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PAG LIN
1 1 Amend Senate File 522 as follows:
1 2 #1. By striking everything after the enacting
1 3 clause and inserting the following:
1 4 "Section 1. NEW SECTION. 15.380 SHORT TITLE.
1 5 This part shall be known as and may be cited as the
1 6 "Community Development Program Act".
1 7 Sec. 2. NEW SECTION. 15.381 DEFINITIONS.
1 8 As used in this part, unless the context otherwise
1 9 requires:
1 10 1. "Business" means all businesses operating
1 11 within the state and includes individuals operating a
1 12 sole proprietorship or having rental, royalty, or farm
1 13 income in this state and includes a consortium of
1 14 businesses.
1 15 2. a. "Child care" means the same as defined in
1 16 section 237A.1.
1 17 b. "Child care center" means a facility licensed
1 18 pursuant to section 237A.2 to provide child care.
1 19 3. "Community services" means, but is not limited
1 20 to, individual, group, and family counseling; parent
1 21 and early childhood education; mental health services;
1 22 primary care and community medical health centers;
1 23 child and adult care services; senior citizen service
1 24 centers; recreation programs; nutrition programs;
1 25 emergency shelters for persons suffering from physical
1 26 abuse or rape; services for the handicapped; sheltered
1 27 workshops, vocational counseling; substance abuse
1 28 counseling; and referral services.
1 29 4. "Contribution" includes cash, material or
1 30 supplies, real estate, labor, professional services,
1 31 technical assistance, or equipment. "Contribution"
1 32 does not include investments made by a financial
1 33 institution or insurance company in the normal course
1 34 of its business.
1 35 5. "Crime prevention" means activities which
1 36 include but are not limited to services to ex-
1 37 offenders, local civilian organizations that help
1 38 prevent crime or provide aid to victims of crime,
1 39 mediation services aimed at resolving disputes and
1 40 conflicts before they become criminal incidents, or
1 41 services to juveniles who have had contact with the
1 42 court or police.
1 43 6. "Distressed or blighted area" means an area
1 44 designated or that qualifies under section 15E.194 to
1 45 be designated an enterprise zone pursuant to chapter
1 46 15E, division XVIII, designated as a slum or blighted
1 47 area pursuant to chapter 403, or designated as a
1 48 revitalization area pursuant to chapter 404.
1 49 7. "Economic development" means the acquisition,
1 50 renovation, improvement, or the furnishing or
2 1 equipping of existing buildings and real estate in
2 2 distressed or blighted areas of the state when this
2 3 acquisition, renovation, improvement, or the
2 4 furnishing or equipping of the existing buildings and
2 5 real estate will result in the creation or retention
2 6 of jobs within the state.
2 7 8. "Education" includes literacy programs, adult
2 8 basic education and general educational development
2 9 certificate programs, English as a second language
2 10 program designed to teach English to students or
2 11 adults whose native language is other than English,
2 12 training for the physically or mentally challenged,
2 13 and educational programs to assist persons who have
2 14 dropped out of school for reason other than death or
2 15 transfer to another school or to assist students who
2 16 are at-risk of dropping out or failing to meet the
2 17 goals of the educational agenda established by the
2 18 school district.
2 19 9. "Job training" means those activities which
2 20 provide specific vocational skills including special
2 21 apprenticeship or on-the-job training programs not
2 22 otherwise available.
2 23 10. "Neighborhood area" means a specific
2 24 geographic area certified by the department as having
2 25 a readily identifiable residential population and
2 26 which may include, but is not limited to, any of the
2 27 following factors:
2 28 a. A sense of belonging or identity that ties
2 29 residents to a given area.
2 30 b. Social, cultural, political, or economic
2 31 activities around which people organize themselves.
2 32 c. The existence of cohesive organizations formed
2 33 by residents.
2 34 d. A city with a population of less than ten
2 35 thousand or a region within a rural area may be
2 36 certified as a neighborhood area.
2 37 e. A history of acting or being treated as a
2 38 distinct or cohesive unit.
