HF 254 (LSB 1804HH (2) 88)

HOUSE FILE 254

BY  SHIPLEY

A BILL FOR

An Act authorizing a property tax exemption for certain property used for shared services and business assistance and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 427.1, Code 2019, is amended by adding the following new subsection:
   NEW SUBSECTION.  42.  Business incubator property.
   a.  The property owned or leased and operated by a local or regional economic development organization and used solely as a business incubator. 
   b.  For purposes of this subsection:
   (1)  “Business incubator” means a facility in which space is leased to small businesses and that provides shared services and business assistance to such businesses to improve their chances of success. The services provided may include but are not limited to receptionist, copying, computer, telephone, secretarial, and meeting services. The assistance provided may include but is not limited to advice concerning marketing plans, business plans, accounting, and administration.
   (2)  “Local or regional economic development organization” means a private, nonprofit organization, as recognized by the internal revenue service, whose primary purposes are to develop the economy of its area and to provide assistance to businesses in that area.
   (3)  “Small business” means the same as defined in section 422.35, subsection 6, paragraph “c”.
   c.  Claims for the exemption under this subsection must be filed with the assessor not later than February 1 of the year for which the exemption is requested on forms to be prescribed by the director of revenue. Upon the filing and allowance of the claim, the claim shall be allowed on the property for successive years without further filing as long as the property continues to qualify for the exemption. When the property is sold or transferred, the county recorder shall provide notice of the transfer to the assessor. The notice shall describe the property transferred and the name of the person to whom title to the property is transferred.
    Sec. 2.  IMPLEMENTATION OF ACT.  Section 25B.7 shall not apply to the property tax exemption enacted in this Act.
    Sec. 3.  APPLICABILITY.  This Act applies to assessment years beginning on or after January 1, 2020.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill establishes a property tax exemption for property owned or leased and operated by a local or regional economic development organization, as defined in the bill, and used solely as a business incubator. The bill defines “business incubator” to mean a facility in which space is leased to small businesses, as defined to mean the same as Code section 422.35, and that provides shared services and business assistance to such businesses to improve their chances of success. The services provided may include but are not limited to receptionist, copying, computer, telephone, secretarial, and meeting services. The assistance provided may include but is not limited to advice concerning marketing plans, business plans, accounting, and administration. 
   The bill makes inapplicable Code section 25B.7. Code section 25B.7 provides that for a property tax credit or exemption enacted on or after January 1, 1997, if a state appropriation made to fund the credit or exemption is not sufficient to fully fund the credit or exemption, the political subdivision shall be required to extend to the taxpayer only that portion of the credit or exemption estimated by the department of revenue to be funded by the state appropriation.
   The bill applies to assessment years beginning on or after January 1, 2020.