Bill Text: IA SF89 | 2019-2020 | 88th General Assembly | Introduced
Bill Title: A bill for an act creating a homeownership development tax credit available for charitable contributions to certain low-income housing developers in this state, and including applicability provisions.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2019-02-20 - Fiscal note. [SF89 Detail]
Download: Iowa-2019-SF89-Introduced.html
Senate
File
89
-
Introduced
SENATE
FILE
89
BY
EDLER
A
BILL
FOR
An
Act
creating
a
homeownership
development
tax
credit
1
available
for
charitable
contributions
to
certain
2
low-income
housing
developers
in
this
state,
and
including
3
applicability
provisions.
4
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
5
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Section
1.
NEW
SECTION
.
15E.152
Short
title.
1
This
subchapter
shall
be
known
and
may
be
cited
as
the
2
“Homeownership
Development
Tax
Credit
Act”
.
3
Sec.
2.
NEW
SECTION
.
15E.153
Purpose.
4
The
purpose
of
this
subchapter
is
to
increase
the
5
availability
of
affordable
housing
in
this
state
by
encouraging
6
taxpayers
to
make
charitable
contributions
to
certain
nonprofit
7
housing
developers
that
create
affordable
single-family
housing
8
to
be
sold
to
low-income
households
in
this
state.
9
Sec.
3.
NEW
SECTION
.
15E.154
Definitions.
10
As
used
in
this
subchapter,
unless
the
context
otherwise
11
requires:
12
1.
“Department”
means
the
department
of
revenue.
13
2.
“Eligible
housing
developer”
means
an
organization
14
meeting
the
requirements
of
section
15E.155,
subsection
2,
and
15
certified
as
an
eligible
housing
developer
by
the
authority
16
pursuant
to
that
section.
17
3.
“Eligible
rural
housing
developer”
means
an
organization
18
meeting
the
requirements
of
section
15E.155,
subsection
3,
19
and
certified
as
an
eligible
rural
housing
developer
by
the
20
authority
pursuant
to
that
section.
21
4.
“Low-income
household”
means
a
household
with
income
22
of
eighty
percent
or
less
of
the
area
median
family
income
by
23
county
as
determined
by
the
United
States
department
of
housing
24
and
urban
development.
25
Sec.
4.
NEW
SECTION
.
15E.155
Developer
certification.
26
1.
Application.
An
organization
may
apply
to
the
authority
27
in
the
manner
prescribed
by
the
authority
to
be
certified
as
28
an
eligible
housing
developer
or
an
eligible
rural
housing
29
developer.
30
2.
Eligible
housing
developer.
In
order
to
be
certified
as
31
an
eligible
housing
developer,
an
organization
shall
meet
the
32
requirements
of
paragraph
“a”
or
“b”
:
33
a.
(1)
The
organization
is
organized
under
chapter
504
and
34
qualifying
under
section
501(c)(3)
of
the
Internal
Revenue
Code
35
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as
an
organization
exempt
from
federal
income
tax
under
section
1
501(a)
of
the
Internal
Revenue
Code.
2
(2)
The
organization
has,
for
a
minimum
of
three
years
prior
3
to
the
time
of
the
application,
been
developing
single-family
4
housing
in
this
state
to
be
sold
to
low-income
households.
5
(3)
The
bylaws,
articles,
or
other
document
relating
to
the
6
establishment
of
the
organization
provide
that
a
purpose
of
the
7
organization
is
to
develop
affordable
housing
in
this
state
to
8
be
sold
to
low-income
households.
9
(4)
The
organization
agrees
to
provide
to
the
authority
10
information
reasonably
required
by
the
authority
in
order
to
11
verify
the
receipt,
donor
identity,
value,
and
eligibility
for
12
the
tax
credit
of
contributions
received
by
the
organization.
13
b.
(1)
The
organization
is
organized
under
chapter
504
and
14
qualifying
under
section
501(c)(3)
of
the
Internal
Revenue
Code
15
as
an
organization
exempt
from
federal
income
tax
under
section
16
501(a)
of
the
Internal
Revenue
Code.
17
(2)
A
purpose
of
the
organization
is
to
serve
or
support
18
an
organization
certified
as
an
eligible
housing
developer
19
pursuant
to
paragraph
“a”
of
this
subsection.
