S.F. 297 Section 1. NEW SECTION . 260C.41 High-demand occupation tax 1 credit —— agreement. 2 1. A high-demand occupation tax credit is allowed under this 3 section. The tax credit is allowed against the taxes imposed 4 in chapter 422, division II, as provided in section 422.11K, 5 to facilitate an increase in the number of Iowans prepared to 6 enter high-demand occupational fields. 7 2. In order to qualify for the tax credit, the taxpayer 8 must meet qualifications established by the board of directors 9 of the community college in which the taxpayer enrolled and 10 attended a course of study in accordance with this subsection. 11 At a minimum, the taxpayer must comply with all of the 12 following: 13 a. Be a resident of Iowa who enrolls in a community 14 college in a course of study which results in the community 15 college conferring a credential that qualifies the taxpayer 16 for a high-demand occupation. For purposes of this section, 17 “credential” means a postsecondary certificate, diploma, or 18 degree, but not more than an associate degree. For purposes 19 of this section, “high-demand occupation” means an occupation 20 in the fields of science, technology, engineering, and 21 mathematics, and occupations aligned with the six career and 22 technical education service areas as defined in section 256.11, 23 subsection 5, paragraph “h” . 24 b. Execute an agreement with the community college under 25 which the taxpayer maintains a grade point average of at least 26 two-point-five on a four-point grade scale, or the equivalent 27 if another grade scale is used, until the taxpayer is issued a 28 credential by the community college for successful completion 29 of a course of study that meets the requirements of paragraph 30 “a” . The agreement shall be for at least two years, but not 31 more than five years. 32 3. a. If the taxpayer meets the terms of the agreement 33 entered into under subsection 2, the community college shall 34 submit to the department of revenue the total amount of tuition 35 -1- LSB 2303XS (2) 88 jm/jh 1/ 4

S.F. 297 and mandatory fees paid by the taxpayer in earning a credential 1 under this section. 2 b. The department of revenue shall issue the tax credit 3 certificate to the taxpayer upon receipt of information 4 submitted to the department of revenue by a community college 5 in accordance with this subsection. 6 4. The tax credit shall equal the gross amount paid to the 7 community college for tuition and mandatory fees paid by the 8 taxpayer under the agreement. 9 5. a. To claim a tax credit under this section, a taxpayer 10 shall include one or more tax credit certificates with the 11 taxpayer’s tax return. 12 b. The tax credit certificate shall contain the taxpayer’s 13 name, address, tax identification number, the amount of the 14 credit, and any other information required by the department 15 of revenue. 16 c. The tax credit certificate, unless rescinded by the 17 department of revenue, shall be accepted by the department 18 of revenue as payment for taxes imposed in chapter 422, 19 division II, subject to any conditions or restrictions placed 20 by the department of revenue upon the face of the tax credit 21 certificate and subject to the limitations of this tax credit. 22 6. A tax credit in excess of the taxpayer’s liability for 23 the tax year is not refundable but may be credited to the tax 24 liability for the following five tax years or until depleted, 25 whichever is earlier. However, if the taxpayer enters into 26 active military service as a member of the Iowa army national 27 guard, the Iowa air national guard, the active military forces 28 of the United States, the army national guard of the United 29 States, or the air national guard of the United States, or 30 enrolls in an accredited private institution as defined in 31 section 261.9 or in an institution of higher learning governed 32 by the state board of regents, the tax credit may be credited 33 to the tax liability for an additional two years or until 34 depleted, whichever is earlier. A tax credit shall not be 35 -2- LSB 2303XS (2) 88 jm/jh 2/ 4

S.F. 297 carried back to a tax year prior to the tax year in which the 1 taxpayer redeems the tax credit. A tax credit shall not be 2 transferable to any other person. 3 Sec. 2. NEW SECTION . 422.11K High-demand occupation tax 4 credit. 5 The taxes imposed under this division, less the credits 6 allowed under section 422.12, shall be reduced by a high-demand 7 occupation tax credit allowed under section 260C.41. 8 Sec. 3. APPLICABILITY. This Act applies to tax years 9 beginning on or after January 1, 2020. 10 EXPLANATION 11 The inclusion of this explanation does not constitute agreement with 12 the explanation’s substance by the members of the general assembly. 13 This bill provides for a high-demand occupation tax credit 14 to facilitate an increase in the number of Iowans prepared to 15 enter high-demand occupational fields. 16 To qualify, the taxpayer must enroll in and attend a course 17 of study at a community college which results in the community 18 college conferring a credential that qualifies the taxpayer 19 for a high-demand occupation. The bill defines “high-demand 20 occupation” as an occupation in the fields of science, 21 technology, engineering, and mathematics, and occupations 22 aligned with any of six career and technical education service 23 areas. 24 The taxpayer must also execute an agreement with the 25 community college for at least two years, but not more than 26 five years, under which the taxpayer maintains a grade point 27 average of at least 2.5 on a 4.0 grade scale. 28 If the taxpayer meets the terms of the agreement, the 29 community college submits to the department of revenue the 30 total amount of tuition and mandatory fees paid by the taxpayer 31 in earning a credential, and the department must issue the 32 tax credit certificate. The tax credit shall equal the gross 33 amount paid by the taxpayer to the community college for 34 tuition and mandatory fees. 35 -3- LSB 2303XS (2) 88 jm/jh 3/ 4

S.F. 297 A tax credit in excess of the taxpayer’s liability for 1 the tax year is not refundable but may be credited to the 2 personal net income tax liability for the following five tax 3 years or until depleted, whichever is earlier. However, if 4 the taxpayer enters into active military service or enrolls 5 in an accredited private postsecondary institution in Iowa or 6 a regents university, the tax credit may be credited to the 7 tax liability for an additional two years or until depleted, 8 whichever is earlier. 9 The bill applies to tax years beginning on or after January 10 1, 2020. 11 -4- LSB 2303XS (2) 88 jm/jh 4/ 4