House File 2594 H-8099 Amend House File 2594 as follows: 1 1. Page 1, before line 1 by inserting: 2 < DIVISION I > 3 2. Page 2, line 27, before < Act > by inserting < division of 4 this > 5 3. Page 2, after line 28 by inserting: 6 < DIVISION II 7 Sec. ___. Section 422.12C, subsection 1, Code 2020, is 8 amended by striking the subsection and inserting in lieu 9 thereof the following: 10 1. The taxes imposed under this division, less the amounts 11 of nonrefundable credits allowed under this division, shall 12 be reduced by a child and dependent care credit equal to the 13 following percentages of the federal child and dependent care 14 credit provided in section 21 of the Internal Revenue Code, 15 without regard to whether or not the federal credit was limited 16 by the taxpayer’s federal tax liability: 17 a. For a taxpayer with net income of less than forty-five 18 thousand dollars, one hundred percent. 19 b. For a taxpayer with net income of forty-five thousand 20 dollars or more but less than ninety thousand dollars, thirty 21 percent. 22 c. For a taxpayer with net income of ninety thousand dollars 23 or more but less than one hundred thousand dollars, twenty-five 24 percent. 25 d. For a taxpayer with net income of one hundred thousand 26 dollars or more but less than one hundred twenty-five thousand 27 dollars, twenty percent. 28 e. For a taxpayer with net income of one hundred twenty-five 29 thousand dollars or more but less than one hundred fifty 30 thousand dollars, fifteen percent. 31 f. For a taxpayer with net income of one hundred fifty 32 thousand dollars or more but less than one hundred seventy-five 33 thousand dollars, ten percent. 34 g. For a taxpayer with net income of one hundred 35 -1- HF2594.3521 (2) 88 jm/jh 1/ 7 #1. #2. #3.
seventy-five thousand dollars or more but less than two hundred 1 fifty thousand dollars, five percent. 2 h. For a taxpayer with net income of two hundred fifty 3 thousand dollars or more, zero percent. 4 Sec. ___. RETROACTIVE APPLICABILITY. This division of this 5 Act applies retroactively to January 1, 2020 for tax years 6 beginning on or after that date. 7 DIVISION III 8 Sec. ___. NEW SECTION . 237D.1 Definitions. 9 As used in this chapter, unless the context otherwise 10 requires: 11 1. “Child” means the same as defined in section 237A.1. 12 2. “Child care” means the same as defined in section 237A.1. 13 3. “Child development home” means the same as defined in 14 section 237A.1. 15 4. “Department” means the department of human services. 16 5. “Facility” means the same as defined in section 237A.1. 17 6. “Fund” means the child care center and child development 18 home grant fund. 19 7. “Home” means a child development home. 20 8. “Licensed child care center” or “center” means a facility 21 providing child care or preschool services for seven or more 22 children that has been issued a license by the department 23 pursuant to section 237A.2. 24 9. “Program” means the child care center and child 25 development home grant program. 26 Sec. ___. NEW SECTION . 237D.2 Child care center and child 27 development home grant fund. 28 1. A child care center and child development home grant fund 29 is created and established as a separate and distinct fund in 30 the state treasury under the control of the department. 31 2. a. The fund may consist of any moneys appropriated by 32 the general assembly for purposes of this chapter and any other 33 moneys that are lawfully available to the department. Moneys 34 in the fund are appropriated to the department and shall be 35 -2- HF2594.3521 (2) 88 jm/jh 2/ 7
used for the purposes of this chapter. 1 b. Notwithstanding section 8.33, moneys in the fund 2 that remain unencumbered or unobligated at the close of the 3 fiscal year shall not revert but shall remain available for 4 expenditure for the purposes of this section in succeeding 5 fiscal years. Notwithstanding section 12C.7, subsection 2, 6 interest earned on moneys in the fund shall be credited to the 7 fund. 8 Sec. ___. NEW SECTION . 237D.3 Child care center and child 9 development home grant program. 10 1. The department shall adopt rules to establish and 11 administer a child care center and child development home 12 grant program to provide for the allocation of money in the 13 fund in the form of grants, not to exceed fifty thousand 14 dollars per grant, to eligible persons for costs related to 15 the establishment of a new licensed child care center or 16 a new child development home, or for the expansion of an 17 existing licensed child care center or the expansion of an 18 existing child development home. For any one fiscal year, the 19 department shall not approve more than four million dollars 20 in grants. The rules adopted by the department shall specify 21 the eligibility requirements for applicants of the program and 22 the items eligible for a program grant. Items eligible for a 23 program grant must include the costs related to licensing or 24 registration, supplies, and infrastructure. 25 2. A new center or a new home must be licensed or registered 26 and fully operational within two years of the date of an 27 applicant’s receipt of a grant. 28 3. Of the children for whom a new or expanded center or a 29 new or expanded home provide child care, a minimum of twenty 30 percent of the children must be from a family that qualifies 31 for state child care assistance pursuant to section 237A.13. 32 4. A person that is awarded a grant shall enter into an 33 agreement with the department that specifies the requirements 34 that must be maintained throughout the period of the agreement 35 -3- HF2594.3521 (2) 88 jm/jh 3/ 7
