Text: HF2526
Text: HF2528
House File 2527
HOUSE FILE
BY COMMITTEE ON WAYS AND
MEANS
(SUCCESSOR TO HSB 738)
A BILL FOR
1 An Act relating to taxation, including the administration and
2 review of certain economic development programs and certain
3 tax incentive programs and the reenactment of the estate
4 tax and including effective date and retroactive and other
5 applicability provisions.
6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
TLSB 5795HV (1) 83
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PAG LIN
1 1 DIVISION I
1 2 REVIEW AND REAUTHORIZATION OF PROGRAMS
1 3 Section 1. INTENT AND PURPOSE.
1 4 1. It is the intent of the general assembly that each tax
1 5 credit, withholding credit, and revenue division program should
1 6 effectuate the purposes for which it was enacted and that the
1 7 cost of such programs should be included more readily in the
1 8 yearly budgeting process.
1 9 2. The purposes of this Act are to provide for the regular
1 10 review of all tax credit, withholding credit, and revenue
1 11 division programs in order to facilitate the reauthorization
1 12 of successful programs and to do so at a cost that can be
1 13 accommodated by the state's annual budget.
1 14 DIVISION II
1 15 LEGISLATIVE TAX EXPENDITURE COMMITTEE
1 16 Sec. 2. Section 2.45, Code Supplement 2009, is amended by
1 17 adding the following new subsection:
1 18 NEW SUBSECTION. 5. a. The legislative tax expenditure
1 19 committee which shall be composed of ten members of the general
1 20 assembly, consisting of five members from each house, to be
1 21 appointed by the legislative council. In appointing the five
1 22 members of each house to the committee, the council shall
1 23 appoint three members from the majority party and two members
1 24 from the minority party.
1 25 b. The legislative tax expenditure committee shall have the
1 26 powers and duties described in section 2.48.
1 27 Sec. 3. NEW SECTION. 2.48 Legislative tax expenditure
1 28 committee == review of tax incentive programs.
1 29 1. Statement of principles of sound tax policy. The
1 30 legislative tax expenditure committee shall do all of the
1 31 following:
1 32 a. Issue a statement of principles of sound tax policy.
1 33 (1) In issuing the statement, the committee may consult with
1 34 the department of revenue, the legislative services agency,
1 35 and independent experts who have demonstrated expertise in
2 1 matters of tax policy, fiscal policy, and public finance such
2 2 as that typically found among tax attorneys, certified public
2 3 accountants, and faculty members at institutions of higher
2 4 learning in the state.
2 5 (2) The statement shall reflect to the extent practicable
2 6 the best practices of state and local taxation as recognized
2 7 by experts in the fields of economics, fiscal policy, law,
2 8 accounting, and public finance.
2 9 (3) The statement shall address issues of equity,
2 10 simplicity, competitiveness, public purpose, and adequacy as
2 11 those issues pertain to taxation in Iowa.
2 12 b. Evaluate any tax expenditure available under Iowa law
2 13 and assess its conformance with the statement of principles of
2 14 sound tax policy issued pursuant to paragraph "a". For purposes
2 15 of this section, "tax expenditure" means an exclusion from
2 16 the operation or collection of a tax imposed in this state.
2 17 Tax expenditures include tax credits, exemptions, deductions,
2 18 and rebates. Tax expenditures also include sales tax refunds
2 19 issued pursuant to section 423.3 or section 423.4.
2 20 c. Establish and maintain a system for making available
2 21 to the public information about the amount and effectiveness
2 22 of tax expenditures, and the extent to which tax expenditures
2 23 comply with the statement of principles of sound tax policy.
2 24 2. Review of tax expenditures == budget estimates. The
2 25 legislative tax expenditure committee shall do all of the
2 26 following:
2 27 a. Engage in the regular review of the state's tax
2 28 expenditures.
2 29 (1) In reviewing tax expenditures, the committee may review
2 30 any tax expenditure at any time, but shall at a minimum perform
2 31 the reviews described in subsection 3.
2 32 (2) For each tax expenditure reviewed, the committee shall
2 33 submit a report to the legislative council containing the
2 34 results of the review. The report shall contain a statement
2 35 of the policy goals of the tax expenditure and a return on
3 1 investment calculation for the tax expenditure. For purposes
3 2 of this subparagraph, "return on investment calculation"
3 3 means analyzing the cost to the state of providing the tax
3 4 expenditure, analyzing the benefits realized by the state from
3 5 providing the tax expenditure, and reaching a conclusion as to
3 6 whether the benefits of the tax expenditure are worth the cost
3 7 to the state of providing the tax expenditure.
3 8 (3) The report described in subparagraph (2) may include
3 9 recommendations for better aligning tax expenditures with the
3 10 principles of sound tax policy issued pursuant to subsection 1.
3 11 b. (1) Estimate for each fiscal year, in conjunction with
3 12 the legislative services agency and the department of revenue,
3 13 the cost of each individual tax expenditure and the total cost
3 14 of all tax expenditures, and by December 15 provide those
3 15 estimates to the governor for use in the preparation of the
3 16 budget message under section 8.22 and to the general assembly
3 17 to be used in the budget process.
3 18 (2) The estimates provided pursuant to subparagraph (1) may
3 19 include the committee's recommendations for the imposition of a
3 20 limitation on a specified tax expenditure, a limitation on the
3 21 total amount of tax expenditures, or any other recommendation
3 22 for a specific tax expenditure or the program under which the
3 23 tax expenditure is provided.
3 24 3. Schedule of review of certain tax expenditures. The
3 25 committee shall review the following tax expenditures and
3 26 incentives according to the following schedule:
3 27 a. In 2011:
3 28 (1) The high quality jobs program under chapter 15,
3 29 subchapter II, part 13.
3 30 (2) The tax credits for increasing research activities
3 31 available under sections 15.335, 15A.9, 422.10, and 422.33.
3 32 b. In 2012:
3 33 (1) The Iowa fund of funds program in chapter 15E, division
3 34 VII.
3 35 (2) Property tax revenue divisions for urban renewal areas
4 1 under section 403.19.
4 2 (3) The targeted jobs withholding credits available under
4 3 section 403.19A.
4 4 (4) Funding of urban renewal projects with increased local
4 5 sales and services tax revenues under section 423B.10.
4 6 (5) School tuition organization tax credits under sections
4 7 422.11S and 422.33.
4 8 (6) Tuition and textbook tax credits under section 422.12.
4 9 c. In 2013:
4 10 (1) The child and dependent care and early childhood
4 11 development tax credits under section 422.12C.
4 12 (2) The endow Iowa tax credits authorized under section
4 13 15E.305.
4 14 d. In 2014:
4 15 (1) Tax credits for investments in qualifying businesses
4 16 and community=based seed capital funds under chapter 15E,
4 17 division V.
4 18 (2) Historic preservation and cultural and entertainment
4 19 district tax credits under chapter 404A.
4 20 (3) Wind energy production tax credits under chapter 476B.
4 21 (4) Renewable energy tax credits under chapter 476C.
