1.1 	A bill for an act
1.2 	relating to taxation; individual income; providing a temporary refundable credit 
1.3 	for residential biomass heating systems; requiring a report.
1.4 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.5 	Section 1. PILOT PROGRAM; RESIDENTIAL BIOMASS HEATING SYSTEM 
1.6 	TAX CREDIT.
 1.7 		Subdivision 1.Credit allowed; limitations. (a) An individual who purchases 
1.8 	and installs a residential biomass heating system during the taxable year is allowed a 
1.9 	credit against the tax computed under Minnesota Statutes, chapter 290, for the taxable 
1.10 	year equal to the lesser of:
1.11 	(1) 33 percent of the purchase price of the residential biomass heating system; or
1.12 	(2) $5,000.
1.13 	(b) For the purposes of this section, "residential biomass heating system" means 
1.14 	a system that qualifies as a certified residential wood heater or residential hydronic 
1.15 	heater that meets the 2015 Standards of Performance of the federal Environmental 
1.16 	Protection Agency as published in the Federal Register on March 16, 2015, Docket 
1.17 	No. EPA-HQ-OAR-2009-0734, or any final rule issued in that docket or federal order 
1.18 	pertaining thereto.
1.19 	(c) For a nonresident or a part-year resident, the credit must be allocated based 
1.20 	on the percentage calculated under Minnesota Statutes, section 290.06, subdivision 2c, 
1.21 	paragraph (e).
1.22 		Subd. 2.Credit to be refundable. If the amount of credit that a taxpayer who is a 
1.23 	resident or part-year resident of Minnesota is eligible to receive under this section exceeds 
1.24 	the taxpayer's tax liability under Minnesota Statutes, chapter 290, the commissioner shall 
2.1 	refund the excess to the taxpayer. For nonresident taxpayers, the credit may not exceed the 
2.2 	taxpayer's liability for tax under Minnesota Statutes, chapter 290.
2.3 		Subd. 3.Appropriation. An amount sufficient to pay the refunds required by this 
2.4 	section is appropriated to the commissioner of revenue from the general fund.
2.5 		Subd. 4.Report. By January 15, 2019, the commissioner of revenue, in compliance 
2.6 	with Minnesota Statutes, sections 3.195 and 3.197, must provide a report to the chairs 
2.7 	and ranking minority members of the house of representatives and senate legislative 
2.8 	committees with jurisdiction over taxes and energy on:
2.9 	(1) the number of taxpayers claiming the credit under this section in the first year; 
2.10 	(2) the average amount of credits claimed and the total amount of credits claimed 
2.11 	under this section in the first year;
2.12 	(3) recommendations for making the credit under this section permanent; and
2.13 	(4) the administration of the credit under this section, including recommendations 
2.14 	for ensuring compliance.

2.15 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
2.16 	December 31, 2016, and before January 1, 2022.