HF 2342 (LSB 6014YH (4) 91)

HOUSE FILE 2342

BY  SIECK, SIEGRIST, WILLIAMS, WOOD, C. JOHNSON, GOSA, and YOUNG

A BILL FOR

An Act providing for the future repeal of tax credits.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

DIVISION I
FUTURE REPEAL OF EXISTING TAX CREDITS

    Section 1.  Section 15.322, Code 2026, is amended to read as follows:
   15.322  Future repeal.
    Sections 15.315, 15.316, 15.317, 15.318, 15.319, 15.320, 15.321, and this section, are repealed July 1, 2039 January 1, 2032.
    Sec. 2.  Section 15.495, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  4.  This section is repealed on January 1, 2031.
    Sec. 3.  Section 15.496, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  3.  This section is repealed January 1, 2029.
    Sec. 4.  Section 15.507, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  4.  This section is repealed on January 1, 2029.
    Sec. 5.  Section 15.508, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  3.  This section is repealed January 1, 2030.
    Sec. 6.  Section 15.524, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  9.  This section is repealed January 1, 2031.
    Sec. 7.  Section 15.533, subsection 1, Code 2026, is amended to read as follows:
   1.  An eligible business that has entered into an agreement pursuant to section 15.532 may claim a tax credit in an amount equal to the product of twenty-five cents multiplied by the number of gallons of sustainable aviation fuel produced in this state from feedstock. The sustainable aviation fuel tax credit shall not be available for any sustainable aviation fuel produced before the 2026 calendar year or after the 2035 2031 calendar year.
    Sec. 8.  Section 15.535, Code 2026, is amended to read as follows:
   15.535  Future repeal.
   Sections 15.530, 15.531, 15.532, 15.533, 15.534, and this section are repealed January 1, 2037 2031.
    Sec. 9.  Section 15E.27, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  7.  This section is repealed January 1, 2032.
    Sec. 10.  Section 15E.52, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  14.  This section is repealed on January 1, 2028.
    Sec. 11.  Section 15E.305, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  6.  This section is repealed January 1, 2028.
    Sec. 12.  Section 16.81, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  7.  This section is repealed on January 1, 2028.
    Sec. 13.  Section 260E.5, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  7.  This section is repealed on January 1, 2028.
    Sec. 14.  Section 260G.4A, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  7.  This section is repealed on January 1, 2032.
    Sec. 15.  Section 260J.1, unnumbered paragraph 1, Code 2026, is amended to read as follows:
   In order to promote the creation of additional high-quality new jobs within the state, an agreement under section 260E.3 may include a provision for a supplemental new jobs credit from withholding from jobs created under the agreement. A This section is repealed January 1, 2028; however, until such time a provision in an agreement for which a supplemental credit from withholding is included shall provide for the following:
    Sec. 16.  Section 403.19A, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  4.  This section is repealed on January 1, 2029.
    Sec. 17.  NEW SECTION.  404A.7  Future repeal.
   This chapter is repealed January 1, 2030.
    Sec. 18.  Section 422.10B, Code 2026, is amended to read as follows:
   422.10B  Renewable chemical production tax credit.
   The taxes imposed under this subchapter, less the credits allowed under section 422.12, shall be reduced by a renewable chemical production tax credit allowed under section 15.319. This section is repealed January 1, 2041 2032.
    Sec. 19.  Section 422.11A, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  4.  This section is repealed January 1, 2028.
    Sec. 20.  Section 422.11L, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  8.  This section is repealed on January 1, 2029.
    Sec. 21.  Section 422.11S, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  10.  This section is repealed on January 1, 2030.
    Sec. 22.  Section 422.11W, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  5.  This section is repealed on January 1, 2030.
    Sec. 23.  Section 422.12, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  4.  This section is repealed January 1, 2032.
    Sec. 24.  Section 422.12A, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  6.  This section is repealed January 1, 2028.
    Sec. 25.  Section 422.12B, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  3.  This section is repealed January 1, 2029.
    Sec. 26.  Section 422.12C, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  5.  This section is repealed January 1, 2030.
    Sec. 27.  Section 422.12N, subsection 7, Code 2026, is amended to read as follows:
   7.  This section is repealed January 1, 2034 2031.
    Sec. 28.  Section 422.12P, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  7.  This section is repealed January 1, 2031.
    Sec. 29.  Section 422.33, subsection 25, Code 2026, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  d.  This subsection is repealed on January 1, 2030.
    Sec. 30.  Section 425.1, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  7.  This section is repealed January 1, 2031.
    Sec. 31.  Section 425.16, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  3.  This section is repealed January 1, 2032.
    Sec. 32.  NEW SECTION.  426.11  Future repeal.
   This chapter is repealed January 1, 2032.
    Sec. 33.  NEW SECTION.  476B.11  Future repeal.
   This chapter is repealed effective January 1, 2028.
    Sec. 34.  NEW SECTION.  476C.8  Future repeal.
   This chapter is repealed effective January 1, 2029.
    Sec. 35.  PRESERVATION OF EXISTING RIGHTS.
   1.  This division of this Act is not intended to and shall not limit, modify, or otherwise adversely affect any amount of tax credit issued, awarded, or allowed prior to January 1, 2032, nor shall it limit, modify, or otherwise adversely affect a taxpayer’s right to claim or redeem a tax credit issued, awarded, or allowed prior to January 1, 2032, including but not limited to any tax credit carryforward amount.
   2.  The repeal of a provision of law pursuant to this division of this Act shall not constitute grounds for rescission or modification of agreements entered into under those provisions of law, if any. Any agreement entered into prior to January 1, 2032, under a provision of law repealed in this division of this Act, shall remain in effect until it expires under its own terms, and shall be governed by the applicable provisions of law as they existed immediately prior to January 1, 2032.
    Sec. 36.  CORRESPONDING AMENDMENTS LEGISLATION.  Additional legislation is required to fully implement this division of this Act. The director of the department of revenue shall, in compliance with section 2.16, prepare draft legislation for submission to the legislative services agency, as necessary, to implement the repeal of the tax credits under this division of this Act and under other provisions of law.
DIVISION II
FUTURE REPEAL OF FUTURE TAX CREDIT PROGRAMS

