Bill Text: IA HF2098 | 2017-2018 | 87th General Assembly | Introduced
Bill Title: A bill for an act creating the Iowa job training tax credit program and including applicability provisions.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2018-01-24 - Subcommittee: Vander Linden, Jacoby and Windschitl. H.J. 150. [HF2098 Detail]
Download: Iowa-2017-HF2098-Introduced.html
House File 2098 - Introduced HOUSE FILE BY JACOBY A BILL FOR 1 An Act creating the Iowa job training tax credit program and 2 including applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: TLSB 5074YH (4) 87 mm/jh PAG LIN 1 1 Section 1. NEW SECTION. 15C.1 Title. 1 2 This chapter shall be known and may cited as the "Iowa job 1 3 training tax credit program". 1 4 Sec. 2. NEW SECTION. 15C.2 Definitions. 1 5 For purposes of this chapter, unless the context otherwise 1 6 requires: 1 7 1. "Apprentice" means the same as defined in section 15B.2. 1 8 2. "Authority" means the economic development authority 1 9 created in section 15.105. 1 10 3. "Employ" or "employed" means to be hired or retained for 1 11 paid work as an apprentice or intern and to perform the duties 1 12 of an apprentice or intern. 1 13 4. "Intern" means an Iowa student engaged in an internship. 1 14 5. "Internship" means temporary employment of an Iowa 1 15 student that focuses on providing the student with work 1 16 experience in the student's field of study. 1 17 6. "Iowa student" means the same as defined in section 1 18 15.411, subsection 3, paragraph "a". 1 19 7. "Minimum training standards" means the minimum training 1 20 standards adopted by the authority by rule pursuant to section 1 21 15C.3, subsection 3. 1 22 8. "Program" means the job training tax credit program 1 23 credit in this chapter. 1 24 9. "Qualified trainee" means a person who meets the 1 25 requirements of section 15C.3, subsection 2, with respect to 1 26 a tax year. 1 27 10. "Tax year" means the calendar year, or the fiscal year 1 28 ending during such calendar year, upon the basis of which a tax 1 29 is calculated. 1 30 Sec. 3. NEW SECTION. 15C.3 Job training tax credit program 1 31 == application == eligibility requirements. 1 32 1. Program administration. The authority, in consultation 1 33 with the department of revenue, shall administer a job training 1 34 tax credit program to provide tax credits to businesses that 1 35 employ qualified trainees in Iowa during the tax year. 2 1 2. Qualified trainee. For purposes of the program, a person 2 2 is a qualified trainee of a business if the person meets all of 2 3 the following requirements for the tax year: 2 4 a. The person is an apprentice or an intern. 2 5 b. The person is employed by the business in Iowa. 2 6 c. The person satisfies the relevant minimum training 2 7 standard. 2 8 3. Minimum training standards. 2 9 a. The authority shall establish by rule minimum training 2 10 standards under the program for apprenticeships and internships 2 11 that will reflect the minimum amount of training necessary to 2 12 provide a meaningful work experience in the relevant field 2 13 of study of an intern or to learn the relevant trade or job 2 14 position of an apprentice. The minimum training standards 2 15 shall be a value expressed as a number of job training hours, 2 16 or a ratio of job training hours to work hours, or some 2 17 combination of both. 2 18 b. In determining the minimum training standards, the 2 19 authority shall consider the relevant field of study involved, 2 20 the trade or job position involved, the stated goals and length 2 21 of the internship or apprenticeship, and any other factors the 2 22 authority deems relevant. The authority may establish more 2 23 than one minimum training standard. 2 24 c. In establishing minimum training standards, the authority 2 25 may consult with any person the authority deems relevant, 2 26 including but not limited to the department of education, 2 27 institutions of higher learning, or business and labor 2 28 organizations. 2 29 4. Application. 2 30 a. A business employing one or more qualified trainees in 2 31 Iowa may apply to the authority for the job training tax credit 2 32 provided in section 15C.4. 2 33 b. The application shall be made in the manner and form 2 34 prescribed by the authority. 2 35 c. The authority may accept applications on a continuous 3 1 basis or may establish, by rule, an annual application 3 2 deadline. 