SF 2254 – Regulation of non-agricultural commercial breeder establishments
SF 2359 – IEDA Investment tax credits and Strategic Infrastructure Program
SF 2356 – Food bank sales tax exemption
SSB 3222– Medical Cannabidiol
HF 2453 – Historic tax credits
HF 2447 – Motorsport RV registration and operation
HF 2456 – Approval and imposition of community college property tax levies
HF 2454 – Changes to Beginning Farmer Tax Credit
HF 2459 – Double volunteer firefighter and EMS tax credit
HF 2464 – Knoxville raceway sales tax rebate
HF 2466 – Election to assess Section 42 housing as multi-residential
HF 2468 – Adoption tax credit
FLOOR ACTION:
HF 2446 provides a sales tax exemption for the purchase of diesel fuel trailers and seed tenders primarily used in agricultural production. [4/23: 49-0 (Segebart excused]
HF 2456 would replace the existing public referendum process for levy rates and allow levies to be reauthorized by a vote of the board if the levy has already been approved by the voters in two elections. The bill also provides that voters have the opportunity to petition for a reverse referendum on the continuance of a levy at the time the levy comes up for renewal. If a board wants to increase a levy rate, it would be subject to an election as well. However, all levies are currently issued at the maximum rate. [4/21: 44-4 (Chapman, Garrett, Schneider, Zaun “no”; Behn, Segebart excused)]
FLOOR & COMMITTEE ACTION:
SF 2356 exempts the purchase price of tangible property sold and services provided to a nonprofit food bank from being subject to the state sales tax. [4/23: 49-0 (Segebart excused); 4/17: short form (Bertrand, Feenstra excused)]
HF 2453 makes several substantive changes to the Historic Preservation & Cultural and Entertainment District Tax Credit program. Under current law, a taxpayer may receive a tax credit that is equal to 25 percent of the qualified rehabilitation costs. The bill changes the language to state “not to exceed 25 percent.”
The bill also changes the process for application and awards. Currently, applications are submitted during a filing window and then awarded through a “lottery system.” The bill allows for a process in which a taxpayer would apply, then be registered for the program (if the Iowa Economic Development Authority deems it eligible), an agreement, compliance and an examination and audit of the project. Instead of the lottery system, it is more of a competitive, shovel-ready and rules-prescribed process.
Under current law, the tax credits are allocated with 10 percent for small projects, 30 percent for projects in cultural and entertainment districts, 20 percent for disaster recovery projects, 20 percent for projects that involve the creation of more than 500 new permanent jobs and 20 percent for any eligible project. The bill removes those allocations. The $45 million overall tax credit cap remains. The bill allows for tax credits that are declined or revoked to be awarded.
The committee adopted an amendment that strikes language stating the tax credit amount cannot exceed 25 percent and inserts language making the amount of the tax credit equal to 25 percent of the qualified rehabilitation expenditures. The tax credit cannot exceed 25 percent of the final qualified rehabilitation expenditures verified by the Economic Development Authority. The amendment also provides that an agreement will allow a certain amount of cost overruns based on the size of the project:
• A project of $750,000 or less, cost overruns cannot exceed 15 percent.
• A project more than $750,000 but not more than $6 million, cost overruns cannot exceed 10 percent.
• A project more than $6 million, cost overruns cannot exceed 5 percent.
An agreement termination will not occur earlier than five years from the date on which the tax credit certificate is issued. Finally, the bill allows for tax credits to be revoked and the state to seek repayment of tax credits if there is default in the agreement. This could mean the state could seek out repayment from a third-party transferee. The amendment still allows the state to revoke and see repayment of those tax credits but does narrow the third-party liability. [4/21: 48-0 (Behn, Segebart excused); 4/17: short form (Bertrand, Feenstra excused)]
HF 2464 provides a sales tax rebate for a period of 10 years for the Knoxville racetrack at the Marion County fairgrounds. The value of the rebate is limited to 25 percent of the project cost or a total of $2 million, whichever is less. The project includes upgrades to the existing racetrack facility. The sales taxes subject to the rebate are those collected from sales within the racetrack facility. [4/23: 39-10 (Behn, Bowman, Chapman, Chelgren, Guth, Quirmbach, Schneider, Smith, Whitver, Zaun “no”; Segebart absent); 4/22: short form (Schneider, Smith “no”; Behn, Bertrand, Chapman excused)]
HF 2466 allows certain housing that is rented or leased to low-income individuals (Section 42 housing) the chance to elect to be assessed and taxed as multi-residential housing. The Code currently provides a separate assessment procedure for Section 42 housing. Last year’s property tax reform legislation created a new class of property called multi-residential and established a taxable valuation rollback schedule to bring equity between multi-residential housing and residential housing. Section 42 housing was excluded from the multi-residential housing taxable valuation schedule because it is assessed in a different manner than multi-residential housing. However, it appears some Section 42 housing units could be taxed at a higher rate than standard multi-residential housing at some point in the future as the taxable valuation schedule kicks in. To avoid a situation where low-income housing is taxed at a rate higher than the market rate for housing, this bill would allow for the owner of the property to elect to be assessed as multi-residential housing and be taxed at the applicable rate. [4/23: 49-0 (Segebart excused; Hatch “present”); 4/22: short form (Behn, Bertrand, Chapman excused)]
COMMITTEE ACTION:
SF 2254 revises current Iowa law providing for the regulation of commercial establishments that keep non-agricultural animals (e.g., dogs) to allow state-level oversight and inspections of USDA-licensed facilities. To cover the costs associated with state inspection, it sets fees on a sliding scale, based on the number of animals on hand. It establishes a remediation fund patterned after a similar fund maintained for the rescue of agriculture animals. The bill also increases the standard of care to require larger cage sizes, solid flooring, access to the outdoors and annual veterinary exams for each animal.
