HSB 655 (LSB 6009YC (1) 86)

HOUSE FILE _____

BY  (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON SANDS)

(COMPANION TO SF 2212)

A BILL FOR

An Act modifying the state sales tax rebate to the owner or operator of a baseball and softball tournament facility and movie site.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 423.2, subsection 11, paragraph a, subparagraph (2), Code 2016, is amended to read as follows:
   (2)  Subsequent to the deposit into the general fund of the state, the director shall credit an amount equal to the product of the sales tax rate imposed in this section times the sales price of the tangible personal property or services furnished to purchasers at a baseball and softball tournament facility and movie site complex meeting the qualifications of section 423.4, subsection 10, into the baseball and softball tournament facility and movie site complex sales tax rebate fund created under section 423.4, subsection 10, paragraph “e”. The director shall credit the moneys beginning the first day of the quarter following July 1, 2012 2016. This subparagraph is repealed June 30, 2024, or thirty days following the date on which sixteen million five hundred thousand dollars in total rebates have been provided under section 423.4, subsection 10, or thirty days following the date on which rebates cease as provided in section 423.4, subsection 10, paragraph “c”, subparagraph (4), whichever is earliest.
    Sec. 2.  Section 423.2, subsection 11, paragraph b, subparagraph (4), Code 2016, is amended to read as follows:
   (4)  Transfer to the baseball and softball tournament facility and movie site complex sales tax rebate fund that portion of the sales tax receipts described in paragraph “a”, subparagraph (2), remaining after the transfers required under subparagraphs (1), (2), and (3) of this paragraph “b”. This subparagraph is repealed June 30, 2024, or thirty days following the date on which sixteen million five hundred thousand dollars in total rebates have been provided under section 423.4, subsection 10, or thirty days following the date on which rebates cease as provided in section 423.4, subsection 10, paragraph “c”, subparagraph (4), whichever is earliest.
    Sec. 3.  Section 423.4, subsection 10, Code 2016, is amended to read as follows:
   10.  a.  For purposes of this subsection:
   (1)  “Baseball and softball tournament facility and movie site” means a baseball and softball tournament complex and tourist destination, which facility is located on a maximum of two hundred seventy-nine acres, located inside or within three miles of the city limits of a city with a population of at least four thousand but not more than five thousand five hundred residents, which city is located in a county with a population of at least ninety-three thousand but not more than one hundred thousand residents and where the construction on the baseball and softball tournament facility commenced not later than July 1, 2013, and the cost of the construction upon completion was at least thirty-eight million dollars. “Baseball and softball complex” means a baseball and softball complex located in this state that has a project completion date that is after July 1, 2016, and that has a cost of construction upon completion that is at least ten million dollars.
   (2)  “Change of control” means any of the following:
   (a)  Any change in the ownership of the original or any subsequent legal entity that is the owner or operator of the baseball and softball tournament facility and movie site complex such that more than fifty-one percent of the equity interests or voting interest in the legal entity cease ceases to be owned by individuals who are residents of Iowa, an Iowa corporation, or combination of both. 
   (b)  The original owners of the legal entity that is the owner or operator of the baseball and softball tournament facility and movie site complex shall collectively cease to own or control more than fifty percent of the voting equity interests or voting interest of such legal entity or shall otherwise cease to have effective control of such legal entity. 
   (3)  “Iowa corporation” means a corporation incorporated under the laws of Iowa where more than fifty-one percent of the corporation’s equity interests or voting interest are owned or controlled by individuals who are residents of Iowa. 
   (4)  “Owner or operator” means a for-profit legal entity where more than fifty-one percent of its equity interests are or voting interest is owned or controlled by individuals who are residents of Iowa, an Iowa corporation, or combination of both and that is the owner or operator of a baseball and softball tournament facility and movie site complex and is primarily a promoter of baseball and or softball tournaments, or both. 
   (5)  “Population” means the population based upon the 2010 certified federal census. “Project completion date” means the date on which a baseball and softball complex is placed into service. 
   b.  The owner or operator of a baseball and softball tournament facility and movie site complex may apply to the department for a rebate of sales tax imposed and collected by retailers upon sales of any goods, wares, merchandise, admission tickets, or services furnished to purchasers at the baseball and softball tournament facility and movie site complex.
   c.  The rebate may be obtained only in the following amounts and manner and only under the following conditions: 
   (1)  On forms furnished by the department within the time period provided by the department by rule, which time period shall not be longer than quarterly. 
   (2)  The owner or operator shall provide information as deemed necessary by the department. 
   (3)  The transactions for which sales tax was collected and the rebate is sought occurred on or after January 1, 2014, but before January 1, 2024 the baseball and softball complex’s project completion date but before the date which is ten years after that project completion date. However, not more than two million five hundred thousand dollars in rebates shall be provided to any one baseball and softball complex, and not more than sixteen million five hundred thousand dollars in total rebates shall be provided pursuant to this subsection. 
   (4)  Notwithstanding subparagraph (3), the rebate of sales tax to a baseball and softball complex shall cease for transactions occurring on or after the date of the change of control of the baseball and softball tournament facility and movie site complex. 
   d.  To assist the department in determining the amount of the rebate, the owner or operator shall identify to the department retailers located at the baseball and softball tournament facility and movie site complex who will be collecting sales tax. The department shall verify such identity and ensure that all proper permits have been issued. For purposes of this subsection, advance ticket and admissions sales shall be considered occurring at the baseball and softball tournament facility and movie site complex regardless of where the transactions actually occur. 
   e.  There is established within the state treasury under the control of the department a baseball and softball tournament facility and movie site complex sales tax rebate fund consisting of the amount of state sales tax revenues transferred pursuant to section 423.2, subsection 11, paragraph “b”, subparagraph (4). An account is created within the fund for each baseball and softball tournament facility and movie site complex meeting the qualifications of this subsection. Moneys in the fund shall only be used to provide rebates of state sales tax pursuant to this subsection, and only the state sales tax revenues in the baseball and softball tournament facility and movie site complex rebate fund are subject to rebate under this subsection. Not more than two million five hundred thousand dollars in total rebates shall be paid from each baseball and softball complex’s account within the fund, and not more than sixteen million five hundred thousand dollars in total rebates shall be paid from the fund. Any moneys in the fund which represent state sales tax revenue for which the time period in paragraph “c” for receiving a rebate has expired, or which otherwise represent state sales tax revenue that has become ineligible for rebate pursuant to this subsection, shall immediately revert to the general fund of this state.
   f.  Upon determining that the conditions and requirements of this subsection and the department are met, the department shall issue a warrant from the applicable account within the baseball and softball tournament facility and movie site complex rebate fund to the owner or operator in the amount equal to the amount claimed and verified by the department.
   g.  This subsection is repealed June 30, 2024, or thirty days following the date on which sixteen million five hundred thousand dollars in total rebates have been provided, or thirty days following the date on which rebates cease as provided in paragraph “c”, subparagraph (4), whichever is the earliest.  The director of revenue shall notify the Iowa Code editor upon occurrence of this condition.
EXPLANATION
The inclusion of this explanation does not constitute agreement with

