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House File 230 - IntroducedA Bill ForAn Act 1creating the Iowa job training tax credit program and
2including applicability provisions.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 15K.1 Title.
2This chapter shall be known and may cited as the “Iowa job
3training tax credit program”.
4 Sec. 2. NEW SECTION. 15K.2 Definitions.
5For purposes of this chapter, unless the context otherwise
6requires:
71. “Apprentice” means the same as defined in section 15B.2.
82. “Authority” means the economic development authority
9created in section 15.105.
103. “Employ” or “employed” means to be hired or retained for
11paid work as an apprentice or intern and to perform the duties
12of an apprentice or intern.
134. “Intern” means an Iowa student engaged in an internship.
145. “Internship” means temporary employment of an Iowa
15student that focuses on providing the student with work
16experience in the student’s field of study.
176. “Iowa student” means the same as defined in section
1815.411, subsection 3, paragraph “a”.
197. “Minimum training standards” means the minimum training
20standards adopted by the authority by rule pursuant to section
2115K.3, subsection 3.
228. “Program” means the job training tax credit program
23credit in this chapter.
249. “Qualified trainee” means a person who meets the
25requirements of section 15K.3, subsection 2, with respect to
26a tax year.
2710. “Tax year” means the calendar year, or the fiscal year
28ending during such calendar year, upon the basis of which a tax
29is calculated.
30 Sec. 3. NEW SECTION. 15K.3 Job training tax credit program
31— application — eligibility requirements.
321. Program administration. The authority, in consultation
33with the department of revenue, shall administer a job training
34tax credit program to provide tax credits to businesses that
35employ qualified trainees in Iowa during the tax year.
-1- 12. Qualified trainee. For purposes of the program, a person
2is a qualified trainee of a business if the person meets all of
3the following requirements for the tax year:
4a. The person is an apprentice or an intern.
5b. The person is employed by the business in Iowa.
6c. The person satisfies the relevant minimum training
7standard.
83. Minimum training standards.
9a. The authority shall establish by rule minimum training
10standards under the program for apprenticeships and internships
11that will reflect the minimum amount of training necessary to
12provide a meaningful work experience in the relevant field
13of study of an intern or to learn the relevant trade or job
14position of an apprentice. The minimum training standards
15shall be a value expressed as a number of job training hours,
16or a ratio of job training hours to work hours, or some
17combination of both.
18b. In determining the minimum training standards, the
19authority shall consider the relevant field of study involved,
20the trade or job position involved, the stated goals and length
21of the internship or apprenticeship, and any other factors the
22authority deems relevant. The authority may establish more
23than one minimum training standard.
24c. In establishing minimum training standards, the authority
25may consult with any person the authority deems relevant,
26including but not limited to the department of education,
27institutions of higher learning, or business and labor
28organizations.
294. Application.
30a. A business employing one or more qualified trainees in
31Iowa may apply to the authority for the job training tax credit
32provided in section 15K.4.
33b. The application shall be made in the manner and form
34prescribed by the authority.
35c. The authority may accept applications on a continuous
-2-1basis or may establish, by rule, an annual application
2deadline.
3d. The application shall include all of the following
4information:
5(1) A description of the business and the apprenticeship
6program or internship program conducted by the business,
7including the number of qualified trainees employed by the
8business during the relevant tax year.
9(2) With respect to each qualified trainee of the business:
10(a) The identity of the qualified trainee, the period
11of time the qualified trainee was employed by the business
12during the tax year, and if relevant, the institution of higher
13learning at which the qualified trainee is a student.
14(b) A description of the qualified trainee’s job duties and
15the number of hours those job duties were performed.
16(c) A description and total number of hours of job training
17and instruction provided by the business to the qualified
18trainee.
19(d) A statement from the business certifying that the
20apprentice or intern meets the relevant minimum training
21standard for the relevant tax year.
22(3) Any other information reasonably required by the
23authority in order to establish and verify eligibility under
24the program.
25e. Upon receiving a complete and accurate application and
26establishing that all requirements of the program have been
27satisfied, the authority shall issue a tax credit and related
28tax credit certificate to the business stating the amount of
29job training tax credit under section 15K.4 the business may
30claim.