in order for the person to retain the grant. The agreement 1 must contain, at a minimum, provisions addressing all of the 2 following: 3 a. The legal name of the person receiving the grant. 4 b. The amount of the grant. 5 c. Annual certification by the person to the department of 6 compliance with the requirements of the agreement, the program, 7 and this chapter. 8 d. The repayment of the grant, or a portion of the grant, 9 if the person does not meet all of the requirements of the 10 agreement, the program, and this chapter. 11 e. If a new center or a new home for which the grant was 12 received goes out of business within two years of the date the 13 new center or new home becomes fully operational pursuant to 14 subsection 2, the grant shall be subject to repayment. If an 15 expanded center or an expanded home for which the grant was 16 received goes out of business within two years of the date on 17 which the grant was received, the grant shall be subject to 18 repayment. 19 DIVISION IV 20 Sec. ___. NEW SECTION . 237A.31 Small business child care 21 tax credit. 22 1. As used in this section “small business” means any 23 enterprise which is located in this state, which is operated 24 for profit and under a single management, and which has either 25 fewer than twenty employees or an annual gross income of less 26 than four million dollars computed as the average of the three 27 preceding fiscal years. This definition does not apply to any 28 program or activity for which a definition for small business 29 is provided for the program or activity by federal law or 30 regulation or other state law. 31 2. A small business may receive a child care tax credit 32 for providing child care employee benefits to employees of 33 the business. The credit may be applied against income tax 34 imposed under chapter 422, division II or III, the franchise 35 -4- HF2594.3521 (2) 88 jm/jh 4/ 7
tax imposed under chapter 422, division V, the gross premiums 1 tax imposed under chapter 432, or the moneys and credits tax 2 imposed in section 533.329. The amount of the credit equals 3 the costs to provide the benefit up to three thousand dollars 4 per employee per year. 5 3. The aggregate amount of tax credits authorized pursuant 6 to this section shall not exceed a total of two million 7 dollars per fiscal year, and shall be awarded on a first-come, 8 first-served basis. 9 4. To be eligible for a small business child care tax 10 credit, the small business must provide child care employee 11 benefits to employees of the business through any of the 12 following: 13 a. Build a new structure or rehabilitate an existing 14 structure to be used as a child care center at or near the small 15 business where the children of the employees of the business 16 are provided child care. A small business may construct or 17 rehabilitate the structure in conjunction with another business 18 but only the actual cost of the business shall be considered in 19 determining the credit. 20 b. Operate or lease a child care center at or near the small 21 business where the children of the employees of the business 22 are provided child care. 23 5. Any credit in excess of the tax liability is not 24 refundable but the excess for the tax year may be credited 25 to the tax liability for the following five years or until 26 depleted, whichever is earlier. The director of revenue shall 27 adopt rules to implement this section. 28 Sec. ___. NEW SECTION . 422.12P Small business child care 29 tax credit. 30 1. The taxes imposed under this division, less the credits 31 allowed under section 422.12, shall be reduced by a small 32 business child care tax credit received pursuant to section 33 237A.31. 34 2. An individual may claim the tax credit allowed a 35 -5- HF2594.3521 (2) 88 jm/jh 5/ 7
partnership, S corporation, limited liability company, estate, 1 or trust electing to have the income taxed directly to the 2 individual. The amount claimed by the individual shall be 3 based upon the pro rata share of the individual’s earnings of a 4 partnership, S corporation, limited liability company, estate, 5 or trust. 6 Sec. ___. Section 422.33, Code 2020, is amended by adding 7 the following new subsection: 8 NEW SUBSECTION . 31. The taxes imposed under this division 9 shall be reduced by a small business child care tax credit 10 received pursuant to section 237A.31. 11 Sec. ___. Section 422.60, Code 2020, is amended by adding 12 the following new subsection: 13 NEW SUBSECTION . 14. The taxes imposed under this division 14 shall be reduced by a small business child care tax credit 15 received pursuant to section 237A.31. 16 Sec. ___. NEW SECTION . 432.12N Small business child care 17 tax credit. 18 The taxes imposed under this chapter shall be reduced by 19 a small business child care tax credit received pursuant to 20 section 237A.31. 21 Sec. ___. Section 533.329, subsection 2, Code 2020, is 22 amended by adding the following new paragraph: 23 NEW PARAGRAPH . l. The moneys and credits tax imposed under 24 this section shall be reduced by a small business child care 25 tax credit received pursuant to section 237A.31. 26 Sec. ___. APPLICABILITY. This division of this Act applies 27 to tax years beginning on or after January 1, 2021. 28 DIVISION V 29 Sec. ___. Section 237A.13, subsection 7, paragraph c, Code 30 2020, is amended to read as follows: 31 c. Families with an income of more than one hundred 32 percent but not more than one two hundred forty-five percent 33 of the federal poverty level whose members, for at least 34 twenty-eight hours per week in the aggregate, are employed 35 -6- HF2594.3521 (2) 88 jm/jh 6/ 7
or are participating at a satisfactory level in an approved 1 training program or educational program. 2 Sec. ___. DIRECTIVE TO DEPARTMENT OF HUMAN SERVICES —— CHILD 3 CARE ASSISTANCE. 4 1. The department of human services shall amend its 5 administrative rules pursuant to chapter 17A to do all of the 6 following: 7 a. Provide income eligibility for state child care 8 assistance, according to family size for children needing basic 9 care, to families whose nonexempt gross monthly income does not 10 exceed two hundred percent of the federal poverty level. 11 b. Adjust the state child care assistance copayment 12 schedule in incrementally increased amounts for families whose 13 nonexempt gross monthly income does not exceed two hundred 14 percent of the federal poverty level. 15 2. The rules adopted pursuant to this section shall take 16 effect January 1, 2021. > 17 4. Title page, by striking lines 1 through 4 and inserting 18 < An Act relating to child care, grants and tax credits relating 19 to child care, state child care assistance, and including 20 applicability and retroactive applicability provisions. > 21 ______________________________ JAMES of Dubuque -7- HF2594.3521 (2) 88 jm/jh 7/ 7 #4.