House File 112 - IntroducedA Bill ForAn Act 1relating to certain tax credits and assistance awarded
2by the economic development authority, and including
3effective date provisions.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1   Section 1.  Section 15.119, subsection 2, paragraphs d and e,
2Code 2021, are amended to read as follows:
   3d.  The tax credits for investments in qualifying businesses
4issued pursuant to section 15E.43. In allocating tax credits
5pursuant to this subsection, the authority shall allocate at
6least
two million but not more than four million dollars for
7purposes of this paragraph, unless the authority determines
8that the tax credits awarded will be less than that amount.
   9e.  The tax credits for investments in an innovation fund
10pursuant to section 15E.52. In allocating tax credits pursuant
11to this subsection, the authority shall allocate at least six
12million but not more than
eight million dollars for purposes of
13this paragraph, unless the authority determines that the tax
14credits awarded will be less than that amount.
15   Sec. 2.  Section 15.119, Code 2021, is amended by adding the
16following new subsection:
17   NEW SUBSECTION.  2A.  On or before June 30 of each year,
18the authority shall determine the amount of tax credits that
19shall be issued pursuant to sections 15E.43 and 15E.52 for
20the following fiscal year. In allocating the amount of tax
21credits authorized pursuant to subsection 1 among the programs
22specified in subsection 2, the aggregate amount allocated by
23the authority for purposes of subsection 2, paragraphs “d” and
24“e”, shall not exceed ten million dollars.
25   Sec. 3.  Section 15.327, Code 2021, is amended by adding the
26following new subsection:
27   NEW SUBSECTION.  27.  “Rural community” means any city
28located in this state with a population of thirty thousand
29or less in a county with a population of fifty thousand or
30less. A rural community located in more than one county shall
31be considered to be located in the county having the greatest
32taxable base within the city.
33   Sec. 4.  Section 15.335A, subsection 1, unnumbered paragraph
341, Code 2021, is amended to read as follows:
   35Tax incentives are available to eligible businesses as
-1-1provided in this section subsection and subsection 1A. The
2incentives are based upon the number of jobs created or
3retained that pay at least one hundred twenty percent of the
4qualifying wage threshold and the amount of the qualifying
5investment made according to the following schedule:
6   Sec. 5.  Section 15.335A, Code 2021, is amended by adding the
7following new subsection:
8   NEW SUBSECTION.  1A.  Tax incentives are available to
9eligible businesses located in rural communities as provided
10in this subsection. The incentives are based upon the number
11of jobs created or retained that pay at least one hundred ten
12percent of the qualifying wage threshold and the amount of the
13qualifying investment made according to the following schedule:
   14a.  The number of jobs is zero and economic activity is
15furthered by the qualifying investment and the amount of the
16qualifying investment is one of the following:
   17(1)  Less than fifty thousand dollars, then the tax incentive
18is the investment tax credit of up to two percent.
   19(2)  At least fifty thousand dollars but less than two
20hundred fifty thousand dollars, then the tax incentives are the
21investment tax credit of up to two percent and the sales tax
22refund.
   23(3)  At least two hundred fifty thousand dollars, then the
24tax incentives are the investment tax credit of up to two
25percent, the sales tax refund, and the additional research and
26development tax credit.
   27b.  The number of jobs is one but not more than five and the
28amount of the qualifying investment is one of the following:
   29(1)  Less than fifty thousand dollars, then the tax incentive
30is the investment tax credit of up to three percent.
   31(2)  At least fifty thousand dollars but less than two
32hundred fifty thousand dollars, then the tax incentives are the
33investment tax credit of up to three percent and the sales tax
34refund.
   35(3)  At least two hundred fifty thousand dollars, then the
-2-1tax incentives are the investment tax credit of up to three
2percent, the sales tax refund, and the additional research and
3development tax credit.
   4c.  The number of jobs is six but not more than ten and the
5amount of the qualifying investment is one of the following:
   6(1)  Less than fifty thousand dollars, then the tax incentive
7is the investment tax credit of up to four percent.
   8(2)  At least fifty thousand dollars but less than two
9hundred fifty thousand dollars, then the tax incentives are the
10investment tax credit of up to four percent and the sales tax
11refund.
   12(3)  At least two hundred fifty thousand dollars, then the
13tax incentives are the investment tax credit of up to four
14percent, the sales tax refund, and the additional research and
15development tax credit.
   16d.  The number of jobs is eleven but not more than fifteen
17and the amount of the qualifying investment is one of the
18following:
   19(1)  Less than fifty thousand dollars, then the tax incentive
20is the investment tax credit of up to five percent.
   21(2)  At least fifty thousand dollars but less than two
22hundred fifty thousand dollars, then the tax incentives are the
23investment tax credit of up to five percent and the sales tax
24refund.
   25(3)  At least two hundred fifty thousand dollars, then the
26tax incentives are the investment tax credit of up to five
27percent, the sales tax refund, and the additional research and
28development tax credit.
   29e.  The number of jobs is sixteen or more and the amount of
30the qualifying investment is one of the following:
   31(1)  Less than fifty thousand dollars, then the tax incentive
32is the investment tax credit of up to six percent.
   33(2)  At least fifty thousand dollars but less than two
34hundred fifty thousand dollars, then the tax incentives are the
35investment tax credit of up to six percent and the sales tax
-3-1refund.
