Text: HF00398 Text: HF00400 Text: HF00300 - HF00399 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 15.330, Code 2003, is amended to read 1 2 as follows: 1 3 15.330 AGREEMENT NONCOMPLIANCE PENALTIES. 1 4 1. A business or group of businesses shall enter into an 1 5 agreement with the department specifying the requirements 1 6 which must be met to satisfy the criteria of section 15.329. 1 7 The department shall consult with the community during 1 8 negotiations relating to the agreement. The agreement shall 1 9 contain the following provisions: 1 101.a. If the business or group of businesses has not met 1 11 more than ninety percent of the job creation requirement in 1 12 section 15.329, subsection 1, paragraph "f", it shall pay a 1 13 percentage of the incentive receivedunder section 15.334, or1 14if the business or group of businesses does not receive the1 15incentive under section 15.334, thenunder section 15.333 as 1 16 follows: 1 17a.(1) If the business or group of businesses has met 1 18 fifty percent or less of the requirement, the business or 1 19 group of businesses shall pay the same percentage in benefits 1 20 as the business or group of businesses failed to create in 1 21 jobs. 1 22b.(2) If the business or group of businesses has met more 1 23 than fifty percent but not more than seventy-five percent of 1 24 the requirement, the business or group of businesses shall pay 1 25 one-half of the percentage in benefits as the business or 1 26 group of businesses failed to create in jobs. 1 27c.(3) If the business or group of businesses has met more 1 28 than seventy-five percent but not more than ninety percent of 1 29 the requirement, the business or group of businesses shall pay 1 30 one quarter of the percentage in benefits as the business or 1 31 group of businesses failed to create in jobs. 1 322.b. If a business or group of businesses does not meet 1 33 the wage requirement of section 15.329, subsection 1, or any 1 34 of the three criteria selected by the business or group of 1 35 businesses under section 15.329, subsection 2, in any one 2 1 year, it must meet that requirement in the following year or 2 2 forfeit the incentives for that year. 2 3 c. If a business or group of businesses approved to 2 4 receive incentives under this part experiences a layoff within 2 5 the state or closes any of its facilities within the state 2 6 prior to receiving the incentives, the department may reduce 2 7 or eliminate some or all of the incentives. If a business or 2 8 group of businesses receives incentives under this part and 2 9 experiences a layoff within the state or closes any of its 2 10 facilities within the state, the business or group of 2 11 businesses may be subject to repayment of some or all of the 2 12 incentives received by the business or group of businesses. 2 13 2. The department shall adopt rules for repayment of 2 14 incentives by the business or group of businesses if the 2 15 business or group of businesses has not met any of the 2 16 requirements of this part. 2 17 Sec. 2. NEW SECTION. 15.333B FRANCHISE TAX CREDITS. 2 18 1. An eligible business may claim a franchise tax credit 2 19 up to a maximum of ten percent of the new investment directly 2 20 related to new jobs created by the location or expansion of an 2 21 eligible business under the program. Any credit in excess of 2 22 the tax liability for the tax year may be credited to the tax 2 23 liability for the following seven years or until depleted, 2 24 whichever occurs earlier. 2 25 For purposes of this section, "new investment directly 2 26 related to new jobs created by the location or expansion of an 2 27 eligible business under the program" means the cost of 2 28 machinery and equipment, as described in section 427A.1, 2 29 subsection 1, paragraphs "e" and "j", purchased for use in the 2 30 operation of the eligible business, the purchase price of 2 31 which has been depreciated in accordance with generally 2 32 accepted accounting principles, and the cost of improvements 2 33 made to real property which is used in the operation of the 2 34 eligible business. 2 35 For purposes of this section, the purchase price of real 3 1 property and any buildings and structures located on the real 3 2 property is considered a "new investment in the location or 3 3 expansion of an eligible business". However, if within five 3 4 years of purchase, the eligible business sells, disposes of, 3 5 razes, or otherwise renders unusable all or a part of the 3 6 land, buildings, or other existing structures for which a 3 7 franchise tax credit was claimed under this section, the 3 8 franchise tax liability of the eligible business for the year 3 9 in which all or part of the property is sold, disposed of, 3 10 razed, or otherwise rendered unusable shall be increased by 3 11 one of the following amounts: 3 12 a. One hundred percent of the tax credit claimed under 3 13 this section if the property ceases to be eligible for the tax 3 14 credit within one year after being placed in service. 3 15 b. Eighty percent of the tax credit claimed under this 3 16 section if the property ceases to be eligible for the tax 3 17 credit within two years after being placed in service. 3 18 c. Sixty percent of the tax credit claimed under this 3 19 section if the property ceases to be eligible for the tax 3 20 credit within three years after being placed in service. 3 21 d. Forty percent of the tax credit claimed under this 3 22 section if the property ceases to be eligible for the tax 3 23 credit within four years after being placed in service. 3 24 e. Twenty percent of the tax credit claimed under this 3 25 section if the property ceases to be eligible for the tax 3 26 credit within five years after being placed in service. 