Bill Text: IA HSB653 | 2015-2016 | 86th General Assembly | Introduced
Bill Title: A study bill for establishing an environmental practices tax credit, and including applicability provisions.
Spectrum: Unknown
Status: (Introduced - Dead) 2016-03-29 - 8:15AM; House Lounge Ways and Means. [HSB653 Detail]
Download: Iowa-2015-HSB653-Introduced.html
House
Study
Bill
653
-
Introduced
HOUSE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
WAYS
AND
MEANS
BILL
BY
CHAIRPERSON
SANDS)
A
BILL
FOR
An
Act
establishing
an
environmental
practices
tax
credit,
and
1
including
applicability
provisions.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
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Section
1.
Section
159.5,
Code
2016,
is
amended
by
adding
1
the
following
new
subsection:
2
NEW
SUBSECTION
.
15.
Cooperate
with
the
department
of
3
revenue
in
administering
the
environmental
practices
tax
4
credit
as
provided
in
chapter
467.
The
department
may
enter
5
onto
land
in
order
to
inspect
an
environmental
practice
and
6
verify
that
it
has
been
established
as
required
in
chapter
7
467.
In
entering
onto
the
land,
the
department
shall
have
8
all
the
powers
conferred
upon
commissioners
of
soil
and
9
water
conservation
districts
under
chapter
161A
as
if
the
10
environmental
practice
were
a
soil
and
water
conservation
11
practice
or
erosion
control
practice
established
on
a
voluntary
12
or
mandatory
basis
using
cost-share
moneys.
However,
nothing
13
in
this
subsection
requires
the
department
to
enter
onto
land
14
to
inspect
and
verify
an
environmental
practice.
15
Sec.
2.
NEW
SECTION
.
161A.11
Environmental
practices
16
——
cooperation
with
the
department
of
agriculture
and
land
17
stewardship.
18
The
commissioners
of
a
district
where
an
environmental
19
practice
is
to
be
or
has
been
established
under
chapter
467
are
20
deemed
to
be
the
agents
of
the
department
and
shall
act
under
21
the
direction
and
supervision
of
the
department
in
entering
22
onto
land
located
in
the
district
in
order
to
inspect
an
23
environmental
practice
and
verify
that
it
has
been
established
24
as
required
in
chapter
467.
In
entering
onto
the
land,
the
25
commissioners
have
all
the
powers
conferred
upon
them
under
26
this
chapter
as
if
the
environmental
practice
were
a
soil
27
and
water
conservation
practice
or
erosion
control
practice
28
established
on
a
voluntary
or
mandatory
basis
using
cost-share
29
moneys.
30
Sec.
3.
NEW
SECTION
.
161A.77
Environmental
practices
——
31
limitations
on
financial
assistance.
32
A
person
is
not
eligible
to
receive
an
award
of
financial
33
assistance
that
is
not
required
to
be
repaid
by
the
recipient,
34
including
but
not
limited
to
cost-share
moneys
under
this
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chapter,
for
that
portion
of
the
cost
of
establishing
an
1
environmental
practice
that
is
claimed
as
an
environmental
2
practices
tax
credit
under
chapter
467.
3
Sec.
4.
NEW
SECTION
.
422.11K
Environmental
practices
tax
4
credit.
5
The
taxes
imposed
under
this
division,
less
the
credits
6
allowed
under
section
422.12,
shall
be
reduced
by
an
7
environmental
practices
tax
credit
allowed
under
chapter
467.
8
Sec.
5.
Section
422.33,
Code
2016,
is
amended
by
adding
the
9
following
new
subsection:
10
NEW
SUBSECTION
.
24.
The
taxes
imposed
under
this
division
11
shall
be
reduced
by
an
environmental
practices
tax
credit
12
allowed
under
chapter
467.
13
Sec.
6.
Section
427C.1,
Code
2016,
is
amended
to
read
as
14
follows:
15
427C.1
Tax
exemption.
