House File 656 - Introduced
HOUSE FILE
BY COMMITTEE ON WAYS AND
MEANS
(SUCCESSOR TO HF 555)
(SUCCESSOR TO HSB 98)
A BILL FOR
1 An Act relating to the administration of programs by the
2 economic development authority by creating a renewable
3 chemical production tax credit, modifying the tax credit for
4 investments in qualifying businesses and community=based
5 seed capital funds, modifying the entrepreneur investment
6 awards program, modifying the workforce housing tax
7 incentive program, making miscellaneous changes to other
8 economic development authority programs, and including
9 effective date and retroactive and other applicability
10 provisions.
11 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN
1 1 DIVISION I
1 2 RENEWABLE CHEMICAL PRODUCTION TAX CREDIT
1 3 Section 1. Section 15.119, subsection 2, Code 2015, is
1 4 amended by adding the following new paragraph:
1 5 NEW PARAGRAPH. h. The renewable chemical production tax
1 6 credit program administered pursuant to sections 15.315 through
1 7 15.320. In allocating tax credits pursuant to this subsection,
1 8 the authority shall not allocate more than fifteen million
1 9 dollars for purposes of this paragraph.
1 10 Sec. 2. NEW SECTION. 15.315 Short title.
1 11 This part shall be known and may be cited as the "Renewable
1 12 Chemical Production Tax Credit Program".
1 13 Sec. 3. NEW SECTION. 15.316 Definitions.
1 14 As used in this part, unless the context otherwise requires:
1 15 1. "Biobased content percentage" means, with respect to any
1 16 renewable chemical, the amount, expressed as a percentage, of
1 17 renewable organic material present as determined by testing
1 18 representative samples using the American society for testing
1 19 and materials standard D6866.
1 20 2. "Biomass feedstock" means sugar, polysaccharide,
1 21 glycerin, lignin, fat, grease, or oil derived from a plant or
1 22 animal, or a protein capable of being converted to a building
1 23 block chemical by means of a biological or chemical conversion
1 24 process.
1 25 3. "Building block chemical" means a molecule converted
1 26 from biomass feedstock as a first product or a secondarily
1 27 derived product that can be further refined into a higher=value
1 28 chemical, material, or consumer product. "Building block
1 29 chemical" includes but is not limited to glycerol, methanoic
1 30 or formic acid, arabonic acid, erythonic acid, glyceric acid,
1 31 glycolic acid, lactic acid, 3=hydroxypropionate, propionic
1 32 acid, malonic acid, serine, succinic acid, fumaric acid,
1 33 malic acid, aspartic acid, 3=hydroxybutyrolactone, acetoin,
1 34 threonine, itaconic acid, furfural, levulinic acid, glutamic
1 35 acid, xylonic acid, xylaric acid, xylitol, arabitol, citric
2 1 acid, aconitic acid, 5=hydroxymethylfurfural, lysine, gluconic
2 2 acid, glucaric acid, sorbitol, gallic acid, ferulic acid,
2 3 nonfuel butanol, nonfuel ethanol, a polymer or gum that can be
2 4 produced directly from a protein=based biomass feedstock, or
2 5 such additional molecules as may be included by the authority
2 6 by rule.
2 7 4. "Eligible business" means a business meeting the
2 8 requirements of section 15.317.
2 9 5. "Food additive" means a building block chemical that
2 10 is not primarily consumed as food but which, when combined
2 11 with other components, improves the taste, appearance, odor,
2 12 texture, or nutritional content of food. The authority, in its
2 13 discretion, shall determine whether or not a building block
2 14 chemical is primarily consumed as food.
2 15 6. "Program" means the renewable chemical production tax
2 16 credit program administered pursuant to this part.
2 17 7. "Renewable chemical" means a building block chemical
2 18 with a biobased content percentage of at least fifty percent.
2 19 "Renewable chemical" does not include a chemical sold or used
2 20 for the production of food, feed, or fuel. "Renewable chemical"
2 21 includes cellulosic ethanol, starch ethanol, or other ethanol
2 22 derived from biomass feedstock, fatty acid methyl esters,
2 23 or butanol, but only to the extent that such molecules are
2 24 produced and sold for uses other than food, feed, or fuel.
2 25 "Renewable chemical" also includes a building block chemical
2 26 that can be a food additive as long as the building block
2 27 chemical is not primarily consumed as food and is also sold
2 28 for uses other than food. "Renewable chemical" also includes
2 29 supplements, vitamins, nutraceuticals, and pharmaceuticals, but
2 30 only to the extent that such molecules do not provide caloric
2 31 value so as to be considered sustenance as food or feed.
2 32 8. "Sugar" means the organic compound glucose, fructose,
2 33 xylose, arabinose, lactose, sucrose, starch, cellulose, or
2 34 hemicellulose.
2 35 Sec. 4. NEW SECTION. 15.317 Eligibility requirements.
3 1 To be eligible to receive the renewable chemical production
3 2 tax credit pursuant to the program, a business shall meet all
3 3 of the following requirements:
3 4 1. The business is physically located in this state.
3 5 2. The business is operated for profit and under single
3 6 management.
3 7 3. The business is not an entity providing professional
3 8 services, health care services, or medical treatments or an
3 9 entity engaged primarily in retail operations.
3 10 4. The business organized, expanded, or located in the state
3 11 on or after the effective date of this division of this Act.
3 12 5. The business shall not be relocating or reducing
3 13 operations as described in section 15.329, subsection 1,
3 14 paragraph "b", and as determined under the discretion of the
3 15 authority.
3 16 6. The business is in compliance with all agreements entered
3 17 into under this program or other programs administered by the
3 18 authority.
3 19 Sec. 5. NEW SECTION. 15.318 Eligible business application
3 20 and agreement ==== maximum tax credits.
3 21 1. Application.
3 22 a. An eligible business that produces a renewable chemical
3 23 in this state from biomass feedstock during a calendar year may
3 24 apply to the authority for the renewable chemical production
3 25 tax credit provided in section 15.319.
3 26 b. The application shall be made to the authority in the
3 27 manner prescribed by the authority.
3 28 c. The application shall be made during the calendar year
3 29 following the calendar year in which the renewable chemicals
3 30 are produced.
3 31 d. The authority may accept applications on a continuous
3 32 basis or may establish, by rule, an annual application
3 33 deadline.
3 34 e. The application shall include all of the following
3 35 information:
4 1 (1) The amount of renewable chemicals produced in the state
4 2 from biomass feedstock by the eligible business during the
4 3 calendar year, measured in pounds.
4 4 (2) Any other information reasonably required by the
4 5 authority in order to establish and verify eligibility under
4 6 the program.
4 7 2. Agreement and fees.
