House Study Bill 146
HOUSE FILE
BY (PROPOSED COMMITTEE ON
ECONOMIC GROWTH BILL BY
CHAIRPERSON THOMAS)
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to historic preservation and cultural and
2 entertainment district tax credits, making appropriations, and
3 providing applicability date provisions.
4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
5 TLSB 1209HC 82
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PAG LIN
1 1 Section 1. Section 404A.1, subsection 1, Code 2007, is
1 2 amended to read as follows:
1 3 1. A historic preservation and cultural and entertainment
1 4 district tax credit, subject to the availability of the
1 5 credit, is granted against the tax imposed under chapter 422,
1 6 division II, III, or V, or chapter 432, for the rehabilitation
1 7 of eligible property located in this state as provided in this
1 8 chapter. Tax credits in excess of tax liabilities shall be
1 9 refunded or credited as provided in section 404A.4, subsection
1 10 3.
1 11 Sec. 2. Section 404A.4, subsection 3, Code 2007, is
1 12 amended to read as follows:
1 13 3. A person receiving a historic preservation and cultural
1 14 and entertainment district tax credit under this chapter which
1 15 is in excess of the person's tax liability for the tax year is
1 16 entitled to a refund of the excess at a discounted value. The
1 17 discounted value of the tax credit refund, as calculated by
1 18 the department of economic development, in consultation with
1 19 the department of revenue, shall be determined based on the
1 20 discounted value of the tax credit five years after the tax
1 21 year of the project completion at an interest rate equivalent
1 22 to the prime rate plus two percent. The refunded tax credit
1 23 shall not exceed seventy=five percent of the allowable tax
1 24 credit. In lieu of claiming a refund, the person may elect to
1 25 have the overpayment shown on the person's final, completed
1 26 return credited to the tax liability for succeeding tax years
1 27 until depleted.
1 28 Sec. 3. Section 404A.4, subsection 4, Code 2007, is
1 29 amended to read as follows:
1 30 4. The total amount of tax credits that may be approved
1 31 for a fiscal year under this chapter shall not exceed two
1 32 twenty million four hundred thousand dollars less any amount
1 33 appropriated pursuant to section 404A.6. For the fiscal
1 34 period beginning July 1, 2005, and ending June 30, 2015, an
1 35 additional four million dollars of tax credits may be approved
2 1 each fiscal year for purposes of projects located in cultural
2 2 and entertainment districts certified pursuant to section
2 3 303.3B. Of the tax credits approved for a fiscal year under
2 4 this chapter, two million dollars of tax credits shall be
2 5 allocated for purposes of projects with qualified costs of
2 6 five hundred thousand dollars or less, and six million dollars
2 7 of tax credits shall be allocated for purposes of projects
2 8 located in cultural and entertainment districts certified
2 9 pursuant to section 303.3B or identified in Iowa great places
2 10 agreements developed pursuant to section 303.3C. Any of the
2 11 additional tax credits allocated for projects located in
2 12 certified cultural and entertainment districts or identified
2 13 in Iowa great places agreements and for projects with a cost
2 14 of five hundred thousand dollars or less that are not approved
2 15 reserved during a fiscal year shall be applied to reserved tax
2 16 credits issued in accordance with section 404A.3 in order of
2 17 original reservation. The department of cultural affairs
2 18 shall establish by rule the procedures for the application,
2 19 review, selection, and awarding of certifications of
2 20 completion. The departments of economic development, cultural
2 21 affairs, and revenue shall each adopt rules to jointly
2 22 administer this subsection and shall provide by rule for the
2 23 method to be used to determine for which fiscal year the tax
2 24 credits are available. With the exception of tax credits
2 25 issued pursuant to contracts entered into prior to July 1,
2 26 2005, tax credits shall not be reserved for more than five
2 27 years.
2 28 Sec. 4. NEW SECTION. 404A.6 APPROPRIATION ==
2 29 ADMINISTRATIVE COSTS.
2 30 For the fiscal year beginning July 1, 2007, and each fiscal
2 31 year thereafter, there is appropriated from the general fund
2 32 of the state to the department of cultural affairs one hundred
2 33 fifty thousand dollars, or so much thereof as is necessary,
2 34 for purposes of costs associated with administering this
2 35 chapter.
