House File 2443 - Reprinted HOUSE FILE 2443 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HF 2412) (SUCCESSOR TO HSB 612) (As Amended and Passed by the House April 6, 2016 ) A BILL FOR An Act relating to the programs and duties of the economic 1 development authority by making changes relative to the use 2 of life cycle cost analyses, by making technical changes 3 related to the high quality jobs program, by making changes 4 relative to authority assistance for certain federal small 5 business programs, by allowing counties, cities, and the 6 authority to amend certain economic development enterprise 7 zones agreements, and by making changes to the historic 8 preservation and cultural and entertainment district tax 9 credit, including transferring administrative oversight of 10 the tax credit from the department of cultural affairs to 11 the economic development authority, and including effective 12 date provisions. 13 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 14 HF 2443 (3) 86 aw/sc/md

H.F. 2443 DIVISION I 1 LIFE CYCLE COST ANALYSES 2 Section 1. Section 470.1, Code 2016, is amended by adding 3 the following new subsection: 4 NEW SUBSECTION . 01. “Addition” means new construction equal 5 to or greater than twenty thousand square feet of usable floor 6 space that is heated or cooled by a mechanical or electrical 7 system and is joined to an existing facility. 8 Sec. 2. Section 470.1, subsections 6, 7, and 10, Code 2016, 9 are amended to read as follows: 10 6. “Facility” means a building having twenty thousand square 11 feet or more of usable floor space that is heated or cooled 12 by a mechanical or electrical system or any building, system, 13 or physical operation which consumes more than forty thousand 14 British thermal units (BTUs) per square foot per year . 15 7. “Initial cost” means the moneys required for the capital 16 construction or renovation of a facility or the construction 17 of an addition . 18 10. “Renovation” means a project where additions or 19 alterations , that are not additions, to an existing facility 20 exceed fifty percent of the value of a facility and will affect 21 an energy system. 22 Sec. 3. Section 470.2, Code 2016, is amended to read as 23 follows: 24 470.2 Policy —— analysis required. 25 The general assembly declares that energy management is of 26 primary importance in the design of publicly owned facilities. 27 Commencing January 1, 1980 On or after the effective date of 28 this division of this Act , a public agency responsible for the 29 construction or renovation of a facility or the construction of 30 an addition shall, in a design begun after that date, include 31 as a design criterion the requirement that a life cycle cost 32 analysis be conducted for the facility. The objectives of the 33 life cycle cost analysis are to optimize energy efficiency at 34 an acceptable life cycle cost. The life cycle cost analysis 35 -1- HF 2443 (3) 86 aw/sc/md 1/ 17

H.F. 2443 shall meet the requirements of section 470.3 . 1 Sec. 4. Section 470.3, subsection 2, Code 2016, is amended 2 to read as follows: 3 2. A public agency or a person preparing a life cycle cost 4 analysis for a public agency shall consider the methods and 5 analytical models provided by the authority and available 6 through the commissioner, which are suited to the purpose 7 for which the project is intended. Within sixty days of 8 final selection of a design architect or engineer, a public 9 agency, which is also a state agency under section 7D.34 , shall 10 notify the commissioner and the authority of the methodology 11 to be used to perform the life cycle cost analysis, on forms 12 provided by the authority use the methodology set forth in the 13 guidelines established, by rule, by the commissioner . 14 Sec. 5. Section 470.4, Code 2016, is amended to read as 15 follows: 16 470.4 Analysis approved. 17 The life cycle cost analysis shall be approved by the public 18 agency before contracts for the construction or renovation 19 of a facility or the construction of an addition are let. A 20 public agency may accept a facility design and shall meet 21 the requirements of this chapter if the design meets the 22 operational requirements of the agency and provides the optimum 23 life cycle cost. The public agency shall retain a copy of the 24 life cycle cost analysis and a statement justifying a design 25 decision both of which shall be available for public inspection 26 at reasonable hours. 27 Sec. 6. Section 470.6, Code 2016, is amended to read as 28 follows: 29 470.6 Restriction on use of public funds. 30 Public funds shall not be used for the construction or 31 renovation of a facility or the construction of an addition 32 unless the design for the work is prepared in accordance with 33 this chapter and the actual construction or renovation of 34 the facility or the construction of the addition meets the 35 -2- HF 2443 (3) 86 aw/sc/md 2/ 17

