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PAG LIN
1 1 Section 1. Section 15.329, Code 1997, is amended by adding
1 2 the following new subsection:
1 3 NEW SUBSECTION. 6. Any business located in a designated
1 4 renaissance zone pursuant to section 15E.186 shall be
1 5 considered an eligible business for purposes of sections
1 6 15.331 and 15.331A for the duration of the renaissance zone
1 7 designation.
1 8 Sec. 2. NEW SECTION. 15E.181 PURPOSE.
1 9 The general assembly finds that there exists in the state a
1 10 continuing need for programs to assist certain local
1 11 governmental units in encouraging economic development, the
1 12 consequent job creation and retention, and ancillary economic
1 13 growth in the state. To achieve these purposes, it is
1 14 necessary to assist and encourage the creation of renaissance
1 15 zones and provide temporary relief from certain taxes within
1 16 the renaissance zones.
1 17 Sec. 3. NEW SECTION. 15E.182 DEFINITIONS.
1 18 As used in this division, unless the context otherwise
1 19 requires:
1 20 1. "Board" means the Iowa economic development board
1 21 created in section 15.103.
1 22 2. "Department" means the Iowa department of economic
1 23 development.
1 24 3. "Development plan" means a written plan that addresses
1 25 the criteria for designation of a renaissance zone in section
1 26 15E.185. The department shall adopt rules pursuant to chapter
1 27 17A regarding the specific requirements for the development
1 28 plans.
1 29 4. "Local governmental unit" means a county, city, or
1 30 township.
1 31 5. "Person" means an individual, partnership, corporation,
1 32 association, limited liability company, governmental entity,
1 33 or other legal entity.
1 34 6. "Qualified local governmental unit" means either of the
1 35 following:
2 1 a. A county.
2 2 b. A city or township that contains an urban renewal area
2 3 as defined in section 403.17.
2 4 7. "Renaissance zone" means a geographic area so
2 5 designated by the board under this division.
2 6 8. "Rural area" means an area that lies outside the
2 7 boundaries of an urban area.
2 8 9. "Urban area" means an urbanized area with a population
2 9 of 25,000 or more.
2 10 Sec. 4. NEW SECTION. 15E.183 Qualifications.
2 11 1. A qualified local governmental unit may apply to the
2 12 board to designate the qualified local governmental unit or
2 13 part thereof as a renaissance zone if all of the following
2 14 criteria are met:
2 15 a. The geographic area of the proposed renaissance zone is
2 16 located within the boundaries of the qualified local
2 17 governmental unit that applies.
2 18 b. The application includes a development plan.
2 19 c. The proposed renaissance zone is not more than five
2 20 thousand acres in size.
2 21 d. The renaissance zone does not contain more than six
2 22 distinct geographic areas. The minimum size of a distinct
2 23 geographic area is ten acres. A distinct geographic area may
2 24 include, but shall not consist solely of, publicly owned land.
2 25 e. Not more than fifty percent of the real property in
2 26 each distinct geographic area is owned by the same person.
2 27 f. The application includes the proposed duration of
2 28 renaissance zone status, which may not exceed fifteen years.
2 29 g. The written approval of the city council if a qualified
2 30 local governmental unit is a city or township or the written
2 31 approval of the county board of supervisors if the local
2 32 governmental unit is a county.
2 33 2. A qualified local governmental unit shall not be a part
2 34 of more than one renaissance zone.
2 35 3. A qualified local governmental unit shall not have more
3 1 than one application under consideration by the board at any
3 2 time.
3 3 Sec. 5. NEW SECTION. 15E.184 DUTIES OF THE BOARD.
3 4 1. Applications for designation as a renaissance zone must
3 5 be submitted between July 1, 1997, and November 1, 1997. The
3 6 board shall review all applications submitted and determine
3 7 which applications meet the criteria contained in section
3 8 15E.185 between November 1, 1997, and December 30, 1997.
3 9 2. The board shall do all of the following:
3 10 a. Designate renaissance zones no later than December 30,
3 11 1997.
3 12 b. Subject to subsection 3, approve or reject the duration
3 13 of renaissance zone status as submitted in the application,
3 14 which may not exceed fifteen years.
