| 1 | 1 | | House Study Bill 305 - Introduced SENATE/HOUSE FILE _____ BY (PROPOSED ECONOMIC DEVELOPMENT AUTHORITY BILL) A BILL FOR An Act relating to matters under the purview of the Iowa 1 economic development authority, including tax credit limits, 2 targeted jobs tax credits, and the major economic growth 3 attraction program; creation of the business incentives 4 for growth program, the seed investor tax credit program, 5 the Iowa film production incentive program, the research 6 and development tax credit program, and the sustainable 7 aviation fuel production tax credit program; elimination of 8 the high quality jobs program, the investments in qualifying 9 businesses tax credit, employer child care tax credits, 10 assistive device tax credits, endow Iowa tax credits, and 11 research activities tax credits; and including effective 12 date provisions and criminal penalties. 13 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 14 TLSB 1186XD (12) 91 nls/ko |
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| 3 | 3 | | S.F. _____ H.F. _____ DIVISION I 1 ECONOMIC DEVELOPMENT PROGRAMS TAX CREDIT LIMITS 2 Section 1. Section 15.119, Code 2025, is amended to read as 3 follows: 4 15.119 Aggregate tax credit limit for certain economic 5 business development programs. 6 1. a. Notwithstanding any provision to the contrary in any 7 of the business development programs listed in subsection 2 , 8 the authority, except as provided in paragraph b , shall not 9 authorize for any one fiscal year an amount of tax credits for 10 the programs specified in subsection 2 that is in excess of one 11 hundred seventy ten million dollars. 12 b. (1) The authority may authorize an amount of tax credits 13 during a fiscal year that is in excess of the amount specified 14 in paragraph a , but the amount of such excess shall not exceed 15 twenty percent of the amount specified in paragraph a , and 16 shall be counted against the total amount of tax credits that 17 may be authorized for the next fiscal year. 18 (2) Any amount of tax credits authorized and awarded during 19 a fiscal year for a program specified in subsection 2 which are 20 irrevocably declined by the awarded business on or before June 21 30 of the next fiscal year may be reallocated, authorized, and 22 awarded during the fiscal year in which the declination occurs. 23 Tax credits authorized pursuant to this subparagraph shall not 24 be considered for purposes of subparagraph (1). 25 2. The authority, with the approval of the board, shall 26 adopt by rule a procedure for allocating the aggregate tax 27 credit limit established in this section among the following 28 The aggregate tax credit limit specified in subsection 1 shall 29 be allocated to business development programs as follows : 30 a. (1) The high quality jobs program administered pursuant 31 to subchapter II, part 13 . 32 (2) In allocating tax credits pursuant to this subsection 33 for the fiscal year beginning July 1, 2022, and for each fiscal 34 year thereafter, the authority shall not allocate more than 35 -1- LSB 1186XD (12) 91 nls/ko 1/ 74 |
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| 5 | 5 | | S.F. _____ H.F. _____ sixty-eight million dollars for purposes of this paragraph. 1 (3) In allocating tax credits pursuant to this subsection , 2 the authority shall prioritize issuing additional research 3 activities tax credits pursuant to section 15.335 . 4 b. The enterprise zones program administered pursuant to 5 sections 15E.191 through 15E.197, Code 2014 . 6 c. The assistive device tax credit program administered 7 pursuant to section 422.33, subsection 9 . 8 d. The tax credits for investments in qualifying businesses 9 issued pursuant to section 15E.43 . In allocating tax credits 10 pursuant to this subsection , the authority shall allocate two 11 million dollars for purposes of this paragraph, unless the 12 authority determines that the tax credits awarded will be less 13 than that amount. 14 e. a. The tax credits for investments in an innovation fund 15 pursuant to section 15E.52 chapter 15E, subchapter VI, and the 16 seed investor tax credit pursuant to chapter 15E, subchapter 17 IV . In allocating tax credits pursuant to this subsection , the 18 authority shall allocate eight ten million dollars for purposes 19 of this paragraph, unless the authority determines that the tax 20 credits awarded will be less than that amount and the board 21 shall determine the tax credit amount allocated to each program 22 under this paragraph each fiscal year . 23 f. The redevelopment tax credit program for brownfields 24 and grayfields administered pursuant to sections 15.293A and 25 15.293B . 26 g. The workforce housing tax incentives program administered 27 pursuant to subchapter II, part 17 . In allocating tax credits 28 pursuant to this subsection , the authority shall not allocate 29 more than thirty-five million dollars for purposes of this 30 paragraph. Of the moneys allocated under this paragraph, 31 seventeen million five hundred thousand dollars shall be 32 reserved for allocation to qualified housing projects in small 33 cities, as defined in section 15.352 , that are registered on 34 or after July 1, 2017. 35 -2- LSB 1186XD (12) 91 nls/ko 2/ 74 |
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| 7 | 7 | | S.F. _____ H.F. _____ h. The renewable chemical production tax credit program 1 administered pursuant to subchapter II, part 12 . In allocating 2 tax credits pursuant to this subsection for the fiscal year 3 beginning July 1, 2021, and for each fiscal year beginning 4 before July 1, 2037, the authority shall not allocate more than 5 five million dollars for purposes of this paragraph. This 6 paragraph is repealed July 1, 2039. 7 3. In allocating the amount of tax credits authorized 8 pursuant to subsection 1 among the programs specified in 9 subsection 2 , the authority shall not allocate more than 10 fifteen million dollars for purposes of subsection 2 , paragraph 11 f . 12 b. The renewable chemical production tax credit pursuant 13 to subchapter II, part 12, and the sustainable aviation fuel 14 production tax credit program pursuant to subchapter II, part 15 36. In allocating tax credits pursuant to this subsection, the 16 authority shall allocate ten million dollars for purposes of 17 this paragraph, and the board shall determine the tax credit 18 amount allocated to each program specified in this paragraph 19 for each fiscal year. 20 c. The research and development tax credit program pursuant 21 to subchapter II, part 35. In allocating tax credits pursuant 22 to this subsection, the authority shall allocate forty million 23 dollars for purposes of this paragraph. 24 d. The business incentives for growth program administered 25 pursuant to subchapter II, part 33. In allocating tax credits 26 pursuant to this subsection for the calendar year beginning 27 January 1, 2026, and for each fiscal year thereafter, the 28 authority shall not allocate more than fifty million dollars 29 for purposes of this paragraph. 30 4. 3. The authority shall submit to the department of 31 revenue on or before August 15 of each year a report on the tax 32 credits allocated pursuant to this section and the tax credits 33 awarded under each of the programs described in subsection 2 . 34 DIVISION II 35 -3- LSB 1186XD (12) 91 nls/ko 3/ 74 |
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| 9 | 9 | | S.F. _____ H.F. _____ ECONOMIC DEVELOPMENT PROGRAMS TAX CREDIT LIMITS 1 CONFORMING CHANGES 2 Sec. 2. Section 15.293A, subsection 6, Code 2025, is amended 3 to read as follows: 4 6. The amount of tax credits that may be awarded by the 5 board shall be subject to the limitation in section 15.119 6 Except as provided in section 15.293B, subsection 6, the board 7 shall not award in any one fiscal year an amount of tax credits 8 that exceeds fifteen million dollars . 9 Sec. 3. Section 15.293B, subsection 6, Code 2025, is amended 10 to read as follows: 11 6. a. (1) Tax credits revoked under subsection 3 including 12 tax credits revoked up to five years prior to July 1, 2021, and 13 tax credits not awarded under subsection 4 or 5 , may be awarded 14 in the next annual application period established in subsection 15 1 , paragraph c . 16 (2) Any amount of tax credits authorized and awarded during 17 a fiscal year which are irrevocably declined by the awarded 18 investor on or before June 30 of the immediately succeeding 19 fiscal year may be awarded in the next annual application 20 period established in subsection 1, paragraph c . 21 b. Tax credits awarded pursuant to paragraph a shall not 22 be counted against the limit under section 15.119, subsection 3 23 15.293A, subsection 6 . 24 Sec. 4. Section 15.318, subsection 3, paragraph e, Code 25 2025, is amended to read as follows: 26 e. In each fiscal year beginning on or after July 1, 2023 27 2025 , and ending on or before June 30, 2036, the authority 28 may award an amount of tax credits under the program not to 29 exceed the maximum aggregate amount allocated in determined by 30 the board pursuant to section 15.119, subsection 2, paragraph 31 h b . 32 Sec. 5. Section 15.354, subsection 4, Code 2025, is amended 33 by striking the subsection and inserting in lieu thereof the 34 following: 35 -4- LSB 1186XD (12) 91 nls/ko 4/ 74 |
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| 11 | 11 | | S.F. _____ H.F. _____ 4. Maximum tax incentives amount. 1 a. (1) In the fiscal year beginning July 1, 2025, and 2 ending June 30, 2026, the authority shall not award an amount 3 of tax credits in excess of forty-three million dollars. 4 (2) In the fiscal year beginning July 1, 2026, and ending 5 June 30, 2027, the authority shall not award an amount of tax 6 credits in excess of forty million dollars. 7 (3) In the fiscal year beginning July 1, 2027, and for each 8 fiscal year thereafter, the authority shall not award an amount 9 of tax credits in excess of thirty-five million dollars. 10 b. Of the tax credits allocated under paragraph a , fifty 11 percent of the allocation available in each fiscal year shall 12 be reserved for allocation to qualified housing projects in 13 small cities. 14 c. Notwithstanding paragraph b , if the sum of the amount 15 of tax incentives awarded in a given fiscal year for housing 16 projects located in small cities based on the authoritys 17 review and scoring of applications does not exceed the amount 18 reserved for housing projects located in small cities pursuant 19 to paragraph b , the authority may award the remaining amount 20 of tax incentives reserved for housing projects located in 21 small cities to other housing projects during that same fiscal 22 year. 23 d. Tax credits revoked by the authority or irrevocably 24 declined by a housing business before June 30 of the fiscal 25 year following the award may be awarded during the fiscal year 26 the revocation or declination occurs. 27 e. The maximum aggregate amount of tax incentives that 28 may be awarded and issued under section 15.355 to a housing 29 business for a housing project shall not exceed one million 30 dollars. 31 f. If a housing business qualifies for a higher amount 32 of tax incentives under section 15.355 than is allowed by 33 the limitation imposed in paragraph e , the authority and 34 the housing business may negotiate an apportionment of the 35 -5- LSB 1186XD (12) 91 nls/ko 5/ 74 |
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| 13 | 13 | | S.F. _____ H.F. _____ reduction in tax incentives between the sales tax refund 1 provided in section 15.355, subsection 2, and the workforce 2 housing investment tax credits provided in section 15.355, 3 subsection 3, provided the total aggregate amount of tax 4 incentives after the apportioned reduction does not exceed the 5 amount in paragraph e . 6 g. The authority shall issue tax incentives under the 7 program on a first-come, first-served basis until the maximum 8 amount of tax incentives allowed under paragraph a is reached. 9 Sec. 6. Section 15.354, subsection 6, paragraph d, Code 10 2025, is amended to read as follows: 11 d. The authority shall administer tax credit allocations 12 for disaster recovery housing projects separately from the 13 general allocation and separately from the allocation reserved 14 for small cities in section 15.119, subsection 2, paragraph 15 g . The authority shall issue tax incentives under the 16 program for disaster recovery housing projects on a first-come, 17 first-served basis until the maximum amount of tax incentives 18 allocated under section 15.119, subsection 5 , is reached. The 19 authority shall maintain a list of disaster recovery housing 20 projects awarded tax incentives under the program, so that if 21 the maximum aggregate amount of tax incentives allocated for 22 disaster recovery housing projects under the program is reached 23 in a given fiscal year, such disaster recovery housing projects 24 that were completed but for which tax incentives were not 25 issued shall be placed on a wait list in the order the disaster 26 recovery housing projects were awarded tax incentives pursuant 27 to paragraph c , and shall be given priority for receiving 28 tax incentives in succeeding fiscal years maximum tax credit 29 amounts specified in section 15.354, subsection 4, paragraphs 30 a and b . 31 DIVISION III 32 BUSINESS INCENTIVES FOR GROWTH PROGRAM 33 Sec. 7. NEW SECTION . 15.111 Assistance for certain programs 34 and projects. 35 -6- LSB 1186XD (12) 91 nls/ko 6/ 74 |
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| 15 | 15 | | S.F. _____ H.F. _____ 1. a. Under the authority provided in section 15.106A, 1 there shall be established one or more funds within the state 2 treasury, under the control of the authority, to be used for 3 purposes of this section. 4 b. A fund established for purposes of this section shall 5 consist of any moneys appropriated to the authority for 6 purposes of this section, or moneys otherwise accruing to 7 the authority and deposited in the fund for purposes of this 8 section. 9 c. Interest or earnings on moneys in a fund used for the 10 purposes of this section, and all repayments or recaptures of 11 the assistance provided under this section, shall accrue to 12 the authority and shall be used for purposes of this section, 13 notwithstanding section 12C.7. Moneys in a fund are not 14 subject to section 8.33. 15 2. a. The moneys in a fund established for purposes of 16 this section, as described in subsection 1, shall be allocated 17 by the authority in appropriate amounts to be used for the 18 following purposes: 19 (1) For program support. 20 (2) For deposit in the innovation and commercialization 21 development fund created pursuant to section 15.412. 22 (3) For providing financial assistance to businesses 23 engaged in disaster recovery. For purposes of this 24 subparagraph, business engaged in disaster recovery means 25 a business located in an area declared a disaster area by a 26 federal official, that has sustained physical damage, has 27 closed as a result of a natural disaster, and has a plan for 28 reopening that includes employing a substantial number of the 29 employees the business employed before the natural disaster 30 occurred. 31 (4) For deposit in the entrepreneur investment awards 32 program fund pursuant to section 15E.363. 33 (5) For deposit in a fund created for purposes of the 34 strategic infrastructure program established pursuant to 35 -7- LSB 1186XD (12) 91 nls/ko 7/ 74 |
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| 17 | 17 | | S.F. _____ H.F. _____ section 15.313. 1 (6) For deposit in the nuisance property remediation fund 2 established pursuant to section 15.338. 3 (7) For deposit in the community catalyst building 4 remediation fund established pursuant to section 15.231. 5 (8) For providing financial assistance to eligible 6 businesses for the business incentives for growth program 7 pursuant to section 15.504. 8 b. Each fiscal year, the authority shall estimate the 9 amount of revenues available for purposes of this section and 10 shall develop a budget appropriate for the expenditure of the 11 revenues available. 12 Sec. 8. NEW SECTION . 15.502 Short title. 13 This part shall be known and may be cited as the Business 14 Incentives for Growth Program or BIG Program . 15 Sec. 9. NEW SECTION . 15.503 Definitions. 16 As used in this part, unless the context otherwise requires: 17 1. Base employment level means the number of full-time 18 equivalent positions at a business, as established by the 19 authority and the business using the businesss payroll 20 records, as of the date the business applies for tax incentives 21 under the program. 22 2. Benefits means nonwage compensation provided to an 23 employee. Benefits include medical and dental insurance, a 24 pension, a retirement plan, a profit-sharing plan, child care, 25 life insurance, vision insurance, and disability insurance. 26 3. Community means a city, county, or entity established 27 pursuant to chapter 28E. 28 4. Contract completion means the date of completion of 29 the terms of a contract between a contractor and an eligible 30 business. 31 5. Contractor means a person that has executed a contract 32 with an eligible business for the provision of property, 33 materials, or services for the construction or equipping of a 34 facility that is part of the eligible businesss project. 35 -8- LSB 1186XD (12) 91 nls/ko 8/ 74 |
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| 19 | 19 | | S.F. _____ H.F. _____ 6. Created jobs or create jobs means new, permanent, 1 full-time equivalent positions added to an eligible businesss 2 payroll, at the location of the eligible businesss project, in 3 excess of the eligible businesss base employment level. 4 7. Data center business means the same as defined in 5 section 423.3, subsection 95. 6 8. Eligible business means a business that meets the 7 requirements of section 15.504. 8 9. Full-time equivalent position means a non-part-time 9 position for the number of hours or days per week considered 10 to be full-time work for the kind of service or work performed 11 for an employer. Typically, a full-time equivalent position 12 requires two thousand eighty hours of work in a calendar year, 13 including all paid holidays, vacations, sick time, and other 14 paid leave. 15 10. Program means the business incentives for growth 16 program. 17 11. Project means an activity or set of activities 18 directly related to the start-up or location of an eligible 19 business, proposed in an eligible businesss application to the 20 program, that will accomplish the goals of the program. 21 12. Project completion date means the date by which an 22 eligible business that has been approved by the authority to 23 participate in the program agrees to complete the terms and 24 conditions of the agreement under section 15.506. 25 13. Project completion period means the period of time 26 between the date the authority approves an eligible business to 27 participate in the program and the project completion date. 28 14. Qualifying investment means a capital investment in 29 real property, including the purchase price of the land, site 30 preparation, infrastructure, and building construction for 31 use in the operation of an eligible business. Qualifying 32 investment also means a capital investment in depreciable 33 assets for use in the operation of an eligible business. 34 15. Qualifying wage threshold means the mean wage level 35 -9- LSB 1186XD (12) 91 nls/ko 9/ 74 |