3 1 Sec. 5. Section 422.11D, subsection 1, Code 2007, is
3 2 amended to read as follows:
3 3 1. The taxes imposed under this division, less the credits
3 4 allowed under sections 422.12 and 422.12B, shall be reduced by
3 5 a historic preservation and cultural and entertainment
3 6 district tax credit equal to the amount as computed under
3 7 chapter 404A for rehabilitating eligible property. Any credit
3 8 in excess of the tax liability shall be refunded or credited
3 9 to succeeding tax years until depleted, as provided in section
3 10 404A.4, subsection 3.
3 11 Sec. 6. Section 422.33, subsection 10, paragraph a, Code
3 12 2007, is amended to read as follows:
3 13 a. The taxes imposed under this division shall be reduced
3 14 by a historic preservation and cultural and entertainment
3 15 district tax credit equal to the amount as computed under
3 16 chapter 404A for rehabilitating eligible property. Any credit
3 17 in excess of the tax liability shall be refunded or credited
3 18 to succeeding tax years until depleted, as provided in section
3 19 404A.4, subsection 3.
3 20 Sec. 7. Section 422.60, subsection 4, paragraph a, Code
3 21 2007, is amended to read as follows:
3 22 a. The taxes imposed under this division shall be reduced
3 23 by a historic preservation and cultural and entertainment
3 24 district tax credit equal to the amount as computed under
3 25 chapter 404A for rehabilitating eligible property. Any credit
3 26 in excess of the tax liability shall be refunded or credited
3 27 to succeeding tax years until depleted, as provided in section
3 28 404A.4, subsection 3.
3 29 Sec. 8. Section 432.12A, subsection 1, Code 2007, is
3 30 amended to read as follows:
3 31 1. The tax imposed under this chapter shall be reduced by
3 32 a historic preservation and cultural and entertainment
3 33 district tax credit equal to the amount as computed under
3 34 chapter 404A for rehabilitating eligible property. Any credit
3 35 in excess of the tax liability shall be refunded or credited
4 1 to succeeding tax years until depleted, as provided in section
4 2 404A.4, subsection 3.
4 3 Sec. 9. APPLICABILITY. This Act applies to historic
4 4 preservation and cultural and entertainment district tax
4 5 credits applied for or reserved prior to July 1, 2007.
4 6 EXPLANATION
4 7 This bill relates to historic preservation and cultural and
4 8 entertainment district tax credits.
4 9 Currently, a person receiving a historic preservation and
4 10 cultural and entertainment district tax credit may receive a
4 11 tax credit refund at a discounted value for the amount in
4 12 excess of the taxpayer's tax liability in the year that the
4 13 tax credit is claimed.
4 14 The bill eliminates the discounting of the value of a
4 15 refund and allows the entire value of the tax credit to be
4 16 refunded. In addition, the bill allows a taxpayer, in lieu of
4 17 claiming a refund, to elect to have the overpayment shown on
4 18 the person's final, completed return credited to the tax
4 19 liability for succeeding tax years, until depleted. The bill
4 20 makes conforming amendments.
4 21 Currently, the total amount of historic preservation and
4 22 cultural and entertainment district tax credits that may be
4 23 approved for a fiscal year shall not exceed $2.4 million. For
4 24 the fiscal period beginning July 1, 2005, and ending June 30,
4 25 2015, an additional $4 million of tax credits may be approved
4 26 each fiscal year for purposes of projects located in certified
4 27 cultural and entertainment districts.
4 28 The bill increases the amount of tax credits that may be
4 29 approved each fiscal year to $20 million less the amount
4 30 appropriated for administrative costs. Of that amount, the
4 31 bill provides that $2 million of tax credits shall be
4 32 allocated for purposes of projects with qualified costs of
4 33 $500,000 or less, and $6 million of tax credits shall be
4 34 allocated for purposes of projects located in certified
4 35 cultural and entertainment districts or identified in Iowa
5 1 great places agreements. The bill provides that any of the
5 2 tax credits allocated for projects located in certified
5 3 cultural and entertainment districts or identified in Iowa
5 4 great places agreements and for projects with a cost of
5 5 $500,000 or less that are not reserved during a fiscal year
5 6 shall be applied to reserved tax credits in order of original
5 7 reservation.
5 8 The bill appropriates $150,000 each fiscal year for the
5 9 fiscal year beginning July 1, 2007, and each fiscal year
5 10 thereafter, from the general fund of the state to the
5 11 department of cultural affairs for purposes of costs
5 12 associated with administering Code chapter 404A.
5 13 The bill applies to historic preservation and cultural and
5 14 entertainment district tax credits applied for or reserved
5 15 prior to July 1, 2007.
5 16 LSB 1209HC 82
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