HF 301 (LSB 1523YH (2) 85)

HOUSE FILE 301

BY  RUNNING-MARQUARDT

A BILL FOR

An Act relating to the historic preservation and cultural and entertainment district tax credit by modifying the total amount of tax credits that may be issued and the allocation of the tax credits for a certain time period, and amending the qualifications for certain projects.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 404A.4, subsection 2, paragraph d, Code 2013, is amended to read as follows:
   d.  For the fiscal year beginning July 1, 2012, and for each fiscal year thereafter, the office shall reserve not more than forty-five million dollars worth of tax credits for any one taxable year.
    Sec. 2.  Section 404A.4, subsection 2, Code 2013, is amended by adding the following new paragraphs:
   NEW PARAGRAPH.  e.  For fiscal years beginning on or after July 1, 2013, but before July 1, 2015, the office shall reserve not more than fifty-five million dollars worth of tax credits for any one taxable year. 
   NEW PARAGRAPH.  f.  For the fiscal year beginning July 1, 2015, and for each fiscal year thereafter, the office shall reserve not more than forty-five million dollars worth of tax credits for any one taxable year.
    Sec. 3.  Section 404A.4, subsection 4, paragraph a, Code 2013, is amended to read as follows:
   a.  The total amount of tax credits that may be approved for a fiscal year prior to the fiscal year beginning July 1, 2012, under this chapter shall not exceed fifty million dollars. The total amount of tax credits that may be approved for a
 
the fiscal year beginning on or after July 1, 2012, shall not exceed forty-five million dollars.

The total amount of tax credits that may be approved for fiscal years beginning on or after July 1, 2013, but before July 1, 2015, shall not exceed fifty-five million dollars. The total amount of tax credits that may be approved for a fiscal year beginning on or after July 1, 2015, shall not exceed forty-five million dollars.
    Sec. 4.  Section 404A.4, subsection 4, paragraph b, subparagraphs (1) through (5), Code 2013, are amended to read as follows:
   (1)  Ten percent of the dollar amount of tax credits shall be allocated for purposes of new projects with final qualified rehabilitation costs of five hundred thousand
 
one million dollars or less.

However, for each fiscal year beginning on or after July 1, 2013, but before July 1, 2015, four million seven hundred thousand dollars shall be allocated for purposes of this subparagraph.
   (2)  Thirty percent of the dollar amount of tax credits shall be allocated for purposes of new projects located in cultural and entertainment districts certified pursuant to section 303.3B or identified in Iowa great places agreements developed pursuant to section 303.3C.

However, for each fiscal year beginning on or after July 1, 2013, but before July 1, 2015, fourteen million one hundred thousand dollars shall be allocated for purposes of this subparagraph.
   (3)  Twenty percent of the dollar amount of tax credits shall be allocated for disaster recovery projects.

However, for each fiscal year beginning on or after July 1, 2013, but before July 1, 2015, seventeen million four hundred thousand dollars shall be allocated for purposes of this subparagraph. For purposes of this subparagraph, “disaster recovery project” means a property meeting the requirements of an eligible property as described in section 404A.1, subsection 2, which is located in an area declared a disaster area by the governor or by a federal official and which has been physically impacted as a result of a natural disaster.
   (4)  Twenty percent of the dollar amount of the tax credits shall be allocated for projects that involve the creation of more than five hundred new permanent jobs.

However, for each fiscal year beginning on or after July 1, 2013, but before July 1, 2015, nine million four hundred thousand dollars shall be allocated for purposes of this subparagraph. A taxpayer receiving a tax credit certificate for a project under this allocation shall provide information documenting the creation of the jobs to the state historic preservation office and to the economic development authority. The jobs shall be created within two years of the date a tax credit certificate is issued. The economic development authority shall verify the creation of the jobs. The amount of any tax credits received is subject to recapture by the department of revenue if the jobs are not created within two years. The state historic preservation office and the economic development authority may adopt rules for the implementation of this subparagraph. The rules shall provide for a method or form that allows a city or county to track the number of jobs created in the construction industry by the project.
   (5)  Twenty percent of the dollar amount of the tax credits shall be allocated for any eligible project.

However, for each fiscal year beginning on or after July 1, 2013, but before July 1, 2015, nine million four hundred thousand dollars shall be allocated for purposes of this subparagraph.
EXPLANATION
   This bill increases the amount of the historic preservation and cultural and entertainment district tax credit and amends the allocation of the tax credits for a certain time period, and amends the requirements for certain projects under the tax credit.
   Under current law, not more than $45 million in tax credits may be approved for a fiscal year and reserved for any one taxable year. The bill increases this amount to $55 million for fiscal year 2013-2014 and fiscal year 2014-2015. For fiscal year 2015-2016, and for each fiscal year thereafter, the total amount is $45 million.
   Also under current law, the total amount of tax credits are required to be allocated among various projects as follows: 10 percent ($4.5 million) to projects with $500,000 or less of qualified rehabilitation costs; 30 percent ($13.5 million) to projects located in certified cultural and entertainment districts; 20 percent ($9 million) to disaster recovery projects; 20 percent ($9 million) to projects involving the creation of more than 500 new permanent jobs; and 20 percent ($9 million) for any eligible project. The bill amends the allocation of $55 million for fiscal year 2013-2014 and fiscal year 2014-2015 to be as follows: $4.7 million (approximately 8.54 percent of the $55 million) to projects with $500,000 or less of qualified rehabilitation costs; $14.1 million (approximately 25.64 percent) to projects located in certified cultural and entertainment districts; $17.4 million (approximately 31.64 percent) to disaster recovery projects; $9.4 million (approximately 17.09 percent) to projects involving the creation of more than 500 new permanent jobs; and $9.4 million (approximately 17.09 percent) for any eligible project. For fiscal year 2015-2016, and for each fiscal year thereafter, the allocation amounts return to the current percentage levels.
   The bill permanently increases to $1 million from $500,000 the amount of qualified rehabilitation costs that a project must have in order to qualify as an eligible project under the 10 percent small project allocation category.