Text: HF02409 Text: HF02411 Text: HF02400 - HF02499 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. NEW SECTION. 15.351 SHORT TITLE. 1 2 This chapter shall be known as the "Iowa Enterprise Zone 1 3 Act." 1 4 Sec. 2. NEW SECTION. 15.352 DEFINITIONS. 1 5 As used in this chapter: 1 6 1. "Enterprise zone" means an area of this state declared 1 7 by the department to be eligible for the benefits of this 1 8 part. 1 9 2. "Qualified business" means any person, corporation, or 1 10 other entity engaged in the active conduct of a trade or 1 11 business, limited to the business location within the 1 12 enterprise zone and not extending to related interests or 1 13 business locations outside the zone, which meets the following 1 14 criteria: 1 15 a. Has at least fifty percent of its employees performing 1 16 substantially all of their services within an enterprise zone. 1 17 b. Has individuals from one or more of the following three 1 18 categories constituting at least twenty-five percent of the 1 19 employees of the business. 1 20 (1) Residents of an enterprise zone. 1 21 (2) Individuals who have been unemployed for at least the 1 22 entire year prior to obtaining employment with the business. 1 23 (3) Individuals who have rejected public assistance 1 24 benefits, based on need and intended to alleviate poverty, for 1 25 at least the entire year prior to obtaining employment with 1 26 the business. 1 27 3. "Qualified employee" means any employee who works for a 1 28 qualified business. 1 29 4. "Qualified property" means any of the following: 1 30 a. Any tangible personal property located in an enterprise 1 31 zone used predominantly by the taxpayer in the zone in the 1 32 active conduct of a trade or business. 1 33 b. Any real property located in such zone which is used 1 34 predominantly by the taxpayer in the active conduct of a trade 1 35 or business. 2 1 Sec. 3. NEW SECTION. 15.353 APPLICATION TO DEPARTMENT. 2 2 1. Any city or county may designate any area or areas 2 3 within its jurisdiction to be an economically depressed area. 2 4 The city or county may then make written application to the 2 5 department to have the area declared to be an enterprise zone. 2 6 The application shall include a description of the location of 2 7 the area or areas in question and such other information as 2 8 the department may require. 2 9 2. Upon receipt of an application from a city or county 2 10 the department shall review the application to determine 2 11 whether the area or areas described in the application qualify 2 12 to be designated an enterprise zone. 2 13 3. The department shall complete its review within one 2 14 hundred twenty days of receipt of the application, but may 2 15 extend this time period an additional sixty days if necessary. 2 16 If the department denies the application, it shall inform the 2 17 city or county of the fact along with the reasons for the 2 18 denial. 2 19 Sec. 4. NEW SECTION. 15.354 ENTERPRISE ZONES – 2 20 1. Any area of a city or county may be designated an 2 21 enterprise zone if the area has a continuous boundary, and is 2 22 an area of low standard of living, unemployment above the 2 23 statewide average, and economic distress. 2 24 2. An area meets the requirements of subsection 1 if any 2 25 of the following exist: 2 26 a. The average rate of unemployment in the area for the 2 27 most recent eighteen-month period for which data is available 2 28 was at least one and one-half times the average state rate of 2 29 unemployment for the eighteen-month period. 2 30 b. At least seventy percent of the residents living in the 2 31 area have incomes below eighty percent of the median income of 2 32 the residents of the city or county requesting designation. 2 33 c. The population of the area decreased by ten percent or 2 34 more between 1980 and 1990 as indicated by the appropriate 2 35 federal census. 3 1 Sec. 5. NEW SECTION. 15.355 DESIGNATION OF ENTERPRISE 3 2 ZONES. 3 3 1. In each of the three calendar years beginning January 3 4 1, 1997, the authority may designate four enterprise zones. 3 5 In the year 2000, the authority may designate two enterprise 3 6 zones. In deciding which areas should be designated as 3 7 enterprise zones, the authority shall give preference to: 3 8 a. Areas with the lowest average wages, highest 3 9 unemployment, and general distress. 3 10 b. Areas that have the widest support from the city or 3 11 county seeking designation, the community, residents, local 3 12 business, and private organizations. 