Bill Text: IA HF652 | 2017-2018 | 87th General Assembly | Introduced
Bill Title: A bill for an act relating to state revenue and finance by modifying certain tax credits and tax credit programs and providing for transfers to the cash reserve fund and the taxpayers trust fund, and including effective date and retroactive and other applicability provisions. (Formerly HSB 187.)
Spectrum: Committee Bill
Status: (Introduced - Dead) 2017-04-18 - Subcommittee: Vander Linden, Jacoby and Pettengill. H.J. 1075. [HF652 Detail]
Download: Iowa-2017-HF652-Introduced.html
House File 652 - Introduced HOUSE FILE BY COMMITTEE ON APPROPRIATIONS (SUCCESSOR TO HSB 187) A BILL FOR 1 An Act relating to state revenue and finance by modifying 2 certain tax credits and tax credit programs and providing 3 for transfers to the cash reserve fund and the taxpayers 4 trust fund, and including effective date and retroactive and 5 other applicability provisions. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: TLSB 2629HV (3) 87 mm/sc/rj PAG LIN 1 1 DIVISION I 1 2 BEGINNING FARMER TAX CREDITS 1 3 Section 1. Section 16.80, subsection 5, paragraph a, 1 4 subparagraphs (1) and (2), Code 2017, are amended to read as 1 5 follows: 1 6 (1) If the qualified beginning farmer is not a veteran, the 1 7 taxpayer may claim a tax credit equal tosevensix percent of 1 8 the gross amount paid to the taxpayer under the agreement for 1 9 each tax year that the tax credit is allowed. 1 10 (2) If the qualified beginning farmer is a veteran, the 1 11 taxpayer may claim eight percent of the gross amount paid to 1 12 the taxpayer under the agreement for the first year that the 1 13 tax credit is allowed andsevensix percent of the gross amount 1 14 paid to the taxpayer for each subsequent tax year that the tax 1 15 credit is allowed. However, the taxpayer may only claimseven 1 16six percent of the gross amount paid to the taxpayer under 1 17 a renewed agreement or a new agreement executed by the same 1 18 parties. 1 19 Sec. 2. Section 16.80, subsection 5, paragraph b, 1 20 subparagraph (1), Code 2017, is amended to read as follows: 1 21 (1) (a) If the qualified beginning farmer is not a 1 22 veteran, the taxpayer may claim a tax credit equal toseventeen 1 23sixteen percent of the amount paid to the taxpayer from crops 1 24 or animals sold under the agreement in which the payment is 1 25 exclusively made from the sale of crops or animals. 1 26 (b) If the qualified beginning farmer is a veteran, the 1 27 taxpayer may claim a tax credit equal to eighteen percent of 1 28 the amount paid to the taxpayer from crops or animals sold 1 29 under the agreement for the first tax year that the taxpayer 1 30 is allowed the tax credit andseventeensixteen percent of the 1 31 amount paid to the taxpayer for each subsequent tax year that 1 32 the taxpayer is allowed the tax credit. However, the taxpayer 1 33 may only claimseventeensixteen percent of the amount paid to 1 34 the taxpayer from crops or animals sold for any tax year under 1 35 a renewed agreement or a new agreement executed by the same 2 1 parties. 2 2 Sec. 3. Section 16.80, subsection 5, paragraphs a and b, 2 3 as enacted in 2014 Iowa Acts, chapter 1080, section 122, are 2 4 amended to read as follows: 2 5 a. Except as provided in paragraph "b", the tax credit shall 2 6 equalfivefour and one=half percent of the amount paid to the 2 7 taxpayer under the agreement. 2 8 b. The tax credit shall equalfifteenfourteen percent of 2 9 the amount paid to the taxpayer from crops or animals sold 2 10 under an agreement in which the payment is exclusively made 2 11 from the sale of crops or animals. 2 12 Sec. 4. Section 16.81, subsection 8, paragraphs a and b, 2 13 Code 2017, are amended to read as follows: 2 14 a. If the qualified beginning farmer is not a veteran, the 2 15 taxpayer may claim a tax credit equal tosevensix percent of 2 16 the gross amount paid to the qualified beginning farmer under 2 17 the contract for each tax year that the tax credit is allowed. 2 18 b. If the qualified beginning farmer is a veteran, the 2 19 taxpayer may claim a tax credit equal to eight percent of the 2 20 gross amount paid to the qualified beginning farmer under the 2 21 contract for the first year that the tax credit is allowed and 2 22sevensix percent of the gross amount paid to the qualified 2 23 beginning farmer under the contract for each subsequent tax 2 24 year that the tax credit is allowed. However, the taxpayer may 2 25 only claimsevensix percent of the gross amount paid to the 2 26 qualified beginning farmer under a renewed contract or a new 2 27 contract executed by the same parties. 2 28 Sec. 5. EFFECTIVE DATE. 2 29 1. Except as provided in subsection 2, this division of this 2 30 Act, being deemed of immediate importance, takes effect upon 2 31 enactment. 2 32 2. The section of this division of this Act amending section 2 33 16.80, subsection 5, paragraphs "a" and "b", as enacted in 2014 2 34 Iowa Acts, chapter 1080, section 122, takes effect January 1, 2 35 2018. 3 1 Sec. 6. RETROACTIVE AND OTHER APPLICABILITY. 3 2 1. Except as provided in subsection 2, this division of this 3 3 Act applies retroactively to January 1, 2017, for tax years 3 4 beginning on or after that date. 3 5 2. The section of this division of this Act amending section 3 6 16.80, subsection 5, paragraphs "a" and "b", as enacted in 2014 3 7 Iowa Acts, chapter 1080, section 122, applies to tax years 3 8 beginning on or after January 1, 2018. 3 9 DIVISION II 3 10 BIODIESEL BLENDED FUEL TAX CREDIT 3 11 Sec. 7. Section 422.11P, subsection 3, paragraph a, 3 12 subparagraph (1), Code 2017, is amended to read as follows: 3 13 (1) The taxpayer is a retail dealer who sells and dispenses 3 14 qualifying biodiesel blended fuel through a motor fuel pump 3 15 located at the retail dealer's retail motor fuel site during 3 16 the calendar yearor parts of the calendar yearsfor which the 3 17 tax credit is claimed as provided in this section. 3 18 Sec. 8. Section 422.11P, subsection 4, unnumbered paragraph 3 19 1, Code 2017, is amended to read as follows: 3 20For a retail dealer whose tax year is on a calendar year 3 21 basis, theA retail dealer shall calculate the amount of the 3 22 tax credit by multiplying a designated rate by the retail 3 23 dealer's total biodiesel blended fuel gallonage for the 3 24 calendar year as provided in section 452A.31 which qualifies 3 25 under this subsection. 3 26 Sec. 9. Section 422.11P, subsection 5, Code 2017, is amended 3 27 by striking the subsection and inserting in lieu thereof the 3 28 following: 3 29 5. a. To receive a tax credit under this section, a retail 3 30 dealer must submit an application in the manner and form 3 31 prescribed by the department. The department may establish an 3 32 application deadline or require a retail dealer to apply for 3 33 the credit on or in conjunction with the retail dealer's annual 3 34 report required under section 452A.33. 3 35 b. The department shall issue tax credits and related tax 4 1 credit certificates to qualifying retail dealers on a calendar 4 2 year basis, which tax credits shall not exceed an aggregate 4 3 amount of sixteen million dollars per calendar year. In the 4 4 event the aggregate amount of tax credit claims for a calendar 4 5 year exceeds sixteen million dollars, the department shall 4 6 reduce in a prorated fashion all tax credit claims until the 4 7 aggregate credit claims equal sixteen million dollars. 4 8 c. The tax credit may be claimed for the tax year ending 4 9 on or after January 1 of the calendar year for which the tax 4 10 credit is calculated as provided in subsection 4. For an 4 11 individual claiming the tax credit allowed another entity 4 12 pursuant to subsection 7, the tax credit may be claimed for the 4 13 individual's tax year beginning on or after the first day of 4 14 the tax year for which the other entity was allowed to claim 4 15 the tax credit. 4 16 d. (1) To claim a tax credit under this section, a taxpayer 4 17 shall include one or more tax credit certificates with the 4 18 taxpayer's tax return. 4 19 (2) The tax credit certificate shall contain the taxpayer's 4 20 name, address, tax identification number, the amount of the 4 21 credit, and any other information required by the department. 4 22 (3) The tax credit certificate, unless rescinded by the 4 23 department, shall be accepted by the department as payment 4 24 for the taxes under this division or division III, subject 4 25 to any conditions or restrictions placed by the department 4 26 upon the face of the tax credit certificate and subject to the 4 27 limitations of this section. 4 28 Sec. 10. EFFECTIVE UPON ENACTMENT. This division of this 4 29 Act, being deemed of immediate importance, takes effect upon 4 30 enactment. 4 31 Sec. 11. RETROACTIVE APPLICABILITY. This division of this 4 32 Act applies retroactively to January 1, 2017, for tax years 4 33 beginning on or after that date and for biodiesel blended fuel 4 34 sold on or after that date. 4 35 Sec. 12. TRANSITION PROVISIONS. For a retail dealer whose 5 1 tax year is not on a calendar year basis, the retailer shall 5 2 calculate tax credits for the tax year beginning in calendar 5 3 year 2016, and ending in calendar year 2017 as follows: 5 4 1. For the period beginning on the first day of the retail 5 5 dealer's tax year until December 31, the retail dealer shall 5 6 calculate a tax credit in the same manner as a retail dealer 5 7 who calculates the tax credit on that same December 31 as 5 8 provided in section 422.11P, subsection 4, Code 2017. 