H.F. 2443 requirements of the design. 1 Sec. 7. Section 470.7, Code 2016, is amended to read as 2 follows: 3 470.7 Life cycle cost analysis —— approval. 4 1. The public agency responsible for the new construction 5 or renovation of a public facility or the construction of an 6 addition to a public facility shall submit a copy of the life 7 cycle cost analysis for review by the commissioner who shall 8 consult with the authority. If the public agency is also a 9 state agency under section 7D.34 , comments by the authority 10 or the commissioner, including any recommendation for changes 11 in the analysis, shall, within thirty days of receipt of the 12 analysis, be forwarded in writing to the public agency. If 13 either the authority or the commissioner disagrees with any 14 aspects of the life cycle cost analysis, the public agency 15 affected shall timely respond in writing to the commissioner 16 and the authority. The response shall indicate whether the 17 agency intends to implement the recommendations and, if the 18 agency does not intend to implement them, the public agency 19 shall present its reasons. The reasons may include but are 20 not limited to a description of the purpose of the facility or 21 renovation, preservation of historical architectural features, 22 architectural and site considerations, and health and safety 23 concerns. 24 2. Within thirty days of receipt of the response of the 25 public agency affected, the authority, the commissioner, or 26 both, shall notify in writing the public agency affected of 27 the authority’s, the commissioner’s, or both’s agreement 28 or disagreement with the response. In the event of a 29 disagreement, the authority, the commissioner, or both, shall 30 at the same time transmit the notification of disagreement 31 with response and related papers to the executive council 32 for resolution pursuant to section 7D.34 . The life cycle 33 cost analysis process, including submittal and approval, and 34 implementation exemption requests pursuant to section 470.8 , 35 -3- HF 2443 (3) 86 aw/sc/md 3/ 17

H.F. 2443 shall be completed prior to the letting of contracts for the 1 construction or renovation of a facility or the construction 2 of an addition . 3 Sec. 8. Section 470.8, Code 2016, is amended to read as 4 follows: 5 470.8 Life cycle cost analysis —— implementation and 6 exemptions. 7 1. The public agency responsible for the new construction 8 or renovation of a public facility or the construction of an 9 addition shall implement the recommendations of the life cycle 10 cost analysis. 11 2. The commissioner shall adopt rules for the 12 implementation and administration of the life cycle cost 13 analysis. The commissioner, in consultation with the director, 14 shall, by rule, develop criteria to exempt facilities from 15 the implementation requirements of this section . Using the 16 criteria, the commissioner, in cooperation with the director, 17 shall exempt facilities on a case by case case-by-case basis. 18 Factors to be considered when developing the exemption criteria 19 shall include, but not be limited to, a description of the 20 purpose of the facility or renovation, the preservation 21 of historical architectural features, site considerations, 22 and health and safety concerns. The commissioner and the 23 director shall grant or deny a request for exemption from the 24 requirements of this section within thirty days of receipt of 25 the request. 26 Sec. 9. EFFECTIVE UPON ENACTMENT. This division of this 27 Act, being deemed of immediate importance, takes effect upon 28 enactment. 29 DIVISION II 30 HIGH QUALITY JOBS PROGRAM —— DEFINITION 31 Sec. 10. Section 15.333, subsection 2, unnumbered paragraph 32 1, Code 2016, is amended to read as follows: 33 For purposes of this section , “new investment directly 34 related to new jobs created by the project” investment” means the 35 -4- HF 2443 (3) 86 aw/sc/md 4/ 17