16
1.
Any
person
who
establishes
a
forest
or
fruit-tree
17
reservation
as
provided
in
this
chapter
shall
be
entitled
to
18
the
tax
exemption
provided
by
law.
19
2.
A
person
shall
not
be
entitled
to
a
tax
exemption
under
20
this
chapter
if
the
person
claims
an
environmental
practices
21
tax
credit
for
establishing
an
environmental
practice
under
22
chapter
467
on
the
same
land
as
the
forest
or
fruit-tree
23
reservation.
24
Sec.
7.
NEW
SECTION
.
467.101
Purpose.
25
The
purpose
of
this
chapter
is
to
assist
persons
in
26
establishing
new
environmental
practices
in
order
to
reduce
27
soil
erosion
and
sediment
loss,
manage
nutrients
and
reduce
28
contributing
contaminant
loads
to
receiving
surface
waters,
and
29
improve
surface
water
quality.
30
Sec.
8.
NEW
SECTION
.
467.102
Definitions.
31
As
used
in
this
chapter,
unless
the
context
otherwise
32
requires:
33
1.
a.
“Cropland”
means
real
estate
located
in
this
state
34
that
meets
all
of
the
following
criteria:
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(1)
Includes
at
least
thirty
contiguous
acres
not
divided
1
into
lots
for
the
purpose
of
sale
or
lease,
and
not
divided
by
2
city
streets
or
alleys.
3
(2)
Is
used
to
grow
alfalfa,
corn,
soybeans,
straw,
oats,
4
wheat,
or
other
similar
crop
ordinarily
utilized
for,
or
5
ordinarily
added
as
an
ingredient
in,
animal
feed
or
bedding,
6
food
intended
for
human
consumption,
or
fiber.
7
b.
“Cropland”
may
include
real
estate
that
is
located
within
8
the
limits
of
a
city.
9
2.
“Department”
means
the
department
of
agriculture
and
land
10
stewardship.
11
3.
“State
fiscal
year”
means
the
fiscal
year
described
in
12
section
3.12.
13
Sec.
9.
NEW
SECTION
.
467.103
Qualifications
for
14
environmental
practices.
15
1.
An
environmental
practice
qualifying
for
an
16
environmental
practices
tax
credit
under
this
chapter
must
17
be
an
edge-of-field
soil
and
water
conservation
practice
or
18
edge-of-field
erosion
control
practice
that
would
otherwise
19
be
eligible
to
be
established
using
cost-share
moneys
under
20
chapter
161A.
However,
the
environmental
practice
is
limited
21
to
the
following:
22
a.
A
bioreactor
that
is
part
of
or
connected
to
a
field
23
drainage
tile
line.
24
b.
A
saturated
buffer.
25
c.
Prairie
grass
strips
located
in
a
drainage
area.
26
d.
A
grassed
waterway,
as
defined
in
section
459A.102.
27
e.
An
area
which
is
devoted
to
permanent
vegetation
cover.
28
f.
An
area
for
trees,
excluding
an
area
for
which
a
property
29
tax
exemption
as
a
forest
or
fruit-tree
reservation
under
30
chapter
427C
is
claimed.
31
g.
A
wetland
area.
32
2.
The
department
of
agriculture
and
land
stewardship
shall
33
further
define
by
rule
an
environmental
practice
qualifying
34
under
subsection
1.
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Sec.
10.
NEW
SECTION
.
467.104
Tax
credit
to
establish
1
an
environmental
practice
——
administration
by
department
of
2
revenue.
3
1.
An
environmental
practices
tax
credit
is
allowed
4
under
this
chapter
against
the
taxes
imposed
in
chapter
422,
5
divisions
II
and
III.
6
2.
A
taxpayer
may
claim
a
tax
credit
for
establishing
an
7
environmental
practice
on
cropland
if
all
of
the
following
8
apply:
9
a.
The
taxpayer
holds
title
to
cropland
where
the
10
environmental
practice
is
established.
