Bill Text: IA HF2443 | 2015-2016 | 86th General Assembly | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: A bill for an act relating to the programs and duties of the economic development authority by making changes relative to the use of life cycle cost analyses, by making technical changes related to the high quality jobs program, by making changes relative to authority assistance for certain federal small business programs, by allowing counties, cities, and the authority to amend certain economic development enterprise zones agreements, and by making changes to the historic preservation and cultural and entertainment district tax credit, including transferring administrative oversight of the tax credit from the department of cultural affairs to the economic development authority, and including effective date provisions. (Formerly HF 2412) (Formerly HSB 612)

Spectrum: Committee Bill

Status: (Enrolled - Dead) 2016-05-04 - Sent to Governor. H.J. 999. [HF2443 Detail]

Download: Iowa-2015-HF2443-Introduced.html

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House File 2443 - Introduced




                                 HOUSE FILE       
                                 BY  COMMITTEE ON WAYS AND
                                     MEANS

                                 (SUCCESSOR TO HF 2412)
                                 (SUCCESSOR TO HSB 612)

                                      A BILL FOR

  1 An Act relating to the programs and duties of the economic
  2    development authority by making changes relative to the use
  3    of life cycle cost analyses, by making technical changes
  4    related to the high quality jobs program, by making changes
  5    relative to authority assistance for certain federal small
  6    business programs, by allowing counties, cities, and the
  7    authority to amend certain economic development enterprise
  8    zones agreements, and by making changes to the historic
  9    preservation and cultural and entertainment district tax
 10    credit, including transferring administrative oversight of
 11    the tax credit from the department of cultural affairs to
 12    the economic development authority, and including effective
 13    date provisions.
 14 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
    TLSB 5171HZ (2) 86
    aw/sc

PAG LIN



  1  1                           DIVISION I
  1  2                    LIFE CYCLE COST ANALYSES
  1  3    Section 1.  Section 470.1, Code 2016, is amended by adding
  1  4 the following new subsection:
  1  5    NEW SUBSECTION.  01.  "Addition" means new construction equal
  1  6 to or greater than twenty thousand square feet of usable floor
  1  7 space that is heated or cooled by a mechanical or electrical
  1  8 system and is joined to an existing facility.
  1  9    Sec. 2.  Section 470.1, subsections 6, 7, and 10, Code 2016,
  1 10 are amended to read as follows:
  1 11    6.  "Facility" means a building having twenty thousand square
  1 12 feet or more of usable floor space that is heated or cooled
  1 13 by a mechanical or electrical system or any building, system,
  1 14 or physical operation which consumes more than forty thousand
  1 15 British thermal units (BTUs) per square foot per year.
  1 16    7.  "Initial cost" means the moneys required for the capital
  1 17 construction or renovation of a facility or the construction
  1 18 of an addition.
  1 19    10.  "Renovation" means a project where additions or
  1 20  alterations, that are not additions, to an existing facility
  1 21  exceed fifty percent of the value of a facility and will affect
  1 22 an energy system.
  1 23    Sec. 3.  Section 470.2, Code 2016, is amended to read as
  1 24 follows:
  1 25    470.2  Policy ==== analysis required.
  1 26    The general assembly declares that energy management is of
  1 27 primary importance in the design of publicly owned facilities.
  1 28 Commencing January 1, 1980 On or after the effective date of
  1 29 this division of this Act, a public agency responsible for the
  1 30 construction or renovation of a facility or the construction of
  1 31 an addition shall, in a design begun after that date, include
  1 32 as a design criterion the requirement that a life cycle cost
  1 33 analysis be conducted for the facility. The objectives of the
  1 34 life cycle cost analysis are to optimize energy efficiency at
  1 35 an acceptable life cycle cost. The life cycle cost analysis
  2  1 shall meet the requirements of section 470.3.
  2  2    Sec. 4.  Section 470.3, subsection 2, Code 2016, is amended
  2  3 to read as follows:
  2  4    2.  A public agency or a person preparing a life cycle cost
  2  5 analysis for a public agency shall consider the methods and
  2  6 analytical models provided by the authority and available
  2  7 through the commissioner, which are suited to the purpose
  2  8 for which the project is intended. Within sixty days of
  2  9 final selection of a design architect or engineer, a public
  2 10 agency, which is also a state agency under section 7D.34, shall
  2 11 notify the commissioner and the authority of the methodology
  2 12 to be used to perform the life cycle cost analysis, on forms
  2 13 provided by the authority use the methodology set forth in the
  2 14 guidelines established, by rule, by the commissioner.
