House File 641 - Introduced
HOUSE FILE 641
BY COMMITTEE ON ECONOMIC
GROWTH AND TECHNOLOGY
(SUCCESSOR TO HSB 23)
A BILL FOR
1 An Act relating to the economic development authority,
2 including certain tax credit programs, the Iowa wine, beer,
3 and spirits promotion board, and the beer and liquor control
4 fund, and including applicability provisions.
5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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1 DIVISION I
2 TAX CREDITS
3 Section 1. Section 15.119, subsection 2, paragraph h, Code
4 2023, is amended to read as follows:
5 h. The renewable chemical production tax credit program
6 administered pursuant to sections 15.315 through 15.322. In
7 allocating tax credits pursuant to this subsection for the
8 fiscal year beginning July 1, 2021, and for each fiscal year
9 thereafter beginning before July 1, 2037, the authority shall
10 not allocate more than five million dollars for purposes of
11 this paragraph. This paragraph is repealed July 1, 2030 2039.
12 Sec. 2. Section 15.316, subsection 3, Code 2023, is amended
13 to read as follows:
14 3. “Building block chemical” means a molecule converted
15 from biomass feedstock as a first product or a secondarily
16 derived product that can be further refined into a higher-value
17 chemical, material, or consumer product. “Building block
18 chemical” includes but is not limited to high-purity glycerol,
19 oleic acid, lauric acid, methanoic or formic acid, arabonic
20 acid, erythonic acid, glyceric acid, glycolic acid, lactic
21 acid, 3-hydroxypropionate, propionic acid, malonic acid,
22 serine, succinic acid, fumaric acid, malic acid, aspartic
23 acid, 3-hydroxybutyrolactone, acetoin, threonine, itaconic
24 acid, furfural, levulinic acid, glutamic acid, xylonic acid,
25 xylaric acid, xylitol, arabitol, citric acid, aconitic acid,
26 5-hydroxymethylfurfural, lysine, gluconic acid, glucaric acid,
27 sorbitol, gallic acid, ferulic acid, butyric acid, nonfuel
28 butanol, nonfuel ethanol, or such additional molecules as may
29 be included by the authority by rule after consultation with
30 appropriate experts from Iowa state university, including
31 but not limited to the Iowa state university center for
32 biorenewable chemicals.
33 Sec. 3. Section 15.318, subsection 1, Code 2023, is amended
34 by adding the following new paragraph:
35 NEW PARAGRAPH. f. All complete applications submitted
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1 by eligible businesses shall be reviewed and scored on a
2 competitive basis by the authority pursuant to rules adopted
3 by the authority.
4 Sec. 4. Section 15.318, subsection 2, paragraphs c and d,
5 Code 2023, are amended to read as follows:
6 c. An eligible business shall fulfill all the requirements
7 of the program and the agreement before receiving the authority
8 issues the business a tax credit certificate or entering enters
9 into a subsequent agreement with the business under this
10 section. The authority may decline to enter into a subsequent
11 agreement with the business under this section or to issue a
12 tax credit if an agreement is not successfully fulfilled.
13 d. Upon establishing that all requirements of the program
14 and the agreement have been fulfilled, the authority shall
15 issue a tax credit and related tax credit certificate to the
16 eligible business stating the amount of renewable chemical
17 production tax credit the eligible business may claim.
18 Sec. 5. Section 15.318, subsection 3, paragraphs a, d, and
19 e, Code 2023, are amended to read as follows:
20 a. The maximum amount of tax credit that the authority may
21 be issued issue under section 15.319 to an eligible business
22 for the production of renewable chemicals in a calendar year
23 shall not exceed the following:
24 (1) In the case of an eligible business that has been in
25 operation in the state for five years or less at the time of
26 application, is one million dollars.
27 (2) In the case of an eligible business that has been in
28 operation in the state for more than five years at the time of
29 application, five hundred thousand dollars.
30 d. An The authority shall not issue an eligible business
31 shall not receive more than five tax credits credit
32 certificates under the program.
33 e. The authority shall issue tax credits under the program
34 on a first-come, first-served basis until the maximum amount of
35 tax credits allocated pursuant to section 15.119, subsection
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1 2, paragraph “h”, is reached. The authority shall maintain a
2 list of successful applicants under the program, so that if the
3 maximum aggregate amount of tax credits is reached in a given
4 fiscal year, eligible businesses that successfully applied
5 but for which tax credits were not issued shall be placed on
6 a wait list in the order the eligible businesses applied and
7 shall be given priority for receiving tax credits in succeeding
8 fiscal years. Placement on a wait list pursuant to this
9 paragraph shall not constitute a promise binding the state.
