House File 642 - Introduced HOUSE FILE 642 BY COMMITTEE ON ECONOMIC GROWTH AND TECHNOLOGY (SUCCESSOR TO HSB 147) A BILL FOR An Act establishing the major economic growth attraction 1 program to be administered by the economic development 2 authority, and providing penalties. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1228HV (2) 90 ko/jh
H.F. 642 Section 1. Section 9I.3, subsection 3, Code 2023, is amended 1 by adding the following new paragraph: 2 NEW PARAGRAPH . f. (1) An interest in agricultural land 3 acquired by a foreign business for an immediate use other than 4 farming if all of the following requirements are met: 5 (a) The foreign business qualifies as an eligible business 6 pursuant to section 15.283. 7 (b) The foreign business is incorporated under the laws of 8 a foreign country that is an allied country and the foreign 9 business is wholly owned directly or indirectly by nonresident 10 aliens of an allied country, or is a business entity, whether 11 or not incorporated, which is wholly owned directly or 12 indirectly by nonresident aliens of an allied country. As part 13 of the foreign businesss application under section 15.284, 14 the foreign business provides documentation to the authority, 15 as deemed necessary by the authority, to establish that the 16 foreign business is incorporated under the laws of a foreign 17 country that is an allied country and the foreign business is 18 wholly owned directly or indirectly by nonresident aliens of 19 an allied country; or is a business entity, whether or not 20 incorporated, which is wholly owned directly or indirectly by 21 nonresident aliens of an allied country. 22 (c) The agricultural land is a mega site, or included in a 23 mega site. 24 (d) The foreign business is not actively engaged in farming. 25 (e) The board authorizes the acquisition of the 26 agricultural land under the MEGA program administered by the 27 economic development authority pursuant to sections 15.281 28 through 15.289. 29 (2) As used in this paragraph: 30 (a) Actively engaged in farming means the same as defined 31 in section 15.282. 32 (b) Allied country means the same as defined in 10 U.S.C. 33 2350f(d)(1). 34 (c) Authority means the economic development authority. 35 -1- LSB 1228HV (2) 90 ko/jh 1/ 20
H.F. 642 (d) Board means the members of the authority appointed by 1 the governor and in whom the powers of the authority are vested 2 pursuant to section 15.105. 3 (e) Certified site means a site that has been issued a 4 certificate of readiness by the authority pursuant to section 5 15E.18. 6 (f) Mega site means the same as defined in section 15.282. 7 Sec. 2. NEW SECTION . 15.281 Short title. 8 This part shall be known and may be cited as the Major 9 Economic Growth Attraction Program or MEGA Program . 10 Sec. 3. NEW SECTION . 15.282 Definitions. 11 As used in this part, unless the context otherwise requires: 12 1. Actively engaged in farming means any of the following: 13 a. Performing physical work which significantly contributes 14 to crop or livestock production. 15 b. Regularly and frequently making or taking an important 16 part in making management decisions substantially contributing 17 to or affecting the success of a farms operations. 18 2. Base employment level means the number of full-time 19 equivalent positions at a business, as established by the 20 authority and the business using the businesss payroll 21 records, as of the date the business applies for tax incentives 22 under the program. 23 3. Benefit means nonwage compensation provided to an 24 employee. Benefits include medical and dental insurance, a 25 pension, a retirement plan, a profit-sharing plan, child care, 26 life insurance, vision insurance, and disability insurance. 27 4. Certified site means a site that has been issued a 28 certificate of readiness by the authority pursuant to section 29 15E.18. 30 5. Community means a city, county, or entity established 31 pursuant to chapter 28E. 32 6. Contract completion means the date of completion of 33 the terms of a contract between a contractor and an eligible 34 business. 35 -2- LSB 1228HV (2) 90 ko/jh 2/ 20
H.F. 642 7. Contractor means a person that has executed a contract 1 with an eligible business for the provision of property, 2 materials, or services for the construction or equipping of a 3 facility that is part of the eligible businesss project. 4 8. Created jobs or create jobs means new, permanent, 5 full-time equivalent positions added to an eligible businesss 6 payroll in excess of the eligible businesss base employment 7 level. 8 9. Data center business means the same as defined in 9 section 423.3, subsection 95. 10 10. Eligible business means a business that meets the 11 requirements of section 15.283. 12 11. Foreign business means the same as defined in section 13 9I.1. 