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House File 652 - IntroducedA Bill ForAn Act 1relating to state revenue and finance by modifying
2certain tax credits and tax credit programs and providing
3for transfers to the cash reserve fund and the taxpayers
4trust fund, and including effective date and retroactive and
5other applicability provisions.
6BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2BEGINNING FARMER TAX CREDITS
3 Section 1. Section 16.80, subsection 5, paragraph a,
4subparagraphs (1) and (2), Code 2017, are amended to read as
5follows:
6(1) If the qualified beginning farmer is not a veteran, the
7taxpayer may claim a tax credit equal to seven six percent of
8the gross amount paid to the taxpayer under the agreement for
9each tax year that the tax credit is allowed.
10(2) If the qualified beginning farmer is a veteran, the
11taxpayer may claim eight percent of the gross amount paid to
12the taxpayer under the agreement for the first year that the
13tax credit is allowed and seven six percent of the gross amount
14paid to the taxpayer for each subsequent tax year that the tax
15credit is allowed. However, the taxpayer may only claim seven
16 six percent of the gross amount paid to the taxpayer under
17a renewed agreement or a new agreement executed by the same
18parties.
19 Sec. 2. Section 16.80, subsection 5, paragraph b,
20subparagraph (1), Code 2017, is amended to read as follows:
21(1) (a) If the qualified beginning farmer is not a
22veteran, the taxpayer may claim a tax credit equal to seventeen
23 sixteen percent of the amount paid to the taxpayer from crops
24or animals sold under the agreement in which the payment is
25exclusively made from the sale of crops or animals.
26(b) If the qualified beginning farmer is a veteran, the
27taxpayer may claim a tax credit equal to eighteen percent of
28the amount paid to the taxpayer from crops or animals sold
29under the agreement for the first tax year that the taxpayer
30is allowed the tax credit and seventeen sixteen percent of the
31amount paid to the taxpayer for each subsequent tax year that
32the taxpayer is allowed the tax credit. However, the taxpayer
33may only claim seventeen sixteen percent of the amount paid to
34the taxpayer from crops or animals sold for any tax year under
35a renewed agreement or a new agreement executed by the same
-1-1parties.
2 Sec. 3. Section 16.80, subsection 5, paragraphs a and b,
3as enacted in 2014 Iowa Acts, chapter 1080, section 122, are
4amended to read as follows:
5a. Except as provided in paragraph “b”, the tax credit shall
6equal five four and one-half percent of the amount paid to the
7taxpayer under the agreement.
8b. The tax credit shall equal fifteen fourteen percent of
9the amount paid to the taxpayer from crops or animals sold
10under an agreement in which the payment is exclusively made
11from the sale of crops or animals.
12 Sec. 4. Section 16.81, subsection 8, paragraphs a and b,
13Code 2017, are amended to read as follows:
14a. If the qualified beginning farmer is not a veteran, the
15taxpayer may claim a tax credit equal to seven six percent of
16the gross amount paid to the qualified beginning farmer under
17the contract for each tax year that the tax credit is allowed.
18b. If the qualified beginning farmer is a veteran, the
19taxpayer may claim a tax credit equal to eight percent of the
20gross amount paid to the qualified beginning farmer under the
21contract for the first year that the tax credit is allowed and
22seven six percent of the gross amount paid to the qualified
23beginning farmer under the contract for each subsequent tax
24year that the tax credit is allowed. However, the taxpayer may
25only claim seven six percent of the gross amount paid to the
26qualified beginning farmer under a renewed contract or a new
27contract executed by the same parties.
28 Sec. 5. EFFECTIVE DATE.
291. Except as provided in subsection 2, this division of this
30Act, being deemed of immediate importance, takes effect upon
31enactment.
322. The section of this division of this Act amending section
3316.80, subsection 5, paragraphs “a” and “b”, as enacted in 2014
34Iowa Acts, chapter 1080, section 122, takes effect January 1,
352018.
-2-1 Sec. 6. RETROACTIVE AND OTHER APPLICABILITY.
21. Except as provided in subsection 2, this division of this
3Act applies retroactively to January 1, 2017, for tax years
4beginning on or after that date.
52. The section of this division of this Act amending section
616.80, subsection 5, paragraphs “a” and “b”, as enacted in 2014
7Iowa Acts, chapter 1080, section 122, applies to tax years
8beginning on or after January 1, 2018.
9DIVISION II
10BIODIESEL BLENDED FUEL TAX CREDIT
11 Sec. 7. Section 422.11P, subsection 3, paragraph a,
12subparagraph (1), Code 2017, is amended to read as follows:
13(1) The taxpayer is a retail dealer who sells and dispenses
14qualifying biodiesel blended fuel through a motor fuel pump
15located at the retail dealer’s retail motor fuel site during
16the calendar year or parts of the calendar years for which the
17tax credit is claimed as provided in this section.
18 Sec. 8. Section 422.11P, subsection 4, unnumbered paragraph
191, Code 2017, is amended to read as follows:
20For a retail dealer whose tax year is on a calendar year
21basis, the A retail dealer shall calculate the amount of the
22tax credit by multiplying a designated rate by the retail
23dealer’s total biodiesel blended fuel gallonage for the
24calendar year as provided in section 452A.31 which qualifies
25under this subsection.
26 Sec. 9. Section 422.11P, subsection 5, Code 2017, is amended
27by striking the subsection and inserting in lieu thereof the
28following:
295. a. To receive a tax credit under this section, a retail
30dealer must submit an application in the manner and form
31prescribed by the department. The department may establish an
32application deadline or require a retail dealer to apply for
33the credit on or in conjunction with the retail dealer’s annual
34report required under section 452A.33.
35b. The department shall issue tax credits and related tax
-3-1credit certificates to qualifying retail dealers on a calendar
2year basis, which tax credits shall not exceed an aggregate
3amount of sixteen million dollars per calendar year. In the
4event the aggregate amount of tax credit claims for a calendar
5year exceeds sixteen million dollars, the department shall
6reduce in a prorated fashion all tax credit claims until the
7aggregate credit claims equal sixteen million dollars.
8c. The tax credit may be claimed for the tax year ending
9on or after January 1 of the calendar year for which the tax
10credit is calculated as provided in subsection 4. For an
11individual claiming the tax credit allowed another entity
12pursuant to subsection 7, the tax credit may be claimed for the
13individual’s tax year beginning on or after the first day of
14the tax year for which the other entity was allowed to claim
15the tax credit.
16d. (1) To claim a tax credit under this section, a taxpayer
17shall include one or more tax credit certificates with the
18taxpayer’s tax return.
19(2) The tax credit certificate shall contain the taxpayer’s
20name, address, tax identification number, the amount of the
21credit, and any other information required by the department.
22(3) The tax credit certificate, unless rescinded by the
23department, shall be accepted by the department as payment
24for the taxes under this division or division III, subject
25to any conditions or restrictions placed by the department
26upon the face of the tax credit certificate and subject to the
27limitations of this section.
28 Sec. 10. EFFECTIVE UPON ENACTMENT. This division of this
29Act, being deemed of immediate importance, takes effect upon
30enactment.
31 Sec. 11. RETROACTIVE APPLICABILITY. This division of this
32Act applies retroactively to January 1, 2017, for tax years
33beginning on or after that date and for biodiesel blended fuel
34sold on or after that date.
35 Sec. 12. TRANSITION PROVISIONS. For a retail dealer whose
-4-1tax year is not on a calendar year basis, the retailer shall
2calculate tax credits for the tax year beginning in calendar
3year 2016, and ending in calendar year 2017 as follows:
41. For the period beginning on the first day of the retail
5dealer’s tax year until December 31, the retail dealer shall
6calculate a tax credit in the same manner as a retail dealer
7who calculates the tax credit on that same December 31 as
8provided in section 422.11P, subsection 4, Code 2017.
92. For any period beginning on or after January 1, 2017,
10the retail dealer shall calculate a tax credit as provided in
11section 422.11P, as amended in this division of this Act.
12DIVISION III
13E-15 PLUS GASOLINE PROMOTION TAX CREDIT
14 Sec. 13. Section 422.11Y, subsection 3, paragraph a,
15subparagraph (1), Code 2017, is amended to read as follows:
16(1) The taxpayer is a retail dealer who sells and dispenses
17qualifying ethanol blended gasoline through a motor fuel pump
18located at the retail dealer’s retail motor fuel site during
19the calendar year or parts of the calendar years for which the
20tax credit is claimed as provided in this section.
21 Sec. 14. Section 422.11Y, subsection 4, unnumbered
22paragraph 1, Code 2017, is amended to read as follows:
23For a retail dealer whose tax year is on a calendar year
24basis, the A retail dealer shall calculate the amount of the
25tax credit by multiplying a designated rate by the retail
26dealer’s total ethanol blended gasoline gallonage for the
27calendar year as provided in section 452A.31 which qualifies
28under this subsection.
29 Sec. 15. Section 422.11Y, subsection 5, Code 2017, is
30amended by striking the subsection and inserting in lieu
31thereof the following:
325. a. To receive a tax credit under this section, a retail
33dealer must submit an application in the manner and form
34prescribed by the department. The department may establish an
35application deadline or require a retail dealer to apply for
-5-1the credit on or in conjunction with the retail dealer’s annual
2report required under section 452A.33.
3b. The department shall issue tax credits and related tax
4credit certificates to qualifying retail dealers on a calendar
5year basis, which tax credits shall not exceed an aggregate
6amount of four hundred thirty thousand two hundred dollars per
7calendar year. In the event the aggregate amount of tax credit
8claims for a calendar year exceeds four hundred thirty thousand
9two hundred dollars, the department shall reduce in a prorated
10fashion all tax credit claims until the aggregate credit claims
11equal four hundred thirty thousand two hundred dollars.
12c. The tax credit may be claimed for the tax year ending
13on or after January 1 of the calendar year for which the tax
14credit is calculated as provided in subsection 4. For an
15individual claiming the tax credit allowed another entity
16pursuant to subsection 8, the tax credit may be claimed for the
17individual’s tax year beginning on or after the first day of
18the tax year for which the other entity was allowed to claim
19the tax credit.
20d. (1) To claim a tax credit under this section, a taxpayer
21shall include one or more tax credit certificates with the
22taxpayer’s tax return.
23(2) The tax credit certificate shall contain the taxpayer’s
24name, address, tax identification number, the amount of the
25credit, and any other information required by the department.
26(3) The tax credit certificate, unless rescinded by the
27department, shall be accepted by the department as payment
28for the taxes under this division or division III, subject
29to any conditions or restrictions placed by the department
30upon the face of the tax credit certificate and subject to the
31limitations of this section.
32 Sec. 16. EFFECTIVE UPON ENACTMENT. This division of this
33Act, being deemed of immediate importance, takes effect upon
34enactment.
35 Sec. 17. RETROACTIVE APPLICABILITY. This division of this
-6-1Act applies retroactively to January 1, 2017, for tax years
2beginning on or after that date and for qualifying ethanol
3blended gasoline sold on or after that date.
4 Sec. 18. TRANSITION PROVISIONS. For a retail dealer whose
5tax year is not on a calendar year basis, the retailer shall
6calculate tax credits for the tax year beginning in calendar
7year 2016, and ending in calendar year 2017 as follows:
81. For the period beginning on the first day of the retail
9dealer’s tax year until December 31, the retail dealer shall
10calculate a tax credit in the same manner as a retail dealer
11who calculates the tax credit on that same December 31 as
12provided in section 422.11Y, subsection 4, Code 2017.
132. For any period beginning on or after January 1, 2017,
14the retail dealer shall calculate a tax credit as provided in
15section 422.11Y, as amended in this division of this Act.
16DIVISION IV
17E-85 GASOLINE PROMOTION TAX CREDIT
18 Sec. 19. Section 422.11O, subsection 2, paragraph a,
19subparagraph (1), Code 2017, is amended to read as follows:
20(1) The taxpayer is a retail dealer who sells and dispenses
21E-85 gasoline through a motor fuel pump located at the retail
22dealer’s retail motor fuel site during the calendar year or
23parts of the calendar year for which the tax credit is claimed
24as provided in this section.
25 Sec. 20. Section 422.11O, subsection 3, Code 2017, is
26amended to read as follows:
273. For a retail dealer whose tax year is on a calendar year
28basis, the A retail dealer shall calculate the amount of the
29tax credit by multiplying a designated rate of sixteen cents
30by the retail dealer’s total E-85 gasoline gallonage for the
31calendar year as provided in sections 452A.31 and 452A.32.
32 Sec. 21. Section 422.11O, subsection 4, Code 2017, is
33amended by striking the subsection and inserting in lieu
34thereof the following:
354. a. To receive a tax credit under this section, a retail
-7-1dealer must submit an application in the manner and form
2prescribed by the department. The department may establish an
3application deadline or require a retail dealer to apply for
4the credit on or in conjunction with the retail dealer’s annual
5report required under section 452A.33.
6b. The department shall issue tax credits and related tax
7credit certificates to qualifying retail dealers on a calendar
8year basis, which tax credits shall not exceed an aggregate
9amount of two million five hundred eleven thousand one
10hundred dollars per calendar year. In the event the aggregate
11amount of tax credit claims for a calendar year exceeds two
12million five hundred eleven thousand one hundred dollars, the
13department shall reduce in a prorated fashion all tax credit
14claims until the aggregate credit claims equal two million five
15hundred eleven thousand one hundred dollars.
16c. The tax credit may be claimed for the tax year ending
17on or after January 1 of the calendar year for which the tax
18credit is calculated as provided in subsection 3. For an
19individual claiming the tax credit allowed another entity
20pursuant to subsection 7, the tax credit may be claimed for the
21individual’s tax year beginning on or after the first day of
22the tax year for which the other entity was allowed to claim
23the tax credit.
24d. (1) To claim a tax credit under this section, a taxpayer
25shall include one or more tax credit certificates with the
26taxpayer’s tax return.
27(2) The tax credit certificate shall contain the taxpayer’s
28name, address, tax identification number, the amount of the
29credit, and any other information required by the department.
30(3) The tax credit certificate, unless rescinded by the
31department, shall be accepted by the department as payment
32for the taxes under this division or division III, subject
33to any conditions or restrictions placed by the department
34upon the face of the tax credit certificate and subject to the
35limitations of this section.
-8-1 Sec. 22. EFFECTIVE UPON ENACTMENT. This division of this
2Act, being deemed of immediate importance, takes effect upon
3enactment.
4 Sec. 23. RETROACTIVE APPLICABILITY. This division of this
5Act applies retroactively to January 1, 2017, for tax years
6beginning on or after that date and for E-85 gasoline sold on
7or after that date.
8 Sec. 24. TRANSITION PROVISIONS. For a retail dealer whose
9tax year is not on a calendar year basis, the retailer shall
10calculate tax credits for the tax year beginning in calendar
11year 2016, and ending in calendar year 2017 as follows:
121. For the period beginning on the first day of the retail
13dealer’s tax year until December 31, the retail dealer shall
14calculate a tax credit in the same manner as a retail dealer
15who calculates the tax credit on that same December 31 as
16provided in section 422.11O, subsection 3, Code 2017.
172. For any period beginning on or after January 1, 2017,
18the retail dealer shall calculate a tax credit as provided in
19section 422.11O, as amended in this division of this Act.
