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Senate Study Bill 1276 - IntroducedA Bill ForAn Act 1relating to state and local revenue and finance by
2modifying future tax contingencies, the state inheritance
3tax, mental health and disability services funding, school
4district funding, commercial and industrial property tax
5replacement payments, providing for housing incentives,
6providing for other properly related matters, making
7appropriations, and including effective date, applicability,
8and retroactive applicability provisions.
9BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2FUTURE TAX Contingencies
3 Section 1. 2018 Iowa Acts, chapter 1161, section 133, is
4amended by striking the section and inserting in lieu thereof
5the following:
6SEC. 133. EFFECTIVE DATE. This division of this Act takes
7effect January 1, 2023.
8DIVISION II
9child dependent and development tax credits
10 Sec. 2. Section 422.12C, subsection 1, paragraphs f and g,
11Code 2021, are amended to read as follows:
12f. For a taxpayer with net income of forty thousand dollars
13or more but less than forty-five ninety thousand dollars,
14thirty percent.
15g. For a taxpayer with net income of forty-five ninety
16 thousand dollars or more, zero percent.
17 Sec. 3. Section 422.12C, subsection 2, paragraph a, Code
182021, is amended to read as follows:
19a. The taxes imposed under this subchapter, less the amounts
20of nonrefundable credits allowed under this subchapter, may
21be reduced by an early childhood development tax credit equal
22to twenty-five percent of the first one thousand dollars
23which the taxpayer has paid to others for each dependent, as
24defined in the Internal Revenue Code, ages three through five
25for early childhood development expenses. In determining the
26amount of early childhood development expenses for the tax year
27beginning in the 2006 calendar year only, such expenses paid
28during November and December of the previous tax year shall
29be considered paid in the tax year for which the tax credit
30is claimed. This credit is available to a taxpayer whose net
31income is less than forty-five ninety thousand dollars. If the
32early childhood development tax credit is claimed for a tax
33year, the taxpayer and the taxpayer’s spouse shall not claim
34the child and dependent care credit under subsection 1.
35 Sec. 4. RETROACTIVE APPLICABILITY. This division of this
-1-1Act applies retroactively to tax years beginning on or after
2January 1, 2021.
3DIVISION III
4COVID-19 RELATED GRANTS — TAXATION
5 Sec. 5. Section 422.7, subsection 62, Code 2021, is amended
6to read as follows:
762. a. Subtract, to the extent included, the amount of
8any financial assistance qualifying COVID-19 grant provided to
9an eligible small issued to an individual or business by the
10economic development authority under the Iowa small business
11relief grant program created during calendar year 2020 to
12provide financial assistance to eligible small businesses
13economically impacted by the COVID-19 pandemic, the Iowa
14finance authority, or the department of agriculture and land
15stewardship.
16b. For purposes of this subsection, “qualifying COVID-19
17grant” includes any grant that was issued between March 17,
182020, and December 31, 2021, identified by the department
19by rule under a grant program created to primarily provide
20COVID-19 related financial assistance to economically
21impacted individuals and businesses located in this state,
22and administered by the economic development authority, Iowa
23finance authority, or the department of agriculture and land
24stewardship.
25c. The economic development authority, Iowa finance
26authority, or the department of agriculture and land
27stewardship shall notify the department of any COVID-19 grant
28program that may qualify under this subsection in the manner
29and form prescribed by the department.
30d. This subsection is repealed January 1, 2024, and does not
31apply to tax years beginning on or after that date.
32 Sec. 6. Section 422.35, subsection 30, Code 2021, is amended
33to read as follows:
3430. a. Subtract, to the extent included, the amount of
35any financial assistance qualifying COVID-19 grant provided
-2-1to an eligible small issued to a business by the economic
2development authority under the Iowa small business relief
3grant program created during calendar year 2020 to provide
4financial assistance to eligible small businesses economically
5impacted by the COVID-19 pandemic, the Iowa finance authority,
6or the department of agriculture and land stewardship.
7b. For purposes of this subsection, “qualifying COVID-19
8grant” means the same as defined in section 422.7, subsection
962, paragraph “b”.
10c. The economic development authority, Iowa finance
11authority, or the department of agriculture and land
12stewardship shall notify the department of any COVID-19 grant
13program that may qualify under this subsection in the manner
14and form prescribed by the department.
15d. This subsection is repealed January 1, 2024, and does not
16apply to tax years beginning on or after that date.
17 Sec. 7. EFFECTIVE DATE. This division of this Act, being
18deemed of immediate importance, takes effect upon enactment.
19 Sec. 8. RETROACTIVE APPLICABILITY. This division of this
20Act applies retroactively to March 17, 2020, for tax years
21ending on or after that date.
22DIVISION IV
23federal paycheck protection program
24 Sec. 9. FEDERAL PAYCHECK PROTECTION PROGRAM.
25Notwithstanding any other provision of the law to the contrary,
26for any tax year ending after March 27, 2020, Division N, Tit.
27II, subtit.B, §276 and §278(a), of the federal Consolidated
28Appropriations Act, 2021, Pub.L. No.116-260, applies in
29computing net income for state tax purposes under section 422.7
30or 422.35.
31 Sec. 10. EFFECTIVE DATE. This division of this Act, being
32deemed of immediate importance, takes effect upon enactment.
33DIVISION V
34INSTALLMENT SALES — CAPITAL GAINS
35 Sec. 11. 2018 Iowa Acts, chapter 1161, section 134, is
-3-1amended to read as follows:
2SEC. 134. APPLICABILITY.
31. This division of this Act applies to tax years beginning
4on or after the effective date of this division of this Act.
52. The section of this division of this Act amending section
6422.7, subsection 21, as amended by 2019 Iowa Acts, chapter
7162, applies to sales consummated on or after the effective
8date of this division of this Act, and sales consummated prior
9to the effective date of this division of this Act shall be
10governed by law as it existed prior to the effective date of
11this division of this Act.
12DIVISION VI
13STATE INHERITANCE TAX
14part I
15EXEMPTIONS AND RATES
16 Sec. 12. Section 450.4, subsection 1, Code 2021, is amended
17to read as follows:
181. When the entire estate of the decedent does not exceed
19the sum of twenty-five thousand dollars following amounts after
20deducting the liabilities, as defined in this chapter:
21a. For decedents dying on or after January 1, 2021, but
22before January 1, 2022, three hundred thousand dollars.
23b. For decedents dying on or after January 1, 2022, but
24before January 1, 2023, six hundred thousand dollars.
25c. For decedents dying on or after January 1, 2023, but
26before January 1, 2024, one million dollars.
27 Sec. 13. Section 450.10, Code 2021, is amended by adding the
28following new subsection:
29 NEW SUBSECTION. 7. a. In lieu of each rate of tax imposed
30in subsections 1 through 4, for property passing from the
31estate of a decedent dying on or after January 1, 2021, but
32before January 1, 2022, there shall be imposed a rate of tax
33equal to the applicable tax rate in subsections 1 through 4,
34reduced by twenty-five percent, and rounded to the nearest
35one-hundredth of one percent.
-4- 1b. In lieu of each rate of tax imposed in subsections 1
2through 4, for property passing from the estate of a decedent
3dying on or after January 1, 2022, but before January 1, 2023,
4there shall be imposed a rate of tax equal to the applicable
5tax rate in subsections 1 through 4, reduced by fifty percent,
6and rounded to the nearest one-hundredth of one percent.
7c. In lieu of each rate of tax imposed in subsections 1
8through 4, for property passing from the estate of a decedent
9dying on or after January 1, 2023, but before January 1, 2024,
10there shall be imposed a rate of tax equal to the applicable
11tax rate in subsections 1 through 4, reduced by seventy-five
12percent, and rounded to the nearest one-hundredth of one
13percent.
14part Ii
15REPEAL OF STATE INHERITANCE TAX
16 Sec. 14. NEW SECTION. 450.98 Tax repealed.
17This chapter shall not apply, effective January 1, 2024,
18to property of estates of decedents dying on or after January
191, 2024. The inheritance tax shall not be imposed under this
20chapter if a decedent dies on or after January 1, 2024, and to
21this extent this chapter is repealed.
22 Sec. 15. NEW SECTION. 450.99 Future repeal.
23This chapter is repealed effective January 1, 2034.
24 Sec. 16. NEW SECTION. 450B.8 Tax repealed.
25This chapter shall not apply, effective January 1, 2024,
26to property of estates of decedents dying on or after January
271, 2024. The inheritance tax shall not be imposed under this
28chapter if a decedent dies on or after January 1, 2024, and to
29this extent this chapter is repealed.
30 Sec. 17. NEW SECTION. 450B.9 Future repeal.
31This chapter is repealed effective January 1, 2034.
32 Sec. 18. EFFECTIVE DATE. This division of this Act, being
33deemed of immediate importance, takes effect upon enactment.
34 Sec. 19. RETROACTIVE APPLICABILITY. This division of this
35Act applies retroactively to January 1, 2021, for tax years
-5-1beginning on or after that date, and for decedents dying on or
2after that date.
3 Sec. 20. CODE EDITOR DIRECTIVE. The Code editor is directed
4to correct internal references and other appropriate references
5in the Code, and in any enacted Iowa Acts as necessary, to
6chapters 450 and 450B, and to the inheritance tax and qualified
7use inheritance tax, effective January 1, 2034.
8DIVISION VII
9housing trust fund
10 Sec. 21. Section 428A.8, subsection 3, Code 2021, is amended
11to read as follows:
123. Notwithstanding subsection 2, the amount of money that
13shall be transferred pursuant to this section to the housing
14trust fund in any one fiscal year shall not exceed three seven
15 million dollars. Any money that otherwise would be transferred
16pursuant to this section to the housing trust fund in excess
17of that amount shall be deposited in the general fund of the
18state.
19DIVISION VIII
20HIGH QUALITY JOBS PROGRAM — DAY CARE CENTERS
21 Sec. 22. Section 15.327, Code 2021, is amended by adding the
22following new subsection:
23 NEW SUBSECTION. 016. “Licensed center” means the same as
24defined in section 237A.1.
25 Sec. 23. Section 15.329, Code 2021, is amended by adding the
26following new subsection:
27 NEW SUBSECTION. 3A. In addition to the factors in
28subsection 3, in determining the eligibility of a business to
29participate in the program the authority may consider whether a
30proposed project will provide a licensed center for use by the
31business’s employees.
32DIVISION IX
33INVESTMENT TAX CREDITS AND INNOVATION FUND TAX CREDITS
34 Sec. 24. Section 15.119, subsection 2, paragraph d, Code
352021, is amended to read as follows:
-6- 1d. (1) The tax credits for investments in qualifying
2businesses issued pursuant to section 15E.43 and for equity
3investments in an innovation fund pursuant to section 15E.52.
4In allocating tax credits pursuant to this subsection, the
5authority shall allocate two an aggregate of ten million
6dollars for purposes of this paragraph subparagraph, unless the
7authority determines that the tax credits awarded will be less
8than that amount.
9(2) On or before June 30 of each fiscal year the authority
10shall determine the amount of tax credits to be allocated
11for the next fiscal year beginning July 1 to investments
12in qualifying businesses and to equity investments in an
13innovation fund under subparagraph (1). Any tax credits
14allocated for purposes of subparagraph (1) and not awarded
15in that fiscal year shall be reallocated to a purpose under
16subparagraph (1) for the next fiscal year and shall not be
17counted against the aggregate maximum of ten million dollars.
18 Sec. 25. Section 15.119, subsection 2, paragraph e, Code
192021, is amended by striking the paragraph.
20 Sec. 26. Section 15E.43, subsection 2, paragraphs b and c,
21Code 2021, are amended to read as follows:
22b. The maximum amount of a tax credit that may be issued
23per calendar fiscal year to a natural person and the person’s
24spouse or dependent shall not exceed one hundred thousand
25dollars combined. For purposes of this paragraph, a tax
26credit issued to a partnership, limited liability company, S
27corporation, estate, or trust electing to have income taxed
28directly to the individual shall be deemed to be issued to
29the individual owners based upon the pro rata share of the
30individual’s earnings from the entity. For purposes of this
31paragraph, “dependent” has the same meaning as provided by the
32Internal Revenue Code.
33c. The maximum amount of tax credits that may be issued
34per calendar fiscal year for equity investments in any one
35qualifying business shall not exceed five hundred thousand
-7-1dollars.
2 Sec. 27. EFFECTIVE DATE. This division of this Act, being
3deemed of immediate importance, takes effect upon enactment.
4 Sec. 28. APPLICABILITY. The following applies to tax
5credits allocated on or after the fiscal year beginning July 1,
62021, and for each fiscal year thereafter:
7The section of this division of this Act amending section
815.119, subsection 2, paragraph “d”.
9DIVISION X
10TELEHEALTH — MENTAL HEALTH PARITY
11 Sec. 29. Section 514C.34, subsection 1, Code 2021, is
12amended by adding the following new paragraphs:
13 NEW PARAGRAPH. 0a. “Covered person” means the same as
14defined in section 514J.102.
15 NEW PARAGRAPH. 00a. “Facility” means the same as defined in
16section 514J.102.
17 NEW PARAGRAPH. 0c. “Health carrier” means the same as
18defined in section 514J.102.
19 Sec. 30. Section 514C.34, subsection 1, paragraph c, Code
202021, is amended to read as follows:
21c. “Telehealth” means the delivery of health care services
22through the use of real-time interactive audio and video, or
23other real-time interactive electronic media, regardless of
24where the health care professional and the covered person are
25each located. “Telehealth” does not include the delivery of
26health care services delivered solely through an audio-only
27telephone, electronic mail message, or facsimile transmission.
28 Sec. 31. Section 514C.34, Code 2021, is amended by adding
29the following new subsection:
30 NEW SUBSECTION. 3A. a. A health carrier shall reimburse
31a health care professional and a facility for health care
32services provided by telehealth to a covered person for a
33mental health condition, illness, injury, or disease on the
34same basis and at the same rate as the health carrier would
35apply to the same health care services for a mental health
-8-1condition, illness, injury, or disease provided in person to a
2covered person by the health care professional or the facility.
3b. As a condition of reimbursement pursuant to paragraph
4“a”, a health carrier shall not require that an additional
5health care professional be located in the same room as a
6covered person while health care services for a mental health
7condition, illness, injury, or disease are provided via
8telehealth by another health care professional to the covered
9person.
10 Sec. 32. EFFECTIVE DATE. This division of this Act, being
11deemed of immediate importance, takes effect upon enactment.
12 Sec. 33. RETROACTIVE APPLICABILITY. This division of
13this Act applies to health care services for a mental health
14condition, illness, injury, or disease provided by a health
15care professional or a facility to a covered person by
16telehealth on or after January 1, 2021.
17DIVISION XI
18HIGH QUALITY JOBS and renewable chemical production tax credits
19 Sec. 34. Section 15.119, subsection 2, paragraph a,
20subparagraphs (2) and (3), Code 2021, are amended to read as
21follows:
22(2) In allocating tax credits pursuant to this subsection
23for each fiscal year of the fiscal period beginning July 1,
242016, and ending June 30, 2021 the fiscal year beginning July
251, 2021, and for each fiscal year thereafter, the authority
26shall not allocate more than one hundred five seventy million
27dollars for purposes of this paragraph. This subparagraph (2)
28is repealed July 1, 2021.
29(3) (a) In allocating tax credits pursuant to this
30subsection for the fiscal year beginning July 1, 2021, and
31ending June 30, 2022, the authority shall not allocate more
32than one hundred five million dollars for purposes of this
33paragraph if the aggregate amount of renewable chemical
34production tax credits under section 15.319 that were awarded
35on or after July 1, 2018, but before July 1, 2021, equals or
-9-1exceeds twenty-seven million dollars.
2(b) As soon as practicable after June 30, 2021, the
3authority shall notify the general assembly of the aggregate
4amount of renewable chemical production tax credits awarded
5under section 15.319 on or after July 1, 2018, but before
6July 1, 2021, and whether or not the tax credit allocation
7limitation described in subparagraph division (a) is
8applicable.
9(c) This subparagraph (3) is repealed July 1, 2022.
10 Sec. 35. Section 15.119, subsection 2, paragraph h, Code
112021, is amended to read as follows:
12h. The renewable chemical production tax credit program
13administered pursuant to sections 15.315 through 15.322. In
14allocating tax credits pursuant to this subsection for the
15fiscal year beginning July 1, 2021, and for each fiscal year
16thereafter, the authority shall not allocate more than ten five
17 million dollars for purposes of this paragraph. This paragraph
18is repealed July 1, 2030.
19 Sec. 36. EFFECTIVE DATE. This division of this Act, being
20deemed of immediate importance, takes effect upon enactment.
21DIVISION XII
22HIGH QUALITY JOBS — ELIGIBILITY REQUIREMENTS
23 Sec. 37. HIGH QUALITY JOBS — REDUCTIONS IN OPERATIONS.
241. Notwithstanding section 15.329, subsection 1, paragraph
25“b”, subparagraph (2), the economic development authority shall
26not presume that a reduction in operations is a reduction in
27operations while simultaneously applying for assistance with
28regard to a business that submits an application on or before
29June 30, 2022, if the business demonstrates to the satisfaction
30of the authority all of the following:
31a. That the reduction in operations occurred after March 1,
322020.
33b. That the reduction in operations was caused by the
34COVID-19 pandemic.
352. The economic development authority shall consider
-10-1whether the benefit of the project proposed by a business
2under subsection 1 outweighs any negative impact related to
3the business’s reduction in operations. The business shall
4remain subject to all other eligibility requirements pursuant
5to section 15.329.
63. This section is repealed July 1, 2022.
7DIVISION XIII
8Manufacturing 4.0
9 Sec. 38. NEW SECTION. 15.371 Manufacturing 4.0 technology
10investment program.
111. This section shall be known as and may be cited as the
12“Manufacturing 4.0 Technology Investment Program”.
132. For purposes of this section unless the context otherwise
14requires:
15a. “Financial assistance” means the same as defined in
16section 15.102.
17b. “Manufacturing 4.0 technology investments” means projects
18that are intended to lead to the adoption of, and integration
19of, smart technologies into existing manufacturing operations
20located in the state by mitigating the risk to the manufacturer
21of significant technology investments. Projects may include
22investments in specialized hardware, software, or other
23equipment intended to assist a manufacturer in increasing the
24manufacturer’s productivity, efficiency, and competitiveness.
253. a. A manufacturing 4.0 technology investment fund
26is created within the state treasury under the control of
27the authority for the purpose of financing manufacturing 4.0
28technology investments as described in this section.
29b. The fund may be administered as a revolving fund and
30may consist of any moneys appropriated by the general assembly
31for purposes of this section and any other moneys that are
32lawfully available to the authority. Any moneys appropriated
33to the fund shall be used for purposes of the manufacturing
344.0 technology investment program. The authority may use all
35other moneys in the fund, including interest, earnings, and
-11-1recaptures, for purposes of this section.
2c. Notwithstanding section 8.33, moneys appropriated in this
3section that remain unencumbered or unobligated at the close of
4the fiscal year shall not revert but shall remain available for
5expenditure for the purposes designated until the close of the
6succeeding fiscal year.
7d. Notwithstanding any law to the contrary, the authority
8may transfer any unobligated and unencumbered moneys in the
9fund, except for moneys appropriated for purposes of this
10section, to any fund created pursuant to section 15.106A,
11subsection 1, paragraph “o”.
124. The authority shall establish and administer a
13manufacturing 4.0 technology investment program and shall use
14moneys in the fund to award financial assistance to eligible
15manufacturers for manufacturing 4.0 technology investments.
165. To be eligible for a financial assistance award under the
17manufacturing 4.0 technology investment program, a manufacturer
18must do all of the following:
19a. Manufacture goods at a facility located in this state.
20b. Have a North American industry classification system
21number within the manufacturing sector range of 31-33.
22c. Have been an established business for a minimum of three
23years prior to the date of application to the program.
24d. Derive a minimum of fifty-one percent of the
25manufacturer’s gross revenue from the sale of manufactured
26goods.
27e. Employ a minimum of three full-time employees and no
28more than seventy-five full-time employees across all of the
29manufacturer’s locations.
30f. Have an assessment of the manufacturer’s proposed
31manufacturing 4.0 technology investment completed by the center
32for industrial research and service at Iowa state university of
33science and technology.
34g. Demonstrate the ability to provide matching financial
35support for the manufacturer’s manufacturing 4.0 technology
-12-1investment on a one-to-one basis. The matching financial
2support must be obtained from private sources.
36. Eligible manufacturers shall submit applications to the
4manufacturing 4.0 technology investment program in the manner
5prescribed by the authority by rule.
67. a. The authority may accept applications during one
7or more application periods each fiscal year as determined by
8the authority. All completed applications shall be reviewed
9and scored on a competitive basis pursuant to rules adopted by
10the authority. The authority may engage an outside technical
11review panel to complete technical reviews of applications.
12The board shall review the recommendations of the authority
13and of the technical review panel, if applicable, and shall
14approve, defer, or deny each application.
15b. In making recommendations to the board, the authority and
16the technical review panel, if applicable, shall consider all
17of the following:
18(1) The completeness of the manufacturer’s application.
19(2) Whether the board should approve or deny an application.
20(3) If the board approves an application, the type and
21amount of financial assistance that should to be awarded to the
22applicant.
23(4) The percentage of the manufacturer’s gross revenue
24that is derived from the sale of manufactured goods pursuant
25to subsection 5, paragraph “d”.
26(5) Whether the manufacturer’s proposed manufacturing
274.0 technology investment is consistent with the assessment
28completed by the center for industrial research and service at
29Iowa state university of science and technology pursuant to
30subsection 5, paragraph “f”.
31c. The board shall not approve an application for financial
32assistance for a manufacturing 4.0 technology investment that
33was made prior to the date of the application.
348. From moneys appropriated to the manufacturing 4.0
35technology investment fund from the general fund of the state
-13-1and any other state moneys lawfully available to the authority
2for the manufacturing 4.0 technology investment program, the
3maximum amount of financial assistance awarded from such moneys
4to an eligible manufacturer shall not exceed seventy-five
5thousand dollars.
69. The authority shall adopt rules pursuant to chapter 17A
7necessary to implement and administer this section.
8DIVISION XIV
9ENERGY INFRASTRUCTURE REVOLVING LOAN PROGRAM
10 Sec. 39. Section 476.10A, subsection 2, Code 2021, is
11amended to read as follows:
122. Notwithstanding section 8.33, any unexpended moneys
13remitted to the treasurer of state under this section shall be
14retained for the purposes designated. Notwithstanding section
1512C.7, subsection 2, interest or earnings on investments or
16time deposits of the moneys remitted under this section shall
17be retained and used for the purposes designated, pursuant to
18section 476.46.
19 Sec. 40. Section 476.46, subsection 2, paragraph e,
20subparagraph (3), Code 2021, is amended to read as follows:
21(3) Interest on the fund shall be deposited in the fund.
22A portion of the interest on the fund, not to exceed fifty
23percent of the total interest accrued, shall be used for
24promotion and administration of the fund.
25 Sec. 41. Section 476.46, Code 2021, is amended by adding the
26following new subsections:
27 NEW SUBSECTION. 3. The Iowa energy center shall not
28initiate any new loans under this section after June 30, 2021.
29 NEW SUBSECTION. 4. Loan payments received under this
30section on or after July 1, 2021, and any other moneys in the
31fund on or after July 1, 2021, shall be deposited in the energy
32infrastructure revolving loan fund created in section 476.46A.
33 Sec. 42. NEW SECTION. 476.46A Energy infrastructure
34revolving loan program.
351. a. An energy infrastructure revolving loan fund is
-14-1created in the office of the treasurer of state and shall be
2administered by the Iowa energy center established in section
315.120.
4b. The fund may be administered as a revolving fund and may
5consist of any moneys appropriated by the general assembly for
6purposes of this section and any other moneys that are lawfully
7directed to the fund.
8c. Moneys in the fund shall be used to provide financial
9assistance for the development and construction of energy
10infrastructure, including projects that support electric or gas
11generation transmission, storage, or distribution; electric
12grid modernization; energy-sector workforce development;
13emergency preparedness for rural and underserved areas; the
14expansion of biomass, biogas, and renewable natural gas;
15innovative technologies; and the development of infrastructure
16for alternative fuel vehicles.
17d. Notwithstanding section 8.33, moneys appropriated in this
18section that remain unencumbered or unobligated at the close of
19the fiscal year shall not revert but shall remain available for
20expenditure for the purposes designated until the close of the
21succeeding fiscal year.
22e. Notwithstanding section 12C.7, subsection 2, interest or
23earnings on moneys in the fund shall be credited to the fund.
242. a. The Iowa energy center shall establish and administer
25an energy infrastructure revolving loan program to encourage
26the development of energy infrastructure within the state.
27b. An individual, business, rural electric cooperative, or
28municipal utility located and operating in this state shall be
29eligible for financial assistance under the program. With the
30approval of the Iowa energy center governing board established
31under section 15.120, subsection 2, the economic development
32authority shall determine the amount and the terms of all
33financial assistance awarded to an individual, business, rural
34electric cooperative, or municipal utility under the program.
35All agreements and administrative authority sha11 be vested in
-15-1the Iowa energy center governing board.
2c. The economic development authority may use not more than
3five percent of the moneys in the fund at the beginning of each
4fiscal year for purposes of administrative costs, marketing,
5technical assistance, and other program support.
63. For the purposes of this section:
7a. “Energy infrastructure” means land, buildings, physical
8plant and equipment, and services directly related to the
9development of projects used for, or useful for, electricity or
10gas generation, transmission, storage, or distribution.
11b. “Financial assistance” means the same as defined in
12section 15.102.
13 Sec. 43. ALTERNATE ENERGY REVOLVING LOAN FUND — MONEYS
14TRANSFERRED AND APPROPRIATED. Any unencumbered or unobligated
15moneys remaining after June 30, 2021, in the alternate energy
16revolving loan fund created pursuant to section 476.46, are
17transferred and appropriated to the energy infrastructure
18revolving loan fund created pursuant to section 476.46A, to be
19used for purposes of the energy infrastructure revolving loan
20program.
21DIVISION XV
22WORKFORCE HOUSING TAX INCENTIVES
23 Sec. 44. Section 15.119, subsection 2, paragraph g, Code
242021, is amended to read as follows:
25g. (1) The workforce housing tax incentives program
26administered pursuant to sections 15.351 through 15.356.
27In allocating tax credits pursuant to this subsection, the
28authority shall not allocate more than twenty-five thirty
29 million dollars for purposes of this paragraph. Of the moneys
30allocated under this paragraph, ten fifteen million dollars
31shall be reserved for allocation to qualified housing projects
32in small cities, as defined in section 15.352, that are
33registered on or after July 1, 2017.
34(2) (a) Notwithstanding subparagraph (1), in allocating
35tax credits pursuant to this subsection for the fiscal year
-16-1beginning July 1, 2021, and ending June 30, 2022, the authority
2shall not allocate more than forty million dollars for the
3purposes of this paragraph. Of the moneys allocated under
4this paragraph for the fiscal year beginning July 1, 2021, and
5ending June 30, 2022, twelve million dollars shall be reserved
6for allocation to qualified housing projects in small cities,
7as defined in section 15.352, that are registered on or after
8July 1, 2017.
9(b) Notwithstanding subparagraph (1), in allocating
10tax credits pursuant to this subsection for the fiscal year
11beginning July 1, 2022, and ending June 30, 2023, the authority
12shall not allocate more than thirty-five million dollars for
13the purposes of this paragraph. Of the moneys allocated under
14this paragraph for the fiscal year beginning July 1, 2022,
15and ending June 30, 2023, fifteen million dollars shall be
16reserved for allocation to qualified housing projects in small
17cities, as defined in section 15.352, that are registered on or
18after July 1, 2017, and five million dollars shall be reserved
19for qualified housing projects in areas of the state with
20the largest wait list or greatest need as determined by the
21authority.
22(c) This subparagraph is repealed July 1, 2023.
23 Sec. 45. Section 15.354, subsection 3, paragraph d, Code
242021, is amended to read as follows:
25d. Upon completion of a housing project, an a housing
26business shall submit all of the following to the authority:
27(1) Anexamination of the project in accordance with the
28American institute of certified public accountants’ statements
29on standards for attestation engagements, completed by a
30certified public accountant authorized to practice in this
31state, shall be submitted to the authority.
32(2) A statement of the final amount of qualifying new
33investment for the housing project.
34(3) Any information the authority deems necessary to ensure
35compliance with the agreement signed by the housing business
-17-1pursuant to paragraph “a”, the requirements of this part,
2and rules the authority and the department of revenue adopt
3pursuant to section 15.356.
4 Sec. 46. Section 15.354, subsection 3, paragraph e,
5subparagraph (1), Code 2021, is amended to read as follows:
6(1) Upon review of the examination, and verification of
7the amount of the qualifying new investment, and review of
8any other information submitted pursuant to paragraph “d”,
9subparagraph (3), the authority may notify the housing business
10of the amount that the housing business may claim as a refund
11of the sales and use tax under section 15.355, subsection 2,
12and may issue a tax credit certificate to the housing business
13stating the amount of workforce housing investment tax credits
14under section 15.355, subsection 3, the eligible housing
15business may claim. The sum of the amount that the housing
16business may claim as a refund of the sales and use tax and
17the amount of the tax credit certificate shall not exceed the
18amount of the tax incentive award.
19 Sec. 47. Section 15.354, subsection 6, paragraphs b and c,
20Code 2021, are amended to read as follows:
21b. Notwithstanding subsection 1, the authority may accept
22applications for disaster recovery housing projects on a
23continuous basis establish a disaster recovery application
24period following the declaration of a major disaster by the
25president of the United States for a county in Iowa.
26c. Notwithstanding subsection 2, paragraphs “a”, “b”, and
27“d”, upon Upon review of a housing business’s application,
28and scoring of all applications received during a disaster
29recovery application period, the authority may make a tax
30incentive award to a disaster recovery housing project. The
31tax incentive award shall represent the maximum amount of tax
32incentives that the disaster recovery housing project may
33qualify for under the program. In determining a tax incentive
34award, the authority shall not use an amount of project costs
35that exceeds the amount included in the application of the
-18-1housing business. Tax incentive awards shall be approved by
2the director of the authority.
3 Sec. 48. Section 15.355, subsection 2, Code 2021, is amended
4to read as follows:
52. A housing business may claim a refund of the sales and
6use taxes paid under chapter 423 that are directly related to
7a housing project and specified in the agreement. The refund
8available pursuant to this subsection shall be as provided in
9section 15.331A, excluding subsection 2, paragraph “c”, of
10that section. For purposes of the program, the term “project
11completion”, as used in section 15.331A, shall mean the date
12on which the authority notifies the department of revenue that
13all applicable requirements of an the agreement entered into
14pursuant to section 15.354, subsection 3, paragraph “a”, and
15all applicable requirements of this part, including the rules
16the authority and the department of revenue adopted pursuant to
17section 15.356, are satisfied.
18DIVISION XVI
19brownfields and grayfields
20 Sec. 49. Section 15.119, subsection 3, Code 2021, is amended
21to read as follows:
223. In allocating the amount of tax credits authorized
23pursuant to subsection 1 among the programs specified in
24subsection 2, the authority shall not allocate more than ten
25 fifteen million dollars for purposes of subsection 2, paragraph
26“f”.
27 Sec. 50. Section 15.293A, subsection 8, Code 2021, is
28amended to read as follows:
298. This section is repealed on June 30, 2021 2031.
30 Sec. 51. Section 15.293B, Code 2021, is amended by adding
31the following new subsection:
32 NEW SUBSECTION. 5A. a. Tax credits revoked under
33subsection 3 including tax credits revoked up to five years
34prior to the effective date of this division of this Act, and
35tax credits not awarded under subsection 4 or 5, may be awarded
-19-1in the next annual application period established in subsection
21, paragraph “c”.
3b. Tax credits awarded pursuant to paragraph “a” shall not
4be counted against the limit under section 15.119, subsection
53.
6 Sec. 52. Section 15.293B, subsection 7, Code 2021, is
7amended to read as follows:
87. This section is repealed on June 30, 2021 2031.
9 Sec. 53. EFFECTIVE DATE. The following, being deemed of
10immediate importance, take effect upon enactment:
111. The section of this division of this Act amending section
1215.293A, subsection 8.
132. The section of this division of this Act amending section
1415.293B, subsection 7.
15DIVISION XVII
16Downtown loan guarantee program
17 Sec. 54. NEW SECTION. 15.431 Downtown loan guarantee
18program.
191. The economic development authority, in partnership with
20the Iowa finance authority, shall establish and administer a
21downtown loan guarantee program to encourage Iowa downtown
22businesses and banks to reinvest and reopen following the
23COVID-19 pandemic.
242. In order for a loan to be guaranteed, all of the
25following conditions must be true:
26a. The loan finances an eligible downtown resource center
27community catalyst building remediation grant project or main
28street Iowa challenge grant within a designated district.
29b. The loan finances a rehabilitation project, or finances
30acquisition or refinancing costs associated with the project.
31c. At least twenty-five percent of the project costs are
32used for construction on the project or renovation.
33d. The project includes a housing component.
34e. The loan is used for construction of the project,
35permanent financing of the project, or both.
-20- 1f. A federally insured financial lending institution issued
2the loan.
3g. The loan does not reimburse the borrower for working
4capital, operations, or similar expenses.
5h. The project meets downtown resource center and main
6street Iowa design review.
73. a. For a loan amount less than or equal to five hundred
8thousand dollars, the economic development authority may
9guarantee up to fifty percent of the loan amount.
10b. For a loan amount greater than five hundred thousand
11dollars, the economic development authority may provide a
12maximum loan guarantee of up to two hundred fifty thousand
13dollars.
144. A project loan must be secured by a mortgage against the
15project property.
165. The economic development authority may guarantee loans
17for up to five years. The economic development authority
18may extend the loan guarantee for an additional five years
19if an underwriting review finds that an extension would be
20beneficial.
216. The lender shall pay an annual loan guarantee fee as set
22forth by rule.
237. The economic development authority reserves the right
24to deny a loan guarantee for unreasonable bank loan fees or
25interest rate.
268. The loan must not be insured or guaranteed by another
27local, state, or federal guarantee program.
289. The loan guarantee is not transferable if the loan or the
29project is sold or transferred.
3010. In the event of a loss due to default, the loan
31guarantee proportionally pays the guarantee percentage of the
32loss to the lender.
3311. Moneys for the program may consist of any moneys
34appropriated by the general assembly for purposes of this
35section, and any other moneys that are lawfully available
-21-1to the economic development authority, including moneys
2transferred or deposited from other funds created pursuant to
3section 15.106A, subsection 1, paragraph “o”.
4DIVISION XVIII
5Disaster recovery housing assistance
6 Sec. 55. NEW SECTION. 16.57A Transfer of unobligated or
7unencumbered funds — report.
81. Notwithstanding any other provision of law to the
9contrary, the authority may transfer any unobligated and
10unencumbered moneys in any revolving loan program fund created
11pursuant to section 16.46, 16.47, 16.48, or 16.49, for deposit
12in the disaster recovery housing assistance fund created in
13section 16.57B.
142. Notwithstanding section 8.39, and any other law to
15the contrary, with the prior written consent and approval of
16the governor, the executive director of the authority may
17transfer any unobligated and unencumbered moneys in any fund
18created pursuant to section 16.5, subsection 1, paragraph
19“s”, for deposit in the disaster recovery housing assistance
20fund created in section 16.57B. The prior written consent and
21approval of the director of the department of management shall
22not be required to transfer the unobligated and unencumbered
23moneys.
243. Notwithstanding section 8.39, and any other law to the
25contrary, with the prior written approval of the governor, the
26director of the economic development authority may transfer
27any unobligated and unencumbered moneys in any fund created
28pursuant to section 15.106A, subsection 1, paragraph “o”,
29for deposit in the disaster recovery housing assistance fund
30created in section 16.57B.
314. Any transfer made under this section shall be reported in
32the same manner as provided in section 8.39, subsection 5.
33 Sec. 56. NEW SECTION. 16.57B Disaster recovery housing
34assistance program — fund.
351. Definitions. As used in this section, unless the context
-22-1otherwise requires:
2a. “Disaster-affected home” means a primary residence that
3is destroyed or damaged due to a natural disaster that occurs
4on or after the effective date of this division of this Act,
5and the primary residence is located in a county that is the
6subject of a state of disaster emergency proclamation by the
7governor that authorizes disaster recovery housing assistance.
8b. “Fund” means the disaster recovery housing assistance
9fund.
10c. “Local program administrator” means any of the following:
11(1) The cities of Ames, Cedar Falls, Cedar Rapids, Council
12Bluffs, Davenport, Des Moines, Dubuque, Iowa City, Waterloo,
13and West Des Moines.
14(2) A council of governments whose territory includes at
15least one county that is the subject of a state of disaster
16emergency proclamation by the governor that authorizes disaster
17recovery housing assistance or the eviction prevention program
18under section 16.57C on or after the effective date of this
19division of this Act.
20(3) A community action agency as defined in section 216A.91
21and whose territory includes at least one county that is the
22subject of a state of disaster emergency proclamation by the
23governor that authorizes disaster recovery housing assistance
24or the eviction prevention program under section 16.57C on or
25after the effective date of this division of this Act.
26(4) A qualified local organization or governmental entity
27as determined by rules adopted by the authority.
28d. “Program” means the disaster recovery housing assistance
29program.
30e. “Replacement housing” means housing purchased
31by a homeowner or leased by a renter needed to replace
32a disaster-affected home that is destroyed or damaged
33beyond reasonable repair as determined by a local program
34administrator.
35f. “State of disaster emergency” means the same as described
-23-1in section 29C.6, subsection 1.
22. Fund.
3a. (1) A disaster recovery housing assistance fund is
4created within the authority. The moneys in the fund shall be
5used by the authority for the development and operation of a
6forgivable loan and grant program for homeowners and renters
7with disaster-affected homes, and for the eviction prevention
8program pursuant to section 16.57C.
9(2) Notwithstanding section 12C.7, subsection 2, interest
10or earnings on moneys deposited in the fund shall be credited
11to the fund. Notwithstanding section 8.33, moneys credited to
12the fund shall not revert at the close of a fiscal year.
13b. Moneys transferred by the authority for deposit in the
14fund, moneys appropriated to the fund, and any other moneys
15available to and obtained or accepted by the authority for
16placement in the fund shall be deposited in the fund.
17c. The authority shall not use more than five percent of
18the moneys in the fund on July 1 of a fiscal year for purposes
19of administrative costs and other program support during the
20fiscal year.
213. Program.
22a. The authority shall establish and administer a disaster
23recovery housing assistance program and shall use moneys in
24the fund to award forgivable loans to eligible homeowners and
25grants to eligible renters of disaster-affected homes. Moneys
26in the fund may be expended following a state of disaster
27emergency proclamation by the governor pursuant to section
2829C.6 that authorizes disaster recovery housing assistance.
29b. The authority may enter into an agreement with one or
30more local program administrators to administer the program.
314. Registration required. To be considered for a forgivable
32loan or grant under the program, a homeowner or renter must
33register for the disaster case management program established
34pursuant to section 29C.20B. The disaster case manager may
35refer the homeowner or renter to the appropriate local program
-24-1administrator.
25. Homeowners.
3a. To be eligible for a forgivable loan under the program,
4all of the following requirements shall apply:
5(1) The homeowner’s disaster-affected home must have
6sustained damage greater than the damage that is covered by the
7homeowner’s property and casualty insurance policy insuring the
8home plus any other state or federal disaster-related financial
9assistance that the homeowner is eligible to receive.
10(2) A local official must either deem the disaster-affected
11home suitable for rehabilitation or damaged beyond reasonable
12repair.
13(3) The disaster-affected home is not eligible for buyout by
14the county or city where the disaster-affected home is located,
15or the disaster-affected home is eligible for a buyout by the
16county or city where the disaster-affected home is located, but
17the homeowner is requesting a forgivable loan for the repair
18or rehabilitation of the homeowner’s disaster-affected home in
19lieu of a buyout.
20(4) Assistance under the program must not duplicate
21benefits provided by any local, state, or federal disaster
22recovery assistance program.
23b. If a homeowner is referred to the authority or to a
24local program administrator by the disaster case manager of the
25homeowner, the authority may award a forgivable loan to the
26eligible homeowner for any of the following purposes:
27(1) Repair or rehabilitation of the disaster-affected home.
28(2) (a) Down payment assistance on the purchase of
29replacement housing, and the cost of reasonable repairs to be
30performed on the replacement housing to render the replacement
31housing decent, safe, sanitary, and in good repair.
32(b) Replacement housing shall not be located in a
33one-hundred-year floodplain.
34(c) For purposes of this subparagraph, “decent, safe,
35sanitary, and in good repair” means the same as described in 24
-25-1C.F.R.§5.703.
2c. The authority shall determine the interest rate for the
3forgivable loan.
4d. If a homeowner who has been awarded a forgivable loan
5sells a disaster-affected home or replacement housing for which
6the homeowner received the forgivable loan prior to the end
7of the loan term, the remaining principal on the forgivable
8loan shall be due and payable pursuant to rules adopted by the
9authority.
106. Renters.
11a. To be eligible for a grant under the program, all of the
12following requirements shall apply:
13(1) A local program administrator either deems
14the disaster-affected home of the renter suitable for
15rehabilitation but unsuitable for current short-term
16habitation, or the disaster-affected home is damaged beyond
17reasonable repair.
18(2) Assistance under the program must not duplicate
19benefits provided by any local, state, or federal disaster
20recovery assistance program.
21b. If a renter is referred to the authority or to a local
22program administrator by the disaster case manager of the
23renter, the authority may award a grant to the eligible renter
24to provide short-term financial assistance for the payment of
25rent for replacement housing.
267. Report. On or before January 31 of each year, the
27authority shall submit a report to the general assembly
28that identifies all of the following for the calendar year
29immediately preceding the year of the report:
30a. The date of each state of disaster emergency proclamation
31by the governor that authorized disaster recovery housing
32assistance under this section.
33b. The total number of forgivable loans and grants awarded.
34c. The total number of forgivable loans, and the amount of
35each loan awarded for repair or rehabilitation.