14 12. Full-time equivalent position means a non-part-time 15 position for the number of hours or days per week considered 16 to be full-time work for the kind of service or work performed 17 for an employer. Typically, a full-time equivalent position 18 requires two thousand eighty hours of work in a calendar year, 19 including all paid holidays, vacations, sick time, and other 20 paid leave. 21 13. Maintenance period means the period of time between 22 the project completion date and the maintenance period 23 completion date during which an eligible business must maintain 24 all created jobs per the agreement under section 15.285. 25 14. Maintenance period completion date means the date on 26 which the maintenance period ends. 27 15. Mega site means a certified site greater than one 28 thousand acres. 29 16. Program means the major economic growth attraction 30 program. 31 17. Project means an activity or set of activities 32 directly related to the start-up or location of an eligible 33 business, proposed in an eligible businesss application to the 34 program, that will accomplish the goals of the program. 35 -3- LSB 1228HV (2) 90 ko/jh 3/ 20
H.F. 642 18. Project completion date means the date by which an 1 eligible business that has been approved by the authority to 2 participate in the program agrees to complete the terms and 3 conditions of the agreement under section 15.285. 4 19. Project completion period means the period of time 5 between the date the authority approves an eligible business to 6 participate in the program and the project completion date. 7 20. Qualifying investment means a capital investment 8 in real property located on a certified site, including the 9 purchase price of the land, site preparation, infrastructure, 10 and building construction. Qualifying investment also means a 11 capital investment in depreciable assets. 12 21. Qualifying wage threshold means the wage level 13 represented by the wages within two standard deviations of 14 the mean wage within the laborshed area in which the eligible 15 business is located, as calculated by the authority by rule, 16 using the most current covered wage and employment data 17 available from the department of workforce development for the 18 laborshed area in which the eligible business is located. 19 22. Subcontractor means a person that contracts with 20 a contractor for the provision of property, materials, or 21 services for the construction or equipping of a facility that 22 is part of an eligible businesss project. 23 23. Tax incentives means tax credits, tax refunds, or tax 24 exemptions authorized under the program by the authority for an 25 eligible business. 26 Sec. 4. NEW SECTION . 15.283 Eligible business. 27 1. To be eligible to receive tax incentives under 28 the program, a business must meet all of the following 29 requirements: 30 a. The businesss proposed project must be located on a 31 certified site greater than two hundred fifty acres that the 32 authority has determined is suitable for the project. 33 b. The businesss qualifying investment in the proposed 34 project must exceed one billion dollars. 35 -4- LSB 1228HV (2) 90 ko/jh 4/ 20
H.F. 642 c. The community in which the proposed project is located 1 must approve the project either by ordinance or resolution. 2 d. (1) The business must be primarily engaged in advanced 3 manufacturing, biosciences, or research and development. 4 The business shall not be a data center business, a retail 5 business, or a business where a cover charge or membership 6 requirement restricts certain individuals from entering the 7 business. 8 (2) Factors the authority shall consider to determine if 9 a business is primarily engaged in advanced manufacturing, 10 biosciences, or research and development shall include but are 11 not limited to all of the following: 12 (a) The businesss North American industry classification 13 system code. 14 (b) The businesss main sources of revenue. 15 (c) The businesss customer base. 16 e. (1) The business must not be solely relocating 17 operations from one area of the state to another area of 18 the state. A proposed project that does not create jobs or 19 involve a substantial amount of new capital investment shall 20 be presumed to be a relocation of operations. For purposes of 21 this subparagraph, the authority shall consider a letter from 22 the affected local communitys government officials supporting 23 the businesss move away from the affected local community 24 in making a determination whether the business is solely 25 relocating operations. 26 (2) This paragraph shall not be construed to prohibit 27 a business from expanding the businesss operations in a 28 community if the business has similar operations in this state 29 that are not closing or undergoing a substantial reduction in 30 operations. 31 f. The business must create jobs as part of the businesss 32 proposed project. The business must demonstrate that the 33 created jobs will pay at least one hundred forty percent of the 34 qualifying wage threshold by the project completion date, and 35 -5- LSB 1228HV (2) 90 ko/jh 5/ 20
