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House File 2410

Partial Bill History

Bill Text

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
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