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House File 277 - IntroducedA Bill ForAn Act 1creating a tax credit against the individual and
2corporate income taxes, the franchise tax, insurance
3premiums tax, and the moneys and credits tax for a
4charitable contribution to certain institutions engaged in
5regenerative medicine research and including applicability
6provisions.
7BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. LEGISLATIVE FINDINGS AND PURPOSE. The general
2assembly finds that research on regenerative medicine has the
3potential to produce valuable advances in the field of medicine
4and that an increase in such research in this state could
5result in a substantial benefit to the state and its citizens.
6The purpose of the regenerative medicine research tax credit
7enacted in this Act is to induce taxpayers to make monetary
8contributions to regenerative medicine research institutions
9above amounts that would have been contributed absent state
10support, thereby increasing the overall level of funding
11available for regenerative medicine research in this state.
12 Sec. 2. Section 2.48, subsection 3, paragraph h, Code 2019,
13is amended to read as follows:
14h. In 2022, the renewable chemical production tax credit
15program available under sections 15.315 through 15.322 and
16the regenerative medicine research tax credit under section
17422.10C.
18 Sec. 3. NEW SECTION. 422.10C Regenerative medicine research
19tax credit.
201. Definitions. For purposes of this section, “certified
21regenerative medicine research institution” means an organization
22meeting the requirements of subsection 2 and certified by the
23department pursuant to that subsection.
242. Regenerative medicine research institution certification.
25a. An organization may apply to the department in the manner
26prescribed by the department to be certified as a regenerative
27medicine research institution.
28b. In order to be certified as a regenerative medicine
29research institution, an organization shall meet all of the
30following requirements:
31(1) The organization is organized under chapter 504 and
32qualifying under section 501(c)(3) of the Internal Revenue Code
33as an organization exempt from federal income tax under section
34501(a) of the Internal Revenue Code.
35(2) The organization has a principal place of business in
-1-1this state.
2(3) The organization is directly engaged in research in
3this state solely using adult stem cells, which research is
4designed to improve patient care through the development and
5dissemination of novel clinical therapies for the functional
6repair and replacement of diseased tissues and organs,
7including research for the treatment of cancer.
8(4) The organization spends at least fifty-one percent of
9its annual budget on laboratory or clinical research that is
10conducted by the organization and that meets the requirements
11of subparagraph (3).
12(5) The organization does not operate as a conduit
13for research by another organization by redistributing a
14contribution it receives to that other organization.
15(6) The organization is not a postsecondary institution or
16an entity receiving twenty-five percent or more of its annual
17budget from a postsecondary institution.
18(7) The organization agrees to provide to the department all
19of the following information:
20(a) Information to verify that the organization meets the
21requirements of subparagraphs (1) through (6), including but
22not limited to information relating to funding received by the
23organization and expenditures made on research and other items
24by the organization.
25(b) Information to verify the receipt, donor identity,
26value, and tax credit eligibility of contributions received by
27the organization.
28(c) Information regarding the amount of charitable
29contributions received by the organization prior to
30certification under this section, and the amount of charitable
31contributions received for each fiscal year the organization is
32a certified regenerative medicine research institution.
33(d) Any other information reasonably required by the
34department in order to properly administer this section.
35c. Unless certification is revoked pursuant to paragraph
-2-1“d”, a certification received pursuant to this subsection shall
2be valid for one year, at which time the organization may apply
3to the department in the manner prescribed by the department to
4become recertified pursuant to this subsection.
5d. An organization shall notify the department in a timely
6manner of any changes that affect the organization’s ability
7to qualify as a certified regenerative medicine research
8institution. The department shall revoke the certification of
9an organization certified pursuant to this subsection if that
10organization subsequently fails to meet the requirements of
11paragraph “b”. The revocation of a certification under this
12paragraph shall not prohibit an organization from subsequently
13applying to be certified under this subsection.
143. Application.
15a. To receive a tax credit under this section, a taxpayer
16must submit an application to the department in the manner and
17form prescribed by the department on or after the date of the
18charitable contribution to the certified regenerative medicine
19research institution for which the tax credit is sought.
20b. The department shall issue tax credits and related
21tax credit certificates on a first-come, first-served basis
22in the order the applications are received until the maximum
23amount of tax credits authorized pursuant to subsection 4
24is reached. If for a fiscal year the maximum amount of tax
25credits applied for exceeds the amount specified in subsection
264, the department shall establish a wait list for tax credits.
