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PAG LIN 1 1 DIVISION I 1 2 INDEXATION 1 3 Section 1. Section 422.4, subsection 1, paragraph a, Code 1 4 1995, is amended to read as follows: 1 5 a. "Annual inflation factor" means an index, expressed as 1 6 a percentage, determined by the department by October 15 of 1 7 the calendar year preceding the calendar year for which the 1 8 factor is determined, which reflects the purchasing power of 1 9 the dollar as a result of inflation during the fiscal year 1 10 ending in the calendar year preceding the calendar year for 1 11 which the factor is determined. In determining the annual 1 12 inflation factor, the department shall use the annual percent 1 13 change, but not less than zero percent, in theimplicit price1 14deflator for the gross national productgross domestic product 1 15 price deflator computed for the second quarter of the calendar 1 16 year by the bureau of economic analysis of the United States 1 17 department of commerce and shall addone-halfall of that 1 18 percent change to one hundred percent. The annual inflation 1 19 factor and the cumulative inflation factor shall each be 1 20 expressed as a percentage rounded to the nearest one-tenth of 1 21 one percent. The annual inflation factor shall not be less 1 22 than one hundred percent. 1 23 Sec. 2. Section 422.4, subsection 1, paragraph d, Code 1 24 1995, is amended by striking the paragraph. 1 25 Sec. 3. Section 422.4, subsection 2, paragraph a, Code 1 26 1995, is amended to read as follows: 1 27 a. "Annual standard deduction factor" means an index, 1 28 expressed as a percentage, determined by the department by 1 29 October 15 of the calendar year preceding the calendar year 1 30 for which the factor is determined, which reflects the 1 31 purchasing power of the dollar as a result of inflation during 1 32 the fiscal year ending in the calendar year preceding the 1 33 calendar year for which the factor is determined. In 1 34 determining the annual standard deduction factor, the 1 35 department shall use the annual percent change, but not less 2 1 than zero percent, in theimplicit price deflator for the2 2gross national productgross domestic product price deflator 2 3 computed for the second quarter of the calendar year by the 2 4 bureau of economic analysis of the United States department of 2 5 commerce and shall addone-halfall of that percent change to 2 6 one hundred percent. The annual standard deduction factor and 2 7 the cumulative standard deduction factor shall each be 2 8 expressed as a percentage rounded to the nearest one-tenth of 2 9 one percent. The annual standard deduction factor shall not 2 10 be less than one hundred percent. 2 11 Sec. 4. This division of this Act, being deemed of 2 12 immediate importance, takes effect upon enactment and applies 2 13 to the computation of the annual inflation factor and annual 2 14 standard deduction factor for calendar years beginning on or 2 15 after January 1, 1996. The department of revenue and finance 2 16 shall adjust the annual inflation factor and annual standard 2 17 deduction factor previously computed for the 1996 calendar 2 18 year to reflect the change made in the computation of those 2 19 factors in this Act. 2 20 DIVISION II 2 21 SCHOOL PROPERTY TAX 2 22 Sec. 5. Section 257.1, subsection 2, unnumbered paragraph 2 23 2, Code Supplement 1995, is amended to read as follows: 2 24 For the budget year commencing July 1,19911996, and for 2 25 each succeeding budget year the regular program foundation 2 26 base per pupil iseighty-threeeighty-seven and five-tenths 2 27 percent of the regular program state cost per pupil, except 2 28 that the regular program foundation base per pupil for the 2 29 portion of weighted enrollment that is additional enrollment 2 30 because of special education is seventy-nine percent of the 2 31 regular program state cost per pupil. For the budget year 2 32 commencing July 1, 1991, and for each succeeding budget year 2 33 the special education support services foundation base is 2 34 seventy-nine percent of the special education support services 2 35 state cost per pupil. The combined foundation base is the sum 3 1 of the regular program foundation base and the special 3 2 education support services foundation base. 3 3 Sec. 6. This division of this Act, being deemed of 3 4 immediate importance, takes effect upon enactment and applies 3 5 to the computation of school foundation aid payable during 3 6 school budget years beginning on or after July 1, 1996. 