   2(3)  At least two hundred fifty thousand dollars, then the
3tax incentives are the investment tax credit of up to six
4percent, the sales tax refund, and the additional research and
5development tax credit.
   6f.  The number of jobs is thirty-one but not more than forty
7and the amount of the qualifying investment is at least five
8million dollars, then the tax incentives are the local property
9tax exemption, the investment tax credit of up to seven
10percent, the sales tax refund, and the additional research and
11development tax credit.
   12g.  The number of jobs is forty-one but not more than sixty
13and the amount of the qualifying investment is at least five
14million dollars, then the tax incentives are the local property
15tax exemption, the investment tax credit of up to eight
16percent, the sales tax refund, and the additional research and
17development tax credit.
   18h.  The number of jobs is sixty-one but not more than
19eighty and the amount of the qualifying investment is at least
20five million dollars, then the tax incentives are the local
21property tax exemption, the investment tax credit of up to nine
22percent, the sales tax refund, and the additional research and
23development tax credit.
   24i.  The number of jobs is eighty-one but not more than one
25hundred and the amount of the qualifying investment is at least
26five million dollars, then the tax incentives are the local
27property tax exemption, the investment tax credit of up to ten
28percent, the sales tax refund, and the additional research and
29development tax credit.
   30j.  The number of jobs is at least one hundred one and the
31amount of the qualifying investment is at least ten million
32dollars, then the tax incentives are the local property
33tax exemption, the investment tax credit of up to eleven
34percent, the sales tax refund, and the additional research and
35development tax credit.
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1   Sec. 6.  Section 15.335B, subsection 3, paragraph c, Code
22021, is amended to read as follows:
   3c.  (1)  Consider the amount and type of the local community
4match. The as follows:
   5(a)  In a community with a population of less than five
6thousand, a community match shall not be required.
   7(b)  In a community with a population equal to or greater
8than five thousand, but less than fifteen thousand, a community
9match of at least five percent of the projected funds to be
10expended by the eligible business shall be required.
   11(c)  In a community with a population equal to or greater
12than fifteen thousand, but less than thirty thousand, a
13community match of at least ten percent of the projected funds
14to be expended by the eligible business shall be required.
   15(d)  In a community with a population equal to or greater
16than thirty thousand, a community match of at least twenty
17percent of the projected funds to be expended by the eligible
18business shall be required.
   19(2)   Notwithstanding subparagraph (1), theauthority may
20provide assistance to an early-stage business in a high-growth
21industry regardless of the amount of local match involved.
22   Sec. 7.  NEW SECTION.  15.337A  Rules.
   23The authority shall adopt rules pursuant to chapter 17A to
24administer this part.
25   Sec. 8.  Section 15E.43, subsection 2, paragraphs b and c,
26Code 2021, are amended to read as follows:
   27b.  The maximum amount of a tax credit that may be issued
28per calendar fiscal year to a natural person and the person’s
29spouse or dependent shall not exceed one hundred thousand
30dollars combined. For purposes of this paragraph, a tax
31credit issued to a partnership, limited liability company, S
32corporation, estate, or trust electing to have income taxed
33directly to the individual shall be deemed to be issued to
34the individual owners based upon the pro rata share of the
35individual’s earnings from the entity. For purposes of this
-5-1paragraph, “dependent” has the same meaning as provided by the
2Internal Revenue Code.
   3c.  The maximum amount of tax credits that may be issued
4per calendar fiscal year for equity investments in any one
5qualifying business shall not exceed five hundred thousand
6dollars.
7   Sec. 9.  EFFECTIVE DATE.  This Act, being deemed of immediate
8importance, takes effect upon enactment.
9EXPLANATION
10The inclusion of this explanation does not constitute agreement with
11the explanation’s substance by the members of the general assembly.
   12This bill relates to certain tax credits and assistance
13awarded by the economic development authority.
   14The bill directs the economic development authority to
15determine on or before June 30 of each year the amount of tax
16credits that will be issued for the following fiscal year
17for equity investments in qualifying businesses pursuant to
18Code section 15E.43 and in innovation funds pursuant to Code
19section 15E.52. The bill caps the aggregate amount of these
20tax credits at $10 million.
   21The bill changes the maximum amount of tax credits that may
22be issued in a year to a natural person and the person’s spouse
23or dependant, or for equity investments in any one qualifying
24business, from a calendar year basis to a fiscal year basis.
   25The bill provides for tax incentives for eligible businesses
26in rural communities. “Rural community” is defined in the bill
27as a city located in this state with a population of 30,000 or
28less in a county with a population of 50,000 or less. If the
29rural community is located in more than one county, the rural
30community is considered to be located in the county that has
31the greatest taxable base within the city. The tax incentives
32are based upon the number of jobs created or retained that pay
33at least 110 percent of the qualifying wage threshold and the
34amount of the qualifying investment. The tax incentives are
35based upon a schedule as detailed in the bill.
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   1The bill also details the requirements for a community
2match, based on the size of the community, in order for an
3eligible business to be awarded assistance by the authority
4from the fund created in Code section 15.335B.
   5The bill directs the authority to adopt rules to administer
6the high quality jobs program.
   7The bill takes effect upon enactment.
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