House
Study
Bill
604
-
Introduced
SENATE/HOUSE
FILE
_____
BY
(PROPOSED
ECONOMIC
DEVELOPMENT
AUTHORITY
BILL)
A
BILL
FOR
An
Act
relating
to
economic
development
by
providing
an
1
adjustment
to
net
income
for
certified
suppliers
of
anchor
2
manufacturers
for
purposes
of
state
taxation
and
including
3
retroactive
applicability
provisions.
4
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
5
TLSB
5279DP
(5)
84
mm/sc
S.F.
_____
H.F.
_____
Section
1.
NEW
SECTION
.
15.226
Definitions.
1
For
purposes
of
this
part:
2
1.
“Anchor
manufacturer”
means
a
business
that
meets
all
of
3
the
following:
4
a.
Manufactures
tangible
personal
property
at
a
facility
in
5
Iowa.
6
b.
Exports
at
least
fifty
percent
of
the
tangible
personal
7
property
produced
at
the
facility
to
markets
outside
of
the
8
state.
9
2.
“Certified
supplier”
means
a
business
certified
pursuant
10
to
section
15.227.
11
3.
“Facility”
means
a
building
or
buildings
located
in
the
12
state
at
which
tangible
personal
property
is
manufactured
for
13
sale
within
or
without
the
state
of
Iowa.
14
4.
“Manufactured”
or
“Manufactures”
means
adding
value
to
15
personal
property
through
a
process
of
manufacturing,
refining,
16
purifying,
combining
of
different
materials,
the
packaging
of
17
meats,
extracting
and
recovering
natural
resources,
and
all
18
processes
of
fabricating
and
curing,
with
a
view
to
selling
the
19
property
for
gain
or
profit.
20
5.
“Tangible
personal
property”
means
the
same
as
defined
in
21
section
422.33,
subsection
2,
unnumbered
paragraph
2.
22
Sec.
2.
NEW
SECTION
.
15.227
Certification
of
suppliers.
23
1.
A
business
meeting
the
requirements
of
subsection
2
may
24
apply
to
the
authority,
no
later
than
ninety
days
after
the
25
end
of
a
tax
year
of
the
business,
for
certification
under
26
this
section.
If
a
business
applying
to
the
authority
meets
27
the
requirements
of
subsection
2,
the
authority
shall
issue
28
a
certificate
to
the
business
stating
that
the
business
is
a
29
certified
supplier.
30
2.
To
receive
certification
as
a
certified
supplier,
a
31
business
must
meet
all
of
the
following
for
the
tax
year
32
immediately
preceding
the
tax
year
for
which
the
requested
33
certificate
will
be
valid:
34
a.
The
business
manufactures
tangible
personal
property
at
a
35
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S.F.
_____
H.F.
_____
facility
in
Iowa.
1
b.
The
business
derives
more
than
ten
percent
of
its
gross
2
sales
from
sales
to
anchor
manufacturers.
3
c.
The
business
provides
a
statement
from
an
anchor
4
manufacturer,
signed
by
an
officer
or
authorized
representative
5
of
the
anchor
manufacturer,
attesting
that
the
anchor
6
manufacturer
meets
the
definition
of
anchor
manufacturer
under
7
section
15.226,
and
provides
supporting
documentation
in
a
form
8
prescribed
by
the
authority.
9
d.
The
business
meets
one
of
the
following
criteria:
10
(1)
At
least
ten
percent
of
the
total
payroll
of
the
11
business
is
located
in
the
state.
12
(2)
The
business
employs
at
least
one
hundred
employees
at
a
13
facility
in
the
state.
14
e.
The
business
agrees
to
annually
provide
to
the
authority
15
information
and
data
on
jobs
created
and
capital
investments
16
made
in
the
state
by
the
business.
The
information
and
data
17
shall
be
in
a
form
prescribed
by
the
authority.
18
3.
A
certificate
is
valid
for
one
tax
year
and
shall
include
19
an
expiration
date.
Reapplication
may
be
made
each
year
for
20
certification
under
this
part.
The
department
of
revenue
shall
21
accept
a
validly
issued,
unexpired
certificate
issued
under
22
this
section.
23
Sec.
3.
NEW
SECTION
.
15.228
Eligibility
for
adjustment
to
24
net
income
of
certified
suppliers.
25
A
certified
supplier
shall
be
eligible
to
make
the
26
adjustment
to
net
income
in
section
422.35,
subsection
26,
for
27
a
tax
year
if
all
the
following
apply:
28
1.