3 7 DIVISION III 3 8 HOMESTEAD, MILITARY, AND ELDERLY OR DISABLED 3 9 TAX CREDIT AND REIMBURSEMENT CLAIMS 3 10 Sec. 7. Section 8.59, Code 1995, is amended to read as 3 11 follows: 3 12 8.59 APPROPRIATIONS FREEZE. 3 13 Notwithstanding contrary provisions of the Code, the 3 14 amounts appropriated under the applicable sections of the Code 3 15 for fiscal years commencing on or after July 1, 1993, are 3 16 limited to those amounts expended under those sections for the 3 17 fiscal year commencing July 1, 1992. If an applicable section 3 18 appropriates moneys to be distributed to different recipients 3 19 and the operation of this section reduces the total amount to 3 20 be distributed under the applicable section, the moneys shall 3 21 be prorated among the recipients. As used in this section, 3 22 "applicable sections" means the following sections: 53.50, 3 23 229.35, 230.8, 230.11, 405A.8, 411.20,425.1, 425.39, 426A.1,3 24 663.44, and 822.5. 3 25 Sec. 8. Section 425.1, subsection 1, Code 1995, is amended 3 26 to read as follows: 3 27 1. A homestead credit fund is created. There is 3 28 appropriated annually from the general fund of the state to 3 29 the department of revenue and finance to be credited to the 3 30 homestead credit fund,an amount sufficientthe sum of one 3 31 hundred fourteen million four hundred thousand dollars to 3 32 implement this chapter. 3 33 The director of revenue and finance shall issue warrants on 3 34 the homestead credit fund payable to the county treasurers of 3 35 the several counties of the state under this chapter. 4 1 Sec. 9. Section 425.39, Code 1995, is amended to read as 4 2 follows: 4 3 1. The extraordinary property tax credit and reimbursement 4 4 fund is created. There is appropriated annually from the 4 5 general fund of the state to the department of revenue and 4 6 finance to be credited to the extraordinary property tax 4 7 credit and reimbursement fund, from funds not otherwise 4 8 appropriated,an amount sufficientthe sum of twelve million 4 9 five hundred thousand dollars to implement this division. 4 10 2. If the amount appropriated under subsection 1, as4 11limited by section 8.59,plus any supplemental appropriation 4 12 made for purposes of this section for a fiscal year is 4 13 insufficient to pay all claims in full, the director shall 4 14 pay, in full, all claims to be paid during the fiscal year for 4 15 reimbursement of rent constituting property taxes paid or if 4 16 moneys are insufficient to pay all such claims on a pro rata 4 17 basis. If the amount of claims for credit for property taxes 4 18 due to be paid during the fiscal year exceed the amount 4 19 remaining after payment to renters, the director of revenue 4 20 and finance shall prorate the payments to the counties for the 4 21 property tax credit. In order for the director to carry out 4 22 the requirements of this subsection, notwithstanding any 4 23 provision to the contrary in this division, claims for 4 24 reimbursement for rent constituting property taxes paid filed 4 25 before May 1 of the fiscal year shall be eligible to be paid 4 26 in full during the fiscal year and those claims filed on or 4 27 after May 1 of the fiscal year shall be eligible to be paid 4 28 during the following fiscal year and the director is not 4 29 required to make payments to counties for the property tax 4 30 credit before June 15 of the fiscal year. 4 31 Sec. 10. Section 426A.1, Code 1995, is amended to read as 4 32 follows: 4 33 426A.1 APPROPRIATION. 4 34 There is appropriated from the general fund of the state 4 35 theamounts necessarysum of two million eight hundred 5 1 thousand dollars to fund the credits provided under this 5 2 chapter. 