Bill Text: IA HF2418 | 2011-2012 | 84th General Assembly | Introduced

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Bill Title: A bill for an act relating to economic development and the use of funds by affecting programs, tax incentives, and project completion and other assistance administered by the economic development authority, by diverting withholding tax payments for such programs, incentives, and assistance, by abolishing the film tax credit program, by replacing references to the economic development fund and financial assistance program, and by providing spending authority, by providing for properly related matters, and including effective date and retroactive and other applicability provisions. (Formerly HSB 591) (See Cmte. Bill HF 2473)

Spectrum: Committee Bill

Status: (Introduced - Dead) 2012-05-08 - Withdrawn. H.J. 933. [HF2418 Detail]

Download: Iowa-2011-HF2418-Introduced.html

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House File 2418 - Introduced
HOUSE FILE 2418
BY COMMITTEE ON ECONOMIC
GROWTH/REBUILD IOWA
(SUCCESSOR TO HSB 591)
A BILL FOR
An Act relating to economic development and the use of
funds by affecting programs, tax incentives, and project
completion and other assistance administered by the economic
development authority, by diverting withholding tax payments
for such programs, incentives, and assistance, by abolishing
the film tax credit program, by replacing references to the
economic development fund and financial assistance program,
and by providing spending authority, by providing for
properly related matters, and including effective date and
retroactive and other applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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DIVISION I
HIGH QUALITY JOBS PROGRAM AND RELATED ASSISTANCE AND PROGRAMS
Section 1. Section 15.327, subsections 2, 5, 7, 8, 10, 12,
and 13, Code Supplement 2011, are amended to read as follows:
2. “Benefit” has the same meaning as defined in section
15G.101 means nonwage compensation provided to an employee .
Benefits typically include medical and dental insurance
plans, pension, retirement, and profit-sharing plans, child
care services, life insurance coverage, vision insurance
coverage, disability insurance coverage, and any other nonwage
compensation as determined by the board.
5. “Created job” has the same meaning as defined in section
15G.101 means a new, permanent, full-time equivalent position
added to a business’s payroll in excess of the business’s base
employment level .
7. “Fiscal impact ratio” has the same meaning as defined
in section 15G.101 means a ratio calculated by estimating the
amount of taxes to be received from a business by the state
and dividing the estimate by the estimated cost to the state
of providing certain project completion assistance and tax
incentives to the business, reflecting a ten-year period and
expressed in terms of current dollars . For purposes of the
program, “fiscal impact ratio” does not include taxes received
by political subdivisions.
8. “Maintenance period completion date” has the same meaning
as defined in section 15G.101 means the date on which the
maintenance period ends .
10. “Project completion date” has the same meaning as
defined in section 15G.101 means the date by which a recipient
of project completion assistance has agreed to meet all the
terms and obligations contained in an agreement with the
authority .
12. “Qualifying wage threshold” has the same meaning as
defined in section 15G.101 means the laborshed wage for an
eligible business .
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13. “Retained job” has the same meaning as defined in
section 15G.101 means a full-time equivalent position, in
existence at the time an employer applies for financial
assistance which remains continuously filled and which is at
risk of elimination if the project for which the employer is
seeking assistance does not proceed .
Sec. 2. Section 15.327, Code Supplement 2011, is amended by
adding the following new subsections:
NEW SUBSECTION . 1A. “Base employment level” means the
number of full-time equivalent positions at a business,
as established by the authority and a business using the
business’s payroll records, as of the date a business applies
for incentives or project completion assistance under the
program.
NEW SUBSECTION . 2A. “Business engaged in disaster recovery”
means a business located in an area declared a disaster area
by a federal official, that has sustained substantial physical
damage, that has closed as the result of a natural disaster,
and that has a plan for reopening that includes employing a
substantial number of the employees the business employed
before the natural disaster occurred.
NEW SUBSECTION . 6A. “Financial assistance” means assistance
provided only from the funds, rights, and assets legally
available to the authority pursuant to this chapter and
includes but is not limited to assistance in the form of
grants, loans, forgivable loans, and royalty payments.
NEW SUBSECTION . 7A. “Full-time equivalent position” means
a non-part-time position for the number of hours or days per
week considered to be full-time work for the kind of service
or work performed for an employer. Typically, a full-time
equivalent position requires two thousand eighty hours of work
in a calendar year, including all paid holidays, vacations,
sick time, and other paid leave.
NEW SUBSECTION . 7B. “Fund” means a fund created pursuant
to section 15.335B.
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NEW SUBSECTION . 7C. “Laborshed wage” means the wage level
represented by those wages within two standard deviations
from the mean wage within the laborshed area in which the
eligible business is located, as calculated by the authority,
by rule, using the most current covered wage and employment
data available from the department of workforce development for
the laborshed area.
NEW SUBSECTION . 7D. “Maintenance period” means the period
of time between the project completion date and the maintenance
period completion date.
NEW SUBSECTION . 8A. “Necessary physical infrastructure
project” means a project that creates necessary infrastructure
for economic success throughout Iowa, provides the foundation
for the creation of jobs, and involves the investment of
a substantial amount of capital. Physical infrastructure
projects include but are not limited to projects involving
any mode of transportation; public works and utilities such
as sewer, water, power, or telecommunications; physical
improvements that mitigate, prevent, or eliminate environmental
contamination; and other similar projects deemed to be physical
infrastructure by the authority.
NEW SUBSECTION . 9A. “Program support” means the services
necessary for the efficient administration of this part,
including the delivery of program services to eligible
businesses. “Program support” may include the administrative
costs of providing project assistance, conducting a statewide
laborshed study in coordination with the department of
workforce development, outreach to business and marketing of
programs, the procurement of technical assistance, and the
implementation of information technology.
NEW SUBSECTION . 9B. “Project completion assistance” means
financial assistance or technical assistance provided to
an eligible business in order to facilitate the start-up,
location, or expansion of the business in this state and
provided in an expedient manner to ensure the successful
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completion of the start-up, location, or expansion project.
