HF 2317 — A bill for an act relating to state revenue and finance by modifying individual income tax rates, exemptions, and credits, corporate income tax rates and credits, credits against the franchise tax, the insurance premiums tax, and the moneys and credits tax, and the tax expenditure committee, making contingent transfers from the taxpayer relief fund, and including effective date and applicability provisions. (Formerly HSB 626.) Contingent effective date. Contingent applicability date.

(3) “Farming business” means the production, care, growing, harvesting, preservation, handling, or storage of crops or forest or fruit trees;

(4) ^Livestock"“Livestock” means the same as defined in section 717.1.

(5) ^Materially“Materially participated"participated” means the same as ^material“material participation"participation” in section 469(h) of the Internal Revenue Code.

S e c .

5 E F F E C T I V E T h i s d i v i st h i s A c t t a k e s effect January 1 , 2023.

5.

EFFECTIVE DATE.

This division of this Act takes effect January 1, 2023.

Sec.

DDIVISION IIII VRETIRED IFARMER SICAPITAL IGAIN INEXCLUSION R E T I RF A R MC A P I TG A IE X C L U S I O N Sec.

(1) '^'Farming“Farming business"business” means the production, care, growing, harvesting, preservation, handling, or storage of crops or forest or fruit trees;

(2) ^Held"“Held” shall be determined with reference to the holding period provisions of section 1223 of the Internal Revenue Code and the federal regulations pursuant thereto.

(3) ^Livestock"“Livestock” means the same as defined in section 717.1.

(4) ^Materially“Materially participated"participated” means the same as ^material“material participation"participation” in section 469(h) of the Internal Revenue Code.

(5) (a) '^Real“Real property used in a farming business"business” means all tracts of land and the improvements and structures located on such tracts which are in good faith used primarily for a farming business.

Buildings which are primarily used or intended for human habitation aare r e deemed tto o be used in a farming business when the building is located on or adjacent House File 2317r2317, P-p. 6 to the parcel used in the farming business.

6 to the parcel used in the farming business.

Real property used in a farming business shall also include woodland, wasteland, pastureland, aand nidled iland dused lfor ethe dconservation lof unatural sresources e d ft h e c o n s e r v an a t u r a l r e s o u r c e s including soil and water.

(b) Real property classified as agricultural property for Iowa property tax purposes, except real property described in section 441.21, subsection 12, paragraph “a” or “b”, shall be presumed to be real property used in a farming business.

(6) ^Relative"“Relative” i^&aiTismeans a person that satisfies one or more of the following conditions:

(b) The individual is a lineal descendantdescendent of the taxpayer.

For purposes of this subparagraph division, '^lineal“lineal descendant''descendent” means children of the taxpayer, including legally adopted children and biological children, stepchildren, grandchildren, great-grandchildren, and any other lineal descendantdescendent of the taxpayer.

(7) '"Retired“Retired farmer"farmer” means an individual who is disabled or who is fifty-five years of age or older and who no longer materially participates in a farming business when an exclusion and deduction iis s claimed under this subsection.

Subtract the net capital gain from the sale of real property used in a farming business if one of the following House PileFile 2317, p.

7 cconditions oare nsatisfied: d i t i o s a t i s f i e d :

If the taxpayer is a retired farmer, the taxpayer is considered to meet the material participation requirement if the taxpayer materially participated in a farming business for ten years or more in the aggregate, prior to making an election under this ssubsection. u b s e c t i o n .

but only if the taxpayer materially participated in the farming business for five of the eight years preceding the farmer'sfarmer’s retirement or disability and who has sold all or substantially all of the taxpayer'staxpayer’s interest in the farming business by the time the election under this paragraph is made.

but only if the taxpayer materially participated in the farming business for five of the eight years preceding the farmer'sfarmer’s retirement or disability and who has sold all or substantially all of the taxpayer'staxpayer’s interest in the farming business by the time the election under this paragraph is made.

e,e. A taxpayer who is a retired farmer may make, subject to the limitations described in paragraphs and a single, lifetime election to exclude all qualifying capital gains under paragraphs and " V .

f, A taxpayer who is a retired farmer whomay electsmake, subject to excludethe capitallimitations gainsdescribed underin paragraphparagraphs or“f” ^d"^and shall“g”, nota claimsingle, thelifetime beginningelection farmerto taxexclude creditall qualifying capital gains under sectionparagraphs 4“b”, 2“c”, 2and .“d”.

Hf. E or the exclusion for net income received pursuant to a farm tenancy agreement in subsection 21A, in the tax year in which this election is made or in any subsequent year.

HouseA Filetaxpayer 2317rwho p*is 8a g.retired farmer who elects to exclude capital gains under paragraph “b”, “c”, or “d” shall not claim the beginning farmer tax credit under section 422.11E or the exclusion for net income received pursuant to a farm tenancy agreement in subsection 21A, in the tax year in which this election is made or in any subsequent year.

AHouse taxpayerFile who2317, isp. a retired farmer who claims the beginning farmer tax credit under section 422.HE shall notr in the same year, make an election under this subsection.

8 g.

A taxpayer who is a retired farmer who claims the beginning farmer tax credit under section 422.11E shall not, in the same year, make an election under this subsection.

Married individuals who file separate state income tax returns shall allocate their combined annual net capital gain exclusion under paragraphs “b”, “c”, and “d” to each spouse in the proportion that each spouse'sspouse’s respective net capital gain bears to the total net capital gain.

110. 0 .

This division oof f this Act takes effect January 1, 2023.

SSec. e c1 1 .

A11. P P L I C A B I L I T Y .

APPLICABILITY.

DDIVISION IIV VINDIVIDUAL IINCOME SITAX VORATES N—— ITAX NYEARS D2023-2025 I V I I N C OT A R A T E—S T A Y E A 2 0 2 3 - 2 0 2 5 Sec.

Section 422.5, subsection 3, paragraph b.b, Code 2022, is amended to read as follows:

Codeb. 2022, is amended to read as follows:

b, (1) In lieu of the computation in subsection 1 or 2, or in paragraph “a” of this subsection, if the married persons',persons’, filing jointly or filing separately on a combined return,return , head of household's,household’s, or surviving spouse'sspouse’s net income exceeds thirteen thousand five hundred dollars, the regular House File 2317r2317, p*p. 9 tax imposed under this subchapter shall be the lesser of the maximum alternate state individual income tax rate specified in subparagraph (2) times the portion of the net income in excess of thirteen thousand five hundred dollars or the regular tax liability computed without regard to this sentence.

9 tax imposed under this subchapter shall be the lesser of the maximum alternate state individual income tax rate specified in subparagraph (2) times the portion of the net income in excess of thirteen thousand five hundred dollars or the regular tax liability computed without regard to this sentence.