5 3 Sec. 11. It is the intent of the general assembly to 5 4 provide property tax relief to the citizens of Iowa by fully 5 5 funding the homestead credit, the elderly and disabled credit, 5 6 and military tax exemption. The general assembly directs 5 7 local officials to join the general assembly in providing 5 8 property tax relief to the fullest extent possible by reducing 5 9 property tax levies in proportion to increased reimbursement 5 10 from the state. However, the general assembly recognizes that 5 11 the most efficient method of achieving property tax relief is 5 12 through a locally determined strategy based upon the fiscal 5 13 needs of the local government. This section applies to the 5 14 1996-1997 fiscal year only. 5 15 Sec. 12. This division of this Act takes effect July 1, 5 16 1996, and applies to homestead, military service, and elderly 5 17 or disabled tax credit and rent reimbursement claims payable 5 18 in fiscal years beginning on or after July 1, 1996. 5 19 DIVISION IV 5 20 SUBCHAPTER S CORPORATIONS 5 21 Sec. 13. Section 422.4, Code 1995, is amended by adding 5 22 the following new subsection: 5 23 NEW SUBSECTION. 17A. The term "value-added corporation" 5 24 means a corporation that purchases, receives, or holds 5 25 personal property of any description and which adds to its 5 26 value by a process of manufacturing, construction, processing, 5 27 or combining of different materials, and shall specifically 5 28 include the economic activity identified in divisions C and D 5 29 of the standard industrial classification codes appearing in 5 30 13 C.F.R. ch. 1(1-1-94 edition), with a view to selling the 5 31 finished product for gain or profit. A corporation engaged in 5 32 more than one business activity is a value-added corporation 5 33 if more than fifty percent of its gross receipts, figured on a 5 34 three-year annual average, or such shorter period as the 5 35 corporation shall have been in existence, are from the 6 1 processes previously identified. 6 2 Sec. 14. Section 422.5, subsection 1, paragraph j, Code 6 3 1995, is amended to read as follows: 6 4 j. (1) The tax imposed upon the taxable income of a 6 5 nonresident shall be computed by reducing the amount 6 6 determined pursuant to paragraphs "a" through "i" by the 6 7 amounts of nonrefundable credits under this division and by 6 8 multiplying this resulting amount by a fraction of which the 6 9 nonresident's net income allocated to Iowa, as determined in 6 10 section 422.8, subsection 2, paragraph "a", is the numerator 6 11 and the nonresident's total net income computed under section 6 12 422.7 is the denominator. This provision also applies to 6 13 individuals who are residents of Iowa for less than the entire 6 14 tax year. 6 15 (2) The tax imposed upon the taxable income of a resident 6 16 shareholder in a value-added corporation which has in effect 6 17 for the tax year an election under subchapter S of the 6 18 Internal Revenue Code and carries on business within and 6 19 without the state may be computed by reducing the amount 6 20 determined pursuant to paragraphs "a" through "i" by the 6 21 amounts of nonrefundable credits under this division and by 6 22 multiplying this resulting amount by a fraction of which the 6 23 resident's net income allocated to Iowa, as determined in 6 24 section 422.8, subsection 2, paragraph "b", is the numerator 6 25 and the resident's total net income computed under section 6 26 422.7 is the denominator. This paragraph also applies to 6 27 individuals who are residents of Iowa for less than the entire 6 28 tax year. 6 29 (a) In order for a resident shareholder in a value-added 6 30 corporation which has in effect for the tax year an election 6 31 under subchapter S of the Internal Revenue Code and carries on 6 32 business within and without the state, to claim the benefits 6 33 of apportionment of income of the value-added corporation, the 6 34 taxpayer must completely fill out the return, determine the 6 35 taxpayer's income tax liability without the benefit of 7 1 apportionment of the value-added corporation's income, and pay 7 2 the amount of tax owed. The taxpayer shall recompute the 7 3 taxpayer's income tax liability, by applying the provisions of 7 4 this subparagraph on a special return. This special return 7 5 shall be filed under rules of the director and constitutes a 7 6 claim for refund of the difference between the amount of tax 7 7 the taxpayer paid as determined without the provisions of this 7 8 subparagraph and the amount of tax determined with the 7 9 provisions of this subparagraph. 