27Valid applications received but not approved by the department
28shall be placed on a wait list in the order the applications
29were received and those applicants shall be given priority for
30receiving tax credits in succeeding fiscal years. Placement
31on a wait list pursuant to this paragraph shall not constitute
32a promise binding the state. The availability of a tax
33credit and approval of a tax credit application pursuant to
34this section in a future fiscal year is contingent upon the
35availability of tax credits in that particular year.
-3- 14. Maximum tax credit amounts. The maximum aggregate amount
2of tax credits issued in a fiscal year pursuant to this section
3shall not exceed two million dollars.
45. Regenerative medicine research tax credit.
5a. The taxes imposed under this division, less the credits
6allowed under section 422.12, or the taxes imposed in division
7III or V of this chapter, or the taxes imposed in chapter 432,
8or the moneys and credits tax imposed in section 533.329, shall
9be reduced by a regenerative medicine research tax credit equal
10to sixty percent of a taxpayer’s charitable contribution to a
11certified regenerative medicine research institution.
12b. An individual may claim the tax credit allowed a
13partnership, limited liability company, S corporation, estate,
14or trust electing to have the income taxed directly to the
15individual. The amount claimed by the individual shall be
16based upon the pro rata share of the individual’s earnings of
17the partnership, limited liability company, S corporation,
18estate, or trust.
19c. For tax credit certificates issued by the department in
20the fiscal year during which the charitable contribution is
21made, the tax credit shall be claimed for the applicant’s tax
22year during which the charitable contribution is made. For tax
23credit certificates issued in any fiscal year following the
24fiscal year during which the charitable contribution is made,
25the tax credit shall be claimed for the applicant’s tax year
26during which the tax credit is issued by the department. For
27an individual claiming the tax credit allowed another entity
28pursuant to paragraph “b”, the tax credit shall be claimed for
29the individual’s tax year beginning on or after the first day
30of the tax year for which the other entity was allowed to claim
31the tax credit.
32d. Any tax credit in excess of the taxpayer’s tax liability
33is not refundable but the excess for the tax year may be
34credited to the tax liability for the following four years or
35until depleted, whichever is earlier. A tax credit shall not
-4-1be carried back to a prior tax year.
2e. (1) To claim a tax credit under this section, a taxpayer
3shall include one or more tax credit certificates with the
4taxpayer’s tax return.
5(2) The tax credit certificate shall contain the taxpayer’s
6name, address, tax identification number, the amount of the
7credit, and any other information required by the department.
8(3) The tax credit certificate, unless rescinded by the
9department, shall be accepted by the department as payment
10for the taxes imposed under this division, division III or V
11of this chapter, chapter 432, and section 533.329, subject
12to any conditions or restrictions placed by the department
13upon the face of the tax credit certificate and subject to the
14limitations of this section.
15f. The amount of the charitable contribution for which the
16tax credit is claimed shall not be deductible in determining
17taxable income for state tax purposes.
18 Sec. 4. Section 422.33, Code 2019, is amended by adding the
19following new subsection:
20 NEW SUBSECTION. 27. The taxes imposed under this division
21shall be reduced by a regenerative medicine research tax credit
22in the same manner, for the same amount, and under the same
23conditions as provided in section 422.10C.
24 Sec. 5. Section 422.60, Code 2019, is amended by adding the
25following new subsection:
26 NEW SUBSECTION. 14. The taxes imposed under this division
27shall be reduced by a regenerative medicine research tax credit
28in the same manner, for the same amount, and under the same
29conditions as provided in section 422.10C.
30 Sec. 6. NEW SECTION. 432.12N Regenerative medicine research
31tax credit.
32The taxes imposed under this chapter shall be reduced by a
33regenerative medicine research tax credit in the same manner,
34for the same amount, and under the same conditions as provided
35in section 422.10C.
-5-1 Sec. 7. Section 533.329, subsection 2, Code 2019, is amended
2by adding the following new paragraph:
3 NEW PARAGRAPH. l. The moneys and credits tax imposed
4under this section shall be reduced by a regenerative medicine
5research tax credit in the same manner, for the same amount,
6and under the same conditions as provided in section 422.10C.
7 Sec. 8. APPLICABILITY. This Act applies to charitable
8contributions to a certified regenerative medicine research
9institution made on or after January 1, 2020.
10 Sec. 9. TAX CREDIT CERTIFICATE ISSUANCES. Tax credit
11certificates available pursuant to the regenerative medicine
12research tax credit enacted in this Act shall not be issued by
13the department of revenue prior to July 1, 2020.
14EXPLANATION
15The inclusion of this explanation does not constitute agreement with
16the explanation’s substance by the members of the general assembly.
