Bill Text: IA HF697 | 2023-2024 | 90th General Assembly | Introduced
Bill Title: A bill for an act establishing an Iowa housing tax credit program and increasing first-time homebuyer tax incentives, and including effective date and applicability provisions.
Spectrum: Partisan Bill (Democrat 32-0)
Status: (Introduced - Dead) 2023-04-10 - Introduced, referred to State Government. H.J. 781. [HF697 Detail]
Download: Iowa-2023-HF697-Introduced.html
House
File
697
-
Introduced
HOUSE
FILE
697
BY
KONFRST
,
FORBES
,
BAGNIEWSKI
,
CAHILL
,
CROKEN
,
WILSON
,
COOLING
,
BAETH
,
LEVIN
,
TUREK
,
STAED
,
SCHEETZ
,
KURTH
,
AMOS
JR.
,
NIELSEN
,
BUCK
,
WESSEL-KROESCHELL
,
STECKMAN
,
MATSON
,
WILBURN
,
JAMES
,
GAINES
,
JUDGE
,
MADISON
,
JACOBY
,
KRESSIG
,
EHLERT
,
B.
MEYER
,
SRINIVAS
,
BROWN-POWERS
,
OLSON
,
and
SCHOLTEN
A
BILL
FOR
An
Act
establishing
an
Iowa
housing
tax
credit
program
1
and
increasing
first-time
homebuyer
tax
incentives,
and
2
including
effective
date
and
applicability
provisions.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
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DIVISION
I
1
IOWA
HOUSING
TAX
CREDIT
PROGRAM
2
Section
1.
NEW
SECTION
.
16.37A
Definitions.
3
For
purposes
of
this
part,
unless
the
context
otherwise
4
requires:
5
1.
“Compliance
period”
means
the
period
of
fifteen
years
6
beginning
with
the
first
taxable
year
of
the
credit
period.
7
2.
“Credit
period”
means
the
period
of
ten
tax
years
8
beginning
with
the
tax
year
in
which
a
qualified
development
9
is
placed
in
service
and
the
Iowa
housing
tax
credit
may
be
10
claimed.
If
a
qualified
development
consists
of
more
than
11
one
building,
the
qualified
development
is
placed
in
service
12
in
the
tax
year
in
which
the
last
building
of
the
qualified
13
development
is
placed
in
service.
14
3.
“Department”
means
the
Iowa
department
of
revenue.
15
4.
“Qualified
allocation
plan”
means
the
qualified
16
allocation
plan
adopted
by
the
authority
pursuant
to
section
17
42(m)
of
the
Internal
Revenue
Code.
18
5.
“Qualified
basis”
means
the
qualified
basis
determined
19
under
section
42(c)(1)
of
the
Internal
Revenue
Code.
20
6.
“Qualified
development”
means
a
qualified
low-income
21
housing
project
under
section
42(g)
of
the
Internal
Revenue
22
Code
that
is
financed
with
tax-exempt
bonds,
pursuant
to
23
section
42(i)(2)
of
the
Internal
Revenue
Code,
and
located
in
24
this
state.
25
7.
“Taxpayer”
means
an
individual,
a
person,
firm,
26
corporation,
or
other
entity
that
owns
an
interest,
direct
27
or
indirect,
in
a
qualified
development
and
who
claims
a
tax
28
credit
under
section
16.37C.
29
Sec.
2.
NEW
SECTION
.
16.37B
Application
——
review
——
30
authorization.
31
1.
The
authority
shall
develop
a
system
for
the
application,
32
review,
and
authorization
of
Iowa
housing
tax
credits
awarded
33
pursuant
to
this
part
and
shall
control
the
issuance
of
all
tax
34
credit
certificates
to
taxpayers
pursuant
to
this
part.
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2.
Applications
for
Iowa
housing
tax
credits
shall
be
1
accepted
during
an
annual
application
period
established
by
the
2
authority.
3
3.
The
authority
may
authorize
the
tax
credit
if
all
of
the
4
following
conditions
are
satisfied:
5
a.
The
tax
credit
certificate
is
issued
to
a
taxpayer
who
6
has
an
ownership
interest
in
the
qualified
development.
7
b.
The
tax
credit
amount
is
allocated
pursuant
to
a
8
qualified
allocation
plan.
9
c.
The
tax
credit
is
necessary
for
the
financial
feasibility
10
of
the
qualified
development.
11
d.
The
amount
of
the
tax
credit
allocated
to
an
owner
12
does
not
exceed
thirty
percent
of
the
qualified
basis
of
the
13
qualified
development.