31 Sec. 4. NEW SECTION. 15K.4 Job training tax credit.
321. a. A business that satisfies the requirements of the
33job training tax credit program in section 15K.3 may claim a
34tax credit in an amount equal to one thousand dollars for each
35qualified trainee employed in Iowa by the taxpayer for the
-3-1entire tax year.
2b. If the qualified trainee is not employed for the entire
3tax year, the maximum amount of the credit shall be prorated
4and the amount of the credit with regard to that qualified
5trainee shall equal the maximum amount of credit for the tax
6year, divided by twelve, multiplied by the number of months
7in the tax year the qualified trainee was employed by the
8taxpayer. The credit shall be rounded to the nearest dollar.
9If the qualified trainee was employed during any part of the
10month, the qualified trainee shall be considered a qualified
11trainee for the entire month.
122. An individual may claim the tax credit allowed a
13partnership, limited liability company, S corporation,
14estate, or trust electing to have income taxed directly to
15the individual. The amount claimed by the individual shall
16be based upon the pro rata share of the individual’s earnings
17from the partnership, limited liability company, S corporation,
18estate, or trust.
193. Any tax credit in excess of the taxpayer’s liability
20for the tax year is not refundable but may be credited to the
21tax liability for the following seven years or until depleted,
22whichever is earlier.
234. Tax credits issued under this section are not
24transferable to any person.
255. a. To claim a tax credit under this section, a taxpayer
26shall include one or more tax credit certificates with the
27taxpayer’s tax return.
28b. The tax credit certificate shall contain the taxpayer’s
29name, address, tax identification number, the amount of the
30credit, and any other information required by the department
31of revenue.
32c. The tax credit certificate, unless rescinded by the
33authority, shall be accepted by the department of revenue as
34payment for taxes imposed in chapter 422, divisions II, III,
35and V, and in chapter 432, and against the moneys and credits
-4-1tax imposed in section 533.329, subject to any conditions or
2restrictions placed by the authority or the department of
3revenue upon the face of the tax credit certificate and subject
4to the limitations of this program.
5 Sec. 5. NEW SECTION. 15K.5 Reports to general assembly.
6The authority, in cooperation with the department of
7revenue, shall publish an annual report of activities of the
8program and shall submit the report to the governor and the
9general assembly.
10 Sec. 6. NEW SECTION. 15K.6 Rules.
11The authority and the department of revenue shall each adopt
12rules as necessary for the implementation and administration of
13this chapter.
14 Sec. 7. NEW SECTION. 422.10C Job training tax credit.
15The taxes imposed under this division, less the credits
16allowed under section 422.12, shall be reduced by a job
17training tax credit allowed under chapter 15K.
18 Sec. 8. Section 422.33, Code 2019, is amended by adding the
19following new subsection:
20 NEW SUBSECTION. 17. The taxes imposed under this division
21shall be reduced by a job training tax credit allowed under
22chapter 15K.
23 Sec. 9. Section 422.60, Code 2019, is amended by adding the
24following new subsection:
25 NEW SUBSECTION. 14. The taxes imposed under this division
26shall be reduced by a job training tax credit allowed under
27chapter 15K.
28 Sec. 10. NEW SECTION. 432.12N Job training tax credit.
29The taxes imposed under this chapter shall be reduced by a
30job training tax credit allowed under chapter 15K.
31 Sec. 11. Section 533.329, subsection 2, Code 2019, is
32amended by adding the following new paragraph:
33 NEW PARAGRAPH. l. The moneys and credits tax imposed under
34this section shall be reduced by a job training tax credit
35allowed under chapter 15K.
-5-1 Sec. 12. APPLICABILITY. This Act applies to tax years
2beginning on or after January 1, 2020.
3 Sec. 13. APPLICABILITY. This Act applies to qualified
4trainees employed in Iowa on or after January 1, 2020.
5EXPLANATION
6The inclusion of this explanation does not constitute agreement with
7the explanation’s substance by the members of the general assembly.
