Read the full stored bill text
House
File
661
-
Introduced
HOUSE
FILE
661
BY
EHLERT
,
KONFRST
,
B.
MEYER
,
JUDGE
,
LEVIN
,
JAMES
,
WILBURN
,
WICHTENDAHL
,
KURTH
,
GOSA
,
SRINIVAS
,
AMOS
JR.
,
R.
JOHNSON
,
JACOBY
,
CROKEN
,
MADISON
,
BAGNIEWSKI
,
KRESSIG
,
MATSON
,
BAETH
,
SCHEETZ
,
TUREK
,
GJERDE
,
OLSON
,
ZABNER
,
SCHOLTEN
,
WESSEL-KROESCHELL
,
COOLING
,
and
NIELSEN
A
BILL
FOR
An
Act
relating
to
child
care,
including
the
child
and
1
dependent
care
tax
credit,
a
child
care
workforce
matching
2
grant
program,
a
small
business
child
care
tax
credit,
and
3
state
child
care
assistance,
and
including
applicability
4
provisions.
5
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
6
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2875YH
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661
DIVISION
I
1
CHILD
AND
DEPENDENT
CARE
TAX
CREDIT
2
Section
1.
Section
422.12C,
subsection
1,
Code
2025,
is
3
amended
by
striking
the
subsection
and
inserting
in
lieu
4
thereof
the
following:
5
1.
The
taxes
imposed
under
this
subchapter,
less
the
amounts
6
of
nonrefundable
credits
allowed
under
this
subchapter,
shall
7
be
reduced
by
a
child
and
dependent
care
credit
equal
to
the
8
amount
of
the
federal
child
and
dependent
care
credit
provided
9
in
section
21
of
the
Internal
Revenue
Code,
without
regard
to
10
whether
or
not
the
federal
credit
was
limited
by
the
taxpayer’s
11
federal
tax
liability.
12
Sec.
2.
RETROACTIVE
APPLICABILITY.
This
division
of
this
13
Act
applies
retroactively
to
January
1,
2025,
for
tax
years
14
beginning
on
or
after
that
date.
15
DIVISION
II
16
CHILD
CARE
WORKFORCE
MATCHING
GRANT
PROGRAM
17
Sec.
3.
NEW
SECTION
.
237A.15
Child
care
workforce
matching
18
grant
program.
19
1.
For
purposes
of
this
section,
“program”
means
the
child
20
care
workforce
matching
grant
program
established
in
this
21
section.
22
2.
There
is
established
a
child
care
workforce
matching
23
grant
program.
Moneys
appropriated
by
the
general
assembly
to
24
the
department
for
the
program
shall
be
used
for
the
following
25
purposes:
26
a.
To
raise
wages
for
persons
employed
by
a
child
care
27
facility.
28
b.
To
provide
health
insurance,
paid
leave,
and
retirement
29
benefits
for
persons
employed
by
a
child
care
facility.
30
c.
To
raise
the
quality
of
the
work
environment
at
each
31
child
care
facility.
32
d.
To
collect
data
to
assess
the
needs
of
persons
employed
33
by
a
child
care
facility.
34
e.
To
assist
persons
employed
by
a
child
care
facility
to
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identify
sources
and
apply
for
benefits
for
which
a
person
may
1
qualify.
2
3.
The
department
shall
adopt
rules
pursuant
to
chapter
17A
3
to
administer
the
program.
4
DIVISION
III
5
SMALL
BUSINESS
CHILD
CARE
TAX
CREDIT
6
Sec.
4.
NEW
SECTION
.
237A.32
Small
business
child
care
tax
7
credit.
8
1.
As
used
in
this
section,
“small
business”
means
any
9
enterprise
which
is
located
in
this
state,
which
is
operated
10
for
profit
and
under
a
single
management,
and
which
has
either
11
fewer
than
twenty
employees
or
an
annual
gross
income
of
less
12
than
four
million
dollars
computed
as
the
average
of
the
three
13
preceding
fiscal
years.
This
definition
does
not
apply
to
any
14
program
or
activity
for
which
a
definition
for
small
business
15
is
provided
for
the
program
or
activity
by
federal
law
or
16
regulation
or
other
state
law.
17
2.
A
small
business
may
receive
a
child
care
tax
credit
18
for
providing
child
care
employee
benefits
to
employees
of
the
19
business.
