Text: HSB00178 Text: HSB00180 Text: HSB00100 - HSB00199 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
PAG LIN
1 1 Section 1. NEW SECTION. 15.381 SHORT TITLE.
1 2 This part shall be known as and may be cited as the "New
1 3 Capital Investment Program".
1 4 Sec. 2. NEW SECTION. 15.382 PURPOSE.
1 5 It is the purpose of this part to promote new economic
1 6 development through new capital investments that upgrade and
1 7 expand the capabilities of Iowa businesses by allowing the
1 8 businesses to be more competitive in the world economy.
1 9 Sec. 3. NEW SECTION. 15.383 DEFINITIONS.
1 10 As used in this part, unless the context otherwise
1 11 requires:
1 12 1. "Community" means a city, county, or other entity
1 13 established pursuant to chapter 28E.
1 14 2. "Eligible business" means a business which has been
1 15 approved to receive incentives by the department pursuant to
1 16 section 15.384, subsection 3.
1 17 Sec. 4. NEW SECTION. 15.384 ELIGIBLE BUSINESS.
1 18 1. ELIGIBILITY REQUIREMENTS. To be eligible to receive
1 19 incentives under this part, a business shall meet all of the
1 20 following requirements:
1 21 a. The business has not closed or reduced its operation in
1 22 one area of the state and relocated substantially the same
1 23 operation in the community.
1 24 b. The business is not a retail business where entrance is
1 25 limited by a cover charge or membership requirement.
1 26 c. The business makes a capital investment of at least one
1 27 million dollars.
1 28 d. The business creates high-quality jobs due to the
1 29 capital investment. In determining whether high-quality jobs
1 30 are created, the department shall place greater emphasis on
1 31 jobs that have any of the following characteristics:
1 32 (1) Have a high wage.
1 33 (2) Have a low turnover rate.
1 34 (3) Are full-time or career-type positions.
1 35 (4) Provide comprehensive health benefits.
2 1 (5) Have other related characteristics which could be
2 2 considered to be higher in quality than do other jobs.
2 3 e. The start-up, location, or expansion of the business
2 4 occurs within a specified period which will be negotiated with
2 5 the department and the community, but which shall be at least
2 6 a period of three years.
2 7 f. The business provides the community and the department
2 8 with an affidavit stating that the business has not, within
2 9 the five years prior to the application date, violated state
2 10 or federal environmental or worker safety statutes, rules, or
2 11 regulations or, if such violation has occurred, that there
2 12 were mitigating circumstances or such violations did not
2 13 seriously affect public health or safety or the environment.
2 14 2. ELIGIBILITY FACTORS. The community and the department
2 15 may also consider a variety of factors, including the
2 16 following, in determining the eligibility of a business to
2 17 participate in the program:
2 18 a. The impact of the proposed project on the community and
2 19 the state.
2 20 b. The impact the business will have on other businesses
2 21 in competition with it.
2 22 c. The potential for future growth in the industry
2 23 represented by the business.
2 24 d. The impact the proposed new capital investment will
2 25 have on the ability of the business to expand, upgrade, or
2 26 modernize its capabilities, and the extent to which the new
2 27 capital investment will result in a more productive and
2 28 competitive business enterprise and workforce.
2 29 e. The proportion of the local funding match to be
2 30 provided.
2 31 3. APPROVAL. If the community determines that a business
2 32 is eligible, the community shall approve by resolution the
2 33 application for incentives. Once a business is found to be
2 34 eligible, the community shall submit the application to the
2 35 department. The department may approve, defer, or deny the
3 1 application.
3 2 Sec. 5. NEW SECTION. 15.385 INCENTIVES.
3 3 An eligible business shall be entitled to receive all of
3 4 the following incentives:
3 5 1. Sales, services, and use tax refund, as provided in
3 6 section 15.331A.
3 7 2. Research activities credit, as provided in section
3 8 15.335.
3 9 3. Corporate tax credit.
