House File 2595 H-8098 Amend House File 2595 as follows: 1 1. By striking everything after the enacting clause and 2 inserting: 3 < DIVISION I 4 Section 1. Section 422.12C, subsection 1, Code 2020, is 5 amended by striking the subsection and inserting in lieu 6 thereof the following: 7 1. The taxes imposed under this division, less the amounts 8 of nonrefundable credits allowed under this division, shall 9 be reduced by a child and dependent care credit equal to the 10 following percentages of the federal child and dependent care 11 credit provided in section 21 of the Internal Revenue Code, 12 without regard to whether or not the federal credit was limited 13 by the taxpayer’s federal tax liability: 14 a. For a taxpayer with net income of less than forty-five 15 thousand dollars, one hundred percent. 16 b. For a taxpayer with net income of forty-five thousand 17 dollars or more but less than ninety thousand dollars, thirty 18 percent. 19 c. For a taxpayer with net income of ninety thousand dollars 20 or more but less than one hundred thousand dollars, twenty-five 21 percent. 22 d. For a taxpayer with net income of one hundred thousand 23 dollars or more but less than one hundred twenty-five thousand 24 dollars, twenty percent. 25 e. For a taxpayer with net income of one hundred twenty-five 26 thousand dollars or more but less than one hundred fifty 27 thousand dollars, fifteen percent. 28 f. For a taxpayer with net income of one hundred fifty 29 thousand dollars or more but less than one hundred seventy-five 30 thousand dollars, ten percent. 31 g. For a taxpayer with net income of one hundred 32 seventy-five thousand dollars or more but less than two hundred 33 fifty thousand dollars, five percent. 34 h. For a taxpayer with net income of two hundred fifty 35 -1- HF2595.3494 (2) 88 jm/jh 1/ 7 #1.
thousand dollars or more, zero percent. 1 Sec. 2. RETROACTIVE APPLICABILITY. This division of this 2 Act applies retroactively to January 1, 2020 for tax years 3 beginning on or after that date. 4 DIVISION II 5 Sec. 3. NEW SECTION . 237D.1 Definitions. 6 As used in this chapter, unless the context otherwise 7 requires: 8 1. “Child” means the same as defined in section 237A.1. 9 2. “Child care” means the same as defined in section 237A.1. 10 3. “Child development home” means the same as defined in 11 section 237A.1. 12 4. “Department” means the department of human services. 13 5. “Facility” means the same as defined in section 237A.1. 14 6. “Fund” means the child care center and child development 15 home grant fund. 16 7. “Home” means a child development home. 17 8. “Licensed child care center” or “center” means a facility 18 providing child care or preschool services for seven or more 19 children that has been issued a license by the department 20 pursuant to section 237A.2. 21 9. “Program” means the child care center and child 22 development home grant program. 23 Sec. 4. NEW SECTION . 237D.2 Child care center and child 24 development home grant fund. 25 1. A child care center and child development home grant fund 26 is created and established as a separate and distinct fund in 27 the state treasury under the control of the department. 28 2. a. The fund may consist of any moneys appropriated by 29 the general assembly for purposes of this chapter and any other 30 moneys that are lawfully available to the department. Moneys 31 in the fund are appropriated to the department and shall be 32 used for the purposes of this chapter. 33 b. Notwithstanding section 8.33, moneys in the fund 34 that remain unencumbered or unobligated at the close of the 35 -2- HF2595.3494 (2) 88 jm/jh 2/ 7
fiscal year shall not revert but shall remain available for 1 expenditure for the purposes of this section in succeeding 2 fiscal years. Notwithstanding section 12C.7, subsection 2, 3 interest earned on moneys in the fund shall be credited to the 4 fund. 5 Sec. 5. NEW SECTION . 237D.3 Child care center and child 6 development home grant program. 7 1. The department shall adopt rules to establish and 8 administer a child care center and child development home 9 grant program to provide for the allocation of money in the 10 fund in the form of grants, not to exceed fifty thousand 11 dollars per grant, to eligible persons for costs related to 12 the establishment of a new licensed child care center or 13 a new child development home, or for the expansion of an 14 existing licensed child care center or the expansion of an 15 existing child development home. For any one fiscal year, the 16 department shall not approve more than four million dollars 17 in grants. The rules adopted by the department shall specify 18 the eligibility requirements for applicants of the program and 19 the items eligible for a program grant. Items eligible for a 20 program grant must include the costs related to licensing or 21 registration, supplies, and infrastructure. 22 2. A new center or a new home must be licensed or registered 23 and fully operational within two years of the date of an 24 applicant’s receipt of a grant. 25 3. Of the children for whom a new or expanded center or a 26 new or expanded home provide child care, a minimum of twenty 27 percent of the children must be from a family that qualifies 28 for state child care assistance pursuant to section 237A.13. 29 4. A person that is awarded a grant shall enter into an 30 agreement with the department that specifies the requirements 31 that must be maintained throughout the period of the agreement 32 in order for the person to retain the grant. The agreement 33 must contain, at a minimum, provisions addressing all of the 34 following: 35 -3- HF2595.3494 (2) 88 jm/jh 3/ 7