7 10 (b) This subparagraph shall not affect the amount of the 7 11 taxpayer's checkoff to the Iowa election campaign fund under 7 12 section 56.18, the checkoff for the fish and game fund in 7 13 section 107.16, the credits from tax provided in sections 7 14 422.10, 422.11A, and 422.12 and the allocation of these 7 15 credits between spouses if the taxpayers filed separate 7 16 returns or separately on combined returns. 7 17 (c) For any tax year, the aggregate amount of refund 7 18 claims that shall be paid pursuant to this subparagraph shall 7 19 not exceed five million dollars. If, for a tax year, the 7 20 aggregate amount of refund claims filed pursuant to this 7 21 subparagraph exceeds five million dollars, each claim for 7 22 refund shall be paid on a pro rata basis so that the aggregate 7 23 amount of refund claims does not exceed five million dollars. 7 24 In the case where refund claims are not paid in full, the 7 25 amount of the refund to which the taxpayer is entitled under 7 26 this subparagraph is the pro rata amount that was paid and the 7 27 taxpayer is not entitled to a refund of the unpaid portion and 7 28 is not entitled to carry that amount forward or backward to 7 29 another tax year. Taxpayers shall not use refunds as 7 30 estimated payments for the succeeding tax year. Taxpayers 7 31 whose tax years begin on January 1 must file their refund 7 32 claims by October 31 of the calendar year following the end of 7 33 their tax year to be eligible for refunds. Taxpayers whose 7 34 tax years begin on a date other than January 1 must file their 7 35 refund claims by the end of the tenth month following the end 8 1 of their tax years to be eligible. The department shall 8 2 determine on February 1 of the second succeeding calendar year 8 3 if the total amount of claims for refund exceeds five million 8 4 dollars for the tax year. Notwithstanding any other 8 5 provision, interest shall not be due on any refund claims that 8 6 are paid by the last day of February of the second succeeding 8 7 calendar year. If the claim is not payable on February 1 of 8 8 the second succeeding calendar year, because the taxpayer is a 8 9 fiscal year filer, then the amount of the claim allowed shall 8 10 be in the same ratio as the refund claims available on 8 11 February 1 of the second succeeding calendar year. These 8 12 claims shall be funded by moneys appropriated for payment of 8 13 individual income tax refunds. 8 14 Sec. 15. Section 422.5, subsection 1, paragraph k, 8 15 unnumbered paragraph 4, Code 1995, is amended to read as 8 16 follows: 8 17 In the case of a resident, including a resident estate or 8 18 trust, the state's apportioned share of the state alternative 8 19 minimum tax is one hundred percent of the state alternative 8 20 minimum tax computed in this subsection. In the case of a 8 21 resident or part year resident shareholder in a value-added 8 22 corporation which has in effect for the tax year an election 8 23 under subchapter S of the Internal Revenue Code and carries on 8 24 business within and without the state, a nonresident, 8 25 including a nonresident estate or trust, or an individual, 8 26 estate, or trust that is domiciled in the state for less than 8 27 the entire tax year, the state's apportioned share of the 8 28 state alternative minimum tax is the amount of tax computed 8 29 under this subsection, reduced by the applicable credits in 8 30 sections 422.10 through 422.12 and this result multiplied by a 8 31 fraction with a numerator of the sum of state net income 8 32 allocated to Iowa as determined in section 422.8, subsection 8 33 2, paragraph "a" or "b" as applicable, plus tax preference 8 34 items, adjustments, and losses under subparagraph (1) 8 35 attributable to Iowa and with a denominator of the sum of 9 1 total net income computed under section 422.7 plus all tax 9 2 preference items, adjustments, and losses under subparagraph 9 3 (1). In computing this fraction, those items excludable under 9 4 subparagraph (1) shall not be used in computing the tax 9 5 preference items. Married taxpayers electing to file separate 9 6 returns or separately on a combined return must allocate the 9 7 minimum tax computed in this subsection in the proportion that 9 8 each spouse's respective preference items, adjustments, and 9 9 losses under subparagraph (1) bear to the combined preference 9 10 items, adjustments, and losses under subparagraph (1) of both 9 11 spouses. 