Iowa-2011-SF237-Introduced

Senate File 237 - Introduced SENATE FILE 237 BY COMMITTEE ON ECONOMIC GROWTH/REBUILD IOWA (SUCCESSOR TO SF 178) A BILL FOR An Act relating to community development by allocating tax 1 credits for redevelopment of brownfields and grayfields and 2 by making an appropriation for certain community partnership 3 programs designed to support community beautification 4 projects. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 1682SV (2) 84 tw/sc

S.F. 237 Section 1. Section 15.119, subsection 2, Code 2011, is 1 amended by adding the following new paragraph: 2 NEW PARAGRAPH . f. The redevelopment tax credit program for 3 brownfields and grayfields administered pursuant to sections 4 15.293A and 15.293B. 5 Sec. 2. Section 15.119, Code 2011, is amended by adding the 6 following new subsection: 7 NEW SUBSECTION . 2A. In allocating the amount of tax 8 credits authorized pursuant to subsection 1 among the programs 9 specified in subsection 2, the department shall allocate at 10 least five million dollars for purposes of subsection 2, 11 paragraph “f” . 12 Sec. 3. Section 15.291, subsection 5, Code 2011, is amended 13 to read as follows: 14 5. “Qualifying investment” means the purchase price, the 15 cleanup costs, and the redevelopment costs that are directly 16 related to a qualifying redevelopment project and that are 17 incurred after the project has been registered and approved by 18 the board. “Qualifying investment” only includes the purchase 19 price, the cleanup costs, and the redevelopment costs . 20 Sec. 4. Section 15.292, subsections 1 and 4, Code 2011, are 21 amended to read as follows: 22 1. The department shall establish and administer a 23 brownfield redevelopment program for purposes of providing 24 financial and technical assistance for the acquisition, 25 remediation, or redevelopment of brownfield sites. Financial 26 assistance under the program shall be provided from the 27 brownfield redevelopment fund created in section 15.293 . 28 Technical assistance under the program shall be in the form 29 of providing an applicant with assistance in identifying 30 other alternative forms of assistance for which the applicant 31 may be eligible. The department may provide information on 32 alternative forms of assistance. 33 4. An application for assistance under the program shall 34 include any information required by the department including , 35 -1- LSB 1682SV (2) 84 tw/sc 1/ 8

S.F. 237 but not limited to, all of the following: 1 a. A business plan which includes a remediation plan. 2 b. A budget for remediating or redeveloping the site. 3 c. A statement of purpose describing the intended use of 4 and proposed repayment schedule for any financial assistance 5 received by the applicant. 6 d. Evidence of sponsorship. 7 e. Other information the department deems necessary in order 8 to process and review the application. 9 Sec. 5. Section 15.293A, subsections 2, 6, 7, 8, and 9, Code 10 2011, are amended to read as follows: 11 2. a. (1) The department shall accept and, in conjunction 12 with the council and the board, review applications for tax 13 credits pursuant to this section. 14 (2) Upon review of an application, the department may 15 register the project under the program. If the department 16 registers the project, the department shall, in conjunction 17 with the council and the board, make a preliminary 18 determination as to the amount of tax credit for which the 19 investor qualifies. 20 (3) After registering the project, the department 21 shall issue a letter notifying the investor of successful 22 registration under the program. The letter shall include 23 the amount of tax credit for which the investor has received 24 preliminary approval. The letter shall state that the amount 25 is a preliminary determination only. The amount of tax credit 26 included on a certificate issued pursuant to this section 27 shall be contingent upon completion of the requirements of 28 subparagraphs (4) and (5). 29 (4) Upon completion of a registered project, an audit 30 of the project, completed by an independent certified public 31 accountant licensed in this state, shall be submitted to the 32 department. 33 (5) Upon review of the audit and verification of the amount 34 of the investment, the department may issue a certificate to 35 -2- LSB 1682SV (2) 84 tw/sc 2/ 8

