House File 263 - Introduced
HOUSE FILE
BY PAULSEN
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to disaster recovery by providing individual
2 income tax credits for costs incurred in housing construction
3 and including effective and retroactive applicability date
4 provisions.
5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN
1 1 Section 1. NEW SECTION. 16.191 DISASTER RECOVERY HOUSING
1 2 CONSTRUCTION PROJECT TAX CREDIT.
1 3 1. a. A tax credit shall be allowed against the taxes
1 4 imposed in chapter 422, division II, for a portion of a
1 5 taxpayer's payment of construction costs incurred in the
1 6 construction of a disaster recovery housing construction
1 7 project. To qualify as a disaster recovery housing
1 8 construction project, a property, and the activities affecting
1 9 the property, shall meet all of the following conditions:
1 10 (1) The property is owned by a taxpayer who is an
1 11 individual or business subject to taxation under chapter 422,
1 12 division II.
1 13 (2) At least one housing unit constructed between July 1,
1 14 2008, and June 30, 2009, is located on the property.
1 15 (3) The cost of each housing unit constructed on the
1 16 property is not more than one hundred twenty thousand dollars.
1 17 (4) The property is located in an area declared a disaster
1 18 area by the governor or by a federal official.
1 19 b. An individual may claim a tax credit under this
1 20 subsection of a partnership, limited liability company, S
1 21 corporation, estate, or trust electing to have income taxed
1 22 directly to the individual. The amount claimed by the
1 23 individual shall be based upon the pro rata share of the
1 24 individual's earnings from the partnership, limited liability
1 25 company, S corporation, estate, or trust.
1 26 c. Any tax credit in excess of the taxpayer's liability
1 27 for the tax year is not refundable, but the taxpayer may elect
1 28 to have the excess credited to the tax liability for the
1 29 following five years or until depleted, whichever is earlier.
1 30 A tax credit shall not be carried back to a tax year prior to
1 31 the tax year in which the taxpayer first receives the tax
1 32 credit.
1 33 2. a. To claim a disaster recovery housing construction
1 34 tax credit under this section, a taxpayer must attach one or
1 35 more tax credit certificates to the taxpayer's tax return.
2 1 The tax credit certificate or certificates attached to the
2 2 taxpayer's tax return shall be issued in the taxpayer's name,
2 3 expire on or after the last day of the taxable year for which
2 4 the taxpayer is claiming the tax credit, and show a tax credit
2 5 amount equal to or greater than the tax credit claimed on the
2 6 taxpayer's tax return.
2 7 b. After verifying the eligibility of a taxpayer for a tax
2 8 credit pursuant to this section, the authority shall issue a
2 9 disaster recovery housing construction tax credit certificate
2 10 to be attached to the taxpayer's tax return. The tax credit
2 11 certificate shall contain the taxpayer's name, address, tax
2 12 identification number, the amount of the credit, and any other
2 13 information required by the department of revenue.
2 14 c. The tax credit certificate, unless otherwise void,
2 15 shall be accepted by the department of revenue as payment for
2 16 taxes imposed pursuant to chapter 422, division II, subject to
2 17 any conditions or restrictions placed by the authority upon
2 18 the face of the tax credit certificate and subject to the
2 19 limitations of this section.
2 20 d. Tax credit certificates issued under this section are
2 21 not transferable to any person or entity.
2 22 3. The tax credit shall be in an amount equal to the costs
2 23 incurred by the taxpayer which are directly related to a
2 24 disaster recovery housing construction project. However, the
2 25 amount of the tax credit shall not exceed two thousand
2 26 dollars.
2 27 4. For purposes of the individual income tax, the increase
2 28 in the basis of the property that would otherwise result from
2 29 the disaster recovery housing construction costs shall be
2 30 reduced by the amount of the tax credit allowed under this
2 31 part.
2 32 5. The maximum amount of tax credits issued by the
2 33 authority shall not exceed twenty million dollars.
