Bill Text: IA SF373 | 2021-2022 | 89th 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 retroactive applicability provisions.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2021-02-17 - Subcommittee: Dawson, Goodwin, and Jochum. S.J. 390. [SF373 Detail]
Download: Iowa-2021-SF373-Introduced.html
Senate
File
373
-
Introduced
SENATE
FILE
373
BY
LOFGREN
A
BILL
FOR
An
Act
creating
a
homeownership
development
tax
credit
1
available
for
charitable
contributions
to
certain
low-income
2
housing
developers
in
this
state,
and
including
retroactive
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
must
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
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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
must
meet
the
requirements
of
paragraph
“a”
or
“b”
:
31
a.
The
organization
meets
the
requirements
of
subsection
32
2,
paragraph
“a
”,
and
for
the
three
years
preceding
the
33
application,
the
organization
has
conducted
at
least
fifty-one
34
percent
of
its
housing
development
activities
in
Iowa
counties
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with
a
population
of
fewer
than
fifty
thousand
as
determined
by
1
the
most
recent
federal
decennial
census.
2
b.
(1)
The
organization
is
organized
under
chapter
504
and
3
qualifying
under
section
501(c)(3)
of
the
Internal
Revenue
Code
4
as
an
organization
exempt
from
federal
income
tax
under
section
5
501(a)
of
the
Internal
Revenue
Code.
6
(2)
A
purpose
of
the
organization
is
to
serve
or
support
an
7
organization
certified
as
an
eligible
rural
housing
developer
8
pursuant
to
paragraph
“a”
of
this
subsection.
9
(3)
The
organization
accepts
contributions
on
behalf
of
an
10
organization
certified
as
an
eligible
rural
housing
developer
11
pursuant
to
paragraph
“a”
of
this
subsection,
and
redistributes
12
any
and
all
such
contributions
to
that
organization.
13
(4)
The
organization
agrees
to
provide
to
the
authority
14
information
reasonably
required
by
the
authority
in
order
to
15
verify
the
receipt,
donor
identity,
value,
and
eligibility
for
16
the
tax
credit
of
contributions
received
by
the
organization.
17
4.
Length
of
certification
and
recertification.
Unless
18
certification
is
revoked
pursuant
to
subsection
5,
a
19
certification
received
pursuant
to
this
section
shall
be
valid
20
for
a
period
of
three
years,
at
which
time
the
organization
21
may
apply
to
the
authority
in
the
manner
prescribed
by
the
22
authority
to
become
recertified
as
an
eligible
housing
23
developer
or
eligible
rural
housing
developer
pursuant
to
this
24
section.
25
5.
Revocation
of
certification.
An
organization
shall
26
notify
the
authority
in
a
timely
manner
of
any
changes
that
27
affect
the
organization’s
ability
to
qualify
as
an
eligible
28
housing
developer
or
eligible
rural
housing
developer.
The
29
authority
shall
revoke
the
certification
of
an
organization
30
certified
as
an
eligible
housing
developer
or
eligible
rural
31
housing
developer
if
that
organization
subsequently
fails
to
32
meet
the
requirements
of
subsection
2
or
3,
as
applicable.
33
The
revocation
of
a
certification
under
this
subsection
shall
34
not
prohibit
an
organization
from
subsequently
applying
to
be
35
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certified
as
an
eligible
housing
developer
or
eligible
rural
1
housing
developer
under
this
section.
2
Sec.
5.
NEW
SECTION
.
15E.156
Tax
credit
application
——
3
maximum
tax
credits.
4
1.
Application.
5
a.
To
receive
a
tax
credit
under
section
15E.157,
a
taxpayer
6
must
submit
an
application
in
the
manner
and
form
prescribed
7
by
the
authority
on
or
after
the
date
of
the
charitable
8
contribution
to
the
eligible
housing
developer
or
eligible
9
rural
housing
developer
for
which
a
tax
credit
is
sought.
The
10
eligible
housing
developer
or
eligible
rural
housing
developer
11
shall
forward
the
application
to
the
authority.
12
b.
The
authority
shall
issue
tax
credits
and
related
tax
13
credit
certificates
on
a
first-come,
first-served
basis
in
14
the
order
applications
are
received
from
eligible
housing
15
developers
and
eligible
rural
housing
developers
until
the
16
maximum
amount
of
tax
credits
authorized
pursuant
to
subsection
17
2
is
reached.
If
for
a
calendar
year
the
maximum
amount
18
of
tax
credits
applied
for
exceeds
the
amount
specified
in
19
subsection
2,
the
authority
shall
establish
a
wait
list
for
20
tax
credits.
