Bill Text: IA SF2300 | 2015-2016 | 86th General Assembly | Enrolled
Bill Title: A bill for an act relating to the administration of programs by the economic development authority by creating a renewable chemical production tax credit program, modifying the high quality jobs program, and including effective date and other applicability provisions. (Formerly SSB 3001 and SF 2285.) Various effective dates; see section 15 of bill.
Sponsorship: Committee Bill
Status: (Passed) 2016-04-06 - Signed by Governor. S.J. 654. [SF2300 Detail]
Download: Iowa-2015-SF2300-Enrolled.html
Senate File 2300 - Enrolled
SENATE FILE
BY COMMITTEE ON WAYS AND
MEANS
(SUCCESSOR TO SF 2285)
(SUCCESSOR TO SSB
3001)
\5
A BILL FOR
\1
Senate File 2300
AN ACT
RELATING TO THE ADMINISTRATION OF PROGRAMS BY THE ECONOMIC
DEVELOPMENT AUTHORITY BY CREATING A RENEWABLE CHEMICAL
PRODUCTION TAX CREDIT PROGRAM, MODIFYING THE HIGH QUALITY
JOBS PROGRAM, AND INCLUDING EFFECTIVE DATE AND OTHER
APPLICABILITY PROVISIONS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
DIVISION I
HIGH QUALITY JOBS PROGRAM
Section 1. Section 15.119, subsection 2, paragraph a, Code
2016, is amended to read as follows:
a. (1) The high quality job creation jobs program
administered pursuant to sections 15.326 through 15.336.
(2) In allocating tax credits pursuant to this subsection
for each fiscal year of the fiscal period beginning July
1, 2016, and ending June 30, 2021, the authority shall not
allocate more than one hundred five million dollars for
purposes of this paragraph. This subparagraph (2) is repealed
July 1, 2021.
(3) (a) In allocating tax credits pursuant to this
subsection for the fiscal year beginning July 1, 2021, and
ending June 30, 2022, the authority shall not allocate more
than one hundred five million dollars for purposes of this
paragraph if the aggregate amount of renewable chemical
production tax credits under section 15.319 that were awarded
on or after July 1, 2018, but before July 1, 2021, equals or
exceeds twenty=seven million dollars.
(b) As soon as practicable after June 30, 2021, the
authority shall notify the general assembly of the aggregate
amount of renewable chemical production tax credits awarded
under section 15.319 on or after July 1, 2018, but before
July 1, 2021, and whether or not the tax credit allocation
limitation described in subparagraph division (a) is
applicable.
(c) This subparagraph (3) is repealed July 1, 2022.
DIVISION II
RENEWABLE CHEMICAL PRODUCTION TAX CREDIT PROGRAM
Sec. 2. Section 2.48, subsection 3, Code 2016, is amended by
adding the following new paragraph:
NEW PARAGRAPH. g. In 2022, the renewable chemical
production tax credit program available under sections 15.315
through 15.322.
Sec. 3. Section 15.119, subsection 2, Code 2016, is amended
by adding the following new paragraph:
NEW PARAGRAPH. h. The renewable chemical production tax
credit program administered pursuant to sections 15.315 through
15.322. In allocating tax credits pursuant to this subsection,
the authority shall not allocate more than ten million dollars
for purposes of this paragraph. This paragraph is repealed
July 1, 2030.
Sec. 4. NEW SECTION. 15.315 Short title.
This part shall be known and may be cited as the "Renewable
Chemical Production Tax Credit Program".
Sec. 5. NEW SECTION. 15.316 Definitions.
As used in this part, unless the context otherwise requires:
1. "Biobased content percentage" means, with respect to any
renewable chemical, the amount, expressed as a percentage, of
renewable organic material present as determined by testing
representative samples using the American society for testing
and materials standard D6866.
2. "Biomass feedstock" means sugar, polysaccharide, crude
glycerin, lignin, fat, grease, or oil derived from a plant or
animal, or a protein capable of being converted to a building
block chemical by means of a biological or chemical conversion
process.
3. "Building block chemical" means a molecule converted
from biomass feedstock as a first product or a secondarily
derived product that can be further refined into a higher=value
chemical, material, or consumer product. "Building block
chemical" includes but is not limited to high=purity glycerol,
oleic acid, lauric acid, methanoic or formic acid, arabonic
acid, erythonic acid, glyceric acid, glycolic acid, lactic
acid, 3=hydroxypropionate, propionic acid, malonic acid,
serine, succinic acid, fumaric acid, malic acid, aspartic
acid, 3=hydroxybutyrolactone, acetoin, threonine, itaconic
acid, furfural, levulinic acid, glutamic acid, xylonic acid,
xylaric acid, xylitol, arabitol, citric acid, aconitic acid,
5=hydroxymethylfurfural, lysine, gluconic acid, glucaric acid,
sorbitol, gallic acid, ferulic acid, nonfuel butanol, nonfuel
ethanol, or such additional molecules as may be included by the
authority by rule after consultation with appropriate experts
from Iowa state university, including but not limited to the
Iowa state university center for biorenewable chemicals.