4 8 a. Before being issued a tax credit under section 15.319,
4 9 an eligible business shall enter into an agreement with the
4 10 authority for the successful completion of all requirements of
4 11 the program.
4 12 b. The compliance cost fees authorized in section 15.330,
4 13 subsection 12, shall apply to all agreements entered into
4 14 under this program and shall be collected by the authority in
4 15 the same manner and to the same extent as described in that
4 16 subsection.
4 17 c. An eligible business shall fulfill all the requirements
4 18 of the program and the agreement before receiving a tax credit
4 19 or entering into a subsequent agreement under this section.
4 20 The authority may decline to enter into a subsequent agreement
4 21 under this section or issue a tax credit if an agreement is not
4 22 successfully fulfilled.
4 23 d. Upon establishing that all requirements of the program
4 24 and the agreement have been fulfilled, the authority shall
4 25 issue a tax credit and related tax credit certificate to the
4 26 eligible business stating the amount of renewable chemical
4 27 production tax credit under section 15.319 the eligible
4 28 business may claim.
4 29 3. Maximum tax credit amount.
4 30 a. The maximum amount of tax credit that may be issued under
4 31 section 15.319 to an eligible business for the production of
4 32 renewable chemicals in a calendar year shall not exceed the
4 33 following:
4 34 (1) In the case of an eligible business that has been in
4 35 operation in the state for five years or less at the time of the
5 1 application, one million dollars.
5 2 (2) In the case of an eligible business that has been in
5 3 operation in the state for more than five years at the time of
5 4 the application, five hundred thousand dollars.
5 5 b. An eligible business shall not receive a tax credit for
5 6 renewable chemicals produced before the date the business first
5 7 qualified as an eligible business pursuant to section 15.317.
5 8 c. An eligible business shall not receive more than five tax
5 9 credits under the program.
5 10 d. The authority shall issue tax credits under the program
5 11 on a first=come, first=served basis until the maximum amount of
5 12 tax credits allocated pursuant to section 15.119, subsection
5 13 2, paragraph "h", is reached. The authority shall maintain
5 14 a list of successful applicants under the program, so that
5 15 if the maximum aggregate amount of tax credits is reached in
5 16 a given fiscal year, eligible businesses that successfully
5 17 applied but for which tax credits were not issued shall be
5 18 placed on a wait list in the order the eligible businesses
5 19 applied and shall be given priority for receiving tax credits
5 20 in succeeding fiscal years. Placement on a wait list pursuant
5 21 to this paragraph shall not constitute a promise binding the
5 22 state. The availability of a tax credit and issuance of a tax
5 23 credit certificate pursuant to this subsection in a future
5 24 fiscal year is contingent upon the availability of tax credits
5 25 in that particular fiscal year.
5 26 4. Termination and repayment. The failure by an eligible
5 27 business in fulfilling any requirement of the program or any of
5 28 the terms and obligations of an agreement entered into pursuant
5 29 to this section may result in the reduction, termination,
5 30 or recision of the tax credits under section 15.319 and may
5 31 subject the eligible business to the repayment or recapture of
5 32 tax credits claimed. The repayment or recapture of tax credits
5 33 pursuant to this subsection shall be accomplished in the same
5 34 manner as provided in section 15.330, subsection 2.
5 35 5. Confidentiality.
6 1 a. Except as provided in paragraph "b", any information
6 2 or record in the possession of the authority with respect to
6 3 the program shall be presumed by the authority to be a trade
6 4 secret protected under chapter 550 or common law and shall be
6 5 kept confidential by the authority unless otherwise ordered by
6 6 a court.
6 7 b. The identity of a tax credit recipient and the amount
6 8 of the tax credit shall be considered public information under
6 9 chapter 22.
6 10 Sec. 6. NEW SECTION. 15.319 Renewable chemical production
6 11 tax credit.
6 12 1. An eligible business that has entered into an agreement
6 13 pursuant to section 15.318 may claim a tax credit equal to
6 14 the product of five cents multiplied by the number of pounds
6 15 of renewable chemicals produced in this state from biomass
6 16 feedstock by the eligible business during the calendar year.
6 17 However, an eligible business shall not receive a tax credit
6 18 for the production of a secondarily derived building block
6 19 chemical if that chemical is also the subject of a credit at
6 20 the time of production as a first product. The renewable
6 21 chemical production tax credit shall not be available for any
6 22 renewable chemical produced after the 2025 calendar year.
6 23 2. The tax credit shall be allowed against taxes imposed
6 24 under chapter 422, division II or III.
6 25 3. The tax credit shall be claimed for the tax year during
6 26 which the eligible business was issued the tax credit.
6 27 4. An individual may claim a tax credit under this section
6 28 of a partnership, limited liability company, S corporation,
6 29 cooperative organized under chapter 501 and filing as a
6 30 partnership for federal tax purposes, estate, or trust electing
6 31 to have income taxed directly to the individual. The amount
6 32 claimed by the individual shall be based upon the pro rata
6 33 share of the individual's earnings from the partnership,
6 34 limited liability company, S corporation, cooperative, estate,
6 35 or trust.
7 1 5. Any tax credit in excess of the tax liability is
7 2 refundable. In lieu of claiming a refund, the taxpayer
7 3 may elect to have the overpayment shown on the taxpayer's
7 4 final, completed return credited to the tax liability for the
7 5 following tax year.
7 6 6. a. To claim a tax credit under this section, a taxpayer
7 7 shall include one or more tax credit certificates with the
7 8 taxpayer's tax return.
7 9 b. The tax credit certificate shall contain the taxpayer's
7 10 name, address, tax identification number, the amount of the
7 11 credit, the name of the eligible business, and any other
7 12 information required by the department of revenue.
7 13 c. The tax credit certificate, unless rescinded by the
7 14 authority, shall be accepted by the department of revenue as
7 15 payment for taxes imposed pursuant to chapter 422, divisions II
7 16 and III, subject to any conditions or restrictions placed by
7 17 the authority upon the face of the tax credit certificate and
7 18 subject to the limitations of the program.
7 19 d. Tax credit certificates issued pursuant to this section
7 20 shall not be transferred to any other person.
7 21 Sec. 7. NEW SECTION. 15.320 Rules.
7 22 The authority and the department of revenue shall each adopt
7 23 rules as necessary for the implementation and administration
7 24 of this part.
7 25 Sec. 8. NEW SECTION. 422.10A Renewable chemical production
7 26 tax credit.
7 27 The taxes imposed under this division, less the credits
7 28 allowed under section 422.12, shall be reduced by a renewable
7 29 chemical production tax credit allowed under section 15.319.
7 30 Sec. 9. Section 422.33, Code 2015, is amended by adding the
7 31 following new subsection:
7 32 NEW SUBSECTION. 22. The taxes imposed under this division
7 33 shall be reduced by a renewable chemical production tax credit
7 34 allowed under section 15.319.