4 22 e. In 2015:
4 23 (1) The agricultural assets transfer tax credit under
4 24 section 175.37.
4 25 (2) The claim of right tax credit under section 422.5.
4 26 (3) The reduction in allocating income to Iowa by S
4 27 corporation shareholders under section 422.8.
4 28 (4) The minimum tax credit under sections 422.11B, 422.33,
4 29 and 422.60.
4 30 (5) The assistive device corporate tax credit under section
4 31 422.33.
4 32 (6) The charitable conservation contribution tax credit
4 33 under sections 422.11W and 422.33.
4 34 (7) The motor vehicle fuel tax credit under section 422.110.
4 35 4. A tax expenditure or incentive reviewed pursuant to
5 1 subsection 3 shall be reviewed again not more than five years
5 2 after the tax expenditure or incentive was most recently
5 3 reviewed.
5 4 DIVISION III
5 5 MAXIMUM AGGREGATE TAX CREDIT LIMIT FOR CERTAIN ECONOMIC
5 6 DEVELOPMENT PROGRAMS
5 7 Sec. 4. Section 15.119, subsection 1, Code Supplement 2009,
5 8 is amended by striking the subsection and inserting in lieu
5 9 thereof the following:
5 10 1. a. Notwithstanding any provision to the contrary in any
5 11 of the programs listed in subsection 2, the department, except
5 12 as provided in paragraph "b", shall not authorize for any one
5 13 fiscal year an amount of tax credits for the programs specified
5 14 in subsection 2 that is in excess of one hundred twenty million
5 15 dollars.
5 16 b. The department may authorize an amount of tax credits
5 17 during a fiscal year that is in excess of the amount specified
5 18 in paragraph "a", but the amount of such excess shall be counted
5 19 against the total amount of tax credits that may be authorized
5 20 for the next fiscal year.
5 21 DIVISION IV
5 22 FILM PROGRAM SUSPENSION
5 23 Sec. 5. Section 15.393, Code Supplement 2009, is amended by
5 24 adding the following new subsection:
5 25 NEW SUBSECTION. 5. The department shall not register a new
5 26 project pursuant to this section until July 1, 2012.
5 27 Sec. 6. EFFECTIVE UPON ENACTMENT. This division of this
5 28 Act, being deemed of immediate importance, takes effect upon
5 29 enactment.
5 30 DIVISION V
5 31 SUPPLEMENTAL RESEARCH ACTIVITIES CREDIT
5 32 Sec. 7. Section 15.335, Code Supplement 2009, is amended to
5 33 read as follows:
5 34 15.335 Research activities credit.
5 35 1. a. An eligible business may claim a corporate tax credit
6 1 for increasing research activities in this state during the
6 2 period the eligible business is participating in the program.
6 3 b. For purposes of this section, "research activities"
6 4 includes the development and deployment of innovative renewable
6 5 energy generation components manufactured or assembled in this
6 6 state. For purposes of this section, "innovative renewable
6 7 energy generation components" does not include a component
6 8 with more than two hundred megawatts of installed effective
6 9 nameplate capacity.
6 10 c. The tax credits for innovative renewable energy
6 11 generation components shall not exceed two million dollars.
6 12 2. a. (1) The In the case of an eligible business whose
6 13 gross revenues do not exceed twenty million dollars per year,
6 14 the credit equals the sum of the following:
6 15 (a) (1) Six and one=half Ten percent of the excess of
6 16 qualified research expenses during the tax year over the base
6 17 amount for the tax year based upon the state's apportioned
6 18 share of the qualifying expenditures for increasing research
6 19 activities.
6 20 (b) (2) Six and one=half Ten percent of the basic research
6 21 payments determined under section 41(e)(1)(A) of the Internal
6 22 Revenue Code during the tax year based upon the state's
6 23 apportioned share of the qualifying expenditures for increasing
6 24 research activities.
6 25 b. In the case of an eligible business whose gross revenues
6 26 exceed twenty million dollars per year, the credit equals the
6 27 sum of the following:
6 28 (1) Three percent of the excess of qualified research
6 29 expenses during the tax year over the base amount for the tax
6 30 year based upon the state's apportioned share of the qualifying
6 31 expenditures for increasing research activities.
6 32 (2) Three percent of the basic research payments determined
6 33 under section 41(e)(1)(A) of the Internal Revenue Code during
6 34 the tax year based upon the state's apportioned share of the
6 35 qualifying expenditures for increasing research activities.
7 1 (2) 3. The For purposes of subsection 2, the state's
7 2 apportioned share of the qualifying expenditures for increasing
7 3 research activities is a percent equal to the ratio of
7 4 qualified research expenditures in this state to total
7 5 qualified research expenditures.
7 6 b.4. a. In lieu of the credit amount computed in
7 7 paragraph "a", subparagraph (1) subsection 2, an eligible
7 8 business may elect to compute the credit amount for qualified
7 9 research expenses incurred in this state in a manner consistent
7 10 with the alternative incremental credit described in section
7 11 41(c)(4) of the Internal Revenue Code. The taxpayer may make
7 12 this election regardless of the method used for the taxpayer's
7 13 federal income tax. The election made under this paragraph is
7 14 for the tax year and the taxpayer may use another or the same
7 15 method for any subsequent year.
7 16 c. b. For purposes of the alternate credit computation
7 17 method in paragraph "b" "a", the credit percentages applicable
7 18 to qualified research expenses described in clauses (i), (ii),
7 19 and (iii) of section 41(c)(4)(A) of the Internal Revenue Code
7 20 are one and sixty=five hundredths percent, two and twenty
7 21 hundredths percent, and two and seventy=five hundredths
7 22 percent, respectively. as follows:
7 23 (1) In the case of an eligible business whose gross revenues
7 24 do not exceed twenty million dollars per year, the credit
7 25 percentages are two and fifty=four hundredths percent, three
7 26 and thirty=eight hundredths percent, and four and twenty=three
7 27 hundredths percent, respectively.
7 28 (2) In the case of an eligible business whose gross revenues
7 29 exceed twenty million dollars per year, the credit percentages
7 30 are seventy=six hundredths percent, one and two hundredths
7 31 percent, and one and twenty=seven hundredths percent,
7 32 respectively.
7 33 2. 5. The credit allowed in this section is in addition
7 34 to the credit authorized in section 422.10 and section 422.33,
7 35 subsection 5. However, if the alternative credit computation
8 1 method is used in section 422.10 or section 422.33, subsection
8 2 5, the credit allowed in this section shall also be computed
8 3 using that method.
8 4 3. 6. If the eligible business is a partnership, S
8 5 corporation, limited liability company, or estate or trust
8 6 electing to have the income taxed directly to the individual,
8 7 an individual may claim the tax credit allowed. The amount
8 8 claimed by the individual shall be based upon the pro rata
8 9 share of the individual's earnings of the partnership, S
8 10 corporation, limited liability company, or estate or trust.
8 11 4. 7. a. For purposes of this section, "base amount",
8 12 "basic research payment", and "qualified research expense" mean
8 13 the same as defined for the federal credit for increasing
8 14 research activities under section 41 of the Internal Revenue
8 15 Code, except that for the alternative incremental credit such
8 16 amounts are for research conducted within this state.