4. "Crude glycerin" means glycerin with a purity level below
ninety=five percent.
5. "Eligible business" means a business meeting the
requirements of section 15.317.
6. "Food additive" means a building block chemical that
is not primarily consumed as food but which, when combined
with other components, improves the taste, appearance, odor,
texture, or nutritional content of food. The authority, in its
discretion, shall determine whether or not a building block
chemical is primarily consumed as food.
7. "High=purity glycerol" means glycerol with a purity level
of ninety=five percent or higher.
8. "Pre=eligibility production threshold" means, with respect
to each eligible business, the number of pounds of renewable
chemicals produced, if any, by an eligible business during the
calendar year prior to the calendar year in which the business
first qualified as an eligible business pursuant to section
15.317.
9. "Program" means the renewable chemical production tax
credit program administered pursuant to this part.
10. "Renewable chemical" means a building block chemical
with a biobased content percentage of at least fifty percent.
"Renewable chemical" does not include a chemical sold or used
for the production of food, feed, or fuel. "Renewable chemical"
includes cellulosic ethanol, starch ethanol, or other ethanol
derived from biomass feedstock, fatty acid methyl esters,
or butanol, but only to the extent that such molecules are
produced and sold for uses other than food, feed, or fuel.
"Renewable chemical" also includes a building block chemical
that can be a food additive as long as the building block
chemical is not primarily consumed as food and is also sold
for uses other than food. "Renewable chemical" also includes
supplements, vitamins, nutraceuticals, and pharmaceuticals, but
only to the extent that such molecules do not provide caloric
value so as to be considered sustenance as food or feed.
11. "Sugar" means the organic compound glucose, fructose,
xylose, arabinose, lactose, sucrose, starch, cellulose, or
hemicellulose.
Sec. 6. NEW SECTION. 15.317 Eligibility requirements.
To be eligible to receive the renewable chemical production
tax credit pursuant to the program, a business shall meet all
of the following requirements:
1. The business is physically located in this state.
2. The business is operated for profit and under single
management.
3. The business is not an entity providing professional
services, health care services, or medical treatments or an
entity engaged primarily in retail operations.
4. The business organized, expanded, or located in the state
on or after the effective date of this division of this Act.
5. The business shall not be relocating or reducing
operations as described in section 15.329, subsection 1,
paragraph "b", and as determined under the discretion of the
authority.
6. The business is in compliance with all agreements entered
into under this program or other programs administered by the
authority.
Sec. 7. NEW SECTION. 15.318 Eligible business application
and agreement ==== maximum tax credits.
1. Application.
a. An eligible business that produces a renewable chemical
in this state from biomass feedstock during a calendar year may
apply to the authority for the renewable chemical production
tax credit provided in section 15.319.
b. The application shall be made to the authority in the
manner prescribed by the authority.
c. The application shall be made during the calendar year
following the calendar year in which the renewable chemicals
are produced.
d. The authority may accept applications on a continuous
basis or may establish, by rule, an annual application
deadline.
e. The application shall include all of the following
information:
(1) The amount of renewable chemicals produced in the state
from biomass feedstock by the eligible business during the
calendar year, measured in pounds.
(2) Any other information reasonably required by the
authority in order to establish and verify eligibility under
the program.
2. Agreement and fees.
a. Before being issued a tax credit under section 15.319,
an eligible business shall enter into an agreement with the
authority for the successful completion of all requirements of
the program. As part of the agreement, the eligible business
shall agree to collect and provide any information reasonably
required by the authority in order to allow the board to
fulfill its reporting obligation under section 15.320.
b. The compliance cost fees authorized in section 15.330,
subsection 12, shall apply to all agreements entered into
under this program and shall be collected by the authority in
the same manner and to the same extent as described in that
subsection.
c. An eligible business shall fulfill all the requirements
of the program and the agreement before receiving a tax credit
or entering into a subsequent agreement under this section.
The authority may decline to enter into a subsequent agreement
under this section or issue a tax credit if an agreement is not
successfully fulfilled.
d. Upon establishing that all requirements of the program
and the agreement have been fulfilled, the authority shall
issue a tax credit and related tax credit certificate to the
eligible business stating the amount of renewable chemical
production tax credit the eligible business may claim.