H.F. 642 through the maintenance period completion date. 1 g. The business must provide comprehensive benefits to 2 each employee employed in a created job. The authority may 3 adopt rules under chapter 17A to determine the requirements for 4 comprehensive benefits. 5 h. (1) The business must not have a record of violations 6 of the law or of regulations, including but not limited to 7 antitrust, environmental, trade, or worker safety, that over 8 a period of time show a consistent pattern or that establish 9 the businesss intentional, criminal, or reckless conduct in 10 violation of such laws or regulations. 11 (2) If the authority determines that the business has a 12 record of violations described in subparagraph (1), and the 13 authority finds that the violations did not seriously affect 14 public health, public safety, or the environment, the business 15 may be eligible to qualify for tax incentives under the 16 program. 17 (3) If the authority determines that the business has 18 a record of violations described in subparagraph (1), and 19 the authority finds that there were mitigating circumstances 20 related to the violations, the business may be eligible to 21 qualify for tax incentives under the program. 22 (4) In making determinations and findings under 23 subparagraphs (2) and (3), and making a determination whether a 24 business is disqualified from the program, the authority shall 25 be exempt from chapter 17A. 26 2. a. In determining if a business is eligible to 27 participate in the program, the authority shall consider a 28 variety of factors, including but not limited to all of the 29 following: 30 (1) The quality of the businesss proposed projects 31 created jobs. The authority shall place greater emphasis on 32 created jobs that are high wage, low turnover, that provide 33 comprehensive benefits, and that expose employees to minimal 34 occupational hazards. A business that pays wages substantially 35 -6- LSB 1228HV (2) 90 ko/jh 6/ 20
H.F. 642 below that of similar businesses located in the same geographic 1 area shall not be given priority under the program. 2 (2) The impact of the businesss proposed project on 3 businesses that are in competition with the business. 4 The authority shall make a good-faith effort to identify 5 existing Iowa businesses in competition with the business 6 being considered for the program. The authority shall make 7 a good-faith effort to determine the probability that any 8 proposed tax incentives will displace employees of the 9 competing businesses. In determining the impact on the 10 competing businesses, created jobs resulting from employees 11 being displaced from the competing businesses shall not be 12 counted as created jobs for the applying businesss project. 13 (3) The businesss proposed projects economic impact 14 on the state. The authority shall place greater emphasis 15 on businesses and proposed projects that meet the following 16 requirements: 17 (a) The business has a high proportion of in-state 18 suppliers. 19 (b) The proposed project will diversify the state economy. 20 (c) The business has few in-state competitors. 21 (d) The proposed project has the potential to create jobs on 22 an ongoing basis. 23 (e) Any other factors the authority deems relevant in 24 determining the economic impact of a proposed project. 25 Sec. 5. NEW SECTION . 15.284 Applications authorization 26 of tax credits and exemptions. 27 1. Applications for the program shall be submitted to the 28 authority in the form and manner prescribed by the authority by 29 rule. Each application must be accompanied by an application 30 fee in an amount determined by the authority by rule. 31 2. In determining the eligibility of a business to 32 participate in the program, the authority may engage outside 33 experts to complete a technical, financial, or other review 34 of an application submitted by a business if such review is 35 -7- LSB 1228HV (2) 90 ko/jh 7/ 20
H.F. 642 outside the expertise of the authority. 1 3. a. The authority and the board may negotiate with an 2 eligible business regarding the terms of, and the aggregate 3 value of, the tax incentives the eligible business may receive 4 under the program. 5 b. The board may authorize any combination of tax incentives 6 available under the program for an eligible business. 7 4. The board may authorize an exemption to restrictions on 8 agricultural land holdings pursuant to section 9I.3, subsection 9 3, paragraph f . 10 Sec. 6. NEW SECTION . 15.285 Agreement. 11 1. An eligible business that is approved by the authority to 12 participate in the program shall enter into an agreement with 13 the authority that specifies the criteria for the successful 14 completion of all requirements of the program. The agreement 15 must contain, at a minimum, provisions related to all of the 16 following: 17 a. The eligible business must certify to the authority 18 annually that the business is in compliance with the agreement. 