House Study Bill 53 HOUSE FILE BY (PROPOSED COMMITTEE ON ECONOMIC GROWTH BILL BY CHAIRPERSON HOFFMAN) 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 1871YC 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. Tax credit certificates issued under this 1 30 chapter may be transferred to any person or entity. Within 1 31 ninety days of transfer, the transferee must submit the 1 32 transferred tax credit certificate to the department of 1 33 economic development along with a statement containing the 1 34 transferee's name, tax identification number, and address, and 1 35 the denomination that each replacement tax credit certificate 2 1 is to carry and any other information required by the 2 2 department of revenue. Within thirty days of receiving the 2 3 transferred tax credit certificate and the transferee's 2 4 statement, the department of economic development shall issue 2 5 one or more replacement tax credit certificates to the 2 6 transferee. Each replacement certificate must contain the 2 7 information required to receive the original certificate and 2 8 must have the same expiration date that appeared in the 2 9 transferred tax credit certificate. Tax credit certificate 2 10 amounts of less than the minimum amount established by rule of 2 11 the department of economic development shall not be 2 12 transferable. A tax credit shall not be claimed by a 2 13 transferee under subsection 6, paragraph "a", until a 2 14 replacement tax credit certificate identifying the transferee 2 15 as the proper holder has been issued. 2 16 EXPLANATION 2 17 This bill relates to the transferability of eligible 2 18 housing business tax credits for new housing investment under 2 19 the enterprise zone program. 2 20 An eligible housing business under the enterprise zone 2 21 program may receive a tax credit of up to 10 percent of the 2 22 new investment which is directly related to the building or 2 23 rehabilitating of a minimum of four single=family homes 2 24 located in that part of a city or county in which there is a 2 25 designated enterprise zone or one multiple=dwelling unit 2 26 building containing three or more individual dwelling units 2 27 located in that part of a city or county in which there is a 2 28 designated enterprise zone. Currently, the tax credits are 2 29 transferable if low=income housing tax credits authorized 2 30 under section 42 of the Internal Revenue Code are used to 2 31 assist in the financing of the housing development. The bill 2 32 provides that the tax credits are also transferable if the 2 33 housing development is located in a brownfield site or if the 2 34 housing development is located in a blighted area. 2 35 LSB 1871YC 81 3 1 tm:nh/gg/14