S.F. 481 Section 1. NEW SECTION . 260C.41 High-demand occupation tax 1 credit —— agreement. 2 1. A high-demand occupation tax credit is allowed under this 3 section. The tax credit is allowed against the taxes imposed 4 in chapter 422, division II, as provided in section 422.11K, 5 to facilitate an increase in the number of Iowans prepared to 6 enter high-demand occupational fields. 7 2. In order to qualify for the tax credit, the taxpayer 8 must meet qualifications established by the board of directors 9 of the community college in which the taxpayer enrolled and 10 attended a course of study in accordance with this subsection. 11 At a minimum, the taxpayer must comply with all of the 12 following: 13 a. Be a resident of Iowa who enrolls in a community 14 college in a course of study which results in the community 15 college conferring a credential that qualifies the taxpayer 16 for a high-demand occupation. For purposes of this section, 17 “credential” means a postsecondary certificate, diploma, or 18 degree, but not more than an associate degree. For purposes of 19 this section, “high-demand occupation” means a job from the list 20 of regional high-demand jobs identified and maintained by a 21 community college for the community college region pursuant to 22 section 84A.1B, subsection 13A, as enacted by 2018 Iowa Acts, 23 chapter 1067, section 7. 24 b. Execute an agreement with the community college under 25 which the taxpayer maintains a grade point average of at least 26 two-point-five on a four-point grade scale, or the equivalent 27 if another grade scale is used, until the taxpayer is issued a 28 credential by the community college for successful completion 29 of a course of study that meets the requirements of paragraph 30 “a” . The agreement shall be for at least two years, but not 31 more than five years. 32 3. a. (1) If the taxpayer meets the terms of the agreement 33 entered into under subsection 2, the community college shall 34 submit to the department of revenue the total amount of tuition 35 -1- LSB 2303SV (3) 88 jm/jh 1/ 4

S.F. 481 and mandatory fees paid by the taxpayer in earning a credential 1 under this section. 2 (2) If, after executing the agreement in subsection 3 2, paragraph “b” , the taxpayer receives a credential for 4 a high-demand occupation that no longer qualifies as a 5 high-demand occupation, and the taxpayer otherwise meets the 6 terms of the agreement entered into under subsection 2, the 7 community college shall consider the taxpayer as meeting the 8 terms of the agreement in subsection 2, and shall submit the 9 tuition and fee information to the department of revenue as 10 provided for in subparagraph (1). 11 b. The department of revenue shall issue the tax credit 12 certificate to the taxpayer upon receipt of information 13 submitted to the department of revenue by a community college 14 in accordance with this subsection. 15 4. The tax credit shall equal the gross amount paid to the 16 community college for tuition and mandatory fees paid by the 17 taxpayer under the agreement up to a maximum of five thousand 18 dollars per calendar year. A taxpayer shall not be eligible 19 to claim more than ten thousand dollars of credit under this 20 section in the taxpayer’s lifetime. 21 5. a. To claim a tax credit under this section, a taxpayer 22 shall include one or more tax credit certificates with the 23 taxpayer’s tax return. 24 b. The tax credit certificate shall contain the taxpayer’s 25 name, address, tax identification number, the amount of the 26 credit, and any other information required by the department 27 of revenue. 28 c. The tax credit certificate, unless rescinded by the 29 department of revenue, shall be accepted by the department 30 of revenue as payment for taxes imposed in chapter 422, 31 division II, subject to any conditions or restrictions placed 32 by the department of revenue upon the face of the tax credit 33 certificate and subject to the limitations of this tax credit. 34 6. A tax credit in excess of the taxpayer’s liability for 35 -2- LSB 2303SV (3) 88 jm/jh 2/ 4

S.F. 481 the tax year is not refundable but may be credited to the tax 1 liability for the following five tax years or until depleted, 2 whichever is earlier. However, if the taxpayer enters into 3 active military service as a member of the Iowa army national 4 guard, the Iowa air national guard, the active military forces 5 of the United States, the army national guard of the United 6 States, or the air national guard of the United States, or 7 enrolls in an accredited public or private postsecondary 8 educational institution in this state to pursue further 9 education, the tax credit may be credited to the tax liability 10 for an additional two years or until depleted, whichever is 11 earlier. A tax credit shall not be carried back to a tax year 12 prior to the tax year in which the taxpayer redeems the tax 13 credit. A tax credit shall not be transferable to any other 14 person. 15 Sec. 2. NEW SECTION . 422.11K High-demand occupation tax 16 credit. 17 The taxes imposed under this division, less the credits 18 allowed under section 422.12, shall be reduced by a high-demand 19 occupation tax credit allowed under section 260C.41. 20 Sec. 3. APPLICABILITY. This Act applies to tax years 21 beginning on or after January 1, 2020. 22 EXPLANATION 23 The inclusion of this explanation does not constitute agreement with 24 the explanation’s substance by the members of the general assembly. 25 This bill provides for a high-demand occupation tax credit 26 to facilitate an increase in the number of Iowans prepared to 27 enter high-demand occupational fields. 28 To qualify, the taxpayer must enroll in and attend a course 29 of study at a community college which results in the community 30 college conferring a credential that qualifies the taxpayer 31 for a high-demand occupation. The bill defines “high-demand 32 occupation” as a job from the list of regional high-demand 33 jobs identified and maintained by a community college for the 34 community college region. 35 -3- LSB 2303SV (3) 88 jm/jh 3/ 4

S.F. 481 The taxpayer must also execute an agreement with the 1 community college for at least two years, but not more than 2 five years, under which the taxpayer maintains a grade point 3 average of at least 2.5 on a 4.0 grade scale. 4 If, after executing the agreement, the high-demand 5 occupation no longer qualifies as a high-demand occupation, and 6 the taxpayer otherwise meets the terms of the agreement, the 7 community college shall consider the taxpayer as meeting the 8 terms of the agreement. 9 If the taxpayer meets the terms of the agreement, the 10 community college submits to the department of revenue the 11 total amount of tuition and mandatory fees paid by the taxpayer 12 in earning a credential, and the department must issue the 13 tax credit certificate. The tax credit shall equal the gross 14 amount paid by the taxpayer to the community college for 15 tuition and mandatory fees. The maximum tax credit shall not 16 exceed $5,000 per calendar year, and the taxpayer shall not be 17 eligible to claim more than $10,000 of credit in the taxpayer’s 18 lifetime. 19 A tax credit in excess of the taxpayer’s liability for the 20 tax year is not refundable but may be credited to the personal 21 net income tax liability for the following five tax years or 22 until depleted, whichever is earlier. However, if the taxpayer 23 enters into active military service or enrolls in an accredited 24 public or private postsecondary institution in Iowa, the tax 25 credit may be credited to the tax liability for an additional 26 two years or until depleted, whichever is earlier. 27 The bill applies to tax years beginning on or after January 28 1, 2020. 29 -4- LSB 2303SV (3) 88 jm/jh 4/ 4