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PAG LIN 1 1 SENATE FILE 2290 1 2 1 3 AN ACT 1 4 RELATING TO ECONOMIC DEVELOPMENT INCENTIVES UNDER THE NEW JOBS 1 5 AND INCOME PROGRAM, THE NEW CAPITAL INVESTMENT PROGRAM, AND 1 6 THE ENTERPRISE ZONE PROGRAM AND PROVIDING AN EFFECTIVE DATE. 1 7 1 8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 1 9 1 10 Section 1. Section 15.330, subsection 1, unnumbered 1 11 paragraph 1, Code 2003, is amended to read as follows: 1 12 If the business or group of businesses has not met more 1 13 than ninety percent of the job creation requirement in section 1 14 15.329, subsection 1, paragraph "f", it shall pay a percentage 1 15 of theincentiveincentives receivedunder section 15.334, or1 16if the business or group of businesses does not receive the1 17incentive under section 15.334, then under section 15.333as 1 18 follows: 1 19 Sec. 2. Section 15.331A, unnumbered paragraph 1, Code 1 20 Supplement 2003, is amended to read as follows: 1 21 The eligible business or a supporting business shall be 1 22 entitled to a refund of the taxes paid under chapters 422 and 1 23 423 for gas, electricity, water, or sewer utility services, 1 24 goods, wares, or merchandise, or on services rendered, 1 25 furnished, or performed to or for a contractor or 1 26 subcontractor and used in the fulfillment of a written 1 27 contract relating to the construction or equipping of a 1 28 facility within the economic development area of the eligible 1 29 business or a supporting business. Taxes attributable to 1 30 intangible property and furniture and furnishings shall not be 1 31 refunded. However, an eligible business shall be entitled to 1 32 a refund for taxes attributable to racks, shelving, and 1 33 conveyor equipment to be used in a warehouse or distribution 1 34 center subject to section 15.331C. 1 35 Sec. 3. NEW SECTION. 15.331C CORPORATE TAX CREDIT – FOR 2 1 CERTAIN SALES TAXES PAID BY DEVELOPER. 2 2 1. An eligible business or a supporting business may claim 2 3 a corporate tax credit in an amount equal to the taxes paid by 2 4 a third-party developer under chapters 422 and 423 for gas, 2 5 electricity, water, or sewer utility services, goods, wares, 2 6 or merchandise, or on services rendered, furnished, or 2 7 performed to or for a contractor or subcontractor and used in 2 8 the fulfillment of a written contract relating to the 2 9 construction or equipping of a facility with the economic 2 10 development area of the eligible business or supporting 2 11 business. Taxes attributable to intangible property and 2 12 furniture and furnishings shall not be included, but taxes 2 13 attributable to racks, shelving, and conveyor equipment to be 2 14 used in a warehouse or distribution center shall be included. 2 15 Any credit in excess of the tax liability for the tax year may 2 16 be credited to the tax liability for the following seven years 2 17 or until depleted, whichever occurs earlier. An eligible 2 18 business may elect to receive a refund of all or a portion of 2 19 an unused tax credit. 2 20 2. A third-party developer shall state under oath, on 2 21 forms provided by the department of economic development, the 2 22 amount of taxes paid as described in subsection 1 and shall 2 23 submit such forms to the department. The taxes paid shall be 2 24 itemized to allow identification of the taxes attributable to 2 25 racks, shelving, and conveyor equipment to be used in a 2 26 warehouse or distribution center. After receiving the form 2 27 from the third-party developer, the department shall issue a 2 28 tax credit certificate to the eligible business or supporting 2 29 business equal to the taxes paid by a third-party developer 2 30 under chapters 422 and 423 for gas, electricity, water, or 2 31 sewer utility services, goods, wares, or merchandise, or on 2 32 services rendered, furnished, or performed to or for a 2 33 contractor or subcontractor and used in the fulfillment of a 2 34 written contract relating to the construction or equipping of 2 35 a facility. The department shall also issue a tax credit 3 1 certificate to the eligible business or supporting business 3 2 equal to the taxes paid and attributable to racks, shelving, 3 3 and conveyor equipment to be used in a warehouse or 3 4 distribution center. The aggregate combined total amount of 3 5 tax refunds under section 15.331A for taxes attributable to 3 6 racks, shelving, and conveyor equipment to be used in a 3 7 warehouse or distribution center and of tax credit 3 8 certificates issued by the department for