-26- 1d. The total number of forgivable loans, and the amount of
2each loan, awarded for down payment assistance on the purchase
3of replacement housing and the cost of reasonable repairs to be
4performed on the replacement housing to render the replacement
5housing decent, safe, sanitary, and in good repair.
6e. The total number of grants, and the amount of each grant,
7awarded for rental assistance.
8f. The total number of forgivable loans and grants awarded
9in each county in which at least one homeowner or renter has
10been awarded a forgivable loan or grant.
11g. Each local program administrator involved in the
12administration of the program.
13h. The total amount of forgivable loan principal repaid.
14 Sec. 57. NEW SECTION. 16.57C Eviction prevention program.
151. a. “Eligible renter” means a renter whose income meets
16the qualifications of the program, who is at risk of eviction,
17and who resides in a county that is the subject of a state of
18disaster emergency proclamation by the governor that authorizes
19the eviction prevention program.
20b. “Eviction prevention partner” means a qualified local
21organization or governmental entity as determined by rule by
22the authority.
232. The authority shall establish and administer an eviction
24prevention program. Under the eviction prevention program,
25the authority shall award grants to eligible renters and to
26eviction prevention partners for purposes of this section.
27Grants may be awarded upon a state of disaster emergency
28proclamation by the governor that authorizes the eviction
29prevention program. Eviction prevention assistance shall be
30paid out of the fund established in section 16.57B.
313. a. Grants awarded to eligible renters pursuant to this
32section shall be used for short-term financial rent assistance
33to keep eligible renters in the current residences of such
34renters.
35b. Grants awarded to eviction prevention partners pursuant
-27-1to this section shall be used to pay for rent or services
2provided to eligible renters for the purpose of preventing the
3eviction of eligible renters.
44. The authority may enter into an agreement with one or
5more local program administrators to administer the program.
6 Sec. 58. NEW SECTION. 16.57D Rules.
7The authority shall adopt rules pursuant to chapter 17A to
8implement and administer this part, including rules to do all
9of the following:
101. Establish the maximum forgivable loan and grant amounts
11awarded under the program.
122. Establish the terms of any forgivable loan provided under
13the program.
143. Income qualifications of eligible renters in the
15eviction prevention program.
16 Sec. 59. CODE EDITOR DIRECTIVE. The Code editor shall
17designate sections 16.57A through 16.57D, as enacted by
18this division of this Act, as a new part within chapter 16,
19subchapter VIII, and may redesignate the new and preexisting
20parts, replace references to sections 16.57A through 16.57D
21with references to the new part, and correct internal
22references as necessary, including references in subchapter or
23part headnotes.
24 Sec. 60. EFFECTIVE DATE. This division of this Act, being
25deemed of immediate importance, takes effect upon enactment.
26DIVISION XIX
27BONUS DEPRECIATION
28 Sec. 61. Section 422.7, subsection 39A, Code 2021, is
29amended by striking the subsection.
30 Sec. 62. Section 422.35, subsection 19A, Code 2021, is
31amended by striking the subsection.
32 Sec. 63. RETROACTIVE APPLICABILITY. This division of this
33Act applies retroactively to January 1, 2021, for tax years
34beginning on or after that date, and for qualified property
35placed in service on or after that date.
-28-1DIVISION XX
2BEGINNING FARMER TAX CREDIT
3 Sec. 64. Section 16.58, subsections 1, 2, and 3, Code 2021,
4are amended to read as follows:
51. “Agricultural assets” means agricultural land,
6agricultural improvements, depreciable agricultural property,
7crops, or livestock.
82. “Agricultural improvements” improvement” means any
9improvements, including buildings, structures, or fixtures
10suitable for use in farming which are, if located on any size
11parcel of agricultural land.
123. “Agricultural land” means land suitable for use in
13farming, any portion of which may include an agricultural
14improvement.
15 Sec. 65. Section 16.77, subsection 2, Code 2021, is amended
16to read as follows:
172. “Agricultural lease agreement” or “agreement” means an
18agreement for the transfer of agricultural assets, that must at
19least include a lease of agricultural land, from an eligible
20taxpayer to a qualified beginning farmer as provided in section
2116.79A.
22 Sec. 66. Section 16.79A, subsection 1, Code 2021, is amended
23to read as follows:
241. a. A beginning farmer tax credit is allowed only for
25agricultural assets that are subject to an agricultural lease
26agreement entered into by an eligible taxpayer and a qualifying
27beginning farmer participating in the beginning farmer tax
28credit program established pursuant to section 16.78.
29b. The tax credit is allowed regardless of whether the
30principle agricultural asset is soil, pasture, or a building or
31other structure used in farming.
32 Sec. 67. Section 16.79A, subsection 2, Code 2021, is amended
33to read as follows:
342. The agreement must include the lease of agricultural
35land located in this state, including any or agricultural
-29-1 improvements located in this state, and may provide for the
2rental of agricultural equipment as defined in section 322F.1.
3 Sec. 68. Section 16.79A, subsection 3, paragraph c, Code
42021, is amended to read as follows:
5c. The agreement must be for at least two years, but not
6more than five years. The agreement may be renewed any number
7of times by the eligible taxpayer and qualified beginning
8farmer for a term of at least two years, but not more than five
9years. However, an eligible taxpayer shall not participate in
10the program for more than fifteen years.
11 Sec. 69. Section 16.81, subsection 4, Code 2021, is amended
12by striking the subsection.
13 Sec. 70. Section 16.81, subsection 6, Code 2021, is amended
14to read as follows:
156. The authority shall approve all beginning farmer tax
16credit applications that meet the requirements of this subpart
17and make tax credit awards on a first-come, first-served basis,
18subject to the limitations in section 16.82A. An eligible
19taxpayer may apply and be approved to enter into agreements
20with different qualified beginning farmers.
21 Sec. 71. Section 16.82, subsection 5, Code 2021, is amended
22to read as follows:
235. The amount of tax credits that may be awarded to an
24eligible taxpayer for any one year under all agreements an
25agreement shall not exceed fifty thousand dollars.
26 Sec. 72. BEGINNING FARMER TAX CREDIT PROGRAM — FORMER
27PERIOD OF PARTICIPATION EXTENDED. An eligible taxpayer first
28participating in the beginning farmer tax credit program on or
29after January 1, 2019, as provided in 2019 Iowa Acts, chapter
30161, for a tax year beginning on or after that date, may
31participate in the program for not more than fifteen years in
32the same manner as provided in section 16.79A, as amended by
33this division of this Act.
34 Sec. 73. EFFECTIVE DATE. This division of this Act takes
35effect January 1, 2022.
-30-1DIVISION XXI
2MENTAL HEALTH FUNDING
3 Sec. 74. Section 123.38, subsection 2, paragraph b, Code
42021, is amended to read as follows:
5b. For purposes of this subsection, any portion of license
6or permit fees used for the purposes authorized in section
7331.424, subsection 1, paragraph “a”, subparagraphs (1) and
8(2), and in section 331.424A, shall not be deemed received
9either by the division or by a local authority.
10 Sec. 75. Section 218.99, Code 2021, is amended to read as
11follows:
12218.99 Counties to be notified of patients’ personal
13accounts.
14The administrator in control of a state institution shall
15direct the business manager of each institution under the
16administrator’s jurisdiction which is mentioned in section
17331.424, subsection 1, paragraph “a”, subparagraphs (1) and
18(2), and for which services are paid under section 331.424A
19by the county of residence or a mental health and disability
20services region, to quarterly inform the county of residence
21of any patient or resident who has an amount in excess of two
22hundred dollars on account in the patients’ personal deposit
23fund and the amount on deposit. The administrators shall
24direct the business manager to further notify the county of
25residence at least fifteen days before the release of funds in
26excess of two hundred dollars or upon the death of the patient
27or resident. If the patient or resident has no residency in
28this state or the person’s residency is unknown, notice shall
29be made to the director of human services and the administrator
30in control of the institution involved.
31 Sec. 76. Section 225.24, Code 2021, is amended to read as
32follows:
33225.24 Collection of preliminary expense.
34Unless a committed private patient or those legally
35responsible for the patient’s support offer to settle the
-31-1amount of the claims, the regional administrator for the
2person’s county of residence shall collect, by action if
3necessary, the amount of all claims for per diem and expenses
4that have been approved by the regional administrator for the
5county and paid by the regional administrator as provided under
6section 225.21. Any amount collected shall be credited to the
7county mental health and disabilities disability services fund
8 region combined account created in accordance with section
9331.424A 331.391.
10 Sec. 77. Section 225C.4, subsection 1, paragraph i, Code
112021, is amended to read as follows:
12i. Administer and distribute state appropriations in
13connection with the mental health and disability services
14 regional services service fund established by section 225C.7A.
15 Sec. 78. Section 225C.7A, Code 2021, is amended by striking
16the section and inserting in lieu thereof the following:
17225C.7A Mental health and disability services regional
18service fund — region incentive fund.
191. A mental health and disability services regional service
20fund is created in the office of the treasurer of state under
21the authority of the department. The fund shall be separate
22from the general fund of the state and the balance in the fund
23shall not be considered part of the balance of the general
24fund of the state. Moneys in the fund include appropriations
25made to the fund and other moneys deposited into the fund.
26Moneys in the fund shall be used solely for purposes of making
27regional service payments and incentive payments under this
28section.
292. a. For each fiscal year beginning on or after July 1,
302021, there is appropriated from the general fund of the state
31to the mental health and disability services regional service
32fund an amount necessary to make all regional service payments
33under this section for that fiscal year.
34b. The department shall distribute the moneys appropriated
35from the mental health and disability services regional
-32-1service fund to mental health and disability services regions
2for funding of services in accordance with performance-based
3contracts with the regions and in the manner provided in this
4section. If the allocation methodology includes a population
5factor, the definition of “population” in section 331.388 shall
6be applied.
73. For each fiscal year beginning on or after July 1, 2021,
8the moneys available in a fiscal year in the mental health and
9disability services regional service fund, except for moneys in
10the region incentive fund under subsection 8, are appropriated
11to the department and shall be distributed to each region on
12a per capita basis calculated under subsection 4 using each
13region’s population, as defined in section 331.388, for that
14fiscal year.
154. The amount of each region’s regional service payment
16shall be determined as follows:
17a. For the fiscal year beginning July 1, 2021, an amount
18equal to the product of fifteen dollars and eighty-six cents
19multiplied by the sum of the region’s population for the fiscal
20year.
21b. For the fiscal year beginning July 1, 2022, an amount
22equal to the product of thirty-eight dollars multiplied by the
23sum of the region’s population for the fiscal year.
24c. For the fiscal year beginning July 1, 2023, an amount
25equal to the product of forty dollars multiplied by the sum of
26the region’s population for the fiscal year.
27d. For the fiscal year beginning July 1, 2024, an amount
28equal to the product of forty-two dollars multiplied by the sum
29of the region’s population for the fiscal year.
30e. (1) For the fiscal year beginning July 1, 2025, and each
31succeeding fiscal year, an amount equal to the product of the
32sum of the region’s population for the fiscal year multiplied
33by the sum of the dollar amount used to calculate the regional
34service payments under this subsection for the immediately
35preceding fiscal year plus the regional service growth factor
-33-1for the fiscal year.
2(2) For purposes of this paragraph, “regional service growth
3factor” for a fiscal year is an amount equal to the product
4of the dollar amount used to calculate the regional service
5payments under this subsection for the immediately preceding
6fiscal year multiplied by the percent increase, if any, in the
7amount of sales tax revenue deposited into the general fund of
8the state under section 423.2A, subsection 1, paragraph “a”,
9less the transfers required under section 423.2A, subsection
102, between the fiscal year beginning three years prior to
11the applicable fiscal year and the fiscal year beginning two
12years prior to the applicable year, but not to exceed one and
13one-half percent.
145. Regional service payments received by a region
15shall be deposited in the region’s combined account under
16section 331.391 and used solely for providing mental health
17and disability services under the regional service system
18management plan.
196. Regional service payments from the mental health
20and disability services regional service fund shall be
21paid in quarterly installments to the appropriate regional
22administrator in July, October, January, and April of each
23fiscal year.
247. a. For the fiscal year beginning July 1, 2021, each
25mental health and disability services region for which the
26amount certified during the fiscal year under section 331.391,
27subsection 4, paragraph “b”, exceeds forty percent of the actual
28expenditures of the region for the fiscal year preceding the
29fiscal year in progress, the remaining quarterly payments of
30the region’s regional service payment shall be reduced by
31an amount equal to the amount by which the region’s amount
32certified under section 331.391, subsection 4, paragraph “b”,
33exceeds forty percent of the actual expenditures of the region
34for the fiscal year preceding the fiscal year in progress, but
35the amount of the reduction shall not exceed the total amount
-34-1of the region’s regional service payment for the fiscal year.
2If the region’s remaining quarterly payments are insufficient
3to effectuate the required reductions under this paragraph, the
4region is required to pay to the department of human services
5any amount for which the reduction in quarterly payments could
6not be made. The amount of reductions to quarterly payments
7and amounts paid to the department under this paragraph shall
8be transferred and credited to the region incentive fund under
9subsection 8.
10b. For the fiscal year beginning July 1, 2022, each mental
11health and disability services region for which the amount
12certified during the fiscal year under section 331.391,
13subsection 4, paragraph “b”, exceeds twenty percent of the
14actual expenditures of the region for the fiscal year preceding
15the fiscal year in progress, the remaining quarterly payments
16of the region’s regional service payment shall be reduced by
17an amount equal to the amount by which the region’s amount
18certified under section 331.391, subsection 4, paragraph “b”,
19exceeds twenty percent of the actual expenditures of the region
20for the fiscal year preceding the fiscal year in progress, but
21the amount of the reduction shall not exceed the total amount
22of the region’s regional service payment for the fiscal year.
23If the region’s remaining quarterly payments are insufficient
24to effectuate the required reductions under this paragraph, the
25region is required to pay to the department of human services
26any amount for which the reduction in quarterly payments could
27not be made. The amount of reductions to quarterly payments
28and amounts paid to the department under this paragraph shall
29be transferred and credited to the region incentive fund under
30subsection 8.
31c. For the fiscal year beginning July 1, 2023, and each
32succeeding fiscal year, each mental health and disability
33services region for which the amount certified during the
34fiscal year under section 331.391, subsection 4, paragraph “b”,
35exceeds five percent of the actual expenditures of the region
-35-1for the fiscal year preceding the fiscal year in progress, the
2remaining quarterly payments of the region’s regional service
3payment shall be reduced by an amount equal to the amount by
4which the region’s amount certified under section 331.391,
5subsection 4, paragraph “b”, exceeds five percent of the actual
6expenditures of the region for the fiscal year preceding the
7fiscal year in progress, but the amount of the reduction
8shall not exceed the total amount of the region’s regional
9service payment for the fiscal year. If the region’s remaining
10quarterly payments are insufficient to effectuate the required
11reductions under this paragraph, the region is required to
12pay to the department of human services any amount for which
13the reduction in quarterly payments could not be made. The
14amount of reductions to quarterly payments and amounts paid to
15the department under this paragraph shall be transferred and
16credited to the region incentive fund under subsection 8.
178. a. A region incentive fund is created in the mental
18health and disability services regional service fund under
19subsection 1. The incentive fund shall consist of the
20moneys appropriated or credited to the incentive fund by
21law, including amounts credited to the incentive fund under
22subsection 7. For fiscal years beginning on or after July 1,
232021, there is appropriated from the general fund of the state
24to the incentive fund the following amounts to be used for the
25purposes of this subsection:
26(1) For the fiscal year beginning July 1, 2021, nine million
27nine hundred sixty thousand five hundred ninety dollars.
28(2) For the fiscal year beginning July 1, 2022, five million
29one hundred seven thousand three hundred forty dollars.
30(3) (a) For each fiscal year beginning on or after July
311, 2025, an amount equal to the incentive fund growth factor
32multiplied by the ending balance of the incentive fund at
33the conclusion of the fiscal year ending June 30 immediately
34preceding the application deadline under paragraph “b” for the
35fiscal year for which the appropriation is made.
-36- 1(b) For purposes of this subparagraph, the “incentive fund
2growth factor” for each fiscal year is the percent increase,
3if any, in the amount of sales tax revenue deposited into the
4general fund of the state under section 423.2A, subsection
51, paragraph “a”, less the transfers required under section
6423.2A, subsection 2, between the fiscal year beginning three
7years prior to the applicable fiscal year and the fiscal year
8beginning two years prior to the applicable year, minus one and
9one-half percent, and the incentive fund growth factor for any
10fiscal year shall not exceed three and one-half percent.
11b. To receive funding from the incentive fund, a regional
12administrator must submit to the department sufficient data
13to demonstrate that the region has met the standards outlined
14in the region’s performance-based contract. The purpose of
15the incentive fund shall be to provide appropriate financial
16incentives for outcomes met from services provided by the
17regional administrator’s mental health and disability services
18region. The department shall make its final decisions on or
19before December 15 regarding acceptance or rejection of the
20submissions for incentive funds applications for assistance and
21the total amount accepted shall be considered obligated.
22c. In addition to incentive submission requirements under
23paragraphs “d”, “f”, and “g”, basic eligibility for incentive
24funds requires that a mental health and disability services
25region meet all of the following conditions:
26(1) The mental health and disability services region is in
27compliance with the regional service system management plan
28requirements of section 331.393.
29(2) (a) In the fiscal year that commenced two years prior
30to the fiscal year of application for incentive funds, the
31ending balance, under generally accepted accounting principles,
32of the mental health and disability services region’s combined
33services funds was equal to or less than the ending balance
34threshold under subparagraph division (b) for the fiscal year
35for which assistance is requested.
-37- 1(b) For purposes of this subparagraph (2), “ending balance
2threshold” means the following:
3(i) For applications for the fiscal year beginning July 1,
42021, forty percent of the actual expenditures of the mental
5health and disability services region for the fiscal year that
6commenced two years prior to the fiscal year of application for
7assistance.
8(ii) For applications for the fiscal year beginning July 1,
92022, twenty percent of the actual expenditures of the mental
10health and disability services region for the fiscal year that
11commenced two years prior to the fiscal year of application for
12assistance.
13(iii) For applications for fiscal years beginning on or
14after July 1, 2023, five percent of the actual expenditures
15of the mental health and disability services region for the
16fiscal year that commenced two years prior to the fiscal year
17of application for assistance.
18d. The department shall review the fiscal year-end financial
19records for all mental health and disability services regions
20that are granted incentive funds. If the department determines
21a mental health and disability services region’s actual need
22for incentive funds was less than the amount of incentive funds
23granted to the mental health and disability services region,
24the mental health and disability services region shall refund
25the difference between the amount of assistance granted and
26the actual need. The mental health and disability services
27region shall submit the refund within thirty days of receiving
28notice from the department. Refunds shall be credited to the
29incentive fund.
30e. The department shall determine application requirements
31to ensure prudent use of the incentive fund. The department
32may accept or reject an application for incentive funds in
33whole or in part. The decision of the department is final.
34f. The total amount of incentive funds approved shall be
35limited to the amount available in the incentive fund for a
-38-1fiscal year. Any unobligated balance in the incentive fund at
2the close of a fiscal year shall remain in the incentive fund
3for distribution in the succeeding fiscal year.
4g. Incentive funds shall only be made available to address
5one or more of the following circumstances:
6(1) To reimburse regions for reductions in available
7funding for core services as the result of the reduction and
8elimination of the levy under section 331.424A, Code 2021, if
9the region has an operating deficit. The department shall
10prioritize approval of incentive funds for the circumstances
11specified in this subparagraph.
12(2) To incentivize quality core services that meet or exceed
13the defined outcomes in the performance-based contract.
14(3) To support regional efforts to fund non-core services
15that support the defined outcomes of core services in the
16performance-based contract.
17(4) To support non-core services to maintain an individual
18in a community setting or that would create a risk that the
19individuals needing services and supports would be placed in
20more restrictive, higher-cost settings.
21h. Subject to the amount available and obligated from
22the incentive fund for a fiscal year, the department shall
23annually calculate the amount of moneys due to eligible mental
24health and disability services regions in accordance with the
25department’s decisions and that amount is appropriated from the
26incentive fund to the department for payment of the moneys due.
27The department shall distribute incentive funds payable to the
28mental health and disability services regions for the amounts
29due on or before January 1.
30i. On or before March 1 and September 1 of each fiscal
31year, the department shall provide the governor’s office and
32the general assembly with a report of the financial condition
33of the incentive fund. The report shall include but is not
34limited to an itemization of the funding source’s balances,
35types and amount of revenues credited, and payees and payment
-39-1amounts for the expenditures made from the funding source
2during the reporting period.
3j. If the department has made its decisions but has
4determined that there are otherwise qualifying requests for
5incentive funds that are beyond the amount available in the
6incentive fund for a fiscal year, the department shall compile
7a list of such requests and the supporting information for
8the requests. The list and information shall be submitted to
9the commission, the children’s behavioral health system state
10board, and the general assembly.
119. The commission shall consult with regional
12administrators and the director in prescribing forms and
13adopting rules to administer this section.
14 Sec. 79. Section 249N.8, subsection 1, Code 2021, is amended
15to read as follows:
161. Biennially, a report of the results of a review, by
17county and region, of mental health services previously funded
18through taxes levied by counties pursuant to section 331.424A,
19Code 2021, or funds administered by a mental health and
20disability services region that are funded during the reporting
21period under the Iowa health and wellness plan.
22 Sec. 80. Section 331.389, subsection 1, paragraph b, Code
232021, is amended to read as follows:
24b. If a county has been exempted prior to July 1, 2014, from
25the requirement to enter into a regional service system, the
26county and the county’s board of supervisors shall fulfill all
27requirements and be eligible as a region under this chapter and
28chapter chapters 222, 225, 225C, 226, 227, 229, and 230 for a
29regional service system, regional service system management
30plan, regional governing board, and regional administrator,
31and any other provisions applicable to a region of counties
32providing local mental health and disability services.
33Additionally, a county exempted under this subsection shall be
34considered a region for purposes of chapter 426B.
35 Sec. 81. Section 331.389, subsection 5, paragraph a,
-40-1subparagraph (2), Code 2021, is amended to read as follows:
2(2) Reduce the amount of the annual state funding provided
3for the regional service system or exempted county, including
4amounts received under section 225C.7A, not to exceed fifteen
5percent of the amount.
6 Sec. 82. Section 331.391, subsections 1 and 3, Code 2021,
7are amended to read as follows:
81. The funding under the control of the governing board
9shall be maintained in a combined account, in separate county
10accounts that are under the control of the governing board, or
11pursuant to other arrangements authorized by law that limit the
12administrative burden of such control while facilitating public
13scrutiny of financial processes. A county exempted under
14section 331.389, subsection 1, shall maintain a county mental
15health and disability services fund for the deposit of funding
16received under section 225C.7A and appropriations specifically
17authorized to be made from the county mental health and
18disability services fund shall not be made from any other fund
19of the county. A county mental health and disability services
20fund established by an exempt county, to the extent feasible,
21shall be considered to be the same as a region combined account
22and shall be subject to the same requirements as a region’s
23combined account.
243. The funding provided pursuant to appropriations from the
25mental health and disability services regional services service
26 fund created in section 225C.7A and from performance-based
27contracts with the department shall be credited to the account
28or accounts under the control of the governing board.
29 Sec. 83. Section 331.391, subsection 4, paragraphs a, b, and
30c, Code 2021, are amended to read as follows:
31a. If a region is meeting the financial obligations for
32implementation of its regional service system management plan
33for a fiscal year and residual funding is anticipated, the
34regional administrator shall may reserve an adequate amount of
35unobligated and unencumbered funds for cash flow of expenditure
-41-1obligations in the next fiscal year.
2b. Each region shall certify to the department of management
3 human services on or before December 1, 2022 2021, and each
4December 1 thereafter, the amount of the region’s cash flow
5amount in the combined account that is attributable to each
6county within the region based upon each county’s proportionate
7amount of funding and contributions to the region or other
8methodology specified in the regional governance agreement
9or certify the cash flow amount for each separate county
10account that is under the control of the governing board at the
11conclusion of the most recently completed fiscal year.
12c. For fiscal years beginning on or after July 1, 2023,
13the region’s cash flow amount, either reserved in the region’s
14combined account or reserved among all separate county accounts
15under the control of the governing board, shall not exceed
16forty five percent of the gross actual expenditures from the
17combined account or from all separate county accounts under
18control of the governing board for the fiscal year preceding
19the fiscal year in progress.
20 Sec. 84. Section 331.392, subsection 4, paragraph a, Code
212021, is amended to read as follows:
22a. Methods for pooling, management, and expenditure of the
23funding under the control of the regional administrator. If
24the agreement does not provide for pooling of the participating
25county moneys in a single fund, the agreement shall specify how
26the participating county moneys will be subject to the control
27of the regional administrator.
28 Sec. 85. Section 331.393, subsection 10, Code 2021, is
29amended to read as follows:
3010. The director’s approval of a regional plan shall not be
31construed to constitute certification of the respective county
32budgets or of the region’s budget.
33 Sec. 86. Section 331.394, subsection 4, Code 2021, is
34amended to read as follows:
354. If a county of residence is part of a mental health and
-42-1disability services region that has agreed to pool funding and
2liability for services, the The responsibilities of the county
3under law regarding such mental health and disability services
4shall be performed on behalf of the county by the regional
5administrator. The county of residence or the county’s mental
6health and disability services region, as applicable, is
7responsible for paying the public costs of the mental health
8and disability services that are not covered by the medical
9assistance program under chapter 249A and are provided in
10accordance with the region’s approved service management plan
11to persons who are residents of the county or region.
12 Sec. 87. Section 331.398, subsection 1, Code 2021, is
13amended to read as follows:
141. The financing of a regional mental health and disability
15service system is limited to a fixed budget amount. The fixed
16budget amount shall be the amount identified in a regional
17service system management plan and budget for the fiscal year.
18A region shall receive state funding for growth in non-Medicaid
19expenditures through the mental health and disability regional
20services fund created in section 225C.7A to address increased
21service costs, additional service populations, additional core
22service domains, and increased numbers of persons receiving
23services.
24 Sec. 88. Section 331.424A, subsection 1, paragraph b, Code
252021, is amended by striking the paragraph.
26 Sec. 89. Section 331.424A, subsection 3, Code 2021, is
27amended to read as follows:
283. a. County revenues from taxes and other sources
29designated by a county for mental health and disabilities
30services shall be credited to the county mental health and
31disabilities services fund which shall be created by the
32county. The Until the required transfer of funds under
33paragraph “b”, the board shall make appropriations from the fund
34for payment of services provided under the regional service
35system management plan approved pursuant to section 331.393.
-43-1The For fiscal years beginning before July 1, 2022, the county
2may pay for the services in cooperation with other counties
3by pooling appropriations from the county services fund with
4appropriations from the county services fund of other counties
5through the county’s regional administrator, or through another
6arrangement specified in the regional governance agreement
7entered into by the county under section 331.392.
8b. Notwithstanding section 331.432, subsection 3, upon
9conclusion of the fiscal year beginning July 1, 2021, except
10for an exempt county under section 331.391, subsection 1,
11the county treasurer shall transfer the remaining balance of
12the county’s county services fund created under paragraph
13“a”, including all unobligated and unencumbered funds, to the
14county’s region to which the county belongs in the fiscal year
15beginning July 1, 2022, for deposit in the region’s combined
16account under section 331.391.
17 Sec. 90. Section 331.424A, subsection 4, paragraph a, Code
182021, is amended to read as follows:
19a. An amount of unobligated and unencumbered funds, as
20specified in the regional governance agreement entered into
21by the county under section 331.392, shall, for fiscal years
22beginning before July 1, 2022, be reserved in the county
23services fund to address cash flow obligations in the next
24fiscal year, subject to the limitations of this subsection.
25 Sec. 91. Section 331.424A, subsection 4, paragraphs c and d,
26Code 2021, are amended by striking the paragraphs.
27 Sec. 92. Section 331.424A, subsections 5, 6, and 9, Code
282021, are amended to read as follows:
295. Receipts from the state or federal government for fiscal
30years beginning before July 1, 2022, for the mental health
31and disability services administered or paid for by a county
32shall be credited to the county services fund, including moneys
33distributed to the county from the department of human services
34and moneys allocated under chapter 426B.
356. For each fiscal year beginning before July 1, 2022, the
-44-1county shall certify a levy for payment of services. For each
2such fiscal year, county revenues from taxes imposed by the
3county credited to the county services fund shall not exceed an
4amount equal to the county budgeted amount for the fiscal year.
5A levy certified under this section is not subject to the
6appeal provisions of section 331.426or to any other provision
7in law authorizing a county to exceed, increase, or appeal a
8property tax levy limit.
99. a. For the fiscal year beginning July 1, 2017, and
10each subsequent fiscal year beginning before July 1, 2022, the
11county budgeted amount determined for each county shall be the
12amount necessary to meet the county’s financial obligations for
13the payment of services provided under the regional service
14system management plan approved pursuant to section 331.393,
15not to exceed an amount equal to the product of the regional
16per capita expenditure target amount twenty-one dollars and
17fourteen cents multiplied by the county’s population, and, for
18fiscal years beginning on or after July 1, 2023, reduced by
19the amount of the county’s cash flow reduction amount for the
20fiscal year calculated under subsection 4, if applicable.
21b. If a county officially joins a different region, the
22county’s budgeted amount for a fiscal year beginning before
23July 1, 2022, shall be the amount necessary to meet the
24county’s financial obligations for payment of services provided
25under the new region’s regional service system management plan
26approved pursuant to section 331.393, not to exceed an amount
27equal to the product of the new region’s regional per capita
28expenditure target amount twenty-one dollars and fourteen cents
29 multiplied by the county’s population, and, for fiscal years
30beginning on or after July 1, 2023, reduced by the amount of
31the county’s cash flow reduction amount for the fiscal year
32calculated under subsection 4, if applicable.
33 Sec. 93. Section 331.424A, Code 2021, is amended by adding
34the following new subsection:
35 NEW SUBSECTION. 10. This section is repealed July 1, 2022.
-45-1 Sec. 94. Section 331.432, subsection 3, Code 2021, is
2amended to read as follows:
33. a. Except as authorized in section 331.477, transfers
4of moneys between the county services fund created pursuant
5to section 331.424A and any other fund are prohibited. This
6subsection paragraph does not apply to appropriations made or
7the value of in-kind care and treatment provided pursuant to
8section 347.7, subsection 1, paragraph “c”, Code 2021, or to
9transfers from a county public hospital fund under section
10347.7. This paragraph is repealed July 1, 2022.
11b. Payments or transfers of moneys from any fund of the
12county to a mental health and disability services region’s
13combined account under section 331.391 are prohibited. This
14paragraph applies to fiscal years beginning on or after July
151, 2022, but does not apply to transfers from a county public
16hospital fund under section 347.7 for the fiscal year beginning
17July 1, 2022, or the fiscal year beginning July 1, 2023.
18 Sec. 95. Section 347.7, subsection 1, paragraph c, Code
192021, is amended by striking the paragraph.
20 Sec. 96. Section 426B.1, subsection 2, Code 2021, is amended
21to read as follows:
222. Moneys shall be distributed from the property tax relief
23fund to counties for the mental health and disability regional
24service system for mental health and disabilities services, in
25accordance with the appropriations made to the fund and other
26statutory requirements.
27 Sec. 97. Section 426B.2, Code 2021, is amended to read as
28follows:
29426B.2 Property tax relief fund payments.
30The director of human services shall draw warrants on the
31property tax relief fund, payable to the county treasurer
32 regional administrator in the amount due to a county mental
33health and disability services region in accordance with
34statutory requirements, and mail the warrants to the county
35auditors regional administrator in July and January of each
-46-1year.
2 Sec. 98. Section 426B.4, Code 2021, is amended to read as
3follows:
4426B.4 Rules.
5The mental health and disability services commission shall
6consult with county representatives regional administrators
7 and the director of human services in prescribing forms and
8adopting rules pursuant to chapter 17A to administer this
9chapter.
10 Sec. 99. ADJUSTMENT TO PROPERTY TAXES CERTIFIED UNDER
11SECTION 331.424A — FY 2021-2022. For each county for which
12the amount of taxes certified for levy for the purposes
13of section 331.424A for the fiscal year beginning July 1,
142021, exceeds the product of the population of the county as
15determined under section 331.424A, subsection 1, paragraph
16“e”, multiplied by twenty-one dollars and fourteen cents,
17the department of management shall reduce the amount of such
18taxes certified for levy to an amount not to exceed the
19product of the population of the county as determined under
20section 331.424A, subsection 1, paragraph “e”, multiplied by
21twenty-one dollars and fourteen cents and shall revise the rate
22of taxation as necessary to raise the reduced amount. The
23department of management shall report the reduction in the
24certified taxes and the revised rate of taxation to the county
25auditors by June 15, 2021.
26 Sec. 100. IMPLEMENTATION OF REGION INCENTIVE FUND UNDER
27SECTION 225C.7A — EMERGENCY RULEMAKING.
281. In order to timely implement the provisions of this
29division of this Act establishing the region incentive fund
30under section 225C.7A, subsection 8, for mental health and
31disability services regions for funding the fiscal year
32beginning July 1, 2021, and the fiscal year beginning July
331, 2022, the director of human services shall establish
34alternative application deadlines and expedited application
35review and approval timelines.
-47- 12. The department of human services may adopt
2administrative rules under section 17A.4, subsection 3, and
3section 17A.5, subsection 2, paragraph “b”, to implement
4provisions of this division of this Act and the rules shall
5become effective immediately upon filing or on a later
6effective date specified in the rules, unless the effective
7date of the rules is delayed or the applicability of the rules
8is suspended by the administrative rules review committee. Any
9rules adopted in accordance with this section shall not take
10effect before the rules are reviewed by the administrative
11rules review committee. The delay authority provided to
12the administrative rules review committee under section
1317A.8, subsections 9 and 10, shall be applicable to a delay
14imposed under this section, notwithstanding a provision in
15those subsections making them inapplicable to section 17A.5,
16subsection 2, paragraph “b”. Any rules adopted in accordance
17with the provisions of this section shall also be published as
18a notice of intended action as provided in section 17A.4.
19 Sec. 101. EFFECTIVE DATE. This division of this Act, being
20deemed of immediate importance, takes effect upon enactment.
21DIVISION XXII
22COMMERCIAL AND INDUSTRIAL PROPERTY TAX REPLACEMENT PAYMENTS
23 Sec. 102. Section 2.48, subsection 3, paragraph f,
24subparagraph (6), Code 2021, is amended by striking the
25subparagraph.
26 Sec. 103. Section 331.512, subsection 15, Code 2021, is
27amended by striking the subsection.
28 Sec. 104. Section 331.559, subsection 27, Code 2021, is
29amended by striking the subsection.
30 Sec. 105. Section 441.21A, subsection 1, paragraph a, Code
312021, is amended to read as follows:
32a. For each fiscal year beginning on or after July 1, 2014,
33but before July 1, 2029, there is appropriated from the general
34fund of the state to the department of revenue an amount
35necessary for the payment of all commercial and industrial
-48-1property tax replacement claims under this section for the
2fiscal year. However, for a the fiscal year years beginning
3on or after July 1, 2017, July 1, 2018, July 1, 2019, July 1,
42020, and July 1, 2021, the total amount of moneys appropriated
5from the general fund of the state to the department of revenue
6for the payment of commercial and industrial property tax
7replacement claims in that each fiscal year shall not exceed
8the total amount of money necessary to pay all commercial and
9industrial property tax replacement claims for the fiscal year
10beginning July 1, 2016.
11 Sec. 106. Section 441.21A, subsections 2 and 3, Code 2021,
12are amended to read as follows:
132. a. Beginning with the For each fiscal year beginning
14on or after July 1, 2014, but before July 1, 2022, each county
15treasurer shall be paid by the department of revenue an
16amount equal to the amount of the commercial and industrial
17property tax replacement claims in the county, as calculated
18in subsection 4. If an amount appropriated for a the fiscal
19year beginning on July 1, 2017, July 1, 2018, July 1, 2019,
20July 1, 2020, or July 1, 2021, is insufficient to pay all
21replacement claims for the fiscal year, the director of revenue
22shall prorate the payment of replacement claims to the county
23treasurers and shall notify the county auditors of the pro rata
24percentage on or before September 30.
25b. For each fiscal year beginning on or after July 1, 2022,
26but before July 1, 2029, each county treasurer shall be paid
27by the department of revenue an amount equal to the sum of the
28commercial and industrial property tax replacement claims for
29all taxing authorities, or portion thereof, located in the
30county, as calculated in subsection 4A. The county treasurer
31shall pay to each taxing authority the taxing authority’s
32commercial and industrial property tax replacement claim, or
33portion thereof, as calculated in subsection 4A.
343. a. On or before July 1 of each fiscal year beginning on
35or after July 1, 2014, but before July 1, 2022, the assessor
-49-1shall report to the county auditor the total actual value of
2all commercial property and industrial property in the county
3that is subject to assessment and taxation for the assessment
4year used to calculate the taxes due and payable in that fiscal
5year.
6b. On or before July 1, 2022, the department of management
7shall calculate and report to the department of revenue for
8each taxing authority in this state that is a city or a county
9all of the following:
10(1) The total assessed value as of January 1, 2012, of
11all taxable property located in the taxing authority that is
12subject to assessment and taxation used to calculate taxes
13which are due and payable in the fiscal year beginning July 1,
142013, excluding property subject to the statewide property tax
15imposed under section 437A.18 or 437B.14.
16(2) The total assessed value as of January 1, 2019, of
17all taxable property located in the taxing authority that is
18subject to assessment and taxation used to calculate taxes
19which are due and payable in the fiscal year beginning July 1,
202020, excluding property subject to the statewide property tax
21imposed under section 437A.18 or 437B.14.
22 Sec. 107. Section 441.21A, subsection 4, unnumbered
23paragraph 1, Code 2021, is amended to read as follows:
24On or before a date established by rule of the department
25of revenue of each fiscal year beginning on or after July
261, 2014, but before July 1, 2022, the county auditor shall
27prepare a statement, based upon the report received pursuant to
28subsection 3, paragraph “a”, listing for each taxing district
29in the county:
30 Sec. 108. Section 441.21A, Code 2021, is amended by adding
31the following new subsection:
32 NEW SUBSECTION. 4A. a. As used in this subsection, unless
33the context clearly requires otherwise:
34(1) “Qualified taxing authority” means any of the following:
35(a) A taxing authority that is not a city or a county.
-50- 1(b) A taxing authority that is a city or county for which
2the amount determined under subsection 3, paragraph “b”,
3subparagraph (2), is less than one hundred thirty-one and
4twenty-four hundredths percent of the amount determined under
5subsection 3, paragraph “b”, subparagraph (1).
6(2) “Taxing authority” means a city, county, community
7college, or other governmental entity or political subdivision
8in this state authorized to certify a levy on property located
9within such authority, but does not include a school district.
10b. For fiscal years beginning on or after July 1, 2022,
11but before July 1, 2029, the amount of each taxing authority’s
12replacement claim is as follows:
13(1) If the taxing authority is a qualified taxing authority:
14(a) For the fiscal year beginning July 1, 2022,
15seven-eighths of the amount received by the taxing authority
16under this section for the fiscal year beginning July 1, 2021.
17(b) For the fiscal year beginning July 1, 2023, six-eighths
18of the amount received by the taxing authority under this
19section for the fiscal year beginning July 1, 2021.
20(c) For the fiscal year beginning July 1, 2024, five-eighths
21of the amount received by the taxing authority under this
22section for the fiscal year beginning July 1, 2021.
23(d) For the fiscal year beginning July 1, 2025, four-eighths
24of the amount received by the taxing authority under this
25section for the fiscal year beginning July 1, 2021.
26(e) For the fiscal year beginning July 1, 2026,
27three-eighths of the amount received by the taxing authority
28under this section for the fiscal year beginning July 1, 2021.
29(f) For the fiscal year beginning July 1, 2027, two-eighths
30of the amount received by the taxing authority under this
31section for the fiscal year beginning July 1, 2021.
32(g) For the fiscal year beginning July 1, 2028, one-eighth
33of the amount received by the taxing authority under this
34section for the fiscal year beginning July 1, 2021.
35(2) If the taxing authority is not a qualified taxing
-51-1authority:
2(a) For the fiscal year beginning July 1, 2022, four-fifths
3of the amount received by the taxing authority under this
4section for the fiscal year beginning July 1, 2021.
5(b) For the fiscal year beginning July 1, 2023, three-fifths
6of the amount received by the taxing authority under this
7section for the fiscal year beginning July 1, 2021.
8(c) For the fiscal year beginning July 1, 2024, two-fifths
9of the amount received by the taxing authority under this
10section for the fiscal year beginning July 1, 2021.
11(d) For the fiscal year beginning July 1, 2025, one-fifth of
12the amount received by the taxing authority under this section
13for the fiscal year beginning July 1, 2021.
14(e) For the fiscal year beginning July 1, 2026, and each
15succeeding fiscal year beginning before July 1, 2029, zero.
16(3) The department of management shall calculate and report
17to the department of revenue the amount received by each
18taxing authority in this state as the result of commercial and
19industrial property tax replacement claims paid for the fiscal
20year beginning July 1, 2021, and the portion of the amount
21attributable to each county where the taxing authority is
22located, if applicable.
23 Sec. 109. Section 441.21A, subsection 5, Code 2021, is
24amended to read as follows:
255. For purposes of computing replacement amounts under
26this section for fiscal years beginning on or after July 1,
272014, but before July 1, 2022, that portion of an urban renewal
28area defined as the sum of the assessed valuations defined in
29section 403.19, subsections 1 and 2, shall be considered a
30taxing district.
31 Sec. 110. Section 441.21A, subsection 6, paragraph a, Code
322021, is amended to read as follows:
33a. The For fiscal years beginning on or after July 1, 2014,
34but before July 1, 2022, the county auditor shall certify
35and forward one copy of the statement to the department of
-52-1revenue not later than a date of each year established by the
2department of revenue by rule.
3 Sec. 111. Section 441.21A, subsection 6, Code 2021, is
4amended by adding the following new paragraph:
5 NEW PARAGRAPH. f. This subsection shall apply to the
6apportionment of replacement claim amounts for fiscal years
7beginning on or after July 1, 2014, but before July 1, 2022.
