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Senate File 89 - IntroducedA Bill ForAn Act 1creating a homeownership development tax credit
2available for charitable contributions to certain
3low-income housing developers in this state, and including
4applicability provisions.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 15E.152 Short title.
2This subchapter shall be known and may be cited as the
3“Homeownership Development Tax Credit Act”.
4 Sec. 2. NEW SECTION. 15E.153 Purpose.
5The purpose of this subchapter is to increase the
6availability of affordable housing in this state by encouraging
7taxpayers to make charitable contributions to certain nonprofit
8housing developers that create affordable single-family housing
9to be sold to low-income households in this state.
10 Sec. 3. NEW SECTION. 15E.154 Definitions.
11As used in this subchapter, unless the context otherwise
12requires:
131. “Department” means the department of revenue.
142. “Eligible housing developer” means an organization
15meeting the requirements of section 15E.155, subsection 2, and
16certified as an eligible housing developer by the authority
17pursuant to that section.
183. “Eligible rural housing developer” means an organization
19meeting the requirements of section 15E.155, subsection 3,
20and certified as an eligible rural housing developer by the
21authority pursuant to that section.
224. “Low-income household” means a household with income
23of eighty percent or less of the area median family income by
24county as determined by the United States department of housing
25and urban development.
26 Sec. 4. NEW SECTION. 15E.155 Developer certification.
271. Application. An organization may apply to the authority
28in the manner prescribed by the authority to be certified as
29an eligible housing developer or an eligible rural housing
30developer.
312. Eligible housing developer. In order to be certified as
32an eligible housing developer, an organization shall meet the
33requirements of paragraph “a” or “b”:
34a. (1) The organization is organized under chapter 504 and
35qualifying under section 501(c)(3) of the Internal Revenue Code
-1-1as an organization exempt from federal income tax under section
2501(a) of the Internal Revenue Code.
3(2) The organization has, for a minimum of three years prior
4to the time of the application, been developing single-family
5housing in this state to be sold to low-income households.
6(3) The bylaws, articles, or other document relating to the
7establishment of the organization provide that a purpose of the
8organization is to develop affordable housing in this state to
9be sold to low-income households.
10(4) The organization agrees to provide to the authority
11information reasonably required by the authority in order to
12verify the receipt, donor identity, value, and eligibility for
13the tax credit of contributions received by the organization.
14b. (1) The organization is organized under chapter 504 and
15qualifying under section 501(c)(3) of the Internal Revenue Code
16as an organization exempt from federal income tax under section
17501(a) of the Internal Revenue Code.
18(2) A purpose of the organization is to serve or support
19an organization certified as an eligible housing developer
20pursuant to paragraph “a” of this subsection.
21(3) The organization accepts contributions on behalf of
22an organization certified as an eligible housing developer
23pursuant to paragraph “a” of this subsection, and redistributes
24any and all such contributions to that organization.
25(4) The organization agrees to provide to the authority
26information reasonably required by the authority in order to
27verify the receipt, donor identity, value, and eligibility for
28the tax credit of contributions received by the organization.
293. Eligible rural housing developer. In order to be
30certified as an eligible rural housing developer, an
31organization shall meet the requirements of paragraph “a” or
32“b”:
33a. The organization meets the requirements of subsection
342, paragraph “a”, and for the three years preceding the
35application, the organization has conducted at least fifty-one
-2-1percent of its housing development activities in Iowa counties
2with a population of fewer than fifty thousand as determined by
3the most recent federal decennial census.
4b. (1) The organization is organized under chapter 504 and
5qualifying under section 501(c)(3) of the Internal Revenue Code
6as an organization exempt from federal income tax under section
7501(a) of the Internal Revenue Code.
8(2) A purpose of the organization is to serve or support an
9organization certified as an eligible rural housing developer
10pursuant to paragraph “a” of this subsection.
11(3) The organization accepts contributions on behalf of an
12organization certified as an eligible rural housing developer
13pursuant to paragraph “a” of this subsection, and redistributes
14any and all such contributions to that organization.
