Senate File 2380     

                            AN ACT
RELATING TO TAXATION, INCLUDING THE ADMINISTRATION AND
   REVIEW OF CERTAIN ECONOMIC DEVELOPMENT PROGRAMS AND CERTAIN
   TAX INCENTIVE PROGRAMS AND THE REENACTMENT OF THE ESTATE
   TAX AND INCLUDING EFFECTIVE DATE AND RETROACTIVE AND OTHER
   APPLICABILITY PROVISIONS.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
                          DIVISION I
            REVIEW AND REAUTHORIZATION OF PROGRAMS
   Section 1.  INTENT AND PURPOSE.
   1.  It is the intent of the general assembly that each tax
credit, withholding credit, and revenue division program should
effectuate the purposes for which it was enacted and that the
cost of such programs should be included more readily in the
yearly budgeting process.
   2.  The purposes of this Act are to provide for the regular
review of all tax credit, withholding credit, and revenue
division programs in order to facilitate the reauthorization
of successful programs and to do so at a cost that can be
accommodated by the state's annual budget.
                          DIVISION II
             LEGISLATIVE TAX EXPENDITURE COMMITTEE
   Sec. 2.  Section 2.45, Code Supplement 2009, is amended by
adding the following new subsection:
   NEW SUBSECTION.  5.  a.  The legislative tax expenditure
committee which shall be composed of ten members of the general
assembly, consisting of five members from each house, to be
appointed by the legislative council. In appointing the five
members of each house to the committee, the council shall
 appoint three members from the majority party and two members
from the minority party.
   b.  The legislative tax expenditure committee shall have the
powers and duties described in section 2.48.
   Sec. 3.  NEW SECTION.  2.48  Legislative tax expenditure
committee == review of tax incentive programs.
   1.  Duties of committee.  The legislative tax expenditure
committee shall do all of the following:
   a.  Evaluate any tax expenditure available under Iowa law and
assess its equity, simplicity, competitiveness, public purpose,
adequacy, and extent of conformance with the original purposes
of the legislation that enacted the tax expenditure, as those
issues pertain to taxation in Iowa. For purposes of this
section, "tax expenditure" means an exclusion from the operation
or collection of a tax imposed in this state. Tax expenditures
include tax credits, exemptions, deductions, and rebates. Tax
expenditures also include sales tax refunds issued pursuant to
section 423.3 or section 423.4.
   b.  Establish and maintain a system for making available
to the public information about the amount and effectiveness
of tax expenditures, and the extent to which tax expenditures
comply with the original intent of the legislation that enacted
the tax expenditure.
   2.  Review of tax expenditures == budget estimates.  The
legislative tax expenditure committee shall do all of the
following:
   a.  Engage in the regular review of the state's tax
expenditures.
   (1)  In reviewing tax expenditures, the committee may review
any tax expenditure at any time, but shall at a minimum perform
the reviews described in subsection 3.
   (2)  For each tax expenditure reviewed, the committee shall
submit a report to the legislative council containing the
results of the review. The report shall contain a statement
of the policy goals of the tax expenditure and a return on
investment calculation for the tax expenditure. For purposes
of this subparagraph, "return on investment calculation"
means analyzing the cost to the state of providing the tax
expenditure, analyzing the benefits realized by the state from
providing the tax expenditure, and reaching a conclusion as to
whether the benefits of the tax expenditure are worth the cost
to the state of providing the tax expenditure.
   (3)  The report described in subparagraph (2) may include
recommendations for better aligning tax expenditures with
the original intent of the legislation that enacted the tax
expenditure.
   b.  (1)  Estimate for each fiscal year, in conjunction with
the legislative services agency and the department of revenue,
the cost of each individual tax expenditure and the total cost
of all tax expenditures, and by December 15 provide those
estimates to the governor for use in the preparation of the
budget message under section 8.22 and to the general assembly
to be used in the budget process.
   (2)  The estimates provided pursuant to subparagraph (1) may
include the committee's recommendations for the imposition of a
limitation on a specified tax expenditure, a limitation on the
total amount of tax expenditures, or any other recommendation
for a specific tax expenditure or the program under which the
tax expenditure is provided.
   3.  Schedule of review of all tax expenditures.  The committee
shall review the following tax expenditures and incentives
according to the following schedule:
   a.  In 2011:
   (1)  The high quality jobs program under chapter 15,
subchapter II, part 13.
   (2)  The tax credits for increasing research activities
available under sections 15.335, 15A.9, 422.10, and 422.33.
   (3)  The franchise tax credits available under sections
422.11 and 422.33.
   (4)  The earned income tax credit available under section
422.12B.
   b.  In 2012:
   (1)  The Iowa fund of funds program in chapter 15E, division
VII.
   (2)  Property tax revenue divisions for urban renewal areas
under section 403.19.
   (3)  The targeted jobs withholding credits available under
section 403.19A.
   (4)  Funding of urban renewal projects with increased local
sales and services tax revenues under section 423B.10.
   (5)  School tuition organization tax credits under sections
422.11S and 422.33.