14
e.
The
qualified
development
is
the
subject
of
a
recorded
15
restrictive
covenant
requiring
that,
for
the
compliance
period
16
or
for
a
longer
period
agreed
to
by
the
authority
and
the
17
owner
of
the
qualified
development,
the
development
shall
be
18
maintained
and
operated
as
a
qualified
development
and
shall
be
19
in
compliance
with
Tit.
VIII
of
the
federal
Civil
Rights
Act
of
20
1968,
as
amended.
21
4.
Upon
review
of
an
application,
the
authority
may
approve
22
the
qualified
development
for
the
tax
credit
program
provided
23
in
section
16.37C,
and
issue
a
tax
credit
certificate
stating
24
the
amount
of
the
tax
credit
the
authority
determines
the
25
applicant
is
eligible
to
claim
for
each
year
of
the
credit
26
period.
27
5.
Unless
otherwise
provided
in
this
section
or
the
context
28
clearly
requires
otherwise,
the
authority
shall
determine
29
eligibility
for
a
credit
and
allocate
credits
in
accordance
30
with
the
standards
and
requirements
set
forth
in
section
42
of
31
the
Internal
Revenue
Code.
32
6.
An
applicant
that
is
unsuccessful
in
receiving
a
tax
33
credit
award
during
an
annual
application
period
may
make
34
additional
applications
during
subsequent
annual
application
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periods.
Such
applicants
shall
be
required
to
submit
a
new
1
application
which
shall
be
reviewed
in
the
same
manner
as
other
2
applications
in
that
annual
application
period.
3
Sec.
3.
NEW
SECTION
.
16.37C
Iowa
housing
tax
credits
——
4
limits.
5
1.
An
Iowa
housing
tax
credit
shall
be
allowed
against
6
the
taxes
imposed
in
chapter
422,
subchapters
II,
III,
and
V,
7
and
in
chapter
432,
and
against
the
moneys
and
credits
tax
8
imposed
in
section
533.329,
in
the
amount
determined
by
the
9
authority
pursuant
to
this
part.
Any
tax
credit
in
excess
of
10
the
taxpayer’s
liability
for
the
tax
year
is
not
refundable
but
11
may
be
credited
to
the
tax
liability
for
the
following
five
12
years
or
until
depleted,
whichever
is
earlier.
13
2.
An
individual
may
claim
a
tax
credit
under
this
14
subsection
of
a
partnership,
limited
liability
company,
15
S
corporation,
estate,
or
trust
electing
to
have
income
16
taxed
directly
to
the
individual.
The
amount
claimed
by
the
17
individual
shall
be
based
upon
the
pro
rata
share
of
the
18
individual’s
earnings
from
the
partnership,
limited
liability
19
company,
S
corporation,
estate,
or
trust.
20
3.
In
any
calendar
year,
the
aggregate
amount
of
all
tax
21
credits
allocated
by
the
authority
shall
not
exceed
fifteen
22
million
dollars,
plus
the
sum
of
the
following
amounts:
23
a.
The
total
of
all
unallocated
tax
credits,
if
any,
for
the
24
preceding
calendar
years.
25
b.
The
total
amount
of
all
previously
allocated
tax
credits
26
that
have
been
recaptured,
revoked,
canceled,
or
otherwise
27
recovered
by
the
authority.
28
4.
a.
To
claim
a
tax
credit
under
this
section,
a
taxpayer
29
shall
include
one
or
more
tax
credit
certificates
issued
by
the
30
authority
with
the
taxpayer’s
tax
return.
31
b.
The
tax
credit
certificate
shall
contain
the
taxpayer’s
32
name,
address,
tax
identification
number,
the
amount
of
the
33
credit
including
the
amount
the
authority
determines
the
34
taxpayer
is
eligible
to
claim
for
each
year
of
the
credit
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period,
the
name
of
the
qualified
development,
any
other
1
information
required
by
the
department
of
revenue,
and
a
place
2
for
the
name
and
tax
identification
number
of
a
transferee
and
3
the
amount
of
the
tax
credit
being
transferred.
4
c.
Tax
credit
certificates
issued
under
this
section
may
5
be
transferred
to
any
person
or
entity.
Within
ninety
days
6
of
transfer,
the
transferee
shall
submit
the
transferred
tax
7
credit
certificate
to
the
authority
along
with
a
statement
8
containing
the
transferee’s
name,
tax
identification
number,
9
and
address,
the
denomination
that
each
replacement
tax
credit
10
certificate
is
to
carry,
and
any
other
information
required
by
11
the
department
of
revenue.