The
certified
supplier’s
net
business
income
for
the
tax
29
year,
allocated
and
apportioned
to
this
state
under
section
30
422.33,
subsection
2,
paragraph
“b”
,
computed
without
regard
31
to
section
422.35,
subsection
26,
increased
by
more
than
ten
32
percent
over
the
certified
supplier’s
net
business
income
in
33
the
prior
year,
allocated
and
apportioned
to
this
state
under
34
section
422.33,
subsection
2,
paragraph
“b”
.
35
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H.F.
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2.
The
certified
supplier
attaches
a
copy
of
a
valid,
1
unexpired
certificate
issued
under
section
15.227
to
the
2
certified
supplier’s
tax
return
required
under
chapter
422.
3
Sec.
4.
NEW
SECTION
.
15.229
Rules.
4
The
authority
and
the
department
of
revenue
may
adopt
rules
5
for
the
implementation
of
this
part.
6
Sec.
5.
Section
422.35,
Code
Supplement
2011,
is
amended
by
7
adding
the
following
new
subsection:
8
NEW
SUBSECTION
.
26.
If
the
taxpayer
is
a
certified
supplier
9
that
meets
the
requirements
in
section
15.228,
subtract
an
10
amount
equal
to
the
difference
between
the
taxpayer’s
net
11
business
income
for
the
tax
year,
allocated
and
apportioned
12
under
section
422.33,
subsection
2,
paragraph
“b”
,
computed
13
without
regard
to
this
subsection,
and
one
hundred
ten
percent
14
of
the
taxpayer’s
net
business
income
for
the
prior
tax
year,
15
allocated
and
apportioned
under
section
422.33,
subsection
2,
16
paragraph
“b”
.
17
Sec.
6.
RETROACTIVE
APPLICABILITY.
This
Act
applies
18
retroactively
to
January
1,
2012,
for
tax
years
beginning
on
19
or
after
that
date.
20
EXPLANATION
21
This
bill
creates
an
economic
development
program
that
22
allows
a
certified
supplier
to
make
an
adjustment
to
net
income
23
for
state
corporate
tax
purposes.
24
To
qualify
as
a
certified
supplier
under
the
bill,
a
business
25
must
manufacture
tangible
personal
property
in
Iowa,
derive
26
more
than
10
percent
of
its
gross
sales
from
sales
to
anchor
27
manufacturers,
supply
the
authority
with
a
signed
statement
28
from
the
anchor
manufacturer
attesting
that
the
anchor
29
manufacturer
qualifies
as
an
anchor
manufacturer,
and
must
30
either
maintain
at
least
10
percent
of
its
payroll
in
Iowa
or
31
employ
at
least
100
employees
in
Iowa.
“Anchor
manufacturer”
32
is
defined
as
a
business
that
manufactures
tangible
personal
33
property
in
Iowa
and
exports
at
least
50
percent
of
the
34
tangible
personal
property
produced
in
Iowa
outside
of
the
35
-3-
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4
S.F.
_____
H.F.
_____
state.
1
A
business
that
meets
all
of
the
qualifications
of
a
2
certified
supplier
may
annually
apply
to
the
authority
to
3
receive
a
certificate
labeling
the
business
as
a
certified
4
supplier.
A
business
must
apply
for
a
certificate
no
later
5
than
90
days
after
the
end
of
its
tax
year.
The
certificate
is
6
valid
for
one
year
and
shall
include
an
expiration
date.
7
The
certified
supplier
will
be
entitled
to
make
an
8
adjustment
to
its
net
income
if
it
attaches
the
valid,
9
unexpired
certificate
to
its
tax
return,
and
if
its
net
10
business
income
allocated
and
apportioned
to
this
state,
11
computed
without
regard
to
the
adjustment
to
net
income
12
provided
in
the
bill,
increased
by
more
than
10
percent
over
13
its
prior
year
net
business
income
allocated
and
apportioned
14
to
this
state.
15
If
both
requirements
are
met,
the
certified
supplier
is
16
entitled
to
subtract
from
its
net
income
an
amount
equal
to
17
the
difference
between
its
current
year
net
business
income
18
allocated
and
apportioned
to
this
state,
computed
without
19
regard
to
the
adjustment
to
net
income
provided
in
the
bill,
20
and
110
percent
of
its
prior
year
net
business
income
allocated
21
and
apportioned
to
this
state.
22
The
bill
provides
the
authority
and
department
of
revenue
23
with
rulemaking
authority.
24
The
bill
applies
retroactively
to
January
1,
2012,
for
tax
25
years
beginning
on
or
after
that
date.
26
-4-
LSB
5279DP
(5)
84
mm/sc
4/
4