7 35 Sec. 10. TRANSITION. Notwithstanding Code section 15.319,
8 1 subsection 3, as enacted in this division of this Act, tax
8 2 credits issued to an eligible business during the 2016 calendar
8 3 year for renewable chemicals produced during the 2015 calendar
8 4 year may be claimed by the eligible business for a tax year
8 5 beginning on or after January 1, 2015.
8 6 Sec. 11. EFFECTIVE UPON ENACTMENT. This division of this
8 7 Act, being deemed of immediate importance, takes effect upon
8 8 enactment.
8 9 Sec. 12. APPLICABILITY. This division of this Act applies
8 10 to renewable chemicals produced in the state from biomass
8 11 feedstock on or after the effective date of this division of
8 12 this Act.
8 13 Sec. 13. RETROACTIVE APPLICABILITY. This division of this
8 14 Act applies retroactively to January 1, 2015, for tax years
8 15 beginning on or after that date.
8 16 DIVISION II
8 17 ANGEL INVESTOR TAX CREDITS
8 18 Sec. 14. Section 2.48, subsection 3, paragraph d,
8 19 subparagraph (1), Code 2015, is amended to read as follows:
8 20 (1) Tax credits for investments in qualifying businesses
8 21 and community=based seed capital funds under chapter 15E,
8 22 division V.
8 23 Sec. 15. Section 15.119, subsection 2, paragraph d, Code
8 24 2015, is amended to read as follows:
8 25 d. The tax credits for investments in qualifying businesses
8 26 and community=based seed capital funds issued pursuant to
8 27 section 15E.43. In allocating tax credits pursuant to this
8 28 subsection, the authority shall allocate two million dollars
8 29 for purposes of this paragraph, unless the authority determines
8 30 that the tax credits awarded will be less than that amount.
8 31 Sec. 16. Section 15E.41, Code 2015, is amended by striking
8 32 the section and inserting in lieu thereof the following:
8 33 15E.41 Purpose.
8 34 The purpose of this division is to stimulate job growth,
8 35 create wealth, and accelerate the creation of new ventures by
9 1 using investment tax credits to incentivize the transfer of
9 2 capital from investors to entrepreneurs, particularly during
9 3 early=stage growth.
9 4 Sec. 17. Section 15E.42, Code 2015, is amended by adding the
9 5 following new subsection:
9 6 NEW SUBSECTION. 2A. "Entrepreneurial assistance
9 7 program" includes the entrepreneur investment awards program
9 8 administered under section 15E.362, the receipt of services
9 9 from a service provider engaged pursuant to section 15.411,
9 10 subsection 1, or the program administered under section 15.411,
9 11 subsection 2.
9 12 Sec. 18. Section 15E.42, subsection 3, Code 2015, is amended
9 13 to read as follows:
9 14 3. "Investor" means a person making a cash investment in
9 15 a qualifying business or in a community=based seed capital
9 16 fund. "Investor" does not include a person that holds at least
9 17 a seventy percent ownership interest as an owner, member, or
9 18 shareholder in a qualifying business.
9 19 Sec. 19. Section 15E.42, subsection 4, Code 2015, is amended
9 20 by striking the subsection.
9 21 Sec. 20. Section 15E.43, subsections 1 and 2, Code 2015, are
9 22 amended to read as follows:
9 23 1. a. For tax years beginning on or after January 1, 2002
9 24 2015, a tax credit shall be allowed against the taxes imposed
9 25 in chapter 422, divisions II, III, and V, and in chapter 432,
9 26 and against the moneys and credits tax imposed in section
9 27 533.329, for a portion of a taxpayer's equity investment,
9 28 as provided in subsection 2, in a qualifying business or a
9 29 community=based seed capital fund.
9 30 b. An individual may claim a tax credit under this
9 31 paragraph section of a partnership, limited liability company,
9 32 S corporation, estate, or trust electing to have income
9 33 taxed directly to the individual. The amount claimed by the
9 34 individual shall be based upon the pro rata share of the
9 35 individual's earnings from the partnership, limited liability
10 1 company, S corporation, estate, or trust.
10 2 b. c. A tax credit shall be allowed only for an investment
10 3 made in the form of cash to purchase equity in a qualifying
10 4 business or in a community=based seed capital fund. A
10 5 taxpayer that has received a tax credit for an investment in
10 6 a community=based seed capital fund shall not claim the tax
10 7 credit prior to the third tax year following the tax year in
10 8 which the investment is made. Any tax credit in excess of the
10 9 taxpayer's liability for the tax year may be credited to the
10 10 tax liability for the following five years or until depleted,
10 11 whichever is earlier. A tax credit shall not be carried back
10 12 to a tax year prior to the tax year in which the taxpayer
10 13 redeems the tax credit.
10 14 c. In the case of a tax credit allowed against the taxes
10 15 imposed in chapter 422, division II, where the taxpayer died
10 16 prior to redeeming the entire tax credit, the remaining credit
10 17 can be redeemed on the decedent's final income tax return.
10 18 d. For a tax credit claimed against the taxes imposed in
10 19 chapter 422, division II, any tax credit in excess of the
10 20 tax liability is refundable. In lieu of claiming a refund,
10 21 the taxpayer may elect to have the overpayment shown on
10 22 the taxpayer's final, completed return credited to the tax
10 23 liability for the following tax year. For a tax credit claimed
10 24 against the taxes imposed in chapter 422, divisions III and
10 25 V, and in chapter 432, and against the moneys and credits tax
10 26 imposed in section 533.329, any tax credit in excess of the
10 27 taxpayer's liability for the tax year may be credited to the
10 28 tax liability for the following three years or until depleted,
10 29 whichever is earlier. A tax credit shall not be carried back
10 30 to a tax year prior to the tax year in which the taxpayer
10 31 redeems the tax credit.
10 32 2. a. A The amount of the tax credit shall equal twenty
10 33 twenty=five percent of the taxpayer's equity investment.
10 34 b. The maximum amount of a tax credit for an investment
10 35 by an investor in any one qualifying business shall be fifty
11 1 thousand dollars. Each year, an investor and all affiliates
11 2 of the investor shall not claim tax credits under this section
11 3 for more than five different investments in five different
11 4 qualifying businesses that may be issued per calendar year to a
11 5 natural person and the person's spouse or dependent shall not
11 6 exceed one hundred thousand dollars combined. For purposes of
11 7 this paragraph, a tax credit issued to a partnership, limited
11 8 liability company, S corporation, estate, or trust electing to
11 9 have income taxed directly to the individual shall be deemed
11 10 to be issued to the individual owners based upon the pro rata
11 11 share of the individual's earnings from the entity. For
11 12 purposes of this paragraph, "dependent" has the same meaning as
11 13 provided by the Internal Revenue Code.
