House File 2355 H-8234 Amend the amendment, H-8225, to House File 2355, as follows: 1 1. By striking page 1, line 1, through page 5, line 29, and 2 inserting: 3 < Amend House File 2355 as follows: 4 1. By striking everything after the enacting clause and 5 inserting: 6 < DIVISION I 7 CHILD AND DEPENDENT CARE TAX CREDIT 8 Section 1. Section 422.12C, subsection 1, Code 2022, is 9 amended by striking the subsection and inserting in lieu 10 thereof the following: 11 1. The taxes imposed under this subchapter, less the amounts 12 of nonrefundable credits allowed under this subchapter, shall 13 be reduced by a child and dependent care credit equal to the 14 following percentages of the federal child and dependent care 15 credit provided in section 21 of the Internal Revenue Code, 16 without regard to whether or not the federal credit was limited 17 by the taxpayer’s federal tax liability: 18 a. For a taxpayer with net income of forty-five thousand 19 dollars or less, one hundred percent. 20 b. For a taxpayer with net income exceeding forty-five 21 thousand dollars but not exceeding fifty thousand dollars, 22 eighty-eight percent. 23 c. For a taxpayer with net income exceeding fifty thousand 24 dollars but not exceeding sixty thousand dollars, seventy-five 25 percent. 26 d. For a taxpayer with net income exceeding sixty thousand 27 dollars but not exceeding seventy thousand dollars, sixty-three 28 percent. 29 e. For a taxpayer with net income exceeding seventy thousand 30 dollars but not exceeding eighty thousand dollars, fifty 31 percent. 32 f. For a taxpayer with net income exceeding eighty thousand 33 dollars but not exceeding ninety thousand dollars, thirty-eight 34 percent. 35 -1- H 8225.3985 (6) 89 dg/rn 1/ 9 #1.

g. For a taxpayer with net income exceeding ninety thousand 1 dollars but not exceeding one hundred thousand dollars, 2 twenty-five percent. 3 h. For a taxpayer with net income exceeding one hundred 4 thousand dollars but not exceeding one hundred twenty-five 5 thousand dollars, thirteen percent. 6 i. For a taxpayer with net income exceeding one hundred 7 twenty-five thousand dollars but not exceeding one hundred 8 fifty thousand dollars, ten percent. 9 j. For a taxpayer with net income exceeding one hundred 10 fifty thousand dollars but not exceeding one hundred 11 seventy-five thousand dollars, five percent. 12 k. For a taxpayer with net income exceeding one hundred 13 seventy-five thousand dollars but not exceeding two hundred 14 thousand dollars, three percent. 15 l. For a taxpayer with net income exceeding two hundred 16 thousand dollars but not exceeding two hundred fifty thousand 17 dollars, two percent. 18 m. For a taxpayer with net income exceeding two hundred 19 fifty thousand dollars, zero percent. 20 DIVISION II 21 CHILD CARE CENTER AND CHILD CARE HOME GRANTS 22 Sec. 2. NEW SECTION . 237D.1 Definitions. 23 As used in this chapter, unless the context otherwise 24 requires: 25 1. “Child” means the same as defined in section 237A.1. 26 2. “Child care” means the same as defined in section 237A.1. 27 3. “Child development home” means the same as defined in 28 section 237A.1. 29 4. “Department” means the department of human services. 30 5. “Facility” means the same as defined in section 237A.1. 31 6. “Fund” means the child care center and child development 32 home grant fund. 33 7. “Home” means a child development home. 34 8. “Licensed child care center” or “center” means a facility 35 -2- H 8225.3985 (6) 89 dg/rn 2/ 9

providing child care or preschool services for seven or more 1 children that has been issued a license by the department 2 pursuant to section 237A.2. 3 9. “Program” means the child care center and child 4 development home grant program. 5 Sec. 3. NEW SECTION . 237D.2 Child care center and child 6 development home grant fund. 7 1. A child care center and child development home grant fund 8 is created and established as a separate and distinct fund in 9 the state treasury under the control of the department. 10 2. a. The fund may consist of any moneys appropriated by 11 the general assembly for purposes of this chapter and any other 12 moneys that are lawfully available to the department. Moneys 13 in the fund are appropriated to the department and shall be 14 used for the purposes of this chapter. 15 b. Notwithstanding section 8.33, moneys in the fund 16 that remain unencumbered or unobligated at the close of the 17 fiscal year shall not revert but shall remain available for 18 expenditure for the purposes of this section in succeeding 19 fiscal years. Notwithstanding section 12C.7, subsection 2, 20 interest earned on moneys in the fund shall be credited to the 21 fund. 22 Sec. 4. NEW SECTION . 237D.3 Child care center and child 23 development home grant program. 24 1. The department shall adopt rules to establish and 25 administer a child care center and child development home 26 grant program to provide for the allocation of money in the 27 fund in the form of grants, not to exceed fifty thousand 28 dollars per grant, to eligible persons for costs related to 29 the establishment of a new licensed child care center or 30 a new child development home, or for the expansion of an 31 existing licensed child care center or the expansion of an 32 existing child development home. For any one fiscal year, the 33 department shall not approve more than four million dollars 34 in grants. The rules adopted by the department shall specify 35 -3- H 8225.3985 (6) 89 dg/rn 3/ 9

