Text: HF00118 Text: HF00120 Text: HF00100 - HF00199 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 15.333, subsection 1, Code 2001, is 1 2 amended to read as follows: 1 3 1. An eligible business may claim a corporate tax credit 1 4 up to a maximum of ten percent of the new investment which is 1 5 directly related to new jobs created by the location or 1 6 expansion of an eligible business under the program. Any 1 7 credit in excess of the tax liability for the tax year may be 1 8 credited to the tax liability for the following seven years or 1 9 until depleted, whichever occurs earlier. If the business is 1 10 a partnership, subchapter S corporation, limited liability 1 11 company, or estate or trust electing to have the income taxed 1 12 directly to the individual, an individual may claim the tax 1 13 credit allowed. The amount claimed by the individual shall be 1 14 based upon the pro rata share of the individual's earnings of 1 15 the partnership, subchapter S corporation, limited liability 1 16 company, or estate or trust. For purposes of this section, 1 17 "new investment directly related to new jobs created by the 1 18 location or expansion of an eligible business under the 1 19 program" means the cost of machinery and equipment, as defined 1 20 in section 427A.1, subsection 1, paragraphs "e" and "j", 1 21 purchased for use in the operation of the eligible business, 1 22 the purchase price of which has been depreciated in accordance 1 23 with generally accepted accounting principles, and the cost of 1 24 improvements made to real property which is used in the 1 25 operation of the eligible businessand which receives a1 26partial property tax exemption for the actual value added1 27under section 15.332. 1 28 Sec. 2. NEW SECTION. 15E.193C ELIGIBLE DEVELOPMENT 1 29 BUSINESS. 1 30 1. A development business qualifying under this section is 1 31 eligible to receive incentives and assistance only as provided 1 32 in this section. Sections 15E.193, 15E.193B, and 15E.196 do 1 33 not apply to an eligible development business qualifying under 1 34 this section. 1 35 2. An eligible development business includes a developer 2 1 or development contractor that constructs, expands, or 2 2 rehabilitates a building space with a minimum capital 2 3 investment of at least five hundred thousand dollars in that 2 4 part of a city or county in which there is a designated 2 5 enterprise zone. An eligible development business is eligible 2 6 for one, but not both, of the following exemptions to the 2 7 capital investment requirements: 2 8 a. For a developer purchasing a vacant building suitable 2 9 for industrial use, the fair market value of the building and 2 10 land, not to exceed two hundred fifty thousand dollars, as 2 11 determined by the local enterprise zone commission, shall be 2 12 deducted from the capital investment requirement. 2 13 b. For a developer that rehabilitates a building space 2 14 that has been in an enterprise zone for at least five years, 2 15 the fair market value as established by an appraisal of the 2 16 building, not to exceed two hundred fifty thousand dollars, 2 17 shall be deducted from the capital investment requirement. 2 18 3. Upon completion of the construction, expansion, or 2 19 rehabilitation project by the eligible development business, 2 20 the building space shall not be occupied by a retail business. 2 21 4. An eligible development business shall complete its 2 22 construction, expansion, or rehabilitation within three years 2 23 from the time the eligible development business receives 2 24 approval from the department. The failure to complete 2 25 construction, expansion, or rehabilitation within three years 2 26 shall result in the eligible development business becoming 2 27 ineligible and subject to the repayment requirements and 2 28 penalties provided in subsection 7. 2 29 5. An eligible development business shall provide the 2 30 enterprise zone commission with all of the following 2 31 information: 2 32 a. The long-term strategic plan for the development 2 33 business which shall include infrastructure needs and the 2 34 types of businesses expected to occupy space at the approved 2 35 project. 3 1 b. Information relating to the benefits the development 3 2 business will bring to the area. 3 3 c. Examples of why the development business should be 3 4 considered or would be considered a good business enterprise. 3 5 d. An affidavit that the development business has not, 3 6 within the last five years, violated state or federal 3 7 environmental and worker safety statutes, rules, and 3 8 regulations or if such violation has occurred that there were 3 9 mitigating circumstances or the violations did not seriously 3 10 affect public health or safety or the environment. 3 11 6. An eligible development business, which has been 3 12 approved to receive incentives and assistance by the 3 13 department of economic development pursuant to section 3 14 15E.195, shall be eligible to receive all of the following 3 15 incentives and assistance for a period not to exceed ten 3 16 years: 3 17 a. An eligible development business may claim a tax credit 3 18 up to a maximum of ten percent of the new investment that is 3 19 directly related to the construction, expansion, or 3 20 rehabilitation of building space to be used for manufacturing, 3 21 processing, cold storage, distribution, or office facilities. 