Bill Summary – FastDemocracy

Senate Study Bill 1197 - Introduced
                                  SENATE FILE _____
                                  BY (PROPOSED COMMITTEE ON
                                      WAYS AND MEANS BILL BY
                                      CHAIRPERSON DAWSON)
                            A BILL FOR
An Act relating to matters under the purview of the
  economic development authority, including tax credit
  programs, incentives for manufacturers to invest in
  smart technologies, an energy infrastructure revolving
  loan program, and making appropriations, and including
  applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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                            DIVISION I
              HIGH QUALITY JOBS AND OTHER TAX CREDITS
    Section 1. Section 15.119, subsection 2, paragraph a,
 subparagraph (3), subparagraph division (a), Code 2021, is
 amended to read as follows:
    (a) In allocating tax credits pursuant to this subsection
 for the fiscal year beginning July 1, 2021, and ending June 30,
 2022, the authority shall not allocate more than one hundred
 five eighty million dollars for purposes of this paragraph
 if the aggregate amount of renewable chemical production tax
 credits under section 15.319 that were awarded on or after
 July 1, 2018, but before July 1, 2021, equals or exceeds
 twenty-seven million dollars.
    Sec. 2. Section 15.119, subsection 2, paragraph h, Code
 2021, is amended to read as follows:
    h. The renewable chemical production tax credit program
 administered pursuant to sections 15.315 through 15.322. In
 allocating tax credits pursuant to this subsection for the
 fiscal year beginning July 1, 2021, and for each fiscal year
 thereafter, the authority shall not allocate more than ten five
 million dollars for purposes of this paragraph. This paragraph
 is repealed July 1, 2030.
    Sec. 3. Section 15.333, subsection 2, Code 2021, is amended
 to read as follows:
    2. An eligible business may claim a tax credit equal to
 a percentage of the new investment directly related to new
 jobs created or retained by the project. The tax credit
 shall be amortized equally over five calendar years. The tax
 credit shall be allowed against taxes imposed under chapter
 422, subchapter II, III, or V, and against the moneys and
 credits tax imposed in section 533.329. If the business is
 a partnership, S corporation, limited liability company,
 cooperative organized under chapter 501 and filing as a
 partnership for federal tax purposes, or estate or trust
 electing to have the income taxed directly to the individual,
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 an individual may claim the tax credit allowed. The amount
 claimed by the individual shall be based upon the pro rata
 share of the individual’s earnings of the partnership, S
 corporation, limited liability company, cooperative organized
 under chapter 501 and filing as a partnership for federal
 tax purposes, or estate or trust. The percentage shall be
 determined as provided in section 15.335A. Any tax credit in
 excess of the tax liability for the tax year may be credited
 to the tax liability for the following seven years or until
 depleted, whichever occurs first. Any tax credit in excess
 of the tax liability is refundable. In lieu of claiming a
 refund, the taxpayer may elect to have the overpayment shown
 on the taxpayer’s final, completed return credited to the tax
 liability for the following tax year.
    Sec. 4. Section 15.333A, subsection 2, Code 2021, is amended
 to read as follows:
    2. An eligible business may claim an insurance premium tax
 credit equal to a percentage of the new investment directly
 related to new jobs created by the project. The tax credit
 shall be amortized equally over a five-year period. The tax
 credit shall be allowed against taxes imposed in chapter
 432. A tax credit in excess of the tax liability for the tax
 year may be credited to the tax liability for the following
 seven years or until depleted, whichever occurs first. The
 percentage shall be determined as provided in section 15.335A.
 Any tax credit in excess of the tax liability is refundable.
 In lieu of claiming a refund, the taxpayer may elect to have
 the overpayment shown on the taxpayer’s final, completed return
 credited to the tax liability for the following tax year.
    Sec. 5. APPLICABILITY. The following apply to tax credits
 awarded on or after July 1, 2021:
    1. The section of this division of this Act amending section
 15.333, subsection 2.
    2. The section of this division of this Act amending section
 15.333A, subsection 2.
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                            DIVISION II
                         MANUFACTURING 4.0
    Sec. 6. NEW SECTION. 15.371 Manufacturing 4.0 technology
 investment program.
    1. This section shall be known as and may be cited as the
 “Manufacturing 4.0 Technology Investment Program.”