Valid
applications
received
but
not
approved
21
by
the
authority
shall
be
placed
on
a
wait
list
in
the
order
22
the
applications
were
received
by
the
authority
and
those
23
applicants
shall
be
given
priority
for
receiving
tax
credits
in
24
succeeding
calendar
years.
Placement
on
a
wait
list
pursuant
25
to
this
paragraph
shall
not
constitute
a
promise
binding
the
26
state.
The
availability
of
a
tax
credit
and
approval
of
a
tax
27
credit
application
pursuant
to
this
section
in
a
future
year
28
is
contingent
upon
the
availability
of
tax
credits
in
that
29
particular
year.
30
2.
Maximum
tax
credit
amounts.
31
a.
The
aggregate
amount
of
tax
credits
issued
pursuant
to
32
this
section
shall
not
exceed
a
total
of
seven
million
dollars
33
per
calendar
year.
34
b.
Twenty
percent
of
the
aggregate
amount
of
tax
credits
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issued
in
a
calendar
year
shall
be
reserved
for
charitable
1
contributions
to
an
eligible
rural
housing
developer.
2
c.
(1)
Except
as
provided
in
subparagraph
(2),
the
maximum
3
amount
of
tax
credits
issued
to
any
one
taxpayer
for
charitable
4
contributions
in
a
tax
year
shall
not
exceed
two
hundred
fifty
5
thousand
dollars.
6
(2)
The
maximum
amount
of
tax
credits
issued
to
any
one
7
taxpayer
for
charitable
contributions
in
a
tax
year
shall
8
not
exceed
three
hundred
thousand
dollars
if
at
least
twenty
9
percent
of
the
taxpayer’s
total
charitable
contributions
made
10
during
the
tax
year
that
are
eligible
for
the
tax
credit
in
11
section
15E.157
are
to
one
or
more
eligible
rural
housing
12
developers.
13
Sec.
6.
NEW
SECTION
.
15E.157
Homeownership
development
tax
14
credit.
15
1.
a.
A
tax
credit
shall
be
allowed
against
the
taxes
16
imposed
in
chapter
422,
subchapters
II,
III,
and
V,
and
in
17
chapter
432,
and
against
the
moneys
and
credits
tax
imposed
in
18
section
533.329,
equal
to
fifty
percent
of
the
amount
of
the
19
voluntary
cash
or
noncash
charitable
contributions
made
by
a
20
taxpayer
during
the
tax
year
to
an
eligible
housing
developer
21
or
eligible
rural
housing
developer.
22
b.
The
charitable
contribution
must
equal
or
exceed
five
23
hundred
dollars
in
order
to
qualify
for
the
tax
credit.
24
However,
an
eligible
housing
developer
or
eligible
rural
25
housing
developer
may
set
a
higher
minimum
qualifying
amount
26
pursuant
to
rules
prescribed
by
the
authority.
27
2.
The
tax
credit
shall
be
claimed
for
the
tax
year
during
28
which
the
taxpayer
was
issued
the
tax
credit.
29
3.
An
individual
may
claim
a
tax
credit
under
this
section
30
of
a
partnership,
limited
liability
company,
S
corporation,
31
estate,
or
trust
electing
to
have
income
taxed
directly
to
32
the
individual.
The
amount
claimed
by
the
individual
shall
33
be
based
upon
the
pro
rata
share
of
the
individual’s
earnings
34
from
the
partnership,
limited
liability
company,
S
corporation,
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estate,
or
trust.
1
4.
Any
tax
credit
in
excess
of
the
taxpayer’s
tax
liability
2
for
the
tax
year
may
be
credited
to
the
tax
liability
for
the
3
following
five
years
or
until
depleted,
whichever
occurs
first.
4
A
tax
credit
shall
not
be
carried
back
to
a
tax
year
prior
to
5
the
tax
year
in
which
the
taxpayer
claims
the
tax
credit.
6
5.
a.
To
claim
a
tax
credit
under
this
section,
a
taxpayer
7
shall
include
one
or
more
tax
credit
certificates
with
the
8
taxpayer’s
tax
return.
9
b.
The
tax
credit
certificate
shall
contain
the
taxpayer’s
10
name,
address,
tax
identification
number,
the
amount
of
the
11
credit,
and
any
other
information
required
by
the
department.
12
c.
The
tax
credit
certificate,
unless
rescinded
by
the
13
authority,
shall
be
accepted
by
the
department
as
payment
for
14
taxes
imposed
pursuant
to
chapter
422,
subchapters
II,
III,
15
and
V,
and
in
chapter
432,
and
against
the
moneys
and
credits
16
tax
imposed
in
section
533.329,
subject
to
any
conditions
or
17
restrictions
placed
by
the
authority
upon
the
face
of
the
tax
18
credit
certificate
and
subject
to
the
limitations
of
this
19
subchapter.
