House File 682 - Introduced HOUSE FILE 682 BY COOLING , WILBURN , JAMES , LEVIN , B. MEYER , KONFRST , MATSON , KRESSIG , BAGNIEWSKI , MADISON , CROKEN , R. JOHNSON , AMOS JR. , SRINIVAS , EHLERT , OLSON , SCHOLTEN , WESSEL-KROESCHELL , and NIELSEN A BILL FOR An Act relating to the recapture of tax expenditures and 1 disbursed by departments of the state to businesses that 2 violate child labor laws. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1854YH (3) 91 jm/jh
H.F. 682 Section 1. NEW SECTION . 15K.1 Recapture of tax expenditures 1 for child labor violations. 2 1. As used in this chapter: 3 a. Business means the same as a person as defined in 4 section 4.1. 5 b. Proceeds means the same as noncash and cash proceeds 6 as defined in section 554.9102. 7 c. Tax expenditure means the same as defined in section 8 2.48, subsection 1. 9 2. Notwithstanding any other provision of law to the 10 contrary, beginning on or after July 1, 2025, as a condition 11 of authorizing tax expenditures to a business under any of the 12 programs administered by a department of the state, the value 13 of the tax expenditures authorized by the department shall be 14 subject to recapture by the department administering the tax 15 expenditure if the business, or a contractor, subcontractor, 16 or other third party of the business providing services to the 17 business in the businesss facility, has violated state or 18 federal child labor laws under chapter 92 or the federal Fair 19 Labor Standards Act of 1938. 20 3. The business shall notify the administering department 21 of the violation within thirty days of the ending of the time 22 period to contest or appeal the violation. 23 4. The repayment or recapture of tax expenditures pursuant 24 to this chapter shall be accomplished in the same manner as 25 provided in section 15.330, subsection 2. 26 EXPLANATION 27 The inclusion of this explanation does not constitute agreement with 28 the explanations substance by the members of the general assembly. 29 This bill relates to the recapture of tax expenditures 30 disbursed by departments of the state to businesses that 31 violate child labor laws. The bill defines tax expenditure 32 to mean the same as defined in Code section 2.48, which 33 includes tax credits, exemptions, deductions, and rebates as 34 well as sales tax refunds. 35 -1- LSB 1854YH (3) 91 jm/jh 1/ 2
H.F. 682 Beginning on or after July 1, 2025, as a condition of 1 authorizing tax incentives to a business under any of the 2 programs administered by a department of the state, the 3 value of the tax expenditure authorized shall be subject to 4 recapture by the department if the business, or a contractor, 5 subcontractor, or other third party of the business providing 6 services to the business in the businesss facility, violated 7 state or federal child labor laws under Code chapter 92 or the 8 federal Fair Labor Standards Act of 1938. 9 The bill requires the business to notify the administering 10 department of the violation within 30 days of the ending of the 11 time period to contest or appeal the violation. 12 The bill specifies the repayment or recapture of tax 13 expenditures pursuant to the bill shall be accomplished in 14 the same manner as provided in Code section 15.330(2). The 15 repayment of incentives pursuant to that Code section is 16 considered a tax payment due and payable to the department 17 of revenue, and the failure to make such a repayment may be 18 treated by the department of revenue in the same manner as a 19 failure to pay the tax shown due or required to be shown due. 20 In addition, a county may take action to recover the value of 21 property taxes not collected as a result of a tax exemption 22 provided to the business. 23 -2- LSB 1854YH (3) 91 jm/jh 2/ 2