11
b.
The
environmental
practice
qualifies
under
section
12
467.103.
13
c.
The
environmental
practice
was
established
in
the
tax
14
year
for
which
the
environmental
practices
tax
credit
is
15
claimed.
16
d.
The
taxpayer
includes
with
the
tax
return
in
which
the
17
environmental
practices
tax
credit
is
claimed
a
tax
credit
18
certificate
issued
by
the
department
pursuant
to
section
19
467.105.
20
3.
a.
The
environmental
practices
tax
credit
certificate
21
shall
be
redeemed
for
the
value
of
the
tax
credit
stated
on
the
22
certificate.
23
b.
The
environmental
practices
tax
credit
shall
be
allowed
24
for
seventy-five
percent
of
the
actual
and
necessary
costs
of
25
establishing
the
environmental
practice,
not
to
exceed
ten
26
thousand
dollars.
27
c.
The
environmental
practices
tax
credit
shall
not
28
be
allowed
for
that
portion
of
the
cost
of
establishing
29
an
environmental
practice
that
is
financed
by
an
award
of
30
financial
assistance
that
is
granted
by
a
federal
or
state
31
agency
or
local
government
and
that
is
not
required
to
be
32
repaid
by
the
recipient.
33
4.
An
individual
may
claim
a
tax
credit
of
a
partnership,
34
limited
liability
company,
S
corporation,
estate,
or
trust
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electing
to
have
income
taxed
directly
to
the
individual.
The
1
amount
claimed
by
the
individual
shall
be
based
upon
the
pro
2
rata
share
of
the
individual’s
earnings
from
the
partnership,
3
limited
liability
company,
S
corporation,
estate,
or
trust.
4
5.
An
environmental
practices
tax
credit
in
excess
of
the
5
taxpayer’s
liability
for
the
tax
year
is
not
refundable
but
may
6
be
credited
to
the
tax
liability
for
the
following
five
years
7
or
until
depleted,
whichever
is
earlier.
An
environmental
8
practices
tax
credit
shall
not
be
carried
back
to
a
tax
9
year
prior
to
the
tax
year
in
which
the
taxpayer
claims
the
10
environmental
practices
tax
credit.
An
environmental
practices
11
tax
credit
is
transferable
as
provided
in
section
467.106.
12
6.
The
department
of
revenue
shall,
in
cooperation
with
the
13
department
of
agriculture
and
land
stewardship,
adopt
rules
as
14
necessary
to
administer
this
section.
15
Sec.
11.
NEW
SECTION
.
467.105
Tax
credit
certificates
——
16
issuance
by
department
of
agriculture
and
land
stewardship.
17
1.
The
department
shall,
in
cooperation
with
the
department
18
of
revenue,
establish
criteria
and
procedures
for
the
review
19
and
approval
or
disapproval
of
applications
submitted
by
20
taxpayers
seeking
to
be
issued
tax
credit
certificates
21
under
section
467.104,
and
for
the
issuance
of
tax
credit
22
certificates
under
section
467.104
or
467.106.
23
2.
An
application
submitted
to
the
department
for
a
tax
24
credit
certificate
must
include
a
statement
containing
the
25
taxpayer’s
name,
tax
identification
number,
and
address,
26
the
actual
and
necessary
costs
incurred
by
the
taxpayer
27
in
establishing
the
environmental
practice,
and
any
other
28
information
required
by
the
department
or
the
department
29
of
revenue.
The
application
shall
include
a
copy
of
any
30
supporting
documentation
verifying
that
the
taxpayer
is
31
eligible
to
be
issued
the
tax
credit
certificate.
The
32
department
may
enter
onto
cropland
where
the
environmental
33
practice
is
located
in
order
to
conduct
an
inspection
of
the
34
environmental
practice
and
verify
that
it
was
established
as
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required
in
this
chapter.