20
d.
Tax
credit
certificates
issued
pursuant
to
this
21
subchapter
shall
not
be
transferred
to
any
other
person.
22
6.
The
amount
of
the
charitable
contribution
for
which
the
23
tax
credit
is
claimed
shall
not
be
deductible
in
determining
24
taxable
income
for
state
income
tax
purposes.
25
Sec.
7.
NEW
SECTION
.
15E.158
Reports
to
general
assembly.
26
The
authority
shall
publish
an
annual
report
of
the
27
activities
conducted
pursuant
to
this
subchapter
and
shall
28
submit
the
report
to
the
governor
and
the
general
assembly.
29
The
report
shall
include
a
listing
of
certified
eligible
30
housing
developers
and
certified
eligible
rural
housing
31
developers,
the
number
of
tax
credit
certificates
and
the
32
amount
of
tax
credits
issued
by
the
authority,
and
the
number
33
of
taxpayers
and
the
amount
of
tax
applications
on
the
tax
34
credit
wait
list,
if
any.
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Sec.
8.
NEW
SECTION
.
15E.159
Rules.
1
The
authority
and
the
department
shall
each
adopt
rules
2
pursuant
to
chapter
17A
as
necessary
for
the
implementation
of
3
this
subchapter.
4
Sec.
9.
NEW
SECTION
.
422.12O
Homeownership
development
tax
5
credit.
6
The
taxes
imposed
under
this
subchapter,
less
the
7
credits
allowed
under
section
422.12,
shall
be
reduced
by
a
8
homeownership
development
tax
credit
allowed
under
section
9
15E.157.
10
Sec.
10.
Section
422.33,
Code
2021,
is
amended
by
adding
the
11
following
new
subsection:
12
NEW
SUBSECTION
.
23.
The
taxes
imposed
under
this
subchapter
13
shall
be
reduced
by
a
homeownership
development
tax
credit
14
allowed
under
section
15E.157.
15
Sec.
11.
Section
422.60,
Code
2021,
is
amended
by
adding
the
16
following
new
subsection:
17
NEW
SUBSECTION
.
14.
The
taxes
imposed
under
this
subchapter
18
shall
be
reduced
by
a
homeownership
development
tax
credit
19
allowed
under
section
15E.157.
20
Sec.
12.
NEW
SECTION
.
432.12O
Homeownership
development
21
tax
credit.
22
The
taxes
imposed
under
this
chapter
shall
be
reduced
by
23
a
homeownership
development
tax
credit
allowed
under
section
24
15E.157.
25
Sec.
13.
Section
533.329,
subsection
2,
Code
2021,
is
26
amended
by
adding
the
following
new
paragraph:
27
NEW
PARAGRAPH
.
l.
The
moneys
and
credits
tax
imposed
under
28
this
section
shall
be
reduced
by
a
homeownership
development
29
tax
credit
allowed
under
section
15E.157.
30
Sec.
14.
RETROACTIVE
APPLICABILITY.
This
Act
applies
to
tax
31
years
beginning
on
or
after
January
1,
2021.
32
Sec.
15.
RETROACTIVE
APPLICABILITY.
This
Act
applies
33
retroactively
to
January
1,
2021,
to
charitable
contributions
34
to
eligible
housing
developers
and
eligible
rural
housing
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developers
made
on
or
after
January
1,
2021.
1
EXPLANATION
2
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
3
the
explanation’s
substance
by
the
members
of
the
general
assembly.
4
This
bill
creates
a
homeownership
development
tax
credit
5
that
will
be
administered
by
the
economic
development
authority
6
(EDA)
and
that
will
provide
tax
credits
to
taxpayers
who
make
7
charitable
contributions
to
eligible
housing
developers
or
8
eligible
rural
housing
developers
in
this
state.
9
An
“eligible
housing
developer”
is
defined
in
the
bill
to
10
include
an
Iowa
nonprofit,
tax-exempt
organization
that
has
11
been
developing
single-family
housing
for
at
least
three
years
12
in
this
state
to
be
sold
to
low-income
households,
as
defined
13
in
the
bill,
that
includes
the
development
of
such
housing
in
14
this
state
for
low-income
households
as
a
purpose
in
its
bylaws
15
or
other
organizational
documents,
and
that
agrees
to
provide
16
EDA
with
certain
information
in
order
to
properly
verify
17
charitable
contributions.
An
“eligible
housing
developer”
18
also
includes
an
Iowa
nonprofit,
tax-exempt
organization
whose
19
purpose
is
to
support
an
organization
described
above
and
who
20
redistributes
any
charitable
contributions
received
on
behalf
21
of
that
eligible
housing
developer
to
the
developer.
