Bill Text: IA SF2281 | 2013-2014 | 85th General Assembly | Introduced
Bill Title: A bill for an act relating to the administration of the historic preservation and cultural and entertainment district tax credit program by the department of cultural affairs, providing for fees, and including applicability provisions. (Formerly SSB 3142.)
Spectrum: Committee Bill
Status: (Introduced - Dead) 2014-03-11 - Fiscal note. SCS. [SF2281 Detail]
Download: Iowa-2013-SF2281-Introduced.html
Senate
File
2281
-
Introduced
SENATE
FILE
2281
BY
COMMITTEE
ON
ECONOMIC
GROWTH
(SUCCESSOR
TO
SSB
3142)
A
BILL
FOR
An
Act
relating
to
the
administration
of
the
historic
1
preservation
and
cultural
and
entertainment
district
tax
2
credit
program
by
the
department
of
cultural
affairs,
3
providing
for
fees,
and
including
applicability
provisions.
4
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
5
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Section
1.
Section
16.188,
subsection
3,
paragraph
b,
1
subparagraph
(1),
Code
2014,
is
amended
to
read
as
follows:
2
(1)
Projects
that
are
eligible
for
historic
preservation
3
and
cultural
and
entertainment
district
tax
credits
under
4
section
404A.1
404A.2
.
5
Sec.
2.
Section
404A.1,
Code
2014,
is
amended
by
striking
6
the
section
and
inserting
in
lieu
thereof
the
following:
7
404A.1
Definitions.
8
For
purposes
of
this
chapter,
unless
the
context
otherwise
9
requires:
10
1.
“Completion
date”
means
the
date
on
which
property
that
11
is
the
subject
of
a
qualified
rehabilitation
project
is
placed
12
in
service,
as
that
term
is
used
in
section
47
of
the
Internal
13
Revenue
Code.
14
2.
“Department”
means
the
department
of
cultural
affairs.
15
3.
“Eligible
taxpayer”
means
the
owner
of
the
property
16
that
is
the
subject
of
a
qualified
rehabilitation
project,
or
17
another
person
who
will
qualify
for
the
federal
rehabilitation
18
credit
allowed
under
section
47
of
the
Internal
Revenue
Code
19
with
respect
to
the
property
that
is
the
subject
of
a
qualified
20
rehabilitation
project.
21
4.
“Nonprofit
organization”
means
an
organization
described
22
in
section
501
of
the
Internal
Revenue
Code
unless
the
23
exemption
is
denied
under
section
501,
502,
503,
or
504
of
24
the
Internal
Revenue
Code.
“Nonprofit
organization”
does
not
25
include
a
governmental
body,
as
that
term
is
defined
in
section
26
362.2.
27
5.
“Program”
shall
mean
the
historic
preservation
and
28
cultural
and
entertainment
district
tax
credit
program
set
29
forth
in
this
chapter.
30
6.
a.
“Qualified
rehabilitation
expenditures”
means
the
31
same
as
defined
in
section
47
of
the
Internal
Revenue
Code.
32
Notwithstanding
the
foregoing
sentence,
expenditures
incurred
33
by
an
eligible
taxpayer
that
is
a
nonprofit
organization
shall
34
be
considered
“qualified
rehabilitation
expenditures
”
if
they
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are
any
of
the
following:
1
(1)
Expenditures
made
for
structural
components,
as
that
2
term
is
defined
in
26
C.F.R.
§1.48-1(e)(2).
3
(2)
Expenditures
made
for
architectural
and
engineering
4
fees,
site
survey
fees,
legal
expenses,
insurance
premiums,
and
5
development
fees.
6
b.
“Qualified
rehabilitation
expenditures”
does
not
include
7
those
expenditures
financed
by
federal,
state,
or
local
8
government
grants,
forgivable
loans,
or
other
forms
of
public
9
financial
assistance
that
do
not
require
repayment.
10
c.
“Qualified
rehabilitation
expenditures”
may
include
11
expenditures
incurred
prior
to
the
date
an
agreement
is
entered
12
into
under
section
404A.3,
subsection
3.
13
7.
“Qualified
rehabilitation
project”
means
a
project
for
14
the
rehabilitation
of
property
that
meets
all
of
the
following
15
criteria:
16
a.
The
property
is
at
least
one
of
the
following:
17
(1)
Property
listed
on
the
national
register
of
historic
18
places
or
eligible
for
such
listing.
19
(2)
Property
designated
as
of
historic
significance
to
a
20
district
listed
in
the
national
register
of
historic
places
or
21
eligible
for
such
designation.
22
(3)
Property
or
district
designated
a
local
landmark
by
a
23
city
or
county
ordinance.
24
(4)
A
barn
constructed
prior
to
1937.
25
b.
The
property
meets
the
physical
criteria
and
standards
26
for
rehabilitation
established
by
the
department
by
rule.
