House File 194 - Reprinted HOUSE FILE 194 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HF 4) (As Amended and Passed by the House February 16, 2011 ) A BILL FOR An Act providing for a reduction in the individual income 1 tax rates and including effective date and applicability 2 provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 HF 194 (3) 84 tw/sc/mb

H.F. 194 Section 1. Section 298.14, Code 2011, is amended to read as 1 follows: 2 298.14 School district income surtaxes. 3 1. a. For each fiscal year, the cumulative total of the 4 percents of surtax approved by the board of directors of a 5 school district and collected by the department of revenue 6 under sections 257.21 , 257.29 , and 298.2 , and the enrichment 7 surtax under section 442.15 , Code 1989, and an income surtax 8 collected by a political subdivision under chapter 422D , shall 9 not exceed twenty percent. 10 b. (1) Notwithstanding paragraph “a” , a board of directors 11 of a school district shall impose, and the department of 12 revenue shall collect, an enhanced cumulative income surtax 13 amount pursuant to this paragraph “b” . 14 (2) The enhanced cumulative income surtax shall be in the 15 following amounts for the following years: 16 (a) For 2012, for each surtax specified in paragraph “a” 17 that is imposed in 2011 and is still imposed in 2012, the 18 amount shall be one hundred twenty-five percent of the amount 19 generated by each surtax imposed by the school district in 20 2011. 21 (b) For 2013, for each surtax specified in paragraph “a” 22 that is imposed in 2011 and is still imposed in 2013, the 23 amount shall be one hundred fifteen percent of the amount 24 generated by each surtax imposed by the school district in 25 2011. 26 (c) For 2014, for each surtax specified in paragraph “a” 27 that is imposed in 2011 and is still imposed in 2014, the 28 amount shall be one hundred ten percent of the amount generated 29 by each surtax imposed by the school district in 2011. 30 (d) For 2015, for each surtax specified in paragraph 31 “a” that is imposed in 2011 and is still imposed in 2015, 32 the amount shall be one hundred five percent of the amount 33 generated by each surtax imposed by the school district in 34 2011. 35 -1- HF 194 (3) 84 tw/sc/mb 1/ 3

H.F. 194 (e) For 2016, for each surtax specified in paragraph “a” 1 that is imposed in 2011 and is still imposed in 2016, the 2 amount shall be the amount generated by each surtax imposed by 3 the school district in 2011. 4 (2A) The enhanced cumulative income surtax imposed 5 pursuant to this paragraph “b” shall not apply for purposes of 6 calculating the cumulative limitation described in paragraph 7 “a” . 8 (3) This paragraph “b” is repealed on June 30, 2016. 9 2. A school district income surtax fund is created in the 10 office of treasurer of state. Income surtaxes collected by 11 the department of revenue under sections 257.21 , 257.29 , and 12 298.2 and section 442.15 , Code 1989, shall be deposited in the 13 school district income surtax fund to the credit of each school 14 district. A separate accounting of each surtax, by school 15 district, shall be maintained. 16 3. The director of the department of administrative 17 services shall draw warrants in payment of the surtaxes 18 collected in each school district. Warrants shall be payable 19 in two installments to be paid on approximately the first day 20 of December and the first day of February following collection 21 of the taxes and shall be delivered to the respective school 22 districts. 23 Sec. 2. Section 422.5, subsection 1, paragraphs a through i, 24 Code 2011, are amended to read as follows: 25 a. On all taxable income from zero through one thousand 26 dollars, thirty-six twenty-eight hundredths of one percent. 27 b. On all taxable income exceeding one thousand dollars but 28 not exceeding two thousand dollars, seventy-two fifty-seven 29 hundredths of one percent. 30 c. On all taxable income exceeding two thousand dollars but 31 not exceeding four thousand dollars, two one and forty-three 32 ninety-four hundredths percent. 33 d. On all taxable income exceeding four thousand dollars but 34 not exceeding nine thousand dollars, four three and one-half 35 -2- HF 194 (3) 84 tw/sc/mb 2/ 3

H.F. 194 six-tenths percent. 1 e. On all taxable income exceeding nine thousand dollars 2 but not exceeding fifteen thousand dollars, six four and twelve 3 eighty-nine hundredths percent. 4 f. On all taxable income exceeding fifteen thousand dollars 5 but not exceeding twenty thousand dollars, six five and 6 forty-eight eighteen hundredths percent. 7 g. On all taxable income exceeding twenty thousand dollars 8 but not exceeding thirty thousand dollars, six five and 9 eight-tenths forty-four hundredths percent. 10 h. On all taxable income exceeding thirty thousand dollars 11 but not exceeding forty-five thousand dollars, seven six and 12 ninety-two thirty-three hundredths percent. 13 i. On all taxable income exceeding forty-five thousand 14 dollars, eight seven and ninety-eight eighteen hundredths 15 percent. 16 Sec. 3. EFFECTIVE DATE AND APPLICABILITY. This Act takes 17 effect January 1, 2012, and applies to tax years beginning on 18 or after that date. 19 -3- HF 194 (3) 84 tw/sc/mb 3/ 3