House File 670 - Introduced HOUSE FILE BY COMMITTEE ON ECONOMIC GROWTH (SUCCESSOR TO HSB 53) Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act relating to the transferability of eligible housing 2 business tax credits for new housing investment under the 3 enterprise zone program. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 1871HV 81 6 tm/gg/14 PAG LIN 1 1 Section 1. Section 15E.193B, subsection 8, unnumbered 1 2 paragraph 1, Code 2005, is amended to read as follows: 1 3 The amount of the tax credits determined pursuant to 1 4 subsection 6, paragraph "a", for each project shall be 1 5 approved by the department of economic development. The 1 6 department shall utilize the financial information required to 1 7 be provided under subsection 5, paragraph "e", to determine 1 8 the tax credits allowed for each project. In determining the 1 9 amount of tax credits to be allowed for a project, the 1 10 department shall not include the portion of the project cost 1 11 financed through federal, state, and local government tax 1 12 credits, grants, and forgivable loans. Upon approving the 1 13 amount of the tax credit, the department of economic 1 14 development shall issue a tax credit certificate to the 1 15 eligible housing business. An eligible housing business or 1 16 transferee shall not claim the tax credit unless a tax credit 1 17 certificate issued by the department of economic development 1 18 is attached to the taxpayer's return for the tax year for 1 19 which the tax credit is claimed. The tax credit certificate 1 20 shall contain the taxpayer's name, address, tax identification 1 21 number, the amount of the tax credit, and other information 1 22 required by the department of revenue. The tax credit 1 23 certificate shall be transferable if the housing development 1 24 is located in a brownfield site as defined in section 15.291, 1 25 if the housing development is located in a blighted area as 1 26 defined in section 403.17, or if low=income housing tax 1 27 credits authorized under section 42 of the Internal Revenue 1 28 Code are used to assist in the financing of the housing 1 29 development. Not more than three million dollars worth of tax 1 30 credits for housing developments that are located in a 1 31 brownfield site as defined in section 15.291 or housing 1 32 developments located in a blighted area as defined in section 1 33 403.17 shall be transferred in one calendar year. If the 1 34 transfer of more than three million dollars of such tax 1 35 credits are applied for in a calendar year, tax credit 2 1 certificates for transfers shall be issued on a pro rata 2 2 basis. Tax credit certificates issued under this chapter may 2 3 be transferred to any person or entity. Within ninety days of 2 4 transfer, the transferee must submit the transferred tax 2 5 credit certificate to the department of economic development 2 6 along with a statement containing the transferee's name, tax 2 7 identification number, and address, and the denomination that 2 8 each replacement tax credit certificate is to carry and any 2 9 other information required by the department of revenue. 2 10 Within thirty days of receiving the transferred tax credit 2 11 certificate and the transferee's statement, the department of 2 12 economic development shall issue one or more replacement tax 2 13 credit certificates to the transferee. Each replacement 2 14 certificate must contain the information required to receive 2 15 the original certificate and must have the same expiration 2 16 date that appeared in the transferred tax credit certificate. 2 17 Tax credit certificate amounts of less than the minimum amount 2 18 established by rule of the department of economic development 2 19 shall not be transferable. A tax credit shall not be claimed 2 20 by a transferee under subsection 6, paragraph "a", until a 2 21 replacement tax credit certificate identifying the transferee 2 22 as the proper holder has been issued. 2 23 Sec. 2. APPLICABILITY. This Act shall apply to transfers 2 24 of tax credit certificates for projects that begin on or after 2 25 July 1, 2005. 2 26 EXPLANATION 2 27 This bill relates to the transferability of eligible 2 28 housing business tax credits for new housing investment under 2 29 the enterprise zone program. 2 30 An eligible housing business under the enterprise zone 2 31 program may receive a tax credit of up to 10 percent of the 2 32 new investment which is directly related to the building or 2 33 rehabilitating of a minimum of four single=family homes 2 34 located in that part of a city or county in which there is a 2 35 designated enterprise zone or one multiple=dwelling unit 3 1 building containing three or more individual dwelling units 3 2 located in that part of a city or county in which there is a 3 3 designated enterprise zone. Currently, the tax credits are 3 4 transferable if low=income housing tax credits authorized 3 5 under section 42 of the Internal Revenue Code are used to 3 6 assist in the financing of the housing development. The bill 3 7 provides that not more than $3 million worth of tax credits 3 8 are transferable if the housing development is located in a 3 9 brownfield site or if the housing development is located in a 3 10 blighted area. The bill provides that if the transfer of more 3 11 than $3 million worth of tax credits are applied for in a 3 12 calendar year, the tax credit certificates shall be issued on 3 13 a pro rata basis. 3 14 The bill applies to transfers of tax credits for projects 3 15 that begin on or after July 1, 2005. 3 16 LSB 1871HV 81 3 17 tm:nh/gg/14