The
credit
may
be
applied
against
income
tax
imposed
20
under
chapter
422,
subchapter
II
or
III,
the
franchise
tax
21
imposed
under
chapter
422,
subchapter
V,
the
gross
premiums
22
tax
imposed
under
chapter
432,
or
the
moneys
and
credits
tax
23
imposed
in
section
533.329.
The
amount
of
the
credit
equals
24
the
costs
to
provide
the
benefit
up
to
three
thousand
dollars
25
per
employee
per
year.
26
3.
The
aggregate
amount
of
tax
credits
authorized
pursuant
27
to
this
section
shall
not
exceed
a
total
of
two
million
28
dollars
per
fiscal
year,
and
shall
be
awarded
on
a
first-come,
29
first-served
basis.
30
4.
To
be
eligible
for
a
small
business
child
care
tax
31
credit,
the
small
business
must
provide
child
care
employee
32
benefits
to
employees
of
the
business
through
any
of
the
33
following:
34
a.
Build
a
new
structure
or
rehabilitate
an
existing
35
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structure
to
be
used
as
a
child
care
center
at
or
near
the
small
1
business
where
the
children
of
the
employees
of
the
business
2
are
provided
child
care.
A
small
business
may
construct
or
3
rehabilitate
the
structure
in
conjunction
with
another
business
4
but
only
the
actual
cost
of
the
business
shall
be
considered
in
5
determining
the
credit.
6
b.
Operate
or
lease
a
child
care
center
at
or
near
the
small
7
business
where
the
children
of
the
employees
of
the
business
8
are
provided
child
care.
9
5.
A
taxpayer
who
elects
to
claim
the
small
business
child
10
care
tax
credit
shall
not
claim
the
employer
child
care
tax
11
credit
under
section
237A.31.
12
6.
Any
credit
in
excess
of
the
tax
liability
is
not
13
refundable
but
the
excess
for
the
tax
year
may
be
credited
14
to
the
tax
liability
for
the
following
five
years
or
until
15
depleted,
whichever
is
earlier.
16
7.
The
director
of
revenue
shall
adopt
rules
to
implement
17
this
section.
18
Sec.
5.
NEW
SECTION
.
422.12Q
Small
business
child
care
tax
19
credit.
20
1.
The
taxes
imposed
under
this
subchapter,
less
the
credits
21
allowed
under
section
422.12,
shall
be
reduced
by
a
small
22
business
child
care
tax
credit
received
pursuant
to
section
23
237A.32.
24
2.
An
individual
may
claim
the
tax
credit
allowed
a
25
partnership,
S
corporation,
limited
liability
company,
estate,
26
or
trust
electing
to
have
the
income
taxed
directly
to
the
27
individual.
The
amount
claimed
by
the
individual
shall
be
28
based
upon
the
pro
rata
share
of
the
individual’s
earnings
of
a
29
partnership,
S
corporation,
limited
liability
company,
estate,
30
or
trust.
31
Sec.
6.
Section
422.33,
Code
2025,
is
amended
by
adding
the
32
following
new
subsection:
33
NEW
SUBSECTION
.
33.
The
taxes
imposed
under
this
subchapter
34
shall
be
reduced
by
a
small
business
child
care
tax
credit
35
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received
pursuant
to
section
237A.32.
1
Sec.
7.
Section
422.60,
Code
2025,
is
amended
by
adding
the
2
following
new
subsection:
3
NEW
SUBSECTION
.
16.
The
taxes
imposed
under
this
subchapter
4
shall
be
reduced
by
a
small
business
child
care
tax
credit
5
received
pursuant
to
section
237A.32.
6
Sec.
8.
NEW
SECTION
.
432.12P
Small
business
child
care
tax
7
credit.
8
The
taxes
imposed
under
this
chapter
shall
be
reduced
by
9
a
small
business
child
care
tax
credit
received
pursuant
to
10
section
237A.32.
11
Sec.
9.
Section
533.329,
subsection
2,
Code
2025,
is
amended
12
by
adding
the
following
new
paragraph:
13
NEW
PARAGRAPH
.
n.
The
moneys
and
credits
tax
imposed
under
14
this
section
shall
be
reduced
by
a
small
business
child
care
15
tax
credit
received
pursuant
to
section
237A.32.
16
Sec.
10.
RETROACTIVE
APPLICABILITY.