8This bill creates a job training tax credit program
9(program) administered by the economic development authority
10(EDA) in consultation with the department of revenue (DOR)
11to provide tax credits to businesses that employ for pay
12qualified trainees in Iowa during the tax year. To qualify
13as a “qualified trainee” under the program, a person must be
14an apprentice or an intern, must be employed by a business in
15Iowa, and must satisfy the relevant minimum training standard.
16“Apprentice” is defined in the bill to mean an Iowa resident
17employed in an apprenticeable occupation and registered as such
18with the U.S. office of apprenticeship. “Intern” is defined
19in the bill to mean an Iowa college student, or a student who
20graduated from high school in Iowa but who now attends college
21outside of Iowa, who is engaged in temporary employment that
22focuses on providing the student with work experience in the
23student’s field of study.
24EDA is required to establish by rule minimum training
25standards that will reflect the minimum training necessary to
26provide a meaningful work experience for an intern or to learn
27a trade or job position for an apprentice. The bill describes
28how the minimum training standards should be quantified, as
29well as the factors EDA shall consider and the persons with
30whom EDA may consult in determining the standards. The bill
31provides that EDA may establish more than one minimum training
32standard.
33In order to receive a tax credit, a business must apply
34to the authority in the manner and form prescribed by the
35authority, and the bill describes the required information
-6-1that must be contained in an application. EDA is required to
2review applications and, upon determining that the requirements
3of the program have been satisfied, issue a tax credit to the
4business.
5The tax credit equals $1,000 for each qualified trainee
6employed in Iowa by a business for the entire tax year. If
7a qualified trainee was not employed by the business for the
8entire tax year, the amount of the credit is prorated based
9upon the number of months of employment. The tax credit
10may be claimed against the individual and corporate income
11taxes, the franchise tax, the insurance companies tax, and the
12moneys and credits tax. The tax credit is nonrefundable and
13nontransferable, but any excess may be carried forward for
14seven years.
15The bill requires EDA and DOR to adopt rules as necessary
16for the implementation of the bill, and requires EDA and DOR to
17publish and submit annual reports to the governor and general
18assembly containing information as described in the bill.
19The bill applies to tax years beginning on or after January
201, 2020, and to qualified trainees employed in Iowa on or after
21that date.
-7-jm/jh
2including applicability provisions.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 15K.1 Title.
2This chapter shall be known and may cited as the “Iowa job
3training tax credit program”.
4 Sec. 2. NEW SECTION. 15K.2 Definitions.
5For purposes of this chapter, unless the context otherwise
6requires:
71. “Apprentice” means the same as defined in section 15B.2.
82. “Authority” means the economic development authority
9created in section 15.105.
103. “Employ” or “employed” means to be hired or retained for
11paid work as an apprentice or intern and to perform the duties
12of an apprentice or intern.
134. “Intern” means an Iowa student engaged in an internship.
145. “Internship” means temporary employment of an Iowa
15student that focuses on providing the student with work
16experience in the student’s field of study.
176. “Iowa student” means the same as defined in section
1815.411, subsection 3, paragraph “a”.
197. “Minimum training standards” means the minimum training
20standards adopted by the authority by rule pursuant to section
2115K.3, subsection 3.
228. “Program” means the job training tax credit program
23credit in this chapter.
249. “Qualified trainee” means a person who meets the
25requirements of section 15K.3, subsection 2, with respect to
26a tax year.
2710. “Tax year” means the calendar year, or the fiscal year
28ending during such calendar year, upon the basis of which a tax
29is calculated.
30 Sec. 3. NEW SECTION. 15K.3 Job training tax credit program
31— application — eligibility requirements.
321. Program administration. The authority, in consultation
33with the department of revenue, shall administer a job training
34tax credit program to provide tax credits to businesses that
35employ qualified trainees in Iowa during the tax year.
-1- 12. Qualified trainee. For purposes of the program, a person
2is a qualified trainee of a business if the person meets all of
3the following requirements for the tax year:
4a. The person is an apprentice or an intern.
5b. The person is employed by the business in Iowa.
6c. The person satisfies the relevant minimum training
7standard.
