Text: SSB01070 Text: SSB01072 Text: SSB01000 - SSB01099 Text: SSB 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 1598XC 80 7 14 mg/pj/5
Text: SSB01070 Text: SSB01072 Text: SSB01000 - SSB01099 Text: SSB Index Bills and Amendments: General Index Bill History: General Index
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