Text: HF00713 Text: HF00715 Text: HF00700 - HF00799 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN
1 1 HOUSE FILE 714
1 2
1 3 AN ACT
1 4 RELATING TO A COMMUNITY RENEWAL INITIATIVE BY ESTABLISHING A
1 5 COMMUNITY DEVELOPMENT PROGRAM TO PROVIDE TAX CREDITS FOR
1 6 INCOME TAX, FRANCHISE TAX, PREMIUMS TAX, AND MONEYS AND
1 7 CREDITS TAX FOR BUSINESSES CONTRIBUTING TO COMMUNITY
1 8 DEVELOPMENT PROJECTS TO AID CERTAIN NEIGHBORHOODS AND
1 9 COMMUNITIES OR CONTRIBUTING TO CHILD CARE BENEFITS FOR
1 10 EMPLOYEES AND INCLUDING EFFECTIVE AND APPLICABILITY DATE
1 11 PROVISIONS.
1 12
1 13 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 14
1 15 Section 1. NEW SECTION. 15.380 SHORT TITLE.
1 16 This part shall be known as and may be cited as the
1 17 "Community Development Program Act".
1 18 Sec. 2. NEW SECTION. 15.381 DEFINITIONS.
1 19 As used in this part, unless the context otherwise
1 20 requires:
1 21 1. "Business" means all businesses operating within the
1 22 state and includes individuals operating a sole proprietorship
1 23 or having rental, royalty, or farm income in this state and
1 24 includes a consortium of businesses.
1 25 2. a. "Child care" means the same as defined in section
1 26 237A.1.
1 27 b. "Child care center" means a facility licensed pursuant
1 28 to section 237A.2 to provide child care.
1 29 3. "Community services" means, but is not limited to,
1 30 individual, group, and family counseling; parent and early
1 31 childhood education; mental health services; primary care and
1 32 community medical health centers; child and adult care
1 33 services; senior citizen service centers; recreation programs;
1 34 nutrition programs; emergency shelters for persons suffering
1 35 from physical abuse or rape; services for the handicapped;
2 1 sheltered workshops, vocational counseling; substance abuse
2 2 counseling; and referral services.
2 3 4. "Contribution" includes cash, material or supplies,
2 4 real estate, labor, professional services, technical
2 5 assistance, or equipment. "Contribution" does not include
2 6 investments made by a financial institution or insurance
2 7 company in the normal course of its business.
2 8 5. "Crime prevention" means activities which include but
2 9 are not limited to services to ex-offenders, local civilian
2 10 organizations that help prevent crime or provide aid to
2 11 victims of crime, mediation services aimed at resolving
2 12 disputes and conflicts before they become criminal incidents,
2 13 or services to juveniles who have had contact with the court
2 14 or police.
2 15 6. "Distressed or blighted area" means an area designated
2 16 or that qualifies under section 15E.194 to be designated an
2 17 enterprise zone pursuant to chapter 15E, division XVIII,
2 18 designated as a slum or blighted area pursuant to chapter 403,
2 19 or designated as a revitalization area pursuant to chapter
2 20 404.
2 21 7. "Economic development" means the acquisition,
2 22 renovation, improvement, or the furnishing or equipping of
2 23 existing buildings and real estate in distressed or blighted
2 24 areas of the state when this acquisition, renovation,
2 25 improvement, or the furnishing or equipping of the existing
2 26 buildings and real estate will result in the creation or
2 27 retention of jobs within the state.
2 28 8. "Education" includes literacy programs, adult basic
2 29 education and general educational development certificate
2 30 programs, training for the physically or mentally challenged,
2 31 and other educational programs deemed beneficial to the
2 32 participants.
2 33 9. "Job training" means those activities which provide
2 34 specific vocational skills including special apprenticeship or
2 35 on-the-job training programs not otherwise available.
3 1 10. "Neighborhood area" means a specific geographic area
3 2 certified by the department as having a readily identifiable
3 3 residential population and which may include, but is not
3 4 limited to, any of the following factors:
3 5 a. A sense of belonging or identity that ties residents to
3 6 a given area.