To
27
the
extent
applicable,
the
physical
standards
and
criteria
28
shall
be
consistent
with
the
United
States
secretary
of
the
29
interior’s
standards
for
rehabilitation.
30
c.
The
project
has
qualified
rehabilitation
expenditures
31
that
meet
or
exceed
the
following:
32
(1)
In
the
case
of
commercial
property,
expenditures
33
totaling
at
least
fifty
thousand
dollars
or
fifty
percent
of
34
the
assessed
value
of
the
property,
excluding
the
land,
prior
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to
rehabilitation,
whichever
is
less.
1
(2)
In
the
case
of
property
other
than
commercial
property,
2
expenditures
totaling
at
least
twenty-five
thousand
dollars
or
3
twenty-five
percent
of
the
assessed
value,
excluding
the
land,
4
prior
to
rehabilitation,
whichever
is
less.
5
Sec.
3.
Section
404A.2,
Code
2014,
is
amended
by
striking
6
the
section
and
inserting
in
lieu
thereof
the
following:
7
404A.2
Historic
preservation
and
cultural
and
entertainment
8
district
tax
credit.
9
1.
An
eligible
taxpayer
who
has
entered
into
an
agreement
10
under
section
404A.3
is
eligible
to
receive
a
historic
11
preservation
and
cultural
and
entertainment
district
tax
credit
12
in
an
amount
not
to
exceed
twenty-five
percent
of
the
qualified
13
rehabilitation
expenditures
of
a
qualified
rehabilitation
14
project.
15
2.
The
tax
credit
shall
be
allowed
against
the
taxes
imposed
16
in
chapter
422,
divisions
II,
III,
and
V,
and
in
chapter
17
432.
An
individual
may
claim
a
tax
credit
under
this
section
18
of
a
partnership,
limited
liability
company,
S
corporation,
19
estate,
or
trust
electing
to
have
income
taxed
directly
to
the
20
individual.
For
an
individual
claiming
a
tax
credit
of
an
21
estate
or
trust,
the
amount
claimed
by
the
individual
shall
be
22
based
upon
the
pro
rata
share
of
the
individual’s
earnings
from
23
the
estate
or
trust.
For
an
individual
claiming
a
tax
credit
24
of
a
partnership,
limited
liability
company,
or
S
corporation,
25
the
amount
claimed
by
the
partner,
member,
or
shareholder,
26
respectively,
shall
be
based
upon
the
amounts
designated
by
27
the
eligible
partnership,
S
corporation,
or
limited
liability
28
company,
as
applicable.
29
3.
Any
credit
in
excess
of
the
taxpayer’s
tax
liability
for
30
the
tax
year
shall
be
refunded
with
interest
computed
under
31
section
422.25.
In
lieu
of
claiming
a
refund,
a
taxpayer
32
may
elect
to
have
the
overpayment
shown
on
the
taxpayer’s
33
final,
completed
return
credited
to
the
tax
liability
for
the
34
following
year.
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4.
a.
To
claim
a
tax
credit
under
this
section,
a
taxpayer
1
shall
include
one
or
more
tax
credit
certificates
with
the
2
taxpayer’s
tax
return.
3
b.
The
tax
credit
certificate
shall
contain
the
taxpayer’s
4
name,
address,
tax
identification
number,
the
amount
of
5
the
credit,
the
name
of
the
eligible
taxpayer,
any
other
6
information
required
by
the
department
of
revenue,
and
a
place
7
for
the
name
and
tax
identification
number
of
a
transferee
and
8
the
amount
of
the
tax
credit
being
transferred.
9
c.
The
tax
credit
certificate,
unless
rescinded
by
the
10
department,
shall
be
accepted
by
the
department
of
revenue
11
as
payment
for
taxes
imposed
in
chapter
422,
divisions
II,
12
III,
and
V,
and
in
chapter
432,
subject
to
any
conditions
or
13
restrictions
placed
by
the
department
or
the
department
of
14
revenue
upon
the
face
of
the
tax
credit
certificate
and
subject
15
to
the
limitations
of
this
program.
16
5.
a.
Tax
credit
certificates
issued
under
section
404A.3
17
may
be
transferred
to
any
person.
Within
ninety
days
of
18
transfer,
the
transferee
shall
submit
the
transferred
tax
19
credit
certificate
to
the
department
of
revenue
along
with
a
20
statement
containing
the
transferee’s
name,
tax
identification
21
number,
and
address,
the
denomination
that
each
replacement
22
tax
credit
certificate
is
to
carry,
and
any
other
information
23
required
by
the
department
of
revenue.
However,
tax
credit
24
certificate
amounts
of
less
than
the
minimum
amount
established
25
by
rule
of
the
department
of
revenue
shall
not
be
transferable.
26
b.
Within
thirty
days
of
receiving
the
transferred
tax
27
credit
certificate
and
the
transferee’s
statement,
the
28
department
of
revenue
shall
issue
one
or
more
replacement
tax
29
credit
certificates
to
the
transferee.