12
d.
Within
thirty
days
of
receiving
the
transferred
tax
13
credit
certificate
and
the
transferee’s
statement,
the
14
authority
shall
issue
one
or
more
replacement
tax
credit
15
certificates
to
the
transferee.
Each
replacement
tax
credit
16
certificate
must
contain
the
information
required
for
the
17
original
tax
credit
certificate
and
must
have
the
same
18
expiration
date
that
appeared
in
the
transferred
tax
credit
19
certificate.
Tax
credit
certificate
amounts
of
less
than
20
the
minimum
amount
established
by
rule
of
the
Iowa
finance
21
authority
shall
not
be
transferable.
22
e.
A
tax
credit
shall
not
be
claimed
by
a
transferee
23
under
this
section
until
a
replacement
tax
credit
certificate
24
identifying
the
transferee
as
the
proper
holder
has
been
25
issued.
The
transferee
may
use
the
amount
of
the
tax
credit
26
transferred
against
the
taxes
imposed
in
chapter
422,
27
subchapters
II,
III,
and
V,
and
in
chapter
432,
and
against
the
28
moneys
and
credits
tax
imposed
in
section
533.329,
for
any
tax
29
year
the
original
transferor
could
have
claimed
the
tax
credit.
30
Any
consideration
received
for
the
transfer
of
the
tax
credit
31
shall
not
be
included
as
income
under
chapter
422,
subchapters
32
II,
III,
and
V.
Any
consideration
paid
for
the
transfer
of
the
33
tax
credit
shall
not
be
deducted
from
income
under
chapter
422,
34
subchapters
II,
III,
and
V.
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Sec.
4.
NEW
SECTION
.
16.37D
Recapture.
1
1.
As
of
the
last
day
of
any
tax
year
during
the
compliance
2
period,
if
the
amount
of
the
qualified
basis
of
a
qualified
3
development
owned
by
a
taxpayer
claiming
the
credit
is
less
4
than
the
amount
of
the
qualified
basis
as
of
the
last
day
of
the
5
immediately
preceding
tax
year,
the
amount
of
the
taxpayer’s
6
liability
under
this
part
shall
be
increased
by
the
recapture
7
amount
determined
using
the
method
under
section
42(j)
of
the
8
Internal
Revenue
Code.
9
2.
If
a
recapture
event
occurs,
the
taxpayer
shall
include
10
the
recaptured
proportion
of
the
credit
on
the
return
submitted
11
for
the
tax
year
in
which
the
recapture
event
is
identified.
12
Sec.
5.
NEW
SECTION
.
16.37E
Compliance
monitoring.
13
The
authority
shall
monitor
and
oversee
compliance
with
14
sections
16.37A
through
16.37D
and
shall
report
specific
15
occurrences
of
noncompliance
to
the
department.
16
Sec.
6.
NEW
SECTION
.
16.37F
Report
to
the
general
assembly.
17
1.
On
or
before
January
31
of
each
year,
the
authority
shall
18
submit
to
the
general
assembly
a
report
that
includes
all
of
19
the
following:
20
2.
A
statement
of
the
number
of
qualified
developments
for
21
which
the
authority
issued
tax
certificates
that
year.
22
3.
A
description
of
each
qualified
development
for
which
23
the
authority
issued
a
tax
certificate
that
year,
including
the
24
geographic
location
of
the
development,
the
household
type
and
25
any
specific
demographic
information
available
concerning
the
26
residents
intended
to
be
served
by
the
development,
the
income
27
levels
of
residents
intended
to
be
served
by
the
development,
28
and
the
rents
or
set-asides
authorized
for
each
development.
29
4.
An
analysis
of
housing
market
and
demographic
30
information
that
shows
how
the
qualified
developments
for
31
which
the
authority
has
issued
tax
certificates
at
any
time
32
are
addressing
the
need
for
affordable
housing
within
the
33
communities
those
developments
are
intended
to
serve,
and
an
34
analysis
of
any
remaining
disparities
in
the
affordability
of
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housing
within
those
communities.
1
Sec.
7.
NEW
SECTION
.
16.37G
Rules.
2
The
authority
and
the
department
shall
adopt
rules
pursuant
3
to
chapter
17A
as
necessary
for
the
implementation
and
4
administration
of
this
part.
5
Sec.
8.
NEW
SECTION
.