   (6)  Tuition and textbook tax credits under section 422.12.
   c.  In 2013:
   (1)  The child and dependent care and early childhood
development tax credits under section 422.12C.
   (2)  The endow Iowa tax credits authorized under section
15E.305.
   (3)  The redevelopment tax credits available under section
15.293A.
   (4)  The disaster recovery housing tax credits available
under sections 16.211 and 16.212.
   (5)  The tax credits available for film, television, and
video project promotion under section 15.393.
   d.  In 2014:
   (1)  Tax credits for investments in qualifying businesses
and community=based seed capital funds under chapter 15E,
division V.
   (2)  Historic preservation and cultural and entertainment
district tax credits under chapter 404A.
   (3)  Wind energy production tax credits under chapter 476B.
   (4)  Renewable energy tax credits under chapter 476C.
   (5)  The ethanol promotion tax credits available under
section 422.11N.
   (6)  The E=85 gasoline promotion tax credits available under
section 422.11O.
   (7)  The biodiesel blended fuel tax credits available under
section 422.11P.
   e.  In 2015:
   (1)  The agricultural assets transfer tax credit under
section 175.37.
   (2)  The claim of right tax credit under section 422.5.
   (3)  The reduction in allocating income to Iowa by S
corporation shareholders under section 422.8.
   (4)  The minimum tax credit under sections 422.11B, 422.33,
and 422.60.
   (5)  The assistive device corporate tax credit under section
422.33.
   (6)  The charitable conservation contribution tax credit
under sections 422.11W and 422.33.
   (7)  The motor vehicle fuel tax credit under section 422.110.
   (8)  The new jobs tax credits available under section
422.11A.
   (9)  The financial assistance available under the enterprise
zones program in chapter 15E, division XVIII.
   4.  A tax expenditure or incentive reviewed pursuant to
subsection 3 shall be reviewed again not more than five years
after the tax expenditure or incentive was most recently
reviewed.
                         DIVISION III
   MAXIMUM AGGREGATE TAX CREDIT LIMIT FOR CERTAIN ECONOMIC
                     DEVELOPMENT PROGRAMS
   Sec. 4.  Section 15.119, subsection 1, Code Supplement 2009,
is amended by striking the subsection and inserting in lieu
thereof the following:
   1.  a.  Notwithstanding any provision to the contrary in any
of the programs listed in subsection 2, the department, except
as provided in paragraph "b", shall not authorize for any one
fiscal year an amount of tax credits for the programs specified
in subsection 2 that is in excess of one hundred twenty million
dollars.
   b.  The department may authorize an amount of tax credits
during a fiscal year that is in excess of the amount specified
in paragraph "a", but the amount of such excess shall be counted
against the total amount of tax credits that may be authorized
for the next fiscal year.
                          DIVISION IV
                    FILM PROGRAM SUSPENSION
   Sec. 5.  Section 15.393, Code Supplement 2009, is amended by
adding the following new subsection:
   NEW SUBSECTION.  5.  The department shall not register a new
project pursuant to this section until July 1, 2013.
   Sec. 6.  EFFECTIVE UPON ENACTMENT.  This division of this
Act, being deemed of immediate importance, takes effect upon
enactment.
                          DIVISION V
            SUPPLEMENTAL RESEARCH ACTIVITIES CREDIT
   Sec. 7.  Section 15.335, Code Supplement 2009, is amended to
read as follows:
   15.335  Research activities credit.
   1.  a.  An eligible business may claim a corporate tax credit
for increasing research activities in this state during the
period the eligible business is participating in the program.
   b.  For purposes of this section, "research activities"
includes the development and deployment of innovative renewable
energy generation components manufactured or assembled in this
state. For purposes of this section, "innovative renewable
energy generation components" does not include a component
with more than two hundred megawatts of installed effective
nameplate capacity.
   c.  The tax credits for innovative renewable energy
generation components shall not exceed two million dollars.
   2.  a.  (1)  The In the case of an eligible business whose
gross revenues do not exceed twenty million dollars per year,
the credit equals the sum of the following:
   (a)  (1)  Six and one=half Ten percent of the excess of
qualified research expenses during the tax year over the base
amount for the tax year based upon the state's apportioned
share of the qualifying expenditures for increasing research
activities.
   (b)  (2)  Six and one=half Ten percent of the basic research
payments determined under section 41(e)(1)(A) of the Internal
Revenue Code during the tax year based upon the state's
apportioned share of the qualifying expenditures for increasing
research activities.
   b.  In the case of an eligible business whose gross revenues
exceed twenty million dollars per year, the credit equals the
sum of the following:
   (1)  Three percent of the excess of qualified research
expenses during the tax year over the base amount for the tax
year based upon the state's apportioned share of the qualifying
expenditures for increasing research activities.
   (2)  Three percent of the basic research payments determined
under section 41(e)(1)(A) of the Internal Revenue Code during
the tax year based upon the state's apportioned share of the
qualifying expenditures for increasing research activities.