NEW SUBSECTION . 10A. “Project completion period” means the
period of time between the date financial assistance is awarded
and the project completion date.
Sec. 3. Section 15.329, subsection 1, unnumbered paragraph
1, Code Supplement 2011, is amended to read as follows:
To be eligible to receive incentives or assistance
under this part, a business shall meet all of the following
requirements:
Sec. 4. Section 15.329, subsection 1, paragraph b, Code
Supplement 2011, is amended to read as follows:
b. (1) The business has not closed or substantially
reduced operations in one area of this state and relocated
substantially the same operations in a community in another
area of this state shall not be solely relocating operations
from one area of the state while seeking state or local
incentives . A project that does not create new jobs or
involve a substantial amount of new capital investment shall
be presumed to be a relocation. In determining whether a
business is solely relocating operations for purposes of this
subparagraph, the authority shall consider a letter of support
for the move from the affected local community.
(2) The business shall not be in the process of reducing
operations in one community while simultaneously applying
for assistance under the program. For purposes of this
subparagraph, a reduction in operations within twelve months
before or after an application for assistance is submitted to
the authority shall be presumed to be a reduction in operations
while simultaneously applying for assistance under the program.
(3) This paragraph shall not be construed to prohibit
a business from expanding its operation in a community if
existing operations of a similar nature in this state are not
closed or substantially reduced.
Sec. 5. Section 15.329, subsection 1, paragraph c,
subparagraphs (1) and (2), Code Supplement 2011, are amended
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to read as follows:
(1) If the business is creating jobs, the business shall
demonstrate that the jobs will pay at least one hundred percent
of the qualifying wage threshold at the start of the project
completion period, at least one hundred thirty twenty percent
of the qualifying wage threshold by the project completion
date, and at least one hundred thirty twenty percent of
the qualifying wage threshold until the maintenance period
completion date.
(2) If the business is retaining jobs, the business
shall demonstrate that the jobs retained will pay at least
one hundred thirty twenty percent of the qualifying wage
threshold throughout both the project completion period and the
maintenance period.
Sec. 6. Section 15.329, subsection 2, Code Supplement 2011,
is amended by striking the subsection.
Sec. 7. Section 15.330, Code Supplement 2011, is amended to
read as follows:
15.330 Agreement.
A business shall enter into an agreement with the authority
specifying the requirements that must be met to confirm
eligibility pursuant to this part. The authority shall
consult with the community during negotiations relating to the
agreement. The agreement shall contain, at a minimum, the
following provisions:
1. A business that is approved to receive incentives
or assistance under this part shall, for the length of the
agreement, certify annually to the authority the compliance of
the business with the requirements of the agreement. If the
business receives a local property tax exemption, the business
shall also certify annually to the community the compliance of
the business with the requirements of the agreement.
2. The repayment of incentives or financial assistance
by the business if the business does not meet any of the
requirements of this part or the resulting agreement.
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3. If a business that is approved to receive incentives
or assistance under this part experiences a layoff within the
state or closes any of its facilities within the state, the
authority shall have the discretion to reduce or eliminate
some or all of the incentives or assistance . If a business
has received incentives or assistance under this part and
experiences a layoff within the state or closes any of its
facilities within the state, the business may be subject to
repayment of all or a portion of the incentives or financial
assistance that it has received.
4. A project completion date, a maintenance period
completion date, the number of jobs to be created or retained,
or certain other terms and obligations described in section
15G.112, subsection 1 , paragraph “d” , as the authority
deems necessary in order to make the requirements in project
agreements uniform. The authority, with the approval of
the board, may adopt rules as necessary for making such
requirements uniform. Such rules shall be in compliance with
the provisions of this part and with the provisions of chapter
15G .
5. The amount and type of project completion assistance to
be provided under section 15.335B.
6. The amount of matching funds to be received by a business
from a city or county. The authority shall adopt by rule a
formula for determining the amount of matching funds required
under the program.
7. The business shall not have closed or substantially
reduced operations in one area of this state and relocated
substantially the same operations in a community in another
area of this state. However, this paragraph shall not be
construed to prohibit a business from expanding its operation
in a community if existing operations of a similar nature in
this state are not closed or substantially reduced.
8. The proposed project shall not negatively impact other
businesses in competition with the business being considered
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for assistance. The authority shall make a good-faith effort
to identify existing Iowa businesses within an industry in
competition with the business being considered for incentives
or assistance. The authority shall make a good-faith effort
to determine the probability that the proposed incentives or
assistance will displace employees of the existing businesses.
In determining the impact on businesses in competition with the
business being considered for incentives or assistance, jobs
created or retained as a result of other jobs being displaced
elsewhere in the state shall not be considered direct jobs
created or retained.
9. A report submitted to the authority with its application
describing all violations of environmental law or worker
safety law within the last five years. If, upon review of the
application, the authority finds that a business has a record
of violations of the law, statutes, rules, or regulations that
tends to show a consistent pattern, the authority shall not
provide incentives or assistance to the business unless the
authority finds either that the violations did not seriously
affect public health, public safety, or the environment, or,
if such violations did seriously affect public health, public
safety, or the environment, that mitigating circumstances were
present.
10. That the business shall only employ individuals legally
authorized to work in this state. In addition to any and
all other applicable penalties provided by current law, all
or a portion of the incentives or assistance received under
this part by a business that is found to knowingly employ
individuals not legally authorized to work in this state is
subject to recapture by the authority or by the department of
revenue.
11. Any terms deemed necessary by the authority to effect
compliance with the eligibility requirements of section 15.329.
Sec. 8. NEW SECTION . 15.330A Maintenance of agreements.
1. An eligible business receiving incentives or assistance
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under this part shall meet all terms and obligations in an
agreement by the project completion date, but the board may
for good cause extend the project completion date or otherwise
amend an agreement.