3 10 a. An eligible business may claim a corporate tax credit
3 11 equal to a percentage of the new investment directly related
3 12 to new jobs created by the location or expansion of an
3 13 eligible business under the program. For purposes of this
3 14 subsection, "new investment directly related to new jobs
3 15 created by the location or expansion of an eligible business
3 16 under the program" means the cost of machinery and equipment,
3 17 as defined in section 427A.1, subsection 1, paragraphs "e" and
3 18 "j", purchased for use in the operation of the eligible
3 19 business, the purchase price of which has been depreciated in
3 20 accordance with generally accepted accounting principles, the
3 21 purchase price of real property and any buildings and
3 22 structures located on the real property, and the cost of
3 23 improvements made to real property which is used in the
3 24 operation of the eligible business. The percentage shall be
3 25 equal to the amount provided in paragraph "c". Any tax credit
3 26 in excess of the tax liability for the tax year may be
3 27 credited to the tax liability for the following seven years or
3 28 until depleted, whichever occurs first.
3 29 Subject to prior approval by the department of economic
3 30 development, in consultation with the department of revenue
3 31 and finance, an eligible business whose project primarily
3 32 involves the production of value-added agricultural products
3 33 or uses biotechnology-related processes may elect to receive a
3 34 refund of all or a portion of an unused tax credit. For
3 35 purposes of this subsection, such an eligible business
4 1 includes a cooperative described in section 521 of the
4 2 Internal Revenue Code which is not required to file an Iowa
4 3 corporate income tax return, and whose project primarily
4 4 involves the production of ethanol. The refund may be applied
4 5 against a tax liability imposed under chapter 422, division
4 6 II, III, or V. If the business is a partnership, subchapter S
4 7 corporation, limited liability company, cooperative organized
4 8 under chapter 501 and filing as a partnership for federal tax
4 9 purposes, or estate or trust electing to have the income taxed
4 10 directly to the individual, an individual may claim the tax
4 11 credit allowed. The amount claimed by the individual shall be
4 12 based upon the pro rata share of the individual's earnings of
4 13 the partnership, subchapter S corporation, limited liability
4 14 company, cooperative organized under chapter 501 and filing as
4 15 a partnership for federal tax purposes, or estate or trust.
4 16 b. (1) An eligible business whose project primarily
4 17 involves the production of value-added agricultural products
4 18 or uses biotechnology-related processes, which elects to
4 19 receive a refund of all or a portion of an unused tax credit,
4 20 shall apply to the department of economic development for tax
4 21 credit certificates. Such an eligible business shall not
4 22 claim a tax credit refund under this subsection unless a tax
4 23 credit certificate issued by the department of economic
4 24 development is attached to the taxpayer's tax return for the
4 25 tax year for which the tax credit refund is claimed. For
4 26 purposes of this subsection, an eligible business includes a
4 27 cooperative described in section 521 of the Internal Revenue
4 28 Code which is not required to file an Iowa corporate income
4 29 tax return, and whose project primarily involves the
4 30 production of ethanol. For purposes of this subsection, an
4 31 eligible business also includes a cooperative described in
4 32 section 521 of the Internal Revenue Code which is required to
4 33 file an Iowa corporate income tax return and whose project
4 34 primarily involves the production of ethanol. Such
4 35 cooperative may elect to transfer all or a portion of its tax
5 1 credit to its members. The amount of tax credit transferred
5 2 and claimed by a member shall be based upon the pro rata share
5 3 of the member's earnings of the cooperative.
5 4 (2) A tax credit certificate shall not be valid until the
5 5 tax year following the date of the capital investment project
5 6 completion. A tax credit certificate shall contain the
5 7 taxpayer's name, address, tax identification number, the date
5 8 of project completion, the amount of the tax credit, and other
5 9 information required by the department of revenue and finance.
5 10 The department of economic development shall not issue tax
5 11 credit certificates which total more than four million dollars
5 12 during a fiscal year. If the department receives applications
5 13 for tax credit certificates in excess of four million dollars,
5 14 the applicants shall receive certificates for a prorated
5 15 amount. The tax credit certificates shall not be transferred
5 16 except as provided in this subsection for a cooperative
5 17 described in section 521 of the Internal Revenue Code which is
5 18 required to file an Iowa corporate income tax return and whose
5 19 project primarily involves the production of ethanol. For a
5 20 cooperative described in section 521 of the Internal Revenue
5 21 Code, the department of economic development shall require
5 22 that the cooperative submit a list of its members and the
5 23 share of each member's interest in the cooperative. The
5 24 department shall issue a tax credit certificate to each member
5 25 contained on the submitted list.
5 26 c. The amount of a tax credit claimed under this
5 27 subsection shall be determined as follows:
5 28 (1) If the department determines, based on the application
5 29 of the eligible business, that no high-quality jobs are
5 30 created, the eligible business may claim a corporate tax
5 31 credit equal to one percent of the new investment.