The alternate tax described in this paragraph does not apply if one spouse elects to carry back or carry forward the loss as provided in section 422.9, subsection .3.

(2) (a) (i) (A) For the tax year beginning on or after January 1, 2023, but before January 11, , 2024, the alternate tax rate is 6.00 percent.

(B) For the tax year beginning on or after January 1, 2024, but before January 11, , 2025, the alternate tax rate is 5.70 percent.

(C) For the tax year beginning on or after January 1, 2025, but before January 11, , 2026, the alternate tax rate is 5.20 percent.

(ii) This subparagraph division (a) is repealed January 1, 02026. 2 6 .

Section 422.5, subsection 3B, paragraph b.b, Code 2022, is amended to read as follows:

Codeb. 2022, is amended to read as follows:

b, (1) In lieu of the computation in subsection 1, 2, or 3, if the married persons',persons’, filing jointly or filing separately on a combined return,return , head of household's,household’s, or surviving spouse'sspouse’s net income exceeds thirty-two thousand dollars, the regular tax imposed under this subchapter shall be the lesser of the maximum alternate state individual income tax rate specified in subparagraph (2) times the portion of the net income in excess of thirty-two thousand dollars or the regular tax liability computed without regard to this sentence.

The alternate tax described in this paragraph does not apply if one spouse elects to carry back or carry House PileFile 2317, p.

(C) For the tax year beginning on or after January 1, 2025, but before January 11, , 2026, the alternate tax rate is 5.20 percent.

(ii) This subparagraph division (a) is repealed January 1, 02026. 2 6 .

Section 422.5, subsection 6, Code 2022, is amended tto orread eas aafollows: s f o l l o w s :

a.

2422.5A 2Tax .rates.

T a r a t e s .

(a) On taxable income from 0 through $6,000, the rate of House PileFile 2311,2317, p.

117. 7 .

EFFECTIVE DDATE. A T ET h i s division o f this A c t takes effect January 1 , 2023.

This division of this Act takes effect January 1, 2023.

DDIVISION I V IINDIVIDUAL SINCOME VTAX O—— NFLAT IRATE N D I V II N C O T A — F L AR A T E Sec.

(3) In the case of all other entities, including corporations described in section 422.36, subsection 5, and all other entities required to file an information return under section 422.15, subsection 2, the entity'sentity’s Iowa net income after the application of the Iowa business activity ratio, if applicable, multiplied by the top income tax rate imposed under section 422.5A 422.5 for the tax year, less any Iowa tax credits available to the entity.

Section 422.5, subsection 1, paragraph a.a, Code 2022, is amended to read as follows:

Codea. 2022, is amended to read as follows:

a, A tax is imposed upon every resident and nonresident of the state which tax shall be levied, collected, and paid annually upon and with respect to the entire taxable income as defined in this subchapter at rates as provided in section 422.5A a rate of three and nine-tenths percent.

Section 422.16B, subsection 2, paragraph a.a, Code 2022, is amended to read as follows:

Codea. 2022, is amended to read as follows:

a, (1) A pass-through entity shall file a composite return on behalf of all nonresident members and shall report and pay the income or franchise tax imposed under this chapter at the maximum state income or franchise tax rate applicable to the member under section 422.5A 422.5, 422.33, or 422.63 on the nonresident members'members’ distributive shares of the income from the pass-through entity.

13 shall be the maximum state income tax rate under section 422.5A 2422.5. 2 .

5 .

Section 422.25A, subsection 5, paragraph c, subparagraphs (3), (4), and (5), Code 2022, are amended to read aas sffollows: o l l o w s :

(a) Determine the amount of such adjustments which are of a type that would be subject to sourcing to Iowa under section 422.8, subsection 2, paragraph “a”, as a nonresident, and then determine the portion of this amount that would be sourced to Iowa under those provisions as if the tiered partner were a nnonresident. o n r e s i d e n t .

(b) Determine the amount of such adjustments which are of a type that would not be subject to sourcing to Iowa under section 422.8, subsection 2, paragraph “a”, as a nonresident.

((5) 5For )For the total distributive share of all final federal partnership adjustments and positive reallocation adjustments as modified by this title that are reported to resident House File 2211,2317, p.

S e c .

2 3E F F E C T I V ET h i s d i v i s t h i s A c t t a k e s effect January 1, 2026.

23.

EFFECTIVE DATE.

This division of this Act takes effect January 1, 2026.

Sec.

DDIVISION IVI VRETIREMENT IINCOME SV IO N R E T I R EI N C O M E Sec.

Section 422.5, subsection 3, paragraph a.a, Code 2022, is amended to read as follows:

Code 2022, is amended to read as follows:

The tax shall not be imposed on a resident or nonresident whose net income, as defined in section 422.7, is thirteen thousand ffive i v e hundred dollars or lless e s s in the case oof f married persons filing jointly or filing separately on a combined return, heads of household, and surviving spouses or nine thousand dollars or less in the case of all other persons;

but in the event that the payment of tax under this subchapter would reduce the net income tto oless l e s s than thirteen thousand ffive i v e hundred dollars or nine thousand dollars as applicable, then tthe h e tax sshall hbe a l reduced tto othat tamount hwhich a t a m o u n would irresult e s u l t in allowing the taxpayer to retain a net income of thirteen thousand ffive i v e hundred dollars ornineor nine thousand dollars aas s applicable.

For purposes of this auboGGtionysubsection, notnet income includogincludes all amounts of pensions or other rotiromontretirement income^income, except for military retirement pay excluded under section 422^7,422.7, oubsectionsubsection 31A, paragraph “a”, or section 422.7>422.7, subsection 31B|31B , paragraph “a”, received from any source which is not taxable under this subchapter as a result of the government pension exclusions in section 422.7;422.7, or any other state law.

orIf anythe ocombined tnet hincome sof t a tlhusband aand w I ft h c o m b i n e i n c oo fa h u s b aa n d wife exceeds thirteen thousand five hundred dollars, neither of them shall receive the benefit of this subsection, and it is immaterial whether they file a joint return or separate returns.

However, if a husband and wife file separate returns and have a combined net income oof f thirteen thousand ffive i v e House File 2317, p.

A person who is claimed as a dependent by another person as defined in section 2422.12 2shall .not receive the benefit of this subsection if the person claiming the dependent has net income exceeding thirteen thousand five hundred dollars or nine thousand dollars as applicable or the person claiming the dependent and the person’s spouse have combined net income exceeding thirteen thousand five hundred dollars or nine thousand dollars as applicable.

1 2 s h a r e c e t h eb e n e f i t o f t h i s s i f s e c t i o n the person claiming the dependent has net income exceeding thirteen thousand f i v e hundred dollars ornine thousand dollars as applicable or the person claiming the dependent and the person's spouse have combined net income exceeding thirteen thousand f i v e hundred dollars ornine thousand dollars a s applicable.

