Bill Summary – FastDemocracy

House File 363 - Introduced
                                  HOUSE FILE 363
                                  BY COMMITTEE ON ECONOMIC
                                      GROWTH
                                  (SUCCESSOR TO HF 3)
                            A BILL FOR
An Act permitting businesses’ new onsite daycare facilities or
  businesses’ expansion of existing onsite daycare facilities
  to qualify as projects under the high quality jobs program,
  and making penalties applicable.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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    Section 1. NEW SECTION. 15.329A Eligible business —— onsite
 daycare facilities.
    1. As used in this section, unless the context otherwise
 requires:
    a. “Child” or “children” means a person or persons twelve
 years of age or younger.
    b. “Child care” means the care, supervision, and guidance of
 a child or children by a person other than the child’s parent,
 guardian, or custodian.
    c. “Project completion” means the first date upon which the
 business’s onsite daycare facility begins offering child care
 for the business’s employees’ children.
    2. Notwithstanding section 15.327, subsection 20, the
 authority may provide tax incentives or project completion
 assistance under this part to a business for a project that
 involves a new onsite child care facility, or the expansion of
 an existing onsite child care facility, that offers low-cost
 child care for the business’s employees.
    3. Notwithstanding section 15.329, subsection 1, paragraphs
 “c” and “g”, the authority may provide tax incentives or
 project completion assistance under this part to a business
 for a project pursuant to this section if the project creates
 or retains jobs that will pay a percent of the qualifying
 wage threshold as determined pursuant to rules adopted by the
 authority.
    4. Notwithstanding section 15.329, subsection 1, paragraph
 “e”, the authority may, pursuant to rules adopted by the
 authority, determine alternative metrics, other than the fiscal
 impact ratio, to qualify a business to be eligible for tax
 incentives or project completion assistance for a project under
 this section. The authority may consult with the department
 of human services as necessary if the authority determines
 alternative metrics.
    5. Notwithstanding section 15.329, subsection 3, the
 authority shall consider, and may consult with the department
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 of human services on, a variety of factors, including but
 not limited to the following, in determining the eligibility
 of a business to participate in the program pursuant to this
 section:
    a. The quality of the jobs to be created or retained.
 In rating the quality of the jobs, the authority shall
 place greater emphasis on those jobs that are full-time or
 career-type positions, that provide comprehensive health
 benefits, and that pay a wage equal to or higher than similar
 jobs within a twenty-five-mile radius of the proposed project.
    b. The impact of the proposed project on other businesses
 in competition with the business’s proposed project. The
 authority shall make a good-faith effort to identify existing
 child care providers in competition with the business’s
 proposed project. The authority shall make a good-faith effort
 to determine the probability that the proposed tax incentives
 or project completion assistance will displace workers at
 existing child care providers. In determining the impact
 on child care providers in competition with the business’s
 proposed project, jobs created or retained as a result of
 similar jobs being displaced elsewhere in a twenty-five-mile
 radius shall not be considered direct jobs created or retained.
    c. The economic impact to the state of the proposed project.
 In measuring the economic impact, the authority shall place
 greater emphasis on projects that meet one or more of the
 following conditions:
    (1) Are located in an economically distressed area. For
 purposes of this section, “economically distressed area” means
 a county that ranks among the bottom thirty-three of all Iowa
 counties, as measured by one of the following:
    (a) Average monthly unemployment level for the most recent
 twelve-month period.
    (b) Average annualized unemployment level for the most
 recent five-year period.
    (2) Will have the capacity to care for twenty or more
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                                H.F. 363
 children.
    (3) Are located in an area that has an inadequate number
 of existing child care providers based on the population of
 children in the area.
    (4) Will provide child care to a business’s employees at a
 low-cost rate as determined pursuant to rules adopted by the
 authority.
    6. If a business that is approved to receive tax incentives
 or project completion assistance under this section closes or
 reduces the capacity of the child care facility for which the
 tax incentives or project completion assistance was received,
 the authority shall have the discretion to reduce or eliminate
 some or all of the tax incentives or project completion
 assistance, and the business may be subject to repayment of
 all or a portion of the tax incentives or project completion
 assistance that the business has received.
    7. a. A business that is awarded tax incentives pursuant
 to this section shall be entitled to a refund of the sales
 and use taxes paid under chapter 423 for gas, electricity,
 water, or sewer utility services, goods, wares, or merchandise,
 or on services rendered, furnished, or performed to or for a
 contractor or subcontractor and used in the fulfillment of a
 written contract relating to the construction or equipping
 of a child care facility that is part of the project of the
 eligible business. Taxes attributable to intangible property,
 furniture, and furnishings shall not be refunded.
    b. To receive a refund, a claim shall be filed by the
 eligible business with the department as follows:
    (1) The contractor or subcontractor shall state under oath,
 on forms provided by the department, the amount of the sales
 of goods, wares, or merchandise, or the services rendered,
 furnished, or performed, including gas, electric, water, and
 sewer utility services upon which sales or use tax has been
 paid prior to project completion, and shall file the forms with
 the eligible business before final settlement is made between
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                                         H.F. 363
 the business and the contractor or subcontractor.
