House File 615 S-3250 Amend House File 615, as amended, passed, and 1 reprinted by the House, as follows: 2 1. By striking everything after the enacting clause 3 and inserting: 4 < Section 1. Section 2.48, subsection 3, Code 2013, 5 is amended by adding the following new paragraph: 6 NEW PARAGRAPH . f. In 2017, the innovation fund 7 investment tax credit available under section 15E.52. 8 Sec. 2. Section 15E.52, subsection 3, Code 2013, is 9 amended to read as follows: 10 3. The amount of a tax credit allowed under this 11 section shall equal twenty twenty-five percent of the 12 taxpayer’s equity investment in an innovation fund. 13 Sec. 3. Section 15E.52, subsection 5, Code 2013, is 14 amended to read as follows: 15 5. a. To receive a tax credit, a taxpayer must 16 submit an application to the board. The board shall 17 issue certificates under this section on a first-come, 18 first-served basis, which certificates may be 19 redeemed for tax credits. The board shall issue such 20 certificates so that not more than the amount allocated 21 for such tax credits under section 15.119, subsection 22 2 , may be claimed. The certificates shall not be 23 transferable. The board shall not issue a certificate 24 before September 1, 2014. 25 b. If in a fiscal year the aggregate amount of tax 26 credits applied for exceeds the amount allocated for 27 that fiscal year under section 15.119, subsection 2, 28 the board shall establish a wait list for certificates. 29 Applications that were approved but for which 30 certificates were not issued shall be placed on the 31 wait list in the order the applications were received 32 by the board and shall be given priority for receiving 33 certificates in succeeding fiscal years. 34 c. The board shall not issue a certificate to a 35 taxpayer for an equity investment in an innovation fund 36 until such fund has been certified as an innovation 37 fund pursuant to subsection 7. 38 b. d. The board shall, in cooperation with 39 the department of revenue, establish criteria and 40 procedures for the allocation and issuance of tax 41 credits by means of certificates issued by the board. 42 The criteria shall include the contingencies that must 43 be met for a certificate to be redeemable in order 44 to receive a tax credit. The procedures established 45 by the board, in cooperation with the department 46 of revenue, shall relate to the procedures for the 47 issuance and transfer of the certificates and for the 48 redemption of a certificate and related tax credit. 49 e. A certificate and related tax credit issued 50 -1- HF615.2269 (2) 85 mm/sc 1/ 4 #1.

pursuant to this section shall be deemed a vested right 1 of the original holder or any transferee thereof, and 2 the state shall not cause either to be redeemed in such 3 a way that amends or rescinds the certificate or that 4 curtails, limits, or withdraws the related tax credit, 5 except as otherwise provided in this section or upon 6 consent of the proper holder. A certificate issued 7 pursuant to this section cannot pledge the credit of 8 the state and any such certificate so pledged to secure 9 the debt of the original holder or a transferee shall 10 not constitute a contract binding the state. 11 Sec. 4. Section 15E.52, subsection 6, Code 2013, is 12 amended to read as follows: 13 6. A taxpayer shall not redeem a certificate 14 and related tax credit prior to the third tax year 15 following the tax year in which the investment is 16 made. Any tax credit in excess of the taxpayer’s 17 liability for the tax year may be credited to the 18 tax liability for the following five years or until 19 depleted, whichever is earlier. A tax credit shall not 20 be carried back to a tax year prior to the tax year in 21 which the taxpayer claims the tax credit. 22 Sec. 5. Section 15E.52, subsection 7, Code 2013, is 23 amended by adding the following new paragraphs: 24 NEW PARAGRAPH . d. The fund proposes to provide 25 multiple rounds of funding and early-stage private 26 sector funding to innovative businesses with a high 27 growth potential, and proposes to focus such funding on 28 innovative businesses that show a potential to produce 29 commercially viable products or services within a 30 reasonable period of time. 31 NEW PARAGRAPH . e. The fund proposes to evaluate 32 all prospective innovative businesses using a rigorous 33 approach and proposes to collaborate and coordinate 34 with the authority and other state and local entities 35 in an effort to achieve policy consistency. 36 NEW PARAGRAPH . f. The fund proposes to collaborate 37 with the regents institutions of this state and to 38 leverage relationships with such institutions in order 39 to potentially commercialize research developed at 40 those institutions. 41 NEW PARAGRAPH . g. The fund proposes to obtain at 42 least fifteen million dollars in binding investment 43 commitments and to invest a minimum of fifteen million 44 dollars in companies that have a principal place of 45 business in the state. 46 Sec. 6. Section 15E.52, Code 2013, is amended by 47 adding the following new subsections: 48 NEW SUBSECTION . 8. The board shall not certify an 49 innovation fund after June 30, 2018. 50 -2- HF615.2269 (2) 85 mm/sc 2/ 4