5 9 2. For any period beginning on or after January 1, 2017, 5 10 the retail dealer shall calculate a tax credit as provided in 5 11 section 422.11P, as amended in this division of this Act. 5 12 DIVISION III 5 13 E=15 PLUS GASOLINE PROMOTION TAX CREDIT 5 14 Sec. 13. Section 422.11Y, subsection 3, paragraph a, 5 15 subparagraph (1), Code 2017, is amended to read as follows: 5 16 (1) The taxpayer is a retail dealer who sells and dispenses 5 17 qualifying ethanol blended gasoline through a motor fuel pump 5 18 located at the retail dealer's retail motor fuel site during 5 19 the calendar yearor parts of the calendar yearsfor which the 5 20 tax credit is claimed as provided in this section. 5 21 Sec. 14. Section 422.11Y, subsection 4, unnumbered 5 22 paragraph 1, Code 2017, is amended to read as follows: 5 23For a retail dealer whose tax year is on a calendar year 5 24 basis, theA retail dealer shall calculate the amount of the 5 25 tax credit by multiplying a designated rate by the retail 5 26 dealer's total ethanol blended gasoline gallonage for the 5 27 calendar year as provided in section 452A.31 which qualifies 5 28 under this subsection. 5 29 Sec. 15. Section 422.11Y, subsection 5, Code 2017, is 5 30 amended by striking the subsection and inserting in lieu 5 31 thereof the following: 5 32 5. a. To receive a tax credit under this section, a retail 5 33 dealer must submit an application in the manner and form 5 34 prescribed by the department. The department may establish an 5 35 application deadline or require a retail dealer to apply for 6 1 the credit on or in conjunction with the retail dealer's annual 6 2 report required under section 452A.33. 6 3 b. The department shall issue tax credits and related tax 6 4 credit certificates to qualifying retail dealers on a calendar 6 5 year basis, which tax credits shall not exceed an aggregate 6 6 amount of four hundred thirty thousand two hundred dollars per 6 7 calendar year. In the event the aggregate amount of tax credit 6 8 claims for a calendar year exceeds four hundred thirty thousand 6 9 two hundred dollars, the department shall reduce in a prorated 6 10 fashion all tax credit claims until the aggregate credit claims 6 11 equal four hundred thirty thousand two hundred dollars. 6 12 c. The tax credit may be claimed for the tax year ending 6 13 on or after January 1 of the calendar year for which the tax 6 14 credit is calculated as provided in subsection 4. For an 6 15 individual claiming the tax credit allowed another entity 6 16 pursuant to subsection 8, the tax credit may be claimed for the 6 17 individual's tax year beginning on or after the first day of 6 18 the tax year for which the other entity was allowed to claim 6 19 the tax credit. 6 20 d. (1) To claim a tax credit under this section, a taxpayer 6 21 shall include one or more tax credit certificates with the 6 22 taxpayer's tax return. 6 23 (2) The tax credit certificate shall contain the taxpayer's 6 24 name, address, tax identification number, the amount of the 6 25 credit, and any other information required by the department. 6 26 (3) The tax credit certificate, unless rescinded by the 6 27 department, shall be accepted by the department as payment 6 28 for the taxes under this division or division III, subject 6 29 to any conditions or restrictions placed by the department 6 30 upon the face of the tax credit certificate and subject to the 6 31 limitations of this section. 6 32 Sec. 16. EFFECTIVE UPON ENACTMENT. This division of this 6 33 Act, being deemed of immediate importance, takes effect upon 6 34 enactment. 6 35 Sec. 17. RETROACTIVE APPLICABILITY. This division of this 7 1 Act applies retroactively to January 1, 2017, for tax years 7 2 beginning on or after that date and for qualifying ethanol 7 3 blended gasoline sold on or after that date. 7 4 Sec. 18. TRANSITION PROVISIONS. For a retail dealer whose 7 5 tax year is not on a calendar year basis, the retailer shall 7 6 calculate tax credits for the tax year beginning in calendar 7 7 year 2016, and ending in calendar year 2017 as follows: 7 8 1. For the period beginning on the first day of the retail 7 9 dealer's tax year until December 31, the retail dealer shall 7 10 calculate a tax credit in the same manner as a retail dealer 7 11 who calculates the tax credit on that same December 31 as 7 12 provided in section 422.11Y, subsection 4, Code 2017. 7 13 2. For any period beginning on or after January 1, 2017, 7 14 the retail dealer shall calculate a tax credit as provided in 7 15 section 422.11Y, as amended in this division of this Act. 7 16 DIVISION IV 7 17 E=85 GASOLINE PROMOTION TAX CREDIT 7 18 Sec. 19. Section 422.11O, subsection 2, paragraph a, 7 19 subparagraph (1), Code 2017, is amended to read as follows: 7 20 (1) The taxpayer is a retail dealer who sells and dispenses 7 21 E=85 gasoline through a motor fuel pump located at the retail 7 22 dealer's retail motor fuel site during the calendar yearor 7 23 parts of the calendar yearfor which the tax credit is claimed 7 24 as provided in this section. 7 25 Sec. 20. Section 422.11O, subsection 3, Code 2017, is 7 26 amended to read as follows: 7 27 3.For a retail dealer whose tax year is on a calendar year 7 28 basis, theA retail dealer shall calculate the amount of the 7 29 tax credit by multiplying a designated rate of sixteen cents 7 30 by the retail dealer's total E=85 gasoline gallonage for the 7 31 calendar year as provided in sections 452A.31 and 452A.32. 7 32 Sec. 21. Section 422.11O, subsection 4, Code 2017, is 7 33 amended by striking the subsection and inserting in lieu 7 34 thereof the following: 7 35 4. a. To receive a tax credit under this section, a retail 8 1 dealer must submit an application in the manner and form 8 2 prescribed by the department. The department may establish an 8 3 application deadline or require a retail dealer to apply for 8 4 the credit on or in conjunction with the retail dealer's annual 8 5 report required under section 452A.33. 8 6 b. The department shall issue tax credits and related tax 8 7 credit certificates to qualifying retail dealers on a calendar 8 8 year basis, which tax credits shall not exceed an aggregate 8 9 amount of two million five hundred eleven thousand one 8 10 hundred dollars per calendar year. In the event the aggregate 8 11 amount of tax credit claims for a calendar year exceeds two 8 12 million five hundred eleven thousand one hundred dollars, the 8 13 department shall reduce in a prorated fashion all tax credit 8 14 claims until the aggregate credit claims equal two million five 8 15 hundred eleven thousand one hundred dollars. 8 16 c. The tax credit may be claimed for the tax year ending 8 17 on or after January 1 of the calendar year for which the tax 8 18 credit is calculated as provided in subsection 3. For an 8 19 individual claiming the tax credit allowed another entity 8 20 pursuant to subsection 7, the tax credit may be claimed for the 8 21 individual's tax year beginning on or after the first day of 8 22 the tax year for which the other entity was allowed to claim 8 23 the tax credit. 8 24 d. (1) To claim a tax credit under this section, a taxpayer 8 25 shall include one or more tax credit certificates with the 8 26 taxpayer's tax return. 8 27 (2) The tax credit certificate shall contain the taxpayer's 8 28 name, address, tax identification number, the amount of the 8 29 credit, and any other information required by the department. 8 30 (3) The tax credit certificate, unless rescinded by the 8 31 department, shall be accepted by the department as payment 8 32 for the taxes under this division or division III, subject 8 33 to any conditions or restrictions placed by the department 8 34 upon the face of the tax credit certificate and subject to the 8 35 limitations of this section. 9 1 Sec. 22. EFFECTIVE UPON ENACTMENT. This division of this 9 2 Act, being deemed of immediate importance, takes effect upon 9 3 enactment. 9 4 Sec. 23. RETROACTIVE APPLICABILITY. This division of this 9 5 Act applies retroactively to January 1, 2017, for tax years 9 6 beginning on or after that date and for E=85 gasoline sold on 9 7 or after that date. 9 8 Sec. 24. TRANSITION PROVISIONS. For a retail dealer whose 9 9 tax year is not on a calendar year basis, the retailer shall 9 10 calculate tax credits for the tax year beginning in calendar 9 11 year 2016, and ending in calendar year 2017 as follows: 9 12 1. For the period beginning on the first day of the retail 9 13 dealer's tax year until December 31, the retail dealer shall 9 14 calculate a tax credit in the same manner as a retail dealer 9 15 who calculates the tax credit on that same December 31 as 9 16 provided in section 422.11O, subsection 3, Code 2017. 