S.F. 2407 Section 1. Section 423.2, subsection 11, paragraph b, 1 subparagraph (7), Code 2018, is amended to read as follows: 2 (7) Beginning the first day of the quarter following July 3 1, 2014, transfer to the raceway facility tax rebate fund 4 created in section 423.4, subsection 11 , paragraph “e” , that 5 portion of the sales tax receipts collected and remitted upon 6 sales of tangible personal property or services furnished by 7 retailers at a raceway facility meeting the qualifications 8 of section 423.4, subsection 11 , that remains after the 9 transfers required in subparagraphs (1) through (6) of this 10 paragraph “b” . This subparagraph is repealed June 30, 2025, 11 or thirty days following the date on which an amount of total 12 rebates specified in section 423.4, subsection 11 , paragraph 13 “c” , subparagraph (4) (3) , subparagraph division (a) or (b), 14 whichever is applicable, has been provided or thirty days 15 following the date on which rebates cease as provided in 16 section 423.4, subsection 11 , paragraph “c” , subparagraph (5) 17 (4) , whichever is earliest. 18 Sec. 2. Section 423.4, subsection 11, paragraphs b, c, d, e, 19 and g, Code 2018, are amended to read as follows: 20 b. The owner or operator of a raceway facility may apply to 21 the department for a rebate of the following: 22 (1) Sales sales tax imposed and collected by retailers upon 23 sales of tangible personal property or services furnished to 24 purchasers at the raceway facility. Notwithstanding the state 25 sales tax imposed in section 423.2 , a sales tax rebate issued 26 pursuant to this subparagraph shall not exceed the amounts 27 transferred to the raceway facility tax rebate fund pursuant to 28 section 423.2, subsection 11 , paragraph “b” , subparagraph (7). 29 (2) (a) Sales or use tax upon the sales price of all 30 tangible personal property, or from services furnished to a 31 contractor, used in the fulfillment of a written contract with 32 the owner or operator if the property becomes an integral part 33 of the project under contract and at the completion of the 34 project becomes part of the raceway facility. 35 -1- LSB 5503SV (3) 87 mm/jh 1/ 6

S.F. 2407 (b) The rebate available under this subparagraph shall be 1 limited to one project per raceway facility. If such a project 2 is undertaken, the owner or operator of the raceway facility 3 shall notify the department upon completion of the project. 4 (c) Notwithstanding the state sales tax imposed in section 5 423.2 , a sales tax rebate issued pursuant to this subparagraph 6 shall not exceed the amounts remaining after the transfers 7 required under section 423.2, subsection 11 , paragraph “b” , 8 subparagraphs (1) through (6), have been made from the total 9 amount of sales tax for which the rebate is requested. 10 (d) Notwithstanding the state use tax imposed in section 11 423.5 , a use tax rebate issued pursuant to this subparagraph 12 shall not exceed the amounts remaining after the transfers 13 required under section 423.43, subsection 1 , have been made 14 from the total amount of use tax for which the rebate is 15 requested. 16 c. The rebate may be obtained only in the following amounts 17 and manner and only under the following conditions: 18 (1) For rebates pursuant to paragraph “b” , subparagraph (1), 19 on On forms furnished by the department within the time period 20 provided by the department by rule, which time period shall not 21 be longer than quarterly in this subparagraph . As prescribed 22 in subparagraph (3), subparagraph division (a), the amount 23 of a rebate shall be limited by and calculated according to 24 the amount of project costs incurred and paid by the owner or 25 operator on or after the effective date of this Act. A rebate 26 claim calculated according to an amount of project costs shall 27 be considered timely only if the form upon which the rebate is 28 requested is filed with the department within ninety days of 29 the date the project cost is paid by the owner or operator. 30 (2) For rebates pursuant to paragraph “b” , subparagraph (2), 31 on forms furnished by the department within the time period 32 provided by the department by rule, but not more than one year 33 after the final settlement has been made. 34 (3) (2) The owner or operator shall provide information as 35 -2- LSB 5503SV (3) 87 mm/jh 2/ 6

S.F. 2407 deemed necessary by the department , including but not limited 1 to information to substantiate the project costs incurred and 2 paid by the owner or operator . 3 (4) (3) The transactions described in paragraph “b” for 4 which sales or use tax was collected and the rebate is sought 5 occurred on or after January 1, 2015, but before January 1, 6 2025. However, the total amount of rebates provided pursuant 7 to this subsection shall not exceed the lesser of the following 8 amounts: 9 (a) Twenty-five percent of the project costs, as determined 10 by the department, if such a project is undertaken by the owner 11 or operator The amount of project costs incurred and paid by 12 the owner or operator on or after the effective date of this 13 Act . For purposes of this subparagraph division subsection , 14 “project costs” means costs incurred and paid by the owner or 15 operator in connection with the planning, design, construction , 16 and installation of new property or of modifications to 17 existing property that becomes an integral part of the project 18 under contract which project if such property upon completion 19 of one or more projects becomes or remains part of the 20 raceway facility , and other costs incurred by the owner or 21 operator in connection with the project that are customarily 22 associated with the and constitutes the renovation, remodeling, 23 reconstruction, expansion, equipping, or improvement of real 24 property that comprises the raceway facility . Project costs 25 shall be determined after the department receives notification 26 of completion of the project pursuant to paragraph “b”, 27 subparagraph (2), subparagraph division (b) “Project costs” does 28 not include any amount of cost that is not substantiated to the 29 department pursuant to subparagraphs (1) and (2) within ninety 30 days of the date it is paid by the owner or operator . However, 31 if rebates cease because of a change of control of the raceway 32 facility as provided in paragraph “c”, subparagraph (5), 33 project costs shall be determined as of the date the change of 34 control occurs. 35 -3- LSB 5503SV (3) 87 mm/jh 3/ 6