The
department
may
authorize
the
1
commissioners
of
a
soil
and
water
conservation
district
where
2
the
environmental
practice
is
located
to
conduct
the
inspection
3
and
verification
on
behalf
of
the
department.
However,
the
4
department
may
approve
an
application
without
conducting
an
5
inspection
or
verification.
6
3.
A
taxpayer
may
apply
for
more
than
one
tax
credit
7
certificate
for
establishing
more
than
one
environmental
8
practice
for
one
or
more
tax
years,
so
long
as
each
tax
credit
9
is
for
the
establishment
of
separate
and
distinct
environmental
10
practices.
The
department
shall
establish
criteria,
by
rule,
11
for
determining
what
constitutes
a
separate
and
distinct
12
environmental
practice.
The
department
shall
not
approve
an
13
application
or
issue
tax
credit
certificates
to
a
taxpayer
for
14
an
amount
in
excess
of
ten
thousand
dollars
in
the
aggregate
15
for
any
tax
year.
16
4.
The
department
shall
issue
tax
credit
certificates
under
17
this
section
on
a
first-come,
first-served
basis.
However,
18
the
department
shall
not
issue
tax
credit
certificates
in
an
19
aggregate
amount
that
exceeds
three
million
dollars
in
any
20
state
fiscal
year.
If
the
department
determines
that
it
cannot
21
issue
additional
tax
credit
certificates
for
the
state
fiscal
22
year
because
of
the
dollar
limitation
in
this
subsection,
23
the
department
shall
compile
a
wait
list
for
taxpayers
who
24
have
applied
for
tax
credit
certificates.
Applications
that
25
were
approved
by
the
department
but
for
which
tax
credit
26
certificates
were
not
issued
shall
be
placed
on
the
wait
list
27
in
the
order
the
applications
were
received
by
the
department
28
and
shall
be
given
priority
for
being
issued
tax
credit
29
certificates
in
succeeding
state
fiscal
years.
30
5.
A
tax
credit
certificate
and
related
tax
credit
issued
31
pursuant
to
this
section
shall
be
deemed
a
vested
right
of
the
32
taxpayer
claiming
the
tax
credit
under
section
467.105
as
the
33
original
holder
or
of
any
transferee
of
the
original
holder
34
under
section
467.106
as
the
subsequent
holder.
The
state
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shall
not
cause
a
tax
credit
certificate
to
be
redeemed
in
such
1
a
way
that
amends
or
rescinds
the
tax
credit
certificate
or
2
that
curtails,
limits,
or
withdraws
the
related
tax
credit,
3
except
upon
consent
of
the
proper
holder.
4
Sec.
12.
NEW
SECTION
.
467.106
Tax
credit
certificates
——
5
transfers
——
department
of
revenue.
6
1.
A
tax
credit
certificate
issued
pursuant
to
section
7
467.105
may
be
transferred,
in
whole
or
in
part,
by
the
8
taxpayer
to
any
person.
However,
a
tax
credit
certificate
9
shall
only
be
transferred
once.
10
2.
Within
ninety
days
of
the
transfer
of
the
tax
credit
11
certificate,
the
transferee
shall
submit
the
transferred
tax
12
credit
certificate
to
the
department
of
revenue
along
with
a
13
statement
containing
the
transferee’s
name,
tax
identification
14
number,
and
address,
the
denomination
that
the
replacement
15
tax
credit
certificate
is
to
carry,
and
any
other
information
16
required
by
the
department
of
revenue.
17
3.
Within
thirty
days
of
receiving
the
transferred
tax
18
credit
certificate
and
the
transferee’s
statement,
the
19
department
of
revenue
shall
issue
a
replacement
tax
credit
20
certificate
to
the
transferee.
The
replacement
tax
credit
21
certificate
must
contain
the
information
required
for
22
the
original
tax
credit
certificate.
The
replacement
tax
23
credit
certificate
may
designate
a
different
tax
than
the
24
tax
designated
on
the
original
tax
credit
certificate.