3 7 b. Social, cultural, political, or economic activities
3 8 around which people organize themselves.
3 9 c. The existence of cohesive organizations formed by
3 10 residents.
3 11 d. A city with a population of less than ten thousand or a
3 12 region within a rural area may be certified as a neighborhood
3 13 area.
3 14 e. A history of acting or being treated as a distinct or
3 15 cohesive unit.
3 16 f. The area is designated as a community empowerment area
3 17 in accordance with chapter 28.
3 18 11. "Physical revitalization" means activities designed
3 19 for the physical improvement of any part or all of a
3 20 neighborhood area. These activities may include, but are not
3 21 limited to, such programs as commercial area revitalization;
3 22 housing construction or rehabilitation; improvements to or
3 23 acquisition or construction of facilities used by nonprofit
3 24 organizations for community purposes or related planning and
3 25 promotional activities designed to aid in those programs.
3 26 12. a. "Qualifying organization" means an organization
3 27 performing community services or economic development
3 28 activities in the state and is any of the following:
3 29 (1) A person or organization that is exempt from federal
3 30 income taxation under the Internal Revenue Code as defined in
3 31 section 422.3.
3 32 (2) A nonprofit corporation organized under the laws of
3 33 this state.
3 34 (3) Designated as a community development corporation by
3 35 the federal government pursuant to, Title VII of the Economic
4 1 Opportunity Act of 1964, Pub. L. No. 88-452.
4 2 (4) A community empowerment area board created in
4 3 accordance with chapter 28.
4 4 b. "Qualifying organization" does not include any of the
4 5 following:
4 6 (1) A unit or agency of the state, local government, or
4 7 educational institution. This subparagraph shall not be
4 8 interpreted to prevent a community empowerment area board from
4 9 being considered a qualifying organization.
4 10 (2) A foundation or trust of a postsecondary educational
4 11 institution.
4 12 (3) A church-affiliated religious organization unless the
4 13 organization is without religious discrimination or is not
4 14 controlled by a single denomination.
4 15 Sec. 3. NEW SECTION. 15.382 COMMUNITY DEVELOPMENT AND
4 16 CHILD CARE CENTER TAX CREDITS – APPROVAL OF PROJECTS AND
4 17 PROPOSALS.
4 18 1. TAX CREDITS.
4 19 a. A business which engages in the activities of providing
4 20 physical revitalization, economic development, job training or
4 21 education for individuals, community services, or crime
4 22 prevention in the state shall receive a community development
4 23 tax credit as provided in section 15.383 if the director
4 24 annually approves the proposal of the business. However, a
4 25 proposal for a community development tax credit shall not be
4 26 approved which does not have the endorsement of the local
4 27 government for the area in which the business is engaging in
4 28 such activities that the proposal is consistent with the
4 29 overall community or neighborhood development plan adopted by
4 30 that local government.
4 31 b. A business which for the benefit of its employees
4 32 builds, contributes to, or operates a new or existing child
4 33 care center in the state or subsidizes access to a child care
4 34 center in the state shall receive a child care center tax
4 35 credit as provided in section 15.383 if the director annually
5 1 approves the proposal of the business.
5 2 2. ECONOMIC DEVELOPMENT PROJECTS. For economic
5 3 development projects in distressed or blighted areas for which
5 4 community development tax credits under this part may be
5 5 approved, the following guidelines apply:
5 6 a. Applications shall be accepted from any locally based
5 7 qualifying organization wishing to conduct an economic
5 8 development project in a distressed or blighted area.
5 9 b. Applicants may not administer more than one economic
5 10 development project at a time. A project may include more
5 11 than one building, provided that the proposal meets all other
5 12 eligibility requirements as set forth in this subsection and
5 13 rules of the department.
5 14 c. Applications will be accepted by the department at any
5 15 time of the year and will be approved on a case-by-case basis
5 16 as all the necessary requirements are met and as credits
5 17 become available.