17This bill provides a tax credit against the individual or
18corporate income tax, the franchise tax, the insurance premiums
19tax, and the moneys and credits tax for 60 percent of a
20taxpayer’s charitable contribution to a certified regenerative
21medicine research institution.
22Regenerative medicine research institutions must apply
23for and receive certification from the department of revenue
24(department) as described in the bill in order for charitable
25contributions to that institution to qualify for the tax
26credit. To qualify for certification, a regenerative medicine
27research institution must be a tax-exempt organization under
28section 501(c)(3) of the Internal Revenue Code, must have
29its principal place of business in Iowa, must be directly
30engaged in research in this state solely using adult stem
31cells designed to develop novel clinical therapies for the
32functional repair and replacement of diseased tissues and
33organs, including cancer research, must spend at least 51
34percent of its annual budget on such research, and must agree
35to provide the department with certain information necessary
-6-1to verify eligibility for the tax credits. In addition, a
2regenerative medicine research institution must not be a
3conduit for research by another organization, and must not be
4a postsecondary institution or an entity receiving 25 percent
5or more of its annual budget from a postsecondary institution.
6Certification by the department is valid for one year, at which
7time regenerative medicine research institutions may apply for
8recertification.
9In order to claim the tax credit, a taxpayer must submit an
10application to the department as described in the bill on or
11after the date of the charitable contribution and receive a
12tax credit certificate. No more than $2 million in tax credit
13certificates may be issued per fiscal year. If applications
14for the tax credit exceed that amount in a fiscal year, the
15department is required to establish a wait list in the order
16the applications were received and those applications will
17receive priority for receiving tax credits in succeeding years.
18The bill provides procedures for when a tax credit shall be
19claimed by a taxpayer. The tax credit is nonrefundable, but
20any amount in excess of the taxpayer’s tax liability may be
21carried forward for up to four years. The tax credit cannot
22be carried back to a prior tax year. The bill prohibits
23contributions receiving a tax credit from also being deducted
24as a charitable contribution.
25Finally, the bill includes legislative findings and a
26legislative purpose for the tax credit, and adds the tax
27credit to the list of tax expenditures to be reviewed by the
28legislative tax expenditure committee beginning in 2022.
29The bill applies to charitable contributions to a certified
30regenerative medicine research institution made on or after
31January 1, 2020. However, the bill provides that tax credit
32certificates shall not be issued by the department prior to
33July 1, 2020.
-7-jm/jh
2corporate income taxes, the franchise tax, insurance
3premiums tax, and the moneys and credits tax for a
4charitable contribution to certain institutions engaged in
5regenerative medicine research and including applicability
6provisions.
7BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. LEGISLATIVE FINDINGS AND PURPOSE. The general
2assembly finds that research on regenerative medicine has the
3potential to produce valuable advances in the field of medicine
4and that an increase in such research in this state could
5result in a substantial benefit to the state and its citizens.
6The purpose of the regenerative medicine research tax credit
7enacted in this Act is to induce taxpayers to make monetary
8contributions to regenerative medicine research institutions
9above amounts that would have been contributed absent state
10support, thereby increasing the overall level of funding
11available for regenerative medicine research in this state.
12 Sec. 2. Section 2.48, subsection 3, paragraph h, Code 2019,
13is amended to read as follows:
14h. In 2022, the renewable chemical production tax credit
15program available under sections 15.315 through 15.322 and
16the regenerative medicine research tax credit under section
17422.10C.
18 Sec. 3. NEW SECTION. 422.10C Regenerative medicine research
19tax credit.
201. Definitions. For purposes of this section, “certified
21regenerative medicine research institution” means an organization
22meeting the requirements of subsection 2 and certified by the
23department pursuant to that subsection.
242. Regenerative medicine research institution certification.
25a. An organization may apply to the department in the manner
26prescribed by the department to be certified as a regenerative
27medicine research institution.
28b. In order to be certified as a regenerative medicine
29research institution, an organization shall meet all of the
30following requirements:
31(1) The organization is organized under chapter 504 and
32qualifying under section 501(c)(3) of the Internal Revenue Code
33as an organization exempt from federal income tax under section
34501(a) of the Internal Revenue Code.
35(2) The organization has a principal place of business in
-1-1this state.
2(3) The organization is directly engaged in research in
3this state solely using adult stem cells, which research is
4designed to improve patient care through the development and
5dissemination of novel clinical therapies for the functional
6repair and replacement of diseased tissues and organs,
7including research for the treatment of cancer.
8(4) The organization spends at least fifty-one percent of
9its annual budget on laboratory or clinical research that is
10conducted by the organization and that meets the requirements
11of subparagraph (3).