8 Sec. 112. Section 441.21A, Code 2021, is amended by adding
9the following new subsections:
10 NEW SUBSECTION. 7. a. For fiscal years beginning on
11or after July 1, 2022, but before July 1, 2029, each taxing
12authority’s replacement claim calculated under subsection 4A,
13or portion thereof, shall be paid to the appropriate county
14treasurer, as provided in subsection 2, paragraph “b”, in equal
15installments in September and March of each year.
16b. After payment by the county treasurer to the taxing
17authority, the taxing authority’s replacement claim shall be
18apportioned and credited by the governing body of the taxing
19authority among the taxing authority’s tax levies in the same
20proportion that each property tax levy bears to the total of
21all property tax levies imposed by the taxing authority for the
22fiscal year for which the payment is received.
23c. Of the amounts allocated and credited to each property
24tax levy that is subject to division under section 403.19,
25the total amount paid into the fund for the taxing authority
26as taxes by or for the taxing authority into which all other
27property taxes are paid and the special fund of the applicable
28municipality under section 403.19, subsection 2, shall be an
29amount of the replacement claim that is proportionate to the
30amount of the total sum of the assessed value of the taxable
31commercial and industrial property in the urban renewal area as
32a share of total assessed value of all taxable property in the
33taxing authority and shall be apportioned as follows:
34(1) To the fund for the taxing authority as taxes by or for
35the taxing authority into which all other property taxes are
-53-1paid, an amount proportionate to the amount of actual value of
2the commercial and industrial property in the urban renewal
3area as determined in section 403.19, subsection 1, that was
4subtracted pursuant to section 403.20, as it bears to the
5total amount of actual value of the commercial and industrial
6property in the urban renewal area that was subtracted pursuant
7to section 403.20 for the assessment year for property taxes
8due and payable in the fiscal year for which the replacement
9claim is computed.
10(2) (a) To the special fund of the applicable municipality
11under section 403.19, subsection 2, the remaining amount, if
12any.
13(b) The amount allocated under subparagraph division (a)
14shall not exceed the amount equal to the amount certified to
15the county auditor under section 403.19 for the fiscal year in
16which the claim is paid, after deduction of the amount of other
17revenues committed for payment on that amount for the fiscal
18year. The amount not allocated as a result of the operation of
19this subparagraph division (b) shall be allocated to and paid
20into the fund for the taxing authority as taxes by or for the
21taxing authority in the manner provided in subparagraph (1).
22 NEW SUBSECTION. 8. This section is repealed July 1, 2029.
23 Sec. 113. EFFECTIVE DATE. The following take effect July
241, 2029:
251. The section of this division of this Act amending section
26331.512.
272. The section of this division of this Act amending section
28331.559.
29DIVISION XXIII
30SCHOOL FOUNDATION PERCENTAGE
31 Sec. 114. Section 257.1, subsection 2, paragraph b, Code
322021, is amended to read as follows:
33b. For the budget year commencing July 1, 1999, and for
34each succeeding budget year beginning before July 1, 2022,
35 the regular program foundation base per pupil is eighty-seven
-54-1and five-tenths percent of the regular program state cost per
2pupil. For the budget year commencing July 1, 2022, and for
3each succeeding budget year, the regular program foundation
4base per pupil is eighty-eight and four-tenths percent of the
5regular program state cost per pupil. For the budget year
6commencing July 1, 1991, and for each succeeding budget year
7the special education support services foundation base is
8seventy-nine percent of the special education support services
9state cost per pupil. The combined foundation base is the sum
10of the regular program foundation base, the special education
11support services foundation base, the total teacher salary
12supplement district cost, the total professional development
13supplement district cost, the total early intervention
14supplement district cost, the total teacher leadership
15supplement district cost, the total area education agency
16teacher salary supplement district cost, and the total area
17education agency professional development supplement district
18cost.
19 Sec. 115. Section 257.3, subsection 1, paragraph d, Code
202021, is amended by striking the paragraph.
21 Sec. 116. EFFECTIVE DATE. The section of this division of
22this Act amending section 257.3, subsection 1, paragraph “d”,
23takes effect July 1, 2022.
24DIVISION XXIV
25PUBLIC EDUCATION AND RECREATION TAX LEVY
26 Sec. 117. Section 276.10, subsection 1, Code 2021, is
27amended to read as follows:
281. The board of directors of a local school district
29may establish a community education program for schools in
30the district and provide for the general supervision of the
31program. Financial support for the program shall may be
32provided from funds raised pursuant to chapter 300 received by
33the school district under chapter 423F and from any private
34funds and any federal funds made available for the purpose of
35implementing this chapter. The program which recognizes that
-55-1the schools belong to the people and which shall be centered
2in the schools may include but shall not be limited to the use
3of the school facilities day and night, year round including
4weekends and regular school vacation periods for educational,
5recreational, cultural, and other community services and
6programs for all age, ethnic, and socioeconomic groups residing
7in the community.
8 Sec. 118. Section 278.1, subsection 1, paragraph e, Code
92021, is amended to read as follows:
10e. Direct the transfer of any surplus in the debt service
11fund, physical plant and equipment levy fund, or other capital
12project funds, or public education and recreation levy fund to
13the general fund.
14 Sec. 119. Section 298A.6, Code 2021, is amended to read as
15follows:
16298A.6 Public education and recreation levy fund.
17The public education and recreation levy fund is a special
18revenue fund. A public education and recreation levy fund
19must be established in any school corporation which levies
20 levied the tax authorized under section 300.2, Code 2021, or
21which receives received revenue from a chapter 28E agreement
22authorized under section 300.1, Code 2021. Moneys available in
23the fund at the conclusion of the fiscal year beginning July 1,
242023, and ending June 30, 2024, shall be expended by the school
25corporation for the purposes authorized under chapter 300, Code
262021.
27 Sec. 120. Section 300.2, Code 2021, is amended by adding the
28following new subsection:
29 NEW SUBSECTION. 4. a. A levy under this chapter shall not
30be approved by the voters on or after the effective date of
31this division of this Act.
32b. If the levy has not been discontinued under section
33300.3, the authorization to impose the levy under this chapter
34shall terminate July 1, 2024.
35c. Notwithstanding subsection 2, including a proposition
-56-1approved at an election held before the effective date of this
2division of this Act, the rate of a levy imposed by a board of
3directors under this chapter for the fiscal year beginning July
41, 2023, shall not exceed one-half of the levy rate imposed by
5the board of directors for the fiscal year beginning July 1,
62022.
7 Sec. 121. Section 423F.3, subsection 1, paragraph c, Code
82021, is amended by striking the paragraph.
9 Sec. 122. Section 423F.5, subsection 1, Code 2021, is
10amended to read as follows:
111. A school district shall include as part of its financial
12audit for the budget year beginning July 1, 2007, and for
13each subsequent budget year the amount received during the
14year pursuant to chapter 423E or this chapter, as applicable.
15In addition, the financial audit shall include the amount
16of bond levies, and physical plant and equipment levy, and
17public educational and recreational levy reduced as a result
18of the moneys received under chapter 423E or this chapter,
19as applicable. The amount of the reductions shall be stated
20in terms of dollars and cents per one thousand dollars of
21valuation and in total amount of property tax dollars. Also
22included shall be an accounting of the amount of moneys
23received which were spent for infrastructure purposes pursuant
24to chapter 423E or this chapter, as applicable.
25 Sec. 123. REPEAL. Sections 276.11 and 276.12, Code 2021,
26are repealed.
27 Sec. 124. REPEAL. Chapter 300, Code 2021, is repealed.
28 Sec. 125. EFFECTIVE DATE. Except as otherwise provided
29in this division of this Act, this division of this Act takes
30effect July 1, 2024.
31 Sec. 126. EFFECTIVE DATE. The following, being deemed of
32immediate importance, takes effect upon enactment:
33The section of this division of this Act enacting section
34300.2, subsection 4.
35 Sec. 127. APPLICABILITY. Except for the section of this
-57-1division of this Act enacting section 300.2, subsection 4, this
2division of this Act applies to fiscal years beginning on or
3after July 1, 2024.
4DIVISION XXV
5ELDERLY PROPERTY TAX CREDIT
6 Sec. 128. Section 25B.7, subsection 2, paragraph b, Code
72021, is amended to read as follows:
8b. Low-income property tax credit and elderly and disabled
9property tax credit pursuant to sections 425.16 through 425.40,
10subject to the limitation of 41, paragraph “b”.
11 Sec. 129. Section 425.17, subsection 2, Code 2021, is
12amended to read as follows:
132. a. “Claimant” means either any of the following:
14(1) A person filing a claim for credit or reimbursement
15 under this subchapter who has attained the age of sixty-five
16years but who has not attained the age of seventy years on
17or before December 31 of the base year or, a person filing a
18claim for credit or reimbursement under this subchapter who
19is totally disabled and was totally disabled on or before
20December 31 of the base year, or a person filing a claim for
21reimbursement under this subchapter who has attained the age of
22sixty-five years on or before December 31 of the base year and
23who is domiciled in this state at the time the claim is filed or
24at the time of the person’s death in the case of a claim filed
25by the executor or administrator of the claimant’s estate.
26(2) A person filing a claim for credit or reimbursement
27under this subchapter who has attained the age of twenty-three
28years on or before December 31 of the base year or was a head
29of household on December 31 of the base year, as defined in
30the Internal Revenue Code, but has not attained the age or
31disability status described in this paragraph “a”, subparagraph
32(1) or the age status and eligibility criteria of subparagraph
33(3), and is domiciled in this state at the time the claim is
34filed or at the time of the person’s death in the case of a
35claim filed by the executor or administrator of the claimant’s
-58-1estate, and was not claimed as a dependent on any other
2person’s tax return for the base year.
3(3) A person filing a claim for credit under this subchapter
4who has attained the age of seventy years on or before December
531 of the base year, who has a household income of less than
6two hundred fifty percent of the federal poverty level, as
7defined by the most recently revised poverty income guidelines
8published by the United States department of health and human
9services, and is domiciled in this state at the time the claim
10is filed or at the time of the person’s death in the case of a
11claim filed by the executor or administrator of the claimant’s
12estate.
13b. “Claimant” under paragraph “a”, subparagraph (1) or(2),
14 includes a vendee in possession under a contract for deed and
15may include one or more joint tenants or tenants in common.
16In the case of a claim for rent constituting property taxes
17paid, the claimant shall have rented the property during any
18part of the base year. In the case of a claim for property
19taxes due, the claimant shall have occupied the property during
20any part of the fiscal year beginning July 1 of the base year.
21If a homestead is occupied by two or more persons, and more
22than one person is able to qualify as a claimant, the persons
23may each file a claim based upon each person’s income and rent
24constituting property taxes paid or property taxes due.
25 Sec. 130. Section 425.23, subsection 1, paragraph a,
26unnumbered paragraph 1, Code 2021, is amended to read as
27follows:
28The tentative credit or reimbursement for a claimant
29described in section 425.17, subsection 2, paragraph “a”,
30subparagraphs subparagraph (1) and (2), if no appropriation is
31made to the fund created in section 425.40 shall be determined
32in accordance with the following schedule:
33 Sec. 131. Section 425.23, subsection 1, Code 2021, is
34amended by adding the following new paragraph:
35 NEW PARAGRAPH. c. The tentative credit for a claimant
-59-1described in section 425.17, subsection 2, paragraph “a”,
2subparagraph (3), shall be the greater of the following:
3(1) The amount of the credit under the schedule specified
4in paragraph “a” of this subsection as if the claimant was a
5claimant as defined in section 425.17, subsection 2, paragraph
6“a”, subparagraph (1), filing for a credit under paragraph “a”
7of this subsection.
8(2) The difference between the actual amount of property
9taxes due on the homestead during the fiscal year next
10following the base year minus the actual amount of property
11taxes due on the homestead during the first fiscal year for
12which the claimant filed a claim for a credit calculated under
13this paragraph “c” and for which the property taxes due on the
14homestead were calculated on an assessed valuation that was
15not a partial assessment and if the claimant has filed for the
16credit calculated under this paragraph “c” for each of the
17subsequent fiscal years after the first credit claimed.
18 Sec. 132. Section 425.23, subsection 4, paragraph a, Code
192021, is amended to read as follows:
20a. For the base year beginning in the 1999 calendar year
21and for each subsequent base year, the dollar amounts set
22forth in subsections subsection 1, paragraphs “a” and “b”, and
23subsection 3 shall be multiplied by the cumulative adjustment
24factor for that base year. “Cumulative adjustment factor” means
25the product of the annual adjustment factor for the 1998 base
26year and all annual adjustment factors for subsequent base
27years. The cumulative adjustment factor applies to the base
28year beginning in the calendar year for which the latest annual
29adjustment factor has been determined.
30 Sec. 133. Section 425.24, Code 2021, is amended to read as
31follows:
32425.24 Maximum property tax for purpose of credit or
33reimbursement.
34In For claimants under section 425.17, subsection 2,
35paragraph “a”, subparagraphs (1) and (2), and for the
-60-1calculation under section 425.23, subsection 1, paragraph “c”,
2subparagraph (1), in any case in which property taxes due or
3rent constituting property taxes paid for any household exceeds
4one thousand dollars, the amount of property taxes due or rent
5constituting property taxes paid shall be deemed to have been
6one thousand dollars for purposes of this subchapter.
7 Sec. 134. Section 425.39, subsection 1, as amended by 2021
8Iowa Acts, House File 368, section 33, is amended to read as
9follows:
101. a. The elderly and disabled property tax credit fund is
11created. There is appropriated annually from the general fund
12of the state to the department of revenue to be credited to the
13elderly and disabled property tax credit fund, from funds not
14otherwise appropriated, an amount sufficient to implement this
15subchapter for credits for property taxes due for claimants
16described in section 425.17, subsection 2, paragraph “a”,
17subparagraph subparagraphs (1) and (3), subject to paragraph
18“b”.
19b. Regardless of the amount of the credit determined under
20section 425.23, subsection 1, paragraph “c”, the amount paid by
21the director of revenue to each county treasurer for credits
22for claimants described under section 425.17, subsection 2,
23paragraph “a”, subparagraph (3), shall not exceed the amount
24calculated for the claimant under section 425.23, subsection 1,
25paragraph “c”, subparagraph (1), and section 25B.7, subsection
261, shall not apply to the amount of the credit in excess of the
27amount paid by the director of revenue.
28 Sec. 135. APPLICABILITY. This division of this Act applies
29to claims under chapter 425, subchapter II, filed on or after
30January 1, 2022.
31DIVISION XXVI
32TRANSIT FUNDING
33 Sec. 136. Section 28M.3, subsection 1, Code 2021, is amended
34to read as follows:
351. A regional transit district shall have all the rights,
-61-1powers, and duties of a county enterprise pursuant to sections
2331.462 through 331.469 as they relate to the purpose for
3which the regional transit district is created, including
4the authority to issue revenue bonds for the establishment,
5construction, reconstruction, repair, equipping, remodeling,
6extension, maintenance, and operation of works, vehicles, and
7facilities of a regional transit district. In addition, a
8regional transit district, with the approval of the board of
9supervisors, may issue general obligation bonds as an essential
10county purpose pursuant to chapter 331, subchapter IV, part 3,
11for the establishment, construction, reconstruction, repair,
12equipping, remodeling, extension, maintenance, and operation of
13works, vehicles, and facilities of a regional transit district.
14Such general obligation bonds are payable from the property tax
15levy authorized in section 28M.5 and from the transit hotel and
16motel tax imposed under section 423A.4, subsection 1, paragraph
17“b”, if applicable.
18 Sec. 137. Section 28M.4, subsection 3, Code 2021, is amended
19to read as follows:
203. A commission shall adopt and certify an annual budget
21for the regional transit district. A commission in its budget
22shall allocate the revenue responsibilities of each county and
23city participating in the regional transit district, subject
24to reductions in the maximum authorized property tax levy
25rate under section 28M.5, if applicable. A commission shall
26be considered a municipality for purposes of adopting and
27certifying a budget pursuant to chapter 24.
28 Sec. 138. Section 28M.4, Code 2021, is amended by adding the
29following new subsection:
30 NEW SUBSECTION. 4A. A commission may, following approval at
31election, impose a transit hotel and motel tax under section
32423A.4, subsection 1, paragraph “b”.
33 Sec. 139. Section 28M.4, subsections 5 and 6, Code 2021, are
34amended to read as follows:
355. A commission shall levy for the tax under section 28M.5
-62-1 and shall control any tax revenues paid to the regional transit
2district the commission administers and, including all moneys
3derived from the operation of the regional transit district,
4a transit hotel and motel tax imposed under section 423A.4,
5subsection 1, paragraph “b”, the sale of its the district’s
6 property, interest on investments, or from any other source
7related to the regional transit district.
86. Tax revenues collected from a regional transit district
9levy or a transit hotel and motel tax under section 423A.4,
10subsection 1, paragraph “b”, shall be held by the county
11treasurer. Before the fifteenth day of each month, the county
12treasurer shall send the amount collected for each fund through
13the last day of the preceding month for direct deposit into
14the depository and account designated by the commission. The
15county treasurer shall send a notice to the secretary of the
16commission or the secretary’s designee stating the amount
17deposited, the date, the amount to be credited to each fund
18according to the budget, and the source of the revenue.
19 Sec. 140. Section 28M.5, subsections 1 and 4, Code 2021, are
20amended to read as follows:
211. a. The commission, with the approval of the board of
22supervisors of participating counties and the city council of
23participating cities in the chapter 28E agreement, may, subject
24to the reductions required under paragraph “b”, levy annually a
25tax not to exceed ninety-five cents per thousand dollars of the
26assessed value of all taxable property in a regional transit
27district to the extent provided in this section. The chapter
2828E agreement may authorize the commission to levy the tax at
29different rates within the participating cities and counties in
30amounts sufficient to meet the revenue responsibilities of such
31cities and counties as allocated in the budget adopted by the
32commission. However, for a city participating in a regional
33transit district, the total of all the tax levies imposed in
34the city pursuant to section 384.12, subsection 10, and this
35section shall not exceed the aggregate of ninety-five cents per
-63-1thousand dollars of the assessed value of all taxable property
2in the participating city or the levy rate determined under
3paragraph “b”, whichever is less.
4b. (1) If a regional transit district imposes a transit
5hotel and motel tax under section 423A.4, subsection 1,
6paragraph “b”, the maximum levy rate authorized under this
7section shall be reduced as provided in this paragraph. For
8each fiscal year beginning on or after July 1 following the
9first calendar year for which the transit hotel and motel
10tax is imposed in the regional transit district, and until
11subparagraph (4) applies, the levy rate imposed under this
12section shall not exceed a rate equal to the rate that would
13be required for the fiscal year beginning July 1 following the
14election approving the transit hotel and motel tax to collect
15an amount equal to the property taxes collected by the regional
16transit district for the fiscal year beginning July 1 following
17the election approving the transit hotel and motel tax minus
18the amount of transit hotel and motel tax revenue received by
19the regional transit district for the first calendar year for
20which the transit hotel and motel tax is imposed.
21(2) If the regional transit district authorizes the
22commission to levy the tax at different rates within the
23participating cities and counties, as authorized under
24paragraph “a”, the levy rate reduction required under this
25paragraph shall be applied by the department of management
26to each participating city and county based upon the revenue
27responsibilities of such cities and counties as provided in the
28chapter 28E agreement on the date the transit hotel and motel
29tax is approved at election.
30(3) If a regional transit district increases the rate of the
31transit hotel and motel tax, further reductions in the maximum
32authorized levy rate under this section shall be implemented
33in the same manner as provided under subparagraphs (1) and (2)
34for the reductions following initial imposition of the transit
35hotel and motel tax.
-64- 1(4) If the regional transit district repeals the transit
2hotel and motel tax, the maximum authorized levy rate shall be
3ninety-five cents per thousand dollars of the assessed value
4for fiscal years beginning after the date of termination under
5section 423A.4, unless the transit hotel and motel tax is
6reinstated.
74. The proceeds of the tax levy and other authorized
8revenues of the regional transit district shall be used for
9the operation and maintenance of a regional transit district,
10for payment of debt obligations of the district, and for the
11creation of a reserve fund. The commission may divide the
12territory of a regional transit district outside the boundaries
13of a city into separate service areas and impose a regional
14transit district levy not to exceed the maximum rate authorized
15by this section in each service area.
16 Sec. 141. Section 303.52, subsection 4, paragraph a, Code
172021, is amended to read as follows:
18a. The board of trustees may by ordinance impose a local
19 hotel and motel tax in accordance with chapter 423A.
20 Sec. 142. Section 331.402, subsection 2, paragraph f, Code
212021, is amended to read as follows:
22f. Impose a local hotel and motel tax in accordance with
23chapter 423A.
24 Sec. 143. Section 384.12, subsection 10, Code 2021, is
25amended to read as follows:
2610. a. A tax for the operation and maintenance of a
27municipal transit system or for operation and maintenance of a
28regional transit district, and for the creation of a reserve
29fund for the system or district, in an amount not to exceed
30ninety-five cents per thousand dollars of assessed value
31each year or the levy rate determined under paragraph “b”,
32if applicable, when the revenues from the transit system or
33district are insufficient for such purposes.
34b. (1) If the city participates in a regional transit
35district under chapter 28M that imposes a transit hotel and
-65-1motel tax under section 423A.4, the maximum levy rate shall be
2the levy rate determined under section 28M.5, subsection 1,
3paragraph “b”.
4(2) (a) If the city imposes a transit hotel and motel tax
5under section 423A.4, the maximum levy rate shall be reduced as
6provided in this subparagraph. For each fiscal year beginning
7on or after July 1 following the first calendar year for which
8the transit hotel and motel tax is imposed in the city, and
9until subparagraph division (c) applies, the levy rate imposed
10under this subsection shall not exceed a rate equal to the rate
11that would be required for the fiscal year beginning July 1
12following the election approving the transit hotel and motel
13tax to collect an amount equal to the property taxes collected
14by the city under this subsection for the fiscal year beginning
15July 1 following the election approving the transit hotel and
16motel tax minus the amount of transit hotel and motel tax
17revenue received by the city for the first calendar year for
18which the transit hotel and motel tax is imposed.
19(b) If a city increases the rate of the transit hotel and
20motel tax, further reductions in the maximum authorized levy
21rate under this subsection shall be implemented in the same
22manner as provided under subparagraph division (a) for the
23reduction following initial imposition of the transit hotel and
24motel tax.
25(c) If the city repeals the transit hotel and motel tax,
26the maximum authorized levy rate shall be ninety-five cents
27per thousand dollars of the assessed value for fiscal years
28beginning after the date of termination under section 423A.4,
29unless the transit hotel and motel tax is reinstated.
30 Sec. 144. Section 423A.4, Code 2021, is amended to read as
31follows:
32423A.4 Locally imposed Local hotel and motel tax — transit
33hotel and motel tax.
341. a. A city, a county, or a land use district created
35under chapter 303, subchapter IV, may impose, by ordinance of
-66-1the city council or by resolution of the board of supervisors
2or by ordinance of the board of trustees, a local hotel and
3motel tax, at a rate not to exceed seven percent, which shall
4be imposed in increments of one or more full percentage points
5upon the sales price from the renting of lodging. The tax
6when imposed by a city shall apply only within the corporate
7boundaries of that city, when imposed by a county shall apply
8only outside incorporated areas within that county, and when
9imposed by a land use district shall apply only within the
10corporate boundaries of that district. A local hotel and motel
11tax imposed by a city or county shall not be imposed within the
12corporate boundaries of a land use district during any period
13of time that the land use district is imposing a local hotel
14and motel tax.
15b. A regional transit district or a city that is not
16participating in a regional transit district may impose, by
17resolution of the regional transit district commission or by
18ordinance of the city council, a transit hotel and motel tax,
19at a rate not to exceed five percent, which shall be imposed
20in increments of one or more full percentage points upon the
21sales price from the renting of lodging. The tax when imposed
22by a regional transit district shall apply only within the
23boundaries of the regional transit district and may be imposed
24in addition to any tax imposed under paragraph “a”. The tax
25when imposed by a city shall apply only within the corporate
26boundaries of that city and may be imposed in addition to any
27tax imposed under paragraph “a”.
282. Within ten days of the election at which a majority of
29those voting on the question favors the imposition, repeal,
30or change in the rate of the local hotel and motel tax or the
31transit hotel and motel tax, the county auditor shall give
32written notice by sending a copy of the abstract of votes from
33the favorable election to the director of revenue.
343. A local hotel and motel tax imposed by a city, county,
35or land use district shall be imposed on January 1 or July
-67-11, following the notification of the director of revenue. A
2transit hotel and motel tax imposed by a regional transit
3district or a city shall be imposed on January 1, following the
4notification of the director of revenue. Once imposed, the tax
5shall remain in effect at the rate imposed for a minimum of
6one year. A local hotel and motel tax or a transit hotel and
7motel tax shall terminate only on June 30 or December 31. At
8least forty-five days prior to the tax being effective or prior
9to a revision in the tax rate or prior to the repeal of the
10tax, a city, county, or land use district, or regional transit
11district shall provide notice by mail of such action to the
12director of revenue. The director shall have the authority to
13waive the notice requirement.
144. a. A city, county, or land use district shall impose
15or repeal a hotel and motel tax or increase or reduce the
16tax rate only after an election at which a majority of those
17voting on the question favors imposition, repeal, or change
18in rate. A regional transit district or city shall impose or
19repeal a transit hotel and motel tax or increase or reduce the
20tax rate only after an election at which a majority of those
21voting on the question favors imposition, repeal, or change in
22rate. However, a local hotel and motel tax of a city or county
23shall not be repealed or reduced in rate if obligations are
24outstanding which are payable as provided in section 423A.7,
25unless funds sufficient to pay the principal, interest, and
26premium, if any, on the outstanding obligations at and prior
27to maturity have been properly set aside and pledged for that
28purpose.
29b. (1) If the local hotel and motel tax applies only within
30the corporate boundaries of a city, only the registered voters
31of the city shall be permitted to vote. The election shall be
32held at the time of the regular city election or at a special
33election called for that purpose.
34(2) If the local hotel and motel tax applies only in the
35unincorporated areas of a county or only within the corporate
-68-1boundaries of a land use district, only the registered voters
2of the unincorporated areas of the county or the registered
3voters of the land use district, as applicable, shall be
4permitted to vote. The election shall be held at the time of
5the general election or at a special election called for that
6purpose.
7(3) For a transit hotel and motel tax imposed by a regional
8transit district, only the registered voters of the regional
9transit district shall be permitted to vote. The election
10shall be held at the time of the general election or the
11regular city election.
12(4) For a transit hotel and motel tax imposed by a city,
13only the registered voters of the city shall be permitted to
14vote. The election shall be held at the time of the general
15election or the regular city election.
165. The locally imposed local hotel and motel tax and the
17transit hotel and motel tax shall be collected and remitted as
18provided in section 423A.5A.
19 Sec. 145. Section 423A.5A, subsection 3, Code 2021, is
20amended to read as follows:
213. Unless otherwise provided in this section, the
22state-imposed tax under section 423A.3 and any locally, the
23local hotel and motel tax imposed tax under section 423A.4, and
24the transit hotel and motel tax imposed under section 423A.4,
25 shall be collected by the lodging provider from the user of
26that lodging and shall be remitted to the department. The
27lodging provider shall add the state-imposed tax to the sales
28price of the lodging and the tax, when collected, shall be
29stated as a distinct item, separate and apart from the sales
30price of the lodging and from the locally imposed tax taxes
31imposed under section 423A.4, if any. The lodging provider
32shall add the locally imposed each tax imposed under section
33423A.4, if any, to the sales price of the lodging and the tax,
34when collected, shall be stated as a distinct item, separate
35and apart from the sales price of the lodging, and from the
-69-1state-imposed tax, and from the other taxes imposed under
2section 423A.4.
3 Sec. 146. Section 423A.6, subsections 1, 3, and 4, Code
42021, are amended to read as follows:
51. The director of revenue shall administer the state,
6 and local, and transit hotel and motel tax taxes as nearly as
7possible in conjunction with the administration of the state
8sales tax law, except that portion of the law which implements
9the streamlined sales and use tax agreement. The director
10shall provide appropriate forms, or provide on the regular
11state tax forms, for reporting state, and local, and transit
12 hotel and motel tax liability. All moneys received or refunded
13one hundred eighty days after the date on which a city, county,
14or land use district, or regional transit district, terminates
15its local hotel and motel tax or transit hotel and motel tax
16 and all moneys received from the state hotel and motel tax
17shall be deposited in or withdrawn from the general fund of the
18state.
193. The director, in consultation with local officials,
20shall collect and account for a local hotel and motel tax and a
21transit hotel and motel tax and shall credit all revenues to
22the local transient guest tax fund created in section 423A.7.
23Local authorities shall not require any tax permit not required
24by the director of revenue.
254. Section 422.25, subsection 4, sections 422.30, 422.67,
26and 422.68, section 422.69, subsection 1, sections 422.70,
27422.71, 422.72, 422.74, and 422.75, section 423.14, subsection
281, and sections 423.23, 423.24, 423.25, 423.31, 423.33,
29423.35, 423.37 through 423.42, and 423.47, consistent with the
30provisions of this chapter, apply with respect to the taxes
31authorized under this chapter, in the same manner and with
32the same effect as if the state, and local, and transit hotel
33and motel taxes were retail sales taxes within the meaning of
34those statutes. Notwithstanding this subsection, the director
35shall provide for quarterly filing of returns and for other
-70-1than quarterly filing of returns both as prescribed in section
2423.31. The director may require all persons who are engaged
3in the business of deriving any sales price subject to tax
4under this chapter to register with the department. All taxes
5collected under this chapter by a retailer, lodging provider,
6lodging facilitator, lodging platform, or any other person are
7deemed to be held in trust for the state of Iowa and the local
8jurisdictions imposing the taxes.
9 Sec. 147. Section 423A.7, subsections 2 and 3, Code 2021,
10are amended to read as follows:
112. All moneys in the local transient guest tax fund shall
12be remitted at least quarterly by the department, pursuant to
13rules of the director of revenue, to each city in the amount
14collected under section 423A.4, subsection 1, paragraph “a”,
15 from businesses in that city, to each county in the amount
16collected under section 423A.4, subsection 1, paragraph “a”,
17 from businesses in the unincorporated areas of the county, and
18 to each land use district in the amount collected under section
19423A.4, subsection 1, paragraph “a”, from businesses in that
20land use district, to each regional transit district in the
21amount collected under section 423A.4, subsection 1, paragraph
22“b”, from businesses within the boundaries of the regional
23transit district and to each city in the amount collected under
24section 423A.4, subsection 1, paragraph “b”, from businesses
25in that city.
263. Moneys received by the city from this fund collected
27under section 423A.4, subsection 1, paragraph “a”, shall be
28credited to the general fund of the city, subject to the
29provisions of subsection 4.
30 Sec. 148. Section 423A.7, Code 2021, is amended by adding
31the following new subsection:
32 NEW SUBSECTION. 6. a. The revenue derived by a regional
33transit district from the transit hotel and motel tax
34authorized by section 423A.4 shall be expended exclusively for
35the purposes of the regional transit district under chapter 28M
-71-1and shall result in a reduction in the maximum levy rate for
2the regional transit district, as provided in section 28M.5,
3subsection 1, paragraph “b”. However, the amount of revenue
4derived by the regional transit district in the second calendar
5year that transit hotel and motel tax is imposed that exceeds
6the amount of revenue derived by the regional transit district
7in the first calendar year that transit hotel and motel tax
8is imposed shall be used for property tax relief for the levy
9under section 28M.5 in addition to the reduction to the levy
10rate as the result of the revenue derived in the first calendar
11year that the transit hotel and motel tax is imposed.
12b. The revenue derived by a city from the transit hotel
13and motel tax authorized by section 423A.4 shall be expended
14exclusively for the operation and maintenance of a municipal
15transit system and shall result in a reduction in the maximum
16levy rate for the city under section 384.12, subsection 10.
17However, the amount of revenue derived by the city in the
18second calendar year that transit hotel and motel tax is
19imposed that exceeds the amount of revenue derived by the
20city in the first calendar year that transit hotel and motel
21tax is imposed shall be used for property tax relief for the
22levy under section 384.12, subsection 10, in addition to the
23reduction to the levy rate as the result of the revenue derived
24in the first calendar year that the transit hotel and motel tax
25is imposed.
26EXPLANATION
27The inclusion of this explanation does not constitute agreement with
28the explanation’s substance by the members of the general assembly.
29This bill relates to state and local revenue and finance by
30modifying future tax contingencies, the state individual and
31corporate income taxes, the state inheritance tax, provides for
32housing incentives, makes transfers, and provides for other
33properly related matters.
34DIVISION I — FUTURE TAX CONTINGENCIES. The bill amends 2018
35Iowa Acts, chapter 1161, section 133 (trigger), by striking
-72-1the two conditions necessary for the trigger to occur, and
2specifies the provisions in 2018 Iowa Acts, chapter 1161,
3sections 99-132, take effect January 1, 2023.
4Currently, the two conditions are necessary for the trigger
5to occur include net general fund revenues for the fiscal year
6ending June 30, 2022, equaling or exceeding $8.3146 billion,
7and also equaling or exceeding 104 percent of the net general
8fund revenues for the fiscal year ending June 30, 2021. If
9these two conditions are not satisfied, current law institutes
10the changes for tax years beginning on or after the January 1
11following the first fiscal year for which the two conditions
12do occur. By striking the “trigger”, the bill sets in motion
13numerous tax changes for tax years beginning on or after
14January 1, 2023, described below.
15INDIVIDUAL INCOME TAX. The tax changes include reducing the
16number of individual income tax brackets from nine to four, and
17modifying the taxable income amounts and tax rates as follows:
18Income over:But not over:Tax Rate:
191)$0$6,0004.40%
202)$6,000$30,0004.82%
213)$30,000$75,0005.70%
224)$75,0006.50%
23For a married couple filing a joint return, the taxable
24income amounts in each bracket above are doubled. Also, the
25taxable income amounts in each bracket above will be indexed to
26inflation and increased in future tax years, beginning in the
27tax year following the 2023 tax year.
28INDIVIDUAL INCOME TAX CALCULATION. Under current law, the
29starting point for computing the Iowa individual income tax is
30federal adjusted gross income before the net operating loss
31deduction, which is generally a taxpayer’s gross income minus
32several deductions. From that point, Iowa requires several
33adjustments and then provides taxpayers with a deduction
34for federal income taxes paid, and the option to deduct a
35standard deduction or itemized deductions. The bill changes
-73-1the starting point for computing the individual income tax
2to federal taxable income, which includes all deductions and
3adjustments taken at the federal level in computing tax,
4including a standard deduction or itemized deductions, and the
5qualified business income deduction allowed for certain income
6earned from a pass-through entity. Because the starting point
7changes to federal taxable income, and federal law does not
8provide for the filing status of married filing separately
9on a combined return, the bill repeals that filing status
10option for Iowa tax purposes. Because net operating loss is
11no longer calculated at the state level, the bill requires a
12taxpayer to add back any federal net operating loss deduction
13carried over from a taxable year beginning prior to the 2023
14tax year, but allows taxpayers to deduct any remaining Iowa net
15operating loss from a prior taxable year. The bill repeals the
16individual alternative minimum tax (AMT), allows an individual
17to claim any remaining AMT credit against the individual’s
18regular tax liability for the 2023 tax year, and then repeals
19the AMT credit in the tax year following the 2023 tax year.
20The bill repeals most Iowa-specific deductions, exemptions,
21and adjustments currently available when computing net income
22and taxable income under Iowa law, including the Iowa optional
23standard deduction and all itemized deductions, and the ability
24to deduct federal income taxes, except for a one-year phase
25out in the 2023 tax year for taxes paid, or refunds received,
26that relate to a prior year. The bill maintains the add-back
27for income from securities that are federally exempt but not
28state-exempt, and for bonus depreciation amounts. The bill
29maintains the general pension exclusion and the deduction
30for income from federal securities. The bill maintains the
31deduction for contributions to the Iowa 529 plan, the Iowa ABLE
32plan, a first-time homebuyer savings account, and an individual
33development account. The bill also maintains the deductions
34for military pension income, military active duty pay, social
35security retirement benefits, certain payments received for
-74-1providing unskilled in-home health care, certain amounts
2received from the veterans trust fund, victim compensation
3awards, biodiesel production refunds, certain wages paid
4to individuals with disabilities or individuals previously
5convicted of a felony, certain organ donations, and Segal
6AmeriCorps education award payments. The bill modifies the
7existing deduction for health insurance payments in Code
8section 422.7(29) to make the deduction only applicable to
9taxpayers who are at least 65 years old and who have net
10income below $100,000. The bill also modifies the existing
11capital gain deduction in Code section 422.7(21) to restrict
12the deduction to the sale of real property used in farming
13businesses by permitting the taxpayer to take the deduction
14if either of the following apply: the taxpayer materially
15participated in the farming business for at least 10 years and
16held the real property for at least 10 years; or the taxpayer
17sold the real property to a relative. The bill expands the
18definition of “relative” to include an entity in which a
19relative of the taxpayer has a legal or equitable interest in
20the entity as an owner, member, partner, or beneficiary. The
21bill provides a new deduction for any income of an employee
22resulting from the payment by an employer, whether paid to
23the employee or a lender, of principal or interest on the
24employee’s qualified education loan. The bill also modifies
25the calculation of net income for purposes of the alternate
26tax calculation in Code section 422.5(3) and (3B), and the tax
27return filing thresholds in Code section 422.13, to require
28that any amount of itemized deduction, standard deduction,
29personal exemption deduction, or qualified business income
30deduction that was allowed in computing federal taxable income
31shall be added back.
32CORPORATE INCOME TAX AND FRANCHISE TAX CALCULATION. Under
33current law, the starting point for calculating the corporate
34income tax and franchise tax is federal taxable income before
35the net operating loss deduction, because net operating loss is
-75-1calculated at the state level. The bill repeals the separate
2calculation of net operating loss at the state level. As a
3result, the bill requires taxpayers to add back any federal
4net operating loss deduction carried over from a taxable year
5beginning prior to the trigger year, but allows taxpayers to
6deduct any remaining Iowa net operating loss from a prior
7taxable year. The bill also repeals most Iowa-specific
8deductions, exemptions, and adjustments currently available
9when computing net income and taxable income under Iowa law.
10The bill maintains the add-back for income from securities
11that are federally exempt but not state exempt, and for bonus
12depreciation amounts. The bill maintains the deductions for
13income from federal securities, for foreign dividend and
14subpart F income, for certain wages paid to individuals with
15disabilities or individuals previously convicted of a felony,
16and for biodiesel production refunds.
17DIVISION II — CHILD DEPENDENT AND DEVELOPMENT TAX CREDITS.
18 Currently, an individual may claim 30 percent of the federal
19child and dependent care credit provided in section 21 of
20the Internal Revenue Code against the individual income tax
21if the individual’s net income is less than $45,000. Under
22the bill, an individual may claim 30 percent of the federal
23child and dependent care credit provided in section 21 of the
24Internal Revenue Code against the individual income tax if the
25individual’s net income is less than $90,000.
26The bill increases the income threshold determining the
27eligibility of a taxpayer for the early childhood development
28tax credit. The bill increases the eligibility threshold from
29a taxpayer whose net income is less than $45,000 per year to
30less than $90,000 per year. By increasing the eligibility
31threshold, taxpayers whose net income is less than $90,000 are
32now eligible to take the early childhood development tax credit
33equaling 25 percent of the first $1,000 which the taxpayer has
34paid to others for early childhood development expenses for
35each dependent ages three through five.
-76- 1The division applies retroactively to tax years beginning on
2or after January 1, 2021.
3DIVISION III — COVID-19 RELATED GRANTS — TAXATION. The
4bill excludes from the calculation of Iowa individual and
5corporate income tax any qualifying COVID-19 grant issued to an
6individual or business by the economic development authority,
7the Iowa finance authority, or the department of agriculture
8and land stewardship.
9Under the bill, “qualifying COVID-19 grant” includes any
10grant that was issued between March 17, 2020, and December
1131, 2021, identified by the department by rule under a
12grant program created to primarily provide COVID-19 related
13financial assistance to economically impacted individuals and
14businesses located in this state, and administered by the
15economic development authority, Iowa finance authority, or the
16department of agriculture and land stewardship.
17Under current law, financial assistance grants provided to
18small businesses by the economic development authority under
19the Iowa small business COVID-19 relief grant program are
20excluded from the calculation of Iowa individual and corporate
21income tax.
22The COVID-19 grant income tax exclusion provided in the bill
23is repealed on January 1, 2024, and does not apply to tax years
24beginning on or after that date.
25The division takes effect upon enactment and applies
26retroactively to March 17, 2020, for tax years ending on or
27after that date.
28DIVISION IV — FEDERAL PAYCHECK PROTECTION PROGRAM. Under
29current law, for the tax year 2020 and later, Iowa law fully
30conforms with the federal treatment of forgiven paycheck
31protection program loans and excludes such amounts from net
32income and allows certain deductions for business expenses
33paid using those loans. For fiscal-year filers who received
34paycheck protection program loans during the 2019 tax year,
35current law excludes such amounts from net income, but does
-77-1not allow certain deductions for business expenses paid using
2those loans. The bill fully conforms with federal law for
3those fiscal-year filers who previously were excluded from such
4conformity and allows such filers to take business expense
5deductions using federal paycheck protection program loan
6proceeds that were forgiven.
7The division takes effect upon enactment.
8DIVISION V — INSTALLMENT SALES — CAPITAL GAINS.
9 Currently, the capital gain individual income tax deduction is
10governed by Code section 422.7(21). The capital gain deduction
11in Code section 422.7(21) is amended when the trigger occurs
12in 2018 Iowa Acts, chapter 1161, section 113. The capital
13gain deduction in 2018 Iowa Acts, chapter 1161, section 113,
14was further amended by 2019 Iowa Acts, chapter 162. Division
15I of the bill removes the triggers and specifies that 2018
16Iowa Acts, chapter 1161, sections 99 through 132, take effect
17January 1, 2023, including the changes to the capital gain
18deduction mentioned above. The bill specifies that for
19sales occurring on or after January 1, 2023, the capital gain
20deduction is governed by 2019 Iowa Acts, chapter 162, and
21for sales occurring prior to January 1, 2023, the capital
22gain deduction is governed by existing law in Code section
23422.7(21).