S.F. 237 the investor stating the amount of tax credit the investor may 1 claim. 2 b. (1) To claim a redevelopment tax credit under this 3 section , a taxpayer must attach one or more tax credit 4 certificates to the taxpayer’s tax return. A tax credit 5 certificate shall not be used or attached to a return filed 6 for a taxable year beginning prior to July 1, 2009. The tax 7 credit certificate or certificates attached to the taxpayer’s 8 tax return shall be issued in the taxpayer’s name, expire on or 9 after the last day of the taxable year for which the taxpayer 10 is claiming the tax credit, and show a tax credit amount equal 11 to or greater than the tax credit claimed on the taxpayer’s tax 12 return. 13 b. (2) After verifying the eligibility of a qualifying 14 investor for a tax credit pursuant to this section , the 15 department of economic development shall issue a redevelopment 16 tax credit certificate to be attached to the investor’s 17 tax return. The tax credit certificate shall contain the 18 taxpayer’s name, address, tax identification number, the amount 19 of the credit, the name of the qualifying investor, any other 20 information required by the department of revenue, and a place 21 for the name and tax identification number of a transferee and 22 the amount of the tax credit being transferred. 23 c. (3) The tax credit certificate, unless rescinded by 24 the board, shall be accepted by the department of revenue as 25 payment for taxes imposed pursuant to chapter 422, divisions 26 II , III , and V , and in chapter 432 , and for the moneys and 27 credits tax imposed in section 533.329 , subject to any 28 conditions or restrictions placed by the board upon the face of 29 the tax credit certificate and subject to the limitations of 30 this section . 31 d. (4) Tax credit certificates issued under this section 32 may be transferred to any person or entity. Within ninety days 33 of transfer, the transferee shall submit the transferred tax 34 credit certificate to the department of revenue along with a 35 -3- LSB 1682SV (2) 84 tw/sc 3/ 8

S.F. 237 statement containing the transferee’s name, tax identification 1 number, and address, the denomination that each replacement 2 tax credit certificate is to carry, and any other information 3 required by the department of revenue. 4 e. (5) Within thirty days of receiving the transferred 5 tax credit certificate and the transferee’s statement, the 6 department of revenue shall issue one or more replacement tax 7 credit certificates to the transferee. Each replacement tax 8 credit certificate must contain the information required for 9 the original tax credit certificate and must have the same 10 expiration date that appeared in the transferred tax credit 11 certificate. Tax credit certificate amounts of less than 12 the minimum amount established by rule of the department of 13 economic development shall not be transferable. 14 f. (6) A tax credit shall not be claimed by a transferee 15 under this section until a replacement tax credit certificate 16 identifying the transferee as the proper holder has been 17 issued. The transferee may use the amount of the tax credit 18 transferred against the taxes imposed in chapter 422, divisions 19 II , III , and V , and in chapter 432 , and against the moneys and 20 credits tax imposed in section 533.329 , for any tax year the 21 original transferor could have claimed the tax credit. Any 22 consideration received for the transfer of the tax credit shall 23 not be included as income under chapter 422, divisions II , III , 24 and V , under chapter 432 , or against the moneys and credits tax 25 imposed in section 533.329 . Any consideration paid for the 26 transfer of the tax credit shall not be deducted from income 27 under chapter 422, divisions II , III , and V , under chapter 28 432 , or against the moneys and credits tax imposed in section 29 533.329 . 30 6. For the fiscal year beginning July 1, 2009, the maximum 31 amount of tax credits issued by the department shall not 32 exceed one million dollars. The department shall not issue 33 tax credits pursuant to this section in subsequent fiscal 34 years unless authorized pursuant to this subsection . For each 35 -4- LSB 1682SV (2) 84 tw/sc 4/ 8

S.F. 237 subsequent fiscal year, the amount of tax credits that may be 1 issued by the department shall be subject to the limitation in 2 section 15.119. 3 7. An investment shall be deemed to have been made on the 4 date the qualifying redevelopment project is completed. An 5 investment made prior to January 1, 2009, or after June 30, 6 2010, shall not qualify for a tax credit under this part. 7 8. A qualifying redevelopment project that is not completed 8 within thirty months after issuance of an approval for the 9 project by the board shall cease to be eligible for a tax 10 credit pursuant to this section , however, the board in its 11 discretion may provide for an additional twelve-month period 12 in which to complete a project. A registered project shall 13 be completed within thirty months of the project’s approval 14 unless the department, with the approval of the board, provides 15 additional time to complete the project. A project shall not 16 be provided more than twelve months of additional time. If the 17 registered project is not completed within the time required, 18 the project is not eligible to claim a tax credit pursuant to 19 this section. 20 9. The department shall develop a system for registration 21 and authorization of projects receiving tax credits authorized 22 pursuant to this part and shall control distribution of all 23 tax credits distributed to investors pursuant to this part. 24 In developing the system, the department shall provide for a 25 list of applicants for the tax credit and maintain it from 26 year to year so that if the maximum aggregate amount of tax 27 credits available under the program is reached in one year, an 28 applicant can be given priority consideration for the credit 29 in an ensuing year. 30 Sec. 6. Section 15.293A, subsection 12, Code 2011, is 31 amended by striking the subsection. 32 Sec. 7. Section 15.293B, subsection 1, Code 2011, is amended 33 by striking the subsection and inserting in lieu thereof the 34 following: 35 -5- LSB 1682SV (2) 84 tw/sc 5/ 8