H.F. 2443 cost of machinery and equipment, as defined in section 427A.1, 1 subsection 1 , paragraphs “e” and “j” , purchased for use in the 2 operation of the eligible business, the purchase price of which 3 has been depreciated in accordance with generally accepted 4 accounting principles, the purchase price of real property and 5 any buildings and structures located on the real property, and 6 the cost of improvements made to real property which is used 7 in the operation of the eligible business. “New investment 8 directly related to new jobs created by the project” investment” 9 also means the annual base rent paid to a third-party developer 10 by an eligible business for a period not to exceed ten years, 11 provided the cumulative cost of the base rent payments for that 12 period does not exceed the cost of the land and the third-party 13 developer’s costs to build or renovate the building for the 14 eligible business. The eligible business shall enter into a 15 lease agreement with the third-party developer for a minimum 16 of five years. If, however, within five years of purchase, 17 the eligible business sells, disposes of, razes, or otherwise 18 renders unusable all or a part of the land, buildings, or other 19 existing structures for which tax credit was claimed under this 20 section , the tax liability of the eligible business for the 21 year in which all or part of the property is sold, disposed of, 22 razed, or otherwise rendered unusable shall be increased by one 23 of the following amounts: 24 Sec. 11. Section 15.333A, subsection 2, unnumbered 25 paragraph 1, Code 2016, is amended to read as follows: 26 For purposes of this section , “new investment directly 27 related to new jobs created by the project” investment” means the 28 cost of machinery and equipment, as defined in section 427A.1, 29 subsection 1 , paragraphs “e” and “j” , purchased for use in the 30 operation of the eligible business, the purchase price of which 31 has been depreciated in accordance with generally accepted 32 accounting principles, the purchase price of real property and 33 any buildings and structures located on the real property, and 34 the cost of improvements made to real property which is used 35 -5- HF 2443 (3) 86 aw/sc/md 5/ 17

H.F. 2443 in the operation of the eligible business. “New investment 1 directly related to new jobs created by the project” investment” 2 also means the annual base rent paid to a third-party developer 3 by an eligible business for a period not to exceed ten years, 4 provided the cumulative cost of the base rent payments for that 5 period does not exceed the cost of the land and the third-party 6 developer’s costs to build or renovate the building for the 7 eligible business. The eligible business shall enter into a 8 lease agreement with the third-party developer for a minimum 9 of five years. If, however, within five years of purchase, 10 the eligible business sells, disposes of, razes, or otherwise 11 renders unusable all or a part of the land, buildings, or other 12 existing structures for which tax credit was claimed under this 13 section , the tax liability of the eligible business for the 14 year in which all or part of the property is sold, disposed of, 15 razed, or otherwise rendered unusable shall be increased by one 16 of the following amounts: 17 DIVISION III 18 FEDERAL SMALL BUSINESS PROGRAMS —— AUTHORITY ASSISTANCE 19 Sec. 12. Section 15.411, subsection 4, paragraphs a, b, and 20 c, Code 2016, are amended to read as follows: 21 a. (1) The authority shall establish and administer an 22 outreach program for purposes of assisting businesses with 23 applications to the federal small business innovation research 24 and small business technology transfer programs. 25 (2) The goals of this assistance are to increase the number 26 of successful phase II small business innovation research grant 27 and contract proposals in the state, increase the amount of 28 such grant and contract funds awarded in the state, stimulate 29 subsequent investment by industry, venture capital, and other 30 sources, and encourage businesses to commercialize promising 31 technologies. 32 b. (1) In administering the program, the authority may 33 provide technical and financial assistance to businesses. 34 Financial assistance provided pursuant to this subsection 35 -6- HF 2443 (3) 86 aw/sc/md 6/ 17