Each
replacement
tax
30
credit
certificate
must
contain
the
information
required
for
31
the
original
tax
credit
certificate
and
must
have
the
same
32
expiration
date
that
appeared
on
the
transferred
tax
credit
33
certificate.
34
c.
A
tax
credit
shall
not
be
claimed
by
a
transferee
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under
this
section
until
a
replacement
tax
credit
certificate
1
identifying
the
transferee
as
the
proper
holder
has
been
2
issued.
The
transferee
may
use
the
amount
of
the
tax
credit
3
transferred
against
the
taxes
imposed
in
chapter
422,
divisions
4
II,
III,
and
V,
and
in
chapter
432,
for
any
tax
year
the
5
original
transferor
could
have
claimed
the
tax
credit.
Any
6
consideration
received
for
the
transfer
of
the
tax
credit
shall
7
not
be
included
as
income
under
chapter
422,
divisions
II,
III,
8
and
V.
Any
consideration
paid
for
the
transfer
of
the
tax
9
credit
shall
not
be
deducted
from
income
under
chapter
422,
10
divisions
II,
III,
and
V.
11
6.
For
purposes
of
the
individual
and
corporate
income
12
taxes
and
the
franchise
tax,
the
increase
in
the
basis
of
the
13
rehabilitated
property
that
would
otherwise
result
from
the
14
qualified
rehabilitation
expenditures
shall
be
reduced
by
the
15
amount
of
the
credit
computed
under
this
section.
16
Sec.
4.
Section
404A.3,
Code
2014,
is
amended
by
striking
17
the
section
and
inserting
in
lieu
thereof
the
following:
18
404A.3
Application
and
registration
——
agreement
——
19
compliance
and
audit.
20
1.
Application
and
fees.
21
a.
An
eligible
taxpayer
seeking
historic
preservation
and
22
cultural
and
entertainment
district
tax
credits
provided
in
23
section
404A.2
shall
make
application
to
the
department
in
the
24
manner
prescribed
by
the
department.
25
b.
The
department
may
accept
applications
on
a
continuous
26
basis
or
may
accept
applications,
or
one
or
more
components
of
27
an
application,
during
an
annual
application
period.
28
c.
The
application
shall
include
any
information
deemed
29
necessary
by
the
department
to
evaluate
the
eligibility
under
30
the
program
of
the
applicant
and
the
rehabilitation
project,
31
the
amount
of
projected
qualified
rehabilitation
expenditures
32
of
a
rehabilitation
project,
and
the
amount
and
source
of
all
33
funding
for
a
rehabilitation
project.
An
applicant
shall
have
34
the
burden
of
proof
to
demonstrate
to
the
department
that
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the
applicant
is
an
eligible
taxpayer
and
the
project
is
a
1
qualified
rehabilitation
project
under
the
program.
2
d.
The
department
may
establish
criteria
for
the
use
of
3
electronic
or
other
alternative
filing
or
submission
methods
4
for
any
application,
document,
or
payment
requested
or
5
required
under
this
program.
Such
criteria
may
provide
for
the
6
acceptance
of
a
signature
in
a
form
other
than
the
handwriting
7
of
a
person.
8
e.
(1)
The
department
may
charge
application
and
other
fees
9
to
eligible
taxpayers
who
apply
to
participate
in
the
program.
10
The
amount
of
such
fees
shall
be
determined
based
on
the
costs
11
of
the
department
associated
with
administering
the
program.
12
(2)
Fees
collected
by
the
department
pursuant
to
this
13
paragraph
shall
be
deposited
with
the
department
pursuant
to
14
section
303.9,
subsection
1.
15
2.
Registration.
16
a.
Upon
review
of
the
application,
the
department
may
17
register
a
qualified
rehabilitation
project
under
the
program.
18
If
the
department
registers
the
project,
the
department
shall
19
make
a
preliminary
determination
as
to
the
amount
of
tax
20
credits
for
which
the
project
qualifies.
21
b.
After
registering
the
qualified
rehabilitation
project,
22
the
department
shall
notify
the
eligible
taxpayer
of
successful
23
registration
under
the
program.
The
notification
shall
include
24
the
amount
of
tax
credits
under
section
404A.2
for
which
the
25
qualified
rehabilitation
project
has
received
a
tentative
award
26
and
a
statement
that
the
amount
is
a
preliminary
determination
27
only.
28
3.
Agreement.
29
a.
Upon
successful
registration
of
a
qualified
30
rehabilitation
project,
the
eligible
taxpayer
shall
enter
into
31
an
agreement
with
the
department
for
the
successful
completion
32
of
all
requirements
of
the
program.
33
b.
The
agreement
shall
contain,
at
a
minimum,
the
following
34
provisions:
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(1)
The
amount
of
the
tax
credit
award.
An
eligible
1
taxpayer
has
no
right
to
receive
a
tax
credit
certificate
or
2
claim
a
tax
credit
until
all
requirements
of
the
agreement
and
3
subsections
4
and
5
have
been
satisfied.