3 3 d. The application shall include all of the following 3 4 information: 3 5 (1) A description of the business and the apprenticeship 3 6 program or internship program conducted by the business, 3 7 including the number of qualified trainees employed by the 3 8 business during the relevant tax year. 3 9 (2) With respect to each qualified trainee of the business: 3 10 (a) The identity of the qualified trainee, the period 3 11 of time the qualified trainee was employed by the business 3 12 during the tax year, and if relevant, the institution of higher 3 13 learning at which the qualified trainee is a student. 3 14 (b) A description of the qualified trainee's job duties and 3 15 the number of hours those job duties were performed. 3 16 (c) A description and total number of hours of job training 3 17 and instruction provided by the business to the qualified 3 18 trainee. 3 19 (d) A statement from the business certifying that the 3 20 apprentice or intern meets the relevant minimum training 3 21 standard for the relevant tax year. 3 22 (3) Any other information reasonably required by the 3 23 authority in order to establish and verify eligibility under 3 24 the program. 3 25 e. Upon receiving a complete and accurate application and 3 26 establishing that all requirements of the program have been 3 27 satisfied, the authority shall issue a tax credit and related 3 28 tax credit certificate to the business stating the amount of 3 29 job training tax credit under section 15C.4 the business may 3 30 claim. 3 31 Sec. 4. NEW SECTION. 15C.4 Job training tax credit. 3 32 1. a. A business that satisfies the requirements of the 3 33 job training tax credit program in section 15C.3 may claim a 3 34 tax credit in an amount equal to one thousand dollars for each 3 35 qualified trainee employed in Iowa by the taxpayer for the 4 1 entire tax year. 4 2 b. If the qualified trainee is not employed for the entire 4 3 tax year, the maximum amount of the credit shall be prorated 4 4 and the amount of the credit with regard to that qualified 4 5 trainee shall equal the maximum amount of credit for the tax 4 6 year, divided by twelve, multiplied by the number of months 4 7 in the tax year the qualified trainee was employed by the 4 8 taxpayer. The credit shall be rounded to the nearest dollar. 4 9 If the qualified trainee was employed during any part of the 4 10 month, the qualified trainee shall be considered a qualified 4 11 trainee for the entire month. 4 12 2. An individual may claim the tax credit allowed a 4 13 partnership, limited liability company, S corporation, 4 14 estate, or trust electing to have income taxed directly to 4 15 the individual. The amount claimed by the individual shall 4 16 be based upon the pro rata share of the individual's earnings 4 17 from the partnership, limited liability company, S corporation, 4 18 estate, or trust. 4 19 3. Any tax credit in excess of the taxpayer's liability 4 20 for the tax year is not refundable but may be credited to the 4 21 tax liability for the following seven years or until depleted, 4 22 whichever is earlier. 4 23 4. Tax credits issued under this section are not 4 24 transferable to any person. 4 25 5. a. To claim a tax credit under this section, a taxpayer 4 26 shall include one or more tax credit certificates with the 4 27 taxpayer's tax return. 4 28 b. The tax credit certificate shall contain the taxpayer's 4 29 name, address, tax identification number, the amount of the 4 30 credit, and any other information required by the department 4 31 of revenue. 4 32 c. The tax credit certificate, unless rescinded by the 4 33 authority, shall be accepted by the department of revenue as 4 34 payment for taxes imposed in chapter 422, divisions II, III, 4 35 and V, and in chapter 432, and against the moneys and credits 5 1 tax imposed in section 533.329, subject to any conditions or 5 2 restrictions placed by the authority or the department of 5 3 revenue upon the face of the tax credit certificate and subject 5 4 to the limitations of this program. 5 5 Sec. 5. NEW SECTION. 15C.5 Reports to general assembly. 5 6 The authority, in cooperation with the department of 5 7 revenue, shall publish an annual report of activities of the 5 8 program and shall submit the report to the governor and the 5 9 general assembly. 5 10 Sec. 6. NEW SECTION. 15C.6 Rules. 5 11 The authority and the department of revenue shall each adopt 5 12 rules as necessary for the implementation and administration of 5 13 this chapter. 5 14 Sec. 7. NEW SECTION. 