5 18 d. A maximum authorization of one hundred fifty thousand
5 19 dollars in community development tax credits will be permitted
5 20 per project and no more than five percent of the credits
5 21 authorized for the project shall normally be allowed for
5 22 administrative and operating expenses. In unusual
5 23 circumstances, a higher percentage may be allowed at the
5 24 discretion of the department.
5 25 e. Applicants must obtain a nonbinding commitment from a
5 26 prospective business or businesses willing to locate to the
5 27 facility and demonstrate that at least one job will be created
5 28 or retained for every ten thousand dollars in credits
5 29 requested. Eligible types of businesses include retail,
5 30 commercial, service, and manufacturing.
5 31 3. COMMUNITY DEVELOPMENT PROJECTS. For community
5 32 development projects, other than economic development
5 33 projects, for which community development tax credits under
5 34 this part may be approved, the following procedures, criteria,
5 35 and priorities apply:
6 1 a. A proposal for a proposed program shall be submitted by
6 2 a qualifying organization for carrying out a specific project
6 3 consistent with the purposes of this part.
6 4 b. All proposals shall be made on the forms supplied by
6 5 the department. Each proposal shall contain a project budget
6 6 and shall identify, if possible, the items and amounts of the
6 7 budget which will be provided for from contributions from any
6 8 business. A project budget shall be approved by the
6 9 department. The department may request any additional
6 10 information it determines necessary to evaluate a proposal or
6 11 plan.
6 12 c. Community development projects and the budgets for them
6 13 may be approved for a period of up to three years at the
6 14 discretion of the director.
6 15 d. An annual application deadline shall be determined by
6 16 the department and application materials shall be distributed
6 17 upon request no less than sixty days prior to the actual
6 18 application deadline.
6 19 e. All proposals must address at least one of the
6 20 following priorities in order to qualify for approval:
6 21 (1) The project substantially contributes to self-help
6 22 efforts by residents of the neighborhood area to be served in
6 23 addressing locally defined objectives.
6 24 (2) The project will result in the provision of essential
6 25 services to low-income and moderate-income families which
6 26 would not otherwise be provided in the affected neighborhood
6 27 area and for which there are not other resources. "Low-income
6 28 and moderate-income families" means those families, including
6 29 single-person households, earning no more than eighty percent
6 30 of the higher of the median family income of the county or the
6 31 statewide nonmetropolitan area as determined by the latest
6 32 United States department of housing and urban development,
6 33 section 8 income guidelines.
6 34 (3) The project tangibly contributes to the development of
6 35 lasting cooperation and partnership efforts of neighborhood
7 1 organizations and businesses.
7 2 f. Approval or disapproval of proposals shall be based on
7 3 the following criteria:
7 4 (1) The director must certify an area as experiencing
7 5 problems endangering the area's existence as a viable and
7 6 stable neighborhood to be eligible for assistance.
7 7 (2) The qualifying organization submitting the proposal
7 8 must demonstrate its capacity to adequately administer the
7 9 project.
7 10 (3) There must be a demonstrated need for the program in
7 11 the neighborhood area within which the project is to be
7 12 carried out.
7 13 (4) The proposal must demonstrate that residents of the
7 14 affected neighborhood area have been involved in the planning
7 15 of the proposed project and describe the extent to which they
7 16 will be involved in its implementation.
7 17 (5) The proposal must be consistent with all locally
7 18 approved community or neighborhood development plans for the
7 19 area.
7 20 (6) Proposals submitted subsequent to the first year will
7 21 be evaluated on performance of the first-year project, other
7 22 resources developed, continued need, and potential for
7 23 eventual self-sufficiency.
7 24 g. In no case shall a project be approved that does not
7 25 have a written endorsement of the appropriate local public
7 26 authority with notification given to the community empowerment
7 27 board.
7 28 h. The maximum amount of community development tax credits
7 29 allowed per project is one hundred fifty thousand dollars.