   (2)  3.  The For purposes of subsection 2, the state's
apportioned share of the qualifying expenditures for increasing
research activities is a percent equal to the ratio of
qualified research expenditures in this state to total
qualified research expenditures.
   b.4.  a.  In lieu of the credit amount computed in
paragraph "a", subparagraph (1) subsection 2, an eligible
business may elect to compute the credit amount for qualified
research expenses incurred in this state in a manner consistent
with the alternative incremental credit described in section
41(c)(4) of the Internal Revenue Code. The taxpayer may make
this election regardless of the method used for the taxpayer's
federal income tax. The election made under this paragraph is
for the tax year and the taxpayer may use another or the same
method for any subsequent year.
   c.  b.  For purposes of the alternate credit computation
method in paragraph "b" "a", the credit percentages applicable
to qualified research expenses described in clauses (i), (ii),
and (iii) of section 41(c)(4)(A) of the Internal Revenue Code
are one and sixty=five hundredths percent, two and twenty
hundredths percent, and two and seventy=five hundredths
percent, respectively. as follows:
   (1)  In the case of an eligible business whose gross revenues
do not exceed twenty million dollars per year, the credit
percentages are two and fifty=four hundredths percent, three
and thirty=eight hundredths percent, and four and twenty=three
hundredths percent, respectively.
   (2)  In the case of an eligible business whose gross revenues
exceed twenty million dollars per year, the credit percentages
are seventy=six hundredths percent, one and two hundredths
percent, and one and twenty=seven hundredths percent,
respectively.
   2.  5.  The credit allowed in this section is in addition
to the credit authorized in section 422.10 and section 422.33,
subsection 5. However, if the alternative credit computation
method is used in section 422.10 or section 422.33, subsection
5, the credit allowed in this section shall also be computed
using that method.
   3.  6.  If the eligible business is a partnership, S
corporation, limited liability company, or estate or trust
electing to have the income taxed directly to the individual,
an individual may claim the tax credit allowed. The amount
claimed by the individual shall be based upon the pro rata
share of the individual's earnings of the partnership, S
corporation, limited liability company, or estate or trust.
   4.  7.  a.  For purposes of this section, "base amount",
"basic research payment", and "qualified research expense" mean
the same as defined for the federal credit for increasing
research activities under section 41 of the Internal Revenue
Code, except that for the alternative incremental credit such
amounts are for research conducted within this state.
   b.  For purposes of this section, "Internal Revenue Code"
means the Internal Revenue Code in effect on January 1, 2009.
   5.  8.  Any credit in excess of the tax liability for the
taxable year shall be refunded with interest computed under
section 422.25. In lieu of claiming a refund, a taxpayer may
elect to have the overpayment shown on its final, completed
return credited to the tax liability for the following year.
   6.  9.  The department of revenue shall by February 15
of each year issue an annual report to the general assembly
containing the total amount of all claims made by employers
under this section, and the portion of the claims issued as
refunds, for all claims processed during the previous calendar
year. The report shall contain the name of each claimant for
whom a tax credit in excess of five hundred thousand dollars
was issued and the amount of the credit received.
   Sec. 8.  APPLICABILITY.  This division of this Act applies
to tax credits awarded under section 15.335 on or after July
1, 2010.
                          DIVISION VI
  MAXIMUM AMOUNT OF ACCELERATED CAREER EDUCATION JOB CREDITS
   Sec. 9.  Section 260G.4B, subsection 1, Code 2009, is amended
to read as follows:
   1.  The total amount of program job credits from all
employers which shall be allocated for all accelerated career
education programs in the state in any one fiscal year shall
not exceed the sum of three million dollars in the fiscal
year beginning July 1, 2000, three million dollars in the
fiscal year beginning July 1, 2001, three million dollars
in the fiscal year beginning July 1, 2002, four million
dollars in the fiscal year beginning July 1, 2003, and six
million dollars in the fiscal year beginning July 1, 2004,
and every fiscal year thereafter five million four hundred
thousand dollars. Any increase in program job credits above
the six=million=dollar limitation per fiscal year shall be
developed, based on recommendations in a study conducted by
the department of economic development, pursuant to this
section, Code Supplement 2003, of the needs and performance of
approved programs in the fiscal years beginning July 1, 2000,
and July 1, 2001. A community college shall file a copy of
each agreement with the department of economic development.
The department shall maintain an annual record of the proposed
program job credits under each agreement for each fiscal year.
Upon receiving a copy of an agreement, the department shall
allocate any available amount of program job credits to the
community college according to the agreement sufficient for
the fiscal year and for the term of the agreement. When the
total available program job credits are allocated for a fiscal
year, the department shall notify all community colleges that
the maximum amount has been allocated and that further program
job credits will not be available for the remainder of the
fiscal year. Once program job credits have been allocated to
a community college, the full allocation shall be received by
the community college throughout the fiscal year and for the
term of the agreement even if the statewide program job credit
maximum amount is subsequently allocated and used.
                         DIVISION VII
  ECONOMIC DEVELOPMENT REGION REVOLVING LOAN FUND TAX CREDIT
   Sec. 10.  Section 15E.231, subsection 2, Code Supplement
2009, is amended by striking the subsection.