19 b. If the eligible business fails to comply with any 20 requirements of the program or the agreement, the eligible 21 business may be required to repay any tax incentives the 22 authority issued to the eligible business. A required 23 repayment of a tax incentive shall be considered a tax payment 24 due and payable to the department of revenue by any taxpayer 25 that claimed the tax incentive, and the failure to make the 26 repayment may be treated by the department of revenue in the 27 same manner as a failure to pay the tax shown due, or required 28 to be shown due, with the filing of a return or deposit form. 29 c. If the eligible business undergoes a layoff or 30 permanently closes any of its facilities within the state, the 31 eligible business may be subject to all of the following: 32 (1) A reduction or elimination of some or all of the tax 33 incentives the authority issued to the eligible business. 34 (2) Repayment of any tax incentives that the business 35 -8- LSB 1228HV (2) 90 ko/jh 8/ 20
H.F. 642 has claimed, and payment of any penalties assessed by the 1 department of revenue. 2 d. The project completion date, the maintenance period 3 completion date, the required number of created jobs, the 4 qualifying wage threshold that is applicable to the project, 5 the amount of qualifying investment, the maximum aggregate 6 value of the tax incentives authorized by the board, and any 7 other terms and obligations the authority deems necessary. 8 e. The eligible business shall only employ individuals 9 legally authorized to work in this state. If the eligible 10 business is found to knowingly employ individuals who are 11 not legally authorized to work in this state, in addition 12 to any penalties provided by law, all or a portion of any 13 tax incentives issued by the authority shall be subject to 14 recapture by the authority or the department of revenue. 15 f. Any terms deemed necessary by the authority to effect the 16 eligible businesss ongoing compliance with section 15.283. 17 2. The business shall satisfy all applicable terms of 18 the agreement by the project completion date; however, the 19 board may for good cause extend the project completion date or 20 otherwise amend the terms of the agreement. The board shall 21 not amend the terms of the agreement to allow an increase in 22 the maximum aggregate value of the tax incentives authorized by 23 the board under section 15.284, subsection 3. 24 3. The eligible business shall not assign the agreement 25 to another entity without the advance written approval of the 26 board. 27 4. The authority may enforce the terms of the agreement as 28 necessary and appropriate. 29 Sec. 7. NEW SECTION . 15.286 Sales and use tax refund. 30 1. An eligible business that has been issued a tax incentive 31 certificate under the program shall be entitled to a refund 32 of the sales and use taxes paid under chapter 423 for gas, 33 electricity, water, and sewer utility services, tangible 34 personal property, or on services rendered, furnished, or 35 -9- LSB 1228HV (2) 90 ko/jh 9/ 20
H.F. 642 performed to or for a contractor or subcontractor and used 1 in the fulfillment of the contract for the construction or 2 equipping of a facility that is part of the eligible businesss 3 project. Taxes attributable to intangible property and 4 furniture and furnishings shall not be refunded. 5 2. To receive the sales and use tax refund, the eligible 6 business shall file a claim with the department of revenue as 7 follows: 8 a. The contractor or subcontractor shall state under oath, 9 on forms provided by the department of revenue, the amount of 10 the sales of tangible personal property or services rendered, 11 furnished, or performed including water, sewer, gas, and 12 electric utility services upon which sales or use tax has been 13 paid prior to contract completion, and shall submit the forms 14 to the eligible business before contract completion. 15 b. The eligible business shall inform the department of 16 revenue in writing of contract completion. The eligible 17 business shall, after contract completion, submit an 18 application to the department of revenue for a refund of the 19 amount of the sales and use taxes paid pursuant to chapter 423 20 upon any tangible personal property, or services rendered, 21 furnished, or performed, including water, sewer, gas, and 22 electric utility services. The application shall be submitted 23 in the form and manner prescribed by the department of revenue. 24 The department of revenue shall audit the application and, 25 if approved, issue a warrant to the eligible business in the 26 amount of the sales or use tax which has been paid to the 27 state of Iowa under subsection 1. The eligible businesss 28 application must be submitted to the department of revenue 29 within one year after the project completion date. An 30 application filed by the eligible business in accordance with 31 this section shall not be denied by reason of a limitation set 32 forth in chapter 421 or 423. 33 c. The refund shall be remitted by the department of revenue 34 to the eligible business equally over five tax years. 35 -10- LSB 1228HV (2) 90 ko/jh 10/ 20
