The Iowa Senate shares the governor’s housing invoice information

DES MOINES – Senate Republicans are making a third attempt to accelerate state income tax cuts passed in 2018, subject to certain revenue triggers.

Along with this priority of Senate GOP tax policy, Senate Studies Act 1269, which the Senate Ways and Means Committee unanimously approved Wednesday, includes portions of Governor Kim Reynolds’ housing proposal.

It also protects futile federal PPP loans to Iowa companies from state taxes, benefits small manufacturers, and combines elements of other bills as lawmakers try to streamline the 2021 adjournment process.

Committee chair, Senator Dan Dawson, R-Council Bluffs, said the move combined language from the governor’s housing law and a separate economic development law into a “proposal that fits our budget and meets some of our goals.”

The bill aims to remove income tax triggers and accelerate the reduction in tax rates and classes that are due to come into effect in 2024 – by the date of entry into force on January 1, 2023.

Business, tax and housing company representatives spoke out in favor of the revised legislation, and Brad Hartkopf of the Iowa Association of Business & Industry reported on the subcommittee hearing on Wednesday. “We believe this bill will improve the Iowa business and tax environment.”

Common Good Iowa’s Mike Owen questioned the timing, however, as the state and nation are still affected by a COVID-19 pandemic and additional uncertainty surrounding federal bailout funding for states where the money is not going to be used for tax breaks may.

“In short, what is the rush?” he said. “We know it will cost us $ 330 million to $ 350 million in federal COVID relief, and the triggers have a good chance of being hit anyway, especially with the federal Iowa booming economy.

“These triggers provide a certain amount of accountability that lawmakers only required to pass this income tax package, and they should be honored on that basis alone,” he added. “Why are we so determined to turn away an additional $ 350 million in federal aid to potentially bring the new income tax law into effect early?”

Previously, Senate Republicans who held a majority in the 32-18 year olds sent two separate tax bills to the House of Representatives that included removing income tax triggers for 2018, but majority House Republicans have neither of the two measures at this point in session seized.

The Senate’s latest package proposes increasing tax credits under the Workforce Housing Tax Credit Program and closing the backlog on housing projects awaiting support in major cities.

In the next fiscal year, the bill will increase the program allocation by $ 15 million from $ 25 million to $ 40 million for one year. The increase is dedicated to clearing the backlog and adds $ 2 million to the small towns shut down in FY 2023.

The bill also provides for a steady increase of $ 5 million in the program to increase small town shutdowns from $ 10 million to $ 15 million. Thereafter, the program will be funded with US $ 30 million in the future, including US $ 15 million for the closure of small towns and US $ 15 million for large cities.

Dawson said other provisions of the governor’s housing proposal will be included in other laws that will be dealt with next week as part of the appropriation process.

The bill also proposes to create a new Production 4.0 production program that the state business development agency will set up and manage for small businesses with three to 75 employees that have had a manufacturing facility in Iowa for at least three years and receive at least 50 percent its revenue from manufacturing.

The maximum amount of financial assistance that can be given to a manufacturer is $ 75,000.

Other provisions reshape the Energy Infrastructure Revolving Lending Program by providing financial support for the development and construction of energy infrastructure.

In addition, the brownfield / greenfield remediation tax credit program will be extended for 10 years and the allocation will be kept at $ 10 million. The bill also reduces the ceiling on quality job funding by the EDA from $ 105 million to $ 70 million.

Senator Bill Dotzler, D-Waterloo, referred to SSB 1269 as a proposal that was half full and half empty.

Senator Todd Taylor, D-Cedar Rapids, said the bill still requires a lot of work and hopefully other components addressing critical housing needs that have been referred to the Senate Funds Committee will be addressed at this session.

During her weekly press conference on Wednesday, Reynolds told reporters that she was considering what tax policies lawmakers would adopt at that session – after calling for the removal of income tax triggers and acceleration of tax breaks during her Jan. 12 address.

“By removing the triggers, Iowans is guaranteed that the historic tax cut we passed in 2018 will actually take effect,” she added. “I think we’ll probably hit it anyway with the predictions we’re looking at, but it ensures that they’ll see these tax cuts.”