9 12 Sec. 16. Section 422.8, subsection 2, Code 1995, is 9 13 amended to read as follows: 9 14 2. a. Nonresident's net income allocated to Iowa is the 9 15 net income, or portionthereofof net income, which is derived 9 16 from a business, trade, profession, or occupation carried on 9 17 within this state or income from any property, trust, estate, 9 18 or other source within Iowa. However, income derived from a 9 19 business, trade, profession, or occupation carried on within 9 20 this state and income from any property, trust, estate, or 9 21 other source within Iowa shall not include distributions from 9 22 pensions, including defined benefit or defined contribution 9 23 plans, annuities, individual retirement accounts, and deferred 9 24 compensation plans or any earnings attributable thereto so 9 25 long as the distribution is directly related to an 9 26 individual's documented retirement and received while the 9 27 individual is a nonresident of this state. If a business, 9 28 trade, profession, or occupation is carried on partly within 9 29 and partly without the state, only the portion of the net 9 30 income which is fairly and equitably attributable to that part 9 31 of the business, trade, profession, or occupation carried on 9 32 within the state is allocated to Iowa for purposes of section 9 33 422.5, subsection 1, paragraph "j", and section 422.13 and 9 34 income from any property, trust, estate, or other source 9 35 partly within and partly without the state is allocated to 10 1 Iowa in the same manner, except that annuities, interest on 10 2 bank deposits and interest-bearing obligations, and dividends 10 3 are allocated to Iowa only to the extent to which they are 10 4 derived from a business, trade, profession, or occupation 10 5 carried on within the state. 10 6 b. A resident's income allocable to Iowa is the income 10 7 determined under section 422.7 reduced by items of income and 10 8 expenses from a subchapter S corporation which is a value- 10 9 added corporation that carries on business within and without 10 10 the state when those items of income and expenses pass 10 11 directly to the shareholders under provisions of the Internal 10 12 Revenue Code. These items of income and expenses are 10 13 increased by the greater of the following: 10 14 (1) The net income or loss of the corporation which is 10 15 fairly and equitably attributable to this state under section 10 16 422.33, subsections 2 and 3. 10 17 (2) Any cash or the value of property distributions which 10 18 are made only to the extent that they are paid from income 10 19 upon which Iowa income tax has not been paid, as determined 10 20 under rules of the director, reduced by fifty percent of the 10 21 amount of any of these distributions that are made to enable 10 22 the shareholder to pay federal income tax on items of income, 10 23 loss, and expenses from the corporation. 10 24 Sec. 17. Section 422.8, Code 1995, is amended by adding 10 25 the following new subsection: 10 26 NEW SUBSECTION. 6. If the resident or part-year resident 10 27 is a shareholder of a value-added corporation which has in 10 28 effect an election under subchapter S of the Internal Revenue 10 29 Code, subsections 1 and 3 do not apply to any income taxes 10 30 paid to another state or foreign country on the income from 10 31 the value-added corporation which has in effect an election 10 32 under subchapter S of the Internal Revenue Code. 10 33 Sec. 18. This division of this Act, being deemed of 10 34 immediate importance, takes effect upon enactment and applies 10 35 retroactively to January 1, 1996, for tax years beginning on 11 1 or after that date. 11 2 DIVISION V 11 3 LIVESTOCK PRODUCTION TAX CREDIT 11 4 Sec. 19. NEW SECTION. 422.120 LIVESTOCK PRODUCTION TAX 11 5 CREDIT ALLOWED. 11 6 1. a. There is allowed a state tax credit for livestock 11 7 production operations located in the state. The amount of the 11 8 credit equals ten cents for each corn equivalent consumed by 11 9 the livestock in the production operation as specified under 11 10 this section. The credit shall be refunded as provided in 11 11 section 422.121. 