House File 2684 - Introduced
HOUSE FILE
BY COMMITTEE ON ECONOMIC
GROWTH
(SUCCESSOR TO HF 2392)
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to investment tax credits for investments in
2 targeted small businesses.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
4 TLSB 6305HV 81
5 tm/cf/24
PAG LIN
1 1 Section 1. Section 15E.43, subsection 4, Code Supplement
1 2 2005, is amended to read as follows:
1 3 4. a. For tax credits resulting from investments in a
1 4 community=based seed capital fund or a qualifying business
1 5 under section 15E.44, subsection 2, paragraph "a", the
1 6 following amount of tax credits shall be issued:
1 7 (1) The aggregate amount of tax credits issued pursuant to
1 8 this division shall not exceed a total of ten million dollars.
1 9 (2) The total amount of tax credits issued during the
1 10 fiscal year beginning July 1, 2002, shall not exceed three
1 11 million dollars. The total amount of tax credits issued
1 12 during the fiscal year beginning July 1, 2003, shall not
1 13 exceed three million dollars. The total amount of tax credits
1 14 issued during the fiscal year beginning July 1, 2004, shall
1 15 not exceed four million dollars.
1 16 (3) Any amount of the maximum aggregate limit of tax
1 17 credits that have not been issued by June 30, 2005, may be
1 18 issued in any subsequent fiscal year. Not more than three
1 19 million dollars of tax credits may be issued in any one
1 20 subsequent fiscal year.
1 21 b. For tax credits resulting from investments in a
1 22 qualifying business under section 15E.44, subsection 2,
1 23 paragraph "b", not more than five hundred thousand dollars of
1 24 such tax credits may be issued during any fiscal year.
1 25 Sec. 2. Section 15E.44, subsection 2, Code Supplement
1 26 2005, is amended to read as follows:
1 27 2. In order to be a qualifying business, a business must
1 28 meet all of the following criteria be one of the following:
1 29 a. A business that meets all of the following criteria:
1 30 (1) The principal business operations of the business are
1 31 located in this state.
1 32 b. (2) The business has been in operation for six years
1 33 or less.
1 34 c. (3) The business has an owner who has successfully
1 35 completed one of the following:
2 1 (1) (a) An entrepreneurial venture development
2 2 curriculum.
2 3 (2) (b) Three years of relevant business experience.
2 4 (3) (c) A four=year college degree in business
2 5 management, business administration, or a related field.
2 6 (4) (d) Other training or experience as the board may
2 7 specify by rule or order as sufficient to increase the
2 8 probability of success of the qualifying business.
2 9 d. (4) The business is not a business engaged primarily
2 10 in retail sales, real estate, or the provision of health care
2 11 or other professional services.
2 12 e. (5) The business shall not have a net worth that
2 13 exceeds ten million dollars.
2 14 f. (6) The business shall have secured, within twenty=
2 15 four months following the first date on which the equity
2 16 investments qualifying for tax credits have been made, total
2 17 equity or near equity financing equal to at least two hundred
2 18 fifty thousand dollars.
2 19 b. A business certified as a targeted small business by
2 20 the department of inspections and appeals pursuant to section
2 21 10A.104.
2 22 EXPLANATION
2 23 This bill relates to investment tax credits for investments
2 24 in targeted small businesses.
2 25 The bill provides that a tax credit shall be allowed
2 26 against personal and corporate income tax liabilities,
2 27 franchise tax liabilities for financial institutions,
2 28 insurance premium tax liabilities, and moneys and credits tax
2 29 liabilities for a portion of a taxpayer's investment in a
2 30 certified targeted small business. The tax credit is only
2 31 allowed for an investment made in the form of cash to purchase
2 32 equity in the business. The tax credit is equivalent to 20
2 33 percent of the taxpayer's equity investment. The maximum
2 34 amount of a tax credit for an investment by an investor in any
2 35 one qualifying business is $50,000. Each year, an investor
3 1 cannot claim tax credits for more than five different
3 2 investments in five different qualifying businesses.
3 3 The bill limits the total amount of such tax credits that
3 4 may be issued in one fiscal year to $500,000.
3 5 LSB 6305HV 81
3 6 tm:nh/cf/24