15(4) The organization agrees to provide to the authority
16information reasonably required by the authority in order to
17verify the receipt, donor identity, value, and eligibility for
18the tax credit of contributions received by the organization.
194. Length of certification and recertification. Unless
20certification is revoked pursuant to subsection 5, a
21certification received pursuant to this section shall be valid
22for a period of three years, at which time the organization
23may apply to the authority in the manner prescribed by the
24authority to become recertified as an eligible housing
25developer or eligible rural housing developer pursuant to this
26section.
275. Revocation of certification. An organization shall
28notify the authority in a timely manner of any changes that
29affect the organization’s ability to qualify as an eligible
30housing developer or eligible rural housing developer. The
31authority shall revoke the certification of an organization
32certified as an eligible housing developer or eligible rural
33housing developer if that organization subsequently fails to
34meet the requirements of subsection 2 or 3, as applicable.
35The revocation of a certification under this subsection shall
-3-1not prohibit an organization from subsequently applying to be
2certified as an eligible housing developer or eligible rural
3housing developer under this section.
4 Sec. 5. NEW SECTION. 15E.156 Tax credit application —
5maximum tax credits.
61. Application.
7a. To receive a tax credit under section 15E.157, a taxpayer
8must submit an application in the manner and form prescribed
9by the authority on or after the date of the charitable
10contribution to the eligible housing developer or eligible
11rural housing developer for which a tax credit is sought. The
12eligible housing developer or eligible rural housing developer
13shall forward the application to the authority.
14b. The authority shall issue tax credits and related tax
15credit certificates on a first-come, first-served basis in
16the order applications are received from eligible housing
17developers and eligible rural housing developers until the
18maximum amount of tax credits authorized pursuant to subsection
192 is reached. If for a calendar year the maximum amount
20of tax credits applied for exceeds the amount specified in
21subsection 2, the authority shall establish a wait list for
22tax credits. Valid applications received but not approved
23by the authority shall be placed on a wait list in the order
24the applications were received by the authority and those
25applicants shall be given priority for receiving tax credits in
26succeeding calendar years. Placement on a wait list pursuant
27to this paragraph shall not constitute a promise binding the
28state. The availability of a tax credit and approval of a tax
29credit application pursuant to this section in a future year
30is contingent upon the availability of tax credits in that
31particular year.
322. Maximum tax credit amounts.
33a. The aggregate amount of tax credits issued pursuant to
34this section shall not exceed a total of seven million dollars
35per calendar year.
-4- 1b. Twenty percent of the aggregate amount of tax credits
2issued in a calendar year shall be reserved for charitable
3contributions to an eligible rural housing developer.
4c. (1) Except as provided in subparagraph (2), the maximum
5amount of tax credits issued to any one taxpayer for charitable
6contributions in a tax year shall not exceed two hundred fifty
7thousand dollars.
8(2) The maximum amount of tax credits issued to any one
9taxpayer for charitable contributions in a tax year shall
10not exceed three hundred thousand dollars if at least twenty
11percent of the taxpayer’s total charitable contributions made
12during the tax year that are eligible for the tax credit in
13section 15E.157 are to one or more eligible rural housing
14developers.
15 Sec. 6. NEW SECTION. 15E.157 Homeownership development tax
16credit.
171. a. A tax credit shall be allowed against the taxes
18imposed in chapter 422, divisions II, III, and V, and in
19chapter 432, and against the moneys and credits tax imposed in
20section 533.329, equal to fifty percent of the amount of the
21voluntary cash or noncash charitable contributions made by a
22taxpayer during the tax year to an eligible housing developer
23or eligible rural housing developer.
24b. The charitable contribution must equal or exceed five
25hundred dollars in order to qualify for the tax credit.
26However, an eligible housing developer or eligible rural
27housing developer may set a higher minimum qualifying amount
28pursuant to rules prescribed by the authority.
292. The tax credit shall be claimed for the tax year during
30which the taxpayer was issued the tax credit.
313. An individual may claim a tax credit under this section
32of a partnership, limited liability company, S corporation,
33estate, or trust electing to have income taxed directly to
34the individual. The amount claimed by the individual shall
35be based upon the pro rata share of the individual’s earnings
-5-1from the partnership, limited liability company, S corporation,
2estate, or trust.