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| 21 | 21 | | S.F. _____ H.F. _____ represented by the wages within two standard deviations of 1 the mean wage within the laborshed area in which the eligible 2 business is located, as calculated by the authority by rule, 3 using the most current covered wage and employment data 4 available from the department of workforce development for the 5 laborshed area in which the eligible business is located. 6 16. Subcontractor means a person that contracts with 7 a contractor for the provision of property, materials, or 8 services for the construction or equipping of a facility that 9 is part of an eligible businesss project. 10 17. Tax incentives means tax credits, tax refunds, or tax 11 exemptions authorized under the program by the authority for an 12 eligible business. 13 Sec. 10. NEW SECTION . 15.504 Eligible business. 14 1. To be eligible to receive tax incentives under 15 the program, a business must meet all of the following 16 requirements: 17 a. The community in which the proposed project is located 18 must approve the project either by ordinance or resolution. 19 b. (1) The business must be primarily engaged in advanced 20 manufacturing, bioscience, insurance and finance, or technology 21 and innovation. The business shall not be a data center 22 business, a retail business, or a business where a cover charge 23 or membership requirement restricts certain individuals from 24 entering the business. 25 (2) Factors the authority shall consider to determine if 26 a business is primarily engaged in advanced manufacturing, 27 biosciences, insurance and finance, or technology and 28 innovation shall include but are not limited to all of the 29 following: 30 (a) The businesss North American industry classification 31 system code. 32 (b) The businesss main sources of revenue. 33 (c) The businesss customer base. 34 c. (1) The business must not be solely relocating 35 -10- LSB 1186XD (12) 91 nls/ko 10/ 74 |
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| 23 | 23 | | S.F. _____ H.F. _____ operations from one area of the state to another area of 1 the state. A proposed project that does not create jobs or 2 involve a substantial amount of new capital investment shall 3 be presumed to be a relocation of operations. For purposes of 4 this subparagraph, the authority shall consider a letter from 5 the affected local communitys government officials supporting 6 the businesss move away from the affected local community 7 in making a determination whether the business is solely 8 relocating operations. 9 (2) This paragraph shall not be construed to prohibit 10 a business from expanding the businesss operations in a 11 community if the business has similar operations in this state 12 that are not closing or undergoing a substantial reduction in 13 operations. 14 d. The business must provide comprehensive benefits to 15 each full-time equivalent employee employed at the project. 16 The authority may adopt rules under chapter 17A to determine 17 the procedure for establishing requirements for comprehensive 18 benefits. 19 e. (1) The business must not have a record of violations of 20 the law or of rules, including but not limited to antitrust, 21 environmental, trade, or worker safety, that over a period of 22 time show a consistent pattern or that establish the businesss 23 intentional, criminal, or reckless conduct in violation of such 24 laws or rules. 25 (2) If the authority determines that the business has a 26 record of violations described in subparagraph (1), and the 27 authority finds that the violations did not seriously affect 28 public health, public safety, or the environment, the business 29 may be eligible to qualify for the program. 30 (3) If the authority determines that the business has 31 a record of violations described in subparagraph (1), and 32 the authority finds that there were mitigating circumstances 33 related to the violations, the business may be eligible to 34 qualify for the program. 35 -11- LSB 1186XD (12) 91 nls/ko 11/ 74 |
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| 25 | 25 | | S.F. _____ H.F. _____ (4) In making determinations and findings under 1 subparagraphs (2) and (3), and making a determination whether a 2 business is disqualified from the program, the authority shall 3 be exempt from chapter 17A. 4 2. In determining if a business is eligible to participate 5 in the program, the authority shall consider a variety of 6 factors, including but not limited to all of the following: 7 a. The impact of the businesss proposed project on 8 businesses that are in competition with the business. 9 The authority shall make a good-faith effort to identify 10 existing Iowa businesses in competition with the business 11 being considered for the program. The authority shall make 12 a good-faith effort to determine the probability that any 13 proposed tax incentives will displace employees of the 14 competing businesses. 15 b. The businesss proposed projects economic impact on 16 the state. The authority shall place greater emphasis on 17 businesses and proposed projects that meet the following 18 requirements: 19 (1) The business has a high proportion of in-state 20 suppliers. 21 (2) The proposed project will diversify the state economy. 22 (3) The business has few in-state competitors. 23 (4) The proposed project has the potential to create jobs on 24 an ongoing basis. 25 (5) The proposed project has the potential to increase 26 productivity, efficiency, and competitiveness through adoption 27 and integration of smart technologies including specialized 28 hardware, software, or other equipment. 29 (6) The proposed project has the potential to increase the 30 states overall gross domestic product. 31 (7) Any other factors the authority deems relevant in 32 determining the economic impact of a proposed project. 33 Sec. 11. NEW SECTION . 15.505 Applications authorization 34 of tax credits and exemptions. 35 -12- LSB 1186XD (12) 91 nls/ko 12/ 74 |
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| 27 | 27 | | S.F. _____ H.F. _____ 1. a. Applications for the program shall be submitted 1 to the authority in the form and manner prescribed by the 2 authority by rule. Each application must be accompanied by an 3 application fee in an amount determined by the authority by 4 rule. 5 b. For a proposed project that will result in elevated 6 water consumption by the business, the application shall be 7 accompanied by a water conservation and waste reduction plan, 8 and shall be submitted to the authority in the form and manner 9 prescribed by the authority by rule. 10 2. In determining the eligibility of a business to 11 participate in the program, the authority may engage outside 12 experts to complete a technical, financial, or other review of 13 an application submitted by a business. 14 3. a. The authority and the board may negotiate with an 15 eligible business regarding the terms of, and the aggregate 16 value of, the tax incentives the eligible business may receive 17 under the program. The maximum aggregate value of the tax 18 incentives that any one eligible business may receive shall 19 not exceed five percent of the eligible businesss qualifying 20 investment. 21 b. The board may authorize any combination of tax incentives 22 available under the program for an eligible business. 23 4. The board shall not authorize an award under this part 24 before January 1, 2026. 25 Sec. 12. NEW SECTION . 15.506 Agreement. 26 1. An eligible business that is approved by the authority to 27 participate in the program shall enter into an agreement with 28 the authority that specifies the criteria for the successful 29 completion of all requirements of the program. The agreement 30 must contain, at a minimum, provisions related to all of the 31 following: 32 a. The eligible business must certify to the authority 33 annually that the business is in compliance with the agreement. 34 b. If the eligible business fails to comply with any 35 -13- LSB 1186XD (12) 91 nls/ko 13/ 74 |
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| 29 | 29 | | S.F. _____ H.F. _____ requirements of the program or the agreement, as determined 1 by the authority, the eligible business may be required to 2 repay any tax incentives the authority issued to the eligible 3 business. The authority will notify the department of revenue 4 of any required repayment of a tax incentive, which shall be 5 considered a tax payment due and payable to the department of 6 revenue by any taxpayer that claimed the tax incentive, and the 7 failure to make the repayment may be treated by the department 8 of revenue in the same manner as a failure to pay the tax shown 9 due, or required to be shown due, with the filing of a return 10 or deposit form. A county shall have the authority to take 11 action to recover the value of property taxes not collected as 12 a result of the exemption provided to the business under this 13 part. 14 c. If the eligible business undergoes a layoff or 15 permanently closes any of its facilities within the state, the 16 eligible business may be subject to all of the following: 17 (1) A reduction or elimination of some or all of the tax 18 incentives the authority issued to the eligible business. 19 (2) Repayment of any tax incentives that the business 20 has claimed, and payment of any penalties assessed by the 21 department of revenue. 22 d. The project completion date, the number of created 23 jobs, the qualifying wage threshold that is applicable to the 24 project, the amount of qualifying investment, the maximum 25 aggregate value of the tax incentives authorized by the 26 board, and any other terms and obligations the authority deems 27 necessary. 28 e. The eligible business shall only employ individuals 29 legally authorized to work in this state. If the eligible 30 business is found to knowingly employ individuals who are 31 not legally authorized to work in this state, in addition 32 to any penalties provided by law, all or a portion of any 33 tax incentives issued by the authority shall be subject 34 to repayment as described in section 15.506, subsection 1, 35 -14- LSB 1186XD (12) 91 nls/ko 14/ 74 |
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| 31 | 31 | | S.F. _____ H.F. _____ paragraph b . 1 f. Any terms deemed necessary by the authority to effect the 2 eligible businesss ongoing compliance with section 15.504. 3 2. The business shall satisfy all applicable terms of 4 the agreement by the project completion date; however, the 5 board may for good cause extend the project completion date or 6 otherwise amend the terms of the agreement. The board shall 7 not amend the terms of the agreement to allow an increase in 8 the maximum aggregate value of the tax incentives authorized by 9 the board under section 15.505, subsection 3. 10 3. The eligible business shall comply with all applicable 11 terms of the agreement during the term of the agreement. 12 4. The eligible business shall not assign the agreement 13 to another entity without the advance written approval of the 14 board. 15 5. The authority may enforce the terms of the agreement as 16 necessary and appropriate. 17 Sec. 13. NEW SECTION . 15.507 Sales and use tax refund. 18 1. An eligible business that has been issued a tax incentive 19 certificate under the program shall be entitled to a refund, 20 as negotiated under section 15.505, subsection 3, of the sales 21 and use taxes paid under chapter 423 for gas, electricity, 22 water, and sewer utility services, tangible personal property, 23 or on services rendered, furnished, or performed to or for 24 a contractor or subcontractor and used in the fulfillment 25 of a written contract for the construction or equipping of 26 a facility that is part of the eligible businesss project. 27 Taxes attributable to intangible property and furniture and 28 furnishings shall not be refunded. 29 2. To receive the sales and use tax refund, the eligible 30 business shall file a claim with the department of revenue as 31 follows: 32 a. The contractor or subcontractor shall state under oath, 33 on forms provided by the department of revenue, the amount of 34 the sales of tangible personal property or services rendered, 35 -15- LSB 1186XD (12) 91 nls/ko 15/ 74 |
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| 33 | 33 | | S.F. _____ H.F. _____ furnished, or performed including water, sewer, gas, and 1 electric utility services upon which sales or use tax has been 2 paid prior to contract completion, and shall submit the forms 3 to the eligible business before contract completion. 4 b. The eligible business shall inform the department of 5 revenue in writing of contract completion. The eligible 6 business shall, after contract completion, submit an 7 application to the department of revenue for a refund of the 8 amount of the sales and use taxes paid pursuant to chapter 423 9 upon any tangible personal property, or services rendered, 10 furnished, or performed, including water, sewer, gas, and 11 electric utility services. The application shall be submitted 12 in the form and manner prescribed by the department of revenue. 13 The department of revenue shall audit the application and, 14 if approved, issue a warrant or warrants to the eligible 15 business in the amount of the sales or use tax which has been 16 paid to the state of Iowa under subsection 1. The eligible 17 businesss application must be submitted to the department of 18 revenue within one year after the project completion date. An 19 application filed by the eligible business in accordance with 20 this section shall not be denied by reason of a limitation set 21 forth in chapter 421 or 423. 22 c. The refund shall be remitted by the department of revenue 23 to the eligible business on a quarterly basis. Interest shall 24 not accrue on any part of the refund that has not yet been 25 remitted by the department of revenue to the eligible business. 26 3. A contractor or subcontractor that willfully makes a 27 false report of tax paid under this section is guilty of an 28 aggravated misdemeanor, and shall be liable for payment of the 29 tax and any applicable penalty and interest. 30 Sec. 14. NEW SECTION . 15.508 Qualifying investment tax 31 credit. 32 1. The authority may authorize a tax credit for an eligible 33 business pursuant to section 15.505, subsection 3. The 34 authority shall not issue a tax credit certificate to the 35 -16- LSB 1186XD (12) 91 nls/ko 16/ 74 |
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| 35 | 35 | | S.F. _____ H.F. _____ eligible business until the eligible businesss project or 1 a portion of the project has been placed in service. The 2 department of revenue shall remit the tax credit to the 3 eligible business equally over five tax years. The tax 4 credit shall be allowed against taxes imposed under chapter 5 422, subchapter II, III, or V, and against the moneys and 6 credits tax imposed in section 533.329. If the eligible 7 business is a partnership, S corporation, limited liability 8 company, cooperative organized under chapter 501 and filing 9 as a partnership for federal tax purposes, or estate or trust 10 electing to have the income taxed directly to the individual, 11 an individual may claim the tax credit allowed. The amount 12 claimed by the individual shall be based upon the pro rata 13 share of the individuals earnings of the partnership, S 14 corporation, limited liability company, cooperative organized 15 under chapter 501 and filing as a partnership for federal tax 16 purposes, or estate or trust. Any tax credit in excess of 17 the eligible businesss tax liability for the tax year may be 18 refunded. A tax credit shall not be carried back to a tax year 19 prior to the tax year in which the tax credit is first claimed 20 by the eligible business. 21 2. If within five years of the date the authority issues 22 an eligible business a tax credit under subsection 1 the 23 eligible business sells, disposes of, razes, or otherwise 24 renders unusable all or a part of the land, buildings, or 25 other structures for which the tax credit was claimed under 26 this section, the tax liability of the eligible business for 27 the year in which all or part of the land, buildings, or other 28 existing structures are sold, disposed of, razed, or otherwise 29 rendered unusable shall be increased by one of the following 30 amounts: 31 a. One hundred percent of the tax credit claimed under 32 this section if all or a part of the land, buildings, or other 33 structures for which the tax credit was claimed under this 34 section cease to be eligible for the tax credit within one 35 -17- LSB 1186XD (12) 91 nls/ko 17/ 74 |
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| 37 | 37 | | S.F. _____ H.F. _____ year after the date the authority issued the tax credit to the 1 eligible business. 2 b. Eighty percent of the tax credit claimed under this 3 section if all or a part of the land, buildings, or other 4 structures for which the tax credit was claimed under this 5 section cease to be eligible for the tax credit within two 6 years after the date the authority issued the tax credit to the 7 eligible business. 8 c. Sixty percent of the tax credit claimed under this 9 section if all or a part of the land, buildings, or other 10 structures for which the tax credit was claimed under this 11 section cease to be eligible for the tax credit within three 12 years after the date the authority issued the tax credit to the 13 eligible business. 14 d. Forty percent of the tax credit claimed under this 15 section if all or a part of the land, buildings, or other 16 structures for which the tax credit was claimed under this 17 section cease to be eligible for the tax credit within four 18 years after the date the authority issued the tax credit to the 19 eligible business. 20 e. Twenty percent of the tax credit claimed under this 21 section if all or a part of the land, buildings, or other 22 structures for which the tax credit was claimed under this 23 section cease to be eligible for the tax credit within five 24 years after the date the authority issued the tax credit to the 25 eligible business. 26 Sec. 15. NEW SECTION . 15.509 Other incentives. 27 1. An eligible business may apply for and be eligible to 28 receive other federal, state, and local incentives in addition 29 to the tax incentives issued by the authority to the eligible 30 business under the program. 31 2. The authority, in its discretion, may prohibit an 32 eligible business that has been issued tax incentives under 33 the program from receiving any additional tax incentive, tax 34 credit, grant, loan, or other financial assistance under any 35 -18- LSB 1186XD (12) 91 nls/ko 18/ 74 |
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| 38 | 38 | | |
