SF 297 (LSB 2303XS (2) 88)

SENATE FILE 297

BY  BEHN

A BILL FOR

An Act relating to the individual income tax by creating a tax credit for community college students pursuing a credential leading to a high-demand occupation and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  260C.41  High-demand occupation tax credit —— agreement.
   1.  A high-demand occupation tax credit is allowed under this section. The tax credit is allowed against the taxes imposed in chapter 422, division II, as provided in section 422.11K, to facilitate an increase in the number of Iowans prepared to enter high-demand occupational fields. 
   2.  In order to qualify for the tax credit, the taxpayer must meet qualifications established by the board of directors of the community college in which the taxpayer enrolled and attended a course of study in accordance with this subsection. At a minimum, the taxpayer must comply with all of the following:
   a.  Be a resident of Iowa who enrolls in a community college in a course of study which results in the community college conferring a credential that qualifies the taxpayer for a high-demand occupation. For purposes of this section, “credential” means a postsecondary certificate, diploma, or degree, but not more than an associate degree. For purposes of this section, “high-demand occupation” means an occupation in the fields of science, technology, engineering, and mathematics, and occupations aligned with the six career and technical education service areas as defined in section 256.11, subsection 5, paragraph “h”. 
   b.  Execute an agreement with the community college under which the taxpayer maintains a grade point average of at least two-point-five on a four-point grade scale, or the equivalent if another grade scale is used, until the taxpayer is issued a credential by the community college for successful completion of a course of study that meets the requirements of paragraph “a”. The agreement shall be for at least two years, but not more than five years.
   3.  a.  If the taxpayer meets the terms of the agreement entered into under subsection 2, the community college shall submit to the department of revenue the total amount of tuition and mandatory fees paid by the taxpayer in earning a credential under this section. 
   b.  The department of revenue shall issue the tax credit certificate to the taxpayer upon receipt of information submitted to the department of revenue by a community college in accordance with this subsection. 
   4.  The tax credit shall equal the gross amount paid to the community college for tuition and mandatory fees paid by the taxpayer under the agreement. 
   5.  a.  To claim a tax credit under this section, a taxpayer shall include one or more tax credit certificates with the taxpayer’s tax return.
   b.  The tax credit certificate shall contain the taxpayer’s name, address, tax identification number, the amount of the credit, and any other information required by the department of revenue.
   c.  The tax credit certificate, unless rescinded by the department of revenue, shall be accepted by the department of revenue as payment for taxes imposed in chapter 422, division II, subject to any conditions or restrictions placed by the department of revenue upon the face of the tax credit certificate and subject to the limitations of this tax credit.
   6.  A tax credit in excess of the taxpayer’s liability for the tax year is not refundable but may be credited to the tax liability for the following five tax years or until depleted, whichever is earlier. However, if the taxpayer enters into active military service as a member of the Iowa army national guard, the Iowa air national guard, the active military forces of the United States, the army national guard of the United States, or the air national guard of the United States, or enrolls in an accredited private institution as defined in section 261.9 or in an institution of higher learning governed by the state board of regents, the tax credit may be credited to the tax liability for an additional two years or until depleted, whichever is earlier. A tax credit shall not be carried back to a tax year prior to the tax year in which the taxpayer redeems the tax credit. A tax credit shall not be transferable to any other person.
    Sec. 2.  NEW SECTION.  422.11K  High-demand occupation tax credit.
   The taxes imposed under this division, less the credits allowed under section 422.12, shall be reduced by a high-demand occupation tax credit allowed under section 260C.41.
    Sec. 3.  APPLICABILITY.  This Act applies to tax years beginning on or after January 1, 2020.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill provides for a high-demand occupation tax credit to facilitate an increase in the number of Iowans prepared to enter high-demand occupational fields.
   To qualify, the taxpayer must enroll in and attend a course of study at a community college which results in the community college conferring a credential that qualifies the taxpayer for a high-demand occupation. The bill defines “high-demand occupation” as an occupation in the fields of science, technology, engineering, and mathematics, and occupations aligned with any of six career and technical education service areas.
   The taxpayer must also execute an agreement with the community college for at least two years, but not more than five years, under which the taxpayer maintains a grade point average of at least 2.5 on a 4.0 grade scale.
   If the taxpayer meets the terms of the agreement, the community college submits to the department of revenue the total amount of tuition and mandatory fees paid by the taxpayer in earning a credential, and the department must issue the tax credit certificate. The tax credit shall equal the gross amount paid by the taxpayer to the community college for tuition and mandatory fees.
   A tax credit in excess of the taxpayer’s liability for the tax year is not refundable but may be credited to the personal net income tax liability for the following five tax years or until depleted, whichever is earlier. However, if the taxpayer enters into active military service or enrolls in an accredited private postsecondary institution in Iowa or a regents university, the tax credit may be credited to the tax liability for an additional two years or until depleted, whichever is earlier. 
   The bill applies to tax years beginning on or after January 1, 2020.