated primarily toserving Indiana retail electric or gas utility consumers.
(b) Subject to section 16 of this chapter, the amount of the creditto which a taxpayer is entitled for a qualified investment in afluidized bed combustion technology is equal to the sum of thefollowing:
(1) Seven percent (7%) of the taxpayer's qualified investmentfor the first five hundred million dollars ($500,000,000)invested.
(2) Three percent (3%) of the amount of the taxpayer's qualifiedinvestment that exceeds five hundred million dollars($500,000,000).
As added by P.L.191-2005, SEC.15. Amended by P.L.122-2006,SEC.13; P.L.175-2007, SEC.5.
IC 6-3.1-29-16
Limitations on use of credit
Sec. 16. (a) A credit awarded under section 15 of this chaptermust be taken in ten (10) annual installments, beginning with theyear in which the taxpayer places into service an integrated coalgasification powerplant or a fluidized bed combustion technology.
(b) Subject to section 20 of this chapter, the amount of an annualinstallment of the credit awarded under section 15 of this chapter isequal to the amount determined in the last of the following STEPS:
STEP ONE: Determine the lesser of:
(A) the credit amount determined under section 15 of thischapter, divided by ten (10); or
(B) the greater of: (i) the taxpayer's total state tax liability for the taxableyear, multiplied by twenty-five percent (25%); or
(ii) the taxpayer's liability for the utility receipts taximposed under IC 6-2.3 for the taxable year.
STEP TWO: Multiply the STEP ONE amount by the percentageof Indiana coal used in the taxpayer's integrated coalgasification powerplant or fluidized bed combustion technologyin the taxable year for which the annual installment of the creditis allowed.
(c) If the credit allowed by this chapter is available to a memberof an affiliated group of corporations filing a consolidated returnunder IC 6-2.3-6-5 or IC 6-3-4-14, the credit shall be applied againstthe state tax liability of the affiliated group.
As added by P.L.191-2005, SEC.15. Amended by P.L.122-2006,SEC.14.
IC 6-3.1-29-17
Preconstruction application for credit
Sec. 17. A person that proposes to place a new integrated coalgasification powerplant or fluidized bed combustion technology intoservice may apply to the corporation before the taxpayer makes thequalified investment to enter into an agreement for a tax credit underthis chapter. The corporation shall prescribe the form of theapplication.
As added by P.L.191-2005, SEC.15. Amended by P.L.122-2006,SEC.15.
IC 6-3.1-29-18
Conditions for granting credit application
Sec. 18. After receipt of an application, the corporation may enterinto an agreement with the applicant for a credit under this chapterif the corporation determines that the taxpayer's proposed investmentsatisfies the requirements of this chapter.
As added by P.L.191-2005, SEC.15.
IC 6-3.1-29-19
Terms of required agreement; certificate of compliance
Sec. 19. (a) The corporation shall enter into an agreement with anapplicant that is awarded a credit under this chapter. The agreementmust include all the following:
(1) A detailed description of the project that is the subject of theagreement.
(2) The first taxable year for which the credit may be claimed.
(3) The maximum tax credit amount that will be allowed foreach taxable year.
(4) A requirement that the taxpayer shall maintain operations atthe project location for at least ten (10) years during the termthat the tax credit is available.
(5) If the facility is an integrated coal gasification powerplant,a requirement that the taxpayer shall pay an average wage to its
employees at the integrated coal gasification powerplant, otherthan highly compensated employees, in each taxable year thata tax credit is available, that equals at least one hundredtwenty-five percent (125%) of the average county wage in thecounty in which the integrated coal gasification powerplant islocated.
(6) For a project involving a qualified investment in anintegrated coal gasification powerplant, a requirement that thetaxpayer will maintain at the location where the qualifiedinvestment is made, during the term of the tax credit, a totalpayroll that is at least equal to the payroll that existed on thedate that the taxpayer placed the integrated coal gasificationpowerplant into service.