11 14 c. The maximum amount of tax credits that may be issued
11 15 per calendar year for equity investments in any one qualifying
11 16 business shall not exceed five hundred thousand dollars.
11 17 Sec. 21. Section 15E.43, subsections 5 and 7, Code 2015, are
11 18 amended to read as follows:
11 19 5. A tax credit shall not be transferable transferred to any
11 20 other taxpayer person.
11 21 7. The authority shall develop a system for registration
11 22 and authorization issuance of tax credits authorized pursuant
11 23 to this division and shall control distribution of all tax
11 24 credits distributed credit certificates to investors pursuant
11 25 to this division. The authority shall develop rules for the
11 26 qualification and administration of qualifying businesses
11 27 and community=based seed capital funds. The department of
11 28 revenue shall adopt these criteria as administrative rules and
11 29 any other rules pursuant to chapter 17A as necessary for the
11 30 administration of this division.
11 31 Sec. 22. Section 15E.43, subsections 6 and 8, Code 2015, are
11 32 amended by striking the subsections.
11 33 Sec. 23. Section 15E.44, subsection 2, paragraph c, Code
11 34 2015, is amended by striking the paragraph and inserting in
11 35 lieu thereof the following:
12 1 c. The business is participating in an entrepreneurial
12 2 assistance program. The authority may waive this requirement
12 3 if a business establishes that its owners, directors, officers,
12 4 and employees have an appropriate level of experience such
12 5 that participation in an entrepreneurial assistance program
12 6 would not materially change the prospects of the business.
12 7 The authority may consult with outside service providers in
12 8 consideration of such a waiver.
12 9 Sec. 24. Section 15E.44, subsection 2, paragraphs e and f,
12 10 Code 2015, are amended to read as follows:
12 11 e. The business shall not have a net worth that exceeds five
12 12 ten million dollars.
12 13 f. The business shall have secured all of the following at
12 14 the time of application for tax credits:
12 15 (1) At least two investors.
12 16 (2) total Total equity financing, near equity financing,
12 17 binding investment commitments, or some combination thereof,
12 18 equal to at least two hundred fifty five hundred thousand
12 19 dollars, from investors. For purposes of this subparagraph,
12 20 "investor" includes a person who executes a binding investment
12 21 commitment to a business.
12 22 Sec. 25. Section 15E.46, Code 2015, is amended to read as
12 23 follows:
12 24 15E.46 Reports Confidentiality ==== reports.
12 25 1. Except as provided in subsection 2, all information or
12 26 records in the possession of the authority with respect to
12 27 this division shall be presumed by the authority to be a trade
12 28 secret protected under chapter 550 or common law and shall be
12 29 kept confidential by the authority unless otherwise ordered by
12 30 a court.
12 31 2. All of the following shall be considered public
12 32 information under chapter 22:
12 33 a. The identity of a qualifying business.
12 34 b. The identity of an investor and the qualifying business
12 35 in which the investor made an equity investment.
13 1 c. The number of tax credit certificates issued by the
13 2 authority.
13 3 d. The total dollar amount of tax credits issued by the
13 4 authority.
13 5 3. The authority shall publish an annual report of the
13 6 activities conducted pursuant to this division and shall
13 7 submit the report to the governor and the general assembly.
13 8 The report shall include a listing of eligible qualifying
13 9 businesses and the number of tax credit certificates and the
13 10 amount of tax credits issued by the authority.
13 11 Sec. 26. Section 15E.52, subsection 4, Code 2015, is amended
13 12 to read as follows:
13 13 4. A taxpayer shall not claim a tax credit under this
13 14 section if the taxpayer is a venture capital investment fund
13 15 allocation manager for the Iowa fund of funds created in
13 16 section 15E.65 or an investor that receives a tax credit for
13 17 the same investment in a qualifying business as described in
13 18 section 15E.44 or in a community=based seed capital fund as
13 19 described in section 15E.45, Code 2015.
13 20 Sec. 27. Section 422.11F, subsection 1, Code 2015, is
13 21 amended to read as follows:
13 22 1. The taxes imposed under this division, less the credits
13 23 allowed under section 422.12, shall be reduced by an investment
13 24 tax credit authorized pursuant to section 15E.43 for an
13 25 investment in a qualifying business or a community=based seed
13 26 capital fund.
13 27 Sec. 28. Section 422.33, subsection 12, paragraph a, Code
13 28 2015, is amended to read as follows:
13 29 a. The taxes imposed under this division shall be reduced by
13 30 an investment tax credit authorized pursuant to section 15E.43
13 31 for an investment in a qualifying business or a community=based
13 32 seed capital fund.
13 33 Sec. 29. Section 422.60, subsection 5, paragraph a, Code
13 34 2015, is amended to read as follows:
13 35 a. The taxes imposed under this division shall be reduced by
14 1 an investment tax credit authorized pursuant to section 15E.43
14 2 for an investment in a qualifying business or a community=based
14 3 seed capital fund.
14 4 Sec. 30. Section 432.12C, subsection 1, Code 2015, is
14 5 amended to read as follows:
14 6 1. The tax imposed under this chapter shall be reduced by
14 7 an investment tax credit authorized pursuant to section 15E.43
14 8 for an investment in a qualifying business or a community=based
14 9 seed capital fund.
14 10 Sec. 31. REPEAL. Section 15E.45, Code 2015, is repealed.
14 11 Sec. 32. EFFECTIVE UPON ENACTMENT. This division of this
14 12 Act, being deemed of immediate importance, takes effect upon
14 13 enactment.
14 14 Sec. 33. APPLICABILITY. Unless otherwise provided in this
14 15 division of this Act, this division of this Act applies to
14 16 equity investments in a qualifying business made on or after
14 17 the effective date of this division of this Act, and equity
14 18 investments made in a qualifying business or community=based
14 19 seed capital fund prior to the effective date of this division
14 20 of this Act shall be governed by sections 15E.41 through
14 21 15E.46, 422.11F, 422.33, 422.60, 432.12C, and 533.329, Code
14 22 2015.
14 23 Sec. 34. APPLICABILITY. The sections of this division
14 24 of this Act amending section 15E.44, subsection 2, apply
14 25 to businesses that submit an application to the economic
14 26 development authority to be registered as a qualifying business
14 27 on or after the effective date of this division of this Act,
14 28 and businesses that submit an application to the economic
14 29 development authority to be registered as a qualifying business
14 30 before the effective date of this division of this Act shall be
14 31 governed by section 15E.44, subsection 2, Code 2015.
14 32 DIVISION III
14 33 ENTREPRENEUR INVESTMENT AWARDS PROGRAM
14 34 Sec. 35. Section 15E.362, Code 2015, is amended by striking
14 35 the section and inserting in lieu thereof the following:
15 1 15E.362 Entrepreneur investment awards program.