3 15 c. Subject to subsection 3, approve or reject the
3 16 geographic boundaries and the total area of the renaissance
3 17 zone as submitted in the application.
3 18 3. The board shall not alter the geographic boundaries of
3 19 the renaissance zone or the duration of the renaissance zone
3 20 status described in the application unless the qualified local
3 21 governmental unit and the local governmental unit in which the
3 22 renaissance zone is to be located consent by resolution to the
3 23 alteration.
3 24 Sec. 6. NEW SECTION. 15E.185 CRITERIA.
3 25 1. In making a determination regarding the designation of
3 26 a renaissance zone, the board shall consider all of the
3 27 following criteria:
3 28 a. Evidence of adverse economic and socioeconomic
3 29 conditions within the proposed renaissance zone.
3 30 b. The viability of the development plan.
3 31 c. Whether the development plan is creative and innovative
3 32 in comparison to other applications.
3 33 d. Public and private commitment to and other resources
3 34 available for the proposed renaissance zone.
3 35 e. How renaissance zone designation would relate to a
4 1 broader plan for the community as a whole.
4 2 f. The level of demonstrated cooperation from surrounding
4 3 communities.
4 4 g. How the local regulatory burden will be eased for
4 5 businesses operating in the proposed renaissance zone.
4 6 h. Public and private commitment to improving abandoned
4 7 real property.
4 8 i. Any other information required by the board.
4 9 2. The board shall not designate an area as a renaissance
4 10 zone unless, as a part of the application, the qualified local
4 11 governmental unit provides a resolution from the governing
4 12 body of the qualified local governmental unit and each local
4 13 governmental unit, within which the proposed renaissance zone
4 14 is to be located, that states if the renaissance zone
4 15 designation is granted persons and property within the
4 16 renaissance zone are exempt from property taxes levied by that
4 17 local governmental unit for the duration of renaissance zone
4 18 status.
4 19 Sec. 7. NEW SECTION. 15E.186 DESIGNATION OF RENAISSANCE
4 20 ZONES.
4 21 The board shall not designate more than ten renaissance
4 22 zones within the state. Four of the renaissance zones shall
4 23 be located in urban areas and six of the renaissance zones
4 24 shall be located in rural areas. For purposes of determining
4 25 whether a renaissance zone is located in an urban area or a
4 26 rural area under this section, if any part of the renaissance
4 27 zone is located within an urban area, the entire renaissance
4 28 zone shall be considered to be located in an urban area.
4 29 Sec. 8. NEW SECTION. 15E.187 TAX INCENTIVES.
4 30 1. All of the following incentives shall be available
4 31 during the duration of renaissance zone designation:
4 32 a. All residents within the renaissance zone shall be
4 33 exempt from paying personal income taxes under section 422.5.
4 34 b. A taxpayer with a business located in a renaissance
4 35 zone shall be exempt from corporate income tax under chapter
5 1 422, division III, on the portion of net income reasonably
5 2 attributable to the trade or business or sources within the
5 3 renaissance zone. The method of attributing net income
5 4 received from within the renaissance zone and net income
5 5 received from outside the renaissance zone shall be calculated
5 6 in a similar manner to that used in section 422.33, subsection
5 7 2. A taxpayer with an office of a financial institution
5 8 located in a renaissance zone shall also be exempt from the
5 9 franchise tax in chapter 422, division V, on the portion of
5 10 net income received through the business activity in offices
5 11 located in the renaissance zone as determined by rules adopted
5 12 by the director of revenue and finance pursuant to section
5 13 422.65 on allocating the franchise tax.
5 14 c. All taxpayers owning property within the renaissance
5 15 zone shall be exempt from paying local property taxes on the
5 16 property located solely in the renaissance zone as provided in
5 17 section 427.1, subsection 30. This incentive shall not be
5 18 available to owners of residential rental property located in
5 19 the renaissance zone in tax years in which the property is not
5 20 in substantial compliance with all applicable state and local
5 21 zoning, building, housing, and health laws, ordinances, or
5 22 codes.
5 23 d. The tax imposed on the gross receipts from the sale,
5 24 furnishing, or service of gas, electricity, water, and heat to
5 25 persons in the renaissance zone shall be exempted as provided
5 26 in section 422.45, subsection 52.