20DIVISION V
21ETHANOL PROMOTION TAX CREDIT
22 Sec. 25. Section 422.11N, subsection 3, paragraph a, Code
232017, is amended to read as follows:
24a. The taxpayer is a retail dealer who sells and dispenses
25ethanol blended gasoline through a motor fuel pump located
26at the retail dealer’s retail motor fuel site during the
27determination period or parts of the determination periods for
28which the tax credit is claimed as provided in this section.
29 Sec. 26. Section 422.11N, subsection 6, paragraph a,
30unnumbered paragraph 1, Code 2017, is amended to read as
31follows:
32For a retail dealer whose tax year is the same as a
33determination period beginning on January 1 and ending on
34December 31, the A retail dealer’s tax credit is calculated
35by multiplying the retail dealer’s total ethanol gallonage
-9- 1for the determination period by a tax credit rate, which may
2be adjusted based on the retail dealer’s biofuel threshold
3percentage disparity. The tax credit rate is as follows:
4 Sec. 27. Section 422.11N, subsection 6, paragraph b, Code
52017, is amended by striking the paragraph.
6 Sec. 28. Section 422.11N, Code 2017, is amended by adding
7the following new subsection:
8 new subsection. 7A. a. To receive a tax credit under this
9section, a retail dealer must submit an application in the
10manner and form prescribed by the department. The department
11may establish an application deadline or require a retail
12dealer to apply for the credit on or in conjunction with the
13retail dealer’s annual report required under section 452A.33.
14b. The department shall issue tax credits and related tax
15credit certificates to qualifying retail dealers on a calendar
16year basis, which tax credits shall not exceed an aggregate
17amount of one million seventy-one thousand five hundred
18dollars per determination period. In the event the aggregate
19amount of tax credit claims for a determination period exceeds
20one million seventy-one thousand five hundred dollars, the
21department shall reduce in a prorated fashion all tax credit
22claims until the aggregate credit claims equal one million
23seventy-one thousand five hundred dollars.
24c. The tax credit may be claimed for the tax year ending
25on or after January 1 of the determination period for which
26the tax credit is calculated as provided in subsection 6. For
27an individual claiming the tax credit allowed another entity
28pursuant to subsection 9, the tax credit may be claimed for the
29individual’s tax year beginning on or after the first day of
30the tax year for which the other entity was allowed to claim
31the tax credit.
32d. (1) To claim a tax credit under this section, a taxpayer
33shall include one or more tax credit certificates with the
34taxpayer’s tax return.
35(2) The tax credit certificate shall contain the taxpayer’s
-10-1name, address, tax identification number, the amount of the
2credit, and any other information required by the department.
3(3) The tax credit certificate, unless rescinded by the
4department, shall be accepted by the department as payment
5for the taxes under this division or division III, subject
6to any conditions or restrictions placed by the department
7upon the face of the tax credit certificate and subject to the
8limitations of this section.
9 Sec. 29. EFFECTIVE UPON ENACTMENT. This division of this
10Act, being deemed of immediate importance, takes effect upon
11enactment.
12 Sec. 30. RETROACTIVE APPLICABILITY. This division of
13this Act applies retroactively to January 1, 2017, for tax
14years beginning on or after that date and for ethanol blended
15gasoline sold on or after that date.
16 Sec. 31. TRANSITION PROVISIONS. For a retail dealer whose
17tax year is not on a calendar year basis, the retailer shall
18calculate tax credits for the tax year beginning in calendar
19year 2016, and ending in calendar year 2017 as follows:
201. For the period beginning on the first day of the retail
21dealer’s tax year until December 31, the retail dealer shall
22calculate a tax credit in the same manner as a retail dealer
23who calculates the tax credit on that same December 31 as
24provided in section 422.11N, subsection 6, paragraph “a”, Code
252017.
262. For any period beginning on or after January 1, 2017,
27the retail dealer shall calculate a tax credit as provided in
28section 422.11N, as amended in this division of this Act.
29DIVISION VI
30HISTORIC PRESERVATION AND CULTURAL AND ENTERTAINMENT DISTRICT
31TAX CREDIT
32 Sec. 32. Section 404A.2, subsection 1, Code 2017, is amended
33to read as follows:
341. An eligible taxpayer who has entered into an agreement
35under section 404A.3, subsection 3, is eligible to receive a
-11-1historic preservation and cultural and entertainment district
2tax credit in an amount equal to twenty-five fifteen percent
3of the qualified rehabilitation expenditures of a qualified
4rehabilitation project that are specified in the agreement.
5Notwithstanding any other provision of this chapter or any
6provision in the agreement to the contrary, the amount of the
7tax credits shall not exceed twenty-five fifteen percent of the
8final qualified rehabilitation expenditures verified by the
9authority pursuant to section 404A.3, subsection 5, paragraph
10“c”.
11 Sec. 33. Section 404A.4, subsection 1, paragraph a, Code
122017, is amended to read as follows:
13a. Except as provided in subsections 2 and 3, the authority
14shall not award in any one fiscal year an amount of tax credits
15provided in section 404A.2 in excess of forty-five thirty-five
16 million dollars.
17 Sec. 34. APPLICABILITY. This section of this division
18of this Act amending section 404A.2, subsection 1, applies
19to qualified rehabilitation projects registered on or after
20July 1, 2017, and qualified rehabilitation projects registered
21prior to July 1, 2017, shall be governed by section 404A.2,
22subsection 1, Code 2017.
23DIVISION VII
24SOLAR ENERGY SYSTEM TAX CREDIT
25 Sec. 35. Section 422.11L, subsection 1, Code 2017, is
26amended to read as follows:
271. The taxes imposed under this division, less the credits
28allowed under section 422.12, shall be reduced by a solar
29energy system tax credit equal to the sum of the following:
30a. Sixty Forty percent of the federal residential energy
31efficient property credit related to solar energy provided in
32section 25D(a)(1) and section 25D(a)(2) of the Internal Revenue
33Code, not to exceed five thousand dollars.
34b. Sixty Forty percent of the federal energy credit related
35to solar energy systems provided in section 48(a)(2)(A)(i)(II)
-12-1and section 48(a)(2)(A)(i)(III) of the Internal Revenue Code,
2not to exceed twenty thousand dollars.
3c. Notwithstanding paragraphs “a” and “b” of this
4subsection, for installations occurring on or after January 1,
52016, the applicable percentages of the federal residential
6energy efficiency property tax credit related to solar energy
7and the federal energy credit related to solar energy systems
8shall be fifty percent.
9 Sec. 36. Section 422.11L, subsection 4, paragraph a, Code
102017, is amended to read as follows:
11a. The cumulative value of tax credits claimed annually by
12applicants pursuant to this section shall not exceed five four
13 million dollars. Of this amount, at least one million dollars
14shall be reserved for claims associated with or resulting from
15residential solar energy system installations. In the event
16that the total amount of claims submitted for residential solar
17energy system installations in a tax year is an amount less
18than one million dollars, the remaining unclaimed reserved
19amount shall be made available for claims associated with or
20resulting from nonresidential solar energy system installations
21received for the tax year.
22 Sec. 37. Section 422.33, subsection 29, paragraph a, Code
232017, is amended to read as follows:
24a. The taxes imposed under this division shall be reduced
25by a solar energy system tax credit equal to sixty forty
26 percent of the federal energy credit related to solar energy
27systems provided in section 48(a)(2)(A)(i)(II) and section
2848(a)(2)(A)(i)(III) of the Internal Revenue Code, not to exceed
29twenty thousand dollars. For installations occurring on or
30after January 1, 2016, the applicable percentage of the federal
31energy credit related to solar energy systems shall be fifty
32percent.
33 Sec. 38. Section 422.60, subsection 12, paragraph a, Code
342017, is amended to read as follows:
35a. The taxes imposed under this division shall be reduced
-13-1by a solar energy system tax credit equal to sixty forty
2 percent of the federal energy credit related to solar energy
3systems provided in section 48(a)(2)(A)(i)(II) and section
448(a)(2)(A)(i)(III) of the Internal Revenue Code, not to exceed
5twenty thousand dollars. For installations occurring on or
6after January 1, 2016, the applicable percentage of the federal
7energy credit related to solar energy systems shall be fifty
8percent.
9 Sec. 39. EFFECTIVE UPON ENACTMENT. This division of this
10Act, being deemed of immediate importance, takes effect upon
11enactment.
12 Sec. 40. RETROACTIVE APPLICABILITY. The following
13provision or provisions of this division of this Act apply
14retroactively to January 1, 2017, for tax years beginning and
15installations occurring on or after that date:
161. The section of this division of this Act amending section
17422.11L, subsection 4, paragraph “a”.
18 Sec. 41. APPLICABILITY. The following provision or
19provisions of this division of this Act apply to installations
20occurring on or after the effective date of this division of
21this Act:
221. The section of this division of this Act amending section
23422.11L, subsection 1.
242. The section of this division of this Act amending section
25422.33, subsection 29, paragraph “a”.
263. The section of this division of this Act amending section
27422.60, subsection 12, paragraph “a”.
28DIVISION VIII
29GEOTHERMAL HEAT PUMP TAX CREDIT
30 Sec. 42. Section 422.11I, Code 2017, is amended to read as
31follows:
32422.11I Geothermal heat pump tax credit.
331. The taxes imposed under this division, less the credits
34allowed under section 422.12, shall be reduced by a geothermal
35heat pump tax credit equal to twenty sixteen percent of the
-14-1federal residential energy efficient property tax credit
2allowed for geothermal heat pumps provided in section 25D(a)(5)
3of the Internal Revenue Code for residential property located
4in Iowa.
52. a. To receive a tax credit under this section, a
6taxpayer must submit an application in the manner and form
7prescribed by the department by May 1 following the calendar
8year of the installation of the qualified geothermal heat
9pump property that is the subject of the federal credit. The
10application must be approved by the department in order to
11receive a tax credit certificate and claim the tax credit.
12b. The department shall issue tax credits and related
13tax credit certificates on a first-come, first-served basis
14in the order the applications are received until the maximum
15amount of tax credits authorized pursuant to subsection 3 is
16reached. If for a calendar year the maximum amount of tax
17credits applied for exceeds the amount specified in subsection
183, the department shall establish a wait list for tax credits.
19Valid applications filed by the taxpayer by May 1 following
20the calendar year of the installation but not approved by
21the department shall be placed on a wait list in the order
22the applications were received and those applicants shall
23be given priority for having their applications approved
24in succeeding years. Placement on a wait list pursuant to
25this paragraph shall not constitute a promise binding the
26state. The availability of a tax credit and issuance of a tax
27credit certificate pursuant to this section in a future year
28is contingent upon the availability of tax credits in that
29particular year.
30c. For tax credit certificates issued in the calendar
31year of the installation or the calendar year following the
32installation, the tax credit may be claimed for the applicant’s
33tax year during which the installation was completed. For tax
34credit certificates issued in any later calendar year, the tax
35credit may be claimed for the applicant’s tax year during which
-15-1the tax credit is issued.
2d. (1) To claim a tax credit under this section, a taxpayer
3shall include one or more tax credit certificates with the
4taxpayer’s tax return.
5(2) The tax credit certificate shall contain the taxpayer’s
6name, address, tax identification number, the amount of the
7credit, and any other information required by the department.
8(3) The tax credit certificate, unless rescinded by the
9department, shall be accepted by the department as payment
10for the taxes imposed under this division, subject to any
11conditions or restrictions placed by the department upon
12the face of the tax credit certificate and subject to the
13limitations of this section.
143. The maximum aggregate amount of tax credits issued in a
15calendar year pursuant to this section shall not exceed three
16hundred seventy-six thousand twenty dollars.
174. Any credit in excess of the tax liability is not
18refundable but the excess for the tax year may be credited
19to the tax liability for the following ten years or until
20depleted, whichever is earlier.
215. The director of revenue shall adopt rules to implement
22this section.
23 Sec. 43. EFFECTIVE UPON ENACTMENT. This division of this
24Act, being deemed of immediate importance, takes effect upon
25enactment.
26 Sec. 44. RETROACTIVE APPLICABILITY. This division of this
27Act applies retroactively to January 1, 2017, for tax years
28beginning on or after that date.
29DIVISION IX
30GEOTHERMAL TAX CREDIT
31 Sec. 45. Section 422.10A, subsection 2, Code 2017, is
32amended to read as follows:
332. Except as provided in subsection 6, the taxes imposed
34under this division, less the credits allowed under section
35422.12, shall be reduced by a geothermal tax credit equal
-16-1to ten eight percent of the qualified geothermal heat pump
2property expenditures made by the taxpayer during the tax year.
3 Sec. 46. Section 422.10A, Code 2017, is amended by adding
4the following new subsections:
5 NEW SUBSECTION. 4A. a. To receive a tax credit under this
6section, a taxpayer must submit an application in the manner
7and form prescribed by the department by May 1 following the
8calendar year of the installation of the qualified geothermal
9heat pump property. The application must be approved by the
10department in order to receive a tax credit certificate and
11claim the tax credit.
12b. The department shall issue tax credits and related
13tax credit certificates on a first-come, first-served basis
14in the order the applications are received until the maximum
15amount of tax credits authorized pursuant to subsection 4B is
16reached. If for a calendar year the maximum amount of tax
17credits applied for exceeds the amount specified in subsection
184B, the department shall establish a wait list for tax credits.
19Valid applications filed by the taxpayer by May 1 following
20the calendar year of the installation but not approved by
21the department shall be placed on a wait list in the order
22the applications were received and those applicants shall
23be given priority for having their applications approved
24in succeeding years. Placement on a wait list pursuant to
25this paragraph shall not constitute a promise binding the
26state. The availability of a tax credit and issuance of a tax
27credit certificate pursuant to this section in a future year
28is contingent upon the availability of tax credits in that
29particular year.
30c. For tax credit certificates issued in the calendar
31year of the installation or the calendar year following the
32installation, the tax credit may be claimed for the applicant’s
33tax year during which the installation was completed. For tax
34credit certificates issued in any later calendar year, the tax
35credit may be claimed for the applicant’s tax year during which
-17-1the tax credit is issued.
2d. (1) To claim a tax credit under this section, a taxpayer
3shall include one or more tax credit certificates with the
4taxpayer’s tax return.
5(2) The tax credit certificate shall contain the taxpayer’s
6name, address, tax identification number, the amount of the
7credit, and any other information required by the department.
8(3) The tax credit certificate, unless rescinded by the
9department, shall be accepted by the department as payment
10for the taxes imposed under this division, subject to any
11conditions or restrictions placed by the department upon
12the face of the tax credit certificate and subject to the
13limitations of this section.
14 NEW SUBSECTION. 4B. The maximum aggregate amount of tax
15credits issued in a calendar year pursuant to this section
16shall not exceed one million five hundred thousand dollars.
17 Sec. 47. EFFECTIVE UPON ENACTMENT. This division of this
18Act, being deemed of immediate importance, takes effect upon
19enactment.
20 Sec. 48. RETROACTIVE APPLICABILITY. The following
21provision or provisions of this division of this Act apply
22retroactively to January 1, 2017, for tax years beginning and
23installations occurring on or after that date:
241. The sections of this division of this Act enacting
25section 422.10A, subsections 4A and 4B.
26 Sec. 49. APPLICABILITY. The following provision or
27provisions of this division of this Act apply to installations
28occurring on or after the effective date of this division of
29this Act:
301. The section of this division of this Act amending section
31422.10A, subsection 2.