9 17 2. For any period beginning on or after January 1, 2017, 9 18 the retail dealer shall calculate a tax credit as provided in 9 19 section 422.11O, as amended in this division of this Act. 9 20 DIVISION V 9 21 ETHANOL PROMOTION TAX CREDIT 9 22 Sec. 25. Section 422.11N, subsection 3, paragraph a, Code 9 23 2017, is amended to read as follows: 9 24 a. The taxpayer is a retail dealer who sells and dispenses 9 25 ethanol blended gasoline through a motor fuel pump located 9 26 at the retail dealer's retail motor fuel site during the 9 27 determination periodor parts of the determination periodsfor 9 28 which the tax credit is claimed as provided in this section. 9 29 Sec. 26. Section 422.11N, subsection 6, paragraph a, 9 30 unnumbered paragraph 1, Code 2017, is amended to read as 9 31 follows: 9 32For a retail dealer whose tax year is the same as a 9 33 determination period beginning on January 1 and ending on 9 34 December 31, theA retail dealer's tax credit is calculated 9 35 by multiplying the retail dealer's total ethanol gallonage 10 1 for the determination period by a tax credit rate, which may 10 2 be adjusted based on the retail dealer's biofuel threshold 10 3 percentage disparity. The tax credit rate is as follows: 10 4 Sec. 27. Section 422.11N, subsection 6, paragraph b, Code 10 5 2017, is amended by striking the paragraph. 10 6 Sec. 28. Section 422.11N, Code 2017, is amended by adding 10 7 the following new subsection: 10 8 NEW SUBSECTION. 7A. a. To receive a tax credit under this 10 9 section, a retail dealer must submit an application in the 10 10 manner and form prescribed by the department. The department 10 11 may establish an application deadline or require a retail 10 12 dealer to apply for the credit on or in conjunction with the 10 13 retail dealer's annual report required under section 452A.33. 10 14 b. The department shall issue tax credits and related tax 10 15 credit certificates to qualifying retail dealers on a calendar 10 16 year basis, which tax credits shall not exceed an aggregate 10 17 amount of one million seventy=one thousand five hundred 10 18 dollars per determination period. In the event the aggregate 10 19 amount of tax credit claims for a determination period exceeds 10 20 one million seventy=one thousand five hundred dollars, the 10 21 department shall reduce in a prorated fashion all tax credit 10 22 claims until the aggregate credit claims equal one million 10 23 seventy=one thousand five hundred dollars. 10 24 c. The tax credit may be claimed for the tax year ending 10 25 on or after January 1 of the determination period for which 10 26 the tax credit is calculated as provided in subsection 6. For 10 27 an individual claiming the tax credit allowed another entity 10 28 pursuant to subsection 9, the tax credit may be claimed for the 10 29 individual's tax year beginning on or after the first day of 10 30 the tax year for which the other entity was allowed to claim 10 31 the tax credit. 10 32 d. (1) To claim a tax credit under this section, a taxpayer 10 33 shall include one or more tax credit certificates with the 10 34 taxpayer's tax return. 10 35 (2) The tax credit certificate shall contain the taxpayer's 11 1 name, address, tax identification number, the amount of the 11 2 credit, and any other information required by the department. 11 3 (3) The tax credit certificate, unless rescinded by the 11 4 department, shall be accepted by the department as payment 11 5 for the taxes under this division or division III, subject 11 6 to any conditions or restrictions placed by the department 11 7 upon the face of the tax credit certificate and subject to the 11 8 limitations of this section. 11 9 Sec. 29. EFFECTIVE UPON ENACTMENT. This division of this 11 10 Act, being deemed of immediate importance, takes effect upon 11 11 enactment. 11 12 Sec. 30. RETROACTIVE APPLICABILITY. This division of 11 13 this Act applies retroactively to January 1, 2017, for tax 11 14 years beginning on or after that date and for ethanol blended 11 15 gasoline sold on or after that date. 11 16 Sec. 31. TRANSITION PROVISIONS. For a retail dealer whose 11 17 tax year is not on a calendar year basis, the retailer shall 11 18 calculate tax credits for the tax year beginning in calendar 11 19 year 2016, and ending in calendar year 2017 as follows: 11 20 1. For the period beginning on the first day of the retail 11 21 dealer's tax year until December 31, the retail dealer shall 11 22 calculate a tax credit in the same manner as a retail dealer 11 23 who calculates the tax credit on that same December 31 as 11 24 provided in section 422.11N, subsection 6, paragraph "a", Code 11 25 2017. 11 26 2. For any period beginning on or after January 1, 2017, 11 27 the retail dealer shall calculate a tax credit as provided in 11 28 section 422.11N, as amended in this division of this Act. 11 29 DIVISION VI 11 30 HISTORIC PRESERVATION AND CULTURAL AND ENTERTAINMENT DISTRICT 11 31 TAX CREDIT 11 32 Sec. 32. Section 404A.2, subsection 1, Code 2017, is amended 11 33 to read as follows: 11 34 1. An eligible taxpayer who has entered into an agreement 11 35 under section 404A.3, subsection 3, is eligible to receive a 12 1 historic preservation and cultural and entertainment district 12 2 tax credit in an amount equal totwenty=fivefifteen percent 12 3 of the qualified rehabilitation expenditures of a qualified 12 4 rehabilitation project that are specified in the agreement. 12 5 Notwithstanding any other provision of this chapter or any 12 6 provision in the agreement to the contrary, the amount of the 12 7 tax credits shall not exceedtwenty=fivefifteen percent of the 12 8 final qualified rehabilitation expenditures verified by the 12 9 authority pursuant to section 404A.3, subsection 5, paragraph 12 10 "c". 12 11 Sec. 33. Section 404A.4, subsection 1, paragraph a, Code 12 12 2017, is amended to read as follows: 12 13 a. Except as provided in subsections 2 and 3, the authority 12 14 shall not award in any one fiscal year an amount of tax credits 12 15 provided in section 404A.2 in excess offorty=fivethirty=five 12 16 million dollars. 12 17 Sec. 34. APPLICABILITY. This section of this division 12 18 of this Act amending section 404A.2, subsection 1, applies 12 19 to qualified rehabilitation projects registered on or after 12 20 July 1, 2017, and qualified rehabilitation projects registered 12 21 prior to July 1, 2017, shall be governed by section 404A.2, 12 22 subsection 1, Code 2017. 12 23 DIVISION VII 12 24 SOLAR ENERGY SYSTEM TAX CREDIT 12 25 Sec. 35. Section 422.11L, subsection 1, Code 2017, is 12 26 amended to read as follows: 12 27 1. The taxes imposed under this division, less the credits 12 28 allowed under section 422.12, shall be reduced by a solar 12 29 energy system tax credit equal to the sum of the following: 12 30 a.SixtyForty percent of the federal residential energy 12 31 efficient property credit related to solar energy provided in 12 32 section 25D(a)(1) and section 25D(a)(2) of the Internal Revenue 12 33 Code, not to exceed five thousand dollars. 12 34 b.SixtyForty percent of the federal energy credit related 12 35 to solar energy systems provided in section 48(a)(2)(A)(i)(II) 13 1 and section 48(a)(2)(A)(i)(III) of the Internal Revenue Code, 13 2 not to exceed twenty thousand dollars. 13 3c. Notwithstanding paragraphs "a" and "b" of this 13 4 subsection, for installations occurring on or after January 1, 13 5 2016, the applicable percentages of the federal residential 13 6 energy efficiency property tax credit related to solar energy 13 7 and the federal energy credit related to solar energy systems 13 8 shall be fifty percent.13 9 Sec. 36. Section 422.11L, subsection 4, paragraph a, Code 13 10 2017, is amended to read as follows: 13 11 a. The cumulative value of tax credits claimed annually by 13 12 applicants pursuant to this section shall not exceedfivefour 13 13 million dollars. Of this amount, at least one million dollars 13 14 shall be reserved for claims associated with or resulting from 13 15 residential solar energy system installations. In the event 13 16 that the total amount of claims submitted for residential solar 13 17 energy system installations in a tax year is an amount less 13 18 than one million dollars, the remaining unclaimed reserved 13 19 amount shall be made available for claims associated with or 13 20 resulting from nonresidential solar energy system installations 13 21 received for the tax year. 13 22 Sec. 37. Section 422.33, subsection 29, paragraph a, Code 13 23 2017, is amended to read as follows: 13 24 a. The taxes imposed under this division shall be reduced 13 25 by a solar energy system tax credit equal tosixtyforty 13 26 percent of the federal energy credit related to solar energy 13 27 systems provided in section 48(a)(2)(A)(i)(II) and section 13 28 48(a)(2)(A)(i)(III) of the Internal Revenue Code, not to exceed 13 29 twenty thousand dollars.For installations occurring on or 13 30 after January 1, 2016, the applicable percentage of the federal 13 31 energy credit related to solar energy systems shall be fifty 13 32 percent.13 33 Sec. 38. Section 422.60, subsection 12, paragraph a, Code 13 34 2017, is amended to read as follows: 13 35 a. The taxes imposed under this division shall be reduced 14 1 by a solar energy system tax credit equal tosixtyforty 14 2 percent of the federal energy credit related to solar energy 14 3 systems provided in section 48(a)(2)(A)(i)(II) and section 14 4 48(a)(2)(A)(i)(III) of the Internal Revenue Code, not to exceed 14 5 twenty thousand dollars.For installations occurring on or 14 6 after January 1, 2016, the applicable percentage of the federal 14 7 energy credit related to solar energy systems shall be fifty 14 8 percent.14 9 Sec. 39. EFFECTIVE UPON ENACTMENT. This division of this 14 10 Act, being deemed of immediate importance, takes effect upon 14 11 enactment. 