   Sec. 11.  Section 15E.232, subsections 1 and 2, Code 2009,
are amended by striking the subsections.
   Sec. 12.  Section 422.33, subsection 17, Code Supplement
2009, is amended by striking the subsection.
   Sec. 13.  Section 422.60, subsection 9, Code Supplement
2009, is amended by striking the subsection.
   Sec. 14.  Section 533.329, subsection 2, paragraph k, Code
Supplement 2009, is amended by striking the paragraph.
   Sec. 15.  REPEAL.  Sections 422.11K and 432.12F, Code 2009,
are repealed.
   Sec. 16.  RETROACTIVE APPLICABILITY.  This division of this
Act applies retroactively to January 1, 2010, for tax years
beginning on or after that date.
                         DIVISION VIII
           MAXIMUM AMOUNT OF ENDOW IOWA TAX CREDITS
   Sec. 17.  Section 15E.305, subsection 2, unnumbered
paragraph 1, Code Supplement 2009, is amended to read as
follows:
   The aggregate amount of tax credits authorized pursuant to
this section shall not exceed a total of three two million
seven hundred thousand dollars plus such additional credit
amount as provided by this section annually. The maximum
amount of tax credits granted to a taxpayer shall not exceed
five percent of the aggregate amount of tax credits authorized.
   Sec. 18.  EFFECTIVE UPON ENACTMENT.  This division of this
Act, being deemed of immediate importance, takes effect upon
enactment.
   Sec. 19.  RETROACTIVE APPLICABILITY.  This division of this
Act applies retroactively to January 1, 2010, for endow Iowa
tax credits authorized on or after that date.
                          DIVISION IX
             VENTURE CAPITAL == IOWA FUND OF FUNDS
   Sec. 20.  Section 15E.66, subsections 1 and 7, Code 2009, are
amended to read as follows:
   1.  The board may issue certificates and related tax
credits to designated investors which, if redeemed for the
maximum possible amount, shall not exceed a total aggregate
of one hundred sixty million dollars of tax credits. The
certificates shall be issued contemporaneously with a
commitment to invest in the Iowa fund of funds by a designated
investor. A certificate issued by the board shall have a
specific maturity date or dates designated by the board and
shall be redeemable only in accordance with the contingencies
reflected on the certificate or incorporated therein by
reference. A certificate and the related tax credit shall be
transferable by the designated investor. A tax credit shall
not be claimed or redeemed except by a designated investor or
transferee in accordance with the terms of a certificate from
the board. A tax credit shall not be claimed for a tax year
that begins earlier than the maturity date or dates stated
on the certificate. An individual may claim the credit of a
partnership, limited liability company, S corporation, estate,
or trust electing to have the income taxed directly to the
individual. The amount claimed by the individual shall be
based upon the pro rata share of the individual's earnings from
the partnership, limited liability company, S corporation,
estate, or trust. Any tax credit in excess of the taxpayer's
tax liability for the tax year may be credited to the tax
liability for the following seven years, or until depleted,
whichever is earlier.
   7.  In determining the one hundred million dollar maximum
aggregate limit in subsection 1 and the twenty million
dollar fiscal year limitation in subsection 5, the board shall
use the cumulative amount of scheduled aggregate returns on
certificates issued by the board to designated investors.
However, certificates and related tax credits which have
expired shall not be included and certificates and related tax
credits which have been redeemed shall be included only to the
extent of tax credits actually allowed.
   Sec. 21.  EFFECTIVE UPON ENACTMENT.  This division of this
Act, being deemed of immediate importance, takes effect upon
enactment.
                          DIVISION X
           VENTURE CAPITAL == INVESTMENT TAX CREDIT
   Sec. 22.  Section 422.33, subsection 13, Code Supplement
2009, is amended by striking the subsection.
   Sec. 23.  Section 422.60, subsection 6, Code Supplement
2009, is amended by striking the subsection.
   Sec. 24.  Section 533.329, subsection 2, paragraph i, Code
Supplement 2009, is amended by striking the paragraph.
   Sec. 25.  REPEAL.  Sections 15E.51, 422.11G, and 432.12B,
Code 2009, are repealed.
   Sec. 26.  TAX CREDIT CERTIFICATE VALIDITY.  Tax credit
certificates issued for future tax years for investments made
on or before July 1, 2010, under the provisions repealed in
this division of this Act are valid and may be claimed by a
taxpayer after the effective date of this division of this Act
in the tax year stated on the certificate.
                          DIVISION XI
REFUNDABLE INVESTMENT TAX CREDITS FOR VALUE=ADDED AGRICULTURAL
                           PRODUCTS
   Sec. 27.  Section 15.333, subsection 3, Code Supplement
2009, is amended by striking the subsection.
   Sec. 28.  EFFECTIVE UPON ENACTMENT.  This division of this
Act, being deemed of immediate importance, takes effect upon
enactment.