3 13 c. Areas for which the city or county seeking designation 3 14 has made or will make the greatest effort to encourage 3 15 economic activity and remove impediments to job creation, 3 16 including but not limited to a reduction of tax rates or fees, 3 17 an increase in the level or efficiency of local services, and 3 18 a simplification or streamlining of governmental requirements 3 19 on employers or employees, taking into account the resources 3 20 available to the city or county to make such efforts. 3 21 2. Any designation of an area as an enterprise zone shall 3 22 remain in effect during the period beginning on the date of 3 23 designation and ending on December 31 of the twentieth year 3 24 following designation. 3 25 3. The department may remove designation of any area as an 3 26 enterprise zone if such area no longer meets the criteria for 3 27 designation as set out in this part or by rule adopted by the 3 28 department, provided that no designation shall be removed less 3 29 than ten years from the date of original designation. 3 30 Sec. 6. NEW SECTION. 15.356 ADMINISTRATION. 3 31 The department shall administer this part and shall have 3 32 the following powers and duties: 3 33 1. To establish criteria for determining which areas shall 3 34 be designated as enterprise zones. 3 35 2. To monitor the implementation of this part and submit 4 1 reports evaluating the effectiveness of the program and any 4 2 suggestions for legislation to the governor and general 4 3 assembly by October 1 of any year. 4 4 3. To conduct a continuing evaluation program of 4 5 enterprise zones. 4 6 4. To assist the city or county in obtaining federal 4 7 status as enterprise zones. 4 8 5. To assist the city or county which designated the 4 9 enterprise zone in obtaining assistance from any other agency 4 10 of state government, including, but not limited to, assistance 4 11 in providing training and technical assistance to qualified 4 12 businesses within an enterprise zone. 4 13 Sec. 7. NEW SECTION. 15.357 LICENSES. 4 14 1. The department shall establish and design for public 4 15 display a master business license which shall certify that the 4 16 qualifying business has obtained all necessary state agency 4 17 permits, licenses, certificates, approvals, registrations, 4 18 charters, or any other form of permission required by law, 4 19 including agency rule, to engage in business in an enterprise 4 20 zone. 4 21 2. The department shall provide information and 4 22 appropriate assistance to persons desiring to locate and 4 23 engage in business in a zone regarding the state licenses, 4 24 permits, certificates, approvals, registrations, charters, and 4 25 any other forms of permission required by law to engage in 4 26 business in the state. 4 27 3. Notwithstanding any provision of this part, the 4 28 authority for determining if any requested licenses, permits, 4 29 certificates, approvals, registrations, charters, or any other 4 30 form of permission required by law to be issued shall remain 4 31 with the agency otherwise legally authorized to issue the 4 32 license. 4 33 Sec. 8. NEW SECTION. 15.358 DEVELOPMENT BENEFITS. 4 34 1. A qualified business may claim a corporate tax credit 4 35 up to a maximum of ten percent. Any credit in excess of the 5 1 tax liability for the tax year may be credited to the tax 5 2 liability for the following seven years or until depleted, 5 3 whichever occurs earlier. If the business is a partnership, 5 4 subchapter S corporation, limited liability company, or estate 5 5 or trust electing to have the income taxed directly to the 5 6 individual, an individual may claim the tax credit allowed. 5 7 The amount claimed by the individual shall be based upon the 5 8 pro rata share of the individual's earnings of the 5 9 partnership, subchapter S corporation, limited liability 5 10 company, or estate or trust. 5 11 2. Employees shall receive, for the purpose of determining 5 12 their state income tax liability, a deduction of up to ten 5 13 thousand dollars for wage income earned from employment within 5 14 an enterprise zone. 5 15 3. Sales, services, and use tax refund – contractor or 5 16 subcontractor. The qualified business shall be entitled to a 5 17 refund of the taxes paid under chapters 422 and 423 for gas, 5 18 electricity, water, or sewer utility services, goods, wares, 5 19 or merchandise, or on services rendered, furnished, or 5 20 performed to or for a contractor or subcontractor and used in 5 21 the fulfillment of a written contract relating to the 5 22 construction or rehabilitation or equipping of a facility 5 23 within the zone of the qualified business. Taxes attributable 5 24 to intangible property and furniture and furnishings shall not 5 25 be refunded. 