Senate File 410 - Introduced
SENATE FILE
BY COMMITTEE ON WAYS AND MEANS
(SUCCESSOR TO SSB 1095)
Passed Senate, Date Passed House, 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 1871SV 81
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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. The three
1 34 million dollar annual limit does not apply to tax credits
1 35 awarded to an eligible housing business having low=income
2 1 housing tax credits authorized under section 42 of the
2 2 Internal Revenue Code to assist in the financing of the
2 3 housing development. The department may approve an
2 4 application for tax credit certificates for transfer from an
2 5 eligible housing business located in a brownfield site as
2 6 defined in section 15.291 or in a blighted area as defined in
2 7 section 403.17 that would result in the issuance of more than
2 8 three million dollars of tax credit certificates for transfer
2 9 provided the department, through negotiation with the eligible
2 10 business, allocates those tax credit certificates for transfer
2 11 over more than one calendar year. The department shall not
2 12 issue more than one million five hundred thousand dollars in
2 13 tax credit certificates for transfer to any one eligible
2 14 housing business located in a brownfield site as defined in
2 15 section 15.291 or in a blighted area as defined in section
2 16 403.17 in a calendar year. If three million dollars in tax
2 17 credit certificates for transfer have not been issued at the
2 18 end of a calendar year, the remaining tax credit certificates
2 19 for transfer may be issued in advance to an eligible housing
2 20 business scheduled to receive a tax credit certificate for
2 21 transfer in a later calendar year. Any time the department
2 22 issues a tax credit certificate for transfer which has not
2 23 been allocated at the end of a calendar year, the department
2 24 may prorate the remaining certificates to more than one
2 25 eligible applicant. If the entire three million dollars of
2 26 tax credit certificates for transfer is not issued in a given
2 27 calendar year, the remaining amount may be carried over to a
2 28 succeeding calendar year. Tax credit certificates issued
2 29 under this chapter may be transferred to any person or entity.
2 30 Within ninety days of transfer, the transferee must submit the
2 31 transferred tax credit certificate to the department of
2 32 economic development along with a statement containing the
2 33 transferee's name, tax identification number, and address, and
2 34 the denomination that each replacement tax credit certificate
2 35 is to carry and any other information required by the
3 1 department of revenue. Within thirty days of receiving the
3 2 transferred tax credit certificate and the transferee's
3 3 statement, the department of economic development shall issue
3 4 one or more replacement tax credit certificates to the
3 5 transferee. Each replacement certificate must contain the
3 6 information required to receive the original certificate and
3 7 must have the same expiration date that appeared in the
3 8 transferred tax credit certificate. Tax credit certificate
3 9 amounts of less than the minimum amount established by rule of
3 10 the department of economic development shall not be
3 11 transferable. A tax credit shall not be claimed by a
3 12 transferee under subsection 6, paragraph "a", until a
3 13 replacement tax credit certificate identifying the transferee
3 14 as the proper holder has been issued.
3 15 Sec. 2. APPLICABILITY. This Act shall apply to transfers
3 16 of tax credit certificates for projects that begin on or after
3 17 July 1, 2005.
3 18 EXPLANATION
3 19 This bill relates to the transferability of eligible
3 20 housing business tax credits for new housing investment under
3 21 the enterprise zone program.
3 22 An eligible housing business under the enterprise zone
3 23 program may receive a tax credit of up to 10 percent of the
3 24 new investment which is directly related to the building or
3 25 rehabilitating of a minimum of four single=family homes
3 26 located in that part of a city or county in which there is a
3 27 designated enterprise zone or one multiple=dwelling unit
3 28 building containing three or more individual dwelling units
3 29 located in that part of a city or county in which there is a
3 30 designated enterprise zone. Currently, the tax credits are
3 31 transferable if low=income housing tax credits authorized
3 32 under section 42 of the Internal Revenue Code are used to
3 33 assist in the financing of the housing development. The bill
3 34 provides that not more than $3 million worth of tax credits
3 35 are transferable if the housing development is located in a
4 1 brownfield site or if the housing development is located in a
4 2 blighted area. The bill allows the department to approve the
4 3 issuance of more than $3 million of tax credit certificates
4 4 for transfer provided that the department allocates those tax
4 5 credit certificates for transfer over more than one calendar
4 6 year. The bill prohibits the issuance of more than $1.5
4 7 million in tax credit certificates for transfer to any one
4 8 eligible housing business located in a brownfield site or in a
4 9 blighted area in a calendar year. The bill provides that, if
4 10 at the end of a calendar year less than $3 million in tax
4 11 credit certificates for transfer are issued, the remaining tax
4 12 credit certificates may be issued in advance to an eligible
4 13 housing business scheduled to receive a tax credit certificate
4 14 for transfer in a later calendar year and the department may
4 15 prorate the remaining certificates to more than one eligible
4 16 applicant. The bill allows tax credit certificates for
4 17 transfer that are not issued during a calendar year to be
4 18 carried over to a succeeding calendar year.
4 19 The bill applies to transfers of tax credits for projects
4 20 that begin on or after July 1, 2005.
4 21 LSB 1871SV 81
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