422.10C
Iowa
housing
tax
credit.
6
The
taxes
imposed
under
this
subchapter,
less
the
credits
7
allowed
under
section
422.12,
shall
be
reduced
by
an
Iowa
8
housing
tax
credit
allowed
under
section
16.37C.
9
Sec.
9.
Section
422.33,
Code
2023,
is
amended
by
adding
the
10
following
new
subsection:
11
NEW
SUBSECTION
.
17.
The
taxes
imposed
under
this
subchapter
12
shall
be
reduced
by
an
Iowa
housing
tax
credit
as
allowed
under
13
section
16.37C.
14
Sec.
10.
Section
422.60,
Code
2023,
is
amended
by
adding
the
15
following
new
subsection:
16
NEW
SUBSECTION
.
16.
The
taxes
imposed
under
this
subchapter
17
shall
be
reduced
by
an
Iowa
housing
tax
credit
as
allowed
under
18
section
16.37C.
19
Sec.
11.
NEW
SECTION
.
432.12P
Iowa
housing
tax
credit.
20
The
taxes
imposed
under
this
chapter
shall
be
reduced
by
an
21
Iowa
housing
tax
credit
allowed
under
section
16.37C.
22
Sec.
12.
Section
533.329,
subsection
2,
Code
2023,
is
23
amended
by
adding
the
following
new
paragraph:
24
NEW
PARAGRAPH
.
n.
The
moneys
and
credits
tax
imposed
under
25
this
section
shall
be
reduced
by
an
Iowa
housing
tax
credit
26
allowed
under
section
16.37C.
27
Sec.
13.
CODE
EDITOR
DIRECTIVE.
The
Code
editor
shall
28
designate
sections
16.37A
through
16.37G,
as
enacted
by
29
this
division
of
this
Act,
as
a
new
part
within
chapter
16,
30
subchapter
VII,
and
may
redesignate
the
new
and
preexisting
31
parts,
replace
references
to
sections
16.37A
through
16.37G
32
with
references
to
the
new
part,
and
correct
internal
33
references
as
necessary,
including
references
in
subchapter
or
34
part
headnotes.
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Sec.
14.
EFFECTIVE
DATE.
This
division
of
this
Act
takes
1
effect
January
1,
2024.
2
Sec.
15.
APPLICABILITY.
This
division
of
this
Act
applies
3
to
tax
years
beginning
on
or
after
January
1,
2024.
4
DIVISION
II
5
FIRST-TIME
HOMEBUYER
SAVINGS
ACCOUNTS
6
Sec.
16.
Section
422.7,
subsection
27,
paragraph
a,
7
subparagraph
(1),
subparagraph
division
(a),
subparagraph
8
subdivisions
(i)
and
(ii),
Code
2023,
are
amended
to
read
as
9
follows:
10
(i)
For
married
taxpayers
who
file
a
joint
return
and
11
maintain
a
joint
first-time
homebuyer
savings
account,
four
ten
12
thousand
dollars.
13
(ii)
For
any
other
account
holder,
two
five
thousand
14
dollars.
15
EXPLANATION
16
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
17
the
explanation’s
substance
by
the
members
of
the
general
assembly.
18
This
bill
relates
to
an
Iowa
housing
tax
credit
program
and
19
increasing
first-time
homebuyer
tax
incentives,
and
includes
20
effective
date
and
applicability
provisions.
21
DIVISION
I
——
IOWA
HOUSING
TAX
CREDIT
PROGRAM.
The
bill
22
creates
an
Iowa
housing
tax
credit
program
available
against
23
the
individual
and
corporate
income
taxes,
franchise
tax,
24
insurance
premium
tax,
and
moneys
and
credits
tax.
25
The
bill
requires
the
Iowa
finance
authority
(authority)
to
26
develop
a
system
for
the
application,
review,
and
authorization
27
of
Iowa
housing
tax
credits.
A
tax
credit
may
be
claimed
by
28
a
taxpayer
for
a
“qualified
development”
defined
to
mean
a
29
qualified
low-income
housing
project
under
section
42(g)
of
the
30
Internal
Revenue
Code
that
is
financed
by
tax-exempt
bonds.