12(5) The organization does not operate as a conduit
13for research by another organization by redistributing a
14contribution it receives to that other organization.
15(6) The organization is not a postsecondary institution or
16an entity receiving twenty-five percent or more of its annual
17budget from a postsecondary institution.
18(7) The organization agrees to provide to the department all
19of the following information:
20(a) Information to verify that the organization meets the
21requirements of subparagraphs (1) through (6), including but
22not limited to information relating to funding received by the
23organization and expenditures made on research and other items
24by the organization.
25(b) Information to verify the receipt, donor identity,
26value, and tax credit eligibility of contributions received by
27the organization.
28(c) Information regarding the amount of charitable
29contributions received by the organization prior to
30certification under this section, and the amount of charitable
31contributions received for each fiscal year the organization is
32a certified regenerative medicine research institution.
33(d) Any other information reasonably required by the
34department in order to properly administer this section.
35c. Unless certification is revoked pursuant to paragraph
-2-1“d”, a certification received pursuant to this subsection shall
2be valid for one year, at which time the organization may apply
3to the department in the manner prescribed by the department to
4become recertified pursuant to this subsection.
5d. An organization shall notify the department in a timely
6manner of any changes that affect the organization’s ability
7to qualify as a certified regenerative medicine research
8institution. The department shall revoke the certification of
9an organization certified pursuant to this subsection if that
10organization subsequently fails to meet the requirements of
11paragraph “b”. The revocation of a certification under this
12paragraph shall not prohibit an organization from subsequently
13applying to be certified under this subsection.
143. Application.
15a. To receive a tax credit under this section, a taxpayer
16must submit an application to the department in the manner and
17form prescribed by the department on or after the date of the
18charitable contribution to the certified regenerative medicine
19research institution for which the tax credit is sought.
20b. The department shall issue tax credits and related
21tax credit certificates on a first-come, first-served basis
22in the order the applications are received until the maximum
23amount of tax credits authorized pursuant to subsection 4
24is reached. If for a fiscal year the maximum amount of tax
25credits applied for exceeds the amount specified in subsection
264, the department shall establish a wait list for tax credits.
27Valid applications received but not approved by the department
28shall be placed on a wait list in the order the applications
29were received and those applicants shall be given priority for
30receiving tax credits in succeeding fiscal years. Placement
31on a wait list pursuant to this paragraph shall not constitute
32a promise binding the state. The availability of a tax
33credit and approval of a tax credit application pursuant to
34this section in a future fiscal year is contingent upon the
35availability of tax credits in that particular year.
-3- 14. Maximum tax credit amounts. The maximum aggregate amount
2of tax credits issued in a fiscal year pursuant to this section
3shall not exceed two million dollars.
45. Regenerative medicine research tax credit.
5a. The taxes imposed under this division, less the credits
6allowed under section 422.12, or the taxes imposed in division
7III or V of this chapter, or the taxes imposed in chapter 432,
8or the moneys and credits tax imposed in section 533.329, shall
9be reduced by a regenerative medicine research tax credit equal
10to sixty percent of a taxpayer’s charitable contribution to a
11certified regenerative medicine research institution.
12b. An individual may claim the tax credit allowed a
13partnership, limited liability company, S corporation, estate,
14or trust electing to have the income taxed directly to the
15individual. The amount claimed by the individual shall be
16based upon the pro rata share of the individual’s earnings of
17the partnership, limited liability company, S corporation,
18estate, or trust.
19c. For tax credit certificates issued by the department in
20the fiscal year during which the charitable contribution is
21made, the tax credit shall be claimed for the applicant’s tax
22year during which the charitable contribution is made. For tax
23credit certificates issued in any fiscal year following the
24fiscal year during which the charitable contribution is made,
25the tax credit shall be claimed for the applicant’s tax year
26during which the tax credit is issued by the department. For
27an individual claiming the tax credit allowed another entity
28pursuant to paragraph “b”, the tax credit shall be claimed for
29the individual’s tax year beginning on or after the first day
30of the tax year for which the other entity was allowed to claim
31the tax credit.
32d. Any tax credit in excess of the taxpayer’s tax liability
33is not refundable but the excess for the tax year may be
34credited to the tax liability for the following four years or
35until depleted, whichever is earlier. A tax credit shall not
-4-1be carried back to a prior tax year.
2e. (1) To claim a tax credit under this section, a taxpayer
3shall include one or more tax credit certificates with the
4taxpayer’s tax return.
5(2) The tax credit certificate shall contain the taxpayer’s
6name, address, tax identification number, the amount of the
7credit, and any other information required by the department.