the taxes paid and 3 9 attributable to racks, shelving, and conveyor equipment to be 3 10 used in a warehouse or distribution center shall not exceed 3 11 five hundred thousand dollars in a fiscal year. If an 3 12 applicant for a tax credit certificate does not receive a 3 13 certificate for the taxes paid and attributable to racks, 3 14 shelving, and conveyor equipment to be used in a warehouse or 3 15 distribution center, the application shall be considered in 3 16 succeeding fiscal years. The eligible business or supporting 3 17 business shall not claim a tax credit under this section 3 18 unless a tax credit certificate issued by the department of 3 19 economic development is attached to the taxpayer's tax return 3 20 for the tax year for which the tax credit is claimed. A tax 3 21 credit certificate shall contain the eligible business's or 3 22 supporting business's name, address, tax identification 3 23 number, the amount of the tax credit, and other information 3 24 required by the department of revenue. 3 25 Sec. 4. Section 15.333, subsection 1, Code Supplement 3 26 2003, is amended to read as follows: 3 27 1. An eligible business may claim a corporate tax credit 3 28 up to a maximum of ten percent of the new investment which is 3 29 directly related to new jobs created by the location or 3 30 expansion of an eligible business under the program. Any 3 31 credit in excess of the tax liability for the tax year may be 3 32 credited to the tax liability for the following seven years or 3 33 until depleted, whichever occurs earlier. Subject to prior 3 34 approval by the department of economic development in 3 35 consultation with the department of revenue, an eligible 4 1 business whose project primarily involves the production of 4 2 value-added agricultural products may elect to receive a 4 3 refund of all or a portion of an unused tax credit. For 4 4 purposes of this section, an eligible business includes a 4 5 cooperative described in section 521 of the Internal Revenue 4 6 Code which is not required to file an Iowa corporate income 4 7 tax return. The refund may be used against a tax liability 4 8 imposed under chapter 422, division II, III, or V. If the 4 9 business is a partnership, S corporation, limited liability 4 10 company, cooperative organized under chapter 501 and filing as 4 11 a partnership for federal tax purposes, or estate or trust 4 12 electing to have the income taxed directly to the individual, 4 13 an individual may claim the tax credit allowed. The amount 4 14 claimed by the individual shall be based upon the pro rata 4 15 share of the individual's earnings of the partnership, S 4 16 corporation, limited liability company, cooperative organized 4 17 under chapter 501 and filing as a partnership for federal tax 4 18 purposes, or estate or trust. 4 19 1A. For purposes of this section, "new investment directly 4 20 related to new jobs created by the location or expansion of an 4 21 eligible business under the program" meanstheany of the 4 22 following: 4 23 a. The cost of machinery and equipment, as defined in 4 24 section 427A.1, subsection 1, paragraphs "e" and "j", 4 25 purchased for use in the operation of the eligible business, 4 26 the purchase price of which has been depreciated in accordance 4 27 with generally accepted accounting principles, and the cost of 4 28 improvements made to real property which is used in the 4 29 operation of the eligible business. 4 30 b. The annual base rent paid to a third-party developer by 4 31 an eligible business for a period not to exceed ten years, 4 32 provided the cumulative cost of the base rent payments for 4 33 that period does not exceed the cost of the land and the 4 34 third-party developer's costs to build or renovate the 4 35 building for the eligible business. The eligible business 5 1 shall enter into a lease agreement with the third-party 5 2 developer for a minimum of ten years. 5 3 Sec. 5. Section 15.333A, subsection 1, Code 2003, is 5 4 amended to read as follows: 5 5 1. An eligible business may claim an insurance premium tax 5 6 credit up to a maximum of ten percent of the new investment 5 7 directly related to new jobs created by the location or 5 8 expansion of an eligible business under the program. Any 5 9 credit in excess of the tax liability for the tax year may be 5 10 credited to the tax liability for the following seven years or 5 11 until depleted, whichever occurs earlier. 