The
amount
of
tax
4
credit
included
on
a
tax
credit
certificate
issued
under
this
5
section
shall
be
contingent
upon
verification
by
the
department
6
of
the
amount
of
final
qualified
rehabilitation
expenditures.
7
(2)
The
rehabilitation
work
to
be
performed.
8
(3)
The
budget
of
the
qualified
rehabilitation
project,
9
including
the
projected
qualified
rehabilitation
expenditures
10
and
the
source
and
amount
of
all
funding
received
or
11
anticipated
to
be
received.
12
(4)
The
commencement
date
of
the
qualified
rehabilitation
13
project,
which
shall
not
be
later
than
the
end
of
the
fiscal
14
year
in
which
the
agreement
is
entered
into.
15
(5)
The
completion
date
of
the
qualified
rehabilitation
16
project,
which
shall
be
within
thirty-six
months
of
the
17
commencement
date.
18
4.
Compliance.
19
a.
The
eligible
taxpayer
shall,
for
the
length
of
the
20
agreement,
annually
certify
to
the
department
compliance
with
21
the
requirements
of
the
agreement.
The
certification
shall
22
be
made
at
such
time
as
the
department
shall
determine
in
the
23
agreement.
24
b.
The
eligible
taxpayer
shall
have
the
burden
of
proof
25
to
demonstrate
to
the
department
that
all
requirements
of
26
the
agreement
are
satisfied.
The
taxpayer
shall
notify
27
the
department
in
a
timely
manner
of
any
changes
in
the
28
qualification
of
the
rehabilitation
project
or
in
the
29
eligibility
of
the
taxpayer
to
claim
the
tax
credit
provided
30
under
this
chapter,
or
of
any
other
change
that
may
have
31
a
negative
impact
on
the
eligible
taxpayer’s
ability
to
32
successfully
complete
any
requirement
under
the
agreement.
33
c.
If
after
entering
into
the
agreement
the
eligible
34
taxpayer
or
the
qualified
rehabilitation
project
no
longer
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meets
the
requirements
of
the
agreement,
the
department
may
1
find
the
taxpayer
in
default
under
the
agreement
and
may
2
revoke
the
tax
credit
award.
The
department
of
revenue,
3
upon
notification
by
the
department
of
a
default,
shall
seek
4
repayment
of
the
value
of
any
such
tax
credit
already
claimed,
5
and
the
failure
to
make
such
a
repayment
may
be
treated
by
the
6
department
of
revenue
in
the
same
manner
as
a
failure
to
pay
7
the
tax
shown
due
or
required
to
be
shown
due
with
the
filing
of
8
a
return
or
deposit
form.
9
5.
Audit.
10
a.
Upon
completion
of
the
qualified
rehabilitation
project,
11
an
audit
of
the
project
completed
by
an
independent
certified
12
public
accountant
licensed
in
this
state
shall
be
submitted
to
13
the
department
along
with
a
statement
of
the
amount
of
final
14
qualified
rehabilitation
expenditures
and
any
other
information
15
deemed
necessary
by
the
department
or
the
department
of
revenue
16
in
order
to
verify
that
all
requirements
of
the
agreement
have
17
been
satisfied.
18
b.
Notwithstanding
paragraph
“a”
,
the
department
may
waive
19
the
audit
requirement
in
this
subsection
if
all
the
following
20
requirements
are
satisfied:
21
(1)
The
final
qualified
rehabilitation
expenditures
of
22
the
qualified
rehabilitation
project,
as
verified
by
the
23
department,
do
not
exceed
one
hundred
thousand
dollars.
24
(2)
The
qualified
rehabilitation
project
is
funded
25
exclusively
by
private
funding
sources.
26
c.
Upon
review
of
the
audit,
if
applicable,
the
department
27
shall
verify
that
all
requirements
of
the
agreement
have
been
28
satisfied
and
shall
verify
the
amount
of
final
qualified
29
rehabilitation
expenditures.
After
consultation
with
the
30
department
of
revenue,
the
department
may
issue
a
tax
credit
31
certificate
to
the
eligible
taxpayer
stating
the
amount
of
tax
32
credit
under
section
404A.2
the
eligible
taxpayer
may
claim.
33
The
department
shall
issue
the
tax
credit
certificate
not
later
34
than
60
days
following
the
completion
of
the
audit
review,
if
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applicable,
and
the
verifications
and
consultation
required
1
under
this
paragraph.
2
6.
Notwithstanding
any
other
provision
of
this
chapter
to
3
the
contrary,
the
amount
of
tax
credit
issued
on
a
tax
credit
4
certificate
to
an
eligible
taxpayer
shall
not
exceed
the
amount
5
of
tax
credit
award
provided
for
in
the
agreement.
6
Sec.
5.