5 27 e. A business located in a renaissance zone shall be
5 28 eligible to receive, for businesses located within the
5 29 renaissance zone, the sales, services, and use tax refund,
5 30 provided in section 15.331A, and the new jobs credit from
5 31 withholding, as provided in section 15.331.
5 32 2. During the last three years that the taxpayer is
5 33 eligible for an exemption, deduction, or credit described in
5 34 this section, the exemption, deduction, or credit shall be
5 35 reduced by the following percentages:
6 1 a. For the tax year that is two years before the final
6 2 year of designation as a renaissance zone, the reduction shall
6 3 be twenty-five percent.
6 4 b. For the tax year immediately preceding the final year
6 5 of designation as a renaissance zone, the reduction shall be
6 6 fifty percent.
6 7 c. For the tax year that is the final year of designation
6 8 as a renaissance zone, the reduction shall be seventy-five
6 9 percent.
6 10 Sec. 9. NEW SECTION. 15E.188 EXCEPTIONS.
6 11 1. A taxpayer shall not be eligible for the incentives
6 12 provided in section 15E.187 during any tax years in which the
6 13 taxpayer is delinquent in paying any federal, state, or local
6 14 taxes.
6 15 2. A taxpayer shall not be eligible for the incentives
6 16 provided in section 15E.187 during any tax years in which the
6 17 taxpayer owns residential rental property that is not in
6 18 substantial compliance with all applicable state and local
6 19 zoning, building, and housing laws, ordinances, or codes.
6 20 3. A business located in a qualified local governmental
6 21 unit that relocates from outside a renaissance zone into a
6 22 renaissance zone in that same qualified local governmental
6 23 unit shall not receive the exemptions, deductions, or credits
6 24 provided in section 15E.187 unless the governing body of the
6 25 qualified local governmental unit in which the renaissance
6 26 zone is located approves the relocation of the business.
6 27 4. If a business relocates more than twenty-five full-time
6 28 equivalent jobs from one or more local governmental units
6 29 other than a local governmental unit in which a renaissance
6 30 zone is located to a local governmental unit within a
6 31 renaissance zone, the business shall notify the department of
6 32 economic development and the local governmental unit or units
6 33 from which the jobs are being relocated of the relocation.
6 34 The business is not eligible for the exemptions, deductions,
6 35 or credits provided in section 15E.187 if the local
7 1 governmental unit from which the jobs are being relocated
7 2 adopts a resolution objecting to the relocation of the jobs
7 3 within sixty days after the notification by the business. The
7 4 business becomes eligible for the exemptions, deductions, and
7 5 credits provided in section 15E.187 when the local
7 6 governmental unit that objected to the relocation rescinds its
7 7 objection by resolution or fails to object within sixty days.
7 8 A local governmental unit that objects to the relocation of
7 9 jobs shall file a copy of all resolutions of objection and
7 10 rescission with the department of revenue and finance, the
7 11 department of economic development, and the local governmental
7 12 units that created the renaissance zone into which the jobs
7 13 are transferred.
7 14 5. An individual who is a resident of a renaissance zone
7 15 is eligible for an exemption, deduction, or credit under
7 16 section 15E.187 until the department of revenue and finance
7 17 determines that the aggregate state and local tax revenue
7 18 forgone as a result of all exemptions, deductions, or credits
7 19 granted under section 15E.187 to that individual reaches ten
7 20 million dollars.
7 21 Sec. 10. NEW SECTION. 15E.189 APPLICATION FORM.
7 22 The form of the application for a renaissance zone
7 23 designation shall be as specified by the department. At a
7 24 minimum, the application form shall incorporate the criteria
7 25 listed in section 15E.185. After the form of the application
7 26 is specified by the department, the department shall provide a
7 27 copy of the application to the general assembly. The board
7 28 may request any information from an applicant, in addition to
7 29 that contained in an application, as may be needed to permit
7 30 the board to discharge its responsibilities under this Act.
7 31 Sec. 11. Section 422.45, Code 1997, is amended by adding
7 32 the following new subsection:
7 33 NEW SUBSECTION. 52. The gross receipts from the sale,
7 34 furnishing, or service of gas, electricity, water, and heat to
7 35 persons located in a renaissance zone designated pursuant to
8 1 chapter 15E for the duration of the renaissance zone
8 2 designation.