H.F. 642 3. A contractor or subcontractor that willfully makes a 1 false report of tax paid under this section is guilty of an 2 aggravated misdemeanor, and shall be liable for payment of the 3 tax and any applicable penalty and interest. 4 Sec. 8. NEW SECTION . 15.286A Qualifying investment tax 5 credit. 6 1. The authority may authorize a tax credit for an eligible 7 business that is up to five percent of the eligible businesss 8 qualifying investment in a certified site. The eligible 9 business shall not claim the tax credit until the eligible 10 businesss project has been placed in service, and at least 11 fifty percent of the created jobs the eligible business 12 agreed to in the agreement under section 15.285, and that 13 pay at least one hundred forty percent of the qualifying 14 wage threshold, have been added to the eligible businesss 15 payroll. The department of revenue shall remit the tax credit 16 to the eligible business equally over five tax years. The tax 17 credit shall be allowed against taxes imposed under chapter 18 422, subchapter II, III, or V, and against the moneys and 19 credits tax imposed in section 533.329. If the eligible 20 business is a partnership, S corporation, limited liability 21 company, cooperative organized under chapter 501 and filing 22 as a partnership for federal tax purposes, or estate or trust 23 electing to have the income taxed directly to the individual, 24 an individual may claim the tax credit allowed. The amount 25 claimed by the individual shall be based upon the pro rata 26 share of the individuals earnings of the partnership, S 27 corporation, limited liability company, cooperative organized 28 under chapter 501 and filing as a partnership for federal tax 29 purposes, or estate or trust. Any tax credit in excess of 30 the eligible businesss tax liability for the tax year may be 31 refunded or, at the eligible businesss election, credited to 32 the eligible businesss tax liability in any of the following 33 five consecutive tax years or until depleted, whichever occurs 34 first. A tax credit shall not be carried back to a tax year 35 -11- LSB 1228HV (2) 90 ko/jh 11/ 20
H.F. 642 prior to the tax year in which the tax credit is first claimed 1 by the eligible business. 2 2. If within five years of the date the authority issues 3 an eligible business a tax credit under subsection 1, the 4 eligible business sells, disposes of, razes, or otherwise 5 renders unusable all or a part of the land, buildings, or 6 other structures for which the tax credit was claimed under 7 this section, the tax liability of the eligible business for 8 the year in which all or part of the land, buildings, or other 9 existing structures are sold, disposed of, razed, or otherwise 10 rendered unusable shall be increased by one of the following 11 amounts: 12 a. One hundred percent of the tax credit claimed under 13 this section if all or a part of the land, buildings, or other 14 structures for which the tax credit was claimed under this 15 section cease to be eligible for the tax credit within one 16 year after the date the authority issued the tax credit to the 17 eligible business. 18 b. Eighty percent of the tax credit claimed under this 19 section if all or a part of the land, buildings, or other 20 structures for which the tax credit was claimed under this 21 section cease to be eligible for the tax credit within two 22 years after the date the authority issued the tax credit to the 23 eligible business. 24 c. Sixty percent of the tax credit claimed under this 25 section if all or a part of the land, buildings, or other 26 structures for which the tax credit was claimed under this 27 section cease to be eligible for the tax credit within three 28 years after the date the authority issued the tax credit to the 29 eligible business. 30 d. Forty percent of the tax credit claimed under this 31 section if all or a part of the land, buildings, or other 32 structures for which the tax credit was claimed under this 33 section cease to be eligible for the tax credit within four 34 years after the date the authority issued the tax credit to the 35 -12- LSB 1228HV (2) 90 ko/jh 12/ 20