2. During the maintenance period an eligible business
receiving incentives or assistance under this part shall
continue to comply with the terms and obligations of an
agreement entered into pursuant to section 15.330.
3. The authority may enforce the terms of an agreement as
necessary and appropriate.
Sec. 9. NEW SECTION . 15.331 Withholding tax payment
diversion.
1. If the authority enters into an agreement pursuant to
this part, or pursuant to chapter 15E, division XVIII, for
any of the incentives or assistance provided under this part,
the authority and the eligible business may agree to credit a
portion of the payments required under section 422.16 to the
authority as provided in this section.
2. a. An eligible business entering into a withholding
agreement with the authority pursuant to this section shall
remit the total amount of withholding payments due pursuant to
section 422.16 to the department of revenue.
b. The department of revenue shall, beginning July 1 of each
fiscal year, quarterly deposit in a fund created pursuant to
section 15.106A an amount equal to two and one-half percent of
the gross wages paid by the eligible business to each employee
holding a created or retained job covered by an agreement
entered into pursuant to this part or chapter 15E, division
XVIII, until such deposits reach ten million dollars or until
June 30 of the fiscal year, whichever comes first. Moneys to
be deposited pursuant to this paragraph shall not be paid to
the authority until the correct amounts have been verified by
the department of revenue.
3. Withholding payments shall be deposited pursuant to this
section by the department of revenue for each employee holding
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a created or retained job for the duration of the agreement
between the eligible business and the authority.
4. The authority and the eligible business shall provide
to the department of revenue any information necessary to
correctly process the diversion of withholding tax payments
pursuant to this section.
5. An employee holding a created or retained job shall
receive full credit for the amount withheld as provided in
section 422.16.
6. If a portion of the employee’s gross wages are subject
to a withholding credit diversion under chapter 260E, chapter
260G, or section 403.19A, or a supplemental withholding credit
diversion under sections 15A.7 and 15E.197, when a withholding
credit diversion under this section is agreed to, then the
withholding payments shall be credited in the following order
of priority:
a. First, the withholding payments to be credited pursuant
to chapters 260E and 260G and sections 15A.7 and 15E.197.
b. Second, the withholding payments to be credited pursuant
to this section until the deposits reach the amount specified
in subsection 2.
c. Third, the withholding payments to be credited pursuant
to section 403.19A.
7. The authority, in conjunction with the department of
revenue, shall adopt rules for the implementation of this
section.
Sec. 10. Section 15.335A, subsection 1, unnumbered
paragraph 1, Code Supplement 2011, is amended to read as
follows:
Tax incentives are available to eligible businesses as
provided in this section . The incentives are based upon the
number of jobs created or retained that pay at least one
hundred thirty twenty percent of the qualifying wage threshold
as computed pursuant to section 15G.112, subsection 4 , and
the amount of the qualifying investment made according to the
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following schedule:
Sec. 11. Section 15.335A, subsection 2, paragraphs b, c,
f, and g, Code Supplement 2011, are amended by striking the
paragraphs.
Sec. 12. Section 15.335A, subsections 3 and 4, Code
Supplement 2011, are amended by striking the subsections.
Sec. 13. Section 15.335A, subsection 5, Code Supplement
2011, is amended to read as follows:
5. The authority shall negotiate the amount of tax
incentives provided to an applicant under the program
in accordance with this section and section 15G.112 , as
applicable .
Sec. 14. NEW SECTION . 15.335B Assistance for certain
programs and projects.
1. a. Under the authority provided in section 15.106A,
there shall be established one or more funds within the state
treasury, under the control of the authority, to be used for
purposes of this section.
b. A fund established for purposes of this section shall
consist of the moneys deposited by the department of revenue
pursuant to section 15.331.
c. Interest or earnings on moneys deposited in a fund to be
used for the purposes of this section, and all repayments or
recaptures of the assistance provided under this section, shall
accrue to the authority and shall be used for purposes of this
section, notwithstanding section 12C.7. Moneys in a fund are
not subject to section 8.33.
2. a. Moneys deposited pursuant to subsection 1 shall be
allocated by the authority in appropriate amounts to be used
for the following purposes:
(1) For providing project completion assistance to eligible
businesses under this part and for program support of such
assistance.
(2) For providing economic development region financial
assistance under section 15E.232, subsections 1, 3, 4, 5, and
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6.
(3) For providing financial assistance for business
accelerators pursuant to section 15E.351.
(4) For deposit in the innovation and commercialization
fund created pursuant to section 15.412.
(5) For providing financial assistance to businesses
engaged in disaster recovery.
(6) For providing financial assistance to Iowa’s councils
of governments.
b. Each fiscal year, the authority shall estimate the
amount of revenues available for purposes of this section and
shall develop a budget appropriate for the expenditure of the
revenues available.
3. In providing assistance under this section, the
authority shall make a determination as to the amount and
type of assistance that is most appropriate for facilitating
the successful completion of an eligible business’s project.
Before making such a determination, the authority shall do all
of the following:
a. Consider a business’s eligibility for the tax incentives
available under section 15.335A and ensure that the amount of
assistance to be provided appropriately complements the amount
and type of tax incentives to be provided.
b. Consider the amount of private sector investment to be
leveraged by the project, including the eligible business’s
equity investment, debt financing, and any venture capital or
foreign investment available, and make a good-faith effort to
provide only the amount of incentives and assistance necessary
to facilitate the project’s successful completion.
c. Consider the amount and type of the local community
match. The authority may provide assistance to an early-stage
business in a high-growth industry regardless of the amount of
local match involved.
d. Calculate the fiscal impact ratio of the project and use
it to guide the provision of incentives and assistance under
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this part.
e. Evaluate the quality of the project based on the factors
described in section 15.329, subsection 5, and any other
relevant factors.
f. Ensure that the combined amount of incentives and
assistance are appropriate to the size of the project, to
the value of the project, to the fiscal impact ratio of the
project, and to any other relevant factors.
