House File 2538 - Introduced HOUSE FILE BY COMMITTEE ON ECONOMIC GROWTH (SUCCESSOR TO HSB 586) Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act increasing the amount of investment tax credit for which 2 an eligible housing business may qualify if specified energy 3 efficiency standards are met, and including effective and 4 retroactive applicability date provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 5506HV 82 7 rn/sc/5 PAG LIN 1 1 Section 1. Section 15E.193B, subsection 6, paragraph a, 1 2 Code 2007, is amended to read as follows: 1 3 a. An eligible housing business may claim a tax credit up 1 4 to a maximum of ten percent of the new investment which is 1 5 directly related to the building or rehabilitating of a 1 6 minimum of four single=family homes located in that part of a 1 7 city or county in which there is a designated enterprise zone 1 8 or one multiple dwelling unit building containing three or 1 9 more individual dwelling units located in that part of a city 1 10 or county in which there is a designated enterprise zone. 1 11 However, the following construction or rehabilitation projects 1 12 meeting or exceeding the energy star or target finder rating 1 13 performance requirements established pursuant to a joint 1 14 program sponsored by the United States environmental 1 15 protection agency and the United States department of energy 1 16 may claim a tax credit up to a maximum of twelve percent of 1 17 the eligible new investment: 1 18 (1) Multifamily unit projects with three floors or less 1 19 above=grade that achieve the energy star label and a home 1 20 energy rating system index of eighty or better. 1 21 (2) Single=family unit projects with three floors or less 1 22 above=grade that achieve the energy star label and a home 1 23 energy rating system index of eighty or better. 1 24 (3) Projects that include both commercial space and 1 25 residential units and have more than three floors above=grade 1 26 that achieve an energy star target finder rating of 1 27 seventy=five or better. 1 28 Information documenting achievement of these ratings shall 1 29 be provided by the eligible housing business and verified by 1 30 the department. 1 31 PARAGRAPH DIVIDED. The new investment that may be used to 1 32 compute the tax credit shall not exceed the new investment 1 33 used for the first one hundred forty thousand dollars of value 1 34 for each single=family home or for each unit of a multiple 1 35 dwelling unit building containing three or more units. The 2 1 tax credit may be used to reduce the tax liability imposed 2 2 under chapter 422, division II, III, or V, or chapter 432. 2 3 Any credit in excess of the tax liability for the tax year may 2 4 be credited to the tax liability for the following seven years 2 5 or until depleted, whichever occurs earlier. If the business 2 6 is a partnership, S corporation, limited liability company, or 2 7 estate or trust electing to have the income taxed directly to 2 8 the individual, an individual may claim the tax credit 2 9 allowed. The amount claimed by the individual shall be based 2 10 upon the pro rata share of the individual's earnings of the 2 11 partnership, S corporation, limited liability company, or 2 12 estate or trust except as allowed for under subsection 8 when 2 13 low=income housing tax credits authorized under section 42 of 2 14 the Internal Revenue Code are used to assist in the financing 2 15 of the housing development. 2 16 Sec. 2. EFFECTIVE AND RETROACTIVE APPLICABILITY DATES. 2 17 This Act, being deemed of immediate importance, takes effect 2 18 upon enactment and applies retroactively to tax years 2 19 beginning on or after January 1, 2008. 2 20 EXPLANATION 2 21 This bill provides for an increased tax credit for 2 22 enterprise zone housing projects which meet certain energy 2 23 efficiency standards. Currently, an eligible housing business 2 24 may claim a tax credit up to a maximum of 10 percent of the 2 25 business' new investment which is directly related to the 2 26 building or rehabilitating of a specified form of housing 2 27 located in a part of a city or county in which there is a 2 28 designated enterprise zone. The bill increases the tax credit 2 29 to 12 percent if a project meets or exceeds specified energy 2 30 star or target finder rating performance requirements 2 31 established pursuant to a joint program sponsored by the 2 32 United States environmental protection agency and the United 2 33 States department of energy. The bill requires information 2 34 documenting achievement of the specified ratings to be 2 35 provided to the department of economic development by an 3 1 eligible housing business and verified by the department. 3 2 The bill takes effect upon enactment, and applies 3 3 retroactively to tax years beginning on or after January 1, 3 4 2008. 3 5 LSB 5506HV 82 3 6 rn/sc/5