15 2 1. For purposes of this division, unless the context
15 3 otherwise requires:
15 4 a. "Business development services" includes but is not
15 5 limited to corporate development services, business model
15 6 development services, business planning services, marketing
15 7 services, financial strategies and management services,
15 8 mentoring and management coaching, and networking services.
15 9 b. "Eligible entrepreneurial assistance provider" means a
15 10 person meeting the requirements of subsection 3.
15 11 c. "Financial assistance" means the same as defined in
15 12 section 15.327.
15 13 d. "Program" means the entrepreneur investment awards
15 14 program administered pursuant to this division.
15 15 2. The authority shall establish and administer an
15 16 entrepreneur investment awards program for purposes of
15 17 providing financial assistance to eligible entrepreneurial
15 18 assistance providers that provide technical and financial
15 19 assistance to entrepreneurs and start=up companies seeking to
15 20 create, locate, or expand a business in the state. Financial
15 21 assistance under the program shall be provided from the
15 22 entrepreneur investment awards program fund created in section
15 23 15E.363.
15 24 3. In order to be eligible for financial assistance under
15 25 the program an entrepreneurial assistance provider must meet
15 26 all of the following requirements:
15 27 a. The provider must have its principal place of operations
15 28 located in this state.
15 29 b. The provider must offer a comprehensive set of business
15 30 development services to emerging and early=stage innovation
15 31 companies to assist in the creation, location, growth, and
15 32 long=term success of the company in this state.
15 33 c. The business development services may be performed at the
15 34 physical location of the provider or the company.
15 35 d. The business development services may be provided in
16 1 consideration of equity participation in the company, a fee
16 2 for services, a membership agreement with the company, or any
16 3 combination thereof.
16 4 4. Entrepreneurial assistance providers may apply for
16 5 financial assistance under the program in the manner and form
16 6 prescribed by the authority.
16 7 5. The economic development authority board in its
16 8 discretion may approve, deny, or defer each application
16 9 for financial assistance under the program from persons
16 10 it determines to be an eligible entrepreneurial assistance
16 11 provider.
16 12 6. Subject to subsection 7, the amount of financial
16 13 assistance awarded to an eligible entrepreneurial assistance
16 14 provider shall be within the discretion of the authority.
16 15 7. a. The maximum amount of financial assistance awarded
16 16 to an eligible entrepreneurial assistance provider shall not
16 17 exceed two hundred thousand dollars.
16 18 b. The maximum amount of financial assistance provided under
16 19 the program shall not exceed one million dollars in a fiscal
16 20 year.
16 21 8. The authority shall award financial assistance on a
16 22 competitive basis. In making awards of financial assistance,
16 23 the authority may develop scoring criteria and establish
16 24 minimum requirements for the receipt of financial assistance
16 25 under the program. In making awards of financial assistance,
16 26 the authority may consider all of the following:
16 27 a. The business experience of the professional staff
16 28 employed or retained by the eligible entrepreneurial assistance
16 29 provider.
16 30 b. The business plan review capacity of the professional
16 31 staff of the eligible entrepreneurial assistance provider.
16 32 c. The expertise in all aspects of business disciplines
16 33 of the professional staff of the eligible entrepreneurial
16 34 assistance provider.
16 35 d. The access of the eligible entrepreneurial assistance
17 1 provider to external service providers, including legal,
17 2 accounting, marketing, and financial services.
17 3 e. The service model and likelihood of success of the
17 4 eligible entrepreneurial assistance provider and its similarity
17 5 to other successful entrepreneurial assistance providers in the
17 6 country.
17 7 f. The financial need of the eligible entrepreneurial
17 8 assistance provider.
17 9 9. Financial assistance awarded to an eligible
17 10 entrepreneurial assistance provider shall only be used for
17 11 the purpose of operating costs incurred by the eligible
17 12 entrepreneurial assistance provider in providing business
17 13 development services to emerging and early=stage innovation
17 14 companies in this state. Such financial assistance shall not
17 15 be distributed to owners or investors of the company to which
17 16 business development services are provided and shall not be
17 17 distributed to other persons assisting with the provision of
17 18 business development services to the company.
17 19 10. The authority may contract with outside service
17 20 providers for assistance with the program or may delegate
17 21 the administration of the program to the Iowa innovation
17 22 corporation pursuant to section 15.106B.
17 23 11. The authority may make client referrals to eligible
17 24 entrepreneurial assistance providers.
17 25 Sec. 36. Section 15E.363, subsection 3, Code 2015, is
17 26 amended to read as follows:
17 27 3. The Moneys credited to the fund are appropriated to
17 28 the authority and shall be used to provide grants under the
17 29 entrepreneur investment awards program established in section
17 30 15E.362 financial assistance under the program.
17 31 DIVISION IV
17 32 WORKFORCE HOUSING TAX INCENTIVES PROGRAM
17 33 Sec. 37. Section 15.354, subsection 3, paragraph e, Code
17 34 2015, is amended to read as follows:
17 35 e. (1) Upon review of the examination and verification of
18 1 the amount of the qualifying new investment, the authority may
18 2 issue a tax credit certificate to the housing business stating
18 3 the amount of workforce housing investment tax credits under
18 4 section 15.355 the eligible housing business may claim.
18 5 (2) If upon review of the examination in subparagraph
18 6 (1) the authority determines that a housing project has
18 7 incurred project costs in excess of the amount submitted in the
18 8 application made pursuant to subsection 1, the authority shall
18 9 do one of the following:
18 10 (a) If the project costs do not cause the housing project's
18 11 average dwelling unit cost to exceed the applicable maximum
18 12 amount authorized in section 15.353, subsection 3, the
18 13 authority may consider the agreement fulfilled and may issue a
18 14 tax credit certificate.
18 15 (b) If the project costs cause the housing project's
18 16 average dwelling unit cost to exceed the applicable maximum
18 17 amount authorized in section 15.353, subsection 3, but does
18 18 not cause the average dwelling unit cost to exceed one hundred
18 19 ten percent of such applicable maximum amount, the authority
18 20 may consider the agreement fulfilled and may issue a tax
18 21 credit certificate. In such case, the authority shall reduce
18 22 the amount of tax incentives the eligible housing project
18 23 may claim under section 15.355, subsections 2 and 3, by the
18 24 same percentage that the housing project's average dwelling
18 25 unit cost exceeds the applicable maximum amount under section
18 26 15.353, subsection 3, and such tax incentive reduction shall
18 27 be reflected on the tax credit certificate. If the authority
18 28 issues a certificate pursuant to this subparagraph division,
18 29 the department of revenue shall accept the certificate
18 30 notwithstanding that the housing project's average dwelling
18 31 unit costs exceeds the maximum amount specified in section
18 32 15.353, subsection 3.
