Text: HSB00116 Text: HSB00118 Text: HSB00100 - HSB00199 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
PAG LIN
1 1 Section 1. NEW SECTION. 15.375 SHORT TITLE.
1 2 This part shall be known as and may be cited as the "Child
1 3 Care Employee Benefits Act".
1 4 Sec. 2. NEW SECTION. 15.376 DEFINITIONS.
1 5 As used in this part, unless the context otherwise
1 6 requires:
1 7 1. "Business" means all businesses operating within the
1 8 state and includes individuals operating a sole proprietorship
1 9 or having rental, royalty, or farm income in this state and
1 10 includes a consortium of businesses.
1 11 2. a. "Child care" means the same as defined in section
1 12 237A.1.
1 13 b. "Child care center" means a facility licensed pursuant
1 14 to section 237A.2 to provide child care.
1 15 3. "Contribution" includes cash, material or supplies,
1 16 real estate, labor, professional services, technical
1 17 assistance, or equipment. "Contribution" does not include
1 18 investments made by a financial institution or insurance
1 19 company in the normal course of its business.
1 20 Sec. 3. NEW SECTION. 15.377 CHILD CARE CENTER TAX CREDIT
1 21 – APPROVAL OF PROJECTS AND PROPOSALS.
1 22 1. TAX CREDIT. A business which for the benefit of its
1 23 employees builds, contributes to, or operates a new or
1 24 existing child care center in the state or subsidizes access
1 25 to a child care center in the state shall receive a child care
1 26 center tax credit as provided in section 15.378 if the
1 27 director annually approves the proposal of the business.
1 28 2. CHILD CARE EMPLOYEE BENEFITS. For child care employee
1 29 benefits for which a child care center tax credit under this
1 30 part may be approved, the following apply:
1 31 a. A proposal for a project shall be submitted by a
1 32 business located in or doing business in the state.
1 33 b. The proposal shall be on forms supplied by the
1 34 department. The proposal shall identify the location of the
1 35 child care center which must be in the state.
2 1 c. To be eligible for a child care center tax credit, the
2 2 business must provide child care employee benefits for its
2 3 employees through any of the following:
2 4 (1) Build a new structure or rehabilitate an existing
2 5 structure to be used as a child care center. A business may
2 6 do the building or rehabilitating in conjunction with another
2 7 business or entity but only the business's actual costs shall
2 8 be considered in determining the amount of credit. At least
2 9 five children of its employees are provided child care at the
2 10 center.
2 11 (2) Operate or lease a child care center where at least
2 12 five children of its employees are provided child care at the
2 13 center.
2 14 (3) Donate money, supplies, or other tangible personal
2 15 property to a child care center where at least five children
2 16 of its employees are provided child care.
2 17 (4) Pay the cost for the equivalent of five children of
2 18 its employees to attend a child care center.
2 19 d. A business is ineligible for a child care center tax
2 20 credit if it derives income from the operation, lease, or
2 21 management of more than one child care center.
2 22 e. An annual application deadline shall be determined by
2 23 the department and application material shall be distributed
2 24 upon request no less than sixty days prior to the actual
2 25 application deadline.
2 26 3. TAX CREDIT APPLICATION.
2 27 a. The department shall approve or disapprove applications
2 28 for child care center tax credits for businesses that have
2 29 provided child care for the benefit of their employees. The
2 30 director, upon approval of an application, shall notify the
2 31 director of revenue and finance and the governor of those
2 32 businesses entitled to a tax credit.
2 33 If the business meets the criteria for eligibility, the
2 34 department of economic development shall issue to the business
2 35 a certification of entitlement for the child care center tax
3 1 credit. The certification shall contain the name of the
3 2 business, address, tax identification number, the amount of
3 3 the credit, the tax year for which the certificate applies,
3 4 and any other information required by the department of
3 5 revenue and finance.