Section 422.5, subsection 3B, paragraph a.a, Code 2022, is amended to read as follows:

Code 2022, is amended to read as follows:

but in the event that the payment of tax under this subchapter would reduce the net income to less than thirty-two thousand dollars or twenty-four thousand dollars as applicable, tthen hthe e n t h e tax sshall beareducedbe treduced oto tthat hamount awhich twould aresult m o u n w o u r e s u l t in allowing the taxpayer to retain a net income of thirty-two thousand dollars or twenty-four thousand dollars as applicable.

For purposes of this subsection#subsection, notnet income includoaincludes all amounts of pensions or other retirement income/income, except for military retirement pay excluded under section 422.7/422.7, oubsoctionsubsection 31A|31A , paragraph “a”, or section 422.7/422.7, subsection 31B/31B , paragraph “a”, received from any source which is not taxable under this subchapter as a result of the government pension exclusions in section 422.7/422.7, or any other state law.

If the combined net income oof f a husband and wife exceeds thirty-two thousand dollars, neither of them shall receive the House File 2317r2317, p*p. 16 benefit of this subsection, and it is immaterial whether they file a joint return or separate returns.

16 benefit of this subsection, and it is immaterial whether they file a joint return or separate returns.

A person who is claimed as a dependent by another person as defined in section 4422.12 2shall 2not .receive the benefit of this subsection if the person claiming the dependent has net income exceeding thirty-two thousand dollars or twenty-four thousand dollars as applicable or the person claiming the dependent and the person’s spouse have combined net income exceeding thirty-two thousand dollars or twenty-four thousand dollars as applicable.

1 2 s h a l l not receive the benefit o f this subsection if the person claiming the dependent has net income exceeding thirty-two thousand dollars or twenty-four thousand dollars as applicable or the person claiming the dependent and the person's spouse have combined net income exceeding thirty-two thousand dollars or twenty-four thousand dollars as applicable.

Section 422.7, subsection 31, Code 2022, is amended tto orread eas aafollows: sf o l l o w s :

Fora. a person who is disabled# or is fifty-five years of ago or older# or is the surviving spouse of an individual or a survivor having an insurablo interest in an individual who would have qualified for the exemption under this aubsoction for the tax ycari oubtract Subtract, to the extent included, the total amount e # received from a governmental or other pension or retirement pay plan, including# but not limited defined benefit or defined contribution plans, annuities, individual retirement accounts, plans maintained or contributed to by an employer, or maintained or contributed to by a self-employed person as an employer, and deferred compensation plans or any earnings attributable to the deferred compensation plans# up to a maximum of six thousand dollars for a person# other than a husband or wife# who files a separate state income tax return and up to a maximum of twelve thousand dollars for a husband and wife who file a joint state income tax return.—However# a surviving opouse who is not disabled or fifty-five years of age or older can only exclude the amount of pension or retirement pay received as a result of the death of the other spouse.—A husband and wife filing separate state income tax rcturno or oeparately on a combined state return a r e a l l o wc o m b im a x i m u m e x cunderst h i s Q u b s o c t i o n of up to twelve thousand dollars.—The twelve thousand dollar House File 2317, p.

17For Gxcluaiona sperson hwho ais ldisabled, lor beis allocatedfifty-five tyears oof age or older, or is the husbandsurviving owifespouse of an individual or a survivor having an insurable interest in thean proportionindividual thatwho eachwould spouse*shave respectivequalified pensionfor andthe retirementexemption payunder receivedthis bearssubsection for the tax year, subtract Subtract, to the extent included, the total combinedamount of received from a governmental or other pension andor retirement pay receivedplan, receivedincluding, bybut anot personlimited whoto, isdefined disabled,benefit or isdefined fifty-fivecontribution yearsplans, ofannuities, ageindividual retirement accounts, plans maintained or older,contributed to by an employer, or ismaintained theor survivingcontributed spouseto ofby a self-employed person as an individualemployer, and deferred compensation plans or isany earnings attributable to the deferred compensation plans, up to a survivormaximum havingof ansix insurablethousand interestdollars infor ana individualperson, other than a husband or wife, who wouldfiles havea qualifiedseparate forstate theincome exemptiontax underreturn thisand subsectionup to a maximum of twelve thousand dollars for thea husband and wife who file a joint state income tax year.return.

However, a surviving spouse who is not disabled or fifty-five years of age or older can only exclude the amount of pension or retirement pay received as a result of the death of the other spouse.

A husband and wife filing separate state income tax returns or separately on a combined state return are allowed a combined maximum exclusion under this subsection of up to twelve thousand dollars.

The twelve thousand dollar House File 2317, p.

17 exclusion shall be allocated to the husband or wife in the proportion that each spouse’s respective pension and retirement pay received bears to total combined pension and retirement pay received received by a person who is disabled, or is fifty-five years of age or older, or is the surviving spouse of an individual or is a survivor having an insurable interest in an individual who would have qualified for the exemption under this subsection for the tax year.

Married taxpayers who file separate state income tax returns sshall h a l l allocate their combined aannual n n u a l exclusion amount to each spouse in the proportion that each spouse^sspouse’s respective income received from a pension or retirement plan bears to the total combined pension or retirement pay received.

A taxpayer who is not disabled or fifty-five years of age or older and who receives pension or retirement pay as a surviving spouse or as a survivor with an insurable interest in an individual who would have qualified for the exemption for the tax year may only exclude the amount received from a pension or retirement plan in the tax year as a result of the ddeath eof athe odecedent. f t h d e c e d e n t .

S e c .

2 8EFFECTIVE D A T ET h i s division o f this A c t takes effect January 1, 2023.

28.

EFFECTIVE DATE.

This division of this Act takes effect January 1, 2023.

Sec.

DDIVISION IVII VRESEARCH IACTIVITIES STAX VCREDIT I I R E S E AA C T I V I T A C R E D I T Sec.

Section 15.335, subsection 4, paragraph a.a, Code 2022, is amended to read as follows:

Code 2022, is amended to read as follows:

In lieu of the credit amount computed in subsection 2, an eligible business may shall elect to compute the credit amount for qualified research expenses incurred in this state in a manner consistent with the alternative simplified credit described in section 41(c)(4) of the Internal Revenue Code if the taxpayer elected or was required to use the alternative simplified credit method for federal income tax purposes for the same taxable year.year .

The taxpayer may make this election regardless of the method uoedused for the taxpayer*otaxpayer’s federal income tax.—Thetax. election made under this paragraph is for the tax year and the taxpayer may use another or the oame method for House Pile 2317r p.