32DIVISION X
33INNOVATION FUND TAX CREDIT
34 Sec. 50. Section 15E.52, subsection 3, Code 2017, is amended
35to read as follows:
-18- 13. The amount of a tax credit allowed under this section
2shall equal twenty-five twenty percent of the taxpayer’s equity
3investment in an innovation fund.
4 Sec. 51. EFFECTIVE UPON ENACTMENT. This division of this
5Act, being deemed of immediate importance, takes effect upon
6enactment.
7 Sec. 52. APPLICABILITY. This division of this Act applies
8to equity investments in an innovation fund made on or after
9the effective date of this division of this Act, and equity
10investments in an innovation fund made prior to the effective
11date of this division of this Act shall be governed by section
1215E.52, subsection 3, Code 2017.
13DIVISION XI
14ANGEL INVESTOR TAX CREDIT
15 Sec. 53. Section 15E.43, subsection 2, paragraph a, Code
162017, is amended to read as follows:
17a. The amount of the tax credit shall equal twenty-five
18 twenty percent of the taxpayer’s equity investment.
19 Sec. 54. EFFECTIVE UPON ENACTMENT. This division of this
20Act, being deemed of immediate importance, takes effect upon
21enactment.
22 Sec. 55. APPLICABILITY. This division of this Act applies
23to equity investments in a qualifying business made on or
24after the effective date of this division of this Act, and
25equity investments in a qualifying business made prior to the
26effective date of this division of this Act shall be governed
27by section 15E.43, subsection 2, paragraph “a”, Code 2017.
28DIVISION XII
29RESEARCH ACTIVITIES TAX CREDIT
30 Sec. 56. Section 15.335, subsection 8, Code 2017, is amended
31to read as follows:
328. a. Except as provided in paragraph “b”, any credit in
33excess of the taxpayer’s tax liability for the tax year is not
34refundable but may be credited to the tax liability for the
35following eight years or until depleted, whichever is earlier.
-19- 1b. Any For a credit earned by an eligible business that is
2a new claimant, any credit in excess of the tax liability for
3the taxable year shall be refunded with interest computed under
4section 422.25. In lieu of claiming a refund, a taxpayer may
5elect to have the overpayment shown on its final, completed
6return credited to the tax liability for the following year.
7The amount of credit claimed by an individual or entity which
8credit amount was received from a partnership, S corporation,
9limited liability company, estate, or trust electing to
10have the income taxed directly to the owners, shall not be
11refundable pursuant to this paragraph “b” unless the eligible
12business that ultimately earned the credit is a new claimant.
13c. For purposes of this subsection, “new claimant” means the
14same as defined in section 422.10, subsection 3, paragraph “c”.
15 Sec. 57. Section 422.10, subsection 1, paragraph a,
16subparagraph (1), subparagraph divisions (a) and (b), Code
172017, are amended to read as follows:
18(a) Six Five and one-half percent of the excess of qualified
19research expenses during the tax year over the base amount for
20the tax year based upon the state’s apportioned share of the
21qualifying expenditures for increasing research activities.
22(b) Six Five and one-half percent of the basic research
23payments determined under section 41(e)(1)(A) of the Internal
24Revenue Code during the tax year based upon the state’s
25apportioned share of the qualifying expenditures for increasing
26research activities.
27 Sec. 58. Section 422.10, subsection 1, paragraph c, Code
282017, is amended to read as follows:
29c. For purposes of the alternate credit computation
30method in paragraph “b”, the credit percentages applicable to
31qualified research expenses described in section 41(c)(5)(A)
32and clause (ii) of section 41(c)(5)(B) of the Internal Revenue
33Code are four and fifty-five three and eighty-five hundredths
34percent and one and ninety-five sixty-one hundredths percent,
35respectively.
-20-1 Sec. 59. Section 422.10, subsection 2, Code 2017, is amended
2to read as follows:
32. For purposes of this section, an individual may
4claim a research credit incurred earned by a partnership,
5S corporation, limited liability company, estate, or trust
6electing to have the income taxed directly to the individual.
7The amount claimed by the individual shall be based upon the
8pro rata share of the individual’s earnings of a partnership, S
9corporation, limited liability company, estate, or trust.
10 Sec. 60. Section 422.10, subsection 3, Code 2017, is amended
11by adding the following new paragraph:
12 NEW PARAGRAPH. c. (1) For purposes of this section,
13“new claimant” means an entity that did not earn the research
14activities credit provided under this section, section 15.335,
15or section 422.33, subsection 5, for a tax year ending on or
16before January 1, 2014.
17(2) An entity that meets the requirements of subparagraph
18(1) shall be considered a new claimant for a period of five tax
19years beginning with the first tax year for which the entity
20earned the research activities credit provided under this
21section, section 15.335, or section 422.33, subsection 5.
22(3) Notwithstanding subparagraphs (1) and (2), an entity
23shall not be considered a new claimant if such entity is an
24affiliate of an entity that does not qualify as a new claimant
25under subparagraph (1), or is an affiliate of an entity that
26has exceeded the five-year period for a new claimant provided
27under subparagraph (2). For purposes of this subparagraph (3),
28“affiliate” means the same as defined in section 423.1.
29 Sec. 61. Section 422.10, subsection 4, Code 2017, is amended
30to read as follows:
314. a. Except as provided in paragraph “b”, any credit in
32excess of the taxpayer’s tax liability for the tax year is not
33refundable but may be credited to the tax liability for the
34following eight years or until depleted, whichever is earlier.
35b. Any For a credit earned by an entity that is a new
-21-1claimant, any credit in excess of the tax liability imposed by
2section 422.5 less the amounts of nonrefundable credits allowed
3under this division for the taxable year shall be refunded with
4interest computed under section 422.25. In lieu of claiming
5a refund, a taxpayer may elect to have the overpayment shown
6on the taxpayer’s final, completed return credited to the tax
7liability for the following taxable year. The amount of credit
8claimed by an individual or entity which credit amount was
9received from a partnership, S corporation, limited liability
10company, estate, or trust electing to have the income taxed
11directly to the owners, shall not be refundable pursuant to
12this paragraph “b” unless the partnership, S corporation,
13limited liability company, estate, or trust that ultimately
14earned the credit is a new claimant.
15 Sec. 62. Section 422.33, subsection 5, paragraph a,
16subparagraphs (1) and (2), Code 2017, are amended to read as
17follows:
18(1) Six Five and one-half percent of the excess of qualified
19research expenses during the tax year over the base amount for
20the tax year based upon the state’s apportioned share of the
21qualifying expenditures for increasing research activities.
22(2) Six Five and one-half percent of the basic research
23payments determined under section 41(e)(1)(A) of the Internal
24Revenue Code during the tax year based upon the state’s
25apportioned share of the qualifying expenditures for increasing
26research activities.
27 Sec. 63. Section 422.33, subsection 5, paragraph d, Code
282017, is amended to read as follows:
29d. For purposes of the alternate credit computation
30method in paragraph “c”, the credit percentages applicable to
31qualified research expenses described in section 41(c)(5)(A)
32and clause (ii) of section 41(c)(5)(B) of the Internal Revenue
33Code are four and fifty-five three and eighty-five hundredths
34percent and one and ninety-five sixty-one hundredths percent,
35respectively.
-22-1 Sec. 64. Section 422.33, subsection 5, paragraph f, Code
22017, is amended to read as follows:
3f. (1) Except as provided in subparagraph (2), any credit
4in excess of the taxpayer’s tax liability for the tax year is
5not refundable but may be credited to the tax liability for the
6following eight years or until depleted, whichever is earlier.
7(2) Any For a credit earned by a corporation that is a new
8claimant, any credit in excess of the tax liability for the
9taxable year shall be refunded with interest computed under
10section 422.25. In lieu of claiming a refund, a taxpayer may
11elect to have the overpayment shown on its final, completed
12return credited to the tax liability for the following
13taxable year. The amount of credit claimed by a corporation
14which credit amount was received from a partnership, limited
15liability company, estate, or trust electing to have the income
16taxed directly to the owners, shall not be refundable pursuant
17to this subparagraph (2) unless the partnership, limited
18liability company, estate, or trust that ultimately earned the
19credit is a new claimant.
20(3) For purposes of this paragraph, “new claimant” means the
21same as defined in section 422.10, subsection 3, paragraph “c”.
22 Sec. 65. EFFECTIVE DATE.
231. Except as provided in subsection 2, this division of this
24Act takes effect January 1, 2018.
252. The following provision or provisions of this division
26of this Act, being deemed of immediate importance, take effect
27upon enactment:
28a. The section of this division of this Act amending
29section 422.10, subsection 1, paragraph “a”, subparagraph (1),
30subparagraph divisions (a) and (b).
31b. The section of this division of this Act amending section
32422.10, subsection 1, paragraph “c”.
33c. The section of this division of this Act amending section
34422.33, subsection 5, paragraph “a”, subparagraphs (1) and (2).
35d. The section of this division of this Act amending section
-23-1422.33, subsection 5, paragraph “d”.
2 Sec. 66. RETROACTIVE AND OTHER APPLICABILITY.
31. Except as provided in subsection 2, this division of this
4Act applies to tax years ending on or after January 1, 2018.
52. The following provision or provisions of this division of
6this Act apply retroactively to January 1, 2017, for tax years
7ending on or after that date:
8a. The section of this division of this Act amending
9section 422.10, subsection 1, paragraph “a”, subparagraph (1),
10subparagraph divisions (a) and (b).
11b. The section of this division of this Act amending section
12422.10, subsection 1, paragraph “c”.
13c. The section of this division of this Act amending section
14422.33, subsection 5, paragraph “a”, subparagraphs (1) and (2).
15d. The section of this division of this Act amending section
16422.33, subsection 5, paragraph “d”.
17 Sec. 67. APPLICABILITY. The section of this division
18of this Act amending section 15.335, subsection 8, applies
19to research activities tax credit awards made under the high
20quality jobs program on or after the enactment date of this
21Act, and research activities tax credit awards made under the
22high quality jobs program prior to the enactment date of this
23Act shall be governed by section 15.335, subsection 8, Code
242017.
25DIVISION XIII
26ECONOMIC DEVELOPMENT AUTHORITY PROGRAMS AND AGGREGATE TAX
27CREDIT LIMIT
28 Sec. 68. Section 15.119, subsection 1, Code 2017, is amended
29to read as follows:
301. a. Notwithstanding any provision to the contrary in any
31of the programs listed in subsection 2, the authority, except
32as provided in paragraph “b”, shall not authorize and award for
33any one fiscal year an amount of tax credits for the programs
34specified in subsection 2 that is in excess of one hundred
35seventy twenty-eight million dollars.
-24- 1b. (1) The authority may authorize an amount of tax credits
2during a fiscal year that is in excess of the amount specified
3in paragraph “a”, but the amount of such excess shall not exceed
4twenty percent of the amount specified in paragraph “a”, and
5shall be counted against the total amount of tax credits that
6may be authorized for the next fiscal year.
7(2) Any amount of tax credits authorized and awarded during
8a fiscal year for a program specified in subsection 2 which are
9irrevocably declined by the awarded business on or before June
1030 of the next fiscal year may be reallocated, authorized, and
11awarded during the fiscal year in which the declination occurs.
12Tax credits authorized pursuant to this subparagraph shall not
13be considered for purposes of subparagraph (1).
14 Sec. 69. Section 15.119, subsection 2, paragraph a, Code
152017, is amended to read as follows:
16a. (1) The high quality jobs program administered pursuant
17to sections 15.326 through 15.336.
18(2) In allocating tax credits pursuant to this subsection
19for the fiscal year beginning July 1, 2016, and ending June 30,
202017, the authority shall not allocate more than one hundred
21five million dollars for purposes of this paragraph “a”. In
22allocating tax credits pursuant to this subsection for each
23fiscal year of the fiscal period beginning July 1, 2016 2017,
24and ending June 30, 2021, the authority shall not allocate more
25than one hundred five sixty-five million dollars for purposes
26of this paragraph “a”. This subparagraph (2) is repealed July
271, 2021.
28(3) (a) In allocating tax credits pursuant to this
29subsection for the fiscal year beginning July 1, 2021, and
30ending June 30, 2022, the authority shall not allocate more
31than one hundred five sixty-five million dollars for purposes
32of this paragraph “a” if the aggregate amount of renewable
33chemical production tax credits under section 15.319 that were
34awarded on or after July 1, 2018, but before July 1, 2021,
35equals or exceeds twenty-seven million dollars.
-25- 1(b) As soon as practicable after June 30, 2021, the
2authority shall notify the general assembly of the aggregate
3amount of renewable chemical production tax credits awarded
4under section 15.319 on or after July 1, 2018, but before
5July 1, 2021, and whether or not the tax credit allocation
6limitation described in subparagraph division (a) is
7applicable.
8(c) If the tax credit allocation limitation described in
9subparagraph division (a) is not applicable, the authority
10shall not allocate more than eighty million dollars for
11purposes of this paragraph “a” for the fiscal year beginning
12July 1, 2021, and ending June 30, 2022.
13(c) (d) This subparagraph (3) is repealed July 1, 2022.
14(4) In allocating tax credits pursuant to this subsection
15for fiscal years beginning on or after July 1, 2022, the
16authority shall not allocate more than eighty million dollars
17for purposes of this paragraph “a”.
18 Sec. 70. Section 15.119, subsection 3, Code 2017, is amended
19to read as follows:
203. In allocating the amount of tax credits authorized
21pursuant to subsection 1 among the programs specified in
22subsection 2, the authority shall not allocate more than ten
23 eight million dollars for purposes of subsection 2, paragraph
24“f”.
25DIVISION XIV
26TRANSFERS TO CASH RESERVE FUND AND TAXPAYERS TRUST FUND
27 Sec. 71. Section 8.57E, subsection 2, Code 2017, is amended
28to read as follows:
292. a. Moneys in the taxpayers trust fund shall only be used
30pursuant to appropriations or transfers made by the general
31assembly for tax relief.
32b. During each fiscal year beginning on or after July 1,
332014, in which the balance of the taxpayers trust fund equals
34or exceeds thirty million dollars, exclusive of the balance
35of the tax expenditure limitation account in subsection 2A,
-26-1there is transferred from the taxpayers trust fund to the
2Iowa taxpayers trust fund tax credit fund created in section
3422.11E, the entire balance of the taxpayers trust fund, except
4the balance of the tax expenditure limitation account in
5subsection 2A, to be used for the Iowa taxpayers trust fund tax
6credit in accordance with section 422.11E, subsection 5.
7 Sec. 72. Section 8.57E, Code 2017, is amended by adding the
8following new subsection:
9 NEW SUBSECTION. 2A. A tax expenditure limitation account
10shall be created as a separate account in the taxpayers trust
11fund that shall consist of transfers made pursuant to the
12section of this division of this Act entitled designated
13transfers, and moneys in the account shall not be commingled
14with other moneys within the taxpayers trust fund. Interest or
15earnings on moneys deposited in the account shall be credited
16to the account.
17 Sec. 73. Section 8.57E, subsection 4, Code 2017, is amended
18to read as follows:
194. Notwithstanding section 12C.7, subsection 2, interest or
20earnings on moneys deposited in the taxpayers trust fund shall
21be credited to the fund and, if applicable, to the appropriate
22account within the fund.