2 39 f. The area is designated as a community
2 40 empowerment area in accordance with chapter 28.
2 41 11. "Physical revitalization" means activities
2 42 designed for the physical improvement of any part or
2 43 all of a neighborhood area. These activities may
2 44 include, but are not limited to, such programs as
2 45 commercial area revitalization; housing construction
2 46 or rehabilitation; improvements to or acquisition or
2 47 construction of facilities used by nonprofit
2 48 organizations for community purposes or related
2 49 planning and promotional activities designed to aid in
2 50 those programs.
3 1 12. a. "Qualifying organization" means an
3 2 organization performing community services or economic
3 3 development activities in the state and is any of the
3 4 following:
3 5 (1) A person or organization that is exempt from
3 6 federal income taxation under the Internal Revenue
3 7 Code as defined in section 422.3.
3 8 (2) A nonprofit corporation organized under the
3 9 laws of this state.
3 10 (3) Designated as a community development
3 11 corporation by the federal government pursuant to,
3 12 Title VII of the Economic Opportunity Act of 1964,
3 13 Pub. L. No. 88-452.
3 14 (4) A community empowerment area board created in
3 15 accordance with chapter 28.
3 16 b. "Qualifying organization" does not include any
3 17 of the following:
3 18 (1) A unit or agency of the state, local
3 19 government, or educational institution. This
3 20 subparagraph shall not be interpreted to prevent a
3 21 community empowerment area board from being considered
3 22 a qualifying organization.
3 23 (2) A foundation or trust of a postsecondary
3 24 educational institution.
3 25 (3) A church-affiliated religious organization
3 26 unless the organization is without religious
3 27 discrimination or is not controlled by a single
3 28 denomination.
3 29 Sec. 3. NEW SECTION. 15.382 COMMUNITY
3 30 DEVELOPMENT AND CHILD CARE CENTER TAX CREDITS –
3 31 APPROVAL OF PROJECTS AND PROPOSALS.
3 32 1. TAX CREDITS.
3 33 a. A business which engages in the activities of
3 34 providing physical revitalization, economic
3 35 development, job training or education for
3 36 individuals, community services, or crime prevention
3 37 in the state shall receive a community development tax
3 38 credit as provided in section 15.383 if the director
3 39 annually approves the proposal of the business.
3 40 However, a proposal for a community development tax
3 41 credit shall not be approved which does not have the
3 42 endorsement of the local government for the area in
3 43 which the business is engaging in such activities that
3 44 the proposal is consistent with the overall community
3 45 or neighborhood development plan adopted by that local
3 46 government.
3 47 b. A business which for the benefit of its
3 48 employees builds, contributes to, or operates a new or
3 49 existing child care center in the state or subsidizes
3 50 access to a child care center in the state shall
4 1 receive a child care center tax credit as provided in
4 2 section 15.383 if the director annually approves the
4 3 proposal of the business.
4 4 2. ECONOMIC DEVELOPMENT PROJECTS. For economic
4 5 development projects in distressed or blighted areas
4 6 for which community development tax credits under this
4 7 part may be approved, the following guidelines apply:
4 8 a. Applications shall be accepted from any locally
4 9 based qualifying organization wishing to conduct an
4 10 economic development project in a distressed or
4 11 blighted area.
4 12 b. Applicants may not administer more than one
4 13 economic development project at a time. A project may
4 14 include more than one building, provided that the
4 15 proposal meets all other eligibility requirements as
4 16 set forth in this subsection and rules of the
4 17 department.
4 18 c. Applications will be accepted by the department
4 19 at any time of the year and will be approved on a
4 20 case-by-case basis as all the necessary requirements
4 21 are met and as credits become available.
4 22 d. A maximum authorization of one hundred fifty
4 23 thousand dollars in community development tax credits
4 24 will be permitted per project and no more than five
4 25 percent of the credits authorized for the project
4 26 shall normally be allowed for administrative and
4 27 operating expenses. In unusual circumstances, a
4 28 higher percentage may be allowed at the discretion of
4 29 the department.