20
(3)
The
organization
accepts
contributions
on
behalf
of
21
an
organization
certified
as
an
eligible
housing
developer
22
pursuant
to
paragraph
“a”
of
this
subsection,
and
redistributes
23
any
and
all
such
contributions
to
that
organization.
24
(4)
The
organization
agrees
to
provide
to
the
authority
25
information
reasonably
required
by
the
authority
in
order
to
26
verify
the
receipt,
donor
identity,
value,
and
eligibility
for
27
the
tax
credit
of
contributions
received
by
the
organization.
28
3.
Eligible
rural
housing
developer.
In
order
to
be
29
certified
as
an
eligible
rural
housing
developer,
an
30
organization
shall
meet
the
requirements
of
paragraph
“a”
or
31
“b”
:
32
a.
The
organization
meets
the
requirements
of
subsection
33
2,
paragraph
“a
”,
and
for
the
three
years
preceding
the
34
application,
the
organization
has
conducted
at
least
fifty-one
35
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percent
of
its
housing
development
activities
in
Iowa
counties
1
with
a
population
of
fewer
than
fifty
thousand
as
determined
by
2
the
most
recent
federal
decennial
census.
3
b.
(1)
The
organization
is
organized
under
chapter
504
and
4
qualifying
under
section
501(c)(3)
of
the
Internal
Revenue
Code
5
as
an
organization
exempt
from
federal
income
tax
under
section
6
501(a)
of
the
Internal
Revenue
Code.
7
(2)
A
purpose
of
the
organization
is
to
serve
or
support
an
8
organization
certified
as
an
eligible
rural
housing
developer
9
pursuant
to
paragraph
“a”
of
this
subsection.
10
(3)
The
organization
accepts
contributions
on
behalf
of
an
11
organization
certified
as
an
eligible
rural
housing
developer
12
pursuant
to
paragraph
“a”
of
this
subsection,
and
redistributes
13
any
and
all
such
contributions
to
that
organization.
14
(4)
The
organization
agrees
to
provide
to
the
authority
15
information
reasonably
required
by
the
authority
in
order
to
16
verify
the
receipt,
donor
identity,
value,
and
eligibility
for
17
the
tax
credit
of
contributions
received
by
the
organization.
18
4.
Length
of
certification
and
recertification.
Unless
19
certification
is
revoked
pursuant
to
subsection
5,
a
20
certification
received
pursuant
to
this
section
shall
be
valid
21
for
a
period
of
three
years,
at
which
time
the
organization
22
may
apply
to
the
authority
in
the
manner
prescribed
by
the
23
authority
to
become
recertified
as
an
eligible
housing
24
developer
or
eligible
rural
housing
developer
pursuant
to
this
25
section.
26
5.
Revocation
of
certification.
An
organization
shall
27
notify
the
authority
in
a
timely
manner
of
any
changes
that
28
affect
the
organization’s
ability
to
qualify
as
an
eligible
29
housing
developer
or
eligible
rural
housing
developer.
The
30
authority
shall
revoke
the
certification
of
an
organization
31
certified
as
an
eligible
housing
developer
or
eligible
rural
32
housing
developer
if
that
organization
subsequently
fails
to
33
meet
the
requirements
of
subsection
2
or
3,
as
applicable.
34
The
revocation
of
a
certification
under
this
subsection
shall
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not
prohibit
an
organization
from
subsequently
applying
to
be
1
certified
as
an
eligible
housing
developer
or
eligible
rural
2
housing
developer
under
this
section.
3
Sec.
5.
NEW
SECTION
.
15E.156
Tax
credit
application
——
4
maximum
tax
credits.
5
1.
Application.
6
a.
To
receive
a
tax
credit
under
section
15E.157,
a
taxpayer
7
must
submit
an
application
in
the
manner
and
form
prescribed
8
by
the
authority
on
or
after
the
date
of
the
charitable
9
contribution
to
the
eligible
housing
developer
or
eligible
10
rural
housing
developer
for
which
a
tax
credit
is
sought.
The
11
eligible
housing
developer
or
eligible
rural
housing
developer
12
shall
forward
the
application
to
the
authority.
13
b.