8 17 b. For purposes of this section, "Internal Revenue Code"
8 18 means the Internal Revenue Code in effect on January 1, 2009.
8 19 5. 8. Any credit in excess of the tax liability for the
8 20 taxable year shall be refunded with interest computed under
8 21 section 422.25. In lieu of claiming a refund, a taxpayer may
8 22 elect to have the overpayment shown on its final, completed
8 23 return credited to the tax liability for the following year.
8 24 6. 9. The department of revenue shall by February 15
8 25 of each year issue an annual report to the general assembly
8 26 containing the total amount of all claims made by employers
8 27 under this section, and the portion of the claims issued as
8 28 refunds, for all claims processed during the previous calendar
8 29 year. The report shall contain the name of each claimant for
8 30 whom a tax credit in excess of five hundred thousand dollars
8 31 was issued and the amount of the credit received.
8 32 Sec. 8. APPLICABILITY. This division of this Act applies
8 33 to tax credits awarded under section 15.335 on or after July
8 34 1, 2010.
8 35 DIVISION VI
9 1 MAXIMUM AMOUNT OF ACCELERATED CAREER EDUCATION JOB CREDITS
9 2 Sec. 9. Section 260G.4B, subsection 1, Code 2009, is amended
9 3 to read as follows:
9 4 1. The total amount of program job credits from all
9 5 employers which shall be allocated for all accelerated career
9 6 education programs in the state in any one fiscal year shall
9 7 not exceed the sum of three million dollars in the fiscal
9 8 year beginning July 1, 2000, three million dollars in the
9 9 fiscal year beginning July 1, 2001, three million dollars
9 10 in the fiscal year beginning July 1, 2002, four million
9 11 dollars in the fiscal year beginning July 1, 2003, and six
9 12 million dollars in the fiscal year beginning July 1, 2004,
9 13 and every fiscal year thereafter five million four hundred
9 14 thousand dollars. Any increase in program job credits above
9 15 the six=million=dollar limitation per fiscal year shall be
9 16 developed, based on recommendations in a study conducted by
9 17 the department of economic development, pursuant to this
9 18 section, Code Supplement 2003, of the needs and performance of
9 19 approved programs in the fiscal years beginning July 1, 2000,
9 20 and July 1, 2001. A community college shall file a copy of
9 21 each agreement with the department of economic development.
9 22 The department shall maintain an annual record of the proposed
9 23 program job credits under each agreement for each fiscal year.
9 24 Upon receiving a copy of an agreement, the department shall
9 25 allocate any available amount of program job credits to the
9 26 community college according to the agreement sufficient for
9 27 the fiscal year and for the term of the agreement. When the
9 28 total available program job credits are allocated for a fiscal
9 29 year, the department shall notify all community colleges that
9 30 the maximum amount has been allocated and that further program
9 31 job credits will not be available for the remainder of the
9 32 fiscal year. Once program job credits have been allocated to
9 33 a community college, the full allocation shall be received by
9 34 the community college throughout the fiscal year and for the
9 35 term of the agreement even if the statewide program job credit
10 1 maximum amount is subsequently allocated and used.
10 2 DIVISION VII
10 3 MAXIMUM AMOUNT OF AGRICULTURAL ASSET TRANSFER TAX CREDITS
10 4 Sec. 10. Section 175.37, subsection 10, Code Supplement
10 5 2009, is amended to read as follows:
10 6 10. The amount of tax credit certificates that may be issued
10 7 pursuant to this section shall not exceed six two million
10 8 dollars in any fiscal year. The authority shall issue the tax
10 9 credit certificates on a first=come, first=served basis.
10 10 DIVISION VIII
10 11 ECONOMIC DEVELOPMENT REGION REVOLVING LOAN FUND TAX CREDIT
10 12 Sec. 11. Section 15E.231, subsection 2, Code Supplement
10 13 2009, is amended by striking the subsection.
10 14 Sec. 12. Section 15E.232, subsections 1 and 2, Code 2009,
10 15 are amended by striking the subsections.
10 16 Sec. 13. Section 422.33, subsection 17, Code Supplement
10 17 2009, is amended by striking the subsection.
10 18 Sec. 14. Section 422.60, subsection 9, Code Supplement
10 19 2009, is amended by striking the subsection.
10 20 Sec. 15. Section 533.329, subsection 2, paragraph k, Code
10 21 Supplement 2009, is amended by striking the paragraph.
10 22 Sec. 16. REPEAL. Sections 422.11K and 432.12F, Code 2009,
10 23 are repealed.
10 24 Sec. 17. RETROACTIVE APPLICABILITY. This division of this
10 25 Act applies retroactively to January 1, 2010, for tax years
10 26 beginning on or after that date.
10 27 DIVISION IX
10 28 MAXIMUM AMOUNT OF ENDOW IOWA TAX CREDITS
10 29 Sec. 18. Section 15E.305, subsection 2, unnumbered
10 30 paragraph 1, Code Supplement 2009, is amended to read as
10 31 follows:
10 32 The aggregate amount of tax credits authorized pursuant to
10 33 this section shall not exceed a total of three two million
10 34 seven hundred thousand dollars plus such additional credit
10 35 amount as provided by this section annually. The maximum
11 1 amount of tax credits granted to a taxpayer shall not exceed
11 2 five percent of the aggregate amount of tax credits authorized.
11 3 Sec. 19. EFFECTIVE UPON ENACTMENT. This division of this
11 4 Act, being deemed of immediate importance, takes effect upon
11 5 enactment.
11 6 Sec. 20. RETROACTIVE APPLICABILITY. This division of this
11 7 Act applies retroactively to January 1, 2010, for endow Iowa
11 8 tax credits authorized on or after that date.
11 9 DIVISION X
11 10 MAXIMUM AMOUNT OF SCHOOL TUITION ORGANIZATION TAX CREDITS
11 11 Sec. 21. Section 422.11S, subsection 7, paragraph a,
11 12 subparagraph (2), Code 2009, is amended to read as follows:
11 13 (2) "Total approved tax credits" means for the tax year
11 14 beginning in the 2006 calendar year, two million five hundred
11 15 thousand dollars, for the tax year beginning in the 2007
11 16 calendar year, five million dollars, and for tax years
11 17 beginning on or after January 1, 2008, seven 2011, six million
11 18 five seven hundred fifty thousand dollars.