H.F. 642 eligible business. 1 e. Twenty percent of the tax credit claimed under this 2 section if all or a part of the land, buildings, or other 3 structures for which the tax credit was claimed under this 4 section cease to be eligible for the tax credit within five 5 years after the date the authority issued the tax credit to the 6 eligible business. 7 Sec. 9. NEW SECTION . 15.286B Withholding tax credit. 8 1. From the remittance due to the department of revenue 9 pursuant to section 422.16, subsection 2, an eligible business 10 may withhold an amount not to exceed three percent of the gross 11 wages paid to each employee in a created job that pays at least 12 the qualifying wage threshold pursuant to the agreement under 13 section 15.285. 14 2. If the amount withheld under subsection 1 is less than 15 three percent of the gross wages paid to each employee in a 16 created job that pays at least one hundred forty percent of 17 the qualifying wage threshold, the eligible business shall 18 receive a credit against the remaining withholding taxes due 19 from the eligible business, or the eligible business may carry 20 the credit forward up to five consecutive tax years or until 21 depleted, whichever is earlier. 22 3. In any tax year, the aggregate amount of withholding tax 23 credit under this section and under any other program for which 24 an eligible business is receiving a withholding tax credit 25 shall not exceed the amount the eligible business is required 26 to deduct and remit to the department of revenue under section 27 422.16, subsection 2, for that tax year. 28 Sec. 10. NEW SECTION . 15.287 Foreign businesses 29 acquisition of agricultural land. 30 1. If a foreign businesss proposed project is located on a 31 mega site that includes agricultural land, the requirements of 32 section 9I.3, subsection 3, paragraph f , must be satisfied in 33 order for the foreign business to be eligible for the program. 34 2. a. A foreign business under subsection 1 that is 35 -13- LSB 1228HV (2) 90 ko/jh 13/ 20
H.F. 642 approved by the authority to participate in the program shall 1 enter into an agreement with the authority pursuant to section 2 15.285. The agreement shall include a provision that requires 3 the foreign business to comply with chapter 9I, and specifies 4 that failure to do so may result in revocation of all tax 5 incentives issued by the authority to the foreign business. 6 b. The authority may grant the foreign business one or 7 more one-year extensions in which the foreign business must 8 comply with section 9I.4. The authority shall not grant 9 more than five one-year extensions. The community in which 10 the agricultural land is located must approve each one-year 11 extension by ordinance or resolution prior to the authority 12 granting each extension. The foreign business shall comply 13 with the remaining provisions of chapter 9I to the extent the 14 provisions do not conflict with this section. 15 Sec. 11. NEW SECTION . 15.288 Other incentives. 16 1. Except for the high quality jobs program administered 17 by the authority pursuant to sections 15.326 through 15.336, 18 and the targeted jobs withholding credit pursuant to section 19 403.19A, an eligible business may apply for and be eligible to 20 receive other federal, state, and local incentives in addition 21 to the tax incentives issued by the authority to the eligible 22 business under the program. 23 2. The authority, in its discretion, may prohibit an 24 eligible business that has been issued tax incentives under 25 the program from receiving any additional tax incentive, tax 26 credit, grant, loan, or other financial assistance under any 27 program administered by the authority. 28 Sec. 12. NEW SECTION . 15.289 Property tax exemption. 29 1. A community in which an eligible businesss project 30 is located may grant the eligible business a property tax 31 exemption for all of, or a portion of, the actual value added 32 by improvements to real property directly related to the 33 eligible businesss created jobs. The community may allow a 34 property tax exemption for a period not to exceed twenty years 35 -14- LSB 1228HV (2) 90 ko/jh 14/ 20
H.F. 642 beginning the year that the improvements to real property are 1 first assessed for taxation. 2 2. For purposes of this section, improvements means new 3 construction, and rehabilitation of and additions to existing 4 structures. 5 3. A property tax exemption granted under subsection 1 shall 6 apply to all taxing districts, except for school districts, in 7 which the real property is located. 8 EXPLANATION 9 The inclusion of this explanation does not constitute agreement with 10 the explanations substance by the members of the general assembly. 11 This bill establishes a major economic growth attraction 12 program (program) to be administered by the economic 13 development authority (authority). 