The
authority
shall
issue
tax
credits
and
related
tax
14
credit
certificates
on
a
first-come,
first-served
basis
in
15
the
order
applications
are
received
from
eligible
housing
16
developers
and
eligible
rural
housing
developers
until
the
17
maximum
amount
of
tax
credits
authorized
pursuant
to
subsection
18
2
is
reached.
If
for
a
calendar
year
the
maximum
amount
19
of
tax
credits
applied
for
exceeds
the
amount
specified
in
20
subsection
2,
the
authority
shall
establish
a
wait
list
for
21
tax
credits.
Valid
applications
received
but
not
approved
22
by
the
authority
shall
be
placed
on
a
wait
list
in
the
order
23
the
applications
were
received
by
the
authority
and
those
24
applicants
shall
be
given
priority
for
receiving
tax
credits
in
25
succeeding
calendar
years.
Placement
on
a
wait
list
pursuant
26
to
this
paragraph
shall
not
constitute
a
promise
binding
the
27
state.
The
availability
of
a
tax
credit
and
approval
of
a
tax
28
credit
application
pursuant
to
this
section
in
a
future
year
29
is
contingent
upon
the
availability
of
tax
credits
in
that
30
particular
year.
31
2.
Maximum
tax
credit
amounts.
32
a.
The
aggregate
amount
of
tax
credits
issued
pursuant
to
33
this
section
shall
not
exceed
a
total
of
seven
million
dollars
34
per
calendar
year.
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b.
Twenty
percent
of
the
aggregate
amount
of
tax
credits
1
issued
in
a
calendar
year
shall
be
reserved
for
charitable
2
contributions
to
an
eligible
rural
housing
developer.
3
c.
(1)
Except
as
provided
in
subparagraph
(2),
the
maximum
4
amount
of
tax
credits
issued
to
any
one
taxpayer
for
charitable
5
contributions
in
a
tax
year
shall
not
exceed
two
hundred
fifty
6
thousand
dollars.
7
(2)
The
maximum
amount
of
tax
credits
issued
to
any
one
8
taxpayer
for
charitable
contributions
in
a
tax
year
shall
9
not
exceed
three
hundred
thousand
dollars
if
at
least
twenty
10
percent
of
the
taxpayer’s
total
charitable
contributions
made
11
during
the
tax
year
that
are
eligible
for
the
tax
credit
in
12
section
15E.157
are
to
one
or
more
eligible
rural
housing
13
developers.
14
Sec.
6.
NEW
SECTION
.
15E.157
Homeownership
development
tax
15
credit.
16
1.
a.
A
tax
credit
shall
be
allowed
against
the
taxes
17
imposed
in
chapter
422,
divisions
II,
III,
and
V,
and
in
18
chapter
432,
and
against
the
moneys
and
credits
tax
imposed
in
19
section
533.329,
equal
to
fifty
percent
of
the
amount
of
the
20
voluntary
cash
or
noncash
charitable
contributions
made
by
a
21
taxpayer
during
the
tax
year
to
an
eligible
housing
developer
22
or
eligible
rural
housing
developer.
23
b.
The
charitable
contribution
must
equal
or
exceed
five
24
hundred
dollars
in
order
to
qualify
for
the
tax
credit.
25
However,
an
eligible
housing
developer
or
eligible
rural
26
housing
developer
may
set
a
higher
minimum
qualifying
amount
27
pursuant
to
rules
prescribed
by
the
authority.
28
2.
The
tax
credit
shall
be
claimed
for
the
tax
year
during
29
which
the
taxpayer
was
issued
the
tax
credit.
30
3.
An
individual
may
claim
a
tax
credit
under
this
section
31
of
a
partnership,
limited
liability
company,
S
corporation,
32
estate,
or
trust
electing
to
have
income
taxed
directly
to
33
the
individual.
The
amount
claimed
by
the
individual
shall
34
be
based
upon
the
pro
rata
share
of
the
individual’s
earnings
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from
the
partnership,
limited
liability
company,
S
corporation,
1
estate,
or
trust.
2
4.
Any
tax
credit
in
excess
of
the
taxpayer’s
tax
liability
3
for
the
tax
year
may
be
credited
to
the
tax
liability
for
the
4
following
five
years
or
until
depleted,
whichever
occurs
first.
