HF 606 — A bill for an act permitting the economic development authority to consider whether a proposed project under the high quality jobs program will include a licensed child care center when determining the eligibility of a business to participate in the program. (Formerly HF 363, HF 3.)

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 LSB 1167HZ (2) 89 -3- ko/jh 3/7 H.F.

606 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 after 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 LSB 1167HZ (2) 89 -4- ko/jh 4/7 H.F.

606 (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 LSB 1167HZ (2) 89 -5- ko/jh 5/7 H.F.

606 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.

LSB 1167HZ (2) 89 -6- ko/jh 6/7 H.F.

606 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.

LSB 1167HZ (2) 89 -7- ko/jh 7/7