A BILL TO BE ENTITLED
AN ACT to promote the development of renewable energy derived from certain forms of biomass in order to make the environmentally superior disposal of animal waste economically feasible and in order to protect the environment by promoting the recovery of chemicals used in the wood pulping process, to extend certain tax credits for investing in renewable energy, to require that certain entities that receive economic development incentives participate in the NC greenpower program, to require the utilities commission to report annually on interconnectivity, and to appropriate funds to promote the development of biomass energy.
The General Assembly of North Carolina enacts:

PART I. DEFINITIONS

SECTION 1.1.  As used in this act:
(1)	"Biomass" means any of the following:
a.	Livestock or poultry excreta or a mixture of excreta with feed, bedding, litter, or other materials from an agricultural activity in this State involving 250 or more confined swine or 30,000 or more confined poultry.
b.	Wood or wood waste that is used in the recovery of chemicals from spent pulping liquor where the chemicals are used in, and the spent pulping liquor is produced by, the wood pulping process in this State.
(2)	"Biomass energy" means electricity generated from burning biomass in this State.
SECTION 1.2.  G.S. 62‑3(27a) reads as rewritten:
"(27a)	'Small power producer' means a person or corporation owning or operating an electrical power production facility with a power production capacity which, together with any other facilities located at the same site, does not exceed 80 megawatts of electricity and which depends upon renewable resources for its primary source of energy. A small power producer shall not include persons primarily engaged in the generation or sale of electricity from other than small power production facilities." 

PART II.  EXTEND CREDIT FOR INVESTING IN RENEWABLE ENERGY PROPERTY

SECTION 2.1.  G.S. 105‑129.16A reads as rewritten:
"§ 105‑129.16A.  Credit for investing in renewable energy property.
(a)	Credit. – If a taxpayer that has constructed, purchased, or leased renewable energy property places it in service in this State during the taxable year, the taxpayer is allowed a credit equal to thirty‑five percent (35%) of the cost of the property. In the case of renewable energy property that serves a single‑family dwelling, the credit must be taken for the taxable year in which the property is placed in service. For all other renewable energy property, the entire credit may not be taken for the taxable year in which the property is placed in service but must be taken in five equal installments beginning with the taxable year in which the property is placed in service.
(b)	Expiration. – If, in one of the years in which the installment of a credit accrues, the renewable energy property with respect to which the credit was claimed is disposed of, taken out of service, or moved out of State, the credit expires and the taxpayer may not take any remaining installment of the credit. The taxpayer may, however, take the portion of an installment that accrued in a previous year and was carried forward to the extent permitted under G.S. 105‑129.17. No credit is allowed under this section to the extent the cost of the renewable energy property was provided by public funds.
(c)	Ceilings. – The credit allowed by this section may not exceed the applicable ceilings provided in this subsection.
(1)	Nonresidential Property. – A ceiling of two million five hundred thousand dollars ($2,500,000) per installation applies to renewable energy property placed in service for any purpose other than residential.
(2)	Residential Property. – The following ceilings apply to renewable energy property placed in service for residential purposes:
a.	One thousand four hundred dollars ($1,400) per dwelling unit for solar energy equipment for domestic water heating, including pool heating.
b.	Three thousand five hundred dollars ($3,500) per dwelling unit for solar energy equipment for active space heating, combined active space and domestic hot water systems, and passive space heating.
c.	Ten thousand five hundred dollars ($10,500) per installation for any other renewable energy property for residential purposes.
(d)	No Double Credit. – A taxpayer that claims any other credit allowed under this Chapter with respect to renewable energy property may not take the credit allowed in this section with respect to the same property. A taxpayer may not take the credit allowed in this section for renewable energy property the taxpayer leases from another unless the taxpayer obtains the lessor's written certification that the lessor will not claim a credit under this Chapter with respect to the property.
(e)	Sunset. – This section is repealed effective for renewable energy property placed into service on or after 1 January 2011."
SECTION 2.2.  G.S. 105‑129.15A is repealed.
SECTION 2.3.  G.S. 105‑129.16 is repealed.
SECTION 2.4.  G.S. 105‑129.16C is amended by adding a new subsection to read:
"(d)	Sunset. – This section is repealed for taxable years beginning on or after 1 January 2006."