In the past few weeks, a working group of hobby breeders, representatives from Iowa State College of Veterinary Medicine, representatives from the Iowa Veterinary Medicine Association and other Iowans participated in meetings to further amend SF 2254. Highlights of the amendment include establishment of a new “special” license for hobby breeders. To qualify, all dogs kept by the person during the period of the license must produce no more than three litters or 30 puppies, whichever is greater, as reported on the license registration form. Other than that, there are no limits on the numbers of dogs kept, altered or not. A “special” breeder license fee is $100 annually, with no additional fees. “Special” breeders are exempt from the outdoor enclosure requirement. They also are exempt from unannounced inspections by the Iowa Department of Agriculture if their dogs have been examined by a veterinarian within the last 12 months and have been vaccinated per the requirements set forth by the Department of Agriculture (as reported on the license registration form). If not, they are open to inspection by appointment only. [4/23: 9-5 (Behn, Chapman, Feenstra, Schneider, Smith “no”; Bertrand excused)]
SF 2359makes several changes to programs administered by the Iowa Economic Development Authority (IEDA). The bill modifies investment tax credits for community based seed capital funds and qualifying business. The bill eliminates the three-year waiting period for an investor to claim a credit that has been awarded for investing in a qualifying business, and makes other changes regarding timing, dates and requirements of investments. In addition, the bill allows for moneys transferred from the Targeted Small Business Financial Assistance Program to be used to establish a program to assist private entities in increasing the number of female entrepreneurs in the state.
The bill establishes a Strategic Infrastructure Fund to provide financial assistance for relocation or expansion projects for existing businesses, as well as financial assistance for new businesses. The financial assistance would be used for infrastructure needs. The bill requires the Innovation Council to review and recommend the applications for approval for the infrastructure fund. The IEDA Board will then award projects. The bill requires that recaptures or repayments of the Iowa Values Fund will be transferred to the new Infrastructure Fund.
The bill makes changes to the Endow Iowa Program. Currently, to be an Endow Iowa qualified community foundation, the foundation must substantially comply with national standards. The amendment strikes “substantially complies” and instead requires that a foundation “attains” national standards. In addition, the bill made changes to the Economic Development Regions, allowing for more flexibility for entities pursuing economic development with a regional focus. [4/23: short form (Bertrand excused)]
SSB 3222 legalizes the possession and medical use of cannabidiol under certain conditions. Cannabidiol is a non-psychoactive component of marijuana that possesses a wide range of therapeutic benefits. The medicine is only allowed to be used to treat intractable epilepsy after the referral of a neurologist. The Act is repealed July 1, 2017. [4/23: short form (Behn, Chapman, Feenstra, Smith “no”; Bertrand excused)]
HF 2447 establishes a new motorsports recreational vehicle classification for purposes of motor vehicle regulation and licensing and establishes a $400 annual registration fee. There are very few of these vehicles on Iowa roads, but they currently exceed length limits for vehicles. This will reclassify them so they can be driven on roads without being fined. [4/22: short form (Black, Petersen “no”; Behn, Bertrand, Chapman excused)]
HF 2454 extends the carry forward period for claiming the beginning farmer tax credits from five years to ten years. These tax credits are meant to encourage the transfer of assets to beginning farmers and to contract with those beginning farmers to provide farming services. [4/22: short form (Behn, Bertrand, Chapman excused)]
HF 2459 expands the volunteer firefighter and emergency medical services (EMS) tax credit to include reserve peace officers, professional firefighters and EMS personnel who volunteer for another program. The bill also doubles the existing credit from $50 to $100. [4/22: short form (Behn, Bertrand, Chapman excused)]
HF 2468 creates a new adoption tax credit. This allows individuals to receive an income tax credit for 25 percent of qualified adoption expenses, with the total credit not to exceed $2,500. Currently, these expenses are allowed to be deducted from an individual’s taxable income for a tax benefit of approximately $500. This credit increases the tax benefit for adoption expenses by about $2,000 for the individual. Expenses used to claim the tax credit cannot be used to claim the tax deduction. [4/22: short form (Behn, Bertrand, Chapman excused)]