11 12 b. The credit shall be available to an individual or 11 13 corporate taxpayer who owns livestock, if all of the following 11 14 apply: 11 15 (1) The total net worth of the taxpayer during the 11 16 taxpayer's tax year is less than one million dollars. 11 17 (2) The taxpayer receives, or accrues in the case of an 11 18 accrual-basis taxpayer, more than one-half of the taxpayer's 11 19 gross income from farming or ranching operations during the 11 20 tax year. Gross income from farming or ranching is the amount 11 21 reported as gross income on schedule F, or the equivalent 11 22 schedule, of the taxpayer's income tax return, the total gains 11 23 from sales of breeding livestock, and, if applicable, the 11 24 taxpayer's distributive share of income from farming or 11 25 ranching from a partnership, limited liability company, 11 26 subchapter S corporation, or an estate or trust. To determine 11 27 whether a taxpayer receives more than one-half of gross income 11 28 from farming or ranching, the taxpayer's amount of gross 11 29 income from farming or ranching shall be divided by the 11 30 taxpayer's total gross income as defined in section 61 of the 11 31 federal Internal Revenue Code. 11 32 2. The amount of the credit per operation is determined by 11 33 adding together for each head of livestock in the operation 11 34 the product of ten cents times the number of corn equivalents 11 35 consumed by that head of livestock. The amount of livestock 12 1 production credit per operation per tax year shall not exceed 12 2 three thousand dollars and the amount of livestock production 12 3 credit per taxpayer per tax year shall not exceed three 12 4 thousand dollars. 12 5 The maximum amount of corn equivalents for a head of 12 6 livestock in a production operation is the following: 12 7 a. Hog operations: Corn equivalents: 12 8 (1) Farrow to finish 13.0 12 9 (2) Farrow to feeder pig 2.6 12 10 (3) Finishing feeder pigs 10.4 12 11 b. Poultry operations: 12 12 (1) Layers 0.88 12 13 (2) Turkeys 1.5 12 14 (3) Broilers 0.15 12 15 c. Beef operations: 12 16 (1) Cow-calf 111.5 12 17 (2) Stocker 41.5 12 18 (3) Feedlot 75.0 12 19 (4) Dairy 350.0 12 20 d. Sheep operations: 12 21 (1) Ewe flock 20.5 12 22 (2) Feedlot 4.1 12 23 3. If the livestock operation is carried on partly within 12 24 and partly without the state, the portion of the operation 12 25 attributable to this state shall be determined pursuant to 12 26 rules adopted by the department. The department may adjust 12 27 the allocation upon request of the taxpayer in order to 12 28 reflect the actual livestock operation carried on within this 12 29 state. 12 30 4. An individual may claim the livestock production tax 12 31 credit allowed a partnership, limited liability company, 12 32 subchapter S corporation, or estate or trust electing to have 12 33 the income taxed directly to the individual. The amount 12 34 claimed by the individual shall be based upon the pro rata 12 35 share of the individual's earning of the partnership, limited 13 1 liability company, subchapter S corporation, or estate or 13 2 trust. 13 3 5. A fraudulent claim for a credit refund under this 13 4 division shall cause the forfeiture of any right or interest 13 5 to a tax credit refund in subsequent tax years under this 13 6 division. 13 7 Sec. 20. NEW SECTION. 422.121 APPROPRIATION. 13 8 Beginning with the fiscal year beginning July 1, 1997, 13 9 there is appropriated annually from the general fund of the 13 10 state two million dollars to refund the credits allowed under 13 11 this division. 13 12 Sec. 21. NEW SECTION. 422.122 REFUND OF LIVESTOCK 13 13 PRODUCTION CREDIT CLAIMS. 13 14 1. Each tax year the total amount of livestock production 13 15 credit refund claims that shall be paid pursuant to section 13 16 422.120 shall not exceed the amount appropriated by the 13 17 general assembly for that purpose. If the total dollar amount 13 18 of the refund claims exceeds that amount, each claim shall be 13 19 paid an amount equal to that amount divided by the total 13 20 number of claims, not to exceed the amount of the taxpayer's 13 21 claim. Remaining funds shall be prorated among those claims 13 22 not paid in full in the proportion that each such claim bears 13 23 to the total amount of such claims not paid in full. 13 24 2. In the case where refund claims are not paid in full, 13 25 the amount of the refund