24DIVISION VI — STATE INHERITANCE TAX. The bill
25simultaneously increases the size of an estate exempted from
26the state inheritance tax and reduces the inheritance tax rates
27retroactively to January 1, 2021. The bill then repeals the
28state inheritance tax effective January 1, 2024, for property
29of estates of decedents dying on or after January 1, 2024.
30The bill increases the size of an estate exempt from the
31state inheritance tax from $25,000 to $300,000 for decedents
32dying on or after January 1, 2021, but before January 1, 2022,
33from $300,000 to $600,000, for decedents dying on or after
34January 1, 2022, but before January 1, 2023, and from $600,000
35to $1 million, for decedents dying on or after January 1, 2023,
-78-1but before January 1, 2024.
2For decedents dying on or after January 1, 2021, but before
3January 1, 2022, the rates of tax applicable to the state
4inheritance tax are reduced 25 percent. For decedents dying on
5or after January 1, 2022, but before January 1, 2023, the rates
6of tax applicable to the state inheritance tax are reduced 50
7percent. For decedents dying on or after January 1, 2023, but
8before January 1, 2024, the rates of tax applicable to the
9state inheritance tax are reduced 75 percent.
10For decedents dying on or after January 1, 2024, the
11bill repeals the state inheritance tax and the qualified
12use inheritance tax. The bill repeals Code chapters 450
13(inheritance tax) and 450B (qualified use inheritance tax),
14effective January 1, 2034, and directs the Code editor to
15correct references in the Code and the Iowa Acts, to those Code
16chapters.
17The division takes effect upon enactment and applies
18retroactively to decendents dying on or after January 1, 2021.
19DIVISION VII — HOUSING TRUST FUND. Under current law,
2030 percent of the real estate transfer tax receipts paid by
21county recorders to the treasurer of state are transferred to
22the housing trust fund in any one fiscal year, subject to a $3
23million cap; moneys in excess of the cap are deposited in the
24general fund of the state. The bill increases the cap to $7
25million.
26DIVISION VIII — HIGH QUALITY JOBS PROGRAM — DAY CARE
27CENTERS. The bill permits the economic development authority
28to consider whether a proposed project under the high quality
29jobs program will include a licensed child care center for use
30by a business’s employees when determining the eligibility of
31the business to participate in the program.
32DIVISION IX — INVESTMENT TAX CREDITS AND INNOVATION FUND
33TAX CREDITS. Under current law, the authority must allocate $2
34million to investments in qualifying businesses and $8 million
35to equity investments in innovation funds (equity investments).
-79-1The bill limits the authority’s tax credit allocations for
2investments in qualifying businesses and equity investments
3to a maximum aggregate of $10 million. The bill requires the
4authority to determine on or before June 30 of each fiscal
5year the amount of tax credits to be allocated to each. In
6addition, any amount of tax credits allocated and not awarded
7in that fiscal year must be reallocated to either investments
8in qualifying businesses or to equity investments for the next
9fiscal year, and those tax credits do not count toward the
10maximum aggregate of $10 million. This applies to tax credits
11allocated on or after the fiscal year beginning July 1, 2021,
12and for each fiscal year thereafter.
13The bill modifies the maximum amount of an investment tax
14credit that may be issued to a natural person and the person’s
15spouse or dependent from a calendar year basis to a fiscal year
16basis. The maximum amount of tax credits that may be issued
17for equity investments in any one qualifying business is also
18modified from a calendar year to a fiscal year.
19This division of the bill is effective upon enactment.
20DIVISION X — TELEHEALTH — MENTAL HEALTH PARITY. The
21bill requires a health carrier to reimburse a health care
22professional or a facility for health care services for a
23mental health condition, illness, injury, or disease provided
24to a covered person via telehealth on the same basis and at the
25same rate as the health carrier would apply to the same health
26care services provided to the covered person by the health
27care professional or facility in person. “Health carrier” is
28defined in the bill.
29The bill amends the definition of “telehealth” to specify
30that the delivery of health care services via telehealth must
31include real-time interactive audio, video, or electronic
32media, regardless of the location of the health care
33professional or the covered person.
34The bill prohibits a health carrier from requiring an
35additional health care professional to be located in the same
-80-1room as a covered person while health care service for a mental
2health condition, illness, injury, or disease are provided via
3telehealth by another health care professional to the covered
4person.
5This division of the bill is effective upon enactment and
6applies retroactively to health care services for a mental
7health condition, illness, injury, or disease provided to a
8covered person via telehealth on or after January 1, 2021.
9DIVISION XI — HIGH QUALITY JOBS AND RENEWABLE CHEMICAL
10PRODUCTION TAX CREDITS. Division I reduces the maximum
11amount of tax credits that the economic development authority
12(authority) may allocate to the high quality jobs program for
13the fiscal year beginning July 1, 2021, and for each fiscal
14year thereafter, from $105 million to $70 million. The maximum
15amount of tax credits that the authority may allocate to the
16renewable chemical production tax credit program for the fiscal
17year beginning July 1, 2021, and ending June 30, 2022, and for
18each fiscal year thereafter is reduced from $10 million to $5
19million.
20DIVISION XII — HIGH QUALITY JOBS — ELIGIBILITY
21REQUIREMENTS. To be eligible to receive incentives or
22assistance under the high quality jobs program, a business
23cannot be in the process of reducing operations in one
24community while simultaneously apply for assistance under the
25program. Under current law, a reduction in operations within
2612 months before or after a business submits an application to
27the high quality jobs program is presumed to be a reduction
28in operations while simultaneously applying for assistance
29under the program. Under the bill, the economic development
30authority (authority) cannot presume that a reduction in
31operations is a reduction while simultaneously applying for
32assistance under the program with regard to a business that
33submits an application on or before June 30, 2022, if the
34business demonstrates to the satisfaction of the authority that
35the reduction in operations occurred after March 1, 2020, and
-81-1that it was a result of the COVID-19 pandemic. The authority
2must consider whether the benefit of the project proposed by
3the business outweighs any negative impact related to the
4reduction in operations. The business remains subject to all
5other eligibility requirements. This division of the bill is
6repealed July 1, 2022.
7DIVISION XIII — MANUFACTURING 4.0. The division
8establishes the manufacturing 4.0 technology investment
9program (program) and creates the manufacturing 4.0 technology
10investment fund (fund). “Manufacturing 4.0 technology
11investments” (investments) is defined as projects that are
12intended to lead to the adoption of, and integration of, smart
13technologies into existing manufacturing operations located
14in the state by mitigating the risk to the manufacturer of
15significant technology investments. Projects may include
16investments in specialized hardware, software, or other
17equipment intended to assist a manufacturer in increasing the
18manufacturer’s productivity, efficiency, and competitiveness.
19The fund may be administered as a revolving fund and may
20consist of any moneys appropriated for purposes of the program
21and any other moneys that are lawfully available to the
22authority. The authority must use moneys in the fund to award
23financial assistance to eligible manufacturers for investments.
24Financial assistance may include but is not limited to
25grants, loans, and forgivable loans. The requirements for a
26manufacturer to be eligible for financial assistance under the
27program are outlined in the bill.
28Eligible manufacturers must submit an application to the
29program in the manner prescribed by the economic development
30authority (authority) by rule. The authority may accept
31applications during one or more application periods during a
32fiscal year as determined by the authority. All completed
33applications must be reviewed and scored on a competitive basis
34pursuant to rules adopted by the authority. The authority may
35engage an outside technical review panel (panel) to complete a
-82-1technical review of applications. The authority board members
2appointed by the governor must review the recommendations
3of the authority and of the panel, if applicable, and
4shall approve, defer, or deny each application. In making
5recommendations to the board, the authority and the panel must
6consider the factors detailed in the bill.
7The board cannot approve an application for financial
8assistance for an investment that was made prior to the date
9of the application.
10The maximum amount of financial assistance awarded to an
11eligible manufacturer under the program cannot exceed $75,000.
12The authority must adopt rules as necessary to implement and
13administer the program.
14DIVISION XIV — ENERGY INFRASTRUCTURE REVOLVING LOAN
15PROGRAM. The division modifies Code section 476.46, alternate
16energy revolving loan program, to prohibit the Iowa energy
17center from initiating any new loans after June 30, 2021. The
18division also requires that all loan payments received after
19June 30, 2021, be deposited, and any moneys remaining in the
20alternate energy revolving loan fund after June 30, 2021,
21be transferred, to the newly created energy infrastructure
22revolving loan fund.
23The division creates an energy infrastructure revolving
24fund (fund) in the office of the treasurer of state to be
25administered by the Iowa energy center (center). Moneys in
26the fund are to be used to provide financial assistance for
27the development and construction of energy infrastructure,
28including projects that support electric or gas generation
29transmission, storage, or distribution; electric grid
30modernization; energy-sector workforce development; emergency
31preparedness for rural and underserved areas; the expansion
32of biomass, biogas, and renewable natural gas; innovative
33technologies; and the development of infrastructure for
34alternative fuel vehicles. “Energy infrastructure” is defined
35as land, buildings, physical plant and equipment, and services
-83-1directly related to the development of projects used for,
2or useful for, electricity or gas generation, transmission,
3storage, or distribution. “Financial assistance” is also
4defined in the bill.
5The center is required to establish and administer an energy
6infrastructure revolving loan program (program) to encourage
7the development of energy infrastructure within the state. An
8individual, business, rural electric cooperative, or municipal
9utility located and operating in this state is eligible for
10financial assistance under the program. With the approval
11of the center’s governing board, the economic development
12authority (authority) must determine the amount and the terms
13of all financial assistance awarded to an individual, business,
14rural electric cooperative, or municipal utility under the
15program. All agreements and administrative authority are
16vested in the center’s governing board. The authority may
17use not more than 5 percent of the moneys in the fund at the
18beginning of each fiscal year for purposes of administrative
19costs, marketing, technical assistance, and other program
20support.
21DIVISION XV — WORKFORCE HOUSING TAX INCENTIVES. Code
22section 15.119 sets an aggregate tax credit amount limit for
23certain economic development programs. Under current law, the
24workforce housing tax incentives program administered under
25Code sections 15.351 through 15.356 shall not be allocated
26more than $25 million in tax credits, and of the tax credits
27allocated to this program, $10 million is reserved for
28allocation to qualified housing projects in small cities.
29This division increases the workforce housing tax credit
30allocations from $25 million to $40 million for FY 2021-2022.
31Of the moneys allocated to workforce housing tax credits in
32FY 2021-2022, the bill increases the tax credits reserved for
33qualified housing projects in small cities from $10 million
34to $12 million. The bill decreases the workforce housing tax
35credit from $40 million to $35 million in FY 2022-2023. Of
-84-1the moneys allocated to workforce housing tax credits in FY
22022-2023, the bill increases the tax credits allocated to
3small cities from $12 million to $15 million, and reserves $5
4million of the tax credits for qualified housing projects in
5areas of the state with the largest wait list or greatest need
6as determined by the authority. Beginning with FY 2023-2024
7and each fiscal year thereafter, the bill sets the workforce
8housing tax credit allocations at $30 million, of which $15
9million shall be reserved for small cities.
10Currently, upon completion of a housing project, a housing
11business (housing developer, contractor, or nonprofit that
12completes a housing project) submits an examination of the
13project in accordance with the American institute of certified
14public accountants to the authority. In addition to an
15examination by certified public accountants, the bill requires
16the housing business to submit the following to the authority
17upon completion of a housing project: a statement of the
18final amount of the qualifying new investment for the housing
19project and any information the authority deems necessary to
20ensure compliance with the agreement between the authority and
21the housing business including any rules the authority and the
22department of revenue adopt pursuant to Code section 15.356.
23The bill also requires the authority to review the information
24submitted by the housing business prior to notifying the
25housing business of tax incentive awards.
26The bill permits the authority to establish a disaster
27housing recovery period following the declaration of a major
28disaster by the president of the United States. Currently, the
29authority may accept applications for disaster recovery housing
30projects on a continuous basis.
31Moneys available for the program may consist of moneys
32appropriated for use in the program, and any other moneys that
33are lawfully available to the economic development authority,
34including moneys transferred or deposited from other funds
35created pursuant to Code section 15.106A(1)(o).
-85- 1DIVISION XVI — BROWNFIELDS AND GRAYFIELDS. Current law
2provides that the economic development authority (authority)
3may allocate not more than $10 million in tax credits in
4a fiscal year to the brownfield redevelopment program
5(brownfields). The bill increases the maximum allocation of
6tax credits to the brownfields program from $10 million to
7$15 million. The bill provides that tax credits that are not
8awarded or that are revoked (including revoked within the
9previous five years) under brownfields may be awarded during
10the next annual application period, and those tax credits do
11not count against the tax credit maximum. Under current law,
12Code section 15.293A, redevelopment tax credits, is repealed
13on June 30, 2021. The division changes the repeal date to June
1430, 2031, and the repeal date is effective upon enactment of
15the division. Under current law, Code section 15.293B, related
16to the application, review, registration, and authorization of
17projects awarded tax credits under brownfields, is repealed on
18June 30, 2021. The division changes the repeal date to June
1930, 2031, and the repeal date is effective upon enactment of
20the division.
21DIVISION XVII — DOWNTOWN LOAN GUARANTEE PROGRAM. The bill
22creates a downtown loan guarantee program to be administered
23by the economic development authority and the Iowa finance
24authority. The purpose of the program is to encourage downtown
25businesses and banks to reinvest and reopen following the
26COVID-19 pandemic.
27In order for a loan to be guaranteed under the program,
28numerous conditions apply, including the following: the loan
29finances an eligible downtown resources center community
30catalyst building remediation grant project or main street
31Iowa challenge grant within a designated district; the loan
32finances a rehabilitation project or acquisition or refinancing
33costs associated with the project; 25 percent of the project
34cost is used for construction on the project or renovation;
35the financed project includes a housing component; the loan is
-86-1used for the construction or permanent financing of a project;
2a federally insured financial lending institution issued the
3loan; the loan does not reimburse the borrower for working
4capital or operations; and the project meets certain design
5reviews.
6The bill requires the loan to be secured by a mortgage
7against the project property, prohibits the loan guarantee to
8be transferred, and charges the lender an annual loan guarantee
9fee as set forth by rule.
10The bill limits the amount of the loan guarantee as follows:
11for a loan amount of less than or equal to $500,000, the loan
12guarantee shall not exceed 50 percent of the loan; for a
13loan amount greater than $500,000, the economic development
14authority may provide a maximum loan guarantee of up to
15$250,000.
16The economic development authority may guarantee the loan
17for up to five years, which may be extended by the authority
18for an additional five years. The authority may also deny a
19loan guarantee for any unreasonable bank loan fees or interest
20rate.
21In the event of a loss due to default, the bill requires the
22loan guarantee to proportionally pay the guarantee percentage
23of the loss to the lender.
24Moneys available for the program may consist of moneys
25appropriated for use in the program, and any other moneys that
26are lawfully available to the economic development authority,
27including moneys transferred or deposited from other funds
28created pursuant to Code section 15.106A(1)(o).
29DIVISION XVIII — DISASTER RECOVERY ASSISTANCE PROGRAM. The
30bill creates a disaster recovery housing assistance program and
31fund.
32DISASTER RECOVERY HOUSING ASSISTANCE PROGRAM — TRANSFERS.
33 The bill permits the authority to transfer unobligated moneys
34in Code section 16.46 (senior living revolving loan program
35fund), 16.47 (home and community-based services revolving loan
-87-1program fund), 16.48 (transitional housing revolving loan
2program fund), or 16.49 (community housing and services for
3persons with disabilities revolving loan program fund) to the
4disaster recovery housing assistance fund created in the bill.
5After the prior written consent and approval of the
6governor, the bill permits the executive director of the Iowa
7finance authority to transfer any unobligated moneys in any
8fund created pursuant to Code section 16.5(1)(s), for deposit
9in the fund. The bill waives the prior written consent and
10approval of the director of the department of management to
11transfer the unobligated moneys.
12After prior written approval of the governor, the bill
13permits the director of the Iowa economic development authority
14to transfer any unobligated and unencumbered moneys in any fund
15created pursuant to Code section 15.106A(1)(o), for deposit in
16the fund.
17The bill requires any transfer to be reported to the
18legislative fiscal committee of the legislative council on a
19monthly basis.
20DISASTER RECOVERY HOUSING ASSISTANCE PROGRAM — FUND. The
21bill creates a disaster recovery housing assistance fund
22(fund) within the authority. The purpose of the fund is for
23the development and operation of a forgivable loan and grant
24program for homeowners and renters with disaster-affected
25homes, and for an eviction prevention program created in the
26bill. The bill prohibits the authority from using more than
275 percent of the moneys in the fund on July 1 of a fiscal year
28for purposes of administrative costs and other program support
29during the fiscal year.
30The bill directs the authority to establish and administer
31a disaster recovery assistance program (program) and to
32use the moneys in the fund to provide forgivable loans to
33eligible homeowners and grants to eligible renters with
34disaster-affected homes. “Disaster-affected home” is defined
35in the bill as a primary residence that is destroyed or damaged
-88-1due to a natural disaster that occurs on or after the effective
2date of the division, and that is located in a county that due
3to the natural disaster is the subject of a state of disaster
4emergency proclamation by the governor that authorizes disaster
5recovery housing assistance.
6The authority may enter into an agreement with one or
7more local program administrators to administer the program
8and moneys in the fund may be expended following a state of
9disaster emergency proclamation by the governor that authorizes
10disaster recovery housing assistance or the eviction prevention
11program. “Local program administrator” is defined in the bill
12as cities of Ames, Cedar Falls, Cedar Rapids, Council Bluffs,
13Davenport, Des Moines, Dubuque, Iowa City, Waterloo, and West
14Des Moines; a council of governments whose territory includes
15at least one county that is the subject of the state of
16disaster emergency proclamation by the governor that authorizes
17disaster recovery housing assistance or the eviction prevention
18program; a community action agency as defined in Code section
19216A.91 and whose territory includes at least one county that
20is the subject of the state of disaster emergency proclamation
21by the governor that authorizes disaster recovery housing
22assistance or the eviction prevention program; or a qualified
23local organization or governmental entity as determined by rule
24by the authority.
25To be considered for a forgivable loan or grant under the
26program, the homeowner or renter must register for the disaster
27case management program established pursuant to Code section
2829C.20B. The disaster case manager may refer the homeowner or
29renter to the appropriate local program administrator.
30DISASTER RECOVERY HOUSING ASSISTANCE PROGRAM — HOMEOWNERS.
31 To be eligible for a forgivable loan under the program,
32the bill requires a homeowner to own a disaster-affected
33home located in a county that has been proclaimed a state
34of disaster emergency by the governor; the home must have
35sustained damage greater than the damage that is covered by the
-89-1homeowner’s property and casualty insurance policy insuring
2the home plus any other state or federal disaster-related
3financial assistance that the homeowner is eligible to receive;
4an official must deem the home suitable for rehabilitation or
5damaged beyond reasonable repair; if the homeowner is seeking
6a forgivable loan for the repair or rehabilitation of the
7homeowner’s disaster-affected home, the home cannot be proposed
8for buyout by the county or city in which the home is located,
9or the disaster-affected home is eligible for a buyout, but
10the homeowner is requesting a forgivable loan for the repair
11or rehabilitation of the homeowner’s disaster-affected home
12in lieu of a buyout; and the assistance does not duplicate
13benefits provided by other disaster assistance programs.
14If a homeowner is referred to an administrator by the
15homeowner’s case manager, the bill allows the authority to
16award a forgivable loan to the eligible homeowner for repair
17or rehabilitation of the disaster-affected home, or for down
18payment assistance on the purchase of replacement housing,
19and the cost of reasonable repairs to be performed on the
20replacement housing to render it decent, safe, sanitary, and
21in good repair. Replacement housing purchased by a homeowner
22cannot be located in a 100-year floodplain. “Decent, safe,
23sanitary, and in good repair” is defined in the bill to mean
24the same as described in 24 C.F.R.§5.703. “Replacement
25housing” is defined in the bill as housing purchased by a
26homeowner to replace a disaster-affected home that is destroyed
27or damaged beyond reasonable repair as determined by a local
28program administrator.
29The authority shall determine the interest rate for the
30forgivable loan.
31If a homeowner who has been awarded a forgivable loan sells
32a disaster-affected home or replacement housing for which the
33homeowner received the forgivable loan prior to the end of the
34loan term, the remaining principal on the forgivable loan shall
35be due and payable.
-90- 1DISASTER RECOVERY HOUSING ASSISTANCE PROGRAM — RENTERS.
2 To be eligible for a grant under the program, the bill
3requires the local program administrator to either deem
4the disaster-affected home of the renter suitable for
5rehabilitation but unsuitable for current short-term
6habitation, or damaged beyond reasonable repair; and the
7assistance does not duplicate benefits provided by any other
8disaster assistance program.
9DISASTER RECOVERY HOUSING ASSISTANCE PROGRAM — REPORT. The
10bill requires the authority to annually submit a report to
11the general assembly detailing the disaster recovery housing
12assistance program.
13EVICTION PREVENTION PROGRAM. The bill requires the
14authority to establish and administer an eviction prevention
15program. Under the eviction prevention program, the authority
16awards grants from the disaster recovery housing assistance
17fund to eligible renters and eviction prevention partners.
18Grants may be awarded upon a state of disaster emergency
19proclamation by the governor that authorizes the eviction
20prevention program. The bill defines “eligible renter” to mean
21a renter whose income meets the qualifications of the program,
22who is at risk of eviction, and who resides in a county that
23is the subject of a state of disaster emergency proclamation
24by the governor that also authorizes the eviction prevention
25program. The bill defines “eviction prevention partner” to
26mean a qualified local organization or governmental entity as
27determined by rule by the authority.
28The bill requires grants awarded to eligible renters to be
29used for short-term financial rent assistance to keep eligible
30renters in the current residence of the renter. Grants awarded
31to eviction prevention partners are to be used to pay for rent
32or services provided to eligible renters for the purpose of
33preventing the eviction of eligible renters.
34DISASTER RECOVERY HOUSING ASSISTANCE PROGRAM — RULES. The
35authority shall adopt rules pursuant to Code chapter 17A to
-91-1implement and administer the program including establishing
2the maximum forgivable loan and grant amounts, the terms of
3forgivable loans, and income qualifications of eligible renters
4in the eviction prevention program.
5EFFECTIVE DATE. The division takes effect upon enactment.
6DIVISION XIX — BONUS DEPRECIATION. Currently, when a
7business buys equipment and other capital assets, the business
8is allowed to deduct a portion of the cost of such property
9as depreciation over a certain period for federal and state
10individual or corporate income tax purposes. Federal taxpayers
11are allowed to immediately deduct a higher portion of the cost
12of such property by claiming additional first-year depreciation
13(bonus depreciation). Iowa has recently adopted “rolling
14conformity” with federal tax law but did not conform with
15federal bonus depreciation provisions, meaning a taxpayer
16deducts the cost of the equipment or other capital assets by
17claiming depreciation over a longer time period for Iowa income
18tax purposes. The bill applies retroactively by conforming
19Iowa tax provisions with federal bonus depreciation provisions
20for equipment or other capital assets placed in service on or
21after January 1, 2021, for tax years beginning on or after
22that date. By conforming with federal bonus depreciation
23provisions for tax years beginning on or after January 1, 2021,
24Iowa automatically conforms with the federal limitation on
25business interest expense deductions in Code sections 422.7(60)
26and 422.35(27). Currently, if a taxpayer does not claim
27“bonus depreciation”, Iowa does not conform with the federal
28limitation on business expenses.
29DIVISION XX — BEGINNING FARMER TAX CREDIT. The bill
30provides for the participation of an eligible taxpayer
31(taxpayer) and qualified beginning farmer (beginning farmer)
32in the beginning farmer tax credit program (program) (Code
33section 16.81(4)). Under the program, a tax credit is awarded
34to a taxpayer who transfers agricultural assets to a beginning
35farmer by agricultural lease agreement (agreement). The
-92-1transferred agricultural assets include agricultural land and
2improvements, as well as depreciable agricultural property.
3The agreement must be approved by the Iowa finance authority
4(authority) (Code section 16.79A) who issues a tax credit
5certificate to the taxpayer on an annual basis for the period
6of the agreement (Code section 16.81).
7LEASE OF AGRICULTURAL LAND WHICH INCLUDES IMPROVEMENTS
8(BUILDINGS). The bill provides that the agreement may provide
9for lease of any size parcel of agricultural land and an
10improvement such as a building (amended Code section 16.58(1),
11(2), and (3)). The principal agricultural asset transferred in
12the agreement may be agricultural land or a building or other
13structure used in farming (amended Code section 16.79A(1)).
14PARTICIPATION IN THE PROGRAM — FROM 10 TO 15 YEARS.
15 The bill increases from 10 to 15 the number of years that
16a taxpayer may participate in the program. (amended Code
17section 16.79A(3)). The extended years of participation
18apply retroactively to a taxpayer previously approved by the
19authority to participate in the program (amendment Code section
2016.82(5)).
21PARTICIPATION IN THE PROGRAM — TAX CREDIT CERTIFICATES
22AND AWARDS. The bill provides that a taxpayer may claim
23multiple tax credits under the program (amended Code sections
2416.79A(3) and 16.81(6)) so long as each tax credit is based
25on an agreement approved by the authority (amended Code
26section 16.81(6)). It also provides that the current $50,000
27limitation on tax credits that can be claimed by a taxpayer
28applies to each rather than all such agreements (amended Code
29section 16.82(5)).
30BACKGROUND. Generally, in order to qualify as a beginning
31farmer, a person must have a low or moderate net worth, be able
32to successfully engage in farming, and promise to materially
33participate in the farming operation (Code sections 16.58(6)
34and (10), and 16.79(2)). The amount of the tax credit depends
35upon the type of payment arrangement provided in the agreement,
-93-1including a fixed amount (5 percent of cash rent payment) or
2some form or risk-sharing between the parties (15 percent of
3the market price of the commodity produced on the leasehold).
4A taxpayer may claim the tax credit in the applicable tax year
5up to the taxpayer’s liability. Any amount of the unused tax
6credit may be applied to reduce the taxpayer’s liability for
7each of the following 10 years until depleted, whichever comes
8first; and cannot be refunded (Code section 16.82(7)).
9EFFECTIVE DATE. The division takes effect on January 1,
102022.
11DIVISION XXI — MENTAL HEALTH FUNDING. This division of the
12bill relates to mental health and disability services funding.
13The bill creates a mental health and disability services
14regional service fund under the authority of the department of
15human services. For each fiscal year beginning on or after
16July 1, 2021, the bill appropriates from the general fund
17of the state to the mental health and disability services
18regional service fund an amount necessary to make all regional
19service payments for that fiscal year. The moneys available
20in a fiscal year in the mental health and disability services
21regional service fund, except as specified in the bill,
22are appropriated to the department of human services for
23distribution to each mental health and disability services
24region on a per capita basis calculated using each region’s
25population for that fiscal year and in accordance with
26performance-based contracts with each region. The amount
27of each region’s regional service payment is as follows:
28(1) for the fiscal year beginning July 1, 2021, an amount
29equal to the product of $15.86 multiplied by the sum of the
30region’s population for the fiscal year; (2) for the fiscal
31year beginning July 1, 2022, an amount equal to the product of
32$38 multiplied by the sum of the region’s population for the
33fiscal year; (3) for the fiscal year beginning July 1, 2023,
34an amount equal to the product of $40 multiplied by the sum of
35the region’s population for the fiscal year; (4) for the fiscal
-94-1year beginning July 1, 2024, an amount equal to the product of
2$42 multiplied by the sum of the region’s population for the
3fiscal year; and (5) for each fiscal year beginning on or after
4July 1, 2025, an amount equal to the product of the sum of the
5region’s population for the fiscal year multiplied by the sum
6of the dollar amount used to calculate the regional service
7payments for the immediately preceding fiscal year plus the
8regional service growth factor for the fiscal year. The bill
9defines “regional service growth factor” for a fiscal year to
10be an amount equal to the product of the dollar amount used to
11calculate the regional service payments for the immediately
12preceding fiscal year multiplied by the percent increase, if
13any, in the amount of sales tax revenue deposited into the
14general fund of the state between the fiscal year beginning
15three years prior to the applicable fiscal year and the fiscal
16year beginning two years prior to the applicable year, but not
17to exceed 1.5 percent.
18Regional service payments received by a region are paid in
19quarterly installments and shall be deposited in the region’s
20combined account under Code section 331.391 and used solely
21for providing mental health and disability services under the
22regional service system management plan.
23Under the bill, each mental health and disability services
24region for which the region’s cash flow amount certified
25exceeds a specified percentage of certain actual expenditures
26of the region, the remaining quarterly payments of the region’s
27regional service payment are reduced by an amount equal to
28the amount by which the region’s cash flow amount certified
29exceeds the specified percentage of the actual expenditures
30of the region, but the reduction amount shall not exceed the
31total amount of the region’s regional service payment for the
32fiscal year. If the region’s remaining quarterly payments are
33insufficient to effectuate the required reductions, the region
34is required to pay to the department of human services any
35amount for which the reduction in quarterly payments could not
-95-1be made.
2The amount of reductions to quarterly payments and amounts
3paid to the department of human services as the result of a
4region’s certified cash flow amounts shall be transferred and
5credited to the region incentive fund created in the bill.
6The bill also establishes an incentive fund in the mental
7health and disability services regional service fund to provide
8funding to mental health and disability services regions
9meeting certain eligibility criteria. The incentive fund
10consists of moneys appropriated or credited to the incentive
11fund by law. The bill appropriates $9,960,590 from the general
12fund of the state to the incentive fund for the fiscal year
13beginning July 1, 2021. The bill appropriates $5,107,340
14from the general fund of the state to the incentive fund for
15the fiscal year beginning July 1, 2022. For each fiscal year
16beginning on or after July 1, 2025, the bill appropriates an
17amount equal to the incentive fund growth factor multiplied by
18the ending balance of the incentive fund at the conclusion of
19a specified fiscal year. The “incentive fund growth factor”
20for each fiscal year is the percent increase, if any, in the
21amount of sales tax revenue deposited into the general fund of
22the state between the fiscal year beginning three years prior
23to the applicable fiscal year and the fiscal year beginning two
24years prior to the applicable year, minus 1.5 percent. The
25incentive fund growth factor for any fiscal year may not exceed
263.5 percent.
27A regional administrator must apply to the department of
28human services for funding from the incentive fund. The
29purpose of the funding shall be to provide appropriate
30financial incentives for outcomes met from services provided
31by the regional administrator’s mental health and disability
32services region. The department may accept or reject an
33application for assistance in whole or in part. The decision
34of the department is final.
35The bill specifies that incentive funding shall only be made
-96-1available to address one or more specified circumstances and
2subject to certain eligibility criteria.
3The department shall make its final decisions on or
4before December 15 regarding acceptance or rejection of
5the applications for incentive funding and the total amount
6accepted shall be considered obligated.
7Current Code section 331.424A authorizes each county to
8certify a property tax levy for payment of mental health and
9disability services within the mental health and disability
10services regional system. To coincide with the appropriation
11and payment of mental health and disability services regional
12service payments directly to the regions or to exempted
13counties, the bill ends the authority for such a property tax
14levy starting with the fiscal year beginning July 1, 2022.
15Additionally, upon conclusion of the fiscal year beginning July
161, 2021, the county treasurer shall transfer the remaining
17balance of the county’s county services fund to the county’s
18region to which the county belongs in the fiscal year beginning
19July 1, 2022, for deposit in the region’s combined account
20under Code section 331.391. The bill also modifies provisions
21relating to the transferring of funds of the county to the
22combined account of a mental health and disability services
23region.
24For each county for which the amount of taxes certified
25for levy for the purposes of Code section 331.424A for the
26fiscal year beginning July 1, 2021, exceeds the product
27of the population of the county multiplied by $21.14, the
28department of management shall reduce the amount of such taxes
29certified for levy to an amount not to exceed the product of
30the population of the county multiplied by $21.14 and shall
31revise the rate of taxation as necessary to raise the reduced
32amount. The department of management is required to report
33the reduction in the certified taxes and the revised rate of
34taxation to the county auditors by June 15, 2021.
35In order to timely implement the provisions of the bill
-97-1establishing the incentive fund for mental health and
2disability services regions for the fiscal year beginning
3July 1, 2021, and the fiscal year beginning July 1, 2022, the
4director of human services is required to establish alternative
5application deadlines and expedited application review and
6approval timelines.
7The bill provides that the department of human services
8may adopt emergency rules to implement the provisions of this
9division of the bill.
10This division of the bill takes effect upon enactment.
11DIVISION XXII — PROPERTY TAX REPLACEMENT PAYMENTS. Current
12Code section 441.21A establishes and appropriates amounts from
13the general fund of the state for commercial and industrial
14property tax replacement claims. Such claims are calculated
15by the department of revenue based on the difference between
16the actual value and assessed value of all commercial and
17industrial property in each taxing district in the state.
18Current law appropriates an amount necessary for the payment
19of all commercial and industrial property tax replacement
20claims for each fiscal year beginning on or after July 1,
212014, subject to a maximum total appropriation for fiscal
22years beginning on or after July 1, 2017, of the total
23amount necessary for the payment of replacement claims in the
24fiscal year beginning July 1, 2016. The bill eliminates the
25appropriation for fiscal years beginning on or after July 1,
262029, and specifies that the maximum total appropriation for
27the fiscal years beginning on or after July 1, 2022, but before
28July 1, 2029, shall not exceed the total amount necessary for
29the payment of replacement claims in the fiscal year.
30The bill modifies the methodology for calculating and
31apportioning commercial and industrial property tax replacement
32claims for fiscal years beginning on or after July 1, 2022,
33but before July 1, 2029. The bill requires such claims to be
34calculated based on taxing authorities, as defined in the bill,
35instead of taxing districts as is required under current law.
-98-1The amount of each taxing authority’s replacement claim is
2determined based on specified fractions of the amount received
3by the taxing authority under Code section 441.21A for the
4fiscal year beginning July 1, 2021, and whether the taxing
5authority is a qualified taxing authority. The specified
6fractions are reduced over the period of fiscal years beginning
7July 1, 2022, and ending June 30, 2029, in the case of a
8qualified taxing authority, and ending June 30, 2026, in the
9case of a taxing authority that is not a qualified taxing
10authority. Under the bill, a taxing authority that is eligible
11to continue to receive commercial and industrial property
12tax replacement payments includes a city, county, community
13college, or other governmental entity or political subdivision
14in this state authorized to certify a levy on property located
15within such authority, but does not include a school district.
16A qualified taxing authority is either a taxing authority that
17is not a city or a county or a taxing authority that is a city
18or a county in which the total assessed value as of January
191, 2019, of specified taxable property located in the taxing
20authority is less than 131.24 percent of the total assessed
21value as of January 1, 2012, of specified taxable property
22located in the taxing authority.
23The bill requires each taxing authority’s property tax
24replacement claim payment for fiscal years beginning on or
25after July 1, 2022, but before July 1, 2029, to be apportioned
26and credited by the governing body of the taxing authority
27among the taxing authority’s tax levies in the same proportion
28that each property tax levy bears to the total of all property
29tax levies imposed by the taxing authority for the fiscal year
30for which the payment is received. The bill also establishes
31requirements for the apportionment of amounts allocated to
32property tax levies that are subject to a division of taxes
33under Code section 403.19 (tax increment financing).
34Under current law, the legislative tax expenditure committee
35established under Code section 2.48 is required to review
-99-1the commercial and industrial property tax replacement claim
2expenditures. The bill eliminates that required periodic
3review.
4DIVISION XXIII — SCHOOL FOUNDATION PERCENTAGE. For
5purposes of calculating state foundation aid received by
6school districts under Code chapter 257, the regular program
7foundation base per pupil is 87.5 percent of the regular
8program state cost per pupil. The bill increases that
9percentage to 88.4 percent for school budget years beginning on
10or after July 1, 2022.
11The division takes effect July 1, 2022.
12DIVISION XXIV — PUBLIC EDUCATION AND RECREATIONAL TAX LEVY.
13 Code chapter 300 authorizes the imposition of a voter-approved
14property tax levy for the establishment and maintenance
15of public recreation places and playgrounds, and necessary
16accommodations for the recreation places and playgrounds, in
17the public school buildings and grounds of the district. Code
18chapter 300 also authorizes each school board to cooperate
19with public or private agencies having custody and management
20of public parks or buildings or grounds open to the public
21for the supervision and instruction necessary to carry on
22public educational and recreational activities in the parks,
23buildings, and grounds located within the district. Such
24activities may be supported by imposition of a voter-approved
25property tax levy not to exceed $0.13 and one-half cents per
26$1,000 of assessed value. The property tax levy under Code
27chapter 300 also provides financial support to community
28education programs established under Code chapter 276,
29which provide educational, recreational, cultural, and other
30community services and programs.
31The bill repeals Code chapter 300 and makes corresponding
32amendments to other provisions of law effective July 1, 2024,
33and applies to fiscal years beginning on or after July 1,
342024. The bill provides that financial support for a community
35education program under Code chapter 276 may be provided from
-100-1funds received by the school district under Code chapter 423F.
2 By operation of the definition of “school infrastructure” under
3Code section 423F.3(6)(a)(1), moneys received by a school
4district from the secure an advanced vision for education fund
5may continue to be utilized for activities previously provided
6for under Code chapter 300 and Code chapter 276.
7The bill prohibits a levy under Code chapter 300 from being
8approved at election on or after the effective date of this
9division of the bill and limits the rate at which previously
10approved levies can be imposed for the fiscal year beginning
11July 1, 2023.
12The bill also provides that moneys available in the public
13education and recreation levy fund at the conclusion of the
14fiscal year beginning July 1, 2023, and ending June 30, 2024,
15shall be expended by the school corporation for the purposes
16authorized under chapter 300, Code 2021.
17DIVISION XXV — ELDERLY PROPERTY TAX CREDIT. This division
18of the bill modifies the eligibility for and the calculation of
19the amount of the property tax credit for persons ages 70 and
20older under Code chapter 425, subchapter II.
21Under the bill, a person filing a claim for the property tax
22credit who is at least 70 years of age and who has a household
23income of less than 250 percent of the federal poverty level
24is eligible to receive a credit against property taxes due on
25the claimant’s homestead. For such a claimant, the tentative
26credit amount is equal to the greater of the following: (1)
27the amount of the credit as calculated under the schedule
28of credit amounts specified in Code section 425.23(1)(a) as
29if the claimant was an eligible claimant for a credit under
30that provision; and (2) the difference between the actual
31amount of property taxes due on the homestead during the
32applicable fiscal year minus the actual amount of property
33taxes due on the homestead based on a full assessment during
34the first fiscal year for which the claimant filed for a credit
35calculated under the bill and if the claimant has filed for the
-101-1credit for each of the subsequent fiscal years after the first
2credit claimed.
3The bill also modifies the appropriation to the elderly
4and disabled property tax credit and reimbursement fund under
5Code section 425.39, by limiting the amount of the credit to
6be paid by the director of revenue to each county treasurer
7for claimants who have reached 70 years of age and specifies
8that Code section 25B.7(1), which requires the state to fund
9the cost of providing new property tax credits, shall not apply
10to the amount of the credit in excess of the amount paid by the
11director of revenue as determined in the bill.
12The division applies to claims under Code chapter 425,
13subchapter II, filed on or after January 1, 2022.
14DIVISION XXVI — TRANSIT FUNDING. This division of the
15bill authorizes a regional transit district established under
16Code chapter 28M or a city that is not participating in a
17regional transit district to, following approval at election,
18impose a transit hotel and motel tax at a rate not to exceed 5
19percent. When imposed by a regional transit district, the tax
20shall apply only within the boundaries of the regional transit
21district and may be imposed in addition to any local hotel and
22motel tax imposed under Code chapter 423A. When imposed by a
23city, the tax shall apply only within the corporate boundaries
24of that city and may be imposed in addition to any local hotel
25and motel tax imposed under Code chapter 423A. Imposition,
26repeal, or a change in the rate of the transit hotel and
27motel tax requires approval at election. Collection and
28administration of the transit hotel and motel tax is similar to
29collection and administration of the local hotel and motel tax.
30Code chapter 28M authorizes a regional transit district to
31impose a property tax levy at a rate not to exceed 95 cents
32per $1,000 of assessed value of all taxable property in the
33regional transit district, subject to aggregate levy limits for
34cities that are participating in the regional transit district
35and imposing a municipal transit system property tax levy under
-102-1Code section 384.12(10). The bill establishes a methodology
2for determining a reduction in the regional transit district
3property tax levy if the regional transit district imposes a
4transit hotel and motel tax. The bill establishes a similar
5methodology for determining a reduction in the city transit
6system property tax levy under Code section 384.12(10) if the
7city is imposing a transit hotel and motel tax.
8The revenue derived by a regional transit district from
9the transit hotel and motel tax shall be expended exclusively
10for the purposes of the regional transit district and shall
11result in a reduction in the maximum levy rate for the regional
12transit district, as provided in the bill. However, the
13amount of revenue derived by the regional transit district
14in the second calendar year that transit hotel and motel
15tax is imposed that exceeds the amount of revenue derived
16by the regional transit district in the first calendar year
17that transit hotel and motel tax is imposed shall be used
18for property tax relief in addition to the reduction to the
19levy rate as the result of the revenue derived in the first
20calendar year that the transit hotel and motel tax is imposed.
21Similarly, the revenue derived by a city from the transit hotel
22and motel tax shall be expended exclusively for the operation
23and maintenance of a municipal transit system and shall result
24in a reduction in the maximum transit system levy rate for the
25city under Code section 384.12(10). However, the amount of
26revenue derived by the city in the second calendar year that
27transit hotel and motel tax is imposed that exceeds the amount
28of revenue derived by the city in the first calendar year
29that transit hotel and motel tax is imposed shall be used for
30property tax relief for the levy under Code section 384.12(10),
31in addition to the reduction to the levy rate as the result of
32the revenue derived in the first calendar year that the transit
33hotel and motel tax is imposed.