3 27 2. An eligible business which has entered into an 3 28 agreement under chapter 260E and which has increased its base 3 29 employment level by at least ten percent within the time set 3 30 in the agreement or, in the case of a business without a base 3 31 employment level, adds new jobs within the time set in the 3 32 agreement is entitled to a new jobs franchise tax credit for 3 33 the tax year selected by the business. In determining if the 3 34 business has increased its base employment level by ten 3 35 percent or added new jobs, only the new jobs directly 4 1 resulting from the project covered by the agreement and the 4 2 new jobs directly related to those new jobs shall be counted. 4 3 The amount of the credit is equal to the product of six 4 4 percent of the taxable wages upon which an employer is 4 5 required to contribute to the state unemployment compensation 4 6 fund, as defined in section 96.19, subsection 37, times the 4 7 number of new jobs existing in the tax year that directly 4 8 result from the project covered by the agreement or new jobs 4 9 that directly result from those new jobs. The tax year chosen 4 10 by the business shall either begin or end during the period 4 11 beginning with the date by which the project is to be 4 12 completed under the agreement. Any credit in excess of the 4 13 tax liability for the tax year may be credited to the tax 4 14 liability for the following seven years or until depleted, 4 15 whichever occurs earlier. For purposes of this subsection, 4 16 "agreement", "new job", and "project" mean the same as defined 4 17 in section 260E.2 and "base employment level" means the number 4 18 of full-time jobs a business employs at the site which is 4 19 covered by an agreement under chapter 260E on the date of that 4 20 agreement. 4 21 Sec. 3. Section 422.60, Code 2003, is amended by adding 4 22 the following new subsection: 4 23 NEW SUBSECTION. 7. The taxes imposed under this division 4 24 shall be reduced by a franchise tax credit authorized pursuant 4 25 to section 15.333B. 4 26 Sec. 4. Section 427B.17, subsection 5, unnumbered 4 27 paragraph 2, Code 2003, is amended to read as follows: 4 28 Any electric power generating plant which operated during 4 29 the preceding assessment year at a net capacity factor of more 4 30 than twenty percent, shall not receive the benefits of this 4 31 section or ofsectionssection 15.332and 15.334. For 4 32 purposes of this section, "electric power generating plant" 4 33 means any nameplate rated electric power generating plant, in 4 34 which electric energy is produced from other forms of energy, 4 35 including all taxable land, buildings, and equipment used in 5 1 the production of such energy. "Net capacity factor" means 5 2 net actual generation divided by the product of net maximum 5 3 capacity times the number of hours the unit was in the active 5 4 state during the assessment year. Upon commissioning, a unit 5 5 is in the active state until it is decommissioned. "Net 5 6 actual generation" means net electrical megawatt hours 5 7 produced by the unit during the preceding assessment year. 5 8 "Net maximum capacity" means the capacity the unit can sustain 5 9 over a specified period when not restricted by ambient 5 10 conditions or equipment deratings, minus the losses associated 5 11 with station service or auxiliary loads. 5 12 Sec. 5. Sections 15.334 and 15.334A, Code 2003, are 5 13 repealed. 5 14 EXPLANATION 5 15 This bill makes statutory changes to the new jobs and 5 16 income program administered by the department of economic 5 17 development. 5 18 The bill adds a requirement to be included in new jobs and 5 19 income program agreements. The bill provides that agreements 5 20 shall include a provision that if a business or group of 5 21 businesses is approved to receive or actually receives 5 22 incentives under the program and the business or group of 5 23 businesses experiences a layoff within the state or closes any 5 24 of its facilities within the state, the department may reduce 5 25 or eliminate incentives that have not yet been received or may 5 26 require repayment of some or all of the incentives received. 5 27 The bill allows an eligible business under the program to 5 28 claim a tax credit of up to 10 percent of the new investment 5 29 directly related to new jobs created by the location or 5 30 expansion of an eligible business under the program. The bill 5 31 provides that new investment directly related to new jobs 5 32 means the cost of machinery and equipment purchased for use in 5 33 the operation of the eligible business. The eligible business 5 34 may claim the tax credit against franchise tax liability for 5 35 financial institutions. The bill allows the tax credit to be 6 1 carried forward for a period of seven years or until depleted, 6 2 whichever occurs first. The bill allows the purchase price of 6 3 real property and any buildings and structures located on the 6 4 real property to be considered new investment in the location 6 5 or expansion of an eligible business, unless, within five 6 6 years of purchase, the eligible business sells, disposes of, 6 7 razes, or otherwise renders unusable the real property, in 6 8 which case the franchise tax liability is increased by a 6 9 certain percentage of the tax credit claimed. The bill allows 6 10 an eligible business which has entered into an agreement under 6 11 Code chapter 260E and which has increased its base employment 6 12 level by at least 10 percent within the time set in the 6 13 agreement or, in the case of a business without a base 6 14 employment level, adds new jobs within the time set in the 6 15 agreement to claim a new jobs franchise tax credit for a tax 6 16 year selected by the business. 6 17 The bill repeals two provisions in the new jobs and income 6 18 program relating to a property tax exemption and a sales and 6 19 use tax exemption for machinery, equipment, and computers. 6 20 The bill makes conforming amendments to the repeals. 6 21 LSB 1263HV 80 6 22 tm/sh/8
Text: HF00398 Text: HF00400 Text: HF00300 - HF00399 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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