4. Each eligible business receiving assistance under this
section shall enter into an agreement with the authority and
the agreement shall meet the requirements of sections 15.330
and 15.330A.
Sec. 15. NEW SECTION . 15.335C Economically distressed
areas.
1. a. Notwithstanding section 15.329, subsection 1,
paragraph “c” , the authority may provide tax incentives or
project completion assistance under this part to an eligible
business paying less than one hundred twenty percent of the
qualifying wage threshold if that business is located in an
economically distressed area.
b. A business in an economically distressed area receiving
incentives or assistance pursuant to this section shall be
required to pay at least one hundred percent of the qualifying
wage threshold.
2. For purposes of this section, “economically distressed
area” means a county that ranks among the bottom twenty-five of
all Iowa counties, as measured by one of the following:
a. Average monthly unemployment level for the most recent
twelve-month period.
b. Average annualized unemployment level for the most recent
five-year period.
Sec. 16. Section 15A.7, subsection 3, Code Supplement 2011,
is amended to read as follows:
3. That the employer shall agree to pay wages for the jobs
for which the credit is taken of at least the county wage or
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the regional laborshed wage, as calculated by the authority
pursuant to section 15G.112 15.327 , subsection 3 , whichever
is lower 7C . Eligibility for the supplemental credit shall
be based on a one-time determination of starting wages by the
community college.
Sec. 17. Section 15E.193, subsection 1, paragraph b,
subparagraph (1), Code Supplement 2011, is amended to read as
follows:
(1) The business shall provide a sufficient package of
benefits to each employee holding a created or retained job.
For purposes of this paragraph, “created job” and “retained job”
have the same meaning as defined in section 15G.101 15.327 .
Sec. 18. Section 15E.193, subsection 1, paragraphs c and d,
Code Supplement 2011, are amended to read as follows:
c. The business shall pay a wage that is at least ninety
percent of the qualifying wage threshold. For purposes of this
paragraph, “qualifying wage threshold” has the same meaning as
defined in section 15G.101 15.327 .
d. Creates or retains at least ten full-time equivalent
positions and maintains them until the maintenance period
completion date. For purposes of this paragraph, “maintenance
period completion date” and “full-time equivalent position” have
the same meanings as defined in section 15G.101 15.327 .
Sec. 19. Section 15E.231, unnumbered paragraph 1, Code
Supplement 2011, is amended to read as follows:
In order for an economic development region to receive
moneys under the economic development financial assistance
program established in section 15G.112 assistance pursuant to
section 15.335B , an economic development region’s regional
development plan must be approved by the authority. An
economic development region shall consist of not less than
three counties, unless two contiguous counties have a combined
population of at least three hundred thousand based on the
most recent federal decennial census. An economic development
region shall establish a focused economic development effort
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that shall include a regional development plan relating to one
or more of the following areas:
Sec. 20. Section 15E.232, subsections 1, 3, 4, 5, and 6,
Code Supplement 2011, are amended to read as follows:
1. An economic development region may apply for financial
assistance from the economic development a fund established
pursuant to section 15.335B to assist with the installation
of physical infrastructure needs including, but not limited
to, horizontal infrastructure, water and sewer infrastructure,
and telecommunications infrastructure, related to the
development of fully served business and industrial sites by
one or more of the region’s economic development partners
or for the installation of infrastructure related to a
new business location or expansion. In order to receive
financial assistance pursuant to this subsection , the economic
development region must demonstrate all of the following:
a. The ability to provide matching moneys on a basis of a
one dollar contribution of local matching moneys for every two
dollars received from the economic development fund.
b. The commitment of the specific business partner
including, but not limited to, a letter of intent defining a
capital commitment or a percentage of equity.
c. That all other funding alternatives have been exhausted.
3. An economic development region may apply for financial
assistance from the economic development a fund established
pursuant to section 15.335B to assist an existing business
threatened with closure due to a potential consolidation to an
out-of-state location. The economic development region may
apply for financial assistance from the economic development
fund for the purchase, rehabilitation, or marketing of a
building that has become available due to the closing of an
existing business due to a consolidation to an out-of-state
location. In order to receive financial assistance under this
subsection , an economic development region must demonstrate the
ability to provide local matching moneys on a basis of a one
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dollar contribution of local moneys for every three dollars
received from the economic development fund.
4. An economic development region may apply for financial
assistance from the economic development a fund established
pursuant to section 15.335B to establish and operate an
entrepreneurial initiative. In order to receive financial
assistance under this subsection , an economic development
region must demonstrate the ability to provide local matching
moneys on a basis of a one dollar contribution of local moneys
for every two dollars received from the economic development
fund.
5. a. An economic development region may apply for
financial assistance from the economic development a fund
established pursuant to section 15.335B to establish and
operate a business succession assistance program for the
region.
b. In order to receive financial assistance under this
subsection , an economic development region must demonstrate
the ability to provide local matching moneys on a basis of a
one dollar contribution of local moneys for every two dollars
received from the economic development fund.
6. An economic development region may apply for financial
assistance from the economic development a fund established
pursuant to section 15.335B to implement economic development
initiatives that are either unique to the region or innovative
in design and implementation. In order to receive financial
assistance under this subsection , an economic development
region must demonstrate the ability to provide local matching
moneys on a one-to-one basis.
Sec. 21. Section 15E.351, subsection 1, Code Supplement
2011, is amended to read as follows:
1. The economic development authority shall establish and
administer a business accelerator program to provide financial
assistance for the establishment and operation of a business
accelerator for technology-based, value-added agricultural,
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information solutions, alternative and renewable energy
including the alternative and renewable energy sectors listed
in section 476.42, subsection 1 , paragraph “a” , subparagraph
(1), or advanced manufacturing start-up businesses or for a
satellite of an existing business accelerator. The program
shall be designed to foster the accelerated growth of new
and existing businesses through the provision of technical
assistance. The economic development authority may provide
financial assistance under this section from moneys allocated
for regional financial assistance for business accelerators
pursuant to section 15G.111 section 15.335B , subsection 9 2 .