a. The legal name of the person receiving the grant. 1 b. The amount of the grant. 2 c. Annual certification by the person to the department of 3 compliance with the requirements of the agreement, the program, 4 and this chapter. 5 d. The repayment of the grant, or a portion of the grant, 6 if the person does not meet all of the requirements of the 7 agreement, the program, and this chapter. 8 e. If a new center or a new home for which the grant was 9 received goes out of business within two years of the date the 10 new center or new home becomes fully operational pursuant to 11 subsection 2, the grant shall be subject to repayment. If an 12 expanded center or an expanded home for which the grant was 13 received goes out of business within two years of the date on 14 which the grant was received, the grant shall be subject to 15 repayment. 16 DIVISION III 17 Sec. 6. NEW SECTION . 237A.31 Small business child care tax 18 credit. 19 1. As used in this section “small business” means any 20 enterprise which is located in this state, which is operated 21 for profit and under a single management, and which has either 22 fewer than twenty employees or an annual gross income of less 23 than four million dollars computed as the average of the three 24 preceding fiscal years. This definition does not apply to any 25 program or activity for which a definition for small business 26 is provided for the program or activity by federal law or 27 regulation or other state law. 28 2. A small business may receive a child care tax credit 29 for providing child care employee benefits to employees of 30 the business. The credit may be applied against income tax 31 imposed under chapter 422, division II or III, the franchise 32 tax imposed under chapter 422, division V, the gross premiums 33 tax imposed under chapter 432, or the moneys and credits tax 34 imposed in section 533.329. The amount of the credit equals 35 -4- HF2595.3494 (2) 88 jm/jh 4/ 7
the costs to provide the benefit up to three thousand dollars 1 per employee per year. 2 3. The aggregate amount of tax credits authorized pursuant 3 to this section shall not exceed a total of two million 4 dollars per fiscal year, and shall be awarded on a first-come, 5 first-served basis. 6 4. To be eligible for a small business child care tax 7 credit, the small business must provide child care employee 8 benefits to employees of the business through any of the 9 following: 10 a. Build a new structure or rehabilitate an existing 11 structure to be used as a child care center at or near the small 12 business where the children of the employees of the business 13 are provided child care. A small business may construct or 14 rehabilitate the structure in conjunction with another business 15 but only the actual cost of the business shall be considered in 16 determining the credit. 17 b. Operate or lease a child care center at or near the small 18 business where the children of the employees of the business 19 are provided child care. 20 5. Any credit in excess of the tax liability is not 21 refundable but the excess for the tax year may be credited 22 to the tax liability for the following five years or until 23 depleted, whichever is earlier. The director of revenue shall 24 adopt rules to implement this section. 25 Sec. 7. NEW SECTION . 422.12O Small business child care tax 26 credit. 27 1. The taxes imposed under this division, less the credits 28 allowed under section 422.12, shall be reduced by a small 29 business child care tax credit received pursuant to section 30 237A.31. 31 2. An individual may claim the tax credit allowed a 32 partnership, S corporation, limited liability company, estate, 33 or trust electing to have the income taxed directly to the 34 individual. The amount claimed by the individual shall be 35 -5- HF2595.3494 (2) 88 jm/jh 5/ 7
based upon the pro rata share of the individual’s earnings of a 1 partnership, S corporation, limited liability company, estate, 2 or trust. 3 Sec. 8. Section 422.33, Code 2020, is amended by adding the 4 following new subsection: 5 NEW SUBSECTION . 31. The taxes imposed under this division 6 shall be reduced by a small business child care tax credit 7 received pursuant to section 237A.31. 8 Sec. 9. Section 422.60, Code 2020, is amended by adding the 9 following new subsection: 10 NEW SUBSECTION . 14. The taxes imposed under this division 11 shall be reduced by a small business child care tax credit 12 received pursuant to section 237A.31. 13 Sec. 10. NEW SECTION . 432.12N Small business child care 14 tax credit. 15 The taxes imposed under this chapter shall be reduced by 16 a small business child care tax credit received pursuant to 17 section 237A.31. 18 Sec. 11. Section 533.329, subsection 2, Code 2020, is 19 amended by adding the following new paragraph: 20 NEW PARAGRAPH . l. The moneys and credits tax imposed under 21 this section shall be reduced by a small business child care 22 tax credit received pursuant to section 237A.31. 23 Sec. 12. APPLICABILITY. This division of this Act applies 24 to tax years beginning on or after January 1, 2021. 25 DIVISION IV 26 Sec. 13. Section 237A.13, subsection 7, paragraph c, Code 27 2020, is amended to read as follows: 28 c. Families with an income of more than one hundred 29 percent but not more than one two hundred forty-five percent 30 of the federal poverty level whose members, for at least 31 twenty-eight hours per week in the aggregate, are employed 32 or are participating at a satisfactory level in an approved 33 training program or educational program. 34 Sec. 14. DIRECTIVE TO DEPARTMENT OF HUMAN SERVICES —— CHILD 35 -6- HF2595.3494 (2) 88 jm/jh 6/ 7
CARE ASSISTANCE. 1 1. The department of human services shall amend its 2 administrative rules pursuant to chapter 17A to do all of the 3 following: 4 a. Provide income eligibility for state child care 5 assistance, according to family size for children needing basic 6 care, to families whose nonexempt gross monthly income does not 7 exceed two hundred percent of the federal poverty level. 8 b. Adjust the state child care assistance copayment 9 schedule in incrementally increased amounts for families whose 10 nonexempt gross monthly income does not exceed two hundred 11 percent of the federal poverty level. 12 2. The rules adopted pursuant to this section shall take 13 effect January 1, 2021. > 14 2. Title page, by striking lines 1 through 5 and inserting 15 < An Act relating to child care, grants and tax credits relating 16 to child care, state child care assistance, and including 17 applicability and retroactive applicability provisions. > 18 ______________________________ JAMES of Dubuque -7- HF2595.3494 (2) 88 jm/jh 7/ 7 #2.