H.F. 2443 shall may be awarded to a business in an amount not to exceed 1 twenty-five one hundred thousand dollars to for any single 2 business individual federal award under this subsection . 3 (2) The authority may require successful applicants to 4 repay the amount of financial assistance received, but shall 5 not require unsuccessful applicants to repay such assistance. 6 Any moneys repaid pursuant to this subsection may be used to 7 provide financial assistance to other applicants. 8 c. The authority may also provide financial assistance 9 for purposes of helping businesses meet the matching funds 10 requirements of the federal small business innovation research 11 and small business technology transfer programs. 12 DIVISION IV 13 ENTERPRISE ZONES 14 Sec. 13. 2014 Iowa Acts, chapter 1130, section 43, 15 subsection 1, is amended to read as follows: 16 1. On or after the effective date of this division of this 17 Act, a city or county shall not create an enterprise zone under 18 chapter 15E, division XVIII, or enter into a new agreement or 19 amend an existing agreement under chapter 15E, division XVIII. 20 A city or county and the economic development authority, with 21 the approval of the economic development authority board, may 22 amend an agreement for compliance reasons if the amendment 23 does not increase the amount of incentives awarded under the 24 agreement. 25 DIVISION V 26 HISTORIC PRESERVATION AND CULTURAL AND ENTERTAINMENT DISTRICT 27 TAX CREDIT 28 Sec. 14. Section 404A.1, Code 2016, is amended by adding the 29 following new subsection: 30 NEW SUBSECTION . 01. “Authority” means the economic 31 development authority created in section 15.105. 32 Sec. 15. Section 404A.2, subsection 1, Code 2016, is amended 33 to read as follows: 34 1. An eligible taxpayer who has entered into an agreement 35 -7- HF 2443 (3) 86 aw/sc/md 7/ 17

H.F. 2443 under section 404A.3, subsection 3 , is eligible to receive a 1 historic preservation and cultural and entertainment district 2 tax credit in an amount equal to twenty-five percent of 3 the qualified rehabilitation expenditures of a qualified 4 rehabilitation project that are specified in the agreement. 5 Notwithstanding any other provision of this chapter or any 6 provision in the agreement to the contrary, the amount of 7 the tax credits shall not exceed twenty-five percent of the 8 final qualified rehabilitation expenditures verified by the 9 department authority pursuant to section 404A.3, subsection 5 , 10 paragraph “c” . 11 Sec. 16. Section 404A.2, Code 2016, is amended by adding the 12 following new subsection: 13 NEW SUBSECTION . 2A. a. Tax credit certificates issued 14 under section 404A.3 may be transferred to any person. Within 15 ninety days of transfer, the transferee shall submit the 16 transferred tax credit certificate to the department of revenue 17 along with a statement containing the transferee’s name, tax 18 identification number, address, the denomination that each 19 replacement tax credit certificate is to carry, and any other 20 information required by the department of revenue. However, 21 tax credit certificate amounts of less than the minimum amount 22 established by rule by the department of revenue shall not be 23 transferable. 24 b. Within thirty days of receiving the transferred tax 25 credit certificate and the transferee’s statement, the 26 department of revenue shall issue one or more replacement tax 27 credit certificates to the transferee. Each replacement tax 28 credit certificate must contain the information required for 29 the original tax credit certificate and must have the same 30 expiration date that appeared on the transferred tax credit 31 certificate. 32 c. A tax credit shall not be claimed by a transferee 33 under this section until a replacement tax credit certificate 34 identifying the transferee as the proper holder has been 35 -8- HF 2443 (3) 86 aw/sc/md 8/ 17

