Bill Text: IA SF86 | 2013-2014 | 85th General Assembly | Introduced

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Bill Title: A bill for an act relating to the taxpayers trust fund by modifying the transfer of moneys from the Iowa economic emergency fund to the taxpayers trust fund, allowing transfers from the taxpayers trust fund, creating an Iowa taxpayers trust fund tax credit and fund and providing for the transfer of moneys from the taxpayers trust fund for purposes of the credit, and including effective date and retroactive applicability provisions.

Spectrum: Strong Partisan Bill (Republican 19-1)

Status: (Introduced - Dead) 2013-12-31 - END OF 2013 ACTIONS [SF86 Detail]

Download: Iowa-2013-SF86-Introduced.html

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Senate File 86 - Introduced
SENATE FILE 86
BY BERTRAND , FEENSTRA ,
ANDERSON , ERNST , WHITVER ,
BOETTGER , GUTH , SMITH ,
JOHNSON , KAPUCIAN ,
ROZENBOOM , SEGEBART ,
HOUSER , BEHN , SINCLAIR ,
ZUMBACH , SCHNEIDER ,
BREITBACH , DIX , and
SORENSON
(COMPANION TO HF 1 BY SANDS)
A BILL FOR
An Act relating to the taxpayers trust fund by modifying the
transfer of moneys from the Iowa economic emergency fund
to the taxpayers trust fund, allowing transfers from the
taxpayers trust fund, creating an Iowa taxpayers trust fund
tax credit and fund and providing for the transfer of moneys
from the taxpayers trust fund for purposes of the credit,
and including effective date and retroactive applicability
provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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DIVISION I
TAXPAYERS TRUST FUND
Section 1. Section 8.54, subsection 5, Code 2013, is amended
by striking the subsection.
Sec. 2. Section 8.55, subsection 2, Code 2013, is amended
to read as follows:
2. The maximum balance of the fund is the amount equal to
two and one-half percent of the adjusted revenue estimate for
the fiscal year. If the amount of moneys in the Iowa economic
emergency fund is equal to the maximum balance, moneys in
excess of this amount shall be distributed as follows:
a. The first sixty million dollars of the difference between
the actual net revenue for the general fund of the state for
the fiscal year and the adjusted revenue estimate for the
fiscal year shall be transferred to the taxpayers trust fund.
b. The remainder of the excess, if any, shall be transferred
to the general fund of the state.
Sec. 3. Section 8.57E, subsection 2, Code 2013, is amended
to read as follows:
2. Moneys in the taxpayers trust fund shall only be used
pursuant to appropriations or transfers made by the general
assembly for tax relief.
Sec. 4. Section 8.58, Code 2013, is amended to read as
follows:
8.58 Exemption from automatic application.
1. To the extent that moneys appropriated under section
8.57 do not result in moneys being credited to the general fund
under section 8.55, subsection 2 , moneys Moneys appropriated
under in section 8.57 and moneys contained in the cash reserve
fund, rebuild Iowa infrastructure fund, environment first
fund, Iowa economic emergency fund, and taxpayers trust fund
shall not be considered in the application of any formula,
index, or other statutory triggering mechanism which would
affect appropriations, payments, or taxation rates, contrary
provisions of the Code notwithstanding.
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2. To the extent that moneys appropriated under section
8.57 do not result in moneys being credited to the general fund
under section 8.55, subsection 2 , moneys Moneys appropriated
under in section 8.57 and moneys contained in the cash reserve
fund, rebuild Iowa infrastructure fund, environment first fund,
Iowa economic emergency fund, and taxpayers trust fund shall
not be considered by an arbitrator or in negotiations under
chapter 20 .
Sec. 5. EFFECTIVE UPON ENACTMENT. This division of this
Act, being deemed of immediate importance, takes effect upon
enactment.
Sec. 6. RETROACTIVE APPLICABILITY. This division of this
Act applies retroactively to July 1, 2012, to moneys attributed
to fiscal years beginning on or after July 1, 2012.
DIVISION II
IOWA TAXPAYERS TRUST FUND TAX CREDIT
Sec. 7. TAXPAYERS TRUST FUND —— IOWA TAXPAYERS TRUST FUND
TAX CREDIT TRANSFER. During the fiscal year beginning July
1, 2013, there is transferred from the taxpayers trust fund
created in section 8.57E to the Iowa taxpayers trust fund tax
credit fund created in section 422.11E, an amount equal to the
balance of the taxpayers trust fund at the close of the fiscal
year beginning July 1, 2012, and ending June 30, 2013, to be
used for the Iowa taxpayers trust fund tax credit in accordance
with section 422.11E, subsection 5.
Sec. 8. Section 257.21, Code 2013, is amended to read as
follows:
257.21 Computation of instructional support amount.
1. The department of management shall establish the amount
of instructional support property tax to be levied and the
amount of instructional support income surtax to be imposed
by a district in accordance with the decision of the board
under section 257.19 for each school year for which the
instructional support program is authorized. The department
of management shall determine these amounts based upon the
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most recent figures available for the district’s valuation of
taxable property, individual state income tax paid, and budget