8 3 Sec. 12. Section 427.1, Code 1997, is amended by adding
8 4 the following new subsection:
8 5 NEW SUBSECTION. 30. RENAISSANCE ZONES. The property
8 6 located solely in a renaissance zone designated pursuant to
8 7 chapter 15E for the duration of the renaissance zone
8 8 designation.
8 9 Sec. 13. APPLICABILITY. The sales tax incentive for
8 10 utilities in section 7 of this Act is applicable to all
8 11 billing cycles beginning on or after January 1, 1998. Section
8 12 7 of this Act shall not apply to billing cycles beginning
8 13 after December 31, 2012.
8 14 EXPLANATION
8 15 This bill provides for the establishment of a program
8 16 designating renaissance zones to assist local governments in
8 17 encouraging economic development.
8 18 The bill provides that applications for a designation of a
8 19 renaissance zone may be made to the department of economic
8 20 development board by a qualified local governmental unit which
8 21 is defined as either a city or township that contains an urban
8 22 renewal area or a county. Included in the application must be
8 23 a development plan, proposed boundaries of the zone, the
8 24 proposed duration of the designation which may not exceed
8 25 fifteen years, and written approval of the city council or
8 26 county board of supervisors. A qualified local governmental
8 27 unit shall not be part of more than one renaissance zone and
8 28 shall not have more than one application under consideration
8 29 by the board.
8 30 The bill provides that applications must be submitted
8 31 between July 1, 1997, and November 1, 1997. The board shall
8 32 review all applications submitted and shall designate
8 33 renaissance zones by December 30, 1997. The board shall not
8 34 alter the boundaries or duration of a renaissance zone
8 35 described in the application unless the qualified local
9 1 governmental unit and the local governmental unit in which the
9 2 renaissance zone is to be located consent by resolution.
9 3 The bill provides that criteria in determining designations
9 4 of renaissance zones shall include:
9 5 1. Evidence of adverse economic and socioeconomic
9 6 conditions.
9 7 2. The viability of the plan.
9 8 3. Whether the development plan is creative and
9 9 innovative.
9 10 4. Public and private commitment to and other resources
9 11 available for the zone.
9 12 5. How the plan relates to a broader plan for the
9 13 community as a whole.
9 14 6. The level of demonstrated cooperation from surrounding
9 15 communities.
9 16 7. How the local regulatory burden will be eased for
9 17 businesses operating in the zone.
9 18 8. Commitment to improving abandoned real property.
9 19 9. A resolution from the governing body of the local
9 20 governmental unit stating if the renaissance zone designation
9 21 is granted, persons and property within the renaissance zone
9 22 are exempt from property taxes.
9 23 The bill provides that the board shall not designate more
9 24 than a total of 10 zones, no more than four of which may be
9 25 located in urban areas.
9 26 The bill provides the following tax incentives:
9 27 1. Exemption from personal net income tax to residents
9 28 living in the zone.
9 29 2. Exemption from corporate and franchise taxes for
9 30 businesses located within the renaissance zone on the portion
9 31 of income attributed to the businesses located within the
9 32 zone.
9 33 3. Exemption from local property tax.
9 34 4. Exemption from state sales tax on utilities.
9 35 5. The sales, services, and use tax refund, provided in
10 1 Code section 15.331A, and the new jobs credit from
10 2 withholding, provided in Code section 15.331, for businesses
10 3 located within a zone.
10 4 The bill provides that the tax incentives shall be phased
10 5 out during the final three years of the renaissance zone
10 6 designation.
10 7 The bill provides for exceptions to the tax incentives for
10 8 tax delinquency, business relocation into a renaissance zone
10 9 under some circumstances, and when tax incentives received by
10 10 a individual accumulate to $10,000,000 during a designation of
10 11 a renaissance zone.
10 12 The bill provides that the department of economic
10 13 development shall specify the application form and the board
10 14 may request any additional information not included on the
10 15 form.
10 16 An applicability date is provided for the exemption on
10 17 state sales tax on utilities.
10 18 LSB 2362YH 77
10 19 tm/cf/24
Text: HF00521 Text: HF00523 Text: HF00500 - HF00599 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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