3. Maximum tax credit amount.
a. The maximum amount of tax credit that may be issued under
section 15.319 to an eligible business for the production of
renewable chemicals in a calendar year shall not exceed the
following:
(1) In the case of an eligible business that has been in
operation in the state for five years or less at the time of
application, one million dollars.
(2) In the case of an eligible business that has been in
operation in the state for more than five years at the time of
application, five hundred thousand dollars.
b. An eligible business shall not receive a tax credit for
renewable chemicals produced before the date the business first
qualified as an eligible business pursuant to section 15.317.
c. An eligible business shall only receive a tax credit for
renewable chemicals produced in a calendar year to the extent
such production exceeds the eligible business's pre=eligibility
production threshold.
d. An eligible business shall not receive more than five tax
credits under the program.
e. The authority shall issue tax credits under the program
on a first=come, first=served basis until the maximum amount of
tax credits allocated pursuant to section 15.119, subsection
2, paragraph "h", is reached. The authority shall maintain
a list of successful applicants under the program, so that
if the maximum aggregate amount of tax credits is reached in
a given fiscal year, eligible businesses that successfully
applied but for which tax credits were not issued shall be
placed on a wait list in the order the eligible businesses
applied and shall be given priority for receiving tax credits
in succeeding fiscal years. Placement on a wait list pursuant
to this paragraph shall not constitute a promise binding the
state. The availability of a tax credit and issuance of a tax
credit certificate pursuant to this subsection in a future
fiscal year is contingent upon the availability of tax credits
in that particular fiscal year.
4. Termination and repayment. The failure by an eligible
business in fulfilling any requirement of the program or any of
the terms and obligations of an agreement entered into pursuant
to this section may result in the reduction, termination,
or recision of the tax credits under section 15.319 and may
subject the eligible business to the repayment or recapture of
tax credits claimed. The repayment or recapture of tax credits
pursuant to this subsection shall be accomplished in the same
manner as provided in section 15.330, subsection 2.
5. Confidentiality.
a. Except as provided in paragraph "b", any information
or record in the possession of the authority with respect to
the program shall be presumed by the authority to be a trade
secret protected under chapter 550 or common law and shall be
kept confidential by the authority unless otherwise ordered by
a court.
b. The identity of a tax credit recipient and the amount
of the tax credit shall be considered public information under
chapter 22.
Sec. 8. NEW SECTION. 15.319 Renewable chemical production
tax credit.
1. An eligible business that has entered into an agreement
pursuant to section 15.318 may claim a tax credit in an amount
equal to the product of five cents multiplied by the number
of pounds of renewable chemicals produced in this state from
biomass feedstock by the eligible business during the calendar
year in excess of the eligible business's pre=eligibility
production threshold. However, an eligible business shall
not receive a tax credit for the production of a secondarily
derived building block chemical if that chemical is also the
subject of a credit at the time of production as a first
product. The renewable chemical production tax credit shall
not be available for any renewable chemical produced before the
2017 calendar year or after the 2026 calendar year.
2. The tax credit shall be allowed against taxes imposed
under chapter 422, division II or III.
3. The tax credit shall be claimed for the tax year during
which the eligible business was issued the tax credit.
4. An individual may claim a tax credit under this section
of a partnership, limited liability company, S corporation,
cooperative organized under chapter 501 and filing as a
partnership for federal tax purposes, estate, or trust electing
to have income taxed directly to the individual. The amount
claimed by the individual shall be based upon the pro rata
share of the individual's earnings from the partnership,
limited liability company, S corporation, cooperative, estate,
or trust.
5. Any tax credit in excess of the tax liability is
refundable. In lieu of claiming a refund, the taxpayer
may elect to have the overpayment shown on the taxpayer's
final, completed return credited to the tax liability for the
following tax year.
6. a. To claim a tax credit under this section, a taxpayer
shall include one or more tax credit certificates with the
taxpayer's tax return.
b. The tax credit certificate shall contain the taxpayer's
name, address, tax identification number, the amount of the
credit, the name of the eligible business, and any other
information required by the department of revenue.
c. The tax credit certificate, unless rescinded by the
authority, shall be accepted by the department of revenue as
payment for taxes imposed pursuant to chapter 422, divisions II
and III, subject to any conditions or restrictions placed by
the authority upon the face of the tax credit certificate and
subject to the limitations of the program.
d. Tax credit certificates issued pursuant to this section
shall not be transferred to any other person.
Sec. 9. NEW SECTION. 15.320 Reports to general assembly.