the eligibility requirements for applicants of the program and 1 the items eligible for a program grant. Items eligible for a 2 program grant must include the costs related to licensing or 3 registration, supplies, employee salaries, and infrastructure. 4 2. A new center or a new home must be licensed or registered 5 and fully operational within two years of the date of an 6 applicant’s receipt of a grant. 7 3. Of the children for whom a new or expanded center or a 8 new or expanded home provide child care, a minimum of twenty 9 percent of the children must be from a family that qualifies 10 for state child care assistance pursuant to section 237A.13. 11 4. A person that is awarded a grant shall enter into an 12 agreement with the department that specifies the requirements 13 that must be maintained throughout the period of the agreement 14 in order for the person to retain the grant. The agreement 15 must contain, at a minimum, provisions addressing all of the 16 following: 17 a. The legal name of the person receiving the grant. 18 b. The amount of the grant. 19 c. Annual certification by the person to the department of 20 compliance with the requirements of the agreement, the program, 21 and this chapter. 22 d. The repayment of the grant, or a portion of the grant, 23 if the person does not meet all of the requirements of the 24 agreement, the program, and this chapter. 25 e. If a new center or a new home for which the grant was 26 received goes out of business within two years of the date the 27 new center or new home becomes fully operational pursuant to 28 subsection 2, the grant shall be subject to repayment. If an 29 expanded center or an expanded home for which the grant was 30 received goes out of business within two years of the date on 31 which the grant was received, the grant shall be subject to 32 repayment. 33 DIVISION III 34 SMALL BUSINESS CHILD CARE TAX CREDIT 35 -4- H 8225.3985 (6) 89 dg/rn 4/ 9

Sec. 5. NEW SECTION . 237A.31 Small business child care tax 1 credit. 2 1. As used in this section “small business” means any 3 enterprise which is located in this state, which is operated 4 for profit and under a single management, and which has either 5 fewer than twenty employees or an annual gross income of less 6 than four million dollars computed as the average of the three 7 preceding fiscal years. This definition does not apply to any 8 program or activity for which a definition for small business 9 is provided for the program or activity by federal law or 10 regulation or other state law. 11 2. A small business may receive a child care tax credit 12 for providing child care employee benefits to employees of the 13 business. The credit may be applied against income tax imposed 14 under chapter 422, subchapter II or III, the franchise tax 15 imposed under chapter 422, subchapter V, the gross premiums 16 tax imposed under chapter 432, or the moneys and credits tax 17 imposed in section 533.329. The amount of the credit equals 18 the costs to provide the benefit up to three thousand dollars 19 per employee per year. 20 3. The aggregate amount of tax credits authorized pursuant 21 to this section shall not exceed a total of two million 22 dollars per fiscal year, and shall be awarded on a first-come, 23 first-served basis. 24 4. To be eligible for a small business child care tax 25 credit, the small business must provide child care employee 26 benefits to employees of the business through any of the 27 following: 28 a. Build a new structure or rehabilitate an existing 29 structure to be used as a child care center at or near the small 30 business where the children of the employees of the business 31 are provided child care. A small business may construct or 32 rehabilitate the structure in conjunction with another business 33 but only the actual cost of the business shall be considered in 34 determining the credit. 35 -5- H 8225.3985 (6) 89 dg/rn 5/ 9