5 12For purposes of this section, "new investment directly5 13related to new jobs created by the location or expansion of an5 14eligible business under the program" means the cost of5 15machinery and equipment, as defined in section 427A.1,5 16subsection 1, paragraphs "e" and "j", purchased for use in the5 17operation of the eligible business, the purchase price of5 18which has been depreciated in accordance with generally5 19accepted accounting principles, and the cost of improvements5 20made to real property which is used in the operation of the5 21eligible business.5 22 For purposes of this section, the purchase price of real 5 23 property and any buildings and structures located on the real 5 24 property is considered a new investment in the location or 5 25 expansion of an eligible business. However, if within five 5 26 years of purchase, the eligible business sells, disposes of, 5 27 razes, or otherwise renders unusable all or a part of the 5 28 land, buildings, or other existing structures for which an 5 29 insurance premium tax credit was claimed under this section, 5 30 the insurance premium tax liability of the eligible business 5 31 for the year in which all or part of the property is sold, 5 32 disposed of, razed, or otherwise rendered unusable shall be 5 33 increased by one of the following amounts: 5 34 a. One hundred percent of the tax credit claimed under 5 35 this section if the property ceases to be eligible for the tax 6 1 credit within one year after being placed in service. 6 2 b. Eighty percent of the tax credit claimed under this 6 3 section if the property ceases to be eligible for the tax 6 4 credit within two years after being placed in service. 6 5 c. Sixty percent of the tax credit claimed under this 6 6 section if the property ceases to be eligible for the tax 6 7 credit within three years after being placed in service. 6 8 d. Forty percent of the tax credit claimed under this 6 9 section if the property ceases to be eligible for the tax 6 10 credit within four years after being placed in service. 6 11 e. Twenty percent of the tax credit claimed under this 6 12 section if the property ceases to be eligible for the tax 6 13 credit within five years after being placed in service. 6 14 1A. For purposes of this section, "new investment directly 6 15 related to new jobs created by the location or expansion of an 6 16 eligible business under the program" means any of the 6 17 following: 6 18 a. The cost of machinery and equipment, as defined in 6 19 section 427A.1, subsection 1, paragraphs "e" and "j", 6 20 purchased for use in the operation of the eligible business, 6 21 the purchase price of which has been depreciated in accordance 6 22 with generally accepted accounting principles, and the cost of 6 23 improvements made to real property which is used in the 6 24 operation of the eligible business. 6 25 b. The annual base rent paid to a third-party developer by 6 26 an eligible business for a period not to exceed ten years, 6 27 provided the cumulative cost of the base rent payments for 6 28 that period does not exceed the cost of the land and the 6 29 third-party developer's costs to build or renovate the 6 30 building for the eligible business. The eligible business 6 31 shall enter into a lease agreement with the third-party 6 32 developer for a minimum of ten years. 6 33 Sec. 6. Section 15.385, Code Supplement 2003, is amended 6 34 by adding the following new subsection: 6 35 NEW SUBSECTION. 1A. Corporate tax credit for certain 7 1 sales taxes paid by a developer, as provided in section 7 2 15.331C. 7 3 Sec. 7. Section 15.385, subsection 3, paragraph b, Code 7 4 Supplement 2003, is amended to read as follows: 7 5 b. For purposes of this subsection, "new investment 7 6 directly related to new jobs created by the location or 7 7 expansion of an eligible business under the program" means the 7 8 cost of machinery and equipment, as defined in section 427A.1, 7 9 subsection 1, paragraphs "e" and "j", purchased for use in the 7 10 operation of the eligible business, the purchase price of 7 11 which has been depreciated in accordance with generally 7 12 accepted accounting principles, the purchase price of real 7 13 property and any buildings and structures located on the real 7 14 property, and the cost of improvements made to real property 7 15 which is used in the operation of the eligible business. "New 7 16 investment directly related to new jobs created by the 7 17 location or expansion of an eligible business under the 7 18 program" also means the annual base rent paid to a third-party 7 19 developer by an eligible business for a period not to exceed 7 20 ten years, provided the