14 To be eligible to receive tax incentives (incentives) under 15 the program, a businesss proposed project (project) must 16 be located on a certified site greater than 250 acres that 17 the authority has determined is suitable for the project, 18 and the businesss qualifying investment in the project must 19 exceed $1 billion. Other requirements for a business to be 20 eligible for the program are detailed in the bill. Qualifying 21 investment is defined in the bill as a capital investment 22 in real property located on a certified site, including the 23 purchase price of the land, site preparation, infrastructure, 24 and building construction. Qualifying investment also means 25 a capital investment in depreciable assets. Certified site 26 is defined as a site that has been issued a certificate of 27 readiness by the authority pursuant to Code section 15E.18. 28 Tax incentives and project are also defined in the bill. 29 In determining if a business is eligible to participate 30 in the program, the authority shall consider a variety of 31 factors, including but not limited to whether the jobs created 32 by the businesss project are high wage, low turnover, provide 33 comprehensive benefits, and expose employees to minimal 34 occupational hazards; the impact of the project on businesses 35 -15- LSB 1228HV (2) 90 ko/jh 15/ 20
H.F. 642 that compete with the business applying to the program; and 1 the projects economic impact on the state. The bill requires 2 the authority to place greater emphasis on businesses that 3 have a high proportion of in-state suppliers and few in-state 4 competitors; and on projects that diversify the state economy 5 and have the potential to create jobs on an ongoing basis. 6 Applications for the program shall be submitted in the 7 form and manner prescribed by the authority by rule and be 8 accompanied by an application fee in an amount determined by 9 the authority by rule. In determining a businesss eligibility 10 for the program, the authority may engage outside experts 11 to complete a technical, financial, or other review of an 12 application if such review is outside the expertise of the 13 authority. The authority and the authoritys board (board) 14 may negotiate with an eligible business regarding the terms 15 of, and the aggregate value of, the incentives the eligible 16 business may receive under the program. The board may 17 authorize any combination of incentives available under the 18 program for an eligible business. The board may authorize an 19 exemption to restrictions on agricultural land holdings for a 20 foreign business that qualifies for the program pursuant to 21 the requirements detailed in the bill. Foreign business is 22 defined in the bill. 23 The bill requires an eligible business that is approved to 24 participate in the program to enter into an agreement with 25 the authority that specifies the criteria for the successful 26 completion of all requirements of the program. The agreement 27 shall contain, at a minimum, the provisions as detailed in 28 the bill. The business shall satisfy all applicable terms of 29 the agreement by the project completion date; however, the 30 board may for good cause extend the project completion date or 31 otherwise amend the terms of the agreement. The board shall 32 not amend the agreement to allow an increase in the maximum 33 aggregate value of the incentives originally authorized by 34 the board. Project completion date is defined in the bill. 35 -16- LSB 1228HV (2) 90 ko/jh 16/ 20
H.F. 642 The bill permits the authority to enforce the terms of the 1 agreement as necessary and appropriate. 2 An eligible business that has been issued a certificate 3 under the program shall be entitled to a refund of the sales 4 and use taxes (refund) paid under Code chapter 423 for gas, 5 electricity, water, and sewer utility services, tangible 6 personal property, or on services rendered, furnished, or 7 performed to or for a contractor or subcontractor and used in 8 the fulfillment of the contract relating to the construction or 9 equipping of a facility that is part of the eligible businesss 10 project. Taxes attributable to intangible property and 11 furniture and furnishings shall not be refunded. The procedure 12 for the business to receive the refund is detailed in the 13 bill. The refund shall be remitted by the department to the 14 eligible business equally over five tax years. A contractor or 15 subcontractor that willfully makes a false report of tax paid 16 is guilty of an aggravated misdemeanor, and shall be liable for 17 payment of the tax and any applicable penalty and interest. An 18 aggravated misdemeanor is punishable by confinement for no more 19 than two years and a fine of at least $855 but not more than 20 $8,540. 21 The authority may authorize a tax credit for an eligible 22 business that is up to 5 percent of the businesss qualifying 23 investment in a certified site. The eligible business 24 shall not claim the tax credit until the eligible businesss 25 project has been placed in service, and at least 50 percent 26 of the created jobs the eligible business agreed to in the 27 agreement, and that pay at least 140 percent of the qualifying 28 wage threshold, have been added to the eligible businesss 29 payroll. The department shall remit the tax credit to the 30 eligible business equally over five tax years. The tax credit 31 shall be allowed against taxes imposed under Code chapter 32 422, subchapter II, III, or V, and against the moneys and 33 credits tax imposed in Code section 533.329. Any tax credit 34 in excess of the eligible businesss tax liability for the tax 35 -17- LSB 1228HV (2) 90 ko/jh 17/ 20