Sec. 22. Section 159A.6B, subsection 2, Code Supplement
2011, is amended to read as follows:
2. The office may execute contracts in order to provide
technical support and outreach services for purposes of
assisting and educating interested persons as provided in this
section . The office may also contract with a consultant to
provide part or all of these services. The office may require
that a person receiving assistance pursuant to this section
contribute up to fifty percent of the amount required to
support the costs of contracting with the consultant to provide
assistance to the person. The office shall assist the person
in completing any technical information required in order
to receive assistance by the economic development authority
pursuant to the value-added agriculture component of the
economic development financial assistance program established
pursuant to section 15G.112 section 15.335B .
Sec. 23. Section 266.19, Code Supplement 2011, is amended
to read as follows:
266.19 Renewable fuel —— assistance.
The university shall cooperate in assisting renewable fuel
production facilities supporting livestock operations managed
by persons receiving assistance pursuant to the value-added
agriculture component of the economic development financial
assistance program established in section 15G.112 section
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15.335B .
Sec. 24. Section 455B.104, subsection 2, Code Supplement
2011, is amended to read as follows:
2. The department shall assist persons applying for
assistance to establish and operate renewable fuel production
facilities pursuant to the value-added agriculture component
of the economic development financial assistance program
established in section 15G.112 section 15.335B .
Sec. 25. Section 455B.433, Code Supplement 2011, is amended
to read as follows:
455B.433 Physical infrastructure assistance —— funding ——
liability.
1. The department of natural resources shall work in
conjunction with the economic development authority to identify
environmentally contaminated sites which qualify for the
infrastructure component of the economic development financial
assistance program established in section 15G.112 assistance
under section 15.335B as necessary physical infrastructure
projects . The department shall provide an assessment of the
site and shall provide any emergency response activities which
the department deems necessary. The department may take any
further action, including remediation of the site, that the
department deems to be appropriate and which promotes the
purposes of the necessary physical infrastructure component
project .
2. The department shall be reimbursed from the economic
development fund created in section 15G.111 by the economic
development authority for any costs incurred pursuant to this
section .
3. A person shall not have standing pursuant to section
455B.111 to commence a citizen suit which is based upon
property that is part of the infrastructure component of the
economic development financial assistance program established
in section 15G.112 receiving assistance pursuant to section
15.335B as a necessary physical infrastructure project .
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Sec. 26. RULES. The economic development authority shall
adopt rules for the implementation of this division of this
Act.
Sec. 27. EFFECTIVE UPON ENACTMENT. The following provision
or provisions of this division of this Act, being deemed of
immediate importance, take effect upon enactment:
1. The section of this division of this Act enacting section
15.331.
Sec. 28. APPLICABILITY. The following provision or
provisions of this division of this Act apply to awards of
incentives or assistance made pursuant to the high quality jobs
program or the enterprise zones program on or after the date
of enactment:
1. The section of this Act amending section 15.331.
DIVISION II
TARGETED INDUSTRIES PROGRAM
Sec. 29. Section 15.102, subsection 11, Code Supplement
2011, is amended to read as follows:
11. “Targeted industries” means the same as defined
in section 15.411, subsection 1 industries of advanced
manufacturing, biosciences, and information technology .
Sec. 30. Section 15.106B, subsection 2, paragraph d,
subparagraph (1), Code Supplement 2011, is amended by adding
the following new subparagraph division:
NEW SUBPARAGRAPH DIVISION . (g) Services related to
outreach and assistance to businesses for small business
innovation research and technology transfer pursuant to section
15.411, subsection 5.
Sec. 31. Section 15.411, Code Supplement 2011, is amended
to read as follows:
15.411 Targeted industries Innovative business development ——
internships —— technical and financial assistance.
1. As used in this part, unless the context otherwise
requires:
a. “Innovative business” means the same as defined in
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section 15E.52.
a. b. “Internship” means temporary employment of a student
that focuses on providing the student with work experience in
the student’s field of study.
b. “Targeted industries” means the industries of advanced
manufacturing, biosciences, and information technology.
2. The authority shall, upon board approval, may contract
with service providers on a case-by-case basis for services
related to statewide commercialization development in the
targeted industries of innovative businesses . Services
provided shall include all of the following:
a. Assistance provided directly to businesses by experienced
serial entrepreneurs for all of the following activities:
(1) Business plan development.
(2) Due diligence.
(3) Market assessments.
(4) Technology assessments.
(5) Other planning activities.
b. Operation and coordination of various available
competitive seed and prototype development funds.
c. Connecting businesses to private angel investors and the
venture capital community.
d. Assistance in obtaining access to an experienced pool
of managers and operations talent that can staff, mentor, or
advise start-up enterprises.
e. Support and advice for accessing sources of early stage
financing.
3. The authority shall establish and administer a program
to provide financial and technical assistance to encourage
prototype and concept development activities by innovative
businesses that have a clear potential to lead to commercially
viable products or services within a reasonable period of time
in the targeted industries . Financial assistance shall be
awarded on a per project basis upon board approval. The amount
of financial assistance available for a single project shall
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not exceed one hundred fifty thousand dollars. In order to
receive financial assistance, an applicant must demonstrate
the ability to secure one dollar of nonstate moneys for every
two dollars received from the authority. For purposes of this
section, “financial assistance” means assistance provided only
from the funds, rights, and assets legally available to the
authority pursuant to this chapter and includes but is not
limited to assistance in the form of grants, loans, forgivable
loans, and royalty payments.