23 Sec. 74. DESIGNATED TRANSFERS.
241. It is the intent of the general assembly and the purposes
25of this subsection that the increased revenues to the general
26fund of the state resulting from the provisions of this Act, as
27estimated by the department of revenue, shall be transferred
28for a period of time to the cash reserve fund created in
29section 8.56 and the taxpayers trust fund created in section
308.57E and, to that end, the following transfers shall be made:
31a. During the fiscal year beginning July 1, 2017, and ending
32June 30, 2018, there is transferred from the general fund of
33the state to the cash reserve fund created in section 8.56,
34seven million three hundred fifty-eight thousand three hundred
35fifty-two dollars.
-27- 1b. During the fiscal year beginning July 1, 2018, and ending
2June 30, 2019, there is transferred from the general fund of
3the state to the tax expenditure limitation account in the
4taxpayers trust fund created in section 8.57E, thirty-three
5million five hundred six thousand eight hundred fifteen
6dollars.
7c. During the fiscal year beginning July 1, 2019, and ending
8June 30, 2020, there is transferred from the general fund of
9the state to the tax expenditure limitation account in the
10taxpayers trust fund created in section 8.57E, fifty-seven
11million six hundred ninety-three thousand one hundred forty-one
12dollars.
13d. During the fiscal year beginning July 1, 2020, and
14ending June 30, 2021, there is transferred from the general
15fund of the state to the tax expenditure limitation account in
16the taxpayers trust fund created in section 8.57E, sixty-five
17million two hundred thirteen thousand thirty-seven dollars.
182. It is the intent of the general assembly that the
19increased revenues to the general fund of the state resulting
20from the provisions of this Act in fiscal years beginning on
21or after July 1, 2021, shall, at a future time, be estimated
22by the department of revenue and transferred by an Act of the
23general assembly to the tax expenditure limitation account in
24the taxpayers trust fund created in section 8.57E.
25EXPLANATION
26The inclusion of this explanation does not constitute agreement with
27the explanation’s substance by the members of the general assembly.
28This bill relates to state revenue and finance by modifying
29numerous tax credits and tax credit programs and providing for
30transfers to the cash reserve fund and the taxpayers trust
31fund.
32DIVISION I — BEGINNING FARMER TAX CREDITS. Division
33I reduces the tax credit rates of the agricultural assets
34transfer tax credit in Code section 16.80 from 7 percent to
356 percent of the gross amount paid to a taxpayer pursuant
-28-1to an agricultural assets transfer agreement that includes a
2lease on a cash basis, and from 17 percent to 16 percent of
3the amount paid to the taxpayer under an agricultural assets
4transfer agreement that includes a lease on a commodity share
5basis. These changes take effect upon enactment and apply
6retroactively to January 1, 2017, for tax years beginning on
7or after that date.
8The current agricultural assets transfer tax credit program
9is scheduled under current law to be substantially modified
10beginning on January 1, 2018, and the division reduces the
11tax credit rates under that modified program from 5 percent
12to 4.5 percent of the amount paid under an agreement, or from
1315 percent to 14 percent of the amount paid for the sale of
14crops or animals for certain agreements in which the payment
15is exclusively made from the sale of crops or animals. These
16changes take effect January 1, 2018, and apply to tax years
17beginning on or after that date.
18The division also reduces the tax credit rates of the custom
19farming contract tax credit from 7 percent to 6 percent of the
20gross amount paid to the qualified beginning farmer under a
21contract. These changes take effect upon enactment and apply
22retroactively to January 1, 2017, for tax years beginning on
23or after that date.
24DIVISIONS II THROUGH V — FUEL TAX CREDITS. Divisions II
25through V make several changes to the biodiesel blended fuel
26tax credit under Code section 422.11P, the E-15 plus gasoline
27promotion tax credit under Code section 422.11Y, the E-85
28gasoline promotion tax credit under Code section 422.11O, and
29the ethanol promotion tax credit under Code section 422.11N
30(collectively referred to as the “fuel tax credits”).
31Under current law, the fuel tax credits have no limit on
32the aggregate amounts that may be claimed annually. The bill
33limits the maximum aggregate amount of tax credits that may
34be claimed to $16 million per calendar year for the biodiesel
35blended fuel tax credit, to $430,200 per calendar year for the
-29-1E-15 plus gasoline promotion tax credit, to $2,511,100 per
2calendar year for the E-85 gasoline promotion tax credit, and
3to $1,071,500 per calendar year for the ethanol promotion tax
4credit.
5Under current law, the fuel tax credits are all administered
6in a substantially similar manner and provide that a tax credit
7may be claimed by any retail dealer who meets the statutory
8requirements on a fiscal year or calendar year basis, depending
9on the tax year of the retail dealer. The bill provides
10that the fuel tax credits shall be calculated on a calendar
11year basis, and requires a retail dealer to submit an annual
12application to the department of revenue (DOR) in the manner
13and form prescribed by DOR. DOR is allowed to establish an
14application deadline or to require a retail dealer to apply
15for the fuel tax credits on or in conjunction with the retail
16dealer’s annual motor fuel gallonage report required under Code
17section 452A.33. The bill requires DOR to issue tax credit
18certificates to retail dealers for qualifying fuel tax credits,
19which tax credit certificates may be used as described in the
20bill to claim the applicable fuel tax credit. If the aggregate
21amount of fuel tax credit claims for a calendar year for any
22particular fuel tax credit exceeds the applicable maximum limit
23described above, DOR is required to reduce all tax credit
24claims for that fuel tax credit in a prorated fashion until the
25aggregate tax credit claims equal the applicable maximum amount
26described above.
27The bill includes transition provisions for a retail dealer
28with a fiscal tax year that apply to the retail dealer’s
292016-2017 tax year and that, in general, require a retail
30dealer to calculate a fuel tax credit under current law for
31that portion of the tax year that covers 2016, and then under
32the applicable Code sections as amended in the bill for any
33period beginning on or after January 1, 2017.
34Divisions II through V take effect upon enactment and apply
35retroactively to January 1, 2017, for tax years beginning on
-30-1or after that date, and for biodiesel blended fuel, qualifying
2ethanol blended gasoline, E-85 gasoline, or ethanol blended
3gasoline sold on or after that date.
4DIVISION VI — HISTORIC PRESERVATION AND CULTURAL AND
5ENTERTAINMENT DISTRICT TAX CREDIT. Division VI reduces the
6tax credit rate of the historic preservation and cultural and
7entertainment district tax credit in Code chapter 404A from 25
8percent to 15 percent of a qualified rehabilitation project’s
9expenditures. This change applies to qualified rehabilitation
10projects registered on or after July 1, 2017.
11The division also reduces from $45 million to $35 million the
12amount of tax credits that may be awarded each fiscal year by
13the economic development authority (EDA). This change takes
14effect July 1, 2017.
15DIVISION VII — SOLAR ENERGY SYSTEM TAX CREDIT. Division
16VII reduces the tax credit rate of the solar energy system tax
17credit in Code section 422.11L from 50 percent to 40 percent
18of the applicable federal energy tax credits available for the
19installation of certain solar energy property. This change
20takes effect upon enactment and applies to installations
21occurring on or after that date.
22The division also reduces from $5 million to $4 million
23the cumulative value of tax credits that may be claimed
24annually. This change takes effect upon enactment and applies
25retroactively to January 1, 2017, for tax years beginning on
26or after that date.
27DIVISION VIII — GEOTHERMAL HEAT PUMP TAX CREDIT. Division
28VIII reduces the tax credit rate of the geothermal heat pump
29tax credit in Code section 422.11I from 20 percent to 16
30percent of the applicable federal energy tax credit available
31for the installation of certain geothermal heat pump property.
32Under current law, there is no limit on the aggregate amount
33of tax credits that may be claimed annually. The division
34limits the maximum aggregate amount of tax credits per calendar
35year to $376,020, and requires a taxpayer to apply to DOR to
-31-1receive the tax credit. The tax credit application must be
2filed by May 1 following the calendar year of the qualified
3geothermal heat pump property installation. The division
4requires DOR to issue tax credit certificates to qualifying
5taxpayers on a first-come, first-served basis until the
6annual limit ($376,020) is reached, and establishes a wait
7list for qualifying taxpayers who do not receive a tax credit
8certificate because the tax credit limit has been reached.
9Taxpayers shall be placed on the wait list in the order the
10applications are received and shall be given priority for
11receiving a tax credit certificate in a future year, contingent
12on the availability of tax credits in that particular year.
13Tax credit certificates may be used as described in the
14division to claim the geothermal heat pump tax credit.
15The division takes effect upon enactment and applies
16retroactively to January 1, 2017, for tax years beginning on
17or after that date.
18DIVISION IX — GEOTHERMAL TAX CREDIT. Division IX reduces
19the tax credit rate of the geothermal tax credit in Code
20section 422.10A from 10 percent to 8 percent of a taxpayer’s
21qualified geothermal heat pump property expenditures. This
22change takes effect upon enactment and applies to qualified
23geothermal heat pump property installations occurring on or
24after that date.
25Under current law, there is no limit on the aggregate amount
26of tax credits that may be claimed annually. The division
27limits the maximum aggregate amount of tax credits per calendar
28year to $1.5 million, and requires a taxpayer to apply to DOR
29to receive the tax credit. The tax credit application must be
30filed by May 1 following the calendar year of the qualified
31geothermal heat pump property installation. The division
32requires DOR to issue tax credit certificates to qualifying
33taxpayers on a first-come, first-served basis until the annual
34limit ($1.5 million) is reached, and establishes a wait list
35for qualifying taxpayers who do not receive a tax credit
-32-1certificate because the tax credit limit has been reached.
2Taxpayers shall be placed on the wait list in the order the
3applications are received and shall be given priority for
4receiving a tax credit certificate in a future year, contingent
5on the availability of tax credits in that particular year.
6Tax credit certificates may be used as described in the
7division to claim the geothermal tax credit. These provisions
8take effect upon enactment and apply retroactively to January
91, 2017, for tax years beginning on or after that date, and
10for geothermal heat pump property installations occurring on
11or after that date.
12DIVISION X — INNOVATION FUND TAX CREDIT. Division X reduces
13the tax credit rate of the innovation fund tax credit in Code
14section 15E.52 from 25 percent to 20 percent of a taxpayer’s
15equity investment in an innovation fund. The division takes
16effect upon enactment and applies to equity investments in an
17innovation fund made on or after that date.
18DIVISION XI — ANGEL INVESTOR TAX CREDIT. Division XI
19reduces the tax credit rate of the tax credit for investments
20in a qualifying business (angel investor tax credit) in Code
21section 15E.43 from 25 percent to 20 percent of a taxpayer’s
22equity investment. The division takes effect upon enactment
23and applies to equity investments in a qualifying business made
24on or after that date.
25DIVISION XII — RESEARCH ACTIVITIES TAX CREDIT. Division
26XII makes several changes to the research activities tax
27credits under Code sections 15.335, 422.10, and 422.33(5).
28With regard to the research activities tax credits available
29under the individual income tax (Code section 422.10) and the
30corporate income tax (Code section 422.33(5)), the division
31reduces the tax credit rate for the regular calculation method
32from 6.5 percent to 5.5 percent, and the tax credit rates for
33the alternative simplified calculation method from 4.55 and
341.95 percents to 3.85 and 1.61 percents, respectively. These
35changes take effect upon enactment and apply retroactively to
-33-1January 1, 2017, for tax years ending on or after that date.
2Under current law, any research activities tax credit in
3excess of a taxpayer’s tax liability is refundable to the
4taxpayer. The division provides that research activities tax
5credits will no longer be refundable for tax years ending on
6or after January 1, 2018, unless the taxpayer is considered
7a new claimant, but any excess may be carried forward for up
8to eight years. The division defines “new claimant” to be an
9entity that did not earn a research activities tax credit for
10a tax year ending on or before January 1, 2014. A qualifying
11entity shall be considered a new claimant for a period of five
12tax years beginning with the first tax year for which the
13entity earns a research activities tax credit. However, an
14entity shall not be considered a new claimant if the entity is
15an affiliate of an entity that does not qualify or no longer
16qualifies as a new claimant. “Affiliate” is defined in the
17division.
18Research activities tax credits claimed by an individual or
19entity which credits were received from another pass-through
20entity shall not be considered refundable unless the entity
21that ultimately earned the tax credit qualified as a new
22claimant.
23These provisions relating to refundability take effect
24January 1, 2018, and apply to tax years ending on or after that
25date. However, the provisions relating to the refundability of
26the supplemental research activities tax credits (Code section
2715.335) awarded by EDA under the high quality jobs program
28apply to supplemental research activities tax credits awarded
29on or after the enactment date of the bill.
30DIVISION XIII — ECONOMIC DEVELOPMENT AUTHORITY PROGRAMS AND
31AGGREGATE TAX CREDIT LIMIT. Current law in Code section 15.119
32limits to $170 million the amount of tax credits that may
33be awarded by EDA per fiscal year under certain EDA programs
34(maximum aggregate tax credit limit). EDA may award up to 20
35percent more tax credits than that amount during a fiscal year,
-34-1but the excess is counted against the maximum aggregate tax
2credit limit for the next fiscal year. The bill decreases the
3maximum aggregate tax credit limit from $170 million to $128
4million and strikes EDA’s ability to exceed that amount during
5a fiscal year, for fiscal years beginning on or after July 1,
62017.
7Also under current law, the programs under EDA’s maximum
8aggregate tax credit limit are also subject to annual tax
9credit award limits, including the redevelopment tax credit
10program in Code sections 15.293A and 15.293B and the high
11quality jobs program administered pursuant to Code sections
1215.326 through 15.336. The division reduces the maximum amount
13of redevelopment tax credits that may be awarded per fiscal
14year from $10 million to $8 million for fiscal years beginning
15on or after July 1, 2017. The division reduces the maximum
16amount of high quality jobs program tax credits that may be
17awarded per fiscal year from $105 million to $65 million for
18each fiscal year of the four-year fiscal period beginning July
191, 2017, and ending June 30, 2021. The division provides that
20the maximum amount of high quality jobs program tax credits
21that may be awarded for FY 2021-2022 will be $65 million if
22the renewable chemical tax credit allocation limit described
23in Code section 15.119(2)(a)(3) is satisfied, or will be $80
24million if not satisfied. For fiscal years beginning on or
25after July 1, 2022, the maximum amount of high quality jobs
26program tax credits that may be awarded per fiscal year shall
27be $80 million.
28DIVISION XIV — TRANSFERS TO CASH RESERVE FUND AND TAXPAYERS
29TRUST FUND. Division XIV makes various transfers for four
30fiscal years of the estimated increased revenues from the tax
31credit changes in the bill. For FY 2017-2018, the division
32transfers $7,358,352 from the general fund to the cash
33reserve fund created in Code section 8.56. For FY 2018-2019,
34FY 2019-2020, and FY 2020-2021, the division transfers
35$33,506,815, $57,693,141, and $65,213,037, respectively, from
-35-1the general fund of the state to a tax expenditure limitation
2account created in the division within the taxpayers trust fund
3created in Code section 8.57E.
4The division also provides that it is the intent of the
5general assembly that the increased revenues from the tax
6credit changes in the bill in fiscal years beginning on or
7after July 1, 2022, shall, in the future, be estimated by DOR
8and transferred by an Act of the general assembly to the tax
9expenditure limitation account within the taxpayers trust fund.