cumulative cost of the base rent 7 21 payments for that period does not exceed the cost of the land 7 22 and the third-party developer's costs to build or renovate the 7 23 building for the eligible business. The eligible business 7 24 shall enter into a lease agreement with the third-party 7 25 developer for a minimum of five years. If, however, within 7 26 five years of purchase, the eligible business sells, disposes 7 27 of, razes, or otherwise renders unusable all or a part of the 7 28 land, buildings, or other existing structures for which tax 7 29 credit was claimed under this section, the income tax 7 30 liability of the eligible business for the year in which all 7 31 or part of the property is sold, disposed of, razed, or 7 32 otherwise rendered unusable shall be increased by one of the 7 33 following amounts: 7 34 (1) One hundred percent of the tax credit claimed under 7 35 this subsection if the property ceases to be eligible for the 8 1 tax credit within one full year after being placed in service. 8 2 (2) Eighty percent of the tax credit claimed under this 8 3 subsection if the property ceases to be eligible for the tax 8 4 credit within two full years after being placed in service. 8 5 (3) Sixty percent of the tax credit claimed under this 8 6 subsection if the property ceases to be eligible for the tax 8 7 credit within three full years after being placed in service. 8 8 (4) Forty percent of the tax credit claimed under this 8 9 subsection if the property ceases to be eligible for the tax 8 10 credit within four full years after being placed in service. 8 11 (5) Twenty percent of the tax credit claimed under this 8 12 subsection if the property ceases to be eligible for the tax 8 13 credit within five full years after being placed in service. 8 14 Sec. 8. Section 15.385, subsection 4, paragraph b, Code 8 15 Supplement 2003, is amended to read as follows: 8 16 b. For purposes of this subsection, "new investment 8 17 directly related to new jobs created by the location or 8 18 expansion of an eligible business under the program" means the 8 19 cost of machinery and equipment, as defined in section 427A.1, 8 20 subsection 1, paragraphs "e" and "j", purchased for use in the 8 21 operation of the eligible business, the purchase price of 8 22 which has been depreciated in accordance with generally 8 23 accepted accounting principles, the purchase price of real 8 24 property and any buildings and structures located on the real 8 25 property, and the cost of improvements made to real property 8 26 which is used in the operation of the eligible business. "New 8 27 investment directly related to new jobs created by the 8 28 location or expansion of an eligible business under the 8 29 program" also means the annual base rent paid to a third-party 8 30 developer by an eligible business for a period not to exceed 8 31 ten years, provided the cumulative cost of the base rent 8 32 payments for that period does not exceed the cost of the land 8 33 and the third-party developer's costs to build or renovate the 8 34 building for the eligible business. The eligible business 8 35 shall enter into a lease agreement with the third-party 9 1 developer for a minimum of five years. If, however, within 9 2 five years of purchase, the eligible business sells, disposes 9 3 of, razes, or otherwise renders unusable all or a part of the 9 4 land, buildings, or other existing structures for which tax 9 5 credit was claimed under this section, the income tax 9 6 liability of the eligible business for the year in which all 9 7 or part of the property is sold, disposed of, razed, or 9 8 otherwise rendered unusable shall be increased by one of the 9 9 following amounts: 9 10 (1) One hundred percent of the tax credit claimed under 9 11 this subsection if the property ceases to be eligible for the 9 12 tax credit within one full year after being placed in service. 9 13 (2) Eighty percent of the tax credit claimed under this 9 14 subsection if the property ceases to be eligible for the tax 9 15 credit within two full years after being placed in service. 9 16 (3) Sixty percent of the tax credit claimed under this 9 17 subsection if the property ceases to be eligible for the tax 9 18 credit within three full years after being placed in service. 9 19 (4) Forty percent of the tax credit claimed under this 9 20 subsection if the property ceases to be eligible for the tax 9 21 credit within four full years after being placed in service. 