HF 543 (LSB 2161YH (2) 89)

HOUSE FILE 543

BY  BRINK

A BILL FOR

An Act creating a senior housing tax credit program, and including effective date and applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  16.37A  Senior housing tax credit.
   For purposes of this part, unless the context otherwise requires:
   1.  “Compliance period” means the period of fifteen years beginning with the first taxable year of the credit period.
   2.  “Department” means the department of revenue.
   3.  “Qualified development” means a senior housing development located in this state approved pursuant to section 16.37B.
   4.  “Senior housing development” means the development and construction of single-family or multi-residential housing for persons sixty-five years of age or older with an emphasis on safety, accessibility, and adaptability.
   5.  “Taxpayer” means an individual, a person, firm, corporation, or other entity that owns an interest, direct or indirect, in a qualified development who claims a tax credit under section 16.37C.
    Sec. 2.  NEW SECTION.  16.37B  Application —— review —— authorization.
   1.  The authority shall develop a system for the application, review, and authorization of senior housing tax credits awarded pursuant to this part and shall control the issuance of all tax credit certificates to taxpayers pursuant to this part.
   2.  Applications for senior housing tax credits shall be accepted during an application period established by the authority.
   3.  The authority may authorize the tax credit if all of the following conditions are satisfied:
   a.  The tax credit certificate is issued to a taxpayer who has an ownership interest in the qualified development.
   b.  The tax credit is necessary for the financial feasibility of the qualified development.
   c.  The amount of the tax credit allocated to an owner does not exceed thirty percent of the cost of the qualified development.
   d.  The qualified development is the subject of a recorded restrictive covenant requiring that, for the compliance period or for a longer period agreed to by the authority and the owner of the qualified development, the development shall be maintained and operated as a qualified development and shall be in compliance with Tit. VIII of the federal Civil Rights Act of 1968, as amended.
   4.  Upon review of an application, the authority may approve the qualified development for the tax credit program provided in section 16.37C, and issue a tax credit certificate stating the amount of the tax credit the authority determines the taxpayer is eligible to claim for each year of the credit period.
   5.  An applicant that is unsuccessful in receiving a tax credit award during an application period may make additional applications during subsequent application periods. Such applicants shall be required to submit a new application which shall be reviewed in the same manner as other applications in that application period.
    Sec. 3.  NEW SECTION.  16.37C  Senior housing tax credits —— limits.
   1.  A senior housing tax credit shall be allowed against the taxes imposed in chapter 422, subchapters II, III, and V, and in chapter 432, and against the moneys and credits tax imposed in section 533.329, in the amount determined by the authority pursuant to this part. Any tax credit in excess of the taxpayer’s liability for the tax year is not refundable but may be credited to the tax liability for the following five years or until depleted, whichever is earlier.
   2.  An individual may claim a tax credit under this section of a partnership, limited liability company, S corporation, estate, or trust electing to have income taxed directly to the individual. The amount claimed by the individual shall be based upon the pro rata share of the individual’s earnings from the partnership, limited liability company, S corporation, estate, or trust.
   3.  In any calendar year, the aggregate amount of all tax credits allocated by the authority shall not exceed fifteen million dollars, plus the sum of the following amounts:
   a.  The total of all unallocated tax credits, if any, for the preceding calendar years.
   b.  The total amount of all previously allocated tax credits that have been recaptured, canceled, or otherwise recovered by the authority.
   4.  a.  To claim a tax credit under this section, a taxpayer shall include one or more tax credit certificates issued by the authority with the taxpayer’s tax return.
   b.  The tax credit certificate shall contain the taxpayer’s name, address, tax identification number, the amount of the credit including the amount the authority determines the taxpayer is eligible to claim for each year of the credit period, the name of the qualified development, any other information required by the department of revenue, and a place for the name and tax identification number of a transferee and the amount of the tax credit being transferred.
   c.  Tax credit certificates issued under this section may be transferred to any person or entity. Within ninety days of transfer, the transferee shall submit the transferred tax credit certificate to the authority along with a statement containing the transferee’s name, tax identification number, and address, the denomination that each replacement tax credit certificate is to carry, and any other information required by the department of revenue.