7 30 i. For purposes of the criterion in paragraph "f",
7 31 subparagraph (1), an area is experiencing problems endangering
7 32 its existence as a viable and stable neighborhood if some of
7 33 the following factors are present: declining population, high
7 34 percentage of people dependent on public assistance,
7 35 persistent or substantial unemployment or underemployment,
8 1 lower than average family incomes, financial disinvestment,
8 2 insurance and financial redlining, general weakened market
8 3 conditions on the neighborhood commercial strip as indicated
8 4 by declining rents or vacant stores, excessive abandonment of
8 5 properties, a significant percentage of neighborhood residents
8 6 on fixed incomes, unsanitary or inadequate housing,
8 7 overcrowding, significant proportion of the property is rental
8 8 property, property speculation, high rates of crime and
8 9 delinquency, high degree of drug or alcohol abuse, increasing
8 10 cases of mental health problems, significant numbers of
8 11 single-parent households, high degree of infant mortality and
8 12 disease, disabilities, general unsanitary conditions in the
8 13 area, or poor city and public utility services.
8 14 4. CHILD CARE EMPLOYEE BENEFITS. For child care employee
8 15 benefits for which a child care center tax credit under this
8 16 part may be approved, the following apply:
8 17 a. A proposal for a project shall be submitted by a
8 18 business located in or doing business in the state.
8 19 b. The proposal shall be on forms supplied by the
8 20 department. The proposal shall identify the location of the
8 21 child care center which must be in the state. The proposal
8 22 shall contain a statement on whether the business is also
8 23 seeking a community development tax credit for providing child
8 24 care for its employees.
8 25 c. To be eligible for a child care center tax credit, the
8 26 business must provide child care employee benefits for its
8 27 employees through any of the following:
8 28 (1) Build a new structure or rehabilitate an existing
8 29 structure to be used as a child care center. A business may
8 30 do the building or rehabilitating in conjunction with another
8 31 business or entity but only the business's actual costs shall
8 32 be considered in determining the amount of credit. At least
8 33 five children of its employees are provided child care at the
8 34 center.
8 35 (2) Operate or lease a child care center where at least
9 1 five children of its employees are provided child care at the
9 2 center.
9 3 (3) Donate money, supplies, or other tangible personal
9 4 property to a child care center where at least five children
9 5 of its employees are provided child care.
9 6 (4) Pay the cost for the equivalent of five children of
9 7 its employees to attend a child care center.
9 8 d. A business is ineligible for a child care center tax
9 9 credit if any of the following applies:
9 10 (1) It derives income from the operation, lease, or
9 11 management of more than one child care center.
9 12 (2) The business has received a community development tax
9 13 credit for activities related to the child care center for
9 14 which it is seeking a tax credit.
9 15 e. An annual application deadline shall be determined by
9 16 the department and application material shall be distributed
9 17 upon request no less than sixty days prior to the actual
9 18 application deadline.
9 19 5. TAX CREDIT APPLICATION.
9 20 a. The department shall approve or disapprove applications
9 21 for community development tax credits to businesses which have
9 22 invested in approved economic development projects or other
9 23 community development projects or for child care center tax
9 24 credits for businesses that have provided child care for the
9 25 benefit of their employees. The director, upon approval of an
9 26 application, shall notify the director of revenue and finance
9 27 and the governor of those businesses entitled to a tax credit.
9 28 If the business meets the criteria for eligibility, the
9 29 department of economic development shall issue to the business
9 30 a certification of entitlement for the community development
9 31 tax credit or child care center tax credit. The certification
9 32 shall contain the name of the business, address, tax
9 33 identification number, the amount of the credit, the tax year
9 34 for which the certificate applies, and any other information
9 35 required by the department of revenue and finance.
10 1 b. The procedures and requirements for filing a tax credit
10 2 application are as follows:
10 3 (1) Businesses wanting to donate to a particular community
10 4 development project or wanting to provide child care employee
10 5 benefits, but first wishing to verify the eligibility of the
10 6 donation or provision of child care employee benefits for a
10 7 tax credit, may submit a tax credit eligibility confirmation
10 8 form to the department. The department will confirm in
10 9 writing whether or not the donation or the provision of child
10 10 care employee benefits qualifies for credit and how the value
10 11 of the credit will be determined. This confirmation will not
10 12 constitute credit approval.