-36-mm/sc/rj
2certain tax credits and tax credit programs and providing
3for transfers to the cash reserve fund and the taxpayers
4trust fund, and including effective date and retroactive and
5other applicability provisions.
6BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2BEGINNING FARMER TAX CREDITS
3 Section 1. Section 16.80, subsection 5, paragraph a,
4subparagraphs (1) and (2), Code 2017, are amended to read as
5follows:
6(1) If the qualified beginning farmer is not a veteran, the
7taxpayer may claim a tax credit equal to seven six percent of
8the gross amount paid to the taxpayer under the agreement for
9each tax year that the tax credit is allowed.
10(2) If the qualified beginning farmer is a veteran, the
11taxpayer may claim eight percent of the gross amount paid to
12the taxpayer under the agreement for the first year that the
13tax credit is allowed and seven six percent of the gross amount
14paid to the taxpayer for each subsequent tax year that the tax
15credit is allowed. However, the taxpayer may only claim seven
16 six percent of the gross amount paid to the taxpayer under
17a renewed agreement or a new agreement executed by the same
18parties.
19 Sec. 2. Section 16.80, subsection 5, paragraph b,
20subparagraph (1), Code 2017, is amended to read as follows:
21(1) (a) If the qualified beginning farmer is not a
22veteran, the taxpayer may claim a tax credit equal to seventeen
23 sixteen percent of the amount paid to the taxpayer from crops
24or animals sold under the agreement in which the payment is
25exclusively made from the sale of crops or animals.
26(b) If the qualified beginning farmer is a veteran, the
27taxpayer may claim a tax credit equal to eighteen percent of
28the amount paid to the taxpayer from crops or animals sold
29under the agreement for the first tax year that the taxpayer
30is allowed the tax credit and seventeen sixteen percent of the
31amount paid to the taxpayer for each subsequent tax year that
32the taxpayer is allowed the tax credit. However, the taxpayer
33may only claim seventeen sixteen percent of the amount paid to
34the taxpayer from crops or animals sold for any tax year under
35a renewed agreement or a new agreement executed by the same
-1-1parties.
2 Sec. 3. Section 16.80, subsection 5, paragraphs a and b,
3as enacted in 2014 Iowa Acts, chapter 1080, section 122, are
4amended to read as follows:
5a. Except as provided in paragraph “b”, the tax credit shall
6equal five four and one-half percent of the amount paid to the
7taxpayer under the agreement.
8b. The tax credit shall equal fifteen fourteen percent of
9the amount paid to the taxpayer from crops or animals sold
10under an agreement in which the payment is exclusively made
11from the sale of crops or animals.
12 Sec. 4. Section 16.81, subsection 8, paragraphs a and b,
13Code 2017, are amended to read as follows:
14a. If the qualified beginning farmer is not a veteran, the
15taxpayer may claim a tax credit equal to seven six percent of
16the gross amount paid to the qualified beginning farmer under
17the contract for each tax year that the tax credit is allowed.
18b. If the qualified beginning farmer is a veteran, the
19taxpayer may claim a tax credit equal to eight percent of the
20gross amount paid to the qualified beginning farmer under the
21contract for the first year that the tax credit is allowed and
22seven six percent of the gross amount paid to the qualified
23beginning farmer under the contract for each subsequent tax
24year that the tax credit is allowed. However, the taxpayer may
25only claim seven six percent of the gross amount paid to the
26qualified beginning farmer under a renewed contract or a new
27contract executed by the same parties.
28 Sec. 5. EFFECTIVE DATE.
291. Except as provided in subsection 2, this division of this
30Act, being deemed of immediate importance, takes effect upon
31enactment.
322. The section of this division of this Act amending section
3316.80, subsection 5, paragraphs “a” and “b”, as enacted in 2014
34Iowa Acts, chapter 1080, section 122, takes effect January 1,
352018.
-2-1 Sec. 6. RETROACTIVE AND OTHER APPLICABILITY.
21. Except as provided in subsection 2, this division of this
3Act applies retroactively to January 1, 2017, for tax years
4beginning on or after that date.
52. The section of this division of this Act amending section
616.80, subsection 5, paragraphs “a” and “b”, as enacted in 2014
7Iowa Acts, chapter 1080, section 122, applies to tax years
8beginning on or after January 1, 2018.
9DIVISION II
10BIODIESEL BLENDED FUEL TAX CREDIT
11 Sec. 7. Section 422.11P, subsection 3, paragraph a,
12subparagraph (1), Code 2017, is amended to read as follows:
13(1) The taxpayer is a retail dealer who sells and dispenses
14qualifying biodiesel blended fuel through a motor fuel pump
15located at the retail dealer’s retail motor fuel site during
16the calendar year or parts of the calendar years for which the
17tax credit is claimed as provided in this section.
18 Sec. 8. Section 422.11P, subsection 4, unnumbered paragraph
191, Code 2017, is amended to read as follows:
20For a retail dealer whose tax year is on a calendar year
21basis, the A retail dealer shall calculate the amount of the
22tax credit by multiplying a designated rate by the retail
23dealer’s total biodiesel blended fuel gallonage for the
24calendar year as provided in section 452A.31 which qualifies
25under this subsection.
26 Sec. 9. Section 422.11P, subsection 5, Code 2017, is amended
27by striking the subsection and inserting in lieu thereof the
28following:
295. a. To receive a tax credit under this section, a retail
30dealer must submit an application in the manner and form
31prescribed by the department. The department may establish an
32application deadline or require a retail dealer to apply for
33the credit on or in conjunction with the retail dealer’s annual
34report required under section 452A.33.
35b. The department shall issue tax credits and related tax
-3-1credit certificates to qualifying retail dealers on a calendar
2year basis, which tax credits shall not exceed an aggregate
3amount of sixteen million dollars per calendar year. In the
4event the aggregate amount of tax credit claims for a calendar
5year exceeds sixteen million dollars, the department shall
6reduce in a prorated fashion all tax credit claims until the
7aggregate credit claims equal sixteen million dollars.
8c. The tax credit may be claimed for the tax year ending
9on or after January 1 of the calendar year for which the tax
10credit is calculated as provided in subsection 4. For an
11individual claiming the tax credit allowed another entity
12pursuant to subsection 7, the tax credit may be claimed for the
13individual’s tax year beginning on or after the first day of
14the tax year for which the other entity was allowed to claim
15the tax credit.
16d. (1) To claim a tax credit under this section, a taxpayer
17shall include one or more tax credit certificates with the
18taxpayer’s tax return.
19(2) The tax credit certificate shall contain the taxpayer’s
20name, address, tax identification number, the amount of the
21credit, and any other information required by the department.
22(3) The tax credit certificate, unless rescinded by the
23department, shall be accepted by the department as payment
24for the taxes under this division or division III, subject
25to any conditions or restrictions placed by the department
26upon the face of the tax credit certificate and subject to the
27limitations of this section.
28 Sec. 10. EFFECTIVE UPON ENACTMENT. This division of this
29Act, being deemed of immediate importance, takes effect upon
30enactment.
31 Sec. 11. RETROACTIVE APPLICABILITY. This division of this
32Act applies retroactively to January 1, 2017, for tax years
33beginning on or after that date and for biodiesel blended fuel
34sold on or after that date.
35 Sec. 12. TRANSITION PROVISIONS. For a retail dealer whose
-4-1tax year is not on a calendar year basis, the retailer shall
2calculate tax credits for the tax year beginning in calendar
3year 2016, and ending in calendar year 2017 as follows:
41. For the period beginning on the first day of the retail
5dealer’s tax year until December 31, the retail dealer shall
6calculate a tax credit in the same manner as a retail dealer
7who calculates the tax credit on that same December 31 as
8provided in section 422.11P, subsection 4, Code 2017.
92. For any period beginning on or after January 1, 2017,
10the retail dealer shall calculate a tax credit as provided in
11section 422.11P, as amended in this division of this Act.
12DIVISION III
13E-15 PLUS GASOLINE PROMOTION TAX CREDIT
14 Sec. 13. Section 422.11Y, subsection 3, paragraph a,
15subparagraph (1), Code 2017, is amended to read as follows:
16(1) The taxpayer is a retail dealer who sells and dispenses
17qualifying ethanol blended gasoline through a motor fuel pump
18located at the retail dealer’s retail motor fuel site during
19the calendar year or parts of the calendar years for which the
20tax credit is claimed as provided in this section.
21 Sec. 14. Section 422.11Y, subsection 4, unnumbered
22paragraph 1, Code 2017, is amended to read as follows:
23For a retail dealer whose tax year is on a calendar year
24basis, the A retail dealer shall calculate the amount of the
25tax credit by multiplying a designated rate by the retail
26dealer’s total ethanol blended gasoline gallonage for the
27calendar year as provided in section 452A.31 which qualifies
28under this subsection.
29 Sec. 15. Section 422.11Y, subsection 5, Code 2017, is
30amended by striking the subsection and inserting in lieu
31thereof the following:
325. a. To receive a tax credit under this section, a retail
33dealer must submit an application in the manner and form
34prescribed by the department. The department may establish an
35application deadline or require a retail dealer to apply for
-5-1the credit on or in conjunction with the retail dealer’s annual
2report required under section 452A.33.
3b. The department shall issue tax credits and related tax
4credit certificates to qualifying retail dealers on a calendar
5year basis, which tax credits shall not exceed an aggregate
6amount of four hundred thirty thousand two hundred dollars per
7calendar year. In the event the aggregate amount of tax credit
8claims for a calendar year exceeds four hundred thirty thousand
9two hundred dollars, the department shall reduce in a prorated
10fashion all tax credit claims until the aggregate credit claims
11equal four hundred thirty thousand two hundred dollars.
12c. The tax credit may be claimed for the tax year ending
13on or after January 1 of the calendar year for which the tax
14credit is calculated as provided in subsection 4. For an
15individual claiming the tax credit allowed another entity
16pursuant to subsection 8, the tax credit may be claimed for the
17individual’s tax year beginning on or after the first day of
18the tax year for which the other entity was allowed to claim
19the tax credit.
20d. (1) To claim a tax credit under this section, a taxpayer
21shall include one or more tax credit certificates with the
22taxpayer’s tax return.
23(2) The tax credit certificate shall contain the taxpayer’s
24name, address, tax identification number, the amount of the
25credit, and any other information required by the department.
26(3) The tax credit certificate, unless rescinded by the
27department, shall be accepted by the department as payment
28for the taxes under this division or division III, subject
29to any conditions or restrictions placed by the department
30upon the face of the tax credit certificate and subject to the
31limitations of this section.
32 Sec. 16. EFFECTIVE UPON ENACTMENT. This division of this
33Act, being deemed of immediate importance, takes effect upon
34enactment.
35 Sec. 17. RETROACTIVE APPLICABILITY. This division of this
-6-1Act applies retroactively to January 1, 2017, for tax years
2beginning on or after that date and for qualifying ethanol
3blended gasoline sold on or after that date.
4 Sec. 18. TRANSITION PROVISIONS. For a retail dealer whose
5tax year is not on a calendar year basis, the retailer shall
6calculate tax credits for the tax year beginning in calendar
7year 2016, and ending in calendar year 2017 as follows:
81. For the period beginning on the first day of the retail
9dealer’s tax year until December 31, the retail dealer shall
10calculate a tax credit in the same manner as a retail dealer
11who calculates the tax credit on that same December 31 as
12provided in section 422.11Y, subsection 4, Code 2017.
132. For any period beginning on or after January 1, 2017,
14the retail dealer shall calculate a tax credit as provided in
15section 422.11Y, as amended in this division of this Act.
16DIVISION IV
17E-85 GASOLINE PROMOTION TAX CREDIT
18 Sec. 19. Section 422.11O, subsection 2, paragraph a,
19subparagraph (1), Code 2017, is amended to read as follows:
20(1) The taxpayer is a retail dealer who sells and dispenses
21E-85 gasoline through a motor fuel pump located at the retail
22dealer’s retail motor fuel site during the calendar year or
23parts of the calendar year for which the tax credit is claimed
24as provided in this section.
25 Sec. 20. Section 422.11O, subsection 3, Code 2017, is
26amended to read as follows:
273. For a retail dealer whose tax year is on a calendar year
28basis, the A retail dealer shall calculate the amount of the
29tax credit by multiplying a designated rate of sixteen cents
30by the retail dealer’s total E-85 gasoline gallonage for the
31calendar year as provided in sections 452A.31 and 452A.32.
32 Sec. 21. Section 422.11O, subsection 4, Code 2017, is
33amended by striking the subsection and inserting in lieu
34thereof the following:
354. a. To receive a tax credit under this section, a retail
-7-1dealer must submit an application in the manner and form
2prescribed by the department. The department may establish an
3application deadline or require a retail dealer to apply for
4the credit on or in conjunction with the retail dealer’s annual
5report required under section 452A.33.
6b. The department shall issue tax credits and related tax
7credit certificates to qualifying retail dealers on a calendar
8year basis, which tax credits shall not exceed an aggregate
9amount of two million five hundred eleven thousand one
10hundred dollars per calendar year. In the event the aggregate
11amount of tax credit claims for a calendar year exceeds two
12million five hundred eleven thousand one hundred dollars, the
13department shall reduce in a prorated fashion all tax credit
14claims until the aggregate credit claims equal two million five
15hundred eleven thousand one hundred dollars.
16c. The tax credit may be claimed for the tax year ending
17on or after January 1 of the calendar year for which the tax
18credit is calculated as provided in subsection 3. For an
19individual claiming the tax credit allowed another entity
20pursuant to subsection 7, the tax credit may be claimed for the
21individual’s tax year beginning on or after the first day of
22the tax year for which the other entity was allowed to claim
23the tax credit.
24d. (1) To claim a tax credit under this section, a taxpayer
25shall include one or more tax credit certificates with the
26taxpayer’s tax return.
27(2) The tax credit certificate shall contain the taxpayer’s
28name, address, tax identification number, the amount of the
29credit, and any other information required by the department.
30(3) The tax credit certificate, unless rescinded by the
31department, shall be accepted by the department as payment
32for the taxes under this division or division III, subject
33to any conditions or restrictions placed by the department
34upon the face of the tax credit certificate and subject to the
35limitations of this section.
-8-1 Sec. 22. EFFECTIVE UPON ENACTMENT. This division of this
2Act, being deemed of immediate importance, takes effect upon
3enactment.
4 Sec. 23. RETROACTIVE APPLICABILITY. This division of this
5Act applies retroactively to January 1, 2017, for tax years
6beginning on or after that date and for E-85 gasoline sold on
7or after that date.
8 Sec. 24. TRANSITION PROVISIONS. For a retail dealer whose
9tax year is not on a calendar year basis, the retailer shall
10calculate tax credits for the tax year beginning in calendar
11year 2016, and ending in calendar year 2017 as follows:
121. For the period beginning on the first day of the retail
13dealer’s tax year until December 31, the retail dealer shall
14calculate a tax credit in the same manner as a retail dealer
15who calculates the tax credit on that same December 31 as
16provided in section 422.11O, subsection 3, Code 2017.
172. For any period beginning on or after January 1, 2017,
18the retail dealer shall calculate a tax credit as provided in
19section 422.11O, as amended in this division of this Act.