Section
404A.4,
Code
2014,
is
amended
by
striking
7
the
section
and
inserting
in
lieu
thereof
the
following:
8
404A.4
Aggregate
tax
credit
award
limit.
9
1.
Except
as
provided
in
subsections
2
and
3,
the
department
10
shall
not
award
in
any
one
fiscal
year
an
amount
of
tax
credits
11
provided
in
section
404A.2
in
excess
of
forty-five
million
12
dollars.
13
2.
a.
The
amount
of
a
tax
credit
that
is
awarded
during
14
a
fiscal
year
beginning
on
or
after
July
1,
2016,
and
that
is
15
irrevocably
declined
or
revoked
on
or
before
June
30
of
the
16
next
fiscal
year
may
be
awarded
under
section
404A.3
during
the
17
fiscal
year
in
which
the
declination
or
revocation
occurs.
18
b.
The
amount
of
a
tax
credit
that
was
reserved
prior
to
19
the
effective
date
of
this
Act
under
section
404A.4,
Code
2014,
20
for
use
in
a
fiscal
year
beginning
before
July
1,
2016,
that
21
is
irrevocably
declined
or
revoked
on
or
after
the
effective
22
date
of
this
Act,
but
before
July
1,
2016,
may
be
awarded
under
23
section
404A.3
during
the
fiscal
year
in
which
such
declination
24
or
revocation
occurs.
Such
tax
credits
awarded
shall
not
be
25
claimed
by
a
taxpayer
in
a
fiscal
year
that
is
earlier
than
the
26
fiscal
year
for
which
the
tax
credits
were
originally
reserved.
27
c.
The
amount
of
a
tax
credit
that
was
available
for
28
approval
by
the
state
historical
preservation
office
of
the
29
department
under
section
404A.4,
Code
2014,
in
a
fiscal
year
30
beginning
on
or
after
July
1,
2010,
but
before
July
1,
2014,
31
that
was
required
to
be
allocated
to
new
projects
with
final
32
qualified
rehabilitation
costs
of
five
hundred
thousand
dollars
33
or
less,
or
seven
hundred
fifty
thousand
dollars
or
less,
as
34
the
case
may
be,
and
that
was
not
finally
approved
by
the
state
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historical
preservation
office,
may
be
awarded
under
section
1
404A.3
during
the
fiscal
years
beginning
on
or
after
July
1,
2
2014,
but
before
July
1,
2016.
3
d.
Tax
credits
awarded
pursuant
to
this
subsection
shall
4
not
be
considered
for
purposes
of
calculating
the
aggregate
tax
5
credit
award
limit
in
subsection
1.
6
3.
a.
If
during
the
fiscal
year
beginning
July
1,
2016,
or
7
any
fiscal
year
thereafter,
the
department
awards
an
amount
of
8
tax
credits
that
is
less
than
the
maximum
aggregate
tax
credit
9
award
limit
specified
in
subsection
1,
the
difference
between
10
the
amount
so
awarded
and
the
amount
specified
in
subsection
1,
11
not
to
exceed
ten
percent
of
the
amount
specified
in
subsection
12
1,
may
be
carried
forward
to
the
succeeding
fiscal
year
and
13
awarded
during
that
fiscal
year.
14
b.
Tax
credits
awarded
pursuant
to
this
subsection
shall
15
not
be
considered
for
purposes
of
calculating
the
aggregate
tax
16
credit
award
limit
in
subsection
1.
17
Sec.
6.
Section
404A.5,
Code
2014,
is
amended
to
read
as
18
follows:
19
404A.5
Economic
impact
——
recommendations.
20
1.
The
department
of
cultural
affairs
,
in
consultation
with
21
the
department
of
revenue,
shall
be
responsible
for
keeping
22
the
general
assembly
and
the
legislative
services
agency
23
informed
on
the
overall
economic
impact
to
the
state
of
the
24
rehabilitation
of
eligible
properties
qualified
rehabilitation
25
projects
.
26
2.
An
annual
report
shall
be
filed
which
shall
include
27
but
is
not
limited
to
data
on
the
number
and
potential
value
28
of
qualified
rehabilitation
projects
begun
during
the
latest
29
twelve-month
period,
the
total
historic
preservation
and
30
cultural
and
entertainment
district
tax
credits
originally
31
granted
awarded
or
tax
credit
certificates
originally
issued
32
during
that
period,
the
potential
reduction
in
state
tax
33
revenues
as
a
result
of
all
awarded
or
issued
tax
credits
still
34
unused
unclaimed
and
eligible
for
refund,
and
the
potential
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increase
in
local
property
tax
revenues
as
a
result
of
the
1
qualified
rehabilitated
projects.
2
3.
The
department
of
cultural
affair
s,
to
the
extent
it
3
is
able,
shall
provide
recommendations
on
whether
a
the
limit
4
on
tax
credits
should
be
established
changed
,
the
need
for
a
5
broader
or
more
restrictive
definition
of
eligible
property
6
qualified
rehabilitation
project
,
and
other
adjustments
to
the
7
tax
credits
under
this
chapter
.
