House File 254 - Introduced HOUSE FILE 254 BY SHIPLEY A BILL FOR An Act authorizing a property tax exemption for certain 1 property used for shared services and business assistance 2 and including applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1804HH (2) 88 md/jh

H.F. 254 Section 1. Section 427.1, Code 2019, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 42. Business incubator property. 3 a. The property owned or leased and operated by a local or 4 regional economic development organization and used solely as a 5 business incubator. 6 b. For purposes of this subsection: 7 (1) “Business incubator” means a facility in which space is 8 leased to small businesses and that provides shared services 9 and business assistance to such businesses to improve their 10 chances of success. The services provided may include but are 11 not limited to receptionist, copying, computer, telephone, 12 secretarial, and meeting services. The assistance provided 13 may include but is not limited to advice concerning marketing 14 plans, business plans, accounting, and administration. 15 (2) “Local or regional economic development organization” 16 means a private, nonprofit organization, as recognized by the 17 internal revenue service, whose primary purposes are to develop 18 the economy of its area and to provide assistance to businesses 19 in that area. 20 (3) “Small business” means the same as defined in section 21 422.35, subsection 6, paragraph “c” . 22 c. Claims for the exemption under this subsection must be 23 filed with the assessor not later than February 1 of the year 24 for which the exemption is requested on forms to be prescribed 25 by the director of revenue. Upon the filing and allowance 26 of the claim, the claim shall be allowed on the property for 27 successive years without further filing as long as the property 28 continues to qualify for the exemption. When the property is 29 sold or transferred, the county recorder shall provide notice 30 of the transfer to the assessor. The notice shall describe the 31 property transferred and the name of the person to whom title 32 to the property is transferred. 33 Sec. 2. IMPLEMENTATION OF ACT. Section 25B.7 shall not 34 apply to the property tax exemption enacted in this Act. 35 -1- LSB 1804HH (2) 88 md/jh 1/ 2

H.F. 254 Sec. 3. APPLICABILITY. This Act applies to assessment years 1 beginning on or after January 1, 2020. 2 EXPLANATION 3 The inclusion of this explanation does not constitute agreement with 4 the explanation’s substance by the members of the general assembly. 5 This bill establishes a property tax exemption for property 6 owned or leased and operated by a local or regional economic 7 development organization, as defined in the bill, and used 8 solely as a business incubator. The bill defines “business 9 incubator” to mean a facility in which space is leased to small 10 businesses, as defined to mean the same as Code section 422.35, 11 and that provides shared services and business assistance 12 to such businesses to improve their chances of success. 13 The services provided may include but are not limited to 14 receptionist, copying, computer, telephone, secretarial, and 15 meeting services. The assistance provided may include but is 16 not limited to advice concerning marketing plans, business 17 plans, accounting, and administration. 18 The bill makes inapplicable Code section 25B.7. Code 19 section 25B.7 provides that for a property tax credit or 20 exemption enacted on or after January 1, 1997, if a state 21 appropriation made to fund the credit or exemption is not 22 sufficient to fully fund the credit or exemption, the political 23 subdivision shall be required to extend to the taxpayer only 24 that portion of the credit or exemption estimated by the 25 department of revenue to be funded by the state appropriation. 26 The bill applies to assessment years beginning on or after 27 January 1, 2020. 28 -2- LSB 1804HH (2) 88 md/jh 2/ 2