Part III.  Economic Development incentives – require participation in the nc greenpower program

SECTION 3.1.  G.S. 105‑129.4 is amended by adding a new subsection to read:
"(b8)	Renewable Energy. – A taxpayer is eligible for a credit allowed under this Article only if the taxpayer makes a qualifying contribution to NC GreenPower Corporation in the year in which the taxpayer engages in the activity that qualifies for the credit and in each year it claims an installment or carryforward of a credit. For the purposes of this subsection, a 'qualifying contribution' is one that funds the addition of enough 100‑kilowatt‑hour blocks of renewable energy to North Carolina's power supply in an amount equal to ten percent (10%) of the annual electricity usage of the establishment that is the subject of the credit. If the taxpayer ceases to make the qualifying contribution, the credit expires, and the taxpayer may not take any remaining installment or carryforward of the credit."
SECTION 3.2.(a)  G.S. 105‑129.26(a) reads as rewritten:
"(a)	Major Recycling Facility. – A recycling facility qualifies for the tax benefits provided in this Article and in Article 5 of this Chapter for major recycling facilities if it meets all of the following conditions:
(1)	The facility is located in an area that, at the time the owner began construction of the facility, was an enterprise tier one area pursuant to G.S. 105‑129.3.
(2)	The Secretary of Commerce has certified that the owner will, by the end of the fourth year after the year the owner begins construction of the recycling facility, invest at least three hundred million dollars ($300,000,000) in the facility and create at least 250 new, full‑time jobs at the facility.
(3)	The jobs at the recycling facility meet the wage standard in effect pursuant to G.S. 105‑129.4(b) as of the date the owner begins construction of the facility.
(4)	The owner of the facility makes a qualifying contribution to NC GreenPower Corporation in the year in which the owner engages in the activity that qualifies for the credit and in each year it claims a carryforward of a credit. For the purposes of this subdivision, a 'qualifying contribution' is one that funds the addition of enough 100‑kilowatt‑hour blocks of renewable energy to North Carolina's power supply in an amount equal to ten percent (10%) of the facility's annual electricity usage."
SECTION 3.2.(b)  G.S. 105‑129.26(b) reads as rewritten:
"(b)	Large Recycling Facility. – A recycling facility qualifies for the tax credit provided in G.S. 105‑129.27 for large recycling facilities if it meets all of the following conditions:
(1)	The facility is located in an area that, at the time the owner began construction of the facility, was an enterprise tier one area pursuant to G.S. 105‑129.3.
(2)	The Secretary of Commerce has certified that the owner will, by the end of the second year after the year the owner begins construction of the recycling facility, invest at least one hundred fifty million dollars ($150,000,000) in the facility and create at least 155 new, full‑time jobs at the facility.
(3)	The jobs at the recycling facility meet the wage standard in effect pursuant to G.S. 105‑129.4(b) as of the date the owner begins construction of the facility.
(4)	The owner of the facility makes a qualifying contribution to NC GreenPower Corporation in the year in which the owner engages in the activity that qualifies for the credit and in each year it claims a carryforward of a credit. For the purposes of this subdivision, a 'qualifying contribution' is one that funds the addition of enough 100‑kilowatt‑hour blocks of renewable energy to North Carolina's power supply in an amount equal to ten percent (10%) of the facility's annual electricity usage."
SECTION 3.3.  G.S. 105‑129.51(a) reads as rewritten:
"(a)	A taxpayer is eligible for the credit allowed in this Article if it satisfies the requirements of G.S. 105‑129.4(b), (b2), (b3), (b4), and (b8) relating to wage standard, health insurance, environmental impact, safety and health programs, and renewable energy, respectively."
SECTION 3.4.  G.S. 105‑129.62 is amended by adding a new subsection to read:
"(e1)	Renewable Energy. – A taxpayer is eligible for a credit allowed under this Article only if the taxpayer makes a qualifying contribution to NC GreenPower Corporation in the year in which the taxpayer engages in the activity that qualifies for the credit and in each year it claims an installment or carryforward of a credit. For the purposes of this subsection, a 'qualifying contribution' is one that funds the addition of enough 100‑kilowatt‑hour blocks of renewable energy to North Carolina's power supply in an amount equal to ten percent (10%) of the annual electricity usage of the establishment that is the subject of the credit. If the taxpayer ceases to make the qualifying contribution, the credit expires, and the taxpayer may not take any remaining installment or carryforward of the credit."
SECTION 3.5.  G.S. 105‑130.45 is amended by adding a new subsection to read:
"(b1)	Renewable Energy. – A taxpayer is eligible for a credit allowed under this section only if the taxpayer makes a qualifying contribution to NC GreenPower Corporation in the year in which the taxpayer engages in the activity that qualifies for the credit and in each year it claims a carryforward of a credit. For the purposes of this subsection, a 'qualifying contribution' is one that funds the addition of enough 100‑kilowatt‑hour blocks of renewable energy to North Carolina's power supply in an amount equal to ten percent (10%) of the company's annual electricity usage in this State. If the taxpayer ceases to make the qualifying contribution, the credit expires, and the taxpayer may not take any remaining carryforward of the credit."
SECTION 3.6.  G.S. 105‑130.46 is amended by adding a new subsection to read:
"(c1)	Renewable Energy. – A taxpayer is eligible for a credit allowed under this section only if the taxpayer makes a qualifying contribution to NC GreenPower Corporation in the year in which the taxpayer engages in the activity that qualifies for the credit and in each year it claims a carryforward of a credit. For the purposes of this subsection, a 'qualifying contribution' is one that funds the addition of enough 100‑kilowatt‑hour blocks of renewable energy to North Carolina's power supply in an amount equal to ten percent (10%) of the company's annual electricity usage in this State. If the taxpayer ceases to make the qualifying contribution, the credit expires, and the taxpayer may not take any remaining carryforward of the credit."
SECTION 3.7.  G.S. 143B‑437.53 is amended by adding a new subsection to read:
"(f)	Renewable Energy. – In order for a business to be eligible for a grant under this Part, the business must make a qualifying contribution to NC GreenPower Corporation in each year it is to receive a grant. For the purposes of this subsection, a 'qualifying contribution' is one that funds the addition of enough 100‑kilowatt‑hour blocks of renewable energy to North Carolina's power supply in an amount equal to ten percent (10%) of the annual electricity usage at the location that is the subject of an agreement."