14 12 Sec. 40. RETROACTIVE APPLICABILITY. The following 14 13 provision or provisions of this division of this Act apply 14 14 retroactively to January 1, 2017, for tax years beginning and 14 15 installations occurring on or after that date: 14 16 1. The section of this division of this Act amending section 14 17 422.11L, subsection 4, paragraph "a". 14 18 Sec. 41. APPLICABILITY. The following provision or 14 19 provisions of this division of this Act apply to installations 14 20 occurring on or after the effective date of this division of 14 21 this Act: 14 22 1. The section of this division of this Act amending section 14 23 422.11L, subsection 1. 14 24 2. The section of this division of this Act amending section 14 25 422.33, subsection 29, paragraph "a". 14 26 3. The section of this division of this Act amending section 14 27 422.60, subsection 12, paragraph "a". 14 28 DIVISION VIII 14 29 GEOTHERMAL HEAT PUMP TAX CREDIT 14 30 Sec. 42. Section 422.11I, Code 2017, is amended to read as 14 31 follows: 14 32 422.11I Geothermal heat pump tax credit. 14 33 1. The taxes imposed under this division, less the credits 14 34 allowed under section 422.12, shall be reduced by a geothermal 14 35 heat pump tax credit equal totwentysixteen percent of the 15 1 federal residential energy efficient property tax credit 15 2 allowed for geothermal heat pumps provided in section 25D(a)(5) 15 3 of the Internal Revenue Code for residential property located 15 4 in Iowa. 15 5 2. a. To receive a tax credit under this section, a 15 6 taxpayer must submit an application in the manner and form 15 7 prescribed by the department by May 1 following the calendar 15 8 year of the installation of the qualified geothermal heat 15 9 pump property that is the subject of the federal credit. The 15 10 application must be approved by the department in order to 15 11 receive a tax credit certificate and claim the tax credit. 15 12 b. The department shall issue tax credits and related 15 13 tax credit certificates on a first=come, first=served basis 15 14 in the order the applications are received until the maximum 15 15 amount of tax credits authorized pursuant to subsection 3 is 15 16 reached. If for a calendar year the maximum amount of tax 15 17 credits applied for exceeds the amount specified in subsection 15 18 3, the department shall establish a wait list for tax credits. 15 19 Valid applications filed by the taxpayer by May 1 following 15 20 the calendar year of the installation but not approved by 15 21 the department shall be placed on a wait list in the order 15 22 the applications were received and those applicants shall 15 23 be given priority for having their applications approved 15 24 in succeeding years. Placement on a wait list pursuant to 15 25 this paragraph shall not constitute a promise binding the 15 26 state. The availability of a tax credit and issuance of a tax 15 27 credit certificate pursuant to this section in a future year 15 28 is contingent upon the availability of tax credits in that 15 29 particular year. 15 30 c. For tax credit certificates issued in the calendar 15 31 year of the installation or the calendar year following the 15 32 installation, the tax credit may be claimed for the applicant's 15 33 tax year during which the installation was completed. For tax 15 34 credit certificates issued in any later calendar year, the tax 15 35 credit may be claimed for the applicant's tax year during which 16 1 the tax credit is issued. 16 2 d. (1) To claim a tax credit under this section, a taxpayer 16 3 shall include one or more tax credit certificates with the 16 4 taxpayer's tax return. 16 5 (2) The tax credit certificate shall contain the taxpayer's 16 6 name, address, tax identification number, the amount of the 16 7 credit, and any other information required by the department. 16 8 (3) The tax credit certificate, unless rescinded by the 16 9 department, shall be accepted by the department as payment 16 10 for the taxes imposed under this division, subject to any 16 11 conditions or restrictions placed by the department upon 16 12 the face of the tax credit certificate and subject to the 16 13 limitations of this section. 16 14 3. The maximum aggregate amount of tax credits issued in a 16 15 calendar year pursuant to this section shall not exceed three 16 16 hundred seventy=six thousand twenty dollars. 16 17 4. Any credit in excess of the tax liability is not 16 18 refundable but the excess for the tax year may be credited 16 19 to the tax liability for the following ten years or until 16 20 depleted, whichever is earlier. 16 21 5. The director of revenue shall adopt rules to implement 16 22 this section. 16 23 Sec. 43. EFFECTIVE UPON ENACTMENT. This division of this 16 24 Act, being deemed of immediate importance, takes effect upon 16 25 enactment. 16 26 Sec. 44. RETROACTIVE APPLICABILITY. This division of this 16 27 Act applies retroactively to January 1, 2017, for tax years 16 28 beginning on or after that date. 16 29 DIVISION IX 16 30 GEOTHERMAL TAX CREDIT 16 31 Sec. 45. Section 422.10A, subsection 2, Code 2017, is 16 32 amended to read as follows: 16 33 2. Except as provided in subsection 6, the taxes imposed 16 34 under this division, less the credits allowed under section 16 35 422.12, shall be reduced by a geothermal tax credit equal 17 1 toteneight percent of the qualified geothermal heat pump 17 2 property expenditures made by the taxpayer during the tax year. 17 3 Sec. 46. Section 422.10A, Code 2017, is amended by adding 17 4 the following new subsections: 17 5 NEW SUBSECTION. 4A. a. To receive a tax credit under this 17 6 section, a taxpayer must submit an application in the manner 17 7 and form prescribed by the department by May 1 following the 17 8 calendar year of the installation of the qualified geothermal 17 9 heat pump property. The application must be approved by the 17 10 department in order to receive a tax credit certificate and 17 11 claim the tax credit. 17 12 b. The department shall issue tax credits and related 17 13 tax credit certificates on a first=come, first=served basis 17 14 in the order the applications are received until the maximum 17 15 amount of tax credits authorized pursuant to subsection 4B is 17 16 reached. If for a calendar year the maximum amount of tax 17 17 credits applied for exceeds the amount specified in subsection 17 18 4B, the department shall establish a wait list for tax credits. 17 19 Valid applications filed by the taxpayer by May 1 following 17 20 the calendar year of the installation but not approved by 17 21 the department shall be placed on a wait list in the order 17 22 the applications were received and those applicants shall 17 23 be given priority for having their applications approved 17 24 in succeeding years. Placement on a wait list pursuant to 17 25 this paragraph shall not constitute a promise binding the 17 26 state. The availability of a tax credit and issuance of a tax 17 27 credit certificate pursuant to this section in a future year 17 28 is contingent upon the availability of tax credits in that 17 29 particular year. 17 30 c. For tax credit certificates issued in the calendar 17 31 year of the installation or the calendar year following the 17 32 installation, the tax credit may be claimed for the applicant's 17 33 tax year during which the installation was completed. For tax 17 34 credit certificates issued in any later calendar year, the tax 17 35 credit may be claimed for the applicant's tax year during which 18 1 the tax credit is issued. 18 2 d. (1) To claim a tax credit under this section, a taxpayer 18 3 shall include one or more tax credit certificates with the 18 4 taxpayer's tax return. 18 5 (2) The tax credit certificate shall contain the taxpayer's 18 6 name, address, tax identification number, the amount of the 18 7 credit, and any other information required by the department. 18 8 (3) The tax credit certificate, unless rescinded by the 18 9 department, shall be accepted by the department as payment 18 10 for the taxes imposed under this division, subject to any 18 11 conditions or restrictions placed by the department upon 18 12 the face of the tax credit certificate and subject to the 18 13 limitations of this section. 18 14 NEW SUBSECTION. 4B. The maximum aggregate amount of tax 18 15 credits issued in a calendar year pursuant to this section 18 16 shall not exceed one million five hundred thousand dollars. 18 17 Sec. 47. EFFECTIVE UPON ENACTMENT. This division of this 18 18 Act, being deemed of immediate importance, takes effect upon 18 19 enactment. 18 20 Sec. 48. RETROACTIVE APPLICABILITY. The following 18 21 provision or provisions of this division of this Act apply 18 22 retroactively to January 1, 2017, for tax years beginning and 18 23 installations occurring on or after that date: 18 24 1. The sections of this division of this Act enacting 18 25 section 422.10A, subsections 4A and 4B. 18 26 Sec. 49. APPLICABILITY. The following provision or 18 27 provisions of this division of this Act apply to installations 18 28 occurring on or after the effective date of this division of 18 29 this Act: 18 30 1. The section of this division of this Act amending section 18 31 422.10A, subsection 2. 