34. Any tax credit in excess of the taxpayer’s tax liability
4for the tax year may be credited to the tax liability for the
5following five years or until depleted, whichever occurs first.
6A tax credit shall not be carried back to a tax year prior to
7the tax year in which the taxpayer claims the tax credit.
85. a. To claim a tax credit under this section, a taxpayer
9shall include one or more tax credit certificates with the
10taxpayer’s tax return.
11b. The tax credit certificate shall contain the taxpayer’s
12name, address, tax identification number, the amount of the
13credit, and any other information required by the department.
14c. The tax credit certificate, unless rescinded by the
15authority, shall be accepted by the department as payment for
16taxes imposed pursuant to chapter 422, divisions II, III, and
17V, and in chapter 432, and against the moneys and credits
18tax imposed in section 533.329, subject to any conditions or
19restrictions placed by the authority upon the face of the tax
20credit certificate and subject to the limitations of this
21chapter.
22d. Tax credit certificates issued pursuant to this
23subchapter shall not be transferred to any other person.
246. The amount of the charitable contribution for which the
25tax credit is claimed shall not be deductible in determining
26taxable income for state income tax purposes.
27 Sec. 7. NEW SECTION. 15E.158 Reports to general assembly.
28The authority shall publish an annual report of the
29activities conducted pursuant to this subchapter and shall
30submit the report to the governor and the general assembly.
31The report shall include a listing of certified eligible
32housing developers and certified eligible rural housing
33developers, the number of tax credit certificates and the
34amount of tax credits issued by the authority, and the number
35of taxpayers and the amount of tax applications on the tax
-6-1credit wait list, if any.
2 Sec. 8. NEW SECTION. 15E.159 Rules.
3The authority and the department shall each adopt rules
4pursuant to chapter 17A as necessary for the implementation of
5this subchapter.
6 Sec. 9. APPLICABILITY. This Act applies to tax years
7beginning on or after January 1, 2019.
8 Sec. 10. APPLICABILITY. This Act applies to charitable
9contributions to eligible housing developers and eligible rural
10housing developers made on or after January 1, 2019.
11EXPLANATION
12The inclusion of this explanation does not constitute agreement with
13the explanation’s substance by the members of the general assembly.
14This bill creates a homeownership development tax credit
15that will be administered by the economic development authority
16(EDA) and that will provide tax credits to taxpayers who make
17charitable contributions to eligible housing developers or
18eligible rural housing developers in this state.
19An “eligible housing developer” is defined in the bill to
20include an Iowa nonprofit, tax-exempt organization that has
21been developing single-family housing for at least three years
22in this state to be sold to low-income households, as defined
23in the bill, that includes the development of such housing in
24this state for low-income households as a purpose in its bylaws
25or other organizational documents, and that agrees to provide
26EDA with certain information in order to properly verify
27charitable contributions. An “eligible housing developer”
28also includes an Iowa nonprofit, tax-exempt organization whose
29purpose is to support an organization described above and who
30redistributes any charitable contributions received on behalf
31of that eligible housing developer to the developer.
32An “eligible rural housing developer” is defined in the
33bill to include an Iowa nonprofit, tax-exempt organization
34that meets the requirements of an eligible housing developer
35described above but that additionally has conducted for the
-7-1last three years at least 51 percent of its housing development
2activities in Iowa counties with a population of fewer than
350,000 as determined by the most recent federal decennial
4census.
5An organization must apply to EDA to be certified as an
6eligible housing developer or an eligible rural housing
7developer. A certification by EDA will last for a period of
8three years, at which time an eligible housing developer or
9eligible rural housing developer may apply to be recertified.
10Failure to meet the requirements specified above may cause the
11organization to lose its certification as an eligible housing
12developer or eligible rural housing developer, but the loss
13of such certification does not prohibit an organization from
14subsequently reapplying to EDA for certification.
15In order to receive a tax credit for a charitable
16contribution to an eligible housing developer or eligible rural
17housing developer, a taxpayer is required to apply to the
18developer in the manner and form prescribed by EDA on or after
19the date the charitable contribution is made. The developer is
20then required to forward the application to EDA.