  2 15    Sec. 5.  Section 470.4, Code 2016, is amended to read as
  2 16 follows:
  2 17    470.4  Analysis approved.
  2 18    The life cycle cost analysis shall be approved by the public
  2 19 agency before contracts for the construction or renovation
  2 20 of a facility or the construction of an addition are let. A
  2 21 public agency may accept a facility design and shall meet
  2 22 the requirements of this chapter if the design meets the
  2 23 operational requirements of the agency and provides the optimum
  2 24 life cycle cost. The public agency shall retain a copy of the
  2 25 life cycle cost analysis and a statement justifying a design
  2 26 decision both of which shall be available for public inspection
  2 27 at reasonable hours.
  2 28    Sec. 6.  Section 470.6, Code 2016, is amended to read as
  2 29 follows:
  2 30    470.6  Restriction on use of public funds.
  2 31    Public funds shall not be used for the construction or
  2 32 renovation of a facility or the construction of an addition
  2 33  unless the design for the work is prepared in accordance with
  2 34 this chapter and the actual construction or renovation of
  2 35 the facility or the construction of the addition meets the
  3  1 requirements of the design.
  3  2    Sec. 7.  Section 470.7, Code 2016, is amended to read as
  3  3 follows:
  3  4    470.7  Life cycle cost analysis ==== approval.
  3  5    1.  The public agency responsible for the new construction
  3  6 or renovation of a public facility or the construction of an
  3  7 addition to a public facility shall submit a copy of the life
  3  8 cycle cost analysis for review by the commissioner who shall
  3  9 consult with the authority. If the public agency is also a
  3 10 state agency under section 7D.34, comments by the authority
  3 11 or the commissioner, including any recommendation for changes
  3 12 in the analysis, shall, within thirty days of receipt of the
  3 13 analysis, be forwarded in writing to the public agency. If
  3 14 either the authority or the commissioner disagrees with any
  3 15 aspects of the life cycle cost analysis, the public agency
  3 16 affected shall timely respond in writing to the commissioner
  3 17 and the authority. The response shall indicate whether the
  3 18 agency intends to implement the recommendations and, if the
  3 19 agency does not intend to implement them, the public agency
  3 20 shall present its reasons. The reasons may include but are
  3 21 not limited to a description of the purpose of the facility or
  3 22 renovation, preservation of historical architectural features,
  3 23 architectural and site considerations, and health and safety
  3 24 concerns.
  3 25    2.  Within thirty days of receipt of the response of the
  3 26 public agency affected, the authority, the commissioner, or
  3 27 both, shall notify in writing the public agency affected of
  3 28 the authority's, the commissioner's, or both's agreement
  3 29 or disagreement with the response. In the event of a
  3 30 disagreement, the authority, the commissioner, or both, shall
  3 31 at the same time transmit the notification of disagreement
  3 32 with response and related papers to the executive council
  3 33 for resolution pursuant to section 7D.34. The life cycle
  3 34 cost analysis process, including submittal and approval, and
  3 35 implementation exemption requests pursuant to section 470.8,
  4  1 shall be completed prior to the letting of contracts for the
  4  2 construction or renovation of a facility or the construction
  4  3 of an addition.
  4  4    Sec. 8.  Section 470.8, Code 2016, is amended to read as
  4  5 follows:
  4  6    470.8  Life cycle cost analysis ==== implementation and
  4  7 exemptions.
  4  8    1.  The public agency responsible for the new construction
  4  9 or renovation of a public facility or the construction of an
  4 10 addition shall implement the recommendations of the life cycle
  4 11 cost analysis.
  4 12    2.  The commissioner shall adopt rules for the
  4 13 implementation and administration of the life cycle cost
  4 14 analysis.  The commissioner, in consultation with the director,
  4 15 shall, by rule, develop criteria to exempt facilities from
  4 16 the implementation requirements of this section. Using the
  4 17 criteria, the commissioner, in cooperation with the director,
  4 18 shall exempt facilities on a case by case case=by=case basis.
  4 19 Factors to be considered when developing the exemption criteria
  4 20 shall include, but not be limited to, a description of the
  4 21 purpose of the facility or renovation, the preservation
  4 22 of historical architectural features, site considerations,
  4 23 and health and safety concerns. The commissioner and the
  4 24 director shall grant or deny a request for exemption from the
  4 25 requirements of this section within thirty days of receipt of
  4 26 the request.
  4 27    Sec. 9.  EFFECTIVE UPON ENACTMENT.  This division of this
  4 28 Act, being deemed of immediate importance, takes effect upon
  4 29 enactment.
