House File 2006 - Introduced HOUSE FILE 2006 BY ISENHART A BILL FOR An Act providing for the periodic repeal of state and local tax 1 expenditures and including applicability provisions. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 5033HH (10) 83 tw/sc

H.F. 2006 Section 1. NEW SECTION . 421C.1 Tax expenditures repealed. 1 1. Beginning on June 30, 2011, and every fourth year 2 thereafter, each Code provision in effect that provides for 3 a state or local tax expenditure is repealed. For purposes 4 of this section, “tax expenditure” means an exclusion from 5 the operation or collection of a tax imposed in this state. 6 Tax expenditures include tax credits, exemptions, deductions, 7 and rebates. Tax expenditures also include sales tax refunds 8 issued pursuant to section 423.4. 9 2. Every four years, the general assembly and the 10 governor shall review all tax expenditures of the state and 11 its political subdivisions and shall give consideration to 12 reenactment of those tax expenditures which are found to 13 achieve the public policy goals for which they were originally 14 enacted. 15 3. a. The repeal of a tax expenditure shall be applicable 16 beginning with the tax year, assessment year, or fiscal year, 17 as applicable, following the date of the repeal. 18 b. The repeal of a tax expenditure originally taken prior 19 to its repeal that authorized the carryforward of an unused 20 portion of the tax expenditure shall continue to be valid 21 after its repeal until the unused portion is depleted or until 22 expiration of the carryforward period provided for in the 23 statutory authorization for the tax expenditure, whichever 24 is earlier. The repeal of a tax expenditure shall not apply 25 to a taxpayer who was authorized to take the tax expenditure 26 pursuant to a contract entered into with a state agency 27 until such time as the contract is voided or expires. A tax 28 expenditure authorized for multiple years that is repealed 29 pursuant to this section shall continue after the date of 30 repeal until its expiration provided for in the statutory 31 authorization for the tax expenditure. 32 Sec. 2. APPLICABILITY. This Act applies to tax expenditures 33 in effect on and after June 30, 2011. 34 -1- LSB 5033HH (10) 83 tw/sc 1/ 2

H.F. 2006 EXPLANATION 1 This bill provides for the automatic repeal of all state and 2 local tax expenditures every fourth year, beginning on June 30, 3 2011. A “tax expenditure” is an exclusion from the operation 4 or collection of a tax imposed in this state. Tax expenditures 5 include tax credits, exemptions, deductions, and rebates. Tax 6 expenditures also include sales tax refunds issued pursuant to 7 section 423.4. 8 Every four years, the general assembly and the governor must 9 review all tax expenditures of the state and its political 10 subdivisions and give consideration to reenactment of those tax 11 expenditures which are found to achieve the public policy goals 12 for which they were originally enacted. 13 The repeal of a tax expenditure is applicable beginning with 14 the tax year, assessment year, or fiscal year following the 15 date of the repeal. The repeal of a tax expenditure originally 16 taken prior to its repeal that authorized the carryforward 17 of an unused portion of the tax expenditure continues to be 18 valid after its repeal until the unused portion is depleted or 19 until the statutory carryforward period has expired, whichever 20 is earlier. The repeal of a tax expenditure does not apply 21 to a taxpayer who was authorized to take the tax expenditure 22 pursuant to a contract entered into with a state agency 23 until such time as the contract is voided or expires. A tax 24 expenditure authorized for multiple years that is repealed 25 continues to be valid after the date of repeal until its 26 statutory expiration. 27 The bill applies to tax expenditures in effect on and after 28 June 30, 2011. 29 -2- LSB 5033HH (10) 83 tw/sc 2/ 2