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HF 1027

A bill for an act relating to radon by establishing radon mitigation requirements, creating a radon mitigation system tax credit available against the individual and corporate income taxes, and including retroactive applicability provisions.

2025-2026 Regular Session

Creates a nonrefundable tax credit up to 1000 for installing radon mitigation and requires passive radon methods in new small homes.

Subcommittee: Rowley, Bisignano, and Dawson.
#airquality #corporatetaxes #incometaxes #radontesting #taxcredits
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Bill Summary · HF 1027

Summary — HF 1027 (Radon Mitigation System Tax Credit & Building Code Requirement)

Status: Introduced April 17, 2025; Passed House April 23, 2025 (yeas 92–nays 1); Amendment H‑1258 adopted. Referred to subcommittee (Rowley, Bisignano, Dawson).

Purpose

HF 1027 seeks to reduce indoor radon exposure by (1) creating a state income tax credit for the purchase and installation of radon mitigation systems and (2) requiring passive radon mitigation methods in new single‑family and two‑family residential construction as part of the State Building Code.

Key provisions

  • Tax credit

    • Creates a nonrefundable radon mitigation system tax credit (individual and corporate income tax).
    • Credit equals the amount paid to purchase and install a radon mitigation system, not to exceed $1,000.
    • Credit may be carried forward to the following tax year if it exceeds tax liability.
    • Passthrough entities (partnerships, LLCs, S corporations, estates, trusts) may pass the credit through to individual owners/shareholders; individual claims are pro rata.
    • “Radon mitigation system” is defined as a system installed to reduce indoor radon concentrations in a building.
    • Retroactive applicability: provisions enabling the credit apply retroactively to January 1, 2025, for tax years beginning on or after that date.

  • Building code requirement (new Section 103A.8E)

    • The State Building Code Commissioner must adopt a requirement that new single‑family and two‑family residential construction include passive radon mitigation methods.
    • The requirement applies only to construction commenced after the requirement’s adoption.

Fiscal impact (Legislative Services Agency estimates)

  • Initial impact (claims for tax year 2025, paid in FY2026): estimated reduction in State General Fund individual income tax revenue of about $3.0 million.
  • Amended estimate (includes likely increase from passive systems in new homes): FY2027 and beyond projected reduction of about $6.3 million annually.
  • Local option school income surtax revenue is also projected to decline (estimated ~$75,000 in FY2026; ~$158,000 in FY2027+).
  • Estimates are based on assumptions about annual installations (existing and new homes), estimated costs of passive systems, and taxpayer uptake; future installation volumes are uncertain.

Who is affected

  • Homeowners and building owners who purchase and install radon mitigation systems.
  • New home builders (required to include passive mitigation in qualifying new single‑family and two‑family homes after adoption).
  • Radon mitigation contractors and suppliers (potential increased demand).
  • State General Fund and local school surtax receipts (reduced revenue).

Timing & next steps

  • Tax credit provisions are retroactive to Jan 1, 2025 for tax years beginning on/after that date (so tax year 2025 filers may claim).
  • Building code requirement takes effect when adopted by the commissioner and applies only to construction commenced after adoption (fiscal analysis assumed adoption/effectiveness could be Jan 1, 2026, but the bill does not set a specific adoption date).
  • Currently in Senate subcommittee after House passage.

Compiled from official sources — confirm details with the bill’s official record.

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