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Senate Study Bill 1196 - IntroducedA Bill ForAn Act 1relating to investment tax credits and innovation fund
2tax credits, and including effective date and applicability
3provisions.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 15.119, subsection 2, paragraph d, Code
22021, is amended to read as follows:
3d. (1) The tax credits for investments in qualifying
4businesses issued pursuant to section 15E.43 and for equity
5investments in an innovation fund pursuant to section 15E.52.
6In allocating tax credits pursuant to this subsection, the
7authority shall allocate two an aggregate of ten million
8dollars for purposes of this paragraph subparagraph, unless the
9authority determines that the tax credits awarded will be less
10than that amount.
11(2) On or before June 30 of each fiscal year the authority
12shall determine the amount of tax credits to be allocated
13for the next fiscal year beginning July 1 to investments
14in qualifying businesses and to equity investments in an
15innovation fund under subparagraph (1). Any tax credits
16allocated for purposes of subparagraph (1) and not awarded
17in that fiscal year shall be reallocated to a purpose under
18subparagraph (1) for the next fiscal year and shall not be
19counted against the aggregate maximum of ten million dollars.
20 Sec. 2. Section 15.119, subsection 2, paragraph e, Code
212021, is amended by striking the paragraph.
22 Sec. 3. Section 15E.43, subsection 2, paragraphs b and c,
23Code 2021, are amended to read as follows:
24b. The maximum amount of a tax credit that may be issued
25per calendar fiscal year to a natural person and the person’s
26spouse or dependent shall not exceed one hundred thousand
27dollars combined. For purposes of this paragraph, a tax
28credit issued to a partnership, limited liability company, S
29corporation, estate, or trust electing to have income taxed
30directly to the individual shall be deemed to be issued to
31the individual owners based upon the pro rata share of the
32individual’s earnings from the entity. For purposes of this
33paragraph, “dependent” has the same meaning as provided by the
34Internal Revenue Code.
35c. The maximum amount of tax credits that may be issued
-1-1per calendar fiscal year for equity investments in any one
2qualifying business shall not exceed five hundred thousand
3dollars.
4 Sec. 4. EFFECTIVE DATE. This Act, being deemed of immediate
5importance, takes effect upon enactment.
6 Sec. 5. APPLICABILITY. The following applies to tax credits
7allocated on or after the fiscal year beginning July 1, 2021,
8and for each fiscal year thereafter:
9The section of this Act amending section 15.119, subsection
102, paragraph “d”.
11EXPLANATION
12The inclusion of this explanation does not constitute agreement with
13the explanation’s substance by the members of the general assembly.
14This bill relates to investment tax credits and innovation
15fund tax credits.
16Under current law the economic development authority
17(authority) must allocate $2 million to investments in
18qualifying businesses and $8 million to equity investments
19in innovation funds (equity investments). The bill limits
20the authority’s tax credit allocations for investments in
21qualifying businesses and equity investments to a maximum
22aggregate of $10 million. The bill requires the authority
23to determine on or before June 30 of each fiscal year the
24amount of tax credits to be allocated to each. In addition,
25any amount of tax credits allocated and not awarded in that
26fiscal year must be reallocated to either investments in
27qualifying businesses or to equity investments for the next
28fiscal year, and those tax credits do not count towards the
29maximum aggregate of $10 million. This applies to tax credits
30allocated on or after the fiscal year beginning July 1, 2021,
31and for each fiscal year thereafter.
32The bill modifies the maximum amount of an investment tax
33credit that may be issued to a natural person and the person’s
34spouse or dependent from a calendar year basis to a fiscal year
35basis. The maximum amount of tax credits that may be issued
-2-1for equity investments in any one qualifying business is also
2modified from a calendar year to a fiscal year.
3The bill is effective upon enactment.
-3-ko/jh
2tax credits, and including effective date and applicability
3provisions.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 15.119, subsection 2, paragraph d, Code
22021, is amended to read as follows:
3d. (1) The tax credits for investments in qualifying
4businesses issued pursuant to section 15E.43 and for equity
5investments in an innovation fund pursuant to section 15E.52.
6In allocating tax credits pursuant to this subsection, the
7authority shall allocate two an aggregate of ten million
8dollars for purposes of this paragraph subparagraph, unless the
9authority determines that the tax credits awarded will be less
10than that amount.
11(2) On or before June 30 of each fiscal year the authority
12shall determine the amount of tax credits to be allocated
13for the next fiscal year beginning July 1 to investments
14in qualifying businesses and to equity investments in an
15innovation fund under subparagraph (1). Any tax credits
16allocated for purposes of subparagraph (1) and not awarded
17in that fiscal year shall be reallocated to a purpose under
18subparagraph (1) for the next fiscal year and shall not be
19counted against the aggregate maximum of ten million dollars.
20 Sec. 2. Section 15.119, subsection 2, paragraph e, Code
212021, is amended by striking the paragraph.
22 Sec. 3. Section 15E.43, subsection 2, paragraphs b and c,
23Code 2021, are amended to read as follows:
24b. The maximum amount of a tax credit that may be issued
25per calendar fiscal year to a natural person and the person’s
26spouse or dependent shall not exceed one hundred thousand
27dollars combined. For purposes of this paragraph, a tax
28credit issued to a partnership, limited liability company, S
29corporation, estate, or trust electing to have income taxed
30directly to the individual shall be deemed to be issued to
31the individual owners based upon the pro rata share of the
32individual’s earnings from the entity. For purposes of this
33paragraph, “dependent” has the same meaning as provided by the
34Internal Revenue Code.
35c. The maximum amount of tax credits that may be issued
-1-1per calendar fiscal year for equity investments in any one
2qualifying business shall not exceed five hundred thousand
3dollars.
4 Sec. 4. EFFECTIVE DATE. This Act, being deemed of immediate
5importance, takes effect upon enactment.
6 Sec. 5. APPLICABILITY. The following applies to tax credits
7allocated on or after the fiscal year beginning July 1, 2021,
8and for each fiscal year thereafter:
9The section of this Act amending section 15.119, subsection
102, paragraph “d”.
11EXPLANATION
12The inclusion of this explanation does not constitute agreement with
13the explanation’s substance by the members of the general assembly.
14This bill relates to investment tax credits and innovation
15fund tax credits.
16Under current law the economic development authority
17(authority) must allocate $2 million to investments in
18qualifying businesses and $8 million to equity investments
19in innovation funds (equity investments). The bill limits
20the authority’s tax credit allocations for investments in
21qualifying businesses and equity investments to a maximum
22aggregate of $10 million. The bill requires the authority
23to determine on or before June 30 of each fiscal year the
24amount of tax credits to be allocated to each. In addition,
25any amount of tax credits allocated and not awarded in that
26fiscal year must be reallocated to either investments in
27qualifying businesses or to equity investments for the next
28fiscal year, and those tax credits do not count towards the
29maximum aggregate of $10 million. This applies to tax credits
30allocated on or after the fiscal year beginning July 1, 2021,
31and for each fiscal year thereafter.
32The bill modifies the maximum amount of an investment tax
33credit that may be issued to a natural person and the person’s
34spouse or dependent from a calendar year basis to a fiscal year
35basis. The maximum amount of tax credits that may be issued
-2-1for equity investments in any one qualifying business is also
2modified from a calendar year to a fiscal year.
3The bill is effective upon enactment.
-3-ko/jh