H.F. 642 year may be refunded or, at the eligible businesss election, 1 credited to the eligible businesss tax liability in each of 2 the following five consecutive tax years or until depleted, 3 whichever occurs first. A tax credit shall not be carried back 4 to a tax year prior to the tax year in which the tax credit 5 is first claimed by the eligible business. If within five 6 years of the date the authority issues an eligible business a 7 qualifying investment tax credit the eligible business sells, 8 disposes of, razes, or otherwise renders unusable all or a part 9 of the land, buildings, or other structures for which the tax 10 credit was claimed, the tax liability of the eligible business 11 for the year in which all or part of the land, buildings, or 12 other existing structures are sold, disposed of, razed, or 13 otherwise rendered unusable shall be increased by an amount as 14 detailed in the bill. 15 From the remittance due to the department of revenue 16 pursuant to Code section 422.16(2), an eligible business may 17 withhold an amount not to exceed 3 percent of the gross wages 18 paid to each employee in a created job that pays at least 19 the qualifying wage threshold specified in the agreement the 20 business entered into with the authority. Created job and 21 qualifying wage threshold are defined in the bill. If the 22 amount withheld is less than 3 percent of the gross wages 23 paid to each employee in a created job that pays at least 140 24 percent of the qualifying wage threshold, the eligible business 25 shall receive a credit against the remaining withholding 26 taxes due from the business, or the business may carry the 27 credit forward up to five consecutive tax years or until 28 depleted, whichever is earlier. In any tax year, the aggregate 29 amount of withholding tax credit under this program, and any 30 other program for which an eligible business is receiving 31 a withholding tax credit, shall not exceed the amount the 32 eligible business is required to deduct and remit to the 33 department of revenue under Code section 422.16(2) for that tax 34 year. 35 -18- LSB 1228HV (2) 90 ko/jh 18/ 20
H.F. 642 If a foreign businesss proposed project is located on a 1 mega site that includes agricultural land, the requirements as 2 detailed in the bill must be satisfied for the foreign business 3 to be eligible for the program. Mega site is defined in the 4 bill as a certified site greater than 1,000 acres. A foreign 5 business that is approved by the authority to participate in 6 the program shall enter into an agreement with the authority 7 that includes a provision that requires the foreign business 8 to comply with Code chapter 9I, and specifies that failure to 9 do so may result in revocation of incentives issued by the 10 authority to the foreign business. The authority may grant the 11 foreign business one or more one-year extensions in which the 12 foreign business must come into compliance with Code section 13 9I.4. The authority shall not grant a business more than five 14 one-year extensions. The community in which the agricultural 15 land is located must approve each extension by ordinance or 16 resolution prior to the authority granting each extension. 17 Except for the high quality jobs program, and the targeted 18 jobs withholding credit, an eligible business may apply 19 for and be eligible to receive other federal, state, and 20 local incentives in addition to the incentives the authority 21 issues to the business under the program. The authority, in 22 its discretion, may prohibit an eligible business that has 23 been issued incentives under the program from receiving any 24 additional tax incentive, tax credit, grant, loan, or other 25 financial assistance under any program administered by the 26 authority. 27 The bill allows a community in which an eligible businesss 28 project is located to grant the eligible business a property 29 tax exemption (exemption) for all of, or a portion of, the 30 actual value added by improvements to real property directly 31 related to the eligible businesss created jobs. The community 32 may allow an exemption for a period not to exceed 20 years 33 beginning the year that the improvements are first assessed 34 for taxation. Improvements is defined as new construction, 35 -19- LSB 1228HV (2) 90 ko/jh 19/ 20
H.F. 642 and rehabilitation of and additions to existing structures. 1 An exemption granted by a community shall apply to all taxing 2 districts, except for school districts, in which the real 3 property is located. 4 -20- LSB 1228HV (2) 90 ko/jh 20/ 20