3 22 For purposes of this section, "new investment" includes the 3 23 purchase price of land and the cost of improvements made to 3 24 real property. The tax credit may be claimed by an eligible 3 25 development business for the tax year in which the 3 26 construction, expansion, or rehabilitation is completed. The 3 27 tax credit may be used to reduce the tax liability imposed 3 28 under chapter 422, division II, III, or V. Any credit in 3 29 excess of the tax liability for the tax year may be credited 3 30 to the tax liability for the following seven years or until 3 31 depleted, whichever occurs earlier. If the business is a 3 32 partnership, S corporation, limited liability company, or 3 33 estate or trust electing to have the income taxed directly to 3 34 the individual, an individual may claim the tax credit 3 35 allowed. The amount claimed by the individual shall be based 4 1 upon the pro rata share of the individual's earnings of the 4 2 partnership, S corporation, limited liability company, or 4 3 estate or trust. 4 4 b. Sales, services, and use tax refund, as provided in 4 5 section 15.331A. 4 6 c. The county or city for which an eligible enterprise 4 7 zone is certified may exempt from all property taxation all or 4 8 a portion of the value added to the property upon which an 4 9 eligible development business constructs, expands, or 4 10 rehabilitates property in an enterprise zone. The amount of 4 11 value added for purposes of this shall be the amount of the 4 12 increase in assessed valuation of the property following the 4 13 construction, expansion, or rehabilitation by the development 4 14 business in the enterprise zone. If an exemption provided 4 15 pursuant to this is made applicable to only a portion of the 4 16 property within an enterprise zone, the definition of that 4 17 subset of eligible property must be by uniform criteria that 4 18 further some planning objective established by the city or 4 19 county enterprise zone commission and approved by the city or 4 20 county. The exemption may be allowed for a period not to 4 21 exceed ten years beginning the year the eligible development 4 22 business enters into an agreement with the county or city to 4 23 construct, expand, or rehabilitate property in an enterprise 4 24 zone. 4 25 7. If a development business has received incentives or 4 26 assistance under this section and fails to maintain the 4 27 requirements of this section to be an eligible development 4 28 business, the business is subject to repayment of all or a 4 29 portion of the incentives and assistance that it has received. 4 30 The department of revenue and finance shall have the authority 4 31 to recover the value of state taxes or incentives provided 4 32 under this section. The value of state incentives provided 4 33 under this section includes applicable interest and penalties. 4 34 The department of economic development and the city and 4 35 county, as applicable, shall enter into an agreement with the 5 1 business specifying the method for determining the amount of 5 2 incentives or assistance paid which will be repaid in the 5 3 event of failure to maintain the requirements of this section. 5 4 In addition, a business that fails to maintain the 5 5 requirements of this section shall not receive incentives or 5 6 assistance for each year during which the business is not in 5 7 compliance. 5 8 8. The department of economic development and the 5 9 department of revenue and finance shall each adopt rules 5 10 pursuant to chapter 17A to jointly administer this section. 5 11 9. An eligible business under section 15E.193 is not 5 12 eligible for incentives and assistance listed in section 5 13 15E.196 if the property is owned, or was previously owned, by 5 14 an approved development business that has received incentives 5 15 and assistance under section 15E.193C. 5 16 10. If, within five years of the completion of a 5 17 construction, expansion, or rehabilitation project, the 5 18 development business, or its successor, sells or leases any 5 19 space to any retail business, the development business shall 5 20 proportionally refund any tax credits, refunds, or exemptions 5 21 which were claimed under this section. 5 22 Sec. 3. Section 15E.195, Code 2001, is amended to read as 5 23 follows: 5 24 15E.195 ENTERPRISE ZONE COMMISSION. 5 25 1. A county which designates an enterprise zone pursuant 5 26 to section 15E.194, subsection 1, and in which an eligible 5 27 enterprise zone is certified shall establish an enterprise 5 28 zone commission to review applications from qualified 5 29 businesses located within or requesting to locate within an 5 30 enterprise zone designated pursuant to section 15E.194, 5 31 subsection 1, to receive incentives or assistance as provided 5 32 in section 15E.196. The enterprise zone commission shall also 5 33 review applications from qualified housing businesses 5 34 requesting to receive incentives or assistance as provided in 5 35 section 15E.193B. The enterprise zone commission shall also 6 1 review applications from qualified development businesses 6 2 requesting to receive incentives or assistance as provided in 6 3 section 15E.193C. The commission shall consist of nine 6 4 members. Five of these members shall consist of one 6 5 representative of the board of supervisors, one member with 6 6 economic development expertise chosen by the department of 6 7 economic development, one representative of the county zoning 6 8 board, one member of the local community college board of 6 9 directors, and one representative of the local workforce 6 10 development center. These five members shall select the 6 11 remaining four members. If the enterprise zone consists of an 6 12 area meeting the requirements for eligibility for an urban or 6 13 rural enterprise community under Title XIII of the federal 6 14 Omnibus Budget Reconciliation Act of 1993, one of the 6 15 remaining four members shall be a representative of that 6 16 community. A county shall have only one enterprise zone 6 17 commission to review applications for incentives and 6 18 assistance for businesses located within or requesting to 6 19 locate within a certified enterprise zone designated pursuant 6 20 to section 15E.194, subsection 1. 