                         DIVISION XII
            MAXIMUM AMOUNT OF HISTORIC TAX CREDITS
   Sec. 29.  Section 404A.4, subsection 2, Code Supplement
2009, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  d.  For the fiscal year beginning July 1,
2012, and for each fiscal year thereafter, the department shall
reserve not more than forty=five million dollars worth of tax
credits for any one taxable year.
   Sec. 30.  Section 404A.4, subsection 4, paragraph a, Code
Supplement 2009, is amended to read as follows:
   a.  The total amount of tax credits that may be approved
for a fiscal year prior to the fiscal year beginning July
1, 2012, under this chapter shall not exceed fifty million
dollars.  The total amount of tax credits that may be approved
for a fiscal year beginning on or after July 1, 2012, shall not
exceed forty=five million dollars.
                         DIVISION XIII
                     ESTATE TAX REENACTED
   Sec. 31.  NEW SECTION.  451.1  Definitions.
   As used in this chapter, unless the context otherwise
requires:
   1.  "Adjusted taxable estate" means the taxable estate
computed for federal estate tax purposes reduced by sixty
thousand dollars.
   2.  "Federal estate tax" means the tax imposed by the
provisions of the Federal Estate Tax Act.
   3.  "Federal Estate Tax Act" and all such similar terms,
means Title III of chapter 27 of the Acts of the Sixty=ninth
Congress of the United States, first session, appearing in
44 Statutes at Large, chapter 27, as of January 1, 2000, as
amended.
   4.  "Gross estate" means the gross estate as determined under
section 451.3.
   5.  "Internal Revenue Code" means the Internal Revenue Code
as of the implementation date of this chapter, as specified in
section 451.13.
   6.  "Iowa estate tax" means the tax imposed by this chapter.
   7.  "Month" means a calendar month.
   8.  "Net estate" means the net estate as determined under the
provisions of section 451.3.
   9.  "Personal representative" means the executor of the will
or administrator of the estate of the decedent, or if there
is no such executor or administrator appointed, qualified and
acting, then any person in actual or constructive possession of
any property included in the gross estate of the decedent.
   Sec. 32.  NEW SECTION.  451.2  Additional tax.
   1.  An amount equal to the federal estate tax credit for
state inheritance and estate taxes as allowed in the Internal
Revenue Code is imposed upon every transfer of the net estate
of every decedent being a resident of, or owning property in,
this state.
   2.  If the decedent is a resident of Iowa and all property
is located in Iowa, or is subject to the jurisdiction of the
courts of Iowa, an amount equal to the tax imposed under
subsection 1 shall be paid to the state of Iowa.  If the
decedent is a nonresident or if property is located outside the
state of Iowa and not subject to jurisdiction of Iowa courts,
the tax shall be prorated on the basis that the Iowa property
bears to the total gross estate for federal tax purposes.
   3.  The total tax or the Iowa share of the total tax shall be
credited with the amount of any inheritance tax due the state
of Iowa as provided in chapter 450.
   Sec. 33.  NEW SECTION.  451.3  Gross and net estate.
   The gross estate shall be the same as finally determined for
federal estate tax and the net estate shall be the gross estate
less deductions as permitted by federal law, in arriving at the
net taxable federal estate, all determined as provided in the
Internal Revenue Code.
   Sec. 34.  NEW SECTION.  451.4  Tax on net estate.
   The tax imposed by this chapter shall be upon the transfer
of the total net estate of every decedent dying after the
implementation date of this chapter as provided in section
451.13.
   Sec. 35.  NEW SECTION.  451.5  Duty of personal
representative.
   The personal representative of a decedent whose estate may
be subject to the tax imposed by this chapter, shall file
in the office of the director of revenue, on or before the
last day of the ninth month after the death of the decedent,
duplicate copies of the estate tax return provided for in the
Federal Estate Tax Act, and in like manner, duplicate copies
of all supplemental or amended returns.  The values of all
items included in the gross estate, as shown by those returns,
or supplemental or amended returns, shall be considered as
the values of those items for the purposes of this chapter.
In case of revaluation or correction of valuation of any of
those items, either by supplemental or amended returns, or
by the federal commissioner of internal revenue, or by an
appellate tribunal by which the value is finally determined,
the corrected values shall be considered as the values of those
items for the purposes of this chapter.
   Sec. 36.  NEW SECTION.  451.6  Payment of tax.
   The tax imposed by this chapter shall be paid by the personal
representative to the department of revenue on or before the
last day of the ninth month after the death of the decedent.
   Sec. 37.  NEW SECTION.  451.7  Disposal of tax.
   The proceeds of this tax shall be paid into the general fund
of the state.
   Sec. 38.  NEW SECTION.  451.8  Claim for credit or refund.
   If the personal representative of a resident decedent
shall have paid to the treasurer of the United States or
to a collector of internal revenue an estate tax under the
provisions of the Federal Estate Tax Act in respect of property
included in the gross estate, determined as herein provided,
and shall have claimed as credits or deductions against the
federal estate tax a sum less than the maximum credits or
deductions allowed by the provisions of the Federal Estate Tax
Act for any estate, inheritance, legacy or succession taxes
actually paid to any state or territory of the United States,
or to the District of Columbia, it shall be the personal
representative's duty, with due diligence, to file in the
bureau of internal revenue a claim for credit or refund for
such amount, if any, as such estate shall be properly entitled
to receive under the provisions of the Federal Estate Tax Act
and of this chapter.