This
division
of
this
17
Act
applies
retroactively
to
January
1,
2025,
for
tax
years
18
beginning
on
or
after
that
date.
19
DIVISION
IV
20
STATE
CHILD
CARE
ASSISTANCE
21
Sec.
11.
Section
237A.13,
subsection
1,
paragraph
c,
Code
22
2025,
is
amended
to
read
as
follows:
23
c.
The
child’s
parent,
guardian,
or
custodian
is
employed
24
a
minimum
of
thirty-two
hours
per
week
or
an
average
of
25
thirty-two
hours
per
week
during
the
month
if
the
child
26
requires
basic
care,
or
twenty-eight
hours
per
week
or
an
27
average
of
twenty-eight
hours
per
week
during
the
month
if
the
28
child
is
a
special
needs
child
.
29
Sec.
12.
Section
237A.13,
subsection
2,
paragraph
a,
Code
30
2025,
is
amended
to
read
as
follows:
31
a.
(1)
One
Two
hundred
sixty
fifty
percent
of
the
federal
32
poverty
level
applicable
to
the
family
size
for
children
33
needing
basic
care.
34
(2)
Two
hundred
ninety
percent
of
the
federal
poverty
level
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applicable
to
the
family
size
for
children
needing
special
1
needs
care.
2
Sec.
13.
Section
237A.13,
subsection
4,
paragraph
a,
Code
3
2025,
is
amended
by
striking
the
paragraph
and
inserting
in
4
lieu
thereof
the
following:
5
a.
The
department
shall
reimburse
a
provider
at
a
rate
equal
6
to
the
rate
the
provider
charges
a
private-pay
family
for
child
7
care.
8
Sec.
14.
Section
237A.13,
subsection
5,
Code
2025,
is
9
amended
to
read
as
follows:
10
5.
The
department’s
billing
and
payment
provisions
for
11
the
program
shall
allow
providers
to
elect
either
biweekly
or
12
monthly
billing
and
payment
for
child
care
provided
under
based
13
on
the
number
of
hours
of
child
care
scheduled
for
a
child
14
enrolled
in
the
program.
The
department
shall
remit
payment
15
to
a
provider
within
ten
business
days
of
receiving
a
bill
16
or
claim
for
services
provided
.
However,
if
the
department
17
determines
that
a
bill
has
an
error
or
omission,
the
department
18
shall
notify
the
provider
of
the
error
or
omission
and
identify
19
any
correction
needed
before
issuance
of
payment
to
the
20
provider.
The
department
shall
provide
the
notice
within
five
21
business
days
of
receiving
the
billing
from
the
provider
and
22
shall
remit
payment
to
the
provider
within
ten
business
days
of
23
receiving
the
corrected
billing.
24
Sec.
15.
Section
237A.13,
subsection
6,
Code
2025,
is
25
amended
by
striking
the
subsection.
26
Sec.
16.
Section
237A.13,
subsection
8,
Code
2025,
is
27
amended
by
adding
the
following
new
paragraph:
28
NEW
PARAGRAPH
.
e.
Persons
deemed
to
be
eligible
for
29
benefits
under
the
state
child
care
assistance
program
in
30
accordance
with
section
237A.13A.
31
Sec.
17.
NEW
SECTION
.
237A.13A
State
child
care
assistance
32
——
child
care
personnel.
33
1.
Notwithstanding
section
237A.13,
subsections
1
and
2,
34
a
child
shall
be
eligible
for
the
state
child
care
assistance
35
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program
under
section
237A.13
if
a
parent,
guardian,
or
1
custodian
meets
the
following
requirements:
2
a.
The
parent,
guardian,
or
custodian
is
employed
at
3
a
child
care
facility,
a
child
care
home
registered
with
4
the
department,
or
an
unregistered
child
care
home
with
an
5
agreement
with
the
department
to
accept
reimbursements
from
the
6
state
child
care
assistance
program.
7
b.
The
parent,
guardian,
or
custodian
works
an
average
8
minimum
of
thirty-two
hours
per
week
during
the
month
in
9
a
position
with
a
primary
duty
of
providing
child
care
10
directly
to
children,
and
is
regularly
counted
in
the
minimum
11
child-to-staff
ratio
established
by
the
department
by
rule.
12
c.
