House File 3 - Introduced HOUSE FILE 3 BY BOSSMAN A BILL FOR An Act permitting businesses’ new onsite daycare facilities or 1 businesses’ expansion of existing onsite daycare facilities 2 to qualify as projects under the high quality jobs program, 3 and making penalties applicable. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 1167YH (1) 89 ko/jh
H.F. 3 Section 1. NEW SECTION . 15.329A Eligible business —— onsite 1 daycare facilities. 2 1. As used in this section, unless the context otherwise 3 requires: 4 a. “Child” or “children” means a person or persons twelve 5 years of age or younger. 6 b. “Child care” means the care, supervision, and guidance of 7 a child or children by a person other than the child’s parent, 8 guardian, or custodian. 9 c. “Project completion” means the first date upon which the 10 business’s onsite daycare facility begins offering child care 11 for the business’s employees’ children. 12 2. Notwithstanding section 15.327, subsection 20, the 13 authority may provide tax incentives or project completion 14 assistance under this part to a business for a project that 15 involves a new onsite child care facility, or the expansion of 16 an existing onsite child care facility, that offers low-cost 17 child care for the business’s employees. 18 3. Notwithstanding section 15.329, subsection 1, paragraphs 19 “c” and “g” , the authority may provide tax incentives or 20 project completion assistance under this part to a business 21 for a project pursuant to this section if the project creates 22 or retains jobs that will pay a percent of the qualifying 23 wage threshold as determined pursuant to rules adopted by the 24 authority. 25 4. Notwithstanding section 15.329, subsection 1, paragraph 26 “e” , the authority may, pursuant to rules adopted by the 27 authority, determine alternative metrics, other than the fiscal 28 impact ratio, to qualify a business to be eligible for tax 29 incentives or project completion assistance for a project under 30 this section. 31 5. Notwithstanding section 15.329, subsection 3, the 32 authority shall consider a variety of factors, including but 33 not limited to the following, in determining the eligibility 34 of a business to participate in the program pursuant to this 35 -1- LSB 1167YH (1) 89 ko/jh 1/ 7
H.F. 3 section: 1 a. The quality of the jobs to be created or retained. 2 In rating the quality of the jobs, the authority shall 3 place greater emphasis on those jobs that are full-time or 4 career-type positions, that provide comprehensive health 5 benefits, and that pay a wage equal to or higher than similar 6 jobs within a twenty-five-mile radius of the proposed project. 7 b. The impact of the proposed project on other businesses 8 in competition with the business’s proposed project. The 9 authority shall make a good-faith effort to identify existing 10 child care providers in competition with the business’s 11 proposed project. The authority shall make a good-faith effort 12 to determine the probability that the proposed tax incentives 13 or project completion assistance will displace workers at 14 existing child care providers. In determining the impact 15 on child care providers in competition with the business’s 16 proposed project, jobs created or retained as a result of 17 similar jobs being displaced elsewhere in a twenty-five-mile 18 radius shall not be considered direct jobs created or retained. 19 c. The economic impact to the state of the proposed project. 20 In measuring the economic impact, the authority shall place 21 greater emphasis on projects that meet one or more of the 22 following conditions: 23 (1) Are located in an economically distressed area. For 24 purposes of this section, “economically distressed area” means 25 a county that ranks among the bottom thirty-three of all Iowa 26 counties, as measured by one of the following: 27 (a) Average monthly unemployment level for the most recent 28 twelve-month period. 29 (b) Average annualized unemployment level for the most 30 recent five-year period. 31 (2) Will have the capacity to care for twenty or more 32 children. 33 (3) Are located in an area that has an inadequate number 34 of existing child care providers based on the population of 35 -2- LSB 1167YH (1) 89 ko/jh 2/ 7
H.F. 3 children in the area. 1 (4) Will provide child care to a business’s employees at a 2 low-cost rate as determined pursuant to rules adopted by the 3 authority. 4 6. If a business that is approved to receive tax incentives 5 or project completion assistance under this section closes or 6 reduces the capacity of the child care facility for which the 7 tax incentives or project completion assistance was received, 8 the authority shall have the discretion to reduce or eliminate 9 some or all of the tax incentives or project completion 10 assistance, and the business may be subject to repayment of 11 all or a portion of the tax incentives or project completion 12 assistance that the business has received. 13 7. a. A business that is awarded tax incentives pursuant 14 to this section shall be entitled to a refund of the sales 15 and use taxes paid under chapter 423 for gas, electricity, 16 water, or sewer utility services, goods, wares, or merchandise, 17 or on services rendered, furnished, or performed to or for a 18 contractor or subcontractor and used in the fulfillment of a 19 written contract relating to the construction or equipping 20 of a child care facility that is part of the project of the 21 eligible business. Taxes attributable to intangible property, 22 furniture, and furnishings shall not be refunded. 23 b. To receive a refund, a claim shall be filed by the 24 eligible business with the department as follows: 25 (1) The contractor or subcontractor shall state under oath, 26 on forms provided by the department, the amount of the sales 27 of goods, wares, or merchandise, or the services rendered, 28 furnished, or performed, including gas, electric, water, and 29 sewer utility services upon which sales or use tax has been 30 paid prior to project completion, and shall file the forms with 31 the eligible business before final settlement is made between 32 the business and the contractor or subcontractor. 33 (2) The eligible business shall, not more than one year 34 after project completion, make application to the department 35 -3- LSB 1167YH (1) 89 ko/jh 3/ 7