enrollment in the district, and shall certify to the district’s
county auditor the amount of instructional support property
tax, and to the director of revenue the amount of instructional
support income surtax to be imposed if an instructional support
income surtax is to be imposed.
2. The instructional support income surtax shall be imposed
on the state individual income tax for the calendar year during
which the school’s budget year begins, or for a taxpayer’s
fiscal year ending during the second half of that calendar year
and after the date the board adopts a resolution to participate
in the program or the first half of the succeeding calendar
year, and shall be imposed on all individuals residing in the
school district on the last day of the applicable tax year.
As used in this section , “state individual income tax” means
the taxes computed under section 422.5 , less the amounts of
nonrefundable credits allowed under chapter 422, division II ,
except for the Iowa taxpayers trust fund tax credit allowed
under section 422.11E .
Sec. 9. NEW SECTION . 422.11E Iowa taxpayers trust fund tax
credit.
1. For purposes of this section, “eligible individual” means,
with respect to a tax year, an individual who makes and files
an individual income tax return pursuant to section 422.13.
“Eligible individual” does not include an estate or trust, or
an individual for whom an individual income tax return was not
timely filed, including extensions.
2. The taxes imposed under this division, less the credits
allowed under this division except the credits for withheld
tax and estimated tax paid in section 422.16, shall be reduced
by an Iowa taxpayers trust fund tax credit to an eligible
individual for the tax year beginning January 1 immediately
preceding July 1 of any fiscal year during which a transfer, if
any, is made from the taxpayers trust fund in section 8.57E to
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the Iowa taxpayers trust fund tax credit fund created in this
section.
3. The credit shall be equal to the quotient of the amount
transferred to the Iowa taxpayers trust fund tax credit fund in
the applicable fiscal year, divided by the number of eligible
individuals for the tax year immediately preceding the tax year
for which the credit in this section is allowed, as determined
by the director of revenue in accordance with this section,
rounded down to the nearest whole dollar. The department of
revenue shall draft the income tax form for any tax year in
which a credit will be allowed under this section to provide
the information and space necessary for eligible individuals to
claim the credit.
4. Any credit in excess of the taxpayer’s liability for the
tax year is not refundable and shall not be credited to the tax
liability for any following year or carried back to a tax year
prior to the tax year in which the taxpayer claims the credit.
5. a. There is established within the state treasury under
the control of the department an Iowa taxpayers trust fund tax
credit fund consisting of any moneys transferred by the general
assembly from the taxpayers trust fund created in section 8.57E
for purposes of the credit provided in this section. No later
than December 31 in the year following each tax year in which
a credit is allowed pursuant to this section, the department
shall transfer from the Iowa taxpayers trust fund tax credit
fund to the general fund of the state, the lesser of the
balance of the Iowa taxpayers trust fund tax credit fund or
an amount of money equal to the Iowa taxpayers trust fund tax
credits claimed under this section for the applicable tax year.
Any moneys remaining in the fund on December 31 after the
transfer provided in the previous sentence shall immediately
revert to the taxpayers trust fund created in section 8.57E.
b. The moneys transferred to the general fund of the state
in accordance with this subsection shall not be considered new
revenues for purposes of the state general fund expenditure
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limitation under section 8.54 but instead as replacement of
a like amount included in the expenditure limitation for the
fiscal year in which the transfer is made.
Sec. 10. Section 422D.2, Code 2013, is amended to read as
follows:
422D.2 Local income surtax.
A county may impose by ordinance a local income surtax as
provided in section 422D.1 at the rate set by the board of
supervisors, of up to one percent, on the state individual
income tax of each individual residing in the county at the
end of the individual’s applicable tax year. However, the
cumulative total of the percents of income surtax imposed on
any taxpayer in the county shall not exceed twenty percent.
The reason for imposing the surtax and the amount needed
shall be set out in the ordinance. The surtax rate shall be
set to raise only the amount needed. For purposes of this
section , “state individual income tax” means the tax computed
under section 422.5 , less the amounts of nonrefundable credits
allowed under chapter 422, division II , except for the Iowa
taxpayers trust fund tax credit allowed under section 422.11E .
Sec. 11. EFFECTIVE UPON ENACTMENT. This division of this
Act, being deemed of immediate importance, takes effect upon
enactment.
Sec. 12. RETROACTIVE APPLICABILITY. This division of this
Act applies retroactively to January 1, 2013, for tax years
beginning on or after that date.
