Senate File 98 - Introduced



                                       SENATE FILE       
                                       BY  COMMITTEE ON ECONOMIC
                                           GROWTH

                                       (SUCCESSOR TO SSB 1082)


    Passed Senate, Date               Passed House,  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 1209SV 82
  6 tm/gg/14

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.  Any credit in excess of the tax liability shall be
  1 25 refunded with interest computed under section 422.25.  In lieu
  1 26 of claiming a refund, a taxpayer may elect to have the
  1 27 overpayment shown on the taxpayer's final, completed return
  1 28 credited to the tax liability for the following year.
  1 29    Sec. 3.  Section 404A.4, subsection 4, Code 2007, is
  1 30 amended to read as follows:
  1 31    4.  The total amount of tax credits that may be approved
  1 32 for a fiscal year under this chapter shall not exceed two
  1 33 twenty million four hundred thousand dollars less any amount
  1 34 appropriated pursuant to section 404A.6.  For the fiscal
  1 35 period beginning July 1, 2005, and ending June 30, 2015, an
  2  1 additional four million dollars of tax credits may be approved
  2  2 each fiscal year for purposes of projects located in cultural
  2  3 and entertainment districts certified pursuant to section
  2  4 303.3B.  Of the tax credits approved for a fiscal year under
  2  5 this chapter, two million dollars of tax credits shall be
  2  6 allocated for purposes of projects with qualified costs of
  2  7 five hundred thousand dollars or less, and seven million
  2  8 dollars of tax credits shall be allocated for purposes of
  2  9 projects located in cultural and entertainment districts
  2 10 certified pursuant to section 303.3B or identified in Iowa
  2 11 great places agreements developed pursuant to section 303.3C.
  2 12 Any of the additional tax credits allocated for projects
  2 13 located in certified cultural and entertainment districts or
  2 14 identified in Iowa great places agreements and for projects
  2 15 with a cost of five hundred thousand dollars or less that are
  2 16 not approved reserved during a fiscal year shall be applied to
  2 17 reserved tax credits issued in accordance with section 404A.3
  2 18 in order of original reservation.  The department of cultural
  2 19 affairs shall establish by rule the procedures for the
  2 20 application, review, selection, and awarding of certifications
  2 21 of completion.  The departments of economic development,
  2 22 cultural affairs, and revenue shall each adopt rules to
  2 23 jointly administer this subsection and shall provide by rule
  2 24 for the method to be used to determine for which fiscal year
  2 25 the tax credits are available.  With the exception of tax
  2 26 credits issued pursuant to contracts entered into prior to
  2 27 July 1, 2005, tax credits shall not be reserved for more than
  2 28 five years.
  2 29    Sec. 4.  NEW SECTION.  404A.6  APPROPRIATION ==
  2 30 ADMINISTRATIVE COSTS.
  2 31    For the fiscal year beginning July 1, 2007, and each fiscal
  2 32 year thereafter, there is appropriated from the general fund
  2 33 of the state to the department of cultural affairs one hundred
  2 34 fifty thousand dollars, or so much thereof as is necessary,
  2 35 for purposes of costs associated with administering this
  3  1 chapter.
  3  2    Sec. 5.  Section 422.11D, subsection 1, Code 2007, is
  3  3 amended to read as follows:
  3  4    1.  The taxes imposed under this division, less the credits
  3  5 allowed under sections 422.12 and 422.12B, shall be reduced by
  3  6 a historic preservation and cultural and entertainment
  3  7 district tax credit equal to the amount as computed under
  3  8 chapter 404A for rehabilitating eligible property.  Any credit
  3  9 in excess of the tax liability shall be refunded or credited
  3 10 to the following year, as provided in section 404A.4,
  3 11 subsection 3.
  3 12    Sec. 6.  Section 422.33, subsection 10, paragraph a, Code
  3 13 2007, is amended to read as follows:
  3 14    a.  The taxes imposed under this division shall be reduced
  3 15 by a historic preservation and cultural and entertainment
  3 16 district tax credit equal to the amount as computed under
  3 17 chapter 404A for rehabilitating eligible property.  Any credit
  3 18 in excess of the tax liability shall be refunded or credited
  3 19 to the following year, as provided in section 404A.4,
  3 20 subsection 3.
  3 21    Sec. 7.  Section 422.60, subsection 4, paragraph a, Code
  3 22 2007, is amended to read as follows:
  3 23    a.  The taxes imposed under this division shall be reduced
  3 24 by a historic preservation and cultural and entertainment
  3 25 district tax credit equal to the amount as computed under