  4 30                           DIVISION II
  4 31             HIGH QUALITY JOBS PROGRAM ==== DEFINITION
  4 32    Sec. 10.  Section 15.333, subsection 2, unnumbered paragraph
  4 33 1, Code 2016, is amended to read as follows:
  4 34    For purposes of this section, "new investment directly
  4 35 related to new jobs created by the project" investment" means the
  5  1 cost of machinery and equipment, as defined in section 427A.1,
  5  2 subsection 1, paragraphs "e" and "j", purchased for use in the
  5  3 operation of the eligible business, the purchase price of which
  5  4 has been depreciated in accordance with generally accepted
  5  5 accounting principles, the purchase price of real property and
  5  6 any buildings and structures located on the real property, and
  5  7 the cost of improvements made to real property which is used
  5  8 in the operation of the eligible business. "New investment
  5  9 directly related to new jobs created by the project" investment"
  5 10  also means the annual base rent paid to a third=party developer
  5 11 by an eligible business for a period not to exceed ten years,
  5 12 provided the cumulative cost of the base rent payments for that
  5 13 period does not exceed the cost of the land and the third=party
  5 14 developer's costs to build or renovate the building for the
  5 15 eligible business. The eligible business shall enter into a
  5 16 lease agreement with the third=party developer for a minimum
  5 17 of five years. If, however, within five years of purchase,
  5 18 the eligible business sells, disposes of, razes, or otherwise
  5 19 renders unusable all or a part of the land, buildings, or other
  5 20 existing structures for which tax credit was claimed under this
  5 21 section, the tax liability of the eligible business for the
  5 22 year in which all or part of the property is sold, disposed of,
  5 23 razed, or otherwise rendered unusable shall be increased by one
  5 24 of the following amounts:
  5 25    Sec. 11.  Section 15.333A, subsection 2, unnumbered
  5 26 paragraph 1, Code 2016, is amended to read as follows:
  5 27    For purposes of this section, "new investment directly
  5 28 related to new jobs created by the project" investment" means the
  5 29 cost of machinery and equipment, as defined in section 427A.1,
  5 30 subsection 1, paragraphs "e" and "j", purchased for use in the
  5 31 operation of the eligible business, the purchase price of which
  5 32 has been depreciated in accordance with generally accepted
  5 33 accounting principles, the purchase price of real property and
  5 34 any buildings and structures located on the real property, and
  5 35 the cost of improvements made to real property which is used
  6  1 in the operation of the eligible business. "New investment
  6  2 directly related to new jobs created by the project" investment"
  6  3  also means the annual base rent paid to a third=party developer
  6  4 by an eligible business for a period not to exceed ten years,
  6  5 provided the cumulative cost of the base rent payments for that
  6  6 period does not exceed the cost of the land and the third=party
  6  7 developer's costs to build or renovate the building for the
  6  8 eligible business. The eligible business shall enter into a
  6  9 lease agreement with the third=party developer for a minimum
  6 10 of five years. If, however, within five years of purchase,
  6 11 the eligible business sells, disposes of, razes, or otherwise
  6 12 renders unusable all or a part of the land, buildings, or other
  6 13 existing structures for which tax credit was claimed under this
  6 14 section, the tax liability of the eligible business for the
  6 15 year in which all or part of the property is sold, disposed of,
  6 16 razed, or otherwise rendered unusable shall be increased by one
  6 17 of the following amounts:
  6 18                          DIVISION III
  6 19     FEDERAL SMALL BUSINESS PROGRAMS ==== AUTHORITY ASSISTANCE
  6 20    Sec. 12.  Section 15.411, subsection 4, paragraphs a, b, and
  6 21 c, Code 2016, are amended to read as follows:
  6 22    a.  (1)  The authority shall establish and administer an
  6 23 outreach program for purposes of assisting businesses with
  6 24 applications to the federal small business innovation research
  6 25 and small business technology transfer programs.
  6 26    (2)  The goals of this assistance are to increase the number
  6 27 of successful phase II small business innovation research grant
  6 28 and contract proposals in the state, increase the amount of
  6 29 such grant and contract funds awarded in the state, stimulate
  6 30 subsequent investment by industry, venture capital, and other
  6 31 sources, and encourage businesses to commercialize promising
  6 32 technologies.
  6 33    b.  (1)  In administering the program, the authority may
  6 34 provide technical and financial assistance to businesses.
  6 35 Financial assistance provided pursuant to this subsection
  7  1 shall may be awarded to a business in an amount not to exceed
  7  2 twenty=five one hundred thousand dollars to for any single
  7  3 business individual federal award under this subsection.