EXPLANATION
This bill relates to the taxpayers trust fund by modifying
the transfer of moneys from the Iowa economic emergency fund to
the taxpayers trust fund, allowing transfers from the taxpayers
trust fund, creating an Iowa taxpayers trust fund tax credit
and fund, and providing for the transfer of moneys from the
taxpayers trust fund for purposes of the credit.
Division I of the bill relates to the transfer of moneys from
the Iowa economic emergency fund to the taxpayers trust fund.
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Under current law in Code section 8.55, when the balance of
the Iowa economic emergency fund is equal to the fund’s maximum
balance, the excess is first distributed to the taxpayers trust
fund up to a formula amount and the remainder is transferred to
the general fund of the state. The division provides that the
entire excess is transferred to the taxpayers trust fund and
moneys would no longer be transferred to the general fund of
the state.
Code section 8.54, relating to the state general fund
expenditure limitation, is amended to delete a subsection that
provides for readjustment of the expenditure limitation to
reflect moneys anticipated to be transferred to the general
fund of the state from the Iowa economic emergency fund.
Code section 8.58, providing an exemption from statutory
triggering mechanisms and consideration by an arbitrator or in
a collective bargaining negotiation under Code chapter 20 for
moneys in various funds, is amended to eliminate a reference
to the transfer from the Iowa economic emergency fund to the
general fund of the state.
The division amends Code section 8.57E to allow transfers
by the general assembly from the taxpayers trust fund for tax
relief in addition to appropriations which are already allowed
under Iowa law.
The division takes effect upon enactment and applies
retroactively to July 1, 2012, to moneys attributed to fiscal
years beginning on or after July 1, 2012.
Division II of the bill creates an Iowa taxpayers trust fund
tax credit and provides for a transfer from the taxpayers trust
fund for purposes of the credit.
The division provides for an Iowa taxpayers trust fund
tax credit for eligible individuals. “Eligible individual”
is defined, with respect to a tax year, as an individual who
timely files an Iowa individual income tax return. An eligible
individual does not include an estate or trust. The credit
is allowed to eligible individuals for the tax year beginning
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January 1 immediately preceding July 1 of any fiscal year in
which a transfer is made from the taxpayers trust fund to
the Iowa taxpayers trust fund tax credit fund created in the
division. When such a transfer is made, a credit will be
allowed in an amount equal to the amount transferred divided by
the number of eligible individuals for the tax year immediately
preceding the tax year for which the credit is allowed, rounded
down to the nearest whole dollar.
The credit may be claimed against any individual income
tax liability remaining after subtracting all refundable and
nonrefundable credits except the credits for withheld tax and
estimated tax paid in Code section 422.16. The credit is
nonrefundable and shall not be credited to the tax liability
for any following year or carried back to a tax year prior to
the tax year in which the taxpayer claims the credit.
The division creates an Iowa taxpayers trust fund tax
credit fund within the state treasury under the control of the
department of revenue. The division requires that whenever
a transfer is made into the fund, the Iowa taxpayers trust
fund tax credit is allowed and the department of revenue shall
reimburse the general fund of the state an amount equal to the
lesser of the balance of the fund or an amount of money equal
to the Iowa taxpayers trust fund tax credits claimed for the
applicable tax year. The transfer from the Iowa taxpayers
trust fund tax credit fund to the general fund of the state
is required to be made no later than December 31 in the year
following the tax year in which an Iowa taxpayers trust fund
tax credit is allowed. Any moneys remaining in the fund after
the transfer will immediately revert back to the taxpayers
trust fund.
The division provides for a transfer from the taxpayers
trust fund to the Iowa taxpayers trust fund tax credit fund
during the fiscal year beginning July 1, 2013. The amount
transferred shall be the ending balance of the taxpayers trust
fund at the close of the fiscal year beginning July 1, 2012,
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and ending June 30, 2013. The division provides that this
transfer will result in a taxpayers trust fund tax credit being
allowed to eligible individuals for the 2013 tax year.
Finally, the division excludes the Iowa taxpayers trust fund
tax credit from the definition of “state individual income
tax” for purposes of computing the emergency medical services
income surtax in Code chapter 422D, the instructional support
income surtax in Code section 257.21, and, by reference, the
educational improvement income surtax in Code section 257.29
and the physical plant and equipment income surtax in Code
section 298.2.
The division takes effect upon enactment and applies
retroactively to January 1, 2013, for tax years beginning on
or after that date.
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