5 26 To receive the refund a claim shall be filed by the 5 27 qualified business with the department of revenue and finance 5 28 as follows: 5 29 a. The contractor or subcontractor shall state under oath, 5 30 on forms provided by the department, the amount of the sales 5 31 of goods, wares, or merchandise or services rendered, 5 32 furnished, or performed, including water, sewer, gas, and 5 33 electric utility services for use in the zone upon which sales 5 34 or use tax has been paid, and shall file the forms with the 5 35 qualified business before final settlement is made. 6 1 b. The qualified business shall, not more than six months 6 2 after project completion, make application to the department 6 3 for any refund of the amount of the taxes paid pursuant to 6 4 chapter 422 or 423 upon any goods, wares, or merchandise, or 6 5 services rendered, furnished, or performed, including water, 6 6 sewer, gas, and electric utility services. The application 6 7 shall be made in the manner and upon forms to be provided by 6 8 the department, and the department shall audit the claim and, 6 9 if approved, issue a warrant to the qualified business in the 6 10 amount of the sales or use tax which has been paid to the 6 11 state of Iowa under a contract. A claim filed by the 6 12 qualified business in accordance with this subsection shall 6 13 not be denied by reason of a limitation provision set forth in 6 14 chapter 421, 422, or 423. 6 15 c. A contractor or subcontractor who willfully makes a 6 16 false report of tax paid under the provisions of this 6 17 subsection is guilty of a simple misdemeanor and in addition 6 18 is liable for the payment of the tax and any applicable 6 19 penalty and interest. 6 20 4. All property taxes within an enterprise zone may be 6 21 reduced by the city or county by up to fifty percent ratable 6 22 over the first two years after the zone is established and in 6 23 operation. 6 24 Sec. 9. NEW SECTION. 15.361 PERIOD OF TAX BENEFITS. 6 25 All tax reductions provided by this Act applying within a 6 26 particular enterprise zone are to continue for twenty years 6 27 after the zone is established. The reductions are then to be 6 28 phased out over the next five years. Any qualified business 6 29 that is relying on the particular enterprise zone during this 6 30 five-year period to meet the criteria for a qualified business 6 31 shall have the reductions applied to it reduced accordingly, 6 32 with the reductions completely phased out after the five-year 6 33 period. 6 34 EXPLANATION 6 35 This bill provides for the establishment of enterprise 7 1 zones by the department of economic development. To establish 7 2 an enterprise zone, a city or county designates an area as 7 3 economically depressed and applies to the department to have 7 4 the area declared an enterprise zone. 7 5 The department may designate an area an enterprise zone if 7 6 the area is one of a low standard of living, unemployment 7 7 above the statewide average, and economic distress. Four 7 8 enterprise zones may be designated in years 1997, 1998, and 7 9 1999 and two enterprise zones may be designated in the year 7 10 2000 for a total of 14. 7 11 The department is to design a master license for use by 7 12 qualified businesses indicating that the business has all 7 13 necessary permits and licenses to engage in business. The 7 14 department is to assist in obtaining the master license but 7 15 each agency currently issuing the permit or license shall 7 16 continue to have authority to issue the permit or license. 7 17 Development benefits to a qualified business include an 7 18 income tax credit of 10 percent, a state income tax deduction 7 19 of up to $10,000 for each employee of the qualified business, 7 20 and a reduction in property taxes of up to 50 percent. Tax 7 21 benefits in enterprise zones last for 20 years. 7 22 LSB 3929HH 76 7 23 mk/sc/14
Text: HF02409 Text: HF02411 Text: HF02400 - HF02499 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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