House File 912 - Enrolled

PAG LIN



  1  1                                             HOUSE FILE 912
  1  2
  1  3                             AN ACT
  1  4 RELATING TO PROVIDING SALES, USE, AND PROPERTY TAX EXEMPTIONS
  1  5    AND REFUNDS FOR CERTAIN COMPUTER-RELATED SERVICE
  1  6    BUSINESSES.
  1  7
  1  8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  1  9
  1 10    Section 1.  Section 423.3, Code 2007, is amended by adding
  1 11 the following new subsection:
  1 12    NEW SUBSECTION.  92.  a.  (1)  The sales price from the
  1 13 sale or rental of computers and equipment that are necessary
  1 14 for the maintenance and operation of a web search portal and
  1 15 property whether directly or indirectly connected to the
  1 16 computers, including but not limited to cooling systems,
  1 17 cooling towers, and other temperature control infrastructure;
  1 18 power infrastructure for transformation, distribution, or
  1 19 management of electricity used for the maintenance and
  1 20 operation of the web search portal, including but not limited
  1 21 to exterior dedicated business=owned substations, back=up
  1 22 power generation systems, battery systems, and related
  1 23 infrastructure; and racking systems, cabling, and trays, which
  1 24 are necessary for the maintenance and operation of the web
  1 25 search portal.
  1 26    (2)  The sales price of back=up power generation fuel, that
  1 27 is purchased by a web search portal business for use in the
  1 28 items listed in subparagraph (1).
  1 29    (3)  The sales price of electricity purchased for use in
  1 30 providing a web search portal.
  1 31    b.  For the purpose of claiming this exemption, all of the
  1 32 following requirements shall be met:
  1 33    (1)  The business of the purchaser or renter shall be as a
  1 34 provider of a web search portal.
  1 35    (2)  The web search portal business shall have a physical
  2  1 location in the state that is used for the operations and
  2  2 maintenance of the web search portal site on the internet
  2  3 including but not limited to research and development to
  2  4 support capabilities to organize information and to provide
  2  5 internet access, navigation, and search.
  2  6    (3)  The web search portal business shall make a minimum
  2  7 investment in an Iowa physical location of two hundred million
  2  8 dollars within the first six years of operation in Iowa
  2  9 beginning with the date the web search portal business
  2 10 initiates site preparation activities.  The minimum investment
  2 11 includes the initial investment, including land and subsequent
  2 12 acquisition of additional adjacent land and subsequent
  2 13 investment at the Iowa location.
  2 14    (4)  The web search portal business shall purchase, option,
  2 15 or lease Iowa land not later than December 31, 2008, for any
  2 16 initial investment.  However, the December 31, 2008, date
  2 17 shall not affect the future purchases of adjacent land and
  2 18 additional investment in the initial or adjacent land to
  2 19 qualify as part of the minimum investment for purposes of this
  2 20 exemption.
  2 21    c.  This exemption applies from the date of the initial
  2 22 investment in or the initiation of site preparation activities
  2 23 for the web search portal facility as described in paragraph
  2 24 "b".  For purposes of claiming this exemption, the
  2 25 requirements may be met by aggregating the various Iowa
  2 26 investments and other requirements of the web search portal
  2 27 business's affiliates.  This exemption applies to affiliates
  2 28 of the web search portal business.
  2 29    d.  Failure to meet eighty percent of the minimum
  2 30 investment amount requirement specified in paragraph "b"
  2 31 within the first six years of operation from the date the web
  2 32 search portal business initiates site preparation activities
  2 33 will result in the web search portal business losing the right
  2 34 to claim this exemption and the web search portal business
  2 35 shall pay all sales or use tax that would have been due on the
  3  1 purchase or rental or use of the items listed in this
  3  2 exemption, plus any applicable penalty and interest imposed by
  3  3 statute.
  3  4    e.  For purposes of this subsection:
  3  5    (1)  "Affiliate" means an entity that directly or
  3  6 indirectly controls, is controlled with or by, or is under
  3  7 common control with another entity.
  3  8    (2)  "Control" means any of the following:
  3  9    (a)  In the case of a United States corporation, the
  3 10 ownership, directly or indirectly, of fifty percent or more of
  3 11 the voting power to elect directors.
  3 12    (b)  In the case of a foreign corporation, if the voting
  3 13 power to elect the directors is less than fifty percent, the
  3 14 maximum amount allowed by applicable law.
  3 15    (c)  In the case of an entity other than a corporation,
  3 16 fifty percent or more ownership interest in the entity, or the
  3 17 power to direct the management of the entity.
  3 18    (3)  "Web search portal business" means an entity among
  3 19 whose primary businesses is to provide a search portal to
  3 20 organize information; to access, search, and navigate the
  3 21 internet, including research and development to support
  3 22 capabilities to organize information; and to provide internet
  3 23 access, navigation, and search functionalities.