5
A
tax
credit
shall
not
be
carried
back
to
a
tax
year
prior
to
6
the
tax
year
in
which
the
taxpayer
claims
the
tax
credit.
7
5.
a.
To
claim
a
tax
credit
under
this
section,
a
taxpayer
8
shall
include
one
or
more
tax
credit
certificates
with
the
9
taxpayer’s
tax
return.
10
b.
The
tax
credit
certificate
shall
contain
the
taxpayer’s
11
name,
address,
tax
identification
number,
the
amount
of
the
12
credit,
and
any
other
information
required
by
the
department.
13
c.
The
tax
credit
certificate,
unless
rescinded
by
the
14
authority,
shall
be
accepted
by
the
department
as
payment
for
15
taxes
imposed
pursuant
to
chapter
422,
divisions
II,
III,
and
16
V,
and
in
chapter
432,
and
against
the
moneys
and
credits
17
tax
imposed
in
section
533.329,
subject
to
any
conditions
or
18
restrictions
placed
by
the
authority
upon
the
face
of
the
tax
19
credit
certificate
and
subject
to
the
limitations
of
this
20
chapter.
21
d.
Tax
credit
certificates
issued
pursuant
to
this
22
subchapter
shall
not
be
transferred
to
any
other
person.
23
6.
The
amount
of
the
charitable
contribution
for
which
the
24
tax
credit
is
claimed
shall
not
be
deductible
in
determining
25
taxable
income
for
state
income
tax
purposes.
26
Sec.
7.
NEW
SECTION
.
15E.158
Reports
to
general
assembly.
27
The
authority
shall
publish
an
annual
report
of
the
28
activities
conducted
pursuant
to
this
subchapter
and
shall
29
submit
the
report
to
the
governor
and
the
general
assembly.
30
The
report
shall
include
a
listing
of
certified
eligible
31
housing
developers
and
certified
eligible
rural
housing
32
developers,
the
number
of
tax
credit
certificates
and
the
33
amount
of
tax
credits
issued
by
the
authority,
and
the
number
34
of
taxpayers
and
the
amount
of
tax
applications
on
the
tax
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credit
wait
list,
if
any.
1
Sec.
8.
NEW
SECTION
.
15E.159
Rules.
2
The
authority
and
the
department
shall
each
adopt
rules
3
pursuant
to
chapter
17A
as
necessary
for
the
implementation
of
4
this
subchapter.
5
Sec.
9.
APPLICABILITY.
This
Act
applies
to
tax
years
6
beginning
on
or
after
January
1,
2019.
7
Sec.
10.
APPLICABILITY.
This
Act
applies
to
charitable
8
contributions
to
eligible
housing
developers
and
eligible
rural
9
housing
developers
made
on
or
after
January
1,
2019.
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
creates
a
homeownership
development
tax
credit
14
that
will
be
administered
by
the
economic
development
authority
15
(EDA)
and
that
will
provide
tax
credits
to
taxpayers
who
make
16
charitable
contributions
to
eligible
housing
developers
or
17
eligible
rural
housing
developers
in
this
state.
18
An
“eligible
housing
developer”
is
defined
in
the
bill
to
19
include
an
Iowa
nonprofit,
tax-exempt
organization
that
has
20
been
developing
single-family
housing
for
at
least
three
years
21
in
this
state
to
be
sold
to
low-income
households,
as
defined
22
in
the
bill,
that
includes
the
development
of
such
housing
in
23
this
state
for
low-income
households
as
a
purpose
in
its
bylaws
24
or
other
organizational
documents,
and
that
agrees
to
provide
25
EDA
with
certain
information
in
order
to
properly
verify
26
charitable
contributions.
An
“eligible
housing
developer”
27
also
includes
an
Iowa
nonprofit,
tax-exempt
organization
whose
28
purpose
is
to
support
an
organization
described
above
and
who
29
redistributes
any
charitable
contributions
received
on
behalf
30
of
that
eligible
housing
developer
to
the
developer.
31
An
“eligible
rural
housing
developer”
is
defined
in
the
32
bill
to
include
an
Iowa
nonprofit,
tax-exempt
organization
33
that
meets
the
requirements
of
an
eligible
housing
developer
34
described
above
but
that
additionally
has
conducted
for
the
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last
three
years
at
least
51
percent
of
its
housing
development
1
activities
in
Iowa
counties
with
a
population
of
fewer
than
2
50,000
as
determined
by
the
most
recent
federal
decennial
3
census.
