House File 2443 S-5146 Amend House File 2443, as amended, passed, and 1 reprinted by the House, as follows: 2 1. By striking page 12, line 31, through page 13, 3 line 29, and inserting: 4 < (2) If an eligible taxpayer obtains a tax credit 5 certificate from the department authority by way of 6 a prohibited activity, the eligible taxpayer and any 7 transferee shall be jointly and severally liable to 8 the state for the amount of the tax credits so issued, 9 interest and penalties allowed under chapter 422 , 10 and reasonable attorney fees and litigation costs, 11 except that the liability of the transferee shall not 12 exceed an amount equal to the amount of the tax credits 13 acquired by the transferee. The department of revenue, 14 upon notification or discovery that a tax credit 15 certificate was issued to an eligible taxpayer by way 16 of a prohibited activity, shall revoke any outstanding 17 tax credit and seek repayment of the value of any tax 18 credit already claimed, and the failure to make such a 19 repayment may be treated by the department of revenue 20 in the same manner as a failure to pay the tax shown 21 due or required to be shown due with the filing of a 22 return or deposit form. A qualifying transferee is not 23 subject to the liability, revocation, and repayment 24 imposed under this subparagraph. 25 Sec. ___. Section 404A.3, subsection 4, paragraph 26 c, subparagraph (3), Code 2016, is amended by adding 27 the following new subparagraph division: 28 NEW SUBPARAGRAPH DIVISION . (0a) “Control” means 29 when a person, directly or indirectly or acting through 30 or together with one or more persons, satisfies any of 31 the following: 32 (i) Owns, controls, or has the power to vote fifty 33 percent or more of any class of voting securities or 34 voting membership interests of another person. 35 -1- HF2443.3573 (3) 86 aw/sc 1/ 3 #1.

(ii) Controls, in any manner, the election of a 1 majority of the directors, managers, trustees, or other 2 persons exercising similar functions of another person. 3 (iii) Has the power to exercise a controlling 4 influence over the management or policies of another 5 person. 6 Sec. ___. Section 404A.3, subsection 4, paragraph 7 c, subparagraph (3), subparagraph division (b), 8 unnumbered paragraph 1, Code 2016, is amended to read 9 as follows: 10 “Qualifying transferee” means a transferee who 11 acquires a tax credit certificate issued under this 12 chapter for value, in good faith, without actual 13 express or constructive implied notice of a prohibited 14 activity of the eligible taxpayer who was originally 15 issued the tax credit, and without actual express or 16 constructive implied notice of any other claim to or 17 defense against the tax credit, and which transferee is 18 not associated with the eligible taxpayer by being one 19 or more of the following: 20 Sec. ___. Section 404A.3, subsection 4, paragraph 21 c, subparagraph (3), subparagraph division (b), 22 subparagraph subdivision (i), Code 2016, is amended to 23 read as follows: 24 (i) An owner, member, shareholder, or partner of 25 the eligible taxpayer who directly or indirectly owns 26 or and controls, in whole or in part, the eligible 27 taxpayer. > 28 2. By striking page 15, line 22, through page 16, 29 line 8. 30 3. Page 17, after line 12 by inserting: 31 < Sec. ___. TRANSITION PROVISIONS. The department 32 of cultural affairs shall cooperate with the economic 33 development authority to ensure the effective 34 transition of powers, duties, and funds from the 35 -2- HF2443.3573 (3) 86 aw/sc 2/ 3 #2. #3.

department to the authority in implementing this 1 division of this Act. 2 Sec. ___. EFFECTIVE DATE. This division of this 3 Act takes effect August 15, 2016. > 4 4. Page 17, line 16, by striking < July 1, > and 5 inserting < August 15, > 6 5. By renumbering as necessary. 7 ______________________________ COMMITTEE ON WAYS AND MEANS JOE BOLKCOM, CHAIRPERSON -3- HF2443.3573 (3) 86 aw/sc 3/ 3 #4. #5.