8
Sec.
7.
NEW
SECTION
.
404A.6
Rules.
9
The
department
and
the
department
of
revenue
shall
each
10
adopt
rules
to
jointly
administer
this
chapter.
11
Sec.
8.
Section
422.11D,
Code
2014,
is
amended
by
striking
12
the
section
and
inserting
in
lieu
thereof
the
following:
13
422.11D
Historic
preservation
and
cultural
and
entertainment
14
district
tax
credit.
15
The
taxes
imposed
under
this
division,
less
the
credits
16
allowed
under
section
422.12,
shall
be
reduced
by
a
historic
17
preservation
and
cultural
and
entertainment
district
tax
credit
18
allowed
under
section
404A.2.
19
Sec.
9.
Section
422.33,
subsection
10,
Code
2014,
is
amended
20
by
striking
the
subsection
and
inserting
in
lieu
thereof
the
21
following:
22
10.
The
taxes
imposed
under
this
division
shall
be
reduced
23
by
a
historic
preservation
and
cultural
and
entertainment
24
district
tax
credit
allowed
under
section
404A.2.
25
Sec.
10.
Section
422.60,
subsection
4,
Code
2014,
is
amended
26
by
striking
the
subsection
and
inserting
in
lieu
thereof
the
27
following:
28
4.
The
taxes
imposed
under
this
division
shall
be
reduced
by
29
a
historic
preservation
and
cultural
and
entertainment
district
30
tax
credit
allowed
under
section
404A.2.
31
Sec.
11.
Section
432.12A,
Code
2014,
is
amended
by
striking
32
the
section
and
inserting
in
lieu
thereof
the
following:
33
432.12A
Historic
preservation
and
cultural
and
entertainment
34
district
tax
credit.
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The
taxes
imposed
under
this
chapter
shall
be
reduced
by
a
1
historic
preservation
and
cultural
and
entertainment
district
2
tax
credit
allowed
under
section
404A.2.
3
Sec.
12.
APPLICABILITY.
Unless
otherwise
provided
in
4
this
Act,
this
Act
applies
to
agreements
entered
into
by
the
5
department
and
an
eligible
taxpayer
on
or
after
the
effective
6
date
of
this
Act,
and
rehabilitation
projects
for
which
a
7
project
application
was
approved
and
tax
credits
reserved
prior
8
to
the
effective
date
of
this
Act
shall
be
governed
by
sections
9
404A.1
through
404A.5,
Code
2014.
10
EXPLANATION
11
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
12
the
explanation’s
substance
by
the
members
of
the
general
assembly.
13
This
bill
changes
the
historic
preservation
and
cultural
14
and
entertainment
district
tax
credit
program
(program)
15
administered
pursuant
to
Code
chapter
404A.
16
Under
current
law,
a
taxpayer
may
receive
a
tax
credit
in
17
an
amount
equal
to
25
percent
of
the
qualified
rehabilitation
18
costs
incurred
in
rehabilitating
properties
eligible
to
be
19
listed
on
the
national
register
of
historic
places,
historic
20
properties
in
areas
eligible
to
be
designated
local
historic
21
districts,
local
landmarks,
or
barns
constructed
prior
to
1937.
22
The
credit
is
available
against
the
individual
and
corporate
23
income
tax,
the
franchise
tax,
and
the
insurance
companies
24
tax.
To
be
eligible
for
the
tax
credit,
the
rehabilitation
25
costs
must
exceed
certain
threshold
amounts
depending
on
the
26
type
of
property
involved.
The
aggregate
amount
of
tax
credits
27
that
may
be
approved
per
fiscal
year
is
$45
million,
a
certain
28
amount
of
which
is
required
to
be
allocated
between
projects
29
with
final
qualified
rehabilitation
costs
of
$750,000
or
less,
30
projects
located
in
certified
cultural
and
entertainment
31
districts
or
associated
with
Iowa
great
places
agreements,
32
disaster
recovery
projects,
and
projects
that
involve
the
33
creation
of
more
than
500
new
permanent
jobs.
34
Under
current
law,
a
taxpayer
is
also
required
to
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apply
to
and
receive
approval
from
the
state
historic
1
preservation
office
of
the
department
of
cultural
affairs
for
a
2
rehabilitation
project.
The
project
must
meet
the
statutory
3
requirements
and
the
criteria
established
in
administrative
4
rules
by
the
historic
preservation
office.
Tax
credits
5
for
an
approved
rehabilitation
project
may
be
reserved
by
a
6
taxpayer
for
up
to
three
years,
but
such
reservations
shall
not
7
exceed
an
aggregate
of
$45
million
per
fiscal
year.
Approved
8
rehabilitation
projects
must
be
started
and
completed
within
9
a
certain
time
period.
Upon
completion
of
the
rehabilitation
10
project
a
certificate
of
completion
is
obtained
from
the
state
11
historic
preservation
office
and
a
tax
credit
certificate
is
12
issued.