H.F. 2443 issued. The transferee may use the amount of the tax credit 1 transferred against the taxes imposed in chapter 422, divisions 2 II, III, and V, and in chapter 432, for any tax year the 3 original transferor could have claimed the tax credit. Any 4 consideration received for the transfer of the tax credit shall 5 not be included as income under chapter 422, divisions II, III, 6 and V. Any consideration paid for the transfer of the tax 7 credit shall not be deducted from income under chapter 422, 8 divisions II, III, and V. 9 Sec. 17. Section 404A.2, subsection 3, Code 2016, is amended 10 to read as follows: 11 3. Any For a tax credit claimed by an eligible taxpayer 12 or a transferee for qualified rehabilitation projects with 13 agreements entered into on or after July 1, 2014, any credit in 14 excess of the taxpayer’s tax liability for the tax year shall 15 be refunded with interest computed under section 422.25 . In 16 lieu of claiming a refund, a taxpayer may elect to have the 17 overpayment shown on the taxpayer’s final, completed return 18 credited to the tax liability for the following year may be 19 refunded or, at the taxpayer’s election, credited to the 20 taxpayer’s tax liability for the following five years or until 21 depleted, whichever is earlier . A tax credit shall not be 22 carried back to a tax year prior to the tax year in which the 23 taxpayer redeems the tax credit. As used in this subsection, 24 “taxpayer” includes an eligible taxpayer or a person transferred 25 a tax credit certificate pursuant to subsection 2A. 26 Sec. 18. Section 404A.2, subsection 4, paragraph c, Code 27 2016, is amended to read as follows: 28 c. The tax credit certificate, unless rescinded by the 29 department authority , shall be accepted by the department 30 of revenue as payment for taxes imposed in chapter 422, 31 divisions II, III, and V , and in chapter 432 , subject to any 32 conditions or restrictions placed by the department authority 33 or the department of revenue upon the face of the tax credit 34 certificate and subject to the limitations of this program. 35 -9- HF 2443 (3) 86 aw/sc/md 9/ 17

H.F. 2443 Sec. 19. Section 404A.2, subsection 5, Code 2016, is amended 1 by striking the subsection. 2 Sec. 20. Section 404A.3, subsections 1 and 2, Code 2016, are 3 amended to read as follows: 4 1. Application and fees. 5 a. An eligible taxpayer seeking historic preservation 6 and cultural and entertainment district tax credits provided 7 in section 404A.2 shall make application to the department 8 authority in the manner prescribed by the department authority . 9 b. The department authority may accept applications on a 10 continuous basis or may accept applications, or one or more 11 components of an application, during one or more application 12 periods. 13 c. The application shall include any information deemed 14 necessary by the authority, in consultation with the 15 department , to evaluate the eligibility under the program 16 of the applicant and the rehabilitation project, the amount 17 of projected qualified rehabilitation expenditures of a 18 rehabilitation project, and the amount and source of all 19 funding for a rehabilitation project. An applicant shall have 20 the burden of proof to demonstrate to the department authority 21 that the applicant is an eligible taxpayer and the project is a 22 qualified rehabilitation project under the program. 23 d. The department authority may establish criteria for the 24 use of electronic or other alternative filing or submission 25 methods for any application, document, or payment requested or 26 required under this program. Such criteria may provide for the 27 acceptance of a signature in a form other than the handwriting 28 of a person. 29 e. (1) The department authority may charge application and 30 other fees to eligible taxpayers who apply to participate in 31 the program. The amount of such fees shall be determined based 32 on the costs of the authority and the department associated 33 with administering the program. 34 (2) Fees collected by the department authority pursuant to 35 -10- HF 2443 (3) 86 aw/sc/md 10/ 17