    2. For purposes of this section unless the context otherwise
 requires:
    a. “Financial assistance” means the same as defined in
 section 15.102.
    b. “Manufacturing 4.0 technology investments” means projects
 that are intended to lead to the adoption of, and integration
 of, smart technologies into existing manufacturing operations
 located in the state by mitigating the risk to the manufacturer
 of significant technology investments.
    3. a. A manufacturing 4.0 technology investment fund
 is created within the state treasury under the control of
 the authority for the purpose of financing manufacturing 4.0
 technology investments as described in this section.
    b. The fund may be administered as a revolving fund and
 may consist of any moneys appropriated by the general assembly
 for purposes of this section and any other moneys that are
 lawfully available to the authority. Any moneys appropriated
 to the fund shall be used for purposes of the manufacturing
 4.0 technology investment program. The authority may use all
 other moneys in the fund, including interest, earnings, and
 recaptures, for purposes of this section.
    c. Notwithstanding section 8.33, moneys appropriated in this
 section that remain unencumbered or unobligated at the close of
 the fiscal year shall not revert but shall remain available for
 expenditure for the purposes designated until the close of the
 succeeding fiscal year.
    d. Notwithstanding any law to the contrary, the authority
 may transfer any unobligated and unencumbered moneys in the
 fund, except for moneys appropriated for purposes of this
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 section, to any fund created pursuant to section 15.106A,
 subsection 1, paragraph “o”.
    4. The authority shall establish and administer a
 manufacturing 4.0 technology investment program and shall use
 moneys in the fund to award financial assistance to eligible
 manufacturers for manufacturing 4.0 technology investments.
    5. The authority shall establish by rule a manufacturing
 4.0 review committee that shall review each application
 received by the authority for the program, and that shall make
 recommendations to the board regarding all of the following:
    a. The completeness of the application.
    b. Whether the board should approve or deny an application.
    c. If an application is approved, the type and amount of
 financial assistance to be awarded to the applicant.
    6. The authority shall adopt rules pursuant to chapter 17A
 necessary to implement and administer this section.
    Sec. 7. NEW SECTION. 15.372 Additional first-year
 depreciation.
    1. Overview. The authority may approve a manufacturing
 business located in this state to claim additional first-year
 depreciation for certain investments made by the business to
 transition to a smart manufacturing environment that leverages
 joint capabilities of hardware, software, and workers in an
 integrated way.
    2. Eligibility. To claim additional first-year
 depreciation, a business must make an eligible investment.
 For purposes of this section, “eligible investment” means
 an investment in smart manufacturing equipment that is
 digitized and interconnected, and that modernizes a business’s
 operations by supporting interconnectivity, decision support,
 customization, and flexibility of production runs, or that
 decentralizes low-level decision making.
    3. Application and agreement.
    a. A business seeking approval to claim additional
 first-year depreciation for an eligible investment shall make
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 application to the authority in the manner prescribed by the
 authority by rule. The application must include all of the
 following:
    (1) A description of the investment the business proposes
 to make and a statement describing how the investment will
 transition the business to a smart manufacturing environment.
    (2) The projected amount of the eligible investment.
    (3) The projected date that the eligible investment will be
 placed-in-service.
    b. Completed applications shall be reviewed pursuant to
 rules adopted by the authority. Upon review of an application,
 the board shall determine if the proposed investment is an
 eligible investment and shall determine the maximum amount of
 the eligible investment the business is eligible to claim for
 additional first-year depreciation.
    c. If an application is approved the authority shall notify
 the business. The notification shall include the maximum
 amount of the eligible investment the business is eligible to
 claim for additional first-year depreciation after all terms
 and conditions imposed by the agreement entered into pursuant
 to paragraph “d” have been satisfied.
    d. After receipt of the notification under paragraph “c”,
 the business shall enter into an agreement with the authority
 that specifies the terms and conditions that must be satisfied
 for the business to claim additional first-year depreciation
 on its eligible investment. The agreement must include all of
 the following:
    (1) A description of the business’s eligible investment.
    (2) The maximum amount of the eligible investment the
 business is allowed to claim for additional first-year
 depreciation.
    (3) The projected placed-in-service date for the business’s
 eligible investment.
    (4) The date by which the business must file a written
 report with the authority that provides all of the following:
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    (a) The actual date of completion of the business’s eligible
 investment.
    (b) The actual dollar amount of the business’s eligible
 investment.
