Dems: Ways & Means– week of March 7, 2016

March 14, 2016

SF 2300 – Renewable Chemical Production Tax Credit

SF 2301 – College savings plans operated by non-profits



SF 2300 establishes a Renewable Chemical Production Tax Credit administered by the Iowa Economic Development Authority (IEDA). The tax credit’s purpose is to incentivize industries to take byproducts from biomass feedstock and turn them into higher-value building-block chemicals. The tax credit is given by weight, $0.05 per pound of renewable chemical produced in excess of the business’s pre-eligibility production threshold. There are limits of $1 million for start-ups and $500,000 for established businesses each production year. An eligible business may not receive more than five credits under the program.


The Renewable Chemical Production Tax Credit is capped at $10 million per year under IEDA’s $170 million aggregate cap. The credit can be used against individual and corporate income taxes. The credit is refundable. The bill decreases the High Quality Jobs Program tax credit that is also under the $170 million cap by $25 million for five fiscal years. In FY22, IEDA will reduce the High Quality Jobs Program allocation by another $25 million for one more fiscal year if renewable tax credits awarded on or after July 1, 2019, but before July 1, 2021, equals or exceeds $27 million.


The credit is available for chemicals produced between January 1, 2017, and December 31, 2026. The first tax credits cannot be awarded until July 1, 2018, and no credits can be claimed prior to September 1, 2018. Tax credits are awarded on a first-come, first-served basis.


The Renewable Chemical Production Tax Credit is added to the Legislative Tax Expenditure Committee review schedule. The bill requires IEDA to report to the Legislature and the Governor on the program.

[3/3: 13-1 (Bolkcom “no”; Quirmbach excused)]


SF 2301 allows nonprofits to establish a 529 college savings account for individual savings plans. The legislation is designed to encourage college savings for low-income and at-risk students by allowing non-profits to design and administer a program that puts students on a path to college. Iowa does not currently allow nonprofits to administer college savings accounts. As a result, Iowa schools are currently organizing their plans in other states.

[3/3: short form (Quirmbach excused)]

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