The election made under this paragraph is for the tax year and the taxpayer may use another or the same method for House File 2317, p.

Section 15.335, subsection 5, Code 2022, is amended tto orread eas afollows: a sf o l l o w s :

T h e credit allowed in this section i s in addition t o the credit authorized in section 422.10 and section 422.33, subsection 5.

HowovoryThe ifcredit theallowed altornativoin creditthis computationsection method is used in ooctionaddition 422.10to or ooction 422.33y—subsection the credit allowedauthorized in this section shall422.10 alsoand besection computed422.33, usingsubsection that5. method.

TheHowever, regularif orthe alternative credit allowedcomputation inmethod thisis sectionused shall be computed according to the same claim, calculation, and refund limitations in section 422.10 andor section 422.33, subsection 5, asthe applicable,credit includingallowed those described in sectionthis 422.10, subsection 1, paragraph and section 422.10,shall subsectionalso 1,be paragraphcomputed subparagraphusing (3),that andmethod. section 422.10, subsection 4, and those described in section 422.33, subsection 5, paragraph subparagraph (2), and section 422.33, subsection 5, paragraphs ^ and Sec.

The regular or alternative credit allowed in this section shall be computed according to the same claim, calculation, and refund limitations in section 422.10 and section 422.33, subsection 5, as applicable, including those described in section 422.10, subsection 1, paragraph “a”, and section 422.10, subsection 1, paragraph “b”, subparagraph (3), and section 422.10, subsection 4, and those described in section 422.33, subsection 5, paragraph “b”, subparagraph (2), and section 422.33, subsection 5, paragraphs “e” and “g”.

Sec.

Section 15.335, subsection 8, Code 2022, is amended tto orread eas aafollows: s f o l l o w s :

Anya. The following percentage of any credit in excess of the tax liability for the taxable year shall be refunded with interest in accordance with section 421.60, subsection 2, paragraph (1) For the tax year beginning on or after January 1, 2023, but before January 1, 2024, ninety-five percent.

Any The following percentage of any credit in excess of the tax liability for the taxable year shall be refunded with interest in accordance with section 421.60, subsection 2, paragraph “e”:

(1) For the tax year beginning on or after January 1, 2023, but before January 1, 2024, ninety-five percent .

(5) For tax years beginning on or after January 11, , 2027, seventy-five percent.

Section 422.10, subsection 1, paragraph a.a, Code 2022, is amended by adding the following new subparagraph:

CodeHouse 2022,File is2317, amendedp. by adding the following new subparagraph:

House File 2317r p* 19 NEW SUBPARAGRAPH.SUBPARAGRAPH .

If timely claimed, the business sshall h a l l not increase the credit claim on an amended return or otherwise unless either of the following apply:

Section 422.10, subsection 1, paragraph b.b, Code 2022, is amended by adding the following new subparagraph:

CodeNEW 2022,SUBPARAGRAPH is. amended by adding the following new subparagraph:

NEW(3) SUBPARAGRAPH.For the purpose of calculating the state’s apportioned share of the qualifying expenditures for increasing research activities in subparagraph (2), the following criteria shall apply only to the determination of qualified research expenditures in this state:

(3) For the purpose of calculating the state's apportioned share of the qualifying expenditures for increasing research activities in subparagraph (2), the following criteria shall apply only to the determination of qualified research expenditures in this state:

(ii) For the performance of qualified research services by a third party, during the period of the business'sbusiness’s tax year that the third party is performing research services for the business, a majority of the total services performed by the person for the third party are directly related to those research projects of the business.

(i) For the tax year beginning on or after January 1, 2023, but before January 1, 2024, eighty percent of the amounts paid for supplies directly related to research performed in this sstate. t a t e .

(ii) For the tax year beginning on or after January 1, 2024, but before January 1, 2025, sixty percent of the amounts paid for supplies directly related to research performed in this sstate. t a t e .

(iii) For the tax year beginning on or after January 1, 2025, but before January 1, 2026, forty percent of the amounts paid for supplies directly related to research performed in tthis hstate. i s s t a t e .

(iv) For the tax year beginning on or after January 1, 2026, but before January 1, 2027, twenty percent of the amounts paid for supplies directly related to research performed in this sstate. t a t e .

Section 422.10, subsection 1, paragraphs c and d.d, Code 2022, are amended to read as follows:

Code 2022, are amended to read as follows:

In lieu of the credit amount computed in paragraph ^b'',“b”, subparagraph (1), subparagraph division (a), a taxpayer may shall elect to compute the credit amount for qualified research expenses incurred in this state in a manner consistent with the alternative simplified credit described in section 41(c)(4) of the Internal Revenue Code if the taxpayer elected or was required to use the alternative simplified credit method for federal income tax purposes for the same taxable year.year .

The taxpayer may make this oloctionelection rogardlcasregardless of the method used for the taxpayer*ataxpayer’s federal income tax.—Thetax. election made under thio paragraph io for the tax year and the taxpayer may use House File 2211, p.

21The anotherelection ormade theunder samethis methodparagraph is for anythe aubocquonttax year.year and the taxpayer may use House File 2317, p.

21 another or the same method for any subsequent year.

For purposes of the alternate credit computation method in paragraph “c”, the following criteria shall apply;apply:

A taxpayer'staxpayer’s qualified research expenses in this state and average prior year qualified research expenses in this sstate tshall abe tdetermined ein saccordance hwith athe lcriteria l b e d ein a c c o r d withct h e c r i t e r i a in subsection 1, paragraph “b”, subparagraph (3).

Section 422.10, subsection 3, paragraph b.b, Code 2022, is amended to read as follows:

Code 2022, is amended to read as follows:

For purposes of this section, ^baaic“basic research payment^payment” and '^qualified“qualified research expense"expense” mean the same as defined for the federal credit for increasing research activities under section 41 of the Internal Revenue Code, except that for the altornativGalternative simplified credit such amounts are for rooGarchresearch conduGtcdconducted within this atatostate aas s otherwise described in subsection 1, paragraph ^b",“b”, subparagraph (3), and subsection 1, paragraph "^d",“d”, subparagraph (2).

Section 422.10, subsection 4, Code 2022, is amended tto orread eas aafollows: s f o l l o w s :

a,a. (1) Any The following percentage of any credit in excess of the tax liability imposed by section 422.5 less the amounts of nonrefundable credits allowed under this subchapter for the taxable year shall be refunded with interest in accordance with section 421.60, subsection 2, paragraph ^e"\ but before January 1 , 2024, ninety percent.

((1) bAny )ForThe following percentage of any credit in excess of the tax yearliability beginningimposed onby orsection after422.5 Jless athe namounts uof anonrefundable rcredits y2allowed 0under 2this 4subchapter ,for butthe beforetaxable Januaryyear 1shall ,be 2025,refunded eightywith percent.interest in accordance with section 421.60, subsection 2, paragraph “e”:

((a) cFor )For the tax year beginning on or after January 11, ,2023, 2025, but before January 1, 2026,2024, seventyninety percent.