3 6 b. The procedures and requirements for filing a tax credit
3 7 application are as follows:
3 8 (1) Businesses wanting to provide child care employee
3 9 benefits, but first wishing to verify the eligibility of the
3 10 provision of child care employee benefits for a tax credit,
3 11 may submit a tax credit eligibility confirmation form to the
3 12 department. The department will confirm in writing whether or
3 13 not the provision of child care employee benefits qualifies
3 14 for credit and how the value of the credit will be determined.
3 15 This confirmation will not constitute credit approval.
3 16 (2) In order to qualify for credit, providing of child
3 17 care employee benefits must occur during the approved project
3 18 period with the exception of donated audit services, which may
3 19 occur anytime during the six-month period following the
3 20 project period, and must be directly related to the approved
3 21 project.
3 22 (3) Businesses wishing to apply for credit must complete a
3 23 child care center tax credit application.
3 24 (4) Tax credit applications are to be signed by the
3 25 managing entity of the child care center and submitted
3 26 directly to the department not later than one year following
3 27 the date of provision of child care employee benefits.
3 28 (5) The order in which completed credit applications are
3 29 received by the department will determine the order in which
3 30 credits are approved. Facsimile copies will not be considered
3 31 completed applications.
3 32 (6) The department shall examine all submitted
3 33 applications and determine which child care employee benefits
3 34 meet the eligibility criteria.
3 35 c. The department shall establish by rule the methods to
4 1 be used in determining the value of child care employee
4 2 benefits of a business.
4 3 Sec. 4. NEW SECTION. 15.378 TAX CREDIT – DOCUMENTATION.
4 4 1. For a tax credit application approved pursuant to
4 5 section 15.377, the child care center tax credit available
4 6 under this part may be used to reduce the tax liability
4 7 imposed under chapter 422, division II, III, or V, or chapter
4 8 432 or 533.
4 9 2. Subject to subsections 3 and 4, the amount of the child
4 10 care center tax credit shall be twenty-five percent of the
4 11 cost to provide the child care employee benefits.
4 12 3. a. The tax credit shall not exceed one hundred
4 13 thousand dollars annually.
4 14 b. Any tax credit in excess of the business's tax
4 15 liability for a tax year may be credited to the tax liability
4 16 for the following five tax years or until depleted, whichever
4 17 is the earlier.
4 18 c. A financial institution or insurance company shall not
4 19 receive a tax credit for activities that are part of its
4 20 normal course of business.
4 21 d. To be eligible to receive the tax credit, a business
4 22 shall provide documentation of the contributions or costs on
4 23 which the credit is based. The documentation shall be as
4 24 specified by rules of the department.
4 25 4. The total amount of child care center tax credits that
4 26 may be approved pursuant to this part shall not exceed two
4 27 million dollars in any fiscal year.
4 28 Sec. 5. NEW SECTION. 422.11H CHILD CARE CENTER TAX
4 29 CREDIT.
4 30 The taxes imposed under this division, less the credits
4 31 allowed under sections 422.12 and 422.12B, shall be reduced by
4 32 a child care center tax credit received pursuant to sections
4 33 15.375 through 15.378.
4 34 An individual may claim the tax credit allowed a
4 35 partnership, limited liability company, S corporation, or
5 1 estate or trust electing to have the income taxed directly to
5 2 the individual. The amount claimed by the individual shall be
5 3 based upon the pro rata share of the individual's earnings of
5 4 the partnership, limited liability company, S corporation, or
5 5 estate or trust.
5 6 Any credit in excess of the tax liability for the tax year
5 7 may be credited to the tax liability for the following five
5 8 tax years or until depleted, whichever is earlier.
5 9 If the child care center tax credit is taken on the tax
5 10 return, a deduction shall not be allowed for Iowa tax purposes
5 11 for expenditures for providing child care employee benefits
5 12 which are deductible for federal tax purposes.