4 30 e. Applicants must obtain a nonbinding commitment
4 31 from a prospective business or businesses willing to
4 32 locate to the facility and demonstrate that at least
4 33 one job will be created or retained for every ten
4 34 thousand dollars in credits requested. Eligible types
4 35 of businesses include retail, commercial, service, and
4 36 manufacturing.
4 37 3. COMMUNITY DEVELOPMENT PROJECTS. For community
4 38 development projects, other than economic development
4 39 projects, for which community development tax credits
4 40 under this part may be approved, the following
4 41 procedures, criteria, and priorities apply:
4 42 a. A proposal for a proposed program shall be
4 43 submitted by a qualifying organization for carrying
4 44 out a specific project consistent with the purposes of
4 45 this part.
4 46 b. All proposals shall be made on the forms
4 47 supplied by the department. Each proposal shall
4 48 contain a project budget and shall identify, if
4 49 possible, the items and amounts of the budget which
4 50 will be provided for from contributions from any
5 1 business. A project budget shall be approved by the
5 2 department. The department may request any additional
5 3 information it determines necessary to evaluate a
5 4 proposal or plan.
5 5 c. Community development projects and the budgets
5 6 for them may be approved for a period of up to three
5 7 years at the discretion of the director.
5 8 d. An annual application deadline shall be
5 9 determined by the department and application materials
5 10 shall be distributed upon request no less than sixty
5 11 days prior to the actual application deadline.
5 12 e. All proposals must address at least one of the
5 13 following priorities in order to qualify for approval:
5 14 (1) The project substantially contributes to self-
5 15 help efforts by residents of the neighborhood area to
5 16 be served in addressing locally defined objectives.
5 17 (2) The project will result in the provision of
5 18 essential services to low-income and moderate-income
5 19 families which would not otherwise be provided in the
5 20 affected neighborhood area and for which there are not
5 21 other resources. "Low-income and moderate-income
5 22 families" means those families, including single-
5 23 person households, earning no more than eighty percent
5 24 of the higher of the median family income of the
5 25 county or the statewide nonmetropolitan area as
5 26 determined by the latest United States department of
5 27 housing and urban development, section 8 income
5 28 guidelines.
5 29 (3) The project tangibly contributes to the
5 30 development of lasting cooperation and partnership
5 31 efforts of neighborhood organizations and businesses.
5 32 f. Approval or disapproval of proposals shall be
5 33 based on the following criteria:
5 34 (1) The director must certify an area as
5 35 experiencing problems endangering the area's existence
5 36 as a viable and stable neighborhood to be eligible for
5 37 assistance.
5 38 (2) The qualifying organization submitting the
5 39 proposal must demonstrate its capacity to adequately
5 40 administer the project.
5 41 (3) There must be a demonstrated need for the
5 42 program in the neighborhood area within which the
5 43 project is to be carried out.
5 44 (4) The proposal must demonstrate that residents
5 45 of the affected neighborhood area have been involved
5 46 in the planning of the proposed project and describe
5 47 the extent to which they will be involved in its
5 48 implementation.
5 49 (5) The proposal must be consistent with all
5 50 locally approved community or neighborhood development
6 1 plans for the area.
6 2 (6) Proposals submitted subsequent to the first
6 3 year will be evaluated on performance of the first-
6 4 year project, other resources developed, continued
6 5 need, and potential for eventual self-sufficiency.
6 6 g. In no case shall a project be approved that
6 7 does not have a written endorsement of the appropriate
6 8 local public authority with notification given to the
6 9 community empowerment board.
6 10 h. The maximum amount of community development tax
6 11 credits allowed per project is one hundred fifty
6 12 thousand dollars.
