Senate File 267 - Introduced SENATE FILE 267 BY SENG A BILL FOR An Act creating a tax credit available for the individual 1 and corporate income taxes, the franchise tax, insurance 2 premiums tax, and the moneys and credits tax for a 3 charitable contribution to certain institutions engaged in 4 regenerative medicine research and including retroactive 5 applicability provisions. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 7 TLSB 2098SS (1) 85 mm/sc

S.F. 267 Section 1. NEW SECTION . 422.11E Regenerative medicine 1 research tax credit. 2 1. a. The taxes imposed under this division, less the 3 credits allowed under section 422.12, shall be reduced by a 4 regenerative medicine research tax credit. 5 b. The credit shall be in an amount equal to sixty percent 6 of a taxpayer’s charitable contribution to an eligible research 7 institution located in the state. For purposes of this 8 section, “eligible research institution” means an organization 9 qualifying under section 501(c)(3) of the Internal Revenue Code 10 as an organization exempt from federal income tax under section 11 501(a) of the Internal Revenue Code that is engaged in research 12 designed to improve patient care through the development and 13 dissemination of novel clinical therapies for the functional 14 repair and replacement of diseased tissues and organs, 15 including research for the treatment of cancer. “Eligible 16 research institution” excludes a postsecondary institution or an 17 entity or organization receiving twenty-five percent or more of 18 its annual budget from a postsecondary institution. 19 c. An individual may claim a tax credit under this 20 subsection of a partnership, limited liability company, 21 S corporation, estate, or trust electing to have income 22 taxed directly to the individual. The amount claimed by the 23 individual shall be based upon the pro rata share of the 24 individual’s earnings from the partnership, limited liability 25 company, S corporation, estate, or trust. 26 d. Any tax credit in excess of the taxpayer’s tax liability 27 for the tax year is not refundable, but the taxpayer may 28 elect to have the excess credited to the tax liability for 29 the following four tax years or until depleted, whichever is 30 earlier. 31 2. a. To claim a tax credit under this section, the 32 taxpayer shall apply to the department for a tax credit 33 certificate. After verifying the eligibility of a taxpayer for 34 a tax credit pursuant to this section, the department shall 35 -1- LSB 2098SS (1) 85 mm/sc 1/ 4

S.F. 267 issue a tax credit certificate to be attached to the taxpayer’s 1 tax return. The tax credit certificate shall be issued on 2 a first-come, first-served basis based upon the date of the 3 application and shall contain the taxpayer’s name, address, 4 tax identification number, the amount of the credit, the 5 certificate expiration date, and any other information required 6 by the department. 7 b. To claim a tax credit under this section, a taxpayer must 8 attach one or more tax credit certificates to the taxpayer’s 9 tax return. The tax credit certificate or certificates 10 attached to the taxpayer’s tax return shall be issued in the 11 taxpayer’s name, and the expiration date on the certificate 12 shall be a date that falls on or after the last day of the 13 taxable year for which the taxpayer is claiming the tax credit. 14 c. The tax credit certificate, unless otherwise void, 15 shall be accepted by the department as payment toward the 16 tax liability of the taxpayer, subject to any conditions or 17 restrictions placed by the department upon the face of the 18 tax credit certificate and subject to the limitations of this 19 section. 20 d. Tax credit certificates issued under this section are not 21 transferable to any person or entity. 22 3. The maximum amount of tax credits issued in a fiscal 23 year pursuant to this section, section 422.33, subsection 30, 24 section 422.60, subsection 12, section 432.12N, and section 25 533.329, subsection 2, paragraph “k” , shall not exceed ten 26 million dollars. 27 Sec. 2. Section 422.33, Code 2013, is amended by adding the 28 following new subsection: 29 NEW SUBSECTION . 30. The taxes imposed under this division 30 shall be reduced by a regenerative medicine research tax credit 31 in the same manner, for the same amount, and under the same 32 conditions as provided in section 422.11E. 33 Sec. 3. Section 422.60, Code 2013, is amended by adding the 34 following new subsection: 35 -2- LSB 2098SS (1) 85 mm/sc 2/ 4

S.F. 267 NEW SUBSECTION . 12. The taxes imposed under this division 1 shall be reduced by a regenerative medicine research tax credit 2 in the same manner, for the same amount, and under the same 3 conditions as provided in section 422.11E. 4 Sec. 4. NEW SECTION . 432.12N Regenerative medicine research 5 tax credit. 6 The taxes imposed under this chapter shall be reduced by a 7 regenerative medicine research tax credit in the same manner, 8 for the same amount, and under the same conditions as provided 9 in section 422.11E. 10 Sec. 5. Section 533.329, subsection 2, Code 2013, is amended 11 by adding the following new paragraph: 12 NEW PARAGRAPH . k. The moneys and credits tax imposed 13 under this section shall be reduced by a regenerative medicine 14 research tax credit in the same manner, for the same amount, 15 and under the same conditions as provided in section 422.11E. 16 Sec. 6. RETROACTIVE APPLICABILITY. This Act applies 17 retroactively to January 1, 2013, for tax years beginning on 18 or after that date. 19 EXPLANATION 20 This bill provides a credit against the individual or 21 corporate income tax, the franchise tax, the insurance premiums 22 tax, and the moneys and credits tax for 60 percent of a 23 taxpayer’s contribution to a regenerative medicine research 24 institution located in the state. In order to qualify for the 25 credit, the regenerative medicine research institute must be 26 qualified under 501(c)(3) of the Internal Revenue Code and must 27 engage in research that is designed to improve patient care 28 through the development and dissemination of novel clinical 29 therapies for the functional repair and replacement of diseased 30 tissues and organs, including cancer research. Postsecondary 31 institutions and entities that receive 25 percent or more of 32 their annual budget from a postsecondary institution do not 33 qualify. 34 The tax credit is not refundable but, at the taxpayer’s 35 -3- LSB 2098SS (1) 85 mm/sc 3/ 4

S.F. 267 election, may be credited to the taxpayer’s tax liability for 1 up to four subsequent tax years or until depletion, whichever 2 is earlier. The tax credits are not transferable. The maximum 3 amount of tax credits is limited to $10 million in any one 4 fiscal year. The department of revenue approves the tax 5 credits and issues the tax credit certificates to taxpayers. 6 The bill applies retroactively to January 1, 2013, for tax 7 years beginning on or after that date. 8 -4- LSB 2098SS (1) 85 mm/sc 4/ 4