HB 2576 Summary

• Establishes combined heat and power (CHP) tax credits for individuals and businesses that produce electrical or mechanical energy from qualified energy resources in Arizona, effective for taxable years 2011-2016.

• Creates Department of Commerce certification process for CHP equipment and systems, with applications accepted from November 1, 2010 through December 31, 2016, and annual credit claims beginning January 1, 2011.

• Provides tax credits calculated at 2 cents per kilowatt hour of electricity or 1.5 cents per horsepower hour of power produced, capped at $100,000 annually per installation and $1 million statewide per calendar year.

• Allows unused credits to carry forward up to 5 consecutive taxable years and permits tax-exempt entities to designate taxpayers who financed or installed CHP systems as credit recipients.

• Requires Department of Commerce to establish procedures and collaborate with Department of Revenue on rules; credits limited by state general fund revenue requirements and distributed on first-come, first-served basis when claims exceed annual cap.