-103-jm/jh
2modifying future tax contingencies, the state inheritance
3tax, mental health and disability services funding, school
4district funding, commercial and industrial property tax
5replacement payments, providing for housing incentives,
6providing for other properly related matters, making
7appropriations, and including effective date, applicability,
8and retroactive applicability provisions.
9BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2FUTURE TAX Contingencies
3 Section 1. 2018 Iowa Acts, chapter 1161, section 133, is
4amended by striking the section and inserting in lieu thereof
5the following:
6SEC. 133. EFFECTIVE DATE. This division of this Act takes
7effect January 1, 2023.
8DIVISION II
9child dependent and development tax credits
10 Sec. 2. Section 422.12C, subsection 1, paragraphs f and g,
11Code 2021, are amended to read as follows:
12f. For a taxpayer with net income of forty thousand dollars
13or more but less than forty-five ninety thousand dollars,
14thirty percent.
15g. For a taxpayer with net income of forty-five ninety
16 thousand dollars or more, zero percent.
17 Sec. 3. Section 422.12C, subsection 2, paragraph a, Code
182021, is amended to read as follows:
19a. The taxes imposed under this subchapter, less the amounts
20of nonrefundable credits allowed under this subchapter, may
21be reduced by an early childhood development tax credit equal
22to twenty-five percent of the first one thousand dollars
23which the taxpayer has paid to others for each dependent, as
24defined in the Internal Revenue Code, ages three through five
25for early childhood development expenses. In determining the
26amount of early childhood development expenses for the tax year
27beginning in the 2006 calendar year only, such expenses paid
28during November and December of the previous tax year shall
29be considered paid in the tax year for which the tax credit
30is claimed. This credit is available to a taxpayer whose net
31income is less than forty-five ninety thousand dollars. If the
32early childhood development tax credit is claimed for a tax
33year, the taxpayer and the taxpayer’s spouse shall not claim
34the child and dependent care credit under subsection 1.
35 Sec. 4. RETROACTIVE APPLICABILITY. This division of this
-1-1Act applies retroactively to tax years beginning on or after
2January 1, 2021.
3DIVISION III
4COVID-19 RELATED GRANTS — TAXATION
5 Sec. 5. Section 422.7, subsection 62, Code 2021, is amended
6to read as follows:
762. a. Subtract, to the extent included, the amount of
8any financial assistance qualifying COVID-19 grant provided to
9an eligible small issued to an individual or business by the
10economic development authority under the Iowa small business
11relief grant program created during calendar year 2020 to
12provide financial assistance to eligible small businesses
13economically impacted by the COVID-19 pandemic, the Iowa
14finance authority, or the department of agriculture and land
15stewardship.
16b. For purposes of this subsection, “qualifying COVID-19
17grant” includes any grant that was issued between March 17,
182020, and December 31, 2021, identified by the department
19by rule under a grant program created to primarily provide
20COVID-19 related financial assistance to economically
21impacted individuals and businesses located in this state,
22and administered by the economic development authority, Iowa
23finance authority, or the department of agriculture and land
24stewardship.
25c. The economic development authority, Iowa finance
26authority, or the department of agriculture and land
27stewardship shall notify the department of any COVID-19 grant
28program that may qualify under this subsection in the manner
29and form prescribed by the department.
30d. This subsection is repealed January 1, 2024, and does not
31apply to tax years beginning on or after that date.
32 Sec. 6. Section 422.35, subsection 30, Code 2021, is amended
33to read as follows:
3430. a. Subtract, to the extent included, the amount of
35any financial assistance qualifying COVID-19 grant provided
-2-1to an eligible small issued to a business by the economic
2development authority under the Iowa small business relief
3grant program created during calendar year 2020 to provide
4financial assistance to eligible small businesses economically
5impacted by the COVID-19 pandemic, the Iowa finance authority,
6or the department of agriculture and land stewardship.
7b. For purposes of this subsection, “qualifying COVID-19
8grant” means the same as defined in section 422.7, subsection
962, paragraph “b”.
10c. The economic development authority, Iowa finance
11authority, or the department of agriculture and land
12stewardship shall notify the department of any COVID-19 grant
13program that may qualify under this subsection in the manner
14and form prescribed by the department.
15d. This subsection is repealed January 1, 2024, and does not
16apply to tax years beginning on or after that date.
17 Sec. 7. EFFECTIVE DATE. This division of this Act, being
18deemed of immediate importance, takes effect upon enactment.
19 Sec. 8. RETROACTIVE APPLICABILITY. This division of this
20Act applies retroactively to March 17, 2020, for tax years
21ending on or after that date.
22DIVISION IV
23federal paycheck protection program
24 Sec. 9. FEDERAL PAYCHECK PROTECTION PROGRAM.
25Notwithstanding any other provision of the law to the contrary,
26for any tax year ending after March 27, 2020, Division N, Tit.
27II, subtit.B, §276 and §278(a), of the federal Consolidated
28Appropriations Act, 2021, Pub.L. No.116-260, applies in
29computing net income for state tax purposes under section 422.7
30or 422.35.
31 Sec. 10. EFFECTIVE DATE. This division of this Act, being
32deemed of immediate importance, takes effect upon enactment.
33DIVISION V
34INSTALLMENT SALES — CAPITAL GAINS
35 Sec. 11. 2018 Iowa Acts, chapter 1161, section 134, is
-3-1amended to read as follows:
2SEC. 134. APPLICABILITY.
31. This division of this Act applies to tax years beginning
4on or after the effective date of this division of this Act.
52. The section of this division of this Act amending section
6422.7, subsection 21, as amended by 2019 Iowa Acts, chapter
7162, applies to sales consummated on or after the effective
8date of this division of this Act, and sales consummated prior
9to the effective date of this division of this Act shall be
10governed by law as it existed prior to the effective date of
11this division of this Act.
12DIVISION VI
13STATE INHERITANCE TAX
14part I
15EXEMPTIONS AND RATES
16 Sec. 12. Section 450.4, subsection 1, Code 2021, is amended
17to read as follows:
181. When the entire estate of the decedent does not exceed
19the sum of twenty-five thousand dollars following amounts after
20deducting the liabilities, as defined in this chapter:
21a. For decedents dying on or after January 1, 2021, but
22before January 1, 2022, three hundred thousand dollars.
23b. For decedents dying on or after January 1, 2022, but
24before January 1, 2023, six hundred thousand dollars.
25c. For decedents dying on or after January 1, 2023, but
26before January 1, 2024, one million dollars.
27 Sec. 13. Section 450.10, Code 2021, is amended by adding the
28following new subsection:
29 NEW SUBSECTION. 7. a. In lieu of each rate of tax imposed
30in subsections 1 through 4, for property passing from the
31estate of a decedent dying on or after January 1, 2021, but
32before January 1, 2022, there shall be imposed a rate of tax
33equal to the applicable tax rate in subsections 1 through 4,
34reduced by twenty-five percent, and rounded to the nearest
35one-hundredth of one percent.
-4- 1b. In lieu of each rate of tax imposed in subsections 1
2through 4, for property passing from the estate of a decedent
3dying on or after January 1, 2022, but before January 1, 2023,
4there shall be imposed a rate of tax equal to the applicable
5tax rate in subsections 1 through 4, reduced by fifty percent,
6and rounded to the nearest one-hundredth of one percent.
7c. In lieu of each rate of tax imposed in subsections 1
8through 4, for property passing from the estate of a decedent
9dying on or after January 1, 2023, but before January 1, 2024,
10there shall be imposed a rate of tax equal to the applicable
11tax rate in subsections 1 through 4, reduced by seventy-five
12percent, and rounded to the nearest one-hundredth of one
13percent.
14part Ii
15REPEAL OF STATE INHERITANCE TAX
16 Sec. 14. NEW SECTION. 450.98 Tax repealed.
17This chapter shall not apply, effective January 1, 2024,
18to property of estates of decedents dying on or after January
191, 2024. The inheritance tax shall not be imposed under this
20chapter if a decedent dies on or after January 1, 2024, and to
21this extent this chapter is repealed.
22 Sec. 15. NEW SECTION. 450.99 Future repeal.
23This chapter is repealed effective January 1, 2034.
24 Sec. 16. NEW SECTION. 450B.8 Tax repealed.
25This chapter shall not apply, effective January 1, 2024,
26to property of estates of decedents dying on or after January
271, 2024. The inheritance tax shall not be imposed under this
28chapter if a decedent dies on or after January 1, 2024, and to
29this extent this chapter is repealed.
30 Sec. 17. NEW SECTION. 450B.9 Future repeal.
31This chapter is repealed effective January 1, 2034.
32 Sec. 18. EFFECTIVE DATE. This division of this Act, being
33deemed of immediate importance, takes effect upon enactment.
34 Sec. 19. RETROACTIVE APPLICABILITY. This division of this
35Act applies retroactively to January 1, 2021, for tax years
-5-1beginning on or after that date, and for decedents dying on or
2after that date.
3 Sec. 20. CODE EDITOR DIRECTIVE. The Code editor is directed
4to correct internal references and other appropriate references
5in the Code, and in any enacted Iowa Acts as necessary, to
6chapters 450 and 450B, and to the inheritance tax and qualified
7use inheritance tax, effective January 1, 2034.
8DIVISION VII
9housing trust fund
10 Sec. 21. Section 428A.8, subsection 3, Code 2021, is amended
11to read as follows:
123. Notwithstanding subsection 2, the amount of money that
13shall be transferred pursuant to this section to the housing
14trust fund in any one fiscal year shall not exceed three seven
15 million dollars. Any money that otherwise would be transferred
16pursuant to this section to the housing trust fund in excess
17of that amount shall be deposited in the general fund of the
18state.
19DIVISION VIII
20HIGH QUALITY JOBS PROGRAM — DAY CARE CENTERS
21 Sec. 22. Section 15.327, Code 2021, is amended by adding the
22following new subsection:
23 NEW SUBSECTION. 016. “Licensed center” means the same as
24defined in section 237A.1.
25 Sec. 23. Section 15.329, Code 2021, is amended by adding the
26following new subsection:
27 NEW SUBSECTION. 3A. In addition to the factors in
28subsection 3, in determining the eligibility of a business to
29participate in the program the authority may consider whether a
30proposed project will provide a licensed center for use by the
31business’s employees.
32DIVISION IX
33INVESTMENT TAX CREDITS AND INNOVATION FUND TAX CREDITS
34 Sec. 24. Section 15.119, subsection 2, paragraph d, Code
352021, is amended to read as follows:
-6- 1d. (1) The tax credits for investments in qualifying
2businesses issued pursuant to section 15E.43 and for equity
3investments in an innovation fund pursuant to section 15E.52.
4In allocating tax credits pursuant to this subsection, the
5authority shall allocate two an aggregate of ten million
6dollars for purposes of this paragraph subparagraph, unless the
7authority determines that the tax credits awarded will be less
8than that amount.
9(2) On or before June 30 of each fiscal year the authority
10shall determine the amount of tax credits to be allocated
11for the next fiscal year beginning July 1 to investments
12in qualifying businesses and to equity investments in an
13innovation fund under subparagraph (1). Any tax credits
14allocated for purposes of subparagraph (1) and not awarded
15in that fiscal year shall be reallocated to a purpose under
16subparagraph (1) for the next fiscal year and shall not be
17counted against the aggregate maximum of ten million dollars.
18 Sec. 25. Section 15.119, subsection 2, paragraph e, Code
192021, is amended by striking the paragraph.
20 Sec. 26. Section 15E.43, subsection 2, paragraphs b and c,
21Code 2021, are amended to read as follows:
22b. The maximum amount of a tax credit that may be issued
23per calendar fiscal year to a natural person and the person’s
24spouse or dependent shall not exceed one hundred thousand
25dollars combined. For purposes of this paragraph, a tax
26credit issued to a partnership, limited liability company, S
27corporation, estate, or trust electing to have income taxed
28directly to the individual shall be deemed to be issued to
29the individual owners based upon the pro rata share of the
30individual’s earnings from the entity. For purposes of this
31paragraph, “dependent” has the same meaning as provided by the
32Internal Revenue Code.
33c. The maximum amount of tax credits that may be issued
34per calendar fiscal year for equity investments in any one
35qualifying business shall not exceed five hundred thousand
-7-1dollars.
2 Sec. 27. EFFECTIVE DATE. This division of this Act, being
3deemed of immediate importance, takes effect upon enactment.
4 Sec. 28. APPLICABILITY. The following applies to tax
5credits allocated on or after the fiscal year beginning July 1,
62021, and for each fiscal year thereafter:
7The section of this division of this Act amending section
815.119, subsection 2, paragraph “d”.
9DIVISION X
10TELEHEALTH — MENTAL HEALTH PARITY
11 Sec. 29. Section 514C.34, subsection 1, Code 2021, is
12amended by adding the following new paragraphs:
13 NEW PARAGRAPH. 0a. “Covered person” means the same as
14defined in section 514J.102.
15 NEW PARAGRAPH. 00a. “Facility” means the same as defined in
16section 514J.102.
17 NEW PARAGRAPH. 0c. “Health carrier” means the same as
18defined in section 514J.102.
19 Sec. 30. Section 514C.34, subsection 1, paragraph c, Code
202021, is amended to read as follows:
21c. “Telehealth” means the delivery of health care services
22through the use of real-time interactive audio and video, or
23other real-time interactive electronic media, regardless of
24where the health care professional and the covered person are
25each located. “Telehealth” does not include the delivery of
26health care services delivered solely through an audio-only
27telephone, electronic mail message, or facsimile transmission.
28 Sec. 31. Section 514C.34, Code 2021, is amended by adding
29the following new subsection:
30 NEW SUBSECTION. 3A. a. A health carrier shall reimburse
31a health care professional and a facility for health care
32services provided by telehealth to a covered person for a
33mental health condition, illness, injury, or disease on the
34same basis and at the same rate as the health carrier would
35apply to the same health care services for a mental health
-8-1condition, illness, injury, or disease provided in person to a
2covered person by the health care professional or the facility.
3b. As a condition of reimbursement pursuant to paragraph
4“a”, a health carrier shall not require that an additional
5health care professional be located in the same room as a
6covered person while health care services for a mental health
7condition, illness, injury, or disease are provided via
8telehealth by another health care professional to the covered
9person.
10 Sec. 32. EFFECTIVE DATE. This division of this Act, being
11deemed of immediate importance, takes effect upon enactment.
12 Sec. 33. RETROACTIVE APPLICABILITY. This division of
13this Act applies to health care services for a mental health
14condition, illness, injury, or disease provided by a health
15care professional or a facility to a covered person by
16telehealth on or after January 1, 2021.
17DIVISION XI
18HIGH QUALITY JOBS and renewable chemical production tax credits
19 Sec. 34. Section 15.119, subsection 2, paragraph a,
20subparagraphs (2) and (3), Code 2021, are amended to read as
21follows:
22(2) In allocating tax credits pursuant to this subsection
23for each fiscal year of the fiscal period beginning July 1,
242016, and ending June 30, 2021 the fiscal year beginning July
251, 2021, and for each fiscal year thereafter, the authority
26shall not allocate more than one hundred five seventy million
27dollars for purposes of this paragraph. This subparagraph (2)
28is repealed July 1, 2021.
29(3) (a) In allocating tax credits pursuant to this
30subsection for the fiscal year beginning July 1, 2021, and
31ending June 30, 2022, the authority shall not allocate more
32than one hundred five million dollars for purposes of this
33paragraph if the aggregate amount of renewable chemical
34production tax credits under section 15.319 that were awarded
35on or after July 1, 2018, but before July 1, 2021, equals or
-9-1exceeds twenty-seven million dollars.
2(b) As soon as practicable after June 30, 2021, the
3authority shall notify the general assembly of the aggregate
4amount of renewable chemical production tax credits awarded
5under section 15.319 on or after July 1, 2018, but before
6July 1, 2021, and whether or not the tax credit allocation
7limitation described in subparagraph division (a) is
8applicable.
9(c) This subparagraph (3) is repealed July 1, 2022.
10 Sec. 35. Section 15.119, subsection 2, paragraph h, Code
112021, is amended to read as follows:
12h. The renewable chemical production tax credit program
13administered pursuant to sections 15.315 through 15.322. In
14allocating tax credits pursuant to this subsection for the
15fiscal year beginning July 1, 2021, and for each fiscal year
16thereafter, the authority shall not allocate more than ten five
17 million dollars for purposes of this paragraph. This paragraph
18is repealed July 1, 2030.
19 Sec. 36. EFFECTIVE DATE. This division of this Act, being
20deemed of immediate importance, takes effect upon enactment.
21DIVISION XII
22HIGH QUALITY JOBS — ELIGIBILITY REQUIREMENTS
23 Sec. 37. HIGH QUALITY JOBS — REDUCTIONS IN OPERATIONS.
241. Notwithstanding section 15.329, subsection 1, paragraph
25“b”, subparagraph (2), the economic development authority shall
26not presume that a reduction in operations is a reduction in
27operations while simultaneously applying for assistance with
28regard to a business that submits an application on or before
29June 30, 2022, if the business demonstrates to the satisfaction
30of the authority all of the following:
31a. That the reduction in operations occurred after March 1,
322020.
33b. That the reduction in operations was caused by the
34COVID-19 pandemic.
352. The economic development authority shall consider
-10-1whether the benefit of the project proposed by a business
2under subsection 1 outweighs any negative impact related to
3the business’s reduction in operations. The business shall
4remain subject to all other eligibility requirements pursuant
5to section 15.329.
63. This section is repealed July 1, 2022.
7DIVISION XIII
8Manufacturing 4.0
9 Sec. 38. NEW SECTION. 15.371 Manufacturing 4.0 technology
10investment program.
111. This section shall be known as and may be cited as the
12“Manufacturing 4.0 Technology Investment Program”.
132. For purposes of this section unless the context otherwise
14requires:
15a. “Financial assistance” means the same as defined in
16section 15.102.
17b. “Manufacturing 4.0 technology investments” means projects
18that are intended to lead to the adoption of, and integration
19of, smart technologies into existing manufacturing operations
20located in the state by mitigating the risk to the manufacturer
21of significant technology investments. Projects may include
22investments in specialized hardware, software, or other
23equipment intended to assist a manufacturer in increasing the
24manufacturer’s productivity, efficiency, and competitiveness.
253. a. A manufacturing 4.0 technology investment fund
26is created within the state treasury under the control of
27the authority for the purpose of financing manufacturing 4.0
28technology investments as described in this section.
29b. The fund may be administered as a revolving fund and
30may consist of any moneys appropriated by the general assembly
31for purposes of this section and any other moneys that are
32lawfully available to the authority. Any moneys appropriated
33to the fund shall be used for purposes of the manufacturing
344.0 technology investment program. The authority may use all
35other moneys in the fund, including interest, earnings, and
-11-1recaptures, for purposes of this section.
2c. Notwithstanding section 8.33, moneys appropriated in this
3section that remain unencumbered or unobligated at the close of
4the fiscal year shall not revert but shall remain available for
5expenditure for the purposes designated until the close of the
6succeeding fiscal year.
7d. Notwithstanding any law to the contrary, the authority
8may transfer any unobligated and unencumbered moneys in the
9fund, except for moneys appropriated for purposes of this
10section, to any fund created pursuant to section 15.106A,
11subsection 1, paragraph “o”.
124. The authority shall establish and administer a
13manufacturing 4.0 technology investment program and shall use
14moneys in the fund to award financial assistance to eligible
15manufacturers for manufacturing 4.0 technology investments.
165. To be eligible for a financial assistance award under the
17manufacturing 4.0 technology investment program, a manufacturer
18must do all of the following:
19a. Manufacture goods at a facility located in this state.
20b. Have a North American industry classification system
21number within the manufacturing sector range of 31-33.
22c. Have been an established business for a minimum of three
23years prior to the date of application to the program.
24d. Derive a minimum of fifty-one percent of the
25manufacturer’s gross revenue from the sale of manufactured
26goods.
27e. Employ a minimum of three full-time employees and no
28more than seventy-five full-time employees across all of the
29manufacturer’s locations.
30f. Have an assessment of the manufacturer’s proposed
31manufacturing 4.0 technology investment completed by the center
32for industrial research and service at Iowa state university of
33science and technology.
34g. Demonstrate the ability to provide matching financial
35support for the manufacturer’s manufacturing 4.0 technology
-12-1investment on a one-to-one basis. The matching financial
2support must be obtained from private sources.
36. Eligible manufacturers shall submit applications to the
4manufacturing 4.0 technology investment program in the manner
5prescribed by the authority by rule.
67. a. The authority may accept applications during one
7or more application periods each fiscal year as determined by
8the authority. All completed applications shall be reviewed
9and scored on a competitive basis pursuant to rules adopted by
10the authority. The authority may engage an outside technical
11review panel to complete technical reviews of applications.
12The board shall review the recommendations of the authority
13and of the technical review panel, if applicable, and shall
14approve, defer, or deny each application.
15b. In making recommendations to the board, the authority and
16the technical review panel, if applicable, shall consider all
17of the following:
18(1) The completeness of the manufacturer’s application.
19(2) Whether the board should approve or deny an application.
20(3) If the board approves an application, the type and
21amount of financial assistance that should to be awarded to the
22applicant.
23(4) The percentage of the manufacturer’s gross revenue
24that is derived from the sale of manufactured goods pursuant
25to subsection 5, paragraph “d”.
26(5) Whether the manufacturer’s proposed manufacturing
274.0 technology investment is consistent with the assessment
28completed by the center for industrial research and service at
29Iowa state university of science and technology pursuant to
30subsection 5, paragraph “f”.
31c. The board shall not approve an application for financial
32assistance for a manufacturing 4.0 technology investment that
33was made prior to the date of the application.
348. From moneys appropriated to the manufacturing 4.0
35technology investment fund from the general fund of the state
-13-1and any other state moneys lawfully available to the authority
2for the manufacturing 4.0 technology investment program, the
3maximum amount of financial assistance awarded from such moneys
4to an eligible manufacturer shall not exceed seventy-five
5thousand dollars.
69. The authority shall adopt rules pursuant to chapter 17A
7necessary to implement and administer this section.
8DIVISION XIV
9ENERGY INFRASTRUCTURE REVOLVING LOAN PROGRAM
10 Sec. 39. Section 476.10A, subsection 2, Code 2021, is
11amended to read as follows:
122. Notwithstanding section 8.33, any unexpended moneys
13remitted to the treasurer of state under this section shall be
14retained for the purposes designated. Notwithstanding section
1512C.7, subsection 2, interest or earnings on investments or
16time deposits of the moneys remitted under this section shall
17be retained and used for the purposes designated, pursuant to
18section 476.46.
19 Sec. 40. Section 476.46, subsection 2, paragraph e,
20subparagraph (3), Code 2021, is amended to read as follows:
21(3) Interest on the fund shall be deposited in the fund.
22A portion of the interest on the fund, not to exceed fifty
23percent of the total interest accrued, shall be used for
24promotion and administration of the fund.
25 Sec. 41. Section 476.46, Code 2021, is amended by adding the
26following new subsections:
27 NEW SUBSECTION. 3. The Iowa energy center shall not
28initiate any new loans under this section after June 30, 2021.
29 NEW SUBSECTION. 4. Loan payments received under this
30section on or after July 1, 2021, and any other moneys in the
31fund on or after July 1, 2021, shall be deposited in the energy
32infrastructure revolving loan fund created in section 476.46A.
33 Sec. 42. NEW SECTION. 476.46A Energy infrastructure
34revolving loan program.
351. a. An energy infrastructure revolving loan fund is
-14-1created in the office of the treasurer of state and shall be
2administered by the Iowa energy center established in section
315.120.
4b. The fund may be administered as a revolving fund and may
5consist of any moneys appropriated by the general assembly for
6purposes of this section and any other moneys that are lawfully
7directed to the fund.
8c. Moneys in the fund shall be used to provide financial
9assistance for the development and construction of energy
10infrastructure, including projects that support electric or gas
11generation transmission, storage, or distribution; electric
12grid modernization; energy-sector workforce development;
13emergency preparedness for rural and underserved areas; the
14expansion of biomass, biogas, and renewable natural gas;
15innovative technologies; and the development of infrastructure
16for alternative fuel vehicles.
17d. Notwithstanding section 8.33, moneys appropriated in this
18section that remain unencumbered or unobligated at the close of
19the fiscal year shall not revert but shall remain available for
20expenditure for the purposes designated until the close of the
21succeeding fiscal year.
22e. Notwithstanding section 12C.7, subsection 2, interest or
23earnings on moneys in the fund shall be credited to the fund.
242. a. The Iowa energy center shall establish and administer
25an energy infrastructure revolving loan program to encourage
26the development of energy infrastructure within the state.
27b. An individual, business, rural electric cooperative, or
28municipal utility located and operating in this state shall be
29eligible for financial assistance under the program. With the
30approval of the Iowa energy center governing board established
31under section 15.120, subsection 2, the economic development
32authority shall determine the amount and the terms of all
33financial assistance awarded to an individual, business, rural
34electric cooperative, or municipal utility under the program.
35All agreements and administrative authority sha11 be vested in
-15-1the Iowa energy center governing board.
2c. The economic development authority may use not more than
3five percent of the moneys in the fund at the beginning of each
4fiscal year for purposes of administrative costs, marketing,
5technical assistance, and other program support.
63. For the purposes of this section:
7a. “Energy infrastructure” means land, buildings, physical
8plant and equipment, and services directly related to the
9development of projects used for, or useful for, electricity or
10gas generation, transmission, storage, or distribution.
11b. “Financial assistance” means the same as defined in
12section 15.102.
13 Sec. 43. ALTERNATE ENERGY REVOLVING LOAN FUND — MONEYS
14TRANSFERRED AND APPROPRIATED. Any unencumbered or unobligated
15moneys remaining after June 30, 2021, in the alternate energy
16revolving loan fund created pursuant to section 476.46, are
17transferred and appropriated to the energy infrastructure
18revolving loan fund created pursuant to section 476.46A, to be
19used for purposes of the energy infrastructure revolving loan
20program.
21DIVISION XV
22WORKFORCE HOUSING TAX INCENTIVES
23 Sec. 44. Section 15.119, subsection 2, paragraph g, Code
242021, is amended to read as follows:
25g. (1) The workforce housing tax incentives program
26administered pursuant to sections 15.351 through 15.356.
27In allocating tax credits pursuant to this subsection, the
28authority shall not allocate more than twenty-five thirty
29 million dollars for purposes of this paragraph. Of the moneys
30allocated under this paragraph, ten fifteen million dollars
31shall be reserved for allocation to qualified housing projects
32in small cities, as defined in section 15.352, that are
33registered on or after July 1, 2017.
34(2) (a) Notwithstanding subparagraph (1), in allocating
35tax credits pursuant to this subsection for the fiscal year
-16-1beginning July 1, 2021, and ending June 30, 2022, the authority
2shall not allocate more than forty million dollars for the
3purposes of this paragraph. Of the moneys allocated under
4this paragraph for the fiscal year beginning July 1, 2021, and
5ending June 30, 2022, twelve million dollars shall be reserved
6for allocation to qualified housing projects in small cities,
7as defined in section 15.352, that are registered on or after
8July 1, 2017.
9(b) Notwithstanding subparagraph (1), in allocating
10tax credits pursuant to this subsection for the fiscal year
11beginning July 1, 2022, and ending June 30, 2023, the authority
12shall not allocate more than thirty-five million dollars for
13the purposes of this paragraph. Of the moneys allocated under
14this paragraph for the fiscal year beginning July 1, 2022,
15and ending June 30, 2023, fifteen million dollars shall be
16reserved for allocation to qualified housing projects in small
17cities, as defined in section 15.352, that are registered on or
18after July 1, 2017, and five million dollars shall be reserved
19for qualified housing projects in areas of the state with
20the largest wait list or greatest need as determined by the
21authority.
22(c) This subparagraph is repealed July 1, 2023.
23 Sec. 45. Section 15.354, subsection 3, paragraph d, Code
242021, is amended to read as follows:
25d. Upon completion of a housing project, an a housing
26business shall submit all of the following to the authority:
27(1) Anexamination of the project in accordance with the
28American institute of certified public accountants’ statements
29on standards for attestation engagements, completed by a
30certified public accountant authorized to practice in this
31state, shall be submitted to the authority.
32(2) A statement of the final amount of qualifying new
33investment for the housing project.
34(3) Any information the authority deems necessary to ensure
35compliance with the agreement signed by the housing business
-17-1pursuant to paragraph “a”, the requirements of this part,
2and rules the authority and the department of revenue adopt
3pursuant to section 15.356.
4 Sec. 46. Section 15.354, subsection 3, paragraph e,
5subparagraph (1), Code 2021, is amended to read as follows:
6(1) Upon review of the examination, and verification of
7the amount of the qualifying new investment, and review of
8any other information submitted pursuant to paragraph “d”,
9subparagraph (3), the authority may notify the housing business
10of the amount that the housing business may claim as a refund
11of the sales and use tax under section 15.355, subsection 2,
12and may issue a tax credit certificate to the housing business
13stating the amount of workforce housing investment tax credits
14under section 15.355, subsection 3, the eligible housing
15business may claim. The sum of the amount that the housing
16business may claim as a refund of the sales and use tax and
17the amount of the tax credit certificate shall not exceed the
18amount of the tax incentive award.
19 Sec. 47. Section 15.354, subsection 6, paragraphs b and c,
20Code 2021, are amended to read as follows:
21b. Notwithstanding subsection 1, the authority may accept
22applications for disaster recovery housing projects on a
23continuous basis establish a disaster recovery application
24period following the declaration of a major disaster by the
25president of the United States for a county in Iowa.
26c. Notwithstanding subsection 2, paragraphs “a”, “b”, and
27“d”, upon Upon review of a housing business’s application,
28and scoring of all applications received during a disaster
29recovery application period, the authority may make a tax
30incentive award to a disaster recovery housing project. The
31tax incentive award shall represent the maximum amount of tax
32incentives that the disaster recovery housing project may
33qualify for under the program. In determining a tax incentive
34award, the authority shall not use an amount of project costs
35that exceeds the amount included in the application of the
-18-1housing business. Tax incentive awards shall be approved by
2the director of the authority.
3 Sec. 48. Section 15.355, subsection 2, Code 2021, is amended
4to read as follows:
52. A housing business may claim a refund of the sales and
6use taxes paid under chapter 423 that are directly related to
7a housing project and specified in the agreement. The refund
8available pursuant to this subsection shall be as provided in
9section 15.331A, excluding subsection 2, paragraph “c”, of
10that section. For purposes of the program, the term “project
11completion”, as used in section 15.331A, shall mean the date
12on which the authority notifies the department of revenue that
13all applicable requirements of an the agreement entered into
14pursuant to section 15.354, subsection 3, paragraph “a”, and
15all applicable requirements of this part, including the rules
16the authority and the department of revenue adopted pursuant to
17section 15.356, are satisfied.
18DIVISION XVI
19brownfields and grayfields
20 Sec. 49. Section 15.119, subsection 3, Code 2021, is amended
21to read as follows:
223. In allocating the amount of tax credits authorized
23pursuant to subsection 1 among the programs specified in
24subsection 2, the authority shall not allocate more than ten
25 fifteen million dollars for purposes of subsection 2, paragraph
26“f”.
27 Sec. 50. Section 15.293A, subsection 8, Code 2021, is
28amended to read as follows:
298. This section is repealed on June 30, 2021 2031.
30 Sec. 51. Section 15.293B, Code 2021, is amended by adding
31the following new subsection:
32 NEW SUBSECTION. 5A. a. Tax credits revoked under
33subsection 3 including tax credits revoked up to five years
34prior to the effective date of this division of this Act, and
35tax credits not awarded under subsection 4 or 5, may be awarded
-19-1in the next annual application period established in subsection
21, paragraph “c”.
3b. Tax credits awarded pursuant to paragraph “a” shall not
4be counted against the limit under section 15.119, subsection
53.
6 Sec. 52. Section 15.293B, subsection 7, Code 2021, is
7amended to read as follows:
87. This section is repealed on June 30, 2021 2031.
9 Sec. 53. EFFECTIVE DATE. The following, being deemed of
10immediate importance, take effect upon enactment:
111. The section of this division of this Act amending section
1215.293A, subsection 8.
132. The section of this division of this Act amending section
1415.293B, subsection 7.
15DIVISION XVII
16Downtown loan guarantee program
17 Sec. 54. NEW SECTION. 15.431 Downtown loan guarantee
18program.
191. The economic development authority, in partnership with
20the Iowa finance authority, shall establish and administer a
21downtown loan guarantee program to encourage Iowa downtown
22businesses and banks to reinvest and reopen following the
23COVID-19 pandemic.
242. In order for a loan to be guaranteed, all of the
25following conditions must be true:
26a. The loan finances an eligible downtown resource center
27community catalyst building remediation grant project or main
28street Iowa challenge grant within a designated district.
29b. The loan finances a rehabilitation project, or finances
30acquisition or refinancing costs associated with the project.
31c. At least twenty-five percent of the project costs are
32used for construction on the project or renovation.
33d. The project includes a housing component.
34e. The loan is used for construction of the project,
35permanent financing of the project, or both.
-20- 1f. A federally insured financial lending institution issued
2the loan.
3g. The loan does not reimburse the borrower for working
4capital, operations, or similar expenses.
5h. The project meets downtown resource center and main
6street Iowa design review.
73. a. For a loan amount less than or equal to five hundred
8thousand dollars, the economic development authority may
9guarantee up to fifty percent of the loan amount.
10b. For a loan amount greater than five hundred thousand
11dollars, the economic development authority may provide a
12maximum loan guarantee of up to two hundred fifty thousand
13dollars.
144. A project loan must be secured by a mortgage against the
15project property.
165. The economic development authority may guarantee loans
17for up to five years. The economic development authority
18may extend the loan guarantee for an additional five years
19if an underwriting review finds that an extension would be
20beneficial.
216. The lender shall pay an annual loan guarantee fee as set
22forth by rule.
237. The economic development authority reserves the right
24to deny a loan guarantee for unreasonable bank loan fees or
25interest rate.
268. The loan must not be insured or guaranteed by another
27local, state, or federal guarantee program.
289. The loan guarantee is not transferable if the loan or the
29project is sold or transferred.
3010. In the event of a loss due to default, the loan
31guarantee proportionally pays the guarantee percentage of the
32loss to the lender.
3311. Moneys for the program may consist of any moneys
34appropriated by the general assembly for purposes of this
35section, and any other moneys that are lawfully available
-21-1to the economic development authority, including moneys
2transferred or deposited from other funds created pursuant to
3section 15.106A, subsection 1, paragraph “o”.
4DIVISION XVIII
5Disaster recovery housing assistance
6 Sec. 55. NEW SECTION. 16.57A Transfer of unobligated or
7unencumbered funds — report.
81. Notwithstanding any other provision of law to the
9contrary, the authority may transfer any unobligated and
10unencumbered moneys in any revolving loan program fund created
11pursuant to section 16.46, 16.47, 16.48, or 16.49, for deposit
12in the disaster recovery housing assistance fund created in
13section 16.57B.
142. Notwithstanding section 8.39, and any other law to
15the contrary, with the prior written consent and approval of
16the governor, the executive director of the authority may
17transfer any unobligated and unencumbered moneys in any fund
18created pursuant to section 16.5, subsection 1, paragraph
19“s”, for deposit in the disaster recovery housing assistance
20fund created in section 16.57B. The prior written consent and
21approval of the director of the department of management shall
22not be required to transfer the unobligated and unencumbered
23moneys.
243. Notwithstanding section 8.39, and any other law to the
25contrary, with the prior written approval of the governor, the
26director of the economic development authority may transfer
27any unobligated and unencumbered moneys in any fund created
28pursuant to section 15.106A, subsection 1, paragraph “o”,
29for deposit in the disaster recovery housing assistance fund
30created in section 16.57B.
314. Any transfer made under this section shall be reported in
32the same manner as provided in section 8.39, subsection 5.
33 Sec. 56. NEW SECTION. 16.57B Disaster recovery housing
34assistance program — fund.
351. Definitions. As used in this section, unless the context
-22-1otherwise requires:
2a. “Disaster-affected home” means a primary residence that
3is destroyed or damaged due to a natural disaster that occurs
4on or after the effective date of this division of this Act,
5and the primary residence is located in a county that is the
6subject of a state of disaster emergency proclamation by the
7governor that authorizes disaster recovery housing assistance.
8b. “Fund” means the disaster recovery housing assistance
9fund.
10c. “Local program administrator” means any of the following:
11(1) The cities of Ames, Cedar Falls, Cedar Rapids, Council
12Bluffs, Davenport, Des Moines, Dubuque, Iowa City, Waterloo,
13and West Des Moines.
14(2) A council of governments whose territory includes at
15least one county that is the subject of a state of disaster
16emergency proclamation by the governor that authorizes disaster
17recovery housing assistance or the eviction prevention program
18under section 16.57C on or after the effective date of this
19division of this Act.
20(3) A community action agency as defined in section 216A.91
21and whose territory includes at least one county that is the
22subject of a state of disaster emergency proclamation by the
23governor that authorizes disaster recovery housing assistance
24or the eviction prevention program under section 16.57C on or
25after the effective date of this division of this Act.
26(4) A qualified local organization or governmental entity
27as determined by rules adopted by the authority.
28d. “Program” means the disaster recovery housing assistance
29program.
30e. “Replacement housing” means housing purchased
31by a homeowner or leased by a renter needed to replace
32a disaster-affected home that is destroyed or damaged
33beyond reasonable repair as determined by a local program
34administrator.
35f. “State of disaster emergency” means the same as described
-23-1in section 29C.6, subsection 1.
22. Fund.
3a. (1) A disaster recovery housing assistance fund is
4created within the authority. The moneys in the fund shall be
5used by the authority for the development and operation of a
6forgivable loan and grant program for homeowners and renters
7with disaster-affected homes, and for the eviction prevention
8program pursuant to section 16.57C.
9(2) Notwithstanding section 12C.7, subsection 2, interest
10or earnings on moneys deposited in the fund shall be credited
11to the fund. Notwithstanding section 8.33, moneys credited to
12the fund shall not revert at the close of a fiscal year.
13b. Moneys transferred by the authority for deposit in the
14fund, moneys appropriated to the fund, and any other moneys
15available to and obtained or accepted by the authority for
16placement in the fund shall be deposited in the fund.
17c. The authority shall not use more than five percent of
18the moneys in the fund on July 1 of a fiscal year for purposes
19of administrative costs and other program support during the
20fiscal year.
213. Program.
22a. The authority shall establish and administer a disaster
23recovery housing assistance program and shall use moneys in
24the fund to award forgivable loans to eligible homeowners and
25grants to eligible renters of disaster-affected homes. Moneys
26in the fund may be expended following a state of disaster
27emergency proclamation by the governor pursuant to section
2829C.6 that authorizes disaster recovery housing assistance.
29b. The authority may enter into an agreement with one or
30more local program administrators to administer the program.
314. Registration required. To be considered for a forgivable
32loan or grant under the program, a homeowner or renter must
33register for the disaster case management program established
34pursuant to section 29C.20B. The disaster case manager may
35refer the homeowner or renter to the appropriate local program
-24-1administrator.
25. Homeowners.
3a. To be eligible for a forgivable loan under the program,
4all of the following requirements shall apply:
5(1) The homeowner’s disaster-affected home must have
6sustained damage greater than the damage that is covered by the
7homeowner’s property and casualty insurance policy insuring the
8home plus any other state or federal disaster-related financial
9assistance that the homeowner is eligible to receive.
10(2) A local official must either deem the disaster-affected
11home suitable for rehabilitation or damaged beyond reasonable
12repair.
13(3) The disaster-affected home is not eligible for buyout by
14the county or city where the disaster-affected home is located,
15or the disaster-affected home is eligible for a buyout by the
16county or city where the disaster-affected home is located, but
17the homeowner is requesting a forgivable loan for the repair
18or rehabilitation of the homeowner’s disaster-affected home in
19lieu of a buyout.
20(4) Assistance under the program must not duplicate
21benefits provided by any local, state, or federal disaster
22recovery assistance program.
23b. If a homeowner is referred to the authority or to a
24local program administrator by the disaster case manager of the
25homeowner, the authority may award a forgivable loan to the
26eligible homeowner for any of the following purposes:
27(1) Repair or rehabilitation of the disaster-affected home.
28(2) (a) Down payment assistance on the purchase of
29replacement housing, and the cost of reasonable repairs to be
30performed on the replacement housing to render the replacement
31housing decent, safe, sanitary, and in good repair.
32(b) Replacement housing shall not be located in a
33one-hundred-year floodplain.
34(c) For purposes of this subparagraph, “decent, safe,
35sanitary, and in good repair” means the same as described in 24
-25-1C.F.R.§5.703.
2c. The authority shall determine the interest rate for the
3forgivable loan.
4d. If a homeowner who has been awarded a forgivable loan
5sells a disaster-affected home or replacement housing for which
6the homeowner received the forgivable loan prior to the end
7of the loan term, the remaining principal on the forgivable
8loan shall be due and payable pursuant to rules adopted by the
9authority.
106. Renters.
11a. To be eligible for a grant under the program, all of the
12following requirements shall apply:
13(1) A local program administrator either deems
14the disaster-affected home of the renter suitable for
15rehabilitation but unsuitable for current short-term
16habitation, or the disaster-affected home is damaged beyond
17reasonable repair.
18(2) Assistance under the program must not duplicate
19benefits provided by any local, state, or federal disaster
20recovery assistance program.
21b. If a renter is referred to the authority or to a local
22program administrator by the disaster case manager of the
23renter, the authority may award a grant to the eligible renter
24to provide short-term financial assistance for the payment of
25rent for replacement housing.
267. Report. On or before January 31 of each year, the
27authority shall submit a report to the general assembly
28that identifies all of the following for the calendar year
29immediately preceding the year of the report:
30a. The date of each state of disaster emergency proclamation
31by the governor that authorized disaster recovery housing
32assistance under this section.
33b. The total number of forgivable loans and grants awarded.
34c. The total number of forgivable loans, and the amount of
35each loan awarded for repair or rehabilitation.