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| 39 | 39 | | S.F. _____ H.F. _____ program administered by the authority. 1 Sec. 16. NEW SECTION . 15.510 Property tax exemption. 2 1. A community in which an eligible businesss project 3 is located may grant the eligible business a property 4 tax exemption for a portion of the actual value added by 5 improvements to real property through the project. The 6 community may allow a property tax exemption for a period not 7 to exceed ten years beginning the year that the improvements to 8 real property are first assessed for taxation. 9 2. For purposes of this section, improvements means new 10 construction, and rehabilitation of and additions to existing 11 structures. 12 3. A property tax exemption granted under subsection 1 shall 13 apply to all taxing districts, except for school districts, in 14 which the real property is located. 15 Sec. 17. NEW SECTION . 15.511 Financial assistance for 16 certain eligible businesses. 17 1. The authority may provide financial assistance pursuant 18 to section 15.111, subsection 2, paragraph a , subparagraph 19 (8), if the authority and the board find such assistance 20 necessary to facilitate the projects successful completion, 21 that the project has an extensive economic impact, or that 22 financial assistance will incentivize an eligible business to 23 choose an Iowa location, rather than an out-of-state location, 24 for an eligible businesss location. 25 2. Each eligible business receiving assistance under this 26 section shall enter into an agreement with the authority and 27 the agreement shall meet the requirements of section 15.506. 28 3. If the authority and the board determine financial 29 assistance should be awarded, the authority and the board shall 30 determine the appropriate amount and type of assistance for 31 facilitating the eligible businesss project. 32 Sec. 18. CODE EDITOR DIRECTIVE. The Code editor is directed 33 to designate sections 15.502 through 15.511, as enacted in this 34 division of this Act, as part 33 of subchapter II. 35 -19- LSB 1186XD (12) 91 nls/ko 19/ 74 |
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| 40 | 40 | | |
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| 41 | 41 | | S.F. _____ H.F. _____ Sec. 19. EFFECTIVE DATE. This division of this Act, being 1 deemed of immediate importance, takes effect upon enactment. 2 DIVISION IV 3 ELIMINATION OF THE HIGH QUALITY JOBS PROGRAM 4 Sec. 20. REPEAL. Sections 15.326, 15.327, 15.329, 15.330, 5 15.330A, 15.331A, 15.331C, 15.332, 15.333, 15.333A, 15.335, 6 15.335A, 15.335B, 15.335C, and 15.336, Code 2025, are repealed. 7 Sec. 21. TRANSITION PROVISIONS. An agreement entered into 8 on or before December 31, 2025, by a business and the economic 9 development authority pursuant to section 15.330, Code 2025, or 10 amended pursuant to section 15.330A, Code 2025, shall be valid 11 and continue per the terms of the agreement. 12 Sec. 22. PRESERVATION OF EXISTING RIGHTS. This division of 13 this Act shall not limit, modify, or otherwise adversely affect 14 any amount of tax incentive issued, awarded, or allowed before 15 December 31, 2025, nor shall it limit, modify, or otherwise 16 adversely affect a taxpayers right to claim or redeem a tax 17 incentive issued, awarded, or allowed before December 31, 2025, 18 including but not limited to any tax credit carry forward 19 amount. 20 Sec. 23. EFFECTIVE DATE. This division of this Act takes 21 effect December 31, 2025. 22 DIVISION V 23 HIGH QUALITY JOBS PROGRAM 24 CONFORMING CHANGES 25 Sec. 24. Section 2.48, subsection 3, paragraph a, 26 subparagraph (1), Code 2025, is amended by striking the 27 subparagraph. 28 Sec. 25. Section 2.48, subsection 3, paragraph a, 29 subparagraph (2), Code 2025, is amended to read as follows: 30 (2) The tax credits for increasing research activities 31 available under sections 15.335, 422.10 , and 422.33 . 32 Sec. 26. Section 8G.3, subsection 8, Code 2025, is amended 33 to read as follows: 34 8. Tax exemption or credit means an exclusion from 35 -20- LSB 1186XD (12) 91 nls/ko 20/ 74 |
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| 42 | 42 | | |
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| 43 | 43 | | S.F. _____ H.F. _____ the operation or collection of a tax imposed in this state. 1 Tax exemption or credit includes tax credits, exemptions, 2 deductions, and rebates. Tax exemption or credit also 3 includes sales tax refunds if such refunds are applied for and 4 granted as a form of financial assistance, including but not 5 limited to the refunds allowed in sections 15.331A 15.507 and 6 423.4 . 7 Sec. 27. Section 15.106B, subsection 5, paragraph b, Code 8 2025, is amended to read as follows: 9 b. Fees collected by the authority pursuant to this 10 subsection shall be deposited in a fund within the state 11 treasury created pursuant to section 15.106A, subsection 1 , 12 paragraph o , and are appropriated to the authority for the 13 purposes set out in section 15.106A, subsection 1 , paragraph 14 o . However, fees collected by the authority pursuant to 15 section 15.330, subsection 12 , section 15E.198 , Code 2014, and 16 section 15.354, subsection 3 , paragraph b , shall be used 17 exclusively for costs associated with the administration of due 18 diligence and compliance. 19 Sec. 28. Section 15.293B, subsection 3, Code 2025, is 20 amended to read as follows: 21 3. If an investor is awarded a tax credit pursuant to this 22 section , the authority and the investor shall enter into an 23 agreement concerning the qualifying redevelopment project. If 24 the investor fails to comply with any of the requirements of 25 the agreement, the authority may find the investor in default 26 under the agreement and may revoke all or a portion of the tax 27 credit award. The department of revenue, upon notification 28 by the authority of an event of default, shall seek repayment 29 of the value of any such tax credit already claimed in the 30 same manner as provided in section 15.330, subsection 2 . The 31 repayment of incentives pursuant to this subsection shall be 32 considered a tax payment due and payable to the department of 33 revenue by any taxpayer who has claimed such incentives, and 34 the failure to make such a repayment may be treated by the 35 -21- LSB 1186XD (12) 91 nls/ko 21/ 74 |
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| 44 | 44 | | |
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| 45 | 45 | | S.F. _____ H.F. _____ department of revenue in the same manner as a failure to pay 1 the tax shown due or required to be shown due with the filing of 2 a return or deposit form. In addition, the county shall have 3 the authority to take action to recover the value of property 4 taxes not collected as a result of the exemption provided to 5 the business under this part. 6 Sec. 29. Section 15.317, subsection 5, Code 2025, is amended 7 to read as follows: 8 5. The business shall not be relocating or reducing 9 operations as described in section 15.329, subsection 1 , 10 paragraph b follows , and as determined under the discretion 11 of the authority . : 12 a. The business shall not be solely relocating operations 13 from one area of the state. A project that does not create new 14 jobs or involve a substantial amount of new capital investment 15 shall be presumed to be a relocation. In determining whether a 16 business is solely relocating operations for purposes of this 17 paragraph, the authority shall consider a letter of support for 18 the move from the affected local community. 19 b. The business shall not be in the process of reducing 20 operations in one community while simultaneously applying for 21 the program. For purposes of this paragraph, a reduction in 22 operations within twelve months before or after an application 23 is submitted to the authority shall be presumed to be a 24 reduction in operations while simultaneously applying for 25 assistance under the program. 26 c. This subsection shall not be construed to prohibit 27 a business from expanding its operation in a community if 28 existing operations of a similar nature in this state are not 29 closed or substantially reduced. 30 Sec. 30. Section 15.318, subsection 2, paragraph b, Code 31 2025, is amended to read as follows: 32 b. The compliance Compliance cost fees authorized in section 33 15.330, subsection 12 , shall apply to all agreements entered 34 into under this program and shall be collected by the authority 35 -22- LSB 1186XD (12) 91 nls/ko 22/ 74 |
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| 46 | 46 | | |
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| 47 | 47 | | S.F. _____ H.F. _____ in the same manner and to the same extent as described in that 1 subsection. in the amount and manner as follows: 2 (1) The imposition of a one-time compliance cost fee of five 3 hundred dollars to be collected by the authority prior to the 4 issuance of a tax incentive certificate. 5 (2) The imposition of a compliance cost fee equal to 6 one-half of one percent of the value of tax incentives claimed 7 pursuant to an agreement that has an aggregate tax incentive 8 value of one hundred thousand dollars or greater. The 9 authority shall collect the fee from the business after the 10 tax incentive is claimed by the business from the department 11 of revenue. 12 Sec. 31. Section 15.318, subsection 4, Code 2025, is amended 13 to read as follows: 14 4. Termination and repayment. The failure by an eligible 15 business in fulfilling any requirement of the program or any of 16 the terms and obligations of an agreement entered into pursuant 17 to this section may result in the reduction, termination, or 18 rescission of the tax credits under section 15.319 and may 19 subject the eligible business to the repayment or recapture of 20 tax credits claimed. The repayment or recapture of tax credits 21 pursuant to this subsection shall be accomplished in the same 22 manner as provided in section 15.330, subsection 2 considered 23 a tax payment due and payable to the department of revenue by 24 any taxpayer who has claimed such incentives, and the failure 25 to make such a repayment may be treated by the department of 26 revenue in the same manner as a failure to pay the tax shown 27 due or required to be shown due with the filing of a return or 28 deposit form . 29 Sec. 32. Section 15.354, subsection 1, paragraph b, 30 subparagraph (2), Code 2025, is amended to read as follows: 31 (2) A report that meets the requirements and conditions 32 of section 15.330, subsection 9 submitted to the authority 33 by a business together with its application describing all 34 violations of environmental law or worker safety law within 35 -23- LSB 1186XD (12) 91 nls/ko 23/ 74 |
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| 48 | 48 | | |
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| 49 | 49 | | S.F. _____ H.F. _____ the last five years . If, upon review of the application, the 1 authority finds that the business has a record of violations 2 of the law, statutes, or rules that tends to show a consistent 3 pattern, the authority shall not provide incentives or 4 assistance to the business unless the authority finds either 5 that the violations did not seriously affect public health, 6 public safety, or the environment, or, if such violations 7 did seriously affect public health, public safety, or the 8 environment, that mitigating circumstances were present. 9 Sec. 33. Section 15.354, subsection 1, paragraph c, Code 10 2025, is amended by striking the paragraph. 11 Sec. 34. Section 15.354, subsection 3, paragraph b, Code 12 2025, is amended to read as follows: 13 b. The compliance Compliance cost fees imposed in section 14 15.330, subsection 12 , shall apply to all agreements entered 15 into under this program and shall be collected by the authority 16 in the same manner and to the same extent as described in that 17 subsection. in the amount and manner as follows: 18 (1) The imposition of a one-time compliance cost fee of five 19 hundred dollars to be collected by the authority prior to the 20 issuance of a tax incentive certificate or the disbursement of 21 financial assistance. 22 (2) The imposition of a compliance cost fee equal to 23 one-half of one percent of the value of tax incentives claimed 24 pursuant to an agreement that has an aggregate tax incentive 25 value of one hundred thousand dollars or greater. The 26 authority shall collect the fee from the business after the 27 tax incentive is claimed by the business from the department 28 of revenue. 29 Sec. 35. Section 15.354, subsection 5, Code 2025, is amended 30 to read as follows: 31 5. Termination and repayment. The failure by a housing 32 business in completing a housing project to comply with any 33 requirement of this program or any of the terms and obligations 34 of an agreement entered into pursuant to this section may 35 -24- LSB 1186XD (12) 91 nls/ko 24/ 74 |
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| 50 | 50 | | |
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| 51 | 51 | | S.F. _____ H.F. _____ result in the revocation, reduction, termination, or rescission 1 of the tax incentive award or the approved tax incentives and 2 may subject the housing business to the repayment or recapture 3 of tax incentives claimed under section 15.355 . The repayment 4 or recapture of tax incentives pursuant to this section shall 5 be accomplished in the same manner as provided in section 6 15.330, subsection 2 considered a tax payment due and payable 7 to the department of revenue by any taxpayer who has claimed 8 such incentives, and the failure to make such a repayment may 9 be treated by the department of revenue in the same manner as 10 a failure to pay the tax shown due or required to be shown due 11 with the filing of a return or deposit form . 12 Sec. 36. Section 15.499, subsection 1, Code 2025, is amended 13 to read as follows: 14 1. Except for the high quality jobs program administered 15 by the authority pursuant to sections 15.326 through 15.336 , 16 and the targeted jobs withholding credit pursuant to section 17 403.19A , an eligible business may apply for and be eligible to 18 receive other federal, state, and local incentives in addition 19 to the tax incentives issued by the authority to the eligible 20 business under the program. 21 Sec. 37. Section 15E.351, subsection 1, Code 2025, is 22 amended to read as follows: 23 1. The authority shall establish and administer a business 24 accelerator program to provide financial assistance for 25 the establishment and operation of a business accelerator 26 for technology-based, value-added agricultural, information 27 solutions, alternative and renewable energy including the 28 alternative and renewable energy sectors listed in section 29 476.42, subsection 1 , paragraph a , subparagraph (1), or 30 advanced manufacturing start-up businesses or for a satellite 31 of an existing business accelerator. The program shall be 32 designed to foster the accelerated growth of new and existing 33 businesses through the provision of technical assistance. The 34 authority may provide financial assistance under this section 35 -25- LSB 1186XD (12) 91 nls/ko 25/ 74 |
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| 52 | 52 | | |
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| 53 | 53 | | S.F. _____ H.F. _____ from moneys allocated for financial assistance for business 1 accelerators pursuant to section 15.335B, subsection 2. 2 Sec. 38. Section 15E.362, subsection 1, paragraph c, Code 3 2025, is amended to read as follows: 4 c. Financial assistance means the same as defined in 5 section 15.327 assistance provided only from the funds, rights, 6 and assets legally available to the authority pursuant to 7 chapter 15 and includes but is not limited to assistance in the 8 form of grants, loans, forgivable loans, and royalty payments . 9 Sec. 39. Section 15H.5, subsection 2, Code 2025, is amended 10 to read as follows: 11 2. The Iowa summer youth corps program is established 12 to provide meaningful summer enrichment programming to Iowa 13 youth. The program shall be administered by the commission 14 using a competitive grant process to implement projects in 15 accordance with program requirements. The commission shall 16 adopt administrative rules for the program, including but not 17 limited to incentives, grant criteria, and grantee selection 18 processes. A percentage of the grants shall be designated by 19 the commission to address the needs of economically distressed 20 areas as defined in section 15.335C . 21 Sec. 40. Section 15H.5, subsection 5, paragraph c, Code 22 2025, is amended to read as follows: 23 c. The commission shall give priority consideration 24 to approving those projects that target communities that 25 have disproportionately high rates of juvenile crime or low 26 rates of high school graduation or that have been designated 27 as an economically distressed areas as defined in section 28 15.335C area . 29 Sec. 41. Section 15H.5, Code 2025, is amended by adding the 30 following new subsection: 31 NEW SUBSECTION . 7. For purposes of this section, 32 economically distressed area means a county that meets at 33 least three of the following criteria: 34 a. The county ranks among the thirty-three Iowa counties 35 -26- LSB 1186XD (12) 91 nls/ko 26/ 74 |
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| 54 | 54 | | |
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| 55 | 55 | | S.F. _____ H.F. _____ with the highest average monthly unemployment rates for the 1 most recent twelve-month period based on the applicable local 2 area unemployment statistics produced by the United States 3 department of labor, bureau of labor statistics. 4 b. The county ranks among the thirty-three Iowa counties 5 with the highest average annualized unemployment rates for the 6 most recent five-year period based on the applicable local 7 area unemployment statistics produced by the United States 8 department of labor, bureau of labor statistics. 9 c. The county ranks among the thirty-three Iowa counties 10 with the lowest annual average weekly wages based on the most 11 recent quarterly census of employment and wages published 12 by the United States department of labor, bureau of labor 13 statistics. 14 d. The county ranks among the thirty-three Iowa counties 15 with the highest family poverty rates based on the most recent 16 American community survey five-year estimate released by the 17 United States census bureau. 18 e. The county ranks among the thirty-three Iowa counties 19 with the highest percentage population loss. Percentage 20 population loss shall be calculated by comparing the most 21 recent population estimate produced by the United States 22 census bureau to the most recent decennial census released 23 by the United States census bureau, except for a calendar 24 year in which the decennial census data is released, then the 25 percentage population loss shall be calculated by comparing the 26 population in the decennial census released that calendar year 27 to the population in the decennial census released ten years 28 prior. 29 f. The county ranks among the thirty-three Iowa counties 30 with the highest percentage of persons sixty-five years of age 31 or older based on the most recent American community survey 32 five-year estimate released by the United States census bureau. 33 Sec. 42. Section 159A.6B, subsection 2, Code 2025, is 34 amended to read as follows: 35 -27- LSB 1186XD (12) 91 nls/ko 27/ 74 |
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| 56 | 56 | | |