  3 26 chapter 404A for rehabilitating eligible property.  Any credit
  3 27 in excess of the tax liability shall be refunded or credited
  3 28 to the following year, as provided in section 404A.4,
  3 29 subsection 3.
  3 30    Sec. 8.  Section 432.12A, subsection 1, Code 2007, is
  3 31 amended to read as follows:
  3 32    1.  The tax imposed under this chapter shall be reduced by
  3 33 a historic preservation and cultural and entertainment
  3 34 district tax credit equal to the amount as computed under
  3 35 chapter 404A for rehabilitating eligible property.  Any credit
  4  1 in excess of the tax liability shall be refunded or credited
  4  2 to the following year, as provided in section 404A.4,
  4  3 subsection 3.
  4  4    Sec. 9.  TAX CREDIT CERTIFICATES == RESERVATION DATES.
  4  5    1.  In the order of original redemption dates, the
  4  6 department of cultural affairs shall reissue historic
  4  7 preservation and cultural and entertainment district tax
  4  8 credit certificates held by the original tax credit
  4  9 certificate recipient.  Tax credit certificates that have been
  4 10 sold since issuance shall not be reissued pursuant to this
  4 11 subsection.
  4 12    2.  In the order of original reservation dates, the
  4 13 department of cultural affairs shall modify the reservation
  4 14 date of reserved historic preservation and cultural and
  4 15 entertainment district tax credits based on the availability
  4 16 of additional moneys for tax credits under this bill.
  4 17    Sec. 10.  APPLICABILITY.  This Act applies to historic
  4 18 preservation and cultural and entertainment district tax
  4 19 credits applied for or reserved prior to July 1, 2007.
  4 20                           EXPLANATION
  4 21    This bill relates to historic preservation and cultural and
  4 22 entertainment district tax credits.
  4 23    Currently, a person receiving a historic preservation and
  4 24 cultural and entertainment district tax credit may receive a
  4 25 tax credit refund at a discounted value for the amount in
  4 26 excess of the taxpayer's tax liability in the year that the
  4 27 tax credit is claimed.
  4 28    The bill eliminates the discounting of the value of a
  4 29 refund and allows the entire value of the tax credit to be
  4 30 refunded.  In addition, the bill allows a taxpayer, in lieu of
  4 31 claiming a refund, to elect to have the overpayment shown on
  4 32 the person's final, completed return credited to the tax
  4 33 liability for the following year.  The bill makes conforming
  4 34 amendments.
  4 35    Currently, the total amount of historic preservation and
  5  1 cultural and entertainment district tax credits that may be
  5  2 approved for a fiscal year shall not exceed $2.4 million.  For
  5  3 the fiscal period beginning July 1, 2005, and ending June 30,
  5  4 2015, an additional $4 million of tax credits may be approved
  5  5 each fiscal year for purposes of projects located in certified
  5  6 cultural and entertainment districts.
  5  7    The bill increases the amount of tax credits that may be
  5  8 approved each fiscal year to $20 million less the amount
  5  9 appropriated for administrative costs.  Of that amount, the
  5 10 bill provides that $2 million of tax credits shall be
  5 11 allocated for purposes of projects with qualified costs of
  5 12 $500,000 or less, and $7 million of tax credits shall be
  5 13 allocated for purposes of projects located in certified
  5 14 cultural and entertainment districts or identified in Iowa
  5 15 great places agreements.  The bill provides that any of the
  5 16 tax credits allocated for projects located in certified
  5 17 cultural and entertainment districts or identified in Iowa
  5 18 great places agreements and for projects with a cost of
  5 19 $500,000 or less that are not reserved during a fiscal year
  5 20 shall be applied to reserved tax credits in order of original
  5 21 reservation.
  5 22    The bill appropriates $150,000 each fiscal year for the
  5 23 fiscal year beginning July 1, 2007, and each fiscal year
  5 24 thereafter, from the general fund of the state to the
  5 25 department of cultural affairs for purposes of costs
  5 26 associated with administering Code chapter 404A.
  5 27    The bill provides that, in the order of redemption dates,
  5 28 the department shall reissue the tax credit certificates held
  5 29 by the original tax credit certificate recipient.  The bill
  5 30 provides that, in the order of original reservation dates, the
  5 31 department shall modify the reservation date of the tax
  5 32 credits based on the availability of additional moneys for tax
  5 33 credits under the bill.
  5 34    The bill applies to historic preservation and cultural and
  5 35 entertainment district tax credits applied for or reserved
  6  1 prior to July 1, 2007.
  6  2 LSB 1209SV 82
  6  3 tm:sc/gg/14