31
An
Iowa
housing
tax
credit
may
be
authorized
by
the
authority
32
if
all
of
the
following
apply:
the
tax
credit
is
issued
to
33
a
taxpayer
who
has
an
ownership
interest
in
the
qualified
34
development;
the
tax
credit
amount
is
allocated
pursuant
to
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a
qualified
allocation
plan
adopted
by
the
authority;
the
1
tax
credit
is
necessary
for
the
financial
feasibility
of
the
2
qualified
development;
the
amount
of
the
tax
credit
allocated
3
to
an
owner
shall
not
exceed
30
percent
of
the
qualified
basis
4
of
the
qualified
development;
and
the
qualified
development
is
5
the
subject
of
a
recorded
restrictive
covenant
requiring
the
6
qualified
development
be
maintained
and
operated
as
a
qualified
7
development
for
a
certain
number
of
years.
8
The
amount
of
an
Iowa
housing
tax
credit
award
is
determined
9
by
the
authority
and
may
be
claimed
during
the
credit
period
10
(10
years),
and
any
credit
in
excess
of
the
taxpayer’s
11
liability
for
the
tax
year
is
not
refundable
but
may
be
12
credited
to
the
tax
liability
for
the
following
five
years.
13
In
any
calendar
year,
the
bill
limits
the
aggregate
amount
14
of
the
tax
credit
to
$15
million
plus
the
sum
of
the
total
of
15
unallocated
tax
credits
from
the
preceding
calendar
year
and
16
the
previously
allocated
tax
credits
that
have
been
revoked,
17
canceled,
or
recaptured.
18
A
taxpayer
shall
claim
the
credit
by
including
one
or
more
19
tax
certificates
issued
by
the
authority
with
the
taxpayer’s
20
return.
The
bill
allows
a
tax
credit
certificate
to
be
21
transferred
to
any
person
or
entity.
The
bill
requires
the
22
transferee
to
submit
the
transferred
tax
credit
certificate
to
23
the
authority
within
90
days
of
the
transfer,
and
requires
the
24
authority
to
issue
a
replacement
tax
credit
certificate
within
25
30
days
of
receiving
the
transferred
tax
credit
certificate.
26
The
bill
allows
the
authority
to
recapture
tax
credit
27
amounts
from
previously
issued
tax
credits,
if
on
the
last
day
28
of
a
taxable
year
during
the
compliance
period
(15
years),
if
29
the
amount
of
the
qualified
basis
of
a
qualified
development
30
owned
by
a
taxpayer
claiming
the
credit
is
less
than
the
amount
31
of
the
qualified
basis
as
of
the
last
day
of
the
immediately
32
preceding
tax
year,
the
amount
of
the
taxpayer’s
liability
33
shall
be
increased
by
the
recapture
amount
determined
using
the
34
method
under
section
42(j)
of
the
Internal
Revenue
Code.
If
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a
recapture
event
occurs,
the
bill
requires
the
taxpayer
to
1
include
the
recaptured
amount
on
the
return
submitted
for
the
2
tax
year
in
which
the
recapture
event
is
identified.
3
The
bill
requires
the
authority
to
submit
a
report
to
the
4
general
assembly
by
January
31
each
year,
detailing
the
Iowa
5
housing
tax
credit
program.
6
The
division
takes
effect
January
1,
2024,
and
applies
to
tax
7
years
beginning
on
or
after
that
date.
8
DIVISION
II
——
FIRST-TIME
HOMEBUYER
SAVINGS
ACCOUNTS.
The
9
bill
makes
changes
to
the
income
tax
benefits
related
to
10
contributions
made
to
a
first-time
homebuyer
savings
account.
11
Under
current
law,
for
married
persons
filing
a
joint
return
12
an
account
holder
is
allowed
to
deduct
the
first
$4,000
of
13
contributions
made
to
an
account
during
the
tax
year
if
the
14
account
holder
also
maintains
a
joint
first-time
homebuyer
15
savings
account,
and
for
any
other
person
the
account
holder
16
is
allowed
to
deduct
for
the
first
$2,000
of
contributions
17
made
to
such
an
account
during
the
tax
year.
The
first-time
18
homebuyer
savings
account
annual
deduction
limits
are
indexed
19
to
inflation
and
are
increased
each
year.
For
the
2022
tax
20
year
the
annual
deduction
limit
for
married
persons
filing
a
21
joint
return
is
$4,363,
and
for
all
other
persons
the
limit
is
22
$2,181.
23
The
bill
increases
the
annual
deduction
limit
for
first-time
24
homebuyer
savings
account
contributions
to
$10,000
for
married
25
persons
filing
a
joint
return,
and
to
$5,000
for
any
other
26
account
holder.
The
new
annual
deduction
limits
in
the
bill
27
are
also
indexed
to
inflation
and
are
increased
each
year.
28
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