10 13 (2) In order to qualify for credit, donations or providing
10 14 of child care employee benefits must occur during the approved
10 15 project period with the exception of donated audit services,
10 16 which may occur anytime during the six-month period following
10 17 the project period, and must be directly related to the
10 18 approved project.
10 19 (3) Businesses wishing to apply for credit must complete a
10 20 community development tax credit application or child care
10 21 center tax credit application. A business providing child
10 22 care for the benefit of its employees may complete and file
10 23 both applications, but only one credit shall be approved.
10 24 (4) Tax credit applications are to be signed by the
10 25 qualifying organization or the managing entity of the child
10 26 care center, as applicable, and submitted directly to the
10 27 department not later than one year following the date of
10 28 donation or providing of child care employee benefits.
10 29 (5) The order in which completed credit applications are
10 30 received by the department will determine the order in which
10 31 credits are approved. Facsimile copies will not be considered
10 32 completed applications.
10 33 (6) Every transmittal of community development tax credit
10 34 applications to the department must be accompanied by a
10 35 project report prepared by the qualifying organization.
11 1 (7) The department shall examine all submitted
11 2 applications and determine which donations or child care
11 3 employee benefits meet the eligibility criteria.
11 4 c. The department shall establish by rule the methods to
11 5 be used in determining the value of contributions or child
11 6 care employee benefits of a business.
11 7 Sec. 4. NEW SECTION. 15.383 TAX CREDITS –
11 8 DOCUMENTATION.
11 9 1. For a tax credit application approved pursuant to
11 10 section 15.382, the community development tax credit or child
11 11 care center tax credit available under this part may be used
11 12 to reduce the tax liability imposed under chapter 422,
11 13 division II, III, or V, or chapter 432 or 533.
11 14 2. Subject to subsections 4 and 5, the amount of the
11 15 community development tax credit shall be fifty percent of the
11 16 contribution made by the business during the tax year.
11 17 3. Subject to subsections 4 and 6, the amount of the child
11 18 care center tax credit shall be twenty-five percent of the
11 19 cost to provide the child care employee benefits.
11 20 4. a. The tax credit shall not exceed one hundred
11 21 thousand dollars annually.
11 22 b. Any tax credit in excess of the business's tax
11 23 liability for a tax year may be credited to the tax liability
11 24 for the following five tax years or until depleted, whichever
11 25 is the earlier.
11 26 c. A financial institution or insurance company shall not
11 27 receive a tax credit for activities that are part of its
11 28 normal course of business.
11 29 d. To be eligible to receive the tax credit, a business
11 30 shall provide documentation of the contributions or costs on
11 31 which the credit is based. The documentation shall be as
11 32 specified by rules of the department.
11 33 5. The total amount of community development tax credits
11 34 that may be approved pursuant to this part shall not exceed
11 35 two million dollars in any fiscal year.
12 1 6. The total amount of child care center tax credits that
12 2 may be approved pursuant to this part shall not exceed two
12 3 million dollars in any fiscal year.
12 4 Sec. 5. NEW SECTION. 422.11C COMMUNITY DEVELOPMENT OR
12 5 CHILD CARE CENTER TAX CREDIT.
12 6 The taxes imposed under this division, less the credits
12 7 allowed under sections 422.12 and 422.12B, shall be reduced by
12 8 a community development tax credit or child care center tax
12 9 credit received pursuant to sections 15.380 through 15.383.
12 10 An individual may claim the tax credit allowed a
12 11 partnership, limited liability company, S corporation, or
12 12 estate or trust electing to have the income taxed directly to
12 13 the individual. The amount claimed by the individual shall be
12 14 based upon the pro rata share of the individual's earnings of
12 15 the partnership, limited liability company, S corporation, or
12 16 estate or trust.
12 17 Any credit in excess of the tax liability for the tax year
12 18 may be credited to the tax liability for the following five
12 19 tax years or until depleted, whichever is earlier.