-26- 1d. The total number of forgivable loans, and the amount of
2each loan, awarded for down payment assistance on the purchase
3of replacement housing and the cost of reasonable repairs to be
4performed on the replacement housing to render the replacement
5housing decent, safe, sanitary, and in good repair.
6e. The total number of grants, and the amount of each grant,
7awarded for rental assistance.
8f. The total number of forgivable loans and grants awarded
9in each county in which at least one homeowner or renter has
10been awarded a forgivable loan or grant.
11g. Each local program administrator involved in the
12administration of the program.
13h. The total amount of forgivable loan principal repaid.
14 Sec. 57. NEW SECTION. 16.57C Eviction prevention program.
151. a. “Eligible renter” means a renter whose income meets
16the qualifications of the program, who is at risk of eviction,
17and who resides in a county that is the subject of a state of
18disaster emergency proclamation by the governor that authorizes
19the eviction prevention program.
20b. “Eviction prevention partner” means a qualified local
21organization or governmental entity as determined by rule by
22the authority.
232. The authority shall establish and administer an eviction
24prevention program. Under the eviction prevention program,
25the authority shall award grants to eligible renters and to
26eviction prevention partners for purposes of this section.
27Grants may be awarded upon a state of disaster emergency
28proclamation by the governor that authorizes the eviction
29prevention program. Eviction prevention assistance shall be
30paid out of the fund established in section 16.57B.
313. a. Grants awarded to eligible renters pursuant to this
32section shall be used for short-term financial rent assistance
33to keep eligible renters in the current residences of such
34renters.
35b. Grants awarded to eviction prevention partners pursuant
-27-1to this section shall be used to pay for rent or services
2provided to eligible renters for the purpose of preventing the
3eviction of eligible renters.
44. The authority may enter into an agreement with one or
5more local program administrators to administer the program.
6 Sec. 58. NEW SECTION. 16.57D Rules.
7The authority shall adopt rules pursuant to chapter 17A to
8implement and administer this part, including rules to do all
9of the following:
101. Establish the maximum forgivable loan and grant amounts
11awarded under the program.
122. Establish the terms of any forgivable loan provided under
13the program.
143. Income qualifications of eligible renters in the
15eviction prevention program.
16 Sec. 59. CODE EDITOR DIRECTIVE. The Code editor shall
17designate sections 16.57A through 16.57D, as enacted by
18this division of this Act, as a new part within chapter 16,
19subchapter VIII, and may redesignate the new and preexisting
20parts, replace references to sections 16.57A through 16.57D
21with references to the new part, and correct internal
22references as necessary, including references in subchapter or
23part headnotes.
24 Sec. 60. EFFECTIVE DATE. This division of this Act, being
25deemed of immediate importance, takes effect upon enactment.
26DIVISION XIX
27BONUS DEPRECIATION
28 Sec. 61. Section 422.7, subsection 39A, Code 2021, is
29amended by striking the subsection.
30 Sec. 62. Section 422.35, subsection 19A, Code 2021, is
31amended by striking the subsection.
32 Sec. 63. RETROACTIVE APPLICABILITY. This division of this
33Act applies retroactively to January 1, 2021, for tax years
34beginning on or after that date, and for qualified property
35placed in service on or after that date.
-28-1DIVISION XX
2BEGINNING FARMER TAX CREDIT
3 Sec. 64. Section 16.58, subsections 1, 2, and 3, Code 2021,
4are amended to read as follows:
51. “Agricultural assets” means agricultural land,
6agricultural improvements, depreciable agricultural property,
7crops, or livestock.
82. “Agricultural improvements” improvement” means any
9improvements, including buildings, structures, or fixtures
10suitable for use in farming which are, if located on any size
11parcel of agricultural land.
123. “Agricultural land” means land suitable for use in
13farming, any portion of which may include an agricultural
14improvement.
15 Sec. 65. Section 16.77, subsection 2, Code 2021, is amended
16to read as follows:
172. “Agricultural lease agreement” or “agreement” means an
18agreement for the transfer of agricultural assets, that must at
19least include a lease of agricultural land, from an eligible
20taxpayer to a qualified beginning farmer as provided in section
2116.79A.
22 Sec. 66. Section 16.79A, subsection 1, Code 2021, is amended
23to read as follows:
241. a. A beginning farmer tax credit is allowed only for
25agricultural assets that are subject to an agricultural lease
26agreement entered into by an eligible taxpayer and a qualifying
27beginning farmer participating in the beginning farmer tax
28credit program established pursuant to section 16.78.
29b. The tax credit is allowed regardless of whether the
30principle agricultural asset is soil, pasture, or a building or
31other structure used in farming.
32 Sec. 67. Section 16.79A, subsection 2, Code 2021, is amended
33to read as follows:
342. The agreement must include the lease of agricultural
35land located in this state, including any or agricultural
-29-1 improvements located in this state, and may provide for the
2rental of agricultural equipment as defined in section 322F.1.
3 Sec. 68. Section 16.79A, subsection 3, paragraph c, Code
42021, is amended to read as follows:
5c. The agreement must be for at least two years, but not
6more than five years. The agreement may be renewed any number
7of times by the eligible taxpayer and qualified beginning
8farmer for a term of at least two years, but not more than five
9years. However, an eligible taxpayer shall not participate in
10the program for more than fifteen years.
11 Sec. 69. Section 16.81, subsection 4, Code 2021, is amended
12by striking the subsection.
13 Sec. 70. Section 16.81, subsection 6, Code 2021, is amended
14to read as follows:
156. The authority shall approve all beginning farmer tax
16credit applications that meet the requirements of this subpart
17and make tax credit awards on a first-come, first-served basis,
18subject to the limitations in section 16.82A. An eligible
19taxpayer may apply and be approved to enter into agreements
20with different qualified beginning farmers.
21 Sec. 71. Section 16.82, subsection 5, Code 2021, is amended
22to read as follows:
235. The amount of tax credits that may be awarded to an
24eligible taxpayer for any one year under all agreements an
25agreement shall not exceed fifty thousand dollars.
26 Sec. 72. BEGINNING FARMER TAX CREDIT PROGRAM — FORMER
27PERIOD OF PARTICIPATION EXTENDED. An eligible taxpayer first
28participating in the beginning farmer tax credit program on or
29after January 1, 2019, as provided in 2019 Iowa Acts, chapter
30161, for a tax year beginning on or after that date, may
31participate in the program for not more than fifteen years in
32the same manner as provided in section 16.79A, as amended by
33this division of this Act.
34 Sec. 73. EFFECTIVE DATE. This division of this Act takes
35effect January 1, 2022.
-30-1DIVISION XXI
2MENTAL HEALTH FUNDING
3 Sec. 74. Section 123.38, subsection 2, paragraph b, Code
42021, is amended to read as follows:
5b. For purposes of this subsection, any portion of license
6or permit fees used for the purposes authorized in section
7331.424, subsection 1, paragraph “a”, subparagraphs (1) and
8(2), and in section 331.424A, shall not be deemed received
9either by the division or by a local authority.
10 Sec. 75. Section 218.99, Code 2021, is amended to read as
11follows:
12218.99 Counties to be notified of patients’ personal
13accounts.
14The administrator in control of a state institution shall
15direct the business manager of each institution under the
16administrator’s jurisdiction which is mentioned in section
17331.424, subsection 1, paragraph “a”, subparagraphs (1) and
18(2), and for which services are paid under section 331.424A
19by the county of residence or a mental health and disability
20services region, to quarterly inform the county of residence
21of any patient or resident who has an amount in excess of two
22hundred dollars on account in the patients’ personal deposit
23fund and the amount on deposit. The administrators shall
24direct the business manager to further notify the county of
25residence at least fifteen days before the release of funds in
26excess of two hundred dollars or upon the death of the patient
27or resident. If the patient or resident has no residency in
28this state or the person’s residency is unknown, notice shall
29be made to the director of human services and the administrator
30in control of the institution involved.
31 Sec. 76. Section 225.24, Code 2021, is amended to read as
32follows:
33225.24 Collection of preliminary expense.
34Unless a committed private patient or those legally
35responsible for the patient’s support offer to settle the
-31-1amount of the claims, the regional administrator for the
2person’s county of residence shall collect, by action if
3necessary, the amount of all claims for per diem and expenses
4that have been approved by the regional administrator for the
5county and paid by the regional administrator as provided under
6section 225.21. Any amount collected shall be credited to the
7county mental health and disabilities disability services fund
8 region combined account created in accordance with section
9331.424A 331.391.
10 Sec. 77. Section 225C.4, subsection 1, paragraph i, Code
112021, is amended to read as follows:
12i. Administer and distribute state appropriations in
13connection with the mental health and disability services
14 regional services service fund established by section 225C.7A.
15 Sec. 78. Section 225C.7A, Code 2021, is amended by striking
16the section and inserting in lieu thereof the following:
17225C.7A Mental health and disability services regional
18service fund — region incentive fund.
191. A mental health and disability services regional service
20fund is created in the office of the treasurer of state under
21the authority of the department. The fund shall be separate
22from the general fund of the state and the balance in the fund
23shall not be considered part of the balance of the general
24fund of the state. Moneys in the fund include appropriations
25made to the fund and other moneys deposited into the fund.
26Moneys in the fund shall be used solely for purposes of making
27regional service payments and incentive payments under this
28section.
292. a. For each fiscal year beginning on or after July 1,
302021, there is appropriated from the general fund of the state
31to the mental health and disability services regional service
32fund an amount necessary to make all regional service payments
33under this section for that fiscal year.
34b. The department shall distribute the moneys appropriated
35from the mental health and disability services regional
-32-1service fund to mental health and disability services regions
2for funding of services in accordance with performance-based
3contracts with the regions and in the manner provided in this
4section. If the allocation methodology includes a population
5factor, the definition of “population” in section 331.388 shall
6be applied.
73. For each fiscal year beginning on or after July 1, 2021,
8the moneys available in a fiscal year in the mental health and
9disability services regional service fund, except for moneys in
10the region incentive fund under subsection 8, are appropriated
11to the department and shall be distributed to each region on
12a per capita basis calculated under subsection 4 using each
13region’s population, as defined in section 331.388, for that
14fiscal year.
154. The amount of each region’s regional service payment
16shall be determined as follows:
17a. For the fiscal year beginning July 1, 2021, an amount
18equal to the product of fifteen dollars and eighty-six cents
19multiplied by the sum of the region’s population for the fiscal
20year.
21b. For the fiscal year beginning July 1, 2022, an amount
22equal to the product of thirty-eight dollars multiplied by the
23sum of the region’s population for the fiscal year.
24c. For the fiscal year beginning July 1, 2023, an amount
25equal to the product of forty dollars multiplied by the sum of
26the region’s population for the fiscal year.
27d. For the fiscal year beginning July 1, 2024, an amount
28equal to the product of forty-two dollars multiplied by the sum
29of the region’s population for the fiscal year.
30e. (1) For the fiscal year beginning July 1, 2025, and each
31succeeding fiscal year, an amount equal to the product of the
32sum of the region’s population for the fiscal year multiplied
33by the sum of the dollar amount used to calculate the regional
34service payments under this subsection for the immediately
35preceding fiscal year plus the regional service growth factor
-33-1for the fiscal year.
2(2) For purposes of this paragraph, “regional service growth
3factor” for a fiscal year is an amount equal to the product
4of the dollar amount used to calculate the regional service
5payments under this subsection for the immediately preceding
6fiscal year multiplied by the percent increase, if any, in the
7amount of sales tax revenue deposited into the general fund of
8the state under section 423.2A, subsection 1, paragraph “a”,
9less the transfers required under section 423.2A, subsection
102, between the fiscal year beginning three years prior to
11the applicable fiscal year and the fiscal year beginning two
12years prior to the applicable year, but not to exceed one and
13one-half percent.
145. Regional service payments received by a region
15shall be deposited in the region’s combined account under
16section 331.391 and used solely for providing mental health
17and disability services under the regional service system
18management plan.
196. Regional service payments from the mental health
20and disability services regional service fund shall be
21paid in quarterly installments to the appropriate regional
22administrator in July, October, January, and April of each
23fiscal year.
247. a. For the fiscal year beginning July 1, 2021, each
25mental health and disability services region for which the
26amount certified during the fiscal year under section 331.391,
27subsection 4, paragraph “b”, exceeds forty percent of the actual
28expenditures of the region for the fiscal year preceding the
29fiscal year in progress, the remaining quarterly payments of
30the region’s regional service payment shall be reduced by
31an amount equal to the amount by which the region’s amount
32certified under section 331.391, subsection 4, paragraph “b”,
33exceeds forty percent of the actual expenditures of the region
34for the fiscal year preceding the fiscal year in progress, but
35the amount of the reduction shall not exceed the total amount
-34-1of the region’s regional service payment for the fiscal year.
2If the region’s remaining quarterly payments are insufficient
3to effectuate the required reductions under this paragraph, the
4region is required to pay to the department of human services
5any amount for which the reduction in quarterly payments could
6not be made. The amount of reductions to quarterly payments
7and amounts paid to the department under this paragraph shall
8be transferred and credited to the region incentive fund under
9subsection 8.
10b. For the fiscal year beginning July 1, 2022, each mental
11health and disability services region for which the amount
12certified during the fiscal year under section 331.391,
13subsection 4, paragraph “b”, exceeds twenty percent of the
14actual expenditures of the region for the fiscal year preceding
15the fiscal year in progress, the remaining quarterly payments
16of the region’s regional service payment shall be reduced by
17an amount equal to the amount by which the region’s amount
18certified under section 331.391, subsection 4, paragraph “b”,
19exceeds twenty percent of the actual expenditures of the region
20for the fiscal year preceding the fiscal year in progress, but
21the amount of the reduction shall not exceed the total amount
22of the region’s regional service payment for the fiscal year.
23If the region’s remaining quarterly payments are insufficient
24to effectuate the required reductions under this paragraph, the
25region is required to pay to the department of human services
26any amount for which the reduction in quarterly payments could
27not be made. The amount of reductions to quarterly payments
28and amounts paid to the department under this paragraph shall
29be transferred and credited to the region incentive fund under
30subsection 8.
31c. For the fiscal year beginning July 1, 2023, and each
32succeeding fiscal year, each mental health and disability
33services region for which the amount certified during the
34fiscal year under section 331.391, subsection 4, paragraph “b”,
35exceeds five percent of the actual expenditures of the region
-35-1for the fiscal year preceding the fiscal year in progress, the
2remaining quarterly payments of the region’s regional service
3payment shall be reduced by an amount equal to the amount by
4which the region’s amount certified under section 331.391,
5subsection 4, paragraph “b”, exceeds five percent of the actual
6expenditures of the region for the fiscal year preceding the
7fiscal year in progress, but the amount of the reduction
8shall not exceed the total amount of the region’s regional
9service payment for the fiscal year. If the region’s remaining
10quarterly payments are insufficient to effectuate the required
11reductions under this paragraph, the region is required to
12pay to the department of human services any amount for which
13the reduction in quarterly payments could not be made. The
14amount of reductions to quarterly payments and amounts paid to
15the department under this paragraph shall be transferred and
16credited to the region incentive fund under subsection 8.
178. a. A region incentive fund is created in the mental
18health and disability services regional service fund under
19subsection 1. The incentive fund shall consist of the
20moneys appropriated or credited to the incentive fund by
21law, including amounts credited to the incentive fund under
22subsection 7. For fiscal years beginning on or after July 1,
232021, there is appropriated from the general fund of the state
24to the incentive fund the following amounts to be used for the
25purposes of this subsection:
26(1) For the fiscal year beginning July 1, 2021, nine million
27nine hundred sixty thousand five hundred ninety dollars.
28(2) For the fiscal year beginning July 1, 2022, five million
29one hundred seven thousand three hundred forty dollars.
30(3) (a) For each fiscal year beginning on or after July
311, 2025, an amount equal to the incentive fund growth factor
32multiplied by the ending balance of the incentive fund at
33the conclusion of the fiscal year ending June 30 immediately
34preceding the application deadline under paragraph “b” for the
35fiscal year for which the appropriation is made.
-36- 1(b) For purposes of this subparagraph, the “incentive fund
2growth factor” for each fiscal year is the percent increase,
3if any, in the amount of sales tax revenue deposited into the
4general fund of the state under section 423.2A, subsection
51, paragraph “a”, less the transfers required under section
6423.2A, subsection 2, between the fiscal year beginning three
7years prior to the applicable fiscal year and the fiscal year
8beginning two years prior to the applicable year, minus one and
9one-half percent, and the incentive fund growth factor for any
10fiscal year shall not exceed three and one-half percent.
11b. To receive funding from the incentive fund, a regional
12administrator must submit to the department sufficient data
13to demonstrate that the region has met the standards outlined
14in the region’s performance-based contract. The purpose of
15the incentive fund shall be to provide appropriate financial
16incentives for outcomes met from services provided by the
17regional administrator’s mental health and disability services
18region. The department shall make its final decisions on or
19before December 15 regarding acceptance or rejection of the
20submissions for incentive funds applications for assistance and
21the total amount accepted shall be considered obligated.
22c. In addition to incentive submission requirements under
23paragraphs “d”, “f”, and “g”, basic eligibility for incentive
24funds requires that a mental health and disability services
25region meet all of the following conditions:
26(1) The mental health and disability services region is in
27compliance with the regional service system management plan
28requirements of section 331.393.
29(2) (a) In the fiscal year that commenced two years prior
30to the fiscal year of application for incentive funds, the
31ending balance, under generally accepted accounting principles,
32of the mental health and disability services region’s combined
33services funds was equal to or less than the ending balance
34threshold under subparagraph division (b) for the fiscal year
35for which assistance is requested.
-37- 1(b) For purposes of this subparagraph (2), “ending balance
2threshold” means the following:
3(i) For applications for the fiscal year beginning July 1,
42021, forty percent of the actual expenditures of the mental
5health and disability services region for the fiscal year that
6commenced two years prior to the fiscal year of application for
7assistance.
8(ii) For applications for the fiscal year beginning July 1,
92022, twenty percent of the actual expenditures of the mental
10health and disability services region for the fiscal year that
11commenced two years prior to the fiscal year of application for
12assistance.
13(iii) For applications for fiscal years beginning on or
14after July 1, 2023, five percent of the actual expenditures
15of the mental health and disability services region for the
16fiscal year that commenced two years prior to the fiscal year
17of application for assistance.
18d. The department shall review the fiscal year-end financial
19records for all mental health and disability services regions
20that are granted incentive funds. If the department determines
21a mental health and disability services region’s actual need
22for incentive funds was less than the amount of incentive funds
23granted to the mental health and disability services region,
24the mental health and disability services region shall refund
25the difference between the amount of assistance granted and
26the actual need. The mental health and disability services
27region shall submit the refund within thirty days of receiving
28notice from the department. Refunds shall be credited to the
29incentive fund.
30e. The department shall determine application requirements
31to ensure prudent use of the incentive fund. The department
32may accept or reject an application for incentive funds in
33whole or in part. The decision of the department is final.
34f. The total amount of incentive funds approved shall be
35limited to the amount available in the incentive fund for a
-38-1fiscal year. Any unobligated balance in the incentive fund at
2the close of a fiscal year shall remain in the incentive fund
3for distribution in the succeeding fiscal year.
4g. Incentive funds shall only be made available to address
5one or more of the following circumstances:
6(1) To reimburse regions for reductions in available
7funding for core services as the result of the reduction and
8elimination of the levy under section 331.424A, Code 2021, if
9the region has an operating deficit. The department shall
10prioritize approval of incentive funds for the circumstances
11specified in this subparagraph.
12(2) To incentivize quality core services that meet or exceed
13the defined outcomes in the performance-based contract.
14(3) To support regional efforts to fund non-core services
15that support the defined outcomes of core services in the
16performance-based contract.
17(4) To support non-core services to maintain an individual
18in a community setting or that would create a risk that the
19individuals needing services and supports would be placed in
20more restrictive, higher-cost settings.
21h. Subject to the amount available and obligated from
22the incentive fund for a fiscal year, the department shall
23annually calculate the amount of moneys due to eligible mental
24health and disability services regions in accordance with the
25department’s decisions and that amount is appropriated from the
26incentive fund to the department for payment of the moneys due.
27The department shall distribute incentive funds payable to the
28mental health and disability services regions for the amounts
29due on or before January 1.
30i. On or before March 1 and September 1 of each fiscal
31year, the department shall provide the governor’s office and
32the general assembly with a report of the financial condition
33of the incentive fund. The report shall include but is not
34limited to an itemization of the funding source’s balances,
35types and amount of revenues credited, and payees and payment
-39-1amounts for the expenditures made from the funding source
2during the reporting period.
3j. If the department has made its decisions but has
4determined that there are otherwise qualifying requests for
5incentive funds that are beyond the amount available in the
6incentive fund for a fiscal year, the department shall compile
7a list of such requests and the supporting information for
8the requests. The list and information shall be submitted to
9the commission, the children’s behavioral health system state
10board, and the general assembly.
119. The commission shall consult with regional
12administrators and the director in prescribing forms and
13adopting rules to administer this section.
14 Sec. 79. Section 249N.8, subsection 1, Code 2021, is amended
15to read as follows:
161. Biennially, a report of the results of a review, by
17county and region, of mental health services previously funded
18through taxes levied by counties pursuant to section 331.424A,
19Code 2021, or funds administered by a mental health and
20disability services region that are funded during the reporting
21period under the Iowa health and wellness plan.
22 Sec. 80. Section 331.389, subsection 1, paragraph b, Code
232021, is amended to read as follows:
24b. If a county has been exempted prior to July 1, 2014, from
25the requirement to enter into a regional service system, the
26county and the county’s board of supervisors shall fulfill all
27requirements and be eligible as a region under this chapter and
28chapter chapters 222, 225, 225C, 226, 227, 229, and 230 for a
29regional service system, regional service system management
30plan, regional governing board, and regional administrator,
31and any other provisions applicable to a region of counties
32providing local mental health and disability services.
33Additionally, a county exempted under this subsection shall be
34considered a region for purposes of chapter 426B.
35 Sec. 81. Section 331.389, subsection 5, paragraph a,
-40-1subparagraph (2), Code 2021, is amended to read as follows:
2(2) Reduce the amount of the annual state funding provided
3for the regional service system or exempted county, including
4amounts received under section 225C.7A, not to exceed fifteen
5percent of the amount.
6 Sec. 82. Section 331.391, subsections 1 and 3, Code 2021,
7are amended to read as follows:
81. The funding under the control of the governing board
9shall be maintained in a combined account, in separate county
10accounts that are under the control of the governing board, or
11pursuant to other arrangements authorized by law that limit the
12administrative burden of such control while facilitating public
13scrutiny of financial processes. A county exempted under
14section 331.389, subsection 1, shall maintain a county mental
15health and disability services fund for the deposit of funding
16received under section 225C.7A and appropriations specifically
17authorized to be made from the county mental health and
18disability services fund shall not be made from any other fund
19of the county. A county mental health and disability services
20fund established by an exempt county, to the extent feasible,
21shall be considered to be the same as a region combined account
22and shall be subject to the same requirements as a region’s
23combined account.
243. The funding provided pursuant to appropriations from the
25mental health and disability services regional services service
26 fund created in section 225C.7A and from performance-based
27contracts with the department shall be credited to the account
28or accounts under the control of the governing board.
29 Sec. 83. Section 331.391, subsection 4, paragraphs a, b, and
30c, Code 2021, are amended to read as follows:
31a. If a region is meeting the financial obligations for
32implementation of its regional service system management plan
33for a fiscal year and residual funding is anticipated, the
34regional administrator shall may reserve an adequate amount of
35unobligated and unencumbered funds for cash flow of expenditure
-41-1obligations in the next fiscal year.
2b. Each region shall certify to the department of management
3 human services on or before December 1, 2022 2021, and each
4December 1 thereafter, the amount of the region’s cash flow
5amount in the combined account that is attributable to each
6county within the region based upon each county’s proportionate
7amount of funding and contributions to the region or other
8methodology specified in the regional governance agreement
9or certify the cash flow amount for each separate county
10account that is under the control of the governing board at the
11conclusion of the most recently completed fiscal year.
12c. For fiscal years beginning on or after July 1, 2023,
13the region’s cash flow amount, either reserved in the region’s
14combined account or reserved among all separate county accounts
15under the control of the governing board, shall not exceed
16forty five percent of the gross actual expenditures from the
17combined account or from all separate county accounts under
18control of the governing board for the fiscal year preceding
19the fiscal year in progress.
20 Sec. 84. Section 331.392, subsection 4, paragraph a, Code
212021, is amended to read as follows:
22a. Methods for pooling, management, and expenditure of the
23funding under the control of the regional administrator. If
24the agreement does not provide for pooling of the participating
25county moneys in a single fund, the agreement shall specify how
26the participating county moneys will be subject to the control
27of the regional administrator.
28 Sec. 85. Section 331.393, subsection 10, Code 2021, is
29amended to read as follows:
3010. The director’s approval of a regional plan shall not be
31construed to constitute certification of the respective county
32budgets or of the region’s budget.
33 Sec. 86. Section 331.394, subsection 4, Code 2021, is
34amended to read as follows:
354. If a county of residence is part of a mental health and
-42-1disability services region that has agreed to pool funding and
2liability for services, the The responsibilities of the county
3under law regarding such mental health and disability services
4shall be performed on behalf of the county by the regional
5administrator. The county of residence or the county’s mental
6health and disability services region, as applicable, is
7responsible for paying the public costs of the mental health
8and disability services that are not covered by the medical
9assistance program under chapter 249A and are provided in
10accordance with the region’s approved service management plan
11to persons who are residents of the county or region.
12 Sec. 87. Section 331.398, subsection 1, Code 2021, is
13amended to read as follows:
141. The financing of a regional mental health and disability
15service system is limited to a fixed budget amount. The fixed
16budget amount shall be the amount identified in a regional
17service system management plan and budget for the fiscal year.
18A region shall receive state funding for growth in non-Medicaid
19expenditures through the mental health and disability regional
20services fund created in section 225C.7A to address increased
21service costs, additional service populations, additional core
22service domains, and increased numbers of persons receiving
23services.
24 Sec. 88. Section 331.424A, subsection 1, paragraph b, Code
252021, is amended by striking the paragraph.
26 Sec. 89. Section 331.424A, subsection 3, Code 2021, is
27amended to read as follows:
283. a. County revenues from taxes and other sources
29designated by a county for mental health and disabilities
30services shall be credited to the county mental health and
31disabilities services fund which shall be created by the
32county. The Until the required transfer of funds under
33paragraph “b”, the board shall make appropriations from the fund
34for payment of services provided under the regional service
35system management plan approved pursuant to section 331.393.
-43-1The For fiscal years beginning before July 1, 2022, the county
2may pay for the services in cooperation with other counties
3by pooling appropriations from the county services fund with
4appropriations from the county services fund of other counties
5through the county’s regional administrator, or through another
6arrangement specified in the regional governance agreement
7entered into by the county under section 331.392.
8b. Notwithstanding section 331.432, subsection 3, upon
9conclusion of the fiscal year beginning July 1, 2021, except
10for an exempt county under section 331.391, subsection 1,
11the county treasurer shall transfer the remaining balance of
12the county’s county services fund created under paragraph
13“a”, including all unobligated and unencumbered funds, to the
14county’s region to which the county belongs in the fiscal year
15beginning July 1, 2022, for deposit in the region’s combined
16account under section 331.391.
17 Sec. 90. Section 331.424A, subsection 4, paragraph a, Code
182021, is amended to read as follows:
19a. An amount of unobligated and unencumbered funds, as
20specified in the regional governance agreement entered into
21by the county under section 331.392, shall, for fiscal years
22beginning before July 1, 2022, be reserved in the county
23services fund to address cash flow obligations in the next
24fiscal year, subject to the limitations of this subsection.
25 Sec. 91. Section 331.424A, subsection 4, paragraphs c and d,
26Code 2021, are amended by striking the paragraphs.
27 Sec. 92. Section 331.424A, subsections 5, 6, and 9, Code
282021, are amended to read as follows:
295. Receipts from the state or federal government for fiscal
30years beginning before July 1, 2022, for the mental health
31and disability services administered or paid for by a county
32shall be credited to the county services fund, including moneys
33distributed to the county from the department of human services
34and moneys allocated under chapter 426B.
356. For each fiscal year beginning before July 1, 2022, the
-44-1county shall certify a levy for payment of services. For each
2such fiscal year, county revenues from taxes imposed by the
3county credited to the county services fund shall not exceed an
4amount equal to the county budgeted amount for the fiscal year.
5A levy certified under this section is not subject to the
6appeal provisions of section 331.426or to any other provision
7in law authorizing a county to exceed, increase, or appeal a
8property tax levy limit.
99. a. For the fiscal year beginning July 1, 2017, and
10each subsequent fiscal year beginning before July 1, 2022, the
11county budgeted amount determined for each county shall be the
12amount necessary to meet the county’s financial obligations for
13the payment of services provided under the regional service
14system management plan approved pursuant to section 331.393,
15not to exceed an amount equal to the product of the regional
16per capita expenditure target amount twenty-one dollars and
17fourteen cents multiplied by the county’s population, and, for
18fiscal years beginning on or after July 1, 2023, reduced by
19the amount of the county’s cash flow reduction amount for the
20fiscal year calculated under subsection 4, if applicable.
21b. If a county officially joins a different region, the
22county’s budgeted amount for a fiscal year beginning before
23July 1, 2022, shall be the amount necessary to meet the
24county’s financial obligations for payment of services provided
25under the new region’s regional service system management plan
26approved pursuant to section 331.393, not to exceed an amount
27equal to the product of the new region’s regional per capita
28expenditure target amount twenty-one dollars and fourteen cents
29 multiplied by the county’s population, and, for fiscal years
30beginning on or after July 1, 2023, reduced by the amount of
31the county’s cash flow reduction amount for the fiscal year
32calculated under subsection 4, if applicable.
33 Sec. 93. Section 331.424A, Code 2021, is amended by adding
34the following new subsection:
35 NEW SUBSECTION. 10. This section is repealed July 1, 2022.
-45-1 Sec. 94. Section 331.432, subsection 3, Code 2021, is
2amended to read as follows:
33. a. Except as authorized in section 331.477, transfers
4of moneys between the county services fund created pursuant
5to section 331.424A and any other fund are prohibited. This
6subsection paragraph does not apply to appropriations made or
7the value of in-kind care and treatment provided pursuant to
8section 347.7, subsection 1, paragraph “c”, Code 2021, or to
9transfers from a county public hospital fund under section
10347.7. This paragraph is repealed July 1, 2022.
11b. Payments or transfers of moneys from any fund of the
12county to a mental health and disability services region’s
13combined account under section 331.391 are prohibited. This
14paragraph applies to fiscal years beginning on or after July
151, 2022, but does not apply to transfers from a county public
16hospital fund under section 347.7 for the fiscal year beginning
17July 1, 2022, or the fiscal year beginning July 1, 2023.
18 Sec. 95. Section 347.7, subsection 1, paragraph c, Code
192021, is amended by striking the paragraph.
20 Sec. 96. Section 426B.1, subsection 2, Code 2021, is amended
21to read as follows:
222. Moneys shall be distributed from the property tax relief
23fund to counties for the mental health and disability regional
24service system for mental health and disabilities services, in
25accordance with the appropriations made to the fund and other
26statutory requirements.
27 Sec. 97. Section 426B.2, Code 2021, is amended to read as
28follows:
29426B.2 Property tax relief fund payments.
30The director of human services shall draw warrants on the
31property tax relief fund, payable to the county treasurer
32 regional administrator in the amount due to a county mental
33health and disability services region in accordance with
34statutory requirements, and mail the warrants to the county
35auditors regional administrator in July and January of each
-46-1year.
2 Sec. 98. Section 426B.4, Code 2021, is amended to read as
3follows:
4426B.4 Rules.
5The mental health and disability services commission shall
6consult with county representatives regional administrators
7 and the director of human services in prescribing forms and
8adopting rules pursuant to chapter 17A to administer this
9chapter.
10 Sec. 99. ADJUSTMENT TO PROPERTY TAXES CERTIFIED UNDER
11SECTION 331.424A — FY 2021-2022. For each county for which
12the amount of taxes certified for levy for the purposes
13of section 331.424A for the fiscal year beginning July 1,
142021, exceeds the product of the population of the county as
15determined under section 331.424A, subsection 1, paragraph
16“e”, multiplied by twenty-one dollars and fourteen cents,
17the department of management shall reduce the amount of such
18taxes certified for levy to an amount not to exceed the
19product of the population of the county as determined under
20section 331.424A, subsection 1, paragraph “e”, multiplied by
21twenty-one dollars and fourteen cents and shall revise the rate
22of taxation as necessary to raise the reduced amount. The
23department of management shall report the reduction in the
24certified taxes and the revised rate of taxation to the county
25auditors by June 15, 2021.
26 Sec. 100. IMPLEMENTATION OF REGION INCENTIVE FUND UNDER
27SECTION 225C.7A — EMERGENCY RULEMAKING.
281. In order to timely implement the provisions of this
29division of this Act establishing the region incentive fund
30under section 225C.7A, subsection 8, for mental health and
31disability services regions for funding the fiscal year
32beginning July 1, 2021, and the fiscal year beginning July
331, 2022, the director of human services shall establish
34alternative application deadlines and expedited application
35review and approval timelines.
-47- 12. The department of human services may adopt
2administrative rules under section 17A.4, subsection 3, and
3section 17A.5, subsection 2, paragraph “b”, to implement
4provisions of this division of this Act and the rules shall
5become effective immediately upon filing or on a later
6effective date specified in the rules, unless the effective
7date of the rules is delayed or the applicability of the rules
8is suspended by the administrative rules review committee. Any
9rules adopted in accordance with this section shall not take
10effect before the rules are reviewed by the administrative
11rules review committee. The delay authority provided to
12the administrative rules review committee under section
1317A.8, subsections 9 and 10, shall be applicable to a delay
14imposed under this section, notwithstanding a provision in
15those subsections making them inapplicable to section 17A.5,
16subsection 2, paragraph “b”. Any rules adopted in accordance
17with the provisions of this section shall also be published as
18a notice of intended action as provided in section 17A.4.
19 Sec. 101. EFFECTIVE DATE. This division of this Act, being
20deemed of immediate importance, takes effect upon enactment.
21DIVISION XXII
22COMMERCIAL AND INDUSTRIAL PROPERTY TAX REPLACEMENT PAYMENTS
23 Sec. 102. Section 2.48, subsection 3, paragraph f,
24subparagraph (6), Code 2021, is amended by striking the
25subparagraph.
26 Sec. 103. Section 331.512, subsection 15, Code 2021, is
27amended by striking the subsection.
28 Sec. 104. Section 331.559, subsection 27, Code 2021, is
29amended by striking the subsection.
30 Sec. 105. Section 441.21A, subsection 1, paragraph a, Code
312021, is amended to read as follows:
32a. For each fiscal year beginning on or after July 1, 2014,
33but before July 1, 2029, there is appropriated from the general
34fund of the state to the department of revenue an amount
35necessary for the payment of all commercial and industrial
-48-1property tax replacement claims under this section for the
2fiscal year. However, for a the fiscal year years beginning
3on or after July 1, 2017, July 1, 2018, July 1, 2019, July 1,
42020, and July 1, 2021, the total amount of moneys appropriated
5from the general fund of the state to the department of revenue
6for the payment of commercial and industrial property tax
7replacement claims in that each fiscal year shall not exceed
8the total amount of money necessary to pay all commercial and
9industrial property tax replacement claims for the fiscal year
10beginning July 1, 2016.
11 Sec. 106. Section 441.21A, subsections 2 and 3, Code 2021,
12are amended to read as follows:
132. a. Beginning with the For each fiscal year beginning
14on or after July 1, 2014, but before July 1, 2022, each county
15treasurer shall be paid by the department of revenue an
16amount equal to the amount of the commercial and industrial
17property tax replacement claims in the county, as calculated
18in subsection 4. If an amount appropriated for a the fiscal
19year beginning on July 1, 2017, July 1, 2018, July 1, 2019,
20July 1, 2020, or July 1, 2021, is insufficient to pay all
21replacement claims for the fiscal year, the director of revenue
22shall prorate the payment of replacement claims to the county
23treasurers and shall notify the county auditors of the pro rata
24percentage on or before September 30.
25b. For each fiscal year beginning on or after July 1, 2022,
26but before July 1, 2029, each county treasurer shall be paid
27by the department of revenue an amount equal to the sum of the
28commercial and industrial property tax replacement claims for
29all taxing authorities, or portion thereof, located in the
30county, as calculated in subsection 4A. The county treasurer
31shall pay to each taxing authority the taxing authority’s
32commercial and industrial property tax replacement claim, or
33portion thereof, as calculated in subsection 4A.
343. a. On or before July 1 of each fiscal year beginning on
35or after July 1, 2014, but before July 1, 2022, the assessor
-49-1shall report to the county auditor the total actual value of
2all commercial property and industrial property in the county
3that is subject to assessment and taxation for the assessment
4year used to calculate the taxes due and payable in that fiscal
5year.
6b. On or before July 1, 2022, the department of management
7shall calculate and report to the department of revenue for
8each taxing authority in this state that is a city or a county
9all of the following:
10(1) The total assessed value as of January 1, 2012, of
11all taxable property located in the taxing authority that is
12subject to assessment and taxation used to calculate taxes
13which are due and payable in the fiscal year beginning July 1,
142013, excluding property subject to the statewide property tax
15imposed under section 437A.18 or 437B.14.
16(2) The total assessed value as of January 1, 2019, of
17all taxable property located in the taxing authority that is
18subject to assessment and taxation used to calculate taxes
19which are due and payable in the fiscal year beginning July 1,
202020, excluding property subject to the statewide property tax
21imposed under section 437A.18 or 437B.14.
22 Sec. 107. Section 441.21A, subsection 4, unnumbered
23paragraph 1, Code 2021, is amended to read as follows:
24On or before a date established by rule of the department
25of revenue of each fiscal year beginning on or after July
261, 2014, but before July 1, 2022, the county auditor shall
27prepare a statement, based upon the report received pursuant to
28subsection 3, paragraph “a”, listing for each taxing district
29in the county:
30 Sec. 108. Section 441.21A, Code 2021, is amended by adding
31the following new subsection:
32 NEW SUBSECTION. 4A. a. As used in this subsection, unless
33the context clearly requires otherwise:
34(1) “Qualified taxing authority” means any of the following:
35(a) A taxing authority that is not a city or a county.
-50- 1(b) A taxing authority that is a city or county for which
2the amount determined under subsection 3, paragraph “b”,
3subparagraph (2), is less than one hundred thirty-one and
4twenty-four hundredths percent of the amount determined under
5subsection 3, paragraph “b”, subparagraph (1).
6(2) “Taxing authority” means a city, county, community
7college, or other governmental entity or political subdivision
8in this state authorized to certify a levy on property located
9within such authority, but does not include a school district.
10b. For fiscal years beginning on or after July 1, 2022,
11but before July 1, 2029, the amount of each taxing authority’s
12replacement claim is as follows:
13(1) If the taxing authority is a qualified taxing authority:
14(a) For the fiscal year beginning July 1, 2022,
15seven-eighths of the amount received by the taxing authority
16under this section for the fiscal year beginning July 1, 2021.
17(b) For the fiscal year beginning July 1, 2023, six-eighths
18of the amount received by the taxing authority under this
19section for the fiscal year beginning July 1, 2021.
20(c) For the fiscal year beginning July 1, 2024, five-eighths
21of the amount received by the taxing authority under this
22section for the fiscal year beginning July 1, 2021.
23(d) For the fiscal year beginning July 1, 2025, four-eighths
24of the amount received by the taxing authority under this
25section for the fiscal year beginning July 1, 2021.
26(e) For the fiscal year beginning July 1, 2026,
27three-eighths of the amount received by the taxing authority
28under this section for the fiscal year beginning July 1, 2021.
29(f) For the fiscal year beginning July 1, 2027, two-eighths
30of the amount received by the taxing authority under this
31section for the fiscal year beginning July 1, 2021.
32(g) For the fiscal year beginning July 1, 2028, one-eighth
33of the amount received by the taxing authority under this
34section for the fiscal year beginning July 1, 2021.
35(2) If the taxing authority is not a qualified taxing
-51-1authority:
2(a) For the fiscal year beginning July 1, 2022, four-fifths
3of the amount received by the taxing authority under this
4section for the fiscal year beginning July 1, 2021.
5(b) For the fiscal year beginning July 1, 2023, three-fifths
6of the amount received by the taxing authority under this
7section for the fiscal year beginning July 1, 2021.
8(c) For the fiscal year beginning July 1, 2024, two-fifths
9of the amount received by the taxing authority under this
10section for the fiscal year beginning July 1, 2021.
11(d) For the fiscal year beginning July 1, 2025, one-fifth of
12the amount received by the taxing authority under this section
13for the fiscal year beginning July 1, 2021.
14(e) For the fiscal year beginning July 1, 2026, and each
15succeeding fiscal year beginning before July 1, 2029, zero.
16(3) The department of management shall calculate and report
17to the department of revenue the amount received by each
18taxing authority in this state as the result of commercial and
19industrial property tax replacement claims paid for the fiscal
20year beginning July 1, 2021, and the portion of the amount
21attributable to each county where the taxing authority is
22located, if applicable.
23 Sec. 109. Section 441.21A, subsection 5, Code 2021, is
24amended to read as follows:
255. For purposes of computing replacement amounts under
26this section for fiscal years beginning on or after July 1,
272014, but before July 1, 2022, that portion of an urban renewal
28area defined as the sum of the assessed valuations defined in
29section 403.19, subsections 1 and 2, shall be considered a
30taxing district.
31 Sec. 110. Section 441.21A, subsection 6, paragraph a, Code
322021, is amended to read as follows:
33a. The For fiscal years beginning on or after July 1, 2014,
34but before July 1, 2022, the county auditor shall certify
35and forward one copy of the statement to the department of
-52-1revenue not later than a date of each year established by the
2department of revenue by rule.
3 Sec. 111. Section 441.21A, subsection 6, Code 2021, is
4amended by adding the following new paragraph:
5 NEW PARAGRAPH. f. This subsection shall apply to the
6apportionment of replacement claim amounts for fiscal years
7beginning on or after July 1, 2014, but before July 1, 2022.