  7  4    (2)  The authority may require successful applicants to
  7  5 repay the amount of financial assistance received, but shall
  7  6 not require unsuccessful applicants to repay such assistance.
  7  7 Any moneys repaid pursuant to this subsection may be used to
  7  8 provide financial assistance to other applicants.
  7  9    c.  The authority may also provide financial assistance
  7 10 for purposes of helping businesses meet the matching funds
  7 11  requirements of the federal small business innovation research
  7 12 and small business technology transfer programs.
  7 13                           DIVISION IV
  7 14                        ENTERPRISE ZONES
  7 15    Sec. 13.  2014 Iowa Acts, chapter 1130, section 43,
  7 16 subsection 1, is amended to read as follows:
  7 17    1.  On or after the effective date of this division of this
  7 18 Act, a city or county shall not create an enterprise zone under
  7 19 chapter 15E, division XVIII, or enter into a new agreement or
  7 20 amend an existing agreement under chapter 15E, division XVIII.
  7 21 A city or county and the economic development authority, with
  7 22 the approval of the economic development authority board, may
  7 23 amend an agreement for compliance reasons if the amendment
  7 24 does not increase the amount of incentives awarded under the
  7 25 agreement.
  7 26                           DIVISION V
  7 27 HISTORIC PRESERVATION AND CULTURAL AND ENTERTAINMENT DISTRICT
  7 28                           TAX CREDIT
  7 29    Sec. 14.  Section 404A.1, Code 2016, is amended by adding the
  7 30 following new subsection:
  7 31    NEW SUBSECTION.  01.  "Authority" means the economic
  7 32 development authority created in section 15.105.
  7 33    Sec. 15.  Section 404A.2, subsection 1, Code 2016, is amended
  7 34 to read as follows:
  7 35    1.  An eligible taxpayer who has entered into an agreement
  8  1 under section 404A.3, subsection 3, is eligible to receive a
  8  2 historic preservation and cultural and entertainment district
  8  3 tax credit in an amount equal to twenty=five percent of
  8  4 the qualified rehabilitation expenditures of a qualified
  8  5 rehabilitation project that are specified in the agreement.
  8  6 Notwithstanding any other provision of this chapter or any
  8  7 provision in the agreement to the contrary, the amount of
  8  8 the tax credits shall not exceed twenty=five percent of the
  8  9 final qualified rehabilitation expenditures verified by the
  8 10 department authority pursuant to section 404A.3, subsection 5,
  8 11 paragraph "c".
  8 12    Sec. 16.  Section 404A.2, Code 2016, is amended by adding the
  8 13 following new subsection:
  8 14    NEW SUBSECTION.  2A.  a.  Tax credit certificates issued
  8 15 under section 404A.3 may be transferred to any person. Within
  8 16 ninety days of transfer, the transferee shall submit the
  8 17 transferred tax credit certificate to the department of revenue
  8 18 along with a statement containing the transferee's name, tax
  8 19 identification number, address, the denomination that each
  8 20 replacement tax credit certificate is to carry, and any other
  8 21 information required by the department of revenue. However,
  8 22 tax credit certificate amounts of less than the minimum amount
  8 23 established by rule by the department of revenue shall not be
  8 24 transferable.
  8 25    b.  Within thirty days of receiving the transferred tax
  8 26 credit certificate and the transferee's statement, the
  8 27 department of revenue shall issue one or more replacement tax
  8 28 credit certificates to the transferee. Each replacement tax
  8 29 credit certificate must contain the information required for
  8 30 the original tax credit certificate and must have the same
  8 31 expiration date that appeared on the transferred tax credit
  8 32 certificate.
  8 33    c.  A tax credit shall not be claimed by a transferee
  8 34 under this section until a replacement tax credit certificate
  8 35 identifying the transferee as the proper holder has been
  9  1 issued. The transferee may use the amount of the tax credit
  9  2 transferred against the taxes imposed in chapter 422, divisions
  9  3 II, III, and V, and in chapter 432, for any tax year the
  9  4 original transferor could have claimed the tax credit. Any
  9  5 consideration received for the transfer of the tax credit shall
  9  6 not be included as income under chapter 422, divisions II, III,
  9  7 and V.  Any consideration paid for the transfer of the tax
  9  8 credit shall not be deducted from income under chapter 422,
  9  9 divisions II, III, and V.
