House Study Bill 234 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON SANDS) A BILL FOR An Act relating to tax credits for investment in certain 1 qualifying businesses or community-based seed capital funds 2 and including retroactive applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 2759HC (3) 84 tw/sc
H.F. _____ Section 1. Section 15.119, subsection 2, Code 2011, is 1 amended to read as follows: 2 2. The department, with the approval of the board, shall 3 adopt by rule a procedure for allocating the aggregate tax 4 credit limit established in this section among the following 5 programs administered by the department : 6 a. The high quality job creation program administered 7 pursuant to sections 15.326 through 15.336 . 8 b. The film, television, and video project promotion program 9 administered pursuant to sections 15.391 through 15.393 . 10 c. The corporate tax research credit under the quality jobs 11 enterprise zone program pursuant to section 15A.9, subsection 12 8 . 13 d. The enterprise zones program administered pursuant to 14 sections 15E.191 through 15E.197 . 15 e. The assistive device tax credit program administered 16 pursuant to section 422.11E and section 422.33, subsection 9 . 17 f. The tax credits for investments in qualifying businesses 18 and community-based seed capital funds issued by the capital 19 investment board pursuant to section 15E.43. In allocating 20 tax credits pursuant to this subsection, the department shall 21 allocate at least two million dollars for purposes of this 22 paragraph. 23 Sec. 2. Section 15E.43, subsection 4, Code 2011, is amended 24 by striking the subsection and inserting in lieu thereof the 25 following: 26 4. The board shall not issue tax credits under this section 27 in excess of the amount approved by the department for any one 28 fiscal year pursuant to section 15.119. 29 Sec. 3. Section 15E.44, subsection 2, paragraphs d and e, 30 Code 2011, are amended to read as follows: 31 d. The business is not a business engaged primarily in 32 retail sales, real estate, or the provision of health care 33 or other professional services that require a professional 34 license . 35 -1- LSB 2759HC (3) 84 tw/sc 1/ 2
H.F. _____ e. The business shall not have a net worth that exceeds ten 1 five million dollars. 2 Sec. 4. RETROACTIVE APPLICABILITY. This Act applies 3 retroactively to January 1, 2011, for tax years beginning on 4 or after that date. 5 EXPLANATION 6 This bill makes changes to the administration of the tax 7 credits available for investments in qualifying businesses and 8 community-based seed capital funds. 9 Current law limits the maximum aggregate amount of such tax 10 credits that may be issued to a total of $10 million. The 11 bill eliminates the existing limitation, places the credits 12 under the department of economic development’s annual aggregate 13 tax credit limitation in Code section 15.119, and directs the 14 department to allocate at least $2 million of that limit for 15 purposes of such credits. 16 The bill also changes the eligibility of certain qualifying 17 businesses. Currently, to be eligible for the tax credits, a 18 business must not be engaged primarily in “other professional 19 services” and must not have a net worth in excess of $10 20 million. The bill requires instead that a business not 21 be engaged primarily in “other services that require a 22 professional license” and reduces the net worth ceiling to $5 23 million. 24 The bill applies retroactively to January 1, 2011, for tax 25 years beginning on or after that date. 26 -2- LSB 2759HC (3) 84 tw/sc 2/ 2