Iowa House approves tax credits, incentives for child care facilities

DES MOINES - The Iowa House approved one of the GOP majority's priority bills, the Workforce Child Care Facility Tax Credit, which will make up to $3 million a year in tax credits available to developers who build or rehabilitate child care centers.

'Our caucus recognizes the importance of this legislation as Iowa continues to face a shortage of child care providers while having one of the highest rates of both parents in the workforce,” House Speaker Pat Grassley, R-New Hartford, said after House File 712 and 606 were approved Tuesday.

The bills are part of a package Republicans have put forward to address the lack of affordable and accessible child care, which also was acknowledged by House Democrats.

'We all know very well from our experience in our communities that child care - affordable, accessible child care - is a significant challenge,” said Rep. Lindsay James, D-Dubuque. 'This is a bill that is a small step in the right direction.”

Floor manager Rep. Jane Bloomingdale, R-Northwood, echoed that, noting that Republicans have come at the issue 'from four or five different directions.”

So far, the House has passed eight bills providing 'a variety of tools to impact a complicated workforce problem,” the Iowa Chamber Alliance said in applauding House approval of HF 712, which it said 'provides an incentive for developers to make upgrades for child care facilities.”

'The bipartisan effort this session on child care recognizes a complicated workforce problem that cannot be fixed easily,” said Dustin Miller, spokesman for the coalition of 13 of the largest economic development groups in the state.

'The child care needs in this state will require a variety of solutions provided to employees, employers and entrepreneurs.”

HF 712 calls for 60 percent of the tax credits to be reserved for small communities - those outside the 11 most populous counties. If the tax credits are not claimed by May 1, the remainder of the credits available can be used by any eligible applicant.

The bill would require projects to include local matching funds to be eligible for the tax credits. That could be in the form of property tax exemptions from local governments.

In small communities, the local match must be at least $25,000 of the project cost. In larger communities, it must be at least $50,000.

The credit would be capped at 25 percent of the cost or no more than $200,000. For larger communities, the credits are capped at 10 percent of the project cost or no more than $200,000.

Applications for the tax credits will be reviewed and scored competitively by the Iowa Economic Development Authority.

In the Senate, a companion bill, Senate File 122, was approved by the Economic Growth Committee and has been assigned to a Ways and Means subcommittee.

HF 606 would permit a business' new or expanded on-site day care facility to qualify as a project under the High Quality Jobs Program.

Projects that involve a new on-site child care facility or expanded facility that offers low-cost child care for the business' employees could be eligible for tax incentives or project completion assistance through the program, which is overseen by the Iowa Economic Development Authority.

In determining eligibility, the IEDA would consider the quality of the jobs to be created or retained, with an emphasis on jobs that: are full-time or career-type positions, provide comprehensive health benefits and pay wages equal to or higher than similar jobs within a 25-mile radius of the business' proposed project.

HF 712 was approved 87-6, with three Republicans and three Democrats voting 'no.” HF 606 was approved 91-2, with two GOP 'no” votes.

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