(d)(b) For the tax year beginning on or after January 11, ,2024, 2026,but bbefore uJanuary t1, House2025, Fileeighty 2317,percent. p.

22(c) (2)For In lieu of claiming a refund pursuant to this paragraph, a taxpayer may elect to have the overpaymenttax otherwiseyear eligiblebeginning for a refund shown on theor taxpayer'safter final,January completed1, return2025, creditedbut tobefore theJanuary tax1, liability2026, forseventy thepercent. following taxable year.

(d) For the tax year beginning on or after January 1, 2026, but before January 1, 2027, sixty percent.

House File 2317, p.

22 (2) In lieu of claiming a refund pursuant to this paragraph, a taxpayer may elect to have the overpayment otherwise eligible for a refund shown on the taxpayer’s final, completed return credited to the tax liability for the following taxable year.

Commencing with tax years beginning on or after January 1, 2027, fifty percent of any credit in excess of the tax liability imposed by section 422.5 less the amounts of nonrefundable credits allowed under this subchapter for the taxable year shall be refunded with interest in accordance with section 421.60, subsection 2, paragraph In“e”. lieu of claiming a refund, a taxpayer may elect to have the overpayment otherwise eligible for a refund shown on the taxpayer's final, completed return credited to the tax liability for the following taxable year.

In lieu of claiming a refund, a taxpayer may elect to have the overpayment otherwise eligible for a refund shown on the taxpayer’s final, completed return credited to the tax liability for the following taxable year.

Section 422.33, subsection 5, paragraph b.b, Code 2022, is amended to read as follows:

Code 2022, is amended to read as follows:

(1) The state'sstate’s apportioned share of the qualifying expenditures for increasing research activities is a percent equal to the ratio of qualified research expenditures in this state to the total qualified research expenditures.

(2) For the purpose of calculating the state'sstate’s apportioned share of the qualifying expenditures for increasing research activities in subparagraph (1), the following criteria shall apply only to the determination of qualified research expenditures in this state:

(i) For qualified services performed by employees, during the period of the tax year that the business is engaging in one or more research projects, a majority of the total services House File 2317r2317, P-p. 23 performed by the employee for the business are directly related to those research projects.

(ii)23 For the performance of qualified research services by a third party^ during the period of the businesses tax year that the third party is performing research services for the business, a majority of the total services performed by the personemployee for the thirdbusiness party are directly related to those research projectsprojects. of the business.

(ii) For the performance of qualified research services by a third party, during the period of the business’s tax year that the third party is performing research services for the business, a majority of the total services performed by the person for the third party are directly related to those research projects of the business.

(d) For tax years beginning on or after January 11, , 2023, but before January 11, ,2027, 2027» amounts paid for supplies as defined in section 41(b)(2)(C) of the Internal Revenue Code shall only constitute qualified research expenses in this state if the supplies directly relate to research performed in this state and shall be limited to the following allowable percentages;percentages:

(i) For the tax year beginning on or after January 1, 2023r2023, but before January 1, 2024, eighty percent of the amounts paid for supplies directly related to research performed in this sstate. t a t e .

(ii) For the tax year beginning on or after January 1, 2024, but before January 1, 2025, sixty percent of the amounts paid for supplies directly related to research performed in this sstate. t a t e .

(iii) For the tax year beginning on or after January 1, 2025, but before January 11, , 2026, forty percent of the amounts paid for supplies directly related to research performed in tthis hstate. i s s t a t e .

(iv) For the tax year beginning on or after January 1, 2026, but before January 11, , 2027, twenty percent of the amounts paid for supplies directly related to research performed in this sstate. t a t e .

((e) eFor )For tax years beginning on or after January 11, , 2027, amounts paid for supplies as defined in section 41(b)(2)(C) of the Internal Revenue Code shall not be qualified research House File 2317r2317, p.

Section 422.33, subsection 5, paragraphs c and d.d, Code 2022, are amended to read as follows:

Code 2022, are amended to read as follows:

In lieu of the credit amount computed in paragraph “a”, subparagraph (1), a corporation may shall elect to compute the credit amount for qualified research expenses incurred in this state in a manner consistent with the alternative simplified credit described in section 41(c)(4) of the Internal Revenue Code if the taxpayer elected or was required to use the alternative simplified credit method for federal income tax purposes for the same taxable year.year .

The taxpayer may make this oloctionelection regardless of the method used for the taxpayer'staxpayer’s federal income tax.—Thetax. election made under this paragraph is for the tax year and the taxpayer may use another or the same method for any subsequent year.

The election made under this paragraph is for the tax year and the taxpayer may use another or the same method for any subsequent year.

For purposes of the alternate credit computation method in paragraph ,“c”, the following criteria shall apply:

A taxpayer'staxpayer’s qualified research expenses in this state and average prior year qualified research expenses in this state sshall h a l l be determined in accordance with the rules in paragraph ,“b”, subparagraph (2).

Section 422.33, subsection 5, paragraph e.e, Code 2022, is amended by adding the following new subparagraph:

CodeNEW 2022,SUBPARAGRAPH is. amended by adding the following new subparagraph:

NEW SUBPARAGRAPH.

(b) The increase results from an audit or examination by the House PileFile 2317r2317, p.

(2) For purposes of this subsection, "^basic“basic research payment''andpayment” '^'qualifiedand “qualified research expense"expense” mean the same as defined for the federal credit for increasing research activities under section 41 of the Internal Revenue Code, except that for the altornativoalternative aimplifiodsimplified credit ouchsuch amounts aare rfor cresearch forroaoarGhconducted conductod within this state aas s otherwise described in paragraph ^b",“b”, subparagraph (2), and paragraph ""d",“d”, subparagraph (2).(2) .

Section 422.33, subsection 5, paragraph g.g, Code 2022, is amended to read as follows:

Codeg. 2022, is amended to read as follows:

g, (1) (a) Any The following percentage of the credit in excess of the tax liability for the taxable year shall be refunded with interest in accordance with section 421.60, subsection 2, paragraph (1)“e”: For the tax year beginning on or after January 1, 2023, but before January 1, 2024, ninety percent.

(i) For the tax year beginning on or after January 1, 2023, but before January 1, 2024, ninety percent .

(b) In lieu of claiming a refund pursuant to this subparagraph, a taxpayer may elect to have the overpayment otherwise eligible for a refund shown on its final, completed return credited to the tax liability for the following taxable yyear. e a r .