5 32 (2) If the department determines, based on the application
5 33 of the eligible business, that one to five high-quality jobs
5 34 are created, the eligible business may claim a corporate tax
5 35 credit equal to two percent of the new investment.
6 1 (3) If the department determines, based on the application
6 2 of the eligible business, that six to ten high-quality jobs
6 3 are created, the eligible business may claim a corporate tax
6 4 credit equal to three percent of the new investment.
6 5 (4) If the department determines, based on the application
6 6 of the eligible business, that eleven to fifteen high-quality
6 7 jobs are created, the eligible business may claim a corporate
6 8 tax credit equal to four percent of the new investment.
6 9 (5) If the department determines, based on the application
6 10 of the eligible business, that more than fifteen high-quality
6 11 jobs are created, the eligible business may claim a corporate
6 12 tax credit equal to five percent of the new investment.
6 13 4. Insurance premium tax credit.
6 14 a. An eligible business may claim an insurance premium tax
6 15 credit equal to a percentage of the new investment directly
6 16 related to new jobs created by the location or expansion of an
6 17 eligible business under the program. The tax credit shall be
6 18 allowed against taxes imposed in chapter 432. For purposes of
6 19 this subsection, "new investment directly related to new jobs
6 20 created by the location or expansion of an eligible business
6 21 under the program" means the cost of machinery and equipment,
6 22 as defined in section 427A.1, subsection 1, paragraphs "e" and
6 23 "j", purchased for use in the operation of the eligible
6 24 business, the purchase price of which has been depreciated in
6 25 accordance with generally accepted accounting principles, the
6 26 purchase price of real property and any buildings and
6 27 structures located on the real property, and the cost of
6 28 improvements made to real property which is used in the
6 29 operation of the eligible business. The percentage shall be
6 30 equal to the amount provided in paragraph "b". Any tax credit
6 31 in excess of the tax liability for the tax year may be
6 32 credited to the tax liability for the following seven years or
6 33 until depleted, whichever occurs first.
6 34 b. The amount of the tax credit claimed under this
6 35 subsection shall be determined as follows:
7 1 (1) If the department determines, based on the application
7 2 of the eligible business, that no high-quality jobs are
7 3 created, the eligible business may claim an insurance premium
7 4 tax credit of up to one percent of the new investment.
7 5 (2) If the department determines, based on the application
7 6 of the eligible business, that one to five high-quality jobs
7 7 are created, the eligible business may claim an insurance
7 8 premium tax credit of up to two percent of the new investment.
7 9 (3) If the department determines, based on the application
7 10 of the eligible business, that six to ten high-quality jobs
7 11 are created, the eligible business may claim an insurance
7 12 premium tax credit of up to three percent of the new
7 13 investment.
7 14 (4) If the department determines, based on the application
7 15 of the eligible business, that eleven to fifteen high-quality
7 16 jobs are created, the eligible business may claim an insurance
7 17 premium tax credit of up to four percent of the new
7 18 investment.
7 19 (5) If the department determines, based on the application
7 20 of the eligible business, that more than fifteen high-quality
7 21 jobs are created, the eligible business may claim an insurance
7 22 premium tax credit of up to five percent of the new
7 23 investment.
7 24 Sec. 6. NEW SECTION. 15.386 AGREEMENT.
7 25 A business shall enter into an agreement with the
7 26 department specifying the requirements that must be met to
7 27 confirm eligibility pursuant to section 15.384. The
7 28 department shall consult with the community during
7 29 negotiations relating to the agreement. The agreement shall
7 30 contain, at a minimum, the following provisions:
7 31 1. A business that is approved to receive incentives
7 32 shall, for the length of the agreement, certify annually to
7 33 the community and the department the compliance of the
7 34 business with the requirements of the agreement.
7 35 2. The repayment of incentives by the business if the
8 1 business or group of businesses has not met any of the
8 2 requirements of this part or the resulting agreement.
8 3 3. If a business that is approved to receive incentives
8 4 under this part experiences a layoff within the state or
8 5 closes any of its facilities within the state, the department
8 6 shall have the discretion to reduce or eliminate some or all
8 7 of the incentives. If a business has received incentives
8 8 under this part and experiences a layoff within the state or
8 9 closes any of its facilities within the state, the business
8 10 may be subject to repayment of all or a portion of the
8 11 incentives that it has received.
8 12 Sec. 7. Section 15.337, Code 2003, is repealed.