21The tax credit equals 50 percent of the amount of the cash or
22noncash charitable contribution made to the eligible housing
23developer or eligible rural housing developer during the tax
24year. The minimum amount of charitable contribution that may
25qualify for the tax credit is $500, but each eligible housing
26developer or eligible rural housing developer is allowed to
27set a higher minimum contribution amount. The bill provides
28that EDA shall not issue more than $7 million in tax credits
29per calendar year. Of that $7 million maximum aggregate
30amount, 20 percent ($1.4 million) of the tax credits shall
31be reserved for charitable contributions to eligible rural
32housing developers. The maximum amount of tax credits that
33may be issued per taxpayer for charitable contributions in a
34tax year is $250,000, or $300,000 if at least 20 percent of
35the taxpayer’s total charitable contributions to the eligible
-8-1housing development organizations during the tax year were to
2one or more eligible rural housing developers.
3The tax credit may be claimed against the individual income
4tax, the corporate income tax, the franchise tax, the insurance
5companies tax, and the moneys and credits tax. To claim a tax
6credit, a taxpayer must include a tax credit certificate with
7the taxpayer’s tax return. The tax credit is nonrefundable
8and nontransferable, but any excess may be carried forward for
9five tax years. The amount of the charitable contribution for
10which the tax credit is claimed shall not be deductible in
11determining taxable income for state tax purposes.
12EDA is required to issue tax credits on a first-come,
13first-served basis until the maximum amount of $7 million
14per calendar year is reached. If the amount of tax credit
15applications exceeds $7 million in a calendar year, EDA
16is required to establish a wait list and give priority in
17subsequent years to applications on the wait list.
18The bill requires EDA and the department of revenue to
19adopt rules as necessary for the implementation of the bill,
20and requires EDA to publish and submit annual reports to
21the governor and general assembly containing information as
22described in the bill.
23The bill applies to tax years beginning on or after January
241, 2019, and to charitable contributions to eligible housing
25developers and eligible rural housing developers on or after
26that date.
-9-jm/jh
2available for charitable contributions to certain
3low-income housing developers in this state, and including
4applicability provisions.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 15E.152 Short title.
2This subchapter shall be known and may be cited as the
3“Homeownership Development Tax Credit Act”.
4 Sec. 2. NEW SECTION. 15E.153 Purpose.
5The purpose of this subchapter is to increase the
6availability of affordable housing in this state by encouraging
7taxpayers to make charitable contributions to certain nonprofit
8housing developers that create affordable single-family housing
9to be sold to low-income households in this state.
10 Sec. 3. NEW SECTION. 15E.154 Definitions.
11As used in this subchapter, unless the context otherwise
12requires:
131. “Department” means the department of revenue.
142. “Eligible housing developer” means an organization
15meeting the requirements of section 15E.155, subsection 2, and
16certified as an eligible housing developer by the authority
17pursuant to that section.
183. “Eligible rural housing developer” means an organization
19meeting the requirements of section 15E.155, subsection 3,
20and certified as an eligible rural housing developer by the
21authority pursuant to that section.
224. “Low-income household” means a household with income
23of eighty percent or less of the area median family income by
24county as determined by the United States department of housing
25and urban development.
26 Sec. 4. NEW SECTION. 15E.155 Developer certification.
271. Application. An organization may apply to the authority
28in the manner prescribed by the authority to be certified as
29an eligible housing developer or an eligible rural housing
30developer.
312. Eligible housing developer. In order to be certified as
32an eligible housing developer, an organization shall meet the
33requirements of paragraph “a” or “b”:
34a. (1) The organization is organized under chapter 504 and
35qualifying under section 501(c)(3) of the Internal Revenue Code
-1-1as an organization exempt from federal income tax under section
2501(a) of the Internal Revenue Code.
3(2) The organization has, for a minimum of three years prior
4to the time of the application, been developing single-family
5housing in this state to be sold to low-income households.
6(3) The bylaws, articles, or other document relating to the
7establishment of the organization provide that a purpose of the
8organization is to develop affordable housing in this state to
9be sold to low-income households.