2 34 6. A payment shall be deemed to have been made on the date
2 35 the disaster recovery housing construction project is
3 1 completed. A payment made prior to July 1, 2008, or after
3 2 June 30, 2009, shall not qualify for a tax credit under this
3 3 part.
3 4 Sec. 2. NEW SECTION. 16.192 APPROVAL == REQUIREMENTS ==
3 5 REPAYMENT.
3 6 1. A taxpayer seeking to claim a tax credit pursuant to
3 7 section 16.191 shall apply to the authority which shall have
3 8 the power to approve the amount of tax credit available for
3 9 each disaster recovery housing construction project.
3 10 2. A taxpayer applying for a tax credit shall provide the
3 11 authority with all of the following:
3 12 a. Information showing the total costs incurred in the
3 13 disaster recovery housing construction project.
3 14 b. Information about the financing sources that are
3 15 directly related to the disaster recovery project for which
3 16 the taxpayer is seeking approval for the tax credit.
3 17 3. If a taxpayer receives a tax credit pursuant to section
3 18 16.191, but fails to comply with any of the requirements in
3 19 this section or section 16.191, or fails to comply with local
3 20 zoning or construction ordinances, the tax credit is void, and
3 21 the department of revenue shall seek recovery of the value of
3 22 the credit received.
3 23 Sec. 3. NEW SECTION. 422.11X DISASTER RECOVERY HOUSING
3 24 CONSTRUCTION PROJECT TAX CREDIT.
3 25 The taxes imposed under this division, less the credits
3 26 allowed under section 422.12, shall be reduced by a disaster
3 27 recovery housing construction tax credit allowed under section
3 28 16.191.
3 29 Sec. 4. EFFECTIVE AND RETROACTIVE APPLICABILITY DATES.
3 30 This Act, being deemed of immediate importance, takes effect
3 31 upon enactment and applies retroactively to January 1, 2008,
3 32 for tax years beginning on or after that date.
3 33 EXPLANATION
3 34 This bill relates to disaster recovery by providing
3 35 individual income tax credits for qualified housing
4 1 construction projects.
4 2 The bill allows a qualifying taxpayer to claim a tax credit
4 3 for the costs incurred in the construction of new housing in
4 4 disaster areas. In order to claim the credit, the taxpayer
4 5 must make an investment in a qualifying disaster recovery
4 6 housing construction project. A qualifying disaster recovery
4 7 housing construction project is activity affecting a property
4 8 meeting all of the following conditions: (1) At least one
4 9 housing unit constructed between July 1, 2008, and June 30,
4 10 2009, is located on the property; (2) the property is owned by
4 11 a qualifying taxpayer; (3) the cost of each housing unit
4 12 constructed on the property is not more than $120,000; and (4)
4 13 the property is located in an area declared a disaster area by
4 14 the governor or by a federal official.
4 15 The tax credit is allowed against the individual income tax
4 16 in an amount not to exceed $2,000. The tax credit is not
4 17 refundable, but may be credited to subsequent tax liability
4 18 for five years or until depleted. The tax credits are not
4 19 transferable. The maximum amount of tax credits is limited to
4 20 $20 million. Any increase in a property's basis is reduced by
4 21 the amount of tax credits received. Investments are deemed to
4 22 have been made on the date the disaster recovery project is
4 23 completed. Investments made prior to July 1, 2008, or after
4 24 June 30, 2009, do not qualify for the tax credit.
4 25 The Iowa finance authority approves the tax credits and
4 26 issues tax credit certificates to qualifying taxpayers. A
4 27 taxpayer that does not comply with the requirements loses any
4 28 right to the credit and the department of revenue shall seek
4 29 recovery of the value of the credit received.
4 30 The bill takes effect upon enactment and applies
4 31 retroactively to January 1, 2008, for tax years beginning on
4 32 or after that date.
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