5 13 Sec. 6. Section 422.33, Code 2003, is amended by adding
5 14 the following new subsection:
5 15 NEW SUBSECTION. 14. The taxes imposed under this division
5 16 shall be reduced by a child care center tax credit received
5 17 pursuant to sections 15.375 through 15.378.
5 18 Any credit in excess of the tax liability for the tax year
5 19 may be credited to the tax liability for following five tax
5 20 years or until depleted, whichever is earlier.
5 21 If the child care center tax credit is taken on the tax
5 22 return, a deduction shall not be allowed for Iowa tax purposes
5 23 for expenditures for providing child care employee benefits
5 24 which are deductible for federal tax purposes.
5 25 Sec. 7. Section 422.60, Code 2003, is amended by adding
5 26 the following new subsection:
5 27 NEW SUBSECTION. 7. The taxes imposed under this division
5 28 shall be reduced by a child care center tax credit received
5 29 pursuant to sections 15.375 through 15.378.
5 30 Any credit in excess of the tax liability for the tax year
5 31 may be credited to the tax liability for the following five
5 32 tax years or until depleted, whichever is earlier.
5 33 If the child care center tax credit is taken on the tax
5 34 return, a deduction shall not be allowed for Iowa tax purposes
5 35 for expenditures for providing child care employee benefits
6 1 which are deductible for federal tax purposes.
6 2 Sec. 8. NEW SECTION. 432.12D CHILD CARE CENTER TAX
6 3 CREDIT.
6 4 The tax imposed under this chapter shall be reduced by a
6 5 child care center tax credit received pursuant to sections
6 6 15.375 through 15.378.
6 7 Any credit in excess of the tax liability for the calendar
6 8 year may be credited to the tax liability for the following
6 9 five calendar years or until depleted, whichever is earlier.
6 10 Sec. 9. Section 533.24, Code 2003, is amended by adding
6 11 the following new unnumbered paragraph:
6 12 NEW UNNUMBERED PARAGRAPH. The tax imposed on moneys and
6 13 credits under this section shall be reduced by a child care
6 14 center tax credit received pursuant to sections 15.375 through
6 15 15.378. Any credit in excess of the tax liability for the tax
6 16 year may be credited to the tax liability for the following
6 17 five tax years or until depleted, whichever is earlier.
6 18 Sec. 10. EFFECTIVE AND APPLICABILITY DATE. This Act,
6 19 being deemed of immediate importance, takes effect upon
6 20 enactment. Sections 5 through 9 of this Act apply to tax
6 21 years beginning on or after January 1, 2004.
6 22 EXPLANATION
6 23 This bill establishes a child care employee benefits
6 24 program administered by the department of economic
6 25 development. The program is to provide tax incentives to
6 26 businesses which make expenditures to provide child care
6 27 benefits to its employees. The child care employee benefits
6 28 involve the business building or rehabilitating an existing
6 29 structure as a child care center for use of its employees,
6 30 paying for children of employees to attend a child care
6 31 center, operating or leasing a center, or donating money or
6 32 tangible property to a center at which its employees' children
6 33 attend.
6 34 The tax incentives are provided in the form of tax credits
6 35 which may be used to offset the tax liability under the
7 1 individual and corporate income taxes, financial institution
7 2 franchise tax, the insurance gross premiums tax, and the
7 3 credit union moneys and credits tax.
7 4 The amount of the child care center tax credit equals 25
7 5 percent of the expenditures for providing child care employee
7 6 benefits with a maximum credit of $100,000. The tax credits
7 7 must be approved by the department of economic development.
7 8 Not more than $2 million in these credits may be approved in a
7 9 fiscal year.
7 10 The bill takes effect upon enactment and the tax credit
7 11 provisions are effective January 1, 2004, for tax years
7 12 beginning on or after that date.
7 13 LSB 1988YC 80
7 14 mg/pj/5
Text: HSB00116 Text: HSB00118 Text: HSB00100 - HSB00199 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
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