    Sec. 37.  NEW SECTION.  422.3A  Future tax credit repeal.
   1.  For purposes of this section, “tax credit program” means any provision of law enacted by the general assembly that provides for an amount of money against the taxes imposed in this chapter, chapter 432, or in section 533.329.
   2.  Notwithstanding any other provision of law to the contrary, any tax credit program enacted by the general assembly that takes effect on or after January 1, 2027, is repealed on January 1 of the sixth year following the effective date of the tax credit program, unless another provision of the Code provides for an earlier repeal date.
   3.  The repeal of a tax credit program pursuant to subsection 2 is not intended to and shall not limit, modify, or otherwise adversely affect any amount of tax credit issued, awarded, or allowed prior to the effective date of the tax credit program repeal pursuant to subsection 2, nor shall it limit, modify, or otherwise adversely affect a taxpayer’s right to claim or redeem a tax credit issued, awarded, or allowed prior to the effective date of the tax credit program repeal pursuant to subsection 2, including but not limited to any tax credit carryforward amount.
   4.  The repeal of a tax credit program pursuant to subsection 2 shall not constitute grounds for rescission or modification of agreements entered into under the tax credit program, if any. Any agreement entered into under a tax credit program prior to the effective date of the repeal of the tax credit program under subsection 2 shall remain in effect until it expires under its own terms, and shall be governed by the tax credit program as it existed prior to its repeal pursuant to subsection 2.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill provides for the future repeal of certain existing state income and property tax credits, and provides for the future repeal of tax credits enacted by the general assembly in the future.
   DIVISION I —— FUTURE REPEAL OF EXISTING TAX CREDITS.  Division I repeals tax credits on a rolling basis over a five-year period beginning January 1, 2028, through January 1, 2032. The bill repeals the following tax credits that currently have no repeal date: the accelerated career education program job tax credit; the beginning farmer tax credit; the sales and use tax refunds under the major economic growth attraction program (MEGA program) and the business incentives for growth program (BIG program); the investment tax credit; the school tuition organization tax credit; the solar energy system tax credit; the innovation fund investment tax credit; the qualifying investment tax credits under the MEGA program and the BIG program; the wind energy production tax credit; the charitable conservation contribution tax credit; the new jobs credits from withholding available under the Iowa industrial new job training program; the research and development tax credit; the renewable energy tax credit; the targeted jobs withholding tax credit; the endow Iowa tax credit; the historic preservation tax credit; the new jobs tax credit; the emergency personnel and tuition textbook tax credits; the adoption tax credit; the earned income tax credit; the child and dependent care or early childhood development tax credit; the geothermal heat pump tax credit; the public safety officer moving expense tax credit; the homestead tax credit; the elderly and disabled property tax credit or reimbursement; and the agricultural land credit.
   The bill amends the repeal date of the renewable chemical production tax credit from January 1, 2039, to January 1, 2032, and of the sustainable aviation fuel tax credit from January 1, 2037, to January 1, 2031.
   The bill provides that the repeal of a tax credit shall not affect tax credits issued, awarded, or allowed prior to January 1, 2032, or affect a taxpayer’s ability to claim or redeem such tax credits, including but not limited to any tax credit carryforward amount, and further provides that the bill shall not constitute grounds for rescission or modification of agreements entered into for a tax credit, and that such agreements shall remain in effect until they expire under their own terms and shall be governed by the applicable provisions of law as they existed immediately prior to January 1, 2032. 
   The bill provides that additional legislation is required to fully implement the repeal of these tax credits and requires the director of the department of revenue to prepare draft legislation in compliance with Code section 2.16 for submission to the legislative services agency to implement the repeal of the tax credits.
   DIVISION II —— FUTURE REPEAL OF FUTURE TAX CREDIT PROGRAMS.  Division II provides that any tax credit program available against the individual or corporate income tax, the franchise tax, the insurance premiums tax, or the moneys and credits tax, enacted by the general assembly on or after January 1, 2027, is repealed after five years, unless another provision of law provides for an earlier repeal date.
   The bill provides that the repeal of a tax credit program pursuant to this provision shall not affect the tax credits or tax credit agreements entered into prior to the repeal of the tax credit program in the same manner as described above for the repeal of the existing tax credits.