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| 57 | 57 | | S.F. _____ H.F. _____ 2. The office may execute contracts in order to provide 1 technical support and outreach services for purposes of 2 assisting and educating interested persons as provided in this 3 section . The office may also contract with a consultant to 4 provide part or all of these services. The office may require 5 that a person receiving assistance pursuant to this section 6 contribute up to fifty percent of the amount required to 7 support the costs of contracting with the consultant to provide 8 assistance to the person. The office shall assist the person 9 in completing any technical information required in order 10 to receive financial assistance by the economic development 11 authority pursuant to section 15.335B 15.511 . 12 Sec. 43. Section 266.19, Code 2025, is amended to read as 13 follows: 14 266.19 Renewable fuel assistance. 15 The university shall cooperate in assisting renewable fuel 16 production facilities supporting livestock operations managed 17 by persons receiving financial assistance pursuant to section 18 15.335B 15.511 . 19 Sec. 44. Section 422.10, subsection 5, Code 2025, is amended 20 by striking the subsection. 21 Sec. 45. Section 422.11F, subsection 2, Code 2025, is 22 amended by striking the subsection. 23 Sec. 46. Section 422.33, subsection 5, paragraph h, Code 24 2025, is amended by striking the paragraph. 25 Sec. 47. Section 422.33, subsection 12, paragraph b, Code 26 2025, is amended by striking the paragraph. 27 Sec. 48. Section 422.33, subsection 19, Code 2025, is 28 amended by striking the subsection. 29 Sec. 49. Section 422.60, subsection 5, paragraph b, Code 30 2025, is amended by striking the paragraph. 31 Sec. 50. Section 422.60, subsection 8, Code 2025, is amended 32 by striking the subsection. 33 Sec. 51. Section 427B.17, subsection 8, paragraph b, Code 34 2025, is amended to read as follows: 35 -28- LSB 1186XD (12) 91 nls/ko 28/ 74 |
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| 58 | 58 | | |
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| 59 | 59 | | S.F. _____ H.F. _____ b. Any electric power generating plant which operated during 1 the preceding assessment year at a net capacity factor of more 2 than twenty percent, shall not receive the benefits of this 3 section or of section 15.332 . 4 Sec. 52. Section 432.12C, subsection 2, Code 2025, is 5 amended by striking the subsection. 6 Sec. 53. Section 455B.104, subsection 2, Code 2025, is 7 amended to read as follows: 8 2. The department shall assist persons applying for 9 financial assistance to establish and operate renewable fuel 10 production facilities pursuant to section 15.335B 15.511 . 11 Sec. 54. Section 533.329, subsection 2, paragraphs c and d, 12 Code 2025, are amended by striking the paragraphs. 13 Sec. 55. REPEAL. Sections 15E.231, 15E.232, 15E.233, 14 422.11U, and 432.12H, Code 2025, are repealed. 15 Sec. 56. PRESERVATION OF EXISTING RIGHTS. The sections of 16 this division of this Act amending sections 422.10, 422.11F, 17 422.11U, 422.33, 422.60, 432.12C, 432.12H, and 533.329 shall 18 not limit, modify, or otherwise adversely affect any amount of 19 tax incentive issued, awarded, or allowed before December 31, 20 2025, nor shall it limit, modify, or otherwise adversely affect 21 a taxpayers right to claim or redeem a tax incentive issued, 22 awarded, or allowed before December 31, 2025, including but not 23 limited to any tax credit carryforward amount. 24 Sec. 57. EFFECTIVE DATE. This division of this Act takes 25 effect December 31, 2025. 26 DIVISION VI 27 SEED INVESTOR TAX CREDIT PROGRAM 28 Sec. 58. NEW SECTION . 15E.25 Purpose. 29 The purpose of this subchapter is to stimulate job growth, 30 create wealth, and accelerate the creation of new ventures by 31 using investment tax credits to incentivize the transfer of 32 capital from investors to entrepreneurs, particularly during 33 early-stage growth. 34 Sec. 59. NEW SECTION . 15E.26 Definitions. 35 -29- LSB 1186XD (12) 91 nls/ko 29/ 74 |
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| 60 | 60 | | |
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| 61 | 61 | | S.F. _____ H.F. _____ For purposes of this subchapter, unless the context 1 otherwise requires: 2 1. Affiliate means a spouse, child, or sibling of an 3 investor or a corporation, partnership, or trust in which an 4 investor has a controlling equity interest or in which an 5 investor exercises management control. 6 2. Authority means the economic development authority 7 created in section 15.105. 8 3. Entrepreneurial assistance program includes the 9 entrepreneur investment awards program administered under 10 section 15E.362, the receipt of services from a service 11 provider engaged pursuant to section 15.411, subsection 1, or 12 the program administered under section 15.411, subsection 2. 13 4. Investment means a minimum cash investment of ten 14 thousand dollars in a qualifying business. 15 5. Investor means a person making a cash investment in 16 a qualifying business. Investor does not include a person 17 that holds at least a seventy percent ownership interest as an 18 owner, member, or shareholder in a qualifying business. 19 6. Qualifying business means a business meeting the 20 criteria defined in section 15E.28. 21 7. Rural area means a city that has a population of 22 fifteen thousand or less. 23 8. Urban area means a city that has a population of 24 greater than fifteen thousand. 25 Sec. 60. NEW SECTION . 15E.27 Investment tax credits. 26 1. a. For tax years beginning on or after January 1, 2025, 27 a tax credit shall be allowed against the taxes imposed in 28 chapter 422, subchapters II, III, and V, and in chapter 432, 29 and against the moneys and credits tax imposed in section 30 533.329, for a portion of a taxpayers equity investment, as 31 provided in subsection 2, in a qualifying business. 32 b. An individual may claim a tax credit under this section 33 of a partnership, limited liability company, S corporation, 34 estate, or trust electing to have income taxed directly to 35 -30- LSB 1186XD (12) 91 nls/ko 30/ 74 |
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| 62 | 62 | | |
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| 63 | 63 | | S.F. _____ H.F. _____ the individual. The amount claimed by the individual shall 1 be based upon the pro rata share of the individuals earnings 2 from the partnership, limited liability company, S corporation, 3 estate, or trust. 4 c. A tax credit shall be allowed only for an investment 5 made in the form of cash to purchase equity in a qualifying 6 business. 7 d. An affiliate of a qualifying business or an affiliate of 8 a qualifying businesss principals shall not be eligible for a 9 tax credit under this section. 10 e. (1) For a tax credit claimed against the taxes imposed 11 on any of the following, any tax credit in excess of the tax 12 liability is refundable: 13 (a) A tax credit claimed against the taxes imposed in 14 chapter 422, subchapters II, III, and V. 15 (b) A tax credit claimed against the taxes imposed in 16 chapter 432. 17 (c) A tax credit claimed against the moneys and credits tax 18 imposed in section 533.329. 19 (2) A tax credit shall not be carried back to a tax year 20 prior to the tax year in which the taxpayer redeems the tax 21 credit. 22 2. a. The amount of the tax credit shall equal twenty 23 percent of the taxpayers equity investment if the qualifying 24 business is located in an urban area at the time of the 25 investment. The amount of the tax credit shall equal 26 thirty-five percent of the taxpayers equity investment if the 27 qualifying business is located in a rural area at the time of 28 the investment. 29 b. The maximum amount of a tax credit that may be issued 30 per fiscal year to a natural person and the persons spouse 31 or dependent shall not exceed one hundred thousand dollars 32 combined. For purposes of this paragraph, a tax credit issued 33 to a partnership, limited liability company, S corporation, 34 estate, or trust electing to have income taxed directly to 35 -31- LSB 1186XD (12) 91 nls/ko 31/ 74 |
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| 64 | 64 | | |
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| 65 | 65 | | S.F. _____ H.F. _____ the individual shall be deemed to be issued to the individual 1 owners based upon the pro rata share of the individuals 2 earnings from the entity. For purposes of this paragraph, 3 dependent has the same meaning as provided by the Internal 4 Revenue Code. 5 c. The maximum amount of tax credits that may be issued 6 per fiscal year for equity investments in any one qualifying 7 business shall not exceed five hundred thousand dollars. 8 3. An investment shall be deemed to have been made on the 9 same date as the date of acquisition of the equity interest as 10 determined by the Internal Revenue Code. 11 4. The authority shall not issue tax credits under this 12 section in excess of the amount approved by the authority for 13 any one fiscal year pursuant to section 15.119, subsection 2, 14 paragraph a . 15 5. A tax credit shall not be transferred to any other 16 person. 17 6. The authority shall develop a system for registration and 18 issuance of tax credits authorized pursuant to this subchapter 19 and shall control distribution of all tax credit certificates 20 to investors pursuant to this subchapter. The authority 21 shall develop rules for the qualification and administration 22 of qualifying businesses. The department of revenue shall 23 adopt rules pursuant to chapter 17A as necessary for the 24 administration of this subchapter. 25 Sec. 61. NEW SECTION . 15E.28 Qualifying businesses. 26 1. a. In order for an equity investment to qualify for 27 a tax credit, the qualifying business shall submit a joint 28 application to the authority consisting of an investor section 29 and a section for the business. An application shall not be 30 considered to be submitted unless or until both the investor 31 and the business have completed and submitted the investors 32 and businesss parts of the application, including payment of a 33 nonrefundable application fee. 34 b. Applications shall be submitted to the authority by March 35 -32- LSB 1186XD (12) 91 nls/ko 32/ 74 |
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| 66 | 66 | | |
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| 67 | 67 | | S.F. _____ H.F. _____ 31 of each year. The authority shall award the tax credits 1 based upon the amount received. 2 2. In order to be a qualifying business, a business must 3 meet all of the following criteria: 4 a. The principal business operations, and a majority of 5 employees, of the business are located in this state. 6 b. The business has been in operation for five years or 7 less. 8 c. The business has at least one full-time equivalent 9 employee. 10 d. The businesss primary operations are in advanced 11 manufacturing, bioscience, insurance and finance, and 12 technologies. 13 e. The business is an independent organization that is not 14 part of, or an affiliate of, a larger parent company. 15 f. The business shall establish that its owners, directors, 16 officers, and employees have an appropriate level of experience 17 consistent with the nature of the business. The authority may 18 consult with outside service providers to determine whether a 19 business meets the requirement of this paragraph. A business 20 that has participated in an entrepreneurial assistance program 21 shall be presumed to meet the requirement of this paragraph. 22 g. The business is not a business engaged primarily in 23 retail sales, real estate, or the provision of health care or 24 other services that require a professional license. 25 h. The business shall not have a net worth that exceeds two 26 million dollars. 27 i. The business shall have secured all of the following at 28 the time of application for tax credits: 29 (1) At least two investors. For purposes of this 30 subparagraph, investor includes a person who executes a 31 binding investment commitment to a business. 32 (2) Total equity financing, binding investment commitments, 33 or some combination thereof, equal to at least five hundred 34 thousand dollars, from investors. 35 -33- LSB 1186XD (12) 91 nls/ko 33/ 74 |
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| 68 | 68 | | |
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| 69 | 69 | | S.F. _____ H.F. _____ 3. A qualifying business shall have the burden of proof 1 to demonstrate to the authority its qualifications under this 2 section, and shall have the obligation to notify the authority 3 in a timely manner of any changes in the qualifications of 4 the business or in the eligibility of investors to redeem the 5 investment tax credits in any tax year. 6 4. After verifying the eligibility of a qualifying 7 business, the authority shall issue a tax credit certificate 8 to be included with the equity investors tax return. The tax 9 credit certificate must contain the taxpayers name, address, 10 tax identification number, the amount of credit, the name of 11 the qualifying business, and other information required by the 12 department of revenue. The tax credit certificate, unless 13 rescinded by the authority, shall be accepted by the department 14 of revenue as payment for taxes imposed pursuant to chapter 15 422, subchapters II, III, and V, and in chapter 432, and for 16 the moneys and credits tax imposed in section 533.329, subject 17 to any conditions or restrictions placed by the authority upon 18 the face of the tax credit certificate and subject to the 19 limitations of section 15E.27. 20 Sec. 62. NEW SECTION . 15E.29 Confidentiality reports. 21 1. Except as provided in subsection 2, all information or 22 records in the possession of the authority with respect to this 23 subchapter shall be presumed by the authority to be a trade 24 secret protected under chapter 550 or common law, and shall be 25 kept confidential by the authority unless otherwise ordered by 26 a court. 27 2. All of the following shall be considered public 28 information under chapter 22: 29 a. The identity of a qualifying business. 30 b. The identity of an investor and the qualifying business 31 in which the investor made an equity investment. 32 c. The number of tax credit certificates issued by the 33 authority. 34 d. The total dollar amount of tax credits issued by the 35 -34- LSB 1186XD (12) 91 nls/ko 34/ 74 |
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| 70 | 70 | | |
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| 71 | 71 | | S.F. _____ H.F. _____ authority. 1 3. The authority shall include as part of the annual 2 report under section 15.107B a listing of eligible qualifying 3 businesses, the number of tax credit certificates, and the 4 amount of tax credits issued by the authority in each fiscal 5 year. 6 Sec. 63. Section 15E.52, subsection 5, paragraph a, Code 7 2025, is amended to read as follows: 8 a. To receive a tax credit, a taxpayer must submit an 9 application to the board. The board shall issue certificates 10 under this section on a first-come, first-served basis, which 11 certificates may be redeemed for tax credits. The board shall 12 issue such certificates so that not more than the amount 13 allocated for such tax credits under section 15.119, subsection 14 2, paragraph a , may be claimed. The board shall not issue a 15 certificate before September 1, 2014. 16 Sec. 64. Section 15E.52, subsection 7, paragraph g, Code 17 2025, is amended to read as follows: 18 g. The fund proposes to obtain at least fifteen three 19 million dollars in binding investment commitments and to invest 20 a minimum of fifteen three million dollars in companies that 21 have a principal place of business in the state. 22 Sec. 65. CODE EDITOR DIRECTIVE. The Code editor is directed 23 to do the following: 24 1. Entitle chapter 15E, subchapter IV, Seed Investor Tax 25 Credit and include sections 15E.25 through 15E.29. 26 2. Correct internal references in the Code and in enacted 27 legislation as necessary due to the enactment of this division 28 of this Act. 29 DIVISION VII 30 ELIMINATION OF INVESTMENTS IN QUALIFYING BUSINESSES TAX CREDIT 31 PROGRAM 32 Sec. 66. REPEAL. Sections 15E.41, 15E.42, 15E.43, 15E.44, 33 and 15E.46, Code 2025, are repealed. 34 Sec. 67. TRANSITION PROVISIONS. A tax credit issued by the 35 -35- LSB 1186XD (12) 91 nls/ko 35/ 74 |
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| 72 | 72 | | |
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| 73 | 73 | | S.F. _____ H.F. _____ economic development authority to a taxpayer before June 30, 1 2026, for an investment in a qualifying business pursuant to 2 chapter 15E, subchapter V, Code 2025, shall remain valid per 3 the terms under which the tax credit was issued by the economic 4 development authority, and the provisions of chapter 15E, 5 subchapter V, Code 2025. 6 DIVISION VIII 7 INVESTMENTS IN QUALIFYING BUSINESS TAX CREDIT PROGRAM 8 CONFORMING CHANGES 9 Sec. 68. Section 2.48, subsection 3, paragraph d, 10 subparagraph (1), Code 2025, is amended by striking the 11 subparagraph. 12 Sec. 69. Section 15E.52, subsection 4, Code 2025, is amended 13 to read as follows: 14 4. A taxpayer shall not claim a tax credit under this 15 section if the taxpayer is a venture capital investment fund 16 allocation manager for the Iowa fund of funds created in 17 section 15E.65 or an investor that receives a tax credit for 18 the same investment in a qualifying business as described in 19 section 15E.44 or in a community-based seed capital fund as 20 described in section 15E.45 , Code 2015 15E.28 . 21 Sec. 70. Section 422.11F, subsection 1, Code 2025, is 22 amended to read as follows: 23 1. The taxes imposed under this subchapter , less the credits 24 allowed under section 422.12 , shall be reduced by an investment 25 tax credit authorized pursuant to section 15E.43 15E.27 for an 26 investment in a qualifying business. 27 Sec. 71. Section 422.33, subsection 12, paragraph a, Code 28 2025, is amended to read as follows: 29 a. The taxes imposed under this subchapter shall be reduced 30 by an investment tax credit authorized pursuant to section 31 15E.43 15E.27 for an investment in a qualifying business. 32 Sec. 72. Section 422.60, subsection 5, paragraph a, Code 33 2025, is amended to read as follows: 34 a. The taxes imposed under this subchapter shall be reduced 35 -36- LSB 1186XD (12) 91 nls/ko 36/ 74 |
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| 74 | 74 | | |
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| 75 | 75 | | S.F. _____ H.F. _____ by an investment tax credit authorized pursuant to section 1 15E.43 15E.27 for an investment in a qualifying business. 2 Sec. 73. Section 432.12C, subsection 1, Code 2025, is 3 amended to read as follows: 4 1. The tax imposed under this chapter shall be reduced by 5 an investment tax credit authorized pursuant to section 15E.43 6 15E.27 for an investment in a qualifying business. 7 Sec. 74. Section 533.329, subsection 2, paragraph e, Code 8 2025, is amended to read as follows: 9 e. The moneys and credits tax imposed under this section 10 shall be reduced by an investment tax credit authorized 11 pursuant to section 15E.43 15E.27 . 12 Sec. 75. PRESERVATION OF EXISTING RIGHTS. The sections of 13 this division of this Act amending sections 422.11F, 422.33, 14 422.60, 432.12C, and 533.329 shall not limit, modify, or 15 otherwise adversely affect any amount of investment tax credit 16 under section 15E.43, Code 2025, that was issued, awarded, 17 or allowed before July 1, 2026, and shall not limit, modify, 18 or otherwise adversely affect a taxpayers right to claim or 19 redeem an investment tax credit under section 15E.43, Code 20 2025, that was issued, awarded, or allowed before July 1, 21 2026, including but not limited to any tax credit carryforward 22 amount. 23 DIVISION IX 24 IOWA FILM PRODUCTION INCENTIVE PROGRAM AND FUND 25 Sec. 76. NEW SECTION . 15.517 Iowa film production incentive 26 program. 27 1. As used in this section: 28 a. Fund means the Iowa film production incentive fund. 29 b. Program means the Iowa film production incentive 30 program. 31 c. Qualified expenditure means an allowed expense, as 32 determined by the authority by rule, that is incurred by a 33 qualified production facility on or after July 1, 2025, but 34 before July 1, 2027, for producing a qualified production. 35 -37- LSB 1186XD (12) 91 nls/ko 37/ 74 |