1. For purposes of this section, "successful tax credit
applicant" includes, with respect to each calendar year, an
eligible business that was issued a tax credit for production
of renewable chemicals during that calendar year, and an
eligible business that successfully applied for a tax credit
for the production of renewable chemicals during that calendar
year, but was not issued a tax credit and was instead placed on
a wait list pursuant to section 15.318, subsection 3, paragraph
"e".
2. By January 31, 2019, and by the same date each year
thereafter, the board, in cooperation with the department of
revenue, shall submit to the general assembly and the governor
a report describing the activities of the program for the most
recent calendar year for which the tax credit application
period has ended pursuant to section 15.318, subsection 1,
paragraph "c". The report shall at a minimum include the
following information:
a. The aggregate number of pounds, and a list of each type,
of renewable chemicals produced in Iowa by all successful
tax credit applicants during the calendar year prior to the
calendar year for which the successful applicants first applied
for a tax credit under the program.
b. The aggregate number of pounds, and a list of each type,
of renewable chemicals produced in Iowa by all successful tax
credit applicants during each calendar year.
c. The aggregate sales of all renewable chemicals produced
by all successful tax credit applicants in each calendar
year for which there are at least five successful tax credit
applicants.
d. The aggregate number of pounds, and a list of each
type, of biomass feedstock used in the production of renewable
chemicals in Iowa by all successful tax credit applicants
during the calendar year prior to the calendar year for which
the successful applicants first applied for a tax credit under
the program.
e. The aggregate number of pounds, and a list of each
type, of biomass feedstock used in the production of renewable
chemicals in Iowa by all successful tax credit applicants
during each calendar year.
f. The number of employees located in Iowa of all successful
tax credit applicants during the calendar year prior to the
calendar year for which the successful applicants first applied
for a tax credit under the program.
g. The number of employees located in Iowa of all successful
tax credit applicants during each calendar year.
h. The number and aggregate amount of tax credits issued
under the program for each calendar year.
i. The number of eligible businesses placed on the wait
list for each calendar year, and the total number of eligible
businesses remaining on the wait list at the end of that
calendar year.
j. The dollar amount of tax credit claims placed on the wait
list for each calendar year, and the total dollar amount of tax
credit claims remaining on the wait list at the end of that
calendar year.
k. For each eligible business issued a renewable chemical
production tax credit during each calendar year:
(1) The identity of the eligible business.
(2) The amount of the tax credit.
(3) The manner in which the eligible business first
qualified as an eligible business under section 15.317,
subsection 4, whether by organizing, expanding, or locating in
the state.
l. The total amount of all renewable chemical production tax
credits claimed during each calendar year, and the portion of
the claims issued as refunds.
3. To protect the presumption of confidentiality
established in section 15.318, subsection 5, the board shall
report all information in an aggregate form to prevent,
as much as possible, information being attributable to any
particular eligible business, except as provided in subsection
2, paragraph "k".
Sec. 10. NEW SECTION. 15.321 Rules.
The authority and the department of revenue shall each adopt
rules as necessary for the implementation and administration
of this part.
Sec. 11. NEW SECTION. 15.322 Future repeal.
Section 15.315, 15.316, 15.317, 15.318, 15.319, 15.320,
15.321, and this section, are repealed July 1, 2030.
Sec. 12. NEW SECTION. 422.10A Renewable chemical production
tax credit.
The taxes imposed under this division, less the credits
allowed under section 422.12, shall be reduced by a renewable
chemical production tax credit allowed under section 15.319.
This section is repealed January 1, 2033.
Sec. 13. Section 422.33, Code 2016, is amended by adding the
following new subsection:
NEW SUBSECTION. 22. The taxes imposed under this division
shall be reduced by a renewable chemical production tax credit
allowed under section 15.319. This subsection is repealed
January 1, 2033.
Sec. 14. TAX CREDIT CLAIMS. Renewable chemical production
tax credits issued pursuant to the renewable chemical
production tax credit program enacted in this division of this
Act shall not be issued by the economic development authority
prior to July 1, 2018, and shall not be claimed by a taxpayer
prior to September 1, 2018.
Sec. 15. EFFECTIVE UPON ENACTMENT. This division of this
Act, being deemed of immediate importance, takes effect upon
enactment.
Sec. 16. APPLICABILITY. This division of this Act applies
to renewable chemicals produced in the state from biomass
feedstock on or after January 1, 2017.
PAM JOCHUM
President of the Senate
LINDA UPMEYER
Speaker of the House
I hereby certify that this bill originated in the Senate and
is known as Senate File 2300, Eighty=sixth General Assembly.
MICHAEL E. MARSHALL
Secretary of the Senate
Approved , 2016
TERRY E. BRANSTAD
Governor
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