15E.66 - CERTIFICATES AND TAX CREDITS.
15E.66 CERTIFICATES AND TAX CREDITS.
1. The board may issue certificates and related tax credits to
designated investors which, if redeemed for the maximum possible
amount, shall not exceed a total aggregate of one hundred million
dollars of tax credits. The certificates shall be issued
contemporaneously with a commitment to invest in the Iowa fund of
funds by a designated investor. A certificate issued by the board
shall have a specific maturity date or dates designated by the board
and shall be redeemable only in accordance with the contingencies
reflected on the certificate or incorporated therein by reference. A
certificate and the related tax credit shall be transferable by the
designated investor. A tax credit shall not be claimed or redeemed
except by a designated investor or transferee in accordance with the
terms of a certificate from the board. A tax credit shall not be
claimed for a tax year that begins earlier than the maturity date or
dates stated on the certificate. An individual may claim the credit
of a partnership, limited liability company, S corporation, estate,
or trust electing to have the income taxed directly to the
individual. The amount claimed by the individual shall be based upon
the pro rata share of the individual's earnings from the partnership,
limited liability company, S corporation, estate, or trust. Any tax
credit in excess of the taxpayer's tax liability for the tax year may
be credited to the tax liability for the following seven years, or
until depleted, whichever is earlier.
2. The board shall certify the maximum amount of a tax credit
which could be issued to a designated investor and identify the
specific earliest date or dates the certificate may be redeemed
pursuant to this division. The amount of the tax credit shall be
limited to an amount equivalent to any difference between the
scheduled aggregate return to the designated investor at rates of
return authorized by the board and aggregate actual return received
by the designated investor and any predecessor in interest of capital
and interest on the capital. The rates, whether fixed rates or
variable rates, shall be determined pursuant to a formula stipulated
in the certificate or incorporated therein by reference. The board
shall clearly indicate on the certificate, or incorporate therein by
reference, the schedule, the amount of equity investment, the
calculation formula for determining the scheduled aggregate return on
invested capital, and the calculation formula for determining the
amount of the tax credit that may be claimed. Once issued to a
designated investor, a certificate shall be binding on the board and
the department of revenue and shall not be modified, terminated, or
rescinded.
3. If a designated investor or transferee elects to redeem a
certificate, the certificate shall not be redeemed prior to the
maturity date or dates stated on the certificate. At the time of
redemption, the board shall determine the amount of the tax credit
that may be claimed by the designated investor based upon the returns
received by the designated investor and its predecessors in interest
and the provisions of the certificate. The board shall issue a
verification to the department of revenue setting forth the maximum
tax credit which can be claimed by the designated investor with
respect to the redemption of the certificate.
4. The board shall, in conjunction with the department of
revenue, develop a system for registration of any certificate and
related tax credit issued or transferred pursuant to this section and
a system that permits verification that any tax credit claimed upon a
tax return is valid and that any transfers of the certificate and
related tax credit are made in accordance with the requirements of
this division.
5. The board shall issue the tax credits in such a manner that
not more than twenty million dollars of tax credits may be initially
redeemable in any fiscal year. The board shall indicate on the tax
certificate the principal amount of the tax credit and the maturity
date or dates on which the credit may be first claimed.
6. A certificate or tax credit issued or transferred pursuant to
this division shall not be considered a security pursuant to chapter
502.
7. In determining the one hundred million dollar maximum limit in
subsection 1 and the twenty million dollar limitation in subsection
5, the board shall use the cumulative amount of scheduled aggregate
returns on certificates issued by the board to designated investors.
However, certificates and related tax credits which have expired
shall not be included and certificates and related tax credits which
have been redeemed shall be included only to the extent of tax
credits actually allowed. Section History: Recent Form
2002 Acts, ch 1005, §6; 2002 Acts, ch 1006, §13, 14; 2003 Acts, ch
145, §286; 2005 Acts, ch 7, §3, 4
Referred to in § 15E.62, 15E.63, 422.11Q, 422.33, 422.60, 432.12I,
533.329