   d.  Within thirty days of receiving the transferred tax credit certificate and the transferee’s statement, the authority shall issue one or more replacement tax credit certificates to the transferee. Each replacement tax credit certificate must contain the information required for the original tax credit certificate and must have the same expiration date that appeared on the transferred tax credit certificate. Tax credit certificate amounts of less than the minimum amount established by rule of the authority shall not be transferable.
   e.  A tax credit shall not be claimed by a transferee under this section until a replacement tax credit certificate identifying the transferee as the proper holder has been issued. The transferee may use the amount of the tax credit transferred against the taxes imposed in chapter 422, subchapters II, III, and V, and in chapter 432, and against the moneys and credits tax imposed in section 533.329, for any tax year the original transferor could have claimed the tax credit. Any consideration received for the transfer of the tax credit shall not be included as income under chapter 422, subchapters II, III, and V. Any consideration paid for the transfer of the tax credit shall not be deducted from income under chapter 422, subchapters II, III, and V.
    Sec. 4.  NEW SECTION.  16.37D  Compliance monitoring.
   The authority shall monitor and oversee compliance with sections 16.37A through 16.37C and shall report specific occurrences of noncompliance to the department.
    Sec. 5.  NEW SECTION.  16.37E  Rules.
   The authority and the department shall adopt rules pursuant to chapter 17A as necessary for the implementation and administration of this part.
    Sec. 6.  NEW SECTION.  422.10C  Senior housing tax credit.
   The taxes imposed under this subchapter, less the credits allowed under section 422.12, shall be reduced by a senior housing tax credit allowed under section 16.37C.
    Sec. 7.  Section 422.33, Code 2021, is amended by adding the following new subsection:
   NEW SUBSECTION.  17.  The taxes imposed under this subchapter shall be reduced a senior housing tax credit as allowed under section 16.37C.
    Sec. 8.  Section 422.60, Code 2021, is amended by adding the following new subsection:
   NEW SUBSECTION.  14.  The taxes imposed under this subchapter shall be reduced by a senior housing tax credit as allowed under section 16.37C.
    Sec. 9.  NEW SECTION.  432.12N  Senior housing tax credit.
   The taxes imposed under this chapter shall be reduced by a senior housing tax credit allowed under section 16.37C.
    Sec. 10.  Section 533.329, subsection 2, Code 2021, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  l.  The moneys and credits tax imposed under this section shall be reduced by a senior housing tax credit allowed under section 16.37C.
    Sec. 11.  CODE EDITOR DIRECTIVE.  The Code editor shall designate sections 16.37A through 16.37E, as enacted by this Act, as a new part within chapter 16, subchapter VII, and may redesignate the new and preexisting parts, replace references to sections 16.37A through 16.37E with references to the new part, and correct internal references as necessary, including references in subchapter or part headnotes.
    Sec. 12.  EFFECTIVE DATE.  This Act takes effect January 1, 2022.
    Sec. 13.  APPLICABILITY.  This Act applies to tax years beginning on or after January 1, 2022.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill creates a senior housing tax credit program available against the individual and corporate income taxes, franchise tax, insurance premium tax, and moneys and credits tax.
   The bill requires the Iowa finance authority (authority) to develop a system for the application, review, and authorization of senior housing tax credits. A tax credit may be claimed by a taxpayer for a “qualified development” defined to mean a senior housing project located in this state approved by the authority. The bill defines “senior housing project” to mean the development and construction of single-family or multiresidential housing for persons 65 years of age or older with an emphasis on safety, accessibility, and adaptability.
   A senior housing tax credit may be authorized by the authority if all of the following apply: the tax credit is issued to a taxpayer who has an ownership interest in the qualified development; the tax credit is necessary for the financial feasibility of the qualified development; the amount of the tax credit allocated to an owner does not exceed 30 percent of the cost of the qualified development; and the qualified development is the subject of a recorded restrictive covenant requiring the qualified development be maintained and operated as a qualified development for a compliance period of 15 years.
   The amount of a senior housing tax credit award is determined by the authority and any credit in excess of the taxpayer’s liability for the tax year is not refundable but may be credited to the tax liability for the following five years.
   In any calendar year, the bill limits the aggregate amount of the tax credit to $15 million plus the sum of the total of unallocated tax credits from the preceding calendar year and the previously allocated tax credits that have been canceled or recaptured.
   A taxpayer shall claim the credit by including one or more tax credit certificates issued by the authority with the taxpayer’s return. The bill allows a tax credit certificate to be transferred to any person or entity. The bill requires the transferee to submit the transferred tax credit certificate to the authority within 90 days of the transfer, and requires the authority to issue a replacement tax credit certificate within 30 days of receiving the transferred tax credit certificate.
   The bill takes effect January 1, 2022, and applies to tax years on or after that date.