6 21 2. A city with a population of twenty-four thousand or 6 22 more which designates an enterprise zone pursuant to section 6 23 15E.194, subsection 2, and in which an eligible enterprise 6 24 zone is certified shall establish an enterprise zone 6 25 commission to review applications from qualified businesses 6 26 located within or requesting to locate within an enterprise 6 27 zone to receive incentives or assistance as provided in 6 28 section 15E.196. The enterprise zone commission shall review 6 29 applications from qualified housing businesses requesting to 6 30 receive incentives or assistance as provided in section 6 31 15E.193B. The enterprise zone commission shall also review 6 32 applications from qualified development businesses requesting 6 33 to receive incentives or assistance as provided in section 6 34 15E.193C. The commission shall consist of nine members. Six 6 35 of these members shall consist of one representative of an 7 1 international labor organization, one member with economic 7 2 development expertise chosen by the department of economic 7 3 development, one representative of the city council, one 7 4 member of the local community college board of directors, one 7 5 member of the city planning and zoning commission, and one 7 6 representative of the local workforce development center. 7 7 These six members shall select the remaining three members. 7 8 If the enterprise zone consists of an area meeting the 7 9 requirements for eligibility for an urban enterprise community 7 10 under Title XIII of the federal Omnibus Budget Reconciliation 7 11 Act of 1993, one of the remaining three members shall be a 7 12 representative of that community. If a city contiguous to the 7 13 city designating the enterprise zone is included in an 7 14 enterprise zone, a representative of the contiguous city, 7 15 chosen by the city council, shall be a member of the 7 16 commission. A city in which an eligible enterprise zone is 7 17 certified shall have only one enterprise zone commission. If 7 18 a city has established an enterprise zone commission prior to 7 19 the effective date of this Act, the city may petition to the 7 20 department of economic development to change the structure of 7 21 the existing commission. 7 22 3. The commission may adopt more stringent requirements, 7 23 including requirements related to compensation and benefits, 7 24 for a business to be eligible for incentives or assistance 7 25 than provided in sections 15E.193,and15E.193B, and 15E.193C. 7 26 The commission may develop as an additional requirement that 7 27 preference in hiring be given to individuals who live within 7 28 the enterprise zone. The commission shall work with the local 7 29 workforce development center to determine the labor 7 30 availability in the area. The commission shall examine and 7 31 evaluate building codes and zoning in the enterprise zone and 7 32 make recommendations to the appropriate governing body in an 7 33 effort to promote more affordable housing development. 7 34 4. If the enterprise zone commission determines that a 7 35 business qualifies and is eligible to receive incentives or 8 1 assistance as provided ineithersection 15E.193Bor section, 8 2 15E.193C, or 15E.196, the commission shall submit an 8 3 application for incentives or assistance to the department of 8 4 economic development. The department may approve, defer, or 8 5 deny the application. 8 6 5. In making its decision, the commission or department 8 7 shall consider the impact of the eligible business on other 8 8 businesses in competition with it and compare the compensation 8 9 package of businesses in competition with the business being 8 10 considered for incentives or assistance. The commission or 8 11 department shall make a good faith effort to identify existing 8 12 Iowa businesses within an industry in competition with the 8 13 business being considered for incentives or assistance. The 8 14 commission or department shall also make a good faith effort 8 15 to determine the probability that the proposed incentives or 8 16 assistance will displace employees of existing businesses. In 8 17 determining the impact on businesses in competition with the 8 18 business seeking incentives or assistance, jobs created as a 8 19 result of other jobs being displaced elsewhere in the state 8 20 shall not be considered direct jobs created. 