S.F. 2407 (b) Two One million eight hundred thousand dollars. 1 (5) (4) Notwithstanding subparagraph (4) (3) , the rebate 2 of sales or use tax shall cease for transactions occurring 3 on or after the date of the change of control of the raceway 4 facility. 5 (6) (5) The raceway facility has not received or shall not 6 receive any grants under the community attraction and tourism 7 program pursuant to chapter 15F, subchapter II , or the vision 8 Iowa program pursuant to chapter 15F, subchapter III . 9 d. To assist the department in determining the amount of the 10 rebate, the following shall occur: 11 (1) For rebates pursuant to paragraph “b” , subparagraph 12 (1), the owner or operator shall identify to the department 13 retailers located at the raceway facility who will be 14 collecting sales tax. The department shall verify such 15 identity and ensure that all proper permits have been issued. 16 For purposes of this subsection , advance ticket and admissions 17 sales shall be considered occurring at the raceway facility 18 regardless of where the transactions actually occur. 19 (2) For rebates pursuant to paragraph “b” , subparagraph (2), 20 the contractor shall state under oath, on forms provided by 21 the department, the amount of such sales of tangible personal 22 property, or services furnished and used in the performance 23 of a contract, and upon which sales or use tax has been paid, 24 and shall file such forms with the owner or operator which has 25 made any written contract for performance by the contractor. 26 The forms shall be filed by the contractor with the owner or 27 operator before final settlement is made. Any contractor who 28 willfully makes a false report of tax paid under the provisions 29 of this subsection is guilty of a simple misdemeanor and in 30 addition shall be liable for the payment of the tax and any 31 applicable penalty and interest. 32 e. There is established within the state treasury under 33 the control of the department a raceway facility tax rebate 34 fund consisting of the amount of state sales tax revenues 35 -4- LSB 5503SV (3) 87 mm/jh 4/ 6

S.F. 2407 transferred pursuant to section 423.2, subsection 11 , paragraph 1 “b” , subparagraph (7). An account is created within the 2 fund for each raceway facility meeting the qualifications 3 of this subsection . Moneys in the fund shall only be used 4 to provide rebates of state sales tax pursuant to paragraph 5 “b” , subparagraph (1) . The total amount of rebates paid from 6 the fund shall not exceed the amount specified in paragraph 7 “c” , subparagraph (4) (3) , subparagraph division (a) or (b), 8 whichever is applicable less . Any moneys in the fund which 9 represent state sales tax revenue for which the time period 10 in paragraph “c” for receiving a rebate has expired, or which 11 otherwise represent state sales tax revenue that has become 12 ineligible for rebate pursuant to this subsection shall 13 immediately revert to the general fund of the state. 14 g. This subsection is repealed June 30, 2025, or thirty 15 days following the date on which an amount of total rebates 16 specified in paragraph “c” , subparagraph (4), subparagraph 17 division (a) or (b), whichever is applicable, has one million 18 eight hundred thousand dollars in total rebates have been 19 provided and no overpayment of rebates exists, or thirty days 20 following the date on which rebates cease as provided in 21 paragraph “c” , subparagraph (5) (4) , and no overpayment of 22 rebates exists, whichever is earliest. 23 Sec. 3. EFFECTIVE DATE. This Act, being deemed of immediate 24 importance, takes effect upon enactment. 25 Sec. 4. RETROACTIVE APPLICABILITY. This Act applies 26 retroactively to January 1, 2015, for sales occurring on or 27 after that date. 28 EXPLANATION 29 The inclusion of this explanation does not constitute agreement with 30 the explanation’s substance by the members of the general assembly. 31 BACKGROUND. Current law provides a rebate of sales and use 32 tax to the owner or operator of a raceway facility that meets 33 certain requirements. The rebate is available for two types of 34 transactions. The first type is for state sales tax collected 35 -5- LSB 5503SV (3) 87 mm/jh 5/ 6

S.F. 2407 on purchases made at the raceway facility. The second type is 1 for state sales or use tax paid by a contractor in completion 2 of a project at the raceway facility. The rebate related to 3 the completion of a project is limited to one project per 4 raceway facility. The rebates only apply to transactions 5 occurring between January 1, 2015, and January 1, 2025. The 6 maximum amount of rebates is limited to $2 million or 25 7 percent of the project costs if such a project is undertaken at 8 the raceway facility, whichever is less. 9 BILL CHANGES. This bill strikes provisions allowing the 10 rebate for state sales or use tax paid by a contractor in 11 completion of a project at the raceway facility, and strikes 12 other provisions relating to the administration of that 13 component of the rebate. The rebate will now be available only 14 for state sales tax collected on purchases made at the raceway 15 facility, and shall be limited by and calculated according to 16 the amount of project costs incurred and paid by the owner or 17 operator on or after the effective date of the bill. The bill 18 also amends the maximum rebate limit to equal $1.8 million. 19 The bill modifies the definition of “project costs” for 20 purposes of the rebate to exclude any amount of a project’s 21 cost that is not substantiated to the department of revenue 22 (department) within 90 days of the date it is paid by the owner 23 or operator. As a result, project costs not properly reported 24 to the department within 90 days of the date they are paid by 25 the owner or operator shall not be eligible for a rebate paid 26 from the amounts of state sales tax collected on purchases made 27 at the raceway facility. 28 The bill takes effect upon enactment and applies 29 retroactively to January 1, 2015, for sales occurring on or 30 after that date. 31 -6- LSB 5503SV (3) 87 mm/jh 6/ 6