Senate File 392 - Reprinted



                                       SENATE FILE       
                                       BY  COMMITTEE ON WAYS
                                           AND MEANS

                                       (SUCCESSOR TO SSB 1191)


    Passed Senate,  Date              Passed House, Date              
    Vote:  Ayes        Nays           Vote:  Ayes        Nays         
                 Approved                            

                                      A BILL FOR

  1 An Act relating to entities eligible to claim certain property=
  2    related tax credits.
  3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  4 TLSB 1892SV 81
  5 tm/gg/14

PAG LIN



  1  1    Section 1.  Section 15E.193B, subsection 5, Code 2005, is
  1  2 amended by adding the following new paragraph:
  1  3    NEW PARAGRAPH.  f.  If the eligible housing business is a
  1  4 partnership, S corporation, or limited liability company using
  1  5 low=income housing tax credits authorized under section 42 of
  1  6 the Internal Revenue Code to assist in the financing of the
  1  7 housing development, the name of any partner if the business
  1  8 is a partnership, a shareholder if the business is an S
  1  9 corporation, or a member if the business is a limited
  1 10 liability company and the amount designated as allowed under
  1 11 subsection 8.
  1 12    Sec. 2.  Section 15E.193B, subsection 6, paragraph a, Code
  1 13 2005, is amended to read as follows:
  1 14    a.  An eligible housing business may claim a tax credit up
  1 15 to a maximum of ten percent of the new investment which is
  1 16 directly related to the building or rehabilitating of a
  1 17 minimum of four single=family homes located in that part of a
  1 18 city or county in which there is a designated enterprise zone
  1 19 or one multiple dwelling unit building containing three or
  1 20 more individual dwelling units located in that part of a city
  1 21 or county in which there is a designated enterprise zone.  The
  1 22 new investment that may be used to compute the tax credit
  1 23 shall not exceed the new investment used for the first one
  1 24 hundred forty thousand dollars of value for each single=family
  1 25 home or for each unit of a multiple dwelling unit building
  1 26 containing three or more units.  The tax credit may be used to
  1 27 reduce the tax liability imposed under chapter 422, division
  1 28 II, III, or V, or chapter 432.  Any credit in excess of the
  1 29 tax liability for the tax year may be credited to the tax
  1 30 liability for the following seven years or until depleted,
  1 31 whichever occurs earlier.  If the business is a partnership, S
  1 32 corporation, limited liability company, or estate or trust
  1 33 electing to have the income taxed directly to the individual,
  1 34 an individual may claim the tax credit allowed.  The amount
  1 35 claimed by the individual shall be based upon the pro rata
  2  1 share of the individual's earnings of the partnership, S
  2  2 corporation, limited liability company, or estate or trust
  2  3 except as allowed for under subsection 8 when low=income
  2  4 housing tax credits authorized under section 42 of the
  2  5 Internal Revenue Code are used to assist in the financing of
  2  6 the housing development.
  2  7    Sec. 3.  Section 15E.193B, subsection 8, unnumbered
  2  8 paragraph 1, Code 2005, is amended to read as follows:
  2  9    The amount of the tax credits determined pursuant to
  2 10 subsection 6, paragraph "a", for each project shall be
  2 11 approved by the department of economic development.  The
  2 12 department shall utilize the financial information required to
  2 13 be provided under subsection 5, paragraph "e", to determine
  2 14 the tax credits allowed for each project.  In determining the
  2 15 amount of tax credits to be allowed for a project, the
  2 16 department shall not include the portion of the project cost
  2 17 financed through federal, state, and local government tax
  2 18 credits, grants, and forgivable loans.  Upon approving the
  2 19 amount of the tax credit, the department of economic
  2 20 development shall issue a tax credit certificate to the
  2 21 eligible housing business except when low=income housing tax
  2 22 credits authorized under section 42 of the Internal Revenue
  2 23 Code are used to assist in the financing of the housing
  2 24 development in which case the tax credit certificate may be
  2 25 issued to a partner if the business is a partnership, a
  2 26 shareholder if the business is an S corporation, or a member
  2 27 if the business is a limited liability company in the amounts
  2 28 designated by the eligible partnership, S corporation, or
  2 29 limited liability company.  An eligible housing business or
  2 30 the designated partner if the business is a partnership,
  2 31 designated shareholder if the business is an S corporation, or
  2 32 designated member if the business is a limited liability
  2 33 company, or transferee shall not claim the tax credit unless a
  2 34 tax credit certificate issued by the department of economic
  2 35 development is attached to the taxpayer's return for the tax
  3  1 year for which the tax credit is claimed.  The tax credit
  3  2 certificate shall contain the taxpayer's name, address, tax
  3  3 identification number, the amount of the tax credit, and other
  3  4 information required by the department of revenue.  The tax
  3  5 credit certificate shall be transferable if low=income housing
  3  6 tax credits authorized under section 42 of the Internal
  3  7 Revenue Code are used to assist in the financing of the
  3  8 housing development.  Tax credit certificates issued under
  3  9 this chapter may be transferred to any person or entity.
  3 10 Within ninety days of transfer, the transferee must submit the
  3 11 transferred tax credit certificate to the department of
  3 12 economic development along with a statement containing the
  3 13 transferee's name, tax identification number, and address, and
  3 14 the denomination that each replacement tax credit certificate
  3 15 is to carry and any other information required by the
  3 16 department of revenue.  Within thirty days of receiving the
  3 17 transferred tax credit certificate and the transferee's
  3 18 statement, the department of economic development shall issue
  3 19 one or more replacement tax credit certificates to the
  3 20 transferee.  Each replacement certificate must contain the
  3 21 information required to receive the original certificate and
  3 22 must have the same expiration date that appeared in the
  3 23 transferred tax credit certificate.  Tax credit certificate
  3 24 amounts of less than the minimum amount established by rule of
  3 25 the department of economic development shall not be
  3 26 transferable.  A tax credit shall not be claimed by a
  3 27 transferee under subsection 6, paragraph "a", until a
  3 28 replacement tax credit certificate identifying the transferee
  3 29 as the proper holder has been issued.
  3 30    Sec. 4.  Section 422.11D, subsection 2, Code 2005, is
  3 31 amended to read as follows:
  3 32    2.  An individual may claim a property rehabilitation tax
  3 33 credit allowed a partnership, limited liability company, S
  3 34 corporation, estate, or trust electing to have the income
  3 35 taxed directly to the individual.  The amount claimed by the
  4  1 individual shall be based upon the pro rata share of the
  4  2 individual's earnings of a partnership, limited liability
  4  3 company, S corporation, estate, or trust except when low=
  4  4 income housing tax credits authorized under section 42 of the
  4  5 Internal Revenue Code are used to assist in the financing of
  4  6 the housing development in which case the amount claimed by a
  4  7 partner if the business is a partnership, a shareholder if the
  4  8 business is an S corporation, or a member if the business is a
  4  9 limited liability company shall be based on the amounts
  4 10 designated by the eligible partnership, S corporation, or
  4 11 limited liability company.
  4 12 SF 392
  4 13 tm:rj/cc/26