20DIVISION V
21ETHANOL PROMOTION TAX CREDIT
22 Sec. 25. Section 422.11N, subsection 3, paragraph a, Code
232017, is amended to read as follows:
24a. The taxpayer is a retail dealer who sells and dispenses
25ethanol blended gasoline through a motor fuel pump located
26at the retail dealer’s retail motor fuel site during the
27determination period or parts of the determination periods for
28which the tax credit is claimed as provided in this section.
29 Sec. 26. Section 422.11N, subsection 6, paragraph a,
30unnumbered paragraph 1, Code 2017, is amended to read as
31follows:
32For a retail dealer whose tax year is the same as a
33determination period beginning on January 1 and ending on
34December 31, the A retail dealer’s tax credit is calculated
35by multiplying the retail dealer’s total ethanol gallonage
-9- 1for the determination period by a tax credit rate, which may
2be adjusted based on the retail dealer’s biofuel threshold
3percentage disparity. The tax credit rate is as follows:
4 Sec. 27. Section 422.11N, subsection 6, paragraph b, Code
52017, is amended by striking the paragraph.
6 Sec. 28. Section 422.11N, Code 2017, is amended by adding
7the following new subsection:
8 new subsection. 7A. a. To receive a tax credit under this
9section, a retail dealer must submit an application in the
10manner and form prescribed by the department. The department
11may establish an application deadline or require a retail
12dealer to apply for the credit on or in conjunction with the
13retail dealer’s annual report required under section 452A.33.
14b. The department shall issue tax credits and related tax
15credit certificates to qualifying retail dealers on a calendar
16year basis, which tax credits shall not exceed an aggregate
17amount of one million seventy-one thousand five hundred
18dollars per determination period. In the event the aggregate
19amount of tax credit claims for a determination period exceeds
20one million seventy-one thousand five hundred dollars, the
21department shall reduce in a prorated fashion all tax credit
22claims until the aggregate credit claims equal one million
23seventy-one thousand five hundred dollars.
24c. The tax credit may be claimed for the tax year ending
25on or after January 1 of the determination period for which
26the tax credit is calculated as provided in subsection 6. For
27an individual claiming the tax credit allowed another entity
28pursuant to subsection 9, the tax credit may be claimed for the
29individual’s tax year beginning on or after the first day of
30the tax year for which the other entity was allowed to claim
31the tax credit.
32d. (1) To claim a tax credit under this section, a taxpayer
33shall include one or more tax credit certificates with the
34taxpayer’s tax return.
35(2) The tax credit certificate shall contain the taxpayer’s
-10-1name, address, tax identification number, the amount of the
2credit, and any other information required by the department.
3(3) The tax credit certificate, unless rescinded by the
4department, shall be accepted by the department as payment
5for the taxes under this division or division III, subject
6to any conditions or restrictions placed by the department
7upon the face of the tax credit certificate and subject to the
8limitations of this section.
9 Sec. 29. EFFECTIVE UPON ENACTMENT. This division of this
10Act, being deemed of immediate importance, takes effect upon
11enactment.
12 Sec. 30. RETROACTIVE APPLICABILITY. This division of
13this Act applies retroactively to January 1, 2017, for tax
14years beginning on or after that date and for ethanol blended
15gasoline sold on or after that date.
16 Sec. 31. TRANSITION PROVISIONS. For a retail dealer whose
17tax year is not on a calendar year basis, the retailer shall
18calculate tax credits for the tax year beginning in calendar
19year 2016, and ending in calendar year 2017 as follows:
201. For the period beginning on the first day of the retail
21dealer’s tax year until December 31, the retail dealer shall
22calculate a tax credit in the same manner as a retail dealer
23who calculates the tax credit on that same December 31 as
24provided in section 422.11N, subsection 6, paragraph “a”, Code
252017.
262. For any period beginning on or after January 1, 2017,
27the retail dealer shall calculate a tax credit as provided in
28section 422.11N, as amended in this division of this Act.
29DIVISION VI
30HISTORIC PRESERVATION AND CULTURAL AND ENTERTAINMENT DISTRICT
31TAX CREDIT
32 Sec. 32. Section 404A.2, subsection 1, Code 2017, is amended
33to read as follows:
341. An eligible taxpayer who has entered into an agreement
35under section 404A.3, subsection 3, is eligible to receive a
-11-1historic preservation and cultural and entertainment district
2tax credit in an amount equal to twenty-five fifteen percent
3of the qualified rehabilitation expenditures of a qualified
4rehabilitation project that are specified in the agreement.
5Notwithstanding any other provision of this chapter or any
6provision in the agreement to the contrary, the amount of the
7tax credits shall not exceed twenty-five fifteen percent of the
8final qualified rehabilitation expenditures verified by the
9authority pursuant to section 404A.3, subsection 5, paragraph
10“c”.
11 Sec. 33. Section 404A.4, subsection 1, paragraph a, Code
122017, is amended to read as follows:
13a. Except as provided in subsections 2 and 3, the authority
14shall not award in any one fiscal year an amount of tax credits
15provided in section 404A.2 in excess of forty-five thirty-five
16 million dollars.
17 Sec. 34. APPLICABILITY. This section of this division
18of this Act amending section 404A.2, subsection 1, applies
19to qualified rehabilitation projects registered on or after
20July 1, 2017, and qualified rehabilitation projects registered
21prior to July 1, 2017, shall be governed by section 404A.2,
22subsection 1, Code 2017.
23DIVISION VII
24SOLAR ENERGY SYSTEM TAX CREDIT
25 Sec. 35. Section 422.11L, subsection 1, Code 2017, is
26amended to read as follows:
271. The taxes imposed under this division, less the credits
28allowed under section 422.12, shall be reduced by a solar
29energy system tax credit equal to the sum of the following:
30a. Sixty Forty percent of the federal residential energy
31efficient property credit related to solar energy provided in
32section 25D(a)(1) and section 25D(a)(2) of the Internal Revenue
33Code, not to exceed five thousand dollars.
34b. Sixty Forty percent of the federal energy credit related
35to solar energy systems provided in section 48(a)(2)(A)(i)(II)
-12-1and section 48(a)(2)(A)(i)(III) of the Internal Revenue Code,
2not to exceed twenty thousand dollars.
3c. Notwithstanding paragraphs “a” and “b” of this
4subsection, for installations occurring on or after January 1,
52016, the applicable percentages of the federal residential
6energy efficiency property tax credit related to solar energy
7and the federal energy credit related to solar energy systems
8shall be fifty percent.
9 Sec. 36. Section 422.11L, subsection 4, paragraph a, Code
102017, is amended to read as follows:
11a. The cumulative value of tax credits claimed annually by
12applicants pursuant to this section shall not exceed five four
13 million dollars. Of this amount, at least one million dollars
14shall be reserved for claims associated with or resulting from
15residential solar energy system installations. In the event
16that the total amount of claims submitted for residential solar
17energy system installations in a tax year is an amount less
18than one million dollars, the remaining unclaimed reserved
19amount shall be made available for claims associated with or
20resulting from nonresidential solar energy system installations
21received for the tax year.
22 Sec. 37. Section 422.33, subsection 29, paragraph a, Code
232017, is amended to read as follows:
24a. The taxes imposed under this division shall be reduced
25by a solar energy system tax credit equal to sixty forty
26 percent of the federal energy credit related to solar energy
27systems provided in section 48(a)(2)(A)(i)(II) and section
2848(a)(2)(A)(i)(III) of the Internal Revenue Code, not to exceed
29twenty thousand dollars. For installations occurring on or
30after January 1, 2016, the applicable percentage of the federal
31energy credit related to solar energy systems shall be fifty
32percent.
33 Sec. 38. Section 422.60, subsection 12, paragraph a, Code
342017, is amended to read as follows:
35a. The taxes imposed under this division shall be reduced
-13-1by a solar energy system tax credit equal to sixty forty
2 percent of the federal energy credit related to solar energy
3systems provided in section 48(a)(2)(A)(i)(II) and section
448(a)(2)(A)(i)(III) of the Internal Revenue Code, not to exceed
5twenty thousand dollars. For installations occurring on or
6after January 1, 2016, the applicable percentage of the federal
7energy credit related to solar energy systems shall be fifty
8percent.
9 Sec. 39. EFFECTIVE UPON ENACTMENT. This division of this
10Act, being deemed of immediate importance, takes effect upon
11enactment.
12 Sec. 40. RETROACTIVE APPLICABILITY. The following
13provision or provisions of this division of this Act apply
14retroactively to January 1, 2017, for tax years beginning and
15installations occurring on or after that date:
161. The section of this division of this Act amending section
17422.11L, subsection 4, paragraph “a”.
18 Sec. 41. APPLICABILITY. The following provision or
19provisions of this division of this Act apply to installations
20occurring on or after the effective date of this division of
21this Act:
221. The section of this division of this Act amending section
23422.11L, subsection 1.
242. The section of this division of this Act amending section
25422.33, subsection 29, paragraph “a”.
263. The section of this division of this Act amending section
27422.60, subsection 12, paragraph “a”.
28DIVISION VIII
29GEOTHERMAL HEAT PUMP TAX CREDIT
30 Sec. 42. Section 422.11I, Code 2017, is amended to read as
31follows:
32422.11I Geothermal heat pump tax credit.
331. The taxes imposed under this division, less the credits
34allowed under section 422.12, shall be reduced by a geothermal
35heat pump tax credit equal to twenty sixteen percent of the
-14-1federal residential energy efficient property tax credit
2allowed for geothermal heat pumps provided in section 25D(a)(5)
3of the Internal Revenue Code for residential property located
4in Iowa.
52. a. To receive a tax credit under this section, a
6taxpayer must submit an application in the manner and form
7prescribed by the department by May 1 following the calendar
8year of the installation of the qualified geothermal heat
9pump property that is the subject of the federal credit. The
10application must be approved by the department in order to
11receive a tax credit certificate and claim the tax credit.
12b. The department shall issue tax credits and related
13tax credit certificates on a first-come, first-served basis
14in the order the applications are received until the maximum
15amount of tax credits authorized pursuant to subsection 3 is
16reached. If for a calendar year the maximum amount of tax
17credits applied for exceeds the amount specified in subsection
183, the department shall establish a wait list for tax credits.
19Valid applications filed by the taxpayer by May 1 following
20the calendar year of the installation but not approved by
21the department shall be placed on a wait list in the order
22the applications were received and those applicants shall
23be given priority for having their applications approved
24in succeeding years. Placement on a wait list pursuant to
25this paragraph shall not constitute a promise binding the
26state. The availability of a tax credit and issuance of a tax
27credit certificate pursuant to this section in a future year
28is contingent upon the availability of tax credits in that
29particular year.
30c. For tax credit certificates issued in the calendar
31year of the installation or the calendar year following the
32installation, the tax credit may be claimed for the applicant’s
33tax year during which the installation was completed. For tax
34credit certificates issued in any later calendar year, the tax
35credit may be claimed for the applicant’s tax year during which
-15-1the tax credit is issued.
2d. (1) To claim a tax credit under this section, a taxpayer
3shall include one or more tax credit certificates with the
4taxpayer’s tax return.
5(2) The tax credit certificate shall contain the taxpayer’s
6name, address, tax identification number, the amount of the
7credit, and any other information required by the department.
8(3) The tax credit certificate, unless rescinded by the
9department, shall be accepted by the department as payment
10for the taxes imposed under this division, subject to any
11conditions or restrictions placed by the department upon
12the face of the tax credit certificate and subject to the
13limitations of this section.
143. The maximum aggregate amount of tax credits issued in a
15calendar year pursuant to this section shall not exceed three
16hundred seventy-six thousand twenty dollars.
174. Any credit in excess of the tax liability is not
18refundable but the excess for the tax year may be credited
19to the tax liability for the following ten years or until
20depleted, whichever is earlier.
215. The director of revenue shall adopt rules to implement
22this section.
23 Sec. 43. EFFECTIVE UPON ENACTMENT. This division of this
24Act, being deemed of immediate importance, takes effect upon
25enactment.
26 Sec. 44. RETROACTIVE APPLICABILITY. This division of this
27Act applies retroactively to January 1, 2017, for tax years
28beginning on or after that date.
29DIVISION IX
30GEOTHERMAL TAX CREDIT
31 Sec. 45. Section 422.10A, subsection 2, Code 2017, is
32amended to read as follows:
332. Except as provided in subsection 6, the taxes imposed
34under this division, less the credits allowed under section
35422.12, shall be reduced by a geothermal tax credit equal
-16-1to ten eight percent of the qualified geothermal heat pump
2property expenditures made by the taxpayer during the tax year.
3 Sec. 46. Section 422.10A, Code 2017, is amended by adding
4the following new subsections:
5 NEW SUBSECTION. 4A. a. To receive a tax credit under this
6section, a taxpayer must submit an application in the manner
7and form prescribed by the department by May 1 following the
8calendar year of the installation of the qualified geothermal
9heat pump property. The application must be approved by the
10department in order to receive a tax credit certificate and
11claim the tax credit.
12b. The department shall issue tax credits and related
13tax credit certificates on a first-come, first-served basis
14in the order the applications are received until the maximum
15amount of tax credits authorized pursuant to subsection 4B is
16reached. If for a calendar year the maximum amount of tax
17credits applied for exceeds the amount specified in subsection
184B, the department shall establish a wait list for tax credits.
19Valid applications filed by the taxpayer by May 1 following
20the calendar year of the installation but not approved by
21the department shall be placed on a wait list in the order
22the applications were received and those applicants shall
23be given priority for having their applications approved
24in succeeding years. Placement on a wait list pursuant to
25this paragraph shall not constitute a promise binding the
26state. The availability of a tax credit and issuance of a tax
27credit certificate pursuant to this section in a future year
28is contingent upon the availability of tax credits in that
29particular year.
30c. For tax credit certificates issued in the calendar
31year of the installation or the calendar year following the
32installation, the tax credit may be claimed for the applicant’s
33tax year during which the installation was completed. For tax
34credit certificates issued in any later calendar year, the tax
35credit may be claimed for the applicant’s tax year during which
-17-1the tax credit is issued.
2d. (1) To claim a tax credit under this section, a taxpayer
3shall include one or more tax credit certificates with the
4taxpayer’s tax return.
5(2) The tax credit certificate shall contain the taxpayer’s
6name, address, tax identification number, the amount of the
7credit, and any other information required by the department.
8(3) The tax credit certificate, unless rescinded by the
9department, shall be accepted by the department as payment
10for the taxes imposed under this division, subject to any
11conditions or restrictions placed by the department upon
12the face of the tax credit certificate and subject to the
13limitations of this section.
14 NEW SUBSECTION. 4B. The maximum aggregate amount of tax
15credits issued in a calendar year pursuant to this section
16shall not exceed one million five hundred thousand dollars.
17 Sec. 47. EFFECTIVE UPON ENACTMENT. This division of this
18Act, being deemed of immediate importance, takes effect upon
19enactment.
20 Sec. 48. RETROACTIVE APPLICABILITY. The following
21provision or provisions of this division of this Act apply
22retroactively to January 1, 2017, for tax years beginning and
23installations occurring on or after that date:
241. The sections of this division of this Act enacting
25section 422.10A, subsections 4A and 4B.
26 Sec. 49. APPLICABILITY. The following provision or
27provisions of this division of this Act apply to installations
28occurring on or after the effective date of this division of
29this Act:
301. The section of this division of this Act amending section
31422.10A, subsection 2.