6 13 i. For purposes of the criterion in paragraph "f",
6 14 subparagraph (1), an area is experiencing problems
6 15 endangering its existence as a viable and stable
6 16 neighborhood if some of the following factors are
6 17 present: declining population, high percentage of
6 18 people dependent on public assistance, persistent or
6 19 substantial unemployment or underemployment, lower
6 20 than average family incomes, financial disinvestment,
6 21 insurance and financial redlining, general weakened
6 22 market conditions on the neighborhood commercial strip
6 23 as indicated by declining rents or vacant stores,
6 24 excessive abandonment of properties, a significant
6 25 percentage of neighborhood residents on fixed incomes,
6 26 unsanitary or inadequate housing, overcrowding,
6 27 significant proportion of the property is rental
6 28 property, property speculation, high rates of crime
6 29 and delinquency, high degree of drug or alcohol abuse,
6 30 increasing cases of mental health problems,
6 31 significant numbers of single-parent households, high
6 32 degree of infant mortality and disease, disabilities,
6 33 general unsanitary conditions in the area, or poor
6 34 city and public utility services.
6 35 4. CHILD CARE EMPLOYEE BENEFITS. For child care
6 36 employee benefits for which a child care center tax
6 37 credit under this part may be approved, the following
6 38 apply:
6 39 a. A proposal for a project shall be submitted by
6 40 a business located in or doing business in the state.
6 41 b. The proposal shall be on forms supplied by the
6 42 department. The proposal shall identify the location
6 43 of the child care center which must be in the state.
6 44 The proposal shall contain a statement on whether the
6 45 business is also seeking a community development tax
6 46 credit for providing child care for its employees.
6 47 c. To be eligible for a child care center tax
6 48 credit, the business must provide child care employee
6 49 benefits for its employees through any of the
6 50 following:
7 1 (1) Build a new structure or rehabilitate an
7 2 existing structure to be used as a child care center.
7 3 A business may do the building or rehabilitating in
7 4 conjunction with another business or entity but only
7 5 the business's actual costs shall be considered in
7 6 determining the amount of credit. At least five
7 7 children of its employees are provided child care at
7 8 the center.
7 9 (2) Operate or lease a child care center where at
7 10 least five children of its employees are provided
7 11 child care at the center.
7 12 (3) Donate money, supplies, or other tangible
7 13 personal property to a child care center where at
7 14 least five children of its employees are provided
7 15 child care.
7 16 (4) Pay the cost for the equivalent of five
7 17 children of its employees to attend a child care
7 18 center.
7 19 d. A business is ineligible for a child care
7 20 center tax credit if any of the following applies:
7 21 (1) It derives income from the operation, lease,
7 22 or management of more than one child care center.
7 23 (2) The business has received a community
7 24 development tax credit for activities related to the
7 25 child care center for which it is seeking a tax
7 26 credit.
7 27 e. An annual application deadline shall be
7 28 determined by the department and application material
7 29 shall be distributed upon request no less than sixty
7 30 days prior to the actual application deadline.
7 31 5. TAX CREDIT APPLICATION.
7 32 a. The department shall approve or disapprove
7 33 applications for community development tax credits to
7 34 businesses which have invested in approved economic
7 35 development projects or other community development
7 36 projects or for child care center tax credits for
7 37 businesses that have provided child care for the
7 38 benefit of their employees. The director, upon
7 39 approval of an application, shall notify the director
7 40 of revenue and finance and the governor of those
7 41 businesses entitled to a tax credit.
7 42 If the business meets the criteria for eligibility,
7 43 the department of economic development shall issue to
7 44 the business a certification of entitlement for the
7 45 community development tax credit or child care center
7 46 tax credit. The certification shall contain the name
7 47 of the business, address, tax identification number,
7 48 the amount of the credit, the tax year for which the
7 49 certificate applies, and any other information
7 50 required by the department of revenue and finance.
8 1 b. The procedures and requirements for filing a
8 2 tax credit application are as follows:
8 3 (1) Businesses wanting to donate to a particular
8 4 community development project or wanting to provide
8 5 child care employee benefits, but first wishing to
8 6 verify the eligibility of the donation or provision of
8 7 child care employee benefits for a tax credit, may
8 8 submit a tax credit eligibility confirmation form to
8 9 the department. The department will confirm in
8 10 writing whether or not the donation or the provision
8 11 of child care employee benefits qualifies for credit
8 12 and how the value of the credit will be determined.