   Sec. 39.  NEW SECTION.  451.9  Appeal.
   If any claim for refund or credit, or any part thereof,
shall be denied or disallowed by the commissioner of internal
revenue, the personal representative, the director of revenue,
or any person having an interest in said estate which may be
adversely affected by such denial or disallowance, may apply
to the judge of the court having jurisdiction of such estate,
for an order directing such personal representative to take,
perfect, and prosecute an appeal from the decision of the
commissioner of internal revenue to such court or tribunal as
may have jurisdiction of such matter, and, upon the granting
of such order, the director of revenue may assist in the
prosecution of such appeal.  The judge of the court granting
such order may make a reasonable allowance for attorney fees
for the prosecution of such appeal, and direct the manner in
which the same, together with any other costs or expenses which
may be allowed by said court in connection therewith, shall be
paid.
   Sec. 40.  NEW SECTION.  451.10  Effect of allowance.
   If any claim for credit or refund, or any part thereof, shall
be finally determined in favor of such personal representative,
any amount refunded or credited thereon shall inure to the
benefit of such estate.
   Sec. 41.  NEW SECTION.  451.11  Effect of disallowance.
   If any claim for credit or refund or any part thereof,
shall be finally determined adversely to such personal
representative, for any reason other than lack of diligence or
other failure of duty on the personal representative's part,
the amount so denied or disallowed, or so much thereof as
shall have been paid to the department of revenue under the
provisions of this chapter, shall, upon a claim duly filed
with, and proper showing made to, the director of revenue,
be refunded by the department of revenue to such personal
representative, and shall inure to the benefit of such estate.
   Sec. 42.  NEW SECTION.  451.12  Applicable statutes
 penalties.
   All the provisions of chapter 450 with respect to the lien
provisions of section 450.7, and the determination, imposition,
payment, and collection of the tax imposed under that chapter,
including penalty and interest upon delinquent taxes and the
confidentiality of the tax return, are applicable to this
chapter, except as they are in conflict with this chapter.  The
exceptions to the lien provisions found in section 450.7 do
not apply to this chapter.  The penalty provisions set out in
section 450.53 shall apply to a person in possession of assets
to be reported for purposes of taxation who willfully makes a
false or fraudulent return or willfully fails to pay the tax,
supply the information, make, sign, or file the required return
within the time required by law or a person who willfully
attempts in any manner to evade taxes imposed by this chapter
or avoid payment of the tax.  The director of revenue shall
adopt rules necessary for the enforcement of this chapter.
   Sec. 43.  NEW SECTION.  451.13  Contingent implementation
 == applicability.
   1.  This chapter shall be implemented as of the date on
which a provision of the Internal Revenue Code providing for
a credit against federal estate taxes owed for the amount of
state inheritance and estate taxes paid, pursuant to chapter
450 and this chapter, is applicable.
   2.  This chapter applies to the estates of persons dying on
or after the implementation date specified in subsection 1.
                     CONFORMING AMENDMENTS
   Sec. 44.  Section 12.71, subsection 8, Code 2009, is amended
to read as follows:
   8.  Bonds issued under the provisions of this section are
declared to be issued for a general public and governmental
purpose and all bonds issued under this section shall be exempt
from taxation by the state of Iowa and the interest on the
bonds shall be exempt from the state income tax and the state
inheritance and estate tax.
   Sec. 45.  Section 12.80, subsection 3, Code 2009, is amended
to read as follows:
   3.  Bonds issued under this section are declared to be
issued for an essential public and governmental purpose and all
bonds issued under this section shall be exempt from taxation
by the state of Iowa and the interest on the bonds shall be
exempt from the state income tax and the state inheritance and
estate tax.
   Sec. 46.  Section 12.81, subsection 8, Code 2009, is amended
to read as follows:
   8.  Bonds issued under the provisions of this section are
declared to be issued for a general public and governmental
purpose and all bonds issued under this section shall be exempt
from taxation by the state of Iowa and the interest on the
bonds shall be exempt from the state income tax and the state
inheritance and estate tax.
   Sec. 47.  Section 12.87, subsection 8, Code Supplement 2009,
is amended to read as follows:
   8.  Any bonds issued and sold under the provisions of this
section are declared to be issued and sold for an essential
public and governmental purpose, and all bonds issued and sold
under this section except as otherwise provided in any trust
indentures, resolutions, or other instruments authorizing their
issuance shall be exempt from taxation by the state of Iowa and
the interest on the bonds shall be exempt from the state income
tax and the state inheritance and estate tax.
   Sec. 48.  Section 12.90A, subsection 9, Code Supplement
2009, is amended to read as follows:
   9.  Annual appropriation bonds issued under this section are
declared to be issued for an essential public and governmental
purpose and all annual appropriation bonds issued under this
section shall be exempt from taxation by the state of Iowa
and the interest on the annual appropriation bonds shall be
exempt from the state income tax and the state inheritance and
estate tax.