10(4) The organization agrees to provide to the authority
11information reasonably required by the authority in order to
12verify the receipt, donor identity, value, and eligibility for
13the tax credit of contributions received by the organization.
14b. (1) The organization is organized under chapter 504 and
15qualifying under section 501(c)(3) of the Internal Revenue Code
16as an organization exempt from federal income tax under section
17501(a) of the Internal Revenue Code.
18(2) A purpose of the organization is to serve or support
19an organization certified as an eligible housing developer
20pursuant to paragraph “a” of this subsection.
21(3) The organization accepts contributions on behalf of
22an organization certified as an eligible housing developer
23pursuant to paragraph “a” of this subsection, and redistributes
24any and all such contributions to that organization.
25(4) The organization agrees to provide to the authority
26information reasonably required by the authority in order to
27verify the receipt, donor identity, value, and eligibility for
28the tax credit of contributions received by the organization.
293. Eligible rural housing developer. In order to be
30certified as an eligible rural housing developer, an
31organization shall meet the requirements of paragraph “a” or
32“b”:
33a. The organization meets the requirements of subsection
342, paragraph “a”, and for the three years preceding the
35application, the organization has conducted at least fifty-one
-2-1percent of its housing development activities in Iowa counties
2with a population of fewer than fifty thousand as determined by
3the most recent federal decennial census.
4b. (1) The organization is organized under chapter 504 and
5qualifying under section 501(c)(3) of the Internal Revenue Code
6as an organization exempt from federal income tax under section
7501(a) of the Internal Revenue Code.
8(2) A purpose of the organization is to serve or support an
9organization certified as an eligible rural housing developer
10pursuant to paragraph “a” of this subsection.
11(3) The organization accepts contributions on behalf of an
12organization certified as an eligible rural housing developer
13pursuant to paragraph “a” of this subsection, and redistributes
14any and all such contributions to that organization.
15(4) The organization agrees to provide to the authority
16information reasonably required by the authority in order to
17verify the receipt, donor identity, value, and eligibility for
18the tax credit of contributions received by the organization.
194. Length of certification and recertification. Unless
20certification is revoked pursuant to subsection 5, a
21certification received pursuant to this section shall be valid
22for a period of three years, at which time the organization
23may apply to the authority in the manner prescribed by the
24authority to become recertified as an eligible housing
25developer or eligible rural housing developer pursuant to this
26section.
275. Revocation of certification. An organization shall
28notify the authority in a timely manner of any changes that
29affect the organization’s ability to qualify as an eligible
30housing developer or eligible rural housing developer. The
31authority shall revoke the certification of an organization
32certified as an eligible housing developer or eligible rural
33housing developer if that organization subsequently fails to
34meet the requirements of subsection 2 or 3, as applicable.
35The revocation of a certification under this subsection shall
-3-1not prohibit an organization from subsequently applying to be
2certified as an eligible housing developer or eligible rural
3housing developer under this section.
4 Sec. 5. NEW SECTION. 15E.156 Tax credit application —
5maximum tax credits.
61. Application.
7a. To receive a tax credit under section 15E.157, a taxpayer
8must submit an application in the manner and form prescribed
9by the authority on or after the date of the charitable
10contribution to the eligible housing developer or eligible
11rural housing developer for which a tax credit is sought. The
12eligible housing developer or eligible rural housing developer
13shall forward the application to the authority.
14b. The authority shall issue tax credits and related tax
15credit certificates on a first-come, first-served basis in
16the order applications are received from eligible housing
17developers and eligible rural housing developers until the
18maximum amount of tax credits authorized pursuant to subsection
192 is reached. If for a calendar year the maximum amount
20of tax credits applied for exceeds the amount specified in
21subsection 2, the authority shall establish a wait list for
22tax credits. Valid applications received but not approved
23by the authority shall be placed on a wait list in the order
24the applications were received by the authority and those
25applicants shall be given priority for receiving tax credits in
26succeeding calendar years. Placement on a wait list pursuant
27to this paragraph shall not constitute a promise binding the
28state. The availability of a tax credit and approval of a tax
29credit application pursuant to this section in a future year
30is contingent upon the availability of tax credits in that
31particular year.