18 32 DIVISION X 18 33 INNOVATION FUND TAX CREDIT 18 34 Sec. 50. Section 15E.52, subsection 3, Code 2017, is amended 18 35 to read as follows: 19 1 3. The amount of a tax credit allowed under this section 19 2 shall equaltwenty=fivetwenty percent of the taxpayer's equity 19 3 investment in an innovation fund. 19 4 Sec. 51. EFFECTIVE UPON ENACTMENT. This division of this 19 5 Act, being deemed of immediate importance, takes effect upon 19 6 enactment. 19 7 Sec. 52. APPLICABILITY. This division of this Act applies 19 8 to equity investments in an innovation fund made on or after 19 9 the effective date of this division of this Act, and equity 19 10 investments in an innovation fund made prior to the effective 19 11 date of this division of this Act shall be governed by section 19 12 15E.52, subsection 3, Code 2017. 19 13 DIVISION XI 19 14 ANGEL INVESTOR TAX CREDIT 19 15 Sec. 53. Section 15E.43, subsection 2, paragraph a, Code 19 16 2017, is amended to read as follows: 19 17 a. The amount of the tax credit shall equaltwenty=five 19 18twenty percent of the taxpayer's equity investment. 19 19 Sec. 54. EFFECTIVE UPON ENACTMENT. This division of this 19 20 Act, being deemed of immediate importance, takes effect upon 19 21 enactment. 19 22 Sec. 55. APPLICABILITY. This division of this Act applies 19 23 to equity investments in a qualifying business made on or 19 24 after the effective date of this division of this Act, and 19 25 equity investments in a qualifying business made prior to the 19 26 effective date of this division of this Act shall be governed 19 27 by section 15E.43, subsection 2, paragraph "a", Code 2017. 19 28 DIVISION XII 19 29 RESEARCH ACTIVITIES TAX CREDIT 19 30 Sec. 56. Section 15.335, subsection 8, Code 2017, is amended 19 31 to read as follows: 19 32 8.a. Except as provided in paragraph "b", any credit in 19 33 excess of the taxpayer's tax liability for the tax year is not 19 34 refundable but may be credited to the tax liability for the 19 35 following eight years or until depleted, whichever is earlier. 20 1 b.AnyFor a credit earned by an eligible business that is 20 2 a new claimant, any credit in excess of the tax liability for 20 3 the taxable year shall be refunded with interest computed under 20 4 section 422.25. In lieu of claiming a refund, a taxpayer may 20 5 elect to have the overpayment shown on its final, completed 20 6 return credited to the tax liability for the following year. 20 7 The amount of credit claimed by an individual or entity which 20 8 credit amount was received from a partnership, S corporation, 20 9 limited liability company, estate, or trust electing to 20 10 have the income taxed directly to the owners, shall not be 20 11 refundable pursuant to this paragraph "b" unless the eligible 20 12 business that ultimately earned the credit is a new claimant. 20 13 c. For purposes of this subsection, "new claimant" means the 20 14 same as defined in section 422.10, subsection 3, paragraph "c". 20 15 Sec. 57. Section 422.10, subsection 1, paragraph a, 20 16 subparagraph (1), subparagraph divisions (a) and (b), Code 20 17 2017, are amended to read as follows: 20 18 (a)SixFive and one=half percent of the excess of qualified 20 19 research expenses during the tax year over the base amount for 20 20 the tax year based upon the state's apportioned share of the 20 21 qualifying expenditures for increasing research activities. 20 22 (b)SixFive and one=half percent of the basic research 20 23 payments determined under section 41(e)(1)(A) of the Internal 20 24 Revenue Code during the tax year based upon the state's 20 25 apportioned share of the qualifying expenditures for increasing 20 26 research activities. 20 27 Sec. 58. Section 422.10, subsection 1, paragraph c, Code 20 28 2017, is amended to read as follows: 20 29 c. For purposes of the alternate credit computation 20 30 method in paragraph "b", the credit percentages applicable to 20 31 qualified research expenses described in section 41(c)(5)(A) 20 32 and clause (ii) of section 41(c)(5)(B) of the Internal Revenue 20 33 Code arefour and fifty=fivethree and eighty=five hundredths 20 34 percent and one andninety=fivesixty=one hundredths percent, 20 35 respectively. 21 1 Sec. 59. Section 422.10, subsection 2, Code 2017, is amended 21 2 to read as follows: 21 3 2. For purposes of this section, an individual may 21 4 claim a research creditincurredearned by a partnership, 21 5 S corporation, limited liability company, estate, or trust 21 6 electing to have the income taxed directly to the individual. 21 7 The amount claimed by the individual shall be based upon the 21 8 pro rata share of the individual's earnings of a partnership, S 21 9 corporation, limited liability company, estate, or trust. 21 10 Sec. 60. Section 422.10, subsection 3, Code 2017, is amended 21 11 by adding the following new paragraph: 21 12 NEW PARAGRAPH. c. (1) For purposes of this section, 21 13 "new claimant" means an entity that did not earn the research 21 14 activities credit provided under this section, section 15.335, 21 15 or section 422.33, subsection 5, for a tax year ending on or 21 16 before January 1, 2014. 21 17 (2) An entity that meets the requirements of subparagraph 21 18 (1) shall be considered a new claimant for a period of five tax 21 19 years beginning with the first tax year for which the entity 21 20 earned the research activities credit provided under this 21 21 section, section 15.335, or section 422.33, subsection 5. 21 22 (3) Notwithstanding subparagraphs (1) and (2), an entity 21 23 shall not be considered a new claimant if such entity is an 21 24 affiliate of an entity that does not qualify as a new claimant 21 25 under subparagraph (1), or is an affiliate of an entity that 21 26 has exceeded the five=year period for a new claimant provided 21 27 under subparagraph (2). For purposes of this subparagraph (3), 21 28 "affiliate" means the same as defined in section 423.1. 21 29 Sec. 61. Section 422.10, subsection 4, Code 2017, is amended 21 30 to read as follows: 21 31 4.a. Except as provided in paragraph "b", any credit in 21 32 excess of the taxpayer's tax liability for the tax year is not 21 33 refundable but may be credited to the tax liability for the 21 34 following eight years or until depleted, whichever is earlier. 21 35 b.AnyFor a credit earned by an entity that is a new 22 1 claimant, any credit in excess of the tax liability imposed by 22 2 section 422.5 less the amounts of nonrefundable credits allowed 22 3 under this division for the taxable year shall be refunded with 22 4 interest computed under section 422.25. In lieu of claiming 22 5 a refund, a taxpayer may elect to have the overpayment shown 22 6 on the taxpayer's final, completed return credited to the tax 22 7 liability for the following taxable year. The amount of credit 22 8 claimed by an individual or entity which credit amount was 22 9 received from a partnership, S corporation, limited liability 22 10 company, estate, or trust electing to have the income taxed 22 11 directly to the owners, shall not be refundable pursuant to 22 12 this paragraph "b" unless the partnership, S corporation, 22 13 limited liability company, estate, or trust that ultimately 22 14 earned the credit is a new claimant. 22 15 Sec. 62. Section 422.33, subsection 5, paragraph a, 22 16 subparagraphs (1) and (2), Code 2017, are amended to read as 22 17 follows: 22 18 (1)SixFive and one=half percent of the excess of qualified 22 19 research expenses during the tax year over the base amount for 22 20 the tax year based upon the state's apportioned share of the 22 21 qualifying expenditures for increasing research activities. 22 22 (2)SixFive and one=half percent of the basic research 22 23 payments determined under section 41(e)(1)(A) of the Internal 22 24 Revenue Code during the tax year based upon the state's 22 25 apportioned share of the qualifying expenditures for increasing 22 26 research activities. 22 27 Sec. 63. Section 422.33, subsection 5, paragraph d, Code 22 28 2017, is amended to read as follows: 22 29 d. For purposes of the alternate credit computation 22 30 method in paragraph "c", the credit percentages applicable to 22 31 qualified research expenses described in section 41(c)(5)(A) 22 32 and clause (ii) of section 41(c)(5)(B) of the Internal Revenue 22 33 Code arefour and fifty=fivethree and eighty=five hundredths 22 34 percent and one andninety=fivesixty=one hundredths percent, 22 35 respectively. 23 1 Sec. 64. Section 422.33, subsection 5, paragraph f, Code 23 2 2017, is amended to read as follows: 23 3 f.(1) Except as provided in subparagraph (2), any credit 23 4 in excess of the taxpayer's tax liability for the tax year is 23 5 not refundable but may be credited to the tax liability for the 23 6 following eight years or until depleted, whichever is earlier. 