(2) Commencing with tax years beginning on or after January ,1, 2027, fifty percent of any credit in excess of the tax liability for the taxable year shall be refunded with interest in accordance with section 421.60, subsection 2, paragraph ^“e”. In lieu of claiming a refund, a taxpayer may elect to have the overpayment otherwise eligible for a refund shown on its final, completed return credited to the tax liability for the following taxable year.

In lieu of claiming a refund, a taxpayer may elect to have the overpayment otherwise eligible for a refund shown on its final, completed return credited to the tax liability for the following taxable year.

S e c .

4 3EFFECTIVE D A T ET h i s division o f this A c t takes effect January 1, 2023.

43.

EFFECTIVE DATE.

This division of this Act takes effect January 1, 2023.

Sec.

DDIVISION IVIII VOTHER ITAX SVCREDITS I I I O T H T A C R E D I T S Sec.

Section 15.119, subsection 2, paragraph a.a, Code 2022, is amended by adding the following new subparagraph:

CodeNEW 2022,SUBPARAGRAPH is. amended by adding the following new subparagraph:

NEW(3) SUBPARAGRAPH.In allocating tax credits pursuant to this subsection, the authority shall prioritize issuing additional research activities tax credits pursuant to section 15.335.

(3) In allocating tax credits pursuant to this subsection, the authority shall prioritize issuing additional research activities tax credits pursuant to section 5 .

3 3 5 .

(2) (a) A tax credit in excess of the taxpayer'staxpayer’s liability for the tax year is refundable if all of the following cconditions oare nmet: d i t i o m e t :

e(a) (i) The taxpayer is an investor making application for tax credits provided in this section and is an entity organized under chapter 504 and qualifying under section 501(c)(3) of the Internal Revenue Code as an organization exempt from federal income tax under section 501(a) of the Internal Revenue Code.

(b) (ii) The taxpayer establishes during the application process described in section 15.293B that the requirement in subparagraph division (a) is satisfied.

(b) For a tax credit deemed refundable pursuant to subparagraph division (a), the following percentage of the tax credit in excess of the taxpayer'staxpayer’s liability for the tax year iis srrefundable: e f u n d a b l e :

(i) For the tax year beginning on or after January 1, 2023, but before January 11, , 2024, ninety-five percent.

Section 15.293A, subsection 2, paragraph d.d, Code 2022, is amended to read as follows:

Code 2022, is amended to read as follows:

Tax credit certificates issued under this section may be transferred to any person or entity, except a tax credit certificate that is refundable under subsection 1, paragraph “c”, subparagraph (2), shall not be transferable.

Within ninety days of transfer, the transferee shall submit the transferred tax credit certificate to the department of revenue along with a statement containing the transferee'stransferee’s name, tax identification number, and address, the denomination that each replacement tax credit certificate is to carry, and any other information required by the department of revenue.

Section 15E.305, subsection 2, paragraph a.a, Code 2022, is amended to read as follows:

Code 2022, is amended to read as follows:

The maximum amount of tax credits granted to a taxpayer shall not exceed five pGrcontpercent one hundred thousand dollars of the aggregate amount of tax credits authorized.

Section 15.331C, subsection 11, , Code 2022, is aamended mto eread nas dtfollows: or e aa sf o l l o w s :

Ana. eligible business may claim a tax credit in an amount equal to the sales and use taxes paid by a third-party developer 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 c o n t r a o rs u b c o n t a n du s ei nt h e f u l f i lo fa e n t written contract relating to the construction or equipping of a facility of the eligible business.

An eligible business may claim a tax credit in an amount equal to the sales and use taxes paid by a third-party developer 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 facility of the eligible business.

Any credit in gxcgssexcess of the tax liability for the tax year may bobe crcditGdcredited to the tax liability House PileFile 2317, p.

28 for the following seven years or until dcplGtod#depleted, whichevorwhichever OGGuraoccurs carlior.earlier.

An eligible business may eleGtelect to reoeivereceive a refund as a refund the following percentage of all or a portion of an unused any tax credit in excess of the tax liability as ffollows: o l l o w s ;

(1) For the tax year beginning on or after January 1, 2023, but before January 1, 2024, ninety-five percent.percent .

In lieu of claiming a refund, a taxpayer may elect to have the overpayment otherwise eligible for a refund shown on the taxpayer'staxpayer’s final, completed return credited to the tax liability for the following seven years or until depleted, wwhichever hoccurs iearlier. c h eo c c ue a r l i e r .

Section 404A.2, subsection 44, , Code 2022, is amended tto orread eas aafollows: sf o l l o w s :

Fora. a tax credit claimed by an eligible taxpayer or a transferee for qualified rehabilitation projects with agreements entered into on or after July 1, 2014, the following percentage of any credit in excess of the taxpayer's tax liability for the tax year may be refunded or# at the taxpayer's election, credited to the taxpayer's tax liability for the following five years or until depleted# whichever is earlierj^ (1) For the tax year beginning on or after January 1, 2023, but before January 1 , 2024, ninety-five percent.

(2) For thea tax yearcredit beginningclaimed by an eligible taxpayer or a transferee for qualified rehabilitation projects with agreements entered into on or after JanuaryJuly 11, ,2014, 2024,the butfollowing beforepercentage Januaryof 1any ,credit 2025,in ninetyexcess percent.of the taxpayer’s tax liability for the tax year may be refunded or, at the taxpayer’s election, credited to the taxpayer’s tax liability for the following five years or until depleted, whichever is earlier:

((1) 3For )For the tax year beginning on or after January 11, ,2023, 2025, but before January 11, ,2024, 2026,ninety-five eighty-fivepercent percent..

(4)(2) For the tax year beginning on or after January 1, 2026,2024, but before January 11, ,2025, 2027,ninety eighty percent.

(5)(3) For the tax yearsyear beginning on or after January 11, ,2025, 2027,but Housebefore FileJanuary 2211,1, p.2026, eighty-five percent.

(4) For the tax year beginning on or after January 1, 2026, but before January 1, 2027, eighty percent.

(5) For tax years beginning on or after January 1, 2027, House File 2317, p.

In lieu of claiming a refund, a taxpayer may elect to have the overpayment otherwise eligible for a refund shown on the taxpayer'staxpayer’s final, completed return credited to the tax liability for the following five tax years or until depleted, whichever iis s earlier.

As used in this subsection, ^taxpayer^“taxpayer” includes an eligible taxpayer or a person transferred a tax credit certificate pursuant to subsection 3.

NEW SUBSECTION.SUBSECTION .

This section does not apply to a geothermal heat pump installation occurring after December 31, 02023. 2 3 .

NEW SUBSECTION.SUBSECTION .

This section is repealed January 1, 02034. 3 4 .