11 19 DIVISION XI
11 20 VENTURE CAPITAL == IOWA FUND OF FUNDS
11 21 Sec. 22. Section 15E.66, subsections 1 and 7, Code 2009, are
11 22 amended to read as follows:
11 23 1. The board may issue certificates and related tax
11 24 credits to designated investors which, if redeemed for the
11 25 maximum possible amount, shall not exceed a total aggregate
11 26 of one hundred sixty million dollars of tax credits. The
11 27 certificates shall be issued contemporaneously with a
11 28 commitment to invest in the Iowa fund of funds by a designated
11 29 investor. A certificate issued by the board shall have a
11 30 specific maturity date or dates designated by the board and
11 31 shall be redeemable only in accordance with the contingencies
11 32 reflected on the certificate or incorporated therein by
11 33 reference. A certificate and the related tax credit shall be
11 34 transferable by the designated investor. A tax credit shall
11 35 not be claimed or redeemed except by a designated investor or
12 1 transferee in accordance with the terms of a certificate from
12 2 the board. A tax credit shall not be claimed for a tax year
12 3 that begins earlier than the maturity date or dates stated
12 4 on the certificate. An individual may claim the credit of a
12 5 partnership, limited liability company, S corporation, estate,
12 6 or trust electing to have the income taxed directly to the
12 7 individual. The amount claimed by the individual shall be
12 8 based upon the pro rata share of the individual's earnings from
12 9 the partnership, limited liability company, S corporation,
12 10 estate, or trust. Any tax credit in excess of the taxpayer's
12 11 tax liability for the tax year may be credited to the tax
12 12 liability for the following seven years, or until depleted,
12 13 whichever is earlier.
12 14 7. In determining the one hundred million dollar maximum
12 15 aggregate limit in subsection 1 and the twenty million
12 16 dollar fiscal year limitation in subsection 5, the board shall
12 17 use the cumulative amount of scheduled aggregate returns on
12 18 certificates issued by the board to designated investors.
12 19 However, certificates and related tax credits which have
12 20 expired shall not be included and certificates and related tax
12 21 credits which have been redeemed shall be included only to the
12 22 extent of tax credits actually allowed.
12 23 Sec. 23. EFFECTIVE UPON ENACTMENT. This division of this
12 24 Act, being deemed of immediate importance, takes effect upon
12 25 enactment.
12 26 DIVISION XII
12 27 VENTURE CAPITAL == INVESTMENT TAX CREDIT
12 28 Sec. 24. Section 422.33, subsection 13, Code Supplement
12 29 2009, is amended by striking the subsection.
12 30 Sec. 25. Section 422.60, subsection 6, Code Supplement
12 31 2009, is amended by striking the subsection.
12 32 Sec. 26. Section 533.329, subsection 2, paragraph i, Code
12 33 Supplement 2009, is amended by striking the paragraph.
12 34 Sec. 27. REPEAL. Sections 15E.51, 422.11G, and 432.12B,
12 35 Code 2009, are repealed.
13 1 Sec. 28. TAX CREDIT CERTIFICATE VALIDITY. Tax credit
13 2 certificates issued for future tax years for investments made
13 3 on or before July 1, 2010, under the provisions repealed in
13 4 this division of this Act are valid and may be claimed by a
13 5 taxpayer after the effective date of this division of this Act
13 6 in the tax year stated on the certificate.
13 7 DIVISION XIII
13 8 REFUNDABLE INVESTMENT TAX CREDITS FOR VALUE=ADDED AGRICULTURAL
13 9 PRODUCTS
13 10 Sec. 29. Section 15.333, subsection 3, Code Supplement
13 11 2009, is amended by striking the subsection.
13 12 Sec. 30. EFFECTIVE UPON ENACTMENT. This division of this
13 13 Act, being deemed of immediate importance, takes effect upon
13 14 enactment.
13 15 DIVISION XIV
13 16 MAXIMUM AMOUNT OF HISTORIC TAX CREDITS
13 17 Sec. 31. Section 404A.4, subsection 2, Code Supplement
13 18 2009, is amended by adding the following new paragraph:
13 19 NEW PARAGRAPH. d. For the fiscal year beginning July 1,
13 20 2012, and for each fiscal year thereafter, the department shall
13 21 reserve not more than forty=five million dollars worth of tax
13 22 credits for any one taxable year.
13 23 Sec. 32. Section 404A.4, subsection 4, paragraph a, Code
13 24 Supplement 2009, is amended to read as follows:
13 25 a. The total amount of tax credits that may be approved
13 26 for a fiscal year prior to the fiscal year beginning July
13 27 1, 2012, under this chapter shall not exceed fifty million
13 28 dollars. The total amount of tax credits that may be approved
13 29 for a fiscal year beginning on or after July 1, 2012, shall not
13 30 exceed forty=five million dollars.
13 31 DIVISION XV
13 32 ESTATE TAX REENACTED
13 33 Sec. 33. NEW SECTION. 451.1 Definitions.
13 34 As used in this chapter, unless the context otherwise
13 35 requires:
14 1 1. "Adjusted taxable estate" means the taxable estate
14 2 computed for federal estate tax purposes reduced by sixty
14 3 thousand dollars.
14 4 2. "Federal estate tax" means the tax imposed by the
14 5 provisions of the Federal Estate Tax Act.
14 6 3. "Federal Estate Tax Act" and all such similar terms,
14 7 means Title III of chapter 27 of the Acts of the Sixty=ninth
14 8 Congress of the United States, first session, appearing in
14 9 44 Statutes at Large, chapter 27, as of January 1, 2000, as
14 10 amended.
14 11 4. "Gross estate" means the gross estate as determined under
14 12 section 451.3.
14 13 5. "Internal Revenue Code" means the Internal Revenue Code
14 14 as of the implementation date of this chapter, as specified in
14 15 section 451.13.
14 16 6. "Iowa estate tax" means the tax imposed by this chapter.
14 17 7. "Month" means a calendar month.
14 18 8. "Net estate" means the net estate as determined under the
14 19 provisions of section 451.3.
14 20 9. "Personal representative" means the executor of the will
14 21 or administrator of the estate of the decedent, or if there
14 22 is no such executor or administrator appointed, qualified and
14 23 acting, then any person in actual or constructive possession of
14 24 any property included in the gross estate of the decedent.
14 25 Sec. 34. NEW SECTION. 451.2 Additional tax.
14 26 1. An amount equal to the federal estate tax credit for
14 27 state inheritance and estate taxes as allowed in the Internal
14 28 Revenue Code is imposed upon every transfer of the net estate
14 29 of every decedent being a resident of, or owning property in,
14 30 this state.
14 31 2. If the decedent is a resident of Iowa and all property
14 32 is located in Iowa, or is subject to the jurisdiction of the
14 33 courts of Iowa, an amount equal to the tax imposed under
14 34 subsection 1 shall be paid to the state of Iowa. If the
14 35 decedent is a nonresident or if property is located outside the
15 1 state of Iowa and not subject to jurisdiction of Iowa courts,
15 2 the tax shall be prorated on the basis that the Iowa property
15 3 bears to the total gross estate for federal tax purposes.
15 4 3. The total tax or the Iowa share of the total tax shall be
15 5 credited with the amount of any inheritance tax due the state
15 6 of Iowa as provided in chapter 450.
15 7 Sec. 35. NEW SECTION. 451.3 Gross and net estate.
15 8 The gross estate shall be the same as finally determined for
15 9 federal estate tax and the net estate shall be the gross estate
15 10 less deductions as permitted by federal law, in arriving at the
15 11 net taxable federal estate, all determined as provided in the
15 12 Internal Revenue Code.