4. The authority shall, upon board approval, establish
and administer a program to provide financial assistance for
projects designed to encourage collaboration between commercial
users and developers of information technology in the state
for the purpose of commercializing existing software and
applications technologies. Financial assistance shall not
exceed one hundred thousand dollars per project. In order to
receive financial assistance, an applicant must demonstrate the
ability to secure two dollars of nonstate moneys for every one
dollar received from the authority. Financial assistance shall
be awarded to projects that will result in technologies being
developed as commercial products for sale by Iowa companies
rather than as custom applications for proprietary use by a
participating firm.
5. The authority shall, upon board approval, establish
and administer a program to provide financial assistance to
businesses or departments of businesses engaged in the delivery
of information technology services in the state for the purpose
of upgrading the high-level technical skills of existing
employees. The amount of financial assistance shall not exceed
twenty-five thousand dollars for any business site. In order
to receive financial assistance, an applicant must demonstrate
the ability to secure two dollars of nonstate moneys for every
one dollar received from the authority.
6. 4. The authority shall , upon board approval, establish
and administer a targeted industries an innovative businesses
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internship program for Iowa students. For purposes of this
subsection , “Iowa student” means a student of an Iowa community
college, private college, or institution of higher learning
under the control of the state board of regents, or a student
who graduated from high school in Iowa but now attends an
institution of higher learning outside the state of Iowa. The
purpose of the program is to link Iowa students to small and
medium sized Iowa firms in the targeted industries through
internship opportunities. An Iowa employer may receive
financial assistance in an amount of one dollar for every
two dollars paid by the employer to an intern. The amount
of financial assistance shall not exceed three thousand one
hundred dollars for any single internship, or nine thousand
three hundred dollars for any single employer. In order to be
eligible to receive financial assistance under this subsection ,
the employer must have five hundred or fewer employees and must
be engaged in a targeted industry an innovative business . The
authority shall encourage youth who reside in economically
distressed areas, youth adjudicated to have committed a
delinquent act, and youth transitioning out of foster care to
participate in the targeted industries internship program.
7. The economic development authority shall work with the
department of workforce development to create a statewide
supplier capacity and product database to assist the economic
development authority in linking suppliers to Iowa-based
companies. The economic development authority may procure
technical assistance for the creation of the database from a
third party through a request for proposals process.
8. The technology commercialization committee created
pursuant to section 15.116 shall review all applications for
financial assistance and requests for proposals pursuant to
this section and make recommendations to the board.
9. In each fiscal year, the authority may transfer
additional moneys that become available to the authority
from sources such as loan repayments or recaptures of awards
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from federal economic stimulus funds to the innovation
and commercialization development fund created in section
15.412 , provided the authority spends those moneys for the
implementation of the recommendations included in the separate
consultant reports on bioscience, advanced manufacturing,
information technology, and entrepreneurship submitted to the
department in calendar years 2004, 2005, and 2006.
5. a. (1) The authority shall establish and administer
an outreach program for purposes of assisting businesses with
applications to the federal small business innovation research
and small business technology transfer programs.
(2) The goals of this assistance are to increase the number
of successful phase II small business innovation research grant
proposals in the state, increase the amount of such grant
funds awarded in the state, stimulate subsequent investment by
industry, venture capital, and other sources, and encourage
businesses to commercialize promising technologies.
b. (1) In administering the program, the authority may
provide technical and financial assistance to businesses.
Financial assistance provided pursuant to this subsection shall
not exceed twenty-five thousand dollars to any single business.
(2) The authority may require successful applicants to
repay the amount of financial assistance received, but shall
not require unsuccessful applicants to repay such assistance.
Any moneys repaid pursuant to this subsection may be used to
provide financial assistance to other applicants.
c. The authority may also provide financial assistance
for purposes of helping businesses meet the matching funds
requirements of the federal small business innovation research
and small business technology transfer programs.
d. The authority may contract with outside service providers
for assistance with the programs described in this subsection
or may delegate the functions to be performed under this
subsection to the corporation pursuant to section 15.106B.
10. 6. The board shall adopt rules pursuant to chapter 17A
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necessary for the administration of this section .
Sec. 32. Section 15.412, subsections 2 and 3, Code
Supplement 2011, are amended to read as follows:
2. Moneys in the fund are appropriated to the authority and,
with the approval of the board, shall be used to facilitate
agreements, enhance commercialization in the targeted
industries , and increase the availability of skilled workers
within the targeted industries in innovative businesses . Such
moneys shall not be used for the support of retail businesses,
health care businesses, or other businesses requiring a
professional license.
3. Moneys in the fund , with the approval of the board, may
also be used for the following purposes:
a. For assistance to entities providing student internship
opportunities.
b. For increasing career awareness training.
c. For recruiting management talent.
d. b. For assistance to entities engaged in prototype and
concept development activities.
e. c. For developing a statewide commercialization network.
f. For deploying and maintaining an Iowa entrepreneur
website.
g. For funding asset mapping and supply chain initiatives,
including for identifying methods of supporting lean
manufacturing practices or processes.
h. For information technology training.
i. For networking events to facilitate the transfer of
technology among researchers and industries.
j. For funding student competition programs.
k. For the purchase of advanced equipment and software
at Iowa community colleges in order to support training and
coursework related to the targeted industries.
Sec. 33. Section 15E.52, subsection 1, paragraph c, Code
Supplement 2011, is amended to read as follows:
c. “Innovative business” means a business applying novel
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or original methods to the manufacture of a product or the
delivery of a service. “Innovative business” includes but
is not limited to a business engaged in a targeted industry
as defined in section 15.411 the industries of advanced
manufacturing, biosciences, and information technology .