Section 422.33, subsection 9, paragraph a.a, Code 2022, is amended to read as follows:

Code 2022, is amended to read as follows:

AftyAny The following percentage of any credit in excess of the tax liability shall be refunded with interest in accordance with section 421.60, subsection 2, paragraph “e”, as follows:

((a) aFor )For the tax year beginning on or after January 11, , 2023, but before January 11, , 2024, ninety-five percent.

(c) For the tax year beginning on or after January 11, , 2025, but before January 1, 2026, eighty-five percent.

House File 2317r2317, p*p. 30 (d) For the tax year beginning on or after January 1, 2026, but before January 1, 2027, eighty percent.

(e)30 (d) For the tax yearsyear beginning on or after January 1, 2027f2026, seventy-fivebut before January 1, 2027, eighty percent.

(2)(e) InFor lieutax ofyears claimingbeginning a refund, a taxpayer may elect to have the overpayment otherwise eligible for a refund shown on theor taxpayer'safter final,January completed1, return2027, creditedseventy-five topercent. the tax liability for the following tax year.

(2) In lieu of claiming a refund, a taxpayer may elect to have the overpayment otherwise eligible for a refund shown on the taxpayer’s final, completed return credited to the tax liability for the following tax year.

S e c .

5 3P R E S E R VO FE X I S T R I G H TT h id i v i s i o n of this Act is not intended to and shall not limit, modify, or otherwise adversely affect any amount of tax credit issued, awarded, or allowed prior to January 1, 2023, nor shall it limit, modify, or otherwise adversely affect a taxpayer's right to claim or redeem a tax credit issued, awarded, or allowed prior to January 1, 2023, including but not limited to any tax credit carryforward amount.

553. 4 .

EFFECTIVEPRESERVATION DOF AEXISTING TRIGHTS. ET h i s division o f this A c t takes effect January 1, 2023.

This division of this Act is not intended to and shall not limit, modify, or otherwise adversely affect any amount of tax credit issued, awarded, or allowed prior to January 1, 2023, nor shall it limit, modify, or otherwise adversely affect a taxpayer’s right to claim or redeem a tax credit issued, awarded, or allowed prior to January 1, 2023, including but not limited to any tax credit carryforward amount.

54.

EFFECTIVE DATE.

This division of this Act takes effect January 1, 2023.

Sec.

DDIVISION IIX VCORPORATE IINCOME SITAX XORATES N—— CADJUSTMENTS O R P O RI N C OT A R A T — S A D J U S T M E N T S Sec.

Section 422.33, subsection 11, , Code 2022, is amended tto orread eas aafollows: s f o l l o w s :

^a. A tax is imposed annually upon each corporation doing business in this state, or deriving income from sources within this state, in an amount computed by applying the following rates of taxation to the net income received by the corporation during the income year:

a-rA (1)tax Onis theimposed firstannually twenty-fiveupon thousandeach dollarscorporation ofdoing taxablebusiness income,in orthis anystate, partor thereof,deriving theincome ratefrom ofsources sixwithin percentthis forstate, taxin yearsan beginningamount priorcomputed toby Januaryapplying 1, 2021, and the ratefollowing rates of fivetaxation andto one-halfthe percentnet forincome taxreceived yearsby beginningthe oncorporation orduring afterthe Januaryincome 1year: , 2021.

a.

(1) On the first twenty-five thousand dollars of taxable income, or any part thereof, the rate of six percent for tax years beginning prior to January 1, 2021, and the rate of five and one-half percent for tax years beginning on or after January 1, 2021.

b.

&T-c. ( 3 )On taxable income between one hundred thousand dollars and two hundred fifty thousand dollars or any part thereof, the rate of ten percent for tax years beginning prior to January 1, 2021, and the rate of nine percent for tax years beginning on or after January 1, 2021.

A-(3) (4) On taxable income ofbetween one hundred thousand dollars and two hundred fifty thousand dollars or more,any part thereof, the rate of twelveten percent for tax years beginning prior to January 1, 2021, and the rate of nine and eight-tenths percent for tax years beginning on or after January 11, , 2021.

b,d. (1) (a) Notwithstanding paragraph the department of management and the department of revenue shall determine corporate income tax rates as provided in this paragraph.

A(4) taxOn taxable income of two hundred fifty thousand dollars or more, the rate inof thistwelve subsectionpercent sfor htax ayears lbeginning lprior remainto inJanuary effect1, until2021, and the rate of nine and eight-tenths percent for tax rateyears isbeginning adjustedon pursuantor toafter thisJanuary paragraph.1, 2021.

b.

(1) (a) Notwithstanding paragraph “a”, the department of management and the department of revenue shall determine corporate income tax rates as provided in this paragraph.

A tax rate in this subsection shall remain in effect until the tax rate is adjusted pursuant to this paragraph.

((2) 2(a) )( a ) If a determination has been made that net corporate income tax receipts for the preceding fiscal year exceeded seven hundred million dollars, the department of revenue shall adjust the tax rates specified in paragraph “a”, subparagraphs (3) and (4), and apply the adjusted rates for tax years beginning on or after the next January 1 following the ddetermination edate. t e r m i nd a t e .n ( b )(i) The tax rates subject to adjustment shall be adjusted in such a way that when combined with all the other rates specified in paragraph the tax rates would have generated net corporate income tax receipts that equal seven hundred million dollars in the preceding fiscal year.

(b) (i) The tax rates subject to adjustment shall be adjusted in such a way that when combined with all the other rates specified in paragraph “a”, the tax rates would have generated net corporate income tax receipts that equal seven hundred million dollars in the preceding fiscal year.

32 adjusted as follows;follows:

(A) The tax rate in effect that corresponds with the specified tax rate in paragraph “a”, subparagraph (4), shall first be adjusted but not below the tax rate in effect that corresponds with the specified rate in paragraph “a”, subparagraph (3).

(B) If after the adjustment in subparagraph part (A) is made, and an additional adjustment is necessary, the tax rates that correspond with the rates specified in paragraph “a”, subparagraphs (3) and (4), shall be adjusted on an equal basis.

(3) If a tax rate is adjusted pursuant to this paragraph, the director of revenue shall cause an advisory notice containing the new corporate tax rates to be published in the IIowa oadministrative wbulletin aand aon dthe minternet isite nof ithe s t r a t i v eo nt h e i n t e r n e t t h e e o f department of revenue.

The calculation and publication of the adjusted tax rate by the director of revenue is exempt from chapter 17A, and shall be submitted for publication by the first December 31 following the determination date to adjust tthe htax trates. a xr a t e s .

DDIVISION I V I S X OCORPORATE NINCOME CTAX O—— RFLAT PRATE O RI N C OT A — F L AR A T E Sec.

Section 422.33, subsection 11, , Code 2022, is amended by striking the subsection and inserting in lieu thereof the following;following:

S e c .