Tax
credits
are
refundable
and
may
be
transferred
to
13
another
person.
14
Under
the
bill,
an
eligible
taxpayer
may
receive
a
tax
15
credit
not
to
exceed
25
percent
of
the
qualified
rehabilitation
16
expenditures
of
a
qualified
rehabilitation
project.
17
A
“qualified
rehabilitation
project”
is
defined
in
the
bill
18
as
a
project
for
the
rehabilitation
of
property
that
meets
19
three
requirements.
First,
it
must
be
property
listed
on
the
20
national
register
of
historic
places,
historic
property
in
an
21
area
eligible
to
be
designated
a
local
historic
district,
a
22
local
landmark,
or
a
barn
constructed
prior
to
1937.
Second,
23
the
property
must
meet
the
physical
criteria
and
standards
24
for
rehabilitation
established
by
the
department
of
cultural
25
affairs
(department)
by
administrative
rule.
To
the
extent
26
applicable,
such
criteria
and
standards
are
required
to
be
27
consistent
with
United
States
secretary
of
the
interior’s
28
standards
for
rehabilitation.
Third,
the
project
must
have
29
qualified
rehabilitation
expenditures
that,
in
the
case
of
30
commercial
property,
equal
or
exceed
the
lesser
of
at
least
31
$50,000
or
50
percent
of
the
assessed
value
of
the
property,
32
excluding
the
land,
prior
to
rehabilitation;
or
in
the
case
of
33
all
other
property,
must
equal
the
lesser
of
at
least
$25,000
34
or
25
percent
of
the
assessed
value,
excluding
the
land,
prior
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to
rehabilitation.
1
“Qualified
rehabilitation
expenditures”
means
the
same
as
2
defined
in
section
47
of
the
Internal
Revenue
Code
(IRC).
3
However,
the
bill
provides
that
if
the
eligible
taxpayer
is
4
a
nonprofit
corporation,
an
expenditure
will
be
considered
a
5
“qualified
rehabilitation
expenditure”
if
it
is
one
made
for
6
structural
components,
as
defined
in
26
C.F.R.
§1.48-1(e)(2),
7
or
if
it
is
an
architectural
or
engineering
fee,
site
survey
8
fee,
legal
expense,
insurance
premium,
or
development
9
fee.
“Qualified
rehabilitation
expenditures”
may
include
10
expenditures
incurred
prior
to
the
date
the
agreement
is
11
entered
into
by
the
eligible
taxpayer
and
the
department,
but
12
excludes
expenditures
financed
by
federal,
state,
or
local
13
government
grants,
forgivable
loans,
or
other
forms
of
public
14
financial
assistance
that
do
not
require
repayment.
“Eligible
15
taxpayer”
and
“nonprofit
corporation”
are
both
defined
in
the
16
bill.
17
Under
the
bill,
an
eligible
taxpayer
seeking
the
tax
credit
18
must
apply
to
the
department.
The
department
may
prescribe
19
the
timing,
form,
content,
and
method
of
application,
and
may
20
also
establish
criteria
for
the
use
of
electronic
or
other
21
alternative
filing
methods
for
applications,
documents,
or
22
payments.
The
application
must
contain
certain
information
as
23
specified
in
the
bill
and
the
taxpayer
making
the
application
24
has
the
burden
of
proof
to
demonstrate
eligibility
under
the
25
program.
The
department
is
allowed
to
charge
application
or
26
other
fees
based
on
the
costs
of
the
department
associated
with
27
the
program.
28
If
the
project
in
the
application
meets
the
definition
of
a
29
qualified
rehabilitation
project,
the
department
may
register
30
it
under
the
program.
The
bill
requires
the
department
to
31
notify
the
eligible
taxpayer
of
successful
registration
under
32
the
program
and
of
the
amount
of
tax
credits
for
which
the
33
project
has
received
a
tentative
award.
34
The
bill
requires
the
agreement
to
cover
a
number
of
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provisions,
including
the
amount
of
the
tax
credit
award,
1
the
rehabilitation
work
to
be
performed,
the
budget
of
2
the
qualified
rehabilitation
project,
and
the
project’s
3
commencement
and
completion
dates.
The
commencement
date
shall
4
not
be
later
than
the
end
of
the
fiscal
year
in
which
the
5
agreement
is
entered
into,
and
the
completion
date,
which
is
6
the
date
the
property
is
placed
in
service,
must
be
within
36
7
months
of
the
commencement
date.
The
agreement
shall
provide
8
that
an
eligible
taxpayer
has
no
right
to
receive
a
tax
credit
9
certificate
or
claim
a
tax
credit
until
all
requirements
of
the
10
agreement
and
the
program
have
been
satisfied,
and
that
the
11
amount
of
tax
credit
included
on
a
tax
credit
certificate
shall
12
be
contingent
upon
verification
by
the
department
of
the
amount
13
of
final
qualified
rehabilitation
expenditures.