8(3) The tax credit certificate, unless rescinded by the
9department, shall be accepted by the department as payment
10for the taxes imposed under this division, division III or V
11of this chapter, chapter 432, and section 533.329, subject
12to any conditions or restrictions placed by the department
13upon the face of the tax credit certificate and subject to the
14limitations of this section.
15f. The amount of the charitable contribution for which the
16tax credit is claimed shall not be deductible in determining
17taxable income for state tax purposes.
18 Sec. 4. Section 422.33, Code 2019, is amended by adding the
19following new subsection:
20 NEW SUBSECTION. 27. The taxes imposed under this division
21shall be reduced by a regenerative medicine research tax credit
22in the same manner, for the same amount, and under the same
23conditions as provided in section 422.10C.
24 Sec. 5. Section 422.60, Code 2019, is amended by adding the
25following new subsection:
26 NEW SUBSECTION. 14. The taxes imposed under this division
27shall be reduced by a regenerative medicine research tax credit
28in the same manner, for the same amount, and under the same
29conditions as provided in section 422.10C.
30 Sec. 6. NEW SECTION. 432.12N Regenerative medicine research
31tax credit.
32The taxes imposed under this chapter shall be reduced by a
33regenerative medicine research tax credit in the same manner,
34for the same amount, and under the same conditions as provided
35in section 422.10C.
-5-1 Sec. 7. Section 533.329, subsection 2, Code 2019, is amended
2by adding the following new paragraph:
3 NEW PARAGRAPH. l. The moneys and credits tax imposed
4under this section shall be reduced by a regenerative medicine
5research tax credit in the same manner, for the same amount,
6and under the same conditions as provided in section 422.10C.
7 Sec. 8. APPLICABILITY. This Act applies to charitable
8contributions to a certified regenerative medicine research
9institution made on or after January 1, 2020.
10 Sec. 9. TAX CREDIT CERTIFICATE ISSUANCES. Tax credit
11certificates available pursuant to the regenerative medicine
12research tax credit enacted in this Act shall not be issued by
13the department of revenue prior to July 1, 2020.
14EXPLANATION
15The inclusion of this explanation does not constitute agreement with
16the explanation’s substance by the members of the general assembly.
17This bill provides a tax credit against the individual or
18corporate income tax, the franchise tax, the insurance premiums
19tax, and the moneys and credits tax for 60 percent of a
20taxpayer’s charitable contribution to a certified regenerative
21medicine research institution.
22Regenerative medicine research institutions must apply
23for and receive certification from the department of revenue
24(department) as described in the bill in order for charitable
25contributions to that institution to qualify for the tax
26credit. To qualify for certification, a regenerative medicine
27research institution must be a tax-exempt organization under
28section 501(c)(3) of the Internal Revenue Code, must have
29its principal place of business in Iowa, must be directly
30engaged in research in this state solely using adult stem
31cells designed to develop novel clinical therapies for the
32functional repair and replacement of diseased tissues and
33organs, including cancer research, must spend at least 51
34percent of its annual budget on such research, and must agree
35to provide the department with certain information necessary
-6-1to verify eligibility for the tax credits. In addition, a
2regenerative medicine research institution must not be a
3conduit for research by another organization, and must not be
4a postsecondary institution or an entity receiving 25 percent
5or more of its annual budget from a postsecondary institution.
6Certification by the department is valid for one year, at which
7time regenerative medicine research institutions may apply for
8recertification.
9In order to claim the tax credit, a taxpayer must submit an
10application to the department as described in the bill on or
11after the date of the charitable contribution and receive a
12tax credit certificate. No more than $2 million in tax credit
13certificates may be issued per fiscal year. If applications
14for the tax credit exceed that amount in a fiscal year, the
15department is required to establish a wait list in the order
16the applications were received and those applications will
17receive priority for receiving tax credits in succeeding years.
18The bill provides procedures for when a tax credit shall be
19claimed by a taxpayer. The tax credit is nonrefundable, but
20any amount in excess of the taxpayer’s tax liability may be
21carried forward for up to four years. The tax credit cannot
22be carried back to a prior tax year. The bill prohibits
23contributions receiving a tax credit from also being deducted
24as a charitable contribution.
25Finally, the bill includes legislative findings and a
26legislative purpose for the tax credit, and adds the tax
27credit to the list of tax expenditures to be reviewed by the
28legislative tax expenditure committee beginning in 2022.
29The bill applies to charitable contributions to a certified
30regenerative medicine research institution made on or after
31January 1, 2020. However, the bill provides that tax credit
32certificates shall not be issued by the department prior to
33July 1, 2020.
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