5 8C O N T I NE F F E C T I V E T h id i v i s o f n this Act takes effect on the first January 1 after each rate of taxation on the net income received by a corporation is equalized to equal five and one-half percent pursuant to section 422.33, subsection 1, paragraph "^b", as amended by this Act.

The director of revenue shall inform the Code editor upon House File 2317r P* 33 the occurrence of this contingency.

58.

CONTINGENT EFFECTIVE DATE.

This division of this Act takes effect on the first January 1 after each rate of taxation on the net income received by a corporation is equalized to equal five and one-half percent pursuant to section 422.33, subsection 1, paragraph “b”, as amended by this Act.

The director of revenue shall inform the Code editor upon House File 2317, p.

33 the occurrence of this contingency.

Sec.

This division of this Act applies to tax years beginning on or after the effective date of this division oof f this AAct. c t .

DDIVISION IXI VTAX IEXPENDITURE SXCOMMITTEE IO N T A E X P E N D C O M M I T T E E Sec.

As used in this section, ^tax“tax expenditure"expenditure” means an exclusion from the operation or collection of a tax imposed in this state.

b,b. (1) The department shall file a report detailing the review with the general assembly no later than December 15 of the year the credit is scheduled to be reviewed in subsection .

(1) The department shall file a report detailing the review with the general assembly no later than December 15 of the year the credit is scheduled to be reviewed in subsection 3.

Section 2.48, subsection 3, unnumbered paragraph ,1, Code 2022, is amended to read as follows:

Section 2.48, subsection 4, Code 2022, is amended tto orread eas afollows: a sf o l l o w s :

Subsequent additional rcvicf/,review. A tax expenditure or incentive reviewed pursuant to subsection 3 shall be reviewed again not more than five years after the tax expenditure or incentive was most recently reviewed.

DA Itax Vexpenditure Ior SXincentive Ireviewed INpursuant Tto Asubsection X3 Pshall Abe Rreviewed Eagain Lnot IFmore Uthan Nfive Cyears Oafter Nthe Ttax Iexpenditure NTor Rincentive Awas Nmost Srecently Freviewed. E R S Sec.

DIVISION XII TAXPAYER RELIEF FUND CONTINGENT TRANSFERS Sec.

Section 8.54, subsection 55, , Code 2022, is amended tto orread eas afollows: a sf o l l o w s :

^a. For fiscal years in which it is anticipated that the distribution of moneys from the Iowa economic emergency fund in accordance with section 8.55, subsection 2 , will result in moneys being transferred to the general fund of the state, the original state general fund expenditure limitation amount provided for in subsection 3 shall be readjusted to include the amount of moneys anticipated to be so transferred.

For fiscal years in which it is anticipated that the distribution of moneys from the Iowa economic emergency fund in accordance with section 8.55, subsection 2, will result in moneys being transferred to the general fund of the state , the original state general fund expenditure limitation amount provided for in subsection 3 shall be readjusted to include the amount of moneys anticipated to be so transferred.

For fiscal years in which it is anticipated that moneys will be transferred from the taxpayer relief fund to the general fund of the state in accordance with section 8.57E, subsection 2, paragraph "^b^,“b”, the original state general fund expenditure limitation amount provided for in subsection 3 shall be readjusted to include the amount of moneys anticipated to be so transferred.

This paragraph is repealed on the date that section 8.57E, subsection 2, paragraph '^b'^,“b”, is repealed.

Section 8.57E, subsection 22, , Code 2022, is amended tto orread eas afollows: a sf o l l o w s :

^a. Moneys Except as otherwise provided in this section, moneys in the taxpayer relief fund shall only be used pursuant to appropriations or transfers made by the general assembly for tax reliefT—including but not limited to incroaaoa in the general retirement income exclusion under section 422.7# subsection 31y or reductions in income tax rates.

b,Moneys (Except 1as )otherwise Forprovided thein fiscalthis yearsection, beginningmoneys Julyin 1the ,taxpayer 2023,relief andfund forshall eachonly fiscalbe yearused thereafter,pursuant ifto theappropriations actualor nettransfers revenuemade forby the general fundassembly of the state for thetax fiscalrelief, yearincluding plusbut thenot amountlimited transferred to increases in the general fundretirement ofincome theexclusion state under section 8.55,422.7, subsection 2,31, paragraphor '^b^,reductions forin theincome fiscaltax year,rates. if any, is less than one hundred three and one-half percent of House File 2317r p.

35b. the actual net revenue for the general fund of the state for the prior fiscal year, there is transferred from the taxpayer relief fund to the general fund of the state an amount equal to the difference or the remaining balance of the taxpayer relief fund, whichever is lower, subject to subparagraph (2), (2) The transfer made under subparagraph (1) shall not exceed an amount necessary to increase the ending balance of the general fund of the state for the fiscal year to one percent of the adjusted revenue estimate, as defined in section 8.54, for the fiscal year.

(3)(1) ThisFor paragraphthe isfiscal repealedyear onbeginning theJuly date1, the2023, remainingand balancefor ofeach thefiscal taxpayeryear reliefthereafter, fundif isthe transferredactual tonet revenue for the general fund of the state underfor subparagraphthe (1).,fiscal PATyear GRASSLE^plus ^AtECthe HAPamount MANtransferred Speakerto of the Housegeneral X"Presidentfund of the Senatestate Iunder herebysection certify8.55, thatsubsection this2, billparagraph originated“b”, infor the Housefiscal andyear, if any, is knownless asthan one hundred three and one-half percent of House File 2317, Eighty-ninthp. General Assembly.

A35 Nthe Nactual Enet Lrevenue Sfor Othe Ngeneral fieffund Clerkof othe fthestate Hfor othe uprior sfiscal eyear, Approvedthere ,is 2022transferred Kfrom Ithe Rtaxpayer Erelief Yfund Nto Othe Lgeneral Dfund Snof cthe jstate ian Gamount oequal vto ethe rdifference nor othe rremaining balance of the taxpayer relief fund, whichever is lower, subject to subparagraph (2).

(2) The transfer made under subparagraph (1) shall not exceed an amount necessary to increase the ending balance of the general fund of the state for the fiscal year to one percent of the adjusted revenue estimate, as defined in section 8.54, for the fiscal year.

(3) This paragraph is repealed on the date the remaining balance of the taxpayer relief fund is transferred to the general fund of the state under subparagraph (1).

______________________________ ______________________________ PAT GRASSLEY JAKE CHAPMAN Speaker of the House President of the Senate I hereby certify that this bill originated in the House and is known as House File 2317, Eighty-ninth General Assembly.

______________________________ MEGHAN NELSON Chief Clerk of the House Approved _______________, 2022 ______________________________ KIM REYNOLDS Governor