Iowa House Bill HF2674

Iowa 2023-2024 Regular Session

• Introduced: 3/27/24
• Engrossed: 4/2/24
• Refer: 4/2/24

Caption

A bill for an act relating to tax credits awarded by the economic development authority for specific capital contributions made to certified rural business growth funds for investment in qualified businesses.(Formerly HSB 722.)

Impact

The program sets parameters for the approval of growth funds, including a monetary limit where no more than $45 million in eligible investment authority and $27 million in credit-eligible contributions may be approved in total. It also outlines that groups applying for certification as growth funds must provide detailed documentation illustrating their governance and previous performance in administering funds. Reports will be required to assure compliance with job creation expectations, further tying the program's success to concrete outcomes in the workforce.

Summary

House File 2674 establishes a Rural Development Tax Credit Program aimed at incentivizing investment in rural business growth funds. The bill mandates that funds meeting certain criteria can receive tax credits for capital contributions made towards qualified businesses, specifically those located outside the 12 most populous counties in Iowa and employing fewer than 250 workers. The bill's approach is designed to stimulate economic activity in underserved areas by leveraging private investments to foster job creation and sustain local enterprises.

Contention

Some notable points of contention surrounding HF2674 include the concern over the adequacy of limits placed on investment amounts and the effectiveness of such programs to create sustainable jobs. While supporters argue that the tax incentives are a necessary measure to boost local economies, critics question if reliance on tax credits adequately addresses deeper systemic issues, such as infrastructure and workforce development, which are crucial for the long-term viability of rural businesses. Additionally, there will be scrutiny on monitoring measures ensuring accountability for the funds distributed and jobs reported.