b.
Revocation and recapture for
prohibited activity; liability of certain transferees. If an eligible
taxpayer obtains a tax credit certificate from the authority by way of a
prohibited activity, the eligible taxpayer and any transferee shall be jointly
and severally liable to the state for the amount of the tax credits so issued,
interest and penalties allowed under Iowa Code chapter 422, and reasonable
attorney fees and litigation costs, except that the liability of the transferee
shall not exceed an amount equal to the amount of the tax credits acquired by
the transferee. The department of revenue, upon notification or discovery that
a tax credit certificate was issued to an eligible taxpayer by way of a
prohibited activity, shall revoke any outstanding tax credit and seek repayment
of the value of any tax credit already claimed, and the failure to make such a
repayment may be treated by the department of revenue in the same manner as a
failure to pay the tax shown due or required to be shown due with the filing of
a return or deposit form. A qualifying transferee is not subject to the
liability, revocation, and repayment imposed under this paragraph. For purposes
of this paragraph:
(1)
"Control" means when a
person, directly or indirectly or acting through or together with one or more
persons, satisfies any of the following:
1.
Owns, controls, or has the power to vote 50 percent or more of any class of
voting securities or voting membership interests of another person.
2. Controls, in any manner, the election of a
majority of the directors, managers, trustees, or other persons exercising
similar functions of another person.
3. Has the power to exercise a controlling
influence over the management or policies of another person.
(2)"Prohibited activity
" means a breach or default under the agreement with the authority,
the violation of any warranty provided by the eligible taxpayer to SHPO or the
authority, the claiming of a tax credit issued under this chapter for
expenditures that are not qualified rehabilitation expenditures, the violation
of any requirements of Iowa Code chapter 404A or rules adopted pursuant to Iowa
Code chapter 404A, misrepresentation, fraud, or any other unlawful act or
omission.
(3)
"Qualifying
transferee " means a transferee who acquires a tax credit certificate
issued under this chapter for value, in good faith, without express or implied
notice of a prohibited activity of the eligible taxpayer who was originally
issued the tax credit, and without express or implied notice of any other claim
to or defense against the tax credit, and which transferee is not associated
with the eligible taxpayer by being one or more of the following:
1. An owner, member, shareholder, or partner
of the eligible taxpayer who directly or indirectly owns and controls, in whole
or in part, the eligible taxpayer.
2. A director, officer, or employee of the
eligible taxpayer.
3. A relative of
the eligible taxpayer or a person listed in paragraph "1" or "2" of this
subparagraph or, if the eligible taxpayer or an owner, member, shareholder, or
partner of the eligible taxpayer is a legal entity, the natural persons who
ultimately own such legal entity.
4. A person who is owned or controlled, in
whole or in part, by a person listed in paragraph "1" or "2" of this
subparagraph.
(4)"Relative" means an
individual related by consanguinity within the second degree as determined by
common law, a spouse, or an individual related to a spouse within the second
degree as so determined, and includes an individual in an adoptive relationship
within the second degree.