H.F. 2443 this paragraph shall be deposited with the department pursuant 1 to authority notwithstanding section 303.9, subsection 1 . 2 (3) A portion of the fees collected shall be directed by the 3 authority to the department. 4 2. Registration. 5 a. Upon review of the application by the authority , the 6 department authority may register a qualified rehabilitation 7 project under the program. If the department authority 8 registers the project, the department authority shall make a 9 preliminary determination as to the amount of tax credits for 10 which the project qualifies. 11 b. After registering the qualified rehabilitation project, 12 the department authority shall notify the eligible taxpayer of 13 successful registration under the program within a period of 14 time established by the authority by rule . The notification 15 shall include the amount of tax credits under section 404A.2 16 for which the qualified rehabilitation project has received 17 a tentative award and a statement that the amount is a 18 preliminary determination only. 19 Sec. 21. Section 404A.3, subsection 3, paragraph a, Code 20 2016, is amended to read as follows: 21 a. Upon successful registration of a qualified 22 rehabilitation project, the eligible taxpayer shall enter into 23 an agreement with the department authority for the successful 24 completion of all requirements of the program. 25 Sec. 22. Section 404A.3, subsection 3, paragraph b, 26 subparagraphs (1) and (2), Code 2016, are amended to read as 27 follows: 28 (1) The amount of the tax credit award. An eligible 29 taxpayer has no right to receive a tax credit certificate or 30 claim a tax credit until all requirements of the agreement and 31 subsections 4 and 5 have been satisfied. The amount of tax 32 credit included on a tax credit certificate issued under this 33 section shall be contingent upon verification by the department 34 authority of the amount of final qualified rehabilitation 35 -11- HF 2443 (3) 86 aw/sc/md 11/ 17

H.F. 2443 expenditures. 1 (2) The rehabilitation work to be performed. An eligible 2 taxpayer shall perform the rehabilitation work consistent with 3 the United States secretary of the interior’s standards for 4 rehabilitation, as determined by the department. 5 Sec. 23. Section 404A.3, subsection 4, paragraphs a and b, 6 Code 2016, are amended to read as follows: 7 a. The eligible taxpayer shall, for the length of the 8 agreement, annually certify to the department authority 9 compliance with the requirements of the agreement. The 10 certification shall be made at such time as the department 11 authority shall determine in the agreement. 12 b. The eligible taxpayer shall have the burden of proof to 13 demonstrate to the department authority that all requirements 14 of the agreement are satisfied. The taxpayer shall notify 15 the department authority in a timely manner of any changes 16 in the qualification of the rehabilitation project or in 17 the eligibility of the taxpayer to claim the tax credit 18 provided under this chapter , or of any other change that may 19 have a negative impact on the eligible taxpayer’s ability to 20 successfully complete any requirement under the agreement. 21 Sec. 24. Section 404A.3, subsection 4, paragraph c, 22 subparagraphs (1) and (2), Code 2016, are amended to read as 23 follows: 24 (1) If after entering into the agreement but before a 25 tax credit certificate is issued, the eligible taxpayer or 26 the qualified rehabilitation project no longer meets the 27 requirements of the agreement, the department authority may 28 find the taxpayer in default under the agreement and may revoke 29 the tax credit award. 30 (2) If an eligible taxpayer obtains a tax credit certificate 31 from the department authority by way of a prohibited activity, 32 the eligible taxpayer and any transferee shall be jointly and 33 severally liable to the state for the amount of the tax credits 34 so issued, interest and penalties allowed under chapter 422 , 35 -12- HF 2443 (3) 86 aw/sc/md 12/ 17