  9 10    Sec. 17.  Section 404A.2, subsection 3, Code 2016, is amended
  9 11 to read as follows:
  9 12    3.  Any For a tax credit claimed by an eligible taxpayer
  9 13 or a transferee for qualified rehabilitation projects with
  9 14 agreements entered into on or after July 1, 2014, any credit in
  9 15 excess of the taxpayer's tax liability for the tax year shall
  9 16 be refunded with interest computed under section 422.25. In
  9 17 lieu of claiming a refund, a taxpayer may elect to have the
  9 18 overpayment shown on the taxpayer's final, completed return
  9 19 credited to the tax liability for the following year may be
  9 20 refunded or, at the taxpayer's election, credited to the
  9 21 taxpayer's tax liability for the following five years or until
  9 22 depleted, whichever is earlier.  A tax credit shall not be
  9 23 carried back to a tax year prior to the tax year in which the
  9 24 taxpayer redeems the tax credit.
  9 25    Sec. 18.  Section 404A.2, subsection 4, paragraph c, Code
  9 26 2016, is amended to read as follows:
  9 27    c.  The tax credit certificate, unless rescinded by the
  9 28 department authority, shall be accepted by the department
  9 29 of revenue as payment for taxes imposed in chapter 422,
  9 30 divisions II, III, and V, and in chapter 432, subject to any
  9 31 conditions or restrictions placed by the department authority
  9 32  or the department of revenue upon the face of the tax credit
  9 33 certificate and subject to the limitations of this program.
  9 34    Sec. 19.  Section 404A.2, subsection 5, Code 2016, is amended
  9 35 by striking the subsection.
 10  1    Sec. 20.  Section 404A.3, subsections 1 and 2, Code 2016, are
 10  2 amended to read as follows:
 10  3    1.  Application and fees.
 10  4    a.  An eligible taxpayer seeking historic preservation
 10  5 and cultural and entertainment district tax credits provided
 10  6 in section 404A.2 shall make application to the department
 10  7  authority in the manner prescribed by the department authority.
 10  8    b.  The department authority may accept applications on a
 10  9 continuous basis or may accept applications, or one or more
 10 10 components of an application, during one or more application
 10 11 periods.
 10 12    c.  The application shall include any information deemed
 10 13 necessary by the authority, in consultation with the
 10 14  department, to evaluate the eligibility under the program
 10 15 of the applicant and the rehabilitation project, the amount
 10 16 of projected qualified rehabilitation expenditures of a
 10 17 rehabilitation project, and the amount and source of all
 10 18 funding for a rehabilitation project. An applicant shall have
 10 19 the burden of proof to demonstrate to the department authority
 10 20  that the applicant is an eligible taxpayer and the project is a
 10 21 qualified rehabilitation project under the program.
 10 22    d.  The department authority may establish criteria for the
 10 23 use of electronic or other alternative filing or submission
 10 24 methods for any application, document, or payment requested or
 10 25 required under this program. Such criteria may provide for the
 10 26 acceptance of a signature in a form other than the handwriting
 10 27 of a person.
 10 28    e.  (1)  The department authority may charge application and
 10 29 other fees to eligible taxpayers who apply to participate in
 10 30 the program. The amount of such fees shall be determined based
 10 31 on the costs of the authority and the department associated
 10 32 with administering the program.
 10 33    (2)  Fees collected by the department authority pursuant to
 10 34 this paragraph shall be deposited with the department pursuant
 10 35 to authority notwithstanding section 303.9, subsection 1.
 11  1    (3)  A portion of the fees collected shall be directed by the
 11  2 authority to the department.
 11  3    2.  Registration.
 11  4    a.  Upon review of the application by the authority, the
 11  5 department authority may register a qualified rehabilitation
 11  6 project under the program. If the department authority
 11  7  registers the project, the department authority shall make a
 11  8 preliminary determination as to the amount of tax credits for
 11  9 which the project qualifies.
 11 10    b.  After registering the qualified rehabilitation project,
 11 11 the department authority shall notify the eligible taxpayer of
 11 12 successful registration under the program within a period of
 11 13 time established by the authority by rule. The notification
 11 14 shall include the amount of tax credits under section 404A.2
 11 15 for which the qualified rehabilitation project has received
 11 16 a tentative award and a statement that the amount is a
 11 17 preliminary determination only.
 11 18    Sec. 21.  Section 404A.3, subsection 3, paragraph a, Code
 11 19 2016, is amended to read as follows:
 11 20    a.  Upon successful registration of a qualified
 11 21 rehabilitation project, the eligible taxpayer shall enter into
 11 22 an agreement with the department authority for the successful
 11 23 completion of all requirements of the program.