4
An
organization
must
apply
to
EDA
to
be
certified
as
an
5
eligible
housing
developer
or
an
eligible
rural
housing
6
developer.
A
certification
by
EDA
will
last
for
a
period
of
7
three
years,
at
which
time
an
eligible
housing
developer
or
8
eligible
rural
housing
developer
may
apply
to
be
recertified.
9
Failure
to
meet
the
requirements
specified
above
may
cause
the
10
organization
to
lose
its
certification
as
an
eligible
housing
11
developer
or
eligible
rural
housing
developer,
but
the
loss
12
of
such
certification
does
not
prohibit
an
organization
from
13
subsequently
reapplying
to
EDA
for
certification.
14
In
order
to
receive
a
tax
credit
for
a
charitable
15
contribution
to
an
eligible
housing
developer
or
eligible
rural
16
housing
developer,
a
taxpayer
is
required
to
apply
to
the
17
developer
in
the
manner
and
form
prescribed
by
EDA
on
or
after
18
the
date
the
charitable
contribution
is
made.
The
developer
is
19
then
required
to
forward
the
application
to
EDA.
20
The
tax
credit
equals
50
percent
of
the
amount
of
the
cash
or
21
noncash
charitable
contribution
made
to
the
eligible
housing
22
developer
or
eligible
rural
housing
developer
during
the
tax
23
year.
The
minimum
amount
of
charitable
contribution
that
may
24
qualify
for
the
tax
credit
is
$500,
but
each
eligible
housing
25
developer
or
eligible
rural
housing
developer
is
allowed
to
26
set
a
higher
minimum
contribution
amount.
The
bill
provides
27
that
EDA
shall
not
issue
more
than
$7
million
in
tax
credits
28
per
calendar
year.
Of
that
$7
million
maximum
aggregate
29
amount,
20
percent
($1.4
million)
of
the
tax
credits
shall
30
be
reserved
for
charitable
contributions
to
eligible
rural
31
housing
developers.
The
maximum
amount
of
tax
credits
that
32
may
be
issued
per
taxpayer
for
charitable
contributions
in
a
33
tax
year
is
$250,000,
or
$300,000
if
at
least
20
percent
of
34
the
taxpayer’s
total
charitable
contributions
to
the
eligible
35
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housing
development
organizations
during
the
tax
year
were
to
1
one
or
more
eligible
rural
housing
developers.
2
The
tax
credit
may
be
claimed
against
the
individual
income
3
tax,
the
corporate
income
tax,
the
franchise
tax,
the
insurance
4
companies
tax,
and
the
moneys
and
credits
tax.
To
claim
a
tax
5
credit,
a
taxpayer
must
include
a
tax
credit
certificate
with
6
the
taxpayer’s
tax
return.
The
tax
credit
is
nonrefundable
7
and
nontransferable,
but
any
excess
may
be
carried
forward
for
8
five
tax
years.
The
amount
of
the
charitable
contribution
for
9
which
the
tax
credit
is
claimed
shall
not
be
deductible
in
10
determining
taxable
income
for
state
tax
purposes.
11
EDA
is
required
to
issue
tax
credits
on
a
first-come,
12
first-served
basis
until
the
maximum
amount
of
$7
million
13
per
calendar
year
is
reached.
If
the
amount
of
tax
credit
14
applications
exceeds
$7
million
in
a
calendar
year,
EDA
15
is
required
to
establish
a
wait
list
and
give
priority
in
16
subsequent
years
to
applications
on
the
wait
list.
17
The
bill
requires
EDA
and
the
department
of
revenue
to
18
adopt
rules
as
necessary
for
the
implementation
of
the
bill,
19
and
requires
EDA
to
publish
and
submit
annual
reports
to
20
the
governor
and
general
assembly
containing
information
as
21
described
in
the
bill.
22
The
bill
applies
to
tax
years
beginning
on
or
after
January
23
1,
2019,
and
to
charitable
contributions
to
eligible
housing
24
developers
and
eligible
rural
housing
developers
on
or
after
25
that
date.
26
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