   Sec. 49.  Section 12.91, subsection 9, Code 2009, is amended
to read as follows:
   9.  Bonds issued under the provisions of this section are
declared to be issued for a general public and governmental
purpose and all bonds issued under this section shall be exempt
from taxation by the state of Iowa and the interest on the
bonds shall be exempt from the state income tax and the state
inheritance and estate tax.
   Sec. 50.  Section 16.177, subsection 8, Code 2009, is amended
to read as follows:
   8.  Bonds issued under this section are declared to be
issued for an essential public and governmental purpose and all
bonds issued under this section shall be exempt from taxation
by the state of Iowa and the interest on the bonds shall be
exempt from the state income tax and the state inheritance and
estate tax.
   Sec. 51.  Section 321.47, subsection 2, Code 2009, is amended
to read as follows:
   2.  The persons entitled under the laws of descent and
distribution of an intestate's property to the possession
and ownership of a vehicle owned in whole or in part by a
decedent, upon filing an affidavit stating the name and date of
death of the decedent, the right to possession and ownership
of the persons filing the affidavit, and that there has been
no administration of the decedent's estate, which instrument
shall also contain an agreement to indemnify creditors of
the decedent who would be entitled to levy execution upon
the motor vehicle to the extent of the value of the motor
vehicle, are entitled upon fulfilling the other requirements of
this chapter, to the issuance of a registration card for the
interest of the decedent in the vehicle and a certificate of
title to it. If a decedent dies testate, and either the will is
not probated or is admitted to probate without administration,
the persons entitled to the possession and ownership of a
vehicle owned in whole or in part by the decedent may file
an affidavit and, upon fulfilling the other requirements of
this chapter, are entitled to the issuance of a registration
card for the interest of the decedent in the vehicle and a
certificate of title to the vehicle. The affidavit shall
contain the same information and indemnity agreement as is
required in cases of intestacy pursuant to this section. A
requirement of chapter 450 or 451 shall not be considered
satisfied by the filing of the affidavit provided for in this
section. If, from the records in the office of the county
treasurer, there appear to be any liens on the vehicle, the
certificate of title shall contain a statement of the liens
unless the application is accompanied by proper evidence of
their satisfaction or extinction. Evidence of extinction
may consist of, but is not limited to, an affidavit of the
applicant stating that a security interest was foreclosed as
provided in chapter 554, article 9, part 6.
   Sec. 52.  Section 421.60, subsection 2, paragraph c,
unnumbered paragraph 1, Code 2009, is amended to read as
follows:
   If the notice of assessment or denial of a claim for refund
relates to a tax return filed pursuant to section 422.14 or
chapter 450 or, 450A, or 451, by the taxpayer which designates
an individual as an authorized representative of the taxpayer
with respect to that return, or if a power of attorney has been
filed with the department by the taxpayer which designates an
individual as an authorized representative of the taxpayer with
respect to any tax that is included in the notice of assessment
or denial of a claim for refund, a copy of the notice together
with any additional information required to be sent to the
taxpayer shall be sent to the authorized representative as
well.
   Sec. 53.  Section 450.7, subsection 2, unnumbered paragraph
1, Code Supplement 2009, is amended to read as follows:
   Notice of the lien is not required to be recorded. The
rights of the state under the lien have priority over all
subsequent mortgages, purchases, or judgment creditors; and a
conveyance after the decedent's death of the property subject
to a lien does not discharge the property except as otherwise
provided in this chapter. However, if additional tax is
determined to be owing under this chapter or chapter 451 after
the lien has been released under paragraph "a" or "b", the lien
does not have priority over subsequent mortgages, purchases,
or judgment creditors unless notice of the lien is recorded in
the office of the recorder of the county where the estate is
probated, or where the property is located if the estate has
not been administered. The department of revenue may release
the lien by filing in the office of the clerk of the court in
the county where the property is located, the decedent owner
died, or the estate is pending or was administered, one of the
following:
   Sec. 54.  Section 450.68, subsection 1, paragraph b, Code
Supplement 2009, is amended to read as follows:
   b.  Federal tax returns, copies of returns, return
information as defined in section 6103(b) of the Internal
Revenue Code, and state inheritance tax returns, which are
required to be filed with the department for the enforcement
of the inheritance and estate tax laws of this state, shall be
deemed and held as confidential by the department. However,
such returns or return information may be disclosed by the
director to officers or employees of other state agencies,
subject to the same confidentiality restrictions imposed on the
officers and employees of the department.
   Sec. 55.  Section 455G.6, subsection 14, Code Supplement
2009, is amended to read as follows:
   14.  Bonds issued under the provisions of this section are
declared to be issued for an essential public and governmental
purpose and all bonds issued under this chapter shall be exempt
from taxation by the state of Iowa and the interest on the
bonds shall be exempt from the state income tax and the state
inheritance and estate tax.