  3 24    Sec. 2.  Section 423.4, Code 2007, is amended by adding the
  3 25 following new subsection:
  3 26    NEW SUBSECTION.  8.  a.  The owner of an information
  3 27 technology facility located in this state on July 1, 2007, and
  3 28 having a primary business with a North American industry
  3 29 classification system number 518210 or 541519 as verified by
  3 30 the department of economic development using nationally
  3 31 recognized third=party sources such as Hoovers, Harris
  3 32 Directory or others designated by the department of economic
  3 33 development, may make an annual application for up to five
  3 34 consecutive years to the department for the refund of the
  3 35 sales or use tax upon the sales price of all sales of fuel
  4  1 used in creating heat, power, and steam for processing or
  4  2 generating electrical current, or from the sale of electricity
  4  3 consumed by computers, machinery, or other equipment for
  4  4 operation of the technology facility.
  4  5    b.  An information technology facility shall qualify for
  4  6 the refund in this subsection if all of the following criteria
  4  7 are met:
  4  8    (1)  The facility's six=digit North American industry
  4  9 classification system number 518210 or 541519 indicates that
  4 10 the facility is primarily engaged in providing
  4 11 computer=related services.
  4 12    (2)  The capital expenditures for computers, machinery, and
  4 13 other equipment used in the operation of the facility equals
  4 14 at least one million dollars.
  4 15    (3)  The facility is certified as meeting the Leadership in
  4 16 Energy and Environmental Design (LEED) standards.
  4 17    c.  The refund may be obtained only in the following manner
  4 18 and under the following conditions:
  4 19    (1)  The applicant shall use forms furnished by the
  4 20 department.
  4 21    (2)  The applicant shall separately list the amounts of
  4 22 sales and use tax paid during the reporting period.
  4 23    (3)  The applicant may request when the refund begins, but
  4 24 it must start on the first day of a month and proceed for a
  4 25 continuous twelve=month period.
  4 26    d.  In determining the amount to be refunded, if the dates
  4 27 of the utility billing or meter reading cycle for the sale or
  4 28 furnishing of metered gas and electricity is on or after the
  4 29 first day of the first month through the last day of the last
  4 30 month of the refund year, the full amount of tax charged in
  4 31 the billings shall be refunded.  In determining the amount to
  4 32 be refunded, if the dates of the sale or furnishing of fuel
  4 33 for purposes of commercial energy and the delivery of the fuel
  4 34 is on or after the first day of the first month through the
  4 35 last day of the last month of the refund year, the full amount
  5  1 of tax charged in the billings shall be refunded.
  5  2    e.  To receive refunds during the five=year period, the
  5  3 applicant shall file a refund claim within three months after
  5  4 the end of each refund year.
  5  5    f.  The refund in this subsection applies only to state
  5  6 sales and use tax paid and does not apply to local option
  5  7 sales and services taxes imposed pursuant to chapters 423B and
  5  8 423E.
  5  9    Sec. 3.  Section 427.1, Code 2007, is amended by adding the
  5 10 following new subsection:
  5 11    NEW SUBSECTION.  35.  a.  Property, other than land and
  5 12 buildings and other improvements, that is utilized by a web
  5 13 search portal business as defined in and meeting the
  5 14 requirements of section 423.3, subsection 92, including
  5 15 computers and equipment that are necessary for the maintenance
  5 16 and operation of a web search portal and other property
  5 17 whether directly or indirectly connected to the computers,
  5 18 including but not limited to cooling systems, cooling towers,
  5 19 and other temperature control infrastructure; power
  5 20 infrastructure for transformation, distribution, or management
  5 21 of electricity, including but not limited to exterior
  5 22 dedicated business=owned substations, and power distribution
  5 23 systems which are not subject to assessment under chapter
  5 24 437A; racking systems, cabling, and trays; and back=up power
  5 25 generation systems, battery systems, and related
  5 26 infrastructure all of which are necessary for the maintenance
  5 27 and operation of the web search portal site.
  5 28    b.  This exemption applies beginning with the assessment
  5 29 year the investment in or construction of the facility
  5 30 utilizing the materials, equipment, and systems set forth in
  5 31 paragraph "a" are first assessed.  For purposes of claiming
  5 32 this exemption, the requirements may be met by aggregating the
  5 33 various Iowa investments and other requirements of the web
  5 34 search portal business's affiliates as allowed under section
  5 35 423.3, subsection 92.  This exemption applies to affiliates of
  6  1 the web search portal business.
  6  2    Sec. 4.  IMPLEMENTATION.  Section 25B.7 does not apply to
  6  3 the property tax exemption enacted in this Act.
  6  4
  6  5
  6  6                                                             
  6  7                               PATRICK J. MURPHY
  6  8                               Speaker of the House
  6  9
  6 10
  6 11                                                             
  6 12                               JOHN P. KIBBIE
  6 13                               President of the Senate
  6 14
  6 15    I hereby certify that this bill originated in the House and
  6 16 is known as House File 912, Eighty=second General Assembly.
  6 17
  6 18
  6 19                                                             
  6 20                               MARK BRANDSGARD
  6 21                               Chief Clerk of the House
  6 22 Approved                , 2007
  6 23
  6 24
  6 25                            
  6 26 CHESTER J. CULVER
  6 27 Governor