8 Sec. 112. Section 441.21A, Code 2021, is amended by adding
9the following new subsections:
10 NEW SUBSECTION. 7. a. For fiscal years beginning on
11or after July 1, 2022, but before July 1, 2029, each taxing
12authority’s replacement claim calculated under subsection 4A,
13or portion thereof, shall be paid to the appropriate county
14treasurer, as provided in subsection 2, paragraph “b”, in equal
15installments in September and March of each year.
16b. After payment by the county treasurer to the taxing
17authority, the taxing authority’s replacement claim shall be
18apportioned and credited by the governing body of the taxing
19authority among the taxing authority’s tax levies in the same
20proportion that each property tax levy bears to the total of
21all property tax levies imposed by the taxing authority for the
22fiscal year for which the payment is received.
23c. Of the amounts allocated and credited to each property
24tax levy that is subject to division under section 403.19,
25the total amount paid into the fund for the taxing authority
26as taxes by or for the taxing authority into which all other
27property taxes are paid and the special fund of the applicable
28municipality under section 403.19, subsection 2, shall be an
29amount of the replacement claim that is proportionate to the
30amount of the total sum of the assessed value of the taxable
31commercial and industrial property in the urban renewal area as
32a share of total assessed value of all taxable property in the
33taxing authority and shall be apportioned as follows:
34(1) To the fund for the taxing authority as taxes by or for
35the taxing authority into which all other property taxes are
-53-1paid, an amount proportionate to the amount of actual value of
2the commercial and industrial property in the urban renewal
3area as determined in section 403.19, subsection 1, that was
4subtracted pursuant to section 403.20, as it bears to the
5total amount of actual value of the commercial and industrial
6property in the urban renewal area that was subtracted pursuant
7to section 403.20 for the assessment year for property taxes
8due and payable in the fiscal year for which the replacement
9claim is computed.
10(2) (a) To the special fund of the applicable municipality
11under section 403.19, subsection 2, the remaining amount, if
12any.
13(b) The amount allocated under subparagraph division (a)
14shall not exceed the amount equal to the amount certified to
15the county auditor under section 403.19 for the fiscal year in
16which the claim is paid, after deduction of the amount of other
17revenues committed for payment on that amount for the fiscal
18year. The amount not allocated as a result of the operation of
19this subparagraph division (b) shall be allocated to and paid
20into the fund for the taxing authority as taxes by or for the
21taxing authority in the manner provided in subparagraph (1).
22 NEW SUBSECTION. 8. This section is repealed July 1, 2029.
23 Sec. 113. EFFECTIVE DATE. The following take effect July
241, 2029:
251. The section of this division of this Act amending section
26331.512.
272. The section of this division of this Act amending section
28331.559.
29DIVISION XXIII
30SCHOOL FOUNDATION PERCENTAGE
31 Sec. 114. Section 257.1, subsection 2, paragraph b, Code
322021, is amended to read as follows:
33b. For the budget year commencing July 1, 1999, and for
34each succeeding budget year beginning before July 1, 2022,
35 the regular program foundation base per pupil is eighty-seven
-54-1and five-tenths percent of the regular program state cost per
2pupil. For the budget year commencing July 1, 2022, and for
3each succeeding budget year, the regular program foundation
4base per pupil is eighty-eight and four-tenths percent of the
5regular program state cost per pupil. For the budget year
6commencing July 1, 1991, and for each succeeding budget year
7the special education support services foundation base is
8seventy-nine percent of the special education support services
9state cost per pupil. The combined foundation base is the sum
10of the regular program foundation base, the special education
11support services foundation base, the total teacher salary
12supplement district cost, the total professional development
13supplement district cost, the total early intervention
14supplement district cost, the total teacher leadership
15supplement district cost, the total area education agency
16teacher salary supplement district cost, and the total area
17education agency professional development supplement district
18cost.
19 Sec. 115. Section 257.3, subsection 1, paragraph d, Code
202021, is amended by striking the paragraph.
21 Sec. 116. EFFECTIVE DATE. The section of this division of
22this Act amending section 257.3, subsection 1, paragraph “d”,
23takes effect July 1, 2022.
24DIVISION XXIV
25PUBLIC EDUCATION AND RECREATION TAX LEVY
26 Sec. 117. Section 276.10, subsection 1, Code 2021, is
27amended to read as follows:
281. The board of directors of a local school district
29may establish a community education program for schools in
30the district and provide for the general supervision of the
31program. Financial support for the program shall may be
32provided from funds raised pursuant to chapter 300 received by
33the school district under chapter 423F and from any private
34funds and any federal funds made available for the purpose of
35implementing this chapter. The program which recognizes that
-55-1the schools belong to the people and which shall be centered
2in the schools may include but shall not be limited to the use
3of the school facilities day and night, year round including
4weekends and regular school vacation periods for educational,
5recreational, cultural, and other community services and
6programs for all age, ethnic, and socioeconomic groups residing
7in the community.
8 Sec. 118. Section 278.1, subsection 1, paragraph e, Code
92021, is amended to read as follows:
10e. Direct the transfer of any surplus in the debt service
11fund, physical plant and equipment levy fund, or other capital
12project funds, or public education and recreation levy fund to
13the general fund.
14 Sec. 119. Section 298A.6, Code 2021, is amended to read as
15follows:
16298A.6 Public education and recreation levy fund.
17The public education and recreation levy fund is a special
18revenue fund. A public education and recreation levy fund
19must be established in any school corporation which levies
20 levied the tax authorized under section 300.2, Code 2021, or
21which receives received revenue from a chapter 28E agreement
22authorized under section 300.1, Code 2021. Moneys available in
23the fund at the conclusion of the fiscal year beginning July 1,
242023, and ending June 30, 2024, shall be expended by the school
25corporation for the purposes authorized under chapter 300, Code
262021.
27 Sec. 120. Section 300.2, Code 2021, is amended by adding the
28following new subsection:
29 NEW SUBSECTION. 4. a. A levy under this chapter shall not
30be approved by the voters on or after the effective date of
31this division of this Act.
32b. If the levy has not been discontinued under section
33300.3, the authorization to impose the levy under this chapter
34shall terminate July 1, 2024.
35c. Notwithstanding subsection 2, including a proposition
-56-1approved at an election held before the effective date of this
2division of this Act, the rate of a levy imposed by a board of
3directors under this chapter for the fiscal year beginning July
41, 2023, shall not exceed one-half of the levy rate imposed by
5the board of directors for the fiscal year beginning July 1,
62022.
7 Sec. 121. Section 423F.3, subsection 1, paragraph c, Code
82021, is amended by striking the paragraph.
9 Sec. 122. Section 423F.5, subsection 1, Code 2021, is
10amended to read as follows:
111. A school district shall include as part of its financial
12audit for the budget year beginning July 1, 2007, and for
13each subsequent budget year the amount received during the
14year pursuant to chapter 423E or this chapter, as applicable.
15In addition, the financial audit shall include the amount
16of bond levies, and physical plant and equipment levy, and
17public educational and recreational levy reduced as a result
18of the moneys received under chapter 423E or this chapter,
19as applicable. The amount of the reductions shall be stated
20in terms of dollars and cents per one thousand dollars of
21valuation and in total amount of property tax dollars. Also
22included shall be an accounting of the amount of moneys
23received which were spent for infrastructure purposes pursuant
24to chapter 423E or this chapter, as applicable.
25 Sec. 123. REPEAL. Sections 276.11 and 276.12, Code 2021,
26are repealed.
27 Sec. 124. REPEAL. Chapter 300, Code 2021, is repealed.
28 Sec. 125. EFFECTIVE DATE. Except as otherwise provided
29in this division of this Act, this division of this Act takes
30effect July 1, 2024.
31 Sec. 126. EFFECTIVE DATE. The following, being deemed of
32immediate importance, takes effect upon enactment:
33The section of this division of this Act enacting section
34300.2, subsection 4.
35 Sec. 127. APPLICABILITY. Except for the section of this
-57-1division of this Act enacting section 300.2, subsection 4, this
2division of this Act applies to fiscal years beginning on or
3after July 1, 2024.
4DIVISION XXV
5ELDERLY PROPERTY TAX CREDIT
6 Sec. 128. Section 25B.7, subsection 2, paragraph b, Code
72021, is amended to read as follows:
8b. Low-income property tax credit and elderly and disabled
9property tax credit pursuant to sections 425.16 through 425.40,
10subject to the limitation of 41, paragraph “b”.
11 Sec. 129. Section 425.17, subsection 2, Code 2021, is
12amended to read as follows:
132. a. “Claimant” means either any of the following:
14(1) A person filing a claim for credit or reimbursement
15 under this subchapter who has attained the age of sixty-five
16years but who has not attained the age of seventy years on
17or before December 31 of the base year or, a person filing a
18claim for credit or reimbursement under this subchapter who
19is totally disabled and was totally disabled on or before
20December 31 of the base year, or a person filing a claim for
21reimbursement under this subchapter who has attained the age of
22sixty-five years on or before December 31 of the base year and
23who is domiciled in this state at the time the claim is filed or
24at the time of the person’s death in the case of a claim filed
25by the executor or administrator of the claimant’s estate.
26(2) A person filing a claim for credit or reimbursement
27under this subchapter who has attained the age of twenty-three
28years on or before December 31 of the base year or was a head
29of household on December 31 of the base year, as defined in
30the Internal Revenue Code, but has not attained the age or
31disability status described in this paragraph “a”, subparagraph
32(1) or the age status and eligibility criteria of subparagraph
33(3), and is domiciled in this state at the time the claim is
34filed or at the time of the person’s death in the case of a
35claim filed by the executor or administrator of the claimant’s
-58-1estate, and was not claimed as a dependent on any other
2person’s tax return for the base year.
3(3) A person filing a claim for credit under this subchapter
4who has attained the age of seventy years on or before December
531 of the base year, who has a household income of less than
6two hundred fifty percent of the federal poverty level, as
7defined by the most recently revised poverty income guidelines
8published by the United States department of health and human
9services, and is domiciled in this state at the time the claim
10is filed or at the time of the person’s death in the case of a
11claim filed by the executor or administrator of the claimant’s
12estate.
13b. “Claimant” under paragraph “a”, subparagraph (1) or(2),
14 includes a vendee in possession under a contract for deed and
15may include one or more joint tenants or tenants in common.
16In the case of a claim for rent constituting property taxes
17paid, the claimant shall have rented the property during any
18part of the base year. In the case of a claim for property
19taxes due, the claimant shall have occupied the property during
20any part of the fiscal year beginning July 1 of the base year.
21If a homestead is occupied by two or more persons, and more
22than one person is able to qualify as a claimant, the persons
23may each file a claim based upon each person’s income and rent
24constituting property taxes paid or property taxes due.
25 Sec. 130. Section 425.23, subsection 1, paragraph a,
26unnumbered paragraph 1, Code 2021, is amended to read as
27follows:
28The tentative credit or reimbursement for a claimant
29described in section 425.17, subsection 2, paragraph “a”,
30subparagraphs subparagraph (1) and (2), if no appropriation is
31made to the fund created in section 425.40 shall be determined
32in accordance with the following schedule:
33 Sec. 131. Section 425.23, subsection 1, Code 2021, is
34amended by adding the following new paragraph:
35 NEW PARAGRAPH. c. The tentative credit for a claimant
-59-1described in section 425.17, subsection 2, paragraph “a”,
2subparagraph (3), shall be the greater of the following:
3(1) The amount of the credit under the schedule specified
4in paragraph “a” of this subsection as if the claimant was a
5claimant as defined in section 425.17, subsection 2, paragraph
6“a”, subparagraph (1), filing for a credit under paragraph “a”
7of this subsection.
8(2) The difference between the actual amount of property
9taxes due on the homestead during the fiscal year next
10following the base year minus the actual amount of property
11taxes due on the homestead during the first fiscal year for
12which the claimant filed a claim for a credit calculated under
13this paragraph “c” and for which the property taxes due on the
14homestead were calculated on an assessed valuation that was
15not a partial assessment and if the claimant has filed for the
16credit calculated under this paragraph “c” for each of the
17subsequent fiscal years after the first credit claimed.
18 Sec. 132. Section 425.23, subsection 4, paragraph a, Code
192021, is amended to read as follows:
20a. For the base year beginning in the 1999 calendar year
21and for each subsequent base year, the dollar amounts set
22forth in subsections subsection 1, paragraphs “a” and “b”, and
23subsection 3 shall be multiplied by the cumulative adjustment
24factor for that base year. “Cumulative adjustment factor” means
25the product of the annual adjustment factor for the 1998 base
26year and all annual adjustment factors for subsequent base
27years. The cumulative adjustment factor applies to the base
28year beginning in the calendar year for which the latest annual
29adjustment factor has been determined.
30 Sec. 133. Section 425.24, Code 2021, is amended to read as
31follows:
32425.24 Maximum property tax for purpose of credit or
33reimbursement.
34In For claimants under section 425.17, subsection 2,
35paragraph “a”, subparagraphs (1) and (2), and for the
-60-1calculation under section 425.23, subsection 1, paragraph “c”,
2subparagraph (1), in any case in which property taxes due or
3rent constituting property taxes paid for any household exceeds
4one thousand dollars, the amount of property taxes due or rent
5constituting property taxes paid shall be deemed to have been
6one thousand dollars for purposes of this subchapter.
7 Sec. 134. Section 425.39, subsection 1, as amended by 2021
8Iowa Acts, House File 368, section 33, is amended to read as
9follows:
101. a. The elderly and disabled property tax credit fund is
11created. There is appropriated annually from the general fund
12of the state to the department of revenue to be credited to the
13elderly and disabled property tax credit fund, from funds not
14otherwise appropriated, an amount sufficient to implement this
15subchapter for credits for property taxes due for claimants
16described in section 425.17, subsection 2, paragraph “a”,
17subparagraph subparagraphs (1) and (3), subject to paragraph
18“b”.
19b. Regardless of the amount of the credit determined under
20section 425.23, subsection 1, paragraph “c”, the amount paid by
21the director of revenue to each county treasurer for credits
22for claimants described under section 425.17, subsection 2,
23paragraph “a”, subparagraph (3), shall not exceed the amount
24calculated for the claimant under section 425.23, subsection 1,
25paragraph “c”, subparagraph (1), and section 25B.7, subsection
261, shall not apply to the amount of the credit in excess of the
27amount paid by the director of revenue.
28 Sec. 135. APPLICABILITY. This division of this Act applies
29to claims under chapter 425, subchapter II, filed on or after
30January 1, 2022.
31DIVISION XXVI
32TRANSIT FUNDING
33 Sec. 136. Section 28M.3, subsection 1, Code 2021, is amended
34to read as follows:
351. A regional transit district shall have all the rights,
-61-1powers, and duties of a county enterprise pursuant to sections
2331.462 through 331.469 as they relate to the purpose for
3which the regional transit district is created, including
4the authority to issue revenue bonds for the establishment,
5construction, reconstruction, repair, equipping, remodeling,
6extension, maintenance, and operation of works, vehicles, and
7facilities of a regional transit district. In addition, a
8regional transit district, with the approval of the board of
9supervisors, may issue general obligation bonds as an essential
10county purpose pursuant to chapter 331, subchapter IV, part 3,
11for the establishment, construction, reconstruction, repair,
12equipping, remodeling, extension, maintenance, and operation of
13works, vehicles, and facilities of a regional transit district.
14Such general obligation bonds are payable from the property tax
15levy authorized in section 28M.5 and from the transit hotel and
16motel tax imposed under section 423A.4, subsection 1, paragraph
17“b”, if applicable.
18 Sec. 137. Section 28M.4, subsection 3, Code 2021, is amended
19to read as follows:
203. A commission shall adopt and certify an annual budget
21for the regional transit district. A commission in its budget
22shall allocate the revenue responsibilities of each county and
23city participating in the regional transit district, subject
24to reductions in the maximum authorized property tax levy
25rate under section 28M.5, if applicable. A commission shall
26be considered a municipality for purposes of adopting and
27certifying a budget pursuant to chapter 24.
28 Sec. 138. Section 28M.4, Code 2021, is amended by adding the
29following new subsection:
30 NEW SUBSECTION. 4A. A commission may, following approval at
31election, impose a transit hotel and motel tax under section
32423A.4, subsection 1, paragraph “b”.
33 Sec. 139. Section 28M.4, subsections 5 and 6, Code 2021, are
34amended to read as follows:
355. A commission shall levy for the tax under section 28M.5
-62-1 and shall control any tax revenues paid to the regional transit
2district the commission administers and, including all moneys
3derived from the operation of the regional transit district,
4a transit hotel and motel tax imposed under section 423A.4,
5subsection 1, paragraph “b”, the sale of its the district’s
6 property, interest on investments, or from any other source
7related to the regional transit district.
86. Tax revenues collected from a regional transit district
9levy or a transit hotel and motel tax under section 423A.4,
10subsection 1, paragraph “b”, shall be held by the county
11treasurer. Before the fifteenth day of each month, the county
12treasurer shall send the amount collected for each fund through
13the last day of the preceding month for direct deposit into
14the depository and account designated by the commission. The
15county treasurer shall send a notice to the secretary of the
16commission or the secretary’s designee stating the amount
17deposited, the date, the amount to be credited to each fund
18according to the budget, and the source of the revenue.
19 Sec. 140. Section 28M.5, subsections 1 and 4, Code 2021, are
20amended to read as follows:
211. a. The commission, with the approval of the board of
22supervisors of participating counties and the city council of
23participating cities in the chapter 28E agreement, may, subject
24to the reductions required under paragraph “b”, levy annually a
25tax not to exceed ninety-five cents per thousand dollars of the
26assessed value of all taxable property in a regional transit
27district to the extent provided in this section. The chapter
2828E agreement may authorize the commission to levy the tax at
29different rates within the participating cities and counties in
30amounts sufficient to meet the revenue responsibilities of such
31cities and counties as allocated in the budget adopted by the
32commission. However, for a city participating in a regional
33transit district, the total of all the tax levies imposed in
34the city pursuant to section 384.12, subsection 10, and this
35section shall not exceed the aggregate of ninety-five cents per
-63-1thousand dollars of the assessed value of all taxable property
2in the participating city or the levy rate determined under
3paragraph “b”, whichever is less.
4b. (1) If a regional transit district imposes a transit
5hotel and motel tax under section 423A.4, subsection 1,
6paragraph “b”, the maximum levy rate authorized under this
7section shall be reduced as provided in this paragraph. For
8each fiscal year beginning on or after July 1 following the
9first calendar year for which the transit hotel and motel
10tax is imposed in the regional transit district, and until
11subparagraph (4) applies, the levy rate imposed under this
12section shall not exceed a rate equal to the rate that would
13be required for the fiscal year beginning July 1 following the
14election approving the transit hotel and motel tax to collect
15an amount equal to the property taxes collected by the regional
16transit district for the fiscal year beginning July 1 following
17the election approving the transit hotel and motel tax minus
18the amount of transit hotel and motel tax revenue received by
19the regional transit district for the first calendar year for
20which the transit hotel and motel tax is imposed.
21(2) If the regional transit district authorizes the
22commission to levy the tax at different rates within the
23participating cities and counties, as authorized under
24paragraph “a”, the levy rate reduction required under this
25paragraph shall be applied by the department of management
26to each participating city and county based upon the revenue
27responsibilities of such cities and counties as provided in the
28chapter 28E agreement on the date the transit hotel and motel
29tax is approved at election.
30(3) If a regional transit district increases the rate of the
31transit hotel and motel tax, further reductions in the maximum
32authorized levy rate under this section shall be implemented
33in the same manner as provided under subparagraphs (1) and (2)
34for the reductions following initial imposition of the transit
35hotel and motel tax.
-64- 1(4) If the regional transit district repeals the transit
2hotel and motel tax, the maximum authorized levy rate shall be
3ninety-five cents per thousand dollars of the assessed value
4for fiscal years beginning after the date of termination under
5section 423A.4, unless the transit hotel and motel tax is
6reinstated.
74. The proceeds of the tax levy and other authorized
8revenues of the regional transit district shall be used for
9the operation and maintenance of a regional transit district,
10for payment of debt obligations of the district, and for the
11creation of a reserve fund. The commission may divide the
12territory of a regional transit district outside the boundaries
13of a city into separate service areas and impose a regional
14transit district levy not to exceed the maximum rate authorized
15by this section in each service area.
16 Sec. 141. Section 303.52, subsection 4, paragraph a, Code
172021, is amended to read as follows:
18a. The board of trustees may by ordinance impose a local
19 hotel and motel tax in accordance with chapter 423A.
20 Sec. 142. Section 331.402, subsection 2, paragraph f, Code
212021, is amended to read as follows:
22f. Impose a local hotel and motel tax in accordance with
23chapter 423A.
24 Sec. 143. Section 384.12, subsection 10, Code 2021, is
25amended to read as follows:
2610. a. A tax for the operation and maintenance of a
27municipal transit system or for operation and maintenance of a
28regional transit district, and for the creation of a reserve
29fund for the system or district, in an amount not to exceed
30ninety-five cents per thousand dollars of assessed value
31each year or the levy rate determined under paragraph “b”,
32if applicable, when the revenues from the transit system or
33district are insufficient for such purposes.
34b. (1) If the city participates in a regional transit
35district under chapter 28M that imposes a transit hotel and
-65-1motel tax under section 423A.4, the maximum levy rate shall be
2the levy rate determined under section 28M.5, subsection 1,
3paragraph “b”.
4(2) (a) If the city imposes a transit hotel and motel tax
5under section 423A.4, the maximum levy rate shall be reduced as
6provided in this subparagraph. For each fiscal year beginning
7on or after July 1 following the first calendar year for which
8the transit hotel and motel tax is imposed in the city, and
9until subparagraph division (c) applies, the levy rate imposed
10under this subsection shall not exceed a rate equal to the rate
11that would be required for the fiscal year beginning July 1
12following the election approving the transit hotel and motel
13tax to collect an amount equal to the property taxes collected
14by the city under this subsection for the fiscal year beginning
15July 1 following the election approving the transit hotel and
16motel tax minus the amount of transit hotel and motel tax
17revenue received by the city for the first calendar year for
18which the transit hotel and motel tax is imposed.
19(b) If a city increases the rate of the transit hotel and
20motel tax, further reductions in the maximum authorized levy
21rate under this subsection shall be implemented in the same
22manner as provided under subparagraph division (a) for the
23reduction following initial imposition of the transit hotel and
24motel tax.
25(c) If the city repeals the transit hotel and motel tax,
26the maximum authorized levy rate shall be ninety-five cents
27per thousand dollars of the assessed value for fiscal years
28beginning after the date of termination under section 423A.4,
29unless the transit hotel and motel tax is reinstated.
30 Sec. 144. Section 423A.4, Code 2021, is amended to read as
31follows:
32423A.4 Locally imposed Local hotel and motel tax — transit
33hotel and motel tax.
341. a. A city, a county, or a land use district created
35under chapter 303, subchapter IV, may impose, by ordinance of
-66-1the city council or by resolution of the board of supervisors
2or by ordinance of the board of trustees, a local hotel and
3motel tax, at a rate not to exceed seven percent, which shall
4be imposed in increments of one or more full percentage points
5upon the sales price from the renting of lodging. The tax
6when imposed by a city shall apply only within the corporate
7boundaries of that city, when imposed by a county shall apply
8only outside incorporated areas within that county, and when
9imposed by a land use district shall apply only within the
10corporate boundaries of that district. A local hotel and motel
11tax imposed by a city or county shall not be imposed within the
12corporate boundaries of a land use district during any period
13of time that the land use district is imposing a local hotel
14and motel tax.
15b. A regional transit district or a city that is not
16participating in a regional transit district may impose, by
17resolution of the regional transit district commission or by
18ordinance of the city council, a transit hotel and motel tax,
19at a rate not to exceed five percent, which shall be imposed
20in increments of one or more full percentage points upon the
21sales price from the renting of lodging. The tax when imposed
22by a regional transit district shall apply only within the
23boundaries of the regional transit district and may be imposed
24in addition to any tax imposed under paragraph “a”. The tax
25when imposed by a city shall apply only within the corporate
26boundaries of that city and may be imposed in addition to any
27tax imposed under paragraph “a”.
282. Within ten days of the election at which a majority of
29those voting on the question favors the imposition, repeal,
30or change in the rate of the local hotel and motel tax or the
31transit hotel and motel tax, the county auditor shall give
32written notice by sending a copy of the abstract of votes from
33the favorable election to the director of revenue.
343. A local hotel and motel tax imposed by a city, county,
35or land use district shall be imposed on January 1 or July
-67-11, following the notification of the director of revenue. A
2transit hotel and motel tax imposed by a regional transit
3district or a city shall be imposed on January 1, following the
4notification of the director of revenue. Once imposed, the tax
5shall remain in effect at the rate imposed for a minimum of
6one year. A local hotel and motel tax or a transit hotel and
7motel tax shall terminate only on June 30 or December 31. At
8least forty-five days prior to the tax being effective or prior
9to a revision in the tax rate or prior to the repeal of the
10tax, a city, county, or land use district, or regional transit
11district shall provide notice by mail of such action to the
12director of revenue. The director shall have the authority to
13waive the notice requirement.
144. a. A city, county, or land use district shall impose
15or repeal a hotel and motel tax or increase or reduce the
16tax rate only after an election at which a majority of those
17voting on the question favors imposition, repeal, or change
18in rate. A regional transit district or city shall impose or
19repeal a transit hotel and motel tax or increase or reduce the
20tax rate only after an election at which a majority of those
21voting on the question favors imposition, repeal, or change in
22rate. However, a local hotel and motel tax of a city or county
23shall not be repealed or reduced in rate if obligations are
24outstanding which are payable as provided in section 423A.7,
25unless funds sufficient to pay the principal, interest, and
26premium, if any, on the outstanding obligations at and prior
27to maturity have been properly set aside and pledged for that
28purpose.
29b. (1) If the local hotel and motel tax applies only within
30the corporate boundaries of a city, only the registered voters
31of the city shall be permitted to vote. The election shall be
32held at the time of the regular city election or at a special
33election called for that purpose.
34(2) If the local hotel and motel tax applies only in the
35unincorporated areas of a county or only within the corporate
-68-1boundaries of a land use district, only the registered voters
2of the unincorporated areas of the county or the registered
3voters of the land use district, as applicable, shall be
4permitted to vote. The election shall be held at the time of
5the general election or at a special election called for that
6purpose.
7(3) For a transit hotel and motel tax imposed by a regional
8transit district, only the registered voters of the regional
9transit district shall be permitted to vote. The election
10shall be held at the time of the general election or the
11regular city election.
12(4) For a transit hotel and motel tax imposed by a city,
13only the registered voters of the city shall be permitted to
14vote. The election shall be held at the time of the general
15election or the regular city election.
165. The locally imposed local hotel and motel tax and the
17transit hotel and motel tax shall be collected and remitted as
18provided in section 423A.5A.
19 Sec. 145. Section 423A.5A, subsection 3, Code 2021, is
20amended to read as follows:
213. Unless otherwise provided in this section, the
22state-imposed tax under section 423A.3 and any locally, the
23local hotel and motel tax imposed tax under section 423A.4, and
24the transit hotel and motel tax imposed under section 423A.4,
25 shall be collected by the lodging provider from the user of
26that lodging and shall be remitted to the department. The
27lodging provider shall add the state-imposed tax to the sales
28price of the lodging and the tax, when collected, shall be
29stated as a distinct item, separate and apart from the sales
30price of the lodging and from the locally imposed tax taxes
31imposed under section 423A.4, if any. The lodging provider
32shall add the locally imposed each tax imposed under section
33423A.4, if any, to the sales price of the lodging and the tax,
34when collected, shall be stated as a distinct item, separate
35and apart from the sales price of the lodging, and from the
-69-1state-imposed tax, and from the other taxes imposed under
2section 423A.4.
3 Sec. 146. Section 423A.6, subsections 1, 3, and 4, Code
42021, are amended to read as follows:
51. The director of revenue shall administer the state,
6 and local, and transit hotel and motel tax taxes as nearly as
7possible in conjunction with the administration of the state
8sales tax law, except that portion of the law which implements
9the streamlined sales and use tax agreement. The director
10shall provide appropriate forms, or provide on the regular
11state tax forms, for reporting state, and local, and transit
12 hotel and motel tax liability. All moneys received or refunded
13one hundred eighty days after the date on which a city, county,
14or land use district, or regional transit district, terminates
15its local hotel and motel tax or transit hotel and motel tax
16 and all moneys received from the state hotel and motel tax
17shall be deposited in or withdrawn from the general fund of the
18state.
193. The director, in consultation with local officials,
20shall collect and account for a local hotel and motel tax and a
21transit hotel and motel tax and shall credit all revenues to
22the local transient guest tax fund created in section 423A.7.
23Local authorities shall not require any tax permit not required
24by the director of revenue.
254. Section 422.25, subsection 4, sections 422.30, 422.67,
26and 422.68, section 422.69, subsection 1, sections 422.70,
27422.71, 422.72, 422.74, and 422.75, section 423.14, subsection
281, and sections 423.23, 423.24, 423.25, 423.31, 423.33,
29423.35, 423.37 through 423.42, and 423.47, consistent with the
30provisions of this chapter, apply with respect to the taxes
31authorized under this chapter, in the same manner and with
32the same effect as if the state, and local, and transit hotel
33and motel taxes were retail sales taxes within the meaning of
34those statutes. Notwithstanding this subsection, the director
35shall provide for quarterly filing of returns and for other
-70-1than quarterly filing of returns both as prescribed in section
2423.31. The director may require all persons who are engaged
3in the business of deriving any sales price subject to tax
4under this chapter to register with the department. All taxes
5collected under this chapter by a retailer, lodging provider,
6lodging facilitator, lodging platform, or any other person are
7deemed to be held in trust for the state of Iowa and the local
8jurisdictions imposing the taxes.
9 Sec. 147. Section 423A.7, subsections 2 and 3, Code 2021,
10are amended to read as follows:
112. All moneys in the local transient guest tax fund shall
12be remitted at least quarterly by the department, pursuant to
13rules of the director of revenue, to each city in the amount
14collected under section 423A.4, subsection 1, paragraph “a”,
15 from businesses in that city, to each county in the amount
16collected under section 423A.4, subsection 1, paragraph “a”,
17 from businesses in the unincorporated areas of the county, and
18 to each land use district in the amount collected under section
19423A.4, subsection 1, paragraph “a”, from businesses in that
20land use district, to each regional transit district in the
21amount collected under section 423A.4, subsection 1, paragraph
22“b”, from businesses within the boundaries of the regional
23transit district and to each city in the amount collected under
24section 423A.4, subsection 1, paragraph “b”, from businesses
25in that city.
263. Moneys received by the city from this fund collected
27under section 423A.4, subsection 1, paragraph “a”, shall be
28credited to the general fund of the city, subject to the
29provisions of subsection 4.
30 Sec. 148. Section 423A.7, Code 2021, is amended by adding
31the following new subsection:
32 NEW SUBSECTION. 6. a. The revenue derived by a regional
33transit district from the transit hotel and motel tax
34authorized by section 423A.4 shall be expended exclusively for
35the purposes of the regional transit district under chapter 28M
-71-1and shall result in a reduction in the maximum levy rate for
2the regional transit district, as provided in section 28M.5,
3subsection 1, paragraph “b”. However, the amount of revenue
4derived by the regional transit district in the second calendar
5year that transit hotel and motel tax is imposed that exceeds
6the amount of revenue derived by the regional transit district
7in the first calendar year that transit hotel and motel tax
8is imposed shall be used for property tax relief for the levy
9under section 28M.5 in addition to the reduction to the levy
10rate as the result of the revenue derived in the first calendar
11year that the transit hotel and motel tax is imposed.
12b. The revenue derived by a city from the transit hotel
13and motel tax authorized by section 423A.4 shall be expended
14exclusively for the operation and maintenance of a municipal
15transit system and shall result in a reduction in the maximum
16levy rate for the city under section 384.12, subsection 10.
17However, the amount of revenue derived by the city in the
18second calendar year that transit hotel and motel tax is
19imposed that exceeds the amount of revenue derived by the
20city in the first calendar year that transit hotel and motel
21tax is imposed shall be used for property tax relief for the
22levy under section 384.12, subsection 10, in addition to the
23reduction to the levy rate as the result of the revenue derived
24in the first calendar year that the transit hotel and motel tax
25is imposed.
26EXPLANATION
27The inclusion of this explanation does not constitute agreement with
28the explanation’s substance by the members of the general assembly.
29This bill relates to state and local revenue and finance by
30modifying future tax contingencies, the state individual and
31corporate income taxes, the state inheritance tax, provides for
32housing incentives, makes transfers, and provides for other
33properly related matters.
34DIVISION I — FUTURE TAX CONTINGENCIES. The bill amends 2018
35Iowa Acts, chapter 1161, section 133 (trigger), by striking
-72-1the two conditions necessary for the trigger to occur, and
2specifies the provisions in 2018 Iowa Acts, chapter 1161,
3sections 99-132, take effect January 1, 2023.
4Currently, the two conditions are necessary for the trigger
5to occur include net general fund revenues for the fiscal year
6ending June 30, 2022, equaling or exceeding $8.3146 billion,
7and also equaling or exceeding 104 percent of the net general
8fund revenues for the fiscal year ending June 30, 2021. If
9these two conditions are not satisfied, current law institutes
10the changes for tax years beginning on or after the January 1
11following the first fiscal year for which the two conditions
12do occur. By striking the “trigger”, the bill sets in motion
13numerous tax changes for tax years beginning on or after
14January 1, 2023, described below.
15INDIVIDUAL INCOME TAX. The tax changes include reducing the
16number of individual income tax brackets from nine to four, and
17modifying the taxable income amounts and tax rates as follows:
18Income over:But not over:Tax Rate:
191)$0$6,0004.40%
202)$6,000$30,0004.82%
213)$30,000$75,0005.70%
224)$75,0006.50%
23For a married couple filing a joint return, the taxable
24income amounts in each bracket above are doubled. Also, the
25taxable income amounts in each bracket above will be indexed to
26inflation and increased in future tax years, beginning in the
27tax year following the 2023 tax year.
28INDIVIDUAL INCOME TAX CALCULATION. Under current law, the
29starting point for computing the Iowa individual income tax is
30federal adjusted gross income before the net operating loss
31deduction, which is generally a taxpayer’s gross income minus
32several deductions. From that point, Iowa requires several
33adjustments and then provides taxpayers with a deduction
34for federal income taxes paid, and the option to deduct a
35standard deduction or itemized deductions. The bill changes
-73-1the starting point for computing the individual income tax
2to federal taxable income, which includes all deductions and
3adjustments taken at the federal level in computing tax,
4including a standard deduction or itemized deductions, and the
5qualified business income deduction allowed for certain income
6earned from a pass-through entity. Because the starting point
7changes to federal taxable income, and federal law does not
8provide for the filing status of married filing separately
9on a combined return, the bill repeals that filing status
10option for Iowa tax purposes. Because net operating loss is
11no longer calculated at the state level, the bill requires a
12taxpayer to add back any federal net operating loss deduction
13carried over from a taxable year beginning prior to the 2023
14tax year, but allows taxpayers to deduct any remaining Iowa net
15operating loss from a prior taxable year. The bill repeals the
16individual alternative minimum tax (AMT), allows an individual
17to claim any remaining AMT credit against the individual’s
18regular tax liability for the 2023 tax year, and then repeals
19the AMT credit in the tax year following the 2023 tax year.
20The bill repeals most Iowa-specific deductions, exemptions,
21and adjustments currently available when computing net income
22and taxable income under Iowa law, including the Iowa optional
23standard deduction and all itemized deductions, and the ability
24to deduct federal income taxes, except for a one-year phase
25out in the 2023 tax year for taxes paid, or refunds received,
26that relate to a prior year. The bill maintains the add-back
27for income from securities that are federally exempt but not
28state-exempt, and for bonus depreciation amounts. The bill
29maintains the general pension exclusion and the deduction
30for income from federal securities. The bill maintains the
31deduction for contributions to the Iowa 529 plan, the Iowa ABLE
32plan, a first-time homebuyer savings account, and an individual
33development account. The bill also maintains the deductions
34for military pension income, military active duty pay, social
35security retirement benefits, certain payments received for
-74-1providing unskilled in-home health care, certain amounts
2received from the veterans trust fund, victim compensation
3awards, biodiesel production refunds, certain wages paid
4to individuals with disabilities or individuals previously
5convicted of a felony, certain organ donations, and Segal
6AmeriCorps education award payments. The bill modifies the
7existing deduction for health insurance payments in Code
8section 422.7(29) to make the deduction only applicable to
9taxpayers who are at least 65 years old and who have net
10income below $100,000. The bill also modifies the existing
11capital gain deduction in Code section 422.7(21) to restrict
12the deduction to the sale of real property used in farming
13businesses by permitting the taxpayer to take the deduction
14if either of the following apply: the taxpayer materially
15participated in the farming business for at least 10 years and
16held the real property for at least 10 years; or the taxpayer
17sold the real property to a relative. The bill expands the
18definition of “relative” to include an entity in which a
19relative of the taxpayer has a legal or equitable interest in
20the entity as an owner, member, partner, or beneficiary. The
21bill provides a new deduction for any income of an employee
22resulting from the payment by an employer, whether paid to
23the employee or a lender, of principal or interest on the
24employee’s qualified education loan. The bill also modifies
25the calculation of net income for purposes of the alternate
26tax calculation in Code section 422.5(3) and (3B), and the tax
27return filing thresholds in Code section 422.13, to require
28that any amount of itemized deduction, standard deduction,
29personal exemption deduction, or qualified business income
30deduction that was allowed in computing federal taxable income
31shall be added back.
32CORPORATE INCOME TAX AND FRANCHISE TAX CALCULATION. Under
33current law, the starting point for calculating the corporate
34income tax and franchise tax is federal taxable income before
35the net operating loss deduction, because net operating loss is
-75-1calculated at the state level. The bill repeals the separate
2calculation of net operating loss at the state level. As a
3result, the bill requires taxpayers to add back any federal
4net operating loss deduction carried over from a taxable year
5beginning prior to the trigger year, but allows taxpayers to
6deduct any remaining Iowa net operating loss from a prior
7taxable year. The bill also repeals most Iowa-specific
8deductions, exemptions, and adjustments currently available
9when computing net income and taxable income under Iowa law.
10The bill maintains the add-back for income from securities
11that are federally exempt but not state exempt, and for bonus
12depreciation amounts. The bill maintains the deductions for
13income from federal securities, for foreign dividend and
14subpart F income, for certain wages paid to individuals with
15disabilities or individuals previously convicted of a felony,
16and for biodiesel production refunds.
17DIVISION II — CHILD DEPENDENT AND DEVELOPMENT TAX CREDITS.
18 Currently, an individual may claim 30 percent of the federal
19child and dependent care credit provided in section 21 of
20the Internal Revenue Code against the individual income tax
21if the individual’s net income is less than $45,000. Under
22the bill, an individual may claim 30 percent of the federal
23child and dependent care credit provided in section 21 of the
24Internal Revenue Code against the individual income tax if the
25individual’s net income is less than $90,000.
26The bill increases the income threshold determining the
27eligibility of a taxpayer for the early childhood development
28tax credit. The bill increases the eligibility threshold from
29a taxpayer whose net income is less than $45,000 per year to
30less than $90,000 per year. By increasing the eligibility
31threshold, taxpayers whose net income is less than $90,000 are
32now eligible to take the early childhood development tax credit
33equaling 25 percent of the first $1,000 which the taxpayer has
34paid to others for early childhood development expenses for
35each dependent ages three through five.
-76- 1The division applies retroactively to tax years beginning on
2or after January 1, 2021.
3DIVISION III — COVID-19 RELATED GRANTS — TAXATION. The
4bill excludes from the calculation of Iowa individual and
5corporate income tax any qualifying COVID-19 grant issued to an
6individual or business by the economic development authority,
7the Iowa finance authority, or the department of agriculture
8and land stewardship.
9Under the bill, “qualifying COVID-19 grant” includes any
10grant that was issued between March 17, 2020, and December
1131, 2021, identified by the department by rule under a
12grant program created to primarily provide COVID-19 related
13financial assistance to economically impacted individuals and
14businesses located in this state, and administered by the
15economic development authority, Iowa finance authority, or the
16department of agriculture and land stewardship.
17Under current law, financial assistance grants provided to
18small businesses by the economic development authority under
19the Iowa small business COVID-19 relief grant program are
20excluded from the calculation of Iowa individual and corporate
21income tax.
22The COVID-19 grant income tax exclusion provided in the bill
23is repealed on January 1, 2024, and does not apply to tax years
24beginning on or after that date.
25The division takes effect upon enactment and applies
26retroactively to March 17, 2020, for tax years ending on or
27after that date.
28DIVISION IV — FEDERAL PAYCHECK PROTECTION PROGRAM. Under
29current law, for the tax year 2020 and later, Iowa law fully
30conforms with the federal treatment of forgiven paycheck
31protection program loans and excludes such amounts from net
32income and allows certain deductions for business expenses
33paid using those loans. For fiscal-year filers who received
34paycheck protection program loans during the 2019 tax year,
35current law excludes such amounts from net income, but does
-77-1not allow certain deductions for business expenses paid using
2those loans. The bill fully conforms with federal law for
3those fiscal-year filers who previously were excluded from such
4conformity and allows such filers to take business expense
5deductions using federal paycheck protection program loan
6proceeds that were forgiven.
7The division takes effect upon enactment.
8DIVISION V — INSTALLMENT SALES — CAPITAL GAINS.
9 Currently, the capital gain individual income tax deduction is
10governed by Code section 422.7(21). The capital gain deduction
11in Code section 422.7(21) is amended when the trigger occurs
12in 2018 Iowa Acts, chapter 1161, section 113. The capital
13gain deduction in 2018 Iowa Acts, chapter 1161, section 113,
14was further amended by 2019 Iowa Acts, chapter 162. Division
15I of the bill removes the triggers and specifies that 2018
16Iowa Acts, chapter 1161, sections 99 through 132, take effect
17January 1, 2023, including the changes to the capital gain
18deduction mentioned above. The bill specifies that for
19sales occurring on or after January 1, 2023, the capital gain
20deduction is governed by 2019 Iowa Acts, chapter 162, and
21for sales occurring prior to January 1, 2023, the capital
22gain deduction is governed by existing law in Code section
23422.7(21).