If
the
parent,
guardian,
or
custodian
is
employed
at
13
a
child
care
home
or
a
child
development
home,
the
parent,
14
guardian,
or
custodian
does
not
provide
child
care
to
the
15
parent,
guardian,
or
custodian’s
own
child.
A
co-provider
16
at
a
child
development
home
may
qualify
for
state
child
care
17
assistance
if
such
person
meets
all
requirements
set
by
this
18
section
and
by
the
department
by
rule.
19
d.
The
parent,
guardian,
or
custodian
is
not
a
substitute
or
20
an
assistant
at
a
child
development
home.
21
e.
Based
on
the
department’s
evaluation
of
the
parent,
22
guardian,
or
custodian’s
application
for
state
child
care
23
assistance,
the
department
has
determined
the
parent,
guardian,
24
or
custodian
has
a
need
for
child
care.
25
2.
A
director,
co-director,
or
other
administrative
26
staff
member
of
a
child
care
facility
may
qualify
for
state
27
child
care
assistance
pursuant
to
subsection
1
if
such
person
28
is
regularly
counted
in
the
minimum
child-to-staff
ratio
29
established
by
the
department
by
rule.
30
3.
A
family
participating
in
the
state
child
care
assistance
31
program
pursuant
to
eligibility
established
under
this
section
32
shall
make
copayments
for
child
care
services
received
under
33
the
program
based
on
the
family’s
household
income.
34
4.
The
department
shall
adopt
rules
pursuant
to
chapter
17A
35
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661
to
implement
and
administer
this
section.
1
EXPLANATION
2
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
3
the
explanation’s
substance
by
the
members
of
the
general
assembly.
4
This
bill
relates
to
child
care
and
is
separated
into
5
divisions.
6
DIVISION
I
——
CHILD
AND
DEPENDENT
CARE
TAX
CREDIT.
The
Iowa
7
child
and
dependent
care
tax
credit
is
a
refundable
credit
8
calculated
as
a
percentage
of
the
federal
child
and
dependent
9
care
tax
credit,
depending
on
the
Iowa
net
income
of
the
10
taxpayer.
Currently,
there
are
seven
graduated
Iowa
net
income
11
thresholds
used
to
calculate
the
credit.
This
division
strikes
12
the
Iowa
net
income
thresholds,
and
specifies
a
taxpayer
may
13
claim
a
tax
credit
to
reduce
Iowa
net
income
equal
to
the
14
amount
of
the
child
and
dependent
care
credit
of
the
federal
15
child
and
dependent
care
credit
provided
in
section
21
of
16
the
Internal
Revenue
Code,
without
regard
to
whether
or
not
17
the
federal
credit
was
limited
by
the
taxpayer’s
federal
tax
18
liability.
19
The
division
applies
retroactively
to
tax
years
beginning
on
20
or
after
January
1,
2025.
21
DIVISION
II
——
CHILD
CARE
WORKFORCE
MATCHING
GRANT
PROGRAM.
22
This
division
establishes
a
child
care
workforce
matching
grant
23
program
(program).
Moneys
appropriated
by
the
general
assembly
24
to
the
department
of
health
and
human
services
(HHS)
for
the
25
program
must
be
used
to
raise
wages
for
persons
employed
by
26
a
child
care
facility;
provide
health
insurance,
paid
leave,
27
and
retirement
benefits
for
persons
employed
by
a
child
care
28
facility;
raise
the
quality
of
the
work
environment
at
each
29
child
care
facility;
collect
data
to
assess
the
needs
of
30
persons
employed
by
a
child
care
facility;
and
assist
persons
31
employed
by
a
child
care
facility
to
identify
sources
and
apply
32
for
benefits
for
which
a
person
may
qualify.
The
division
33
requires
HHS
to
adopt
rules
to
administer
the
program.
34
DIVISION
III
——
SMALL
BUSINESS
CHILD
CARE
TAX
CREDIT.
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This
division
creates
a
small
business
child
care
tax
credit
1
available
against
the
individual
and
corporate
income
taxes,
2
the
franchise
tax,
the
insurance
premiums
tax,
and
the
moneys
3
and
credits
tax.
4
The
division
defines
“small
business”
as
any
enterprise
5
located
in
this
state,
which
is
operated
for
profit
under
a
6
single
management
and
which
has
either
fewer
than
20
employees
7
or
an
annual
gross
income
of
less
than
$4
million
computed
as
8
the
average
of
the
three
preceding
fiscal
years.