8 21 However, if the commission or department finds that an 8 22 eligible business has a record of violations of the law, 8 23 including but not limited to environmental and worker safety 8 24 statutes, rules, and regulations, over a period of time that 8 25 tends to show a consistent pattern, the eligible business 8 26 shall not qualify for incentives or assistance under section 8 27 15E.193B, 15E.193C, orsection15E.196, unless the commission 8 28 or department finds that the violations did not seriously 8 29 affect public health or safety or the environment, or if it 8 30 did that there were mitigating circumstances. In making the 8 31 findings and determinations regarding violations, mitigating 8 32 circumstances, and whether an eligible business is eligible 8 33 for incentives or assistance under section 15E.193B, 15E.193C, 8 34 orsection15E.196, the commission or department shall be 8 35 exempt from chapter 17A. If requested by the commission or 9 1 department, the business shall provide copies of materials 9 2 documenting the type of violation, any fees or penalties 9 3 assessed, court filings, final disposition of any findings and 9 4 any other information which would assist the commission or 9 5 department in assessing the nature of any violation. 9 6 6. A business that is approved to receive incentives or 9 7 assistance shall, for the length of its designation as an 9 8 enterprise zone business, certify annually to the county or 9 9 city, as applicable, and the department of economic 9 10 development its compliance with the requirements ofeither9 11 section 15E.193,or section15E.193B, or 15E.193C. 9 12 Sec. 4. Section 15E.196, Code 2001, is amended by adding 9 13 the following new subsection: 9 14 NEW SUBSECTION. 7. A business eligible to receive 9 15 incentives and assistance described in this section and 9 16 located in a building for which incentives and assistance are 9 17 or have been claimed by an approved development business under 9 18 section 15E.193C is not eligible to receive the following 9 19 incentives and assistance: 9 20 a. An investment tax credit under subsection 3 for the 9 21 portion of the investment tax credit that is claimed on the 9 22 purchase price of land or improvements to real property by an 9 23 approved development business pursuant to section 15E.193C, 9 24 subsection 6, paragraph "a". 9 25 b. Sales, services, and use tax refund under subsection 2 9 26 that is made pursuant to section 15E.193C, subsection 6, 9 27 paragraph "b". 9 28 c. A property tax exemption under subsection 5 for 9 29 improvements to real property that are exempted from property 9 30 taxation pursuant to section 15E.193C, subsection 6, paragraph 9 31 "c". 9 32 Sec. 5. RETROACTIVE APPLICABILITY. This Act is 9 33 retroactively applicable to January 1, 2001, and is applicable 9 34 on and after that date. 9 35 EXPLANATION 10 1 This bill amends the enterprise zone program administered 10 2 by the department of economic development. 10 3 The bill creates a new type of eligible business under the 10 4 program. The bill provides that a development business is 10 5 eligible to receive incentives and assistance under the 10 6 program if the business constructs, expands, or rehabilitates 10 7 a building space with a minimum capital investment of at least 10 8 $500,000 in that part of a city or county in which there is a 10 9 designated enterprise zone. The bill provides for two 10 10 possible exemptions to the capital investment requirement. 10 11 The bill provides that, upon completion of the construction, 10 12 expansion, or rehabilitation project, the building space shall 10 13 not be occupied by retail business. The bill provides that 10 14 the development business shall complete the construction, 10 15 expansion, or rehabilitation of the building space within 10 16 three years from the time the business receives approval from 10 17 the department. 10 18 The bill provides that an eligible development business 10 19 which has been approved to receive incentives and assistance 10 20 shall be eligible to receive a new investment tax credit for 10 21 up to a maximum of 10 percent of the new investment; a sales, 10 22 services, and use tax refund; and a property tax exemption for 10 23 all or a portion of the value added to the property. The 10 24 incentives and assistance may be received for a period of 10 10 25 years. The bill provides for the repayment of incentives and 10 26 assistance received under the program if a development 10 27 business fails to meet the requirements of the program or if 10 28 the building space is sold or leased to retail business within 10 29 five years of the completion of construction, expansion, or 10 30 rehabilitation. 10 31 The bill provides that a business eligible to receive 10 32 incentives and assistance under the other portion of the 10 33 enterprise zone program and located in a building for which a 10 34 development business received incentives and assistance under 10 35 the program shall receive reduced incentives and assistance. 11 1 The bill provides that an eligible business shall not receive 11 2 a benefit that has already been received by an eligible 11 3 development business. 11 4 The bill amends the new investment tax credit under the new 11 5 jobs and income Act that is also currently available under the 11 6 enterprise zone program. The bill amends the term "new 11 7 investment directly related to new jobs created by the 11 8 location or expansion of an eligible business under the 11 9 program" to remove the requirement that the cost of 11 10 improvements made to real property must be that which receives 11 11 a partial property tax exemption for the actual value added. 11 12 The bill provides a number of conforming amendments 11 13 necessary as a result of adding the development business 11 14 provisions to the enterprise zone program. 11 15 The bill is retroactively applicable to January 1, 2001, 11 16 and is applicable on and after that date. 11 17 LSB 1760HH 79 11 18 tm/gg/8.1
Text: HF00118 Text: HF00120 Text: HF00100 - HF00199 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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