32DIVISION X
33INNOVATION FUND TAX CREDIT
34 Sec. 50. Section 15E.52, subsection 3, Code 2017, is amended
35to read as follows:
-18- 13. The amount of a tax credit allowed under this section
2shall equal twenty-five twenty percent of the taxpayer’s equity
3investment in an innovation fund.
4 Sec. 51. EFFECTIVE UPON ENACTMENT. This division of this
5Act, being deemed of immediate importance, takes effect upon
6enactment.
7 Sec. 52. APPLICABILITY. This division of this Act applies
8to equity investments in an innovation fund made on or after
9the effective date of this division of this Act, and equity
10investments in an innovation fund made prior to the effective
11date of this division of this Act shall be governed by section
1215E.52, subsection 3, Code 2017.
13DIVISION XI
14ANGEL INVESTOR TAX CREDIT
15 Sec. 53. Section 15E.43, subsection 2, paragraph a, Code
162017, is amended to read as follows:
17a. The amount of the tax credit shall equal twenty-five
18 twenty percent of the taxpayer’s equity investment.
19 Sec. 54. EFFECTIVE UPON ENACTMENT. This division of this
20Act, being deemed of immediate importance, takes effect upon
21enactment.
22 Sec. 55. APPLICABILITY. This division of this Act applies
23to equity investments in a qualifying business made on or
24after the effective date of this division of this Act, and
25equity investments in a qualifying business made prior to the
26effective date of this division of this Act shall be governed
27by section 15E.43, subsection 2, paragraph “a”, Code 2017.
28DIVISION XII
29RESEARCH ACTIVITIES TAX CREDIT
30 Sec. 56. Section 15.335, subsection 8, Code 2017, is amended
31to read as follows:
328. a. Except as provided in paragraph “b”, any credit in
33excess of the taxpayer’s tax liability for the tax year is not
34refundable but may be credited to the tax liability for the
35following eight years or until depleted, whichever is earlier.
-19- 1b. Any For a credit earned by an eligible business that is
2a new claimant, any credit in excess of the tax liability for
3the taxable year shall be refunded with interest computed under
4section 422.25. In lieu of claiming a refund, a taxpayer may
5elect to have the overpayment shown on its final, completed
6return credited to the tax liability for the following year.
7The amount of credit claimed by an individual or entity which
8credit amount was received from a partnership, S corporation,
9limited liability company, estate, or trust electing to
10have the income taxed directly to the owners, shall not be
11refundable pursuant to this paragraph “b” unless the eligible
12business that ultimately earned the credit is a new claimant.
13c. For purposes of this subsection, “new claimant” means the
14same as defined in section 422.10, subsection 3, paragraph “c”.
15 Sec. 57. Section 422.10, subsection 1, paragraph a,
16subparagraph (1), subparagraph divisions (a) and (b), Code
172017, are amended to read as follows:
18(a) Six Five and one-half percent of the excess of qualified
19research expenses during the tax year over the base amount for
20the tax year based upon the state’s apportioned share of the
21qualifying expenditures for increasing research activities.
22(b) Six Five and one-half percent of the basic research
23payments determined under section 41(e)(1)(A) of the Internal
24Revenue Code during the tax year based upon the state’s
25apportioned share of the qualifying expenditures for increasing
26research activities.
27 Sec. 58. Section 422.10, subsection 1, paragraph c, Code
282017, is amended to read as follows:
29c. For purposes of the alternate credit computation
30method in paragraph “b”, the credit percentages applicable to
31qualified research expenses described in section 41(c)(5)(A)
32and clause (ii) of section 41(c)(5)(B) of the Internal Revenue
33Code are four and fifty-five three and eighty-five hundredths
34percent and one and ninety-five sixty-one hundredths percent,
35respectively.
-20-1 Sec. 59. Section 422.10, subsection 2, Code 2017, is amended
2to read as follows:
32. For purposes of this section, an individual may
4claim a research credit incurred earned by a partnership,
5S corporation, limited liability company, estate, or trust
6electing to have the income taxed directly to the individual.
7The amount claimed by the individual shall be based upon the
8pro rata share of the individual’s earnings of a partnership, S
9corporation, limited liability company, estate, or trust.
10 Sec. 60. Section 422.10, subsection 3, Code 2017, is amended
11by adding the following new paragraph:
12 NEW PARAGRAPH. c. (1) For purposes of this section,
13“new claimant” means an entity that did not earn the research
14activities credit provided under this section, section 15.335,
15or section 422.33, subsection 5, for a tax year ending on or
16before January 1, 2014.
17(2) An entity that meets the requirements of subparagraph
18(1) shall be considered a new claimant for a period of five tax
19years beginning with the first tax year for which the entity
20earned the research activities credit provided under this
21section, section 15.335, or section 422.33, subsection 5.
22(3) Notwithstanding subparagraphs (1) and (2), an entity
23shall not be considered a new claimant if such entity is an
24affiliate of an entity that does not qualify as a new claimant
25under subparagraph (1), or is an affiliate of an entity that
26has exceeded the five-year period for a new claimant provided
27under subparagraph (2). For purposes of this subparagraph (3),
28“affiliate” means the same as defined in section 423.1.
29 Sec. 61. Section 422.10, subsection 4, Code 2017, is amended
30to read as follows:
314. a. Except as provided in paragraph “b”, any credit in
32excess of the taxpayer’s tax liability for the tax year is not
33refundable but may be credited to the tax liability for the
34following eight years or until depleted, whichever is earlier.
35b. Any For a credit earned by an entity that is a new
-21-1claimant, any credit in excess of the tax liability imposed by
2section 422.5 less the amounts of nonrefundable credits allowed
3under this division for the taxable year shall be refunded with
4interest computed under section 422.25. In lieu of claiming
5a refund, a taxpayer may elect to have the overpayment shown
6on the taxpayer’s final, completed return credited to the tax
7liability for the following taxable year. The amount of credit
8claimed by an individual or entity which credit amount was
9received from a partnership, S corporation, limited liability
10company, estate, or trust electing to have the income taxed
11directly to the owners, shall not be refundable pursuant to
12this paragraph “b” unless the partnership, S corporation,
13limited liability company, estate, or trust that ultimately
14earned the credit is a new claimant.
15 Sec. 62. Section 422.33, subsection 5, paragraph a,
16subparagraphs (1) and (2), Code 2017, are amended to read as
17follows:
18(1) Six Five and one-half percent of the excess of qualified
19research expenses during the tax year over the base amount for
20the tax year based upon the state’s apportioned share of the
21qualifying expenditures for increasing research activities.
22(2) Six Five and one-half percent of the basic research
23payments determined under section 41(e)(1)(A) of the Internal
24Revenue Code during the tax year based upon the state’s
25apportioned share of the qualifying expenditures for increasing
26research activities.
27 Sec. 63. Section 422.33, subsection 5, paragraph d, Code
282017, is amended to read as follows:
29d. For purposes of the alternate credit computation
30method in paragraph “c”, the credit percentages applicable to
31qualified research expenses described in section 41(c)(5)(A)
32and clause (ii) of section 41(c)(5)(B) of the Internal Revenue
33Code are four and fifty-five three and eighty-five hundredths
34percent and one and ninety-five sixty-one hundredths percent,
35respectively.
-22-1 Sec. 64. Section 422.33, subsection 5, paragraph f, Code
22017, is amended to read as follows:
3f. (1) Except as provided in subparagraph (2), any credit
4in excess of the taxpayer’s tax liability for the tax year is
5not refundable but may be credited to the tax liability for the
6following eight years or until depleted, whichever is earlier.
7(2) Any For a credit earned by a corporation that is a new
8claimant, any credit in excess of the tax liability for the
9taxable year shall be refunded with interest computed under
10section 422.25. In lieu of claiming a refund, a taxpayer may
11elect to have the overpayment shown on its final, completed
12return credited to the tax liability for the following
13taxable year. The amount of credit claimed by a corporation
14which credit amount was received from a partnership, limited
15liability company, estate, or trust electing to have the income
16taxed directly to the owners, shall not be refundable pursuant
17to this subparagraph (2) unless the partnership, limited
18liability company, estate, or trust that ultimately earned the
19credit is a new claimant.
20(3) For purposes of this paragraph, “new claimant” means the
21same as defined in section 422.10, subsection 3, paragraph “c”.
22 Sec. 65. EFFECTIVE DATE.
231. Except as provided in subsection 2, this division of this
24Act takes effect January 1, 2018.
252. The following provision or provisions of this division
26of this Act, being deemed of immediate importance, take effect
27upon enactment:
28a. The section of this division of this Act amending
29section 422.10, subsection 1, paragraph “a”, subparagraph (1),
30subparagraph divisions (a) and (b).
31b. The section of this division of this Act amending section
32422.10, subsection 1, paragraph “c”.
33c. The section of this division of this Act amending section
34422.33, subsection 5, paragraph “a”, subparagraphs (1) and (2).
35d. The section of this division of this Act amending section
-23-1422.33, subsection 5, paragraph “d”.
2 Sec. 66. RETROACTIVE AND OTHER APPLICABILITY.
31. Except as provided in subsection 2, this division of this
4Act applies to tax years ending on or after January 1, 2018.
52. The following provision or provisions of this division of
6this Act apply retroactively to January 1, 2017, for tax years
7ending on or after that date:
8a. The section of this division of this Act amending
9section 422.10, subsection 1, paragraph “a”, subparagraph (1),
10subparagraph divisions (a) and (b).
11b. The section of this division of this Act amending section
12422.10, subsection 1, paragraph “c”.
13c. The section of this division of this Act amending section
14422.33, subsection 5, paragraph “a”, subparagraphs (1) and (2).
15d. The section of this division of this Act amending section
16422.33, subsection 5, paragraph “d”.
17 Sec. 67. APPLICABILITY. The section of this division
18of this Act amending section 15.335, subsection 8, applies
19to research activities tax credit awards made under the high
20quality jobs program on or after the enactment date of this
21Act, and research activities tax credit awards made under the
22high quality jobs program prior to the enactment date of this
23Act shall be governed by section 15.335, subsection 8, Code
242017.
25DIVISION XIII
26ECONOMIC DEVELOPMENT AUTHORITY PROGRAMS AND AGGREGATE TAX
27CREDIT LIMIT
28 Sec. 68. Section 15.119, subsection 1, Code 2017, is amended
29to read as follows:
301. a. Notwithstanding any provision to the contrary in any
31of the programs listed in subsection 2, the authority, except
32as provided in paragraph “b”, shall not authorize and award for
33any one fiscal year an amount of tax credits for the programs
34specified in subsection 2 that is in excess of one hundred
35seventy twenty-eight million dollars.
-24- 1b. (1) The authority may authorize an amount of tax credits
2during a fiscal year that is in excess of the amount specified
3in paragraph “a”, but the amount of such excess shall not exceed
4twenty percent of the amount specified in paragraph “a”, and
5shall be counted against the total amount of tax credits that
6may be authorized for the next fiscal year.
7(2) Any amount of tax credits authorized and awarded during
8a fiscal year for a program specified in subsection 2 which are
9irrevocably declined by the awarded business on or before June
1030 of the next fiscal year may be reallocated, authorized, and
11awarded during the fiscal year in which the declination occurs.
12Tax credits authorized pursuant to this subparagraph shall not
13be considered for purposes of subparagraph (1).
14 Sec. 69. Section 15.119, subsection 2, paragraph a, Code
152017, is amended to read as follows:
16a. (1) The high quality jobs program administered pursuant
17to sections 15.326 through 15.336.
18(2) In allocating tax credits pursuant to this subsection
19for the fiscal year beginning July 1, 2016, and ending June 30,
202017, the authority shall not allocate more than one hundred
21five million dollars for purposes of this paragraph “a”. In
22allocating tax credits pursuant to this subsection for each
23fiscal year of the fiscal period beginning July 1, 2016 2017,
24and ending June 30, 2021, the authority shall not allocate more
25than one hundred five sixty-five million dollars for purposes
26of this paragraph “a”. This subparagraph (2) is repealed July
271, 2021.
28(3) (a) In allocating tax credits pursuant to this
29subsection for the fiscal year beginning July 1, 2021, and
30ending June 30, 2022, the authority shall not allocate more
31than one hundred five sixty-five million dollars for purposes
32of this paragraph “a” if the aggregate amount of renewable
33chemical production tax credits under section 15.319 that were
34awarded on or after July 1, 2018, but before July 1, 2021,
35equals or exceeds twenty-seven million dollars.
-25- 1(b) As soon as practicable after June 30, 2021, the
2authority shall notify the general assembly of the aggregate
3amount of renewable chemical production tax credits awarded
4under section 15.319 on or after July 1, 2018, but before
5July 1, 2021, and whether or not the tax credit allocation
6limitation described in subparagraph division (a) is
7applicable.
8(c) If the tax credit allocation limitation described in
9subparagraph division (a) is not applicable, the authority
10shall not allocate more than eighty million dollars for
11purposes of this paragraph “a” for the fiscal year beginning
12July 1, 2021, and ending June 30, 2022.
13(c) (d) This subparagraph (3) is repealed July 1, 2022.
14(4) In allocating tax credits pursuant to this subsection
15for fiscal years beginning on or after July 1, 2022, the
16authority shall not allocate more than eighty million dollars
17for purposes of this paragraph “a”.
18 Sec. 70. Section 15.119, subsection 3, Code 2017, is amended
19to read as follows:
203. In allocating the amount of tax credits authorized
21pursuant to subsection 1 among the programs specified in
22subsection 2, the authority shall not allocate more than ten
23 eight million dollars for purposes of subsection 2, paragraph
24“f”.
25DIVISION XIV
26TRANSFERS TO CASH RESERVE FUND AND TAXPAYERS TRUST FUND
27 Sec. 71. Section 8.57E, subsection 2, Code 2017, is amended
28to read as follows:
292. a. Moneys in the taxpayers trust fund shall only be used
30pursuant to appropriations or transfers made by the general
31assembly for tax relief.
32b. During each fiscal year beginning on or after July 1,
332014, in which the balance of the taxpayers trust fund equals
34or exceeds thirty million dollars, exclusive of the balance
35of the tax expenditure limitation account in subsection 2A,
-26-1there is transferred from the taxpayers trust fund to the
2Iowa taxpayers trust fund tax credit fund created in section
3422.11E, the entire balance of the taxpayers trust fund, except
4the balance of the tax expenditure limitation account in
5subsection 2A, to be used for the Iowa taxpayers trust fund tax
6credit in accordance with section 422.11E, subsection 5.
7 Sec. 72. Section 8.57E, Code 2017, is amended by adding the
8following new subsection:
9 NEW SUBSECTION. 2A. A tax expenditure limitation account
10shall be created as a separate account in the taxpayers trust
11fund that shall consist of transfers made pursuant to the
12section of this division of this Act entitled designated
13transfers, and moneys in the account shall not be commingled
14with other moneys within the taxpayers trust fund. Interest or
15earnings on moneys deposited in the account shall be credited
16to the account.
17 Sec. 73. Section 8.57E, subsection 4, Code 2017, is amended
18to read as follows:
194. Notwithstanding section 12C.7, subsection 2, interest or
20earnings on moneys deposited in the taxpayers trust fund shall
21be credited to the fund and, if applicable, to the appropriate
22account within the fund.