422.10C Job training tax credit. 5 15 The taxes imposed under this division, less the credits 5 16 allowed under section 422.12, shall be reduced by a job 5 17 training tax credit allowed under chapter 15C. 5 18 Sec. 8. Section 422.33, Code 2018, is amended by adding the 5 19 following new subsection: 5 20 NEW SUBSECTION. 17. The taxes imposed under this division 5 21 shall be reduced by a job training tax credit allowed under 5 22 chapter 15C. 5 23 Sec. 9. Section 422.60, Code 2018, is amended by adding the 5 24 following new subsection: 5 25 NEW SUBSECTION. 14. The taxes imposed under this division 5 26 shall be reduced by a job training tax credit allowed under 5 27 chapter 15C. 5 28 Sec. 10. NEW SECTION. 432.12N Job training tax credit. 5 29 The taxes imposed under this chapter shall be reduced by a 5 30 job training tax credit allowed under chapter 15C. 5 31 Sec. 11. Section 533.329, subsection 2, Code 2018, is 5 32 amended by adding the following new paragraph: 5 33 NEW PARAGRAPH. m. The moneys and credits tax imposed under 5 34 this section shall be reduced by a job training tax credit 5 35 allowed under chapter 15C. 6 1 Sec. 12. APPLICABILITY. This Act applies to tax years 6 2 beginning on or after January 1, 2019. 6 3 Sec. 13. APPLICABILITY. This Act applies to qualified 6 4 trainees employed in Iowa on or after January 1, 2019. 6 5 EXPLANATION 6 6 The inclusion of this explanation does not constitute agreement with 6 7 the explanation's substance by the members of the general assembly. 6 8 This bill creates a job training tax credit program 6 9 (program) administered by the economic development authority 6 10 (EDA) in consultation with the department of revenue (DOR) 6 11 to provide tax credits to businesses that employ for pay 6 12 qualified trainees in Iowa during the tax year. To qualify 6 13 as a "qualified trainee" under the program, a person must be 6 14 an apprentice or an intern, must be employed by a business in 6 15 Iowa, and must satisfy the relevant minimum training standard. 6 16 "Apprentice" is defined in the bill to mean an Iowa resident 6 17 employed in an apprenticeable occupation and registered as such 6 18 with the U.S. office of apprenticeship. "Intern" is defined 6 19 in the bill to mean an Iowa college student, or a student who 6 20 graduated from high school in Iowa but who now attends college 6 21 outside of Iowa, who is engaged in temporary employment that 6 22 focuses on providing the student with work experience in the 6 23 student's field of study. 6 24 EDA is required to establish by rule minimum training 6 25 standards that will reflect the minimum training necessary to 6 26 provide a meaningful work experience for an intern or to learn 6 27 a trade or job position for an apprentice. The bill describes 6 28 how the minimum training standards should be quantified, as 6 29 well as the factors EDA shall consider and the persons with 6 30 whom EDA may consult in determining the standards. The bill 6 31 provides that EDA may establish more than one minimum training 6 32 standard. 6 33 In order to receive a tax credit, a business must apply 6 34 to the authority in the manner and form prescribed by the 6 35 authority, and the bill describes the required information 7 1 that must be contained in an application. EDA is required to 7 2 review applications and, upon determining that the requirements 7 3 of the program have been satisfied, issue a tax credit to the 7 4 business. 7 5 The tax credit equals $1,000 for each qualified trainee 7 6 employed in Iowa by a business for the entire tax year. If 7 7 a qualified trainee was not employed by the business for the 7 8 entire tax year, the amount of the credit is prorated based 7 9 upon the number of months of employment. The tax credit 7 10 may be claimed against the individual and corporate income 7 11 taxes, the franchise tax, the insurance companies tax, and the 7 12 moneys and credits tax. The tax credit is nonrefundable and 7 13 nontransferable, but any excess may be carried forward for 7 14 seven years. 7 15 The bill requires EDA and DOR to adopt rules as necessary 7 16 for the implementation of the bill, and requires EDA and DOR to 7 17 publish and submit annual reports to the governor and general 7 18 assembly containing information as described in the bill. 7 19 The bill applies to tax years beginning on or after January 7 20 1, 2019, and to qualified trainees employed in Iowa on or after 7 21 that date. LSB 5074YH (4) 87 mm/jh