 11 24    Sec. 22.  Section 404A.3, subsection 3, paragraph b,
 11 25 subparagraph (2), Code 2016, is amended to read as follows:
 11 26    (2)  The rehabilitation work to be performed.  An eligible
 11 27 taxpayer shall perform the rehabilitation work consistent with
 11 28 the United States secretary of the interior's standards for
 11 29 rehabilitation, as determined by the department.
 11 30    Sec. 23.  Section 404A.3, subsection 4, paragraphs a and b,
 11 31 Code 2016, are amended to read as follows:
 11 32    a.  The eligible taxpayer shall, for the length of the
 11 33 agreement, annually certify to the department authority
 11 34  compliance with the requirements of the agreement. The
 11 35 certification shall be made at such time as the department
 12  1  authority shall determine in the agreement.
 12  2    b.  The eligible taxpayer shall have the burden of proof to
 12  3 demonstrate to the department authority that all requirements
 12  4 of the agreement are satisfied. The taxpayer shall notify
 12  5 the department authority in a timely manner of any changes
 12  6 in the qualification of the rehabilitation project or in
 12  7 the eligibility of the taxpayer to claim the tax credit
 12  8 provided under this chapter, or of any other change that may
 12  9 have a negative impact on the eligible taxpayer's ability to
 12 10 successfully complete any requirement under the agreement.
 12 11    Sec. 24.  Section 404A.3, subsection 4, paragraph c,
 12 12 subparagraphs (1) and (2), Code 2016, are amended to read as
 12 13 follows:
 12 14    (1)  If after entering into the agreement but before a
 12 15 tax credit certificate is issued, the eligible taxpayer or
 12 16 the qualified rehabilitation project no longer meets the
 12 17 requirements of the agreement, the department authority may
 12 18 find the taxpayer in default under the agreement and may revoke
 12 19 the tax credit award.
 12 20    (2)  If an eligible taxpayer obtains a tax credit certificate
 12 21 from the department authority by way of a prohibited activity,
 12 22 the eligible taxpayer and any transferee shall be jointly and
 12 23 severally liable to the state for the amount of the tax credits
 12 24 so issued, interest and penalties allowed under chapter 422,
 12 25 and reasonable attorney fees and litigation costs, except
 12 26 that the liability of the transferee shall not exceed an
 12 27 amount equal to the amount of the tax credits acquired by the
 12 28 transferee. The department of revenue, upon notification
 12 29 or discovery that a tax credit certificate was issued to an
 12 30 eligible taxpayer by way of a prohibited activity, shall revoke
 12 31 any outstanding tax credit and seek repayment from the eligible
 12 32 taxpayer of the value of any tax credit already claimed, and
 12 33 the failure to make such a repayment may be treated by the
 12 34 department of revenue in the same manner as a failure to pay
 12 35 the tax shown due or required to be shown due with the filing
 13  1 of a return or deposit form. A qualifying transferee is not
 13  2  subject to the liability, revocation, and repayment imposed
 13  3 under this subparagraph if the transferee had actual notice,
 13  4 prior to transfer of the tax credit, of misrepresentation,
 13  5 fraud, or any unlawful act or omission by the eligible
 13  6 taxpayer.
 13  7    Sec. 25.  Section 404A.3, subsection 4, paragraph c,
 13  8 subparagraph (3), Code 2016, is amended by striking the
 13  9 subparagraph and inserting in lieu thereof the following:
 13 10    (3)  For the purposes of this paragraph, "prohibited
 13 11 activity" means a breach or default under the agreement with
 13 12 the authority, the violation of any warranty provided by
 13 13 the eligible taxpayer to the authority or the department
 13 14 of revenue, the claiming of a tax credit issued under this
 13 15 chapter for expenditures that are not qualified rehabilitation
 13 16 expenditures, the violation of any requirements of this chapter
 13 17 or rules adopted pursuant to this chapter, misrepresentation,
 13 18 fraud, or any other unlawful act or omission.
 13 19    Sec. 26.  Section 404A.3, subsections 5, 6, and 7, Code 2016,
 13 20 are amended to read as follows:
 13 21    5.  Examination and audit of project.
 13 22    a.  An eligible taxpayer shall engage a certified public
 13 23 accountant authorized to practice in this state to conduct an
 13 24 examination of the project in accordance with the American
 13 25 institute of certified public accountants' statements on
 13 26 standards for attestation engagements. Upon completion of the
 13 27 qualified rehabilitation project, the eligible taxpayer shall
 13 28 submit the examination to the department authority, along with
 13 29 a statement of the amount of final qualified rehabilitation
 13 30 expenditures and any other information deemed necessary by
 13 31 the department or the department of revenue authority in
 13 32 order to verify that all requirements of the agreement, this
 13 33 chapter, and all rules adopted pursuant to this chapter have
 13 34 been satisfied. The authority shall adopt rules governing
 13 35 examinations required under this subsection.
