H.F. 2183 Section 1. NEW SECTION . 422.11I Long-term unemployed worker 1 tax credit. 2 1. As used in this section, unless the context otherwise 3 requires: 4 a. “Full-time basis” means an average of forty hours of work 5 per week, including all paid holidays, vacations, sick leave, 6 and other paid leave. 7 b. “Long-term unemployed individual” means a resident of 8 this state who has been totally unemployed for at least eight 9 consecutive months. 10 c. “Totally unemployed” means the same as defined in section 11 96.19, subsection 38, paragraph “a” . 12 2. The taxes imposed under this division, less the credits 13 allowed under section 422.12, shall be reduced by a long-term 14 unemployed worker tax credit equal to one thousand five hundred 15 dollars for hiring a long-term unemployed individual for 16 employment in this state on or after the effective date of this 17 Act. To be eligible for the credit, the taxpayer must employ 18 the long-term unemployed individual on a full-time basis for 19 twelve consecutive months. 20 3. The credit shall not be allowed for a long-term 21 unemployed individual who was hired to replace an individual 22 whose employment was terminated within the twelve-month 23 period preceding the date the long-term unemployed individual 24 is hired. However, if the individual being replaced left 25 employment voluntarily without good cause attributable to the 26 employer or if the individual was discharged for misconduct in 27 connection with the individual’s employment as determined by 28 the department of workforce development, the credit shall be 29 allowed. 30 4. To receive the long-term unemployed worker tax credit, 31 a taxpayer must submit an application to the department, made 32 in the manner and form prescribed by the department. If the 33 taxpayer meets the criteria for eligibility, the department 34 shall issue to the taxpayer a tax certificate for the long-term 35 -1- LSB 5053YH (4) 84 mm/sc 1/ 4

H.F. 2183 unemployed worker tax credit. The certificate shall contain 1 the taxpayer’s name, address, tax identification number, the 2 amount of the credit, the tax year for which the certificate 3 applies, and an expiration date for the certificate. The 4 taxpayer must file the tax credit certificate with the 5 taxpayer’s income tax return for the tax year in which the 6 twelfth month of employment falls in order to claim the tax 7 credit. 8 5. The tax credit certificates shall be issued on an 9 earliest filed basis. The aggregate total amount of tax credit 10 certificates that may be issued by the department shall not 11 exceed five million dollars. 12 6. Any credit in excess of the tax liability is not 13 refundable but the excess for the tax year may be credited to 14 the tax liability for the following three tax years or until 15 depleted, whichever is earlier. 16 7. An individual may claim the tax credit allowed a 17 partnership, limited liability company, S corporation, estate, 18 or trust electing to have the income taxed directly to the 19 individual. The amount claimed by the individual shall be 20 based upon the pro rata share of the individual’s earnings of 21 the partnership, limited liability company, S corporation, 22 estate, or trust. 23 8. This section is repealed thirty days following the date 24 on which five million dollars in total credits under this 25 section, section 422.33, subsection 29, and section 422.60, 26 subsection 14, have been allowed. 27 Sec. 2. Section 422.33, Code Supplement 2011, is amended by 28 adding the following new subsection: 29 NEW SUBSECTION . 29. a. The taxes imposed under this 30 division shall be reduced by a long-term unemployed worker tax 31 credit allowed under section 422.11I. 32 b. This subsection is subject to repeal pursuant to section 33 422.11I, subsection 8. 34 Sec. 3. Section 422.60, Code Supplement 2011, is amended by 35 -2- LSB 5053YH (4) 84 mm/sc 2/ 4

H.F. 2183 adding the following new subsection: 1 NEW SUBSECTION . 14. a. The taxes imposed under this 2 division shall be reduced by a long-term unemployed worker tax 3 credit allowed under section 422.11I. 4 b. This subsection is subject to repeal pursuant to section 5 422.11I, subsection 8. 6 Sec. 4. EFFECTIVE UPON ENACTMENT. This Act, being deemed of 7 immediate importance, takes effect upon enactment. 8 Sec. 5. APPLICABILITY. This Act applies to long-term 9 unemployed individuals hired on or after the effective date of 10 this Act. 11 EXPLANATION 12 This bill provides an individual and corporate income tax 13 credit and franchise tax credit for the hiring and employment 14 of a long-term unemployed individual in this state. “Long-term 15 unemployed individual” is defined as a resident of this state 16 who has been totally unemployed for at least eight consecutive 17 months. 18 The credit is available to a taxpayer who hires and employs 19 a long-term unemployed individual for employment on a full-time 20 basis for 12 consecutive months in this state on or after the 21 effective date of the bill. “Full-time basis” is defined as 22 an average of 40 hours of work per week. The credit is equal 23 to $1,500. The credit is nonrefundable, but may be carried 24 forward for three years. 25 The credit is not allowed if the long-term unemployed 26 individual was hired to replace an individual whose employment 27 was terminated within the 12-month period preceding the date 28 the long-term unemployed individual was hired, unless the 29 individual left employment voluntarily without good cause 30 attributable to the employer or was discharged for misconduct 31 as determined by the department of workforce development. 32 To receive the tax credit, a taxpayer must submit an 33 application to the department of revenue and receive a tax 34 credit certificate, then attach the certificate to the 35 -3- LSB 5053YH (4) 84 mm/sc 3/ 4

H.F. 2183 taxpayer’s tax return. 1 The total amount of tax credits that may be issued by the 2 department of revenue for tax years beginning on or after 3 January 1, 2012, shall not exceed $5 million. Tax credit 4 certificates shall be issued on an earliest filed basis. 5 An individual may claim the tax credit allowed a 6 partnership, limited liability company, S corporation, estate, 7 or trust electing to have the income taxed directly to the 8 individual. The amount claimed by the individual shall be 9 based upon the pro rata share of the individual’s earnings of 10 the partnership, limited liability company, S corporation, 11 estate, or trust. 12 The credit is repealed 30 days following the date on which $5 13 million in total credits have been allowed. 14 The bill takes effect upon enactment and applies to 15 long-term unemployed individuals hired on or after that date. 16 -4- LSB 5053YH (4) 84 mm/sc 4/ 4