SENATE FILE 2033

BY  KETTERING

A BILL FOR

An Act providing for a partial allocation of financial institution franchise tax revenue to cities and counties, making an appropriation, and providing effective date and retroactive applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  422.65  Allocation of revenue.
   1.  Of the moneys received from the franchise tax and credited to the general fund of the state, an amount equivalent to thirty percent is appropriated from the general fund of the state to the department of revenue and shall be allocated and paid as follows:
   a.  Sixty percent to the general fund of the city from which the tax is collected.
   b.  Forty percent to the general fund of the county from which the tax is collected.
   2.  If the financial institution maintains one or more offices for the transaction of business, other than its principal office, a portion of its franchise tax shall be allocated to each office based upon a reasonable measure of the business activity of each office. The director shall prescribe, for each type of financial institution, a method of measuring the business activity of each office. Financial institutions shall furnish all necessary information for this purpose at the request of the director.
   3.  The amounts appropriated shall be paid quarterly on warrants by the director, as allocated.
    Sec. 2.  EFFECTIVE UPON ENACTMENT.  This Act, being deemed of immediate importance, takes effect upon enactment.
    Sec. 3.  RETROACTIVE APPLICABILITY.  This Act applies retroactively to January 1, 2012.
EXPLANATION
   This bill provides for a partial allocation of revenue derived from the franchise tax imposed on financial institutions in division V of Code chapter 422. The bill specifies that of the moneys received from the franchise tax and credited to the general fund, an amount equivalent to 30 percent shall be appropriated to the department of revenue and allocated to cities and counties. The bill provides that 60 percent of this amount shall be allocated and paid to the general fund of the city from which the tax is collected, and that 40 percent shall be allocated and paid to the general fund of the county from which the tax is collected.
   The bill takes effect upon enactment and is retroactively applicable to January 1, 2012.