b. Operate or lease a child care center at or near the small 1 business where the children of the employees of the business 2 are provided child care. 3 5. Any credit in excess of the tax liability is not 4 refundable but the excess for the tax year may be credited 5 to the tax liability for the following five years or until 6 depleted, whichever is earlier. The director of revenue shall 7 adopt rules to implement this section. 8 Sec. 6. NEW SECTION . 422.12O Small business child care tax 9 credit. 10 1. The taxes imposed under this subchapter, less the credits 11 allowed under section 422.12, shall be reduced by a small 12 business child care tax credit received pursuant to section 13 237A.31. 14 2. An individual may claim the tax credit allowed a 15 partnership, S corporation, limited liability company, estate, 16 or trust electing to have the income taxed directly to the 17 individual. The amount claimed by the individual shall be 18 based upon the pro rata share of the individual’s earnings of a 19 partnership, S corporation, limited liability company, estate, 20 or trust. 21 Sec. 7. Section 422.33, Code 2022, is amended by adding the 22 following new subsection: 23 NEW SUBSECTION . 32. The taxes imposed under this subchapter 24 shall be reduced by a small business child care tax credit 25 received pursuant to section 237A.31. 26 Sec. 8. Section 422.60, Code 2022, is amended by adding the 27 following new subsection: 28 NEW SUBSECTION . 15. The taxes imposed under this subchapter 29 shall be reduced by a small business child care tax credit 30 received pursuant to section 237A.31. 31 Sec. 9. NEW SECTION . 432.12O Small business child care tax 32 credit. 33 The taxes imposed under this chapter shall be reduced by 34 a small business child care tax credit received pursuant to 35 -6- H 8225.3985 (6) 89 dg/rn 6/ 9

section 237A.31. 1 Sec. 10. Section 533.329, subsection 2, Code 2022, is 2 amended by adding the following new paragraph: 3 NEW PARAGRAPH . m. The moneys and credits tax imposed under 4 this section shall be reduced by a small business child care 5 tax credit received pursuant to section 237A.31. 6 Sec. 11. APPLICABILITY. This division of this Act applies 7 to tax years beginning on or after January 1, 2023. 8 DIVISION IV 9 STATE CHILD CARE ASSISTANCE 10 Sec. 12. Section 237A.13, subsection 7, paragraph c, Code 11 2022, is amended to read as follows: 12 c. Families with an income of more than one hundred 13 percent but not more than one two hundred forty-five percent 14 of the federal poverty level whose members, for at least 15 twenty-eight hours per week in the aggregate, are employed 16 or are participating at a satisfactory level in an approved 17 training program or educational program. 18 Sec. 13. DIRECTIVE TO DEPARTMENT OF HUMAN SERVICES —— CHILD 19 CARE ASSISTANCE. 20 1. The department of human services shall amend its 21 administrative rules pursuant to chapter 17A to do all of the 22 following: 23 a. Provide income eligibility for state child care 24 assistance, according to family size for children needing basic 25 care, to families whose nonexempt gross monthly income does not 26 exceed two hundred percent of the federal poverty level. 27 b. Adjust the state child care assistance copayment 28 schedule in incrementally increased amounts for families whose 29 nonexempt gross monthly income does not exceed two hundred 30 percent of the federal poverty level. 31 2. The rules adopted pursuant to this section shall take 32 effect January 1, 2023. 33 DIVISION V 34 ECONOMIC DEVELOPMENT LEGISLATIVE FINDINGS 35 -7- H 8225.3985 (6) 89 dg/rn 7/ 9

Sec. 14. Section 96.2, Code 2022, is amended to read as 1 follows: 2 96.2 Guide for interpretation. 3 1. As a guide to the interpretation and application of 4 this chapter , the public policy of this state is declared to 5 be as follows: Economic insecurity due to unemployment is 6 a serious menace to the health, morals, and welfare of the 7 people of this state. Involuntary unemployment is therefore 8 a subject of general interest and concern which requires 9 appropriate action by the legislature to prevent its spread 10 and to lighten its burden which now so often falls with 11 crushing force upon the unemployed worker and the worker’s 12 family. The achievement of social security requires protection 13 against this greatest hazard of our economic life. This can 14 be provided by encouraging employers to provide more stable 15 employment and by the systematic accumulation of funds during 16 periods of employment to provide benefits for periods of 17 unemployment, thus maintaining purchasing power and limiting 18 the serious social consequences of poor relief assistance. 19 The legislature, therefore, declares that in its considered 20 judgment the public good and the general welfare of the 21 citizens of this state require the enactment of this measure, 22 under the police powers of the state, for the compulsory 23 setting aside of unemployment reserves to be used for the 24 benefit of persons unemployed through no fault of their own. 25 2. It is the finding of the legislature that true economic 26 development can only be achieved when workers are given the 27 respect they deserve. Economic development must include all 28 residents of this state, including men and women, people of all 29 gender identities, minorities, and immigrants. The legislature 30 further finds that economic development should include but not 31 be limited to residents of this state being paid a living wage, 32 this state being a welcoming place for immigrants, child care 33 and housing being readily affordable and available, and public 34 workers having collective bargaining rights. > 35 -8- H 8225.3985 (6) 89 dg/rn 8/ 9