 14  1    b.  Notwithstanding paragraph "a", the department authority
 14  2  may waive the examination requirement in this subsection if all
 14  3 the following requirements are satisfied:
 14  4    (1)  The final qualified rehabilitation expenditures of the
 14  5 qualified rehabilitation project, as verified by the department
 14  6  authority, do not exceed one hundred thousand dollars.
 14  7    (2)  The qualified rehabilitation project is funded
 14  8 exclusively by private funding sources.
 14  9    c.  Upon review of the examination, if applicable, the
 14 10 department authority shall verify that all requirements of
 14 11 the agreement, this chapter, and all rules adopted pursuant
 14 12 to this chapter have been satisfied and shall verify the
 14 13 amount of final qualified rehabilitation expenditures. After
 14 14 consultation with the department of revenue, the department may
 14 15 issue a tax credit certificate to the eligible taxpayer stating
 14 16 the amount of tax credit under section 404A.2 the eligible
 14 17 taxpayer may claim. The department If the authority determines
 14 18 that all requirements of the agreement, this chapter, and all
 14 19 rules adopted pursuant to this chapter have been satisfied and
 14 20 it has verified the amount of final qualified rehabilitation
 14 21 expenditures, the authority shall issue the a tax credit
 14 22 certificate not later than sixty days following the completion
 14 23 of the examination review, if applicable, and the verifications
 14 24 and consultation required under this paragraph to the eligible
 14 25 taxpayer stating the amount of the credit under section 404A.2
 14 26 the eligible taxpayer may claim.
 14 27    6.  Waivers.  Notwithstanding any other provision of this
 14 28 chapter to the contrary, the department authority may waive
 14 29 the requirements of subsections 1 through 4, except the
 14 30 requirements relating to allowable cost overruns in subsection
 14 31 3, paragraph "b", subparagraph (3), and the requirements
 14 32 in subsection 4, paragraphs "b" and "c", for qualified
 14 33 rehabilitation projects with final qualified rehabilitation
 14 34 expenditures of seven hundred fifty thousand dollars or less
 14 35 and may establish by rule different application, registration,
 15  1 agreement, compliance, or other requirements relating to such
 15  2 projects.
 15  3    7.  Amendments.  The department authority may for good cause
 15  4 amend an agreement.
 15  5    Sec. 27.  Section 404A.4, subsection 1, paragraph a, Code
 15  6 2016, is amended to read as follows:
 15  7    a.  Except as provided in subsections 2 and 3, the department
 15  8  authority shall not award in any one fiscal year an amount of
 15  9 tax credits provided in section 404A.2 in excess of forty=five
 15 10 million dollars.
 15 11    Sec. 28.  Section 404A.4, subsection 3, paragraph a, Code
 15 12 2016, is amended to read as follows:
 15 13    a.  If during the fiscal year beginning July 1, 2016, or
 15 14 any fiscal year thereafter, the department authority awards
 15 15 an amount of tax credits that is less than the maximum
 15 16 aggregate tax credit award limit specified in subsection 1,
 15 17 the difference between the amount so awarded and the amount
 15 18 specified in subsection 1, not to exceed ten percent of the
 15 19 amount specified in subsection 1, may be carried forward to the
 15 20 succeeding fiscal year and awarded during that fiscal year.
 15 21    Sec. 29.  Section 404A.5, subsections 1 and 3, Code 2016, are
 15 22 amended to read as follows:
 15 23    1.  The department authority, in consultation with the
 15 24 department of revenue, shall be responsible for keeping the
 15 25 general assembly and the legislative services agency informed
 15 26 on the overall economic impact to the state of qualified
 15 27 rehabilitation projects.
 15 28    3.  The department authority, to the extent it is able, shall
 15 29 provide recommendations on whether the limit on tax credits
 15 30 should be changed, the need for a broader or more restrictive
 15 31 definition of qualified rehabilitation project, and other
 15 32 adjustments to the tax credits under this chapter.
 15 33    Sec. 30.  Section 404A.6, Code 2016, is amended to read as
 15 34 follows:
 15 35    404A.6  Rules.
 16  1 The authority, department, and the department of revenue
 16  2 shall each adopt rules to jointly administer as necessary for
 16  3 the administration of this chapter.
 16  4    Sec. 31.  APPLICABILITY.
 16  5    1.  Except as provided in subsection 2, this division of this
 16  6 Act applies to qualified rehabilitation projects registered on
 16  7 or after July 1, 2016.
