HF 682 (LSB 1854YH (3) 91)

HOUSE FILE 682

BY  COOLING, WILBURN, JAMES, LEVIN, B. MEYER, KONFRST, MATSON, KRESSIG, BAGNIEWSKI, MADISON, CROKEN, R. JOHNSON, AMOS JR., SRINIVAS, EHLERT, OLSON, SCHOLTEN, WESSEL-KROESCHELL, and NIELSEN

A BILL FOR

An Act relating to the recapture of tax expenditures and disbursed by departments of the state to businesses that violate child labor laws.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  15K.1  Recapture of tax expenditures for child labor violations.
   1.  As used in this chapter:
   a.  “Business” means the same as a person as defined in section 4.1.
   b.  “Proceeds” means the same as noncash and cash proceeds as defined in section 554.9102.
   c.  “Tax expenditure” means the same as defined in section 2.48, subsection 1.
   2.  Notwithstanding any other provision of law to the contrary, beginning on or after July 1, 2025, as a condition of authorizing tax expenditures to a business under any of the programs administered by a department of the state, the value of the tax expenditures authorized by the department shall be subject to recapture by the department administering the tax expenditure if the business, or a contractor, subcontractor, or other third party of the business providing services to the business in the business’s facility, has violated state or federal child labor laws under chapter 92 or the federal Fair Labor Standards Act of 1938.
   3.  The business shall notify the administering department of the violation within thirty days of the ending of the time period to contest or appeal the violation.
   4.  The repayment or recapture of tax expenditures pursuant to this chapter shall be accomplished in the same manner as provided in section 15.330, 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 relates to the recapture of tax expenditures disbursed by departments of the state to businesses that violate child labor laws. The bill defines “tax expenditure” to mean the same as defined in Code section 2.48, which includes tax credits, exemptions, deductions, and rebates as well as sales tax refunds.
   Beginning on or after July 1, 2025, as a condition of authorizing tax incentives to a business under any of the programs administered by a department of the state, the value of the tax expenditure authorized shall be subject to recapture by the department if the business, or a contractor, subcontractor, or other third party of the business providing services to the business in the business’s facility, violated state or federal child labor laws under Code chapter 92 or the federal Fair Labor Standards Act of 1938.
   The bill requires the business to notify the administering department of the violation within 30 days of the ending of the time period to contest or appeal the violation.
   The bill specifies the repayment or recapture of tax expenditures pursuant to the bill shall be accomplished in the same manner as provided in Code section 15.330(2). The repayment of incentives pursuant to that Code section is considered a tax payment due and payable to the department of revenue, and the failure to make such a repayment may be treated by the department of revenue in the same manner as a failure to pay the tax shown due or required to be shown due. In addition, a county may take action to recover the value of property taxes not collected as a result of a tax exemption provided to the business.