15 13 Sec. 36. NEW SECTION. 451.4 Tax on net estate.
15 14 The tax imposed by this chapter shall be upon the transfer
15 15 of the total net estate of every decedent dying after the
15 16 implementation date of this chapter as provided in section
15 17 451.13.
15 18 Sec. 37. NEW SECTION. 451.5 Duty of personal
15 19 representative.
15 20 The personal representative of a decedent whose estate may
15 21 be subject to the tax imposed by this chapter, shall file
15 22 in the office of the director of revenue, on or before the
15 23 last day of the ninth month after the death of the decedent,
15 24 duplicate copies of the estate tax return provided for in the
15 25 Federal Estate Tax Act, and in like manner, duplicate copies
15 26 of all supplemental or amended returns. The values of all
15 27 items included in the gross estate, as shown by those returns,
15 28 or supplemental or amended returns, shall be considered as
15 29 the values of those items for the purposes of this chapter.
15 30 In case of revaluation or correction of valuation of any of
15 31 those items, either by supplemental or amended returns, or
15 32 by the federal commissioner of internal revenue, or by an
15 33 appellate tribunal by which the value is finally determined,
15 34 the corrected values shall be considered as the values of those
15 35 items for the purposes of this chapter.
16 1 Sec. 38. NEW SECTION. 451.6 Payment of tax.
16 2 The tax imposed by this chapter shall be paid by the personal
16 3 representative to the department of revenue on or before the
16 4 last day of the ninth month after the death of the decedent.
16 5 Sec. 39. NEW SECTION. 451.7 Disposal of tax.
16 6 The proceeds of this tax shall be paid into the general fund
16 7 of the state.
16 8 Sec. 40. NEW SECTION. 451.8 Claim for credit or refund.
16 9 If the personal representative of a resident decedent
16 10 shall have paid to the treasurer of the United States or
16 11 to a collector of internal revenue an estate tax under the
16 12 provisions of the Federal Estate Tax Act in respect of property
16 13 included in the gross estate, determined as herein provided,
16 14 and shall have claimed as credits or deductions against the
16 15 federal estate tax a sum less than the maximum credits or
16 16 deductions allowed by the provisions of the Federal Estate Tax
16 17 Act for any estate, inheritance, legacy or succession taxes
16 18 actually paid to any state or territory of the United States,
16 19 or to the District of Columbia, it shall be the personal
16 20 representative's duty, with due diligence, to file in the
16 21 bureau of internal revenue a claim for credit or refund for
16 22 such amount, if any, as such estate shall be properly entitled
16 23 to receive under the provisions of the Federal Estate Tax Act
16 24 and of this chapter.
16 25 Sec. 41. NEW SECTION. 451.9 Appeal.
16 26 If any claim for refund or credit, or any part thereof,
16 27 shall be denied or disallowed by the commissioner of internal
16 28 revenue, the personal representative, the director of revenue,
16 29 or any person having an interest in said estate which may be
16 30 adversely affected by such denial or disallowance, may apply
16 31 to the judge of the court having jurisdiction of such estate,
16 32 for an order directing such personal representative to take,
16 33 perfect, and prosecute an appeal from the decision of the
16 34 commissioner of internal revenue to such court or tribunal as
16 35 may have jurisdiction of such matter, and, upon the granting
17 1 of such order, the director of revenue may assist in the
17 2 prosecution of such appeal. The judge of the court granting
17 3 such order may make a reasonable allowance for attorney fees
17 4 for the prosecution of such appeal, and direct the manner in
17 5 which the same, together with any other costs or expenses which
17 6 may be allowed by said court in connection therewith, shall be
17 7 paid.
17 8 Sec. 42. NEW SECTION. 451.10 Effect of allowance.
17 9 If any claim for credit or refund, or any part thereof, shall
17 10 be finally determined in favor of such personal representative,
17 11 any amount refunded or credited thereon shall inure to the
17 12 benefit of such estate.
17 13 Sec. 43. NEW SECTION. 451.11 Effect of disallowance.
17 14 If any claim for credit or refund or any part thereof,
17 15 shall be finally determined adversely to such personal
17 16 representative, for any reason other than lack of diligence or
17 17 other failure of duty on the personal representative's part,
17 18 the amount so denied or disallowed, or so much thereof as
17 19 shall have been paid to the department of revenue under the
17 20 provisions of this chapter, shall, upon a claim duly filed
17 21 with, and proper showing made to, the director of revenue,
17 22 be refunded by the department of revenue to such personal
17 23 representative, and shall inure to the benefit of such estate.
17 24 Sec. 44. NEW SECTION. 451.12 Applicable statutes
17 25 penalties.
17 26 All the provisions of chapter 450 with respect to the lien
17 27 provisions of section 450.7, and the determination, imposition,
17 28 payment, and collection of the tax imposed under that chapter,
17 29 including penalty and interest upon delinquent taxes and the
17 30 confidentiality of the tax return, are applicable to this
17 31 chapter, except as they are in conflict with this chapter. The
17 32 exceptions to the lien provisions found in section 450.7 do
17 33 not apply to this chapter. The penalty provisions set out in
17 34 section 450.53 shall apply to a person in possession of assets
17 35 to be reported for purposes of taxation who willfully makes a
18 1 false or fraudulent return or willfully fails to pay the tax,
18 2 supply the information, make, sign, or file the required return
18 3 within the time required by law or a person who willfully
18 4 attempts in any manner to evade taxes imposed by this chapter
18 5 or avoid payment of the tax. The director of revenue shall
18 6 adopt rules necessary for the enforcement of this chapter.
18 7 Sec. 45. NEW SECTION. 451.13 Contingent implementation
18 8 == applicability.
18 9 1. This chapter shall be implemented as of the date on
18 10 which a provision of the Internal Revenue Code providing for
18 11 a credit against federal estate taxes owed for the amount of
18 12 state inheritance and estate taxes paid, pursuant to chapter
18 13 450 and this chapter, is applicable.
18 14 2. This chapter applies to the estates of persons dying on
18 15 or after the implementation date specified in subsection 1.
18 16 CONFORMING AMENDMENTS
18 17 Sec. 46. Section 12.71, subsection 8, Code 2009, is amended
18 18 to read as follows:
18 19 8. Bonds issued under the provisions of this section are
18 20 declared to be issued for a general public and governmental
18 21 purpose and all bonds issued under this section shall be exempt
18 22 from taxation by the state of Iowa and the interest on the
18 23 bonds shall be exempt from the state income tax and the state
18 24 inheritance and estate tax.
18 25 Sec. 47. Section 12.80, subsection 3, Code 2009, is amended
18 26 to read as follows:
18 27 3. Bonds issued under this section are declared to be
18 28 issued for an essential public and governmental purpose and all
18 29 bonds issued under this section shall be exempt from taxation
18 30 by the state of Iowa and the interest on the bonds shall be
18 31 exempt from the state income tax and the state inheritance and
18 32 estate tax.