23 7 (2)AnyFor a credit earned by a corporation that is a new 23 8 claimant, any credit in excess of the tax liability for the 23 9 taxable year shall be refunded with interest computed under 23 10 section 422.25. In lieu of claiming a refund, a taxpayer may 23 11 elect to have the overpayment shown on its final, completed 23 12 return credited to the tax liability for the following 23 13 taxable year. The amount of credit claimed by a corporation 23 14 which credit amount was received from a partnership, limited 23 15 liability company, estate, or trust electing to have the income 23 16 taxed directly to the owners, shall not be refundable pursuant 23 17 to this subparagraph (2) unless the partnership, limited 23 18 liability company, estate, or trust that ultimately earned the 23 19 credit is a new claimant. 23 20 (3) For purposes of this paragraph, "new claimant" means the 23 21 same as defined in section 422.10, subsection 3, paragraph "c". 23 22 Sec. 65. EFFECTIVE DATE. 23 23 1. Except as provided in subsection 2, this division of this 23 24 Act takes effect January 1, 2018. 23 25 2. The following provision or provisions of this division 23 26 of this Act, being deemed of immediate importance, take effect 23 27 upon enactment: 23 28 a. The section of this division of this Act amending 23 29 section 422.10, subsection 1, paragraph "a", subparagraph (1), 23 30 subparagraph divisions (a) and (b). 23 31 b. The section of this division of this Act amending section 23 32 422.10, subsection 1, paragraph "c". 23 33 c. The section of this division of this Act amending section 23 34 422.33, subsection 5, paragraph "a", subparagraphs (1) and (2). 23 35 d. The section of this division of this Act amending section 24 1 422.33, subsection 5, paragraph "d". 24 2 Sec. 66. RETROACTIVE AND OTHER APPLICABILITY. 24 3 1. Except as provided in subsection 2, this division of this 24 4 Act applies to tax years ending on or after January 1, 2018. 24 5 2. The following provision or provisions of this division of 24 6 this Act apply retroactively to January 1, 2017, for tax years 24 7 ending on or after that date: 24 8 a. The section of this division of this Act amending 24 9 section 422.10, subsection 1, paragraph "a", subparagraph (1), 24 10 subparagraph divisions (a) and (b). 24 11 b. The section of this division of this Act amending section 24 12 422.10, subsection 1, paragraph "c". 24 13 c. The section of this division of this Act amending section 24 14 422.33, subsection 5, paragraph "a", subparagraphs (1) and (2). 24 15 d. The section of this division of this Act amending section 24 16 422.33, subsection 5, paragraph "d". 24 17 Sec. 67. APPLICABILITY. The section of this division 24 18 of this Act amending section 15.335, subsection 8, applies 24 19 to research activities tax credit awards made under the high 24 20 quality jobs program on or after the enactment date of this 24 21 Act, and research activities tax credit awards made under the 24 22 high quality jobs program prior to the enactment date of this 24 23 Act shall be governed by section 15.335, subsection 8, Code 24 24 2017. 24 25 DIVISION XIII 24 26 ECONOMIC DEVELOPMENT AUTHORITY PROGRAMS AND AGGREGATE TAX 24 27 CREDIT LIMIT 24 28 Sec. 68. Section 15.119, subsection 1, Code 2017, is amended 24 29 to read as follows: 24 30 1. a. Notwithstanding any provision to the contrary in any 24 31 of the programs listed in subsection 2, the authority, except 24 32 as provided in paragraph "b", shall not authorize and award for 24 33 any one fiscal year an amount of tax credits for the programs 24 34 specified in subsection 2 that is in excess of one hundred 24 35seventytwenty=eight million dollars. 25 1 b.(1) The authority may authorize an amount of tax credits 25 2 during a fiscal year that is in excess of the amount specified 25 3 in paragraph "a", but the amount of such excess shall not exceed 25 4 twenty percent of the amount specified in paragraph "a", and 25 5 shall be counted against the total amount of tax credits that 25 6 may be authorized for the next fiscal year.25 7(2)Any amount of tax credits authorized and awarded during 25 8 a fiscal year for a program specified in subsection 2 which are 25 9 irrevocably declined by the awarded business on or before June 25 10 30 of the next fiscal year may be reallocated, authorized, and 25 11 awarded during the fiscal year in which the declination occurs. 25 12Tax credits authorized pursuant to this subparagraph shall not 25 13 be considered for purposes of subparagraph (1).25 14 Sec. 69. Section 15.119, subsection 2, paragraph a, Code 25 15 2017, is amended to read as follows: 25 16 a. (1) The high quality jobs program administered pursuant 25 17 to sections 15.326 through 15.336. 25 18 (2) In allocating tax credits pursuant to this subsection 25 19 for the fiscal year beginning July 1, 2016, and ending June 30, 25 20 2017, the authority shall not allocate more than one hundred 25 21 five million dollars for purposes of this paragraph "a". In 25 22 allocating tax credits pursuant to this subsection for each 25 23 fiscal year of the fiscal period beginning July 1,20162017, 25 24 and ending June 30, 2021, the authority shall not allocate more 25 25 thanone hundred fivesixty=five million dollars for purposes 25 26 of this paragraph "a". This subparagraph (2) is repealed July 25 27 1, 2021. 25 28 (3) (a) In allocating tax credits pursuant to this 25 29 subsection for the fiscal year beginning July 1, 2021, and 25 30 ending June 30, 2022, the authority shall not allocate more 25 31 thanone hundred fivesixty=five million dollars for purposes 25 32 of this paragraph "a" if the aggregate amount of renewable 25 33 chemical production tax credits under section 15.319 that were 25 34 awarded on or after July 1, 2018, but before July 1, 2021, 25 35 equals or exceeds twenty=seven million dollars. 26 1 (b) As soon as practicable after June 30, 2021, the 26 2 authority shall notify the general assembly of the aggregate 26 3 amount of renewable chemical production tax credits awarded 26 4 under section 15.319 on or after July 1, 2018, but before 26 5 July 1, 2021, and whether or not the tax credit allocation 26 6 limitation described in subparagraph division (a) is 26 7 applicable. 26 8 (c) If the tax credit allocation limitation described in 26 9 subparagraph division (a) is not applicable, the authority 26 10 shall not allocate more than eighty million dollars for 26 11 purposes of this paragraph "a" for the fiscal year beginning 26 12 July 1, 2021, and ending June 30, 2022. 26 13(c)(d) This subparagraph (3) is repealed July 1, 2022. 26 14 (4) In allocating tax credits pursuant to this subsection 26 15 for fiscal years beginning on or after July 1, 2022, the 26 16 authority shall not allocate more than eighty million dollars 26 17 for purposes of this paragraph "a". 26 18 Sec. 70. Section 15.119, subsection 3, Code 2017, is amended 26 19 to read as follows: 26 20 3. In allocating the amount of tax credits authorized 26 21 pursuant to subsection 1 among the programs specified in 26 22 subsection 2, the authority shall not allocate more thanten 26 23eight million dollars for purposes of subsection 2, paragraph 26 24 "f". 26 25 DIVISION XIV 26 26 TRANSFERS TO CASH RESERVE FUND AND TAXPAYERS TRUST FUND 26 27 Sec. 71. Section 8.57E, subsection 2, Code 2017, is amended 26 28 to read as follows: 26 29 2. a. Moneys in the taxpayers trust fund shall only be used 26 30 pursuant to appropriations or transfers made by the general 26 31 assembly for tax relief. 26 32 b. During each fiscal year beginning on or after July 1, 26 33 2014, in which the balance of the taxpayers trust fund equals 26 34 or exceeds thirty million dollars, exclusive of the balance 26 35 of the tax expenditure limitation account in subsection 2A, 27 1 there is transferred from the taxpayers trust fund to the 27 2 Iowa taxpayers trust fund tax credit fund created in section 27 3 422.11E, the entire balance of the taxpayers trust fund, except 27 4 the balance of the tax expenditure limitation account in 27 5 subsection 2A, to be used for the Iowa taxpayers trust fund tax 27 6 credit in accordance with section 422.11E, subsection 5. 27 7 Sec. 72. Section 8.57E, Code 2017, is amended by adding the 27 8 following new subsection: 27 9 NEW SUBSECTION. 2A. A tax expenditure limitation account 27 10 shall be created as a separate account in the taxpayers trust 27 11 fund that shall consist of transfers made pursuant to the 27 12 section of this division of this Act entitled designated 27 13 transfers, and moneys in the account shall not be commingled 27 14 with other moneys within the taxpayers trust fund. Interest or 27 15 earnings on moneys deposited in the account shall be credited 27 16 to the account. 27 17 Sec. 73. Section 8.57E, subsection 4, Code 2017, is amended 27 18 to read as follows: 27 19 4. Notwithstanding section 12C.7, subsection 2, interest or 27 20 earnings on moneys deposited in the taxpayers trust fund shall 27 21 be credited to the fund and, if applicable, to the appropriate 27 22 account within the fund. 27 23 Sec. 74. DESIGNATED TRANSFERS. 