8 13 This confirmation will not constitute credit approval.
8 14 (2) In order to qualify for credit, donations or
8 15 providing of child care employee benefits must occur
8 16 during the approved project period with the exception
8 17 of donated audit services, which may occur anytime
8 18 during the six-month period following the project
8 19 period, and must be directly related to the approved
8 20 project.
8 21 (3) Businesses wishing to apply for credit must
8 22 complete a community development tax credit
8 23 application or child care center tax credit
8 24 application. A business providing child care for the
8 25 benefit of its employees may complete and file both
8 26 applications, but only one credit shall be approved.
8 27 (4) Tax credit applications are to be signed by
8 28 the qualifying organization or the managing entity of
8 29 the child care center, as applicable, and submitted
8 30 directly to the department not later than one year
8 31 following the date of donation or providing of child
8 32 care employee benefits.
8 33 (5) The order in which completed credit
8 34 applications are received by the department will
8 35 determine the order in which credits are approved.
8 36 Facsimile copies will not be considered completed
8 37 applications.
8 38 (6) Every transmittal of community development tax
8 39 credit applications to the department must be
8 40 accompanied by a project report prepared by the
8 41 qualifying organization.
8 42 (7) The department shall examine all submitted
8 43 applications and determine which donations or child
8 44 care employee benefits meet the eligibility criteria.
8 45 c. The department shall establish by rule the
8 46 methods to be used in determining the value of
8 47 contributions or child care employee benefits of a
8 48 business.
8 49 Sec. 4. NEW SECTION. 15.383 TAX CREDITS –
8 50 DOCUMENTATION.
9 1 1. For a tax credit application approved pursuant
9 2 to section 15.382, the community development tax
9 3 credit or child care center tax credit available under
9 4 this part may be used to reduce the tax liability
9 5 imposed under chapter 422, division II, III, or V, or
9 6 chapter 432 or 533.
9 7 2. Subject to subsections 4 and 5, the amount of
9 8 the community development tax credit shall be fifty
9 9 percent of the contribution made by the business
9 10 during the tax year.
9 11 3. Subject to subsections 4 and 6, the amount of
9 12 the child care center tax credit shall be twenty-five
9 13 percent of the cost to provide the child care employee
9 14 benefits.
9 15 4. a. The tax credit shall not exceed one hundred
9 16 thousand dollars annually.
9 17 b. Any tax credit in excess of the business's tax
9 18 liability for a tax year may be credited to the tax
9 19 liability for the following five tax years or until
9 20 depleted, whichever is the earlier.
9 21 c. A financial institution or insurance company
9 22 shall not receive a tax credit for activities that are
9 23 part of its normal course of business.
9 24 d. To be eligible to receive the tax credit, a
9 25 business shall provide documentation of the
9 26 contributions or costs on which the credit is based.
9 27 The documentation shall be as specified by rules of
9 28 the department.
9 29 5. The total amount of community development tax
9 30 credits that may be approved pursuant to this part
9 31 shall not exceed two million dollars in any fiscal
9 32 year.
9 33 6. The total amount of child care center tax
9 34 credits that may be approved pursuant to this part
9 35 shall not exceed two million dollars in any fiscal
9 36 year.
9 37 Sec. 5. NEW SECTION. 422.11C COMMUNITY
9 38 DEVELOPMENT OR CHILD CARE CENTER TAX CREDIT.
9 39 The taxes imposed under this division, less the
9 40 credits allowed under sections 422.12 and 422.12B,
9 41 shall be reduced by a community development tax credit
9 42 or child care center tax credit received pursuant to
9 43 sections 15.380 through 15.383.
9 44 An individual may claim the tax credit allowed a
9 45 partnership, limited liability company, S corporation,
9 46 or estate or trust electing to have the income taxed
9 47 directly to the individual. The amount claimed by the
9 48 individual shall be based upon the pro rata share of
9 49 the individual's earnings of the partnership, limited
9 50 liability company, S corporation, or estate or trust.