The
program
14
requires
that
the
eligible
taxpayer
annually
certify
to
the
15
department
the
eligible
taxpayer’s
continuing
compliance
with
16
the
agreement,
and
timely
notify
the
department
of
any
changes
17
that
may
negatively
impact
eligibility
under
the
program.
The
18
eligible
taxpayer
will
have
the
burden
of
proof
to
demonstrate
19
that
all
requirements
of
the
agreement
are
satisfied.
The
20
department
may
find
the
eligible
taxpayer
in
default
if
any
of
21
the
requirements
are
not
met,
and
may
revoke
the
tax
credit
22
award.
Upon
default,
the
department
of
revenue
is
required
23
to
seek
recovery
of
any
tax
credit
claimed.
Finally,
upon
24
completion
of
the
qualified
rehabilitation
project,
the
25
program
requires
the
eligible
taxpayer
to
submit
an
audit
of
26
the
project
from
a
certified
public
accountant
licensed
in
27
this
state.
The
department
is
allowed
to
waive
the
audit
28
requirement
if
the
final
qualified
rehabilitation
expenditures
29
do
not
exceed
$100,000
and
the
project
is
exclusively
funded
by
30
private
funding
sources.
31
After
reviewing
the
audit,
if
applicable,
the
department
32
shall
verify
the
final
qualified
rehabilitation
expenditures
33
and
that
all
requirements
of
the
agreement
were
satisfied.
34
Following
that,
the
department
may
issue
within
60
days
a
tax
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credit
certificate
stating
the
amount
of
tax
credit
that
may
be
1
claimed,
but
such
amount
shall
not
exceed
the
amount
of
the
tax
2
credit
award
provided
for
in
the
agreement.
3
The
bill
prohibits
the
department
from
awarding
more
4
than
$45
million
in
tax
credits
per
fiscal
year,
with
four
5
exceptions.
First,
any
tax
credit
that
is
awarded
during
a
6
fiscal
year
beginning
on
or
after
July
1,
2016,
and
that
is
7
irrevocably
declined
or
revoked
on
or
before
June
30
of
the
8
next
fiscal
year,
may
be
awarded
during
the
fiscal
year
in
9
which
the
declination
or
revocation
occurs
without
regard
to
10
the
$45
million
cap.
Second,
any
tax
credit
that
was
reserved
11
under
current
law
before
the
effective
date
of
the
bill
for
use
12
in
a
fiscal
year
beginning
before
July
1,
2016,
and
that
is
13
irrevocably
declined
or
revoked
on
or
after
the
effective
date
14
of
the
bill,
but
before
July
1,
2016,
may
be
awarded
during
15
the
fiscal
year
in
which
the
declination
or
revocation
occurs,
16
without
regard
to
the
$45
million
cap.
However,
such
credits
17
shall
not
be
claimed
before
the
fiscal
year
for
which
they
were
18
originally
reserved.
Third,
any
amount
of
tax
credit
that
19
was
available
for
approval
under
current
law
during
fiscal
20
years
2010-2011,
2011-2012,
2012-2013,
or
2013-2014,
that
was
21
required
to
be
allocated
to
new
projects
with
final
qualified
22
rehabilitation
costs
of
$500,000
or
less,
or
$750,000
or
less,
23
as
the
case
may
be,
and
that
was
not
finally
approved,
may
be
24
awarded
during
fiscal
years
2014-2015
and
2015-2016
without
25
regard
to
the
$45
million
cap.
Fourth,
if
the
department
26
awards
during
fiscal
year
2016-2017,
or
any
fiscal
year
27
thereafter,
an
amount
of
tax
credits
that
is
less
than
the
$45
28
million
cap,
the
department
may
carry
forward
the
difference
29
between
the
amount
so
awarded
and
the
$45
million
cap,
not
to
30
exceed
10
percent
of
the
cap,
to
the
succeeding
fiscal
year
31
for
award
during
that
fiscal
year,
without
regard
to
the
$45
32
million
cap.
33
The
bill
makes
several
technical
changes
to
Code
section
34
404A.5,
which
governs
the
department’s
reporting
and
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recommendation
duties,
to
reference
qualified
rehabilitation
1
projects
and
to
properly
reflect
that
tax
credits
will
be
2
awarded
instead
of
granted
and
tax
credit
certificates
issued.
3
The
bill
requires
the
department
and
the
department
of
4
revenue
to
adopt
rules
to
jointly
administer
the
program.
5
Unless
otherwise
provided
in
the
bill,
the
bill
applies
6
to
agreements
entered
into
by
the
department
and
an
eligible
7
taxpayer
on
or
after
the
effective
date
of
the
bill,
and
8
rehabilitation
projects
for
which
a
project
application
was
9
approved
and
tax
credits
reserved
prior
to
the
effective
date
10
of
the
bill
shall
be
governed
by
current
law.
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