DIVISION III
OTHER ECONOMIC DEVELOPMENT CHANGES
Sec. 34. Section 15.106A, subsection 1, paragraph o, Code
Supplement 2011, is amended to read as follows:
o. Establish one or more funds within the state treasury
under the control of the authority. Moneys deposited in or
accruing to such a fund are appropriated to the authority for
purposes of administering the economic development programs in
this chapter, chapter 15E, or such other programs as directed
by law. Notwithstanding section 8.33 or 12C.7 , or any other
provision to the contrary, moneys invested by the treasurer
of state pursuant to this subsection shall not revert to the
general fund of the state and interest accrued on the moneys
shall be moneys of the authority and shall not be credited to
the general fund. The nonreversion of moneys allowed under
this paragraph does not apply to moneys appropriated to the
authority by the general assembly.
Sec. 35. REPEAL. Sections 15.103 and 15.104, Code
Supplement 2011, are repealed.
DIVISION IV
FILM TAX CREDIT PROGRAM
Sec. 36. Section 2.48, subsection 3, paragraph c,
subparagraph (5), Code 2011, is amended by striking the
subparagraph.
Sec. 37. Section 15.119, subsection 2, paragraph b, Code
Supplement 2011, is amended by striking the paragraph.
Sec. 38. Section 422.7, subsection 52, Code Supplement
2011, is amended by striking the subsection.
Sec. 39. Section 422.33, subsections 23 and 24, Code
Supplement 2011, are amended by striking the subsections.
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Sec. 40. Section 422.35, subsection 23, Code Supplement
2011, is amended by striking the subsection.
Sec. 41. Section 422.60, subsections 10 and 11, Code
Supplement 2011, are amended by striking the subsections.
Sec. 42. Section 533.329, subsection 2, paragraphs f and g,
Code Supplement 2011, are amended by striking the paragraphs.
Sec. 43. REPEAL. Sections 15.391, 15.392, 422.11T,
422.11U, 432.12J, and 432.12K, Code 2011, are repealed.
Sec. 44. REPEAL. Section 15.393, Code Supplement 2011, is
repealed.
Sec. 45. EFFECTIVE UPON ENACTMENT. This division of this
Act, being deemed of immediate importance, takes effect upon
enactment.
Sec. 46. RETROACTIVE APPLICABILITY. This division of this
Act applies retroactively to January 1, 2012, for tax years
beginning on or after that date.
Sec. 47. APPLICABILITY. This division of this Act does not
apply to contracts or agreements entered into on or before the
effective date of this division of this Act.
EXPLANATION
This bill relates to economic development and the use of
funds by affecting programs, tax incentives, and project
completion and other assistance administered by the economic
development authority. The bill diverts withholding tax
payments for such programs, incentives, and assistance. The
bill provides general spending authority to the economic
development authority for funds established pursuant to Code
section 15.106A. The bill abolishes the film tax credit
program.
HIGH QUALITY JOBS PROGRAM. Division I relates to assistance
in the high quality jobs program and related assistance and
programs.
The bill amends Code chapter 15, part 13, to provide for
assistance when providing for incentives. The bill includes
amendments to definitions, which incorporate the language of
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the definitions in Code chapter 15G, the economic development
fund and financial assistance program (formerly, the grow Iowa
values fund and program), which is repealed June 30, 2012, with
some modifications. The bill transfers the definitions of
“created job”, “maintenance period completion date”, “retained
job”, “financial assistance”, “full-time equivalent position”,
“maintenance period”, and “project completion period” from Code
section 15G.101 to Code section 15.327.
The bill transfers the definitions of “benefit”, “fiscal
impact ratio”, “project completion date”, “qualifying wage
threshold”, and “base employment level” from Code section
15G.101 to Code section 15.327, with modifications. The bill
changes the definition of “benefit” by providing that the
economic development board, rather than the authority, shall
determine any other nonwage compensation that is considered a
benefit. The bill changes the calculation of a “fiscal impact
ratio”. The estimated taxes to be received by the state from a
business would be divided by the estimated cost to the state of
providing certain project completion assistance and incentives
to the business rather than dividing the estimated taxes by
the cost of providing financial incentives to the business.
The bill amends the definition of “project completion date”
to provide that the person may be a recipient of project
completion assistance rather than financial assistance. The
bill amends the definition of “qualifying wage threshold”.
The bill provides that the qualifying wage threshold means
the “laborshed wage” as defined in the bill rather than the
county or regional wage. The bill provides that the “base
employment level” is calculated as of the date the business
applies for incentives or project completion assistance rather
than financial assistance.
The bill also adds definitions for “business engaged in
disaster recovery”, “fund”, “laborshed wage”, “necessary
physical infrastructure project”, “program support”, and
“project completion assistance” in Code section 15.327. The
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bill provides that a “business engaged in disaster recovery”
means a business located in a federally declared disaster
area that sustained substantial physical damage and closed
as a result of the disaster, but has a plan for reopening
that includes employing a substantial number of the employees
the business employed before the natural disaster. The bill
provides that “fund” means a fund created pursuant to new Code
section 15.335B. The bill provides that “laborshed wage” means
the wage level represented by those wages within two standard
deviations from the mean wage within the laborshed area, as
calculated by the authority. The bill defines “necessary
physical infrastructure project” as a project creating
necessary infrastructure for economic success by providing
the foundation for job creation, and involving investment of
capital. The bill defines “program support” as the services
necessary for the efficient administration of the high quality
jobs program. The bill defines “project completion assistance”
as financial or technical assistance provided to an eligible
business to facilitate the start-up, location, or expansion of
the business.
The bill strikes the definitions for “benefits”, “county
wage”, “qualifying wage threshold”, and “regional wage” as used
in Code section 15.335A, as those definitions placed by the
bill in Code section 15.327 also apply to Code section 15.335A.