9 22 (5) Twenty percent of the tax credit claimed under this 9 23 subsection if the property ceases to be eligible for the tax 9 24 credit within five full years after being placed in service. 9 25 Sec. 9. Section 15E.195, Code 2003, is amended to read as 9 26 follows: 9 27 15E.195 ENTERPRISE ZONE COMMISSION. 9 28 1. A county which designates an enterprise zone pursuant 9 29 to section 15E.194, subsection 1, and in which an eligible 9 30 enterprise zone is certified shall establish an enterprise 9 31 zone commission to review applications from qualified 9 32 businesses located within or requesting to locate within an 9 33 enterprise zone designated pursuant to section 15E.194, 9 34 subsection 1, to receive incentives or assistance as provided 9 35 in section 15E.196. The enterprise zone commission shall also 10 1 review applications from qualified housing businesses 10 2 requesting to receive incentives or assistance as provided in 10 3 section 15E.193B.The enterprise zone commission shall also10 4review applications from qualified development businesses10 5requesting to receive incentives or assistance as provided in10 6section 15E.193C.The commission shall consist of nine 10 7 members. Five of these members shall consist of one 10 8 representative of the board of supervisors, one member with 10 9 economic development expertise chosen by the department of 10 10 economic development, one representative of the county zoning 10 11 board, one member of the local community college board of 10 12 directors, and one representative of the local workforce 10 13 development center. These five members shall select the 10 14 remaining four members. If the enterprise zone consists of an 10 15 area meeting the requirements for eligibility for an urban or 10 16 rural enterprise community under Title XIII of the federal 10 17 Omnibus Budget Reconciliation Act of 1993, one of the 10 18 remaining four members shall be a representative of that 10 19 community. A county shall have only one enterprise zone 10 20 commission to review applications for incentives and 10 21 assistance for businesses located within or requesting to 10 22 locate within a certified enterprise zone designated pursuant 10 23 to section 15E.194, subsection 1. 10 24 2. A city with a population of twenty-four thousand or 10 25 more which designates an enterprise zone pursuant to section 10 26 15E.194, subsection 2, and in which an eligible enterprise 10 27 zone is certified shall establish an enterprise zone 10 28 commission to review applications from qualified businesses 10 29 located within or requesting to locate within an enterprise 10 30 zone to receive incentives or assistance as provided in 10 31 section 15E.196. The enterprise zone commission shall review 10 32 applications from qualified housing businesses requesting to 10 33 receive incentives or assistance as provided in section 10 34 15E.193B.The enterprise zone commission shall also review10 35applications from qualified development businesses requesting11 1to receive incentives or assistance as provided in section11 215E.193C.The commission shall consist of nine members. Six 11 3 of these members shall consist of one representative of an 11 4 international labor organization, one member with economic 11 5 development expertise chosen by the department of economic 11 6 development, one representative of the city council, one 11 7 member of the local community college board of directors, one 11 8 member of the city planning and zoning commission, and one 11 9 representative of the local workforce development center. 11 10 These six members shall select the remaining three members. 11 11 If the enterprise zone consists of an area meeting the 11 12 requirements for eligibility for an urban enterprise community 11 13 under Title XIII of the federal Omnibus Budget Reconciliation 11 14 Act of 1993, one of the remaining three members shall be a 11 15 representative of that community. If a city contiguous to the 11 16 city designating the enterprise zone is included in an 11 17 enterprise zone, a representative of the contiguous city, 11 18 chosen by the city council, shall be a member of the 11 19 commission. A city in which an eligible enterprise zone is 11 20 certified shall have only one enterprise zone commission. If 11 21 a city has established an enterprise zone commission prior to 11 22 July 1, 1998, the city may petition to the department of 11 23 economic development to change the structure of the existing 11 24 commission. 