H.F. 2443 and reasonable attorney fees and litigation costs , except 1 that the liability of the transferee shall not exceed an 2 amount equal to the amount of the tax credits acquired by the 3 transferee . The department of revenue, upon notification 4 or discovery that a tax credit certificate was issued to an 5 eligible taxpayer by way of a prohibited activity, shall revoke 6 any outstanding tax credit and seek repayment from the eligible 7 taxpayer of the value of any tax credit already claimed, and 8 the failure to make such a repayment may be treated by the 9 department of revenue in the same manner as a failure to pay 10 the tax shown due or required to be shown due with the filing 11 of a return or deposit form. A qualifying transferee is not 12 subject to the liability, revocation, and repayment imposed 13 under this subparagraph if the transferee had actual notice, 14 prior to transfer of the tax credit, of misrepresentation, 15 fraud, or any unlawful act or omission by the eligible 16 taxpayer . 17 Sec. 25. Section 404A.3, subsection 4, paragraph c, 18 subparagraph (3), Code 2016, is amended by striking the 19 subparagraph and inserting in lieu thereof the following: 20 (3) For the purposes of this paragraph, “prohibited 21 activity” means a breach or default under the agreement with 22 the authority, the violation of any warranty provided by 23 the eligible taxpayer to the authority or the department 24 of revenue, the claiming of a tax credit issued under this 25 chapter for expenditures that are not qualified rehabilitation 26 expenditures, the violation of any requirements of this chapter 27 or rules adopted pursuant to this chapter, misrepresentation, 28 fraud, or any other unlawful act or omission. 29 Sec. 26. Section 404A.3, subsections 5, 6, and 7, Code 2016, 30 are amended to read as follows: 31 5. Examination and audit of project. 32 a. An eligible taxpayer shall engage a certified public 33 accountant authorized to practice in this state to conduct an 34 examination of the project in accordance with the American 35 -13- HF 2443 (3) 86 aw/sc/md 13/ 17

H.F. 2443 institute of certified public accountants’ statements on 1 standards for attestation engagements. Upon completion of the 2 qualified rehabilitation project, the eligible taxpayer shall 3 submit the examination to the department authority , along with 4 a statement of the amount of final qualified rehabilitation 5 expenditures and any other information deemed necessary by 6 the department or the department of revenue authority in 7 order to verify that all requirements of the agreement, this 8 chapter , and all rules adopted pursuant to this chapter have 9 been satisfied. The authority shall adopt rules governing 10 examinations required under this subsection. 11 b. Notwithstanding paragraph “a” , the department authority 12 may waive the examination requirement in this subsection if all 13 the following requirements are satisfied: 14 (1) The final qualified rehabilitation expenditures of the 15 qualified rehabilitation project, as verified by the department 16 authority , do not exceed one hundred thousand dollars. 17 (2) The qualified rehabilitation project is funded 18 exclusively by private funding sources. 19 c. Upon review of the examination, if applicable, the 20 department authority shall verify that all requirements of 21 the agreement, this chapter , and all rules adopted pursuant 22 to this chapter have been satisfied and shall verify the 23 amount of final qualified rehabilitation expenditures. After 24 consultation with the department of revenue, the department may 25 issue a tax credit certificate to the eligible taxpayer stating 26 the amount of tax credit under section 404A.2 the eligible 27 taxpayer may claim. The department If the authority determines 28 that all requirements of the agreement, this chapter, and all 29 rules adopted pursuant to this chapter have been satisfied and 30 it has verified the amount of final qualified rehabilitation 31 expenditures, the authority shall issue the a tax credit 32 certificate not later than sixty days following the completion 33 of the examination review, if applicable, and the verifications 34 and consultation required under this paragraph to the eligible 35 -14- HF 2443 (3) 86 aw/sc/md 14/ 17

H.F. 2443 taxpayer stating the amount of the credit under section 404A.2 1 the eligible taxpayer may claim . 2 6. Waivers. Notwithstanding any other provision of this 3 chapter to the contrary, the department authority may waive 4 the requirements of subsections 1 through 4 , except the 5 requirements relating to allowable cost overruns in subsection 6 3 , paragraph “b” , subparagraph (3), and the requirements 7 in subsection 4 , paragraphs “b” and “c” , for qualified 8 rehabilitation projects with final qualified rehabilitation 9 expenditures of seven hundred fifty thousand dollars or less 10 and may establish by rule different application, registration, 11 agreement, compliance, or other requirements relating to such 12 projects. 13 7. Amendments. The department authority may for good cause 14 amend an agreement. 15 Sec. 27. Section 404A.4, subsection 1, paragraph a, Code 16 2016, is amended to read as follows: 17 a. Except as provided in subsections 2 and 3 , the department 18 authority shall not award in any one fiscal year an amount of 19 tax credits provided in section 404A.2 in excess of forty-five 20 million dollars. 21 Sec. 28. Section 404A.4, subsection 2, paragraphs b and c, 22 Code 2016, are amended to read as follows: 23 b. The amount of a tax credit that was reserved prior to 24 July 1, 2014, under section 404A.4, Code 2014 , for use in a 25 fiscal year beginning before July 1, 2016, that is irrevocably 26 declined or revoked on or after July 1, 2014, but before July 27 1, 2016 2019 , may be awarded under section 404A.3 during the 28 fiscal year in which such declination or revocation occurs. 29 Such tax credits awarded shall not be claimed by a taxpayer in 30 a fiscal year that is earlier than the fiscal year for which 31 the tax credits were originally reserved. 32 c. The amount of a tax credit that was available for 33 approval by the state historical preservation office of the 34 department under section 404A.4, Code 2014 , in a fiscal year 35 -15- HF 2443 (3) 86 aw/sc/md 15/ 17