NEW SUBSECTION . 9. An innovation fund shall 1 collect and provide to the board the information 2 required in subsection 10, paragraphs “e” and “f” , 3 in the manner and form prescribed by the board. An 4 innovation fund failing to comply with this subsection 5 may have its certification revoked by the board. 6 NEW SUBSECTION . 10. On or before January 31 7 of each year, the board, in cooperation with the 8 department of revenue, shall submit to the general 9 assembly and the governor a report describing the 10 activities of the innovation funds during the preceding 11 fiscal year. The report shall at a minimum include the 12 following information: 13 a. The amount of tax credit certificates issued to 14 equity investors in each innovation fund. 15 b. The amount of approved tax credit applications 16 that were placed on the wait list for certificates. 17 c. The amount of tax credits claimed. 18 d. The amount of tax credits transferred to other 19 persons. 20 e. The amount of investments in each innovation 21 fund. 22 f. For each investment by an innovation fund in a 23 business: 24 (1) The amount of the investment. 25 (2) The name and industry of the business. 26 (3) The location or locations from which the 27 business operates. 28 (4) The number of employees of the business located 29 in Iowa and the number of employees of the business 30 located outside Iowa on the date of the initial 31 investment by the innovation fund in the business. 32 (5) The number of employees of the business located 33 in Iowa and the number of employees of the business 34 located outside Iowa at the close of the fiscal year 35 which is the subject of the report. 36 NEW SUBSECTION . 11. Tax credit certificates issued 37 pursuant to this section may be transferred, in whole 38 or in part, to any person. A tax credit certificate 39 shall only be transferred once. Within ninety days of 40 transfer, the transferee shall submit the transferred 41 tax credit certificate to the department of revenue 42 along with a statement containing the transferee’s 43 name, tax identification number, and address, 44 the denomination that each replacement tax credit 45 certificate is to carry, and any other information 46 required by the department of revenue. 47 NEW SUBSECTION . 12. Within thirty days of 48 receiving the transferred tax credit certificate 49 and the transferee’s statement, the department of 50 -3- HF615.2269 (2) 85 mm/sc 3/ 4

revenue shall issue one or more replacement tax credit 1 certificates to the transferee. Each replacement 2 tax credit certificate must contain the information 3 required for the original tax credit certificate. A 4 replacement tax credit certificate may designate a 5 different tax than the tax designated on the original 6 tax credit certificate. A tax credit shall not be 7 claimed by a transferee under this section until a 8 replacement tax credit certificate identifying the 9 transferee as the proper holder has been issued. 10 NEW SUBSECTION . 13. The transferee may use the 11 amount of the tax credit transferred against the taxes 12 imposed in chapter 422, divisions II, III, and V, and 13 in chapter 432, and against the moneys and credits 14 tax imposed in section 533.329, for any tax year the 15 original transferor could have claimed the tax credit. 16 Any consideration received for the transfer of the tax 17 credit shall not be included as income under chapter 18 422, divisions II, III, and V. Any consideration 19 paid for the transfer of the tax credit shall not be 20 deducted from income under chapter 422, divisions II, 21 III, and V. 22 Sec. 7. EFFECTIVE UPON ENACTMENT. This Act, being 23 deemed of immediate importance, takes effect upon 24 enactment. 25 Sec. 8. RETROACTIVE APPLICABILITY. The sections of 26 this Act amending section 15E.52 apply retroactively to 27 January 1, 2013, for tax years beginning on or after 28 that date and for equity investments in an innovation 29 fund made on or after that date. > 30 2. Title page, by striking lines 2 and 3. 31 3. By renumbering, redesignating, and correcting 32 internal references as necessary. 33 ______________________________ COMMITTEE ON WAYS AND MEANS JOE BOLKCOM, CHAIRPERSON -4- HF615.2269 (2) 85 mm/sc 4/ 4 #2. #3.