12 20 If the community development tax credit or child care
12 21 center tax credit is taken on the tax return, a deduction
12 22 shall not be allowed for Iowa tax purposes for contributions
12 23 made to a community development project or expenditures for
12 24 providing child care employee benefits which are deductible
12 25 for federal tax purposes.
12 26 Sec. 6. Section 422.33, Code 2001, is amended by adding
12 27 the following new subsection:
12 28 NEW SUBSECTION. 11. The taxes imposed under this division
12 29 shall be reduced by a community development tax credit or
12 30 child care center tax credit received pursuant to sections
12 31 15.380 through 15.383.
12 32 Any credit in excess of the tax liability for the tax year
12 33 may be credited to the tax liability for following five tax
12 34 years or until depleted, whichever is earlier.
12 35 If the community development tax credit or child care
13 1 center tax credit is taken on the tax return, a deduction
13 2 shall not be allowed for Iowa tax purposes for contributions
13 3 made to a community development project or expenditures for
13 4 providing child care employee benefits which are deductible
13 5 for federal tax purposes.
13 6 Sec. 7. Section 422.60, Code 2001, is amended by adding
13 7 the following new subsection:
13 8 NEW SUBSECTION. 4. The taxes imposed under this division
13 9 shall be reduced by a community development tax credit or
13 10 child care center tax credit received pursuant to sections
13 11 15.380 through 15.383.
13 12 Any credit in excess of the tax liability for the tax year
13 13 may be credited to the tax liability for the following five
13 14 tax years or until depleted, whichever is earlier.
13 15 If the community development tax credit or child care
13 16 center tax credit is taken on the tax return, a deduction
13 17 shall not be allowed for Iowa tax purposes for contributions
13 18 made to a community development project or expenditures for
13 19 providing child care employee benefits which are deductible
13 20 for federal tax purposes.
13 21 Sec. 8. NEW SECTION. 432.12A COMMUNITY DEVELOPMENT OR
13 22 CHILD CARE CENTER TAX CREDIT.
13 23 The tax imposed under this chapter shall be reduced by a
13 24 community development tax credit or child care center tax
13 25 credit received pursuant to sections 15.380 through 15.383.
13 26 Any credit in excess of the tax liability for the calendar
13 27 year may be credited to the tax liability for the following
13 28 five calendar years or until depleted, whichever is earlier.
13 29 Sec. 9. Section 533.24, Code 2001, is amended by adding
13 30 the following new unnumbered paragraph:
13 31 NEW UNNUMBERED PARAGRAPH. The tax imposed on moneys and
13 32 credits under this section shall be reduced by a community
13 33 development tax credit or child care center tax credit
13 34 received pursuant to sections 15.380 through 15.383. Any
13 35 credit in excess of the tax liability for the tax year may be
14 1 credited to the tax liability for the following five tax years
14 2 or until depleted, whichever is earlier.
14 3 Sec. 10. EFFECTIVE AND APPLICABILITY PROVISION. This Act
14 4 takes effect only if the revenue estimating conference
14 5 estimates that, as a result of the enactment of federal income
14 6 tax legislation prior to January 1, 2002, Iowa income tax
14 7 receipts for the fiscal year beginning July 1, 2001, will be
14 8 increased by $7.9 million or more over the amount of Iowa
14 9 income tax receipts which would have been realized in the
14 10 absence of the enactment of such federal income tax
14 11 legislation. If this Act takes effect, sections 5 through 9
14 12 of this Act apply to tax years beginning on or after January
14 13 1, 2002.
14 14
14 15
14 16
14 17 BRENT SIEGRIST
14 18 Speaker of the House
14 19
14 20
14 21
14 22 MARY E. KRAMER
14 23 President of the Senate
14 24
14 25 I hereby certify that this bill originated in the House and
14 26 is known as House File 714, Seventy-ninth General Assembly.
14 27
14 28
14 29
14 30 MARGARET THOMSON
14 31 Chief Clerk of the House
14 32 Approved , 2001
14 33
14 34
14 35
15 1 THOMAS J. VILSACK
15 2 Governor
Text: HF00713 Text: HF00715 Text: HF00700 - HF00799 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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