Text: HF808            Text: HF810
Complete Bill History


House File 809

HOUSE FILE BY COMMITTEE ON ECONOMIC GROWTH (SUCCESSOR TO HF 246) Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act establishing a tax credit certificate transfer program and 2 including a retroactive applicability provision. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 2053HV 82 5 tm/gg/14 PAG LIN 1 1 Section 1. NEW SECTION. 421.58 SALE OR TRANSFER OF NET 1 2 OPERATING LOSS CARRYOVER. 1 3 1. As used in this section, unless the context otherwise 1 4 requires: 1 5 a. "Biotechnology enterprise" means the same as defined in 1 6 section 15E.202. 1 7 b. "Department" means the department of revenue. 1 8 c. "Net operating loss" means the same as defined in 1 9 section 172 of the Internal Revenue Code. "Net operating 1 10 loss" may include up to a maximum salary allocation of one 1 11 hundred thirty percent of the average annual county wage. 1 12 d. "Targeted industry business" means the same as defined 1 13 in section 15E.223. 1 14 2. The department shall establish and administer a tax 1 15 credit certificate transfer program for purposes of allowing a 1 16 biotechnology enterprise or a targeted industry business with 1 17 seventy=five or fewer employees to transfer a tax credit 1 18 certificate to another taxpayer in return for private 1 19 financial assistance for a net operating loss carryover. 1 20 3. A biotechnology enterprise or a targeted industry 1 21 business with seventy=five or fewer employees that has a net 1 22 operating loss carryover in a single tax year may apply to the 1 23 department for the issuance of a tax credit certificate in the 1 24 amount of the loss carryover for sale under this section to a 1 25 qualifying, nonaffiliated business. Upon the department's 1 26 approval of an application, a tax credit certificate shall be 1 27 issued containing the taxpayer's name, address, tax 1 28 identification number, the amount of the tax credit, and other 1 29 information required by the department. The proceeds from the 1 30 sale of a tax credit shall be used by the biotechnology 1 31 enterprise or targeted industry business for expenses 1 32 including but not limited to the expenses of fixed assets such 1 33 as the acquisition, development, and construction of real 1 34 property, materials, salaries, and research and development 1 35 expenditures. 2 1 4. A taxpayer willing to enter into an agreement to 2 2 receive a tax credit certificate from a biotechnology 2 3 enterprise or a targeted industry business in exchange for 2 4 providing private financial assistance shall submit an 2 5 application to the department. The application to receive a 2 6 tax credit certificate shall identify the amount of private 2 7 financial assistance that the applicant is willing to provide 2 8 in exchange for a tax credit certificate. 2 9 5. For any tax year beginning on or after January 1, 2007, 2 10 a taxpayer willing to provide private financial assistance to 2 11 a biotechnology enterprise or targeted industry business in 2 12 exchange for a tax credit certificate may use the amount of 2 13 the tax credit transferred against the taxes imposed under 2 14 chapter 422, division II, III, or V, or chapter 432 for any 2 15 tax year the original transferor could have claimed the net 2 16 operating loss carryover. Any consideration received for the 2 17 transfer of the tax credit shall not be included as income 2 18 under chapter 422, division II, III, or V. Any consideration 2 19 paid for the transfer of a tax credit under this section shall 2 20 not be deducted from income under chapter 422, division II, 2 21 III, or V. Any tax credit in excess of the tax liability for 2 22 the tax year may be credited to the tax liability for the 2 23 following seven years or until depleted, whichever occurs 2 24 first. 2 25 6. The department shall adopt rules pursuant to chapter 2 26 17A to establish the procedures for the application, review, 2 27 selection, issuance, and transfer of tax credit certificates 2 28 and to provide for the method to be used to determine for 2 29 which fiscal year the tax credits are available. 2 30 7. The department or a designee shall match applications 2 31 submitted under this section in a manner that can best 2 32 stimulate and encourage the extension of private financial 2 33 assistance to biotechnology enterprises or targeted industry 2 34 businesses in the state. As part of approving an application, 2 35 the department shall require all of the following from 3 1 applicants: 3 2 a. A written agreement concerning the terms and conditions 3 3 of providing private financial assistance in exchange for a 3 4 tax credit certificate issued pursuant to this section. 