322. Maximum tax credit amounts.
33a. The aggregate amount of tax credits issued pursuant to
34this section shall not exceed a total of seven million dollars
35per calendar year.
-4- 1b. Twenty percent of the aggregate amount of tax credits
2issued in a calendar year shall be reserved for charitable
3contributions to an eligible rural housing developer.
4c. (1) Except as provided in subparagraph (2), the maximum
5amount of tax credits issued to any one taxpayer for charitable
6contributions in a tax year shall not exceed two hundred fifty
7thousand dollars.
8(2) The maximum amount of tax credits issued to any one
9taxpayer for charitable contributions in a tax year shall
10not exceed three hundred thousand dollars if at least twenty
11percent of the taxpayer’s total charitable contributions made
12during the tax year that are eligible for the tax credit in
13section 15E.157 are to one or more eligible rural housing
14developers.
15 Sec. 6. NEW SECTION. 15E.157 Homeownership development tax
16credit.
171. a. A tax credit shall be allowed against the taxes
18imposed in chapter 422, divisions II, III, and V, and in
19chapter 432, and against the moneys and credits tax imposed in
20section 533.329, equal to fifty percent of the amount of the
21voluntary cash or noncash charitable contributions made by a
22taxpayer during the tax year to an eligible housing developer
23or eligible rural housing developer.
24b. The charitable contribution must equal or exceed five
25hundred dollars in order to qualify for the tax credit.
26However, an eligible housing developer or eligible rural
27housing developer may set a higher minimum qualifying amount
28pursuant to rules prescribed by the authority.
292. The tax credit shall be claimed for the tax year during
30which the taxpayer was issued the tax credit.
313. An individual may claim a tax credit under this section
32of a partnership, limited liability company, S corporation,
33estate, or trust electing to have income taxed directly to
34the individual. The amount claimed by the individual shall
35be based upon the pro rata share of the individual’s earnings
-5-1from the partnership, limited liability company, S corporation,
2estate, or trust.
34. Any tax credit in excess of the taxpayer’s tax liability
4for the tax year may be credited to the tax liability for the
5following five years or until depleted, whichever occurs first.
6A tax credit shall not be carried back to a tax year prior to
7the tax year in which the taxpayer claims the tax credit.
85. a. To claim a tax credit under this section, a taxpayer
9shall include one or more tax credit certificates with the
10taxpayer’s tax return.
11b. The tax credit certificate shall contain the taxpayer’s
12name, address, tax identification number, the amount of the
13credit, and any other information required by the department.
14c. The tax credit certificate, unless rescinded by the
15authority, shall be accepted by the department as payment for
16taxes imposed pursuant to chapter 422, divisions II, III, and
17V, and in chapter 432, and against the moneys and credits
18tax imposed in section 533.329, subject to any conditions or
19restrictions placed by the authority upon the face of the tax
20credit certificate and subject to the limitations of this
21chapter.
22d. Tax credit certificates issued pursuant to this
23subchapter shall not be transferred to any other person.
246. The amount of the charitable contribution for which the
25tax credit is claimed shall not be deductible in determining
26taxable income for state income tax purposes.
27 Sec. 7. NEW SECTION. 15E.158 Reports to general assembly.
28The authority shall publish an annual report of the
29activities conducted pursuant to this subchapter and shall
30submit the report to the governor and the general assembly.
31The report shall include a listing of certified eligible
32housing developers and certified eligible rural housing
33developers, the number of tax credit certificates and the
34amount of tax credits issued by the authority, and the number
35of taxpayers and the amount of tax applications on the tax
-6-1credit wait list, if any.
2 Sec. 8. NEW SECTION. 15E.159 Rules.
3The authority and the department shall each adopt rules
4pursuant to chapter 17A as necessary for the implementation of
5this subchapter.
6 Sec. 9. APPLICABILITY. This Act applies to tax years
7beginning on or after January 1, 2019.
8 Sec. 10. APPLICABILITY. This Act applies to charitable
9contributions to eligible housing developers and eligible rural
10housing developers made on or after January 1, 2019.