18 33 (c) If the project costs cause the housing project's average
18 34 dwelling unit cost to exceed one hundred ten percent of the
18 35 applicable maximum amount authorized in 15.353, subsection 3,
19 1 the authority shall determine the eligible housing business to
19 2 be in default under the agreement and shall not issue a tax
19 3 credit certificate.
19 4 Sec. 38. Section 15.355, subsection 2, Code 2015, is amended
19 5 to read as follows:
19 6 2. A housing business may claim a refund of the sales and
19 7 use taxes paid under chapter 423 that are directly related
19 8 to a housing project. The refund available pursuant to this
19 9 subsection shall be as provided in section 15.331A to the
19 10 extent applicable for purposes of this program, excluding
19 11 subsection 2, paragraph "c", of that section. For purposes of
19 12 the program, the term "project completion", as used in section
19 13 15.331A, shall mean the date on which the authority notifies
19 14 the department of revenue that all applicable requirements
19 15 of an agreement entered into pursuant to section 15.354 are
19 16 satisfied.
19 17 Sec. 39. EFFECTIVE UPON ENACTMENT. This division of this
19 18 Act, being deemed of immediate importance, takes effect upon
19 19 enactment.
19 20 Sec. 40. RETROACTIVE APPLICABILITY. This division of this
19 21 Act applies retroactively to May 30, 2014, for all agreements
19 22 entered into pursuant to Code section 15.354 on or after that
19 23 date.
19 24 DIVISION V
19 25 MISCELLANEOUS CHANGES
19 26 Sec. 41. Section 15.293B, subsection 4, Code 2015, is
19 27 amended to read as follows:
19 28 4. A registered project shall be completed within thirty
19 29 months of the date the project was registered unless the
19 30 authority, upon recommendation of the council and approval of
19 31 the board, provides additional time to complete the project.
19 32 A project shall not be provided more than twelve months of
19 33 additional time. If the registered project is not completed
19 34 within the time required, the project is not eligible to claim
19 35 a tax credit provided in section 15.293A.
20 1 Sec. 42. SPECIAL PROJECT EXTENSION. Notwithstanding
20 2 any other provision of law to the contrary, the economic
20 3 development authority may extend the project completion
20 4 date for a project awarded tax incentives under both the
20 5 redevelopment tax credit program in sections 15.293A and
20 6 15.293B and the housing enterprise zone tax incentives program
20 7 in section 15E.193B, Code 2014, if the property that is the
20 8 subject of the project suffered a catastrophic fire during the
20 9 2014 calendar year.
20 10 Sec. 43. EFFECTIVE UPON ENACTMENT. This division of this
20 11 Act, being deemed of immediate importance, takes effect upon
20 12 enactment.
20 13 Sec. 44. RETROACTIVE APPLICABILITY. The section of this
20 14 division of this Act amending Code section 15.293B applies
20 15 retroactively to qualifying redevelopment project agreements
20 16 entered into on or after July 1, 2010, for which a request for
20 17 a project extension is submitted to the economic development
20 18 authority on or after January 1, 2015.
20 19 EXPLANATION
20 20 The inclusion of this explanation does not constitute agreement with
20 21 the explanation's substance by the members of the general assembly.
20 22 This bill relates to the administration of programs by the
20 23 economic development authority (EDA) by creating a renewable
20 24 chemical production tax credit, modifying the tax credit for
20 25 investments in qualifying businesses and community=based seed
20 26 capital funds, and modifying the entrepreneur investment awards
20 27 program.
20 28 DIVISION I ==== RENEWABLE CHEMICAL PRODUCTION TAX CREDIT.
20 29 Division I creates a renewable chemical production tax credit
20 30 program (program) that will be administered by the EDA and that
20 31 will provide tax credits to eligible businesses that produce
20 32 renewable chemicals in Iowa from biomass feedstock. "Renewable
20 33 chemical", "biomass feedstock", and other related terms are
20 34 defined in the division.
20 35 In order to qualify for the tax credit, a business must
21 1 meet several requirements. First, the business must be
21 2 physically located in Iowa and operated for profit under
21 3 single management. Second, the business must not be an
21 4 entity providing professional services, health care services,
21 5 or medical treatments, or be engaged primarily in retail
21 6 operations. Third, the business must have organized, expanded,
21 7 or located in Iowa on or after the effective date of the
21 8 division. Fourth, the business must not be, in the discretion
21 9 of the EDA, ineligible under certain provisions relating to the
21 10 relocation or reduction of business operations within Iowa.
21 11 Fifth, the business must be in compliance with all agreements
21 12 entered into under the program or other programs administered
21 13 by the EDA.
21 14 An eligible business seeking a tax credit is required
21 15 to apply to the EDA during the calendar year following the
21 16 calendar year in which the renewable chemicals are produced.
21 17 The application must include the amount of renewable chemicals
21 18 produced in Iowa from biomass feedstock by the eligible
21 19 business during the calendar year, measured in pounds, and any
21 20 other information reasonably required by the EDA in order to
21 21 establish and verify eligibility under the program. The EDA
21 22 may accept applications on a continuous basis or may establish
21 23 an annual application deadline.
21 24 Before being issued a tax credit, an eligible business
21 25 is required to enter into an agreement with the EDA for the
21 26 successful completion of all requirements of the program. The
21 27 EDA is authorized to impose two compliance cost fees under the
21 28 program. The first fee equals $500 per agreement. The second
21 29 fee equals 0.5 percent of the value of the tax credit claimed
21 30 pursuant to the agreement if the agreement has an aggregate tax
21 31 credit value of $100,000 or greater.
21 32 An eligible business that fails to comply with the
21 33 requirements of the program or the terms of an agreement with
21 34 the EDA may have its tax credits reduced, terminated, or
21 35 rescinded, and may be subject to the repayment or recapture of
22 1 claimed tax credits.
22 2 Upon determining that all requirements of an agreement and
22 3 the program have been fulfilled, the EDA shall issue a tax
22 4 credit and related tax credit certificate to the eligible
22 5 business in an amount equal to the product of $.05 multiplied
22 6 by the number of pounds of renewable chemicals produced in Iowa
22 7 from biomass feedstock by the eligible business during the
22 8 calendar year. Renewable chemicals produced by an eligible
22 9 business prior to the effective date of the division, or
22 10 prior to the date the business first qualifies as an eligible
22 11 business, or after calendar year 2025, shall not qualify for
22 12 the tax credit.