(7) A requirement that:
(A) one hundred percent (100%) of the coal used:
(i) at the integrated coal gasification powerplant, for aproject involving a qualified investment in an integratedcoal gasification powerplant; or
(ii) as fuel in a fluidized bed combustion unit, in a projectinvolving a qualified investment in a fluidized bedcombustion technology, if the unit is dedicated primarilyto serving Indiana retail electric utility consumers;
must be Indiana coal, unless the applicant wishes to assignthe tax credit as allowed under section 20.5(c) of this chapteror elects to receive a refundable tax credit under section 20.7of this chapter and the applicant certifies to the corporationthat partial use of other coal is necessary to result in lowerrates for Indiana retail utility customers; or
(B) seventy-five percent (75%) of the coal used as fuel in afluidized bed combustion unit must be Indiana coal, in aproject involving a qualified investment in a fluidized bedcombustion technology, if the unit is not dedicated primarilyto serving Indiana retail electric utility consumers.
(8) A requirement that the taxpayer obtain from the commissiona determination under IC 8-1-8.5-2 that public convenience andnecessity require, or will require:
(A) the construction of the taxpayer's integrated coalgasification powerplant, in the case of a project involving aqualified investment in an integrated coal gasificationpowerplant; or
(B) the installation of the taxpayer's fluidized bedcombustion unit, in the case of a project involving aqualified investment in a fluidized bed combustiontechnology.
(b) A taxpayer must comply with the terms of the agreementdescribed in subsection (a) to receive an annual installment of the taxcredit awarded under this chapter. The corporation shall annuallydetermine whether the taxpayer is in compliance with the agreement.If the corporation determines that the taxpayer is in compliance, thecorporation shall issue a certificate of compliance to the taxpayer.As added by P.L.191-2005, SEC.15. Amended by P.L.122-2006,SEC.16; P.L.175-2007, SEC.6; P.L.52-2008, SEC.1;P.L.182-2009(ss), SEC.203.
IC 6-3.1-29-20
Allocation of credit among shareholders, partners, and members
Sec. 20. (a) This section applies if a qualified investment is madeby a pass through entity or by taxpayers who are co-owners of anintegrated coal gasification powerplant or a fluidized bed combustiontechnology.
(b) If the credit allowed by this chapter for a taxable year isgreater than the state tax liability of the pass through entity againstwhich the tax credit may be applied, a shareholder, partner, ormember of the pass through entity is entitled to a tax credit equal to:
(1) the tax credit determined for the pass through entity for thetaxable year in excess of the pass through entity's state taxliability for the taxable year; multiplied by
(2) in the case of a pass through entity described in:
(i) section 9(1), 9(2), 9(3), or 9(4) of this chapter, thepercentage of the pass through entity's distributive income towhich the shareholder, partner, or member is entitled; and
(ii) section 9(5) or 9(6) of this chapter, the relativepercentage of the corporation's patronage dividendsallocable to the member for the taxable year.
(c) If an integrated coal gasification powerplant or a fluidized bedcombustion technology is co-owned by two (2) or more taxpayers,the amount of the credit that may be allowed to a co-owner in ataxable year is equal to:
(1) the tax credit determined under sections 15 and 16 of thischapter with respect to the total qualified investment in theintegrated coal gasification powerplant or fluidized bedcombustion technology; multiplied by
(2) the co-owner's percentage of ownership in the integratedcoal gasification powerplant or fluidized bed combustiontechnology.
(d) The amount of an annual installment of the credit allowed toa shareholder, partner, or member of a pass through entity or aco-owner shall be determined under section 16 of this chaptermodified as follows:
(1) Section 16(b) STEP ONE (A) of this chapter shall be basedon the percentage of the credit allowed to the shareholder,partner, member, or co-owner under this section.
(2) Section 16(b) STEP ONE (B) of this chapter shall be basedon the:
(A) state tax liability; or
(B) utilities receipts tax liability;
of the shareholder, partner, member, or co-owner.
As added by P.L.191-2005, SEC.15. Amended by P.L.122-2006,SEC.17.
IC 6-3.1-29-20.5
Assignability of credit by contract
Sec. 20.5. (a) Subject to subsection (c), part or all of the credit towhich a taxpayer is entitled under section 15 of this chapter may beassigned by the taxpayer to one (1) or more utilities that have enteredinto a contract that:
(1) is approved by the Indiana utility regulatory commission;
(2) provides for the purchase of electricity or substitute naturalgas (as defined in IC 8-1-2-42.1) by the utility from thetaxpayer; and
(3) expressly allows the assignment of tax credits under thissection.
A tax credit assigned to a utility under this section must be appliedagainst the utility's state tax liability in the order set forth in section14(b) of this chapter.