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| 76 | 76 | | |
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| 77 | 77 | | S.F. _____ H.F. _____ d. Qualified production means a feature film, television 1 series, documentary, or unscripted series that is rated G, PG, 2 PG-13, or R by the classification and ratings administration of 3 the motion picture association of America or the TV parental 4 guidelines monitoring board. 5 e. Qualified production facility or facility means any 6 of the following: 7 (1) A dedicated studio located in this state at which 8 qualified productions can be produced. 9 (2) A studio located in this state at which all 10 preproduction and film production take place for a qualified 11 production filmed on location in this state. 12 2. a. The authority shall establish and administer an Iowa 13 film production incentive program for the purpose of providing 14 rebates to qualified production facilities for qualified 15 expenditures. 16 b. The authority shall establish eligibility criteria for 17 the program by rule. 18 (1) The eligibility criteria for qualified production 19 facilities must require that a facility have all of the 20 following: 21 (a) A soundstage with dimensions covering at least twelve 22 thousand five hundred square feet of floor space. 23 (b) A permanent grid system or an alternative rigging 24 support structure rated for overhead suspension, or on-site 25 resources for fly rigging. 26 (c) Production and postproduction sound rooms that are 27 sound treated to meet sound engineer-approved ambient noise 28 level ratings. 29 (d) Electric service from an electric utility, or 30 sufficient electric service that does not require use of an 31 electric generator. 32 (e) An agreement between the authority and the facility that 33 the phrase filmed in Iowa appears at the beginning of any 34 credits in the qualified production. 35 -38- LSB 1186XD (12) 91 nls/ko 38/ 74 |
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| 78 | 78 | | |
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| 79 | 79 | | S.F. _____ H.F. _____ (2) The eligibility criteria for a qualified production 1 must include: 2 (a) A production budget of at least one million dollars and 3 evidence the production budget is fully funded. 4 (b) Availability to the public for viewing at a venue where 5 admission is charged, or availability for purchase, for rental, 6 or through a streaming service that requires a subscription. 7 (3) The eligibility criteria for qualified expenditures 8 must include the following: 9 (a) The requirements for substantiation of and submission 10 of expenses for industry standard activities including expenses 11 for cast members, equipment, studio production facilities, 12 hospitality services, certified public accountant services, 13 per diem payments, payments to businesses located in this 14 state, accommodations, and any other expenses allowed by the 15 authority. Qualified expenditures shall not include expenses 16 for entertainment, studio executive airfare, royalties, and 17 publicity for the qualified production. 18 (b) Written acknowledgment by the qualified production 19 facility that no qualified expenses were incurred prior to 20 approval of the application by the authority. 21 3. An application for a rebate under the program shall be 22 submitted by a qualified production facility to the authority 23 for approval in the form and manner prescribed by the authority 24 by rule. 25 4. a. If a qualified production facilitys application 26 is approved by the authority, the maximum rebate paid to the 27 facility under the program shall equal thirty percent of the 28 facilitys qualified expenditures excluding any sales, use, and 29 hotel and motel taxes paid. 30 b. Prior to disbursement of the rebate, a qualified 31 production facility shall submit all of the following to the 32 authority at the expense of the facility: 33 (1) An examination of the qualified expenditures completed 34 by a certified public accountant, as defined in section 35 -39- LSB 1186XD (12) 91 nls/ko 39/ 74 |
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| 80 | 80 | | |
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| 81 | 81 | | S.F. _____ H.F. _____ 542.3, in accordance with the currently effective statements 1 on standards for attestation engagements established by the 2 American institute of certified public accountants. 3 (2) A statement of the final amount of qualified 4 expenditures. 5 (3) Any other information the authority deems necessary to 6 ensure compliance with this section. 7 5. a. An Iowa film production incentive fund is created 8 in the state treasury under the control of the authority. The 9 fund shall consist of moneys appropriated to the authority and 10 any other moneys available to, obtained by, or accepted by the 11 authority for placement in the fund. The fund shall be used to 12 provide rebates under the program. 13 b. The cumulative value of rebates claimed by qualified 14 production facilities pursuant to this section shall not exceed 15 ten million dollars. 16 c. Notwithstanding section 8.33, moneys in the fund 17 that remain unencumbered or unobligated at the close of the 18 fiscal year shall not revert but shall remain available for 19 expenditure for the purposes designated until the close of 20 the succeeding fiscal year. Notwithstanding section 12C.7, 21 interest or earnings on moneys in the fund shall be credited 22 to the fund. 23 6. The authority shall not use more than five percent of 24 the moneys in the fund at the beginning of each fiscal year for 25 purposes of administrative costs, technical assistance, and 26 other program support. 27 7. The authority shall adopt rules pursuant to chapter 17A 28 to administer this section. 29 8. This section is repealed July 1, 2027. 30 Sec. 77. CODE EDITOR DIRECTIVE. The Code editor shall 31 designate section 15.517, as enacted in this division of this 32 Act, as part 34 of subchapter II. 33 DIVISION X 34 TARGETED JOBS WITHHOLDING CREDIT MODIFICATIONS AND REPEAL 35 -40- LSB 1186XD (12) 91 nls/ko 40/ 74 |
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| 82 | 82 | | |
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| 83 | 83 | | S.F. _____ H.F. _____ Sec. 78. Section 2.48, subsection 3, paragraph b, 1 subparagraph (2), Code 2025, is amended to read as follows: 2 (2) (a) The targeted jobs withholding credits available 3 under section 403.19A . 4 (b) This subparagraph is repealed January 1, 2038. 5 Sec. 79. Section 403.19A, subsection 3, paragraphs a, b, and 6 j, Code 2025, are amended to read as follows: 7 a. A pilot project city may provide by resolution for the 8 deposit into a designated withholding project fund of the 9 targeted jobs withholding credit described in this section . 10 The targeted jobs withholding credit shall be based upon the 11 wages paid to employees pursuant to a withholding agreement. 12 An employer entering into a withholding agreement on or after 13 the effective date of this division of this Act shall not be 14 credited the payments made by the employer pursuant to section 15 422.16 after June 30, 2027. 16 b. (1) An For an agreement entered into prior to the 17 effective date of this division of this Act, an amount equal 18 to three percent of the gross wages paid by an employer to each 19 employee under a withholding agreement shall be credited from 20 the payment made by the employer pursuant to section 422.16 . 21 If the amount of the withholding by the employer is less than 22 three percent of the gross wages paid to the employees covered 23 by the withholding agreement, the employer shall receive a 24 credit against other withholding taxes due by the employer 25 or may carry the credit forward for up to ten years or until 26 depleted, whichever is the earlier. The employer shall remit 27 the amount of the credit quarterly, in the same manner as 28 withholding payments are reported to the department of revenue, 29 to the pilot project city to be allocated to and when collected 30 paid into a designated withholding project fund for the 31 project. All amounts so deposited shall be used or pledged by 32 the pilot project city for a project related to the employer 33 pursuant to the withholding agreement. 34 (2) For an agreement entered into on or after the effective 35 -41- LSB 1186XD (12) 91 nls/ko 41/ 74 |
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| 84 | 84 | | |
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| 85 | 85 | | S.F. _____ H.F. _____ date of this division of this Act, an amount equal to one 1 and one-half percent of the gross wages paid by an employer 2 to each employee under a withholding agreement shall be 3 credited from the payment made by the employer pursuant to 4 section 422.16. The employer shall remit the amount of the 5 credit quarterly, in the same manner as withholding payments 6 are reported to the department of revenue, to the pilot 7 project city to be allocated to and when collected paid into 8 a designated withholding project fund for the project. All 9 amounts so deposited shall be used or pledged by the pilot 10 project city for a project related to the employer pursuant to 11 the withholding agreement. 12 j. (1) An employer may participate in a new jobs credit 13 from withholding under section 260E.5 , or a supplemental new 14 jobs credit from withholding under section 15E.197, Code 2014, 15 or under section 15.331, Code 2005 , at the same time as the 16 employer is participating in the withholding credit under this 17 section . Notwithstanding any other provision in this section , 18 the new jobs credit from withholding under section 260E.5 , and 19 the supplemental new jobs credit from withholding under section 20 15E.197, Code 2014, or under section 15.331, Code 2005 , shall 21 be collected and disbursed prior to the withholding credit 22 under this section . 23 (2) An employer shall not be eligible to participate in the 24 MEGA program in chapter 15, subchapter II, part 32. 25 Sec. 80. Section 403.19A, Code 2025, is amended by adding 26 the following new subsection: 27 NEW SUBSECTION . 4. This section is repealed January 1, 28 2038. 29 Sec. 81. EFFECTIVE DATE. This division of this Act, being 30 deemed of immediate importance, takes effect upon enactment. 31 DIVISION XI 32 EMPLOYER CHILD CARE TAX CREDIT REPEAL 33 Sec. 82. Section 237A.31, subsection 1, Code 2025, is 34 amended to read as follows: 35 -42- LSB 1186XD (12) 91 nls/ko 42/ 74 |
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| 86 | 86 | | |
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| 87 | 87 | | S.F. _____ H.F. _____ 1. The taxes imposed under chapter 422, subchapter II or 1 III , the franchise tax imposed under chapter 422, subchapter 2 V , the gross premiums tax under chapter 432 , or the moneys and 3 credits tax imposed under section 533.329 shall be reduced 4 by an employer child care tax credit through the tax year 5 beginning on or after January 1, 2025, but before January 1, 6 2026, equal to the proportion of the federal employer-provided 7 child care tax credit provided in section 45F of the Internal 8 Revenue Code the taxpayer was eligible for in the same tax year 9 attributable to expenditures made in this state. 10 Sec. 83. Section 237A.31, Code 2025, is amended by adding 11 the following new subsection: 12 NEW SUBSECTION . 5. This section is repealed January 1, 13 2031. 14 Sec. 84. Section 422.12O, Code 2025, is amended by adding 15 the following new subsection: 16 NEW SUBSECTION . 3. This section is repealed January 1, 17 2031. 18 Sec. 85. Section 422.33, subsection 32, Code 2025, is 19 amended to read as follows: 20 32. a. The taxes imposed under this subchapter shall be 21 reduced by an employer child care tax credit allowed pursuant 22 to section 237A.31 . 23 b. This subsection is repealed January 1, 2031. 24 Sec. 86. Section 422.60, subsection 15, Code 2025, is 25 amended to read as follows: 26 15. a. The taxes imposed under this subchapter shall be 27 reduced by an employer child care tax credit allowed pursuant 28 to section 237A.31 . 29 b. This subsection is repealed January 1, 2031. 30 Sec. 87. Section 432.12O, Code 2025, is amended to read as 31 follows: 32 432.12O Employer child care tax credit. 33 1. The taxes imposed under this chapter shall be reduced by 34 an employer child care tax credit allowed pursuant to section 35 -43- LSB 1186XD (12) 91 nls/ko 43/ 74 |
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| 88 | 88 | | |
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| 89 | 89 | | S.F. _____ H.F. _____ 237A.31 . 1 2. This section is repealed January 1, 2031. 2 Sec. 88. Section 533.329, subsection 2, paragraph m, Code 3 2025, is amended to read as follows: 4 m. (1) The moneys and credits tax imposed under this 5 section shall be reduced by an employer child care tax credit 6 allowed pursuant to section 237A.31 . 7 (2) This paragraph is repealed January 1, 2031. 8 DIVISION XII 9 ASSISTIVE DEVICE TAX CREDIT REPEAL 10 Sec. 89. Section 2.48, subsection 3, paragraph e, 11 subparagraph (5), Code 2025, is amended to read as follows: 12 (5) (a) The assistive device corporate tax credit under 13 section 422.33 . 14 (b) This subparagraph is repealed January 1, 2031. 15 Sec. 90. Section 422.33, subsection 9, paragraph a, 16 subparagraph (1), Code 2025, is amended to read as follows: 17 (1) The taxes imposed under this subchapter shall be 18 reduced by an assistive device tax credit through the tax year 19 beginning on or after January 1, 2024, but before January 1, 20 2025 . A small business purchasing, renting, or modifying 21 an assistive device or making workplace modifications for 22 an individual with a disability who is employed or will 23 be employed by the small business is eligible, subject to 24 availability of credits, to receive this assistive device 25 tax credit which is equal to fifty percent of the first five 26 thousand dollars paid during the tax year for the purchase, 27 rental, or modification of the assistive device or for making 28 the workplace modifications. The following percentage of any 29 credit in excess of the tax liability shall be refunded with 30 interest in accordance with section 421.60, subsection 2 , 31 paragraph e , as follows: 32 (a) For the tax year beginning on or after January 1, 2023, 33 but before January 1, 2024, ninety-five percent. 34 (b) For the tax year beginning on or after January 1, 2024, 35 -44- LSB 1186XD (12) 91 nls/ko 44/ 74 |
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| 90 | 90 | | |
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| 91 | 91 | | S.F. _____ H.F. _____ but before January 1, 2025, ninety percent. 1 (c) For the tax year beginning on or after January 1, 2025, 2 but before January 1, 2026, eighty-five percent. 3 (d) For the tax year beginning on or after January 1, 2026, 4 but before January 1, 2027, eighty percent. 5 (e) For tax years beginning on or after January 1, 2027, 6 seventy-five percent. 7 Sec. 91. Section 422.33, subsection 9, Code 2025, is amended 8 by adding the following new paragraph: 9 NEW PARAGRAPH . d. This subsection is repealed January 1, 10 2031. 11 Sec. 92. RETROACTIVE APPLICABILITY. This division of this 12 Act applies retroactively to January 1, 2025, for tax years 13 beginning on or after that date. 14 DIVISION XIII 15 ENDOW IOWA TAX CREDIT REPEAL 16 Sec. 93. Section 2.48, subsection 3, paragraph c, 17 subparagraph (2), Code 2025, is amended to read as follows: 18 (2) (a) The endow Iowa tax credits authorized under section 19 15E.305 . 20 (b) This subparagraph is repealed January 1, 2031. 21 Sec. 94. Section 15E.303, Code 2025, is amended to read as 22 follows: 23 15E.303 Definitions. 24 1. As used in this subchapter , unless the context otherwise 25 requires: 26 1. a. Board means the governing board of the lead 27 philanthropic entity identified by the authority pursuant to 28 section 15E.304 , Code 2025 . 29 2. b. Business means a business operating within the 30 state and includes individuals operating a sole proprietorship 31 or having rental, royalty, or farm income in this state and 32 includes a consortium of businesses. 33 3. c. Community affiliate organization means a group of 34 five or more community leaders or advocates organized for the 35 -45- LSB 1186XD (12) 91 nls/ko 45/ 74 |
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| 92 | 92 | | |
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| 93 | 93 | | S.F. _____ H.F. _____ purpose of increasing philanthropic activity in an identified 1 community or geographic area in this state with the intention 2 of establishing a community affiliate endowment fund. 3 4. d. Endow Iowa qualified community foundation means a 4 community foundation organized or operating in this state that 5 attains the national standards established by the national 6 council on foundations as determined by the authority in 7 collaboration with the Iowa council of foundations. 8 5. e. Endowment gift means an irrevocable contribution to 9 a permanent endowment held by an endow Iowa qualified community 10 foundation. 11 6. f. Lead philanthropic entity means the entity 12 identified by the authority pursuant to section 15E.304 , Code 13 2025 . 14 2. This section is repealed January 1, 2031. 15 Sec. 95. Section 15E.305, subsection 1, Code 2025, is 16 amended to read as follows: 17 1. For tax years beginning on or after January 1, 2003, 18 but before January 1, 2026, a tax credit shall be allowed 19 against the taxes imposed in chapter 422, subchapters II , 20 III , and V , and in chapter 432 , and against the moneys and 21 credits tax imposed in section 533.329 equal to twenty-five 22 percent of a taxpayers endowment gift to an endow Iowa 23 qualified community foundation. An individual may claim a tax 24 credit under this section of a partnership, limited liability 25 company, S corporation, estate, or trust electing to have 26 income taxed directly to the individual. The amount claimed 27 by the individual shall be based upon the pro rata share of the 28 individuals earnings from the partnership, limited liability 29 company, S corporation, estate, or trust. A tax credit shall 30 be allowed only for an endowment gift made to an endow Iowa 31 qualified community foundation for a permanent endowment 32 fund established to benefit a charitable cause in this state 33 for gifts made prior to July 1, 2025 . The amount of the 34 endowment gift for which the tax credit is claimed shall not 35 -46- LSB 1186XD (12) 91 nls/ko 46/ 74 |
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| 94 | 94 | | |