3 5 b. Private financial assistance supplied by a taxpayer 3 6 must be equal to at least seventy=five percent of the value of 3 7 the tax credit certificate issued pursuant to this section. 3 8 c. Private financial assistance received under this 3 9 section shall be used for the operation or expansion of a 3 10 biotechnology enterprise or a targeted industry business. 3 11 8. The total amount of tax credits that may be approved 3 12 for a fiscal year under this section shall not exceed five 3 13 million dollars. A biotechnology enterprise or a targeted 3 14 industry business shall not receive more than five hundred 3 15 thousand dollars in any fiscal year of private financial 3 16 assistance under the program. Tax credits issued under this 3 17 section shall not be prorated. 3 18 9. A biotechnology enterprise or a targeted industry 3 19 business receiving private financial assistance under the 3 20 program shall not receive a wage=benefits tax credit under 3 21 section 15I.2. 3 22 Sec. 2. RETROACTIVE APPLICABILITY. This Act is 3 23 retroactively applicable to January 1, 2007, and is applicable 3 24 on and after that date. 3 25 EXPLANATION 3 26 This bill establishes a tax credit certificate transfer 3 27 program. 3 28 The bill requires the department of revenue to establish 3 29 and administer a tax credit certificate transfer program for 3 30 purposes of allowing a biotechnology enterprise or a targeted 3 31 industry business with 75 or fewer employees to transfer a tax 3 32 credit certificate to another taxpayer in return for private 3 33 financial assistance for a net operating loss carryover. 3 34 The bill allows a biotechnology enterprise or a targeted 3 35 industry business with 75 or fewer employees that has a net 4 1 operating loss carryover in a single tax year to apply to the 4 2 department for the issuance of a tax credit certificate in the 4 3 amount of the loss carryover for sale under the bill to a 4 4 qualifying, nonaffiliated business. The bill provides that 4 5 private financial assistance is to be used for expenses 4 6 including but not limited to the expenses of fixed assets such 4 7 as the acquisition, development, and construction of real 4 8 property, materials, salaries, and research and development 4 9 expenditures. 4 10 The bill requires that a taxpayer willing to provide 4 11 private financial assistance shall submit an application to 4 12 the department identifying the amount of private financial 4 13 assistance that the applicant is willing to provide. 4 14 The bill provides that, for any tax year beginning on or 4 15 after January 1, 2007, tax credits transferred under the 4 16 program may be used against personal and corporate income 4 17 taxes, against the franchise tax for financial institutions, 4 18 and against the insurance premium tax. The bill provides that 4 19 any consideration received for the transfer of a tax credit 4 20 shall not be considered income and any consideration paid for 4 21 the transfer shall not be deducted from income. The bill 4 22 allows any tax credit in excess of the tax liability for the 4 23 tax year to be credited to the tax liability for the following 4 24 seven years or until depleted, whichever occurs first. 4 25 The bill requires the department to match applications 4 26 submitted under the program in a manner that can best 4 27 stimulate and encourage the extension of private financial 4 28 assistance in the state. 4 29 The bill provides that the total amount of tax credits that 4 30 may be approved for transfer under the program for a fiscal 4 31 year shall not exceed $5 million and a biotechnology 4 32 enterprise or a targeted industry business shall not receive 4 33 more than $500,000 in any fiscal year of private financial 4 34 assistance under the program. 4 35 The bill prohibits a biotechnology enterprise or a targeted 5 1 industry business that receives private financial assistance 5 2 under the program from receiving a wage=benefits tax credit 5 3 under Code section 15I.2. 5 4 The bill is retroactively applicable to January 1, 2007. 5 5 LSB 2053HV 82 5 6 tm:rj/gg/14
Text: HF808            Text: HF810 Complete Bill History