(b) Notwithstanding section 16 of this chapter, any part of ataxpayer's credit under section 15 of this chapter that is assigned bythe taxpayer under this section must be taken in twenty (20) annualinstallments, beginning with the year in which the taxpayer placesinto service an integrated coal gasification powerplant or a fluidizedbed combustion technology.
(c) The part of a taxpayer's credit under section 15 of this chapterthat may be assigned by the taxpayer with respect to any one (1)taxable year is subject to the following:
(1) The total amount of the taxpayer's credit under section 15 ofthis chapter that may be assigned by the taxpayer with respectto the taxable year may not exceed the product of:
(A) the total credit amount to which the taxpayer is entitledunder section 15 of this chapter, divided by twenty (20);multiplied by
(B) the percentage of Indiana coal used in the taxpayer'sintegrated coal gasification powerplant or fluidized bedcombustion technology in the taxable year for which theannual installment of the credit is allowed.
(2) The part of the amount determined under subdivision (1)that may be assigned to any one (1) utility with respect to thetaxable year may not exceed the greater of:
(A) the utility's total state tax liability for the taxable year,multiplied by twenty-five percent (25%); or
(B) the utility's total utility receipts tax liability for thetaxable year.
(d) Any part of the taxpayer's credit under section 15 of thischapter that is assigned to one (1) or more utilities by a taxpayerunder this section with respect to a taxable year may not be claimedby the taxpayer or the taxpayer's shareholders, partners, or members.However, any part of the credit to which the taxpayer is entitledunder section 15 of this chapter and that is not assigned by thetaxpayer with respect to the taxable year may be taken and appliedby the taxpayer, or the taxpayer's shareholders, partners, or members,in accordance with sections 16 and 20 of this chapter.As added by P.L.175-2007, SEC.7.
IC 6-3.1-29-20.7
Findings; election to receive refundable credit
Sec. 20.7. (a) The findings in IC 4-4-11.6-12 are incorporated byreference into this section. The general assembly further finds thatthe refundable credit provided by this section is also necessary toachieve the purposes set forth in IC 4-4-11.6-12.
(b) This section applies to a taxpayer that:
(1) makes a qualified investment in an integrated coalgasification powerplant; and
(2) enters into a contract to sell substitute natural gas (asdefined in IC 4-4-11.6-11) to the Indiana finance authorityunder IC 4-4-11.6.
(c) Notwithstanding anything in this chapter to the contrary, ataxpayer may elect in the manner prescribed by the department totake and receive all credits to which the taxpayer is entitled undersection 15 of this chapter (without regard to section 16 of thischapter) as a refundable credit against the taxpayer's state taxliability, if any, over a period of twenty (20) taxable years, beginningnot later than the taxable year in which the taxpayer places intoservice its integrated coal gasification powerplant. If, in a taxableyear, a taxpayer that makes an election under this subsection has nostate tax liability, the department shall pay to the taxpayer the fullamount of the refundable credit for that taxable year.
(d) The amount of a credit to which a taxpayer that makes anelection under subsection (c) is entitled for a particular taxable yearequals the result determined under STEP FOUR:
STEP ONE: Determine the total credit amount to which thetaxpayer is entitled under section 15 of this chapter (withoutregard to section 16 of this chapter).
STEP TWO: Divide the STEP ONE amount by twenty (20).
STEP THREE: Determine the ratio of Indiana coal to total coalused in the taxpayer's integrated coal gasification powerplant inthe taxable year.
STEP FOUR: Multiply the STEP TWO and STEP THREEamounts.
(e) A taxpayer shall claim a refund under this section in themanner provided by the department. The department shall pay therefunded amount to the taxpayer not more than ninety (90) days afterthe date on which the refund is claimed.
(f) The shareholders, members, or partners of a pass throughentity that makes an election under subsection (c) are not entitled toa credit allowed under section 20(b) of this chapter.
(g) A credit allowed under this section is not assignable undersection 20.5 of this chapter.
As added by P.L.182-2009(ss), SEC.204.
IC 6-3.1-29-21
Claiming tax credit Sec. 21. To receive the credit awarded by this chapter, a taxpayermust claim the credit on the taxpayer's annual state tax return orreturns in the manner prescribed by the department. The taxpayershall submit to the department a copy of the commission'sdetermination required under section 19 of this chapter, a copy of thetaxpayer's certificate of compliance issued under section 19 of thischapter, and all information that the department determines isnecessary for the calculation of the credit provided by this chapter.
As added by P.L.191-2005, SEC.15.