18 33 Sec. 48. Section 12.81, subsection 8, Code 2009, is amended
18 34 to read as follows:
18 35 8. Bonds issued under the provisions of this section are
19 1 declared to be issued for a general public and governmental
19 2 purpose and all bonds issued under this section shall be exempt
19 3 from taxation by the state of Iowa and the interest on the
19 4 bonds shall be exempt from the state income tax and the state
19 5 inheritance and estate tax.
19 6 Sec. 49. Section 12.87, subsection 8, Code Supplement 2009,
19 7 is amended to read as follows:
19 8 8. Any bonds issued and sold under the provisions of this
19 9 section are declared to be issued and sold for an essential
19 10 public and governmental purpose, and all bonds issued and sold
19 11 under this section except as otherwise provided in any trust
19 12 indentures, resolutions, or other instruments authorizing their
19 13 issuance shall be exempt from taxation by the state of Iowa and
19 14 the interest on the bonds shall be exempt from the state income
19 15 tax and the state inheritance and estate tax.
19 16 Sec. 50. Section 12.90A, subsection 9, Code Supplement
19 17 2009, is amended to read as follows:
19 18 9. Annual appropriation bonds issued under this section are
19 19 declared to be issued for an essential public and governmental
19 20 purpose and all annual appropriation bonds issued under this
19 21 section shall be exempt from taxation by the state of Iowa
19 22 and the interest on the annual appropriation bonds shall be
19 23 exempt from the state income tax and the state inheritance and
19 24 estate tax.
19 25 Sec. 51. Section 12.91, subsection 9, Code 2009, is amended
19 26 to read as follows:
19 27 9. Bonds issued under the provisions of this section are
19 28 declared to be issued for a general public and governmental
19 29 purpose and all bonds issued under this section shall be exempt
19 30 from taxation by the state of Iowa and the interest on the
19 31 bonds shall be exempt from the state income tax and the state
19 32 inheritance and estate tax.
19 33 Sec. 52. Section 16.177, subsection 8, Code 2009, is amended
19 34 to read as follows:
19 35 8. Bonds issued under this section are declared to be
20 1 issued for an essential public and governmental purpose and all
20 2 bonds issued under this section shall be exempt from taxation
20 3 by the state of Iowa and the interest on the bonds shall be
20 4 exempt from the state income tax and the state inheritance and
20 5 estate tax.
20 6 Sec. 53. Section 321.47, subsection 2, Code 2009, is amended
20 7 to read as follows:
20 8 2. The persons entitled under the laws of descent and
20 9 distribution of an intestate's property to the possession
20 10 and ownership of a vehicle owned in whole or in part by a
20 11 decedent, upon filing an affidavit stating the name and date of
20 12 death of the decedent, the right to possession and ownership
20 13 of the persons filing the affidavit, and that there has been
20 14 no administration of the decedent's estate, which instrument
20 15 shall also contain an agreement to indemnify creditors of
20 16 the decedent who would be entitled to levy execution upon
20 17 the motor vehicle to the extent of the value of the motor
20 18 vehicle, are entitled upon fulfilling the other requirements of
20 19 this chapter, to the issuance of a registration card for the
20 20 interest of the decedent in the vehicle and a certificate of
20 21 title to it. If a decedent dies testate, and either the will is
20 22 not probated or is admitted to probate without administration,
20 23 the persons entitled to the possession and ownership of a
20 24 vehicle owned in whole or in part by the decedent may file
20 25 an affidavit and, upon fulfilling the other requirements of
20 26 this chapter, are entitled to the issuance of a registration
20 27 card for the interest of the decedent in the vehicle and a
20 28 certificate of title to the vehicle. The affidavit shall
20 29 contain the same information and indemnity agreement as is
20 30 required in cases of intestacy pursuant to this section. A
20 31 requirement of chapter 450 or 451 shall not be considered
20 32 satisfied by the filing of the affidavit provided for in this
20 33 section. If, from the records in the office of the county
20 34 treasurer, there appear to be any liens on the vehicle, the
20 35 certificate of title shall contain a statement of the liens
21 1 unless the application is accompanied by proper evidence of
21 2 their satisfaction or extinction. Evidence of extinction
21 3 may consist of, but is not limited to, an affidavit of the
21 4 applicant stating that a security interest was foreclosed as
21 5 provided in chapter 554, article 9, part 6.
21 6 Sec. 54. Section 421.60, subsection 2, paragraph c,
21 7 unnumbered paragraph 1, Code 2009, is amended to read as
21 8 follows:
21 9 If the notice of assessment or denial of a claim for refund
21 10 relates to a tax return filed pursuant to section 422.14 or
21 11 chapter 450 or, 450A, or 451, by the taxpayer which designates
21 12 an individual as an authorized representative of the taxpayer
21 13 with respect to that return, or if a power of attorney has been
21 14 filed with the department by the taxpayer which designates an
21 15 individual as an authorized representative of the taxpayer with
21 16 respect to any tax that is included in the notice of assessment
21 17 or denial of a claim for refund, a copy of the notice together
21 18 with any additional information required to be sent to the
21 19 taxpayer shall be sent to the authorized representative as
21 20 well.
21 21 Sec. 55. Section 450.7, subsection 2, unnumbered paragraph
21 22 1, Code Supplement 2009, is amended to read as follows:
21 23 Notice of the lien is not required to be recorded. The
21 24 rights of the state under the lien have priority over all
21 25 subsequent mortgages, purchases, or judgment creditors; and a
21 26 conveyance after the decedent's death of the property subject
21 27 to a lien does not discharge the property except as otherwise
21 28 provided in this chapter. However, if additional tax is
21 29 determined to be owing under this chapter or chapter 451 after
21 30 the lien has been released under paragraph "a" or "b", the lien
21 31 does not have priority over subsequent mortgages, purchases,
21 32 or judgment creditors unless notice of the lien is recorded in
21 33 the office of the recorder of the county where the estate is
21 34 probated, or where the property is located if the estate has
21 35 not been administered. The department of revenue may release
22 1 the lien by filing in the office of the clerk of the court in
22 2 the county where the property is located, the decedent owner
22 3 died, or the estate is pending or was administered, one of the
22 4 following:
22 5 Sec. 56. Section 450.68, subsection 1, paragraph b, Code
22 6 Supplement 2009, is amended to read as follows:
22 7 b. Federal tax returns, copies of returns, return
22 8 information as defined in section 6103(b) of the Internal
22 9 Revenue Code, and state inheritance tax returns, which are
22 10 required to be filed with the department for the enforcement
22 11 of the inheritance and estate tax laws of this state, shall be
22 12 deemed and held as confidential by the department. However,
22 13 such returns or return information may be disclosed by the
22 14 director to officers or employees of other state agencies,
22 15 subject to the same confidentiality restrictions imposed on the
22 16 officers and employees of the department.
22 17 Sec. 57. Section 455G.6, subsection 14, Code Supplement
22 18 2009, is amended to read as follows:
22 19 14. Bonds issued under the provisions of this section are
22 20 declared to be issued for an essential public and governmental
22 21 purpose and all bonds issued under this chapter shall be exempt
22 22 from taxation by the state of Iowa and the interest on the
22 23 bonds shall be exempt from the state income tax and the state
22 24 inheritance and estate tax.