10 The availability of a tax credit and issuance of a tax credit
11 certificate pursuant to this subsection in a future fiscal year
12 is contingent upon the availability of tax credits in that
13 particular fiscal year. In each fiscal year beginning on or
14 after July 1, 2023, and ending on or before June 30, 2036, the
15 authority may award an amount of tax credits under the program
16 not to exceed the maximum aggregate amount allocated in section
17 15.119, subsection 2, paragraph “h”.
18 Sec. 6. Section 15.319, subsection 1, Code 2023, is amended
19 to read as follows:
20 1. An eligible business that has entered into an agreement
21 pursuant to section 15.318 may claim a tax credit in an amount
22 equal to the product of five cents multiplied by the number
23 of pounds of renewable chemicals produced in this state from
24 biomass feedstock by the eligible business during the calendar
25 year in excess of the eligible business’s pre-eligibility
26 production threshold. However, an eligible business shall
27 not receive a tax credit for the production of a secondarily
28 derived building block chemical if that chemical is also the
29 subject of a credit at the time of production as a first
30 product. The renewable chemical production tax credit shall
31 not be available for any renewable chemical produced before the
32 2017 calendar year or after the 2026 2035 calendar year.
33 Sec. 7. Section 15.320, subsection 1, Code 2023, is amended
34 to read as follows:
35 1. For purposes of this section, “successful tax credit
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1 applicant” includes, with respect to each calendar year, an
2 eligible business that was issued a tax credit certificate for
3 production of renewable chemicals during that calendar year,
4 and an eligible business that successfully applied for a tax
5 credit for the production of renewable chemicals during that
6 calendar year, but was not issued a tax credit and was instead
7 placed on a wait list pursuant to section 15.318, subsection
8 3, paragraph “e”.
9 Sec. 8. Section 15.320, subsection 2, Code 2023, is amended
10 by striking the subsection and inserting in lieu thereof the
11 following:
12 2. By January 31 of each year, the board, in cooperation
13 with the department of revenue, shall submit to the general
14 assembly and to the governor a report describing the activities
15 of the program for the most recent calendar year for which the
16 tax credit application period has ended pursuant to section
17 15.318, subsection 1, paragraph “d”. The report shall, at a
18 minimum, include the following information:
19 a. The aggregate number of pounds, and a list of each type,
20 of renewable chemicals produced in Iowa by all successful
21 tax credit applicants during the calendar year prior to the
22 calendar year for which the successful applicants first applied
23 for a tax credit under the program.
24 b. The aggregate number of pounds, and a list of each type,
25 of renewable chemicals produced in Iowa by all successful tax
26 credit applicants during each calendar year.
27 c. The number of employees located in Iowa of all successful
28 tax credit applicants during the calendar year prior to the
29 calendar year for which the successful applicants first applied
30 for a tax credit under the program.
31 d. The number of employees located in Iowa of all successful
32 tax credit applicants during each calendar year.
33 e. For each eligible business issued a renewable chemical
34 production tax credit during each calendar year:
35 (1) The identity of the eligible business.
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1 (2) The amount of the tax credit.
2 (3) The manner in which the eligible business first
3 qualified as an eligible business under section 15.317,
4 subsection 4, whether by organizing, expanding, or locating in
5 the state.
6 f. The total amount of all renewable chemical production tax
7 credits claimed during each calendar year, and the portion of
8 each claim issued as a refund.
9 Sec. 9. Section 15.320, subsection 3, Code 2023, is amended
10 to read as follows:
11 3. To protect the presumption of confidentiality
12 established in section 15.318, subsection 5, the board shall
13 report all information in an aggregate form to prevent,
14 as much as possible, information being attributable to any
15 particular eligible business, except as provided in subsection
16 2, paragraph “k” “e”.
17 Sec. 10. Section 15.322, Code 2023, is amended to read as
18 follows:
19 15.322 Future repeal.
20 Section 15.315, 15.316, 15.317, 15.318, 15.319, 15.320,
21 15.321, and this section, are repealed July 1, 2030 2039.
22 Sec. 11. Section 15E.52, subsection 1, paragraph c, Code
23 2023, is amended to read as follows:
24 c. “Innovative business” means a business applying novel
25 or original methods to the manufacture of a product or the
26 delivery of a service. “Innovative business” includes but is
27 not limited to a business engaged in the industries of advanced
28 manufacturing, biosciences, and information technology, or
29 educational technology.
30 Sec. 12. Section 15E.52, subsection 5, paragraph a, Code
31 2023, is amended to read as follows:
32 a. To receive a tax credit, a taxpayer must submit an
33 application to the board. The board shall issue certificates
34 under this section on a first-come, first-served basis, which
35 certificates may be redeemed for tax credits. The board shall
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1 issue such certificates so that not more than the amount
2 allocated for such tax credits under section 15.119, subsection
3 2, may be claimed. The board shall not issue a certificate
4 before September 1, 2014.