27 24 1. It is the intent of the general assembly and the purposes 27 25 of this subsection that the increased revenues to the general 27 26 fund of the state resulting from the provisions of this Act, as 27 27 estimated by the department of revenue, shall be transferred 27 28 for a period of time to the cash reserve fund created in 27 29 section 8.56 and the taxpayers trust fund created in section 27 30 8.57E and, to that end, the following transfers shall be made: 27 31 a. During the fiscal year beginning July 1, 2017, and ending 27 32 June 30, 2018, there is transferred from the general fund of 27 33 the state to the cash reserve fund created in section 8.56, 27 34 seven million three hundred fifty=eight thousand three hundred 27 35 fifty=two dollars. 28 1 b. During the fiscal year beginning July 1, 2018, and ending 28 2 June 30, 2019, there is transferred from the general fund of 28 3 the state to the tax expenditure limitation account in the 28 4 taxpayers trust fund created in section 8.57E, thirty=three 28 5 million five hundred six thousand eight hundred fifteen 28 6 dollars. 28 7 c. During the fiscal year beginning July 1, 2019, and ending 28 8 June 30, 2020, there is transferred from the general fund of 28 9 the state to the tax expenditure limitation account in the 28 10 taxpayers trust fund created in section 8.57E, fifty=seven 28 11 million six hundred ninety=three thousand one hundred forty=one 28 12 dollars. 28 13 d. During the fiscal year beginning July 1, 2020, and 28 14 ending June 30, 2021, there is transferred from the general 28 15 fund of the state to the tax expenditure limitation account in 28 16 the taxpayers trust fund created in section 8.57E, sixty=five 28 17 million two hundred thirteen thousand thirty=seven dollars. 28 18 2. It is the intent of the general assembly that the 28 19 increased revenues to the general fund of the state resulting 28 20 from the provisions of this Act in fiscal years beginning on 28 21 or after July 1, 2021, shall, at a future time, be estimated 28 22 by the department of revenue and transferred by an Act of the 28 23 general assembly to the tax expenditure limitation account in 28 24 the taxpayers trust fund created in section 8.57E. 28 25 EXPLANATION 28 26 The inclusion of this explanation does not constitute agreement with 28 27 the explanation's substance by the members of the general assembly. 28 28 This bill relates to state revenue and finance by modifying 28 29 numerous tax credits and tax credit programs and providing for 28 30 transfers to the cash reserve fund and the taxpayers trust 28 31 fund. 28 32 DIVISION I == BEGINNING FARMER TAX CREDITS. Division 28 33 I reduces the tax credit rates of the agricultural assets 28 34 transfer tax credit in Code section 16.80 from 7 percent to 28 35 6 percent of the gross amount paid to a taxpayer pursuant 29 1 to an agricultural assets transfer agreement that includes a 29 2 lease on a cash basis, and from 17 percent to 16 percent of 29 3 the amount paid to the taxpayer under an agricultural assets 29 4 transfer agreement that includes a lease on a commodity share 29 5 basis. These changes take effect upon enactment and apply 29 6 retroactively to January 1, 2017, for tax years beginning on 29 7 or after that date. 29 8 The current agricultural assets transfer tax credit program 29 9 is scheduled under current law to be substantially modified 29 10 beginning on January 1, 2018, and the division reduces the 29 11 tax credit rates under that modified program from 5 percent 29 12 to 4.5 percent of the amount paid under an agreement, or from 29 13 15 percent to 14 percent of the amount paid for the sale of 29 14 crops or animals for certain agreements in which the payment 29 15 is exclusively made from the sale of crops or animals. These 29 16 changes take effect January 1, 2018, and apply to tax years 29 17 beginning on or after that date. 29 18 The division also reduces the tax credit rates of the custom 29 19 farming contract tax credit from 7 percent to 6 percent of the 29 20 gross amount paid to the qualified beginning farmer under a 29 21 contract. These changes take effect upon enactment and apply 29 22 retroactively to January 1, 2017, for tax years beginning on 29 23 or after that date. 29 24 DIVISIONS II THROUGH V ==== FUEL TAX CREDITS. Divisions II 29 25 through V make several changes to the biodiesel blended fuel 29 26 tax credit under Code section 422.11P, the E=15 plus gasoline 29 27 promotion tax credit under Code section 422.11Y, the E=85 29 28 gasoline promotion tax credit under Code section 422.11O, and 29 29 the ethanol promotion tax credit under Code section 422.11N 29 30 (collectively referred to as the "fuel tax credits"). 29 31 Under current law, the fuel tax credits have no limit on 29 32 the aggregate amounts that may be claimed annually. The bill 29 33 limits the maximum aggregate amount of tax credits that may 29 34 be claimed to $16 million per calendar year for the biodiesel 29 35 blended fuel tax credit, to $430,200 per calendar year for the 30 1 E=15 plus gasoline promotion tax credit, to $2,511,100 per 30 2 calendar year for the E=85 gasoline promotion tax credit, and 30 3 to $1,071,500 per calendar year for the ethanol promotion tax 30 4 credit. 30 5 Under current law, the fuel tax credits are all administered 30 6 in a substantially similar manner and provide that a tax credit 30 7 may be claimed by any retail dealer who meets the statutory 30 8 requirements on a fiscal year or calendar year basis, depending 30 9 on the tax year of the retail dealer. The bill provides 30 10 that the fuel tax credits shall be calculated on a calendar 30 11 year basis, and requires a retail dealer to submit an annual 30 12 application to the department of revenue (DOR) in the manner 30 13 and form prescribed by DOR. DOR is allowed to establish an 30 14 application deadline or to require a retail dealer to apply 30 15 for the fuel tax credits on or in conjunction with the retail 30 16 dealer's annual motor fuel gallonage report required under Code 30 17 section 452A.33. The bill requires DOR to issue tax credit 30 18 certificates to retail dealers for qualifying fuel tax credits, 30 19 which tax credit certificates may be used as described in the 30 20 bill to claim the applicable fuel tax credit. If the aggregate 30 21 amount of fuel tax credit claims for a calendar year for any 30 22 particular fuel tax credit exceeds the applicable maximum limit 30 23 described above, DOR is required to reduce all tax credit 30 24 claims for that fuel tax credit in a prorated fashion until the 30 25 aggregate tax credit claims equal the applicable maximum amount 30 26 described above. 30 27 The bill includes transition provisions for a retail dealer 30 28 with a fiscal tax year that apply to the retail dealer's 30 29 2016=2017 tax year and that, in general, require a retail 30 30 dealer to calculate a fuel tax credit under current law for 30 31 that portion of the tax year that covers 2016, and then under 30 32 the applicable Code sections as amended in the bill for any 30 33 period beginning on or after January 1, 2017. 30 34 Divisions II through V take effect upon enactment and apply 30 35 retroactively to January 1, 2017, for tax years beginning on 31 1 or after that date, and for biodiesel blended fuel, qualifying 31 2 ethanol blended gasoline, E=85 gasoline, or ethanol blended 31 3 gasoline sold on or after that date. 31 4 DIVISION VI ==== HISTORIC PRESERVATION AND CULTURAL AND 31 5 ENTERTAINMENT DISTRICT TAX CREDIT. Division VI reduces the 31 6 tax credit rate of the historic preservation and cultural and 31 7 entertainment district tax credit in Code chapter 404A from 25 31 8 percent to 15 percent of a qualified rehabilitation project's 31 9 expenditures. This change applies to qualified rehabilitation 31 10 projects registered on or after July 1, 2017. 31 11 The division also reduces from $45 million to $35 million the 31 12 amount of tax credits that may be awarded each fiscal year by 31 13 the economic development authority (EDA). This change takes 31 14 effect July 1, 2017. 31 15 DIVISION VII ==== SOLAR ENERGY SYSTEM TAX CREDIT. Division 31 16 VII reduces the tax credit rate of the solar energy system tax 31 17 credit in Code section 422.11L from 50 percent to 40 percent 31 18 of the applicable federal energy tax credits available for the 31 19 installation of certain solar energy property. This change 31 20 takes effect upon enactment and applies to installations 31 21 occurring on or after that date. 31 22 The division also reduces from $5 million to $4 million 31 23 the cumulative value of tax credits that may be claimed 31 24 annually. This change takes effect upon enactment and applies 31 25 retroactively to January 1, 2017, for tax years beginning on 31 26 or after that date. 31 27 DIVISION VIII ==== GEOTHERMAL HEAT PUMP TAX CREDIT. Division 31 28 VIII reduces the tax credit rate of the geothermal heat pump 31 29 tax credit in Code section 422.11I from 20 percent to 16 31 30 percent of the applicable federal energy tax credit available 31 31 for the installation of certain geothermal heat pump property. 31 32 Under current law, there is no limit on the aggregate amount 31 33 of tax credits that may be claimed annually. The division 31 34 limits the maximum aggregate amount of tax credits per calendar 31 35 year to $376,020, and requires a taxpayer to apply to DOR to 32 1 receive the tax credit. The tax credit application must be 32 2 filed by May 1 following the calendar year of the qualified 32 3 geothermal heat pump property installation. The division 32 4 requires DOR to issue tax credit certificates to qualifying 32 5 taxpayers on a first=come, first=served basis until the 32 6 annual limit ($376,020) is reached, and establishes a wait 32 7 list for qualifying taxpayers who do not receive a tax credit 32 8 certificate because the tax credit limit has been reached. 