10 1 Any credit in excess of the tax liability for the
10 2 tax year may be credited to the tax liability for the
10 3 following five tax years or until depleted, whichever
10 4 is earlier.
10 5 If the community development tax credit or child
10 6 care center tax credit is taken on the tax return, a
10 7 deduction shall not be allowed for Iowa tax purposes
10 8 for contributions made to a community development
10 9 project or expenditures for providing child care
10 10 employee benefits which are deductible for federal tax
10 11 purposes.
10 12 Sec. 6. Section 422.33, Code 2001, is amended by
10 13 adding the following new subsection:
10 14 NEW SUBSECTION. 11. The taxes imposed under this
10 15 division shall be reduced by a community development
10 16 tax credit or child care center tax credit received
10 17 pursuant to sections 15.380 through 15.383.
10 18 Any credit in excess of the tax liability for the
10 19 tax year may be credited to the tax liability for
10 20 following five tax years or until depleted, whichever
10 21 is earlier.
10 22 If the community development tax credit or child
10 23 care center tax credit is taken on the tax return, a
10 24 deduction shall not be allowed for Iowa tax purposes
10 25 for contributions made to a community development
10 26 project or expenditures for providing child care
10 27 employee benefits which are deductible for federal tax
10 28 purposes.
10 29 Sec. 7. Section 422.60, Code 2001, is amended by
10 30 adding the following new subsection:
10 31 NEW SUBSECTION. 4. The taxes imposed under this
10 32 division shall be reduced by a community development
10 33 tax credit or child care center tax credit received
10 34 pursuant to sections 15.380 through 15.383.
10 35 Any credit in excess of the tax liability for the
10 36 tax year may be credited to the tax liability for the
10 37 following five tax years or until depleted, whichever
10 38 is earlier.
10 39 If the community development tax credit or child
10 40 care center tax credit is taken on the tax return, a
10 41 deduction shall not be allowed for Iowa tax purposes
10 42 for contributions made to a community development
10 43 project or expenditures for providing child care
10 44 employee benefits which are deductible for federal tax
10 45 purposes.
10 46 Sec. 8. NEW SECTION. 432.12A COMMUNITY
10 47 DEVELOPMENT OR CHILD CARE CENTER TAX CREDIT.
10 48 The tax imposed under this chapter shall be reduced
10 49 by a community development tax credit or child care
10 50 center tax credit received pursuant to sections 15.380
11 1 through 15.383.
11 2 Any credit in excess of the tax liability for the
11 3 calendar year may be credited to the tax liability for
11 4 the following five calendar years or until depleted,
11 5 whichever is earlier.
11 6 Sec. 9. Section 533.24, Code 2001, is amended by
11 7 adding the following new unnumbered paragraph:
11 8 NEW UNNUMBERED PARAGRAPH. The tax imposed on
11 9 moneys and credits under this section shall be reduced
11 10 by a community development tax credit or child care
11 11 center tax credit received pursuant to sections 15.380
11 12 through 15.383. Any credit in excess of the tax
11 13 liability for the tax year may be credited to the tax
11 14 liability for the following five tax years or until
11 15 depleted, whichever is earlier.
11 16 Sec. 10. EFFECTIVE AND APPLICABILITY PROVISION.
11 17 This Act takes effect only if the revenue estimating
11 18 conference estimates that, as a result of the
11 19 enactment of federal income tax legislation prior to
11 20 January 1, 2002, Iowa income tax receipts for the
11 21 fiscal year beginning July 1, 2001, will be increased
11 22 by $7.9 million or more over the amount of Iowa income
11 23 tax receipts which would have been realized in the
11 24 absence of the enactment of such federal income tax
11 25 legislation. If this Act takes effect, sections 5
11 26 through 9 of this Act apply to tax years beginning on
11 27 or after January 1, 2002."
11 28
11 29
11 30
11 31 PAUL McKINLEY
11 32 SF 522.501 79
11 33 mg/pj
Text: S03630 Text: S03632 Text: S03600 - S03699 Text: S Index Bills and Amendments: General Index Bill History: General Index
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