22 25 Sec. 58. Section 463C.12, subsection 8, Code 2009, is
22 26 amended to read as follows:
22 27 8. Tax=exempt bonds issued by the authority in connection
22 28 with the program, which are exempt from taxation for federal
22 29 tax purposes, are also exempt from taxation by the state of
22 30 Iowa and the interest on these bonds is exempt from state
22 31 income taxes and state inheritance and estate taxes.
22 32 Sec. 59. Section 524.1406, subsection 3, paragraph a, Code
22 33 2009, is amended to read as follows:
22 34 a. Notwithstanding any contrary provision in chapter
22 35 490, division XIII, in determining the fair value of the
23 1 shareholder's shares of a bank organized under this chapter
23 2 or a bank holding company as defined in section 524.1801 in a
23 3 transaction or event in which the shareholder is entitled to
23 4 appraisal rights, due consideration shall be given to valuation
23 5 factors recognized for federal and estate tax purposes,
23 6 including discounts for minority interests and discounts
23 7 for lack of marketability. However, any payment made to
23 8 shareholders under section 490.1324 shall be in an amount not
23 9 less than the stockholders' equity in the bank disclosed in its
23 10 last statement of condition filed under section 524.220 or the
23 11 total equity capital of the bank holding company disclosed in
23 12 the most recent report filed by the bank holding company with
23 13 the board of governors of the federal reserve system, divided
23 14 by the number of shares outstanding.
23 15 Sec. 60. Section 633.436, subsection 1, unnumbered
23 16 paragraph 1, Code 2009, is amended to read as follows:
23 17 Except as provided in sections 633.211 and 633.212, shares
23 18 of the distributees shall abate, for the payment of debts and
23 19 charges, federal and state estate taxes, legacies, the shares
23 20 of children born or adopted after the making of a will, or the
23 21 share of the surviving spouse who elects to take against the
23 22 will, without any preference or priority as between real and
23 23 personal property, in the following order:
23 24 Sec. 61. Section 633.449, Code 2009, is amended to read as
23 25 follows:
23 26 633.449 Payment of federal estate taxes.
23 27 All federal estate taxes, distinguished from state
23 28 inheritance and estate taxes, owing by the estate of a decedent
23 29 shall be paid from the property of the estate, unless the will
23 30 of the decedent, or other trust instrument, provides expressly
23 31 to the contrary.
23 32 Sec. 62. Section 633A.4703, unnumbered paragraph 1, Code
23 33 2009, is amended to read as follows:
23 34 Except as otherwise provided by the governing instrument,
23 35 where necessary to abate shares of the beneficiaries of a trust
24 1 for the payment of debts and charges, federal and state estate
24 2 taxes, bequests, the share of the surviving spouse who takes
24 3 an elective share, and the shares of children born or adopted
24 4 after the execution of the trust, abatement shall occur in the
24 5 following order:
24 6 DIVISION XVI
24 7 ENTERPRISE ZONES INTERIM STUDY COMMITTEE
24 8 Sec. 63. ENTERPRISE ZONES INTERIM STUDY COMMITTEE.
24 9 1. The legislative council is requested to establish an
24 10 interim study committee to evaluate the effectiveness of Iowa's
24 11 enterprise zone program and make recommendations on the future
24 12 of the program. In conducting the study, the committee shall
24 13 review the original policy goals of the program, the amount of
24 14 state assistance provided under the program, and the benefits
24 15 realized by the state through the administration of the
24 16 program, and shall reach a conclusion as to whether the amount
24 17 of assistance provided has been in proportion to the benefits
24 18 realized.
24 19 2. The committee shall be composed of ten members of the
24 20 general assembly. Five members shall be members of the senate,
24 21 three of whom shall be appointed by the majority leader of the
24 22 senate, and two of whom shall be appointed by the minority
24 23 leader of the senate. Five members shall be members of the
24 24 house of representatives, three of whom shall be appointed
24 25 by the speaker of the house of representatives, and two of
24 26 whom shall be appointed by the minority leader of the house of
24 27 representatives.
24 28 3. The study committee shall issue a report to the general
24 29 assembly containing its findings and recommendations by January
24 30 15, 2011.
24 31 DIVISION XVII
24 32 INDUSTRIAL NEW JOBS TRAINING INTERIM STUDY COMMITTEE
24 33 Sec. 64. INDUSTRIAL NEW JOBS TRAINING INTERIM STUDY
24 34 COMMITTEE.
24 35 1. The legislative council is requested to establish an
25 1 interim study committee to evaluate the effectiveness of Iowa's
25 2 industrial new jobs training program and make recommendations
25 3 on the future of the program. In conducting the study,
25 4 the committee shall review the original policy goals of the
25 5 program, the amount of state assistance provided under the
25 6 program, and the benefits realized by the state through the
25 7 administration of the program, and shall reach a conclusion
25 8 as to whether the amount of assistance provided has been in
25 9 proportion to the benefits realized. The review shall also
25 10 include an examination of the efficiency of the bonding and
25 11 withholding credit financing mechanisms used in the programs
25 12 as well as the administrative and training costs entailed in
25 13 the operation of the program.
25 14 2. The committee shall be composed of ten members of the
25 15 general assembly. Five members shall be members of the senate,
25 16 three of whom shall be appointed by the majority leader of the
25 17 senate, and two of whom shall be appointed by the minority
25 18 leader of the senate. Five members shall be members of the
25 19 house of representatives, three of whom shall be appointed
25 20 by the speaker of the house of representatives, and two of
25 21 whom shall be appointed by the minority leader of the house of
25 22 representatives.
25 23 3. The study committee shall issue a report to the general
25 24 assembly containing its findings and recommendations by January
25 25 15, 2011.
25 26 EXPLANATION
25 27 This bill relates to the administration and review of
25 28 certain tax credit, withholding credit, division of revenue,
25 29 and other financial assistance programs.
25 30 Division I of the bill expresses the intent and purposes of
25 31 the bill.
25 32 Division II of the bill creates a legislative tax
25 33 expenditure committee within the legislative council. The
25 34 committee is composed of 10 members of the general assembly,
25 35 five members from each house, appointed by the legislative
26 1 council. Of the five members from each house, three members
26 2 must be from the majority party and two from the minority
26 3 party.
26 4 The committee has a number of duties. The committee is
26 5 required to issue a statement of principles of sound tax
26 6 policy. In issuing the statement, the committee may consult
26 7 with the department of revenue, the legislative services
26 8 agency, and independent experts who have demonstrated expertise
26 9 in matters of tax policy, fiscal policy, and public finance.
26 10 The statement must reflect to the extent practicable the best
26 11 practices of state and local taxation as recognized by experts
26 12 in the fields of economics, fiscal policy, law, accounting, and
26 13 public finance. The statement must address issues of equity,
26 14 simplicity, competitiveness, public purpose, and adequacy as
26 15 those issues pertain to taxation in Iowa.