32 9 Taxpayers shall be placed on the wait list in the order the 32 10 applications are received and shall be given priority for 32 11 receiving a tax credit certificate in a future year, contingent 32 12 on the availability of tax credits in that particular year. 32 13 Tax credit certificates may be used as described in the 32 14 division to claim the geothermal heat pump tax credit. 32 15 The division takes effect upon enactment and applies 32 16 retroactively to January 1, 2017, for tax years beginning on 32 17 or after that date. 32 18 DIVISION IX ==== GEOTHERMAL TAX CREDIT. Division IX reduces 32 19 the tax credit rate of the geothermal tax credit in Code 32 20 section 422.10A from 10 percent to 8 percent of a taxpayer's 32 21 qualified geothermal heat pump property expenditures. This 32 22 change takes effect upon enactment and applies to qualified 32 23 geothermal heat pump property installations occurring on or 32 24 after that date. 32 25 Under current law, there is no limit on the aggregate amount 32 26 of tax credits that may be claimed annually. The division 32 27 limits the maximum aggregate amount of tax credits per calendar 32 28 year to $1.5 million, and requires a taxpayer to apply to DOR 32 29 to receive the tax credit. The tax credit application must be 32 30 filed by May 1 following the calendar year of the qualified 32 31 geothermal heat pump property installation. The division 32 32 requires DOR to issue tax credit certificates to qualifying 32 33 taxpayers on a first=come, first=served basis until the annual 32 34 limit ($1.5 million) is reached, and establishes a wait list 32 35 for qualifying taxpayers who do not receive a tax credit 33 1 certificate because the tax credit limit has been reached. 33 2 Taxpayers shall be placed on the wait list in the order the 33 3 applications are received and shall be given priority for 33 4 receiving a tax credit certificate in a future year, contingent 33 5 on the availability of tax credits in that particular year. 33 6 Tax credit certificates may be used as described in the 33 7 division to claim the geothermal tax credit. These provisions 33 8 take effect upon enactment and apply retroactively to January 33 9 1, 2017, for tax years beginning on or after that date, and 33 10 for geothermal heat pump property installations occurring on 33 11 or after that date. 33 12 DIVISION X ==== INNOVATION FUND TAX CREDIT. Division X reduces 33 13 the tax credit rate of the innovation fund tax credit in Code 33 14 section 15E.52 from 25 percent to 20 percent of a taxpayer's 33 15 equity investment in an innovation fund. The division takes 33 16 effect upon enactment and applies to equity investments in an 33 17 innovation fund made on or after that date. 33 18 DIVISION XI ==== ANGEL INVESTOR TAX CREDIT. Division XI 33 19 reduces the tax credit rate of the tax credit for investments 33 20 in a qualifying business (angel investor tax credit) in Code 33 21 section 15E.43 from 25 percent to 20 percent of a taxpayer's 33 22 equity investment. The division takes effect upon enactment 33 23 and applies to equity investments in a qualifying business made 33 24 on or after that date. 33 25 DIVISION XII ==== RESEARCH ACTIVITIES TAX CREDIT. Division 33 26 XII makes several changes to the research activities tax 33 27 credits under Code sections 15.335, 422.10, and 422.33(5). 33 28 With regard to the research activities tax credits available 33 29 under the individual income tax (Code section 422.10) and the 33 30 corporate income tax (Code section 422.33(5)), the division 33 31 reduces the tax credit rate for the regular calculation method 33 32 from 6.5 percent to 5.5 percent, and the tax credit rates for 33 33 the alternative simplified calculation method from 4.55 and 33 34 1.95 percents to 3.85 and 1.61 percents, respectively. These 33 35 changes take effect upon enactment and apply retroactively to 34 1 January 1, 2017, for tax years ending on or after that date. 34 2 Under current law, any research activities tax credit in 34 3 excess of a taxpayer's tax liability is refundable to the 34 4 taxpayer. The division provides that research activities tax 34 5 credits will no longer be refundable for tax years ending on 34 6 or after January 1, 2018, unless the taxpayer is considered 34 7 a new claimant, but any excess may be carried forward for up 34 8 to eight years. The division defines "new claimant" to be an 34 9 entity that did not earn a research activities tax credit for 34 10 a tax year ending on or before January 1, 2014. A qualifying 34 11 entity shall be considered a new claimant for a period of five 34 12 tax years beginning with the first tax year for which the 34 13 entity earns a research activities tax credit. However, an 34 14 entity shall not be considered a new claimant if the entity is 34 15 an affiliate of an entity that does not qualify or no longer 34 16 qualifies as a new claimant. "Affiliate" is defined in the 34 17 division. 34 18 Research activities tax credits claimed by an individual or 34 19 entity which credits were received from another pass=through 34 20 entity shall not be considered refundable unless the entity 34 21 that ultimately earned the tax credit qualified as a new 34 22 claimant. 34 23 These provisions relating to refundability take effect 34 24 January 1, 2018, and apply to tax years ending on or after that 34 25 date. However, the provisions relating to the refundability of 34 26 the supplemental research activities tax credits (Code section 34 27 15.335) awarded by EDA under the high quality jobs program 34 28 apply to supplemental research activities tax credits awarded 34 29 on or after the enactment date of the bill. 34 30 DIVISION XIII ==== ECONOMIC DEVELOPMENT AUTHORITY PROGRAMS AND 34 31 AGGREGATE TAX CREDIT LIMIT. Current law in Code section 15.119 34 32 limits to $170 million the amount of tax credits that may 34 33 be awarded by EDA per fiscal year under certain EDA programs 34 34 (maximum aggregate tax credit limit). EDA may award up to 20 34 35 percent more tax credits than that amount during a fiscal year, 35 1 but the excess is counted against the maximum aggregate tax 35 2 credit limit for the next fiscal year. The bill decreases the 35 3 maximum aggregate tax credit limit from $170 million to $128 35 4 million and strikes EDA's ability to exceed that amount during 35 5 a fiscal year, for fiscal years beginning on or after July 1, 35 6 2017. 35 7 Also under current law, the programs under EDA's maximum 35 8 aggregate tax credit limit are also subject to annual tax 35 9 credit award limits, including the redevelopment tax credit 35 10 program in Code sections 15.293A and 15.293B and the high 35 11 quality jobs program administered pursuant to Code sections 35 12 15.326 through 15.336. The division reduces the maximum amount 35 13 of redevelopment tax credits that may be awarded per fiscal 35 14 year from $10 million to $8 million for fiscal years beginning 35 15 on or after July 1, 2017. The division reduces the maximum 35 16 amount of high quality jobs program tax credits that may be 35 17 awarded per fiscal year from $105 million to $65 million for 35 18 each fiscal year of the four=year fiscal period beginning July 35 19 1, 2017, and ending June 30, 2021. The division provides that 35 20 the maximum amount of high quality jobs program tax credits 35 21 that may be awarded for FY 2021=2022 will be $65 million if 35 22 the renewable chemical tax credit allocation limit described 35 23 in Code section 15.119(2)(a)(3) is satisfied, or will be $80 35 24 million if not satisfied. For fiscal years beginning on or 35 25 after July 1, 2022, the maximum amount of high quality jobs 35 26 program tax credits that may be awarded per fiscal year shall 35 27 be $80 million. 35 28 DIVISION XIV ==== TRANSFERS TO CASH RESERVE FUND AND TAXPAYERS 35 29 TRUST FUND. Division XIV makes various transfers for four 35 30 fiscal years of the estimated increased revenues from the tax 35 31 credit changes in the bill. For FY 2017=2018, the division 35 32 transfers $7,358,352 from the general fund to the cash 35 33 reserve fund created in Code section 8.56. For FY 2018=2019, 35 34 FY 2019=2020, and FY 2020=2021, the division transfers 35 35 $33,506,815, $57,693,141, and $65,213,037, respectively, from 36 1 the general fund of the state to a tax expenditure limitation 36 2 account created in the division within the taxpayers trust fund 36 3 created in Code section 8.57E. 36 4 The division also provides that it is the intent of the 36 5 general assembly that the increased revenues from the tax 36 6 credit changes in the bill in fiscal years beginning on or 36 7 after July 1, 2022, shall, in the future, be estimated by DOR 36 8 and transferred by an Act of the general assembly to the tax 36 9 expenditure limitation account within the taxpayers trust fund. LSB 2629HV (3) 87 mm/sc/rj