11EXPLANATION
12The inclusion of this explanation does not constitute agreement with
13the explanation’s substance by the members of the general assembly.
14This bill creates a homeownership development tax credit
15that will be administered by the economic development authority
16(EDA) and that will provide tax credits to taxpayers who make
17charitable contributions to eligible housing developers or
18eligible rural housing developers in this state.
19An “eligible housing developer” is defined in the bill to
20include an Iowa nonprofit, tax-exempt organization that has
21been developing single-family housing for at least three years
22in this state to be sold to low-income households, as defined
23in the bill, that includes the development of such housing in
24this state for low-income households as a purpose in its bylaws
25or other organizational documents, and that agrees to provide
26EDA with certain information in order to properly verify
27charitable contributions. An “eligible housing developer”
28also includes an Iowa nonprofit, tax-exempt organization whose
29purpose is to support an organization described above and who
30redistributes any charitable contributions received on behalf
31of that eligible housing developer to the developer.
32An “eligible rural housing developer” is defined in the
33bill to include an Iowa nonprofit, tax-exempt organization
34that meets the requirements of an eligible housing developer
35described above but that additionally has conducted for the
-7-1last three years at least 51 percent of its housing development
2activities in Iowa counties with a population of fewer than
350,000 as determined by the most recent federal decennial
4census.
5An organization must apply to EDA to be certified as an
6eligible housing developer or an eligible rural housing
7developer. A certification by EDA will last for a period of
8three years, at which time an eligible housing developer or
9eligible rural housing developer may apply to be recertified.
10Failure to meet the requirements specified above may cause the
11organization to lose its certification as an eligible housing
12developer or eligible rural housing developer, but the loss
13of such certification does not prohibit an organization from
14subsequently reapplying to EDA for certification.
15In order to receive a tax credit for a charitable
16contribution to an eligible housing developer or eligible rural
17housing developer, a taxpayer is required to apply to the
18developer in the manner and form prescribed by EDA on or after
19the date the charitable contribution is made. The developer is
20then required to forward the application to EDA.
21The tax credit equals 50 percent of the amount of the cash or
22noncash charitable contribution made to the eligible housing
23developer or eligible rural housing developer during the tax
24year. The minimum amount of charitable contribution that may
25qualify for the tax credit is $500, but each eligible housing
26developer or eligible rural housing developer is allowed to
27set a higher minimum contribution amount. The bill provides
28that EDA shall not issue more than $7 million in tax credits
29per calendar year. Of that $7 million maximum aggregate
30amount, 20 percent ($1.4 million) of the tax credits shall
31be reserved for charitable contributions to eligible rural
32housing developers. The maximum amount of tax credits that
33may be issued per taxpayer for charitable contributions in a
34tax year is $250,000, or $300,000 if at least 20 percent of
35the taxpayer’s total charitable contributions to the eligible
-8-1housing development organizations during the tax year were to
2one or more eligible rural housing developers.
3The tax credit may be claimed against the individual income
4tax, the corporate income tax, the franchise tax, the insurance
5companies tax, and the moneys and credits tax. To claim a tax
6credit, a taxpayer must include a tax credit certificate with
7the taxpayer’s tax return. The tax credit is nonrefundable
8and nontransferable, but any excess may be carried forward for
9five tax years. The amount of the charitable contribution for
10which the tax credit is claimed shall not be deductible in
11determining taxable income for state tax purposes.
12EDA is required to issue tax credits on a first-come,
13first-served basis until the maximum amount of $7 million
14per calendar year is reached. If the amount of tax credit
15applications exceeds $7 million in a calendar year, EDA
16is required to establish a wait list and give priority in
17subsequent years to applications on the wait list.
18The bill requires EDA and the department of revenue to
19adopt rules as necessary for the implementation of the bill,
20and requires EDA to publish and submit annual reports to
21the governor and general assembly containing information as
22described in the bill.
23The bill applies to tax years beginning on or after January
241, 2019, and to charitable contributions to eligible housing
25developers and eligible rural housing developers on or after
26that date.
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