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| 95 | 95 | | S.F. _____ H.F. _____ be deductible in determining taxable income for state income 1 tax purposes. Any tax credit in excess of the taxpayers tax 2 liability for the tax year may be credited to the tax liability 3 for the following five years or until depleted, whichever 4 occurs first. A tax credit shall not be carried back to a tax 5 year prior to the tax year in which the taxpayer claims the tax 6 credit. 7 Sec. 96. Section 15E.305, Code 2025, is amended by adding 8 the following new subsection: 9 NEW SUBSECTION . 5. This section is repealed January 1, 10 2031. 11 Sec. 97. Section 15E.311, subsection 4, paragraph c, Code 12 2025, is amended to read as follows: 13 c. Eligible county recipient means an endow Iowa qualified 14 community foundation or community affiliate organization , as 15 defined in section 15E.303 , that is selected , in accordance 16 with the procedures described in section 15E.304 , to receive 17 moneys from an account created in this section for a particular 18 county. To be selected as an eligible county recipient, a 19 community affiliate organization shall establish a county 20 affiliate fund to receive moneys as provided by this section . 21 Sec. 98. Section 15E.311, subsection 4, Code 2025, is 22 amended by adding the following new paragraphs: 23 NEW PARAGRAPH . 0c. Community affiliate organization 24 means a group of five or more community leaders or advocates 25 organized for the purpose of increasing philanthropic activity 26 in an identified community or geographic area in this state 27 with the intention of establishing a community affiliate 28 endowment fund. 29 NEW PARAGRAPH . d. Iowa qualified community foundation 30 means a community foundation organized or operating in this 31 state that attains the national standards established by the 32 national council on foundations as determined by the authority 33 in collaboration with the Iowa council of foundations. 34 Sec. 99. Section 15E.311, subsection 6, Code 2025, is 35 -47- LSB 1186XD (12) 91 nls/ko 47/ 74 |
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| 96 | 96 | | |
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| 97 | 97 | | S.F. _____ H.F. _____ amended by striking the subsection. 1 Sec. 100. Section 422.11H, Code 2025, is amended to read as 2 follows: 3 422.11H Endow Iowa tax credit. 4 1. The tax imposed under this subchapter , less the credits 5 allowed under section 422.12 , shall be reduced by an endow Iowa 6 tax credit authorized pursuant to section 15E.305 . 7 2. This section is repealed January 1, 2031. 8 Sec. 101. Section 422.33, subsection 14, Code 2025, is 9 amended to read as follows: 10 14. a. The taxes imposed under this subchapter shall be 11 reduced by an endow Iowa tax credit authorized pursuant to 12 section 15E.305 . 13 b. This subsection is repealed January 1, 2031. 14 Sec. 102. Section 422.60, subsection 6, Code 2025, is 15 amended to read as follows: 16 6. a. The taxes imposed under this subchapter shall be 17 reduced by an endow Iowa tax credit authorized pursuant to 18 section 15E.305 . 19 b. This subsection is repealed January 1, 2031. 20 Sec. 103. Section 432.12D, Code 2025, is amended to read as 21 follows: 22 432.12D Endow Iowa tax credit. 23 1. The tax imposed under this chapter shall be reduced by an 24 endow Iowa tax credit authorized pursuant to section 15E.305 . 25 2. This section is repealed January 1, 2031. 26 Sec. 104. Section 533.329, subsection 2, paragraph g, Code 27 2025, is amended to read as follows: 28 g. (1) The moneys and credits tax imposed under this 29 section shall be reduced by an endow Iowa tax credit authorized 30 pursuant to section 15E.305 . 31 (2) This paragraph is repealed January 1, 2031. 32 Sec. 105. REPEAL. Sections 15E.301, 15E.302, and 15E.304, 33 Code 2025, are repealed. 34 DIVISION XIV 35 -48- LSB 1186XD (12) 91 nls/ko 48/ 74 |
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| 98 | 98 | | |
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| 99 | 99 | | S.F. _____ H.F. _____ RESEARCH ACTIVITIES TAX CREDIT REPEAL 1 Sec. 106. Section 422.10, subsection 1, unnumbered 2 paragraph 1, Code 2025, is amended to read as follows: 3 The taxes imposed under this subchapter shall be reduced by 4 a state tax credit for increasing research activities in this 5 state through the tax year beginning on or after January 1, 6 2025, but before January 1, 2026 . 7 Sec. 107. Section 422.10, subsection 1, paragraph b, 8 subparagraph (3), subparagraph division (d), subparagraph 9 subdivision (iv), Code 2025, is amended by striking the 10 subparagraph subdivision. 11 Sec. 108. Section 422.10, subsection 1, paragraph b, 12 subparagraph (3), subparagraph division (e), Code 2025, is 13 amended to read as follows: 14 (e) For tax years beginning on or after January 1, 15 2027 2026 , amounts paid for supplies as defined in section 16 41(b)(2)(C) of the Internal Revenue Code shall not be qualified 17 research expenses in this state. 18 Sec. 109. Section 422.10, Code 2025, is amended by adding 19 the following new subsection: 20 NEW SUBSECTION . 7. This section is repealed January 1, 21 2027. 22 Sec. 110. Section 422.33, subsection 5, paragraph a, 23 unnumbered paragraph 1, Code 2025, is amended to read as 24 follows: 25 The taxes imposed under this subchapter shall be reduced by 26 a state tax credit through the tax year beginning on or after 27 January 1, 2025, but before January 1, 2026, for increasing 28 research activities in this state equal to the sum of the 29 following: 30 Sec. 111. Section 422.33, subsection 5, paragraph b, 31 subparagraph (2), subparagraph division (d), subparagraph 32 subdivision (iv), Code 2025, is amended by striking the 33 subparagraph subdivision. 34 Sec. 112. Section 422.33, subsection 5, paragraph b, 35 -49- LSB 1186XD (12) 91 nls/ko 49/ 74 |
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| 100 | 100 | | |
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| 101 | 101 | | S.F. _____ H.F. _____ subparagraph (2), subparagraph division (e), Code 2025, is 1 amended to read as follows: 2 (e) For tax years beginning on or after January 1, 3 2027 2026 , amounts paid for supplies as defined in section 4 41(b)(2)(C) of the Internal Revenue Code shall not be qualified 5 research expenses in this state. 6 Sec. 113. Section 422.33, subsection 5, Code 2025, is 7 amended by adding the following new paragraph: 8 NEW PARAGRAPH . j. This subsection is repealed January 1, 9 2027. 10 DIVISION XV 11 RESEARCH AND DEVELOPMENT TAX CREDIT PROGRAM 12 Sec. 114. NEW SECTION . 15.520 Short title. 13 This part shall be known and may be cited as the Research 14 and Development Tax Credit Program . 15 Sec. 115. NEW SECTION . 15.521 Definitions. 16 As used in this part, unless the context otherwise requires: 17 1. Eligible expenditures means qualified research expenses 18 under section 41 of the Internal Revenue Code, to the extent 19 the expenditures occurred in this state. 20 2. Qualified business means a business certified by the 21 authority as eligible to claim the research and development tax 22 credit. 23 3. Qualified research and development means a systematic 24 activity that combines basic and applied research in an attempt 25 to discover solutions to new or existing problems, or to 26 create or update goods and services. Qualified research and 27 development includes a set of innovative activities undertaken 28 by an eligible business in developing new services or products, 29 and in improving existing ones. 30 Sec. 116. NEW SECTION . 15.522 Eligible businesses and 31 sectors. 32 1. The tax credit available pursuant to this part shall be 33 available only to a business primarily engaged in any of the 34 following: 35 -50- LSB 1186XD (12) 91 nls/ko 50/ 74 |
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| 102 | 102 | | |
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| 103 | 103 | | S.F. _____ H.F. _____ a. Advanced manufacturing. 1 b. Bioscience. 2 c. Insurance and finance. 3 d. Technology and innovation. 4 2. For a business described in subsection 1, the sectors 5 available for the credit may include the following: 6 a. Second-generation food innovation. 7 b. Food ingredients and supplements. 8 c. Crop protection. 9 d. Hybrid seed technologies. 10 e. Diagnostic analytics and immunotherapies. 11 f. Chip technologies and microelectronics. 12 g. Medical equipment and supplies. 13 h. Software and technology. 14 i. Aerospace. 15 j. Pharmaceuticals. 16 k. Consumer products. 17 l. Any additional sectors included by the authority by rule. 18 Sec. 117. NEW SECTION . 15.523 Application, certification, 19 and agreement. 20 1. A business shall submit a preapplication to the authority 21 to determine whether the business is primarily engaged 22 in an eligible sector identified in section 15.522 and is 23 actively engaged in qualified research and development. The 24 determination made by the authority shall be based on factors 25 including but not limited to the North American industry 26 classification code and sources of revenue. The authority may 27 request any additional documentation or conduct site visits 28 to verify the requirements of the program are met upon the 29 submission of the preapplication. 30 2. The authority must certify a business as a qualified 31 business for the business to claim a research and development 32 tax credit. A qualified business may remain certified for up 33 to five years. A business may reapply for certification in 34 additional five-year increments. 35 -51- LSB 1186XD (12) 91 nls/ko 51/ 74 |
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| 104 | 104 | | |
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| 105 | 105 | | S.F. _____ H.F. _____ 3. An eligible business must enter into an agreement with 1 the authority for successful completion of all requirements of 2 the program. 3 4. Each year after certification as a qualified business, 4 the qualified business shall submit an application to the 5 authority for a tax credit based on the amount of eligible 6 expenditures that were made during the previous tax year. 7 Eligible expenditures must be reviewed by agreed upon 8 procedures prescribed by the authority by rule. The qualified 9 business shall engage an independent certified public 10 accountant authorized to practice in this state to conduct 11 the review. A business shall submit the application to the 12 authority by January 31 of each year the business is determined 13 to be a qualified business for research and development 14 conducted in the state in the most recently ended tax year of 15 the business. 16 Sec. 118. NEW SECTION . 15.524 Research and development tax 17 credit. 18 1. For tax years beginning on or after January 1, 2026, a 19 research and development tax credit is available to a qualified 20 business that is approved for the tax credit by the authority. 21 2. Upon review of the application pursuant to section 22 15.523, subsection 4, and approval by the authority to 23 receive the tax credit, the authority shall issue a tax credit 24 certificate to a qualified business indicating the amount 25 available to be claimed. The authority may approve a tax 26 credit in an amount up to three and one-half percent of the 27 amount of the qualified businesss eligible expenditures. The 28 tax credit shall be claimed for the tax year during which the 29 eligible expenditures were incurred. 30 3. To claim a tax credit under this section, a taxpayer 31 shall include one or more tax credit certificates with the 32 taxpayers tax return. The tax credit certificate must contain 33 the taxpayers name, address, tax identification number, the 34 amount of the credit, the name of the qualified business, and 35 -52- LSB 1186XD (12) 91 nls/ko 52/ 74 |
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| 106 | 106 | | |
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| 107 | 107 | | S.F. _____ H.F. _____ any other information required by the department of revenue. 1 The tax credit certificate, unless rescinded by the authority, 2 shall be accepted by the department of revenue as payment for 3 taxes imposed pursuant to chapter 422, subchapters II and 4 III, subject to any conditions or restrictions placed by the 5 authority upon the face of the tax credit certificate and 6 subject to the limitations of the program. 7 4. Any tax credit in excess of the businesss tax liability 8 is refundable. In lieu of claiming a refund, the taxpayer 9 may elect to have the overpayment shown on the taxpayers 10 final, completed return credited to the tax liability for the 11 following tax year. 12 5. Tax credit certificates issued pursuant to this section 13 are not transferable. 14 6. If the business is a partnership, S corporation, limited 15 liability company, estate, or trust electing to have the income 16 taxed directly to the individual, an individual may claim the 17 tax credit allowed. The amount claimed by the individual shall 18 be based upon the pro rata share of the individuals earnings 19 of the partnership, S corporation, limited liability company, 20 or estate or trust. 21 7. The maximum amount of tax credits the authority may issue 22 under this section each fiscal year shall not exceed the amount 23 specified in section 15.119. 24 8. If requests for tax credits exceed the amount available 25 pursuant to section 15.119, the authority shall award tax 26 credits based upon factors including but not limited to the 27 total amount of tax credits requested, the percentage of the 28 research and development of the business that occurs in this 29 state compared to research and development conducted in other 30 states and countries, and the economic impact of the research 31 and development conducted in this state. 32 Sec. 119. NEW SECTION . 15.525 Reporting requirements. 33 1. A qualified business shall report annually to the 34 authority all of the following: 35 -53- LSB 1186XD (12) 91 nls/ko 53/ 74 |
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| 108 | 108 | | |
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| 109 | 109 | | S.F. _____ H.F. _____ a. The total amount of investment made in research and 1 development. 2 b. The location in this state where the research and 3 development occurred. 4 c. The number of jobs created, wages paid, and employee 5 residence locations. 6 2. The authority shall include as part of the annual report 7 under section 15.107B an annual report of the activities 8 conducted pursuant to this part. 9 3. The authority shall report all information in an 10 aggregate form to prevent, as much as possible, information 11 being attributable to any particular qualified business. 12 Sec. 120. NEW SECTION . 15.526 Confidentiality. 13 1. Except as provided in subsection 2, all information or 14 records in the possession of the authority with respect to this 15 part shall be presumed by the authority to be a trade secret 16 protected under chapter 550 or common law, and shall be kept 17 confidential by the authority unless otherwise ordered by the 18 court. 19 2. The identity of a tax credit recipient and the amount 20 of the tax credit shall be considered public information under 21 chapter 22. 22 Sec. 121. NEW SECTION . 422.12Q Research and development 23 tax credit. 24 The taxes imposed under this subchapter, less the credits 25 allowed under section 422.12, shall be reduced by a research 26 and development tax credit allowed pursuant to section 15.524. 27 Sec. 122. Section 422.33, Code 2025, is amended by adding 28 the following new subsection: 29 NEW SUBSECTION . 17. The taxes imposed under this subchapter 30 shall be reduced by the research and development tax credit 31 allowed pursuant to section 15.524. 32 Sec. 123. CODE EDITOR DIRECTIVE. The Code editor shall 33 designate sections 15.520 through 15.526, as enacted in this 34 division of this Act, as part 35 of subchapter II. 35 -54- LSB 1186XD (12) 91 nls/ko 54/ 74 |
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| 110 | 110 | | |
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| 111 | 111 | | S.F. _____ H.F. _____ Sec. 124. EFFECTIVE DATE. This division of this Act, being 1 deemed of immediate importance, takes effect upon enactment. 2 DIVISION XVI 3 SUSTAINABLE AVIATION FUEL PRODUCTION TAX CREDIT 4 Sec. 125. NEW SECTION . 15.530 Short title. 5 This part shall be known and may be cited as the Sustainable 6 Aviation Fuel Production Tax Credit Program . 7 Sec. 126. NEW SECTION . 15.531 Definitions. 8 As used in this part, unless the context otherwise requires: 9 1. Aviation gasoline means the same as defined in section 10 452A.2. 11 2. Eligible taxpayer means a business engaged in 12 manufacturing sustainable aviation fuel from feedstock. 13 3. Feedstock means any organic matter processed or refined 14 in the state suitable for sustainable aviation fuel production 15 without further enhancement. Feedstock includes ethanol, corn 16 oil, soybean oil, animal fats used in cooking oil, and algae 17 oil. 18 4. Jet fuel means blends of hydrocarbons derived from 19 crude petroleum, natural gasoline, and synthetic hydrocarbons, 20 intended for use in aviation turbine engines, and that meet 21 the specifications in ASTM (American society for testing and 22 materials) specification D1655-12. 23 5. Sustainable aviation fuel means a liquid fuel derived 24 from feedstock not including palm fatty acid distillates and 25 that achieves at least a fifty percent life cycle greenhouse 26 gas emissions reduction in comparison with petroleum-based 27 aviation gasoline, aviation turbine fuel, and jet fuel as 28 determined by a test that shows any of the following: 29 a. The fuel production pathway achieves at least a fifty 30 percent life cycle greenhouse gas emissions reduction in 31 comparison with petroleum-based aviation gasoline, aviation 32 turbine fuel, and jet fuel utilizing the most recent version 33 of the GREET (Argonne national laboratorys greenhouse gases, 34 regulated emissions, and energy use in technologies) model that 35 -55- LSB 1186XD (12) 91 nls/ko 55/ 74 |
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| 112 | 112 | | |
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| 113 | 113 | | S.F. _____ H.F. _____ accounts for reduced emissions throughout the fuel production 1 process. 2 b. The fuel production pathway achieves at least a fifty 3 percent reduction of the aggregate attributional core life 4 cycle emissions and the positive induced land use change values 5 under the CORSIA (carbon offsetting and reduction scheme for 6 international aviation) life cycle methodology for sustainable 7 aviation fuels adopted by the international civil aviation 8 organization with the agreement of the United States. 9 Sec. 127. NEW SECTION . 15.532 Eligible business application 10 and agreement. 11 1. a. An eligible business that produces a sustainable 12 aviation fuel in this state from feedstock during a calendar 13 year may apply to the authority for the sustainable aviation 14 fuel tax credit provided in section 15.533. 15 b. The application must be made to the authority in the 16 manner prescribed by the authority. 17 c. The application must be made during the calendar year 18 following the calendar year in which the sustainable aviation 19 fuel is produced. 20 d. The authority may accept applications on a continuous 21 basis or may establish, by rule, an annual application 22 deadline. 23 e. The application must include all of the following 24 information: 25 (1) The amount of sustainable aviation fuel produced in 26 the state from feedstock by the eligible business during the 27 calendar year, measured in gallons. 28 (2) The types and sources of feedstock used to produce 29 sustainable aviation fuel, documented in sufficient detail to 30 allow the authority to verify that such feedstock was processed 31 or refined in the state. 32 (3) Any other information reasonably required by the 33 authority in order to establish and verify eligibility under 34 the program. 35 -56- LSB 1186XD (12) 91 nls/ko 56/ 74 |
