77-2704.57 Personal property used in C-BED project or community-based energy development project; exemption; Tax Commissioner; powers and duties; Department of Revenue; recover tax not paid.
77-2704.57. Personal propertyused in C-BED project or community-based energy development project; exemption;Tax Commissioner; powers and duties; Department of Revenue; recover tax notpaid.(1) Sales and use tax shall not be imposed on the grossreceipts from the sale, lease, or rental of personal property for use in aC-BED project or community-based energy development project. This exemptionshall be conditioned upon filing requirements for the exemption as imposedby the Tax Commissioner. The requirements imposed by the Tax Commissionershall be related to ensuring that the property purchased qualifies for theexemption. The Tax Commissioner may require the filing of the documents showingcompliance with section 70-1907, the organization of the project, the distributionof the payments, the power purchase agreements, the project pro forma, articlesof incorporation, operating agreements, and any amendments or changes to thesedocuments during the life of the power purchase agreement.(2) The Tax Commissioner shall notify an electric utility that has apower purchase agreement with a C-BED project if there is a change in projectownership which makes the project no longer eligible as a C-BED project. Purchaseof a C-BED project by an electric utility prior to the end of the power purchaseagreement disqualifies the C-BED project for the exemption, but the Departmentof Revenue may not recover the amount of the sales and use tax that was notpaid by the project prior to the purchase.(3) For purposes of this section:(a) C-BED project or community-based energy development project meansa new wind energy project that:(i) Has an ownership structure as follows:(A) For a C-BED project that consists of more than two turbines, hasone or more qualified owners with no single individual qualified owner owningdirectly or indirectly more than fifteen percent of the project and with atleast thirty-three percent of the gross power purchase agreement paymentsflowing to the qualified owner or owners or local community; or(B) For a C-BED project that consists of one or two turbines, has oneor more qualified owners with at least thirty-three percent of the gross powerpurchase agreement payments flowing to a qualified owner or owners or localcommunity; and(ii) Has a resolution of support adopted:(A) By the county board of each county in which the C-BED project isto be located; or(B) By the tribal council for a C-BED project located within the boundariesof an Indian reservation;(b) Debt financing payments means principal, interest, and other typicalfinancing costs paid by the C-BED project company to one or more third-partyfinancial institutions for the financing or refinancing of the constructionof the C-BED project. Debt financing payments does not include the repaymentof principal at the time of a refinancing;(c) New wind energy project means any tangible personal property incorporatedinto the manufacture, installation, construction, repair, or replacement ofa device, such as a wind charger, windmill, or wind turbine, which is usedto convert wind energy to electrical energy or for the transmission of electricityto the purchaser; and(d) Qualified owner means:(i) A Nebraska resident;(ii) A limited liability company that is organized under the LimitedLiability Company Act or theNebraska Uniform Limited Liability Company Act and that is entirelymade up of members who are Nebraska residents;(iii) A Nebraska nonprofit corporation organized under the NebraskaNonprofit Corporation Act;(iv) An electric supplier as defined in section 70-1001.01, except thatownership in a single C-BED project is limited to no more than:(A) Fifteen percent either directly or indirectly by a single electricsupplier; and(B) A combined total of twenty-five percent ownership either directlyor indirectly by multiple electric suppliers; or(v) A tribal council.(4) Gross power purchase agreement payments are the total amount ofpayments during the life of the agreement. For power purchase agreements enteredinto on or before December 31, 2011, if the qualified owners have a combinedtotal of at least thirty-three percent of the equity ownership in the C-BEDproject, gross power purchase agreement payments shall be reduced by the debtfinancing payments. For the purpose of determining eligibility of the project,an estimate of the payments and their recipients shall be used.(5) Payments to the local community include, but are not limited to,lease payments to property owners on whose property a turbine is located,wind energy easement payments, and real and personal property tax receiptsfrom the C-BED project.(6) The Department of Revenue may examine the actual payments and thedistribution of the payments to determine if the projected distributions weremet. If the payment distributions to qualified owners do not meet the requirementsof this section, the department may recover the amount of the sales or usetax that was not paid by the project at any time up until the end of threeyears after the end of the power purchase agreement.(7) At any time prior to the end of the power purchase agreements, theproject may voluntarily surrender the exemption granted by the Tax Commissionerand pay the amount of sales and use tax that would otherwise have been due.(8) The amount of the tax due under either subsection (6) or (7) ofthis section shall be increased by interest at the rate specified in section 45-104.02, as such rate may from time to time be adjusted, from the date thetax would have been due if no exemption was granted until the date paid. SourceLaws 2007, LB367, § 11; Laws 2008, LB916, § 21; Laws 2009, LB561, § 5; Laws 2010, LB888, § 103.Operative Date: January 1, 2011 Cross ReferencesLimited Liability Company Act, see section 21-2601.Nebraska Nonprofit Corporation Act, see section 21-1901.Nebraska Uniform Limited Liability Company Act, see section 21-101.