HSB 648 (LSB 6027HC (3) 84)

HOUSE FILE _____

BY  (PROPOSED COMMITTEE ON ECONOMIC GROWTH/REBUILD IOWA BILL BY CHAIRPERSON GRASSLEY)

A BILL FOR

An Act relating to the amount allowable as an innovation fund investment tax credit, making the credit transferable, and including effective date and retroactive applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 15E.52, subsection 3, Code Supplement 2011, is amended to read as follows:
   3.  The amount of a tax credit allowed under this section shall equal twenty percent of
 
the following percentage of the taxpayer’s equity investment in an innovation fund:
   a.  For equity investments made in fiscal years beginning on or after July 1, 2011, and ending on or before June 30, 2014, one hundred percent.
   b.  For equity investments made in the fiscal year beginning on July 1, 2014, seventy-five percent.
   c.  For equity investments made in the fiscal year beginning on July 1, 2015, fifty percent.
   d.  For equity investments made in fiscal years beginning on or after July 1, 2016, twenty percent. 
    Sec. 2.  Section 15E.52, subsection 5, paragraph a, Code Supplement 2011, is amended to read as follows:
   a.  The board shall issue certificates under this section which may be redeemed for tax credits. The board shall issue such certificates so that not more than the amount allocated for such tax credits under section 15.119, subsection 2, may be claimed. The certificates shall not be transferable.
    Sec. 3.  Section 15E.52, subsection 5, Code Supplement 2011, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  c.
  (1)  Tax credit certificates issued under this section may be transferred to any person or entity. Within ninety days of transfer, the transferee shall submit the transferred tax credit certificate to the department of revenue along with a statement containing the transferee’s name, tax identification number, and address, the denomination that each replacement tax credit certificate is to carry, and any other information required by the department of revenue.
   (2)  Within thirty days of receiving the transferred tax credit certificate and the transferee’s statement, the department of revenue shall issue one or more replacement tax credit certificates to the transferee. Each replacement tax credit certificate must contain the information required for the original tax credit certificate and must have the same expiration date that appeared in the original tax credit certificate. Tax credit certificate amounts of less than the minimum amount established by rule of the economic development authority shall not be transferable.
   (3)  A tax credit shall not be claimed by a transferee under this section until a replacement tax credit certificate identifying the transferee as the proper holder has been issued. The transferee may use the amount of the tax credit transferred against the taxes imposed in chapter 422, divisions II, III, and V, and in chapter 432, and against the moneys and credits tax imposed in section 533.329, for any tax year the original transferor could have claimed the tax credit. Any consideration received for the transfer of the tax credit shall not be included as income under chapter 422, divisions II, III, and V, under chapter 432, or against the moneys and credits tax imposed in section 533.329. Any consideration paid for the transfer of the tax credit shall not be deducted from income under chapter 422, divisions II, III, and V, under chapter 432, or against the moneys and credits tax imposed in section 533.329.
    Sec. 4.  EFFECTIVE UPON ENACTMENT.  This Act, being deemed of immediate importance, takes effect upon enactment.
    Sec. 5.  RETROACTIVE APPLICABILITY.  This Act applies retroactively to July 1, 2011, for innovation fund tax credit certificates issued on or after that date.
EXPLANATION
   This bill changes the amount allowable as an innovation fund investment tax credit under Code section 15E.52. Under current law, the credit is equal to 20 percent of a taxpayer’s equity investment in an innovation fund. The bill changes the credit amount to 100 percent of an equity investment made in fiscal years beginning July 1, 2011, July 1, 2012, and July 1, 2013, 75 percent for the fiscal year beginning July 1, 2014, 50 percent for the fiscal year beginning July 1, 2015, and 20 percent for fiscal years beginning on or after July 1, 2016.
   The bill also makes the tax credit transferable and establishes procedures for transferring the credit to another person or entity. The bill is effective upon enactment and applies retroactively to July 1, 2011, for innovation fund tax credit certificates issued on or after that date.