5 Sec. 13. Section 15E.52, subsection 5, paragraph b, Code
6 2023, is amended by striking the paragraph.
7 Sec. 14. Section 15E.52, subsection 8, Code 2023, is amended
8 to read as follows:
9 8. The board shall not certify an innovation fund after June
10 30, 2023 2028.
11 Sec. 15. Section 15E.52, subsection 10, paragraph b, Code
12 2023, is amended by striking the paragraph.
13 Sec. 16. Section 422.10B, Code 2023, is amended to read as
14 follows:
15 422.10B Renewable chemical production tax credit.
16 The taxes imposed under this subchapter, less the credits
17 allowed under section 422.12, shall be reduced by a renewable
18 chemical production tax credit allowed under section 15.319.
19 This section is repealed January 1, 2033 2041.
20 Sec. 17. Section 422.33, subsection 22, Code 2023, is
21 amended to read as follows:
22 22. The taxes imposed under this subchapter shall be reduced
23 by a renewable chemical production tax credit allowed under
24 section 15.319. This subsection is repealed January 1, 2033
25 2041.
26 Sec. 18. APPLICABILITY.
27 1. The following apply to all applications submitted to the
28 renewable chemical production tax credit program on or after
29 July 1, 2023:
30 a. The section of this division of this Act amending section
31 15.316, subsection 3.
32 b. The section of this division of this Act amending section
33 15.318, subsection 1.
34 c. The section of this division of this Act amending section
35 15.318, subsection 3, paragraphs “a”, “d”, and “e”.
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1 2. The following apply to all eligible businesses placed on
2 a wait list pursuant to section 15.318, subsection 3, paragraph
3 “e”, on or before June 30, 2023:
4 a. The portion of the section of this division of this Act
5 amending section 15.318, subsection 3, paragraph “e”.
6 b. The section of this division of this Act amending section
7 15.320, subsection 1.
8 3. The following applies to all applications submitted
9 to the economic development authority’s board for innovation
10 fund investment tax credits, administered pursuant to section
11 15E.52, on or after July 1, 2023:
12 The section of this division of this Act amending section
13 15E.52, subsection 1, paragraph “c”.
14 4. The following applies to all applications submitted for
15 innovation fund tax credits, administered pursuant to section
16 15E.52, placed on a wait list pursuant to section 15E.52,
17 subsection 5, paragraph “b”:
18 The section of this division of this Act amending section
19 15E.52, subsection 5, paragraph “b”.
20 DIVISION II
21 IOWA WINE, BEER, AND SPIRITS PROMOTION BOARD
22 Sec. 19. Section 15E.116, Code 2023, is amended to read as
23 follows:
24 15E.116 Iowa wine, and beer, and spirits promotion board.
25 An Iowa wine, and beer, and spirits promotion board is
26 created. The board consists of three four members appointed
27 by the director of the economic development authority. Each
28 member shall serve a term of two years on the board. One member
29 shall represent the authority, one member shall represent the
30 Iowa wine makers, and one member shall represent the Iowa beer
31 makers, and one member shall represent Iowa distilleries. The
32 board shall advise the authority on the best means to promote
33 wine, and beer, and spirits made in Iowa.
34 Sec. 20. Section 15E.117, Code 2023, is amended to read as
35 follows:
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1 15E.117 Promotion of Iowa wine, and beer, and spirits.
2 1. The economic development authority shall consult with
3 the Iowa wine, and beer, and spirits promotion board on the
4 best means to promote wine, and beer, and spirits made in Iowa.
5 2. The authority has shall have the authority to contract
6 with private persons for the promotion of beer, and wine, and
7 spirits made in Iowa.
8 3. Moneys appropriated to the authority pursuant to
9 sections 123.143 and 123.183, and moneys transferred to the
10 authority pursuant to section 123.17, subsection 8A, may
11 be used by the authority for the purposes of this section,
12 including administrative expenses incurred under this section.
13 Sec. 21. Section 123.17, Code 2023, is amended by adding the
14 following new subsection:
15 NEW SUBSECTION. 8A. After any transfers provided for
16 in subsections 3, 5, 6, 7, and 8 are made, and before any
17 other transfer to the general fund, the department of commerce
18 shall transfer to the economic development authority from the
19 beer and liquor control fund the lesser of two hundred fifty
20 thousand dollars or one percent of the gross sales of native
21 distilled spirits by all class “A” native distilled spirits
22 license holders made by the division for the purposes of
23 promoting Iowa wine, beer, and spirits.
24 EXPLANATION
25 The inclusion of this explanation does not constitute agreement with
26 the explanation’s substance by the members of the general assembly.
27 This bill relates to the economic development authority,
28 including certain tax credit programs, the Iowa wine, beer, and
29 spirits promotion board, and the beer and liquor control fund.
30 The bill is divided into two divisions.
31 DIVIS