to which the taxpayer is entitled is 13 26 the amount computed in subsection 1, and paid to the taxpayer, 13 27 and the taxpayer is not entitled to any unpaid portion of a 13 28 claim and is not entitled to carry forward or backward to 13 29 another tax year any unpaid portion of a claim. A taxpayer 13 30 shall not use a refund as an estimated payment for the 13 31 succeeding tax year. 13 32 3. A taxpayer must file a claim for refund within ten 13 33 months from the last day of the taxpayer's tax year. An 13 34 extension for filing shall not be allowed. The department 13 35 shall determine by February 28 of the calendar year following 14 1 the calendar year in which the claims were filed if the total 14 2 amount of claims for refund exceeds the amount appropriated 14 3 for that purpose by the general assembly for the tax year. If 14 4 the claim is not payable on February 28 because the taxpayer 14 5 is a fiscal year filer, the claim shall be considered as a 14 6 claim filed for the following tax year. 14 7 4. A claim for refund shall be made on claim forms to be 14 8 made available by the department. In order for a taxpayer to 14 9 have a valid refund claim, the taxpayer must supply legible 14 10 copies of documents the director deems necessary to verify the 14 11 amount of the refund. 14 12 Sec. 22. FISCAL YEAR 1997-1998 APPROPRIATION. 14 13 Notwithstanding the livestock production operations described 14 14 in section 422.120, for the tax year beginning on or after 14 15 January 1, 1996, the appropriation in section 422.121 shall 14 16 only be used to satisfy claims for cow-calf production. 14 17 Sec. 23. APPLICABILITY. This division of this Act applies 14 18 to tax years beginning on or after January 1, 1996. 14 19 DIVISION VI 14 20 SCHOOL STUDY GOALS 14 21 Sec. 24. It is the intent of the general assembly to 14 22 support the study of the department of education required in 14 23 1996 Iowa Acts, House File 2477, if enacted, with the 14 24 specified goals of increasing the capacity of the whole school 14 25 to meet the needs of all children; increasing support 14 26 available to at-risk students; and ensuring predictable and 14 27 equitable special education funding at both the state and 14 28 local levels; and with the additional goal of achieving parity 14 29 between the percentage of regular program state cost per pupil 14 30 and the percentage for that portion of weighted enrollment 14 31 that is additional enrollment because of special education 14 32 which constitute the regular program foundation base and the 14 33 percentage of special education support services state cost 14 34 per pupil which constitutes the special education support 14 35 services foundation base. 15 1 DIVISION VII 15 2 FUNDING CREDITS AND EXEMPTIONS 15 3 Sec. 25. NEW SECTION. 25B.7 FUNDING PROPERTY TAX CREDITS 15 4 AND EXEMPTIONS. 15 5 1. Beginning with property taxes due and payable in the 15 6 fiscal year beginning July 1, 1997, the cost of providing a 15 7 property tax credit or property tax exemption which is enacted 15 8 by the general assembly on or after January 1, 1997, shall be 15 9 fully funded by the state. If a state appropriation made to 15 10 fund a credit or exemption which is enacted on or after 15 11 January 1, 1997, is not sufficient to fully fund the credit or 15 12 exemption, the political subdivision shall be required to 15 13 extend to the taxpayer only that portion of the credit or 15 14 exemption funded by the state appropriation. The department 15 15 of revenue and finance shall determine the portion of the 15 16 credit or exemption which will be funded by the state 15 17 appropriation. 15 18 2. The requirement for fully funding and the consequences 15 19 of not fully funding credits and exemptions under subsection 1 15 20 also apply to all of the following: 15 21 a. Homestead tax credit pursuant to sections 425.1 through 15 22 425.15. 15 23 b. Elderly, low-income, and disabled property tax credits 15 24 pursuant to sections 425.16 through 425.40. 15 25 c. Military service property tax credits and exemptions 15 26 pursuant to chapter 426A and sections 427.3 through 427.7. 15 27 Sec. 26. This division of this Act takes effect July 1, 15 28 1996. 15 29 SF 2449 15 30 mg/cc/26
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