A
25
tax
credit
shall
not
be
claimed
by
a
transferee
until
the
26
replacement
tax
credit
certificate
identifying
the
transferee
27
as
the
proper
holder
has
been
issued.
28
4.
A
transferee
may
use
the
amount
of
the
tax
credit
29
transferred
against
the
taxes
imposed
in
chapter
422,
divisions
30
II,
III,
and
V,
and
in
chapter
432,
and
against
the
moneys
and
31
credits
tax
imposed
in
section
533.329,
for
any
tax
year
the
32
original
transferor
could
have
claimed
the
tax
credit.
Any
33
consideration
received
for
the
transfer
of
the
tax
credit
shall
34
not
be
included
as
income
under
chapter
422,
divisions
II,
III,
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and
V.
Any
consideration
paid
for
the
transfer
of
the
tax
1
credit
shall
not
be
deducted
from
income
under
chapter
422,
2
divisions
II,
III,
and
V.
3
Sec.
13.
APPLICABILITY.
This
Act
applies
to
tax
years
4
beginning
on
or
after
January
1,
2017.
5
EXPLANATION
6
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
7
the
explanation’s
substance
by
the
members
of
the
general
assembly.
8
GENERAL.
This
bill
provides
for
an
environmental
practices
9
tax
credit
(tax
credit).
The
purpose
of
the
tax
credit
is
to
10
assist
crop
farmers
in
reducing
soil
erosion
and
sediment
loss,
11
managing
nutrients,
reducing
contaminant
loads
contributing
12
to
surface
waters,
and
improving
surface
water
quality.
The
13
bill
provides
that
such
tax
credits
are
to
be
administered
by
14
the
department
of
agriculture
and
land
stewardship
(DALS),
in
15
cooperation
with
commissioners
of
soil
and
water
conservation
16
districts
(commissioners)
and
the
department
of
revenue
(DOR).
17
TAX
CREDIT
CERTIFICATES.
The
bill
allows
a
taxpayer
who
is
18
a
landowner
establishing
an
environmental
practice
on
cropland,
19
as
defined
in
the
bill,
to
claim
a
tax
credit
by
applying
to
20
DALS
for
the
issuance
of
a
tax
credit
certificate.
A
taxpayer
21
may
apply
for
more
than
one
tax
credit
certificate
for
each
22
separate
and
distinct
environmental
practice
established.
The
23
bill
allows
DALS
or
commissioners
to
inspect
the
land
where
the
24
practice
has
been
established.
Not
more
than
$3
million
in
tax
25
credit
certificates
may
be
issued
in
any
state
fiscal
year.
If
26
an
applicant
is
approved
but
moneys
are
not
available
to
issue
27
a
tax
credit
certificate,
the
approved
applicant
is
placed
on
a
28
wait
list.
A
tax
credit
certificate
is
transferable
but
cannot
29
be
transferred
more
than
once.
30
TAX
CREDIT.
A
tax
credit
in
excess
of
a
taxpayer’s
liability
31
is
not
refundable
and
cannot
be
carried
back
but
may
be
carried
32
forward
for
the
following
five
tax
years.
The
tax
credit
is
33
limited
to
75
percent
of
the
actual
and
necessary
cost
of
34
establishing
the
environmental
practice.
The
amount
cannot
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include
that
part
of
the
cost
financed
by
an
award
of
financial
1
assistance
granted
by
a
public
entity
(e.g.,
cost-share
2
moneys)
that
is
not
required
to
be
repaid
by
the
recipient.
3
The
tax
credit
is
allowed
against
individual
and
corporate
4
income
taxes.
A
transferred
tax
credit
is
allowed
against
the
5
individual
and
corporate
income
taxes,
the
franchise
tax,
the
6
insurance
premiums
tax,
and
the
moneys
and
credits
tax.
7
APPLICABILITY
DATE.
The
bill
applies
to
tax
years
beginning
8
on
or
after
January
1,
2017.
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