22 13 The tax credit shall be claimed for the tax year during which
22 14 the eligible business was issued the tax credit. However,
22 15 tax credits issued in 2016 for renewable chemicals produced
22 16 in 2015 may be claimed for a tax year beginning on or after
22 17 January 1, 2015. The tax credit may be claimed against the
22 18 individual income tax and the corporate income tax. The
22 19 credit is refundable or may, at the election of the taxpayer,
22 20 be carried forward for up to one tax year. The tax credit
22 21 shall not be transferred to any person. A tax credit issued
22 22 to a partnership, limited liability company, S corporation,
22 23 cooperative organized under Code chapter 501 and filing as a
22 24 partnership for federal tax purposes, estate, or trust electing
22 25 to have the income taxed directly to the individual may be
22 26 claimed by the individual based upon the pro rata share of the
22 27 individual's earnings from that entity.
22 28 The division provides that the program is subject to the
22 29 EDA's maximum aggregate tax credit cap of $170 million per
22 30 fiscal year in Code section 15.119, and not more than $15
22 31 million per fiscal year may be issued by the EDA under the
22 32 program. In addition, the maximum amount of tax credit that
22 33 may be issued to an eligible business in any one calendar year
22 34 shall not exceed $1 million or $500,000, depending on whether
22 35 the eligible business has been operating in Iowa at the time of
23 1 application for five or fewer years, or more than five years,
23 2 respectively. An eligible business shall not receive more than
23 3 five tax credits under the program. The EDA is required to
23 4 issue tax credits on a first=come, first=served basis until the
23 5 maximum amount of $15 million per fiscal year is reached. If
23 6 the amount of tax credits exceeds this amount in a fiscal year,
23 7 the EDA is required to establish a wait list and give priority
23 8 in subsequent years to the eligible businesses on the wait
23 9 list.
23 10 The division provides for the confidentiality of certain
23 11 information under the program. The identity of a tax credit
23 12 recipient and the amount of the tax credit shall be considered
23 13 public information under Code chapter 22 (examination of public
23 14 records), but any other information or record in the possession
23 15 of the EDA with respect to the program shall be presumed by
23 16 the EDA to be a trade secret protected under Code chapter 550
23 17 or common law and shall be kept confidential by the EDA unless
23 18 otherwise ordered by a court.
23 19 The division takes effect upon enactment and applies to
23 20 renewable chemicals produced in Iowa from biomass feedstock on
23 21 or after that date. The division applies retroactively to tax
23 22 years beginning on or after January 1, 2015.
23 23 DIVISION II ==== ANGEL INVESTOR TAX CREDITS. Division II
23 24 makes several changes to the tax credit for investments in
23 25 qualifying businesses and community=based seed capital funds,
23 26 often referred to as the angel investor tax credits. The
23 27 division amends the purpose of the tax credit in Code section
23 28 15E.41. The division excludes investments in community=based
23 29 seed capital funds from qualifying for the tax credit and
23 30 makes several conforming amendments to remove references to
23 31 community=based seed capital funds from the Code.
23 32 The division modifies the amount and dollar limitation of
23 33 the tax credit for a taxpayer. The tax credit is increased
23 34 from 20 percent to 25 percent of a taxpayer's equity investment
23 35 in a qualifying business. Under current law, a taxpayer cannot
24 1 claim more than $50,000 of tax credit per investment in a
24 2 qualifying business, and for each tax year a taxpayer and the
24 3 taxpayer's affiliates cannot claim tax credits for more than
24 4 five investments in five different qualifying businesses. The
24 5 division amends this dollar limitation to prohibit a natural
24 6 person and the person's spouse or dependent from being issued
24 7 a combined amount of more than $100,000 in tax credits per
24 8 calendar year. For purposes of this dollar limitation, credits
24 9 issued to partnerships and other pass=through entities are
24 10 deemed to be issued to the individual owners.
24 11 The division also provides that no more than $500,000 in tax
24 12 credits may be issued per calendar year for equity investments
24 13 in any one qualifying business.
24 14 The division modifies the procedures for claiming the tax
24 15 credit. Under current law, the tax credit is not refundable
24 16 but available for carryforward for up to five tax years. The
24 17 division makes the tax credit refundable if claimed against
24 18 the individual income tax, and for credits claimed against any
24 19 other tax, reduces the carryforward period to three years.
24 20 The division strikes a provision permitting the EDA
24 21 to cooperate with small business development centers to
24 22 disseminate information regarding the credits and to develop
24 23 standard application forms, and requiring the EDA to distribute
24 24 copies of the application forms to all community=based seed
24 25 capital funds and potential individual investors.
24 26 The division modifies the eligibility requirements for
24 27 qualifying businesses. The division strikes the requirement
24 28 that a business have an owner that meets at least one of
24 29 four qualifications relating to business education or
24 30 business experience. The division requires that a business
24 31 be participating in an entrepreneurial assistance program,
24 32 as defined in the division, but allows the EDA to waive this
24 33 requirement if the business establishes that its owners,
24 34 directors, officers, and employees have an appropriate level
24 35 of experience such that an entrepreneurial assistance program
25 1 would not materially change the prospects of the business.
25 2 The EDA is allowed to consult with outside service providers
25 3 in considering such a waiver. The division increases from $5
25 4 million to $10 million the maximum amount of net worth that
25 5 a business may have to be considered a qualifying business.
25 6 The division increases from $250,000 to $500,000 the amount of
25 7 financing that a business must have in order to be considered a
25 8 qualifying business, removes "near equity" from the types of
25 9 financing that will be considered in that calculation, requires
25 10 that the financing be secured at the time of application for
25 11 the tax credits, and requires that the business have at least
25 12 two investors at the time of application for the tax credits.
25 13 These modified eligibility requirements apply to businesses
25 14 that submit an application to the EDA to be registered as a
25 15 qualifying business on or after the effective date of this
25 16 division of the bill, and businesses that submitted such an
25 17 application to the EDA before the effective date of this
25 18 division of the bill shall be governed by current law.
25 19 The division provides for the confidentiality of certain
25 20 information with regard to the tax credit. The identity of
25 21 a qualifying business, the identity of an investor and the
25 22 qualifying business in which the investor made an equity
25 23 investment, and the total number and amount of tax credits
25 24 issued shall be considered public information under Code
25 25 chapter 22 (examination of public records), but any other
25 26 information or record in the possession of the EDA with respect
25 27 to the program shall be presumed by the EDA to be a trade secret
25 28 protected under Code chapter 550 or common law and shall be
25 29 kept confidential by the EDA unless otherwise ordered by a
25 30 court.
25 31 The division takes effect upon enactment and applies to
25 32 equity investments in a qualifying business made on or after
25 33 that date. Equity investments in a qualifying business or
25 34 community=based seed capital fund made prior to the effective
25 35 date of the division shall be governed by current law.
26 1 DIVISION III ==== ENTREPRENEUR INVESTMENT AWARDS PROGRAM.