 16  8    2.  The section of this division of this Act amending section
 16  9 404A.2, subsection 3, applies retroactively to agreements
 16 10 entered into by an eligible taxpayer on or after July 1, 2014.
 16 11                           EXPLANATION
 16 12 The inclusion of this explanation does not constitute agreement with
 16 13 the explanation's substance by the members of the general assembly.
 16 14    This bill relates to the programs and duties of the economic
 16 15 development authority (authority) by modifying life cycle cost
 16 16 analysis provisions relating to public facilities, making
 16 17 technical changes pertaining to the high quality jobs program,
 16 18 modifying economic development authority assistance provisions
 16 19 under the business outreach program, modifying provisions
 16 20 concerning enterprise zones, and transferring certain duties
 16 21 to the authority under the historic preservation and cultural
 16 22 entertainment district tax credit program.
 16 23    Division I of the bill modifies provisions relating to the
 16 24 life cycle analysis required of certain public facilities.
 16 25 The division adds a definition of "addition" and modifies the
 16 26 definitions of "facility" and "renovation" and requires a
 16 27 public agency responsible for the construction or renovation
 16 28 of a facility or the construction of an addition to a facility
 16 29 to include the performance of a life cycle cost analysis as
 16 30 a design criterion on or after the effective date of the
 16 31 division. The division requires a public agency or person
 16 32 preparing a life cycle cost analysis for a public agency to
 16 33 use methodology established, by rule, by the state building
 16 34 code commissioner, rather than methods and analytical
 16 35 models provided by the authority. The division requires the
 17  1 commissioner to also adopt rules for the implementation and
 17  2 adoption of the life cycle cost analysis. The division takes
 17  3 effect upon enactment.
 17  4    Division II of the bill makes technical changes related to
 17  5 the definition of a "new investment" under the high quality
 17  6 jobs program.
 17  7    Division III of the bill relates to the authority's business
 17  8 outreach program, which provides technical and financial
 17  9 assistance to businesses applying for federal small business
 17 10 innovation research and small business technology transfer
 17 11 program grants and contracts.
 17 12    Under current law, the authority is allowed to provide
 17 13 financial assistance of up to $25,000 to any single business
 17 14 and is allowed to provide such financial assistance as matching
 17 15 funds to allow a business to qualify for either federal
 17 16 program. The division provides that the authority may provide
 17 17 financial assistance of up to $100,000 to a business for any
 17 18 individual federal award under those programs and that the
 17 19 financial assistance may be used for any purpose to allow a
 17 20 business to meet federal program requirements.
 17 21    Division IV of the bill relates to enterprise zones.
 17 22 The division allows a city or county and the authority
 17 23 for compliance reasons to amend agreements made under the
 17 24 enterprise zone program as long as the amendments do not
 17 25 increase the amount of incentives awarded and the economic
 17 26 development authority board approves.
 17 27    Division V of the bill relates to the historic preservation
 17 28 and cultural and entertainment district tax credit by
 17 29 transferring administrative oversight of the tax credit from
 17 30 the department of cultural affairs to the authority. In
 17 31 relation to the tax credit, for qualified rehabilitation
 17 32 projects with agreements entered into on or after July 1, 2014,
 17 33 the division allows a taxpayer to elect to receive a refund of
 17 34 any credit in excess of the taxpayer's liability or to credit
 17 35 the excess against the tax liability for the following five
 18  1 years or until depleted, whichever is earlier. Under current
 18  2 law, the credit is refundable with interest, but, in lieu of a
 18  3 refund, the excess may be credited against tax liability for
 18  4 the following year.
 18  5    Current law allows the state to recapture the amount of
 18  6 the tax credit, along with interest, penalties, attorney
 18  7 fees, and litigation costs, if the original holder of the
 18  8 tax credit certificate obtained the tax credit by way of a
 18  9 prohibited activity. The division strikes joint and several
 18 10 liability provisions under current law, as applied to bona fide
 18 11 purchasers of such tax credits, but maintains liability for
 18 12 transferees with actual notice of misrepresentation, fraud, or
 18 13 unlawful acts or omissions by the original holder of the tax
 18 14 credit certificate prior to the transfer.
 18 15    The division makes additional changes related to
 18 16 definitions, to taxpayer notifications, to rehabilitation work
 18 17 standards, and to verification and credit issuance processes.
 18 18 Under the division, the department of cultural affairs will
 18 19 receive a portion of application and program fees and is
 18 20 required to consult with the authority on certain historic
 18 21 preservation and cultural and entertainment district tax credit
 18 22 processes.
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