24DIVISION VI — STATE INHERITANCE TAX. The bill
25simultaneously increases the size of an estate exempted from
26the state inheritance tax and reduces the inheritance tax rates
27retroactively to January 1, 2021. The bill then repeals the
28state inheritance tax effective January 1, 2024, for property
29of estates of decedents dying on or after January 1, 2024.
30The bill increases the size of an estate exempt from the
31state inheritance tax from $25,000 to $300,000 for decedents
32dying on or after January 1, 2021, but before January 1, 2022,
33from $300,000 to $600,000, for decedents dying on or after
34January 1, 2022, but before January 1, 2023, and from $600,000
35to $1 million, for decedents dying on or after January 1, 2023,
-78-1but before January 1, 2024.
2For decedents dying on or after January 1, 2021, but before
3January 1, 2022, the rates of tax applicable to the state
4inheritance tax are reduced 25 percent. For decedents dying on
5or after January 1, 2022, but before January 1, 2023, the rates
6of tax applicable to the state inheritance tax are reduced 50
7percent. For decedents dying on or after January 1, 2023, but
8before January 1, 2024, the rates of tax applicable to the
9state inheritance tax are reduced 75 percent.
10For decedents dying on or after January 1, 2024, the
11bill repeals the state inheritance tax and the qualified
12use inheritance tax. The bill repeals Code chapters 450
13(inheritance tax) and 450B (qualified use inheritance tax),
14effective January 1, 2034, and directs the Code editor to
15correct references in the Code and the Iowa Acts, to those Code
16chapters.
17The division takes effect upon enactment and applies
18retroactively to decendents dying on or after January 1, 2021.
19DIVISION VII — HOUSING TRUST FUND. Under current law,
2030 percent of the real estate transfer tax receipts paid by
21county recorders to the treasurer of state are transferred to
22the housing trust fund in any one fiscal year, subject to a $3
23million cap; moneys in excess of the cap are deposited in the
24general fund of the state. The bill increases the cap to $7
25million.
26DIVISION VIII — HIGH QUALITY JOBS PROGRAM — DAY CARE
27CENTERS. The bill permits the economic development authority
28to consider whether a proposed project under the high quality
29jobs program will include a licensed child care center for use
30by a business’s employees when determining the eligibility of
31the business to participate in the program.
32DIVISION IX — INVESTMENT TAX CREDITS AND INNOVATION FUND
33TAX CREDITS. Under current law, the authority must allocate $2
34million to investments in qualifying businesses and $8 million
35to equity investments in innovation funds (equity investments).
-79-1The bill limits the authority’s tax credit allocations for
2investments in qualifying businesses and equity investments
3to a maximum aggregate of $10 million. The bill requires the
4authority to determine on or before June 30 of each fiscal
5year the amount of tax credits to be allocated to each. In
6addition, any amount of tax credits allocated and not awarded
7in that fiscal year must be reallocated to either investments
8in qualifying businesses or to equity investments for the next
9fiscal year, and those tax credits do not count toward the
10maximum aggregate of $10 million. This applies to tax credits
11allocated on or after the fiscal year beginning July 1, 2021,
12and for each fiscal year thereafter.
13The bill modifies the maximum amount of an investment tax
14credit that may be issued to a natural person and the person’s
15spouse or dependent from a calendar year basis to a fiscal year
16basis. The maximum amount of tax credits that may be issued
17for equity investments in any one qualifying business is also
18modified from a calendar year to a fiscal year.
19This division of the bill is effective upon enactment.
20DIVISION X — TELEHEALTH — MENTAL HEALTH PARITY. The
21bill requires a health carrier to reimburse a health care
22professional or a facility for health care services for a
23mental health condition, illness, injury, or disease provided
24to a covered person via telehealth on the same basis and at the
25same rate as the health carrier would apply to the same health
26care services provided to the covered person by the health
27care professional or facility in person. “Health carrier” is
28defined in the bill.
29The bill amends the definition of “telehealth” to specify
30that the delivery of health care services via telehealth must
31include real-time interactive audio, video, or electronic
32media, regardless of the location of the health care
33professional or the covered person.
34The bill prohibits a health carrier from requiring an
35additional health care professional to be located in the same
-80-1room as a covered person while health care service for a mental
2health condition, illness, injury, or disease are provided via
3telehealth by another health care professional to the covered
4person.
5This division of the bill is effective upon enactment and
6applies retroactively to health care services for a mental
7health condition, illness, injury, or disease provided to a
8covered person via telehealth on or after January 1, 2021.
9DIVISION XI — HIGH QUALITY JOBS AND RENEWABLE CHEMICAL
10PRODUCTION TAX CREDITS. Division I reduces the maximum
11amount of tax credits that the economic development authority
12(authority) may allocate to the high quality jobs program for
13the fiscal year beginning July 1, 2021, and for each fiscal
14year thereafter, from $105 million to $70 million. The maximum
15amount of tax credits that the authority may allocate to the
16renewable chemical production tax credit program for the fiscal
17year beginning July 1, 2021, and ending June 30, 2022, and for
18each fiscal year thereafter is reduced from $10 million to $5
19million.
20DIVISION XII — HIGH QUALITY JOBS — ELIGIBILITY
21REQUIREMENTS. To be eligible to receive incentives or
22assistance under the high quality jobs program, a business
23cannot be in the process of reducing operations in one
24community while simultaneously apply for assistance under the
25program. Under current law, a reduction in operations within
2612 months before or after a business submits an application to
27the high quality jobs program is presumed to be a reduction
28in operations while simultaneously applying for assistance
29under the program. Under the bill, the economic development
30authority (authority) cannot presume that a reduction in
31operations is a reduction while simultaneously applying for
32assistance under the program with regard to a business that
33submits an application on or before June 30, 2022, if the
34business demonstrates to the satisfaction of the authority that
35the reduction in operations occurred after March 1, 2020, and
-81-1that it was a result of the COVID-19 pandemic. The authority
2must consider whether the benefit of the project proposed by
3the business outweighs any negative impact related to the
4reduction in operations. The business remains subject to all
5other eligibility requirements. This division of the bill is
6repealed July 1, 2022.
7DIVISION XIII — MANUFACTURING 4.0. The division
8establishes the manufacturing 4.0 technology investment
9program (program) and creates the manufacturing 4.0 technology
10investment fund (fund). “Manufacturing 4.0 technology
11investments” (investments) is defined as projects that are
12intended to lead to the adoption of, and integration of, smart
13technologies into existing manufacturing operations located
14in the state by mitigating the risk to the manufacturer of
15significant technology investments. Projects may include
16investments in specialized hardware, software, or other
17equipment intended to assist a manufacturer in increasing the
18manufacturer’s productivity, efficiency, and competitiveness.
19The fund may be administered as a revolving fund and may
20consist of any moneys appropriated for purposes of the program
21and any other moneys that are lawfully available to the
22authority. The authority must use moneys in the fund to award
23financial assistance to eligible manufacturers for investments.
24Financial assistance may include but is not limited to
25grants, loans, and forgivable loans. The requirements for a
26manufacturer to be eligible for financial assistance under the
27program are outlined in the bill.
28Eligible manufacturers must submit an application to the
29program in the manner prescribed by the economic development
30authority (authority) by rule. The authority may accept
31applications during one or more application periods during a
32fiscal year as determined by the authority. All completed
33applications must be reviewed and scored on a competitive basis
34pursuant to rules adopted by the authority. The authority may
35engage an outside technical review panel (panel) to complete a
-82-1technical review of applications. The authority board members
2appointed by the governor must review the recommendations
3of the authority and of the panel, if applicable, and
4shall approve, defer, or deny each application. In making
5recommendations to the board, the authority and the panel must
6consider the factors detailed in the bill.
7The board cannot approve an application for financial
8assistance for an investment that was made prior to the date
9of the application.
10The maximum amount of financial assistance awarded to an
11eligible manufacturer under the program cannot exceed $75,000.
12The authority must adopt rules as necessary to implement and
13administer the program.
14DIVISION XIV — ENERGY INFRASTRUCTURE REVOLVING LOAN
15PROGRAM. The division modifies Code section 476.46, alternate
16energy revolving loan program, to prohibit the Iowa energy
17center from initiating any new loans after June 30, 2021. The
18division also requires that all loan payments received after
19June 30, 2021, be deposited, and any moneys remaining in the
20alternate energy revolving loan fund after June 30, 2021,
21be transferred, to the newly created energy infrastructure
22revolving loan fund.
23The division creates an energy infrastructure revolving
24fund (fund) in the office of the treasurer of state to be
25administered by the Iowa energy center (center). Moneys in
26the fund are to be used to provide financial assistance for
27the development and construction of energy infrastructure,
28including projects that support electric or gas generation
29transmission, storage, or distribution; electric grid
30modernization; energy-sector workforce development; emergency
31preparedness for rural and underserved areas; the expansion
32of biomass, biogas, and renewable natural gas; innovative
33technologies; and the development of infrastructure for
34alternative fuel vehicles. “Energy infrastructure” is defined
35as land, buildings, physical plant and equipment, and services
-83-1directly related to the development of projects used for,
2or useful for, electricity or gas generation, transmission,
3storage, or distribution. “Financial assistance” is also
4defined in the bill.
5The center is required to establish and administer an energy
6infrastructure revolving loan program (program) to encourage
7the development of energy infrastructure within the state. An
8individual, business, rural electric cooperative, or municipal
9utility located and operating in this state is eligible for
10financial assistance under the program. With the approval
11of the center’s governing board, the economic development
12authority (authority) must determine the amount and the terms
13of all financial assistance awarded to an individual, business,
14rural electric cooperative, or municipal utility under the
15program. All agreements and administrative authority are
16vested in the center’s governing board. The authority may
17use not more than 5 percent of the moneys in the fund at the
18beginning of each fiscal year for purposes of administrative
19costs, marketing, technical assistance, and other program
20support.
21DIVISION XV — WORKFORCE HOUSING TAX INCENTIVES. Code
22section 15.119 sets an aggregate tax credit amount limit for
23certain economic development programs. Under current law, the
24workforce housing tax incentives program administered under
25Code sections 15.351 through 15.356 shall not be allocated
26more than $25 million in tax credits, and of the tax credits
27allocated to this program, $10 million is reserved for
28allocation to qualified housing projects in small cities.
29This division increases the workforce housing tax credit
30allocations from $25 million to $40 million for FY 2021-2022.
31Of the moneys allocated to workforce housing tax credits in
32FY 2021-2022, the bill increases the tax credits reserved for
33qualified housing projects in small cities from $10 million
34to $12 million. The bill decreases the workforce housing tax
35credit from $40 million to $35 million in FY 2022-2023. Of
-84-1the moneys allocated to workforce housing tax credits in FY
22022-2023, the bill increases the tax credits allocated to
3small cities from $12 million to $15 million, and reserves $5
4million of the tax credits for qualified housing projects in
5areas of the state with the largest wait list or greatest need
6as determined by the authority. Beginning with FY 2023-2024
7and each fiscal year thereafter, the bill sets the workforce
8housing tax credit allocations at $30 million, of which $15
9million shall be reserved for small cities.
10Currently, upon completion of a housing project, a housing
11business (housing developer, contractor, or nonprofit that
12completes a housing project) submits an examination of the
13project in accordance with the American institute of certified
14public accountants to the authority. In addition to an
15examination by certified public accountants, the bill requires
16the housing business to submit the following to the authority
17upon completion of a housing project: a statement of the
18final amount of the qualifying new investment for the housing
19project and any information the authority deems necessary to
20ensure compliance with the agreement between the authority and
21the housing business including any rules the authority and the
22department of revenue adopt pursuant to Code section 15.356.
23The bill also requires the authority to review the information
24submitted by the housing business prior to notifying the
25housing business of tax incentive awards.
26The bill permits the authority to establish a disaster
27housing recovery period following the declaration of a major
28disaster by the president of the United States. Currently, the
29authority may accept applications for disaster recovery housing
30projects on a continuous basis.
31Moneys available for the program may consist of moneys
32appropriated for use in the program, and any other moneys that
33are lawfully available to the economic development authority,
34including moneys transferred or deposited from other funds
35created pursuant to Code section 15.106A(1)(o).
-85- 1DIVISION XVI — BROWNFIELDS AND GRAYFIELDS. Current law
2provides that the economic development authority (authority)
3may allocate not more than $10 million in tax credits in
4a fiscal year to the brownfield redevelopment program
5(brownfields). The bill increases the maximum allocation of
6tax credits to the brownfields program from $10 million to
7$15 million. The bill provides that tax credits that are not
8awarded or that are revoked (including revoked within the
9previous five years) under brownfields may be awarded during
10the next annual application period, and those tax credits do
11not count against the tax credit maximum. Under current law,
12Code section 15.293A, redevelopment tax credits, is repealed
13on June 30, 2021. The division changes the repeal date to June
1430, 2031, and the repeal date is effective upon enactment of
15the division. Under current law, Code section 15.293B, related
16to the application, review, registration, and authorization of
17projects awarded tax credits under brownfields, is repealed on
18June 30, 2021. The division changes the repeal date to June
1930, 2031, and the repeal date is effective upon enactment of
20the division.
21DIVISION XVII — DOWNTOWN LOAN GUARANTEE PROGRAM. The bill
22creates a downtown loan guarantee program to be administered
23by the economic development authority and the Iowa finance
24authority. The purpose of the program is to encourage downtown
25businesses and banks to reinvest and reopen following the
26COVID-19 pandemic.
27In order for a loan to be guaranteed under the program,
28numerous conditions apply, including the following: the loan
29finances an eligible downtown resources center community
30catalyst building remediation grant project or main street
31Iowa challenge grant within a designated district; the loan
32finances a rehabilitation project or acquisition or refinancing
33costs associated with the project; 25 percent of the project
34cost is used for construction on the project or renovation;
35the financed project includes a housing component; the loan is
-86-1used for the construction or permanent financing of a project;
2a federally insured financial lending institution issued the
3loan; the loan does not reimburse the borrower for working
4capital or operations; and the project meets certain design
5reviews.
6The bill requires the loan to be secured by a mortgage
7against the project property, prohibits the loan guarantee to
8be transferred, and charges the lender an annual loan guarantee
9fee as set forth by rule.
10The bill limits the amount of the loan guarantee as follows:
11for a loan amount of less than or equal to $500,000, the loan
12guarantee shall not exceed 50 percent of the loan; for a
13loan amount greater than $500,000, the economic development
14authority may provide a maximum loan guarantee of up to
15$250,000.
16The economic development authority may guarantee the loan
17for up to five years, which may be extended by the authority
18for an additional five years. The authority may also deny a
19loan guarantee for any unreasonable bank loan fees or interest
20rate.
21In the event of a loss due to default, the bill requires the
22loan guarantee to proportionally pay the guarantee percentage
23of the loss to the lender.
24Moneys available for the program may consist of moneys
25appropriated for use in the program, and any other moneys that
26are lawfully available to the economic development authority,
27including moneys transferred or deposited from other funds
28created pursuant to Code section 15.106A(1)(o).
29DIVISION XVIII — DISASTER RECOVERY ASSISTANCE PROGRAM. The
30bill creates a disaster recovery housing assistance program and
31fund.
32DISASTER RECOVERY HOUSING ASSISTANCE PROGRAM — TRANSFERS.
33 The bill permits the authority to transfer unobligated moneys
34in Code section 16.46 (senior living revolving loan program
35fund), 16.47 (home and community-based services revolving loan
-87-1program fund), 16.48 (transitional housing revolving loan
2program fund), or 16.49 (community housing and services for
3persons with disabilities revolving loan program fund) to the
4disaster recovery housing assistance fund created in the bill.
5After the prior written consent and approval of the
6governor, the bill permits the executive director of the Iowa
7finance authority to transfer any unobligated moneys in any
8fund created pursuant to Code section 16.5(1)(s), for deposit
9in the fund. The bill waives the prior written consent and
10approval of the director of the department of management to
11transfer the unobligated moneys.
12After prior written approval of the governor, the bill
13permits the director of the Iowa economic development authority
14to transfer any unobligated and unencumbered moneys in any fund
15created pursuant to Code section 15.106A(1)(o), for deposit in
16the fund.
17The bill requires any transfer to be reported to the
18legislative fiscal committee of the legislative council on a
19monthly basis.
20DISASTER RECOVERY HOUSING ASSISTANCE PROGRAM — FUND. The
21bill creates a disaster recovery housing assistance fund
22(fund) within the authority. The purpose of the fund is for
23the development and operation of a forgivable loan and grant
24program for homeowners and renters with disaster-affected
25homes, and for an eviction prevention program created in the
26bill. The bill prohibits the authority from using more than
275 percent of the moneys in the fund on July 1 of a fiscal year
28for purposes of administrative costs and other program support
29during the fiscal year.
30The bill directs the authority to establish and administer
31a disaster recovery assistance program (program) and to
32use the moneys in the fund to provide forgivable loans to
33eligible homeowners and grants to eligible renters with
34disaster-affected homes. “Disaster-affected home” is defined
35in the bill as a primary residence that is destroyed or damaged
-88-1due to a natural disaster that occurs on or after the effective
2date of the division, and that is located in a county that due
3to the natural disaster is the subject of a state of disaster
4emergency proclamation by the governor that authorizes disaster
5recovery housing assistance.
6The authority may enter into an agreement with one or
7more local program administrators to administer the program
8and moneys in the fund may be expended following a state of
9disaster emergency proclamation by the governor that authorizes
10disaster recovery housing assistance or the eviction prevention
11program. “Local program administrator” is defined in the bill
12as cities of Ames, Cedar Falls, Cedar Rapids, Council Bluffs,
13Davenport, Des Moines, Dubuque, Iowa City, Waterloo, and West
14Des Moines; a council of governments whose territory includes
15at least one county that is the subject of the state of
16disaster emergency proclamation by the governor that authorizes
17disaster recovery housing assistance or the eviction prevention
18program; a community action agency as defined in Code section
19216A.91 and whose territory includes at least one county that
20is the subject of the state of disaster emergency proclamation
21by the governor that authorizes disaster recovery housing
22assistance or the eviction prevention program; or a qualified
23local organization or governmental entity as determined by rule
24by the authority.
25To be considered for a forgivable loan or grant under the
26program, the homeowner or renter must register for the disaster
27case management program established pursuant to Code section
2829C.20B. The disaster case manager may refer the homeowner or
29renter to the appropriate local program administrator.
30DISASTER RECOVERY HOUSING ASSISTANCE PROGRAM — HOMEOWNERS.
31 To be eligible for a forgivable loan under the program,
32the bill requires a homeowner to own a disaster-affected
33home located in a county that has been proclaimed a state
34of disaster emergency by the governor; the home must have
35sustained damage greater than the damage that is covered by the
-89-1homeowner’s property and casualty insurance policy insuring
2the home plus any other state or federal disaster-related
3financial assistance that the homeowner is eligible to receive;
4an official must deem the home suitable for rehabilitation or
5damaged beyond reasonable repair; if the homeowner is seeking
6a forgivable loan for the repair or rehabilitation of the
7homeowner’s disaster-affected home, the home cannot be proposed
8for buyout by the county or city in which the home is located,
9or the disaster-affected home is eligible for a buyout, but
10the homeowner is requesting a forgivable loan for the repair
11or rehabilitation of the homeowner’s disaster-affected home
12in lieu of a buyout; and the assistance does not duplicate
13benefits provided by other disaster assistance programs.
14If a homeowner is referred to an administrator by the
15homeowner’s case manager, the bill allows the authority to
16award a forgivable loan to the eligible homeowner for repair
17or rehabilitation of the disaster-affected home, or for down
18payment assistance on the purchase of replacement housing,
19and the cost of reasonable repairs to be performed on the
20replacement housing to render it decent, safe, sanitary, and
21in good repair. Replacement housing purchased by a homeowner
22cannot be located in a 100-year floodplain. “Decent, safe,
23sanitary, and in good repair” is defined in the bill to mean
24the same as described in 24 C.F.R.§5.703. “Replacement
25housing” is defined in the bill as housing purchased by a
26homeowner to replace a disaster-affected home that is destroyed
27or damaged beyond reasonable repair as determined by a local
28program administrator.
29The authority shall determine the interest rate for the
30forgivable loan.
31If a homeowner who has been awarded a forgivable loan sells
32a disaster-affected home or replacement housing for which the
33homeowner received the forgivable loan prior to the end of the
34loan term, the remaining principal on the forgivable loan shall
35be due and payable.
-90- 1DISASTER RECOVERY HOUSING ASSISTANCE PROGRAM — RENTERS.
2 To be eligible for a grant under the program, the bill
3requires the local program administrator to either deem
4the disaster-affected home of the renter suitable for
5rehabilitation but unsuitable for current short-term
6habitation, or damaged beyond reasonable repair; and the
7assistance does not duplicate benefits provided by any other
8disaster assistance program.
9DISASTER RECOVERY HOUSING ASSISTANCE PROGRAM — REPORT. The
10bill requires the authority to annually submit a report to
11the general assembly detailing the disaster recovery housing
12assistance program.
13EVICTION PREVENTION PROGRAM. The bill requires the
14authority to establish and administer an eviction prevention
15program. Under the eviction prevention program, the authority
16awards grants from the disaster recovery housing assistance
17fund to eligible renters and eviction prevention partners.
18Grants may be awarded upon a state of disaster emergency
19proclamation by the governor that authorizes the eviction
20prevention program. The bill defines “eligible renter” to mean
21a renter whose income meets the qualifications of the program,
22who is at risk of eviction, and who resides in a county that
23is the subject of a state of disaster emergency proclamation
24by the governor that also authorizes the eviction prevention
25program. The bill defines “eviction prevention partner” to
26mean a qualified local organization or governmental entity as
27determined by rule by the authority.
28The bill requires grants awarded to eligible renters to be
29used for short-term financial rent assistance to keep eligible
30renters in the current residence of the renter. Grants awarded
31to eviction prevention partners are to be used to pay for rent
32or services provided to eligible renters for the purpose of
33preventing the eviction of eligible renters.
34DISASTER RECOVERY HOUSING ASSISTANCE PROGRAM — RULES. The
35authority shall adopt rules pursuant to Code chapter 17A to
-91-1implement and administer the program including establishing
2the maximum forgivable loan and grant amounts, the terms of
3forgivable loans, and income qualifications of eligible renters
4in the eviction prevention program.
5EFFECTIVE DATE. The division takes effect upon enactment.
6DIVISION XIX — BONUS DEPRECIATION. Currently, when a
7business buys equipment and other capital assets, the business
8is allowed to deduct a portion of the cost of such property
9as depreciation over a certain period for federal and state
10individual or corporate income tax purposes. Federal taxpayers
11are allowed to immediately deduct a higher portion of the cost
12of such property by claiming additional first-year depreciation
13(bonus depreciation). Iowa has recently adopted “rolling
14conformity” with federal tax law but did not conform with
15federal bonus depreciation provisions, meaning a taxpayer
16deducts the cost of the equipment or other capital assets by
17claiming depreciation over a longer time period for Iowa income
18tax purposes. The bill applies retroactively by conforming
19Iowa tax provisions with federal bonus depreciation provisions
20for equipment or other capital assets placed in service on or
21after January 1, 2021, for tax years beginning on or after
22that date. By conforming with federal bonus depreciation
23provisions for tax years beginning on or after January 1, 2021,
24Iowa automatically conforms with the federal limitation on
25business interest expense deductions in Code sections 422.7(60)
26and 422.35(27). Currently, if a taxpayer does not claim
27“bonus depreciation”, Iowa does not conform with the federal
28limitation on business expenses.
29DIVISION XX — BEGINNING FARMER TAX CREDIT. The bill
30provides for the participation of an eligible taxpayer
31(taxpayer) and qualified beginning farmer (beginning farmer)
32in the beginning farmer tax credit program (program) (Code
33section 16.81(4)). Under the program, a tax credit is awarded
34to a taxpayer who transfers agricultural assets to a beginning
35farmer by agricultural lease agreement (agreement). The
-92-1transferred agricultural assets include agricultural land and
2improvements, as well as depreciable agricultural property.
3The agreement must be approved by the Iowa finance authority
4(authority) (Code section 16.79A) who issues a tax credit
5certificate to the taxpayer on an annual basis for the period
6of the agreement (Code section 16.81).
7LEASE OF AGRICULTURAL LAND WHICH INCLUDES IMPROVEMENTS
8(BUILDINGS). The bill provides that the agreement may provide
9for lease of any size parcel of agricultural land and an
10improvement such as a building (amended Code section 16.58(1),
11(2), and (3)). The principal agricultural asset transferred in
12the agreement may be agricultural land or a building or other
13structure used in farming (amended Code section 16.79A(1)).
14PARTICIPATION IN THE PROGRAM — FROM 10 TO 15 YEARS.
15 The bill increases from 10 to 15 the number of years that
16a taxpayer may participate in the program. (amended Code
17section 16.79A(3)). The extended years of participation
18apply retroactively to a taxpayer previously approved by the
19authority to participate in the program (amendment Code section
2016.82(5)).
21PARTICIPATION IN THE PROGRAM — TAX CREDIT CERTIFICATES
22AND AWARDS. The bill provides that a taxpayer may claim
23multiple tax credits under the program (amended Code sections
2416.79A(3) and 16.81(6)) so long as each tax credit is based
25on an agreement approved by the authority (amended Code
26section 16.81(6)). It also provides that the current $50,000
27limitation on tax credits that can be claimed by a taxpayer
28applies to each rather than all such agreements (amended Code
29section 16.82(5)).
30BACKGROUND. Generally, in order to qualify as a beginning
31farmer, a person must have a low or moderate net worth, be able
32to successfully engage in farming, and promise to materially
33participate in the farming operation (Code sections 16.58(6)
34and (10), and 16.79(2)). The amount of the tax credit depends
35upon the type of payment arrangement provided in the agreement,
-93-1including a fixed amount (5 percent of cash rent payment) or
2some form or risk-sharing between the parties (15 percent of
3the market price of the commodity produced on the leasehold).
4A taxpayer may claim the tax credit in the applicable tax year
5up to the taxpayer’s liability. Any amount of the unused tax
6credit may be applied to reduce the taxpayer’s liability for
7each of the following 10 years until depleted, whichever comes
8first; and cannot be refunded (Code section 16.82(7)).
9EFFECTIVE DATE. The division takes effect on January 1,
102022.
11DIVISION XXI — MENTAL HEALTH FUNDING. This division of the
12bill relates to mental health and disability services funding.
13The bill creates a mental health and disability services
14regional service fund under the authority of the department of
15human services. For each fiscal year beginning on or after
16July 1, 2021, the bill appropriates from the general fund
17of the state to the mental health and disability services
18regional service fund an amount necessary to make all regional
19service payments for that fiscal year. The moneys available
20in a fiscal year in the mental health and disability services
21regional service fund, except as specified in the bill,
22are appropriated to the department of human services for
23distribution to each mental health and disability services
24region on a per capita basis calculated using each region’s
25population for that fiscal year and in accordance with
26performance-based contracts with each region. The amount
27of each region’s regional service payment is as follows:
28(1) for the fiscal year beginning July 1, 2021, an amount
29equal to the product of $15.86 multiplied by the sum of the
30region’s population for the fiscal year; (2) for the fiscal
31year beginning July 1, 2022, an amount equal to the product of
32$38 multiplied by the sum of the region’s population for the
33fiscal year; (3) for the fiscal year beginning July 1, 2023,
34an amount equal to the product of $40 multiplied by the sum of
35the region’s population for the fiscal year; (4) for the fiscal
-94-1year beginning July 1, 2024, an amount equal to the product of
2$42 multiplied by the sum of the region’s population for the
3fiscal year; and (5) for each fiscal year beginning on or after
4July 1, 2025, an amount equal to the product of the sum of the
5region’s population for the fiscal year multiplied by the sum
6of the dollar amount used to calculate the regional service
7payments for the immediately preceding fiscal year plus the
8regional service growth factor for the fiscal year. The bill
9defines “regional service growth factor” for a fiscal year to
10be an amount equal to the product of the dollar amount used to
11calculate the regional service payments for the immediately
12preceding fiscal year multiplied by the percent increase, if
13any, in the amount of sales tax revenue deposited into the
14general fund of the state between the fiscal year beginning
15three years prior to the applicable fiscal year and the fiscal
16year beginning two years prior to the applicable year, but not
17to exceed 1.5 percent.
18Regional service payments received by a region are paid in
19quarterly installments and shall be deposited in the region’s
20combined account under Code section 331.391 and used solely
21for providing mental health and disability services under the
22regional service system management plan.
23Under the bill, each mental health and disability services
24region for which the region’s cash flow amount certified
25exceeds a specified percentage of certain actual expenditures
26of the region, the remaining quarterly payments of the region’s
27regional service payment are reduced by an amount equal to
28the amount by which the region’s cash flow amount certified
29exceeds the specified percentage of the actual expenditures
30of the region, but the reduction amount shall not exceed the
31total amount of the region’s regional service payment for the
32fiscal year. If the region’s remaining quarterly payments are
33insufficient to effectuate the required reductions, the region
34is required to pay to the department of human services any
35amount for which the reduction in quarterly payments could not
-95-1be made.
2The amount of reductions to quarterly payments and amounts
3paid to the department of human services as the result of a
4region’s certified cash flow amounts shall be transferred and
5credited to the region incentive fund created in the bill.
6The bill also establishes an incentive fund in the mental
7health and disability services regional service fund to provide
8funding to mental health and disability services regions
9meeting certain eligibility criteria. The incentive fund
10consists of moneys appropriated or credited to the incentive
11fund by law. The bill appropriates $9,960,590 from the general
12fund of the state to the incentive fund for the fiscal year
13beginning July 1, 2021. The bill appropriates $5,107,340
14from the general fund of the state to the incentive fund for
15the fiscal year beginning July 1, 2022. For each fiscal year
16beginning on or after July 1, 2025, the bill appropriates an
17amount equal to the incentive fund growth factor multiplied by
18the ending balance of the incentive fund at the conclusion of
19a specified fiscal year. The “incentive fund growth factor”
20for each fiscal year is the percent increase, if any, in the
21amount of sales tax revenue deposited into the general fund of
22the state between the fiscal year beginning three years prior
23to the applicable fiscal year and the fiscal year beginning two
24years prior to the applicable year, minus 1.5 percent. The
25incentive fund growth factor for any fiscal year may not exceed
263.5 percent.
27A regional administrator must apply to the department of
28human services for funding from the incentive fund. The
29purpose of the funding shall be to provide appropriate
30financial incentives for outcomes met from services provided
31by the regional administrator’s mental health and disability
32services region. The department may accept or reject an
33application for assistance in whole or in part. The decision
34of the department is final.
35The bill specifies that incentive funding shall only be made
-96-1available to address one or more specified circumstances and
2subject to certain eligibility criteria.
3The department shall make its final decisions on or
4before December 15 regarding acceptance or rejection of
5the applications for incentive funding and the total amount
6accepted shall be considered obligated.
7Current Code section 331.424A authorizes each county to
8certify a property tax levy for payment of mental health and
9disability services within the mental health and disability
10services regional system. To coincide with the appropriation
11and payment of mental health and disability services regional
12service payments directly to the regions or to exempted
13counties, the bill ends the authority for such a property tax
14levy starting with the fiscal year beginning July 1, 2022.
15Additionally, upon conclusion of the fiscal year beginning July
161, 2021, the county treasurer shall transfer the remaining
17balance of the county’s county services fund to the county’s
18region to which the county belongs in the fiscal year beginning
19July 1, 2022, for deposit in the region’s combined account
20under Code section 331.391. The bill also modifies provisions
21relating to the transferring of funds of the county to the
22combined account of a mental health and disability services
23region.
24For each county for which the amount of taxes certified
25for levy for the purposes of Code section 331.424A for the
26fiscal year beginning July 1, 2021, exceeds the product
27of the population of the county multiplied by $21.14, the
28department of management shall reduce the amount of such taxes
29certified for levy to an amount not to exceed the product of
30the population of the county multiplied by $21.14 and shall
31revise the rate of taxation as necessary to raise the reduced
32amount. The department of management is required to report
33the reduction in the certified taxes and the revised rate of
34taxation to the county auditors by June 15, 2021.
35In order to timely implement the provisions of the bill
-97-1establishing the incentive fund for mental health and
2disability services regions for the fiscal year beginning
3July 1, 2021, and the fiscal year beginning July 1, 2022, the
4director of human services is required to establish alternative
5application deadlines and expedited application review and
6approval timelines.
7The bill provides that the department of human services
8may adopt emergency rules to implement the provisions of this
9division of the bill.
10This division of the bill takes effect upon enactment.
11DIVISION XXII — PROPERTY TAX REPLACEMENT PAYMENTS. Current
12Code section 441.21A establishes and appropriates amounts from
13the general fund of the state for commercial and industrial
14property tax replacement claims. Such claims are calculated
15by the department of revenue based on the difference between
16the actual value and assessed value of all commercial and
17industrial property in each taxing district in the state.
18Current law appropriates an amount necessary for the payment
19of all commercial and industrial property tax replacement
20claims for each fiscal year beginning on or after July 1,
212014, subject to a maximum total appropriation for fiscal
22years beginning on or after July 1, 2017, of the total
23amount necessary for the payment of replacement claims in the
24fiscal year beginning July 1, 2016. The bill eliminates the
25appropriation for fiscal years beginning on or after July 1,
262029, and specifies that the maximum total appropriation for
27the fiscal years beginning on or after July 1, 2022, but before
28July 1, 2029, shall not exceed the total amount necessary for
29the payment of replacement claims in the fiscal year.
30The bill modifies the methodology for calculating and
31apportioning commercial and industrial property tax replacement
32claims for fiscal years beginning on or after July 1, 2022,
33but before July 1, 2029. The bill requires such claims to be
34calculated based on taxing authorities, as defined in the bill,
35instead of taxing districts as is required under current law.
-98-1The amount of each taxing authority’s replacement claim is
2determined based on specified fractions of the amount received
3by the taxing authority under Code section 441.21A for the
4fiscal year beginning July 1, 2021, and whether the taxing
5authority is a qualified taxing authority. The specified
6fractions are reduced over the period of fiscal years beginning
7July 1, 2022, and ending June 30, 2029, in the case of a
8qualified taxing authority, and ending June 30, 2026, in the
9case of a taxing authority that is not a qualified taxing
10authority. Under the bill, a taxing authority that is eligible
11to continue to receive commercial and industrial property
12tax replacement payments includes a city, county, community
13college, or other governmental entity or political subdivision
14in this state authorized to certify a levy on property located
15within such authority, but does not include a school district.
16A qualified taxing authority is either a taxing authority that
17is not a city or a county or a taxing authority that is a city
18or a county in which the total assessed value as of January
191, 2019, of specified taxable property located in the taxing
20authority is less than 131.24 percent of the total assessed
21value as of January 1, 2012, of specified taxable property
22located in the taxing authority.
23The bill requires each taxing authority’s property tax
24replacement claim payment for fiscal years beginning on or
25after July 1, 2022, but before July 1, 2029, to be apportioned
26and credited by the governing body of the taxing authority
27among the taxing authority’s tax levies in the same proportion
28that each property tax levy bears to the total of all property
29tax levies imposed by the taxing authority for the fiscal year
30for which the payment is received. The bill also establishes
31requirements for the apportionment of amounts allocated to
32property tax levies that are subject to a division of taxes
33under Code section 403.19 (tax increment financing).
34Under current law, the legislative tax expenditure committee
35established under Code section 2.48 is required to review
-99-1the commercial and industrial property tax replacement claim
2expenditures. The bill eliminates that required periodic
3review.
4DIVISION XXIII — SCHOOL FOUNDATION PERCENTAGE. For
5purposes of calculating state foundation aid received by
6school districts under Code chapter 257, the regular program
7foundation base per pupil is 87.5 percent of the regular
8program state cost per pupil. The bill increases that
9percentage to 88.4 percent for school budget years beginning on
10or after July 1, 2022.
11The division takes effect July 1, 2022.
12DIVISION XXIV — PUBLIC EDUCATION AND RECREATIONAL TAX LEVY.
13 Code chapter 300 authorizes the imposition of a voter-approved
14property tax levy for the establishment and maintenance
15of public recreation places and playgrounds, and necessary
16accommodations for the recreation places and playgrounds, in
17the public school buildings and grounds of the district. Code
18chapter 300 also authorizes each school board to cooperate
19with public or private agencies having custody and management
20of public parks or buildings or grounds open to the public
21for the supervision and instruction necessary to carry on
22public educational and recreational activities in the parks,
23buildings, and grounds located within the district. Such
24activities may be supported by imposition of a voter-approved
25property tax levy not to exceed $0.13 and one-half cents per
26$1,000 of assessed value. The property tax levy under Code
27chapter 300 also provides financial support to community
28education programs established under Code chapter 276,
29which provide educational, recreational, cultural, and other
30community services and programs.
31The bill repeals Code chapter 300 and makes corresponding
32amendments to other provisions of law effective July 1, 2024,
33and applies to fiscal years beginning on or after July 1,
342024. The bill provides that financial support for a community
35education program under Code chapter 276 may be provided from
-100-1funds received by the school district under Code chapter 423F.
2 By operation of the definition of “school infrastructure” under
3Code section 423F.3(6)(a)(1), moneys received by a school
4district from the secure an advanced vision for education fund
5may continue to be utilized for activities previously provided
6for under Code chapter 300 and Code chapter 276.
7The bill prohibits a levy under Code chapter 300 from being
8approved at election on or after the effective date of this
9division of the bill and limits the rate at which previously
10approved levies can be imposed for the fiscal year beginning
11July 1, 2023.
12The bill also provides that moneys available in the public
13education and recreation levy fund at the conclusion of the
14fiscal year beginning July 1, 2023, and ending June 30, 2024,
15shall be expended by the school corporation for the purposes
16authorized under chapter 300, Code 2021.
17DIVISION XXV — ELDERLY PROPERTY TAX CREDIT. This division
18of the bill modifies the eligibility for and the calculation of
19the amount of the property tax credit for persons ages 70 and
20older under Code chapter 425, subchapter II.
21Under the bill, a person filing a claim for the property tax
22credit who is at least 70 years of age and who has a household
23income of less than 250 percent of the federal poverty level
24is eligible to receive a credit against property taxes due on
25the claimant’s homestead. For such a claimant, the tentative
26credit amount is equal to the greater of the following: (1)
27the amount of the credit as calculated under the schedule
28of credit amounts specified in Code section 425.23(1)(a) as
29if the claimant was an eligible claimant for a credit under
30that provision; and (2) the difference between the actual
31amount of property taxes due on the homestead during the
32applicable fiscal year minus the actual amount of property
33taxes due on the homestead based on a full assessment during
34the first fiscal year for which the claimant filed for a credit
35calculated under the bill and if the claimant has filed for the
-101-1credit for each of the subsequent fiscal years after the first
2credit claimed.
3The bill also modifies the appropriation to the elderly
4and disabled property tax credit and reimbursement fund under
5Code section 425.39, by limiting the amount of the credit to
6be paid by the director of revenue to each county treasurer
7for claimants who have reached 70 years of age and specifies
8that Code section 25B.7(1), which requires the state to fund
9the cost of providing new property tax credits, shall not apply
10to the amount of the credit in excess of the amount paid by the
11director of revenue as determined in the bill.
12The division applies to claims under Code chapter 425,
13subchapter II, filed on or after January 1, 2022.
14DIVISION XXVI — TRANSIT FUNDING. This division of the
15bill authorizes a regional transit district established under
16Code chapter 28M or a city that is not participating in a
17regional transit district to, following approval at election,
18impose a transit hotel and motel tax at a rate not to exceed 5
19percent. When imposed by a regional transit district, the tax
20shall apply only within the boundaries of the regional transit
21district and may be imposed in addition to any local hotel and
22motel tax imposed under Code chapter 423A. When imposed by a
23city, the tax shall apply only within the corporate boundaries
24of that city and may be imposed in addition to any local hotel
25and motel tax imposed under Code chapter 423A. Imposition,
26repeal, or a change in the rate of the transit hotel and
27motel tax requires approval at election. Collection and
28administration of the transit hotel and motel tax is similar to
29collection and administration of the local hotel and motel tax.
30Code chapter 28M authorizes a regional transit district to
31impose a property tax levy at a rate not to exceed 95 cents
32per $1,000 of assessed value of all taxable property in the
33regional transit district, subject to aggregate levy limits for
34cities that are participating in the regional transit district
35and imposing a municipal transit system property tax levy under
-102-1Code section 384.12(10). The bill establishes a methodology
2for determining a reduction in the regional transit district
3property tax levy if the regional transit district imposes a
4transit hotel and motel tax. The bill establishes a similar
5methodology for determining a reduction in the city transit
6system property tax levy under Code section 384.12(10) if the
7city is imposing a transit hotel and motel tax.
8The revenue derived by a regional transit district from
9the transit hotel and motel tax shall be expended exclusively
10for the purposes of the regional transit district and shall
11result in a reduction in the maximum levy rate for the regional
12transit district, as provided in the bill. However, the
13amount of revenue derived by the regional transit district
14in the second calendar year that transit hotel and motel
15tax is imposed that exceeds the amount of revenue derived
16by the regional transit district in the first calendar year
17that transit hotel and motel tax is imposed shall be used
18for property tax relief in addition to the reduction to the
19levy rate as the result of the revenue derived in the first
20calendar year that the transit hotel and motel tax is imposed.
21Similarly, the revenue derived by a city from the transit hotel
22and motel tax shall be expended exclusively for the operation
23and maintenance of a municipal transit system and shall result
24in a reduction in the maximum transit system levy rate for the
25city under Code section 384.12(10). However, the amount of
26revenue derived by the city in the second calendar year that
27transit hotel and motel tax is imposed that exceeds the amount
28of revenue derived by the city in the first calendar year
29that transit hotel and motel tax is imposed shall be used for
30property tax relief for the levy under Code section 384.12(10),
31in addition to the reduction to the levy rate as the result of
32the revenue derived in the first calendar year that the transit
33hotel and motel tax is imposed.
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