11 25 3. The commission may adopt more stringent requirements, 11 26 including requirements related to compensation and benefits, 11 27 for a business to be eligible for incentives or assistance 11 28 than provided in sections 15E.193,and 15E.193B, and 15E.193C. 11 29 The commission may develop as an additional requirement that 11 30 preference in hiring be given to individuals who live within 11 31 the enterprise zone. The commission shall work with the local 11 32 workforce development center to determine the labor 11 33 availability in the area. The commission shall examine and 11 34 evaluate building codes and zoning in the enterprise zone and 11 35 make recommendations to the appropriate governing body in an 12 1 effort to promote more affordable housing development. 12 2 4. If the enterprise zone commission determines that a 12 3 business qualifies and is eligible to receive incentives or 12 4 assistance as provided in section 15E.193B, 15E.193C,or 12 5 15E.196, the commission shall submit an application for 12 6 incentives or assistance to the department of economic 12 7 development. The department may approve, defer, or deny the 12 8 application. 12 9 5. In making its decision, the commission or department 12 10 shall consider the impact of the eligible business on other 12 11 businesses in competition with it and compare the compensation 12 12 package of businesses in competition with the business being 12 13 considered for incentives or assistance. The commission or 12 14 department shall make a good faith effort to identify existing 12 15 Iowa businesses within an industry in competition with the 12 16 business being considered for incentives or assistance. The 12 17 commission or department shall also make a good faith effort 12 18 to determine the probability that the proposed incentives or 12 19 assistance will displace employees of existing businesses. In 12 20 determining the impact on businesses in competition with the 12 21 business seeking incentives or assistance, jobs created as a 12 22 result of other jobs being displaced elsewhere in the state 12 23 shall not be considered direct jobs created. 12 24 However, if the commission or department finds that an 12 25 eligible business has a record of violations of the law, 12 26 including but not limited to environmental and worker safety 12 27 statutes, rules, and regulations, over a period of time that 12 28 tends to show a consistent pattern, the eligible business 12 29 shall not qualify for incentives or assistance under section 12 30 15E.193B, 15E.193C,or 15E.196, unless the commission or 12 31 department finds that the violations did not seriously affect 12 32 public health or safety or the environment, or if it did that 12 33 there were mitigating circumstances. In making the findings 12 34 and determinations regarding violations, mitigating 12 35 circumstances, and whether an eligible business is eligible 13 1 for incentives or assistance under section 15E.193B, 15E.193C,13 2 or 15E.196, the commission or department shall be exempt from 13 3 chapter 17A. If requested by the commission or department, 13 4 the business shall provide copies of materials documenting the 13 5 type of violation, any fees or penalties assessed, court 13 6 filings, final disposition of any findings, and any other 13 7 information which would assist the commission or department in 13 8 assessing the nature of any violation. 13 9 6. A business that is approved to receive incentives or 13 10 assistance shall, for the length of its designation as an 13 11 enterprise zone business, certify annually to the county or 13 12 city, as applicable, and the department of economic 13 13 development its compliance with the requirements of section 13 14 15E.193,or 15E.193B, or 15E.193C. 13 15 Sec. 10. Section 15E.196, subsection 7, Code Supplement 13 16 2003, is amended by striking the subsection. 13 17 Sec. 11. Section 15E.193C, Code Supplement 2003, is 13 18 repealed. 13 19 Sec. 12. EFFECTIVE DATE. This Act, being deemed of 13 20 immediate importance, takes effect upon enactment. 13 21 13 22 13 23 13 24 JEFFREY M. LAMBERTI 13 25 President of the Senate 13 26 13 27 13 28 13 29 CHRISTOPHER C. RANTS 13 30 Speaker of the House 13 31 13 32 I hereby certify that this bill originated in the Senate and 13 33 is known as Senate File 2290, Eightieth General Assembly. 13 34 13 35 14 1 14 2 MICHAEL E. MARSHALL 14 3 Secretary of the Senate 14 4 Approved , 2004 14 5 14 6 14 7 14 8 THOMAS J. VILSACK 14 9 Governor
Text: SF02289 Text: SF02291 Text: SF02200 - SF02299 Text: SF Index Bills and Amendments: General Index Bill History: General Index
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