H.F. 2443 beginning on or after July 1, 2010, but before July 1, 2014, 1 that was required to be allocated to new projects with final 2 qualified rehabilitation costs of five hundred thousand dollars 3 or less, or seven hundred fifty thousand dollars or less, as 4 the case may be, and that was not finally approved by the state 5 historical preservation office, may be awarded under section 6 404A.3 during the fiscal years beginning on or after July 1, 7 2014, but before July 1, 2016 2019 . 8 Sec. 29. Section 404A.4, subsection 3, paragraph a, Code 9 2016, is amended to read as follows: 10 a. If during the fiscal year beginning July 1, 2016, or 11 any fiscal year thereafter, the department authority awards 12 an amount of tax credits that is less than the maximum 13 aggregate tax credit award limit specified in subsection 1 , 14 the difference between the amount so awarded and the amount 15 specified in subsection 1 , not to exceed ten percent of the 16 amount specified in subsection 1 , may be carried forward to the 17 succeeding fiscal year and awarded during that fiscal year. 18 Sec. 30. Section 404A.5, subsections 1 and 3, Code 2016, are 19 amended to read as follows: 20 1. The department authority , in consultation with the 21 department of revenue, shall be responsible for keeping the 22 general assembly and the legislative services agency informed 23 on the overall economic impact to the state of qualified 24 rehabilitation projects. 25 3. The department authority , to the extent it is able, shall 26 provide recommendations on whether the limit on tax credits 27 should be changed, the need for a broader or more restrictive 28 definition of qualified rehabilitation project, and other 29 adjustments to the tax credits under this chapter . 30 Sec. 31. Section 404A.6, Code 2016, is amended to read as 31 follows: 32 404A.6 Rules. 33 The authority, department , and the department of revenue 34 shall each adopt rules to jointly administer as necessary for 35 -16- HF 2443 (3) 86 aw/sc/md 16/ 17

H.F. 2443 the administration of this chapter . 1 Sec. 32. IMPLEMENTATION —— COSTS. For the fiscal year 2 beginning July 1, 2016, the department of revenue and the 3 economic development authority shall agree on the total cost 4 of implementing this division of this Act, and the economic 5 development authority shall pay those costs from fees charged 6 by and deposited with the authority pursuant to section 404A.3, 7 subsection 1, paragraph “e”. If the department of revenue 8 and the economic development authority fail to come to an 9 agreement, the department of management shall determine the 10 costs to be paid by the economic development authority under 11 this subsection. 12 Sec. 33. APPLICABILITY. 13 1. Except as provided in subsection 2, this division of this 14 Act applies to qualified rehabilitation projects registered on 15 or after July 1, 2016. 16 2. The section of this division of this Act amending section 17 404A.2, subsection 3, applies retroactively to agreements 18 entered into by an eligible taxpayer on or after July 1, 2014. 19 -17- HF 2443 (3) 86 aw/sc/md 17/ 17