22
An
“eligible
rural
housing
developer”
is
defined
in
the
23
bill
to
include
an
Iowa
nonprofit,
tax-exempt
organization
24
that
meets
the
requirements
of
an
eligible
housing
developer
25
described
above
but
that
additionally
has
conducted
for
the
26
last
three
years
at
least
51
percent
of
its
housing
development
27
activities
in
Iowa
counties
with
a
population
of
fewer
than
28
50,000
as
determined
by
the
most
recent
federal
decennial
29
census.
30
An
organization
must
apply
to
EDA
to
be
certified
as
an
31
eligible
housing
developer
or
an
eligible
rural
housing
32
developer.
A
certification
by
EDA
will
last
for
a
period
of
33
three
years,
at
which
time
an
eligible
housing
developer
or
34
eligible
rural
housing
developer
may
apply
to
be
recertified.
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Failure
to
meet
the
requirements
specified
above
may
cause
the
1
organization
to
lose
its
certification
as
an
eligible
housing
2
developer
or
eligible
rural
housing
developer,
but
the
loss
3
of
such
certification
does
not
prohibit
an
organization
from
4
subsequently
reapplying
to
EDA
for
certification.
5
In
order
to
receive
a
tax
credit
for
a
charitable
6
contribution
to
an
eligible
housing
developer
or
eligible
rural
7
housing
developer,
a
taxpayer
is
required
to
apply
to
the
8
developer
in
the
manner
and
form
prescribed
by
EDA
on
or
after
9
the
date
the
charitable
contribution
is
made.
The
developer
is
10
then
required
to
forward
the
application
to
EDA.
11
The
tax
credit
equals
50
percent
of
the
amount
of
the
cash
or
12
noncash
charitable
contribution
made
to
the
eligible
housing
13
developer
or
eligible
rural
housing
developer
during
the
tax
14
year.
The
minimum
amount
of
charitable
contribution
that
may
15
qualify
for
the
tax
credit
is
$500,
but
each
eligible
housing
16
developer
or
eligible
rural
housing
developer
is
allowed
to
17
set
a
higher
minimum
contribution
amount.
The
bill
provides
18
that
EDA
shall
not
issue
more
than
$7
million
in
tax
credits
19
per
calendar
year.
Of
that
$7
million
maximum
aggregate
20
amount,
20
percent
($1.4
million)
of
the
tax
credits
shall
21
be
reserved
for
charitable
contributions
to
eligible
rural
22
housing
developers.
The
maximum
amount
of
tax
credits
that
23
may
be
issued
per
taxpayer
for
charitable
contributions
in
a
24
tax
year
is
$250,000,
or
$300,000
if
at
least
20
percent
of
25
the
taxpayer’s
total
charitable
contributions
to
the
eligible
26
housing
development
organizations
during
the
tax
year
were
to
27
one
or
more
eligible
rural
housing
developers.
28
The
tax
credit
may
be
claimed
against
the
individual
income
29
tax,
the
corporate
income
tax,
the
franchise
tax,
the
insurance
30
companies
tax,
and
the
moneys
and
credits
tax.
To
claim
a
tax
31
credit,
a
taxpayer
must
include
a
tax
credit
certificate
with
32
the
taxpayer’s
tax
return.
The
tax
credit
is
nonrefundable
33
and
nontransferable,
but
any
excess
may
be
carried
forward
for
34
five
tax
years.
The
amount
of
the
charitable
contribution
for
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which
the
tax
credit
is
claimed
shall
not
be
deductible
in
1
determining
taxable
income
for
state
tax
purposes.
2
EDA
is
required
to
issue
tax
credits
on
a
first-come,
3
first-served
basis
until
the
maximum
amount
of
$7
million
4
per
calendar
year
is
reached.
If
the
amount
of
tax
credit
5
applications
exceeds
$7
million
in
a
calendar
year,
EDA
6
is
required
to
establish
a
wait
list
and
give
priority
in
7
subsequent
years
to
applications
on
the
wait
list.
8
The
bill
requires
EDA
and
the
department
of
revenue
to
9
adopt
rules
as
necessary
for
the
implementation
of
the
bill,
10
and
requires
EDA
to
publish
and
submit
annual
reports
to
11
the
governor
and
general
assembly
containing
information
as
12
described
in
the
bill.
13
The
bill
applies
retroactively
to
tax
years
beginning
on
or
14
after
January
1,
2021,
and
applies
retroactively
to
charitable
15
contributions
to
eligible
housing
developers
and
eligible
rural
16
housing
developers
on
or
after
that
date.
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