House Study Bill 168 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 creating an insurance industry new jobs tax credit. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 2351HC 82 4 tm/es/88 PAG LIN 1 1 Section 1. NEW SECTION. 432.12J INSURANCE INDUSTRY NEW 1 2 JOBS TAX CREDIT. 1 3 1. The taxes imposed under this chapter shall be reduced 1 4 by an insurance industry new jobs tax credit. The insurance 1 5 industry new jobs tax credit is in lieu of, and not in 1 6 addition to, the new jobs tax credit as provided in section 1 7 422.11A. An industry which has entered into an agreement 1 8 under chapter 260E and which has increased its base employment 1 9 level by at least ten percent within the time set in the 1 10 agreement or, in the case of an industry without a base 1 11 employment level, adds new jobs within the time set in the 1 12 agreement is entitled to an insurance industry new jobs tax 1 13 credit for the tax year selected by the industry. In 1 14 determining if the industry has increased its base employment 1 15 level by ten percent or added new jobs, only those new jobs 1 16 directly resulting from the project covered by the agreement 1 17 and those directly related to those new jobs shall be counted. 1 18 2. The amount of the credit is equal to the product of six 1 19 percent of the taxable wages upon which an employer is 1 20 required to contribute to the state unemployment compensation 1 21 administration fund, as defined in section 96.19, times the 1 22 number of new jobs existing in the tax year that directly 1 23 result from the project covered by the agreement or new jobs 1 24 that directly result from those new jobs. The tax year chosen 1 25 by the industry shall either begin or end during the period 1 26 beginning with the date of the agreement and ending with the 1 27 date by which the project is to be completed under the 1 28 agreement. Any credit in excess of the tax liability for the 1 29 tax year may be credited to the tax liability for the 1 30 following ten tax years or until depleted, whichever is the 1 31 earlier. An insurance industry new jobs tax credit may only 1 32 be claimed once for each new qualifying job. For purposes of 1 33 this section, "agreement", "industry", "new job", and 1 34 "project" mean the same as defined in section 260E.2, and 1 35 "base employment level" means the number of full=time jobs an 2 1 industry employs at the plant site which is covered by an 2 2 agreement under chapter 260E on the date of that agreement. 2 3 The insurance industry new jobs tax credit may only be claimed 2 4 by an industry entering into an agreement under chapter 260E 2 5 on or after July 1, 2007. 2 6 EXPLANATION 2 7 This bill creates an insurance industry new jobs tax 2 8 credit. 2 9 The bill provides that the tax on insurance premiums shall 2 10 be reduced by an insurance industry new jobs tax credit. The 2 11 insurance industry new jobs tax credit is in lieu of, and not 2 12 in addition to, the new jobs tax credit allowed against 2 13 personal income tax liability. The bill provides that an 2 14 industry which has entered into an industrial new jobs 2 15 agreement under Code chapter 260E and which has increased its 2 16 base employment level by at least 10 percent within the time 2 17 set in the agreement or, in the case of an industry without a 2 18 base employment level, adds new jobs within the time set in 2 19 the agreement is entitled to the insurance industry new jobs 2 20 tax credit for the tax year selected by the industry. 2 21 The bill provides that the amount of the tax credit is 2 22 equal to the product of 6 percent of the taxable wages upon 2 23 which an employer is required to contribute to the state 2 24 unemployment compensation administration fund times the number 2 25 of new jobs existing in the tax year that directly result from 2 26 the project covered by the agreement or new jobs that directly 2 27 result from those new jobs. The bill allows any credit in 2 28 excess of the tax liability for the tax year to be credited to 2 29 the tax liability for the following 10 tax years or until 2 30 depleted, whichever is the earlier. 2 31 The bill provides that an insurance industry new jobs tax 2 32 credit may only be claimed once for each new qualifying job. 2 33 The bill provides that an insurance industry new jobs tax 2 34 credit may only be claimed by an industry entering into an 2 35 agreement under Code chapter 260E on or after July 1, 2007. 3 1 LSB 2351HC 82 3 2 tm:nh/es/88