H.F. 3 for any refund of the amount of the sales and use taxes paid 1 pursuant to chapter 423 upon any sales of goods, wares, or 2 merchandise, or the services rendered, furnished, or performed, 3 including gas, electric, water, and sewer utility services 4 prior to project completion. The application shall be made in 5 the manner and upon forms to be provided by the department. 6 The department shall audit the claim and, if approved, issue 7 a warrant to the eligible business in the amount of the sales 8 or use tax approved by the department. A claim filed by an 9 eligible business in accordance with this subsection shall not 10 be denied by reason of a limitation provision set forth in 11 chapter 421 or 423. 12 (3) The eligible business shall inform the department of 13 revenue of the project completion in writing within two weeks 14 of the project completion. 15 (4) A contractor or subcontractor who willfully makes a 16 false report of the sales or tax paid under the provisions of 17 this subsection commits a simple misdemeanor and is liable for 18 the payment of the sales and use tax and any applicable penalty 19 and interest. 20 8. The authority shall adopt rules pursuant to chapter 17A 21 as necessary to administer this section. 22 9. The department of revenue may adopt rules pursuant to 23 chapter 17A as necessary to administer this section. 24 EXPLANATION 25 The inclusion of this explanation does not constitute agreement with 26 the explanation’s substance by the members of the general assembly. 27 This bill permits businesses’ new onsite daycare facilities 28 or businesses’ expansion of existing onsite daycare facilities 29 to qualify as projects under the high quality jobs program, and 30 makes penalties applicable. 31 The bill permits the economic development authority 32 (authority) to provide tax incentives (incentives) or project 33 completion assistance (assistance) under the high quality jobs 34 program (program) to a business for a project that involves a 35 -4- LSB 1167YH (1) 89 ko/jh 4/ 7
H.F. 3 new onsite child care facility or the expansion of an existing 1 onsite facility that offers low-cost child care for the 2 business’s employees. The authority may provide incentives 3 or assistance under the program to a business for a project 4 that creates or retains jobs that will pay a percent of the 5 qualifying wage threshold as determined pursuant to rules 6 adopted by the authority. The bill permits the authority, 7 pursuant to rules adopted by the authority, to determine 8 metrics to qualify a business to be eligible for the program. 9 In determining the eligibility of a business’s project under 10 the program, the bill requires the authority to consider the 11 quality of the jobs to be created or retained, with an emphasis 12 placed on jobs that are full-time or career-type positions, 13 that provide comprehensive health benefits, and that pay wages 14 equal to or higher than similar jobs within a 25-mile radius 15 of the business’s proposed project. The authority is also 16 required to consider the impact of the proposed project on 17 other child care providers in competition with the proposed 18 project. 19 The authority must make a good-faith effort to identify 20 existing child care providers in competition with the 21 business’s proposed project and the probability that the 22 proposed project will displace employees of the existing child 23 care providers. Jobs created or retained by the proposed 24 project as a result of similar jobs being displaced in a 25 25-mile radius from the business cannot be considered by the 26 authority as jobs created or retained. 27 The bill also requires the authority to consider the 28 economic impact of the proposed project on the state. In 29 measuring economic impact, the authority must place greater 30 emphasis on projects that are located in economically 31 distressed areas, that will have the capacity to care for 32 20 or more children, that are located in areas that have an 33 inadequate number of existing child care providers, and that 34 will provide child care to the business’s employees at a 35 -5- LSB 1167YH (1) 89 ko/jh 5/ 7
H.F. 3 low-cost rate as determined pursuant to rules adopted by the 1 authority. The bill defines “economically distressed area” as 2 a county that ranks among the bottom 33 of all Iowa counties, 3 as measured by either the average monthly unemployment level 4 for the most recent 12-month period, or the average annualized 5 unemployment level for the most recent five-year period. 6 If a business that is approved by the authority to receive 7 incentives or assistance for its project either closes or 8 reduces the capacity of the child care facility for which the 9 incentives or assistance was received, the authority has the 10 discretion to reduce or eliminate some or all of the incentives 11 or assistance, and the business may be subject to repayment of 12 all or a portion of the incentives or assistance that it has 13 received. 14 A business that is awarded tax incentives for a child care 15 facility is entitled to a refund of the sales and use taxes 16 paid under Code chapter 423 for gas, electricity, water, or 17 sewer utility services, goods, wares, or merchandise, or 18 on services rendered, furnished, or performed to or for a 19 contractor or subcontractor and used in the fulfillment of a 20 written contract relating to the construction or equipping 21 of a child care facility that is part of the project of the 22 eligible business. Taxes attributable to intangible property, 23 furniture, and furnishings cannot be refunded. The process 24 by which a business may receive a refund of the sales and use 25 taxes paid is outlined in the bill. A business that is awarded 26 tax incentives for a child care facility may also be eligible 27 for a value-added property tax exemption pursuant to Code 28 section 15.332. 29 A contractor or subcontractor who willfully makes a false 30 report of sales and use taxes paid under the provisions of the 31 bill commits a simple misdemeanor and is liable for the payment 32 of the taxes and any applicable penalties and interest. A 33 simple misdemeanor is punishable by confinement for no more 34 than 30 days or a fine of at least $105 but not more than $855 35 -6- LSB 1167YH (1) 89 ko/jh 6/ 7
H.F. 3 or by both. 1 The bill directs the authority to adopt rules as necessary 2 to administer the provisions of the bill. The bill allows the 3 department of revenue to adopt rules as necessary to administer 4 the provisions of the bill. 5 -7- LSB 1167YH (1) 89 ko/jh 7/ 7