House File 2233 - Enrolled

PAG LIN



  1  1                                         HOUSE FILE 2233
  1  2
  1  3                             AN ACT
  1  4 RELATING TO PROVIDING SALES, USE, AND PROPERTY TAX EXEMPTIONS
  1  5    FOR CERTAIN WEB SEARCH PORTAL BUSINESSES.
  1  6
  1  7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  1  8
  1  9    Section 1.  Section 423.3, Code Supplement 2007, is amended
  1 10 by adding the following new subsection:
  1 11    NEW SUBSECTION.  93.  a.  (1)  The sales price from the
  1 12 sale or rental of computers and equipment that are necessary
  1 13 for the maintenance and operation of a web search portal
  1 14 business and property whether directly or indirectly connected
  1 15 to the computers, including but not limited to cooling
  1 16 systems, cooling towers, and other temperature control
  1 17 infrastructure; power infrastructure for transformation,
  1 18 distribution, or management of electricity used for the
  1 19 maintenance and operation of the web search portal business,
  1 20 including but not limited to exterior dedicated business=owned
  1 21 substations, back=up power generation systems, battery
  1 22 systems, and related infrastructure; and racking systems,
  1 23 cabling, and trays, which are necessary for the maintenance
  1 24 and operation of the web search portal business.
  1 25    (2)  The sales price of back=up power generation fuel, that
  1 26 is purchased by a web search portal business for use in the
  1 27 items listed in subparagraph (1).
  1 28    (3)  The sales price of electricity purchased for use by a
  1 29 web search portal business.
  1 30    b.  For the purpose of claiming this exemption, all of the
  1 31 following requirements shall be met:
  1 32    (1)  The purchaser or renter shall be a web search portal
  1 33 business.
  1 34    (2)  The web search portal business shall have a physical
  1 35 location in the state that is used for the operations and
  2  1 maintenance of the web search portal business.
  2  2    (3)  The web search portal business shall make a minimum
  2  3 investment in an Iowa physical location of two hundred million
  2  4 dollars within the first six years of operation in Iowa
  2  5 beginning with the date the web search portal business
  2  6 initiates site preparation activities.  The minimum investment
  2  7 includes the initial investment, including land and subsequent
  2  8 acquisition of additional adjacent land and subsequent
  2  9 investment at the Iowa location.
  2 10    (4)  The web search portal business shall purchase, option,
  2 11 or lease Iowa land not later than December 31, 2008, for any
  2 12 initial investment.  However, the December 31, 2008, date
  2 13 shall not affect the future purchases of adjacent land and
  2 14 additional investment in the initial or adjacent land to
  2 15 qualify as part of the minimum investment for purposes of this
  2 16 exemption.
  2 17    c.  This exemption applies from the date of the initial
  2 18 investment in or the initiation of site preparation activities
  2 19 for the web search portal facility as described in paragraph
  2 20 "b".  For purposes of claiming this exemption, the
  2 21 requirements may be met by aggregating the various Iowa
  2 22 investments and other requirements of the web search portal
  2 23 business's affiliates.  This exemption applies to affiliates
  2 24 of the web search portal business.
  2 25    d.  Failure to meet eighty percent of the minimum
  2 26 investment amount requirement specified in paragraph "b"
  2 27 within the first six years of operation from the date the web
  2 28 search portal business initiates site preparation activities
  2 29 will result in the web search portal business losing the right
  2 30 to claim this web search portal business exemption and the web
  2 31 search portal business shall pay all sales or use tax that
  2 32 would have been due on the purchase or rental or use of the
  2 33 items listed in this exemption, plus any applicable penalty
  2 34 and interest imposed by statute.
  2 35    e.  For purposes of this subsection:
  3  1    (1)  "Affiliate" means an entity that directly or
  3  2 indirectly controls, is controlled with or by, or is under
  3  3 common control with another entity.
  3  4    (2)  "Control" means any of the following:
  3  5    (a)  In the case of a United States corporation, the
  3  6 ownership, directly or indirectly, of fifty percent or more of
  3  7 the voting power to elect directors.
  3  8    (b)  In the case of a foreign corporation, if the voting
  3  9 power to elect the directors is less than fifty percent, the
  3 10 maximum amount allowed by applicable law.
  3 11    (c)  In the case of an entity other than a corporation,
  3 12 fifty percent or more ownership interest in the entity, or the
  3 13 power to direct the management of the entity.
  3 14    (3)  "Web search portal business" means an entity whose
  3 15 business among other businesses is to provide a search portal
  3 16 to organize information; to access, search, and navigate the
  3 17 internet, including research and development to support
  3 18 capabilities to organize information; or to provide internet
  3 19 access, navigation, or search functionalities.
  3 20    Sec. 2.  Section 427.1, Code Supplement 2007, is amended by
  3 21 adding the following new subsection:
  3 22    NEW SUBSECTION.  36.  WEB SEARCH PROPERTY.
  3 23    a.  Property, other than land and buildings and other
  3 24 improvements, that is utilized by a web search portal business
  3 25 as defined in and meeting the requirements of section 423.3,
  3 26 subsection 93, including computers and equipment that are
  3 27 necessary for the maintenance and operation of a web search
  3 28 portal business and other property whether directly or
  3 29 indirectly connected to the computers, including but not
  3 30 limited to cooling systems, cooling towers, and other
  3 31 temperature control infrastructure; power infrastructure for
  3 32 transformation, distribution, or management of electricity,
  3 33 including but not limited to exterior dedicated business=owned
  3 34 substations, and power distribution systems which are not
  3 35 subject to assessment under chapter 437A; racking systems,
  4  1 cabling, and trays; and back=up power generation systems,
  4  2 battery systems, and related infrastructure all of which are
  4  3 necessary for the maintenance and operation of the web search
  4  4 portal business.
  4  5    b.  This web search portal business exemption applies
  4  6 beginning with the assessment year the investment in or
  4  7 construction of the facility utilizing the materials,
  4  8 equipment, and systems set forth in paragraph "a" are first
  4  9 assessed.  For purposes of claiming this web search portal
  4 10 business exemption, the requirements may be met by aggregating
  4 11 the various Iowa investments and other requirements of the web
  4 12 search portal business's affiliates as allowed under section
  4 13 423.3, subsection 93.  This exemption applies to affiliates of
  4 14 the web search portal business.
  4 15    Sec. 3.  IMPLEMENTATION.  Section 25B.7 does not apply to
  4 16 the property tax exemption enacted in this Act.
  4 17
  4 18
  4 19                                                             
  4 20                               PATRICK J. MURPHY
  4 21                               Speaker of the House
  4 22
  4 23
  4 24                                                             
  4 25                               JOHN P. KIBBIE
  4 26                               President of the Senate
  4 27
  4 28    I hereby certify that this bill originated in the House and
  4 29 is known as House File 2233, Eighty=second General Assembly.
  4 30
  4 31
  4 32                                                             
  4 33                               MARK BRANDSGARD
  4 34                               Chief Clerk of the House
  4 35 Approved                , 2008
  5  1
  5  2
  5  3                            
  5  4 CHESTER J. CULVER
  5  5 Governor