    (2) The eligible business shall, not more than one year
 after project completion, make application to the department
 for any refund of the amount of the sales and use taxes paid
 pursuant to chapter 423 upon any sales of goods, wares, or
 merchandise, or the services rendered, furnished, or performed,
 including gas, electric, water, and sewer utility services
 prior to project completion. The application shall be made in
 the manner and upon forms to be provided by the department.
 The department shall audit the claim and, if approved, issue
 a warrant to the eligible business in the amount of the sales
 or use tax approved by the department. A claim filed by an
 eligible business in accordance with this subsection shall not
 be denied by reason of a limitation provision set forth in
 chapter 421 or 423.
    (3) The eligible business shall inform the department of
 revenue of the project completion in writing within two weeks
 of the project completion.
    (4) A contractor or subcontractor who willfully makes a
 false report of the sales or tax paid under the provisions of
 this subsection commits a simple misdemeanor and is liable for
 the payment of the sales and use tax and any applicable penalty
 and interest.
    8. The authority shall adopt rules pursuant to chapter 17A
 as necessary to administer this section.
    9. The department of revenue may adopt rules pursuant to
 chapter 17A as necessary to administer this section.
                            EXPLANATION
         The inclusion of this explanation does not constitute agreement with
          the explanation’s substance by the members of the general assembly.
  This bill permits businesses’ new onsite daycare facilities
or businesses’ expansion of existing onsite daycare facilities
to qualify as projects under the high quality jobs program, and
makes penalties applicable.
  The bill permits the economic development authority
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                                H.F. 363
 (authority) to provide tax incentives (incentives) or project
 completion assistance (assistance) under the high quality jobs
 program (program) to a business for a project that involves a
 new onsite child care facility or the expansion of an existing
 onsite facility that offers low-cost child care for the
 business’s employees. The authority may provide incentives
 or assistance under the program to a business for a project
 that creates or retains jobs that will pay a percent of the
 qualifying wage threshold as determined pursuant to rules
 adopted by the authority. The bill permits the authority,
 pursuant to rules adopted by the authority, to determine
 metrics to qualify a business to be eligible for the program.
 The authority may consult with the department of human services
 (DHS) as necessary if the authority determines alternative
 metrics.
    In determining the eligibility of a business’s project under
 the program, the bill requires the authority to consider, and
 allows the authority to consult with DHS on, the quality of
 the jobs to be created or retained, with an emphasis placed on
 jobs that are full-time or career-type positions, that provide
 comprehensive health benefits, and that pay wages equal to
 or higher than similar jobs within a 25-mile radius of the
 business’s proposed project. The authority is also required to
 consider the impact of the proposed project on other child care
 providers in competition with the proposed project.
    The authority must make a good-faith effort to identify
 existing child care providers in competition with the
 business’s proposed project and the probability that the
 proposed project will displace employees of the existing child
 care providers. Jobs created or retained by the proposed
 project as a result of similar jobs being displaced in a
 25-mile radius from the business cannot be considered by the
 authority as jobs created or retained.
    The bill also requires the authority to consider the
 economic impact of the proposed project on the state. In
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                                H.F. 363
 measuring economic impact, the authority must place greater
 emphasis on projects that are located in economically
 distressed areas, that will have the capacity to care for
 20 or more children, that are located in areas that have an
 inadequate number of existing child care providers, and that
 will provide child care to the business’s employees at a
 low-cost rate as determined pursuant to rules adopted by the
 authority. The bill defines “economically distressed area” as
 a county that ranks among the bottom 33 of all Iowa counties,
 as measured by either the average monthly unemployment level
 for the most recent 12-month period, or the average annualized
 unemployment level for the most recent five-year period.
    If a business that is approved by the authority to receive
 incentives or assistance for its project either closes or
 reduces the capacity of the child care facility for which the
 incentives or assistance was received, the authority has the
 discretion to reduce or eliminate some or all of the incentives
 or assistance, and the business may be subject to repayment of
 all or a portion of the incentives or assistance that it has
 received.
    A business that is awarded tax incentives for a child care
 facility is entitled to a refund of the sales and use taxes
 paid under Code chapter 423 for gas, electricity, water, or
 sewer utility services, goods, wares, or merchandise, or
 on services rendered, furnished, or performed to or for a
 contractor or subcontractor and used in the fulfillment of a
 written contract relating to the construction or equipping
 of a child care facility that is part of the project of the
 eligible business. Taxes attributable to intangible property,
 furniture, and furnishings cannot be refunded. The process
 by which a business may receive a refund of the sales and use
 taxes paid is outlined in the bill. A business that is awarded
 tax incentives for a child care facility may also be eligible
 for a value-added property tax exemption pursuant to Code
 section 15.332.
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    A contractor or subcontractor who willfully makes a false
 report of sales and use taxes paid under the provisions of the
 bill commits a simple misdemeanor and is liable for the payment
 of the taxes and any applicable penalties and interest. A
 simple misdemeanor is punishable by confinement for no more
 than 30 days or a fine of at least $105 but not more than $855
 or by both.
    The bill directs the authority to adopt rules as necessary
 to administer the provisions of the bill. The bill allows the
 department of revenue to adopt rules as necessary to administer
 the provisions of the bill.
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