26 2 Division III amends the entrepreneur investment awards program
26 3 administered by the EDA. The division strikes provisions that
26 4 prohibited the EDA from making awards under the program since
26 5 July 1, 2014, and that required the EDA by December 31, 2014,
26 6 to conduct a comprehensive review of the program and submit
26 7 a report with specified information to the governor and the
26 8 general assembly.
26 9 The division modifies the purpose of the program to be
26 10 to provide financial assistance to eligible entrepreneurial
26 11 assistance providers (provider) that provide technical and
26 12 financial assistance to entrepreneurs and start=up companies
26 13 seeking to create, locate, or expand a business in Iowa.
26 14 "Financial assistance" is defined in the division.
26 15 The division changes the requirements for receiving an
26 16 award. To be eligible to receive an award under current
26 17 law, an entrepreneurial assistance program must have been
26 18 an Iowa=based business, expended at least $500,000 during
26 19 the previous fiscal year to provide technical and financial
26 20 assistance services that meet the broad=based needs of
26 21 entrepreneurs seeking to create, locate, or expand a business
26 22 in Iowa that intends to derive more than 10 percent of its
26 23 gross sales from markets outside Iowa; and must have engaged
26 24 and communicated with certain other programs, funding sources,
26 25 and entities for its entrepreneur clients. The division
26 26 amends the eligibility for receiving financial assistance to
26 27 require that a provider have its principal place of operations
26 28 in Iowa and that the provider offer a comprehensive set of
26 29 business development services to emerging and early=stage
26 30 innovation companies to assist in the creation, location,
26 31 growth, and long=term success of the company in Iowa.
26 32 "Business development services" is defined in the division.
26 33 Business development services may be performed at the physical
26 34 location of the provider or the company and may be provided in
26 35 consideration of equity participation in the company, a fee for
27 1 services, or a membership agreement with the company.
27 2 Under current law, the EDA board could approve, deny, or
27 3 defer each application for a grant, and was required to award
27 4 grants on a first=come, first=served basis. The division
27 5 specifies that the EDA board has the discretion to approve,
27 6 deny, or defer each application for financial assistance and
27 7 that the amount of financial assistance awarded to a provider
27 8 is within the discretion of the EDA. The division requires
27 9 the EDA to award financial assistance on a competitive basis
27 10 and allows the EDA to develop scoring criteria and establish
27 11 minimum requirements for the receipt of a financial assistance
27 12 award.
27 13 In addition to the four factors relating to the provider's
27 14 professional staff that the EDA may consider under current
27 15 law in deciding whether to award financial assistance, the
27 16 division provides that the EDA may also consider the service
27 17 model and likelihood of success of the provider, the provider's
27 18 similarity to other successful providers in the country, and
27 19 the provider's financial need.
27 20 The division modifies the maximum award amount for a
27 21 recipient. Under current law, a grant to an entrepreneur
27 22 assistance program cannot exceed the lesser of 25 percent of
27 23 the funds expended by the program during the previous fiscal
27 24 year, 100 percent of the funds raised from certain persons
27 25 by the program during the previous fiscal year, or $200,000.
27 26 The division provides that the amount of financial assistance
27 27 awarded to any one provider shall not exceed $200,000.
27 28 The division modifies the permitted use of funds received
27 29 under the program. Under current law, grants are only
27 30 permitted to be used for the purpose of operating costs
27 31 incurred by the program. The division specifies that financial
27 32 assistance awarded to a provider shall only be used for
27 33 the purpose of operating costs incurred by the provider in
27 34 the provision of business development services to emerging
27 35 and early=stage innovation companies in Iowa. The division
28 1 further requires that such financial assistance shall not be
28 2 distributed to owners or investors of the company to which the
28 3 business development services are being provided and shall not
28 4 be provided to other persons assisting with the provision of
28 5 the services.
28 6 Under current law, an entrepreneurial assistance provider is
28 7 required to accept client referrals from the EDA as a condition
28 8 of receiving a grant. The division provides that the EDA may
28 9 make client referrals to eligible providers.
28 10 DIVISION IV == WORKFORCE HOUSING TAX INCENTIVES PROGRAM.
28 11 Under current law, a housing project is not eligible for
28 12 workforce housing tax incentives if the project's average
28 13 dwelling unit cost exceeds $200,000, or $250,000 if the project
28 14 involves certain historic property. The division permits EDA
28 15 to issue tax credit certificates to housing projects with an
28 16 average dwelling unit cost in excess of that amount, provided
28 17 the excess is not greater than 10 percent. In such cases, EDA
28 18 is required to reduce the housing project's tax incentives
28 19 by the same percentage that its average dwelling unit cost
28 20 exceeds the applicable maximum amount. The division provides
28 21 that housing projects with an average dwelling unit cost that
28 22 exceeds 110 percent of the applicable maximum amount shall not
28 23 be eligible for workforce housing tax incentives.
28 24 The division also amends the sales and use tax refund
28 25 available under the workforce housing tax incentive program.
28 26 That refund is available for sales and use tax paid prior
28 27 to project completion, which is currently defined to mean
28 28 the first date upon which the average annualized production
28 29 of finished product for the preceding 90=day period at the
28 30 manufacturing facility operated by the eligible business is
28 31 at least 50 percent of the initial design capacity of the
28 32 facility. The division amends the definition of "project
28 33 completion" to mean the date on which the EDA notifies the
28 34 department of revenue that all applicable requirements of
28 35 a workforce housing tax incentive program agreement are
29 1 satisfied.
29 2 Division IV takes effect upon enactment and applies
29 3 retroactively to May 30, 2014, for all workforce housing tax
29 4 incentive agreements entered into on or after that date.
29 5 DIVISION V == MISCELLANEOUS CHANGES. Division V makes
29 6 miscellaneous changes to other EDA programs. The division
29 7 amends the amount of time required to complete a project
29 8 under the redevelopment tax credit program. Under current
29 9 law, projects must be completed within 30 months, but EDA is
29 10 allowed to grant extensions of up to 12 months. The division
29 11 amends this provision to allow EDA, upon recommendation of the
29 12 brownfield redevelopment advisory council and approval of the
29 13 economic development authority board, to grant extensions of
29 14 any amount of time. This provision applies retroactively to
29 15 qualifying redevelopment project agreements entered into on or
29 16 after July 1, 2010, for which a request for project extension
29 17 is submitted to EDA on or after January 1, 2015.
29 18 The division also allows the EDA to extend the project
29 19 completion date for a project awarded tax incentives under the
29 20 redevelopment tax credit program and the housing enterprise
29 21 zone tax incentives program if the property that is the subject
29 22 of the project suffered a catastrophic fire during the 2014
29 23 calendar year.
29 24 Division V takes effect upon enactment.
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