The Iowa House approved a bill Wednesday that would give nuclear energy facilities an exemption on sales and use taxes.
House File 2757, which passed in a 94-1 vote, comes as work is being done to restart a decommissioned nuclear facility in the state — Duane Arnold Energy Center in Palo. The company NextEra Energy plans to make the Duane Arnold Energy Center, which ceased operations in 2020, operational by 2029.
The tax exemptions in the bill both apply to projects like the Duane Arnold Energy Center, as well as efforts to start new nuclear energy facilities in Iowa. The original bill did not include an end date for the tax exemptions — meaning sales and use taxes related to personal property, certain digital products and services for nuclear energy facilities would be exempt from taxes indefinitely. The House amended the measure to include a 25-year sunset overall, in addition to stating that once a nuclear facility becomes commercially operational, the facility would no longer be eligible for the sales tax exemption.
The House also added a clawback provision. If a nuclear energy facility that receives a tax exemption does not commence or restart operations within 12.5 years, the owner of the facility would have to repay the entire amount of the sales tax exemption back to the state.
Rep. David Young, R-Van Meter, the bill’s floor manager, said the state wants to encourage nuclear energy production in Iowa — but wants to make sure the tax exemption goes toward projects that benefit the state.
“By putting in a 25-year sunset, we tell folks that this does not go on forever, and if you want to come to Iowa and try to put forth nuclear energy for our consumers and customers, then you better start it,” Young said.
The measure received bipartisan support, with only Rep. Beth Wessel-Kroeschell, D-Ames, voting against the bill. Rep. Eric Gjerde, D-Cedar Rapids, thanked Young for working with him to craft the amendment, saying the sales tax exemption will provide incentives to bring nuclear energy to the state.
“We know that nuclear energy is the future of energy,” Gjerde said. “And this piece of legislation tells everybody that Iowa is welcome to business and nuclear energy coming in. It is an economic development.”