S.F. 237 1. The department shall accept and review applications for 1 tax credits pursuant to section 15.293A and, with the approval 2 of the council, make recommendations regarding the applications 3 to the board. 4 Sec. 8. Section 15.293B, subsection 2, unnumbered paragraph 5 1, Code 2011, is amended to read as follows: 6 An investor applying for a tax credit shall provide the 7 council department with all of the following: 8 Sec. 9. Section 15.294, subsection 4, Code 2011, is amended 9 to read as follows: 10 4. The council , in conjunction with the department, 11 shall consider applications for redevelopment tax credits as 12 described in sections 15.293A and 15.293B , and the council 13 may approve may recommend to the board which applications to 14 approve and the amount of such tax credits for qualifying 15 investments in qualifying redevelopment projects that each 16 project is eligible to receive . 17 Sec. 10. COMMUNITY PARTNERSHIP PROGRAM. There is 18 appropriated from the general fund of the state to the 19 department of natural resources for the fiscal year beginning 20 July 1, 2011, and ending June 30, 2012, the following amount, 21 or so much thereof as is necessary, to be used for the purposes 22 designated: 23 For the purposes of the community partnership program 24 described in section 455E.11, subsection 2, paragraph “a”, 25 subparagraph (1), subparagraph division (a), subparagraph 26 subdivision (ii), subparagraph part (B): 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 200,000 28 Sec. 11. RETROACTIVE APPLICABILITY. The sections of this 29 Act amending sections 15.291 and 15.293A apply retroactively to 30 January 1, 2011, for tax years beginning on or after that date. 31 EXPLANATION 32 This bill relates to community development. 33 The bill makes changes to the administration of the 34 brownfield redevelopment program and the redevelopment tax 35 -6- LSB 1682SV (2) 84 tw/sc 6/ 8

S.F. 237 credits for brownfields and grayfields by the department of 1 economic development. 2 The bill provides that the department may provide 3 information on alternative forms of assistance to participants 4 in the brownfield redevelopment program and provides that 5 the department may require certain additional information of 6 applicants for financial assistance under the program. 7 Current law provides for the verification of eligibility 8 for redevelopment tax credits and the issuance of tax credits. 9 The bill specifies a detailed process for verification of 10 eligibility, including the registration of projects, the 11 review of applications, and the issuance of letters containing 12 preliminary approval for an amount of tax credits. The bill 13 also requires investors to submit an audit of a project to the 14 department before a tax credit certificate may be issued. 15 Current law requires that all projects be completed within 16 the period of time between January 1, 2009, and June 30, 2010. 17 The bill eliminates this requirement. 18 The bill also eliminates the department’s ability to carry 19 over any unissued tax credit amounts from one year to the next 20 and provides that a qualifying investment only includes costs 21 incurred after the project is registered. 22 The changes to the redevelopment tax credit program and tax 23 credits, including the definition of qualifying investment, 24 apply retroactively to January 1, 2011, for tax years beginning 25 on or after that date. 26 The bill makes a number of conforming changes to provisions 27 related to the administration of the program by the department, 28 the brownfield redevelopment advisory council, and the Iowa 29 economic development board. 30 In 2010, the general assembly authorized the department of 31 natural resources to expend up to $100,000 for purposes of 32 providing grants to certain community partnership programs 33 designed to support community beautification projects. The 34 bill appropriates an additional $200,000 for the fiscal year 35 -7- LSB 1682SV (2) 84 tw/sc 7/ 8