26 16 The committee must evaluate the tax expenditures available
26 17 under Iowa law and assess their conformance with the statement
26 18 of principles of sound tax policy. "Tax expenditure" is
26 19 defined to mean an exclusion from the operation or collection
26 20 of a tax imposed in this state. Tax expenditures include tax
26 21 credits, exemptions, deductions, and rebates. Tax expenditures
26 22 also include sales tax refunds issued pursuant to Code section
26 23 423.3 or Code section 423.4.
26 24 The committee must establish and maintain a system for
26 25 making available to the public information about the amount and
26 26 effectiveness of tax expenditures and the extent to which tax
26 27 expenditures comply with the statement of principles of sound
26 28 tax policy.
26 29 The committee must engage in the regular review of the
26 30 state's tax expenditures. In reviewing tax expenditures, the
26 31 committee may review any tax expenditure at any time, but shall
26 32 at a minimum perform certain reviews according to a schedule
26 33 prescribed by statute. For each tax expenditure reviewed,
26 34 the committee must submit a report to the legislative council
26 35 containing the results of the review. The report must contain
27 1 a statement of the policy goals of the tax expenditure and
27 2 a return on investment calculation for the tax expenditure.
27 3 "Return on investment calculation" is defined to mean analyzing
27 4 the cost to the state of providing the tax expenditure,
27 5 analyzing the benefits realized by the state from providing
27 6 the tax expenditure, and reaching a conclusion as to whether
27 7 the benefits of the tax expenditure are worth the cost to the
27 8 state of providing it. The committee's report may also include
27 9 recommendations for better aligning tax expenditures with
27 10 principles of sound tax policy.
27 11 The committee must also estimate for each fiscal year,
27 12 in conjunction with the legislative services agency and
27 13 the department of revenue, the cost of each individual tax
27 14 expenditure and the total cost of all tax expenditures, and by
27 15 December 15 provide those estimates to the governor for use
27 16 in the preparation of the budget message under Code section
27 17 8.22 and to the general assembly to be used in the budget
27 18 process. The estimates provided may include the committee's
27 19 recommendations for the imposition of a limitation on a
27 20 specified tax expenditure, a limitation on the total amount of
27 21 tax expenditures, or any other recommendation for a specific
27 22 tax expenditure or the program under which the tax expenditure
27 23 is provided.
27 24 Division III of the bill reduces the amount of tax credits
27 25 that the department of economic development is allowed to
27 26 authorize for certain programs each year from $185 million to
27 27 $120 million, except as otherwise provided in the division.
27 28 Division IV of the bill prevents the department of economic
27 29 development from registering any new projects under the film,
27 30 television, and video project promotion program until July 1,
27 31 2012. The division takes effect upon enactment.
27 32 Division V modifies the amount of the additional research
27 33 activities credit in Code section 15.335. Currently, the
27 34 amount of the credit is 6.5 percent of research expenditures.
27 35 The division provides that for businesses with annual gross
28 1 revenues less than $20 million, the credit amount is 10
28 2 percent. For businesses with annual gross revenues greater
28 3 than $20 million, the amount of the credit is 3 percent.
28 4 Division V also modifies the percentages applicable to the
28 5 alternative incremental credit calculation available under the
28 6 additional research activities tax credit. For businesses with
28 7 annual gross revenues of $20 million or less, the percentages
28 8 are 2.54 percent, 3.38 percent, and 4.23 percent. For
28 9 businesses with annual gross revenues greater than $20 million,
28 10 the applicable percentages are 0.76 percent, 1.02 percent, and
28 11 1.27 percent. Division V applies to tax credits awarded under
28 12 Code section 15.335 on or after July 1, 2010.
28 13 Division VI of the bill reduces the maximum amount of
28 14 statewide program job credits that may be allocated to
28 15 community colleges under the accelerated career education
28 16 program in any one fiscal year to $5.4 million. The maximum
28 17 amount is currently $6 million.
28 18 Division VII of the bill reduces the maximum amount of
28 19 agricultural asset transfer tax credits that may be issued
28 20 in any one fiscal year to $2 million. The maximum amount is
28 21 currently $6 million.
28 22 Division VIII of the bill eliminates the economic
28 23 development region revolving loan fund tax credit program. The
28 24 division applies retroactively to January 1, 2010, for tax
28 25 years beginning on or after that date.
28 26 Division IX of the bill reduces the maximum amount of tax
28 27 credits that may be issued under the Endow Iowa program to $2.7
28 28 million. The maximum amount is currently $3 million. The
28 29 division is effective upon enactment and applies retroactively
28 30 to January 1, 2010.
28 31 Division X of the bill reduces the maximum amount of school
28 32 tuition organization tax credits that may be issued to $6.75
28 33 million. The maximum amount is currently $7.5 million.
28 34 Division XI reduces the maximum aggregate amount of tax
28 35 credits that may be issued under the Iowa fund of funds program
29 1 to $60 million. Currently, $100 million may be issued under
29 2 the program. The division takes effect upon enactment.
29 3 Division XII eliminates the venture capital fund investment
29 4 tax credit and makes conforming amendments. The division does
29 5 not affect the validity of tax credit certificates issued for
29 6 future years which may still be outstanding after enactment of
29 7 the bill.
29 8 Division XIII of the bill eliminates the refundability
29 9 of certain tax credits for value=added agricultural products
29 10 available under the investment tax credit in Code section
29 11 15.333. The division takes effect upon enactment.
29 12 Division XIV of the bill reduces the amount of historic
29 13 preservation and cultural and entertainment district tax
29 14 credits that can be reserved under Code chapter 404A from $50
29 15 million per year to $45 million. The reductions only impact
29 16 years in which the department has not yet approved projects
29 17 under the program.
29 18 Division XV of the bill relates to estate taxes. In
29 19 2001, Congress enacted the Economic Growth and Tax Relief
29 20 Reconciliation Act (EGTRRA) which reduced the federal estate
29 21 tax rates and increased the exemption level for estates for tax
29 22 years 2002 through 2009. In 2010, EGTRRA repeals the federal
29 23 estate tax completely. EGTRRA also phased out the tax credits
29 24 for state inheritance and estate taxes in 25 percent increments
29 25 between 2002 and 2005. Until 2008, Iowa had an estate tax,
29 26 the base and the amount of which were calculated based on the
29 27 federal tax credits phased out in EGTRRA. This type of tax was
29 28 referred to as a "pick=up tax". In 2008, Iowa's estate tax was
29 29 eliminated. This bill reenacts the estate tax, including the
29 30 base and amount calculations specified in the Internal Revenue
29 31 Code. The Code chapter reenacting the estate tax shall not be
29 32 implemented unless the federal tax credits are reenacted as
29 33 well.
29 34 Division XVI of the bill requests the legislative council
29 35 to establish an interim study committee to evaluate and make
30 1 recommendations regarding the enterprise zone program.
30 2 Division XVII of the bill requests the legislative council
30 3 to establish an interim study committee to evaluate and make
30 4 recommendations regarding the industrial new jobs training
30 5 program.
LSB 5795HV (1) 83
tw/sc
Text: HF2526
Text: HF2528