PART IV.  UTILITIES COMMISSION REPORT ON INTERCONNECTIVITY

SECTION 4.  The Utilities Commission shall prepare and submit on or before 1 November of each year to the Joint Legislative Utility Review Committee a report that sets out the technical considerations governing the interconnection of small independent power producers to the electric power grid.  The report shall identify barriers to interconnection and actions taken or planned by the Commission to address those issues.  The report shall specifically address interconnection of facilities that generate electricity from renewable energy sources, including biomass.  The report shall include any recommendations, including legislative proposals, that the Commission finds advisable to facilitate improved interconnectivity.

PART V.  FUNDS TO SUPPORT THE DEVELOPMENT OF BIOMASS ENERGY

SECTION 5.1.  As a condition for its receipt of the funds appropriated to it by this Part, NC GreenPower Corporation shall agree to do all of the following:
(1)	Actively promote the production of biomass energy by fostering the development of biomass energy facilities.
(2)	Actively promote the utilization of biomass energy by marketing biomass energy blocks to residential, commercial, and industrial consumers of electricity.
(3)	Serve as the coordinating agency among producers of biomass; producers of biomass energy; investor-owned electric utilities; cooperative electric companies; municipal providers of electricity; residential, commercial, and industrial consumers of electricity; economic development commissions; the Utilities Commission and the Public Staff; the Department of Environment and Natural Resources; the Department of Agriculture and Consumer Services; and the Department of Commerce in the development and utilization of biomass energy.
(4)	Actively work to increase general public awareness of the availability and advantages of biomass energy.
(5)	 Identify barriers to the development and utilization of biomass energy and recommend strategies, including legislative proposals, to overcome those barriers.
(6)	 Identify methods to promote the development and utilization of biomass energy and recommend strategies, including tax incentives and other legislative proposals, to overcome those barriers.
(7)	To prepare and submit, on or before 1 October of each year, to the Joint Legislative Utility Review Committee, the Revenue Laws Study Committee, and the Environmental Review Commission a report that addresses each of the responsibilities of the Corporation under this section.
SECTION 5.2.  There is appropriated from the General Fund to the State Energy Office in the Department of Administration the sum of one million dollars ($1,000,000) for the 2005‑2006 fiscal year and the sum of one million dollars ($1,000,000) for the 2006‑2007 fiscal year. The State Energy Office shall allocate the funds appropriated by this section to the NC GreenPower Corporation as provided by this Part.  Funds appropriated by this section shall be used by NC GreenPower to supplement the amount required to be paid by an electric utility as avoided cost under G.S. 62‑156(b) to purchase up to 100 megawatt‑hours of biomass energy per fiscal year.  The sum of the amount paid per kilowatt‑hour by the electric utility and NC GreenPower shall not exceed the actual cost of production of the biomass energy.
SECTION 5.3.  The public purposes of the appropriation of funds by this Part are the development of renewable energy derived from biomass in order to promote protection of the environment by development of economically feasible methods for disposal of animal waste and for recovery and reuse of chemicals used in the wood pulping process.  In order to conserve funds so as to serve these purposes to the maximum extent possible, the State Energy Office and NC GreenPower Corporation shall expend funds appropriated by this Part in a manner that provides generators of biomass a mechanism for the management and disposal of the biomass without adding to any profit derived by biomass generators from the underlying activities that generate the biomass.

PART VI.  EFFECTIVE DATES

SECTION 6.  
(1)	Parts I, IV, and VI of this act are effective when it becomes law.
(2)	Section 2.1 of this act is effective for taxable years beginning on or after 1 January 2006. The remainder of Part II of this act is effective when it becomes law.
(3)	Section 3.7 of this act is effective when it becomes law and applies to agreements entered into on or after that date. The remainder of Part III of this act is effective for taxable years beginning on or after 1 January 2006.
(4)	Part V of this act becomes effective 1 July 2005.