House File 467
HOUSE FILE
BY MASCHER
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act providing individual and corporate income tax credits to
2 businesses that provide apprenticeships and internships for
3 students at community colleges or state board of regents
4 institutions and for subsequent employment, and including
5 effective and retroactive applicability date provisions.
6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
7 TLSB 2908HH 80
8 mg/cl/14
PAG LIN
1 1 Section 1. NEW SECTION. 422.11H APPRENTICESHIP AND
1 2 INTERNSHIP TAX CREDIT.
1 3 1. The tax imposed under this division, less the credits
1 4 allowed under sections 422.12 and 422.12B, shall be reduced by
1 5 an apprenticeship and internship tax credit. To qualify for
1 6 the tax credit, a business shall be an employer of a student
1 7 at a community college established under chapter 260C or
1 8 institution of higher learning under the control of the state
1 9 board of regents under the certified school=to=career program,
1 10 as defined in section 15.362, under an apprenticeship program
1 11 as defined in section 260C.44, or in an internship under a
1 12 work=study program similar to one described in section 261.81.
1 13 The amount of the credit equals four hundred dollars for each
1 14 tax year during which the student is employed by the business
1 15 in the school=to=career, apprenticeship, or internship
1 16 program.
1 17 2. A business that employs an individual upon graduation
1 18 for which it has received the tax credit under subsection 1 is
1 19 entitled to an employment tax credit for that individual for
1 20 up to the first three years following the individual's
1 21 graduation from the Iowa community college or Iowa board of
1 22 regents institution. To receive the employment tax credit in
1 23 a tax year, the graduate must be employed for more than six
1 24 months in the tax year. The amount of the tax credit equals
1 25 one thousand six hundred dollars for the tax year per
1 26 individual employee.
1 27 3. An individual may claim the tax credits under
1 28 subsections 1 and 2 allowed a partnership, limited liability
1 29 company, S corporation, estate, or trust electing to have the
1 30 income taxed directly to the individual. The amount claimed
1 31 by the individual shall be based upon the pro rata share of
1 32 the individual's earnings of the partnership, limited
1 33 liability company, S corporation, estate, or trust.
1 34 4. Any credit in excess of the tax liability for the tax
1 35 year is nonrefundable but may be credited to the tax liability
2 1 for the following ten tax years or until depleted, whichever
2 2 is the earlier.
2 3 Sec. 2. Section 422.33, Code 2003, is amended by adding
2 4 the following new subsection:
2 5 NEW SUBSECTION. 14. a. The tax imposed under this
2 6 division shall be reduced by an apprenticeship and internship
2 7 tax credit. To qualify for the tax credit, a business shall
2 8 be an employer of a student at a community college established
2 9 under chapter 260C or institution of higher learning under the
2 10 control of the state board of regents under the certified
2 11 school=to=career program, as defined in section 15.362, under
2 12 an apprenticeship program as defined in section 260C.44, or in
2 13 an internship under a work=study program similar to one
2 14 described in section 261.81. The amount of the credit equals
2 15 four hundred dollars for each tax year during which the
2 16 student is employed by the business in the school=to=career,
2 17 apprenticeship, or internship program.
2 18 b. A business that employs an individual upon graduation
2 19 for which it has received the tax credit under paragraph "a"
2 20 is entitled to an employment tax credit for that individual
2 21 for up to the first three years following the individual's
2 22 graduation from the Iowa community college or Iowa board of
2 23 regents institution. To receive the employment tax credit in
2 24 a tax year, the graduate must be employed for more than six
2 25 months in the tax year. The amount of the tax credit equals
2 26 one thousand six hundred dollars for the tax year per
2 27 individual employee.
2 28 c. Any credit in excess of the tax liability for the tax
2 29 year is nonrefundable but may be credited to the tax liability
2 30 for the following ten tax years or until depleted, whichever
2 31 is the earlier.
2 32 Sec. 3. EFFECTIVE AND APPLICABILITY DATES. This Act,
2 33 being deemed of immediate importance, takes effect upon
2 34 enactment and applies retroactively to January 1, 2003, for
2 35 tax years beginning on or after that date.
3 1 EXPLANATION
3 2 This bill provides an individual or corporate income tax
3 3 credit to a business that employs a student from an Iowa
3 4 community college or Iowa board of regents institution in an
3 5 apprenticeship or internship program. The amount of credit
3 6 equals $400 per student. In addition, if the business hires
3 7 that student upon graduation, the business can receive another
3 8 tax credit equal to $1,600 for each year, up to three years,
3 9 that the graduate is employed by the business. The graduate
3 10 must be employed for at least six months during the tax year.
3 11 Any tax credit in excess of the tax liability is nonrefundable
3 12 but may be carried forward for up to 10 tax years.
3 13 The bill takes effect upon enactment and applies
3 14 retroactively to January 1, 2003, for tax years beginning on
3 15 or after that date.
3 16 LSB 2908HH 80
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