9
The
division
allows
a
small
business
to
receive
a
tax
credit
10
for
providing
child
care
employee
benefits
to
employees
of
the
11
business.
The
amount
of
the
credit
equals
the
costs
to
provide
12
the
benefit
up
to
$3,000
per
employee
per
year.
The
aggregate
13
amount
of
tax
credits
cannot
exceed
a
total
of
$2
million
per
14
fiscal
year
and
are
awarded
on
a
first-come,
first-served
15
basis.
The
division
requires
a
small
business
to
provide
child
16
care
employee
benefits
to
employees
through
certain
methods
17
in
order
to
be
eligible
for
the
small
business
child
care
tax
18
credit.
19
The
division
applies
retroactively
to
tax
years
beginning
on
20
or
after
January
1,
2025.
21
DIVISION
IV
——
STATE
CHILD
CARE
ASSISTANCE.
This
division
22
relates
to
state
child
care
assistance
(CCA).
23
Under
current
law,
to
be
eligible
for
the
CCA
program,
a
24
family
must
be
described
by
one
of
six
different
circumstances
25
and
meet
income
requirements.
One
of
the
six
eligibility
26
circumstances
is
that
a
child’s
parent,
guardian,
or
custodian
27
(parent)
is
employed
a
minimum
of
32
hours
per
week
or
an
28
average
of
32
hours
per
week
during
the
month
if
the
child
29
requires
basic
care,
or
28
hours
per
week
or
an
average
of
28
30
hours
per
week
during
the
month
if
the
child
is
a
special
needs
31
child.
The
division
changes
the
work
requirements
to
28
hours
32
per
week
or
an
average
of
28
hours
per
week
during
the
month
for
33
parents
of
any
child.
34
Under
current
law,
a
family
is
required
to
have
income
at
or
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below
160
percent
of
the
federal
poverty
level
applicable
to
1
the
family’s
size
(FPL)
for
a
family
of
a
child
needing
basic
2
care;
200
percent
of
the
FPL
for
a
family
of
a
special
needs
3
child;
or
85
percent
of
the
state
median
gross
monthly
income,
4
whichever
is
lower.
The
division
sets
initial
eligibility
at
5
the
lesser
of
85
percent
of
the
state
median
gross
monthly
6
income,
or
250
percent
of
the
FPL
for
families
of
children
7
needing
basic
care
or
290
percent
of
the
FPL
for
families
of
8
special
needs
children.
9
The
division
requires
HHS
to
reimburse
child
care
providers
10
participating
in
the
CCA
program
at
a
rate
equal
to
the
rate
11
the
provider
charges
a
private-pay
family
for
child
care.
12
The
division
provides
that
HHS
shall
pay
providers
based
13
on
the
number
of
hours
of
child
care
scheduled
for
a
child
14
enrolled
in
the
CCA
program
instead
of
for
child
care
provided.
15
The
division
makes
a
child
eligible
for
CCA
if
the
child
16
is
in
a
family
with
a
parent,
guardian,
or
custodian
who
is
17
employed
at
a
child
care
facility,
a
child
care
home
registered
18
with
HHS,
or
an
unregistered
child
care
home
with
an
agreement
19
with
HHS
to
accept
CCA
reimbursements;
and
who
meets
certain
20
requirements
as
detailed
in
the
division
(qualified
parent).
21
The
division
provides
that
a
director,
co-director,
or
other
22
administrative
staff
of
a
child
care
facility
may
qualify
as
23
a
qualified
parent
if
such
person
is
regularly
counted
in
the
24
minimum
child-to-staff
ratio
established
by
HHS
by
rule.
25
The
division
requires
a
family
who
participates
in
CCA
to
26
make
copayments
for
services
received
from
the
program,
if
the
27
family’s
eligibility
is
based
on
a
parent
being
a
qualified
28
parent.
29
The
division
directs
HHS
to
adopt
rules
to
implement
and
30
administer
the
division’s
provisions
related
to
qualified
31
parents.
32
The
division
prohibits
HHS
from
applying
waiting
list
33
requirements
for
CCA
on
persons
deemed
eligible
for
CCA
due
to
34
eligibility
based
on
a
qualified
parent.
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The
division
makes
a
conforming
change
by
striking
Code
1
section
237A.13(6).
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