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| 114 | 114 | | |
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| 115 | 115 | | S.F. _____ H.F. _____ f. The authority shall review and score all complete 1 applications submitted by eligible businesses on a competitive 2 basis pursuant to rules adopted by the authority. 3 2. a. Before being issued a tax credit under section 4 15.533, an eligible business must enter into an agreement with 5 the authority for the successful completion of all requirements 6 of the program. As part of the agreement, the eligible 7 business shall agree to collect and provide any information 8 reasonably required by the authority in order to allow the 9 board to fulfill its reporting obligation under section 15.534. 10 b. An eligible business shall fulfill all the requirements 11 of the program and the agreement before the authority issues 12 the business a tax credit certificate or enters into a 13 subsequent agreement with the business under this section. The 14 authority may decline to enter into a subsequent agreement with 15 the business under this section if a prior agreement is not 16 successfully fulfilled. 17 c. Upon establishing that all requirements of the program 18 and the agreement have been fulfilled, the authority shall 19 issue a tax credit certificate to the eligible business stating 20 the amount of sustainable fuel tax credit the eligible business 21 may claim. 22 3. The failure in fulfilling any requirement of the program 23 by the eligible business or any of the terms and obligations of 24 an agreement entered into pursuant to this section may result 25 in the rescission of the tax credits issued under section 26 15.533, and in addition to any other penalties provided by law, 27 may subject the tax credits to repayment of all or a portion 28 of tax credit issued by the authority, and may subject the tax 29 credits to recapture by the authority or the department of 30 revenue. 31 4. a. Except as provided in paragraph b , any information 32 or record in the possession of the authority with respect to 33 the program shall be presumed by the authority to be a trade 34 secret protected under chapter 550 or common law and shall be 35 -57- LSB 1186XD (12) 91 nls/ko 57/ 74 |
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| 116 | 116 | | |
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| 117 | 117 | | S.F. _____ H.F. _____ kept confidential by the authority unless otherwise ordered by 1 a court. 2 b. The identity of a tax credit recipient and the amount 3 of the tax credit shall be considered public information under 4 chapter 22. 5 Sec. 128. NEW SECTION . 15.533 Sustainable aviation fuel 6 tax credit. 7 1. An eligible business that has entered into an agreement 8 pursuant to section 15.532 may claim a tax credit in an amount 9 equal to the product of twenty-five cents multiplied by the 10 number of gallons of sustainable aviation fuel produced in 11 this state from feedstock. The sustainable aviation fuel tax 12 credit shall not be available for any sustainable aviation 13 fuel produced before the 2026 calendar year or after the 2035 14 calendar year. 15 2. The tax credit shall be allowed against taxes imposed 16 under chapter 422, subchapter II or III. 17 3. The tax credit shall be claimed for the tax year during 18 which the eligible business was issued the tax credit. 19 4. An individual may claim a tax credit under this section 20 of a partnership, limited liability company, S corporation, 21 cooperative organized under chapter 501 and filing as a 22 partnership for federal tax purposes, estate, or trust electing 23 to have income taxed directly to the individual. The amount 24 claimed by the individual shall be based upon the pro rata 25 share of the individuals earnings from the partnership, 26 limited liability company, S corporation, cooperative, estate, 27 or trust. 28 5. Any tax credit in excess of the tax liability is 29 refundable. In lieu of claiming a refund, the taxpayer 30 may elect to have the overpayment shown on the taxpayers 31 final, completed return credited to the tax liability for the 32 following tax year. 33 6. a. To claim a tax credit under this section, a taxpayer 34 shall include one or more tax credit certificates with the 35 -58- LSB 1186XD (12) 91 nls/ko 58/ 74 |
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| 118 | 118 | | |
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| 119 | 119 | | S.F. _____ H.F. _____ taxpayers tax return. 1 b. The tax credit certificate shall contain the taxpayers 2 name, address, tax identification number, the amount of the 3 credit, the name of the eligible business, and any other 4 information required by the department of revenue. 5 c. The tax credit certificate, unless rescinded by the 6 authority, shall be accepted by the department of revenue as 7 payment for taxes imposed pursuant to chapter 422, subchapters 8 II and III, subject to any conditions or restrictions placed by 9 the authority upon the face of the tax credit certificate and 10 subject to the limitations of the program. 11 d. Tax credit certificates issued pursuant to this section 12 are not transferable. 13 7. a. The maximum amount of tax credits the authority may 14 issue each fiscal year pursuant to this section shall be as 15 provided in section 15.119. 16 b. (1) The maximum amount of tax credits that the authority 17 may issue to an eligible business for the production of 18 sustainable aviation fuel in a calendar year shall not exceed 19 one million dollars. 20 (2) The authority shall not issue more than five tax credit 21 certificates to an eligible business for the production of 22 aviation fuel under the program. 23 Sec. 129. NEW SECTION . 15.534 Reports to general assembly. 24 1. For purposes of this section, successful tax credit 25 applicant includes, with respect to each calendar year, an 26 eligible business that was issued a tax credit certificate for 27 production of sustainable aviation fuel during that calendar 28 year. 29 2. The annual report under section 15.107B shall include 30 a report describing the activities of the program for the 31 previous calendar year. The report shall, at a minimum, 32 include all of the following information: 33 a. The aggregate number of gallons of sustainable aviation 34 fuel produced for which successful tax credit applicants 35 -59- LSB 1186XD (12) 91 nls/ko 59/ 74 |
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| 120 | 120 | | |
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| 121 | 121 | | S.F. _____ H.F. _____ received a tax credit in the previous calendar year. 1 b. For each eligible business issued a sustainable aviation 2 fuel tax credit during each calendar year: 3 (1) The identity of the eligible business. 4 (2) The amount of the tax credit. 5 c. The total amount of all sustainable aviation fuel tax 6 credits claimed during each calendar year, and the portion of 7 the claims issued as a refund. 8 3. To protect the presumption of confidentiality 9 established, the board shall report all information in an 10 aggregate form to prevent, as much as possible, information 11 being attributable to any particular eligible business, except 12 as provided in subsection 2, paragraph e . 13 Sec. 130. NEW SECTION . 15.535 Future repeal. 14 Sections 15.530, 15.531, 15.532, 15.533, 15.534, and this 15 section are repealed January 1, 2037. 16 Sec. 131. NEW SECTION . 422.10C Sustainable aviation fuel 17 tax credit. 18 The taxes imposed under this subchapter, less the credits 19 allowed under section 422.12, shall be reduced by a sustainable 20 aviation fuel tax credit allowed under section 15.533. This 21 section is repealed January 1, 2037. 22 Sec. 132. Section 422.33, Code 2025, is amended by adding 23 the following new subsection: 24 NEW SUBSECTION . 23. The taxes imposed under this subchapter 25 shall be reduced by a sustainable aviation fuel tax credit 26 allowed under section 15.533. This subsection is repealed 27 January 1, 2037. 28 Sec. 133. TAX CREDIT CLAIMS. Sustainable aviation fuel tax 29 credits issued pursuant to the sustainable aviation tax credit 30 program enacted in this division of this Act shall not be 31 issued by the economic development authority prior to July 1, 32 2026, and shall not be claimed by a taxpayer prior to September 33 1, 2026. 34 Sec. 134. CODE EDITOR DIRECTIVE. The Code editor shall 35 -60- LSB 1186XD (12) 91 nls/ko 60/ 74 |
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| 122 | 122 | | |
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| 123 | 123 | | S.F. _____ H.F. _____ designate sections 15.530 through 15.535, as enacted in this 1 division of this Act, as part 36 of subchapter II. 2 Sec. 135. EFFECTIVE DATE. This division of this Act, being 3 deemed of immediate importance, takes effect upon enactment. 4 Sec. 136. RETROACTIVE APPLICABILITY. This division of this 5 Act applies retroactively to January 1, 2025, for tax years 6 beginning on or after that date. 7 DIVISION XVII 8 MAJOR ECONOMIC GROWTH ATTRACTION PROGRAM 9 Sec. 137. Section 15.494, subsection 1, paragraph b, Code 10 2025, is amended to read as follows: 11 b. If the eligible business fails to comply with any 12 requirements of the program or the agreement as determined 13 by the authority , the eligible business may be required to 14 repay any tax incentives the authority issued to the eligible 15 business. A The authority shall notify the department of 16 revenue of any required repayment of a tax incentive shall . 17 Any repayment shall be considered a tax payment due and payable 18 to the department of revenue by any taxpayer that claimed the 19 tax incentive, and the failure to make the repayment may be 20 treated by the department of revenue in the same manner as a 21 failure to pay the tax shown due, or required to be shown due, 22 with the filing of a return or deposit form. In addition, 23 the county shall have the authority to take action to recover 24 the value of property taxes not collected as a result of the 25 exemption provided to the business under this part. 26 Sec. 138. Section 15.495, subsection 2, Code 2025, is 27 amended to read as follows: 28 2. To receive the sales and use tax refund, the eligible 29 business shall file a claim with the department of revenue as 30 follows: 31 a. The contractor or subcontractor shall state under oath, 32 on forms provided by the department of revenue, the amount of 33 the sales of tangible personal property or services rendered, 34 furnished, or performed including water, sewer, gas, and 35 -61- LSB 1186XD (12) 91 nls/ko 61/ 74 |
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| 124 | 124 | | |
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| 125 | 125 | | S.F. _____ H.F. _____ electric utility services upon which sales or use tax has 1 been paid prior to contract completion during the period for 2 which the refund is claimed , and shall submit the forms to the 3 eligible business before contract completion. 4 b. The eligible business shall inform the department of 5 revenue in writing of contract completion. The eligible 6 business shall, after contract completion no more frequently 7 than quarterly , submit an application to the department 8 of revenue for a refund of the amount of the sales and use 9 taxes paid pursuant to chapter 423 upon any tangible personal 10 property, or services rendered, furnished, or performed, 11 including water, sewer, gas, and electric utility services. 12 The application shall be submitted in the form and manner 13 prescribed by the department of revenue. The department of 14 revenue shall audit the application and, if approved, issue 15 a warrant or warrants to the eligible business in the amount 16 of the sales or use tax which has been paid to the state of 17 Iowa under subsection 1 . The eligible businesss application 18 must be submitted to the department of revenue within one year 19 after the project completion date. An application filed by the 20 eligible business in accordance with this section shall not be 21 denied by reason of a limitation set forth in chapter 421 or 22 423 . 23 c. The refund shall be remitted by the department of revenue 24 to the eligible business equally over five tax years on a 25 quarterly basis . Interest shall not accrue on any part of the 26 refund that has not yet been remitted by the department of 27 revenue to the eligible business. 28 EXPLANATION 29 The inclusion of this explanation does not constitute agreement with 30 the explanations substance by the members of the general assembly. 31 This bill relates to matters under the purview of the 32 Iowa economic development authority (authority), including 33 tax credit limits, targeted jobs tax credits, and the 34 major economic growth attraction program; creation of the 35 -62- LSB 1186XD (12) 91 nls/ko 62/ 74 |
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| 126 | 126 | | |
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| 127 | 127 | | S.F. _____ H.F. _____ business incentives for growth program, the seed investor tax 1 credit program, the Iowa film production incentive program, 2 the research and development tax credit program, and the 3 sustainable aviation fuel production tax credit program; 4 elimination of the high quality jobs program, the investments 5 in qualifying businesses tax credit, employer child care tax 6 credits, assistive device tax credits, endow Iowa tax credits, 7 and research activities tax credits; and makes conforming 8 changes. 9 DIVISION I ECONOMIC DEVELOPMENT PROGRAMS TAX CREDIT 10 LIMITS. Under the bill, the authority shall not authorize 11 for any one fiscal year an aggregate amount of tax credits 12 for business development programs in excess of $110 million 13 for allocation among the business programs as follows: (1) 14 for tax credits for investments in an innovation fund and the 15 seed investor tax credit the authority shall allocate a total 16 of $10 million; (2) for the renewable chemical production tax 17 credit and the sustainable aviation fuel production tax credit 18 the authority shall allocate a total of $10 million; (3) for 19 the research and development tax credit the authority shall 20 allocate $40 million; and (4) for the business incentives for 21 growth program for the fiscal year beginning July 1, 2026, 22 and for each fiscal year thereafter, the authority shall not 23 allocate more than $50 million. 24 DIVISION II ECONOMIC DEVELOPMENT PROGRAMS TAX CREDIT 25 LIMITS CONFORMING CHANGES. The bill makes conforming 26 changes to Code sections 15.293A(6), 15.293B(6), 15.318(3)(e), 27 15.354(4), and 15.354(6)(d). 28 DIVISION III BUSINESS INCENTIVES FOR GROWTH PROGRAM. The 29 bill creates a business incentives for growth program (BIG 30 program), effective January 1, 2026, to provide tax incentives 31 to eligible businesses. The qualifications for an eligible 32 business are provided in the bill. Applications for the BIG 33 program shall be submitted to the authority. For a proposed 34 project that will result in elevated water consumption by 35 -63- LSB 1186XD (12) 91 nls/ko 63/ 74 |
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| 128 | 128 | | |
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| 129 | 129 | | S.F. _____ H.F. _____ the business, the application must be accompanied by a water 1 conservation and waste reduction plan. 2 The terms of, and aggregate value of, a tax incentive may be 3 negotiated between an eligible business and the authority, but 4 the aggregate value of the tax incentives that any one eligible 5 business may receive shall not exceed 5 percent of the eligible 6 businesss qualifying investment. The board may authorize 7 any combination of tax incentives available for an eligible 8 business. 9 An eligible business that is approved by the authority to 10 participate in the BIG program shall enter into an agreement 11 with the authority specifying the criteria for successful 12 completion of the program requirements. The requirements for 13 the program agreement are detailed in the bill. 14 An eligible business issued a tax incentive under the BIG 15 program shall be entitled to a refund of certain sales and use 16 taxes, after filing a claim with the department of revenue 17 as detailed in the bill. A contractor or subcontractor that 18 willfully makes a false report of taxes paid is guilty of an 19 aggravated misdemeanor, and shall be liable for payment of the 20 tax and any applicable penalty and interest. 21 An eligible business may not receive a tax credit 22 certificate until the eligible businesss project, or a portion 23 of the project, has been placed in service. The department of 24 revenue shall remit the tax credit to the eligible business 25 over five tax years. If within five years of the date the 26 authority issues an eligible business a tax credit, the 27 eligible business sells, disposes of, razes, or otherwise 28 renders unusable all or a part of the land, buildings, or 29 other structures for which the tax credit was claimed, the 30 tax liability of the eligible business for that year shall be 31 increased by the amounts detailed in the bill. 32 An eligible business may apply for and be eligible to receive 33 other tax incentives; however, the authority may prohibit an 34 eligible business that has been issued tax incentives under the 35 -64- LSB 1186XD (12) 91 nls/ko 64/ 74 |
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| 130 | 130 | | |
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| 131 | 131 | | S.F. _____ H.F. _____ BIG program from receiving any additional tax incentive, tax 1 credit, grant, loan, or other financial assistance under any 2 program administered by the authority. 3 A community in which an eligible businesss project 4 is located may grant the eligible business a property 5 tax exemption for a portion of the actual value added by 6 improvements to real property through the project for a period 7 not to exceed 10 years beginning the year that the improvements 8 to real property are first assessed for taxation. 9 The bill authorizes the establishment of one or more funds 10 within the state treasury, under the control of the authority, 11 to be used for assistance for certain programs and projects as 12 detailed in the bill. 13 This division of the bill takes effect upon enactment. 14 DIVISION IV ELIMINATION OF THE HIGH QUALITY JOBS PROGRAM. 15 The bill repeals the high quality jobs program on June 30, 16 2026, and provides for fulfillment of agreements entered into 17 under the program on or before December 1, 2025. 18 The sections of the bill creating the business incentives 19 for growth program take effect on December 31, 2025. 20 DIVISION V HIGH QUALITY JOBS PROGRAM CONFORMING 21 CHANGES. The bill makes conforming changes to Code sections 22 2.48(3)(a)(1), 2.48(3)(a)(2), 8G.3(8), 15.106B(5)(b), 23 15.293B(3), 15.317(5), 15.318(2)(b), 15.318(4), 24 15.354(1)(b)(2), 15.354(1)(c), 15.354(3)(b), 15.354(5), 25 15.499(1), 15E.351(1), 15E.362(1)(c), 15H.5, 159A.6B(2), 26 266.19, 422.10(5), 422.11F(2), 422.33(5)(h), 422.33(12)(b), 27 422.33(19), 422.60(5)(b), 422.60(8), 427B.17(8)(b), 432.12C(2), 28 455B.104(2), and 533.329(2)(c) and (d). 29 The bill repeals Code sections 15E.231, 15E.232, 15E.233, 30 422.11U, and 432.12H. 31 This division of the bill takes effect December 31, 2025. 32 DIVISION VI SEED INVESTOR TAX CREDIT PROGRAM. The bill 33 creates the seed investor tax credit program (seed program) for 34 the purpose of stimulating job growth, creating wealth, and 35 -65- LSB 1186XD (12) 91 nls/ko 65/ 74 |