    (c) The actual placed-in-service date for the business’s
 eligible investment.
    e. Upon review of the report submitted under paragraph “d”,
 subparagraph (4), and verification by the authority of the
 actual dollar amount of the business’s eligible investment, the
 authority shall notify the business of the amount of eligible
 investment the business may claim as additional first-year
 depreciation. The authority shall notify the department of
 revenue of the amount of eligible investment the business may
 claim as additional first-year depreciation and shall submit a
 list to the department of the assets deemed to be part of the
 business’s eligible investment.
    4. Benefit. Notwithstanding section 422.7, subsection
 39 or 39A, or section 422.35, subsection 19 or 19A, for a
 business that is approved by the authority for an eligible
 investment, section 168(k) of the Internal Revenue Code applies
 for the computing of net income of the business for state tax
 purposes up to the amount of eligible investment approved by
 the authority.
    5. Compliance. If a business fails to complete the
 installation of its eligible investment or fails to comply with
 terms and conditions of the agreement entered under subsection
 3, paragraph “d”, the authority shall revoke, reduce,
 terminate, or rescind the additional first-year depreciation
 the business may claim. If a business has already filed a
 tax return in which the business computed its net income by
 applying section 168(k) of the Internal Revenue Code, the
 business shall file an amended return with the department of
 revenue without applying section 168(k).
    6. Rules. The authority and the department of revenue
 shall adopt rules as necessary for the implementation and
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 administration of this section.
                           DIVISION III
           ENERGY INFRASTRUCTURE REVOLVING LOAN PROGRAM
    Sec. 8. Section 476.10A, subsection 2, Code 2021, is amended
 to read as follows:
    2. Notwithstanding section 8.33, any unexpended moneys
 remitted to the treasurer of state under this section shall be
 retained for the purposes designated. Notwithstanding section
 12C.7, subsection 2, interest or earnings on investments or
 time deposits of the moneys remitted under this section shall
 be retained and used for the purposes designated, pursuant to
 section 476.46.
    Sec. 9. Section 476.46, subsection 2, paragraph e,
 subparagraph (3), Code 2021, is amended to read as follows:
    (3) Interest on the fund shall be deposited in the fund.
 A portion of the interest on the fund, not to exceed fifty
 percent of the total interest accrued, shall be used for
 promotion and administration of the fund.
    Sec. 10. Section 476.46, Code 2021, is amended by adding the
 following new subsections:
    NEW SUBSECTION. 3. The Iowa energy center shall not
 initiate any new loans under this section after June 30, 2021.
    NEW SUBSECTION. 4. Loan payments received under this
 section on or after July 1, 2021, and any other moneys in the
 fund on or after July 1, 2021, shall be deposited in the energy
 infrastructure revolving loan fund created in section 476.46A.
    Sec. 11. NEW SECTION. 476.46A Energy infrastructure
 revolving loan program.
    1. a. An energy infrastructure revolving loan fund is
 created in the office of the treasurer of state and shall be
 administered by the Iowa energy center established in section
 15.120.
    b. The fund may be administered as a revolving fund and may
 consist of any moneys appropriated by the general assembly for
 purposes of this section and any other moneys that are lawfully
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 directed to the fund.
    c. Moneys in the fund shall be used to provide financial
 assistance for the development and construction of energy
 infrastructure, including projects that support electric or gas
 generation transmission, storage, or distribution; electric
 grid modernization; energy-sector workforce development;
 emergency preparedness for rural and underserved areas; the
 expansion of biomass, biogas, and renewable natural gas;
 innovative technologies; and the development of infrastructure
 for alternative fuel vehicles.
    d. Notwithstanding section 8.33, moneys appropriated in this
 section that remain unencumbered or unobligated at the close of
 the fiscal year shall not revert but shall remain available for
 expenditure for the purposes designated until the close of the
 succeeding fiscal year.
    e. Notwithstanding section 12C.7, subsection 2, interest
 or earnings on moneys in the fund shall be credited to the
 fund. A percentage of the total interest credited to the fund,
 not to exceed fifty percent, shall be used for promotion of
 the energy infrastructure revolving loan program and for the
 administration of the fund.
    2. a. The Iowa energy center shall establish and administer
 an energy infrastructure revolving loan program to encourage
 the development of energy infrastructure within the state.
    b. An individual, business, rural electric cooperative, or
 municipal utility located and operating in this state shall be
 eligible for financial assistance under the program