the explanation’s substance by the members of the general assembly.
   This bill modifies the rebate of state sales tax to the owner or operator of a baseball and softball tournament facility and movie site.
   BACKGROUND. 2012 Iowa Acts, chapter 1098, enacted a sales tax rebate to the owner or operator of a baseball and softball tournament facility and movie site (facility). In order to be eligible for the rebate, the facility must be located on a maximum of 279 acres and located inside or within three miles of the city limits of a city with a population between 4,000 and 5,500, which is located in a county with a population between 93,000 and 100,000. Construction on the facility must commence not later than July 1, 2013, and the cost of construction must be at least $38 million.
   The rebate only applies to state sales tax collected at the facility between January 1, 2014, and December 31, 2023. The rebate ceases if control of the facility changes. The rebate provision is repealed June 30, 2024, or 30 days after a total of $16.5 million has been rebated, or 30 days following the change of control causing the rebates to cease, whichever occurs earlier.
   CHANGES IN BILL. The bill changes the name of the qualifying “baseball and softball tournament facility and movie site” to a “baseball and softball complex” (complex) and changes the requirements to qualify for the rebate. A complex will qualify for the rebate if it is located in this state, has a project completion date that is after July 1, 2016, and has construction costs of at least $10 million. “Project completion date” is defined in the bill to mean the date on which the complex is placed into service.
   The bill removes the requirement that the legal entity that is the owner or operator of the complex be a for-profit legal entity, and further modifies the percentage-of-ownership requirements for qualification as an owner or operator and for the occurrence of a change of control to specify that the percentage is calculated using the equity interests or voting interest owned or controlled by Iowa residents. Under current law, the calculation only considers equity interests owned by Iowa residents.
   The bill changes the availability of the rebate for each complex to specify that the rebate only applies to sales tax collected for the 10-year period beginning on or after the complex’s project completion date.
   The bill specifies that any one complex cannot receive more than $2.5 million in total rebates. The bill changes the repeal date of the rebate provision to provide that the rebate is repealed 30 days after a total of $16.5 million has been rebated.