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| 132 | 132 | | |
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| 133 | 133 | | S.F. _____ H.F. _____ accelerating the creation of new ventures. 1 The bill allows a tax credit for a portion of a taxpayers 2 equity investment in a qualifying business as provided in the 3 bill. The amount of the tax credit shall equal 20 percent of 4 the taxpayers equity investment if the qualifying business 5 is located in an urban area, or 35 percent if the qualifying 6 business is located in a rural area. The maximum amount of a 7 tax credit that may be issued per calendar year to a person 8 and the persons spouse or dependent shall not exceed $100,000 9 combined. The maximum amount of a tax credit that may be 10 issued per calendar year for equity investments in any one 11 qualifying business shall not exceed $500,000. The department 12 of revenue shall adopt rules for the administration of the seed 13 program. 14 For an equity investment to qualify for a tax credit, the 15 business in which the investment is made must be a qualified 16 business as described in the bill. 17 All information or records in the possession of the 18 authority with respect to the seed program shall be a trade 19 secret and kept confidential by the authority unless otherwise 20 ordered by a court, or unless considered public information. 21 The authority shall submit the annual report to the governor 22 and the general assembly on the activities conducted pursuant 23 to the seed program including a listing of eligible qualifying 24 businesses and the number of tax credit certificates and the 25 amount of tax credits issued by the authority. 26 The bill requires that, as part of the innovation fund 27 investment tax credit program, an innovation fund submit an 28 application for certification to the board. The board shall 29 approve the application and certify the innovation fund if, in 30 addition to the criteria under current law, the fund proposes 31 to obtain at least $3 million in binding investment commitments 32 and to invest a minimum of $3 million in companies that have a 33 principal place of business in the state. 34 DIVISION VII ELIMINATION OF INVESTMENTS IN QUALIFYING 35 -66- LSB 1186XD (12) 91 nls/ko 66/ 74 |
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| 134 | 134 | | |
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| 135 | 135 | | S.F. _____ H.F. _____ BUSINESS TAX CREDIT PROGRAM. The bill repeals the investments 1 in qualifying businesses tax credit program on June 30, 2026, 2 and provides for the validity of tax credits issued under the 3 program before June 30, 2025. 4 DIVISION VIII INVESTMENTS IN QUALIFYING BUSINESS 5 TAX CREDIT PROGRAM CONFORMING CHANGES. The bill makes 6 conforming changes to Code sections 2.48(3)(d)(1), 15E.52(4), 7 422.11F(1), 422.33(12)(a), 422.60(5)(a), 432.12C(1), and 8 533.329(2). 9 DIVISION IX IOWA FILM PRODUCTION INCENTIVE PROGRAM AND 10 FUND. The bill establishes the Iowa film production incentive 11 program and fund within the authority. 12 The bill requires the authority to administer the Iowa 13 film production incentive program (film program) for the 14 purpose of providing rebates to qualified production facilities 15 for qualified expenditures incurred to produce a qualified 16 production. Qualified production and qualified production 17 facility are defined in the bill. 18 The bill requires the authority to establish eligibility 19 criteria by rule. 20 The criteria for qualified production facilities must 21 require that a facility have a soundstage with dimensions 22 covering at least 12,500 square feet, a permanent grid system 23 or an alternative rigging support structure rated for overhead 24 suspension, production and postproduction sound rooms, 25 sufficient electric service that does not require use of an 26 electric generator, and an agreement between the authority and 27 the facility that the phrase filmed in Iowa appears at the 28 beginning of any credits. 29 The criteria for a qualified production must include a 30 fully funded production budget of at least $1 million, and the 31 qualified production must be made available to the public for 32 purchase. 33 The criteria for qualified expenditures must include 34 expenses for industry standard activities for cast members, 35 -67- LSB 1186XD (12) 91 nls/ko 67/ 74 |
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| 136 | 136 | | |
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| 137 | 137 | | S.F. _____ H.F. _____ equipment, studio production facilities, hospitality services, 1 certified public accountant services, per diem payments, 2 payments to businesses located in this state, accommodations, 3 and any other expenses allowed by the authority. Qualified 4 expenditures do not include expenses for entertainment, 5 studio executive airfare, royalties, and publicity for the 6 qualified production. The criteria for qualified expenditures 7 must include a written acknowledgment by the facility that 8 no qualified expenses were incurred prior to approval of the 9 application by the authority. 10 Prior to disbursement of the rebate, the facility must 11 comply with additional requirements as detailed in the bill. 12 The bill provides that the rebate amount shall equal 30 13 percent of the gross amount of qualified expenditures incurred 14 to produce a qualified production excluding any sales, use, and 15 hotel and motel taxes paid. 16 The bill creates an Iowa film production incentive fund in 17 the state treasury under the control of the authority. 18 The cumulative value of rebates claimed pursuant to the bill 19 shall not exceed $10 million per fiscal year. 20 The bill applies to qualified expenditures incurred between 21 July 1, 2025 and July 1, 2027. The program is repealed on July 22 1, 2027. 23 DIVISION X TARGETED JOBS WITHHOLDING CREDIT MODIFICATIONS 24 AND REPEAL. The targeted jobs withholding credit is provided 25 to certain employers in pilot project cities equal to 3 percent 26 of the gross wages paid by the employer to each employee 27 pursuant to a withholding agreement entered into on or prior 28 to June 30, 2027. 29 For withholding agreements entered into on or after 30 the effective date of this division, the bill reduces the 31 withholding credit provided to an employer from 3 percent of 32 gross wages paid to employees to 1.5 percent of gross wages 33 paid to employees. 34 An employer entering into a withholding agreement prior to, 35 -68- LSB 1186XD (12) 91 nls/ko 68/ 74 |
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| 138 | 138 | | |
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| 139 | 139 | | S.F. _____ H.F. _____ on, or after the effective date of the division, shall not 1 receive the targeted jobs withholding credit for wages paid to 2 employees after June 30, 2027, coinciding with the date new 3 withholding agreements are no longer permitted pursuant to Code 4 section 403.19A(3)(c)(2). 5 The bill repeals the targeted jobs withholding credit from 6 the Code on January 1, 2038, due to the employers ability to 7 carry forward the credit for up to 10 years. 8 The division takes effect upon enactment. 9 DIVISION XI EMPLOYER CHILD CARE TAX CREDIT REPEAL. The 10 bill repeals the employer child care tax credit commencing 11 with tax years beginning on or after January 1, 2026. The 12 credit is equal to the employer-provided child care tax credit 13 provided in section 45F of the Internal Revenue Code, and is 14 available against the individual and corporate income taxes, 15 the franchise tax, the insurance premiums tax, and the moneys 16 and credits tax. 17 The bill repeals the tax credit from the Code on January 1, 18 2031, due to the taxpayers ability to carry forward the credit 19 for up to five years. 20 DIVISION XII ASSISTIVE DEVICE TAX CREDIT REPEAL. The bill 21 repeals the assistive device refundable tax credit available 22 against the corporate income tax commencing with tax years 23 beginning on or after January 1, 2025. The tax credit was 24 equal to 50 percent of the first $5,000 used to purchase an 25 assistive device. 26 The bill repeals the tax credit from the Code on January 27 1, 2027, due to the ability of the taxpayer to credit any 28 overpayment in tax liability in the following tax year. 29 DIVISION XIII ENDOW IOWA TAX CREDIT REPEAL. The bill 30 repeals the endow Iowa tax credit commencing with tax years 31 beginning on or after January 1, 2026, but the bill repeals the 32 program beginning July 1, 2025. The tax credit is equal to 33 25 percent of the taxpayers endowment gift to an endow Iowa 34 qualified community foundation. However, the bill specifies 35 -69- LSB 1186XD (12) 91 nls/ko 69/ 74 |
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| 140 | 140 | | |
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| 141 | 141 | | S.F. _____ H.F. _____ the tax credit shall only be allowed for endowment gifts made 1 prior to July 1, 2025. The tax credit is available against the 2 individual and corporate income taxes, the franchise tax, the 3 insurance premiums tax, and the moneys and credits tax. The 4 tax credit is currently capped at $6 million annually. 5 The bill repeals the tax credit from the Code on January 1, 6 2031, due to the taxpayers ability to carry forward the credit 7 for up to five years. 8 DIVISION XIV RESEARCH ACTIVITIES TAX CREDIT REPEAL. The 9 bill repeals the research activities tax credit commencing with 10 tax years beginning on or after January 1, 2026. The bill 11 creates a new research and development tax credit in another 12 division of the bill. The research activities tax credit is 13 a refundable tax credit for qualifying taxpayers conducting 14 research for manufacturing, life sciences, agriscience, 15 software engineering, or aviation and aerospace industry. The 16 tax credit is available against the individual and corporate 17 income taxes. 18 The bill repeals the tax credit from the Code on January 19 1, 2027, due to the ability of the taxpayer to credit any 20 overpayment in tax liability in the following tax year. 21 DIVISION XV RESEARCH AND DEVELOPMENT TAX CREDIT PROGRAM. 22 The bill creates a research and development tax credit program 23 to be administered by the authority. The bill provides a tax 24 credit to eligible businesses that incur qualified research 25 expenses as defined under section 41 of the Internal Revenue 26 Code to the extent such expenses were incurred in the state. 27 The tax credit is available against the individual and 28 corporate income taxes for tax years beginning on or after 29 January 1, 2026. 30 The bill makes the credit available to businesses primarily 31 engaged in advanced manufacturing, bioscience, insurance and 32 finance, and technology innovation. The bill further limits 33 the credit to the following sectors of those businesses: 34 second-generation food innovation, food ingredients and 35 -70- LSB 1186XD (12) 91 nls/ko 70/ 74 |
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| 142 | 142 | | |
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| 143 | 143 | | S.F. _____ H.F. _____ supplements, crop protection, hybrid seed technologies, 1 diagnostic analytics and immunotherapies, chip technologies 2 and microelectronics, medical equipment and supplies, software 3 technology, aerospace, pharmaceuticals, consumer products, and 4 any additional sectors included by the authority by rule. 5 A business is required to submit a preapplication for the 6 credit to the authority to determine whether the business is 7 primarily engaged in an eligible sector described in the bill 8 and is actively engaged in qualified research and development. 9 The determination by the authority shall be based on factors 10 including but not limited to the North American industry 11 classification code and sources of revenue, and may include 12 site visits by the authority. 13 A business must be certified by the authority to be eligible 14 for the credit. A business becomes a qualified business if it 15 has been certified by the authority, and a qualified business 16 may remain certified for up to five years. A qualified 17 business may reapply for certification in additional five-year 18 increments. 19 Each year after becoming a qualified business during the 20 five-year period, the bill requires the qualified business 21 to submit an application to the authority for the tax credit 22 based on the amount of eligible expenditures that were made 23 during the previous tax year. Eligible expenditures must be 24 reviewed by agreed upon procedures prescribed by the authority 25 by rule. The bill requires the eligible expenditures review 26 to be conducted by a certified public accountant authorized 27 to practice in this state. A business shall submit the 28 application to the authority by January 31 of each year the 29 business is certified to be a qualified business. 30 The authority may approve a tax credit in the form of a tax 31 credit certificate issued to the qualified business up to an 32 amount equal to 3.5 percent of the amount of the qualified 33 businesss eligible expenditures. The tax credit must be 34 claimed for the tax year during which the eligible expenditures 35 -71- LSB 1186XD (12) 91 nls/ko 71/ 74 |
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| 144 | 144 | | |
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| 145 | 145 | | S.F. _____ H.F. _____ were incurred. 1 Any tax credit in excess of the qualified businesss tax 2 liability is refundable. In lieu of claiming a refund, 3 the taxpayer may elect to have the overpayment shown on 4 the taxpayers final, completed return credited to the tax 5 liability for the following tax year. 6 The research and development tax credit certificates issued 7 pursuant to this division are not transferable. 8 The maximum amount of research and development tax credits 9 the authority may issue each fiscal year shall not exceed $40 10 million. 11 The bill requires a qualified business claiming the credit 12 to annually report to the authority the following: the total 13 amount of investment made in research and development; the 14 location in this state where the research and development 15 occurred; and the number of jobs created, wages paid, and 16 employee residence locations. 17 DIVISION XVI SUSTAINABLE AVIATION FUEL PRODUCTION TAX 18 CREDIT. The bill creates a sustainable aviation fuel tax 19 credit program. 20 The bill defines sustainable aviation fuel (SAF) to mean 21 a liquid fuel derived from feedstock not including palm fatty 22 acid distillates and that achieves at least a 50 percent life 23 cycle greenhouse gas emissions reduction in comparison with 24 petroleum-based aviation gasoline, aviation turbine fuel, and 25 jet fuel as determined by other tests further defined in the 26 bill. 27 The bill defines feedstock to mean any organic matter 28 processed or refined in the state suitable for sustainable 29 aviation fuel production without further enhancement. 30 Feedstock includes but is not limited to ethanol, corn oil, 31 soybean oil, animal fats used in cooking oil, and algae oil. 32 The bill defines eligible business to mean a business 33 engaged in the manufacturing of SAF from feedstock. 34 An eligible business that produces SAF in this state during 35 -72- LSB 1186XD (12) 91 nls/ko 72/ 74 |
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| 146 | 146 | | |
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| 147 | 147 | | S.F. _____ H.F. _____ a calendar year may apply to the authority for the tax credit 1 for the SAF produced during the 2026 calendar year through the 2 2035 calendar year. 3 The bill requires an eligible business that produces SAF to 4 apply to the authority for the credit in the manner prescribed 5 by the authority, and in the calendar year following the 6 calendar year in which the SAF is produced. The bill requires 7 the application to include the amount of SAF produced in the 8 state from feedstock by the eligible business during the 9 calendar year, measured in gallons, the types and sources of 10 feedstock used to produce sustainable aviation fuel, and any 11 other information required by the authority. Each application 12 shall be reviewed and scored on a competitive basis by the 13 authority pursuant to rules adopted by the authority. 14 Before being issued a tax credit, the bill requires an 15 eligible business to enter into an agreement with the authority 16 for the successful completion of all requirements of the 17 program. As part of the agreement, the eligible business 18 must agree to collect and provide any information reasonably 19 required by the authority in order to allow the economic 20 development authority board to fulfill its reporting obligation 21 under new Code section 15.514. 22 If all of the requirements of the program and the agreement 23 have been fulfilled, the bill requires the authority to issue a 24 tax credit certificate to the eligible business in an amount 25 equal to the product of 25 cents multiplied by the number of 26 gallons of SAF produced in this state. 27 The SAF tax credit is refundable. In lieu of claiming a 28 refund, the eligible business may elect to have the overpayment 29 shown on the taxpayers final, completed return credited to the 30 tax liability for the following tax year. 31 The SAF tax credit certificates issued pursuant to this 32 division are not transferable. 33 The maximum amount of SAF tax credits combined with the 34 chemical production tax credit shall not exceed $10 million 35 -73- LSB 1186XD (12) 91 nls/ko 73/ 74 |
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| 148 | 148 | | |
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| 149 | 149 | | S.F. _____ H.F. _____ in a fiscal year. The bill specifies the maximum amount of 1 tax credits issued to an eligible business shall not exceed $1 2 million in a calendar year. An eligible business also shall 3 not be issued more than five tax credit certificates under the 4 program. 5 The bill requires the economic development board and 6 the department of revenue to annually submit to the general 7 assembly and to the governor, or provide to the authority for 8 inclusion in the authoritys annual report under Code section 9 15.511, a report describing the activities of the program 10 for the most recent calendar year for which the tax credit 11 application period has ended. 12 The division takes effect upon enactment and applies 13 retroactively to tax years beginning on or after January 1, 14 2025. 15 The SAF production tax credit is repealed January 1, 2037. 16 DIVISION XVII MAJOR ECONOMIC GROWTH ATTRACTION PROGRAM. 17 The bill permits an eligible business that is entitled to a 18 sales and use tax refund pursuant to the major economic growth 19 attraction program to receive the sales and tax refund on a 20 quarterly basis rather than annually over a five-year period. 21 The bill also specifies that if an eligible business does not 22 comply with the requirements of the program, a county may take 23 action to recover the value of the property taxes not collected 24 as a result of the exemption provided to the eligible business. 25 -74- LSB 1186XD (12) 91 nls/ko 74/ 74 |
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