83. Minimum training standards.
9a. The authority shall establish by rule minimum training
10standards under the program for apprenticeships and internships
11that will reflect the minimum amount of training necessary to
12provide a meaningful work experience in the relevant field
13of study of an intern or to learn the relevant trade or job
14position of an apprentice. The minimum training standards
15shall be a value expressed as a number of job training hours,
16or a ratio of job training hours to work hours, or some
17combination of both.
18b. In determining the minimum training standards, the
19authority shall consider the relevant field of study involved,
20the trade or job position involved, the stated goals and length
21of the internship or apprenticeship, and any other factors the
22authority deems relevant. The authority may establish more
23than one minimum training standard.
24c. In establishing minimum training standards, the authority
25may consult with any person the authority deems relevant,
26including but not limited to the department of education,
27institutions of higher learning, or business and labor
28organizations.
294. Application.
30a. A business employing one or more qualified trainees in
31Iowa may apply to the authority for the job training tax credit
32provided in section 15K.4.
33b. The application shall be made in the manner and form
34prescribed by the authority.
35c. The authority may accept applications on a continuous
-2-1basis or may establish, by rule, an annual application
2deadline.
3d. The application shall include all of the following
4information:
5(1) A description of the business and the apprenticeship
6program or internship program conducted by the business,
7including the number of qualified trainees employed by the
8business during the relevant tax year.
9(2) With respect to each qualified trainee of the business:
10(a) The identity of the qualified trainee, the period
11of time the qualified trainee was employed by the business
12during the tax year, and if relevant, the institution of higher
13learning at which the qualified trainee is a student.
14(b) A description of the qualified trainee’s job duties and
15the number of hours those job duties were performed.
16(c) A description and total number of hours of job training
17and instruction provided by the business to the qualified
18trainee.
19(d) A statement from the business certifying that the
20apprentice or intern meets the relevant minimum training
21standard for the relevant tax year.
22(3) Any other information reasonably required by the
23authority in order to establish and verify eligibility under
24the program.
25e. Upon receiving a complete and accurate application and
26establishing that all requirements of the program have been
27satisfied, the authority shall issue a tax credit and related
28tax credit certificate to the business stating the amount of
29job training tax credit under section 15K.4 the business may
30claim.
31 Sec. 4. NEW SECTION. 15K.4 Job training tax credit.
321. a. A business that satisfies the requirements of the
33job training tax credit program in section 15K.3 may claim a
34tax credit in an amount equal to one thousand dollars for each
35qualified trainee employed in Iowa by the taxpayer for the
-3-1entire tax year.
2b. If the qualified trainee is not employed for the entire
3tax year, the maximum amount of the credit shall be prorated
4and the amount of the credit with regard to that qualified
5trainee shall equal the maximum amount of credit for the tax
6year, divided by twelve, multiplied by the number of months
7in the tax year the qualified trainee was employed by the
8taxpayer. The credit shall be rounded to the nearest dollar.
9If the qualified trainee was employed during any part of the
10month, the qualified trainee shall be considered a qualified
11trainee for the entire month.
122. An individual may claim the tax credit allowed a
13partnership, limited liability company, S corporation,
14estate, or trust electing to have income taxed directly to
15the individual. The amount claimed by the individual shall
16be based upon the pro rata share of the individual’s earnings
17from the partnership, limited liability company, S corporation,
18estate, or trust.
193. Any tax credit in excess of the taxpayer’s liability
20for the tax year is not refundable but may be credited to the
21tax liability for the following seven years or until depleted,
22whichever is earlier.
234. Tax credits issued under this section are not
24transferable to any person.
255. a. To claim a tax credit under this section, a taxpayer
26shall include one or more tax credit certificates with the
27taxpayer’s tax return.
28b. The tax credit certificate shall contain the taxpayer’s
29name, address, tax identification number, the amount of the
30credit, and any other information required by the department
31of revenue.
32c. The tax credit certificate, unless rescinded by the
33authority, shall be accepted by the department of revenue as
34payment for taxes imposed in chapter 422, divisions II, III,
35and V, and in chapter 432, and against the moneys and credits
-4-1tax imposed in section 533.329, subject to any conditions or
2restrictions placed by the authority or the department of
3revenue upon the face of the tax credit certificate and subject
4to the limitations of this program.