The bill amends Code section 15.329 regarding qualifying
wage thresholds for eligible businesses. The current law
requires that any jobs created or retained pay at least
130 percent of the qualifying wage threshold at the project
completion date until the maintenance period completion
date. The bill provides that a business eligible to receive
incentives or assistance for creating or retaining jobs must
pay at least 120 percent of the qualifying wage threshold
at the project completion date until the maintenance period
completion date. The bill also eliminates a credit against
the qualifying wage threshold for businesses that create or
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retain jobs with sufficient benefits packages. However, the
bill allows the authority to provide assistance to a business
paying less than 120 percent but at least 100 percent of the
qualifying wage threshold if the business is located in an
economically distressed area. An economically distressed
area is defined in the bill as a county that ranks among the
bottom 25 counties in Iowa based on either the average monthly
unemployment level for the most recent 12-month period, or
the average annualized unemployment level for the most recent
five-year period.
The bill amends Code section 15.330 to include financial
assistance where the statutory language provides for
incentives. The bill also amends Code section 15.330 to
eliminate references to Code chapter 15G, the economic
development fund and financial assistance program, which is
repealed on June 30, 2012.
The bill provides that an agreement between the business
and the authority that specifies the requirements to be met to
confirm eligibility must include the amount and type of project
completion assistance to be provided, the amount of matching
funds from a city or county, a provision that the business
shall not close or substantially reduce operations as those
terms are modified in the bill, a provision that the proposed
project shall not negatively impact other businesses in
competition with the business being considered for assistance,
a report submitted to the authority describing violations of
environmental law or worker safety law, a provision that the
business shall only employ individuals legally authorized to
work in the state, and any terms necessary to effect compliance
with the eligibility requirements of Code section 15.329.
The bill adds a new Code section 15.330A regarding the
maintenance of agreements. The new Code section provides that
an eligible business that is receiving incentives or assistance
must meet the terms and obligations in the agreement by the
project completion date and the business must comply with the
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agreement throughout the maintenance period. If the recipient
business experiences a layoff or closure within the state, the
authority is authorized to reduce or eliminate part or all of
the incentives or assistance. The business may also be subject
to repayment of the incentives and assistance. The bill allows
the authority to enforce the terms of an agreement as necessary
and appropriate.
The bill eliminates the county wage or regional wage
calculations as a tool for determining whether to grant a
project-specific waiver. The bill also eliminates a provision
that prohibits the authority from approving more than $3.6
million worth of investment tax credits for projects with
qualifying investments of less than $1 million.
The bill provides that one or more funds shall be established
within the state treasury to be used for assistance under newly
created Code section 15.335B. One of the funds shall consist
of moneys deposited by the department of revenue pursuant to
a withholding tax diversion through new Code section 15.331.
Moneys deposited into the fund shall be used for project
completion assistance, economic development region financial
assistance, financial assistance for business accelerators, the
innovation and commercialization fund, financial assistance
to businesses engaged in disaster recovery, and financial
assistance to Iowa’s councils of governments.
The bill provides that the authority shall estimate the
revenues available for project completion and shall develop
a budget for the expenditure of funds each fiscal year. In
providing assistance, the authority shall make determinations
as to the amount and type of assistance that is most
appropriate. Each eligible business that receives assistance
under Code section 15.335B must enter into an agreement with
the authority that meets the requirements of agreements under
the high quality jobs program pursuant to Code sections 15.330
and 15.330A.
The bill provides that the authority may enter into
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agreements with recipients of financial assistance under the
high quality jobs program and the enterprise zones program that
allow for the diversion of withholding tax payments pursuant
to Code section 422.16 from the department of revenue to the
authority. The diversion amount will be 2.5 percent of gross
wages paid by eligible businesses to each employee considered
to be holding a created or retained job. The bill provides
that the authority may only deposit $10 million from this
diversion each fiscal year. The bill establishes a priority
withholding order if the employee’s wages are subject to
another withholding diversion. The bill provides that the
withholding diversion takes effect upon enactment and applies
to awards of incentives and assistance made under those
programs on or after the date of the bill’s enactment.
The bill removes references to the economic development
fund and financial assistance program and replaces it with the
assistance created by new Code section 15.335B.
TARGETED INDUSTRIES PROGRAM. Division II relates to the
targeted industries program. The term “targeted industries”
in Code section 15.411 is replaced with “innovative business”.
The bill no longer requires board approval for the authority
to contract with service providers for services related to
commercialization development. The bill removes the $150,000
limitation on financial assistance for a single project of
an innovative business. The bill removes the requirement
that the authority administer a program to provide financial
assistance for projects designed to encourage collaboration
between commercial users and developers of information
technology. The bill also removes the requirement the
authority establish and administer a program to provide
financial assistance to business or business departments
engaged in the delivery of information technology services
in the state. The bill eliminates the requirement that the
authority and department of workforce development create a
statewide supplier capacity and product database. The bill
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provides that applications for financial assistance under the
innovative businesses program no longer require a review by
the technology commercialization committee. The bill removes
the transfer provisions relating to money received by the
authority as loan repayments or recaptures of federal economic
stimulus funds. The bill requires the authority to establish
and administer an outreach program to assist businesses with
applications to the federal small business innovation research
and small business technology transfer programs. However,
the authority may contract with outside service providers for
assistance with the program or may delegate the administration
of the program to the Iowa innovation corporation pursuant to
Code section 15.106B. The authority may provide technical
or financial assistance and may require that successful
applicants repay any financial assistance received. The
bill specifies that moneys appropriated to the innovation
and commercialization development fund shall not be used for
retail businesses, health care businesses, or other businesses
requiring a professional license. The bill also reduces the
number of purposes for which money in the innovation and
commercialization development fund may be used.
OTHER ECONOMIC DEVELOPMENT CHANGES. Division III of the
bill repeals Code sections 15.103 and 15.104, relating to the
economic development board, which was replaced by the economic
development authority board in Code section 15.105.
The bill provides spending authority for moneys deposited
in or accruing to funds established pursuant to Code section
15.106A for the purposes of administering economic development
programs in Code chapters 15 and 15E, or other programs as
directed by law.
FILM TAX CREDIT PROGRAM. Division IV repeals the film tax
credit program and the tax credits provided under that program.
The bill makes changes corresponding to the repeal of the
program and the related tax credits.
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