8 13 EXPLANATION
8 14 This bill creates a new capital investment program and
8 15 amends the new jobs and income program.
8 16 The bill provides that to be eligible to receive incentives
8 17 under the new capital investment program, a business is
8 18 required to meet all of the following requirements:
8 19 1. The business has not closed or reduced its operation in
8 20 one area of the state and relocated substantially the same
8 21 operation in the community.
8 22 2. The business is not a retail business where entrance is
8 23 limited by a cover charge or membership requirement.
8 24 3. The business makes a capital investment of at least $1
8 25 million.
8 26 4. The business creates high-quality jobs due to the
8 27 capital investment.
8 28 5. The start-up, location, or expansion of the business
8 29 occurs within at least a period of three years.
8 30 6. The business provides the community and the department
8 31 with an affidavit stating that the business has not, within
8 32 the five years prior to the application date, violated state
8 33 or federal environmental or worker safety statutes, rules, or
8 34 regulations or, if such violation has occurred, that there
8 35 were mitigating circumstances or such violations did not
9 1 seriously affect public health or safety or the environment.
9 2 The bill also allows a community and the department to
9 3 consider a variety of factors in determining the eligibility
9 4 of a business to participate in the program. The factors
9 5 include the impact of the proposed project on the community
9 6 and the state; the impact the business will have on other
9 7 businesses in competition with it; the potential for future
9 8 growth in the industry represented by the business; the impact
9 9 the proposed new capital investment will have on the ability
9 10 of the business to expand, upgrade, or modernize its
9 11 capabilities, and the extent to which the new capital
9 12 investment will result in a more productive and competitive
9 13 business enterprise and workforce; and the proportion of the
9 14 local funding match to be provided.
9 15 The bill provides that if the community determines that a
9 16 business is eligible, the community shall approve by
9 17 resolution the application for incentives. The bill provides
9 18 that, once a business is found to be eligible, the community
9 19 shall submit the application to the department and the
9 20 department may approve, defer, or deny the application.
9 21 The bill requires a business to enter into an agreement
9 22 with the department specifying the requirements which must be
9 23 met to confirm eligibility under the program. The bill
9 24 requires the agreement to contain, at a minimum, provisions
9 25 relating to continued compliance, repayment of incentives due
9 26 to a failure to comply, and the reduction, elimination, or
9 27 repayment of incentives for reasons related to layoffs or the
9 28 closure of facilities.
9 29 The bill provides that an eligible business shall receive a
9 30 number of incentives: the sales, services, and use tax refund
9 31 available under the new jobs and income program and the
9 32 research activities credit available under the new jobs and
9 33 income program. The bill also allows an eligible business to
9 34 claim a corporate tax credit equal to a percentage of the new
9 35 investment which is directly related to new jobs created by
10 1 the location or expansion of an eligible business under the
10 2 program. The percentage ranges from 1 percent to 5 percent
10 3 based on the number of high-quality jobs that are created, as
10 4 determined by the department. The tax credits may be carried
10 5 forward for a period of seven years or until depleted,
10 6 whichever occurs first. The bill provides that, subject to
10 7 prior approval by the department of economic development, in
10 8 consultation with the department of revenue and finance, an
10 9 eligible business whose project primarily involves the
10 10 production of value-added agricultural products or uses
10 11 biotechnology-related processes may elect to receive a refund
10 12 of all or a portion of an unused tax credit. The bill
10 13 provides a certification method for claiming tax credit
10 14 refunds. The bill provides that the tax credit refund
10 15 certificates are not valid until the tax year following the
10 16 date of the capital investment completion. The bill limits
10 17 the department of economic development to issuing certificates
10 18 which total more than $4 million during a fiscal year.
10 19 The bill allows an eligible business to claim an insurance
10 20 premium tax credit equal to a percentage of the new investment
10 21 directly related to new jobs created by the location or
10 22 expansion of an eligible business under the program. The
10 23 percentage ranges from 1 percent to 5 percent based on the
10 24 number of high-quality jobs that are created, as determined by
10 25 the department. The tax credits may be carried forward for a
10 26 period of seven years or until depleted, whichever occurs
10 27 first.
10 28 The bill repeals a waiver of qualification requirement
10 29 provisions of the new jobs and income program.
10 30 LSB 2280HC 80
10 31 tm/sh/8.1
Text: HSB00178 Text: HSB00180 Text: HSB00100 - HSB00199 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
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