23 Sec. 74. DESIGNATED TRANSFERS.
241. It is the intent of the general assembly and the purposes
25of this subsection that the increased revenues to the general
26fund of the state resulting from the provisions of this Act, as
27estimated by the department of revenue, shall be transferred
28for a period of time to the cash reserve fund created in
29section 8.56 and the taxpayers trust fund created in section
308.57E and, to that end, the following transfers shall be made:
31a. During the fiscal year beginning July 1, 2017, and ending
32June 30, 2018, there is transferred from the general fund of
33the state to the cash reserve fund created in section 8.56,
34seven million three hundred fifty-eight thousand three hundred
35fifty-two dollars.
-27- 1b. During the fiscal year beginning July 1, 2018, and ending
2June 30, 2019, there is transferred from the general fund of
3the state to the tax expenditure limitation account in the
4taxpayers trust fund created in section 8.57E, thirty-three
5million five hundred six thousand eight hundred fifteen
6dollars.
7c. During the fiscal year beginning July 1, 2019, and ending
8June 30, 2020, there is transferred from the general fund of
9the state to the tax expenditure limitation account in the
10taxpayers trust fund created in section 8.57E, fifty-seven
11million six hundred ninety-three thousand one hundred forty-one
12dollars.
13d. During the fiscal year beginning July 1, 2020, and
14ending June 30, 2021, there is transferred from the general
15fund of the state to the tax expenditure limitation account in
16the taxpayers trust fund created in section 8.57E, sixty-five
17million two hundred thirteen thousand thirty-seven dollars.
182. It is the intent of the general assembly that the
19increased revenues to the general fund of the state resulting
20from the provisions of this Act in fiscal years beginning on
21or after July 1, 2021, shall, at a future time, be estimated
22by the department of revenue and transferred by an Act of the
23general assembly to the tax expenditure limitation account in
24the taxpayers trust fund created in section 8.57E.
25EXPLANATION
26The inclusion of this explanation does not constitute agreement with
27the explanation’s substance by the members of the general assembly.
28This bill relates to state revenue and finance by modifying
29numerous tax credits and tax credit programs and providing for
30transfers to the cash reserve fund and the taxpayers trust
31fund.
32DIVISION I — BEGINNING FARMER TAX CREDITS. Division
33I reduces the tax credit rates of the agricultural assets
34transfer tax credit in Code section 16.80 from 7 percent to
356 percent of the gross amount paid to a taxpayer pursuant
-28-1to an agricultural assets transfer agreement that includes a
2lease on a cash basis, and from 17 percent to 16 percent of
3the amount paid to the taxpayer under an agricultural assets
4transfer agreement that includes a lease on a commodity share
5basis. These changes take effect upon enactment and apply
6retroactively to January 1, 2017, for tax years beginning on
7or after that date.
8The current agricultural assets transfer tax credit program
9is scheduled under current law to be substantially modified
10beginning on January 1, 2018, and the division reduces the
11tax credit rates under that modified program from 5 percent
12to 4.5 percent of the amount paid under an agreement, or from
1315 percent to 14 percent of the amount paid for the sale of
14crops or animals for certain agreements in which the payment
15is exclusively made from the sale of crops or animals. These
16changes take effect January 1, 2018, and apply to tax years
17beginning on or after that date.
18The division also reduces the tax credit rates of the custom
19farming contract tax credit from 7 percent to 6 percent of the
20gross amount paid to the qualified beginning farmer under a
21contract. These changes take effect upon enactment and apply
22retroactively to January 1, 2017, for tax years beginning on
23or after that date.
24DIVISIONS II THROUGH V — FUEL TAX CREDITS. Divisions II
25through V make several changes to the biodiesel blended fuel
26tax credit under Code section 422.11P, the E-15 plus gasoline
27promotion tax credit under Code section 422.11Y, the E-85
28gasoline promotion tax credit under Code section 422.11O, and
29the ethanol promotion tax credit under Code section 422.11N
30(collectively referred to as the “fuel tax credits”).
31Under current law, the fuel tax credits have no limit on
32the aggregate amounts that may be claimed annually. The bill
33limits the maximum aggregate amount of tax credits that may
34be claimed to $16 million per calendar year for the biodiesel
35blended fuel tax credit, to $430,200 per calendar year for the
-29-1E-15 plus gasoline promotion tax credit, to $2,511,100 per
2calendar year for the E-85 gasoline promotion tax credit, and
3to $1,071,500 per calendar year for the ethanol promotion tax
4credit.
5Under current law, the fuel tax credits are all administered
6in a substantially similar manner and provide that a tax credit
7may be claimed by any retail dealer who meets the statutory
8requirements on a fiscal year or calendar year basis, depending
9on the tax year of the retail dealer. The bill provides
10that the fuel tax credits shall be calculated on a calendar
11year basis, and requires a retail dealer to submit an annual
12application to the department of revenue (DOR) in the manner
13and form prescribed by DOR. DOR is allowed to establish an
14application deadline or to require a retail dealer to apply
15for the fuel tax credits on or in conjunction with the retail
16dealer’s annual motor fuel gallonage report required under Code
17section 452A.33. The bill requires DOR to issue tax credit
18certificates to retail dealers for qualifying fuel tax credits,
19which tax credit certificates may be used as described in the
20bill to claim the applicable fuel tax credit. If the aggregate
21amount of fuel tax credit claims for a calendar year for any
22particular fuel tax credit exceeds the applicable maximum limit
23described above, DOR is required to reduce all tax credit
24claims for that fuel tax credit in a prorated fashion until the
25aggregate tax credit claims equal the applicable maximum amount
26described above.
27The bill includes transition provisions for a retail dealer
28with a fiscal tax year that apply to the retail dealer’s
292016-2017 tax year and that, in general, require a retail
30dealer to calculate a fuel tax credit under current law for
31that portion of the tax year that covers 2016, and then under
32the applicable Code sections as amended in the bill for any
33period beginning on or after January 1, 2017.
34Divisions II through V take effect upon enactment and apply
35retroactively to January 1, 2017, for tax years beginning on
-30-1or after that date, and for biodiesel blended fuel, qualifying
2ethanol blended gasoline, E-85 gasoline, or ethanol blended
3gasoline sold on or after that date.
4DIVISION VI — HISTORIC PRESERVATION AND CULTURAL AND
5ENTERTAINMENT DISTRICT TAX CREDIT. Division VI reduces the
6tax credit rate of the historic preservation and cultural and
7entertainment district tax credit in Code chapter 404A from 25
8percent to 15 percent of a qualified rehabilitation project’s
9expenditures. This change applies to qualified rehabilitation
10projects registered on or after July 1, 2017.
11The division also reduces from $45 million to $35 million the
12amount of tax credits that may be awarded each fiscal year by
13the economic development authority (EDA). This change takes
14effect July 1, 2017.
15DIVISION VII — SOLAR ENERGY SYSTEM TAX CREDIT. Division
16VII reduces the tax credit rate of the solar energy system tax
17credit in Code section 422.11L from 50 percent to 40 percent
18of the applicable federal energy tax credits available for the
19installation of certain solar energy property. This change
20takes effect upon enactment and applies to installations
21occurring on or after that date.
22The division also reduces from $5 million to $4 million
23the cumulative value of tax credits that may be claimed
24annually. This change takes effect upon enactment and applies
25retroactively to January 1, 2017, for tax years beginning on
26or after that date.
27DIVISION VIII — GEOTHERMAL HEAT PUMP TAX CREDIT. Division
28VIII reduces the tax credit rate of the geothermal heat pump
29tax credit in Code section 422.11I from 20 percent to 16
30percent of the applicable federal energy tax credit available
31for the installation of certain geothermal heat pump property.
32Under current law, there is no limit on the aggregate amount
33of tax credits that may be claimed annually. The division
34limits the maximum aggregate amount of tax credits per calendar
35year to $376,020, and requires a taxpayer to apply to DOR to
-31-1receive the tax credit. The tax credit application must be
2filed by May 1 following the calendar year of the qualified
3geothermal heat pump property installation. The division
4requires DOR to issue tax credit certificates to qualifying
5taxpayers on a first-come, first-served basis until the
6annual limit ($376,020) is reached, and establishes a wait
7list for qualifying taxpayers who do not receive a tax credit
8certificate because the tax credit limit has been reached.
9Taxpayers shall be placed on the wait list in the order the
10applications are received and shall be given priority for
11receiving a tax credit certificate in a future year, contingent
12on the availability of tax credits in that particular year.
13Tax credit certificates may be used as described in the
14division to claim the geothermal heat pump tax credit.
15The division takes effect upon enactment and applies
16retroactively to January 1, 2017, for tax years beginning on
17or after that date.
18DIVISION IX — GEOTHERMAL TAX CREDIT. Division IX reduces
19the tax credit rate of the geothermal tax credit in Code
20section 422.10A from 10 percent to 8 percent of a taxpayer’s
21qualified geothermal heat pump property expenditures. This
22change takes effect upon enactment and applies to qualified
23geothermal heat pump property installations occurring on or
24after that date.
25Under current law, there is no limit on the aggregate amount
26of tax credits that may be claimed annually. The division
27limits the maximum aggregate amount of tax credits per calendar
28year to $1.5 million, and requires a taxpayer to apply to DOR
29to receive the tax credit. The tax credit application must be
30filed by May 1 following the calendar year of the qualified
31geothermal heat pump property installation. The division
32requires DOR to issue tax credit certificates to qualifying
33taxpayers on a first-come, first-served basis until the annual
34limit ($1.5 million) is reached, and establishes a wait list
35for qualifying taxpayers who do not receive a tax credit
-32-1certificate because the tax credit limit has been reached.
2Taxpayers shall be placed on the wait list in the order the
3applications are received and shall be given priority for
4receiving a tax credit certificate in a future year, contingent
5on the availability of tax credits in that particular year.
6Tax credit certificates may be used as described in the
7division to claim the geothermal tax credit. These provisions
8take effect upon enactment and apply retroactively to January
91, 2017, for tax years beginning on or after that date, and
10for geothermal heat pump property installations occurring on
11or after that date.
12DIVISION X — INNOVATION FUND TAX CREDIT. Division X reduces
13the tax credit rate of the innovation fund tax credit in Code
14section 15E.52 from 25 percent to 20 percent of a taxpayer’s
15equity investment in an innovation fund. The division takes
16effect upon enactment and applies to equity investments in an
17innovation fund made on or after that date.
18DIVISION XI — ANGEL INVESTOR TAX CREDIT. Division XI
19reduces the tax credit rate of the tax credit for investments
20in a qualifying business (angel investor tax credit) in Code
21section 15E.43 from 25 percent to 20 percent of a taxpayer’s
22equity investment. The division takes effect upon enactment
23and applies to equity investments in a qualifying business made
24on or after that date.
25DIVISION XII — RESEARCH ACTIVITIES TAX CREDIT. Division
26XII makes several changes to the research activities tax
27credits under Code sections 15.335, 422.10, and 422.33(5).
28With regard to the research activities tax credits available
29under the individual income tax (Code section 422.10) and the
30corporate income tax (Code section 422.33(5)), the division
31reduces the tax credit rate for the regular calculation method
32from 6.5 percent to 5.5 percent, and the tax credit rates for
33the alternative simplified calculation method from 4.55 and
341.95 percents to 3.85 and 1.61 percents, respectively. These
35changes take effect upon enactment and apply retroactively to
-33-1January 1, 2017, for tax years ending on or after that date.
2Under current law, any research activities tax credit in
3excess of a taxpayer’s tax liability is refundable to the
4taxpayer. The division provides that research activities tax
5credits will no longer be refundable for tax years ending on
6or after January 1, 2018, unless the taxpayer is considered
7a new claimant, but any excess may be carried forward for up
8to eight years. The division defines “new claimant” to be an
9entity that did not earn a research activities tax credit for
10a tax year ending on or before January 1, 2014. A qualifying
11entity shall be considered a new claimant for a period of five
12tax years beginning with the first tax year for which the
13entity earns a research activities tax credit. However, an
14entity shall not be considered a new claimant if the entity is
15an affiliate of an entity that does not qualify or no longer
16qualifies as a new claimant. “Affiliate” is defined in the
17division.
18Research activities tax credits claimed by an individual or
19entity which credits were received from another pass-through
20entity shall not be considered refundable unless the entity
21that ultimately earned the tax credit qualified as a new
22claimant.
23These provisions relating to refundability take effect
24January 1, 2018, and apply to tax years ending on or after that
25date. However, the provisions relating to the refundability of
26the supplemental research activities tax credits (Code section
2715.335) awarded by EDA under the high quality jobs program
28apply to supplemental research activities tax credits awarded
29on or after the enactment date of the bill.
30DIVISION XIII — ECONOMIC DEVELOPMENT AUTHORITY PROGRAMS AND
31AGGREGATE TAX CREDIT LIMIT. Current law in Code section 15.119
32limits to $170 million the amount of tax credits that may
33be awarded by EDA per fiscal year under certain EDA programs
34(maximum aggregate tax credit limit). EDA may award up to 20
35percent more tax credits than that amount during a fiscal year,
-34-1but the excess is counted against the maximum aggregate tax
2credit limit for the next fiscal year. The bill decreases the
3maximum aggregate tax credit limit from $170 million to $128
4million and strikes EDA’s ability to exceed that amount during
5a fiscal year, for fiscal years beginning on or after July 1,
62017.
7Also under current law, the programs under EDA’s maximum
8aggregate tax credit limit are also subject to annual tax
9credit award limits, including the redevelopment tax credit
10program in Code sections 15.293A and 15.293B and the high
11quality jobs program administered pursuant to Code sections
1215.326 through 15.336. The division reduces the maximum amount
13of redevelopment tax credits that may be awarded per fiscal
14year from $10 million to $8 million for fiscal years beginning
15on or after July 1, 2017. The division reduces the maximum
16amount of high quality jobs program tax credits that may be
17awarded per fiscal year from $105 million to $65 million for
18each fiscal year of the four-year fiscal period beginning July
191, 2017, and ending June 30, 2021. The division provides that
20the maximum amount of high quality jobs program tax credits
21that may be awarded for FY 2021-2022 will be $65 million if
22the renewable chemical tax credit allocation limit described
23in Code section 15.119(2)(a)(3) is satisfied, or will be $80
24million if not satisfied. For fiscal years beginning on or
25after July 1, 2022, the maximum amount of high quality jobs
26program tax credits that may be awarded per fiscal year shall
27be $80 million.
28DIVISION XIV — TRANSFERS TO CASH RESERVE FUND AND TAXPAYERS
29TRUST FUND. Division XIV makes various transfers for four
30fiscal years of the estimated increased revenues from the tax
31credit changes in the bill. For FY 2017-2018, the division
32transfers $7,358,352 from the general fund to the cash
33reserve fund created in Code section 8.56. For FY 2018-2019,
34FY 2019-2020, and FY 2020-2021, the division transfers
35$33,506,815, $57,693,141, and $65,213,037, respectively, from
-35-1the general fund of the state to a tax expenditure limitation
2account created in the division within the taxpayers trust fund
3created in Code section 8.57E.
4The division also provides that it is the intent of the
5general assembly that the increased revenues from the tax
6credit changes in the bill in fiscal years beginning on or
7after July 1, 2022, shall, in the future, be estimated by DOR
8and transferred by an Act of the general assembly to the tax
9expenditure limitation account within the taxpayers trust fund.
-36-mm/sc/rj