   Sec. 56.  Section 463C.12, subsection 8, Code 2009, is
amended to read as follows:
   8.  Tax=exempt bonds issued by the authority in connection
with the program, which are exempt from taxation for federal
tax purposes, are also exempt from taxation by the state of
Iowa and the interest on these bonds is exempt from state
income taxes and state inheritance and estate taxes.
   Sec. 57.  Section 524.1406, subsection 3, paragraph a, Code
2009, is amended to read as follows:
   a.  Notwithstanding any contrary provision in chapter
490, division XIII, in determining the fair value of the
shareholder's shares of a bank organized under this chapter
or a bank holding company as defined in section 524.1801 in a
transaction or event in which the shareholder is entitled to
appraisal rights, due consideration shall be given to valuation
factors recognized for federal and estate tax purposes,
including discounts for minority interests and discounts
for lack of marketability. However, any payment made to
shareholders under section 490.1324 shall be in an amount not
less than the stockholders' equity in the bank disclosed in its
last statement of condition filed under section 524.220 or the
total equity capital of the bank holding company disclosed in
the most recent report filed by the bank holding company with
the board of governors of the federal reserve system, divided
by the number of shares outstanding.
   Sec. 58.  Section 633.436, subsection 1, unnumbered
paragraph 1, Code 2009, is amended to read as follows:
   Except as provided in sections 633.211 and 633.212, shares
of the distributees shall abate, for the payment of debts and
charges, federal and state estate taxes, legacies, the shares
of children born or adopted after the making of a will, or the
share of the surviving spouse who elects to take against the
will, without any preference or priority as between real and
personal property, in the following order:
   Sec. 59.  Section 633.449, Code 2009, is amended to read as
follows:
   633.449  Payment of federal estate taxes.
   All federal estate taxes, distinguished from state
inheritance and estate taxes, owing by the estate of a decedent
shall be paid from the property of the estate, unless the will
of the decedent, or other trust instrument, provides expressly
to the contrary.
   Sec. 60.  Section 633A.4703, unnumbered paragraph 1, Code
2009, is amended to read as follows:
   Except as otherwise provided by the governing instrument,
where necessary to abate shares of the beneficiaries of a trust
for the payment of debts and charges, federal and state estate
taxes, bequests, the share of the surviving spouse who takes
an elective share, and the shares of children born or adopted
after the execution of the trust, abatement shall occur in the
following order:
                         DIVISION XIV
           ENTERPRISE ZONES INTERIM STUDY COMMITTEE
   Sec. 61.  ENTERPRISE ZONES INTERIM STUDY COMMITTEE.
   1.  The legislative council is requested to establish an
interim study committee to evaluate the effectiveness of Iowa's
enterprise zone program and make recommendations on the future
of the program.  In conducting the study, the committee shall
review the original policy goals of the program, the amount of
state assistance provided under the program, and the benefits
realized by the state through the administration of the
program, and shall reach a conclusion as to whether the amount
of assistance provided has been in proportion to the benefits
realized.
   2.  The committee shall be composed of ten members of the
general assembly.  Five members shall be members of the senate,
three of whom shall be appointed by the majority leader of the
senate, and two of whom shall be appointed by the minority
leader of the senate.  Five members shall be members of the
house of representatives, three of whom shall be appointed by
the speaker of the house of representatives, and two of
 whom shall be appointed by the minority leader of the house of
representatives.
   3.  The study committee shall issue a report to the general
assembly containing its findings and recommendations by January
15, 2011.
                          DIVISION XV
     INDUSTRIAL NEW JOBS TRAINING INTERIM STUDY COMMITTEE
   Sec. 62.  INDUSTRIAL NEW JOBS TRAINING INTERIM STUDY
COMMITTEE.
   1.  The legislative council is requested to establish an
interim study committee to evaluate the effectiveness of Iowa's
industrial new jobs training program and make recommendations
on the future of the program.  In conducting the study,
the committee shall review the original policy goals of the
program, the amount of state assistance provided under the
program, and the benefits realized by the state through the
administration of the program, and shall reach a conclusion
as to whether the amount of assistance provided has been in
proportion to the benefits realized. The review shall also
include an examination of the efficiency of the bonding and
withholding credit financing mechanisms used in the programs
as well as the administrative and training costs entailed in
the operation of the program.
   2.  The committee shall be composed of ten members of the
general assembly.  Five members shall be members of the senate,
three of whom shall be appointed by the majority leader of the
senate, and two of whom shall be appointed by the minority
leader of the senate.  Five members shall be members of the
house of representatives, three of whom shall be appointed
by the speaker of the house of representatives, and two of
whom shall be appointed by the minority leader of the house of
representatives.
   3.  The study committee shall issue a report to the general
assembly containing its findings and recommendations by January
15, 2011.


                                                            
                              JOHN P. KIBBIE
                              President of the Senate


                                                            
                              PATRICK J. MURPHY
                              Speaker of the House
   I hereby certify that this bill originated in the Senate and
is known as Senate File 2380, Eighty=third General Assembly.


                                                            
                              MICHAEL E. MARSHALL
                              Secretary of the Senate
Approved                , 2010


                                                            
                              CHESTER J. CULVER
                              Governor

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