5 Sec. 5. NEW SECTION. 15K.5 Reports to general assembly.
6The authority, in cooperation with the department of
7revenue, shall publish an annual report of activities of the
8program and shall submit the report to the governor and the
9general assembly.
10 Sec. 6. NEW SECTION. 15K.6 Rules.
11The authority and the department of revenue shall each adopt
12rules as necessary for the implementation and administration of
13this chapter.
14 Sec. 7. NEW SECTION. 422.10C Job training tax credit.
15The taxes imposed under this division, less the credits
16allowed under section 422.12, shall be reduced by a job
17training tax credit allowed under chapter 15K.
18 Sec. 8. Section 422.33, Code 2019, is amended by adding the
19following new subsection:
20 NEW SUBSECTION. 17. The taxes imposed under this division
21shall be reduced by a job training tax credit allowed under
22chapter 15K.
23 Sec. 9. Section 422.60, Code 2019, is amended by adding the
24following new subsection:
25 NEW SUBSECTION. 14. The taxes imposed under this division
26shall be reduced by a job training tax credit allowed under
27chapter 15K.
28 Sec. 10. NEW SECTION. 432.12N Job training tax credit.
29The taxes imposed under this chapter shall be reduced by a
30job training tax credit allowed under chapter 15K.
31 Sec. 11. Section 533.329, subsection 2, Code 2019, is
32amended by adding the following new paragraph:
33 NEW PARAGRAPH. l. The moneys and credits tax imposed under
34this section shall be reduced by a job training tax credit
35allowed under chapter 15K.
-5-1 Sec. 12. APPLICABILITY. This Act applies to tax years
2beginning on or after January 1, 2020.
3 Sec. 13. APPLICABILITY. This Act applies to qualified
4trainees employed in Iowa on or after January 1, 2020.
5EXPLANATION
6The inclusion of this explanation does not constitute agreement with
7the explanation’s substance by the members of the general assembly.
8This bill creates a job training tax credit program
9(program) administered by the economic development authority
10(EDA) in consultation with the department of revenue (DOR)
11to provide tax credits to businesses that employ for pay
12qualified trainees in Iowa during the tax year. To qualify
13as a “qualified trainee” under the program, a person must be
14an apprentice or an intern, must be employed by a business in
15Iowa, and must satisfy the relevant minimum training standard.
16“Apprentice” is defined in the bill to mean an Iowa resident
17employed in an apprenticeable occupation and registered as such
18with the U.S. office of apprenticeship. “Intern” is defined
19in the bill to mean an Iowa college student, or a student who
20graduated from high school in Iowa but who now attends college
21outside of Iowa, who is engaged in temporary employment that
22focuses on providing the student with work experience in the
23student’s field of study.
24EDA is required to establish by rule minimum training
25standards that will reflect the minimum training necessary to
26provide a meaningful work experience for an intern or to learn
27a trade or job position for an apprentice. The bill describes
28how the minimum training standards should be quantified, as
29well as the factors EDA shall consider and the persons with
30whom EDA may consult in determining the standards. The bill
31provides that EDA may establish more than one minimum training
32standard.
33In order to receive a tax credit, a business must apply
34to the authority in the manner and form prescribed by the
35authority, and the bill describes the required information
-6-1that must be contained in an application. EDA is required to
2review applications and, upon determining that the requirements
3of the program have been satisfied, issue a tax credit to the
4business.
5The tax credit equals $1,000 for each qualified trainee
6employed in Iowa by a business for the entire tax year. If
7a qualified trainee was not employed by the business for the
8entire tax year, the amount of the credit is prorated based
9upon the number of months of employment. The tax credit
10may be claimed against the individual and corporate income
11taxes, the franchise tax, the insurance companies tax, and the
12moneys and credits tax. The tax credit is nonrefundable and
13nontransferable, but any excess may be carried forward for
14seven years.
15The bill requires EDA and DOR to adopt rules as necessary
16for the implementation of the bill, and requires EDA and DOR to
17publish and submit annual reports to the governor and general
18assembly containing information as described in the bill.
19The bill applies to tax years beginning on or after January
201, 2020, and to qualified trainees employed in Iowa on or after
21that date.
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